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 (Amendment No.       )

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Definitive Proxy Statement

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Soliciting Material under §240.14a-12

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Ocugen, Inc.

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11 Great Valley Parkway
Malvern, PA 19355

2023 ANNUAL MEETING OF SHAREHOLDERS

To be Held on June 9, 2023

April 20, 2023

DEAR SHAREHOLDER:

I am pleased to share with you our vision, through Courageous Innovation, to deliver vaccines in support of public health, and gene and cell therapies to address unmet medical needs. In 2022, the Ocugen team relentlessly pursued our vision and significantly advanced our programs with consistent, timely deliverables.

Our modifier gene therapy platform experienced several milestones, most notably, the initiation of the OCU400 Phase 1/2 study to assess the safety and efficacy in treating Retinitis Pigmentosa (RP) associated with NR2E3 and RHO mutations and Leber Congenital Amaurosis (LCA) associated with mutation(s) in the CEP290 gene. Currently, RP is associated with mutations in more than 100 genes, affecting approximately 110,000 people in the United States. LCA is associated with mutations in more than 25 genes, affecting approximately 15,000 people in the U.S. Unlike single-gene replacement therapies, which only target one genetic mutation, we believe that our modifier gene therapy platform, through its use of Nuclear Hormone Receptors (NHRs), represents a novel approach with the potential to address multiple retinal diseases caused by mutations in multiple genes with a single unique product as well as address complex diseases caused by imbalances in multiple gene networks. Trial enrollment for adults with RP is now complete with 18 study participants, and in April 2022, we announced positive preliminary safety and efficacy results from our ongoing study. At the close of 2022, the FDA granted expanded orphan drug designation (ODD) to OCU400 encompassing RP and LCA, further supporting a gene-agnostic approach to treating diseases that can result in blindness.

In the third quarter of 2022, we expanded our gene therapy pipeline with OCU410ST as a potential therapy for Stargardt disease—an orphan disease affecting 35,000 people in the U.S. for whom no treatment options exist. In the second quarter of 2023, we intend to file Investigational New Drug applications for OCU410ST, along with OCU410, a potential treatment for dry age-related macular degeneration (dAMD), a disease affecting 10 million people in the U.S. While a therapy was recently approved for geographic atrophy (GA)—an advanced form of dAMD—this offering has limitations, including the need for frequent intravitreal injections (approximately 6-12 doses per year). OCU410 is a potential one-time, curative therapy with a single sub-retinal injection.

Our cell therapy pipeline consists of NeoCart®—a Phase 3-ready, regenerative cell therapy technology that combines revolutionary advancement in bioengineering and cell processing to enhance the autologous cartilage repair process. NeoCart is specifically designed for the treatment of articular cartilage defects in the knee, which affects millions of Americans. Cartilage defects often lead to osteoarthritis if left untreated. Current surgical and nonsurgical treatment options are limited in their efficacy and durability. NeoCart has the potential to provide regenerative native-like cartilage strength with durable benefits post transplantation. In addition to receiving a Regenerative Medicine Advanced Therapy (RMAT) designation from the U.S. Food and Drug Administration (FDA), we received concurrence from the FDA on the confirmatory Phase 3 trial design. We are renovating our R&D facility to accommodate current Good Manufacturing Practice manufacturing of NeoCart for personalized clinical trial material and intend to initiate the Phase 3 trial in the first half of 2024, subject to discussions with the FDA.

 

 

Finally, we added OCU500, a novel adenovirus-vectored (ChAd) mucosal vaccine, specifically designed to block COVID-19 at the point of virus entry, to our vaccines portfolio. We remain dedicated in our commitment to fight COVID-19 and address the current treatment gaps with this next generation offering. Subsequently, we announced the OCU500 series of vaccines that includes OCU510, a seasonal quadrivalent flu inhaled vaccine; and OCU520, a combination quadrivalent seasonal flu and bivalent COVID-19 inhaled vaccine. The OCU500 series grants Ocugen a distinct product candidate profile status that could significantly impact major global health obstacles and maximize our opportunity to serve broader patient markets. Please note that for 2023 we are pivoting our focus away from COVAXIN™ towards our next-generation inhaled COVID-19 and flu vaccines programs, which address public health concerns and therefore, will only advance with government funding.

We continue to evolve and raise the bar across all our functions, with our people at the center of everything we do. Recruiting and retaining top talent remains a key corporate goal and in 2022 we were named among the “Best Places to Work” by the Philadelphia Business Journal. As employee survey responses play an important part in the overall evaluation, this recognition reflects our efforts to build a great corporate culture.

I am very proud of everyone at Ocugen. You will see later in the report that in 2022 through early 2023, we grew exponentially to strengthen critical areas of the business and prepare for the next stages of growth. We added Quan Vu—a seasoned healthcare business executive with more than two decades of experience in business development, strategy, and finance—as our CFO/CBO, and Ranjit R. Deshmukh, Ph.D.—with 25 years of experience in manufacturing, late-stage development, and technical operations at major pharmaceutical companies—to lead our manufacturing and supply functions. We also promoted our people from within, including the appointment of Dr. Arun Upadhyay to Chief Scientific Officer to lead the Research and Development and Medical functions. It has been a pleasure working alongside Dr. Upadhyay over the past several years, and we look to his scientific leadership to deliver new breakthroughs in medicine.

We continued to increase visibility among the investment and finance community with our first R&D Day this past November. This was an excellent opportunity to educate bankers, analysts, and funds about the science behind our modifier gene therapy technology for retinal diseases, and to share our long-term vision that includes Biologics License Application filings and product launches in each of the next five years.

Ocugen ended 2022 by ringing the Nasdaq closing bell in recognition of recent accomplishments and in celebration of our passion for patients. It was a phenomenal and humbling experience, and I was deeply honored to share it with our leadership team and Board members.

Over the past decade, we have transformed Ocugen into a cutting-edge, science-based biotechnology company with a robust business model that includes three distinct, paradigm-changing platform technologies: inhalation vaccines, gene therapies, and regenerative cell therapies that address encompassing infectious, ophthalmic, and orthopedic diseases, respectively. 2023 will be a pivotal year for Ocugen as we further advance our diversified and differentiated pipeline and in pursuit of discoveries that may benefit millions of lives. Thank you for your continued support.

Sincerely,

THIS PROXY STATEMENT AND ENCLOSED PROXY CARD ARE
FIRST BEING MAILED TO SHAREHOLDERS ON OR ABOUT APRIL 20, 2023

 

 

TABLE OF CONTENTS

 

 

NOTICE OF ANNUAL MEETING

DEAR SHAREHOLDER:

You are invited to attend Ocugen, Inc.’s Annual Meeting of Shareholders (Annual Meeting) on Friday, June 9, 2023, at 8 a.m. ET.

This year’s Annual Meeting will be a completely virtual meeting of shareholders, which will be conducted via live audio webcast. You will be able to attend the Annual Meeting online and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/OCGN2023. You will also be able to vote your shares electronically at the Annual Meeting.

At the Annual Meeting, shareholders will vote:

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To elect the two director nominees that are set forth in the attached Proxy Statement to serve as Class III directors, whose terms will expire in 2026;

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To ratify the selection of Ernst & Young LLP (Ernst & Young) as our Independent Registered Public Accounting Firm for the 2023 fiscal year; and

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To approve, on an advisory basis, the compensation of our Named Executive Officers (NEOs).

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Shareholders will also transact any other business that may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting.

SHAREHOLDER COMMUNICATION

The Board will give appropriate attention to written communications that are submitted by shareholders and other interested parties and will respond if and as appropriate.

 

 

PROXY STATEMENT

This Proxy Statement, with the enclosed proxy card, is being furnished to shareholders of Ocugen, Inc. (the Company) in connection with the solicitation by our Board of proxies to be voted at our Annual Meeting and at any postponements or adjournments thereof. The Annual Meeting will be held virtually via live audio webcast on Friday, June 9, 2023, at 8 a.m. ET.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS. THIS PROXY STATEMENT AND THE ENCLOSED PROXY CARD ARE FIRST BEING MAILED TO OUR SHAREHOLDERS ON OR ABOUT APRIL 20, 2023. IN ACCORDANCE WITH THE RULES OF THE U.S. SECURITIES AND EXCHANGE COMMISSION, WE ARE ADVISING OUR SHAREHOLDERS OF THE AVAILABILITY ON THE INTERNET OF OUR PROXY MATERIALS RELATED TO OUR FORTHCOMING ANNUAL MEETING. BECAUSE WE HAVE ELECTED TO UTILIZE THE “FULL-SET DELIVERY” OPTION, WE ARE DELIVERING TO ALL SHAREHOLDERS PAPER COPIES OF ALL OF THE PROXY MATERIALS, AS WELL AS PROVIDING ACCESS TO THOSE PROXY MATERIALS ON A PUBLICLY ACCESSIBLE WEBSITE. THIS PROXY STATEMENT AND OUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2022 ARE AVAILABLE TO HOLDERS OF OUR COMMON STOCK AT WWW.PROXYVOTE.COM

 

 

USER’S GUIDE

PROXY DASHBOARD

To assist you in reviewing this year’s proposals, we call your attention to the following proxy summary. This is only a summary. Please review this Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the 2022 Annual Report) in full.

GENERAL INFORMATION

VOTING MATTERS AND VOTING RECOMMENDATIONS

 

 

BOARD OF DIRECTORS

MEET THE BOARD

The size of our Board is set at seven members and is divided into three classes, each of which has a three-year term. Class I consists of three directors, while Class II and Class III consist of two directors each. You are being asked to vote on the election of our Class III directors, Kirsten Castillo, MBA and Prabhavathi Fernandes, Ph.D., FIDSA, each to serve a three-year term expiring at our 2026 Annual Meeting of Shareholders and until their successors, if any, are elected or appointed, or upon their earlier death, resignation, retirement, disqualification, or removal. Our directors are elected by a plurality of the votes cast by our shareholders at the Annual Meeting. If no contrary indication is made, shares represented by executed proxies will be voted FOR the election of Kirsten Castillo, MBA, and Prabhavathi Fernandes, Ph.D., FIDSA. Each nominee has agreed to serve as a director if elected, and we have no reason to believe that any nominee will be unable to serve.

BOARD EXPERIENCE AND SKILLS MATRIX

The table below summarizes key qualifications, skills, or attributes most relevant to the decision to nominate the director to serve on the Board of Directors. A mark indicates a specific area of focus or expertise on which the Board relies most. The lack of a mark does not mean the director does not possess that qualification or skill. Each director’s biography below describes these qualifications and relevant experience in greater detail. We believe the table below demonstrates the breadth and diversity of the collective experience, expertise, and skills of our Board.

 

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NOMINEES FOR CLASS III DIRECTORS FOR ELECTION AT THE 2023 ANNUAL MEETING FOR TERMS TO EXPIRE AT THE 2026 ANNUAL MEETING

 

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CLASS I DIRECTORS—TERMS EXPIRING AT THE 2024 ANNUAL MEETING OF SHAREHOLDERS​

 

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CLASS II DIRECTORS—TERMS EXPIRING AT THE 2025 ANNUAL MEETING OF SHAREHOLDERS​

 

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BOARD COMMITTEES

Our Board has established various Committees to assist in discharging its duties: the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee, and the Science and Technology Committee. Each member of our Committees is an “independent director” as defined by the United States Securities and Exchange Commission (SEC) and The Nasdaq Stock Market LLC (Nasdaq). Each of the Committees has the authority, as its members deem appropriate, to engage legal counsel, other experts, or consultants to assist the Committee in carrying out its responsibilities. The Nominating and Corporate Governance Committee is responsible for overseeing periodic self-evaluations of the Board to determine whether our Board and its Committees are functioning effectively. Each Committee also conducts periodic self-evaluations of their own performance and reports its conclusions to our Board.

The Committee memberships and primary responsibilities of each Committee are as follows:

Audit Committee

The Audit Committee assists our Board by providing oversight of our financial management, Independent Registered Public Accounting Firm, accounting and financial reporting processes, as well as other matters as directed by the Board or the Audit Committee Charter.

Among other things, the Audit Committee’s responsibilities include:

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Having sole discretion and direct responsibility for appointing, evaluating, retaining, compensating, overseeing, and, when necessary, terminating our engagement with our Independent Registered Public Accounting Firm;

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Discussing with management and the Independent Registered Public Accounting Firm our annual and quarterly financial statements and related disclosures and pre-approving all audit services;

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Establishing and overseeing compliance with our procedures governing treatment of complaints concerning our accounting, internal controls related to accounting or auditing matters, and submissions of confidential and anonymous employee concerns regarding accounting or auditing matters;

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Reviewing our Code of Business Conduct and Ethics (Code of Conduct), including assessing the adequacy of the Code of Conduct and recommending any proposed changes to the Board, and our compliance with applicable legal requirements, as well as any litigation or material government investigations, and making corresponding reports to the Board;

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Overseeing our risk assessment and risk management processes and the guidelines and procedures to implement such processes;

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Reviewing and ratifying all related person transactions, based on the standards set forth in our Related Party Transactions Policy; and

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Preparing the Audit Committee Report required to be included in our annual proxy statement.

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The members of our Audit Committee are Dr. Kumar (Chair), Dr. Fernandes, and Dr. Whittington. Dr. Whittington became a member of the Audit Committee in June 2022. Manish Potti, former director who did not stand for re-election at our 2022 Annual Meeting of Shareholders, served as a member of our Audit Committee until June 2022. All members of our Audit Committee are deemed “independent” and financially literate under the applicable rules and regulations of the SEC and Nasdaq. Dr. Kumar and Dr. Whittington also qualify as an “audit committee financial expert” within the meaning of SEC regulations.

Compensation Committee

The Compensation Committee reviews the performance and development of our management in achieving corporate goals and objectives and ensures that our executive officers (including our CEO) are compensated effectively in a manner consistent with our strategy, competitive practice, and shareholder interests, as well as such other matters as directed by our Board or the Compensation Committee Charter. Among other things, the Compensation Committee’s responsibilities include:

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Reviewing and recommending to our Board the terms of any binding offer letters, employment agreements, termination agreements or arrangements, change in control agreements, indemnification agreements, and other material agreements that we execute with the CEO, as well as reviewing and approving the terms of any such letters, arrangements, or agreements that we execute with any other executive officer;

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Overseeing the evaluation of our executive officers and preparing assessments of their performance to be discussed periodically with the Board;

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Annually reviewing and making recommendations to the Board for approval of our CEO’s compensation level and annually reviewing and approving our other executive officers’ compensation levels (including salary, bonus, incentive compensation, severance arrangements, change in control benefits, and other forms of executive officer compensation);

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Reviewing and making recommendations to the Board regarding director compensation, including all forms of paid cash compensation and equity compensation granted to members of the Board;

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Reviewing and making recommendations to the Board regarding incentive compensation and equity-based plans that are subject to approval by the Board, as well as approving tax-qualified, non-discriminatory employee benefit plans (and any parallel non-qualified plans) for which shareholder approval is not sought and pursuant to which stock options or stock may be acquired by officers, directors, employees, or consultants;

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Overseeing the executive and equity compensation plans and other compensation and benefit plans that are adopted by us from time to time; and

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Determining stock ownership guidelines for our CEO and other executive officers and monitoring compliance with guidelines, if deemed advisable by the Board or the Compensation Committee.

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Our Compensation Committee may, in its sole discretion, retain or obtain the advice of compensation consultants, legal counsel, or other advisors, after taking into consideration applicable factors affecting independence that are specified under Nasdaq and SEC regulations. Our Compensation Committee is directly responsible for the appointment, compensation, and oversight of the work of any retained compensation consultant, legal counsel, and other advisors, and is empowered, without further action by our Board, to determine and require us to pay such compensation to any compensation consultant, legal counsel, and other advisor retained by the Compensation Committee. Our CEO annually reviews the performance of each of the other executive officers, including the other NEOs (as defined in “Compensation Discussion and Analysis”). He then recommends annual merit salary adjustments and any changes in annual or long-term incentive opportunities for other executives. The Compensation Committee considers our CEO’s recommendations in addition to data and recommendations presented by our executive compensation consultant.

The Compensation Committee engaged the services of Frederic W. Cook & Co., Inc. (FW Cook) to provide executive compensation consulting services. FW Cook presented a summary executive compensation report to the Compensation Committee, which included data about the compensation paid by the companies included

 

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in our peer group (see “Compensation Discussion and Analysis”) and other employers who compete with us for executives. Additionally, FW Cook has updated the Compensation Committee on new developments in areas that fall within the Compensation Committee’s jurisdiction and is available to advise the Compensation Committee regarding its responsibilities. FW Cook serves solely at the discretion of the Compensation Committee and their fees are approved by the Compensation Committee.

The members of our Compensation Committee are Dr. Fernandes (Chair), Ms. Castillo, and Dr. Whittington. Dr. Whittington became a member of our Compensation Committee in June 2022. Dr. Zhang previously served as a member of our Compensation Committee until June 2022. Our Board has determined that all Compensation Committee members are independent under Nasdaq’s listing standards, and that they are “non-employee directors” for purposes of Rule 16b-3 under the Securities and Exchange Act of 1934, as amended (the Exchange Act).

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee identifies qualified individuals for membership on the Board, recommends to the Board the director nominees to fill vacancies on the Board and to stand for election at each annual meeting of shareholders, develops and recommends a set of corporate governance guidelines for the Board, and provides oversight of the corporate governance affairs of the Board, as well as such other matters as directed by the Board or the Nominating and Corporate Governance Committee Charter. Among other things, our Nominating and Corporate Governance Committee’s responsibilities include:

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Periodically reviewing and adopting procedures regarding director candidates proposed by shareholders;

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Retaining and terminating any search firm used to identify director nominees, approving the search firm’s fees and other retention terms, and authorizing our payment of compensation to any such search firm without further action by the Board;

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Identifying, recommending, and evaluating candidates, including candidates submitted by shareholders, for election to the Board and recommending to the Board (i) nominees to fill vacancies or new positions on the Board and (ii) the slate of nominees to stand for election by our shareholders at each annual meeting of shareholders;

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Developing and recommending to the Board corporate governance guidelines, and periodically reviewing and recommending any necessary or appropriate changes to such guidelines;

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Recommending to the Board (i) directors to be appointed to or to fill vacancies on each of our Committees; and (ii) director independence determinations for the Board as a whole and each of our Committees;

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Periodically assessing the appropriate size, composition, and leadership structure of the Board as a whole, the needs of the Board and the respective Committees of the Board, and the qualification of director candidates in light of these needs;

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Overseeing annual self-evaluations of the Board to determine whether it and its Committees are functioning effectively, as well as determining the nature of the evaluation, supervising the conduct of the evaluation, and preparing an assessment of the Board’s performance to be discussed with the Board;

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Reviewing the adequacy of the Charter and Bylaws and recommending to the Board, as conditions dictate, amendments for consideration by the shareholders; and

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Reviewing plans for the development, retention, and succession of our executive officers.

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The Nominating and Corporate Governance Committee is responsible for identifying individuals that the Committee believes are qualified to serve as Board members, as described below in “Board of Directors—​Board Structure and Composition.” Although the Nominating and Corporate Governance Committee has not established a formal policy regarding the consideration of diversity in identifying director nominees, the criteria for individuals qualified to serve as Board members as set forth in our Corporate Governance Guidelines include diversity as a factor for consideration. The Nominating and Corporate Governance Committee considers candidates proposed by our shareholders and reviews and evaluates available information regarding candidates proposed by shareholders and applies the same criteria, and follows substantially the same process in considering them, as it does in considering other candidates.

The members of our Nominating and Corporate Governance Committee are Ms. Castillo (Chair), Dr. Zhang, and Dr. Kompella. Dr. Kumar previously served as a member of our Nominating and Corporate Governance Committee until June 2022. Our Board has determined that all Nominating and Corporate Governance Committee members are independent as set forth in Nasdaq’s listing standards.

Science and Technology Committee

The Science and Technology Committee’s focus is to identify and assess business development opportunities that diversify and strengthen our product candidate portfolio. The Science and Technology Committee’s scientific expertise will actively provide direction to us in efforts to continue to expand on our mission of offering innovative solutions for unmet needs within healthcare. Among other things, our Science and Technology Committee’s responsibilities include:

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Identifying, reviewing, and recommending to our Board opportunities to grow and diversify our product portfolio;

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Assessing our current programs within preclinical and clinical stages in an effort to recommend strategic opportunities or changes to our portfolio to the Board;

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Periodically providing updates to the Board regarding market trends, competitive analysis, and scientific innovation that are of relevance to us; and

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Participating in due diligence efforts and offering a scientific perspective in the assessment of business development opportunities.

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The members of our Science and Technology Committee are Dr. Kompella (Chair), Dr. Fernandes, and Ms. Castillo. Our Board has determined that all Science and Technology Committee members are independent as set forth in Nasdaq’s listing standards.

 

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BOARD GOVERNANCE

Our Board is our ultimate decision-making body, except with respect to those matters reserved to the shareholders. The Board selects our CEO, who in turn selects the members of our senior management team, that are responsible for our day-to-day operations. Our Board acts as an advisor and counselor to senior management and oversees their performance.

Our Board consists of directors divided into three classes, with each class holding office for a three-year term. Kirsten Castillo, MBA and Prabhavathi Fernandes, Ph.D., FIDSA have been nominated by our Board for election at the Annual Meeting for three-year terms that will expire at our 2026 Annual Meeting of Shareholders and until their successors, if any, are elected or appointed, or upon their earlier death, resignation, retirement, disqualification, or removal. Each of the nominees has agreed to be named and to serve, and we expect each nominee to be able to serve if elected. If any nominee is unable to serve, our Nominating and Corporate Governance Committee will recommend to our Board a replacement nominee. The Board may then designate the replacement nominee to stand for election. If you voted for the unavailable nominee, your vote will be cast for their replacement.

BOARD GOVERNANCE SUMMARY FACTS

The following table summarizes our current Board structure and key elements of our corporate governance framework:

BOARD COMMITMENT TO DIVERSITY

Board diversity and inclusion is critical to our success. We are proud that 100% of the Ocugen Board meets the Nasdaq requirement for diversity. Per Nasdaq Rule 5605(f), companies are, “required to have at least two diverse board members or to explain the company’s reasons for not meeting this diversity objective. In the U.S., this means one diverse director must self-identify as female, and the other director must self-identify as either a racial or ethnic minority or a member of the LGBTQ+ community.” Presently, the Board consists of an optimal mix of skills, expertise, and diversity capable of effectively overseeing the execution of our business and meeting our evolving needs, with diversity reflecting gender, age, race, ethnicity, background, professional experience, and perspectives.

BOARD STRUCTURE AND COMPOSITION

As presently constituted, the Board represents a deliberate mix of members who have a deep understanding of our business, as well as members who have different skill sets and points of view. The matrix below provides certain highlights of the composition of our Board based on self-identification. Each of the categories listed in the matrix below has the meaning as it is used in Nasdaq Listing Rule 5605(f).

 

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CRITERIA FOR BOARD MEMBERSHIP

The Nominating and Corporate Governance Committee has identified certain criteria it will consider in identifying director nominees. Important general criteria and considerations for Board membership include:

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Nominees should have a reputation for integrity, honesty, and adherence to high ethical standards;

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Nominees should demonstrate business acumen, experience, and ability to exercise sound judgment in matters that relate to our current and long-term objectives and should be willing and able to contribute positively to our decision-making process;

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Nominees should have a commitment to understand us and our industry and to regularly attend and participate in meetings of the Board and the Committees of the Board;

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Nominees should have the interest and ability to understand our sometimes-conflicting interests of the various constituencies, which may include shareholders, employees, customers, governmental units, creditors, and the general public, and to act in the interest of all stakeholders;

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Nominees should not have, nor appear to have, a conflict of interest that would impair the nominees’ ability to represent our interests and the interests of our shareholders and to fulfill the responsibilities of a director;

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Nominees shall not be discriminated against on the basis of race, religion, national origin, sex, sexual orientation, disability, or any other basis proscribed by law. The value of diversity on the Board should be considered; and

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Nominees should have the potential to serve on the Board for at least five years.

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BOARD INDEPENDENCE

Under Nasdaq’s listing standards, a majority of the members of a listed company’s Board of Directors must qualify as “independent,” as affirmatively determined by the Board of Directors. Our Board consults with our counsel to ensure that the Board’s determinations are consistent with all relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent Nasdaq listing standards, as in effect from time to time.

Our Board has determined that all our directors, except for Dr. Musunuri, are “independent” directors, as defined under the rules of Nasdaq. In making such determination, our Board considered the relationships that each such non-employee director has with us and all other facts and circumstances that our Board deemed relevant in determining his or her independence, including the beneficial ownership of our common stock by each non-employee director. Our independent directors generally meet in an executive session at each regularly scheduled Board meeting.

BOARD LEADERSHIP STRUCTURE

Our Board should remain free to configure the leadership of our Board and the Company in the way that best serves our interests at the time and, accordingly, has no fixed policy with respect to combining or separating the responsibilities of the Chairman of the Board and CEO. Dr. Shankar Musunuri, our CEO, currently serves as the Chairman of the Board. Combining the roles of CEO and Chairman of the Board fosters accountability, effective decision-making, and alignment between interests of the Board and management.

Our Board may, but is not required to, appoint a Lead Independent Director, who shall be selected by a majority of our independent directors and who shall preside over executive sessions of the Board. As of the date of this Proxy Statement, the Board has not appointed a Lead Independent Director. The Nominating and Corporate Governance Committee will periodically assess our Board’s leadership structure and determine whether the leadership structure is appropriate given our specific characteristics or circumstances.

BOARD AND SHAREHOLDER MEETING ATTENDANCE

During 2022, the Board met six times, the Audit Committee met five times, the Compensation Committee met four times, the Nominating and Corporate Governance Committee met four times, and the Science and Technology Committee met three times.

Each Board member attended 75% or more of the aggregate number of meetings of the Board and of the Committees on which he or she served, held during the portion of the last fiscal year for which he or she was a director or Committee member.

Directors are encouraged, but not required, to attend our annual meeting of shareholders. Seven of the directors attended the 2022 Annual Meeting of Shareholders.

 

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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 2022 and as of the date of this Proxy Statement, none of the members of the Compensation Committee was or is one of our officers or employees, and none of our executive officers has served or is serving on the compensation committee or on the board of directors of any company that employed or employs any member of our Compensation Committee or Board.

EVALUATING BOARD EFFECTIVENESS

The Board is committed to continuous improvement and annual self-evaluation is an important tool for evaluating effectiveness. The Board and each Committee conducts rigorous annual self-evaluations of their performance and effectiveness.

 

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DIRECTOR COMPENSATION PROGRAM

We have designed and implemented our compensation program for our non-employee directors to attract, motivate, and retain individuals committed to our values and goals and who have the expertise and experience that we need to achieve those goals.

In December 2021, the Compensation Committee recommended to the Board updates to the non-employee director compensation program. This recommendation was based on FW Cook’s competitive review of our non-employee director compensation compared to our peer group and market trends. Among other updates, the Board determined that fixed-value director equity grants eliminate fluctuations in compensation value related to short-term changes in our stock price. The recommended updates, which reflect the compensation program for non-employee directors in fiscal year 2022, were approved by the Board in December 2021, as follows:

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Initial Equity Grant. Initial grant of stock options to purchase shares of common stock with a grant date fair value of $285,000, vesting monthly over three years, subject to continued service on the Board.

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Annual Equity Grant. An annual grant of stock options with a grant date fair value of $285,000, granted on the date of our Annual Meeting, and will vest at the earlier of the one-year anniversary of the grant date or the next Annual Meeting of Shareholders, subject to continued service on the Board.

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Cash Retainers. Cash retainers (to be paid in four quarterly installments) as described below:

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In December 2022, the Compensation Committee recommended to the Board that the non-employee director compensation program remain the same for fiscal year 2023. This recommendation, which was based on a similar methodology across companies in our peer group, including cash retainers, was approved by the Board in December 2022.

 

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2022 DIRECTOR COMPENSATION

The following table provides summary information regarding the 2022 compensation earned by our non-employee directors. Dr. Musunuri did not receive any additional compensation for his service as Chairman of our Board. Dr. Musunuri’s compensation as an employee is described under “Executive Compensation” below.

(1)Amounts represent the grant date fair value of stock option awards granted during 2022, computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 718, Compensation—Stock Compensation (ASC 718). For a discussion of the assumptions we employ in determining the fair value of stock option awards, please see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Annual Report. The aggregate number of stock options outstanding on December 31, 2022 was 296,426 for Dr. Kompella, 286,926 for Dr. Kumar, 246,474 for Dr. Whittington, 248,426 for Dr. Zhang, 294,426 for Ms. Castillo, and 302,926 for Dr. Fernandes.

(2)This amount includes the initial equity grant awarded to Dr. Whittington upon her appointment to the Board and the annual equity grant that was awarded on the date of our 2022 Annual Meeting of Shareholders.

(3)Mr. Potti resigned from the Board effective as of the date of our 2022 Annual Meeting of Shareholders. Amounts reported as ‘Fees Earned or Paid in Cash’ above represent cash retainers earned for his service on the Board prior to his resignation.

(4)In recognition of Mr. Potti’s past service and contributions to us, the Board amended the terms of Mr. Potti’s outstanding stock options, such that (i) the post-termination exercise period for each stock option was increased from three months to six months following the date of separation, and (ii) otherwise unvested stock options to purchase 91,066 shares of common stock became vested as of Mr. Potti’s resignation date (rather than being forfeited at that time). Mr. Potti did not have any stock options outstanding on December 31, 2022. The amount reported is the fair value resulting from such modifications described above, computed in accordance with ASC 718.

Director Stock Ownership Guidelines. To further align the interests of our directors and executive officers and our shareholders, the Board adopted stock ownership guidelines in March 2022. In the case of our non-employee directors, the guidelines require that each director owns shares of our common stock that have an aggregate fair market value equal to or greater than five times the annual base cash retainer. Individuals have five years after first becoming subject to the guidelines to attain the requisite level of stock ownership. For a more detailed description of these guidelines, see “Compensation Discussion and Analysis—Stock Ownership Guidelines.”

 

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EXECUTIVE OFFICERS

 

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CORPORATE GOVERNANCE

BOARD OVERSIGHT OF COMPANY CULTURE AND ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) HIGHLIGHTS

The Board is committed to fostering a strong culture of compliance and ethical conduct and has structured its Committees and their activities to support this commitment. The Board supports management’s promotion of a corporate culture of integrity, ethical behavior, and compliance with laws and regulations, and ensures that our culture and strategy are aligned. The Board expects all directors, as well as officers and employees, to conduct themselves in a manner consistent with our Code of Conduct and our values. The Board believes that a strong culture of integrity, ethics, and compliance is fundamental to the conduct of our business, and is necessary for managing risk, maintaining investor trust, and ensuring corporate governance.

In fiscal year 2022, our notable ESG highlights include:

•

Our continued focus on further cultivating inclusion, advancing environmental sustainability, and promoting healthier lives for our employees and communities;

​

•

Our commitment to becoming a more environmentally friendly workplace and taking efforts to reduce our use of plastic internally;

​

•

Our employees’ acknowledgement and adherence to several policies including our Whistleblower Policy and Insider Trading Policy covering Anti-Hedging and Anti-Pledging prohibited practices;

​

•

Our expansion of our footprint by recruiting an additional 48 team members, thereby increasing total employee headcount from January 1, 2022 to December 31, 2022 by 50%. We value the diversity of our employees and take pride in our commitment to diversity and inclusion across all levels of our organizational structure, including our Board. We continue to focus on expanding our commitment to diversity and inclusion across our entire workforce, including working with managers to develop strategies for building diverse teams and promoting the advancement of employees from diverse backgrounds;

​

•

Our investment in the formation of a Diversity, Equity, & Inclusion (DEI) Committee and Charter to cultivate a sense of community, belonging, and respect across our organization;

​

•

Our expansion of wellness benefits to include offerings such as pre-tax flexible spending accounts for dependent care and employer-assisted health savings accounts for employees who elected eligible medical plans;

​

•

Our encouragement of healthy lifestyle choices through on-site fitness center offerings for our employees;

​

•

Our commitment and enhancements related to cybersecurity and data protection via our adoption of web and email security, data backup solutions, VPN connections, antivirus solutions, and a company-wide firewall of incoming and outgoing internet traffic; and

​

•

Our continued sponsorship of and participation in the Foundation for Fighting Blindness’ Annual Philadelphia Vision Walk. We anticipate we will continue to support charitable initiatives in alignment with our mission to deliver new options for people facing certain diseases.

​

 

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We are committed to good corporate governance and integrity in our business dealings. Our governance practices are documented in our Sixth Amended and Restated Certificate of Incorporation, as amended (the Charter), our Amended and Restated Bylaws (the Bylaws), our Code of Conduct, our Corporate Governance Guidelines, and the charters of the Committees. Aspects of our governance documents are summarized below. You can find the charters for the Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, and Science and Technology Committee, and our Code of Conduct on our website at www.ocugen.com under “Investors.”

We have a written set of corporate governance guidelines that is designed to help ensure effective corporate governance of our Company. Our corporate governance guidelines cover topics including, but not limited to, director responsibilities, director qualification standards, director access to management and independent advisors, director compensation, director orientation and continuing education, the periodic evaluations of our Board and its Committees, and succession planning. Succession planning of our Board is critical to our success. Our goal is to achieve a Board that provides us with effective oversight through the appropriate balance of diversity of perspectives, experience, expertise, and skills. Our corporate governance guidelines are reviewed periodically by the Nominating and Corporate Governance Committee to assess the adequacy of the corporate governance guidelines and recommend any proposed changes to the Board. The corporate governance guidelines are amended by our Board when appropriate. The full text of our corporate governance guidelines is available on our website at www.ocugen.com under “Investors.”

Our Board’s role in risk oversight is consistent with our leadership structure, with management having day-to-day responsibility for assessing and managing our risk exposure and our Board actively overseeing the management of our risks—both at the Board and Committee level. The risk oversight process includes receiving regular reports from each of the Committees and our executive officers to enable our Board to understand our risk identification, risk management, and risk mitigation strategies with respect to areas of potential material risk, including operations (including cyber-security), finance, legal, regulatory, and strategic and reputational risk.

Our Board focuses on the overall risks affecting us. Each Committee has been delegated the responsibility for the oversight of specific risks that fall within its area of responsibility. For example:

•

The Audit Committee of our Board oversees management of financial reporting, compliance, and litigation risks, including risks related to our insurance, information technology, cybersecurity, human resources, and regulatory matters, as well as the steps management has taken to monitor and control such exposures.

​

•

The Compensation Committee is responsible for overseeing the management of risks relating to our executive compensation policies, plans, and arrangements and the extent to which those policies, plans, and arrangements increase or decrease our risk.

​

•

The Nominating and Corporate Governance Committee manages risks associated with the independence of our Board, potential conflicts of interest, and the effectiveness of our Board.

​

•

The Science and Technology Committee assists the Board with its oversight responsibility for risk management in areas affecting Ocugen’s research and development activities.

​

While each Committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is regularly informed through Committee reports about such risks. Matters of significant strategic risk are considered by our entire Board.

CODE OF CONDUCT

We have a written Code of Conduct that applies to our directors and employees, including our executive officers. The Code of Conduct covers fundamental ethical and compliance-related principles and practices such as accurate accounting records and financial reporting, avoidance of conflicts of interest, protection and use of our property, compliance with legal and regulatory requirements, and internal reporting procedures for violations of the Code of Conduct. The Code of Conduct is available on our website at www.ocugen.com and

 

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any amendments to the Code of Conduct, or any waivers of its requirements, will be disclosed on our website or in a Current Report on Form 8-K, which we will file with the SEC.

Only the Board may waive any specific provisions of the Code of Conduct for directors and executive officers. The CFO has been designated as the Compliance Officer and may waive any specific provision of this Code of Conduct for employees other than a director and executive officer. In the event of an approved waiver involving the conduct of a director or executive officer, appropriate and prompt disclosure, including disclosure of the reasons for the waiver, must be made to our shareholders as required by applicable laws and stock exchange rules. The Audit Committee shall be responsible for monitoring compliance with the Code of Conduct and shall assess the adequacy of the Code of Conduct periodically and recommend any changes to the Code of Conduct to the Board for approval.

INSIDER TRADING POLICY

Our insider trading policy applies to all of our employees, including our executive officers and directors. The policy, among other things, prohibits (i) trading in call or put options involving our securities and other derivative securities; (ii) engaging in short sales of our securities; (iii) holding our securities in a margin account or pledging our securities to secure margin or other loans; and (iv) engaging in any forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts.

FAMILY RELATIONSHIPS

There are no family relationships among any of our directors or executive officers.

POLICIES AND PROCEDURES FOR RELATED PARTY TRANSACTIONS

Our Board has adopted a Related Party Transactions Policy setting forth the policies and procedures for the review and approval or ratification of related party transactions. This policy covers any financial transactions, arrangements, or relationships, or any series of similar transactions, arrangements, or relationships, in which we were or are to be a participant, where the amount involved exceeds the lesser of (i) $120,000 in any twelve-month period or (ii) 1% of the average of our assets at the end of the last two fiscal years and in which any related person had, has, or will have a direct or indirect material interest. Our management is responsible for determining whether a transaction is a related party transaction subject to our policy, and upon such determination, is responsible for disclosing the material facts concerning the transaction and the related party’s interest in our transaction to our Audit Committee. In reviewing and approving any such transactions, our Audit Committee is required to consider all available relevant facts and circumstances with respect to the transaction and shall evaluate all available options, including ratification, revision, or termination of the transaction. All of the transactions described under “Certain Relationships and Related Party Transactions” below were either approved or ratified in compliance with our Related Party Transactions Policy.

 

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Described below are any transactions occurring since January 1, 2021 and any currently proposed transactions to which we were a party and in which:

•

The amount involved in the transaction exceeds $120,000; and

​

•

A director, executive officer, holder of more than 5% of our outstanding capital stock, or any member of such person’s immediate family that has or will have a direct or indirect material interest, other than the compensation, termination, and change in control arrangements that are described in “Executive Compensation.”

​

Collaborations with Advaite, Inc.

In April 2020, we entered into an agreement with Advaite, Inc., (Advaite) to provide certain support services for Advaite’s development of a diagnostic test kit that is designed to detect antibodies to SARS-CoV-2, the virus that causes COVID-19. Pursuant to the agreement, we were paid on an hourly basis at a rate between $200 to $375 for those hours worked on Advaite-related projects by specific employees, and we are eligible to receive tiered royalty payments based on cumulative net sales of the antibody test kits. In December 2021, we entered into an agreement with Advaite to purchase 2,000 COVID-19 SalivaDirect™ Collection Test Kits (the Test Kits) for use in our trial for COVAXIN™. Pursuant to the agreement, we agreed to pay $320,000 to Advaite for such COVID-19 test kits and the processing of such test kit samples. Additionally, in October 2022, we placed an order for an additional 500 Test Kits and the processing of such test kit samples in the amount of $80,000.

In March 2022, we entered into a services agreement with Advaite to engage them to develop and validate bioanalytical methods for SARS-CoV-2 Spike S1 ELISA, in support of our trials and ongoing research. Pursuant to the services agreement, we agreed to pay approximately $295,000 to Advaite for such services.

Advaite was co-founded and is being managed by Mr. Karthik Musunuri, the son of our Chairman of the Board and CEO, Dr. Shankar Musunuri.

Sponsored Research Agreement with University of Colorado, Denver

In February 2021, we entered into a sponsored research agreement (the UoC Agreement) with the Regents of the University of Colorado, for and on behalf of the University of Colorado, Denver (UoC Denver). The UoC Agreement was effective as of December 15, 2020. Pursuant to the UoC Agreement, UoC Denver agreed to provide certain specified research services related to viral vector formulations for targeted delivery to treat retinal diseases. As consideration for the performance of such services, we agreed to pay UoC Denver a total of approximately $250,000. The research services are to be carried out under the direction and supervision of Dr. Kompella, a member of our Board. The UoC Agreement contains customary terms related to confidentiality, publicity rights to research results and intellectual property, and indemnification.

Employment Agreements

For information on employment arrangements and compensation for service as our officers or on our Board, see “Director Compensation” and “Executive Compensation” sections of this Proxy Statement.

Indemnification Agreements

Our Charter and Bylaws require us to indemnify our directors and officers to the fullest extent permitted by Delaware law. We also entered into indemnity agreements with certain officers and directors. These agreements provide, among other things, that we will indemnify the officer or director, under the circumstances and to the extent provided for in the agreement, for expenses, damages, judgments, fines, and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason of his or her position as a director, officer, or other agent of us, and otherwise to the fullest extent permitted under Delaware law and our Bylaws and Charter.

 

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ITEM 1: ELECTION OF CLASS III DIRECTORS FOR A THREE-YEAR TERM EXPIRING IN 2026

At the Annual Meeting, our shareholders will vote on the election of two Class III director nominees named in this Proxy Statement as directors, each to serve until our 2026 Annual Meeting of Shareholders and until their respective successors are elected and qualified. Our Board has unanimously nominated Kirsten Castillo, MBA, and Prabhavathi Fernandes, Ph.D., FIDSA for election to our Board at the Annual Meeting.

Each of the nominees has agreed to be named and to serve, and we expect each nominee to be able to serve if elected. If any nominee is unable to serve, the Nominating and Corporate Governance Committee will recommend to our Board a replacement nominee. The Board may then designate the replacement nominee to stand for election. If you voted for the unavailable nominee, your vote will be cast for their replacement.

 

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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES

The Audit Committee has appointed and engaged Ernst & Young to serve as our Independent Registered Public Accounting Firm to audit our consolidated financial statements for the 2023 fiscal year and to perform audit-related services.

The Audit Committee works with our management in order to negotiate appropriate fees with our Independent Registered Public Accounting Firm, and is ultimately responsible for approving those fees. The following is a summary and description of fees for services provided by the Ernst & Young in fiscal years 2022 and 2021. Other than as set forth below, no professional services were rendered or fees billed by Ernst & Young during fiscal years 2022 and 2021.

“Audit Fees” means the fees billed or incurred by Ernst & Young for professional services rendered in connection with the annual audit, including the integrated audit of internal control over financial reporting, and quarterly reviews of our consolidated financial statements for the years ended December 31, 2022 and 2021, and the fees billed in connection with the filing of registration statements with the SEC.

“Audit-Related Fees” consisted of amounts paid to Ernst & Young for assurance and related services reasonably related to the performance of the audit or review of the financial statements and that are not reported under the ‘Audit Fees’ category. There were no such fees incurred during the years ended December 31, 2022 or 2021.

“Tax Fees” consisted of amounts paid to Ernst & Young for tax compliance and consulting. There were no such fees incurred during the years ended December 31, 2022 or 2021.

AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES

The Audit Committee is responsible for appointing, setting compensation for, and overseeing the work of the Independent Registered Public Accounting Firm. The Audit Committee Charter establishes a policy that all audit and permissible non-audit services provided by our Independent Registered Public Accounting Firm, Ernst & Young, will be pre-approved by the Audit Committee. The Audit Committee can pre-approve specified services in defined categories of audit services and audit-related services up to specified amounts as part of the Audit Committee’s approval of the scope of the engagement of Ernst & Young or on an individual case-by-case basis before Ernst & Young is engaged to provide a service. All such audit services were pre-approved in accordance with this policy during the fiscal year ended December 31, 2022. Ernst & Young has not been engaged to perform any non-audit services or tax services.

 

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AUDIT COMMITTEE REPORT

The Audit Committee has reviewed and discussed the audited consolidated financial statements for the fiscal year ended December 31, 2022, with management and our Independent Registered Public Accounting Firm, Ernst & Young. The Audit Committee has discussed with Ernst & Young the matters required to be discussed by the applicable requirements of the auditing standards of the Public Company Accounting Oversight Board (PCAOB) and the SEC. The Audit Committee has also received the written disclosures and the letter from Ernst & Young required by applicable requirements of the PCAOB regarding Ernst & Young’s communications with the Audit Committee concerning independence and has discussed with Ernst & Young the firm’s independence. Based on the foregoing, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in our 2022 Annual Report for filing with the SEC.

Ocugen, Inc.
Audit Committee
Ramesh Kumar, Ph.D., Chair
Prabhavathi Fernandes, Ph.D., FIDSA
Marna C. Whittington, Ph.D.

ITEM 2: RATIFICATION OF APPOINTMENT OF ERNST & YOUNG AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2023

The Audit Committee has appointed and engaged Ernst & Young to serve as our Independent Registered Public Accounting Firm to audit our consolidated financial statements for the 2023 fiscal year and to perform audit-related services. Shareholders are hereby asked to ratify the Audit Committee’s appointment of Ernst & Young as our Independent Registered Public Accounting Firm for the 2023 fiscal year.

The Audit Committee is solely responsible for selecting our independent auditors. Although shareholder ratification of the appointment of Ernst & Young to serve as our Independent Registered Public Accounting Firm is not required by law or our organizational documents, the Board has determined that it is desirable to seek shareholders’ ratification as a matter of good corporate governance in view of the critical role played by Independent Registered Public Accounting Firms in maintaining the integrity of financial controls and reporting. If the shareholders do not ratify the appointment of Ernst & Young, the Audit Committee will reconsider its selection and decide whether to engage an alternative Independent Registered Public Accounting Firm.

Representatives of Ernst & Young are expected to attend the Annual Meeting where they will be available to respond to appropriate questions and, if they desire, to make a statement.

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS & MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of common stock as of the Record Date by (a) each person known by us to be the beneficial owner of more than 5% of the outstanding shares of our common stock, (b) each NEO identified in the Summary Compensation Table below, (c) each director and nominee for director, and (d) all named executive officers and directors as a group.

The percentage of common stock outstanding is based on 226,427,193 shares of our common stock outstanding as of the Record Date. For purposes of the table below, and in accordance with the rules of the SEC, we deem shares of common stock subject to stock options or warrants that are currently exercisable or exercisable within 60 days of the Record Date to be outstanding and to be beneficially owned by the person holding the stock options or warrants for the purpose of computing the percentage ownership of that person, but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person. Except as otherwise noted, each of the persons or entities in this table has sole voting and investing power with respect to all of the shares of common stock beneficially owned by them, subject to community property laws, where applicable. Except as otherwise noted below, the street address of each beneficial owner is c/o Ocugen, Inc., 11 Great Valley Parkway, Malvern, PA 19355.

* Less than 1%

(1)Consists of 15,061,361 shares of common stock, which is based on the most recent publicly disclosed information available. The address for BlackRock, Inc. is 55 East 52nd Street, New York, NY 10001.

(2) Consists of 11,859,143 shares of common stock, which is based on the most recent publicly disclosed information available. The address for The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.

(3)Consists of 30,121,024 shares of common stock, which is based on the most recent publicly disclosed information available. The address for State Street Corporation is 1 Lincoln Street, Boston, MA 02111.

 

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(4)Consists of 25,215,653 shares of common stock, which is based on the most recent publicly disclosed information available. The address for SSgA Funds Management, Inc. is 1 Lincoln Street, Boston, MA 02111.

(5)Consists of (i)  483,636 shares of common stock, 7,191 shares of common stock issuable pursuant to warrants exercisable within 60 days of the Record Date, and 2,925,698 shares of common stock issuable pursuant to stock options exercisable within 60 days of the Record Date held by Dr. Musunuri; and (ii) 1,145,299 shares of common stock and 405 shares of common stock issuable pursuant to warrants exercisable within 60 days of the Record Date, in each case held by KVM Holdings, LLC. Dr. Musunuri is a member and officer of KVM Holdings, LLC and has voting and investment power over the shares held by KVM Holdings, LLC.

(6)Consists of 35,591 shares of common stock held by Mr. Subramanian, which is based on the most recent publicly disclosed information available.

(7)Consists of 3,920 shares of common stock held, which is based on the most recent publicly disclosed information available, and 256,037 shares of common stock issuance pursuant to stock options exercisable within 60 days of the Record Date held by Ms. Crespo.

(8)Consists of 253,805 shares of common stock issuable pursuant to stock options exercisable within 60 days of the Record Date.

(9)Consists of (i) 215,305 shares of common stock issuable pursuant to stock options exercisable within 60 days of the Record Date held by Dr. Zhang and (ii) 964,904 shares of common stock held by Gupiao Trust. Dr. Zhang is the beneficiary of Gupiao Trust and has voting and investment power over securities held by Gupiao Trust.

(10)Consists of (i) 550,674 shares of common stock, 354 shares of common stock issuable pursuant to warrants exercisable within 60 days of the Record Date, and 263,305 shares of common stock issuable pursuant to stock options exercisable within 60 days of the Record Date held by Dr. Kompella; and (ii) 154,416 shares of common stock held by Kompella LLC. Dr. Kompella has voting and investment power over the shares of common stock held by Kompella LLC.

(11)Consists of 50,000 shares of common stock and 261,305 shares of common stock issuable pursuant to stock options exercisable within 60 days of the Record Date.

(12)Consists of 269,805 shares of common stock issuable pursuant to stock options exercisable within 60 days of the Record Date.

(13)Consists of (i) 181,462 shares of common stock issuable pursuant to stock options exercisable within 60 days of the Record Date held by Dr. Whittington; and (ii) 1,000 shares of common stock held by Marna C. Whittington Revocable Trust. Dr. Whittington is the trustee and sole beneficiary of the Marna C. Whittington Revocable Trust.

(14) Consists of 3,366,486 shares of common stock, 7,950 shares of common stock issuable pursuant to warrants exercisable within 60 days of April 13, 2023, and 4,674,348 shares of common stock issuable pursuant to stock options exercisable within 60 days of April 13, 2023.

 

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COMPENSATION DISCUSSION & ANALYSIS

This Compensation Discussion and Analysis (CD&A) describes our compensation strategy, philosophy, policies, and practices underlying our executive compensation program for 2022. It also provides information regarding the manner and context in which compensation was earned by and awarded to our 2022 NEOs listed below.

•

Shankar Musunuri, Ph.D., MBA, our Chairman of the Board and CEO;

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•

Jessica Crespo, CPA, our former Chief Accounting Officer and Senior Vice President, Finance; and

​

•

Sanjay Subramanian, MBA, our former CFO, Head of Corporate Development, and Corporate Secretary.

​

2022 PERFORMANCE HIGHLIGHTS & COMPENSATION OUTCOMES

We executed our strategic corporate goals during 2022, which are reflected by the following:

•

Initiated and completed dosing in patients with RP in the dose-escalation portion of our Phase 1/2 trial for OCU400, a product candidate within our modifier gene therapy platform, and expanded such trial to include CEP290-related LCA;

​

•

Received ODD from the FDA for nuclear receptor subfamily 2 group E member 3-related RP and LCA;

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•

Diversified our innovative product candidate pipeline with NeoCart, our regenerative medicine cell therapy platform, which was granted RMAT designation by the FDA;

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•

Received concurrence from the FDA on the confirmatory Phase 3 trial for NeoCart;

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•

Expanded our exclusive license agreement (as amended, the COVAXIN Agreement) with Bharat Biotech International Limited (Bharat Biotech) to include rights to develop, manufacture, and commercialize BBV152, our intramuscular COVID-19 vaccine candidate known as COVAXIN, in Mexico. Towards the end of 2022, we evaluated our development efforts for COVAXIN and management elected to solicit funding from government agencies for the continued development of COVAXIN;

​

•

Completed dosing in the Phase 2/3 immuno-bridging and broadening trial for COVAXIN;

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•

Entered into an exclusive license agreement (the WU License Agreement) with The Washington University in St. Louis, pursuant to which we obtained the rights in the United States, Europe, and Japan to develop, manufacture, and commercialize an inhaled mucosal COVID-19 vaccine for the prevention of COVID-19;

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•

Hosted our R&D Day at the Nasdaq Market Site in New York City to highlight our research and innovative technologies;

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•

Raised $57.8 million in net proceeds from financial initiatives to support our operations and future growth;

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•

Recruited an additional 48 team members, increasing total full-time employee headcount from December 31, 2021 to December 31, 2022 by 50%, including key hires within our Clinical and Manufacturing organizations;

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•

Formed a DEI Committee and Charter and identified short-term commitments related to DEI. 44% of our employees identify as female and 53% of our employees identify as ethnic and racial minorities for the fiscal year 2022; and

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•

Received recognition by the Philadelphia Business Journal as one of Philadelphia’s best places to work in 2022, validating our efforts to build a great corporate culture.

​

Overview of Our Executive Compensation Program. Our executive compensation program is designed to align our NEOs’ pay with performance. Our performance directly impacted incentive compensation pay outcomes for our NEOs as discussed below.

 

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•

Our executive compensation program is primarily performance-based, for both annual cash incentives and long-term equity incentives (LTI), which include stock options and restricted stock units (RSUs). In 2022, a majority of the total compensation target (base salary, annual cash incentives, and the grant date fair market value of equity awards) of our NEOs was variable (approximately 91% for our CEO and 70% for our other NEO and was based on performance and/or stock price. This excludes Mr. Subramanian as he was only employed by us for part of 2022. Additionally, this calculation is based on Ms. Crespo’s target compensation following her promotion to Chief Accounting Officer and Senior Vice President, Finance).

​

The above charts display the 2022 CEO and other NEO compensation breakout between non-variable and variable compensation. The ‘2022 Other NEO Compensation’ chart does not include our former CFO, Sanjay Subramanian, as he was only employed by us for part of 2022 and we believe that including him in this chart would misrepresent the average by increasing the percentage of compensation reported as variable compensation. Non-variable compensation consists of the NEOs’ base salaries. Variable compensation consists of 2022 cash incentives (bonus at target) and LTIs (based on grant date fair market value).

•

For 2022, our NEOs were eligible for target cash bonuses that ranged from 40% to 66% of base salary, that could be earned against pre-established corporate performance criteria. For our NEOs other than our CEO, the bonus was also based, in part, on individual performance achievements. Our CEO’s annual bonus payout was 100.5% of target based on achievement of our corporate goals as determined by the Board. Our other NEO’s annual bonus was paid out at 97.4% of target, based on the achievement of our corporate goals at 100.5% and the individual performance assessment by the CEO, as approved by the Compensation Committee. Upon his voluntary termination in March 2022, our former CFO was paid $51,953, which amount represents a pro-rata portion of his 2022 target annual cash incentive, with such pro-ration based on the portion of 2022 completed as of the date of his resignation, as approved by the Compensation Committee. This amount was paid to our former CFO in connection with his provision of six months of transitional consulting services.

​

•

The 2022 LTI compensation for our NEOs was comprised of both time-based stock options and RSUs. In the Compensation Committee’s view, stock options are inherently performance-based and facilitate alignment with shareholders, as executives will realize value only if there is stock price appreciation above predetermined strike prices through the applicable exercise dates. In addition, both time-based stock options and RSUs are earned over three years, which vesting period is intended to encourage and reward long-term retention. The change from a LTI mix of 100% stock options in 2021 to a mix of both stock options and RSUs for our NEOs in 2022 was recommended by our independent compensation consultant to align with the practice of our peer group, manage dilution, and attract and retain talented and highly qualified executives.

​

Say-on-Pay Voting. As part of the annual review of our executive compensation program, the Compensation Committee considers the outcome of the annual advisory vote of shareholders. At the 2022 Annual Meeting of Shareholders, approximately 78% of the “say-on-pay” votes cast were in favor of the compensation of our NEOs. As a result of thorough review of our executive compensation program, we diversified our equity compensation program to include RSUs, and approved a new peer group for 2023, all of which are described in further detail below along with other features of our executive compensation program.

Positive Pay Practices. The following features of our compensation program are designed to align the interests of our executive team with those of our shareholders and with market best practices:

 

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EXECUTIVE COMPENSATION PHILOSOPHY & STRATEGY

Our compensation philosophy is to provide a compensation package that will attract and retain high-performing talent in our industry and motivate our executive officers to create long-term value for the Company and its shareholders. The Compensation Committee believes that compensation programs should include short-term and long-term components, including cash and equity-based compensation, and that compensation provided to our executives should remain competitive relative to compensation paid by operating companies of similar size and stage of development in our industry. The Compensation Committee intends to align the compensation of our executive officers with the interests of our shareholders, evaluating executive performance based on both the achievement of short-term corporate goals and long-term business objectives and strategies.

ROLES & RESPONSIBILITIES & PROCESS FOR DETERMINING EXECUTIVE COMPENSATION

The Compensation Committee considers various factors in setting compensation for our executive officers, including the Company’s performance, the executive officer’s functional performance, experience and responsibilities, and the compensation of executive officers in similar positions in our peer group.

Role of the Compensation Committee. Our Compensation Committee, which consists of three independent directors, has primary responsibility for overseeing the compensation program for our NEOs. In making executive compensation decisions, the Compensation Committee considers a variety of factors and data, most importantly our corporate performance and the individual executive officer’s performance and considers the totality of compensation that may be paid as well as compensation trends amongst our peer group. In particular, the Compensation Committee annually reviews the base salaries, annual cash bonuses, and equity compensation of our NEOs and periodically reviews other elements of our compensation program. The Compensation Committee retains the right to hire outside advisors as needed to assist in reviewing and revising our executive compensation program. The responsibilities of the Compensation Committee are set forth in detail starting on page 9 of this Proxy Statement and in the Compensation Committee Charter, which can be found on our website at www.ocugen.com under “Investors.”

 

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Role of the CEO. Each year, our CEO assesses the performance of each executive officer, other than himself, for the prior year and makes recommendations to our Compensation Committee about the compensation of each executive officer. Our CEO’s recommendations are based on numerous factors including, but not limited to, the following:

•

Company, team, and individual performance;

​

•

Leadership competencies;

​

•

External market competitiveness; and

​

•

Internal pay comparisons.

​

Our CEO also provides a self-assessment of his achievements for the prior year. The Compensation Committee reviews and considers the CEO’s recommendations, as well as his self-assessment, together with all other information it deems relevant, including the input and recommendations of our independent compensation consultant, in determining the elements of compensation and compensation levels for each NEO.

Role of the Independent Compensation Consultant. Our Compensation Committee believes that independent advice is critical in developing our executive compensation program. The Compensation Committee continued to engage FW Cook during 2022 as its independent advisor to review and provide advice regarding the design of all elements of our executive compensation program. FW Cook provided expert knowledge of regulatory developments, marketplace trends, and best practices relating to executive compensation and competitive pay levels, provided guidance on the composition of our peer group, and engages on other matters as needed and as directed solely by the Compensation Committee. Additionally, FW Cook also provided independent advisory support to the Compensation Committee on the compensation of our non-executive directors. Our independent compensation consultant did not provide any other services to us and reported directly to the Compensation Committee. The Compensation Committee assessed our compensation consultant’s independence annually and, in accordance with applicable SEC and Nasdaq rules, confirmed that FW Cook’s work did not raise any conflicts of interest and that FW Cook remained independent under applicable rules in 2022.

Peer Group Determination. The executive peer group consisted of the 20 companies identified below, as recommended by FW Cook and approved by the Compensation Committee in June 2022. In determining the new peer group, FW Cook reviewed companies between 0.5x and 2.0x market capitalization and less than $250.0 million in revenue with the appropriate industry and business fit (biotechnology companies with a focus on vaccines, cell and gene therapies, and rare and unmet diseases). Compensation review and analysis was performed in November 2022. Fiscal year 2023 target total direct compensation for the NEOs was approved with reference to our new peer group, which is shown below.

* Global Blood Therapeutics, Inc. was acquired by Pfizer Inc. in August 2022 subsequent to the approval of our 2023 peer group.

 

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Compared to the Company’s 2022 peer group, the 2023 peer group includes the addition of 2seventy bio, Inc., a recent spin-off from bluebird bio, Inc. with relevant size and business focus, and Editas Medicine, Inc., a company with relevant size and frequent inclusion within the peer groups of our peers. Additionally, we removed Arena Pharmaceuticals, Inc. and Translate Bio, Inc. due to their acquisitions by Pfizer Inc. and Sanofi S.A., respectively. The Compensation Committee uses the peer group compensation data as one of several factors in assessing appropriate parameters for base salary, annual cash incentives, and LTI. We also supplement the data for our peer group with published compensation surveys where appropriate. The Compensation Committee’s compensation decisions are made on a case-by-case basis. Benchmark results do not, in and of themselves, determine individual compensation decisions and we do not target specific pay percentiles. Overall, we believe that information from the peer group enables the Compensation Committee to create better alignment between executive pay and performance and to help ensure that we can attract and retain high-performing executive leaders.

Components of Our Executive Compensation Program

Direct compensation for our NEOs primarily consists of three principal components: base salary, annual cash incentive opportunities, and equity-based LTI awards.

Base Salary. Base salary represents the fixed portion of an executive officer’s compensation and is intended to provide compensation for day-to-day performance. The Compensation Committee believes a competitive base salary is a necessary element of any compensation program that is designed to attract and retain talented and experienced executives. Base salaries are reviewed annually, typically in connection with the annual performance review process, and adjusted from time to time to take into account market levels, individual responsibilities, performance, and experience.

In December 2021, the Compensation Committee reviewed the base salaries of our then-serving NEOs and decided to increase those base salaries after taking into account individual performance, expansion of responsibilities, scope of duties, competitive market for talent, and data provided by FW Cook. Base salaries for the NEOs for fiscal year 2022 were as follows:

(a)The increase in Dr. Musunuri’s base salary from the 2021 fiscal year to the 2022 fiscal year was based on his individual performance during the 2021 fiscal year and prior years, base salaries and bonus levels at companies within our peer group, and FW Cook’s recommendations.

(b)Ms. Crespo’s 2021 base salary level is not reflected here because she first became a NEO in 2022.

(c)In connection with Ms. Crespo’s promotion to Chief Accounting Officer and Senior Vice President, Finance in March 2022, her 2022 base salary increased from $300,000 to $375,000.

Annual Cash Incentive. The Compensation Committee believes that performance-based cash incentive bonuses play an important role in providing incentives to executives to achieve annual corporate goals. For fiscal year 2022, the Compensation Committee approved target annual incentive bonuses and developed a framework for determining the payout percentage.

 

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Each NEO has a target annual cash incentive amount, which is expressed as a percentage of his/her salary. This target is set forth in each NEO’s employment agreement and is evaluated by our Compensation Committee annually based upon a review of the peer group and industry data provided by FW Cook, as well as other items used in the process for determining executive officer compensation, as described above. From time to time, our Board or Compensation Committee may approve other discretionary or formulaic annual bonuses for the NEOs based on individual performance, our performance in connection with new hires for promotions or retention, or as otherwise determined to be appropriate.

The performance metrics for the 2022 bonus plan were selected and approved by the Compensation Committee to assess achievement in the following categories: COVAXIN program advancement, ophthalmology product pipeline advancement, expansion of product portfolio and capabilities, funding, and talent acquisition.

The 2022 annual incentive plan corporate goals, along with the performance assessments and results, each as approved by the Compensation Committee, are as follows:

 

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In assessing and reflecting on performance outcomes for the fiscal year 2022, the Compensation Committee determined to weigh each of the above goal categories from 5% to 50%. The Compensation Committee determined that the 2022 corporate goals were achieved at a rate of 100.5%. Consistent with prior practices, the Compensation Committee determined to base 100% of our CEO’s 2022 annual incentive payout on corporate performance, and for our other NEO, to base her 2022 annual incentive payout on 70% corporate performance and 30% individual performance. As a result of these assessments, the Compensation Committee approved a final achievement or payout factor for the 2022 annual incentive plan at 100.5% of target for the corporate performance. The approved 100.5% of corporate goal achievement was also reflected in all our employee annual incentive calculations and was not used solely for NEOs. The individual performance factor for Ms. Crespo was based on annual performance reviews, with achievement approved at 90%. Accordingly, bonuses were earned at 100.5% and 97.4% of target for Dr. Musunuri and Ms. Crespo, respectively.

 

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The approved 2022 annual incentive targets and actual amounts paid to our NEOs in February 2023, for performance in 2022, are set forth in the following table:

* Mr. Subramanian resigned from employment on March 18, 2022. At our request, Mr. Subramanian agreed to provide us with six months of transitional consulting services. In return we paid Mr. Subramanian $51,953 (which amount represents a pro-rata portion of his 2022 target annual cash incentive, with such pro-ration based on the portion of 2022 completed as of the date of his resignation).

Long-Term Equity Incentives. We believe that equity grants provide the NEOs with a strong link to long-term performance and retention incentives, create an ownership culture, and help to align the interests of executive officers and shareholders. Our general practice has been to grant stock option awards to each executive officer at the start of employment and on an annual basis for performance and retention purposes. Stock options or other equity-based awards may also be granted for accomplishments of specific milestones. The size and value of annual equity awards are based on considerations included in the process for determining executive compensation, and for 2022, were based in part on the recommendations of FW Cook.

In January 2022, the Compensation Committee approved a new LTI mix for our NEOs, consisting of 25% time-based RSUs and 75% time-based stock options. The Compensation Committee determined this equity mix would further diversify the equity-based portion of the executive officers’ compensation, support retention, and align with the LTI practices of our peer group. The 2022 RSUs and stock options would vest in equal installments over three years. We granted time-based stock options to each of our NEOs as part of the regular annual compensation program. The stock options have a ten-year term, will vest annually in equal installments over three years subject generally to continued service with us, and have a per share exercise price of $4.72, which was the closing price of our common stock on the grant date. We grant stock options based on our belief that they naturally align executives with the creation of shareholders value and are an important long-term incentive vehicle to retain and promote our culture. The RSUs vest annually in equal installments over three years subject generally to continued service with us. Ms. Crespo was also granted stock options, with a per share exercise price of $3.72, and RSUs with the same terms as aforementioned in March 2022 in connection with her appointment as Chief Accounting Officer and Senior Vice President, Finance.

In April 2021, we granted performance-based stock options to each of our NEOs (the Performance Options). The Compensation Committee approved this additional grant to reinforce the sense of urgency of our COVAXIN program timeline and deliverables. The Performance Options have a ten-year term and a per share exercise price of $5.64 for our CEO and $11.21 for our other NEO, Ms. Crespo, which in each case represents the closing price of our common stock on the applicable grant date. These stock options are eligible to vest upon the achievement of five milestones determined by the Compensation Committee. If a performance milestone is achieved, half of the stock options earned as a result of that achievement will vest immediately and the other half will remain eligible to vest on the first anniversary of the achievement date, subject to the NEO’s continued employment with the Company through such date.

 

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The Performance Options are weighted equally among the five milestones, with 20% of the total Performance Options allocated to each milestone. The milestones, the applicable performance periods relevant for each milestone, and the status of each milestone are set forth below:

The first two milestones were achieved in 2021. As a result, 20% of the Performance Options vested in 2021 and 20% vested in 2022 subject to the aforementioned employment condition. We did not meet the remaining three milestones, as shown in the table above, and the corresponding 60% of the Performance Options were forfeited.

In December 2022, the Compensation Committee approved a new LTI mix beginning in 2023, which changed from 25% time-based RSUs and 75% time-based stock options to 50% time-based RSUs and 50% time-based stock options.

ADDITIONAL POLICIES & BENEFITS

Restrictions on Hedging or Pledging. Our insider trading policy applies to all our employees, including our NEOs, and the Board. The policy, among other things, prohibits trading in call or put options involving our securities and other derivative securities, engaging in short sales of our securities, holding our securities in a margin account or pledging our securities to secure margin or other loans, and engaging in any forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts.

Clawback Policy. In December 2021, the Board adopted a clawback policy, pursuant to which the Compensation Committee will recover (including by means of recoupment and/or forfeiture of unvested amounts) covered compensation from a current or former executive officer, to the extent that the recipient received any amount in excess of the amount that the recipient should otherwise have received under the terms of the award or payment as a result of an accounting restatement, unless it is impracticable or impermissible to do so. The clawback period extends to the three years immediately preceding the year in which such restatement is required. Compensation covered by this policy includes any compensation that is earned, granted, or vested, based wholly or in part upon the attainment of any financial reporting measure. We will revise our policy to comply with the policy requirements of the Securities Exchange Act Rule 10D-1 once the rule is finalized by NASDAQ.

 

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Stock Ownership Guidelines. To further align the interests of our officers and directors and our shareholders, the Board adopted stock ownership guidelines in March 2022. These guidelines are applicable to our executive officers, other managers at the level of vice president and above, and our non-executive directors (collectively, the Covered Persons). The guidelines require each Covered Person to own shares of our common stock having an aggregate fair market value equal to or greater than the following multiple of their base salary or base cash retainer:

For purposes of these guidelines, the following shares will be considered “owned”:

•

Shares held outright or beneficially owned by the Covered Person, his or her spouse and minor children, or trusts for the benefit of these individuals;

​

•

All shares underlying time-based restricted stock or RSU awards, whether or not vested; and

​

•

Shares underlying vested performance-based restricted stock or RSU awards.

​

Unvested stock options and vested stock options not yet exercised do not count towards meeting the ownership thresholds. Covered Persons have five years after first becoming subject to the guidelines to attain the specified level of equity ownership. Any individual whose ownership threshold increases as a result of a promotion will have three years to attain the increased level of equity ownership.

Following the five-year phase-in period, Covered Persons who do not meet the required ownership threshold will be generally prohibited from selling stock acquired through equity awards (other than shares sold or withheld to satisfy the exercise price or taxes applicable to the award) until the required ownership threshold has been met. In addition, our Compensation Committee may take other steps to enforce these guidelines as it deems appropriate.

Other Benefits. We provide certain additional benefits to executive officers that are also generally available to our other employees, including health and welfare benefits. We also maintain a tax-qualified savings plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (the Code). Employees who participate in the plan may make elective deferrals to the plan, subject to the limitations imposed by the Code. We currently match 100% of employee deferrals under the 401(k) plan, up to a limit of 3% of the employee’s eligible compensation, plus 50% of employee deferrals between 4-5% of the employee’s eligible compensation. The match begins six months after commencement of employment.

Indemnification Agreements. Our Charter and Bylaws require us to indemnify our directors and officers to the fullest extent permitted by Delaware law. We have also entered into indemnity agreements with certain officers and directors. These agreements provide, among other things, that we will indemnify the officer or director, under the circumstances and to the extent provided for in the agreement, for expenses, damages, judgments, fines, and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason of his or her position as our director, officer, or agent to the fullest extent permitted under Delaware law and our Bylaws and Charter.

EMPLOYEE AGREEMENTS

We generally enter into executive employment agreements with each of our executive officers, including our NEOs, which sets forth the basic terms and conditions of their employment. The executive employment agreements also contain provisions that provide for certain payments and benefits in the event of a termination of employment, including an involuntary termination of employment within three months prior to or 12 months following a change in control as described below under the heading “Potential Payments Upon Termination or

 

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Change in Control”. Our philosophy in providing these severance payments and benefits is that outside of a change in control, severance protections are only appropriate in the event of an involuntary termination and only provided upon the executive officer’s execution of an effective release of claims.

In addition, we believe that the occurrence or potential occurrence of a change in control will create uncertainty regarding the continued employment of our executive officers, and that additional severance protections during a change in control protection period are appropriate to encourage executive officers to remain employed and focused on the business in those circumstances, rather than to encourage executive officers to focus on the potential implications of a termination of employment for them personally. The severance benefits are an essential element of the overall executive compensation package and assist us in recruiting and retaining talented individuals and aligning the NEO’s interests with the best interests of the shareholders. Each NEO is also subject to a Non-Competition Agreement and a Non-Disclosure and Business Ideas Agreement.

Shankar Musunuri, Ph.D., MBA. On January 1, 2020, we entered into an amended and restated executive employment agreement with Dr. Musunuri, with respect to his employment as CEO and Chairman of our Board, which was further amended on April 27, 2022 (as amended, the Musunuri Agreement).

The Musunuri Agreement provides for an annual base salary in an amount determined by the Compensation Committee, which is to be reviewed and may be adjusted annually. Dr. Musunuri’s annual base salary was increased from $541,300 to $715,000 for the 2022 fiscal year and further increased to $757,900 for the 2023 fiscal year. Dr. Musunuri is eligible to participate in our benefit plans, programs, and arrangements that may exist from time to time on the same terms that apply generally to other similarly situated employees. The Musunuri Agreement initially provided for an annual bonus target amount of 50% of his base salary, which was then increased to 66% of his base salary for the 2022 fiscal year, and remains at 66% for the 2023 fiscal year, with such bonus based upon performance criteria set by the Compensation Committee.

In the event that Dr. Musunuri’s employment is terminated by us without “cause” ​(as defined in the Musunuri Agreement) or by Dr. Musunuri for “good reason” ​(as defined in the Musunuri Agreement), subject to Dr. Musunuri’s execution and non-revocation of a release of claims in favor of Ocugen and its affiliates, Dr. Musunuri is eligible to receive (i) base salary continuation for two years following his termination date, and (ii) if he elects COBRA continuation coverage, payment of his COBRA premiums for applicable health or dental insurance coverage until the earliest of two years following his termination date, the expiration of his COBRA eligibility, or the date that he becomes eligible for health insurance coverage under another employer’s or spouse’s employer health plan. In addition, in the event that Dr. Musunuri’s employment is terminated by us without cause or by Dr. Musunuri for good reason within three months prior to or 12 months after a “change of control” ​(as defined in the Musunuri Agreement), subject to Dr. Musunuri’s execution and non-revocation of a release or claims in favor of Ocugen and its affiliates, Dr. Musunuri is also eligible to receive (i) an additional payment equal to 200% of his then-current target annual bonus, payable in lump sum and (ii) full acceleration of all unvested restricted stock, stock options, and other equity incentive awards held by Dr. Musunuri.

Jessica Crespo, CPA. Effective March 18, 2022, we entered into an executive employment agreement with Ms. Crespo with respect to her employment as Chief Accounting Officer and Senior Vice President, Finance (the Crespo Agreement). Ms. Crespo resigned from this role effective March 10, 2023.

For the 2022 fiscal year, Ms. Crespo’s initial annual base salary was $300,000 and she was eligible to receive a target annual bonus of 30% of her base salary. In connection with Ms. Crespo’s promotion to Chief Accounting Officer and Senior Vice President, Finance, her annual base salary was increased to $375,000 pursuant to the Crespo Agreement. Ms. Crespo was eligible to participate in our benefit plans, programs, and arrangements that may have existed from time to time on the same terms that applied generally to other similarly situated employees. The Crespo Agreement provided for an annual bonus target amount of 40% of her base salary, with such bonus based upon performance criteria set by the Compensation Committee and the CEO.

In the event that Ms. Crespo’s employment was terminated by us without “cause” ​(as defined in the Crespo Agreement) or by Ms. Crespo for “good reason” ​(as defined in the Crespo Agreement), subject to Ms. Crespo’s execution and non-revocation of a release of claims in favor of Ocugen and its affiliates, Ms. Crespo would have been eligible to receive (i) base salary continuation for 12 months following her termination date, and (ii) if she elected COBRA continuation coverage, payment of her COBRA premiums for applicable health or dental insurance coverage until the earliest of 12 months following her termination date or the date that she becomes

 

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eligible for health insurance coverage under another employer’s or spouse’s employer health plan. In addition, in the event that Ms. Crespo’s employment was terminated by us without cause or by Ms. Crespo for good reason within three months prior to or 12 months after a “change of control” ​(as defined in the Crespo Agreement), subject to Ms. Crespo’s execution and non-revocation of a release or claims in favor of Ocugen and its affiliates, Ms. Crespo was also eligible to receive (i) an additional payment equal to 75% of her then-current target annual bonus, payable in lump sum and (ii) full acceleration of all unvested restricted stock, stock options, and other equity incentive awards held by Ms. Crespo.

Sanjay Subramanian, MBA. Effective as of September 10, 2019, we entered into an employment agreement with Mr. Subramanian, as amended on January 1, 2020 (the “Subramanian Agreement”) with respect to his employment as CFO, Head of Corporate Development, and Corporate Secretary. Mr. Subramanian resigned from his role as our CFO, Head of Corporate Development, and Corporate Secretary, effective March 18, 2022.

The Subramanian Agreement provided for an annual base salary of $475,000 for the 2022 fiscal year. Mr. Subramanian was eligible to participate in our benefit plans, programs, and arrangements that may have existed from time to time on the same terms that applied generally to other similarly situated employees. The Subramanian Agreement provided for an annual bonus target amount of 50% of his base salary, set by the Compensation Committee effective 2022.

In the event that Mr. Subramanian’s employment was terminated by us without “cause” ​(as defined in the Subramanian Agreement) or by Mr. Subramanian for “good reason” ​(as defined in the Subramanian Agreement), subject to Mr. Subramanian’s execution and non-revocation of a release of claims in favor of Ocugen and its affiliates, Mr. Subramanian would have been eligible to receive (i) base salary continuation for 12 months following his termination date, (ii) if he elected COBRA continuation coverage, payment of his COBRA premiums for applicable health or dental insurance coverage until the earliest of 12 months following his termination date or the date that he becomes eligible for health insurance coverage under another employer’s or spouse’s employer health plan, and (iii) payment of any annual bonus earned but unpaid for the previous calendar year. In addition, in the event that Mr. Subramanian’s employment was terminated by us without cause or by Mr. Subramanian for good reason within three months prior to or 12 months after a “change of control” ​(as defined in the Subramanian Agreement), subject to Mr. Subramanian’s execution and non-revocation of a release or claims in favor of Ocugen and its affiliates, Mr. Subramanian was also eligible to receive (i) an additional payment equal to 100% of his then-current target annual bonus, payable in lump sum and (ii) full acceleration of all unvested restricted stock, stock options, and other equity incentive awards held by Mr. Subramanian.

COMPENSATION RISK ASSESSMENT

The Compensation Committee considers and evaluates risks related to our cash and equity-based compensation programs and practices, as well as evaluates whether our compensation plans encourage participants to take excessive risks that are reasonably likely to have a material adverse effect on us. Consistent with SEC disclosure requirements, the Compensation Committee has worked with management to assess compensation policies and practices for our employees and has concluded that such policies and practices do not create risks that are reasonably likely to have a material adverse effect on us.

 

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COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the CD&A required by Item 402(b) of Regulation S-K, which appears in this Proxy Statement, with our management. Based on this review and discussion, the Compensation Committee recommended to our Board that the CD&A be included in this Proxy Statement and our 2022 Annual Report.

Ocugen, Inc.
Compensation Committee
Prabhavathi Fernandes, Ph.D., FIDSA, Chair
Kirsten Castillo, MBA
Marna C. Whittington, Ph.D.

 

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2022 EXECUTIVE COMPENSATION TABLES

2022 SUMMARY COMPENSATION TABLE

The following table shows the compensation awarded to, paid to, or earned by our NEOs for the years ended December 31, 2022 and 2021. For 2022, our NEOs consisted of our CEO, our Former Chief Accounting Officer and Senior Vice President, Finance, and our Former CFO, who served as an executive officer for a portion of 2022. These individuals were the only three executive officers serving in 2022.

(1)Amounts reflected in this column represent cash bonuses based on annual performance earned in the applicable year and paid in the following year.

(2)Amounts reflected in this column represent the aggregate grant date fair value of RSUs granted during the applicable fiscal year, determined by the market price of our common stock on the grant date in accordance with ASC 718. For a discussion of the assumptions we employ in determining the grant date fair value of RSUs, please see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Annual Report.

(3)Except as otherwise noted below, amounts reflected in this column represent the aggregate grant date fair value of stock option awards granted during the applicable fiscal year, computed in accordance with ASC 718. For a discussion of the assumptions we employ in determining the grant date fair value of stock option awards, please see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Annual Report.

(4)Except as otherwise indicated, amounts reflected in this column are matching contributions made under our 401(k) retirement plan for the respective fiscal year.

(5)Ms. Crespo was not a NEO in 2021 and accordingly, compensation information is disclosed for 2022 only. Effective January 1, 2022, Ms. Crespo’s salary was $300,000 and was increased to $375,000 upon her appointment as Chief Accounting Officer and Senior Vice President, Finance in March 2022. Ms. Crespo resigned from her position on March 10, 2023.

(6)Mr. Subramanian resigned from his position on March 18, 2022. Subsequent to his resignation, Mr. Subramanian provided us with six months of transitional consulting services. In return for providing the consulting services, the Compensation Committee approved the continued vesting of all outstanding equity awards of the Company held by Mr. Subramanian for an additional three months. The amount reported in the “Option Awards” column includes $1,663,354, equal to the fair value resulting from such modifications to Mr. Subramanian’s stock option awards described in this footnote, computed in accordance with ASC 718.

(7)These amounts include (i) $12,200 of matching contributions made under our 401(k) retirement plan, (ii) payments of $18,207 with respect to accrued paid time off, and (iii) $51,953 of consulting fees paid in return for consulting services provided by Mr. Subramanian subsequent to his resignation.

 

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GRANTS OF PLAN-BASED AWARDS

The following table presents estimated future payouts under equity incentive plan awards granted to each of our NEOs during 2022.

(1)The exercise price of each stock option is the closing price as reported on Nasdaq on the grant date.

(2)Amounts reported in this column reflect the aggregate grant date fair values as calculated in accordance with ASC 718 and as shown in the Summary Compensation Table under the columns “Stock Awards” and “Stock Option Awards.” These amounts do not represent the actual amounts paid or realized by the NEO during 2022. The assumptions used in valuing equity awards are described in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Annual Report.

(3)The number of shares and grant date fair value reported does not reflect the grant of new awards but represents the fair value resulting from the modification of Mr. Subramanian’s stock option awards described in footnote 6 to the Summary Compensation Table above, which is calculated by multiplying the fair value of the stock option as of the modification date by the outstanding stock options. The exercise price of such stock options was not modified and ranged from $0.34 to $5.64.

 

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

The following table summarizes the number of shares of our common stock underlying outstanding equity awards for each of our NEOs as of December 31, 2022.

(1)Mr. Subramanian, our former CFO, Head of Corporate Development, and Corporate Secretary, is not included in the table above as he was terminated on March 18, 2022 and did not have any outstanding equity awards as of December 31, 2022. See “Resignation of Mr. Subramanian” below for further details.

(2)Each stock option award and stock award were granted pursuant to the Ocugen, Inc. 2014 Stock Option Plan (the 2014 Plan) or the Ocugen, Inc. 2019 Equity Incentive Plan (the 2019 Plan). The shares subject to each outstanding unvested stock option and stock award vest in three equal installments, subject to continued service, on the first three anniversaries of the applicable vesting commencement date.

(3)Amounts reported in this column represent the aggregate market value of the outstanding RSUs based on the closing market price of our common stock as of December 30, 2022, the last trading day of the fiscal year, of $1.30 per share.

 

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OPTIONS EXERCISED AND STOCK VESTED

The following table sets forth information regarding the stock option exercises that took place during the year ended December 31, 2022, with respect to each of our NEOs.

(1)No stock options were exercised by Ms. Crespo in 2022.

(2)Amounts reported in this column reflect the difference between the market price of the underlying shares of stock on the date of exercise and the exercise price of the stock options.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

For each NEO, the following table sets forth quantitative estimates of the payments and benefits that would have become payable in the following scenarios: (i) if the NEO’s employment had been terminated without cause or he/she resigned for good reason on December 31, 2022, and no change in control had occurred within three months prior to or 12 months following the termination (Involuntary Termination), (ii) if a change in control had occurred on December 31, 2022 (irrespective of employment status following the change in control) (Change in Control), and (iii) if the NEO’s employment had been terminated without cause or he/she resigned for good reason on December 31, 2022, and a change in control had occurred within three months prior to or 12 months following the termination (CIC Involuntary Termination).

(1)Mr. Subramanian is not included in the table above as he was terminated on March 18, 2022. See “Resignation of Mr. Subramanian” below for further details.

(2)The amounts reported in this column represent the continuation of base salary payments following the termination of employment paid in installments over a 24-month period for Dr. Musunuri and a 12-month period for Ms. Crespo.

(3)These amounts represent lump sum payments equal to 200% of the target bonus for Dr. Musunuri and 75% of the target bonus for Ms. Crespo based on base compensations effective for the 2022 fiscal year.

(4)The amounts reported in this column reflect the fair market value of RSUs and intrinsic value of unvested stock options as of December 31, 2022, in each case based on the closing market price of our common

 

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stock on Nasdaq on December 30, 2022, the last trading day of the fiscal year, which was $1.30 per share. For stock options, the intrinsic value represents the difference between such closing market price and the exercise price applicable to such stock option. The accelerated vesting occurs upon a Change in Control, so we have shown the same value for a Change in Control without an accompanying termination and a CIC Involuntary Termination.

(5)These amounts reported in this column represent the estimated value of continued group health and dental insurance for 18 months for Dr. Musunuri and 12 months for Ms. Crespo.

Resignation of Mr. Subramanian. As noted above, Mr. Subramanian resigned from employment on March 18, 2022. His resignation was without “good reason” under the Subramanian Agreement, and therefore he was not entitled to any severance benefits in connection with such resignation. At our request, Mr. Subramanian provided us with six months of transitional consulting services, for which we paid Mr. Subramanian $51,953 (which amount represents a pro-rata portion of his 2022 target annual cash incentive, with such pro-ration based on the portion of 2022 completed as of the date of his resignation). In addition, the Compensation Committee approved the continued vesting of all outstanding equity awards held by Mr. Subramanian through June 18, 2022.

PAY VERSUS PERFORMANCE

As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing information about the relationship between executive compensation actually paid to our PEO, who is our CEO, and the other NEOs (as calculated in accordance with Item 402(v) of Regulation S-K) and certain financial performance measures. For additional information on our compensation programs and philosophy and how we design our compensation programs to align pay with performance, see the section titled “Compensation Discussion and Analysis” on page 30.

For fiscal year 2022, the “compensation actually paid to the PEO” and the “average compensation actually paid to the non-PEO NEOs” reflect each of the following adjustments made to the total compensation amounts reported in the Summary Compensation Table for fiscal year 2022 and 2021, computed in accordance with Item 402(v) of Regulation S-K.

 

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