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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.     )
Filed by the Registrant  ý                             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))
ýDefinitive Proxy Statement
¨Definitive Additional Materials
¨Soliciting Material under Section 240.14a-12
Aerie Pharmaceuticals, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
ýNo fee required.
¨Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)
Title of each class of securities to which transaction applies:
 
     
(2)
Aggregate number of securities to which transaction applies:
 
     
(3)Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
     
(4)
Proposed maximum aggregate value of transaction:
 
     
(5)
Total fee paid:
 
     
¨Fee paid previously with preliminary materials.
¨Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1)
Amount Previously Paid:
 
     
(2)
Form, Schedule or Registration Statement No.:
 
     
(3)
Filing Party:
 
     
(4)
Date Filed:
 
     





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April 27, 2021

Dear Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders of Aerie Pharmaceuticals, Inc., which will be held on Thursday, June 17, 2021, at 8:00 A.M. Eastern Time, at The Umstead Hotel and Spa, located at 100 Woodland Pond Drive, Cary, North Carolina 27513. The attached Notice of the Annual Meeting of Stockholders and proxy statement describes the formal business that we will transact at the Annual Meeting.
The Board of Directors of Aerie Pharmaceuticals, Inc. has determined that an affirmative vote on each matter that calls for an affirmative vote is in the best interest of Aerie Pharmaceuticals, Inc. and its stockholders and unanimously recommends a vote “FOR” all such matters considered at the Annual Meeting.
We have elected to take advantage of the rules of the U.S. Securities and Exchange Commission that allow us to furnish our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the “Notice”) rather than a full paper set of the proxy materials, unless you previously requested to receive printed copies. The Notice contains details regarding the date, time and location of the meeting and the business to be conducted, as well as instructions on how to access our proxy materials on the Internet and for voting over the Internet.
Whether or not you plan to attend the Annual Meeting, please vote your shares promptly by following the voting instructions that you have received. As always, we encourage you to vote your shares prior to the Annual Meeting. Your vote is important regardless of the number of shares you own. Voting by proxy will not prevent you from voting in person at the Annual Meeting, but will assure that your vote is counted if you cannot attend.
On behalf of the Board of Directors and the employees of Aerie Pharmaceuticals, Inc., we thank you for your continued support and look forward to you joining the Annual Meeting.

Sincerely yours,
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Vicente Anido, Jr., Ph.D.
Chief Executive Officer and Chairman of the Board


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AERIE PHARMACEUTICALS, INC.
4301 Emperor Boulevard, Suite 400
Durham, North Carolina 27703
(919) 237-5300


NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Date: June 17, 2021
Time: 8:00 A.M. Eastern Time
Location: The Umstead Hotel and Spa
100 Woodland Pond Drive, Cary, North Carolina 27513
Items of Business
1Election of the two nominees named in the attached proxy statement as Directors to serve on the Board of Directors for a three-year term, or until their successors are duly elected and qualified;
2
Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021;
3Conduct an advisory vote to approve compensation for our named executive officers (“say-on-pay”); and
4Consideration of any other business properly brought before the meeting and any adjournment or postponement thereof.
Record Date
The record date for the Annual Meeting is April 19, 2021. Only stockholders of record at the close of business on that date may vote at the meeting or any adjournment thereof.
Proxy Voting
You are cordially invited to attend the meeting in person. Whether or not you expect to attend the meeting, please vote your shares promptly by following the instructions that you have received. Submitting a proxy or voting instructions will not prevent you from attending the Annual Meeting and voting in person. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder.
By Order of the Board of Directors
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Richard J. Rubino
Chief Financial Officer, Secretary and Treasurer



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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON JUNE 17, 2021:
The Notice of Meeting, Proxy Statement and our Form 10-K for the year ended December 31, 2020, are available free of charge on the Investors section of our website (www.aeriepharma.com) or at www.proxyvote.com. We are making the Proxy Statement and form of proxy first available on or about April 27, 2021.




TABLE OF CONTENTS


PROXY SUMMARY
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PROXY
SUMMARY
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read this entire proxy statement carefully before voting.
Annual Meeting
Date: June 17, 2021
Time: 8:00 A.M. Eastern Time
Location: The Umstead Hotel and Spa
100 Woodland Pond Drive, Cary, North Carolina 27513
Ways to Vote Your vote must be received by 11:59 P.M., Eastern Time on June 16, 2021, to be counted.
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Vote in PersonVote by MailVote by TelephoneVote by Internet
To vote in person,
attend the Annual
Meeting and we will
 give you a ballot when
you arrive.
If you requested printed
copies of the proxy
materials, you will receive
a proxy card. To vote by
proxy, simply complete,
sign and date the enclosed
proxy card and return
it promptly in the
envelope provided.
Call the toll-free number
1-800-690-6903. You
will be asked to provide
the company number and
account number from the
proxy card you received if
you requested printed copies
of the proxy materials.
Go to the Internet website www.proxyvote.com to
complete an electronic
proxy card. You will be
asked to provide the
company number and
account number from the
enclosed Notice.
PROPOSALSBOARD VOTE RECOMMENDATIONREQUIRED VOTE
1Election of Class II Directors FOR EACH
NOMINEE
Plurality of votes cast
2
Ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021
FORMajority of votes cast
3Non-binding advisory vote on the compensation of our named executive officers (NEOs)FORMajority of votes cast

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2021 | Proxy Statement

PROXY SUMMARY
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COMPANY OVERVIEW
We are an ophthalmic pharmaceutical company focused on the discovery, development and commercialization of first-in-class therapies for the treatment of patients with open-angle glaucoma, ocular surface diseases and retinal diseases. 2020 was a challenging year for the global economy as the COVID-19 pandemic brought disruptions to global supply chains, workforce participation was impacted by “shelter in place” restrictions and significant volatility disrupted the financial markets. Despite these challenges, the Company continued to achieve strong financial and scientific results in 2020.
2020 Business and Financial Highlights
U.S. Commercial Products
Net Product revenue in 2020 of $83.1 million, which represents a 19% increase as compared to the prior year, was driven by our U.S. Food and Drug Administration (“FDA”) approved glaucoma franchise products, Rhopressa® (netarsudil ophthalmic solution) 0.02% (“Rhopressa®”) and Rocklatan® (netarsudil/latanoprost ophthalmic solution) 0.02%/0.005% (“Rocklatan®”). Although there was a decline in total prescription volumes in April 2020, as seen within the entire pharmaceutical market according to IQVIA data primarily due to the impact of the COVID-19 pandemic, our sales volumes have increased each successive quarter in 2020 as compared to the first quarter of 2020 for both Rhopressa® and Rocklatan®.
Outside the United States
In Europe, Roclanda® (marketed as Rocklatan® in the United States) was granted a Centralised Marketing Authorisation (“Centralised MA”) by the European Commission (“EC”) in January 2021. Roclanda® represents our second EC approved product in Europe as Rhokiinsa® (marketed as Rhopressa® in the United States) was granted a Centralised MA by the EC in late 2019.
Furthermore, we reported positive interim topline 90-day efficacy data in September 2020 for our Phase 3b clinical trial for Roclanda®, named Mercury 3, which we believe is important to the execution of our strategy in Europe, which generated interest from potential collaboration partners.
In Japan, we entered into a Collaboration and License Agreement (the “Santen Agreement”) with Santen Pharmaceuticals Co., Ltd. (“Santen”) in October 2020 to advance our clinical development and ultimately commercialize Rhopressa® and Rocklatan® in Japan and eight other countries in Asia. The Santen Agreement included an upfront payment to Aerie of $50.0 million, with net cash proceeds after withholding taxes of $45.0 million received in the fourth quarter of 2020. We initiated a Rhopressa® Phase 3 clinical trial in December 2020, the first of three expected Phase 3 clinical trials in Japan. Clinical trials for Rocklatan® have not yet begun.
U.S. Commercial ProductsOutside the United States
19%
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+
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Increase in
Net Revenues
Rhopressa® and Rocklatan®
$83.1 million for the year ended December 31, 2020
Sales Volumes Increased Each Successive Quarter of 2020
Rhopressa® and Rocklatan®
in 2020
EC Approval
Roclanda®
in Europe,
January 2021
Executed Santen Agreement
Rhopressa® and Rocklatan®
in Japan,
October 2020
Reported Positive Topline Data
Roclanda®
Mercury 3
Phase 3b
clinical trial
September 2020
Initiated
Clinical Trial
Rhopressa®
in Japan,
October 2020
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PROXY SUMMARY
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Glaucoma Product Manufacturing
We have a sterile fill production facility in Athlone, Ireland, for the production of our clinical supplies and our products approved by the U.S. FDA. We received FDA approval for production for commercial distribution to the United States for Rocklatan® in the first quarter of 2020 and Rhopressa® in the third quarter of 2020. Shipments of commercial supply of Rocklatan® and Rhopressa® from the Athlone manufacturing plant to the United States commenced in the third quarter and fourth quarter of 2020, respectively. The Athlone manufacturing plant has also manufactured clinical supplies of Rhopressa® for the Phase 3 clinical trials in Japan. We expect that in 2021 the Athlone manufacturing plant will manufacture most of our ongoing needs for Rhopressa® and Rocklatan® in the United States.
Product Candidates and Pipeline
We are developing AR-15512, our product candidate for the treatment of dry eye disease, for which we initiated a large Phase 2b clinical trial in October 2020. Furthermore, we are also developing three sustained-release implants focused on retinal diseases, AR-1105, AR-13503 SR and AR-14034 SR. For AR-1105, we reported topline results of the Phase 2 clinical trial for patients with macular edema due to retinal vein occlusion (“RVO”) in July 2020, indicating sustained efficacy of up to six months, an important achievement in validating the potential capabilities of Aerie’s sustained release platform. With respect to future plans for AR-1105, we are currently evaluating next steps regarding advancement into a Phase 3 clinical trial along with commercialization prospects in both Europe and the United States.
For AR-13503 SR, we initiated a first in-human clinical safety study in the third quarter of 2019 for the treatment of wet age-related macular degeneration (age-related macular degeneration, “AMD”) and diabetic macular edema (“DME”), which is currently ongoing. We are still evaluating different formulations of this early stage product candidate.
For preclinical AR-14034 SR, we anticipate filing an Investigational New Drug Application (“IND”) with the FDA in the second half of 2022 to evaluate its potential as a treatment for wet AMD and DME.
Glaucoma Product Manufacturing
 Product Candidates and Pipeline
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FDA Approval at Athlone Plant
Rhopressa® and Rocklatan® Production for commercial distribution to the United States
Initiated
Clinical Trial
AR-15512
TRPM8 agonist for dry eye
in the United States
October 2020
Reported Positive Topline Data
AR-1105
dexamethasone steroid implant Phase 2 clinical trial in patients with macular edema due to RVO
July 2020
New Preclinical
Program
AR-14034 SR
pan-VEGF receptor inhibitor
Sustained Release Retinal Implant
for treatment of wet AMD and DME in the United States
Introduced early 2021
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PROXY SUMMARY
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Environmental, Social and Governance (“ESG”) and Human Capital
We are dedicated to the principles of environmental stewardship, social responsibility, good corporate governance and human capital. We consider these principles to be among our most important values and therefore integrate them in our ongoing and strategic activities. We believe incorporating these values and practices into our operations not only improves our performance but also creates a sustainable and growth-oriented culture that benefits our employees, our customers and our investors.
Our Nominating and Corporate Governance Committee of the Board of Directors regularly reviews our operations with senior management to assess our progress in realizing these values. With our Board of Directors’ leadership, we plan on continuing to evaluate our ESG practices and to integrate sustainability into our business.
As we continue to build our company, we will continue to keep these principles at top of mind.
Highlights from our four priority areas:
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Environmental StewardshipSocial ResponsibilityCorporate GovernanceHuman Capital
We employ green processes, materials, practices,
equipment and technologies where possible throughout
 our operations to foster conservation and reduce waste.

We recognize our responsibility to be environmentally conscious and to contribute to the global effort of tackling climate change, moving toward a low-carbon economy and expanding the use of renewable energy, while minimizing energy consumption using various power-saving technologies and building end-to-end processes with sustainability and good manufacturing practices in mind.
As an ophthalmic pharmaceutical company,
we are focused on the needs
of patients, physicians and
the communities we serve, including supporting patient advocacy through philanthropic donations targeted to accelerate treatments and
cures for retinal diseases.

We have donated hundreds of thousands of dollars to causes that we believe are important to society by supporting glaucoma research and patient education and providing free cataract surgery for underserved populations.
At the Board level, our Nominating and Corporate Governance Committee monitors the effectiveness
of our corporate governance guidelines and our code
of business conduct and
ethics and oversees our ESG strategy and policies.

We have established and follow our Aerie Compliance & Ethics (“ACE”) program in an effort to ensure integrity in our activities and compliance with all applicable legal and regulatory requirements.
We are committed to providing our employees with a positive work environment that helps them realize their full potential and helps them contribute to the success of our company.

We have developed and implemented key initiatives that address Diversity and Inclusion, Talent and Development, Health and Safety, and Compensation and Benefits.

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2021 | Proxy Statement

PROXY SUMMARY
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Information on our Board of Directors
Our Board is currently comprised of eight directors. Our amended and restated certificate of incorporation provides for a classified Board consisting of three classes of directors, each of which shall consist, as nearly as may be possible, of one-third of the total number of directors. Currently, two classes consist of three directors and one class consists of two directors. Each class serves a staggered three-year term. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following their election.
DIRECTOR NOMINEECLASS
AGE(1)
POSITION(S)
HELD
DIRECTOR SINCECOMMITTEE
MEMBERSHIP
Mechiel (Michael) M. du ToitII68Independent Director2015
Chair - Nominating & Corporate Governance
David W. GryskaII65Independent Director2018
Chair - Audit
CONTINUING DIRECTORS
Vicente Anido, Jr., Ph.D.I68Chief Executive Officer and Chairman of the Board2013Executive - Board Chairman
Benjamin F. McGraw, III, Pharm.D.I72Lead Independent Director2014
Chair - Compensation
Julie McHughI56Independent Director2015
Audit;
Nominating & Corporate Governance
Gerald D. Cagle, Ph.D.III76Independent Director2013
Compensation;
Nominating & Corporate Governance
Richard CroarkinIII66Independent Director2015
Audit;
Compensation
Peter J. McDonnell, M.D.III63Independent Director2020
Compensation;
Nominating & Corporate Governance
(1) Age as of April 19, 2021.
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2021 | Proxy Statement

PROXY SUMMARY
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Diversity of Skills(1)
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(1) The chart is depicting skills out of 8 total directors.
Governance Highlights
Our Board is committed to building long-term stockholder value and maintaining sound corporate governance practices. We highlight some of our corporate governance practices below.
Number of directors8
Percentage of directors who are independent88%
Directors who attended at least 75% of board and committee meetings in 2020ALL
Strong and active lead independent directorü
100% independent audit, compensation and nominating and corporate governance committees ü
Board and committees may engage outside advisors independent of managementü
Annual board and committee self-evaluationsü
Active stockholder engagement programü
Corporate governance guidelines ü
Corporate governance guidelines formalize the consideration of diversity factors for director nomineesü
Stock ownership guidelines for directors and executive officersü
No hedging or monetization transactionsü
All employees, officers and directors must adhere to Code of Business Conduct and Ethicsü
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2021 | Proxy Statement

PROXY SUMMARY
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Key Compensation Governance Attributes
We believe that a sound executive compensation program is grounded in key governance practices. See below for key components of our executive compensation program:
P
WHAT WE DO
üAlign annual incentive pay and performance by linking annual bonuses to the achievement of performance goals tied to Company financial and strategic objectives
üCap payouts for annual bonus
üRequire significant stock ownership by our executives and directors through our stock ownership guidelines
üMaintain a claw back policy covering incentive compensation
ü
Consult an independent compensation consultant
ü
Evaluate the risk profile of our pay program
ü
Conduct an annual pay review
ü
Engage directly with our largest stockholders on a regular basis to solicit feedback
ü
Grant equity awards with “double-trigger” vesting upon a change in control
üAppoint a Compensation Committee comprised solely of independent directors
üHave a majority of executive compensation at-risk
W
WHAT WE
DON’T DO
X
Provide gross-ups on excise taxes
X
Guarantee salary increases, bonuses, or grants of equity compensation
X
Provide executive perquisites
X
Provide pension plans or other post-employment benefit plans
X
Offer severance multipliers in excess of 2x base salary and bonus
XImplement compensation or incentives that encourage unnecessary or excessive
risk taking
X
Allow for hedging or unauthorized pledging of Company stock
X
Reprice stock options without stockholder approval
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PROXY SUMMARY
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2020 Fiscal Year Target Annual Compensation Opportunities Mix
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(1) Percentages attributed to restricted stock and stock options are based on grant date fair value of awards granted in 2020.
(2) Excludes total compensation for Dr. Hollander. Due to his start date of November 2019, at which time he received sign-on incentives in accordance with his Employment Agreement, he did not receive long-term incentive awards in 2020.
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QUESTIONS AND ANSWERS
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PROXY STATEMENT FOR THE 2021 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 17, 2021


QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
Why has Aerie Pharmaceuticals, Inc. prepared this proxy statement?
We have prepared proxy materials in connection with the solicitation by the Board of Directors (“Board”) of Aerie Pharmaceuticals, Inc. of proxies to be voted at our 2021 Annual Meeting of Stockholders, or Annual Meeting. The Notice of 2021 Annual Meeting of Stockholders is being sent starting April 27, 2021. As used in this proxy statement, the “Company,” “we,” “us” and “our” refer to Aerie Pharmaceuticals, Inc. The term “Annual Meeting,” as used in this proxy statement, includes any adjournment or postponement of such meeting.
Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?
In accordance with rules of the U.S. Securities and Exchange Commission (“SEC”), we use the Internet as the primary means of furnishing proxy materials to stockholders. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the “Notice”) to our stockholders with instructions on how to access the proxy materials over the Internet (or request a printed copy of the materials) and for voting over the Internet. The proxy materials are also available at www.aeriepharma.com. The inclusion of our website address here and elsewhere in this proxy statement does not incorporate by reference the information on our website into this proxy statement.
Stockholders may follow the instructions in the Notice to elect to receive future proxy materials in print by mail or electronically by email.
Who can vote at the Annual Meeting?
Only stockholders of record as of the close of business on April 19, 2021, will be entitled to vote at the Annual Meeting. As of April 19, 2021, there were 46,890,091 shares of common stock issued and outstanding and entitled to vote.
Stockholder of Record: Shares Registered in Your Name
If on April 19, 2021, your shares were registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC, then you are a stockholder of record and the Notice was sent directly to you. As a stockholder of record, you may vote in person at the meeting or vote by proxy.
Beneficial Owner: Shares Registered in the Name of a Broker, Bank or Other Nominee
If on April 19, 2021, your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name” and the Notice is being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to instruct your broker, bank or other nominee how to vote your shares. See “How do I Vote?”
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if the holders of a majority in voting power of our issued and outstanding shares and entitled to vote at the Annual Meeting are present in person or represented by proxy at the Annual Meeting.
Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the meeting or vote by proxy over the telephone or the Internet as instructed below. Ballots or proxies marked “abstain” or “withheld” on a matter and “broker non-votes” will be counted towards the quorum
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QUESTIONS AND ANSWERS
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requirement. If there is no quorum, the chairperson of the meeting or the holders of a majority of shares present at the meeting in person or represented by proxy at the Annual Meeting may adjourn the meeting to any other time and any other place.
What am I voting on and how many votes are needed to approve each proposal?
PROPOSAL 1:
ELECTION OF DIRECTORS
Directors will be elected by a plurality of the votes cast at the Annual Meeting by the holders of shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the election of directors.
PROPOSAL 2:
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021, will require “FOR” votes from a majority of the votes cast at the Annual Meeting by the holders of shares present in person or represented by proxy at the Annual Meeting and entitled to vote on this proposal.
PROPOSAL 3:
ADVISORY APPROVAL OF EXECUTIVE COMPENSATION
The advisory approval of the compensation of our named executive officers will require “FOR” votes from a majority of the votes cast at the Annual Meeting by the holders of shares present in person or represented by proxy at the Annual Meeting and entitled to vote on this proposal.
Abstentions and broker non-votes will not be counted as votes cast with respect to Proposal 1 and Proposal 3 above and will have no effect on the voting on such proposals.
What are broker non-votes?
Broker non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker, bank or other nominee holding the shares as to how to vote on matters deemed “non-routine.” Generally, if shares are held in street name, the beneficial owner of the shares is entitled to give voting instructions to the broker, bank or other nominee holding the shares. If the beneficial owner does not provide voting instructions, the broker, bank or other nominee may vote the shares with respect to matters that are considered to be “routine,” but may not vote the shares with respect to “non-routine” matters. The election of directors (Proposal 1) and the advisory vote to approve compensation for our named executive officers (Proposal 3) are each considered a “non-routine” matter under applicable rules. The ratification of the appointment of our independent registered public accounting firm (Proposal 2) is considered a “routine” matter under applicable rules. Broker non-votes will not be counted as votes cast with respect to the election of directors (Proposal 1) and the advisory vote to approve compensation for our named executive officers (Proposal 3) and will have no effect on the voting on such proposals.
How many votes do I have?
On each matter to be voted upon, you have one vote for each share of common stock you own as of April 19, 2021.
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QUESTIONS AND ANSWERS
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What does it mean if I receive more than one Notice?
You may receive more than one Notice if your shares are registered in more than one name or are registered in different accounts. Please vote in the manner described below under “How do I vote?” for each Notice to ensure that all of your shares are voted.
How does the Board recommend that I vote my shares?
A description of each proposal in this Proxy Statement as well as the Board’s recommendation with respect to each such proposal is set forth immediately below:
PROPOSALSBOARD VOTE RECOMMENDATIONREQUIRED VOTE
1Election of Class II Directors FOR EACH
NOMINEE
Plurality of votes cast
2
Ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021
FORMajority of votes cast
3Non-binding advisory vote on the compensation of our named executive officers (NEOs)FORMajority of votes cast
With respect to any other matter that properly comes before the Annual Meeting, the proxies will vote as recommended by the Board or, if no recommendation is given, in their own discretion in the best interest of the Company and its stockholders. As of the date of this proxy statement, the Board had no knowledge of any business other than that described herein that would be presented for consideration at the Annual Meeting.
How do I vote?
With respect to the election of directors (Proposal 1), you may vote (1) “FOR ALL,” to vote for all of the nominees to the Board; (2) “WITHHOLD ALL,” to withhold your vote from all of the nominees to the Board; or (3) “FOR ALL EXCEPT,” to vote for all of the nominees to the Board except for any nominee(s) that you specify in the space provided. An instruction to withhold authority to vote for one or more of the nominees will result in those nominees receiving fewer votes, but will not count as a vote against the nominees. With respect to the ratification of the appointment of our independent registered public accounting firm (Proposal 2) and the advisory vote to approve compensation for our named executive officers (Proposal 3), you may vote “FOR” or “AGAINST,” or you may “ABSTAIN” from voting on such proposals. The procedures for voting are as follows:
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may (a) vote in person at the Annual Meeting as described under “Who can vote at the Annual Meeting?” or (b) vote by proxy. Whether or not you plan to attend the meeting, we urge you to fill out and return a proxy card by mail or vote by proxy over the telephone or the Internet as instructed below to ensure your vote is counted. You may still attend the
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meeting and vote in person even if you have already voted by proxy, as described under “May I change my vote after submitting my proxy card?” below.
VOTING METHODVOTING INSTRUCTIONS
Vote at the Annual Meeting
To vote in person, attend the Annual Meeting and we will give you a ballot when you arrive.
Vote by Mail
If you requested printed copies of the proxy materials, you will receive a proxy card. To vote by proxy, simply complete, sign and date the enclosed proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before the Annual Meeting, the designated proxy holders will vote your shares as you direct. Mailed proxy cards must be received no later than June 16, 2021, to be counted.
Vote by Telephone
Call the toll-free telephone number 1-800-690-6903 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the company number and account number from the proxy card you received if you requested printed copies of the proxy materials. Your vote must be received by 11:59 P.M., Eastern Time on June 16, 2021, to be counted.
Vote by Internet
Go to the Internet website www.proxyvote.com to complete an electronic proxy card. You will be asked to provide the company number and account number from the enclosed Notice. Your vote must be received by 11:59 P.M., Eastern Time on June 16, 2021, to be counted.
If you return a proxy but do not make specific choices, your proxy will vote your shares “FOR” each of the nominees to the Board, “FOR” the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm and “FOR” the approval, on an advisory basis, of the compensation of our named executive officers.

If any other matter is presented, the proxies will vote as recommended by the Board or, if no recommendation is given, in their own discretion in the best interest of the Company and its stockholders. As of the date of this proxy statement, we know of no other matters that may be presented at the Annual Meeting, other than those listed in the Notice.
Beneficial Owner: Shares Registered in the Name of a Broker, Bank or Other Nominee
If you are a beneficial owner of shares registered in the name of your broker, bank or other nominee, you should have received voting instructions with the Notice from that organization rather than from us. You may submit voting instructions to your broker, bank or other nominee. In most instances, you will be able to do this over the Internet, by telephone or by mail. Please refer to information from your broker, bank or other nominee on how to submit voting instructions. To vote in person at the Annual Meeting, you must obtain a valid proxy from your broker, bank or other nominee. Follow the instructions from your broker, bank or other nominee included with these proxy materials, or contact your broker, bank or other nominee to request a proxy form.
How can I attend the Annual Meeting?
You are entitled to attend the Annual Meeting only if you were a stockholder of record as of April 19, 2021 or you hold a valid proxy for the Annual Meeting as described in the previous question. Since seating is expected to be limited, admission to the meeting will be on a first-come, first-served basis. You should be prepared to present photo identification for admittance. You may contact us via the Internet or by telephone at (919) 237-5300 to obtain directions on how to vote in person at the Annual Meeting.
If you are not a stockholder of record but hold shares as a beneficial owner, you should provide proof of beneficial ownership as of April 19, 2021, such as your most recent account statement prior to April 19, 2021, a copy of the voting instruction card provided by your broker, bank or other nominee, or other similar evidence of ownership.
We intend to hold the Annual Meeting in person. However, we are actively monitoring the coronavirus (“COVID-19”) situation and are sensitive to the public health and travel concerns our stockholders may have and the protocols that federal, state, and local governments may impose. In the event it is not possible or advisable to hold the Annual Meeting in person, we will announce
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alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication. If we take this step, we will announce the decision to do so in advance by filing Definitive Additional Materials with the SEC along with notice of the change(s) to the Annual Meeting, and details on how to participate will be available on our website at www.aeriepharma.com before the meeting.
Coronavirus (“COVID-19”) safety precautions
Please note that due to the public health impact of the COVID-19 pandemic, attendees at the Annual Meeting will be required to wear protective face coverings and adhere to social distancing guidelines at all times and may be subject to health screening procedures, including a temperature check upon entering the building. Seating may be limited to comply with applicable directives and guidelines from the State of North Carolina and the Centers for Disease Control and Prevention. Attendees will also be asked to leave the meeting promptly after adjournment in an effort to support the health, safety and well-being of our directors, officers and stockholders.
May I change my vote after submitting my vote?
Yes. You can revoke your proxy at any time before the final vote at the Annual Meeting. If you are the stockholder of record of your shares, you may revoke your proxy in any one of the following four ways:
send a timely written revocation of the proxy to our Secretary;
submit a signed proxy card bearing a later date;
enter a new vote over the Internet or by telephone; or
attend and vote in person at the Annual Meeting.
If you are a beneficial owner of shares but not the record holder, you may submit new voting instructions by contacting your broker, bank or other nominee. You will need the appropriate documentation from the stockholder of record to vote in person at the Annual Meeting. If your shares are held by your broker, bank or another party as a nominee or agent, you should follow the instructions provided by such party.
Your personal attendance at the Annual Meeting does not revoke your proxy, unless you vote in person at the Annual Meeting. Your last vote, prior to or at the Annual Meeting, is the vote that will be counted.
Who will bear the expense of soliciting proxies?
We will bear the cost of solicitation of proxies. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodians holding in their names shares of our common stock beneficially owned by others to forward to such beneficial owners. We may reimburse persons representing beneficial owners of our common stock for their costs of forwarding solicitation materials to such beneficial owners. Original solicitation of proxies by mail may be supplemented by solicitation by telephone, via the Internet or in person by our directors, officers or other regular employees. No additional compensation will be paid to directors, officers or other regular employees for such services.
How can I find the voting results from the Annual Meeting?
Preliminary voting results will be announced at our Annual Meeting. Final voting results will be published in a Current Report on Form 8-K that we expect to file no later than four business days from the date of the Annual Meeting. If final voting results are not available by the time we file the Form 8-K within the time period referenced in the immediately preceding sentence, we will disclose the preliminary results in such Form 8-K and, within four business days after the final voting results are known to us, file an amended Form 8-K to disclose the final voting results.
Who will count the votes?
A representative of American Election Services will act as the inspector of elections and count the votes.
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QUESTIONS AND ANSWERS
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Obtaining our Form 10-K
We will provide a copy of our Form 10-K without charge, upon written request, to any registered or beneficial owner of common stock entitled to vote at the Annual Meeting. Requests can be made by email, sendmaterial@proxyvote.com, or in writing addressed to Richard J. Rubino, Secretary, Aerie Pharmaceuticals, Inc., 4301 Emperor Boulevard, Suite 400, Durham, North Carolina 27703. Please include your control number with your request. The SEC also maintains a website at www.sec.gov that contains reports, proxy statements and other information regarding registrants, including our Company.
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OUR BOARD OF DIRECTORS
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OUR BOARD OF DIRECTORS


INFORMATION ABOUT OUR BOARD OF DIRECTORS
Board Composition
Our Board is currently comprised of eight directors. Our amended and restated certificate of incorporation provides for a classified Board consisting of three classes of directors, each of which shall consist, as nearly as may be possible, of one-third of the total number of directors. Currently, two classes consist of three directors and one class consists of two directors. Each class serves a staggered three-year term. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following their election.
DIRECTOR NOMINEECLASS
AGE(1)
POSITION(S)
HELD
DIRECTOR SINCECOMMITTEE
MEMBERSHIP
Mechiel (Michael) M. du ToitII68Independent Director2015Chair - Nominating & Corporate Governance
David W. GryskaII65Independent Director2018Chair - Audit
CONTINUING DIRECTORS
Vicente Anido, Jr., Ph.D.I68Chief Executive Officer and Chairman of the Board2013Executive - Board Chairman
Benjamin F. McGraw, III, Pharm.D.I72Lead Independent Director2014Chair - Compensation
Julie McHughI56Independent Director2015Audit;
Nominating & Corporate Governance
Gerald D. Cagle, Ph.D.III76Independent Director2013Compensation;
Nominating & Corporate Governance
Richard CroarkinIII66Independent Director2015Audit;
Compensation
Peter J. McDonnell, M.D.III63Independent Director2020Compensation;
Nominating & Corporate Governance
(1) Age as of April 19, 2021.
The terms of our Class II directors, Mechiel (Michael) M. du Toit and David W. Gryska, will expire at the Annual Meeting, and the terms of our Class III and Class I directors will expire at the annual meeting of stockholders to be held in 2022 and 2023, respectively.
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Governance Highlights
Our Board is committed to building long-term stockholder value and maintaining sound corporate governance practices. We highlight some of our corporate governance practices below.
Number of directors8
Percentage of directors who are independent88%
Directors who attended at least 75% of board and committee meetings in 2020ALL
Strong and active lead independent directorü
100% independent audit, compensation and nominating and corporate governance committees ü
Board and committees may engage outside advisors independent of managementü
Annual board and committee self-evaluationsü
Active stockholder engagement programü
Corporate governance guidelines ü
Corporate governance guidelines formalize the consideration of diversity factors for director nomineesü
Stock ownership guidelines for directors and executive officersü
No hedging or monetization transactionsü
All employees, officers and directors must adhere to Code of Business Conduct and Ethicsü

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Diversity of Skills(1)
As illustrated in the matrix below, we believe our directors possess the professional and personal qualifications and necessary experience both within and outside of the ophthalmology industry to maintain a diverse and experienced board of directors that can effectively represent stockholders.
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Board Tenure(1)(2)
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(1) The charts are depicting skill and tenure out of 8 total directors.
(2) Board Tenure as of the Annual Meeting date.

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The Nominating and Corporate Governance Committee periodically determines the qualifications, qualities, skills and other expertise required to be considered in selecting director-nominees. Among other things, the Nominating and Corporate Governance Committee considers whether the Board reflects the balance of knowledge, experience, skills, expertise, integrity, ability to make analytical inquiries and diversity as a whole that the committee deems appropriate. The process followed by the Nominating and Corporate Governance Committee to identify and evaluate director candidates includes requests to current directors and others for recommendations, meetings from time to time to evaluate biographical information and background material relating to potential candidates and interviews of selected candidates by members of the committee and the Board. The Nominating and Corporate Governance Committee may use outside consultants to assist in identifying or evaluating candidates. Final approval of director candidates is determined by the full Board.
The Nominating and Corporate Governance Committee will consider qualified nominations for directors recommended by stockholders. In general, stockholder recommendations are evaluated on the same basis as any recommendation from members of the Board or management of the Company. Recommendations should be sent to Richard J. Rubino, Secretary, c/o Aerie Pharmaceuticals, Inc., 4301 Emperor Boulevard, Suite 400, Durham, North Carolina 27703. For additional information about our director nomination requirements, please see “Stockholder Proposals and Nominations” below and our amended and restated by-laws.
Annual Evaluations
The Board and its committees conduct annual self-evaluations to assess the effectiveness of the Board and its committees. The self-evaluations focus on the Board’s and each committee’s and their respective members’ performance and contribution to the governance of the Company. The Nominating and Corporate Governance Committee is responsible for developing the framework for such annual self-evaluations. The full Board discusses the results of its self-evaluation and each committee also provides the full Board with a summary of the results of their respective self-evaluations. This process is designed to ensure that the Board and each committee receive constructive feedback from our directors and that each committee evaluates, on an annual basis, whether it is adequately fulfilling the responsibilities set forth in its charter.
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Set forth and described below are the names, ages (as of April 19, 2021), principal occupations and business experience, as well as their prior service on the Board, for the nominees for election as directors at the Annual Meeting and for the remaining members of our Board whose terms continue beyond the Annual Meeting. Unless otherwise indicated, principal occupations described below for each director have extended for five or more years.
INFORMATION ABOUT DIRECTOR NOMINEES
MECHIEL (MICHAEL) M. DU TOIT
Mechiel (Michael) M. du Toit has served as a member of our Board since June 2015.

In December 2017, Mr. du Toit was appointed Chief Growth Officer of Publicis Health, a division of Publicis Groupe, S.A., the third largest advertising and media company in the world. Mr. du Toit previously served as President and Chief Client Officer of Everyday Health since February 2015. Prior to this, Mr. du Toit served in various positions, including Global Group President of Publicis Healthcare Communications Group from March 2012 to February 2015. Mr. du Toit held various senior executive positions from July 2006 to February 2012 at other companies, including President of Digitas Health, where he was a founding member, Digitas Health Media and RazorFish Health. Mr. du Toit also has held executive roles at premier marketing agencies including Grey Advertising, BBD&O and Ventiv Health Communications.

Mr. du Toit also held senior marketing positions at pharmaceutical companies such as GlaxoSmithKline and Boehringer Ingelheim Pharmaceuticals. At Glaxo, as Vice President of Marketing, Mr. du Toit launched several blockbuster pharmaceutical products, including Serevent® (salmeterol) and Flonase® (fluticasone nasal). Mr. du Toit previously served as member of the National Pharmaceutical Council, Pharmaceutical Advertising Council, Advertising Club of Fairfield, Advertising Club of New York, Editorial Board of Medical Marketing and Media, Prescription Drug Advertising Coalition, and Triangle Advertising Federation. He started his career at Unilever, a consumer products company. Mr. du Toit received a B.S. in Economics and Marketing from Stellenbosch University in South Africa.

We believe that Mr. du Toit’s pharmaceutical industry and business experience provides him with the qualifications and skills to serve as a member of our Board.
INDEPENDENT DIRECTOR
Age: 68
Director Since: 2015
Committees:
Chair - Nominating & Corporate Governance
DAVID W. GRYSKA
David W. Gryska rejoined our Board in September 2018 after serving as a member of our Board from March 2012 through May 2015.

Mr. Gryska retired from Incyte Corp. at the end of 2018, where he was Chief Financial Officer and Executive Vice President. Mr. Gryska currently serves on the board of directors of Seattle Genetics, Inc. and GW Pharmaceuticals plc.

Mr. Gryska has spent over 25 years as a senior executive at life science and biotechnology companies with extensive experience relating to financings, acquisitions, global expansion and strategic transactions. Prior to joining Incyte Corp., Mr. Gryska held positions including Chief Operating Officer at Myrexis, Inc., Chief Financial Officer and Senior Vice President at Celgene Corp., and Chief Financial Officer and Senior Vice President at Scios, Inc. Mr. Gryska holds a B.A. in Accounting and Finance from Loyola University in Chicago and an M.B.A. from Golden State University.

We believe that Mr. Gryska’s business and finance experience at various companies in the pharmaceutical industry provides him with the qualifications and skills to serve as a member of our Board.
INDEPENDENT DIRECTOR
Age: 65
Director Since: 2018
Committees:
Chair - Audit

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Information About Directors Continuing in Office
GERALD D. CAGLE, Ph.D.
Gerald D. Cagle, Ph.D. has served as a member of our Board since September 2013.

Dr. Cagle was appointed Senior Vice President of Research & Development at Alcon Laboratories Inc. in 1997, a position he held until 2009. From 2009 until his retirement in 2013, Dr. Cagle held the position of Chief Operating Officer at Cognoptix, a company focused on the diagnosis of Alzheimer's disease.

Dr. Cagle also serves on the board of directors of GrayBug, Inc., Nacuity Pharmaceuticals, Inc., AB2 Bio Ltd. and Novaliq GmbH. Dr. Cagle received his B.S. from Wayland College, earned both his M.S. and Ph.D. from the University of North Texas and completed the Program for Management Development at Harvard Business School.

We believe that Dr. Cagle’s scientific background and experience provides him with the qualifications and skills to serve as a member of our Board.
INDEPENDENT DIRECTOR
Age: 76
Director Since: 2013
Committees:
Member - Compensation
Member - Nominating & Corporate Governance
RICHARD CROARKIN
Richard Croarkin has served as a member of our Board since May 2015.

Mr. Croarkin previously was Chief Financial Officer of Nestle Health Science, a division of Nestle focused on medicalized nutrition solutions for chronic medical conditions, from December 2010 to February 2013.

From 2007 to 2010, Mr. Croarkin was Senior Vice President, Chief Financial Officer, and Corporate Strategy Officer at Alcon, which had annual sales of $7.1 billion and was the world’s leading ophthalmic pharmaceutical and medical device company before its acquisition by Novartis for $50 billion. In 2008 and 2009, Mr. Croarkin also served as a director on the supervisory board of the German publicly-traded company, WaveLight A.G., which manufactures and globally markets laser and diagnostic systems for refractive eye surgery. Previously, Mr. Croarkin was Executive Vice President and Chief Financial Officer of Nestle Waters North America, overseeing the finances of a business unit that grew to $4.4 billion in sales. Before joining Nestle, Mr. Croarkin worked for Pepsico Incorporated, where he served in a number of senior financial positions around the world, including as Chief Financial Officer of Pepsi Latin America and Pepsi Canada. Mr. Croarkin started his career with AMAX, Inc., where he worked in treasury, corporate development and planning.

Mr. Croarkin currently serves as a member of the board of directors of Clearside Biomedical, a company advancing eye disease therapies by delivering drugs to the suprachoroidal space via a proprietary microinjector. He also serves on occasion as a panelist on the NASDAQ Listing Qualifications Panel. In 2018, Mr. Croarkin was elected to the Board of Waveny LifeCare Network, Inc., a not-for-profit nursing home and healthcare provider for Southwestern Connecticut’s senior population. Mr. Croarkin received his B.A. in Economics from Georgetown University and his M.B.A. in Finance from the University of Connecticut.

We believe that Mr. Croarkin’s business and finance experience at various companies in the pharmaceutical industry provides him with the qualifications and skills to serve as a member of our Board.
INDEPENDENT DIRECTOR
Age: 66
Director Since: 2015
Committees:
Member - Audit
Member - Compensation
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PETER J. MCDONNELL, M.D.
Peter J. McDonnell, M.D. has served as a member of our Board since June 2020.

Dr. McDonnell has been the William Holland Wilmer Professor and Director of the Wilmer Eye Institute of the Johns Hopkins University School of Medicine since 2003. Dr. McDonnell has also served as the Chief Medical Editor of Ophthalmology Times since 2004, and has served on the editorial boards of numerous ophthalmology journals.

Dr. McDonnell also serves as Immediate Past President and director of the National Alliance for Eye and Vision Research and the Alliance for Eye and Vision Research. He is Vice President of the PanAmerican Ophthalmological Association, the second largest professional organization of ophthalmologists in the world. In addition, Dr. McDonnell served as a member of the board of directors of Allergan from 2013 to 2020.

Dr. McDonnell is a graduate of the Johns Hopkins University School of Medicine and upon completion of his residency and fellowship he served as the Assistant Chief of Service at the Wilmer Eye Institute from 1987 to 1988. Dr. McDonnell served as a full-time faculty at the University of Southern California from 1988 until 1999, where he advanced to the rank of professor in 1994. In 1999 he became the Irving H. Leopold Professor and Chair of the Department of Ophthalmology at the University of California, Irvine. Dr. McDonnell is a member of the Achievement Rewards for College Scientists (ARCS) Foundation Alumni Hall of Fame.

We believe that Dr. McDonnell’s significant ophthalmology and academic experiences provide him with the qualifications and skills to serve as a member of our Board.
INDEPENDENT DIRECTOR
Age: 63
Director Since: 2020
Committees:
Member - Compensation
Member - Nominating & Corporate Governance
VICENTE ANIDO, JR., Ph.D.
Vicente Anido, Jr., Ph.D. has served as our Chief Executive Officer since July 2013 and as Chairman of our Board since April 2013.

Dr. Anido is the former President, Chief Executive Officer and Director of ISTA Pharmaceuticals, Inc., which was acquired by Bausch + Lomb, Inc. in 2012. Prior to joining ISTA Pharmaceuticals, Dr. Anido served as General Partner of Windamere Venture Partners from 2000 to 2001. From 1996 to 1999, Dr. Anido served as President and Chief Executive Officer of CombiChem, Inc., a drug discovery company. From 1993 to 1996, Dr. Anido served as President of the Americas Region of Allergan, Inc., where he was responsible for Allergan’s commercial operations for North and South America. Prior to joining Allergan, Dr. Anido spent 17 years at Marion Laboratories and Marion Merrell Dow, Inc., including as Vice President, Business Management of Marion’s U.S. Prescription Products Division.

Dr. Anido previously served as a member of the board of directors of QLT Inc. from 2012 to 2013, Depomed, Inc. from February 2013 to May 2016 and Nicox S.A. from June 2013 to June 2014. In addition, from 2002 to 2008, Dr. Anido served as a member of the board of directors of Apria Healthcare, Inc. Dr. Anido holds a B.S. and a M.S. from West Virginia University and a Ph.D. from the University of Missouri, Kansas City.

We believe Dr. Anido’s experience in the pharmaceutical industry, sales and marketing, business development and pharmaceutical product launch and his experience serving as a director of other public companies provide him with the qualifications and skills to serve as a member of our Board.
CHIEF EXECUTIVE OFFICER & CHAIRMAN
Age: 68
Director Since: 2013
Chief Executive Officer
Chairman of the Board
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BENJAMIN F. MCGRAW, III, Pharm.D.
Benjamin F. McGraw, III, Pharm.D. has served as a member of our Board since September 2014.

Dr. McGraw has served as Executive Chairman and Chairman and Chief Executive Officer of TheraVida, Inc., a specialty pharmaceutical company, since 2011 and 2013, respectively. Dr. McGraw has also served as Executive Chairman of Auration Biotech, Inc., a private biotechnology company focused on regenerative therapies for ear, nose and throat diseases since 2014.

Dr. McGraw has served as a board member and as Executive Chairman of Trefoil Therapeutics Inc., an early stage biopharmaceutical company focused on developing a regenerative approach to corneal endothelial dystrophies and other diseases since 2017 and 2018, respectively. Dr. McGraw has also served as a Managing Member of Long Shadows Asset Management, LLC, an advisory company. Previously, Dr. McGraw was Chairman, President, and Chief Executive Officer of Valentis, Inc., Corporate Vice President, Corporate Development at Allergan, Inc., and Vice President, Development at Marion Laboratories, Inc. and Marion Merrell Dow Inc.

Dr. McGraw received his B.S. and his Doctor of Pharmacy from the University of Tennessee Health Science Center, where he also completed a clinical practice residency.

We believe that Dr. McGraw’s pharmaceutical industry and business experience provides him with the qualifications and skills to serve as a member of our Board.
LEAD INDEPENDENT DIRECTOR
Age: 72
Director Since: 2014
Committees:
Chair - Compensation
JULIE MCHUGH
Julie McHugh has served as a member of our Board since June 2015.

Ms. McHugh served as Chief Operating Officer of Endo Health Solutions, Inc. from March 2010 until her retirement in May 2013, where she was responsible for the specialty pharmaceutical and generic drug businesses. Prior to this, Ms. McHugh was Chief Executive Officer of Nora Therapeutics, Inc., a venture capital backed biotech start-up company focused on developing novel therapies for the treatment of infertility disorders. Previously, Ms. McHugh served as Company Group Chairman for Johnson & Johnson’s worldwide virology business unit, and prior to this, she was President of Centocor, Inc., a J&J subsidiary. In this role, Ms. McHugh oversaw the development and launches of several products, including Remicade® (infliximab), Prezista® (darunavir) and Intelence® (etravirine). Prior to joining Centocor, Ms. McHugh led marketing communications for gastrointestinal drug Prilosec® (omeprazole) at Astra-Merck Inc.

Ms. McHugh currently serves as chair of the board of directors of Ironwood Pharmaceuticals, Inc. and member of the board of directors of Lantheus Holdings, Inc., New Xellia Group A/S, Evelo Biosciences, Inc. and Trevena Pharmaceuticals, Inc. (through May 13, 2021). Ms. McHugh previously served on the board of directors of the Biotechnology Industry Organization (BIO), the New England Healthcare Institute (NEHI), the Pennsylvania Biotechnology Association, EPIRUS Biopharmaceuticals, Inc. and ViroPharma Inc. Ms. McHugh received her M.B.A. from St. Joseph’s University and her B.S. from Pennsylvania State University.

We believe that Ms. McHugh’s pharmaceutical and business experience provides her with the qualifications and skills to serve as a member of our Board.
INDEPENDENT DIRECTOR
Age: 56
Director Since: 2015
Committees:
Member - Audit
Member - Nominating & Corporate Governance
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Director Compensation
Pursuant to the Company’s non-employee director compensation policy, each non-employee director is eligible to receive a prorated annual cash retainer, as well as additional retainers for service as our Lead Independent Director or service on committees of the Board, as detailed below.

COMPENSATION ELEMENTCASH COMPENSATION
Board of Directors
Lead Independent Director Retainer$25,000
Directors’ Annual Retainer$50,000
Committee Chair
Audit Committee$20,000
Compensation Committee$17,500
Nominating and Corporate Governance Committee$10,000
Committee Member (Non-Chair)
Audit Committee$10,000
Compensation Committee$7,500
Nominating and Corporate Governance Committee$5,000
All amounts are paid in quarterly installments. We reimburse each of our directors for their travel expenses incurred in connection with their attendance at Board and committee meetings.
In addition, newly appointed non-employee directors shall be eligible to receive a one-time initial option award to purchase 25,000 shares of common stock, which will vest quarterly over a three-year period subject to the director’s continued service on the Board.
Pursuant to the Company’s current non-employee director equity compensation policy, each continuing non-employee director shall be eligible to receive on the date of each annual meeting of stockholders an annual option award to purchase 7,800 shares of common stock and 1,750 shares of restricted stock. Stock options vest in 12 equal monthly installments and restricted stock vests on the one-year anniversary of the date of grant, subject to the director’s continued service on the Board.
Director Compensation Table
The following table sets forth the compensation paid to our non-employee directors for the year ended December 31, 2020, for their service on our Board.
NAMEFEES EARNED OR PAID IN CASHOPTION AWARDS STOCK AWARDSTOTAL
Gerald D. Cagle, Ph.D.
$64,725$63,997(1)(2)$23,223(3)$151,945
Richard Croarkin
$64,162$63,997(1)(4)$23,223(3)$151,382
Mechiel (Michael) M. du Toit
$61,113$63,997(1)(4)$23,223(3)$148,333
David W. Gryska
$67,775$63,997(1)(5)$23,223(3)$154,995
Peter J. McDonnell, M.D.
$35,027$241,892(6)$—$276,919
Benjamin F. McGraw, III, Pharm.D.
$92,500$63,997(1)(7)$23,223(3)$179,720
Julie McHugh
$65,000$63,997(1)(4)$23,223(3)$152,220
(1)The amounts included represent the grant date fair value of an option to purchase 7,800 shares of common stock granted on June 11, 2020, all of which were outstanding as of December 31, 2020. Each option is scheduled to vest in 12 equal monthly installments commencing on
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June 11, 2020. The grant date fair value was computed in accordance with ASC 718. The valuation assumptions used in determining such amounts are described in the notes to our audited consolidated financial statements incorporated herein by reference to our Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on February 26, 2021.
(2)In addition to the option awards granted during 2020, this director has options to purchase 87,100 shares of common stock, all of which were outstanding as of December 31, 2020.
(3)The amounts included represent the grant date fair value of 1,750 shares of restricted stock granted on June 11, 2020, which is scheduled to fully vest on June 11, 2021. The grant date fair value was computed in accordance with ASC 718. The valuation assumptions used in determining such amounts are described in the notes to our audited consolidated financial statements incorporated herein by reference to our Form 10-K filed with the SEC on February 26, 2021.
(4)In addition to the option awards granted during 2020, this director has options to purchase 60,600 shares of common stock, all of which were outstanding as of December 31, 2020.
(5)In addition to the option awards granted during 2020, this director has options to purchase 32,800 shares of common stock, all of which were outstanding as of December 31, 2020.
(6)This newly appointed director received a one-time initial option award to purchase 25,000 shares of common stock, which will vest quarterly over a three-year period subject to the director’s continued service on the Board. The amounts included represent the grant date fair value of such options. The grant date fair value was computed in accordance with ASC 718. The valuation assumptions used in determining such amounts are described in the notes to our audited consolidated financial statements incorporated herein by reference to our Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on February 26, 2021.
(7)In addition to the option awards granted during 2020, this director has options to purchase 70,600 shares of common stock, all of which were outstanding as of December 31, 2020.
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Information about Corporate Governance
Board of Directors and Corporate Governance Guidelines
Our corporate governance guidelines provide a framework for the governance of the Company as a whole and describe the principles and practices that our Board follows in carrying out its responsibilities.
In accordance with our corporate governance guidelines, the Board does not involve itself in the day-to-day operations of the Company. The Board directs and oversees the management of the business and affairs of the Company in a manner consistent with the best interests of the Company and its stockholders. In this oversight role, the Board serves as the ultimate decision-making body of the Company, except for those matters reserved to or shared with the Company’s stockholders. The Board selects and oversees the members of senior management, who are charged by the Board with conducting the business of the Company.
Our directors fulfill their duties and responsibilities by attending meetings of the Board, which are held from time to time, and, as applicable, meetings of the three standing committees of the Board (the Audit Committee, the Nominating and Corporate Governance Committee and the Compensation Committee), which are also held from time to time.
The Board held eleven meetings during the year ended December 31, 2020. Of the eleven meetings held during such period, four meetings were held in person and seven meetings were held telephonically or via video teleconference. Except for Dr. Cagle, who attended ten of the eleven meetings of the Board during the year ended December 31, 2020, each incumbent director attended one hundred percent (100%) of the meetings of the Board held during the period for which he or she served as a director during the year ended December 31, 2020. In addition, each incumbent director attended one hundred percent (100%) of the meetings of the committee(s) on which that director served during such period. With respect to the single Board meeting during the year ended December 31, 2020 which Dr. Cagle did not attend, Dr. Cagle notified the Company in advance of the absence and discussed the applicable meeting agenda and materials with Company management and other directors prior to and subsequent to such meeting.
It is our policy to encourage our directors to attend the Annual Meeting. All nominees for director and all directors continuing in office then serving attended our 2020 Annual Meeting. It is currently anticipated that all members of the Board will be in attendance at the Annual Meeting.
Board of Directors’ Independence
Under the listing requirements and rules of the NASDAQ Global Market (“NASDAQ”) independent directors must compose a majority of a listed company’s board of directors. In addition, applicable NASDAQ rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating committees must be independent within the meaning of applicable NASDAQ rules. Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Our Board has undertaken a review of the independence of each director and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. In making this determination, our Board considered the current and prior relationships that each non-employee director has with our Company and all other facts and circumstances our Board deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director. As a result of this review, our Board determined that Dr. Cagle, Mr. Croarkin, Mr. du Toit, Mr. Gryska, Dr. McDonnell, Dr. McGraw and Ms. McHugh qualify as “independent” directors within the meaning of the NASDAQ rules. As required under applicable NASDAQ rules, our independent directors meet in regularly scheduled executive sessions at which only independent directors are present. The purpose of these executive sessions is to promote open and candid discussion among the non-employee directors.
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Committees of the Board of Directors
The Board has three committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. The following table provides membership information at December 31, 2020 and lists the number of meetings held during 2020, for each committee:
NAMEAUDITNOMINATING AND CORPORATE GOVERNANCECOMPENSATION
Gerald D. Cagle, Ph.D.
 XX
Richard Croarkin **
XX
Mechiel (Michael) M. du Toit
X*
David W. Gryska**
X*
Peter J. McDonnell, M.D.
XX
Benjamin F. McGraw, III, Pharm.D.***
 X*
Julie McHugh
XX
Total meetings in 2020
8511
*Committee Chair
**Financial Expert
***Lead Independent Director
Audit Committee
The members of our Audit Committee include Mr. Gryska, Mr. Croarkin and Ms. McHugh. Mr. Gryska serves as chair of the Audit Committee. The Audit Committee held eight meetings during the year ended December 31, 2020. Of the eight meetings held during such period, two meetings were held in person and six meetings were held telephonically or via video teleconference. The Audit Committee operates under a written charter that satisfies the applicable standards of the SEC and NASDAQ and which is available on our website at www.aeriepharma.com. The inclusion of our website address here and elsewhere in this proxy statement does not incorporate by reference the information on our website into this proxy statement.
Our Board has determined that Mr. Gryska, Mr. Croarkin and Ms. McHugh are independent as independence is currently defined in Rule 5605 of the NASDAQ listing standards and Rule 10A-3 under the Exchange Act. In addition, our Board has determined that each member of the Audit Committee is financially literate and that Mr. Gryska and Mr. Croarkin each qualifies as an “audit committee financial expert” as defined in applicable SEC rules. In making this determination, our Board has considered the formal education and nature and scope of their previous professional experience, coupled with past and present service on various audit committees.
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AUDIT COMMITTEEKEY FUNCTIONS &
RESPONSIBILITIES

Chair:
David W. Gryska

Other Members:
Richard Croarkin
Julie McHugh
Reviewing our annual and quarterly financial statements and reports, discussing the statements and reports with our independent registered public accounting firm and management and recommending to the Board whether to include the financial statements in the annual reports filed with the SEC;

discussing the type of information to be disclosed and the type of presentation to be made regarding financial information and other disclosures and guidance to analysts;

overseeing our disclosure controls and procedures, including internal control over our financial reporting, and reviewing and discussing our management’s periodic review of the effectiveness of our internal control over financial reporting;

reviewing with our independent registered public accounting firm and management significant issues that arise regarding accounting principles and financial statement presentation, matters concerning the scope, adequacy and effectiveness of our financial controls and any other matters, correspondence or reports that raise issues with or could have a material effect on our financial statements;

retaining, appointing, setting compensation of and evaluating the performance, independence, internal quality control procedures and qualifications of our independent auditors, as required by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”);

reviewing and approving in advance the engagement of our independent registered public accounting firm to perform audit services and any permissible non-audit services to be performed by our independent registered public accounting firm or any other registered public accounting firm;

reviewing with our independent registered public accounting firm the planning and staffing of the audit, including the rotation requirements and other independence rules;

reviewing and, if acceptable, approving any related person transactions in accordance with our related party transaction policy;

overseeing and discussing with management our policies with respect to risk assessment and risk management, and any significant financial and operational risk exposures;

setting policies for our hiring of employees or former employees of our independent registered public accounting firm.

reviewing the adequacy of our Audit Committee charter at least annually;

establishing procedures for receipt, retention and treatment of complaints regarding internal accounting controls and auditing matters, and for confidential, anonymous submissions of accounting and auditing concerns by employees; and

monitoring compliance with legal and regulatory requirements and approving or disapproving any related-persons transactions after due consideration of any such related-person transaction.
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AUDIT COMMITTEE REPORT(1)
The Audit Committee has reviewed and discussed the audited consolidated financial statements for the fiscal year ended December 31, 2020, with management and our independent registered public accounting firm, PricewaterhouseCoopers LLP. The Audit Committee has discussed with PricewaterhouseCoopers LLP the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU Section 380), as adopted by the PCAOB in Rule 3200T and the Commission. The Audit Committee has also received the written disclosures and the letter from PricewaterhouseCoopers LLP required by applicable requirements of the PCAOB regarding PricewaterhouseCoopers LLP’s communication with the Audit Committee concerning independence, and has discussed with PricewaterhouseCoopers LLP the firm’s independence. Based on the foregoing, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in our Form 10-K for the fiscal year ended December 31, 2020, for filing with the Securities and Exchange Commission.
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 Audit Committee
 
David W. Gryska, Chair
Richard Croarkin
Julie McHugh

(1)The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing we make under either the Securities Act of 1933, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
Nominating and Corporate Governance Committee
The members of our Nominating and Corporate Governance Committee are Mr. du Toit, Dr. Cagle, Dr. McDonnell and Ms. McHugh. Mr. du Toit serves as chair of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee held five meetings during the year ended December 31, 2020. Of the five meetings held during such period, two meetings were held in person and three meetings were held telephonically or via video teleconference. In addition to such meetings, during the year ended December 31, 2020, the members of the Nominating and Corporate Governance Committee engaged in periodic informal discussion amongst themselves regarding the responsibilities of the Nominating and Corporate Governance Committee.
Our Board has determined that all members of our Nominating and Corporate Governance Committee are independent as independence is currently defined in Section 5605 of the NASDAQ listing standards. The Nominating and Corporate Governance Committee operates under a written charter that satisfies the applicable standards of NASDAQ and which is available on our website at www.aeriepharma.com. The inclusion of our website address here and elsewhere in this proxy statement does not incorporate by reference the information on our website into this proxy statement.
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NOMINATING AND CORPORATE GOVERNANCE COMMITTEEKEY FUNCTIONS &
RESPONSIBILITIES

Chair:
Mechiel (Michael) M. du Toit

Other Members:
Gerald D. Cagle, Ph.D.
Peter J. McDonnell, M.D.
Julie McHugh

Identifying, considering and nominating candidates to serve on our Board;

developing and recommending the minimum qualifications for service on our Board;

overseeing the evaluation of the Board and management on an annual basis;

considering nominations by stockholders of candidates for election to the Board;

reviewing annually the independence of the non-employee directors and members of the independent committees of the Board;

review the composition of the Board as a whole and recommend to the Board, if necessary, any measures to be taken so that the Board contains at least the minimum number of independent directors as may be required by applicable SEC and NASDAQ rules and reflects the balance of knowledge, experience, skills, expertise, integrity, ability to make analytical inquiries and diversity as a whole that the Nominating and Corporate Governance Committee deems appropriate;

make recommendations to the Board regarding the chairperson, membership, size and composition of each standing committee of the Board and make recommendations to the Board regarding individual directors to fill any committee vacancies;

review the suitability for continued service as a director of each Board member when his or her term expires and recommend to the Board whether such director should be re-nominated for re-election;

periodically review the size of the Board and recommend to the Board any appropriate changes;

review any proposed changes to our certificate of incorporation, by-laws and other corporate governance documents, and make recommendations to the Board with respect to any such changes;

oversee compliance with, and consider any requests for waivers under, our corporate governance guidelines, our code of business conduct and ethics and other documents and policies constituting our corporate governance framework and report on any waiver of our code of business conduct and ethics to the Board (provided that any waiver of our code of business and ethics with respect to our executive officers or any director may only be granted by the full Board);

oversee ESG strategy and policies and review our operations with senior management to assess our progress in realizing these values;

developing the overall framework for the annual self-evaluation conducted by the Board and each of its committees;

reviewing the adequacy of its charter, our corporate governance guidelines and our code of business conduct and ethics on an annual basis and recommending to our Board any changes to our corporate governance guidelines and code of business conduct and ethics deemed appropriate;

considering questions of possible conflicts of interest of directors as such questions arise with regard to outside directorship commitments; and

considering whether a director has sufficient time available to continue to perform all Board and committee responsibilities and duties effectively, taking into account, among other factors, service as a director on other public company boards.


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Compensation Committee
The members of our Compensation Committee are Dr. McGraw, Dr. Cagle, Mr. Croarkin and Dr. McDonnell. Dr. McGraw serves as chair of the Compensation Committee. The Compensation Committee held eleven meetings and acted by written consent once during the year ended December 31, 2020. Of the eleven meetings held during such period, three meetings were held in person and eight meetings were held telephonically or via video teleconference. All members of our Compensation Committee are independent pursuant to the definition contained in Section 5605 of the NASDAQ listing standards and qualify as outside directors under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). The Compensation Committee operates under a written charter that satisfies the applicable standards of NASDAQ and is available on our website at www.aeriepharma.com. The inclusion of our website address here and elsewhere in this proxy statement does not incorporate by reference the information on our website into this proxy statement.
COMPENSATION
COMMITTEE
KEY FUNCTIONS &
RESPONSIBILITIES

Chair:
Benjamin F. McGraw, III, Pharm.D.

Other Members:
Gerald D. Cagle, Ph.D.
Richard Croarkin
Peter J. McDonnell, M.D.


Approving the compensation and other terms of employment of our Chief Executive Officer, which are then reviewed and ratified by our Board;

approving or recommending to our Board the compensation and other terms of employment of our executive officers (other than our Chief Executive Officer);

approving annually the corporate goals and objectives relevant to the compensation of our Chief Executive Officer and assessing at least annually our Chief Executive Officer’s performance against these goals and objectives;

reviewing annually our compensation strategy, including base salary, incentive compensation and equity-based grants, as well as adoption, modification or termination of this compensation;

evaluating at least annually and recommending to our Board the type and amount of compensation to be paid or awarded to non-employee Board members;

reviewing the competitiveness of our executive compensation programs and evaluating the effectiveness of our compensation policy and strategy in achieving expected benefits to us;

approving the terms of any employment agreements, severance arrangements, change in control protections and any other compensatory arrangements for our executive officers;

overseeing the Company’s strategy and policies related to human capital management, including with respect to matters such as diversity and inclusion; talent and development; health and safety; and compensation and benefits; and

reviewing the adequacy of our Compensation Committee charter on an annual basis.



As part of its process for approving or recommending to the Board the compensation for our senior executives, the Compensation Committee reviews and considers the recommendations made by our Chief Executive Officer, other than for the chief executive officer.
In fulfilling its responsibilities, the Compensation Committee may delegate any or all of its responsibilities to a subcommittee of the Compensation Committee, but only to the extent consistent with our amended and restated certificate of incorporation, amended and restated by-laws, Section 162(m) of the Code, NASDAQ rules and other applicable law.
In addition, pursuant to its charter, the Compensation Committee has the sole authority to retain compensation consultants to assist in its evaluation of executive and director compensation. At the beginning of the 2020 fiscal year, the Compensation Committee continued its engagement with Pearl Meyer & Partners LLC (“Pearl Meyer”) as its independent compensation advisor.
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In the second quarter of the fiscal year 2020, the Compensation Committee engaged ClearBridge Compensation Group (“ClearBridge”) as its independent compensation advisor for the remainder of the fiscal year ended December 31, 2020.
Compensation Committee Interlocks and Insider Participation
Dr. McGraw, Dr. Cagle, Mr. Croarkin or Dr. McDonnell served on our Compensation Committee during the fiscal year ended December 31, 2020. None of Dr. McGraw, Dr. Cagle, Mr. Croarkin or Dr. McDonnell have ever been an officer or employee of the Company. None of our executive officers served as a member of the board of directors or compensation committee of any other entity that has one or more of its officers serving on our Board or Compensation Committee during the fiscal year ended December 31, 2020. No member of our Compensation Committee had any relationship with the Company or any of its subsidiaries during fiscal year 2020 pursuant to which disclosure would be required under applicable SEC rules pertaining to the disclosure of transactions with related persons.
Board Leadership
Our Board selects a chair based on what it believes is in the best interests of the Company and our stockholders. The Board does not have a fixed policy on whether the role of chair and chief executive officer should be separate or combined, and if it is to be separate, whether the chair should be selected from the independent directors or should be an employee of the Company.
Dr. Anido, our Chief Executive Officer, currently serves as chair of our Board. Our Board believes that this leadership structure is presently appropriate for the Company given Dr. Anido’s extensive experience with and knowledge of the pharmaceutical industry and his ability to effectively identify strategic priorities for the Company. Furthermore, our Board believes that Dr. Anido’s combined role of chief executive officer and chair promotes effective execution of strategic goals and facilitates information flow between management and our Board. Dr. Anido chairs all Board meetings, except for executive sessions at which only independent directors are present. Our corporate governance guidelines require that whenever the chair of the Board is also the chief executive officer or is otherwise a director who does not qualify as an independent director that the independent directors of the Board elect from among themselves a lead independent director. When and as required pursuant to our corporate governance guidelines, a lead independent director is to be elected at least once annually following the nomination of an independent director as a lead independent director nominee by our Nominating and Corporate Governance Committee and the election, by a majority vote of the Board’s independent directors, of such nominee or another independent director of the Board.
Dr. McGraw currently serves as the lead independent director. The primary responsibilities of the lead independent director are set forth in our corporate governance guidelines and include, among other things: providing leadership and service as temporary chair or chief executive officer in the event of the inability of the current chair or chief executive officer to fulfill his or her role due to crisis or other circumstances and acting as a liaison between the independent directors and the chair when and as necessary. Additionally, the lead independent director, pursuant to the corporate governance guidelines, may assist Dr. Anido in setting Board meeting agendas and may call meetings of the independent directors of the Board when and as determined to be necessary or appropriate. Our Board believes that this leadership structure is presently appropriate because it allows Dr. Anido to set the overall direction of the Company and provide day-to-day leadership of management while having the benefit of counsel and guidance from the lead independent director. In addition, as a policy of the Board, other independent directors are from time to time requested to oversee executive sessions at which only independent directors are present. Our Board believes this policy contributes to the active participation of each independent director in the leadership function of the Board.
Risk Oversight
Risk assessment and oversight are an integral part of our governance and management processes. Our Board encourages management to promote a culture that incorporates risk management into the Company’s corporate strategy and day-to-day business operations. Management discusses strategic and operational risks at regular management meetings, and conducts specific strategic planning and review sessions during the year that include a focused discussion and analysis of the risks facing the Company. Throughout the year, senior management reviews these risks with the Board at regular Board meetings as part of management presentations that focus on particular business functions, operations or strategies and presents the steps taken by management to mitigate or eliminate such risks.
Our Board does not have a standing risk management committee, but rather administers this oversight function directly through our Board as a whole, as well as through various standing committees of our Board that address risks inherent in their respective areas of oversight. In particular, our Board is responsible for monitoring and assessing strategic risk exposure, and our Audit
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Committee is responsible for overseeing our significant financial and operational risk exposures and the steps our management has taken to monitor and control these exposures.
The Audit Committee also monitors compliance with legal and regulatory requirements and considers and approves or disapproves any related-persons transactions. Our Nominating and Corporate Governance Committee monitors the effectiveness of our corporate governance guidelines and our code of business conduct and ethics. Our Compensation Committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.
Code of Business Conduct and Ethics
We are committed to the highest standard of honest and ethical behavior and integrity in carrying out our business activities. We have adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting, and sets forth the same expectation for our suppliers, contractors and agents. The code of business conduct and ethics is available on our website at www.aeriepharma.com. In the event of an amendment to, or a waiver from, a provision of our code of business conduct and ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions, we intend to satisfy applicable disclosure requirements by posting such information on our website at the Internet address set forth above. The inclusion of our website address here and elsewhere in this proxy statement does not incorporate by reference the information on our website into this proxy statement.
Stockholder Communications with Our Board of Directors
Stockholders wishing to communicate directly with our Board may send correspondence to Richard J. Rubino, Secretary, c/o Aerie Pharmaceuticals, Inc., 4301 Emperor Boulevard, Suite 400, Durham, North Carolina 27703. Stockholders may also visit our website at www.aeriepharma.com and select “Contact Us” to communicate online with us.
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Environmental, Social and Governance and Human Capital
ESG
We are dedicated to the principles of environmental stewardship, social responsibility, good corporate governance and human capital. We consider these ESG principles to be among our most important values and therefore integrate them in our ongoing and strategic activities. We believe incorporating these values and practices into our operations not only improves our performance but also creates a sustainable and growth-oriented culture that benefits our employees, our customers and our investors. Our Nominating and Corporate Governance Committee of the Board of Directors regularly reviews our operations with senior management to assess our progress in realizing these values. With our Board of Directors’ leadership, we plan on continuing to evaluate our ESG practices and to integrate sustainability into our business.
We recognize our responsibility to be environmentally conscious and to contribute to the global effort of tackling climate change, moving toward a low-carbon economy and expanding the use of renewable energy. Renewable energy is an important part of our commitment to sustainability, and where feasible we operate our manufacturing facilities using renewable energy. At our Athlone manufacturing plant in Ireland we purchase 100% of our electricity from renewable sources and the electric supply is 100% carbon neutral.
We employ green processes, materials, practices, equipment and technologies where feasible throughout our operations to foster conservation and reduce waste. We minimize energy consumption using various power-saving technologies designed to consume electrical power only when needed. The majority of our office space in the U.S. is Leadership in Energy and Environmental Design (“LEED”) certified, and both our manufacturing plant in Athlone, Ireland, and our implant manufacturing facility in Durham, North Carolina, were built from end-to-end with sustainability and good manufacturing practices in mind. We have also instituted environmentally conscious programs into the work environment for our employees by implementing recycling and composting programs, offering water dispensers to reduce plastic bottle waste, and providing electric automobile charging stations in our employee parking areas, as examples. In 2020, we recycled 63% of the non-hazardous waste produced at our Athlone manufacturing plant. Through these programs and continuous improvement, we strive to reduce our waste while maximizing the proportion that may be recycled. Looking to the future, we plan to continue to further enhance our sustainability posture through detailed monitoring and management of our energy, water and waste management practices.
From a social responsibility perspective, as an ophthalmic pharmaceutical company, we are focused on the needs of patients, physicians and the communities we serve, including supporting patient advocacy through philanthropic donations. Although we have not yet attained profitability as a company, we have donated hundreds of thousands of dollars to causes that we believe are important to society. These donations were directed to support glaucoma research and glaucoma patient education through ongoing collaborations with the Glaucoma Research Foundation, help fund free cataract surgery for 750 indigent patients in the United States over the past three years through a continuing match program with the American Society of Cataract Refractive Surgery Foundation and promote the empowerment of women in ophthalmology as a lead sponsor of Women in Ophthalmology. In addition, these donations were also directed to accelerate treatments and cures for retinal diseases for the next generation through the Foundation Fighting Blindness and expand opportunities for ophthalmology residents from groups that are underrepresented in medicine or who want to work in underserved communities through support of the National Medical Association’s Rabb-Venable Excellence in Ophthalmology Research Program. We have also made other donations as well as supported causes of interest to areas beyond our immediate scope in eye care, such as our long-standing relationship with Northside Center for Child Development (“NCCD”) and their work with New York City children in need, in order to support the communities we serve. Our Chief Financial Officer, currently President of the Board of NCCD, has served as a Director there since 2009. NCCD has become a pioneer of behavioral health programs for low-income children of color and their families located in Harlem, Brooklyn and the Bronx, New York.
We also strive to be socially conscious in our employment practices. We support diversity in our hiring practices and follow a management philosophy that integrates social responsibility and the highest governance standards. We established an Affirmative Action Plan in 2018 in compliance with the requirements of the Office of Federal Contract Compliance Programs. We are committed to making a good faith effort to improve our current practices over time when the opportunity is available. All managers
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are trained in Equal Employment Opportunity compliant recruiting and interviewing practices. See “Human Capital—Diversity and Inclusion” below.
From a governance perspective, our Audit Committee has consistently received very high ratings for independence and competency, and our most recent stockholder vote on executive compensation practices received nearly 95% support. Our Nominating and Corporate Governance Committee monitors the effectiveness of our corporate governance guidelines and our code of business conduct and ethics and oversees our ESG strategy and policies. Our Audit Committee monitors our compliance with legal and regulatory requirements. We have established and follow our Aerie Compliance & Ethics (“ACE”) program in an effort to ensure integrity in our activities and compliance with all legal and regulatory requirements applicable to our operations. Our Chief Compliance Officer manages the ACE program. As we continue to build our company, we will continue to keep the environment, our social responsibility and governance considerations at top of mind.
Human Capital
In order to successfully attract and retain highly professional and skilled employees, it is crucial that we offer a diverse, inclusive and safe workplace. Our recruitment process begins with hiring individuals that we believe meet our strong culture for respect, commitment, integrity and honesty. We have a philosophy of investing in our employees by providing the necessary resources to grow professionally through our training and development programs, which will ultimately help drive company success. We reward our employees by offering a competitive compensation and benefits package, including incentive-based awards, which we believe motivates our employees and drives company performance.
As of December 31, 2020, we employed approximately 365 full-time employees, of which 299 were employed in the United States and 66 were employed outside the United States. The majority of our employees outside of the United States primarily support our manufacturing operations in Athlone, Ireland. Of our total employee population, there were 145 sales force and marketing employees, 111 in research and development and medical affairs, 56 in product manufacturing and 53 in general and administrative support roles such as human resources, finance, legal and information technology. We are committed to providing our employees with a positive work environment that helps them realize their full potential and helps them contribute to the success of our company. None of our employees are represented by any collective bargaining unit. We believe that we maintain good relations with our employees.
Diversity and Inclusion
We have a strong commitment to continue to build a diverse and inclusive work environment that fosters a positive culture. We believe our diverse workforce brings a wide array of skills and experiences that help increase innovation and strategic thinking and ultimately contribute to the success of our company.
Our hiring practices reflect our commitment to increase diversity and inclusion among our employees, as shown below:
We strive to achieve and maintain pay equity for employees of all races and for both female and male employees within our organization.
From a governance perspective, our Compensation Committee of the Board of Directors provides oversight of our policies, programs and initiatives focusing on workforce diversity and inclusion.
Approximately a third of our employees in the United States identify as a racial or ethnic minority, with the percentage of minority employees in management reflecting the broader employee population in the United States.
The female to male ratio for our total employee population is approximately 50:50.
Talent and Development
The success of our company is highly dependent on the performance, skills and industry knowledge of our employees. A significant proportion of our employee base is comprised of professionals who have had prior experience with pharmaceutical and biotechnology companies. In order to attract and retain such highly qualified talent, we invest significant resources to further develop our employees and provide opportunities that help them achieve career goals and lead our organization.
We maintain a robust training curriculum for all our employees and executives based on function. These curricula incorporate training addressing specific regulatory requirements germane to the performance of specific functions. The training for our scientific and quality personnel, for example, includes modules focusing on our good manufacturing and laboratory practices as well
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OUR BOARD OF DIRECTORS
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as proper documentation and reporting. In addition to specific function-based training, all of our employees are required to regularly train on our code of business conduct and ethics, receive cyber security training and receive harassment training. We believe a well-trained employee base is the best way to ensure proper business operations and to best ensure the establishment of a collaborative and supportive corporate culture.
In keeping with our commitment to the highest standards of honest and ethical behavior and integrity in carrying out our business activities, all of our employees who interact with health care professionals on behalf of our company are required to be trained in, and knowledgeable of, not only our code of business conduct and ethics but also our healthcare compliance manual which is a compendium of our standards intended to not only help ensure continued compliance with the prevailing laws, regulations and standards of our industry, but also to provide a framework for our expectations for employee behavior, operational excellence and risk mitigation to help us achieve our broader organizational goals of discovering and delivering new technologies and safe and efficacious therapies to those in medical need. The healthcare compliance manual builds on our code of business conduct and ethics and governs how our employees engage with the healthcare community when conducting promotional activities and scientific exchanges as well as financial interactions. All such employees or those in areas who support those activities are trained on and required to follow these policies.
Health and Safety
We are dedicated to creating and maintaining a work environment where our employees feel safe to carry on their responsibilities. We regularly review health and safety legislation to ensure compliance with current standards; we identify and monitor potential health and safety hazards; we coordinate emergency and fire drills; and we train our employees to avoid or minimize any potential risks within the workplace. The health and safety of our employees, patients, prescribers, and community are of utmost importance to us and we strive to comply with good manufacturing practices and with all requirements and mandates from various agencies and governments. We value the patient volunteers who participate in clinical trials and we are committed to protecting their rights and well-being. As such, we have policies and procedures in place to ensure our clinical trial practices comply with laws and regulations in all countries in which we operate clinical trials and meet our high ethical standards. We also have protocols in place to obtain informed consent from patients participating in our clinical trials.
In our research and manufacturing facilities, we maintain a safety culture and seek to eliminate workplace incidents and minimize risks and hazards. We have created and implemented processes to help eliminate safety events by reducing their frequency and severity. These programs include an illness and injury prevention program and a safety committee. The safety committee oversees the implementation of our safety program. We also review and monitor our performance closely. We monitor and continuously seek to reduce safety incidents each year. Through our efforts, we had a recordable incident rate of 1.3 (recordable incidents per 100 employees, as defined by the U.S. Occupational Safety and Health Administration, “OSHA”) at our Athlone manufacturing plant in 2020. This compares to an OSHA incident rate of 1.6 for the U.S. pharmaceutical and medicine manufacturing industry in 2019.
In response to the COVID-19 pandemic, we have taken precautionary measures to protect our employees and our stakeholders by adapting company policy to maintain the continuity of our business. We have adapted our facilities and work practices and implemented all necessary safety controls in line with governmental health policy guidelines. We have formed interdisciplinary teams to (i) focus on company-wide communication about the COVID-19 pandemic, including initiatives implemented to address the COVID-19 pandemic and its impact on our business and (ii) discuss, recommend and supervise the implementation of physical measures at our sites to best ensure employee safety. For example, to further support our employees at the Athlone manufacturing plant, we rolled out a Wellbeing Program to boost communication, engagement and wellness initiatives. With precautionary measures implemented company-wide, we continue to operate effectively as most of our manufacturing plant personnel are working on site and the balance of our total workforce is primarily working from home. Especially important in light of the COVID-19 pandemic, we provide all of our employees with excellent healthcare benefits and we make every effort to provide high levels of coverage at the most affordable cost possible.
Compensation and Benefits
To compete in a highly competitive job market and attract, retain and reward outstanding talent, we offer our employees a comprehensive compensation package that includes competitive salaries and benefit programs.
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OUR BOARD OF DIRECTORS
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Our well-designed compensation package includes the following:
competitive salaries and annual bonuses;
equity compensation: stock options and restricted stock;
employee stock purchase plan in which employees may purchase company stock at a discounted price;
401(k) plan with 401(k) company match;
premium health and dental insurance;
life insurance;
short-term and long-term disability insurance and workers’ compensation insurance;
paid time off, paid sick leave and holidays; and
personal leave of absence, military leave and family medical leave.
Our equity compensation plans, pursuant to which we may grant stock options, restricted stock and other equity-based awards, are designed to align employees’ interests with our stockholders’ interests and motivate effective performance which drives company success. We also maintain an employee stock purchase plan under which substantially all employees may purchase the Company’s common stock through payroll deductions and lump sum contributions at a price equal to 85% of the lower of the fair market value of the stock as of the beginning or end of the offering periods.
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PROPOSAL 1
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PROPOSAL 1
Election of Directors
DIRECTOR NOMINEECLASS
AGE(1)
POSITION(S) HELDDIRECTOR SINCE
CURRENT TERM EXPIRES(2)
Mechiel (Michael) M. du Toit
II68Independent Director20152021
David W. Gryska
II65Independent Director20182021
(1) Age as of April 19, 2021.
(2) Represents date of annual meeting for that year.
Upon the recommendation of the Nominating and Corporate Governance Committee, our Board has nominated Mr. du Toit and Mr. Gryska for re-election as Class II directors at the Annual Meeting.
There are no arrangements or understandings between any director, or nominee for directorship, pursuant to which such director or nominee was selected as a director or nominee. We know of no reason why any nominee may be unable to serve as a director. If any nominee is unable to serve, your proxy may vote for another nominee proposed by the Board. If for any reason these nominees prove unable or unwilling to stand for election, the Board will nominate alternates or reduce the size of the Board to eliminate the vacancy. The Board has no reason to believe that its nominees would prove unable to serve if elected. Proxies cannot be voted for a greater number of persons than the number of nominees named in this proxy statement.
If the nominees listed above are elected, they will hold office until the annual meeting of stockholders to be held in 2024 or until their successors have been duly elected and qualified.
Vote Required
Directors are elected by a plurality of the votes cast at the meeting by the holders of shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the election of directors. We will count shares represented by executed proxies, if authority to do so is not withheld, as voting for the election of the two nominees named above. If any nominee becomes unavailable for election because of an unexpected occurrence, your shares will be voted for the election of a substitute nominee proposed by our Board.
Our Recommendation
P
The Board of Directors unanimously recommends a vote FOR each of the nominees as set forth above.
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PROPOSAL 2
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PROPOSAL 2
Ratification of Appointment of
Independent Registered Public Accounting Firm
The Company’s stockholders are being asked by the Audit Committee of the Board to ratify the appointment of PricewaterhouseCoopers LLP to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021. The Audit Committee is solely responsible for selecting the Company’s independent registered public accounting firm, and stockholder approval is not required to appoint PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021. However, the Board believes that submitting the appointment of PricewaterhouseCoopers LLP to the stockholders for ratification is good corporate governance. If the stockholders do not ratify this appointment, the Audit Committee will reconsider whether to retain PricewaterhouseCoopers LLP. If the selection of PricewaterhouseCoopers LLP is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time it decides that such a change would be in the best interest of the Company and its stockholders.
Representatives of PricewaterhouseCoopers LLP are expected to participate in the Annual Meeting. These representatives will be provided an opportunity to make a statement at the Annual Meeting if they desire to do so and will be available to respond to appropriate questions from stockholders.
Vote Required
This proposal requires an affirmative vote of a majority of the votes cast at the Annual Meeting by the holders of shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal.
Our Recommendation
P
The Board of Directors unanimously recommends a vote FOR the ratification of PricewaterhouseCoopers LLP to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021.
Pre-Approval Policies and Procedures
Our Audit Committee pre-approves all audit and permissible non-audit services provided by PricewaterhouseCoopers LLP. These services may include audit services, audit-related services, tax services and other services. Pre-approval may be given as part of the Audit Committee’s approval of the scope of the engagement of the independent registered public accounting firm or on an individual case-by-case basis. All of the services described below were approved by our Audit Committee.

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PROPOSAL 2
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Independent Registered Public Accounting Firm Fees and Services
During the fiscal years ended December 31, 2020 and 2019, we retained PricewaterhouseCoopers LLP to provide audit services. The following table represents aggregate fees billed or to be billed to us by PricewaterhouseCoopers LLP for services performed for the fiscal years ended December 31, 2020 and 2019:
FEES20202019
Audit Fees (1)
$1,460,000$1,527,500
Audit-related Services (2)
$1,650$0
Tax Fees (3)
$38,728$20,000
All Other Fees (4)
$16,300$11,800
Total$1,516,678$1,559,300
(1)Audit fees consist of fees for professional services rendered for the audit of our financial statements, review of interim financial statements, assistance with registration statements filed with the SEC and services that are normally provided by PricewaterhouseCoopers LLP in connection with statutory and regulatory filings or engagements as well as new transactions during the period.
(2)Audit-related fees consist of fees for financial statement preparation services.
(3)Tax fees are fees for tax consulting and advice.
(4)All other fees relate to professional services not included in the categories above, including fees related to a subscription to an accounting research tool.
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EXECUTIVE OFFICERS
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EXECUTIVE OFFICERS
Information about Our Executive Officers
The following table sets forth certain information about our executive officers.
EXECUTIVE
AGE (1)
POSITION(S) HELD
Vicente Anido, Jr., Ph.D.(2)
68Chief Executive Officer and Chairman of the Board
Richard J. Rubino
63Chief Financial Officer, Secretary and Treasurer
Thomas A. Mitro
64President and Chief Operating Officer
Casey C. Kopczynski, Ph.D.
59Chief Scientific Officer
John W. LaRocca, Esq.
56General Counsel and Assistant Secretary
David A. Hollander, M.D., M.B.A.
47Chief Research and Development Officer
(1) Age as of April 19, 2021.
(2) Dr. Anido’s biography is included above in the section titled “Information About Directors Continuing in Office.”

Set forth and described below is certain information about our executive officers (in addition to Dr. Anido).

RICHARD J. RUBINO
Richard J. Rubino has served as our Chief Financial Officer since October 2012.

From March 2008 to April 2012, Mr. Rubino served as Senior Vice President, Finance and Chief Financial Officer of Medco Health Solutions, Inc. and from May 1993 to March 2008 served as Controller, Chief Accounting Officer, and Vice President of Planning. Previously, Mr. Rubino held various positions at International Business Machines Corporation from 1983 to May 1993 and at PricewaterhouseCoopers LLP (formerly Price Waterhouse & Co.) from 1979 to 1983.

Mr. Rubino received his B.S. in Accounting from Manhattan College. He has been a director of the Northside Center for Child Development since 2009, the Board Treasurer from 2012 through 2016, and became Board President in 2016. He also currently serves as a member of the Finance Committee and Executive Committee.
CHIEF FINANCIAL OFFICER

Positions:
Chief Financial Officer
Secretary and Treasurer

Age:
63

Joined Aerie:
2012

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EXECUTIVE OFFICERS
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THOMAS A. MITRO
Thomas A. Mitro has served as our President and Chief Operating Officer since August 2013.

From November 2012 to August 2013, Mr. Mitro served as Vice President, Sales and Marketing at Omeros Corporation, a clinical-stage biopharmaceutical company. Prior to this, Mr. Mitro was Vice President, Sales and Marketing at ISTA Pharmaceuticals from July 2002 to July 2012, where he was instrumental in building ISTA’s commercial operations and launching several eye-care products, including Bromday (bromfenac ophthalmic solution) 0.09% and Bepreve (bepotastine besilate ophthalmic solution) 1.5%. Previously, Mr. Mitro held various positions at Allergan, Inc., including Vice President, Skin Care; Vice President, Business Development; and Vice President, e-Business. 

Mr. Mitro received his B.S. from Miami University.
PRESIDENT & CHIEF OPERATING OFFICER

Positions:
President
Chief Operating Officer

Age:
64

Joined Aerie:
2013

CASEY C. KOPCZYNSKI, Ph.D.
Casey C. Kopczynski, Ph.D. has served as our Chief Scientific Officer since co-founding our company in 2005.

From 2002 to 2005, Dr. Kopczynski was the Managing Partner at Biotech Initiative, LLC, a consulting practice dedicated to emerging biotech companies. Dr. Kopczynski was also previously the Vice President of Research at Ercole Biotech, Inc. from 2003 to 2004, a company developing drugs for the treatment of cancer, inflammation and orphan genetic diseases. Prior to Ercole Biotech, Inc., Dr. Kopczynski was Director of Research and a founding member of the scientific staff at Exelixis, Inc. from 1996 to 2002.

Dr. Kopczynski received his Ph.D. in Molecular, Cellular and Developmental Biology from Indiana University and was a Jane Coffin Childs Research Fellow at the University of California, Berkeley.
CHIEF SCIENTIFIC
OFFICER

Position:
Chief Scientific Officer

Age:
59

Joined Aerie:
2005

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EXECUTIVE OFFICERS
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JOHN W. LAROCCA, Esq.
John W. LaRocca, Esq. has served as our General Counsel since February 2018.

From March 2015 through January 2018, Mr. LaRocca served as Executive Vice President and General Counsel for Eagle Pharmaceuticals, Inc. From December 2005 through December 2012, Mr. LaRocca was Chief Legal Officer for the Americas for Actavis Inc. and from January 2013 through December 2014, was Deputy General Counsel for Actavis plc. Prior to such time, Mr. LaRocca served as Divisional Counsel-US Generics for both Purepac Pharmaceuticals and Alpharma Pharmaceuticals from September 2000 through December 2005.

Previously, Mr. LaRocca practiced corporate and commercial law in New York with Parker Duryee Rosoff & Haft; Christie & Viener; and Webster & Sheffield.

Mr. LaRocca received his B.A. from Columbia College and his J.D. from Columbia Law School.
GENERAL COUNSEL

Positions:
General Counsel
Assistant Secretary

Age:
56

Joined Aerie:
2018


DAVID A. HOLLANDER, M.D., M.B.A.
David A. Hollander, M.D., M.B.A., has served as our Chief Research and Development Officer since November 2019.

Dr. Hollander began his career in industry in 2006 at Allergan as a Medical Director of Ophthalmology where he also held a number of leadership roles including Vice President of Eye Care for US Medical Affairs, Vice President and Head of Eye Care for Global Medical Affairs, as well as Therapeutic Area Head in Clinical Development for Anterior Segment and Consumer Eye Care. During this time, Dr. Hollander continued to see patients and instruct residents and fellows in cataract surgery and corneal transplantation. In 2016, Dr. Hollander joined Ora, Inc, the leading ophthalmic Contract Research Organization, as Chief Medical Officer. While at Ora, Dr. Hollander oversaw medical operations across pharmaceutical and device clinical development, preclinical studies, as well as research and development into new regulatory endpoints, most notably the development of novel mobility courses for evaluating treatments for inherited retinal diseases.

Dr. Hollander received his B.S. in chemistry with honors and distinction from Stanford University, and earned his medical degree at the University of Pennsylvania School of Medicine. Dr. Hollander also obtained an M.B.A. in Health Care Management from the Wharton School at the University of Pennsylvania.
CHIEF RESEARCH
AND DEVELOPMENT OFFICER

Positions:
Chief Research and
Development Officer

Age:
47

Joined Aerie:
2019




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COMPENSATION DISCUSSION & ANALYSIS
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COMPENSATION
DISCUSSION & ANALYSIS
A MESSAGE FROM OUR COMPENSATION COMMITTEE
2020 was a challenging year for the global economy as the COVID-19 pandemic brought disruptions to global supply chains, workforce participation was impacted by “shelter in place” restrictions and significant volatility disrupted the financial markets.
Given all the uncertainty, our leadership team swiftly responded to the environment and took important precautionary measures to protect our employees and stakeholders and adapted company policies to maintain the continuity of the business. The Company continued to operate effectively as most of our manufacturing plant personnel worked with precautionary measures in place, while the balance of the workforce primarily worked from home. Our sales force experienced successful engagement with eye-care professionals through either traditional face-to-face office meetings or virtual resources. The health and safety of our employees, patients, prescribers and community are of utmost importance to us, and the leadership team fully executed a plan to best ensure that outcome including complying with all requirements and mandates from various agencies and governments.
The Company continued to achieve strong financial and scientific results in 2020. Net product revenues generated by the glaucoma franchise increased 19% over 2019, and by the end of 2020, we had $240 million in cash and investments. We took significant steps to continue to advance our clinical development and commercialization of our products, including but not limited to gaining EC approval of Roclanda® (marketed as Rocklatan® in the United States), reporting positive interim topline 90-day efficacy data for a Phase 3b trial for Roclanda®, commencing trials for two late-stage programs, and executing an exclusive license agreement with Santen for Rhopressa® and Rocklatan® in Japan and other Asian countries.
Recognizing 2020 was a challenging year, the compensation decisions we made for both 2020 as well as looking forward to 2021 are intended to support our comprehensive pay-for-performance culture and philosophy as well as our objective to attract, motivate and retain talented executives. In 2020, approximately 95% of the votes cast on our Say-on-Pay vote were supportive of our compensation program and approach, and we are again seeking stockholder approval of our program this year under Proposal 3. The balance of this section covers our compensation actions for 2020 in greater detail, as well as the context and frameworks that we utilized in making our decisions.
Purpose
The purpose of
this Compensation Discussion and Analysis is to provide our stockholders with an understanding
of our approach
to executive compensation and to detail our decision-making processes
for compensation to our NEOs for fiscal year 2020.
NAMED EXECUTIVE OFFICERS
The following individuals represent our Named Executive Officers (“NEOs”), comprised of our Principal Executive Officer, Principal Financial Officer and the four other most highly compensated executive officers in 2020.
Vicente Anido, Jr., Ph.D.
Richard J. Rubino
Thomas A. Mitro
Chief Executive Officer
and Chairman of the Board
Chief Financial Officer, Secretary and TreasurerPresident and Chief
Operating Officer
Casey C. Kopczynski, Ph.D.
John W. LaRocca, Esq.
David A. Hollander, M.D., M.B.A.
Chief Scientific OfficerGeneral Counsel
and Assistant Secretary
Chief Research and
Development Officer
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COMPENSATION DISCUSSION & ANALYSIS
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COMPANY OVERVIEW
We are an ophthalmic pharmaceutical company focused on the discovery, development and commercialization of first-in-class therapies for the treatment of patients with open-angle glaucoma, ocular surface diseases and retinal diseases. In 2020, we accomplished a number of key objectives that are critical to our continued growth. The industry we operate in is highly competitive from a business and human resource perspective, and thus we use our compensation program to create a competitive advantage. Our Compensation Committee based its actions in 2020 on the performance and accomplishments of the company throughout the year.
2020 Business and Financial Highlights
U.S. Commercial Products
Net Product revenue in 2020 of $83.1 million, which represents a 19% increase as compared to the prior year, was driven by our U.S. FDA approved glaucoma franchise products, Rhopressa® and Rocklatan®. Although there was a decline in total prescription volumes in April 2020, as seen within the entire pharmaceutical market according to IQVIA data primarily due to the impact of the COVID-19 pandemic, our sales volumes have increased each successive quarter in 2020 as compared to the first quarter of 2020 for both Rhopressa® and Rocklatan®.
We have obtained formulary coverage for Rhopressa® and Rocklatan® for the majority of lives covered under commercial plans and Medicare Part D plans. Our commercial team responsible for sales of Rhopressa® and Rocklatan® is targeting eye-care professionals throughout the United States, and with the addition of a contract sales organization and a separate telesales team in 2020, we are able to reach over 16,000 eye-care professionals.
Outside the United States
In Europe, Roclanda® (marketed as Rocklatan® in the United States) was granted a Centralised MA by the EC in January 2021. Roclanda® represents our second EC approved product in Europe as Rhokiinsa® (marketed as Rhopressa® in the United States) was granted a Centralised MA by the EC in late 2019.
Furthermore, we reported positive interim topline 90-day efficacy data in September 2020 for our Phase 3b clinical trial for Roclanda®, named Mercury 3, which we believe is important to the execution of our strategy in Europe, which generated interest from potential collaboration partners.
In Japan, we entered into the Santen Agreement with Santen in October 2020 to advance our clinical development and ultimately commercialize Rhopressa® and Rocklatan® in Japan and eight other countries in Asia. The agreement included an upfront payment to Aerie of $50.0 million, with net cash proceeds after withholding taxes of $45.0 million received in the fourth quarter of 2020. We initiated a Rhopressa® Phase 3 clinical trial in December 2020, the first of three expected Phase 3 clinical trials in Japan. Clinical trials for Rocklatan® have not yet begun.
Glaucoma Product Manufacturing
We have a sterile fill production facility in Athlone, Ireland, for the production of our clinical supplies and our products approved by the U.S. FDA. We received FDA approval for production for commercial distribution to the United States for Rocklatan® in the first quarter of 2020 and Rhopressa® in the third quarter of 2020. Shipments of commercial supply of Rocklatan® and Rhopressa® from the Athlone manufacturing plant to the
19%
INCREASE IN NET REVENUES
Rhopressa® and Rocklatan®
$83.1 million for the year ended December 31, 2020
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Sales Volumes Increased Each Successive Quarter of 2020
Rhopressa® and Rocklatan®
in 2020
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EC Approval
Roclanda®
in Europe
January 2021
+
Reported Positive Topline Data
Roclanda® Mercury 3
Phase 3b clinical trial
September 2020
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Executed Santen Agreement
Rhopressa® and Rocklatan®
in Japan, October 2020
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Initiated
Clinical Trial
Rhopressa®
in Japan, October 2020
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COMPENSATION DISCUSSION & ANALYSIS
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United States commenced in the third quarter and fourth quarter of 2020, respectively. The Athlone manufacturing plant has also manufactured clinical supplies of Rhopressa® for the Phase 3 clinical trials in Japan. We expect that in 2021 the Athlone manufacturing plant will manufacture most of our ongoing needs for Rhopressa® and Rocklatan® in the United States.
Product Candidates and Pipeline
We are developing AR-15512, our product candidate for the treatment of dry eye disease, for which we initiated a large Phase 2b clinical trial in October 2020. Furthermore, we are also developing three sustained-release implants focused on retinal diseases, AR-1105, AR-13503 SR and AR-14034 SR. For AR-1105, we reported topline results of the Phase 2 clinical trial for patients with macular edema due to RVO in July 2020, indicating sustained efficacy of up to six months, an important achievement in validating the potential capabilities of Aerie’s sustained release platform. With respect to future plans for AR-1105, we are currently evaluating next steps regarding advancement into a Phase 3 clinical trial along with commercialization prospects in both Europe and the United States.
For AR-13503 SR, we initiated a first in-human clinical safety study in the third quarter of 2019 for the treatment of wet AMD and DME, which is currently ongoing. We are still evaluating different formulations of this early stage product candidate.
For preclinical AR-14034 SR, we anticipate filing an IND with the FDA in the second half of 2022 to evaluate its potential as a treatment for wet AMD and DME.
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FDA Approval at Athlone Plant
Rhopressa® and
Rocklatan® Production
for commercial distribution
to the United States
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Initiated
Clinical Trial
AR-15512
TRPM8 agonist for dry eye
in the United States
October 2020
Long-term Stockholder Return Performance
The following graph illustrates a comparison of the five-year cumulative total stockholder return on our common stock since December 31, 2015 to two indices: the NASDAQ Composite Index and the NASDAQ Biotechnology Index. The graph assumes an initial investment of $100 on December 31, 2015, in our common stock and in each index. It also assumes reinvestment of dividends, if any.

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+
Reported Positive Topline Data
AR-1105
dexamethasone steroid implant Phase 2 clinical trial in patients with macular edema due to RVO
July 2020
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New Preclinical
Program
AR-14034 SR
pan-VEGF receptor inhibitor
Sustained Release Retinal Implant
for treatment of wet AMD and DME in the United States
Introduced early 2021
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Key Compensation Actions for 2020
Our Compensation Committee took the following actions related to 2020 executive compensation for our NEOs:
COMPENSATION AREA HIGHLIGHTS
Cash Compensation
Approved base salary increases of 3-6% for our NEOs, recognizing individual performance and contributions as well as considering market positioning

Maintained 2020 bonus targets (expressed as a percent of base salary) at the same level as 2019

Approved a corporate achievement for 2020 bonuses of 93.6% based on incentive goals and weightings previously approved by the Committee that were established from our budget and strategic plan for the fiscal year; bonus payouts averaged at 94.2% for the NEOs after adjusting for individual performance
Equity Compensation
Granted annual equity awards to our NEOs in February 2020 consisting of stock options and restricted stock awards with 4-year ratable vesting (no change to grant schedule or equity design)

The value of the 2020 annual equity grants were significantly lower than the prior year’s grants, as further explained below in the section entitled “Fiscal 2020 Compensation Program in Detail - Long Term Equity Incentive Compensation”
Process / Governance
Engaged ClearBridge Compensation Group in Q2 2020 as the Compensation Committee’s independent advisor on compensation matters
Key Compensation Actions for 2021
In addition to the key compensation actions for 2020, the Compensation Committee also took the following actions as it relates to 2021 compensation for our NEOs:
COMPENSATION AREAHIGHLIGHTS
Peer Group
In Q3 2020, adopted a new peer group that is more closely aligned with our company size to inform compensation decisions
Cash Compensation
Approved base salary increases for our NEOs approximating 2%

Maintained 2020 NEO annual bonus target percentages for 2021

Approved corporate incentive goals and weightings for the 2021 annual bonus
Equity Compensation
Approved 2021 equity incentive awards that reflected competitive market data and performance during 2020, with the value of such awards being significantly lower as compared to the previous year’s grants (in a manner similar to the approach utilized for 2020 grants)
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COMPENSATION DISCUSSION & ANALYSIS
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2020 CEO Pay vs. Stock Price Performance
The decline in target value for our 2020 equity incentive awards is in line with the Company’s strong history of linking pay with performance. Our overall strategy is based on a long-term view of Company performance and strategic execution. Over the last three years, total compensation levels for the CEO have been commensurate with stock price performance, as shown below. All values in the chart are the same as the values in the corresponding Summary Compensation Table column for each year.
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Any decline in stock price also impacts the actual current value of past equity awards that executives are still holding. The table below shows the grant date fair value of the CEO’s last three annual equity incentive awards, compared to their year-end value at December 31, 2020.
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(1) Grant date fair value reflects the total grant date fair value for each type of award as disclosed in the grants of plan-based awards table for the corresponding year
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(2) Year-end value reflects the “in-the-money” value of stock option awards, and the total value of granted stock awards, based on the December 31, 2020 closing price of the Company’s stock, which was $13.51.
Key Compensation Governance Attributes
We believe that a sound executive compensation program is grounded in key governance practices. See below for key components of our executive compensation program:
P
WHAT WE DO
üAlign annual incentive pay and performance by linking annual bonuses to the achievement of performance goals tied to Company financial and strategic objectives
üCap payouts for annual bonus
üRequire significant stock ownership by our executives and directors through our stock ownership guidelines
üMaintain a claw back policy covering incentive compensation
ü
Consult an independent compensation consultant
ü
Evaluate the risk profile of our pay program
ü
Conduct an annual pay review
ü
Engage directly with our largest stockholders on a regular basis to solicit feedback
ü
Grant equity awards with “double-trigger” vesting upon a change in control
üAppoint a Compensation Committee comprised solely of independent directors
üHave a majority of executive compensation at-risk
W
WHAT WE
DON’T DO
X
Provide gross-ups on excise taxes
X
Guarantee salary increases, bonuses, or grants of equity compensation
X
Provide executive perquisites
X
Provide pension plans or other post-employment benefit plans
X
Offer severance multipliers in excess of 2x base salary and bonus
XImplement compensation or incentives that encourage unnecessary or excessive
risk taking
X
Allow for hedging or unauthorized pledging of Company stock
X
Reprice stock options without stockholder approval

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COMPENSATION DISCUSSION & ANALYSIS
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“Say-on-Pay” Vote
Although we believe strongly that our executive pay program adheres to market best practices and reflects our pay-for-performance strategy, we recognize that this vote presents another opportunity for us to further engage with our stockholders on important matters. We communicate with our stockholders regularly and share feedback we receive with our Board of Directors to ensure our practices align with our stockholders’ interests. Our Chief Financial Officer and our Chief Executive Officer lead our engagement efforts with stockholders, including regular stockholder engagement through our quarterly earnings calls, company presentations, investor conferences and other investor meetings where investors have an opportunity to discuss incentive compensation matters, among other topics.
For the advisory say-on-pay vote at our 2020 Annual Meeting of Stockholders, approximately 95% of the votes were in favor of the proposal related to compensation practices for 2019. While this was a positive assessment of our executive compensation program, the Compensation Committee will continue our dialogue with key stockholders and will continue to consider all feedback, including the results of this say-on-pay vote, as we administer the fiscal 2021 executive compensation program and plan for fiscal year 2022.
DETERMINING EXECUTIVE COMPENSATION
Executive Compensation Philosophy and Objectives
Our compensation philosophy is to pay for performance. We believe firmly that our executives’ interests should be aligned with our stockholders’ interests. To accomplish this we:
provide a majority of compensation in the form of long-term incentives that tie our executives’ compensation directly to the performance of our stock and increased company value over time; and
structure our program so that the ultimate amount of compensation earned by our NEOs through paid bonuses and the intrinsic value of equity grants reflects overall business and individual performance.
In so doing, we feel we provide competitive compensation opportunities that further our goals of attracting, motivating and retaining talented executives and that align with our overall business model and emphasize a long-term view of Company performance and strategic execution.
When setting pay opportunities, our Compensation Committee reviews competitive market ranges for base salary, target bonus and long-term incentives. All cash compensation, including merit increases and bonuses, and equity awards are determined based on both corporate goal performance and individual performance. Additionally, while our overall philosophy applies generally to all NEOs, we recognize at times the need to differentiate the NEOs on an individual basis to reflect additional considerations such as tenure, experience, past and expected contribution and criticality to the Company. As such, the actual value and relative composition of an annual award may vary by individual or on a year-to-year basis.
Our Decision-Making Process
We adhere to a set of guiding principles as we make pay determinations each year:
Maintain a pay-for-performance culture
Foster long-term alignment with stockholders
Preserve a low risk profile
Reflect internal equity considerations
Emphasize variable performance-based compensation
Directly tie pay outcomes to value creation and support individual retention through annual equity awards
Utilize key governance best practices
Consider individual factors when making award determinations
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COMPENSATION DISCUSSION & ANALYSIS
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Role of the Compensation Committee
The Compensation Committee of our Board is responsible for establishing and overseeing the executive compensation program, which includes, but is not limited to the following:
Approving target pay opportunities for our NEOs on an annual basis by evaluating Company and individual performance. Specifically, the Compensation Committee evaluates:
each executive officer’s role and responsibilities, and performance in that role;
each executive officer’s compensation history (including their total equity compensation profile);
key historical Company performance metrics and forward-looking projections; and
compensation practices of the companies in our peer group and, when appropriate, broader market data.
Approving grants of equity awards under our stock incentive plans
Designing the annual bonus program each year and approving payouts based on Company and individual performance
Reviewing and approving any compensation-related agreements
Reviewing whether our compensation program encourages excessive risk-taking
Reviewing non-executive director compensation
The Compensation Committee meets regularly throughout the year to monitor our progress. The formal written Compensation Committee charter is available on our website.
Role of our CEO
Our Chief Executive Officer informs our Compensation Committee on the individual performance and contributions of each of the other NEOs, and annually makes recommendations to the Compensation Committee regarding base salary, non-equity incentive plan compensation and equity awards. The Compensation Committee reviews and takes into account such recommendations, but ultimately retains full discretion and authority over the final compensation decisions for the NEOs.
Role of our Independent Compensation Consultant
Pursuant to its charter, the Compensation Committee has the sole authority to retain compensation consultants to assist in its evaluation of executive and director compensation. At the beginning of the 2020 fiscal year, Pearl Meyer was serving as the Compensation Committee’s independent compensation advisor. In the second quarter of the 2020 fiscal year, the Compensation Committee engaged ClearBridge as its independent compensation advisor for the remainder of the fiscal year ended December 31, 2020. ClearBridge conducted various market studies and advised the Compensation Committee on general executive compensation matters to assist the Compensation Committee in fulfilling its duties.
As was the case with Pearl Meyer, ClearBridge reports directly to the Compensation Committee, participates in meetings, communicates with the Committee Chair between meetings as necessary and works with management at the direction of the Compensation Committee.
The Compensation Committee reviewed ClearBridge’s independence and concluded that it is an independent and conflict-free advisor to the Company pursuant to standards under the Dodd-Frank Wall Street Reform and Consumer Protection Act and NASDAQ’s independence standards.
Use of Peer Group and Market Data
In the third quarter of fiscal year 2019, the Compensation Committee approved the peer group that would be used to determine 2020 pay opportunity levels for the NEOs (our “2019 peer group”). For 2020, we referenced the 2019 peer group in our annual executive compensation benchmarking assessment, reviewing market employment arrangement practices, evaluating our
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aggregate equity usage and dilution and reviewing non-executive director compensation. In developing the 2019 peer group we balanced removing companies that were no longer appropriate peer companies (e.g., due to mergers and acquisitions activity) with minimizing year-over-year turnover within the group to provide consistency in the data. The primary screening characteristics for evaluation included utilizing companies that are:
Biotechnology, pharmaceutical or medical device companies that focus on ophthalmology;
Publicly-traded on a major U.S. exchange;
Commercial stage companies; and
With a target market capitalization of approximately $3 billion.
The companies included in our 2019 peer group are presented in the table below. Aerie’s revenue and market capitalization was positioned below the 25th percentile of this group of companies.
2019 Peer Group
ACADIA Pharmaceuticals Inc.Intercept Pharmaceuticals, Inc.
Agios Pharmaceuticals, Inc.Ironwood Pharmaceuticals, Inc.
Amicus Therapeutics, Inc.Neurocrine Biosciences, Inc.
Clovis Oncology, Inc.Omeros Corporation
Coherus BioScience, Inc.Portola Pharmaceuticals, Inc.
Corcept Therapeutics IncorporatedRadius Health, Inc.
Glaukos CorporationUltragenyx Pharmaceutical Inc.
Insmed Incorporated
In the third quarter of fiscal year 2020, the Compensation Committee, with the assistance of ClearBridge, determined to take a holistic review of the peer group and developed a new peer group that aligns with Aerie’s current revenue and market capitalization to be used as context for 2021 pay decisions (the “2020 peer group”). See below for screening criteria utilized by ClearBridge, the resulting 2020 peer group and Aerie’s size positioning versus the 2020 peer group.
Company Details:
U.S. based
Publicly traded on a major U.S. exchange
¢
Industry:
Primarily Biotechnology and Pharmaceuticals

¢
Company Size:
     Revenue:
Approximately 1/2x to 2x of Aerie’s
Positive Estimated Revenue Growth
     Market Cap:
Approximately 1/3x to 3x of Aerie’s

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2020 Peer Group
Anika Therapeutics, Inc.Karyopharm Therapeutics Inc.
Athenex, Inc.MacroGenics, Inc.
BioDelivery Sciences InternationalMannKind Corporation
Catalyst Pharmaceuticals, Inc.
Pfenex Inc. (1)
Clovis Oncology, Inc.Rigel Pharmaceuticals, Inc.
Dynavax Technologies CorpTherapeuticsMD, Inc.
Flexion Therapeutics, Inc.Theravance Biopharma, Inc.
Heron Therapeutics, Inc.Vericel Corporation
Intersect ENT, Inc.Xencor, Inc.
(1) Acquired by Ligand Pharmaceuticals Inc. on October 1, 2020.
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Note: Reflects the last four quarters of revenue and market capitalization as of June 30, 2020.
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COMPENSATION DISCUSSION & ANALYSIS
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Principal Elements of Executive Compensation
Our executive compensation program consists of a mix of fixed and variable pay elements, with the latter tied to both short- and long-term company success. Performance-based pay elements are linked to goals that we believe will deliver both year-to-year and long-term increases in stockholder value. The elements of total direct executive compensation include:
ELEMENTDESCRIPTIONFORMPERFORMANCE PERIODPERFORMANCE MEASURESPAYOUT
Base SalaryFixed amount to attract and retain top talentCash
Annual Cash
Bonus
At-risk variable incentive compensation used to reward strong Company and individual performance against critical annual goalsCash1 Year

1/1/2020 - 12/31/2020
Net Revenue,
Net Income After Taxes, Ending Cash Balance &
Strategic Goals
0% - 200%
Long-Term Incentive
Awards
At-risk variable incentive compensation
with value tied to stock price growth that promotes performance, supports retention and creates stockholder alignment
Stock Options4-Year Ratable Vesting (Monthly) & 10-Year TermAbsolute Stock Price Appreciation
Restricted Stock Awards4-Year Ratable Vesting (Annually)
2020 Fiscal Year Target Annual Compensation Opportunities Mix
As described below, our compensation program is designed with significant at-risk components. In 2020, a substantial majority of our NEOs’ target compensation opportunities was at-risk, and a majority of compensation was delivered through long-term incentive awards. The following charts show the mix of fixed and at-risk target compensation for our CEO and our other NEOs on average.
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(1) Percentages attributed to restricted stock and stock options are based on grant date fair value of awards granted in 2020.
(2) Excludes total compensation for Dr. Hollander. Due to his start date of November 2019, at which time he received sign-on incentives in accordance with his Employment Agreement, he did not receive long-term incentive awards in 2020.
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COMPENSATION DISCUSSION & ANALYSIS
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2020 Fiscal Year Incentive Design
Our annual cash bonus and long-term incentive awards are designed to be at-risk variable incentive compensation that support our pay-for-performance philosophy. The following charts illustrate the design of our annual cash bonus and long-term incentive awards.
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*Measured on an option-equivalent basis using a 3.0 stock option to 1.0 restricted stock conversion ratio
Fiscal 2020 Compensation Program in Detail
Base Salaries
We set base salaries that are competitive in the marketplace and reflect each individual’s duties, responsibilities, experience and performance. Base salaries are reviewed annually and adjusted periodically to take into account inflation, market movement, promotions, increased responsibility and performance. We do not provide for automatic salary increases.

The Compensation Committee established the base salaries for the NEOs in fiscal 2020 as follows, as compared to fiscal year 2019:
Base Salary atBase Salary atPercent
EXECUTIVEDecember 31, 2019December 31, 2020 Increase
Vicente Anido, Jr., Ph.D.
$772,500$795,6753.0%
Richard J. Rubino
$463,000$476,8903.0%
Thomas A. Mitro
$473,800$501,0005.7%
Casey C. Kopczynski, Ph.D.
$435,000$448,0503.0%
John W. LaRocca, Esq.
$430,000$442,9003.0%
David A. Hollander, M.D., M.B.A.
$430,000$450,0004.7%
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COMPENSATION DISCUSSION & ANALYSIS
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Annual Bonus (Non-Equity Incentive Compensation)
At the beginning of each fiscal year, the Compensation Committee establishes a non-equity incentive compensation plan that is tied to critical short-term business goals. Our annual bonus program is an important incentive tool used to motivate achievement of our short-term goals for the forthcoming fiscal year. Each NEO participates in the plan and has a target bonus opportunity amount that is stated as a percentage of base salary. Participants can earn between 0% and 200% of their targeted payout level based upon actual Company and individual performance as reviewed and assessed by the Compensation Committee.
Bonus payouts are made in cash and paid in arrears on an annual basis if the performance goals are met, or at the Board’s discretion after taking into account various subjective factors, including individual performance and execution on our long-term plans. We do not provide for guaranteed bonus payouts.
Initially, prior to the Board exercising its discretion to modify an award payout, annual bonus awards are calculated based on Company performance as follows:
Base SalaryxIndividual Target Award %x
Net Revenue
(40% Weight)
+
Net Income After Taxes (5% Weight)
+
Ending Cash Balance
(5% Weight)
+
Strategic Measures
(50% Weight)
=
Annual Bonus
(prior to adjustment for individual performance, etc.)
Target Bonus OpportunityCompany Performance

For 2020, our Compensation Committee set the following target bonus opportunities as a percentage of base salary for each NEO, which percentages were unchanged from the prior year’s target:
EXECUTIVETARGET BONUS OPPORTUNITY AS
PERCENTAGE OF BASE SALARY AS
OF DECEMBER 31, 2020
TARGET BONUS OPPORTUNITY
IN DOLLARS
Vicente Anido, Jr., Ph.D.
70%$556,973
Richard J. Rubino
50%$238,445
Thomas A. Mitro
50%$250,500
Casey C. Kopczynski, Ph.D.
50%$224,025
John W. LaRocca, Esq.
50%$221,450
David A. Hollander, M.D., M.B.A.(1)
50%$220,958
(1) Dr. Hollander’s target bonus was prorated to reflect a mid-year increase in base salary.
Our Compensation Committee established five core goals to assess short-term Company performance in 2020 (the “Core Goals”), which span across a balance of meaningful financial and non-financial categories. As a recently commercial pharmaceutical company, we focused on goals that are important to our investors and stockholders. Our financial goals were to achieve an aggressive net revenue goal, as well as to achieve our net income after taxes, ending cash balance and our strategic goals. Strategic goals for 2020 were related to specific pipeline, globalization and manufacturing considerations, as outlined further below. We believe these goals were set at appropriately aggressive levels that were neither certain to be met, nor unachievable at the onset of the year. Although we may use different financial performance measures in the future, the Compensation Committee believes that net revenue, net income after taxes and ending cash balance were the most meaningful financial measures to assess the Company’s performance in 2020. Our non-financial goals reflect prospective opportunities that we believe can drive future stockholder value.
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COMPENSATION DISCUSSION & ANALYSIS
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At the conclusion of the year, our Compensation Committee reviewed the Company’s success against its annual goals. The Compensation Committee’s assessment of our performance against our goals is as follows:
CORE GOALSWEIGHTINGACHIEVEMENT
1. Achieve 2020 budgeted net revenue of $108 million, net income after tax of ($182) million and ending cash balance of $191 million (partially met based on $83.1 million net revenue, ($178.1) million net income after tax, and $195.4 million ending cash balance)
50%43.6%
2. Pipeline (met)
20%20%
• Report topline data from AR-1105 Phase 2 study
• Completion of enrollment in AR-13503 Phase 1b Stage 1 study
• First patient dosed in P2 for AVX-012
3. Globalization (met)
15%15%
• Completion of Japan partnering agreement
• Report topline data from Mercury 3 study in Europe
• EMA approval of Roclanda®
4. Manufacturing (met)
15%15%
• Ireland Plant commercial production of Rocklatan® and Rhopressa®
• PRINT implant semi auto-load operational
Total100%93.6%
Overall, the Compensation Committee strives to set objective, measurable goals for the bonus plan each year, but like many recently commercial biotechnology or pharmaceutical companies, recognizes that the dynamic nature of drug development and approval requires some subjectivity and qualitative assessment to arrive at the final bonus funding. That qualitative assessment can manifest itself in partial achievement for a goal that is substantially met but not completely met for a particular reason, or reduction in the achievement level if the goal is met but there were suboptimal aspects of the achievement. Based on the Core Goals performance described above, the Compensation Committee determined the corporate goals were achieved at 93.6% of target for NEOs.
In addition to the achievement of the Core Goals, adjustments to individual incentive payouts may be made below or above target achievement based on the Compensation Committee’s assessment of individual performance that may be outside of the Core Goals. Ultimately, the Compensation Committee’s objective is to arrive at bonus payouts that reflect both performance against the set of Core Goals articulated at the onset of the year, as well as an overall evaluation of the Company’s performance and individual performance in that given year. For 2020, the CEO’s annual incentive was awarded in line with the corporate funding factor for the Core Goals. Drs. Kopczynski and Hollander and Mr. LaRocca were also awarded bonuses that were in line with the corporate funding factor. Mr. Rubino’s bonus was adjusted upward to 96.0%, reflecting his successful efforts related to cash management and business development activities. Mr. Mitro’s bonus was adjusted upward to 95.0%, reflecting his significant efforts in successfully driving the commercial business and re-negotiating with wholesalers and managed care organizations.
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Bonus payouts for our NEOs in respect of performance for fiscal year 2020 were as follows:
EXECUTIVE2020 TARGET BONUS OPPORTUNITY IN DOLLARS2020 ACTUAL BONUS PAYOUTPAYOUT PERCENTAGE
 OF TARGET
Vicente Anido, Jr., Ph.D.
$556,973$521,32693.6%
Richard J. Rubino
$238,445$229,00096.0%
Thomas A. Mitro
$250,500$238,00095.0%
Casey C. Kopczynski, Ph.D.
$224,025$209,69093.6%
John W. LaRocca, Esq.
$221,450$207,30093.6%
David A. Hollander, M.D., M.B.A.(1)
$220,958$206,85093.6%
(1) Dr. Hollander’s target bonus was prorated to reflect a mid-year increase in base salary.
Long-Term Equity Incentive Compensation
The Compensation Committee approves the grant of equity awards under our stock incentive plans to our NEOs. Our stock incentive plans afford the Compensation Committee flexibility to determine the specific award types and parameters that it believes are in the best long-term interests of the Company. We believe that long-term incentive awards provide the strongest alignment with stockholder interests and as such have a general philosophy of emphasizing long-term incentives as part of our total compensation program. Further, we believe that properly structured awards are a valuable motivating incentive and strong retention tool.
The terms of our equity awards generally provide time-based vesting provisions that require the recipient remain an employee of the Company to obtain such awards on the vesting date(s), and in certain instances are also subject to the achievement of performance-based goals. Time-vested equity awards are subject to double-trigger acceleration upon a change in control of the Company, whereby outstanding awards are only subject to accelerated vesting or other enhanced vesting in the event that there is a change in control event and the executive is terminated without “Cause” or for “Good Reason” within twelve months following the change in control event.
We do not provide for automatic awarding of equity awards. Grants are typically made by the Compensation Committee to the NEOs on an annual basis after considering factors such as Company and individual performance, current equity ownership by the individual, our total equity usage and dilution and our available share pool. From time-to-time, we may grant equity awards to our NEOs outside of our annual grant cadence when the Committee believes it is in the best interests of the Company, reflects Company performance and further aligns the interests of our NEOs with those of our stockholders.
Our primary approach for sizing equity awards is to consider the award as a percentage of shares outstanding. Since public reporting requirements stipulate disclosures of equity awards as a grant date fair value, our Compensation Committee evaluates the implied grant date fair value of these awards as another parameter. We believe that our approach is best for the Company as it allows us to better manage our equity pool, but recognize that it can lead to sizable year-to-year swings in the grant date fair value of awards to any particular NEO. Our Compensation Committee continues to evaluate this process.
2020 Equity Awards
In February 2020, the Compensation Committee approved equity awards to our NEOs following a review of competitive market data and Company and individual performance. Our approach to these annual awards was to provide a mix of 60% stock options and 40% restricted stock awards (when measured on an option-equivalent basis using a 3.0 stock option to 1.0 restricted stock conversion ratio), as follows:
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Time-vested stock options, which vest in 48 equal installments on each of the first 48 monthly anniversaries of the grant date (four years cumulative).
Time-vested restricted stock, which vest in four equal installments on each of the first four anniversaries of the grant date (four years cumulative).
The structure of the grants was the same as the annual grants provided in 2019, but the value of the grants was substantially lower reflecting stock price performance, given our approach of sizing equity awards as a percentage of shares outstanding rather than as a grant value. Consistent with last year, the Compensation Committee considered whether to award grants that vest on the basis of achieving performance targets as part of the Company’s annual long term incentive program and ultimately determined not to implement this type of award at this time. This decision was underpinned by the following:
Setting multi-year financial goals would be very challenging given the Company’s early stage in product launches and current drug development timeline;
The goals that would be used for purposes of these awards were captured in the Core Goals in the Annual Bonus plan;
Performance-vested awards are not the predominant market practice in development-stage and recently-commercial biotechnology and pharmaceutical companies (a majority of our peers do not make use of this type of award); and
The Compensation Committee believes time-vested stock options and restricted stock achieve its desired goals of performance-orientation, stockholder alignment and retention.
Equity awards made to our NEOs(1) in 2020 were as follows:
EXECUTIVEGRANT DATE# OF TIME-VESTED
 STOCK OPTIONS
# OF TIME-VESTED RESTRICTED STOCK AWARDS
Vicente Anido, Jr., Ph.D.
2/6/2020125,00028,000
Richard J. Rubino
2/6/202052,00011,750
Thomas A. Mitro
2/6/202062,50014,000
Casey C. Kopczynski, Ph.D.
2/6/202045,00010,000
John W. LaRocca, Esq.
2/6/202015,5003,500
David A. Hollander, M.D., M.B.A.(1)
(1) Dr. Hollander did not receive long-term incentive awards in 2020 due to his start date of November 2019, at which time he received sign-on incentives of 110,000 shares of time-vested stock options and 25,000 shares of time-vested restricted stock awards in accordance with his Employment Agreement.
Vesting of Prior Performance-Vested Equity Awards
In 2017, our Compensation Committee granted performance-vested awards to certain of our NEOs. We designed the awards to provide the ultimate alignment of our NEOs’ incentives with stockholder interests, in that the payout of the awards were contingent upon the approval and commercial launch of the Company’s FDA approved products, Rhopressa® and Rocklatan®, respectively. As the performance and service conditions were satisfied, the final portion of performance awards fully vested during the fiscal year 2020.
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2021 Equity Awards
In the first quarter of 2021, the Compensation Committee approved the annual equity grants for our NEOs. The structure of the grants was the same as the annual grants provided in 2020, but as was the case for 2020 grants, the value of the 2021 grants was lower than the prior year’s grants reflecting stock price performance over the course of 2020. The Compensation Committee strongly believes in a pay for performance philosophy, as demonstrated through our prior compensation decisions (for example, performance-based bonus payouts and long-term incentive grant amount approach), and has continued to evaluate the use of performance-vested equity awards. Given the current market environment and challenges in setting long-term goals, the Compensation Committee has determined not to adopt performance-vested equity for fiscal 2021 at this time and believes that through the use of stock options and restricted stock, management continues to be fully aligned with stockholder interests, with the ultimate value of the awards delivered subject to company stock price performance. Below is a summary comparing the fair value of equity grants made in 2020 at the time of grant against the fair value of the equity grants made in 2021 at the time of grant.
EXECUTIVEFAIR VALUE OF 2020
EQUITY INCENTIVE AWARDS
FAIR VALUE OF 2021 EQUITY INCENTIVE AWARDS% CHANGE
Vicente Anido, Jr., Ph.D.
$2,303,088$1,952,112(15)%
Richard J. Rubino
$960,359$818,473(15)%
Thomas A. Mitro
$1,151,709$976,071(15)%
Casey C. Kopczynski, Ph.D.
$827,633$777,540(6)%
John W. LaRocca, Esq.(1)
$286,217$777,671*
David A. Hollander, M.D., M.B.A.(2)
$—$777,410
(1) Award granted in February 2020 took into account August 2019 grant with a fair value of $752,207 made to Mr. LaRocca at the same time as other employees of the Company (not including the NEOs). Mr. LaRocca’s 2021 grant reflects the value of a full year’s award, similar to the other NEOs.
(2) Dr. Hollander did not receive long-term incentive awards in 2020 due to his start date of November 2019, at which time he received sign-on equity incentives with a fair value of $1,848,235 in accordance with his Employment Agreement.
* Percentage not meaningful.
Benefits
Our executives receive the Company’s standard employee benefits package, including health and disability insurance paid by the Company and are eligible to participate in the Company’s 401(k) plan, in each case, on the same basis as other employees.
Perquisites
We did not provide our NEOs with any perquisites during the fiscal year ended December 31, 2020.
Pension Benefits
Other than the Company’s 401(k) plan, we did not maintain any plan for our NEOs providing for payments or other benefits at, following, or in connection with, retirement during the fiscal year ended December 31, 2020.
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Nonqualified Deferred Compensation
We did not maintain any deferred compensation plans for our NEOs for the fiscal year ended December 31, 2020.
Stock Ownership Guidelines
In 2019, we adopted stock ownership guidelines for our Board and our executive officers. The purpose of these guidelines is to encourage meaningful ownership of our Company, and ensure that there is significant alignment between the interests of our executives, our Board of Directors and our stockholders. Under the policy the following ownership levels, expressed as a multiple of base salary or annual base retainer, must be met and maintained:
POSITIONGUIDELINE
Chief Executive Officer3x Annual Base Salary
Other Executive Officers1x Annual Base Salary
Directors3x Annual Base Retainer
Participants are expected to be in compliance with the guideline levels of ownership within five years of becoming subject to the policy. For the purposes of determining compliance, only the value of the shares owned outright, held in our equity incentive plans, or held in trust for the sole benefit of the participant will be counted. If a participant is not in compliance with the guidelines, the Compensation Committee may, among other remedies, require the participant to receive shares of the Company in lieu of earned cash, or enact other policies, based on relevant facts and circumstances.
Claw backs
In 2019, we adopted a “claw back” policy, which allows us to recoup incentive compensation paid to individual NEOs in the event that there is a material restatement of financial results due to fraud or intentional misconduct of such NEO.
Policy on Hedging, Pledging and Other Transactions
Our insider trading policy prohibits all members of the Board of Directors, employees, including executive officers, and our contractual workers from engaging in hedging or monetization transactions related to Company securities, including using financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. Further, employees, members of the Board of Directors and contractual workers may not pledge Aerie stock as security for a loan without the prior written consent of the Chief Financial Officer or the General Counsel.
Employment Agreements with our Named Executive Officers
We believe that providing our NEOs market-competitive security protections in the event of certain termination scenarios serves as an important retention tool and ensures that our NEOs remain dedicated, motivated and focused on achieving the best results for our stockholders. To that end, we have entered into employment agreements with each of our NEOs (the “NEO Employment Agreements”). These agreements provide certain benefits upon termination of employment that we believe reinforce our pay-for-performance philosophy and reflect best governance practices.

The NEO Employment Agreements generally provide for base salary, a target annual bonus opportunity, certain employee benefits, severance upon qualifying terminations of employment (including in connection with a Change in Control as defined in the Company’s Amended and Restated 2013 Omnibus Incentive Plan) and restrictive covenants during employment and for specified periods following termination of employment. The general terms of the NEO Employment Agreements are described in more detail
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in the narrative disclosures following the Grants of Plan-Based Awards table of this Proxy Statement and the terms of the NEO Employment Agreements relating to the termination of an NEO’s employment, including in connection with a Change in Control, are described in more detail in the section titled “Potential Payments Upon Termination or Change in Control” of this Proxy Statement.
Tax and Accounting Considerations
The Compensation Committee considers tax and accounting implications in its executive compensation determinations, although in some cases, other important considerations may outweigh tax or accounting considerations, and the Compensation Committee maintains the flexibility to compensate its officers in accordance with the Company’s compensation philosophy.
Under Section 162(m) of the Code, as amended (“Section 162(m)”), the Company will generally not be entitled to a tax deduction for individual compensation over $1 million that is paid to, generally, the named executive officers, unless the compensation amounts are grandfathered under transition rules that apply to the amended Section 162(m). While the Committee will continue to consider the potential impact of the application of Section 162(m) on compensation for its named executive officers, it may approve compensation arrangements that will not be tax-deductible.
Compensation Risk Assessment
Our management and the Compensation Committee review our compensation practices and policies with regard to risk management. We have reviewed our programs and determined that there are no practices or policies that are likely to lead to excessive risk-taking or have a material adverse effect on the Company. Further, we identified the following policies and practices that serve to mitigate risk:
High level of executive equity ownership to prevent short-term risk taking;
Long-term incentive grants with multi-year vesting;
Stock ownership requirements;
Incentive claw back policy;
Balance between goals and objectives of short- and long-term incentive compensation plans;
Proper administrative and oversight controls; and
Key compensation governance attributes, as discussed above.
Compensation Committee Report
We, the Compensation Committee of the Board of Directors, met with management to review and discuss the Compensation Discussion and Analysis set forth above, and based upon the review and discussions, we recommended to the Board that the Compensation Discussion and Analysis be included in this report.
Aerie Pharmaceuticals, Inc. Compensation Committee
Benjamin F. McGraw, III, Pharm.D., Chair
Gerald D. Cagle, Ph.D.
Richard Croarkin
Peter J. McDonnell, M.D.
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Summary Compensation Table for 2020
The following table sets forth the portion of compensation paid to the NEOs that is attributable to services performed during the fiscal years ended December 31, 2020, 2019 and 2018.
NAME AND PRINCIPAL POSITIONYEARSALARY
($)
NON-EQUITY INCENTIVE PLAN COMPENSATION
($)(1)
STOCK AWARDS
($)(2)
OPTION AWARDS
($)(3)
ALL OTHER COMPENSATION
($)(4)
TOTAL
($)
Vicente Anido, Jr., Ph.D.
2020795,675521,326593,0401,710,0483,620,089
Chief Executive Officer and Chairman of the Board2019772,500362,3031,094,5383,300,3255,529,666
2018750,000409,5001,360,8664,254,3606,774,726
Richard J. Rubino
2020476,890229,000248,865711,49411,9221,678,171
Chief Financial Officer,
Secretary and Treasurer
2019463,000145,799459,4281,385,60411,5752,465,406
2018450,000175,500571,2181,785,8325,6252,988,175
Thomas A. Mitro
2020501,000238,000296,520855,1898,6831,899,392
President and Chief
Operating Officer
2019473,800103,000550,3481,659,8485,9802,792,976
2018460,000161,000684,2622,139,0543,444,316
Casey C. Kopczynski, Ph.D.
2020448,050209,690211,800615,8337,8411,493,214
Chief Scientific Officer2019435,000139,896344,5601,038,8457,6131,965,914
2018415,000161,850428,4001,339,3211,1832,345,754
John W. LaRocca, Esq.
2020442,900207,30074,130212,0878,663945,080
General Counsel and
Assistant Secretary
2019430,000136,848493,2501,454,8079,4542,524,359
2018361,141153,700975,6002,677,3836,2254,174,049
David A. Hollander, M.D., M.B.A.(5)
2020441,917206,850648,767
Chief Research and
Development Officer
201961,894185,000476,2501,371,9852,095,129
(1)Represents bonuses payable in accordance with the employment agreement of each respective NEO, as further described below in the section entitled “NEO Employment Agreements.”
(2)Amounts reflected in this column represent the grant date fair value of restricted stock awards. The grant date fair value is measured based on the closing price of our common stock on the date of grant in accordance with Financial Accounting Standards Board’s Accounting Standards Codification Topic 718: Compensation—Stock Compensation (“ASC 718”). The valuation methodology and assumptions used in determining such amounts are described in the notes to our audited consolidated financial statements included in our Form 10-K filed with the SEC on February 26, 2021.
(3)Amounts reflected in this column represent the grant date fair value of options to purchase common stock, computed in accordance with ASC 718. The valuation methodology and assumptions used in determining such amounts are described in the notes to our audited consolidated financial statements included in our Form 10-K filed with the SEC on February 26, 2021.
(4)Amounts reflected in this column represent matching contributions under the Company’s 401(k) retirement plan paid during the fiscal year.
(5)Amounts reflected in the “Salary” and “Non-Equity Incentive Plan Compensation” columns reflect Dr. Hollander’s 2020 mid-year salary increase. Further, Dr. Hollander did not receive long-term incentive awards in 2020 due to his start date of November 2019, at which time he received sign-on incentives in accordance with his Employment Agreement.
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Grants of Plan-Based Awards in 2020
The following table summarizes the awards granted to each of the NEOs during the fiscal year ended December 31, 2020.
ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS(1)
ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OF UNITS(2)
ALL OTHER OPTION AWARDS: NUMBER OF SECURITIES UNDERLYING OPTIONS(3)
EXERCISE OR BASE PRICE OF OPTION AWARDS
($/Shares)(4)
GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS($)(5)
NAMEGRANT DATETHRESHOLD ($)TARGET
 ($)
MAXIMUM ($)
Vicente Anido, Jr., Ph.D.
Performance Bonus556,9731,113,946
Stock Option Award2/6/2020125,00021.181,710,048
Restricted Stock Award2/6/202028,000593,040
Richard J. Rubino
Performance Bonus238,445476,890
Stock Option Award2/6/202052,00021.18711,494
Restricted Stock Award2/6/202011,750248,865
Thomas A. Mitro
Performance Bonus250,500501,000
Stock Option Award2/6/202062,50021.18855,189
Restricted Stock Award2/6/202014,000296,520
Casey C. Kopczynski, Ph.D.
Performance Bonus224,025448,050
Stock Option Award2/6/202045,00021.18615,833
Restricted Stock Award2/6/202010,000211,800
John W. LaRocca, Esq.
Performance Bonus221,450442,900
Stock Option Award2/6/202015,50021.18212,087
Restricted Stock Award2/6/20203,50074,130
David A. Hollander, M.D., M.B.A.(6)
Performance Bonus220,958441,916
(1)The dollar amounts set forth in the target column are calculated in accordance with the employee agreement of the respective NEO, as further described below in the section entitled “NEO Employment Agreements.”
(2)Represents a grant of restricted stock awards for all our NEOs granted under the Aerie Pharmaceuticals, Inc. Second Amended and Restated Omnibus Incentive Plan (the “Amended and Restated Equity Plan”). All restricted stock awards vest in equal annual installments over a four-year period from the grant date of February 6, 2020, such that the shares of restricted stock will be fully vested on February 6, 2024.
(3)Represents stock option awards granted under the Amended and Restated Equity Plan. All stock option awards have a four-year vesting schedule, vesting equally over 48 months from the grant date of February 6, 2020, such that the option will be fully vested on February 6, 2024. All stock option awards have a 10-year term.
(4)The exercise prices reflect the closing price of our stock on the grant date.
(5)Amounts reflected in this column represent the grant date fair value of stock awards and option awards computed in accordance with ASC 718. The valuation methodology and assumptions used in determining such amounts are described in the notes to our audited consolidated financial statements included in our Form 10-K filed with the SEC on February 26, 2021.
(6)Dr. Hollander did not receive long-term incentive awards in 2020 due to his start date of November 2019, at which time he received sign-on incentives in accordance with his Employment Agreement.
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NEO Employment Agreements
We have entered into employment agreements with each of our NEOs and believe these agreements have helped create stability for our management team. These agreements provide for the basic terms of their employment, as described below. In addition, each agreement provides for severance upon certain qualifying terminations as described below in the section “—Potential Payments upon Termination or Change-in-Control.”
Chief Executive Officer (Vicente Anido, Jr., Ph.D.)
On July 25, 2017, we entered into an amended and restated employment agreement with Dr. Anido which provides for the following material terms:
an initial term expired on July 25, 2020, with automatic extensions for successive one (1) year periods thereafter, unless either party provides written notice of non-renewal at least 180 days prior to the end of the then applicable term; and
payment of base salary ($795,675 per annum as of February 6, 2020) and eligibility to receive a target annual bonus equal to a percentage of his base salary (for 2020, 70%), with the actual amount of the annual bonus to be determined by our Board based on achievement of the relevant performance goals, as described above in the section “—Annual Bonus (Non-Equity Incentive Compensation Plan”).
After an overall review of Dr. Anido’s compensation package, on February 4, 2021, our Board approved an increase in Dr. Anido’s base salary to $811,589 while keeping his target annual bonus percentage consistent with the percentage set for 2020. Dr. Anido’s base salary may be increased annually at the discretion of the Board and may be decreased only in connection with an overall reduction in executive officer salaries.
Chief Financial Officer (Richard J. Rubino)
On March 6, 2017, we entered into an amendment to the amended and restated employment agreement with Mr. Rubino, effective as of December 18, 2013 which collectively provides for the following material terms:
Mr. Rubino will continue to serve as our Chief Financial Officer for successive one (1) year periods which will renew automatically on December 18th of each year unless either party provides 90 days’ notice of non-renewal; and
payment of base salary ($476,890 per annum as of February 6, 2020) and eligibility to receive a target annual bonus equal to a percentage of his base salary (for 2020, 50%), with the actual amount of the annual bonus to be determined by our Board based on achievement of the relevant performance goals, as described above in the section “—Annual Bonus (Non-Equity Incentive Compensation Plan”).
After an overall review of Mr. Rubino’s compensation package, on February 4, 2021, our Board approved an increase in Mr. Rubino’s base salary to $486,430 while keeping his target annual bonus percentage consistent with the percentage set for 2020. Mr. Rubino’s base salary may be increased annually at the discretion of the Board, and may be decreased only in connection with an overall reduction in executive officer salaries.
President and Chief Operating Officer (Thomas A. Mitro)
On March 6, 2017, we entered into an amendment to the amended and restated employment agreement with Mr. Mitro, effective as of December 18, 2013 which collectively provides for the following material terms:
Mr. Mitro will continue to serve as our President and Chief Operating Officer for successive one (1) year periods which renew automatically on December 18 of each year unless either party provides 90 days’ notice of non-renewal; and
payment of base salary ($501,000 per annum as of February 6, 2020) and eligibility to receive a target annual bonus equal to a percentage of his base salary (for 2020, 50%), with the actual amount of the annual bonus to be determined by our Board based on achievement of the relevant performance goals, as described above in the section “—Annual Bonus (Non-Equity Incentive Compensation Plan”).
After an overall review of Mr. Mitro’s compensation package, on February 4, 2021, our Board approved an increase in Mr. Mitro’s base salary to $511,020 while keeping his target annual bonus percentage consistent with the percentage set for 2020. Mr. Mitro’s
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base salary may be increased annually at the discretion of the Board, and may be decreased only in connection with an overall reduction in executive officer salaries.
Chief Scientific Officer (Casey C. Kopczynski, Ph.D.)
On March 6, 2017, we entered into an amendment to the employment agreement with Dr. Kopczynski, dated December 18, 2013 which collectively provides for the following material terms:
Dr. Kopczynski will continue to serve as our Chief Scientific Officer for successive one (1) year periods which renew automatically on December 18 of each year unless either party provides 90 days’ notice of non-renewal; and
payment of base salary ($448,050 per annum as of February 6, 2020) and eligibility to receive a target annual bonus equal to a percentage of his base salary (for 2020, 50%), with the actual amount of the annual bonus to be determined by our Board based on achievement of the relevant performance goals, as described above in the section “—Annual Bonus (Non-Equity Incentive Compensation Plan”).
After an overall review of Dr. Kopczynski’s compensation package, on February 4, 2021, our Board approved an increase in Dr. Kopczynski’s base salary to $457,010 while keeping his target annual bonus percentage consistent with the percentage set for 2020. Dr. Kopczynski’s base salary may be increased annually at the discretion of the Board, and may be decreased only in connection with an overall reduction in executive officer salaries.
General Counsel and Assistant Secretary (John W. LaRocca, Esq.)
On January 19, 2018, we entered into an employment agreement with Mr. LaRocca which provides for the following material terms:
an initial term that expired on February 19, 2021, with automatic extensions for successive one (1) year periods thereafter, unless either party provides written notice of non-renewal at least 90 days prior to the end of the applicable term; and
payment of base salary ($442,900 per annum as of February 6, 2020) and eligibility to receive a target annual bonus equal to a percentage of his base salary (for 2020, 50%), with the actual amount of the annual bonus to be determined by our Board based on achievement of the relevant performance goals, as described above in the section “—Annual Bonus (Non-Equity Incentive Compensation Plan”).
After an overall review of Mr. LaRocca’s compensation package, on February 4, 2021, our Board approved an increase in Mr. LaRocca’s base salary to $451,760 while keeping his target annual bonus percentage consistent with the percentage set for 2020. Mr. LaRocca’s base salary may be increased annually at the discretion of the Board, and may be decreased only in connection with an overall reduction in executive officer salaries.
Chief Research and Development Officer (David A. Hollander, M.D., M.B.A.)
On October 7, 2019, we entered into an employment agreement with Dr. Hollander which provides for the following material terms:
an initial term commenced on November 11, 2019 and will expire on November 11, 2022, with automatic extensions for successive one (1) year periods thereafter, unless either party provides written notice of non-renewal at least 90 days prior to the end of the applicable term;
a guaranteed bonus payment of $185,000 in respect of calendar year 2019, which amount must be returned to the Company in full in the event Dr. Hollander voluntary leaves or is terminated for cause within two years of the payment date (which occurred in February 2020); and
payment of base salary ($450,000 per annum as of May 27, 2020) and eligibility to receive a target annual bonus equal to a percentage of his base salary (for 2020, 50%), with the actual amount of the annual bonus to be determined by our Board based on achievement of the relevant performance goals, as described above in the section “—Annual Bonus (Non-Equity Incentive Compensation Plan”).
After an overall review of Dr. Hollander’s compensation package, on February 4, 2021, our Board approved an increase in Dr. Hollander’s base salary to $459,000 while keeping his target annual bonus percentage consistent with the percentage set for 2020.
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Dr. Hollander’s base salary may be increased annually at the discretion of the Board, and may be decreased only in connection with an overall reduction in executive officer salaries.
All NEOs — Restrictive Covenants
In addition, each NEO employment agreement provides that the NEO, during the employment term and thereafter, has an obligation of confidentiality and non-disclosure in regard to any confidential and proprietary information owned by, or received by or on behalf of, the Company or any of its affiliates. Additionally, each NEO employment agreement provides that during the employment term and for a period of 12 months thereafter, the NEO shall not, directly or indirectly, without the Company’s prior written consent (a) hire, contact, induce or solicit for employment any person who is, or within six months prior to the date of such hiring, contacting, inducing or soliciting was, an employee of the Company or any of its affiliates, or (b) induce or solicit any customer, client or vendor of, or other person having a business relationship with, the Company or any of its affiliates to terminate its relationship or otherwise cease doing business in whole or in part with the Company or any of its affiliates, or interfere with any relationship between the Company or any of its affiliates and any of their respective customers, clients, vendors or any other business contacts.
Outstanding Equity Awards at 2020 Fiscal Year-End
The following table provides information concerning outstanding equity awards for each of our NEOs as of December 31, 2020. As of December 31, 2020, the fair market value of a share of our common stock was $13.51.
NAMEOPTION AWARDSSTOCK AWARDS
NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS EXERCISABLE
(#)
NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS UNEXERCISABLE
(#)
OPTION EXERCISE PRICE ($)OPTION EXPIRATION DATENUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED
(#)
MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED
($)
Vicente Anido, Jr., Ph.D.
846,329(1)3.159/12/2023
300,000(1)20.703/13/2024
133,125(1)28.032/25/2025
150,504(1)16.692/24/2026
149,0486,480(2)44.252/23/2027
81,00433,354(3)53.552/8/2028
52,41461,944(4)43.072/7/2029
26,04298,958(5)21.182/6/2030
4,320(6)58,363
12,706(7)171,658
19,060(8)257,501
28,000(9)378,280
Richard J. Rubino
174,939(1)2.9010/15/2022
25,000(1)3.159/12/2023
89,000(1)20.703/13/2024
54,375(1)28.032/25/2025
60,000(1)16.692/24/2026
41,2271,792(2)44.252/23/2027
34,00014,000(3)53.552/8/2028
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22,00026,000(4)43.072/7/2029
10,83341,167(5)21.182/6/2030
1,195(6)16,144
5,333(7)72,049
8,000(8)108,080
11,750(9)158,743
Thomas A. Mitro
126,984(1)3.158/26/2023
63,499(1)3.159/12/2023
126,000