Robert S. Langer, Sc.D., and Joel S. Marcus, representing five of our six directors, has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors qualifies as “independent” as that term is defined under the Nasdaq rules. In making this determination, our Board of Directors considered the relationships that eachnon-employee director has with us and all other facts and circumstances our Board of Directors deemed relevant in determining their independence, including the director’s beneficial ownership of our common stock and the relationships of ournon-employee directors with certain of our significant stockholders. Board Committees
Our Board of Directors has established three standing committees: an audit committee, a compensation committee and a nominating and corporate governance committee, each of which has the composition and the responsibilities described below. In addition, from time to time, special committees may be established under the direction of our Board of Directors when necessary to address specific issues. Each of the audit committee, the compensation committee and the nominating and corporate governance committee operates pursuant to a written charter.
| | | | | | | Name
| | Audit
Committee | | Nominating
and
Corporate
Governance
Committee | | Compensation
Committee | Timothy J. Barberich
| | Chair | | | | X | Marc A. Cohen
| | | | X | | X | David L. Lucchino | | | | | | | Joel S. Marcus | | X | | Chair | Michael Huang
| | X | | X | | | Robert S. Langer, Sc.D.
| | | | X | | X | David L. Lucchino
| | | | | | | Joel S. Marcus
| | X | | Chair | | |
Audit Committee Our audit committee is responsible for, among other things: appointing, approving the compensation of, and assessing the independence of our registered public accounting firm; overseeing the work of our registered public accounting firm, including through the receipt and consideration of reports from such firm;
overseeing the work of our registered public accounting firm, including through the receipt and consideration of reports from such firm; reviewing and discussing with management and the registered public accounting firm our annual and quarterly financial statements and related disclosures; coordinating our Board of Directors’ oversight of our internal control over financial reporting, disclosure controls and procedures and Code of Business Conduct and Ethics; discussing our risk management policies; reviewing and approving or ratifying any related person transactions; pre-approving all audit andnon-audit services provided to us by our independent auditor (other than those provided pursuant to appropriatepre-approval policies established by the committee or exempt from such requirement under SEC rules); establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters, and for the confidential and anonymous submission by our employees of concerns regarding questionable accounting or auditing matters and, more generally, suspected violations of our Code of Business Conduct and Ethics; and preparing the audit committee report required by SEC rules. Our audit committee currently consists of Cynthia L. Feldmann, Timothy J. Barberich, Michael Huang and Joel S. Marcus, with Ms. Feldmann serving as chair. All members of our audit committee meet the requirements for financial literacy under the applicable Nasdaq rules and regulations. Our Board of Directors has affirmatively determined that each member of our audit committee qualifies as “independent” under Nasdaq’s heightened standards and Rule 10A-3 of the Exchange Act of 1934, as amended (the “Exchange Act”), applicable to audit committee members, and that each member of the audit committee report required by SEC rules. Our audit committee currently consists of Timothy J. Barberich, Michael Huang and Joel S. Marcus, with Mr. Barberich serving as chair. All members of our audit committee meet the requirements for financial literacy under the applicable Nasdaq rules and regulations. Our Board of Directors has affirmatively determined that each member of our audit committee qualifies as “independent” under Nasdaq’s heightened standards andRule 10A-3 of the Exchange Act of 1934, as amended (the “Exchange Act”), applicable to audit committee members, and that Mr. Barberich qualifies as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) ofRegulation S-K.
Compensation Committee Our compensation committee is responsible for, among other things: reviewing and approving, or recommending for approval by our Board of Directors, the compensation of our Chief Executive Officer and our other executive officers; overseeing and administering our cash and equity incentive plans; reviewing and making recommendations to our Board of Directors with respect to director compensation; reviewing and discussing annually with management our “Compensation Discussion and Analysis,” to the extent required; and preparing the annual compensation committee report required by SEC rules, to the extent required. Our compensation committee may delegate its authority under its charter to one or more subcommittees as it deems appropriate from time to time as further described in its charter. Our compensation committee may also delegate to one or more of our executive officers the authority to grant equity awards to certain employees, as further described in its charter and subject to the terms of our equity plans and any such delegation. Our compensation committee currently consists of Timothy J. Barberich, Marc A. Cohen, and Robert S. Langer, Sc.D., and Michael Huang, with Mr. Cohen serving as chair. Mr. Huang was appointed to the compensation committee by our Board of Directors in March 2022. Our Board of Directors has determined that each member of our compensation committeeMr. Barberich, Dr. Langer, and Mr. Huang qualifies as “independent” under Nasdaq’s heightened standards applicable to compensation committee members and isthat Messrs. Barberich and Huang are each a“non-employee director” as defined inSection 16b-3 of the Exchange Act. Our Board of Directors has been unable to make its annual determination regarding Mr. Cohen’s independence for service on the compensation committee or his status as a “non-employee director” for the reason discussed under “Director Independence” regarding his general independence and intends to do so at the earliest opportunity. Our compensation committee has established a sub-committee comprised of our “non-employee directors,” who review and approve equity compensation for our executive officers. This sub-committee currently consists of Timothy J. Barberich, Michael Huang and Marc A. Cohen. Our Chief Executive Officer makes recommendations to the compensation committee regarding the compensation of our executive officers. The compensation committee has the authority to retain or obtain the advice of compensation consultants, legal counsel and other advisors to assist in carrying out its responsibilities. Before selecting any such consultant, counsel or advisor, the compensation committee reviews and considers the independence of such consultant, counsel or advisor in accordance with applicable Nasdaq rules. We must provide appropriate funding for payment of reasonable compensation to any advisor retained by the compensation committee. Compensation Consultant In accordance with its authority to retain consultants and advisors described above, and in connection with our IPO, the compensation committee engaged Radford, an Aon Company (“Radford”), and Pay Governance, LLC (“Pay Governance”) to provide executive and director compensation consulting services to the compensation committee. Radford provided consulting services from January to March 2021, and Pay Governance provided consulting services from April 2021 through the end of the year. In 2019,2021, Radford and Pay Governance provided services to the compensation committee, which included providing information and data on current trends and developments in executive and director compensation, analyzing benchmarking data and evaluating our peer group composition. Radford and Pay Governance reported directly to our compensation committee. However, certain of our executive officers and other members of senior management consulted with Radford and Pay Governance with respect to assessments of executive and director compensation and related matters to be provided to the compensation committee. The Compensation Committee reviewed compensation assessments provided by Radford and Pay Governance comparing our compensation to that of a group of peer companies within our industry and met with Radford and Pay Governance to discuss compensation of our executive officers and to receive their input and advice. In addition to their consulting services related to the compensation and benefits of our directors and officers in 2021, Radford and Pay Governance each also provided benchmarking data related to the compensation and benefits of our employees in 2021. The fees for this additional data in 2021 were less than $120,000 for Radford and Pay Governance individually and combined. The compensation committee evaluated whether any of the work performed by Radford or Pay Governance during 20192021 raised any conflict of interest and determined that it did not. Nominating and Corporate Governance Committee Our nominating and corporate governance committee is responsible for, among other things: identifying individuals qualified to become members of our Board of Directors; recommending to our Board of Directors the persons to be nominated for election as directors and to each committee of the Board; developing and recommending to our Board of Directors corporate governance guidelines, and reviewing and recommending to our Board proposed changes to our corporate governance guidelines from time to time; and overseeing a periodic evaluation of our Board of Directors. Our nominating and corporate governance committee currently consists of Marc A. Cohen, Michael Huang, Robert S. Langer, Sc.D. and Joel S. Marcus, with Mr. Marcus serving as chair. Our Board of Directors has determined that each committee member qualifies as “independent” under Nasdaq rules applicable to nominating and corporate governance committee members. Board of Directors and Committee Meetings and Attendance During the year ended December 31, 2019,2021, our Board of Directors met fourfive times, the audit committee met twofour times, the compensation committee met four times, and the compensationnominating and corporate governance committee met two times. Each of the incumbent directors except for Mr. Marcus, attended at least 75% of the total of the meetings of the Board of directors and the committees on which he or she served as a member during the year ended December 31, 2019.2021. We expect that Marc Cohen will not attend 75% or more of the total number of meetings of the Board of Directors or the committees on which he serves during 2022 due to an ongoing illness. Executive Sessions Executive sessions, which are meetings of thenon-management members of the Board of Directors, are regularly scheduled throughout the year. In addition, at least twice a year, the independent directors meet in a private session that excludes management and anynon-independent directors. At each of these meetings, thenon-management and independent directors in attendance, as applicable, determine which member will preside at such session. Director Attendance at Annual Meeting of Stockholders We do not have a formal policy regarding the attendance of members of our Board of Directors at our annual meetings of stockholders, but we expect all directors to make every effort to attend any meeting of stockholders. Ms. Feldmann and Messrs. Cohen, Huang, and Lucchino attended the Annual Meeting of Stockholders in 2021. Director Nominations Process The nominating and corporate governance committee is responsible for recommending candidates to serve on our Board of Directors and its committees. In considering whether to recommend any particular candidate to serve on the Board of Directors or its committees or for inclusion in the Board’s slate of recommended director nominees for election at an annual meeting of stockholders, the nominating and corporate governance committee considers the criteria set forth in our Corporate Governance Guidelines. Specifically, the nominating and corporate governance committee may take into account many factors, including: personal and professional integrity, ethics and values; experience in corporate management, such as serving as an officer or former officer of a publicly held company; strong finance experience; relevant social policy concerns; experience relevant to our industry; experience as a board member or executive officer of another publicly held company; relevant academic expertise or other proficiency in an area of our operations; diversity of expertise and experience in substantive matters pertaining to our business relative to other board members; diversity of background and perspective, including, but not limited to, with respect to age, gender, race, place of residence and specialized experience; practical and mature business judgment, including, but not limited to, the ability to make independent analytical inquiries; and any other relevant qualifications, attributes or skills. In determining whether to recommend a director forre-election, re- election, the nominating and corporate governance committee may also consider the director’s past attendance at meetings and participation in and contributions to the activities of the Board of Directors. We do not have a formal policy with regard to the consideration of diversity in identifying director nominees. The Board of Directors evaluates each individual in the context of the Board as a whole, with the objective of assembling a group that can best perpetuate the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience in these various areas. In identifying prospective director candidates, the nominating and corporate governance committee may seek referrals from other members of the Board of Directors, management, stockholders and other sources, including third party recommendations. The nominating and corporate governance committee also may, but need not, retain a search firm in order to assist it in identifying candidates to serve as directors of the Company. The nominating and corporate governance committee uses the same criteria for evaluating candidates regardless of the source of the referral or recommendation. When considering director candidates, the nominating and corporate governance committee seeks individuals with backgrounds and qualities that, when combined with those of our incumbent directors, provide a blend of skills and experience to further enhance the Board of Directors’ effectiveness. In connection with its annual recommendation of a slate of nominees, the nominating and corporate governance committee also may assess the contributions of those directors recommended forre-election in the context of the Board of Directors evaluation process and other perceived needs of the Board. Prior to our IPO, and in connection with their investment in our Company, certain of ourpre-IPO investors were entitled to designate a member to serve on our Board of Directors pursuant to a voting agreement. Pursuant to this voting agreement, the holders of a majority of the then-outstanding shares of our Series A convertible preferred stock and SeriesA-1 convertible preferred stock selected Marc A. Cohen to serve as a director. The voting agreement terminated by its terms in connection with the closing of our IPO, and none of our stockholders currently have any continuing rights regarding the election or designation of members of our Board of Directors.
Each of the director nominees to be elected at the Annual Meeting was recommended by our President and Chief Executive Officer, and evaluated in accordance with our standard review process for director candidates in connection with their initial appointment and their nomination for election at the Annual Meeting. When considering whether the directors and nominees have the experience, qualifications, attributes and skills, taken as a whole, to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of our business and structure, the Board focused primarily on the information discussedexperience described in each of the member’s biographical information set forth above. We believe that our directors provide an appropriate mix of experience and skills relevant to the size and nature of our business. This process resulted in the Board of Directors’ nomination of the incumbent directors named in this Proxy Statement and proposed for election by you at the Annual Meeting. The nominating and corporate governance committee will consider director candidates recommended by stockholders, and such candidates will be considered and evaluated under the same criteria described above. Any recommendation submitted to us should be in writing and should include any supporting material the stockholder considers appropriate in support of that recommendation, but must include information that would be required under the rules of the SEC to be included in a proxy statement soliciting proxies for the election of such candidate and a written consent of the candidate to serve as one of our directors if elected and must otherwise comply with the requirements under our Amended and Restated Bylaws (“Bylaws”) for stockholders to recommend director nominees. Stockholders wishing to propose a candidate for consideration may do so by submitting the above information to the attention of our Secretary at Frequency Therapeutics, Inc., 19 Presidential Way, Woburn,75 Hayden Avenue, Lexington, MA 01801.02421. All recommendations for nominations received by our Secretary that satisfy our BylawsBylaws’ requirements relating to such director nominations will be presented to the nominating and corporate governance committee for its consideration. Stockholders also must satisfy the notification, timeliness, consent and information requirements set forth in our Bylaws. These timing requirements are also described under the caption “Stockholder Proposals and Director Nominations.” Board Diversity Matrix The table below provides certain self-identified characteristics of six of our current seven directors, in accordance with Nasdaq Rule 5606. Marc A. Cohen was unable to provide the diversity information required due to an ongoing illness, and we intend to collect this information from him at the earliest opportunity. | | | | | | | | | | | | | | | | | | Board Diversity Matrix (As of April 29, 2022) | | | | Total number of directors | | | 7 | | | | | Female | | | Male | | | Non-Binary | | | Did Not Disclose
Gender | | Part I: Gender Identity | | | | | | | | | | | | | | | | | Directors | | | 1 | | | | 5 | | | | | | | | | | Part II: Demographic Background | | | | | | | | | | | | | | | | | African American or Black | | | | | | | | | | | | | | | | | Alaskan Native or Native American | | | | | | | | | | | | | | | | | Asian | | | | | | | 1 | | | | | | | | | | Hispanic or Latinx | | | | | | | | | | | | | | | | | Native Hawaiian or Pacific Islander | | | | | | | | | | | | | | | | | White | | | 1 | | | | 4 | | | | | | | | | | Two or More Races or Ethnicities | | | | | | | | | | | | | | | | | LGBTQ+ | | | | | | | | | | | | | | | | | Did Not Disclose Demographic Background | | | | | | | | | | | | | | | | |
Board Role in Risk Oversight The Board of Directors has overall responsibility for risk oversight, including, as part of regular Board and committee meetings, general oversight of executives’ management of risks relevant to the Company. A fundamental part of risk oversight is not only understanding the material risks a company faces and the steps management is taking to manage those risks, but also understanding what level of risk is appropriate for our Company. The involvement of the Board of Directors in reviewing our business strategy is an integral aspect of the Board’s assessment of management’s tolerance for risk and its determination of what constitutes an appropriate level of risk for our Company. While the Board of Directors has overall responsibility for risk oversight, it is supported in this function by its audit committee, compensation committee and nominating and corporate governance committee. Each of the committees regularly reports to the Board of Directors. The audit committee assists the Board of Directors in fulfilling its risk oversight responsibilities by periodically reviewing our accounting, reporting and financial practices, including the integrity of our financial statements, the surveillance of administrative and financial controls, our compliance with legal and regulatory requirements and our enterprise risk management program. Through its regular meetings with management, including the finance, legal, tax, compliance, and information technology functions, the audit committee reviews and discusses significant areas of our business and summarizes for the Board of Directors areas of risk and the appropriate mitigating factors. The compensation committee assists the Board of Directors by overseeing and evaluating risks related to our Company’s compensation structure and compensation programs. The nominating and corporate governance committee assists the Board of Directors by overseeing and evaluating programs and risks associated with the independence of the Board and potential conflicts of interest. In addition, the Board of Directors receives periodic detailed operating performance reviews from management. Committee Charters and Corporate Governance Guidelines Our Corporate Governance Guidelines, charters of the audit committee, compensation committee and nominating and corporate governance committee, and other corporate governance information are available in the “Corporate Governance—Governance Documents” section of the “Investors & Media” page of our website located at www.frequencytx.com, or by writing to our Secretary at our offices at 19 Presidential Way, Woburn,75 Hayden Avenue, Lexington, MA 01801.02421. Code of Business Conduct and Ethics We have adopted a Code of Business Conduct and Ethics (the “Code of Conduct”) that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. A copy of our Code of Conduct is available under the “Corporate Governance—Governance Documents” section of the “Investors & Media” page of our website located at www.frequencytx.com, or by writing to our Secretary at our offices at 19 Presidential Way, Woburn,75 Hayden Avenue, Lexington, MA 01801.02421. We intend to disclose on our website any amendment to, or waiver from, a provision of our Code of Conduct that applies to directors and executive officers and that is required to be disclosed pursuant to the rules of the SEC and the Nasdaq rules. Anti-Hedging Policy Our Board of Directors has adopted an Insider Trading Compliance Policy, which applies to all of our directors, officers and employees. The policy prohibits our directors, officers and employees from engaging in hedging or monetization transactions, such aszero-cost collars and forward sale contracts; short sales; and transactions in publicly traded options, such as puts, calls and other derivatives involving our equity securities. Stockholder Communications with Our Board of Directors Any stockholder or any other interested party who desires to communicate with our Board of Directors, ournon-management directors or any specified individual director, may do so by directing such correspondence to the attention of our Secretary at Frequency Therapeutics, Inc., 19 Presidential Way, Woburn, Massachusetts 01801.75 Hayden Avenue, Lexington, MA 02421. Our Secretary will forward the communication to the appropriate director or directors. EXECUTIVE OFFICER AND DIRECTOR COMPENSATION This section discusses the material components of the executive compensation program for our executive officers who are named in the 20192021 Summary Compensation Table below. In 2019,2021, our “named executive officers” and their positions were: David L. Lucchino, President and Chief Executive Officer; Christopher Loose,Carl P. LeBel, Chief ScientificDevelopment Officer; and
Carl LeBel,Quentin McCubbin, Chief DevelopmentManufacturing Officer.
20192021 Summary compensation table
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and principal position | | Year | | | Salary
($) | | | Bonus
($) | | | Option
awards
($)(1) | | | Non-equity
incentive
plan
compensation
($)(2) | | | All other
compensation
($) | | | Total ($) | | David L. Lucchino | | | 2019 | | | | 441,667 | | | | — | | | | 6,513,937 | | | | 398,000 | | | | 11,000 | (3) | | | 7,364,604 | | President and Chief Executive Officer | | | 2018 | | | | 367,262 | | | | 75,000 | | | | 140,438 | | | | 150,000 | | | | 11,000 | | | | 743,700 | | Christopher Loose | | | 2019 | | | | 379,167 | | | | — | | | | 2,278,077 | | | | 230,000 | | | | 7,271 | (3) | | | 2,894,515 | | Chief Scientific Officer | | | 2018 | | | | 316,325 | | | | 55,000 | | | | 87,954 | | | | 113,750 | | | | 5,105 | | | | 578,134 | | Carl LeBel | | | 2019 | | | | 370,417 | | | | — | | | | 1,605,602 | | | | 230,000 | | | | 11,200 | (3) | | | 2,217,219 | | Chief Development Officer | | | 2018 | | | | 268,542 | | | | 5,000 | | | | 57,377 | | | | 97,500 | | | | 49,302 | (4) | | | 477,721 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and principal position | | Year | | | Salary
($) | | | Bonus
($) | | | Stock
awards
($)(1) | | | Option
awards
($)(2) | | | Non-equity
incentive
plan
compensation
($)(3) | | | All other
compensation
($)(4) | | | Total ($) | | David L. Lucchino | | | 2021 | | | | 600,000 | | | | — | | | | — | | | | 4,883,032 | | | | 324,000 | | | | 14,500 | | | | 5,821,532 | | President and Chief Executive Officer | | | 2020 | | | | 551,250 | | | | — | | | | — | | | | 4,121,560 | | | | 530,578 | | | | 14,250 | | | | 5,217,638 | | Carl P. LeBel | | | 2021 | | | | 461,869 | | | | — | | | | 286,200 | | | | 1,831,138 | | | | 157,035 | | | | 14,500 | | | | 2,750,743 | | Chief Development Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Quentin McCubbin | | | 2021 | | | | 343,500 | (5) | | | 77,500 | (6) | | | 333,900 | | | | 2,397,216 | | | | 136,800 | | | | 14,500 | | | | 3,303,416 | | Chief Manufacturing Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Amounts represent the full grant date value of restricted stock units issued during the given year, computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. |
| (2) | Amounts represent the full grant date fair value of stock options issued during the given year, computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. The assumptions used to calculate the grant date fair value of options issued during 20192021 are set forth in Note 29 to the financial statements included in our Annual Report. |
(2)(3) | Amounts represent incentive compensation awarded in recognition of individual and company performance under our annual incentive compensation program. Refer to “—2019“2021 Bonuses” below for additional information regarding 20192021 awards. |
(3)(4) | Consists of employer contributions to 401(k) plan. |
(4)(5) | Dr. McCubbin was hired on January 19, 2021. His annual base salary for 2021 was $360,000. |
| (6) | Consists of employer contributions to 401(k) plan and consulting fees earned in 2018 prior to Dr. LeBel beginning employment with the company.a sign on bonus. |
Narrative to summary compensation table Our executive compensation program is designed to align compensation with business objectives and the creation of stockholder value, while also enabling us to attract, motivate and retain individuals who contribute to our long-term success. For 2019,2021, the compensation of our named executive officers primarily consisted of a base salary, an annual cash incentive bonus opportunity, equity compensation in the form of stock options and restricted stock units, and health and welfare benefits. Pursuant to their employment agreements, the named executive officers are also eligible to receive certain payments and benefits upon a termination of employment under certain circumstances. 20192021 salaries
Each of the named executive officers receives a base salary to provide a fixed component of compensation intended to reflect the executive’s skill set, experience, role and responsibilities. Annual base salaries are reviewed periodically by the compensation committee and the board of directors. In connection with our IPO,Effective January 1, 2021, the compensation committee approved increasesan increase in the base salariessalary for certain executives including our named executive officers, which became effective on October 3, 2019. Specifically, Mr. Lucchino’sLucchino from $551,250 to $600,000 and for Dr. LeBel from $446,250 to $461,869. Dr. McCubbin was hired in January 2021 and his base salary was increased from $425,000 to $525,000 per year, Dr. Loose’s base salary was increased from $375,000 to $425,000 per year and Dr. LeBel’s base salary was increased from $360,000 to $425,000 per year. In February 2020, our compensation committee approved a 5% increase in base salary for all of our employees, including our named executive officers, effective as of January 1, 2020.set at $360,000. 20192021 bonuses
We offer our named executive officers the opportunity to earn annual performance bonuses to compensate them for attaining short-term company and individual goals established by our board of directors. Each named executive officer has an established target annual performance bonus amount, expressed as percentagesa percentage of the named executive officer’s annual base salary. In connection with our IPO, the compensation committee approved increasesThe target bonus amounts for Mr. Lucchino, Dr. LeBel and Dr. McCubbin in the target annual bonuses for our named executive officers. Specifically, Mr. Lucchino’s target annual bonus was increased from 40% to 55%2021 were 60%, Dr. Loose’s target annual bonus was increased from 35% to 40% and Dr. LeBel’s annual target bonus was increased from 30% to 40%. The 2019 corporate goals for each of the named executive officers related to fundraising, clinical development, product and pipeline development and business development, and the 2019 individual goals related to the named executive officer’s area of responsibility within our Company. No specific payment formula or specific weightings were established., respectively. In February 2020,January 2022, the compensation committee evaluated the named executive officers’ performance against the relevant bonus goals and approved the amounts earned by our named executive officers under the Company’s annual bonus program for 20192021 and included above in the 20192021 Summary Compensation Table. The amounts earned exceeded thefor Mr. Lucchino, Dr. LeBel and Dr. McCubbin fell just below their target bonus for each named executive officer, based on the exceptional performance of our Company and our named executive officers in 2019,2021, as determined by the compensation committee. Specifically, the compensation committee considered our Company’s successful Phase 1/2 readout, the advancement of our multiple sclerosis program, the completion of our crossover financing and IPO, the closingclinical trial results, initiation of a corporate partnership and thePhase 2b study of FX-322, initiation of dosinga new hearing restoration program, and initiation of a new preclinical program for remyelination in our Company’s Phase 2a study. As a result, the actual bonuses awarded to the named executive officers for 2019 performance were approved at above target for Mr. Lucchino and Drs. Loose and LeBel.multiple sclerosis. Equity compensation WeAlthough we do not have historically offered stock optionsa formal policy with respect to the grant of equity incentive awards to our executive officers, including our named executive officers, asor any formal equity ownership guidelines applicable to them, we believe that equity grants provide our executive officers with a strong link to our long-term performance, create an ownership culture and help to align the long-term incentive componentinterests of our executive officers and our stockholders. In addition, we believe that equity grants with a time-based vesting feature promote executive retention because this feature incentivizes our executive officers to remain in our employment during the vesting period. Accordingly, our board of directors periodically reviews the equity incentive compensation program.
In April 2019, we granted service- and performance-based options underof our 2014 Stock Incentive Plan, or the 2014 Plan, toexecutives, including our named executive officers, withand from time to time may grant equity incentive awards to them. To date, our equity awards have been made in the form of stock options and, beginning in 2021, restricted stock units.
We typically grant stock option awards to each executive officer and employee upon the individual’s commencement of employment and make additional grants of equity awards on an annual basis for retention purposes. Each option has an exercise pricesprice equal to $3.37, which the board of directors determined to be the fair market value of our common stock on the date of grant. The service-based options vest in 48 equal monthly installments beginning on February 1, 2019. The performance-based options are split equally between options that vest upon achievement of (i) an exit milestone, (ii) a clinical trial milestone and (iii) a licensing milestone. Mr. Lucchino received 444,371 serviceDuring the fiscal year ended December 31, 2021, we granted stock options and 289,084 performance options (96,361restricted stock units to two of which were exit-based), Dr. Loose received 360,606 service options and 192,723 performance options (64,241 of which were exit-based) and Dr. LeBel received 101,930 service options and 70,665 performance options (23,555 of which were exit-based). The exit-based options vested in full in December 2019 following the closing of our IPO and the licensing milestone options vested in July 2019. In connection with our IPO, we adopted the Frequency Therapeutics, Inc. 2019 Incentive Award Plan, or the 2019 Plan, to facilitate the grant of cash and equity incentives to directors, employees (including our named executive officers) and consultants of our company and certain of its affiliates to enable our company and certain of its affiliates to obtain and retain services of these individuals, which we consider to be essential to our long-term success. Upon effectiveness ofofficers, as shown in more detail in the 2019 Plan, we ceased granting awards under our 2014 Plan.“Outstanding Equity Awards at Fiscal Year End” table below.
Effective on the day that the registration statement for our IPO became effective, our board approved the grant of additional stock options to each of the named executive officers. Specifically, Mr. Lucchino received 714,413 stock options, Dr. Loose received 146,826 stock options and Dr. LeBel received 178,816 stock options. These stock options were granted under our 2019 Plan, with exercise prices equal to $14.00, which was the price to the public in our IPO. The options vest in 48 equal monthly installments beginning on November 2, 2019, subject to continued employment through each applicable vesting date.
Other elements of compensation Retirement plan We maintain a 401(k) retirement savings plan, for our employees, or the 401(k) Plan, for our employees including our named executive officers, who satisfy certain eligibility requirements. Our named executive officers are eligible to participate in the 401(k) Plan on the same terms as other full-time employees. Under this plan, during 20192021 we matched 100% of the first 4%5% of participants’ contributions, which was increased to 5% in 2020.contributions. We believe that providing a vehicle fortax-deferred retirement savings though our 401(k) Plan adds to the overall desirability of our executive compensation package and further incentivizes our employees, including our named executive officers, in accordance with our compensation policies. Health and welfare plans During their employment, our named executive officers are eligible to participate in our employee benefit plans and programs, including medical, dental and dentalvision benefits, to the same extent as our other full-time employees, subject to the terms and eligibility requirements of those plans. Outstanding equity awards at 20192021 fiscalyear-end | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | Name | | Grant date | | | Number of
securities
underlying
unexercised
options (#)
exercisable | | | Number of
securities
underlying
unexercised
options (#)
unexercisable | | | Equity incentive
plan awards:
number of
securities
underlying
unexercised
unearned
options (#) | | | Option
exercise
price ($) | | | Option
expiration
date | | | 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 | | David L. Lucchino | | | 10-2-2019 | | | | (1) | | | | 29,767 | | | | 684,646 | | | | | | 14.00 | | | | 10-1-2029 | | | David Lucchino | | | | 1/15/2021 | (1) | | | 45,832 | | | | 154,168 | | | | 35.85 | | | | 1/14/2031 | | | | | | | | | 4-17-2019 | | | | | | 192,722 | | | | | | | | 3.37 | | | | 4-16-2029 | | | | 2/12/2020 | (2) | | | 116,196 | | | | 126,304 | | | | 25.05 | | | | 2/11/2030 | | | | | | | | | 4-17-2019 | | | | (2) | | | | 101,835 | | | | 342,536 | | | | | | 3.37 | | | | 4-16-2029 | | | | 10/2/2019 | (3) | | | 386,973 | | | | 327,440 | | | | 14.00 | | | | 10/1/2029 | | | | | | | | | 4-17-2019 | | | | (3) | | | | | | | | 96,361 | | | | 3.37 | | | | 4-16-2029 | | | | 4/17/2019 | (4) | | | 324,020 | | | | 120,351 | | | | 3.37 | | | | 4/16/2029 | | | | | | | | | 5-22-2018 | | | | (4) | | | | 138,025 | | | | 172,622 | | | | | | 0.61 | | | | 5-21-2028 | | | | 4/17/2019 | | | | 192,722 | | | | | | 3.37 | | | | 4/16/2029 | | | | | | | | | 6-29-2017 | | | | (5) | | | | | | 50,866 | | | | | | 0.61 | | | | 6-28-2027 | | | | 5/22/2018 | (5) | | | — | | | | 6,905 | | | | 0.61 | | | | 5/21/2028 | | | | | | Christopher Loose | | | 10-2-2019 | | | | (1) | | | | 6,117 | | | | 140,709 | | | | | | 14.00 | | | | 10-1-2029 | | | | | | 4-17-2019 | | | | | | 128,482 | | | | | | | | 3.37 | | | | 4-16-2029 | | | | | | 4-17-2019 | | | | (2) | | | | 82,638 | | | | 277,968 | | | | | | 3.37 | | | | 4-16-2029 | | | | | | 4-17-2019 | | | | (3) | | | | | | | | 64,241 | | | | 3.37 | | | | 4-16-2029 | | | Quentin McCubbin | | | | 4/20/2021 | (6) | | | | | | | | | | | 35,000 | | | | 179,550 | | | | | 5-22-2018 | | | | (6) | | | | 99,460 | | | | 108,110 | | | | | | 0.61 | | | | 5-21-2028 | | | | 1/29/2021 | (7) | | | 0 | | | | 90,000 | | | | 38.99 | | | | 1/28/2031 | | | | | | | | | 6-29-2017 | | | | (7) | | | | 22,270 | | | | 24,126 | | | | | | 0.61 | | | | 6-28-2027 | | | Carl LeBel | | | 10-2-2019 | | | | (1) | | | | 7,455 | | | | 171,482 | | | | | | 14.00 | | | | 10-1-2029 | | | | 4/20/2021 | (6) | | | | | | | | | | | 30,000 | | | | 153,900 | | | | | 4-17-2019 | | | | | | 47,110 | | | | | | | | 3.37 | | | | 4-16-2029 | | | | 1/15/2021 | (1) | | | 17,187 | | | | 57,813 | | | | 35.85 | | | | 1/14/2031 | | | | | | | | | 4-17-2019 | | | | (2) | | | | 23,358 | | | | 78,572 | | | | | | 3.37 | | | | 4-16-2029 | | | | 2/12/2020 | (2) | | | 27,551 | | | | 29,949 | | | | 25.05 | | | | 2/11/2030 | | | | | | | | | 4-17-2019 | | | | (3) | | | | | | | | 23,555 | | | | 3.37 | | | | 4-16-2029 | | | | 10/2/2019 | (3) | | | 96,924 | | | | 82,013 | | | | 14.00 | | | | 10/1/2029 | | | | | | | | | 3-12-2018 | | | | (5) | | | | 61,242 | | | | 72,378 | | | | | | 0.61 | | | | 3-11-2028 | | | | 4/17/2019 | (4) | | | 74,323 | | | | 27,607 | | | | 3.37 | | | | 4/16/2029 | | | | | | | | | | 4/17/2019 | | | | 47,110 | | | | | | 3.37 | | | | 4/16/2029 | | | | | | | | | | 3/12/2018 | (8) | | | 128,052 | | | | 5,568 | | | | 0.61 | | | | 3/11/2028 | | | | | |
| (1) | The option vests in 48 equal monthly installments beginning November 2on February 1 of the year of grant, subject to continued employment through each applicable vesting date. |
| (2) | The option vests in 48 equal monthly installments beginning on February 1 of the year of grant, subject to continued employment through each applicable vesting date. For Mr. Lucchino, the option will vest upon a change in control and for Dr. Loose and Dr. LeBel, the option has potential accelerated vesting upon a qualifying termination following a change in control, in each case as described below in “—Executive compensation arrangements.” |
| (3) | The option vests uponin 48 equal monthly installments beginning November 2 of the completionyear of a successful Phase 2a clinical trial, as determined by the Board, on or priorgrant, subject to December 31, 2020.continued employment through each applicable vesting date. |
| (4) | The option vests in 48 equal monthly installments beginning on February 1 of the year of grant, subject to continued employment through each applicable vesting date. The option vests in full in the event of a change in control. |
| (5) | The option vests in 48 equal monthly installments beginning January 1 of the year of grant, subject to continued employment through each applicable vesting date. The option vests in full in the event of a change of control of , subject to continued employment through such change ofin control. |
(5)(6) | The RSU vests in 2 equal installments on February 14, 2022 and July 4, 2022. |
| (7) | The option vests as to 25% of the underlying shares on January 19, 2022 and in 48 equal monthly installments beginning January 1 ofover the year of grant,following three years thereafter, subject to continued employment through each applicable vesting date. For Mr. Lucchino, the option will vest upon a change in control and for Dr. Loose and Dr. LeBel, the option has potential accelerated vesting upon a qualifying termination following a change in control, in each case as described below in “—Executive compensation arrangements.” |
(6) | The option vests in 48 equal monthly installments beginning January 1 of the year of grant, subject to continued employment through each applicable vesting date. The option will accelerate and vest in full in the event of a change of control of in connection with or following which Dr. Loose’s employment is terminated without cause or by Dr. Loose for good reason.
|
(7)(8) | The option vests as to 25% of the underlying shares on February 28, 2019 and in equal monthly installments on the 28th of each month over the following three years thereafter, subject to continued employment through each applicable vesting date. |
Executive compensation arrangements Employment agreements Mr. Lucchino We entered into a second amended and restated executive employment agreement with Mr. Lucchino on September 20, 2019, pursuant to which we employ Mr. Lucchino as our President and Chief Executive Officer. The employment agreement also provides for Mr. Lucchino to serve as a member of our board of directors for as long as he is employed as our Chief Executive Officer. The employment agreement has an indefinite term. The employment agreement provides for an annual base salary of $525,000, which was increased to $551,250$600,000 effective January 1, 2020,2021, and for a target annual performance bonus equal to 55%, which was increased to 60% effective January 1, 2021, of Mr. Lucchino’s annual base salary to be based on the attainment of predetermined performance objectives agreed upon between Mr. Lucchino and our board of directors. In the event of certain corporate transactions, including aspin-off of assets or a restructuring, Mr. Lucchino is entitled to the same relative ownership percentage in the resulting entity or entities as he had in our Company immediately before the corporate transaction. If a “change in control” (as such term is defined in his employment agreement) occurs, all of Mr. Lucchino’s time-based equity awards will accelerate and vest. If we terminate Mr. Lucchino’s employment without “cause”, he resigns for “good reason” or his employment terminates as a result of “disability” (as such terms are defined in the employment agreement) or death, subject to his execution andnon-revocation of a release in favor of our Company, he is entitled to receive the following termination payments: (i) twelve months’ base salary, (ii) 100% of his target annual bonus and (iii) apro-rated portion of his annual target bonus based on the portion of the year he was employed. The payments under clauses (i)-(iii) are payable in a single lump sum on the first payroll date following the 60th day after his termination of employment. Mr. Lucchino may also receive up to twelve months’ continued coverage, at our expense, under the Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA, if he elects such continued coverage. In addition to the termination payments, all time-based equity awards granted to Mr. Lucchino will accelerate and vest as to the number of shares that would have vested had he remained employed for an additional six months following his date of termination. If such a qualifying termination occurs following a “change in control”, subject to his execution andnon-revocation of a release, Mr. Lucchino will be entitled to receive the same termination payments except (i) the severance payment will be equal to eighteen months’ base salary and (ii) all equity awards held by Mr. Lucchino will accelerate and vest (including performance vesting awards, which will vest at target level of achievement). Mr. Lucchino is also party to restrictive covenant agreements, pursuant to which he has agreed to refrain from competing with us or soliciting our customers or employees during his employment and for one year following termination of his employment and from disclosing our proprietary information during or at any time following his employment. Dr. Loose We entered into an amended and restated employment agreement with Dr. Loose on September 20, 2019, pursuant to which we employ Dr. Loose as our Chief Scientific Officer. The employment agreement has an indefinite term.
The employment agreement for Dr. Loose provides for an annual base salary of $425,000, which was increased to $446,250 effective January 1, 2020, and a target annual performance bonus equal to 40% of his base salary, and is based on the attainment of predetermined individual and company performance objectives agreed upon between Dr. Loose and us.
In the event we terminate Dr. Loose’s employment without “cause” or he resigns for “good reason” (as such terms are defined in the employment agreement), subject to his execution andnon-revocation of a release in favor of our Company, he is entitled to receive the following termination payments: (i) twelve months’ continued base salary in equal installments following his termination, (ii) 100% of his target annual bonus paid in a lump sum within fourteen days following his execution of the release and (iii) if he makes an election, up to twelve months continued coverage under COBRA, with us paying the same portion of the COBRA premiums as we pay for active employees. If such a qualifying termination occurs within twelve months following a “change in control” (as defined in his employment agreement), Dr. Loose’s equity awards will accelerate and vest.
Dr. Loose is party to restrictive covenant agreements, pursuant to which he has agreed to refrain from competing with us or soliciting our customers or employees during his employment and for one year following termination of his employment and from disclosing our proprietary information during or at any time following his employment.
Dr. LeBel
We entered into an employment agreement with Dr. LeBel on September 19, 2019, pursuant to which we employ Dr. LeBel as our Chief Development Officer. The employment agreement has an indefinite term. The employment agreement for Dr. LeBel provides for an annual base salary of $425,000, which was increased to $446,250$461,868 effective January 1, 2020, and2021, with a target annual performance bonus equal to 40% of his base salary and is based on the attainment of predetermined individual and company performance objectives agreed upon between Dr. LeBel and us.determined by our board of directors. Under Dr. LeBel’s employment agreement, if we terminate Dr. LeBel’s employment without “cause” or he resigns for “good reason” (as such terms are defined in the employment agreement), subject to his execution andnon-revocation of a release in favor of our Company, he is entitled to receive the following termination payments: (i) twelve months’ continued base salary in equal installments following his termination, (ii) 100% of his target annual bonus paid in a lump sum within 14 days following his execution of the release and (iii) if he makes an election, up to twelve months continued coverage under COBRA, with us paying the same portion of the COBRA premiums as we pay for active employees. If such a qualifying termination occurs within 12 months following a “change in control” (as defined in his employment agreement), Dr. LeBel’s equity awards will accelerate and vest. Dr. LeBel is party to restrictive covenant agreements, pursuant to which he has agreed to refrain from competing with us or soliciting our customers or employees during his employment and for one year following termination of his employment and from disclosing our proprietary information during or at any time following his employment. Dr. McCubbin We entered into an employment agreement with Dr. McCubbin on November 25, 2020, pursuant to which we employ Dr. McCubbin as our Chief Manufacturing Officer. The employment agreement has an indefinite term. The employment agreement for Dr. McCubbin provides for an annual base salary of $360,000, a target annual performance bonus equal to 40% of his base salary based on the attainment of predetermined individual and company performance objectives determined by our board of directors, and a sign on bonus equal to $77,500, which was payable on the first payroll date following the commencement of his employment. Under Dr. McCubbin’s employment agreement, if we terminate Dr. McCubbin’s employment without “cause” or he resigns for “good reason” (as such terms are defined in the employment agreement), subject to his execution and non-revocation of a release in favor of our Company, he is entitled to receive the following termination payments: (i) twelve months’ continued base salary in equal installments following his termination, (ii) 100% of his target annual bonus paid in a lump sum within 14 days following his execution of the release and (iii) if he makes an election, up to twelve months continued coverage under COBRA, with us paying the same portion of the COBRA premiums as we pay for active employees. If such a qualifying termination occurs within 12 months following a “change in control” (as defined in his employment agreement), Dr. McCubbin’s equity awards will accelerate and vest. Dr. McCubbin is party to restrictive covenant agreements, pursuant to which he has agreed to refrain from competing with us or soliciting our customers or employees during his employment and for one year following termination of his employment and from disclosing our proprietary information during or at any time following his employment. Director compensation Effective on the effectiveness of the registration statement for our IPO, we adopted and our stockholders approved a compensation program for ournon-employee directors under which eachnon-employee director receives the following amounts for their services on our board of directors: an option to purchase 29,693 shares of our common stock upon the director’s initial election or appointment to our board of directors, if the director has served on our board of directors for at least six months as of the date of an annual meeting of stockholders, an option to purchase 14,846 shares of our common stock on the date of the annual meeting, an annual director fee of $35,000, and if the director serves on a committee of our board of directors or in the other capacities stated below, an additional annual fee as follows: chairman of the board, vice chairman of the board, or lead independent director, $30,000 chairman of the audit committee, $15,000, audit committee member other than the chairman, $7,500, chairman of the compensation committee, $10,000, compensation committee member other than the chairman, $5,000, chairman of the nominating and corporate governance committee, $8,000, and nominating and corporate governance committee member other than the chairman, $4,000. Stock options granted to ournon-employee directors under the program have an exercise price equal to the fair market value of our common stock on the date of grant and expire not later than ten years after the date of grant. The stock options granted upon a director’s initial election or appointment vest in 36 substantially equal monthly installments following the date of grant. The stock options granted annually to directors vest in a single installment on the earlier of the day before the next annual meeting or the first anniversary of the date of grant. In addition, all unvested stock options vest in full upon the occurrence of a change in control. Director fees under the program are payable in arrears in four equal quarterly installments not later than the fifteenth day following the final day of each calendar quarter, provided that the amount of each payment is prorated for any portion of a quarter that a director is not serving asnon-employee member of our board. Mr. Lucchino, our President and Chief Executive Officer, serves on our board of directors but does not receive additional compensation for his service as a director. Refer to the discussion of named executive officer compensation elsewhere in this section for information regarding Mr. Lucchino’s 20192020 compensation. 20192021 Director compensation table
| Name | | Fees
earned
or paid
in cash
($) | | | Option
awards ($)
(1) | | | All other
compensation ($)(2) | | Total ($) | | | Fees
earned
or paid
in cash
($) | | | Option
awards ($)
(1) | | | All other
compensation ($)(2) | | Total ($) | | Marc A. Cohen | | | 19,750 | | | | 294,215 | | | | — | | | 313,965 | | | | 79,000 | | | | 107,147 | | | | — | | | | 186,147 | | Robert S. Langer | | | 11,000 | | | | 271,972 | | | | 60,000 | (2) | | 342,972 | | | | 44,000 | | | | 107,147 | | | | 60,000 | (2) | | | 211,147 | | Timothy Barberich | | | 13,750 | | | | 35,599 | | | | — | | | 49,349 | | | | 51,250 | | | | 107,147 | | | | — | | | | 158,397 | | Michael Huang | | | 11,625 | | | | 82,838 | | | | — | | | 94,463 | | | | 46,500 | | | | 107,147 | | | | — | | | | 153,647 | | Joel S. Marcus | | | 12,638 | | | | 83,233 | | | | — | | | 95,871 | | | | 50,500 | | | | 107,147 | | | | — | | | | 157,647 | | Cynthia L. Feldmann | | | | 46,250 | | | | 107,147 | | | | — | | | | 153,397 | |
| (1) | Amounts represent the full grant date fair value of stock options issued during 2019,2021, computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. The assumptions used to calculate the grant date fair value of all option awards made to our directors are set forth in Note 2 to the consolidated financial statements included in our Annual Report. |
| (2) | Amounts represent consulting fees paid pursuant to an oral consulting agreement with us. The agreement entitles Dr. Langer to $5,000 in consulting fees per month until it is terminated either by us upon six months’ notice or by Dr. Langer upon 30 days’ notice. |
The table below shows the aggregate numbers of option awards (exercisable and unexercisable) and unvested stock awards held as of December 31, 20192021 by eachnon-employee director who served on our board of directors in 2019.2021. | | | | | | | | | Name | | Options
outstanding at
fiscal year end | | | Unvested
restricted shares
outstanding at
fiscal year end | | Marc A. Cohen | | | 203,947 | | | | — | | Robert S. Langer | | | 342,542 | | | | 12,373 | | Timothy Barberich | | | 72,449 | | | | 2,184 | | Michael Huang | | | — | | | | — | | Joel S. Marcus | | | 37,116 | | | | — | |
Equity Compensation Plan Information
The following table provides information on our equity compensation plans as of December 31, 2019.
| | | | | | | | | | | | | Plan Category | | Number of
Securities to
be Issued
Upon
Exercise of
Outstanding
Options,
Warrants
and Rights | | | Weighted-
Average
Exercise
Price of
Outstanding
Options,
Warrants,
and Rights | | | Number of
Securities
Available for
Future
Issuance
Under Equity
Compensation
Plans
(excludes
securities
Reflected in
first column)
(1) | | Equity compensation plans approved by security holders (2) | | | 5,968,672 | (3) | | $ | 5.20 | (4) | | | 2,167,633 | (5) | Equity compensation plans not approved by security holders | | | — | | | | — | | | | — | | Total | | | 5,968,672 | | | $ | 5.20 | | | | 2,167,633 | |
(1) | Pursuant to the terms of the 2019 Incentive Award Plan, or the 2019 Plan, the number of shares of common stock available for issuance under the 2019 Plan automatically increases on each January 1 until and including January 1, 2029, by an amount equal to the lesser of: (a) 4% of the shares of common stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as is determined by our board of directors. Pursuant to the terms of the 2019 Employee Stock Purchase Plan, or the 2019 ESPP, the number of shares of common stock available for issuance under the 2019 ESPP automatically increases on each January 1 until and including January 1, 2029, by an amount equal to the lesser of: (a) 1% of the shares of common stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as is determined by our board of directors.
|
(2) | Consists of the 2014 Stock Incentive Plan, or the 2014 Plan, the 2019 Plan, and the 2019 ESPP.
|
(3) | Includes 4,721,334 outstanding options to purchase shares of common stock under the 2014 Plan and 1,247,337 outstanding options to purchase stock under the 2019 Plan.
|
(4) | As of December 31, 2019, the weighted-average exercise price of outstanding options under the 2014 Plan was $2.85 and the weighted-average exercise price per share of outstanding options under the 2019 Plan was $14.09.
|
(5) | As of December 31, 2019, a total of 2,167,663 shares of common stock were available for issuance, consisting of (a) 315,000 shares of common stock available for future issuance under the 2019 ESPP, none of which shares were subject to outstanding purchase rights under the 2019 ESPP and (b) 1,852,663 shares of common stock available for future issuance under the 2019 Plan.
|
| | | | | | | | | | | | | Name | | Options
outstanding at
fiscal year end
(exercisable) | | | Options
outstanding at
fiscal year end
(unexercisable) | | | Unvested
restricted shares
outstanding at
fiscal year end | | Marc A. Cohen | | | 107,812 | | | | 16,933 | | | | — | | Robert S. Langer | | | 353,635 | | | | 18,599 | | | | — | | Timothy Barberich | | | 86,754 | | | | 15,387 | | | | — | | Michael Huang | | | 14,846 | | | | 14,846 | | | | — | | Joel S. Marcus | | | 14,846 | | | | 14,846 | | | | — | | Cynthia L. Feldmann | | | 12,371 | | | | 32,168 | | | | — | |
STOCK OWNERSHIP SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Security Ownership of Certain Beneficial Owners and Management The following table sets forth information relating to the beneficial ownership of our common stock as of March 31, 2020,2022, by: (i) each person, or group of affiliated persons, known by us to beneficially own more than 5% of our outstanding shares of common stock; (ii) each of our directors; (iii) each of our named executive officers for 2020;officers; and (iv) all directors and executive officers as a group. The number of shares beneficially owned by each stockholder is determined under rules issued by the SEC. Under these rules, a person is deemed to be a “beneficial” owner of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. Except as indicated in the footnotes below, we believe, based on the information furnished to us and information filed with the SEC, that the individuals and entities named in the table below have sole voting and investment power with respect to all shares of common stock beneficially owned by them, subject to any applicable community property laws. The percentage of shares beneficially owned is computed on the basis of 31,009,25034,976,409 shares of our common stock outstanding as of March 31, 2020.2022. Shares of our common stock that a person has the right to acquire within 60 days of March 31, 20202022 are deemed outstanding for purposes of computing the percentage ownership of the person holding such rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person, except with respect to the percentage ownership of all directors and executive officers as a group. Unless otherwise indicated, the address for each of the stockholders in the table below is c/o Frequency Therapeutics, 19 Presidential Way, Woburn,Inc., 75 Hayden Avenue, Lexington, MA 01801.02421. | | | | | | | | | | | | Shares of
Common
Stock
Beneficially
Owned | | | Percentage
of
Shares
Beneficially
Owned | | Holders of More than 5%: | | | | | | | | | Perceptive Life Sciences Master Fund, Ltd.(1) | | | 3,034,296 | | | | 9.8 | % | Directors and Named Executive Officers: | | | | | | | | | David L. Lucchino(2) | | | 1,162,587 | | | | 3.7 | % | Christopher R. Loose, Ph.D.(3) | | | 650,746 | | | | 2.1 | % | Carl P. LeBel, Ph.D.(4) | | | 194,180 | | | | * | | Marc A. Cohen(5) | | | 652,890 | | | | 2.1 | % | Timothy J. Barberich(6) | | | 253,308 | | | | * | | Michael Huang | | | — | | | | * | | Robert S. Langer, Sc.D.(7) | | | 526,971 | | | | 1.7 | % | Joel S. Marcus(8) | | | 1,334,974 | | | | 4.3 | % | All executive officers and directors as a group (11 persons)(9) | | | 4,816,653 | | | | 15.4 | % |
| | | | | | | | | | | | Shares of
Common
Stock
Beneficially
Owned | | | Percentage
of
Shares
Beneficially
Owned | | Holders of More than 5%: | | | | | | | | | Wasatch Advisors, Inc.(1). | | | 3,166,962 | | | | 9.1 | % | BlackRock, Inc.(2) | | | 3,044,997 | | | | 8.7 | % | Federated Hermes, Inc.(3) | | | 2,801,066 | | | | 8.0 | % | Directors and Named Executive Officers: | | | | | | | | | David L. Lucchino(4) | | | 1,702,654 | | | | 4.7 | % | Carl P. LeBel(5) | | | 450,900 | | | | 1.3 | % | Quentin McCubbin(6) | | | 52,770 | | | | 0.2 | | Marc A. Cohen(7) | | | 733,576 | | | | 2.1 | % | Timothy J. Barberich(8) | | | 87,295 | | | | 0.2 | | Cynthia L. Feldmann(9) | | | 16,495 | | | | * | | Michael Huang(10) | | | 14,846 | | | | * | | Robert S. Langer, Sc.D.(11) | | | 597,409 | | | | 1.7 | % | Joel S. Marcus(12) | | | 1,333,692 | | | | 3.8 | % | All executive officers and directors as a group (11 persons)(13) | | | 5,969,062 | | | | 16.8 | % |
| * | Represents beneficial ownership of less than 1% of our outstanding common stock. |
| (1) | Based on a Schedule 13G/A filed with the SEC on February 14, 202011, 2022. Wasatch Advisors, Inc. has sole voting power and other information known to us.sole dispositive power over 3,166,962 shares of common stock. The address of Perceptive Life Sciences Master Fund, Ltd.Wasatch Advisors, Inc. is c/o Perceptive Advisors LLC, 51 Astor Place, 10th Floor, New York, New York 10003. Perceptive Advisors LLC serves as the investment advisor to Perceptive Life Sciences Master Fund, Ltd., and Joseph Edelman is the managing member of Perceptive Advisors LLC.505 Wakara Way, Salt Lake City, Utah 84108. |
| (2) | Based on a Schedule 13G filed with the SEC on February 3, 2022. BlackRock, Inc. has sole voting power over 2,920,200 shares of common stock. According to the Schedule 13G, BlackRock, Inc. may be deemed |
| to beneficially own the reported shares of common stock and has filed a Schedule 13G as the parent holding company or control person on behalf of its subsidiaries BlackRock Advisors, LLC, Aperio Group, LLC, BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited, BlackRock (Netherlands) B.V., BlackRock Fund Advisors, BlackRock Asset Management Ireland Limited, BlackRock Institutional Trust Company, National Association, BlackRock Financial Management, Inc., BlackRock Japan Co., Ltd., and BlackRock Investment Management, LLC. The address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055. |
| (3) | Based on a Schedule 13G/A filed with the SEC on February 14, 2022. Federated Hermes, Inc., is the parent holding company of Federated Equity Management Company of Pennsylvania and Federated Global Investment Management Corp., which act as investment advisers to registered investment companies and separate accounts that own shares of our common stock (the “Investment Advisers”). The Investment Advisers are wholly owned subsidiaries of FII Holdings, Inc., which is a wholly owned subsidiary of Federated Hermes, Inc. (the “Parent”). All of the Parent’s outstanding voting stock is held in the Voting Shares Irrevocable Trust for which Thomas R. Donahue, Rhodora J. Donahue and J. Christopher Donahue act as trustees. The address of Federated Hermes, Inc. is 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779. |
| (4) | Consists of (i) 465,228470,111 shares of common stock, and (ii) 697,3591,232,543 shares of common stock which Mr. Lucchino has the right to acquire pursuant to outstanding share options including options that are exercisable or will be exercisable within 60 days of March 31, 2020.2022. |
(3)(5) | Consists of (i) 205,28211,126 shares of common stock, and (ii) 445,464 shares of common stock which Dr. Loose has the right to acquire pursuant to outstanding share options, including options that will be exercisable within 60 days of March 31, 2020. |
(4) | Consists of 194,180439,774 shares of common stock which Dr. LeBel has the right to acquire pursuant to outstanding share options including options that are exercisable or will be exercisable within 60 days of March 31, 2020.2022.
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(5)(6) | Consists of (i) 22,771 shares of common stock, and (ii) 29,999 shares of common stock which Dr. McCubbin has the right to acquire pursuant to outstanding share options that are exercisable or will be exercisable within 60 days of March 31, 2022. |
| (7) | Consists of (i) 17,857 shares of common stock, (ii) 29,213109,899 shares of common stock which Mr. Cohen has the right to acquire pursuant to outstanding share options including options that are exercisable or will be exercisable within 60 days of March 31, 2020,2022, and (iii) 605,820 shares of common stock held by The Marc Andrew Cohen Revocable Trust, of which Mr. Cohen is the Trustee. |
(6)(8) | Consists of (i) 102,089 shares of common stock, (ii) 70,56987,295 shares of common stock which Mr. Barberich has the right to acquire pursuant to outstanding share options including options that are exercisable or will be exercisable within 60 days of March 31, 2020, and (iii) 80,6502022. |
| (9) | Consists of 16,495 shares of common stock held by The Barberich Family Trust,which Ms. Feldmann has the right to acquire pursuant to outstanding share options that are exercisable or will be exercisable within 60 days of which Mr. Barberich is the trustee.March 31, 2022. |
(7)(10) | Consists of 14,846 shares of common stock which Mr. Huang has the right to acquire pursuant to outstanding share options that are exercisable or will be exercisable within 60 days of March 31, 2022. |
| (11) | Consists of (i) 271,238214,326 shares of common stock, (ii) 230,038357,388 shares of common stock which Dr. Langer has the right to acquire pursuant to outstanding share options including options that are exercisable or will be exercisable within 60 days of March 31, 2020,2022, (iii) 8,565 shares of common stock held by The Michael D. Langer 2014 Trust dtd 12/15/2014, (iv) 8,565 shares of common stock held by The Samuel A. Langer 2014 Trust dtd 12/15/2014, and (v) 8,565 shares of common stock held by the Susan K. Langer 2014 Trust dtd 12/15/2014. |
(8)(12) | Consists of (i) 352,509307,116 shares of common stock, (ii) 26,29014,846 shares of common stock which Mr. Marcus has the right to acquire pursuant to outstanding share options including options that are exercisable or will be exercisable within 60 days of March 31, 2020,2022, and (iii) 956,1751,011,730 shares of common stock held by Alexandria Venture Investments, LLC, an entity affiliated with Alexandria Real Estate Equities, Inc., of which Mr. Marcus is theco-founder and the executive chairman. |
(9)(13) | Consists of (i) 3,098,2162,733,203 shares of common stock and (ii) 1,718,4373,235,859 shares of common stock which the executive officers and directors have the right to acquire pursuant to outstanding share options including options that are exercisable or will be exercisable within 60 days of March 31, 2020.2022. |
CERTAIN TRANSACTIONS WITH RELATED PERSONS Policies and Procedures Regarding Transactions with Related Persons Our Board of Directors recognizes that transactions with related persons present a heightened risk of conflicts of interests and/or improper valuation (or the perception thereof). Our Board of Directors has adopted a written policy on transactions with related persons that is in conformity with the requirements for issuers having publicly held common stock listed on the Nasdaq Stock Market. Our related person transaction policy requires that the audit committee approve or ratify related person transactions required to be disclosed pursuant to Item 404(a) of RegulationS-K (which are transactions in which we were or are to be a participant and the amount involved exceeds $120,000 or, for so long as we are a smaller reporting company as defined under the rules of the SEC, the lesser of (i) $120,000 or (2) one percent of the average of our total assets at fiscalyear-end for the last two completed fiscal years, and in which any “related person” as defined under Item 404(a) of RegulationS-K had or will have a direct or indirect material interest). It is our policy that directors interested in a related person transaction will recuse themselves from any vote on a related person transaction in which they have an interest. Each of the transactions described below entered into following the adoption of our related person transaction policy was approved in accordance with such policy. Certain Related Person Transactions Series B preferred stockLeases
From October 2018 to February 2019, we completed the (i) sale of an aggregate of 36,306,533 shares of Series B convertible preferred stock at a purchase price of $0.920439 per share for an aggregate purchase price of approximately $38.5 million and (ii) issued 5,839,463 shares of Series B convertible preferred stock in connection with the conversion of convertible promissory notes at a conversion price of $0.874417 per share.
Series C preferred stock
In July 2019, we completed the sale of an aggregate of 39,492,960 shares of our Series C convertible preferred stock at a purchase price of $1.569884 per share for aggregate gross proceeds of approximately $62.0 million.
The following table sets forth the number of shares of convertible preferred stock acquired by the holders of 5% or more of our outstanding voting stock and certain of our executive officers and directors and their affiliated entities. Each share of preferred stock converted into 0.148467077 shares of common stock upon the closing of our IPO in October 2019.
| | | | | | | | | Participants | | Total
Series B
shares
purchased | | | Total
Series C
shares
purchased | | 5% or Greater Stockholders(1) | | | | | | | | | Perceptive Life Sciences Master Fund, Ltd. | | | — | | | | 12,739,794 | | Directors and Officers(1) | | | — | | | | — | | David L. Lucchino | | | 27,160 | | | | — | | Marc A. Cohen(2) | | | 543,219 | | | | 163,388 | | Timothy J. Barberich(3) | | | 543,219 | | | | 63,698 | | Joel S. Marcus(4) | | | 3,118,161 | | | | — | | Glenn R. Dubin(5) | | | 3,585,244 | | | | 700,688 | | Fred Shane(6) | | | — | | | | 191,096 | |
(1) | Additional details regarding these stockholders and their equity holdings are provided in this Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”
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(2) | Includes shares purchased by The Marc Andrew Cohen Revocable Trust, of which Marc A. Cohen is the trustee.
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(3) | Includes shares purchased by The Barberich Family Trust, of which Timothy J. Barberich is the trustee.
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(4) | Includes 2,278,345 shares of Series B convertible preferred stock purchased by Alexandria Venture Investments, LLC, an affiliate of Alexandria Real Estate Equities, Inc. (“Alexandria”). Mr. Marcus is the executive chairman of Alexandria.
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(5) | Includes shares purchased by DF Investment Partners, LLC, an entity affiliated with Mr. Dubin. Mr. Dubin resigned from our board of directors in July 2019.
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(6) | Includes shares purchased by Axil Life Science & Healthcare Fund I L.P., or Axil, an entity affiliated with Mr. Shane. Mr. Shane served on our board of directors from October 2018 to March 2019. Axil was also the holder of shares of Series A preferred stock and Series B preferred stock of our subsidiary, Frequency Japan K.K., or Frequency Japan. See “—Frequency Japan.”
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Leases
In December 2016, we entered into a lease for laboratory, office and storage facilities in Woburn, Massachusetts withARE-MA Region No. 20, LLC, an entity affiliated with Alexandria. In addition, we lease an office in Cambridge, Massachusetts on a monthly basis from an entity affiliated with Alexandria. Joel S. Marcus, one of our directors, is executive chairman of Alexandria. Under the lease, which was amended in November 2019, and January 2020 and expiresDecember 2020, and terminated in February 2025,May 2021, we paypaid monthly base rent and operating expenses. The total rent paid under these leasesthis lease was $340$484 thousand and $349$230 thousand for the years ended December 31, 20182020 and 2019,2021, respectively. Aggregate future rentalThere were also early termination payments of $100 thousand in both 2020 and 2021. Massachusetts Institute of Technology License Agreement In December 2016, we entered into an exclusive patent license agreement, or the MIT License Agreement, with the Massachusetts Institute of Technology, or MIT. The patents in-licensed by us from MIT pursuant to the MIT License claim inventions created by, among others, Robert Langer, one of our directors. Pursuant to MIT policy, inventors of intellectual property invented at MIT, including the inventors of patents licensed to us under the lease were $2,935 thousand asMIT License, are entitled to a portion of December 31, 2019. Frequency Japanthe net royalty income derived by MIT from such inventions.
In January 2018, our Japanese subsidiary Frequency Japan completed the sale of 2,000,000 shares of its Series A preferred stock to Axil at a purchase price of 100 yen ($0.9272997) per share, for an aggregate purchase price of approximately 200.0 million yen ($1.8 million). In October 2018, Frequency Japan completed the sale of 2,248,200 shares of Series B preferred stock to Axil at a purchase price of 100 yen ($0.9272997) per share, for an aggregate purchase price of approximately 224.8 million yen ($2.1 million). Translations from yen to dollars are based on 107.84 yen to $1.00 exchange rate as of June 28, 2019. From October 2018 to MarchJuly 2019, Fred Shane, who is affiliated with Axil, served on our board of directors. In connection with each such sale, we entered into a purchase option agreementLicense and Collaboration Agreement with AxilAstellas, or the Astellas Agreement, under which provided that, uponwe granted Astellas an exclusive, royalty-bearing, sub-licensable, nontransferable license to certain patent rights to research, develop, manufacture, have manufactured, use, seek and secure regulatory approval for, commercialize, offer for sale, sell, have sold and import, and otherwise exploit licensed products containing both a GSK-3 inhibitor and an HDAC inhibitor, including the closingproduct candidate FX-322, outside of our IPO, Axil has the option to convert its shares of Series A preferred stock and Series B preferred stock of Frequency Japan into 673,605 shares of our common stock. In the event that certain liquidation events occur priorUnited States. Pursuant to the conversionAstellas Agreement, we received an $80 million upfront payment in July 2019, or the Astellas Royalty Payment.
Pursuant to the MIT License Agreement, we are obligated to pay royalties and a portion of Axil’s preferred shares in Frequency Japan, Axil hassublicensing income to MIT. We were required to pay MIT a rightroyalty of $16 million on the $80 million Astellas Royalty Payment. Dr. Langer is entitled to sell,receive a portion of the amounts we pay to MIT under the MIT License, including the Astellas Royalty Payment and future milestone payments or royalties, if any, that we have a right to buy, all the shares of Series A preferred stock and Series B preferred stock of Frequency Japan held by Axil at a purchase price approximately equal to what Axil would have received if Axil had elected to convert its shares of Series A preferred stock and Series B preferred stock of Frequency Japan into shares of our common stock. We also issued and sold 10,000 shares of our SeriesA-1 preferred stock at a purchase price of $0.75 per share and 10,000 shares of our SeriesB-1 preferred stock at a purchase price of $0.920439 per share toFT-FJ Investment, LLC, orFT-FJ, an entity controlled by us.FT-FJ then granted to Axil an irrevocable proxy to vote the shares of SeriesA-1 and SeriesB-1 preferred stock held byFT-FJ. Each share of SeriesA-1 preferred stock had 35.0 times the voting power of one share of common stock and each share of SeriesB-1 preferred stock had 32.2 times the voting power of one share of common stock.
In August 2019, we entered into an agreement with Axil,FT-FJ, and Frequency Japan,may receive pursuant to which, upon the closing of our IPO: (i) Axil converted its shares of preferred stock held in Frequency Japan into shares of our common stockAstellas Agreement. Accordingly, Dr. Langer received $1.98 million and terminated its proxy over$0.01 million from MIT under the shares of SeriesA-1MIT Policy during the year ended December 31, 2020 andB-1 preferred stock held byFT-FJ and(ii) FT-FJ forfeited its shares of SeriesA-1 and SeriesB-1 preferred stock. 2021, respectively.
Investors’Registration rights agreement
We entered into a second amended and restated investors’ rights agreement, or the Investors’ Rights Agreement, in July 2019 with each holder of our preferred stock, which includes each holderincluded certain holders of more than 5% of our capitalcommon stock at the time and certain of our directors and executive officers. The Investors’ Rights Agreement imposes certain affirmative obligations on us, and also granted certain rights to the holders, including certain information rights, rights to participate in future stock issuances, and certain registration rights with respect to the registrable securities held by them as described below. Certain provisions of the Investors’ Rights Agreement terminated upon the closing of our IPO. Voting agreement
We entered into a second amended and restated voting agreement, or the Voting Agreement, in July 2019 pursuant to which the stockholders party to the Voting Agreement agreed to elect (i) one director designated by the holders of a majority of the outstanding shares of our Series A convertible preferred stock andSeries A-1 convertible preferred stock, who was Marc A. Cohen, (ii) one director designated by either Axil or Taiwania Bioventures, who was Michael Huang, (iii) one director designated by Perceptive Life Sciences Master Fund, Ltd., or Perceptive, who did not designate a director, (iv) our chief executive officer, (v) one director designated by the holders of a majority of the outstanding shares of our common stock, who was Robert S. Langer, Sc.D., (vi) one director who was independent from our company and any stockholder party to the Voting Agreement and designated by a majority of the other directors, who was Timothy J. Barberich, and (vii) two directors who were designated by a majority of the other directors, who were Joel S. Marcus with the second designation vacant.
The above provision of the voting agreement terminated upon the closing of our IPO, and members previously elected to our Board of Directors pursuant to the voting agreement will continue to serve as directors until the election and qualification of his successor or his earlier death, resignation or removal.
Right of first refusal andco-sale agreement
We entered into a second amended and restated right of first refusal andco-sale agreement, or the First Refusal andCo-Sale Agreement, in July 2019 with certain holders of our common stock, or the Key Holders, and each holder of our convertible preferred stock, which includes each holder of more than 5% of our capital stock and certain of our directors and executive officers, pursuant to which we had a right of first refusal in respect of certain sales of securities by our Key Holders. To the extent we did not exercise such right in full, the holders of convertible preferred stock were granted certain rights of first refusal andco-sale in respect of such sale. The First Refusal andCo-Sale Agreement terminated immediately prior to the consummation of our IPO.
Registration rights
The Investors’ Rights Agreement grants the parties thereto certain registration rights in respect of the “registrable securities” held by them, which securities include (1) the shares of our common stock issuable or issued upon the conversion of shares of our convertible preferred stock, (2) any shares of our common stock, or any common stock issued or issuable upon conversion and/or exercise of any of our securities acquired by the parties after the date of the Investors’ Rights Agreement, and (3) any shares of our common stock issued as a dividend or other distribution with respect to, or in exchange for, or in replacement of, the shares described in the foregoing clauses (1) and (2). The registration of shares of our common stock pursuant to the exercise of these registration rights would enable the holders thereof to sell such shares under the Securities Act when the applicable registration statement is declared effective. Under the Investors’ Rights Agreement, we will pay all expenses relating to such registrations, including the reasonable fees of one special counsel for the participating holders, and the holders will pay all underwriting discounts and commissions relating to the sale of their shares. The Investors’ Rights Agreement also includes customary indemnification and procedural terms. Form S-1 registration rights If at any time the holders of at least 40% of the registrable securities request in writing that we effect a registration with respect to at least 25% of such registrable securities then outstanding (or a lesser percent if the anticipated aggregate offering price, net of selling expenses, would exceed $10.0 million), we shall be requiredare obligated to register their shares; provided, however, that we will be able to defer such registration if it is the good faith judgment of our Board of Directors that it would be materially detrimental to our Company and our stockholders for such registration to be filed; provided, further, that this right may not be invoked more than once in any 12 month period.shares. We are obligated to effect at most two registrations in response to these demand registration rights. If the holders requesting registration intend to distribute their shares by means of an underwriting, the managing underwriter of such offering will have the right to limit the numbers of shares to be underwritten for reasons related to the marketing of the shares. Piggyback registration rights If at any time we propose to register any shares of our common stock under the Securities Act, subject to certain exceptions, the holders of registrable securities will be entitled to notice of the registration and to include their registrable securities in the registration. If our proposed registration involves an underwriting, the managing underwriter of such offering will have the right to limit the number of shares to be underwritten for reasons related to the marketing of the shares. Form S-3 registration rights If, at any time after we become entitled under the Securities Act to register our shares on a registration statement onForm S-3, the holders of the registrable securities request in writing that we effect a registration with respect to registrable securities at an aggregate price to the public in the offering of at least $1,000,000, net of expenses borne by the holders, we will be requiredare obligated to effect such registration; provided, however, that we will be ableregistration. We are not obligated to defer such registration if it is the good faith judgment of the our Board of Directors that it would be materially detrimental to our Company and our stockholder for such registration to be filed; provided, further, that this right may not be invokedeffect more than onceone S-3 registration in any 12 month period. Expenses and indemnification Ordinarily, other than underwriting discounts and commissions, we will be required to pay all expenses incurred by us related to any registration effected pursuant to the exercise of these registration rights. These expenses may include all registration, filing and qualification fees, printing and accounting fees, fees and disbursements of our counsel, and reasonable fees and disbursements of a counsel for the selling securityholders. Additionally, we have agreed to indemnify selling stockholders for damages, and any legal or other expenses reasonably incurred, arising from or based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement, an omission or alleged omission to state a material fact required to be stated in any registration statement or necessary to make the statements therein not misleading, or any violation or alleged violation by the indemnifying party of securities laws, subject to certain exceptions. Termination of registration rights The registration rights expire on the earlier of (1) the date that is five years after the closing of our IPO and (2) with respect to each stockholder, at such time as such stockholder can sell all of its shares pursuant to Rule 144 of the Securities Act or another similar exemption under the Securities Act during any three month period without registration, or (3) the closing of a Deemed Liquidation Event, as defined in our restated certificate of incorporation.registration. Indemnification agreements We enteredenter into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us or will require us to indemnify each director and executive officer (and in certain cases their related venture capital funds) 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. Participation in Our Initial Public OfferingPrivate Placement
On October 7, 2019, we completed our IPO in whichIn July 2020, we issued and sold an aggregate of 6,325,0002,350,108 shares of our common stock at a public offeringpurchase price of $14.00$18.00 per share. share to new and existing investors in a private placement for net proceeds of $40.1 million after deducting placement agent fees and offering expenses, or the Private Placement. In connection with the Private Placement, we entered into a Registration Rights Agreement with the investors purchasing shares in the Private Placement. Pursuant to the Registration Rights Agreement, we filed a registration statement with the SEC which was declared effective on September 3, 2020, registering the resale of the shares sold in the Private Placement.
The following table sets forth the aggregate number of shares of common stock acquired in the Private Placement by the holders of more than 5% of our common stock acquired by holders of 5% or moreat the time and one of our outstanding voting stock and certain of our executive officers and directors and theirdirector’s affiliated entities in the IPO.entities. | | | | | | | | | Participants | | Shares of
Common
Stock | | | Value
(at $14.00 per
share) | | 5% or Greater Stockholders (1) | | | | | | | | | Perceptive Life Sciences Master Fund, Ltd. | | | 1,142,857 | | | $ | 15,999,998 | | Directors and Officers (1) | | | | | | | | | Marc A. Cohen | | | 17,857 | | | $ | 249,998 | | Richard Mitrano | | | 107 | | | $ | 1,498 | |
| | | | | Participants | | Total
shares
purchased | | More Than 5% Stockholders(1) | | | | | RTW Investments, LP(2) | | | 300,000 | | Wasatch Advisors, Inc.(3) | | | 939,000 | | Perceptive Life Sciences Master Fund, Ltd | | | 222,222 | | Federated Hermes, Inc.(4) | | | 388,888 | | Director(1) | | | | | Joel S. Marcus(5) | | | 55,555 | |
| (1) | Additional details regarding these stockholders and their equity holdings are provided abovein this Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters”Matters.” |
| (2) | Consists of (i) 196,448 shares purchased by RTW Master Fund, Ltd., (ii) 87,344 shares purchased by RTW Innovation Master Fund, Ltd., and (iii) 16,208 shares purchased by RTW Venture Fund Limited. |
| (3) | Consists of (i) 438,000 shares purchased by Wasatch Small Cap Growth Fund, (ii) 280,000 shares purchased by Wasatch Ultra Growth Fund, (iii) 155,000 shares purchased by Wasatch Micro Cap Fund, and (iv) 66,000 shares purchased by Wasatch Micro Cap Value Fund. |
| (4) | Consists of (i) 205,800 shares purchased by Federated Hermes Kaufmann Fund, a portfolio of Federated Hermes Equity Funds, (ii) 178,000 shares purchased by Federated Hermes Kaufmann Small Cap Fund, a portfolio of Federated Hermes Equity Funds, and (iii) 5,088 shares purchased by Federated Hermes Kaufmann Fund II, a Portfolio of Federated Hermes Insurance Series. |
| (5) | Consists of 55,555 shares purchased by Alexandria Venture Investments, LLC, an affiliate of Alexandria Real Estate Equities, Inc. (“Alexandria”). Mr. Marcus is the executive chairman of Alexandria. |
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS Stockholders who intend to have a proposal considered for inclusion in our proxy materials for presentation at our annual meeting of stockholders to be held in 20212023 (the “2021“2023 Annual Meeting”) pursuant to Rule14a-8 under the Exchange Act must submit the proposal to our Secretary at our offices at 19 Presidential Way, Woburn,75 Hayden Avenue, Lexington, MA 0180102421 in writing not later than December 30, 2020.2022. Stockholders intending to present a proposal at our 20212023 Annual Meeting, but not to include the proposal in our proxy statement, or to nominate a person for election as a director, must comply with the requirements set forth in our Bylaws. Our Bylaws require, among other things, that our Secretary receive written notice from a stockholder of record of their intent to present such a proposal or nomination not earlier than the 120 th day and not later than the 90 th day prior to the anniversary of the preceding year’s annual meeting of stockholders. Therefore, we must receive notice of such a proposal or nomination for the 20212023 Annual Meeting no earlier than the close of business on February 11, 202121, 2023 and no later than the close of business on March 13, 2021.23, 2023. The notice must contain the information required by our Bylaws. In the event that the date of the 20212023 Annual Meeting is more than 30 days before or more than 60 days after June 11, 2021,21, 2023, then our Secretary must receive such written notice not earlier than the close of business on the 120 th day prior to the 20212023 Annual Meeting and not later than the close of business of the 90 th day prior to the 20212023 Annual Meeting or, if later, the close of business of the 10 th day following the day on which public disclosure of the date of such meeting is first made by us. SEC rules permit management to vote proxies in its discretion in certain cases if the stockholder does not comply with this deadline and, in certain other cases notwithstanding the stockholder’s compliance with this deadline. In addition to satisfying the foregoing requirements under our Bylaws, to comply with the universal proxy rules (once they become effective), stockholders who intend to solicit proxies in support of director nominees other than our nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 24, 2023. We reserve the right to reject, rule out of order or take other appropriate action with respect to any proposal that does not comply with these or other applicable requirements. We intend to file a Proxy Statement and WHITE proxy card with the SEC in connection with the solicitation of proxies for our 2023 Annual Meeting of Stockholders. Stockholders may obtain our Proxy Statement (and any amendments and supplements thereto) and other documents as and when filed by us with the SEC without charge from the SEC’s website at: www.sec.gov. HOUSEHOLDING OF PROXY MATERIALS SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and notices with respect to two or more stockholders sharing the same address by delivering a single proxy statement or a single notice addressed to those stockholders. This process, which is commonly referred to as “householding”, provides cost savings for companies and helps the environment by conserving natural resources. Some brokers also household proxy materials, delivering a single proxy statement or notice to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. We agree to deliver promptly, upon written or oral request, a separate copy of the Notice or proxy materials, as requested, to any stockholder at the shared address to which a single copy of those documents was delivered. If you would like to receive a separate copy of these documents, or if you receive multiple copies and would like to receive a single copy of these documents, please follow the instructions found on the Notice, by telephone at1-866-648-8133 or by emailing paper@investorelections.com and providing the Control Number found on your proxy card. 20192021 ANNUAL REPORT
Our 20192021 Annual Report, including our Annual Report on Form10-K for the fiscal year ended December 31, 2019,2021, is being mailed with this Proxy Statement to those stockholders that receive this Proxy Statement in the mail. Stockholders that receive the Notice can access our 20192021 Annual Report, including our Annual Report on Form10-K for 2019,2021, at www.proxydocs.com/FREQ. Our Annual Report onForm 10-K for the fiscal year ended December 31, 20192021 has also been filed with the SEC. It is available free of charge at the SEC’s website at www.sec.gov. Upon written request by a stockholder, we will mail, without charge a copy of our Annual Report onForm 10-K, including the financial statements and financial statement schedules, but excluding exhibits. Exhibits to our Annual Report onForm 10-K are available upon payment of a reasonable fee, which is limited to our expenses in furnishing the requested exhibit. All requests should be directed to Frequency Therapeutics, Inc., attn: Secretary, 19 Presidential Way, Woburn,75 Hayden Avenue, Lexington, MA 01801.02421. Your vote is important. Please promptly vote your shares by following the instructions for voting on the Notice or, if you received a paper or electronic copy of our proxy materials, by completing, signing, dating and returning your proxy card by mail or by Internet or telephone voting as described on your proxy card. In light of potential disruptions to mail service due the novel coronavirus pandemic, we recommend that you vote by telephone or the Internet.card | | By Order of the Board of Directors | | /s/ Michael D. BookmanJames P. Abely | Michael D. Bookman | DeputyAssociate General Counsel and Secretary |
Woburn,Lexington, Massachusetts
April 29, 20202022 | | | | | | | 
P.O. BOX 8016, CARY, NC 27512-9903 | | | | YOUR VOTE IS IMPORTANT! PLEASE VOTE BY: | | | | 
| | INTERNET | | | | Go To: www.proxypush.com/FREQ | | | | • Cast your vote online | | | | • Have your Proxy Card ready | | | | | | • Follow the simple instructions to record your vote | | | | 
| | PHONE Call 1-866-390-5362 | | | | • Use any touch-tone telephone | | | | • Have your Proxy Card ready | | | | • Follow the simple recorded instructions | | | | 
| | MAIL | | | | • Mark, sign and date your Proxy Card | | | | • Fold and return your Proxy Card in the postage-paid envelope provided | | | |  | | “ALEXA, VOTE MY PROXY” | | | | • Open Alexa app and browse skills | | | | • Search “Vote my Proxy” | | | | • Enable skill | | | |  | | TO ATTEND the Annual Meeting of Frequency | | | | Therapeutics, Inc., please visit www.proxydocs.com/FREQ for virtual meeting registration details. |
| | | | Frequency Therapeutics, Inc. | |  |
Annual Meeting of Stockholders ANNUAL MEETING OF FREQUENCY THERAPEUTICS, INC.For Stockholders of record as of April 22, 2022
| | | Date:
TIME: | | Thursday,Tuesday, June 11, 2020
21, 2022 9:00 AM, Eastern Time | Time:
| | 9:00 a.m. (Eastern Time)
| Place:
PLACE: | | Annual Meeting to be held live via the Internet - please visit | | | www.proxydocs.com/FREQ for more details. |
Please make your marks like this: ☒ Use dark black pencil or pen only
The Board of Directors Recommends a VoteFOReach of the director nominees listed in proposal 1 andFOR proposal 2.
| | | | | 1:
| | To elect two (2) class I directors, each to serve until the 2023 annual meeting of our stockholders.
| Nominees:
| | | | | (01) Marc A. Cohen
| | | | | | | | (02) David L. Lucchino
| | |
| | | | | Vote For
All Nominees
| | Withhold Vote From
All Nominees
| | Vote For
All Except
| ☐ | | ☐ | | ☐ |
| | | INSTRUCTIONS: To withhold authority to vote for some but not all nominees, mark the “Vote For All Except” box and write the number provided above next to the nominee’s name in the space provided to the right. | | |
| | | | | | | | | | | | | | | For | | Against | | Abstain | | | 2:
| | To ratify, in a non-binding vote, the appointment of RSM US LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020.
| | ☐ | | ☐ | | ☐ | | | | | | | | | | | TO ATTEND the Annual Meeting of Frequency Therapeutics, Inc., please visit www.proxydocs.com/FREQ for virtual meeting registration details. | | | | | | | | | | | | | | | | | Authorized Signatures - This section must becompleted for your Instructions to be executed. | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | Please Sign Here | | | | Please Date Above | | | | | | | | | | | | | | Please Sign Here | | | | Please Date Above | | | | | Please sign exactly as your name(s) appears on the direct registration statement evidencing your shares or, if applicable, your stock certificate. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include their title and authority. Corporations should provide the full name of corporation and the title of the authorized officer signing the proxy.
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|  Please separate carefully at the perforation and return just this portion in the envelope provided. |
Annual Meeting of Frequency Therapeutics, Inc.
to be held on Thursday, June 11, 2020
for Holders as of April 13, 2020
This proxy is being solicited on behalf of the Board of Directors | | | | | | | | | | | | | | | VOTE BY: | | | | | | |  INTERNET | | | | | |  TELEPHONE |
| | | | | | | | | | | Go To
| | | | | | | | Call | www.proxypush.com/FREQ
| | | | | | | | 866-390-5362 |
| | | | | | | | | | | • | | Cast your vote online 24 hours a day/7 days a week.
| | | | OR | | • | | Use any touch-tone telephone toll-free 24 hours a day/7 days a week.
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| | Have your Proxy Card/Voting Instruction Form ready.
| | | |  MAIL
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| | Have your Proxy Card/Voting Instruction Form ready.
Follow the simple recorded instructions.
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| | View Meeting Documents.
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| | | | | | | | | | | OR | | • | | Mark, sign and date your Proxy Card/Voting Instruction Form.
| | | | | • | | Detach your Proxy Card/Voting Instruction Form.
| | | | | | | • | | Return your Proxy Card/Voting Instruction Form in the
| | | | | | | | | postage-paid envelope provided.
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The undersigned hereby appoints David L. Lucchino and Michael D. BookmanJames P. Abely as the true and lawful attorneys of the undersigned, with full power of substitution and revocation, and authorizes each of them, to vote all the shares of common stock of Frequency Therapeutics, Inc. which the undersigned is entitled to vote at said meeting and any adjournment thereof upon the matters specified and upon such other matters as may be properly brought before the meeting or any adjournment thereof, conferring authority upon such true and lawful attorneys to vote each in his discretion on such other matters as may properly come before the meeting and revoking any proxy heretofore given. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, SHARES WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS IN ITEM 1 AND FOR THE PROPOSAL IN ITEM 2. THE PROXIES WILL VOTE IN THEIR DISCRETION ON ANY OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENT THEREOF. You are encouraged to specify your choice by marking the appropriate box (SEE REVERSE SIDE) but you need not mark any box if you wish to vote in accordance with the Board of Directors’ recommendation. The Named Proxies cannot vote your shares unless you sign (on the reverse side) and return this card. PLEASE BE SURE TO SIGN AND DATE THIS PROXY CARD AND MARK ON THE REVERSE SIDE
Frequency Therapeutics, Inc. Annual Meeting of Stockholders Please make your marks like this:  THE BOARD OF DIRECTORS RECOMMENDS A VOTE: FOR ON PROPOSALS 1 AND 2 | | | | | | | | | | | | | PROPOSAL | | YOUR VOTE | | BOARD OF
DIRECTORS
RECOMMENDS | | 1. | | To elect two (2) class III directors, each to serve until the 2025 annual meeting of our stockholders. | | | | | | | |  | | | | | FOR | | | | WITHHOLD | | | 1.01 Timothy J. Barberich | |  | | | | | | FOR | | | | | | | | | | | | | | 1.02 Robert S. Langer | | | | | | | | PROXY TABULATOR FOR
FREQUENCY THERAPEUTICS, INC.
c/o MEDIANT COMMUNICATIONS
P.O. BOX 8016
CARY, NC 27512-9903
| | | | | | | | | FOR | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | FOR | | AGAINST | | ABSTAIN | | | | 2. | | To ratify, in a non-binding vote, the appointment of RSM US LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022. | | | | | | | | FOR | | | | | | | | | NOTE: To transact such other business as may properly come before the Annual Meeting or any continuation, postponement or adjournment thereof. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Please separate carefully at the perforation and return just this portion in the envelope provided.
Proxy for Annual Meeting of Stockholders to be held on Thursday, June 11, 2020
This proxy is being solicited on behalf of the Board of Directors
Please vote, date and sign this Proxy on the other side and return it in the enclosed envelope.
The Stockholder signing on the reverse side (the “undersigned”), having received the Annual Report and Proxy Statement, hereby appoint(s) David L. Lucchino and Michael D. Bookman and each of them, Proxies of the undersigned (with full power of substitution) to attendTO ATTEND the Annual Meeting of Frequency Therapeutics, Inc. (the “Company”), please visit www.proxydocs.com/FREQ for virtual meeting registration details.
Authorized Signatures - Must be completed for your instructions to be executed. Please sign exactly as your name(s) appears on your account. If held on Thursday, June 11, 2020,in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and all adjournmentsauthority. Corporations should provide full name of corporation and postponements thereof (the “Meeting”), and to vote all sharestitle of Common Stock ofauthorized officer signing the Company that the undersigned would be entitled to vote, if personally present, in regard to all matters that may properly come before the Meeting.Proxy/Vote Form. The undersigned hereby confer(s) upon the Proxies, and each of them, discretionary authority to consider and act upon such business, matters or proposals as may properly come before the Meeting.The Proxy, when properly executed, will be voted in the manner specified herein. If no specification is made, the Proxies intend to vote FOR all nominees for director in Proposal 1 and FOR proposal 2.
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