Anirvan Ghosh, Ph.D., Chief Executive Officer;
Lynne Sullivan, Chief Financial Officer and Head of Corporate Development; and
Jamie Dananberg, M.D., Chief Medical Officer
2021 Summary Compensation Table
The following table sets forth total compensation earned by our NEOs for the fiscal years presented.
Name and Principal Position | | Year | | Salary ($) | | | Bonus ($) | | | | Stock Awards ($)(1) | | | Option Awards ($)(1) | | | Non-Equity Incentive Plan Compensation ($)(2) | | | All Other Compensation ($) | | | | Total ($) | |
Anirvan Ghosh, Ph.D., | | 2021 | | | 562,376 | | | — | | | | | 1,515,519 | | | | 1,535,653 | | | | 284,562 | | | | 38,600 | | (5) | | | 3,936,710 | |
Chief Executive Officer(3) | | 2020 | | | 416,737 | | | | 75,000 | | (4) | | | 2,482,500 | | | | 4,158,025 | | | | 213,263 | | | | 53,571 | | (6) | | | 7,399,096 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Lynne Sullivan, | | 2021 | | | 440,000 | | | — | | | | | 128,882 | | | | 373,169 | | | | 163,240 | | | | 11,600 | | (8) | | | 1,116,891 | |
Chief Financial Officer and Head of Corporate Development(7) | | 2020 | | | 166,667 | | | — | | | | | 705,600 | | | | 1,912,392 | | | | 66,696 | | | | 4,667 | | (8) | | | 2,856,022 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Jamie Dananberg, M.D., | | 2021 | | | 455,281 | | | | | | | | | 104,500 | | | | 302,570 | | | | 168,909 | | | | 11,600 | | (8) | | | 1,042,860 | |
Chief Medical Officer | | 2020 | | | 442,020 | | | | | | | | | 849,917 | | | | 438,054 | | | | 172,167 | | | | 11,400 | | (8) | | | 1,913,558 | |
(1)
| Amounts reflect the full grant date fair value of stock and option awards computed in accordance with ASC Topic 718. The grant date fair value of the performance stock units granted to Mr. Ghosh in 2020 are calculated based on a Monte Carlo simulation, which is not subject to probable or maximum outcome assumptions. See Note 12 of the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for the assumptions used in calculating these amounts. These amounts do not correspond to the actual value that may be recognized by the NEOs upon vesting of the applicable awards.
|
(2)
| Amounts represent the annual performance-based cash incentive earned by our NEOs based on the achievement of certain corporate performance objectives and individual performance during 2021. These amounts were paid to the NEOs in early 2022. Please see the descriptions of the annual performance incentive payments paid to our NEOs under “2021 Incentive Compensation” below.
|
(3)
| Dr. Ghosh was appointed our Chief Executive Officer effective March 30, 2020.
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(4)
| Amount represents the signing bonus paid to Dr. Ghosh in connection with his commencement of employment.
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(5)
| Amount represents $27,000 for Dr. Ghosh’s housing allowance and $11,600 in Company matching contributions under our 401(k) plan.
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(6)
| Amount represents $27,000 for Dr. Ghosh’s housing allowance, $15,171 in reimbursement of relocation expenses and $11,400 in Company matching contributions under our 401(k) plan.
|
(7)
| Ms. Sullivan was appointed our interim Chief Financial Officer effective August 1, 2020, our Chief Financial Officer effective September 1, 2020, and our Head of Corporate Development effective January 29, 2021.
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(8)
| Amount represents Company matching contributions under our 401(k) plan.
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Outstanding Equity Awards at 2021 Fiscal Year End
The following table lists all outstanding equity awards held by our NEOs as of December 31, 2021.
| | | | Option Awards | | Stock Awards | |
Name | | Vesting Commencement Date | | Number of Securities Underlying Unexercised Options Exercisable (#) | | | Number of Securities Underlying Unexercised Options Unexercisable (#) | | | Option Exercise Price ($) | | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | |
Anirvan Ghosh, Ph.D. | | 3/30/2020(2) | | | 350,000 | | | | 450,000 | | | | 5.95 | | | 3/29/2030 | | | | | | | | | | | | | | | | |
| | 3/30/2020(3) | | | | | | | | | | | | | | | | | 40,000 | | | | 58,400 | | | | | | | | | |
| | 3/30/2020(4) | | | | | | | | | | | | | | | | | | | | | | | | | 150,000 | | | | 219,000 | |
| | 9/13/2020(2) | | | 78,125 | | | | 171,875 | | | | 2.94 | | | 9/12/2030 | | | | | | | | | | | | | | | | |
| | 9/13/2020(5) | | | | | | | | | | | | | | | | | 175,001 | | | | 255,501 | | | | | | | | | |
| | 1 /29/2021(2) | | | | | | | 150,000 | | | | 5.98 | | | 1/28/2031 | | | | | | | | | | | | | | | | |
| | 1/29/2021(5) | | | | | | | | | | | | | | | | | 250,000 | | | | 365,000 | | | | | | | | | |
| | 6/24/2021(6) | | | 36,250 | | | | 253,750 | | | | 4.18 | | | 6/23/2031 | | | | | | | | | | | | | | | | |
| | 6/24/2021(3) | | | | | | | | | | | | | | | | | 72,000 | | | | 105,120 | | | | | | | | | |
Lynne Sullivan | | 8/1/2020(2)(9) | | | 80,000 | | | | 160,000 | | | 9.96 | | | 7/31/2030 | | | | | | | | | | | | | | | | |
| | 9/13/2020(5) | | | | | | | | | | | | | | | | | 140,000 | | | | 204,400 | | | | | | | | | |
| | 6/24/2021(6) | | | 15,416 | | | | 107,917 | | | 4.18 | | | 6/23/2031 | | | | | | | | | | | | | | | | |
| | 6/24/2021(3) | | | | | | | | | | | | | | | | | 30,833 | | | | 45,016 | | | | | | | | | |
Jamie Dananberg, M.D. | | 1/10/2016(7) | | | | | | | | | | | | | | | | | | | | | | | | | 33,370 | | | | 48,720 | |
| | 5/2/2018(2) | | | 27,330 | | | | 3,178 | | | | 17.00 | | | 5/1/2028 | | | | | | | | | | | | | | | | |
| | 6/20/2019(8) | | | 66,750 | | | | 40,050 | | | | 9.00 | | | 6/19/2029 | | | | | | | | | | | | | | | | |
| | 6/20/2019(3) | | | | | | | | | | | | | | | | | 7,025 | | | | 10,257 | | | | | | | | | |
| | 3/30/2020(8) | | | 43,089 | | | | 55,401 | | | | 5.95 | | | 3/29/2030 | | | | | | | | | | | | | | | | |
| | 3/30/2020(3) | | | | | | | | | | | | | | | | | 16,170 | | | | 23,608 | | | | | | | | | |
| | 9/13/2020(5) | | | | | | | | | | | | | | | | | 140,000 | | | | 204,400 | | | | | | | | | |
| | 6/24/2021(6) | | | 12,500 | | | | 87,500 | | | | 4.18 | | | 6/23/2031 | | | | | | | | | | | | | | | | |
| | 6/24/2021(3) | | | | | | | | | | | | | | | | | 25,000 | | | | 36,500 | | | | | | | | | |
(1)
| Based on closing price of our common stock on December 31, 2021 ($1.46 per share).
|
(2)
| Vests as to 25% of the shares subject to the option on the first anniversary of the vesting commencement date, and as to 1/48th of the shares subject to the option on each monthly anniversary thereafter, subject to continued service on each applicable vesting date.
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(3)
| Represents RSUs that vest as to one-third on each anniversary of the vesting commencement date, subject to continued service on each applicable vesting date.
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(4)
| Under the original terms of the award, which were in effect as of December 31, 2020, the award would vest as to 50,000 PSUs upon the attainment of (i) a volume-weighted average per share trading price of the Company’s common stock of at least $36.875 for a trailing 30-day period or (ii) a change in control transaction in which the price per share to the holders of the Company’s common stock is at least $36.875. The remaining PSUs would vest (i) at such time as the Company’s market capitalization reaches at least $2.5 billion, as measured by a trailing 30 day volume weighted average price or (ii) a change in control transaction in which the consideration paid to the Company’s stockholders is equal to at least $2.5 billion, as determined by the Board. In January 2021, the award was modified to provide that (i) 50,000 and 100,000 PSUs will vest upon the attainment of a volume-weighted average per share trading price of the Company’s common stock of at least $18 and $36, respectively, for a trailing 30-day period or (ii) a change in control transaction in which the price per share to the holders of the Company’s common stock is at least $18 and $36, respectively.
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(5)
| Represents RSUs that vest as to one-third on the first anniversary of the vesting commencement date, and as to 1/8th of the remaining shares subject to the award vesting on each quarterly anniversary thereafter, subject to continued service on each applicable vesting date.
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(6)
| Vests as to 1/48th of the shares subject to the option on each monthly anniversary of the vesting commencement date, subject to continued service on each applicable vesting date.
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(7)
| Restricted stock acquired upon exercise of an option prior to vesting that are subject to repurchase by us for $0.295 per share upon any termination of service. The repurchase rights lapse upon certain private financings or an initial public offering of our common stock at a value in excess of $1 billion, neither of which occurred, or a change in control that resulted in net proceeds to our stockholders of at least $1 billion.
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(8)
| Vests as to 1/48th of the shares subject to the option on each monthly anniversary of the vesting commencement date, subject to continued service on each applicable vesting date.
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(9)
| In the event of a change in control or Ms. Sullivan’s removal as the Company’s Chief Financial Officer by the Company other than for cause, in each case, prior to the first anniversary of her employment commencement date, the option would vest as to 25% of the total number of shares and the remaining shares subject to the option would vest in accordance with the original vesting schedule, subject to her continued service.
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Narrative to 2021 Summary Compensation Table and Outstanding Equity Awards at 2021 Fiscal Year End
Executive Compensation Philosophy & Compensation Mix
We believe our executive compensation program is closely aligned with stockholders’ interests. While base salary and an annual performance-based cash incentive opportunity incentivize the achievement of shorter-term goals, our long-term equity awards represent a longer-term compensation structure that promotes retention and continuous commitment to the operating results of the Company. We further believe this compensation mix rewards each executive, including the NEOs, for their individual contributions to the Company, both present and future.
At this phase in our growth cycle, a majority of the total direct compensation of our NEOs is directly tied, through the use of equity awards, to the growth in the value of our common stock.
Executive Compensation Process
The Compensation Committee oversees our executive compensation program (including our executive compensation policies and practices), administers our various equity plans and approves or makes recommendations regarding the compensation of our executive officers, including our NEOs, to the Board. The Compensation Committee reviews the performance of each NEO to determine whether to make any changes to their compensation. The Compensation Committee approves such changes or presents its recommendations to our Board for review and final approval.
Our Chief Executive Officer makes recommendations to the Compensation Committee regarding the salary, annual cash incentive award, and equity awards for the executive officers other than himself, including the other NEOs. At the Compensation Committee’s request, our Chief Executive Officer reviews with the Compensation Committee the individual performance of each of the other executive officers, including each of our other NEOs. The Compensation Committee gives considerable weight to our Chief Executive Officer’s evaluations and determines whether the recommended changes in each executive officer’s compensation, if any, are appropriate.
The Compensation Committee receives support from our Human Resources Department in designing our executive compensation program and analyzing competitive market practices. In addition, our Chief Executive Officer participates in Compensation Committee meetings (other than when his own compensation is being discussed), providing input from our executive team on organizational structure, executive development, and financial analysis.
While the Compensation Committee does not establish compensation levels based solely on a review of competitive market data, it believes that such data is a useful tool in its deliberations as it recognizes that our compensation policies and practices must be competitive in the marketplace for us to be able to attract, motivate, and retain qualified executive officers. Generally, the Compensation Committee reviews our executive compensation relative to our established competitive market (based on an analysis of the compensation policies and practices of a select group of peer companies) every year. The Compensation Committee uses the competitive market data when evaluating all aspects of executive compensation. The Compensation Committee engages AON Radford to assist with updating our compensation peer group and assessing the competitiveness of our executive compensation program.
2021 Salaries
We use base salary to compensate our NEOs for their experience, skills, knowledge, role, and responsibilities. When establishing the base salaries of our NEOs, our Board of Directors and the Compensation Committee consider a variety of factors, including each NEO’s seniority and level of responsibility as well as competitive market data and our ability to find a replacement if the
individual left our employment. The base salary of each NEO is initially set upon the NEO’s commencement of employment with us and reviewed annually and adjusted from time to time to reflect performance and realign with market data.
In January 2021, upon recommendation of the Compensation Committee, the Board approved increasing Dr. Dananberg’s annual base salary from $442,020 to $455,281 and Ms. Sullivan’s annual base salary from $400,000 to $440,000. The Board also approved increasing Dr. Ghosh’s annual base salary from $550,000 to $562,375.
2021 Incentive Compensation
We use cash incentive compensation to motivate our NEOs to achieve our annual operational objectives, while making progress towards our longer-term growth and other corporate goals. At the beginning of each year, typically in January, the Board approves a set of technical, operational, and financial goals for the Company for that year which are key drivers in determining the eventual cash incentive compensation for that year. The Compensation Committee recommends annual cash incentive compensation targets for our NEOs to our Board for its consideration and approval. Each NEO’s target cash incentive is expressed as a percentage of base salary which can be achieved by meeting corporate goals at target level and, in the case of Ms. Sullivan and Dr. Dananberg, individual performance. The 2021 annual cash incentive targets for Dr. Ghosh, Ms. Sullivan and Dr. Dananberg were set at 55%, 40%, and 40% of their respective base salaries.
For 2021, our NEOs were eligible to earn annual cash incentives based on the achievement of certain corporate performance objectives approved by the Compensation Committee and the Board, as well as individual performance objectives for Ms. Sullivan and Dr. Dananberg. For 2021, the Board set corporate performance goals in the three broad strategic areas of: (i) advancing ophthalmology and neurology programs, (ii) financing and partnering, and (iii) company building. Each area included specific performance objectives and a corresponding weighting. For each strategic area, the Board also approved certain “stretch” goals with corresponding weightings, such that the corporate goals could be achieved at up to 150% of target. In the case of Ms. Sullivan and Dr. Dananberg, 75% of the cash incentive was determined by the Company’s performance and 25% was determined by individual performance. The entirety of Dr. Ghosh’s annual cash incentive was determined by the Company’s performance. In January 2022, the Board reviewed and approved the achievement of our 2021 corporate goals at 92%. Based on this level of achievement and adjustments for individual 2021 performance for Ms. Sullivan and Dr. Dananberg, which were determined by the Board following the recommendation of Dr. Ghosh, our NEOs were paid the amounts set forth above in the Summary Compensation Table in the column titled “Non-Equity Incentive Plan Compensation.”
Equity Compensation
We use equity awards to motivate and reward our executive officers for long-term corporate performance based on the value of the Company’s common stock and, thereby, align the interests of our executive officers with those of our shareholders. We believe equity provides appropriate long-term incentive and retention of our executive officers.
Dr. Ghosh, Ms. Sullivan, and Dr. Dananberg
In 2021, we made annual grants of equity awards to our executive officers, including Dr. Dananberg, Dr. Ghosh, and Ms. Sullivan, and a follow-on new-hire grant of equity awards to Dr. Ghosh.
The table below sets forth the grants of equity awards made to Dr. Ghosh, Ms. Sullivan, and Dr. Dananberg in 2021.
NEO | | Type | | Grant Date | | Number of Shares Underlying Options | | | Restricted Stock Units | | | Stock Award | | Performance Stock Units |
Anirvan Ghosh, Ph.D. | | New Hire | | 1/29/2021 | | | 150,000 | | | | 250,000 | | | — | | — |
| | Annual | | 6/24/2021 | | | 290,000 | | | | 72,000 | | | — | | — |
| | | | | | | | | | | | | | | | |
Lynne Sullivan | | Annual | | 6/24/2021 | | | 123,333 | | | | 30,833 | | | — | | — |
| | | | | | | | | | | | | | | | |
Jamie Dananberg, M.D. | | Annual | | 6/24/2021 | | | 100,000 | | | | 25,000 | | | — | | — |
| | | | | | | | | | | | | | | | |
The annual options granted to Dr. Dananberg, Dr. Ghosh, Mr. Nguyen, and Ms. Sullivan vest as to 1/48th of the shares on each monthly anniversary of the grant date, and the annual restricted stock units granted to Dr. Dananberg, Dr. Ghosh, and Ms. Sullivan vest
one-third on each of the first three anniversaries of the grant date, in each case, subject to continued service on each applicable vesting date.
The follow-on new hire options granted to Dr. Ghosh vest as to 25% of the shares on the first anniversary of the grant date and as to 1/48th of the shares on each monthly anniversary thereafter, subject to continued service on each applicable vesting date. The follow-on new hire restricted stock units granted to Dr. Ghosh vest one-third on the first anniversary of the grant date and as to the remaining RSUs in substantially equal quarterly installments over the next two years, subject to continued service on each applicable vesting date. However, in the event of a change in control, the follow-on new hire awards for Dr. Ghosh would vest as to 50% of the then-unvested shares, with the remaining portion to vest in substantially equal installments on each of the first twelve month anniversaries of the closing date of the Change in Control, subject to his continued service as described in his Employment Agreement.
The retention RSUs granted to each NEO vest as to one-third on the first anniversary of the grant date and as to the remaining RSUs in substantially equal quarterly installments over the next two years, subject to continued service on each applicable vesting date.
Other Elements of Compensation
Retirement Plan
We maintain a 401(k) retirement savings plan for our employees, including our NEOs, who satisfy certain eligibility requirements. Our NEOs are eligible to participate in the 401(k) plan on the same terms as other full-time employees. We make matching safe-harbor contributions made by participants in the 401(k) plan at 100% of the first 4% of each participant’s contributions. We believe that providing a vehicle for tax-deferred retirement savings though our 401(k) plan adds to the overall desirability of our executive compensation package and further incentivizes our employees, including our NEOs, in accordance with our compensation policies.
Perquisites, Reimbursements and Other Benefits
Pursuant to Dr. Ghosh’s employment agreement, we provided to Dr. Ghosh reimbursement of up to $50,000 in relocation expenses, reimbursement of taxes incurred by him with respect to the foregoing, and a temporary housing allowance of $3,000 per month for his first year of employment and $2,000 per month for his second year of employment.
We believe these benefits are reasonable and are intended to facilitate the applicable NEO’s relocation and/or accessibility to the business as required. Other than the benefits described above, we do not provide perquisites or other personal benefits to our NEOs.
Executive Compensation Arrangements
During 2021, we were party to employment agreements with each of our NEOs, which provide for base salaries, target cash incentives, benefit plan participation, as well as certain additional benefits, as described below.
Anirvan Ghosh, Ph.D.
We entered into an employment agreement with Dr. Ghosh in connection with his appointment as our Chief Executive Officer in March 2020, which sets forth his initial base salary, target bonus and new hire equity awards as described in the narrative above. In addition, pursuant to the employment agreement, Dr. Ghosh also received a sign-on bonus of $75,000, which was subject to repayment in the event of his termination for cause (as defined in the employment agreement) or resignation for any reason. Dr. Ghosh was also eligible to receive reimbursement of up to $50,000 in relocation expenses, reimbursement of taxes incurred by him with respect to the foregoing and a temporary housing allowance of $3,000 per month for his first year of employment and $2,000 per month for his second year of employment.
Under Dr. Ghosh’s employment agreement, in the event Dr. Ghosh is terminated without cause or resigns for good reason (as defined in the employment agreement), outside of a period of time that begins three months prior to and ends 18 months following a change in control, then Dr. Ghosh will be entitled to receive: (i) continued base salary for 12 months following the date of termination; and (ii) payment or reimbursement of continued healthcare coverage for up to 12 months following the date of termination, in each case, subject to his timely execution and delivery of a release of claims against the Company. In the event Dr. Ghosh is terminated without cause or resigns for good reason, during a period of time that begins three months prior to and ends 18 months following a change in control, Dr. Ghosh will be eligible to receive: (i) a lump sum severance payment equal to 1.5 times the sum of his base salary and target annual incentive payment; (ii) payment or reimbursement of continued healthcare coverage for up to 18 months following the date of termination; and (iii) the full accelerated vesting of his outstanding equity awards, in each case, subject to his timely execution and delivery of a release of claims against the Company.
In addition, in the event of a change in control, each of Dr. Ghosh’s equity awards will vest as to 50% of the then-unvested shares underlying the equity award and the remaining shares underlying the equity award will vest in substantially equal monthly installments over the 12 months immediately following the change in control, subject to Dr. Ghosh’s continued service to the Company or its successor through the applicable vesting date and subject to accelerated vesting as described above.
The employment agreement with Dr. Ghosh includes a “best pay” provision, pursuant to which, in the event any payment or benefit Dr. Ghosh would receive pursuant to the agreement or otherwise would be subject to an excise tax under Section 4999 of the Code, Dr. Ghosh would receive the greater of (i) the full amount of such payments and benefits or (ii) a reduced amount such that no portion is subject to an excise tax under Section 4999 of the Code, whichever is more favorable to Dr. Ghosh on an after-tax basis.
Lynne Sullivan
We entered into an employment agreement with Ms. Sullivan in connection with her appointment as our interim Chief Financial Officer in August 2020, which sets forth her initial base salary, target bonus and new hire equity awards as described in the narrative above. Ms. Sullivan’s employment agreement was amended and restated in September 2020 to provide for the severance payments and benefits described below. On January 29, 2021, the Board appointed Ms. Sullivan as the Head of Corporate Development.
Under Ms. Sullivan’s amended and restated employment agreement, in the event Ms. Sullivan is terminated without cause or resigns for good reason (as defined in the employment agreement), outside of a period of time that begins three months prior to and ends 18 months following a change in control, then Ms. Sullivan will be entitled to receive: (i) continued base salary for nine months following the date of termination; and (ii) payment or reimbursement of continued healthcare coverage for up to nine months following the date of termination, in each case, subject to her timely execution and delivery of a release of claims against the Company. In the event Ms. Sullivan is terminated without cause or resigns for good reason, during a period of time that begins three months prior to and ends 18 months following a change in control, Ms. Sullivan will be eligible to receive: (i) a lump sum severance payment equal to the sum of her base salary and target annual incentive payment; (ii) payment or reimbursement of continued healthcare coverage for up to 12 months following the date of termination; and (iii) the full accelerated vesting of his outstanding equity awards, in each case, subject to her timely execution and delivery of a release of claims against the Company.
The amended and restated employment agreement with Ms. Sullivan includes a “best pay” provision, pursuant to which, in the event any payment or benefit Ms. Sullivan would receive pursuant to the agreement or otherwise would be subject to an excise tax under Section 4999 of the Code, Ms. Sullivan would receive the greater of (i) the full amount of such payments and benefits or (ii) a reduced amount such that no portion is subject to an excise tax under Section 4999 of the Code, whichever is more favorable to Ms. Sullivan on an after-tax basis.
Jamie Dananberg, M.D.
Pursuant to the employment agreement in effect as of the beginning of 2020 with Dr. Dananberg, in the event of a change in control of the Company, the Dr. Dananberg’s equity awards (including any performance awards to the extent then-unvested based on the change in control price) will vest as to 50% of the then-unvested shares subject thereto, and the remaining unvested shares will convert to a time-based equity award which will vest in substantially equal installments on each of the first twelve monthly anniversaries of the change in control, subject to Dr. Dananberg’s continued service through the applicable vesting date. In addition, in the event of a termination without “cause” or resignation for “good reason” (each, as defined in the employment agreements), in either case, that occurs within the period beginning three months prior to and ending 18 months following a change in control, subject to his execution and delivery of a release of claims against the Company, Dr. Dananberg would be eligible to receive: (i) an amount equal to 0.75 times the sum of the executive’s annual base salary and target incentive payment, payable in a lump sum; (ii) payment or reimbursement of continued healthcare coverage for up to nine months following the date of termination; and (iii) full acceleration of his equity awards.
The employment agreement includes a “best pay” provision, pursuant to which, in the event any payment or benefit Dr. Dananberg would receive pursuant to the agreement or otherwise would be subject to an excise tax under Section 4999 of the Code, Dr. Dananberg will receive the greater of (i) the full amount of such payments and benefits or (ii) a reduced amount such that no portion is subject to an excise tax under Section 4999 of the Code, whichever is more favorable to Dr. Dananberg on an after-tax basis.
In March 2020, Dr. Dananberg’s employment agreement was amended to provide for the same severance benefits as described above for Ms. Sullivan. Dr. Dananberg remains eligible to receive the same vesting acceleration benefits described above under his amended employment agreement.
Compensation Risk Assessment
Consistent with the SEC’s disclosure requirements, we have assessed our compensation programs for all employees. We have concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on us. Management has evaluated our executive and employee compensation and benefits programs to determine if these programs’ provisions and operations create undesired or unintentional risk of a material nature. The risk assessment process includes a review of program policies and practices; analysis to identify risks and risk controls related to our compensation programs; and determinations as to the sufficiency of risk identification, the balance of potential risk to potential reward, the effectiveness of our risk controls and the impacts of our compensation programs and their risks to our strategy. Although we periodically review all compensation programs, we focus on the programs with variability of payout, with the ability of a participant to directly affect payout and the controls on participant action and payout. In relation to this, we believe that our incentive compensation arrangements provide incentives that do not encourage risk taking beyond our ability to effectively identify and manage significant risks and are compatible with effective internal controls and our risk management practices.
The Compensation Committee monitors our compensation programs on an annual basis and expects to make modifications as necessary to address any changes in our business or risk profile.
Equity Compensation Plan Information
The following table provides certain information as of December 31, 2021, with respect to all of our equity compensation plans in effect on that date.
Plan Category | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a)(1) | | | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights(2) | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | | |
Equity Compensation Plans Approved by Stockholders(3)(4)(5) | | | 8,242,492 | | | $ | 6.18 | | | | 6,845,264 | | (6) |
Equity Compensation Plans Not Approved by Stockholders(7) | | | 2,415,400 | | | $ | 5.95 | | | | 114,600 | | (8) |
Total | | | 10,657,892 | | | $ | 6.05 | | | | 6,959,264 | | |
(1)
| Amounts include (i) 6,511,555 shares subject to outstanding options and 1,730,937 outstanding RSUs granted under the 2018 Incentive Award Plan (the “2018 Plan”) and the 2013 Equity Incentive Plan (the “2013 Plan”), (ii) 2,155,400 shares subject to outstanding options, 110,000 outstanding RSUs, and 150,000 outstanding PSUs granted under the 2020 Employment Inducement Incentive Plan (the “2020 Plan”), and (iii) no shares subject to options granted outside of the 2020 Plan, the 2018 Plan, and the 2013 Plan.
|
(2)
| The weighted-average exercise price is calculated based solely on the exercise prices of the outstanding options and does not reflect shares that will be issued upon the vesting of outstanding RSUs, which have no price.
|
(3)
| Includes the 2018 Plan, the 2013 Plan, and the 2018 Employee Stock Purchase Plan (the “2018 ESPP”).
|
(4)
| The 2018 Plan contains an “evergreen” provision, pursuant to which the number of shares of common stock reserved for issuance or transfer pursuant to awards under the 2018 Plan shall be increased on the first day of each year beginning in 2019 and ending in 2028, equal to the lesser of (i) five percent (5.0%) of the shares of common stock outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year, and (ii) such smaller number of shares of stock as determined by our Board; provided, however, that no more than 60,000,000 shares of stock may be issued upon the exercise of incentive stock options.
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(5)
| The 2018 ESPP contains an “evergreen” provision, pursuant to which the maximum number of shares of our common stock authorized for sale under the 2018 ESPP shall be increased on the first day of each year beginning in 2019 and ending in 2028, equal to the lesser of (i) one percent (1.0%) of the shares of common stock outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year, and (ii) such number of shares of common stock as determined by our Board; provided, however, no more than 8,000,000 shares of our common stock may be issued thereunder.
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(6)
| Includes 1,646,413 shares that were available for future issuance as of December 31, 2021 under the 2018 ESPP (all of which were subject to purchase under the offering period in effect as of December 31, 2021, which offering period will end on May 15, 2022).
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(7)
| Consists of (i) 2,155,400 shares subject to options granted, 110,000 outstanding RSUs, and 150,000 outstanding PSUs granted under the 2020 Plan and (ii) no shares subject to options granted outside of the 2020 Plan, 2018 Plan and the 2013 Plan.
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(8)
| Consists of shares remaining available for issuance under the 2020 Plan.
|
Material Features of the 2020 Plan
In March 2020, our board of directors adopted our 2020 Plan. Awards granted under the 2020 Plan are intended to constitute “employment inducement awards” under Nasdaq Listing Rule 5635(c)(4) and therefore, the 2020 Plan is intended to be exempt from the Nasdaq Listing Rules regarding stockholder approval of stock option and stock purchase plans. A total of 2,600,000 shares of our common stock are authorized for issuance under the 2020 Plan. The 2020 Plan provides for the grant of non‑qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance bonus awards, performance stock units, dividend equivalents or other stock‑based and cash‑based awards. These awards may be granted to individuals who are new employees or are commencing employment with us or one of our subsidiaries following a bona fide period of non‑employment with us, and for whom such awards are granted as a material inducement to commencing employment with us or one of our subsidiaries.
The 2020 Plan is administered by the Board or the compensation committee. In the event of a change in control in which the successor corporation refuses to assume or substitute any outstanding award under the 2020 Plan, the awards will vest in full. The Board may amend, suspend or terminate the 2020 Plan at any time, provided that no amendment requiring stockholder approval to comply with applicable law will be effective unless approved by the Board and no amendment may materially and adversely affect any outstanding award without the consent of the holder.
INFORMATION ABOUT STOCK OWNERSHIP
Security Ownership of Certain Beneficial Owners and Management
The following table presents information as to the beneficial ownership of our common stock as of April 26, 2022 for:
each person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock;
each named executive officer as set forth in the summary compensation table above;
each of our directors; and
all executive officers and directors as a group.
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Unless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable. Shares of our common stock subject to options that are currently exercisable or exercisable within 60 days of April 26, 2022 are deemed to be outstanding and to be beneficially owned by the person holding the stock options for the purpose of computing the percentage ownership of that person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
Percentage ownership of our common stock in the table is based on 69,148,106 shares of our common stock issued and outstanding on April 26, 2022. This table is based upon information supplied by officers, directors, and principal stockholders and Schedules 13D and Schedules 13G, if any, filed with the SEC. Unless otherwise indicated, the address of each of the individuals and entities named below is c/o Unity Biotechnology, Inc., 285 East Grand Ave., South San Francisco, CA 94080.
| | Shares of Common Stock Beneficially Owned | |
Name of Beneficial Owner | | Common Stock | | | Number of Shares Exercisable Within 60 Days | | | Number of Shares Beneficially Owned | | | Percentage of Shares Beneficially Owned | |
5% and Greater Stockholders: | | | | | | | | | | | | | | | | |
Entities Associated with ARCH Venture Partners(1) | | | 10,048,181 | | | — | | | | 10,048,181 | | | | 14.5 | % |
Entities Associated with FMR, LLC(2) | | | 3,106,530 | | | — | | | | 3,106,530 | | | | 4.5 | % |
Entities Associated with Venrock(3) | | | 2,680,039 | | | — | | | | 2,680,039 | | | | 3.9 | % |
Named Executive Officers and Directors: | | | | | | | | | | | | | | | | |
Keith R. Leonard Jr.(4) | | | 215,422 | | | | 1,422,433 | | | | 1,637,855 | | | | 2.4 | % |
Anirvan Ghosh, Ph.D.(5) | | | 319,588 | | | | 735,041 | | | | 1,054,629 | | | | 1.5 | % |
Nathaniel E. David, Ph.D.(6) | | | 589,398 | | | | 35,529 | | | | 624,927 | | | * | |
Lynne Sullivan(7) | | | 120,000 | | | | 171,110 | | | | 291,110 | | | * | |
Jamie Dananberg, M.D.(8) | | | 484,818 | | | | 224,314 | | | | 709,132 | | | * | |
Paul L. Berns(9) | | | 3,261 | | | | 159,745 | | | | 163,006 | | | * | |
Graham K. Cooper(10) | | | 84,745 | | | | 85,169 | | | | 169,914 | | | * | |
Gilmore O’Neill, M.B.(11) | | — | | | | 68,425 | | | | 68,425 | | | * | |
Margo R. Roberts, Ph.D.(12) | | — | | | | 125,661 | | | | 125,661 | | | * | |
Camille D. Samuels(13) | | | 10,169 | | | | 115,678 | | | | 125,847 | | | * | |
Alexander Nguyen (14) | | — | | | | 83,333 | | | | 83,333 | | | * | |
All directors and executive officers as a group (11 persons)(15) | | | 1,827,401 | | | | 3,226,438 | | | | 5,053,839 | | | | 7.3 | % |
*
| Indicates beneficial ownership of less than 1% of the total outstanding common stock.
|
(1)
| As reported on a Schedule 13G/A filed with the SEC on February 11, 2022. Consists of (i) 8,365,764 shares of common stock held by ARCH Venture Fund VII, L.P. (“ARCH VII”), and (ii) 1,682,417 shares of common stock held by ARCH Venture Fund VIII Overage, L.P. (“ARCH VIII Overage”). ARCH Venture Partners VII, L.P. (“AVP VII LP”), as the sole general partner of ARCH VII, may be deemed to beneficially own certain of the shares held by ARCH VII. AVP VII LP disclaims beneficial ownership of all shares held by ARCH VII in which AVP VII LP does not have an actual pecuniary interest. ARCH Venture Partners VII, LLC (“AVP VII LLC”), as the sole general partner of AVP VII LP, may be deemed to beneficially own the shares held by ARCH VII. AVP VII LLC disclaims beneficial ownership of all shares held by ARCH VII in which AVP VII LLC does not have an actual pecuniary interest. ARCH Venture Partners VIII, LLC (“AVP VIII LLC”), as the sole general partner of ARCH VIII Overage, may be deemed to beneficially own the shares held by ARCH VIII Overage. AVP VIII LLC disclaims
|
| beneficial ownership of all shares held by ARCH VIII Overage in which AVP VIII LLC does not have an actual pecuniary interest. As managing directors of AVP VII LP and AVP VIII LLC, each of Keith Crandell, Clinton Bybee, and Robert T. Nelsen (the “ARCH Managing Directors”) may be deemed to share the power to direct the disposition and vote of, and therefore to beneficially own, the shares held by ARCH VII and ARCH VIII Overage. The ARCH Managing Directors disclaim beneficial ownership of all shares held by ARCH VII and ARCH VIII Overage except to the extent of any actual pecuniary interest. The address of ARCH VII, ARCH Overage VIII, AVP VII LP, AVP VII LLC, AVP VIII LLC, and the ARCH Managing Directors is 8755 West Higgins Avenue, Suite 1025, Chicago, Illinois 60631.
|
(2)
| As reported on a Schedule 13G/A filed with the SEC on February 9, 2022. Abigail P. Johnson is a Director, the Chairman and the Chief Executive Officer of FMR LLC. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act (“Fidelity Funds”) advised by Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ Boards of Trustees. Fidelity Management & Research Company carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees. FMR LLC and Abigail P. Johnson may be deemed to have beneficial ownership of 3,106,530 shares of common stock. Fidelity Growth Company Fund may be deemed to have beneficial ownership of 1,584,330 shares of common stock. The address of FMR LLC is 245 Summer Street, Boston, Massachusetts 02210.
|
(3)
| As reported on a Schedule 13G/A filed with the SEC on February 14, 2022. Consists of (i) 2,474,163 shares of common stock held by Venrock Associates VII, L.P. (“Venrock Associates”), and (ii) 205,876 shares of common stock held by Venrock Partners VII, L.P. (“Venrock Partners”). Venrock Management VII, LLC (“Venrock Management”) is the sole general partner of Venrock Associates and Venrock Partners. As sole general partner for each of Venrock Associates and Venrock Partners, Venrock Management may be deemed to share the power to direct the disposition and vote of, and therefore to own the shares held by Venrock Associates and Venrock Partners. Investment and voting decisions by Venrock Management are made jointly by three or more individuals who are managing directors, and therefore no individual managing director of Venrock Management is the beneficial owner of the shares held by Venrock Associates and Venrock Partners. Venrock Management expressly disclaims beneficial ownership over all shares held by Venrock Associates and Venrock Partners, except to the extent of their indirect pecuniary interest therein. The address for Venrock Associates and Venrock Partners is 3340 Hillview Avenue, Palo Alto, California 94304.
|
(4)
| Consists of (i) 62,880 shares of common stock, (ii) 152,542 shares of common stock held by Keith Richard Leonard Jr. 2017 Retained Annuity Trust, and (iii) 1,394,655 shares of common stock that may be acquired pursuant to the exercise of stock options within 60 days of April 26, 2022.
|
(5)
| Consists of (i) 294,060 shares of common stock, and (ii) 566,041 shares of common stock that may be acquired pursuant to the exercise of stock options within 60 days of April 26, 2022.
|
(6)
| Consists of (i) 589,398 shares of common stock, and (ii) 19,444 shares of common stock that may be acquired pursuant to the exercise of stock options within 60 days of April 26, 2022.
|
(7)
| Consists of (i) 120,000 shares of common stock, and (ii) 115,555 shares of common stock that may be acquired pursuant to the exercise of stock options within 60 days of April 26, 2022.
|
(8)
| Consists of (i) 480,921 shares of common stock, and (ii) 166,520 shares of common stock that may be acquired pursuant to the exercise of stock options within 60 days of April 26, 2022.
|
(9)
| Consists of (i) 3,261 shares of common stock, and (ii) 134,745 shares of common stock that may be acquired pursuant to the exercise of stock options within 60 days of April 26, 2022.
|
(10)
| Consists of (i) 84,745 shares of common stock, and (ii) 60,169 shares of common stock that may be acquired pursuant to the exercise of stock options within 60 days of April 26, 2022.
|
(11)
| Consists of 48,333 shares of common stock that may be acquired pursuant to the exercise of stock options within 60 days of April 26, 2022.
|
(12)
| Consists of 100,661 shares of common stock that may be acquired pursuant to the exercise of stock options within 60 days of April 26, 2022.
|
(13)
| Consists of (i) 10,169 shares of common stock, and (ii) 90,678 shares of common stock that may be acquired pursuant to the exercise of stock options within 60 days of April 26, 2022. Ms. Samuels is affiliated with Venrock. Ms. Samuels does not have voting or dispositive control over the shares held by the entities affiliated with Venrock referenced in footnote 2 above.
|
(14)
| Consists of 65,972 shares of common stock that may be acquired pursuant to the exercise of stock options within 60 days of April 26, 2022.
|
(15)
| Consists of (i) the shares described in notes 4 through 15 above, (ii) 0 shares of common stock, and (iii) 0 shares of common stock that may be acquired pursuant to the exercise of stock options within 60 days of April 26, 2022.
|
DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who own more than 10% of a registered class of the Company’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors, and greater than 10% stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.
To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, the Company believes that all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners were complied with during the year ended December 31, 2021.
ADDITIONAL INFORMATION
Householding of Proxy Materials
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies.
Brokers with account holders who are Unity stockholders may be “householding” our proxy materials. A single proxy statement may be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that it will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you notify your broker or the Company that you no longer wish to participate in “householding.”
If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate proxy statement and annual report, you may (1) notify your broker, (2) direct your written request to: Unity Biotechnology, Inc., 285 East Grand Ave., South San Francisco, CA 94080 or (3) request from the Company by calling (650) 416-1192. Stockholders who currently receive multiple copies of this Proxy Statement at their address and would like to request “householding” of their communications should contact their broker. In addition, the Company will promptly deliver, upon written or oral request to the address or telephone number above, a separate copy of the Form 10-K, Proxy Statement, Proxy Card, or Notice of Internet Availability of Proxy Materials to a stockholder at a shared address to which a single copy of the documents was delivered.
Other Matters
As of the date of this Proxy Statement, the Board does not intend to present any matters other than those described herein at the Annual Meeting and is unaware of any matters to be presented by other parties. If other matters are properly brought before the Annual Meeting for action by the stockholders, proxies will be voted in accordance with the recommendation of the Board or, in the absence of such a recommendation, in the discretion of the proxy holder.
We have filed our Annual Report on Form 10-K for the year ended December 31, 2021 with the SEC. It is available free of charge at the SEC’s web site at www.sec.gov. Upon written request by a Unity stockholder, we will mail without charge a copy of our Annual Report on Form 10-K, including the financial statements and financial statement schedules, but excluding exhibits to the Annual Report on Form 10-K. Exhibits to the Annual Report on Form 10-K are available upon payment of a reasonable fee, which is limited to our expenses in furnishing the requested exhibit. All requests should be directed to the Corporate Secretary, Unity Biotechnology, Inc., 285 East Grand Ave., South San Francisco, CA 94080.
| |
| By Order of the Board of Directors
/s/ Anirvan Ghosh
|
April 29, 2022
| Anirvan Ghosh, Ph.D.
Chief Executive Officer and Director
|
APPENDIX A
FORM OF CERTIFICATE OF AMENDMENT TO THE
OF