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March 6, 2017
April 11, 2024
To Our Stockholders:
You are cordially invited to attend the 20172024 Annual Meeting of Stockholders of Esperion Therapeutics, Inc. on Monday, April 17, 2017,Thursday, May 23, 2024, at 8:00 a.m. Eastern Time (the "Annual Meeting") to be held as a virtual meeting, at which you will be able tomay attend online via live webcast, vote your shares electronically and submit your questions at by visiting www.virtualshareholdermeeting.com/ESPR2017.
ESPR2024
.The accompanying Notice of 20172024 Annual Meeting of Stockholders (the "Notice") and the Proxy Statement for the Annual Meeting (the "Proxy Statement") contain details of the business to be conducted at the Annual Meeting and information you should consider when you vote your shares.
At the Annual Meeting, the agenda includes (1) the election of threetwo Class II director nominees to our board of directors, (2) the approval, by non-binding advisory vote, of the compensation of our named executive officers, (3) the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 20172024, (4) the approval of an amendment to the Esperion Therapeutics, Inc. 2022 Stock Option and (4)Incentive Plan, as amended (the "2022 Plan") to transactincrease the aggregate number of shares of common stock authorized for issuance under the 2022 Plan by 6,250,000 shares (the “2022 Plan Amendment”), (5) the approval of an amendment to the Esperion Therapeutics, Inc. 2020 Employee Stock Purchase Plan, as amended (the "ESPP") to increase the number of shares of common stock reserved for future issuance under the ESPP by 6,175,000 shares (the "ESPP Amendment"), and (6) the transaction of any other business that may properly comescome before the Annual Meeting. TheMeeting (including any adjournments and postponements thereof). Our Board of Directors unanimously recommends that you voteFOR the election of each director nominee,FOR the advisory resolutions approving the compensation of our named executive officers, andFOR the ratification of the appointment of Ernst & Young LLP.LLP,
FOR the approval of the 2022 Plan Amendment, and FOR the approval of the ESPP Amendment.
Whether or not you attend the Annual Meeting, it is important that your shares be represented and voted at the meeting. Therefore, I urge you to promptly vote by submitting your proxy via the Internet at the address listed on the proxy card, by telephone as described in the instructions included in the proxy card, or by completing, signing, dating, and returning the enclosed proxy card in the enclosed prepaid envelope. If you decide to attend the Annual Meeting online, you will be able to vote in person,virtually during the Annual Meeting, even if you have previously submitted your proxy.
On behalf of our Board of Directors, I would like to express our appreciation for your continued interest in the affairs of Esperion Therapeutics, Inc. I look forward to speaking with as many of our stockholders as possible at the Annual Meeting.
| Sincerely, | ||||||||
  | ||||||||
Sheldon L. Koenig President and Chief Executive Officer | ||||||||
Esperion Therapeutics, Inc.
3891 Ranchero Drive, Suite 150
NOTICE OF 20172024 ANNUAL MEETING OF STOCKHOLDERS
| TIME: | 8:00 a.m., Eastern Time, on | |||||||
PLACE: | Virtually at www.virtualshareholdermeeting.com/ | |||||||
PURPOSES: | • To elect | |||||||
• To approve, on | ||||||||
• To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, •To approve an amendment to the Esperion Therapeutics, Inc. 2022 Stock Option and Incentive Plan, as amended (the “2022 Plan”) to increase the aggregate number of shares of common stock authorized for issuance under the 2022 Plan by 6,250,000 shares; | ||||||||
• To approve an amendment to the Esperion Therapeutics, Inc. 2020 Employee Stock Purchase Plan, as amended (the "ESPP") to increase the number of shares of common stock reserved for future issuance under the ESPP by 6,175,000 shares; and •To transact any other business that properly comes before the Annual Meeting (including adjournments and postponements thereof). | ||||||||
| RECORD DATE: | Stockholders of record at the close of business on | |||||||
VOTING BY PROXY: | If you cannot attend the Annual Meeting, | |||||||
| By Order of the Board of Directors, | ||||||||
  | ||||||||
Benjamin O. Looker Corporate Secretary Ann Arbor, Michigan April 11, 2024 | ||||||||
TABLE OF CONTENTS
anyThis year’s Annual Meeting will be held in a virtual meeting format only. We have designed our virtual format to enhance, rather than constrain, stockholder access, participation and communication. Any stockholder as of the record date can attend the 2017 Annual Meeting live via the Internet atwww.virtualshareholdermeeting.com/ESPR2017ESPR2024.
•The live webcast starts at 8:00 a.m. Eastern Time on April 17, 2017.
•stockholders may vote and submit questions while attending the Annual Meeting on the Internet
•instructionsMay 23, 2024. Instructions on how to attend and participate in the Annual Meeting via the Internet, including how to demonstrate proof of stock ownership, are posted atwww.virtualshareholdermeeting.com/ESPR2017ESPR2024.
QUESTIONS
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IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS
FOR THE SHAREHOLDER MEETING TO BE HELD ON MAY 23, 2024
We are furnishing proxy materials to our stockholders primarily via the Internet. On March 6, 2017,or about April 11, 2024, we mailed to our stockholders a Notice of Internet Availability (the “Notice of Internet Availability”) containing instructions on how to access our proxy materials, including our Proxy Statement and our 2016 Annual Report.Report to Stockholders for the fiscal year ended December 31, 2023 (the "2023 Annual Report"). This process allows us to provide our stockholders with the information they need on a more timely basis, while reducing the environmental impact of our annual meeting and lowering the costs of printing and distributing our proxy materials. The Notice of Internet Availability also instructs you on how to submit your proxy or voting instructions through the Internet or to request a paper copy of our proxy materials, including a proxy card and, for shares held in “street name” (i.e., held for your account by a broker, bank or other nominee), a voting instruction form, that includes instructions on how to submit your proxy or voting instructions by mail or telephone. Other stockholders, in accordance with their prior requests, have received e-mail access to our proxy materials and instructions to submit their vote via the Internet, or have been mailed paper copies of our proxy materials and a proxy card or voting instruction form.
A copy of our Proxy Statement and our 20162023 Annual Report arewill also be available on the Internet athttp:https://investor.esperion.com/financials.cfm.www.esperion.com/investor-relations/financial-information
. Please note that, while our proxy materials are available at the website referenced in the Notice of Availability and this Proxy Statement and our 2023Annual Report are available on our website, no other information contained on either website is incorporated by reference in, or considered to be a part of, this Proxy Statement.
Internet distribution of our proxy materials is designed to expedite receipt by stockholders, lower the cost of the Annual Meeting, and conserve natural resources. However, if you would prefer to receive printed copies of our proxy materials, please follow the instructions included in the Notice of Internet Availability. If you have previously elected to receive our proxy materials electronically, you will continue to receive these materials via e-mail unless you elect otherwise.
Attending and participating via the Internet:
•
If you wish to submit a question, on the day of the Annual Meeting, beginning at 7:45 a.m. Eastern Time on Thursday, May 23, 2024, you may log into the virtual meeting platform via the Internet at www.virtualshareholdermeeting.com/ESPR2024, and follow the instructions there. Only stockholders will be able to submit a question. Stockholders will be able to be submit questions upon logging into the virtual platform 15 minutes prior to the start of the Annual Meeting. The question portal will close after the preliminary results of the voting are reported. In order to provide an opportunity to as many stockholders as possible who wish to ask a question, each stockholder will be limited to one question. We will endeavor to answer as many questions submitted by stockholders as time permits. We reserve the right to edit profanity or other inappropriate language and to exclude questions regarding topics that are not pertinent to meeting matters or company business. If we receive substantially similar questions, we may group such questions together and provide a single response to avoid repetition. Responses to questions relevant to meeting matters that we do not have time to respond to during the Annual Meeting will be posted to our website following the Annual Meeting. Questions regarding topics that are not pertinent to meeting matters or company business will not be answered.
Our Annual Meeting will be governed by the Annual Meeting’s Rules of Conduct, which will address the ability of stockholders to ask questions during the meeting and include rules for how questions will be recognized and addressed. Please review the Annual Meeting’s Rules of Conduct for further details. The Annual Meeting’s Rules of Conduct are available during the Annual Meeting at www.virtualshareholdermeeting.com/ESPR2024.
We will have technicians ready to assist you with any technical difficulties you may have accessing the Annual Meeting, voting at the Annual Meeting or submitting questions at the Annual Meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual meeting login page.
Anyone can view the Annual Meeting live via the Internet atwww.virtualshareholdermeeting.com/ESPR2017ESPR2024.
Webcast replay of the Annual Meeting will be available until April 16, 2018.
May 22, 2025.
QUESTIONS
| For questions regarding | Contact | |||||||
| • Annual Meeting | Esperion Investor Relations: | ||||||||||
| • stock ownership | |||||||||||
| • voting | |||||||||||
PROXY STATEMENT
FOR THE 20172024 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD April 17, 2017MAY 23, 2024
GENERAL INFORMATION
Our Board of Directors (the "Board") solicits your proxy on our behalf for the 20172024 Annual Meeting of Stockholders (the "Annual Meeting") and at any postponement or adjournment of the Annual Meeting for the purposes set forth in this Proxy Statement for the Annual Meeting (this “Proxy Statement”) and the accompanying Notice of 20172024 Annual Meeting of Stockholders (the "Notice"). The Annual Meeting will be held at 8:00 a.m. Eastern Time on April 17, 2017,May 23, 2024, virtually via live webcast at www.virtualshareholdermeeting.com/ESPR2017.ESPR2024. This Proxy Statement is scheduled to be sent or made available to our stockholders on or about March 6, 2017.
April 11, 2024.
In this Proxy Statement the terms "Esperion," "the company," "we," "us," and "our" refer to Esperion Therapeutics, Inc. The mailing address of our principal executive offices is Esperion Therapeutics, Inc., 3891 Ranchero Drive, Suite 150, Ann Arbor, MI 48108.
| Record Date | ||||||||||||||
Quorum | A majority of the shares of all issued and outstanding stock entitled to vote on the record date must be present in person or represented by proxy to constitute a quorum. | |||||||||||||
Shares | Under the General Corporation Law of the State of Delaware, shares that are voted “abstain” or “withheld” and broker “non-votes” are counted as present for purposes of determining whether a quorum is present at the Annual Meeting. If a quorum is not present, the Annual Meeting may be adjourned until a quorum is obtained. | |||||||||||||
| Shares Outstanding | There were 189,400,567 shares of our common stock, par value $0.001 per share, outstanding as of | |||||||||||||
Voting | There are four ways a stockholder of record can vote: | |||||||||||||
(1) | By | |||||||||||||
(2) | By Telephone: | |||||||||||||
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(3) | By Mail: If you receive your proxy materials by U.S. mail, you may complete, sign and return the accompanying proxy card in the postage-paid envelope provided. | |||||||||||||
| (4) | ||||||||||||||
Directly at the Annual Meeting: If you are a stockholder of record as of the record date, you may vote directly at the meeting by | ||||||||||||||
| In order to be counted, proxies submitted by telephone or Internet must be received by 11:59 p.m. Eastern Time on | ||||||||||||||
If you are a beneficial owner of shares held in “street name” by your bank, broker or other nominee, you should have received a voting instruction form with these proxy materials from your bank, broker or other nominee rather than from us. The voting deadlines and availability of telephone and Internet voting for beneficial owners of shares will depend on the voting processes of the bank, broker 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 firm. If you hold your shares | ||||||||||||||
Revoking Your Proxy | Stockholders of record may revoke their proxies by attending the Annual Meeting and voting directly at the meeting, by filing an instrument in writing revoking the proxy or by filing another duly executed proxy bearing a later date with our Secretary before the vote is counted or by voting again using the telephone or Internet before the cutoff time (your latest telephone or Internet proxy is the one that will be counted). If you hold shares through a bank, broker or | |||||||||||||
Votes Required to Adopt Proposals | Each share of our common stock outstanding on the record date is entitled to one vote on any proposal presented at the Annual Meeting: | |||||||||||||
For Proposal One, the election of directors, the | ||||||||||||||
For Proposal Two, the affirmative vote of a majority of | ||||||||||||||
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For Proposal Three, | ||||||||||||||
| For Proposal Four, the affirmative vote of a majority of the votes properly cast is required for approval of an amendment to the Esperion Therapeutics, Inc. 2022 Stock Option and Incentive Plan, as amended (the “2022 Plan”) to increase the aggregate number of shares of common stock authorized for issuance under the 2022 Plan by 6,250,000 shares (the “2022 Plan Amendment”). Abstentions and broker non-votes, if any, will have no effect on the outcome of the vote on Proposal Four. | ||||||||||||||
| For Proposal Five, the affirmative vote of a majority of the votes properly cast is required for approval of an amendment to the Esperion Therapeutics, Inc. 2020 Employee Stock Purchase Plan, as amended (the “ESPP”) to increase the number of shares of common stock reserved for future issuance under the ESPP by 6,175,000 shares (the "ESPP Amendment"). Abstentions and broker non-votes, if any, will have no effect on the outcome of the vote on Proposal Five. | ||||||||||||||
| Effect of Votes Withheld, Abstentions and Broker Non-Votes | ||||||||||||||
Under the rules that govern brokers holding shares for their customers, brokers who do not receive voting instructions from their customers have the discretion to vote uninstructed shares on routine matters, but do not have discretion to vote such uninstructed shares on non-routine matters. Only Proposal Three, the ratification of the appointment of Ernst & Young LLP, is considered a routine matter where brokers are permitted to vote shares held by them without instruction. If your shares are held through a broker, those shares will not be voted in the election of directors, | ||||||||||||||
Table of Contents
Daniel Janney, 51, has served as a member of our Board since November 2012. Mr. Janney is a Managing Director at Alta Partners, a life sciences venture capital firm, which he joined in 1996. Prior
Gilbert S. Omenn, M.D., Ph.D., 75, was appointed to our Board in June 2014. Dr. Omenn is Professor of Computational Medicine & Bioinformatics, Internal Medicine, Human Genetics and Public Health at the University of Michigan. He leads the global Human Proteome Project. He serves on the Council of the National Academy of Medicine and the Community Preventive Services Task Force of the Centers for Disease Control and Prevention (CDC). Previously, Dr. Omenn was Chief Executive Officer of the University of Michigan Health System and Executive Vice President of the University of Michigan for Medical Affairs; Professor of Medicine and of Environmental Health, and Dean of the School of Public Health and Community Medicine, at the University of Washington; Associate Director of the White House Office of Science & Technology Policy and of the Office of Management and Budget; and a Howard Hughes Medical Investigator. He has served on the National Cancer Advisory Board, National Heart, Lung and Blood Institute Advisory Council, Scientific Management Review Board of the NIH, and the Director's Advisory Committee for the CDC. Dr. Omenn earned his Bachelor's degree summa cum laude from Princeton University, his M.D. magna cum laude from Harvard Medical School, and his Ph.D. in genetics from the University of Washington. Dr. Omenn serves on the boards of Galectin Therapeutics, Inc. (NASDAQ: GALT) and Oncofusion Therapeutics, Inc. Previously, Dr. Omenn was a director of Amgen, Inc. (NASDAQ: AMGN) and Rohm & Haas Company. We believe that Dr. Omenn is qualified to serve as a member of our Board based on his broad industry, academic, and healthcare experience.Scott Braunstein, M.D., 53,Alan Fuhrman, 67, becamewas appointed to our Board in March 2020. Mr. Fuhrman currently serves as the Chief Financial Officer of Tyra Biosciences (NASDAQ: TYRA), a clinical-stage biotechnology company. Mr. Fuhrman is the former Chief Financial Officer of Amplyx Pharmaceuticals, a biotechnology company focused on developing novel products for life-threatening infections from December 2017 to June 2020. Mr. Fuhrman previously served as the Chief Financial Officer of Mirna Therapeutics, a clinical-stage microRNA company, from 2015 until it merged with Synlogic in August 2017 and at Ambit Biosciences, from 2010 to 2015, where he helped lead the company through its initial public offering and oversaw financial, investor and administrative operations until its sale to Daiichi Sankyo in 2014. Mr. Fuhrman is a member of our Board in June 2015. Dr. Braunstein is an Operating Partner at Aisling Capital, a private investment firm, and currentlythe board of directors for SpringWorks Therapeutics (NASDAQ: SWTX), where he also serves as Senior Vice Presidenta member of Strategythe nominating and Corporate Development at Paciracorporate governance committee and chair of the audit committee, and was a member of the board of directors of Checkmate Pharmaceuticals Inc. (NASDAQ: PCRX). Dr. BraunsteinCMPI) until the sale of the company to Regeneron in May 2022. From October 2021 to February 2022, Mr. Fuhrman served as a healthcare portfolio manager at Everpoint Asset Management from 2014 through 2015.the interim President and Chief Executive Officer of Checkmate Pharmaceuticals. Previously, from 2002Mr. Fuhrman also served on the board of directors and as chair of the audit committee for Loxo Oncology until its sale to 2014, he workedEli Lilly in various positions at JP Morgan Asset Management, a divisionthe first quarter of JPMorgan Chase & Co. (NYSE: JPM), most recently2019. Earlier in his career, Mr. Fuhrman practiced as a managing director, senior portfolio manager for the JPM Global Healthcare Fund,certified public accountant with Coopers & Lybrand. Mr. Fuhrman earned a B.S. in business administration and the JPM asset global equity analyst for the U.S. pharmaceutical and biotechnology industry. Prior to that, he worked at Deutsche Bankagricultural economics from 2000 to 2002 as a health care equity sales specialist and as vice president of operations at Defined Healthcare from 1999 to 2000. He is board certified in Internal Medicine, having completed his residency at the New York Hospital-Cornell Medical Center, and achieved the title of assistant clinical professor of medicine at Columbia University Medical Center. Dr. Braunstein earned
Table of Contents•
Scott Braunstein, M.D. (Chairperson)
Daniel Janney
Gilbert S. Omenn, M.D., Ph.D.
| Voting Instructions | If you complete and submit your proxy voting instructions, the persons named as proxies will follow your instructions. If you submit proxy voting instructions but do not direct how your shares should be voted on each item, the persons named as proxies will voteFOR the election of the nominees for director,FOR the approval of the advisory resolution on the compensation of our named executive officers, | |||||||||||||
Voting Results | We will announce preliminary voting results at the Annual Meeting. We will report final voting results by filing a Current Report on Form 8-K ("Form 8-K") within four business days after the Annual Meeting. If final voting results are not available at that time, we will provide preliminary voting results in the Form 8-K and will provide the final voting results in an amendment to the Form 8-K | |||||||||||||
Additional Solicitation/Costs | We are paying for the distribution of the proxy materials and solicitation of the proxies. As part of this process, we reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out- of-pocket expenses for forwarding proxy and solicitation materials to our stockholders. If you choose to access the proxy materials or vote over the Internet or by telephone, you are responsible for any Internet access or telephone charges that you may incur. Proxy solicitation expenses that we will pay include those for preparation, mailing, returning and tabulating the proxies. Our directors, officers, and employees may also solicit proxies on our behalf in person, by telephone, email or facsimile, but they do not receive additional compensation for providing those services. | |||||||||||||
PROPOSAL ONE
ELECTION OF CLASS III DIRECTORS
Number of Directors; Board Structure
Our Board is divided into three staggered classes of directors as nearly equal in number as possible. One class is elected each year at the Annual Meeting of stockholdersStockholders for a term of three years. The term of the Class I directors expires at the Annual Meeting. The term of the Class II directors expires at the 20182024 Annual Meeting and theMeeting. The term of the Class III directors expires at the 20192025 Annual Meeting and the term of the Class I directors expires at the 2026 Annual Meeting. After the initial terms expire, directors are expected to be elected to hold office for a three-year term or until the election and qualification of their successors in office.
Nominees
Based on the recommendation of the nominating and corporate governance committee of our Board, our Board has nominated Daniel Janney, TimAntonio M. MaylebenGotto Jr., M.D., D.Phil. and Mark E. McGovern, M.D.,Nicole Vitullo for election as Class I directors toII directors. Each will serve for three-year terms ending at the 20202027 Annual Meeting or until their successors are elected and qualified. Each of the nominees is a current member of our Board and has consented to serve if elected.
Unless you direct otherwise through your proxy voting instructions, the persons named as proxies will vote all proxies received "for" the election of each nominee. If any nominee is unable or unwilling to serve at the time of the Annual Meeting, the persons named as proxies may vote for a substitute nominee chosen by the present Board. In the alternative, the proxies may vote only for the remaining nominees, leaving a vacancy on theour Board. TheOur Board may fill such vacancy at a later date or reduce the size of theour Board. We have no reason to believe that any of the nominees will be unwilling or unable to serve if elected as a director.
Vote Required
The two nominees receiving a plurality of votes properly cast will be elected as directors. Withholding authority to vote your shares with respect to one or more director nominees and broker non-votes will have no effect on the election of those nominees.
Recommendation of the Board
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF EACH OF THE FOLLOWING NOMINEES.
The biographies of each of the director nominees and continuing directors below contain information regarding each such person's service as a director, business experience, director positions held currently or at any time during the last five years and the experiences, qualifications, attributes or skills that caused the nominating and corporate governance committee to determine that the person should serve as a director of the company. In addition to the information presented below regarding each such person's specific experience, qualifications, attributes and skills that led the Board and its nominating and corporate governance committee to the conclusion that he or she should serve as a director, we also believe that each of our directors has a reputation for integrity, honesty and adherence to high ethical standards. Each of our directors has demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to our company and our Board. Finally, we value our directors' experience in relevant areas of business management and on other boards of directors and board committees.
Our corporate governance guidelines also dictate that a majority of the Board be comprised of independent directors whom the Board has determined have no material relationship with the company and who are otherwise "independent" directors under the published listing requirements of the NASDAQ Stock Market.
Nominees for Election for a Three-Year Term Ending at the 20202027 Annual Meeting
to joining Alta, from 1993 to 1996, he was a Vice President in Montgomery Securities' healthcare and biotechnology investment banking group, focusing on life sciences companies. Mr. Janney is a director of a number of companies including Evolve Biosystems, Inc., Prolacta Bioscience, Inc., Sutro Biopharma and Viveve Medical, Inc. He holds a Bachelor of Arts in History from Georgetown University and an M.B.A. from the Anderson School at the University of California, Los Angeles. We believe Mr. Janney's experience working with and serving on the boards of directors of life sciences companies and his experience working in the venture capital industry qualifies him to serve as a member of our Board.
Tim M. Mayleben, 56, has served as our President and Chief Executive Officer since December 2012 and as a member of our Board since February 2010. Prior to joining Esperion, Mr. Mayleben was President, CEO and a director of Vericel Corporation (NASDAQ: VCEL) (formerly Aastrom Biosciences). Previously, Mr. Mayleben was President, Chief Operating Officer and a director of NightHawk Radiology Holdings, Inc. Prior to joining Nighthawk, he was the COO of the original Esperion, until its acquisition by Pfizer in 2004. Mr. Mayleben is an advisor to, investor in, and member of the board of directors of several life science companies, including Kaléo Pharma, Lycera Corporation, Loxo Oncology, Inc. (NASDAQ: LOXO) and Marinus Pharmaceuticals (NASDAQ: MRNS). Mr. Mayleben earned an M.B.A., with distinction, from the J.L. Kellogg Graduate School of Management at Northwestern University, and a B.B.A. from the University of Michigan, Ross School of Business. We believe that Mr. Mayleben's experience working in the life sciences industry, including over a decade of experience as an executive officer of several life sciences companies, qualifies him to serve as a member of our Board.
Mark E. McGovern, M.D., 64, became a member of our Board in February 2014. Dr. McGovern is a board-certified cardiologist with over 20 years of experience developing lipid regulating therapies, and since 2007, has served as a consultant to the pharmaceutical industry in cardiovascular and lipid regulation. Dr. McGovern spent 10 years, from 1997 to 2007, at Kos Pharmaceuticals, where he last served as Executive Vice President, Medical Affairs, and Chief Medical Officer, prior to its acquisition by Abbott Laboratories. Prior to joining Kos Pharmaceuticals, Dr. McGovern spent 11 years at Bristol-Myers Squibb (NYSE: BMY), from 1986 to 1997, in various capacities, including Executive Director, Heart Failure and Atherosclerosis Clinical Research. Dr. McGovern earned his Bachelor's degree summa cum laude from Princeton University and his medical degree from the University of Vermont. Dr. McGovern is a Fellow of the American College of Cardiology and the American College of Physicians, and has published extensively on lipid management and its role in the treatment of coronary heart disease. We believe that Dr. McGovern is qualified to serve as a member of our Board based on his broad experience in the industry in which we operate and his expertise in lipid regulating therapies.
Directors Continuing in Office Until the 2018 Annual Meeting
Antonio M. Gotto Jr., M.D., D.Phil., 82,88, has served as a member of our Board since January 2014. Dr. Gotto currently serves as Dean Emeritus and as a member of the Board of Fellows of the Joan and Sanford I. Weill Medical College of Cornell University and Provost for Medical Affairs Emeritus of Cornell University. From January 2012 to December 2014, Dr. Gotto was the Co-Chairman of the Board of Overseers of Weill Cornell Medical College, and from January 1997 to December 2011, he served as the Stephen and Suzanne Weiss Dean of the Joan and Sanford I. Weill Medical College of Cornell University and Provost for Medical Affairs of Cornell University. Previously, Dr. Gotto served as J.S. Abercrombie Chair of Atherosclerosis and Lipoprotein Research and Chairman and Professor of the Department of Medicine at Baylor College of Medicine and Methodist Hospital. Dr. Gotto currently serves as a member of the Institute of Medicine of the National Academy of SciencesMedicine and as a Fellow of the
5
American Academy of Arts and Sciences. Dr. Gotto is also a past president of the International Atherosclerosis Society and a past president of the American Heart Association. He is also immediate past president of the National Lipid Association. Dr. Gotto holds a B.A. degree from Vanderbilt University, a D.Phil. degree in Biochemistry from Oxford University in England, where he was a
Rhodes Scholar, and an M.D. degree from Vanderbilt University School of Medicine. He completed his residency training at Massachusetts General Hospital in Boston, Massachusetts. Dr. Gotto was a member of the board of directors of Aegerion Pharmaceuticals, Inc. until December 2, 2016, when it merged to form Novelion Therapeutics, Inc. (NASDAQ: NVLN). We believe that Dr. Gotto is qualified to serve as a member of our Board based on his broad industry experience and expertise in lipid disorders.
Nicole Vitullo, 59,66, has served as a member of our Board since April 2008 and as our lead independent director sinceLead Independent Director from December 2015.2015 to June 2022. Ms. Vitullo joined Domain Associates, LLC, a venture capital firm with an exclusive focus on life sciences in 1999 and became a Partner in 2004. From 1992 to 1999, Ms. Vitullo was Senior Vice President at Rothschild Asset Management, Inc. Ms. Vitullo is a director of a number of companies including Achillion Pharmaceuticals, Inc. (NASDAQ: ACHN), Marinus Pharmaceuticals, Inc. (NASDAQ: MRNS), CeltaxsysHinge Bio, Inc. and Cotera,Allay Therapeutics, Inc. She previously served on the boards of Achillion Pharmaceuticals, Inc. (acquired by Alexion Pharmaceuticals), Antios Therapeutics, Celator Pharmaceuticals (acquired by Jazz Pharmaceuticals), Durata Therapeutics (acquired by Actavis PLC) and, Marinus Pharmaceuticals (NASDAQ: MRNS), VentiRx Pharmaceuticals (acquired by Celgene, Inc.)., Calixa Therapeutics (acquired by Cubist Pharmaceuticals), Cerexa (acquired by Forest Laboratories), Onyx Pharmaceuticals and Cotera, Inc. Ms. Vitullo received a B.A. and an M.B.A. from the University of Rochester. We believe Ms. Vitullo's experience working with and serving on the boards of directors of life sciences companies and her experience working in the venture capital industry qualifies her to serve as a member of our Board.
Directors Continuing in Office Until the 20192025 Annual Meeting
his bachelor degree from Cornell University and his medical degree from the Albert Einstein College of Medicine at YeshivaMontana State University. We believe that Dr. BraunsteinMr. Fuhrman is qualified to serve as a member of our Board based on his broadover 20 years of executive financial experience in biotechnology, medical devices, technology and services and experiences in a wide variety of both public and private company financial transactions.
Jay P. Shepard, 66, was appointed to our Board in May 2018. Mr. Shepard currently serves as Venture Partner with Catalys Pacific, a venture capital firm focused on early-stage investments in life sciences, where he is a co-founder and board member of two of their companies, Pathalys and Aculys. Mr. Shepard served as the President and Chief Executive Officer of Aravive/Versartis (NASDAQ: ARAV) from May 2015 to January 2020 and previously served as Executive Chairman of the Versartis, Inc. board of directors from December 2013 to 2015. Versartis merged with Aravive Biologics in 2018. From 2008 to 2015, Mr. Shepard was the Executive Partner at Sofinnova Ventures. Previously, he was the President and Chief Executive Officer of NextWave Pharmaceuticals (acquired by Pfizer), President and Chief Executive Officer of Ilypsa (acquired by Amgen), interim President and Chief Executive Officer of Relypsa (Ilypsa’s spin-out company, acquired by Galencia), and Vice President of Commercial Operations at Telik and Oncology Business Unit Head of Alza Pharmaceuticals (Alza was acquired by Johnson & Johnson). He has over 35 years of experience in the pharmaceutical, biotechnology and drug delivery arenas. He has participated in or led over 16 product launches by preparing markets and establishing sales and marketing operations. Mr. Shepard also serves on the board of directors of the Christopher & Dana Reeve Foundation and is a member of the board of directors of Inovio Pharmaceuticals, Inc. (NASDAQ: INO), where he is the vice-chairman, and a member of its finance, nomination and corporate governance, and audit committees, and Ironwood Pharmaceuticals, Inc. (NASDAQ: IRWD), where he is also a member of its audit committee. Mr. Shepard holds a B.S. in business administration from the University of Arizona. We believe that Mr. Shepard is qualified to serve as a member of our Board based on his substantial experience supporting the launch and commercialization of biopharmaceutical products.
Seth H.Z. Fischer, 67, was appointed to our Board in October 2021. Mr. Fischer brings over 35 years of experience and a distinguished record of results in key leadership positions within the pharmaceutical and medical device industries. He currently serves as a member of the board of directors of Agile Therapeutics, Inc. (NASDAQ: AGRX), where he is also a lead independent director and a member of its audit committee, compensation committee and science and technology committee, Marinus Pharmaceuticals, Inc. (NASDAQ: MRNS), and Milestone Pharmaceuticals, Inc (NASDAQ: MIST). Previously, Mr. Fischer served as the Chief Executive Officer and as a director of Vivus, Inc. (NASDAQ: VVUS), a publicly traded biopharmaceutical company commercializing and
6
developing innovative, next-generation therapies to address unmet needs from September 2013 to December 2017. Prior to Vivus, Mr. Fischer served in various positions of increasing responsibility at Johnson & Johnson, most recently as company group chairman, Johnson & Johnson and worldwide franchise chairman of Cordis Corporation. Before that, he served as company group chairman, North America Pharmaceuticals, which included responsibilities for Ortho-McNeil Pharmaceuticals, Janssen and Scios. Prior to that, Mr. Fischer served as President of Ortho-McNeil Pharmaceuticals. Mr. Fischer also served on the board of directors of Spectrum Pharmaceuticals, Inc. and BioSig Technologies, Inc. Mr. Fischer holds a Bachelor of General Studies from Ohio University and previously served as a captain in the U.S. Air Force. We believe that Mr. Fischer is qualified to serve as a member of our Board based on his successful track record of developing and executing strategies to drive product growth.
Directors Continuing in Office Until the 2026 Annual Meeting
J. Martin Carroll, 74, was appointed as our Chairman of the Board in June 2022. Mr. Carroll served as President and Chief Executive Officer of Boehringer Ingelheim Corporation and of Boehringer Pharmaceuticals, Inc. from 2003 until 2011 and as a director of Boehringer Ingelheim Corporation from 2003 until December 2012. Mr. Carroll worked at Merck & Co., Inc. from 1976 to 2001. From 1972 to 1976, Mr. Carroll served in the United States Air Force where he attained the rank of Captain. He has served as a director of Catalent Pharma Solutions since July 2015 and was Lead Director from October 2021 to June 2023. Mr. Carroll has served on a number of board of directors including Inotek Pharmaceuticals Corporation (acquired by Rocket Pharmaceutical), Durata Therapeutics, Inc. (acquired by Actavis), Vivus, Inc., Therapeutics MD, Mallinckrodt plc and Accredo Heath. Mr. Carroll received a B.A. in accounting and economics from the College of the Holy Cross and an M.B.A. from Babson College. We believe that Mr. Carroll's significant leadership and strategic experience qualifies him to serve as a member of our Board.
Sheldon L. Koenig, 58, has served as our Chief Executive Officer since May 2021 and was appointed to our Board in May 2021. Prior to holding those positions, Mr. Koenig served as our Chief Operating Officer since December 2020. Prior to joining Esperion, Mr. Koenig served as the Executive Vice President and Chief Commercial Officer at Portola Pharmaceuticals, Inc. from January 2019 to August 2020 until it was acquired by Alexion. From January 2016 to July 2018, Mr. Koenig was Senior Vice President and Head of the cardiovascular franchise for Sanofi S.A. (NASDAQ: SNY), a pharmaceutical and healthcare company, where he led U.S. business operations and product launches internationally. Prior to that, Mr. Koenig served as Vice President and Global Brand Leader for the cardiovascular division of Merck & Co, Inc. where, for more than 25 years, he took on roles of increasing responsibility within the company’s cardiovascular and thrombosis franchises and led marketing for the launch of ezetimibe. Mr. Koenig holds a Master of Business Administration degree from Monmouth University and a Bachelor of Applied Science from Drexel University. We believe that Mr. Koenig’s extensive industry leadership experience qualifies him to serve as a member of our Board.
Stephen Rocamboli, 52, was appointed to our Board in which we operate.
Dov A. Goldstein, M.D.April 2022. Mr. Rocamboli currently serves as the Chief Executive Officer of Innovatrx, Inc. (formerly known as Perla Therapeutics, Inc.), 49a company developing therapeutics for the treatment of cancer. Previously, Mr. Rocamboli served as Chief Business Officer, General Counsel and Corporate Secretary of Candel Therapeutics, an immuno-oncology company, between April 2015 and May 2020. Between 2010 and April 2015, Mr. Rocamboli served as General Partner of Integrin Partners, LLC, a consulting firm providing corporate development, strategic transaction advisory and general counsel services to life science companies, investors and entrepreneurs. Between 2010 and 2012, Mr. Rocamboli also served as Partner of Beijing International Group, an international affiliate of Integrin Partners. Between 2014 and 2015, Mr. Rocamboli also served as Special Counsel to Wyrick Robbins Yates & Ponton, LLP, focusing on life sciences transactions. Between 2008 and 2018, Mr. Rocamboli was a co-founder and served as President of Pear Tree Pharmaceuticals, until its sale to Daré Bioscience, Inc. Prior to joining Pear Tree, Mr. Rocamboli spent nearly a decade as a senior executive of a New York, NY based private FINRA/SEC member investment bank, venture capital firm, and affiliated hedge funds, focused exclusively on biotechnology and specialty pharmaceuticals. Mr. Rocamboli held positions of increasing responsibility, with the last five years as Senior Managing Director and General Counsel of all business units. Mr. Rocamboli has served as a member of the board of directors of several public and private life sciences companies, including Foresight Biotherapeutics (sold to Shire Pharmaceuticals in 2015) and currently serves as a member of the board of directors of TFF Pharmaceuticals (NASDAQ: TFFP), where he also serves as a chair of its compensation committee and a member of its audit committee. Mr. Rocamboli received his B.A. degree from The State University of New York at Albany and his J.D. from Fordham University School of Law. We believe that Mr. Rocamboli’s extensive experience as a senior business and legal executive for multiple public life science organizations qualifies him to serve as a member of our Board.
Tracy M. Woody, 54, has served as a member of our Board since April 2008. Dr. Goldstein is a Managing Partner at Aisling Capital, a private investment firm. From June 2014 to January 2015, heMay 2019. Ms. Woody served as Chief Financial Officer of Loxo Oncology, Inc. (NASDAQ: LOXO). He previously served as a Partner of Aisling Capital from 2008 to 2014, and from 2006 to 2008, he was a Principal at Aisling Capital. From 2000 to 2005, Dr. Goldstein was Chief Financial Officer of Vicuron Pharmaceuticals, Inc. before its acquisition by Pfizer Inc. From 1998 to 2000, Dr. Goldstein was Director of Venture Analysis at HealthCare Ventures, a privately held investment fund. Dr. Goldstein is a director of a number of companies including ADMA Biologics, Inc. (NASDAQ: ADMA) and Cempra Pharmaceuticals, Inc. (NASDAQ: CEMP). He previously served as a member of the board of directors of Durata Therapeutics (NASDAQ: DRTX) from December 2009 until May 2013, and of Loxo Oncology (NASDAQ: LOXO) from July 2013 to October 2014. He holds a B.S. in biology from Stanford University, an M.D. from the Yale School of Medicine and an M.B.A. from the Columbia Business School. We believe Dr. Goldstein's experience with financial accounting matters for complex organizations, his prior oversight of the financial reporting process of public companies and his experience working with life sciences companies qualifies him to serve as a member of our Board.
Roger S. Newton, Ph.D., FAHA, FACN, 66, has served as a member of our Board since April 2008 and is a fellow of the American Heart Association and the American College of Nutrition. Dr. Newton was previously our Executive Chairman and Chief Scientific Officer from 2012 to December 2016 and President and Chief Executive Officer of Cessation Therapeutics, LLC, a clinical-stage biotechnology company, from our founding in 20082022 until March 2024. Previously she was the Executive Vice President of Corporate Strategy at Protagonist Therapeutics (NASDAQ: PTGX) from April 2020 to December 2012.July 2022. Ms. Woody previously served as Chief Commercial Officer of Versartis, Inc. from 2017 to 2018 and KemPharm, Inc. from 2015 to 2016. Prior to joining our company, heKemPharm, Ms. Woody was Senior Vice President Pfizer Global R&D from 2004 to 2008. He wasof Sales and Marketing of NextWave Pharmaceuticals (acquired by Pfizer), and Vice President of Business Development and Vice President of Sales and Marketing at Greer Laboratories. Ms. Woody also served as a Co-founder, President & CEO of the original Esperion from July 1998 until its acquisition by Pfizer in 2004. Prior to founding the original Esperion, Dr. Newton was Chairman of the Atherosclerosis Drug Discovery Team at Warner Lambert from 1981 to 1998. Dr. Newton is a director of a number of companies including Celsee Diagnostics (previously DeNovo Biosciences, Inc.), Juventas Therapeutics, Inc. and Rubicon Genomics, Inc. He is also aboard member of Shorla Pharma. Ms. Woody has over 25 years of commercial experience in pharmaceuticals, biologics, and
7
medical devices, across a wide range of therapeutic areas in diverse markets. Ms. Woody also has experience with multi-billion dollar revenue brands as well as products in the Technology Advisory Boards of Arboretum Ventures and FirstSense Medical, LLC. Dr. Newton hasrare disease space. Ms. Woody holds a Ph.D. in nutrition from the University of California, Davis, a Master of ScienceBachelor’s degree in nutritional biochemistryHealth Promotion and Applied Physiology from the University of Connecticut, and a Bachelor of Science degree in biology from Lafayette College. Dr. Newton's qualificationsEast Carolina University. We believe that Ms. Woody is qualified to serve as a memberdirector based on her substantial experience in all aspects of commercial operations across a wide range of therapeutic areas for both emerging and established companies.
Board Diversity Disclosure
The following table provides certain self-identified personal characteristics of our Board include his more than 30 yearsmembers, in accordance with Rule 5605(f) of industry experience in the development and commercializationNasdaq listing standards:
| Board Diversity Matrix (As of April 1, 2024) | ||||||||||||||
| Total Number of Directors | 9 | |||||||||||||
| Female | Male | Non-Binary | Did Not Disclose Gender | |||||||||||
| Part I: Gender Identity | ||||||||||||||
| Directors | 2 | 7 | — | — | ||||||||||
| Part II: Demographic Background | ||||||||||||||
| African American or Black | — | — | — | — | ||||||||||
| Alaskan Native or Native American | — | — | — | — | ||||||||||
| Asian | — | — | — | — | ||||||||||
| Hispanic or Latinx | — | — | — | — | ||||||||||
| Native Hawaiian or Pacific Islander | — | — | — | — | ||||||||||
| White | 2 | 6 | — | — | ||||||||||
| Two or More Races or Ethnicities | — | — | — | — | ||||||||||
| LGBTQ+ | — | |||||||||||||
| Did Not Disclose Demographic Background | 1 | |||||||||||||
| Directors who are Military Veterans: 2 | ||||||||||||||
8
EXECUTIVE OFFICERS
The following table presents our current executive officers, their respective positions, and their respective ages and positions as of February 1, 2017.March 26, 2024. Biographical information pertaining to Mr. Mayleben,Koenig, who serves as both a director and an executive officer, can be found in the section entitled "Proposal One, Election Ofof Class III Directors."
Narendra D. Lalwani, Ph.D.
| Age | Position | |||||||||||||||
| Sheldon L. Koenig | President and Chief Executive Officer | ||||||||||||||||
| |||||||||||||||||
| Chief Medical Officer | ||||||||||||||||
| Benjamin Halladay | 38 | Chief Financial Officer | |||||||||||||||
| Benjamin Looker | 42 | General Counsel | |||||||||||||||
| Eric Warren | 51 | Chief Commercial Officer | |||||||||||||||
JoAnne Foody, M.D., FACC, FAHA, DABT,59, has served as our Executive Vice President, Research & Development, and Chief Operating Officer since August 2014. Prior to joining Esperion Dr. Lalwani was Chief Scientific Officer at Cerenis Therapeutics from 2007 to 2014 where he led R&D activities for the company. Previously, Dr. Lalwani was Vice President of Drug Safety at the original Esperion until
its acquisition by Pfizer. Prior to Esperion, Dr. Lalwani held various positions of increasing responsibility in the Department of Pathology and Experimental Toxicology at Warner-Lambert/Parke-Davis. Dr. Lalwani is a Fellow of the American Heart Association (FAHA) and a diplomat of the American Board of Toxicology (DABT). Dr. Lalwani earned a Ph.D. in Biophysics from the University of Bombay (India) and an M.B.A from the University of Michigan Ross School of Business.
Mary P. McGowan, M.D., has served as our Chief Medical Officer since June 2015.2021. Previously, Dr. Foody held roles from November 2016 to June 2021 with Johnson & Johnson, where she served in roles of increasing responsibility within its Janssen Pharmaceutical Company, including as its Vice President, Compound Development Team Leader and most recently as its Vice President, Head of Data Sciences, Cardiovascular, Metabolism, Retina and Pulmonary Hypertension. Prior to that, she worked at Merck Research Labs from March 2015 to November 2016 as its Global Director Scientific Affairs of both the Cardiovascular and Metabolism Therapeutic Areas, formulating external engagement, franchise strategy and leading compound candidate selection through proof of concept to clinical practice. Prior to joining Esperion,the therapeutics industry, Dr. McGowan servedFoody spent over two decades in academic cardiology and is a known international expert in preventive cardiology having held professorships at both Yale and Harvard Medical Schools. Dr. Foody currently serves as senior medical director of clinical development (cardiovascular) at Genzyme Corporation, a Sanofi S.A. (NYSE: SAN) company, from 2012 to 2015. Dr. McGowan has also served as a part-time physician and co-director of the Dartmouth-Hitchcock Lipid Clinic since 2013. In 2011 she served as executive director of MedPace Clinics, and from 2004 to 2011 she served as director of the Cholesterol Treatment Center at Concord Hospital. Dr. McGowan also served as director of the Cholesterol Management Center at Catholic Medical Center from 1992 to 2004. Dr. McGowan served as a board member of the National Lipid Association from 2006 to 2011. She also previously served as the Chief Medical Officer of the Familial Hypercholesterolemia Foundation and was a member of the National Lipid Association's Expert Panel on Familial Hypercholesterolemia, the New Hampshire Childhood Obesity Expert Panel and New Hampshire board of directors of ViCardia Therapeutics, Inc. Dr. Foody received her undergraduate degree from Princeton University and a medical degree from the American Heart Association.Pritzker School of Medicine, University of Chicago. Dr. McGowan Foody completed her medical training at Brigham and Women’s Hospital in Boston and her Fellowships in General Cardiology and Preventive Cardiology at the Cleveland Clinic Foundation in Cleveland.
Benjamin Halladay, 38, has also served as our Chief Financial Officer since November 2022. Previously, he served as our Senior Director, Finance from August 2022 to November 2022, as our Senior Director of Financial Planning and Analysis from July 2021 to August 2022, and as our Finance Manager from January 2020 to July 2021. Prior to joining our Company in January 2020, from May 2017 to January 2020, Mr. Halladay was the Global Finance Manager at NOV Inc. (formerly, National Oilwell Varco) (NYSE: NOV), a reviewer forleading independent equipment and technology provider to the Journalglobal energy industry. From February 2016 to May 2017, Mr. Halladay was Senior Financial Analyst at BMC Software, Inc., a software company. Additionally, from June 2009 to September 2015, Mr. Halladay held multiple roles at Pfizer Inc. (NYSE: PFE). Mr. Halladay holds a Bachelor of Clinical LipidologyArts in History from Syracuse University and a Master in Business Administration from Fordham Gabelli School of Business.
Benjamin Looker, J.D., 42, has served as our General Counsel since 2007. She earned her bachelor'sJanuary 2022. Previously, Mr. Looker served as the General Counsel of Trillium Therapeutics, Inc. (NASDAQ: TRIL), a clinical-stage biotechnology company, from April 2021 until its acquisition by Pfizer Inc. (NYSE: PFE) in November 2021. From May 2019 to April 2021, he was Vice President, Head of US Legal and Global Business Operations at MorphoSys US Inc. (NASDAQ: MOR), a biopharmaceutical company. Prior to that, Mr. Looker held roles of increasing responsibility at EMD Serono, Inc., a biopharmaceutical company (a subsidiary of Merck KGaA specialized in healthcare), from July 2013 to May 2019, including as its Therapeutic Area Counsel from July 2013 to February 2016 and as its Associate General Counsel from February 2016 to May 2019. Mr. Looker received his undergraduate degree from St. MichaelsBoston College and completed medical schoolhis juris doctor degree from Boston College Law School.
Eric Warren, 51, has served as our Chief Commercial Officer since March 2022. Previously, he was our Vice President, US Sales and residency trainingMarketing from January 2021 to March 2022. Prior to joining our Company, from August 2020 to January 2021, Mr. Warren was Vice President, Head of Sales and Marketing at the UniversityNabriva Therapeutics plc (OTC: NBRVF), a commercial-stage biopharmaceutical company. From April 2018 to August 2020, Mr. Warren held Vice President roles in marketing at Sanofi S.A. (NASDAQ: SNY), a pharmaceutical and healthcare company, in their cardiovascular franchise. Additionally, from May 2006 to April 2018, Mr. Warren held roles of Massachusetts Medical Centerincreasing responsibility at Merck & Co. (NYSE: MRK), a pharmaceutical company. Mr. Warren holds a Bachelor of Science in Pharmacy and is a fellowship at Johns Hopkins School of Medicine.licensed pharmacist in New York State.
9
CORPORATE GOVERNANCE
Board Independence
Our Board has determined that all members of our Board, with the Board, exceptexception of Mr. Mayleben and Dr. Newton,Koenig, are independent, as determined in accordance with the rules of the NASDAQ Stock Market. In making such independence determination, theour Board considered the relationships that each such non-employee director has with us and all other facts and circumstances that theour Board deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director. In considering the independence of the directors listed above, our Board considered the association of our directors with the holders of more than 5% of our common stock. The composition and functioning of our Board and each of our committees complies with all applicable requirements of the NASDAQ Stock Market and the rules and regulations of the Securities and Exchange Commission (the "SEC"“SEC”). There are no family relationships among any of our directors or executive officers.
At least annually, theour Board will evaluate all relationships between us and each director in light of relevant facts and circumstances for the purposes of determining whether a material relationship exists that might signal a potential conflict of interest or otherwise interfere with such director's ability to satisfy his or her responsibilities as an independent director. Based on this evaluation, theour Board will make an annual determination of whether each director is independent within the meaning of NASDAQ's, the SEC's,SEC’s, and our applicable committees' independence standards.
Involvement in Certain Legal Proceedings
None of our officers or directors have, during the last ten years: (i) been convicted in or is currently subject to a pending criminal proceeding; (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to any federal or state securities or banking laws including, without limitation, in any way limiting involvement in any business activity, or finding any violation with respect to such law, nor (iii) has any bankruptcy petition been filed by or against the business of which such person was an executive officer or a general partner, whether at the time of the bankruptcy or for the two years prior thereto or been subject to any of the items set forth under Item 401(f) of Regulation S-K.
Code of BusinessProfessional and Ethical Conduct and Ethics
We have adopted a Code of BusinessProfessional and Ethical Conduct and Ethics that applies to all of our employees, officers and directors, including those employees responsible for financial reporting. The current version of the Code of BusinessProfessional and Ethical Conduct and Ethics is available on our website at http://investor.esperion.com/corporate-governance.cfm.www.esperion.com/our-company/ethics-compliance. A copy of the Code of BusinessProfessional and Ethical Conduct and Ethics may also be obtained, free of charge, upon a request directed to: Esperion Therapeutics, Inc., 3891 Ranchero Drive, Suite 150, Ann Arbor, MI 48108, Attention: Vice President, Finance.General Counsel. We intend to disclose any amendment or waiver of a provision of the Code of BusinessProfessional and Ethical Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, or Vice President, Finance, or persons performing similar functions, by posting such information on our website (available at http://www.esperion.com)www.esperion.com) and/or in our public filings with the SEC.
Corporate Governance Guidelines
The
Our Board has adopted corporate governance guidelines to assist and guide its members in the exercise of its responsibilities. These guidelines should be interpreted in accordance with any requirements imposed by applicable federal or state law or regulation, NASDAQ and our certificate of incorporation and bylaws. Our corporate governance guidelines are available in the corporate governance section of our website at http://investor.esperion.com/corporate-governance.cfm.www.esperion.com/our-company/corporate-governance. Although these corporate governance guidelines have been approved by theour Board, it is expected that these guidelines will evolve over time as customary practice and legal requirements change. In particular, guidelines that encompass legal, regulatory or exchange requirements as they currently exist will be deemed to be modified as and to the extent that such legal, regulatory or exchange requirements are modified. In addition, the guidelines may also be amended by theour Board at any time as it deems appropriate.
10
Board and Committee Meetings
The
Our Board meets on a regularly scheduled basis during the year to review significant developments affecting us and to act on matters requiring their approval. It also holds special meetings when
important matters require action between scheduled meetings. Members of senior management regularly attend meetings to report on and discuss their areas of responsibility. During 2016, the2023, our Board held 15nine meetings and acted by unanimous written consent once. Thesix times. Our Board has threefour standing committees:
•the audit committee, which held four meetings in 2016;2023;
•the compensation committee, which held 11six meetings and acted by unanimous written consent oncethree times in 2016; and2023;
•the nominating and corporate governance committee, which held threefour meetings and acted by unanimous written consent twice in 2023; and
• the compliance committee, which held four meetings in 2016.
2023.
Each of the incumbent directors of theour Board attended in person or participated via teleconference at least 75% of the aggregate of all meetings of the Board and all meetings of committees of our Board upon which they served (during the periods that they served) during 2016. The2023. Our Board of Directors regularly holds executive sessions of the independent directors. Executive sessions do not include employee directors or directors who do not qualify as independent under the NASDAQ and SEC rules.
Annual Meeting Attendance
It is our policy that members of our Board are encouraged to attend annual meetings of our stockholders. AllThree of our directors at the time of our 20162023 Annual Meeting of stockholdersStockholders, including Mr. Koenig, attended that meeting.
Committees
Our bylaws provide that theour Board may delegate responsibility to committees. TheOur Board has threefour standing committees: an audit committee, a compensation committee, and a nominating and corporate governance committee and a compliance committee. TheOur Board has also adopted a written charter for each of the threefour standing committees. Each committee charter is available in the corporate governance section of our website at http://investor.esperion.com/corporate-governance.cfm.www.esperion.com/our-company/corporate-governance.
Audit Committee
Mr. JanneyFuhrman, Mr. Rocamboli, Mr. Shepard and Drs. Braunstein and OmennMs. Vitullo currently serve on the audit committee, which is chaired by Dr. Braunstein.Mr. Fuhrman. Our Board has determined that each member of the audit committee is "independent" for audit committee purposes as that term is defined in the applicable rules of the SEC and the NASDAQ Stock Market. Our board of directorsBoard has designated Dr. BraunsteinMr. Fuhrman as the "audit committee financial expert," as defined under the applicable rules of the SEC. The audit committee's responsibilities include:
•appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;
•approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;
•reviewing the internal audit plan with our independent registered public accounting firm and members of management responsible for preparing our financial statements;
•reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us;
•reviewing the adequacy of our internal control over financial reporting;
- •
- establishing policies and procedures for the receipt and retention of accounting-related complaints and concerns;
11•
overseeing the company’s risk management protocols and procedures, including financial, operational, privacy, security, cyber security, competition, legal, regulatory, hedging and accounting risk exposures, and preparing an annual report to our Board on the audit committee’s risk assessment findings and risk management activities;•- recommending, based upon the audit committee's review and discussions with management and our independent registered public accounting firm, whether our audited financial statements shall be included in our Annual Report on Form 10-K;
•- monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to our financial statements and accounting matters;
•- preparing the audit committee report required by SEC rules to be included in our annual proxy statement;
•- reviewing all related party transactions for potential conflict of interest situations and approving all such transactions;
and•- reviewing quarterly earnings
releases.releases; and
• monitoring and ensuring integrity in other risk management areas including cyber security.All audit and non-audit services, other than de minimis non-audit services, to be provided to us by our independent registered public accounting firm must be approved in advance by our audit committee.Compensation CommitteeMr.Janney, Ms. VitulloFischer, Mr. Fuhrman, andDrs. Gotto and OmennMr. Rocamobli currently serve on the compensation committee, which is chaired byMs. Vitullo. Effective as of our Annual Meeting, our compensation committee will consist of Drs. Braunstein and Goldstein and Ms. Vitullo, and will be chaired by Dr. Goldstein.Mr. Fischer. Our Board has determined that each member of the compensation committee is "independent" as that term is defined in the applicable NASDAQ Stock Market rulesis an "outside director" for purposes of Section 162(m)and is "non-employee director" for purposes of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act").The compensation committee's responsibilities include:•- annually reviewing and approving corporate goals relevant to the compensation of our Chief Executive
Officer;Officer (“CEO”);•- evaluating the performance of our
Chief Executive OfficerCEO in light of such corporate goals and determining the compensation of ourChief Executive Officer;CEO;•- reviewing and approving the compensation of our other executive officers;
•- reviewing and establishing our overall management compensation philosophy and policy;
•- overseeing and administering our compensation and similar plans;
•- evaluating and assessing potential and current compensation advisers in accordance with the independence standards identified in the applicable NASDAQ Stock Market rules;
•- retaining and approving the compensation of any compensation advisers;
•- reviewing and approving our policies and procedures for the grant of equity
basedawards;•- reviewing and making recommendations to our Board with respect to the compensation of our non-employee directors;
12•preparing the compensation committee report to accompany our Compensation Discussion and Analysis; and•- reviewing and discussing with management the compensation disclosure required to be included in our
10-K and/or definitive proxy statement;annual proxy statement orAnnual Report on Form10-K.• preparing our compensation committee report if and when required by the SEC rules to be included in our definitive proxy statement; and• reviewing and approving the retention or termination ofContentsany consulting firm or outside advisor to assist in the evaluation of compensation matters.Nominating and Corporate Governance CommitteeDrs. Goldstein,Mr. Carroll, Dr. Gotto, Mr. Shepard andMcGovernMs. Woody currently serve on the nominating and corporate governance committee, which is chaired byDr. Goldstein. Effective as of our Annual Meeting, our nominating and corporate governance committee will consist of Drs. Gotto and McGovern and Ms. Vitullo, and will be chaired by Dr. Gotto.Mr. Shepard. Our Board has determined that each member of the nominating and corporate governance committee is "independent" as that term is defined in the applicable NASDAQ Stock Market rules. The nominating and corporate governance committee's responsibilities include:•- developing and recommending to
the board of directorsour Board criteria for Board and committee membership;•- establishing procedures for identifying and evaluating Board candidates, including nominees recommended by stockholders;
•- identifying individuals qualified to become members of
theour Board;•- recommending to
theour Board the persons to be nominated for election as directors and to each oftheour Board's committees;•- developing and recommending to
theour Board a set of corporate governance guidelines; and•- overseeing the evaluation of
theour Board and management.Compliance CommitteeMr. Fischer, Ms. Vitullo and Ms. Woody currently serve on the compliance committee, which is chaired by Ms. Woody. Mr. Berkowitz also served on the compliance committee until his resignation from the Board on June 15, 2023. The compliance committee's responsibilities include:• assessing the adequacy of our compliance with applicable legal and regulatory requirements and industry codes, as well as the Company’s Code of Conduct;• assessing the adequacy of implementation and effectiveness of our ethics, quality and compliance program periodically to ensure a satisfactory system of compliance and risk management is operating within the Company;• assessing the adequacy of the channels available for reporting concerns regarding compliance-related activities, as well as the policies protecting the anonymity of the reporter and prohibiting retaliation;• assessing the adequacy of our approach to, and results of, risk identification and assessment conducted by management and the appropriateness of risk management plans and their status;• assessing the adequacy of reports on internal investigations or government or regulatory inquiries or actions that may cause significant financial or reputational damage to us, or that otherwise indicate a potentially significant compliance issue within the Company;• receiving information from management about current and emerging legal and regulatory compliance risks and enforcement trends that may affect our business operations, performance or strategy; and13• unless otherwise overseen by the audit committee, oversee, at our Board’s discretion, any investigation into potential instances of non-compliance (except for matters of financial compliance) with applicable laws, regulations, industry-code, or company policies and procedures.Our Board may establish other committees from time to time.Identifying and Evaluating Director NomineesTheOur Board is responsible for selecting its own members.TheOur Board delegates the selection and nomination process to the nominating and corporate governance committee, with the expectation that other members of the Board, and of management, will be requested to take part in the process as appropriate.Generally, the nominating and corporate governance committee identifies candidates for director nominees in consultation with management, through the use of 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. Once candidates have been identified, the nominating and corporate governance committee confirms that the candidates meet all of the minimum qualifications for director nominees established by the nominating and corporate governance committee. The nominating and corporate governance committee may gather information about the candidates through interviews, detailed questionnaires, comprehensive background checks or any other means that the nominating and corporate governance committee deems to be appropriate in the evaluation process. The nominating and corporate governance committee then meets as a group to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of the Board. Based on the results of the evaluation process, the nominating and corporate governance committee recommends candidates for the Board's approval as director nominees for election to the Board.Minimum Qualificationsfor Director Nominees
The nominating and corporate governance committee will consider, among other things, the following qualifications, skills and attributes when recommending candidates fortheour Board's selection as nominees fortheour Board and as candidates for appointment totheour Board's committees. The nominee shall have the highest personal and professional integrity, shall have demonstrated exceptional ability and judgment, and shall be most effective, in conjunction with the other nominees totheour Board, in collectively serving the long-term interests of the stockholders.In evaluating proposed director candidates, the nominating and corporate governance committee may consider, in addition to the minimum qualifications and other criteria for Board membership approved by
theour Board from time to time, all facts and circumstances that it deems appropriate or advisable, including, among other things, the skills of the proposed director candidate, his or her depth and breadth of professional experience or other background characteristics, his or her independence and the needs of our Board. In particular, because theBoard.nominating and corporate governance committee believes that diversity of viewpoints, background, experience and other characteristics (such as gender, race, ethnicity, culture, nationality and sexual orientation) are an important part of our Board’s composition, the nominating and corporate governance committee should include candidates with a diversity of gender, race, ethnicity, culture, nationality or sexual orientation in the pool from which new director nominees are chosen (and any third-party engaged to identify candidates for such pool will be asked to include such candidates of diversity).
Stockholder Recommendations
Stockholders may submit recommendations for director candidates to the nominating and corporate governance committee by sending the individual's name and qualifications to our Corporate Secretary at Esperion Therapeutics, Inc., 3891 Ranchero Drive, Suite 150, Ann Arbor, MI 48108, who will forward all recommendations to the nominating and corporate governance committee. The nominating and corporate governance committee will evaluate any candidates recommended by stockholders against the same criteria and pursuant to the same policies and procedures applicable to the evaluation of candidates proposed by directors or management.
Stockholder Communications
The
Our Board provides to every securityholder the ability to communicate with theour Board, as a whole, and with individual directors on theour Board through an established process for securityholder communication. For a securityholder communication directed to theour Board of Directors as a whole, securityholders may send such communication to the attention of the Lead Independent DirectorChairperson of the Board via U.S. Mail or Expedited Delivery Service to: Esperion Therapeutics, Inc., 3891 Ranchero Drive, Suite 150, Ann Arbor, MI 48108, Attn: Lead Independent Director.
Chairperson of the Board.
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For a securityholder communication directed to an individual director in his or her capacity as a member of theour Board, securityholders may send such communication to the attention of the individual director via U.S. Mail or Expedited Delivery Service to: Esperion Therapeutics, Inc., 3891 Ranchero Drive, Suite 150, Ann Arbor, MI 48108, Attn: [Name of Individual Director].
We will forward by U.S. Mail any such securityholder communication to each director, and the Lead Independent DirectorChairperson of the Board in his or her capacity as a representative of theour Board, to whom such securityholder communication is addressed to the address specified by each such director and the Lead Independent DirectorChairperson of theour Board, unless there are safety or security concerns that mitigate against further transmission.
Board Leadership Structure
The positions of our Executive ChairmanChairperson ("Chairperson") of theour Board and Chief Executive OfficerCEO have historically been separated at Esperion. Since the resignation of Dr. Newton fromUpon his positions as Chief Scientific Officer and Executive Chairman ofappointment to the Board in December 2016, we do not have an Executive Chairman or ChairmanJune 2022, Mr. Carroll serves as Chairperson of theour Board.
Since July 2015, Nicole Vitullo has served as our lead independent director. As the lead independent director, Ms. Vitullo is responsible for coordinating the activities of the independent directors. Among other things, the lead independent director Mr. Carroll has the following specific responsibilities:
•presiding at all executive sessions of independent directors;
•serving as liaison between the Chief Executive Officerour CEO of the BoardCompany and the independent directors;
•approving information sent to theour Board;
•approving Board meeting agendas;
•- approving Board meeting schedules to assure that there is sufficient time for discussion of all agenda items;
•having the authority to call meetings of the independent directors of theour Board; and
•if requested by major stockholders, ensuring that he or she is available for consultation and direct communication.
If there is no Chairperson of our Board, or such Chairperson of our Board is our CEO or otherwise is a non-independent director, then our Board shall appoint a lead independent director (the “Lead Independent Director”). The Lead Independent Director, if appointed, shall be elected by vote of a majority of the independent directors. The independent director selected to serve as Lead Independent Director shall serve in such role until he or she ceases to be an independent director, resigns from the position or a successor is selected by a majority of the independent directors. From July 2015 until June 2022, upon Mr. Carroll's appointment as Chairperson of our Board, Nicole Vitullo served as our Lead Independent Director. As the Lead Independent Director, Ms. Vitullo was responsible for coordinating the activities of the independent directors. Among other things, the Lead Independent Director has the following specific responsibilities:
• presiding at all executive sessions of independent directors;
• serving as liaison between our CEO and the independent directors;
• approving information sent to our Board;
• approving Board meeting agendas;
• approving Board meeting schedules to assure that there is sufficient time for discussion of all agenda items;
• having the authority to call meetings of the independent directors of our Board; and
• if requested by major stockholders, ensuring that he or she is available for consultation and direct communication.
Board's Role in Risk Oversight
Our Board oversees the management of risks inherent in the operation of our business and the implementation of our business strategies. Our Board performs this oversight role by using several different levels of review. In connection with its reviews of the operations and corporate functions of our company, our Board addresses the primary risks associated with those operations and
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corporate functions. In addition, our Board reviews the risks associated with our company's business strategies periodically throughout the year as part of its consideration of undertaking any such business strategies.
Each of our Board committees also oversees the management of our company's risk that falls within the committee's areas of responsibility. In performing this function, each committee has full access to management, as well as the ability to engage advisors. Our Vice President, FinanceChief Financial Officer reports to the audit committee and is responsible for identifying, evaluating and implementing risk management controls and methodologies to address any identified risks. In connection with its risk management role, our audit committee meets privately with representatives from our independent registered public accounting firm and our Vice President, Finance.Chief Financial Officer. The audit committee oversees the operation of our risk management program, including the identification of the primary risks associated with our business and periodic updates to such risks, and reports to our Board regarding these activities. The compensation committee also plays a role in that it is charged, in overseeing our overall compensation structure,programs, with assessing whether thatthese compensation structure createsprograms create risks that are reasonably likely to have a material adverse effect on us.
Risks Related to Compensation Policies and Practices
In establishing and reviewing our compensation philosophy and programs, our Boardcompensation committee considers whether such programs encourage unnecessary or excessive risk taking. We believe that our executive and other compensation programs do not encourage excessive or unnecessary risk taking. This is primarily due to the fact that our compensation programs are designed to encourage our executive officers and other employees to remain focused on both short-term and long-term strategic goals. As a result, we do not believe that our compensation programs are reasonably likely to have a material adverse effect on us.
PROPOSAL TWO
NON-BINDING ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
Our Board is committed to excellence in governance. As part of this commitment, and as required by Section 14A(a)(1) of the Exchange Act, our Board is providing our stockholders with an opportunity to cast a non-binding advisory vote on the compensation of our named executive officers.
As described below under "Executive Officer and Director Compensation—Compensation, Discussion and Analysis," we have developed a compensation program that is designed to attract and retain key executives responsible for our success and motivate management to enhance long-term stockholder value. The executive compensation program is designed to reward short-term and long-term performance and to align the financial interests of our executive officers with the interests of our stockholders. We believe our executive compensation program strikes an appropriate balance between the implementation of responsible, measured compensation practices and the effective provision of incentives for our named executive officers to exert their best efforts for our success.
We are asking for stockholder approval, on ana non-binding advisory basis, of the compensation of our named executive officers as disclosed in this Proxy Statement, which includeincludes the disclosures in the "Executive Officer and Director Compensation" and "Compensation Discussion and Analysis" sectionssection below, the compensation tables, and the narrative discussion following the compensation tables in this Proxy Statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the policies and practices described in this Proxy Statement. For the reasons discussed above, our Board unanimously recommends that our stockholders vote in favor of the following resolution:
"RESOLVED,
"RESOLVED, that the Company's stockholders hereby approve, on ana non-binding advisory basis, the compensation of the named executive officers, as disclosed in the Company's proxy statement for the 20172024 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission,SEC, including the Compensation Discussion and Analysis,2023 Summary Compensation Table, and the other compensation related tables and disclosure.the narrative discussion following the compensation tables in this Proxy Statement."
As this vote is advisory, it will not be binding upon our Board or the compensation committee and neither our Board nor the compensation committee will be required to take any action as a result of the outcome of this vote. However, the Board and the compensation committee value the opinion of our stockholders and the compensation committee will carefully consider the outcome of this vote when considering futureevaluating our executive compensation policies and practices and making future compensation decisions.
Vote Required
For approval, this proposal must receive the affirmative vote of the majority of shares properly cast on the proposal. Abstentions and broker non-votes will have no effect on Proposal Two.
Recommendation of the Board
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE NON-BINDING ADVISORY RESOLUTION APPROVING OUR NAMED EXECUTIVE OFFICER COMPENSATION.
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PROPOSAL THREE
RATIFICATION OF THE APPOINTMENT OF
OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have appointed Ernst & Young LLP as our independent registered public accounting firm to perform the audit of our financial statements for the fiscal year ending December 31, 2017,2024, and we are asking you and other stockholders to ratify this appointment. Ernst & Young LLP has served as our independent registered public accounting firm since 2008.
The audit committee annually reviews the independent registered public accounting firm's independence, including reviewing all relationships between the independent registered public accounting firm and us and any disclosed relationships or services that may impact the objectivity and independence of the independent registered public accounting firm, and the independent registered public accounting firm's performance. As a matter of good corporate governance, theour Board determined to submit to stockholders for ratification the appointment of Ernst & Young LLP. A majority of the votes properly cast is required in order to ratify the appointment of Ernst & Young LLP. In the event that a majority of the votes properly cast do not ratify this appointment of Ernst & Young LLP, we will review our future appointment of Ernst & Young LLP.
We expect that a representative of Ernst & Young LLP will virtually attend the Annual Meeting and the representative will have an opportunity to make a statement if he or she so chooses. The representative will also be available to respond to appropriate questions from stockholders.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm
We have adopted a policy on under which the audit committee must pre-approve all audit and permissible non-audit services to be provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval would generally be requested annually, with any pre-approval detailed as to the particular service, which must be classified in one of the four categories of services listed below. The audit committee may also, on a case-by-case basis, pre-approve particular services that are not contained in the annual pre-approval request. In connection with this pre-approval policy, the audit committee also considers whether the categories of pre-approved services are consistent with the rules on accountant independence of the SEC and the Public Company Accounting Oversight Board.
In addition, in the event time constraints require pre-approval prior to the audit committee's next scheduled meeting, the audit committee has authorized its Chairperson to pre-approve services. Engagements so pre-approved are to be reported to the audit committee at its next scheduled meeting.
Audit Fees
The following table sets forth the fees billed by Ernst & Young LLP for audit, audit-related, tax and all other services rendered for 20162023 and 2015:
2022:
| Fee Category | 2023 | 2022 | ||||||||||||||||||
| Audit Fees | $ | 730,400 | $ | 727,600 | ||||||||||||||||
| Audit-Related Fees | 42,000 | 40,000 | ||||||||||||||||||
| Tax Fees | — | — | ||||||||||||||||||
| All Other Fees | — | — | ||||||||||||||||||
| Total | $ | 772,400 | $ | 767,600 | ||||||||||||||||
Fee Category | 2016 | 2015 | |||||
|---|---|---|---|---|---|---|---|
Audit Fees | $ | 330,000 | $ | 391,225 | |||
Audit-Related Fees | — | — | |||||
Tax Fees | 17,885 | 46,200 | |||||
All Other Fees | — | — | |||||
| | | | | | | | |
Total | $ | 347,885 | $ | 437,425 | |||
| | | | | | | | |
Audit Fees.Consist of aggregate fees for professional services provided in connection with the annual audit of our financial statements, the review of our quarterly condensed financial statements, consultations on accounting matters directly related to the audit, and comfort letters, consents and assistance with and review of documents filed with the SEC.
Audit-Related Fees.Consist of aggregate fees for accounting consultations and other services that were reasonably related to the performance of audits or reviews of our financial statements and were not reported above under "Audit Fees".Fees," including services for audit of employee benefit plans.
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Tax Fees.Consist of aggregate fees for tax compliance, tax advice and tax planning services including the review and preparation of our federal and state income tax returns.
All Other Fees.Consist of aggregate fees billed for products and services provided by the independent registered public accounting firm other than those disclosed above.
The audit committee pre-approved all services performed since the pre-approval policy was adopted.
Vote Required
For approval, this proposal must receive the affirmative vote of the majority of shares properly cast on the proposal. Abstentions and broker non-votes, if any, will have no effect on Proposal Three.
Recommendation of the Board
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2017.2024.
PROPOSAL FOUR
APPROVAL OF AN AMENDMENT TO THE ESPERION THERAPEUTICS, INC. 2022 STOCK OPTION AND INCENTIVE PLAN
At the Annual Meeting, our stockholders will be asked to approve a second amendment (the “Amendment”) to the Esperion Therapeutics, Inc. 2022 Stock Option and Incentive Plan, as amended (the “2022 Plan”) to increase the authorized shares under the 2022 Plan by 6,250,000 shares.The 2022 Plan was originally approved by our Board on April 13, 2022, subject to stockholder approval which was received on May 26, 2022 and a first amendment was approved by our Board on April 1, 2023, subject to stockholder approval which was received on June 15, 2023. Stock prices across companies in our industry have fallen in 2023 and 2024 to date, and we have been particularly impacted by the significant volatility faced by many mid-size biotech companies including macro challenges to the industry and company headwinds over the past year. As a result, to remain competitive with the industry and to retain key employee talent, we have granted awards at lower stock prices, which utilized more shares than we had anticipated at the beginning of 2023. We believe that the benefits to our stockholders from equity award grants to our employees and directors outweigh the potential dilutive effect of additional grants under the 2022 Plan. Further, we believe that paying a significant portion of variable compensation in the form of equity awards is an effective method of aligning the interests of employees with those of our stockholders, encouraging ownership in the Company, and retaining, attracting and rewarding talented employees. Our Board approved the Amendment on April 1, 2024, subject to stockholder approval at the Annual Meeting. The Amendment provided for the increase in the aggregate number of shares of common stock that may be issued under the 2022 Plan, from 10,650,000 shares to 16,900,000 shares, which we expect to use for future equity grants over the next approximately one year. We believe that the current number of shares of common stock remaining available for issuance under the 2022 Plan has become insufficient to meet our future needs for attracting, motivating and retaining employees in a competitive market for talent. A copy of the Amendment is attached as Annex A to this Proxy Statement, and is incorporated by reference herein.
We are requesting that stockholders approve the proposed Amendment. If this proposal is approved by our stockholders at the Annual Meeting, the Amendment providing for the additional 6,250,000 shares will become effective on the date of the Annual Meeting. If stockholders do not approve the Amendment, the proposed 6,250,000 additional shares will not become available for issuance under the 2022 Plan. All other existing provisions of the 2022 Plan remain in effect. In such event, our Board will consider whether to adopt alternative arrangements based on its assessment of our needs, and it may become necessary to increase cash compensation to replace any shortfall in available equity, which we do not believe is advisable or in our stockholders’ best interests. We believe that the proposed share pool increase to the 2022 Plan pursuant to the Amendment is reasonable, appropriate, and in the best interests of our stockholders.
If stockholders approve the Amendment, as of April 1, 2024, the number of shares available for future awards under the 2022 Plan will increase by 6,250,000 shares to 7,388,757 shares.
Reasons Why We Urge Stockholders to Vote in Favor of the Amendment to the 2022 Plan
Our Board recommends a vote for the approval of the Amendment to the 2022 Plan for the following reasons:
•Alignment of employee and stockholder interests. We currently provide long-term incentives using equity awards to all of our colleagues. With your approval of the Amendment to the 2022 Plan, we will be able to continue providing equity awards to align the interests of key personnel with the interests of our stockholders.
•Approval is necessary to continue an equity based compensation program. If stockholders do not approve the Amendment to the 2022 Plan, we may have to turn to alternative award vehicles, including cash, which will not achieve our stockholder alignment objectives, and will negatively impact our cash management and operating expenses. Based on the remaining capacity under the 2022 Plan, we do not expect to have sufficient capacity to make our next annual cycle of equity awards.
•Equity enables us to attract, retain and motivate key talent. The 2022 Plan is a critical tool to allow us to attract, retain, and motivate key employees by providing incentives directly related to increases in the value of our stock.
•Regular stockholder input. As noted above, we expect that the proposed increase should be sufficient to support our compensation plans over the next 12 months. Given the significant volatility in our stock price, in the near term we intend to make annual requests to stockholders for additional shares under the 2022 Plan to allow stockholders to monitor our share usage and provide ongoing input on our equity grant practices.
Additional Information on Outstanding Equity Awards and Available Shares under the 2022 Plan, the 2020 ESPP, the 2017 Plan, and the 2013 Plan
As of April 1, 2024, there were stock options and performance-based stock options to acquire 6,044,347 shares of common stock outstanding under our equity compensation plans, with a weighted average exercise price of $9.41 per share and a weighted average
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remaining term of 8.2 years. In addition, as of April 1, 2024, there were 5,972,596 unvested full value awards with time-based vesting outstanding. Other than the foregoing, no awards were outstanding under our equity compensation plans as of April 1, 2024. As of April 1, 2024, there were 2,569,275 shares of common stock available for awards under our equity compensation plans, consisting of 1,138,757 shares available for grant under the 2022 Plan, 1,216,024 shares available for grant under the 2017 Inducement Equity Plan (the “2017 Plan”), and 214,494 shares available for grant under our 2020 Employee Stock Purchase Plan, as amended (the "2020 ESPP").
Based solely on the closing price of our common stock as reported by the NASDAQ Global Market on April 1, 2024 and the maximum number of shares that would have been available for awards as of such date, taking into account the proposed increase described herein, the maximum aggregate market value of the common stock that could potentially be issued under the 2022 Plan is $47,151,000.
All members of our Board and all of the Company’s executive officers will be eligible for awards under the 2022 Plan and thus have a personal interest in the approval of the Amendment.
Stockholders are requested in this Proposal Four to approve the Amendment. Approval of the Amendment requires the affirmative vote of a majority of the votes cast, in person or represented by proxy, and entitled to vote at the Annual Meeting. Abstentions and broker non-votes, to the extent applicable, are not included in the tabulation of the voting results and therefore will not have an effect on the outcome of the vote. If stockholders do not approve this Amendment, the 2022 Plan will continue in accordance with its current terms.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL FOUR.
Summary of Material Features of the 2022 Plan
The essential features of the 2022 Plan, as proposed to be amended, are outlined below:
The principal terms of the 2022 Plan are summarized below. The following summary is qualified in its entirety by the full text of the 2022 Plan and the Amendment, which appears as Annex A to this Proxy Statement.
•The 2022 Plan does not contain an annual “evergreen” provision, but rather authorizes a fixed number of shares, meaning that stockholder approval is required to issue any additional shares, allowing our stockholders to have direct input on our equity compensation programs;
•The maximum number of shares of common stock to be issued under the 2022 Plan is 10,650,000. The proposed Amendment to the 2022 Plan would increase the available shares to 16,900,000;
•The award of stock options (both incentive and non-qualified options), stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, cash-based awards, and dividend equivalent rights is permitted;
•Shares we reacquire on the open market will not be added to the reserved pool under the 2022 Plan. With respect to any awards granted under the 2022 Plan, shares tendered or held back for taxes, shares underlying any awards that are forfeited, canceled, held back upon exercise of an option or settlement of an award to cover the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of shares or otherwise terminated (other than by exercise) shall be added back to the shares of our common stock available for issuance under the 2022 Plan;
•Stock options and stock appreciation rights will not be repriced in any manner without stockholder approval;
•The value of all awards granted under the 2022 Plan and all other cash compensation paid by us to any non-employee director in any calendar year may not exceed $750,000;
•A minimum vesting period of one year is required for all equity awards, other than a limited number of excepted awards under the Plan;
•Any dividends and dividend equivalent rights payable with respect to any equity award are subject to the same vesting provisions as the underlying award;
•Our 2022 Plan does not contain any “liberal” change in control provisions, meaning that the 2022 Plan does not provide for single-trigger acceleration in the event of a change in control transaction (defined as a “sale event” in the 2022 Plan);
•Any material amendment to the 2022 Plan is subject to approval by our stockholders; and
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•The term of the 2022 Plan will expire on May 26, 2032 (its original expiration date).
Summary of the Plan
The principal terms of the 2022 Plan are summarized below. The following summary is qualified in its entirety by the full text of the 2022 Plan and the Amendment, which appears as Annex A to this Proxy Statement.
Administration. The 2022 Plan will be administered by our Board or the compensation committee. The compensation committee has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2022 Plan. The compensation committee may delegate to a committee consisting of one or more officers of the Company the authority to grant awards to employees who are not subject to the reporting and other provisions of Section 16 of the Exchange Act, subject to certain limitations and guidelines.
Eligibility; Plan Limits. All full-time and part-time officers, employees, non-employee directors and consultants are eligible to participate in the 2022 Plan, subject to the discretion of the administrator. As of December 31, 2023, approximately 248 individuals were eligible to participate in the 2022 Plan, which includes five executive officers, and eight non-employee directors. The Company has not historically granted equity awards to consultants and no awards have been granted to consultants from the 2022 Plan. There are certain limits on the number of awards that may be granted under the 2022 Plan. For example, no more than 1,250,000 shares of common stock may be granted in the form of incentive stock options.
Director Compensation Limit. The 2022 Plan provides that the value of all awards awarded under the 2022 Plan and all other cash compensation paid by the Company to any non-employee director in any calendar year shall not exceed $750,000.
Minimum Vesting Period. The minimum vesting period for each equity award granted under the 2022 Plan must be at least one year, provided (1) that up to 5% of the shares authorized for issuance under the 2022 Plan may be utilized for unrestricted stock awards or other equity awards with a minimum vesting period of less than one year and (2) annual awards to non-employee directors that occur in connection with the Company’s annual meeting of stockholders may vest on the date of the Company’s next annual meeting of stockholders. In addition, the Administrator may grant equity awards that vest within one year (i) if such awards are granted as substitute awards in replacement of other awards (or awards previously granted by an entity being acquired (or assets of which are being acquired)) that were scheduled to vest within one year or (ii) if such awards are being granted in connection with an elective deferral of cash compensation that, absent a deferral election, otherwise would have been paid to the grantee within the one year.
Stock Options. The 2022 Plan permits the granting of (i) options to purchase common stock intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and (ii) options that do not so qualify. Options granted under the 2022 Plan will be non-qualified options if they fail to qualify as incentive stock options or exceed the annual limit on incentive stock options. Incentive stock options may only be granted to employees of the Company and its subsidiaries. Non-qualified options may be granted to any persons eligible to receive incentive stock options and to non-employee directors and consultants. The option exercise price of each option will be determined by the compensation committee. Except in the case of options (i) granted pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code, (ii) granted to individuals who are not subject to U.S. income tax on the date of grant or (iii) that are compliant with Section 409A of the Code, the exercise price of an option may not be less than 100% of the fair market value of the common stock on the date of grant. Fair market value for this purpose will be determined by reference to the price of the shares of common stock on NASDAQ. The exercise price of an option may not be reduced after the date of the option grant without stockholder approval, other than to appropriately reflect changes in our capital structure.
The term of each option will be fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committee will determine at what time or times each option may be exercised. Options may be made exercisable in installments and the exercisability of options may be accelerated by the compensation committee. In general, unless otherwise permitted by the compensation committee, no option granted under the 2022 Plan is transferable by the optionee other than by will or by the laws of descent and distribution or pursuant to a domestic relations order, and options may be exercised during the optionee’s lifetime only by the optionee, or by the optionee’s legal representative or guardian in the case of the optionee’s incapacity.
Upon exercise of options, the option exercise price must be paid in full either in cash, by certified or bank check or other instrument acceptable to the compensation committee, or by delivery (or attestation to the ownership) of shares of common stock that are beneficially owned by the optionee and that are not subject to risk of forfeiture. Subject to applicable law, the exercise price may also be delivered to the Company by a broker pursuant to irrevocable instructions to the broker from the optionee. In addition, non-qualified options may be exercised using a net exercise feature which reduces the number of shares issued to the optionee by the number of shares with a fair market value equal to the exercise price.
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To qualify as incentive stock options, options must meet additional federal tax requirements, including a $100,000 limit on the value of shares subject to incentive stock options that first become exercisable by a participant in any one calendar year.
Stock Appreciation Rights. The compensation committee may award stock appreciation rights subject to such conditions and restrictions as the compensation committee may determine. Stock appreciation rights entitle the recipient to shares of common stock or cash equal to the value of the appreciation in the stock price over the exercise price. The exercise price may not be less than the fair market value of the common stock on the date of grant. The term of a stock appreciation right may not exceed ten years.
Restricted Stock. The compensation committee may award shares of common stock to participants subject to such conditions and restrictions as the compensation committee may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with us through a specified restricted period. During the vesting period, restricted stock awards may be credited with dividend equivalent rights (but dividend equivalents payable with respect to restricted stock awards shall not be paid until and only to the extent such vesting conditions are attained).
Restricted Stock Units. The compensation committee may award restricted stock units to participants. Restricted stock units are ultimately payable in the form of shares of common stock or cash subject to such conditions and restrictions as the compensation committee may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with the Company through a specified vesting period. In the compensation committee’s sole discretion, it may permit a participant to make an advance election to receive a portion of his or her future cash compensation otherwise due in the form of a restricted stock unit award, subject to the participant’s compliance with the procedures established by the compensation committee and requirements of Section 409A of the Code. During the deferral period, the deferred stock awards may be credited with dividend equivalent rights.
Unrestricted Stock Awards. The compensation committee may also grant shares of common stock that are free from any restrictions under the 2022 Plan. Unrestricted stock may be granted to any participant in recognition of past services or other valid consideration and may be issued in lieu of cash compensation due to such participant.
Dividend Equivalent Rights. The compensation committee may grant dividend equivalent rights to participants, which entitle the recipient to receive credits for dividends that would be paid if the recipient had held specified shares of common stock. Dividend equivalent rights granted as a component of another award (other than a stock option or stock appreciation right) may be paid only if the related award becomes vested. Dividend equivalent rights may be settled in cash, shares of common stock, or a combination thereof, in a single installment or installments, as specified in the award.
Cash-Based Awards. The compensation committee may grant cash bonuses under the 2022 Plan to participants. The cash bonuses may be subject to the achievement of certain performance goals.
Change of Control Provisions. In the event of a “sale event,” as defined in the 2022 Plan, awards under the 2022 Plan may be assumed, continued or substituted. In the event that awards are not assumed, continued or substituted, except as otherwise provided by the compensation committee in the award agreement, upon the effective time of the sale event, all awards with time-based conditions will become vested and exercisable upon the sale event, and awards with conditions and restrictions relating to the attainment of performance goals may become vested and non-forfeitable in connection with a sale event in the compensation committee’s discretion or to the extent specified in the relevant award agreement. In addition, the Company may make or provide for payment, in cash or in kind, to participants holding stock options and stock appreciation rights equal to the difference between the per share cash consideration and the exercise price of the stock options or stock appreciation rights (provided that, in the case of an option or stock appreciation right with an exercise price equal to or greater than the per share cash consideration, such option or stock appreciation right shall be cancelled for no consideration). The compensation committee shall also have the option to make or provide for a payment, in cash or in kind, to grantees holding other awards in an amount equal to the per share cash consideration multiplied by the number of vested shares under such awards. All awards will terminate in connection with a sale event unless they are assumed by the successor entity.
Adjustments for Stock Dividends, Stock Splits, Etc. The 2022 Plan requires the compensation committee to make appropriate adjustments to the number of shares of common stock that are subject to the 2022 Plan, to certain limits in the 2022 Plan, and to any outstanding awards to reflect stock dividends, stock splits, extraordinary cash dividends and similar events.
Tax Withholding. Participants in the 2022 Plan are responsible for the payment of any federal, state or local taxes that the Company is required by law to withhold upon the exercise of stock options or stock appreciation rights or vesting of other awards. The compensation committee may require that tax withholding obligations satisfied by withholding shares of common stock to be issued pursuant to exercise or vesting. The compensation committee may also require the Company’s tax withholding obligation to be satisfied, in whole or in part, by an arrangement whereby a certain number of shares issued pursuant to any award are immediately sold and proceeds from such sale are remitted to the Company in an amount that would satisfy the withholding amount due.
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Amendments and Termination. The Board of Directors may at any time amend or discontinue the 2022 Plan and the compensation committee may at any time amend or cancel any outstanding award for the purpose of satisfying changes in the law or for any other lawful purpose. However, no such action may adversely affect any rights under any outstanding award without the holder’s consent. To the extent required under the rules of NASDAQ any amendments that materially change the terms of the 2022 Plan will be subject to approval by our stockholders. Amendments shall also be subject to approval by our stockholders if and to the extent determined by the compensation committee to be required by the Code to preserve the qualified status of incentive stock options.
Federal Income Tax Consequences of Awards under the Amended 2022 Plan
The U.S. federal income tax consequences of the 2022 Plan under current federal law, which is subject to change, are summarized in the following discussion of the general tax principles applicable to the 2022 Plan. This summary is not intended to be exhaustive and, among other considerations, does not describe the deferred compensation provisions of Section 409A of the Code to the extent an award is subject to and does not satisfy those rules, nor does it describe state, local, or international tax consequences.
With respect to nonqualified stock options, the Company is generally entitled to deduct, except to the extent limited by Section 162(m) of the Code, and the participant recognizes taxable income in an amount equal to the difference between the option exercise price and the fair market value of the shares at the time of exercise. With respect to incentive stock options, the Company is generally not entitled to a deduction nor does the participant recognize income at the time of exercise, although if the participant is subject to the U.S. federal alternative minimum tax, the difference between the option exercise price and the fair market value of the shares at the time of exercise is includible for purposes of such alternative minimum tax. If the shares acquired by exercise of an incentive stock option are held for at least two years from the date the option was granted and one year from the date it was exercised, any gain or loss arising from a subsequent disposition of those shares will be taxed as long-term capital gain or loss, and the Company will not be entitled to any deduction. If, however, such shares are disposed of within the above-described period, then in the year of that disposition the participant will recognize compensation taxable as ordinary income equal to the excess of the lesser of (i) the amount realized upon that disposition and (ii) the excess of the fair market value of those shares on the date of exercise over the purchase price, and the Company will be entitled to a corresponding deduction, except to the extent limited by Section 162(m) of the Code.
The current federal income tax consequences of other awards authorized under the 2022 Plan generally follow certain basic patterns: nontransferable restricted stock subject to a substantial risk of forfeiture results in income recognition equal to the excess of the fair market value over the price paid (if any) only at the time the restrictions constituting a substantial risk of forfeiture lapse (unless the recipient elects to accelerate recognition as of the date of grant); bonuses, restricted stock units, stock appreciation rights, cash and stock-based performance awards, dividend equivalents, stock units, and other types of awards are generally subject to tax at the time of payment; and compensation otherwise effectively deferred is taxed when paid. In each of the foregoing cases, the Company will generally have a corresponding deduction at the time the participant recognizes income, except to the extent limited by Section 162(m) of the Code.
If an award is accelerated under the 2022 Plan in connection with a “change in control” (as defined in the 2022 Plan), the Company may not be permitted to deduct the portion of the compensation attributable to the acceleration (“parachute payments”) if it exceeds certain threshold limits under Section 280G of the Code (and certain related excise taxes may be triggered). Furthermore, Section 162(m) of the Code limits to $1 million the amount that a publicly held corporation is allowed each year to deduct for compensation paid to the corporation’s “covered employees.” “Covered employees” include the corporation’s chief executive officer, chief financial officer and three next most highly compensated executive officers. If an individual is determined to be a covered employee for any year beginning after December 31, 2017, then that individual will continue to be a covered employee for future years, regardless of changes in the individual’s compensation or position. Beginning on or after January 1, 2027, the American Rescue Plan Act of 2021 (the “ARPA”) expands the applicability of Section 162(m) of the Code to also include the next five highest paid corporate officers so that the total number of covered employees subject to the $1 million deduction limitation will at least be 10.
New Plan Benefits
The Company has not approved any awards that are conditioned upon stockholder approval of the Amendment. The Administrator has the discretion to grant awards under the 2022 Plan and, therefore, it is not possible as of the date of this Proxy Statement to determine future awards that will be received by the Company’s named executive officers or others under the 2022 Plan. Accordingly, in lieu of providing information regarding benefits that will be received under the 2022 Plan, the following table provides information concerning the benefits that were received by the following persons and groups during 2023 from the 2022 Plan: each named executive officer; all named executive offers, as a group; all current directors who are not named executive officers, as a group; and all current employees who are not named executive officers, as a group.
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| Name and Position | Stock Options | Restricted Stock Units | |||||||||||||||
| Number of Shares (#) | Average Exercise Price ($) | Number of Units (#) | Dollar Value ($)(1) | ||||||||||||||
Sheldon L. Koenig President and Chief Executive Officer | 445,000 | 4.02 | 105,000 | 422,100 | |||||||||||||
JoAnne Foody Chief Medical Officer | 211,800 | 3.01 | 28,750 | 115,575 | |||||||||||||
Eric Warren Chief Commercial Officer | 94,500 | 4.02 | 22,300 | 89,646 | |||||||||||||
| Named Executive Officer Group (3 persons) | 751,300 | 3.73 (2) | 156,050 | 627,321 | |||||||||||||
Non-Executive Director Group (8 persons other than Mr. Koenig) | 168,000 | 1.37 (2) | 41,200 | 56,444 | |||||||||||||
| Employee Group (other than named executive officers) (approximately 176 persons) | 858,800 | 3.27 (2) | 2,015,435 | 6,867,169 (3) | |||||||||||||
| (1) The valuation of stock awards is based on the grant date fair value computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions used in calculating these values, see Note 13 of the notes to our financial statements in our Annual Report on Form 10-K filed with the SEC on February 27, 2024, for the fiscal year ended December 31, 2023. | |||||||||||||||||
| (2) Represents the weighted average exercise price for the group. | |||||||||||||||||
| (3) Represents the aggregate grant date fair value for the group. | |||||||||||||||||
Equity Compensation Plan Information
The following table sets forth aggregate summary information as of December 31, 2023 regarding shares of common stock that may be issued upon the exercise of options and rights under all of our existing equity compensation plans, consisting of the 2022 Plan, the 2013 Plan, the 2017 Plan and the 2020 ESPP. There are no shares that may be issued from the 2013 Plan as of December 31, 2023 and there are no shares that may be issued or exercised under the Incentive Stock Option and Restricted Stock Plan (the “2008 Plan”) as of December 31, 2023.
| Plan Category | Number of securities to be issued upon exercise of outstanding options and vesting of restricted stock units (#) | Weighted-average exercise price of outstanding options ($) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) | |||||||||||
Equity compensation plans approved by security holders (1) | 6,706,375 | 8.65 | 6,134,831 | (2) | ||||||||||
Equity compensation plans not approved by security holders (3) | 849,829 | 14.31 | 1,406,419 | |||||||||||
| Total | 7,556,204 | 7,541,250 | ||||||||||||
(1) Consists of the 2022 Plan, the 2013 Plan and the 2020 ESPP.
(2) On December 31, 2023 included 5,920,337 shares available for grant under the 2022 Plan and 214,494 shares available for grant under our 2020 ESPP.
(3) Consists of the 2017 Plan.
Vote Required
For approval, this proposal must receive the affirmative vote of the majority of shares properly cast on the proposal. Abstentions and broker non-votes will have no effect on Proposal Four.
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Recommendation of the Board
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE AMENDMENT TO THE ESPERION THERAPEUTICS, INC. 2022 STOCK OPTION AND INCENTIVE PLAN AS DESCRIBED ABOVE AND SET FORTH IN ANNEX A HERETO.
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PROPOSAL FIVE
APPROVAL OF AN AMENDMENT TO THE ESPERION THERAPEUTICS, INC. 2020 EMPLOYEE STOCK PURCHASE PLAN
Our 2020 Employee Stock Purchase Plan, as amended (the “ESPP”) was adopted by the Company effective as of May 28, 2020, which was subsequently amended by a first amendment to the ESPP adopted by our Board on July 31, 2020. The ESPP is a broad-based plan that provides an opportunity for eligible employees of the Company and its designated subsidiaries and affiliates to purchase shares of our common stock at a discount from the then-current market price. As of December 31, 2023, there were 214,494 shares available for future purchases under the ESPP.
In view of the limited number of shares remaining available under the ESPP, our Board adopted, subject to approval by our stockholders at the Annual Meeting, a second amendment to the ESPP (the “Amendment”). A copy of the ESPP, as further amended, is attached as Annex B to this Proxy Statement.
We are seeking stockholder approval of the Amendment to the ESPP to increase the number of shares of our common stock reserved future purchases under the ESPP by 6,175,000 additional shares. If our stockholders approve the Amendment, it will become effective on the date of such stockholder approval. If our stockholders do not approve the Amendment, the number of shares of our common stock reserved for future purchases under the ESPP will not increase.
Approval of the Amendment by our stockholders will enable the Company to continue to offer a market relevant broad-based stock purchase plan to employees. Our compensation committee believes that the ESPP is in the best interest of the Company and its stockholders because it will provide an important tool to attract, retain and reward the talented professionals needed for our success both within and outside the United States. In addition, in encouraging share ownership by employees, the ESPP will align the interests of employees and stockholders. If the ESPP is not approved, the ESPP will remain in effect but will not have an adequate number of shares to provide for future purchases beyond a limited period.
The following summary description of the ESPP is qualified in its entirety by reference to the complete text of the ESPP, which is attached hereto as Annex B to this Proxy Statement.
Summary of the Material Provisions of the ESPP
The following description of certain provisions of the ESPP (as amended by the Amendment) is intended to be a summary only. The summary is qualified in its entirety by the full text of the ESPP, a copy of which is attached hereto as Appendix B. It is our intention that the ESPP qualify as an “employee stock purchase plan” under Section 423(b) of the Code.
Shares Subject to the Plan. Subject to adjustment upon changes in capitalization of the Company, the maximum number of shares of our common stock that will be authorized and reserved for sale under the ESPP will be 7,000,000 shares of our common stock, comprised of 825,000 shares as originally authorized under the ESPP, plus an additional 6,175,000 shares of our common stock if the Amendment is approved by our stockholders at the Annual Meeting.
Plan Administration. The ESPP will be administered by the person or persons appointed by our Board from time to time, such administrator will have full authority to make, administer and interpret such rules and regulations regarding the ESPP as it deems advisable.
Eligibility. Any employee of the Company or its U.S. subsidiaries is eligible to participate in the ESPP so long as the employee has been employed for more than 20 hours a week and have completed at least three months of employment. No person who owns or holds, or as a result of participation in the ESPP would own or hold, common stock or options to purchase common stock, that together equal to 5% or more of total outstanding common stock is entitled to participate in the ESPP. No employee may exercise an option granted under the ESPP that permits the employee to purchase shares of our common stock having a value of more than $25,000 (determined using the fair market value of the stock at the time such option is granted) in any calendar year.
Payroll Deductions; Participation. Participation in the ESPP is limited to eligible employees who authorize payroll deductions equal to a whole percentage of base pay to the ESPP. Employees may authorize payroll deductions, with a minimum of 1% of base pay and a maximum of 10% of base pay. As of April 1, 2024 are currently approximately 294 employees who will be eligible to participate in the ESPP. Once an employee becomes a participant in the ESPP, that employee will automatically participate in successive offering periods, as described below, until such time as that employee withdraws from the ESPP, becomes ineligible to participate in the ESPP, or his or her employment ceases.
Offering Periods. Unless otherwise determined by the compensation committee, each offering of common stock under the ESPP will be for a period of six months, which we refer to as an “offering period.” Unless otherwise determined by the administrator, an offering period will begin on the first business day occurring on or after each September 1 and March 1 and will end on the last business day occurring on or before the following February 28, or February 29, in case of a leap year, and August 31, respectively. Shares are purchased on the last business day of each offering period, with that day being referred to as an "exercise date." The administrator may establish different offering periods or exercise dates under the ESPP.
Exercise Price. On the first day of an offering period, we will grant to employees participating in that offering period an option to purchase shares of our common stock. On the exercise date of each offering period, the employee is deemed to have exercised the
27
option, at the exercise price, to the extent of accumulated payroll deductions. The option exercise price is equal to the lesser of (i) 85% of the fair market value per share of our common stock on the first day of the offering period or (ii) 85% of the fair market value per share of our common stock on the exercise date. The maximum number of shares of common stock that may be issued to any employee under the ESPP in any offering period is the lowest of (a) a number of shares of our common stock determined by dividing a participant's accumulated payroll deductions on the exercise date by the lower of (i) 85% of the fair market value per share of our common stock on the first day of the offering period or (ii) 85% of the fair market value per share of our common stock on the exercise date, (b) a number of shares of our common stock determined by dividing $25,000 by the fair market value per share of our common stock on the first day of the offering period; or (c) such other lesser number of shares as determined by our compensation committee from time to time.
Subject to certain limitations, the number of shares of our common stock a participant purchases in each offering period is determined by dividing the total amount of payroll deductions withheld from the participant's compensation during the offering period by the option exercise price. In general, if an employee is no longer a participant on an exercise date, the employee's option will be automatically terminated, and the amount of the employee's accumulated payroll deductions will be refunded.
Terms of Participation. Except as may be permitted by the compensation committee in advance of an offering, a participant may not increase or decrease the amount of his or her payroll deductions during any offering period, but may increase or decrease his or her payroll deduction with respect to the next offering period by filing a new enrollment form one month before the first day of such offering period and ending on 15 business days prior to the first day of such offering period (or as determined by the Administrator). A participant may withdraw from an offering period at any time without affecting his or her eligibility to participate in future offering periods. If a participant withdraws from an offering period, that participant may not again participate in the same offering period, but may enroll in subsequent offering periods. An employee's withdrawal will be effective as of the business day following the employee's delivery of written notice of withdrawal under the ESPP.
Term; Amendments and Termination. The ESPP will continue until terminated by our board of directors. Our board of directors may, in its discretion, at any time, terminate or amend the ESPP. Upon termination of the ESPP, all amounts in the accounts of participating employees will be refunded.
New Plan Benefits
Since participation in the ESPP is voluntary, the benefits or amounts that will be received by or allocated to any individual or group of individuals under the amended and restated ESPP in the future are not determinable.
Summary of Federal Income Tax Consequences
The following is only a summary of the effect of the United States income tax laws and regulations upon an employee and us with respect to an employee's participation in the ESPP. This summary does not purport to be a complete description of all federal tax implications of participation in the ESPP, nor does it discuss the income tax laws of any municipality, state or foreign country in which a participant may reside or otherwise be subject to tax.
A participant in the ESPP recognizes no taxable income either as a result of participation in the ESPP or upon exercise of an option to purchase shares of our common stock under the terms of the ESPP.
If a participant disposes of shares purchased upon exercise of an option granted under the ESPP within two years from the first day of the applicable offering period or within one year from the exercise date, which we refer to as a "disqualifying disposition," the participant will realize ordinary income in the year of that disposition equal to the amount by which the fair market value of the shares on the date the shares were purchased exceeds the purchase price. The amount of ordinary income will be added to the participant's basis in the shares, and any additional gain or resulting loss recognized on the disposition of the shares will be a capital gain or loss. A capital gain or loss will be long-term if the participant's holding period is more than 12 months, or short-term if the participant's holding period is 12 months or less.
If the participant disposes of shares purchased upon exercise of an option granted under the ESPP at least two years after the first day of the applicable offering period and at least one year after the exercise date, the participant will realize ordinary income in the year of disposition equal to the lesser of (1) 15% of the fair market value of the common stock on the first day of the offering period in which the shares were purchased and (2) the excess of the amount actually received for the common stock over the amount paid. The amount of any ordinary income will be added to the participant's basis in the shares, and any additional gain recognized upon the disposition after that basis adjustment will be a long-term capital gain. If the fair market value of the shares on the date of disposition is less than the exercise price, there will be no ordinary income and any loss recognized will be a long-term capital loss.
We are generally entitled to a tax deduction in the year of a disqualifying disposition equal to the amount of ordinary income recognized by the participant as a result of that disposition. In all other cases, we are not allowed a deduction.
Vote Required
For approval, this proposal must receive the affirmative vote of the majority of shares properly cast on the proposal. Abstentions and broker non-votes will have no effect on Proposal Five.
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Recommendation of the Board
THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE AMENDMENT TO THE ESPERION THERAPEUTICS, INC. 2020 EMPLOYEE STOCK PURCHASE PLAN.
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Report of the Audit Committee of the Board of Directors
The information contained in this audit committee report shall not be deemed to be (1) "soliciting material," (2) "filed" with the SEC, (3) subject to Regulations 14A or 14C of the Exchange Act, or (4) subject to the liabilities of Section 18 of the Exchange Act. No portion of this audit committee report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, through any general statement incorporating by reference in its entirety the proxy statement in which this report appears, except to the extent that Esperion specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed filed under either the Securities Act or the Exchange Act.
This report is submitted by the audit committee of the Board. The audit committee consists of the threefour directors whose names appear below. None of the members of the audit committee is an officer or employee of Esperion, and the Board has determined that each member of the audit committee is "independent" for audit committee purposes as that term is defined under Rule 10A-3 of the Exchange Act, and the applicable NASDAQ Stock Market rules. Each member of the audit committee meets the requirements for financial literacy under the applicable rules and regulations of the SEC and NASDAQ Stock Market. The Board has designated Dr. BraunsteinMr. Fuhrman as an "audit committee financial expert," as defined under the applicable rules of the SEC. The audit committee operates under a written charter adopted by the Board.
The audit committee's general role is to assist the Board in monitoring our financial reporting process and related matters. Its specific responsibilities are set forth in its charter.
The audit committee has reviewed the company's financial statements for 20162023 and met with management, as well as with representatives of Ernst & Young LLP, the company's independent registered public accounting firm, to discuss the financial statements. The audit committee also discussed with members of Ernst & Young LLP the matters required to be discussed by the Auditing Standard No. 16, as amended (AICPAPerformance Standards Vol. 1. AU Section 380), as adopted byapplicable requirements of the Public Company Accounting Oversight Board in Rule 3200T.
and the SEC.
In addition, the audit committee received the written disclosures and the letter from Ernst & Young LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the audit committee concerning independence, and discussed with members of Ernst & Young LLP its independence.
Based on these discussions, the financial statement review and other matters it deemed relevant, the audit committee recommended to the Board that the company's audited financial statements for 20162023 be included in its Annual Report on Form 10-K for 2016.
2023.
Audit Committee
Alan Fuhrman (Chairperson)
Stephen Rocamboli
Jay P. Shepard
Nicole Vitullo
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SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to us regarding the beneficial ownership of our common stock as of February 1, 2017,March 26, 2024, for:
•each person known by us to be the beneficial owner of more than 5% of our common stock;
•our named executive officers;
•each of our directors; and
•all executive officers and directors as a group.
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Except as noted by footnote, and subject to community property laws where applicable, we believe, based on the information provided to us, that the persons and entities named in the table below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.
The table lists applicable percentage ownership based on 22,555,413189,400,567 shares of common stock outstanding as of February 1, 2017. OptionsMarch 26, 2024. Warrants exercisable within 60 days of March 26, 2024, options to purchase shares of common stock and warrants that are exercisable for common stock in each case, that are exercisable within 60 days of February 1, 2017,March 26, 2024, and restricted stock units ("RSUs") that will be vested within 60 days of March 26, 2024, are deemed to be beneficially owned by the persons holding these warrants, options or warrantsand RSUs for the purpose of computing percentage ownership of that person, but are not treated as outstanding for the purpose of computing any other person's ownership percentage.
Table(2)Based upon the Company's records of Contents
(5)
(7)
(8)
(9)
Table of Contents(7)
(11)
(15)
(16)
•align our executive officers' incentives with our corporate strategies, business goals and the long-term interests of our stockholders; and
•increase the incentive to achieve key strategic performance goals by linking incentive award opportunities to the achievement of performance goals and by providing a portion of the target total direct compensation opportunity for our executive officers in the form of ownership in the Company.
Management Changes
Consideration of 2016 Advisory Vote on Executive
| | Shares beneficially owned | ||||||
|---|---|---|---|---|---|---|---|
Name and address of beneficial owner(1) | Number | Percent | |||||
5% Stockholders | |||||||
Alta Partners VIII, L.P.(2) | 1,781,204 | 7.9 | % | ||||
Aisling Capital II, L.P.(3) | 1,708,362 | 7.6 | % | ||||
Entities affiliated with Domain Partners VII, L.P.(4) | 2,344,894 | 10.4 | % | ||||
Pentwater Capital Management LP(5) | 1,828,000 | 8.1 | % | ||||
BlackRock Fund Advisors(6) | 1,237,381 | 5.5 | % | ||||
Named Executive Officers | |||||||
Tim M. Mayleben(7) | 596,222 | 2.6 | % | ||||
Roger S. Newton, Ph.D., FAHA, FACN(8) | 850,725 | 3.7 | % | ||||
Narendra D. Lalwani, Ph.D., FAHA, DABT(9) | 228,125 | 1.0 | % | ||||
Mary P. McGowan, M.D.(10) | 101,249 | * | |||||
Other Directors | |||||||
Scott Braunstein, M.D.(11) | 11,718 | * | |||||
Dov A. Goldstein, M.D.(12) | 1,742,833 | 7.7 | % | ||||
Antonio M. Gotto, Jr. M.D., D.Phil.(13) | 33,000 | * | |||||
Daniel Janney(14) | 1,815,675 | 8.0 | % | ||||
Gilbert S. Omenn, M.D., Ph.D.(15) | 36,333 | * | |||||
Mark E. McGovern, M.D.(16) | 38,000 | * | |||||
Nicole Vitullo(17) | 2,357,894 | 10.4 | % | ||||
All directors and executive officers as a group (11 persons) | 7,811,774 | 32.5 | % | ||||
| Shares beneficially owned | ||||||||||||||||||||
Name and address of beneficial owner (1) | Number | Percent | ||||||||||||||||||
| 5% Stockholders | ||||||||||||||||||||
Armistice Capital Master Fund Ltd (2) | 20,000,000 | 9.6 | % | |||||||||||||||||
Wasatch Advisors, Inc. (3) | 15,163,886 | 7.7 | % | |||||||||||||||||
| Named Executive Officers | ||||||||||||||||||||
Sheldon Koenig (4) | 854,662 | * | % | |||||||||||||||||
JoAnne Foody (5) | 359,924 | * | % | |||||||||||||||||
Eric Warren (6) | 145,251 | * | % | |||||||||||||||||
| Other Directors | ||||||||||||||||||||
Nicole Vitullo (7) | 123,018 | * | % | |||||||||||||||||
Antonio M. Gotto, Jr. M.D., D.Phil. (8) | 114,699 | * | % | |||||||||||||||||
Jay P. Shepard (9) | 88,299 | * | % | |||||||||||||||||
J. Martin Carroll (10) | 75,983 | * | % | |||||||||||||||||
Tracy M. Woody (11) | 74,566 | * | % | |||||||||||||||||
Alan Fuhrman (12) | 71,404 | * | % | |||||||||||||||||
Seth H.Z. Fischer (13) | 64,377 | * | % | |||||||||||||||||
Stephen Rocamboli (14) | 49,183 | * | % | |||||||||||||||||
All directors and executive officers as a group (13 persons) (15) | 2,252,691 | 1.0 | % | |||||||||||||||||
- *
- Represents beneficial ownership of less than one percent.
(1)Unless otherwise indicated, the address for each beneficial owner is c/o Esperion Therapeutics, Inc., 3891 Ranchero Drive, Suite 150, Ann Arbor, MI 48108.
(2)The address for Alta Partners VIII, L.P.warrants to purchase stock, Armistice Capital Master Fund Ltd isOne Embarcadero Center, 37th Floor, San Francisco, CA 94111. Consists of (a) 1,709,967 shares of common stock and (b) 71,237 shares of common stock issuable upon exercise of warrants. These shares are held of record by Alta Partners VIII, L.P. Alta Partners Management VIII, LLC is the general partner of Alta Partners VIII, L.P. Guy Nohra, Daniel Janney and Farah Champsi are managing directors of Alta Partners Management VIII, LLC and exercise shared voting and investment powers with respect to the shares owned by Alta Partners VIII, L.P. Each of the reporting persons disclaims beneficial ownership of such shares, except to the extent of their proportionate pecuniary interest therein, if any. Mr. Janney is a member of our board of directors.(3)The address for Aisling Capital II, L.P. is 888 7th Avenue, 30th Floor, New York, New York 10106. Consists of (a) 1,637,125 shares of common stock and (b) 71,237 shares of common stock issuable upon exercise of warrants. These shares are directly held by Aisling Capital II, LP, or Aisling, and aredeemed tobe beneficially owned by Aisling Capital Partners, LP, or Aisling GP, as general partner of Aisling, Aisling Capital Partners, LLC, or Aisling Partners, as general partner of Aisling GP, and each of the individual managing members of Aisling Partners. In addition, Dov A. Goldstein, M.D. and five other persons on the investment committee of Aisling sharehave the power to vote or direct the vote and the power to disposeof these shares and therefore each member may be deemedor tohave voting and investment powerdirect the disposition with respect tosuch shares. Each of the members disclaims beneficial ownership of such shares exceptwarrants tothe extent of their pecuniary interest therein, if any. Dr. Goldstein is a member of our board of directors.(4)The address for Domain Partners VII, L.P. is One Palmer Square, Suite 515, Princeton, New Jersey 08542. Consists of (a) 21,471purchase 20,000,000 shares ofrestrictedcommon stock,issued under the 2008 Plan upon exercise of an early exercise stock option originally issued to Nicole Vitullo and subsequently transferred to Domain Associates, L.L.C., all of which are fully vestedexercisable currently or within 60 days ofFebruary 1, 2017, (b) 2,216,935 shares of common stock held by Domain Partners VII, L.P., (c) 35,253 shares of common stock held by DP VII Associates, L.P., (d) 70,042 shares of common stock issuable upon exercise of warrants held by Domain Partners VII, L.P. and (e) 1,193 shares of common stock issuable upon exercise of warrants held by DP VII Associates, L.P. James C. Blair, Brian H. Dovey, Jesse I. Treu, Brian K. Halak and Nicole Vitullo are the managing members of One Palmer Square Associates VII, L.L.C., the general partner of Domain Partners VII, L.P. and DP VII Associates, L.P., and are managing members of Domain Associates, L.L.C., and share the power to vote or dispose of these shares and therefore each of the foregoing managing members may be deemed to have voting and investment power with respect to such shares. Each of the foregoing managing members disclaims beneficial ownership of such shares except to the extent ofMarch 26, 2024. Armistice Capital Master Fund Ltd has theirpecuniary interest therein, if any. Ms. Vitullo is a member of our board of directors.principal business office at c/o Armistice Capital, LLC, 510 Madison Avenue, 7th Floor, New York, NY 10022.
(3)Based upon information set forth on Schedule 13G13F filed by Pentwater Capital Management LPWasatch Advisors Inc. ("Wasatch") with the SEC on or about February 9, 2024, the Schedule 13F-HR filed by Wasatch with the SEC on or about February 14, 2017.
(6)2024, and the Company's records of common stock held and warrants to purchase stock. Based uponon information set forth oncontained in the Schedule 13G filed by Blackrock, Inc.13F and the
31
Company's records, Wasatch is deemed to have the sole power to vote or direct the vote with respect to 15,163,886 Common Shares and is deemed to have the SEC onsole power to dispose or about January 30, 2017.to direct the disposition with respect to 15,163,886 Common Shares, composed of (a) 8,891,103 shares of common stock and (b) warrants to purchase 6,272,783 shares of common stock, exercisable currently or within 60 days of March 26, 2024. Wasatch has its principal business office at 505 Wakara Way, Salt Lake City, UT 84108.
(4)Consists of (a) 41,614164,189 shares of common stock held and (b) 554,608690,473 shares of common stock which Mr. MaylebenKoenig has the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days of February 1, 2017.March 26, 2024.
(5)Consists of (a) 629,68368,050 shares of common stock held, (b) 34,651 shares of common stock issuable upon exercise of warrants and (c) 186,391287,966 shares of common stock which Dr. NewtonMs. Foody has the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days of February 1, 2017.March 26, 2024, and (c) 3,908 restricted stock units vesting within 60 days of March 26, 2024.
(6)Consists of (a) 5,00040,063 shares of common stock andheld, (b) 223,125104,120 shares of common stock that Dr. Lalwaniwhich Mr. Warren has the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days of February 1, 2017.March 26, 2024, and (b) 1,068 restricted stock units vesting within 60 days of March 26, 2024.
(10)- Consists of (a)
5,62431,768 shares of common stock held by Ms. Vitullo and (b)95,62586,100 shares of common stockthat Dr. McGowanwhich Ms. Vitullo has the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days ofFebruary 1, 2017.March 26, 2024, and (c) 5,150 restricted stock units vesting within 60 days of March 26, 2024.
(8)Consists of (a) 5223,449 shares of common stock andheld, (b) 11,666 shares of common stock which Dr. Braunstein has the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days of February 1, 2017.
(12)Dr. Goldstein is on the investment committee of Aisling, which holds an aggregate of 1,708,362 shares of our common stock as disclosed in footnote 3 to this table, including common stock issuable upon the exercise of warrants exercisable within 60 days of February 1, 2017. Dr. Goldstein disclaims beneficial ownership of the shares held by Aisling, except to the extent of his pecuniary interest therein. Includes 34,471 shares of common stock which Dr. Goldstein has the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days of February 1, 2017.
(13)Consists of 33,00086,100 shares of common stock which Dr. Gotto has the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days of February 1, 2017.
(14)Mr. Janney is a managing director of Alta Partners Management VIII, LLC, which is the general partner of Alta Partners VIII, L.P., which holds an aggregate of 1,781,204 shares of our commonMarch 26, 2024, and (c) 5,150 restricted stock as disclosed in footnote 2 to this table, including common stock issuable upon the exercise of warrants exercisableunits vesting within 60 days of February 1, 2017. Mr. Janney has a passive economic interest in the general partnerMarch 26, 2024.
(9)Consists of Alta Partners VIII, L.P. Mr. Janney disclaims beneficial ownership(a) 23,449 shares of the sharescommon stock held by Alta Partners VIII, L.P., except to the extent of his pecuniary interest therein. Includes 34,471and (b) 59,700 shares of common stock which Mr. JanneyShepard has the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days of February 1, 2017.March 26, 2024, and (c) 5,150 restricted stock units vesting within 60 days of March 26, 2024.
(10)Consists of (a) 10,00036,500 shares of common stock held, and (b) 26,33334,333 shares of common stock which Dr. OmennMr. Carroll has the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days of February 1, 2017.March 26, 2024, and (c) 5,150 restricted stock units vesting within 60 days of March 26, 2024.
(11)Consists of (a) 5,00028,416 shares of common stock held and (b) 33,00041,000 shares of common stock which Dr. McGovernMs. Woody has the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days of February 1, 2017.
(17)Ms. Vitullo is a managing member of One Palmer Square Associates VII, L.L.C., the general partner of Domain Partners VII, L.P.March 26, 2024, and DP VII Associates, L.P., and is a managing member of Domain Associates, L.L.C., which hold an aggregate of 2,344,894 shares of our common(c) 5,150 restricted stock as disclosed in footnote 4 to this table, including common stock issuable upon the exercise of warrants exercisableunits vesting within 60 days of February 1, 2017. Ms. Vitullo disclaims beneficial ownershipMarch 26, 2024.
(12)Consists of the(a) 25,254 shares of common stock held, by Domain Partners VII, L.P., DP VII Associates, L.P. and Domain Associates, L.L.C., except to the extent of her pecuniary interest therein. Includes 13,000b) 41,000 shares of common stock which Ms. VitulloMr. Fuhrman has the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days of February 1, 2017.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a)March 26, 2024, and (c) 5,150 restricted stock units vesting within 60 days of the Exchange Act requires our directors and executive officers and persons who own more than 10%March 26, 2024.
(13)Consists of our(a) 59,227 shares of common stock which Mr. Fischer has the right to file withacquire upon the SEC initial reportsexercise of beneficial ownershipoutstanding options, exercisable currently or within 60 days of March 26, 2024, and reports(b) 5,150 restricted stock units vesting within 60 days of changes in beneficial ownership. Officers, directorsMarch 26, 2024.
(14)Consists of (a) 8,111 shares of common stock held, (b) 35,922 shares of common stock which Mr. Rocamboli has the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days of March 26, 2024, and greater than 10% stockholders are required(c) 5,150 restricted stock units vesting within 60 days of March 26, 2024.
(15)See notes (5) through (15) above; also includes 63,787 shares held by SEC regulationsBenjamin Halladay, the Company's Chief Financial Officer, consisting of (a) 33,356 shares of common stock held, (b) 30,373 options to furnish us with copiespurchase shares of all such reports.
Based solely on a reviewcommon stock which Mr. Halladay has the right to acquire upon the exercise of reports furnishedoutstanding options, exercisable currently or within 60 days of March 26, 2024, and (c) 58 restricted stock units vesting within 60 days of March 26, 2024; also includes 167,538 shares held by Benjamin Looker, the Company's Legal Counsel, consisting of (a) 32,887 shares of common stock held, (b) 130,226 option to us, all directors, executive officers,purchase shares of common stock which Mr. Looker has the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days of March 26, 2024, and 10% owners timely filed all reports regarding transactions in Esperion's securities required to be filed for 2016 by Section 16(a) under the Exchange Act.
EXECUTIVE OFFICER AND DIRECTOR COMPENSATION
Compensation Discussion and Analysis
Our primary objective with respect to executive compensation is to attract and retain individuals who possess knowledge, experience and skills that we believe are important to our business of developing and commercializing oral therapies for the treatment of patients with elevated low-density lipoprotein cholesterol ("LDL-C"). Specifically, our executive compensation program is designed to:
•attract and retain individuals with superior ability and managerial experience;
This section discusses the principles underlying our policies and decisions with respect to the compensation of our executive officers who are named in the Summary Compensation Table below, or our "named executive officers," and all material factors relevant to an analysis of these policies and decisions.
Our named executive officers for 2016 were:
- the year ended December 31, 2023, whom we refer to collectively as our “named executive officers” or “NEOs” are as follows:
•Tim M. Mayleben, Sheldon L. Koenig, our President and Chief Executive OfficerOfficer;
•Roger S. Newton, Ph.D., FAHA, FACN, our former Executive Chairman and Chief Scientific Officer
•Narendra D. Lalwani, Ph.D., FAHA, DABT, our Executive Vice President, Research and Development, and Chief Operating Officer
•Mary P. McGowan, M.D., JoAnne Foody, our Chief Medical Officer
Officer; and
On December 8, 2016, we entered into a Scientific Advisor Agreement with Dr. Newton, pursuant to which, effective December 8, 2016, he retired from his role as
• Eric Warren, our Executive Chairman and Chief Scientific Officer and transitioned into the role of Scientific Advisor. Dr. Newton ceased to be an executive officer of Esperion on such date but remains a member of the Board. For a description of the material terms of the Scientific Advisor Agreement with Dr. Newton, see "Employment Agreements" below.
Commercial Officer.
2023 Summary Compensation
At our 2016 Annual Meeting of Stockholders, we conducted our first annual non-binding advisory vote on the compensation of our named executive officers, commonly referred to as a "say-on-pay" vote, in accordance with Section 14A of the Securities Exchange Act of 1934. Table
The 2016 say-on-pay vote received strong support from stockholders, garnering an affirmative vote of over 90%. That is, over 90% of the votes cast by stockholders on this proposal were cast in support offollowing table provides information regarding the compensation paid and awarded to our named executive officers. While this vote is considered to be a non-binding advisory vote, our compensation committee and Board of Directors carefully consider the voting results. Given the strong level of support evidencedor earned by the 2016 say-on-pay vote, our compensation committee decided to maintain our general approach to executive compensation and made no significant changes to our executive compensation program. However, the compensation committee will continue to monitor the executive compensation program to ensure it aligns the interests of our named executive officers with
(3)Amounts
(4)
(5)Consists of (1) $12,000 in
(6)Dr. Newton resigned as our Executive Chairman and Chief Scientific Officer effective December 8, 2016.
(9)Dr. Lalwani joined the company as
Grants of Plan-Based Awards
Dr. Newton
the interests of our stockholders and adequately addresses any stockholder concerns that may be expressed in future votes.
Our stockholders will have an opportunity annually to cast an advisory vote on the compensation for our named executive officers. Consistent with the recommendation of our Board and the preference of our stockholders as reflected in the non-binding advisory vote on the frequency of future "say-on-pay" votes conducted at our 2016 Annual Meeting of Stockholders, we intend to provide for annual advisory votes on the compensation of our named executive officers.
Executive Summary
We are the lipid management company, a late-stage pharmaceutical company focused on developing and commercializing convenient, complementary, cost-effective, once-daily, oral therapies for the treatment of patients with elevated LDL-C. Through scientific and clinical excellence, and a deep understanding of cholesterol biology, the experienced lipid management team at Esperion is committed to developing new LDL-C lowering therapies that will make a substantial impact on reducing global cardiovascular disease; the leading cause of death around the world. With a targeted mechanism of action, bempedoic acid, our lead product candidate, is a first-in-class ACL inhibitor that reduces cholesterol biosynthesis and lowers elevated levels of LDL-C by up-regulating the LDL receptor, but with reduced potential for muscle-related side effects. In addition to bempedoic acid as monotherapy, we are also developing bempedoic acid in a fixed dose combination with ezetimibe, an approved, non-statin, oral, LDL-C lowering therapy.
The goal of our compensation committee is to ensure that our executive compensation program is aligned with the interests of our stockholders and our business goals and that the total compensation paid to each of our named executive officers is fair, reasonable and competitive. The key elements of our executive compensation program include:
•base salary, to enable us to attract and retain the talent needed to continue to drive our business;•an annual cash incentive plan, tied to the achievement of pre-determined quantitative and qualitative corporate performance goals; and•long-term incentive compensation in the form of equity awards, which is typically subject to multi-year vesting based on continued service and is primarily in the form of stock options, the value of which depends on the market price of our common stock.
Our executive compensation program incorporates the following best practices:
•a significant portion of our named executive officers' total compensation opportunity is based on performance;•no named executive officer is entitled to "single-trigger" cash severance payments;•no named executive officer is entitled to receive any tax "gross-up" payments or reimbursements;•we do not allow repricing of stock options without stockholder approval;•our compensation committee retains independent compensation consultants to assist it in discharging its responsibilities on executive compensation; and•our compensation committee regularly reviews our compensation programs to ensure they are designed to create and maintain stockholder value and do not encourage excessive risk taking.
We target the total cash compensation for our named executive officers with reference to the median of the competitive market. In addition, in accordance with our "pay-for-performance"
philosophy, a significant portion of executive compensation is performance-based, subject to increase when results exceed corporate goals and reduction when results fall below our target goal levels. We consider stock options to be performance-based compensation because they only have intrinsic value if the market price of our common stock increases over time.
2016 Business Highlights
During 2016, we made significant progress on our development and business goals and achieved several important milestones, including the following:
•we held discussions with the Food and Drug Administration (the "FDA") and European Medicines Agency (the "EMA") regarding the Phase 3 LDL-C lowering program and design of the planned cardiovascular outcomes trial;•we initiated the Phase 3 efficacy and long-term safety studies;•we initiated the cardiovascular outcomes trial;•we completed and reported positive top-line results from our Phase 2 1002-035 and Phase 1 1002-037 studies;•we initiated and completed the fixed dose combination bioequivalence study; and•we published the definitive paper on the mechanism of action of bempedoic acid in the journalNature Communications.
Determining and Setting Executive Compensation
Our executive compensation program is designed to attract, motivate and retain qualified and talented executives, incent them to achieve our business and development goals and reward them for superior short-term and long-term performance. In particular, our executive compensation program is intended to reward the achievement of specified pre-established quantitative and qualitative corporate performance goals and individual performance goals and to align the interests of our named executive officers with those of our stockholders.
Our compensation committee, which is comprised entirely of independent directors, is primarily responsible for developing and implementing our compensation policies and establishing and approving the compensation for our executive officers. The compensation committee oversees our compensation and benefit plans and policies, administers our equity incentive plans and reviews and approves annually all compensation decisions relating to our executive officers, including our Chief Executive Officer. Our compensation committee operates under a written charter adopted by our Board, which provides that the compensation committee has overall responsibility for:
•periodically reviewing and assessing our processes and procedures for the consideration and determination of executive compensation;•reviewing and approving grants and awards under incentive-based compensation plans and equity-based plans; and•determining the type and level of compensation of our Chief Executive Officer and our other executive officers.
In reviewing and approving these matters, our compensation committee considers such matters as it deems appropriate, including our financial and operating performance, the alignment of the interests of our executive officers and our stockholders and our ability to attract and retain qualified and committed individuals. In determining the appropriate compensation levels for our Chief Executive Officer, the compensation committee meets outside the presence of our Chief Executive Officer and
other executive officers. With respect to the compensation levels of our other executive officers, the compensation committee meets outside the presence of all executive officers except our Chief Executive Officer. Our Chief Executive Officer annually reviews the performance of each of the other named executive officers with the compensation committee.
Our compensation committee has the authority under its charter to engage the services of a consulting firm or other outside advisor to assist it in designing our compensation programs and in making compensation decisions. In 2016, our compensation committee engaged Compensia as its compensation consultant. Our compensation committee has assessed the independence of Compensia consistent with NASDAQ listing standards and has concluded that the engagement of Compensia does not raise any conflict of interest. In addition, the Company provides data for and subscribes to "off-the-shelf" surveys produced by Radford, an Aon Hewitt Company, which our management team uses for non-executive compensation and benefits planning purposes.
Competitive Market Data
In evaluating the total compensation of our named executive officers, our compensation committee, using information gathered by Compensia, establishes a peer group of publicly traded, national and regional companies in the biopharmaceutical and biotechnology industries that is selected based on a balance of the following criteria:
•industry;•size (market capitalization);•development stage of lead product candidate; and•similarity/relevance (small molecule, therapeutic area, etc.).
Our compensation committee annually evaluates the composition of our peer group and adjusts the composition of our peer group for factors such as recent acquisitions of peer companies, new markets that we have entered or changes in the technology market landscape. Based on these criteria, our peer group for 2016, referred to as our 2016 peer group, was approved by our compensation committee and was comprised of the companies listed below. We believe that our 2016 peer group continues to be aligned with our strategic vision and positions us to attract, retain and engage high performing leaders:
•Achillion Pharmaceuticals Inc.•Alder BioPharmaceuticals, Inc.•Array BioPharma, Inc.•bluebird bio, Inc.•Chimerix, Inc.•Clovis Oncology, Inc.•Intra-Cellular Therapies, Inc.•Karyopharm Therapeutics, Inc.•Kite Pharma, Inc.•Lexicon Pharmaceuticals, Inc.•NewLink Genetics Corporation•Portola Pharmaceuticals, Inc.
•Puma Biotechnology, Inc.•Radius Health, Inc.•Sage Therapeutics, Inc.•Synergy Pharmaceuticals, Inc.•Zafgen, Inc.
We believe that the compensation practices of our 2016 peer group provided the compensation committee with an appropriate understanding of the competitive market when evaluating and determining the compensation of our named executive officers during 2016. However, due to the nature of our business, we compete for executive talent with many public companies, including pharmaceutical companies, that are larger and more established than we are or that possess greater resources than we do, or with smaller private companies that may be able to offer greater equity compensation potential, as well as with prestigious academic and non-profit institutions. In addition, the assessment of our compensation practices against the competitive market (based on the peer group data) is just one of several factors that inform our compensation committee's judgment in setting executive compensation. Our executive compensation decisions are made on a case-by-case basis and comparability to specific percentile rankings do not, in and of themselves, determine individual target compensation opportunities. Accordingly, in 2016, our compensation committee generally targeted compensation for our executive officers as follows:
•base salaries between approximately the 50thto 75thpercentile of the base salaries of the companies in our 2016 peer group;•annual cash incentive award opportunities between approximately the 50thto 75thpercentile of the companies in our 2016 peer group;•total annual long-term incentive awards, provided in the form of stock options and restricted stock unit awards, at the 50thpercentile of the companies in our 2016 peer group; and•target total direct compensation at the 50thpercentile of compensation paid to similarly situated executives at the companies in our 2016 peer group.
Although, our compensation committee uses the target guidelines set forth above, it also considers other factors, including market conditions, the recommendation of our Chief Executive Officer with respect to executive officers (other than himself), the experience level of the named executive officer and his or her performance against established corporate goals, in determining actual compensation amounts irrespective of whether such amounts fall within the target ranges.
Other Key Performance Factors in Determining Executive Compensation
As the biopharmaceutical industry is characterized by very long product development cycles, including lengthy research and development periods and rigorous approval phases involving human testing and governmental regulatory approval, many of the traditional measures for evaluating performance, such as product sales, revenues and profits are inappropriate for a development-stage biopharmaceutical company, such as Esperion. Instead, the specific performance factors our compensation committee considers when determining the compensation of our named executive officers include:
•research and development achievements which advance the development of bempedoic acid;•successful initiation, progression and completion of clinical studies for bempedoic acid;•successful completion of non-clinical activities for bempedoic acid;
•the achievement of regulatory goals; and•the establishment and maintenance of key business activities and strategic relationships, which include financings.
These performance factors are considered by our compensation committee in connection with our annual performance reviews described below and are a critical component in the determination of annual cash and equity incentive awards for our named executive officers.
Annual Compensation Decisions
Our compensation committee conducts an annual performance review of each of our named executive officers and approves the target compensation opportunity of each named executive officer based, in part, on this review. During the first quarter of each year, annual corporate goals are determined by the Board and set forth in writing. Before the end of each year, our compensation committee determines cash incentive compensation award amounts for such year as well as the compensation levels for each named executive officer for the following year after carefully reviewing overall corporate goals, determining achievement of the established corporate goals and, in the case of executive officers other than our Chief Executive Officer, the achievement of individual performance goals.
Any merit-based increases in base salary and the size of annual stock option grants are based on the achievement of these corporate performance goals and individual performance goals, a review of competitive market data (based on our compensation peer group), and consideration of the other factors described above. Cash awards made under our 2016 annual cash incentive compensation program are based upon achievement of the corporate goals approved by the Board and, for named executive officers other than our Chief Executive Officer, individual performance.
During the last quarter of each year, our Chief Executive Officer evaluates our corporate performance and each named executive officer's individual performance (other than his own), as compared to the pre-established corporate goals and the named executive officer's individual goals for that year. Based on this evaluation, our Chief Executive Officer recommends to our compensation committee any increases in base salary, annual stock option grants and/or cash awards under our annual cash incentive compensation program. Our compensation committee, with input from our Board, evaluates our Chief Executive Officer's individual performance and determines whether to adjust his base salary, grant him an annual stock option and/or make a cash award under our annual cash incentive compensation program.
Typically, our compensation committee grants annual stock options, and determines adjustments to base salary and the amount of any annual cash incentive compensation award, at its last regularly scheduled meeting of the year. Our compensation committee may also review the compensation of our named executive officers throughout the course of the year. With respect to year-end reviews, any adjustments to base salary are effective at the beginning of the following year.
Executive Compensation Components
The primary elements of our executive compensation program are base salary, annual cash incentive compensation opportunities, annual equity incentive awards and broad-based health and welfare benefits programs. We have not adopted any formal guidelines for allocating total compensation between long-term and short-term compensation, cash compensation and non-cash compensation, or among different forms of non-cash compensation. With the exception of our 2016 annual cash incentive program, we do not have any pre-established target levels for allocations or apportionment by type of compensation.
Annual Cash Compensation
Base Salary
We provide base salaries to our named executive officers to compensate them with a fair and competitive base level of compensation for services rendered during the year. Our compensation committee typically determines the base salary for each executive based on the executive's responsibilities, experience and, if applicable, the base salary level of the executive prior to joining the Company, as well as the recommendation of our Chief Executive Officer for executive officers other than himself, and the other factors described above. In addition, our compensation committee reviews and considers the level of base salary paid by companies in our peer group for similar positions.
At the end of 2015, our compensation committee reviewed Mr. Mayleben's overall compensation and, based on his accomplishments during the year and his base salary relative to the base salaries of chief executive officers in our peer group, determined to increase his annual base salary for 2016 by $55,000 to better align to market.
At the end of 2015, our compensation committee approved merit-based increases in base salary for our other named executive officers serving at that time for 2016, based upon an assessment of our performance against the 2015 corporate goals, the recommendation of our Chief Executive Officer and each named executive officer's achievement of his or her individual performance goals.
The table below sets forth the adjustments to base salary, in dollars and as a percentage, for our named executive officers for 2016:
Name | 2015 Base Salary ($) | 2016 Base Salary ($) | Increase (%) | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
Tim M. Mayleben | 480,000 | 535,000 | 11 | |||||||
Roger S. Newton, Ph.D., FAHA, FACN | 375,000 | 375,000 | — | |||||||
Narendra D. Lalwani, Ph.D., FAHA, DABT | 370,000 | 390,000 | 5 | |||||||
Mary P. McGowan, M.D. | 375,000 | 395,000 | 5 | |||||||
The base salaries for our named executive officers serving as executive officers for 2017 remain unchanged from their 2016 base salaries.
Annual Cash Incentive Compensation
In 2016, eligible employees, including our named executive officers, had the opportunity to earn cash bonuses under our 2016 cash incentive compensation program, based on our achievementeach of the 2016 corporate goals approved by our compensation committee and, for our named executive officers other than the Chief Executive Officer, against their individual performance goals, each as determined by the compensation committee. Each of our named executive officers has a target annual cash incentive opportunity, expressed as a percentage of his or her annual base salary as set forth in his or her respective employment agreement.
In December 2016, our Chief Executive Officer evaluated our corporate performance against the 2016 corporate goals approved by our compensation committee and each other named executive officer's individual performance against the named executive officer's individual goals for that year. Based on this evaluation, our Chief Executive Officer recommended cash bonus payments under the annual cash incentive compensation program for 2016 for each named executive officer other than himself. Also in December 2016, the compensation committee assessed our performance against the pre-established 2016 corporate base and stretch goals described below and, with input from our Chief Executive Officer, assessed the performance of our named executive officers other than our Chief Executive Officer against their individual goals for 2016.
The 2016 base corporate goals approved by our compensation committee, the relative weightings assigned to each goal, and our actual achievement during the year as a percentage of the target performance level and the weighted performance against these base corporate goals for 2016, are set forth in the table below. Our compensation committee determined that we had achieved our corporate goals at 60% of target.
2016 Corporate Goals | Relative Weighting (%) | Actual Achievement for 2016 (as a % of target) | Weighted Performance (%) | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
Hold successful discussions and negotiations with the Food and Drug Administration ("FDA") and the European Medicines Agency ("EMA") on the Phase 3 development plan and cardiovascular outcomes trial ("CVOT") | 35 | 29 | 10 | |||||||
Initiate the Phase 3 efficacy and long-term safety studies | 15 | 67 | 10 | |||||||
Initiate the CVOT | 20 | 100 | 20 | |||||||
Announce positive top-line results from Phase 2 study (1002-035) and Phase 1 study (1002-037) | 20 | 50 | 10 | |||||||
Initiate and complete the fixed dose combination of bempedoic acid bioequivalence study | 10 | 100 | 10 | |||||||
Approved 2016 Corporate Performance Level | 100 | 60 | ||||||||
The Board set certain of our 2016 corporate goals to be very aggressive and set at challenging levels, such that the attainment of all of our corporate goals would require a high level of effort and execution on the part of the named executive officers. Specifically, during 2016, we made significant progress towards achieving our clinical development and business goals, including:
•we held discussions with the Food and Drug Administration (the "FDA") and European Medicines Agency (the "EMA") regarding the Phase 3 LDL-C lowering program and design of the planned cardiovascular outcomes trial;•we initiated the Phase 3 efficacy and long-term safety studies;•we initiated the cardiovascular outcomes trial;•we completed and reported positive top-line results from our Phase 2 1002-035 and Phase 1 1002-037 studies;•we initiated and completed the fixed dose combination bioequivalence study.
In addition to the corporate goals described above, bonuses for Drs. Lalwani and McGowan were based on their individual performance for 2016, with a focus on individual contributions that were intended to drive achievement of our corporate goals.
Based on our overall performance in 2016 and the individual performance of our named executive officers other than our Chief Executive Officer, in December 2016, the compensation committee approved cash bonuses for 2016 performance to our named executive officers as follows:
Name | 2016 Target Award (% of Base Salary) | 2016 Target Award Opportunity ($) | 2016 Actual Bonus Payment ($) | 2016 Actual Bonus Payment (% of Target Award Opportunity) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Tim M. Mayleben | 55 | 294,250 | 176,000 | 60 | |||||||||
Roger S. Newton, Ph.D., FAHA, FACN | — | — | — | — | |||||||||
Narendra D. Lalwani, Ph.D., FAHA, DABT | 40 | 156,000 | 85,000 | 54 | |||||||||
Mary P. McGowan, M.D. | 35 | 138,250 | 75,000 | 54 | |||||||||
Long-Term Incentive Compensation
Long-term incentive compensation, in the form of equity awards, are granted to our named executive officers in the discretion of our compensation committee under the terms of the 2013 Plan. Our compensation committee believes that equity awards that may be earned over time can be an effective vehicle for aligning team and individual performance with the achievement of our longer-term strategic and financial goals, and with stockholders' interests. These equity awards are designed to:
•reward demonstrated leadership and performance;•align our named executive officers' interests with those of our stockholders;•retain our named executive officers through the term of the awards;•maintain competitive levels of executive equity incentive compensation; and•motivate our named executive officers for outstanding future performance.
The market for qualified and talented executives in the biopharmaceutical industry is highly competitive and we compete for talent with many companies, including major pharmaceutical companies, that have greater resources than we do. Accordingly, we believe long-term incentive compensation in the form of equity awards is a crucial component of any competitive executive compensation package we offer.
Historically, our equity awards have generally been in the form of stock options. We typically grant stock options to each of our named executive officers upon commencement of employment, annually in conjunction with our review of individual performance or in connection with a promotion or as a special incentive. We may also grant additional awards from time to time to our named executed officers to reward demonstrated leadership and performance, align our named executive officers' interests with those of our stockholders, retain our named executive officers through the term of the awards, maintain competitive levels of executive equity incentive compensation, and motivate our named executive officers for outstanding future performance.
All stock options granted to our named executive officers are approved by our compensation committee and, other than stock options granted to new hires, or those made in connection with a promotion, are typically granted as of the beginning of the year. The size of these stock option grants vary among our named executive officers based on their positions and annual performance assessments. All stock options granted to our named executive officers have exercise prices equal to the fair market value of our common stock on the date of grant, so that the recipient will not realize any value from his or her options unless our share price increases above the exercise price. Accordingly, this portion of
our named executive officers' compensation is "at risk" and is directly aligned with stockholder value creation.
In addition, the stock options granted to our named executive officers typically vest over four years, which we believe provides an incentive to our named executive officers to create value over the long-term and to remain with Esperion. In 2016, the compensation committee made stock option grants to Mr. Mayleben and Drs. Lalwani and McGowan, each of which are described below. Dr. Newton was not granted any equity awards in 2016.
In January 2016, the compensation committee granted Mr. Mayleben an option to purchase 30,000 shares of our common stock, Dr. Lalwani an option to purchase 15,000 shares of our common stock, and Dr. McGowan an option to purchase 15,000 shares of our common stock. Each of these options are subject to our standard four-year vesting schedule.
For additional information regarding the equity awards granted to our named executive officers in 2016, including the vesting terms of such awards, see the "Outstanding Equity Awards at Fiscal Year-End—2016" table below.
Employee Benefits
In addition to the primary elements of compensation described above, the named executive officers also participate in broad-based employee benefits programs available to all of our employees, including health insurance, life and disability insurance, dental insurance and our 401(k) plan. We match 50% of the first 12% of salary contributed to Esperion Therapeutics' 401(k) plan by employees, including named executive officers.
Severance and Change in Control Arrangements
We have entered into employment agreements with each of our named executive officers that provide for specified payments and benefits in connection with a termination of employment by the Company without cause or a resignation by the executive officer for good reason. Our goal in providing severance and change in control payments and benefits is to offer sufficient cash continuity protection such that our named executive officers will focus their full time and attention on the requirements of the business rather than the potential implications for their respective positions. We prefer to have certainty regarding the potential severance amounts payable to the named executive officers, rather than negotiating severance at the time that a named executive officer's employment terminates. We have also determined that accelerated vesting provisions with respect to equity awards in connection with a qualifying termination of employment in connection with a change in control are appropriate because they encourage our named executive officers, to stay focused on the business in those circumstances, rather than focusing on the potential implications for them personally. In addition, these employment agreements with our named executive officers contain non-solicitation, non-competition and confidentiality provisions. None of the employment agreements with our named executive officers provide for tax gross-ups or other reimbursement for tax amounts they might pay.
For a description of severance and change in control arrangements with our named executive officers, see "Employment Agreements" and "Potential Payments upon Termination or Change in Control" below.
Other Compensation Policies
Hedging and Pledging Prohibitions
Our insider trading policy expressly prohibits short sales and derivative transactions of our stock by our named executive officers, directors and specified other employees, including short sales of our securities, including short sales "against the box." Our insider trading policy expressly prohibits, without
the advance approval of our audit committee, purchases or sales of puts, calls or other derivative securities of the company or any derivative securities that provide the economic equivalent of or monetization transactions accomplished through the use of prepaid variable forwards, equity swaps, collars and exchange funds.
In addition, our insider trading policy expressly prohibits our named executive officers, directors and specified other employees from purchasing our securities on margin or borrowing against company securities held in a margin account, or, without the advance approval of our audit committee, pledging our securities as collateral for a loan or modifying an existing pledge.
Tax Considerations
We have not provided any of our executive officers or directors with a gross-up or other reimbursement for tax amounts they might pay pursuant to Section 4999 or Section 409A of the Code. Sections 280G and 4999 of the Code provide that executive officers, directors who hold significant stockholder interests and certain other service providers could be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of our Company that exceed certain limits, and that we or our successor could lose a deduction on the amounts subject to the additional tax.
Section 162(m) of the Code imposes a $1 million cap on the federal income tax deduction for compensation paid to our Chief Executive Officer and to certain other highly compensated officers during any fiscal year unless the compensation is "performance-based" under Section 162(m). Qualified performance-based compensation is not subject to the deduction limitation if specified requirements are met. We periodically review the potential effects of Section 162(m) and consider whether to structure the performance-based portion of our executive compensation to comply with exemptions in Section 162(m).
Summary Compensation Table—2016
The following tables provide information regarding the compensation awarded to or earned during our fiscal years set forth below by our named executive officers.
below.
Name and principal position | Year | Salary ($) | Bonus ($)(1) | Stock awards ($)(2) | Option awards ($)(3) | Non-equity incentive plan compensation ($)(4) | All other compensation ($) | Total ($) | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Tim M. Mayleben, | 2016 | 535,000 | — | — | 417,468 | 176,000 | 85,436 | (5) | 1,213,904 | ||||||||||||||||
President and Chief Executive | 2015 | 480,000 | 228,000 | — | 5,008,892 | — | 34,405 | 5,751,297 | |||||||||||||||||
Officer | 2014 | 450,000 | — | — | — | 300,000 | — | 750,000 | |||||||||||||||||
Roger S. Newton, Ph.D., FAHA, | 2016 | 348,580 | (6) | — | — | — | — | 10,000 | (7) | 358,580 | |||||||||||||||
Executive Chairman and Chief | 2015 | 375,000 | — | — | 1,008,890 | — | — | 1,383,890 | |||||||||||||||||
Scientific Officer | 2014 | 375,000 | — | — | — | 50,000 | — | 425,000 | |||||||||||||||||
Narendra D. Lalwani, Ph.D., FAHA, DABT | 2016 | 390,000 | — | — | 208,734 | 85,000 | 12,000 | (8) | 695,734 | ||||||||||||||||
Executive Vice President, Research | 2015 | 370,000 | 127,000 | — | 2,722,224 | — | 12,000 | 3,231,224 | |||||||||||||||||
and Development and Chief | 2014 | 150,000 | (9) | — | — | 2,842,054 | 70,000 | 146,750 | 3,208,804 | ||||||||||||||||
Operating Officer | |||||||||||||||||||||||||
Mary P. McGowan, M.D. | 2016 | 395,000 | — | — | 208,734 | 75,000 | 11,356 | (8) | 690,090 | ||||||||||||||||
Chief Medical Officer | 2015 | 203,125 | (10) | 61,000 | 863,100 | 7,556,420 | — | — | 8,683,645 | ||||||||||||||||
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock awards ($) (1) | Option awards ($) (2) | Non-equity incentive plan compensation ($) (3) | All other compensation ($) | Total ($) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sheldon L. Koenig | 2023 | 720,833 | — | 422,100 | 1,267,661 | 541,938 | 16,033 | (4) | 2,968,565 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| President and Chief Executive Officer | 2022 | 683,333 | — | 549,840 | 2,052,139 | 500,500 | 13,600 | 3,799,412 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| JoAnne Foody | 2023 | 528,333 | — | 115,575 | 452,295 | 306,475 | 22,063 | (5) | 1,424,741 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chief Medical Officer | 2022 | 505,000 | — | 132,720 | 627,248 | 249,975 | 16,216 | 1,531,159 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eric Warren (6) | 2023 | 462,500 | — | 89,646 | 269,200 | 241,259 | 15,100 | (7) | 1,077,705 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chief Commercial Officer | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)The amounts reported represent bonuses awarded based on overall Company performance and, for Drs. Lalwani and McGowan, on individual performance.
(2)Amounts represent the aggregate grant date fair value of restricted stock units granted to our named executive officersan RSU award computed in accordance with FASB ASC Topic 718. See Note 1113 of the notes to our financial statements in our annual reportAnnual Report on Form 10-K filed with the SEC on February 22, 2017,27, 2024 for a discussion of our assumptions in determining the grant date fair values of equity awards. These amounts do not correspond to the actual value that may be recognized by theour named executive officers.
(2)The amounts reported represent the aggregate grant date fair value of stock option awards and performance-based stock option awards granted to our named executive officers computed in accordance with FASB ASC Topic 718. See Note 1113 of the notes to our financial statements in our annual reportAnnual Report on Form 10-K filed with the SEC on February 22, 2017,27, 2024 for a discussion of our assumptions in determining the grant date fair values of equity awards. These amounts do not correspond to the actual value that may be recognized by theour named executive officers.
(3)The amounts reported represent cash incentive awards made to our named executive officers under our annual incentive program for the years indicated.program. See "Compensation Discussion and Analysis—Annual Cash Compensation—Annual Cash Incentive Compensation" above"Narrative to 2023 Summary Compensation Table" below for additional information.
(4)The amounts reported represent matching contributions to our 401(k) plan of $15,000 and (2) $73,436 in commuting allowances paid to Mr. Mayleben for expenses incurred for travel between his primary residence and our corporate headquarters.personal use of company vehicle of $1,033.
(5)The amount reflected in the Salary column for 2016 is based upon an annualized base salary of $375,000.
(7)Effective December 8, 2016, Dr. Newton resigned as our Executive Chairman and Chief Scientific Officer and transitioned into the role of Scientific Advisor. The amountamounts reported reflects amounts paid to Dr. Newton in 2016 pursuant to the scientific advisor agreement entered into between him and Esperion.
(8)Representsrepresent matching contributions to our 401(k) plan.plan of $15,000 and taxable domestic partner fringe benefits of $7,063.
(6)Mr. Warren was not a named executive officer during fiscal year 2022.
(7)The amounts reported represent matching contributions to our Executive Vice President, Research401(k) plan of $15,000 and Development, and Chief Operating Officer effective August 1, 2014. The amount reflected in the Salary column for 2014 is based upon an annualized base salarytaxable wellness benefit of $360,000.
(10)Dr. McGowan joined the company as our Chief Medical Officer effective June 15, 2015. The amount reflected in the Salary column for 2015 is based upon an annualized base salary of $375,000.
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The following table shows information regarding grants of plan-based awards during the fiscal year end December 31, 2016,
Narrative to 2023 Summary Compensation Table
Base Salary
We provide base salaries to our named executive officers. Dr. Newton was not granted any plan-based awardsofficers to compensate them with a fair and competitive base level of compensation for services rendered during the year ended December 31, 2016.
(2)The exercise price
Employee Benefits
Name and principal position | Grant date | Estimated future payouts under non-equity incentive plan awards target ($)(1) | All other stock awards: number of shares of stock or units (#) | All other option awards: number of securities underlying options (#) | Exercise or base price of option awards ($/sh)(2) | Grant date fair value of stock and option awards ($)(3) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Tim M. Mayleben | — | 294,250 | — | — | — | — | |||||||||||||
| 1/4/2016 | — | — | 30,000 | 21.65 | 417,468 | ||||||||||||||
Narendra D. Lalwani, Ph.D., FAHA, DABT | — | 156,000 | — | — | — | — | |||||||||||||
| 1/4/2016 | — | — | 15,000 | 21.65 | 208,734 | ||||||||||||||
Mary P. McGowan, M.D. | — | 138,250 | — | — | — | — | |||||||||||||
| 1/4/2016 | — | — | 15,000 | 21.65 | 208,734 | ||||||||||||||
(1)Representsyear. Typically, our compensation committee determines thetarget annual cash incentive award opportunitiesbase salary for each named executive officer based on his or her responsibilities and experience, as well as the recommendation of our CEO for named executive officers other than himself. In addition, our compensation committee reviews and considers the level of base salary paid by companies in our 2023 compensation peer group for similar positions.
The table below sets forth the adjustments to base salary, in dollars and as an approximate percentage, for each of our named executive officers serving in 2023:
| Name | 2022 Base Salary ($) | 2023 Base Salary ($) (1) | Increase (%) (2) | |||||||||||||||||||||||||||||
| Sheldon L. Koenig | 700,000 | 725,000 | 4% | |||||||||||||||||||||||||||||
| JoAnne Foody | 505,000 | 533,000 | 6% | |||||||||||||||||||||||||||||
| Eric Warren | N/A | 466,200 | —% | (3) | ||||||||||||||||||||||||||||
(1)Base salaries reflected in the above table for 2023 were effective on March 1 of each year, unless noted below.
(2)Salary increases were mainly to support retention.
(3)Mr. Warren was not a named executive officer during fiscal year 2022.
Annual Cash Incentive Compensation
In 2023, eligible employees, including our named executive officers, had the opportunity to earn cash bonuses under our 20162023 cash incentive compensation program, based upon our achievement of the 2023 corporate performance goals approved by our compensation committee. Each of our named executive officers are given a target annual cash incentive opportunity, expressed as a percentage of their annual base salary. In December 2023, our CEO evaluated our corporate performance against the 2023 corporate goals approved by our compensation committee. Based on this evaluation, our CEO recommended cash bonus payments under our 2023 cash incentive compensation program as established byfor each named executive officer other than himself. Also, in December 2023, the compensation committee assessed our performance against the pre-established 2023 corporate base described below.
The 2023 base corporate performance goals approved by our compensation committee, the relative weightings assigned to each goal, our actual achievement during the year as a percentage of the target performance level and described in "Compensation Discussion and Analysis" above. Actual payments madethe weighted performance against these corporate goals for 20162023, are providedset forth in the "Summary Compensation Table."table below.
| 2023 Corporate Base Goals | Relative Weighting (%) | Actual Achievement for 2023 (as a % of target) | Weighted Performance (%) | |||||||||||||||||||||||||||||||||||
| Execute CVOT presentation, data release, and submissions | 40 | 100 | 40 | |||||||||||||||||||||||||||||||||||
| Achieve US net sales target | 25 | 100 | 25 | |||||||||||||||||||||||||||||||||||
| Prepare for full-scale commercial launch | 10 | 100 | 10 | |||||||||||||||||||||||||||||||||||
| Optimize Market Access Environment | 10 | 100 | 10 | |||||||||||||||||||||||||||||||||||
| Manage cash used in operations to $215MM within the budgeted base operating plan | 10 | 100 | 10 | |||||||||||||||||||||||||||||||||||
| Continue to progress pipeline value | 5 | 100 | 5 | |||||||||||||||||||||||||||||||||||
| Approved 2023 Corporate Base Performance Level | 100 | 100 | ||||||||||||||||||||||||||||||||||||
In addition, the compensation committee set the following stretch corporate goals for 2023: Simultaneous publication and presentation of these stock options wastopline data from CVOT by March 31, 2023 (10%), submit filings to the European Medicines Agency (EMA) and Food and Drug Administration (FDA) for cardiovascular risk reduction in the label before July 1, 2023 (1% for every month early); and exceed US net sales target (3%).
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Our compensation committee, with input from the senior members of the management team and the board of directors, set certain of our 2023 corporate goals requiring a high level of effort and execution on the part of the named executive officers. Based on the overall performance in 2023, our compensation committee determined bythat we had achieved 100% of our base corporate performance goals as detailed in the Companytable above, and earned an additional 15% based on our stretch goals, inclusive of 10% for publication and presentation of topline CVOT data, 2% for early submission of filings to the closingEMA and FDA, and 3% for exceeding US net sales target, resulting in a payout of the portion of cash bonuses under our 2023 cash incentive compensation program based upon achievement of corporate performance goals at 115% of target to our named executive officers.
Following its determination of achievement of the pre-established corporate performance goals for our named executive officers, the compensation committee approved cash bonuses for 2023 performance to our named executive officers who were eligible to receive bonuses, as follows:
| Name | 2023 Target Award (% of Base Salary) | 2023 Target Award Opportunity ($) | 2023 Actual Bonus Payment ($) | 2023 Actual Bonus Payment (% of Target Award Opportunity) | |||||||||||||||||||||||||||||||||||||
| Sheldon L. Koenig | 65 | 471,250 | 541,938 | 115 | |||||||||||||||||||||||||||||||||||||
| JoAnne Foody | 50 | 266,500 | 306,475 | 115 | |||||||||||||||||||||||||||||||||||||
| Eric Warren | 45 | 209,790 | 241,259 | 115 | |||||||||||||||||||||||||||||||||||||
Long-Term Incentive Compensation
Long-term incentive compensation, in the form of equity awards, is granted to our named executive officers in the discretion of our compensation committee. Our compensation committee believes that equity awards that are subject to vesting over time can be an effective vehicle for aligning team and individual performance with the achievement of our longer-term strategic and financial goals, and with our stockholders' interests. Consistent with the Committee’s pay for performance philosophy, equity award values for 2023 declined compared to the prior year in light of recent stock price performance.
Our equity awards have been in the form of itsoptions to purchase shares of our common stock onand restricted stock unit ("RSU") awards and typically vest over four years, which we believe provides an incentive to our named executive officers to create value over the NASDAQ Global Market onlong-term and to remain with the grant date.
(3)Amounts representCompany. For additional information regarding the aggregate grant date fair value of equity awards granted to our named executive officers, computed in accordance with FASB ASC Topic 718. See Note 11including the vesting terms of such awards, see the notes to our financial statements in our annual report on Form 10-K filed on February 22, 2017, for a discussion of our assumptions in determining the grant date fair values of equity awards. These amounts do not correspond to the actual value that may be recognized by the named executive officers.
Outstanding“Outstanding Equity Awards at 2023 Fiscal Year-End—2016
The following table shows information regarding outstanding equity awards at December 31, 2016, for our named executive officers.
Year-End Table” below.
| | | Option awards | Stock awards | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Grant date | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($) | |||||||||||||
Tim M. Mayleben | 6/1/2008(3) | 1,939 | — | 1.05 | 6/1/2018 | — | — | |||||||||||||
| 4/2/2010(2) | 2,610 | — | 1.26 | 4/2/2020 | — | — | ||||||||||||||
| 1/16/2013(1) | 273,659 | — | 2.10 | 1/16/2023 | — | — | ||||||||||||||
| 7/23/2013(2) | 154,375 | 35,625 | 17.11 | 7/23/2023 | — | — | ||||||||||||||
| 12/20/2013(2) | 30,000 | 10,000 | 12.92 | 12/20/2023 | — | — | ||||||||||||||
| 1/2/2015(2) | 40,250 | 51,750 | 41.23 | 1/2/2025 | — | — | ||||||||||||||
| 3/18/2015(2) | 16,100 | 20,700 | 105.72 | 3/18/2025 | — | — | ||||||||||||||
| 1/4/2016(2) | 5,625 | 24,375 | 21.65 | 1/4/2026 | — | — | ||||||||||||||
Roger S. Newton, Ph.D., FAHA | 1/16/2013(1) | 76,141 | — | 2.10 | 1/16/2023 | — | — | |||||||||||||
| 7/23/2013(2) | 73,125 | 16,875 | 17.11 | 7/23/2023 | — | — | ||||||||||||||
| 12/20/2013(2) | 15,000 | 5,000 | 12.92 | 12/20/2023 | — | — | ||||||||||||||
| 1/2/2015(2) | 8,750 | 11,250 | 41.23 | 1/2/2025 | — | — | ||||||||||||||
| 3/18/2015(2) | 3,500 | 4,500 | 105.72 | 3/18/2025 | — | — | ||||||||||||||
Narendra D. Lalwani, Ph.D., FAHA, DABT | 5/15/2014(4) | 25,000 | — | 14.42 | 5/15/2024 | — | — | |||||||||||||
| 8/7/2014(5) | 140,625 | 109,375 | 15.33 | 8/7/2024 | — | — | ||||||||||||||
| 1/2/2015(6) | 21,875 | 28,125 | 41.23 | 1/2/2025 | — | — | ||||||||||||||
| 3/18/2015(6) | 8,750 | 11,250 | 105.72 | 3/18/2025 | — | — | ||||||||||||||
| 1/4/2016(2) | 2,812 | 12,188 | 21.65 | 1/4/2026 | — | — | ||||||||||||||
Mary P. McGowan, M.D. | 8/19/2015(7) | 78,750 | 131,250 | 57.54 | 8/19/2025 | — | — | |||||||||||||
| 8/19/2015(8) | — | — | — | — | 9,376 | 117,388 | (9) | |||||||||||||
| 1/4/2016(6) | — | 15,000 | 21.65 | 1/4/2026 | — | — | ||||||||||||||
Employee Benefits
(1)This option vests over a four-year period, with 25% of the shares vesting on December 10, 2013, and the remainder in equal monthly installments on each monthly anniversary of such date thereafter, subject to continued employment through each such date, and is subject to an early exercise provision pursuant to which all shares underlying the option are immediately exercisable subject to a repurchase right in favor of the Company, which lapses as the option vests.(2)The options vest over a four-year period following the grant date in equal quarterly installments, subject to continued employment through each such date.(3)At the grant date, the option vested over a four-year period following the grant date in equal monthly installments. Pursuant to an amendmentIn addition to theoption agreement, dated April 2, 2010, the remaining unvested shares underlying the option vested over a four-year period following the grant date in equal quarterly installments, subject to continued service as a memberprimary elements ofthe Board through each such date.(4)The option vests over a one-year period following the grant date in equal quarterly installments.(5)The option vests over a four-year period with 25% of the shares underlying the option vesting on the one-year anniversary of August 1, 2015, and 1/16thvesting in equal installments on each quarterly anniversary of such date thereafter, subject to continued employment through each such date.
(6)The option vests over a four-year period following the grant date with 25% of the shares underlying the option vesting on the one-year anniversary of the grant date and 1/16thvesting in equal installments on each quarterly anniversary of such date thereafter, subject to continued employment through each such date.(7)The option vests over a four-year period with 25% of the shares underlying the option vesting on the one-year anniversary of June 15, 2015, and 1/16thvesting in equal installments on each quarterly anniversary of such date thereafter, subject to continued employment through each such date.(8)The RSUs vest over a four-year period with 25% of the units vesting on the one-year anniversary of June 15, 2015, and 1/16thvesting in equal installments on each quarterly anniversary of such date thereafter, subject to continued employment through each such date.(9)The market value of the unvested units is calculated based on the number of unvested units at December 31, 2016, and the closing market price of the Company's stock on December 31, 2016, of $12.52 per share.
Option Exercises and Stock Vested
The following table shows information regarding RSUs that vested during the year ended December 31, 2016. None ofcompensation described above, our named executive officers exercised stock options or had other equity awards vestare also eligible to participate in broad-based employee benefits programs available to all of our employees, including health insurance, life and disability insurance and our 401(k) plan. We match, in cash, 50% of the year ended December 31, 2016.
| | Stock awards | ||||||
|---|---|---|---|---|---|---|---|
Name | Number of shares acquired on vesting (#) | Value realized on vesting ($) | |||||
Mary P. McGowan, M.D. | 5,624 | 86,960 | |||||
Pension Benefits
None ofcontributions to the Esperion Therapeutics' 401(k) plan by our employees, including our named executive officers, participateson the first 12% deferral election, limited to 6% of their base salary each pay period. The 401(k) match vests over a three-year period as follows: on or after the first anniversary of date of hire: 33%; on or after the second anniversary of date of hire: 67%; on or after the third anniversary of date of hire: 100%.
Payments upon Termination of Employment or Change in or has account balances in qualified or non-qualified defined benefit plans sponsored by us.
Non-Qualified Deferred Compensation
None of our named executive officers participates in or has account balances in non-qualified defined contribution plans or other deferred compensation plans maintained by us.
Employment Arrangements with Our Named Executive Officers
Control
Employment Agreements
We have entered into amended and restated employment agreements with each of our named executive officers.officers on June 9, 2022. Except as noted below, these amended and restated employment agreementagreements provide for "at will" employment.
Mr. MaylebenKoenig
On May 14, 2015, the Company entered into an employment agreement with Mr. Mayleben. Mr. Mayleben currently receives an annual base salary of $535,000.
Pursuant to the terms of his employment agreement, Mr. Mayleben is also eligible to receive an annual performance bonus, with a target amount equal to 55% of his annual base salary. Mr. Mayleben is also eligible to participate in the Company's employee benefit plans, subject to the terms of such plans. Pursuant to his employment agreement, in the event that Mr. Mayleben'sKoenig’s employment is terminated by the Company without "cause" (as defined in the employment agreement) or Mr. Maylebenhe resigns his employment for "good reason"“good reason” (as defined in the employment agreement), subject to his execution and non-revocation of a separation agreement that includes a customary release of claims in favor of the Company,
Mr. Mayleben he is entitled to receive (i) severance in an amount equal to 18 months of his then-current annual base salary,
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payable in twelve18 monthly installments, and (ii) if Mr. Maylebenhe is participating in our group health plan immediately prior to his termination, a monthly cash payment until the earlier of twelve18 months following termination or the end of Mr. Mayleben'shis COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to Mr. Maylebenhim had he remained employed with us. In the event of a "sale event" (as defined in the employment agreement), all stock options and other stock-based awards with time-based vesting held by Mr. Mayleben shallKoenig will immediately accelerate and become exercisable or non-forfeitable as of the date of the sale event. In the event that Mr. Mayleben'sKoenig’s employment is terminated by the Company without cause"cause" (as defined in the employment agreement) or Mr. Maylebenhe resigns his employment for good reason,"good reason" (as defined in the employment agreement), in either case within a twelve-month12 month period following a sale event, subject to his execution and non-revocation of a separation agreement that includes a customary release of claims in favor of the Company, Mr. Maylebenhe is entitled to receive (i) an amount equal to one and a halftwo times his then-annual base salary (or his base salary in effect immediately prior to the sale event, if higher), plus two times his target bonus, payable in a lump sum within 60 days after the date of termination, and (ii) if Mr. Maylebenhe is participating in our group health plan immediately prior to his termination, a cash payment equal to the amount that we would have made to provide health insurance to Mr. Maylebenhim had he remained employed with us for eighteen18 months following termination. In addition,
Ms. Foody and Mr. Mayleben has entered into an employee non-competition, non-solicitation, confidentiality and assignment agreement that contains, among other things, non-competition and non-solicitation provisions that apply during the term of Mr. Mayleben's employment and for one year thereafter.
Warren
On December 8, 2016, we entered into a Scientific Advisor Agreement with Dr. Newton, pursuant to which, effective December 8, 2016, Dr. Newton retired from his role as the Company's Executive Chairman and Chief Scientific Officer and transitioned into the role of Scientific Advisor. The Scientific Advisor Agreement provides, among other things, that Dr. Newton shall (i) receive a base salary of $120,000 per year while serving as Scientific Advisor; (ii) continue to be eligible for employee benefits under the Company's plans and programs; and (iii) continue to vest in his outstanding equity awards while continuing to provide services to Esperion, pursuant to the terms of his existing equity awards. Effective December 8, 2016, Dr. Newton ceased to be an executive officer of Esperion but remains a member of the Board.
Dr. Lalwani
On May 14, 2015, the Company entered into an employment agreement with Dr. Lalwani. Dr. Lalwani currently receives an annual base salary of $390,000.
Pursuant to the terms of histheir employment agreement, Dr. Lalwani is also eligible to receive an annual performance bonus, with a target amount equal to 40% of his annual base salary. Dr. Lalwani is also eligible to participate in the Company's employee benefit plans, subject to the terms of such plans. Pursuant to his employment agreement,agreements, in the event that Dr. Lalwani's employment is terminated by the Company without "cause" (as defined in the employment agreement), subject to his execution and non-revocation of a separation agreement that includes a customary release of claims in favor of the Company, Dr. Lalwanithe named executive officer is entitled to receive (i) an amount equal to nine12 months of his then-current annual base salary, payable in nine12 monthly installments, and (ii) if Dr. Lalwanithe named executive officer is participating in our group health plan immediately prior to his termination, a monthly cash payment until the earlier of nine12 months following termination or the end of Dr. Lalwani'sthe COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to Dr. Lalwanithe named executive officer had hethe named executive officer remained employed with us. In the event of a "sale event" (as defined in the employment agreement), all stock options and other stock-based awards with time-based vesting held by Dr. Lalwani shall immediately accelerate and become exercisable or non-forfeitable as of the date of the sale event. In the event that Dr. Lalwani's employment is terminated by the Company without cause"cause" (as defined in the employment agreement) or Dr. Lalwanithe named executive officer resigns his employment for
"good "good reason" (as defined in the employment agreement), in either case within a twelve-month12 month period following a sale event, subject to histhe named executive officer’s execution and non-revocation of a separation agreement that includes a customary release of claims in favor of the Company, Dr. Lalwanithe named executive officer is entitled to receive (i) an amount equal to his then-annualtheir then-current annual base salary (or such base salary in effect immediately prior to the sale event, if higher), plus histheir target bonus, payable in a lump sum within 60 days after the date of termination, and (ii) if Dr. Lalwanithe named executive officer is participating in our group health plan immediately prior to histheir termination, a cash payment equal to the amount that we would have made to provide health insurance to Dr. Lalwanithe named executive officer had hethe named executive officer remained employed with us for twelve12 months following termination.
Other Compensation Policies
Hedging and Pledging Prohibitions
Our insider trading policy expressly prohibits short sales of our securities (including short sales "against the box”) and derivative transactions of our stock by our named executive officers, the non-employee members of our Board of Directors and specified other employees. Our insider trading policy expressly prohibits, without the advance approval of our audit committee, purchases or sales of puts, calls or other derivative securities of the Company or any derivative securities that provide the economic equivalent of or monetization transactions accomplished through the use of prepaid variable forwards, equity swaps, collars and exchange funds.
In addition, Dr. Lalwaniour insider trading policy expressly prohibits our named executive officers, the non-employee members of our Board of Directors and specified other employees from purchasing our securities on margin or borrowing against Company securities held in a margin account or, without the advance approval of our audit committee, pledging our securities as collateral for a loan or modifying an existing pledge.
Compensation Recovery Policy
In accordance with the requirements of the SEC and NASDAQ listing rules, our Board has entered into an employee non-competition, non-solicitation, confidentiality and assignment agreementadopted a compensation recovery policy, adopted as of November 8, 2023. The compensation recovery policy provides that contains, among other things, non-competition and non-solicitation provisions that apply during the term of Dr. Lalwani's employment and for one year thereafter.
Dr. McGowan
On June 15, 2015, the Company entered into an employment agreement with Dr. McGowan. Dr. McGowan currently receives an annual base salary of $395,000. Pursuant to the terms of her employment agreement, Dr. McGowan is also eligible to receive an annual performance bonus, with a target amount equal to 35% of her annual base salary. Dr. McGowan is also eligible to participate in the Company's employee benefit plans, subject to the terms of such plans. Pursuant to her employment agreement, in the event we are required to prepare a restatement of financial statements due to material noncompliance with any financial reporting requirement under securities laws, we will seek to recover any incentive-based compensation that Dr. McGowan's employment is terminated bywas based upon the Company without "cause" (as defined in the employment agreement), subject to her execution and non-revocationattainment of a separation agreementfinancial reporting measure and that includes a customary release of claims in favor ofwas received by any current or former executive officer during the Company, Dr. McGowan is entitled to receive (i) an amount equal to nine months of her then-current annual base salary, payable in nine monthly installments, and (ii)three-year period preceding the date that the restatement was required if Dr. McGowan is participating in our group health plan immediately prior to her termination, a monthly cash payment until the earlier of nine months following termination or the end of Dr. McGowan's COBRA health continuation period in an amount equal tosuch compensation exceeds the amount that wethe executive officers would have made to provide health insurance to Dr. McGowan had she remained employed with us. Inreceived based on the event that Dr. McGowan's employment is terminated by the Company without cause or Dr. McGowan resigns her employment for "good reason" (as defined in the employment agreement), in either case within a twelve-month period following a sale event, subject to her execution and non-revocation of a separation agreement that includes a customary release of claims in favor of the Company, Dr. McGowan is entitled to receive (i) an amount equal to her then-annual base salary, plus her target bonus, payable in lump sum within 60 days after the date of termination, and (ii) if Dr. McGowan is participating in our group health plan immediately prior to her termination, a cash payment equal to the amount that we would have made to provide health insurance to Dr. McGowan had she remained employed with us for twelve months following termination. In addition, Dr. McGowan has entered into an employee non-competition, non-solicitation, confidentiality and assignment agreement that contains, among other things, non-competition and non-solicitation provisions that apply during the term of Dr. McGowan's employment and for one year thereafter.
In addition, pursuant to the terms of the equity award agreements governing the equity awards held by Dr. McGowan, in the event that a "sale event" (as defined in the 2013 Plan) is consummated while Dr. McGowan remains an employee of Esperion or a subsidiary of Esperion, (i) 25% of the unvested shares subject to her equity awards will become vested if such sale event occurred within one year of her date of hire, (ii) 33% of the unvested shares will become vested if such sale event occurs on or after the one-year anniversary of her date of hire but before the two-year anniversary of her date of hire, (iii) 67% of the unvested shares subject to her equity awards will become vested if such sale event occurs on or after the two-year anniversary of her date of hire but before the three-year anniversary of her date of hire and (iv) 100% of the unvested shares subject to her equity awards will become vested if such sale event occurs on or after the three-year anniversary of her date of hire.
Table of Contents
We provide these benefits to promote retention and ease the consequences to the executive of an unexpected termination of employment. These arrangements are also intended to preserve morale and productivity in the face of the potentially disruptive impact of a change in control. These benefits also allow
Outstanding Equity Awards at 2023 Fiscal Year-End Table
The following table shows information regarding outstanding equity awards held at December 31, 2023, by our named executive officers to focusofficers.
| Option awards | Stock awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Grant date | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($) (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sheldon L. Koenig | 1/28/2021 (2) | 112,500 | 37,500 | 32.12 | 1/28/2031 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
5/17/2021 (3) | 75,000 | 45,000 | 20.87 | 5/17/2031 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/29/2021 (4) | 18,925 | 18,925 | 8.94 | 10/29/2031 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/14/2022 (5) | 215,250 | 276,750 | 4.74 | 3/14/2032 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6/7/2022 (6) | — | 91,000 | 6.20 | 6/7/2032 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/14/2023 (7) | 83,436 | 361,564 | 4.02 | 3/14/2033 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/28/2021 (2) | — | — | — | — | 7,500 | 22,425 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5/17/2021 (3) | — | — | — | — | 7,500 | 22,425 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/29/2021 (4) | — | — | — | — | 13,350 | 39,917 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/14/2022 (5) | — | — | — | — | 65,250 | 195,098 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/14/2023 (7) | — | — | — | — | 85,314 | 255,089 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| JoAnne Foody | 6/28/2021 (9) | 49,888 | 38,804 | 22.52 | 6/28/2031 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/29/2021 (4) | 15,925 | 15,925 | 8.94 | 10/29/2031 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/14/2022 (10) | 52,061 | 66,939 | 4.74 | 3/14/2032 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6/7/2022 (6) | — | 52,000 | 6.20 | 6/7/2032 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/14/2023 (7) | 22,968 | 99,532 | 4.02 | 3/14/2033 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8/8/2023 (8) | 2,790 | 41,860 | 1.62 | 8/8/2033 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8/8/2023 (6) | — | 44,650 | 1.62 | 8/8/2033 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6/28/2021 (9) | — | — | — | — | 27,356 | 81,794 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/29/2021 (4) | — | — | — | — | 11,225 | 33,563 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/14/2022 (10) | — | — | — | — | 15,750 | 47,093 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/14/2023 (7) | — | — | — | — | 23,362 | 69,852 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Eric Warren | 3/14/2022 (5) | 24,934 | 32,066 | 4.74 | 3/14/2032 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
6/7/2022 (6) | — | 52,000 | 6.20 | 6/7/2032 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/14/2023 (7) | 17,718 | 76,782 | 4.02 | 3/14/2033 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/28/2021 (11) | — | — | — | — | 3,506 | 10,483 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6/28/2021 (9) | — | — | — | — | 2,585 | 7,729 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/29/2021 (4) | — | — | — | — | 12,000 | 35,880 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/14/2022 (5) | — | — | — | — | 7,316 | 21,875 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/14/2023 (7) | — | — | — | — | 18,121 | 54,182 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)The market value of the unvested units is calculated based on the valuenumber of strategic alternatives to stockholders without concern for the impact on their own continued employment, as each of their offices isunvested units at heightened risk of turnover in the event of a change in control.
Estimated Payment and Benefits Upon Termination or Change in Control
The amount of compensation and benefits payable to each of our named executive officers in various termination of employment and change in control situations, assuming that the triggering event occurred on December 31, 2016, has been estimated in2023, and the tables below. The closing market price of the Company's common stock on the NASDAQ Global Market as of December 30, 2016,29, 2023, the last trading day of 2016, was $12.522023, of $2.99 per share.
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(2)The valueawards vest over a four-year period, with 25% of the shares vesting on the one-year anniversary of December 15, 2020, and 1/16th vesting on each quarterly anniversary of such date thereafter, subject to continued employment through each such date.
(3)The awards vest over a four-year period, with 25% of the shares vesting on the one-year anniversary of June 15, 2021, and 1/16th vesting on each quarterly anniversary of such date thereafter, subject to continued employment through each such date.
(4)These performance-based grants vest 50% upon the CVOT public presentation of results and 50% upon obtaining approval for cardiovascular risk reduction into the U.S. label.
(5)The awards vest over a four-year period in equal quarterly installments, the first of which will be June 15, 2022, subject to continued employment through each such date.
(6)These performance-based options vest upon obtaining approval for cardiovascular risk reduction into the U.S. label.
(7)The awards vest over a four-year period in equal quarterly installments, the first of which will be June 15, 2023, subject to continued employment through each such date.
(8)The awards vest over a four-year period in equal quarterly installments, the first of which will be November 15, 2023, subject to continued employment through each such date.
(9)The awards vest over a four-year period, with 25% of the shares vesting on the one-year anniversary of July 15, 2021, and 1/16th vesting on each quarterly anniversary of such date thereafter, subject to continued employment through each such date.
(10)The awards vest over a four-year period, with 25% of shares vesting on the one-year anniversary of March 15, 2022, and 1/16th vesting on each quarterly anniversary of such date thereafter, subject to continued employment through each such date.
(11)The awards vest over a four-year period, with 25% of shares vesting on the one-year anniversary of February 15, 2021, and 1/16th vesting on each quarterly anniversary of such date thereafter, subject to continued employment through each such date.
Pay versus Performance
The following table reports the compensation of our Principal Executive Officer (our "PEO") and the average compensation of our other Named Executive Officers (our "Other NEOs") as reported in the Summary Compensation Table for the past two fiscal years, as well as their “compensation actually paid” as calculated pursuant to Item 402(v) of Regulation S-K and certain performance measures required by such Item.
| Year | Summary Compensation Table Total for First PEO | Summary Compensation Table Total for Second PEO | Compensation Actually Paid to First PEO | Compensation Actually Paid to Second PEO | Average Summary Compensation Table Total for Other NEOs | Average Compensation Actually Paid to Other NEOs | Value of Initial Fixed $100 Investment Based On Total Stockholder Return | Net Loss (in thousands) | ||||||||||||||||||
| (a) | (b) | (b) | (c) | (c) | (d) | (e) | (f) | (g) | ||||||||||||||||||
| 2023 | $ | 2,968,565 | $ | — | $ | 395,236 | $ | — | $ | 1,251,223 | $ | 596,326 | $ | 11.50 | $ | (209,248) | ||||||||||
| 2022 | $ | 3,799,412 | $ | — | $ | 4,773,987 | $ | — | $ | 1,412,466 | $ | 1,797,309 | $ | 23.96 | $ | (233,659) | ||||||||||
| 2021 | $ | 7,776,226 | $ | 8,227,286 | $ | 2,053,198 | $ | 1,599,226 | $ | 3,294,885 | $ | 856,321 | $ | 19.23 | $ | (269,108) | ||||||||||
(a) For 2023 and 2022, Mr. Koenig served as our PEO. For 2023, Dr. Foody and Mr. Warren served as our Other NEOs. For 2022, Dr. Foody and Mr. Looker served as our Other NEOs. For 2021, Mr. Koenig and Mr. Timothy Mayleben served as our PEO (First and Second in the table, respectively) and Mr. Bartram (Former Chief Financial Officer), Dr. Foody, and Ms. Ashley Hall (Former Chief Development Officer) served as our Other NEOs.
(b) The dollar amounts reported are the amounts of total compensation reported for Mr. Koenig and Mr. Mayleben for each corresponding year in the “Total” column of the "Summary Compensation Table."
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(c) The Summary Compensation Table totals for each PEO for each fiscal year were subject to the following adjustments per Item 402(v)(2)(iii) of Regulation S-K to calculate “compensation actually paid”:
| Year | Summary Compensation Table Total for PEO 1 | Equity Award Adjustments for PEO 1 (1) | Compensation Actually Paid to PEO 1 | Summary Compensation Table Total for PEO 2 | Equity Award Adjustments for PEO 2 (1) | Incremental Cost Adjustment for PEO 2 (2) | Compensation Actually Paid to PEO 2 | ||||||||||||||||
| 2023 | $ | 2,968,565 | $ | (2,573,329) | $ | 395,236 | $ | — | $ | — | $ | — | $ | — | |||||||||
| 2022 | $ | 3,799,412 | $ | 974,575 | $ | 4,773,987 | $ | — | $ | — | $ | — | $ | — | |||||||||
| 2021 | $ | 7,776,226 | $ | (5,723,028) | $ | 2,053,198 | $ | 8,227,286 | $ | (2,908,444) | $ | (3,719,616) | $ | 1,599,226 | |||||||||
(1) Equity award adjustment amounts reflect the aggregate of the following components, as applicable: (i) the fair value as of the end of the listed fiscal year of unvested stock options wasequity awards granted in that fiscal year; (ii) the change in fair value during the listed fiscal year of equity awards granted in prior fiscal years that remained outstanding and unvested at the end of the listed fiscal year; and (iii) the change in fair value during the listed fiscal year through the vesting date of equity awards granted in prior fiscal years that vested during the listed fiscal year, less the fair value at the end of the prior fiscal year of awards granted prior to the listed fiscal year that failed to meet applicable vesting conditions during the listed fiscal year. Equity values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate the fair values did not materially differ from those disclosed at the time of the grant. The amounts deducted or added in calculating the equity award adjustments are as follows:
| Year | Change from Year End Fair Value of Outstanding and Unvested Equity Awards Granted in the Year | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Change in Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Equity Award Adjustments | ||||||||||||||||
| PEO 1 | |||||||||||||||||||||||
| 2023 | $ | (313,336) | $ | (1,348,054) | $ | (188,668) | $ | (723,271) | $ | — | $ | — | $ | (2,573,329) | |||||||||
| 2022 | $ | 524,050 | $ | 243,602 | $ | 141,519 | $ | 65,404 | $ | — | $ | — | $ | 974,575 | |||||||||
| 2021 | $ | (4,782,040) | $ | — | $ | (940,988) | $ | — | $ | — | $ | — | $ | (5,723,028) | |||||||||
| PEO 2 | |||||||||||||||||||||||
| 2022 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
| 2021 | $ | (3,707,482) | $ | — | $ | 28,166 | $ | 3,379,913 | $ | (2,609,041) | $ | — | $ | (2,908,444) | |||||||||
(2) Represents incremental fair value from the modification of Mr. Mayleben's equity awards in accordance with FASB ASC Topic 718 associated with the terms of his separation agreement.
(d) The dollar amounts reported are the average of the amounts of total compensation reported for our Other NEOs named in (a) for each corresponding year in the “Total” column of the"Summary Compensation Table".
(e) The Average Summary Compensation Table totals for our Other NEOs for each fiscal year were subject to the following adjustments per Item 402(v)(2)(iii) of Regulation S-K to calculate “compensation actually paid”:
| Year | Average Summary Compensation Table Total for Other NEOs | Equity Award Adjustments for Other NEOs (1) | Incremental Cost Adjustment for Other NEOs (2) | Average Compensation Actually Paid to Other NEOs | ||||||||||
| 2023 | $ | 1,251,223 | $ | (654,897) | $ | — | $ | 596,326 | ||||||
| 2022 | $ | 1,412,466 | $ | 384,843 | $ | — | $ | 1,797,309 | ||||||
| 2021 | $ | 3,294,885 | $ | (2,291,784) | $ | (146,780) | $ | 856,321 | ||||||
(1) Equity award adjustment amounts reflect the aggregate of the following components, as applicable: (i) the fair value as of the end of the listed fiscal year of unvested equity awards granted in that fiscal year; (ii) the change in fair value during the listed fiscal year of equity awards granted in prior fiscal years that remained outstanding and unvested at the end of the listed fiscal year; and (iii) the change in fair value during the listed fiscal year through the vesting date of equity awards granted in prior fiscal years that vested during the listed fiscal year, less the fair value at the end of the prior fiscal year of awards granted prior to the listed fiscal year that failed to meet applicable vesting conditions during the listed fiscal year. Equity values are calculated in accordance with FASB ASC Topic 718, and the valuation
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assumptions used to calculate the fair values did not materially differ from those disclosed at the time of the grant. The amounts deducted or added in calculating the equity award adjustments are as follows:
| Year | Change from Year End Fair Value of Outstanding and Unvested Equity Awards Granted in the Year | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Change in Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Equity Award Adjustments | ||||||||||||||||
| 2023 | $ | (31,136) | $ | (405,132) | $ | (46,302) | $ | (172,327) | $ | — | $ | — | $ | (654,897) | |||||||||
| 2022 | $ | 262,253 | $ | 83,446 | $ | — | $ | 39,144 | $ | — | $ | — | $ | 384,843 | |||||||||
| 2021 | $ | (2,033,212) | $ | (139,926) | $ | (59,912) | $ | 117,787 | $ | (176,521) | $ | — | $ | (2,291,784) | |||||||||
(2) Represents incremental fair value from the modification of equity awards in accordance with FASB ASC Topic 718 associated with termination of employment of Ms. Hall.
(f) Cumulative TSR is calculated by multiplyingdividing the numbersum of unvested option shares subject to vesting acceleration asthe cumulative amount of December 31, 2016, bydividends for the measurement period, assuming dividend reinvestment, and the difference between the closingCompany’s share price at the end and the beginning of the Company's common stock as of December 30, 2016, andmeasurement period by the exerciseCompany’s share price for such unvested option shares.
Mr. Mayleben
The following table describesat the potential payments and benefits upon employment termination for Tim M. Mayleben, the company's President and Chief Executive Officer, as if the triggering event occurred on December 31, 2016, the last business daybeginning of the fiscalmeasurement period. No dividends were paid on stock or option awards in 2021, 2022 or 2023.
(g) The dollar amounts reported represent the amount of net income (loss) reflected in the audited financial statements for the applicable year.
Dr. Lalwani
Executive benefits and payment upon termination | Voluntary resignation not for good reason ($) | Voluntary resignation for good reason ($) | Termination by Company without cause ($) | Termination by Company for cause ($) | Upon a sale event ($) | Termination by Company without cause or voluntary resignation for good reason within 12 months following a sale event ($) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Compensation: | |||||||||||||||||||
Base salary | — | 535,000 | 535,000 | — | — | 802,500 | |||||||||||||
Cash incentive bonus | — | — | — | — | — | 294,250 | |||||||||||||
Equity awards unvested and accelerated | — | — | — | — | — | — | |||||||||||||
Benefits and Perquisites: | |||||||||||||||||||
Health care continuation | — | 22,560 | 22,560 | — | — | 33,840 | |||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | — | 557,560 | 557,560 | — | — | 1,130,590 | |||||||||||||
Relationship Between Compensation Actually Paid and Performance Measures
The following table describesgraph below reflects the potential paymentsrelationship between our PEO and benefits upon employment termination for Narendra D. Lalwani, the Company's Executive Vice President, Researchour average Other NEO compensation actually paid and Development andnet loss reported from 2021 to 2023:
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Chief Operating Officer, as if
The graph below reflects the triggering event occurred on December 31, 2016, the last business day of the fiscal year.
relationship between our PEO and our average Other NEO compensation actually paid and cumulative TSR from 2021 to 2023:
Executive benefits and payment upon termination | Voluntary resignation not for good reason ($) | Voluntary resignation for good reason ($) | Termination by Company without cause ($) | Termination by Company for cause ($) | Upon a sale event ($) | Termination by Company without cause or voluntary resignation for good reason within 12 months following a sale event ($) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Compensation: | |||||||||||||||||||
Base salary | — | — | 292,500 | — | — | 390,000 | |||||||||||||
Cash incentive bonus | — | — | — | — | — | 156,000 | |||||||||||||
Equity awards unvested and accelerated | — | — | — | — | — | — | |||||||||||||
Benefits and Perquisites: | |||||||||||||||||||
Health care continuation | — | — | 11,412 | — | — | 15,216 | |||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | — | — | 303,912 | — | — | 561,216 | |||||||||||||
Dr. McGowan
The following table describes the potential payments and benefits upon employment termination for Mary P. McGowan, the Company's Chief Medical Officer, as if the triggering event occurred on December 31, 2016, the last business day of the fiscal year.
Executive benefits and payment upon termination | Voluntary resignation not for good reason ($) | Voluntary resignation for good reason ($) | Termination by Company without cause ($) | Termination by Company for cause ($) | Upon a sale event ($) | Termination by Company without cause or voluntary resignation for good reason within 12 months following a sale event ($) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Compensation: | |||||||||||||||||||
Base salary | — | — | 296,250 | — | — | 395,000 | |||||||||||||
Cash incentive bonus | — | — | — | — | — | 138,250 | |||||||||||||
Equity awards unvested and accelerated | — | — | — | — | 39,129 | — | |||||||||||||
Benefits and Perquisites: | |||||||||||||||||||
Health care continuation | — | — | 29,016 | — | — | 38,688 | |||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | — | — | 325,266 | — | 39,129 | 571,938 | |||||||||||||
Director Compensation Policy
We reimburse each member of our Board who is not an employee for reasonable travel and other expenses in connection with attending meetings of the Board or committees thereof.
We adopted a non-employee director compensation policy that became effective upon our initial public offering. Effective February 25, 2017, each
Each of the non-employee members of our Board of Directors is entitled to the following equity compensation pursuant to thisour non-employee director compensation policy:
•Upon initial election to theour Board of Directors, each non-employee director receives an initial equity grant of an option to purchase 25,00040,000 shares of our common stock. Such initial equity awards vest in equal annual installments during the three years following the grant date, subject to the director’s continued service on the Board as of each vesting date.
•Effective May 9, 2023, each continuing non-employee director of our Board receives an annual option to purchase 21,000 shares of our common stock with an exercise price equaland 5,150 RSUs immediately following the Company’s Annual Meeting of Stockholders. Prior to the fair market valueMay 9, 2023, each continuing non-employee director of our common stock on the date of grant, that vests in equal monthly installments over three years, provided, however, that all vesting ceases if the director resigns from the Board or otherwise ceases to serve as a director, unless the Board determines that the circumstances warrant continuation of vesting.
•Each continuing non-employee member of the Board receivesreceived an annualequity grant of anoption to purchase14,00020,000 shares of our common stockwith an exercise price equal toimmediately following thefair market valueCompany’s Annual Meeting ofthe common stock on the date of grant, thatStockholders. Such annual equity award vests on the earlier of the one-year anniversary of the grant date and thecompany'sCompany’s next Annual Meeting ofstockholders, provided, however, that all vesting ceases ifStockholders, subject to thedirector resigns fromdirector’s continued service on the Boardor otherwise ceasesas of each vesting date. The number of shares of our common stock subject toservethe options granted is pro-rated based on the number of calendar days served by such director during the applicable year.
Prior to October 26, 2021 and subsequent to May 29, 2019, upon initial election to the Board, each non-employee director received a RSU grant of our Company's Common Stock with a grant date fair value of $500,000, calculated based on the closing price of our common stock on the Nasdaq Stock Market on the date of the grant. Such initial equity awards vested in equal monthly installments during the 36 months following the grant date, subject to the director’s continued service on the Board as of each vesting date. Effective April 5, 2021, such initial equity awards vested in annual installments over three years, subject to the director’s continued service on the Board as of each vesting date.
Prior to October 26, 2021, and subsequent to May 29, 2019, each continuing non-employee director of our Board received an annual RSU grant of the Company’s common stock immediately following the Company’s Annual Meeting of Stockholders, other than a director unlessreceiving an initial award, with a grant date fair value of $250,000, calculated based on the closing price of our common stock on the Nasdaq Stock Market on the date of the grant, each with the same vesting schedules for annual equity awards as described above.
All the foregoing restricted stock units will become immediately vested upon the death or disability of a director or upon a change in control of the Company, subject to the director’s continued service on the Board determinesat that time.
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Each of the circumstances warrant continuation of vesting.
Effective December 7, 2015, eachnon-employee members of our directorsBoard of Directors also annually receives a $35,000$50,000 cash retainer for general availability and participation in meetings and conference calls of our Board. Additionally, the audit committee chairperson annually receives a $15,000$20,000 cash retainer, each audit committee member (other than the chairperson) annually receives a $7,500$10,000 cash retainer, the compensation committee chairperson annually receives a $10,000$15,000 cash retainer, each compensation committee member (other than the chairperson) annually receives a $5,000$7,500 cash retainer, the nominating and corporate governance committee chairperson annually receives a $7,000$10,000 cash retainer and each nominating and corporate governance committee member (other than the chairperson) annually receives a $3,500$5,000 cash retainer. The lead independent directorLead Independent Director receives an additional annual cash retainer of $15,000.$25,000. The Non-Executive Chairperson of the Board of Directors receives an additional annual cash retainer of $35,000. The amounts for such annual retainers are pro-rated based on the number of calendar days served by such director during the applicable year.
The compliance committee chairperson annually receives a $15,000 cash retainer and each compliance committee member (other than the chairperson) annually receives a $7,500 cash retainer. We reimburse each member of our Board of Directors who is not an employee for reasonable travel and other expenses in connection with attending meetings of our Board or committees thereof.
The following table provides compensation information for the fiscal year ended December 31, 2016,2023, for each non-employee member of our Board.Board of Directors, other than those whose information is reflected in the 2023 Summary Compensation Table. Mr. Mayleben and Dr. NewtonKoenig did not receive any compensation for theirhis services as directorsdirector during the year ended December 31, 2016 and the compensation paid to them by Esperion during 2016 is reflected in the "Summary Compensation Table" above.2023. No member of our Board of Directors employed by us receives separate compensation for services rendered as a member of our Board.
Compensation Committee Interlocks and Insider Participation
2023 Director Compensation Table
Director Name | Fees Earned or Paid in Cash ($) | Stock Option Awards ($)(1) | Total ($) | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
Scott Braunstein, M.D. | 46,688 | 86,853 | (2) | 133,541 | ||||||
Dov A. Goldstein, M.D. | 45,750 | 86,853 | (2) | 132,603 | ||||||
Antonio M. Gotto, Jr., M.D., D.Phil. | 43,500 | 86,853 | (2) | 130,353 | ||||||
Daniel Janney | 47,500 | 86,853 | (2) | 134,353 | ||||||
Mark E. McGovern, M.D. | 38,500 | 86,853 | (2) | 125,353 | ||||||
Gilbert S. Omenn, M.D., Ph.D. | 47,500 | 86,853 | (2) | 134,353 | ||||||
Nicole Vitullo | 60,000 | 86,853 | (2) | 146,853 | ||||||
| Director Name | Fees Earned or Paid in Cash ($) | Restricted Stock Unit Awards ($) (1) (2) | Stock Option Awards ($) (1) (2) | Total ($) | |||||||||||||||||||||||||||||||
Jeffrey Berkowitz, J.D. (3) | 46,042 | — | — | 46,042 | |||||||||||||||||||||||||||||||
| J. Martin Carroll | 90,000 | 7,056 | 20,222 | 117,278 | |||||||||||||||||||||||||||||||
| Seth H.Z. Fischer | 72,500 | 7,056 | 20,222 | 99,778 | |||||||||||||||||||||||||||||||
| Alan Fuhrman | 77,500 | 7,056 | 20,222 | 104,778 | |||||||||||||||||||||||||||||||
| Antonio M. Gotto, Jr., M.D., D.Phil. | 55,000 | 7,056 | 20,222 | 82,278 | |||||||||||||||||||||||||||||||
| Stephen Rocamboli | 67,500 | 7,056 | 20,222 | 94,778 | |||||||||||||||||||||||||||||||
| Jay P. Shepard | 70,000 | 7,056 | 20,222 | 97,278 | |||||||||||||||||||||||||||||||
| Nicole Vitullo | 67,500 | 7,056 | 20,222 | 94,778 | |||||||||||||||||||||||||||||||
| Tracy M. Woody | 64,688 | 7,056 | 20,222 | 91,965 | |||||||||||||||||||||||||||||||
- (1)
Amount representsAmounts represent the aggregate grant date fair value of the RSU and stock option awardson the date of grantcomputed in accordance with FASB ASC Topic 718. See Note1113 of the notes to our financial statements in ourannual reportAnnual Report on Form 10-K filed with the SEC on February22, 2017,27, 2024, for a discussion of our assumptions in determining the grant date fair values of equity awards.(2)AggregateThis amountbased on a fairdoes not correspond to the actual valueper sharethat may be recognized by our non-employee directors.
(2)As of $10.86 onDecember 31, 2023, our non-employee directors held the date of grant, as computed in accordance with FASB ASC Topic 718, multiplied by thefollowing aggregate number of shares of our commonunexercised stock subject to the award.options and unvested RSUs:
| Name | Number of Securities Underlying Unexercised Options | Number of Securities Underlying Unvested Restricted Stock Units | ||||||||||||
Jeffrey Berkowitz, J.D. (3) | 29,427 | — | ||||||||||||
| J. Martin Carroll | 61,000 | 5,150 | ||||||||||||
| Seth H.Z. Fischer | 72,561 | 5,150 | ||||||||||||
| Alan Fuhrman | 41,000 | 5,150 | ||||||||||||
| Antonio M. Gotto, Jr., M.D., D.Phil. | 106,100 | 5,150 | ||||||||||||
| Stephen Rocamboli | 62,589 | 5,150 | ||||||||||||
| Jay P. Shepard | 59,700 | 5,150 | ||||||||||||
| Nicole Vitullo | 86,100 | 5,150 | ||||||||||||
| Tracy M. Woody | 41,000 | 5,150 | ||||||||||||
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The following table provides the aggregate number of shares underlying unexercised options to purchase common stock held by each non-employee member of our Board
(3)Jeff Berkowitz resigned as a director effective as of December 31, 2016:
June 15, 2023. Mr. Berkowitz's stock options will expire on June 15, 2024.
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Equity Compensation Plans
The following table sets forth information as of December 31, 2016 regarding shares of common stock that may be issued under our equity compensation plans, consisting of the 2008 Plan and the 2013 Plan.
Plan Category | Number of securities to be issued upon exercise of outstanding options (#) | Weighted-average exercise price of outstanding options ($) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
Equity compensation plans approved by security holders | 3,255,987 | 28.53 | 623,064 | (1) | ||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||
| | | | | | | | | | | |
Total | 3,255,987 | 28.53 | 623,064 | |||||||
(1)As of February 1, 2017, there were 773,449 shares available for grant under the 2013 Plan.
Exchange Act Rule 10b5-1 SalesTrading Plans
Our policy governing transactions in our securities by directors,the non-employee members of our Board, officers and employees permits our officers, directors and certain other persons to enter into trading plans complying with Rule 10b5-1 under the Exchange Act. Generally, under these trading plans, the individual relinquishes control over the transactions once the trading plan is put into place. Accordingly, sales under these plans may occur at any time, including possibly before, simultaneously with, or immediately after significant events involving our company.
Company.
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During 2016, Ms. Vitullo, Mr. Janney and Drs. Gotto and Omenn served as members of our compensation committee. No member of the compensation committee was an employee or officer of Esperion during 2016, a former officer of Esperion, or had any other relationship with us requiring disclosure herein.
During the last fiscal year, none of our executive officers served as: (1) a member of the compensation committee (or other committee of the board of directors performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose
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executive officers served on our compensation committee; (2) a director of another entity, one of whose executive officers served on our compensation committee; or (3) a member of the compensation committee (or other committee of the board of directors performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on our Board.
Other than compensation arrangements, we describe below transactions and series of similar transactions since January 1, 2016,2023, to which we were a party or will be a party, in which:
•the amounts involved exceeded or will exceed $120,000;$120,000 (or, if less, 1% of the average of our total asset amounts at December 31, 2022 and 2023); and
•
•any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest.
Compensation arrangements for our directors and named executive officers are described elsewhere in this proxy statement.
Proxy Statement.
Indemnification Agreements
We have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us to indemnify each director and executive officer to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys' fees, judgments, fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person's services as a director or executive officer.
Procedures for Approval of Related Party Transactions
Our audit committee reviews and approves transactions with directors, officers and holders of 5% or more of our capital stock and their affiliates, each of whom we refer to as a related party. We have adopted a written related party transaction approval policy that governs the review of related party transactions. Pursuant to this policy, our audit committee shall review the material facts of all related party transactions. The audit committee shall take into account, among other factors that it deems appropriate, whether the related party transaction is on terms no less favorable to us than terms generally available in a transaction with an unrelated third party under the same or similar circumstances and the extent of the related party's interest in the related party transaction. Further, when stockholders are entitled to vote on a transaction with a related party, the material facts of the related party's relationship or interest in the transaction are disclosed to the stockholders, who must approve the transaction in good faith.
TRANSACTION OF OTHER BUSINESS
The
Our Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, the persons appointed in the accompanying proxy intend to vote the shares represented thereby in accordance with their best judgment on such matters, under applicable laws.
HOUSEHOLDING
Some banks, brokers and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of our documents, including the annual report to stockholders and proxy statement, may have been sent to multiple stockholders in your household. We will promptly deliver a separate copy of either document to you upon written or oral request to Esperion Therapeutics, Inc., 3891 Ranchero Drive, Suite 150, Ann Arbor, MI 48108, Attention: Corporate Secretary, telephone: 734-887-3903. If you want to receive separate copies of the proxy statement or annual report to stockholders in the future, or if you are receiving multiple copies and would like to receive only one copy per household, you should contact your bank, broker or other nominee record holder, or you may contact us at the above address and phone number.
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ADDITIONAL INFORMATION
Procedures for Submitting Stockholder Proposals
Requirements for Stockholder Proposals to be Brought Before the Annual Meeting.Our bylaws provide that, for nominations of persons for election to our Board or other proposals to be considered at an Annual Meeting of stockholders, a stockholder must give written notice to our Corporate Secretary at 3891 Ranchero Drive, Suite 150, Ann Arbor, MI 48108, not later than the close of business on January 17, 2018February 22, 2025 (90 days prior to the first anniversary of the date of the preceding year's Annual Meeting), nor earlier than the close of business on December 18, 2017January 23, 2025 (120 days prior to the first anniversary of the date of the preceding year's Annual Meeting). However, the bylaws also provide that in the event the date of the Annual Meeting is more than 30 days before or more than 60 days after such anniversary date, notice must be delivered not later than the close of business on the later of January 17, 2018 (thethe 90th day prior to such Annual Meeting)Meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. Any nomination must include all information relating to the nominee that is required to be disclosed in solicitations of proxies for election of directors in election contests or is otherwise required under Regulation 14A of the Exchange Act, the person's written consent to be named in the proxy statement and to serve as a director if elected and such information as we might reasonably require to determine the eligibility of the person to serve as a director. As to other business, the notice must include a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting, and any material interest of such stockholder (and the beneficial owner) in the proposal. The proposal must be a proper subject for stockholder action. In addition, to make a nomination or proposal, the stockholder must be of record at the time the notice is made and must provide certain information regarding itself (and the beneficial owner), including the name and address, as they appear on our books, of the stockholder proposing such business, the number of shares of our capital stock which are, directly or indirectly, owned beneficially or of record by the stockholder proposing such business or its affiliates or associates (as defined in Rule 12b-2 promulgated under the Exchange Act) and certain additional information.
The advance notice requirements for the Annual Meeting are as follows: a stockholder's notice shall be timely if delivered to our Secretary at the address set forth above not later than the close of business on the later of the 90th day prior to the scheduled date of the Annual Meeting or the 10th day following the day on which public announcement of the date of the Annual Meeting is first made or sent by us.
To comply with the SEC's universal proxy rules, stockholders who intend to solicit their proxies in support of director nominees other than our Company's nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 24, 2025.
Requirements for Stockholder Proposals to be Considered for Inclusion in the Company's Proxy Materials.In addition to the requirements stated above, any stockholder who wishes to submit a proposal for inclusion in our proxy materials must comply with Rule 14a-8 promulgated under the Exchange Act. For such proposals to be included in our proxy materials relating to our 20182025 Annual Meeting of stockholders, all applicable requirements of Rule 14a-8 must be satisfied and we must receive such proposals no later than November 6, 2017.December 15, 2024. Such proposals must be delivered by mail to our Secretary, c/o Esperion Therapeutics, Inc., 3891 Ranchero Drive, Suite 150, Ann Arbor, MI 48108. We also encourage you to submit any such proposals via email to investorrelations@esperion.com.
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery
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ANNEX A
ESPERION THERAPEUTICS, INC. 3891 RANCHERO DRIVE, SUITE 150 ANN ARBOR, MI 48108 During
2022 STOCK OPTION AND INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The Meeting - Goname of the plan is the Esperion Therapeutics, Inc. 2022 Stock Option and Incentive Plan (the “Plan”). The purpose of the Plan is to www.virtualshareholdermeeting.com/ESPR2017 You may attendencourage and enable the Meeting viaofficers, employees, Non-Employee Directors and Consultants of Esperion Therapeutics, Inc. (the “Company”) and its Affiliates upon whose judgment, initiative and efforts the Internet and vote duringCompany largely depends for the Meeting. Have the information that is printedsuccessful conduct of its business to acquire a proprietary interest 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 the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return itCompany. It is anticipated that providing such persons with a direct stake in the postage-paid envelope weCompany’s welfare will assure a closer identification of their interests with those of the Company and its stockholders, thereby stimulating their efforts on the Company’s behalf and strengthening their desire to remain with the Company.
The following terms shall be defined as set forth below:
“Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
“Administrator” means either the Board or the compensation committee of the Board or a similar committee performing the functions of the compensation committee and which is comprised of not less than two Non‑Employee Directors who are independent.
“Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company as such terms are defined in Rule 405 of the Act. The Board will have providedthe authority to determine the time or return ittimes at which “parent” or “subsidiary” status is determined within the foregoing definition.
“Award” or “Awards,” except where referring to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E18450-P85845 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. ESPERION THERAPEUTICS, INC. Thea particular category of grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Units, Restricted Stock Awards, Unrestricted Stock Awards, Cash-Based Awards, and Dividend Equivalent Rights.
“Award Certificate” means a written or electronic document setting forth the terms and provisions applicable to an Award granted under the Plan. Each Award Certificate is subject to the terms and conditions of the Plan.
“Board” means the Board of Directors recommends you vote FORof the following: 1. ElectionCompany.
“Cash-Based Award” means an Award entitling the recipient to receive a cash-denominated payment.
“Code” means the Internal Revenue Code of Class I Directors Nominees: For Withhold ! ! ! ! ! ! 1a. Daniel Janney 1b. Tim M. Mayleben 1c. Mark E. McGovern, M.D. For Against Abstain1986, as amended, and any successor Code, and related rules, regulations and interpretations.
“Consultant” means a consultant or adviser who provides bona fide services to the Company or an Affiliate as an independent contractor and who qualifies as a consultant or advisor under Instruction A.1.(a)(1) of Form S-8 under the Act.
“Dividend Equivalent Right” means an Award entitling the grantee to receive credits based on cash dividends that would have been paid on the shares of Stock specified in the Dividend Equivalent Right (or other award to which it relates) if such shares had been issued to and held by the grantee.
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“Effective Date” means the date on which the Plan becomes effective as set forth in Section 19.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
“Fair Market Value” of the Stock on any given date means the fair market value of the Stock determined in good faith by the Administrator; provided, however, that if the Stock is listed on the National Association of Securities Dealers Automated Quotation System (“NASDAQ”), NASDAQ Global Market, The New York Stock Exchange or another national securities exchange or traded on any established market, the determination shall be made by reference to market quotations. If there are no market quotations for such date, the determination shall be made by reference to the last date preceding such date for which there are market quotations.
“Incentive Stock Option” means any Stock Option designated and qualified as an “incentive stock option” as defined in Section 422 of the Code.
“Minimum Vesting Period” means the one-year period following the date of grant of an Award.
“Non-Employee Director” means a member of the Board who is not also an employee of Directors recommends you vote FOR proposals 2the Company or any Subsidiary.
“Non-Qualified Stock Option” means any Stock Option that is not an Incentive Stock Option.
“Option” or “Stock Option” means any option to purchase shares of Stock granted pursuant to Section 5.
“Restricted Shares” means the shares of Stock underlying a Restricted Stock Award that remain subject to a risk of forfeiture or the Company’s right of repurchase.
“Restricted Stock Award” means an Award of Restricted Shares subject to such restrictions and conditions as the Administrator may determine at the time of grant.
“Restricted Stock Units” means an Award of stock units subject to such restrictions and conditions as the Administrator may determine at the time of grant.
“Sale Event” shall mean (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power and outstanding stock immediately prior to such transaction do not own a majority of the outstanding voting power and outstanding stock or other equity interests of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, (iii) the sale of all of the Stock of the Company to an unrelated person, entity or group thereof acting in concert, or (iv) any other transaction in which the owners of the Company’s outstanding voting power immediately prior to such transaction do not own at least a majority of the outstanding voting power of the Company or any successor entity immediately upon completion of the transaction other than as a result of the acquisition of securities directly from the Company.
“Sale Price” means the value as determined by the Administrator of the consideration payable, or otherwise to be received by stockholders, per share of Stock pursuant to a Sale Event.
“Section 409A” means Section 409A of the Code and the regulations and other guidance promulgated thereunder.
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“Service Relationship” means any relationship as an employee, director or Consultant of the Company or any Affiliate (e.g., a Service Relationship shall be deemed to continue without interruption in the event an individual’s status changes from full-time employee to part-time employee or Consultant).
“Stock” means the Common Stock, par value 0.001 per share, of the Company, subject to adjustments pursuant to Section 3. ! ! ! ! ! !
“Stock Appreciation Right” means an Award entitling the recipient to receive shares of Stock (or cash, to the extent explicitly provided for in the applicable Award Certificate) having a value equal to the excess of the Fair Market Value of the Stock on the date of exercise over the exercise price of the Stock Appreciation Right multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised.
“Subsidiary” means any corporation or other entity (other than the Company) in which the Company has at least a 50 percent interest, either directly or indirectly.
“Ten Percent Owner” means an employee who owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10 percent of the combined voting power of all classes of stock of the Company or any parent or subsidiary corporation.
“Unrestricted Stock Award” means an Award of shares of Stock free of any restrictions.
SECTION 2. ToADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE AWARDS
A.Administration of Plan. The Plan shall be administered by the Administrator.
B.Powers of Administrator. The Administrator shall have the power and authority to grant Awards consistent with the terms of the Plan, including the power and authority:
i.to select the individuals to whom Awards may from time to time be granted;
ii.to determine the time or times of grant, and the extent, if any, of Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Unrestricted Stock Awards, Cash-Based Awards, and Dividend Equivalent Rights, or any combination of the foregoing, granted to any one or more grantees;
iii.to determine the number of shares of Stock to be covered by any Award;
iv.to determine and modify from time to time the terms and conditions, including restrictions, not inconsistent with the terms of the Plan, of any Award, which terms and conditions may differ among individual Awards and grantees, and to approve the advisory resolutionforms of Award Certificates;
v.to accelerate at any time the exercisability or vesting of all or any portion of any Award;
vi.subject to the provisions of Section 5(c), to extend at any time the period in which Stock Options may be exercised; and
vii.at any time to adopt, alter and repeal such rules, guidelines and practices for administration of the Plan and for its own acts and proceedings as it shall deem advisable; to interpret the terms and provisions of the Plan and any Award (including related written instruments); to make all determinations it deems advisable for the administration of the Plan; to decide all disputes arising in
48
connection with the Plan; and to otherwise supervise the administration of the Plan.
All decisions and interpretations of the Administrator shall be binding on all persons, including the Company and Plan grantees.
C.Delegation of Authority to Grant Awards. Subject to applicable law, the Administrator, in its discretion, may delegate to a committee consisting of one or more officers of the Company including the Chief Executive Officer of the Company all or part of the Administrator’s authority and duties with respect to the granting of Awards to individuals who are (i) not subject to the reporting and other provisions of Section 16 of the Exchange Act and (ii) not members of the delegated committee. Any such delegation by the Administrator shall include a limitation as to the amount of Stock underlying Awards that may be granted during the period of the delegation and shall contain guidelines as to the determination of the exercise price and the vesting criteria. The Administrator may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Administrator’s delegate or delegates that were consistent with the terms of the Plan.
D.Award Certificate. Awards under the Plan shall be evidenced by Award Certificates that set forth the terms, conditions and limitations for each Award which may include, without limitation, the term of an Award and the provisions applicable in the event employment or service terminates.
E.Indemnification. Neither the Board nor the Administrator, nor any member of either or any delegate thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with the Plan, and the members of the Board and the Administrator (and any delegate thereof) shall be entitled in all cases to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including, without limitation, reasonable attorneys’ fees) arising or resulting therefrom to the fullest extent permitted by law and/or under the Company’s articles or bylaws or any directors’ and officers’ liability insurance coverage which may be in effect from time to time and/or any indemnification agreement between such individual and the Company.
F.Foreign Award Recipients. Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in other countries in which the Company and its Subsidiaries operate or have employees or other individuals eligible for Awards, the Administrator, in its sole discretion, shall have the power and authority to: (i) determine which Subsidiaries shall be covered by the Plan; (ii) determine which individuals outside the United States are eligible to participate in the Plan; (iii) modify the terms and conditions of any Award granted to individuals outside the United States to comply with applicable foreign laws; (iv) establish subplans and modify exercise procedures and other terms and procedures, to the extent the Administrator determines such actions to be necessary or advisable (and such subplans and/or modifications shall be attached to this Plan as appendices); provided, however, that no such subplans and/or modifications shall increase the share limitations contained in Section 3(a) hereof; and (v) take any action, before or afteran Award is made, that the Administrator determines to be necessary or advisable to obtain approval or comply with any local governmental regulatory exemptions or approvals. Notwithstanding the foregoing, the Administrator may not take any actions hereunder, and no Awards shall be granted, that would violate the Exchange Act or any other applicable United States securities law, the Code, or any other applicable United States governing statute or law.
SECTION 3: STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
A.Stock Issuable. The maximum number of shares of Stock reserved and available for issuance under the Plan shall be 4,400,000 shares (the “Initial Limit”), subject to adjustment as provided in this Section 3. For purposes of this limitation, the shares of Stock underlying any awards under the Plan that are forfeited, canceled, held back upon exercise of an Option or settlement of an Award to cover the exercise price or tax withholding, reacquired by the Company prior to
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vesting, satisfied without the issuance of Stock or otherwise terminated (other than by exercise) shall be added back to the shares of Stock available for issuance under the Plan and, to the extent permitted under Section 422 of the Code and the regulations promulgated thereunder, the shares of Stock that may be issued as Incentive Stock Options. In the event the Company repurchases shares of Stock on the compensationopen market, such shares shall not be added to the shares of our named executive officers 3.Stock available for issuance under the Plan. Subject to such overall limitations, shares of Stock may be issued up to such maximum number pursuant to any type or types of Award; provided, however, that no more than 1,250,000 shares of the Stock may be issued in the form of Incentive Stock Options. The shares available for issuance under the Plan may be authorized but unissued shares of Stock or shares of Stock reacquired by the Company.
B.Changes in Stock. Subject to Section 3(c) hereof, if, as a result of any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar change in the Company’s capital stock, the outstanding shares of Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company, or additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of Stock or other securities, or, if, as a result of any merger or consolidation, sale of all or substantially all of the assets of the Company, the outstanding shares of Stock are converted into or exchanged for securities of the Company or any successor entity (or a parent or subsidiary thereof), the Administrator shall make an appropriate or proportionate adjustment in (i) the maximum number of shares reserved for issuance under the Plan, including the maximum number of shares that may be issued in the form of Incentive Stock Options, (ii) the number and kind of shares or other securities subject to any then outstanding Awards under the Plan, (iii) the repurchase price, if any, per share subject to each outstanding Restricted Stock Award, and (iv) the exercise price for each share subject to any then outstanding Stock Options and Stock Appreciation Rights under the Plan, without changing the aggregate exercise price (i.e., the exercise price multiplied by the number of shares subject to Stock Options and Stock Appreciation Rights) as to which such Stock Options and Stock Appreciation Rights remain exercisable. The Administrator shall also make equitable or proportionate adjustments in the number of shares subject to outstanding Awards and the exercise price and the terms of outstanding Awards to take into consideration cash dividends paid other than in the ordinary course or any other extraordinary corporate event. The adjustment by the Administrator shall be final, binding and conclusive. No fractional shares of Stock shall be issued under the Plan resulting from any such adjustment, but the Administrator in its discretion may make a cash payment in lieu of fractional shares.
C.Mergers and Other Transactions. In the case of and subject to the consummation of a Sale Event, the parties thereto may cause the assumption or continuation of Awards theretofore granted by the successor entity, or the substitution of such Awards with new Awards of the successor entity or parent thereof, with appropriate adjustment as to the number and kind of shares and, if appropriate, the per share exercise prices, as such parties shall agree. To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firmextent the parties to such Sale Event do not provide for the fiscalassumption, continuation or substitution of Awards, upon the effective time of the Sale Event, the Plan and all outstanding Awards granted hereunder shall terminate. In such case, except as may be otherwise provided in the relevant Award Certificate, all Options and Stock Appreciation Rights with time-based vesting conditions or restrictions that are not vested and/or exercisable immediately prior to the effective time of the Sale Event shall become fully vested and exercisable as of the effective time of the Sale Event, all other Awards with time-based vesting, conditions or restrictions shall become fully vested and nonforfeitable as of the effective time of the Sale Event, and all Awards with conditions and restrictions relating to the attainment of performance goals may become vested and nonforfeitable in connection with a Sale Event in the Administrator’s discretion or to the extent specified in the relevant Award Certificate. In the event of such termination, (i) the Company shall have the option (in its sole discretion) to make or provide for a payment, in cash or in kind, to the grantees holding Options
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and Stock Appreciation Rights, in exchange for the cancellation thereof, in an amount equal to the difference between (A) the Sale Price multiplied by the number of shares of Stock subject to outstanding Options and Stock Appreciation Rights (to the extent then exercisable at prices not in excess of the Sale Price) and (B) the aggregate exercise price of all such outstanding Options and Stock Appreciation Rights (provided that, in the case of an Option or Stock Appreciation Right with an exercise price equal to or greater than the Sale Price, such Option or Stock Appreciation Right shall be cancelled for no consideration); or (ii) each grantee shall be permitted, within a specified period of time prior to the consummation of the Sale Event as determined by the Administrator, to exercise all outstanding Options and Stock Appreciation Rights (to the extent then exercisable) held by such grantee. The Company shall also have the option (in its sole discretion) to make or provide for a payment, in cash or in kind, to the grantees holding other Awards in an amount equal to the Sale Price multiplied by the number of vested shares of Stock under such Awards.
D.Maximum Awards to Non-Employee Directors. Notwithstanding anything to the contrary in this Plan, the value of all Awards awarded under this Plan and all other cash compensation paid by the Company to any Non-Employee Director in any calendar year ending December 31, 2017 NOTE:shall not exceed $750,000. For the purpose of this limitation, the value of any Award shall be its grant date fair value, as determined in accordance with ASC 718 or successor provision but excluding the impact of estimated forfeitures related to service-based vesting provisions.
E.Effect of Awards. The proxiesgrant of any full value Award (i.e., an Award other than an Option or a Stock Appreciation Right) shall be deemed, for purposes of determining the number of shares of Stock available for issuance under Section 3(a), as an Award of 1 share of Stock for each such share of Stock actually subject to the Award. The grant of an Option or a Stock Appreciation Right shall be deemed, for purposes of determining the number of shares of Stock available for issuance under Section 3(a), as an Award for one share of Stock for each such share of Stock actually subject to the Award. Any forfeitures, cancellations or other terminations (other than by exercise) of such Awards shall be returned to the reserved pool of shares of Stock under the Plan in the same manner.
F.Minimum Vesting Period. The vesting period for each Award granted under the Plan must be at least equal to the Minimum Vesting Period; provided, however, nothing in this Section 3(f) shall limit the Administrator’s authority to accelerate the vesting of Awards as set forth in Section 2(b)(v) above; and, provided further, notwithstanding the foregoing, up to 5% of the shares of Stock authorized for issuance under the Plan may be utilized for Unrestricted Stock Awards or other Awards with a vesting period that is less than the Minimum Vesting Period (each such Award, an “Excepted Award”). Notwithstanding the foregoing, in addition to Excepted Awards, the Administrator may grant Awards that vest (or permit previously granted Awards to vest) within the Minimum Vesting Period (i) if such Awards are authorizedgranted as substitute Awards in replacement of other Awards (or awards previously granted by an entity being acquired (or assets of which are being acquired)) that were scheduled to votevest within the Minimum Vesting Period or (ii) if such Awards are being granted in connection with an elective deferral of cash compensation that, absent a deferral election, otherwise would have been paid to the grantee within the Minimum Vesting Period.
SECTION 4. ELIGIBILITY
Grantees under the Plan will be such employees, Non-Employee Directors or Consultants of the Company and its Affiliates as are selected from time to time by the Administrator in its sole discretion; provided that Awards may not be granted to employees, Directors or Consultants who are providing services only to any “parent” of the Company, as such term is defined in Rule 405 of the Act, unless (i) the stock underlying the Awards is treated as “service recipient stock” under Section 409A or (ii) the Company has determined that such Awards are exempt from or otherwise comply with Section 409A.
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SECTION 5. STOCK OPTIONS
A.Award of Stock Options. The Administrator may grant Stock Options under the Plan. Any Stock Option granted under the Plan shall be in such form as the Administrator may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock Options or Non-Qualified Stock Options. Incentive Stock Options may be granted only to employees of the Company or any Subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f) of the Code. To the extent that any Option does not qualify as an Incentive Stock Option, it shall be deemed a Non-Qualified Stock Option.
Stock Options granted pursuant to this Section 5 shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable. If the Administrator so determines, Stock Options may be granted in lieu of cash compensation at the optionee’s election, subject to such terms and conditions as the Administrator may establish.
B.Exercise Price. The exercise price per share for the Stock covered by a Stock Option granted pursuant to this Section 5 shall be determined by the Administrator at the time of grant but shall not be less than 100 percent of the Fair Market Value on the date of grant. In the case of an Incentive Stock Option that is granted to a Ten Percent Owner, the exercise price of such Incentive Stock Option shall be not less than 110 percent of the Fair Market Value on the grant date. Notwithstanding the foregoing, Stock Options may be granted with an exercise price per share that is less than 100 percent of the Fair Market Value on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code.
C.Option Term. The term of each Stock Option shall be fixed by the Administrator, but no Stock Option shall be exercisable more than ten years after the date the Stock Option is granted. In the case of an Incentive Stock Option that is granted to a Ten Percent Owner, the term of such Stock Option shall be no more than five years from the date of grant.
D.Exercisability; Rights of a Stockholder. Stock Options shall become exercisable at such time or times, whether or not in installments, as shall be determined by the Administrator at or after the grant date. The Administrator may at any time accelerate the exercisability of all or any portion of any Stock Option. An optionee shall have the rights of a stockholder only as to shares acquired upon the exercise of a Stock Option and not as to unexercised Stock Options.
E.Method of Exercise. Stock Options may be exercised in whole or in part, by giving written or electronic notice of exercise to the Company, specifying the number of shares to be purchased. Payment of the purchase price may be made by one or more of the following methods except to the extent otherwise provided in the Award Certificate:
i.In cash, by certified or bank check or other instrument acceptable to the Administrator;
ii.Through the delivery (or attestation to the ownership following such procedures as the Company may prescribe) of shares of Stock that are not then subject to restrictions under any Company plan. Such surrendered shares shall be valued at Fair Market Value on the exercise date;
iii.By the optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company for the purchase price; provided that in the event the optionee chooses to pay the purchase price as so provided, the optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other
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agreements as the Company shall prescribe as a condition of such payment procedure; or
iv.With respect to Stock Options that are not Incentive Stock Options, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price.
Payment instruments will be received subject to collection. The transfer to the optionee on the records of the Company or of the transfer agent of the shares of Stock to be purchased pursuant to the exercise of a Stock Option will be contingent upon receipt from the optionee (or a purchaser acting in his stead in accordance with the provisions of the Stock Option) by the Company of the full purchase price for such shares and the fulfillment of any other requirements contained in the Award Certificate or applicable provisions of laws (including the satisfaction of any withholding taxes that the Company is obligated to withhold with respect to the optionee). In the event an optionee chooses to pay the purchase price by previously-owned shares of Stock through the attestation method, the number of shares of Stock transferred to the optionee upon the exercise of the Stock Option shall be net of the number of attested shares. In the event that the Company establishes, for itself or using the services of a third party, an automated system for the exercise of Stock Options, such as a system using an internet website or interactive voice response, then the paperless exercise of Stock Options may be permitted through the use of such an automated system.
F.Annual Limit on Incentive Stock Options. To the extent required for “incentive stock option” treatment under Section 422 of the Code, the aggregate Fair Market Value (determined as of the time of grant) of the shares of Stock with respect to which Incentive Stock Options granted under this Plan and any other plan of the Company or its parent and subsidiary corporations become exercisable for the first time by an optionee during any calendar year shall not exceed $100,000. To the extent that any Stock Option exceeds this limit, it shall constitute a Non-Qualified Stock Option.
SECTION 6. STOCK APPRECIATION RIGHTS
A.Award of Stock Appreciation Rights. The Administrator may grant Stock Appreciation Rights under the Plan. A Stock Appreciation Right is an Award entitling the recipient to receive shares of Stock (or cash, to the extent explicitly provided for in the applicable Award Certificate) having a value equal to the excess of the Fair Market Value of a share of Stock on the date of exercise over the exercise price of the Stock Appreciation Right multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised.
B.Exercise Price of Stock Appreciation Rights. The exercise price of a Stock Appreciation Right shall not be less than 100 percent of the Fair Market Value of the Stock on the date of grant.
C.Grant and Exercise of Stock Appreciation Rights. Stock Appreciation Rights may be granted by the Administrator independently of any Stock Option granted pursuant to Section 5 of the Plan.
D.Terms and Conditions of Stock Appreciation Rights. Stock Appreciation Rights shall be subject to such terms and conditions as shall be determined on the date of grant by the Administrator. The term of a Stock Appreciation Right may not exceed ten years. The terms and conditions of each such Award shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees.
SECTION 7. RESTRICTED STOCK AWARDS
A.Nature of Restricted Stock Awards. The Administrator may grant Restricted Stock Awards under the Plan. A Restricted Stock Award is any Award of Restricted Shares subject to such restrictions and conditions as the Administrator may determine at the time of grant. Conditions
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may be based on continuing employment (or other Service Relationship) and/or achievement of pre-established performance goals and objectives.
B.Rights as a Stockholder. Upon the grant of the Restricted Stock Award and payment of any applicable purchase price, a grantee shall have the rights of a stockholder with respect to the voting of the Restricted Shares and receipt of dividends; provided that any dividends paid by the Company during the vesting period shall accrue and shall not be paid to the grantee until and only to the extent the Restricted Stock Award vests. Unless the Administrator shall otherwise determine, (i) uncertificated Restricted Shares shall be accompanied by a notation on the records of the Company or the transfer agent to the effect that they are subject to forfeiture until such Restricted Shares are vested as provided in Section 7(d) below, and (ii) certificated Restricted Shares shall remain in the possession of the Company until such Restricted Shares are vested as provided in Section 7(d) below, and the grantee shall be required, as a condition of the grant, to deliver to the Company such instruments of transfer as the Administrator may prescribe.
C.Restrictions. Restricted Shares may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as specifically provided herein or in the Restricted Stock Award Certificate. Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 16 below, in writing after the Award is issued, if a grantee’s employment (or other Service Relationship) with the Company and its Subsidiaries terminates for any reason, any Restricted Shares that have not vested at the time of termination shall automatically and without any requirement of notice to such grantee from or other action by or on behalf of, the Company be deemed to have been reacquired by the Company at its original purchase price (if any) from such grantee or such grantee’s legal representative simultaneously with such termination of employment (or other Service Relationship), and thereafter shall cease to represent any ownership of the Company by the grantee or rights of the grantee as a stockholder. Following such deemed reacquisition of Restricted Shares that are represented by physical certificates, a grantee shall surrender such certificates to the Company upon request without consideration.
D.Vesting of Restricted Shares. The Administrator at the time of grant shall specify the date or dates and/or the attainment of pre-established performance goals, objectives and other conditions on which the non-transferability of the Restricted Shares and the Company’s right of repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or the attainment of such pre-established performance goals, objectives and other conditions, the shares on which all restrictions have lapsed shall no longer be Restricted Shares and shall be deemed “vested.” Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 16 below, in writing after the Award is issued, a grantee’s rights in any shares of Restricted Stock that have not vested shall automatically terminate upon the grantee’s termination of employment (or other service relationship) with the Company and its Subsidiaries and such shares shall be subject to the provisions of Section 7(c) above.
SECTION 8. RESTRICTED STOCK UNITS
A.Nature of Restricted Stock Units. The Administrator may grant Restricted Stock Units under the Plan. A Restricted Stock Unit is an Award of stock units that may be settled in shares of Stock (or cash, to the extent explicitly provided for in the Award Certificate) upon the satisfaction of such restrictions and conditions at the time of grant. Conditions may be based on continuing employment (or other Service Relationship) and/or achievement of pre-established performance goals and objectives. The terms and conditions of each such Award shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees. Except in the case of Restricted Stock Units with a deferred settlement date that complies with Section 409A, at the end of the vesting period, the Restricted Stock Units, to the extent vested, shall be settled in the form of shares of Stock. Restricted Stock Units with deferred settlement dates are subject to Section 409A and shall contain such additional terms and conditions as the
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Administrator shall determine in its sole discretion in order to comply with the requirements of Section 409A.
B.Election to Receive Restricted Stock Units in Lieu of Compensation. The Administrator may, in its sole discretion, permit a grantee to elect to receive a portion of future cash compensation otherwise due to such grantee in the form of an award of Restricted Stock Units. Any such election shall be made in writing and shall be delivered to the Company no later than the date specified by the Administrator and in accordance with Section 409A and such other rules and procedures established by the Administrator. Any such future cash compensation that the grantee elects to defer shall be converted to a fixed number of Restricted Stock Units based on the Fair Market Value of Stock on the date the compensation would otherwise have been paid to the grantee if such payment had not been deferred as provided herein. The Administrator shall have the sole right to determine whether and under what circumstances to permit such elections and to impose such limitations and other terms and conditions thereon as the Administrator deems appropriate. Any Restricted Stock Units that are elected to be received in lieu of cash compensation shall be fully vested, unless otherwise provided in the Award Certificate.
C.Rights as a Stockholder. A grantee shall have the rights as a stockholder only as to shares of Stock acquired by the grantee upon settlement of Restricted Stock Units; provided, however, that the grantee may be credited with Dividend Equivalent Rights with respect to the stock units underlying his Restricted Stock Units, subject to the provisions of Section 11 and such terms and conditions as the Administrator may determine.
D.Termination. Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 16 below, in writing after the Award is issued, a grantee’s right in all Restricted Stock Units that have not vested shall automatically terminate upon the grantee’s termination of employment (or cessation of Service Relationship) with the Company and its Subsidiaries for any reason.
SECTION 9. UNRESTRICTED STOCK AWARDS
Grant or Sale of Unrestricted Stock. The Administrator may grant (or sell at par value or such higher purchase price determined by the Administrator) an Unrestricted Stock Award under the Plan. An Unrestricted Stock Award is an Award pursuant to which the grantee may receive shares of Stock free of any restrictions under the Plan. Unrestricted Stock Awards may be granted in respect of past services or other valid consideration, or in lieu of cash compensation due to such grantee.
SECTION 10. CASH-BASED AWARDS
Grant of Cash-Based Awards. The Administrator may grant Cash-Based Awards under the Plan. A Cash-Based Award is an Award that entitles the grantee to a payment in cash upon the attainment of specified performance goals. The Administrator shall determine the maximum duration of the Cash-Based Award, the amount of cash to which the Cash-Based Award pertains, the conditions upon which the Cash-Based Award shall become vested or payable, and such other provisions as the Administrator shall determine. Each Cash-Based Award shall specify a cash-denominated payment amount, formula or payment ranges as determined by the Administrator. Payment, if any, with respect to a Cash-Based Award shall be made in accordance with the terms of the Award and may be made in cash.
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SECTION 11. DIVIDEND EQUIVALENT RIGHTS
A.Dividend Equivalent Rights. The Administrator may grant Dividend Equivalent Rights under the Plan. A Dividend Equivalent Right is an Award entitling the grantee to receive credits based on cash dividends that would have been paid on the shares of Stock specified in the Dividend Equivalent Right (or other Award to which it relates) if such shares had been issued to the grantee. A Dividend Equivalent Right may be granted hereunder to any grantee as a component of an award of Restricted Stock Units or as a freestanding award. The terms and conditions of Dividend Equivalent Rights shall be specified in the Award Certificate. Dividend equivalents credited to the holder of a Dividend Equivalent Right may be paid currently or may be deemed to be reinvested in additional shares of Stock, which may thereafter accrue additional equivalents. Any such reinvestment shall be at Fair Market Value on the date of reinvestment or such other price as may then apply under a dividend reinvestment plan sponsored by the Company, if any. Dividend Equivalent Rights may be settled in cash or shares of Stock or a combination thereof, in a single installment or installments. A Dividend Equivalent Right granted as a component of an Award of Restricted Stock Units shall provide that such Dividend Equivalent Right shall be settled only upon settlement or payment of, or lapse of restrictions on, such other businessAward, and that such Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions as such other Award. Notwithstanding the foregoing, Dividend Equivalents shall at all times be subject to restrictions and risk of forfeiture to the same extent as the underlying Award and shall not be paid unless and until the underlying Award vests.
B.Termination. Except as may properly come beforeotherwise be provided by the meetingAdministrator either in the Award Certificate or, subject to Section 16 below, in writing after the Award is issued, a grantee’s rights in all Dividend Equivalent Rights shall automatically terminate upon the grantee’s termination of employment (or cessation of Service Relationship) with the Company and its Subsidiaries for any reason.
SECTION 12. TRANSFERABILITY OF AWARDS
A.Transferability. Except as provided in Section 12(b) below, during a grantee’s lifetime, his or her Awards shall be exercisable only by the grantee, or by the grantee’s legal representative or guardian in the event of the grantee’s incapacity. No Awards shall be sold, assigned, transferred or otherwise encumbered or disposed of by a grantee other than by will or by the laws of descent and distribution or pursuant to a domestic relations order. No Awards shall be subject, in whole or in part, to attachment, execution, or levy of any kind, and any purported transfer in violation hereof shall be null and void.
B.Administrator Action. Notwithstanding Section 12(a), the Administrator, in its discretion, may provide either in the Award Certificate regarding a given Award or by subsequent written approval that the grantee (who is an employee or director) may transfer his or her Non-Qualified Stock Options to his or her immediate family members, to trusts for the benefit of such family members, or to partnerships in which such family members are the only partners, provided that the transferee agrees in writing with the Company to be bound by all of the terms and conditions of this Plan and the applicable Award. In no event may an Award be transferred by a grantee for value.
C.Family Member. For purposes of Section 12(b), “family member” shall mean a grantee’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the grantee’s household (other than a tenant of the grantee), a trust in which these persons (or the grantee) have more than 50 percent of the beneficial interest, a foundation in which these persons (or the grantee) control the management of assets, and any other entity in which these persons (or the grantee) own more than 50 percent of the voting interests.
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D.Designation of Beneficiary. To the extent permitted by the Company, each grantee to whom an Award has been made under the Plan may designate a beneficiary or beneficiaries to exercise any Award or receive any payment under any Award payable on or after the grantee’s death. Any such designation shall be on a form provided for that purpose by the Administrator and shall not be effective until received by the Administrator. If no beneficiary has been designated by a deceased grantee, or if the designated beneficiaries have predeceased the grantee, the beneficiary shall be the grantee’s estate.
SECTION 13. TAX WITHHOLDING
A.Payment by Grantee. Each grantee shall, no later than the date as of which the value of an Award or of any Stock or other amounts received thereunder first becomes includable in the gross income of the grantee for Federal income tax purposes, pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of, any Federal, state, or local taxes of any kind required by law to be withheld by the Company with respect to such income. The Company and its Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the grantee. The Company’s obligation to deliver evidence of book entry (or stock certificates) to any grantee is subject to and conditioned on tax withholding obligations being satisfied by the grantee.
B.Payment in Stock. The Administrator may require the Company’s tax withholding obligation to be satisfied, in whole or in part, by the Company withholding from shares of Stock to be issued pursuant to any Award a number of shares with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the withholding amount due; provided, however, that the amount withheld does not exceed the maximum statutory tax rate or such lesser amount as is necessary to avoid liability accounting treatment. For purposes of share withholding, the Fair Market Value of withheld shares shall be determined in the same manner as the value of Stock includible in income of the grantees. The Administrator may also require the Company’s tax withholding obligation to be satisfied, in whole or in part, by an arrangement whereby a certain number of shares of Stock issued pursuant to any Award are immediately sold and proceeds from such sale are remitted to the Company in an amount that would satisfy the withholding amount due.
SECTION 14. SECTION 409A AWARDS
Awards are intended to be exempt from Section 409A to the greatest extent possible and to otherwise comply with Section 409A. The Plan and all Awards shall be interpreted in accordance with such intent. To the extent that any Award is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A (a “409A Award”), the Award shall be subject to such additional rules and requirements as specified by the Administrator from time to time in order to comply with Section 409A. In this regard, if any amount under a 409A Award is payable upon a “separation from service” (within the meaning of Section 409A) to a grantee who is then considered a “specified employee” (within the meaning of Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the grantee’s separation from service, or (ii) the grantee’s death, but only to the extent such delay is necessary to prevent such payment from being subject to interest, penalties and/or additional tax imposed pursuant to Section 409A. Further, the settlement of any 409A Award may not be accelerated except to the extent permitted by Section 409A.
SECTION 15. TERMINATION OF SERVICE RELATIONSHIP, TRANSFER, LEAVE OF ABSENCE, ETC.
A.Termination of Service Relationship. If the grantee’s Service Relationship is with an Affiliate and such Affiliate ceases to be an Affiliate, the grantee shall be deemed to have terminated his or her Service Relationship for purposes of the Plan.
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B.For purposes of the Plan, the following events shall not be deemed a termination of a Service Relationship:
i.a transfer to the employment of the Company from an Affiliate or from the Company to an Affiliate, or from one Affiliate to another; or
ii.an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the employee’s right to re-employment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Administrator otherwise so provides in writing.
SECTION 16. AMENDMENTS AND TERMINATION
The Board may, at any time, amend or discontinue the Plan and the Administrator may, at any time, amend or cancel any outstanding Award for the purpose of satisfying changes in law or for any other lawful purpose, but no such action shall materially and adversely affect rights under any outstanding Award without the holder’s consent. Except as provided in Section 3(b) or 3(c), without prior stockholder approval, in no event may the Administrator exercise its discretion to reduce the exercise price of outstanding Stock Options or Stock Appreciation Rights or effect repricing through cancellation and re-grants or cancellation of Stock Options or Stock Appreciation Rights in exchange for cash or other Awards. To the extent required under the rules of any securities exchange or market system on which the Stock is listed, to the extent determined by the Administrator to be required by the Code to ensure that Incentive Stock Options granted under the Plan are qualified under Section 422 of the Code, Plan amendments shall be subject to approval by Company stockholders. Nothing in this Section 16 shall limit the Administrator’s authority to take any action permitted pursuant to Section 3(b) or 3(c).
SECTION 17. STATUS OF PLAN
With respect to the portion of any Award that has not been exercised and any payments in cash, Stock or other consideration not received by a grantee, a grantee shall have no rights greater than those of a general creditor of the Company unless the Administrator shall otherwise expressly determine in connection with any Award or Awards. In its sole discretion, the Administrator may authorize the creation of trusts or other arrangements to meet the Company’s obligations to deliver Stock or make payments with respect to Awards hereunder, provided that the existence of such trusts or other arrangements is consistent with the foregoing sentence.
SECTION 18. GENERAL PROVISIONS
A.No Distribution. The Administrator may require each person acquiring Stock pursuant to an Award to represent to and agree with the Company in writing that such person is acquiring the shares without a view to distribution thereof.
B.Issuance of Stock. To the extent certificated, stock certificates to grantees under this Plan shall be deemed delivered for all purposes when the Company or a stock transfer agent of the Company shall have mailed such certificates in the United States mail, addressed to the grantee, at the grantee’s last known address on file with the Company. Uncertificated Stock shall be deemed delivered for all purposes when the Company or a Stock transfer agent of the Company shall have given to the grantee by electronic mail (with proof of receipt) or by United States mail, addressed to the grantee, at the grantee’s last known address on file with the Company, notice of issuance and recorded the issuance in its records (which may include electronic “book entry” records). Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any evidence of book entry or certificates evidencing shares of Stock pursuant to the exercise or settlement of any Award, unless and until the Administrator has determined, with advice of counsel (to the extent the Administrator deems such advice necessary or advisable), that the issuance and delivery is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the shares of Stock are
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listed, quoted or traded. Any Stock issued pursuant to the Plan shall be subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with federal, state or foreign jurisdiction, securities or other laws, rules and quotation system on which the Stock is listed, quoted or traded. The Administrator may place legends on any Stock certificate or notations on any book entry to reference restrictions applicable to the Stock. In addition to the terms and conditions provided herein, the Administrator may require that an individual make such reasonable covenants, agreements, and representations as the Administrator, in its discretion, deems necessary or advisable in order to comply with any such laws, regulations, or requirements. The Administrator shall have the right to require any individual to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation, as may be imposed in the discretion of the Administrator.
C.Stockholder Rights. Until Stock is deemed delivered in accordance with Section 18(b), no right to vote or receive dividends 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. Ifrights of a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature (Joint Owners) Date Signature [PLEASE SIGN WITHIN BOX] Date V.1.2
Important Notice Regarding the Availabilitystockholder will exist with respect to shares of Proxy Materials for the Annual Meeting of StockholdersStock to be heldissued in connection with an Award, notwithstanding the exercise of a Stock Option or any other action by the grantee with respect to an Award.
D.Other Compensation Arrangements; No Employment Rights. Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, including trusts, and such arrangements may be either generally applicable or applicable only in specific cases. The adoption of this Plan and the grant of Awards do not confer upon any employee any right to continued employment with the Company or any Subsidiary.
E.Trading Policy Restrictions. Option exercises and other Awards under the Plan shall be subject to the Company’s insider trading policies and procedures, as in effect from time to time.
F.Clawback Policy. Awards under the Plan shall be subject to the Company’s clawback policy, as in effect from time to time.
SECTION 19. EFFECTIVE DATE OF PLAN
This Plan shall become effective upon stockholder approval in accordance with applicable state law, the Company’s bylaws and articles of incorporation, and applicable stock exchange rules. No grants of Stock Options and other Awards may be made hereunder after the tenth anniversary of the Effective Date and no grants of Incentive Stock Options may be made hereunder after the tenth anniversary of the date the Plan is approved by the Board.
SECTION 20. GOVERNING LAW
This Plan and all Awards and actions taken thereunder shall be governed by, and construed in accordance with, the General Corporation Law of the State of Delaware as to matters within the scope thereof, and as to all other matters shall be governed by and construed in accordance with the internal laws of the State of Delaware, applied without regard to conflict of law principles.
DATE APPROVED BY BOARD OF DIRECTORS: April 17, 2017: The Notice and Proxy Statement and our Annual Report are available at www.proxyvote.com. E18451-P85845 13, 2022
DATE APPROVED BY STOCKHOLDERS: May 26, 2022
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FIRST AMENDMENT
TO
ESPERION THERAPEUTICS, INC. Annual Meeting of Stockholders April 17, 2017 8:00 AM Eastern Time This proxy
2022 Stock Option and Incentive Plan
C. The Esperion Therapeutics, Inc. 2022 Stock Option and Incentive Plan (as amended, the “Plan”) is solicited on behalf ofhereby amended by the Board of Directors of Esperion Therapeutics, Inc. The undersigned hereby appoints Tim M. Mayleben and Richard B. Bartram as proxies and attorneys-in-fact(the “Company”), subject to approval of the undersigned, each withCompany’s stockholders, to, among other things, increase the power to act withoutaggregate number of shares authorized for issuance under the other and with the power of substitution, and hereby authorizes them to represent and vote all thePlan by 6,250,000 shares of common stock, par value $0.001 per share, of the Company:
1. The first sentence of Section 3 of the Plan is hereby amended and restated in its entirety as follows:
The maximum number of shares of Stock reserved and available for issuance under the Plan shall be 10,650,000 shares (the “Initial Limit”), subject to adjustment as provided in this Section 3.
D. Except as amended herein, the Plan is confirmed in all other respects.
Approved by the Board of Directors on April 1, 2023.
Approved by the Company’s stockholders on June 15, 2023.
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SECOND AMENDMENT
TO
ESPERION THERAPEUTICS, INC.
2022 STOCK OPTION AND INCENTIVE PLAN
The Esperion Therapeutics, Inc. 2022 Stock Option and Incentive Plan (as amended, the “Plan”) is hereby amended by the Board of Directors (the “Board”) of Esperion Therapeutics, Inc., a Delaware corporation (the “Company”), subject to approval of the Company’s stockholders, to, among other things, increase the aggregate number of shares authorized for issuance under the Plan by 6,250,000 shares of common stock, par value $0.001 per share, of the Company (“Common Stock”):
1. The first sentence of Section 3 of the Plan is hereby amended and restated in its entirety as follows:
“The maximum number of shares of Stock reserved and available for issuance under the Plan shall be 16,900,000 shares (the “Initial Limit”), subject to adjustment as provided in this Section 3.”
2. This Second Amendment to the Plan shall become effective upon the date that it is approved by the Company’s stockholders in accordance with applicable laws and regulations at an annual or special meeting held within twelve months of the date it is adopted by the Board.
3. Except as expressly amended hereby, all other provisions of the Plan shall remain unchanged.
Adopted by the Board on April 1, 2024.
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ANNEX B
ESPERION THERAPEUTICS, INC.
2020 EMPLOYEE STOCK PURCHASE PLAN
The purpose of the Esperion Therapeutics, Inc. 2020 Employee Stock Purchase Plan ("the Plan") is to provide eligible employees of Esperion Therapeutics, Inc. (the "Company") standingand each Designated Subsidiary (as defined in Section 11) with opportunities to purchase shares of the Company's common stock, par value $0.001 per share (the "Common Stock"). Eight-hundred and twenty-five thousand (825,000) shares of Common Stock in the aggregate have been approved and reserved for this purpose. The Plan is intended to constitute an "employee stock purchase plan" within the meaning of Section 423(b) of the Internal Revenue Code of 1986, as amended (the "Code"), and shall be interpreted in accordance with that intent.
1. Administration. The Plan will be administered by the person or persons (the "Administrator") appointed by the Company's Board of Directors (the "Board") for such purpose. The Administrator has authority at any time to: (i) adopt, alter and repeal such rules, guidelines and practices for the administration of the Plan and for its own acts and proceedings as it shall deem advisable; (ii) interpret the terms and provisions of the Plan; (iii) make all determinations it deems advisable for the administration of the Plan; (iv) decide all disputes arising in connection with the Plan; and (v) otherwise supervise the administration of the Plan. All interpretations and decisions of the Administrator shall be binding on all persons, including the Company and the Participants. No member of the Board or individual exercising administrative authority with respect to the Plan shall be liable for any action or determination made in good faith with respect to the Plan or any option granted hereunder.
2. Offerings. The Company will make one or more offerings to eligible employees to purchase Common Stock under the Plan ("Offerings"). Unless otherwise determined by the Administrator, an Offering will begin on the first business day occurring on or after each September 1 and March 1 and will end on the last business day occurring on or before the following February 28 or February 29 on a leap year and August 31, respectively. The Administrator may, in its discretion, designate a different period for any Offering, provided that no Offering shall exceed 27 months in duration or overlap any other Offering.
3. Eligibility. All individuals classified as employees on the payroll records of the Company and each Designated Subsidiary are eligible to participate in any one or more of the Offerings under the Plan, provided that as of the first day of the applicable Offering (the "Offering Date") they are customarily employed by the Company or a Designated Subsidiary for more than 20 hours a week and have completed at least six months of employment. Notwithstanding any other provision herein, individuals who are not contemporaneously classified as employees of the Company or a Designated Subsidiary for purposes of the Company's or applicable Designated Subsidiary's payroll system are not considered to be eligible employees of the Company or any Designated Subsidiary and shall not be eligible to participate in the Plan. In the event any such individuals are reclassified as employees of the Company or a Designated Subsidiary for any purpose, including, without limitation, common law or statutory employees, by any action of any third party, including, without limitation, any government agency, or as a result of any private lawsuit, action or administrative proceeding, such individuals shall, notwithstanding such reclassification, remain ineligible for participation. Notwithstanding the foregoing, the exclusive means for individuals who are not contemporaneously classified as employees of the
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Company or a Designated Subsidiary on the Company's or Designated Subsidiary's payroll system to become eligible to participate in this Plan is through an amendment to this Plan, duly executed by the Company, which specifically renders such individuals eligible to participate herein.
4. Participation.
(a) Participants. An eligible employee who is not a Participant in any prior Offering may participate in a subsequent Offering by submitting an enrollment form to his or her appropriate payroll location at least 15 business days before the Offering Date (or by such other deadline as shall be established by the Administrator for the Offering).
(b) Enrollment. The enrollment form will (a) state a whole percentage to be deducted from an eligible employee's Compensation (as defined in Section 11) per pay period, (b) authorize the purchase of Common Stock in each Offering in accordance with the terms of the Plan and (c) specify the exact name or names in which shares of Common Stock purchased for such individual are to be issued pursuant to Section 10. An employee who does not enroll in accordance with these procedures will be deemed to have waived the right to participate. Unless a Participant files a new enrollment form or withdraws from the Plan, such Participant's deductions and purchases will continue at the same percentage of Compensation for future Offerings, provided he or she remains eligible.
(c) Notwithstanding the foregoing, participation in the Plan will neither be permitted nor be denied contrary to the requirements of the Code.
5. Employee Contributions. Each eligible employee may authorize payroll deductions at a minimum of 1 percent up to a maximum of 10 percent of such employee's Compensation for each pay period. The Company will maintain book accounts showing the amount of payroll deductions made by each Participant for each Offering. No interest will accrue or be paid on payroll deductions.
6. Deduction Changes. Except as may be determined by the Administrator in advance of an Offering, a Participant may not increase or decrease his or her payroll deduction during any Offering, but may increase or decrease his or her payroll deduction with respect to the next Offering (subject to the limitations of Section 5) by filing a new enrollment form at least 15 business days before the next Offering Date (or by such other deadline as shall be established by the Administrator for the Offering). The Administrator may, in advance of any Offering, establish rules permitting a Participant to increase, decrease or terminate his or her payroll deduction during an Offering.
7. Withdrawal. A Participant may withdraw from participation in the Plan by delivering a written notice of withdrawal to his or her appropriate payroll location. The Participant's withdrawal will be effective as of the next business day. Following a Participant's withdrawal, the Company will promptly refund such individual's entire account balance under the Plan to him or her (after payment for any Common Stock purchased before the effective date of withdrawal). Partial withdrawals are not permitted. Such an employee may not begin participation again during the remainder of the Offering, but may enroll in a subsequent Offering in accordance with Section 4.
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8. Grant of Options. On each Offering Date, the Company will grant to each eligible employee who is then a Participant in the Plan an option ("Option") to purchase on the last day of such Offering (the "Exercise Date"), at the Option Price hereinafter provided for, the lowest of (a) a number of shares of Common Stock determined by dividing such Participant's accumulated payroll deductions on such Exercise Date by the lower of (i) 85 percent of the Fair Market Value of the Common Stock on the Offering Date, or (ii) 85 percent of the Fair Market Value of the Common Stock on the Exercise Date, (b) a number of shares of Common Stock determined by dividing $25,000 by the Fair Market Value of the Common Stock on the Offering Date of such Offering; or (c) such other lesser maximum number of shares as shall have been established by the Administrator in advance of the Offering; provided, however, that such Option shall be subject to the limitations set forth below. Each Participant's Option shall be exercisable only to the extent of such Participant's accumulated payroll deductions on the Exercise Date. The purchase price for each share purchased under each Option (the "Option Price") will be 85 percent of the Fair Market Value of the Common Stock on the Offering Date or the Exercise Date, whichever is less.
Notwithstanding the foregoing, no Participant may be granted an option hereunder if such Participant, immediately after the option was granted, would be treated as owning stock possessing 5 percent or more of the total combined voting power or value of all classes of stock of the Company or any Parent or Subsidiary (as defined in Section 11). For purposes of the preceding sentence, the attribution rules of Section 424(d) of the Code shall apply in determining the stock ownership of a Participant, and all stock which the Participant has a contractual right to purchase shall be treated as stock owned by the Participant. In addition, no Participant may be granted an Option which permits his or her rights to purchase stock under the Plan, and any other employee stock purchase plan of the Company and its Parents and Subsidiaries, to accrue at a rate which exceeds $25,000 of the fair market value of such stock (determined on the option grant date or dates) for each calendar year in which the Option is outstanding at any time. The purpose of the limitation in the preceding sentence is to comply with Section 423(b)(8) of the Code and shall be applied taking Options into account in the order in which they were granted.
9. Exercise of Option and Purchase of Shares. Each employee who continues to be a Participant in the Plan on the Exercise Date shall be deemed to have exercised his or her Option on such date and shall acquire from the Company such number of whole shares of Common Stock reserved for the purpose of the Plan as his or her accumulated payroll deductions on such date will purchase at the Option Price, subject to any other limitations contained in the Plan. Any amount remaining in a Participant's account at the end of an Offering solely by reason of the inability to purchase a fractional share will be carried forward to the next Offering; any other balance remaining in a Participant's account at the end of an Offering will be refunded to the Participant promptly.
10. Issuance of Certificates. Certificates representing shares of Common Stock purchased under the Plan may be issued only in the name of the undersignedemployee, in the name of the employee and another person of legal age as joint tenants with rights of survivorship, or in the name of a broker authorized by the employee to be his, her or their, nominee for such purpose.
11. Definitions.
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The term "Compensation" means the amount of base pay, prior to salary reduction pursuant to Sections 125, 132(f) or 401(k) of the Code, but excluding overtime, commissions, incentive or bonus awards, allowances and reimbursements for expenses such as relocation allowances or travel expenses, income or gains on February 17, 2017,the exercise of Company stock options, and similar items.
The term "Designated Subsidiary" means any present or future Subsidiary (as defined below) that has been designated by the Board to participate in the Plan. The Board may so designate any Subsidiary, or revoke any such designation, at any time and from time to time, either before or after the Plan is approved by the stockholders.
The term "Fair Market Value of the Common Stock" on any given date means the fair market value of the Common Stock determined in good faith by the Administrator; provided, however, that if the Common Stock is admitted to quotation on the National Association of Securities Dealers Automated Quotation System ("NASDAQ"), NASDAQ Global Market or another national securities exchange, the determination shall be made by reference to the closing price on such date. If there is no closing price for such date, the determination shall be made by reference to the last date preceding such date for which there is a closing price.
The term "Parent" means a "parent corporation" with all powersrespect to the Company, as defined in Section 424(e) of the Code.
The term "Participant" means an individual who is eligible as determined in Section 3 and who has complied with the provisions of Section 4.
The term "Subsidiary" means a "subsidiary corporation" with respect to the Company, as defined in Section 424(f) of the Code.
12. Rights on Termination of Employment. If a Participant's employment terminates for any reason before the Exercise Date for any Offering, no payroll deduction will be taken from any pay due and owing to the Participant and the balance in the Participant's account will be paid to such Participant or, in the case of such Participant's death, to his or her designated beneficiary as if such Participant had withdrawn from the Plan under Section 7. An employee will be deemed to have terminated employment, for this purpose, if the corporation that employs him or her, having been a Designated Subsidiary, ceases to be a Subsidiary, or if the employee is transferred to any corporation other than the Company or a Designated Subsidiary. [Unless otherwise determined by the Administrator, a Participant whose employment transfers between Designated Subsidiaries or a Designated Subsidiary and the Company or whose employment terminates with an immediate rehire (with no break in service) by the Company or a Designated Subsidiary will not be treated as having terminated employment for purposes of participating in the Plan or an Offering.] Further, an employee will not be deemed to have terminated employment for this purpose, if the employee is on an approved leave of absence for military service or sickness or for any other purpose approved by the Company, if the employee's right to reemployment is guaranteed either by a statute or by contract or under the policy pursuant to which the undersignedleave of absence was granted or if the Administrator otherwise provides in writing.
13. Special Rules. Notwithstanding anything herein to the contrary, the Administrator may adopt special rules applicable to the employees of a particular Designated Subsidiary, whenever the Administrator
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determines that such rules are necessary or appropriate for the implementation of the Plan in a jurisdiction where such Designated Subsidiary has employees; provided that such rules are consistent with the requirements of Section 423(b) of the Code. Any special rules established pursuant to this Section 13 shall, to the extent possible, result in the employees subject to such rules having substantially the same rights as other Participants in the Plan.
14. Optionees Not Stockholders. Neither the granting of an Option to a Participant nor the deductions from his or her pay shall constitute such Participant a holder of the shares of Common Stock covered by an Option under the Plan until such shares have been purchased by and issued to him or her.
15. Rights Not Transferable. Rights under the Plan are not transferable by a Participant other than by will or the laws of descent and distribution, and are exercisable during the Participant's lifetime only by the Participant.
16. Application of Funds. All funds received or held by the Company under the Plan may be combined with other corporate funds and may be used for any corporate purpose.
17. Adjustment in Case of Changes Affecting Common Stock. In the event of a subdivision of outstanding shares of Common Stock, the payment of a dividend in Common Stock or any other change affecting the Common Stock, the number of shares approved for the Plan and the share limitation set forth in Section 8 shall be equitably or proportionately adjusted to give proper effect to such event.
18. Amendment of the Plan. The Board may at any time and from time to time amend the Plan in any respect, except that without the approval within 12 months of such Board action by the stockholders, no amendment shall be made increasing the number of shares approved for the Plan or making any other change that would possess ifrequire stockholder approval in order for the Plan, as amended, to qualify as an "employee stock purchase plan" under Section 423(b) of the Code.
19. Insufficient Shares. If the total number of shares of Common Stock that would otherwise be purchased on any Exercise Date plus the number of shares purchased under previous Offerings under the Plan exceeds the maximum number of shares issuable under the Plan, the shares then available shall be apportioned among Participants in proportion to the amount of payroll deductions accumulated on behalf of each Participant that would otherwise be used to purchase Common Stock on such Exercise Date.
20. Termination of the Plan. The Plan may be terminated at any time by the Board. Upon termination of the Plan, all amounts in the accounts of Participants shall be promptly refunded.
21. Governmental Regulations. The Company's obligation to sell and deliver Common Stock under the Plan is subject to obtaining all governmental approvals required in connection with the authorization, issuance, or sale of such stock.
22. Governing Law. This Plan and all Options and actions taken thereunder shall be governed by, and construed in accordance with, the laws of the State of Delaware, applied without regard to conflict of law principles.
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23. Issuance of Shares. Shares may be issued upon exercise of an Option from authorized but unissued Common Stock, from shares held in the treasury of the Company, or from any other proper source.
24. Tax Withholding. Participation in the Plan is subject to any minimum required tax withholding on income of the Participant in connection with the Plan. Each Participant agrees, by entering the Plan, that the Company and its Subsidiaries shall have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant, including shares issuable under the Plan.
25. Notification Upon Sale of Shares. Each Participant agrees, by entering the Plan, to give the Company prompt notice of any disposition of shares purchased under the Plan where such disposition occurs within two years after the date of grant of the Option pursuant to which such shares were purchased or within one year after the date such shares were purchased.
26. Effective Date and Approval of Shareholders. The Plan shall take effect on the later of the date it is adopted by the Board and the date it is approved by the holders of a majority of the votes cast at a meeting of stockholders at which a quorum is present ator by written consent of the 2017 Annual Meetingstockholders.
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FIRST AMENDMENT TO
ESPERION THERAPEUTICS, INC.
2020 EMPLOYEE STOCK PURCHASE PLAN
WHEREAS, Esperion Therapeutics, Inc. (the “Company”) maintains the Esperion Therapeutics, Inc. 2020 Employee Stock Purchase Plan (the “Plan”);
WHEREAS, pursuant to Section 18 of the Plan, the Company’s Board of Directors (the “Board”) may amend the Plan from time to time; and
WHEREAS, the Board has determined it is in the best interests of the Company to be held on April 17, 2017 or at any adjournment or postponement thereof. Receiptamend the Plan as described below.
NOW THEREFORE, LET IT BE RESOLVED, that effectively as of the Noticedate of this First Amendment, the Plan be amended as follows:
NOW, THEREFORE, the Plan is amended as follows:
1.The first sentence of Section 3 of the 2017 Annual MeetingPlan is deleted and hereby replaced with the following:
All individuals classified as employees on the payroll records of Stockholdersthe Company and Proxy Statementeach Designated Subsidiary are eligible to participate in any one or more of the Offerings under the Plan, provided that as of the first day of the applicable Offering (the “Offering Date”) they are customarily employed by the Company or a Designated Subsidiary for more than 20 hours a week and have completed at least three months of employment.
2.All capitalized terms used and not defined herein shall have the meanings ascribed to such terms in the Plan.
3.Except as expressly amended hereby, the Plan remains in full force and effect in accordance with its terms.
Adopted by the Board of Directors of Esperion Therapeutics , Inc.: July 31, 2020
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SECOND AMENDMENT TO
ESPERION THERAPEUTICS, INC.
2020 EMPLOYEE STOCK PURCHASE PLAN
WHEREAS, Esperion Therapeutics, Inc., a Delaware corporation (the “Company”), maintains and operates the Esperion Therapeutics, Inc. 2020 Employee Stock Purchase Plan, as amended (the “Plan”), which was previously adopted by the Board of Directors of the Company (the “Board”) and the 2016 Annual Reportstockholders of the Company in May 2020, and subsequently amended by a first amendment to the Plan adopted by the Board in July 2020;
WHEREAS, the Board believes that the number of shares of the Company’s common stock, par value $0.001 per share (“Common Stock”), remaining available for issuance under the Plan has become insufficient for the Company’s anticipated future needs under the Plan;
WHEREAS, pursuant to Section 18 of the Plan, the Board may amend the Plan from time to time, subject to certain conditions set forth therein; and
WHEREAS, the Board has determined that it is in the best interests of the Company to amend the Plan to increase the aggregate number of shares of Common Stock available for issuance under the Plan from 825,000 shares to 7,000,000 shares.
NOW THEREFORE, LET IT BE RESOLVED, that the Plan be and it is hereby acknowledged. In order for your voteamended, subject to be submitted by this proxy, you must (i) properly complete the telephone or Internet voting instructions no later than 11:59 P. M. Eastern Time on April 16, 2017 or (ii) properly complete and return this proxy card so your vote is received prior to the vote at the 2017 Annual Meeting of Stockholders of the Company. Submitting your proxy by mail, via the Internet or by telephone will not affect your right to vote in person should you decide to attend the 2017 Annual Meeting of Stockholders of the Company. This proxy, when properly executed, will be voted in the manner directed by you. If you do not give any direction, the proxy will be voted (i) "FOR" the election of each of the nominees for director; (ii) "FOR" the approval of the advisory resolution onCompany’s stockholders, in the compensationfollowing particulars:
1. Amendment of Plan to Increase Shares. By deleting the current second sentence of the Company's named executive officers; (iii) "FOR" the ratificationfirst paragraph of the appointmentPlan in its entirety and substituting the following sentence in lieu thereof:
“Six million one hundred seventy-five thousand (6,175,000) shares of Ernst & Young LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2017; (iv)Common Stock in the discretionaggregate have been approved and reserved for this purpose.”
2. Effective Date of Amendment. This Second Amendment to the Plan shall become effective upon the date that it is approved by the Company’s stockholders in accordance with applicable laws and regulations at an annual or special meeting held within twelve months of the proxies upondate it is adopted by the Board.
3. Other Provisions. Except as expressly amended hereby, all other provisions of the Plan shall remain unchanged.
All capitalized terms used and not defined herein shall have the meanings ascribed to such other matters as may properly come beforeterms in the 2017 Annual Meeting. Continued and to be signedPlan.
Adopted by the Board on reverse side V.1.2April 1, 2024
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