UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Rule 14a-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant |
Filed by a Party other than the Registrant |
|
Check the appropriate box:
|
Preliminary Proxy Statement |
|
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
|
Definitive Proxy Statement |
|
Definitive Additional Materials |
|
Soliciting Material under §240.14a-12 |
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other Than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
|
No fee required. |
|
Fee paid previously with preliminary materials. |
|
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 |
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS AND PROXY STATEMENT
Dear Stockholder:
The annual meeting of stockholders of Evoke Pharma, Inc. will be held by means of remote communication via a live webcast accessible at www.proxydocs.com/EVOK on May 10, 2023 at 8:30 a.m., Pacific Time. The annual meeting will be held exclusively online and you must register in advance as described below.
The annual meeting is being held for the following purposes:
As noted above, our annual meeting will be a virtual meeting of stockholders, which will be conducted solely by remote communication via a live webcast. There will not be a physical meeting location, and stockholders will not be able to attend the annual meeting in person. This means that you can attend the annual meeting online, vote your shares during the online meeting and submit questions for consideration prior to the online meeting. To be admitted to the annual meeting's live webcast, you must register at www.proxydocs.com/EVOK by 2:00 p.m. Pacific Time on May 8, 2023, or the Registration Deadline, as described in the Notice of Internet Availability of Proxy Materials or proxy card. As part of the registration process, you must enter the Control Number shown on your proxy card. After completion of your registration by the Registration Deadline, further instructions, including a unique link to access the annual meeting, will be emailed to you.
The foregoing items of business are more fully described in the attached proxy statement, which forms a part of this notice and is incorporated herein by reference. Our board of directors has fixed the close of business on March 13, 2023 as the record date for the determination of stockholders entitled to notice of and to vote at the annual meeting or any adjournment or postponement thereof.
Accompanying this notice is a proxy card. Whether or not you expect to attend our virtual annual meeting, please complete, sign and date the enclosed proxy card and return it promptly, or complete and submit your proxy via phone or the internet in accordance with the instructions provided on the enclosed proxy card. If you plan to attend our annual meeting and wish to vote your shares personally, you may do so at any time before the proxy is voted.
All stockholders are cordially invited to attend the meeting.
|
By Order of the Board of Directors, |
|
David A. Gonyer, R.Ph. Chief Executive Officer and Director |
Solana Beach, California
March 29, 2023
Your vote is important. Please vote your shares whether or not you plan to attend the meeting.
TABLE OF CONTENTS
i
PROXY STATEMENT FOR THE 2023 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 10, 2023
The board of directors of Evoke Pharma, Inc. is soliciting the enclosed proxy for use at the annual meeting of stockholders to be held by means of remote communication via a live webcast on May 10, 2023 at 8:30 a.m., Pacific Time. You will be able to participate in the annual meeting online and submit your questions in advance of the meeting.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on May 10, 2023.
This proxy statement and our annual report are available electronically at http://www.proxydocs.com/EVOK.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
Why did you send me this proxy statement?
We sent you this proxy statement and the enclosed proxy card because our board of directors is soliciting your proxy to vote at the 2023 annual meeting of stockholders. This proxy statement summarizes information related to your vote at the annual meeting. All stockholders who find it convenient to do so are cordially invited to attend the annual meeting via live webcast. However, you do not need to attend the meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card.
We intend to begin mailing this proxy statement, the attached notice of annual meeting and the enclosed proxy card on or about March 31, 2023, to all stockholders of record entitled to vote at the annual meeting. Only stockholders who owned our common stock on March 13, 2023 are entitled to vote at the annual meeting. On this record date, there were 3,343,070 shares of our common stock outstanding. Common stock is our only class of stock entitled to vote.
How can I attend the annual meeting?
This year’s annual meeting will be accessible through the Internet via a live webcast.
You are entitled to participate in the annual meeting if you were a stockholder as of the close of business on our record date of March 13, 2023 or hold a valid proxy for the meeting. To be admitted to the annual meeting’s live webcast, you must register at www.proxydocs.com/EVOK by 2:00 p.m. Pacific Time on May 8, 2023, or the Registration Deadline, as described in the Notice of Internet Availability of Proxy Materials or proxy card. As part of the registration process, you must enter the Control Number shown on your Notice of Internet Availability of Proxy Materials or proxy card. After completion of your registration by the Registration Deadline, further instructions, including a unique link to access the annual meeting, will be emailed to you.
This year’s stockholder question and answer session will include questions submitted in advance of the annual meeting. You may submit a question in advance of the meeting as a part of the registration process. Questions pertinent to meeting matters and that are submitted in accordance with our Rules of Conduct for the annual meeting will be answered during the meeting, subject to applicable time constraints. Questions and answers may be grouped by topic and substantially similar questions may be grouped and answered once. In order to promote fairness, efficient use of time and in order to ensure all stockholders are responded to, we will respond to up to two questions from a single stockholder.
What am I voting on?
There are seven proposals scheduled for a vote:
Proposal 1: To elect two directors for a three-year term to expire at the 2026 annual meeting of stockholders;
Proposal 2: Ratification of the appointment of BDO USA, LLP as our independent registered public accountants for the year ending December 31, 2023.
1
Proposal 3: To consider and vote upon, on an advisory basis, the compensation of our named executive officers as disclosed in this proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission, or SEC.
Proposal 4: To consider and vote upon the approval of the amendment and restatement of our 2013 Equity Incentive Award Plan.
Proposal 5: To consider and vote upon the approval of the amendment and restatement of our 2013 Employee Stock Purchase Plan.
Proposal 6: To consider and vote upon the approval of an amendment to the Company's Amended and Restated Certificate of Incorporation to increase the authorized number of shares of common stock from 50,000,000 to 100,000,000.
Proposal 7: To consider and vote upon the approval of an amendment to the Company’s Amended and Restated Certificate of Incorporation to update the exculpation provision to include certain officers of the Company as permitted by a recent amendment to Delaware law.
How many votes do I have?
Each share of our common stock that you own as of March 13, 2023 entitles you to one vote.
How do I vote by proxy?
With respect to Proposal 1 for the election of directors, you may either vote “For” all of the nominees to the board of directors or you may “Withhold” your vote for any nominee you specify. With respect to all other proposals scheduled for a vote at the annual meeting (Proposals 2, 3, 4, 5, 6, and 7), you may vote “For” or “Against” or abstain from voting.
Stockholders of Record: Shares Registered in Your Name
If you are a stockholder of record, there are several ways for you to vote your shares. Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure that your vote is counted.
For those stockholders with Internet access, we encourage you to vote by proxy via the Internet, since it is quick, convenient and provides a cost savings to us. When you vote by proxy via the Internet or by telephone prior to the annual meeting date, your vote is recorded immediately and there is no risk that postal delays will cause your vote to arrive late and, therefore, not be counted.
Beneficial Owners: Shares Registered in the Name of a Broker or Bank
If you are a beneficial owner of shares registered in the name of your broker, bank or other nominee, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than directly from us. Simply complete and mail the proxy card to ensure that your vote is counted. You may be eligible to vote your shares
2
electronically over the Internet or by telephone. A large number of banks and brokerage firms offer Internet and telephone voting. If your bank or brokerage firm does not offer Internet or telephone voting information, please complete and return your proxy card in the self-addressed, postage-paid envelope provided. To vote at the annual meeting, you must obtain a valid proxy from your broker, bank or other nominee. Follow the instructions from your broker, bank, or other nominee included with these proxy materials, or contact your broker, bank, or other nominee to request a proxy form.
May I revoke my proxy?
If you give us your proxy, you may revoke it at any time before it is exercised. You may revoke your proxy in any one of the following ways:
What constitutes a quorum?
The presence at the annual meeting, by virtual attendance or by proxy, of holders representing a majority of our outstanding common stock as of March 13, 2023, or 1,671,536 shares, constitutes a quorum at the meeting, permitting us to conduct our business.
What vote is required to approve each proposal?
Proposal 1: Election of Directors. The two nominees who receive the most “For” votes (among votes properly cast at the annual meeting or by proxy) will be elected. Only votes “For” will affect the outcome.
Proposal 2: Ratification of Independent Registered Public Accounting Firm. The ratification of the appointment of BDO USA, LLP must receive “For” votes from the holders of a majority of the shares of common stock present or represented by proxy and entitled to vote at the annual meeting.
Proposal 3: Approval of the Compensation of the Named Executive Officers. The approval, on an advisory basis, of the compensation of the named executive officers must receive “For” votes from the holders of a majority of the shares of common stock present in person or represented by proxy and entitled to vote at the annual meeting.
Proposal 4: Approval of the Amendment and Restatement of our 2013 Equity Incentive Award Plan. The approval of the amendment and restatement of our 2013 Equity Incentive Award Plan must receive “For” votes from the holders of a majority of the shares of common stock present or represented by proxy and entitled to vote at the annual meeting.
Proposal 5: Approval of the Amendment and Restatement of our 2013 Employee Stock Purchase Plan. The approval of the amendment and restatement of our 2013 Employee Stock Purchase Plan must receive “For” votes from the holders of a majority of the shares of common stock present or represented by proxy and entitled to vote at the annual meeting.
Proposal 6: Approval of An Amendment to the Company's Amended and Restated Certificate of Incorporation to Increase the Authorized Number of Shares of Common Stock from 50,000,000 to 100,000,000. The approval of the proposal must receive “For” votes from the holders of a majority of the outstanding shares of common stock.
Proposal 7: Approval of an Amendment to the Company’s Amended and Restated Certificate of Incorporation to Update the Exculpation Provision to Include Certain Officers of the Company as Permitted by a Recent Amendment to Delaware Law. The approval of the proposal must receive “For” votes from the holders of a majority of the outstanding shares of common stock.
Voting results will be tabulated and certified by Mediant Communications LLC ("Mediant").
What is the effect of abstentions?
Shares of common stock held by persons attending the annual meeting but not voting, and shares represented by proxies that reflect abstentions as to a particular proposal, will be counted as present for purposes of determining the presence of a quorum. Because Proposal 1, the election of directors, is determined by a plurality of votes cast, abstentions will not be counted in determining the outcome of such proposal. For all other proposals scheduled for a vote at the annual meeting (Proposals 2, 3, 4, 5, 6, and 7), abstaining has the same effect as a negative vote because abstentions are treated as shares present at the meeting or by proxy and entitled to vote.
What is the effect of broker non-votes?
A “broker non-vote” occurs when a bank, broker or other nominee holding shares for a beneficial owner has not received instructions from the beneficial owner and either chooses not to vote those shares on a routine matter or is not permitted to
3
exercise discretionary voting authority on a non-routine matter. Shares represented by proxies that reflect a “broker non-vote” will be counted for purposes of determining whether a quorum exists.
The following proposals are considered routine matters on which a broker, bank or other nominee has discretionary authority to vote:
· Proposal 2 for the ratification of the appointment of BDO USA, LLP; and
· Proposal 6 for the approval of the amendment to our Amended and Restated Certificate of Incorporation to increase the authorized number of shares of common stock from 50,000,000 to 100,000,000.
No broker non-votes are expected on these proposals. However, if there are any broker non-votes for Proposal 2, the ratification of appointment of BDO USA, LLP, such broker non-votes will have no effect on the result of the vote. Any broker non-votes for Proposal 6, the proposal to approve an amendment to our Amended and Restated Certificate of Incorporation increase the authorized number of shares of common stock, will have the same effect as a negative vote.
All other proposals scheduled for a vote at the annual meeting (Proposals 1, 3, 4, 5 and 7) are considered non-routine, and accordingly, your broker, bank or other nominee may not exercise discretionary voting authority on those proposals. As a result, if you hold your shares with a broker, bank or other nominee and you do not provide timely voting instructions for the non-routine proposals, your shares will not be voted on those proposals at the annual meeting and will be considered “broker non-votes” on those proposals.
Broker non-votes will have no effect on the outcome of:
· Proposal 1, for the election of directors, Proposal 3, the approval, on an advisory basis, of the compensation of our named executive officers;
Broker non-votes on Proposal 7, the approval of an amendment to our Amended and Restated Certification of Incorporation to update the exculpation provision to include certain officers of the Company as permitted by a recent amendment to Delaware law, will have the same effect as a negative vote.
If you have any questions about the proxy voting process, please contact the broker, bank or other nominee that holds your shares.
How are proxies being solicited?
In addition to mailing proxy solicitation materials, our directors, employees or our advisor may also solicit proxies at the annual meeting via live webcast, via the Internet, by telephone or by other electronic means of communication we deem appropriate. Additionally, we have retained Mediant, a proxy solicitation firm, to assist us in the proxy solicitation process.
Who is paying the costs of soliciting these proxies?
We will pay all of the costs of soliciting these proxies. Our directors, officers and other employees may solicit proxies in person or by telephone, fax or email. We will not pay our directors, officers or other employees any additional compensation for these services. We will ask banks, brokers and other institutions, nominees and fiduciaries to forward these proxy materials to their principals and to obtain authority to execute proxies. We will then reimburse them for their expenses. Our costs for soliciting proxies will be approximately $25,000, plus Mediant’s out-of-pocket expenses.
How do I obtain an Annual Report on Form 10-K?
If you would like a copy of our annual report on Form 10-K for the fiscal year ended December 31, 2022 that we filed with the SEC, we will send you one without charge. Please write to:
Evoke Pharma, Inc.
420 Stevens Avenue, Suite 370
Solana Beach, CA 92075
Attn: Corporate Secretary
All of our SEC filings are also available free of charge in the investor relations section of our website at www.evokepharma.com.
How can I find out the results of the voting at the annual meeting?
Preliminary voting results will be announced at the annual meeting. Final voting results will be published in our current report on Form 8-K to be filed with the SEC within four business days after the annual meeting. If final voting results are not available to us in time to file a Form 8-K within four business days after the meeting, we intend to file a Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional Form 8-K to publish the final results.
4
PROPOSAL 1
ELECTION OF DIRECTORS
Our board of directors is divided into three classes, with one class of our directors standing for election each year, generally for a three-year term. The current term of the company’s Class I directors, Kenneth J. Widder, M.D., and David A. Gonyer, R.Ph., will expire at the 2023 annual meeting.
The nominees for Class I director for election at the 2023 annual meeting are Kenneth J. Widder, M.D., and David A. Gonyer, R.Ph. If Dr. Widder and Mr. Gonyer are elected at the 2023 annual meeting, such individuals will be elected to serve for a term of three years that will expire at our 2026 annual meeting of stockholders and until such individual’s successor is elected and qualified.
If no contrary indication is made, proxies in the accompanying form will be voted for the nominees, or in the event that any nominee is not a candidate or is unable to serve as a director at the time of the election (which is not currently expected), for any nominee who is designated by our board of directors to fill the vacancy. Dr. Widder and Mr. Gonyer are currently members of our board of directors.
All of our directors bring to the board of directors significant leadership experience derived from their professional experience and service as executives or board members of other corporations and/or venture capital firms. The process undertaken by the nominating and corporate governance committee in recommending qualified director candidates is described below under “Director Nominations Process.” Certain individual qualifications and skills of our directors that contribute to the board of directors’ effectiveness as a whole are described in the following paragraphs.
Information Regarding Directors
The information set forth below as to the directors and nominees for director has been furnished to us by the directors and nominees for director:
Nominees for Election to the Board of Directors
For a Three-Year Term Expiring at the
2026 Annual Meeting of Stockholders (Class I)
|
|
|
|
|
|
|
Name |
|
Age |
|
|
Present Position with Evoke Pharma, Inc. |
|
Kenneth J. Widder, M.D. |
|
|
70 |
|
|
Director |
David A. Gonyer, R.Ph. |
|
|
59 |
|
|
Chief Executive Officer and Director |
Kenneth J. Widder, M.D. has served as a member of our board of directors since June 2007. Dr. Widder has over 40 years of experience working with biomedical companies. Dr. Widder was a General Partner with Latterell Venture Partners and serves on the boards of QuidelOrtho Corporation, OrphoMed Inc, Sydnexis Inc, and the Vision of Children Foundation. Dr. Widder has founded seven companies and was Chairman and Chief Executive Officer of five of these companies. His last company, Sytera Inc., merged with Sirion Therapeutics, an ophthalmology specialty pharmaceutical company. Prior to Sytera, Dr. Widder co-founded and was the initial Chief Executive Officer of NovaCardia, Inc., a company acquired by Merck & Co., Inc. Prior to NovaCardia, Dr. Widder founded and was Chairman and Chief Executive Officer of Santarus, Inc., which was acquired by Salix Pharmaceuticals in 2013. Additionally, Dr. Widder was Chairman and Chief Executive Officer of Converge Medical, Inc., a medical device company developing a suture-less anastomosis system for vein grafts in coronary bypass surgery. Dr. Widder started his career as a founder, Chairman and Chief Executive Officer of Molecular Biosystems, where he was responsible for the development and approval of AlbunexR and OptisonR, the first two ultrasound contrast agents to be approved in the United States. Dr. Widder is an inventor on over 50 patents and patent applications and has authored or co-authored over 25 publications. Dr. Widder holds an M.D. from Northwestern University and trained in pathology at Duke University. Dr. Widder’s extensive knowledge of our business and history, experience as a board member of multiple publicly-traded and privately-held companies and expertise in developing and financing contributed to our board of directors’ conclusion that he should serve as a director of our company.
David A. Gonyer, R.Ph., is one of our co-founders and has served as our Chief Executive Officer and as a member of our board of directors since March 2007. From 2004 to 2007, Mr. Gonyer served as Vice President, Strategic and Product Development of Medgenex, Inc., a subsidiary of Victory Pharma, Inc., a biopharmaceutical company focused on acquiring, developing and marketing products to treat pain and related conditions. From 2000 to 2004, Mr. Gonyer was a founder and Vice President of Sales and Marketing at Xcel Pharmaceuticals, Inc., a specialty pharmaceutical company focused on neurological disorders. From 1996 to 2000, Mr. Gonyer served as Director of Marketing at Elan/Dura Pharmaceuticals, Inc. From 1987 to 1996, Mr. Gonyer held a broad range of management positions in commercial operations, alliance/partnership management, and regional sales at Eli Lilly & Company. Mr. Gonyer served as a member of the board of directors of Signal Genetics, Inc., a publicly-traded, commercial stage, molecular diagnostic company focused on providing innovative diagnostic services prior to its merger with miRagen Therapeutics in 2017 and Neurelis, Inc., a privately held neurological specialty pharmaceutical company. Mr. Gonyer is a Registered Pharmacist and holds a B.Sc. in Pharmacy from Ferris State University School of Pharmacy. As one of our co-founders and having served as our Chief Executive Officer since March 2007, Mr. Gonyer’s extensive knowledge of our business, as well as 36 years of experience in the pharmaceutical industry, including executive leadership in several pharmaceutical companies, contributed to our board of directors’ conclusion that he should serve as a director of our company
5
Members of the Board of Directors Continuing in Office
Term Expiring at the
2024 Annual Meeting of Stockholders (Class II)
Name |
|
|
Age |
|
|
Present Position with Evoke Pharma, Inc. |
|
Cam L. Garner |
|
|
74 |
|
|
|
Chairman of the Board of Directors |
Todd C. Brady, M.D., Ph.D. |
|
|
51 |
|
|
|
Director |
Cam L. Garner is one of our co-founders and has served as Chairman of our board of directors since June 2007. Mr. Garner has co-founded specialty pharmaceutical companies Zogenix, Inc., Cadence Pharmaceuticals, Inc., Somaxon Pharmaceuticals, Inc., Elevation Pharmaceuticals, Inc., DJ Pharma, Verus Pharmaceuticals, Inc., Xcel Pharmaceuticals, Inc., Meritage Pharma, Inc., Oncternal Therapeutics, Inc., Kalyra Pharmaceuticals, Inc., OrPro Therapeutics, Inc., Alastin Skincare, Inc. and Zavante Therapeutics, Inc. He currently serves as Chairman of Zogenix and OrPro. Mr. Garner served as Chairman of Xcel Pharmaceuticals until it was acquired in March 2005 by Valeant Pharmaceuticals International, DJ Pharma until it was sold to Biovail in 2000, Elevation Pharmaceuticals until it was acquired by Sunovion Pharmaceuticals Inc. in September 2012, Cadence Pharmaceuticals until it was acquired by Mallinckrodt plc in March 2014, Meritage Pharma until it was acquired by Shire plc in February 2015, Zavante Inc. until it was acquired by Nabriva in July 2018 and Alastin until it was acquired by Galderma in November 2021. He also served as a director of Aegis Therapeutics until it was acquired by Neurelis, Inc. in December 2018. Mr. Garner was Chief Executive Officer of Dura Pharmaceuticals, Inc. from 1989 to 1995 and its Chairman and Chief Executive Officer from 1995 until it was sold to Elan in November 2000. Mr. Garner earned his B.A. in Biology from Virginia Wesleyan College and an M.B.A. from Baldwin-Wallace College. As one of our co-founders and having served as our Chairman since June 2007, Mr. Garner’s extensive knowledge of our business and history, experience as a board member of multiple publicly-traded and privately-held companies, and expertise in developing, financing and providing strong executive leadership to numerous biopharmaceutical companies contributed to our board of directors’ conclusion that he should serve as a director of our company.
Todd C. Brady, M.D., Ph.D., has served as a member of our board of directors since June 2007. Dr. Brady currently serves as Chief Executive Officer, President, and Director of Aldeyra Therapeutics, Inc., a publicly-traded biotechnology company. Dr. Brady was appointed President and Chief Executive Officer of Aldeyra Therapeutics in 2012, having been a member of the board of directors since 2005. Prior to Aldeyra, Dr. Brady served as Entrepreneur in Residence at Domain Associates, LLC, a leading healthcare venture capital firm, where he was a Principal from 2004 to 2013. Dr. Brady also serves on the board of directors of F-star Therapeutics, Inc., a publicly-traded biotechnology company. Dr. Brady holds an M.D. from Duke University Medical School, a Ph.D. from Duke University Graduate School, and an A.B. from Dartmouth College. Dr. Brady’s extensive knowledge of our business and history, experience as a board member of multiple companies, and expertise in strategic development contributed to our board of directors’ conclusion that he should serve as a director of our company.
Term Expiring at the
2025 Annual Meeting of the Stockholders (Class III)
|
|
|
|
|
|
|
Name |
|
Age |
|
|
Present Position with Evoke Pharma, Inc. |
|
Malcolm R. Hill, Pharn.D. |
|
|
66 |
|
|
Director |
Vickie W. Reed |
|
|
61 |
|
|
Director |
Malcolm R. Hill, Pharm.D. has served as a member of our board of directors since June 2007. Dr. Hill has more than 30 years of academic and pharmaceutical industry experience in new product assessment and clinical trial design and execution, with a special emphasis in gastroenterology, respiratory medicine, and drug delivery systems. Since September 2020, Dr. Hill has served as Chief Development Officer at Mopac Biologics, a company specializing in development of computationally derived proteins for the treatment of inflammatory conditions of the gastrointestinal system. From June 2016 to March 2020, Dr. Hill served as the Chief Development Officer at PvP Biologics, a biotechnology company which was acquired by Takeda. Prior to joining PvP Biologics, Dr. Hill was Chief Scientific Officer at Meritage Pharma from 2008 through February 2015 focusing on novel treatments for eosinophilic esophagitis, when it was acquired by Shire. Prior to joining Meritage, Dr. Hill was Senior Vice President of Research and Development at Verus Pharmaceuticals, Inc. where he was responsible for various development-stage programs. Dr. Hill was a member of the senior management team at Dura Pharmaceuticals, Inc., where he served as a vice president and corporate officer. Dr. Hill was a Partner at ProPharmaCon, LLC, a product development and regulatory consulting company for clients with pharmaceutical products in every stage of the development cycle. Dr. Hill’s academic career includes his position at the National Jewish Medical and Research Center, and he has also served as an assistant professor in the Schools of Medicine and Pharmacy at the University of Colorado. Dr. Hill has published more than 80 articles on the topics of clinical pharmacology and pharmacokinetics and the treatment of pediatric asthma and related conditions. Dr. Hill earned his Pharm.D. from the University of Southern California and completed a post-doctoral program at the Veterans Administration Medical Center, San Diego, as well as a research fellowship in the Schools of Medicine and Pharmacy at the University of Florida Health Sciences Center. Dr. Hill’s experience as a founder of a private pharmaceutical firms, strong background in clinical and product
6
development and substantial knowledge of the pharmaceutical industry contributed to our board of directors’ conclusion that he should serve as a director of our company.
Vickie W. Reed was appointed to serve as a member of our board of directors in May 2021. Ms. Reed is a healthcare executive with over 25 years of experience in operating and governance roles. Since May 2022, Ms. Reed has served on the board at Adamis Pharmaceuticals Corporation, a publicly-traded biotechnology company. Previously, she served as Senior Vice President, Finance and Chief Accounting Officer at Mirati Therapeutics, and Senior Director, Finance and Controller at Zogenix, Inc., a public biotechnology company in San Diego and Emeryville, California, and held corporate accounting positions at Amylin Pharmaceuticals, Inc., a public biotechnology company acquired by Bristol Myers Squibb in 2012. Prior to joining Amylin, Ms. Reed held financial leadership roles at several biotechnology and telecommunications companies. Ms. Reed began her career with Price Waterhouse, now PricewaterhouseCoopers, in Denver, Colorado. She is a Certified Public Accountant (inactive) in the State of Colorado and received a B.S. in Accounting from University of Colorado, Denver. Ms. Reed’s experience as the chief accounting officer of a publicly-traded biotech company brings to our board of directors and the committees of our board of directors valuable financial skills and expertise, which qualify her to serve as an “audit committee financial expert” on the audit committee, and significant executive management experience and leadership skills, as well as a strong understanding of corporate governance principles, all of which contributed to our board of directors’ conclusion that she should serve as a director of our company.
Board Independence
Our board of directors has determined that all of our directors are independent directors within the meaning of the applicable Nasdaq Stock Market LLC, or Nasdaq, listing standards, except for David A. Gonyer, R.Ph., our Chief Executive Officer.
Board Leadership Structure
Our board of directors is currently led by its chairman, Cam L. Garner. Our board of directors recognizes that it is important to determine an optimal board leadership structure to ensure the independent oversight of management as the company continues to grow. We separate the roles of chief executive officer and chairman of the board in recognition of the differences between the two roles. The chief executive officer is responsible for setting the strategic direction for the company and the day-to-day leadership and performance of the company, while the chairman of the board of directors provides guidance to the chief executive officer and presides over meetings of the full board of directors. We believe that this separation of responsibilities provides a balanced approach to managing the board of directors and overseeing the company.
The Board’s Role in Risk Oversight
Our board of directors has responsibility for the oversight of the company’s risk management processes and, either as a whole or through its committees, regularly discusses with management our major risk exposures, their potential impact on our business and the steps we take to manage them. The risk oversight process includes receiving regular reports from board committees and members of senior management to enable our board to understand the company’s risk identification, risk management and risk mitigation strategies with respect to areas of potential material risk, including operations, finance, legal, regulatory, strategic and reputational risk.
The audit committee reviews information regarding liquidity and operations, and oversees our management of financial risks. Periodically, the audit committee reviews our policies with respect to risk assessment, risk management, loss prevention and regulatory compliance. Oversight by the audit committee includes direct communication with our external auditors, and discussions with management regarding significant risk exposures and the actions management has taken to limit, monitor or control such exposures. The compensation committee is responsible for assessing whether any of our compensation policies or programs has the potential to encourage excessive risk-taking. The nominating and corporate governance committee manages risks associated with the independence of the board, corporate disclosure practices, and potential conflicts of interest. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire board is regularly informed through committee reports about such risks. Matters of significant strategic risk are considered by our board as a whole.
Board of Directors Meetings
During 2022, our board of directors met five times. In that year, each director attended at least 75% of the total number of meetings held during such director’s term of service by the board of directors and each committee of the board of directors on which such director served.
Committees of the Board of Directors
We have three standing committees: the audit committee, the compensation committee and the nominating and corporate governance committee. Each of these committees has a written charter approved by our board of directors. A copy of each charter can be found under the Corporate Governance section of our website at www.evokepharma.com.
7
Audit Committee
The audit committee’s main function is to oversee our accounting and financial reporting processes, internal systems of control, independent registered public accounting firm relationships and the audits of our financial statements. This committee’s responsibilities include, among other things:
The members of our audit committee are Ms. Reed, Dr. Brady and Dr. Widder. Ms. Reed serves as the chairperson of the committee. All members of our audit committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and the Nasdaq Capital Market. Our board of directors has determined that Ms. Reed is an “audit committee financial expert” as defined by applicable SEC rules and has the requisite financial sophistication as defined under the applicable Nasdaq rules and regulations. Our board of directors has determined each of Ms. Reed, Dr. Brady and Dr. Widder is independent under the applicable rules of the SEC and the Nasdaq Capital Market. The audit committee met four times during 2022. The audit committee is governed by a written charter that satisfies the applicable standards of the SEC and the Nasdaq Capital Market.
Compensation Committee
Our compensation committee reviews and recommends policies relating to compensation and benefits of our officers and employees. The compensation committee reviews and recommends corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers, evaluates the performance of these officers in light of those goals and objectives and recommends to our board of directors the compensation of these officers based on such evaluations. The compensation committee also recommends to our board of directors the issuance of stock options and other awards under our equity plan. The compensation committee reviews and evaluates, at least annually, the performance of the compensation committee and its members, including compliance by the compensation committee with its charter.
The members of our compensation committee are Mr. Garner, Dr. Brady and Dr. Hill. Mr. Garner serves as the chairman of the committee. Our Board has determined that each of Mr. Garner, Dr. Brady and Dr. Hill is independent under the applicable rules and regulations of the Nasdaq Capital Market, and is a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. The compensation committee met three times during 2022. The compensation committee is governed by a written charter, which the compensation committee reviews and evaluates at least annually.
Nominating and Corporate Governance Committee
The nominating and corporate governance committee is responsible for making recommendations to our board of directors regarding candidates for directorships and the size and composition of our board of directors. In addition, the nominating and corporate governance committee is responsible for overseeing our corporate governance policies, reporting and making recommendations to our board of directors concerning governance matters and periodically reviewing and evaluating the performance of the Board.
The members of our nominating and corporate governance committee are Drs. Hill and Widder. Dr. Hill serves as the chairman of the committee. Our board has determined that Drs. Hill and Widder are independent under the applicable rules and regulations of the Nasdaq Capital Market relating to nominating and corporate governance committee independence. The nominating and corporate governance committee did not meet during 2022.
8
Report of the Audit Committee of the Board of Directors
The audit committee oversees the company’s financial reporting process on behalf of our board of directors. Management has the primary responsibility for the financial statements, for maintaining effective internal control over financial reporting, and for assessing the effectiveness of internal control over financial reporting. In fulfilling its oversight responsibilities, the audit committee reviewed and discussed the audited financial statements in the company’s annual report with management, including a discussion of any significant changes in the selection or application of accounting principles, the reasonableness of significant judgments, the clarity of disclosures in the financial statements and the effect of any new accounting policies.
We have reviewed and discussed with BDO USA, LLP our audited financial statements. We discussed with BDO USA, LLP the overall scope and plans of their audits. We met with BDO USA, LLP, with and without management present, to discuss results of its examinations, and the overall quality of the company’s financial reporting.
We have reviewed and discussed with BDO USA, LLP matters required to be discussed pursuant to the Public Company Accounting Oversight Board Auditing Standard 1301 “Communications with Audit Committees.” We have received from BDO USA, LLP the written disclosures and letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding BDO USA, LLP’s communications with the audit committee concerning independence. We have discussed with BDO USA, LLP matters relating to its independence, including a review of both audit and non-audit fees, and considered the compatibility of non-audit services with BDO USA, LLP’s independence. The audit committee is not employed by the company, nor does it provide any expert assurance or professional certification regarding the company’s financial statements. The audit committee relies, without independent verification, on the accuracy and integrity of the information provided and representations made by management and the company’s independent registered public accounting firm.
In reliance on the reviews and discussions referred to above, the audit committee has recommended to the company’s board of directors that the audited financial statements be included in our annual report for the year ended December 31, 2022. The audit committee and the company’s board of directors also have recommended, subject to stockholder approval, the ratification of the appointment of BDO USA, LLP as the company’s independent registered public accounting firm for 2023.
This report of the audit committee is not “soliciting material,” shall not be deemed “filed” with the SEC and shall not be incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under such acts.
The foregoing report has been furnished by the audit committee.
Respectfully submitted,
The Audit Committee of the Board of Directors
Vickie W. Reed (Chairperson)
Todd C. Brady, M.D., Ph.D.
Kenneth J. Widder, M.D.
Compensation Committee Interlocks and Insider Participation
Mr. Garner, Dr. Brady and Dr. Hill served on our compensation committee during 2022. None of the members of our compensation committee has ever been one of our officers or employees. None of our executive officers currently serves, or has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our board of directors or compensation committee.
Director Nomination Process
Director Qualifications
In evaluating director nominees, the nominating and corporate governance committee will consider, among other things, the following factors:
9
The nominating and corporate governance committee’s goal is to assemble a board of directors that brings to the company a variety of perspectives and skills derived from high quality business and professional experience. Moreover, the nominating and corporate governance committee believes that the background and qualifications of the board of directors, considered as a group, should provide a significant mix of experience, knowledge and abilities that will allow the board of directors to fulfill its responsibilities. Nominees are not discriminated against on the basis of race, religion, national origin, sexual orientation, disability or any other basis proscribed by law.
Other than the foregoing criteria for director nominees, the nominating and corporate governance committee has not adopted a formal policy with respect to a fixed set of specific minimum qualifications for its candidates for membership on the board of directors. The nominating and corporate governance committee may consider such other facts, including, without limitation, diversity, as it may deem are in the best interests of the company and its stockholders. The nominating and corporate governance committee does, however, believe it is appropriate for at least one, and, preferably, several, members of our board of directors to meet the criteria for an “audit committee financial expert” as defined by SEC rules, and that a majority of the members of our board of directors be independent as required under the Nasdaq qualification standards. The nominating and corporate governance committee also believes it is appropriate for our Chief Executive Officer to serve as a member of our board of directors. Our directors’ performance and qualification criteria are reviewed annually by the nominating and corporate governance committee.
Identification and Evaluation of Nominees for Directors
The nominating and corporate governance committee identifies nominees for director by first evaluating the current members of our board of directors willing to continue in service. Current members with qualifications and skills that are consistent with the nominating and corporate governance committee’s criteria for board of directors service and who are willing to continue in service are considered for re-nomination, balancing the value of continuity of service by existing members of our board of directors with that of obtaining a new perspective or expertise.
If any member of our board of directors does not wish to continue in service or if our board of directors decides not to re-nominate a member for re-election, the nominating and corporate governance committee may identify the desired skills and experience of a new nominee in light of the criteria above, in which case, the nominating and corporate governance committee would generally poll our board of directors and members of management for their recommendations. The nominating and corporate governance committee may also review the composition and qualification of the boards of directors of our competitors, and may seek input from industry experts or analysts. The nominating and corporate governance committee reviews the qualifications, experience and background of the candidates. Final candidates are interviewed by the members of the nominating and corporate governance committee and by certain of our other independent directors and executive management. In making its determinations, the nominating and corporate governance committee evaluates each individual in the context of our board of directors as a whole, with the objective of assembling a group that can best contribute to the success of our company and represent stockholder interests through the exercise of sound judgment. After review and deliberation of all feedback and data, the nominating and corporate governance committee makes its recommendation to our board of directors. To date, the nominating and corporate governance committee has not utilized third-party search firms to identify director candidates. The nominating and corporate governance committee may in the future choose to do so in those situations where particular qualifications are required or where existing contacts are not sufficient to identify an appropriate candidate.
The nominating and corporate governance committee evaluates nominees recommended by stockholders in the same manner as it evaluates other nominees. We have not received director candidate recommendations from our stockholders and do not have a formal policy regarding consideration of such recommendations. However, any recommendations received from stockholders will be evaluated in the same manner that potential nominees suggested by board members, management or other parties are evaluated. We do not intend to treat stockholder recommendations in any manner different from other recommendations.
Under our amended and restated bylaws, stockholders wishing to suggest a candidate for director should write to our corporate secretary and provide such information about the stockholder and the proposed candidate as is set forth in our amended and restated bylaws and as would be required by SEC rules to be included in a proxy statement. In addition, the stockholder must include the consent of the candidate and describe any arrangements or undertakings between the stockholder and the candidate regarding the nomination. In order to give the nominating and corporate governance committee sufficient time to evaluate a recommended candidate and/or include the candidate in our proxy statement for the 2023 annual meeting, the recommendation should be received by our corporate secretary at our principal executive offices in accordance with our procedures detailed in the section below entitled “Stockholder Proposals.”
Director Attendance at Annual Meetings
Although our company does not have a formal policy regarding attendance by members of our board of directors at our annual meeting, we encourage all of our directors to attend. All of the board members attended the 2022 annual meeting of stockholders.
10
Communications with our Board of Directors
Stockholders seeking to communicate with our board of directors should submit their written comments to our corporate secretary at Evoke Pharma, Inc., 420 Stevens Avenue, Suite 370, Solana Beach, California 92075. The corporate secretary will forward such communications to each member of our board of directors; provided that, if in the opinion of our corporate secretary it would be inappropriate to send a particular stockholder communication to a specific director, such communication will only be sent to the remaining directors (subject to the remaining directors concurring with such opinion).
Corporate Governance
Our company’s Code of Business Conduct and Ethics, Corporate Governance Guidelines, Audit Committee Charter, Compensation Committee Charter and Nominating and Corporate Governance Committee Charter are available, free of charge, on our website at www.evokepharma.com. Please note, however, that the information contained on the website is not incorporated by reference in, or considered part of, this proxy statement. We will also provide copies of these documents, as well as our company’s other corporate governance documents, free of charge, to any stockholder upon written request to Evoke Pharma, Inc., Attention: Corporate Secretary, 420 Stevens Avenue, Suite 370, Solana Beach, California 92075.
Director Compensation
The following table sets forth information for the year ended December 31, 2022 regarding the compensation awarded to, earned by or paid to our non-employee directors who served on our board of directors during 2022. Employees of our company who also serve as a director do not receive additional compensation for their performance of services as a director.
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Director |
|
Fees Earned or Paid in Cash ($) |
|
|
Option |
|
All Other |
|
Total |
|
|||||
Cam Garner |
|
|
73,000 |
|
|
|
34,040 |
|
(2) |
|
— |
|
|
107,040 |
|
Todd C. Brady, M.D., Ph.D. |
|
|
54,750 |
|
|
|
29,123 |
|
(3) |
|
— |
|
|
83,873 |
|
Malcolm R. Hill, Pharm.D. |
|
|
54,500 |
|
|
|
29,123 |
|
(4) |
|
— |
|
|
83,623 |
|
Vickie W. Reed |
|
|
60,000 |
|
|
|
29,249 |
|
(5) |
|
— |
|
|
89,249 |
|
Kenneth J. Widder, M.D. |
|
|
53,500 |
|
|
|
28,241 |
|
(6) |
|
— |
|
|
81,741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
11
The table below shows the aggregate numbers of option awards (exercisable and unexercisable) held as of December 31, 2022 by each non-employee director who was serving as of December 31, 2022.
|
|
|
|
|
|
|
||
Director |
|
Options Exercisable at |
|
|
Options Unexercisable at |
|
||
Cam Garner |
|
|
25,333 |
|
|
|
5,625 |
|
Todd C. Brady, M.D., Ph.D. |
|
|
22,706 |
|
|
|
4,812 |
|
Malcolm R. Hill, Pharm.D. |
|
|
21,333 |
|
|
|
4,812 |
|
Vickie W. Reed |
|
|
1,944 |
|
|
|
8,722 |
|
Kenneth J. Widder, M.D. |
|
|
22,414 |
|
|
|
4,666 |
|
|
|
|
|
|
|
|
||
For the year ended December 31, 2022, each non-employee director received $45,000 for his or her service. Additionally, the chair of our board of directors received an annual cash retainer of $20,000, the chair of the audit committee received an additional annual cash retainer of $15,000, the chair of the compensation committee received an additional annual cash retainer of $8,000, and the chair of the nominating and corporate governance committee received an additional annual cash retainer of $5,500. Audit committee members received an additional cash retainer of $5,750, compensation committee members received an additional annual cash retainer of $4,000 and nominating and corporate governance committee members received an additional annual cash retainer of $2,750.
Each non-employee director who is newly elected or appointed to the board of directors will receive an initial grant of options to purchase 5,833 shares of our common stock, vesting in three equal annual installments on each of the first three anniversaries of the date of grant, upon such election or appointment to the board of directors. In addition, non-employee directors receive annual grants of options on the date of each annual meeting of stockholders as follows: each non-employee director, options to purchase 4,166 shares; chair of our board of directors, an additional grant of options to purchase 833 shares; chair of the audit committee, an additional grant of options to purchase 666 shares; chair of the compensation committee, an additional 625 shares; and chair of the nominating and corporate governance committee, an additional grant of options to purchase 333 shares. Audit committee members received an additional grant of options to purchase 333 shares; members of the compensation committee received an additional grant of 312 shares; and the members of the nominating and corporate governance committee received an additional grant of options to purchase 166. All of the annual grants will vest on the first anniversary of the date of grant.
Effective January 2023, our board of directors amended the compensation program for our non-employee directors. Under the amended program, non-employee directors will receive annual grants of options on the date of each annual meeting of stockholders as follows: each non-employee director, options to purchase 12,000 shares; chair of our board of directors, an additional grant of options to purchase 3,500 shares; chair of the audit committee, an additional grant of options to purchase 3,000 shares; chair of the compensation committee, an additional 2,250 shares; and chair of the nominating and corporate governance committee, an additional grant of options to purchase 1,500 shares. Audit committee members received an additional grant of options to purchase 1,500 shares; members of the compensation committee received an additional grant of 1,125 shares; and the members of the nominating and corporate governance committee received an additional grant of options to purchase 750. All of the annual grants will vest on the first anniversary of the date of grant. The remaining terms of the director compensation program as in effect prior to this amendment remain unchanged.
Vote Required; Recommendation of the Board of Directors
If a quorum is present and voting at the annual meeting, the two nominees receiving the highest number of votes will be elected to our board of directors. Votes withheld from any nominee, abstentions and broker non-votes will be counted only for purposes of determining a quorum. Broker non-votes will have no effect on this proposal as brokers or other nominees are not entitled to vote on such proposals in the absence of voting instructions from the beneficial owner.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE ELECTION OF CAM L. GARNER AND TODD C. BRADY, M.D., PH.D. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS YOU SPECIFY OTHERWISE ON YOUR PROXY CARD.
12
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The audit committee has selected BDO USA, LLP as the company’s independent registered public accountants for the year ending December 31, 2023 and has further directed that management submit the selection of independent registered public accountants for ratification by the stockholders at the annual meeting. BDO USA, LLP has audited the company’s financial statements for the years ended December 31, 2013 through December 31, 2022. Representatives of BDO USA, LLP are expected to be present at the annual meeting, will have an opportunity to make a statement if they so desire, and will be available to respond to appropriate questions.
Stockholder ratification of the selection of BDO USA, LLP as the company’s independent registered public accountants is not required by Delaware law, the company’s amended and restated certificate of incorporation, or the company’s amended and restated bylaws. However, the audit committee is submitting the selection of BDO USA, LLP to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the audit committee will reconsider whether to retain the firm. Even if the selection is ratified, the audit committee in its discretion may direct the appointment of different independent registered public accountants at any time during the year if the audit committee determines that such a change would be in the best interests of the company and its stockholders.
The following table represents aggregate fees billed to us for services related to the years ended December 31, 2022 and 2021, by BDO USA, LLP as our independent registered public accounting firm:
|
|
Fiscal Years Ended |
|||||||
|
|
2022 |
|
|
2021 |
|
|
||
Audit Fees(1) |
|
$ |
351,805 |
|
|
$ |
240,736 |
|
|
Audit Related Fees(2) |
|
$ |
- |
|
|
— |
|
|
|
Tax Fees(3) |
|
— |
|
|
— |
|
|
||
All Other Fees |
|
— |
|
|
— |
|
|
||
|
|
$ |
351,805 |
|
|
$ |
240,736 |
|
|
|
|
|
|
|
|
|
|
||
The audit committee has considered whether the provision of non-audit services is compatible with maintaining the independence of BDO USA, LLP, and has concluded that the provision of such services is compatible with maintaining the independence of our auditors.
Pre-Approval Policies and Procedures
Our audit committee has established a policy that all audit and permissible non-audit services provided by our independent registered public accounting firm will be pre-approved by the audit committee, and all such services were pre-approved in accordance with this policy during the fiscal years ended December 31, 2022 and 2021. These services may include audit services, audit-related services, tax services and other services. The audit committee considers whether the provision of each non-audit service is compatible with maintaining the independence of our auditors. Pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. Our independent registered public accounting firm and management are required to periodically report to the audit committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date.
Vote Required; Recommendation of the Board of Directors
The affirmative vote of a majority of the shares of common stock present or represented by proxy and entitled to vote at the meeting will be required to ratify the selection of BDO USA, LLP. Abstentions will be counted toward the tabulation of votes cast on this proposal and will have the same effect as negative votes. The approval of Proposal 2 is a routine proposal on which a broker or other nominee has discretionary authority to vote. Accordingly, no broker non-votes will likely result from this proposal.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE TO RATIFY THE SELECTION OF BDO USA, LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2023. PROXIES SOLICITED BY OUR BOARD OF
13
DIRECTORS WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY OTHERWISE ON THEIR PROXY CARDS.
PROPOSAL 3
APPROVAL OF THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, our stockholders are entitled to vote at the annual meeting to provide advisory approval of the compensation of our named executive officers as disclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC. Pursuant to the Dodd-Frank Act, the stockholder vote on executive compensation is an advisory vote only, and it is not binding on us or our board of directors.
Although the vote is non-binding, our compensation committee and board of directors value the opinions of the stockholders and will consider the outcome of the vote when making future compensation decisions. We urge stockholders to read the Executive Compensation and Other Information section of this proxy statement, which describes in detail our executive compensation.
Consistent with the preference of our stockholders as reflected in our prior non-binding advisory vote on the frequency of future say-on-pay votes, we will hold a say-on-pay advisory vote each year unless otherwise disclosed.
We are asking our stockholders to indicate their support for our named executive officer compensation as described in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we ask that our stockholders vote “FOR” the following resolution:
“RESOLVED, that Evoke Pharma, Inc.’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in Evoke Pharma, Inc.’s Proxy Statement for the 2022 Annual Meeting of Stockholders, pursuant to the compensation disclosure rules of the SEC, including the Executive Compensation and Other Information, the 2022 Summary Compensation Table and the other related tables and disclosure.”
Vote Required; Recommendation of the Board of Directors
The affirmative vote of a majority of the shares of common stock present or represented by proxy and entitled to vote at the meeting will be required to approve the advisory vote regarding the compensation of the named executive officers. Abstentions will be counted toward the tabulation of votes cast on this proposal and will have the same effect as negative votes. Broker non-votes will have no effect on this proposal as brokers or other nominees are not entitled to vote on such proposals in the absence of voting instructions from the beneficial owner.
OUR BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SEC.
14
PROPOSAL 4
APPROVAL OF AMENDMENT AND RESTATEMENT OF
2013 EQUITY INCENTIVE AWARD PLAN
Introduction
Our stockholders are being asked to approve an amendment and restatement of our 2013 Equity Incentive Award Plan, or the 2013 Plan. The amended and restated 2013 Plan is referred to herein as the “Restated Plan.” Our board of directors approved the Restated Plan on March 20, 2023, subject to stockholder approval. The Restated Plan will become effective upon stockholder approval. If the Restated Plan is not approved by our stockholders, the Restated Plan will not become effective, the existing 2013 Plan will continue in full force and effect, and we may continue to grant awards under the 2013 Plan, subject to its terms, conditions and limitations, using the shares available for issuance thereunder.
Overview of Proposed Amendments
Increase in Share Reserve. We strongly believe that an employee equity compensation program is a necessary and powerful incentive and retention tool that benefits all stockholders. As of March 1, 2023, a total of 794,717 shares of our common stock were reserved under the 2013 Plan, the aggregate number of shares of common stock subject to awards under the 2013 Plan was 569,351 and a total of 202,719 shares of common stock remained available under the 2013 Plan for future issuance. In addition, the 2013 Plan contains an “evergreen provision” that allows for an annual increase in the number of shares available for issuance under the 2013 Plan on January 1 of each year during the ten year term of the 2013 Plan. The annual increase in the number of shares under the 2013 Plan is equal to the least of:
The automatic increases pursuant to the evergreen provision of the 2013 Plan on each of January 1, 2019, 2020, 2021, 2022, and 2023 were 58,091 shares, 81,439 shares, 88,739 shares, 108,854 shares, and 133,722 shares respectively, and these increases are included in the total number of shares reserved for issuance under the 2013 Plan as of January 1, 2023 set forth above. Notwithstanding the foregoing, the number of shares of stock that may be issued or transferred pursuant to incentive stock options, or ISOs under the 2013 Plan may not exceed an aggregate of 666,666 shares.
Pursuant to the Restated Plan, an additional 400,000 shares will be reserved for issuance under the Restated Plan and the evergreen provision will provide that, commencing on January 1, 2024, and on each January 1 thereafter during the ten-year term of the Restated Plan, through and including January 1, 2033, the aggregate number of shares available for issuance under the Restated Plan shall be increased by that number of shares of our common stock equal to the lesser of:
All of the foregoing share numbers may be adjusted for changes in our capitalization and certain corporate transactions, as described below under heading “Adjustments.”
Incentive Stock Option Limit. The number of shares of stock that may be issued or transferred pursuant to incentive stock options, or ISOs, under the Restated Plan may not exceed an aggregate of 50,000,000 shares, which may be adjusted for changes in our capitalization and certain corporate transactions, as described below under the heading “Adjustments.”
Extension of Term. The term of the Restated Plan will also be extended so that the Restated Plan will terminate in March 2033.
The Restated Plan is not being amended in any material respect other than to reflect the changes described above.
Equity Incentive Awards Are Critical to Long-Term Stockholder Value Creation
The table below presents information about the number of shares that were subject to outstanding equity awards under the 2013 Plan and the shares remaining available for issuance under the 2013 Plan, each at March 1, 2023 (except as noted below), and the requested increase in shares authorized for issuance under the Restated Plan. The 2013 Plan and our Employee Stock Purchase Plan are the only equity incentive plans we currently have in place pursuant to which awards may still be granted. For more information about our Employee Stock Purchase Plan, please see Proposal 5.
15
|
|
Number |
|
|
As a % of Shares |
|
|
Dollar |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
2013 Plan |
|
|
|
|
|
|
|
|
|
|||
Options outstanding |
|
|
569,351 |
|
|
|
17.03 |
% |
|
$ |
1,616,957 |
|
Weighted average exercise price of outstanding options |
|
$ |
17.06 |
|
|
|
|
|
|
|
||
Weighted average remaining term of outstanding options |
|
|
7.45 |
|
|
|
|
|
|
|
||
Shares remaining available for grant under 2013 Plan (3) |
|
|
202,719 |
|
|
|
6.06 |
% |
|
$ |
575,722 |
|
|
|
|
|
|
|
|
|
|
|
|||
Restated Plan |
|
|
|
|
|
|
|
|
|
|||
Proposed increase in shares available for issuance under |
|
|
400,000 |
|
|
|
12.00 |
% |
|
|
|
|
(1) Based on 3,343,070 shares of our common stock outstanding as of March 1, 2023.
(2) Based on the closing price of our common stock on March 1, 2023, of $2.84 per share.
(3) Does not include possible future increases to the share reserve under the evergreen provision of the 2013 Plan.
(4) Does not include possible future increases to the share reserve under the evergreen provision of the Restated Plan.
In determining whether to approve the Restated Plan, including the requested increase to the share reserve under the Restated Plan over the share reserve under the existing 2013 Plan, our board of directors considered the following:
In light of the factors described above, and the fact that the ability to continue to grant equity compensation is vital to our ability to continue to attract and retain employees in the extremely competitive labor markets in which we compete, our board of directors has determined that the size of the share reserve under the Restated Plan is reasonable and appropriate at this time. Our board of directors will not create a subcommittee to evaluate the risk and benefits for issuing shares under the Restated Plan.
Stockholder Approval Requirement
Stockholder approval of the Restated Plan is necessary in order for us to (1) meet the stockholder approval requirements of Nasdaq, and (2) grant ISOs thereunder. Specifically, approval of the Restated Plan will constitute approval pursuant to the stockholder approval requirements of Section 422 of the Internal Revenue Code (the "Code") relating to ISOs.
If the Restated Plan is not approved by our stockholders, the Restated Plan will not become effective, the existing 2013 Plan will continue in full force and effect, and we may continue to grant awards under the 2013 Plan, subject to its terms, conditions and limitations, using the shares available for issuance thereunder.
Summary of the Restated Plan
16
The principal features of the Restated Plan are summarized below, but the summary is qualified in its entirety by reference to the Restated Plan itself, which is attached as Appendix A to this proxy statement.
Purpose
The purpose of the Restated Plan is to promote our success and enhance our value by linking the individual interests of the members of the board of directors and our employees and consultants to those of our stockholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to our stockholders. The Restated Plan is further intended to provide us flexibility in our ability to motivate, attract, and retain the services of members of the board of directors, our employees and our consultants upon whose judgment, interest, and special effort the successful conduct of our operation is largely dependent.
Securities Subject to the Restated Plan
As of March 1, 2023, a total of 794,717 shares of our common stock were authorized for issuance under the 2013 Plan and will be reserved for issuance under the Restated Plan. In addition, an additional 400,000 shares will be added to the share reserve under the Restated Plan. In addition, commencing on January 1, 2024 and on each January 1 thereafter during the ten-year term of the Restated Plan, through and including January 1, 2033, the aggregate number of shares available for issuance under the Restated Plan shall be increased by that number of shares of our common stock equal to the lesser of:
There will be no limit on the number of shares that may become available for issuance under the Restated Plan pursuant to the foregoing evergreen provisions. The number of shares of stock that may be issued or transferred pursuant to ISOs under the Restated Plan may not exceed an aggregate of 50,000,000 shares. All of the foregoing share numbers may be adjusted for changes in our capitalization and certain corporate transactions, as described below under the heading “Adjustments.”
To the extent that an award lapses, expires, is forfeited or is settled for cash, any shares subject to the award will, to the extent of such lapse, expiration, forfeiture or cash settlement, be available for future grant or sale under the Restated Plan. In addition, shares of common stock which are delivered by the holder or withheld by us in payment of the grant or exercise price or tax withholding obligation of any award under the Restated Plan will again be available for future grant or sale under the Restated Plan. If any shares of restricted stock are forfeited by a participant or repurchased by us pursuant to the Restated Plan, such shares shall again be available for future grant or sale under the Restated Plan. Any shares subject to a Stock Appreciation Right, or a SAR, that are not issued in connection with the stock settlement of the SAR on exercise thereof shall again be available for the grant of an award pursuant to the Restated Plan. The payment of dividend equivalents in cash in conjunction with any outstanding awards shall not be counted against the shares of stock available for issuance under the plan.
Administration
The compensation committee of our board of directors administers the Restated Plan (except with respect to any award granted to non-employee directors, which must be administered by our full board of directors). To administer the Restated Plan, our compensation committee must consist solely of at least two members of our board of directors, each of whom is a “non-employee director” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Subject to the terms and conditions of the Restated Plan, our compensation committee has the authority to select the persons to whom awards are to be made, to determine the type or types of awards to be granted to each person, the number of awards to grant, the number of shares to be subject to such awards, and the terms and conditions of such awards, and to make all other determinations and decisions and to take all other actions necessary or advisable for the administration of the Restated Plan. Our compensation committee is also authorized to establish, adopt, amend or revise rules relating to administration of the Restated Plan. Our board of directors may at any time revest in itself the authority to administer the Restated Plan.
Eligibility
Options, SARs, restricted stock and other awards under the Restated Plan may be granted to individuals who are our officers or employees or are the officers or employees of any of our subsidiaries. Such awards may also be granted to our non-employee directors and consultants, but only employees may be granted ISOs. As of March 1, 2023, there were five non-employee directors, four employees and approximately seven consultants who would have been eligible for awards under the Restated Plan had it been in effect on such date. The sum of any cash compensation, or other compensation, and the value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of awards granted to a non-employee director as compensation for services as a non-employee director during any calendar year under the Restated Plan may not exceed $400,000. The board of directors may make exceptions to this limit for individual non-employee directors in extraordinary circumstances, as the board of directors may determine in its discretion, provided that the non-employee director receiving such additional compensation may not participate in the decision to award such compensation or in other contemporaneous compensation decisions involving non-employee directors.
17
The closing share price per share for our common stock on the Nasdaq Capital Market on March 1, 2023 was $2.84.
Awards
The Restated Plan provides that our compensation committee (or the board of directors, in the case of awards to non-employee directors) may grant or issue stock options, SARs, restricted stock, restricted stock units, dividend equivalents, stock payments and performance awards, or any combination thereof. Our compensation committee (or the board of directors, in the case of awards to non-employee directors) will consider each award grant subjectively, considering factors such as the individual performance of the recipient and the anticipated contribution of the recipient to the attainment of our long-term goals. Each award will be set forth in a separate agreement with the person receiving the award and will indicate the type, terms and conditions of the award.
18
Performance-Based Compensation
The compensation committee may grant to eligible recipients restricted stock, dividend equivalents, stock payments, restricted stock units, cash bonuses and other stock-based awards that are paid, vest or become exercisable upon the attainment of company performance criteria relating to our performance, the performance of a division, business unit or an individual, and may include but are not limited to the following: operating or other costs and expenses, improvements in expense levels, cash flow (including, but not limited to, operating cash flow and free cash flow), return on assets, return on capital, stockholders’ equity, return on stockholders’ equity, total stockholder return, return on sales, gross or net profit or operating margin, working capital, net earnings (either before or after interest, taxes, depreciation and amortization), gross or net sales or revenue, net income (either before or after taxes), adjusted net income, operating earnings, earnings per share of stock, adjusted earnings per share of stock, price per share of stock, regulatory body approval for commercialization of a product, capital raised in financing transactions or other financing milestones, market recognition (including but not limited to awards and analyst ratings), financial ratios, implementation or completion of critical projects, market share, economic value, comparisons with various stock market indices, and implementation, completion or attainment of objectively determinable objectives relating to research, development, regulatory, commercial or strategic milestones or development. These performance criteria may be measured in absolute terms or as compared to performance in an earlier period or as compared to any incremental increase or decrease or as compared to results of a peer group or to market performance indicators or indices.
The compensation committee may provide that one or more adjustments will be made to one or more of the performance goals established for any performance period. Such adjustments may include one or more of the following: items related to a change in accounting principle, items relating to financing activities, expenses for restructuring or productivity initiatives, other non-operating items, items related to acquisitions, items attributable to the business operations of any entity acquired by us during the performance period, items related to the disposal of a business or segment of a business, items related to discontinued operations that do not qualify as a segment of a business under applicable accounting standards, items attributable to any stock dividend, stock split, combination or exchange of shares occurring during the performance period, any other items of significant income or expense which are determined to be appropriate adjustments, items relating to unusual or extraordinary corporate transactions, events or developments, items related to amortization of acquired intangible assets, items that are outside the scope of our core, on-going business activities, items related to acquired in-process research and development, items relating to changes in tax laws, items relating to major licensing or partnership arrangements, items relating to asset impairment charges, items relating to gains and losses for litigation, arbitration or contractual settlements, or items relating to any other unusual or nonrecurring events or changes in applicable laws, accounting principles or business conditions.
Forfeiture, Recoupment and Clawback Provisions
Pursuant to its general authority to determine the terms and conditions applicable to awards under the Restated Plan, the compensation committee has the right to provide, in an award agreement or otherwise, that an award shall be subject to the provisions of any recoupment or clawback policies implemented by us, including, without limitation, any recoupment or clawback policies adopted to comply with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder.
Adjustments
If there is any stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of our assets to stockholders, or any other change affecting the shares of our common stock or the share price of our common stock other than an equity restructuring (as defined in the Restated Plan), the plan administrator will make such equitable adjustments, if any, as the plan administrator in its discretion may deem appropriate to reflect such change with respect to (1) the aggregate number and type of shares that may be issued under the Restated Plan (including, but not limited to, adjustments of the number of shares available under the plan and the maximum number of shares which may be subject to one or more awards to a participant pursuant to the plan during any calendar year), (2) the number and kind of shares, or other securities or property, subject to outstanding awards, (3) the number and kind of shares, or other securities or property, for which automatic grants are to be subsequently made to new and continuing non-employee directors, (4) the terms and conditions of any outstanding awards (including, without limitation, any applicable performance targets or criteria with respect thereto), and (5) the grant or exercise price per share for any outstanding awards under the Restated Plan. If there is any equity restructuring, (1) the number and type of securities subject to each outstanding award and the grant or exercise price per share for each outstanding award, if applicable, will be proportionately adjusted, and (2) the plan administrator will make proportionate adjustments to reflect such equity restructuring with respect to the aggregate number and type of shares that may be issued under the Restated Plan
19
(including, but not limited to, adjustments of the number of shares available under the plan and the maximum number of shares which may be subject to one or more awards to a participant pursuant to the plan during any calendar year). Adjustments in the event of an equity restructuring will not be discretionary. The plan administrator also has the authority under the Restated Plan to take certain other actions with respect to outstanding awards in the event of a corporate transaction, including provision for the cash-out, termination, assumption or substitution of such awards.
Corporate Transactions
In the event of a change in control where the acquirer does not assume or substitute awards granted under the Restated Plan, awards issued under the Restated Plan will be subject to accelerated vesting such that 100% of the awards will become vested and exercisable or payable, as applicable. Under the Restated Plan, a change in control is generally defined as:
Amendment and Termination of the Restated Plan
Our compensation committee or board of directors may terminate, amend or modify the Restated Plan. However, stockholder approval of any amendment to the Restated Plan will be obtained to the extent necessary and desirable to comply with any applicable law, regulation or stock exchange rule, or for any amendment to the Restated Plan that increases the number of shares available under the Restated Plan or that may be issued to an individual in any calendar year. If not terminated earlier by our compensation committee or board of directors, the Restated Plan will terminate in March 2033 on the tenth anniversary of the date of its initial approval by our board of directors.
Repricing Permitted
Our compensation committee (or the board of directors, in the case of awards to non-employee directors) has the authority, without the approval of our stockholders, to authorize the amendment of any outstanding award to reduce its price per share and to provide that an award will be canceled and replaced with the grant of an award having a lesser price per share. Our compensation committee (or the board of directors, in the case of awards to non-employee directors) also has the authority, without the approval of our stockholders, to amend any outstanding award to increase the price per share or to cancel and replace an award with the grant of an award having a price per share that is greater than or equal to the price per share of the original award.
Securities Laws
20
The Restated Plan is intended to conform with all provisions of the Securities Act of 1933, as amended, and the Exchange Act, and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, including without limitation Rule 16b-3. The Restated Plan will be administered, and options will be granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations.
Federal Income Tax Consequences Associated with the Restated Plan
The federal income tax consequences of the Restated Plan under current federal income tax law are summarized in the following discussion which deals with the general tax principles applicable to the Restated Plan and is intended for general information only. The following discussion of federal income tax consequences does not purport to be a complete analysis of all of the potential tax effects of the Restated Plan. It is based upon laws, regulations, rulings and decisions now in effect, all of which are subject to change. Foreign, state and local tax laws, and employment, estate and gift tax considerations are not discussed, and may vary depending on individual circumstances and from locality to locality.
Upon exercising an incentive stock option, a Restated Plan participant generally will not recognize taxable income, and we will not be entitled to a tax deduction for compensation expense. However, upon exercise, the amount by which the fair market value of the shares purchased exceeds the purchase price will be an item of adjustment for alternative minimum tax purposes. The participant will recognize taxable income upon a sale or other taxable disposition of the option shares. For federal income tax purposes, dispositions are divided into two categories: qualifying and disqualifying. A qualifying disposition generally occurs if the sale or other disposition is made more than two years after the date the option was granted and more than one year after the date the shares are transferred upon exercise. If the sale or disposition occurs before these two periods are satisfied, then a disqualifying disposition generally will result.
Upon a qualifying disposition of incentive stock option shares, the participant will recognize long term capital gain in an amount equal to the excess of the amount realized upon the sale or other disposition of the shares over their purchase price. If there is a disqualifying disposition of the shares, then the excess of the fair market value of the shares on the exercise date (or, if less, the price at which the shares are sold) over their purchase price will be taxable as ordinary income to the participant. If there is a disqualifying disposition in the same year of exercise, it eliminates the item of adjustment for alternative minimum tax purposes. Any additional gain or loss recognized upon the disposition will be recognized as a capital gain or loss by the participant.
We will not be entitled to any tax deduction if the participant makes a qualifying disposition of incentive stock option shares. If the participant makes a disqualifying disposition of the shares, we should be entitled to a tax deduction for compensation expense in the amount of the ordinary income recognized by the participant.
Upon exercising or settling a stock appreciation right, a Restated Plan participant will recognize taxable income at ordinary income tax rates, and we should be entitled to a corresponding tax deduction for compensation expense, in the amount paid or value of the shares issued upon exercise or settlement. Payments in shares will be valued at the fair market value of the shares at the time of the payment, and upon the subsequent disposition of the shares the participant will recognize a short term or long term capital gain or loss in the amount of the difference between the sales price of the shares and the participant’s tax basis in the shares.
21
New Plan Benefits
Except with respect to grants of stock options under the Restated Plan that will be awarded to each non-employee director serving on our board of directors on the date of the 2023 annual meeting, each of which described above under “Director Compensation,” all other future grants under the Restated Plan are within the discretion of our board of directors or the compensation committee, and neither our board of directors nor the compensation committee has made any determination to make future grants to any persons under the Restated Plan as of the date of this proxy statement. Therefore, it is not possible to determine the future benefits that will be received by any participants other than our non-employee directors under the Restated Plan, or the benefits that would have been received by such participants if the Restated Plan had been in effect in the year ended December 31, 2022.
Plan Benefits under the 2013 Plan
As of December 31, 2022, each of our named executive officers and the other groups identified below had been granted the following stock options under the 2013 Plan:
|
|
Stock Options |
|
|
|
|
|
|
|
David A. Gonyer |
|
|
220,657 |
|
Matthew J. D'Onofrio |
|
|
156,752 |
|
Marilyn R. Carlson, D.M.D., M.D. |
|
|
136,270 |
|
All Executive Officers as a Group (3 persons) |
|
|
513,679 |
|
All Non-Employee Directors as a Group (5 persons) |
|
|
122,367 |
|
All Non-Executive Employees as a Group (1 person) |
|
|
16,000 |
|
22
Vote Required; Recommendation of the Board of Directors
The affirmative vote of the holders of a majority of the shares of common stock present or represented by proxy and entitled to vote at the annual meeting is required to approve the Restated Plan. Abstentions will be counted toward the tabulation of votes cast on this proposal and will have the same effect as negative votes. Any broker non-votes will not be counted toward the tabulation of votes cast on this proposal and will have no effect on the outcome.
Our board of directors unanimously recommends that the stockholders vote FOR the approval of the amendment and restatement of the 2013 Equity Incentive Award Plan
PROPOSAL 5
APPROVAL OF THE AMENDMENT AND RESTATEMENT OF OUR
2013 EMPLOYEE STOCK PURCHASE PLAN
Introduction
Our stockholders are being asked to approve an amendment and restatement of our 2013 Employee Stock Purchase Plan, or the Existing ESPP. The proposed amended and restated 2013 ESPP is referred to herein as the “Restated ESPP.” Our board of directors approved the Restated ESPP on March 20, 2023, subject to stockholder approval. The Restated ESPP will become effective upon stockholder approval.
The Restated ESPP is being submitted for stockholder approval in order to ensure that the Restated ESPP meets the requirements of Section 423 of the Code. If the Restated ESPP is not approved by our stockholders, the Restated ESPP will not become effective, the Existing ESPP will continue in full force and effect, and we may continue to grant awards under the Existing ESPP, subject to its terms, conditions and limitations, using the shares available for issuance thereunder.
Overview of Proposed Amendments
Increase in Share Reserve. We strongly believe that an employee stock purchase program is a necessary and important incentive and retention tool. As of March 1, 2023, a total of 70,833 shares of our common stock were reserved under the Existing ESPP and a total of 45,381 shares of common stock remained available under the Existing ESPP for future issuance. In addition, the Existing ESPP contains an “evergreen provision” that allows for an annual increase in the number of shares available for issuance under the Existing ESPP on January 1 of each year during the ten year term of the Existing ESPP, beginning on January 1, 2018. The annual increase in the number of shares is currently equal to the least of:
The automatic increases pursuant to the evergreen provision of the Existing ESPP on each of January 1, 2018, January 1, 2019, January 1, 2020, January 1, 2021, January 1, 2022 and January 1, 2023 were 8,333 shares and these increases are included in the total number of shares currently reserved for issuance under the Existing ESPP set forth above. Notwithstanding the foregoing, the number of shares of stock that may be issued or transferred pursuant to awards under the Existing ESPP may not exceed an aggregate of 104,166 shares.
Pursuant to the Restated ESPP, an additional 100,000 shares will be reserved for issuance under the Restated ESPP and the evergreen provision will be amended such that, commencing on January 1, 2024 and on each January 1 thereafter through and including January 1, 2033, the aggregate number of shares available for issuance under the Restated ESPP shall be increased by that number of shares of our common stock equal to the lesser of:
Notwithstanding the foregoing, the number of shares of stock that may be issued or transferred pursuant to awards under the Restated ESPP may not exceed an aggregate of 10,000,000 shares. All of the foregoing share numbers may be adjusted for changes in our capitalization and certain corporate transactions, as described below under the heading “Adjustments.”
Extension of Term. The term of the Restated ESPP will also be extended and the Restated ESPP will continue until it is terminated by our board of directors.
The Restated ESPP is not being amended in any material respect other than to reflect the changes described above.
23
Determination to Approve Restated ESPP
The table below presents information about the number of shares remaining available for issuance under the Existing ESPP as of March 1, 2023, and the proposed increase in shares authorized for issuance under the Restated ESPP.
The Existing ESPP and our 2013 Equity Incentive Award Plan, or the 2013 Plan, are the only equity incentive plans we currently have in place pursuant to which awards may still be granted. For information about the 2013 Plan and the proposed amendment and restatement of the 2013 Plan, see Proposal 4.
|
|
Number of Shares |
|
|
As a % of Shares Outstanding (1) |
|
|
Dollar Value (2) |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares remaining available for grant under Existing ESPP |
|
|
45,381 |
|
|
|
1.4 |
% |
|
$ |
$128,882 |
|
Proposed increase in shares available for issuance under Restated Plan (over existing share reserve under Existing ESPP)(3) |
|
|
100,000 |
|
|
|
3.0 |
% |
|
$ |
$284,000 |
|
(1) |
Based on 3,343,070 shares of our common stock outstanding as of March 1, 2023. |
(2) |
Based on the closing price of our common stock on March 1, 2023, of $2.84 per share. |
(3) |
Does not include possible future increases to the share reserve under the evergreen provision of the Restated ESPP. |
In determining whether to approve the Restated ESPP, including the proposed increase to the share reserve under the Restated ESPP over the share reserve under the Existing ESPP, our board of directors considered the following:
In light of the factors described above, and the fact that the ability to continue to grant equity compensation is vital to our ability to continue to attract and retain employees in the extremely competitive labor markets in which we compete, our board of directors has determined that the size of the share reserve under the Restated ESPP is reasonable and appropriate at this time. Our board of directors will not create a subcommittee to evaluate the risk and benefits for issuing shares under the Restated ESPP.
Summary of the Restated ESPP
The principal features of the Restated ESPP are summarized below, but the summary is qualified in its entirety by reference to the Restated ESPP itself, which is attached as Appendix B to this proxy statement.
Purpose
24
The purpose of the Restated ESPP is to assist our eligible employees in acquiring a stock ownership interest in our company and to help our eligible employees provide for their future security and to encourage them to remain in our employment.
Securities Subject to the Restated ESPP
A total of 170,833 shares of our common stock will be authorized for issuance under the Restated ESPP (after taking into account the increase of 100,000 shares added in connection with this amendment and restatement). In addition, commencing on January 1, 2024 and on each January 1 thereafter through and including January 1, 2033, the aggregate number of shares available for issuance under the Restated ESPP shall be increased by that number of shares of our common stock equal to the lesser of:
Notwithstanding the foregoing, the number of shares of stock that may be issued or transferred pursuant to awards under the Restated ESPP may not exceed an aggregate of 10,000,000 shares. All of the foregoing share numbers may be adjusted for changes in our capitalization and certain corporate transactions, as described below under the heading “Adjustments.”
Administration
Our board of directors or its committee has full and exclusive authority to interpret the terms of the Restated ESPP and determine eligibility. Our compensation committee is the administrator of the Restated ESPP.
Eligibility
Our employees are eligible to participate in the Restated ESPP if they are customarily employed by us or any participating subsidiary for at least 20 hours per week and more than five months in any calendar year on the day prior to the first day of the offering period. However, an employee may not be granted rights to purchase stock under our Restated ESPP if such employee, immediately after the grant, would own (directly or through attribution) stock possessing 5% or more of the total combined voting power or value of all classes of our common or other class of stock.
Eligible employees become participants in the Restated ESPP by enrolling and authorizing payroll deductions by the deadline established by the administrator prior to the relevant offering date. Directors who are not employees are not eligible to participate. Employees who choose not to participate, or are not eligible to participate at the start of an offering period but who become eligible thereafter, may enroll in any subsequent offering period.
As of March 1, 2023, the most recent enrollment date, there were four employees who were eligible to participate in the Restated ESPP, none of whom had elected to participate.
Participation in an Offering
Offering Periods and Purchase Periods. Our Restated ESPP is intended to qualify under Code Section 423 and stock will be offered under the Restated ESPP during offering periods. The length of the offering periods under the Restated ESPP will be determined by our compensation committee and may be up to 27 months long. Employee payroll deductions will be used to purchase shares on each purchase date during an offering period. The purchase dates will be determined by the compensation committee for each offering period, but will generally be the last trading day in each offering period. The compensation committee may, in its discretion, modify the terms of future offering periods.
The Restated ESPP is currently implemented by six-month “offering periods.” A new six-month offering period will commence on each of September 1 and March 1 during the term of the Restated ESPP. “Purchase dates” will be set for the last trading day in each six-month offering period and will occur on each of August 31 and February 28 (unless such days are not trading days).
Enrollment; Contributions. Our Restated ESPP permits participants to purchase common stock through payroll deductions of up to 20% of their eligible compensation, which includes a participant’s gross base compensation for services to the company, excluding overtime payments, sales commissions, incentive compensation, bonuses, expense reimbursements, fringe benefits and other special payments. Unless otherwise determined by the administrator prior to the commencement of an offering period, a participant may purchase a maximum of 100,000 shares of common stock during each offering period. In addition, no employee will be permitted to accrue the right to purchase stock under the Restated ESPP at a rate in excess of $25,000 worth of shares during any calendar year during which such a purchase right is outstanding (based on the fair market value per share of our common stock as of the first day of the offering period).
After an employee authorizes us to deduct a certain percentage of his or her compensation for the purchase of shares under the Restated ESPP, we will make such deductions from his or her paycheck each pay period during an offering period and
25
hold the accumulated amounts in a bank account until the completion of the offering period. An employee will not receive any interest on the amounts of compensation that we accumulate for the purchase of shares under the Restated ESPP. We may use all funds held by us under the Restated ESPP for any corporate purpose, and we are not obligated to segregate such funds.
Purchase Rights. On the first day of each offering period, each participant automatically is granted an option to purchase shares of our common stock. The option expires at the end of the offering period or upon termination of employment, whichever is earlier, but is exercised at the end of each offering period to the extent of the payroll deductions accumulated during such purchase period.
Purchase Price. The purchase price of the shares will be 85% of the lower of the fair market value of our common stock on the first trading day of the offering period or on the applicable purchase date. The fair market value per share of our common stock under the Restated ESPP is generally the closing sale price of our common stock on the Nasdaq Stock Market on the date for which fair market value is being determined, or if there is no closing sales price for a share of our common stock on the date in question, the closing sales price for a share of common stock on the last preceding date for which such quotation exists. The closing price per share of our common stock on the Nasdaq Capital Market on March 1, 2023, was $2.84.
Withdrawal; Termination of Employment. Participants may end their participation at any time during an offering period, and will be paid their accrued payroll deductions that have not yet been used to purchase shares of common stock. Participation ends automatically upon termination of employment with us.
Adjustments
In the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation, spin-off, recapitalization, distribution of company assets to stockholders (other than normal cash dividends), or any other corporate event affecting our common stock, the number of shares reserved under the Restated ESPP and the price per share and number of shares of our common stock covered by each outstanding right may be adjusted proportionately. Such adjustments will be made by the administrator of the Restated ESPP, whose determination in that respect will be final, binding and conclusive.
In the event of certain significant transactions or a change in control (as defined in the Restated ESPP), the administrator of the Restated ESPP may provide for (1) either the replacement or termination of outstanding rights in exchange for cash, (2) the assumption or substitution of outstanding rights by the successor or survivor corporation or parent or subsidiary thereof, if any, (3) the adjustment in the number and type of shares of stock subject to outstanding rights, (4) the use of participants’ accumulated payroll deductions to purchase stock on a new purchase date prior to the next purchase date and termination of any rights under ongoing offering periods or (5) the termination of all outstanding rights. Under the Restated ESPP, a change in control has the same definition as given to such term in the Existing ESPP.
Transferability. A participant may not transfer rights granted under the Restated ESPP other than by will, the laws of descent and distribution or as otherwise provided under the Restated ESPP.
Amendment and Termination. The administrator of the Restated ESPP may amend, suspend or terminate the Restated ESPP. However, stockholder approval of any amendment to the Restated ESPP will be obtained for any amendment which changes the aggregate number or type of shares that may be sold pursuant to rights under the Restated ESPP, changes the corporations or classes of corporations whose employees are eligible to participate in the Restated ESPP or changes the Restated ESPP in any manner that would cause the Restated ESPP to no longer be an employee stock purchase plan within the meaning of Section 423(b) of the Code. The Restated ESPP will continue in effect until it is terminated by our board of directors.
Federal Income Tax Consequences Associated with the Restated ESPP
The material federal income tax consequences of the Restated ESPP under current federal income tax law are summarized in the following discussion, which deals with the general tax principles applicable to the Restated ESPP. The following discussion is based upon laws, regulations, rulings and decisions now in effect, all of which are subject to change. Foreign, state and local tax laws, and employment, estate and gift tax considerations are not discussed due to the fact that they may vary depending on individual circumstances and from locality to locality.
The Restated ESPP, and the right of participants to make purchases thereunder, is intended to qualify under the provisions of Section 423 of the Code. Under the applicable Code provisions, no income will be taxable to a participant until the sale or other disposition of the shares purchased under the Restated ESPP. This means that an eligible employee will not recognize taxable income on the date the employee is granted an option under the Restated ESPP (i.e., the first day of the offering period). In addition, the employee will not recognize taxable income upon the purchase of shares. Upon such sale or disposition, the participant will generally be subject to tax in an amount that depends upon the length of time such shares are held by the participant prior to disposing of them. If the shares are sold or disposed of more than two years from the first day of the offering period during which the shares were purchased and more than one year from the date of purchase, or if the participant dies while holding the shares, the participant (or his or her estate) will recognize ordinary income measured as the lesser of (1) the excess of the fair market value of the shares at the time of such sale or disposition over the purchase price or (2) an amount equal to 15% of
26
the fair market value of the shares as of the first day of the offering period. Any additional gain will be treated as long-term capital gain. If the shares are held for the holding periods described above but are sold for a price that is less than the purchase price, there is no ordinary income and the participating employee has a long-term capital loss for the difference between the sale price and the purchase price.
If the shares are sold or otherwise disposed of before the expiration of the holding periods described above, the participant will recognize ordinary income generally measured as the excess of the fair market value of the shares on the date the shares are purchased over the purchase price and we will be entitled to a tax deduction for compensation expense in the amount of ordinary income recognized by the employee. Any additional gain or loss on such sale or disposition will be long-term or short-term capital gain or loss, depending on how long the shares were held following the date they were purchased by the participant prior to disposing of them. If the shares are sold or otherwise disposed of before the expiration of the holding periods described above but are sold for a price that is less than the purchase price, the participant will recognize ordinary income equal to the excess of the fair market value of the shares on the date of purchase over the purchase price (and we will be entitled to a corresponding deduction), but the participant generally will be able to report a capital loss equal to the difference between the sales price of the shares and the fair market value of the shares on the date of purchase.
Plan Benefits under the Existing ESPP
As of December 31, 2022, each of our named executive officers and the other groups identified below have purchased the following shares under the Existing ESPP (our non-employee directors are not eligible to participate in the Existing ESPP and are not listed in the table below):
|
|
Shares |
|
|
Aggregate |
|
||
|
|
|
|
|
|
|
||
David A. Gonyer, Chief Executive Officer and Director |
|
|
4,898 |
|
|
$ |
109,120 |
|
Matthew J. D'Onofrio, President, Chief Operating Officer, Secretary and Treasurer |
|
|
7,416 |
|
|
$ |
148,736 |
|
Marilyn R. Carlson, D.M.D., M.D. Chief Medical Officer |
|
|
4,323 |
|
|
$ |
111,302 |
|
All Executive Officers as a Group (3 persons) |
|
|
16,637 |
|
|
$ |
369,157 |
|
All Non-Executive Employees as a Group (1 person) |
|
— |
|
|
$ |
- |
|
|
New Plan Benefits
Benefits under the Restated ESPP will depend on the employees’ enrollment and contribution elections, and the fair market value of the shares at various future dates. Therefore, it is not possible to determine the benefits that will be received in the future by participants in the Restated ESPP.
Vote Required; Recommendation of the Board of Directors
The affirmative vote of the holders of a majority of the shares of common stock present or represented by proxy and entitled to vote at the annual meeting is required to approve the Restated ESPP. Abstentions will be counted toward the tabulation of votes cast on this proposal and will have the same effect as negative votes. Any broker non-votes will not be counted toward the tabulation of votes cast on this proposal and will have no effect on the outcome.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE TO APPROVE THE AMENDMENT AND RESTATEMENT OF OUR 2013 EMPLOYEE STOCK PURCHASE PLAN
PROPOSAL 6
APPROVAL OF AN AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
Our board of directors is requesting stockholder approval of an amendment to our Amended and Restated Certificate of Incorporation to increase our authorized number of shares of common stock from 50,000,000 shares to 100,000,000 shares.
The proposed amendment would amend the first sentence of ARTICLE FIFTH of the Amended and Restated Certificate of Incorporation to read in its entirety as follows:
“The Corporation is authorized to issue two classes of stock to be designated, respectively, Common Stock, par value $0.0001 per share (“Common Stock”), and Preferred Stock, par value $0.0001 per share (“Preferred Stock”). The total number of shares the Corporation shall have the authority to issue is One Hundred Five Million (105,000,000) shares, One Hundred
27
Million (100,000,000) shares of which shall be Common Stock and Five Million (5,000,000) shares of which shall be Preferred Stock.”
The additional common stock to be authorized by adoption of the amendment would have rights identical to our currently outstanding common stock. Adoption of the proposed amendment and issuance of the common stock would not affect the rights of the holders of our currently outstanding common stock, except for effects incidental to increasing the number of shares of our common stock outstanding, such as dilution of the voting rights of current holders of common stock. If the amendment is adopted, it will become effective upon filing of a Certificate of Amendment of our Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware.
In addition to the 3,343,070 shares of common stock outstanding as of the record date, our board of directors has reserved an aggregate of 569,351 shares of common stock for issuance upon exercise of options and other awards granted under our stock option plan, and 45,381 shares of common stock for issuance upon purchases under our 2013 Employee Stock Purchase Plan.
Although our board of directors currently has no plans to issue the additional shares of common stock, increasing the authorized number of shares of common stock would offer additional flexibility to use our common stock for business and financial purposes in the future. These purposes may include expanding our business or product lines through the acquisition of other businesses or products, raising capital, and establishing strategic relationships with other companies. The additional shares may be used for various purposes without further stockholder approval, except as may be required in certain cases by law or the rules of the Nasdaq Stock Market. We believe that the amendment will provide us with additional flexibility to meet business and financing needs as and when they may arise.
Any future issuance of additional authorized shares of our common stock may, among other things, dilute the equity and voting rights of those holding common stock at the time the additional shares are issued. Additionally, this potential dilutive effect may cause a reduction in the market price of our common stock. Further, the amendment could adversely affect the ability of third parties to take us over or change our control by, for example, permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the composition of our board of directors or contemplating a tender offer or other transaction for the combination of us with another company that our board of directors determines is not in our best interests or in the best interests of our stockholders. Our board of directors however, does not intend or view this amendment as an anti-takeover measure, nor does it contemplate its use in this manner at any time in the foreseeable future.
Vote Required; Recommendation of the Board of Directors
The affirmative vote of a majority of the outstanding shares of common stock entitled to vote at the meeting will be required to approve the amendment of our Amended and Restated Certificate of Incorporation to increase the authorized number of shares of our common stock from 50,000,000 to 100,000,000. Abstentions and broker non-votes with respect to this proposal will be counted for purposes of establishing a quorum and, if a quorum is present, will have the same effect as a vote against this proposal.
OUR BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPROVAL OF THE AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK.
PROPOSAL 7
APPROVAL OF AN AMENDMENT TO THE COMPANY’S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO UPDATE THE EXCULPATION PROVISION TO INCLUDE CERTAIN OFFICERS OF THE COMPANY AS PERMITTED BY A RECENT AMENDMENT TO DELAWARE LAW
General
The State of Delaware, which is our state of incorporation, recently enacted legislation that enables Delaware companies to limit the liability of certain officers in limited circumstances under Section 102(b)(7) of the Delaware General Corporation Law (“DGCL”). Amended DGCL Section 102(b)(7) only permits exculpation for direct claims brought by stockholders for breach of an officer’s fiduciary duty of care, including class actions, but does not eliminate officers’ monetary liability for breach of fiduciary duty claims brought by the corporation itself or for derivative claims brought by stockholders in the name of the corporation. Furthermore, the limitation on liability does not apply to breaches of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which the officer derived an improper personal benefit.
Our board of directors believes it is important to provide protection from certain liabilities and expenses that may discourage prospective or current officers from serving corporations. In the absence of such protection, qualified officers might be deterred from serving as officers due to exposure to personal liability and the risk that substantial expense will be incurred in defending lawsuits, regardless of merit. In particular, our board of directors took into account the narrow class and type of claims that such officers would be exculpated from liability pursuant to amended DGCL Section 102(b)(7), the limited number of officers that
28
would be impacted, and the benefits our board of directors believes would accrue to the company by providing exculpation in accordance with DGCL Section 102(b)(7), including, without limitation, the ability to attract and retain key officers and the potential to reduce future litigation costs associated with frivolous lawsuits.
Our board of directors balanced these considerations with our corporate governance guidelines and practices and determined that it is advisable and in the best interests of the company and our stockholders to amend the current exculpation and liability provisions in Section (1) of Article EIGHTH of our Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), to adopt amended DGCL Section 102(b)(7) and extend exculpation protection to our officers in addition to our directors. We refer to this proposed amendment to our Certificate of Incorporation as the “Officer Exculpation Charter Amendment” in this proxy statement.
The form of the proposed Officer Exculpation Charter Amendment to our Amended and Restated Certificate of Incorporation setting forth the Officer Exculpation Charter Amendment, which would be filed with the Secretary of State of the State of Delaware (the "Delaware Secretary of State") if Proposal 7 is approved by stockholders, is attached to this proxy statement as Appendix C.
Effect of the Amendment
The proposed Officer Exculpation Charter Amendment would allow for the exculpation of our officers to the fullest extent permitted by the DGCL. As described above, this means that the proposed Officer Exculpation Charter Amendment would allow for the exculpation of covered officers only in connection with direct claims brought by stockholders, including class actions, but would not eliminate officers’ monetary liability for breach of fiduciary duty claims brought by the corporation itself or for derivative claims brought by stockholders in the name of the corporation. Further, the Officer Exculpation Charter Amendment would not limit the liability of officers for any breach of the duty of loyalty to the corporation or its stockholders, any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, or any transaction from which the officer derived an improper personal benefit.
Rationale for Adoption of Officer Exculpation Charter Amendment
Our board of directors believes it is appropriate for public companies in states that allow exculpation of officers to have exculpation clauses in their certificates of incorporation. The nature of the role of directors and officers often requires them to make decisions on crucial matters. Frequently, directors and officers must make decisions in response to time-sensitive opportunities and challenges, which can create substantial risk of investigations, claims, actions, suits or proceedings seeking to impose liability on the basis of hindsight, especially in the current litigious environment and regardless of merit. Limiting concern about personal risk would empower both directors and officers to best exercise their business judgment in furtherance of stockholder interests. We expect our peers to adopt exculpation clauses that limit the personal liability of officers in their certificates of incorporation and failing to adopt the proposed Officer Exculpation Charter Amendment could impact our recruitment and retention of exceptional officer candidates that conclude that the potential exposure to liabilities, costs of defense and other risks of proceedings exceeds the benefits of serving as an officer of the company.
For the reasons stated above, our board of directors determined that the proposed Officer Exculpation Charter Amendment is advisable and in the best interest of the company and our stockholders and authorized and approved the proposed Officer Exculpation Charter Amendment and directed that it be considered at the Annual Meeting. Our board of directors believes the proposed Officer Exculpation Charter Amendment would better position the company to attract top officer candidates and retain our current officers and enable the officers to exercise their business judgment in furtherance of the interests of the stockholders without the potential for distraction posed by the risk of personal liability. Additionally, it would align the protections for our officers with those protections currently afforded to our directors.
The proposed Officer Exculpation Charter Amendment is not being proposed in response to any specific resignation, threat of resignation or refusal to serve by any officer.
If our stockholders approve the Officer Exculpation Charter Amendment, our board of directors has authorized our officers to file the Officer Exculpation Charter Amendment with the Delaware Secretary of State, which we anticipate doing as soon as practicable following stockholder approval of the Officer Exculpation Charter Amendment at the 2023 annual meeting, and the Officer Exculpation Charter Amendment would become effective upon acceptance by the Delaware Secretary of State.
If our stockholders do not approve the Officer Exculpation Charter Amendment, the Company’s current exculpation provisions relating to directors will remain in place, and the Officer Exculpation Charter Amendment will not be filed with the Delaware Secretary of State. However, even if our stockholders approve the Amendment, our board of directors retains discretion under Delaware law not to implement it.
Text of Proposed Officer Exculpation Charter Amendment
29
Our Amended and Restated Certificate of Incorporation currently provides for the exculpation of directors but does not include a provision that allows for the exculpation of officers. To ensure that we are able to attract and retain key officers and in an effort to reduce litigation costs associated with frivolous lawsuits, we propose to amend Section (1) of Article EIGHTH of our Amended and Restated Certificate of Incorporation so that it would state in its entirety as follows:
EIGHTH: (1) To the maximum extent permitted by the DGCL, as the same exists or as may hereafter be amended, a director or officer of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer. If the DGCL is amended after approval by the stockholders of this Article EIGHTH to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended.
The changes to our current Amended and Restated Certificate of Incorporation are marked in bold, italics and underlined for reference.
Vote Required; Recommendation of the Board of Directors
The affirmative vote of a majority of the outstanding shares of common stock entitled to vote at the meeting will be required to approve the amendment of our Amended and Restated Certificate of Incorporation to update the exculpation provision to include certain officers of the Company as permitted by a recent amendment to Delaware law. Abstentions and broker non-votes will have the same effect as a vote against this proposal.
OUR BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPROVAL OF THE AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO UPDATE THE EXCULPATION PROVISION TO INCLUDE CERTAIN OFFICERS OF THE COMPANY AS PERMITTED BY A RECENT AMENDMENT TO DELAWARE LAW.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the beneficial ownership of our common stock as of March 13, 2023 by:
The number of shares beneficially owned by each stockholder is determined under rules issued by the SEC. Under these rules, beneficial ownership includes any shares as to which a person has sole or shared voting power or investment power. Applicable percentage ownership is based on 3,343,070 shares of common stock outstanding on March 13, 2023. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options, warrants or other rights held by such person that are currently exercisable or will become exercisable within 60 days of March 13, 2023 are considered outstanding, although these shares are not considered outstanding for purposes of computing the percentage ownership of any other person.
Unless otherwise indicated, the address of each beneficial owner listed below is c/o Evoke Pharma, Inc., 420 Stevens Avenue, Suite 370, Solana Beach, CA 92075. We believe, based on information provided to us that each of the stockholders listed below has sole voting and investment power with respect to the shares beneficially owned by the stockholder unless noted otherwise, subject to community property laws where applicable .
30
|
|
|
|
|
|
|
||
|
|
Beneficial Ownership |
|
|||||
Name of Beneficial Owner |
|
Number of Shares |
|
|
Percent of Total |
|
||
|
|
|
|
|
|
|
||
Executive Officers and Directors |
|
|
|
|
|
|
||
David A. Gonyer, R.Ph.(1) |
|
|
130,348 |
|
|
|
3.78 |
% |
Matthew J. D'Onofrio(2) |
|
|
88,432 |
|
|
|
2.59 |
% |
Marilyn R. Carlson, D.M.D., M.D.(3) |
|
|
66,419 |
|
|
|
1.95 |
% |
Cam L. Garner(4) |
|
|
58,924 |
|
|
|
1.75 |
% |
Todd C. Brady, M.D., Ph.D.(5) |
|
|
27,851 |
|
|
* |
|
|
Malcolm R. Hill, Pharm.D.(6) |
|
|
27,749 |
|
` |
* |
|
|
Vickie W. Reed(7) |
|
|
8,722 |
|
|
* |
|
|
Kenneth J. Widder, M.D.(8) |
|
|
27,080 |
|
|
* |
|
|
All executive officers and directors as a group (8 persons)(9) |
|
|
435,525 |
|
|
|
11.78 |
% |
|
|
|
|
|
|
|
||
* Less than 1%
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Our Executive Officers
The following table sets forth certain information about our executive officers as of February 28, 2023:
|
|
|
|
|
|
|
Name |
|
Age |
|
|
Position |
|
David A. Gonyer, R.Ph. |
|
59 |
|
|
|
Chief Executive Officer and Director |
Matthew J. D’Onofrio |
|
53 |
|
|
|
President, Chief Operating Officer, Secretary & Treasurer |
Marilyn R. Carlson, D.M.D., M.D. |
|
75 |
|
|
|
Chief Medical Officer |
The biography of David A. Gonyer, R.Ph., can be found under “Proposal 1 – Election of Directors.”
Matthew J. D’Onofrio is one of our co-founders and has served as our President, Chief Operating Officer, Secretary and Treasurer since February 2023, as our Executive Vice President, Chief Business Officer, Secretary and Treasurer since 2010 and as our Executive Vice President, Corporate Development, Secretary and Treasurer since March 2007. Mr. D’Onofrio has over 30
31
years of experience in both large and small pharmaceutical firms. Prior to founding Evoke, Mr. D’Onofrio was Vice President, Business Development for Victory Pharma, a specialty pharmaceutical company based in San Diego. Mr. D’Onofrio was previously Director and Head of West Coast Business Development at Vertex Pharmaceuticals, Incorporated, a biotechnology company, directing partnership efforts associated with the La Jolla research facility as well as other corporate assets. Mr. D’Onofrio also held various commercial roles of increasing responsibility over a decade at Eli Lilly & Company, including significant experience in worldwide corporate business development. Mr. D’Onofrio earned a B.S. in Chemistry from San Diego State University and an M.B.A. from the University of Southern California.
Marilyn R. Carlson, D.M.D., M.D., has served as our Chief Medical Officer since December 2013. Dr. Carlson has worked closely with Evoke as an outside consultant since the company was founded in 2007. Dr. Carlson has been the key clinical and regulatory expert for Evoke through the entire development of Gimoti® (metoclopramide) nasal spray, including all clinical trials conducted in support of the drug for patients with gastroparesis. She has also participated in all of Evoke's meetings with FDA. Prior to joining Evoke, in 2012 Dr. Carlson helped found Agility Clinical, Inc., a contract research organization focused on the support of virtual companies, start-up companies and companies with orphan drugs. From 2004 to 2012, Dr. Carlson served as Vice President, Medical and Regulatory Affairs at Synteract, Inc., a clinical research organization, where she was responsible for safety surveillance, medical monitoring and regulatory submissions, among other duties. In 2004, Dr. Carlson founded and served as President of entreMeDica, Inc., a consulting firm offering chief medical officer services to biotechnology and life sciences companies with marketed products and products in development in a variety of therapeutic areas. Dr. Carlson also served as Vice President, Medical/Regulatory and Chief Medical Officer at Prometheus Laboratories Inc. from 2000 to 2004 and as Vice President, Clinical and Medical Affairs and Chief Medical Officer at Advanced Corneal Systems (now ISTA Pharmaceuticals) in 2000. Before that, Dr. Carlson worked at XOMA (US) LLC as Vice President, Clinical and Medical Affairs from 1999 to 2000 and as Medical Director from 1997 to 1999. From 1991 to 1997, Dr. Carlson held positions in clinical research, medical affairs and technical brand management at Procter & Gamble (P&G) Healthcare and P&G Pharmaceuticals. Prior to joining P&G, Dr. Carlson held academic and clinical positions at Case Western Reserve University, Western Reserve Geriatric Education Center and the MetroHealth Medical Center in Cleveland, Ohio. She holds a B.A. from Hunter College of the City University of New York, a D.M.D. from the Harvard School of Dental Medicine and an M.D. from Case Western Reserve University School of Medicine, completed an internal medicine residency at The Cleveland Clinic Foundation and a certification in regulatory affairs.
Overview
This Executive Compensation section provides information about the material components of our executive compensation program for our “named executive officers,” consisting of the following persons:
Summary Compensation Table
The following table shows information regarding the compensation earned by our named executive officers during the fiscal years ended December 31, 2022 and 2021:
Name and |
|
Year |
|
|
Salary |
|
|
Bonus |
|
|
Option |
|
|
All Other |
|
|
Total $ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
David A. Gonyer |
|
|
2022 |
|
|
|
570,000 |
|
|
|
171,000 |
|
|
|
78,488 |
|
|
|
65,534 |
|
|
|
885,022 |
|
Chief Executive Officer |
|
|
2021 |
|
|
|
550,000 |
|
|
|
127,050 |
|
|
|
888,723 |
|
|
|
60,192 |
|
|
|
1,625,965 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Matthew J. D'Onofrio |
|
|
2022 |
|
|
|
417,000 |
|
|
|
93,825 |
|
|
|
44,850 |
|
|
|
46,285 |
|
|
|
601,960 |
|
President, Chief |
|
|
2021 |
|
|
|
407,000 |
|
|
|
76,923 |
|
|
|
642,450 |
|
|
|
40,525 |
|
|
|
1,166,898 |
|
Operating Officer, Secretary and Treasurer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Marilyn R. Carlson, D.M.D., M.D. |
|
|
2022 |
|
|
|
402,000 |
|
|
|
90,450 |
|
|
|
44,850 |
|
|
|
25,688 |
|
|
|
562,988 |
|
Chief Medical Officer |
|
|
2021 |
|
|
|
392,000 |
|
|
|
74,088 |
|
|
|
642,450 |
|
|
|
25,601 |
|
|
|
1,134,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
32
Narrative Disclosure to Compensation Tables
Employment Agreements
Employment Agreements with Messrs. Gonyer and D'Onofrio
We have entered into employment agreements with each of Messrs. Gonyer and D’Onofrio. Pursuant to the employment agreements, each executive's base salary is subject to review each year at the sole discretion of the compensation committee. The executives are eligible to earn an annual cash performance bonus under the company’s bonus plan or plans applicable to senior executives. The annual cash performance bonus payable is based on the achievement of individual and/or company performance goals to be determined in good faith by the compensation committee.
Pursuant to each of the employment agreements, if we terminate such officer’s employment without cause (as defined below), such officer resigns for good reason (as defined below) or such officer’s employment is terminated as a result of his or her death or following his or her permanent disability, the executive officer or his or her estate, as applicable, is entitled to the following payments and benefits: (1) fully earned but unpaid base salary through the date of termination at the rate then in effect, plus all other amounts under any compensation plan or practice to which he or she is entitled; (2) a lump sum cash payment in an amount equal to 12 months of his base salary as in effect immediately prior to the date of termination; (3) a lump sum cash payment in an amount equal to his or her bonus (as defined below) for the year in which the termination of his employment occurs, prorated for the period of his service during such year, provided that the officer shall not be entitled to receive such amount in the event that his termination results from his discharge by us without cause prior to a change in control (as defined below); (4) a lump sum cash payment in an amount equal to the cost of the continuation of health benefits for a period of 12 months following date of termination; (5) a lump sum cash payment in an amount equal to the cost of his life insurance premiums for a period of 12 months following the date of termination; (6) solely in the event of the officer’s termination by us without cause or by the officer for good reason, a lump sum cash payment in an amount equal to $15,000 for outplacement service; and (7) the automatic acceleration of the vesting and exercisability of outstanding unvested stock awards as to the number of stock awards that would have vested over the 12-month period following termination had such executive officer remained continuously employed by us during such period. In the event an officer’s termination without cause or resignation for good reason occurs within three months prior to the occurrence of a change in control or within 12 months following a change in control, all of his outstanding unvested stock awards will accelerate and become fully vested on the later of (1) the date of termination or (2) the date of such change in control.
Employment Agreement with Dr. Carlson
We have also entered into an employment agreement with Dr. Carlson. Pursuant to the employment agreement, Dr. Carlson agrees to devote 80% of her productive time and efforts to the performance of her duties as Chief Medical Officer. Pursuant to the employment agreement, Dr. Carlson’s base salary is subject to review each year at the sole discretion of the compensation committee. Dr. Carlson is also eligible to earn an annual cash performance bonus under the company’s bonus plan or plans applicable to senior executives. The annual cash performance bonus payable is based on the achievement of individual and/or Company performance goals to be determined in good faith by the compensation committee. The company also pays Dr. Carlson a taxable monthly payment equal to the monthly premium Dr. Carlson pays for healthcare coverage under Medicare, in an amount not to exceed $2,000 per month.
Pursuant to the employment agreement, if we terminate Dr. Carlson’s employment without cause (as defined below) or Dr. Carlson resigns for good reason (as defined below), Dr. Carlson is entitled to the following payments and benefits: (1) fully earned but unpaid base salary through the date of termination at the rate then in effect, plus all other amounts under any compensation plan or practice to which she is entitled; (2) a lump sum cash payment in an amount equal to her monthly base salary as in effect immediately prior to the date of termination for a period of nine months; (3) a lump sum cash payment in an amount equal to her bonus for the year in which the termination of her employment occurs, prorated for the period of her service during such year, provided that Dr. Carlson shall not be entitled to receive such amount in the event that her termination results from her discharge by the company without cause prior to a change in control (as defined below); and (4) a taxable monthly payment in an amount equal to her monthly healthcare coverage costs under Medicare as in effect immediately prior to the date of termination, in an amount not to exceed $2,000 per month, for a period of nine months.
In the event Dr. Carlson’s termination without cause or resignation for good reason occurs within three months prior to the occurrence of a change in control or within 12 months following a change in control, all of her outstanding unvested stock awards will accelerate and become fully vested on the later of (1) the date of termination or (2) the date of such change in control.
Dr. Carlson’s employment agreement also contains standard confidentiality, non-competition and non-solicitation covenants.
33
Defined Terms for Purposes of Employment Agreements
For purposes of the employment agreements with the named executive officers, “cause” generally means an executive officer’s (1) commission of an act of fraud, embezzlement or dishonesty that has a material adverse impact on us or any successor or affiliate of ours; (2) conviction of, or entry into a plea of “guilty” or “no contest” to, a felony; (3) unauthorized use or disclosure of our confidential information or trade secrets or any successor or affiliate of ours that has a material adverse impact on any such entity; (4) gross negligence, insubordination or material violation of any duty of loyalty, or any other material misconduct on the part of the executive officer; (5) ongoing and repeated failure or refusal to perform or neglect of his or her duties as required by his or her employment agreement, which failure, refusal or neglect continues for 15 days following his or her receipt of written notice from our board of directors stating with specificity the nature of such failure, refusal or neglect; or (6) breach of any material provision of his or her employment agreement.
For purposes of the employment agreements with the named executive officers, “good reason” generally means (1) other than for Dr. Carlson, a change in the executive officer’s status, position or responsibilities that, in the executive officer’s reasonable judgment, represents a substantial and material reduction in the status, position or responsibilities as in effect immediately prior thereto; the assignment to the executive officer of any duties or responsibilities that, in the executive officer’s reasonable judgment, are materially inconsistent with such status, position or responsibilities; or any removal of the executive officer from or failure to reappoint or reelect the executive officer to any of such positions, except in connection with the termination of the executive officer’s employment for cause (as defined above), as a result of his or her permanent disability or death, or by the executive officer other than for good reason; (2) with respect to Dr. Carlson, a material diminution in her authority, duties or responsibilities; (3) a material reduction in the executive officer’s annual base salary, except in connection with a general reduction in the compensation of our or any successor’s or affiliate’s personnel with similar status and responsibilities; (4) our or any successor’s or affiliate’s requirement the executive officer (without the executive officer’s consent) be based at any place outside a 50-mile radius of his or her placement of employment as of the effective date of the employment agreement, except for reasonably required travel for our or any successor’s or affiliate’s business that is not materially greater than such travel requirements prior to the effective date of the employment agreement; (5) any material breach by us or any successor or affiliate of obligations to the executive officer under the employment agreement; (6) other than for Dr. Carlson, any purported termination of the executive officer’s employment or service relationship for cause (as defined above) by us or any successor or affiliate that is not in accordance with the definition of cause; or (7) other than for Dr. Carlson, a change in control (as defined below).
For purposes of the employment agreements with the named executive officers, “bonus” generally means an amount equal to the greater of (1) the executive officer’s target bonus for the fiscal year in which the date of termination occurs; or (2) the bonus awarded to the executive officer for the fiscal year prior to the date of termination (which bonus shall be annualized to the extent the executive officer was not employed for the entire fiscal year prior to the date of termination). If any portion of the bonus awarded to the executive officer consisted of securities or other property, the fair market value thereof shall be determined in good faith by our board of directors.
For purposes of the employment agreements with the named executive officers, a “change in control” generally means:
Executive Compensation Components
Independent Compensation Consultant and Comparable Company Compensation Information
During 2022, our compensation committee retained Anderson Pay Advisors LLC (“APA”) as its independent compensation consultant. APA assisted the compensation committee in confirming a peer group of companies to be used in the compensation setting process. After review and consultation with APA, the compensation committee determined that APA is independent and
34
there was no conflict of interest resulting from retaining APA during fiscal year 2022. In reaching these conclusions, the compensation committee considered the factors set forth in Exchange Act Rule 10C-1 and Nasdaq listing standards.
For purposes of determining 2022 executive compensation, a peer group of 23 life sciences companies in similar phases of development as we are and with the following characteristics was selected based on the following parameters and not on the basis of executive compensation levels:
The 2022 peer group consisted of the following companies:
AcelRx Pharmaceuticals, Inc. |
|
Evofem Biosciences, Inc |
Adamis Pharmaceuticals, Inc |
|
MEI Pharma, Inc. |
Adamis Pharmaceuticals Corporation |
|
Neos Therapeutics, Inc |
Agile Therapeutics, Inc. |
|
Paratek Pharmaceuticals, Inc. |
AMAG Pharmaceuticals, Inc |
|
Progenics Pharmaceuticals |
Aquestive Therapeutics, Inc. |
|
Rigel Pharmaceuticals, Inc |
Assertio Therapeutics, Inc. |
|
Sesen Bio, Inc. |
BioDelivery Sciences International |
|
Trevena, Inc. |
Collegium Pharmaceutical, Inc |
|
Vanda Pharmaceuticals, Inc |
DURECT Corporation |
|
Verastem, Inc. |
Dynavax Technologies Corporation |
|
Verrica Pharmaceuticals Inc. |
Eiger Biopharmaceuticals, Inc. |
|
|
|
|
|
Although our compensation committee reviewed the foregoing comparable company data in connection with its determinations of the 2022 base salaries, target bonuses and equity awards for our named executive officers, our committee did not attempt to set those compensation levels or awards at a certain target percentile with respect to the comparable company data or otherwise rely entirely on that data to determine named executive officer compensation. Instead, as described above and consistent with past practice, the compensation committee members relied on their judgment and experience in setting those compensation levels and making those awards.
We expect that the compensation committee will continue to review comparable company data in connection with setting the compensation we offer our named executive officers to help ensure that our compensation programs are competitive and fair.
Base Salaries
In general, base salaries for our named executive officers are initially established through arm’s length negotiation at the time the executive is hired, taking into account such executive’s qualifications, experience and prior salary. Base salaries of our named executive officers are approved and reviewed annually by our compensation committee and adjustments to base salaries are based on the scope of an executive’s responsibilities, individual contribution, prior experience and sustained performance. Decisions regarding salary increases may take into account an executive officer’s current salary, equity ownership, and the amounts paid to an executive officer’s peers inside our company by conducting an internal analysis, which compares the pay of an executive officer to other members of the management team. Base salaries are also reviewed in the case of promotions or other significant changes in responsibility. Base salaries are not automatically increased if the board of directors and compensation committee believe that other elements of the named executive officer’s compensation are more appropriate in light of our stated objectives. This strategy is consistent with our intent of offering compensation that is both cost-effective, competitive and contingent on the achievement of performance objectives.
The actual base salaries paid to all of our named executive officers for 2022 are set forth in the “Summary Compensation Table” above.
In January 2022, our compensation committee approved base salary increases for 2022 for Messrs. Gonyer and D’Onofrio and Dr. Carlson to $570,000, $417,000 and $402,000, respectively. These base salary increases represented adjustments of approximately 3.6%, 2.5%, and 2.5%, respectively.
In February 2023, our compensation committee approved base salary increases for 2023 for Messrs. Gonyer and D’Onofrio and Dr. Carlson to $595,000, $450,000, and $420,000, respectively. These base salary increases represented adjustments of approximately 4.4 %, 7.9% and 4.5%, respectively.
The base salaries of our named executive officers continue to be below the median level of similarly-situated executives for our peer group of companies.
35
Annual Cash Performance Bonuses
Each named executive officer is also eligible for a performance bonus based upon the achievement of certain corporate performance goals and objectives approved by our compensation committee and board of directors.
Bonuses are set based on a percentage of the executive’s base salary as of the end of the bonus year and are expected to be paid out in the first quarter of the following year. The target levels for 2022 executive bonuses were as follows: 55% for our Chief Executive Officer, 45% for our President and Chief Operating Officer, and 45% for our Chief Medical Officer. The executive bonuses are 100% based on the achievement of corporate objectives that are set each year by the board of directors and the compensation committee. All final bonus payments to our named executive officers are determined by our compensation committee. The actual bonuses awarded in any year, if any, may be more or less than the target, depending on individual performance and the achievement of corporate objectives and may also vary based on other factors at the discretion of the compensation committee.
For 2022, the corporate performance objectives for our named executive officers were related to commercial development and corporate financial objectives. These performance objectives and areas of emphasis were used as a guide by the compensation committee and board of directors in determining overall corporate performance for these executives as they represented those areas in which they were expected to focus their efforts during the year. Both qualitative and quantitative guidelines were established for purposes of evaluating performance relating to these corporate objectives during 2022. In coming to its final determination regarding the overall corporate achievement for 2022, our compensation committee noted our commercial and financial efforts, including (1) commercial milestone attainment; and (2) maintenance of adequate cash resources to continue operations and support commercialization activities. In addition, the compensation committee considered our cash management efforts which included managing cash and expenditures within budgeted levels. Based on its review of our overall performance relative to our corporate objectives, the compensation committee determined to award a corporate achievement level of 50% for our named executive officers.
The overall achievement level was then used to determine each named executive officer’s bonus. The bonuses paid to our named executive officers for 2022 are set forth in the “Summary Compensation Table” above.
Equity Compensation
The goals of our long-term, equity-based incentive awards are to align the interests of our named executive officers and other employees, non-employee directors and consultants with the interests of our stockholders. Because vesting is based on continued employment, our equity-based incentives also encourage the retention of our named executive officers through the vesting period of the awards. In determining the size of the long-term equity incentives to be awarded to our named executive officers, we take into account a number of internal factors, such as the relative job scope, the value of existing long-term incentive awards, individual performance history, prior contributions to us and the size of prior grants. Our compensation committee reviews competitive market data prepared by APA in connection with its grant of long-term equity incentive awards to the named executive officers, but such awards are not determined by reference to any specific target level of compensation or benchmarking. Based upon these factors, the compensation committee determines the size of the long-term equity incentives at levels it considers appropriate to create a meaningful opportunity for reward predicated on the creation of long-term stockholder value. We have not granted any equity awards other than stock options to date.
To reward and retain our named executive officers in a manner that best aligns employees’ interests with stockholders’ interests, we use stock options as the primary incentive vehicles for long-term compensation. We believe that stock options are an effective tool for meeting our compensation goal of increasing long-term stockholder value by tying the value of the stock options to our future performance. Because employees are able to profit from stock options only if our stock price increases relative to the stock option’s exercise price, we believe stock options provide meaningful incentives to employees to achieve increases in the value of our stock over time.
The exercise price of each stock option grant is the fair market value of our common stock on the grant date, as determined by our board of directors from time to time. Stock option awards granted to our named executive officers generally vest on a monthly basis over a four-year period. From time to time, our compensation committee may, however, determine that a different vesting schedule is appropriate.
In February 2022, our named executive officers were granted stock options to purchase shares of our common stock. Specifically, Messrs. Gonyer and D’Onofrio and Dr. Carlson were granted options to purchase 14,583, 8,333, and 8,333 shares of our common stock, respectively. These options vest on a monthly basis over a four-year period commencing January 1, 2022.
In February 2023, our named executive officers were granted stock options to purchase shares of our common stock. Specifically, Messrs. Gonyer and D’Onofrio and Dr. Carlson were granted options to purchase 30,000, 25,000, and 15,000 shares of our common stock, respectively. The options for Mr. Gonyer and Dr. Carlson vest on a monthly basis over a four-year period commencing January 1, 2023, while the options for Mr. D'Onofrio vest on the four-year anniversary of the grant date, subject to the reporting person’s continued service to the issuer through each such vesting date.
We have had no program, plan or practice pertaining to the timing of stock option grants to named executive officers coinciding with the release of material non-public information. Stock options granted to our named executive officers may be
36
subject to accelerated vesting in certain circumstance. For additional discussion, please see “Employment Agreements” above and “Termination and Change in Control Benefits” below.
Other Elements of Compensation
Retirement Plans
We currently maintain a 401(k) retirement savings plan that allows eligible employees to contribute a portion of their compensation, within limits prescribed by the Internal Revenue Code, on a pre-tax basis through contributions to the plan. Our named executive officers are eligible to participate in the 401(k) plan. We believe that providing a vehicle for tax-deferred retirement savings through our 401(k) plan adds to the overall desirability of our executive compensation package and further incentivizes our named executive officers in accordance with our compensation policies.
Employee Benefits and Perquisites
Our named executive officers are eligible to participate in our health and welfare plans. We reimburse Dr. Carlson for her health care premiums and pay for the health and welfare benefits for our other named executive officers and our other four employees. We do not provide our named executive officers with any other significant perquisites or other personal benefits.
Employee Stock Purchase Plan
We maintain an employee stock purchase plan, or ESPP, that allows eligible employees to purchase our common stock at a discount, subject to applicable limits as set forth in the ESPP, through payroll deductions of up to 20% of their eligible compensation. All of our employees participate in the ESPP on the same terms and conditions.
No Tax Gross-Ups
We do not make gross-up payments to cover our named executive officers’ personal income taxes that may pertain to any of the compensation paid or provided by our company.
Termination and Change in Control Benefits
Our named executive officers may become entitled to certain benefits or enhanced benefits in connection with certain qualifying terminations of employment and/or a change in control of our company. Each of our named executive officers’ employment agreements entitles them to severance in the event of their termination without cause or their resignation for good reason (and, for Mr. Gonyer and Mr. D'Onofrio, upon termination by reason of death or disability). In addition, each named executive officer is entitled to accelerated vesting of all outstanding equity awards upon his or her termination without cause or their resignation for good reason within three months prior to the occurrence of a change in control or within 12 months following a change in control of our company. In addition, the occurrence of a change in control constitutes “good reason” for Mr. Gonyer's and Mr. D'Onofrio's resignation under their employment agreements. For additional discussion, please see “Employment Agreements” above.
37
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth specified information concerning unexercised stock options and unvested stock awards for each of the named executive officers outstanding as of December 31, 2022:
|
|
Option Awards |
||||||||||||||
Name |
|
Grant |
|
Number of Securities Underlying Unexercised Options (#) Exercisable(1)(2)(3)(4) |
|
|
Number of Securities Underlying Unexercised Options (#) Unexercisable(1)(2)(3)(4) |
|
|
Option |
|
|
Option Expiration Date |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
David A. Gonyer, R.Ph. |
|
6/17/2019 |
|
|
4,648 |
|
|
|
664 |
|
|
|
7.44 |
|
|
12/1/2023 |
|
|
6/17/2019 |
|
|
3,864 |
|
|
|
553 |
|
|
|
7.44 |
|
|
3/5/2025 |
|
|
6/17/2019 |
|
|
3,281 |
|
|
|
469 |
|
|
|
7.44 |
|
|
1/27/2026 |
|
|
6/17/2019 |
|
|
12,304 |
|
|
|
1,758 |
|
|
|
7.44 |
|
|
1/25/2027 |
|
|
6/17/2019 |
|
|
12,304 |
|
|
|
1,758 |
|
|
|
7.44 |
|
|
2/7/2028 |
|
|
6/17/2019 |
|
|
12,304 |
|
|
|
1,758 |
|
|
|
7.44 |
|
|
2/5/2029 |
|
|
2/28/2020 |
|
|
18,336 |
|
|
|
8,747 |
|
|
|
14.76 |
|
|
2/27/2030 |
|
|
1/27/2021 |
|
|
16,570 |
|
|
|
18,013 |
|
|
|
32.16 |
|
|
1/26/2031 |
|
|
2/2/2022 |
|
|
3,341 |
|
|
|
11,242 |
|
|
|
6.60 |
|
|
2/1/2032 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Matthew J. D'Onofrio |
|
6/17/2019 |
|
|
3,554 |
|
|
|
508 |
|
|
|
7.44 |
|
|
12/1/2023 |
|
|
6/17/2019 |
|
|
3,864 |
|
|
|
553 |
|
|
|
7.44 |
|
|
3/5/2025 |
|
|
6/17/2019 |
|
|
2,870 |
|
|
|
411 |
|
|
|
7.44 |
|
|
1/27/2026 |
|
|
6/17/2019 |
|
|
8,203 |
|
|
|
1,172 |
|
|
|
7.44 |
|
|
1/25/2027 |
|
|
6/17/2019 |
|
|
8,203 |
|
|
|
1,172 |
|
|
|
7.44 |
|
|
2/7/2028 |
|
|
6/17/2019 |
|
|
8,203 |
|
|
|
1,172 |
|
|
|
7.44 |
|
|
2/5/2029 |
|
|
2/28/2020 |
|
|
11,284 |
|
|
|
5,382 |
|
|
|
14.76 |
|
|
2/27/2030 |
|
|
1/27/2021 |
|
|
11,978 |
|
|
|
13,022 |
|
|
|
32.16 |
|
|
1/26/2031 |
|
|
2/2/2022 |
|
|
1,909 |
|
|
|
6,424 |
|
|
|
6.60 |
|
|
2/1/2032 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Marilyn R. Carlson |
|
6/17/2019 |
|
|
2,734 |
|
|
|
391 |
|
|
|
7.44 |
|
|
12/1/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
D.M.D., M.D. |
|
6/17/2019 |
|
|
4,101 |
|
|
|
586 |
|
|
|
7.44 |
|
|
3/5/2025 |
|
|
6/17/2019 |
|
|
1,845 |
|
|
|
264 |
|
|
|
7.44 |
|
|
1/27/2026 |
|
|
6/17/2019 |
|
|
5,468 |
|
|
|
782 |
|
|
|
7.44 |
|
|
1/25/2027 |
|
|
6/17/2019 |
|
|
6,835 |
|
|
|
977 |
|
|
|
7.44 |
|
|
2/7/2028 |
|
|
6/17/2019 |
|
|
6,835 |
|
|
|
977 |
|
|
|
7.44 |
|
|
2/5/2029 |
|
|
2/28/2020 |
|
|
11,284 |
|
|
|
5,382 |
|
|
|
14.76 |
|
|
2/27/2030 |
|
|
1/27/2021 |
|
|
11,978 |
|
|
|
13,022 |
|
|
|
32.16 |
|
|
1/26/2031 |
|
|
2/2/2022 |
|
|
1,909 |
|
|
|
6,424 |
|
|
|
6.60 |
|
|
2/1/2032 |
38
Pay versus Performance Table
The following table sets forth information concerning the compensation of our NEOs for each of the fiscal years ended December 31, 2021 and 2022, and our financial performance for each such fiscal year:
|
|
|||||||||||||||||
|
|
|||||||||||||||||
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
Compensation |
|
Average Summary |
|
Average Compensation |
|
Value of Initial Fixed $100 |
|
|
|
||||||
|
Summary Compensation |
|
Actually Paid |
|
Compensation Table Total |
|
Actually Paid |
|
Investment Based on |
|
|
|
||||||
Fiscal Year |
Table Total for PEO |
|
to PEO (1) |
|
for Non-PEO NEOs |
|
to Non-PEO NEOs (1) |
|
Total Shareholder Return |
|
Net Income (Loss) |
|
||||||
(a) |
(b) |
|
(c) |
|
(d) |
|
(e) |
|
(f) |
|
(h) |
|
||||||
2022 |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
|||||
2021 |
$ |
|
$ |
( |
) |
$ |
|
$ |
( |
) |
$ |
|
$ |
( |
) |
|||
Years |
PEO |
Non-PEO NEOs |
|
|
|||
2021 and 2022 |
Matthew D'Onofrio and Marilyn Carlson |
|
39
|
2021 |
|
2022 |
|
||||||||
Adjustments |
PEO |
|
Average Non-PEO NEOs |
|
PEO |
|
Average Non-PEO NEOs |
|
||||
Deduction for Amounts Reported under the "Stock Awards" and "Option Awards" Columns in the Summary Compensation Table for Applicable FY |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Remain Unvested as of Applicable FY End, Determined as of Applicable FY End |
$ |
|
$ |
|
$ |
|
$ |
|
||||
Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Vested during Applicable FY, determined as of Vesting Date |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
Increase/deduction for Awards Granted during Prior FY that were Outstanding and Unvested as of Applicable FY End, determined based on change in ASC 718 Fair Value from Prior FY End to Applicable FY End |
$ |
|
$ |
|
$ |
|
$ |
|
||||
Increase/deduction for Awards Granted during Prior FY that Vested During Applicable FY, determined based on change in ASC 718 Fair Value from Prior FY End to Vesting Date |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
Total Adjustments |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
Fair value or change in fair value, as applicable, of equity awards in the “Compensation Actually Paid” columns was determined by reference to a Black Scholes value as of the applicable year-end or vesting date(s), determined based on the same methodology as used to determine grant date fair value but using the closing stock price on the applicable revaluation date as the current market price and with an expected life set equal to the remaining life of the award in the case of underwater stock options and, in the case of in the money options, an expected life equal to the original ratio of expected life relative to the ten year contractual life multiplied times the remaining life as of the applicable revaluation date, and in all cases based on volatility and risk free rates determined as of the revaluation date based on the expected life period and based on an expected dividend rate of 0%. For additional information on the assumptions used to calculate the valuation of the awards, see the Notes to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 21, 2023, and prior fiscal years.
40
Relationship Between Financial Performance Measures
The graph below compares the compensation actually paid to our PEO and the average of the compensation actually paid to our remaining NEOs, with (i)
EVOK TSR vs. Compensation Actually Paid
41
Net Income vs. Compensation Actually Paid
Equity Compensation Plan Information
The following table summarizes securities available under our equity compensation plans as of December 31, 2022:
Plan Category |
|
Number of Securities to be |
|
|
Weighted Average |
|
|
Number of Securities Remaining |
|
|||
|
|
(a) |
|
|
(b) |
|
|
(c) |
|
|||
Equity compensation plans approved by |
|
|
491,851 |
|
|
$ |
19.11 |
|
|
|
183,545 |
|
Equity compensation plans not approved |
|
|
- |
|
|
|
|
|
|
- |
|
|
Total |
|
|
491,851 |
|
|
|
|
|
|
183,545 |
|
|
|
|
|
|
|
|
|
|
|
|
|||
42
The following includes a summary of transactions since January 1, 2022 to which we have been a party in which the amount involved exceeded or will exceed $120,000, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest. We also describe below certain other transactions with our directors, executive officers and stockholders. We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, from unaffiliated third parties.
Employment Agreements
We have entered into employment agreements with the following executive officers: David A. Gonyer, R.Ph., our Chief Executive Officer; Matthew J. D’Onofrio, our President, Chief Operating Officer, Secretary and Treasurer and Marilyn R. Carlson, D.M.D., M.D., our Chief Medical Officer. For more information regarding these agreements, see “Executive Compensation and Other Information—Narrative Disclosure to Compensation Table―Employment Agreements” above.
Indemnification Agreements
Our amended and restated certificate of incorporation and our amended and restated bylaws provide that we will indemnify each of our directors and officers to the fullest extent permitted by the Delaware General Corporation Law. Further, we have entered into indemnification agreements with each of our directors and officers, and we have purchased a policy of directors’ and officers’ liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment under certain circumstances.
Stock Option Grants to Executive Officers and Directors
We have granted stock options to our executive officers and certain of our directors as more fully described in the section “Executive Compensation and Other Information—Narrative Disclosure to Compensation Table—Equity Compensation” above.
Other Transactions with Related Parties
None.
Policies and Procedures for Related Person Transactions
Pursuant to our audit committee charter, our audit committee is responsible for reviewing and approving all transactions with related parties which are required to be reported under applicable SEC regulations, other than compensation-related matters. We have not adopted written procedures for review of, or standards for approval of, these transactions, but instead our audit committee intends to review such transactions on a case-by-case basis.
STOCKHOLDER PROPOSALS
Proposals from stockholders intended to be presented at our annual meeting of stockholders to be held in 2024 must be received by us no later than December 2, 2023, which is 120 days prior to the first anniversary of the mailing date of this proxy, in order to be included in our proxy statement and form of proxy relating to that meeting. In addition, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 11, 2024, which is 60 days prior to the one year anniversary of the 2023 annual meeting. These proposals must comply with the requirements as to form and substance established by the SEC for such proposals in order to be included in the proxy statement. In addition, our amended and restated bylaws establish an advance notice procedure with regard to certain matters, including stockholder proposals not included in our proxy statement and director nominations, to be brought before an annual meeting of stockholders. In general, notice of the proposal or nomination must be received at our principal executive offices not less than 90 calendar days before nor more than 120 calendar days before the one-year anniversary of the date of the previous year’s annual meeting of stockholders. Therefore, to be presented at our 2024 annual meeting of stockholders, such a proposal must be received by us no earlier than January 11, 2024 and no later than February 10, 2024. However, if the date of the annual meeting is more than 30 days earlier or more than 60 days later than such anniversary date, notice must be received not less than 90 calendar days before nor more than 120 calendar days in advance of such annual meeting, or if later, ten calendar days following the date on which public announcement of the date of the meeting is first made. If the stockholder fails to give notice by these dates, then the persons named as proxies in the proxies solicited by the board of directors for the 2024 annual meeting may exercise discretionary voting power regarding any such proposal or nomination. Stockholders are advised to review our amended and restated bylaws which also specify requirements as to the form and content of a stockholder’s notice.
ANNUAL REPORT
Our annual report for the fiscal year ended December 31, 2022 will be mailed to stockholders of record on or about , 2023. Our annual report does not constitute, and should not be considered, a part of this proxy solicitation material.
Any person who was a beneficial owner of our common stock on the record date may request a copy of our annual report, and it will be furnished without charge upon receipt of a written request identifying the person so requesting a
43
report as a stockholder of our company at such date. Requests should be directed to Evoke Pharma, Inc., 420 Stevens Avenue, Suite 370, Solana Beach, California, Attention: Corporate Secretary.
STOCKHOLDERS SHARING THE SAME ADDRESS
The rules promulgated by the SEC permit companies, brokers, banks or other intermediaries to deliver a single copy of proxy materials, or, where applicable, a Notice of Internet Availability of Proxy Materials, to households at which two or more stockholders reside. Each stockholder, however, still receives a separate proxy card if he or she receives paper copies. This practice, known as “householding,” is designed to reduce duplicate mailings and save significant printing and postage costs as well as natural resources. Stockholders sharing an address who have been previously notified by their broker, bank or other intermediary and have consented to householding will receive only one copy of our proxy statement and annual report or Notice of Internet Availability of Proxy Materials. If you would like to opt out of this practice for future mailings and receive a separate proxy statement and annual report or Notice of Internet Availability of Proxy Materials for each stockholder sharing the same address, please contact your broker, bank or other intermediary. You may also obtain a separate proxy statement or annual report or Notice of Internet Availability of Proxy Materials without charge by sending a written request to Evoke Pharma, Inc., 420 Stevens Avenue, Suite 370, Solana Beach, California 92075, Attention: Corporate Secretary, or by calling (858) 345-1494. We will promptly send additional copies of the proxy statement or annual report or Notice of Internet Availability of Proxy Materials upon receipt of such request. Stockholders sharing an address that are receiving multiple copies of the proxy statement or annual report or Notice of Internet Availability of Proxy Materials can request delivery of a single copy of the proxy statement or annual report or Notice of Internet Availability of Proxy Materials by contacting their broker, bank or other intermediary or sending a written request to Evoke Pharma, Inc. at the address above or by calling (858) 345-1494.
44
OTHER MATTERS
We do not know of any business other than that described in this proxy statement that will be presented for consideration or action by the stockholders at the annual meeting. If, however, any other business is properly brought before the meeting, shares represented by proxies will be voted in accordance with the best judgment of the persons named in the proxies or their substitutes. All stockholders are urged to complete, sign and return the accompanying proxy card in the enclosed envelope.
|
By Order of the Board of Directors, |
|
David A. Gonyer, R.Ph. Chief Executive Officer and Director |
|
Solana Beach, CA
March 29, 2023
45
Appendix A
EVOKE PHARMA, INC.
2013 EQUITY INCENTIVE AWARD PLAN
(As Amended and Restated Effective May 10, 2023)
PURPOSE
The purpose of the Evoke Pharma, Inc. 2013 Equity Incentive Award Plan (as it may be amended or restated from time to time, the “Plan”) is to promote the success and enhance the value of Evoke Pharma, Inc. (the “Company”) by linking the individual interests of the members of the Board, Employees, and Consultants to those of Company stockholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to Company stockholders. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees, and Consultants upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent. The Plan provides a mechanism through which the Company may grant equity and equity-based awards as well as cash bonus and other cash awards to Eligible Individuals. This Plan constitutes an amendment and restatement of the Evoke Pharma, Inc. 2013 Equity Incentive Award Plan adopted by the Board on February 7, 2018, and by the stockholders on April 26, 2018 (the “Prior Plan”).
Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates. Masculine, feminine and neuter pronouns are used interchangeably and each comprehends the others.
46
47
Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any portion of an Award that provides for the deferral of compensation and is subject to Section 409A of the Code, the transaction or event described in subsection (a), (b), (c) or (d) with respect to such Award (or portion thereof) must also constitute a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5) to the extent required by Section 409A.
The Committee shall have full and final authority to determine conclusively whether a Change in Control of the Company has occurred pursuant to the above definition, and the date of the occurrence of such Change in Control and any incidental matters relating thereto; provided that any exercise of authority in conjunction with a determination of whether a Change in Control is a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation.
48
49
50
51
The Administrator, in its sole discretion, shall determine the effect of all matters and questions relating to any Termination of Service, including, without limitation, the question of whether a Termination of Service resulted from a discharge for cause and all questions of whether particular leaves of absence constitute a Termination of Service; provided, however, that, with respect to Incentive Stock Options, unless the Administrator otherwise provides in the terms of the Program, the Award Agreement or otherwise, or as otherwise required by Applicable Law, a leave of absence, change in status from an employee to an independent contractor or other change in the employee-employer relationship shall constitute a Termination of Service only if, and to the extent that, such leave of absence, change in status or other change interrupts employment for the purposes of Section 422(a)(2) of the Code and the then-applicable regulations and revenue rulings under said Section. For purposes of the Plan, a Holder’s employee-employer relationship or consultancy relationship shall be deemed to be terminated in the event that the Affiliate employing or contracting with such Holder ceases to remain an Affiliate following any merger, sale of stock or other corporate transaction or event (including, without limitation, a spin-off).
52
53
Notwithstanding any other provision of the Plan or any Award, with respect to any Award which is intended to continue to qualify as Performance-Based Compensation (as described in Section 162(m)(4)(C) of the Code prior to its repeal) (or which was not subject to the deduction limitation of Section 162(m) of the Code) pursuant to the transition relief rules in the Tax Cuts and Jobs Act of 2017, to the extent any of the provisions of the Plan or any Award (or any amendments hereto pursuant to this amendment and restatement of the Plan) would cause such Awards to fail to so qualify or be so exempt, any such provisions shall not apply to such Awards to the extent necessary to ensure the such Awards continue to so qualify or be so exempt. In addition, any Award which is intended to continue to qualify as Performance-Based Compensation (as described in Section 162(m)(4)(C) of the Code prior to its repeal) (or to otherwise not be subject to the deduction limitation of Section 162(m) of the Code) pursuant to the transition relief rules in the Tax Cuts and Jobs Act of 2017 shall be subject to any additional limitations as the Administrator determines necessary for such Award to continue to so qualify or be so exempt. To the extent permitted by Applicable Law, and the Plan and any such Awards shall be deemed amended to the extent necessary to conform to such requirements.
54
55
56
57
PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, STOCK PAYMENTS
58
STOCK APPRECIATION RIGHTS
59
ADditional terms of awards
60
61
ADMINISTRATION
62
63
64
65
66
67
68
Appendix B
EVOKE PHARMA, INC.
2013 EMPLOYEE STOCK PURCHASE PLAN
(As Amended and Restated Effective May 10, 2023)
The purposes of this Evoke Pharma, Inc. 2013 Employee Stock Purchase Plan (as it may be amended or restated from time to time, the “Plan”) are to assist Eligible Employees of Evoke Pharma, Inc., a Delaware corporation (the “Company”), and its Designated Subsidiaries in acquiring a stock ownership interest in the Company pursuant to a plan which is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423(b) of the Code, and to help Eligible Employees provide for their future security and to encourage them to remain in the employment of the Company and its Designated Subsidiaries.
Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates. Masculine, feminine and neuter pronouns are used interchangeably and each comprehends the others.
69
The Administrator shall have full and final authority to determine conclusively whether a Change in Control of the Company has occurred pursuant to the above definition, and the date of the occurrence of such Change in Control and any incidental matters relating thereto.
70
71
72
73
74
75
76
77
Such modifications or amendments shall not require stockholder approval or the consent of any Participant.
This amended and restated Plan shall be effective on the date it is approved by the Company’s stockholders (the “Restatement Effective Date”). The amended and restated Plan shall be subject to approval of the Plan by the stockholders of the Company within twelve months following the date of the Board’s initial adoption of this amended and restated Plan. In the event this amended and restated Plan shall not have been approved by the stockholders of the Company prior to the end of said 12-month period, it will not become effective and the Prior Plan will continue in full force and effect in accordance with its terms. No shares of Common Stock may be issued under this amended and restated Plan prior to such stockholder approval. The Plan shall be in effect until terminated under Article 9. No rights may be granted under the Plan during any period of suspension of the Plan or after termination of the Plan.
78
79
80
Appendix C
Amendment to Amended and Restated Certificate of Incorporation to Update the Exculpation Provision to Include Certain Officers of the Company as Permitted by a Recent Amendment to Delaware Law
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
EVOKE PHARMA PHARMACEUTICALS, INC.
Evoke Pharma, Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify:
1. The name of the Corporation is Evoke Pharma, Inc. The original Certificate of Incorporation of Evoke Pharma, Inc. was filed with the Secretary of State of Delaware on January 29, 2007.
2. That the Board of Directors of said Corporation duly adopted resolutions setting forth a proposed amendment of the Amended and Restated Certificate of Incorporation of the Corporation (the “Certificate”), declaring said amendment to be advisable and directing its officers to submit said amendment to the stockholders of the Corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows:
THEREFORE, BE IT RESOLVED, that Section (1) of Article EIGHTH of the Certificate is hereby amended to read in its entirety as follows:
EIGHTH: (1) To the maximum extent permitted by the DGCL, as the same exists or as may hereafter be amended, a director or officer of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer. If the DGCL is amended after approval by the stockholders of this Article EIGHTH to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended.
3. That thereafter, pursuant to a resolution of the Board of Directors, the stockholders gave their approval of said amendment at a meeting of stockholders in accordance with the provisions of Section 211 of the DGCL.
4. This Certificate of Amendment was duly adopted in accordance with Section 242 of the DGCL. The Board of Directors of the Corporation duly adopted resolutions setting forth and declaring advisable this Certificate of Amendment and directed that such amendment be considered by the stockholders of the Corporation. An annual meeting of stockholders was duly called upon notice in accordance with Section 222 of the DGCL and held on May 10, 2023, at which meeting the necessary number of shares were voted in favor of such amendment. The stockholders of the Corporation duly adopted this Certificate of Amendment.
5. This Certificate of Amendment shall become effective upon filing with the Secretary of Statement of the State of Delaware.
IN WITNESS WHEREOF, this Certificate of Amendment of Restated Certificate of Incorporation has been executed as of this day of , 2023.
Evoke Pharma, Inc. A Delaware corporation |
|
By: |
Name: |
Title: |
81
Evoke Pharma, Inc. Important Notice Regarding the Availability of Proxy Materials Stockholders Meeting to be held on May 10, 2023 For Stockholders of record as of March 13, 2023 When requesting via the Internet or telephone you will need the 12 digit control number located in the shaded box above. * If requesting material by e-mail, please send a blank e-mail with the 12 digit control number (located above) in the subject line. No other requests, instructions OR other inquiries should be included with your e-mail requesting material. Evoke Pharma, Inc. Meeting Type: Date: Time: Place: Annual Meeting of Stockholders Wednesday, May 10, 2023 8:30 AM, Pacific Time Annual meeting to be held live via the Internet Please visit www.proxydocs.com/EVOK for more details. You must register to attend and/or vote at the meeting online at www.proxydocs.com/EVOK SEE REVERSE FOR FULL AGENDA INTERNET www.investorelections.com/EVOK TELEPHONE (866) 648-8133 * E-MAIL paper@investorelections.com To order paper materials, use one of the following methods. Proxy materials available to view or receive: NOTICE AND PROXY STATEMENT ANNUAL REPORT For a convenient way to view proxy materials and VOTE go to www.proxydocs.com/EVOK Have the 12 digit control number located in the shaded box above available when you access the website and follow the instructions. If you want to receive a paper or e-mail copy of the proxy materials, you must request one. There is no charge to you for requesting a copy. In order to receive a paper package in time for this year's meeting, you must make this request on or before April 28, 2023. This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. This is not a ballot. You cannot use this notice to vote your shares. We encourage you to access and review all of the important information contained in the proxy materials before voting. To view the proxy materials, and to obtain directions to attend the meeting, go to: www.proxydocs.com/EVOK To vote your proxy on this site, before or during the meeting you will need the 12 digit control number in the box below. Under United States Securities and Exchange Commission rules, proxy materials do not have to be delivered in paper. Proxy materials can be distributed by making them available on the internet. P.O. BOX 8016, CARY, NC 27512-9903
Evoke Pharma, Inc. Annual Meeting of Stockholders PROPOSAL 1. To elect two directors for a three-year term to expire at the 2026 annual meeting of stockholders; 1.01 Kenneth J. Widder, M.D. 1.02 David A. Gonyer, R.Ph. 2. To consider and vote upon the ratification of the selection of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023; 3. To consider and vote upon, on an advisory basis, the compensation of our named executive officers as disclosed in the proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission; 4. To consider and vote upon the approval of the amendment and restatement of our 2013 Equity Incentive Award Plan; 5. To consider and vote upon the approval of the amendment and restatement of our 2013 Employee Stock Purchase Plan; 6. To consider and vote upon the approval of an amendment to the Company's Amended and Restated Certificate of Incorporation to increase the authorized number of shares of common stock from 50,000,000 to 100,000,000; 7. To consider and vote upon the approval of an amendment to the Company's Amended and Restated Certificate of Incorporation to update the exculpation provision to include certain officers of the Company as permitted by a recent amendment to Delaware law; and 8. To transact such other business as may be properly brought before the meeting or any adjournment or postponement thereof. THE BOARD OF DIRECTORS RECOMMENDS A VOTE: FOR ON PROPOSALS 1, 2, 3, 4, 5, 6 AND 7
YOUR VOTE IS IMPORTANT! PLEASE VOTE BY: Evoke Pharma, Inc. Annual Meeting of Stockholders For Stockholders of record as of March 13, 2023 TIME: Wednesday, May 10, 2023 8:30 AM, Pacific Time PLACE: Annual meeting to be held live via the Internet Please visit www.proxydocs.com/EVOK for more details. This proxy is being solicited on behalf of the Board of Directors The undersigned hereby appoints David A. Gonyer R.Ph. and Matthew J. D’Onofrio (the "Named Proxies"), and each or either of them, as the true and lawful attorneys of the undersigned, with full power of substitution and revocation, and authorizes them, and each of them, to vote all the shares of capital stock of Evoke Pharma, Inc. which the undersigned is entitled to vote at said meeting and any adjournment thereof upon the matters specified and upon such other matters as may be properly brought before the meeting or any adjournment thereof, conferring authority upon such true and lawful attorneys to vote in their discretion on such other matters as may properly come before the meeting and revoking any proxy heretofore given. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, SHARES WILL BE VOTED IDENTICAL TO THE BOARD OF DIRECTORS RECOMMENDATION. This proxy, when properly executed, will be voted in the manner directed herein. In their discretion, the Named Proxies are authorized to vote upon such other matters that may properly come before the meeting or any adjournment or postponement thereof. If you hold shares in any Employee Stock Purchase Plan, or 401(k) savings plan of the Company (the "Plans"), then this proxy card, when signed and returned, or your telephone or Internet proxy, will constitute voting instructions on matters properly coming before the Annual Meeting and at any adjournments or postponements thereof in accordance with the instructions given herein to the trustee for shares held in any of the Plans. Shares in each of the Plans for which voting instructions are not received by 5:00 PM EST on May 8, 2023, or if no choice is specified, will be voted by an independent fiduciary. You are encouraged to specify your choice by marking the appropriate box (SEE REVERSE SIDE) but you need not mark any box if you wish to vote in accordance with the Board of Directors’ recommendation. The Named Proxies cannot vote your shares unless you sign (on the reverse side) and return this card. PLEASE BE SURE TO SIGN AND DATE THIS PROXY CARD AND MARK ON THE REVERSE SIDE P.O. BOX 8016, CARY, NC 27512-9903 INTERNET Go To: www.proxypush.com/EVOK • Cast your vote online • Have your Proxy Card ready • Follow the simple instructions to record your vote PHONE Call 1-855-686-4811 • Use any touch-tone telephone • Have your Proxy Card ready • Follow the simple recorded instructions MAIL • Mark, sign and date your Proxy Card • Fold and return your Proxy Card in the postage-paid envelope provided You must register to attend and/or vote at the meeting online at www.proxydocs.com/EVOK
Evoke Pharma, Inc. Annual Meeting of Stockholders THE BOARD OF DIRECTORS RECOMMENDS A VOTE: FOR ON PROPOSALS 1, 2, 3, 4, 5, 6 AND 7 PROPOSAL YOUR VOTE BOARD OF DIRECTORS RECOMMENDS 1. To elect two directors for a three-year term to expire at the 2026 annual meeting of stockholders; FOR WITHHOLD 1.01 Kenneth J. Widder, M.D. #P2# #P2# FOR 1.02 David A. Gonyer, R.Ph. #P3# #P3# FOR FOR AGAINST ABSTAIN 2. To consider and vote upon the ratification of the selection of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023; #P4# #P4# #P4# FOR 3. To consider and vote upon, on an advisory basis, the compensation of our named executive officers as disclosed in the proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission; #P5# #P5# #P5# FOR 4. To consider and vote upon the approval of the amendment and restatement of our 2013 Equity Incentive Award Plan; #P6# #P6# #P6# FOR 5. To consider and vote upon the approval of the amendment and restatement of our 2013 Employee Stock Purchase Plan; #P7# #P7# #P7# FOR 6. To consider and vote upon the approval of an amendment to the Company's Amended and Restated Certificate of Incorporation to increase the authorized number of shares of common stock from 50,000,000 to 100,000,000; #P8# #P8# #P8# FOR 7. To consider and vote upon the approval of an amendment to the Company's Amended and Restated Certificate of Incorporation to update the exculpation provision to include certain officers of the Company as permitted by a recent amendment to Delaware law; and #P9# #P9# #P9# FOR 8. To transact such other business as may be properly brought before the meeting or any adjournment or postponement thereof. You must register to attend and/or vote at the meeting online at www.proxydocs.com/EVOK Authorized Signatures - Must be completed for your instructions to be executed. Please sign exactly as your name(s) appears on your account. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy/Vote Form. Signature (and Title if applicable) Proposal_Page - VIFL Date Signature (if held jointly) Date Please make your marks like this: X
