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.           )

 

Filed by the Registrant 

 

Filed by a Party other than the Registrant 

 

 

Check the appropriate box:

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material under §240.14a-12

Iterum Therapeutics plc

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

No fee required.

 

 

Fee paid previously with preliminary materials.

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 

 

 


 


 

 

 

 

 

April 25, 2022

Dear Iterum Therapeutics plc Shareholder,

You are cordially invited to the 2022 Annual General Meeting of Shareholders to be held at 25-28 North Wall Quay, Dublin 1, Ireland on June 15, 2022 at 3.00 p.m., Irish time (10.00 a.m., Eastern Time). The enclosed notice of Annual General Meeting of Shareholders sets forth the proposals that will be presented at the meeting, which are described in more detail in the proxy statement.  

At this year’s Annual General Meeting, we will ask shareholders to:

 

1.

elect, by separate resolutions, the two nominees for Class I directors named herein, each to serve for a three-year term expiring at the 2025 annual general meeting of shareholders;

 

2.

ratify, in a non-binding vote, the appointment of KPMG as our independent registered public accounting firm for our fiscal year ending December 31, 2022, and to authorize the board of directors, acting through the audit committee, to set the independent registered public accounting firm’s remuneration;

 

3.

approve, subject to and conditional upon the board of directors determining, in its sole discretion, that a reverse share split is necessary for the Company to comply with the minimum $1.00 per share requirement pursuant to Nasdaq Listing Rule 5550(a)(2), a reverse share split (i.e., a consolidation of share capital under Irish law), or the Reverse Share Split, whereby every 15 ordinary shares of $0.01 (nominal value) each in the authorized and unissued and authorized and issued share capital of the Company be consolidated into 1 ordinary share of $0.15 (nominal value) each, and the subsequent (i) reduction in the nominal value of the ordinary shares in the authorized and unissued and authorized and issued share capital of the Company from $0.15 each to $0.01 each and (ii) increase in the authorized ordinary share capital of the Company in order to round up the authorized share capital to an even number following the Reverse Share Split, with our board of directors able to elect to abandon such proposed amendments and not effect the Reverse Share Split authorized by shareholders, in its sole discretion;

 

4.

approve a share option exchange program whereby certain share options granted to eligible employees are exchanged on a one-for-one basis for new share options granted with an exercise price equal to the fair market value of our ordinary shares on the date of grant;

 

5.

receive and consider the Company's Irish Statutory Financial Statements for the fiscal year ended December 31, 2021 and the reports of the directors and auditors thereon, and review the affairs of the Company; and

 

6.

consider any other business properly brought before the 2022 Annual General Meeting of Shareholders or any adjournment or postponement thereof.

Our board of directors unanimously recommends a vote “FOR” Proposal Nos. 1 to 4 as set forth in the proxy statement.

We hope that you will participate in the meeting by voting through acceptable means as described in this proxy statement as promptly as possible. Your vote is important – so please exercise your right.

 

Sincerely,

 

 

/s/ Corey N. Fishman

 

Corey N. Fishman

President and Chief Executive Officer

 

 


 

 

 

 

This proxy statement, the enclosed proxy card, our 2021 annual report to shareholders and our Irish Statutory Financial Statements for the fiscal year ended December 31, 2021 are being made available to shareholders on or about April 25, 2022.

 


 

 

ITERUM THERAPEUTICS PLC

Fitzwilliam Court, 1st Floor

Leeson Close

Dublin 2

Ireland

NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS

 

to be held on June 15, 2022

 

The 2022 Annual General Meeting of Shareholders (the “AGM”) of Iterum Therapeutics plc, an Irish public limited company (the “Company”), will be held on June 15, 2022, beginning at 3.00 p.m., Irish time (10.00 a.m., Eastern Time), at 25-28 North Wall Quay, Dublin 1, Ireland to consider and act upon the following matters:

 

1.

To elect, by separate resolutions, the two nominees for Class I directors named herein, each to serve for a three-year term expiring at the 2025 annual general meeting of shareholders (Proposal No. 1).

 

2.

To ratify, in a non-binding vote, the appointment of KPMG as our independent registered public accounting firm for our fiscal year ending December 31, 2022, and to authorize the board of directors, acting through the audit committee, to set the independent registered public accounting firm’s remuneration (Proposal No. 2).

 

3.

To approve, subject to and conditional upon the board of directors determining, in its sole discretion, that a reverse share split is necessary for the Company to comply with the minimum $1.00 per share requirement pursuant to Nasdaq Listing Rule 5550(a)(2), a reverse share split (i.e., a consolidation of share capital under Irish law), or the Reverse Share Split, whereby every 15 ordinary shares of $0.01 (nominal value) each in the authorized and unissued and authorized and issued share capital of the Company be consolidated into 1 ordinary share of $0.15 (nominal value) each, and the subsequent (i) reduction in the nominal value of the ordinary shares in the authorized and unissued and authorized and issued share capital of the Company from $0.15 each to $0.01 each and (ii) increase in the authorized ordinary share capital of the Company in order to round up the authorized share capital to an even number following the Reverse Share Split, with our board of directors able to elect to abandon such proposed amendments and not effect the Reverse Share Split authorized by shareholders, in its sole discretion (Proposal No. 3).

 

4.

To approve a share option exchange program whereby certain share options granted to eligible employees are exchanged on a one-for-one basis for new share options granted with an exercise price equal to the fair market value of our ordinary shares on the date of grant (Proposal No. 4).

 

5.

To receive and consider the Company's Irish Statutory Financial Statements for the fiscal year ended December 31, 2021 and the reports of the directors and auditors thereon, and to review the affairs of the Company.

 

6.

To conduct any other business properly brought before the AGM or any adjournment or postponement thereof.

Proposal Nos. 1, 2, 3 and 4 above are ordinary resolutions requiring a simple majority of the votes cast at the meeting to be approved. All proposals are more fully described in this proxy statement.  There is no requirement under Irish law that the Company's Irish Statutory Financial Statements for the fiscal year ended December 31, 2021, or the directors' and auditor's reports thereon be approved by the shareholders, and no such approval will be sought at the AGM.

Shareholders of record at the close of business on April 19, 2022 will be entitled to notice of and to vote at the AGM or any adjournment or postponement thereof. Instead of mailing a printed copy of our proxy materials to all of our shareholders, we provide access to these materials to many of our shareholders via the Internet, in accordance with rules adopted by the Securities and Exchange Commission. If you received only a Notice of Internet Availability of Proxy Materials, or Notice, by mail or e-mail, you will not receive a paper copy of the proxy materials unless you request one. Instead, the Notice will provide you with instructions on how to access and view the proxy materials on the Internet. The Notice will also instruct you as to how you may access your proxy card to vote online or by telephone. If you received a Notice by mail or e-mail and would like to receive a paper copy of our proxy materials, free of charge, please follow the instructions included in the Notice. The Notice of Internet Availability of Proxy Materials is being mailed to our

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shareholders on or about April 25, 2022 and sent by e-mail to our shareholders who have opted for such means of delivery on or about April 25, 2022.

Special Precautions Due to COVID-19 Concerns

 

The well-being of all attendees and participants at the AGM is a primary concern for the Company, and in this context, we will continue to monitor developments in relation to the COVID-19 pandemic. While all shareholders are invited to attend the AGM, the AGM will proceed subject to the guidance provided by the Irish Government and the Department of Health (of Ireland) or any other governmental agency in place at the time of the meeting and such other measures as our board of directors considers appropriate to address health and safety concerns. As a result, there may be restrictions on travel and/or gatherings that affect or prohibit travel to and in-person attendance at the AGM. Due to the ongoing risks posed by the COVID-19 pandemic, the members of our board of directors and senior management may not be physically present at our AGM in Ireland and may instead participate remotely. Furthermore, to promote the health and safety of attendees, we may impose additional procedures or limitations on meeting attendance based on applicable governmental requirements or recommendations or facility requirements. Such additional procedures or limitations may include, but are not limited to, limits on the number of attendees to promote social distancing and requiring the use of face masks.

 

Shareholders are also encouraged to keep up-to-date with, and follow, any guidance from the Government of Ireland and the

Department of Health (of Ireland) (as appropriate) as circumstances may change on short notice. Should we determine that alternative

arrangements may be advisable or required due to public health recommendations regarding COVID-19, such as changing the date, time, location or format of the meeting, we will announce our decision by press release and/or filing with the Securities and Exchange

Commission and also post additional information on the Investor Relations section of our website (https://ir.iterumtx.com/).

 

For these reasons, we encourage all shareholders to vote their shares by proxy in advance of the AGM to ensure you can vote and be represented at the AGM if attending in person is not feasible or not recommended. This can be done in advance of the AGM by using one of the voting options detailed in the accompanying proxy statement.

 

 

By order of the Board of Directors,

 

/s/ Louise Barrett

 

 

 

Louise Barrett

Secretary

 

Dublin, Ireland

April 25, 2022

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YOU MAY OBTAIN ADMISSION TO THE AGM BY IDENTIFYING YOURSELF AT THE AGM AS A SHAREHOLDER AS OF THE RECORD DATE. IF YOU ARE A RECORD OWNER, POSSESSION OF A COPY OF A PROXY CARD WILL BE ADEQUATE IDENTIFICATION. IF YOU ARE A BENEFICIAL (BUT NOT RECORD) OWNER, A COPY OF AN ACCOUNT STATEMENT FROM YOUR BANK, BROKER OR OTHER NOMINEE SHOWING SHARES HELD FOR YOUR BENEFIT ON APRIL 19, 2022 WILL BE ADEQUATE IDENTIFICATION.

WHETHER OR NOT YOU EXPECT TO ATTEND THE AGM, PLEASE SUBMIT YOUR VOTING INSTRUCTIONS VIA THE INTERNET OR BY TELEPHONE BY FOLLOWING THE INSTRUCTIONS SET FORTH ON THE ENCLOSED PROXY CARD OR, IF YOU RECEIVED A PRINTED COPY OF THE PROXY MATERIALS, BY COMPLETING, DATING AND SIGNING THE ENCLOSED PROXY CARD AND MAILING IT PROMPTLY IN THE PROVIDED ENVELOPE. TO HELP ENSURE REPRESENTATION OF YOUR SHARES AT THE AGM, NO POSTAGE NEED BE AFFIXED IF THE PROXY CARD IS MAILED IN THE UNITED STATES.

A SHAREHOLDER ENTITLED TO ATTEND AND VOTE AT THE AGM IS ENTITLED, USING THE PROXY CARD PROVIDED (OR IN THE FORM IN SECTION 184 OF THE IRISH COMPANIES ACT 2014), TO APPOINT ONE OR MORE PROXIES TO ATTEND, SPEAK AND VOTE INSTEAD OF HIM OR HER AT THE AGM. A PROXY NEED NOT BE A SHAREHOLDER OF RECORD.

 

 

 

 

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TABLE OF CONTENTS

 

 

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ITERUM THERAPEUTICS PLC

Fitzwilliam Court, 1st Floor

Leeson Close

Dublin 2

Ireland

PROXY STATEMENT FOR THE ANNUAL GENERAL MEETING OF SHAREHOLDERS

to be held on June 15, 2022 AT 25-28 North Wall Quay, Dublin 1, Ireland

Important Notice Regarding the Availability of Proxy Materials

for the Annual General Meeting of Shareholders

to be held on June 15, 2022

This proxy statement, our 2021 annual report to shareholders

and our Irish Statutory Financial Statements for the year ended December 31, 2021 are available at

www.proxyvote.com

for viewing, downloading and printing.

A copy of our Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the Securities and Exchange Commission, or SEC, except for exhibits, and our Irish Statutory Financial Statements for the year ended December 31, 2021 will be furnished without charge to any shareholder upon written or oral request to the Company at Fitzwilliam Court, 1st Floor, Leeson Close, Dublin 2, Ireland, Attention: Secretary, Telephone: +353 1 9038354.

Instead of mailing a printed copy of our proxy materials to all of our shareholders, we provide access to these materials via the Internet. This reduces the amount of paper necessary to produce these materials as well as the costs associated with mailing these materials to all shareholders. Accordingly, on or about April 25, 2022, we will mail a Notice of Internet Availability of Proxy Materials, or Notice, to our shareholders (other than those who previously requested electronic or paper delivery of proxy materials), directing shareholders to a website where they can access our proxy materials, including this proxy statement, our 2021 annual report to shareholders and our Irish Statutory Financial Statements for the year ended December 31, 2021, and view instructions on how to vote via the Internet or by telephone. If you would prefer to receive a paper copy of our proxy materials, please follow the instructions included in the Notice.

information ABOUT THE annual general meeting and voting

This proxy statement is furnished in connection with the solicitation of proxies by the board of directors (the "board of directors" or the "board") of Iterum Therapeutics plc (the "Company," "Iterum," "we" or "us") for use at the 2022 Annual General Meeting of Shareholders (the "AGM") to be held on June 15, 2022, beginning at 3.00 p.m., Irish time (10.00 a.m., Eastern Time), at 25-28 North Wall Quay, Dublin 1, Ireland and at any adjournment or postponement thereof. On April 19, 2022, the record date for the determination of shareholders entitled to vote at the AGM, there were issued, outstanding and entitled to vote an aggregate of 183,353,418 of our ordinary shares, nominal value $0.01 per share ("ordinary shares"). Each ordinary share entitles the record holder thereof to one vote on each of the matters to be voted on at the AGM.

We have engaged Innisfree M&A Incorporated, or Innisfree, to assist with the solicitation of proxies. Please contact Innisfree with any queries:  

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, New York 10022

Shareholders May Call:

Toll-Free at (877) 800-5158 (from the U.S. and Canada)

or +1 (412) 232-3651 (from other locations)

Banks & Brokers May Call Collect: (212) 750-5833

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Your vote is important no matter how many shares you own.    Please take the time to vote. Take a moment to read the instructions below. Choose the way to vote that is easiest and most convenient for you and cast your vote as soon as possible.

If you are the "record holder" of your shares, meaning that you own your shares in your own name and not through a bank, broker or other nominee, you may vote in one of four ways:

 

(1)

You may vote online.    You may vote your shares by following the "Online" instructions on the enclosed proxy card. If you vote online, you do not need to vote by telephone or complete and mail your proxy card. The internet voting facilities for eligible shareholders of record will close at 4.59 a.m., Irish time on June 15, 2022 (11:59 pm, Eastern Time on June 14, 2022).

 

(2)

You may vote by telephone.    You may vote your shares by following the "Phone" instructions on the enclosed proxy card. If you vote by telephone, you do not need to vote online or complete and mail your proxy card. If you vote by telephone, your use of that telephone system, and specifically the entry of your pin number/other unique identifier, will be deemed to constitute your appointment, in writing and under hand, and for all purposes of the Irish Companies Act 2014, of each of David G. Kelly and Louise Barrett as your proxy to vote your shares on your behalf in accordance with your telephone instructions. The telephone voting facilities for eligible shareholders of record will close at 4.59 a.m., Irish time on June 15, 2022 (11:59 pm, Eastern Time on June 14, 2022).

 

(3)

You may vote by mail.    You can vote by completing, dating and signing the proxy card provided to you and promptly mailing it in the provided postage-paid envelope. If you vote by mail, you do not need to vote online or by telephone. We must receive the completed proxy card by 5:00 p.m., Irish time (12:00 p.m., Eastern Time), on June 14, 2022.

 

(4)

You may vote in person.    If you attend the AGM, you may vote by delivering your completed proxy card in person or you may vote by completing a ballot at the AGM. Ballots will be available at the AGM. You may obtain directions to the location of the AGM by requesting them in writing or by telephone as follows: c/o Secretary, Iterum Therapeutics plc, Fitzwilliam Court, 1st Floor, Leeson Close, Dublin 2, Ireland, Phone: +353 1 9038354.

All proxies that are executed and delivered by mail or in person or are otherwise submitted online or by telephone will be voted on the matters set forth in the accompanying Notice of Annual General Meeting of Shareholders in accordance with the shareholders' instructions. However, if no choice is specified on a proxy as to one or more of the proposals, the proxy will be voted in accordance with the board of directors' recommendations on such proposals as set forth in this proxy statement. All proxies will be forwarded to the Company's registered office electronically.

After you have submitted a proxy, you may still change your vote and revoke your proxy prior to the AGM by doing any one of the following things:

 

submitting a new proxy by following the "Online" or " Phone" instructions on the enclosed proxy card at a date later than your previous vote but prior to the voting deadline (which is 4:59 a.m., Irish time, the day of the AGM (11:59 p.m., Eastern Time on June 14, 2022));

 

signing another proxy card and either arranging for delivery of that proxy card by mail to the registered office of the Company prior to the start of the AGM, or by delivering that signed proxy card in person at the AGM;

 

giving our Secretary a written notice before or at the AGM that you want to revoke your proxy; or

 

voting in person at the AGM.

Your attendance at the AGM alone will not revoke your proxy.

If the shares you own are held in "street name" by a bank, broker or other nominee record holder, which we collectively refer to in this proxy statement as "brokerage firms," your brokerage firm, as the record holder of your shares, is required to vote your shares according to your instructions. To vote your shares, you will need to follow the directions your brokerage firm provides you. Many brokerage firms also offer the option of voting online or by

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telephone, instructions for which, if available, would be provided by your brokerage firm on the voting instruction form that it delivers to you. Because most brokerage firms are member organizations of the New York Stock Exchange, or NYSE, the rules of the NYSE will likely govern how your brokerage firm would be permitted to vote your shares in the absence of instruction from you.   Under the current rules of the NYSE, if you do not give instructions to your brokerage firm, it will still be able to vote your shares with respect to certain "discretionary" items but will not be allowed to vote your shares with respect to certain “non-discretionary” items.   The ratification of the appointment of KPMG as our independent registered public accounting firm and the authorization of the board of directors, acting through the audit committee, to set the independent registered public accounting firm’s remuneration (Proposal No. 2) is a discretionary item under the NYSE rules and your brokerage firm will be able to vote on that item even if it does not receive instruction from you, so long as it holds your shares in its name.  The remaining Proposals (Proposal No. 1, Proposal No. 3 and Proposal No. 4) are “non-discretionary” items, meaning that if you do not instruct your brokerage firm on how to vote with respect to these Proposals, your brokerage firm will not vote with respect to that proposal and your shares will be counted as “broker non-votes”. “Broker non-votes” are shares that are held in “street name” by a brokerage firm that indicates in its proxy that it does not have or did not exercise discretionary authority to vote on a particular matter.   

If your shares are held in street name, you must bring an account statement from your brokerage firm showing that you are the beneficial owner of the shares as of the record date (April 19, 2022) to be admitted to the AGM. To be able to vote your shares held in street name at the AGM, you will need to obtain a proxy card from the holder of record.

Votes Required

One or more Members (as defined in the Company’s Constitution) whose name is entered in the register of members of the Company as a registered holder of the Company's ordinary shares, present in person or by proxy (whether or not such Member actually exercises his voting rights in whole, in part or at all) holding not less than a majority of the issued and outstanding ordinary shares of the Company entitled to vote at the AGM, will constitute a quorum for the transaction of business at the AGM. Ordinary shares represented in person or by proxy (including “broker non-votes” (as described above) and shares which abstain or do not vote with respect to one or more of the matters presented for shareholder approval) will be counted for the purposes of determining whether a quorum is present at the AGM.  The following votes are required for approval of the proposals being presented at the AGM:

Proposal No. 1: To elect the Class I directors.    The affirmative vote of the holders of ordinary shares representing a majority of the votes cast on the matter and voting affirmatively or negatively is required for the election of a director nominee.

Proposal No. 2: To ratify, in a non-binding vote, the appointment of KPMG to serve as our independent registered public accounting firm for the fiscal year ended December 31, 2022 and to authorize the board of directors, acting through the audit committee, to set the independent registered public accounting firm’s remuneration.     The affirmative vote of the holders of ordinary shares representing a majority of the votes cast on the matter and voting affirmatively or negatively is required for the ratification of the appointment of KPMG as our independent registered public accounting firm for the current fiscal year and to authorize the board of directors, acting through the audit committee, to set the independent registered public accounting firm’s remuneration.

Proposal No. 3: To approve the Reverse Share Split.    The affirmative vote of the holders of ordinary shares representing a majority of the votes cast on the matter and voting affirmatively or negatively is required for the approval of the reverse share split (i.e., a consolidation of share capital under Irish law), or the Reverse Share Split, whereby every 15 ordinary shares of $0.01 (nominal value) each in the authorized and unissued and authorized and issued share capital of the Company be consolidated into 1 ordinary share of $0.15 (nominal value) each, and the subsequent (i) reduction in the nominal value of the ordinary shares in the authorized and unissued and authorized and issued share capital of the Company from $0.15 each to $0.01 each and (ii) increase in the authorized ordinary share capital of the Company in order to round up the authorized share capital to an even number following the Reverse Share Split. The implementation of the Reverse Share Split is subject to and conditional upon our board of directors determining, in its sole discretion, that a reverse share split is necessary for the Company to comply with the Bid Price Rule (as defined below).

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Proposal No. 4: To approve the share option exchange program.  The affirmative vote of the holders of ordinary shares representing a majority of the votes cast on the matter and voting affirmatively or negatively is required for the approval of the share option exchange.

Shares that abstain from voting as to a particular matter and shares held in "street name" by brokerage firms who indicate on their proxies that they do not have discretionary authority to vote such shares as to a particular matter will not be counted as votes in favor of such matter, and will also not be counted as shares voting on such matter. Accordingly, abstentions and "broker non-votes" will have no effect on the voting on the proposals referenced above.


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share ownership of certain beneficial owners and management

The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 31, 2022 by:

 

(a)

each person, or group of affiliated persons, known by us to beneficially own more than 5% of our ordinary shares;

 

 

(b)

each of our named executive officers;

 

 

(c)

each of our directors; and

 

 

(d)

all of our executive officers and directors as a group.

 


Beneficial ownership is determined according to the rules of the Securities and Exchange Commission (the “SEC”) and generally means that a person has beneficial ownership of a security if he, she, or it possesses sole or shared voting or investment power of that security, including share options that are exercisable within 60 days of March 31, 2022, shares issuable upon exercise of warrants within 60 days of March 31, 2022, and shares issuable upon exchange of our outstanding 6.500% exchangeable senior subordinated notes due 2025 (the “Exchangeable Notes”) (assuming physical settlement), which are exchangeable within 60 days of March 31, 2022.  Our ordinary shares issuable pursuant to share options, warrants and Exchangeable Notes, but not taking into account any additional ordinary shares issuable to satisfy accrued and unpaid interest due upon exchange of any Exchangeable Notes, are deemed outstanding for computing the percentage of the person holding such share options, warrants or Exchangeable Notes and the percentage of any group of which the person is a member, but are not deemed outstanding for computing the percentage of any other person. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons named in the table below have sole voting and investment power with respect to all ordinary shares shown that they beneficially own, subject to community property laws where applicable. The information does not necessarily indicate beneficial ownership for any other purpose, including for purposes of Section 13(d) and 13(g) of the Securities Act of 1933, as amended.  Percentage ownership is based on 183,353,418 ordinary shares outstanding on March 31, 2022. Except as otherwise set forth below, the address of the beneficial owner is c/o Iterum Therapeutics plc, Fitzwilliam Court, 1st Floor, Leeson Close, Dublin 2, Ireland.

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Number of Shares Beneficially Owned

 

 

Percentage of Shares Beneficially Owned

 

Directors and Named Executive Officers:

 

 

 

 

 

 

 

Corey N. Fishman(1)

 

851,541

 

 

*

 

Michael Dunne, MD(2)

 

393,004

 

 

*

 

Judith M. Matthews(3)

 

125,419

 

 

*

 

Sailaja Puttagunta

 

 

 

*

 

Brenton K. Ahrens(4)

 

25,825

 

 

*

 

Mark Chin

 

 

 

*

 

Beth P. Hecht

 

8,007

 

 

*

 

Ronald M. Hunt(5)

 

5,331,800

 

 

 

2.8

%

David G. Kelly(6)

 

103,130

 

 

*

 

All current executive officers and directors as a group (9 persons)(7)

 

6,838,726

 

 

 

3.6

%

Principal Shareholders(8)

 

 

 

 

 

 

 

 

 

 

 

 

 

* less than 1%

 

 

 

 

 

 

 

 

 

(1) Consists of (a) 537,008 shares beneficially owned by Mr. Fishman, and (b) 314,533 shares issuable to Mr. Fishman pursuant to share options exercisable within 60 days of March 31, 2022.

 

 

 

 

 

 

 

 

 

(2) Consists of (a) 346,849 shares beneficially owned by Dr. Dunne, and (b) 46,155 shares issuable to Dr. Dunne pursuant to warrants exercisable within 60 days of March 31, 2022.

 

 

 

 

 

 

 

 

 

(3) Consists of (a) 65,292 shares beneficially owned by Ms. Matthews, and (b) 60,127 shares issuable to Ms. Matthews pursuant to share options exercisable within 60 days of March 31, 2022.

 

 

 

 

 

 

 

 

 

(4) Consists of (a) 6,154 shares beneficially owned by Mr. Ahrens, and (b) 19,671 shares issuable to Mr. Ahrens pursuant to share options exercisable within 60 days of March 31, 2022.

 

 

 

 

 

 

 

 

 

(5) Consists of (a) 5,703 shares beneficially owned by Mr. Hunt, and (b) 11,241 shares issuable to Mr. Hunt pursuant to share options exercisable within 60 days of March 31, 2022; and (c) (i) 1,071,688 shares reported as beneficially owned by New Leaf Venture III, L.P. (“NLV-III”), New Leaf Venture Associates III, L.P. (“NLVA-III LP”) and New Leaf Venture Management III, L.L.C. (“NLVM-III LLC”), of which each such entity reports sole voting power with respect to 1,071,688 shares, shared voting power with respect to zero shares, sole dispositive power with respect to 1,071,688 shares and shared dispositive power with respect to zero shares, (ii) 384,615 shares held by New Leaf Biopharma Opportunities II, L.P. (“NBPO-II”), New Leaf BPO Associates II, L.P. (“NBPO-IIA”) and New Leaf BPO Management II, L.L.C. (“NBPO-IIM”), of which each such entity reports sole voting power with respect to 384,615 shares, shared voting power with respect to zero shares, sole dispositive power with respect to 384,615 shares and shared dispositive power with respect to zero shares, and (iii)  2,839,895 shares issuable to NLV-III and 1,018,658 shares issuable to NBPO-II on exchange of the Exchangeable Notes held by them and exchangeable within 60 days of March 31, 2022 (assuming physical settlement).  NLVA-III LP is the general partner of NLV-III and NLVM-III LLC is the general partner of NLVA-III LP. NBPO-IIA is the general partner of NBPO-II and NBPO-IIM is the general partner of NBPO-IIA. Mr. Hunt, a member of our board of directors, and Vijay K. Lathi are individual managers of NLVM-III LLC and individual managers of NPBO-IIM, and as a result may be deemed to have shared power to vote and dispose of these shares.  The address for each of the reporting persons other than Vijay K. Lathi is c/o New Leaf Venture Partners, 420 Lexington Avenue, Suite 408, New York, NY 10170. The address for Vijay K. Lathi is c/o New Leaf Venture Partners, 2730 Sand Hill Road, Suite 110, Menlo Park, CA 94025. We obtained certain of the information regarding beneficial ownership of these shares from Schedule 13D/A that was filed with the SEC on February 12, 2021.

 

 

 

 

 

 

 

 

 

(6) Consists of (a) 37,108 shares beneficially owned by Mr. Kelly and (b) 66,022 shares issuable to Mr. Kelly pursuant to share options exercisable within 60 days of March 31, 2022.

 

 

 

 

 

 

 

 

 

(7) Includes (a) 2,462,424 shares held by the current directors and executive officers, (b) 471,594 shares issuable to the current directors and executive officers pursuant to share options exercisable within 60 days of March 31, 2022, (c) 46,155 shares issuable to the current directors pursuant to warrants exercisable within 60 days of March 31, 2022, and (d) 3,858,553 shares issuable to affiliates of current directors on exchange of the Exchangeable Notes within 60 days within 60 days of March 31, 2022 (assuming physical settlement).

 

 

 

 

 

 

 

 

 

(8) To our knowledge, except as noted above, no person or entity is the beneficial owner of more than 5% of the voting power of our ordinary shares as of March 31, 2022.

 


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Management and CORPORATE GOVERNANCE matters

Board of Directors

Our business and affairs are managed under the direction of our board of directors.  Our Articles of Association (the “Articles of Association”) provide that the number of directors shall not be less than two (2) or more than thirteen (13), with the exact number to be determined by the board.  Our board currently consists of seven (7) members divided among three classes with staggered three-year terms as follows:

 

(1)

Class I, whose members are Mark Chin and David G. Kelly. The terms of the Class I directors will expire at the AGM;

 

 

(2)

Class II, whose members are Beth Hecht and Brenton K. Ahrens. The terms of the Class II directors will expire at our 2023 annual general meeting of shareholders; and

 

 

(3)

Class III, whose members are Corey N. Fishman, Michael W. Dunne and Ronald M. Hunt. The terms of the Class III directors will expire at our 2024 annual general meeting of shareholders.

On April 8, 2022, our board of directors accepted the recommendation of the nominating and corporate governance committee and voted to nominate Mark Chin and David G. Kelly for election at the AGM for a term of three years to serve until the 2025 annual general meeting of shareholders subject to their earlier death, resignation, retirement, disqualification or removal.

Continuing Members of and Current Members who are Nominated for Election to our Board of Directors

Set forth below are the names of each continuing member of, and current members who are nominated for election to, our board of directors, their ages, their principal occupation and business experience for at least the past five years and the names of other public companies of which each director has served as a director during the past five years, in each case as of March 31, 2022.  Additionally, set forth below is information about the specific experiences, qualifications, attributes or skills that led our board of directors to the conclusion on suitability of each person to serve as a director.

 

Name

 

Age

 

Position

Corey N. Fishman

 

57

 

Director, President and Chief Executive Officer

Brenton K. Ahrens (2)(3)

 

59

 

Director

Mark Chin (1)(2)

 

40

 

Director

Michael W. Dunne

 

62

 

Director

Ronald M. Hunt (1)(3)

 

57

 

Director

David G. Kelly (2)(3)

 

61

 

Director

Beth P. Hecht (1)(2)

 

58

 

Director

 

 

 

 

 

(1) Member of the compensation committee

(2) Member of the audit committee

(3) Member of the nominating and corporate governance committee

Corey N. Fishman has served as our President and Chief Executive Officer and as a member of our board of directors since November 2015. From August 2010 to February 2015, Mr. Fishman served as chief operating officer of Durata Therapeutics, Inc., a pharmaceutical company acquired by Actavis plc, a pharmaceutical company, and he also served as chief financial officer of Durata Therapeutics, Inc., from June 2012 to February 2015. From 2008 to 2010, Mr. Fishman served as chief financial officer of GANIC Pharmaceuticals, Inc., a pharmaceutical company. From 2002 to 2008, Mr. Fishman served in a variety of roles at MedPointe Healthcare, Inc., a specialty pharmaceutical company acquired by Meda AB, including as chief financial officer from 2006 to 2008. Mr. Fishman previously served on the board of directors of Momenta Pharmaceuticals, Inc., a biotechnology company, from September 2016 until June 2020 and BioSpecifics Technology Corporation, a biopharmaceutical company, from April 2020 until its acquisition by Endo International plc in December 2020.  Mr. Fishman holds a B.A. in economics from the University of Illinois at Urbana-Champaign and an M.S.M. in finance from the Krannert School of Management at Purdue University. We believe Mr. Fishman is qualified to serve on our board of directors due to his role as a founder of our Company, his deep knowledge of our Company and his extensive background in the pharmaceutical industry.

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Brenton K. Ahrens has served as a member of our board of directors since November 2015. Since 1999, Mr. Ahrens has served as a general partner with Canaan Partners LLP, a venture capital firm. Prior to joining Canaan Partners, Mr. Ahrens worked in both commercial and technical roles at General Surgical Innovations, a biotechnology company, Ethicon (J&J), a medical device company, and IAP Research, an engineering company. Mr. Ahrens previously served on the board of directors of Durata Therapeutics, Inc. from December 2009 until its acquisition by Actavis, plc in October 2014, and continues to serve on a number of other private pharmaceutical and healthcare company boards. Mr. Ahrens holds a B.S. and an M.S. in mechanical engineering from the University of Dayton and an M.B.A. from the Tuck School of Business at Dartmouth College. We believe Mr. Ahrens is qualified to serve on our board of directors due to his investment experience, including service on the boards of directors of other healthcare companies.

Mark Chin has served as a member of our board of directors since May 2017. Since July 2021, Mr. Chin has served as a managing director at Arix Bioscience plc, a life science investment company.  From August 2016 to April 2020, Mr. Chin served as an investment manager at Arix Bioscience plc, a life science investment company. From September 2012 to July 2016, Mr. Chin served as a principal at Longitude Capital LLC, a healthcare venture capital firm. From January 2011 to September 2012, Mr. Chin served as a consultant with the Boston Consulting Group. Mr. Chin currently serves on the board of Harpoon Therapeutics, Inc., a clinical-stage immunotherapy company, Imara, Inc., a clinical stage hematology company, and Pyxis Oncology, Inc., a preclinical oncology company, and serves on a number of other private pharmaceutical and healthcare company boards.  Mr. Chin has a B.S. in management science from the University of California at San Diego, an M.B.A. from the Wharton School at the University of Pennsylvania and an M.S. in biotechnology from the University of Pennsylvania. We believe Mr. Chin is qualified to serve on our board of directors due to his investment experience in biotechnology and medical technology industries.

Michael W. Dunne has served as a member of our board of directors since December 2020. Since December 2020 Dr. Dunne has served as the chief medical officer at the Gates Medical Research Institute. Previously, Dr. Dunne served as our chief scientific officer from November 2015 to December 2020 and served as a consultant for us until March 31, 2022. From November 2014 until September 2015, Dr. Dunne was vice president of research and development at Actavis. From September 2010 to October 2014, Dr. Dunne served as chief medical officer of Durata Therapeutics, Inc., where he previously served as acting chief medical officer on a consulting basis from December 2009 to September 2010. From 1992 to 2009, Dr. Dunne served in a variety of roles in connection with the clinical development of numerous infectious disease compounds at Pfizer Inc., a biopharmaceutical company, including as the vice president, therapeutic area head of development for infectious disease from 2001 to 2009. Dr. Dunne served as a member of the board of directors of Aviragen Therapeutics, Inc, a biotechnology company from 2015 to 2018. Dr. Dunne holds a B.A. in economics from Northwestern University and an M.D. from the State University of New York Health Sciences Center. He completed his internal medicine residency and fellowships in infectious diseases and pulmonary medicine at Yale University School of Medicine. We believe Dr. Dunne is qualified to serve on our board of directors due to his role as co-founder of the Company, his deep knowledge of our Company and his extensive background and medical experience in infectious disease.

Beth P. Hecht has served as a member of our board of directors since March 2021.  Since October 2021, Ms. Hecht has served as chief legal officer and corporate secretary of Xeris Biopharma Holdings Inc., a speciality pharmaceutical company. From January 2019 to October 2021, Ms. Hecht served as senior vice president, general counsel and corporate secretary of Xeris Pharmaceuticals, Inc., a speciality pharmaceutical company. From October 2012 to December 2018, Ms. Hecht served as managing director and chief legal and administrative officer for Auven Therapeutics Management L.L.P., a global biotechnology and pharmaceutical private equity firm. Ms. Hecht previously served on the board of directors of Neos Therapeutics, Inc. a pharmaceutical company, from September 2015 until its acquisition by Aytu BioPharma Inc., formerly Aytu Bioscience, Inc., in March 2021 and also served on the board of directors of Aytu BioScience Inc. from March 2021 until May  2021. Ms. Hecht is a graduate of Amherst College and Harvard Law School and started her career as an attorney specializing in intellectual property and corporate transactions at Willkie Farr & Gallagher (New York) and then Kirkland & Ellis (New York). We believe Ms. Hecht is qualified to serve on our board of directors due to her extensive experience in the pharmaceutical industry and her service on the boards of directors of other pharmaceutical companies.

Ronald M. Hunt has served as a member of our board of directors since November 2015. Since 2005, Mr. Hunt has served as a managing director and member of New Leaf Venture Partners, L.L.C., a venture capital firm. Previously, Mr. Hunt served at the Sprout Group, a venture capital firm, and was a consultant with consulting firms Coopers &

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Lybrand Consulting and The Health Care Group. Mr. Hunt also previously served in various sales and marketing positions at Johnson & Johnson and SmithKline Beecham Pharmaceuticals. Mr. Hunt currently serves as a board member of Harpoon Therapeutics, Inc., a clinical-stage immunotherapy company and Rallybio Corporation, a clinical-stage biotechnology company, and on the boards of a number of private pharmaceutical and healthcare companies.  Mr. Hunt previously served on the board of directors of Neuronetics, Inc. from 2015 to May 2019. Mr. Hunt holds a B.S. from Cornell University and an M.B.A. from the Wharton School of the University of Pennsylvania. We believe Mr. Hunt is qualified to serve on our board of directors due to his investment experience, his experience in the pharmaceuticals industry and his service on the boards of directors of other biopharmaceutical companies.

David G. Kelly has served as a member of our board of directors since August 2016. From September 2014 to January 2020, Mr. Kelly served as the executive vice president, Ireland of Horizon Therapeutics, plc, a biopharmaceutical company. Mr. Kelly served as managing director, Ireland of Horizon Therapeutics, plc until July 2018. From February 2012 to September 2014, Mr. Kelly served as chief financial officer of Vidara Therapeutics Inc., a pharmaceutical company. From May 2005 to January 2012, Mr. Kelly served as chief financial officer of AGI Therapeutics plc, a pharmaceutical company. Mr. Kelly also served as senior vice president, finance and planning of Warner Chilcott plc (formerly Galen Holdings plc), a pharmaceutical company listed on the London Stock Exchange (LSE). In addition, Mr. Kelly held roles at Elan Corporation, a pharmaceutical company, and KPMG.  Mr. Kelly holds a B.A. in economics from Trinity College, Dublin and is also a member of the Institute of Chartered Accountants in Ireland (ACA). We believe Mr. Kelly is qualified to serve on our board of directors due to his experience as a senior executive, particularly within the life science industry, including his experience in finance.

Former Members of our Board of Directors

Patrick J. Heron served as a member of our board of directors from November 2015 to March 2021, and as a member of our nominating and corporate governance committee from September 2017 to March 2021.

Shahzad Malik, M.D. served as a member of our board of directors from May 2017 to June 2021, and as a member of our compensation and nominating and corporate governance committees from September 2017 to June 2021.

Composition of the Board of Directors and Meetings

 

As outlined above, our Articles of Association provide that the number of directors shall not be less than two (2) or more than thirteen (13), with the exact number to be determined by the board, currently seven (7).  

 

Under the Irish Companies Act 2014, and notwithstanding anything contained in our Articles of Association or in any agreement between us and any director, our shareholders may, by an ordinary resolution, remove a director from office before the expiration of his or her term, at a meeting held on no less than 28 days' notice and at which the director is entitled to be heard.  Our Articles of Association also provide that the office of a director will be vacated in certain circumstances including if the director resigns his or her office by notice in writing or is requested to resign in writing by not less than a majority of the other directors.    Under our Articles of Association, our board of directors has the authority to appoint directors to the board either to fill a vacancy or as an additional director. If the board fills a vacancy, the director will hold this position as a director for a term that will coincide with the remaining term of the relevant class of director.

 

Board Determination of Independence

 

Applicable rules of The Nasdaq Stock Market, or Nasdaq, require a majority of a listed company’s board of directors to be comprised of independent directors within one year of listing. In addition, the Nasdaq rules require that within one year of the date of the completion of an initial public offering, all the members of a listed company’s audit, compensation and nominating and corporate governance committees be independent under the Securities Exchange Act of 1934, as amended, or the Exchange Act.  Under applicable Nasdaq rules, a director will only qualify as an “independent director” if, in the opinion of the listed company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

 

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In order to be considered independent for purposes of Rule 10A-3 under the Exchange Act, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries or otherwise be an affiliated person of the listed company or any of its subsidiaries.

 

In order to be considered independent for purposes of Rule 10C-1 under the Exchange Act, the board must consider, for each member of a compensation committee of a listed company, all factors specifically relevant to determining whether a director has a relationship to such company which is material to that director's ability to be independent from management in connection with the duties of a compensation committee member, including, but not limited to: (1) the source of compensation of the director, including any consulting, advisory or other compensatory fee paid by such company to the director; and (2) whether the director is affiliated with the company or any of its subsidiaries or affiliates.

 

In April 2022, our board of directors undertook a review of the composition of our board of directors and its committees and the independence of each director.  Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our board of directors has determined that none of Mr. Ahrens, Mr. Chin, Ms. Hecht, Mr. Hunt or Mr. Kelly, representing five of our seven current directors, has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under Rule 5605(a)(2) of the Nasdaq Listing Rules.  Mr. Fishman is not an independent director under Rule 5605(a)(2) because he is our President and Chief Executive Officer. Dr. Dunne is not an independent director under Rule 5605(a)(2) because he was an employee of the Company during the prior three years and provided consultancy services to a wholly owned subsidiary of the Company until March 31, 2022. Our board of directors has also determined that Messrs. Kelly, Ahrens and Chin and Ms. Hecht, who comprise our audit committee, Messrs. Hunt and Chin and Ms. Hecht, who comprise our compensation committee, and Messrs. Ahrens, Hunt and Kelly, who comprise our nominating and corporate governance committee, satisfy the independence standards for such committees established by the SEC and Nasdaq.  Dr. Malik and Mr. Heron who each served on our board of directors for a portion of the fiscal year ending December 31, 2021 were also determined to be independent directors as defined under the Nasdaq Listing Rules.  In making such determination, our board of directors considered the relationships that each such non-employee director has with our Company, including the transactions described below in “Certain Relationships and Related Party Transactions”,  and all other facts and circumstances that our board of directors deemed relevant in determining his or her independence, including the beneficial ownership of our shares by each non-employee director as described above in “Share Ownership of Certain Beneficial Owners and Management”.

Nasdaq Diversity Matrix 

On August 6, 2021, the SEC approved amendments to the Nasdaq Listing Rules related to board diversity. New Listing Rule 5605(f) (the “Diverse Board Representation Rule”) will require each Nasdaq-listed company, subject to certain exceptions, (1) to have at least one director who self-identifies as female, and (2) to have at least one director who self-identifies as Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander, two or more races or ethnicities, or as LGBTQ+, or (3) to explain why the company does not have at least two directors on its board who self-identify in the categories listed above. In addition, new Listing Rule 5606 (the “Board Diversity Disclosure Rule”) will require each Nasdaq-listed company, subject to certain exceptions, to provide statistical information about the company’s current board of directors, in a uniform format, related to each director’s self-identified gender and race, and self-identification as LGBTQ+. We are not required to fully comply with the Diverse Board Representation Rule until 2026. The statistical information required by the Board Diversity Disclosure Rule is provided in the matrix below.

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Board Diversity Matrix (as of April 25, 2022)

Total Number of Directors

 

7

Part I: Gender Identity

 

Female

 

Male

 

Non-Binary

 

Did Not Disclose Gender

Directors

 

1

 

6

 

0

 

0

Part II: Demographic Background

African American or Black

 

0

 

0

 

 

 

 

Alaskan Native or Native American

 

0

 

0

 

 

 

 

Asian

 

0

 

1

 

 

 

 

Hispanic or Latinx

 

0

 

0

 

 

 

 

Native Hawaiian or Pacific Islander

 

0

 

0

 

 

 

 

White

 

1

 

5

 

 

 

 

Two or More Races or Ethnicities

 

0

 

0

 

 

 

 

LGBTQ+

 

0

 

0

 

 

 

 

Did Not Disclose Orientation

 

0

 

0

 

 

 

 

Meetings of the Board of Directors

Our board holds at least four regular meetings each year.  Directors are expected to attend all meetings of the board and any committees on which they serve.  

Our Articles of Association provide that each director and the auditors are entitled to attend and speak at any general meetings of shareholders of the Company.  5 of our directors attended our annual general meeting of shareholders in 2021.  

 

Our board of directors met 10 times during 2021 and acted by written consent 5 times.  During 2021, no incumbent directors attended less than 75% of the aggregate of (i) the total number of meetings of the board and (ii) the total number of meetings of committees of the board on which he/she served, if any.

 

Board Leadership Structure

 

Brenton Ahrens, an independent director under applicable Nasdaq rules, currently serves as chairman of our board.  Mr. Ahrens’ duties as chairman of the board include determining the frequency and length of board meetings, recommending when special meetings of the board should be held, preparing or approving the agenda for each board meeting, chairing meetings of the board and of our independent directors, meeting with any director who is not adequately performing his or her duties as a member of the board or any committee of the board, facilitating communications between management and the board of directors, and assisting with other corporate governance matters.  Our board of directors believes that separating the duties of the chairman of the board from the duties of our chief executive officer enhances the board’s oversight of, and independence from, management, while also allowing our chief executive officer to focus on our day-to-day business operations instead of board administration.

Committees of our Board of Directors

Our board of directors has established an audit committee, a compensation committee, and a nominating and corporate governance committee, each of which operates under a charter that has been approved by our board of directors.  The charters for each of these committees are available on our website at www.iterumtx.com.

Audit Committee

Our audit committee, which was established in accordance with Section 3(a)(58)(A) of the Exchange Act, consists of David G. Kelly, Brenton K. Ahrens, Mark Chin and Beth P. Hecht. The chairperson of our audit committee is Mr. Kelly. The primary purpose of the audit committee is to discharge the responsibilities of our board of directors with respect to our accounting, financial, and other reporting and internal control practices and to oversee our independent registered public accounting firm. Specific responsibilities of our audit committee include:

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recommending a qualified firm to serve as the independent registered public accounting firm to audit our financial statements to the board of directors;

 

 

helping to ensure the independence and performance of the independent registered public accounting firm;

 

 

discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results;

 

 

reviewing, upon completion of the audit, the Irish Statutory Financial Statements proposed to be filed with our annual return at the Irish Companies Registration Office;

 

 

developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;

 

 

reviewing related party transactions;

 

 

coordinating the board of directors’ oversight of our internal controls over financial reporting, including discussing with management and the independent registered public accounting firm the integrity of our financial reporting processes and internal controls;

 

 

approving (or, as permitted, pre-approving) all audit and all permissible non-audit services to be performed by the independent registered public accounting firm;

 

discussing the Company’s policies with respect to risk assessment and risk management, including guidelines and policies to govern the process by which the Company’s exposure to risk is handled; and

 

supporting the board in minimizing the risks related to invested capital and ensuring that management administer the Company’s investment portfolio in accordance with the guidelines set out in the corporate investment policy.

 

Our board of directors has determined that Messrs. Kelly, Ahrens and Chin and Ms. Hecht each satisfy the independence standards for such committee established by the SEC and the Nasdaq Stock Market.  

Our board of directors has determined that Mr. Kelly is an “audit committee financial expert” within the meaning of SEC regulations. Our board of directors has also determined that each member of our audit committee has the requisite financial expertise required under the applicable requirements of the Nasdaq Stock Market. In arriving at this determination, the board of directors has examined each audit committee member’s scope of experience and the nature of their employment in the corporate finance sector.

Our audit committee met 5 times in 2021.

Compensation Committee

Our compensation committee consists of Ronald M. Hunt, Mark Chin and Beth P. Hecht. The chairperson of our compensation committee is Mr. Hunt. Shahzad Malik, M.D was a member of our compensation committee until he stepped down as a director in June 2021 due to commitments outside of our Company.

The primary purpose of our compensation committee is to discharge the responsibilities of our board of directors to oversee our compensation policies, plans and programs and to review and determine the compensation to be paid to our executive officers, directors and other senior management, as appropriate. Specific responsibilities of our compensation committee include:

 

reviewing and approving, or recommending that our board of directors approve, the compensation of our executive officers;

 

reviewing and recommending to our board of directors the compensation of our directors;

 

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administering our share and equity incentive plans and delegating authority to subcommittees of the compensation committee to grant share awards under our equity incentive plans to persons who are then subject to Section 16 of the Exchange Act;

 

selecting independent compensation consultants, legal counsel or other advisors;

 

reviewing and approving, or recommending that our board of directors approve, incentive compensation and equity plans, severance agreements, change-of-control protections and any other compensatory arrangements for our executive officers; and

 

reviewing and making recommendations to our board of directors regarding incentive compensation and equity plans.

Our compensation committee met 2 times in 2021 and acted by written consent 3 times in 2021.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee consists of Brenton K. Ahrens, Ronald M. Hunt and David G. Kelly. The chairperson of our nominating and corporate governance committee is Mr. Hunt.   Patrick Heron was a member of our nominating and corporate governance committee until he stepped down as a director in March 2021 and Shahzad Malik, M.D was a member of our nominating and corporate governance committee until he stepped down as a director in June 2021.

Specific responsibilities of our nominating and corporate governance committee include:

 

reviewing periodically and evaluating director performance on our board of directors and its applicable committees, and recommending to our board of directors and management areas for improvement;

 

interviewing, evaluating, nominating and recommending individuals for membership on our board of directors;

 

administering the process outlined in our Articles of Association concerning shareholder nominations for director candidates;

 

reviewing developments in corporate governance practices and recommending to our board of directors any amendments to our corporate governance policies;

 

overseeing and reviewing our processes and procedures to provide information to our board of directors and its committees; and

 

overseeing succession planning for senior executives.

Our nominating and corporate governance committee met 2 times in 2021 and acted by written consent 1 time in 2021.

Board Processes

Oversight of Risk

Our board of directors oversees our risk management processes directly and through its committees.  Our management is responsible for risk management on a day-to-day basis.  The role of our board and its committees is to oversee the risk management activities of management.  They fulfill this duty by discussing with management the policies and practices utilized by management in assessing and managing risks and providing input on those policies and practices.  In general, our board oversees risk management activities relating to business strategy, acquisitions, capital raising and allocation, organizational structure and certain operations risks; our audit committee oversees risk management activities related to financial controls and legal and compliance risks; our nominating and corporate governance committee oversees risk management activities relating to board composition and management succession planning; and our compensation committee oversees risk management activities relating to our compensation policies and practices.  Each committee reports to the full board on a regular basis, including reports with respect to the committee’s risk oversight activities as appropriate.  In addition, since risk issues often overlap, committees from time to time request that the full board discuss such risks.

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Director Nomination Process

 

Generally, the board will be responsible for nominating directors for election to the board by the Company’s shareholders at the annual general meeting of shareholders and the persons to be elected by the board to fill any vacancies on the board. The nominating and corporate governance committee is responsible for identifying, reviewing and evaluating and recommending to the board candidates to serve as directors of the Company, in accordance with its charter and consistent with the criteria set by the board in our corporate governance guidelines described below under “Corporate Governance Guidelines”.  The board believes that candidates for director should have certain minimum qualifications, including being able to read and understand basic financial statements, being over 21 years of age and having the highest personal integrity and ethics.  In making such recommendations, the nominating and corporate governance committee shall consider candidates proposed by the Company’s shareholders and shall review and evaluate information available to it regarding such candidates and shall apply the same criteria and shall follow substantially the same process in considering them, as it does in considering other candidates.    Shareholders may nominate individuals as potential director candidates by submitting their names, together with appropriate biographical information and background materials, and information with respect to the shareholder or group of shareholders making the nomination, including the number of ordinary shares owned by such shareholder or group of shareholders, in writing to the nominating and corporate governance committee, c/o Secretary, Iterum Therapeutics plc, Fitzwilliam Court, 1st Floor, Leeson Close, Dublin 2, Ireland.    The nominating and corporate governance committee will evaluate shareholder-recommended candidates by following substantially the same process outlined above.

The nominating and corporate governance committee shall also administer the process outlined in our Articles of Association concerning shareholder nominations for director candidates.  Shareholders must follow the formal procedures described in our Articles of Association and in “Shareholder Proposals for 2023 Annual General Meeting of Shareholders” below in connection with any such nomination.  

The nominating and corporate governance committee has not adopted a formal diversity policy but will consider issues of diversity among its members in identifying and considering nominees for director as well as age, skill and such other factors as it deems appropriate given the current needs of the board and the Company, to maintain a balance of knowledge, experience and capability.  

Corporate Governance Guidelines

Our board of directors has adopted corporate governance guidelines to assist in the exercise of its duties and responsibilities and to serve the best interest of our Company and shareholders.  The guidelines provide that:

 

the core responsibility of our board is to provide oversight of, and strategic guidance to, senior management;

 

the board will be composed of not less than a majority of independent directors, subject to any exceptions permitted by Nasdaq listing standards;

 

the independent directors of the board will meet periodically in executive session at least two times per year or such greater number as required by the Nasdaq listing standards;

 

board members have complete and open access to our management; and

 

the nominating and corporate governance committee will conduct an annual self-evaluation to determine whether the board and its committees are functioning effectively.

A copy of the Corporate Governance Guidelines is publicly available on our website at www.iterumtx.com.

Shareholder Communications to the Board of Directors

Shareholders who have questions or concerns should contact our Investor Relations department at +1 312 778 6073 or by email to IR@iterumtx.com.   Shareholders who wish to address questions regarding our business directly with the board of directors, or any individual director, should direct his or her questions in writing to Board of Directors c/o Secretary, Iterum Therapeutics plc, Fitzwilliam Court, 1st Floor, Leeson Close, Dublin 2. Communications will be distributed to the board of directors, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communications.  Communications will be forwarded to other directors if they relate

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to substantive matters that the chairman of our board, in consultation with legal counsel, considers appropriate for attention by the other directors. In general, communications relating to corporate governance and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances or matters as to which we receive repetitive or duplicative communications.

Compensation Committee Interlocks and Insider Participation

During 2021, the members of our compensation committee were Ronald M. Hunt (Chairman), Mark Chin, Beth P. Hecht and Shahzad Malik (into June 2021). No member of our compensation committee is, or has ever been, an officer or employee of our Company. None of our executive officers serve, or have served during the last year, as a member of the board of directors, compensation committee, or other board committee performing equivalent functions of any other entity that has one or more executive officers serving as one of our directors or on our compensation committee.

 

Executive Officers

The following table sets forth information regarding our executive officers as of March 31, 2022:

Name

 

Age

 

Position

Corey N. Fishman

 

57

 

Director, President and Chief Executive Officer

Sailaja Puttagunta

 

53

 

Chief Medical Officer

Judith M. Matthews

 

52

 

Chief Financial Officer

In addition to the biographical information for Mr. Fishman, which is set forth above, set forth below is certain biographical information about Dr. Puttagunta and Ms. Matthews:

Dr. Sailaja Puttagunta has served as our Chief Medical Officer since December 2021, and previously served as our Vice President of Clinical Development from January 2016 to December 2018. From October 2019 to December 2021, Dr. Puttagunta served as chief medical officer at BiomX Inc., a public biotechnology company, and from December 2018 to October 2019, she served as chief medical officer of BiomX Ltd. until its merger with BiomX, Inc. in October 2019. From January 2015 to January 2016, Dr. Puttagunta served as vice president of medical affairs at Allergan plc, formerly Actavis plc, a pharmaceutical company. From August 2014 to December 2014, Dr. Puttagunta served as vice president of development and medical affairs at Durata Therapeutics, Inc., a pharmaceutical company, and from June 2012 to July 2014, she served as Durata’s executive director of clinical and medical affairs. From 2006 to May 2012, Dr. Puttagunta served as a medical director at Pfizer Inc., a pharmaceutical company. Dr. Puttagunta graduated from Gandhi Medical College in Hyderabad, India and completed her residency in Internal Medicine and a fellowship in Infectious Diseases at Yale University School of Medicine. She also holds an M.S. in Biochemistry from the New York University School of Medicine.

Judith M. Matthews has served as our Chief Financial Officer since November 2015. From 2012 to February 2015, Ms. Matthews served as vice president of finance at Durata Therapeutics, Inc. From 2009 to 2012, Ms. Matthews served as head of financial planning & analysis at Bally Total Fitness Corporation, a fitness club chain. From 2004 to 2008, Ms. Matthews served as vice president of finance for the Sterno Group, a subsidiary of Blyth, Inc., a home products company. Ms. Matthews holds a B.A. in accounting from the University of Illinois at Urbana-Champaign and a Master of Management in finance and marketing from the Kellogg School of Management at Northwestern University.

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executive officer and director compensation

The following discussion provides details of the compensation and other benefits paid by us and our subsidiaries to certain executive officers for services provided for the years ended December 31, 2021 and 2020 and to the members of our board of directors for services provided for the year ended December 31, 2021.

Executive and Director Compensation Processes

Our executive compensation program is administered by our compensation committee, subject to oversight by our board of directors.  Our compensation committee reviews our executive compensation practices on an annual basis and approves, or recommends for approval by the board, the compensation of the Company’s executives.  

Our compensation committee periodically reviews and makes recommendations to the board of directors with respect to director compensation.  

In February 2021 at the direction of our compensation committee, our Company retained Coda Advisors LLC, or Coda, as an independent compensation consultant to provide comparative data on executive compensation practices in our industry and to provide advice to the compensation committee in relation to our executive compensation program for the year ended December 31, 2021, including advice and recommendations on the amounts and forms of executive compensation. While Coda provides advice to the Company and the compensation committee in relation to such compensation practices, the compensation committee ultimately makes its own decisions with regard to our executive and director compensation programs.  

For the year ended December 31, 2021, the compensation committee reviewed information regarding the independence and potential conflicts of interest of Coda, taking into account, among other things (i) the provision of other services to the Company by Coda; (ii) the amount of fees received by Coda from the Company as a percentage of its total revenue; (iii) Coda’s policies and procedures to prevent conflicts of interest; (iv) any business or personal relationships that Coda has with any member of the compensation committee; (v) any shares held by Coda in the Company; and (vi) any business or personal relationship Coda or Coda employees have with any executive officers of the Company.  Based on this review, the compensation committee concluded that the engagement did not raise any conflict of interest.

Executive Officer Summary Compensation Table

The following table provides details of the compensation and other benefits paid or accrued by us and our subsidiaries to our named executive officers for the year ended December 31, 2021, who are our President and Chief Executive Officer, Corey N. Fishman, and our two next most highly compensated executive officers, Dr. Sailaja Puttagunta, our Chief Medical Officer, and Ms. Judith M. Matthews, our Chief Financial Officer:

 

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Name and Principal Position

Year Ended December 31,

Salary

($)

 

Bonus(1)

($)

 

Share Awards(2)

($)

 

Option Awards(2)

($)

 

Non-Equity Incentive Plan Compensation(3)

($)

 

All Other Compensation(4)

($)

 

Total

($)

 

Corey N. Fishman

2021

 

573,000

 

 

125,000

 

 

688,000

 

 

9,240,000

 

 

236,363

 

 

4,902

 

 

10,867,265

 

President and Chief Executive Officer

2020

 

561,008

 

 

190,561

 

 

681,725

 

 

 

 

315,150

 

 

4,902

 

 

1,753,346

 

Sailaja Puttagunta (5)

2021

 

39,583

 

 

86,000

 

 

240,000

 

 

810,000

 

 

 

 

207

 

 

1,175,790

 

Chief Medical Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Judith M. Matthews

2021

 

381,410

 

 

50,000

 

 

320,000

 

 

3,388,000

 

 

100,120

 

 

2,315

 

 

4,241,845

 

Chief Financial Officer

2020

 

365,727

 

 

104,467

 

 

254,375

 

 

 

 

133,494

 

 

2,450

 

 

860,513

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) The amounts reported in the "Bonus" column for Mr. Fishman and Ms. Matthews reflect certain discretionary cash bonuses paid to our executive officers to incentivise the continued dedication of executives during 2021 and 2020 and the amount reported in the "Bonus" column for Dr. Puttagunta reflects a bonus paid to Dr. Puttagunta within 30 days of her commencing employment in accordance with the terms of her offer letter with Iterum Therapeutics US Limited.

 

(2) The amounts reported do not reflect the amounts actually received by our executive officers. Instead, these amounts reflect the aggregate grant date fair values of (i) restricted share units and share options granted to each of our executive officers during the year ended December 31, 2021 and (ii) performance restricted share units and share options granted to Mr. Fishman and Ms. Matthews during the year ended December 31, 2020, each as computed in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, 718, which, in the case of performance restricted share units, is based upon the probable outcome of such conditions for the performance restricted share units. Assumptions used in the calculation of these amounts are included in Note 13 to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Our executive officers who have received share options will only realize compensation with regard to these share options to the extent the trading price of our ordinary shares is greater than the exercise price of such share options and such share options vest.

 

(3) Amount represents cash bonuses earned for the 12-month periods ending December 31, 2021 and 2020, respectively. Amounts disclosed for the year ended December 31, 2021 exclude payments made in 2021 for 2020 bonuses. Amounts disclosed for the year ended December 31, 2020 exclude payments made in 2020 for 2019 bonuses.

 

(4) Includes the dollar value of life insurance premiums paid by the company for the benefit of such executive.

 

(5) Dr. Puttagunta was appointed as our Chief Medical Officer in December 2021.

 

 

 

Narrative Disclosure to Executive Officer Summary Compensation Table

Base Salary

During the year ended December 31, 2021, we paid annualized base salaries of $573,000 to Mr. Fishman, $475,000 to Dr. Puttagunta and $381,410 to Ms. Matthews. During the year ended December 31, 2020, we paid annualized base salaries of $561,008 to Mr. Fishman, and $365,727 to Ms. Matthews.

In January 2022, our compensation committee approved an increase to the annualized base salaries of Mr. Fishman and Ms. Matthews effective February 1, 2022, as follows: $590,190 for Mr. Fishman, and $396,666 for Ms. Matthews.

None of the named executive officers are currently party to any employment arrangements that provide for automatic or scheduled increases in base salary.  

Non-Equity Incentive Plan Compensation

Our named executive officers participate in a cash bonus program which is tied to the achievement of strategic and corporate goals of the Company, which are approved annually by our compensation committee.   Our compensation committee determines the amount of these bonuses, if any, based on its assessment of the named executive officers’ performance and that of the Company against goals established annually.

Under their respective employment agreements, the annual target bonus for Mr. Fishman is 55% of his current base salary, the annual target bonus for Dr. Puttagunta is 45% of her current base salary and the annual target bonus for Ms. Matthews was 35% of her current base salary, adjusted to 40% in January 2022 on approval of the compensation committee, with such adjustment to be effective for 2022.

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At the beginning of each year, our compensation committee reviews the accomplishments of the named executive officers as measured against the previous year’s goals, whether each goal had been achieved and the relative weight that should be given to each goal in determining the cash bonus payment for that year.  Based on its review, the compensation committee recommended cash bonus payments of $236,363 to Mr. Fishman and $100,120 to Ms. Matthews with respect to the year ended December 31, 2021. The compensation committee recommended cash bonus payments of $315,150 to Mr. Fishman and $133,494 to Ms. Matthews with respect to the year ended December 31, 2020.

Bonuses

During 2021, the compensation committee also recommended special retention bonus payments for executives of $125,000 to Mr. Fishman and $50,000 to Ms. Matthews to incentivise the continued dedication of executives during 2021.  In addition, in connection with her commencement of employment, Dr. Puttagunta was paid a bonus of $86,000 on December 28, 2021.

Equity Incentive Awards

We believe that our ability to grant equity-based awards is a valuable and necessary compensation tool that aligns the long-term financial interests of our executive officers and our shareholders.  In addition, we believe that our ability to grant share options and other equity-based awards helps us to attract, retain and motivate our executive officers and encourages them to devote their best efforts to our business and financial success.

In March 2021, pursuant to powers delegated to it by the board of directors, our compensation committee approved the grant of restricted share units, or RSUs, under our Amended and Restated 2018 Equity Incentive Plan, as amended, or the 2018 Plan, to Mr. Fishman and Ms. Matthews in the following number for services provided: 430,000 to Mr. Fishman and 200,000 to Ms. Matthews. These RSUs vest in the following proportions: (i) 50% on March 11, 2022; and (ii) 50% on March 11, 2023, subject to each such named executive officer’s continued provision of services to us on each vesting date. In March 2021, the compensation committee also approved the grant of share options under the 2018 Plan to Mr. Fishman and Ms. Matthews to purchase the following number of ordinary shares, which grants became effective on June 23, 2021, and which had an exercise price of $2.01 per share: 5,280,000 to Mr. Fishman and 1,936,000 to Ms. Matthews. Such share options vest as to 25% of the ordinary shares underlying such share options on the first anniversary of the date of grant based on each such named executive officer’s continued service with us through that date and the remaining 75% of the ordinary shares underlying such share options vest in equal monthly instalments thereafter subject to each such named executive officer’s continued provision of services to us on each vesting date.

 

In connection with Dr. Puttagunta’s employment commencement in December 2021, she was granted (i) an inducement share option award to purchase 1,800,000 ordinary shares on December 10, 2021, which vests as to 25% of the shares underlying the share option on December 1, 2022 and vests as to an additional 2.0833% of the shares underlying the share option at the end of each successive month following such date until December 1, 2025, and which has an exercise price of $0.48 per share and (ii) an inducement RSU award for 500,000 ordinary shares which vests as to 25% of the shares on each anniversary of the grant date through 2025. These awards were each made as an inducement to employment in accordance with Nasdaq Listing Rule 5635(c)(4) and were granted pursuant to our 2021 Inducement Equity Incentive Plan, or the 2021 Inducement Plan, and not pursuant to the terms of our 2018 Plan.

In February 2020, pursuant to powers delegated to it by the board of directors, our compensation committee approved the grant of performance restricted share units, or PSUs, under our 2018 Plan to Mr. Fishman and Ms. Matthews which were subject to certain performance-based vesting conditions. The following number of PSUs were granted to Mr. Fishman and Ms. Matthews: 335,000 to Mr. Fishman and 125,000 to Ms. Matthews. These PSUs were to vest in the following proportions, in each case subject to such executive remaining in continued service with us: (i) 50% upon board certification of the acceptance by the United States Food and Drug Administration, or the FDA, of a New Drug Application, or NDA, provided such event occurs on or before December 31, 2021, which vesting occurred on January 25, 2021; and (ii) 50% on the date which is the initial deadline set by the FDA to complete its review of such NDA in accordance with the Prescription Drug User Fee Act, provided such event occurs on or before December 31, 2021, which we refer to as the FDA Review Goal.  Although the FDA Review Goal was satisfied timely, each of Mr. Fishman and Ms. Matthews had waived their right to receive the shares that would have been issued upon vesting.

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Outstanding Equity Awards at December 31, 2021

The following table presents information regarding outstanding equity awards held by our named executive officers as of December 31, 2021. All equity awards were granted under our 2015 Equity Incentive Plan, our 2018 Plan and our 2021 Inducement Plan.

 

 

Option Awards (1)

 

 

Share Awards (1)

 

Name

Number of

Securities

Underlying

Unexercised

Options (#)

Exercisable

 

Number of

Securities

Underlying

Unexercised

Options (#)

Unexercisable

 

Option

Exercise

Price Per

Share ($) (2)

 

Option

Expiration

Date

 

 

Number of Shares or Units of Stock that have not Vested (#)

 

Market Value of Shares or Units of Stock that have not Vested  ($)

 

Corey N. Fishman

65,351(3)

 

 

 

3.30

 

09/11/2027

 

 

 

 

 

 

 

 

114,046

 

13,261(4)

 

13.00

 

05/23/2028

 

 

 

 

 

 

 

 

106,250

 

43,750(5)

 

5.80

 

02/14/2029

 

 

 

 

 

 

 

 

 

5,280,000(6)

 

2.01

 

06/22/2031

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

430,000(7)

 

 

168,560

 

Sailaja Puttagunta

 

 

1,800,000(8)

 

0.48

 

12/09/2031

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

500,000(9)

 

 

196,000

 

Judith M. Matthews

11,882 (3)

 

 

 

3.30

 

09/11/2027

 

 

 

 

 

 

 

 

21,383

 

2,487(4)

 

13.00

 

05/23/2028

 

 

 

 

 

 

 

 

21,250

 

8,750(5)

 

5.80

 

02/14/2029

 

 

 

 

 

 

 

 

 

1,936,000(6)

 

2.01

 

06/22/2031

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

200,000(7)

 

 

78,400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Pursuant to the equity agreements between the named executive officer and us, the vesting of such named executive officer’s share and option awards will accelerate under certain circumstances as described under the section titled “—Potential Payments Upon Termination or Change in Control" below.

 

(2) The exercise price per share of the share options reflects the fair market value per ordinary share on the date of grant.

 

(3) Share option that vested as to 25% of the ordinary shares underlying the share option on September 12, 2018 with the remaining ordinary shares vesting in equal monthly installments thereafter until September 12, 2021.

 

(4) Share option that vested as to 25% of the ordinary shares underlying the share option on May 24, 2019 with the remaining ordinary shares vesting in equal monthly installments thereafter until May 24, 2022, subject to continued service with us through each relevant vesting date.

 

(5) Share option that vested as to 25% of the ordinary shares underlying the share option on February 15, 2020 with the remaining ordinary shares vesting in equal monthly installments thereafter until February 15, 2023, subject to continued service with us through each relevant vesting date.

 

(6) Share option that vests as to 25% of the ordinary shares underlying the share option on June 23, 2022 with the remaining ordinary shares vesting in equal monthly installments thereafter until June 23, 2025, subject to continued service with us through each relevant vesting date.

 

(7) Restricted share units that vest 50% on March 11, 2022, and 50% on March 11, 2023, subject to continued service with us through each relevant vesting date.

 

(8) Share option that vests as to 25% of the ordinary shares underlying the share option on December 1, 2022 with the remaining ordinary shares vesting in equal monthly installments thereafter until December 1, 2025, subject to continued service with us through each relevant vesting date.  This award was granted under our 2021 Inducement Plan as an inducement material to Dr. Puttagunta's acceptance of employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4).

 

(9) Restricted share units that vest as to 25% of the shares underlying the award on December 1, 2022 with the remaining shares scheduled to vest in equal monthly installments thereafter, subject to continued service with us through each relevant vesting date.  This award was granted under our 2021 Inducement Incentive Plan as an inducement material to Dr. Puttagunta's acceptance of employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4).

 

Employment Agreements with Executive Officers

We have entered into offer letters with each of our named executive officers.  The offer letters generally provide for at-will employment and set forth the executive’s initial base salary, target variable compensation, eligibility for employee benefits, the terms of initial equity grants and severance benefits on a qualifying termination.  Each of our named executive officers has also executed our standard form proprietary information agreement.  Any potential payment and benefits due upon a termination of employment or change of control of us are further described below.

Corey N. Fishman serves as our President and Chief Executive Officer. On November 18, 2015, Mr. Fishman entered into an offer letter with Iterum Therapeutics US Limited, our indirect wholly owned subsidiary. The offer letter has

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no specific term and constitutes an at-will employment arrangement.  On May 2, 2018, Mr. Fishman entered into an amended offer letter, which became effective upon the closing of our initial public offering pursuant to which Mr. Fishman’s base salary became $540,000, and his discretionary annual target performance bonus increased from 50% to 55% of his annual base salary. His base salary was reviewed in December 2020 and increased to $573,000, effective January 1, 2021. His base salary was reviewed in January 2022 and increased to $590,190, effective February 1, 2022.

Sailaja Puttagunta serves as our Chief Medical Officer.  On October 27, 2021, Dr. Puttagunta entered into an offer letter with Iterum Therapeutics US Limited, our indirect wholly owned subsidiary.   The offer letter has no specific term and constitutes an at-will employment arrangement.  Dr. Puttagunta commenced employment on December 1, 2021.   Dr. Puttagunta’s base salary is $475,000 and her discretionary annual target performance bonus is 45% of her annual base salary.   Dr. Puttagunta was also entitled to an initial bonus payment of $86,000 within 30 days of commencing employment and a subsequent bonus payment of $86,000 within 30 days of the six-month anniversary of commencement of employment, conditioned upon Dr. Puttagunta’s continuing employment with the Company on such payment date.

Judith M. Matthews serves as our Chief Financial Officer. On November 18, 2015, Ms. Matthews entered into an offer letter with Iterum Therapeutics US Limited, our indirect wholly owned subsidiary. The offer letter has no specific term and constitutes an at-will employment arrangement. Ms. Matthews entered into an amended offer letter, which became effective upon the closing of our initial public offering pursuant to which Ms. Matthews’ base salary became $350,000, and her discretionary annual target performance bonus increased from 25% to 35% of her annual base salary.  In January 2022 our compensation committee approved an increase in Ms. Matthew’s annual target performance bonus to 40%.   Ms. Matthew’s base salary was reviewed in December 2020 and increased to $381,410, effective January 1, 2021. Her base salary was reviewed in January 2022 and increased to $396,666, effective February 1, 2022.  

Potential Payments Upon Termination or Change in Control

Our agreements with each of our named executive officers provide that upon the termination of his or her employment by us other than for cause (other than due to death or disability), or by the named executive officer with good reason (each as defined below), he or she will be entitled to receive the following severance benefits:

 

cash severance equal to a fixed number of months of such executive’s base salary (twelve months in the case of Mr. Fishman and nine months in the case of Dr. Puttagunta and Ms. Matthews), payable in installments following such termination in the form of base salary continuations; and

 

 

Company-paid COBRA premiums for up to 12 months (or 18 months for Mr. Fishman) following such executive’s termination date.

 

“Cause” for termination as used in each of the offer letters means (a) commission or conviction by the named executive officer (including a guilty plea or plea of nolo contendere) of any felony or any other crime involving fraud, dishonesty or moral turpitude; (b) commission by the named executive officer or attempted commission of or participation in a fraud or act of dishonesty or misrepresentation against the Company; (c) material breach by the named executive officer of his or her duties to the Company; (d) intentional damage by the named executive officer to any property of the Company; (e) misconduct, or other violation of Company policy that causes harm; (f) material violation by the named executive officer of any written and fully executed contract or agreement between him or her and the Company; or (g) conduct by the named executive officer which, in the good faith and reasonable determination of the Company, demonstrates gross unfitness to serve. The determination that a termination is for Cause shall be made by the Company in its sole discretion.

Pursuant to each of the offer letters, the named executive officer shall have “good reason” for resigning from employment with the Company if any of the following actions are taken by the Company without his or her prior written consent: (a) a material reduction in his or her base salary, which is a reduction of at least 10% of his or her base salary (unless pursuant to a salary reduction program applicable generally to the Company’s similarly situated employees); (b) a material reduction in his or her duties (including responsibilities and/or authorities), provided, however, that a change in job position (including a change in title) shall not be deemed a “material reduction” in and of itself unless his or her new duties are materially reduced from the prior duties; or (c) relocation of the name executive officer’s principal place of employment to a place that increases his or her one-way commute by more than

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fifty (50) miles as compared to his or her then-current principal place of employment immediately prior to such relocation.

 

If such a qualifying termination occurs within the period beginning one month prior to and ending 12 months following a change of control of us, the cash severance payment entitlement described above will increase to 12 months of such executive’s then current base salary in the case of Dr. Puttagunta and Ms. Matthews, and to 18 months of his then current base salary in the case of Mr. Fishman. The executives will also be entitled to an additional cash payment equal to a percentage of such executives’ target annual bonus for the year of termination, equal to 100% in the case of Dr. Puttagunta and Ms. Matthews and 150% in the case of Mr. Fishman.

Each offer letter also contains a “better after-tax” provision, which provides that if any of the payments to such named executive officer constitutes a parachute payment under Section 280G of the Internal Revenue Code of 1986, as amended, or the Code, the payments will either be (i) reduced or (ii) provided in full to the executive, whichever results in the executive receiving the greater amount after taking into consideration the payment of all taxes, including the excise tax under Section 4999 of the Code, in each case based upon the highest marginal rate for the applicable tax.

Payment of any of the severance benefits described above is also conditioned on the named executive officer’s delivery and non-revocation of a general release of claims in our favor.

In addition, pursuant to the equity agreements between each of the named executive officers and us, in the event of a qualifying termination in connection with a change of control, the vesting and exercisability of any then-unvested share options, restricted share unit awards or any other share awards outstanding under the 2015 Plan, the 2018 Plan and/or the 2021 Inducement Plan held by each of Mr. Fishman, Dr. Puttagunta and Ms. Matthews, will be accelerated in full.

On March 11, 2020, on recommendation from the compensation committee, our board of directors approved the creation of a carve out plan to reward certain key employees including Mr. Fishman, Ms Matthews and Dr. Puttagunta in the event of a change of control.   The aggregate amount payable under the plan will be calculated on a tiered basis based on the upfront consideration payable to us and our equityholders in connection with such change of control, with potential aggregate amounts payable under the plan falling within a range around approximately 2.5% of the upfront consideration.  The other terms of the plan and each executive’s entitlement to participate are to be determined at the time of the change of control transaction.

Director Compensation – Summary Compensation Table

The following table shows the total compensation paid or accrued by us and our subsidiaries during the year ended December 31, 2021, to each of our current and former non-employee directors. Directors who are employed by us are not compensated for their service on our board of directors.

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Name

Fees Earned or Paid in Cash ($)

 

Option

Awards ($) (1)(2)

 

Share Awards ($) (1)(3)

 

All Other Compensation

($) (4)

 

Total ($)

 

Brenton K. Ahrens

 

73,000

 

 

110,000

 

 

 

 

 

 

183,000

 

Mark Chin

 

48,500

 

 

 

 

110,000

 

 

 

 

158,500

 

Michael Dunne, M.D.

 

35,000

 

 

 

 

147,260

 

 

342,800

 

 

525,060

 

Beth P. Hecht (5)

 

38,396

 

 

 

 

137,123

 

 

 

 

175,519

 

Patrick J. Heron (6)

 

9,750

 

 

 

 

110,000

 

 

 

 

119,750

 

Ronald M. Hunt

 

54,000

 

 

 

 

110,000

 

 

 

 

164,000

 

David G. Kelly

 

54,000

 

 

110,000

 

 

 

 

 

 

164,000

 

Shahzad Malik, M.D. (7)

 

22,500

 

 

 

 

110,000

 

 

 

 

132,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) The amounts reported do not reflect the amounts actually received by our directors. Instead, these amounts reflect the aggregate grant date fair values of share options and restricted share units granted to our directors during the year ended December 31, 2021, as computed in accordance with FASB ASC 718. Assumptions used in the calculation of these amounts are included in Note 13 to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Our directors who have received share options will only realize compensation with regard to these share options to the extent the trading price of our ordinary shares is greater than the exercise price of such share options.

 

(2) The aggregate number of shares subject to outstanding share options held by each of our non-employee directors as of December 31, 2021 were as follows: Mr. Ahrens: 84,377; Mr. Chin: 0; Dr. Dunne: 0; Ms. Hecht: 0;  Mr. Heron 0; Mr. Hunt: 11,241; Dr. Malik: 0; Mr. Kelly: 130,728.

 

(3) The aggregate number of shares subject to outstanding restricted share units held by each of our non-employee directors as of December 31, 2021, were as follows: Mr. Ahrens: 0; Mr. Chin: 36,798; Dr. Dunne: 47,292; Ms. Hecht: 44,440;  Mr. Heron 0; Mr. Hunt: 36,798; Dr. Malik: 0; Mr. Kelly: 0.

 

(4) Represents consulting fees paid to Dr. Dunne in connection with his consulting arrangement.

 

(5) Ms. Hecht was appointed to the board of directors, effective as of March 2021.

 

(6) Mr. Heron resigned as a member of our board of directors as of March 2021.

 

(7) Dr. Malik resigned as a member of our board of directors as of June 2021.

 

 

Consulting Agreement

 

During 2021, we compensated Michael Dunne, M.D., our former chief scientific officer and current member of our board of directors, pursuant to a consulting agreement dated February 21, 2021. The consulting agreement entitled Dr. Dunne to consulting fees of $16,900 per month and to payments in an aggregate amount of up to $220,000 on the achievement of milestones set out in the consulting agreement.  The consulting agreement was amended, effective September 30, 2021, to extend the term of the consulting agreement by three months, or until December 31, 2021.   It was further amended, effective as of December 31, 2021, to extend the term of the consulting agreement by a further three months, or until March 31, 2022, and to reduce the monthly service fee payable thereunder to $10,000 per month. In connection with the entry into the consulting agreement with Dr. Dunne, the compensation committee approved certain changes to the terms and conditions of the share options and restricted share units granted to Dr. Dunne in his capacity as chief scientific officer, as set forth in “Certain Relationships and Related Party Transactions—Consulting Agreement and Share Award Letter” below.  $342,800 was paid to Dr. Dunne in 2021 for services provided pursuant to the consulting agreement.

Non-Employee Director Compensation Policy

Under our Amended and Restated Non-Employee Director Compensation Policy each non-employee director is eligible to receive compensation for his or her service consisting of annual cash retainers, each paid in four equal quarterly installments and equity awards.  Each director receives an annual base cash retainer of $35,000 for such service. The non-executive chairperson of our board of directors receives an additional annual base cash retainer of $27,500 for such service.

The policy also provides that we compensate the members of our board of directors for service on our committees as follows:

 

The chairperson of our audit committee receives an annual cash retainer of $15,000 for such service and each of the other members of the audit committee receives an annual cash retainer of $7,500.

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The chairperson of our compensation committee receives an annual cash retainer of $12,000 for such service and each of the other members of the compensation committee receives an annual cash retainer of $6,000.

 

The chairperson of our nominating and corporate governance committee receives an annual cash retainer of $8,000 for such service and each of the other members of the nominating and corporate governance committee receives an annual cash retainer of $4,000.

 

Directors may elect to receive share options or restricted share units, or a mixture of both in lieu of his/her cash retainer on the date on which such retainer would otherwise have been paid in cash on the terms and subject to the conditions set forth below with respect to director equity awards, provided that any such election is made no later than December 31 of the calendar year prior to the year that the compensation is earned; and provided further that each such share option and restricted share unit award will vest in full upon the first anniversary of the vesting commencement date, with the vesting commencement date being the first day of each calendar quarter for which such cash retainer is earned, or the date of election to the board in the case of a newly appointed director.

The policy further provides for the grant of annual equity awards as follows:

 

Each director will receive annual equity awards with a fixed value of $110,000.

 

The equity awards will be granted as a mix of share options and restricted share units, at such director’s discretion. Each director must determine their mix of equity awards no later than 30 days prior to the applicable grant date.

 

All equity awards will vest on the one-year anniversary of the grant date.

 

The value of a share option to be granted under this policy will be determined using the same method we use to calculate the grant-date fair value of share options in our financial statements, except that no provision will be made for estimated forfeitures related to service-based vesting. The actual number of shares to be granted under a restricted share unit award under this policy will be determined by dividing the grant date value by a 30-day volume weighted average trading price (ending on the trading day immediately preceding the grant date).

We also reimburse our non-employee directors for reasonable travel and other expenses incurred in connection with attending our board of director and committee meetings.

 

Anti-Hedging and Anti-Pledging Policies

 

We prohibit our directors, officers, and employees from engaging in the following transactions with respect to securities of the Company:

 

short sales;

 

transactions in put or call options;

 

hedging transactions;

 

margin accounts;

 

pledges; or

 

other inherently speculative transactions.

Risk Considerations in Our Compensation Program

Our compensation committee has reviewed and evaluated the philosophy and standards on which our compensation plans have been developed and implemented across our Company.  It is our belief that our compensation programs do not encourage inappropriate actions or risk taking by our executive officers.  We do not believe that any risks arising from our employee compensation policies and practices are reasonably likely to have a material adverse effect on our Company.  In addition, we do not believe that the mix and design of the components of our executive compensation program encourage management to assume excessive risks.

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equity compensation plans and other benefit plans

Equity Compensation Plan Information

 

The following table provides certain aggregate information with respect to all of our equity compensation plans in effect as of December 31, 2021.  As of December 31, 2021, we had two equity compensation plans, the 2018 Equity Incentive Plan, or the 2018 Plan, and the 2015 Equity Incentive Plan, or the 2015 Plan, each of which were approved by our shareholders. In addition, from time to time, the compensation committee grants inducement equity awards to individuals as an inducement material to the individual’s entry into employment with us within the meaning of Nasdaq Listing Rules, pursuant to our 2021 Inducement Plan that was adopted by our board of directors without shareholder approval.

Plan category

Number of securities to be issued upon exercise of outstanding options/share awards

(a)

 

 

Weighted average exercise price of outstanding options(1)

(b)

 

 

Number of securities remaining for future issuance under equity compensation plan (excluding securities reflected in column (a))

(c)

 

Equity compensation plans approved by shareholders

 

15,515,138

 

 

$

2.20

 

 

 

3,282,629

 

Equity compensation plans not approved by shareholders

2,300,000(2)

 

 

$

0.48

 

 

 

2,700,000

 

Total

 

17,815,138

 

 

$

1.98

 

 

 

5,982,629

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) The weighted-average exercise price is calculated based solely on the exercise prices of the outstanding share options and does not reflect the shares that will be issued upon the vesting of outstanding RSUs, which have no exercise price.

 

(2) Represents a share option award and a restricted share unit award granted to Dr. Puttagunta on December 10, 2021 as an inducement material to Dr. Puttagunta's acceptance of employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4) under our 2021 Inducement Plan.

 

 

 

2021 Inducement Equity Incentive Plan

On November 24, 2021, our board of directors adopted without shareholder approval the 2021 Inducement Plan and, subject to the adjustment provisions of the 2021 Inducement Plan, reserved 5,000,000 ordinary shares for issuance pursuant to equity awards granted under the 2021 Inducement Plan. In accordance with Nasdaq Listing Rule 5635(c)(4), awards under the 2021 Inducement Plan may only be made to individuals who were not previously employees or nonemployee directors of the Company (or following such individuals’ bona fide period of non-employment with the Company), as an inducement material to the individuals’ entry into employment with the Company. The 2021 Inducement Plan provides for the grant of nonstatutory share options, or NSOs, share appreciation rights, or SARs, restricted shares, restricted share units, or RSUs, performance-based share awards, and other share awards.

As of December 31, 2021, share options to purchase 1,800,000 ordinary shares were outstanding under our 2021 Inducement Plan, with a weighted-average exercise price of $0.48 per share. As of December 31, 2021, there were 500,000 ordinary shares to be issued upon vesting of outstanding RSUs.

2018 Equity Incentive Plan

Our board of directors adopted our 2018 Plan in March 2018 and our shareholders approved the 2018 Plan in May 2018, and the Plan was most recently amended and restated in June 2020 and further amended in June 2021.   Our 2018 Plan authorizes the award of incentive share options that may qualify for favorable tax treatment under U.S. tax laws to their recipients under Section 422 of the Code, or ISOs, NSOs, SARs, restricted shares, RSUs, performance-based share awards, and other share awards, which are collectively referred to as awards. We may grant awards under the 2018 Plan to our employees, including our officers, and employees of our affiliates. A separate sub-plan to the 2018 Plan has been established for the purpose of granting awards to our non-employee directors and consultants and non-employee directors and consultants of our affiliates, which we refer to as the Sub-Plan. The provisions of the

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2018 Plan apply in their entirety to any awards made under the Sub-Plan save for certain amendments set out in the Sub-Plan required in the context of awards to our non-employee directors and consultants and non-employee directors and consultants of our affiliates, rather than employees,  including references to eligible participants under the Sub-Plan.

As of December 31, 2021, share options to purchase 14,117,253 ordinary shares were outstanding under our 2018 Plan, with a weighted-average exercise price of $2.19 per share. As of December 31, 2021, there were 1,285,328 ordinary shares to be issued upon vesting of outstanding RSUs.

Our 2018 Plan is administered by our board of directors or a duly authorized committee or subcommittee of our board of directors.  Our board of directors has authorized our compensation committee to administer certain aspects of the 2018 Plan.  For purposes of this summary, where appropriate in the relevant context, the term “board of directors” may include the compensation committee or any other committee to whom the board of directors delegates authority, as indicated in the 2018 Plan. Our board of directors may also delegate to one or more of our officers the authority to designate employees (other than officers) to receive specified awards under the 2018 Plan and determine the number of shares subject to such awards.

Our board of directors has the authority to construe and interpret our 2018 Plan, grant and amend awards, determine the terms of such awards and make all other determinations necessary or advisable for the administration of the plan, including, but not limited to, repricing share options or SARs without prior shareholder approval.  All determinations, interpretations and constructions made by the board of directors in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.

Awards granted under our 2018 Plan may not be transferred in any manner other than by will or by the laws of descent and distribution or as otherwise determined by our compensation committee or under the terms of our 2018 Plan or an applicable award agreement.

Our 2018 Plan provides that in the event of certain specified significant corporate transactions, each outstanding award will be treated as determined by our board of directors unless otherwise provided in an award agreement or other written agreement between us and the award holder. The board of directors may take one of the following actions with respect to such awards:

arrange for the assumption, continuation or substitution of an award by the surviving or acquiring corporation (or its parent company);

arrange for the assignment of any reacquisition or repurchase rights held by us in respect of ordinary shares issued under an award to a surviving or acquiring corporation (or its parent company);

accelerate the vesting, in whole or in part, of the award and, if applicable, the time at which the award may be exercised, and provide for its termination prior to the transaction if it is not exercised at or prior to the closing of the transaction;

arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by us with respect to the award;

cancel or arrange for the cancellation of the award, to the extent not vested or not exercised prior to the closing of the transaction, in exchange for a cash payment or no payment, as determined by our board of directors; and

cancel or arrange for the cancellation of the award to the extent not exercised prior to the closing of the transaction, in exchange for a payment, in the form determined by our board of directors, equal to the excess, if any, of (A) the per share amount payable to holders of our ordinary shares in the transaction over (B) any exercise price payable by the participant in connection with the award, multiplied by the number of vested shares subject to the award.

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A corporate transaction generally will be deemed to occur in the event of: (i) a sale of all or substantially all of our assets, (ii) the sale or disposition of at least 50% of our outstanding securities, (iii) the consummation of a merger or consolidation where we do not survive the transaction or (iv) the consummation of a merger or consolidation where we do survive the transaction but our ordinary shares outstanding prior to such transaction are converted or exchanged into other property by virtue of the transaction. In addition, any one or more of the above events may be effected pursuant to (x) a takeover under Irish Takeover Rules; (y) a compromise or arrangement under Chapter 1 of Part 9 of the Companies Act 2014 of the Republic of Ireland, or the 2014 Act or (z) Chapter 2 of Part 9 of the 2014 Act.

The board of directors need not take the same action or actions with respect to all awards or portions of awards or with respect to all participants.  The board of directors may take different actions with respect to the vested and unvested portions of an award.  

Notwithstanding the foregoing, if during the period beginning on the date that is 30 days prior to and ending on the date that is 12 months following the consummation of a corporate transaction that also qualifies as a “change in control” (as defined below), if a participant’s services to the Company (or its successor in the change in control) are involuntarily terminated without “cause” (as defined below) or a participant resigns service to the Company (or its successor in the change in control) in all capacities for “good reason” (as defined below), and, in either case other than as a result of the participant’s death or disability, then as of the date of the participant’s termination of service, the vesting and exercisability of any then-unvested award held by a participant will be accelerated in full.

A “change in control” for purposes of the 2018 Plan is defined, in summary, as (i) the acquisition by a person or a group of more than 50% of our outstanding shares other than by virtue of a merger or consolidation; (ii) our involvement in a merger, consolidation, or similar transaction, unless our shareholders prior to such event continue to own, in substantially the same proportions as before the transaction, more than 50% of the entity surviving such event; our shareholders or our board approves a plan of liquidation or dissolution or our complete dissolution or liquidation otherwise occurs; (iii) a sale or other disposition of all or substantially all of our assets (other than a sale to an entity more than 50% of which is owned by our shareholders in substantially the same proportions as their ownership of us immediately prior to such transaction); or (iv) a change, without approval by our board of directors, of a majority of our board of directors.  In addition, any one or more of the above events may be effected pursuant to (x) a compromise or arrangement sanctioned by the Irish courts under Section 450 of the 2014 Act, (y) a scheme, contract or offer which has become binding on all shareholders pursuant to Section 609 of the 2014 Act, or (z) a bid pursuant to Regulation 23 or 24 of the European Communities (Takeover Bids (Directive 2004/25/EC)) Regulations 2006.

“Cause” as used in the 2018 Plan has the meaning ascribed to such term in any written agreement between the participant and us defining such term but, in the absence of such a definition, means, in summary (i) the participant’s commission of a felony or crime involving fraud, dishonesty or moral turpitude; (ii) the participant’s attempted commission of, or participation in, a fraud or act of dishonesty against us or an affiliate of ours; (iii) the participant’s intentional, material violation of any contract or agreement between the participant and us or an affiliate of ours, of any statutory duty owed to us or an affiliate of ours; (iv) the participant’s unauthorized use or disclosure of our (or an affiliate’s) confidential information or trade secrets; or (v) the participant’s gross misconduct.  In addition, “good reason” as used in the 2018 Plan has the meaning ascribed to such term in any written agreement between the participant and us defining such term but, in the absence of such a definition, means, in summary, any of the following actions taken without the participant’s consent: (i) a material reduction of the participant’s base compensation, other than a reduction that applies generally to all executives; (ii) a material reduction in the participant’s authority, duties and responsibilities; (iii) failure or refusal of a successor of ours to materially assume our obligations under the participant’s offer letter and/or employment agreement, if applicable, in the event of a change in control; or (iv) a relocation of the participant’s principal place of employment that results in an increase in the participant’s one-way driving distance by more than 50 miles from the participant’s then current principal residence.  In addition, in order to resign for “good reason” a participant must provide written notice of the event giving rise to “good reason” to us within 90 days after the condition arises, allow us at least 30 days to cure such provision, and if we fail to cure the condition, resign from all positions not later than 90 days after the end of such cure period.

Our board of directors has the authority to amend, suspend, or terminate our 2018 Plan, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. Certain material

27

 


 

amendments also require the approval of our shareholders. No awards may be granted under our 2018 Plan while it is suspended or after it is terminated.

2015 Equity Incentive Plan

 

Our board of directors adopted, and our shareholders approved our 2015 Plan in November 2015. The 2015 Plan was amended most recently in May 2017. The 2015 Plan provided for the grant of ISOs, NSOs, restricted share awards, RSUs, SARs, and other share awards to our employees, directors and consultants.

 

Since the 2018 Plan became effective, we no longer grant awards under the 2015 Plan. However, any outstanding awards granted under the 2015 Plan remain outstanding, subject to the terms of the 2015 Plan and the applicable award agreements, until such outstanding share options are exercised or until they terminate or expire by their terms.

 

Authorized Shares. As of December 31, 2021, share options to purchase 112,557 ordinary shares were outstanding under our 2015 Plan, with a weighted-average exercise price of $3.31 per share. No other forms of awards were outstanding under the 2015 Plan as of December 31, 2021.

 

Plan Administration. Our 2015 Plan may be administered by our board of directors or another duly authorized committee. Our 2015 Plan is currently administered by our compensation committee. Our board of directors or another duly authorized committee has the authority to construe and interpret our 2015 Plan, amend the plan and outstanding awards and make all other determinations necessary or advisable for the administration of the plan, including, but not limited to, repricing share options or SARs without prior shareholder approval.

 

Corporate Transactions. Our 2015 Plan provides that in the event of a corporate transaction, each outstanding award will be treated as determined by our board of directors unless otherwise provided in an award agreement or other written agreement between us and the award holder. The board of directors may generally take the same actions as summarized above in connection with awards under the 2018 Plan, and the definition of a corporate transaction under the 2015 Plan is substantially the same as such defined term in the 2018 Plan.

 

Transferability. Awards granted under our 2015 Plan may not be transferred in any manner other than by will or by the laws of descent and distribution or as otherwise determined by our compensation committee or under the terms of our 2015 Plan or an applicable award agreement.

  

Plan Amendment or Termination. Our board of directors or another duly authorized committee has the authority to amend, suspend, or terminate our 2015 Plan, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. Certain material amendments also require the approval of our shareholders.

Health and Welfare Benefits

All of our named executive officers are eligible to participate in our employee benefit plans, including our medical, dental, and vision insurance plans, in each case on the same basis as all of our other full-time employees.

401(k) Plan

We maintain a defined contribution retirement plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees may defer eligible compensation on a pre-tax basis, up to the statutorily prescribed annual limits on contributions under the Code. Employee contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participant’s directions. Employees are immediately and fully vested in their contributions. The 401(k) plan is intended to be qualified under Section 401(a) of the Code with the 401(k) plan’s related trust intended to be tax exempt under Section 501(a) of the Code. As a tax-qualified retirement plan, contributions to the 401(k) plan and earnings on those contributions are not taxable to the employees until distributed from the 401(k) plan.  The Company historically made discretionary contributions to the 401(k) Plan for the benefit of certain employees excluding executive officers.

 

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Limitation on Liability and Indemnification of Directors and Officers

Our Articles of Association, and indemnification agreements with our board of directors and executive officers provide for indemnification for our directors and officers.

Rule 10b5-1 Sales Plans

Our directors and officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell ordinary shares on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or officer when entering into the plan, without further direction from them. The director or officer generally may amend a Rule 10b5-1 plan in some circumstances and may terminate a plan at any time. Our directors and executive officers also may generally buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material nonpublic information, subject to compliance with the terms of our insider trading policy.

 

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report of THE audit committee

 

In fulfilling its responsibilities for the financial statements for the fiscal year ended December 31, 2021, the audit committee took the following actions:

 

 

reviewed and discussed the audited financial statements for the fiscal year ended December 31, 2021 with management and KPMG, our independent registered public accounting firm;

 

 

discussed with KPMG the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) in accordance with Auditing Standard No. 1301, Communications with Audit Committees, and the SEC;

 

 

received the written disclosures and the letter from KPMG regarding its independence as required by applicable requirements of the PCAOB regarding KPMG’s communications with the audit committee and has discussed with KPMG their independence; and

 

 

considered the status of other areas of oversight relating to the financial reporting and audit process that the audit committee determined appropriate.

 

Based on the foregoing, the audit committee recommended to the board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for filing with the SEC.

 

 

Audit Committee

David G. Kelly (Chairman)

Brenton K. Ahrens

Mark Chin

Beth P. Hecht

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DELINQUENT SECTION 16(A) REPORTS

 

Section 16(a) of the Exchange Act requires our directors and executive officers, and holders of more than ten percent of our ordinary shares, to file with the SEC initial reports of ownership of our ordinary shares and other equity securities and reports of changes in ownership of our ordinary shares and other equity securities. Such executive officers, directors and holders of more than ten percent of our ordinary shares are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.

 

To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations regarding the filing of required reports, we believe that all Section 16(a) filing requirements applicable to our directors, executive officers and holders of more than ten percent of our ordinary shares, with respect to fiscal year ended December 31, 2021, were met except for one report on Form 3 for Ms. Hecht disclosing an initial statement of beneficial ownership of securities that was subsequently filed on April 21, 2021.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The following is a description of transactions since January 1, 2020, to which we have been a party, in which the amount involved exceeds $120,000, and in which any of our directors, executive officers or holders of more than 5% of our share capital, or an affiliate or immediate family member thereof, had or will have a direct or indirect material interest. We refer to such transactions as “related party transactions” and such persons as “related parties.” With the approval of our board of directors, we have engaged in the related party transactions described below. We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, from unaffiliated third parties.

Participation in Private Placement

On January 16, 2020, we entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) by and among, Iterum Therapeutics Bermuda Limited (“Iterum Bermuda”), us, Iterum Therapeutics International Limited, Iterum Therapeutics US Limited and Iterum Therapeutics US Holding Limited, as guarantors (collectively, the “Guarantors”) and a limited number of accredited investors (the “Private Placement Investors”) pursuant to which Iterum Bermuda sold and issued units in the aggregate original principal amount of $51.6 million, each unit consisting of (i) a 6.500% Exchangeable Senior Subordinated Notes due 2025, fully and unconditionally guaranteed on an unsecured senior subordinated basis by the Guarantors, in the original principal amount of $1,000.00 (the “Exchangeable Notes”), and (ii) 50 Limited Recourse Royalty-Linked Subordinated Notes, fully and unconditionally guaranteed on an unsecured senior subordinated basis by the Guarantors (the “Royalty-Linked Notes”, and together with the Exchangeable Notes, the “Units”), to the Private Placement Investors in a private placement (the “Private Placement”). The Private Placement Investors, including entities affiliated with Sarissa Capital Management LP and RA Capital Management and entities affiliated with certain members of our board of directors, including Brenton Ahrens, Ronald Hunt, and Mark Chin and former members of our board of directors, including James Healy, Robert Hopfner, Patrick Heron and Shahzad Malik, purchased an aggregate of 51,588 Units. The Units were sold at a price of $1,000 per Unit.

The Exchangeable Notes are exchangeable for our ordinary shares at an initial exchange rate of 1,000 shares per $1,000 of principal and interest on the Exchangeable Notes (equivalent to an initial exchange price of approximately $1.00 per ordinary share), subject to specified limitations. The Royalty-Linked Notes entitle holders to payments based on a percentage of our net revenues from potential U.S. sales of specified sulopenem products subject to the terms and conditions of the indenture governing the Royalty-Linked Notes (the “Royalty-Linked Notes Indenture”). Pursuant to the Royalty-Linked Notes Indenture, the payments on the Royalty-Linked Notes will be up to either 15% or 20% of net revenues from U.S. sales of such products, depending on the indication approved by the FDA. The aggregate amount of payments on each Royalty-Linked Note is capped at $160.00 (or 4,000 times the principal amount of such Royalty-Linked Note).

The table below sets forth the aggregate number of Units issued to our directors, executive officers or holders of more than 5% of our share capital, or an affiliate or immediate family member thereof, at the time of the transaction.

 

Name

Units Purchased (1)

Aggregate Purchase Price

Advent Life Sciences LLP (2)

53

              $53,000

Advent Life Sciences Fund II LP (2)

1,495

$1,495,000

Arix Bioscience Holdings Limited (3)

1,900

$1,900,000

Canaan X, L.P. (4)

2,000

$2,000,000

Frazier Healthcare VII, L.P. (5)

1,167

$1,167,000

Frazier Healthcare VII-A, L.P. (5)

333

$333,000

New Leaf Ventures III, L.P. (6)

2,208

$2,208,000

New Leaf Biopharma Opportunities II, L.P. (6)

792

$792,000

Sofinnova Venture Partners IX, L.P. (7)

1,750

$1,750,000

Domain Partners IX, L.P.

1,000

$1,000,000

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Pivotal bioVenture Partners Fund I, LP

700

$700,000

Total

13,398

$       13,398,000

 

 

(1)

Each Unit consists of (i) one Exchangeable Note and (ii) 50 Royalty-Linked Notes

 

(2)

Dr. Malik, a former member of our board of directors, is a general partner of Advent Life Sciences.

 

(3)

Mr. Chin, a member of our board of directors, was an investment director of Arix Bioscience at the time of the closing of the Private Placement.

 

(4)

Mr. Ahrens, a member of our board of directors, is a general partner of Canaan.

 

(5)

Mr. Heron, a former member of our board of directors, is a general partner of Frazier Healthcare Partners.

 

(6)

Mr. Hunt, a member of our board of directors, is a managing partner of New Leaf Venture Partners.

 

(7)

Dr. Healy, a former member of our board of directors, is a general partner of Sofinnova Ventures.

 

In connection with the Private Placement, we also entered into the 2020 Investor Rights Agreement with the Private Placement Investors (including certain of our directors and holders of more than 5% of our share capital, or an affiliate or immediate family member thereof, as listed above) pursuant to which Iterum Bermuda and the Guarantors agreed to file a registration statement covering (a) in the case of a registration statement on Form S-1, the resale of the Exchangeable Notes, the ordinary shares issuable in connection with the exchange of the Exchangeable Notes (the “Exchange Shares”) and the Royalty-Linked Notes or (b) in the case of a registration statement on Form S-3, the Exchange Shares (the securities in (a) and (b) together, the “Registrable Securities”). Under the 2020 Investor Rights Agreement, we agreed to file an initial registration statement covering the resale by the Private Placement Investors of their Registrable Securities, which registration statement on Form S-1 was filed in September 2020 and declared effective on October 6, 2020. If the registration statement covering the Registrable Securities ceases to be effective for resales of Registrable Securities for more than 60 consecutive days or for more than 120 days in any 12-month period, then, subject to the terms of the 2020 Investor Rights Agreement, additional interest will accrue on the Exchangeable Notes and the Royalty-Linked Notes.

The descriptions of our Securities Purchase Agreement, Exchangeable Notes Indenture, Royalty-Linked Notes Indenture and 2020 Investor Rights Agreement in this proxy statement are summaries, do not purport to be complete, and are qualified in their entirety by reference to the Securities Purchase Agreement, Exchangeable Notes Indenture, Royalty-Linked Notes and 2020 Investor Rights Agreement that were filed as Exhibits 10.25, 4.2, 4.4 and 10.26, respectively, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on March 12, 2020.

October 2020 Offering

On October 27, 2020, we completed a registered public offering in which we sold an aggregate of (i) 15,511,537 ordinary shares, $0.01 nominal value per share, (ii) pre-funded warrants exercisable for an aggregate of 11,411,539 ordinary shares and (iii) warrants exercisable for an aggregate of 20,192,307 ordinary shares. The ordinary shares and pre-funded warrants were each offered together with the warrants, but the ordinary shares and pre-funded warrants were issued separately from the warrants. The combined offering price was $0.65 per ordinary share and warrant and $0.64 per pre-funded warrant and warrant. Our net proceeds from this offering, after deducting placement agent fees and other offering expenses payable by us, were approximately $15.5 million. The warrants are exercisable upon issuance at a price of $0.65 per ordinary share, subject to adjustment in certain circumstances, and expire on October 27, 2025. The pre-funded warrants are exercisable upon issuance at a price of $0.01 per ordinary share, subject to adjustment in certain circumstances, and expire when exercised in full, subject to certain conditions.

Dr. Dunne, our former chief scientific officer and current member of the board of directors, purchased 61,540 ordinary shares and a warrant for 46,155 shares in the offering for an aggregate purchase price of $40,000.

2017 Investor Rights Agreement

In May 2017, we entered into an amended and restated investor rights agreement with holders of our preferred shares and ordinary shares, including certain holders of more than 5% of our share capital, our executive officers, certain of our directors, and entities affiliated with certain of our directors (the “2017 Investor Rights Agreement”). Since the

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closing of our initial public offering, those holders are entitled to certain registration rights, including the right to demand that we file a registration statement or request that their shares be covered by a registration statement that we are otherwise filing. The 2017 Investor Rights Agreement also gave the shareholders that are parties thereto the right to participate in new issuances of equity securities by us, subject to certain exceptions. This right to participate in new issuances of equity securities terminated by its terms upon the completion of our initial public offering in May 2018.

Arrangements with Executive Officers and Directors

For a description of the compensation arrangements that we have with our executive officers and directors, see “Executive Officer and Director Compensation-- Employment Agreements with Executive Officers” and “Executive Officer and Director Compensation— Non-Employee Director Compensation Policy.

Indemnification Agreements

We have entered into indemnification agreements with each of our directors and executive officers.  In addition, our subsidiary, Iterum Therapeutics US Limited, has entered into an indemnification agreement with each of our directors and executive officers. These agreements, among other things, require us to indemnify an indemnitee to the fullest extent permitted by applicable law, including indemnification of expenses such as attorneys’ fees, judgments, fines and settlement amounts incurred by the indemnitee in any action or proceeding, including any action or proceeding by us or in our right, arising out of the person’s services as a director or executive officer.   We also maintain a directors and officers liability insurance policy which covers certain liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers.

 

Consulting Agreement and Share Award Letter

 

Michael W. Dunne, M.D. served as our Chief Scientific Officer until he resigned in December 2020. Following Dr. Dunne’s resignation in December 2020, in February 2021, our subsidiary, Iterum Therapeutics International Limited (“ITIL”), entered into a consulting agreement with Dr. Dunne for the provision of general support and strategic advice in connection with our NDA. The commencement date for the purposes of the provision of the services pursuant to the consulting agreement was December 22, 2020, and the term was to end on September 30, 2021, unless extended by mutual agreement of the parties or terminated in accordance with the terms of the consulting agreement. Either party could terminate the consulting agreement with two months’ notice in writing to the other party. ITIL was to pay Dr. Dunne $16,900 per month pursuant to the consulting agreement and Dr. Dunne was also entitled to payments in an aggregate amount of up to $220,000 on the achievement of milestones set out in the consulting agreement, for so long as he continued to provide services thereunder on the occurrence of such milestones.  The consulting agreement was amended, effective September 30, 2021, to extend the term of the consulting agreement by three months, or until December 31, 2021.  The consulting agreement was further amended, effective as of December 31, 2021, to extend the term of the consulting agreement by a further three months, or until March 31, 2022, and to reduce the monthly service fee payable thereunder to $10,000 per month.  The consulting agreement terminated on March 31, 2021.  Dr. Dunne received $342,800 in 2021 for services provided pursuant to the consulting agreement.

 

In connection with his resignation as Chief Scientific Officer and the entry into the consulting agreement, the compensation committee approved certain changes to the terms and conditions of the share options and restricted share units granted to Dr. Dunne in his capacity as Chief Scientific Officer, as set out in a share award letter issued by the Company to Dr. Dunne on February 17, 2021, and accepted by him on February 21, 2021:

 

(1)

share option over 41,587 ordinary shares granted to Dr. Dunne on September 12, 2017, of which 7,798 ordinary shares underlying the share option remained unvested on the date of termination as Chief Scientific Officer (the “Termination Date”), shall be deemed to have vested in full on the Termination Date and be exercisable immediately therefrom until December 31, 2021, subject to the Service Condition (as defined below), which vested shares were not exercised and have since been forfeited;

 

 

(2)

share option granted to Dr. Dunne on May 24, 2018, of which 49,729 ordinary shares had vested on the Termination Date, may be exercised for a period of 90 days from the Termination Date, which vested shares were not exercised and have since been forfeited, and the remaining unvested shares were cancelled;

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(3)

share option granted to Dr. Dunne on February 15, 2019, of which 38,958 ordinary shares had vested on the Termination Date, may be exercised for a period of 90 days from the Termination Date, which vested shares were not exercised and have since been forfeited, and the remaining unvested ordinary shares were cancelled;

 

 

(4)

9,000 restricted share units granted to Dr. Dunne on February 15, 2019, subject to certain performance conditions, ceased to be eligible to vest from the Termination Date; and

 

 

(5)

160,000 restricted share units granted to Dr. Dunne on March 11, 2020 shall continue to be eligible to vest in accordance with the terms of the restricted share unit award agreement entered into by Dr. Dunne on March 19, 2020, upon the achievement of the performance conditions set out therein on or before September 30, 2021, subject to the Service Condition (as defined below) which vested shares were not exercised and have since been forfeited.

The “Service Condition” shall mean that Dr. Dunne’s service to the Company or an affiliate of the Company, whether as director or consultant, is not interrupted or terminated.

Related Party Transaction Policy

We have adopted a formal written policy that our executive officers, directors, key employees, holders of more than 5% of any class of our voting securities, and any member of the immediate family of and any entity affiliated with any of the foregoing persons, are not permitted to enter into a related-party transaction with us without the prior consent of our audit committee, or other independent body of our board of directors in the event it is inappropriate for our audit committee to review such transaction due to a conflict of interest. Any request for us to enter into a transaction with an executive officer, director, principal shareholder, or any of their immediate family members or affiliates, in which the amount involved exceeds $120,000, is required to first be presented to our audit committee for review, consideration, and approval. In approving or rejecting any such proposal, our audit committee will consider the relevant facts and circumstances available and deemed relevant to our audit committee, including, but not limited to, whether the transaction will be on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related party’s interest in the transaction.

Some of the transactions described in this section were entered into prior to the adoption of this policy. Although we did not have a written policy for the review and approval of transactions with related persons prior to May 2018, our board of directors has historically reviewed and approved any transaction where a director or officer had a financial interest, including the relevant transactions described above. Prior to approving such a transaction, the material facts as to a director’s or officer’s relationship or interest in the agreement or transaction were disclosed to our board of directors. Our board of directors took this information into account when evaluating the transaction and in determining whether such transaction was fair to us and in the best interest of all our shareholders.

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MATTERS TO COME BEFORE THE ANNUAL GENERAL MEETING

PROPOSAL NO 1: ELECTION OF CLASS I DIRECTORS

Based upon the recommendation of the nominating and corporate governance committee of our board of directors, our board of directors has nominated Mark Chin and David G. Kelly for re-election at the AGM as Class I directors for a term of three years to serve until the 2025 annual general meeting of shareholders, subject to each such nominee’s prior death, resignation, retirement, disqualification or removal.  

Unless otherwise instructed in the proxy, all proxies will be voted "FOR" the election of each of the nominees identified above. Each of the nominees has indicated his willingness to serve on our board of directors, if elected. If any nominee should be unable to serve, the person acting under the proxy may vote the proxy for a substitute nominee designated by our board of directors. We do not contemplate that any of the nominees will be unable to serve if elected. Proxies cannot be voted for a greater number of persons than the number of nominees named in this proposal.

In order to be elected as a director, each nominee must receive the affirmative vote of a majority of the votes cast at the AGM.

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF MARK CHIN AND DAVID G. KELLY AS CLASS I DIRECTORS. 

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PROPOSAL NO. 2: TO RATIFY, IN A NON-BINDING VOTE, THE APPOINTMENT OF KPMG TO SERVE AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDED DECEMBER 31, 2022 AND TO AUTHORIZE THE BOARD OF DIRECTORS, ACTING THROUGH THE AUDIT COMMITTEE, TO SET THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S REMUNERATION.

The audit committee has appointed KPMG as our independent registered public accounting firm, to audit our financial statements for the fiscal year ending December 31, 2022.  KPMG has served as our independent registered public accounting firm for the fiscal year ended December 31, 2021. Representatives of KPMG are expected to be present in person or telephonically at the AGM and will have the opportunity to make a statement if they desire to do so. It is also expected that they will be available to respond to appropriate questions from shareholders.

In deciding to appoint KPMG, the audit committee reviewed auditor independence issues and existing commercial relationships with KPMG and concluded that KPMG has no commercial relationship with the Company that would impair its independence for the fiscal year ending December 31, 2022.

The following table presents fees for professional audit services and other services rendered by KPMG to us for the fiscal years ended December 31, 2021 and 2020:

 

 

 

Year Ended December 31, 2021

 

 

Year Ended December 31, 2020

 

Audit fees (1)

 

$

297,110

 

 

$

348,240

 

Audit-related fees (2)

 

 

 

 

 

 

Tax fees (3)

 

 

60,209

 

 

 

92,068

 

All other fees

 

 

 

 

 

 

 

 

$

357,319

 

 

$

440,308

 

 

 

 

 

 

 

 

 

 

(1) “Audit Fees” consist of fees billed for professional services performed by KPMG for the audit of our annual financial statements, the review of interim financial statements, and related services that are normally provided in connection with our public offerings and registration statements on Form S-1, Form S-3 and Form S-8.

 

(2) “Audit-related fees” consist of fees billed by an independent registered public accounting firm for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements.

 

(3) “Tax fees” consist of fees for professional services, including tax consulting and compliance performed by KPMG.

 

 

All of these services were pre-approved by the audit committee in accordance with the “Policy on Audit Committee Pre-Approval of Services” described below.  No work carried out in connection with the audit of our financial statements was performed by persons other than KPMG’s full time, permanent employees.

Policy on Audit Committee Pre-Approval of Services

Consistent with SEC policies regarding auditor independence, the audit committee has responsibility for appointing, setting compensation and overseeing the work of our independent registered public accounting firm. In recognition of this responsibility, the audit committee reviews and pre-approves all audit and permissible non-audit services provided by our independent registered public accounting firm; provided, however, that de minimis non-audit services may instead be approved in accordance with applicable SEC rules.

Our board of directors is seeking shareholder ratification of the appointment by the audit committee of KPMG to serve as our independent registered public accounting firm and the authorization of the board of directors, acting through the audit committee, to set the auditor's remuneration. If this proposal is not approved at the AGM, our audit committee may reconsider this selection.

The affirmative vote of a majority of the votes cast at the AGM is required for this proposal.

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2022 AND THE AUTHORIZATION OF THE BOARD OF

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DIRECTORS, ACTING THROUGH THE AUDIT COMMITTEE, TO SET THE AUDITOR'S REMUNERATION.

 

 

 


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PROPOSAL NO. 3 — REVERSE SHARE SPLIT PROPOSAL

Background to and Reasons for the Reverse Share Split Proposal

Our board of directors is seeking approval for a reverse share split with the primary purpose of increasing the price of our ordinary shares in order to meet the price criteria for continued listing on the Nasdaq Capital Market, or Nasdaq, if our board of directors determines that it is necessary to do so by implementing a reverse share split.

On September 7, 2021, we received written notice from Nasdaq, notifying us that, for the previous 30 consecutive business days, the bid price for our ordinary shares had closed below the minimum $1.00 per share requirement for continued inclusion on Nasdaq pursuant to Nasdaq Listing Rule 5550(a)(2) to maintain a minimum bid price of $1.00 per share (the “Bid Price Rule”). Under Nasdaq Listing Rule 5810(c)(3)(A), we had a period of 180 calendar days, or until March 7, 2022, to regain compliance with the Bid Price Rule.  To regain compliance during this 180-day compliance period, the closing bid price of our ordinary shares had to be at least $1.00 for a minimum of 10 consecutive business days.

Subsequently, on March 9, 2022 we were granted an additional 180-day compliance period, or until September 5, 2022 (the “Extended Compliance Date”), in which to regain compliance with the Bid Price Rule after meeting the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq, with the exception of the Bid Price Rule, and providing written notice to Nasdaq of our intention to cure the deficiency during the second compliance period, by effecting a reverse share split, if necessary. If we are not able to cure the deficiency during the additional compliance period, we will receive written notification from Nasdaq that our ordinary shares are subject to delisting.  At that time, we may appeal the relevant delisting determination to a hearings panel pursuant to the procedures set forth in the applicable Nasdaq Listing Rules.  However, there can be no assurance that, if we do appeal the delisting determination by Nasdaq to the panel, that such appeal would be successful.

In the event we are delisted from Nasdaq, the only established trading market for our ordinary shares would be eliminated and we would be forced to list our shares on the OTC Markets or another quotation medium, depending on our ability to meet the specific listing requirements of those quotation systems. As a result, an investor would likely find it more difficult to trade, or to obtain accurate price quotations for, our shares. Delisting would likely also reduce the visibility, liquidity and value of our ordinary shares, including as a result of reduced institutional investor interest in our Company, and may increase the volatility of our ordinary shares. Delisting could also cause a loss of confidence of potential industry partners, lenders and employees, which could further harm our business and our future prospects. The delisting of our ordinary shares from Nasdaq could also negatively impact our financial condition as it would constitute a fundamental change under the indenture governing the 6.500% Exchangeable Senior Subordinated Notes due 2025 (“Exchangeable Notes”), which could trigger an obligation for us to repurchase the Exchangeable Notes at a repurchase price of 300% of the principal amount of the outstanding Exchangeable Notes, plus any accrued but unpaid interest. We believe that effecting a reverse share split may, if necessary, help us avoid delisting from Nasdaq and any resulting consequences.

Accordingly, on April 8, 2022, our board of directors unanimously approved a shareholder proposal to approve a reverse share split of our share capital by way of consolidation of every 15 ordinary shares of $0.01 (nominal value) each in the authorized but unissued and in the authorized and issued share capital of the Company into 1 ordinary share of $0.15 (nominal value), and the subsequent immediate (i) reduction in the nominal value of each of the authorized but unissued and authorized and issued ordinary shares from $0.15 each to $0.01 each and (ii) increase in the authorized ordinary share capital in order to round up the authorized share capital to an even number following the consolidation (the “Reverse Share Split”).  The implementation of the Reverse Share Split is subject to and conditional upon our board of directors determining, in its sole discretion, that a reverse share split is necessary for us to comply with the Bid Price Rule. If we have regained compliance with the Bid Price Rule within the time permitted by Nasdaq, for example, due to the increase in our share price for a minimum of 10 consecutive business days on or before the Extended Compliance Date, our board of directors may still determine to implement the Reverse Share Split if it considers that it would be necessary to do so in order to maintain compliance with the Bid Price Rule. However, in no event will the Reverse Share Split occur after the date of our annual general meeting of shareholders in 2023. If our board of directors does not determine that a reverse share split is necessary for us to comply with the

39

 


 

Bid Price Rule prior to the date of our annual general meeting of shareholders in 2023, our board of directors will be deemed to have abandoned the Reverse Share Split.

 

In addition to enabling us to comply with the Bid Price Rule, our board of directors believes that, if the Reverse Share Split is implemented, the expected increased share price could encourage investor interest and improve the marketability of our ordinary shares to a broader range of investors, and thus enhance our liquidity. Because of the trading volatility often associated with low-priced shares, many brokerage firms and institutional investors have internal policies and practices that either prohibit them from investing in low-priced shares or tend to discourage individual brokers from recommending low-priced shares to their customers. Additionally, because brokers' commissions on low-priced shares generally represent a higher percentage of the share price than commissions on higher-priced shares, the current share price of our ordinary shares may result in an investor paying transaction costs that represent a higher percentage of total share value than would be the case if our share price were higher. Our board of directors believes that the higher share price that may result from the Reverse Share Split, if implemented, could enable institutional investors and brokerage firms with such policies and practices to invest in our ordinary shares.

 

Although we expect that the Reverse Share Split, if implemented, will result in an increase in the market price of our ordinary shares, the Reverse Share Split may not result in a permanent increase in the market price of our ordinary shares, which would be dependent on many factors, including general economic, market and industry conditions and other factors detailed from time to time in the reports we file with the SEC.

 

In evaluating the Reverse Share Split Proposal, our board of directors has taken into consideration negative factors associated with reverse share splits. These factors include the negative perception of reverse share splits held by many investors, analysts and other stock market participants, as well as the fact that the stock price of some companies that have effected reverse share splits has subsequently declined back to pre-reverse share split levels. In recommending the Reverse Share Split Proposal, our board of directors determined that these potential negative factors were significantly outweighed by the potential benefits.

 

OUR BOARD OF DIRECTORS, IN ITS SOLE DISCRETION AND WITHOUT FURTHER SHAREHOLDER APPROVAL, MAY DECIDE NOT TO PROCEED WITH IMPLEMENTING, AND MAY ABANDON, THE REVERSE SHARE SPLIT.

Certain Risks Associated with the Reverse Share Split

There can be no assurance that the total market capitalization of our ordinary shares after the proposed Reverse Share Split, if implemented, will be equal to or greater than the total market capitalization before the proposed Reverse Share Split or that the per share market price of our ordinary shares following the proposed Reverse Share Split will increase in proportion to the reduction in the number of our ordinary shares outstanding in connection with the proposed Reverse Share Split. Also, we cannot assure you that the proposed Reverse Share Split, if implemented, would lead to a sustained increase in the trading price of our ordinary shares. The trading price of our ordinary shares may change due to a variety of other factors, including our ability to successfully accomplish our business goals, market conditions and the market perception of our business. You should also keep in mind that the proposed Reverse Share Split, if implemented, will not have an effect on the actual or intrinsic value of our business or a shareholder's proportional ownership in our Company (subject to the treatment of fractional shares). However, should the overall value of our ordinary shares decline after the proposed Reverse Share Split, if implemented, then the actual or intrinsic value of the ordinary shares held by you will also proportionately decrease as a result of the overall decline in value.

Further, the liquidity of our ordinary shares may be harmed by the proposed Reverse Share Split, if implemented, given the reduced number of shares that would be outstanding after the Reverse Share Split, particularly if the expected increase in share price as a result of the Reverse Share Split is not sustained. For instance, the proposed Reverse Share Split, if implemented, may increase the number of shareholders who own odd lots (less than 100) of our ordinary shares, creating the potential for such shareholders to experience an increase in the cost of selling their shares and greater difficulty effecting sales. If the Reverse Share Split is implemented, the resulting per-share price may nevertheless fail to attract institutional investors and may not satisfy the investing guidelines of such investors and, consequently, the trading liquidity of our ordinary shares may not improve.

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While our board of directors has proposed the Reverse Share Split Proposal for the purpose of enabling us to bring or maintain the price of our ordinary shares above $1.00 per share in order to comply with the requirements for the continued listing of our ordinary shares on Nasdaq, if the Reverse Share Split is implemented, there is no guarantee that the price of our ordinary shares will not decrease in the future, or that our ordinary shares will remain in compliance with Nasdaq listing standards. Additionally, there can be no guarantee that the closing bid price of our ordinary shares will remain at or above $1.00 for 10 consecutive trading days, whether following the implementation of the Reverse Share Split or otherwise, which is required to cure our current Nasdaq listing standard deficiency.

Effect of the Reverse Share Split

If the Reverse Share Split Proposal is approved by our shareholders and our board of directors determines that it is necessary to implement the Reverse Share Split for us to comply with the Bid Price Rule, with effect from implementation of the Reverse Share Split, the number of our authorized and issued ordinary shares will be reduced in proportion to the ratio of 15:1. As of the effective time of the Reverse Share Split, we would also adjust and proportionately decrease the number of our ordinary shares reserved for issuance upon exercise of, and adjust and proportionately increase the exercise price of, all share options, Exchangeable Notes, warrants and other rights to acquire our ordinary shares; we would also adjust and proportionately decrease the number of our ordinary shares that would be issued upon vesting of outstanding restricted share unit awards. In addition, as of the effective time of the Reverse Share Split, we would adjust and proportionately decrease the total number of our ordinary shares that may be the subject of future grants under our share plans. The proposed Reverse Share Split, if implemented, would also proportionately reduce the number of authorized and unissued ordinary shares under our memorandum and articles of association. Following the implementation of the Reverse Share Split, we would be required to file an amended memorandum and articles of association with the Irish Companies Registration Office to reflect the Reverse Share Split. A form of amended memorandum and articles of association, to reflect the Reverse Share Split, if implemented, is attached to this proxy statement as Appendix A.

The Reverse Share Split would, if implemented, be effected simultaneously for all of our issued and outstanding ordinary shares. The Reverse Share Split would affect all of our shareholders uniformly and would not change any shareholder's percentage ownership interest in our company, except to the extent that the Reverse Share Split would result in any of our shareholders owning fractional shares. We will not issue any fractional shares as a result of the Reverse Share Split and in lieu thereof, to the extent that we have the ability to aggregate and sell such shares on the market (see further below under "—Fractional Shares"), any shareholders that would otherwise be entitled to receive a fractional share will be entitled to receive a cash payment in an amount equal to the net cash proceeds attributable to the sale of such fractional entitlement following the aggregation and sale by the Company on behalf of each of the relevant shareholders of all of our ordinary shares that they would otherwise be entitled to receive, on the basis of prevailing market prices at such time. In connection with such proportionate adjustments, the number of ordinary shares issuable upon exercise of outstanding share options or vesting of restricted share units will be rounded down to the nearest whole share, the exercise prices of share options will be rounded up to the nearest cent, and no cash payment will be made in respect of such rounding.  The Reverse Share Split, if implemented, would not change the rights attaching to our ordinary shares. The Reverse Share Split, if implemented, is not intended as, and would not have the effect of, a "going private transaction" covered by Rule 13e-3 under the Securities Exchange Act of 1934 (the "Exchange Act"). Following the Reverse Share Split, if implemented, we would continue to be subject to the periodic reporting requirements of the Exchange Act.

After the effective time of the Reverse Share Split, if implemented, our ordinary shares will have a new Committee on Uniform Securities Identification Procedures (“CUSIP”) number, which is a number used to identify our equity securities, and share certificates with the older CUSIP numbers (if any) will need to be exchanged for share certificates with the new CUSIP numbers by following the procedures described below.

The following table sets forth (i) the number of our ordinary shares that would be authorized and issued, (ii) the number of our ordinary shares that would be reserved for issuance pursuant to outstanding share options, warrants, Exchangeable Notes (not including any ordinary shares issuable upon physical settlement for any accrued but unpaid interest) and restricted share units, and (iii) the weighted-average exercise price of outstanding share options and warrants, in each case assuming the Reverse Share Split were implemented as of March 31, 2022, not taking into

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account any adjustments for fractional shares that it is necessary to cancel (see further below under "—Fractional Shares").

 

Before Reverse Share Split

 

Following Reverse Share Split

 

 Number of Ordinary Shares Authorized and Issued

 

183,353,418

 

 

12,223,561

 

 Number of Ordinary Shares Reserved for Issuance Pursuant to Outstanding Share Options, Warrants, Exchangeable Notes and Restricted Share Units

 

40,882,906

 

 

2,725,527

 

 Weighted-Average Exercise Price of Outstanding Share Options and Warrants

$

1.87

 

$

28.06

 

Our directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in the Reverse Share Split Proposal, except to the extent of their ownership of our ordinary shares and securities convertible into, settleable in, or exercisable for our ordinary shares, which shares and securities would be subject to the same proportionate adjustment in accordance with the terms of the Reverse Share Split Proposal as all of our other outstanding ordinary shares and securities convertible into, settleable in, or exercisable for our ordinary shares.

Authorized Share Capital  

At the date of this proxy statement, our authorized share capital is US$4,000,000 divided into 300,000,000 ordinary shares of $0.01 (nominal value) each and 100,000,000 preferred shares of US$0.01 (nominal value) each. If the Reverse Share Split Proposal is approved and our board of directors determines, in its sole discretion, that a reverse share split is necessary for us to comply with the Bid Price Rule, the number of ordinary shares of our authorized share capital would decrease by approximately 280,000,000, adjusted for any fractional shares which it is necessary to cancel (see further below under "—Fractional Shares"). Consequently, following the increase in the authorized ordinary share capital in order to round up the authorized share capital to an even number, our authorized share capital would be US$1,200,000 divided into 20,000,000 ordinary shares of $0.01 (nominal value) each and 100,000,000 preferred shares of $0.01 (nominal value) each. The Reverse Share Split, if implemented, will not change the number of authorized preferred shares.

Procedure for Effecting a Reverse Share Split and Exchange of Share Certificates

If shareholders approve the Reverse Share Split Proposal, and our board of directors determines, in its sole discretion, that a reverse share split is necessary for us to comply with the Bid Price Rule, we will publicly announce our intention to proceed with the Reverse Share Split. Such announcement will specify the effective time and date of the Reverse Share Split.

Beginning at the effective time, each certificate representing ordinary shares will be deemed for all corporate purposes to evidence ownership of the number of whole shares into which the shares previously represented by the certificate were combined pursuant to the Reverse Share Split. Following the effective time of the Reverse Share Split, if implemented, shareholders holding physical certificates, if any, would need to exchange those certificates and would receive a replacement physical certificate for the whole number of certificated shares owned after the effect of the Reverse Share Split and a cash payment in lieu of any fractional shares. Our ordinary shares will also receive a new CUSIP number.

If the Reverse Share Split is implemented, our transfer agent will advise shareholders holding certificates of the procedures to be followed to exchange certificates in a letter of transmittal to be sent to shareholders. No written confirmations will be issued to a shareholder until the shareholder has surrendered the shareholder's outstanding certificate(s), together with the properly completed and executed letter of transmittal, to our transfer agent. Any old shares submitted for transfer, whether pursuant to a sale, other disposition or otherwise, will automatically be exchanged for new shares. Shareholders should not destroy any share certificate(s) and should not submit any certificate(s) until requested to do so.

Certain of our registered shareholders hold some or all of their shares electronically in book-entry form with our transfer agent. These shareholders do not hold physical certificates evidencing their ownership of our ordinary shares. However, they are provided with a statement reflecting the number of our ordinary shares registered in their accounts.

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If a shareholder holds ordinary shares in book-entry form with our transfer agent, no action needs to be taken to receive post-Reverse Share Split shares or payment in lieu of fractional shares, if applicable. If a shareholder is entitled to post-Reverse Share Split shares, a transaction statement will automatically be sent to the shareholder's address of record indicating the number of our ordinary shares held following the Reverse Share Split.

If the Reverse Share Split is implemented, we intend to treat shareholders holding our ordinary shares in "street name," through a broker, bank or other nominee, in the same manner as registered shareholders whose shares are registered in their names. Brokers, banks or other nominees will be instructed to effect a reverse share split for their beneficial holders holding our ordinary shares in "street name." However, these brokers, banks or other nominees may have different procedures than registered shareholders for processing a reverse share split. If you hold your shares with a broker, bank or other nominee and if you have any questions in this regard, we encourage you to contact your nominee.  

Fractional Shares  

We will not issue fractional shares in connection with the Reverse Share Split, if implemented. Instead, we will aggregate the fractional entitlements of shareholders who otherwise would be entitled to receive fractional shares because they hold a number of shares not evenly divisible by 15, or because they hold less than 15 ordinary shares and, to the extent possible, sell such ordinary shares on the basis of prevailing market prices at such time. We will subsequently remit the proceeds of such sales, after deducting any applicable costs, to the shareholders who otherwise would be entitled to receive fractional shares and such shareholders will be entitled to receive a cash payment in lieu of such fractional entitlement in an amount equal to the net cash proceeds attributable to the sale of such fractional entitlement. Each (if any) of the authorized and issued ordinary shares of $0.01 (nominal value) each that cannot be consolidated into 1 ordinary share of $0.15 (nominal value) each shall, immediately following the effective time of the Reverse Share Split, be acquired by us from the shareholders otherwise entitled thereto for no consideration and be cancelled.

No Appraisal Rights

No action is proposed herein for which the laws of Ireland, or our constitution, provide a right to our shareholders to dissent and obtain appraisal of, or payment for, such shareholder's ordinary shares.

Reduction in the Nominal Value of the Ordinary Shares and Accounting Matters

If the Reverse Share Split is implemented, the nominal value per share of our ordinary shares will be consolidated from $0.01 to $0.15, and subsequently immediately reduced from $0.15 to $0.01 nominal value per share. Subject to non-material adjustments to cater for the cancellation of remaining fractional entitlements, the consolidation would not affect the total ordinary shareholders' equity on the balance sheet, although it would result in the share capital attributable to ordinary shares decreasing and the undenominated capital increasing. If the Reverse Share Split is implemented, reported per-share net income or loss and net book value would be higher because there would be fewer ordinary shares issued and outstanding and we would plan to adjust historical per share amounts set forth in our future financial statements.

Material U.S. Federal Income Tax Consequences of the Reverse Share Split

The following discussion is a summary of the material U.S. federal income tax consequences of the proposed Reverse Share Split to us and to U.S. Holders (as defined below) that hold our ordinary shares as capital assets for U.S. federal income tax purposes (generally, property held for investment). This discussion is based on the Internal Revenue Code of 1986, as amended, which we refer to as the Code, U.S. Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the U.S. Internal Revenue Service, which we refer to as the IRS, in each case in effect as of the date of this proxy statement. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a U.S. Holder. We have not sought and will not seek any rulings from the IRS regarding the matters discussed below and there can be no assurance the IRS or a court will not take a contrary position to that discussed below regarding the tax consequences of the proposed Reverse Share Split.

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For purposes of this discussion, a "U.S. Holder" is a beneficial owner of our ordinary shares that, for U.S. federal income tax purposes, is or is treated as (i) an individual who is a citizen or resident of the United States; (ii) a corporation (or any other entity or arrangement treated as a corporation) created or organized under the laws of the United States, any state thereof, or the District of Columbia; (iii) an estate, the income of which is subject to U.S. federal income tax regardless of its source; or (iv) a trust if (1) its administration is subject to the primary supervision of a court within the United States and all of its substantial decisions are subject to the control of one or more "United States persons" (within the meaning of Section 7701(a)(30) of the Code), or (2) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.

This discussion does not address all U.S. federal income tax consequences relevant to the particular circumstances of a U.S. Holder, including the impact of the Medicare contribution tax on net investment income.

In addition, it does not address consequences relevant to U.S. Holders that are subject to special rules, including, without limitation, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, grantor trusts, tax-exempt organizations, dealers or traders in securities, commodities or currencies, shareholders who hold our ordinary shares as part of a position in a straddle or as part of a hedging, conversion or integrated transaction for U.S. federal income tax purposes, persons whose functional currency is not the U.S. dollar, or U.S. Holders who actually or constructively own 10% or more of our voting shares.

If a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) is the beneficial owner of our ordinary shares, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. Accordingly, partnerships (and other entities treated as partnerships for U.S. federal income tax purposes) holding our ordinary shares and the partners in such entities should consult their own tax advisors regarding the U.S. federal income tax consequences of the proposed Reverse Share Split, if implemented, to them.

In addition, the following discussion does not address the U.S. federal estate and gift tax, alternative minimum tax, or state, local and non-U.S. tax law consequences of the proposed Reverse Share Split, if implemented. Furthermore, the following discussion does not address any tax consequences of transactions effectuated before, after or at the same time as the proposed Reverse Share Split, if implemented, whether or not they are in connection with the proposed Reverse Share Split. This discussion should not be considered as tax or investment advice, and the tax consequences of the proposed Reverse Share Split, if implemented, may not be the same for all shareholders.

Each shareholder should consult his, her or its own tax advisors concerning the particular U.S. federal tax consequences of the proposed Reverse Share Split, if implemented, as well as the consequences arising under the laws of any other taxing jurisdiction, including any state, local or foreign tax consequences.

Tax Consequences to the Company. The proposed Reverse Share Split is intended to be treated as a "recapitalization" pursuant to Section 368(a)(1)(E) of the Code. As a result, we should not recognize taxable income, gain or loss in connection with the proposed Reverse Share Split.

Tax Consequences to U.S. Holders. A U.S. Holder generally should not recognize gain or loss upon the proposed Reverse Share Split for U.S. federal income tax purposes, except with respect to cash received in lieu of a fractional ordinary share, as discussed below. A U.S. Holder's aggregate adjusted tax basis in the ordinary shares received pursuant to the proposed Reverse Share Split should equal the aggregate adjusted tax basis of our ordinary shares exchanged therefor (reduced by the amount of such basis that is allocated to any fractional ordinary share for which the U.S. Holder receives cash). The U.S. Holder's holding period in our ordinary shares received pursuant to the proposed Reverse Share Split should include the holding period in our ordinary shares exchanged therefor. U.S. Treasury Regulations provide detailed rules for allocating the tax basis and holding period of ordinary shares surrendered in a recapitalization to shares received in the recapitalization. U.S. Holders of our ordinary shares acquired on different dates and at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.

A U.S. Holder that, pursuant to the proposed Reverse Share Split, receives cash in lieu of a fractional ordinary share should recognize capital gain or loss in an amount equal to the difference, if any, between the amount of cash received

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and the portion of the U.S. Holder's aggregate adjusted tax basis in the ordinary shares surrendered that is allocated to such fractional share. Such capital gain or loss will be short term if the pre-Reverse Share Split shares were held for one year or less at the effective time of the Reverse Share Split and long term if held for more than one year.

A U.S. Holder of our ordinary shares may be subject to information reporting and backup withholding on cash paid in lieu of a fractional share in connection with the proposed Reverse Share Split. A U.S. Holder of our ordinary shares will be subject to backup withholding if such U.S. Holder is not otherwise exempt and such U.S. Holder does not provide its taxpayer identification number in the manner required or otherwise fails to comply with applicable backup withholding tax rules. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or allowed as a credit against a U.S. Holder's federal income tax liability, if any, provided the required information is timely furnished to the IRS. U.S. Holders of our ordinary shares should consult their own tax advisors regarding their qualification for an exemption from backup withholding and the procedures for obtaining such an exemption.

The U.S. federal income tax discussion set forth above does not discuss all aspects of U.S. federal income taxation that may be relevant to a particular shareholder in light of such shareholder's circumstances and income tax situation. Accordingly, we urge you to consult with your own tax advisor with respect to all of the potential U.S. federal, state, local and foreign tax consequences to you of the proposed Reverse Share Split, if implemented.

   
Material Irish Tax Consequences of the Reverse Share Split

The following is a summary of the material Irish tax consequences of the proposed Reverse Share Split, if implemented, for beneficial holders of our ordinary shares. The summary does not purport to be a comprehensive description of all of the tax considerations that may be relevant to each shareholder. The summary is based upon Irish tax laws and the practice of the Irish Revenue Commissioners in effect on the date of this proxy statement. Changes in law and/or administrative practice may result in alteration of the tax considerations described below, possibly with retrospective effect.

The summary does not constitute legal or tax advice and is intended only as a general guide. The summary is not exhaustive and shareholders should consult their own tax advisors about the Irish tax consequences (and tax consequences under the laws of other relevant jurisdictions) of the proposed Reverse Share Split, if implemented. The summary applies only to shareholders who hold their ordinary shares as capital assets and does not apply to other categories of shareholders, such as dealers in securities, trustees, insurance companies, collective investment schemes and shareholders who acquired their ordinary shares, or who have, or who are deemed to have, acquired their ordinary shares by virtue of an Irish office or employment (performed or carried on in Ireland). Such persons may be subject to special rules.

Irish Tax on Chargeable Gains

The current rate of tax on chargeable gains (where applicable) in Ireland is 33%.

Non-Irish Resident Shareholders

Shareholders that are not resident or ordinarily resident in Ireland and who do not hold our ordinary shares in connection with a trade or business carried on by them through a branch or agency in Ireland will not be subject to Irish tax on chargeable gains as a result of the proposed Reverse Share Split, if implemented.

Irish Resident Shareholders

Shareholders that are resident or ordinarily resident in Ireland for tax purposes or shareholders that hold their ordinary shares in connection with a trade or business carried on through a branch or agency in Ireland will, subject to the availability of any exemptions or reliefs, be within the charge to Irish tax on chargeable gains on the consolidation of their existing ordinary shares pursuant to the proposed Reverse Share Split, if implemented. Such shareholders should consult their own tax advisors on the Irish tax consequences of the proposed Reverse Share Split, if implemented.

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The proposed Reverse Share Split will be intended, if implemented, to be treated as a "reorganization" of our share capital and, accordingly, should not result in a disposal by any such shareholder of any of our ordinary shares, except with respect to cash received in lieu of a fractional ordinary share, as discussed below. Instead, the ordinary shares held after the proposed Reverse Share Split should be treated as the same asset and as having been acquired at the same time and for the same consideration as the ordinary shares held before the Reverse Share Split (adjusted for any part of the consideration attributable to the part disposal in respect of the receipt of cash in lieu of a fractional ordinary share).

The receipt by such a shareholder of any cash in lieu of a fractional ordinary share should be treated as a part disposal of his or her ordinary shares for Irish tax on chargeable gains in respect of the cash consideration received.

Stamp Duty

The rate of stamp duty (where applicable) on transfers of shares of Irish incorporated companies is 1% of the price paid or the market value of the shares acquired, whichever is greater. Irish stamp duty should not arise as a result of the Reverse Share Split, if implemented.

THE IRISH TAX CONSIDERATIONS SUMMARIZED ABOVE ARE FOR GENERAL INFORMATION ONLY. HOLDERS OF OUR ORDINARY SHARES SHOULD CONSULT WITH THEIR TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF THE REVERSE SHARE SPLIT, IF IMPLEMENTED, IN IRELAND.

Proposed Resolution

In light of the foregoing, the Board recommends that you vote in favor of the following resolution at the AGM:

RESOLVED, as an ordinary resolution, subject to and conditional upon the board of directors of the Company determining, in its sole discretion, at any time prior to the 2023 annual general meeting of the Company, that the Reverse Share Split is necessary for the Company to comply with the minimum $1.00 per share requirement pursuant to Nasdaq Listing Rule 5550(a)(2) (the Bid Price Rule):

 

i.

THAT, every 15 authorized but unissued ordinary shares of $0.01 (nominal value) each in the capital of the Company be consolidated with effect from such time and date as shall be determined by the board of directors of the Company (the "Effective Time") into 1 ordinary share of $0.15 (nominal value) each in the capital of the Company, provided that, where such consolidation would otherwise result in a fraction of an unissued consolidated ordinary share of $0.15 (nominal value) each, the number of existing unissued ordinary shares of $0.01 (nominal value) each  that would otherwise constitute such fraction be cancelled, with effect from the Effective Time, pursuant to section 83(1)(f)(ii) of the Irish Companies Act 2014;

 

 

ii.

THAT, every 15 authorized and issued ordinary shares of $0.01 (nominal value) each in the capital of the Company be consolidated, with effect from the Effective Time, into 1 ordinary share of $0.15 (nominal value) each, provided that, (1) where such consolidation would otherwise result in a shareholder being entitled to a fraction of an ordinary share of $0.15 (nominal value) each, such fraction shall, so far as possible, be aggregated and consolidated with the fractions of a consolidated ordinary share of $0.15 (nominal value) each to which other shareholders would otherwise be entitled and the board of directors of the Company be authorized to sell (or appoint any other person to sell) to any person, on behalf of the relevant shareholders, all the consolidated ordinary shares representing such fractions at the best price reasonably obtainable, (2) the net proceeds of any such sale shall be remitted in due proportion to the shareholders who would have been entitled to the fractions, (3) any director of the Company (or any person appointed by the board of directors of the Company) be authorized to execute an instrument of transfer in respect of such shares on behalf of the relevant shareholders and to do all acts and things the directors consider necessary or desirable to effect the transfer of such shares to, or in accordance with the directions of, any buyer of any such share; and (4) each (if any) of the authorized and issued ordinary shares of $0.01 (nominal value)

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each that cannot be consolidated into 1 ordinary share of $0.15 (nominal value) each, including pursuant to (1) above be, with effect from the Effective Time, immediately acquired by the Company from the shareholders otherwise entitled thereto for no consideration. The existing ordinary shares so acquired shall be cancelled and the issued share capital of the Company shall be reduced by the nominal value of the existing ordinary shares so acquired and cancelled and any director of the Company (or any person appointed by the board of directors of the Company) be and is hereby authorized to execute an instrument of transfer (if necessary) in respect of such shares on behalf of the shareholders of the Company concerned and to do all acts and things that the directors consider necessary or desirable to effect the acquisition and cancellation of such shares;

 

 

iii.

THAT, the nominal value of each of the authorized but unissued ordinary shares of $0.15 (nominal value) each in the capital of the Company and the nominal value of each of the authorized and issued ordinary shares of $0.15 (nominal value) each in the capital of the Company resulting from the foregoing resolutions, be reduced, with effect from immediately after the Effective Time, from $0.15 each to $0.01 each pursuant to section 83(1)(d) of the Irish Companies Act 2014 (the “Renominalization”); and

 

 

iv.

THAT, with effect from immediately after the completion of the Renominalization, the authorized share capital of the Company be increased by the creation of such number of new ordinary shares of $0.01 (nominal value) each as is necessary to result in the authorised ordinary share capital of the Company being US$200,000.

 

Vote Required and Board of Directors Recommendation

The affirmative vote of the holders of ordinary shares representing a majority of the votes cast on the matter and voting affirmatively or negatively is required for the approval of the Reverse Share Split Proposal (Proposal No. 3).

OUR BOARD OF DIRECTORS HAS UNANIMOUSLY DETERMINED THAT THE REVERSE SHARE SPLIT PROPOSAL (PROPOSAL NO. 3) IS IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE REVERSE SHARE SPLIT PROPOSAL.

 


PROPOSAL NO. 4— APPROVAL OF SHARE OPTION EXCHANGE

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General

On April 8, 2022, our board of directors, upon the recommendation of our compensation committee, authorized, subject to shareholder approval, a share option exchange program, or the Option Exchange, pursuant to which we would exchange eligible non-statutory share options held by eligible employees (including executive officers), for new share options with an exercise price equal to the fair market value of our ordinary shares on the day the new share options are granted. An eligible share option is a share option held by an Eligible Option Holder (as defined below) that was granted on June 23, 2021, with an exercise price equal to $2.01 per share, pursuant to the Iterum Therapeutics plc 2018 Amended and Restated Equity Incentive Plan (as amended), or the 2018 Plan as these share options are unvested and comprise the majority of the share options outstanding. Employees, including executive officers, who were granted a share option on June 23, 2021 under the 2018 Plan and who are employed by us on the date shareholders approve the resolution for this Proposal No. 4 (such, date, the “Exchange Effective Date”), are eligible to have their share options automatically exchanged in the Option Exchange (collectively “Eligible Option Holders”).

 

As of March 31, 2022, we had outstanding share options held by employees (including executive officers), to purchase 15,953,464 ordinary shares with a weighted average exercise price of $1.98 per share. Of these share options, there were seven non-statutory share options to purchase 13,200,000 ordinary shares with an exercise price equal to $2.01 per share that would be considered eligible for purposes of the Option Exchange, of which five non-executive employees held share options to purchase 5,984,000 ordinary shares, our chief executive officer held a share option to purchase 5,280,000 ordinary shares, and our chief financial officer held a share option to purchase 1,936,000 ordinary shares.

 

The board of directors believes that the Option Exchange is in the best interests of our shareholders and Iterum, as we believe that new share options granted under the Option Exchange will provide a better retention incentive and motivation to eligible employees, including executive officers, than the share options they currently hold and would surrender. The eligible share options are “underwater” meaning the share option exercise price with respect thereto exceeds the current market price of our ordinary shares and therefore do not serve the retentive and incentive purposes for which they were granted.  Receipt of new share options as part of the Option Exchange that have an exercise price equal to the fair market value of our ordinary shares on the date of grant will increase the retention of our talented personnel, reduce the costs and disruptions associated with resignations of such individuals and better ensure our performance as a company. The number of ordinary shares covered by new share options automatically granted in the Option Exchange to Eligible Option Holders will be equal to the number of ordinary shares covered by exchanged share options. We therefore believe that the Option Exchange will minimize dilution for our shareholders as there would be no immediate need to grant new, additional share awards (other than those granted pursuant to the Option Exchange) in order to retain and motivate the Eligible Option Holders, which include our chief executive officer and chief financial officer, both of whom are critical to our success.  

Rationale for Option Exchange

We have been thoughtfully considering the idea of an option exchange since 2021. We began internal discussions to consider various ways to better retain and incentivize employees to accelerate development activities for the organization. In early 2021, we began discussions with our compensation consultant, Coda Advisors, LLC, or Coda, to evaluate the equity compensation alternatives available to us to better incentivise and retain staff.   At that time the compensation committee considered seeking shareholder approval to increase the ordinary shares available for issuance under our 2018 Plan.  In connection with such consideration, the compensation committee reviewed a report prepared by Coda, analysing the level of equity ownership of senior executives based on ordinary shares owned outright and outstanding equity awards granted as a percentage of total ordinary shares outstanding.  Competitive data was taken from a thirty-company peer group of pharmaceutical and biotechnology companies.  The peer group was selected by the compensation committee in consultation with Coda from a group of companies similar to us taking into account the business focus, financial profile and stage of development of each company. The Company ranked below the 25th percentile in competitive ownership percentage when compared to peers.  Coda and the compensation committee also considered the potential dilutive effect on the percentage ownership by senior executives and employees of (i) outstanding awards; and (ii) total ordinary shares available for issuance by the Company under the 2018 Plan. The Company’s employees ranked below the 25th percentile in potential dilution when considering the dilutive effect of outstanding awards and when considering the dilutive effect of ordinary shares available for issuance

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under the 2018 Plan. As a result of these analyses and recognizing that our ability to grant share options and other equity-based awards in line with our competitors helps us to attract, retain and motivate our employees including our executive officers, the compensation committee recommended that the board of directors increase the number of ordinary shares available for issuance under the 2018 Plan at the time, and conditional upon approval of such increase, to grant to employees share options to purchase 13,200,000 ordinary shares, including the grant of share options to purchase 5,280,000 ordinary shares to Mr. Fishman, and the grant of share options to purchase 1,936,000 ordinary shares to Ms. Matthews, to bring the Company closer to the median of its peers.  The exercise price per share was to be the closing price of our ordinary shares on the Nasdaq Capital Market on the date of grant.  The share options were granted on June 23, 2021, following shareholder approval of the increase in shares available for issuance under the 2018 Plan, with an exercise price of $2.01.

 

Since the grant of these share options on June 23, 2021, the trading price of our ordinary shares has declined significantly such that these share options no longer provide the retention incentive and motivation that the compensation committee intended. We evaluated several alternatives to the Option Exchange for remaining competitive within our industry, including granting additional share options or restricted share unit awards, exchanging underwater share options for full value ordinary shares or exchanging underwater share options for a cash payment. While equity awards and cash compensation are part of our overall compensation packages, we do not believe that relying exclusively on such approaches is an ideal use of our resources. For example, granting additional share options or restricted share unit awards would cause further dilution to our current shareholders. And, if our equity compensation is not competitive and retentive, we could be forced to increase cash compensation, which will reduce the resources we have allocated to meeting our business goals and objectives. Accordingly, we determined that the Option Exchange best balanced our goals of motivating, retaining and incentivizing our employees while at the same time not continuing to dilute shareholders or unnecessarily using cash resources.  We have decided that executive officers who received share options on June 23, 2021 under the 2018 Plan should be eligible for the Option Exchange, as they currently hold approximately 55% of the share options eligible for the Option Exchange. As such, if we were to exclude them, we may not fully achieve the intentions of the program with respect to retention and dilution. In addition, during this critical time for the organization, we need to keep our executives incentivized in order to maintain continuity and to increase the likelihood of achieving significant milestones that would bring value to the organization and our shareholders. Accordingly, we determined that the Option Exchange was the most attractive alternative for shareholders, as more fully explained below.

 

Performance Incentives

 

We face significant competition for experienced and talented personnel with critical and high demand skills in our industry generally and in the antibiotic space in particular. Share options are an important part of our incentive compensation. The price of our ordinary shares has significantly decreased since our initial public offering in May 2018, at which point our share price was approximately $13.00 per share. While we have made significant progress in developing our product candidate and advancing our Phase III clinical trials, and while we remain optimistic regarding our growth potential, the price of our ordinary shares remains relatively low following receipt of the complete response letter from the U.S. Food and Drug Administration in July 2021 and due to market factors negatively impacting the antibiotics sector as well as market conditions generally. On March 31, 2022, the closing price of our ordinary shares on The Nasdaq Capital Market was $0.355 per share, resulting in 100% of our outstanding share options held by employees, including certain executive officers, being underwater. Our compensatory share options cannot be sold. They can either be voluntarily exercised if the market price of our ordinary shares exceeds the exercise price or they will expire unexercised. Share options that are so significantly underwater are not effective as performance incentives because they provide less or no perceived value to share option holders. In addition, because substantially all of our share options are significantly underwater, the likelihood that there will be a positive spread between their exercise prices and the near-term price of our ordinary shares is too low to provide meaningful incentive to share option holders.  This is a particular concern for the company in this time of unprecedented competition for talent.

 

Personnel Retention

 

We designed the Option Exchange to restore equity value, increase retention and motivation in a highly competitive labor market, particularly in the biotech space, provide non-cash compensation incentives, and to better align our employee and shareholder interests for long-term growth. Underwater share option awards are of limited benefit in

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motivating and retaining our employees, and this is particularly the case for share options that are significantly underwater. Through the Option Exchange, we believe that we will be able to enhance long-term shareholder value by increasing our ability to retain experienced and talented personnel and by better aligning the interests of these individuals with the interests of our shareholders. As of March 31, 2022, 100% of the share options held by our employees, including executive officers, were underwater and, for a large number of such individuals, significantly so. As a result, we may face considerable challenges in retaining our employees, and there is a possibility that our competitors may be able to offer equity incentives that are more attractive and that, in some cases, could make the terms of employment with such competitor more attractive than what we offer to our existing employees. The Option Exchange is designed to address these concerns as well as maintain positive morale among our personnel and reinvigorate a culture where equity compensation is a key component of our overall compensation package.

 

For each share option exchanged, the vesting of the new share options issued under the Option Exchange will match the vesting of the exchanged share option, being 25% of the shares underlying the option vesting on June 23, 2022, with the remaining ordinary shares vesting in equal monthly installments thereafter until June 23, 2025, subject to continued service with the Company through each relevant vesting date. The compensation committee believes that maintaining the vesting status and schedule for the newly issued options in the Option Exchange without resetting the vesting period, incentivizes employees by recognizing the value of their contributions to the Company since the date of grant while also incentivizing them to remain with the Company through the remaining vesting periods to allow recognition for the full value of the awards.  

 

Alignment of Interests

 

As of March 31, 2022 seven employees, including two of our executive officers, are eligible for the Option Exchange. Because the equity awards to be issued pursuant to the Option Exchange are non-statutory share options, our Eligible Option Holders will only receive value for such equity awards based on positive share price performance following the Option Exchange. This aligns the interests of our Eligible Option Holders with our shareholders. Additionally, because the two executive officers currently hold approximately 55% of the share options eligible for the Option Exchange, to exclude them from the Option Exchange would limit the impact of the program.

 

Alternatives Considered

 

Our compensation committee considered alternatives to the Option Exchange to provide a meaningful performance and retention incentive, including providing new share option or restricted share unit awards, exchanging underwater share options for full value shares or exchanging underwater share options for a cash payment, or just increasing cash compensation. After careful consideration, our compensation committee determined that the Option Exchange provides better performance and retention incentives at a lower cost to the company and/or with less dilution to shareholders when compared with other alternatives.

 

Structure of the Option Exchange

 

The board of directors, upon recommendation of our compensation committee, authorized the Option Exchange on April 8, 2022, subject to shareholder approval. If the shareholders approve, we will effect the Option Exchange on the Exchange Effective Date.   On the Exchange Effective Date, all Eligible Share Options will be automatically cancelled and new share options issued on a one for one basis with a new exercise price.  Set forth below is a description of the key features of the Option Exchange.

 

Eligible Option Holder Participants

 

The Option Exchange will only be available to employees, including executive officers, who on the Exchange Effective Date are providing services to us and hold outstanding eligible share options.  As of  March 31, 2022, eligible share options represented approximately 83% of total outstanding share options.  Of the 13,200,000 ordinary shares underlying share options that are currently eligible for the Option Exchange, our chief executive officer, Mr. Fishman, and our chief financial officer, Ms. Matthews, hold share options to purchase 5,280,000 ordinary shares and 1,936,000 ordinary shares, respectively.  The remaining eligible share options to purchase 5,984,000 ordinary shares are held by five non-executive employees. Participants in the Option Exchange must continue to be employed by us on the date the surrendered share options are cancelled and replacement share options are granted. Any employee holding eligible

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share options currently but whose service with us terminates for any reason before the Exchange Effective Date, including due to voluntary resignation, retirement, involuntary termination, layoff, death or disability, would retain his or her eligible share options subject to their existing terms and would not be eligible to receive new share options in the Option Exchange.

 

Eligible Share Options

 

As of March 31, 2022, we had outstanding eligible share options to purchase 13,200,000 ordinary shares under our 2018 Plan at an exercise price of $2.01 per share and with a remaining life of approximately 111 months. These eligible share options represent approximately 83% of total outstanding share options and approximately 7% of the issued and outstanding ordinary shares as of March 31, 2022.

 

Exercise Price of New Share Options

 

The Option Exchange is a one-for-one-exchange.  All replacement share options granted will have an exercise price equal to the fair market value of our ordinary shares at the time we grant replacement share options, which for the avoidance of doubt, will be the Exchange Effective Date.

 

Vesting Schedules for New Share Options

 

Vesting of new share options issued under the Option Exchange will match the vesting of the exchanged share options.   This vesting schedule supports the nature of share options as an incentive vehicle, recognizes the prior services and contributions of Eligible Option Holders and provides us with valuable years of personnel retention during an important time for the Company.

 

Term for New Share Options

 

The new share options will expire 10 years following the Exchange Effective Date.

 

Intended Implementation of the Option Exchange on the Exchange Effective Date

 

If our shareholders approve this Proposal No. 4, the Option Exchange shall occur automatically on the date our shareholders approve this proposal.

 

Impact of the Option Exchange on Surrendered Share Options and Ordinary Share Availability under the 2018 Plan

 

If all seven employees remain eligible for the Option Exchange on the Exchange Effective Date, there will be 13,200,000 ordinary shares underlying share options that are surrendered under the Option Exchange.  As these will be replaced by new share options on a one for one basis, there will be no impact to the share reserve of the 2018 Plan available for future grant of equity awards under the 2018 Plan.

 

No Appraisal Rights

 

No action is proposed herein for which the laws of Ireland, or our constitution, provide a right to our shareholders to dissent and obtain appraisal of, or payment for, such shareholder's ordinary shares.

 

Accounting Impact

 

The incremental compensation expense associated with the Option Exchange will be measured as the excess, if any, of the fair value of new replacement share options granted to eligible participants in the Option Exchange, measured as of the date the new replacement share options are granted, over the fair value of the share options surrendered in exchange for the new replacement share options, measured immediately prior to the cancellation of the surrendered share options. We do not expect the incremental compensation expense, if any, to be material to our financial results. We will recognize any such incremental compensation expense ratably over the vesting period of the new replacement share options.

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Material U.S. Federal Income Tax Consequences of the Option Exchange

 

The exchange of share options pursuant to the Option Exchange should be treated as a non-taxable exchange because the new share options will have an exercise price equal to or greater than the fair market value of our ordinary shares on the grant date. Neither the company nor the participants in the Option Exchange should recognize any income for U.S. federal income tax purposes upon the grant of the new share options. New share options granted under the Option Exchange will be non-qualified share options for U.S. federal income tax purposes. Tax effects may vary in other countries.

 

Material Irish Tax Consequences of the Option Exchange

 

The exchange of share options pursuant to the Option Exchange should not trigger an Irish income tax or capital gains tax charge for the Company or the participants.  Neither the Company nor the participants in the Option Exchange should be subject to Irish income tax upon the grant of the new share options.

 

Irish stamp duty should not arise on the exchange of share options pursuant to the Option Exchange because: (i) the exercise price of the share options to be surrendered exceeds the current market price of our ordinary shares; and (ii) the new share options will have an exercise price equal to or greater than the fair market value of our ordinary shares on the grant date.

 

Financial Statements

 

Our financial statements and other information required by Item 13(a) of Schedule 14A under the Exchange Act are incorporated by reference from our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 28, 2022.

 

Interest of Certain Persons

 

In considering the recommendation of our Board that our shareholders approve the Option Exchange, shareholders should be aware that our chief executive officer, Mr. Fishman, and our chief financial officer, Ms. Matthews, have direct interests in the adoption of this proposal, which may present them with conflicts of interest in connection with the recommendation and approval of this proposal. As discussed above, currently seven employees (including our chief executive officer and chief financial officer) will be eligible for the Option Exchange to the extent they hold eligible share options and remain employed by or are providing services to the Company through the completion of the Option Exchange. Of the 13,200,000 ordinary shares underlying share options that are currently eligible for the Option Exchange, Mr. Fishman and Ms. Matthews hold share options to purchase 5,280,000 ordinary shares and 1,936,000 ordinary shares, respectively.  The remaining eligible share options to purchase 5,984,000 ordinary shares are held by five non-executive employees.  Therefore, in recommending adoption of this proposal to our shareholders, our Board recognizes, and our shareholders should be aware, that approval of this proposal may benefit certain of our executive officers.

 

Vote Required and Board of Directors Recommendation

 

The affirmative vote of the holders of ordinary shares representing a majority of the votes cast on the matter and voting affirmatively or negatively is required for the approval of the share option exchange proposal (Proposal No. 4).

 

OUR BOARD OF DIRECTORS HAS UNANIMOUSLY DETERMINED THAT THE SHARE OPTION EXCHANGE PROPOSAL (PROPOSAL NO. 4) IS IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE SHARE OPTION EXCHANGE PROPOSAL.


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CODE OF BUSINESS CONDUCT AND ETHICS

We have adopted a written Code of Business Conduct and Ethics that applies to all officers, directors and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.  The Code of Business Conduct and Ethics is available on our website at www.iterumtx.com.  If we make any substantive amendments to the Code of Business Conduct and Ethics or grant any waiver from a provision of the Code of Business Conduct and Ethics to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website or in a Current Report on Form 8-K.  Information contained on, or that can be accessed through, our website is not incorporated by reference into this document, and you should not consider information on our website to be part of this document.

 


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OTHER MATTERS

The board of directors knows of no other business which will be presented to the annual general meeting. If any other business is properly brought before the annual general meeting, proxies will be voted in accordance with the judgment of the persons named therein.

 

Solicitation of Proxies

 

This proxy is solicited on behalf of our board of directors. We will bear the expenses connected with this proxy solicitation. In addition to the solicitation of proxies by mail, we expect to pay banks, brokers and other nominees their reasonable expenses for forwarding proxy materials and annual reports to principals and obtaining their voting instructions. In addition to the use of the mail, our directors, officers and employees may, without additional remuneration, solicit proxies in person or by use of other communications media. We have engaged Innisfree M&A Incorporated, or Innisfree, to solicit proxies from shareholders in connection with the annual general meeting. We will pay Innisfree a fee of approximately $20,000, plus reasonable out of pocket fees and expenses for soliciting proxies. In addition, Innisfree and certain related persons will be indemnified against certain liabilities arising out of or in connection with the engagement. Proxies may be solicited by Innisfree by mail, telephone and e-mail.

Householding of Annual and Extraordinary Meeting Materials

Some banks, brokers and other nominee record holders may be participating in the practice of "householding" proxy statements and annual reports. This means that only one copy of our proxy statement, annual report, Irish Statutory Financial Statements or Notice of Internet Availability of Proxy Materials may have been sent to multiple shareholders in the same household. We will promptly deliver a separate copy of any such document to any shareholder upon request submitted in writing to us at Iterum Therapeutics plc, Fitzwilliam Court, 1st Floor, Leeson Close, Dublin 2, Ireland, Attention: Investor Relations, or by calling +353 1 9038354. Any shareholder who wants to receive separate copies of the proxy statement, annual report, Irish Statutory Financial Statements or Notice of Internet Availability of Proxy Materials in the future, or who is currently receiving multiple copies and would like to receive only one copy for his or her household, should contact his or her bank, broker or other nominee record holder, or contact us at the above address and phone number.

Shareholder Proposals for 2023 Annual General Meeting of Shareholders

Proposals of shareholders intended to be presented at our 2023 annual general meeting of shareholders pursuant to Rule 14a-8 promulgated under the Exchange Act must be received by us at our offices at c/o Secretary, Iterum Therapeutics plc, Fitzwilliam Court, 1st Floor, Leeson Close, Dublin 2, Ireland, no later than December 26, 2022, in order to be included in the proxy statement and proxy card relating to that meeting.

In addition, shareholders who intend to present matters for action at our 2023 annual general meeting or nominate directors for election to our board of directors (other than pursuant to Rule 14a-8) must comply with the requirements set forth in our Constitution. For such matters under our Constitution, proper written notice must be received by our secretary at our registered office at the address noted above, no earlier than December 26, 2022 and no later than January 25, 2023; except if the date of the 2023 annual general meeting is changed by more than thirty (30) days from the first anniversary date of the 2022 Annual General Meeting, the shareholder's notice must be so received not earlier than one hundred and twenty (120) days prior to such annual general meeting and not later than the close of business on the later of (i) the 90th day prior to such annual general meeting or (ii) the 10th day following the day on which a public announcement of the date of the annual general meeting is first made.

Important Notice of the Internet Availability of Proxy Materials for the 2022 Annual General Meeting:

The Notice and Proxy Statement, Irish Statutory Financial Statements and 2021 annual report to shareholders are available at www.proxyvote.com.

 

 

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INCORPORATION BY REFERENCE

 

The SEC allows us to incorporate by reference information we file with the SEC, which means that we can disclose important information to you by referring you to those publicly available documents. The information that we incorporate by reference in this proxy statement is considered to be part of this proxy statement. This proxy statement incorporates by reference the documents listed below (File No. 001-38503) that we previously filed with the SEC (other than those documents or the portions of those documents not deemed to be filed):

 

our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

 

A copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 may be obtained by

shareholders without charge by written or oral request, or may be accessed on the Internet at www.sec.gov.

 

You also may access these filings on our website at www.iterumtx.com. Our website and the information contained on that site, or connected to that site, are not incorporated into this proxy statement.

 

 

 

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APPENDIX A

 

AMENDED CONSTITUTION

 


A-1

 


 

 

 

 

COMPANIES ACT 2014

 

 

 

 

A PUBLIC COMPANY LIMITED BY SHARES

 

 

 

 

 

 

 

 

 

 

 

CONSTITUTION

 

OF

 

ITERUM THERAPEUTICS PUBLIC LIMITED COMPANY  

 

(as amended by all resolutions up to and including [15 June 2022])

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


A-2

 


 

 

COMPANIES ACT 2014

 

A PUBLIC COMPANY LIMITED BY SHARES

 

 

 

MEMORANDUM OF ASSOCIATION

 

OF

 

ITERUM THERAPEUTICS PUBLIC LIMITED COMPANY

 

1.

The name of the Company is Iterum Therapeutics public limited company.

2.

The Company is a public limited company for the purposes of Part 17 of the Companies Act 2014.

3.

The objects for which the Company is established are:

 

3.1.

To carry on the business of a holding company and to coordinate the administration, finances and activities of any subsidiary companies or associated companies, to do all lawful acts and things whatsoever that are necessary or convenient in carrying on the business of such a holding company and in particular to carry on, in all its branches, the business of a management services company, to act as managers and to direct or coordinate the management of other companies or of the business, property and estates of any company or person and to undertake and carry out all such services in connection therewith as may be deemed necessary or appropriate by the Company’s board of directors and to exercise its powers as a shareholder of other companies.

 

3.2.

To carry on the business of a pharmaceuticals company and to research, develop, design, manufacture, produce, supply, buy, sell, distribute, import, export, provide, promote and otherwise deal in pharmaceuticals, active pharmaceutical ingredients and dosage pharmaceuticals and other devices or products of a pharmaceutical, medicinal or healthcare character and to hold intellectual property rights and to do all things usually done by persons carrying on the above mentioned activities or any of them or likely to be required in connection with any such activities.

 

3.3.

To invest in pharmaceutical and related assets, including, amongst other items, investments in pharmaceutical companies, products, businesses, divisions, technologies, devices, sales force and other marketing capabilities, development projects and related activities, licences, intellectual and similar property rights, premises and equipment, royalty rights and all other assets needed to operate a pharmaceuticals business.