UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
(Amendment
No. )
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by the Registrant
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Under Rule 14a-12 |
EVOFEM
BIOSCIENCES, INC.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee previously paid with
preliminary materials. |
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Fee computed on table below
per Exchange Act Rules 14a-6(i)(1) and 0-11. |
2023
Notice of Annual Meeting of Stockholders and
Proxy Statement
Thursday, September 14, 2023, 8:00 a.m. Pacific
Daylight Time
Science with a Soul®
Evofem Biosciences
is committed to
commercializing innovative
products that
address unmet needs
in women’s sexual and reproductive health.
____________________
Our Mission
To improve
the quality of lives of women worldwide by delivering
innovative solutions
that provide them with
more control over
their sexual and reproductive health.
We are shattering
the hormone glass ceiling with
Phexxi®
(lactic acid, citric acid and potassium bitartrate),
the first and only
FDA-approved, hormone-free contraceptive vaginal gel.
Letter to Our Stockholders
To My Fellow Stockholders:
In 2022, we more than doubled annual
net sales of Phexxi® (lactic acid, citric acid and potassium bitartrate) – the first and only FDA-approved, on demand, hormone-free
contraceptive vaginal gel. Our expenses were reduced by 42% in a post-COVID environment,
which enabled us to dramatically reduce our net loss, narrowing the gap toward break-even.
Following the unexpected outcome of our
Phase 3 EVOGUARD trial, we made very tough decisions. To conserve capital, in November 2022 we discontinued all research
and development programs; halted the transfer of Phexxi manufacturing; and reduced our workforce, cutting 45 positions. In March 2023,
we took additional steps to better align expenses with anticipated revenue. We eliminated another 11 positions, including the chief commercial
officer role. We also reduced salaries for all staff except the sales force, including an aggregate 36% reduction in my annual base salary and a 20%
reduction for other members of the executive team.
“A challenge
only becomes an obstacle when you bow to it.” In the past year, we faced challenges that were consuming, confounding at times, and
took most of the air out of the company’s sails. Anyone can brave a sea in calm water; the team members who have stayed with the
organization are resilient and tenacious. We are united behind our common objectives and worthy mission, and we have the heart, head,
and backbone to change women’s health forever.
We are focused in 2023 on further
improving and increasing Phexxi access and delivering our third consecutive year of Phexxi net revenue growth.
Strong Growth in Phexxi Access
In 2022, the U.S. Department of Health
and Human Services, alongside the Departments of Labor and of the Treasury, issued new Guidelines to clarify that under the Affordable
Care Act (ACA), insurers and pharmacy benefit managers must provide coverage, with no out-of-pocket costs to the subscriber or dependent,
for FDA-approved contraceptive products, like Phexxi, prescribed by healthcare providers. These updated Guidelines took effect on January
1, 2023.
To comply with these Guidelines, payers are increasingly covering
Phexxi and removing barriers to access, including:
| • | Adding Phexxi to formulary (commercial insurers) or preferred
drug list (Medicaid) |
| • | Removing the requirement for a Prior Authorization letter
(commercial insurers) |
| • |
Moving Phexxi to $0 copay (commercial insurers). 19.4 million
lives are covered at no out-of-pocket cost (as of July 6, 2023). |
Our market access team continues to gain
and improve coverage for Phexxi with payers nationwide. We won coverage for 32.5 million lives in 2022 and added another 22.1 million
lives in the first half of 2023.
In addition to the dramatic increase in covered
lives:
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Our approved claims rate increased from 63% on January 1, 2022
to 79% as of January 1, 2023 and has been 80% or higher since February. |
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Phexxi Co-pay Card utilization decreased from 41% on January
1, 2022 to 19% as of January 1, 2023. This directly reflects the improvement in coverage that resulted in lower co-pays, which in turn
decreased the need for Phexxi users to utilize a Co-pay Card. |
In the June 2023 Executive
Order on contraception, the president specifically ordered federal agencies “to consider new guidance to ensure
that private health insurance” covers all contraceptives. We expect that this will result in improved financials for Phexxi.
Targeting our
Third Consecutive Year of Revenue Growth
Our sales strategy is data driven and focused:
we know who our patients are, and we know the providers that serve them. This is where we are putting our sales efforts.
Despite an aggregate
80% reduction in our sales and marketing force, Phexxi generates approximately 2,000 prescriptions weekly with 1,300
committed prescribers. This strengthens our confidence that the team and programs in place today will enable us to deliver our third
consecutive year of increased Phexxi sales in 2023.
Today, we are asking you to vote on
five proposals, including a proposal to approve an amendment to our Amended and Restated Certificate of Incorporation,
that are very important to the future of Evofem.
We
are currently authorized to issue 500,000,000 shares of common stock under our Amended and Restated Certificate of Incorporation. As
of August 16, 2023, of the authorized common stock, 4,060,209 shares are issued and outstanding and approximately 394,856,452
shares are reserved for issuance under pending conversions or exercise of convertible notes, rights, warrants and all other derivatives.
Given market conditions, the Board of Directors determined, based on the company’s goals and various contractual obligations, that
it is in the best interests of Evofem and its stockholders to increase the number of shares of common stock we are authorized to issue
under our Certificate of Incorporation. Approval of the Increase in Authorized Shares is critically important to Evofem’s future.
We are asking for your support to remain
a viable force by delivering innovation in women’s healthcare and improving choices for women everywhere. To do this, we need your
vote at our upcoming Annual Meeting of Stockholders. Please vote promptly online, by phone or by mail, following the instructions on the
proxy card or voting instruction form sent to you.
There are moments in time where categories
change forever. Our organization continues to address the critical and significant need for non-hormonal birth control. In
the U.S., 23 million women will not use hormones because they have suffered from hormonal side effects or are worried about the negative
long-term impact of over medicating themselves when they don’t have sex every day. Women don’t need more choices; they need
better ones. It is time for change and Evofem is delivering that change for women.
Sincerely,
Saundra Pelletier
President and Chief Executive Officer
August 29, 2023
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Evofem Biosciences, Inc. | 2023 Proxy Statement |
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Notice of Annual Meeting of Stockholders
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Date and Time
September 14, 2023
8:00 a.m. Pacific Time |
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Location
12544 High Bluff Drive, Suite 400
San Diego, California 92130 |
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Who Can Vote
Record owners of Evofem Biosciences, Inc. common stock
and Series E-1 Convertible Preferred Shares at the close of business on August 7, 2023 (the “record date”) |
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Voting Item |
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Proposal |
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Board Vote Recommendation |
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For Further Details |
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1. To elect one director to serve a three-year term expiring 2026 |
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“FOR ALL” of the director nominees |
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2. To approve, on a non-binding advisory basis, the compensation of our named executive officers |
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3.
To amend the Amended and Restated Certificate
of Incorporation of Evofem Biosciences, Inc. to increase the number of outstanding shares of our common
stock we are authorized to issue to 3,000,000,000 (the Increase in Authorized Shares). |
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4. To ratify the appointment of BPM LLP as Evofem Biosciences, Inc.’s independent registered public accounting firm for the fiscal year ending December 31, 2023. |
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5.
To consider and vote upon
a proposal to authorize our Board, in its discretion, to adjourn the Annual Meeting to another place, or a later date or dates, if
necessary or appropriate, to solicit additional proxies in favor of the proposals listed above at the time of the Annual Meeting. |
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All stockholders are cordially invited
to attend the 2023 Annual Meeting of Stockholders (the “annual meeting”). Whether
you plan to attend the Annual Meeting or not, we urge you to read the proxy statement and to vote as quickly as possible to ensure your
vote is recorded. You may change or revoke your proxy at any time before it is voted at the meeting.
If your shares are held in “street
name,” that is, held for your account by a broker or other nominee, you will receive instructions from the holder of record that
you must follow for your shares to be voted.
A list of stockholders of record will
be available at the Annual Meeting and beginning ten days prior to the Annual Meeting at the offices of our outside counsel, Procopio,
Cory, Hargreaves & Savitch LLP, at 12544 High Bluff Drive, Suite 400, San Diego, California 92130. Please be aware that while
the Company’s Executive Address is 7770 Regents Road, Suite 113-618, San Diego, California 92122, the annual meeting will be
held at the offices of our outside counsel, Procopio, Cory, Hargreaves & Savitch LLP, at 12544 High Bluff Drive, Suite 400, San Diego,
California 92130.
Whether you plan to attend the Annual Meeting
or not, it is important that you cast your vote either in person or by proxy.
BY ORDER OF THE BOARD OF DIRECTORS
Ivy Zhang
Secretary
August 29, 2023
Special Note About Forward-Looking Statements
This proxy statement includes statements regarding future
plans, expectations, beliefs, intentions and prospects that are “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Forward-looking statements may appear throughout this proxy statement. The words “will,” “expects,” “could,”
“would,” “may,” “anticipates,” “intends,” “plans,” “believes,”
“seeks,” “targets,” “estimates,” “looks for,” “looks to,” “continues”
and similar expressions, as well as statements regarding our focus for the future, are generally intended to identify forward-looking
statements. Each of the forward-looking statements we make in this proxy statement involves risks and uncertainties that could cause actual
results to differ materially from these forward-looking statements. Factors that might cause or contribute to such differences include,
but are not limited to, those discussed in the section titled “Risk Factors” of our Forms 10-K and 10-Q. Undue reliance should
not be placed on these forward-looking statements, which speak only as of the date of this proxy statement. We undertake no obligation
to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this proxy statement,
except as required by law.
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Evofem Biosciences, Inc. | 2023 Proxy Statement |
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Other
Information
Table of Contents
Corporate Governance
Matters
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PROPOSAL
1 |
Election
of Directors |
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The Board has nominated Saundra Pelletier for election at the Annual Meeting. The Board currently consists of eight seats, with five currently
filled, and is classified into three classes as follows: Class III director Saundra Pelletier with a term expiring at the upcoming Annual
Meeting; Class I directors Kim Kamdar, Ph.D., Colin Rutherford, and Lisa Rarick, M.D. with a term expiring in 2024; and Class II director
Tony O’Brien with a term expiring in 2025.
Class I directors Kim Kamdar, Ph.D., Colin Rutherford, and Lisa Rarick, M.D. and
Class II director Tony O’Brien will serve until the Annual Meetings of Stockholders to be held in 2024 and 2025, respectively, and
until their respective successors have been elected and qualified or until their death, resignation or removal.
Unless authority
to vote for this nominee is withheld, the shares represented by the enclosed proxy will be voted FOR the election as director of Saundra
Pelletier. In the event that the nominee becomes unable or unwilling to serve, the shares represented by the enclosed proxy will be voted
for the election of such other person as the Board may recommend in the nominee’s place. We have no reason to believe that the nominee
will be unable or unwilling to serve as a director.
The director nominee must be elected by an affirmative vote of a plurality of
shares present at the Annual Meeting and entitled to vote on the election of directors.
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Recommendation
The Board recommends the election of Saundra Pelletier as director, and proxies solicited by the board will be voted in favor thereof unless a stockholder has indicated otherwise on the proxy. |
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The Board of Directors
Our Board currently consists of eight seats
with three vacancies (two for Class II and one for Class III). Vacancies on the Board may be filled by potential candidates nominated
by the Nominating and Corporate Governance Committee of the Board, who may seek out potential candidates that meet the criteria for selection
as a Board nominee and have the specific qualities or skills being sought, and one or more of such candidates may be appointed as directors
as appropriate and in accordance with the Company’s organizational documents. The vacancies, if filled, will be filled until the
end of the class term. Our Board is divided into three classes as set forth below, each serving staggered three-year terms until their
respective successors are duly elected and qualified:
| • | Our Class I directors are Kim Kamdar, Ph.D., Colin Rutherford,
and Lisa Rarick, M.D. and their terms expire at the Annual Meeting of Stockholders in 2024; |
| • | Our Class II director is Tony O’Brien and his term expires
at the Annual Meeting of Stockholders in 2025; and |
| • | Our Class III director is Saundra Pelletier and her term expires
at the Annual Meeting of Stockholders in 2023. |
Saundra Pelletier is being nominated for
re-election as director at this year’s Annual Meeting. Directors are elected by a plurality of the votes cast at the Annual Meeting.
The nominee has indicated her willingness to serve if elected, but if the nominee should be unable to serve or for good cause will not
serve, the shares represented by proxies may be voted for a substitute nominee as the Board may designate, unless a contrary instruction
is indicated in the proxy.
There are no familial relationships among our current directors
and executive officers.
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Evofem Biosciences, Inc. | 2023 Proxy Statement |
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Corporate Governance Matters
The following table lists the names, ages as of August
8, 2023, and positions of the individuals who serve as our directors:
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Name and Principal Occupation |
Age |
Director Since |
Board Committees |
Other Current Public Directorships |
| Class III Director Nominee |
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Saundra Pelletier | Interim Chair of the Board
of Directors
President and Chief Executive Officer, Evofem Biosciences, Inc. |
54 |
2013 |
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TRACON Pharmaceuticals, Inc. |
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Colin Rutherford | Independent
Current member of the board of Spanish based Biopharma Hifas da
Terra SA |
64 |
2015 |
A |
Mitchells & Butlers Plc Renaissance Services SAOG Brookgate Limited |
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Kim Kamdar, Ph.D. | Independent
Managing Partner, Domain Associates, LLC |
56 |
2011 |
A, C, N |
Seraphina Therapeutics, Inc. Truvian Sciences |
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Lisa Rarick, M.D. | Independent
Board-certified Obstetrician/ Gynecologist and Regulatory Affairs
Expert |
63 |
2020 |
N |
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Tony O’Brien | Independent
Former Director General of Ireland’s Health Service Executive |
60 |
2018 |
A, C |
Global Leadership and Governance Solutions Limited |
| N | Nominating and Corporate Governance Committee |
|  | Committee
Chair |
Board Demographics
The charts below represent certain demographics of the current
composition of our directors and director nominees.
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Independence |
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 50s |
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Independent |
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We discuss below the qualifications, attributes and skills
that led our Board to conclude that each of our directors should serve as a director.
Corporate
Governance Matters
Nominee for Election as Class III Director
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KEY
EXPERIENCE AND QUALIFICATIONS
Ms. Pelletier’s service as Evofem’s
CEO and extensive experience in women’s health care brings Evofem’s Board of Directors invaluable guidance and insight. With
more than twenty-five years providing broad executive leadership, including successes in driving multiple, billion-dollar product launches,
expanding commercial capabilities in global markets and advocating for women’s health, Ms. Pelletier continues to lead the Board
of Directors with a clear focus on continuing Evofem’s successes.
Since joining Evofem Ms. Pelletier has
led the Company’s rapid growth and evolution, including its transition to the public market in January 2018. Ms. Pelletier has also
led the Evofem team in multiple successful equity financing rounds, raising more than $500 million. Under her leadership, Evofem launched
its first commercial product, Phexxi®, in September 2020. |
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Saundra Pelletier, 54
Chief Executive Officer
Director Since: February 2013 (Private Evofem); January 2018 (Evofem
Biosciences) |
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CAREER HIGHLIGHTS
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President and Chief Executive Officer of Evofem Biosciences,
Inc. (since January 2018)
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President and Chief Executive Officer of Private Evofem
(2013 to 2018)
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Founding CEO of WomanCare Global (WCG Cares), an international
nonprofit organization focused on creating sustainable supply chains that delivered products to women in more than 100 developing countries
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Corporate Vice President and Global Franchise Leader for
G.D. Searle, where she managed women’s health care business and teams
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Presenter and speaker at the Harvard T. H. Chan School
of Public Health, the Davos World Economic Forum, the Clinton Global Initiative, the International Conference on Climate Change, the MAKERS
Conference, Women Deliver, the International Conference on Family Planning, Reproductive Health Supplies Coalition, the University of
Virginia’s Darden School of Business, the National Community Oncology Dispensing Association, Fearless in Pharma, the Women’s
Health Innovation Summit, the University of Oregon’s Lundquist School of Business, Husson University and the Rady School of Management
at the University of California, San Diego
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Member, Board of Directors of TRACON Pharmaceuticals, Inc.,
(oncology), where she Chairs the Governance/Nomination Committee and is a member of the Audit Committee
AWARDS AND RECOGNITION
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Honorary Doctor of Business Administration from Husson
University (2022, 2020)
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Named one of San Diego’s “Top 50 Most Influential
Women over 50” by the San Diego Business Journal (2022)
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Awarded San Diego Magazine’s Woman of the Year (2021)
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Director of the Year Honoree from the San Diego Corporate
Directors Forum (2021)
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Received the Lifetime Legacy Award from the National Women
of Influence (2021)
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Girls Inc. San Diego - SHE LEADS Trailblazer Award (2021)
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Recognized as a Women of Influence in Life Sciences by
the San Diego Business Journal (2021)
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MM+M Hall of Femme Honoree (2021)
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PharmaVoice 100 Most Inspiring People (2021, 2020)
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Business Intelligence Group (BIG) Innovation Award (2021)
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Enterprising Women of the Year Honoree (2021)
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Recognized as One of the 500 Most Influential People in
San Diego by the San Diego Business Journal (2020, 2021)
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Inc. Magazine’s Female Founders 100 List (2020)
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San Diego Business Journal’s Business Woman of the Year
(2019)
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Awarded the Athena San Diego Pinnacle Award for Life Sciences
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Named a “New Champion for Reproductive Health”
by the United Nations Foundation
EDUCATION
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Bachelor of Science in Business Administration –
Husson University
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Bachelor of Science in Communications – New England
School of Communications |
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Evofem Biosciences, Inc. | 2023 Proxy Statement |
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Corporate
Governance Matters
Continuing Directors
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KEY
EXPERIENCE AND QUALIFICATIONS
We
believe Dr. Kamdar is qualified to serve on our Board based on her extensive experience working and serving on the boards of directors
of life sciences companies and her experience working in the venture capital industry. |
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CAREER HIGHLIGHTS
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Managing Partner of Domain Associates, LLC, a life sciences
venture capital firm (since 2005)
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Chair of the board of directors of Seraphina Therapeutics,
Inc. and Truvian Sciences
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Member of the board of directors of several private companies
including Alume, Epic Sciences, Epitel and Pleno Inc.
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Member of the board of directors of several public companies
including NASDAQ: SERA and NASDAQ: OMIC
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Past investments include Ariosa (acquired by Roche), Corthera
(acquired by Novartis), BiPar Sciences (acquired by Sanofi-Aventis) and Omniome (acquired by NASDAQ: PACB)
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Kauffman Fellow with MPM Capital (MPM) (2003 through 2004)
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Research director at Novartis, where she built and led
a research team that focused on the biology, genetics and genomics of model organisms (1995 to 2003)
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Author of ten papers as well as the inventor of seven patents
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Advisory board member of Dr. Eric Topol’s NIH supported
Clinical and Translational Science Award for Scripps Medicine
EDUCATION
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B.A. from Northwestern University
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Ph.D. in Biochemistry and Genetics from Emory University |
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Kim Kamdar, Ph.D., 55
Independent
Director Since: April 2011 (Private Evofem);
January 2018 (Evofem Biosciences)
Committees:
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Audit
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Compensation Committee
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Nominating and Corporate Governance (Chair) |
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Corporate
Governance Matters
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KEY
EXPERIENCE AND QUALIFICATIONS
We believe Mr. O’Brien’s extensive
experience as an executive and member of the boards of directors for health care and life sciences companies qualifies him to
be a member of our Board. |
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CAREER HIGHLIGHTS
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Director General of Ireland’s Health Service Executive
(HSE), an organization responsible for the provision of health and personal social services for the residents of Ireland (2012 to 2018)
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Chief Operating Officer of the Department of Health’s
Special Delivery Unit and a member of the Department’s Management Board (2011 to 2014)
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Director of Clinical Strategy and Programs in the HSE (2011
to 2012)
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Chief Executive Officer of the National Treatment Purchase
Fund (2011 to 2013)
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Chief Advisor to the HSE on the implementation of the National
Cancer Control Strategy (2006 to 2010)
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Project Director for the National Plan for Radiation Oncology
(2005 to 2008)
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Chairman of the National Cancer Registry Board (2009 to
2012)
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Founding Chief Executive Officer of the National Cancer
Screening Service (2007 to 2011)
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Director of BreastCheck, CervicalCheck (2002 to 2010)
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Associate and Interim Director of the National Cancer Control
Programme (2007 to 2011)
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Chief Executive of the Irish Family Planning Association
(1991 to 2002)
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Chief Executive of the UK Family Planning Association (1995
to 1996)
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Chartered Director of the Institute of Directors in Ireland
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Adjunct Assistant Professor in Health Strategy and Management
at Trinity College Dublin
OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY
INVOLVEMENT
•
Director and owner of Global Leadership and Governance
Solutions Limited, a private limited company organized in the Republic of Ireland
EDUCATION
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M.Sc. in Management Practice from Trinity College, University
of Dublin |
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Tony O’Brien, 60
Independent
Director Since: January 2018
Committees:
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Audit
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Compensation (Chair) |
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Evofem Biosciences, Inc. | 2023 Proxy Statement |
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Corporate
Governance Matters
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KEY
EXPERIENCE AND QUALIFICATIONS
We
believe that Mr. Rutherford is qualified to serve as a member of our Board because of his prior experience as a member of Private
Evofem’s board of directors and his many years of finance and operations leadership experience in the health care and
life sciences industries. |
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CAREER HIGHLIGHTS
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Former Chairman and CEO of LSE quoted European finance
specialist Euro-Sales Plc (with 18 offices across Europe), sold to Royal Bank of Scotland Plc (2000 to 2002)
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Former Chairman of SGI Funds, a Guernsey-, Cayman- and
Hong Kong-based diversified fund management group (2004 to 2009)
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Former Chairman and CEO of the LSE quoted UK fund management
group, MAM Funds Plc (2008 to 2011)
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Former Member of the board and Audit Committee Chairman
of Mitchells & Butlers Plc, the LSE’s largest quoted hospitality group (2013 to 2021)
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Former Member of the board and Audit Committee Chairman
of the MSE quoted Oil & Gas shipping logistics business, Renaissance Services SAOG, based in Muscat and Dubai (2007 to 2019)
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Former Chairman of European Health Care Group before its
acquisition by two U.S.-based hedge funds (2012 to 2014)
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Current Member of the Board of Meallmore Health Care Group
(2014 to Present)
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Current Member of the Board of Spanish based Biopharma
Hifas da Terra SA, a leader in the field of mycotherapy-related oncology products (2018 to Present)
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Current Chairman of Brookgate Limited, a UK property development
business backed by Goldman Sachs and Sixth Street (2010 to Present)
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Former visiting Professor at Edinburgh University’s
Business School
EDUCATION
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A member of the Scottish Institute of Chartered Accountants,
he graduated in Accountancy and Finance from Heriot Watt University in 1980 and qualified with Deloitte (formerly Touche Ross) in 1984.
•
Harvard Business School Alumni, having attended over a
10-year period and subsequently Chairing the HBS/YPO Presidents leadership seminar for 5 years. |
| |
|
| |
|
|
|
Colin Rutherford, 64
Independent
Director Since: November 2015 (Private Evofem); January 2018 (Evofem
Biosciences)
Committees:
•
Audit (Chair)
|
|
|
| |
|
|
| |
|
|
| |
|
|
Corporate Governance
Matters
 |
|
|
|
|
|
| |
|
|
KEY
EXPERIENCE AND QUALIFICATIONS
We
believe that Dr. Rarick is qualified to serve as a member of our Board because of her extensive experience in health care/women’s
health matters as well as her vast prior experience with regulatory matters and the life sciences industry. |
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
CAREER HIGHLIGHTS
•
Board-certified obstetrician/gynecologist and regulatory
affairs expert with 35 years’ experience in women’s health and 15 years’ experience leading several offices
within the U.S. Food and Drug Administration (FDA)
•
Began her career at the FDA as a Medical Officer, responsible
for the management of products indicated for a variety of reproductive health conditions, including oral, transdermal and vaginal contraceptives
(1988)
•
Director for the Division of Reproductive and Urologic
Products (DRUP) at the FDA (1996)
•
Held several management roles in the Center for Drug Evaluation
and Research (CDER), including Deputy Director of the Office of Drug Evaluation 2 and Associate Director in the Office of the Center Director
•
Focused on HIV prevention, pregnancy prevention, pre- and
post-pregnancy care and menopausal therapy in her final year at the FDA in the Office of Women’s Health
•
Reproductive health and regulatory affairs consultant,
helping numerous companies navigate the development of their products from early-stage development through FDA approval
•
Member of the Scientific Advisory Committee for the National
Institute of Child Health and Human Development (since 2004)
•
Member of the board of directors for Alliance Partners
360 from (2017 to 2019)
•
Family Planning clinical care provider (2020 to present)
EDUCATION
•
B.S. and M.D. from the Loma Linda University School of
Medicine
•
Completed residency training in Obstetrics and Gynecology
at Georgetown University |
|
| |
|
|
| |
|
|
| |
|
|
|
|
Lisa Rarick, M.D., F.A.C.O.G., 63
Independent
Director Since: February 2020
Committees:
•
Nominating and Corporate Governance
|
|
|
|
| 14 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Corporate Governance
Matters
Director Nomination Process and Board Diversity
While we do not have a stand-alone diversity
policy, in considering whether to recommend any director nominee, including candidates recommended by stockholders, we believe that the
backgrounds and qualifications of the directors, considered as a group, should provide a significant mix of experience, knowledge
and abilities that will allow our Board to fulfill its responsibilities. Evaluation criteria generally include, among other things,
an individual’s business experience and skills (including skills in core areas such as operations, management, technology, accounting
and finance, strategic planning and international markets), as well as independence, judgment, knowledge of our business and industry,
professional reputation, leadership, integrity and the ability to represent the best interests of our stockholders. In addition, the
Nominating and Corporate Governance Committee will consider the ability to commit sufficient time and attention to the activities of the
Board, as well as the absence of any potential conflicts of interest. The Nominating and Corporate Governance Committee does not
intend to assign specific weights to particular criteria and no particular criterion is necessarily applicable to the prospective nominee.
Our Board will be responsible for selecting candidates for election as directors based on the recommendation of the Nominating and Corporate
Governance Committee.
Director Independence
Our common stock is listed on the OTCQB
Venture Market, but we have elected to continue to adhere to the more stringent rules of the Nasdaq stock exchange. Under Nasdaq rules,
independent directors must comprise a majority of a listed company’s board of directors. In addition, Nasdaq rules require that,
subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and governance committee be
independent. Audit committee and compensation committee members must also satisfy the enhanced independence criteria set forth in Rules
10A-3 and 10C-1 under the Securities Exchange Act of 1934, as amended (the Exchange Act), respectively, and corresponding Nasdaq rules.
Based on information requested from and
provided by each director concerning his or her background, employment and affiliations, our Board has determined that each of Dr. Kamdar,
Mr. O’Brien, Mr. Rutherford and Dr. Rarick are independent directors within the meaning of applicable Nasdaq rules, and that each
member of our audit committee and compensation committee satisfies the enhanced independence requirements of applicable Nasdaq and SEC
rules. In making this determination, the current and prior relationships of each non-employee director with our Company and all other
facts and circumstances deemed relevant were considered, including their beneficial ownership of our capital stock and any related party
relationships involving our Company and any such director, as described in the “Related Person Transactions” section below.
There are no family relationships among
any of our current directors and executive officers, and there are no arrangements or understandings between any nominee and any other
person pursuant to which such nominee was or is selected as a director or nominee.
Board Meeting Attendance
During the fiscal year ended December 31,
2022, our Board met thirty-three times. The Board has adopted a policy under which each member of the Board makes every effort to but
is not required to attend each Annual Meeting of our stockholders. All of our directors attended our 2022 Annual Meeting.
| Average director attendance at fiscal 2022 Board and committee meetings |
|
| |
|
|
|
| 97% |
100% |
100% |
100% |
| Board |
Audit |
Compensation |
Nominating and Corporate Governance |
| |
|
Corporate Governance
Matters
Board Refreshment
Thoughtful consideration is continuously
given to the composition of our Board in order to maintain an appropriate mix of experience and qualifications, introduce fresh perspectives,
and broaden and diversify the views and experience represented by the Board. Our Board meets the December 31, 2022 requirement for AB
979 regarding Board Directors from underrepresented communities.
Corporate Governance
Board Structure and Responsibilities
Board Leadership Structure
Our corporate governance practices
do not indicate a particular board structure, and our Board has the flexibility to select its chair and our chief executive officer in
the manner that it believes is in the best interests of our stockholders. Accordingly, the positions of Chair and the Chief Executive
Officer may be filled by either one individual or two individuals. The Board has elected to separate the positions of Chair and Chief
Executive Officer. However, our CEO is currently serving as the interim Chair of the Board until another Chair is appointed
and elected by the Board. Mr. Tony O’Brien is currently serving as the Independent Lead Director until an Independent Director
is elected as the new Chair of the Board.
| Responsibilities of the Chair of our Board |
|
•
Leads the CEO succession planning process.
•
Facilitates communication with the Board and presides over
regularly conducted executive sessions of the independent directors and sessions where the Chief Executive Officer is not present.
•
Reviews and approves matters, such as schedule sufficiency,
and where appropriate, information provided to other Board members.
•
Serves as liaison between Chief Executive Officer and the
independent Directors.
•
Has authority to call meetings of the independent Directors.
•
Leads the Board’s evaluation of the CEO (when the
Chair is not filled by Ms. Pelletier).
•
Reviews and guides agenda items for Board meetings.
•
Encourages effective Director participation by fostering
an environment of open dialogue and constructive feedback among independent Directors.
•
Is involved in selection and interviewing of new Board
members.
•
If requested by major stockholders, ensures that he/she
is available for consultation and direct communication as needed.
•
If required, represents independent Board members externally.
•
Performs such other duties as the Board may determine from
time to time. |
| 16 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Corporate Governance
Matters
Board Oversight
Oversight of Risk
One of the key functions of our Board is
informed oversight of our risk management process. The Board does not have a standing risk management committee, but rather administers
this oversight function directly through the Board as a whole, as well as through various standing committees of our Board that address
risks inherent in their respective areas of oversight.
Corporate Governance
Matters
Oversight of Other Key Areas
| |
|
|
| |
Oversight of Cybersecurity
We understand that cybersecurity is a critical
component of our business and we have a comprehensive infrastructure and program in place to protect our systems and data. We
maintain our cybersecurity infrastructure through a number of security measures including our internal policies and procedures, business
processes, and software technology tools to control and monitor our systems and security. We proactively control and monitor
all aspects of our business infrastructure security including our network, servers, firewalls, devices, and email security. Our employees
receive ongoing training on cybersecurity matters and protocols through periodic Company communications. To ensure the effectiveness of
our cybersecurity infrastructure, we also complete an annual penetration test through a third-party provider which checks for interior
and exterior network vulnerabilities. We implement any suggested mitigations necessary to correct any identified security weaknesses.
Our Audit Committee has oversight responsibility
over our cybersecurity measures. The Audit Committee is briefed quarterly on current cybersecurity matters and initiatives to improve
the cybersecurity infrastructure. The Audit Committee regularly briefs the full Board on these matters. |
|
| |
|
|
| |
|
|
| |
ESG Strategy and Oversight
Framework
We completed a comprehensive assessment
to update our priority environmental, social, and governance (ESG) issues in 2021 and continue to monitor and stay current with new guidance
on ESG issues. One key insight from the assessment was the interconnectedness of many key ESG issues, such as the impact that
inclusion and diversity, climate change, and financial resiliency have on important priorities like colleague attraction and retention
and community resiliency. From these findings, we developed a framework to drive our ESG strategy moving forward. Evofem’s
Board engages with senior leaders on near and long-term business strategy and reviews management’s performance in delivering
on our framework for long-term value creation, including as it relates to sustainability. |
|
| |
|
|
| |
|
|
| |
Oversight of Strategy
Oversight of the Company’s business
strategy and strategic planning is a key responsibility of the Board. The Board believes that overseeing and monitoring strategy
is a continuous process and takes a multilayered approach in exercising its duties. |
|
| |
|
|
| 18 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Corporate Governance
Matters
Committees of the Board of Directors
| Audit Committee |
 |
|
Chair:
Colin Rutherford
|
Members:
Kim Kamdar, Ph.D.
Tony O’Brien |
Meetings
in 2022: 4
|
| |
|
|
|
| |
Our Audit Committee’s role and responsibilities are
set forth in the Audit Committee’s written charter.
Principal Responsibilities:
•
Reviews annual financial statements;
•
Considers matters relating to accounting policy and internal
controls;
•
Reviews the scope of annual audits;
•
Assists the Board in its oversight of Evofem’s financial
statements, including internal control over financial reporting;
•
Reviews and discusses with senior management the guidelines
and policies by which Evofem assesses and manages risk;
•
Assists the Board in its oversight of the qualifications,
independence, and performance of Evofem’s independent registered public accounting firm, including responsibility for the appointment,
compensation, retention, and oversight of the work of the firm;
•
Assists the Board in its oversight of the performance of
Evofem’s internal audit function, including responsibility for the appointment, replacement, reassignment, or dismissal of, and
being involved in the performance reviews of, Evofem’s internal auditor; and
•
Assists the Board in its oversight of Evofem’s compliance
with legal and regulatory requirements, including reviewing periodically with management any significant legal, compliance, and regulatory
matters that have arisen or that may have a material impact on Evofem’s business, financial statements, or compliance policies,
Evofem’s relations with regulators and governmental agencies, and any material reports or inquiries from regulators and government
agencies.
All members of the Audit Committee satisfy
the current independence standards promulgated by the SEC, OTCQB and Nasdaq, as such standards apply specifically to members of audit
committees. The Board has determined that Mr. Rutherford is an “audit committee financial expert,” as the SEC has defined
that term in Item 407 of Regulation S-K. Please also see the report of the Audit Committee set forth elsewhere in this proxy statement.
A copy of the Audit Committee’s written
charter is publicly available on our website at www.evofem.com. |
| |
|
Corporate Governance
Matters
| Compensation Committee |
 |
|
Chair:
Tony O’Brien
|
Members:
Kim Kamdar, Ph.D. |
Meetings
in 2022: 3
|
| |
Our Compensation Committee’s role and responsibilities are set forth in the Compensation Committee’s written charter. |
| |
Principal Responsibilities:
• Reviews,
approves and makes recommendations regarding our compensation policies, practices and procedures to ensure that legal and fiduciary responsibilities
of the Board are carried out and that such policies, practices and procedures contribute to our success;
•
Administers our Amended and Restated 2014 Equity Incentive
Plan (the Amended and Restated 2014 Plan), and our Amended and Restated 2018 Inducement Equity Incentive Plan (the 2018 Inducement Equity
Incentive Plan);
•
Recommends to the Board the compensation of our Chief Executive
Officer and conducts its decision-making process with respect to that issue without the Chief Executive Officer present;
•
Oversees Evofem’s compensation programs generally;
• Reviews and approves incentive award performance metrics
and goals relevant to the compensation of Evofem’s Chief Executive Officer’s performance and determines and approves the compensation
awarded to the Chief Executive Officer (subject to ratification by the Board);
•
Reviews and approves the incentive award performance metrics
relevant to the compensation of the other senior executives under its purview (which includes the named executives listed in the 2022
Summary Compensation Table) and, based on the recommendation of the Chief Executive Officer, approves the compensation of each such senior
executive;
•
Reviews reports about the compensation of other key corporate
officers of Evofem, as the Compensation Committee deems appropriate;
•
Oversees Evofem’s management development and succession
planning programs for the Chief Executive Officer and her direct reports and consults with the Chair of the Nominating and Corporate Governance
Committee with respect to Chief Executive Officer succession planning;
•
Reviews and approves compensation-related disclosures
for inclusion in Evofem’s annual Proxy Statement;
•
Oversees the assessment of the risks related to Evofem’s
compensation policies and programs;
•
Reviews periodic updates from management on initiatives
and progress in the area of human capital, including diversity, equity, and inclusion; and
•
Engages the services of an independent compensation consultant
to advise on executive compensation matters.
All members of the Compensation Committee
satisfy the current independence standards promulgated by the SEC, OTCQB and Nasdaq, as such standards apply specifically to members of
compensation committee.
In establishing compensation amounts for
executives, the Compensation Committee seeks to support the Company’s 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 delegate authority to one or more members of the Compensation Committee or to one or more executives of
the Compensation Committee, except that the Compensation Committee may not delegate authority to approve compensation of the Company’s
chief executive officer or its other Section 16 officers to any person or committee.
A copy of the Compensation Committee’s
written charter is publicly available on our website at www.evofem.com. |
| |
|
| 20 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Corporate Governance
Matters
| Nominating and Corporate Governance Committee |
 |
|
Chair:
Kim Kamdar, Ph.D.
|
Members:
Lisa Rarick, M.D. |
Meetings
in 2022: 2
|
| |
The Nominating and Corporate Governance Committee’s role and responsibilities are set forth in its written charter. |
| |
Principal Responsibilities:
• Evaluates and makes recommendations to the full Board as
to the size and composition of the Board and its committees, evaluating and making recommendations as to potential candidates, and evaluating
current Board members’ performance;
•
Identifies individuals qualified to become Board members,
consistent with criteria approved by the Board, and recommends these individuals to the Board for nomination, election, or appointment
as members of the Board and Board Committees;
• Considers board refreshment in light of various factors,
including expected director departures, the Board’s mix and interplay of skills, experience and attributes, including diversity,
and individual director performance; and
•
Oversees the annual evaluation of the Board, individual
directors, and Board Committees.
All members of the Nominating Committee
qualify as independent under the definition promulgated by Nasdaq.
A copy of the Nominating Committee’s
written charter is publicly available on our website at www.evofem.com. |
| |
|
Corporate Governance
Matters
Board Accountability and Processes
Stockholder Communications with the Board
of Directors
Evofem takes every effort to ensure that
the views of stockholders are heard by the Board or individual directors, as applicable, and that appropriate responses are provided to
stockholders in a timely manner. You may communicate with the Board, its Chair, or the Chair of any committee by sending your communication
to our Corporate Secretary, Evofem Biosciences, Inc., 7770 Regents Road, Suite 113-618, San Diego, California 92122-1967, and all appropriate
communications will be forwarded as requested. Items that are unrelated to the duties and responsibilities of the Board may be excluded,
such as:
| • |
junk mail and mass mailings; |
| • |
resumes and other forms of job inquiries; |
| • |
solicitations or advertisements. |
In addition, any material that is unduly
hostile, threatening, or illegal in nature may be excluded, provided that any communication that is filtered out will be made available
to any outside director upon request.
Fostering long-term relationships with our
stockholders and maintaining their trust is a priority for the Board. Direct engagement with stockholders helps us gain useful feedback
on a wide variety of topics, including corporate governance, executive compensation, sustainability and corporate responsibility, human
capital management matters, business strategy, and performance related matters. Stockholder feedback also helps us to better tailor the
public information we disclose to address the interests and inquiries of stockholders.
Board Self-Evaluation
The Board believes that self-evaluations
of the Board and Board Committees are important elements of corporate governance and essential to ensure a well-functioning Board. Pursuant
to Evofem’s Corporate Governance Guidelines, the Board, acting through the Nominating and Corporate Governance Committee and under
the general oversight of the Chairman of the Board, conducts an annual self-evaluation and an evaluation of each committee of the Board.
Code of Conduct and Ethics
We have adopted a Code of Business Conduct
and Ethics that applies to our officers, directors and employees, which is available on our website at www.evofem.com and will be made
available to stockholders without charge, upon request, in writing to our Corporate Secretary, Evofem Biosciences, Inc., 7770 Regents
Road, Suite 113-618, San Diego, California 92122-1967. The Code of Business Conduct and Ethics contains general guidelines for conducting
the business of our company consistent with the highest standards of business ethics and is intended to qualify as a “code of ethics”
within the meaning of Section 406 of the Sarbanes-Oxley Act of 2002 and Item 406 of Regulation S-K. In addition, disclosure regarding
any amendments to, or waivers from, provisions of our Code of Business Conduct and Ethics that apply specifically to our directors, principal
executive officer and principal financial officer will be included in a Current Report on Form 8-K within four business days following
the date of the amendment or waiver, unless website posting or the issuance of a press release of such amendments or waivers is then permitted
by the rules of the OTCQB.
| 22 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Corporate Governance
Matters
Governance Practices
| |
Board Composition |
| |
•
|
Balanced and effective Board composition,
supplemented by a thoughtful approach to refreshment, is a priority for Evofem. The selection of a qualified group of directors
with an appropriate mix of skills, experience, and attributes is essential to the Board’s successful oversight
of Evofem’s journey. The Board manages Board composition and refreshment with significant support from the Nominating
and Corporate Governance Committee. |
| |
Board Effectiveness |
| |
•
|
The Board considers director attendance at Board and Board
Committee meetings an essential duty of a director.
|
| |
• |
There were 33 meetings of
the Board during 2022. The independent directors meet in executive session, without the Chief Executive Officer present,
in conjunction with each regularly scheduled Board meeting. Saundra Pelletier, in her role as interim Chair of the Board,
presided at the executive sessions. There were a total of 9 meetings of the Board Committees during 2022. For 2022, all
of the directors attended 97% of all meetings of the Board and 100% of the Board Committees on which they served. |
| |
• |
Pursuant
to Evofem’s Corporate Governance Guidelines, all directors are generally expected to attend the Annual Meeting. All directors who
stood for election at the 2022 Annual Meeting attended the 2022 Annual Meeting. |
| |
Engaged Oversight |
| |
•
|
The Board fulfills its oversight role with
respect to Evofem’s strategy through year-round discussions and presentations covering company-wide and business unit specific
updates. The Board also provides oversight with respect to other key areas, including management succession planning,
human capital management (including diversity, equity, and inclusion), sustainability (including climate-related issues), corporate
social responsibility, lobbying and public policy, risk management, and cybersecurity. |
| |
Accountability |
| |
•
|
Evofem
proactively engages with significant stockholders throughout the year. Dialogue, transparency, and responsiveness are the cornerstones
of our stockholder engagement program. |
| |
• |
Interactive
investor dialogue provides perspective on investor concerns. |
| |
Board Structure |
| |
•
|
Evofem aims to maintain a balanced and independent
Board that is committed to representing the long-term interests of Evofem’s stockholders and has the substantial and
diverse expertise necessary to oversee Evofem’s strategic and business planning as well as management’s approach
to addressing significant risks and challenges facing Evofem. |
Corporate Governance
Matters
Director Compensation
The following table sets forth the compensation (cash and equity)
received by our non-employee directors during the year ended December 31, 2022.
| Name |
Fees Earned or Paid in Cash ($) |
Option Awards(1) ($) |
Totals ($) |
| Kim Kamdar, Ph.D. |
75,981 |
11,849 |
87,830 |
| Tony O’Brien |
75,000 |
11,849 |
86,849 |
| Lisa Rarick, M.D. |
55,000 |
11,849 |
66,849 |
| Colin Rutherford |
70,000 |
11,849 |
81,849 |
| Gillian Greer, Ph.D.(2) |
59,437 |
11,849 |
71,286 |
| Jenny Yip(3) |
— |
— |
— |
| (1) | Amounts listed in this column represent
the aggregate fair value of the option awards computed as of the grant date of each option award in accordance with FASB ASC Topic
718, rather than amounts paid to or realized by the named individual. There can be no assurance that options will be exercised (in
which case no value will be realized by the individual) or that the value on exercise will approximate the fair value as computed in accordance
with FASB ASC Topic 718. The assumptions used in the valuation of these awards are set forth in Note 11- Stock-based Compensation to our Consolidated
Financial Statements on our Annual Report. |
| (2) | Dr. Greer resigned from the Board effective April 24, 2023.
|
| (3) | Ms. Yip elected to forego any compensation as director. She
resigned from the Board effective February 10, 2023. |
| 24 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Corporate Governance
Matters
The following table shows the outstanding equity awards held
by our non-employee directors as of December 31, 2022.
| |
|
Option Awards |
| Name |
Number of Securities Underlying Unexercised Options Exercisable |
Number of Securities Underlying Unexercised Options Unexercisable |
|
Option Exercise Price ($) |
Option Grant
Date |
Option Expiration
Date |
| Kim Kamdar, Ph.D. |
3 |
— |
$ |
6,793.20 |
6/16/2015 |
6/16/2025 |
| |
4 |
— |
$ |
1,220.40 |
6/21/2016 |
6/21/2026 |
| |
5 |
— |
$ |
2,322.00 |
5/11/2017 |
5/11/2027 |
| |
1 |
— |
$ |
2,365.20 |
6/20/2017 |
6/20/2027 |
| |
6 |
— |
$ |
1,258.20 |
5/8/2018 |
5/8/2028 |
| |
26 |
— |
$ |
1,089.00 |
6/5/2019 |
6/5/2029 |
| |
26 |
— |
$ |
910.80 |
5/12/2020 |
5/12/2030 |
| |
48 |
— |
$ |
225.00 |
5/12/2021 |
5/12/2031 |
| |
— |
48 |
$ |
29.64 |
5/4/2022 |
5/4/2032 |
| Tony O’Brien |
13 |
— |
$ |
1,312.20 |
3/12/2018 |
3/12/2028 |
| |
6 |
— |
$ |
415.80 |
7/24/2018 |
7/24/2028 |
| |
26 |
— |
$ |
1,089.00 |
6/5/2019 |
6/5/2029 |
| |
26 |
— |
$ |
910.80 |
5/12/2020 |
5/12/2030 |
| |
48 |
— |
$ |
225.00 |
5/12/2021 |
5/12/2031 |
| |
— |
48 |
$ |
29.64 |
5/4/2022 |
5/4/2032 |
| Lisa Rarick, M.D. |
37 |
2 |
$ |
1,053.00 |
2/25/2020 |
2/25/2030 |
| |
26 |
— |
$ |
910.80 |
5/12/2020 |
5/12/2030 |
| |
48 |
— |
$ |
225.00 |
5/12/2021 |
5/12/2031 |
| |
— |
48 |
$ |
29.64 |
5/4/2022 |
5/4/2032 |
| Colin Rutherford |
— |
— |
$ |
7,855.20 |
3/8/2017 |
3/8/2027 |
| |
21 |
— |
$ |
1,312.20 |
3/12/2018 |
3/12/2028 |
| |
6 |
— |
$ |
1,258.20 |
5/8/2018 |
5/8/2028 |
| |
2 |
— |
$ |
378.00 |
7/31/2018 |
7/31/2028 |
| |
26 |
— |
$ |
1,089.00 |
6/5/2019 |
6/5/2029 |
| |
26 |
— |
$ |
910.80 |
5/12/2020 |
5/12/2030 |
| |
48 |
— |
$ |
225.00 |
5/12/2021 |
5/12/2031 |
| |
— |
48 |
$ |
29.64 |
5/4/2022 |
5/4/2032 |
| Gillian Greer, Ph.D.(1) |
13 |
— |
$ |
1,312.20 |
3/12/2018 |
3/12/2028 |
| |
6 |
— |
$ |
1,258.20 |
5/8/2018 |
5/8/2028 |
| |
26 |
— |
$ |
1,089.00 |
6/5/2019 |
6/5/2029 |
| |
26 |
— |
$ |
910.80 |
5/12/2020 |
5/12/2030 |
| |
48 |
— |
$ |
225.00 |
5/12/2021 |
5/12/2031 |
| |
— |
48 |
$ |
29.64 |
5/4/2022 |
5/4/2032 |
(1) Dr. Greer resigned
from the Board effective April 24, 2023.
Corporate Governance
Matters
Our Non-Employee Director Compensation Policy
In February 2022, our Compensation Committee amended the Non-Employee
Director Compensation Policy, as described below, which took effect April 1, 2022.
| • | Each non-employee director will
receive an annual cash retainer in the amount of $40,000 per year. |
| • | The Chairperson of the Board will
receive an additional annual cash retainer in the amount of $30,000 per year. |
| • | The Chairperson of the Audit Committee
will receive additional annual cash compensation in the amount of $20,000 per year for such chairperson’s service on the Audit Committee.
Each non-chairperson member of the Audit Committee will receive additional annual cash compensation in the amount of $10,000 per year
for such member’s service on the Audit Committee. |
| • | The Chairperson of the Compensation
Committee will receive additional annual cash compensation in the amount of $15,000 per year for such chairperson’s service
on the Compensation Committee. Each non-chairperson member of the Compensation Committee will receive additional annual cash compensation
in the amount of $7,500 per year for such member’s service on the Compensation Committee. |
| • |
The Chairperson of the Nominating and Corporate Governance Committee
will receive additional annual cash compensation in the amount of $10,000 per year for such chairperson’s service on the Nominating
and Corporate Governance Committee. Each non-chairperson member of the Nominating and Corporate Governance Committee will receive
additional annual cash compensation in the amount of $5,000 per year for such member’s service on the Nominating and Corporate
Governance Committee. |
| • |
Each non-employee
director will receive a stock option grant with an initial grant equal to 48 shares of the Company’s common stock upon a
director’s initial appointment or election to the Board, vesting quarterly over a three-year period and an annual stock
option grant equal 48 shares of the Company’s common stock on the date of each annual stockholder’s meeting thereafter,
fully vesting in one year from the date of grant. |
The February 2022 amendment of the Non-Employee
Director Compensation Policy, effective as of April 1, 2022, reduced the annual cash retainer for each non-employee director from $50,000
per year to $40,000 per year, the annual cash retainer for the chairperson of the Board from $40,000 to $30,000, and the annual cash compensation
for the chairperson of the Nominating and Corporate Governance Committee from $11,250 per year to $10,000 per year.
| 26 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Executive Officers
The following table sets forth certain
information regarding our executive officers and their respective ages as of August 8, 2023. All executive officers are at-will
employees.
| |
Saundra Pelletier |
| |
|
|
| |
 |
Chief Executive Officer,
Evofem Biosciences, Inc.
Age:
54 |
| |
|
|
| |
Background
• Since joining the Company in 2015, Ms. Pelletier has been
responsible for Evofem’s rapid growth and evolution, including the Company’s transition to the public market in January 2018
and multiple equity financing rounds that have raised in excess of $500 million.
• Under her leadership, the Company launched its first commercial
product in September 2020. Phexxi is the first and only hormone-free, on-demand, prescription vaginal gel approved in the United States
for the prevention of pregnancy.
• Ms. Pelletier brings more than two decades of broad executive
leadership experience to Evofem, including a strong track record driving multiple billion-dollar product launches, expanding commercial
capabilities in ex-U.S. markets and advocating for women’s health. Throughout her career, she has had oversight and accountability
for Sales, Marketing, Operations, Medical Affairs, Regulatory Affairs, Manufacturing, Customer Service, Business Development, and Strategic
Partnerships.
•
Ms. Pelletier was previously the founding CEO of Woman
Care Global (WCG), an international nonprofit organization focused on creating sustainable supply chains that delivered products to women
in more than 100 developing countries. Under her leadership, WCG secured approximately $68M in committed funding from major foundations
and USAID.
•
Earlier in her career, Ms. Pelletier served as Corporate
Vice President and Global Franchise Leader for G.D. Searle, where she managed a $250 million business unit focused on women’s healthcare.
She later moved to Women First Healthcare, where she served as Vice President of Pharmaceuticals and raised $40 million in capital.
• She is a Director of TRACON Pharmaceuticals, Inc., a clinical
stage biopharmaceutical company focused on novel targeted therapeutics for cancer, where she serves as the chair of the Governance/Nomination
Committee and is a member of the Audit Committee.
•
Ms. Pelletier is a published author, skilled moderator,
and coveted keynote speaker. She has appeared at TEDx San Diego, Harvard School of Public Health, Davos World Economic Forum, the Clinton
Global Initiative, MAKERS Conference, Women Deliver, University of Virginia’s Darden School of Business, University of Oregon’s
Lundquist School of Business and University of California, San Diego. She was named as a New Champion for Reproductive Health by the United
Nations Foundation, awarded the Athena San Diego’s Pinnacle Award for Life Sciences, named 2019 Businesswoman of the Year by the
San Diego Business Journal, and named to Inc. Magazine’s 2020 Female Founders 100 List. |
| |
Ivy Zhang |
| |
|
|
| |
 |
Chief Financial
Officer
Age:
45 |
| |
|
|
| |
Background
•
Ivy Zhang is a trusted leader who is dedicated to advancing
Evofem Biosciences’ mission of addressing the unmet sexual and reproductive health needs of women. She has more than 14 years of
financial and accounting experience spanning diverse industries, including pharmaceuticals and medical devices, and leads the Company’s
finance organization and financial activities including financial planning and analysis, accounting, external audit, tax, controllership,
and treasury functions.
•
Ms. Zhang re- joined Evofem as Chief Financial Officer
and Secretary in April 2023 from HUYABIO International, where she served as Vice President Controller.
•
Previously Ms. Zhang held increasingly senior finance roles
at Evofem from March 2018 until November 2022. She served as Director of SEC Reporting and SOX Compliance until her promotion to Controller
in April 2020.
•
Earlier in her career, she served in finance positions
for approximately seven years at Ernst & Young LLP, and for more than two and a half years at SeaSpine Holdings Corporation (a public
medical and therapeutic technology and device company).
•
Ms. Zhang holds a Master’s in Assurance from Virginia
Tech and a Master’s in Economics from the University of Victoria, Canada. She is a certified public accountant (CPA) in the state
of California. |
| 28 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Executive Compensation Matters
| |
|
|
|
|
|
PROPOSAL
2 |
Non-Binding Advisory Vote to Approve the Compensation of Our Named Executive Officers |
|
| |
Section 14A of the Exchange Act requires
that we provide our stockholders with the opportunity to vote to approve, on a non-binding, advisory basis, not less frequently than once
every three years, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the compensation
disclosure rules of the SEC.
Our compensation programs are designed
to effectively align our executives’ interests with the interests of our stockholders by focusing on long-term equity incentives
that correlate with the growth of sustainable long-term value for our stockholders. Stockholders are urged to read the sections titled
“Base Salary,” “Equity Incentive Compensation” and “Summary Compensation Table” in this proxy statement,
which discuss how our executive compensation policies and practices implement our compensation philosophy and contain tabular information
and narrative discussion about the compensation of our named executive officers. The Compensation Committee believes that the objectives
of our executive compensation program, as they relate to our named executive officers, are appropriate for a company of our size and stage
of development and that our compensation policies and practices help meet those objectives. In addition, the Compensation Committee believes
that our executive compensation program, as it relates to our named executive officers, achieves an appropriate balance between fixed
compensation and variable incentive compensation. Our Board and our Compensation Committee believe that our policies and practices are
effective in implementing our compensation philosophy and in achieving our compensation program goal. Accordingly, we are asking our stockholders
to approve the compensation of our named executive officers.
The vote on this resolution is not intended
to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers, as described
in this proxy statement in accordance with the compensation disclosure rules of the SEC.
Accordingly, we are asking our stockholders
to vote on the following resolution at the Annual Meeting:
RESOLVED, that the stockholders hereby
approve, on a non-binding advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in the Company’s
proxy statement for the 2023 Annual Meeting of Stockholders, pursuant to the compensation disclosure rules of the SEC, including the compensation
tables and the narrative discussions that accompany the compensation tables.
The approval of this advisory
non-binding proposal requires the affirmative vote of a majority of the voting power of the shares of our common stock and Series
E-1 Convertible Preferred Shares, voting together as a single class, present in person or by proxy at the Annual Meeting and
entitled to vote thereon. Abstentions and broker non-votes will have no effect on this proposal.
The vote is advisory, which means that
the vote is not binding on the Company, our Board or our Compensation Committee. To the extent there is any significant vote against our
named executive officer compensation as disclosed in this proxy statement, our Compensation Committee will evaluate whether any actions
are necessary to address the concerns of stockholders. |
|
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|
Recommendation |
|
| |
|
The Board recommends a vote for the approval, on a non-binding advisory basis, of the compensation of the company’s named executive officers, as disclosed in this proxy statement. |
|
Executive
Compensation Matters
Executive Compensation
Compensation Overview
We are a “smaller reporting company”
as such term is defined in Rule 405 of the Securities Act of 1933, as amended (the Securities Act), and Item 10 of Regulation S-K. Accordingly,
and in accordance with relevant SEC rules and guidance, we have elected, with respect to the disclosures required by Item 402 (Executive
Compensation) of Regulation S-K, to comply with the disclosure requirements applicable to smaller reporting companies. We are providing
this “Compensation Overview” section in order to aid our stockholders’ understanding of our compensation programs and
policies for our executive officers as well as the Compensation Committee’s role in the design and administration of these programs
and policies in making specific compensation decisions for our executive officers, including our “named executive officers.”
Compensation Program Administration and Process
Roles and Compensation-Setting Process
Our executive compensation program is administered
by the Compensation Committee, with guidance and input from each of our Chief Executive Officer and our compensation consultant, Anderson
Pay Advisors LLC (Anderson).
Historically, the Compensation Committee
has made most of the significant adjustments to annual compensation for the next fiscal year, determined bonus and equity awards and established
new performance objectives for the next fiscal year at one or more meetings held during the fourth quarter of the year. However, the Compensation
Committee also considers matters related to individual compensation, such as compensation for new executive hires, adjustments to the
compensation of existing executives, as well as high-level strategic issues, such as the efficacy of the Company’s compensation
strategy, potential modifications to that strategy and new trends, plans or approaches to compensation, at various meetings throughout
the year.
Generally, the Compensation Committee’s
process comprises two related elements: (i) the determination of specific compensation packages for our executive officers, and (ii) the
establishment of performance objectives for the next year. For executives other than the Chief Executive Officer, the Compensation Committee
solicits and considers evaluations and recommendations submitted by the Chief Executive Officer for the Compensation Committee’s
review and approval. In the case of the Chief Executive Officer, the evaluation of her performance is conducted by the Compensation Committee
in consultation with the Board, and the Compensation Committee recommends to the Board for approval any adjustments to her compensation
as well as equity awards to be granted. Also, in each case, the Compensation Committee obtains and considers input from Anderson, including
benchmarking data discussed below. Ms. Pelletier plays no role in determining her own salary, annual cash performance bonus or equity
compensation.
Our Compensation Committee has the sole
authority and responsibility to review and determine, or recommend to the full Board for determination, the compensation package of our
Chief Executive Officer (Saundra Pelletier) and each of our other named executive officers (currently Ivy Zhang). Our Compensation Committee
is composed entirely of independent directors who have never served as officers of the Company and operates under a written charter adopted
and reviewed annually by our Board.
| 30 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Executive
Compensation Matters
Role of Independent Compensation Consultant;
Benchmarking
The Compensation Committee has the authority
to directly retain the services of independent consultants and other experts to assist in fulfilling its responsibilities. The Compensation
Committee has engaged Anderson to review our executive compensation programs and to assess our executive officers’ base salaries,
target and actual total cash bonuses, long-term incentives and total compensation from a competitive standpoint. Anderson also assists
the Compensation Committee in benchmarking our director compensation program and practices against those of our peers. For such services,
we paid Anderson approximately $20,000 in 2022 and $40,000 in 2021. Anderson performs services solely on behalf of the Compensation Committee
and has no relationship with the Company or management relating to compensation or other human resources related services except as it
may relate to performing such services. The Compensation Committee has assessed the independence of Anderson pursuant to SEC rules and
the corporate governance rules of Nasdaq and concluded that no conflict of interest exists that would prevent Anderson from independently
advising the Compensation Committee. Anderson also assisted the Compensation Committee in defining the appropriate group of peer companies
for analysis of our executive compensation and practices and in benchmarking our executive compensation program against the peer group.
Roles of Management in Determining Executive
Compensation
The Compensation Committee periodically
meets with our Chief Executive Officer and/or other executive officers to obtain recommendations with respect to compensation programs
for executives and other employees. Our Chief Executive Officer makes recommendations to the Compensation Committee on the base salaries,
target cash bonuses and performance measures, and equity compensation for our executives and other key employees. The Compensation Committee
considers, but is not bound to accept, management’s recommendations with respect to executive compensation. Our Chief Executive
Officer and certain other executives attend most of the Compensation Committee’s meetings, but the Compensation Committee also holds
private sessions outside the presence of members of management and non-independent directors. The Compensation Committee discusses our
Chief Executive Officer’s compensation package with her but makes decisions with respect to her compensation without her present.
The Compensation Committee has delegated to management the authority to make certain decisions regarding compensation for employees other
than executive officers. The Compensation Committee has not delegated any of its authority with respect to the compensation of the named
executive officers.
Stockholder Engagement and Use of Stockholder
Feedback
The Compensation Committee informally engages
with the Company’s stockholders to gain feedback on our stockholders’ concerns and internal guidelines regarding executive
compensation. The Compensation Committee then seeks to align those interests with the Company’s compensation policies.
Use of Compensation Peer Group Data
Each year since 2018, the Compensation
Committee has engaged Anderson to provide compensation market data and recommendations to be used to establish compensation levels and
plans for our executive officers for the following year.
For the 2021 performance cycle, the Compensation
Committee again engaged Anderson to conduct a competitive review of executive compensation as compared to our peer group. This review
and analysis revealed that annual cash salary and cash bonuses fell short of the target goal of the 75th percentile of our peer group.
Nevertheless, for 2022, after consideration of stock performance and based in part on direct feedback from our stockholders, the Compensation
Committee determined to lower the target pay positioning for both cash and equity from the market 75th percentile to the market 50th percentile
for on-target performance. The equity grants in 2022, from a value perspective, are an example of the shift. The value of those grants
and overall total direct compensation delivered to the executive team fell well below prior levels and we anticipate falling below the
median as well.
For 2023 our target goal for annual cash
salary and annual cash bonus of our named executive officers is $1.6 million, a significant reduction from the prior year. This reflects
an aggregate 36% reduction in the annual base salary for our Chief Executive Officer, a 55% reduction in total compensation for the Chief
Financial Officer position, the decision not to fill the position of General Counsel, and elimination of the Chief Commercial Officer
role.
Executive
Compensation Matters
Our Peer Group
In 2021, the Compensation Committee also
worked with Anderson to review our peer group. For the 2021 performance cycle, the review resulted in reducing peer selection criteria
with regard to market capitalization. The criteria were lowered from targeting peers with between $100M to $750M in market capitalization
to targeting peers with less than $500M in market capitalization. Each year, the Compensation Committee reviews and approves our selected
peer group. The committee considers several factors in development and refinement of the peer group. Key factors include:
| • |
Industry (SIC): Pharmaceutical preparation (2834) |
| • |
Stage of business: Early-stage commercialization |
| • |
Market capitalization: Target range of under $500M |
| • |
Revenue: Target range less than $100M |
| • |
Headcount: Target range less than 250 employees |
The Compensation Committee will continue
to welcome constructive feedback from stockholders, stockholder advisory groups and other interested parties in consideration of our processes
and, in particular, our benchmark peers.
During 2022, our peer group consisted of the following 24 companies:
| |
|
|
|
|
| |
AcelRx Pharmaceuticals |
Flexion Therapeutics |
Omeros |
Spectrum Pharmaceuticals |
| |
Agile Therapeutics |
Kala Pharmaceuticals |
Paratek Pharmaceuticals |
TherapeuticsMD |
| |
Chimerix |
La Jolla Pharmaceuticals |
Puma Biotechnology, Inc. |
Trevena |
| |
Concert Pharmaceuticals |
Lexicon Pharmaceuticals |
Recro Pharma, Inc. |
|
| |
Cymabay Therapeutics |
MEI Pharma |
Rigel Pharmaceuticals |
|
| |
Eagle Pharmaceuticals |
ObsEva |
scPharmaceuticals |
|
| |
Eiger BioPharmaceuticals Inc. |
Otonomy |
Sesen Bio |
|
| |
|
|
|
|
For 2023, our peer group consists of the following 22 companies:
| |
|
|
|
|
| |
Agile Therapeutics |
Eiger BioPharmaceuticals Inc. |
Otonomy |
Societal CDMO |
| |
Carisma Therapeutics |
Kala Pharmaceuticals |
Omeros |
Spectrum Pharmaceuticals |
| |
Chimerix |
La Jolla Pharmaceuticals |
Paratek Pharmaceuticals |
Trevena |
| |
Cymabay Therapeutics |
Lexicon Pharmaceuticals |
Puma Biotechnology, Inc. |
Veru |
| |
Dare Bioscience |
MEI Pharma |
Rigel Pharmaceuticals |
|
| |
Eagle Pharmaceuticals |
ObsEva |
scPharmaceuticals |
|
| |
|
|
|
|
We believe that our selected peer group
provides useful information to help us establish competitive compensation practices and levels of compensation that allow us to attract,
retain and motivate a talented executive team and, at the same time, aligns the interests of our executives with those of our stockholders.
The executive employment market in our industry in the United States is very competitive because there are many high-growth life sciences
companies in our region, many of which are larger and more established than we are. We believe our executive compensation must be competitive
within such peer groups, yet fully aligned with our current stage of development and our responsibilities to stockholders.
| 32 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Executive
Compensation Matters
Compensation Objectives and Philosophy
The objective of our executive compensation
program is to attract, retain and motivate talented executives who are critical for our continued growth and success and to align the
interests of these executives with those of our stockholders so that we can build long-term stockholder value. To achieve this objective,
besides annual base salaries, our executive compensation program utilizes a combination of annual incentives through structured cash bonuses
based on pre-defined goals as well as long-term incentives through equity-based compensation. In establishing overall executive compensation
levels, our Compensation Committee considers a number of criteria, including (i) the applicable executive’s scope of responsibilities,
(ii) the strategic importance of the applicable executive’s role, (iii) the Company’s stage of development, (iv) relevant
peer group data, (v) attainment of individual and overall company performance objectives, (vi) recruitment and/or retention concerns,
and (vii) the results of the advisory vote of the stockholders on the “say-on-pay” proposal at the prior years’ annual
meeting of the stockholders. Our Compensation Committee believes that substantial portions of executive compensation should be linked
to the overall performance of our Company, and that the contribution of individuals over the course of the relevant period to the goal
of building a profitable business and stockholder value should also be considered in the determination of each executive’s compensation.
Elements of Compensation
Our executive compensation program consists of the following forms
of compensation:
| • |
Annual Performance Cash Bonus |
| • |
Long-term Equity Incentives |
| • |
Employee Stock Purchase Plan |
| • |
Employee Benefit Program |
Base Salary
Annual base salaries compensate our executive
officers for fulfilling the requirements of their respective positions and provide them with a level of cash income predictability and
stability with respect to a portion of their total compensation. We believe that the level of an executive officer’s base salary
should reflect the executive’s performance, experience and breadth of responsibilities, our understanding of salaries for similar
positions within our industry and peer group and any other factors relevant to that particular job.
Base salaries are typically negotiated
at the outset of an executive’s employment. Salary levels are considered annually as part of our performance review process, but
also in cases including promotion or other change in the job responsibilities of an executive officer. For named executive officers, initial
base salaries generally are established in connection with negotiation of an offer of employment and an employment agreement. Increases
in base salary have several elements. In addition to promotion and increased responsibilities, merit and Company-wide general increases
are also taken into consideration. Salaries of our named executive officers for fiscal year 2022 and certain prior years are also reported
in the Summary Compensation Table included under the heading “Summary Compensation Table” on page 39 of this Proxy Statement.
Executive
Compensation Matters
The following table shows the base salary for each of our current
named executive officers for 2022 and as approved for fiscal 2023:
| Name |
2022 ($) |
2023 ($) |
Change from Prior Year |
| Saundra Pelletier |
812,083 |
519,733(1) |
(36)% |
| Ivy Zhang |
—(2) |
$ 410,000 |
n/a |
| |
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|
|
(1)Ms. Pelletier’s annual base salary
was reduced by 20% in February 2023 and another 20% in March 2023, resulting in a total reduction of 36% as compared to her 2022 salary
cited in the above table. The Company may review, change or end the salary reduction at its discretion.
(2)Ms. Zhang was appointed
Chief Financial Officer and Secretary on April 13, 2023.
Annual Performance Cash Bonuses
Each year, the Compensation Committee recommends,
and the Board approves and establishes, the target cash incentive opportunity for each executive officer assuming full achievement of
certain significant corporate goals that are also reviewed and approved by the Board. The following table shows the possible cash bonus
incentive for each of our current named executive officers for fiscal 2022 and 2021, (each expressed as a percentage of annual base salary)
and in actual dollar awarded:
| Name and Principal Position |
Year Ended December 31st |
Cash Incentive % of Annual
Salary Actually Earned |
Cash Incentive Bonus
Actually Earned ($) |
Year Over Year Reduction |
| Saundra Pelletier, Chief Executive Officer |
2022 |
25%(1) |
$ 203,021(1) |
(49)% |
| 2021 |
55% |
$ 401,981(2) |
| Ivy Zhang, Chief Financial Officer and Secretary (3) |
2022 |
n/a |
n/a |
n/a |
| 2021 |
n/a |
n/a |
| |
|
|
|
|
(1) Due
to the Company’s financial constraints Ms. Pelletier’s cash incentive bonus for fiscal 2022 has yet to be determined and approved by the
Compensation Committee. Based on the achievement of corporate goals for fiscal 2022, it will be a maximum of 25% of Ms. Pelletier’s annual
salary, representing a reduction of 49% or greater from the earned cash incentive bonus for fiscal 2021.
(2)
Ms. Pelletier’s earned cash incentive bonus for fiscal 2021 was cancelled by the Compensation Committee due to the Company’s
financial constraints. Therefore, she was paid $0.00.
(3) Ms.
Zhang was appointed Chief Financial Officer and Secretary on April 13, 2023.
At the end of the fiscal year, the Compensation
Committee reviews and approves the level of the Company’s achievement against the applicable corporate goals. In reviewing the Company’s
level of achievement against the applicable corporate goals for fiscal 2022, the Compensation Committee determined that the Company executed
on some but not all of its corporate objectives, and as a result achieved some, but not all, of its corporate goals. As a result, the
Compensation Committee approved the recommended incentive cash bonus funding levels in an amount less than the possible target bonus percentages
as set forth in the table above.
As illustrated in the above table, the
2022 compensation program, consistent with prior years, was designed to reward achievement of the goals that build stockholder value.
When certain goals were not achieved, the incentive bonus payouts were reduced. In 2021, approximately half of these weighted goals were
achieved, resulting in only partial payout of the potential cash incentive bonus. At the time of the 2021 Proxy/Say on Pay vote, the results
of the 2021 program were not yet complete so stockholders could not yet see the alignment of executive compensation with Company performance.
The above table shows this program in practice highlighted by a reduction of at least 49% in CEO cash bonus in 2022 compared with 2021.
We have likewise designed our 2023 cash incentive bonus program to reward achievement of key drivers of stockholder value.
The corporate goals established by the
Compensation Committee for 2022 related to achieving certain level of net revenue, identifying and commencing qualification of a secondary
third-party contract manufacturing organization that can serve our manufacturing needs in the United States and the rest of the world,
reporting top-line data from the Phase 3 clinical trial (EVOGUARD) of EVO100 for the prevention of chlamydia infection and gonorrhea infection
in women in the second half of 2022, and entering into a license and/or distribution agreement with a third party for sale of Phexxi outside
the United States.
| 34 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Executive
Compensation Matters
For 2023, the Compensation Committee has
approved the following goals as those which must be achieved in order for the named executive officers to fully realize their potential
annual cash bonus amounts.
| • | Achieve
net sales of at least $20.0 million in 2023; |
| • | Securing
shareholder approval to effectuate a reverse split of our common stock (achieved in March
2023); |
| • | Achieving
EBITDA break-even on a quarterly basis by the end of this year; and |
| • | Execute
an accretive transaction that improves both the pro-forma and cash runway for Evofem, such
as adding additional products to the portfolio, merger, or entering
into a license and/or distribution agreement with a third party for sale of Phexxi outside
the United States. |
Following the determination of corporate
achievement, the Compensation Committee will also consider the performance of each named executive officer in arriving at the individual
awards, if any, to be made, provided that no award will exceed the target percentage of annual base salary for annual bonus. The Compensation
Committee believes this flexibility is an important tool to aid in the retention of key talent, reward significant achievement by individual
executives, motivate executives and recognize management decision-making focused on generating long-term value for stockholders over short-term
achievement of the corporate objectives. The total cash bonus amounts for fiscal 2022 and 2021 for our named executive officers are reported
in the Summary Compensation Table included under the heading “Summary Compensation Table” on page 39 of this Proxy Statement.
Discretionary Bonuses
From time to time, we have utilized discretionary
retention or other bonus awards as a compensation tool to reward extraordinary performance by executives in a given year and to retain
key executives. In addition, we believe that signing bonuses are consistent with our overall executive compensation philosophy to achieve
our recruiting objectives, so we may award certain signing bonuses to new executives in the future.
Long-term Equity Incentive Awards
We grant stock options and restricted stock
to our employees within a competitive range of the market to complement cash salaries and cash incentives, incentivize new hires to achieve
our corporate and strategic goals, and align executive compensation with the long-term interests of our stockholders and stock value.
We historically provided stock option grants to our named executive officers upon their initial hiring, as negotiated in their employment
agreements or offer letters. The Compensation Committee has the discretion to grant stock option awards and restricted stock awards to
promote high performance and achievement of our corporate objectives by our executives at any time of the year. The Compensation Committee
does not currently have a policy for the automatic awarding of equity awards to the named executive officers or our other employees, nor
do we have any formal plan that requires us to award equity or equity-based compensation to any executive on a year-to-year basis. The
timing of our typical equity awards is determined in advance. In general, we do not anticipate option grants on dates other than the scheduled
meetings of the Compensation Committee. The grant date is established when the Compensation Committee approves the grant and all key terms
have been determined.
In granting these awards, the Compensation
Committee may establish any conditions or restrictions it deems appropriate in accordance with the Amended and Restated 2014 Plan or the
2018 Inducement Equity Incentive Plan, as the case may be. Our Chief Executive Officer typically provides recommendations to the Compensation
Committee for equity grants to the executive officers, taking into account each executive’s performance, achievements, and other
criteria deemed relevant. The Compensation Committee reviews the proposed grants but reserves the right to reject or modify such recommendations.
In addition, our Chief Executive Officer has limited discretionary authority to grant stock options under the Amended and Restated 2014
Plan to our non-executive employees, subject to certain volume limitations.
We size equity grants based on market data
that expresses the awards as a percent of common shares outstanding. This sizing approach is helpful to ensure that the dilutive effects
of the grants are reasonable. The exercise price of the stock options will equal the closing price of our common stock published by OTCQB
on the date of the grant and the term of the options will be 10 years from the date of the grant. The Compensation Committee has taken
a two-tiered approach to vesting in order to align executive compensation with long-term stockholder value. The first consists of longer
term, time-based vesting for certain awards, and the second relies on performance-based vesting for certain awards that are tied to critical,
more immediate goals fundamental to the Company’s mission to achieve commercial success.
Executive
Compensation Matters
The Compensation Committee has resolved
that, absent unusual circumstances, stock options be granted to new hires with a vesting term of four years, with 25% vesting at the first
anniversary of the date of grant and the remaining amount vesting in 36 equal monthly installments thereafter. For existing employees,
the Compensation Committee has resolved that, absent unusual circumstances, time-based vesting stock options be granted with a vesting
term of four years, vesting in 48 equal monthly installments. For restricted stock generally, vesting is based on achievement of critical
performance goals. Further, the Compensation Committee selects these performance goals with a view to aligning executives’ performance
with long-term stockholder value.
For 2023, no performance based restricted stock grants have
been considered.
Equity awards generally do not accelerate
upon a change of control; however, under each of the Amended and Restated 2014 Plan and the 2018 Inducement Equity Incentive Plan, our
Board has discretion to accelerate vesting upon a change of control. The Compensation Committee also has sole discretion with respect
to the tax treatment for equity awards and may decide to (1) facilitate the sale of a sufficient number of the granted shares to cover
taxes, (2) require that shares having a value equal to the tax burden be withheld by the Company with the Company paying the tax in cash
to the relevant taxing authority, or (3) require employees to be responsible for their own taxes. The value of any shares used to cover
taxes will be calculated based on the closing stock price of the shares on the date of vesting of the shares and will be paid in proportion
to the vesting schedule of the shares. The equity awards granted to our named executive officers for fiscal 2022 and certain prior years
are reported in the Summary Compensation Table included under the heading “Summary Compensation Table” on page 39 of this
Proxy Statement.
Equity Incentive Compensation
Historically, we have generally granted
stock options to our employees, including our named executive officers, in connection with their initial employment with us. We also have
historically granted stock options on an annual basis as part of annual performance reviews of our employees. From time to time, we have
also granted, and intend to continue to grant, restricted stock awards to our executive management team, including our named executive
officers, and certain non-executive employees, which typically vest in accordance with the Company’s achievement of certain performance
goals in the year.
We believe that the performance-based vesting
of restricted stock grants illustrates the alignment between overall executive compensation and building long-term stockholder value.
For example, when important goals such as FDA approval of Phexxi were achieved in 2020, a portion of these restricted stock grants vested.
However, in 2021, when performance goals were not achieved, and our stock price suffered as a result, a large portion of the 2021 restricted
stock grants to our executive officers were forfeited. Failure to achieve key Company goals resulted in a reduction in performance-based
equity compensation to our current named executive officer of approximately 90%.
The following table shows the values of
performance based restricted stock awards ultimately vested against the goals set by the Compensation Committee to our current named executive
officers in 2021 and 2022, which were determined by the closing price of the Company’s common stock on the vesting dates.
| Name and Principal Position |
Year Ended December 31st |
Value of Performance Based
Restricted Stock Awards |
Year Over Year Reduction |
| Saundra Pelletier, Chief Executive Officer |
2022 |
$ |
— |
100% |
| 2021 |
$ |
171,400 |
| Ivy Zhang, Chief Financial Officer |
2022 |
$ |
— |
n/a |
| 2021 |
$ |
— |
On February 3, 2021, the Company granted
Ms. Pelletier options to purchase 373 shares of our common stock with an exercise price of $319.275 per share, which vest in a
series of forty-eight (48) successive equal monthly installments upon completion of each additional month of service for the Company
measured from the vesting commencement date of February 3, 2021. Additionally, on February 3, 2021, the Company granted Ms. Pelletier
266 shares of common stock, issued as restricted stock awards. Of these restricted stock awards, 106 shares vested during the year upon
achievement of certain performance milestones, and the Company withheld 56 shares of common stock to satisfy statutory tax withholding
requirements upon vesting of these restricted stock awards in 2021.
| 36 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Executive
Compensation Matters
On February 18, 2022, the Company
granted Ms. Pelletier options to purchase 400 shares of our common stock with an exercise price of $734.625 per share, which vest
in a series of forty-eight (48) successive equal monthly installments upon completion of each additional month of service for the Company
measured from the vesting commencement date of February 18, 2022. Additionally, on February 18, 2022, the Company granted Ms. Pelletier
400 shares of common stock issued as restricted stock awards, which are subject to vesting upon the verification by our Compensation
Committee of the achievement of certain to the Company’s achievement of certain performance milestones in 2022. On December 31,
2022, these restricted stock awards were cancelled due to forfeiture under these vesting provisions.
Our Chief Executive Officer’s Compensation
As set forth above, one of the key drivers
in the Compensation Committee’s determination of the compensation of our Chief Executive Officer is company performance.
The following
table shows the total compensation of our Chief Executive Officer for each of 2021 and 2022, in each case, excluding the value of options
(all of which are out-of-the money as of the date hereof). As seen in the table, after excluding the value of out-of-the-money options
and assuming the maximum potential cash incentive bonus for 2022 (see footnote 1 for details),
our Chief Executive Officer’s compensation decreased by at least 18% in 2022 as compared to 2021.
| Name |
Year Ended December 31st |
Salary ($) |
Bonus ($) |
Restricted
Stock Awards ($) |
All Other
Compensation ($) |
Total ($) |
Reduction
Year over Year |
| Saundra Pelletier |
2022 |
$ 812,083 |
$ 203,021(1) |
$ — |
$ 15,716 |
$ 827,799 |
(18)% |
| |
2021 |
$ 812,083 |
0(2) |
$ 171,400 |
$ 20,521 |
$ 1,004,004 |
|
(1)
Due to the Company’s financial constraints, Ms. Pelletier’s cash incentive bonus for fiscal 2022 has yet to be determined
and approved by the Compensation Committee. Based on the achievement of corporate goals for fiscal 2022, it will be a maximum of 25%
of Ms. Pelletier’s annual salary and thus no greater than $203,021.
(2) Ms.
Pelletier’s accrued cash incentive bonus for fiscal 2021 was cancelled by the Compensation Committee due to the Company’s financial constraints.
(3) On
February 18, 2022, the Company granted Ms. Pelletier 400 shares of common stock issued as Restricted Stock Awards (RSAs), which are subject
to vesting upon the verification by our Compensation Committee of the achievement of certain to the Company’s achievement of certain
performance milestones in 2022. On December 31, 2022, these RSAs were cancelled due to forfeiture under these vesting provisions.
Employee Stock Purchase Plan
Until October 2022, we maintained our 2019
Employee Stock Purchase Plan (the 2019 ESPP), which was intended to qualify as an “employee stock purchase plan” under Section
423 of the Internal Revenue Code, to promote stock ownership by employees. Under the 2019 ESPP, eligible employees were able to acquire
shares of our common stock by accumulating funds through payroll deductions. Eligible employees were able to select a rate of payroll
deduction between 1% and 15% of their eligible compensation. The 2019 ESPP was implemented through a series of six-month offering periods.
The purchase price for shares of our common
stock under the 2019 ESPP were 85% of the lower of the fair market value of our common stock on (i) the first day of each offering period
and (ii) the purchase date for each purchase interval. Purchases under the 2019 ESPP were subject to certain limitations, including a
maximum number of shares that each participant may purchase on each purchase date of the number of shares obtained by dividing $25,000
by the then current market price; a maximum number of shares that may be purchased in total by all participants on each purchase date
equal to the then remaining available shares under the 2019 ESPP; and the $25,000 annual limit under the Internal Revenue Code. In addition,
under no circumstances would purchase rights have been granted under the 2019 ESPP to any eligible employee if such individual would,
immediately after the grant, own or hold outstanding options or other rights to purchase, stock possessing 5% or more of the total combined
voting power or value of all classes of stock of our company or any parent or subsidiary.
In October 2022, the Board terminated the
offering period ending December 15, 2022, refunded all employee contributions, and suspended future offering periods. The Board may in
future reinstitute the ESPP if and when our common stock resumes trading on a national stock exchange.
Executive
Compensation Matters
Benefits Plans
We also provide group life insurance, health,
vision and dental care insurance to all employees, including the executive officers. These benefits do not discriminate in scope, terms
or operation in favor of the named executive officers. All such benefits terminate at the time each individual is no longer employed with
the Company or as otherwise provided in the applicable employment agreement. All of our named executive officers are eligible to participate
in all of our employee benefit plans, in each case on the same basis as other employees. We maintain a 401(k) defined contribution plan,
which is our primary retirement benefit for employees, including executives. The Company makes a safe-harbor contribution of 3% of each
employee’s gross earnings, including executives, subject to Internal Revenue Service limitations. Although permitted under the plan,
we have not matched employee contributions to the 401(k) plan. We do not provide our executive officers with any type of defined benefit
retirement benefit or the opportunity to defer compensation pursuant to a non-qualified deferred compensation plan. We generally do not
offer our named executive officers any material compensation in the form of perquisites, but any perquisites provided to our named executive
officers and described in the footnote to the Summary Compensation Table included in the Summary Compensation Table included under the
heading “Summary Compensation Table” on page 39 of this Proxy Statement are offered to encourage the long-term retention of
our executives.
Other Compensation Practices
Limits on Hedging and Pledging
As part of our insider trading policy,
all employees, including named executive officers and members of our Board, are prohibited from engaging in certain types of hedging transactions
involving our securities, specifically short sales and purchases or sales of puts, calls or other derivative securities. Our insider trading
policy also prohibits certain types of pledges of our securities by all employees, including executive officers, and members of our Board,
specifically purchases of our securities on margin, borrowing against our securities held in a margin account or pledging our securities
as collateral for a loan, with an exception for transactions with the pre-approval of our Chief Compliance Officer.
Clawback Policy
In 2020, the Board resolved to adopt a
recoupment or “clawback” policy for annual cash incentive awards, long-term incentive awards (including stock options and
restricted stock) and any other incentive awards paid to executive officers under certain circumstances. In February of 2021, the Compensation
Committee formally adopted such a clawback policy. Our clawback policy provides that in the event the Company determines it must restate
its financial results as reported in a Form 10-K, Form 10-Q or other report filed with the Securities and Exchange Commission to correct
an accounting error due to material noncompliance with any financial reporting requirement under the U. S. federal securities laws (a
Restatement), the Company will seek to recover, at the direction of the Compensation Committee after it has reviewed the facts and circumstances
that led to the requirement for the Restatement and the costs and benefits of seeking recovery, incentive compensation (cash and equity-based)
awarded or paid within one year following the filing of the financial report giving rise to the Restatement to a covered officer whose
intentional misconduct caused or contributed to the need for the Restatement for a fiscal period if a lower award or payment would have
been made to such covered officer based upon the restated financial results. The Committee will determine in its discretion the amount,
if any, the Company will seek to recover from such covered officer.
| 38 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Executive
Compensation Matters
Summary Compensation Table
The following table summarizes information concerning the compensation
awarded to, earned by, or paid for services rendered in all capacities by our named executive officers during the years ended
December 31, 2022 and 2021:
| Name and Principal Position |
Year Ended
December 31, |
Salary
($) |
|
Bonus(1)
($) |
|
Restricted
Stock Awards(2)
($) |
|
Option
Awards(2)
($) |
|
All Other
Compensation(3)
($) |
|
Total
($) |
Saundra Pelletier
Chief Executive Officer |
2022 |
812,083 |
|
203,021 |
(4) |
— |
(5) |
293,850 |
(6) |
$15,716 |
(7) |
1,324,670 |
| 2021 |
812,083 |
|
— |
(8) |
171,400 |
(9) |
1,787,940 |
(10) |
$20,521 |
(11) |
2,791,944 |
Justin J. File
Chief Financial Officer |
2022 |
589,240 |
|
— |
(12) |
— |
(13) |
176,310 |
(14) |
1,903 |
|
767,453 |
| 2021 |
589,240 |
|
— |
(15) |
68,560 |
(16) |
383,130 |
(17) |
1,242 |
|
1,042,172 |
Russ Barrans (18)
Chief Commercial Officer |
2022 |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
| 2021 |
471,960 |
(19) |
— |
(20) |
117,330 |
(21) |
383,130 |
(22) |
67,030 |
(23) |
1,039,450 |
Alexander A. Fitzpatrick(24)
General Counsel |
2022 |
409,865 |
(25) |
— |
|
— |
|
117,540 |
(26) |
10,233 |
(27) |
537,638 |
| 2021 |
469,310 |
|
— |
(28) |
68,560 |
(29) |
383,130 |
(30) |
8,740 |
(31) |
929,740 |
Katherine Atkinson (32)
Chief Commercial Officer |
2022 |
450,000 |
|
— |
|
— |
(33) |
39,180 |
(34) |
3,558 |
|
492,738 |
| 2021 |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
| | |
| (1) | Consists of an earned cash incentive
bonus as approved by the Compensation Committee in respect of the named executive officer’s performance and the Company’s performance
during each respective fiscal year. |
| (2) | Amounts listed in this column represent
the aggregate fair value on the date of vesting of the Company’s equity awards granted to the named executive officers determined
in accordance with Financial Accounting Standards Board (FASB) ASC Topic 718, Compensation-Stock Compensation (FASB ASC Topic 718).
See Note 11 to our Consolidated Financial Statements included in our Annual Report for details as to the assumptions used to determine
the fair value of these awards. |
| (3) | All Other Compensation primarily
includes premiums paid for group term life insurance, except for Ms. Pelletier, Mr. Barrans, and Mr. Fitzpatrick as discussed in notes
(7) and (11), (23), and (27) and (31), respectively, below. |
| (4) | Due to the Company’s financial constraints,
Ms. Pelletier’s cash incentive bonus for fiscal 2022 has yet to be determined and approved by the Compensation Committee. Based on the
achievement of corporate goals for fiscal 2022, it will be a maximum of 25% of Ms. Pelletier’s annual salary and thus no greater than
$203,021. |
| (5) | On February 18, 2022, the Company
granted Ms. Pelletier 400 shares of common stock issued as Restricted Stock Awards (RSAs), which are subject to vesting upon the verification
by our Compensation Committee of the achievement of certain to the Company’s achievement of certain performance milestones in 2022.
On December 31, 2022, these RSAs were cancelled due to forfeiture under these vesting provisions. |
| (6) | On February 18, 2022, the Company
granted Ms. Pelletier 400 stock options which vest in a series of forty-eight (48) successive equal monthly installments upon completion
of each additional month of service for the Company measured from the vesting commencement date of February 18, 2022. |
| (7) | In
2022, All Other Compensation for Ms. Pelletier includes (i) a $1,903 premium paid for group
term life insurance and (ii) $13,812 in fringe benefits paid on behalf of Ms.
Pelletier. |
| (8) | Ms. Pelletier’s accrued cash incentive
bonus for fiscal 2021 was cancelled by the Compensation Committee due to the Company’s financial constraints. |
| (9) | On February 3, 2021, the Company
granted Ms. Pelletier 266 shares of common stock issued as Restricted Stock Awards (RSAs), of which 106 vested in connection
with the Company’s achievement of certain performance milestones in 2021. Of these RSAs, the Company withheld 56 shares of
common stock to satisfy statutory tax withholding requirements upon vesting of such RSAs during 2021. |
| (10) | On February 3, 2021, the Company
granted Ms. Pelletier 373 stock options, which vest in a series of forty-eight (48) successive equal monthly installments upon completion
of each additional month of service for the Company measured from the vesting commencement date of February 3, 2021. |
| (11) | In 2021, All Other Compensation
for Ms. Pelletier includes (i) a $1,242 premium paid for group term life insurance and (ii) $19,279 in fringe benefits paid on behalf of
Ms. Pelletier. |
| (12) | Mr. File resigned from his position
as Chief Financial Officer effective April 3, 2023, as of which date the Compensation Committee had yet to determine and approve any cash
incentive bonus for fiscal 2022. |
Executive
Compensation Matters
| (13) | On February 18, 2022, the Company
granted Mr. File 240 shares of common stock issued as RSAs, which are subject to vesting upon the verification by our Compensation Committee
of the achievement of certain to the Company’s achievement of certain performance milestones in 2022. On December 31, 2022, these
RSAs were cancelled due to forfeiture under these vesting provisions. |
| (14) | On February 18, 2022, the Company
granted Mr. File 240 stock options, which vest in a series of forty-eight (48) successive equal monthly installments upon completion of
each additional month of service for the Company measured from the vesting commencement date of February 18, 2022. |
| (15) | Mr. File’s prorated accrued cash
incentive bonus for fiscal 2021 was cancelled by the Compensation Committee due to the Company’s financial constraints. |
| (16) | On February 3, 2021, the Company
granted Mr. File 106 shares of common stock issued as RSAs, of which 42 vested in connection with the Company’s achievement of certain
performance milestones in 2021. Of these RSAs, the Company withheld 22 shares of common stock to satisfy statutory tax withholding
requirements upon vesting of such RSAs during 2021. |
| (17) | On February 3, 2021, the Company
granted Mr. File 80 stock options, which vest in a series of forty-eight (48) successive equal monthly installments upon completion of
each additional month of service for the Company measured from the vesting commencement date of February 3, 2021. |
| (18) | Russ Barrans retired from his position
as Chief Commercial Officer in November 2021. |
| (19) | Consists of (i) $447,379 paid to
Mr. Barrans pursuant to Mr. Barrans’ employment agreement with the Company and (ii) $24,581 paid to Mr. Barrans for vacation payout. |
| (20) | Mr. Barrans’ prorated accrued cash
incentive bonus for fiscal 2021 was cancelled by the Compensation Committee due to the Company’s financial constraints. |
| (21) | On February 3, 2021, the Company
granted Mr. Barrans 106 shares of common stock issued as RSAs, of which 42 vested in connection with the Company’s achievement of certain
performance milestones in 2021. Of these RSAs, the Company withheld 16 shares of common stock to satisfy statutory tax withholding requirements
upon vesting of the RSAs during 2021. The Company also withheld 10 shares of common stock to satisfy statutory tax withholding requirements
upon vesting of the third tranche of RSAs during 2021 that were granted in July 2019. |
| (22) | On February 3, 2021, the Company
granted Mr. Barrans 80 stock options, which vest in a series of forty-eight (48) successive equal monthly installments upon completion
of each additional month of service for the Company measured from the vesting commencement date of February 3, 2021. |
| (23) | 2021 All Other Compensation for
Mr. Barrans includes (i) a $3,119 premium paid for group term life insurance and (ii) $63,911 in severance pay. |
| (24) | Alex Fitzpatrick became a named
executive officer as of December 31, 2021 as a result of Mr. Barrans’ retirement. He resigned from his position as General Counsel
in October 2022. |
| (25) | Consists of (i) $386,399 paid to
Mr. Fitzpatrick pursuant to Mr. Fitzpatrick’s employment agreement with the Company and (ii) $23,466 paid to Mr. Fitzpatrick for vacation
payout. |
| (26) | Mr. Fitzpatrick’s prorated accrued
cash incentive bonus for fiscal 2021 was cancelled by the Compensation Committee due to the Company’s financial constraints. |
| (27) | On February 18, 2022, the Company
granted Mr. Fitzpatrick 160 shares of common stock issued as RSAs, which are subject to vesting upon the verification by our Compensation
Committee of the achievement of certain to the Company’s achievement of certain performance milestones in 2022. On December 31,
2022, these RSAs were cancelled due to forfeiture under their vesting provisions. |
| (28) | On February 18, 2022, the Company
granted Mr. Fitzpatrick 160 stock options, which vest in a series of forty-eight (48) successive equal monthly installments upon completion
of each additional month of service for the Company measured from the vesting commencement date of February 18, 2022. |
| (29) | On February 3, 2021, the Company
granted Mr. Fitzpatrick 106 shares of common stock issued as RSAs, of which 42 vested in connection with the Company’s achievement
of certain performance milestones in 2021. Of these RSAs, the Company withheld 22 shares of common stock to satisfy statutory tax withholding
requirements upon vesting of such RSAs during 2021. |
| (30) | On February 3, 2021, the Company
granted Mr. Fitzpatrick 80 stock options which vest in a series of forty-eight (48) successive equal monthly installments upon completion
of each additional month of service for the Company measured from the vesting commencement date of February 3, 2021. |
| (31) | 2021 All Other Compensation for
Mr. Fitzpatrick includes (i) a $2,322 premium paid for group term life insurance and (ii) $6,418 in fringe benefits paid on behalf of
Mr. Fitzpatrick. |
| (32) | Katherine Atkinson became a named
executive officer on May 31, 2022, when she was appointed Chief Commercial Officer. Her position was terminated effective March 17, 2023,
as of which date the Compensation Committee had yet to determine and approve any cash incentive bonus for fiscal 2022. |
| (33) | On February 18, 2022, the Company
granted Ms. Atkinson 133 shares of common stock issued as RSAs, which are subject to vesting upon the verification by our Compensation
Committee of the achievement of certain to the Company’s achievement of certain performance milestones in 2022. On December 31,
2022, these RSAs were cancelled due to forfeiture under their vesting provisions. |
| (34) | On February 18, 2022, the Company
granted Ms. Atkinson 53 stock options, which vest in a series of forty-eight (48) successive equal monthly installments upon completion
of each additional month of service for the Company measured from the vesting commencement date of February 18, 2022. |
| 40 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Executive
Compensation Matters
Employment, Severance, and Separation Agreements
Current Executive Officers
Our current principal executive officer
(Ms. Pelletier) was appointed to her office in January 2018 in connection with the Merger (as defined in the “Related Person Transactions”
section below). The amounts reported for her in the Summary Compensation Table above include compensation paid to or earned by her pursuant
to offer letters for her services provided as our principal executive officer pursuant to her offer letter and subsequent employment agreement
described below.
Our current Chief Financial Officer (Ms. Zhang) was appointed
to her office in April 2023.
Current Employment Agreements
On July 2, 2018, we entered into an employment
agreement with Ms. Pelletier. Pursuant to the terms of this agreement, Ms. Pelletier is eligible to receive an annual base salary of $812,083
and a target bonus as a base salary up to 100%, payable in the discretion of our Board.
The employment agreement also entitles
Ms. Pelletier to (i) participate in benefit/welfare plans and fringe benefits provided generally to our senior executives, (ii)
receive reimbursement for ordinary and reasonably incurred business expenses and (iii) receive paid vacation and holiday time in
accordance with policies generally applicable to our senior executives. Ms. Pelletier may terminate his or her employment
for good reason after giving us thirty days to correct or “cure” the circumstances giving rise to a termination for good reason, and
she may terminate her employment upon at least thirty days’ prior written notice to us for any reason other than for good reason.
We may terminate the employment Ms. Pelletier without prior written notice for cause or in the event of her disability. We may
also terminate her employment without cause on thirty days’ prior written notice. The employment agreement will be automatically
terminated upon the death of the Ms. Pelletier. If her employment is terminated by us for cause, by reason of her death or disability,
or as a result of the applicable executive officer’s resignation without good reason, we agreed to pay the terminated executive officer
the amount of our accrued obligations as of the date of such termination. If an executive officer’s employment is terminated without
cause or the applicable executive officer resigns for good reason, then we have agreed to make the payments set forth below.
Severance Obligations
Saundra Pelletier
If Ms. Pelletier is terminated by us other
than for cause or Ms. Pelletier resigns for good reason, then pursuant to her employment agreement, we have agreed to pay and provide
to Ms. Pelletier: (i) all accrued obligations as of the date of termination, (ii) any accrued but unpaid bonus for the prior fiscal year,
(iii) a pro-rated bonus for the year in which the termination occurs as of her termination date, (iv) an amount equal to eighteen months
of her then-current base salary in a lump sum and (v) eighteen months of continuing health benefits coverage, each subject to the conditions
outlined in the agreement. In addition, fifty percent (50%) of any unvested and outstanding equity interests Ms. Pelletier may have shall
immediately vest and become exercisable, in each case subject to the conditions outlined in her equity agreements. If Ms. Pelletier’s
employment is terminated without cause or if Ms. Pelletier resigns for good reason, in each case within three months prior to or twelve
months following a change of control, then we have agreed to pay and provide to Ms. Pelletier: (i) all accrued obligations as of the date
of termination, (ii) an amount equal to twenty-four months of her then-current base salary in a lump sum, (iii) any accrued but unpaid
bonus for the prior fiscal year, (iv) her target annual bonus for the year in which the termination occurs at the rate in effect immediately
prior to such termination multiplied by a factor of 2.0 and (v) twenty-four months of continuing health benefits coverage, each subject
to the conditions outlined in the agreement. In addition, any unvested and outstanding equity interests Ms. Pelletier may have shall fully
vest and become exercisable, in each case subject to the conditions outlined in her equity agreements.
Justin J. File
Justin J. File resigned as the Company’s
Chief Financial Officer effective April 4, 2023. Mr. File’s resignation was voluntary and not for good reason, and there was no severance
obligation.
Alexander Fitzpatrick
Alexander Fitzpatrick resigned as the Company’s
General Counsel effective October 13, 2022. Mr. Fitzpatrick’s resignation was voluntary and not for good reason, and there was no severance
obligation.
Severance Tax Matters
All payments made and benefits available
to each executive officer in connection with his or her employment agreement will or were intended to comply with Section 409A of
the Internal Revenue Code of 1986, as amended, (the Code) in accordance with the terms of his or her employment agreement. In the event
the benefit provided to an employee (i) constitutes “parachute payments” within the meaning of Section 280G of the Code, and
(ii) would otherwise be subject to the excise tax imposed by Section 4999 of the Code, then such “Payments” will be reduced.
The reduced amount will be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject
to the excise tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount results in the executive
officer’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of such
benefits may be taxable under Section 4999 of the Code. If a reduction in payments or benefits constituting “parachute payments”
is necessary to limit or avoid a certain employee’s excise tax, the reduction shall occur at the election of such employee (provided,
however, that such election shall be subject to our approval if made on or after the effective date of the event that triggers the Payment)
and may reduce cash payments, cancel accelerated vesting of stock award, and/or reduce employee benefits in any order or combination that
maximizes the amount of such reduced amount. In the event that acceleration of vesting of stock award compensation is to be reduced, such
acceleration of vesting shall be cancelled in the reverse order of the date of grant of such executive officer’s stock awards unless
the executive officer elects a different order for cancellation.
Executive
Compensation Matters
Outstanding Equity Awards at December 31, 2022
The following table shows the outstanding equity awards held
by our named executive officers as of December 31, 2022.
| |
Option Awards |
| Name |
Number of Securities Underlying Unexercised Options Exercisable |
|
Number of Securities Underlying Unexercised Options Unexercisable |
Option Exercise
Price ($) |
Option
Grant Date |
Option
Expiration
Date |
| Saundra Pelletier |
3 |
(1) |
— |
149,756.25 |
6/3/2013 |
6/3/2023 |
| |
22 |
(2) |
— |
86,925.00 |
9/28/2016 |
9/28/2026 |
| |
440 |
|
— |
13,668.75 |
3/12/2018 |
3/12/2028 |
| |
167 |
|
— |
3,937.50 |
7/31/2018 |
7/31/2028 |
| |
151 |
|
— |
6,468.75 |
11/28/2018 |
11/28/2028 |
| |
151 |
|
8 |
9,131.25 |
2/5/2020 |
2/5/2030 |
| |
171 |
|
202 |
6,093.75 |
2/3/2021 |
2/3/2031 |
| |
83 |
|
316 |
917.50 |
2/18/2022 |
2/18/2032 |
| Justin J. File(4) |
12 |
(3) |
— |
86,925.00 |
9/28/2016 |
9/28/2026 |
| |
160 |
|
— |
13,668.75 |
3/12/2018 |
3/12/2028 |
| |
60 |
|
— |
3,937.50 |
7/31/2018 |
7/31/2028 |
| |
55 |
|
— |
6,468.75 |
11/28/2018 |
11/28/2028 |
| |
50 |
|
2 |
9,131.25 |
2/5/2020 |
2/5/2030 |
| |
36 |
|
43 |
6,093.75 |
2/3/2021 |
2/3/2031 |
| |
50 |
|
190 |
917.50 |
2/18/2022 |
2/18/2032 |
| Katherine Atkinson(5) |
8 |
|
23 |
783.75 |
12/1/2021 |
12/1/2031 |
| |
11 |
|
42 |
917.50 |
2/18/2022 |
2/18/2032 |
| Alexander A. Fitzpatrick(6) |
146 |
|
— |
13,668.75 |
3/12/2018 |
3/12/2028 |
| |
55 |
|
— |
3,937.50 |
7/31/2018 |
7/31/2028 |
| |
53 |
|
— |
6,468.75 |
11/28/2018 |
11/28/2028 |
| |
47 |
|
— |
9,131.25 |
2/5/2020 |
2/5/2030 |
| |
33 |
|
— |
6,093.75 |
2/3/2021 |
2/3/2031 |
| |
23 |
|
— |
917.50 |
2/18/2022 |
2/18/2032 |
| | |
| (1) | The share numbers and exercise prices
reflected are those of options issued to the executive upon completion of the Merger in January 2018. These options were issued upon
completion of the Merger in exchange for options to purchase 139 shares of Private Evofem common stock, which were fully vested upon
grant, at an exercise price of $3,843.75 per share awarded to the executive by Evofem Operations in 2013 (See more detail described
in Note 3 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2018). |
| (2) | The share numbers and exercise prices
reflected are those of options issued to the executive upon completion of the Merger in January 2018. These options were issued upon
completion of the Merger in exchange for options to purchase an aggregate of 874 shares of Private Evofem common stock at an exercise
price of $2,231.25 per share awarded to the executive by Private Evofem in 2016. |
| (3) | The share numbers and exercise prices
reflected are those of options issued to the executive upon completion of the Merger in January 2018. These options were issued upon
completion of the Merger in exchange for options to purchase an aggregate of 480 shares of Private Evofem common stock at an exercise
price of $2,231.25 per share awarded to the executive by Private Evofem in 2016. |
| (4) | Justin File resigned as the Company’s
Chief Financial Officer effective April 3, 2023. |
| (5) | The employment of Katherine Atkinson as the Company’s
Chief Commercial Officer was terminated effective March 17, 2023. |
| (6) | Alexander Fitzpatrick resigned as the Company’s General
Counsel effective October 14, 2022; he had 90 days thereafter to exercise his vested options, after which date they were cancelled. |
| 42 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Executive
Compensation Matters
Employee Benefit and Equity Incentive Plans
Stock Compensation Plans - Summary of
the Amended and Restated 2014 Plan
The Company initially adopted the 2007
Stock Plan (the 2007 Plan) in March 2007, under which 113 shares of common stock were reserved for issuance to employees, non-employee
directors, and consultants of the Company. The Company ceased granting any additional awards under our 2007 Plan, and presently grants
equity awards under the Amended and Restated 2014 Plan.
On September 15, 2014, our Board adopted,
and our stockholders approved, the 2014 Equity Incentive Plan. The 2014 Equity Incentive Plan, as amended and restated, provides
incentives that will assist us to attract, retain, and motivate employees, including officers, consultants, and directors. We may
provide these incentives through the grant of stock options, stock appreciation rights, restricted stock, restricted stock units,
performance shares, and units and other cash-based or share-based awards. In addition, the Amended and Restated 2014 Plan contains
a mechanism through which we may adopt a deferred compensation arrangement in the future.
A total of 88 shares of our
common stock was initially authorized and reserved for issuance under the Amended and Restated 2014 Plan. As of August 8,
2023, a total of 5,758 shares of our common stock were reserved and available for issuance under the Amended and
Restated 2014 Plan. Per the terms of the Amended and Restated 2014 Plan, this reserve will automatically increase on each
January 1 through 2024, by an amount equal to the smaller of:
| • |
4% of the number of shares of common stock issued and outstanding
on the immediately preceding December 31; or |
| • |
an amount determined by our Board. |
Appropriate adjustments will be made in
the number of authorized shares and other numerical limits in the Amended and Restated 2014 Plan and in outstanding awards to prevent
dilution or enlargement of participants’ rights in the event of a stock split or other change in our capital structure. Shares subject
to awards which expire or are cancelled or forfeited will again become available for issuance under the Amended and Restated 2014 Plan.
The Amended and Restated 2014 Plan is administered
by the Compensation Committee of our Board. Pursuant to the provisions of the Amended and Restated 2014 Plan, the Compensation
Committee determines, in its discretion, the persons to whom and the times at which awards are granted, the sizes of such awards
and all of their terms and conditions. The Compensation Committee has the authority to construe and interpret the terms of the Amended
and Restated 2014 Plan and awards granted under it. The Amended and Restated 2014 Plan provides, subject to certain limitations,
for indemnification by us of any director, officer, or employee against all reasonable expenses, including attorneys’ fees, incurred
in connection with any legal action arising from such person’s action or failure to act in administering the Amended and Restated
2014 Plan.
In the event of a change in
control as described in the Amended and Restated 2014 Plan, the acquiring or successor entity may assume or continue all or any
awards outstanding under the Amended and Restated 2014 Plan or substitute substantially equivalent awards. The Compensation
Committee may provide for the acceleration of vesting of any or all outstanding awards upon such terms and to such extent
as it determines, except that the vesting of all awards held by members of the Board who are not employees will
automatically be accelerated in full upon a change in control. Any award held by a participant whose service has not terminated
prior to a change in control that is not assumed, continued, or substituted for in connection with a change in control or
are not exercised or settled prior to the change in control will terminate effective as of the time of the change in control.
Notwithstanding the foregoing, except as otherwise provided in an award agreement governing any award, in the discretion of the
Compensation Committee, any award that is not assumed, continued, or substituted for in connection with a change in control shall,
subject to the provisions of applicable law, become fully vested and exercisable and/or settleable as of a date prior to, but
conditioned upon, the consummation of the change in control. The Amended and Restated 2014 Plan also authorizes the
Compensation Committee, in its discretion and without the consent of any participant, to cancel each or any outstanding award
denominated in shares upon a change in control in exchange for a payment to the participant with respect to each vested share
subject to the cancelled award (and each unvested share, if so determined by the Compensation Committee) of an amount equal to the
excess of the fair market value of the consideration to be paid per share of common stock in the change in control transaction over
the exercise price per share, if any, under the award. The vesting schedules of all outstanding options of the Company, excluding
any shares issuable pursuant to the assumed equity incentive plan of Private Evofem, were fully accelerated in connection with
the Merger and termination of employment or service arrangement with the Company.
Executive
Compensation Matters
The Amended and Restated 2014 Plan will
continue in effect until it is terminated, provided, however, that all awards will be granted, if at all, within ten years of its
effective date. The Compensation Committee may amend, suspend or terminate the Amended and Restated 2014 Plan at any time, provided
that without stockholder approval, the Amended and Restated 2014 Plan cannot be amended by the Compensation Committee without stockholder
approval, except as described above, to increase the number of shares authorized, change the class of persons eligible to receive incentive
stock options, or effect any other change that would require stockholder approval under any applicable law or listing rule.
Summary of the
2018 Inducement Equity Incentive Plan
On July 24, 2018, upon the
recommendation of our Compensation Committee, the Board approved our 2018 Inducement Equity Incentive Plan and reserved 133
shares of our common stock to be used exclusively for grants of awards to individuals that were not previously employees or
directors of the company, as an inducement to the individual’s entry into employment with the company within the meaning of
Rule 5635(c)(4) of the Nasdaq Listing Rules. On February 25, 2020, the Board approved an increase to the number of shares of
our common stock reserved and available for issuance under the 2018 Inducement Equity Incentive Plan to 666 shares. The 2018
Inducement Equity Incentive Plan was adopted without stockholder approval pursuant to Rule 5635(c)(4). The 2018 Inducement Equity
Incentive Plan provides for the grant of equity-based awards, including options, restricted and unrestricted stock awards, and
other stock- based awards, and its terms are substantially similar to the Amended and Restated 2014 Plan, but with such other
terms and conditions intended to comply with the Nasdaq inducement award exception. As of August 8, 2023, there
were 51 shares of options outstanding and 608 shares available for grant under the 2018 Inducement Equity Incentive
Plan.
2019 Employee Stock
Purchase Plan
On May 7, 2019, the Board approved the
2019 ESPP, which was approved by stockholders at the 2019 annual meeting held on June 5, 2019 and which authorizes the issuance
of up to 266 shares of common stock pursuant to purchase rights granted to employees. This authorized number of shares may be increased
annually on the first day of each of the Company’s fiscal years beginning in 2020 and ending on the first day of 2029, in an
amount equal to the lesser of (i) 533 shares, (ii) two percent (2%) of the shares of common stock outstanding on the last day of
the immediately preceding fiscal year, or (iii) such lesser number of shares as is determined by the Board. The 2019 ESPP enables eligible
full-time and part-time employees to purchase shares of the Company’s common stock through payroll deductions of between 1%
and 15% of eligible compensation during an offering period. A new offering period begins approximately every June 15 and December
15. At the last business day of each offering period, the accumulated contributions made during the offering period will be used
to purchase shares. The purchase price is 85% of the lesser of the fair market value of the common stock on the first or the last business
day of an offering period. The maximum number of shares of common stock that may be purchased by any participant during an offering period
will be equal to $25,000 divided by the fair market value of the common stock on the first business day of an offering period.
In October 2022, the Board terminated the
offering period ending December 15, 2022, refunded all employee contributions, and suspended future offering periods. Additionally, the
authorized number of shares available for issuance under the 2019 ESPP was not increased on January 1, 2023. The Board may in future reinstitute
the ESPP if and when our common stock resumes trading on a national stock exchange.
As of August 8, 2023, there
were 937 shares of common stock purchased and 509 shares of our common stock reserved and available for issuance under the 2019
ESPP.
Private Evofem Equity Incentive Plan
The Private Evofem Equity Incentive Plan
was assumed by the Company in connection with the Merger and shares of Private Evofem common stock issuable pursuant to options
previously granted under the Private Evofem Equity Incentive Plan became options to purchase our common stock upon completion of
the Merger. No new awards may be granted under the Private Evofem Equity Incentive Plan. As of December 31, 2022, a total of 66 shares
of our common stock were reserved for issuance upon the exercise of outstanding options under the Private Evofem Equity Incentive
Plan.
| 44 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Executive
Compensation Matters
Perquisites, Health, Welfare and Retirement
Benefits
Our executive officers are eligible to
participate in all of our employee benefit plans, including our medical, dental, vision, group life and disability insurance plans,
in each case on the same basis as other employees.
Pay vs. Performance
The following table sets forth information concerning the compensation
of our Named Executive Officers and our financial performance for the years ended December 31, 2022 and 2021:
| Year |
Summary Compensation Table Total for PEO(1) |
Compensation Actually Paid to PEO(2) |
Average Summary Compensation Table Total for Non-PEO NEOs(3) |
Average Compensation Actually Paid to Non-PEO NEOs(2) |
Value of Initial Fixed $100 Investment Based on Total Shareholder Return |
|
Net Income (Loss)
(in thousands) |
| (a) |
(b) |
(c) |
(d) |
(e) |
(f) |
|
(g) |
| 2021 |
$ 2,791,944 |
$ 845,685 |
$ 1,003,787 |
$ 499,844 |
$ 15.60 |
(5)(6) |
(205,192) |
| 2022 |
$ 1,324,670 |
$ 952,400 |
$ 599,276 |
$ 477,131 |
$ 0.18 |
(6) |
(76,698) |
| | |
| (1) | PEO: Principal Executive Officer. For both 2021 and 2022, Saundra
Pelletier was our PEO. |
| (2) | See table below for amounts deducted or added to calculate executive
compensation actually paid. |
| (3) | NEO: Named Executive Officer. |
| (4) | The closing price of shares of our common stock on December
31, 2020, was $4,518.75. |
| (5) | The closing price of shares of our common stock on December
31, 2021 was $705.00. |
| (6) | The closing price of shares of our common stock on December
30, 2022 was $8.00. |
| Year |
PEO |
Non-PEO NEOs |
| 2021 |
Saundra Pelletier |
Jay File, Alexander Fitzpatrick, and Russell Barrans |
| 2022 |
Saundra Pelletier |
Jay File, Alexander Fitzpatrick and Katherine Atkinson |
The amounts reported in the “Compensation
Actually Paid to PEO” and “Average Compensation Actually Paid to Non-PEO NEOs” columns do not reflect the actual compensation
paid to or realized by our CEO or our non-CEO NEOs during each applicable year. The calculation of compensation actually paid for purposes
of this table includes point-in-time fair values of stock awards and these values will fluctuate based on our stock price, various accounting
valuation assumptions and projected performance related to our performance awards. See the Summary Compensation Table for certain other
compensation of our CEO and our non-CEO NEOs for each applicable fiscal year.
Executive
Compensation Matters
Compensation actually paid to our NEOs
represents the “Total” compensation reported in the Summary Compensation Table for the applicable fiscal year, as adjusted as
follows:
| Adjustments |
2021 |
|
2022 |
| PEO |
Average Non-PEO NEOs |
|
PEO |
Average Non-PEO NEOs |
| Deduction for Amounts Reported under the “Stock Awards” and “Option Awards” Columns in the Summary Compensation Table for applicable FY |
$ |
(1,959,340) |
$ |
(467,947) |
|
$ |
(293,850) |
$ |
(111,010) |
| Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Remain Unvested as of Applicable FY End, Determined as of Applicable FY End |
$ |
98,569 |
$ |
19,994 |
|
$ |
594 |
$ |
145 |
| Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Vested during Applicable FY, determined as of Vesting Date |
$ |
124,045 |
$ |
17,721 |
|
$ |
9,279 |
$ |
3,505 |
| Increase/deduction for Awards Granted during Prior FY that were Outstanding and Unvested as of Applicable FY End, determined based on change in ASC 718 Fair Value from Prior FY End to Applicable FY End |
$ |
(175,238) |
$ |
(58,398) |
|
$ |
(69,337) |
$ |
(9,764) |
| Increase/deduction for Awards Granted during Prior FY that Vested During Applicable FY, determined based on change in ASC 718 Fair Value from Prior FY End to Vesting Date |
$ |
(34,294) |
$ |
(15,312) |
|
$ |
(18,956) |
$ |
(5,021) |
| Total Adjustments |
$ |
(1,946,258) |
$ |
(503,942) |
|
$ |
(372,270) |
$ |
(122,145) |
Fair value or change in fair value, as applicable,
of equity awards in the “Compensation Actually Paid” columns was determined by reference to a Black Scholes value as of the
applicable year-end or vesting date(s), determined based on the same methodology as used to determine grant date fair value but using
the closing stock price on the applicable revaluation date as the current market price and with an expected life set equal to the remaining
life of the award in the case of underwater stock options and, in the case of in the money options, an expected life equal to the original
ratio of expected life relative to the ten year contractual life multiplied times the remaining life as of the applicable revaluation
date, and in all cases based on volatility and risk free rates determined as of the revaluation date based on the expected life period
and based on an expected dividend rate of 0%. For additional information on the assumptions used to calculate the valuation of the awards,
see the Notes to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on
April 27, 2023, and prior fiscal years.
Relationship Between Financial Performance Measures
The graph below compares the compensation
actually paid to our PEO and the average of the compensation actually paid to our remaining NEOs, with (i) our cumulative Total Shareholder
Return (TSR), and (ii) our net loss, in each case, for the fiscal years ended December 31, 2021 and 2022. TSR amounts reported in the
Pay Versus Performance table above and the graph below assume an initial fixed investment of $100 on December 31, 2020, and that all dividends,
if any, were reinvested.
| 46 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Executive
Compensation Matters
EVFM TSR vs. Compensation Actually Paid
Net
Loss vs. Compensation Actually Paid
Audit Matters
Report of Audit Committee
The Audit Committee of the Board, which
consists entirely of directors who meet the independence and experience requirements of the Nasdaq Capital Market, has furnished
the following report:
The Audit Committee assists the Board in
overseeing and monitoring the integrity of our financial reporting process, compliance with legal and regulatory requirements and
the quality of internal and external audit processes. This committee’s role and responsibilities are set forth in our charter
adopted by the Board, which is available on our website at www.evofem.com. The Audit Committee reviews and reassesses our charter
annually and recommends any changes to the Board for approval. The Audit Committee is responsible for overseeing our overall financial
reporting process, and for the appointment, compensation, retention, and oversight of the work of independent registered public accountants.
In fulfilling its responsibilities for the financial statements for fiscal year ended December 31, 2022, the Audit Committee took the
following actions:
| • |
Reviewed and discussed the
audited financial statements for the fiscal year ended December 31, 2022 with management and Deloitte & Touche LLP
(“Deloitte”), our independent registered
public accounting firm for the year ended December 31, 2022; |
| • |
Discussed with Deloitte the matters required to be discussed in accordance
with Auditing Standard No. 1301-Communications with Audit Committees; and |
| • |
Received written disclosures and the letter from Deloitte regarding its independence as required by applicable requirements of the Public Company Accounting Oversight Board
regarding Deloitte communications with the Audit Committee and the Audit Committee further discussed with Deloitte their independence. The Audit Committee also considered the status of pending litigation, taxation matters and
other areas of oversight relating to the financial reporting and audit process that the committee determined appropriate. |
Based on the Audit Committee’s review
of the audited financial statements and discussions with management and Deloitte LLP, the Audit Committee recommended
to the Board that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December
31, 2022 for filing with the SEC.
Members of the Evofem Biosciences, Inc. Audit Committee
Colin Rutherford, Chair
Kim Kamdar, Ph.D.
Tony O’Brien
| 48 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Other Information
Security Ownership of Certain Beneficial
Owners and Management
The following table sets forth certain
information concerning the ownership of our common stock as of August 8, 2023, by (i) those persons who are known to us
to be the beneficial owner(s) of more than five percent of our common stock, (ii) each of our directors and named
executive officers and (iii) all of our directors and named executive officers as a group.
As
of August 8, 2023, 4,060,209 shares of common stock and 1,800 shares of Series E-1 Convertible Preferred Stock were
issued and outstanding. The holders of the Series E-1 Convertible Preferred Shares are entitled to vote together with the holders
of our common stock on an as converted basis.
The number of shares beneficially owned
by each entity, person, director or executive officer is determined in accordance with the rules of the SEC, and the information
is not necessarily indicative of beneficial ownership for any other purpose. In the cases of holders who are not directors, director
nominees, and named executive officers, Schedules 13G or 13D filed with the SEC (and, consequently, ownership reflected here) often reflect
holdings as of a date prior to August 8, 2023. Under such rules, beneficial ownership generally includes any shares over which the individual
has sole or shared voting power or investment power as well as any shares that the individual has the right to acquire within 60 days
after August 8, 2023, through the exercise of stock options, warrants or other rights. Unless otherwise indicated in the footnotes
to this table, we believe that each of the stockholders named in this table has sole voting and investment power with respect to the
shares indicated as beneficially owned. Unless otherwise noted, the address of the persons in the table below is that of the Company.
| Name and Address of Beneficial Owner |
Shares
Beneficially
Owned |
Percent of Shares
Beneficially
Owned |
|
| Directors and Named Executive Officers |
|
|
|
| Kim Kamdar, Ph.D.(1) |
180 |
* |
|
| Tony O’Brien(2) |
173 |
* |
|
| Lisa Rarick, M.D.(3) |
167 |
* |
|
| Colin Rutherford(4) |
180 |
* |
|
| Saundra Pelletier(5) |
2,833 |
0.1 |
% |
| Ivy Zhang(6) |
104 |
* |
|
| Directors and executive officers as a group (6 Persons)(7) |
3,637 |
0.21 |
% |
| Holders
of Greater than 5% of the class |
|
|
|
|
| Keystone Capital Partners,
LLC (8) |
550 |
|
31 |
% |
| Mercer Street Global
Opportunity Fund, LLC (9) |
500 |
|
28 |
% |
| Seven Knots, LLC (10) |
150 |
|
8 |
% |
| Walleye
Opportunities Master Fund (11) |
600 |
|
33 |
% |
Holders
of Greater than 5% of the class as a group (4 persons) |
1,800 |
|
100 |
% |
| * | Includes beneficial ownership of less than 1% of the outstanding shares of Evofem’s common stock. |
| (1) | Consists
of (i) 10 shares of common stock held by Dr. Kamdar, and (ii) 170 shares of common stock
that may be acquired pursuant to the exercise of stock options within 60 days of August 8, 2023. |
| (2) | Consists
of (i) 4 shares of common stock held by Mr. O’Brien, and (ii) 169 shares of common stock
that may be acquired pursuant to the exercise of stock options within 60 days of August 8, 2023. |
| (3) | Consists
of (i) 5 shares of common stock held by Dr. Rarick, and (ii) 162 shares of common stock that
may be acquired pursuant to the exercise of stock options within 60 days of August 8,
2023. |
| (4) | Consists
of 180 shares of common stock that may be acquired by Mr. Rutherford pursuant to the exercise
of stock options within 60 days of August 8, 2023. |
| (5) | Consists
of (i) 1,493 shares of common stock held by Ms. Pelletier, and (ii) 1,348 shares of
common stock that may be acquired pursuant to the exercise of stock options within 60 days
of August 8, 2023. |
Other Information
| (6) | Consists
of (i)104 shares of common stock held by Ms. Zhang as of August 8, 2023. |
| (7) | Consists
of (i) 1,616 shares of common stock held by our current executive officers and directors, and (ii) 2,029 shares of common
stock that may be acquired by our current executive officers and directors pursuant to the exercise of stock options within 60 days
after August 8, 2023. |
| (8) | Consists
of 550 shares of Series E-1 Convertible Preferred Shares, with voting rights equal to 16%
of the then issued and outstanding common shares entitled to vote in a shareholder action
relating to increase in authorized shares. According to our books and records, the address
of Keystone Capital Partners, LLC is 139 Fulton Street, Suite 412, New York, NY, 10038. Keystone
Capital Partners, LLC is managed by RANZ Group LLC. Fredric Zaino, the Managing Member of
RANZ Group LLC, may be deemed to have investment discretion and voting power over the shares
held by Keystone Capital Partners LLC. RANZ Group LLC and Mr. Zaino each disclaim any beneficial
ownership of these shares. |
| (9) | Consists
of 500 shares of Series E-1 Convertible Preferred Shares, with voting rights equal to 15%
of the then issued and outstanding common shares entitled to vote in a shareholder action
relating to increase in authorized shares. According to our books and records, the address
of Mercer Street Global Opportunity Fund, LLC is 1111 Brickell Ave., Suite 2920, Miami, FL,
33131. Mercer Street Global Opportunity Fund, LLC is managed by Mercer Street Capital Partners
LLC, which is managed by Jonathan Juchno. Mercer Street Capital Partners LLC and Mr. Juchno
may be deemed to have investment discretion and voting power over the shares held by Mercer
Street Global Opportunity Fund, LLC. Mercer Street Capital Partners LLC and Mr. Juchno each
disclaim any beneficial ownership of these shares. |
| (10) | Consists
of 150 shares of Series E-1 Convertible Preferred Shares, with voting rights equal to 4%
of the then issued and outstanding common shares entitled to vote in a shareholder action
relating to increase in authorized shares. According to our books and records, the address
of Seven Knots, LLC is 7 Rose Avenue, Great Neck, NY, 11021. Marissa Welner, the Manager
of Seven Knots, LLC, holds voting and dispositive power over the shares held by this stockholder.
Ms. Welner disclaims any beneficial ownership of these shares. |
| (11) | Consists
of 600 shares of Series E-1 Convertible Preferred Shares, with voting rights equal to 18%
of the then issued and outstanding common shares entitled to vote in a shareholder action
relating to increase in authorized shares. According to our books and records, the address
of Walleye Opportunities Master Fund, Ltd. is c/o Walleye Capital, LLC 2800 Niagara Lane
North, Plymouth, MN, 55447. Walleye Capital LLC is the investment manager of Walleye Opportunities
Master Fund Ltd and may be deemed to beneficially own the shares owned by the Walleye Opportunities
Master Fund Ltd. Roger Masi is a Portfolio Manager of Walleye Capital LLC and may be deemed
to have voting and dispositive power over the shares owned by the Walleye Opportunities Master
Fund Ltd. Walleye Capital LLC and Mr. Masi each disclaim any beneficial ownership of these
shares. |
Equity Compensation Plan Information
The following table provides certain aggregate
information with respect to all of our equity compensation plans in effect as of December 31, 2022:
| Plan Category |
Number of Securities to
be
Issued Upon Exercise of
Awards (a) |
|
Weighted Average Exercise Price of Outstanding Awards (b) |
|
Number of Securities Remaining
Available for Future Issuance
Under Equity Compensation
Plans (excluding securities
reflected in column (a)) |
| Equity compensation plans approved by Stockholders(1) |
5,470 |
|
$ |
6,463.75 |
|
4,499(2) |
| Equity compensation plans not approved by Stockholders(3) |
133 |
|
$ |
7,661.25 |
|
525 |
| Total |
5,603 |
|
|
|
|
5,024 |
| | | |
| (1) | Includes
our 2007 Plan and the Amended and Restated 2014 Plan. This table does not include the number
of shares issuable upon exercise of issued and outstanding awards under the Private Evofem
Equity Incentive Plan. No new awards may be issued under the Private Evofem Equity Incentive
Plan. As of December 31, 2022, a total of 68 shares of our common stock were reserved
for issuance upon the exercise of outstanding options under the Private Evofem Equity Incentive
Plan with a weighted average exercise price of $111,071.25 per share. |
| (2) | As of December 31, 2022, an aggregate
of 3,989 shares of common stock were available for grant under the Amended and Restated 2014 Plan and an aggregate of 509 shares
were available for issuance under the (currently suspended) 2019 ESPP. The Amended and Restated 2014 Plan contains a provision for an
automatic increase to the number of shares available for grant each January 1st until and including January 1, 2024, subject to certain
limitations, by a number of shares equal to the lesser of 4% of the number of shares of our common stock issued and outstanding on the
immediately preceding December 31 or a number of shares set by our Board. The 2019 ESPP contains a provision for an automatic increase
to the number of shares available for issuance under the 2019 ESPP each January 1st and including January 1, 2024, subject to certain
limitations, by a number of shares equal to the lesser of 533 shares or 2% of our common stock issued and outstanding on the immediately
preceding December 31 or a number of shares set by our Board. The authorized number of shares available for issuance under the 2019 ESPP
was not increased on January 1, 2023. |
| (3) | Includes the 2018 Inducement Equity
Incentive Plan. See Item 10, “Directors, Executive Officers, and Corporate Governance” of our Annual Report for a narrative
description of the 2018 Inducement Equity Incentive Plan. |
| 50 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Other Information
Related Person Transactions
Company Policy Regarding Related Party Transactions
Our Audit Committee is responsible for
reviewing and approving all transactions in which we are a participant and in which any parties related to us, including our executive
officers, directors, beneficial owners of more than 5% of our securities, immediate family members of the foregoing persons, and any other
persons whom our Board determines may be considered related parties, has or will have a direct or indirect material interest. If advanced
approval is not feasible, the Audit Committee has the authority to ratify a related party transaction at the next Audit Committee
meeting. For purposes of our Audit Committee charter, a material interest is deemed to be any consideration received by such a party in excess
of the lesser of $120,000 per year or 1% of the average of our total assets for the last two completed fiscal years.
In reviewing and approving such transactions,
the Audit Committee shall obtain, or shall direct our management to obtain on its behalf, all information that our committee believes
to be relevant and important to a review of the transaction prior to its approval. Following receipt of the necessary information,
a discussion shall be held of the relevant factors if deemed to be necessary by our committee prior to approval. If a discussion
is not deemed to be necessary, approval may be given by written consent of our committee. This approval authority may also be delegated
to the Chairperson of the Audit Committee in respect of any transaction in which the expected amount is less than $500,000.
The Audit Committee or its chairperson,
as the case may be, shall approve only those related party transactions that are determined to be in, or not inconsistent
with, the best interests of us and our stockholders, taking into account all available facts and circumstances as our committee or the
Chairperson determines in good faith to be necessary. These facts and circumstances will typically include, but not be limited to, the
material terms of the transaction, the nature of the related party’s interest in the transaction, the significance of the transaction
to the related party and the nature of our relationship with the related party, the significance of the transaction to us, and whether
the transaction would be likely to impair (or create an appearance of impairing) the judgment of a director or executive officer
to act in our best interest. No member of the Audit Committee may participate in any review, consideration, or approval of any related
party transaction with respect to which the member or any of his or her immediate family members is the related party, except that
such member of the Audit Committee will be required to provide all material information concerning the related party transaction
to the Audit Committee.
Except as otherwise set forth below, during
the years ended December 31, 2022 and 2021 and to date there were no transactions to which we will be a party, nor are there any
currently proposed transactions to which we will be a party, in which:
| • |
the amounts involved exceeded or will exceed the lesser of $120,000
per year or 1% of the average of our total assets for the last two completed fiscal years; and |
| • |
any of our directors, nominees for director, executive officers
or holders of more than 5% of our outstanding capital stock, or any immediate family member of, or person sharing the household with,
any of these individuals or entities, had or will have a direct or indirect material interest. |
Preferred Stock
Series B and C Convertible Preferred
Stock
On October 12, 2021, the Company completed
the initial closing of a registered direct offering with Keystone Capital Partners (Keystone Capital) (the Initial October 2021 Registered
Direct Offering), whereby the Company issued 5,000 shares of Series B-1 Convertible Preferred Stock, par value $0.0001 per share, at a
price of $1,000.00 per share. The Company received proceeds from the Initial October 2021 Registered Direct Offering of approximately
$4.6 million, net of offering expenses.
On October 26, 2021, the Company completed
the additional closing of the October 2021 Registered Direct Offering (the Additional October 2021 Registered Direct Offering), whereby
the Company issued 5,000 shares of Series B-2 Convertible Preferred Stock, par value $0.0001 per share, at a price of $1,000.00 per share.
The Company received proceeds from the Additional October 2021 Registered Direct Offering of approximately $5.0 million, net of offering
expenses.
The Series B-1 and B-2 Convertible Preferred
Stock were convertible into shares of common stock at any time at a conversion price per share of the greater of $9.00 (Fixed Conversion
Price), or the price computed as the product of 0.85 multiplied by the arithmetic average of the closing sale prices of a share of the
Company’s common stock during the five consecutive trading-day period immediately preceding the conversion date (Variable Conversion Price).
Other Information
On October 12, 2021, Keystone Capital converted
their 5,000 shares of B-1 Convertible Preferred Stock at a conversion price of $9.45 per share into 529,100 shares of the Company’s common
stock. Pursuant to the terms of the Series B-2 Convertible Preferred Stock, the Fixed Conversion Price was adjusted during the first quarter
of 2022 for certain dilutive issuances. The adjustment period ended on April 25, 2022 and the Fixed Conversion Price was fixed at $2.66
from the sale of common stock pursuant to the Seven Knots Purchase Agreement. During March and April 2022, Keystone Capital converted
their 1,200 shares of B-1 Convertible Preferred Stock at a conversion price of $4.70 per share into 293,496 shares of the Company’s common
stock. Pursuant to the terms of the Series B-2 Convertible Preferred Stock, the Fixed Conversion Price was adjusted during the first quarter
of 2022 for certain dilutive issuances.
On March 24, 2022, the Company entered
into an exchange agreement with the holder of its Series B-2 Convertible Preferred Stock, pursuant to which the holder agreed to exchange
1,700 shares of the Series B-2 Convertible Preferred Stock in consideration for 1,700 shares of the Company’s Series C Convertible
Preferred Stock, par value $0.0001 per share, $1,000.00 per share stated value. The Series C and Series B-2 Preferred Stock had substantially
similar terms except with respect to voting provisions; the holders of Series C Preferred Stock had the right to cast, at the 2022 Annual
Meeting of Stockholders, 50,000 votes per share of Series C Preferred Stock on the proposal that our Amended and Restated Certificate
of Incorporation, as amended (the Certificate of Incorporation), be amended to effect a reverse stock split of the issued and outstanding
shares of common stock, provided, that such votes must be counted by the Company in the same proportion as the aggregate shares of common
stock voted on the proposal.
On May 4, 2022, following the 2022 Annual
Meeting of Stockholders and pursuant to the May 2022 Exchange, the remaining 2,100 shares of Series B-2 Convertible Preferred Stock and
1,700 shares of Series C Convertible Preferred Stock were exchanged for Senior Subordinated Notes with an aggregate principal amount of
$4.8 million and warrants to purchase up to 833,333 shares of common stock.
Effective December 15, 2021, the Company
amended and restated its certificate of incorporation, under which the Company is currently authorized to issue up to 5,000,000 shares
of preferred stock, $0.0001 par value per share.
Series D Non-Convertible Preferred
Stock
On
December 16, 2022, the Company filed a Certificate of Designation of Series D Non-Convertible Preferred Stock, par value $0.0001 per
share (the Series D Preferred Shares). An aggregate of 70 shares was authorized. They are not convertible into shares of common stock,
have limited voting rights equal to 1% of the total voting power of the then-outstanding shares of common stock entitled to vote per
share, are not entitled to dividends, and were subsequently redeemed by us, once our shareholders approved a reverse split, as
described in the Certificate of Designation. All
70 shares of the Series D Preferred were subsequently issued in connection with the December 2022 Securities Purchase Agreement as discussed
in Note 5-Debt in the Notes to Consolidated Financial Statements in our Annual Report as filed on form 10-K with the SEC on April 27,
2023. Since the Series D Preferred Shares can only be settled in cash, they were recorded as a liability within accrued expenses in the
consolidated balance sheets. The amount related to the liability is de minimus. All 70 shares of the Series D Preferred were redeemed
in July 2023.
Series E-1 Convertible Preferred
Stock
On August 7, 2023, the Company filed a Certificate of Designation of Series E-1 Convertible Preferred Stock, par value $0.0001 per share
(the Series E-1 Convertible Preferred Shares). An aggregate of 2,300 shares was authorized. They are convertible into shares of common
stock at a conversion price of $0.40 per share and are both counted toward quorum on the basis of and have voting rights equal to the
number of shares of Common Stock into which the Series E-1 Convertible Preferred Shares are then convertible. The Series E-1 Convertible
Preferred Shares are entitled to dividends, payable in shares of Common Stock. As of August 8, 2023, 1,800 Series E-1 convertible Preferred
Shares were issued and outstanding.
Indemnification Arrangements
We entered into indemnification agreements
with each of our officers and directors and purchased directors’ and officers’ liability insurance. Our indemnification
agreements and amended and restated bylaws require us to indemnify our directors and officers to the fullest extent permitted under Delaware
law.
Employment Arrangements
We entered into employment arrangements
with certain of our named executive officers as is further described under “Current Employment Agreements” above.
| 52 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Other Information
Section 16(a) Beneficial Ownership Reporting
Compliance
Under Section 16(a) of the Exchange Act,
all executive officers, directors, and each person who is the beneficial owner of more than 10% of the common stock of a company that
files reports pursuant to Section 12 of the Exchange Act, are required to report the ownership of such common stock, options, and stock
appreciation rights (other than certain cash-only rights) and any changes in that ownership with the Commission. Specific due dates for
these reports have been established, and we are required to report, in this Proxy Statement, any failure to comply therewith during the
fiscal year ended December 31, 2022 or prior fiscal years.
Other than as set forth in the Delinquent
Section 16(a) Reports section below, we believe that all of these filing requirements were satisfied by the Company’s executive
officers, directors and by the beneficial owners of more than 10% of our common stock. In making this statement, we have relied solely
on copies of any reporting forms received by us, and upon any written representations received from reporting persons that no Form 5 (Annual
Statement of Changes in Beneficial Ownership) was required to be filed under applicable rules of the Commission.
Delinquent Section 16(a) Reports
Due to an administrative error, Saundra
Pelletier was not timely in the filing of one Statement of Changes in Beneficial Ownership on Form 4 (“Form 4”) during the
fiscal year ended December 31, 2022. A Form 4 should have been filed to report the disposition on December 31, 2022, of 50,000 restricted
stock awards that had been granted to Ms. Pelletier on February 18, 2022, due to forfeiture under the vesting provisions of those awards.
A Form 4 reflecting such disposition was subsequently filed on April 26, 2023.
PROPOSAL
3: Increase in Authorized Shares
|
PROPOSAL
3 |
Increase in Authorized Shares |
|
| |
Our Amended and Restated Certificate of Incorporation,
as amended (the Certificate of Incorporation) currently authorizes us to issue a total of 500,000,000 shares of common stock, $0.0001
par value per share and 5,000,000 shares of preferred stock, $0.0001 par value per share (“Preferred Stock”). On August 17,
2023, our board of directors unanimously approved an amendment to our Restated Certificate to authorize an additional 2,500,000,000
shares of common stock (the “Amendment”), subject to stockholder approval. Our board of directors has unanimously determined
that the Amendment is advisable and in the best interests of the Company and our stockholders, and, in accordance with the General Corporation
Law of the State of Delaware, hereby seeks approval of the Amendment by our stockholders.
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
Recommendation
The Board recommends a vote “FOR”
the approval of the increase in authorized shares. |
|
| |
|
|
|
|
Proposed Amendment
Our board of directors is proposing the Amendment
to increase the number of authorized shares of our common stock from 500,000,000 shares to 3,000,000,000 shares. Of the 500,000,000
shares of common stock currently authorized by the Restated Certificate and as of August 16, 2023, 4,060,209 shares of common
stock are issued and outstanding and approximately 394,856,452 shares are reserved for issuance under pending conversions of convertible
notes, rights, warrants and all other derivatives. Other than the proposed increase in the number of authorized shares of common stock,
the Amendment is not intended to modify the rights of existing stockholders in any respect.
Reasons for the Amendment
Our board of directors believes the Amendment
is advisable and in the best interests of the Company and our stockholders to make available for future issuance a sufficient number
of authorized shares of common stock to give us necessary flexibility to issue shares to continue to finance our business and for future
corporate needs. The additional authorized shares would provide us with necessary and important financing and capital raising flexibility
to support our need for additional capital to support the growth of our business and could be used for other business and financial purposes
that our board of directors deems are in the Company’s best interest, including the acquisition of other companies’ businesses
or products in exchange for common stock, attraction and retention of employees through the issuance of additional awards under our equity
incentive plans, and implementation of stock splits and issuance of dividends in the future. Without an increase in the number of authorized
shares of common stock, the Company will be constrained in its ability to raise capital in order to support our ongoing operations and
business objectives and may have to curtail activities or lose important business opportunities, including to competitors, which could
adversely affect our financial performance and growth.
As of August 16, 2023, we had approximately
101,083,339 shares of common stock available after taking into account the potential uses reflected above. Given the capital needs
of our business, more authorized shares are required. The increase in our authorized common stock will also allow us to reserve shares
of common stock under our equity incentive plans. The additional authorized shares of common stock would enable us to act quickly in
response to capital raising and other corporate opportunities that may arise, in most cases without the necessity of holding a special
stockholders’ meeting and obtaining further stockholder approval before the issuance of common stock could proceed, except as may
be required by applicable law or the listing rules of Nasdaq (the “Nasdaq listing rules”) or any other stock exchange on
which our securities may be listed. Other than issuances pursuant to equity incentive plans (or upon the exercise of securities issued
pursuant to equity incentive plans) and the approximately 394,856,452 shares reserved for potential conversions as described above,
as of the date of this Proxy Statement, we have no current arrangements or understandings regarding the issuance of any additional shares
of common stock that would be authorized pursuant to this proposal. However, we need additional capital to fund our ongoing operations,
and we review and evaluate potential capital raising activities, transactions and other corporate opportunities on an ongoing basis to
determine if any such actions would be in the best interests of the Company and our stockholders.
Rights of Additional Authorized
Shares
The additional authorized shares of common
stock, if and when issued, would be part of the existing class of common stock and would have the same rights and privileges as the shares
of common stock currently outstanding. Stockholders do not have preemptive rights with respect to our common stock and no further authorization
of the stockholders is contemplated to be obtained for the issuance of shares of common stock being authorized pursuant to this Proposal
3. Therefore, should our board of directors determine to issue additional shares of common stock, existing stockholders would not have
any preferential rights to purchase such shares in order to maintain their proportionate ownership thereof.
| 54 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
|
Potential Effects of the Amendment
The increase in the number of authorized shares
of common stock will not have any immediate effect on the rights of our existing stockholders. Our board of directors will have the authority
to issue the additional shares of common stock without requiring future stockholder approval of such issuances, except as may be required
by applicable law or Nasdaq listing rules of any other stock exchange on which our securities may be listed. The issuance of additional
shares of common stock will decrease the relative percentage of equity ownership of our existing stockholders, thereby diluting the voting
power of their common stock, and, depending on the price at which the additional shares are issued, may also be dilutive to any future
earnings per share of our common stock. We could use the additional authorized shares of
common stock for potential strategic transactions, including, among other things, acquisitions, strategic partnerships, joint ventures,
restructurings, divestitures, business combinations and investments. We cannot provide assurances that any such transactions would be
consummated on favorable terms or at all, that they would enhance stockholder value or that they would not adversely affect our business
or the trading price of our common stock. Any such transactions may require us to incur non-recurring or other charges and may pose significant
integration challenges and/or management and business disruptions, any of which could materially and adversely affect our business and
financial results. The authorization of additional shares of common stock could also have an anti-takeover effect, in that the additional
shares could be issued to oppose a hostile takeover attempt or delay or prevent changes in control or management of the Company. For
example, without further stockholder approval, our board of directors could sell shares of our common stock in a private transaction
to purchasers who would oppose a takeover attempt or favor our current board of directors. Although this proposal to increase the number
of authorized shares of common stock has been prompted by business and financial considerations and not by any current or threatened
hostile takeover attempt, stockholders should be aware that approval of this proposal could facilitate future attempts by the Company
to oppose changes in control of the Company and to perpetuate our then-current management, including the opposition of transactions in
which the stockholders might otherwise receive a premium for their shares over then-current market prices.
Effectiveness of the Amendment
and Required Vote
If the Amendment is approved by our stockholders,
the Amendment will become effective upon the filing of a certificate of amendment with the Delaware Division of Corporations, which filing
is expected to occur promptly after the Annual Meeting. If the Amendment is not approved by our stockholders, the Restated Certificate
will not be amended and the number of authorized shares of common stock will remain unchanged.
The affirmative vote of a majority of the
combined voting power of the outstanding shares of common stock and Series E-1 Convertible Preferred Shares as of the Record Date,
voting together as a single class, is required to approve the Amendment. As a result, abstentions will have the effect of a vote
“AGAINST” this proposal.
The Board of Directors Recommends a Vote “FOR”
the Approval of the Amendment to Restated Certificate to increase the Authorized Number of Shares of Common Stock from 500,000,000 to
3,000,000,000.
PROPOSAL
4: Independent Registered Public Accounting Firm
|
PROPOSAL
4 |
Independent Registered Public Accounting Firm |
|
| |
On July 11, 2023, the Audit
Committee approved the engagement of BPM LLP as our independent registered public accounting firm for the fiscal year ending December
31, 2023. On that same date, Deloitte & Touche LLP (“Deloitte”) was dismissed as our independent registered
public accounting firm. See “Change of Independent Registered Public Accounting Firm” below.
The Audit Committee recommended that our Board
of Directors direct that management submit the selection of BPM LLP as our independent registered public accounting firm for the fiscal
year ending December 31, 2023 to our stockholders for ratification.
We expect that one or more representatives of BPM
LLP will be present at the annual meeting, will have an opportunity to make a statement if they so desire, and will be available to respond
to appropriate questions. Representatives of Deloitte are not expected to be present at the annual meeting.
Stockholder ratification of the selection of BPM
LLP as our independent registered public accounting firm is not required by Delaware law, our amended and restated certificate of incorporation,
or our amended and restated bylaws. However, the selection of BPM LLP to our stockholders for ratification is being submitted as a matter
of good corporate practice. If our stockholders fail to ratify the selection, our audit committee will reconsider whether to retain the
firm. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered
public accounting firm at any time during the year if the audit committee determines that such a change would be in the best interests
of our company and our stockholders. |
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
Recommendation
The Board unanimously recommends that the stockholders
vote “FOR” ratification of the selection of BPM LLP as our independent registered public accounting firm for the fiscal year
ended December 31, 2023. Proxies solicited by the Board will be voted in favor of such ratification unless a stockholder indicates otherwise
on their proxy card.
|
|
Change of Independent Registered Public Accounting
Firm
On July 11, 2023, the Audit Committee
dismissed Deloitte as our independent registered public accounting firm. Deloitte’s audit reports on our consolidated financial
statements for the fiscal years ended December 31, 2022 and 2021 contained no adverse opinion or disclaimer of opinion and were not qualified
or modified as to uncertainty, audit scope, or accounting principles, except that, the reports included an explanatory paragraph relating
to substantial doubt about the Company’s ability to continue as a going concern. During our two most recent fiscal years, which
ended December 31, 2022 and December 31, 2021, and the subsequent interim period through July 11, 2023, there were no “disagreements”
(within the meaning set forth in Item 304(a)(1)(iv) of Regulation S-K under the Securities Exchange Act of 1934 (“Regulation S-K”))
with Deloitte on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure,
which disagreements, if not resolved to Deloitte’s satisfaction, would have caused Deloitte to make reference to the subject matter
of the disagreements in connection with their reports on the Company’s financial statements. There were no reportable events
within the meaning of Item 304(a)(1)(v) of Regulation S-K, and related instructions thereto, during the fiscal years
ended December 31, 2022 and 2021, and through the subsequent interim period through July 11, 2023, except that, as previously
disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 10-K”) and Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 2023, the Company reported material weaknesses in its internal control over
financial reporting during such period. As disclosed in the 2022 10-K, in connection with the Company’s evaluation of the effectiveness
of its internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934), the Company
concluded that its internal control over financial reporting was not effective as of December 31, 2022.
In accordance with Item 304(a)(3) of Regulation S-K, we requested that
Deloitte furnish us with a letter addressed to the SEC stating whether or not Deloitte agrees with the above statements. Deloitte
furnished the requested letter stating whether it agrees with the statements
above, and, if not, stating the respects in which it does not agree, and a copy is filed as
Exhibit 16.1 to our current report on Form 8-K filed with the SEC on July 17, 2023.
On July 11, 2023, based on the recommendation
of the Audit Committee, the Board approved the engagement of BPM LLP as our independent registered public accounting firm for the fiscal
year ending December 31, 2023, subject to ratification by the Company’s stockholders at the Company’s 2023 Annual Meeting.
| 56 |
Evofem Biosciences, Inc. | 2023 Proxy Statement |
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Other Information
During the fiscal year ended December
31, 2022 and the subsequent interim period through July 11, 2023, neither we, nor any person acting on our behalf, consulted BPM LLP
regarding (i) the application of accounting principles to a specified transaction, either completed or proposed, (ii) the type of
the audit opinion that might be rendered on our financial statements, and BPM LLP did not provide any written report or oral advice
to us that BPM LLP concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or
financial reporting issue, or (iii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation
S-K and the related instructions to Item 304 of Regulation S-K) or a reportable event of the type described in Item 304(a)(1)(v) of Regulation
S-K.
Independent Registered Public Accounting Firm’s
Fees
The following table shows the fees billed by Deloitte for the audit of our annual
financial statements for the last two fiscal years and for other services rendered by Deloitte to the Company during our last two
fiscal years and first quarter ended March 31, 2023.
| |
Three
Months ended |
|
Year
Ended December 31 |
| |
March
31, 2023 |
|
2022 |
|
2021 |
| Audit
Fees (1) |
$ |
103,000 |
|
$ |
1,311,774 |
|
$ |
857,675 |
| Audit Related
Fees |
- |
|
- |
|
- |
| Tax Fees
(2) |
- |
|
135,030 |
|
76,602 |
| All
Other Fees (3) |
- |
|
- |
|
1,895 |
| Total |
$ |
103,000 |
|
$ |
1,446,804 |
|
$
|
936,172 |
| (1) | Audit Fees represent fees and out-of-pocket
expenses, whether or not yet invoiced, for professional services provided in connection with the audit of the Company’s financial
statements, the review of the Company’s quarterly financial statements, professional services in connection with the Company’s
registration statements on Form S-3 and S-8 and comfort letters, and audit services provided in connection with other regulatory filings. |
| (2) | Tax fees represent fees and out-of-pocket
expenses for professional services for tax compliance, tax advice or tax return preparations. |
| (3) | All Other Fees represent annual
licensing fees for an accounting database subscription. |
Pre-Approval Policies and Procedures
The Audit Committee annually reviews and
pre-approves certain audit and non-audit services that may be provided by our independent registered public accounting firm and establishes
and pre-approves the aggregate fee level for these services. Any proposed services that would cause us to exceed the pre-approved
aggregate fee amount must be pre-approved by the Audit Committee. All audit services for 2022 were pre-approved by the Audit Committee.
In the event the stockholders do not ratify
the appointment of BPM LLP as our independent registered public accounting firm, the Audit Committee will reconsider its appointment.
The affirmative vote of a majority
of the shares cast affirmatively or negatively at the Annual Meeting is required to ratify the appointment of the independent registered
public accounting firm.
Other Matters
/ Stockholder Proposal
Other Matters
The Board knows of no other business which
will be presented to the Annual Meeting. If any other business is properly brought before the Annual Meeting, proxies will be voted
in accordance with the judgment of the persons named therein. No director, executive officer or nominee for director, nor any associate
of any of the foregoing, has any substantial interest, direct or indirect, by security holdings or otherwise, in any matter to be acted
upon at the Annual Meeting (except for the election of directors proposal).
Stockholder Proposal and Nominations for Director
In nominating candidates for election
as a director, the Nominating and Corporate Governance Committee will consider a reasonable number of candidates for director recommended
by a single stockholder who has held over 0.1% of our common stock for over one year and who satisfies the notice, information and consent
provisions set forth in our amended and restated bylaws and corporate governance guidelines. Stockholders who wish to recommend a candidate
may do so by writing to the Nominating and Corporate Governance Committee in care of the Corporate Secretary, Evofem Biosciences, Inc.,
7770 Regents Road, Suite 113-618, San Diego, California 92122-1967. Our amended and restated bylaws and Rule 14a-19 of the Securities
and Exchange Act of 1934, as amended (the “Exchange Act”) establish advance notice procedures and certain other requirements
that a stockholder who wishes to nominate an individual to serve as a director of the Board. In general, notices must meet the requirements
in our amended and restated bylaws and Rule 14a-19 of the Exchange Act and must be delivered to our Corporate Secretary at our corporate
offices not earlier than the one hundred twentieth (120th) day, nor later than the close of business on the ninetieth (90th) day, prior
to the first anniversary of the previous year’s annual meeting of stockholders. Therefore, to ensure that stockholder nominees
for election of directors will be included for election at our 2024 Annual Meeting of stockholders, such a proposal must be received
by us no earlier than February 21, 2024, and no later than March 22, 2024. However, our amended and restated bylaws also provide that
in the event that the date of the annual meeting is advanced by more than thirty (30) days, or delayed by more than seventy (70) days,
from the anniversary date of the preceding year’s annual meeting, notice must be received no earlier than the one hundred twentieth
(120th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such
annual meeting or, if the first public announcement of the date of such annual meeting is less than one-hundred (100) days prior to the
date of such annual meeting, the tenth (10th) day following the day on which the public announcement of the date of such meeting is first
made. In addition to meeting the advance notice provisions mentioned above, the stockholder in its notice must provide the information
required by our amended and restated bylaws and must comply with all of the additional requirements set forth in Rule 14a-19 of the Exchange
Act to bring a stockholder proposal or nominate an individual to serve as a director of the Board.
A copy of the full text of the provisions
of our amended and restated bylaws dealing with stockholder nominations and proposals is available to stockholders from our Corporate
Secretary upon written request. The Nominating and Corporate Governance Committee will use the same evaluation process for director nominees
recommended by stockholders as it uses for other director nominees.
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Evofem Biosciences, Inc. | 2023 Proxy Statement |
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PROPOSAL
5: Adjournment
PROPOSAL
5 |
Adjournment |
|
| |
To consider and vote upon a proposal to authorize
our Board, in its discretion, to adjourn the Annual Meeting to another place, or a later date or dates, if necessary or appropriate,
to solicit additional proxies in favor of the proposal listed above at the time of the Annual Meeting.
|
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Recommendation
The Board unanimously
recommends that the stockholders vote “FOR” the adjournment of the Annual Meeting pursuant to this Proposal 5, to another
place, date or time, if deemed necessary or appropriate, in the discretion of the Board. |
|
Adjournment of the Annual Meeting
General
Our stockholders may be asked to
consider and act upon one or more adjournments of the Annual Meeting, if necessary or appropriate, to solicit additional proxies in favor
of proposals 1- 4 set forth in this Proxy Statement (the “Proposals”).
If a quorum is not present at the
Annual Meeting, our stockholders may be asked to vote on this proposal to adjourn the Annual Meeting to solicit additional proxies. If
a quorum is present at the Annual Meeting, but there are not sufficient votes at the time of the Annual Meeting to approve the Proposals,
our stockholders may also be asked to vote on this proposal to approve the adjournment of the Annual Meeting to permit further solicitation
of proxies in favor of the Proposals.
If the adjournment proposal is
submitted for a vote at the Annual Meeting, and if our stockholders vote to approve the adjournment proposal, the Annual Meeting may
be adjourned to enable the Board to solicit additional proxies in favor of the Proposals. If the adjournment proposal is approved, and
the Annual Meeting is adjourned, the Board will use the additional time to solicit additional proxies in favor of the Proposals to be
presented at the Annual Meeting, including the solicitation of proxies from stockholders that have previously voted against the Proposals.
Our Board believes that, if the
number of shares of our Common Stock and Series E-1 Preferred Stock voting in favor of The Proposals at the Annual Meeting is insufficient
to approve the Proposals, it is in the best interests of our stockholders to enable the Board, if it so chooses and for a limited period
of time, to continue to seek to obtain a sufficient number of additional votes in favor of the Proposals. Any signed proxies received
by us in which no voting instructions are provided on such matter will be voted in favor of an adjournment in these circumstances.
If the Annual Meeting is adjourned, the time and place of the adjourned Annual Meeting will be announced at the time the adjournment
is taken. Any adjournment of the Annual Meeting for the purpose of soliciting additional proxies will allow our stockholders who have
already sent in their proxies to revoke them at any time prior to their use at the Annual Meeting, as adjourned or postponed.
Vote
Required
The affirmative “FOR”
vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject
matter is required to approve the adjournment of the Annual Meeting pursuant to this Proposal 5, to another place, date or time, if deemed
necessary or appropriate, in the discretion of the Board. Abstentions, if any, will be treated as shares that are present and entitled
to vote on this Proposal, and will therefore be treated as a vote “AGAINST” this Proposal 5. In the event that there are
any broker non-votes, they will not affect the outcome of the vote on this Proposal 5. However, because we believe that the
approval of this Proposal will be treated as a routine matter on which a broker or other nominee has discretionary authority to vote,
we do not expect to receive any broker non-votes with respect to this Proposal 5.
Important Information About the Annual Meeting
and Voting
Why is the Company Soliciting My Proxy?
The Board is soliciting your proxy
to vote at the Annual Meeting of Stockholders (the Annual Meeting) of the Company to be held at 12544 High Bluff Drive, Suite 400, San
Diego, California 92130 on September 14, 2023, at 8:00 a.m. Pacific Time and any adjournments of the meeting, which we refer to
as the Annual Meeting. The proxy statement along with the accompanying Notice of Annual Meeting of Stockholders (the Notice) summarizes
the purposes of the meeting and the information you need to know to vote at the Annual Meeting.
We have made available to you on the
Internet or have sent you this proxy statement, the Notice of Annual Meeting of Stockholders and the proxy card because you owned shares
of the Company’s common stock on the Record Date, August 7, 2023. The Company intends to commence distribution of the proxy
materials to stockholders on or about August 31, 2023.
Who Can Vote?
Only stockholders who owned our common
stock, Series A preferred stock, and Series E-1 Convertible Preferred stock at the close of business on August 7, 2023 are entitled
to vote at the Annual Meeting. On this Record Date, there were 4,060,209 shares of our common stock outstanding and entitled to vote,
zero shares of our Series A preferred stock that are outstanding and entitled to vote, and 1,800 shares of our Series E-1 Convertible
Preferred stock that are outstanding and entitled to vote.
You do not need to attend the 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 “May I Change or Revoke
My Proxy?” below.
How Many Votes Do I Have?
Each share of our common stock
and Series A preferred stock that you own entitles you to one vote on Proposal 1: the Election of Director, Proposal 2: the Non-Binding
Advisory Vote to Approve the Compensation of Our Named Executive Officers, Proposal 3: the Increase in Authorized Shares, Proposal 4:
the Appointment of our Independent Accounting Firm for the fiscal year ending December 31, 2023, and Proposal 5: Adjournment.
Each one share of Series E-1 Convertible
Preferred Stock has voting rights equal to the number of shares of Common Stock into which the Series E -1 Convertible Preferred Shares
were convertible as of August 7, 2023 on Proposal 1: the Election of Director, Proposal 2: the Non-Binding Advisory Vote to Approve
the Compensation of Our Named Executive Officers, Proposal 3: the Increase in Authorized Shares, Proposal 4: the Appointment of our Independent
Accounting Firm for the fiscal year ending December 31, 2023 and Proposal 5: Adjournment.
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Important
Information About the Annual Meeting and Voting
How Do I Vote?
Whether you plan to attend the Annual Meeting
or not, we urge you to vote by proxy. All shares represented by valid proxies that we receive through this solicitation, and that are
not revoked, will be voted in accordance with your instructions on the proxy card or as instructed via Internet or telephone. You may
specify whether your shares should be voted for, against or abstain with respect to the proposal. If you properly submit a proxy without
giving specific voting instructions, your shares will be voted in accordance with the Board’s recommendations as noted below. Voting
by proxy will not affect your right to attend the Annual Meeting. If your shares are registered directly in your name through our stock
transfer agent, Pacific Stock Transfer, Inc., or you have stock certificates registered in your name, you may vote:
| • | Online (www.proxyvote.com).
Use the Internet to transmit your voting instructions and for electronic delivery of information. Have your proxy card and 12-digit
control number(s) in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting
instruction form. |
| • | By phone (1-800-690-6903).
Use any touch-tone phone to transmit your voting instructions. Have your proxy card and 12-digit control number(s) in hand when you call
and then follow the instructions. |
| • | By mail. If you received
a proxy card by mail, you can vote by mail by completing, signing, dating and returning the proxy card as instructed on the card. |
| • | In person at the meeting.
If you attend the meeting, you may deliver a completed proxy card in person or you may vote by completing a ballot, which will be available
at the meeting. |
Telephone and online voting facilities
for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. Eastern Daylight Time on Wednesday, September
13, 2023.
If your shares are held 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 online voting will also
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, 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.
How Does the Board Recommend That I Vote
on the Proposal?
The Board recommends that you vote as follows:
| • | “FOR ALL” the election
of the nominee for director; and, |
| • | “FOR” the approval,
on a non-binding advisory basis, of the compensation of the Company’s named executive officers, as disclosed in this proxy statement. |
| • | “FOR”
the amendment of the Company’s Amended and Restated Certificate of Incorporation of
Evofem Biosciences, Inc. to increase the number of outstanding shares of our common stock
we are authorized to issue to 3,000,000,000 (the Increase in Authorized Shares). |
| • | “FOR” the appointment
of BPM LLP as Evofem Biosciences, Inc.’s independent registered public accounting firm for the fiscal year ending December 31, 2023. |
| • | “FOR”
the authorization of the board to Adjourn the Annual Meeting, in their discretion, to solicit
additional proxies. |
If any other matter is presented at the Annual
Meeting, your proxy provides that your shares will be voted by the proxy holder listed in the proxy in accordance with his or her best
judgment. At the time this proxy statement was first made available, we knew of no matters that needed to be acted on or that would be
brought before the Annual Meeting, other than those discussed in this proxy statement.
May I Change or Revoke My Proxy?
If you give us your proxy, you may change or revoke it at any
time before the Annual Meeting. You may change or revoke your proxy in any one of the following ways:
| • | if you received a proxy card,
by signing a new proxy card with a date later than your previously delivered proxy and submitting it as instructed above; |
| • | by re-voting by Internet or by telephone as instructed above;
or |
| • | by notifying the Company’s
Secretary in writing before the Annual Meeting that you have revoked your proxy; or by attending the Annual Meeting in person and voting
in person. Attending the Annual Meeting in person will not in and of itself revoke a previously submitted proxy. You must specifically
request at the Annual Meeting that it be revoked. |
Your most current vote, whether submitted by telephone, Internet
or proxy card, is the one that will be counted.
Important
Information About the Annual Meeting and Voting
What if I Receive More Than One Notice
or Proxy Card?
You may receive more than one Notice or
proxy card if you hold shares of our common stock in more than one account, which may
be in registered form or held in street name. Please vote in the manner described above under “How Do I Vote?” for each account
to ensure that all of your shares are voted.
Will My Shares be Voted if I Do Not Vote?
If your shares are registered in your name or if you have stock
certificates, they will not be counted if you do not vote as described above under “How Do I Vote?”
If your shares are held in street name
and you do not provide voting instructions to the bank, broker or other nominee that holds your shares as described above, the bank, broker
or other nominee that holds your shares does not have the authority to vote your unvoted shares on the proposal set forth in this proxy
statement without receiving instructions from you. Therefore, we encourage you to provide voting instructions to your bank, broker or
other nominee. This ensures your shares will be voted at the Annual Meeting. A “broker non-vote” will occur if your broker
cannot vote your shares on a particular matter because it has not received instructions from you.
What Vote is Required to Approve the Proposal
and How are Votes Counted?
| Proposal 1: Elect Director |
|
The nominee for director who receives the
most votes (also known as a “plurality” of the votes cast) will be elected. You may vote either FOR ALL, WITHHOLD ALL, or
FOR ALL EXCEPT for the nominee. Votes that are withheld will not be included in the vote tally for the election of directors. Abstentions
will have no effect on the results of this vote. Brokerage firms do not have authority to vote customers’ unvoted shares held by
the firms in street name for the election of the directors. As a result, any shares not voted by a customer will be treated as a broker
non-vote. These broker non-votes will have no effect on the results of this vote.
|
| Proposal 2: Non-Binding Advisory Vote to Approve the Compensation of Our Named Executive Officers |
|
The affirmative vote of a majority of the votes cast, either affirmatively or negatively, at a meeting at which a quorum is present, is required to approve this non-binding advisory proposal. Abstentions will have no effect on the results of this vote. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name for the approval of the non-binding advisory vote to approve the compensation of our named executive officers.
|
| Proposal 3: Increase in Authorized Shares |
|
The
affirmative vote a majority of the combined voting power, at a meeting at which a quorum is present, of the outstanding shares of
common stock and Series E-1 Convertible Preferred Stock, voting together as a single class, is required to approve the Amendment
to effectuate the Increase in Authorized Shares. Abstentions and broker non-votes are not counted in determining the number of shares
voted for or against this proposal. However, abstentions and broker non-votes will be counted as entitled to vote and will, therefore,
have the same effect as a vote “against” this proposal.
|
| Proposal 4: Appointment of Independent Registered Public Accounting Firm |
|
The affirmative vote of a majority of the total
votes cast on the proposal is required to ratify the selection of our independent registered public accounting firm. Abstentions will
have no effect on the results of this vote. Brokerage firms have authority to vote customers’ unvoted shares held by the firms in
street name on this proposal. If a broker does not exercise this authority, such broker non-votes will have no effect on the results of
this vote. We are not required to obtain the approval of our stockholders to select our independent registered public accounting firm.
However, if our stockholders do not ratify the selection of BPM LLP as our independent registered public accounting firm for 2023, the
Audit Committee of our Board will reconsider its selection.
|
| Proposal
5: Adjournment |
|
The affirmative vote of a majority
of the votes cast, either affirmatively or negatively, at a meeting at which a quorum is present, is required to approve this Adjournment
proposal. Abstentions will have no effect on the results of this vote. Brokerage firms do not have authority to vote customers’
unvoted shares held by the firms in street name for the approval of the non-binding advisory vote to approve the compensation of
our named executive officers.
|
| |
|
|
Where Can I Find the Voting Results
of the Annual Meeting?
The preliminary voting results will be
announced at the Annual Meeting, and we will publish preliminary, or final results if available, in a Current Report on Form 8-K within
four business days of the Annual Meeting. If final results are unavailable at the time we file the Form 8-K, then we will file an
amended report on Form 8-K to disclose the final voting results within four business days after the final voting results are known.
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Evofem Biosciences, Inc. | 2023 Proxy Statement |
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Important
Information About the Annual Meeting and Voting
What Are the Costs of Soliciting these
Proxies?
We will pay all of the costs of soliciting
these proxies. Our directors and employees may solicit proxies in person or by telephone, fax or email. We will pay these employees and
directors no additional compensation for these services. We will ask banks, brokers and other institutions, nominees and fiduciaries
to forward these proxy materials to their principals and to obtain authority to execute proxies. We will then reimburse them for their
expenses.
What Constitutes a Quorum for the Annual
Meeting?
The presence, in person or by proxy, of
the holders of one-third of the voting power of all outstanding shares of our common stock entitled to vote at the Annual Meeting is necessary to constitute a quorum at the Annual Meeting. Votes of stockholders
of record who are present at the Annual Meeting in person or by proxy, abstentions, and broker non-votes are counted for purposes of determining
whether a quorum exists.
In accordance with our amended and restated
bylaws, the chairperson of the Annual Meeting or a majority of the shares so represented may adjourn the Annual Meeting from time to time,
whether or not there is such a quorum.
Attending the Annual Meeting
The Annual Meeting will be held at 8:00
a.m., Pacific Time, on Thursday, September 14, 2023, at 12544 High Bluff Drive, Suite 400, San Diego, California 92130. You need not attend
the Annual Meeting in order to vote.
As always, we encourage you to vote your shares as early as
possible prior to the Annual Meeting.
Householding of Annual Disclosure Documents
U.S. Securities and Exchange Commission
(SEC) rules concerning the delivery of proxy statements allow us or your broker to send a single set of proxy materials or, if applicable,
a single set of proxy materials to any household at which two or more of our stockholders reside, if we or your broker believe that the
stockholders are members of the same family. This practice, referred to as “householding,” benefits both you and us. It reduces
the volume of duplicate information received at your household and helps to reduce our expenses. The rule applies to our Notices, annual
reports, proxy statements and information statements. Once you receive notice from your broker or from us that communications to your
address will be “householded,” the practice will continue until you are otherwise notified or until you revoke your consent
to the practice. Stockholders who participate in householding will continue to have access to and utilize separate proxy voting instructions.
If your household received a single set
of proxy materials, but you would prefer to receive your own copy, please contact our transfer agent, Pacific Stock Transfer, Inc., by
calling their toll-free number, 1-800-785-7782.
If you do not wish to participate in householding
and would like to receive your own Notice or, if applicable, set of the Company’s proxy materials in future years, please follow
the instructions described below. Conversely, if you share an address with another Company stockholder and together both of you would
like to receive only a single Notice or, if applicable, set of proxy materials, follow these instructions:
| • | If your Company shares are registered
in your own name, please contact our transfer agent, Pacific Stock Transfer, Inc., and inform them of your request by calling them at
1-800-785-7782, emailing them at info@pacificstocktransfer.com, or writing them at Pacific Stock Transfer, Inc., 6725 Via Austi Pkwy Suite
300, Las Vegas, NV 89119. |
| • | If a broker or other nominee holds
your Company shares, please contact the broker or other nominee directly and inform them of your request. Be sure to include your name,
the name of your brokerage firm and your account number. |
Appendix A
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Evofem Biosciences, Inc. | 2023 Proxy Statement |
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Evofem Biosciences, Inc. | 2023 Proxy Statement |
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