Executive Compensation Philosophy and Strategy
Our compensation philosophy is to provide a compensation package that will attract and retain high-performing talent in our industry, motivate our executive officers to create long-term value and enhance stockholder value, and encourage and reward performance and achievements. The Compensation Committee believes that compensation programs should include short-term and long-term components, including cash and equity-based compensation, and that compensation provided to our executives should remain competitive relative to compensation paid by companies of similar size and stage of development operating in our industry, considering our relative performance and strategic goals. The Compensation Committee intends to align the compensation of our executive officers with the interests of our stockholders, focusing executive officer behavior on both the achievement of short-term corporate goals and long-term business objectives and strategies.
Roles and Responsibilities and Process for Determining Executive Compensation
The Compensation Committee considers a number of factors in setting compensation for our executive officers, including our performance, the executive's functional performance, experience and responsibilities, and the compensation of executive officers in similar positions in our peer group.
Role of the Compensation Committee. Our Compensation Committee, which consists of three independent directors, has primary responsibility for overseeing and administering a compensation program for our NEOs. In making executive compensation decisions, the Compensation Committee considers a variety of factors and data, most importantly our corporate performance and individual executives' performance, and takes into account the totality of compensation that may be paid and compensation trends amongst our peer group. In particular, the Compensation Committee annually reviews the base salaries, annual cash bonuses, and equity compensation of our NEOs and periodically reviews other elements of our compensation program. The Compensation Committee retains the right to hire outside advisors as needed to assist it in reviewing and revising our executive compensation programs.
The responsibilities of the Compensation Committee are set forth in detail starting on page 11 of this Proxy Statement and in the Compensation Committee Charter, which can be found on our website at www.ocugen.com under "Investors".
Role of the Chief Executive Officer. Each year, our Chief Executive Officer provides an assessment of the performance of each executive officer, other than himself, for the prior year and makes recommendations to our Compensation Committee about the compensation of each executive. Our Chief Executive Officer's recommendations are based on numerous factors including:
•Company, team, and individual performance;
•Leadership competencies;
•External market competitiveness; and
•Internal pay comparisons.
Our Chief Executive Officer also provides a self-assessment of his achievements for the prior year. The Compensation Committee reviews and considers the Chief Executive Officer's recommendations, as well as his self-assessment, together with all other information it deems relevant including the input and recommendations of our independent compensation consultant, in determining the elements of compensation and compensation levels for each NEO.
Role of the Independent Compensation Consultant. Our Compensation Committee believes that independent advice is critical in developing our executive compensation programs. The Compensation Committee engaged FW Cook during 2021 as its independent advisor to review and provide advice regarding the design of all elements of our executive compensation program. FW Cook provides expert knowledge of regulatory developments, marketplace trends, and best practices relating to executive compensation and competitive pay levels, provides guidance on the composition of our peer group, and engages on other matters as needed and as directed solely by the Compensation Committee. During 2021, FW Cook also provided independent advisory support to the Compensation Committee on the compensation of our non-employee directors. Our independent compensation consultant does not provide any other services to us and reports directly to the Compensation Committee. The Compensation Committee assesses our compensation consultant's independence annually and, in accordance with applicable SEC and Nasdaq rules, confirmed that FW Cook's work did not raise any conflicts of interest and that FW Cook remains independent under applicable rules.
Peer Group Determination. For 2021, the executive peer group consisted of the 20 companies identified below, as recommended by the Prior Compensation Consultant and approved by the Compensation Committee in September 2020. The
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 24 |
| | |
COMPENSATION DISCUSSION AND ANALYSIS (continued) |
companies in this executive peer group were selected because they were within the same industry as us, and at that time, they (i) were of a similar size to us (under 100 employees), (ii) at a similar developmental stage (early clinical or preclinical companies), (iii) taking scientific approaches similar to us with product candidates focused on the treatment of ocular disorders/pathologies or within the gene therapy space, and (iv) measured at the time of selection as having a comparable market capitalization (less than $250 million).
The peer group for determining our 2021 compensation decisions consisted of the following companies:
| | | | | |
2021 Peer Group |
AgeX Therapeutics, Inc. | Larimar Therapeutics, Inc. |
Applied Genetic Technologies Corporation | LogicBio Therapeutics, Inc. |
Arbutus Biopharma Corporation | MeiraGTx Holdings plc |
Armata Pharmaceuticals, Inc. | Millendo Therapeutics, Inc. |
Cabaletta Bio, Inc. | miRagen Therapeutics, Inc. |
CohBar, Inc. | Moleculin Biotech, Inc. |
Corvus Pharmaceuticals, Inc. | Regulus Therapeutics Inc. |
Five Prime Therapeutics, Inc. | Spring Bank Pharmaceuticals, Inc. |
Genocea Biosciences, Inc. | Surface Oncology, Inc. |
Hepion Pharmaceuticals, Inc. | Synlogic, Inc. |
The Compensation Committee uses the peer group compensation data as one of several factors in assessing appropriate parameters for base salary, variable cash compensation, and LTI. We also supplement the data for our peer group with published compensation surveys where appropriate. The Compensation Committee's compensation decisions are made on a case-by-case basis. Benchmark results do not, in and of themselves, determine individual compensation decisions and we do not target specific pay percentiles. Overall, we believe that use of information from the peer group enables the Compensation Committee to create better alignment between executive pay and performance and to help ensure that we can attract and retain high-performing executive leaders.
The Compensation Committee, with assistance from its independent compensation consultant, periodically reviews the composition of the peer group to determine whether any changes are appropriate. For 2022, the Compensation Committee determined it would be appropriate for FW Cook to develop a new peer group reflective of our size, change in market capitalization during 2021, business focus, and strategic decision to diversify our product pipeline portfolio with a COVID-19 vaccine candidate. In determining the new peer group, FW Cook reviewed companies primarily between 0.5x and 2.0x market capitalization as compared to us, with the appropriate industry and business fit (biotechnology with a focus on vaccines, cell/gene therapies, and rare/unmet diseases). The new peer group was approved in September 2021, with compensation review and analysis performed in November 2021. Fiscal year 2022 target total direct compensation for the NEOs was approved with reference to our new peer group, which is shown below.
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 25 |
| | |
COMPENSATION DISCUSSION AND ANALYSIS (continued) |
| | | | | |
2022 Peer Group |
Allogene Therapeutics, Inc. | Kodiak Sciences Inc. |
Arena Pharmaceuticals, Inc. | MeiraGTx Holdings plc |
bluebird bio, Inc. | Precigen, Inc. |
Dynavax Technologies Corporation | REGENXBIO Inc. |
FibroGen, Inc. | Rocket Pharmaceuticals, Inc. |
Global Blood Therapeutics, Inc. | Rubius Therapeutics, Inc. |
IGM Biosciences, Inc. | Sangamo Therapeutics, Inc. |
Inovio Pharmaceuticals, Inc. | Translate Bio, Inc. |
Insmed Incorporated | Vericel Corporation |
IVERIC bio, Inc. | Xencor, Inc. |
Components of our Executive Compensation Program
Direct compensation for our NEOs primarily consists of three principal components: base salary, annual cash incentive opportunities, and equity-based LTI awards.
Base Salary. Base salary represents the fixed portion of an executive officer's compensation and is intended to provide compensation for day-to-day performance. The Compensation Committee believes that a competitive base salary is a necessary element of any compensation program that is designed to attract and retain talented and experienced executives. Base salaries are reviewed annually, typically in connection with the annual performance review process, and adjusted from time to time to take into account market levels, individual responsibilities, performance, and experience.
In December 2020, the Compensation Committee reviewed the base salaries of our then-serving NEOs and determined to increase those base salaries, after taking into account individual performance, the expansion of responsibilities and scope of duties, the competitive market for talent, and data provided by our Prior Compensation Consultant. Base salaries for the NEOs for fiscal year 2021 were as follows:
| | | | | | | | | | | |
Name and Principal Position | 2020 Base Salary | 2021 Base Salary | Increase |
Shankar Musunuri, Ph.D., MBA | $500,000 | $541,300 | 8% |
Chairman of the Board and Chief Executive Officer | | | |
| | | |
Sanjay Subramanian, MBA | $365,400 | $385,000 | 5% |
Former Chief Financial Officer, Head of Corporate Development, and Corporate Secretary | | | |
| | | |
Vijay Tammara, Ph.D. | N/A* | $364,000 | N/A* |
Vice President, Regulatory Operations | | | |
| | | |
* Dr. Tammara’s 2020 base salary level is not reflected here because he first became a NEO in 2021.
Annual Cash Incentive. The Compensation Committee believes that performance-based cash incentive bonuses play an important role in providing incentives to executives to achieve annual corporate goals. For fiscal year 2021, our annual incentive plan reflected our transition from a discretionary plan in fiscal year 2020, to a more structured goal-based plan. For fiscal year 2021, the Compensation Committee approved target annual incentive bonuses, and during the fiscal year, the Compensation Committee developed a framework for determining the payout percentage.
Each NEO has a target annual cash incentive amount, which is expressed as a percentage of his salary. This target is set forth in each NEO's employment agreement and is evaluated by our Compensation Committee annually based upon a review of the peer group and industry data provided by our independent compensation consultant, as well as other items used in the process for
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 26 |
| | |
COMPENSATION DISCUSSION AND ANALYSIS (continued) |
determining executive officer compensation, as described above. From time to time, our Board or Compensation Committee may approve other discretionary or formulaic annual bonuses for the NEOs based on individual performance, our performance, in connection with new hires, for promotions or retention, or as otherwise determined to be appropriate.
The initial performance metrics for the 2021 bonus plan were selected by the Compensation Committee in December 2020 and were approved to assess achievement in the following categories: financial capital raise goal; human capital goal; and three strategic goals related to the development of our ocular programs.
In February 2021, we entered into an agreement with Bharat Biotech International Limited, related to the development and commercialization of COVAXIN. As a result, we made a strategic shift to diversify our product candidate portfolio, expanding the focus to include vaccine development in addition to ocular programs. In connection with this shift in strategic priorities, the Compensation Committee determined that the initial 2021 bonus framework was, in part, no longer appropriate for supporting our short-term financial or strategic goals. As a result, in March 2021, the Compensation Committee approved revised performance metric categories. The general parameters of the funding and human capital goals remained unchanged. The amended 2021 annual incentive plan corporate goals, along with the performance assessment and results, each as approved by the Compensation Committee, are as follows:
| | | | | | | | |
2021 Corporate Goal | Achievements | Status |
Advancing Ophthalmology Product Pipeline | | |
| | |
•OCU400 — IND submission and development | •OCU400 IND application submitted to the FDA in November 2021. | •Complete |
•OCU410/OCU200 — initiate Good Laboratory Practice ("GLP") toxicology studies and cGMP production to enable eligibility for clinical studies in 2022 | •Process development activities for OCU410 have been initiated and are ongoing. Finalized the toxicology studies design and executed an agreement with a Contract Research Organization ("CRO") to conduct the toxicology studies. | •Complete |
| •Process development activities for OCU200 manufacturing have been completed. Completed the production of GLP batch material for manufacturing scale activities. Finalized the toxicology studies design and executed an agreement with a CRO to conduct the toxicology studies. | |
| | |
Contributing to COVID-19 Vaccination Efforts | | |
| | |
•COVAXIN — EUA submission | •Pediatric EUA submitted to the FDA in November 2021. | •Complete |
•COVAXIN — establish release testing to the United States for supply to the U.S. market | •Established U.S. release testing. During the U.S. release testing establishment, changes and additions were made to the release methods. The release testing of these methods is ongoing. | •Complete |
•COVAXIN — establish drug product manufacturing to increase supply | •The technology transfer was initiated with delays resulting from COVID-19 supply chain issues. | •Partially complete |
| | |
Funding | | |
| | |
•Raise adequate capital to achieve the current and future needs of the Company | •Raised $119.4 million through issuances of common stock under registered direct offerings and at-the-market sales agreements. | •Complete |
| | |
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 27 |
| | |
COMPENSATION DISCUSSION AND ANALYSIS (continued) |
| | | | | | | | |
2021 Corporate Goal | Achievements | Status |
Expanding Pipeline | | |
| | |
•Merger and acquisition discovery and licensing | •Evaluated opportunities and expanded our partnership with CanSinoBIO to include OCU410. | •Complete |
•Diversification of our pipeline in support of long-term value strategy | •Obtained the Canadian license for COVAXIN and acquired Vaccigen Ltd. | •Complete |
| | |
Human Capital | | |
| | |
•Recruit and maintain top talent | •In 2021, we recruited an additional 41 team members and maintained a turn-over rate less than the U.S. Bureau of Labor calculated national average. | •Complete |
| | |
In assessing performance outcomes and reflecting on performance for the full year, the Compensation Committee determined to weight each of the above goal categories at 20%, with even weighting for any sub-categories. In light of the partial completion of one-third of the goals in the COVID-19 vaccination efforts category, as depicted in the above table, and the Compensation Committee's review and discussion of our other achievements against the 2021 goals, the Compensation Committee determined that the 2021 corporate goals were achieved at a rate of 93%. The Compensation Committee also reviewed additional achievements outside of the previously approved corporate goals, as follows:
| | | | | |
2021 Additional Achievements | Status |
Advancing Ophthalmology Product Pipeline | |
| |
•European Medicines Agency Scientific Advice Working Party meeting request for OCU400 | •Complete |
| |
Contributing to COVID-19 Vaccination Efforts | |
| |
•COVAXIN Health Canada NDS | •Complete |
•COVAXIN IND submission for adult Phase 2/3 immuno-bridging and broadening clinical trial | •Complete |
| |
Human Capital | |
| |
•Creation of highly credible COVAXIN Scientific Advisory Board and external advisor support structure | •Complete |
| |
The Compensation Committee determined that the additional three achievements should be weighted at 5% each (15% in the aggregate). Lastly, consistent with prior practices, the Compensation Committee determined to base 100% of our Chief Executive Officer's 2021 annual incentive payout on corporate performance, and for the other NEOs, to base their 2021 annual incentive payout on 70% corporate performance and 30% individual performance. As a result of these assessments, the Compensation Committee approved a final achievement or payout factor for the 2021 annual incentive plan at 108% of target for the corporate performance. The approved 108% of corporate goal achievement was reflected in all our employee annual incentive calculations and was not used solely for NEOs. The individual performance factors for Mr. Subramanian and Dr. Tammara were based on their annual performance reviews and achievement was approved at 100% for each of these NEOs. Accordingly, bonuses were earned at 108% of target for Dr. Musunuri, and 105.6% of target for Mr. Subramanian and Dr. Tammara.
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 28 |
| | |
COMPENSATION DISCUSSION AND ANALYSIS (continued) |
The approved 2021 annual incentive targets and actual amounts paid to our NEOs in February 2022, for performance in 2021, are set forth in the following table:
| | | | | | | | | | | |
Name and Principal Position | Target Annual Cash Incentive (% of Base Salary) | Target Annual Cash Incentive | Actual Annual Cash Incentive Payout |
Shankar Musunuri, Ph.D., MBA | 50% | $270,650 | $292,302 |
Chairman of the Board and Chief Executive Officer | | | |
| | | |
Sanjay Subramanian, MBA | 40% | $154,000 | $162,624 |
Former Chief Financial Officer, Head of Corporate Development, and Corporate Secretary | | | |
| | | |
Vijay Tammara, Ph.D. | 30% | $109,200 | $115,315 |
Vice President, Regulatory Operations | | | |
| | | |
Long-Term Equity Incentives. We believe that equity grants provide the NEOs with a strong link to long-term performance and retention incentives, create an ownership culture, and help to align the interests of executive officers and stockholders. Our general practice has been to grant stock option awards to each executive officer at the start of employment and on an annual basis for performance and retention purposes. Stock options or other equity-based awards may also be granted for accomplishments of specific milestones. The size and value of annual equity awards are based on considerations included in the process for determining executive compensation, and for 2021, were based in part on the recommendations of the Prior Compensation Consultant.
In January 2021, we granted time-based stock options to each of our NEOs as part of the regular annual compensation program. These stock options have a ten-year term, will vest annually in equal installments over three years subject generally to continued employment with the Company, and have a per share exercise price of $1.83, which was the closing price of our common stock on the grant date. We grant stock options based on our belief that they naturally align executives with the creation of stockholder value and are an important long-term incentive vehicle to retain and promote our culture.
In April 2021, we granted performance-based stock options to each of our NEOs (the "Performance Options"). The Compensation Committee approved this additional grant to reinforce the sense of urgency of our COVAXIN program timeline and deliverables. The Performance Options have a ten-year term and a per share exercise price of $5.64, which was the closing price of our common stock on the grant date. These options are eligible to vest upon the achievement of five milestones determined by the Compensation Committee. If a performance milestone is achieved, half of the options earned as a result of that achievement will vest immediately and the other half will remain eligible to vest on the first anniversary of the achievement date, subject to the executive's continued service to the Company through such date. The Performance Options are weighted equally among the five milestones, with 20% of the total Performance Options allocated to each milestone. The 2021 milestones, the applicable performance periods relevant for each 2021 milestone, and the status of each 2021 milestone are set forth below:
| | | | | | | | | | | |
Milestone | Time Period for Achievement | % of Option Eligible to Vest | Performance Status |
File EUA with the FDA for COVAXIN; or, if Biologics License Application ("BLA") is required, file BLA with the FDA for COVAXIN | By end of 2021 for EUA; by end of 2022 if BLA is required | 20% | Completed |
| | | |
Establish U.S. release testing to deploy COVAXIN to market after the EUA or BLA submission | By end of 2021 | 20% | Completed |
| | | |
Completion of technology transfer and required validation to establish U.S. Drug Product Manufacturing for COVAXIN | By end of 2021 | 20% | Did not vest |
| | | |
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 29 |
| | |
COMPENSATION DISCUSSION AND ANALYSIS (continued) |
Two of the three milestones for 2021 were achieved as shown in the table above. As a result, 20% of the Performance Options vested during 2021 and 20% remain subject to a one-year service condition in order to vest. We did not meet the third milestone, as shown in the table above, and the corresponding 20% of the Performance Options were forfeited.
There are two milestones, valued at 40% of Performance Options still outstanding, which are focused on the commercialization of COVAXIN. The deadline for achievement of these milestones is the end of 2022. These milestones will be described further in our proxy statement for our 2023 annual stockholder meeting, by which time the corresponding Performance Options will have been either earned or forfeited. For details on the specific number of Performance Options granted to our NEOs during 2021, please see the table below entitled "Grant of Plan-Based Awards."
In January 2022, the Compensation Committee approved a new LTI mix for our NEOs, consisting of 25% time-based RSUs and 75% time-based stock options. The Compensation Committee determined this equity mix would further diversify the equity-based portion of the executives' compensation, support retention, and align with the LTI practices of our peer group. The 2022 RSUs and stock options are eligible to vest in equal installments over three years.
Additional Policies and Benefits
Restrictions on Hedging or Pledging. In March 2021, we adopted a revised insider trading policy that applies to all of our employees, including our NEOs and the Board. The policy, among other things, prohibits trading in call or put options involving our securities and other derivative securities, engaging in short sales of our securities, holding our securities in a margin account or pledging our securities to secure margin or other loans, and all forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts.
Clawback Policy. In December 2021, the Board adopted a clawback policy, pursuant to which the Compensation Committee will recover (including by means of recoupment and/or forfeiture of unvested amounts) covered compensation from a current or former executive officer, to the extent that the recipient received any amount in excess of the amount that the recipient should otherwise have received under the terms of the award or payment as a result of a financial restatement, unless it is impracticable or impermissible to do so. The clawback period extends to the three years immediately preceding the year in which such restatement is required. Compensation covered by this policy includes any compensation that is earned, granted, or vested based wholly or in part upon the attainment of any financial reporting measure.
Stock Ownership Guidelines. To further align the interests of our officers and directors and our stockholders, the Board adopted stock ownership guidelines in March 2022. These guidelines are applicable to our executive officers, other managers at the level of vice president and above, and our non-employee directors (the "Covered Persons"). The guidelines require each Covered Person to own shares of our common stock having an aggregate fair market value equal to or greater than the following multiple of their base salary or base cash retainer:
| | | | | |
Position | Ownership Threshold |
Chief Executive Officer | 6x base salary |
Other Executive Officers | 3x base salary |
Other Covered Executives | 1x base salary |
Non-Employee Directors | 5x base cash retainer |
For purposes of these guidelines, the following shares will be considered "owned":
•shares held outright or beneficially owned by the Covered Person, his or her spouse and minor children, or trusts for the benefit of these individuals;
•all shares underlying time-based restricted stock or RSU awards, whether or not vested; and
•shares underlying vested performance-based restricted stock or RSU awards.
Unvested stock options and vested stock options not yet exercised do not count towards meeting the ownership thresholds. Covered Persons have five years after first becoming subject to the guidelines to attain the specified level of equity ownership. Any individual whose ownership threshold increases as a result of a promotion will have three years to attain the increased level of equity ownership.
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 30 |
| | |
COMPENSATION DISCUSSION AND ANALYSIS (continued) |
Following the five-year phase-in period, Covered Persons who do not meet the required ownership threshold will be generally prohibited from selling stock acquired through equity awards (other than shares sold or withheld to satisfy the exercise price or taxes applicable to the award) until the required ownership threshold has been met. In addition, our Compensation Committee may take other steps to enforce these guidelines as it deems appropriate.
Other Benefits. We provide certain additional benefits to executive officers that are also generally available to our other employees, including health and welfare benefits. We also maintain a tax-qualified savings plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (the "Code"). Employees who participate in the plan may make elective deferrals to the plan, subject to the limitations imposed by the Code. We currently match 100% of employee deferrals under the 401(k) plan, up to a limit of 3% of the employee's eligible compensation, plus 50% of employee deferrals between 3-5% of the employee's eligible compensation. The match begins six months after commencement of employment.
Indemnification Agreements. Our Charter and Bylaws require us to indemnify our directors and officers to the fullest extent permitted by Delaware law. We have also entered into indemnity agreements with certain officers and directors. These agreements provide, among other things, that we will indemnify the officer or director, under the circumstances and to the extent provided for in the agreement, for expenses, damages, judgments, fines, and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason of his or her position as our director, officer, or agent to the fullest extent permitted under Delaware law and our Bylaws and Charter.
Employment Agreements
Shankar Musunuri, Ph.D., MBA. On January 1, 2020, we entered into an amended and restated employment agreement with Dr. Musunuri, with respect to his employment as Chief Executive Officer and Chairman of our Board, which was further amended in April 2022 (as amended, the "Musunuri Agreement").
The Musunuri Agreement provides for an annual base salary in an amount determined by the Compensation Committee, which is to be reviewed and may be adjusted annually. Dr. Musunuri's annual base salary was increased from $500,000 to $541,300 for the 2021 fiscal year and further increased to $715,000 for the 2022 fiscal year. Dr. Musunuri is eligible to participate in our benefit plans, programs, and arrangements that may exist from time to time on the same terms that apply generally to other similarly situated employees. The Musunuri Agreement provided for an annual bonus target amount of 50% of his base salary, which was increased to 66% for the 2022 fiscal year, with such bonus based upon performance criteria set by the Compensation Committee.
Sanjay Subramanian, MBA. Effective as of September 10, 2019, we entered into an employment agreement with Mr. Subramanian, as amended on January 1, 2020 (the "Subramanian Agreement") with respect to his employment as Chief Financial Officer, Head of Corporate Development, and Corporate Secretary. Mr. Subramanian resigned from his role as our Chief Financial Officer, Head of Corporate Development, and Corporate Secretary, effective March 18, 2022.
The Subramanian Agreement provided for an annual base salary of $365,400, which was increased to $385,000 for the 2021 fiscal year. Mr. Subramanian was eligible to participate in our benefit plans, programs, and arrangements that may have existed from time to time on the same terms that applied generally to other similarly situated employees. The Subramanian Agreement provided for an annual bonus target amount of 35% of his base salary, with such bonus to be based upon performance criteria set by the Board. The annual bonus target was increased to 40% by the Compensation Committee effective 2021.
Vijay Tammara, Ph.D. Effective January 1, 2020, we entered into an employment agreement with Dr. Tammara, which was amended and restated on December 10, 2021 (the "Tammara Agreement") with respect to his employment as Vice President, Regulatory Operations.
The Tammara Agreement provides for an annual base salary of $364,000 for the 2021 fiscal year. Dr. Tammara is eligible to participate in our benefit plans, programs, and arrangements that may exist from time to time on the same terms that apply generally to other similarly situated employees. The Tammara Agreement provides for an annual bonus target amount of 30% of his base salary, with such bonus based upon performance criteria set by the Compensation Committee and the Chief Executive Officer.
The employment agreements above also provide for certain payments and benefits in the event of qualifying terminations of employment. The severance benefits are an essential element of the overall executive compensation package and assist us in recruiting and retaining talented individuals and aligning the executive's interests with the best interests of the stockholders. Payments due upon certain terminations of employment are described below under "Potential Payments Upon Termination or
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 31 |
| | |
COMPENSATION DISCUSSION AND ANALYSIS (continued) |
Change in Control." Each Named Executive Officer is also subject to a Non-Competition Agreement and a Non-Disclosure and Business Ideas Agreement.
Compensation Risk Assessment
The Compensation Committee considers and evaluates risks related to our cash and equity-based compensation programs and practices as well as evaluates whether our compensation plans encourage participants to take excessive risks that are reasonably likely to have a material adverse effect on us. Consistent with SEC disclosure requirements, the Compensation Committee has worked with management to assess compensation policies and practices for our employees and has concluded that such policies and practices do not create risks that are reasonably likely to have a material adverse effect on us.
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 32 |
| | |
COMPENSATION COMMITTEE REPORT |
The Compensation Committee has reviewed and discussed the CD&A required by Item 402(b) of Regulation S-K, which appears in this Proxy Statement, with our management. Based on this review and discussion, the Compensation Committee recommended to our Board that the CD&A be included in this Proxy Statement and our 2021 Annual Report.
Ocugen, Inc.
Compensation Committee
Kirsten Castillo, Chair
Junge Zhang, Ph.D.
Prabhavathi Fernandes, Ph.D., FIDSA
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 33 |
Summary Compensation Table
The following table shows for the years ended December 31, 2021, 2020, and 2019, compensation awarded to or paid to, or earned by, the NEOs. For 2021, our NEOs consist of our Chief Executive Officer, our former Chief Financial Officer, and our Vice President, Regulatory Operations, who served as an executive officer for a portion of 2021. These individuals were the only three executive officers serving in 2021.
| | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | Year | Salary | Bonus (1) | Stock Option Awards (2) | All Other Compensation (3) | Total |
Shankar Musunuri, Ph.D., MBA | 2021 | $541,300 | $292,302 | $7,296,149 | $11,600 | $8,141,351 |
Chairman of the Board and Chief Executive Officer | 2020 | $500,000 | $269,273 | $771,505 | $11,400 | $1,552,178 |
2019 | $420,000 | $141,120 | — | $11,200 | $572,320 |
| | | | | | |
Sanjay Subramanian, MBA (4) | 2021 | $385,000 | $162,624 | $2,043,437 | $11,600 | $2,602,661 |
Former Chief Financial Officer, Head of Corporate Development, and Corporate Secretary | 2020 | $365,400 | $134,791 | $150,637 | $10,962 | $661,790 |
| | | | | | |
Vijay Tammara, Ph.D. (5) | 2021 | $364,000 | $115,315 | $816,670 | $11,600 | $1,307,585 |
Vice President, Regulatory Operations | | | | | | |
| | | | | | |
(1) The amounts represent annual performance cash bonuses earned in the applicable year and paid in the following year.
(2) Amounts represent the aggregate grant date fair value of option awards, computed in accordance with ASC 718. For a discussion of the assumptions we employ in determining the grant date fair value of stock option awards, please see Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2021 Annual Report.
(3) Amounts in this column are matching contributions under our 401(k) retirement plan earned during the fiscal year.
(4) Mr. Subramanian commenced service with us on October 1, 2019 and resigned on March 18, 2022. As Mr. Subramanian was not a NEO in 2019, compensation information is disclosed for 2021 and 2020 only.
(5) Dr. Tammara commenced service with us on December 1, 2016. As Dr. Tammara was not a NEO in 2020 and 2019, compensation information is disclosed for 2021 only.
Grants of Plan-Based Awards
The following table presents estimated future payouts under equity incentive plan awards granted to each of our NEOs during 2021.
| | | | | | | | | | | | | | | | | |
Name and Principal Position | Grant Date | Target (1) | All Other Stock Option Awards: Number of Securities Underlying Option | Exercise or Base Price of Stock Option Awards (2) | Grant Date Fair Value of Stock Option Awards (3) |
Shankar Musunuri, Ph.D., MBA | 1/1/2021 | — | 1,757,000 | $1.83 | $2,641,941 |
Chairman of the Board and Chief Executive Officer | 4/19/2021 | 985,000 | — | $5.64 | $4,654,208 |
| | | | | |
Sanjay Subramanian, MBA | 1/1/2021 | — | 800,000 | $1.83 | $1,203,317 |
Former Chief Financial Officer, Head of Corporate Development, and Corporate Secretary | 4/19/2021 | 177,800 | — | $5.64 | $840,120 |
| | | | | |
Vijay Tammara, Ph.D. | 1/1/2021 | — | 220,500 | $1.83 | $332,349 |
Vice President, Regulatory Operations | 4/19/2021 | 102,500 | — | $5.64 | $484,321 |
| | | | | |
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 34 |
| | |
EXECUTIVE COMPENSATION (continued) |
(1) These are performance-based stock option awards. Each award is divided into five equal tranches, with each tranche subject to a performance milestone. Any tranche earned upon achievement of the applicable milestone is then subject to an additional time-based vesting requirement. During the year ended December 31, 2021, options with respect to 197,000, 35,560, and 20,500 shares for Dr. Musunuri, Mr. Subramanian, and Dr. Tammara, respectively, were forfeited because the applicable milestone was not achieved. For more information on the design of these awards, see "CD&A — Long-Term Equity Incentives".
(2) The exercise price of each stock option is the closing price as reported on Nasdaq on the grant date (or, if the grant date is not a trading day, the closing price on the immediately preceding day).
(3) Amounts reported reflect the aggregate grant date fair value as calculated in accordance with ASC 718 and as shown in the Summary Compensation Table under the column "Stock Option Awards". These amounts do not represent the actual amounts paid or realized by the NEO during 2021. The assumptions used in valuing equity awards are described in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2021 Annual Report.
Outstanding Equity Awards at Fiscal Year-End
The following table summarizes the number of shares of our common stock underlying outstanding equity incentive plan awards for each of the NEOs as of December 31, 2021.
| | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | Vesting Commencement Date (1) | Number of Securities Underlying Unexercised Stock Options Exercisable (a) | Number of Securities Underlying Unexercised Stock Options Unexercisable (b) | Number of Securities Underlying Unexercised Unearned Stock Options (c) | Stock Option Exercise Price | Stock Option Expiration Date |
Shankar Musunuri, Ph.D., MBA | 8/26/2015 | 86,292 | — | — | $1.88 | 8/26/2025 |
Chairman of the Board and Chief Executive Officer | 1/2/2020 | — | 622,352 | — | $0.51 | 1/2/2030 |
5/7/2020 | 171,824 | 904,763 | — | $0.33 | 5/7/2030 |
1/1/2021 | — | 1,757,000 | — | $1.83 | 1/1/2031 |
4/19/2021 | 197,000 (2) | 197,000 (2) | 394,000 (3) | $5.64 | 4/19/2031 |
| | | | | | |
Sanjay Subramanian, MBA | 10/1/2019 | — | 7,990 | — | $2.19 | 10/1/2029 |
Former Chief Financial Officer, Head of Corporate Development, and Corporate Secretary | 1/2/2020 | — | 71,183 | — | $0.51 | 1/2/2030 |
5/5/2020 | — | 246,170 | — | $0.34 | 5/5/2030 |
1/1/2021 | — | 800,000 | — | $1.83 | 1/1/2031 |
4/19/2021 | 35,560 (2) | 35,560 (2) | 71,120 (3) | $5.64 | 4/19/2031 |
| | | | | | |
Vijay Tammara, Ph.D. | 4/26/2016 | 2,191 | — | — | $2.94 | 4/26/2026 |
Vice President, Regulatory Operations | 8/17/2017 | 7,191 | — | — | $7.56 | 8/17/2027 |
12/15/2017 | 7,191 | — | — | $7.56 | 12/15/2027 |
| 8/13/2018 | 2,397 | — | — | $12.18 | 8/13/2028 |
| 12/7/2018 | 9,588 | — | — | $13.52 | 12/7/2028 |
| 1/2/2020 | 6,500 | 51,761 | — | $0.51 | 1/2/2030 |
| 5/5/2020 | 6,858 | 13,715 | — | $0.34 | 5/5/2030 |
| 8/14/2020 | 14,800 | 27,778 | — | $0.56 | 8/14/2030 |
| 1/1/2021 | — | 220,500 | — | $1.83 | 1/1/2031 |
| 4/19/2021 | 20,500 (2) | 20,500 (2) | 41,000 (3) | $5.64 | 4/19/2031 |
| | | | | | |
(1) Each stock option award was granted pursuant to the Ocugen, Inc. 2014 Stock Option Plan (the "2014 Plan") or the Ocugen, Inc. 2019 Equity Incentive Plan (the "2019 Plan"). The shares subject to each stock option generally vest or have vested in three equal installments, subject generally to continued employment, on the first three anniversaries of the vesting commencement date, with the exception of the Performance Options as further discussed in (2) and (3) below.
(2) With respect to each milestone associated with our performance-based equity program, upon the Compensation Committee's determination that the applicable milestone has been achieved, 50% of the Performance Options subject to such milestone will vest (the date of such determination, the "Achievement Date"). The remaining 50% of the Performance Options subject to such
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 35 |
| | |
EXECUTIVE COMPENSATION (continued) |
milestone will vest on the first anniversary of the Achievement Date subject to the employee's continued service with us. Upon a change in control (as defined in the 2019 Plan), all Performance Options will vest in full. As of December 31, 2021, two performance-based milestones had been achieved for the Performance Options described above in the section titled "CD&A — Long-Term Equity Incentives" on page 29. Half of the Performance Options subject to these performance-based milestones vested immediately and are reflected in column (a) above and half will vest subject generally to continued employment one year after the Achievement Date and are reflected in column (b) above.
(3) The portion of Performance Options for which the Achievement Date for the performance-based milestone has not occurred are reflected in column (c). These performance milestones relate to the commercialization of COVAXIN during 2022. To the extent earned, half of these Performance Options would be subject to an additional service-based vesting condition after the applicable performance-based milestone is achieved. For more information on the design of these awards, see section titled "CD&A — Long-Term Equity Incentives".
Stock Option Exercises in 2021
The following table sets forth certain information regarding stock options exercised during the year ended December 31, 2021 with respect to each of our NEOs.
| | | | | | | | |
| Stock Option Awards |
Name and Principal Position | Number of Shares Acquired on Exercise | Value Realized on Exercise (1) |
Shankar Musunuri, Ph.D., MBA | |
|
Chairman of the Board and Chief Executive Officer | 591,734 | $6,669,330 |
| | |
Sanjay Subramanian, MBA | | |
Former Chief Financial Officer, Head of Corporate Development, and Corporate Secretary | 174,657 | $1,031,126 |
| | |
Vijay Tammara, Ph.D. | | |
Vice President, Regulatory Operations | 50,019 | $575,630 |
| | |
(1) Amounts in this column reflect the difference between the market price of the underlying shares of stock upon exercise and the exercise price of the stock options.
Potential Payments Upon Termination or Change in Control
Pursuant to the employment agreements between us and the NEOs as in effect on December 31, 2021, in the event of the termination of an executive's employment by us without cause or resignation by the executive for good reason, each executive will be eligible to receive base salary continuation and payment of his Consolidated Omnibus Budget Reconciliation Act ("COBRA") premiums for continued health benefit coverage for a specified period of time (Dr. Musunuri — 24 months for base salary continuation and 18 months for payment of his COBRA premiums; Mr. Subramanian — 12 months for both; and Dr. Tammara — 12 months for both (increased from 9 months pursuant to the amendment of his agreement in December of 2021)).
Pursuant to the employment agreements, in the event of a termination three months prior to or 12 months following a change of control by us without cause or resignation by the executive for good reason, each executive will also be eligible to receive a multiple of his target bonus, paid in lump sum (Dr. Musunuri — 2x; Mr. Subramanian — 1x; and Dr. Tammara — 0.75x). In that case, each of the NEOs would also be entitled to full vesting acceleration of otherwise unvested equity awards. In addition, the NEOs' stock option agreements provide for full vesting upon a change in control of the Company.
The employment agreements each require the execution and non-revocation of a release of claims for the receipt of payments and benefits described above. In addition, the NEOs are bound by a non-competition covenant and a non-interference covenant with respect to our customers, suppliers, or vendors, in each case for 12 months following the termination of employment. We do not provide for any 280G "gross-up" payments.
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 36 |
| | |
EXECUTIVE COMPENSATION (continued) |
For purposes of the employment agreements:
•"Cause" is generally defined to mean a failure to substantially perform a material portion of the duties of employment or to comply with our written rules and policies, which failure continues uncured according to procedures set forth in agreement; engaging in willful and serious misconduct or fraudulent conduct; or conviction of, or plea of no contest to, a felony or other crime the circumstances of which are substantially related to the executive's position; and
•"Good Reason" is generally defined to mean, without consent, a reduction in the executive's annual rate of base compensation (unless a proportionate reduction is made across substantially all our executives or employees); a termination or material reduction of a material benefit under any of our benefit plans, programs, or arrangements in which the executive participates (unless such termination or reduction is made across all our executives or employees); a material reduction in the executive's job title, powers, or authority (and for our former Chief Financial Officer, a change in reporting relationship); our material failure to comply with the terms of the agreement or any stock option or similar agreement with the executive then in effect; or a requirement to relocate or transfer the principal office to a location of more than 50 miles.
For each NEO, the following table sets forth quantitative estimates of the payments and benefits that would have become payable in the following scenarios: (i) if the NEO's employment had been terminated without cause or he had resigned for good reason on December 31, 2021, and no change in control had occurred within three months prior to or 12 months following the termination ("Involuntary Termination"), (ii) if a change in control had occurred on December 31, 2021 (irrespective of employment status following the change in control) ("Change in Control"), and (iii) if the NEO's employment had been terminated without cause or he had resigned for good reason on December 31, 2021, and a change in control had occurred within three months prior to or twelve months following the termination ("CIC Involuntary Termination").
| | | | | | | | | | | | | | | | | |
Name and Principal Position | Salary Continuation | Cash Bonus Payment | Accelerated Equity Vesting | Benefit Continuation | Total |
Shankar Musunuri, Ph.D., MBA |
| | |
|
|
Chairman of the Board and Chief Executive Officer | | | | | |
Involuntary Termination | $1,082,600 (1) | — | — | $57,488 (2) | $1,140,088 |
Change in Control | — | — | $11,111,006 (3) | — | 11,111,006 |
CIC Involuntary Termination | $1,082,600 (1) | $541,300 (4) | $11,111,006 (3) | $57,488 (2) | $12,792,394 |
| | | | | |
Sanjay Subramanian, MBA |
| | |
|
|
Former Chief Financial Officer, Head of Corporate Development, and Corporate Secretary | | | | | |
Involuntary Termination | $385,000 (1) | — | — | $9,566 (2) | $394,566 |
Change in Control | — | — | $3,518,762 (3) | — | $3,518,762 |
CIC Involuntary Termination | $385,000 (1) | $154,000 (4) | $3,518,762 (3) | $9,566 (2) | $4,067,328 |
| | | | | |
Vijay Tammara, Ph.D. |
| | |
|
|
Vice President, Regulatory Operations | | | | | |
Involuntary Termination | $364,000 (1) | — | — | — (2) | $364,000 |
Change in Control | — | — | $977,279 (3) | — | $977,279 |
CIC Involuntary Termination | $364,000 (1) | $81,900 (4) | $977,279 (3) | — (2) | $1,423,179 |
| | | | | |
(1) Continuation of base salary payments following termination of employment paid in installments over a 24-month period for Dr. Musunuri and a 12-month period for Mr. Subramanian and Dr. Tammara.
(2) Estimated value of continued group health and dental insurance for 18 months for Dr. Musunuri and 12 months for Mr. Subramanian and Dr. Tammara.
(3) Amounts reflect the intrinsic value of otherwise unvested stock options (i.e., for each otherwise unvested stock option, the difference between the closing stock price of our common stock of $4.55 on December 31, 2021 and the exercise price applicable to such stock option). The accelerated vesting occurs upon a Change in Control, so we have shown the same value for a Change in Control without an accompanying termination and a CIC Involuntary Termination.
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 37 |
| | |
EXECUTIVE COMPENSATION (continued) |
(4) Lump sum payment equal to 200% of the target bonus for Dr. Musunuri, 100% of the target bonus for Mr. Subramanian, and 75% of the target bonus for Dr. Tammara.
Resignation of Mr. Subramanian. As noted above, Mr. Subramanian resigned from employment on March 18, 2022. His resignation was without "good reason" under his employment agreement and therefore he was not entitled to any severance benefits in connection with such resignation. At our request, Mr. Subramanian has agreed to provide us with six months of transitional consulting advice ("Consulting Services"). In return for providing us with these Consulting Services, we paid Mr. Subramanian $51,951 (which amount represents a pro-rata portion of his 2022 target annual cash incentive, with such pro-ration based on the portion of 2022 completed as of the date of his resignation). In addition, Mr. Subramanian’s equity awards will remain outstanding and continue to vest while he performs the Consulting Services through June 18, 2022.
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 38 |
| | |
EQUITY COMPENSATION PLAN INFORMATION |
The following table provides certain information as of December 31, 2021, with respect to our equity compensation plan in effect on that date.
| | | | | | | | | | | |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants, and rights (a) | Weighted-average exercise price of outstanding options, warrants, and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
Equity compensation plans approved by security holders (1) | 9,230,475 | $2.18 | 1,201,710 (2) |
Equity compensation plans not approved by security holders (3) | 269,903 | $4.99 | 398,771 |
Inducement Grants | 777,600 | $6.09 | — |
Total | 10,277,978 | $2.55 | 1,600,481 |
(1) Includes securities issuable under the 2019 Plan.
(2) The 2019 Plan contains an "evergreen" provision, pursuant to which the aggregate number of shares of common stock reserved for issuance under the 2019 Plan shall be automatically increased by a number equal to the lesser of (i) 4.0% of the total number of shares of common stock outstanding on December 31 of the preceding year and (ii) a number of shares of common stock determined by the Board.
(3) Includes securities issuable under the 2014 Plan. Persons eligible to participate in the 2014 Plan are those employees, officers and directors of, and consultants and advisors to us, as selected from time to time by the Compensation Committee, as administrators. The 2014 Plan permits the grant of (1) stock options to purchase common stock and (2) shares of common stock. The per share option exercise price and term of each option was determined by the Compensation Committee, but the exercise prices in each case were not less than fair market value of the common stock on the date of grant. The 2014 Plan provides that in connection with a "change in control," as defined in the 2014 Plan, the Compensation Committee may take whatever action with respect to outstanding options it deems necessary or desirable, including, without limitation, accelerating the vesting, expiration, or termination date of such stock options. No stock options may be granted under the 2014 Plan after February 10, 2024.
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 39 |
| | |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS |
Described below are any transactions occurring since January 1, 2020 and any currently proposed transactions to which we were a party and in which:
•the amount involved in the transaction exceeds $120,000; and
•a director, executive officer, holder of more than 5% of our outstanding capital stock, or any member of such person's immediate family that has or will have a direct or indirect material interest, other than the compensation, termination, and change in control arrangements that are described in "Executive Compensation."
Collaborations with Advaite, Inc.
In April 2020, we entered into an agreement with Advaite, Inc., ("Advaite") to provide certain support services for Advaite's development of a diagnostic test kit that is designed to detect antibodies to SARS-CoV-2, the virus that causes COVID-19 infection. Advaite was co-founded and is being managed by Mr. Karthik Musunuri, the son of our Chairman of the Board and Chief Executive Officer, Dr. Shankar Musunuri. Pursuant to the agreement, we were paid on an hourly basis at a rate between $200 to $375 for those hours actually worked on Advaite related projects by specific employees, and we will receive tiered royalty payments based on cumulative net sales of the antibody test kits. As of December 31, 2021, we have received $42,620 in royalties under the agreement with Advaite.
In December 2021, we entered into a new agreement with Advaite to purchase 2,000 COVID-19 SalivaDirect™ Collection Test Kits (the "Test Kits") for use in our Phase 2/3 immuno-bridging and broadening clinical trial and safety clinical trial for COVAXIN. Pursuant to the agreement, we agreed to pay $320,000 to Advaite for such COVID-19 test kits and the processing of such test kit samples.
In March 2022, we entered into a services agreement with Advaite to engage Advaite to develop and validate bioanalytical methods for SARS-CoV-2 Spike S1 ELISA, in support of our clinical trials and ongoing research. The SARS-CoV-2 Spike S1 ELISA is a quantitative assay intended to serve clinical trial testing for quantitation of antibodies to SARS-CoV-2 Spike S1. Pursuant to the services agreement, we agreed to pay approximately $295,000 to Advaite for such services.
Sponsored Research Agreement with University of Colorado, Denver
In February 2021, we entered into a sponsored research agreement (the "UoC Agreement") with the Regents of the University of Colorado, for and on behalf of the University of Colorado, Denver ("UoC Denver"). The UoC Agreement was effective as of December 15, 2020. Pursuant to the UoC Agreement, UoC Denver agreed to provide certain specified research services related to viral vector formulations for targeted delivery to treat retinal diseases. As consideration for the performance of such services, we agreed to pay to UoC Denver a total of approximately $250,000. The research services are to be carried out under the direction and supervision of Dr. Kompella, a member of our Board. The UoC Agreement contains customary terms related to confidentiality, publicity rights to research results and intellectual property, and indemnification.
Employment Agreements
For information on employment arrangements and compensation for service as our officers or on our Board, see "Director Compensation" and "Executive Compensation" sections of this Proxy Statement.
Indemnification Agreements
Our Charter and Bylaws requires us to indemnify our directors and officers to the fullest extent permitted by Delaware law. We also entered into indemnity agreements with certain officers and directors. These agreements provide, among other things, that we will indemnify the officer or director, under the circumstances and to the extent provided for in the agreement, for expenses, damages, judgments, fines, and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason of their position as a director, officer, or other agent of us, and otherwise to the fullest extent permitted under Delaware law and our Bylaws and Charter.
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 40 |
| | |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
The following table sets forth certain information regarding the beneficial ownership of common stock as of April 1, 2022 by (a) each person known by us to be the beneficial owner of more than 5% of the outstanding shares of our common stock, (b) each Named Executive Officer identified in the Summary Compensation Table above, (c) each director and nominee for director, and (d) all executive officers and directors as a group.
The percentage of common stock outstanding is based on 215,631,426 shares of our common stock outstanding as of April 1, 2022. For purposes of the table below, and in accordance with the rules of the SEC, we deem shares of common stock subject to stock options or warrants that are currently exercisable or exercisable within 60 days of April 1, 2022 to be outstanding and to be beneficially owned by the person holding the stock options or warrants for the purpose of computing the percentage ownership of that person, but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person. Except as otherwise noted, each of the persons or entities in this table has sole voting and investing power with respect to all of the shares of common stock beneficially owned by them, subject to community property laws, where applicable. Except as otherwise noted below, the street address of each beneficial owner is c/o Ocugen, Inc., 263 Great Valley Parkway, Malvern, PA 19355.
| | | | | | | | |
| Shares Beneficially Owned |
Name of Beneficial Owner | Number of Shares | Percentage |
Greater than 5% Stockholders | | |
| | |
Blackrock, Inc.(1) | 12,931,131 | 6.00% |
| | |
State Street Corporation (2) | 29,153,704 | 13.52% |
| | |
SSGA FUNDS MANAGEMENT, INC. (3) | 25,207,086 | 11.69% |
| | |
Named Executive Officers and Directors | |
| | |
Shankar Musunuri, Ph.D., MBA (4) | 3,191,412 | 1.47% |
| | |
Sanjay Subramanian, MBA (5) | 496,494 | * |
| | |
Vijay Tammara, Ph.D. (6) | 190,399 | * |
| | |
Ramesh Kumar, Ph.D. (7) | 70,269 | * |
| | |
Junge Zhang, Ph.D. (8) | 977,173 | * |
| | |
Uday B. Kompella, Ph.D. (9) | 765,713 | * |
| | |
Manish Potti (10) | 101,948 | * |
| | |
Kirsten Castillo (11) | 145,769 | * |
| | |
Prabhavathi Fernandes, Ph.D., FIDSA (12) | 62,269 | * |
| | |
Marna C. Whittington, Ph.D. (13) | 6,910 | * |
| | |
All Named Executive Officers and directors as a group (11 persons) (14) | 6,142,909 | 2.81% |
| | |
* Less than 1% below | | |
(1) Consists of 12,931,131 shares of common stock, which is based on the most recent publicly disclosed information available. The address for BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.
(2) Consists of 29,153,704 shares of common stock, which is based on the most recent publicly disclosed information available. The address for State Street Corporation is One Lincoln Street, Boston, MA 02111.
(3) Consists of 25,207,086 shares of common stock, which is based on the most recent publicly disclosed information available. The address for SSGA FUNDS MANAGEMENT, INC. is One Lincoln Street, Boston, MA 02111.
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 41 |
| | |
EQUITY COMPENSATION PLAN INFORMATION |
(4) Consists of (i) 406,000 shares of common stock, 7,191 shares of common stock issuable pursuant to warrants exercisable within 60 days of April 1, 2022, and 1,632,517 shares of common stock issuable pursuant to stock options exercisable within 60 days of April 1, 2022 held by Dr. Musunuri; and (ii) 1,145,299 shares of common stock and 405 shares of common stock issuable pursuant to warrants exercisable within 60 days of April 1, 2022, in each case held by KVM Holdings, LLC. Dr. Musunuri is a member and officer of KVM Holdings, LLC and has voting and investment power over the shares held by KVM Holdings, LLC.
(5) Consists of 35,591 shares of common stock and 460,903 shares issuable pursuant to stock options exercisable within 60 days of April 1, 2022.
(6) Consists of 190,399 shares of common stock issuable pursuant to stock options exercisable within 60 days of April 1, 2022.
(7) Consists of 70,269 shares of common stock issuable pursuant to stock options exercisable within 60 days of April 1, 2022.
(8) Consists of (i) 88,000 shares of common stock and 12,269 shares of common stock issuable pursuant to stock options exercisable within 60 days of April 1, 2022 held by Dr. Zhang; and (ii) 876,904 shares of common stock held by Gupiao Trust. Dr. Zhang is the beneficiary of Gupiao Trust and has voting and investment power over securities held by Gupiao Trust.
(9) Consists of (i) 550,674 shares of common stock, 354 shares of common stock issuable pursuant to warrants exercisable within 60 days of April 1, 2022, and 60,269 shares of common stock issuable pursuant to stock options exercisable within 60 days of April 1, 2022 held by Dr. Kompella; and (ii) 154,416 shares of common stock held by Kompella LLC. Dr. Kompella has voting and investment power over the shares of common stock held by Kompella LLC.
(10) Consists of (i) 45,000 shares of common stock and 27,269 shares of common stock issuable pursuant to stock options exercisable within 60 days of April 1, 2022 held by Mr. Potti; and (ii) 27,695 shares of common stock and 1,984 shares of common stock issuable pursuant to warrants exercisable within 60 days of April 1, 2022, in each case held by Scotland Parkway LLC. Mr. Potti is a managing member of Scotland Parkway LLC and has voting and investment power over securities held by Scotland Parkway LLC.
(11) Consists of 50,000 shares of common stock and 95,769 shares of common stock issuable pursuant to stock options exercisable within 60 days of April 1, 2022.
(12) Consists of 62,269 shares of common stock issuable pursuant to stock options exercisable within 60 days of April 1, 2022.
(13) Consists of (i) 5,910 shares of common stock issuable pursuant to stock options exercisable within 60 days of April 1, 2022 held by Dr. Whittington; and (ii) 1,000 shares of common stock held by Marna C. Whittington Revocable Trust. Dr. Whittington is the trustee and sole beneficiary of the Marna C. Whittington Revocable Trust.
(14) Consists of 3,380,579 shares of common stock, 9,934 shares of common stock issuable pursuant to warrants exercisable within 60 days of April 1, 2022, and 2,752,396 shares of common stock issuable pursuant to stock options exercisable within 60 days of April 1, 2022.
DELINQUENT SECTION 16(A) REPORTS
Section 16(a) of the Exchange Act requires our officers, directors, and persons who own more than 10% of a registered class of our equity securities to file reports of securities ownership and changes in such ownership with the SEC. Officers, directors, and greater than 10% stockholders are also required by SEC rules to furnish us with copies of all Section 16(a) forms they file.
Based solely on a review of our records and written representations by the persons required to file such reports, management believes that all filing requirements of Section 16(a) were satisfied with respect to the 2021 fiscal year, except for a late Form 4 filed by Mr. Zhang in connection with the exercise of warrants indirectly held by Mr. Zhang on November 16, 2021, which was filed late due to an administrative error.
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 42 |
ITEM 1: ELECTION OF CLASS II DIRECTORS FOR A THREE-YEAR TERM EXPIRING IN 2025
At the Annual Meeting, our stockholders will vote on the election of two Class II director nominees named in this Proxy Statement as directors, each to serve until our 2025 Annual Meeting of Stockholders and until their respective successors are elected and qualified. Our Board has unanimously nominated Uday B. Kompella, Ph.D. and Marna C. Whittington, Ph.D. for election to our Board at the Annual Meeting.
Each of the nominees has agreed to be named and to serve, and we expect each nominee to be able to serve if elected. If any nominee is unable to serve, the Nominating and Corporate Governance Committee will recommend to our Board a replacement nominee. The Board may then designate the other nominee to stand for election. If you voted for the unavailable nominee, your vote will be cast for their replacement.
| | | | | |
OUR BOARD UNANIMOUSLY RECOMMENDS STOCKHOLDERS VOTE FOR THE ELECTION OF UDAY B. KOMPELLA, PH.D. AND MARNA C. WHITTINGTON, PH.D. | |
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 43 |
| | |
ITEMS TO BE VOTED ON (continued) |
ITEM 2: RATIFICATION OF APPOINTMENT OF ERNST & YOUNG AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2022
The Audit Committee has appointed and engaged Ernst & Young to serve as our Independent Registered Public Accounting Firm to audit our consolidated financial statements for the 2022 fiscal year and to perform audit-related services.
Stockholders are hereby asked to ratify the Audit Committee's appointment of Ernst & Young as our Independent Registered Public Accounting Firm for the 2022 fiscal year.
The Audit Committee is solely responsible for selecting our independent auditors. Although stockholder ratification of the appointment of Ernst & Young to serve as our Independent Registered Public Accounting Firm is not required by law or our organizational documents, the Board has determined that it is desirable to seek stockholders' ratification as a matter of good corporate governance in view of the critical role played by Independent Registered Public Accounting Firms in maintaining the integrity of financial controls and reporting. If the stockholders do not ratify the appointment of Ernst & Young, the Audit Committee will reconsider its selection and whether to engage an alternative Independent Registered Public Accounting Firm.
Representatives of Ernst & Young are expected to attend the Annual Meeting where they will be available to respond to appropriate questions and, if they desire, to make a statement.
| | | | | |
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION OF ERNST & YOUNG AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2022. | |
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 44 |
| | |
ITEMS TO BE VOTED ON (continued) |
ITEM 3: APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
We are offering our stockholders an opportunity to cast an advisory vote to approve the compensation of our Named Executive Officers, as disclosed in this Proxy Statement, pursuant to Section 14A of the Exchange Act, which was put in place by the Dodd-Frank Wall Street Reform and Consumer Protection Act enacted in July 2010 (commonly referred to as a "say-on-pay" vote). The say-on-pay vote gives you, as a stockholder, the opportunity to express your views regarding the compensation of our Named Executive Officers by voting to approve or not approve such compensation as described in this Proxy Statement. Although the vote is non-binding, our Board and our Compensation Committee value the opinion of our stockholders and will take into account the outcome of the vote when considering future executive compensation elements and the overall program design, as it relates to our Named Executive Officers. During the 2020 annual meeting, stockholders voted to hold the say-on-pay vote on an annual basis.
Our Compensation Committee believes that the objectives of our executive compensation program, as it relates 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, our 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, pays for performance, and promotes an alignment between the interests of our Named Executive Officers and our stockholders. Accordingly, we are asking our stockholders to approve the compensation of our Named Executive Officers. This advisory vote is not intended to be limited or specific to any particular element of compensation, but rather to cover the overall compensation of our Named Executive Officers, and the compensation policies and practices described in this Proxy Statement as they relate to our Named Executive Officers.
Prior to casting your vote on this proposal, you are encouraged to read this Proxy Statement, and in particular the section entitled "Executive Compensation," including the compensation tables and narrative discussion, for a more detailed discussion of our compensation philosophy, objectives, and programs.
| | | | | |
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE, ON AN ADVISORY BASIS, FOR THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS. | |
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 45 |
OTHER MATTERS
The Annual Meeting is called for the purposes set forth in the Notice. Our Board is not aware of any other matters to be considered by the stockholders at the Annual Meeting other than the matters described in the Notice. However, the enclosed proxy confers discretionary authority on the persons named in the proxy card with respect to matters that may properly come before the Annual Meeting and that are not known to our Board at the date this Proxy Statement was printed. It is the intention of the persons named in the proxy card to vote in accordance with their best judgment on any such matter.
REQUIREMENTS FOR SUBMISSION OF DIRECTOR NOMINATIONS AND STOCKHOLDER PROPOSALS FOR NEXT YEAR'S ANNUAL MEETING
In order to be considered for inclusion in the proxy statement for our 2023 Annual Meeting of Stockholders, stockholders interested in submitting a proposal or nominating a director for election at next year's Annual Meeting of Stockholders may do so by following the procedures prescribed in Rule 14a-8 promulgated under the Exchange Act. To be eligible for inclusion in our proxy materials, stockholder director nominations or proposals must be received at our principal executive offices no later than the close of business on December 29, 2022, which is the 120th day prior to the first anniversary we released this Proxy Statement to our stockholders for the 2022 Annual Meeting. To be included in our proxy materials, your director nomination or proposal must also comply with our Bylaws and Rule 14a-8 promulgated under the Exchange Act. If we change the date of the 2023 Annual Meeting of Stockholders by more than 30 days from the anniversary of this year's Annual Meeting, stockholder nominations or proposals must be received a reasonable time before we begin to make available the proxy materials for the 2023 Annual Meeting of Stockholders in order to be considered for inclusion in our Proxy Statement. Such proposals should be sent to Ocugen, Inc., 263 Great Valley Parkway, Malvern, PA 19355 Attention: Corporate Secretary.
Alternatively, stockholders intending to present a proposal or nominate a director for election at the 2023 Annual Meeting of Stockholders without having the proposal or nomination included in our Proxy Statement must deliver written notice of the nomination or proposal to our Corporate Secretary at our principal executive offices no earlier than February 12, 2023, which is the 75th day prior to the first anniversary of the date we released this Proxy Statement to our stockholders for the 2022 Annual Meeting, and no later than March 14, 2023, which is the 45th day prior to the first anniversary of the date we released this Proxy Statement to our stockholders for the 2022 Annual Meeting. However, if we change the date of our 2023 Annual Meeting of Stockholders by more than 30 days from the anniversary of this year's Annual Meeting, such nominations and proposals must be received no later than the close of business on the later of (a) the 90th day prior to our 2023 Annual Meeting of Stockholders and (b) the 10th day following the day we first publicly announce the date of our 2023 Annual Meeting of Stockholders. The stockholder's written notice must include certain information concerning the stockholder and each nominee and proposal, as specified in our Bylaws. If the stockholder does not also satisfy the requirements of Rule 14a-4 promulgated under the Exchange Act, the persons named as proxies will be allowed to use their discretionary voting authority when and if the matter is raised at the 2022 annual meeting of stockholders. Such nominations or proposals should be sent to Ocugen, Inc., 263 Great Valley Parkway, Malvern, PA 19355 Attention: Corporate Secretary.
STOCKHOLDER COMMUNICATIONS TO THE BOARD
Stockholders and other interested parties may communicate with the Board by writing to the Corporate Secretary, Ocugen, Inc., 263 Great Valley Parkway, Malvern, PA 19355. Communications intended for a specific director or directors should be addressed to their attention to the Corporate Secretary at the address provided above. Communications received from stockholders are forwarded directly to Board members as part of the materials mailed in advance of the next scheduled Board meeting following receipt of the communications. The Board has authorized the Corporate Secretary, at their discretion, to forward communications on a more expedited basis if circumstances warrant or to exclude a communication if it is illegal, unduly hostile or threatening, or similarly inappropriate. Advertisements, solicitations for periodical or other subscriptions, and other similar communications generally will not be forwarded to the directors.
AVAILABILITY OF MATERIALS
Our 2021 Annual Report, including the financial statements and financial statement schedules, has been filed with the SEC and provides additional information about us, which is incorporated by reference herein. Our proxy statement for our 2022 Annual Meeting and, in compliance with securities rules, our 2021 Annual Report (together, the "Proxy Materials") were mailed on April 28, 2022. In accordance with the rules of the SEC, we are advising our stockholders of the availability on the internet of our proxy materials related to our forthcoming Annual Meeting. Because we have elected to utilize the "full set delivery" option, we are delivering to all stockholders paper copies of all of the proxy materials, as well as providing access to those
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 46 |
| | |
OTHER INFORMATION (continued) |
proxy materials on a publicly accessible website. The Proxy Materials are available to holders of our common stock at www.proxyvote.com.
| | |
Notice of Annual Meeting of Stockholders and 2022 Proxy Statement | 47 |
Ocugen (NASDAQ:OCGN)
Historical Stock Chart
From Jul 2024 to Aug 2024
Ocugen (NASDAQ:OCGN)
Historical Stock Chart
From Aug 2023 to Aug 2024