If on April
19, 2021,15, 2024, your shares were registered directly in your name with our transfer agent, ComputerShare Trust Company, N.A., then you are a stockholder of record. Stockholders of record may vote by using the Internet, by telephone or (if you received a proxy card by mail) by mail as described below. Stockholders also may attend the virtual meeting and vote electronically. If you hold shares through a bank or broker, please refer to your proxy card, Notice or other information forwarded by your bank or broker to see which voting options are available to you.
| • | | You may vote by using the Internet at www.proxypush.com/TARS by following the instructions for Internet voting on the Notice or proxy card mailed to you. Internet voting is available 24 hours a day and will be accessible until 11:59 p.m. Eastern Time on June 14, 2021.
•You may vote by using the Internet at www.proxypush.com/TARS by following the instructions for Internet voting on the Notice or proxy card mailed to you. Internet voting is available 24 hours a day and will be accessible until 11:59 p.m. Eastern Time on June 12, 2024. Easy-to-follow instructions allow you to vote your shares and confirm that your instructions have been properly recorded. •Easy-to-follow instructions allow you to vote your shares and confirm that your instructions have been properly recorded. |
You may vote by telephone by dialing (866) 390-5415 and following the instructions for voting by phone on the Notice or (if you received a proxy card by mail) the proxy card mailed to you. Telephone voting is available 24 hours a day and will be accessible until 11:59 p.m. Eastern Time on June 14, 2021. 12, 2024. Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions have been properly recorded.
•You may vote by mail by requesting, completing and mailing in a paper proxy card, as outlined in the Notice. The method you use to vote will not limit your right to vote at the Annual Meeting if you decide to virtually attend the Annual Meeting.
Mailed proxy cards must be received by June 12, 2024. | • | | If you wish to vote electronically at the Annual Meeting, the unique link provided to you via email after registering in advance at www.proxydocs.com/TARSusing the procedure described above, and using your unique control number that was included in the proxy materials that you received in the mail.
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•You may vote electronically at the Annual Meeting using the unique link provided to you via email after registering in advance at www.proxydocs.com/TARS using the procedure described above, and using your unique control number that was included in the proxy materials that you received in the mail.
If on April 19, 2021,15, 2024, you held your shares in “street name” (held in the name of a bank, broker or other holder of record), you will receive instructions from the holder of record. You must follow the instructions of the holder of record in order for your shares to be voted. Telephone and Internet voting also will be offered to stockholders owning shares through certain banks and brokers. If your shares are not registered in your own name and you plan to vote your shares in person at the annual meeting,Annual Meeting, you should contact your broker or agent to obtain a legal proxy or broker’s proxy card and bring it to the Annual Meeting in order to vote.
You do not need to attend the virtual Annual Meeting to vote your shares. Shares represented by valid proxies, received in time for the Annual Meeting and not revoked prior to the Annual Meeting, will be voted at the Annual Meeting. For instructions on how to change or revoke your proxy, see “Can I change my vote after submitting my proxy?” below.
What if I return a proxy card but do not make specific choices?
If you return a signed and dated proxy card without marking any voting selections, your shares will be voted (i) “For” the election of bothall two director nominees for Class I director and (ii) “For” ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021.2024, as disclosed herein. However, if you are not a record holder, such as where your shares are held through a broker, nominee, fiduciary or other custodian, you must provide voting instructions to the record holder of the shares in accordance with the record holder’s requirements in order for your shares to be properly voted. If any other matter is properly presented at the meeting, your proxy (one of the individuals named on your proxy card) will vote your shares using his or her best judgment. Who is paying for this proxy solicitation?
We will pay for the entire cost of soliciting proxies. In addition to these mailed proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.
What does it mean if I receive more than one proxy card or Notice?
If you receive more than one proxy card or Notice, your shares are registered in more than one name or are registered in different accounts. Please complete, sign and return each proxy card or submit a proxy for each Notice to ensure that all of your shares are voted. What if I share an address with another stockholder of Tarsus?
If you reside at the same address as another Tarsus stockholder, you and other Tarsus stockholders residing at the same address may receive a single copy of the Important Notice Regarding theInternet Availability of Proxy Materials. This process, which has been approved by the
SEC, is called “householding.” Once you receive notice from your broker or other nominee record holder that it will be “householding” our proxy materials, the practice will continue until you are otherwise notified or until you notify them that you no longer want to participate in the practice. Stockholders who participate in householding will continue to have access to and utilize separate proxy voting instructions.
If you wish to receive a separate copy of the Important Notice Regarding theInternet Availability of Proxy Materials, you may do so by making a written or oral request to: Tarsus Pharmaceuticals, Inc., 15440 Laguna Canyon Road, Suite 160, Irvine, California 92618, Attention: Corporate Secretary, or an oral request by calling (949) 409-9820.418-1801. Upon your written or oral request, we will promptly deliver a separate copy to you. If you want to receive your own set of our proxy materials in the future or, if you share an address with another stockholder and together both of you would like to receive only a single set of proxy materials, you should contact your broker or other nominee record holder directly or you may contact use at the above address and phone number. The Annual Report, Proxy Statementproxy statement and Notice are also available at www.proxydocs.com/TARS.
Can I change my vote after submitting my proxy?
Yes. You can revoke your proxy at any time before the final vote at the Annual Meeting. You may revoke your proxy in any one of three ways:
•If you receive a proxy card, you may submit another properly completed proxy card with a later date.
•You may re-vote by Internet or by telephone as instructed above.
•You may send a written notice that you are revoking your proxy to the Corporate Secretary of the Company at 15440 Laguna Canyon Road, Suite 160, Irvine, California 92618.
| • | | You may virtually attend the Annual Meeting and vote electronically by going to www.proxydocs.com/TARSin advance of the meeting. Upon completing your registration, you will receive further instructions via email, including a unique link that will allow you access to the Annual Meeting and to vote and submit questions during the Annual Meetingusing your unique control number that was included in the Proxy Materials that you received in the mail. Simply attending the meeting will not, by itself, revoke your proxy.
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•You may virtually attend the Annual Meeting and vote electronically by registering at www.proxydocs.com/TARS in advance of the Annual Meeting. Upon completing your registration, you will receive further instructions via email, including a unique link that will allow you access to the Annual Meeting and to vote and submit questions during the Annual Meeting using your unique control number that was included in the Proxy Materials that you received in the mail. Simply attending the meeting will not, by itself, revoke your proxy.
Who will solicit proxies on behalf of our Board of Directors?
Proxies may be solicited on behalf of our Board of Directors, without additional compensation, by the Company’s directors and employees.
The original solicitation of proxies by mail may be supplemented by telephone, telegram, facsimile, electronic mail, and personal solicitation by our directors and officers (who will receive no additional compensation for such solicitation activities). You may also be solicited by advertisements in periodicals, press releases issued by us and postings on our corporate website at www.tarsusrx.com. Unless expressly indicated otherwise, information contained on our corporate website is not part of this proxy statement. Votes will be counted by the inspector of election appointed for the Annual Meeting, who will separately count “For”“FOR” and “Against”“AGAINST” votes, “WITHHELD” votes abstentions and broker non-votes. Abstentions will be counted as present for purposes of determining the presence of a quorum. For Proposal 1, abstentionsdirectors are elected by a plurality vote. “Plurality” means that the two director nominees who receive the largest number of votes cast “FOR” such nominees will be elected as directors. As a result, any shares not voted “FOR” a particular nominee (whether as a result of a “WITHHOLD” vote, abstention or a broker non-vote, as described in the next paragraph) will not be considered as votes cast for or withheld for any director,counted in such nominee’s favor and will therefore have no effect on the outcome of the vote.election. . For Proposal 2, abstentionsmore “FOR” votes than “AGAINST” votes cast is required to ratify the appointment of Ernst & Young LLP as our independent registered accounting firm. Abstentions will not be considered as votes cast for or against anythis proposal, and will therefore have no effect on the outcome of the vote. Broker non-votes, as described in the next paragraph, have no effect and will not be counted towards the vote total for such proposals. If your shares are held by your bank or broker as your nominee (that is, in “street name”), you will need to obtain a voting instruction form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker to vote your shares. If you do not give instructions to your broker, your broker can vote your shares with respect to “discretionary” items, but not with respect to “non-discretionary”“non-discretionary” items. Discretionary items are proposals considered routine under the rules of the New York Stock Exchange (“NYSE”) on which your broker may vote shares held in street name without your voting instructions. Proposal 2 for the ratification of the appointment of Ernst & Young LLP is considered routine and therefore brokers generally have discretionary authority to vote shares held in street name. However, several large brokers have recently announced that they were eliminating the practice of discretionary voting of uninstructed shares, including on matters generally identified as “routine”. On non-discretionary items for which you do not give your broker instructions, the shares will be treated as broker non-votes. Under current NYSE rules, any election of a member of the Board of Directors, whether contested or uncontested, is considered “non-discretionary”“non-discretionary” and therefore brokers are not permitted to vote your shares held in street name for the election of directors in the absence of instructions from you. Proposal 1 is a non-discretionary matter and therefore if you hold your shares through a broker, nominee, fiduciary or other custodian, your shares will not be voted on those proposals unless you provide voting instructions to the record holder.
How many votes are needed to approve each proposal?
•For Proposal 1, directors are elected by a plurality of the votes cast with respect to such director. This means that nominees receiving the most “ForFOR” votes will be elected. Abstentions and broker non-votes are not considered votes cast on this proposal and will not have any effect on the election of directors.
•To be approved, Proposal 2, to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021,2024, must receive amore “ForFOR” vote from the majority of thevotes than “AGAINST” votes cast at the Annual Meeting. Abstentions are not counted as a vote cast for or against the proposal and therefore have no effect on the outcome of the vote. Broker non-votes, if any, are counted towards a quorum, but are not counted for any purpose in determining whether this matter has been approved.
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if a majority of all shares outstanding on April
19, 2021,15, 2024, the record date, are represented at the meeting by stockholders present online or by proxy. On the record date, there were in the aggregate
20,703,85237,776,665 shares of Common Stock outstanding and entitled to vote. Thus
10,351,92718,888,333 shares must be represented by stockholders present at the Annual Meeting or by proxy to have a quorum.
Your shares will be counted towards the quorum only if you submit a valid proxy vote or vote at the Annual Meeting. Abstentions and broker
non-votes will be counted towards the quorum requirement.
How will my shares be voted if I mark “Abstain” on my proxy card?
We will count a properly executed proxy card marked “Abstain” as present for purposes of determining whether a quorum is present, but the shares represented by that proxy card will not be voted at the Annual Meeting for the proposals so marked.
How can I find out the results of the voting at the Annual Meeting?
Preliminary voting results will be announced at the Annual Meeting. Final voting results will be available on a Current Report on
Form 8-K filed with the SEC within four business days after the end of the Annual Meeting.
When are stockholder proposals and nominations for director due for next year’s Annual Meeting?
If you wish to submit a proposal to be considered for inclusion in next year’s proxy materials, your proposal must be in proper form according to SEC Regulation 14A, Rule 14a-8 and received by the Secretary of the Company on or before December 31, 2021.27, 2024. If you wish to submit a proposal to be presented at the 20222025 Annual Meeting of Stockholders, but which will not be included in the Company’s proxy materials, including to nominate a director, your notice must be received by the Corporate Secretary of the Company at Tarsus Pharmaceuticals, Inc., 15440 Laguna Canyon Road, Suite 160, Irvine, CA 92618, Attn: Corporate Secretary, no earlier than February 15, 202213, 2025 and no later than March 17, 2022.2025. Proposals that are not received in a timely manner will not be voted on at the 20222025 annual meeting of stockholders. To comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Securities Exchange Act of 1934 no later than April 14, 2025. If a proposal is received on time, the proxies that management solicits for the meeting may still exercise discretionary voting authority on the proposal under circumstances consistent with the proxy rules of the SEC. You are advised to review our amended and restated bylaws (the “bylaws”), which contain additional requirements about advance notice of stockholder proposals and director nominations. Stockholders may request a free copy of our bylaws fromby contacting our Corporate Secretary at 15440 Laguna Canyon Road, Suite 160, Irvine, CA 92618, Attn: Corporate Secretary.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
DIRECTORS
DIRECTORS AND
EXECUTIVE OFFICERS EXECUTIVE OFFICERS
Our directors and executive officers, and certain information about each of them as of April
1, 202124, 2024 are set forth below.
| | | | | | | | | | | | | | |
Name | | Age | | | Position(s) with Tarsus |
Executive Officers: | | | | | | |
Bobak Azamian, M.D., Ph.D. | | 46 | 43 | | | President, Chief Executive Officer and DirectorChairman |
Leo M. Greenstein Jeffrey Farrow | | 62 | 45 | | | Chief Financial Officer and Chief Strategy Officer |
Seshadri Neervannan, Ph.D. | | 56 | 53 | | | Chief Operating Officer |
Aziz Mottiwala, MBA | | 46 | 43 | | | Chief Commercial Officer |
Bryan Wahl, M.D., J.D. | | 46 | 43 | | | General Counsel and Secretary |
Dianne Whitfield, MSW | | 47 | 44 | | | Chief Human Resources Officer |
Mark Holdbrook
| | | 67 | | | Vice President, Clinical Affairs |
| | |
Non-Employee Directors: | | | | | | |
Michael Ackermann, Ph.D. Wendy Yarno, MBA | | 68 | 39 | | | Lead Independent Director and Chairperson of the Board |
Bhaskar Chaudhuri, Ph.D. | | 69 | 66 | | | Director |
Andrew Goldberg, M.D. Rosemary Crane, MBA | | 64 | 39 | | | Director |
Andrew Goldberg, M.D. | | 42 | | Director |
William J. Link, Ph.D. | | 78 | 74 | | | Director |
Jason Tester Elizabeth Yeu-Lin, M.D. | | | 45 | | | Director |
Wendy Yarno Scott Morrison | | | 66 | | | Director |
Bobak Azamian, M.D., Ph.D., is our co-founder and has served as our President since our inception, as our Chief Executive Officer since September 2018, and as a member of our Board of Directors since December 2016.2016, and our Chairman since December 2022. From June 2012 to September 2018, Dr. Azamian co-founded and served as Chief Executive Officer, President, and Chief Medical Officer of Metavention, Inc., a company focused on treatment of diabetes and other metabolic diseases. Since September 2016, Dr. Azamian has also served as co-founder and co-Chairman, andboard member, from September 2016 until January 2021 additionally as Chief Executive Officer, and also previously as Co-Chairman of Vibrato Medical, Inc., a medical device company developing wearable treatments for peripheral arterial disease. Since December 2022, Dr. Azamian has also served as a board member of Osanni Bio, Inc., an early stage biotech company. Dr. Azamian previously served as an Entrepreneur in Residence at Versant Ventures from 2011 to 2013, and as a consultant and Senior Associate at Third Rock Ventures from 2007 to 2011, both venture capital firms focused on investing in early stage healthcare companies, and earlier served as a consultant at Amgen.Amgen Inc. He also completed a residency in internal medicine and served as an attending hospitalist at Brigham and Women’s Hospital from 2006 to 2011. Dr. Azamian received a B.A. in Biophysics from Rice University, a Doctor of Philosophy (Chemistry) from University of Oxford and a Doctor of Medicine from Harvard Medical School. We believe that Dr. Azamian is qualified to serve on our Board of Directors because of the perspective and experience he provides as our President and Chief Executive Officer as well as his broad experience within the life sciences industry.Leo M. Greenstein
Jeffrey Farrow has served as our Chief Financial Officer and Chief Strategy Officer since April 2020.2023. Mr. GreensteinFarrow also serves as a board member of Clover Biotherapeutics, a position he has held since September 2021. Mr. Farrow previously served as Senior Vice PresidentChief Financial Officer of Finance and Corporate Controller at Spectrum Pharmaceuticals,Global Blood Therapeutics, Inc., a publicly-traded oncologybiopharmaceutical company, from April 2016 until December 2022 when it was acquired by Pfizer. At Global Blood Therapeutics, he was part of the team responsible for the successful regulatory approval and commercial launch of Oxbryta for the treatment of sickle cell disease. Prior to that, Mr. Farrow served as chief financial officer of ZS Pharma, Inc., a biopharmaceutical company, which was acquired by AstraZeneca in December 2015. Prior to ZS Pharma, he served as the chief financial officer at Hyperion Therapeutics, Inc., a commercial pharmaceutical company, from September 2013July 2010 until April 2020.May 2015 which was acquired by Horizon Therapeutics in May 2015. He previously served as vice president of finance at Evotec AG, a drug discovery and development company. Prior to Spectrum Pharmaceuticals,Evotec, Mr. GreensteinFarrow served as Vice Presidentvice president of Financefinance and Corporate Controllerchief accounting officer at Endologix,Renovis, Inc., a then publicly-traded medical devicedrug discovery and development company, from May 2011 to September 2013, and Senior Directorwhich was acquired by Evotec AG. Earlier in his career, Mr. Farrow spent seven years working in the audit practice of Finance and SEC Reporting at Clarient, Inc., a then publicly-traded advanced oncology diagnostics services company, from June 2007 to April 2011, inclusive of his finance role with its then-majority shareholder.KPMG LLP. Mr. Greenstein spent eight years in Big-4 Public Accounting, beginning with Arthur Andersen LLP in September 1999 and ending with PriceWaterhouseCoopers LLP in June 2007. Mr. Greenstein receivedFarrow holds a B.A. in Accountingbusiness administration with a concentration in corporate finance from ArcadiaCalifornia State University at Fullerton and Juris Doctorate from the Temple University Beasley School of Law. He is a member of the State Bar of California and is an active Certified Public Accountant in California.certified public accountant (inactive).
Seshadri Neervannan, Ph.D.has served as our Chief Operating Officer since July 2020. Dr. Neervannan reviouslyhas also served on the board of directors of Iolyx Therapeutics since 2020. Dr. Neervannan previously served as Senior Vice President of Global Pharmaceutical Development, from March 2015 to July 2020, at Allergan, and Vice President, Pharmaceutical Development, from January 2007 to February 2015, at Allergan, Inc. (“Allergan”), a global pharmaceutical company. Prior to Allergan, he was Director of Pharmaceutics R&D, at Amgen Inc., a biotechnology company, from February 1999 to January 2007. From November 1994 to February 1999, Dr. Neervannan was Sr. Research Investigator at Bristol-Myers Squibb Pharmaceutical Research Institute. Dr. Neervannan received a B.S. in Pharmacy (with Honors) from Birla Institute of Technology & Science, Pilani, India, and a Ph.D. (with Honors) in Pharmaceutical Chemistry from the University of Kansas, Lawrence, KS.
Aziz Mottiwala, MBAhas served as our Chief Commercial Officer since August 2020. Mr. Mottiwala has served on the board of directors of OneOC, a non-profit organization based in Orange County, California since March 2018.2018, and OCTANe, a convening organization of the Southern California technology and medical technology business ecosystem, since July 2021. Mr. Mottiwala previously served as Chief Commercial Officer of Opiant Pharmaceutical,Pharmaceuticals, Inc. (“Opiant”), or Opiant, a publicly-traded pharmaceutical company specializing in medicines for the treatment of addictions and drug overdose from September 2019 to August 2020. Prior to Opiant, Mr. Mottiwala served as Senior Vice President of Sales and Marketing and Head of Commercial at Avanir Pharmaceuticals, Inc. (“Avanir”), or Avanir, a pharmaceutical company specializing in medicines to treat nervous system disorders from July 2017 to September 2019. Prior to Avanir, Mr. Mottiwala spent over ten years at Allergan, a global pharmaceutical company, in various roles from December 2006 to July 2017, most recently as Vice President of Marketing for Allergan’s eye carcare portfolio from January 2014 to July 2017. Mr. Mottiwala holds a Bachelor of Science degree in Biochemistry from the University of California, San Diego and an MBA in Marketing and Finance from the Marshall School of Business at the University of Southern California.
Bryan Wahl, M.D., J.D.has served as our General Counsel since January 2021.2021, and is also our Corporate Secretary. Prior to this, Dr. Wahl was a partner at Knobbe Martens Olson & Bear LLP from September 2005 through December 2020.2020, where he focused on intellectual property protection, infringement studies, and due diligence for financings and strategic transactions, specifically with respect to pharmaceutical, biotechnology, and medical device companies. Since 2009, Dr. Wahl has served as a Hospitalist with Kaiser Permanente and as a Hospitalist at several Bay Area medical centers from September 2002 to December 2017. He also completed a residency in internal medicine at Cedars-Sinai Medical Center in Los Angeles, and is board certified in Internal Medicine. Dr. Wahl earned his Bachelor’s degree the University of Hawaii at Manoa, his Doctor of Medicine from the University of Hawaii John A. Burns School of Medicine and his Juris Doctorate from University of California, Berkeley School of Law.
Dianne Whitfield, MSWhas served as our Chief Human Resources Officer since January 2021. Prior to this Ms. Whitfield served at Evolus Inc. as Vice President, Human Resources from January 2020 until January 2021 and as Executive Director, Human Resources from April 2019 until January 2020. From 2007 until April 2019, Ms. Whitfield served as various roles at Allergan, including as Senior Manager, Human Resources (from October 2007 to March 2015), Senior Manager, Global Talent (from March 2015 to March 2016), Director, Global Talent (from March 2016 to October 2017) and Director, Global Human Resources (from October 2017 to April 2019). Ms. Whitfield earned her Bachelor’sBachelor of Arts degree in Psychology and Social Behavior from the University of California, Irvine and a Master’s degree in Social Work from California State University, Long Beach.Mark Holdbrook has served as our Vice President of Clinical Affairs since November 2018. Prior to this Mr. Holdbrook was an independent consultant from October 2017 to November 2018 and served as Senior/Executive Director for Oculeve, which was acquired by Allergan, from May 2014 to October 2017. Mr. Holdbrook received a B.A. from the University of California at San Diego.
Non-Employee Directors
DirectorsMichael Ackermann, Ph.D.
Wendy Yarno, MBA has served as a member of our Board of Directors since November 2020, and as chairpersonour Lead Independent Director since December 2022. Ms. Yarno retired in September 2008 from Merck & Co. (“Merck”), Inc., a pharmaceutical company, following a 26-year career there in commercial and human resource positions of our Boardincreasing seniority, most recently chief marketing officer before she retired. In that role, Ms. Yarno led a global organization charged with all aspects of Directors since July 2017. Dr. Ackermann has beensupporting pre- and post-launch commercialization of pharmaceuticals in more than 20 therapeutic areas. Prior to this role, she served as General Manager, Cardiovascular and Metabolic U.S. Business Unit, and as Senior Vice President, Human Resources. After retiring from Merck, Ms. Yarno worked part-time as the Chief Executive Officerchief marketing officer of Presidio Medical,HemoShear Therapeutics, LLC, a biotechnology research company and leading developer of human cell-based surrogate systems for discovery and assessment of new drug compounds, from September 2010 through September 2011. She currently serves as a director at various public companies, including Ideaya Biosciences Inc. since September 2017. From OctoberDecember 2019, Inovio Pharmaceuticals, Inc. since December 2017, and Iovance Biotherapeutics, Inc. since May 2023. She previously served as a director of Global Blood Therapeutics, Inc., from November 2017 until October 2022, MyoKardia, Inc. from March 2017 until November 2020, Mr. Ackermann servedSt. Jude Medical, Inc., from 2002 until 2017, Medivation, Inc., Aratana Therapeutics, Inc., Alder BioPharmaceuticals, Inc. and Durata Therapeutics Inc. She also has past experience as the chairman of the board of Oyster Point Pharma. Prior to that, he was Vice President, Neurostimulationa director for Allerganseveral small private company boards. Ms. Yarno holds a B.S. in business administration from August 2015 to June 2017 after serving as Chief Executive Officer of Oculeve, which was acquired by Allergan, from June 2012 to August 2015. Dr. Ackermann received a B.E. in biomedical engineering
from VanderbiltPortland State University and a M.S. and Ph.D. in biomedical engineeringan MBA from Case Western ReserveTemple University. We believe Dr. Ackermann is qualifiedMs. Yarno’s qualifications to serve on our Board of Directors because of his substantial businessinclude her operational, commercial and academichuman resource experience in the medical devicebiotechnology and pharmaceutical development industries.
companies, as well as her experience as a director of multiple biotechnology and pharmaceutical companies.
Bhaskar Chaudhuri, Ph.D.has served as a member of our Board of Directors since December 2019. Dr. Chaudhuri has more than 20 years’ experience in pharmaceutical management, research and development. Since June 2011, he has been the Operating Partner at Frazier Healthcare Ventures. Prior to that time, Dr. Chaudhuri served as President of Valeant Pharmaceuticals International, Inc. (“Valeant,” now Bausch Health) from January 2009 to September 2010. Prior to joining Valeant, Dr. Chaudhuri served for seven years as President and Chief Executive Officer of Dow Pharmaceutical Sciences, Inc. (“Dow”) and as a member of its board of directors from 2003 to 2008, at which time Dow was acquired by Valeant. Prior to that, Dr. Chaudhuri served as Executive Vice President of Scientific Affairs at Bertek Pharmaceuticals Inc. (“Bertek”), a subsidiary of Mylan N.V. (“Mylan”), from 1998 to 2000. Prior to his positions at Bertek, Dr. Chaudhuri served as the General Manager of the Dermatology Division of Mylan. Dr. Chaudhuri joined Mylan through the acquisition of Penederm, Inc., where he worked from 1992 to 1998 in a number of senior positions before becoming the Vice President of Research and Development. Dr. Chaudhuri currently serves on the boards of directors of Arcutis Biotherapeutics, Inc., since June 2016, and Sudo Biosciences since May 2021. Dr. Chaudhuri has previously served on the board of directors of Teligent Pharmaceuticals, Inc. sinceInc from November 2010 andto July 2021, Vyome Biosciences, Ltd. sincefrom June 2015.2015 to June 2019 and Corium International, Inc. from February 2010 to November 2018. He also serves on the Advisory Board of the Berman Institute of JohnJohns Hopkins University. Dr. Chaudhuri holds a Bachelor of Science degree in Pharmacy and an M.S. in Industrial Pharmacy from Jadavpur University and a Ph.D. in Pharmaceutics form the University of Louisiana. We believe Dr. Chaudhuri’s qualifications to serve on our Board of Directors include his many years of experience in the pharmaceutical industry, including his prior positions in senior executive roles at major pharmaceutical companies.
Rosemary Crane, MBA has served as a member of our Board of Directors since August 2021. Ms. Crane served as President and Chief Executive Officer of MELA Sciences, Inc. from 2013 to 2014. Ms. Crane was Head of Commercialization and a partner at Apple Tree Partners from 2011 to 2013. From 2008 to 2011, she served as President and Chief Executive Officer of Epocrates. Ms. Crane served in various senior executive positions at Johnson & Johnson from 2002 to 2008, including as Group Chairman, OTC & Nutritional Group from 2006 to 2008, as Group Chairman, Consumer, Specialty Pharmaceuticals and Nutritionals from 2004 to 2006, and as Executive Vice President of Global Marketing for the Pharmaceutical Group from 2002 to 2004. Prior to that, she held various positions at Bristol-Myers Squibb Company from 1982 to 2002, including as President of U.S. Primary Care from 2000 to 2002, and as President of Global Marketing and Consumer Products from 1998 to 2000. Ms. Crane has served on the boards of directors of Teva Pharmaceutical Industries Ltd. since 2015, Catalent, Inc. from April 2018 to January 2024, and Certara, Inc. since July 2022. From 2015 to 2019, she served as Vice Chairman of the Board of Zealand Pharma A/S. From 2017 to March 2019, she served on the board of directors of Edge Therapeutics, Inc. Ms. Crane received an M.B.A. from Kent State University and a B.A. in communications and English from the State University of New York. We believe Ms. Crane’s qualifications to serve on our Board of Directors include her broad experience and knowledge of the global pharmaceutical business and industry, as well as her experience as a director of multiple biotechnology and pharmaceutical companies.
Andrew Goldberg, M.D. has served as a member of our Board of Directors since August 2020. Since March 2021, Dr. Goldberg has servedserves as a managing director at Marshall Wace LLP, a leading global provider of alternative investment solutions. Prior to this, Dr. Goldberg has served as a principal and subsequently partner of Vivo Capital, a global healthcare investment firm that focuses exclusively on the life sciences industry, from February 2016 to March 2021. Prior to this, Dr. Goldberg was a consultant at McKinsey & Company from September 2014 to February 2016, where he served pharmaceutical, medical device, and biotechnology companies across a range of strategy, M&A, sales, marketing, and product development topics. Dr. Goldberg is a U.S. board-certified physician in both Critical Care Medicine and Emergency Medicine. He recently served as an Instructor in Medicine at the Mayo Clinic College of Medicine in Rochester, MN, from January 2013 to June 2013, where he also completed a fellowship in Critical Care Medicine and served as an Attending Physician in the Department of Emergency Medicine. Prior to this, he completed Emergency Medicine residency training at Los Angeles County + University of Southern California Medical Center (LAC+USC). His research has spanned a variety of topics, from traumatic brain injury and cardiac arrest to biomarker analysis and healthcare quality. He has over 25 scientific publications in leading peer-reviewed journals, including JAMA,the Journal of the American Medical Association, Resuscitation, and the Cleveland Clinic Journal of Medicine. Dr. Goldberg received his M.D. from The George Washington University School of Medicine in Washington, DC, and a post-doctoral diploma in translational science from the Mayo Graduate School. He has held prior academic and clinical appointments at Oregon Health & Science University and the University of Arizona and currently at the Washington Township Medical Foundation. We believe Dr. Goldberg’s qualifications to serve on our Board of Directors include his many years of experience in strategy and product development in the pharmaceutical industry, and his experience investing in pharmaceutical companies.
William J. Link, Ph.D. has served as a member of our Board of Directors since January 2017. Dr. Link is a managing director and co-founder of both Flying L Partners, a venture capital firm formed in 2016 to focus on investing primarily in the ophthalmic space, and Versant Venture Management LLC (“Versant”), a life science venture capital firm investing in early stage healthcare companies. Dr. Link has also served as the Chairperson of the Board of Directors of Lensar Inc. since November 2017 and RxSight, Inc. since November 2016. Prior to co-founding Versant in 1999, Dr. Link was a general partner at Brentwood Venture Capital. From 1987 to 1997, Dr. Link was founder, chairman, and Chief Executive Officer of Chiron Vision Corporation (acquired by Bausch & Lomb)Lomb Surgical, Inc.). He also founded and served as President of American Medical Optics (acquired by Allergan). Dr. Link served as a director of Advanced
Medical Optics (acquired by Abbott)Abbott Laboratories) from 2002 to 2009 and Inogen, Inc. from 2003 to February 2014. Before entering the healthcare industry, Dr. Link was an assistant professor in the Department of Surgery at the Indiana University School of Medicine. He has been a member of the boardboards of directors of Edwards Lifesciences Corporation sincefrom May 2009 to May 2021, Second Sight Medical Products, Inc. from 2003 to May 31, 2020, Glaukos Corporation sincefrom June 2001 to December 2021, and Oyster Point Pharma, sinceInc. from July 2015.2015 to March 2022. Dr. Link is also a member of the board of directors of several private companies. Dr. Link holds a B.S., an M.S., and a Ph.D. in mechanical engineering from Purdue University. We believe Dr. Link is qualified to serve on our Board of Directors because of his extensive experience in successfully commercializing products in the medical device industry, as well as his prior experience on the boards of U.S. public companies.
Jason Tester
Elizabeth Yeu-Lin, M.D. has served as a member of our Board of Directors since March 2018. Since September 2017 Mr. TesterDecember 2021. Dr. Yeu has been a Partner at Virginia Eye Consultants since 2014. She has served as Chief Financial Officeran Assistant Professor of Ophthalmology at the Horowitz Group. From September 2008 to August 2017 Mr. TesterEastern Virginia Medical School since 2012. For the American Society of Cataract and Refractive Surgery, Dr. Yeu serves on the Executive Board and is Immediate Past President, and was Chief Financial Officerpreviously served as its President, and Treasurer. Dr. Yeu has authored hundreds of AcuFocus,articles and is a frequent lecturer nationally and internationally in the areas of refractive cataract surgery, anterior segment reconstruction, ocular surface disease management and the surgical management of astigmatism. Dr. Yeu earned her medical degree through an ophthalmicaccelerated and combined undergraduate/ medical device company. From July 2007 to May 2008, Mr. Tester was Vice President of Jefferies & Company, a healthcare investment bank. Mr. Tester holds an MBA in finance from the Emory University Goizueta Business School, a Master of Accountancy with a specialization in taxation and a Bachelor of Business Administration fromschool program at the University of Georgia.Florida College of Medicine. She completed her Ophthalmology residency at Rush University Medical Center in Chicago, where she served as Chief Resident from 2006 to 2007. Dr. Yeu completed a fellowship in cornea, anterior segment and refractive surgery at Baylor College of Medicine’s Cullen Eye Institute from 2007 to 2008, and she served as an Assistant Professor after her fellowship training. Dr. Yeu has served on the board of directors at STAAR Surgical Company since January 2021, and Ocular Science since September 2018. In January 2022, she also joined the Board of Directors of Avellino Lab USA, Inc. From November 2021 to May 2023, she has served as a Chief Strategic Advisor to ACE Vision Group. We believe that Mr. Tester is qualifiedDr. Yeu’s qualifications to serve on our Boardboard of Directors becausedirectors include her experience as a practicing nationally recognized ophthalmologist and educator, deep understanding of his financialthe clinical of refractive surgeons and accounting expertise and hispatients seeking visual freedom, as well as her experience in the life science industry.Wendy Yarnoas a director of multiple ophthalmic companies.
Scott Morrison has served as a member of our Board of Directors since November 2020. Ms. Yarno retiredOctober 2022. Mr. Morrison was a partner at Ernst & Young and was the US Life Sciences Leader from 1996 until his retirement in September 2008 from Merck2015. Mr. Morrison has served public and private companies in the life sciences industry since 1980. During his tenure at Ernst & Co.Young, he worked on hundreds of public and private financings, M&A transactions, and corporate collaborations. Mr. Morrison serves on the board of directors of Zai Labs, Inc. since October 2021 (where he also chairs the audit committee), Vera Therapeutics, Inc., a pharmaceutical company, following a 26-year career there in commercial and human resource positions of increasing seniority, most recently chief marketing officer before she retired. In that role, Ms. Yarno led a global organization charged with all aspects of supporting pre- and post-launch commercialization of pharmaceuticals in more than 20 therapeutic areas. Prior to this role, she served as General Manager, Cardiovascular and Metabolic U.S. Business Unit, and as Senior Vice President, Human Resources. After retiring from Merck, Ms. Yarno worked part-time as the chief marketing officer of HemoShear LLC, a biotechnology research company and leading developer of human cell-based surrogate systems for discovery and assessment of new drug compounds, from September 2010 through September 2011. She currently since April 2020, Corvus Pharmaceuticals since January 2016 (where he serves as a director at various public companies, includingmember of their compensation committee), and Ideaya Biosciences since 2018. He previously served on the board of directors and was the chair of the audit committee of Global Blood Therapeutics Inc., Ideaya Biosciences Inc.(acquired by Pfizer) from January 2016 to October 2022, and Inovio Pharmaceuticals, Inc. She previously served as a director and audit committee member of MyoKardia,Audentes, Inc., St. Jude Medical, Inc., Medivation, Inc., Aratana Therapeutics, Inc., Alder Biopharmaceuticals, Inc. and Durata Therapeutics, Inc. Shefrom January 2016 until its sale to Astellas in January 2020. Mr. Morrison has also has past experienceserved as a director foron several small private company boards. Ms. Yarnolife sciences industry boards, including the Biotechnology Innovation Organization ECS Board, the Bay Area Biosciences Board (now CLSA), the Life Sciences Foundation, and the Biotechnology Institute. Mr. Morrison was awarded the CLSA Pantheon 2016 Life Sciences Leadership Award. Mr. Morrison holds a B.S.BS in business administrationBusiness Administration from Portland Statethe Haas School of Business at University of California, Berkeley, and an MBA from Temple University.is a certified public accountant (inactive). We believe Ms. Yarno’s qualificationsMr. Morrison is qualified to serve on our Board due to his decades of Directors include her operational, commercial and human resource experience serving life sciences companies, leadership in biotechnology and pharmaceutical companies,public accounting, as well as her experience as a director and audit chair of multiple biotechnology and pharmaceuticalseveral public companies. There are no family relationships among any of our directors or executive officers.
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE AND
BOARD MATTERS BOARD MATTERS
As required under the listing standards of the Nasdaq, a majority of the members of a listed company’s board of directors must be independent within 12 months following the closing of an initial public offering.independent. Management and outside counsel have reviewed the directors’ responses to a questionnaire asking about their transactions, relationships and arrangements with the Companyus (and those of their immediate family members) and other potential conflicts of interest. Other than as set forth in this proxy statement, these questionnaires did not disclose any transactions, relationships, or arrangements that question the independence of our directors or director nominees. After reviewing this information, our Board of Directors affirmatively determined that all of our non-employee directors with the exception of Dr. Yeu, who also serves as the Company’s consulting Chief Medical Advisor, were independent directors within the meaning of the applicable Nasdaq listing standards. The independent members of our Board of Directors will hold separate regularly scheduled executive session meetings at which only independent directors are present.
Information Regarding the Board of Directors and its Committees
As required under Nasdaq listing standards, our independent directors meet in regularly scheduled executive sessions at which only independent directors are present.
Dr. Ackermann, as our lead independent director, presided over these executive sessions in 2020. After our initial public offering in 2020, ourOur Board of Directors
hadhas an audit committee, a compensation committee,
and a nominating and corporate governance
committee, a science and technology committee and a commercial committee. The following table provides membership information for each of such Board
of Directors committees as of December 31,
2020:2023: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name | | Audit | | Compensation | | Nominating and Corporate Governance | | Science and Technology | | Commercial |
Michael Ackermann, Ph.D.
| | | | X* | | X* |
Bhaskar Chaudhuri, Ph.D. | | | | | X | | | X | | | X | | | | |
Rosemary Crane, MBA | | X | | | | | | | | | | | | X | * |
Andrew Goldberg, M.D. | | | | | | | | | X | | | X | | | | |
William J. Link, Ph.D. | | | | | | X | | | X |
Jason Tester
| | X* | * | | X | | | | |
Wendy Yarno Elizabeth Yeu-Lin, M.D. | | | | | | | | | | | X | * | | X | |
Wendy Yarno, MBA | | X | | | X | * | | | | | | | | X | |
Scott Morrison | | X | * | | | | | | | | | | | X | |
_____________
*Committee Chair.
Below is a description of each committee of our
Board of Directors.Board. Our Board
of Directors has determined that each member of the audit, compensation and nominating and corporate governance committees meets the applicable rules and regulations regarding “independence” and also that each member of
theour audit committee, compensation committee, and nominating and corporate governance committee is free of any relationship that would interfere with his or her individual exercise of independent judgment with regard to the Company.
The members of our audit committee are Dr. Chaudhuri, Mr. Tester andMs. Crane, Ms. Yarno eachand Mr. Morrison. Each member of whomour audit committee (i) can read and understand fundamental financial statements. Each arestatements, and (ii) is independent under the rules and regulations of the SEC and the listing standards of Nasdaq applicable to audit committee members. Mr. TesterMorrison chairs the audit committee. Our Board of Directors has
determined that
each of Mr.
Tester qualifiesMorrison and Ms. Crane each qualify as an audit committee financial expert within the meaning of SEC regulations and meets the financial sophistication requirements of Nasdaq. Please also see the report of the
Auditaudit committee set forth elsewhere in this proxy statement.
Our audit committee assists our Board of Directors’ oversight of the integrity of our financial statements, our compliance with legal and regulatory requirements, the qualifications, independence and performance of the independent registered public accounting firm, the design and implementation of our internal audit function, and risk assessment, and risk management. Among other things, our audit committee is responsible for reviewing and discussing with our management the adequacy and effectiveness of our disclosure controls and procedures. The audit committee also discusses with our management and independent registered public accounting firm the annual audit plan and scope of audit activities, scope and timing of the annual audit of our financial statements, and the results of the audit, quarterly reviews of our financial statements and, as appropriate, initiates inquiries into aspects of our financial affairs. Our audit committee is responsible for establishing and overseeing procedures for the receipt, retention and treatment of any complaints reporting accounting, internal accounting controls or auditing matters, as well as for the confidential and anonymous submissions by our employees of concerning questionable accounting or auditing matters. In addition, our audit committee has direct responsibility for the appointment, compensation, retention and oversight of the work of our independent registered public accounting firm. Our audit committee has sole authority to approve the hiring and discharging
of our independent registered public accounting firm, all audit engagement fees and terms and all permissible non-audit engagements with the independent auditor. Our audit committee will review and oversee all related person transactions in accordance with our policies and procedures.
Our audit committee charter can be found on the corporate governance section of our corporate website at www.tarsusrx.com. Each of Dr. Chaudhuri, Dr. Link,Ms. Crane, Ms. Yarno, and Mr. Tester and Ms. YarnoMorrison, served on the audit committee of our Board of Directors during 2020.2023. The audit committee met 5 timesfour times during 2020.2023.
The members of our compensation committee are Dr.
Ackermann, Dr. GoldbergChaudhuri, Ms. Yarno, and Dr. Link.
Dr. AckermannMs. Yarno chairs the compensation committee. Each member of our compensation committee is independent under the rules and regulations of the SEC and the listing standards of Nasdaq applicable to compensation committee members, is a
“non-employee“non-employee director,” as defined in Rule
16b-3 adopted under Section 16 of the Exchange Act and an “outside director” under Regulation
Section 1.162-27 adopted under Section 162(m) of the Code of 1986, as amended. Our compensation committee assists our Board of Directors with its oversight of the forms and amount of compensation for our executive officers, and the administration of our incentive plans for employees and other service providers, including our equity incentive plans, and certain other matters related to our compensation programs. Our compensation committee has the authority to engage the services of outside consultants and advisors to assist it in making decisions regarding our executive compensation programs.
Nancy ArnostiIn March 2024, Pay Governance LLC ("Pay Governance") has been retained by our compensation committee to advise the compensation committee regarding the compensation of our executive officers and
non-employee directors. directors, replacing previous consultant Arnosti Consulting, Inc. ("Arnosti"), whose principal has retired. The compensation committee believes that
Ms.Pay Governance's, as well as Arnosti’s expertise in the life sciences industry provides the compensation committee with relevant and targeted advice, and that
Ms.Pay Governance and Arnosti
isare independent and that
hertheir work has not raised any conflicts of interest.
In establishing compensation amounts for executives, our compensation committee seeks to support the Company’sour overall business strategy and objectives, attract and retain key executives, link compensation with business objectives and organizational performance, and provide competitive compensation opportunities. The compensation committee may form subcommittees and delegate its power and authority to such subcommittees. A more detailed description of the compensation committee’s functions can be found in our compensation committee charter. The charter is published in the corporate governance section of our website at www.tarsusrx.com. Each of Dr. Ackermann, Dr. GoldbergChaudhuri, Ms. Yarno, and Dr. Link served on the compensation committee of our Board of Directors during 2020.2023.
The compensation committee met 3met five times during 2020.2023. Dr. Azamian, our principal executive officer, does not participate in the determination of his own compensation or the compensationcompensation of directors. However, Dr. Azamian makes recommendations to the compensation committee regarding the amount and form of the compensation of the other executive officers and key employees, and Dr. Azamian participates in the Committee’scompensation committee’s deliberations about their compensation. Mr. Greenstein,Ms. Whitfield, our Chief FinancialHuman Resources Officer, also assists the Committeecompensation committee in its executive officer, director and employee compensation deliberations. No other executive officers participate in the determination of the amount or form of the compensation of executive officers or directors.
Nominating and Corporate Governance Committee
The members of our nominating and corporate governance committee are Dr. Ackermann,Chaudhuri, Dr. Goldberg and Dr. Link. Dr. AckermannLink chairs the nominating and corporate governance committee. Our nominating and corporate governance committee assists our Board of Directors with its oversight of and identification of individuals qualified to become members of our Board of Directors, consistent with criteria approved by our Board of Directors, and selects, or recommends that our Board of Directors select, director nominees; develops and recommends to our Board of Directors a set of corporate governance guidelines; and
oversees the evaluation of our Board of Directors. Our nominating and corporate governance committee charter can be found on the corporate governance section of our corporate website at www.tarsusrx.com. Each of Dr. Ackermann,Chaudhuri, Dr. Goldberg, and Dr. Link served on our nominating and corporate governance committee during 2020.2023. All members of our nominating and corporate governance committee are independent as currently defined under Nasdaq listing standards. Our nominating and corporate governance committee met 1 timefour times during 2020.
2023.
Our nominating and corporate governance committee believes that the minimum qualifications and skills that candidates for director should possess include (a) the highest professional and personal ethics and values, (b) a commitment to enhancing stockholder value and (c) sufficient time to carry out their duties and to provide insight and practical wisdom based on experience. The committee also considers the following factors, in no particular order of importance: (a) various and relevant career experience, (b) relevant skills, such as an understanding of the Company’s business, (c) financial expertise
and operations expertise, (d) diversity,
(e) board and
(e)management experience, (f) investor relations experience, (g) industry experience, and (h) local and community ties. However, our nominating and corporate governance committee retains the right to modify these qualifications from time to time.
Under our corporate governance guidelines diversity is one of several critical factors that the nominating and corporate governance committee considers when evaluating the composition of our Board of Directors, amongst other critical selection criteria. We consider various diversity factors when considering director candidates, including race, ethnicity, gender, national origin, and geography. Our Board of Directors currently includes directors with a range of diversity. We believe each director contributes to our Board of Directors’ overall diversity by providing a variety of perspectives based on distinct personal and professional experiences and backgrounds. We are committed to maintaining and enhancing the diversity of our Board of Directors and in furtherance of this, the nominating and corporate governance committee will conduct annual self-evaluations to assess
itsthe performance and effectiveness
of our Board of Directors and committees, which we expect will include its consideration of diversity and other selection criteria.
Our nominating and corporate governance committee will consider director candidates recommended by stockholders and evaluate them using the same criteria as candidates identified by our Board of Directors or our nominating and corporate governance committee for consideration. If a stockholder of the Company wishes to recommend a director candidate for consideration by our nominating and corporate governance committee, the stockholder recommendation should be delivered to the Corporate Secretary of the Company at the principal executive offices of the Company, and must include information regarding the candidate and the stockholder making the recommendation.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
You are advised to review our bylaws, which contain additional requirements about advance notice of stockholder director nominations.
Science and Technology Committee
The members of our science and technology committee are Dr. Chaudhuri, Dr. Goldberg, Dr. Link, and Dr. Yeu. Dr. Yeu chairs the science and technology committee. Our science and technology committee assists our Board of Directors with its oversight and evaluation of (i) the Company’s overall investment in and strategic direction with respect to technological and scientific initiatives and (ii) the Company’s business development and internal innovation initiatives. Dr. Chaudhuri, Dr. Goldberg, Dr. Link, and Dr. Yeu all served on the science and technology committee during 2023. The science and technology committee met four times during 2023.
Commercial Committee
The members of our commercial committee are Mr. Morrison, Ms. Yarno, Dr. Yeu, and Ms. Crane. Ms. Crane chairs the commercial committee. Our commercial committee assists our Board of Directors with its oversight of our product commercialization efforts. The commercial committee met four times in 2023.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Each of Dr.
Ackermann, Dr. GoldbergChaudhuri, Ms. Yarno, and Dr. Link served on our compensation committee during
2020.2023. None of the members of our compensation committee was at any time during the
20202023 fiscal year (or at any other time)
an officerone of our officers or
employee of the Company.employees. None of our executive officers serves as a member of
our Boardthe board of
Directorsdirectors or compensation committee of any entity that has one or more executive officers serving as a member of our Board of Directors or compensation committee.
BOARD LEADERSHIP STRUCTURE
BOARD LEADERSHIP STRUCTURE
Our Corporate Governance Guidelines provide that our Board may determine from time to time the most effective leadership structure for the Company, including whether the same individual should serve as both Chairman of the Board and our Chief Executive Officer. Dr. Azamian, our Chief Executive Officer, also serves as Chairman of the Board. Our Board has determined that we would be best served by having a Chair with deep operational and strategic knowledge of Directorsour business. In addition, due to the in-depth knowledge of our operations Dr. Azamian is currently chaired by Dr. Ackermann. As a general policy,well positioned to identify and lead Board deliberations regarding important matters relating to our operations, strategic priorities, and overall development. The Board of Directorsalso believes that separationserving as both Chief Executive Officer and Chairman of the positionsBoard enables Dr. Azamian to facilitate effective communication between our management and the Board and to ensure key issues and recommendations are brought to the attention of chairpersonthe Board. The Board believes that this leadership structure, in conjunction with the appointment of oura Lead Independent Director, is the most effective for the Company at this time, and that the existing corporate governance practices effectively achieve independent oversight and management accountability.
Our Corporate Governance Guidelines also provide that, if the same individual serves as Chairman of the Board of Directors and Chief Executive Officer, reinforcesor if the independenceChairman of the Board is otherwise not independent, our Board of Directors from management, creates an environment that encourages objective oversight of management’s performance and enhances the effectiveness of our Board of Directors asshall appoint a whole. As such, Dr. Azamian serves as our President and Chief Executive Officer while Dr. Ackermann serves as the chairperson of our Board of Directors butLead Independent Director, which is not an officercurrently Ms. Yarno. The responsibilities of the Company. We currently expect and intend the positions of chairperson of our Board of Directors and Chief Executive Officer to continue to be held by two individualsLead Independent Director are set forth in the future.Company’s Corporate Governance Guidelines, which include, for example, facilitating communication between management, the independent directors, and the Chairman of the Board. The Lead Independent Director will actively participate in setting agendas for Board meetings, preside at executive sessions of the Board, and perform such other duties as specified by the Board. In the event we appoint an independent Chairman of the Board, the responsibilities of the Lead Independent Director will be assumed by the independent Chairman of the Board.
ROLE OF
THE BOARD BOARD IN RISK OVERSIGHT RISK OVERSIGHT
Our Board of Directors provides risk oversight for our entire company by receiving management presentations, including risk assessments, from all functional areas of our company, and discussing these assessments with management. Our Board of Directors’ overall risk oversight is supplemented by the various committees. The audit committee discusses with management and our independent auditors our risk management guidelines and policies, our major financial risk exposures and the steps taken to monitor and control such exposures.
Our compensation committee oversees risks related to our compensation programs and discusses with management its annual assessment of our employee compensation policies and programs. Based upon this review, our compensation committee believes that any risks arising from such policies and practices are not reasonably likely to have a material adverse effect on the Company in the future. Specifically, we believe that the elements of our compensation program do not encourage unnecessary or excessive
risk-taking. Base salaries are fixed in amount and thus do not encourage
risk-taking. A significant proportion of the compensation provided to our executives, and a material amount of the compensation provided to other employees, is in the form of
long-term equity awards that are important to help further align employee interests with those of our stockholders. We do not believe that these awards encourage unnecessary or excessive
risk-taking because the ultimate value of the awards is tied to our stock price, and because awards are subject to
long-term vesting schedules to help ensure that employees have significant value tied to
long-term stock price performance.
STOCKHOLDER COMMUNICATIONS
STOCKHOLDER COMMUNICATIONS WITH
OUR BOARD BOARD OF DIRECTORS DIRECTORS
Stockholders wishing to communicate with our Board of Directors or with an individual member of our Board of Directors may do so by writing to our Board of Directors or to the particular member of our Board of Directors,
in care of the Corporate Secretary by mail to our principal executive offices, Attention: Corporate Secretary. The envelope should indicate that it contains a stockholder communication. All clearly marked written communications, other than unsolicited advertising or promotional materials, are logged and copied, and forwarded to the director(s) to whom the communication was addressed. Please note that the foregoing communication procedure does not apply to (i) stockholder proposals pursuant to Exchange Act
Rule 14a-8 and communications made in connection with such proposals or (ii) service of process or any other notice in a legal proceeding.
MEETINGS
MEETINGS OF
THE BOARD BOARD OF DIRECTORS DIRECTORS
Our Board of Directors met
eightfour times during
2020.2023. Each member of our Board of Directors attended at least 75% or more of the aggregate of the meetings of our Board of Directors and of the committees on which he or she served, held during the period for which such member was a director or committee member. Members of our Board of Directors and its committees also consulted informally with management from time to time and acted at various times by written consent without a meeting during
2020.2023. While we do not have a formal policy regarding attendance by members of our Board of Directors at our annual meetings of stockholders all directors are encouraged to attend.
CODE At our 2023 Annual Meeting of Stockholders, all of our then-serving directors were in attendance.
CORPORATE GOVERNANCE GUIDELINES
Our Board of Directors adopted corporate governance guidelines to ensure that our Board of Directors has the necessary practices in place to review and evaluate our business operations and long-term strategy. The corporate governance guidelines set forth the practices our Board of Directors follows with respect to board and corporate governance, including board leadership, evaluating management’s performance and compensation, formulating company strategy, overseeing risk management and legal and ethical compliance, and managing potential conflicts of interest, among other responsibilities. The corporate governance guidelines, as well as the charters for each committee of our Board of Directors, are posted on the Corporate Governance section of our Investors & News section of our website at ir.tarsusrx.com/corporate-governance.
Our Board of Directors has adopted a code of conduct, which applies to all of our employees, officers, and directors. We also expect our agents, representatives, and consultants to follow our code of conduct in connection with their work for us. The full text of our code of conduct is posted on the Corporate Governance section of our Investors & News section of our website at www.tarsusrx.com. We intend to disclose future amendments to, or waivers of, our code of conduct as and to the extent required by SEC regulations, at the same location on our website identified above and in public filings. Our code of conduct represents the standards by which we operate and reflects that we are an ethical, mindful and transparent business. The purpose of our code
of conduct is to promote honest and ethical conduct, including with respect to actual or apparent conflicts of interest between personal and professional relationships, to promote full, fair, accurate, timely and understandable disclosure in periodic reports to be filed by us, to promote compliance with applicable governmental laws, rules and regulations, promoted the protection of the Company’s assets, including corporate opportunities and confidential information, promote fair dealing practices, deter wrongdoing, promote prompt internal reporting of violations of the code of conduct to an appropriate person(s) identified in the code of conduct, and ensure accountability for adherence to the code of conduct.
HEDGING
HEDGING AND
PLEDGING POLICIES PLEDGING POLICIES
Pursuant to our Insider Trading Policy, all employees and agents, including our executive officers and directors, are prohibited from trading in publicly-traded option,options, such as puts or calls, or other derivative securities in our securities, including hedging or similar transactions designed to decrease the risks associated with holding our securities. Employees are also prohibited from including our
securities in a margin account or pledging our securities as collateral for a loan. Further, it is against our Insider Trading policy for any employee (including any executive officers) to engage in short sales of our common stock.Common Stock. Any violation of the policies may result in disciplinary action, including dismissal for cause.
CORPORATE RESPONSIBILITY AND BOARD DIVERSITY
We understand that long-term value creation for stockholders is our core responsibility. We also have an important role to play for our team members and the communities we serve, which is fundamental to our culture, as well as good business.
EMPLOYEE DEVELOPMENT AND WELLBEING
Our values-based culture and our employees are a critical component of our success. We strive to create a supportive and professional environment for our employees. We expend considerable management time and attention, and financial resources, to attracting, retaining, and motivating exceptional individuals at our company.
DIVERSITY AND INCLUSION
We are committed to creating and maintaining a workplace free from discrimination or harassment on the basis of race, color, citizenship, religion, creed, national origin, ancestry, gender, sexual orientation, age, marital status, veteran status, disability, medical condition, or any other status protected by applicable law. Our employment policies and compliance trainings prohibit such discrimination and harassment. Our management team and employees are also expected to exhibit and promote honest, ethical, and respectful conduct in the workplace.
Our Board of Directors values having a board that reflects diverse perspectives, including those based on gender, ethnicity, skills, experience at policy-making levels in areas that are relevant to our activities, and functional, geographic and cultural backgrounds. The following Board Diversity Matrix presents our Board of Directors diversity statistics in accordance with Nasdaq Rule 5606, as self-disclosed by our directors. Our Board of Directors satisfies the minimum objectives of Nasdaq Rule 5605(f) by having at least one director who identifies as female and at least one director who identifies as a member of an Underrepresented Minority (as defined by the Nasdaq Rules). As we pursue future recruitment efforts for our Board of Directors, our nominating and corporate governance committee will continue to seek out candidates who can contribute to the diversity of views and perspectives of our Board of Directors. This includes seeking out individuals of diverse ethnicities, gender identity and diverse perspectives informed by other personal and professional experiences.
| | | | | | | | |
Board Diversity Matrix (As of April 15, 2024) |
Total Number of Directors | 8 | |
| Female | Male |
Part I: Gender Identity | | |
Directors | 3 | 5 |
Part II: Demographic Background | | |
White | 2 | 3 |
Asian | 1 | 1 |
Directors who identify as Iranian-American: 1
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the beneficial ownership of our Common Stock as of March 31,
20212024 for:
•each stockholder known by us to be the beneficial owner of more than 5% of our outstanding shares of Common Stock;
•each of our directors and director nominee;
nominees;•each of our named executive officers; and
•all of our directors and executive officers as a group.
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Except as noted by footnote, and subject to community property laws where applicable, the persons named in the table below have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them. The table below is based upon information supplied by officers, directors and principal stockholders and Schedules 13G and 13D filed with the SEC.
We have based our calculation of the percentage of beneficial ownership on
20,524,47437,749,471 shares of our Common Stock outstanding as of March 31,
2021.2024. We have deemed shares of our Common Stock subject to stock options that are currently exercisable or exercisable within 60 days of March 31,
20212024 to be outstanding and to be beneficially owned by the person holding the stock option for the purpose of computing the percentage ownership of that person. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person.
Unless otherwise indicated, the address of each beneficial owner listed in the table below is 15440 Laguna Canyon Road, Suite 160, Irvine, California 92618.
| | | | | | | | |
| | Shares Beneficially Owned | |
Name of Beneficial Owner | | Shares | | | Percentage | |
Named Executive Officers and Directors: | | | | | | | | |
Bobak Azamian (1) | | | 1,922,994 | | | | 9.07 | % |
Michael Ackermann (2) | | | 1,469,714 | | | | 7.08 | % |
Bhaskar Chaudhuri | | | — | | | | — | % |
Andrew Goldberg | | | — | | | | — | % |
William J. Link (3) | | | 1,340,683 | | | | 6.53 | % |
Jason Tester (4) | | | 1,949,331 | | | | 9.50 | % |
Wendy Yarno | | | — | | | | — | |
Leo M. Greenstein (5) | | | 144,473 | | | | * | |
Seshadri Neervannan (6) | | | 240,790 | | | | 1.16 | % |
All executive officers and directors as a group (13 persons) (7) | | | 7,217,538 | | | | 33.08 | % |
5% Stockholders: | | | | | | | | |
Perceptive Advisors (8) | | | 1,296,416 | | | | 6.32 | % |
Vivo Capital Fund IX, L.P. (9) | | | 3,245,035 | | | | 15.81 | % |
Entities affiliated with RTW Investments, LP (10) | | | 2,463,601 | | | | 12.00 | % |
Entities affiliated with Horowitz Limited Partnership VIII (11) | | | 1,987,105 | | | | 9.68 | % |
Frazier Life Sciences IX, L.P. (12) | | | 1,917,157 | | | | 9.34 | % |
Entities affiliated with Cormorant Asset Management, LP (13) | | | 1,714,269 | | | | 8.35 | % |
Flying L Investments XI, LLC (14) | | | 1,206,051 | | | | 5.88 | % |
(1) | Consists of (i) 1,750 shares of common stock held directly by Dr. Azamian (ii) 687,973 shares of common stock issuable pursuant to options held directly by Dr. Azamian exercisable within 60 days of March 31, 2021, and (iii) 1,233,271 shares of common stock held by Bobak Azamian, as Trustee of the Bobak Azamian Living Trust, established April 16, 2018. Dr. Azamian is a trustee the Bobak Azamian Living Trust, established April 16, 2018 and has voting and investment control with respect to these shares.
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(2) | Consists of (i) 1,228,924 shares of common stock held directly by Dr. Ackermann and (ii) 240,790 shares of common stock issuable pursuant to options held directly by Dr. Ackermann exercisable within 60 days of March 31, 2021.
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(3) | Consists of (i) 134,632 shares of common stock held directly by Dr. Link and (ii) 1,206,051 shares of common stock owned by Flying L Investments XI, LLC. Dr. Link is the Manager of Flying L Investments XI, LLC, and in his capacity as such, Dr. Link may be deemed to have sole voting and investment power over shares held by Flying L Investments XI, LLC. Dr. Link disclaims beneficial ownership of the shares held by Flying L Investments XI, LLC except to the extent of his pecuniary interest in such shares.
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(4) | Consists of (i) 1,920,933 shares of Common Stock held by Horowitz Limited Partnership VIII and (ii) 28,398 shares of Common Stock held by the Tester Living Trust. Mr. Tester is a trustee of the Tester Living Trust, and has voting and investment control with respect to these shares. Mr. Tester is the Chief Financial Officer of Horowitz Management, Inc., the managing partner of Horowitz Limited Partnership VIII, and in his capacity as such, Mr. Tester may be deemed to have shared voting and or investment power over the shares held by Horowitz Limited Partnership VIII. Mr. Tester disclaims beneficial ownership of the shares held by Horowitz Limited Partnership VIII.
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(5) | Consists of (i) 67,316 shares of Common Stock held directly by Mr. Greenstein and (ii) 77,157 shares of Common Stock issuable pursuant to options held directly by Mr. Greenstein exercisable within 60 days of March 31, 2021.
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(6) | Consists of (i) 49,864 shares of Common Stock held directly by Dr. Neervannan and (ii) 190,926 shares of Common Stock issuable pursuant to options held directly by Dr. Neervannan exercisable within 60 days of March 31, 2021.
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(7) | Consists of (i) 53,853 shares of common stock beneficially owned by our directors and executive officers and (iii) 95,700 shares of common stock issuable to our directors and named executive officers upon exercise of outstanding stock options exercisable within 60 days of March 31, 2021.
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(8) | Consists of 1,296,416 shares of Common Stock held directly by Perceptive Life Sciences Master Fund, Ltd. (the “Master Fund”). Perceptive Advisors LLC (“Perceptive Advisors”) serves as the investment manager to the Master Fund and may be deemed to beneficially own such shares. Joseph Edelman is the managing member of Perceptive Advisors and may be deemed to beneficially own such shares. The principal business address of the Master Fund is 51 Astor Place, 10th Floor, New York, NY 10003.
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(9) | Consists of 3,245,035 shares of Common Stock held of record by Vivo Capital Fund IX, L.P. Vivo Capital IX, LLC is the general partner of Vivo Capital Fund IX, L.P. The voting members of Vivo Capital IX, LLC are Frank Kung, Edgar Engleman, Shan Fu, Jack Nielsen and Michael Chang. None of such voting members have individual voting or investment power with respect to these shares and each of whom disclaims beneficial ownership of such shares. The principal business address of Vivo Capital IX, LLC is 192 Lytton Avenue, Palo Alto, CA 94301.
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(10) | Consists of 2,463,601 shares of Common Stock held in the aggregate by RTW Master Fund, Ltd., and one or more private funds (together, the “RTW Funds”) managed by RTW Investments, LP (the “RTW Adviser”). The RTW Adviser, in its capacity as the investment manager of the RTW Funds, has the power to vote and the power to direct the disposition of the shares held by the RTW Funds. Accordingly, the RTW Adviser may be deemed to be the beneficial owner of such securities. Roderick Wong, M.D., as the Managing Partner of the RTW Adviser, has the power to direct the vote and disposition of the securities held by the RTW Adviser. Dr. Wong disclaims beneficial ownership of the shares held by the RTW Funds, except to the extent of his pecuniary interest therein. The address and principal office of RTW Investments, LP is 40 10th Avenue, Floor 7, New York, NY 10014, and the address of Dr. Wong and each of the RTW Funds is c/o RTW Investments, LP, 40 10th Avenue, Floor 7, New York, NY 10014.
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| | | | | | | | | | | | | | |
| | Shares Beneficially Owned |
Name of Beneficial Owner | | Shares | | Percentage |
Named Executive Officers and Directors: | | | | |
Bobak Azamian (1) | | 1,920,441 | | | 4.91 | % |
Sesha Neervannan (2) | | 381,195 | | | * |
Jeffrey Farrow (3) | | 44,953 | | | * |
Bhaskar Chaudhuri (4) | | 29,000 | | | * |
Andrew Goldberg (5) | | 27,500 | | | * |
William J. Link (6) | | 273,524 | | | * |
Wendy Yarno (7) | | 39,000 | | | * |
Elizabeth Yeu-Lin (8) | | 92,909 | | | * |
Rose Crane (9) | | 22,334 | | | * |
Scott Morrison(10) | | 5,999 | | | * |
All executive officers and directors as a group (13 persons) (11) | | 3,300,844 | | | 8.25 | % |
5% Stockholders: | | | | |
RTW Investments L.P.(12) | | 3,152,341 | | | 8.35 | % |
Paradigm BioCapital Advisors LP(13) | | 1,927,506 | | | 5.11 | % |
Blackrock, Inc.(14) | | 2,515,124 | | | 6.66 | % |
Tang Capital Partners, LP (15) | | 2,204,797 | | | 5.84 | % |
Cormorant Asset Management, LP (16) | | 2,221,422 | | | 5.88 | % |
Horowitz Limited Partnership VIII(17) | | 2,015,503 | | | 5.34 | % |
Morgan Stanley(18) | | 1,943,705 | | | 5.15 | % |
Cowen & Co., LLC(19) | | 1,911,399 | | | 5.06 | % |
(11) | Consists of (i) 1,920,933 shares of Common Stock held by Horowitz Limited Partnership VIII and (ii) 66,172 shares of Common Stock held by Adam S. Horowitz Revocable Trust. Mr. Tester is the Chief Financial Officer of Horowitz Management, Inc., the managing partner of Horowitz Limited Partnership VIII, and in his capacity as such, Mr. Tester may be deemed to have shared voting and or investment power over the shares held by Horowitz Limited Partnership VIII. David Horowitz is the primary stockholder of Horowitz Management, Inc. and in his capacity as such, Mr. Horowitz may be deemed to have shared voting and or investment power over the shares held by Horowitz Limited Partnership VIII. Each of Mr. Tester and Mr. Horowitz disclaim beneficial ownership of the shares held by Horowitz Limited Partnership VIII, except to the extent of each person’s pecuniary interest therein. The principal business address of Horowitz Limited Partnership VIII is 27241 La Paz Road, Suite B, Laguna Niguel, CA 92677.
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(12) | Consists of 1,917,157 shares of Common Stock held directly by Frazier Life Sciences IX, L.P. (“FLS LP”). The general partner of FLS LP is FHMLS IX, L.P., and the general partner of FHMLS IX, L.P. is FHMLS IX, LLC. James Topper and Patrick J. Heron are the sole managing members of FHMLS IX, LLC, and share voting and investment power with respect to such shares held by FLS LP. Dr. Topper and Mr. Heron disclaim beneficial ownership of such shares except to the extent of their pecuniary interest in such shares. The principal business address of Frazier Life Sciences IX, L.P. is Two Union Square, 601 Union St., Suite 3200, Seattle, WA 98101.
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(13) | Consists of (i) 351,849 shares of Common Stock held by Cormorant Private Healthcare Fund III, LP (“Cormorant PHF III”), (ii) 281,422 shares of Common Stock held by Cormorant Private Healthcare Fund II, LP (“Cormorant PHF II”), (iii) 1,032,698 shares of Common Stock held by Cormorant Global Healthcare Master Fund, LP (“Cormorant GHMF”), and (iv) 48,300 shares of Common Stock held by CRMA SPV, L.P. (“CRMA SPV”). Cormorant Private Healthcare GP III, LLC and Cormorant Asset Management, LP serve as the general partner and investment manager of Cormorant PHF III, respectively. Cormorant Private Healthcare GP II, LLC and Cormorant Asset Management, LP serve as the general partner and investment manager of Cormorant PHF II, respectively. Cormorant Global Healthcare GP, LLC and Cormorant Asset Management, LP serve as the general partner and investment manager of Cormorant GHMF, respectively. Cormorant Asset Management, LP serves as the investment manager of CRMA SPV. Bihua Chen serves as the managing member of each of Cormorant Private Healthcare GP III, LLC, Cormorant Private Healthcare GP II, LLC, Cormorant Global Healthcare GP, LLC, and Cormorant Asset Management GP, LLC. Each of the reporting persons disclaims beneficial ownership of the shares except to the extent of its or her pecuniary interest therein. The address of the principal business office of Cormorant PHF III, Cormorant PHF II, Cormorant GHMF and CRMA SPV is 200 Clarendon Street, 52nd Floor, Boston, MA 02116.
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(14) | Consists of 1,112,301 shares of Common Stock owned by Flying L Investments XI, LLC. Dr. Link is the Manager of Flying L Investments XI, LLC, and in his capacity as such, Dr. Link may be deemed to have sole voting and investment power over shares held by Flying L Investments XI, LLC. Dr. Link disclaims beneficial ownership of the shares held by Flying L Investments XI, LLC except to the extent of his pecuniary interest in such shares. The principal business address of Flying L Investments XI, LLC is 11 Linda Isle, Newport Beach, CA 92660.
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_____________(1)Consists of (i) 26,456 shares of Common Stock held directly by Dr. Azamian (ii) 1,063,879 shares of Common Stock issuable pursuant to options held directly by Dr. Azamian exercisable within 60 days of March 31, 2024, and (iii) 830,106 shares of Common Stock held by Dr. Azamian, as Trustee of the Bobak Azamian Living Trust, established April 16, 2018. Dr. Azamian is a trustee of the Bobak Azamian Living Trust, established April 16, 2018 and has voting and investment control with respect to these shares.
(2) Consists of (i) 64,767 shares of Common Stock held directly by Dr. Neervannan and (ii) 316,428 shares of Common Stock issuable pursuant to options held directly by Dr. Neervannan exercisable within 60 days of March 31, 2024.
(3)Consists of (i) 700 shares of Common Stock held directly by Mr. Farrow and (ii) 44,253 shares of Common Stock issuable pursuant to options held directly by Mr. Farrow exercisable within 60 days of March 31, 2024.
(4)Consists of (i) 2,000 shares of Common Stock held directly by Dr. Chaudhuri and (ii) 27,000 shares of Common Stock issuable pursuant to options held directly by Dr. Chaudhuri exercisable within 60 days of March 31, 2024.
(5)Consists of (i) 3,000 shares of Common Stock held directly by Dr. Goldberg and (ii) 24,500 shares of Common Stock issuable pursuant to options held directly by Dr. Goldberg exercisable within 60 days of March 31, 2024.
(6)Consists of (i) 136,632 shares of Common Stock held directly by Dr. Link (ii) 27,000 shares of Common Stock issuable pursuant to options held directly by Dr. Link exercisable within 60 days of March 31, 2024, and (iii) 109,892 shares of Common Stock owned by Flying L Partners XI, LLC. Dr. Link is the Manager of Flying L Partners XI, LLC, and in his capacity as such, Dr. Link may be deemed to have sole voting and investment power over shares held by Flying L Partners XI, LLC. Dr. Link disclaims beneficial ownership of the shares held by Flying L Partners XI, LLC except to the extent of his pecuniary interest in such shares.
(7)Consists of (i) 7,000 shares of Common Stock held directly by Ms. Yarno and (ii) 32,000 shares of Common Stock issuable pursuant to options held directly by Ms. Yarno exercisable within 60 days of March 31, 2024.
(8)Consists of (i) 29,906 shares of Common Stock held directly by Dr. Yeu-Lin, and (ii) 63,003 shares of Common Stock issuable pursuant to options held directly by Dr. Yeu-Lin exercisable within 60 days of March 31, 2024.
(9)Consists of (i) 2,000 shares of Common Stock held directly by Ms. Crane and (ii) 20,334 shares of Common Stock issuable pursuant to options held directly by Ms. Crane exercisable within 60 days of March 31, 2024.
(10)Consists of (i) 1,333 shares of Common Stock held directly by Mr. Morrison and (ii) 4,666 shares of Common Stock issuable pursuant to options held directly by Mr. Morrison exercisable within 60 days of March 31, 2024.
(11)Consists of (i) 1,342,999 shares of Common Stock beneficially owned by our directors and executive officers and (ii) 1,957,845 shares of Common Stock issuable to our directors and named executive officers upon exercise of outstanding stock options exercisable within 60 days of March 31, 2024.
(12)Consists of 3,152,341 shares of Common Stock held in the aggregate by one or more private funds (together, the “RTW Funds”) managed by RTW Investments, LP (the “RTW Adviser”). The RTW Adviser, in its capacity as the investment adviser of the RTW Funds, has the power to vote and the power to direct the disposition of the shares held by the RTW Funds. Accordingly, the RTW Adviser may be deemed to be the beneficial owner of such securities. Roderick Wong, M.D., as the Managing Partner and Chief Investment Officer of the RTW Adviser, has the power to direct the vote and disposition of the securities held by the RTW Adviser. RTW Master Fund Ltd., one of the RTW Funds, has the right to receive or the power to direct the receipt of dividends or the proceeds from the sale of more than 5% of the shares held by the RTW Funds. Dr. Wong disclaims beneficial ownership of the shares held by the RTW Funds, except to the extent of his pecuniary interest therein. The address and principal office of RTW Investments, LP is 40 10th Avenue, Floor 7, New York, NY 10014, and the address of Dr. Wong and each of the RTW Funds is c/o RTW Investments, LP, 40 10th Avenue, Floor 7, New York, NY 10014.
(13)Consists of (i) 1,927,506 shares of Common Stock held of record by Paradigm BioCapital International Fund Ltd. (the “Paradigm Fund”) and one or more separately managed accounts managed by Paradigm BioCapital Advisors LP (the “Paradigm Adviser” and such separately managed accounts, the “Paradigm Account”). Paradigm BioCapital Advisors GP LLC (the “Paradigm Adviser GP”) is the general partner of Paradigm Adviser, and Senai Asefaw is the managing member of Paradigm Adviser GP. Paradigm Adviser, Paradigm Adviser GP and Senai Asefaw may be deemed to beneficially own the Common Stock directly beneficially owned by the Paradigm Fund and the Paradigm Account. Each of the parties disclaims beneficial ownership with respect to any shares of the Common Stock other than the shares of Common Stock directly beneficially owned by such party. The principal business address of the Paradigm Fund, Paradigm Adviser, the Paradigm Account, Paradigm Adviser GP and Senai Asefaw is 767 Third Avenue, 17th Floor, New York, NY 10017 .
(14)Consists of 2,515,124 shares of Common Stock held of record by BlackRock, Inc. The principal address of BlackRock, Inc. is 50 Hudson Yards, New York, NY 10001.
(15)Consists of 2,204,797 shares of Common Stock held of record by Tang Capital Partners, LP. Tang Capital Management, LLC is the general partner of Tang Capital Partners, LP and Kevin Tang is the manager of Tang Capital Management, LLC. Tang Capital Partners, LP, Tang Capital Management and Kevin Tang have the power to vote and the power to direct disposition of the shares of Common Stock held by Tang Capital Partners, LP such that each of Tang Capital Management, LLC and Kevin Tang may be deemed to be beneficial owner of such securities. The principal address of Tang Capital Management, LLC, Tang Capital Partners, LP and Kevin Tang is 4747 Executive Drive, Suite 210, San Diego, CA 92121.
(16)Consists of (i) 340,000 shares of Common Stock held by Cormorant Private Healthcare Fund III, LP (“Cormorant PHF III”), (ii) 281,422 shares of Common Stock held by Cormorant Private Healthcare Fund II, LP (“Cormorant PHF II”), and (iii) 1,600,000 shares of Common Stock held by Cormorant Global Healthcare Master Fund, LP (“Cormorant GHMF”). Cormorant Global Healthcare GP, LLC, Cormorant Private Healthcare GP II, LLC and Cormorant Private Healthcare GP III, LLC serve as the general partners of Cormorant GHMF, Cormorant PHF II, and Cormorant PHF III, respectively. Cormorant Asset Management, LP serves as the investment manager to each of Cormorant GHMF, Cormorant PHF II, and Cormorant PHF III. Bihua Chen serves as the managing member of each of Cormorant Private Healthcare GP III, LLC, Cormorant Private Healthcare GP II, LLC, Cormorant Global Healthcare GP, LLC, and the general partner of Cormorant Asset Management GP, LP. Each of the reporting persons disclaims beneficial ownership of the shares except to the extent of its or her pecuniary interest therein. The address of the principal business office of such persons and entities in this footnote is 200 Clarendon Street, 52nd Floor, Boston, MA 02116.
(17)Consists of (i) 1,920,933 shares of Common Stock held of record by Horowitz Limited Partnership VIII (ii) 66,172 shares of Common Stock held by Adam S. Horowitz Revocable Trust, and (iii) 28,398 shares of Common Stock held by Tester Living Trust. Horowitz Management, Inc. is the managing partner of Horowitz Limited Partnership VIII, and has voting and dispositive power over the shares held by Horowitz Limited Partnership VIII. Horowitz Limited Partnership is affiliated with Adam S. Horowitz, the trustee of the Adam S. Horowitz Revocable Trust, such that Horowitz Limited Partnership may be deemed to have shared voting and dispositive power over the securities held by Adam S. Horowitz Revocable Trust. Jason Tester is a trustee of the Tester Living Trust, and has voting and investment control with respect to the securities held by the Tester Living Trust such that Mr. Tester may be deemed to be the beneficial owners of the shares held by Tester Living Trust. Mr. Tester is the Chief Financial Officer of Horowitz Management, Inc. and has shared voting and dispositive power over the shares held by Horowitz Limited Partnership VIII. Accordingly, Mr. Tester may be deemed to be beneficial owner of the securities held by Horowitz Limited Partnership VIII.
Mr. Tester disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. The principal place of business for each of Horowitz Limited Partnership VIII, Horowitz Management, Inc. the Adam S. Horowitz Revocable Trust and the Tester Living Trust is c/o Horowitz Limited Partnership VIII, 5030 Campus Drive, Suite A, Newport Beach, CA 92660.
(18)Consists of 1,943,705 shares of Common Stock held of record by Morgan Stanley. The principal place of business for Morgan Stanley is 1585 Broadway, New York, NY 10036.
(19)Consists of 1,911,399 shares of Common Stock held of record by Cowen Financial Products LLC. 599 Lexington Ave, New York, NY 10022.
SECTION
16(a)16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors, executive officers, and holders of more than 10% of our Common Stock to file reports regarding their ownership and changes in ownership of our securities with the SEC, and to furnish us with copies of all Section 16(a) reports that they file.
Delinquent Section 16(a) Reports
We believe that during the fiscal year ended December 31, 2020,2023, our directors, executive officers, and greater than 10% stockholders complied with all applicable Section 16(a) filing requirements.requirements, except for an inadvertent delay in filing of one report by Dr. Azamian with respect to transactions involving the sale of our Common Stock effected by automatic sales pursuant to a Rule 10b5-1 trading plan adopted by Dr. Azamian. In making these statements, we have relied upon a review of the copies of Section 16(a) reports furnished to us and the written representations of our directors, executive officers, and greater than 10% stockholders.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
POLICIES
POLICIES AND
PROCEDURES PROCEDURES FOR RELATED PARTY TRANSACTIONS RELATED PARTY TRANSACTIONS
We adopted a formal written policy providing that we are not permitted to enter into any transaction, arrangement, or relationship (or series of similar transactions, arrangements, or relationships) that exceeds the lesser of $120,000 or
2%1% of the average of our total assets for the last two completed fiscal years and in which any related person has a direct or indirect material interest without the consent of our audit committee. As provided by our audit committee charter, our audit committee has the primary responsibility for the review, approval and oversight of such “related person
transactions”transactions.” Under our related person transaction policy, our management is required to submit any related person transaction not previously approved or ratified by our audit committee to our audit committee. In approving or rejecting the proposed transactions, our audit committee takes into account all of the relevant facts and circumstances available and deemed relevant to our audit committee, including whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction. Our audit committee will approve only those transactions that, as determined by our audit committee, are in, or are not inconsistent with, our best interests and the best interests of our stockholders.
Other than
We entered into the
LianBioInvestors’ Rights Agreement
(as defined below) all of the transactions described in this section were entered into prior to the adoption of this policy. Although we did not
hadhave a written policy for the review and approval of transactions with related persons
prior to becoming a public reporting Company, our Board of Directors
has historically reviewed and approved any transaction
wherein which a director or officer had a financial interest, including the
transactionsInvestors’ Rights Agreement described below. Prior to approving such a transaction, the material facts as to relationship or interest of the relevant director, officer or holder of 5% or more of any class of our voting securities in the agreement or transaction was disclosed to our Board of Directors. Our Board of Directors took this information into account when evaluating the transaction and in determining whether such transaction was fair to us and in the best interest of all our stockholders.
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS
In addition to the compensation arrangements with directors and named executive officers described elsewhere in this proxy statement, since January 1,
2020,2022, we were involved in the following transactions in which we were or are a party involving an amount in excess of
the lower of (i) $120,000
or (ii) 1% of the average of our total assets at year end for the last two completed fiscal years and in which any director, executive officer, holder of more than 5% of our capital stock, or any member of the immediate family or person sharing the household with any of these individuals (other than tenants or employees), had or will have a direct or indirect material interest.
LICENSE AGREEMENT
CONSULTING AGREEMENT WITH
LIANBIO DR.YEU
On March 26, 2021,August 1, 2020, prior to her appointment to our Board, we entered into a development and licenseconsulting agreement (the “LianBiowith Dr. Yeu (as amended most recently on January 30, 2024, the “Yeu Consulting Agreement”) with LianBio Ophthalmology Limited (“LianBio”), pursuant tounder which among other things, we licensed the product rightsDr. Yeu serves as our Chief Medical Advisor. The Yeu Consulting Agreement provides for the development and commercialization of TP-03 (lotilaner ophthalmic solution, 0.25%) in the People’s Republic of China, Hong Kong, Macau, and Taiwan (the “Territories”) for the treatment of Demodex blepharitis and Meibomian Gland Disease. Under the terms of the LianBio Agreement, we are entitled to an upfront payment of $15.0 million with an additional time-based payment of $10.0 million expected during the quarter ended June 30, 2021. We will be eligibleDr. Yeu to receive development and commercialization milestone paymentsannual cash compensation of up to $75.0 million and $100.0 million, respectively, as well as tiered low double-digit royalties on the sale of TP-03 in the Territories. We also received a warrant$360,000. Additionally, Dr. Yeu was granted an option to purchase ordinary shares of LianBio, representing a minority interest in LianBio upon issuance, which will vest upon the achievement of certain milestones. The warrant will be exercisable at the fair market value at the time of issuance. The term of the LianBio Agreement shall expire upon the expiration of the royalty term in the Territories, unless earlier terminated. LianBio may also terminate the LianBio Agreement for any reason upon ninety (90) days’ prior notice to us. LianBio is an affiliate of Perceptive Advisors, one of our 5% stockholders.
SERIES C PREFERRED STOCK FINANCING
In September 2020, we issued and sold an aggregate of 2,857,079 shares of our Series C preferred stock at a cash purchase price of $14.0003 per share of Series C preferred stock for an aggregate purchase price of approximately $40.0 million. These shares of Series C preferred stock converted into an aggregate of 2,857,079 shares of Common Stock upon the completion of our IPO. The table below sets forth the number of shares of Series C preferred stock sold to our directors, executive officers and holders of more than 5% of our capital stock:
| | | | | | | | | | |
Investor | | Affiliated Director(s) or Officer(s) | | Shares of Series C Preferred Stock | | | Total Purchase Price | |
Vivo Capital Fund IX, L.P. | | Andrew Goldberg (1) | | | 214,281 | | | $ | 3,000,000 | |
Frazier Life Sciences IX, L.P. | | Bhaskar Chaudhuri (2) | | | 214,281 | | | $ | 3,000,000 | |
Horowitz Limited Partnership VIII | | Jason Tester | | | 71,427 | | | $ | 1,000,000 | |
Entities affiliated with RTW Investments, LP (3) | | | | | 1,071,406 | | | $ | 14,999,998 | |
Entities affiliated with Cormorant Asset Management, LP (4) | | | | | 714,268 | | | $ | 9,999,996 | |
(1) | Dr. Goldberg was designated by Vivo Capital Fund IX, L.P. but does not have any voting or investment control over the shares held by Vivo Capital Fund IX, L.P.
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(2) | Dr. Chaudhuri was designated by Frazier Life Sciences IX, L.P. but does not have any voting or investment control over the shares held by Frazier Life Sciences IX, L.P.
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(3) | Entities affiliated with RTW Investments, LP holding shares of our Series C preferred stock which are aggregated for purposes of reporting share ownership information include RTW Master Fund, Ltd., RTW Innovation Master Fund, Ltd. and RTW Venture Fund Limited.
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(4) | Entities affiliated with Cormorant Asset Management, LP holding shares of our Series C preferred stock which are aggregated for purposes of reporting share ownership information include Cormorant PHF III, Cormorant PHF II, Cormorant GHMF, LP and CRMA SPV.
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DIRECTED SHARE PROGRAM
At our request, the underwriters of our IPO offering in October 2020 reserved up to 3.7% of the shares of Common Stock that were offered for sale at the initial public offering price, to our business associates and certain other persons associated with us. Shares purchased under the directed share program were subject to a 180-day lock-up restriction.
PARTICIPATIONINOUR INITIAL PUBLIC OFFERING
Certain of our directors, executive officers and previously existing stockholders that are affiliated with certain of our directors or that beneficially owned more than 5% of our outstanding Common Stock purchased an aggregate of 2,310,94555,134 shares of our Common Stock pursuant to the Yeu Consulting Agreement, with exercise prices ranging from $2.01 to $34.72 per share. Pursuant to the existing terms of her outstanding options, Dr. Yeu will continue to vest in her outstanding options as she continues to provide services to us pursuant to the Yeu Consulting Agreement. The Yeu Consulting Agreement may be terminated by either party with ten days’ notice. The Yeu Consulting Agreement contains standard confidentiality, indemnification and intellectual property assignment provisions in favor of the Company.
EQUITY INVESTMENT IN PRIVATELY-HELD EYE CARE COMPANY
In April 2024, we participated in an equity round of an early clinical-stage private eye care company. Pursuant to the terms of a Preferred Stock Purchase Agreement we purchased $3,000,000 of preferred stock. Drs. Azamian and Link are board members and our
IPO in October 2020 at the initial public offering price. The following table sets for the aggregate numberformer director, Michael Ackermann, is an executive and board member of
our Common Stock that these directors, officers and 5% stockholders and their affiliates purchase in our initial public offering: | | | | | | | | |
Purchaser | | Shares of Common Stock | | | Total Purchase Price | |
Entities affiliated with RTW Investments, LP(1) | | | 1,392,195 | | | $ | 22,275,120 | |
Entities affiliated with Cormorant Asset Management, LP(2) | | | | | | | | |
Frazier Life Sciences IX, L.P. | | | 312,500 | | | | 5,000,000 | |
Vivo Capital Fund IX, L.P. | | | 250,000 | | | | 4,000,000 | |
Entities affiliated with Horowitz Limited Partnership VIII(3) | | | 184,375 | | | | 2,950,000 | |
Entities affiliated with Jason Tester(4) | | | 171,875 | | | | 2,750,000 | |
(1) | Consists of 1,392,195 shares of our Common Stock purchased by the RTW Funds, each managed by the RTW Adviser.
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(2) | Consists of (i) 957,200 shares of Common Stock purchased by Cormorant GHMF and (iv) 42,801 shares of Common Stock purchased by CRMA SPV.
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(3) | Consists of (i) 168,750 shares of our Common Stock purchased by Horowitz Limited Partnership VIII and (ii) 66,172 shares of our Common Stock purchased by the Adam S. Horowitz Revocable Trust. Horowitz Limited Partnership VIII is a 5% or greater stockholder, and Jason Tester, a member of our Board, is an affiliate of Horowitz Limited Partnership VIII.
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(4) | Consists of (i) 168,750 shares of our Common Stock purchased by Horowitz Limited partnership VIII and (ii) 3,125 shares of our Common Stock purchased by the Tester Living Trust. Jason Tester, a member of our Board, is an affiliate of Horowitz Limited Partnership VIII and is trustee of the Tester Living Trust.
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INVESTORS’ RIGHTS AGREEMENT
this private company. We own a small minority of this private company.
INVESTORS’ RIGHTS AGREEMENT
We are party to an amended and restated investors’ rights agreement with certain holders of our capital stock, including
(i) entities affiliated with Mr. Tester, (ii) entities affiliated with Visionary Venture Fund, (iii) Vivo Capital Fund IX, L.P., (iv) Frazier Life Sciences IX, L.P., (v) Flying L Investments XI, LLC,
(vi) entities affiliated with RTW Investments, LP, (vii) entities affiliated with Cormorant Asset Management, LP, (viii) Dr. Ackermann and
(ix) Dr. Azamian. Under our investors’ rights agreement, certain holders of our capital stock have the right to demand that we file a registration statement or request that their shares of our capital stock be covered by a registration statement that we are otherwise filing.
INDEMNIFICATION AGREEMENTS
INDEMNIFICATION AGREEMENTS
We have entered into an indemnification agreement with each of our directors and executive officers. The indemnification agreements and our certificate of incorporation and bylaws require us to indemnify our directors and executive officers to the fullest extent permitted by Delaware law.
EXECUTIVE COMPENSATION
2020 SUMMARY COMPENSATION TABLE
2023 SUMMARY COMPENSATION TABLE
The following table provides information regarding the compensation of our “principal executive officer” and our next two most highly compensated executive officers
duringwho were serving as of the
2020end of our 2023 fiscal
year.year, as well as one former executive officer. We refer to these individuals as our “named executive officers.”
| | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | | Year | | | Salary ($) | | | Bonus(1) ($) | | | Option Awards(2) ($) | | | All Other Compensation(3) ($) | | | Total ($) | |
Bobak Azamian, M.D. Ph.D. | | | 2020 | | | | 437,000 | | | | 211,484 | | | | 1,847,092 | | | | 14,820 | | | | 2,510,396 | |
President, Chief Executive Officer and Director | | | 2019 | | | | 300,000 | | | | 116,137 | | | | — | | | | — | | | | 416,137 | |
| | | | | | |
Leo Greenstein(4) | | | 2020 | | | | 256,023 | | | | 147,437 | | | | 418,703 | | | | 13,280 | | | | 835,443 | |
Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Seshadri Neervannan, Ph.D.(4). | | | 2020 | | | | 199,621 | | | | 85,248 | | | | 1,926,633 | | | | 2,175 | | | | 2,213,677 | |
Chief Operating Officer | | | | | | | | | | | | | | | | | | | | | | | | |
(1) | The amounts in this column reflect annual cash bonuses paid with respect to the applicable fiscal year and, in the case of Mr. Greenstein, a $40,000 sign on bonus he was paid in fiscal 2020.
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(2) | The amounts in this column reflect the aggregate grant date fair value of option awards granted in 2020, computed in accordance with FASB ASC Topic 718. See Note 5 of the notes to our audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the SEC on March 31, 2021.
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(3) | The amounts in this column reflect premiums for medical benefits, or waiver allowances if benefits were not elected, paid to each of our named executive officers.
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(4) | Mr. Greenstein and Dr. Neervannan were employed by us, but were not one of our named executive officers in 2019. Accordingly, compensation information is only provided for 2020.
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NARRATIVE EXPLANATION
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Name and Principal Position | | Year | | Salary ($) | | Bonus(1) ($) | | Stock Awards(2) ($) | | Option Awards(2) ($) | | Non-Equity Incentive Plan Compensation (3) ($) | | All Other Compensation ($) | | Total ($) |
Bobak Azamian, M.D., Ph.D. | | 2023 | | 619,500 | | | — | | | 1,029,364 | | | 1,017,968 | | | 450,300 | | | 13,200 | | (4) | 3,130,332 | |
President, Chief Executive Officer and Board Chairman | | 2022 | | 590,000 | | | — | | | 876,822 | | | 2,077,378 | | | 324,500 | | | 47,580 | | | 3,916,280 | |
| | | | | | | | | | | | | | | | |
Seshadri Neervannan, Ph.D. | | 2023 | | 500,000 | | | — | | | 494,095 | | | 488,623 | | | 246,000 | | | 13,200 | | (4) | 1,741,918 | |
Chief Operating Officer | | | | | | | | | | | | | | | | — | |
| | | | | | | | | | | | | | | | |
Jeffrey Farrow(5) | | 2023 | | 343,751 | | | 100,000 | | | 1,678,310 | | | 1,590,572 | | | 241,200 | | | 37,997 | | (6) | 3,991,830 | |
Chief Financial Officer and Chief Strategy Officer | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Leonard Greenstein(7) | | 2023 | | 202,100 | | | — | | | 411,746 | | | 893,298 | | (8) | 71,552 | | | 399,883 | | (9) | 1,978,579 | |
Chief Financial Officer | | | | | | — | | | | | | | | | | | — | |
_____________
(1)Represents a one-time signing bonus paid in the year of hire.
(2)Represents the aggregate grant date fair value of stock awards and option awards granted in the applicable fiscal year, computed in accordance with FASB ASC Topic 718. See Note 6 of the notes to our audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC on February 27, 2024.
(3)The amounts in this column reflect annual cash bonuses paid with respect to the applicable fiscal year, based on corporate and individual performance.
(4)Consists of $13,200 in matching contributions for the 401(k) plan.
(5)Mr. Farrow was appointed Chief Financial Officer and Chief Strategy Officer on April 24, 2023. Accordingly, compensation information is only provided for the duration of employment for 2023.
(6)Consists of (i) $13,200 in matching contributions for the 401(k) plan, and (ii) $24,797 of company-paid temporary living expenses.
(7)Mr. Greenstein was our Chief Financial Officer until April 23, 2023, and separated from the Company on June 15, 2023. He was employed by us but was not one of our named executive officers in 2022; accordingly, compensation information is only provided for 2023.
(8)Includes $486,109 in incremental fair value associated with the modification of certain stock options held by Mr. Greenstein pursuant to the separation agreement that was entered into with him in May 2023.
(9)Consists of (i) company-paid premiums for healthcare and life insurance policies through his termination date of June 15, 2023, (ii) $12,270 in matching contributions for the 401(k) plan, (iii) $48,158 for accrued paid-time-off that was paid out at the time of his termination of employment, (iv) $335,400 in severance pay, and (v) $4,055 for company-paid health benefit continuation in connection with his termination of employment.
NARRATIVE EXPLANATION OF
COMPENSATION ARRANGEMENTS COMPENSATION ARRANGEMENTS WITHOUR NAMED EXECUTIVE OFFICERSBASE SALARIES NAMED EXECUTIVE OFFICERS
BASE SALARIES AND
ANNUAL INCENTIVE OPPORTUNITIES ANNUAL INCENTIVE OPPORTUNITIES
The base salaries of all of our named executive officers are reviewed from time to time and adjusted when our Board of Directors or compensation committee determines an adjustment is appropriate. For our
20202023 fiscal year, the base salaries of
eachDr. Azamian, Dr. Neervannan and Mr. Greenstein were set at $625,400, $504,000, and $447,200, respectively, in connection with our compensation committee’s annual review of our
named executive officers priorexecutives’ performance and compensation, which was an increase from their salaries in 2022 of $590,000, $480,000, and $430,000 respectively. The base salary of Mr. Farrow was negotiated at the time of his hire in April 2023 and set at $500,000. Mr. Farrow did not receive any other salary increases in 2023 due to
an October 16, 2020 adjustment were as follows: Dr. Azamian: $412,000; Mr. Greenstein: $360,000; and Dr. Neervannan: $400,000. Following the October 16, 2020 salary adjustments, the base salaries of each of our named executive officers were as follows: Dr. Azamian: $532,000; Mr. Greenstein: $378,000; Dr. Neervannan: $420,000.his recent hire.
Each of our named executive officers is eligible to earn ana performance-based incentive bonus for each of our fiscal years, with such bonus awarded based on individual performance goals, as well as corporate goals related to our product development and advancement of clinical studies established by our chief executive officer and approved by our Board of Directors.compensation committee. During our fiscal year ended December 31, 2020,2023, our named executive officers were eligible to earn cash incentive bonuses based on a combination of corporate and
individual goals. We require that participants continue to be employed through the payment date to receive a bonus.bonus; provided, however, that for our 2023 fiscal year bonus payouts, Mr. Greenstein received a pro-rated portion of his 2023 bonus pursuant to the terms of the separation agreement that was entered into with him in May 2023. For our 20202023 fiscal year, the target bonus rate (as a percentage of base salary) was 50%60% for Dr. Azamian, (30% prior to October 16, 2020), 40% for Mr. Greenstein (35% prior to October 16, 2020) and 40% for Dr. Neervannan, (35% prior to October 16, 2020).40% for Mr. Farrow and Mr. Greenstein.
EQUITY COMPENSATION
We offer stock options
and restricted stock units (“RSUs”) to our employees, including our named executive officers, as the long-term incentive component of our compensation program. Our stock options allow our employees to purchase shares of our
common stockCommon Stock at a price equal to the fair market value of our
common stockCommon Stock on the date of grant. In the past, our Board of Directors or compensation committee has determined the fair market value of our
common stockCommon Stock based on inputs including valuation reports prepared by third party valuation
firms.firms; however, following our initial public offering in 2020, our Board of Directors or compensation committee determines the fair market value of our Common Stock based on the closing price of our Common Stock. Generally, our stock options granted
to new hires have vested as to 25% of the total number of option shares on the first anniversary of the award and in equal monthly installments over the following 36 months.
During fiscal 2020, Generally, our RSUs granted have vested in addition to the new hire grants that each of Mr. Greenstein and Dr. Neervannan receivedequal annual installments over four years.
In March 2023, in connection with our compensation committee's annual review of our executives' performance and compensation, Dr. Azamian, Dr. Neervannan and Mr. Greenstein received grants including option grants for shares of our Common Stock of 100,242, 48,116 shares, and 40,097 shares, respectively, and RSU grants for shares of our Common Stock of 67,900, 32,592 and 27,160 shares, respectively. These grants vest based on their continued service with us through each such vesting date as follows: (i) the option grants vest as to 25% of the total number of option shares on March 8, 2024, and the remaining shares vest in equal monthly installments over the following 36 months thereafter, and (ii) the RSU grants vest in equal annual installments on each of March 15, 2024, March 15, 2025, March 15, 2026, and March 15, 2027. Mr. Greenstein's 2023 option and RSU grants were forfeited in their entirety upon his termination of employment with us in June 2023.
In connection with Mr. Farrow's commencement of employment
with us in April 2023, he received an option grant for 163,397 shares of our Common Stock, and a RSU grant for 111,525 shares of our Common Stock as described in further detail below in “Employment Arrangements with Named Executive
Officers,Officers.”
each of our named executive officers received optionMr. Farrow's new hire grants
in the following amounts (the “Refresh Grants”): Dr. Azamian: 914,957 shares; Mr. Greenstein: 192,141 shares; and Dr. Neervannan: 320,234 shares. The Refresh Grants will vest in 48 equal monthly installments from the date of grant in September 2020,are subject to
his continued service
by the named executive officer with us through each such vesting
date.EMPLOYEE BENEFITSdate as follows: (i) the option grant vests as to 25% of the total number of option shares on April 24, 2024 and in equal monthly installments over the following 36 months thereafter, and (ii) the RSU grant vests in equal annual installments on each of March 15, 2024, March 15, 2025, March 15, 2026, and March 15, 2027.
The grants to our current named executive officers also provide for accelerated vesting of all unvested option shares and RSUs in the event we undergo a change in control and the named executive officer is subject to an involuntary termination without cause within 12 months thereafter.
EMPLOYEE BENEFITS AND
PERQUISITES PERQUISITES
Our named executive officers are eligible to participate in our health and welfare plans
or receive an allowance for electing not to receive healthcare through the company, to the same extent as our full-time employees generally. We generally do not provide our named executive officers with perquisites or other personal benefits.
We contract with TriNet, a professional employer organization that helps us administer pay and benefits, among other things.RETIREMENT BENEFITS
RETIREMENT BENEFITS
We have established a 401(k)
tax-deferred savings plan
through TriNet, which permits participants, including our named executive officers, to make contributions by salary deduction pursuant to Section 401(k) of the Internal Revenue Code. We
match 4% of employee elected contributions, up to a maximum annual compensation limit of $330,000, which vest immediately and are made each payroll period. We are responsible for administrative costs of the 401(k) plan.
EMPLOYMENT ARRANGEMENTS
EMPLOYMENT ARRANGEMENTS WITH
NAMED EXECUTIVE OFFICERS NAMED EXECUTIVE OFFICERS
We
enteredenter into offer letters with each of our named executive officers
settingat the commencement of their employment with us, and which set forth the initial terms of the officer’s employment with us and
providingprovide that the officer’s employment will be “at will” and may be terminated at any time.
On October 8, 2020, we entered into an amended employment letter agreement with Bobak Azamian
or the Azamian(the “Azamian Letter
Agreement,Agreement”) which became effective upon our initial public offering in October 2020, to
continuingcontinue serving as our Chief Executive Officer and pursuant to which Dr. Azamian
iswas entitled to receive an annual base salary of $532,000 and an annual incentive bonus with a target equal to 50% of his annual base salary.
Dr Azamian's annual base salary and annual incentive bonus target have been increased, most recently in 2023 in connection with our compensation committee’s annual review of executive compensation, as described further in “Base Salaries and Annual Incentive Opportunities,” above. Dr. Azamian is eligible to receive severance benefits pursuant to
the Azamian Letter Agreement,an executive severance and change in control agreement effective September 1, 2023, as described in “Severance and Change in Control Benefits” below.
On March 7, 2023, we entered into an offer letter with Jeffrey Farrow (the "Farrow Offer Letter") to serve as our Chief Financial Officer and Chief Strategy Officer pursuant to which Mr. Farrow was entitled to receive an annual base salary of $500,000, an annual incentive bonus with a target equal to 40% of his annual base salary, a signing bonus of $100,000, an option grant to purchase 163,397
shares of our Common Stock and 111,525 RSUs. Mr. Farrow is eligible to receive severance benefits pursuant to an executive severance and change in control agreement effective September 1, 2023, as described in "Severance and Change in Control Benefits" below.
On June 4, 2020, we entered into an offer letter with Seshadri Neervannan (the “Neervannan Offer Letter”) to serve as our Chief Operating Officer pursuant to which Dr. Neervannan was entitled to receive an annual base salary of $400,000, an annual incentive bonus with a target equal to 35% of his annual base salary, a signing bonus of $75,000 and an option to purchase 1,735,128 shares of our Common Stock. Dr. Neervannan’s annual base salary was most recently increased in 2023 in connection with our compensation committee’s annual review of executive compensation, as described further in “Base Salaries and Annual Incentive Opportunities,” above. Dr. Neervannan is eligible to receive severance benefits pursuant to an executive severance and change in control agreement effective September 1, 2023, as described in “Severance and Change in Control Benefits” below.
On March 15, 2020, we entered into an offer letter with Leonard Greenstein (the “Greenstein Offer Letter with Leo Greenstein, or the Greenstein Offer Letter,Letter”) to serve as our Chief Financial Officer pursuant to which Mr. Greenstein iswas entitled to receive an annual base salary of $360,000, an annual incentive bonus with a target equal to 35% of his annual base salary, a signing bonus of $40,000 and an option to purchase 140,1631,041,077 shares of our common stock. Effective upon our initial public offering in October 2020,Common Stock. Mr. Greenstein’s annual base salary was increased in 2023 in connection with our compensation committee’s annual review of executive compensation, as described further in “Base Salaries and Annual Incentive Opportunities,” above.
Our current named executive officers are eligible to $378,000,receive severance and his annual incentive bonus target was increased to 40%other change in control-related benefits upon certain terminations of his annual base salary.
Onemployment, as described in further detail below in “Severance and Change in Control Benefits.”In connection with Mr. Greenstein's termination of employment with us in June 4, 2020 we2023, Mr. Greenstein entered into an Offer Lettera separation agreement with Seshadri Neervannan to serve as our Chief Operating Officerus pursuant to which Dr. Neervannanhe received the severance benefits described in in “Severance and Change in Control Benefits” below.
CLAWBACK POLICY
In compliance with final rules adopted by the SEC and Nasdaq listing standards, we adopted a policy in 2023 for the recovery of erroneously awarded compensation, or “clawback” policy, which applies to our executive officers, as defined in the policy, who are employed by us during the applicable recovery period.Under the policy, in the event that the financial results upon which a cash or equity-based incentive award was predicated become the subject of a financial restatement that is entitledrequired because of material non-compliance with financial reporting requirements, the compensation committee will conduct a review of awards covered by the policy and recoup any erroneously awarded incentive-based compensation to receive an annual base salary of $400,000, an annualensure that the ultimate payout gives retroactive effect to the financial results as restated.The clawback policy covers any cash or equity-based incentive bonus withcompensation award that was paid, earned or granted to a target equalcovered officer during the last completed three fiscal years immediately preceding the date on which we are required to 35% of his annual base salary, a signing bonus of $75,000 (50% of which will be paid on January 31, 2021 and 50% of which will be paid on July 31, 2021) and an option to purchase 233,605 shares of our common stock. Effective upon our initial public offering, Dr. Neervannan’s annual base salary was increased to $420,000, and his annual incentive bonus target was increased to 40% of his annual base salary.OUTSTANDING EQUITY AWARDSprepare the accounting restatement.
OUTSTANDING EQUITY AWARDS AT
2020 FISCAL YEAR-END 2023 FISCAL YEAR-END
The following table sets forth information regarding each unexercised option and all unvested
restricted stockRSUs held by each of our named executive officers as of December 31,
2020. All of these awards2023. Options granted prior to our initial public offering were
madegranted pursuant to our 2016 Stock
Plan.Plan (the “2016 Plan”). Options granted after our initial public offering and all RSUs were granted pursuant to our 2020 Equity Incentive Plan (the “2020 Plan”). All of the options and RSUs granted to our named executive officers will fully accelerate in the event the named executive officer is subject to an involuntary termination within three months before or after our change in control, as described in further detail below in "Severance and Change in Control Benefits."
The vesting schedule applicable to each outstanding
option award and RSU award is described in the footnotes to the table below.
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| | | | | | | | Option Awards | | | Stock Awards | |
Name | | Number of Securities Underlying Unexercised Options Vested (#) | | | Number of Securities Underlying Unexercised Options Unvested (#) | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units that Have Not Vested (1)($) | |
Bobak Azamian | | | 64,627 | (2) | | | 50,267 | (2) | | | 0.45 | | | | 10/26/2028 | | | | — | | | | — | |
| | | 138,137 | (3) | | | 414,412 | (3) | | | 2.01 | | | | 4/2/2030 | | | | — | | | | — | |
| | | 7,698 | (4) | | | 72,849 | (4) | | | 10.99 | | | | 9/24/2030 | | | | — | | | | — | |
Leo Greenstein | | | — | (5) | | | 72,846 | (5) | | | 2.01 | | | | 5/13/2030 | | | | — | | | | — | |
| | | 1,616 | (4) | | | 24,252 | (4) | | | 10.99 | | | | 9/24/2030 | | | | — | | | | — | |
| | | — | | | | — | | | | — | | | | — | | | | 67,316 | (6) | | | 2,782,170 | |
Seshadri Neervannan | | | — | (7) | | | 183,741 | (7) | | | 2.01 | | | | 7/12/2030 | | | | — | | | | — | |
| | | 2,694 | (4) | | | 40,420 | (4) | | | 10.99 | | | | 9/24/2030 | | | | — | | | | — | |
| | | — | | | | — | | | | — | | | | — | | | | 49,864 | (8) | | | 2,060,879 | |
(1) | In accordance with SEC rules, market value is based on the closing price of our common stock on December 31, 2020, the last trading day of the year, of $41.33.
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(2) | Option vests in 48 equal monthly installments beginning on September 15, 2018 provided Dr. Azamian remains in continuous service through each such vesting date. The option will also become fully vested on an accelerated basis if Dr. Azamian remains in continuous service through a change in control.
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(3) | Option vests in 48 equal monthly installments beginning on December 13, 2019 provided Dr. Azamian remains in continuous service through each such vesting date. The option will also become fully vested on an accelerated basis if Dr. Azamian remains in continuous service through a change in control and is subject to an involuntary termination within 12 months following such change in control.
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(4) | Option vests in 48 equal monthly installments beginning on September 25, 2020 provided the named executive officer remains in continuous service through each such vesting date. The option will also become fully vested on an accelerated basis if the named executive officer remains in continuous service through a change in control and is subject to an involuntary termination within 12 months following such change in control.
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(5) | Represents the unexercised portion of an option granted on May 14, 2020, in connection with Mr. Greenstein’s commencement of service with us, for 140,162 shares. Option vests over 4 years beginning on April 20, 2020 (i.e., will no longer be subject to our right of repurchase), with 25% of the total option shares vesting on the one year anniversary of such date and in 36 equal monthly installments thereafter, provided Mr. Greenstein remains in continuous service through each such vesting date. The option will also become fully vested on an accelerated basis if Mr. Greenstein remains in continuous service through a
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| change in control and is subject to an involuntary termination within 12 months following such change in control. |
(6) | Represents restricted shares of our common stock that were purchased pursuant to the exercise of an option granted on May 14, 2020, and which are subject to our right of repurchase. 25% of the 140,162 shares subject to the option will vest on April 20, 2021 (i.e., will no longer be subject to our right of repurchase), and an additional 1/48th of the shares subject to the option will vest upon Mr. Greenstein’s completion of each month of continuous service thereafter.
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(7) | Represents the unexercised portion of an option granted on July 13, 2020, in connection with Dr. Neervannan’s commencement of service with us, for 233,605 shares. Option vests over 4 years beginning on July 6, 2020 (i.e., will no longer be subject to our right of repurchase), with 25% of the total option shares vesting on the one year anniversary of such date and in 36 equal monthly installments thereafter, provided Dr. Neervannan remains in continuous service through each such vesting date. The option will also become fully vested on an accelerated basis if Dr. Neervannan remains in continuous service through a change in control and is subject to an involuntary termination within 12 months following such change in control.
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(8) | Represents restricted shares of our common stock that were purchased pursuant to the exercise of an option granted on July 13, 2020, and which are subject to our right of repurchase. 25% of the 233,605 shares subject to the option will vest on July 6, 2021 (i.e., will no longer be subject to our right of repurchase), and an additional 1/48th of the shares subject to the option will vest upon Dr. Neervannan’s completion of each month of continuous service thereafter.
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SEVERANCE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Option Awards | | Stock Awards |
Name | | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | | Option Expiration Date | | Number of Shares or Units of Stock That Have not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested (1) ($) |
Bobak Azamian | | 114,894 | | (2) | — | | | 0.45 | | | 10/26/2028 | | — | | | — | |
| | 552,549 | | (3) | — | | | 2.01 | | | 4/2/2030 | | — | | | — | |
| | 100,086 | | (4) | 23,097 | | (4) | 10.99 | | | 9/24/2030 | | — | | | — | |
| | 149,477 | | (5) | 55,521 | | (5) | 47.25 | | | 1/6/2031 | | — | | | — | |
| | 67,403 | | (6) | 86,664 | | (6) | 19.59 | | | 3/8/2032 | | — | | | — | |
| | — | | | 100,242 | | (7) | 15.00 | | | 3/7/2033 | | — | | | — |
| | — | | | — | | | — | | | — | | | 33,898 | | (8) | 686,435 | |
| | — | | | — | | | — | | | — | | | 67,900 | | (9) | 1,374,975 | |
Seshadri Neervannan | | 183,741 | | (10) | — | | | 2.01 | | | 7/12/2030 | | — | | | — | |
| | 35,030 | | (4) | 8,084 | | (4) | 10.99 | | | 9/24/2030 | | — | | | — | |
| | 44,843 | | (5) | 16,656 | | (5) | 47.25 | | | 1/6/2031 | | — | | | — | |
| | 30,404 | | (6) | 39,094 | | (6) | 19.59 | | | 3/8/2032 | | — | | | — | |
| | — | | 48,116 | | (7) | 15.00 | | | 3/7/2033 | | — | | | — |
| | — | | — | | — | | — | | 15,291 | | (8) | 309,643 | |
| | — | | — | | — | | — | | 32,592 | | (9) | 659,988 | |
Jeffrey Farrow | | — | | | 163,397 | | (11) | 14.62 | | | 4/23/2033 | | — | | | — | |
| | — | | | — | | | — | | | — | | | 111,525 | | (12) | 2,258,381 | |
Leonard Greenstein | | 19,013 | | (13) | — | | | 19.59 | | | 6/15/2024 | | — | | | — |
| | 24,770 | | (14) | — | | | 47.25 | | | 6/15/2024 | | — | | | — |
_____________
(1)Market value is based on the fair market value of our Common Stock at the close of trading on December 29, 2023, the last trading day of fiscal year 2023, which was $20.25.
(2)Option vested in 48 equal monthly installments beginning on September 15, 2018 provided Dr. Azamian remained in continuous service through each such vesting date.
(3)Option vested in 48 equal monthly installments beginning on December 13, 2019 provided Dr. Azamian remains in continuous service through each such vesting date.
(4)Option vests in 48 equal monthly installments beginning on September 25, 2020 provided Dr. Azamian remains in continuous service through each such vesting date.
(5)Option vested as to 25% of the total number of option shares on January 7, 2022, and the remaining shares vest in equal monthly installments over the following 36 months, provided the named executive officer remains in continuous service through each such vesting date.
(6)Option vested as to 25% of the total number of option shares on March 8, 2023, and the remaining shares vest in equal monthly installments over the following 36 months, provided the named executive officer remains in continuous service through each such vesting date.
(7)Option vests as to 25% of the total number of option shares on March 8, 2024, and the remaining shares vest in equal monthly installments over the following 36 months, provided the named executive officer remains in continuous service through each such vesting date.
(8)The RSUs vest in four equal installments on each of March 15, 2023, March 15, 2024, March 15, 2025, and March 15, 2026, subject to the named executive officer's continuous service through each such vesting date.
(9)The RSUs vest in four equal installments on each of March 15, 2024, March 15, 2025, March 15, 2026, and March 15, 2027, subject to the named executive officer's continuous service through each such vesting date.
(10)The option is exercisable with respect to all of the option shares, subject to our repurchase right for the lower of the option exercise price or the fair market value of the shares in the event that the executive's service terminates before vesting in such shares. As of December 31, 2023, 149,652 shares subject to the option were vested. 4,866 of the option shares will vest each month beginning on January 6, 2024 and including June 6, 2024, subject to Dr. Neervannan's continuous service through such vesting date. The remaining 4,894 option shares will vest on July 6, 2024, subject to Dr. Neervannan's continuous service through such vesting date.
(11)Option vests as to 25% of the total number of option shares on April 24, 2024, and the remaining shares vest in equal monthly installments over the following 36 months, provided Mr. Farrow remains in continuous service through each such vesting date.
(12)The RSUs vest in four equal installments on each of June 15, 2024, June 15, 2025, June 15, 2026, and June 15, 2027 subject to the named executive officer's continuous service through each such vesting date.
(13)The option vested in full and became exercisable as of Mr. Greenstein's termination date on June 15, 2023. The option shares will remain exercisable until the one-year anniversary of Mr. Greenstein's separation date on June 15, 2024.
(14)The option vested in full and became exercisable as of Mr. Greenstein's termination date on June 15, 2023. The option shares will remain exercisable until the one-year anniversary of Mr. Greenstein's separation date on June 15, 2024.
SEVERANCE AND
CHANGE CHANGE IN CONTROL BENEFITS CONTROL BENEFITS
Pursuant to the Azamian Letter Agreement, Dr. Azamian
iswas eligible for severance benefits upon an involuntary termination of his employment. If the involuntary termination
iswas prior to or more than 12 months after a change in control, he
iswas eligible to receive severance consisting of 12 months of base salary and company-paid continued benefits coverage. If the involuntary termination
iswas in connection
with or
within 12 months after a change in control, he
iswas eligible to receive accelerated vesting of all of his then-unvested
option sharesequity awards and severance consisting of 18 months of base salary and company-paid continued benefits coverage, plus a lump sum bonus payment equal to (i) a prorated portion of his target bonus for the year in which his termination
occursoccurred and (ii) 150% of such target bonus.
In addition, Dr. Azamian is eligible to receive 100% vesting acceleration of his October 2018 option grant in the event we are subject to a change in control prior to his termination of service.Pursuant to the
GreensteinFarrow Offer Letter,
Mr. Greenstein isMr, Farrow was eligible to receive severance benefits upon an involuntary termination of his employment. If the involuntary termination
iswas prior to or more than 12 months after a change in control, he
iswas eligible to receive severance consisting of
sixtwelve months of base salary and company-paid continued benefits coverage. If the involuntary termination
iswas in connection with or within 12 months after a change in control, he
iswas eligible to receive accelerated vesting of all of his then-unvested option shares and
RSUs and severance consisting of
18nine months of base salary and
12 months of company-paid continued benefits coverage, plus a bonus payment equal to (i) a prorated portion of his target bonus for the year in which his termination
occursoccurred and (ii)
150%100% of such target bonus.
Pursuant to histhe Neervannan Offer Letter, Dr. Neervannan iswas eligible to receive severance benefits upon an involuntary termination of his employment. If the involuntary termination iswas prior to or more than 12 months after a change in control, he iswas eligible to receive severance consisting of nine months of base salary and company-paid continued benefits coverage. If the involuntary termination iswas in connection with or within 12 months after a change in control, he iswas eligible to receive accelerated vesting of all of his then-unvested option shares and severance consisting of 12nine months of base salary and 12 months of company-paid continued benefits coverage, plus a bonus payment equal to (i) a prorated portion of his target bonus for the year in which his termination occursoccurred and (ii) 100% of such target bonus.
DIRECTOR COMPENSATION
Prior
In September 2023, Dr. Azamian, Dr. Neervannan and Mr. Farrow each entered into an Executive Severance and Change in Control Agreement (each, an “Executive Severance Agreement”) with us, which supersedes each of their existing severance arrangements in their respective offer letters. Under the Executive Severance Agreement, upon a termination of the executive’s employment by us without cause or a resignation by the executive for good reason (each, a “Qualifying Termination”), the executive officer will be entitled to our initial public offering in October 2020, we did not have a policy with respectreceive the following benefits:
•A cash payment equal to compensation payable to our non-employee directors for service as directors; however, we adopted a non-employee director compensation policy(i) the sum of 12 months of the executive’s monthly base salary or (ii) in connection with a Qualifying Termination that is within three months prior to, or 12 months following, a change in control (“in connection with a change in control), the sum of 18 months of the executive’s monthly base salary for Dr. Azamian and 12 months for Dr. Neervannan and Mr. Farrow (each, a “Severance Term”);
•Company-paid COBRA premiums for continued health insurance until the earlier of (i) the close of the applicable Severance Term, (ii) the date the executive ceases to be eligible for COBRA continuation coverage, or (iii) the date when the executive becomes eligible for substantially equivalent health insurance coverage;
•If the Qualifying Termination is in connection with a change in control, a cash payment equal to the sum of (i) a pro-rated portion of the executive’s target bonus amount for the year of termination and (ii) 150% for Dr. Azamian or 100% for Dr. Neervannan and Mr. Farrow, of the executive’s target bonus amount for the year of termination; and
•If the Qualifying Termination is in connection with a change in control, accelerated vesting of all of the executive’s then-outstanding equity awards.
In order to receive the foregoing benefits, the executive must execute and not revoke a release of claims against us and continue to comply with certain restrictive covenants.
For purposes of the Executive Severance Agreements, “cause” means (i) the executive’s unauthorized use or disclosure of our initial public offering,confidential information or trade secrets, which use or disclosure causes material harm to us, (ii) the executive’s material breach of any agreement with us, (iii) the executive’s material failure to comply with our written policies or rules, (iv) the executive’s conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any State, (v) the executive’s gross negligence or willful misconduct, (vi) the executive’s continuing failure to perform assigned duties after receiving written notification of the failure from our Board of Directors or (vii) the executive’s failure to cooperate in good faith with a governmental or internal investigation of us or our directors, officers or employees, if we have requested such cooperation.
For purposes of the Executive Severance Agreements, a “resignation for good reason” means an executive’s separation as
further described below.a result of the executive’s resignation from employment after one of the following conditions has come into existence without the executive’s consent: (i) a material diminution of the executive’s annual base salary, (ii) a material diminution of the executive’s authority, duties or responsibilities, or (iii) a material change in the geographic location at which the executive must perform services for us; provided,
however, that in order to constitute a resignation for good reason, the executive must give us written notice of the condition within 90 days after it comes into existence, we must fail to remedy the condition within 30 days after receiving the executive’s written notice and the executive must terminate his employment within 12 months after the condition came into existence.
For purposes of the Executive Severance Agreements, a “change in control” includes: (i) any person acquiring beneficial ownership of more than 50% of our total voting power; (ii) the sale or other disposition of all or substantially all of our assets; (iii) our merger or consolidation after which our voting securities represent 50% or less of the total voting power of the surviving or acquiring entity; or (iv) individuals who are members of our Board of Directors cease for any reason to constitute at least a majority of the members of our Board of Directors over a period of 12 months.
In connection with Mr. Greenstein’s termination in June 2023, he entered into a separation and release agreement with us pursuant to which he received the following: (i) continued payment of his base salary for a period of nine months after his separation with us, (ii) a pro-rated portion of his 2023 annual target bonus based on actual company performance, (iii) company-paid COBRA coverage for up to ten months following his separation with us, and (iv) accelerated vesting of certain stock option grants he received in 2020, and an option exercise period extension for certain stock options.
DIRECTOR COMPENSATION
The following table sets forth the total compensation of each person who served as a director during the
20202023 fiscal year, other than a director who also served as a named executive officer.
| | | | | | | | | | | | |
Name | | Fees Earned or Paid in Cash ($) | | | Option Awards ($)(1)(2) | | | Total ($) | |
Michael Ackermann, Ph.D. | | | 20,750 | | | | 697,847 | | | $ | 718,597 | |
Bhaskar Chaudhuri, Ph.D. | | | 11,875 | | | | — | | | | 11,875 | |
Andrew Goldberg, M.D. | | | 12,250 | | | | — | | | | 12,250 | |
William J. Link, Ph.D. | | | 12,250 | | | | — | | | | 12,250 | |
Jason Tester | | | 13,750 | | | | — | | | | 13,750 | |
Wendy Yarno | | | 11,875 | | | | 291,880 | | | | 303,755 | |
(1) | The amounts in this column represent the aggregate grant date fair value of option awards granted to the non-employee director in 2020, computed in accordance with FASB ASC Topic 718. See Note 5 of the notes to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the SEC on March 31, 2021.
|
(2) | As of December 31, 2020, certain of our non-employee directors held the following options to purchase shares of our Common Stock: Dr. Ackermann – 276,719; Ms. Yarno – 20,000.
|
CASH COMPENSATION
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Name | | Fees Earned or Paid in Cash ($) | | Stock Awards ($)(1)(2) | | Option Awards ($)(1)(3) | | Total ($) |
Bhaskar Chaudhuri, Ph.D. | | 57,500 | | | 61,506 | | | 59,574 | | | 178,580 | |
Rosemary Crane, MBA | | 62,625 | | | 61,506 | | | 59,574 | | | 183,705 | |
Andrew Goldberg, M.D. | | 50,625 | | | 61,506 | | | 59,574 | | | 171,705 | |
William J. Link, Ph.D. | | 62,250 | | | 61,506 | | | 59,574 | | | 183,330 | |
Scott Morrison | | 65,375 | | | 61,506 | | | 59,574 | | | 186,455 | |
Wendy Yarno, MBA | | 144,750 | | | 61,506 | | | 59,574 | | | 265,830 | |
Elizabeth Yeu-Lin, M.D.(4) | | 59,125 | | | 61,506 | | | 59,574 | | | 180,205 | |
____________
(1)The amounts in these columns represent the aggregate grant date fair value of stock awards and option awards granted to the non-employee director in 2023, computed in accordance with FASB ASC Topic 718. See Note 6 of the notes to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC on February 27, 2024.
(2)As of December 31, 2023, our non-employee directors serving on our Board in 2023 held the following RSUs: Dr. Chaudhuri— 3,350; Ms. Crane— 3,350; Dr. Goldberg— 3,350; Dr. Link— 3,350; Mr. Morrison— 6,017; Ms. Yarno— 3,350; Dr. Yeu-Lin— 3,350.
(3)As of December 31, 2023, our non-employee directors serving on our Board in 2023 held the following options to purchase shares of our Common Stock: Dr. Chaudhuri—5,000; Ms. Crane—11,666; Dr. Goldberg—5,000; Dr. Link—5,000; Mr. Morrison—14,334; Ms. Yarno—5,000; Dr. Yeu-Lin—18,249.
(4)In addition to the cash compensation that Dr. Yeu received in 2023 in connection with her service as a non-employee director, Dr. Yeu received $240,000 in 2023 for her Chief Medical Advisor services.
CASH COMPENSATION
Pursuant to the compensation program for our
non-employee directors
that was adopted in connection with our initial public offering,as amended, each member of our Board of Directors who is not an employee
iswas eligible to receive the following annual cash retainers for their service on our
Board: | | | | |
Position | | Annual Retainer | |
Board Member | | $ | 40,000 | |
plus (as applicable): | | | | |
Board Chair | | $ | 25,000 | |
Audit Committee Chair | | $ | 15,000 | |
Compensation Committee Chair | | $ | 10,000 | |
Nominating/Governance Committee Chair | | $ | 8,000 | |
Audit Committee Member | | $ | 7,500 | |
Compensation Committee Member | | $ | 5,000 | |
Nominating/Governance Committee Member | | $ | 4,000 | |
Board. In March 2023, the compensation program for our non-employee directors was amended to provide for the following annual cash retainers during the 2023 fiscal year:
| | | | | | | | |
Position | | Annual Retainer |
Board Member | | $ | 40,000 | |
plus (as applicable): | | |
Lead Independent Director | | $ | 75,000 | |
Audit Committee Chair | | $ | 20,000 | |
Commercial Committee Chair | | $ | 15,000 | |
Compensation Committee Chair | | $ | 15,000 | |
Nominating/Governance Committee Chair | | $ | 10,000 | |
Science and Technology Chair | | $ | 14,000 | |
Audit Committee Member | | $ | 10,000 | |
Commercial Committee Member | | $ | 7,500 | |
Compensation Committee Member | | $ | 7,500 | |
Nominating/Governance Committee Member | | $ | 5,000 | |
Science and Technology Member | | $ | 6,500 | |
The non-employee members of our Board of Directors are also eligible for reimbursement of their reasonable expenses incurred in attending Board of Directors and committee meetings.
EQUITY-B
ASED COMPENSATION
EQUITY-BASED COMPENSATION
Pursuant to the compensation program for our
non-employee directors
that was adopted in connection with our
initial public offering, our non-employee directors
will receive both an initial equity award upon joining our Board of Directors and annual equity awards in connection with each annual meeting of our stockholders.
As
amended in March 2022, effective as of our 2022 Annual Meeting, the initial and annual equity awards to our non-employee directors consisted of the following:
•Initial Equity Award—Each non-employee director joining our Board of Directors will receivereceives (i) an option grant for 20,00014,000 shares of our Common Stock under our 2020 Equity Incentive Plan. Theand (ii) a grant of 4,000 RSUs. Both the option willgrant and RSUs vest in three equal annual installments on each anniversary of the date of grant, subject to the non-employee director’s continuous service.
•Annual Equity Award—Following the conclusion of each regular annual meeting of stockholders, commencing in 2021, each continuing non-employee director will receivereceives an option grant for 10,0007,000 shares of our Common Stock under our 2020 Equity Incentive Plan (and in the caseand (ii) a grant of a 2,000 RSUs (for non-employee director directors who wasare elected or appointed to our Board of Directors since the prior annual meeting of stockholders, the number of RSUs and shares subject to the option grant will beis prorated based on the number of full months of service provided since the prior annual meeting of stockholders). TheBoth the option willgrant and RSUs vest in full on the one-year anniversary of the date of grant, subject to the non-employee director’s continuous service. For
In March 2023, the compensation program for our non-employee directors serving on our Board of Directorswas further amended, effective as of our 2023 Annual Meeting. Following the completion of our IPO in October 2020 who continue to serve as a member of our Board at the conclusion of this2023 Annual Meeting, suchthe Initial Equity Award to our non-employee directors will receiveconsists of (i) an additional option grant for 10,000 shares of our Common Stock at the conclusion of this Annual Meeting, which will be fully vested as of the date of grant.
Following the conclusion of each regular annual meeting of stockholders commencing in 2021, each non-employee director who continues to serve as a member of our Board and as the Chair of our Board will receive(ii) a grant of 10,000 restricted stock units (“RSUs”) under6,700 RSUs, and the 2020Annual Equity Incentive Plan.Award consists of (i) an option grant for 5,000 shares of our Common Stock and (ii) a grant of 3,350 RSUs. The RSUsInitial Equity Awards and Annual Equity Awards will vest in full onotherwise retain the one-year anniversary of the date of grant, subjectsame terms and vesting schedules as prior to the non-employee director’s continuous service. For the non-employee director who was serving as the Chairamendment of our Boardcompensation program.