Aceragen (ACGN) DEF 14ADefinitive proxy

Pursuant to rules adopted by the U.S. Securities and Exchange Commission, or SEC, we are providing access to our proxy materials over the Internet rather than printing and mailing the proxy materials. We believe electronic delivery will expedite the receipt of materials and will help lower our costs and reduce the environmental impact of our Annual Meeting materials. Therefore, a Notice of Internet Availability will be mailed to holders of record and beneficial owners of our common stock starting on or around May 2, 2022. The Notice of Internet Availability will provide instructions as to how stockholders may access and review the proxy materials, including the Notice of Annual Meeting, proxy statement, proxy card, and 2021 Annual Report, on the website referred to in the Notice of Internet Availability or, alternatively, how to request that a copy of the proxy materials, including a proxy card, be sent to them by mail. The Notice of Internet Availability also will provide voting instructions. In addition, stockholders of record may request to receive the proxy materials in printed form by mail or electronically by email on an ongoing basis for future stockholder meetings. Please note that while our proxy materials are available at the website referenced in the Notice of Internet Availability, and our Notice of Annual Meeting, proxy statement, and 2021 Annual Report are available on our website, no other information contained on either website is incorporated by reference in, or considered to be a part of, this document.

Holders of record of our common stock as of the close of business on the Record Date of April 25, 2022 are entitled to vote on each matter properly brought before the Annual Meeting. Holders of our common stock will be entitled to one vote for each share of common stock held as of the record date. As of the close of business on the Record Date, we had 52,966,025 shares of common stock outstanding.

If you are a stockholder of record (meaning that you hold shares in your name in the records of our transfer agent, Computershare Trust Company, N.A., and that your shares are not held in “street name” by a bank or brokerage firm), you may vote your shares in any one of the following ways:

Your proxy will only be valid if you complete and return the proxy card, vote by telephone, vote over the internet before the Annual Meeting or vote at the Annual Meeting. The persons named in the proxy card will vote the shares you own in accordance with your instructions on your proxy card, in your vote by telephone, or in your vote over the internet. If you return the proxy card, vote by telephone, or vote over the internet, but do not give any instructions on a particular matter described in this proxy statement, the persons named in the proxy card will vote the shares you own in accordance with the recommendations of our board.

If the shares you own are held in “street name” by a bank or brokerage firm, your bank or brokerage firm, as the record holder of your shares, is required to vote your shares according to your instructions. In order to vote your shares, you will need to follow the directions that your bank or brokerage firm provides to you. Many banks and brokerage firms solicit voting instructions over the internet or by telephone. Even if your shares are held in street name, you are welcome to attend the Annual Meeting. If your shares are held in street name, you may not vote your shares at the Annual Meeting unless you obtain a “legal proxy,” executed in your favor, from the holder of record (i.e., your bank or brokerage firm). If you hold your shares in street name and wish to vote at the Annual Meeting, please contact your bank or brokerage firm before the Annual Meeting to obtain the necessary proxy from the holder of record. You must then submit the legal proxy to the Company by 5:00 p.m., Eastern Time, on June 22, 2022. Legal proxies may be submitted: by mail to Corporate Secretary, Idera Pharmaceuticals, Inc., 505 Eagleview Boulevard, Suite 212, Exton, Pennsylvania 19341; or by email to legal@iderapharma.com.

If the beneficial owner does not provide voting instructions, banks and brokerage firms cannot vote the shares with respect to “non-routine” matters, but can vote the shares with respect to “routine” matters. “Broker non-votes” occur when a beneficial owner of shares held in street name fails to provide instructions to the bank or brokerage firm holding the shares as to how to vote on matters deemed “non-routine.” We believe Proposal Three (the ratification of the selection of our independent registered public accounting firm) is a “routine” matter and, as a result, we do not expect there to be any broker non-votes. Proposal One (the election of directors), Proposal Two (the approval of, by non-binding vote, the compensation of the Company’s named executive officers for 2021) Proposal Four (the approval of an amendment to our 2013 Stock Incentive Plan) and Proposal Five (approval of an amendment to our 2017 Employee Stock Purchase Plan) are “non-routine” matters, and banks and brokerage firms cannot vote your shares on such proposals if you have not given voting instructions.

If you are a stockholder of record, even if you complete and return a proxy card or vote by telephone or over the internet, you may change or revoke your vote at any time before your proxy is exercised by taking one of the following actions:

If you own shares in street name, your bank or brokerage firm should provide you with instructions for changing or revoking your vote.

In order for business to be conducted at the Annual Meeting, a quorum must be present. A quorum consists of the holders of a majority of the shares of our common stock issued, outstanding and entitled to vote at the Annual Meeting.

Shares of common stock present or represented by proxy (including broker non-votes and shares that are abstained or withheld or with respect to which no voting instructions are provided for one or more of the matters to be voted upon) will be counted for the purpose of determining whether a quorum exists.

The table below sets forth the vote required for each matter being submitted to our stockholders at the Annual Meeting to be approved and the effect that abstentions, withheld votes, and broker non-votes:

If you wish to present a proposal at the 2023 annual meeting, but do not wish to have the proposal considered for inclusion in the proxy statement and proxy card or have not complied with the requirements for inclusion of such proposal in our proxy statement under SEC rules, you must also give written notice to us at the address noted above. Our bylaws specify the information that must be included in any such notice, including a brief description of the business to be brought before the annual meeting, the name of the stockholder proposing such business, and stock ownership information for such stockholder. In accordance with our bylaws, we must receive this notice (or the stockholder director nomination, see “Stockholder Nominees”) at least 60 days, but not more than 90 days, prior to the date of the 2023 annual meeting and the notice must include specified information regarding the proposal and the stockholder making the proposal.

Notwithstanding the foregoing, if we provide less than 70 days’ notice or prior public disclosure of the date of the annual meeting to the stockholders, notice by the stockholders must be received by our Secretary no later than the close of business on the tenth day following the date on which the notice of the annual meeting was mailed or such public disclosure was made, whichever occurs first. If a stockholder who wished to present a proposal fails to notify us by this date, the proxies that management solicits for that meeting will have discretionary authority to vote on the stockholder’s proposal if it is otherwise properly brought

Mr. Milano currently serves on the board of directors of Aclaris Therapeutics, Inc. (Nasdaq: ACRS) and BioCryst Pharmaceuticals, Inc. (Nasdaq: BCRX), each a publicly traded company, since 2020 and 2021, respectively, and privately held VenatoRx Pharmaceuticals, Inc., since 2013. Mr. Milano previously served as a director of Spark Therapeutics, Inc. and Vanda Pharmaceuticals Inc. from 2014 to 2019 and 2010 to 2019, respectively. Mr. Milano holds a Bachelor of Science degree in Accounting from Rider College.

We believe Mr. Milano’s qualifications to sit on our board include his knowledge of our Company as our President and CEO, knowledge of our industry, including over 20 years of experience serving in a variety of roles of increasing responsibility in the finance department, corporate administration, and operations of a multinational biopharmaceutical company, and understanding of pharmaceutical research and development, sales and marketing, strategy, and operations in both the United States and overseas. He also has corporate governance experience through service on other public company boards.

Mr. Geraghty, age 67, has served on our board since 2013 and as chair of our board from that time until April 2021. Mr. Geraghty is an industry leader with over 35 years of strategic and leadership experience, including more than 25 years as a senior member of executive teams at biotechnology companies developing and commercializing innovative therapies. From 2013 to 2016, Mr. Geraghty was an Entrepreneur in Residence at Third Rock Ventures, a leading biotech venture fund. From 2011 to 2012, he served as a Senior Vice President of Sanofi S.A., a global healthcare company. Prior to that, he served in various senior management roles at Genzyme Corporation, or Genzyme, a biotechnology company, from 1992 to 2011, including as Senior Vice President, International Development and President of Genzyme Europe. Mr. Geraghty currently serves as chairman of the board of Orchard Therapeutics plc and Pieris Pharmaceuticals, Inc. and as a member of the board of Voyager Therapeutics, Inc., and Fulcrum Therapeutics, Inc. He also previously served as a director of bluebird bio, Inc. and GTC Biotherapeutics, Inc.

We believe that Mr. Geraghty’s qualifications to sit on our board include his public company board and management experience and his broad and deep knowledge of our industry.

Dr. Gowen, age 63, served as the CEO and a board director of TamuroBio Inc., a privately held drug development company, from 2019 to 2021, and she remains on the board of directors. She was the founding President and CEO of Trevena, Inc., or Trevena, (Nasdaq: TRVN), a publicly traded biopharmaceutical company, from 2007 until her retirement in 2018; she remained a member of its board of directors until 2021. Prior to joining Trevena, Dr. Gowen was Senior Vice President for the Center of Excellence for External Drug Discovery at GlaxoSmithKline plc, or GSK, where she held a variety of leadership positions during her tenure of 15 years. Before GSK, Dr. Gowen was Senior Lecturer and Head, Bone Cell Biology Group, Department of Bone and Joint Medicine, of the University of Bath, U.K. Dr. Gowen has served as a director of Aclaris Therapeutics, Inc. (Nasdaq: ACRS) since 2019, Passage Bio, Inc. (Nasdaq: PASG), and as its Chairwoman, since 2021, and Merus NV (Nasdaq: MRUS) since 2021, each a publicly traded company. She previously held a board seat in the state biotechnology industry association, Life Sciences of Pennsylvania from 2015 until 2021 and in the national biotechnology industry association, BIO, from 2008 until 2018. Dr. Gowen previously served as a director of Human Genome Sciences, Inc., from 2008 until 2012, and Akebia Therapeutics, Inc. (Nasdaq: AKBA) from 2014 until 2021, both publicly traded companies, as well as Panorama Medicine, from 2020 until 2021 a privately held biotechnology company. She received her Ph.D.

We believe that Dr. Gowen’s qualifications to sit on our board include her significant public company management and board experience and knowledge of our industry.

Dr. Goldberg, age 67, has served as a member of the board of directors of ImmunoGen, Inc. (Nasdaq: IMGN) since 2011, a member of the board of directors of GlycoMimetics, Inc. (Nasdaq: GLYC) since 2014, a member of the board of directors of Blueprint Medicines Corporation (Nasdaq: BPMC) since 2015, and a member of the board of directors of Avacta Group plc (LON: AVCT) since 2021. In addition, he is a member of the board of directors of the American Cancer Society, a non-profit organization. Dr. Goldberg previously served on the board of directors of Audentes Therapeutics, Inc. from 2017 until 2020 and aTyr Pharma Inc. from 2015 until 2017.

Dr. Goldberg served as advisor and medical and regulatory strategist for Synageva BioPharma Corp., a biopharmaceutical company, from 2014 until 2015. Prior to that, he served as the Executive Vice President for Medical and Regulatory Strategy from January 2014 to October 2014 and as the Senior Vice President of Medical and Regulatory Affairs from 2011 to 2014. Dr. Goldberg served in a variety of senior management positions at Genzyme Corporation from 1996 to July 2011, including most recently as Senior Vice President for Clinical Development and Therapeutic Group Head for Oncology and Personalized Genetic Health from 2009 to 2011. Prior to working at Genzyme Corporation, he was a full-time staff physician at Brigham and Women’s Hospital and Dana Farber Cancer Institute. He was an Associate Professor of Medicine at Harvard Medical School from 1996 until 2021 and is currently a Lecturer and part-time faculty at Harvard Medical School. Dr. Goldberg is a board certified medical oncologist and hematologist and has more than 50 published papers.

Dr. Goldberg holds an A.B. from Harvard College and an M.D. from Harvard Medical School. We believe that Dr. Goldberg’s qualifications to sit on our board include his extensive scientific and medical background, public company board experience, and extensive experience in the management and operations of pharmaceutical companies.

Ms. Schafer, age 57, has served on the board of directors of Repare Therapeutics, Inc., or Repare, (Nasdaq: RPTX) since 2019, Insmed Incorporated, or Insmed, (Nasdaq: INSM) since 2020 and Kura Oncology Inc., or Kura, (Nasdaq: KURA) since 2021, each a publicly traded company. Ms. Schafer serves on the audit committee and nominating and corporate governance committee at Insmed. Ms. Schafer serves on the audit committee and is the chair of the nominating and corporate governance committee at Repare. Ms. Schafer is the chair of the audit committee at Kura. Additionally, Ms. Schafer has served as a non-fiduciary board member of OneGoal NY, a non-profit entity, since 2019.

Ms. Schafer previously served on the board, as a member of the compensation committee and nominating and corporate governance committee, of Five Prime Therapeutics, Inc., or Five Prime, (Nasdaq: FPRX) from 2019 until 2021 when it was acquired by Amgen Inc.

Ms. Schafer has more than 25 years of experience in investment banking and equity capital markets, as well as in corporate finance and business development in the biopharmaceutical sector, with substantial experience financing and facilitating investor access for public and private healthcare companies. Ms. Schafer most recently served as Vice Chair, Equity Capital Markets at Wells Fargo Securities LLC. Prior to Wells Fargo, Ms. Schafer served as Vice President of Finance and Business Development at Lexicon Pharmaceuticals, Inc. Earlier in her career, Ms. Schafer served as an Equity Capital Markets Sector Head in

Our board is responsible for establishing our broad corporate policies and overseeing the management of our Company. Our chief executive officer and our other executive officers are responsible for our day-to-day operations. Our board evaluates our corporate performance and approves, among other things, our corporate strategies and objectives, operating plans, major commitments of corporate resources and significant policies. Our board also evaluates and appoints our executive officers.

Our board met eight times during 2021. Each director attended at least 75% of the total number of board meetings and committee meetings for the committees on which he or she served during 2021.

While we do not have a formal policy regarding director attendance, we strongly encourage and expect our directors to attend our annual meetings of stockholders. All of our directors virtually attended the 2021 annual meeting of stockholders.

Our board does not have a policy on whether the offices of chairperson of the board and chief executive officer should be separate and, if they are to be separate, whether the chairperson should be selected from among the independent directors or should be an employee of our Company. Our board believes that it should have the flexibility to make these determinations at any given point in time in the way that it believes best to provide appropriate leadership for our Company. Currently, Mr. Milano serves as our chief executive officer. Mr. Geraghty, an independent director, served as chair of our board from 2013 until April 28, 2021, at which time Mr. Dougherty, also an independent director, succeeded him as chair. Our board believes that this separation allows our chief executive officer to focus on our day-to-day business, while allowing the chairperson to lead the board in its fundamental role of providing advice to and independent oversight of management.

Our board recognizes that no single leadership model is right for all companies and at all times and that depending on the circumstances, other leadership models, such as a combined chairperson and chief executive officer, might be appropriate. Accordingly, the board periodically reviews its leadership structure. Pursuant to our corporate governance guidelines, if the chairperson is not an independent director, the board may elect a lead director from its independent directors. In such case, the chairperson and chief executive officer would consult periodically with the lead director on board matters and on issues facing our Company. In addition, the lead director would serve as the principal liaison between the chairperson of the board and the independent directors and would preside at any executive session of independent directors.

Our compensation committee’s purpose is to oversee the discharge of the responsibilities of the board relating to compensation of the Company’s executive officers, employees, and board members. Our compensation committee’s responsibilities include:

The current members of our compensation committee are Dr. Gowen (Chair), Dr. Csimma, and Mr. Dougherty. During 2021, the compensation committee held five meetings. The compensation committee may delegate to one or more executive officers of the Company the power to grant operations or stock awards to employees of the Company or its subsidiaries who are not directors or executive officers of the Company. The compensation committee may also form and delegate authority to one or more subcommittees as it deems appropriate.

The processes and procedures followed by our compensation committee in considering and determining executive compensation are described below under the heading “Executive Compensation.”

Our nominating and corporate governance committee’s purpose is to identify and recommend to the board persons to be nominated for election as directors, develop and recommend corporate governance principals, and oversee the evaluation of the board. Our nominating and corporate governance committee’s responsibilities include:

The current members of our nominating and corporate governance committee are Messrs. Geraghty (Chair) and Dougherty, and Ms. Schafer. During 2021, the nominating and corporate governance committee held three meetings.

The processes and procedures followed by our nominating and corporate governance committee in identifying and evaluating director candidates are described below under the heading “Director Nomination Process.”

Our securities are listed on the Nasdaq Capital Market and we use the standards of “independence” prescribed by rules set forth by Nasdaq. Under Nasdaq rules, a majority of a listed company’s board of directors must be comprised of independent directors. In addition, Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s audit committee and compensation committee be independent and satisfy additional independence criteria set forth in Rules 10A-3 and 10C-1, respectively, under the Exchange Act. Under the applicable Nasdaq rules, a director will only qualify as an “independent director” if, in the opinion of our board, that person does not have a relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Our board determined in early 2021 that each of Dr. Csimma, Mr. Dougherty, Mr. Geraghty, Dr. Goldberg, Dr. Gowen, and Ms. Schafer and all of the members of each of the audit, compensation and nominating and corporate governance committees are independent as defined under applicable rules of the Nasdaq, and, in the case of all members of the audit and compensation committees, the independence requirements contemplated by Rule 10A-3 and Rule 10C-1 under the Exchange Act. As Mr. Milano is our President and Chief Executive Officer, he is not independent.

The process followed by our nominating and corporate governance committee to identify and evaluate director candidates includes requesting recommendations from members of our board and others, meeting to evaluate biographical information and background material relating to potential candidates and interviewing selected candidates by members of our nominating and corporate governance committee and our board. The nominating and corporate governance committee has from time to time used a third-party recruiting firm to identify and interview potential candidates.

In considering whether to recommend any particular candidate for inclusion in the board’s slate of recommended director nominees, the nominating and corporate governance committee will apply the criteria set forth in our corporate governance guidelines. All candidates, regardless of the source of the candidate’s recommendation, are evaluated using the same criteria. These criteria include assessing the candidate’s:

Our corporate governance guidelines also provide that candidates should not be discriminated against on the basis of race, religion, national origin, sex, sexual orientation, disability, or any other basis proscribed by law and that our nominating and corporate governance committee should consider the value of diversity of the board when evaluating particular candidates. The nominating and corporate governance committee has not adopted any formal or informal diversity policy and treats diversity as one of the criteria to be considered by the committee. The nominating and corporate governance committee does not assign specific weights to particular criteria that the nominating and corporate governance committee reviews and no particular criterion is a prerequisite for the consideration of any prospective director nominee. We believe that the backgrounds and qualifications of our directors, considered as a group, should provide a composite and diverse mix of experience, knowledge, and abilities that will allow the board to fulfill its responsibilities.

Stockholders may recommend individuals to the nominating and corporate governance committee for consideration as potential director candidates by submitting the individuals’ name, together with appropriate biographical information and background materials and a statement as to whether the stockholder or group of stockholders making the recommendation has beneficially owned more than 5% of our common stock for at least one year as of the date such recommendation is made, to the Nominating and Corporate Governance Committee, c/o Secretary, Idera Pharmaceuticals, Inc., 505 Eagleview Blvd., Suite 212, Exton, PA 19341. Assuming that appropriate biographical and background material has been provided on a timely basis, the nominating and corporate governance committee will evaluate stockholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for candidates provided by other sources. If the board determines to nominate a stockholder-recommended candidate and recommends his or her election, then his or her name will be included in our proxy card for the next annual meeting.

Stockholders also have the right under our bylaws to nominate director candidates directly, without any action or recommendation on the part of the nominating and corporate governance committee or the board, by following the procedures set forth in our bylaws, including advance notice requirements. Candidates nominated by stockholders in accordance with the procedures set forth in our bylaws will not be included in our proxy card for the next annual meeting. See “Information about the Annual Meeting—How and when may I submit a proposal for the 2023 annual meeting of stockholders?” for more information about these procedures and the deadline for submitting director nominations.

Stockholders and other interested parties may communicate directly with the board (and with independent directors, individually or as a group). Our board will give appropriate attention to written communications that are submitted by stockholders and other interested parties and will respond if and as appropriate. The chairperson of the board (if an independent director) or the lead independent director, if any, is primarily responsible for monitoring communications from stockholders and for providing copies or summaries to the other directors, as he or she deems appropriate.

To our knowledge and except as indicated in the notes to this table and pursuant to applicable community property laws, each stockholder named in the table has sole voting and investment power with respect to the shares set forth opposite such stockholder’s name. The percentage of ownership is based on 52,924,870 shares of our common stock issued and outstanding on April 1, 2022. All fractional common share amounts have been rounded to the nearest whole number. To our knowledge, except as noted below, no person or entity is the beneficial owner of more than 5% of the voting power of the Company’s stock.

Our general executive compensation philosophy has been established by our compensation committee, which acts pursuant to authority delegated to it by our board and as set forth in its charter. Our compensation committee is comprised solely of independent directors as defined by applicable rules and regulations of Nasdaq and the SEC. See “Board Committees—Compensation Committee” for further detail regarding the composition, independence, and responsibilities of our compensation committee.

We conducted an advisory vote on executive compensation, commonly referred to as a “say-on-pay” proposal, at our 2021 Annual Meeting of Stockholders. While this advisory vote was not binding, we value the opinions of our stockholders and, to the extent there is any significant vote against the compensation of our NEOs, we will consider our stockholders’ concerns and our board and compensation committee will evaluate whether any actions are necessary to address those concerns.

At our 2021 Annual Meeting of Stockholders, approximately 97% of the votes cast on the advisory vote on executive compensation approved the 2020 compensation paid to our NEOs as disclosed in the proxy statement for that meeting. The board and compensation committee considered the results of this advisory vote, together with the other factors and data, in determining executive compensation for 2021. Specifically, the compensation committee viewed the outcome of the say-on-pay vote as overwhelming approval of the Company’s executive compensation program and therefore did not make any significant changes to the structure or elements of the executive compensation program. The board and the compensation committee will continue to consider the outcome of our say-on-pay votes when making future compensation decisions for our NEOs.

In order to accomplish its objectives consistent with its philosophy for executive compensation and determine compensation for our NEOs, our compensation committee reviews competitive information on executive compensation practices from peer companies as well as an assessment of overall corporate performance and individual performance. In connection therewith, our compensation committee typically takes the following actions annually:

Our chief executive officer does not submit an assessment of his own performance and does not participate in the compensation committee’s deliberations or the determination of his own compensation. Our compensation committee reviews and approves, or recommends for approval by the board, the compensation of our NEOs, including our chief executive officer.

At the end of each year, the compensation committee evaluates corporate and individual NEO performance.

In assessing corporate performance, the compensation committee evaluates corporate performance relative to the approved corporate goals for the applicable year, as well as other aspects of corporate performance, including progress and achievement of milestones outside of the corporate goals.

The compensation committee evaluates individual performance with respect to the areas that fall within each NEO’s responsibility. In doing so, the compensation committee relies on the chief executive officer’s evaluation of the other NEOs. The chief executive officer prepares evaluations of the other NEOs, which includes comparing such individual’s performance to his or her individual performance goals. The chief executive officer recommends annual executive salary increases, annual stock option awards, and bonuses, if any, for the other NEOs; the compensation committee then reviews and approves, as appropriate, the chief executive officer’s recommendations. In the case of the chief executive officer, the compensation committee independently conducts his individual performance evaluation and determines his compensation accordingly.

During this process, the compensation committee consults with its independent compensation consultant. In connection with the compensation committee’s annual performance and compensation review in the fourth quarter of each year, the independent compensation consultant provides the compensation committee with a blend of the data from the peer group (identified below for 2021 compensation decisions) and relevant compensation survey data from the Radford Global Life Sciences Survey. We refer to this blended data as the “market compensation data.”

For all NEOs, annual base salary increases, if any, are awarded during the first quarter following the end of the fiscal year. Equity awards and bonuses, if any, are granted as determined by the compensation committee. Annual target bonuses and performance goals are typically established in the first quarter of the fiscal year, with payout for such bonuses in January of the following fiscal year upon the compensation committee’s determination of the achievement of the applicable performance goals. Equity awards are typically given in two biannual tranches, generally in the first and third quarters of the fiscal year. Special equity awards, if any, are granted on an ad hoc basis as determined by the compensation committee.

In the third quarter of 2020, our compensation committee engaged Pearl Meyer & Partners, LLC (“Pearl Meyer”) in connection with our 2021 annual compensation assessment to review our executive compensation practices and to provide the compensation committee with an assessment of our compensation program against competitive market data. See “Use of Market Compensation Data” below for a discussion of the competitive market compensation data compiled by Pearl Meyer. Based on this assessment, Pearl

The following table lists the companies included in the peer group used in connection with our 2021 compensation decisions referred to above:

Our variable or “at-risk,” performance-based compensation consists of short-term compensation in the form of an annual cash bonus and long-term compensation in the form of equity awards that vest over time from the date of grant of the award or from the time of achievement of performance milestones. The annual cash bonus is intended to provide an incentive to our NEOs to achieve short-term operational objectives, while equity awards are intended to incentivize our NEOs to achieve longer-term strategic business goals, which should ultimately lead to higher stock prices and increased stockholder value. We do not have any formal or informal policy or target for allocating compensation between short- and long-term compensation, between cash and non-cash compensation, or among the different forms of non-cash compensation. Instead, the compensation committee, after reviewing industry information, including the compensation practices of our peer companies, and our cash resources, determines subjectively what it believes to be the appropriate level and mix of the various compensation components.

We do not have any defined benefit pension plans or non-qualified deferred compensation plans. We maintain broad-based benefits, including health, dental, and vision insurance, life and disability insurance, and a 401(k) plan, that are provided to all employees. Our NEOs may also participate in our employee stock purchase plan, which is generally available to all employees who work over 20 hours per week, so long as they own less than 5% of our common stock, including for this purpose vested and unvested stock options and restricted stock units (RSUs). We provide limited perquisites consisting of certain relocation benefits.

We are party to employment agreements and employment offer letters with each of our NEOs. Employment agreements and employment offer letters with our NEOs are described below under the caption “Employment Agreements with Our NEOs.”

Based on these achievements and resulting category scores, in January 2022, the compensation committee approved a corporate performance score of 50%.

In December 2020, as part of its annual executive compensation and performance review, the compensation committee reviewed the 2020 market compensation data regarding annual stock option grants. In January 2021, the compensation committee approved the grant of the first tranche of the biannual option awards to our NEOs and in July 2021, the compensation committee approved the grant of the second tranche of biannual option awards to our NEOs.

Our board adopted this policy for our employees in recognition of the importance of equity awards to the compensation of employees and in order to provide each of our employees with the opportunity to get the full benefit of the options and RSUs held by the employee in the event of his or her retirement after making 10 years of contributions to our Company.

If the NEO is terminated without “cause” or resigns for “good reason,” without regard to whether a change of control has occurred, such NEO will be entitled to the following under the Form Severance/CIC Agreement (collectively, the “Without Cause/For Good Reason Benefits”), subject to the NEO’s timely execution and non-revocation of a general release of claims in a form provided by us and the NEO’s continued compliance with the invention, non-disclosure, and non-competition agreement previously entered into in connection with the commencement of NEO’s employment:

We have entered into employment agreements with each of our NEOs. All the NEOs are at-will employees.

We are a party to an Employment Agreement, dated as of December 1, 2014, with Mr. Milano, our President and Chief Executive Officer (the “Milano Employment Agreement”). Under the Milano Employment Agreement, Mr. Milano is entitled to receive an annual base salary of $600,000 or such higher amount as our compensation committee or our board may determine. In addition, pursuant to the Milano Employment Agreement, Mr. Milano is eligible to receive an annual bonus of 50% of his base salary, subject to adjustment, based on the achievement of both individual and Company performance objectives as developed and determined by our board.

Mr. Milano’s severance and change in control benefits are governed by the Form Severance/CIC Agreement.

We are a party to an Employment Offer Letter, dated October 15, 2015, with Mr. Kirby, our Senior Vice President and Chief Financial Officer (the “Kirby Employment Agreement”). Under the terms of the Kirby Employment Agreement, Mr. Kirby is entitled to receive an annual base salary of $225,000 or such higher amount as our compensation committee or our board may determine. In addition, under the Kirby Employment Agreement, Mr. Kirby is eligible to receive an annual bonus of 30% of his base salary, subject to adjustment, based on the achievement of both individual and Company performance objectives. Concurrent with his promotion to Chief Financial Officer in 2019, Mr. Kirby’s base salary and bonus target were adjusted to $336,000 and 40%, respectively, or such higher amount as our compensation committee or our board may determine.

Mr. Kirby’s severance and change in control benefits are governed by the Form Severance/CIC Agreement.

Mr. Lim’s severance and change in control benefits are governed by the Form Severance/CIC Agreement.

The following table sets forth information regarding the outstanding equity held by our NEOs as of December 31, 2021.