UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C
(RULE 14c-101)
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
☐
 
Preliminary Information Statement
☐
 
Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))
☑
 
Definitive Information Statement
VAXXINITY
 
,
 
INC.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check all boxes that apply):
☑
 
No fee required.
☐
 
Fee paid previously with preliminary materials.
☐
 
Fee computed on table in exhibit required by Item 25(b) of
 
Schedule 14A (17 CFR 240.14a-101) per Item 1
of this Schedule and Exchange Act Rules 14c-5(g) and 0-11.
 
vaxxdef14cp2i0
VAXXINITY
 
,
 
INC.
505 Odyssey Way
Merritt Island, FL 32953
 
NOTICE OF STOCKHOLDER ACTION BY WRITTEN CONSENT
Dear Stockholders:
This Notice and the accompanying
 
Information Statement are being
 
furnished to the stockholders of
 
Vaxxinity,
 
Inc.,
a
 
Delaware corporation
 
(“Vaxxinity
 
,”
 
the
 
“Company,”
 
“we,”
 
“us,” or
 
“our”),
 
to
 
notify stockholders
 
of the
 
actions
taken on
 
March 8, 2024
 
by a
 
Special Committee
 
of the
 
Company’s
 
Board of
 
Directors and
 
on March 10,
 
2024 (the
“Repricing Date”) by the written consent of certain stockholders holding a majority of the voting power of the capital
stock of the Company entitled to vote on the matter (the “Majority Stockholders”), approving a one-time stock option
repricing
 
of
 
outstanding
 
Eligible
 
Employee
 
Options
 
(as
 
such
 
term
 
is
 
defined
 
in
 
the
 
accompanying
 
Information
Statement) granted
 
under Company’s
 
2021 Omnibus
 
Incentive Compensation
 
Plan (the
 
“2021 Omnibus
 
Plan”) and
held by certain employees of the Company,
 
including certain of the Company’s executive
 
officers,
 
and consultants of
the Company (the “2021 Omnibus Plan Repricing”).
Pursuant
 
to
 
the
 
2021
 
Omnibus
 
Plan
 
Repricing,
 
the
 
exercise
 
price
 
of
 
each
 
outstanding
 
Eligible
 
Employee
 
Option
granted under the
 
2021 Omnibus Plan
 
was amended to
 
reduce such exercise
 
price to $0.70
 
per share, which
 
was the
closing price of
 
a share of
 
the Company’s Class A Common
 
Stock, par value
 
$0.0001 per share
 
(the “Class A
 
Common
Stock”),
 
on the
 
Nasdaq
 
Global
 
Market
 
on
 
the
 
most recent
 
trading day
 
prior
 
to
 
the Repricing
 
Date.
 
Holders
 
of the
Eligible Employee
 
Options
 
may not
 
exercise the
 
Eligible Employee
 
Options at
 
the reduced
 
exercise price
 
until the
end of a “Retention Period”
 
that begins on the Repricing Date
 
and ends on the earlier of: (a)
 
December 31, 2024 and
(b) a Change of Control, as defined in the 2021 Omnibus Plan.
The
 
2021
 
Omnibus
 
Plan
 
Repricing
 
is
 
subject
 
to
 
the
 
expiration
 
of
 
the
 
20-day
 
period
 
following
 
the
 
filing
 
of
 
this
Information Statement (the date
 
of the expiration of such 20-day
 
period, the “Effective Date
 
”). The Effective Date is
currently expected to
 
be on or
 
about June 2,
 
2024.
 
Participation in the
 
2021 Omnibus Plan Repricing
 
was not voluntary
or
 
discretionary.
 
Accordingly,
 
the exercise
 
price
 
of each
 
outstanding
 
Eligible
 
Employee
 
Option
 
granted
 
under the
2021
 
Omnibus Plan
 
was automatically
 
amended
 
on the
 
Repricing Date,
 
without any
 
action
 
required
 
by the
 
holder
thereof.
 
As the
 
matters set
 
forth in
 
this Notice
 
and the
 
accompanying Information
 
Statement have
 
been duly authorized
 
and
approved
 
by
 
the
 
Majority
 
Stockholders,
 
your
 
consent
 
is
 
not
 
requested
 
or
 
required
 
to
 
approve
 
these
 
matters.
 
The
accompanying Information Statement
 
is provided solely
 
for your
 
information, and also
 
serves the
 
purpose of
 
informing
stockholders
 
of the
 
matters described
 
herein pursuant
 
to
 
Section 14(c)
 
of the
 
Securities Exchange
 
Act of
 
1934,
 
as
amended,
 
and
 
the
 
rules
 
and
 
regulations
 
prescribed
 
thereunder,
 
including
 
Regulation
 
14C,
 
and
 
serves
 
as
 
the
 
notice
required
 
by
 
Section
 
228
 
of
 
the
 
Delaware
 
General
 
Corporation
 
Law
 
of
 
the
 
taking
 
of
 
a
 
corporate
 
action
 
without
 
a
meeting by less
 
than unanimous
 
written consent of
 
our stockholders.
 
You
 
do not need
 
to do anything
 
in response to
this Notice and the accompanying Information Statement.
WE ARE
 
NOT
 
ASKING
 
YOU
 
FOR
 
A PROXY
 
AND
 
YOU
 
ARE REQUESTED
 
NOT
 
TO
 
SEND
 
US
 
A
PROXY.
Sincerely,
/s/ Sumita Ray
Chief Legal, Compliance & Administrative Officer and Corporate
 
Secretary
4
INFORMATION STATEMENT
WE ARE NOT ASKING YOU FOR A PROXY AND
 
YOU ARE REQUESTED NOT TO SEND US A PROXY
General
Vaxxinity
 
,
 
Inc.,
 
a
 
Delaware
 
corporation
 
(“Vaxxinity
 
,”
 
the
 
“Company,”
 
“we,”
 
“us,”
 
or
 
“our”),
 
is
 
sending
 
you
 
this
Information Statement solely for the purpose of informing
 
our stockholders as of the record date, March 10,
 
2024, of
actions taken
 
by our
 
stockholders by
 
less than
 
unanimous written
 
consent in
 
lieu of
 
a meeting
 
of stockholders.
 
No
action is requested or required on your part.
This
 
Information
 
Statement
 
is
 
first
 
being
 
distributed
 
to
 
Vaxxinity
 
stockholders
 
on
 
or
 
about
 
May
 
13,
 
2024.
 
The
Company’s principal executive offices are located at 505 Odyssey
 
Way,
 
Merritt Island, FL 32953,
 
and the Company’s
telephone number is (254)
 
244-5739.
Safe Harbor Statement
Certain statements contained herein,
 
regarding matters that are
 
not historical facts, may
 
be forward-looking statements
(as
 
defined
 
in
 
the
 
Private
 
Securities
 
Litigation
 
Reform
 
Act
 
of
 
1995).
 
Such
 
forward-looking
 
statements
 
include
statements regarding management’s intentions, plans, beliefs,
 
expectations or forecasts for the future, including those
relating
 
to
 
the
 
implementation
 
of
 
the
 
Repricing
 
(as
 
defined
 
below).
 
The
 
reader
 
is
 
cautioned
 
not
 
to
 
rely
 
on
 
these
forward-looking statements. These
 
forward-looking statements are
 
based on current
 
expectations of future
 
events. If
the underlying
 
assumptions prove
 
inaccurate or
 
known or
 
unknown risks
 
or uncertainties
 
materialize, actual
 
results
could vary
 
materially from
 
the expectations
 
and
 
projections
 
of the
 
Company.
 
These risks
 
and uncertainties
 
can be
found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as supplemented
by
 
any
 
subsequently
 
filed
 
Quarterly
 
Reports
 
on
 
Form
 
10-Q.
 
Copies
 
of
 
these
 
filings
 
are
 
available
 
online
 
at
www.sec.gov,
 
ir.vaxxinity.com or by
 
request from the Compa
 
ny. Forward-looking
 
statements included herein
 
speak
only as of the date
 
hereof, and we undertake no
 
obligation to revise or update such
 
statements to reflect the occurrence
of events or circumstances after the date hereof.
Summary of the Corporate Actions
On February 26,
 
2024,
 
the Board
 
of Directors
 
of the
 
Company (“Board”)
 
created a
 
special committee
 
of the
 
Board
(the
 
“Special
 
Committee”)
 
comprising
 
George
 
Hornig
 
and
 
Gabrielle
 
Toledano,
 
two disinterested
 
and
 
independent
directors,
 
to
 
consider
 
a
 
potential
 
repricing
 
of
 
outstanding
 
options
 
to
 
purchase
 
shares
 
of
 
the
 
Company’s
 
Class
 
A
Common Stock, par
 
value $0.0001 per
 
share (“Class A Common
 
Stock”), and/or Class
 
B Common Stock,
 
par value
$0.0001
 
per share
 
(“Class B
 
Common Stock”
 
and,
 
together,
 
the “Common
 
Stock”), and
 
delegated to
 
such Special
Committee the full
 
powers, authority and
 
discretion of the
 
Board to review
 
and approve the
 
terms and conditions
 
of
any potential repricing.
 
On March 8, 2024,
 
the Special Committee
 
approved a repricing
 
of certain outstanding
 
options to purchase
 
shares of
Class A Common
 
Stock and
 
Class B
 
Common Stock
 
(the “Repricing”)
 
held by certain
 
of our
 
employees, including
our
 
executive
 
officers,
 
consultants
 
and
 
officers
 
as
 
described
 
in
 
more
 
detail
 
below.
 
On
 
March 10,
 
2024,
 
following
approval by the
 
Special Committee,
 
Louis Reese, Blackfoot
 
Healthcare Ventures
 
LLC, United Biomedical,
 
Inc. and
Mei Mei Hu,
 
together the holders
 
of a majority
 
in voting power
 
of the outstanding
 
shares of our
 
common stock (the
“Majority Stockholders”), approved the repricing of Eligible Employee Options (as defined below) granted to certain
employees,
 
including
 
certain
 
executive
 
officers,
 
and
 
consultants
 
under
 
the
 
Company’s
 
2021
 
Omnibus
 
Incentive
Compensation Plan (the “2021 Omnibus Plan”), in accordance with the 2021 Omnibus Plan and as described in more
detail
 
below
 
(the
 
repricing
 
of
 
such
 
Eligible
 
Employee
 
Options
 
granted
 
under
 
the
 
2021
 
Omnibus
 
Plan,
 
the
 
“2021
Omnibus Plan Repricing”).
The Repricing
 
generally applied
 
to (a)
 
underwater options
 
to purchase
 
shares of
 
the Company
 
’s
 
Class A
 
Common
Stock
 
that
 
were
 
granted
 
to
 
employees
 
(other
 
than
 
the
 
Founders
 
(as
 
defined
 
below)),
 
including
 
certain
 
executive
officers, and
 
consultants under
 
the 2021 Omnibus
 
Plan and the
 
2021 Stock
 
Option and Grant
 
Plan (the
 
“2021 Stock
Option Plan”
 
and, together with
 
the 2021 Omnibus Plan,
 
the “Plans”) (such options,
 
the “Eligible Employee Options”)
5
and (b) underwater options to purchase
 
shares of Class B Common Stock granted
 
pursuant to stock option agreements
governed by the terms
 
of the 2021 Stock Option
 
Plan (the “Class B
 
Options” and, together with the
 
Eligible Employee
Options, the “Eligible Options”).
As of March
 
8, 2024
 
(with respect
 
to the
 
repricing of
 
(a) options
 
to purchase
 
shares of
 
the Class
 
A Common
 
Stock
that were
 
granted to
 
employees other
 
than the
 
Founders and
 
consultants under
 
the 2021
 
Stock Option
 
Plan and
 
(b)
options to
 
purchase shares of
 
Class B
 
Common Stock granted
 
pursuant to stock
 
option agreements
 
governed by
 
the
terms of
 
the 2021
 
Stock Option
 
Plan) and
 
March 10, 2024
 
(with respect
 
to the
 
2021 Omnibus
 
Plan Repricing)
 
(as
applicable,
 
the “Repricing
 
Date”),
 
the Eligible
 
Options
 
were immediately
 
repriced
 
such that
 
the exercise
 
price
 
per
share for such
 
options was reduced
 
to $0.70,
 
the closing
 
price of Class A
 
Common Stock on
 
the Nasdaq Global
 
Market
on most
 
recent trading
 
day prior
 
to the
 
Repricing Date,
 
subject to
 
certain retention
 
and other
 
requirements outlined
below and, in the case of Eligible
 
Employee Options granted under the 2021
 
Omnibus Plan, the expiration of the 20-
day period following the filing of this Information Statement.
 
Holders of
 
the Eligible
 
Employee Options
 
may not
 
exercise the
 
Eligible Employee
 
Options at
 
the reduced
 
exercise
price
 
until
 
the
 
end
 
of
 
a
 
“Retention
 
Period”
 
that
 
begins
 
on
 
the
 
Repricing
 
Date
 
and
 
ends
 
on
 
the
 
earlier
 
of:
 
(a)
December 31, 2024 and (b) a Change of Control, as defined in the 2021 Omnibus Plan.
 
If an employee or consultant
exercises an Eligible Employee
 
Option prior to the
 
end of the Retention Period,
 
such employee or consultant
 
will be
required
 
to pay
 
a
 
premium
 
exercise
 
price
 
equal to
 
the original
 
exercise
 
price
 
per share
 
of such
 
Eligible
 
Employee
Option.
 
Options subject
 
to the
 
Repricing held
 
by Mei
 
Mei Hu,
 
the Company’s
 
Chief Executive
 
Officer,
 
and Louis
Reese, the
 
Company’s
 
Executive Chairman
 
(together,
 
the “Founders”),
 
will be
 
exercisable in
 
accordance with
 
their
terms,
 
and
 
shares
 
of
 
Class
 
B
 
common
 
stock
 
acquired
 
upon
 
exercise
 
of
 
such
 
options
 
will
 
be
 
subject
 
to
 
a
 
lock-up
restriction prohibiting sales
 
for a period of
 
two years from the
 
Repricing Date.
 
In addition, the Founders
 
will not be
eligible to receive annual equity grants in 2024 and 2025.
Voting
 
and Vote
 
Required
The Company has
 
obtained stockholder approval for
 
the 2021 Omnibus Plan
 
Repricing,
 
consistent with Nasdaq listing
rules (“Nasdaq Rules”)
 
and the terms
 
of the
 
2021 Omnibus Plan.
 
In accordance with
 
the Delaware General
 
Corporation
Law
 
(the
 
“DGCL”),
 
the
 
Company’s
 
Amended
 
and
 
Restated
 
Bylaws
 
and
 
Nasdaq
 
Rules,
 
the
 
2021
 
Omnibus
 
Plan
Repricing may be approved, without a meeting of stockholders, by the written consent of
 
stockholders representing a
majority of
 
the voting
 
power of
 
the capital
 
stock entitled
 
to vote
 
on the
 
matter.
 
Such approval
 
was received
 
by the
Company from
 
the Majority
 
Stockholders by
 
written consent
 
dated March 10,
 
2024. As
 
of such date,
 
the Company
had 112,872,672 shares of Class A Common Stock and 13,874,132 shares of Class B
 
Common Stock outstanding and
entitled to vote.
 
Each share of Class
 
A Common Stock
 
is entitled to
 
one vote per
 
share. Each share
 
of Class B
 
Common
Stock is entitled to ten votes per share. The written
 
consent was executed by the Majority Stockholders,
 
as the holders
of approximately
 
64.4%
 
of the
 
outstanding voting
 
power of
 
the Common
 
Stock of
 
the Company.
 
Accordingly,
 
the
written consent
 
was executed
 
by stockholders
 
holding
 
sufficient
 
voting power
 
to
 
approve
 
the
 
2021
 
Omnibus Plan
Repricing
 
by
 
written
 
consent,
 
no
 
further
 
stockholder
 
action
 
is
 
required
 
and
 
the
 
Company
 
is
 
not
 
seeking
 
consent,
authorizations or proxies from you.
 
The DGCL does not provide appraisal rights with respect to the 2021 Omnibus Plan Repricing
 
.
Notice Pursuant to Delaware General Corporation Law
Pursuant to Section
 
228(e) of the
 
DGCL, the Company
 
is required to
 
provide prompt notice
 
of the taking
 
of a corporate
action
 
by
 
written
 
consent
 
to
 
the
 
Company’s
 
stockholders
 
who
 
have
 
not
 
consented
 
in
 
writing
 
to
 
such
 
action.
 
This
Information Statement serves as the required notice.
6
APPROVAL
 
OF THE OPTION REPRICING PROGRAM
On March 8, 2024, the Special Committee approved the Repricing, and recommended that the Majority Stockholders
approve
 
the 2021
 
Omnibus Plan
 
Repricing.
 
On March 10,
 
2024,
 
the Majority
 
Stockholders
 
took
 
action
 
by written
consent to approve the 2021 Omnibus Plan Repricing.
Introduction
Our employees,
 
officers,
 
directors,
 
and
 
consultants
 
and
 
advisors
 
and
 
our
 
affiliates
 
were eligible
 
to
 
receive
 
awards
under our
 
2021
 
Stock Option
 
Plan.
 
In connection
 
with our
 
initial public
 
offering,
 
our
 
Board
 
and
 
our
 
stockholders
approved
 
the
 
2021
 
Omnibus
 
Plan,
 
pursuant
 
to
 
which
 
equity-based
 
and
 
cash
 
incentive
 
awards
 
may
 
be
 
granted
 
to
current, former
 
or prospective
 
directors, officers,
 
employees and
 
consultants.
 
Our 2021
 
Omnibus Plan
 
replaced
 
our
2021 Stock
 
Option Plan,
 
as our
 
Board has
 
determined not
 
to make
 
additional awards
 
under our
 
2021 Stock
 
Option
Plan following the effectiveness of our 2021
 
Omnibus Plan.
However, the terms of our 2021 Stock Option Plan continue to govern outstanding equity awards granted thereunder,
including the
 
Eligible
 
Employee
 
Options
 
granted
 
under the
 
2021
 
Stock Option
 
Plan. The
 
terms of
 
the 2021
 
Stock
Option
 
Plan
 
also
 
govern
 
certain
 
agreements
 
with
 
the
 
Founders
 
relating
 
to
 
options
 
to
 
purchase
 
shares
 
of
 
Class
 
B
Common Stock, which options are Eligible Options. Under the terms of the 2021
 
Stock Option Plan, a repricing may
be
 
approved
 
by our
 
Board
 
(or
 
a
 
committee
 
of
 
our
 
Board
 
under
 
delegated
 
authority).
 
Accordingly,
 
no
 
stockholder
approval was required for the repricing of 1,938,544 Eligible Employee Options to purchase Class
 
A Common Stock
granted
 
to
 
employees,
 
including
 
certain
 
executive
 
officers,
 
and
 
consultants
 
under
 
the 2021
 
Stock Option
 
Plan
 
and
6,362,455 Eligible Options
 
to purchase Class B
 
Common Stock granted to
 
the Founders under agreements
 
governed
by the 2021 Stock Option Plan.
The
 
Company
 
has
 
granted
 
stock
 
options
 
under
 
the
 
Plans
 
consistent
 
with
 
the
 
view
 
that
 
stock-based
 
incentive
compensation
 
opportunities
 
play
 
a
 
key
 
role
 
in
 
the
 
Company’s
 
ability
 
to
 
recruit,
 
motivate
 
and
 
retain
 
qualified
individuals. The Company
 
believes that equity
 
compensation encourages employees
 
to work toward
 
the Company’s
success and aligns their interests with those of
 
the Company’s stockholders by providing them with a means by which
they can benefit from increasing the value of the Company’s
 
stock.
Over
 
the
 
past
 
two
 
years,
 
the
 
share
 
price
 
of
 
the
 
Class
 
A
 
Common
 
Stock
 
has
 
declined
 
significantly,
 
and
 
as
 
of
 
the
Repricing
 
Date,
 
nearly
 
all
 
of
 
the
 
stock
 
options
 
held
 
by
 
Company
 
employees,
 
officers
 
and
 
consultants
 
were
“underwater,”
 
with exercise prices well above the
 
current market price of the Company’s Class A common stock. The
Eligible Options previously had exercise prices ranging from $0.85 to $13.00 per share. As of the Repricing Date, the
closing price of our Class A Common Stock was $0.70
 
per share, whereas the weighted average exercise price
 
of the
Eligible Options was $7.64 per share. The weighted average exercise price of the Eligible Employee
 
Options granted
under the
 
2021 Omnibus
 
Plan
 
was $3.79
 
per share.
 
The weighted
 
average exercise
 
price of
 
the Eligible
 
Employee
Options to purchase Class A Common Stock under the 2021 Stock Plan was $3.21 per share and the exercise price of
the Eligible Options to
 
purchase Class B
 
Common Stock was
 
$10.07 per share.
 
Although the Company continues
 
to
believe
 
that
 
stock
 
options
 
are
 
an
 
important
 
component
 
of
 
the
 
Company’s
 
compensation
 
program,
 
prior
 
to
 
the
Repricing, the underwater stock options may have been perceived by their holders as having little or no incentive and
retention effect due to the difference between the former exercise
 
prices and the then-current stock price.
The Special Committee approved the Repricing after multiple meetings, careful consideration of various alternatives,
a review of other applicable factors and with the advice of the Company’s independent compensation consultant. The
Special
 
Committee
 
designed
 
the
 
Repricing,
 
with
 
the
 
original
 
exercise
 
price
 
applicable
 
to
 
the
 
Eligible
 
Employee
Options during the Retention Period, and the extended holding period and determination not to make annual grants to
the Founders
 
in 2024
 
and 2025,
 
in each
 
case as
 
described in
 
detail below,
 
to provide
 
added incentive
 
to retain
 
and
motivate the
 
Company’s
 
employees and
 
Founders to
 
continue to
 
work in
 
the best
 
interests of
 
the Company
 
and its
stockholders
 
without
 
incurring
 
the
 
stock
 
dilution
 
resulting
 
from
 
significant
 
additional
 
equity
 
grants
 
or
 
significant
additional cash expenditures resulting from additional cash compensation.
 
7
Summary of the Material Terms
 
of the Repricing
The Repricing generally applied to (a) the Eligible Employee Options and (b)
 
the Class B Options.
Pursuant
 
to
 
the Repricing,
 
as
 
of the
 
Repricing
 
Date,
 
the Eligible
 
Options
 
were immediately
 
repriced
 
such that
 
the
exercise price
 
per share
 
for such
 
options was
 
reduced to
 
$0.70, the
 
closing price
 
of Class
 
A Common
 
Stock on
 
the
Nasdaq Global Market on the most recent trading day preceding the Repricing Date, subject
 
to the retention and other
requirements outlined below and, in the case of Eligible Employee
 
Options issued under the 2021 Omnibus Plan, the
expiration of the 20-day period following the filing of this Information Statement.
 
Holders of
 
the Eligible
 
Employee Options
 
may not
 
exercise the
 
Eligible Employee
 
Options at
 
the reduced
 
exercise
price
 
until
 
the
 
end
 
of
 
a
 
“Retention
 
Period”
 
that
 
begins
 
on
 
the
 
Repricing
 
Date
 
and
 
ends
 
on
 
the
 
earlier
 
of:
 
(a)
December 31, 2024 and (b)
 
a Change of Control, as defined
 
in the 2021 Omnibus Plan. If
 
an employee or consultant
exercises an Eligible Employee
 
Option prior to the
 
end of the Retention Period,
 
such employee or consultant
 
will be
required
 
to pay
 
a
 
premium
 
exercise
 
price
 
equal to
 
the original
 
exercise
 
price
 
per share
 
of such
 
Eligible
 
Employee
Option.
 
Options subject to the Repricing held by the Founders will be exercisable in accordance with their terms and
shares
 
of
 
Class
 
B
 
common
 
stock
 
acquired
 
upon
 
exercise
 
of
 
such
 
options
 
will
 
be
 
subject
 
to
 
a
 
lock-up
 
restriction
prohibiting sales for a
 
period of two years
 
from the Repricing Date.
 
In addition, the Founders
 
will not be eligible
 
to
receive annual equity grants in 2024 and 2025.
Participation in the Repricing was not voluntary or discretionary.
 
Accordingly, the exercise price of each outstanding
Eligible Option was automatically amended, without any action required by the holder
 
thereof.
 
As of March 10, 2024, an
 
aggregate of 5,113,654 stock options to
 
purchase shares of our Class
 
A Common Stock with
a weighted average exercise
 
price of $3.24 per
 
share were outstanding under
 
the 2021 Omnibus Plan
 
and held by 61
employees, consultants and
 
directors. Of these options,
 
1,938,544 (approximately 37.9
 
%) held by 46
 
employees and
consultants,
 
were Eligible
 
Employee Options
 
and were
 
eligible for
 
amendment pursuant
 
to the
 
2021 Omnibus
 
Plan
Repricing. These Eligible
 
Employee Options previously
 
had exercise prices
 
ranging from $0.85
 
to $13.00 per share,
with a weighted
 
average exercise price
 
of $3.79 per
 
share and a
 
weighted average remaining
 
term of 8.8
 
years as of
the Repricing Date. No additional stock options were granted by the Company in connection
 
with the Repricing.
Except
 
for
 
the
 
reduction
 
in
 
the
 
exercise
 
price
 
of
 
the
 
outstanding
 
Eligible
 
Employee
 
Options
 
described
 
above,
 
all
outstanding stock options under the 2021 Omnibus Plan will continue to remain outstanding in accordance with all of
the current terms and
 
conditions set forth in
 
the 2021 Omnibus
 
Plan and the applicable
 
award agreements including,
without limitation, the number of shares subject to such options, vesting schedule and expiration
 
date.
Accounting Treatment
 
of the Repricing
Under Financial Accounting
 
Standards Codification Topic
 
718, the Company
 
recognized
 
incremental compensation
cost of $1.8 million associated with the Repricing,
 
$0.3 million of which was associated with the 2021 Omnibus Plan
Repricing.
 
The incremental
 
compensation cost
 
was measured
 
as the
 
excess, if
 
any,
 
of the
 
fair value
 
of the
 
Eligible
Options
 
immediately
 
following
 
the
 
Repricing
 
over
 
the
 
fair
 
value
 
of
 
the
 
Eligible
 
Options
 
immediately
 
prior
 
to
 
the
Repricing.
Certain U.S. Federal Income Tax
 
Consequences
The following discussion is intended only as
 
a general summary of the material U.S.
 
federal income tax consequences
of
 
the
 
2021
 
Omnibus
 
Plan
 
Repricing,
 
based
 
upon
 
the
 
provisions
 
of
 
the
 
U.S.
 
Internal
 
Revenue
 
Code
 
of
 
1986,
 
as
amended (the “Code”), as
 
of the date of this
 
Information Statement. It
 
is not intended as
 
tax guidance to participants
in the
 
2021 Omnibus Plan.
 
This summary does
 
not take into
 
account certain circumstances
 
that may change
 
the income
tax treatment of awards for individual participants, and it does not describe
 
the consequences under any other federal
tax
 
law
 
(such
 
as
 
employment
 
taxes),
 
state
 
income
 
tax
 
consequences
 
of
 
any
 
award
 
or
 
the
 
taxation
 
of
 
awards
 
in
jurisdictions outside
 
of the United
 
States. All of
 
the outstanding
 
Eligible Employee
 
Options granted
 
under the 2021
Omnibus Plan are nonqualified stock options.
 
 
 
 
 
 
 
 
 
 
 
 
8
For income tax purposes, the repricing of an option is treated
 
as the grant of a new option on the effective date
 
of the
repricing. The grant of a stock
 
option generally has no income tax consequences
 
for a participant or the Company.
 
A
participant usually recognizes
 
ordinary income upon
 
the exercise
 
of a
 
nonqualified stock option
 
equal to
 
the fair
 
market
value of the shares
 
minus the exercise price,
 
if applicable. We
 
should generally be entitled
 
to a deduction for
 
federal
income tax purposes equal to
 
the amount of ordinary income
 
recognized by the participant
 
as a result of the exercise
of a
 
nonqualified stock
 
option. However,
 
the Code
 
denies publicly
 
held corporations
 
a deduction
 
for compensation
that is in
 
excess of $1,000,000 paid
 
to the corporation’s chief executive
 
officer, chief financial officer and certain
 
other
current and former executive officers in a year.
Any disposition of shares acquired
 
under a nonqualified stock option
 
will generally result only in capital gain or
 
loss
for the participant, which may be short- or long-term, depending upon the length of
 
time such shares are held.
Section 409A
 
of the Code
 
provides special tax
 
rules applicable to
 
programs that
 
provide for a
 
deferral of
 
compensation.
Failure to comply with
 
those requirements will
 
result in accelerated
 
recognition of U.S. federal
 
income tax purposes
along with
 
an additional
 
tax equal
 
to 20%
 
of the
 
amount included
 
in U.S.
 
federal income,
 
and interest
 
on deemed
underpayments
 
in
 
certain
 
circumstances.
 
While
 
certain
 
awards
 
under
 
the
 
2021
 
Omnibus
 
Plan
 
could
 
be
 
subject
 
to
Section 409A, the
 
2021 Omnibus Plan
 
and awards are
 
intended to comply
 
with or be
 
exempt from the
 
requirements
of Section 409A, where applicable.
Outstanding Eligible Employee Options under the 2021 Omnibus Plan
The following
 
table summarizes
 
the outstanding
 
Eligible Employee
 
Options granted
 
under the
 
2021 Omnibus
 
Plan
held by
 
our current
 
Named
 
Executive Officers,
 
all current
 
executive officers
 
as a
 
group, all
 
current non-employee
directors as
 
a group
 
and all
 
other employees,
 
respectively.
 
On the
 
Repricing Date,
 
the exercise
 
price of
 
the Eligible
Employee
 
Options
 
set
 
forth
 
in
 
the
 
table
 
below
 
was reduced
 
to
 
$0.70,
 
which
 
was the
 
closing
 
price
 
of our
 
Class
 
A
Common Stock on March 8, 2024, the most recent closing price prior to the Repricing Date,
 
as reported on Nasdaq.
 
Name and Position
Number of Shares of
Common Stock
Underlying Eligible
Employee Options
(1)
Weighted
AverageExercise Price
of Eligible Employee
Options Prior to 2021
Omnibus Plan
Repricing($)
Mei Mei Hu, President, Chief Executive Officer and Director
—
N/A
Louis Reese, Executive Chairman
—
N/A
Sumita Ray, Chief Legal, Compliance & Administrative Officer
425,000
 
1.17
 
Ulo Palm, MD, PhD, former Chief Medical Officer
—
N/A
Rene Paula Molina, former Senior Vice President, Legal and Business Affairs
59,072
$
 
9.92
 
All current executive officers as a group
508,925
$
 
1.72
 
All current directors who are not executive officers as a group
(2)
584,744
$
 
1.2
 
All employees, including all current officers who are not executive
 
officers, as a group
1,429,619
$
 
5.21
 
(1)
 
Does not include Eligible Employee
 
Options granted under the 2021
 
Stock Option Plan, the
 
repricing of which Eligible Employee Options
was not subject to approval by the Company’s stockholders.
(2)
 
This consists
 
solely of options
 
granted under the
 
2021 Omnibus Plan
 
to Peter Powchik,
 
MD, the Company’s former Executive
 
Vice President,
Global Scientific
 
Director and
 
a former
 
director of
 
the Company,
 
in his
 
capacity as
 
an employee
 
of the
 
Company.
 
This does
 
not include
options granted to Dr. Powchik in his capacity as a director.
 
 
 
9
Equity Compensation Plan Information
The following
 
table summarizes
 
certain information,
 
as of
 
December 31, 2023,
 
relating to
 
our equity
 
compensation
plans, which were approved by the Company’s
 
stockholders.
 
 
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
 
(b)
Number of
Remaining
Available for Future
Issuance Under
Equity
Compensation Plans
(Excluding
Securities Reflected
in Column (a)) (c)
Equity compensation plans approved by security holders
22,123,762
(1)
$
5.03
8,566,663
(2)
Total
24,051,782
$
5.03
6,266,663
______________________
(1)
 
Consists of outstanding options for 15,561,307 shares of Class A
 
Common Stock, 200,000 restricted stock units of Class A
 
Common Stock
and outstanding options for 6,362,455 shares of Class B Common
 
Stock, of which 11,389,851 Class A and
 
5,063,133 Class B options were
exercisable, respectively. The exercise price set forth in this table does not give effect to the Repricing.
(2)
 
Consists of 6,266,663 shares
 
reserved and remaining available
 
for future awards under
 
the 2021 Omnibus Plan
 
and 2,300,000 shares reserved
and remaining available for issuance under the Vaxxinity, Inc. 2021 Employee Stock Purchase Plan. The reserve for the 2021 Omnibus Plan
automatically increases each year on January 1st, beginning on January 1, 2023 and ending (and including) January 1, 2030, by the lesser of
(i) 4%
 
of the
 
outstanding shares
 
of the
 
Company’s common
 
stock on
 
the immediately
 
preceding December 31,
 
(ii) the
 
number of
 
shares
determined by the
 
Compensation Committee, if
 
any such determination
 
is made, and (iii)
 
the number of
 
shares underlying any
 
awards granted
during the preceding calendar
 
year, net of
 
the shares underlying awards
 
canceled or forfeited under the
 
2021 Omnibus Plan.
 
On January 1,
2024, in accordance with the automatic “evergreen”
 
provision of the 2021 Omnibus Plan, the maximum number of shares that can be issued
under the plan was increased to 16,401,213.
Interest of Certain Persons in Matters Acted Upon
The
 
following
 
table
 
sets
 
forth
 
certain
 
information
 
as
 
of
 
March 10,
 
2024
 
about
 
the
 
outstanding
 
Eligible
 
Employee
Options granted
 
under the
 
2021 Omnibus
 
Plan held
 
by each
 
of our
 
current executive
 
officers
 
and individuals
 
who
have served as executive officers and directors since January
 
1, 2023.
Other than as
 
set forth in
 
the table,
 
none of our
 
other current officers
 
or directors
 
or individuals
 
who have served
 
as
executive
 
officers
 
or
 
directors
 
since
 
January 1,
 
2023,
 
nor
 
any
 
of
 
their
 
associates,
 
has
 
any
 
interest
 
in
 
the
 
actions
approved by the Majority Stockholders as
 
described in this Information Statement
 
except in their capacity as holders
of our Common Stock (which interest does not differ from that of the other
 
holders of our Common Stock).
 
 
 
 
 
 
 
 
 
 
 
10
As of March 10,
 
2024, our current
 
non-employee directors (5
 
persons) and executive
 
officers (4
 
persons) as a
 
group
held unexercised stock options to purchase an aggregate of 3,173,735 shares of our Class A
 
Common Stock under the
2021 Omnibus Plan, which represented
 
approximately 62% of the shares
 
subject to all outstanding options
 
under the
2021 Omnibus Plan.
Name
Title
Number of
Options
Outstanding
Percentage of
Total
Outstanding
Options
(1)
Number of
Eligible
Employee
Options
Outstanding
Percentage of
Total Eligible
Employee
Options
Outstanding
(2)
Jason Pesile
Senior Vice President of Finance and
Accounting
83,925
1.60%
83,925
4.30%
Sumita Ray
Chief Legal, Compliance &
Administrative Officer
425,000
8.30%
425,000
21.90%
Rene Paula Molina
Former Senior Vice President, Legal and
Business Affairs
59,072
1.20%
59,072
3.00%
Peter Powchik, MD
Former Executive Vice President, Global
Scientific Director and former director
845,103
16.50%
584,744
30.20%
______________________
(1)
 
Determined by dividing the number of stock options granted
 
under the 2021 Omnibus Plan held by the individual
 
by 5,113,694, which is the
total number of outstanding stock options under the 2021 Omnibus
 
Plan as of the date of the table.
(2)
 
Determined by dividing the number of
 
stock options granted under the
 
2021 Omnibus Plan held by the
 
individual that were eligible for the
2021 Omnibus Plan Repricing by 1,938,544,
 
which is the total number of outstanding stock options under the 2021 Omnibus Plan that as of
the date of the table were eligible for the 2021 Omnibus Plan
 
Repricing.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
11
SECURITY OWNERSHIP OF CERTAIN
 
BENEFICIAL OWNERS AND MANAGEMENT
The following
 
table sets
 
forth information
 
relating to
 
the beneficial
 
ownership
 
of our
 
Class A
 
Common Stock
 
and
Class B Common Stock as of April 15, 2024
 
for:
●
each person, or
 
group of affiliated
 
persons, known by us
 
to beneficially own
 
more than 5% of
 
our common
stock outstanding;
●
each of our directors;
●
each of our named executive officers for 2023; and
●
all directors and executive officers as a group.
Except
 
as noted
 
by footnote,
 
and
 
subject
 
to
 
community property
 
laws
 
where applicable,
 
based
 
on the
 
information
provided to
 
us, we
 
believe
 
that the
 
persons and
 
entities
 
named in
 
the table
 
below
 
have sole
 
voting and
 
investment
power with respect to all shares shown as
 
beneficially owned by them. The beneficial ownership percentages set forth
in the
 
table
 
below
 
are
 
based
 
on
 
112,873,552
 
shares of
 
Class
 
A Common
 
Stock
 
and
 
13,874,132
 
shares of
 
Class
 
B
Common Stock outstanding as of April 15, 2024.
 
Unless otherwise indicated by footnote below,
 
the address for each
beneficial owner listed is c/o Vaxxinity,
 
Inc., 505 Odyssey Way,
 
Merritt Island, FL 32953.
Shares Beneficially Owned(1)
Percentage of
Total Voting
Power**
Class A
Class B
No.
%
No.
%
Name of Beneficial Owners
Directors and Executive Officers:
Mei Mei Hu
(2)
62,928,493
52.63%
14,557,063
87.90%
71.44%
Louis Reese
(3)
3,192,409
2.76%
6,348,980
39.03%
15.84%
Sumita Ray
—
*
—
—
*
Ulo Palm, MD, PhD
—
*
—
—
*
René Paula Molina
(4)
268,404
*
—
—
*
Peter Diamandis, MD
(5)
1,880,803
1.65%
1,099,915
7.93%
4.52%
George Hornig
(6)
174,489
*
—
—
*
Landon Ogilvie
(7)
165,202
*
—
—
*
James Smith
(8)
194,612
*
—
—
*
Gabrielle Toledano
(9)
132,352
*
—
—
*
All directors and executive officers as a
group (9 persons)
(10)
65,514,983
54.08%
15,676,978
82.61%
64.56%
Five Percent Holders:
United Biomedical, Inc.
(11)
57,877,859
50.42%
—
—
22.24%
______________________
*
 
Represents beneficial ownership or voting power, as applicable, of
 
less than one percent of our outstanding shares of
 
common stock.
**
 
Represents the voting power
 
with respect to all
 
shares of our Class
 
A common stock
 
and Class B common
 
stock, voting as
 
a single class. Each
share of Class A common stock
 
will be entitled to one vote
 
per share and each
 
share of Class B common
 
stock will be entitled to
 
ten votes
per share. Holders of our
 
Class A common stock
 
and Class B common stock
 
will vote together as a
 
single class on all matters
 
presented to
our stockholders for their vote or approval, except as otherwise
 
required by applicable law or our Charter.
(1)
 
Beneficial ownership is determined
 
according to the rules
 
of the SEC,
 
which generally provide that a
 
person has beneficial ownership
 
of a
security if he,
 
she or it
 
possesses sole
 
or shared voting
 
or investment power
 
over that security. Under
 
those rules, beneficial
 
ownership includes
securities that
 
the individual
 
or entity
 
has the
 
right to
 
acquire, such
 
as through
 
the exercise of
 
warrants or
 
stock options
 
or the
 
vesting of
restricted stock
 
units within
 
60 days.
 
Shares subject
 
to warrants
 
or options
 
that are
 
currently exercisable or
 
exercisable within
 
60 days
 
or
restricted stock units that
 
vest within 60 days
 
are considered outstanding and
 
beneficially owned by
 
the person holding such warrants,
 
options
or restricted stock
 
units for the
 
purpose of computing
 
the percentage
 
ownership of that
 
person but are
 
not treated as
 
outstanding for the
 
purpose
of computing the percentage ownership of any other
 
person.
 
12
(2)
 
Consists of (i) 5,518,961 shares of Class B
 
common stock held by Ms. Hu, (ii) 271,655
 
shares of Class A common stock held by Blackfoot
Healthcare Ventures
 
LLC (“Blackfoot”), (iii)
 
4,212,495 shares of
 
Class A common
 
stock held by
 
United Biomedical Inc.,
 
Asia (“UBIA”)
over which Ms. Hu has shared voting
 
power, (iv) 1,858,225 shares of Class A
 
common stock subject to options exercisable
 
within 60 days of
April 15, 2024, (v) 2,709,122 shares of Class B common
 
stock subject to options exercisable within 60 days of April 15,
 
2024
 
and, without
duplication, (vi) the
 
shares of common
 
stock subject to
 
the Voting
 
Agreement that are
 
disclosed under footnotes
 
(3) and
 
(11), pursuant
 
to
which Ms.
 
Hu holds
 
irrevocable proxies.
 
Ms. Hu
 
and Mr.
 
Reese are
 
the sole
 
shareholders of
 
Blackfoot and
 
may therefore
 
be deemed
 
to
beneficially own the securities
 
held by Blackfoot. We
 
do not believe that
 
the parties to these
 
voting agreements constitute a
 
“group” under
Section 13 of the Exchange Act, as Ms. Hu exercises voting control
 
over these shares. All of the shares identified in this footnote are subject
a Voting Agreement Except as set forth in this footnote, Ms. Hu has no
 
voting or investment power over the securities
 
beneficially owned by
the other parties to the Voting Agreement and disclaims beneficial ownership of such securities.
(3)
 
Consists of (i) 17,500 shares
 
of Class A common stock
 
held by Mr. Reese, (ii) 3,955,512 shares
 
of Class B common stock
 
held by Mr. Reese,
(iii) 271,655 shares
 
of Class A
 
common stock
 
held by Blackfoot,
 
(iv) 2,903,254 shares
 
of Class A
 
common stock
 
subject to options
 
exercisable
within 60 days of
 
April 15, 2024 and (v)
 
2,393,468 shares of Class
 
B common stock subject
 
to options exercisable
 
within 60 days of April
 
15,
2024. Ms. Hu and Mr.
 
Reese are the sole shareholders of Blackfoot and may therefore be
 
deemed to beneficially own the securities held by
Blackfoot. All of the shares identified in this footnote are subject to a Voting
 
Agreement.
 
Except as set forth in this footnote, Mr. Reese has
no voting or investment power over the securities beneficially owned by
 
the other parties to the Voting
 
Agreement and disclaims beneficial
ownership of such securities.
(4)
 
Consists of 268,404 shares of Class A common stock subject
 
to options exercisable within 60 days of April 15, 2024.
(5)
 
Consists of
 
(i) 906,141 shares
 
of Class A
 
common stock held
 
by Dr.
 
Diamandis, (ii) 13,824
 
shares of Class
 
A common stock
 
held by
 
the
spouse of Dr. Diamandis, (iii)
 
1,099,915 shares of
 
Class B common
 
stock and (iv)
 
960,838 shares of
 
Class A common stock
 
subject to options
exercisable within 60 days of April 15, 2024.
(6)
 
Consists of 174,489 shares of Class A common stock subject
 
to options exercisable within 60 days of April 15, 2024.
(7)
 
Consists of 32,850 shares of Class A common stock held by various members of Mr. Ogilvie’s
 
family and for which Mr. Ogilvie has voting
and investment power and 132,352 shares of Class A
 
common stock subject to options exercisable within 60
 
days of April 15, 2024.
(8)
 
Consists of (i) 8,058 shares of Class A
 
common stock held by Mr. Smith, (ii) 54,202 shares of Class A
 
common stock held by IO Fund, LLC
for which Mr.
 
Smith shares voting and
 
investment power and (iii)
 
132,352 shares of Class
 
A common stock
 
subject to options
 
exercisable
within 60 days of April 15,
 
2024. Mr. Smith disclaims beneficial ownership
 
of the securities held by IO
 
Fund, LLC except to the extent
 
of his
pecuniary interest therein.
(9)
 
Consists of 132,352 shares of Class A common stock subject
 
to options exercisable within 60 days of April 15, 2024.
(10)
 
In addition to the
 
directors and named executive officers
 
included in this table,
 
also includes securities beneficially owned by
 
Jason Pesile.
Consists of (i) 56,701,857 shares of Class A common stock, (ii) 10,574,388 shares of Class B common stock, (iii) 6,332,894 shares of Class
A common stock subject to options exercisable
 
within 60 days of April 15, (iv)
 
5,102,590 shares of Class B common
 
stock subject to options
exercisable within 60 days of April 15, 2024 and (v)
 
1,928,020 shares of Class A common stock issuable
 
upon the exercise of a warrant.
(11)
 
Consists of (i)
 
51,737,344 shares
 
of Class A
 
common stock
 
held by United
 
Biomedical, Inc.
 
(“UBI”), (ii) 1,928,020
 
shares of Class
 
A common
stock issuable upon the exercise of the of a warrant owned by UBI and
 
(iii) 4,212,495 shares of Class A common stock held by UBIA. UBI
is a majority shareholder in UBIA and may be deemed to share voting and investment power over the securities held by UBIA. Ms. Hu, Mr.
Reese and Ms. Hu’s father Nean Hu, together as a group, control more than
 
50% of the equity interests of UBI, and together hold
 
voting and
investment control of
 
all shares held
 
by UBI.
 
Under the so-called
 
“rule of three,”
 
if voting and
 
dispositive decisions regarding
 
an entity’s
securities are made by three or more
 
individuals, and a voting or dispositive decision
 
requires the approval of a majority
 
of those individuals,
then none of the
 
individuals is deemed a
 
beneficial owner of
 
the entity’s securities. Each of Ms.
 
Hu, Mr. Reese and Mr. Hu expressly
 
disclaim
beneficial ownership of such shares, except to the
 
extent of their respective pecuniary interest. All of the
 
shares identified in clauses (i) and
(ii) of this footnote are subject to a
 
Voting
 
Agreement.
 
Except as set forth in this footnote, UBI has
 
no voting or investment power over the
securities beneficially owned
 
by the other parties to
 
the Voting Agreement and disclaims beneficial ownership
 
of such securities. The
 
mailing
address of UBI is 2622 Commerce Street, Dallas
 
TX 75226-1402.
13
EXECUTIVE COMPENSATION
We
 
qualify as an
 
“emerging growth
 
company” under
 
the Jumpstart
 
Our Business
 
Startups Act
 
of 2012.
 
As a result,
we are
 
permitted to and
 
rely on exemptions
 
from certain
 
disclosure requirements that
 
are applicable to
 
other companies
that
 
are
 
not
 
emerging
 
growth
 
companies.
 
Accordingly,
 
we
 
have
 
included
 
compensation
 
information
 
for
 
only
 
our
principal executive
 
officer,
 
our two
 
next most
 
highly compensated
 
executive officers
 
serving at
 
fiscal year-end and
two former executive officers
 
who would have been
 
included as one
 
of the foregoing had
 
they been serving at
 
fiscal
year-end. We
 
have not included a
 
compensation discussion and analysis
 
of our executive
 
compensation programs or
tabular compensation information
 
other than the Summary
 
Compensation Table
 
and the Outstanding Equity
 
Awards
table.
 
In
 
addition,
 
for
 
so
 
long
 
as
 
we
 
are
 
an
 
emerging
 
growth
 
company,
 
we
 
will
 
not
 
be
 
required
 
to
 
submit
 
certain
executive
 
compensation
 
matters
 
to
 
our
 
stockholders
 
for
 
advisory
 
votes,
 
such
 
as “say-on-pay” and “say-on-
frequency” of say-on-pay votes.
We
 
will remain
 
an emerging
 
growth company
 
under the
 
JOBS Act
 
until the
 
earliest of
 
(a) December 31,
 
2026 (the
last day of
 
the fiscal year
 
following the fifth
 
anniversary of
 
the consummation of
 
our initial public
 
offering), (b)
 
the
last day
 
of our
 
fiscal
 
year in
 
which
 
we have
 
a total
 
annual gross
 
revenue of
 
at least
 
$1.235 billion,
 
(c) the
 
date on
which
 
we
 
are
 
deemed
 
to
 
be
 
a
 
“large
 
accelerated
 
filer”
 
under
 
the
 
rules
 
of
 
the
 
SEC
 
with
 
at
 
least
 
$700.0 million
 
of
outstanding securities
 
held by
 
non-affiliates or
 
(d) the
 
date on
 
which we
 
have issued
 
more than
 
$1.0 billion in
 
non-
convertible debt securities during the previous three years.
We are also a “smaller reporting
 
company” as defined in
 
the Exchange Act. We may continue to
 
be a smaller
 
reporting
company even after we are
 
no longer an emerging
 
growth company.
 
We
 
may take advantage of certain
 
of the scaled
disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for
so
 
long
 
as
 
the
 
market
 
value
 
of
 
our
 
voting
 
and
 
non-voting
 
common
 
stock
 
held
 
by
 
non-affiliates
 
is
 
less
 
than
$250.0 million
 
measured
 
on
 
the
 
last
 
business
 
day
 
of
 
our
 
second
 
fiscal
 
quarter,
 
or
 
our
 
annual
 
revenue
 
is
 
less
 
than
$100.0 million
 
during
 
the
 
most
 
recently
 
completed
 
fiscal
 
year
 
and
 
the
 
market
 
value
 
of
 
our
 
voting
 
and
 
non-voting
common stock held by non-affiliates is
 
less than $700.0 million measured on the last
 
business day of our second fiscal
quarter.
Overview
This section discusses
 
the material components of
 
our 2023
 
compensation program for our
 
“named executive officers”
or “NEOs”. These NEOs for 2023
 
are:
●
Mei Mei Hu, Co-Founder, President, Chief Executive Officer
 
and Director;
●
Louis Reese, Co-Founder and Executive Chairman;
●
Sumita Ray, Chief Legal, Compliance
 
& Administrative Officer;
●
Dr. Ulo Palm, former Chief Medical
 
Officer; and
●
René Paula Molina, former
 
Senior Vice President, Legal & Business Affairs, General
 
Counsel and Secretary.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
14
Summary Compensation Table
The following
 
table presents
 
the compensation
 
for services
 
provided to
 
us by
 
our named
 
executive officers
 
for the
fiscal years indicated.
 
Name and Principal Position
Year
Salary ($)(1)
Bonus ($)(2)
Option
Awards
($)(3)
Nonequity
Incentive Plan
Compensation
($)(4)
All Other
Compensation
($)(5)
Total ($)
Mei Mei Hu
2023
307,672
—
1,015,188
—
37,471
1,360,351
Chief Executive Officer
2022
400,000
115,705
—
—
16,069
531,774
Louis Reese
2023
238,104
—
1,015,188
—
37,471
1,290,763
Executive Chairman
Sumita Ray
2023
107,500
4,300
357,850
27,950
3,307
500,907
Chief Legal, Compliance and
Administrative Officer
Ulo Palm, MD, PhD
2023
337,500
—
202,085
—
13,200
552,785
Former Chief Medical Officer
2022
450,000
135,000
376,000
—
961,000
René Paula Molina
2023
310,480
—
190,942
—
43,200
544,622
Former Senior Vice
President, Legal and
Business Affairs
2022
362,500
108,750
—
8,878
480,128
______________________
(1)
 
Mr. Reese was granted
 
150,594 options in lieu of salary for
 
the fiscal year ended
 
December 31, 2023. The amounts reported here represent
the
 
grant
 
date
 
fair
 
value
 
of
 
stock
 
options,
 
calculated
 
in
 
accordance
 
with
 
Accounting
 
Standards
 
Update
 
718,
 
“Compensation—Stock
Compensation (Topic 718).” For additional information, see Notes 2 and 11 to our consolidated financial statements included in our Annual
Report on Form 10-K for the year ended December 31, 2023 (the “Annual Report”). The assumptions used in
 
calculating the grant date fair
value of the
 
stock options reported
 
in this table
 
are set forth
 
in the section
 
of the Annual
 
Report titled “Management’s
 
Discussion and Analysis
of Financial Condition and Results of Operations— Critical Accounting
 
Policies and Estimates—Stock-Based Compensation.”
Ms. Ray joined the Company on October 1, 2023. For
 
2023, Ms. Ray’s salary reflects a partial year of employment.
Dr. Palm resigned from the Company effective September 30, 2023.
 
For 2023, his salary represents payment from January 1, 2023 through
that date.
Mr. Paula
 
resigned from the Company effective
 
November 3, 2023. For 2023, his
 
salary represents payment from January 1,
 
2023 through
that date.
(2)
 
The amount shown in this column for Ms. Ray reflects
 
the discretionary portion of her 2023 bonus, as described
 
under “—Bonuses” below.
Ms. Hu and Mr. Reese did not receive bonuses with respect
 
to services performed for the fiscal year
 
ended December 31, 2023 because prior
to the board of directors or compensation committee determining any
 
bonuses for that year they informed the compensation committee
 
that
they would decline any bonus the committee might otherwise
 
choose to award.
Ms. Hu was granted 73,928 options in
 
lieu of a cash bonus with respect to performance
 
during the fiscal year ended December
 
31, 2022. The
amounts reported here represent the grant date fair value of such stock options, calculated in accordance with Accounting Standards Update
718,
 
“Compensation—Stock Compensation
 
(Topic
 
718).”
 
For additional
 
information,
 
see
 
Notes
 
2
 
and
 
11
 
to
 
our
 
consolidated
 
financial
statements included in the Annual Report. The assumptions used in calculating the
 
grant date fair value of the stock options reported in this
table are set forth in
 
the section of the Annual Report
 
titled “Management’s Discussion and Analysis of
 
Financial Condition and Results of
Operations— Critical Accounting Policies and
 
Estimates—Stock-Based Compensation.”
 
The amount reported has
 
been amended to reflect
the correction of an error in the calculation of grant date fair value reported in the Company’s definitive proxy statement relating to its 2023
annual meeting of stockholders.
Dr. Palm’s and Mr. Paula’s discretionary bonuses for services performed in 2022
 
were paid in 2023. Dr. Palm elected
 
to defer payment of his
2022 bonus in return for the opportunity
 
to receive either (a) 1.25 times such amount
 
in the event certain corporate milestones were
 
achieved
in 2023 or (b) .75 times such amount in the event such
 
milestones were not achieved. Because Dr. Palm left the Company before the end
 
of
15
2023, he was
 
paid .75 times
 
the amount of
 
the discretionary bonus
 
he earned for 2022,
 
or $101,250, rather
 
than the full
 
$135,000 discretionary
bonus he earned for his services performed in 2022.
(3)
 
The amounts reported here represent the grant
 
date fair value of stock
 
options, calculated in accordance with Accounting Standards Update
718,
 
“Compensation—Stock Compensation
 
(Topic
 
718).”
 
For additional
 
information,
 
see
 
Notes
 
2
 
and
 
11
 
to
 
our
 
consolidated
 
financial
statements included in the Annual
 
Report on Form 10-K. The
 
assumptions used in calculating the grant
 
date fair value of
 
the stock options
reported in this table are set forth in the section of the Annual Report titled “Management’s
 
Discussion and Analysis of Financial Condition
and Results of Operations—Critical Accounting Policies and Estimates—Stock-Based
 
Compensation.”
(4)
 
The amount reported in
 
this column for Ms.
 
Ray represents the amount
 
earned pursuant to our
 
annual cash incentive awards
 
program. See
“Narrative Disclosure to Summary Compensation Table—Bonuses” below.
(5)
 
For Ms. Hu and Mr. Reese the amounts shown represent the aggregate incremental cost of personal use
 
of our corporate airplane. Aggregate
incremental cost was
 
determined by taking
 
the variable costs
 
to the Company
 
of owning and
 
operating the corporate
 
airplane in 2023
 
and
2022, as applicable,
 
and multiplying
 
it by a
 
fraction which
 
represents the
 
portion of the
 
usage of the
 
airplane in
 
those years that
 
was determined
to be personal use by
 
Ms. Hu and Mr.
 
Reese.
 
Occasionally family members of Ms. Hu
 
and Mr. Reese have
 
accompanied them on business
travel on our corporate airplane, for which we incurred
de minimis
 
incremental costs.
For Ms. Ray, the amounts shown represent the
Company’s matching contributions to a 401(k) plan.
 
For Mr. Paula, the amounts
 
shown represent the Company’s matching contributions to
a retirement 401(k)
 
plan and fees paid
 
to Mr. Paula pursuant to
 
his consulting arrangement
 
described below. For Dr. Palm, the
 
amounts shown
represent the Company’s matching contributions to a 401(k) plan.
Narrative Disclosure to Summary Compensation Table
The following describes
 
the material elements
 
of our compensation
 
program for the
 
fiscal year ended
 
December 31,
2023
 
as applicable to
 
our NEOs and
 
reflected in the
 
Summary Compensation
 
Table
 
above. We
 
continue to evaluate
our executive compensation program with the goal of aligning executive compensation with stockholder interests. As
a
 
result
 
of
 
this
 
evaluation,
 
we
 
expect
 
to
 
make
 
changes
 
to
 
further
 
enhance
 
our
 
compensation
 
practices,
 
and
 
future
changes may differ in several respects from our historical program as described
 
herein.
Base Salary
We use base salaries to
 
recognize the experience,
 
skills, knowledge and
 
responsibilities required for all
 
our employees,
including our NEOs. Base salaries are determined based on the individual’s responsibilities, performance, experience
and what we determine
 
is appropriate and
 
necessary to retain key talent,
 
taking into consideration
 
the other forms of
compensation we provide.
During 2023
 
and
 
2022,
 
Ms. Hu’s
 
base
 
salary
 
was $400,000.
 
Ms.
 
Hu waived
 
her base
 
salary beginning
 
October 1,
2023. Mr.
 
Reese elected to receive
 
a grant of options
 
in lieu of his
 
base salary for 2023.
 
Ms. Ray’s
 
base salary is set
forth in her offer letter, and was $430,000 in 2023, increasing to $450,000 on January 1, 2024. Dr. Palm
 
’s base salary
was $450,000 in
 
2023 and 2022.
 
Dr. Palm resigned from
 
the Company on
 
September 30, 2023. Mr. Paula’s base salary
is set forth
 
in his offer
 
letter, described
 
in more detail
 
below,
 
and was $375,000
 
in 2023 and
 
$370,000 in
 
2022.
 
Mr.
Paula resigned
 
from the
 
Company on
 
November 5, 2023
 
and has been
 
retained as
 
a consultant
 
through October 31,
2024. Mr. Paula’s
 
consulting agreement is described below.
Bonuses
None of our NEOs is contractually entitled to an annual bonus or other annual incentive compensation,
 
however, Ms.
Ray is, and Dr. Palm and Mr. Paula
 
were,
 
eligible for an annual cash bonus targeted at 40% of base salary under their
offer letters.
 
In connection
 
with their
 
departures, Dr.
 
Palm and
 
Mr.
 
Paula were
 
not, however,
 
eligible to
 
receive an
annual cash bonus for 2023.
Ms. Ray’s
 
2023 bonus
 
opportunity was
 
prorated for
 
the portion
 
of the
 
year she was
 
employed by
 
the Company
 
and
was subject to
 
the Company’s achievement of five
 
equally-weighted corporate goals consisting of
 
one regulatory goal,
two clinical goals, one
 
intellectual property development goal and one
 
corporate culture goal.
 
The regulatory goal was
not achieved; the two clinical goals were partially achieved; the intellectual property development goal was achieved;
and
 
the
 
corporate
 
culture
 
goal
 
was
 
achieved.
 
Based
 
on
 
the
 
foregoing
 
achievement,
 
the
 
Compensation
 
Committee
approved the funding
 
of the corporate
 
bonus pool at
 
65% of target.
 
The Compensation
 
Committee further
 
exercised
its discretion
 
to approve
 
funding at
 
an additional
 
10% of
 
target and
 
delegated authority
 
to the
 
Company’s
 
CEO to
allocate such additional funding to the bonus pool participants in her discretion. Ms. Ray received a payout of 75% of
16
her target bonus amount,
 
or $32,250 (65% of target
 
based on the Company’s
 
achievement of the corporate
 
goals and
an
 
additional
 
10%
 
allocated
 
to
 
Ms.
 
Ray
 
in
 
the
 
CEO’s
 
discretion).
 
The
 
portion
 
of
 
this
 
amount
 
attributable
 
to
 
the
achievement
 
of
 
the
 
corporate
 
goals
 
is
 
set
 
forth
 
in
 
the
 
“Non-Equity
 
Incentive
 
Plan
 
Compensation”
 
column
 
of
 
the
Summary Compensation Table
 
and the portion of this amount awarded to Ms. Ray in the discretion of the CEO is set
forth in the “Bonus” column of the Summary Compensation Table
 
.
Prior to the
 
board of directors
 
or the compensation
 
committee awarding
 
them any cash
 
bonus for 2023,
 
Ms. Hu and
Mr. Reese informed the
 
compensation committee that they
 
would decline any
 
cash bonus the
 
compensation committee
might choose to award.
Employee Benefits and Perquisites
Our NEOs are eligible to participate
 
in our health and welfare plans
 
on the same terms and conditions
 
as provided to
our full-time
 
employees generally.
 
Additionally,
 
in 2023
 
and 2022,
 
the Company
 
allowed
 
our CEO
 
and Executive
Chairman to have limited use of the corporate plane for personal travel, the costs of which were considered as part
 
of
their overall compensation package from the
 
Company and are disclosed in the Summary
 
Compensation Table above.
Retirement Benefits
We
 
maintain a 401(k) plan
 
that provides eligible
 
U.S. employees with
 
an opportunity to
 
save for retirement
 
on a tax
advantaged basis. Beginning in 2022, we offered to match participant contributions to their individual accounts 100%
up to
 
4% of
 
their base
 
salary.
 
Mr.
 
Paula received
 
matching contributions
 
of $8,878.45
 
in 2022.
 
We
 
do not
 
provide
deferred compensation, defined benefit pension or nonqualified defined contribution benefits
 
for our NEOs.
Employment Agreements
We currently do not have a formal
 
employment agreement or offer letter with Ms. Hu or
 
Mr. Reese.
We provided
 
Ms. Ray with an offer letter in connection with the commencement of her employment,
 
which provides
for at-will
 
employment and
 
sets forth
 
an annual
 
base salary
 
of $430,000
 
through December 31,
 
2023 increasing
 
to
$450,000 on
 
January 1, 2024,
 
eligibility for
 
an annual
 
cash bonus
 
targeted
 
at 40%
 
of her
 
base salary
 
and an
 
initial
grant of
 
stock options
 
with an
 
aggregate grant
 
date value
 
of $357,850.
 
For more
 
information on
 
such grant,
 
see the
table below under “Outstanding Equity Awards
 
as of December 31, 2023” and its accompanying footnote disclosure.
The offer letter also provides that Ms. Ray is eligible to participate in our
 
medical, dental and vision plans.
We provided Dr.
 
Palm with an offer letter in connection with the commencement of his employment, which provided
for at-will employment and set forth
 
his annual base salary of $450,000,
 
eligibility for an annual cash bonus targeted
at 40% of
 
his base salary
 
and an initial
 
grant of stock
 
options with an
 
aggregate grant
 
date value of
 
$2,276,442. For
more information
 
on such
 
grant, see
 
the table
 
below under
 
“Outstanding Equity
 
Awards
 
as of
 
December 31, 2023”
and its accompanying
 
footnote disclosure.
 
The offer
 
letter also
 
provided
 
that Dr.
 
Palm was
 
eligible to
 
participate in
our medical, dental and vision plans.
We provided Mr. Paula with an offer letter in connection with
 
the commencement of his employment, which
 
provided
for at-will
 
employment and
 
set forth
 
an annual
 
base salary
 
of $325,000
 
(which salary
 
was increased
 
to $370,000
 
in
2023),
 
eligibility for
 
an annual
 
cash bonus
 
targeted
 
at 40%
 
of his
 
base salary
 
and a
 
grant of
 
stock options
 
with an
aggregate grant date value of $769,604.
 
For more information on such grant, see
 
the table below under “Outstanding
Equity Awards
 
as of
 
December 31,
 
2023” and
 
its accompanying
 
footnote disclosure.
 
The offer
 
letter also
 
provided
that Mr. Paula was eligible to participate
 
in our medical, dental and vision plans.
In
 
connection
 
with
 
Mr.
 
Paula’s
 
departure
 
in
 
November
 
2023,
 
we entered
 
into
 
a
 
consulting
 
agreement
 
pursuant
 
to
which he
 
advises the
 
Company on
 
legal, human
 
relations
 
and
 
governance
 
matters for
 
up to
 
three hours
 
per
 
month
through October 31,
 
2024. As consideration,
 
he is entitled
 
to receive
 
a retainer of
 
$2,500 per
 
month, payable on
 
the
15th of each month.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
17
Long-Term
 
Incentive Awards
From time to time, we have granted stock
 
options to our NEOs to purchase shares of
 
our Class A common stock, each
with an exercise price no less than the fair market value of a share of Class
 
A common stock on the date of grant.
For
 
more
 
information
 
on
 
the
 
stock
 
options
 
granted
 
to
 
our
 
NEOs,
 
see
 
the
 
table
 
below
 
under
 
“Outstanding
 
Equity
Awards as of December
 
31, 2023” and its accompanying footnote disclosure.
In the event an NEO terminates
 
employment for any reason, all
 
unvested stock options are
 
forfeited. In the event the
termination is for “cause,”
 
both vested and unvested stock options are forfeited.
Clawback Policy
As a public
 
company,
 
if we are
 
required to
 
restate our financial
 
results due to
 
our material
 
noncompliance with
 
any
financial reporting
 
requirements under
 
the federal
 
securities laws
 
as a
 
result of
 
misconduct, the
 
President and
 
Chief
Executive Officer
 
and Chief
 
Financial Officer
 
may be legally
 
required to
 
reimburse our
 
Company for
 
any bonus
 
or
other incentive-based or equity-based
 
compensation they receive in accordance
 
with the provisions of section 304
 
of
the
 
Sarbanes-Oxley
 
Act
 
of
 
2002,
 
as
 
amended.
 
Additionally,
 
we
 
have
 
implemented
 
a
 
Dodd-Frank
 
Act-compliant
clawback policy, as required by SEC rules.
Outstanding Equity Awards
 
as of December 31, 2023
The following table presents the outstanding equity incentive plan awards held by each named executive officer as of
December 31, 2023.
Option Awards
Name
Grant Date
Number of
Securities
Underlying
Unexercised
Options
Exercisable (#)
Number of
Securities
Underlying
Unexercised
Options
Unexercisable (#)
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
Option Exercise
Price Per Share ($)
Option Expiration
Date
Mei Mei Hu
03/28/2018
(1)
1,590,547
—
0.28
03/28/2028'
01/26/2021
(2)
2,393,468
—
598,367
10.07
(9)
01/26/2026'
01/26/2021
(3)
181,501
197,284
10.07
(9)
01/26/2031'
03/07/2023
(4)
116,250
503,750
2.29
03/07/2033'
03/07/2023
(5)
73,928
—
2.29
03/07/2033'
Louis Reese
03/28/2018
(1)
2,346,547
—
0.28
03/28/2028'
01/26/2021
(2)
2,393,468
—
598,367
10.07
(9)
01/26/2026'
01/26/2021
(3)
181,501
197,284
10.07
(9)
01/26/2031'
03/07/2023
(4)
116,250
503,750
2.29
03/07/2033'
03/07/2023
(5)
61,607
—
2.29
03/07/2033'
03/07/2023
(6)
301,188
—
2.29
03/07/2033'
Sumita Ray
11/01/2023
(7)
—
425,000
1.17
(9)
11/01/2033'
René Paula
01/25/2021
(8)
209,332
—
4.01
(9)
03/01/2031'
11/11/2021
(8)
42,066
—
13
(9)
11/11/2031'
03/07/2023
(8)
17,006
—
2.29
(9)
03/07/2033'
Ulo Palm, MD, PhD
 
—
 
—
—
—
—
—
______________________
(1)
 
These time-based options to purchase shares of our Class A
 
common stock are subject to a four-year time-vesting period, with 25% vesting
one year after the
 
vesting commencement date and the
 
remainder vesting in equal installments
 
each month during remainder of the
 
vesting
period subject to continued service. The vesting commencement
 
date is January 1, 2018 for the options granted to
 
Ms. Hu and Mr. Reese.
 
18
(2)
 
These performance-vesting options to purchase shares of our Class B common
 
stock are subject to performance-based conditions with 80%
vesting upon the closing of our IPO and the remaining
 
20% vesting if the Class A common stock maintains a
 
25% higher value than the IPO
offering price for 20
 
days out of any
 
consecutive 30-day period subject
 
to continued service on
 
the vesting date. These
 
options were originally
issued by
 
a predecessor
 
entity prior
 
to the
 
Reorganization and
 
converted to options
 
to purchase our
 
Class A
 
common stock
 
following the
Reorganization. In August 2021,
 
the Company canceled the options
 
to purchase shares of
 
Class A common stock
 
in exchange for an
 
equal
number of options to
 
purchase shares of Class
 
B common stock. The
 
options expire on the
 
fifth anniversary of the
 
grant date. See Note
 
11
“Equity Incentive Plans” of the consolidated financial statements in the Annual Report for additional information. Class B common stock is
convertible to Class A common stock on a one-for-one
 
basis and has no expiration date.
(3)
 
These time-based options to purchase shares of our Class B
 
common stock are subject to a four-year time-vesting period,
 
with 25% vesting
one year after
 
the grant date
 
and the remainder
 
vesting in equal
 
installments each month during
 
remainder of the
 
vesting period subject
 
to
continued service.
 
These options
 
were originally
 
issued
 
by a
 
predecessor entity
 
prior to
 
the Reorganization
 
and converted
 
to
 
options to
purchase our Class A common stock following
 
the Reorganization. In August 2021, the Company canceled the options
 
to purchase shares of
Class A common stock in exchange for an equal number of options to
 
purchase shares of Class B common stock. The options expire on the
tenth anniversary of the grant
 
date. See Note 11
 
“Equity Incentive Plans” of the
 
consolidated financial statements in the
 
Annual Report for
additional information. Class B common stock is convertible
 
to Class A common stock on a one-for-one basis and has no expiration
 
date.
(4)
 
These time-vesting options
 
to purchase shares
 
of our Class
 
A common stock
 
are subject to
 
a four-year time-vesting
 
period, with shares
 
vesting
ratably on a monthly basis over that time period.
(5)
 
These options to purchase
 
shares of our Class A
 
common stock were granted
 
in lieu of an annual
 
cash bonus for the year
 
2022, and were fully
vested at the time of grant.
(6)
 
These options to purchase shares of our
 
Class A common stock were granted to
 
Mr. Reese in lieu of base salary for the years 2022 and
 
2023.
 
They vested monthly from January 1, 2023 through December
 
31, 2023.
(7)
 
These time-vesting options to purchase shares
 
of our Class A common stock
 
are subject to a four-year time-vesting period,
 
with 25% vesting
one year
 
after the
 
vesting commencement
 
date and
 
the remainder
 
vesting in
 
equal installments
 
quarterly during
 
remainder of
 
the vesting
period subject to continued service.
 
The vesting commencement date is October 1, 2023.
(8)
 
Mr.
 
Paula transitioned from
 
an employee to
 
a consultant
 
on November 3, 2023,
 
with an
 
end date
 
as consultant of
 
October 31, 2024.
 
His
outstanding options ceased vesting on
 
November 3, 2023, and he will
 
be eligible to exercise them through
 
90 days after the completion of
 
his
term as a consultant (i.e., January 31, 2025).
(9)
 
Pursuant to the Repricing, as
 
of the Repricing Date, these
 
options were repriced such that
 
the exercise price per share
 
for such options was
reduced to $0.70.
19
DIRECTOR COMPENSATION
Our board
 
of directors has
 
approved a
 
policy providing for
 
annual non-employee
 
director compensation.
 
Under this
policy, each non-employee director is eligible to receive cash and equity
 
compensation for their services on our Board
of Directors. Mei Mei Hu, our President and Chief
 
Executive Officer, and
 
Louis Reese, our Executive Chairman, are
also members of the board of directors, but they did not receive any additional compensation for service as a director.
Peter
 
Powchik, MD
 
was both
 
a
 
member of
 
the board
 
of directors
 
and
 
Executive Vice
 
President,
 
Global
 
Scientific
Director from
 
October 1, 2023
 
through December 31,
 
2023 but
 
he did
 
not receive
 
any additional
 
compensation for
service as
 
a director
 
during this
 
period. In
 
addition, in
 
connection with
 
his becoming
 
an employee
 
of the
 
Company
and receiving
 
equity awards
 
in his
 
capacity as
 
an employee,
 
Dr.
 
Powchik forfeited
 
a portion
 
of his
 
annual director
equity award
 
for 2023.
 
The compensation
 
earned by
 
or paid
 
to Dr.
 
Powchik in
 
his capacity
 
as an
 
employee of
 
the
Company is set forth
 
in the “All Other
 
Compensation” column of the
 
2023 Director Compensation
 
table below.
 
The
compensation earned by or paid to Ms. Hu and Mr. Reese as named executive officers of Vaxxinity for the fiscal year
ended December 31, 2023
 
is set forth in this
 
item above under
 
“Executive Compensation—Summary Compensation
Table.”
Each
 
non-employee
 
director
 
is entitled
 
to
 
receive
 
an annual
 
retainer
 
of $40,000,
 
payable
 
quarterly in
 
arrears.
 
Any
independent director who joins or vacates the board of directors mid-year will receive a prorated annual cash retainer
during the
 
director’s
 
year of
 
service. In
 
addition, the
 
lead independent
 
director of
 
the board
 
of directors,
 
committee
chairs and committee
 
members are entitled
 
to receive the
 
following additional annual
 
retainers, payable
 
quarterly in
arrears:
●
$25,000 for the lead independent director;
●
$20,000 for the chair of the audit committee;
●
$15,000 for the chair of the compensation committee;
●
$10,000 for the chair of the nominating and governance committee;
●
$10,000 for each other member of the audit committee;
●
$7,500 for each other member of the compensation committee; and
●
$5,000 for each other member of the nominating and governance committee.
Some of the
 
directors serving on the
 
board of directors in
 
2023 voluntarily agreed to
 
waive their rights
 
to cash retainers
for a portion of their service during 2023 (see “2023 Director Compensation” table below).
Each non-employee director continuing in service after each
 
of our annual stockholder meetings will automatically be
granted a number of stock options to purchase shares of our Class A common stock determined by dividing $270,000
by the 50-day moving average price of our Class
 
A common stock. Such annual grants will vest on the earliest
 
of (1)
the one-year anniversary of the
 
grant date (or applicable
 
service start date for any
 
director appointed between annual
stockholder meetings), (2) the following year’s annual stockholder meeting, and (3) a “change of control”
 
(as defined
in the 2021 Omnibus Plan),
 
in each case, subject to
 
such non-employee director’s
 
continued service in such capacity
through the vesting date.
We
 
intend to
 
periodically evaluate
 
the terms
 
of compensation
 
of our
 
non-employee directors
 
as part
 
of our
 
regular
review of our overall compensation strategy.
Stock options granted to our
 
non-employee directors under the program have
 
an exercise price equal to
 
the fair market
value of our common stock on the date of grant and expire not later than ten years after the date
 
of grant.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20
2023
 
Director Compensation
The following table sets
 
forth the compensation earned
 
by our non-employee
 
directors for their
 
service on the board
of directors during 2023:
Fees Earned or Paid
in Cash ($)
(1)
Option Awards ($)
(2)
All Other
Compensation ($)
(3)
Total ($)
Name
Landon Ogilvie
66,468
204,153
—
270,611
Peter Diamandis
29,783
204,153
—
233,936
Peter Powchik
10,000
204,153
529,850
744,003
James Smith
45,833
204,153
—
249,986
Gabrielle Toledano
55,833
204,153
—
259,986
Katherine Eade
41,667
204,153
—
245,820
George Hornig
60,000
204,153
—
264,153
Gregory R. Blatt
—
—
—
—
James Chui
—
—
—
—
______________________
(1)
 
Mr. Blatt, Mr. Chui, Dr.
 
Diamandis and Dr. Powchik voluntarily agreed to waive their rights to cash retainers for their board services
 
during
the first half of 2023.
 
Messrs. Blatt and Chui stepped down from the board
 
on January 20, 2023 so received no cash retainers during
 
2023.
(2)
 
The amounts
 
reported reflect
 
the grant
 
date fair
 
value of
 
stock options
 
computed in
 
accordance with
 
ASC 718.
 
We
 
provide information
regarding the assumptions used to calculate the value of the option awards in Note 14 to our consolidated financial statements in the Annual
Report. Any awards originally granted as stock
 
options to purchase common shares of
 
UNS or COVAXX for service as a director of UNS or
COVAXX were terminated and
 
substituted with an option to purchase shares of Class A common stock of Vaxxinity
 
in connection with the
Reorganization. See Note 1 to our consolidated financial statements in the Annual Report for additional information. In connection with the
commencement of his service as
 
an employee, Dr. Powchik forfeited 95,336 of the
 
132,252 stock options granted
 
to him as part of his annual
director equity
 
award. The
 
following table
 
shows the
 
aggregate number
 
of shares
 
subject to
 
options held
 
by each
 
of our
 
directors as
 
of
December 31, 2023:
 
Number of Class A Stock Options Held at Fiscal
Year-End
Peter Diamandis
1,093,190
George Hornig
329,492
Peter Powchik
(a)
845,103
Landon Ogilvie
132,252
James Smith
132,252
Gabrielle Toledano
132,252
______________________
 
(a)
 
Includes 584,744 options awarded to Dr. Powchik in his capacity as an employee
 
of Vaxxinity.
(3)
 
The amount reported
 
reflects compensation for
 
Dr. Powchik’s
 
service as an
 
employee of the
 
Company in 2023,
 
including $31,250 in base
salary and $498,600,
 
which reflects the grant date
 
fair value of stock options
 
awarded to Dr. Powchik computed in accordance with ASC
 
718
using the assumptions described
 
in Note 14 to our consolidated
 
financial statements in the
 
Annual Report. Dr. Powchik did not receive
 
a cash
bonus for 2023.
21
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We
 
are subject
 
to the
 
reporting and
 
information requirements
 
of the
 
Securities Exchange
 
Act of
 
1934, as
 
amended,
and as
 
a result
 
file reports,
 
proxy statements
 
and other
 
information
 
with the
 
SEC. The
 
SEC maintains
 
a
 
website at
www.sec.gov
 
that
 
contains
 
reports,
 
proxy
 
and
 
information
 
statements
 
and
 
other
 
information
 
regarding
 
registrants,
such as Vaxxinity
 
,
 
Inc., that
 
file electronically
 
with the SEC.
 
We
 
also maintain a
 
website at
 
www.vaxxinity.com,
 
at
which you
 
may access
 
these materials
 
free of
 
charge as
 
soon as
 
reasonably practicable
 
after they
 
are electronically
filed with, or furnished to, the SEC. The information contained in, or that can be accessed through, our website is not
part of this Information Statement.
OTHER MATTERS
Other Business
The Board knows
 
of no other
 
matters other than
 
those described in
 
this Information Statement
 
that have been
 
approved
or considered by the Majority Stockholders.
Stockholders Sharing an Address
SEC rules permit
 
companies and intermediaries
 
such as brokers
 
to satisfy delivery
 
requirements for
 
proxy materials
with respect to two or more stockholders
 
sharing the same address by delivering a
 
single copy of the proxy materials
addressed to those
 
stockholders.
 
This process, which
 
is commonly referred
 
to as
 
“householding,” provides cost
 
savings
for companies and helps the
 
environment by conserving natural
 
resources. Some brokers household
 
proxy materials,
delivering a single proxy statement
 
or notice to multiple stockholders
 
sharing an address unless contrary
 
instructions
have been received from the affected stockholders. Once you have received
 
notice from your broker that they will be
householding materials to
 
your address, householding
 
will continue
 
until you
 
are notified otherwise
 
or until you
 
revoke
your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate
proxy statement or
 
notice, or if
 
your household is
 
receiving multiple copies
 
of these documents
 
and you wish
 
to request
that future deliveries be limited to a single copy, please notify your broker.
 
You can also request prompt delivery of a
copy of
 
the proxy
 
materials by
 
contacting
 
AST by
 
phone at
 
(888) 776-9962,
 
by email
 
at info@astfinancial.com
 
or
through their website at https://us.astfinancial.com/OnlineProxyVoting/ProxyVoting/RequestMaterials.
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