VISTAGEN THERAPEUTICS, INC.
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed
by the Registrant [X]
Filed
by a Party other than the Registrant [ ]
Check
the appropriate box:
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[
]
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Preliminary
Proxy Statement
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[
]
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Confidential,
for Use of the SEC Only (as permitted by
Rule 14a-6(e)(2))
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[X]
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Definitive
Proxy Statement
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[
]
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Definitive
Additional Materials
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[
]
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Soliciting
Material Pursuant to 14a-12
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VistaGen Therapeutics, Inc.
(Name
of Registrant as Specified In Its Charter)
_________________________________
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
[X]
No fee required.
[
] Fee computed on table below
per Exchange Act Rules 14a-6(i)(4) and 0-11.
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1.
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Title
of each class of securities to which transaction
applies:
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2.
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Aggregate
number of securities to which transaction applies:
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3.
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Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined):
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4.
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Proposed
maximum aggregate value of transaction:
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5.
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Total
fee paid:
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[
] Fee paid previously with
preliminary materials.
[
] Check box if any part of the fee is
offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its
filing.
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1.
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Amount
Previously Paid:
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2.
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Form,
Schedule or Registration Statement No.:
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3.
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Filing
Party:
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4.
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Date
Filed:
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July
29, 2021
Dear
Stockholders of VistaGen Therapeutics, Inc.:
You are
cordially invited to virtually attend the 2021 Annual Meeting of
Stockholders of VistaGen Therapeutics, Inc. (the
Annual Meeting
or the
Meeting
) that will be held at 10:00
a.m., Pacific Time, on Friday, September 17, 2021. To protect the
health and well-being of our stockholders, employees, Board of
Directors and advisors during the ongoing COVID-19 pandemic, the
Annual Meeting will be held virtually via the Internet. Although
there will not be a physical meeting location, and you will not be
able to attend the Annual Meeting in person, stockholders will be
able to attend the Meeting, submit questions, and vote their shares
during the Meeting, from any location that has Internet
connectivity, by visiting
http://meetings.computershare.com/MPL727P
.
In addition, prior to the Meeting, we encourage you to vote online
by following the instructions provided on the Notice of Internet
Availability of Proxy Materials described below.
In response to the COVID-19 pandemic
and as part of our efforts to conserve environmental resources and
prevent unnecessary corporate expense,
we are using the
“Notice and Access” method of providing proxy materials
to you via the Internet pursuant to the regulations promulgated by
the U.S. Securities and Exchange Commission (
SEC
). We believe that this process will
provide you with a safe, convenient and efficient way to access
your proxy materials and vote your shares, while also allowing us
to conserve natural resources and reduce the costs of printing and
distributing the proxy materials for the Annual Meeting by postal
mail. On or about July 29, 2021, we are mailing to our stockholders
a one-page Notice of Internet Availability of Proxy Materials (the
Notice
) containing
instructions on how to access our Proxy Statement and vote
electronically via the Internet or by telephone. The Notice will
also contain instructions on how to receive a paper copy of your
proxy materials.
Details
of the business to be conducted at the Annual Meeting are described
in the Notice and in the accompanying Proxy Statement. We have also
made a copy of our Annual Report on Form 10-K for the year ended
March 31, 2021 (
Annual
Report
) available with this Proxy Statement. We encourage
you to read our Annual Report. It includes our audited financial
statements and provides information about our
business.
Your vote is very important to us. Whether or
not you plan to attend the Annual Meeting virtually, please
carefully review the accompanying Proxy Statement and then cast
your vote by Internet, telephone or postal mail as promptly as
possible so that your shares will be represented and voted at the
Meeting. Please refer to the Notice for instructions on submitting
your vote
. Our Board of Directors has unanimously approved
the proposals set forth in the accompanying Proxy Statement and we
recommend that you vote in favor of each such
proposal.
Thank
you for your support of VistaGen. We look forward to your
participation at the Annual Meeting.
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Sincerely,
/s/ Shawn K Singh, J.D.
Shawn K. Singh, J.D.
Chief Executive Officer and Director
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-i-
VistaGen Therapeutics, Inc.
343 Allerton Avenue
South San Francisco, CA 94080
Tel. (650) 577-3600
Fax (888) 482-2602
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on September 17, 2021
Dear
Stockholder:
We are
pleased to invite you to virtually attend the 2021 Annual Meeting
of Stockholders (the
Annual
Meeting
or
Meeting
)
of VistaGen Therapeutics, Inc., a Nevada corporation (the
Company
,
us
,
we
or
our
). The Annual Meeting will be a
virtual-format meeting, held exclusively via the Internet at
http://meetings.computershare.com/MPL727P
on
Friday, September 17, 2021, at 10:00 a.m Pacific Time, for the
following purposes:
1.
to
elect seven (7) directors to our Board of Directors, each to serve
until our 2022 Annual Meeting of Stockholders, or until her or his
respective successor is elected and qualified;
2.
to
ap
prove
an amendment and restatement of the Company’s 2019 Omnibus
Equity Incentive Plan (the
Amended
2019 Plan
), which Amended 2019 Plan
makes certain changes to the Company’s 2019 Omnibus Equity
Incentive Plan, including increasing the number of shares of the
common stock authorized for issuance thereunder from 7.5 million
shares to 18 million shares;
3.
to
ratify the appointment of WithumSmith+Brown, PC as our independent
registered public accounting firm for our fiscal year ending March
31, 2022; and
4.
to vote
upon such other matters, if any, as may properly come before the
Annual Meeting or any adjournment or postponement of the
Meeting.
These
matters are more fully discussed in the attached Proxy
Statement.
We have
elected to provide access to our proxy materials primarily
electronically via the Internet, pursuant to the “Notice and
Access” method regulations promulgated by the U.S. Securities
and Exchange Commission (
SEC
). We believe this method expedites
our stockholders’ safe receipt of proxy materials while the
COVID-19 pandemic remains a concern, conserves natural resources
and significantly reduces the costs of the Annual Meeting. On or
about July 29, 2021, we began mailing a one-page Notice of Internet
Availability of Proxy Materials (the
Notice
) to each of our stockholders
entitled to notice of and to vote at the Annual Meeting, which
Notice contains instructions for accessing the attached Proxy
Statement, our Annual Report on Form 10-K for our fiscal year ended
March 31, 2021 (the
Annual
Report
) via the Internet, as well as voting instructions.
The Notice also includes instructions on how you can receive a
paper copy of your proxy materials.
The Proxy Statement and the Annual Report are
both available on the Internet at:
http://www.
edocumentview.com/VTGN
.
The
close of business on July 23, 2021 (the
Record Date
) has been fixed as the
Record Date for the determination of stockholders entitled to
notice of and to vote at the Annual Meeting or any adjournments or
postponements thereof. Only holders of record of our common stock
at the close of business on the Record Date are entitled to notice
of and to vote at the Annual Meeting. A complete list of these
stockholders will be available for examination by any of our
stockholders for purposes pertaining to the Annual Meeting by
sending an email to
Corp.Secretary@vistagen.com
stating the purpose of the request and providing proof of ownership
of our common stock. This list will also be available for
examination by stockholders of record during the webcast of the
Annual Meeting at
http://meetings.computershare.com/MPL727P
.
-ii-
You are
entitled to virtually attend the Annual Meeting online only if you
were a stockholder as of the close of business on the Record Date
or hold a valid proxy for the Annual Meeting. If you are a
stockholder of record, your ownership as of the Record Date will be
verified prior to admittance into the Annual Meeting. If you are
not a stockholder of record but hold shares through a broker,
trustee or nominee, you must provide proof of beneficial ownership
as of the Record Date, such as an account statement or similar
evidence of ownership, to virtually attend the Annual Meeting.
Further information about how to attend the Annual Meeting, vote
your shares online during the Meeting and submit questions during
the Meeting is included in the accompanying Proxy Statement. For
instructions on how to vote your shares, please refer to the
instructions on the Notice of Internet Availability of Proxy
Materials you received by postal mail, the section titled
“Voting” beginning on page 2 of the Proxy
Statement or, if you requested to receive printed proxy materials,
your enclosed proxy card.
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YOUR VOTES ARE IMPORTANT
All stockholders are cordially invited to virtually attend the
Annual Meeting. However, to ensure your representation at the
Annual Meeting, you are urged to vote by Internet, telephone or
postal mail in advance of the Meeting, as promptly as possible.
Submitting your votes in advance of the Annual Meeting assures that
a quorum will be present at the Meeting and will avoid the Company
incurring additional expense for duplicate proxy solicitations. By
following the procedures described in the section entitled
“Voting” beginning on page 2 of the attached Proxy
Statement, any stockholder attending the Annual Meeting virtually
may vote at the Meeting, even if he or she has returned a proxy
prior to the Meeting.
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Your vote is very important to us. Whether or
not you expect to attend the Annual Meeting virtually, we urge you
to vote your shares in advance of the Meeting, as promptly as
possible, online via the Internet, by telephone or by postal mail
so that your shares may be represented and voted at the
Meeting.
If your shares are held in the name of a bank,
broker, brokerage firm or other fiduciary, please follow the
instructions on the voting instruction card furnished by the record
holder.
Our
Board of Directors has unanimously recommended that you vote
“FOR” each of the Director nominees identified in
Proposal No. 1, and "FOR" Proposals No. 2 and 3, each of which is
described in detail in the accompanying Proxy
Statement.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL
MEETING:
THE ANNUAL REPORT AND PROXY STATEMENT ARE
AVAILABLE ONLINE VIA THE INTERNET AT
http://www.
edocumentview.com
/VTGN
.
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By
Order of the Board of Directors,
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/s/ Jerrold D.
Dotson
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Jerrold D.
Dotson
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Chief Financial Officer and Corporate Secretary
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South
San Francisco, California
July
29, 2021
-iii-
VistaGen Therapeutics, Inc.
343 Allerton Avenue
South San Francisco, CA 94080
Tel. (650) 577-3600
Fax (888) 482-2602
PROXY STATEMENT
The
enclosed proxy is solicited on behalf of the Board of Directors
(the
Board
) of VistaGen
Therapeutics, Inc., a Nevada corporation (the
Company
,
us
,
we
or
our
), for use at the Company’s
2021 Annual Meeting of Stockholders (the
Annual Meeting
or the
Meeting
). The Annual Meeting will take
place in a virtual meeting format on Friday, September 17, 2021,
10:00 a.m., Pacific Time, and will be held exclusively via the
Internet at
http://meetings.computershare.com/MPL727P
.
We have
elected to provide access to the proxy materials for the Annual
Meeting primarily over the Internet in accordance with the U.S.
Securities and Exchange Commission’s (
SEC
) “Notice and Access”
rules. On or about July 29, 2021, we began mailing a one-page
Notice of Internet Availability of Proxy Materials (the
Notice
) to each of our
stockholders entitled to notice of and to vote at the Annual
Meeting. The Notice contains instructions for accessing this Proxy
Statement, our Annual Report on Form 10-K for our fiscal year ended
March 31, 2021 (
Annual
Report
) and Annual Meeting voting instructions. The Notice
also includes instructions on how you can receive a paper copy of
your proxy materials by postal mail.
This Proxy Statement and the Annual Report are
available on the Internet at:
http://www.edocumentview.com/VTGN
.
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Record Date and Shares Outstanding
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The
specific proposals to be considered and acted upon at the Annual
Meeting are each described in this Proxy Statement. Only
holders of our common stock as of the close of business on July 23,
2021 (the
Record Date
) are
entitled to notice of and to vote at the Annual Meeting. On the
Record Date, there were 192,098,965 shares of our common stock
issued and outstanding. Each holder of common stock is entitled to
one vote for each share held as of the Record Date.
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Quorum
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In
order for any business to be conducted at the Annual Meeting, the
holders of more than 50% of the shares entitled to vote must be
represented at the Meeting, either in person or by properly
executed proxy. If a quorum is not present at the scheduled time of
the Annual Meeting, the stockholders who are present may adjourn
the Meeting until a quorum is present. The time and place of the
adjourned Annual Meeting will be announced at the time the
adjournment is taken, and no other notice will be given. An
adjournment will have no effect on the business that may be
conducted at the Annual Meeting.
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Stockholder List
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A list
of registered stockholders as of the close of business on the
Record Date will be open for examination by any stockholder for a
period of ten days prior to the Annual Meeting for a purpose
pertaining to the Meeting by sending an email to
Corp.Secretary@vistagen.com, stating the purpose of the request and
providing proof of ownership of our common stock. This list will
also be available for examination to stockholders of record during
the virtual Annual Meeting webcast at
http://meetings.computershare.com/MPL727P.
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-1-
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Attendance at Virtual Annual Meeting
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We will
host the Annual Meeting live online, via Internet webcast. You may
attend the Annual Meeting virtually by visiting
http://meetings.computershare.com/MPL727P. The webcast will start
at 10:00 a.m., Pacific Time, on Friday, September 17,
2021.
To
virtually attend the Annual Meeting please go to
http://meetings.computershare.com/MPL727P. You have the option to
log in to the virtual Annual Meeting as a “Stockholder”
with a control number” or as a “Guest.” If you
are a stockholder of record (i.e., if you hold your shares through
Computershare, our registrar and transfer agent) (a
Stockholder
), you may log in as a
Stockholder using the control number which can be found on your
Notice and proxy card, and Annual Meeting password. The
password for the meeting is
VTGN2021
. If you are not a
stockholder of record (i.e., if you do not hold your shares through
Computershare), but hold shares through an intermediary, such as a
bank or broker, trustee or nominee (sometimes referred to as
holding in “street name”), you may attend the meeting
as “Guest” by entering your name and email address. As
a Guest, you will have access to the meeting materials and will be
able to ask questions during the Annual Meeting, but you will not
be able to vote during the Meeting.
If you
hold your shares through an intermediary, such as a bank or broker,
and you desire to vote during the Annual Meeting, you must register
in advance to virtually attend the Annual Meeting as a Stockholder.
To register to attend the virtual Annual Meeting as a Stockholder,
you must provide proof of beneficial ownership as of the Record
Date, such as an account statement, legal proxy from your broker,
or similar evidence of ownership along with your name and email
address to Computershare. Requests for Annual Meeting registration
of beneficial owners must be labeled as “Legal Proxy”
and be received no later than 5:00 p.m., Eastern Time, on
September 7, 2021. You will receive a confirmation of your virtual
Annual Meeting registration by email after Computershare receives
your registration materials. Requests for registration should be
directed by email to legalproxy@computershare.com or by mail to
Computershare, VistaGen Therapeutics, Inc. Legal Proxy, P.O. Box
43001, Providence, RI 02940-3001. You will receive a confirmation
email from Computershare of your Annual Meeting registration and
will receive a control number to enter the meeting as a
Stockholder.
Whether
you virtually attend the Annual Meeting as a Stockholder or as a
Guest, please allow yourself ample time for the online check-in
procedures.
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Questions at the Annual Meeting
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If you
wish to submit a question during the Annual Meeting, you may log in
online, and ask a question on our virtual Annual Meeting platform
at http://meetings.computershare.com/MPL727P. Our virtual Annual
Meeting will be governed by our Rules of Conduct which will be
available on the virtual Meeting platform during the Annual
Meeting. The Rules of Conduct will address the ability of
stockholders to ask questions during the meeting, including rules
on permissible topics, and rules for how questions and comments
will be recognized and disclosed to meeting
participants.
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Voting
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There are four (4) ways a stockholder of record can
vote:
(1) By Internet: If you are a
stockholder as of the Record Date, you may vote over the Internet
by following the instructions provided in the Notice.
(2) By Telephone: If you are a
stockholder as of the Record Date, you may vote by telephone by
following the instructions in the Notice.
(3) By Mail: If you requested printed
copies of proxy materials and are a stockholder as of the Record
Date, you may vote by mailing your proxy as described in the proxy
materials.
(4) During the Annual Meeting: The
Annual Meeting will be held exclusively via the Internet, and can
only be accessed at http://meetings.computershare.com/MPL727P.
Subject to the provisions applicable to other than holders of
record as outlined above in the section entitled “Attendance
at Virtual Annual Meeting,” if you are a stockholder as of
the Record Date, you will have the ability to attend the virtual
Meeting and vote online during the Meeting. Submitting a proxy will
not prevent a stockholder from attending the Annual Meeting
virtually, revoking an earlier-submitted proxy in accordance with
the process outlined below and voting online during the virtual
Meeting.
In order to be counted, proxies submitted
by telephone or via the Internet must be
received by 11:59 p.m., Eastern Time, on September 16, 2021.
Proxies submitted by U.S. mail must be received before
the start of the virtual Annual Meeting. If you hold your shares
through a bank or broker, please follow their voting
instructions.
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Required Vote for Approval
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Proposal No. 1: Election of
Directors.
The seven (7)
Director nominees who receive the greatest number of votes cast at
the Annual Meeting by the shares present, either in person or by
proxy, and entitled to vote will be elected to serve on our Board
of Directors until our 2022 Annual Meeting of Stockholders, or
until her or his successor is duly elected and qualified. The
election of directors requires the affirmative vote of a plurality
of the voting shares present or represented by proxy and entitled
to vote at the Annual Meeting. The seven nominees receiving the
highest number of affirmative votes will be elected to serve on our
Board of Directors until our 2022 Annual Meeting of Stockholders,
or until her or his successor is duly elected and qualified. Unless
otherwise instructed or unless authority to vote is withheld,
shares represented by executed proxies will be voted
“FOR” the election of the nominees.
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Proposal No. 2: Approval of an Amendment and Restatement of the
Company’s 2019 Omnibus Equity Incentive Plan
. Our
Board unanimously approved of an amendment and restatement of our
2019 Omnibus Equity Incentive Plan (the
Amended
2019 Plan
), which Amended 2019 Plan
makes certain changes to our 2019 Omnibus Equity Incentive Plan,
including increasing the number of shares of the common stock
authorized for issuance thereunder from 7.5 million shares to 18
million shares. A copy of the Amended 2019 Plan is attached to this
Proxy Statement as Appendix A. The affirmative vote
“FOR” a majority of the shares present in person or by
proxy at the Annual Meeting and entitled to vote is necessary for
approval of this proposal.
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Proposal No. 3: Ratification of Appointment of our Independent
Registered Public Accounting Firm.
The affirmative
“FOR” vote of a majority of the shares present in
person or by proxy at the Annual Meeting and entitled to vote is
required for the ratification of the selection of
WithumSmith+Brown, PC as our independent registered public
accounting firm for our current fiscal year.
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Abstentions and Broker Non-Votes
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All
votes will be tabulated by the inspector of election appointed for
the Annual Meeting, who will separately tabulate affirmative and
negative votes, abstentions and broker non-votes. An abstention is
the voluntary act of not voting by a stockholder who is present at
a meeting and entitled to vote. A broker “non-vote”
occurs when a broker nominee holding shares for a beneficial owner
does not vote on a particular proposal because the nominee does not
have discretionary power for that particular item and has not
received instructions from the beneficial owner. If you hold your
shares in “street name” through a broker, brokerage
firm or other nominee, your broker, brokerage firm or nominee may
not be permitted to exercise voting discretion with respect to some
of the matters to be acted upon. If you do not give your
broker, brokerage firm or nominee specific instructions regarding
such matters, your proxy will be deemed a “broker
non-vote.”
As
noted above, the seven director nominees identified under Proposal
No. 1 who receive the most votes at the Annual Meeting will be
elected to serve on our Board of Directors until our 2022 Annual
Meeting of Stockholders, or until her or his successor is duly
elected and qualified, thus abstentions and broker non-votes will
have no effect on the outcome of Proposal No. 1.
Under Nevada law and our Amended and Restated Bylaws, each other
matter will be determined by the vote of the holders of a majority
of the voting power present or represented by proxy at the Annual
Meeting. For these matters, abstentions and any broker non-votes
cast will not be counted as votes in favor of such proposals, and
will also not be counted as shares voting on such
matters.
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Revocation of Proxies
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You may
revoke or change your proxy at any time before the Annual Meeting
by filing, with our Corporate Secretary at our principal executive
offices, located at 343 Allerton Avenue, South San Francisco,
California 94080, a notice of revocation or another signed proxy
with a later date. You may also revoke your proxy by virtually
attending the Annual Meeting and voting in person. Your
attendance at the virtual Annual Meeting will not, by itself,
revoke your proxy.
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Solicitation
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We will
bear the entire cost of solicitation, including the preparation,
assembly, printing and mailing of the Notice, as well as the
preparation and posting on the Internet of this Proxy Statement and
any additional solicitation materials furnished to the
stockholders. Copies of any solicitation materials will be
furnished to brokerage houses, fiduciaries and custodians holding
shares in their names that are beneficially owned by others so that
they may forward the solicitation materials to such beneficial
owners. In addition, we may reimburse such persons for their costs
in forwarding the solicitation materials to such beneficial owners.
The original solicitation of proxies may be supplemented by a
solicitation, by telephone, email or other means, by our directors,
officers or employees. No additional compensation will be paid to
these individuals for any such services. Except as described above,
we do not presently intend to solicit proxies other than by the
Internet, telephone, email and postal mail.
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-4-
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
PROPOSAL NO. 1
ELECTION OF DIRECTORS
General
Our
Bylaws provide that our Board of Directors (
Board
) shall consist of not less than
one, nor more than seven directors, and that upon any change in the
number of directors, any newly created directorships or eliminated
directorships shall be apportioned by the remaining members of the
Board or by stockholders.
Our Board currently
consists of seven directors, including recently appointed directors
Ms. Joanne Curley, Ms. Margaret M. FitzPatrick and Ms. Mary L.
Rotunno. These appointments were made following the departure of
Dr. H. Ralph Snodgrass and Dr. Brian J. Underdown from the Board.
The decision to step down from the Board was not the result of any
disagreement with the Company’s management or the Board for
either of Dr. Snodgrass, who continues to serve as the
Company’s President and Chief Scientific Officer, or Dr.
Underdown. Both Dr. Snodgrass and Dr. Underdown made valuable
contributions to the Company and the Board during their tenure, and
the Board thanks each of them for their service on the
Board.
Each of
the Board’s seven (7) current directors is nominated for
election at the virtual Annual Meeting to serve until our next
annual meeting of stockholders, or until her or his successor is
duly elected and qualified. Each nominee has confirmed that he or
she is able and willing to continue serving as a director if
elected. If any of the nominees becomes unable or unwilling to
serve, your proxy will be voted for the election of a substitute
nominee recommended by the current Board.
Upon
recommendation of the members of its Corporate Governance and
Nominating Committee, the Board has nominated the following
directors for election at our Annual Meeting:
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Jon S. Saxe, J.D., LL.M.
Chairman and Independent Director
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Jerry B. Gin, Ph.D., MBA
Independent Director
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Ann M. Cunningham, MBA
Chief Commercial Officer and Director
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Mary L. Rotunno, J.D.
Independent Director
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Joanne Curley, Ph.D.
Independent Director
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Shawn K. Singh, J.D.
Chief Executive Officer and Director
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Margaret M. FitzPatrick, M.A.
Independent Director
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Required Vote and Recommendation
The
election of directors requires the affirmative vote of a plurality
of the voting shares present or represented by proxy and entitled
to vote at the Annual Meeting. The seven nominees receiving the
highest number of affirmative votes will be elected to serve on our
Board of Directors until our 2022 Annual Meeting of Stockholders,
or until her or his successor is duly elected and qualified. Unless
otherwise instructed or unless authority to vote is withheld,
shares represented by executed proxies will be voted
“FOR” the election of the nominees.
The
Board recommends that the stockholders vote “
FOR
” the election of Mr.
Saxe, Ms. Cunningham, Dr. Curley, Ms. FitzPatrick, Dr. Gin, Ms.
Rotunno and Mr. Singh.
The
following sections sets forth certain information regarding the
nominees for election as directors of the Company. There are no
family relationships between any of the directors and the
Company’s executive officers.
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BOARD OF DIRECTORS
Director Nominee Qualification and Experience
Jon S. Saxe, J.D., LL.M.
Chairman and Independent Director
Age 85
|
|
Mr. Saxe has served as Chairman of our Board since 2000, first as
Chairman of the Board of Directors of
VistaGen Therapeutics,
Inc., a California corporation (
VistaGen California
),
then as Chairman of our Board after the merger by
and between the Company and VistaGen California on May 11, 2011, at
which time VistaGen California became a wholly-owned subsidiary of
the Company (the
Merger
). He also serves as the Chairman of our Audit
Committee. Mr. Saxe is the retired President and was a
director of PDL BioPharma from 1989 to 2008. From 1989 to 1993, he
was President, Chief Executive Officer and a director of Synergen,
Inc. (acquired by Amgen). Mr. Saxe served as Vice President,
Licensing & Corporate Development for Hoffmann-Roche from
1984 through 1989, and Head of Patent Law for Hoffmann-Roche from
1978 through 1989. Mr. Saxe currently is a director of Durect
Corporation (NASDAQ: DRRX), and six private life science companies,
Achelios, Arbor Vita Corporation, Aether, Inc., Arcuo Medical, LLC,
Cancer Prevention Pharmaceuticals, Inc., Trellis Bioscience, Inc.
and Epalex Corporation. Mr. Saxe has also served as a director
of other biotechnology and pharmaceutical companies, including ID
Biomedical (acquired by GlaxoSmithKline), Sciele Pharmaceuticals,
Inc. (acquired by Shionogi), Amalyte (acquired by Kemin
Industries), Cell Pathways (acquired by OSI Pharmaceuticals), Lumos
Pharma, Inc. (merged with New Link Genetics) and other companies,
both public and private. Mr. Saxe has a B.S.Ch.E. from
Carnegie-Mellon University, a J.D. degree from George Washington
University and an LL.M. degree from New York
University.
We
selected Mr. Saxe to serve as Chairman of our Board of Directors
due to his numerous years of experience as a senior executive with
major pharmaceutical and biotechnology companies, including Protein
Design Labs, Inc., Synergen, Inc. and Hoffmann-Roche, Inc., as well
as his extensive experience serving as a director of numerous
private and public biotechnology and pharmaceutical companies,
serving as Chairman, and Chair and member of audit, compensation
and governance committees of both private and public
companies. Mr. Saxe provides us and our Board of
Directors with highly valuable insight and perspective into the
biotechnology and pharmaceutical industries, as well as the
strategic opportunities and challenges that we face.
|
-6-
Ann M. Cunningham, MBA
Chief Commercial Officer and Director
Age 53
|
|
Ms.
Cunningham has served as a member of our Board since January 2019
and was appointed to serve as the Company’s Chief Commercial
Officer on May 1, 2021. Prior to joining the Company, Ms.
Cunningham was the Founder and Managing Partner of i3 Strategy
Partners, a consulting firm founded in 2018 specializing in
assisting companies in the pharmaceutical space. Prior to founding
i3 Strategy Partners, Ms. Cunningham served as Vice President,
Neurodegenerative Diseases and Psychiatry for Teva Pharmaceuticals
Industries, Ltd. from 2015 to 2018, as Senior Marketing Director
for Otsuka Pharmaceutical Companies from 2013 to 2015 and in
several marketing-focused positions for Eli Lily and Company from
1999 to 2013, including serving as Global Marketing Senior Director
from 2009 to 2013. Ms. Cunningham holds a B.A. degree in Psychology
from Yale University and an MBA, with a focus on marketing
management, from the University of Michigan.
We
selected Ms. Cunningham to serve on our Board due to her
substantial experience in healthcare marketing, particularly in the
successful development, positioning and commercial launch of
products to treat diseases of the central nervous system. Ms.
Cunningham brings an insightful commercial perspective to us and to
our Board that is critical as our pipeline products move from
clinical development to commercialization.
|
Joanne Curley, Ph.D.
Independent Director
Age 53
|
|
Dr.
Curley has served as a member of our Board of Directors since April
2021. Dr. Curley brings more than 25 years of experience in the
development and commercialization of pharmaceutical products,
including research and development governance. Dr. Curley currently
serves as the Chief Development Officer at Vera Therapeutics, Inc.,
a position she has held since March 2020. Prior to joining Vera,
from June 2005 to March 2020, Dr. Curley held various
director-level position with Gilead Sciences, Inc., during which
time the anti-viral portfolio grew from four to seventeen
commercial products. While at Gilead, Dr. Curley led Project and
Portfolio Management with oversight of the development pipeline
across four therapeutic areas and was responsible for research and
development governance. Before Gilead, Dr. Curley worked as an
aerosol formulation scientist and subsequently as a project leader
at Nektar Therapeutics. Dr. Curley received a BSc in Physics and
Chemistry from Trinity College, Ireland, a Ph.D. in Polymer Science
and Engineering from the University of Massachusetts, Amherst and
completed a post-doctorate at Massachusetts Institute of Technology
and Harvard Medical School, focused on long-acting biodegradable
formulations.
We
selected Dr. Curley to serve on our Board of Directors due to her
extensive experience in early product development, regulatory
approval and commercialization of pharmaceutical products, giving
her a unique perspective of the life cycle of drug
development.
|
-7-
Margaret M. FitzPatrick, M.A.
Independent Director
Age 55
|
|
Ms.
FitzPatrick has served on our Board of Directors since July 2021.
Ms. FitzPatrick is a globally recognized corporate affairs
executive who has been honored with several prestigious awards,
including the Washington Business Journal’s C-Suite Executive
of the Year Class (2019), PR Week’s Top 50 Most Powerful
People in PR (2015) and PR Week’s Hall of Femme (2019).
Recently, she served as Chief Corporate Affairs Officer of the
Exelon Corporation, a Fortune 100 diversified clean energy company,
from 2016 to 2020. Prior to her time at Exelon Corporation, Ms.
FitzPatrick served as Global Chief Communications Officer and led
public affairs at Johnson & Johnson, the world's largest and
most broadly-based healthcare company, from 2013 to 2016, and as
Global Chief Communication Officer and President of the Foundation
at CIGNA. Ms. FitzPatrick also served as Executive Vice President
at APCO Worldwide, a global public affairs and strategic
communications consultancy, where she counseled executives on major
global reputation efforts for notable industry leaders such as eBay
and United Airlines, among others. Ms. FitzPatrick currently serves
on the board of the Southeast Tennis and Learning Center in
Washington, D.C. In 2020, she was appointed by DC Mayor Muriel
Bowser to serve as a Commissioner on the DC Commission on the Arts
and Humanities. Ms. FitzPatrick holds a B.A. in English and Policy
Studies from Syracuse University, and an M.A. in Public Policy from
The George Washington University. In 2018, she completed the
Harvard Business School program for corporate
directors.
We selected Ms. FitzPatrick to serve on the Board due to her
extensive experience developing and executing multiple high impact
customer-focused marketing communications initiatives for some of
the world’s largest and most successful companies. The Board
believes Ms. FitzPatrick’s expertise in positioning companies
and products through public relations, marketing and digital media
campaigns will provide valuable contributions to the Company both
before and after commercial launch of the Company’s product
candidates.
|
Jerry B. Gin, Ph.D., MBA
Independent Director
Age 78
|
|
Dr. Gin
has served on our Board of Directors since March 2016. Dr. Gin is
currently the co-founder and CEO of Nuvora, Inc., a private company
founded in 2006 with a drug delivery platform for the
sustained release of ingredients through the mouth for such
indications as dry mouth, biofilm reduction and sore throat/cough
relief. Dr. Gin is also co-founder and Chairman of Livionex, a
private platform technology company founded in 2009 and focused on
oral care, ophthalmology and wound care. Previously, Dr. Gin
co-founded Oculex Pharmaceuticals in 1993, which developed
technology for controlled release delivery of drugs to the interior
of the eye, specifically to treat macular edema, and served as
President and CEO until it was acquired by Allergan in 2003. Prior
to forming Oculex, Dr. Gin co-founded and took public ChemTrak,
which developed a home cholesterol test commonly available in drug
stores today. Prior to ChemTrak, Dr. Gin was Director of New
Business Development and Strategic Planning for Syva, the
diagnostic arm of Syntex Pharmaceuticals, Director for
Pharmaceutical and Diagnostic businesses for Dow Chemical, and
Director of BioScience Labs (now Quest Laboratories), the clinical
laboratories of Dow Chemical. Dr. Gin received his
Bachelor’s degree in Chemistry from the University of
Arizona, his Ph.D. in Biochemistry from the University of
California, Berkeley, his MBA from Loyola College, and conducted
his post-doctoral research at the National Institutes of
Health.
We
selected Dr. Gin to serve on our Board of Directors due to his
extensive experience in the healthcare industry, focusing his
substantial business and scientific expertise on founding and
developing numerous biopharmaceutical, diagnostic and biotechnology
companies and propelling them to their next platforms of growth and
value.
|
-8-
Mary L. Rotunno, J.D.
Independent Director
Age 61
|
|
Ms.
Rotunno has served as a member of our Board since July 2021. Ms.
Rotunno has served as General Counsel of El Camino Health, a
health care system, since January 2014, and has served as a Member
of the Executive Leadership Team at El Camino Health since August
2015. Ms. Rotunno is also Board Chair and a member of Audit,
Executive/Governance and Nominations Committees for health care
provider, Momentum for Health, located in San Jose,
California. Before joining El Camino Health, Ms. Rotunno
spent over 11 years as Senior Counsel and Client Service Leader for
Common Spirit Health, formerly Dignity Health, in
California’s San Francisco Bay Area. Prior to Dignity Health,
she held various legal roles at Varian Medical Systems, Manatt,
Phelps & Phillips, Golden Living, and Pillsbury Winthrop Shaw
Pitman. Ms. Rotunno graduated with honors from the University of
Illinois with a Bachelor of Science in Nursing. She worked as a
registered nurse before earning her Juris Doctor degree, cum laude,
from the University of California, Hastings College of Law, San
Francisco. She obtained certification by the Women’s
Corporate Board Readiness Program at Santa Clara University and
completed the Hastings Leadership Academy for Women and Dignity
Health Ministry Leadership Program.
We
selected Ms. Rotunno to serve on our Board of Directors due to her
extensive experience as an advocate for both patients and health
care providers and her insights into strategies for value-based
care and an understanding of the life cycle of the mental
healthcare experience. Ms. Rotunno also brings insights on complex
governance, regulatory and compliance requirements to complement
her strategic vision and skills for scenario planning and
enterprise risk management.
|
|
Shawn K. Singh, J.D.
Chief Executive Officer and Director
Age 58
|
|
Mr.
Singh has served as our Chief Executive Officer since August 2009,
first as the Chief Executive Officer of VistaGen California, then
as Chief Executive Officer of the Company after the Merger. Mr.
Singh first joined the Board of Directors of VistaGen California in
2000 and served on the VistaGen California management team
(part-time) from late-2003, following VistaGen California’s
acquisition of Artemis Neuroscience, of which he was President, to
August 2009. In connection with the Merger, Mr. Singh was appointed
as a member of our Board in 2011. Mr. Singh has nearly 30 years of
experience working with biotechnology, medical device and
pharmaceutical companies, both private and public. From 2001 to
August 2009, Mr. Singh served as Managing Principal of Cato
BioVentures, a life science venture capital firm, and as Chief
Business Officer and General Counsel of Cato Research Ltd, a
contract research organization (
CRO
) affiliated with Cato BioVentures.
Mr. Singh served as President (part-time) of Echo Therapeutics, a
medical device company, from 2007 to 2009, and as a member of its
Board of Directors from 2007 to 2011. He also served as Chief
Executive Officer (part-time) of Hemodynamic Therapeutics, a
private biopharmaceutical company affiliated with Cato BioVentures,
from 2004 to 2009. From 2000 to 2001, Mr. Singh served as Managing
Director of Start-Up Law, a management consulting firm serving
biotechnology companies. Mr. Singh also served as Chief Business
Officer of SciClone Pharmaceuticals (formerly NASDAQ: SCLN), a
specialty pharmaceutical company with a substantial commercial
business in Greater China, from 1993 to 2000, and as a corporate
finance associate of Morrison & Foerster LLP, an international
law firm, from 1991 to 1993. Mr. Singh earned a B.A. degree, with
honors, from the University of California, Berkeley, and a Juris
Doctor degree from the University of Maryland School of Law. Mr.
Singh is a member of the State Bar of California.
We
selected Mr. Singh to serve on our Board of Directors due to his
substantial practical experience and expertise in senior leadership
roles with multiple private and public biotechnology,
pharmaceutical and medical device companies, and his extensive
experience in corporate finance, venture capital, corporate
governance, drug development, intellectual property, regulatory
affairs and strategic acquisitions and collaborations.
|
-9-
Director Compensation
We
adopted a director compensation policy for the independent
directors of our Board, as “independent” is defined by
the rules of the Nasdaq Stock Market rules, which policy became
effective for our fiscal year beginning April 1, 2014. Details of
this independent director compensation policy are set forth
below:
|
Schedule
of Director Fees, April 1, 2014 through April 1, 2021
|
||
|
Description
|
Cash
($)
|
Equity
(1)
(#)
|
|
Director
Annual Retainer
|
$
25,000
|
12,000
|
|
Audit
Committee Retainer
|
|
|
|
Chair
|
$
15,000
|
|
|
Member
|
$
7,500
|
|
|
Compensation
Committee
|
|
|
|
Chair
|
$
10,000
|
|
|
Member
|
$
5,000
|
|
|
Corporate
Governance and Nominating Committee
|
|
|
|
Chair
|
$
10,000
|
|
|
Member
|
$
5,000
|
|
_____________
(1)
Reflects the
minimum amount of equity awards each independent director received
pursuant under the director compensation policy. Any additional
equity awards granted to the independent directors were issued at
the discretion of the Compensation Committee. The equity awards
were granted as either stock options or warrants. Prorated grants
were made for partial years of service.
We paid our independent
directors cash compensation consistent with the policy noted above
during our fiscal year ended March 31, 2021.
Effective April 1,
2021, our Board authorized a new policy for independent director
compensation, the details of which are set forth
below:
|
Schedule of Director Fees, effective April 1, 2021
|
||
|
Description
|
Cash
(1)
($)
|
Equity
(2)
|
|
Director Annual Retainer
|
$
50,000
|
Independent
directors serving on the Board
will be entitled to
the following equity awards:
(i) a one-time
grant
|
|
Audit
Committee
|
|
of stock options upon appointment to the Board in an amount to be determined at the sole discretion of the |
|
Chair
|
$
15,000
|
Compensation Committee, and (ii) an annual grant of stock options or restricted stock to be |
|
Member
|
$
10,000
|
determined
at
the
sole
discretion of the
Compensation Committee.
|
|
Compensation
Committee
|
|
|
|
Chair
|
$
10,000
|
|
|
Member
|
$
5,000
|
|
|
Corporate
Governance and Nominating Committee
|
|
|
|
Chair
|
$
10,000
|
|
|
Member
|
$
5,000
|
|
_____________
(1)
Cash fees
payable in quarterly installments.
(2)
All awards issued
pursuant to the Director Compensation Plan will be issued pursuant
to the 2019 Plan, (defined below) or a successor plan, if any. Each
award issued under the Director Compensation Plan will vest in
equal monthly installments over a 12-month period beginning on the
date of issuance.
-10-
In
April 2020, we granted to each of our four then-independent
directors options to purchase 75,000 shares of our common stock at
an exercise price of $0.398 per share under the terms of our 2019
Omnibus Equity Incentive Plan (the
2019 Plan
). In December 2020, we
granted to each of our four then-independent directors options to
purchase 75,000 shares of our common stock at an exercise price of
$1.77 per share under the terms of the 2019
Plan. Each grant awarded to our
independent directors during the year ended March 31, 2021 expires
ten years after the date of grant.
The
following table sets forth a summary of the compensation earned by
our independent, non-employee directors in our fiscal year ended
March 31, 2021.
|
|
Fees
Paid
in Cash
(2)
|
Option
Awards
(3)(8)
|
Other
Compensation
|
Total
|
|
Name
(1)
|
($)
|
($)
|
($)
|
($)
|
|
|
|
|
|
|
|
Jon S. Saxe
(4)
|
$
52,500
|
$
109,916
|
$
-
|
$
162,416
|
|
Ann M. Cunningham
(5)
|
$
30,000
|
$
109,916
|
$
-
|
$
139,916
|
|
Jerry B. Gin
(6)
|
$
50,000
|
$
109,916
|
$
-
|
$
159,916
|
|
Brian J. Underdown
(7)
|
$
52,500
|
$
109,916
|
$
-
|
$
162,416
|
|
(1)
|
Ms.
Curley, Ms. FitzPatrick and Ms. Rotunno were appointed to the Board
of Directors subsequent to our fiscal year ended March 31, 2021,
and have therefore been excluded from the table.
|
|
|
|
|
|
|
(2)
|
The
amounts shown represent fees earned for service on our Board, and
Audit Committee, Compensation Committee and Corporate Governance
and Nominating Committee during the fiscal year ended March 31,
2021, which amounts were paid in full during the fiscal year then
ended.
|
|
|
|
|
|
|
(3)
|
The amounts in the “Option Awards” column do not
represent any cash payments actually received by Mr. Saxe, Mr.
Underdown, Mr. Gin or Ms. Cunningham with respect to any of such
stock options awarded to them during the fiscal year ended March
31, 2021. Rather, the amounts represent (i) the aggregate grant
date fair value of options to purchase shares of our common stock
awarded to each of Mr. Saxe, Ms. Cunningham, Mr. Gin and Mr.
Underdown during our fiscal year ended March 31, 2021, computed in
accordance with the Financial Accounting Standards Board’s
Accounting Standards Codification Topic 718, Compensation –
Stock Compensation (
ASC
718
). To date, Mr. Saxe, Ms. Cunningham, Mr. Gin and
Mr. Underdown have not exercised any of the options granted during
our fiscal year ended March 31, 2021, and there can be no assurance
that any of them will ever realize the full ASC 718 grant date fair
value amounts presented in the “Option Awards”
column.
|
|
|
(4)
|
Mr.
Saxe served as the Chairman of our Board, the Chairman of our Audit
Committee and a member of our Compensation Committee and Corporate
Governance and Nominating Committee throughout our fiscal year
ended March 31, 2021. At March 31, 2021, Mr. Saxe held:
(i) 55,751 shares of our common stock; (ii) options to purchase
585,000 registered shares of our common stock, of which options to
purchase 474,323 shares were exercisable; and (iii) warrants to
purchase 7,500 restricted shares of our common stock, all of which
are exercisable.
|
|
|
(5)
|
Ms.
Cunningham has served as a member of our Board since January 2019.
She also served as a member of our Corporate Governance and
Nominating Committee from January 2019 through April 30, 2021. On
May 1, 2021, Ms. Cunningham joined the Company as its Chief
Commercial Officer and, since she was no longer considered an
independent director under the standards established by the SEC and
the rules of the Nasdaq Stock Market, her membership on the
Corporate Governance and Nominating Committee terminated. At March
31, 2021, Ms. Cunningham held options to purchase 300,000
registered shares of our common stock, of which 189,323 were
exercisable.
|
|
|
(6)
|
Mr. Gin served as a member of our Board, as the Chairman of our
Corporate Governance and Nominating Committee and as a member of
our Audit Committee and Compensation Committee throughout our
fiscal year ended March 31, 2021. At March 31, 2021, Mr. Gin held:
(i) 100,000 shares of our common stock, and (ii) options to
purchase 610,000 registered shares of our common stock, of which
options to purchase 499,323 shares were
exercisable.
|
|
|
(7)
|
Mr. Underdown served as a member of our Board, as the Chairman of
our Compensation Committee and as a member of our Audit Committee
and Corporate Governance and Nominating Committee throughout our
fiscal year ended March 31, 2021 and until his retirement from the
Board on July 21, 2021. At March 31, 2021, Mr. Underdown held: (i)
options to purchase 585,000 registered shares of our common stock,
of which options to purchase 474,323 shares were exercisable; and
(ii) warrants to purchase 7,500 restricted shares of our common
stock, all of which are exercisable.
|
|
-11-
|
(8)
|
The table below provides information regarding the option awards we
granted to Mr. Saxe, Ms. Cunningham, Mr. Gin and Mr. Underdown
during our fiscal year ended March 31, 2021 and the weighted
average assumptions used in the Black Scholes Option Pricing Model
to determine the grant date fair values of the respective
awards.
|
|
|
|
Option
|
Option
|
|
|
|
Grant
|
Grant
|
|
|
|
4/23/2020
|
12/31/2020
|
Total
|
|
Mr.
Saxe
|
$
20,101
|
$
89,815
|
$
109,616
|
|
Ms.
Cunningham
|
$
20,101
|
$
89,815
|
$
109,616
|
|
Mr.
Gin
|
$
20,101
|
$
89,815
|
$
109,616
|
|
Mr.
Underdown
|
$
20,101
|
$
89,815
|
$
109,616
|
|
|
|
|
|
|
Exercise
Price
|
$
0.398
|
$
1.77
|
|
|
Grant Date stock
price
|
$
0.398
|
$
1.77
|
|
|
Risk free interest
rate
|
0.397
%
|
0.426
%
|
|
|
Expected Term
(years)
|
5.39
years
|
5.39
years
|
|
|
Volatility
|
83.90
%
|
88.41
%
|
|
|
Dividend
rate
|
0.00
%
|
0.00
%
|
|
|
Fair value per
share
|
$
0.27
|
$
1.20
|
|
|
Aggregate option
shares
|
300,000
|
300,000
|
|
Board Attendance at Board of Directors, Committee and Stockholder
Meetings
Our
Board met virtually four times and acted by unanimous written
consent ten times during our fiscal year ended March 31, 2021. Our
Audit Committee met virtually four times. Our Compensation
Committee met virtually four times and acted by unanimous written
consent four times with respect to executive compensation matters
and grants of equity securities. Our Corporate Governance and
Nominating Committee requested action by the entire Board with
respect to re-election of members of our Board and other
resolutions presented to our stockholders at our September 2020
Annual Meeting of Stockholders and Board committee assignments.
Each director serving during our fiscal year ended March 31, 2021
attended all of the meetings of the Board and the committees of the
Board upon which such director served that were held during the
fiscal year.
We do
not have a formal policy regarding attendance by members of the
Board at our annual meetings of stockholders, but directors are
encouraged to attend. Due to the continuing COVID-19 pandemic, we
held our September 2020 Annual Meeting of Stockholders in an
on-line virtual format. Each of our directors attended our
September 2020 Annual Meeting of Stockholders
virtually.
Independent Directors
Our
securities are currently listed on the Nasdaq Capital Market, which
requires that a majority of our directors be independent.
Accordingly, we evaluate director independence under the standards
established by the SEC and the rules of the Nasdaq Stock
Market.
Subject
to some exceptions, these standards generally provide that a
director will not be independent if (a) the director is, or in the
past three years has been, an employee of ours; (b) a member of the
director’s immediate family is, or in the past three fiscal
years has been, an executive officer of ours; (c) the director or a
member of the director’s immediate family has received more
than $200,000 per year in direct compensation from us other than
for service as a director (or for a family member, as a
non-executive employee); (d) the director or a member of the
director’s immediate family is, or in the past three years
has been, employed in a professional capacity by our independent
public accountants, or has worked for such firm in any capacity on
our audit; (e) the director or a member of the director’s
immediate family is, or in the past three years has been, employed
as an executive officer of a company where one of our executive
officers serves on the compensation committee; or (f) the director
or a member of the director’s immediate family is an
executive officer of a company that makes payments to, or receives
payments from, us in an amount which, in any twelve-month period
during the past three years, exceeds the greater of $1,000,000 or
two percent of that other company’s consolidated gross
revenues.
-12-
Our Board has
undertaken a review of its composition, the composition of its
committees and the independence of each director. Based upon
information requested from and provided by each director concerning
his or her background, employment and affiliations, including
family relationships, our Board has determined that Mr. Saxe, Ms.
Curley, Ms. FitzPatrick, Mr. Gin and Ms. Rotunno are each
“independent” as that term is defined by the rules of
the Nasdaq Stock Market. In making these determinations, our Board
considered the current and prior relationships that each
nonemployee director has with the Company and all other facts and
circumstances that our Board deemed relevant.
Board Committees and Charters
Our
Board has established an Audit Committee, a Compensation Committee
and a Corporate Governance and Nominating Committee. Independent
directors currently serving on each committee are as
follows:
|
|
|
Audit Committee
|
|
Compensation Committee
|
|
Corporate Governance and
Nominating Committee
|
|
Jon S. Saxe, J.D., LL.M.
|
|
Chair
|
|
Member
|
|
|
|
Joanne Curley, Ph.D.
|
|
|
|
|
|
Member
|
|
Margaret M. FitzPatrick, M.A.
|
|
|
|
|
|
Member
|
|
Jerry B. Gin, Ph.D.
|
|
Member
|
|
Chair
|
|
|
|
Mary L. Rotunno, J.D.
|
|
Member
|
|
|
|
Chair
|
Members
serve on these committees until their resignation or until
otherwise determined by our Board. Since April 1, 2017, only our
independent directors serve as members of these committees,
including Mr. Saxe, Dr. Gin and Dr. Underdown throughout our fiscal
year ended March 31, 2021, Dr. Curley since April 23, 2021 and Ms.
FitzPatrick and Ms. Rotunno since July 21, 2021. As previously
noted, Dr. Underdown retired from the Board on July 21,
2021.
During
our fiscal year ended March 31, 2021, the Audit Committee of our
Board consisted of Mr. Saxe, who serves as the committee chairman,
Dr. Underdown and Dr. Gin. Mr. Saxe is our Audit Committee
financial expert, as that term is defined under SEC rules
implementing Section 407 of the Sarbanes Oxley Act of 2002, and
possesses the requisite financial sophistication, as defined under
applicable rules. The Audit Committee operates under a written
charter. Our Audit Committee charter is available on our website at
www.vistagen.com
.
Under its charter, our Audit Committee is primarily responsible
for, among other things, the following:
●
overseeing our
accounting and financial reporting process;
●
selecting,
retaining and replacing our independent auditors and evaluating
their qualifications, independence and performance;
●
reviewing and
approving scope of the annual audit and audit fees;
●
monitoring rotation
of partners of independent auditors on engagement team as required
by law;
●
discussing with
management and independent auditors the results of annual audit and
review of quarterly financial statements;
●
reviewing adequacy
and effectiveness of internal control policies and
procedures;
●
approving retention
of independent auditors to perform any proposed permissible
non-audit services;
●
overseeing internal
audit functions and annually reviewing audit committee charter and
committee performance; and
●
preparing the audit
committee report that the SEC requires in our annual proxy
statement.
-13-
Compensation Committee
During
our fiscal year ended March 31, 2021, the Compensation Committee of
our Board was composed of Dr. Underdown, who served as the
committee chairman, Mr. Saxe, and Dr. Gin. Our Compensation
Committee charter is available on our website at
www.vistagen.com
. Under its
charter, the Compensation Committee is primarily responsible for,
among other things, the following:
●
reviewing and
approving our compensation programs and arrangements applicable to
our executive officers (as defined in Rule I 6a-I (f) of the
Securities Exchange Act of 1934, as amended (the
Exchange Act
)), including all
employment-related agreements or arrangements under which
compensatory benefits are awarded or paid to, or earned or received
by, our executive officers, including, without limitation,
employment, severance, change of control and similar agreements or
arrangements;
●
determining the
objectives of our executive officer compensation
programs;
●
ensuring corporate
performance measures and goals regarding executive officer
compensation are set and determining the extent to which they are
achieved and any related compensation earned;
●
establishing goals
and objectives relevant to Chief Executive Officer compensation,
evaluating Chief Executive Officer performance in light of such
goals and objectives, and determining Chief Executive Officer
compensation based on the evaluation;
●
endeavoring to
ensure that our executive compensation programs are effective in
attracting and retaining key employees and reinforcing business
strategies and objectives for enhancing stockholder value,
monitoring the administration of incentive-compensation plans and
equity-based incentive plans as in effect and as adopted from time
to time by the Board;
●
reviewing and
approving any new equity compensation plan or any material change
to an existing plan; and
●
reviewing and
approving any stock option award or any other type of award as may
be required for complying with any tax, securities, or other
regulatory requirement, or otherwise determined to be appropriate
or desirable by the committee or Board.
Corporate Governance and Nominating Committee
During
our fiscal year ended March 31, 2021, the Corporate Governance and
Nominating Committee of our Board was composed of Dr. Gin, who
served as the committee chairman, Mr. Saxe, Dr. Underdown and Ms.
Cunningham. Dr. Curley was appointed to the committee in April 2021
concurrent with her appointment to the Board. Ms.
Cunningham’s membership on the committee terminated upon her
acceptance of employment by the Company as Chief Commercial Officer
effective May 1, 2021, when she was no longer considered an
independent director under the standards established by the SEC and
the rules of the Nasdaq Stock Market. Our Corporate Governance and
Nominating Committee charter is available on our website at
www.vistagen.com
.
Under its charter, the Corporate Governance and Nominating
Committee is primarily responsible for, among other things, the
following:
●
monitoring the size
and composition of the Board;
●
making
recommendations to the Board with respect to the nominations or
elections of our directors;
●
reviewing the
adequacy of our corporate governance policies and procedures and
our Code of Business Conduct and Ethics, and recommending any
proposed changes to the Board for approval; and
●
considering any
requests for waivers from our Code of Business Conduct and Ethics
and ensure that we disclose such waivers as may be required by the
exchange on which we are listed, if any, and rules and regulations
of the SEC.
-14-
Compensation Committee Interlocks and Insider
Participation
The
Compensation Committee of our Board currently consists of Mr. Saxe
and Dr. Gin, each of whom is an independent, nonemployee director.
None of the members of the Compensation Committee has a
relationship that would constitute an interlocking relationship
with executive officers or directors of another
entity.
Board Leadership Structure
The
Board currently separates the roles of Chief Executive Officer and
Chairman of the Board in recognition of the differences between the
two roles. Our Chief Executive Officer, who is also a member of our
Board, is responsible for setting the strategic direction of the
Company and the day-to-day leadership and performance of the
Company, while the Chairman of the Board provides guidance to the
Chief Executive Officer and sets the agenda for the Board meetings
and presides over meetings of the Board. Although these roles are
currently separate, the Board believes it should be able to freely
select the Chairman of the Board based on criteria that it deems to
be in the best interest of the Company and its stockholders, and
therefore one person may, in the future, serve as both the Chief
Executive Officer and Chairman of the Board.
Board Role in Risk Assessment
Management, in
consultation with outside professionals, as applicable, identifies
risks associated with the Company’s operations, strategies
and financial statements. Risk assessment is also performed through
periodic reports received by the Audit Committee from management,
counsel and the Company’s independent registered public
accountants relating to risk assessment and management. Audit
Committee members meet privately in executive sessions with
representatives of the Company’s independent registered
public accountants. The Board also provides risk oversight through
its periodic reviews of the financial and operational performance
of the Company.
Code of Ethics
We have
adopted a Code of Business Conduct and Ethics applicable to our
employees, officers and directors. Our Code of Business
Conduct and Ethics is available on our website at
www.vistagen.com
. We
intend to disclose any future amendments to certain provisions of
our Code of Business Conduct and Ethics, or waivers of these
provisions, on our website or in filings with the SEC under the
Exchange Act.
Stockholder Communications
If you
wish to communicate with the Board, you may send your communication
in writing to:
VistaGen
Therapeutics, Inc.
343
Allerton Avenue
South
San Francisco, California 94080
Attn:
Corporate Secretary
You
must include your name and address in the written communication and
indicate whether you are a stockholder of the Company. The
Corporate Secretary will review any communication received from a
stockholder, and all material and appropriate communications from
stockholders will be forwarded to the appropriate director or
directors or committee of the Board based on the subject
matter.
-15-
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF
DIRECTORS
The
Audit Committee has reviewed and discussed with management and OUM
& Co. LLP (
OUM
), our
independent registered public accounting firm, the audited
consolidated financial statements in the VistaGen Therapeutics,
Inc. Annual Report on Form 10-K for the year ended March 31, 2021.
The Audit Committee also discussed with OUM those matters required
to be discussed by Public Company Accounting Oversight Board
(
PCAOB
) Auditing Standard
No. 16.
OUM
also provided the Audit Committee with the written disclosures and
the letter required by the applicable requirements of the PCAOB
regarding the independent auditor’s communication with the
Audit Committee concerning independence. The Audit Committee has
discussed with the registered public accounting firm their
independence from our Company.
Based
on its discussions with management and the registered public
accounting firm, and its review of the representations and
information provided by management and the registered public
accounting firm, including as set forth above, the Audit Committee
recommended to our Board of Directors that the audited financial
statements be included in our Annual Report on Form 10-K for the
year ended March 31, 2021.
|
|
Respectfully
Submitted by:
MEMBERS
OF THE AUDIT COMMITTEE
Jon S.
Saxe, Audit Committee Chairman
Jerry
B. Gin
Brian
J. Underdown
|
Dated:
June 22, 2021
As
noted in Proposal No. 3 below, on July 15, 2021, WithumSmith+Brown,
PC, an independent registered public accounting firm (
Withum
), acquired certain assets of
OUM. As a result, on July 15, 2021, OUM resigned as the
Company’s independent registered public accounting firm.
Concurrent with such resignation, the Company, with the approval of
its Audit Committee, consented to the engagement of Withum. Withum
is the Company’s new independent registered public accounting
firm, effective July 15, 2021.
The
information contained above under the caption “
Report of the Audit Committee of the Board of
Directors
” shall not be deemed to be soliciting
material or to be filed with the SEC, nor shall such information be
incorporated by reference into any future filing under the
Securities Act of 1933, as amended, or the Exchange Act, except to
the extent that we specifically incorporate it by reference into
such filing.
-16-
PROPOSAL NO. 2
APPROVAL OF AN AMENDMENT AND RESTATEMENT OF THE COMPANY’S
2019 OMNIBUS EQUITY INCENTIVE PLAN
General
Our
Board unanimously approved the Company’s 2019 Omnibus Equity
Incentive Plan (the
2019
Plan
), on May 27, 2019, and our stockholders adopted it and
ratified all previously issued grants on September 5, 2019. A total
of 7.5 million shares of our common stock were initially authorized
for issuance under the 2019 Plan. Additionally, upon approval of
the 2019 Plan, all shares of common stock remaining authorized and
available for issuance under the Company’s predecessor
Amended and Restated 2016 Stock Incentive Plan (the
2016 Plan
), approximately 1.4 million
shares, automatically became available for issuance under the 2019
Plan.
Why We Are Asking Our Stockholders to Approve the Amended 2019
Plan
As of
the date of this Proxy Statement, approximately 0.9 million shares
remained available for future equity grants under our 2019 Plan. In
addition, the 2019 Plan contains certain provisions our Board no
longer believes are beneficial to the Company or its stockholders.
Accordingly, on July 28, 2021, at the recommendation of the
Compensation Committee of our Board, our Board unanimously approved
of an amendment and restatement of the 2019 Plan (the
Amended 2019 Plan
), a copy of which is
attached to this Proxy Statement as
Appendix A
, to implement the
following changes to the 2019 Plan:
●
in
crease of the
authorized shares of common stock under the Amended 2019 Plan from
7.5 million shares to 18 million shares, which we believe which
will enable us to have a competitive equity incentive program to
compete with our peer group for key talent; and
●
prohibit repricing
of certain awards issued pursuant to the Amended 2019 Plan,
including stock options and stock appreciation rights;
Our
compensation philosophy reflects broad-based eligibility for equity
awards, and we grant awards to substantially all of our employees.
However, we recognize that equity awards dilute existing
stockholders, and, therefore, we are mindful to responsibly manage
the growth of our equity compensation program. We are committed to
effectively monitoring our equity compensation share reserve,
including our “burn rate,” to ensure that we maximize
stockholders’ value by granting the appropriate number of
equity awards necessary to attract, reward, and retain
employees, directors and consultants.
Below
is a summary of the terms and conditions of the Amended 2019 Plan.
Unless otherwise indicated, all capitalized terms shall have the
same meaning as defined in the Amended 2019 Plan.
Summary of the Amended 2019 Plan
|
Awards and Eligible Participants
|
The
Amended 2019 Plan is designed to secure and retain the services of
our employees, non-employee directors and consultants, to
provide incentives for such persons to exert maximum efforts for
the success of the Company and our affiliates, and to provide a
means by which such persons may be given an opportunity to benefit
from increases in the value of our common stock. The Amended 2019
Plan is also designed to align employees’ interests with
stockholder interests.
The
Amended 2019 Plan provides for the grant of stock options, stock
appreciation rights (
SARs
), restricted stock, restricted
stock units, and other stock-based awards, and performance awards,
collectively referred to as “Awards”. Awards may be
granted under the Amended 2019 Plan to officers, employees and
consultants of the Company and our subsidiaries and to our
non-employee directors. Incentive stock options may be granted only
to employees of the Company or one of our
subsidiaries.
|
|
Plan Administration
|
The
Amended 2019 Plan is administered by the Compensation Committee of
the Board. The Compensation Committee, in its discretion, selects
the individuals to whom awards may be granted, the time or times at
which such awards are granted, and the terms of such awards. The
Compensation Committee may delegate its authority to the extent
permitted by applicable law.
The
Compensation Committee sets stock option exercise prices and terms,
except that stock options must be granted with an exercise price
not less than 100% of the fair market value of the common stock on
the date of grant. The Compensation Committee may grant either
incentive stock options, which must comply with Section 422 of the
Code, or nonqualified stock options. At the time of grant, the
Compensation Committee determines the terms and conditions of stock
options, including the quantity, exercise price, vesting periods,
term (which cannot exceed ten years) and other conditions on
exercise.
The
Compensation Committee may grant SARs as a right in tandem with the
number of shares underlying stock options granted under the Amended
2019 Plan or as a freestanding award. Upon exercise, SARs entitle
the holder to receive payment per share in stock or cash, or in a
combination of stock and cash, equal to the excess of the
share’s fair market value on the date of exercise over the
grant price of the SAR.
The
Compensation Committee may also grant awards of restricted stock,
which are shares of common stock subject to specified restrictions,
and restricted stock units, which represent the right to receive
shares of the common stock in the future. These awards may be made
subject to repurchase, forfeiture or vesting restrictions at the
Compensation Committee’s discretion. The restrictions may be
based on continuous service with the Company or the attainment of
specified performance goals, as determined by the Compensation
Committee. Stock units may be paid in stock or cash or a
combination of stock and cash, as determined by the Compensation
Committee.
The
Compensation Committee may condition the grant, exercise, vesting,
or settlement of any award on such performance conditions as it may
specify. We refer to these awards as “performance
awards.” The Compensation Committee may select such business
criteria or other performance measures as it may deem appropriate
in establishing any performance conditions. At March 31, 2021, the
Compensation Committee has not granted any performance
awards.
|
|
Authorized Shares
|
A
to
tal
of 7.5 million shares of common stock was initially authorized for
issuance under the 2019 Plan. In the event our stockholders approve
this Proposal No. 2 at the Annual Meeting, a total of 18 million
shares of our common stock will become available for issuance under
the Amended 2019 Plan.
In the
event any award under the Amended 2019 Plan is canceled,
terminates, expires or lapses for any reason prior to the issuance
of shares or if shares are issued under the Amended 2019 Plan and
thereafter are forfeited to us, the shares subject to such awards
and the forfeited shares will again be available for grant under
the Amended 2019 Plan.
|
|
Vesting
|
N
o
more than 25% of any equity-based awards granted under the Amended
2019 Plan may vest on the grant date of such award. The Board
believes this provision will provide the Company the necessary
flexibility to issue Awards that will both attract new talent,
particularly as the Company advances its late-stage clinical
development and commercialization plans for its drug candidates and
provide incentives sufficient to retain the Company’s
existing employees and directors.
This
requirement does not apply to (i) substitute awards resulting from
acquisitions or (ii) shares delivered in lieu of fully vested cash
awards. In addition, the minimum vesting requirement does not apply
to the Compensation Committee’s discretion to provide for
accelerated exercisability or vesting of any award, including in
cases of retirement, death, disability or a change in control, in
the terms of the award or otherwise. Awards are not transferable
other than by will or the laws of descent and distribution, except
that in certain instances transfers may be made to or for the
benefit of designated family members of the participant for no
consideration.
|
-17-
|
Option Repricing
|
The
Amended 2019 Plan does not permit repricing of outstanding stock
options.
|
|
Change of Control
|
In the
event of a change in control of the Company, the Compensation
Committee may accelerate the time period relating to the exercise
of any outstanding Award, including stock options or restricted
stock units. In addition, the Compensation Committee may take
other action, including (a) providing for the purchase of any award
for an amount of cash or other property that could have been
received upon the exercise of such award had the award been
currently exercisable, (b) subject to certain limitations,
adjusting the terms of the award in a manner determined by the
Compensation Committee to reflect the change in control, or (c)
causing an award to be assumed, or new rights substituted therefor,
by another entity with appropriate adjustments to be made regarding
the number and kind of shares and exercise prices of the award.
“Change in Control” is defined under the Amended 2019
Plan and requires consummation of the applicable
transaction.
|
|
Termination
|
Unless
earlier terminated by the Board, the Amended 2019 Plan will
terminate, and no further awards may be granted, on September 5,
2029, which is ten years after the date on which the 2019 Plan was
approved by our stockholders. The Board may amend, suspend or
terminate the Amended 2019 Plan at any time. To the extent
necessary to comply with applicable provisions of U.S. federal
securities laws, state corporate and securities laws, the Code, the
rules of any applicable stock exchange or national market system,
and the rules of any non-U.S. jurisdiction applicable to Awards
granted to residents therein, we will obtain stockholder approval
of any such amendment to the Amended 2019 Plan in such a manner and
to such a degree as required. The amendment, suspension or
termination of the Amended 2019 Plan or the amendment of an
outstanding award generally may not, without a participant’s
consent, materially impair the participant’s rights under an
outstanding award.
|
-18-
Plan Benefits
Participation in
the Amended 2019 Plan is entirely within the discretion of the
Compensation Committee. Because we cannot predict the predict the
rate at which the Compensation Committee will issue Awards or the
terms of Awards granted under the Amended 2019 Plan, it is not
possible to determine the number of shares that will be purchased
or the value of benefits that may be obtained by executive officers
and other employees under the Amended 2019 Plan in the
future.
The
following table discloses all awards granted to the persons or
groups specified below under the 2019 Plan during our fiscal year
ended March 31, 2021:
|
Name
and Position
|
No.
of Shares
|
|
Shawn K. Singh,
JD
|
600,000
|
|
Chief Executive Officer and Director
|
|
|
|
|
|
H. Ralph
Snodgrass, Ph.D.
|
300,000
|
|
President, Chief Scientific Officer
|
|
|
|
|
|
Mark A Smith, MD, Ph.D.
|
300,000
|
|
Chief
Medical Officer
|
|
|
|
|
|
Jerrold D.
Dotson
|
300,000
|
|
Vice President, Chief Financial Officer, Secretary
|
|
|
|
|
|
Independent
Directors
|
600,000
|
|
|
|
|
Employees
(excluding executive officers) and consultants
|
2,890,000
|
|
|
|
|
Total
|
4,990,000
|
Vote Required and Recommendation
The
affirmative “FOR” vote of a majority of the shares
present in person or by proxy and entitled to vote is necessary for
approval of the Amended 2019 Plan. Unless otherwise instructed on
the proxy or unless authority to vote is withheld, shares
represented by executed proxies will be voted “FOR”
this Proposal No. 2.
The
Board unanimously recommends that stockholders vote
“
FOR
”
approval of the Amended 2019 Plan.
-19-
EXECUTIVE COMPENSATION
Executive Officers
The
Company’s executive officers are appointed by the Board of
Directors (the
Board
) and
serve at the discretion of the Board, subject to the terms of any
employment agreements they may have with the Company. The following
is a brief description of the present and past business experience
of each of the Company’s current executive
officers.
|
Name
|
|
Age
|
|
Position
|
|
Shawn
K. Singh, J.D.
|
|
58
|
|
Chief
Executive Officer and Director
|
|
H.
Ralph Snodgrass, Ph.D.
|
|
71
|
|
President
and Chief Scientific Officer
|
|
Mark A.
Smith, M.D., Ph.D.
|
|
65
|
|
Chief
Medical Officer
|
|
Ann M.
Cunningham, MBA
|
|
53
|
|
Chief
Commercial Officer and Director
|
|
Jerrold
D. Dotson, CPA
|
|
68
|
|
Vice
President, Chief Financial Officer and Secretary
|
Shawn K. Singh, J.D.
Please see Mr. Singh’s biography on page 5 of this Proxy
Statement, under the section titled “
Directors
.”
H. Ralph Snodgrass,
Ph.D.
co-founded VistaGen California with Dr. Gordon Keller
in 1998 and served as the Chief Executive Officer of VistaGen
California until August 2009. Dr. Snodgrass has served as the
President and Chief Scientific Officer of VistaGen California from
inception to the present, and in the same positions with the
Company following the completion of the Merger. He served as a
member of the Board of Directors of VistaGen California from 1998
to 2011. He was appointed to serve on our Board after the
completion of the Merger and served as a Director until June 30,
2021. Prior to founding VistaGen California, Dr. Snodgrass served
as a key member of the executive management team that led
Progenitor, Inc., a biotechnology company focused on developmental
biology, through its initial public offering, and was its Chief
Scientific Officer from June 1994 to May 1998, and its Executive
Director from July 1993 to May 1994. He received his Ph.D. in
immunology from the University of Pennsylvania and has 28 years of
experience in senior biotechnology management and over 10
year’s research experience as an assistant professor at the
Lineberger Comprehensive Cancer Center, University of North
Carolina Chapel Hill School of Medicine, and as a member of the
Institute for Immunology, Basel, Switzerland. Dr. Snodgrass is a
past Board Member of the Emerging Company Section of the
Biotechnology Industry Organization (
BIO
), and past member of the
International Society of Stem Cell Research (
ISSCR
) Industry Committee. Dr.
Snodgrass has published more than 95 scientific papers, is the
inventor on more than 21 patents and a number of patent
applications, has been the Principal Investigator on U.S. federal
and private foundation sponsored research grants with budgets
totaling more than $14.5 million and is recognized as an expert in
stem cell biology with more than 32 years’ experience in the
uses of stem cells as biological tools for research, drug discovery
and development.
Mark A. Smith, M.D.,
Ph.D.
has served
as our Chief Medical Officer since June 2016. Dr. Smith
served as the Clinical Lead for Neuropsychiatry at Teva
Pharmaceuticals from November 2013 through June 2016. He
served as Senior Director of Experimental Medicine, Global Clinical
Development and Innovation at Shire Pharmaceuticals from September
2012 to October 2013 and at AstraZeneca Pharmaceutical Company
as Executive Director of Clinical Development and in other senior
positions from June 2000 through September 2012. He served as
a Senior Investigator and Principal Research Scientist in CNS
Diseases Research at DuPont Pharmaceutical Company from 1996 to
2000 and in the Biological Psychiatry and Clinical
Neuroendocrinology Branches of the National Institute of Mental
Health from 1987 through 1996. Dr. Smith has significant
expertise in drug discovery and development and clinical trial
design and execution, having directed approximately fifty clinical
trials from Phase 0 through Phase II B and served as
project leader in both the discovery and development of
approximately twenty investigational new drugs aimed at depression,
anxiety, schizophrenia and other disorders. Dr. Smith
received his Bachelor of Science and Master of Science degrees in
Molecular Biophysics and Biochemistry from Yale University; his M.D
and Ph.D. in Physiology and Pharmacology from the University of
California, San Diego and completed his residency at Duke
University Medical Center.
Ann M. Cunningham,
MBA.
Please see Ms. Cunningham’s biography on page 5
of this Proxy Statement, under the section titled
“
Directors
.”
-20-
Jerrold D. Dotson,
CPA
has served as our Chief Financial Officer since
September 2011, as our Corporate Secretary since October 2013 and
as a Vice President since February 2014. Mr. Dotson served as
Corporate Controller for Discovery Foods Company, a privately held
Asian frozen foods company from January 2009 to September
2011. From February 2007 through September 2008, Mr.
Dotson served as Vice President, Finance and Administration
(principal financial and accounting officer) for Calypte Biomedical
Corporation (OTCBB: CBMC), a publicly held biotechnology
company. Mr. Dotson served as Calypte’s Corporate
Secretary from 2001 through September 2008. He also
served as Calypte’s Director of Finance from January 2000
through July 2005 and was a financial consultant to Calypte from
August 2005 through January 2007. Prior to joining
Calypte, from 1988 through 1999, Mr. Dotson worked in various
financial management positions, including Chief Financial Officer,
for California & Hawaiian Sugar Company, a privately held
company. Mr. Dotson is licensed as a CPA in California
and received his B.S. degree in Business Administration with a
concentration in accounting from Abilene Christian
College.
Our Compensation Objectives
Our
compensation practices are designed to attract key employees and to
retain, motivate and reward our executive officers for their
performance and contribution to our long-term success. Our Board,
through the Compensation Committee, seeks to compensate our
executive officers by combining short and long-term cash and equity
incentives. It also seeks to reward the achievement of corporate
and individual performance objectives, and to align executive
officers’ incentives with stockholder value creation. When
possible, the Compensation Committee seeks to tie individual goals
to the area of the executive officer’s primary
responsibility. These goals may include the achievement of specific
financial or business development goals. Also, when possible and
appropriate taking into account the Company’s financial
condition and other related facts and circumstances, the
compensation committee seeks to set performance goals that reach
across all business areas and include achievements in
finance/business development and corporate
development.
The
Compensation Committee makes decisions regarding salaries, annual
bonuses, if any, and equity incentive compensation for our
executive officers, approves corporate goals and objectives
relevant to the compensation of the Chief Executive Officer and our
other executive officers. The Compensation Committee solicits input
from our Chief Executive Officer regarding the performance of our
other executive officers. Finally, the Compensation Committee also
administers our incentive compensation and benefit
plans.
Although we have no
formal policy for a specific allocation between current and
long-term compensation, or cash and non-cash compensation, when
possible and appropriate taking into account the Company’s
financial condition and other related facts and circumstances, we
seek to implement a pay mix for our officers with a relatively
equal balance of both, providing a competitive salary with a
significant portion of compensation awarded on both corporate and
personal performance.
Compensation Components
As a
general rule, and when possible and appropriate taking into account
the Company’s financial condition and other related facts and
circumstances, our compensation consists primarily of three
elements: base salary, annual bonus and long-term equity
incentives. We describe each element of compensation in more detail
below.
Base Salary
Base
salaries for our executive officers are established based on the
scope of their responsibilities and their prior relevant
experience, taking into account competitive market compensation
paid by other companies in our industry for similar positions and
the overall market demand for such executives, both initially at
the time of hire and thereafter, to ensure that we retain our
executive management team. An executive officer’s base salary
is also determined by reviewing the executive officer’s other
compensation to ensure that the executive officer’s total
compensation is in line with our overall compensation
philosophy.
Base
salaries are reviewed periodically as deemed necessary by the
Compensation Committee and increased for merit reasons, based on
the executive officers’ success in meeting or exceeding
individual objectives. Additionally, we may adjust base salaries as
warranted throughout the year for promotions or other changes in
the scope or breadth of an executive officer’s role or
responsibilities.
-21-
Annual Bonus
The
Compensation Committee assesses the level of the executive
officer’s achievement of meeting individual goals, as well as
that executive officer’s contribution towards our
corporate-wide goals. The amount of the cash bonus depends on the
level of achievement of the individual performance goals, with a
target bonus generally set as a percentage of base salary and based
on the achievement of pre-determined milestones. For the
year ended March 31, 2020, each Named Executive Officer
(
NEO
) serving during that
period was awarded a bonus by the Compensation Committee in the
amount set forth in the Summary Compensation Table below. At the
time of this Proxy Statement, the Compensation Committee has not
determined or awarded a bonus to any NEO for our fiscal year ended
March 31, 2021. Payment of a bonus to a NEO for our fiscal year
ended March 31, 2021, if any, is at the discretion of the
Compensation Committee which may consider factors other than
attainment of individual or corporate goals in its determination of
bonus amounts to be granted.
Long-Term Equity Incentives
The
Compensation Committee believes that to attract and retain
management, employees and independent directors, the compensation
paid to these persons should include non-cash equity-based
compensation, in addition to base salary and potential annual cash
incentives, that is competitive with peer companies. The
Compensation Committee determines the amount and terms of non-cash
equity-based compensation granted under our stock option plans or
pursuant to other awards made to our executives, employees and
independent directors. Any long-term equity compensation granted to
our management, employees and independent directors does not
represent cash payments made to such individuals, and there is no
guarantee that any recipients of awards granted as long-term equity
compensation will realize any cash value as a result of the
awards.
During
the year ended March 31, 2021, the Compensation Committee granted
stock options to management, employees and independent directors as
a part of each individual's long-term compensation. The options
have a term of ten years, and an exercise price that was at or
above the market price of our common stock on the grant date, which
the Compensation Committee believes align the long-term interests
of our management, employees and independent directors with those
of our stockholders.
2021 Summary Compensation Table
The
following table shows information regarding the compensation of our
NEOs for services performed in the fiscal years ended March 31,
2021 and 2020.
-22-
|
Name
and Principal
|
Fiscal
|
Salary
|
Bonus
(7)
|
Option
Awards
(1)(8)(9)
|
All
Other Compensation
|
Total
|
|
Position
|
Year
|
($)
|
($)
|
($)
|
($)
|
($)
|
|
|
|
|
|
|
|
|
|
Shawn K. Singh,
J.D.
(2)
|
2021
|
511,000
|
$
333,660
|
439,618
|
-
|
1,284,278
|
|
Chief Executive Officer
|
2020
|
498,000
|
-
|
435,667
|
-
|
933,667
|
|
|
|
|
|
|
|
|
|
H. Ralph Snodgrass,
Ph.D.
(3)
|
2021
|
422,638
|
125,055
|
219,424
|
-
|
767,117
|
|
President, Chief Scientific Officer
|
2020
|
416,850
|
-
|
254,405
|
-
|
671,255
|
|
|
|
|
|
|
|
|
|
Mark A. Smith,
M.D., Ph.D.
(4)
|
2021
|
422,638
|
125,055
|
219,445
|
-
|
767,138
|
|
Chief Medical Officer
|
2020
|
416,850
|
-
|
179,988
|
-
|
596,838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jerrold D. Dotson
(5)
|
2021
|
374,375
|
110,250
|
219,399
|
-
|
704,024
|
|
Vice President, Chief Financial Officer and Secretary
|
2020
|
367,500
|
-
|
229,571
|
-
|
597,071
|
|
|
|
|
|
|
|
|
|
Ann M.
Cunningham
(6)
|
2021
|
-
|
-
|
-
|
-
|
-
|
|
Chief Commercial Officer
|
2020
|
-
|
-
|
-
|
-
|
-
|
(1)
The
amounts in the Option Awards column represent the aggregate grant
date fair value of options to purchase shares of our common stock
awarded to the NEOs during the fiscal year presented, computed in
accordance with the Financial Accounting Standards Board’s
Accounting Standards Codification Topic 718, Compensation –
Stock Compensation (
ASC
718
). The amounts in this column do not represent any cash
payments actually received by the NEOs with respect to any of such
options to purchase shares of our common stock awarded to them
during the periods presented. With the exception of Mr. Dotson, who
in June 2021 exercised and held certain vested options granted
during the fiscal years ended 2020 and 2021, none of the NEOs have
exercised any of such options to purchase common stock granted
during the fiscal years ended 2020 or 2021, and there can be no
assurance that any of them will ever realize any of the ASC 718
grant date fair value amounts presented in the Option Awards
column.
(2)
Mr.
Singh became Chief Executive Officer of VistaGen Therapeutics, Inc.
(a California corporation) (
VistaGen California
) on August 20,
2009 and our Chief Executive Officer in May 2011, in connection
with the Merger. Pursuant to his January 2010 employment agreement,
as amended in June 2016, Mr. Singh’s annual base cash salary,
was contractually set at $395,000. The Compensation Committee has
since adjusted Mr. Singh’s base annual salary to $498,000
effective in April 2019 and to $550,000 effective in January 2021.
Pursuant to his employment agreement, Mr. Singh is eligible to
receive an annual cash incentive bonus of up to fifty percent (50%)
of his base cash salary.
(3)
Through
August 20, 2009, Dr. Snodgrass served as VistaGen
California’s President and Chief Executive Officer, at which
time he became its President and Chief Scientific Officer. He
became our President and Chief Scientific Officer in May 2011, in
connection with the Merger. Pursuant to his January 2010
employment agreement, as amended in June 2016, Dr. Snodgrass’
annual base cash salary, was contractually set at $350,000. The
Compensation Committee has since adjusted Dr. Snodgrass’ base
annual salary to $416,850 effective in April 2019 and to $440,000
effective in January 2021. Pursuant to his employment
agreement, Dr. Snodgrass is eligible to receive an annual cash
incentive bonus of up to fifty percent (50%) of his base cash
salary.
(4)
Dr.
Smith has served as our Chief Medical Officer since June 2016.
During our fiscal year ended March 31, 2020, Dr. Smith’s
annual base cash salary was $416,850. The Compensation Committee
adjusted Dr. Smith’s base annual salary to $440,000 effective
in January 2021.
(5)
Mr. Dotson has
served as our Chief Financial Officer since September 2011. During
our fiscal year ended March 31, 2020, Mr. Dotson’s annual
base cash salary was $367,500. The Compensation Committee adjusted
Mr. Dotson’s base annual salary to $395,000 effective in
January 2021.
(6)
Ms. Cunningham was
an independent director until she joined the Company as Chief
Commercial Officer in May 2021. Accordingly, her compensation is
reported in the section captioned Director Compensation above. Upon
her employment with the Company, her annual base cash salary was
set at $425,000.
(7)
Amounts
reported in the Bonus column for fiscal 2021 reflect bonuses
awarded by the Compensation Committee and earned during the period
from April 1, 201
9 through December
31, 2020 by each NEO for attainment of performance-based objectives
during that period. No cash bonus awards were approved by the
Compensation Committee or paid to the NEOs during the fiscal year
ended March 31, 2020.
|
|
|
-23-
(8)
The
amounts in the table below do not represent any cash payments
actually received by the NEOs with respect to any of such options
to purchase shares of our common stock awarded to them during the
periods presented. Rather, the table below provides information
regarding the option awards we granted to the NEOs during Fiscal
2021 and 2020 and the assumptions used in the Black Scholes Option
Pricing Model to determine the grant date fair values of the
respective awards.
|
Option
Award Compensation –
|
Option
Grant
|
Option
Grant
|
|
|
Fiscal
Year Ended March 31, 2021
|
4/23/2020
|
12/30/2020
|
Total
|
|
|
|||
|
Mr.
Singh
|
$
80,404
|
$
359,214
|
$
439,618
|
|
Dr.
Snodgrass
|
$
40,202
|
$
179,222
|
$
219,424
|
|
Dr.
Smith
|
$
40,188
|
$
179,257
|
$
219,445
|
|
Mr.
Dotson
|
$
40,177
|
$
179,222
|
$
219,399
|
|
|
|
|
|
|
Option
Shares Granted -
|
Option
Grant
|
Option
Grant
|
|
|
Fiscal
Year Ended March 31, 2021
|
04/23/2020
|
12/30/2020
|
Total
|
|
|
|
|
|
|
Mr.
Singh
|
300,000
|
300,000
|
600,000
|
|
Dr.
Snodgrass
|
150,000
|
150,000
|
300,000
|
|
Dr.
Smith
|
150,000
|
150,000
|
300,000
|
|
Mr.
Dotson
|
150,000
|
150,000
|
300,000
|
|
|
|
|
|
|
Option
Award Assumptions –
|
Option
Grant
|
Option
Grant
|
|
|
|
Fiscal
Year Ended March 31, 2021
|
4/23/2020
|
12/30/2020
|
|
|
|
|
|
|
|
|
|
Market price per
share
|
$
0.398
|
$
1.77
|
|
|
|
Exercise price per
share
|
$
0.398
|
$
1.77
|
|
|
|
Risk-free interest
rate
|
0.40
%
|
0.43
%
|
|
|
|
Volatility
|
83.89
%
|
84.27
%
|
|
|
|
Expected term
(years)
|
5.39
|
5.39
|
|
|
|
Dividend
rate
|
0.0
%
|
0.0
%
|
|
|
|
|
|
|
|
|
|
Fair value per
share
|
$
0.27
|
$
1.20
|
|
|
|
Aggregate
shares
|
750,000
|
750,000
|
|
|
|
|
|
|
|
|
(9)
The
amounts in the table below do not represent any cash payments
actually received by the NEOs with respect to any of such options
to purchase shares of our common stock awarded to them during the
periods presented. Rather, the table below provides information
regarding the option awards we granted to the NEO’s during
Fiscal 2020 and the assumptions used in the Black Scholes Option
Pricing Model to determine the grant date fair values of the
respective awards.
|
Option
Award Compensation –
|
Option
Grant
|
Option
Grant
|
Option
Grant
|
|
|
Fiscal
Year Ended March 31, 2020
|
5/23/2019
|
9/5/2019
|
10/21/2019
|
Total
|
|
|
|
|
|
|
|
Mr.
Singh
|
$
42,182
|
$
95,803
|
$
297,682
|
$
435,667
|
|
Dr.
Snodgrass
|
80,747
|
-
|
173,658
|
254,405
|
|
Dr.
Smith
|
80,747
|
-
|
99,241
|
179,988
|
|
Mr.
Dotson
|
80,747
|
-
|
148,824
|
229,571
|
|
|
$
284,423
|
$
95,803
|
$
719,405
|
$
1,099,631
|
|
|
|
|
|
|
|
Option
Shares Granted -
|
Option
Grant
|
Option
Grant
|
Option
Grant
|
|
|
Fiscal
Year Ended March 31, 2020
|
5/23/2019
|
9/5/2019
|
10/21/2019
|
Total
|
|
|
|
|
|
|
|
Mr.
Singh
|
80,000
|
170,000
|
300,000
|
550,000
|
|
Dr.
Snodgrass
|
150,000
|
-
|
175,000
|
325,000
|
|
Dr.
Smith
|
150,000
|
-
|
100,000
|
250,000
|
|
Mr.
Dotson
|
150,000
|
-
|
150,000
|
300,000
|
|
|
530,000
|
170,000
|
725,000
|
1,425,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
Award Assumptions –
|
Option
Grant
|
Option
Grant
|
Option
Grant
|
|
|
Fiscal
Year Ended March 31, 2020
|
5/23/2019
|
9/5/2019
|
10/21/2019
|
|
|
|
|
|
|
|
|
Market price per
share
|
$
0.80
|
0.84
|
$
1.41
|
|
|
Exercise price per
share
|
$
1.00
|
1.00
|
$
1.41
|
|
|
Risk-free interest
rate
|
2.13
%
|
1.45
%
|
1.62
%
|
|
|
Volatility
|
85.9
%
|
86.0
%
|
87.5
%
|
|
|
Expected term
(years)
|
5.58
|
5.58
|
5.39
|
|
|
Dividend
rate
|
0.0
%
|
0.0
%
|
0.0
%
|
|
|
Fair value per
share
|
$
0.54
|
0.56
|
$
0.99
|
|
|
Aggregate
shares
|
530,000
|
170,000
|
725,000
|
|
No NEO
is entitled to receive, nor has any NEO received, any perquisites
or other personal benefits that, in the aggregate, are worth over
$50,000 or over 10% of their base salary.
-24-
Benefit Plans
401(k) Plan
We
maintain, through a registered agent, a retirement and deferred
savings plan for our officers and employees. This plan is intended
to qualify as a tax-qualified plan under Section 401(k) of the
Internal Revenue Code of 1986, as amended. The retirement and
deferred savings plan provides that each participant may contribute
a portion of his or her pre-tax compensation, subject to statutory
limits. Under the plan, each employee is fully vested in his or her
deferred salary contributions. Employee contributions are held and
invested by the plan’s trustee. The retirement and deferred
savings plan also permits us to make discretionary contributions
subject to established limits and a vesting schedule. To
date, we have not made any discretionary contributions to the
retirement and deferred savings plan on behalf of participating
employees.
2019 Employee Stock Purchase Plan
Following the
approval of our 2019 Employee Stock Purchase Plan (the
2019 ESPP
) by our stockholders in
September 2019, the 2019 ESPP became operational effective January
1, 2020. Under our 2019 ESPP, shares of our common stock will be
available for purchase by eligible employees, including our NEOs,
who participate in the plan. Eligible employees will be entitled to
purchase, by means of payroll deductions, limited amounts of our
common stock at a discount to the market price during periodic
option periods under the 2019 ESPP. At March 31, 2021, two option
periods have been completed under the 2019 ESPP. The initial
option period under the 2019 ESPP was completed on June 30, 2020
and Mr. Singh, Dr. Snodgrass, Dr. Smith and Mr. Dotson each
purchased 5,000 shares of our common stock, the maximum number of
shares each such NEO is permitted to purchase during any option
period pursuant to the 2019 ESPP, at a price of $0.448 per share in
accordance with the provisions of the 2019 ESPP. The second option
period under the 2019 ESPP was completed on December 31, 2020 and
each of the NEOs again purchased 5,000 shares of our common stock
at a price of $0.4521 per share in accordance with the provisions
of the 2019 ESPP.
The
third option period under the 2019 ESPP was completed on June 30,
2021 and Mr. Singh, Dr. Snodgrass, Dr. Smith and Mr. Dotson
purchased 5,000 shares; 3,391 shares, 2,260 shares and 3,044 shares
of our common stock, respectively, at a price of $1.9465 per share
in accordance with the provisions of the 2019 ESPP.
-25-
Outstanding Warrants and Options at March 31, 2021
The
following table provides information regarding each unexercised
stock option and warrant to purchase shares of our common stock
held by each of the NEOs as of March 31, 2021
|
|
|
|
Stock Options and Warrants at March 31, 2021
|
|
||||||||||
|
Name
|
|
|
Number of Securities Underlying Unexercised Options and
Warrants
(#) Exercisable
|
|
|
|
Number of Securities
Underlying Unexercised Options and Warrants
(#) Unexercisable
|
|
|
|
Exercise
Price ($)
|
|
Expiration
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shawn
K. Singh, J.D.
|
|
|
5,000
|
|
|
|
-
|
|
|
|
1.50
|
|
4/26/2021
|
|
|
|
|
|
72,000
|
|
|
|
-
|
|
|
|
7.00
|
|
3/3/2023
|
|
|
|
|
|
200,000
|
|
(1)
|
|
-
|
|
(1)
|
|
1.50
|
|
6/19/2026
|
|
|
|
|
|
100,000
|
|
|
|
-
|
|
|
|
1.50
|
|
11/9/2026
|
|
|
|
|
|
175,000
|
|
|
|
-
|
|
|
|
1.50
|
|
4/26/2027
|
|
|
|
|
|
125,000
|
|
|
|
-
|
|
|
|
1.56
|
|
9/19/2027
|
|
|
|
|
|
300,000
|
|
|
|
-
|
|
|
|
1.16
|
|
2/2/2028
|
|
|
|
|
|
220,000
|
|
(2)
|
|
-
|
|
(2)
|
|
1.70
|
|
1/14/2029
|
|
|
|
|
|
68,337
|
|
(4)
|
|
11,663
|
|
(4)
|
|
1.00
|
|
5/23/2029
|
|
|
|
|
|
106,250
|
|
(6)
|
|
63,750
|
|
(6)
|
|
1.00
|
|
9/5/2029
|
|
|
|
|
|
234,375
|
|
(7)
|
|
65,625
|
|
(7)
|
|
1.41
|
|
10/21/2029
|
|
|
|
|
|
178,125
|
|
(8)
|
|
121,875
|
|
(8)
|
|
0.398
|
|
4/23/2030
|
|
|
|
|
|
103,125
|
|
(9)
|
|
196,875
|
|
(9)
|
|
1.77
|
|
12/30/2030
|
|
|
Total:
|
|
|
1,887,212
|
|
|
|
459,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
H.
Ralph Snodgrass, Ph.D.
|
|
|
50,000
|
|
|
|
-
|
|
|
|
7.00
|
|
3/3/2023
|
|
|
|
|
|
125,000
|
|
(1)
|
|
-
|
|
(1)
|
|
1.50
|
|
6/19/2026
|
|
|
|
|
|
80,000
|
|
|
|
-
|
|
|
|
1.50
|
|
11/9/2026
|
|
|
|
|
|
125,000
|
|
|
|
-
|
|
|
|
1.50
|
|
4/26/2027
|
|
|
|
|
|
100,000
|
|
|
|
-
|
|
|
|
1.56
|
|
9/19/2027
|
|
|
|
|
|
175,000
|
|
|
|
-
|
|
|
|
1.16
|
|
2/2/2028
|
|
|
|
|
|
125,000
|
|
(3)
|
|
-
|
|
(4)
|
|
1.27
|
|
8/5/2028
|
|
|
|
|
|
106,250
|
|
(5)
|
|
43,750
|
|
(8)
|
|
1.00
|
|
5/23/2029
|
|
|
|
|
|
136,719
|
|
(7)
|
|
38,281
|
|
(10)
|
|
1.41
|
|
10/21/2029
|
|
|
|
|
|
89,063
|
|
(8)
|
|
60,937
|
|
|
|
0.398
|
|
4/23/2030
|
|
|
|
|
|
51,563
|
|
(9)
|
|
98,437
|
|
|
|
1.77
|
|
12/30/2030
|
|
|
Total:
|
|
|
1,163,595
|
|
|
|
241,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A.
Smith, M.D. Ph.D.
|
|
|
180,000
|
|
(1)
|
|
-
|
|
(1)
|
|
1.50
|
|
6/19/2026
|
|
|
|
|
|
80,000
|
|
|
|
-
|
|
|
|
1.50
|
|
11/9/2026
|
|
|
|
|
|
125,000
|
|
|
|
-
|
|
|
|
1.50
|
|
4/26/2027
|
|
|
|
|
|
100,000
|
|
|
|
-
|
|
|
|
1.56
|
|
9/19/2027
|
|
|
|
|
|
200,000
|
|
|
|
-
|
|
|
|
1.16
|
|
2/2/2028
|
|
|
|
|
|
100,000
|
|
(3)
|
|
-
|
|
(3)
|
|
1.27
|
|
8/5/2028
|
|
|
|
|
|
106,250
|
|
(5)
|
|
43,750
|
|
(5)
|
|
1.00
|
|
5/23/2029
|
|
|
|
|
|
78,125
|
|
(7)
|
|
21,875
|
|
(7)
|
|
1.41
|
|
10/21/2029
|
|
|
|
|
|
89,063
|
|
(8)
|
|
60,937
|
|
(8)
|
|
0.398
|
|
4/23/2030
|
|
|
|
|
|
51,563
|
|
(9)
|
|
98,437
|
|
(9)
|
|
1.77
|
|
12/30/2030
|
|
|
Total:
|
|
|
1,110,001
|
|
|
|
224,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jerrold
D. Dotson
|
|
|
5,001
|
|
|
|
-
|
|
|
|
1.50
|
|
10/30/2022
|
|
|
|
|
|
1,000
|
|
|
|
-
|
|
|
|
1.50
|
|
10/27/2023
|
|
|
|
|
|
10,000
|
|
|
|
-
|
|
|
|
7.00
|
|
3/3/2023
|
|
|
|
|
|
75,000
|
|
(1)
|
|
-
|
|
(1)
|
|
1.50
|
|
6/19/2026
|
|
|
|
|
|
50,000
|
|
|
|
-
|
|
|
|
1.50
|
|
11/9/2026
|
|
|
|
|
|
100,000
|
|
|
|
-
|
|
|
|
1.50
|
|
4/26/2027
|
|
|
|
|
|
100,000
|
|
|
|
-
|
|
|
|
1.56
|
|
9/19/2027
|
|
|
|
|
|
200,000
|
|
|
|
-
|
|
|
|
1.16
|
|
2/2/2028
|
|
|
|
|
|
100,000
|
|
(3)
|
|
-
|
|
(3)
|
|
1.27
|
|
8/5/2028
|
|
|
|
|
|
106,250
|
|
(5)
|
|
43,750
|
|
(5)
|
|
1.00
|
|
5/23/2029
|
|
|
|
|
|
117,188
|
|
(7)
|
|
32,812
|
|
(7)
|
|
1.41
|
|
10/21/2029
|
|
|
|
|
|
89,063
|
|
(8)
|
|
60,937
|
|
(8)
|
|
0.398
|
|
4/23/2030
|
|
|
|
|
|
51,563
|
|
(9)
|
|
98,437
|
|
(9)
|
|
1.77
|
|
12/30/2030
|
|
|
Total:
|
|
|
1,005,065
|
|
|
|
235,936
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ann
M. Cunningham
|
|
|
25,000
|
|
|
|
-
|
|
|
|
1.74
|
|
1/10/2029
|
|
|
|
|
|
35,417
|
|
(5)
|
|
14,583
|
|
(5)
|
|
1.00
|
|
5/23/2029
|
|
|
|
|
|
58,594
|
|
(7)
|
|
16,406
|
|
(7)
|
|
1.41
|
|
10/21/2029
|
|
|
|
|
|
44,531
|
|
(8)
|
|
30,469
|
|
(8)
|
|
0.398
|
|
4/23/2030
|
|
|
|
|
|
25,781
|
|
(9)
|
|
49,219
|
|
(9)
|
|
1.77
|
|
12/30/2030
|
|
|
Total:
|
|
|
189,323
|
|
|
|
101,677
|
|
|
|
|
|
|
|
-26-
(1)
Represents an
option to purchase shares of our common stock at $3.49 per share
granted on June 19, 2016 when the market price of our common stock
was $3.49 per share. The option became exercisable for 25% of the
shares granted on June 19, 2017 with the remaining shares becoming
exercisable ratably monthly through June 19, 2020, when all shares
granted became fully exercisable. The exercise price of the option
was reduced to $1.50 per share on August 29, 2018.
(2)
Represents
an option to purchase shares of our common stock at $1.70 per share
granted on January 14, 2019 when the market price of our common
stock was $1.70 per share. The option became exercisable for 25% of
the shares granted immediately upon grant, with the remaining
shares becoming exercisable ratably monthly through January 14,
2021, when all shares granted became fully
exercisable.
(3)
Represents
an option to purchase shares of our common stock at $1.27 per share
granted on August 5, 2018 when the market price of our common stock
was $1.27 per share. The option became exercisable for 25% of the
shares granted immediately upon grant, with the remaining shares
becoming exercisable ratably monthly through August 5, 2020, when
all shares granted became fully exercisable.
(4)
Represents
an option to purchase shares of our common stock at $1.00 per share
granted on May 23, 2019 when the market price of our common stock
was $0.80 per share. The option became exercisable for 62.5% of the
shares granted immediately upon grant, with the remaining shares
becoming exercisable ratably monthly through May 23, 2022, when all
shares granted will be fully exercisable.
(5)
Represents
an option to purchase shares of our common stock at $1.00 per share
granted on May 23, 2019 when the market price of our common stock
was $0.80 per share. The option became exercisable for 25% of the
shares granted immediately upon grant, with the remaining shares
becoming exercisable ratably monthly through May 23, 2022, when all
shares granted will be fully exercisable.
(6)
Represents
an option to purchase shares of our common stock at $1.00 per share
granted on September 5, 2019 when the market price of our common
stock was $0.84 per share. The option became exercisable for 25% of
the shares granted immediately upon grant, with the remaining
shares becoming exercisable ratably monthly through September 5,
2022, when all shares granted will be fully
exercisable.
(7)
Represents
an option to purchase shares of our common stock at $1.41 per share
granted on October 21, 2019 when the market price of our common
stock was $1.41 per share. The option became exercisable for 25% of
the shares granted immediately upon grant, with the remaining
shares becoming exercisable ratably monthly through October 21,
2021, when all shares granted will be fully
exercisable.
(8)
Represents
an option to purchase shares of our common stock at $0.398 per
share granted on April 23, 2020 when the market price of our common
stock was $0.398 per share. The option became exercisable for 25%
of the shares granted immediately upon grant, with the remaining
shares becoming exercisable ratably monthly through April 23, 2022,
when all shares granted will be fully exercisable.
(9)
Represents
an option to purchase shares of our common stock at $1.77 per share
granted on December 30, 2020 when the market price of our common
stock was $1.77 per share. The option became exercisable for 25% of
the shares granted immediately upon grant, with the remaining
shares becoming exercisable ratably monthly through December 30,
2022, when all shares granted will be fully
exercisable.
-27-
Employment or Severance Agreements
We have
employment agreements with Mr. Singh and Dr. Snodgrass, the
material terms of which are described below.
Agreement with Mr. Singh
We
entered into an employment agreement with Mr. Singh on April 28,
2010. Under the agreement, as amended on June 22, 2016, Mr.
Singh’s base salary was increased from $347,500 per year to
$395,000 per year, effective June 16, 2016. The Compensation
Committee has subsequently adjusted Mr. Singh’s base annual
salary to $477,000 effective in July 2018, to $498,000 effective in
April 2019 and to $550,000 effective in January 2021. Under his
agreement, Mr. Singh is eligible to receive an annual incentive
cash bonus of up to 50% of his base salary. The Compensation
Committee awarded Mr. Singh a cash bonus of $333,660 for attainment
of performance-based objectives during the 21-month period from
April 1, 2019 through December 31, 2020. The award of his incentive
bonus, if any, is at the discretion of the Compensation Committee
of our Board of Directors. In the event we terminate Mr.
Singh’s employment without cause, he is entitled to receive
severance in an amount equal to:
●
twelve months of
his then-current base salary payable in the form of salary
continuation;
●
a pro-rated portion
of the incentive cash bonus that the Board of Directors determines
in good faith that Mr. Singh earned prior to his termination;
and
●
such amounts
required to reimburse him for Consolidated Omnibus Budget
Reconciliation Act (
COBRA
)
payments for continuation of his medical health benefits for such
twelve-month period.
In
addition, in the event Mr. Singh terminates his employment with
“good reason” following a “change of
control” (each as defined below), he is entitled to twelve
months of his then-current base salary payable in the form of
salary continuation.
Agreement with Dr. Snodgrass
We
entered into an employment agreement with Dr. Snodgrass on April
28, 2010. Under the agreement, as amended on June 22, 2016, Dr.
Snodgrass’s base salary was increased from $305,000 per year
to $350,000 per year, effective June 16, 2016. The Compensation
Committee has subsequently adjusted Dr. Snodgrass’ base
annual salary to $397,000 effective in July 2018, to $416,850
effective in April 2019 and to $440,000 effective in January 2021.
Under his agreement, Dr. Snodgrass is eligible to receive an annual
incentive cash bonus of up to 50% of his base salary. The
Compensation Committee awarded Dr. Snodgrass a cash bonus of
$125,055 for attainment of performance-based objectives during the
21-month period from April 1, 2019 through December 31, 2020. The
award of his incentive bonus, if any, is at the discretion of the
Compensation Committee of the Board of Directors. In the event we
terminate Dr. Snodgrass’s employment without cause, he is
entitled to receive severance in an amount equal to:
●
twelve months of
his then-current base salary payable in the form of salary
continuation;
●
a pro-rated portion
of the incentive bonus that the Board of Directors determines in
good faith that Dr. Snodgrass earned prior to his termination;
and
●
such amounts
required to reimburse him for COBRA payments for continuation of
his medical health benefits for such twelve-month
period.
In
addition, in the event Dr. Snodgrass terminates his employment
with "good reason" (as defined below), he is entitled to twelve
months of his then-current base salary payable in the form of
salary continuation.
-28-
Change of Control Provisions
Pursuant to each of
their respective employment agreements, Dr. Snodgrass is
entitled to severance if he terminates his employment at any time
for “good reason” (as defined below), while
Mr. Singh is entitled to severance if he terminates his
employment for good reason after a change of control. Under their
respective agreements, “good reason” means any of the
following events, if we affect the event without the
executive’s consent (subject to our right to
cure):
●
a material
reduction in the executive’s responsibility; or
●
a material
reduction in the executive’s base salary except for
reductions that are comparable to reductions generally applicable
to similarly situated executives of VistaGen.
Furthermore,
pursuant to their respective employment agreements and their stock
option award agreements, as amended, in the event we terminate the
executive without cause within twelve months of a change of
control, the executive’s remaining unvested option shares
become fully vested and exercisable. Upon a change of control in
which the successor corporation does not assume the
executive’s stock options, the stock options granted to the
executive become fully vested and exercisable.
Pursuant to their
respective employment agreements, a change of control occurs when:
(i) any “person” as such term is used in
Sections 13(d) and 14(d) of the Exchange Act (other than
VistaGen, a subsidiary, an affiliate, or a VistaGen employee
benefit plan, including any trustee of such plan acting as trustee)
becoming the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of VistaGen representing 50% or more of the combined
voting power of VistaGen’s then outstanding securities;
(ii) a sale of substantially all of VistaGen’s assets;
or (iii) any merger or reorganization of VistaGen whether or
not another entity is the survivor, pursuant to which the holders
of all the shares of capital stock of VistaGen outstanding prior to
the transaction hold, as a group, fewer than 50% of the shares of
capital stock of VistaGen outstanding after the
transaction.
In the
event that, following termination of employment, amounts are
payable to an executive pursuant to his employment agreement, the
executive’s eligibility for severance is conditioned on
executive having first signed a release agreement.
Pursuant to their
respective employment agreements, the estimated amount that could
be paid by us assuming that a change of control occurred on the
last business day of our current fiscal year, is $550,000 for
Mr. Singh and $440,000 for Dr. Snodgrass, excluding any
pro-rated portion of an annual or periodic bonus and the imputed
value of accelerated vesting of stock options, if any.
-29-
PROPOSAL NO. 3
RATIFICATION OF THE APPOINTMENT OF
OUM & CO. LLP TO SERVE AS THE COMPANY'S
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE CURRENT FISCAL
YEAR
Upon
recommendation of the Audit Committee of the Board, the Board
appointed OUM & Co. LLP (
OUM
) as our independent registered
public accounting firm for the current fiscal year. Subsequently,
on July 15, 2021, WithumSmith+Brown, PC, an independent registered
public accounting firm (
Withum
), acquired certain assets of
OUM. As a result, on July 15, 2021, OUM resigned as the
Company’s independent registered public accounting firm.
Concurrent with such resignation, the Company, with the approval of
its Audit Committee, consented to the engagement of Withum. Withum
is the Company’s new independent registered public accounting
firm, effective July 15, 2021, and the Board hereby recommends that
the stockholders ratify such appointment.
The
Board may terminate the appointment of Withum as the
Company’s independent registered public accounting firm
without the approval of the Company’s stockholders whenever
the Board deems such termination necessary or
appropriate.
Representatives of
Withum will be present at the Annual Meeting or available by
telephone and will have an opportunity to make a statement if they
so desire and to respond to appropriate questions from
stockholders.
Fees and Services
OUM
served as our independent registered public accounting firm for the
fiscal years ended March 31, 2021 and 2020. Information provided
below includes fees for professional services provided to us by OUM
for our fiscal years ended March 31, 2021 and 2020.
|
|
Fiscal
Years Ended
March
31,
|
|
|
|
2021
|
2020
|
|
|
|
|
|
Audit
fees
|
$
258,600
|
$
242,500
|
|
Audit-related
fees
|
94,000
|
22,400
|
|
Tax
fees
|
14,000
|
16,000
|
|
All other
fees
|
-
|
-
|
|
Total
fees
|
$
366,600
|
$
280,900
|
Audit
Fees:
Audit
fees include fees billed for the annual audit of the
Company’s financial statements and quarterly reviews for the
fiscal years ended March 31, 2021 and 2020, and for services
normally provided by OUM in connection with routine statutory and
regulatory filings or engagements.
Audit-Related Fees:
Audit-related fees
include fees billed for assurance and related services that are
reasonably related to the performance of the annual audit or
reviews of the Company’s financial statements and are not
reported under “
Audit
Fees
.” During our fiscal years ended March 31,
2021 and 2020, OUM billed the Company for services related to
comfort letters and consents for the use of its audit opinion in
our filings of Registration Statements on Form S-3, Form S-1, and
Form S-8 that included or incorporated by reference the
Company’s audited financial statements for the fiscal years
ended March 31, 2020 and 2019.
-30-
Tax Fees:
Tax
fees include fees for professional services for tax compliance, tax
advice and tax planning for the tax years ended March 31, 2020 and
2019.
All Other Fees:
All
other fees include fees for products and services other than those
described above. During our fiscal years ended March 31,
2021 and 2020, no such fees were billed by OUM.
Required Vote and Recommendation
Ratification of the
selection of Withum as the Company’s independent registered
public accounting firm for our fiscal year ending March 31, 2022
requires the affirmative vote of a majority of the shares present
or represented by proxy and entitled to vote at the Annual Meeting.
Unless otherwise instructed on the proxy or unless authority to
vote is withheld, shares represented by executed proxies will be
voted “FOR” the ratification of Withum as the
Company’s independent registered public accounting firm for
our fiscal year ending March 31, 2022.
The
Board unanimously recommends that stockholders vote
“
FOR
”
the ratification of the selection of Withum as our independent
registered public accounting firm for our fiscal year ending March
31, 2022.
-31-
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDERS MATTERS
Security Ownership of Certain Beneficial Owners and
Management
The
following table sets forth certain information with respect to the
beneficial ownership of our common stock as of July 23, 2021
for:
●
each stockholder
known by us to be the beneficial owner of more than five percent
(5%) of shares of our common stock;
●
each of our
directors;
●
each of our named
executive officers; and
●
all of our
directors and executive officers as a group.
Applicable
percentage ownership is based on 192,098,965 shares of common stock
outstanding at July 23, 2021.
In
computing the percentage of shares of common stock beneficially
owned, we deemed to be outstanding all shares of common stock
subject to options or warrants and all shares of our Series A
Preferred Stock, Series B 10% Convertible Preferred Stock and
Series C Convertible Preferred Stock held by that person or entity
that are currently exercisable or exchangeable or that will become
exercisable or exchangeable within 60 days of July 23,
2021.
Unless
otherwise noted below, the address of each beneficial owner listed
in the table is c/o VistaGen Therapeutics, Inc., 343 Allerton
Avenue, South San Francisco, California 94080.
Beneficial Ownership of Common Stock:
|
Name
and address of beneficial owner
|
Number
of shares beneficially owned
|
Percent
of
shares beneficially
owned
(1)
|
|
Executive officers and directors:
|
|
|
|
Shawn K. Singh,
J.D.
(2)
|
2,129,237
|
1.10
%
|
|
H. Ralph Snodgrass,
Ph.D.
(3)
|
1,350,021
|
*
|
|
Mark A. Smith,
M.D., Ph.D.
(4)
|
1,203,510
|
*
|
|
Ann M. Cunningham,
MBA
(5)
|
232,031
|
*
|
|
Jerrold D. Dotson
(6)
|
1,072,112
|
*
|
|
Jon S. Saxe, J.D.,
LL.M.
(7)
|
580,282
|
*
|
|
Joanne Curley,
Ph.D.
(8)
|
25,000
|
*
|
|
Margaret M.
FitzPatrick, M.A.
(9)
|
12,500
|
*
|
|
Jerry B. Gin,
Ph.D., MBA
(10)
|
742,031
|
*
|
|
Mary L. Rotunno,
J.D.
(11)
|
12,500
|
*
|
|
|
|
|
|
All executive
officers and directors as a group (10 persons)
(12)
|
7,309,224
|
3.67
%
|
|
|
|
|
|
5% Stockholders:
|
|
|
|
Entities associated
with New Enterprise Associates
(13)
|
16,302,596
|
8.49
%
|
|
Entities affiliated
with Venrock
(14)
|
16,047,286
|
8.35
%
|
|
Acuta Capital
Partners, LLC
(15)
|
12,295,767
|
6.40
%
|
|
Franklin Advisors,
Inc.
(16)
|
10,865,937
|
5.66
%
|
____________________
* less
than 1%
-32-
|
(1)
|
Based
on 192,098,965 shares of common stock issued and outstanding as of
July 23, 2021.
|
|
(2)
|
Includes
options to purchase 1,985,628 shares of common stock and warrants
to purchase 72,000 restricted shares of common stock exercisable
within 60 days of July 23, 2021.
|
|
(3)
|
Includes
options to purchase 1,208,906 shares of common stock and warrants
to purchase 50,000 restricted shares of common stock exercisable
within 60 days of July 23, 2021.
|
|
(4)
|
Includes
options to purchase 1,191,250 shares of common stock exercisable
within 60 days of July 23, 2021.
|
|
(5)
|
Includes
options to purchase 232,031 shares of common stock exercisable
within 60 days of July 23, 2021.
|
|
(6)
|
Includes
options to purchase 959,866 shares of common stock, including
options to purchase 626 shares of common stock held by Mr.
Dotson’s wife, and warrants to purchase 10,000 restricted
shares of common stock exercisable within 60 days of July 23,
2021.
|
|
(7)
|
Includes
options to purchase 517,031 shares of common stock and warrants to
purchase 7,500 restricted shares of common stock exercisable within
60 days of July 23, 2021.
|
|
(8)
|
Includes
options to purchase 25,000 shares of common stock exercisable
within 60 days of July 23, 2021.
|
|
(9)
|
Includes
options to purchase 12,500 shares of common stock exercisable
within 60 days of July 23, 2021.
|
|
(10)
|
Includes
100,000 restricted shares of common stock held by Dr. Gin’s
wife. Also includes options to purchase 542,031 shares of common
stock exercisable within 60 days of July 23, 2021
|
|
(11)
|
Includes
options to purchase 12,500 shares of common stock exercisable
within 60 days of July 23, 2021
|
|
(12)
|
Includes
100,000 restricted shares of common stock held by Dr. Gin's wife.
Also includes options to purchase 6,686,743 shares of common stock
and warrants to purchase 139,500 restricted shares of common stock
exercisable within 60 days of July 23, 2021.
|
|
|
|
|
(13)
|
Based
upon Schedule 13F filed by Growth Opportunities 17, LLC on May 17,
2021. The shares held by Growth Opportunities 17, LLC (
GEO
) are indirectly held by
N
ew Enterprise
Associates 17, L.P. (
NEA
17
),
which is the sole member of GEO; NEA Partners 17, L.P.
(
NEA
Partners 17
), which is the sole
general partner of NEA 17; and NEA 17 GP, LLC (
NEA 17
LLC
and,
together with NEA Partners 17, the
Control
Entities
), which is the sole
general partner of NEA Partners 17.
The Managing
Members of NEA 17 LLC are
Forest Baskett, Ali
Behbahani, Carmen Chang, Anthony A. Florence, Jr., Liza Landsman,
Mohamad H. Makhzoumi, Joshua Makower, Edward T. Mathers, Scott D.
Sandell, Peter W. Sonsini, Paul Walker and Rick Yang (together,
the
Managers
).
GEO is the record owner of the shares identified herein (the
GEO
Shares
).
As the sole member of GEO, NEA 17 may be deemed to own beneficially
the GEO Shares. As the general partner of NEA 17, NEA Partners 17
may be deemed to own beneficially the GEO Shares. As the sole
general partner of NEA Partners 17, NEA 17 LLC may be deemed to own
beneficially the GEO Shares. As members of NEA 17 LLC, each of the
Managers may be deemed to own beneficially the GEO Shares. Each of
the aforementioned reporting persons disclaims beneficial ownership
of the GEO Shares other than those shares which such person owns of
record.
The principal business address for GEO 10 is
1954 Greenspring Drive, Suite 600, Timonium, MD
21093.
|
|
(14)
|
Based upon the
Company’s records through July
23,
2021. Entities
associated with Venrock that hold the securities listed herein
include Venrock Healthcare Capital Partners II, L.P.; VHCP
Co-Investment Holdings II, LLC and Venrock Healthcare Capital
Partners EG, L.P. VHCP Management II, LLC (
VHCPM
)
is the sole general partner of Venrock Healthcare Capital Partners
II, L.P. and the sole manager of VHCP Co Investment Holdings II,
LLC. VHCP Management EG, LLC (
VHCPEG
)
is the sole general partner of Venrock Healthcare Capital Partners
EG, L.P. Dr. Bong Koh and Nimish Shah are the voting members of
VHCPM and VHCPEG.
The address of each of the
entities and individuals identified in this footnote is
c/o
Venrock
, 7 Bryant Park,
23rd
Floor, New York, NY
10018.
|
|
(15)
|
Based
upon Schedule 13F filed by Acuta Capital Partners, LLC
(
Acuta
) on May 17, 2021.
Anupam Dalal is the Chief Investment Officer and Manfred Yu is the
Manager of Acuta. Both Mr. Dalal and Mr. Yu
have voting and investment authority over all of the shares held by
each of Acuta, and disclaim beneficial ownership
except to the extent of
their indirect pecuniary interests therein
. The business
address for Acuta is 1301 Shoreway Road, Suite 350, Belmont,
California 94002.
|
|
|
|
|
(16)
|
Based
upon Schedule 13F filed by Franklin Resources Inc. on May 17, 2021.
These shares are beneficially owned by one or more open - or closed
- end investment companies or other managed accounts that are
investment management clients of investment managers that are
direct and indirect subsidiaries (
Investment Management Subsidiaries
) of
Franklin Resources, Inc. (
FRI
). Charles B. Johnson and Rupert H.
Johnson, Jr. (
Principal
Shareholders
) each own in excess of 10% of the outstanding
common stock of FRI and are the principal stockholders of FRI. FRI,
the Principal Shareholders and each of the Investment Management
Subsidiaries disclaim any pecuniary interest in any of the
shares. Franklin Advisors, Inc. has sole voting and sole
dispositive power with respect to the shares. The principal address
of Franklin Advisors, Inc., FRI and the Principal Shareholders
is One Franklin Parkway, San Mateo, California 94403.
|
-33-
Securities Authorized for Issuance Under Equity Compensation
Plans
Equity Grants
As of
July 23, 2021, options to purchase a total of 15,288,639 registered
shares of our common stock were outstanding at a weighted average
exercise price of $1.43 per share, of which options to purchase
11,265,935 shares of our common stock were vested and exercisable
at a weighted average exercise price of $1.29 per share and options
to purchase 4,022,704 shares were unvested and not exercisable at a
weighted average exercise price of $1.82 per share. These options
were issued under our 2019 Omnibus Equity Incentive Plan (the
2019 Plan
) and under our
Amended and Restated 2016 Stock Incentive Plan, formerly titled the
2008 Stock Incentive Plan (the
2016 Plan
), as described below. At July
23, 2021, an additional 1,017,657 shares remained available for
future equity grants under our 2019 Plan, and no new awards are
available for grant under our 2016 Plan.
The
following table summarizes awards outstanding under the 2016 Plan
and the 2019 Plan, as well as shares available for issuance under
2019 Plan and our 2019 Employee Stock Purchase Plan (
2019 ESPP
) as of March 31, 2021. The
following information does not reflect issuances or exercises under
the 2016 Plan, 2019 Plan or the 2019 ESPP subsequent to March 31,
2021.
|
Plan
category
|
Number
of securities
to
be issued upon
exercise
of
outstanding
options,
warrants
and rights
(a)
|
Weighted-average
exercise
price of
outstanding
options,
warrants
and
rights
(b)
|
Number
of securities
remaining available for
future issuance under
equity compensation plans
(excluding
securities
reflected
in column (a))
(c)
|
|
Equity compensation
plans approved by security holders
|
|
|
|
|
2019 Plan and 2016
Plan
|
14,638,088
|
$
1.34
|
1,843,158
|
|
2019
ESPP
|
-
|
-
|
941,875
|
|
Equity compensation
plans not approved by security holders
|
-
|
-
|
-
|
|
Total
|
14,638,088
|
$
1.34
|
2,785,033
|
Description of the 2016 Plan
Our
Board unanimously approved the Company’s Amended and Restated
2016 Stock Incentive Plan, formerly titled the 2008 Stock Incentive
Plan (the
2016 Plan
), on
July 26, 2016, and the 2016 Plan was approved by our stockholders
at our 2016 Annual Meeting of Stockholders on September 26, 2016,
and further amended to increase the number of shares authorized for
issuance therefrom at our 2017 Annual Meeting of Stockholders on
September 15, 2017. The 2016 Plan provided for the grant of stock
options, restricted shares of common stock, stock appreciation
rights and dividend equivalent rights, collectively referred to as
“Awards”. Stock options granted under the 2016 Plan
were either incentive stock options under the provisions of Section
422 of the Internal Revenue Code of 1986, as amended (the
Code
), or non-qualified
stock options. We could grant incentive stock options only to
employees of the Company or any parent or subsidiary of the
Company. Awards other than incentive stock options could be granted
to employees, directors and consultants. A total of 10.0 million
shares of our common stock were authorized for issuance under the
2016 Plan, of which options to purchase approximately 7.8 million
shares remain outstanding at March 31, 2021. Upon the adoption of
our 2019 Plan, no further grants were permissible under the 2016
Plan and approximately 1.4 million authorized shares were
transferred to the 2019 Plan and became issuable therefrom. All
options granted from the 2016 Plan remain operative under the terms
of the respective grants.
-34-
Description of the 2019 Plan
Please
refer to the description of the 2019 Plan as proposed for amendment
and restatement in Proposal No. 2.
2019 Employee Stock Purchase Plan
Our
Board approved the VistaGen Therapeutics, Inc. 2019 Employee Stock
Purchase Plan) on June 13, 2019. Our stockholders approved the 2019
ESPP at our annual meeting on September 5, 2019. The principal
terms of our 2019 ESPP are summarized below.
The
2019 ESPP is intended to qualify as an “employee stock
purchase plan” under Section 423 of the Code. The
Compensation Committee of the Board administers the 2019 ESPP. The
Compensation Committee has authority to construe, interpret and
apply the terms of the 2019 ESPP. As approved by our stockholders,
a maximum of 1,000,000 shares of our common stock may be purchased
under the 2019 ESPP.
The
2019 ESPP is generally expected to operate in consecutive
semi-annual periods referred to as “option periods.”
The first option period commenced on January 1, 2020 and ended on
the last trading day in the semi-annual period ending June 30,
2020, with successive option periods beginning on the first day of
January and July and to terminate on the last trading day of June
and December, respectively. Option periods may not last longer than
the maximum period permitted under Section 423 of the Code,
which generally limits the length of such offerings to either 5
years or 27 months, depending on the terms of the offering.
Generally, all full-time employees of the Company and its
subsidiaries are eligible to participate in an option
period.
On the
first day of each option period (the
Grant Date
), each participating
employee for that option period will be granted an option to
purchase shares of our common stock. Each participant’s
option will permit the participant to purchase a number of shares
determined by dividing the employee’s accumulated payroll
deductions for the option period by the applicable purchase price.
A participant must designate in his or her enrollment package the
percentage (if any) of compensation to be deducted during that
option period for the purchase of stock under the 2019 ESPP. The
participant’s payroll deduction election will generally
remain in effect for future option periods unless terminated by the
participant. A participant may elect to withdraw from any option
period prior to the last day of the option period, in which case
the participant’s payroll deductions will be refunded and the
participant’s outstanding options will
terminate.
Each
participant’s payroll deductions under the 2019 ESPP are
credited to a liability account in his or her name under the 2019
ESPP. The aggregate liability for participant payroll deductions at
March 31, 2021 was $18,600.
Each
option granted under the 2019 ESPP is automatically exercised on
the last day of the respective option period (referred to as the
Exercise Date
). The number
of shares acquired by a participant upon exercise of his or her
option is determined by dividing the participant’s 2019 ESPP
account balance as of the Exercise Date for the option period by
the purchase price of the option. The purchase price for each
option is generally equal to the lesser of (i) 85% of the fair
market value of a share of our common stock on the applicable Grant
Date, or (ii) 85% of the fair market value of a share of our
common stock on the applicable Exercise Date. A participant’s
2019 ESPP account balance is reduced upon exercise of his or her
option by the amount used to pay the purchase price of the shares
acquired by the participant. Following exercise of the option, any
excess amount in a participant’s account is refunded
following the Exercise Date. No interest is paid to any participant
under the 2019 ESPP.
Participation in
the 2019 ESPP is subject to the following limits:
|
|
●
|
A
participant cannot contribute less than 1% or more than 15% of his
or her compensation to the purchase of stock under the 2019 ESPP in
any one payroll period;
|
|
|
●
|
A
participant cannot purchase any more than 5,000 shares of common
stock during an offering period, or accrue rights to purchase more
than $25,000 of stock (valued at the Grant Date of the applicable
offering period and without giving effect to any discount reflected
in the purchase price for the stock) for each calendar year in
which an option is outstanding; and
|
|
|
●
|
A
participant will not be granted an option under the 2019 ESPP if it
would cause the participant to own stock and/or hold outstanding
options to purchase common stock constituting 5.0% or more of the
total combined voting power or value of all classes of stock of the
Company or one of its subsidiaries or to the extent it would exceed
certain other limits under the Code.
|
-35-
The
$25,000 annual purchase and the 5% ownership limitations referred
to above are required under the Code.
As is
customary in stock incentive plans of this nature, the number of
shares of stock available under the 2019 ESPP or subject to
outstanding options, is subject to adjustment in the event of
certain reorganizations, combinations, recapitalization of shares,
stock splits, reverse stock split, subdivision or other similar
change in respect of our common stock. A participant’s rights
with respect to options or the purchase of shares under the 2019
ESPP, as well as payroll deductions credited to his or her 2019
ESPP account, may not be assigned, transferred, pledged or
otherwise disposed of in any way except by will or the laws of
descent and distribution.
The
Board generally may amend, suspend, or terminate the 2019 ESPP at
any time and in any manner, except that stockholder approval is
required to increase the number of shares authorized for issuance
under the 2019 ESPP and for certain other amendments. No amendment
to the 2019 ESPP may materially adversely affect the option rights
previously granted to a participant under the 2019 ESPP, except as
required by law or regulation.
Our
2019 ESPP became effective on January 1, 2020 and will continue in
effect until the earlier of such time as all of the shares of the
Company’s common stock subject to the 2019 ESPP have been
sold under the 2019 ESPP or December 31, 2030, unless terminated
earlier by the Board. At March 31, 2021, two option periods had
been completed. Employees purchased an aggregate of 28,125 shares
of our common stock at a price of $0.4480 per share in the option
period from January 1, 2020 to June 30, 2020, and an aggregate of
30,000 shares of our common stock at a price of $0.4521 per share
in the option period from July 1, 2020 to December 31, 2020, under
the 2019 ESPP. The third option period under the 2019 ESPP was
completed on June 30, 2021, in which employees purchased an
aggregate of 16,251 shares of our common stock at a price of
$1.9465 per share.
Certain Relationships and Related Transactions
Consulting Agreement
During
our fiscal years ended March 31, 2021 and 2020, we engaged a
consulting firm headed by one of the then-independent members of
our Board to provide various market research studies, commercial
analyses and commercial advisory projects for certain of our CNS
pipeline candidates pursuant to which we recorded expense of
$193,000 and $108,400 for the fiscal years ended March 31, 2021 and
2020, respectively. We recorded no accounts payable or accrued
expenses related to such services at March 31, 2021 or
2020.
Section 16 Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires our officers, directors and
persons who beneficially own more than ten percent of our common
stock (collectively, the
Reporting
Persons
) to file reports of ownership on Form 3 and changes
in ownership on Form 4 or Form 5 with the SEC. The
Reporting Persons are also required by SEC rules to furnish us with
copies of all reports that they file pursuant to Section
16(a).
To the
Company’s knowledge, based solely on our review of the copies
of these reports furnished to the Company and written
representations that no other reports were required during the
fiscal year ended
March 31, 2021, all Reporting Persons
complied with all applicable reporting requirements.
-36-
ADDITIONAL INFORMATION
Deadline for Receipt of Stockholder Proposals for the 2022 Annual
Meeting
Stockholder
proposals that are intended to be presented by stockholders at the
Company’s 2022 Annual Meeting of Stockholders must be
received by the Secretary of the Company between June 7, 2022 and
July 7, 2022 in order that they may be included, if appropriate, in
the Company’s proxy statement and form of proxy relating to
that meeting. A stockholder proposal not included in the
Company’s proxy statement for the 2021 Annual Meeting of
Stockholders will be ineligible for presentation at the meeting
unless the stockholder gives timely notice of the proposal in
writing to the Secretary of the Company at the principal executive
offices of the Company and otherwise complies with the provisions
of the Company’s Bylaws. To be timely, the Bylaws provide
that the Company must have received the stockholder’s notice
not less than 60 days nor more than 90 days prior to the first
anniversary of the previous year’s annual meeting of
stockholders. However, if the date of the 2022 Annual Meeting of
Stockholders is changed by more than 30 days from the date of this
year’s Annual Meeting, the Company must receive the
stockholder’s notice no later than the close of business on
(i) the 90th day prior to such annual meeting and
(ii) the later of 60 days prior to such annual meeting, or, in
the event the Company makes a public announcement of the date of
such annual meeting less than 70 days before the meeting, within 10
days after the Company’s public announcement.
Householding of Proxy Materials
The SEC
has adopted rules that permit companies and intermediaries (e.g.,
brokers) to satisfy the delivery requirements for proxy statements
and annual reports with respect to two or more stockholders sharing
the same address by delivering a single proxy statement and annual
report addressed to those stockholders. This process, which is
commonly referred to as “householding,” potentially
means extra convenience for stockholders and cost savings for
companies.
A
number of brokers with account holders who are stockholders of the
Company will be “householding” the Company’s
proxy materials. A single set of the Company’s proxy
materials will be delivered to multiple stockholders sharing an
address unless contrary instructions have been received from the
affected stockholders. Once you have received notice from your
broker that they will be “householding” communications
to your address, “householding” will continue until you
are notified otherwise or until you revoke your consent. If, at any
time, you no longer wish to participate in
“householding” and would prefer to receive a separate
set of the Company’s proxy materials, please notify your
broker or direct a written request to the Company at 343 Allerton
Avenue, South San Francisco, California 94080, or contact us at
(650) 577-3600. The Company undertakes to deliver promptly, upon
any such oral or written request, a separate copy of its proxy
materials to a stockholder at a shared address to which a single
copy of these documents was delivered. Stockholders who currently
receive multiple copies of the Company’s proxy materials at
their address and would like to request “householding”
of their communications should contact their broker, bank or other
nominee, or contact the Company at the above address or phone
number.
Other Matters
At the
date of this Proxy Statement, the Company knows of no other
matters, other than those described above, that will be presented
for consideration at the Annual Meeting. If any other business
should come before the Annual Meeting, it is intended that the
proxy holders will vote all proxies using their best judgment in
the interest of the Company and the stockholders.
The
Notice, mailed to stockholders on or about July 29, 2021, contains
instructions on how to access the Company’s Annual Report on
SEC Form 10-K for our fiscal year ended March 31, 2021. The Annual
Report, which includes audited financial statements, does not form
any part of the material for the solicitation of
proxies.
The
Board invites you to attend the Annual Meeting in person. Whether
or not you expect to attend the Annual Meeting in person, please
submit your vote by Internet, telephone or postal mail as promptly
as possible
so that
your shares will be represented at the Annual Meeting.
REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING IN
PERSON, PLEASE READ THE ACCOMPANYING PROXY STATEMENT AND THEN
VOTE BY INTERNET, TELEPHONE OR POSTAL MAIL AS PROMPTLY AS
POSSIBLE. VOTING PROMPTLY WILL SAVE US ADDITIONAL
EXPENSE IN SOLICITING PROXIES AND WILL ENSURE THAT YOUR SHARES ARE
REPRESENTED AT THE ANNUAL MEETING
-37-
APPENDIX A
VISTAGEN THERAPEUTICS, INC.
AMENDED AND RESTATED 2019 OMNIBUS EQUITY INCENTIVE
PLAN
VistaGen
Therapeutics, Inc., a Nevada corporation, sets forth herein the
terms of its Amended and Restated 2019 Omnibus Equity Incentive
Plan, as follows:
1.
PURPOSE
The
Plan is intended to enhance the Company’s and its
Affiliates’ (as defined herein) ability to attract and retain
highly qualified officers, Non-Employee Directors (as defined
herein), key employees, consultants and advisors, and to motivate
such officers, Non-Employee Directors, key employees, consultants
and advisors to serve the Company and its Affiliates and to expend
maximum effort to improve the business operations, prospects and
results of the Company, by providing to such persons an opportunity
to acquire or increase a direct proprietary interest in the
operations and future success of the Company. To this end,
the Plan provides for the grant of stock options, stock
appreciation rights, restricted stock, restricted stock units,
other stock-based awards and cash awards. Any of these awards may,
but need not, be made as performance incentives to reward
attainment of performance goals in accordance with the terms
hereof. Stock options granted under the Plan may be non-qualified
stock options or incentive stock options, as provided herein.
On the Effective Date, the Plan replaces, and no further awards
shall be made under, the Predecessor Plan (as defined
herein).
2.
DEFINITIONS
For
purposes of interpreting the Plan and related documents (including
Award Agreements), the following definitions shall
apply:
2.1
“
Affiliate
”
means
any company or other trade or business that “controls,”
is “controlled by” or is “under common
control” with the Company within the meaning of Rule 405 of
Regulation C under the Securities Act, including, without
limitation, any Subsidiary.
2.2
“
Award
”
means a grant of an Option, Stock Appreciation Right, Restricted
Stock, Restricted Stock Unit, or Other Stock-based Award under the
Plan.
2.3
“
Award
Agreement
” means a written agreement between the
Company and a Grantee, or notice from the Company or an Affiliate
to a Grantee that evidences and sets forth the terms and conditions
of an Award.
2.4
“
Beneficial
Owner
” means “Beneficial Owner” as defined
in Rule 13d-3 and Rule 13d-5 under the Exchange Act; except that,
in calculating the beneficial ownership of any particular Person,
such Person shall be deemed to have beneficial ownership of all
securities that such Person has the right to acquire by conversion
or exercise of other securities, whether such right is currently
exercisable or is exercisable only after the passage of time. The
term “Beneficial Ownership” has a corresponding
meaning.
2.5
“
Board
”
means the Board of Directors of the Company.
2.6
“
Change
in Control
” shall have the meaning set forth in
Section
14.3.2
.
2.7
“
Code
”
means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended. References to the Code shall include the valid
and binding governmental regulations, court decisions and other
regulatory and judicial authority issued or rendered
thereunder.
A-1
2.8
“
Committee
”
means the Compensation Committee of the Board or any committee or
other person or persons designated by the Board to administer the
Plan. The Board will cause the Committee to satisfy the
applicable requirements of any stock exchange on which the Common
Stock may then be listed. For purposes of Awards to Grantees
who are subject to Section 16 of the Exchange Act, Committee means
all of the members of the Committee who are “non-employee
directors” within the meaning of Rule 16b-3 adopted under the
Exchange Act. All references in the Plan to the Board shall
mean such Committee or the Board. Notwithstanding the
foregoing, any action taken by the Committee shall be valid and
effective, whether or not members of the Committee at the time of
such action are later determined not to have satisfied the
requirements for membership set forth in this Section
2.8.
2.9
“
Company
”
means VistaGen Therapeutics, Inc., a Nevada corporation, or any
successor corporation.
2.10
“
Common Stock
”
or “
Stock
”
means a share of common stock of the Company, par value $0.001 per
share.
2.11
“
Corporate
Transaction
” means a reorganization, merger, statutory
share exchange, consolidation, sale of all or substantially all of
the Company’s assets, or the acquisition of assets or stock
of another entity by the Company, or other corporate transaction
involving the Company or any of its Subsidiaries.
2.12
“
Effective
Date
” means [●], 2021, the date the Plan was
approved by the Company’s stockholders.
2.13
“
Exchange Act
”
means the Securities Exchange Act of 1934, as now in effect or as
hereafter amended.
2.14
“
Fair Market Value
” of a share of
Common Stock as of a particular date means (i) if the Common Stock
is listed on a national securities exchange, the closing or last
price of the Common Stock on the composite tape or other comparable
reporting system for the applicable date, or if the applicable date
is not a trading day, the trading day immediately preceding the
applicable date, or (ii) if the shares of Common Stock are not then
listed on a national securities exchange, the closing or last price
of the Common Stock quoted by an established quotation service for
over-the-counter securities, or (iii) if the shares of Common Stock
are not then listed on a national securities exchange or quoted by
an established quotation service for over-the-counter securities,
or the value of such shares is not otherwise determinable, such
value as determined by the Board in good faith in its sole
discretion.
2.15
“
Family Member
” means a person
who is a spouse, former spouse, child, stepchild, grandchild,
parent, stepparent, grandparent, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother, sister,
brother-in-law, or sister-in-law, including adoptive relationships,
of the applicable individual, any person sharing the applicable
individual’s household (other than a tenant or employee), a
trust in which any one or more of these persons have more than
fifty percent of the beneficial interest, a foundation in which any
one or more of these persons (or the applicable individual) control
the management of assets, and any other entity in which one or more
of these persons (or the applicable individual) own more than fifty
percent of the voting interests.
2.16
“
Grant Date
” means, as determined
by the Board, the latest to occur of (i) the date as of which the
Board approves an Award, (ii) the date on which the recipient of an
Award first becomes eligible to receive an Award under
Section 6
hereof, or (iii) such other
date as may be specified by the Board in the Award
Agreement.
2.17
“
Grantee
”
means a person who receives or holds an Award under the
Plan.
2.18
“
Incentive Stock
Option
” means an “incentive stock option”
within the meaning of Section 422 of the Code, or the corresponding
provision of any subsequently enacted tax statute, as amended from
time to time.
A-2
2.19
“
Non-Employee
Director
” means a member of the Board who is not an
officer or employee of the Company or any Subsidiary.
2.20
“
Non-qualified Stock
Option
” means an Option that is not an Incentive Stock
Option.
2.21
“
Option
” means
an option to purchase one or more shares of Stock pursuant to the
Plan.
2.22
“
Option Price
”
means the exercise price for each share of Stock subject to an
Option.
2.23
“
Other Stock-based
Awards
” means Awards consisting of Stock units, or
other Awards, valued in whole or in part by reference to, or
otherwise based on, Common Stock, other than Options, Stock
Appreciation Rights, Restricted Stock, and Restricted Stock
Units.
2.24
“
Person
” means
an individual, entity or group within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act.
2.25
“
Plan
” means
this VistaGen Therapeutics, Inc. Amended and Restated 2019 Omnibus
Equity Incentive Plan, as amended from time to time.
2.26
“
Predecessor
Plan
” means the VistaGen Therapeutics, Inc. Amended
and Restated 2016 Stock Incentive Plan (formerly, the 2008 Stock
Incentive Plan).
2.27
“
Purchase
Price
” means the purchase price for each share of
Stock pursuant to a grant of Restricted Stock.
2.28
“
Restricted
Period
” shall have the meaning set forth in
Section 10.1
hereof.
2.29
“
Restricted
Stock
” means shares of Stock, awarded to a Grantee
pursuant to
Section 10
hereof.
2.30
“
Restricted Stock
Unit
” means a bookkeeping entry representing the
equivalent of shares of Stock, awarded to a Grantee pursuant to
Section 10
hereof.
2.31
“
SAR Exercise
Price
” means the per share exercise price of a SAR
granted to a Grantee under
Section
9
hereof.
2.32
“
SEC
” means
the United States Securities and Exchange Commission.
2.33
“
Section 409A
”
means Section 409A of the Code.
2.34
“
Securities
Act
” means the Securities Act of 1933, as now in
effect or as hereafter amended.
2.35
“
Separation from
Service
” means a termination of Service by a Service
Provider, as determined by the Board, which determination shall be
final, binding and conclusive; provided if any Award governed by
Section 409A is to be distributed on a Separation from Service,
then the definition of Separation from Service for such purposes
shall comply with the definition provided in Section
409A.
2.36
“
Service
” means service as a
Service Provider to the Company or an Affiliate. Unless otherwise
stated in the applicable Award Agreement, a Grantee’s change
in position or duties shall not result in interrupted or terminated
Service, so long as such Grantee continues to be a Service Provider
to the Company or an Affiliate.
2.37
“
Service
Provider
” means an employee, officer, Non-Employee
Director, consultant or advisor of the Company or an
Affiliate.
A-3
2.38
“
Stock Appreciation
Right
” or “
SAR
” means a right granted to a
Grantee under
Section 9
hereof.
2.39
“
Subsidiary
”
means any “subsidiary corporation” of the Company
within the meaning of Section 424(f) of the Code.
2.40
“
Substitute Award
” means any
Award granted in assumption of or in substitution for an award of a
company or business acquired by the Company or a Subsidiary or with
which the Company or an Affiliate combines.
2.41
“
Ten Percent Stockholder
” means
an individual who owns more than ten percent (10%) of the total
combined voting power of all classes of outstanding stock of the
Company, its parent or any of its Subsidiaries. In determining
stock ownership, the attribution rules of Section 424(d) of the
Code shall be applied.
2.42
“
Termination
Date
” means the date that is ten (10) years after the
Effective Date, unless the Plan is earlier terminated by the Board
under
Section 5.2
hereof.
3.
ADMINISTRATION OF THE PLAN
3.1
General
.
The
Board shall have such powers and authorities related to the
administration of the Plan as are consistent with the
Company’s articles of incorporation and bylaws and applicable
law. The Board shall have the power and authority to delegate its
responsibilities hereunder to the Committee, which shall have full
authority to act in accordance with its charter, and with respect
to the authority of the Board to act hereunder, all references to
the Board shall be deemed to include a reference to the Committee,
to the extent such power or responsibilities have been
delegated. Except as otherwise may be required by applicable
law, regulatory requirement or the articles of incorporation or the
bylaws of the Company, the Board shall have full power and
authority to take all actions and to make all determinations
required or provided for under the Plan, any Award or any Award
Agreement, and shall have full power and authority to take all such
other actions and make all such other determinations not
inconsistent with the specific terms and provisions of the Plan
that the Board deems to be necessary or appropriate to the
administration of the Plan. The Committee shall administer
the Plan; provided that, the Board shall retain the right to
exercise the authority of the Committee to the extent consistent
with applicable law and the applicable requirements of any
securities exchange on which the Common Stock may then be
listed. The interpretation and construction by the Board of
any provision of the Plan, any Award or any Award Agreement shall
be final, binding and conclusive. Without limitation, the Board
shall have full and final authority, subject to the other terms and
conditions of the Plan, to:
(i)
designate Grantees;
(ii)
determine the type or types of Awards to be made to a
Grantee;
(iii)
determine the number of shares of Stock to be subject to an
Award;
(iv)
establish the terms and conditions of each Award (including, but
not limited to, the Option Price of any Option, the nature and
duration of any restriction or condition (or provision for lapse
thereof) relating to the vesting, exercise, transfer, or forfeiture
of an Award or the shares of Stock subject thereto, and any terms
or conditions that may be necessary to qualify Options as Incentive
Stock Options);
(v)
prescribe the form of each Award Agreement; and
(vi) subject
to
Section 16.13
, amend,
modify, or supplement the terms of any outstanding Award including
the authority, in order to effectuate the purposes of the Plan, to
modify Awards to foreign nationals or individuals who are employed
outside the United States to recognize differences in local law,
tax policy, or custom.
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3.2
Clawbacks.
Awards
shall be subject to the requirements of (i) Section 954 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act
(regarding recovery of erroneously awarded compensation) and any
implementing rules and regulations thereunder, (ii) similar rules
under the laws of any other jurisdiction, (iii) any compensation
recovery policies adopted by the Company to implement any such
requirements or (iv) any other compensation recovery policies as
may be adopted from time to time by the Company, all to the extent
determined by the Committee in its discretion to be applicable to a
Grantee.
3.3
Minimum Vesting
Conditions.
Notwithstanding
any other provision of the Plan to the contrary, no more than 25%
of any equity-based Awards granted under the Plan shall vest on the
date the Award is granted, excluding, for this purpose, any (i)
Substitute Awards and (ii) shares delivered in lieu of fully vested
cash incentive compensation under any applicable plan or program of
the Company; and, provided, however, for the avoidance of doubt,
that the foregoing restriction does not apply to the Board’s
discretion to provide for accelerated exercisability or vesting of
any Award, including in cases of retirement, death, disability or a
Change in Control, in the terms of the Award or
otherwise.
3.4
Deferral
Arrangement.
The
Board may permit or require the deferral of any Award payment into
a deferred compensation arrangement, subject to such rules and
procedures as it may establish and in accordance with Section 409A,
which may include provisions for the payment or crediting of
interest or dividend equivalents, including converting such credits
into deferred Stock units.
3.5
No Liability.
No
member of the Board or of the Committee shall be liable for any
action or determination made in good faith with respect to the
Plan, any Award or Award Agreement.
3.6
Book Entry.
Notwithstanding
any other provision of this Plan to the contrary, the Company may
elect to satisfy any requirement under this Plan for the delivery
of stock certificates through the use of book-entry.
4.
STOCK SUBJECT TO THE PLAN
4.1
Authorized Number of
Shares
Subject
to adjustment under
Section
14
, the total number of shares of Common Stock authorized to
be awarded under the Plan shall not exceed 18,000,000. In
addition, shares of Common Stock authorized and available for
issuance under the Predecessor Plan on the Effective Date and/or
underlying any outstanding award granted under the Predecessor Plan
that, following the Effective Date, expires, or is terminated,
surrendered or forfeited for any reason without issuance of such
shares shall be available for the grant of new Awards under this
Plan. As provided in
Section
1
, no new awards shall be granted under the Predecessor Plan
following the Effective Date. Shares issued under the Plan
may consist in whole or in part of authorized but unissued shares,
treasury shares, or shares purchased on the open market or
otherwise, all as determined by the Company from time to
time.
4.2
Share Counting
4.2.1
General
Each
share of Common Stock granted in connection with an Award shall be
counted as one share against the limit in
Section 4.1
, subject to the provisions
of this
Section
4.2
.
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4.2.2
Cash-Settled
Awards
Any
Award settled in cash shall not be counted as shares of Common
Stock for any purpose under this Plan.
4.2.3
Expired
or Terminated Awards
If any
Award under the Plan expires, or is terminated, surrendered or
forfeited, in whole or in part, without issuance or delivery of
vested shares, the unissued or surrendered Common Stock covered by
such Award shall again be available for the grant of Awards under
the Plan.
4.2.4
Payment
of Option Price or Tax Withholding in Shares
The
full number of shares of Common Stock with respect to which an
Option or SAR is granted shall count against the aggregate number
of shares available for grant under the Plan. Accordingly, if
in accordance with the terms of the Plan, a Grantee pays the Option
Price for an Option by either tendering previously owned shares or
having the Company withhold shares, then such shares surrendered to
pay the Option Price shall continue to count against the aggregate
number of shares available for grant under the Plan set forth in
Section 4.1
above. In
addition, if in accordance with the terms of the Plan, a Grantee
satisfies any tax withholding requirement with respect to any
taxable event arising as a result of this Plan for any Award
(including Restricted Stock and Restricted Stock Units) by either
tendering previously owned shares or having the Company withhold
shares, then such shares surrendered to satisfy such tax
withholding requirements shall continue to count against the
aggregate number of shares available for grant under the Plan set
forth in
Section 4.1
above. Any shares of Common Stock repurchased by the Company
with cash proceeds from the exercise of Options shall not be added
back to the pool of shares available for grant under the Plan set
forth in
Section 4.1
above.
4.2.5
Substitute
Awards
In the
case of any Substitute Award, such Substitute Award shall not be
counted against the number of shares reserved under the
Plan.
5.
EFFECTIVE DATE, DURATION, AND AMENDMENTS
5.1
Term.
The
Plan shall be effective as of the Effective Date, provided that it
has been approved by the Company’s stockholders. The
Plan shall terminate automatically on September 5, 2029 and may be
terminated on any earlier date as provided in
Section 5.2
.
5.2
Amendment and Termination of the
Plan.
The
Board may, at any time and from time to time, amend, suspend, or
terminate the Plan as to any Awards which have not been made. An
amendment shall be contingent on approval of the Company’s
stockholders to the extent stated by the Board, required by
applicable law or required by applicable stock exchange listing
requirements. No Awards shall be made after the Termination
Date. The applicable terms of the Plan, and any terms and
conditions applicable to Awards granted prior to the Termination
Date shall survive the termination of the Plan and continue to
apply to such Awards. No amendment, suspension, or
termination of the Plan shall, without the consent of the Grantee,
materially impair rights or obligations under any Award theretofore
awarded.
6.
AWARD ELIGIBILITY AND LIMITATIONS
6.1
Service
Providers
.
Subject
to this
Section 6.1
, Awards
may be made to any Service Provider, including any Service Provider
who is an officer, Non-Employee Director, consultant or advisor of
the Company or of any Affiliate, as the Board shall determine and
designate from time to time in its discretion.
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6.2
Successive
Awards
.
An
eligible person may receive more than one Award, subject to such
restrictions as are provided herein.
6.3
Stand-Alone,
Additional, Tandem, and Substitute Awards
.
Subject
to
Section 16.13
, Awards
may, in the discretion of the Board, be granted either alone or in
addition to, in tandem with, or in substitution or exchange for,
any other Award or any award granted under another plan of the
Company, any Affiliate, or any business entity to be acquired by
the Company or an Affiliate, or any other right of a Grantee to
receive payment from the Company or any Affiliate. Such additional,
tandem, and substitute or exchange Awards may be granted at any
time. If an Award is granted in substitution or exchange for
another Award, the Board shall have the right to require the
surrender of such other Award in consideration for the grant of the
new Award. The Board shall have the right, in its discretion, to
make Awards in substitution or exchange for any other award under
another plan of the Company, any Affiliate, or any business entity
to be acquired by the Company or an Affiliate. In addition, Awards
may be granted in lieu of cash compensation, including in lieu of
cash amounts payable under other plans of the Company or any
Affiliate, in which the value of Stock subject to the Award is
equivalent in value to the cash compensation (for example,
Restricted Stock Units or Restricted Stock).
7.
AWARD AGREEMENT
Each
Award shall be evidenced by an Award Agreement, in such form or
forms as the Board shall from time to time determine, consistent
with the terms of the Plan. Without limiting the foregoing,
an Award Agreement may be provided in the form of a notice which
provides that acceptance of the Award constitutes acceptance of all
terms of the Plan and the notice. Award Agreements granted
from time to time or at the same time need not contain similar
provisions but shall be consistent with the terms of the
Plan. Each Award Agreement evidencing an Award of Options
shall specify whether such Options are intended to be Non-qualified
Stock Options or Incentive Stock Options, and in the absence of
such specification such options shall be deemed Non-qualified Stock
Options.
8.
TERMS AND CONDITIONS OF OPTIONS
8.1
Option Price.
The
Option Price of each Option shall be fixed by the Board and stated
in the related Award Agreement. The Option Price of each Option
(except those that constitute Substitute Awards) shall be at least
the Fair Market Value on the Grant Date of a share of Stock;
provided
,
however
, that in the event that a
Grantee is a Ten Percent Stockholder as of the Grant Date, the
Option Price of an Option granted to such Grantee that is intended
to be an Incentive Stock Option shall be not less than 110 percent
of the Fair Market Value of a share of Stock on the Grant
Date. In no case shall the Option Price of any Option be less
than the par value of a share of Stock.
8.2
Vesting.
Subject
to
Section 8.3
hereof,
each Option shall become exercisable at such times and under such
conditions (including, without limitation, performance
requirements) as shall be determined by the Board and stated in the
Award Agreement.
8.3
Term.
Each
Option shall terminate, and all rights to purchase shares of Stock
thereunder shall cease, upon the expiration of ten
(10)
years from the Grant Date, or
under such circumstances and on such date prior thereto as is set
forth in the Plan or as may be fixed by the Board and stated in the
related Award Agreement;
provided
,
however
, that in the event that the
Grantee is a Ten Percent Stockholder, an Option granted to such
Grantee that is intended to be an Incentive Stock Option at the
Grant Date shall not be exercisable after the expiration of five
(5) years from its Grant Date.
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8.4
Limitations on Exercise of
Option.
Notwithstanding
any other provision of the Plan, in no event may any Option be
exercised, in whole or in part, (i) prior to the date the Plan is
approved by the stockholders of the Company as provided herein or
(ii) after the occurrence of an event which results in termination
of the Option.
8.5
Method of
Exercise.
An
Option that is exercisable may be exercised by the Grantee’s
delivery of a notice of exercise to the Company, setting forth the
number of shares of Stock with respect to which the Option is to be
exercised, accompanied by full payment for the shares. To be
effective, notice of exercise must be made in accordance with
procedures established by the Company from time to
time.
8.6
Rights of Holders of
Options.
Unless
otherwise stated in the related Award Agreement, an individual
holding or exercising an Option shall have none of the rights of a
stockholder (for example, the right to receive cash or dividend
payments or distributions attributable to the subject shares of
Stock or to direct the voting of the subject shares of Stock) until
the shares of Stock covered thereby are fully paid and issued to
her/him. Except as provided in
Section 14
hereof or the related Award
Agreement, no adjustment shall be made for dividends, distributions
or other rights for which the record date is prior to the date of
such issuance.
8.7
Delivery of Stock
Certificates.
Promptly after the
exercise of an Option by a Grantee and the payment in full of the
Option Price, such Grantee shall be entitled, subject to any
transaction fees, as required, to the issuance of a stock
certificate or certificates evidencing his or her ownership of the
shares of Stock subject to the Option.
8.8
Limitations on Incentive Stock
Options.
An
Option shall constitute an Incentive Stock Option only (i) if the
Grantee of such Option is an employee of the Company or any
Subsidiary of the Company; (ii) to the extent specifically provided
in the related Award Agreement; and (iii) to the extent that the
aggregate Fair Market Value (determined at the time the Option is
granted) of the shares of Stock with respect to which all Incentive
Stock Options held by such Grantee become exercisable for the first
time during any calendar year (under the Plan and all other plans
of the Grantee’s employer and its Affiliates) does not exceed
$100,000. This limitation shall be applied by taking Options into
account in the order in which they were granted.
9.
TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS
9.1
Right to
Payment.
A SAR
shall confer on the Grantee a right to receive, upon exercise
thereof, the excess of (i) the Fair Market Value of one share of
Stock on the date of exercise over (ii) the SAR Exercise Price, as
determined by the Board. The Award Agreement for a SAR (except
those that constitute Substitute Awards) shall specify the SAR
Exercise Price, which shall be fixed on the Grant Date as not less
than the Fair Market Value of a share of Stock on that date.
SARs may be granted alone or in conjunction with all or part of an
Option or at any subsequent time during the term of such Option or
in conjunction with all or part of any other Award. A SAR granted
in tandem with an outstanding Option following the Grant Date of
such Option shall have a grant price that is equal to the Option
Price;
provided
,
however
, that the
SAR’s grant price may not be less than the Fair Market Value
of a share of Stock on the Grant Date of the SAR to the extent
required by Section 409A.
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9.2
Other Terms.
The
Board shall determine at the Grant Date, the time or times at which
and the circumstances under which a SAR may be exercised in whole
or in part (including based on achievement of performance goals
and/or future service requirements), the time or times at which
SARs shall cease to be or become exercisable following Separation
from Service or upon other conditions, the method of exercise,
whether or not a SAR shall be in tandem or in combination with any
other Award, and any other terms and conditions of any
SAR.
9.3
Term
of SARs.
The
term of a SAR granted under the Plan shall be determined by the
Board, in its sole discretion;
provided
, however, that such term
shall not exceed ten (10) years.
9.4
Payment of SAR
Amount.
Upon
exercise of a SAR, a Grantee shall be entitled to receive payment
from the Company (in cash or Stock, as determined by the Board) in
an amount determined by multiplying:
(i)
the difference between the Fair Market Value of a
share of Stock on the date of exercise over the SAR Exercise Price;
by
(ii)
the number of shares of Stock with respect to which the SAR is
exercised.
10.
TERMS AND CONDITIONS OF RESTRICTED STOCK AND RESTRICTED STOCK
UNITS
10.1
Restrictions.
At the
time of grant, the Board may, in its sole discretion, establish a
period of time (a “
Restricted Period
”) and any
additional restrictions including the satisfaction of corporate or
individual performance objectives applicable to an Award of
Restricted Stock or Restricted Stock Units as determined by the
Board. Each Award of Restricted Stock or Restricted Stock Units may
be subject to a different Restricted Period and additional
restrictions. Neither Restricted Stock nor Restricted Stock Units
may be sold, transferred, assigned, pledged or otherwise encumbered
or disposed of during the Restricted Period or prior to the
satisfaction of any other applicable restrictions.
10.2
Restricted Stock
Certificates.
The
Company shall issue stock, in the name of each Grantee to whom
Restricted Stock has been granted, stock certificates or other
evidence of ownership representing the total number of shares of
Restricted Stock granted to the Grantee, as soon as reasonably
practicable after the Grant Date. The Board may provide in an Award
Agreement that either (i) the Secretary of the Company shall hold
such certificates for the Grantee’s benefit until such time
as the Restricted Stock is forfeited to the Company or the
restrictions lapse, or (ii) such certificates shall be delivered to
the Grantee;
provided
,
however
, that such
certificates shall bear a legend or legends that comply with the
applicable securities laws and regulations and make appropriate
reference to the restrictions imposed under the Plan and the Award
Agreement.
10.3
Rights of Holders of Restricted
Stock.
Unless
the Board otherwise provides in an Award Agreement and subject
to
Section 16.12
,
holders of Restricted Stock shall have rights as stockholders of
the Company, including voting and dividend rights.
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10.4
Rights of Holders of Restricted Stock
Units.
10.4.1
Settlement of Restricted Stock
Units.
Restricted Stock
Units may be settled in cash or Stock, as determined by the Board
and set forth in the Award Agreement. The Award Agreement shall
also set forth whether the Restricted Stock Units shall be settled
(i) within the time period specified for “short term
deferrals” under Section 409A or (ii) otherwise within the
requirements of Section 409A, in which case the Award Agreement
shall specify upon which events such Restricted Stock Units shall
be settled.
10.4.2
Voting and Dividend
Rights.
Unless
otherwise stated in the applicable Award Agreement and subject to
Section 16.12
, holders of
Restricted Stock Units shall not have rights as stockholders of the
Company, including no voting or dividend or dividend equivalents
rights.
10.4.3
Creditor’s
Rights.
A
holder of Restricted Stock Units shall have no rights other than
those of a general creditor of the Company. Restricted Stock Units
represent an unfunded and unsecured obligation of the Company,
subject to the terms and conditions of the applicable Award
Agreement.
10.5
Purchase of Restricted
Stock.
The
Grantee shall be required, to the extent required by applicable
law, to purchase the Restricted Stock from the Company at a
Purchase Price equal to the greater of (i) the aggregate par value
of the shares of Stock represented by such Restricted Stock or (ii)
the Purchase Price, if any, specified in the related Award
Agreement. If specified in the Award Agreement, the Purchase Price
may be deemed paid by Services already rendered. The Purchase Price
shall be payable in a form described in
Section 11
or, in the discretion
of the Board, in consideration for past Services
rendered.
10.6
Delivery of Stock.
Upon
the expiration or termination of any Restricted Period and the
satisfaction of any other conditions prescribed by the Board, the
restrictions applicable to shares of Restricted Stock or Restricted
Stock Units settled in Stock shall lapse, and, unless otherwise
provided in the Award Agreement, a stock certificate for such
shares shall be delivered, free of all such restrictions, to the
Grantee or the Grantee’s beneficiary or estate, as the case
may be.
11.
FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK
11.1
General Rule.
Payment
of the Option Price for the shares purchased pursuant to the
exercise of an Option or the Purchase Price for Restricted Stock
shall be made in cash or in cash equivalents acceptable to the
Company, except as provided in this
Section 11
.
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11.2
Surrender of Stock.
To the
extent the Award Agreement so provides, payment of the Option Price
for shares purchased pursuant to the exercise of an Option or the
Purchase Price for Restricted Stock may be made all or in part
through the tender to the Company of shares of Stock, which shares
shall be valued, for purposes of determining the extent to which
the Option Price or Purchase Price for Restricted Stock has been
paid thereby, at their Fair Market Value on the date of exercise or
surrender. Notwithstanding the foregoing, in the case of an
Incentive Stock Option, the right to make payment in the form of
already owned shares of Stock may be authorized only at the time of
grant.
11.3
Cashless Exercise.
With
respect to an Option only (and not with respect to Restricted
Stock), to the extent permitted by law and to the extent the Award
Agreement so provides, payment of the Option Price may be made all
or in part by delivery (on a form acceptable to the Company) of an
irrevocable direction to a licensed securities broker acceptable to
the Company to sell shares of Stock and to deliver all or part of
the sales proceeds to the Company in payment of the Option Price
and any withholding taxes described in
Section 16.3
.
11.4
Other Forms of Payment.
To the
extent the Award Agreement so provides, payment of the Option Price
or the Purchase Price for Restricted Stock may be made in any other
form that is consistent with applicable laws, regulations and
rules, including, but not limited to, the Company’s
withholding of shares of Stock otherwise due to the exercising
Grantee.
12.
OTHER STOCK-BASED AWARDS
12.1
Grant of Other Stock-based
Awards.
Other
Stock-based Awards may be granted either alone or in addition to or
in conjunction with other Awards under the Plan. Other
Stock-based Awards may be granted in lieu of other cash or other
compensation to which a Service Provider is entitled from the
Company or may be used in the settlement of amounts payable in
shares of Common Stock under any other compensation plan or
arrangement of the Company. Subject to the provisions of the
Plan, the Committee shall have the sole and complete authority to
determine the persons to whom and the time or times at which such
Awards shall be made, the number of shares of Common Stock to be
granted pursuant to such Awards, and all other conditions of such
Awards. Unless the Committee determines otherwise, any such
Award shall be confirmed by an Award Agreement, which shall contain
such provisions as the Committee determines to be necessary or
appropriate to carry out the intent of this Plan with respect to
such Award.
12.2
Terms of Other Stock-based
Awards.
Any
Common Stock subject to Awards made under this
Section 12
may not be sold, assigned,
transferred, pledged or otherwise encumbered prior to the date on
which the shares are issued, or, if later, the date on which any
applicable restriction, performance or deferral period
lapses.
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13.
REQUIREMENTS OF LAW
13.1
General.
The
Company shall not be required to sell or issue any shares of Stock
under any Award if the sale or issuance of such shares would
constitute a violation by the Grantee, any other individual
exercising an Option, or the Company of any provision of any law or
regulation of any governmental authority, including without
limitation any federal or state securities laws or regulations. If
at any time the Company shall determine, in its discretion, that
the listing, registration or qualification of any shares subject to
an Award upon any securities exchange or under any governmental
regulatory body is necessary or desirable as a condition of, or in
connection with, the issuance or purchase of shares hereunder, no
shares of Stock may be issued or sold to the Grantee or any other
individual exercising an Option pursuant to such Award unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not
acceptable to the Company, and any delay caused thereby shall in no
way affect the date of termination of the Award. Specifically, in
connection with the Securities Act, upon the exercise of any Option
or the delivery of any shares of Stock underlying an Award, unless
a registration statement under such Act is in effect with respect
to the shares of Stock covered by such Award, the Company shall not
be required to sell or issue such shares unless the Board has
received evidence satisfactory to it that the Grantee or any other
individual exercising an Option may acquire such shares pursuant to
an exemption from registration under the Securities Act. Any
determination in this connection by the Board shall be final,
binding, and conclusive. The Company may, but shall in no event be
obligated to, register any securities covered hereby pursuant to
the Securities Act. The Company shall not be obligated to take any
affirmative action in order to cause the exercise of an Option or
the issuance of shares of Stock pursuant to the Plan to comply with
any law or regulation of any governmental authority. As to any
jurisdiction that expressly imposes the requirement that an Option
shall not be exercisable until the shares of Stock covered by such
Option are registered or are exempt from registration, the exercise
of such Option (under circumstances in which the laws of such
jurisdiction apply) shall be deemed conditioned upon the
effectiveness of such registration or the availability of such an
exemption.
13.2
Rule 16b-3.
During
any time when the Company has a class of equity security registered
under Section 12 of the Exchange Act, it is the intent of the
Company that Awards and the grant or exercise of Awards to
executive officers and directors hereunder will qualify for the
exemption provided by Rule 16b-3 under the Exchange Act. To the
extent that any provision of the Plan or action by the Board or
Committee does not comply with the requirements of Rule 16b-3, it
shall be deemed inoperative to the extent permitted by law and
deemed advisable by the Board, and shall not affect the validity of
the Plan. In the event that Rule 16b-3 is revised or replaced, the
Board may exercise its discretion to modify this Plan in any
respect necessary to satisfy the requirements of, or to take
advantage of any features of, the revised exemption or its
replacement.
14.
EFFECT OF CHANGES IN CAPITALIZATION
14.1
Changes in Stock.
If (i)
the number of outstanding shares of Stock is increased or decreased
or the shares of Stock are changed into or exchanged for a
different number or kind of shares or other securities of the
Company on account of any recapitalization, reclassification, stock
split, reverse split, combination of shares, exchange of shares,
stock dividend or other distribution payable in capital stock, or
other increase or decrease in such shares effected without receipt
of consideration by the Company occurring after the Effective Date
or (ii) there occurs any spin-off, split-up, extraordinary cash
dividend or other distribution of assets by the Company, the number
and kinds of shares for which grants of Awards may be made under
the Plan shall be equitably adjusted by the Company; provided that
any such adjustment shall comply with Section 409A. In addition, in
the event of any such increase or decrease in the number of
outstanding shares or other transaction described in clause (ii)
above, the number and kind of shares for which Awards are
outstanding and the Option Price per share of outstanding Options
and SAR Exercise Price per share of outstanding SARs shall be
equitably adjusted; provided that any such adjustment shall comply
with Section 409A.
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14.2
Effect of Certain
Transactions.
Except
as otherwise provided in an Award Agreement and subject to the
provisions of
Section 14.3
,
in the event of a Corporate Transaction, the Plan and the Awards
issued hereunder shall continue in effect in accordance with their
respective terms, except that following a Corporate Transaction
either (i) each outstanding Award shall be treated as provided for
in the agreement entered into in connection with the Corporate
Transaction or (ii) if not so provided in such agreement, each
Grantee shall be entitled to receive in respect of each share of
Common Stock subject to any outstanding Awards, upon exercise or
payment or transfer in respect of any Award, the same number and
kind of stock, securities, cash, property or other consideration
that each holder of a share of Common Stock was entitled to receive
in the Corporate Transaction in respect of a share of Common stock
(subject to any necessary rounding to comply with Section 409A or
Section 422 of the Code with respect to any Incentive Stock
Option);
provided
,
however
, that, unless
otherwise determined by the Committee, such stock, securities,
cash, property or other consideration shall remain subject to all
of the conditions, restrictions and performance criteria which were
applicable to the Awards prior to such Corporate Transaction.
Without limiting the generality of the foregoing, the treatment of
outstanding Options and SARs pursuant to this
Section 14.2
in connection with a
Corporate Transaction in which the consideration paid or
distributed to the Company’s stockholders is not entirely
shares of common stock of the acquiring or resulting corporation
may include the cancellation of outstanding Options and SARs upon
consummation of the Corporate Transaction as long as, at the
election of the Committee, (i) the holders of affected Options and
SARs have been given a period of at least fifteen days prior to the
date of the consummation of the Corporate Transaction to exercise
the Options or SARs (to the extent otherwise exercisable) or (ii)
the holders of the affected Options and SARs are paid (in cash or
cash equivalents) in respect of each Share covered by the Option or
SAR being canceled an amount equal to the excess, if any, of the
per share price paid or distributed to stockholders in the
Corporate Transaction (the value of any non-cash consideration to
be determined by the Committee in its sole discretion) over the
Option Price or SAR Exercise Price, as applicable. For
avoidance of doubt, (1) the cancellation of Options and SARs
pursuant to clause (ii) of the preceding sentence may be effected
notwithstanding anything to the contrary contained in this Plan or
any Award Agreement and (2) if the amount determined pursuant to
clause (ii) of the preceding sentence is zero or less, the affected
Option or SAR may be cancelled without any payment therefore.
The treatment of any Award as provided in this
Section 14.2
shall be conclusively
presumed to be appropriate for purposes of
Section 14.1
.
14.3
Change in Control
14.3.1
Consequences of a Change in
Control
In the
event of a Change in Control of the Company, the Board, in its
discretion, may, at any time an Award is granted, or at any time
thereafter, (i) accelerate the time period relating to the exercise
or vesting of the Award; or (ii) take one or more of the following
actions, which may vary among individual Grantees: (A) provide for
the purchase of the Award for an amount of cash or other property
that could have been received upon the exercise or vesting of the
Award (less any applicable Option Price or SAR Exercise Price in
the cash of Options and SARs); (B) adjust the terms of the Awards
in a manner determined by the Board to reflect the Change in
Control; (C) cause the Awards to be assumed, or new rights
substituted therefor, by another entity, through the continuance of
the Plan and the assumption of outstanding Awards, or the
substitution for such Awards of comparable value covering shares of
a successor corporation, with appropriate adjustments as to the
number and kind of shares and exercise prices, in which event the
Plan and such Awards, or the new options and rights substituted
therefor, shall continue in the manner and under the terms so
provided; (D) accelerate the time at which Options or SARs then
outstanding may be exercised so that such Options and SARs may be
exercised for a limited period of time on or before a specified
date fixed by the Board, after which specified date, all
unexercised Options and SARs shall terminate; or (E) make such
other provision as the Board may consider equitable.
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14.3.2
Change in Control
Defined
Except
as may otherwise be defined in an Award Agreement, a
“
Change in
Control
” shall mean the occurrence of any of the
following events: (i) the acquisition, directly or indirectly, by
any Person or group (within the meaning of Section 13(d)(3) of the
Exchange Act) of the Beneficial Ownership of more than fifty
percent of the outstanding securities of the Company; (ii) a merger
or consolidation in which the Company is not the surviving entity,
except for a transaction the principal purpose of which is to
change the state in which the Company is incorporated; (iii) the
sale, transfer or other disposition of all or substantially all of
the assets of the Company; (i) a complete liquidation or
dissolution of the Company; or (v) any reverse merger in which the
Company is the surviving entity but in which securities possessing
more than fifty percent of the total combined voting power of the
Company’s outstanding securities are transferred to a Person
or Persons different from the Persons holding those securities
immediately prior to such merger.
Notwithstanding
the foregoing, if it is determined that an Award hereunder is
subject to the requirements of Section 409A and payable upon a
Change in Control, the Company will not be deemed to have undergone
a Change in Control unless the Company is deemed to have undergone
a “change in control event” pursuant to the definition
of such term in Section 409A.
14.4
Adjustments
Adjustments under
this
Section 14
related to
shares of Stock or securities of the Company shall be made by the
Board, whose determination in that respect shall be final, binding
and conclusive. No fractional shares or other securities shall be
issued pursuant to any such adjustment, and any fractions resulting
from any such adjustment shall be eliminated in each case by
rounding downward to the nearest whole share.
15.
NO LIMITATIONS ON COMPANY
The
making of Awards pursuant to the Plan shall not affect or limit in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations, or changes of its capital or
business structure or to merge, consolidate, dissolve, or
liquidate, or to sell or transfer all or any part of its business
or assets.
16.
TERMS APPLICABLE GENERALLY TO AWARDS GRANTED UNDER THE
PLAN
16.1
Disclaimer of Rights.
No
provision in the Plan or in any Award Agreement shall be construed
to confer upon any individual the right to remain in the employ or
service of the Company or any Affiliate, or to interfere in any way
with any contractual or other right or authority of the Company
either to increase or decrease the compensation or other payments
to any individual at any time, or to terminate any employment or
other relationship between any individual and the Company. In
addition, notwithstanding anything contained in the Plan to the
contrary, unless otherwise stated in the applicable Award
Agreement, no Award granted under the Plan shall be affected by any
change of duties or position of the Grantee, so long as such
Grantee continues to be a Service Provider. The obligation of the
Company to pay any benefits pursuant to this Plan shall be
interpreted as a contractual obligation to pay only those amounts
described herein, in the manner and under the conditions prescribed
herein. The Plan shall in no way be interpreted to require the
Company to transfer any amounts to a third party trustee or
otherwise hold any amounts in trust or escrow for payment to any
Grantee or beneficiary under the terms of the Plan.
16.2
Nonexclusivity of the
Plan.
Neither the
adoption of the Plan nor the submission of the Plan to the
stockholders of the Company for approval shall be construed as
creating any limitations upon the right and authority of the Board
to adopt such other incentive compensation arrangements (which
arrangements may be applicable either generally to a class or
classes of individuals or specifically to a particular individual
or particular individuals), including, without limitation, the
granting of stock options as the Board in its discretion determines
desirable.
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16.3
Withholding Taxes.
The
Company or an Affiliate, as the case may be, shall have the right
to deduct from payments of any kind otherwise due to a Grantee any
federal, state, or local taxes of any kind required by law to be
withheld (i) with respect to the vesting of or other lapse of
restrictions applicable to an Award, (ii) upon the issuance of any
shares of Stock upon the exercise of an Option or SAR, or (iii)
otherwise due in connection with an Award. At the time of
such vesting, lapse, or exercise, the Grantee shall pay to the
Company or the Affiliate, as the case may be, any amount that the
Company or the Affiliate may reasonably determine to be necessary
to satisfy such withholding obligation. Subject to the prior
approval of the Company or the Affiliate, which may be withheld by
the Company or the Affiliate, as the case may be, in its sole
discretion, the Grantee may elect to satisfy such obligations, or
the Company may require such obligations (up to maximum statutory
rates) to be satisfied, in whole or in part, (i) by causing the
Company or the Affiliate to withhold the number of shares of Stock
otherwise issuable to the Grantee as may be necessary to satisfy
such withholding obligation or (ii) by delivering to the Company or
the Affiliate shares of Stock already owned by the Grantee. The
shares of Stock so delivered or withheld shall have an aggregate
Fair Market Value equal to such withholding obligations (up to
maximum statutory rates). The Fair Market Value of the shares
of Stock used to satisfy such withholding obligation shall be
determined by the Company or the Affiliate as of the date that the
amount of tax to be withheld is to be determined. A Grantee who has
made an election pursuant to this
Section 16.3
may satisfy his or her
withholding obligation only with shares of Stock that are not
subject to any repurchase, forfeiture, unfulfilled vesting, or
other similar requirements.
16.4
Captions.
The
use of captions in this Plan or any Award Agreement is for the
convenience of reference only and shall not affect the meaning of
any provision of the Plan or any Award Agreement.
16.5
Other Provisions.
Each
Award Agreement may contain such other terms and conditions not
inconsistent with the Plan as may be determined by the Board, in
its sole discretion. In the event of any conflict between the
terms of an employment agreement and the Plan, the terms of the
employment agreement govern.
16.6
Number and Gender.
With
respect to words used in this Plan, the singular form shall include
the plural form, the masculine gender shall include the feminine
gender, etc., as the context requires.
16.7
Severability.
If any
provision of the Plan or any Award Agreement shall be determined to
be illegal or unenforceable by any court of law in any
jurisdiction, the remaining provisions hereof and thereof shall be
severable and enforceable in accordance with their terms, and all
provisions shall remain enforceable in any other
jurisdiction.
16.8
Governing Law.
The
Plan shall be governed by and construed in accordance with the laws
of the State of Nevada without giving effect to the principles of
conflicts of law, and applicable Federal law.
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16.9
Section 409A.
The
Plan is intended to comply with Section 409A to the extent subject
thereto, and, accordingly, to the maximum extent permitted, the
Plan shall be interpreted and administered to be in compliance
therewith. Any payments described in the Plan that are due within
the “short-term deferral period” as defined in Section
409A shall not be treated as deferred compensation unless
applicable laws require otherwise. Notwithstanding anything to the
contrary in the Plan, to the extent required to avoid accelerated
taxation and tax penalties under Section 409A, amounts that would
otherwise be payable and benefits that would otherwise be provided
pursuant to the Plan during the six (6) month period immediately
following the Grantee’s Separation from Service shall instead
be paid on the first payroll date after the six-month anniversary
of the Grantee’s Separation from Service (or the
Grantee’s death, if earlier). Notwithstanding the foregoing,
neither the Company nor the Committee shall have any obligation to
take any action to prevent the assessment of any excise tax or
penalty on any Grantee under Section 409A and neither the Company
nor the Committee will have any liability to any Grantee for such
tax or penalty.
16.10
Separation from Service.
The
Board shall determine the effect of a Separation from Service upon
Awards, and such effect shall be set forth in the appropriate Award
Agreement. Without limiting the foregoing, the Board may
provide in the Award Agreements at the time of grant, or any time
thereafter with the consent of the Grantee, the actions that will
be taken upon the occurrence of a Separation from Service,
including, but not limited to, accelerated vesting or termination,
depending upon the circumstances surrounding the Separation from
Service.
16.11
Transferability of Awards.
16.11.1
Transfers in
General.
Except
as provided in
Section
16.11.2
, no Award shall be assignable or transferable by the
Grantee to whom it is granted, other than by will or the laws of
descent and distribution, and, during the lifetime of the Grantee,
only the Grantee personally (or the Grantee’s personal
representative) may exercise rights under the Plan.
16.11.2
Family
Transfers.
If
authorized in the applicable Award Agreement, a Grantee may
transfer, not for value, all or part of an Award (other than
Incentive Stock Options) to any Family Member. For the
purpose of this
Section
16.11.2
, a “not for value” transfer is a
transfer which is (i) a gift, (ii) a transfer under a domestic
relations order in settlement of marital property rights; or (iii)
a transfer to an entity in which more than fifty percent of the
voting interests are owned by Family Members (or the Grantee) in
exchange for an interest in that entity. Following a transfer
under this
Section 16.11.2
,
any such Award shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer.
Subsequent transfers of transferred Awards are prohibited except to
Family Members of the original Grantee in accordance with this
Section 16.11.2
or by will
or the laws of descent and distribution.
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16.12
Dividends and Dividend Equivalent
Rights.
If
specified in the Award Agreement, the recipient of an Award (other
than Options or SARs) may be entitled to receive dividends or
dividend equivalents with respect to the Common Stock or other
securities covered by an Award. The terms and conditions of a
dividend equivalent right may be set forth in the Award
Agreement. Dividend equivalents credited to a Grantee may be
reinvested in additional shares of Stock or other securities of the
Company at a price per unit equal to the Fair Market Value of a
share of Stock on the date that such dividend was paid to
stockholders, as determined in the sole discretion of the
Committee. Notwithstanding any provision herein to the
contrary, in no event will dividends or dividend equivalents vest
or otherwise be paid out prior to the time that the underlying
Award (or portion thereof) has vested and, accordingly, will be
subject to cancellation and forfeiture if such Award does not vest
(including both time-based and performance-based
Awards).
16.13 No Repricing
. Subject to Section
14.1, the Committee shall not, without the approval of the
stockholders of the Company, (a) authorize the amendment of any
outstanding Option or SAR to reduce its exercise price per Share,
or (b) cancel any Option or SAR in exchange for cash or another
Award when the per share exercise price for such Option or SAR
exceeds the Fair Market Value of the underlying shares.
As
approved by the Board of Directors on July
28
,
2021
As adopted by the stockholders of VistaGen Therapeutics, Inc. on
[●], 2021
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