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☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | ||||
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May 18, 2020
NOTICE IS HEREBY GIVEN that
1. | to elect |
2. | to approve, on an advisory basis, the compensation of our named executive officers, or NEOs, as described in the accompanying |
3. | to approve the amendment and restatement of the Sangamo Therapeutics Inc. 2018 Equity Incentive |
Plan, or the 2018 Plan, to, |
4. | to approve an amendment to the Company’s Seventh Amended and Restated Certificate of Incorporation, as amended, or the Restated Certificate, to increase the total number of shares of our common stock authorized for issuance from 160,000,000 shares to 320,000,000 shares; |
5. | to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, |
6. | to transact such other business as may properly come before the meeting. |
In accordance with rules established by the Securities and Exchange Commission, we
|
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on May 18, 2020 at 9:00 a.m. Pacific Time at the Grand Hyatt at SFO, 55 South McDonnell Rd, San Francisco, CA 94128 The Proxy Statement, Proxy Card and Annual Report on Form 10-K for 2019 are available at: www.envisionreports.com/SGMO |
Sincerely, | |
Alexander D. Macrae | |
President and Chief Executive Officer |
Richmond,
Important Notice Regarding* We intend to hold the AvailabilityAnnual Meeting in person. However, we are sensitive to the public health and travel concerns our management, directors and stockholders may have regarding the evolving COVID-19 pandemic and the related protocols that federal, state and local governments may impose. As a result, we may decide to hold the Annual Meeting in a different location or solely by means of Proxy Materials
Forremote communication (i.e., a virtual-only meeting). Please retain the Stockholdercontrol numbers from your proxy card so that you can access the Annual Meeting if it is converted to a virtual-only meeting. Any such change will be Held on June 11, 2018
at 9:00 a.m. Pacific Time at 501 Canal Boulevard, Richmond, California 94804
The Proxy Statement, Proxy Cardannounced via a press release that will be filed as additional soliciting material with the Securities and Exchange Commission as soon as reasonably practicable before the Annual Report on Form10-K for 2017 are available at:
www.envisionreports.com/SGMO
Meeting.
You are cordially invited to attend the meeting in person. Whether or not you expect to attend the meeting, please vote over the telephone or the Internet, or, if you receive a paper proxy card by mail, by completing, dating, signing and returning the proxy mailed to you, as promptly as possible in order to ensure your representation at the meeting. Even if you have voted by proxy, you may still vote in person if you attend the meeting. 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.
You are cordially invited to attend the Annual Meeting in person. Whether or not you expect to attend the Annual Meeting, please vote over the telephone or the Internet, or, if you receive a paper proxy card by mail, by completing, dating, signing and returning the proxy mailed to you, as promptly as possible in order to ensure your representation at the Annual Meeting. Even if you have voted by proxy, you may still vote in person if you attend the Annual Meeting. 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 Annual Meeting, you must obtain a proxy issued in your name from that record holder. |
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501 Canal
Richmond,
94005
May 18, 2020
Will I receive any otherwho are holding shares in their own name and stockholders who have previously requested a printed set of our proxy materials by mail?
We may send youwith paper copies of our proxy materials instead of a proxy card, along with a second Notice, on or after May 6, 2018.Notice. We also intend to mail a full set of proxy materials to our stockholders of record on or about April 26, 2018.
, 2020.
advisory approval of the compensation of our named executive officers,NEOs as disclosed in this proxy statement (the “Proxy Statement”)Proxy Statement in accordance with SEC rules (Proposal No. 2);
approval of ourthe amendment and restatement of the 2018 Equity Incentive Plan (the “2018 Plan”) (Proposal No. 3); and
approve an amendment to, our 2010 Employee Stock Purchase Plan (the “Purchase Plan”) toamong other things, increase the aggregate number of shares of our common stock reserved for issuance under the Purchase2018 Plan by 2,500,0009,900,000 shares (Proposal No. 3);
ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 20182020 (Proposal No. 5).
To vote in person, come to the Annual Meeting and we will give you a ballot when you arrive.
To vote using the proxy card, simply complete, sign and date the enclosed proxy card that may be deliveredandand return it promptly in the envelope provided. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct.
To vote over the telephone, dial toll-free1-800-652-VOTE (8683) using a touch-tone phone and follow the recorded instructions. You will be asked to provide the company number and control number from the Notice.enclosed proxy card. Your telephone vote must be received by 1:00 a.m. Eastern Time on June 11, 2018May 18, 2020 to be counted.
To vote through the Internet, go to http://www.envisionreports.com/SGMOtoSGMO to complete an electronic proxy card. You will be asked to provide the company number and control number from the Notice.enclosed proxy card. Your Internet vote must be received by 1:00 a.m. Eastern Time on June 11, 2018May 18, 2020 to be counted.
Internet proxy voting may be provided to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies.
Internet proxy voting may be provided to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies. |
March 20, 2020.
such proposals.
Who is paying for this proxy solicitation?
set of proxy materials, or more than one Notice, or combination thereof?
You may grant a subsequent proxy by telephone or through the Internet.
You may submit another properly completed proxy card with a later date.
You may send a timely written notice that you are revoking your proxy to our Secretary at 501 Canal7000 Marina Boulevard, Richmond,Brisbane California 94804.94005. Such notice will be considered timely if it is received at the indicated address by the close of business on Friday, June 8, 2018.
Proposal Number | Proposal Description | Vote Required for Approval | Effect of Abstentions | Effect of Broker Non- Votes | ||||
1 | Election of |
| No effect | No effect | ||||
2 | Advisory approval of the compensation of our named executive officers | “For” votes from holders of a majority in voting power of the | Against | No effect | ||||
3 | Approval of the amendment and restatement of the 2018 Plan |
| ||||||
| “For” votes from holders of a majority in voting power of the | Against | No effect | |||||
4 | Approval of an amendment of the Restated Certificate to increase the total number of shares of common stock authorized for issuance from 160,000,000 shares to 320,000,000 shares | “For” votes from holders of a majority of the outstanding shares entitled to vote on this proposal. | Against | Brokers have discretion to vote(1) | ||||
5 | Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, | “For” votes from holders of a majority in voting power of the | Against | Brokers have discretion to vote(1) |
(1) |
has discretionary authority under NYSE rules to vote your shares on this proposal. For more information, see “If I am a beneficial owner of shares held in street name and I do not provide my broker or bank with my voting instructions, what happens?” and “What are broker non-votes?” above. As a reminder, if you are a beneficial owner of shares held in street name, to ensure your shares are voted in the way you would prefer, youmust provide voting instructions to your broker, bank or other agent by the deadline provided in the materials you receive from your broker, bank or other agent
or the Exchange Act.
and gastroenterology. Dr. Macrae received his B.Sc. in pharmacology and his M.B., Ch.B. with honors from Glasgow University. He is a member of the Royal College of Physicians. Dr. Macrae also earned his Ph.D. in molecular genomics at King’s College, Cambridge. The Nominating and Corporate Governance Committee and the Board believe that Dr. Macrae’sday-to-day leadership and intimate knowledge of our business and operations, as well as our relationships with partners, collaborators and investors, provideprovides the Board with anin-depth understanding of the Company.
Roger Jeffs,
member of the board of directors of Albireo Pharma, Inc., Axsome Therapeutics, Inc., Axovant Sciences Ltd. and Dova Pharmaceuticals, Inc. HeMarkels received a B.A. in Chemistry from Duke University and his Ph.D. in Pharmacologychemical engineering from the University of North Carolina SchoolCalifornia, Berkeley and his B.S. in chemical engineering from the University of Medicine.Delaware. The Nominating and Corporate Governance Committee and the Board believe that Dr. Jeffs’Markels’ extensive leadership experience at a publicly traded biotechnology company commercializing rare diseasesin operations, strategy and development provides valuable operational, strategy and management skills to the Board with important qualifications and skills as the Company moves towards the possible commercialization of its novel genomic and cell therapy assets.
Steven J. Mento, Ph.D.Board.
Board.
and acquisitions, (“or M&A”),&A, strategic and capital markets transactions. Prior to joining Merrill Lynch she served as a financial analyst in the M&A group at Wasserstein Perella & Co., an investment banking firm, from July 1997 to September 1998. Ms. Ramasastry currently serves on the Industry Advisory Board of the Michael J. Fox Foundation for Parkinson’s Research, the board of directors of Pain Therapeutics,Cassava Sciences, Inc., Vir Biotechnology, Inc., Innovate Biopharmaceuticals, Inc. and lead business advisor for the European Prevention of Alzheimer’s Dementia consortium.Glenmark Pharmaceuticals, Ltd. Ms. Ramasastry received her B.A. in economics with honors and distinction and an M.S. in management science and engineering from Stanford University, as well as an M. Phil. in management studies from the University of Cambridge where she is a guest lecturer for the Bioscience Enterprise Programme and serves on the Cambridge Judge Business School Advisory Council. Ms. Ramasastry is also a Health Innovator Fellow of the Aspen Institute and a member of the Aspen Global Leadership Network. The Nominating and Corporate Governance Committee and the Board believe that Ms. Ramasastry’s extensive experience in global healthcare investment banking and strategic advisory consulting provides valuable financial, commercial assessment and business development skills to the Board and her thorough understanding of our technology and programs provides the Board with valuable insight in the development of our novel genomic and cell therapy assets.
2019.
https://investor.sangamo.com/corporate-governance/governance-overview.
Committee effective in June 2019, after the 2019 annual meeting of stockholders. Ms. Parker served on the Compensation Committee until the 2019 annual meeting of stockholders, at which point the Compensation Committee was reconstituted with Mr. Zakrzewski and Dr. Smith. Ms. Parker was reappointed to serve on the Compensation Committee in September 2019. Effective April 1, 2020, the Compensation Committee will be reconstituted with Mr. Zakrzewski, Dr. Smith and Mr. Meyers, each of whom is independent under applicable Nasdaq listing standards and SEC rules. Dr. Roger Jeffs and Dr. Steven Mento, each of whom was independent under applicable Nasdaq listing standards and SEC rules, previously served on the Compensation Committee until their terms expired at the 2019 annual meeting of stockholders when they did not stand for reelection. Mr. Zakrzewski serves as Chairman of this committee. Before Mr. Zakrzewski was appointed to the Compensation Committee, Dr. Mento served as Chairman of this committee.
or the 401(k) Plan.
The Compensation Committee is authorized to engage, oversee and terminate independent compensation consultants and other professionals to assist in the design, formulation, analysis and implementation of compensation programs for our executive officers and other key employees. The Compensation Committee retained the services of Radford, ana part of Aon Hewitt Company (“Radford”),plc, or Radford, in order to (i) assess compensation levels and mix of elements for our executive officers and vice presidents for 2017,2019, (ii) review the peer group criteria and to recommend specific companies, (iii) assess the compensation of thenon-employee directors and (iv) advise the committee on executive compensation and governance trends based on peer group trends and market practices.
skills are complementary to existing Board members’ skills or meet the Board’s need for operations, management, commercial, financial or other expertise. While the Nominating and Corporate Governance Committee does not prescribe specific diversity standards,
501 Canal
Richmond,
94005
Of the eightnine directors on the Board following the annual meeting, sevenAnnual Meeting, eight directors are independent under applicable Nasdaq corporate governance rules. The Board believes that this establishes a strong independent board that provides effective oversight of the Company. Moreover, in addition to feedback provided during the course of Board meetings, the independent directors conduct regular executive sessions without the presence of Dr. Macrae or any other members of management. We believe that our leadership structure of the Board is appropriate given the nature and size of our businesses,business, because it provides both effective independent oversight and expertise in the complexity and management of our operations as a life sciences company.
For 2020, the Board has requested the creation of a Compliance Committee which will be staffed by employees and report directly to the Board. The Compliance Committee will have its first meeting in the second quarter of 2020. Separately, we have created a Corona virus task force that is led by the Chief Financial Officer and reports up to the Board through the Chief Financial Officer and the Chief Executive Officer.
The Board of Directors does not recommend that formal communication procedures be adopted at this time because it believes that informal communications are sufficient to communicate questions, comments and observations that could be useful to the Board.
Name | Fees Earned or Paid in Cash ($) (1) | Option Awards ($) (2) (3) (4) | Total ($) | |||
Robert F. Carey | 60,000 | 45,718 | 105,718 | |||
Stephen G. Dilly | 50,000 | 45,718 | 95,718 | |||
Roger Jeffs (5) | 21,875 | 165,729 | 187,604 | |||
Edward O. Lanphier II (6) | 40,000 | - | 40,000 | |||
Steven J. Mento | 57,500 | 45,718 | 103,218 | |||
H. Stewart Parker | 82,500 | 45,718 | 128,218 | |||
Saira Ramasastry | 50,000 | 45,718 | 95,718 | |||
William R. Ringo (7) | 65,000 | 45,718 | 110,718 | |||
Joseph S. Zakrzewski (5) | 22,500 | 165,729 | 188,229 |
Name | Fees Earned or Paid in Cash ($) (1) | Option Awards ($) (2) (3) (5) | Stock Awards ($) (2) (4) (6) | Total ($) | ||||||||
Robert F. Carey | 60,000 | 92,862 | 23,450 | 176,312 | ||||||||
Stephen G. Dilly | 45,000 | 92,862 | 23,450 | 161,312 | ||||||||
Roger Jeffs (7) | 28,750 | — | — | 28,750 | ||||||||
Steven J. Mento (7) | 27,500 | — | — | 27,500 | ||||||||
James R. Meyers (8) | 10,000 | 190,758 | 54,000 | 254,758 | ||||||||
H. Stewart Parker | 87,500 | 92,862 | 23,450 | 203,812 | ||||||||
Saira Ramasastry | 50,000 | 92,862 | 23,450 | 166,312 | ||||||||
Karen L. Smith | 45,625 | 92,862 | 23,450 | 161,937 | ||||||||
Joseph S. Zakrzewski | 61,250 | 92,862 | 23,450 | 177,562 |
(1) | Consists of the annual retainer fee for service as a member of the Board of Directors or any Board committee. For further information concerning such fees, see the section below entitled “—Director Annual Retainer and Meeting Fees.” |
(2) | Represents the grant date fair value of the awards computed in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification Topic 718, Compensation—Stock Compensation, or ASC 718. The assumptions used in the calculation of such grant date fair values are described in Note 9 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 28, 2020, or the 2019 Form 10-K. |
(3) | Pursuant to the |
(4) | Pursuant to the |
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(5) | As of December 31, |
(6) | As of December 31, 2019, the following non-employee directors held RSUs for the following number of shares of our common stock: Mr. |
(7) | Drs. Jeffs and Mento determined not to stand for re-election and their terms expired as of the 2019 annual meeting of stockholders. |
(8) | Mr. Meyers was appointed as a non-employee |
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Processes and Procedures for Determining Director Compensation.
Compensation
The Automatic Grant Program under the 2013 Plan specifically provides the Compensation Committee with the ability to implement a program whereby directors are given the option to elect to convert their cash board retainer fees into restricted stock unit (“RSU”) grants. The Compensation Committee has not implemented such a deferral program.
Under the Automatic Grant Program in effect under the 2013 Plan, on the date of each annual stockholders meeting, each continuingnon-employee member of the Board of Directors who served as a director for the previous six months automatically receives an option to purchase 10,000 shares of our common stock. Each option granted under the Automatic Grant Program will have an exercise price per share equal to the fair market value per share of our common stock on the option grant date and will have a maximum term of 10 years, subject to earlier termination following the optionee’s cessation of Board service. Each option is immediately exercisable for all the option shares, but any shares purchased under the option will be subject to repurchase by the Company, at the exercise price paid per share, upon the optionee’s cessation of Board service prior to vesting in those shares. The shares subject to each automatic option grant will vest in successive equal monthly installments upon completion of each month of Board service over aone-year period. However, the shares subject to each automatic option grant will immediately vest upon (i) the optionee’s death or permanent disability while serving as a member of the Board of Directors, (ii) an acquisition of the Company by merger or asset sale, (iii) the successful completion of a tender offer for more than 50% of our outstanding voting stock or (iv) a change in the majority of the Board of Directors effected through one or more proxy contests for Board of Directors membership. The Automatic Grant Program under the 2018 Plan that is
The Compensation Committee awarded Dr. Jeffs and Mr. Zakrzewski an initial option to purchase 30,000 shares of our common stock on June 27, 2017, with an exercise price per share equal to the closing price per share of our common stock on that date. The option will vest in 36 successive equal monthly installments over the 36-month period measured from the grant date, subject to Dr. Jeffs’ and Mr. Zakrzewski’s continued service as a member of the Board on each monthly vesting date. The remaining terms of their options are similar to the terms of the annual grants under the Automatic Grant Program.
The Automatic Grant Program in effect under the 2013 Plan provides the Compensation Committee with discretion to grant, in lieu of the option grant that would otherwise be awarded under such program, a number of shares of restricted stock or RSUs to thenon-employee directors with a fair market value substantially equal to the grant date fair value of the option that would otherwise be awarded. The Automatic Grant Program under the 2018 Plan that is the subject of Proposal No. 3 does not retain this feature and instead provides for automatic grants of a specified number of options and RSUs.
Pursuant to the Automatic Grant Program in effect under the 2013 Plan, on the date of the 2017 annual meeting of stockholders, Mr. Carey, Dr. Dilly, Dr. Mento, Ms. Parker, Ms. Ramasastry and Mr. Ringo each received an option to purchase 10,000 shares of common stock with an exercise price per share of $7.20.
Proposed New Automatic Grant Program Under 2018 Equity Incentive Plan
If Proposal No. 3 is approved at the Annual Meeting as of such date the Automatic Grant Program under the 2013 Plan will be replaced by a new Automatic Grant Program under the 2018 Plan. Under thecurrent automatic grant program ofunder the 2018 Plan, on the date of each annual stockholders meeting, commencing with the Annual Meeting, each individual serving as anon-employee Board member at that time, who has served on our Board for at least six months, and who will continue serving as anon-employee Board member immediately after such annual stockholders meeting will automatically be granted a nonqualified stock option, (“NSO”)or NSO, to purchase 15,000 shares of common stock and a RSU in respect of 2,500 shares of common stock under the 2018 Plan. The shares subject to each annual 15,000 share automatic NSO grant made to a continuing Board member will vest in 12 successive equal monthly installments upon such director’s completion of each month of Board service over the12-monththe one-year period measured from the grant date. The shares subject to each 2,500 share automatic RSU grant made to a continuing Board member will fully vest on the earlier of (x) the first anniversary of the date of grant or (y) the day prior to the next annual stockholders meeting, subject to the director’s continued service on the Board through the applicable vesting date.
Under the current automatic grant program under the 2018 Plan, on the date of the 2019 annual meeting of stockholders, Mr. Carey, Dr. Dilly, Ms. Parker, Ms. Ramasastry, Dr. Smith and Mr. Zakrzewski each received an option to purchase 15,000 shares of common stock with an exercise price per share of $9.38, and a RSU award of 2,500 shares.
Recommendationtime of the Boarddirector’s termination of Directors
continuous service.
2019.
compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the various compensation tables and the accompanying narrative discussion and any related material included in this Proxy Statement.”
Recommendation of the Board of Directors
Meeting and entitled to vote on this Proposal No. 2.
If directors by 10,000 shares; and (b) increase the number of shares of our common stock that are subject to annual stock option and RSU awards granted to our continuing non-employee directors by 5,000 shares and 7,500 shares, respectively; (ii) change the date of grant for annual stock option and RSU awards granted to our continuing non-employee directors for each year following 2020 (from the date of the annual stockholders meeting in such year to the 25th day of February of such year (or if such 25th day is not a trading day, the immediately preceding trading day in February)); (iii) change the vesting schedule for annual RSU awards granted to our continuing non-employee directors for each year following 2020 (from full vesting on the earlier of the first anniversary of the date of grant or the day prior to the next annual stockholders meeting to full vesting on the first anniversary of the date of grant, in each case subject to the director’s continuous service through the applicable vesting date); and (iv) provide that an individual must have served as a non-employee director for at least three (instead of six) months prior to the date of grant in order to be eligible to receive annual stock option and RSU awards (and for purposes of this Proposal No. 3, we refer to such changes as the “Automatic Grant Program Amendment”).
3).
including our “burn rate,” to ensure that we maximize stockholders’ value by granting the appropriate number of equity awards necessary to attract, reward, and retain employees,non-employee directors and consultants. The tables below show certain historical overhang and burn rate percentages.
• | Market Competitiveness.The Amended 2018 Plan plays an important role in our effort to align the interests of participants and stockholders. Moreover, in our industry, equity awards are an important tool in recruiting, retaining and motivating highly skilled and critical employee talent, upon whose efforts our success is dependent. |
• | Estimated Equity Usage and Share Pool Duration. Our Compensation Committee considered our historic burn rate levels in determining how long the Amended 2018 Plan share authorization could potentially last. We expect the share authorization under the Amended 2018 Plan to provide us with enough shares for awards for approximately one to two years, with actual timing dependent on a variety of factors, including the price of our shares and hiring activity during the next few years, and rates of forfeiture of outstanding awards, and noting that future circumstances may require us to change our current equity grant practices. We cannot predict our future equity grant practices, the future price of our shares or future hiring activity with any degree of certainty at this time, and the share reserve under the Amended 2018 Plan could last for a shorter or longer period of time. |
• | External Factors. Radford’s analysis, which is based on generally accepted evaluation methodologies, concluded that the number of shares under the Amended 2018 Plan is well within generally accepted standards as measured by an analysis of its cost relative to industry standards. |
As of March 20, 2020 Record Date | |||||
Total number of shares of common stock subject to outstanding stock options | 12,512,294 | ||||
Weighted-average exercise price of outstanding stock options | $ | 9.83 | |||
Weighted-average remaining term in years of outstanding stock options | 8.26 | ||||
Total number of shares of common stock subject to outstanding full value awards | 2,282,279 | ||||
Total number of shares of common stock available for grant under the 2018 Plan | 1,784,833 | ||||
Total number of shares of common stock available for grant under other equity incentive plans | 2,757,600 | * | |||
Total number of shares of common stock outstanding | 116,211,355 | ||||
Per-share closing price of common stock as reported on The Nasdaq Global Select Market | $ | 6.01 |
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plan. |
* Reflects the number of shares available under the Purchase Plan as of the record date. No other shares are available for grant under any other equity incentive plan.
Burn Rate
For the Year Ended December 31, | ||||
Total number of shares of common stock subject to stock options granted | ||||
Total number of shares of common stock subject to full value awards granted | ||||
Weighted-average number of shares of common stock outstanding | ||||
Adjusted Burn Rate (1) | % | |||
Unadjusted Burn Rate (2) | 4.79 | % |
(1) | Adjusted Burn Rate is calculated as: (shares subject to stock options granted + shares subject to full value awards granted)/weighted-average common stock outstanding. For purposes of this calculation, shares subject to full value awards granted are increased by a 1.5x volatility multiplier for fiscal year 2019. However, the share reserve under the 2018 Plan is reduced by 1.33 shares for each share issued pursuant to a full value award. |
(2) | Unadjusted Burn Rate is calculated as: (shares subject to stock options granted + shares subject to full value awards granted)/weighted-average common stock outstanding. |
If the 2018 Plan and the new share reserve of 8,800,000 shares is approved by our stockholders, we expect to have approximately 10,418,58811,684,833 shares available for grant after our Annual Meeting (based on shares available as of April 17, 2018). We believe the adoption ofunder the 2018 Plan as of March 20, 2020) (plus the Prior Plans’ Returning Shares (as defined and further described below under “—Description of the Amended 2018 Plan—Shares Available for Awards”) as such shares become available from time to time).
Key Features of the Amended 2018 Plan
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The following are such provisions in the 2018 Plan that are continuing unchanged from the 2013 Plan:
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• | No liberal share counting provisions. The following shares will not become available again for issuance under the Amended 2018 Plan: (i) any shares that are reacquired or withheld (or not issued) by us to satisfy the exercise or purchase price of an award; (ii) any shares that are reacquired or withheld (or not issued) by us to satisfy a tax withholding obligation in connection with an award; (iii) any shares repurchased by us on the open market with the proceeds of the exercise or purchase price of an award; and (iv) in the event that a stock appreciation right is settled in shares, the gross number of shares subject to such award. |
• | Restrictions on dividends. The Amended 2018 Plan provides that dividends or dividend equivalents may not be paid or credited to stock options or stock appreciation rights. In addition, with respect to any award other than a stock option or stock appreciation right, the Amended 2018 Plan provides that (i) no dividends or dividend equivalents may be paid with respect to any shares of our common stock subject to such award before the date such shares have vested, (ii) any dividends or dividend equivalents that are credited with respect to any such shares will be subject to all of the terms and conditions applicable to such shares under the terms of the applicable award agreement (including any vesting conditions), and (iii) any dividends or dividend equivalents that are credited with respect to any such shares will be forfeited to us on the date such shares are forfeited to or repurchased by us due to a failure to vest. |
Successor to 2013 Plan
The 2018 Plan is intended to be the successor to the 2013 Plan. If the 2018 Plan is approved by our stockholders, no additional stock awards will be granted under the 2013 Plan. If the 2018 Plan is not approved by our stockholders, the 2018 Plan will not become effective and the 2013 Plan will continue to be effective in accordance with its terms.
Types of Stock Awards
awards.
“
Anybecome available again for issuance under the Amended 2018 Plan and, for purposes of this Proposal No. 3, such shares will be the “Amended 2018 Plan Returning Shares.”
gross number of shares subject to such award.
under the Amended 2018 Plan, including the period of their exercisability and vesting, subject to the minimum vesting requirements.requirement described under “—Minimum Vesting Requirement” below. The Plan Administrator also has the authority to provide for accelerated exercisability and vesting of stock awards. Subject to the limitations set forth below, the Plan Administrator also determines the fair market value applicable to a stockan award and the exercise or strike price of stock options and stock appreciation rights granted under the Amended 2018 Plan.
Acceptable forms of consideration for the purchase of our common stock pursuant to the exercise of a stock option under the Amended 2018 Plan will be determined by the Plan Administrator and may include payment: (i) by cash, check, bank draft or money order payable to us; (ii) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board;
• | the exercise price of the ISO must be at least 110% of the fair market value of the common stock subject to the ISO on the date of grant; and |
• | the term of the ISO must not exceed five years from the date of grant. |
Restricted Stock Awards
Restricted stock unit
(xxiv) cash flow; (xxv) cash flow per share; (xxvi) share price performance; (xxvii) debt reduction; (xxviii) implementation or completion of projects or processes; (xxix) employee retention; (xxx) stockholders’ equity; (xxxi) capital expenditures; (xxxii) debt levels; (xxxiii) operating profit or net operating profit; (xxxiv) workforce diversity; (xxxv) growth of net income or operating income; (xxxvi) billings; (xxxvii) bookings; and (xxxviii) other measures of performance selected by the Plan Administrator.
principles.
The shares subject to each annual 10,000 share automatic RSU award grant made to a continuing Board member following 2020 will fully vest on the first anniversary of the date of grant, subject to the director’s continuous service through the applicable vesting date.
Each automatic NSO grant will have an exercise price per share equal to the fair market value per share of our common stock on the grant date and will have a term of 10 years, subject to earlier termination following the optionee’s cessationdirector’s termination of Boardcontinuous service. Each automatic NSO option grant will be immediately exercisable for all of the option shares; however, we may repurchase, at the lower of the exercise price paid per share or the fair market value per share, any shares purchased under the NSO that are not vested at the time of the optionee’s cessationdirector’s termination of Boardcontinuous service.
change in control or hostile takeover.
In
For purposes of the Amended 2018 Plan, a change in control generally will be deemed to occur if (1) we are acquired pursuant to a merger, consolidation or other reorganization approved by our stockholders, (2) there occurs a stockholder approvedstockholder-approved sale or other disposition of all or substantially all our assets, or (3) there occurs any transaction or series of related transactions pursuant to which any person or group of related persons becomes directly or indirectly the beneficial owner of securities possessing (or convertible into or exercisable for securities possessing) more than fifty percent50% of the total combined voting power of our securities outstanding immediately after the consummation of such transaction or series of related transactions, whether such transaction involves a direct issuance from us or the acquisition of outstanding securities held by one or more of our stockholders.
Under the 2018 Plan, a stock award may be subject to additional acceleration of vesting and exercisability upon or after a change in control or hostile takeover (as defined in the 2018 Plan and described below, as may be provided in the participant’s stock award agreement, in any other written agreement with us, but in the absence of such provision, no such acceleration will occur.
Compensation Committee.
recognize ordinary income equal to the excess, if any, of the fair market value of the underlying stock on the date of exercise of the stock option over the exercise price. If the participant is employed by us or one of our affiliates, that income will be subject to withholding taxes. The participant’s tax basis in those shares will be equal to his or her fair market value on the date of exercise of the stock option, and the participant’s capital gain holding period for those shares will begin on that date.
generally will not recognize income until the stock becomes vested, at which time the recipient will recognize ordinary income equal to the excess, if any, of the fair market value of the stock on the date it becomes vested over any amount paid by the recipient in exchange for the stock. A recipient may, however, file an election with the Internal Revenue Service, within 30 days following his or her receipt of the restricted stock award, to recognize ordinary income, as of the date the recipient receives the restricted stock award, equal to the excess, if any, of the fair market value of the stock on the date the restricted stock award is granted over any amount paid by the recipient for the stock.
Section 162(m) Limitations
under Amended 2018 Plan
Name and Position | Dollar Value | Number of Shares | ||
Alexander D. Macrae President and Chief Executive Officer | (1) | (1) | ||
Kathy Y. Yi, Senior Vice President and Chief Financial Officer | (1) | (1) | ||
H. Ward Wolff Former Executive Vice President and Chief Financial Officer | (2) | (2) | ||
Edward R. Conner, M.D. Senior Vice President and Chief Medical Officer | (1) | (1) | ||
Curt A. Herberts, III Senior Vice President and Chief Business Officer | (1) | (1) | ||
All current executive officers as a group (5 persons) | (1) | (1) | ||
All current directors who are not executive officers as a group (7 persons) | (3) | (3) | ||
All current employees, including current officers who are not executive officers, as a group (192 persons) | (1) | (1) |
(1) As described above in this Proposal No. 3 future benefits under the 2018 Plan are generally discretionary for our employees, including executive officers, and consultants,
Name and Position | Number of Shares | ||
Alexander D. Macrae President and Chief Executive Officer | (1) | ||
Sung H. Lee Executive Vice President and Chief Financial Officer | (1) | ||
Stephane Boissel Executive Vice President, Corporate Strategy and Interim Chief Financial Officer, June 2019 to October 2019 | (1) | ||
Adrian Woolfson Executive Vice President, Research and Development | (1) | ||
Gary H. Loeb Executive Vice President, General Counsel and Secretary | (1) | ||
R. Andrew Ramelmeier Executive Vice President, Technical Operations | (1) | ||
Kathy Y. Yi Former Executive Vice President and Chief Financial Officer | (1) (2) | ||
All current executive officers as a group | (1) | ||
All current directors who are not executive officers as a group | (3) | ||
All current employees, including all current officers who are not executive officers, as a group | (1) |
(1) | Awards granted under the Amended 2018 Plan to our executive officers and other employees are discretionary and are not subject to set benefits or amounts under the terms of the Amended 2018 Plan, and we have not granted any awards under the Amended 2018 Plan subject to stockholder approval of this Proposal No. 3. Accordingly, the benefits or amounts that will be received by or allocated to our executive officers and other employees under the Amended 2018 Plan are not determinable. |
(2) | Ms. Yi resigned from her position of Executive Vice President and Chief Financial Officer effective June 7, 2019, and, therefore,
|
(3) | As described above in this Proposal No. 3 under “—Automatic Grant Program for Non-Employee Directors,” each individual who is a non-employee Board member will automatically be granted a NSO to purchase 20,000 shares of common stock and a RSU award in respect of 10,000 shares of common stock on an annual basis as follows: (i) with |
(3) As described above in this Proposal No. 3 under “—Automatic Grant Program for Non-Employee Directors”2020, such annual awards will be granted on the date of the 2020 Annual Meeting; and (ii) with respect to each year following 2020, such annual stockholders meeting, commencing withawards will be granted on the Annual Meeting,25th day of February of such year (or if such 25th day is not a trading day, the immediately preceding trading day in February); in each case, provided that such individual is a non-employee Board member on the date of grant, has served as a non-employee Board member for at least three months prior to the date of grant, and will continue serving as a non-employee Board member at that time, who has served on our Board for at least six months and will continue to serve on our Board immediately following such annual stockholders meeting will automatically be granted a NSO to purchase 15,000 shares of common stock and restricted stock units in respect of 2,500 shares of our common stock. Additionally, each non-employee Board member who is initially appointed or elected to the Board on or after the Annual Meeting will automatically be granted a NSO to purchase 30,000 sharesdate of common stock and restricted stock unit award in respect of 5,000 shares of common stock.grant. If this Proposal No. 3 is approved atby our stockholders, then on and after the date of the 2020 Annual Meeting, optionsany such NSOs and RSU awards will be granted under the Amended 2018 Plan. Under the current terms of the automatic grant program under the Amended 2018 Plan, the aggregate number of shares subject to purchase 105,000such NSOs and RSU awards that will automatically be granted to all of our current directors who are not executive officers as a group will be 240,000 shares each year.
March 20, 2020:
Name and Position | Number of Shares | ||
Alexander D. Macrae President and Chief Executive Officer | 949,000 | ||
Sung H. Lee Executive Vice President and Chief Financial Officer | 456,250 | ||
Stephane Boissel Executive Vice President, Corporate Strategy and Interim Chief Financial Officer, June 2019 to October 2019 | 571,023 | ||
Adrian Woolfson Executive Vice President, Research and Development | 400,000 | ||
Gary H. Loeb Executive Vice President, General Counsel and Secretary | 400,000 | ||
R. Andrew Ramelmeier Executive Vice President, Technical Operations | 252,500 | ||
Kathy Y. Yi Former Executive Vice President and Chief Financial Officer | 134,750 | ||
All current executive officers as a group (1) | 3,028,773 | ||
All current directors who are not executive officers as a group | 297,500 | ||
Each nominee for election as a director: | |||
Robert F. Carey | 35,000 | ||
Stephen G. Dilly | 35,000 | ||
Alexander D. Macrae | 949,000 | ||
John H. Markels | 35,000 | ||
James R. Meyers | 35,000 | ||
H. Stewart Parker | 35,000 | ||
Saira Ramasastry | 35,000 | ||
Karen L. Smith | 52,500 | ||
Joseph S. Zakrzewski | 35,000 | ||
Each associate of any executive officers, current directors or director nominees | — | ||
Each other person who received or is to receive 5% of awards | — | ||
All current employees, including all current officers who are not executive officers, as a group (1) | 6,863,619 |
(1) | Excludes Ms. Yi’s shares because she resigned from her position as Executive Vice President and Chief Financial Officer effective June 7, 2019. |
Recommendation of the Board of Directors
Meeting and entitled to vote on Proposal No. 3.
2010 EMPLOYEE
Our Compensation Committee approved an amendment
Why You Should Voteconduct the research and development and clinical and regulatory activities necessary to Approve the Amendment of the Purchase Plan
The Purchase Plan is an Important Part of Our Employee Compensation Program
Our Board believes that equity compensation is a key element underlyingbring our abilityproduct candidates to market; complete future corporate collaborations and partnerships; attract, retain and motivate employees, officers, directors, consultants and/or advisors; and pursue other business opportunities integral to our employees becausegrowth and success, all of the strong competition for highly trainedwhich could severely harm our business and experienced employees among biotechnology and pharmaceutical companies, especially in the greater San Francisco Bay area. Additionally, theour prospects.
The Size of the Purchase Plan Share Reserve is Reasonable
As of April 17, 2018 only 835,6744, we will not have
Description of the Purchase Plan
The material features of the Purchase Plan as would be effective if the requested share increase set forth in this Proposal No. 4 is approved are described below. The following description of the Purchase Plan is a summary only and is qualified in its entirety by reference to the complete text of the Purchase Plan. Stockholders are urged to read the actual text of the Purchase Plan in its entirety, which is attached to this proxy statement as Appendix B.
Administration
The Purchase Plan is administered by our Compensation Committee, referred to as the ESPP Administrator in this Proposal No. 4. As ESPP Administrator, the Compensation Committee has full authority to adopt administrative rules and procedures and to interpret the provisions of the Purchase Plan.
Shares Subject to the Purchase Plan
As of April 17, 2018, an aggregate of 1,264, 326 shares of ourcurrently outstanding common stock, had been purchased underexcept for effects incidental to increasing the Purchase Plan and 835,674number of shares of common stock remained availableoutstanding, such as dilution of the earnings per share and voting rights of current holders of common stock. The additional shares of common stock authorized by the proposed Common
Annual Meeting. If purchase rights granted under the Purchase Plan expire, lapse or otherwise terminate without being exercised, the shares of our common stock not purchased under such unexercised and expired rights again become available for issuance under the Purchase Plan. The shares issuable under the Purchase Plan may be made available from authorized but unissued shares of our common stock or from shares of common stock repurchasedefforts by us to deter or prevent changes in control, including transactions in which our stockholders might otherwise receive a premium for their shares repurchased on the open market.
Should any change be made to our outstanding common stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares,spin-off transaction or other change affecting the outstanding common stock as a class without our receipt of consideration or should the valueover then-current market prices.
Offering Periods and Purchase Rights
The Purchase Plan allows our eligible employees and those of our participating subsidiaries (whether now existing or subsequently acquired or established) to purchase shares of common stock at a discounted price at designated intervals through their accumulated payroll deductions or other permitted contributions.
Shares of our common stock will be offered for purchase under the Amended Purchase Plan through a series of offering periods. Unless otherwise specified by the ESPP Administrator prior to the start of the applicable offering period: (i) each offering period has a duration of 24 months, and (ii) offering periods commence on the first business day of May and the first business day of November each year, so that offerings run concurrently. Unless otherwise determined by the ESPP Administrator, the next offering period under the Purchase Plan is scheduled to commence on November 1, 2018.
The terms and conditions of each offering period may vary, and two or more offering periods may run concurrently under the Purchase Plan, each with its own terms and conditions. In addition, special offering periods may be established with respect to entities that are acquired by us or under such other circumstances as the ESPP Administrator deems appropriate. However, the participants in each separate offering period will have equal rights and privileges under that offering in accordance with the requirements of the federal tax laws and regulations applicable to employee stock purchase plans.
Unless otherwise specified by the ESPP Administrator prior to the start of the applicable offering period, each offering period will be comprised of four successive purchase intervals. Purchase intervals will run from the first business day in May to the last business day in October each year and from the first business day in November each year to the last business day in April in the following year, unless the ESPP Administrator specifies different purchase intervals prior to the start of the applicable offering period.
Should the fair market value per share of our common stock on any purchase date within an offering period be less than the fair market value per share of our common stock on the start date of that offering period, then the individuals participating in that offering period will, immediately after the purchase of our common stock on their behalf on such purchase date, be transferred from that offering period and automatically enrolled in the new offering period commencing on the next business day following such purchase date, provided the fair market value per share on the start date of that new offering period is lower than the fair market value per share of our common stock on the start date of the offering period in which they were currently enrolled.
Eligibility and Participation
Any individual who is employed on a basis under which he or she is regularly expected to work for more than twenty hours per week for more than five months per calendar year in the employ of any participating parent or subsidiary corporation (whether any such corporation is now in existence or is subsequently established at any time during the term of the Purchase Plan) will be eligible to participate in any offering period implemented under the Purchase Plan. However, for one or more distinct separate offering periods, the ESPP Administrator may waive either or both of the twenty hour or five month service requirements. To participate in a particular offering period, an eligible employee must complete and file the requisite enrollment forms on or before the start date of that offering period.
As of April 17, 2018, 192 employees, including five executive officers, were eligible to participate in the Purchase Plan.
Payroll Deductions and Stock Purchases
For each offering period, the ESPP Administrator may allow contributions to the Purchase Plan to be effected in the form of periodic payroll deductions or one or more other permissible forms specified by the ESPP Administrator prior to the start date of the applicable offering period. However, all contributions, whether in the form of payroll deductions or other mode, must be based solely on either the participant’s cash earnings or base salary, as determined by the ESPP Administrator prior to the start of the offering period and may not exceed 15% of base salary or cash earnings, unless the ESPP Administrator authorizes a different maximum percentage prior to the start date of the applicable offering period.
The accumulated contributions will automatically be applied to the acquisition of common stock atsix-month intervals. Accordingly, on each such purchase date (the last business day in April and October each year, unless the ESPP Administrator specifies other purchase date prior to the start of the applicable offering period), each participant’s payroll deductions or other permitted form of contribution accumulated for the purchase interval ending on that purchase date will automatically be applied to the purchase of whole shares of common stock at the purchase price in effect for the participant for that purchase date.
Purchase Price
The purchase price of the common stock acquired on each semi-annual purchase date will be fixed by the ESPP Administrator at the start of each offering period and will not be less than 85% of the lower of (i) the fair market value per share of our common stock on the start date of the offering period or (ii) the fair market value on the purchase date.
The fair market value per share of our common stock on any particular date under the Purchase Plan will be deemed to be equal to the closing price per share on such date on the national stock exchange serving as the primary market for our common stock at that time. On April 17, 2018, the fair market value of our common stock determined on such basis was $19.52 per share, the closing price per share on that date on the Nasdaq Global Market.
Special Limitations
The Purchase Plan imposes certain limitations upon a participant’s rights to acquire common stock, including the following limitations:
The ESPP Administrator will have the discretionary authority to increase or decrease the per participant and total participant purchase limitations as of the start date of any new offering period under the Purchase Plan, with the new limits to be in effect for that offering period and each subsequent offering period. As indicated above, the applicable limitations will be adjusted for any stock split, stock dividend, stock reclassification or similar transaction affecting the number of shares of our outstanding common stock without our receipt of consideration.
Termination of Purchase Rights
The participant may withdraw from the Purchase Plan at any time up to the next scheduled purchase date, and his or her accumulated payroll deductions or other permitted contributions for the purchase interval in which that purchase date occurs will, at the participant’s election, either be applied to the purchase of shares on the next scheduled purchase date or be refunded immediately.
The participant’s purchase right will immediately terminate upon his or her cessation of employment or loss of eligible employee status. Any payroll deductions or other permitted contributions which the participant may have made for the purchase interval in which such cessation of employment or loss of eligibility occurs will be refunded and will not be applied to the purchase of common stock.
Stockholder Rights
No participant will have any stockholder rights with respect to the shares covered by his or her purchase rights until the shares are actually purchased on the participant’s behalf and the participant has become a holder of record of the purchased shares. No adjustment will be made for dividends, distributions or other rights for which the record date is prior to the date of such purchase.
Assignability
No purchase rights will be assignable or transferable by the participant, and the purchase rights will be exercisable only by the participant.
Change in Control
Should we be acquired by merger, or should there occur a sale of substantially all of our assets or of securities possessing more than 50% of the total combined voting power of our outstanding securities, then all outstanding purchase rights will automatically be exercised immediately prior to the effective date of such transaction. The purchase price will not be less than 85% of the lower of (i) the fair market value per share of common stock on the start date of the offering period in which such transaction occurs or (ii) the fair market value per share of common stock immediately prior to such transaction. The actual percentage purchase price will be equal to the percentage purchase price previously set by the ESPP Administrator for the offering period in which the transaction occurs.
The limitation on the maximum number of shares purchasable by each participant (but not the limitation on all participants in the aggregate) on any one purchase date will be applicable to any purchase date attributable to such transaction.
SharePro-Ration
Should the total number of shares of common stock to be purchased pursuant to outstanding purchase rights on any particular date exceed the number of shares then available for issuance under the Purchase Plan, then the
ESPP Administrator will make apro-rata allocation of the available shares on a uniform and nondiscriminatory basis, and the payroll deductions or other permitted contributions of each participant, to the extent in excess of the aggregate purchase price payable for the common stockpro-rated to such individual, will be refunded.
Duration, Amendment and Termination
The Purchase Plan was originally adopted by our Board of Directors on March 31, 2010 and by our stockholders on June 2, 2010. The Purchase Plan will terminate upon the earliest to occur of (i) the last business day in April 2020, (ii) the date on which all shares available for issuance thereunder are sold pursuant to exercised purchase rights or (iii) the date on which all purchase rights are exercised in connection with a change in control or ownership.
The ESPP Administrator may alter or amend the Purchase Plan at any time to become effective as of the start date of the next offering period thereafter. In addition, the ESPP Administrator may suspend or terminate the Purchase Plan at any time to become effective immediately following the close of any purchase interval.
In no event may our Board of Directors effect any of the following amendments or revisions to the Purchase Plan without the approval of the stockholders: (i) increase the number of shares of our common stock issuable under the Purchase Plan, except for permissible adjustments in the event of certain changes in our capitalization or (ii) modify the eligibility requirements for participation in the Purchase Plan.
Purchase Plan Benefits
The following table sets forth, as to the individuals and groups indicated, the number of shares of our common stock purchased under the Purchase Plan from its original effective date through April 17, 2018 and the weighted average purchase price paid per share. As described above, only our employees are eligible to purchase shares of our common stock under the Purchase Plan.
Name and Position | Number of Shares Purchased (#) | Weighted Average Purchase Price ($) | ||||||
Alexander D. Macrae President and Chief Executive Officer | 0 | 0 | ||||||
Kathy Y. Yi, Senior Vice President and Chief Financial Officer | 0 | 0 | ||||||
H. Ward Wolff(1) Former Executive Vice President and Chief Financial Officer | 21,933 | $ | 3.92 | |||||
Edward R. Conner, M.D. Senior Vice President and Chief Medical Officer | 2,000 | $ | 4.12 | |||||
Curt A. Herberts, III Senior Vice President and Chief Business Officer |
| 24,522 |
| $ | 4.03 | |||
All current executive officers as a group (5 persons) | 48,455 | $ | 3.98 | |||||
All employees, including current officers who are not executive officers, as a group (173 persons)(2) | 1,215,871 | $ | 3.96 |
(1) Mr. Wolff retired from his position as Executive Vice President and Chief Financial Officer effective as of February 28, 2017.
(2) Reflects the number of our employees who have previously purchased shares under the Purchase Plan.
New Benefits
Participation in the Purchase Plan is voluntary and each eligible employee will make his or her own decision regarding whether and to what extent to participate in the Purchase Plan. It is, therefore, not possible to determine the benefits or amounts that will be received in the future by individual employees or groups of employees under the Purchase Plan.
Federal Income Tax Consequences
The following is a summary of the principal United States federal income taxation consequences to participants and us with respect to participation in the Purchase Plan. This summary is not intended to be exhaustive and does not discuss the income tax laws of any local, state or foreign jurisdiction in which a participant may reside. The information is based upon current federal income tax rules and therefore is subject to change when those rules change. The Purchase Plan is not qualified under the provisions of Section 401(a) of the Code and is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974, as amended.
The Purchase Plan is intended to be an “employee stock purchase plan” within the meaning of Section 423 of the Code. Under a plan which so qualifies, no taxable income will be recognized by a participant, and no deductions will be allowable to us, upon either the grant or the exercise of the purchase rights. Taxable income will not be recognized by the participant until there is a sale or other disposition of the shares acquired under the Purchase Plan or in the event the participant should die while still owning the purchased shares.
If the participant sells or otherwise disposes of the purchased shares within two years after the start date of the offering period in which such shares were acquired or within one year after the purchase date of those shares, then the participant will recognize ordinary income in the year of sale or disposition equal to the amount by which the fair market value of the shares on the purchase date exceeded the purchase price paid for those shares, and we will be entitled to an income tax deduction, for the taxable year in which such sale or disposition occurs, equal in amount to such excess.
If the participant sells or disposes of the purchased shares more than two years after the start date of the offering period in which the shares were acquired and more than one year after the purchase date of those shares, then the participant will recognize ordinary income in the year of sale or disposition equal to the lesser of (i) the amount by which the fair market value of the shares on the sale or disposition date exceeded the purchase price paid for those shares or (ii) 15% of the fair market value of the shares on the start date of that offering period, and any additional gain upon the disposition will be taxed as a long-term capital gain. We will not be entitled to an income tax deduction with respect to such sale or disposition.
If the participant still owns the purchased shares at the time of death, then the participant will recognize ordinary income at such time equal to the lesser of (i) the amount by which the fair market value of the shares on the date of death exceeds the purchase price or (ii) 15% of the fair market value of the shares on the start date of the offering period in which those shares were acquired.
Approval of this Proposal No. 4 requires votes “FOR” from holders of a majority of outstanding shares of common stock will be required to approve Proposal No. 4. Abstentions will have the stock having voting power present in person or represented by proxy at the Annual Meeting.
Recommendation of the Board of Directors
same effect as votes against Proposal No. 4.
2017 | 2016 | |||||||||||
Audit fees and expenses (1) | $ | 1,415,280 | $ | 1,194,558 | ||||||||
Audit - related fees | - | - | ||||||||||
Tax fees (2) | 43,350 | 43,775 | ||||||||||
All other fees | - | - | ||||||||||
|
|
|
| |||||||||
Total | $ | 1,458,630 | $ | 1,238,333 | ||||||||
|
|
|
|
Year Ended December 31, | ||||||||
2019 | 2018 | |||||||
Audit fees and expenses(1) | $ | 1,520,256 | $ | 2,205,461 | ||||
Audit - related fees | — | — | ||||||
Tax fees(2) | 26,780 | 46,350 | ||||||
All other fees | — | — | ||||||
Total | $ | 1,547,036 | $ | 2,251,811 |
(1) | Includes fees and expenses for the audit of our annual financial statements included in our annual reports on |
(2) | Consists of fees billed for professional services for tax compliance, tax advice and tax planning. |
service engagements on behalf of the full committee in the event a need arises for specificpre-approval between committee meetings. If the Chairman approves any such engagements, he will report such approval to the full Audit Committee not later than the next committee meeting.
Recommendation of the Board of Directors
Meeting and entitled to vote on this Proposal No. 5.
OTHER MATTERS
The Board knows of no other matters that will be presented for consideration at the annual meeting. If any other matters properly come before the annual meeting, it is the intention of the persons named in the accompanying proxy to vote the shares they represent in accordance with their best judgment. Discretionary authority with respect to such other matters is granted by the execution of your proxy card.
EXECUTIVE OFFICERS
Name | Age | Position | |||
Alexander D. Macrae, M.B., Ch.B., Ph.D. | President, Chief Executive Officer and Director | ||||
|
| ||||
| |||||
Adrian Woolfson, B.M., B.Ch., Ph.D. | 55 | Executive Vice President, Research and Development | |||
Gary H. Loeb | 50 | Executive Vice President, General Counsel and Secretary | |||
| |||||
|
Kathy Y. Yi
Heather D. Turner, J.D., has served as our Senior Vice President and General Counsel since February 2018, and as our Secretary since March 2018. Ms. Turner has over 18 years of experience advising public and private life science companies on various matters, including corporate governance, compliance, reporting, public reporting, public offering, mergers and acquisitions, and commercial, manufacturing and development contracts. Prior to joining us, from 2015 to February 2018, Ms. Turner was at Atara Biotherapeutics, Inc. where she served as executive vice president, general counsel and secretary, and also, most recently, as head of portfolio strategy. From 2007 to 2015, she served as General Counsel and Secretary at Orexigen Therapeutics, Inc., where she led various general and administrative functions including compliance, risk management, legal, human resources and facilities. Earlierhis Ph.D. in her career, she worked as an associate in the corporate securities group at Cooley LLP. Ms. Turner holds a J.D.Chemical Engineering from the University of California, Los Angeles School of Law and is a member of the State Bar of California.
Edward R. Conner, M.D.has served as our Senior Vice President and Chief Medical Officer since November 2016. He has over 10 years of industry experience in early and late stage clinical development in a broad range of disease areas including rare diseases, oncology and infectious diseases. Prior to joining us, Dr. Conner served as Vice President, Clinical Sciences at Ultragenyx Pharmaceuticals, a biopharmaceutical company developing novel products for the treatment of rare and ultra-rare diseases since January 2015. Prior to joining Ultragenyx, from October 2013 to November 2014, he served as Senior Medical Director at BioMarin Pharmaceutical Inc., where he led protocol development and regulatory interaction for its global phase 3 program in Pompe disease. From 2008 to 2013, Dr. Conner served as Medical Director at Genentech, Inc. and was the clinical science team leader of several product candidates, one of which is now a commercial drug product. Dr. Conner completed his Internal Medicine residency training at the University of Michigan and was a fellow in Clinical Immunology & Allergic Diseases at Johns Hopkins School of Medicine. He received a B.S. in Biology, cum laude, from Duke University and his M.D. from the University of California, San Francisco.
Curt A. Herberts, IIIhas served as our Senior Vice President and Chief Business Officer since December 2016 and oversees our business functions and plans for commercialization of its therapeutics. Mr. Herberts has over 10 years of experience in commercial strategy and corporate development. He joined us in October 2010 as Director, Corporate Development and Strategy and was promoted to Senior Director in January 2012, and Vice President and Head of Corporate Development in July 2015. During this time, we established a number of collaborative agreements, including global collaborations with Shire plc, in 2012, Biogen, Inc., in 2014, Pfizer Inc., in 2017 and Kite, a Gilead company in 2018. Prior to joining us, Mr. Herberts held several positions of increasing responsibility at Campbell Alliance Group, Inc., including leadership roles in the corporate development and commercial strategy practice areas, from June 2006 to October 2010. Mr. Herberts holds an A.B. in Human Biology from Stanford University and a M.B.S. from Keck Graduate Institute of Applied Life Sciences.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Name and Address of Beneficial Owner | Number of Shares Beneficially Owned | Percentage of Shares Beneficially Owned | ||||||
BlackRock, Inc. (1) | ||||||||
55 East 52nd Street New York, NY 10055 | 6,871,509 | 7.9% | ||||||
FMR LLC (2) 245 Summer Street Boston, MA 02210 | 5,355,450 | 6.1% | ||||||
Vanguard Group Inc. (3) 100 Vanguard Blvd. Malvern, PA 19355 | 4,479,969 | 5.1% | ||||||
Alexander D. Macrae (4) | 470,000 | * | ||||||
Robert F. Carey (5) | 40,000 | * | ||||||
Edward R. Conner, M.D. (6) | 52,000 | * | ||||||
Stephen G. Dilly, M.B.B.S., Ph.D. (7) | 120,000 | * | ||||||
Curt A. Herberts III (8) | 7,958 | * | ||||||
Roger Jeffs (9) | 30,000 | * | ||||||
Steven J. Mento, Ph.D. (10) | 84,046 | * | ||||||
H. Stewart Parker (11) | 81,000 | * | ||||||
Saira Ramasastry (12) | 50,000 | * | ||||||
Heather D. Turner | - | - | ||||||
H. Ward Wolff (13) | 262,234 | * | ||||||
Kathy Y. Yi (14) | 52,500 | * | ||||||
Joseph S. Zakrzewski (15) | 30,000 | * | ||||||
All current directors and executive officers as a group (12 persons) (16) | 1,017,504 | 1.2% |
Name and Address of Beneficial Owner | Number of Shares Beneficially Owned | Percentage of Shares Beneficially Owned | |||||
BlackRock, Inc. (1) | |||||||
55 East 52nd Street New York, NY 10055 | 9,534,271 | 8.2 | % | ||||
Vanguard Group Inc. (2) 100 Vanguard Blvd. Malvern, PA 19355 | 8,488,504 | 7.3 | % | ||||
Wellington Management Group LLP (3) 280 Congress Blvd. Boston, MA 02110 | 7,840,682 | 6.7 | % | ||||
Wasatch Advisors, Inc. (4) 505 Wakara Way Salt Lake City, UT 84108 | 7,487,017 | 6.4 | % | ||||
Alexander D. Macrae (5) | 1,221,476 | 1.0 | % | ||||
Stéphane Boissel (6) | 134,487 | * | |||||
Robert F. Carey (7) | 75,000 | * | |||||
Stephen G. Dilly, M.B.B.S., Ph.D. (8) | 105,000 | * | |||||
Sung H. Lee | — | * | |||||
Gary H. Loeb | — | * | |||||
John H. Markels (9) | 30,000 | * | |||||
James R. Meyers (10) | 30,000 | * | |||||
H. Stewart Parker (11) | 123,000 | * | |||||
R. Andrew Ramelmeier (12) | 97,670 | * | |||||
Saira Ramasastry (13) | 85,000 | * | |||||
Karen L. Smith (14) | 49,167 | * | |||||
Adrian Woolfson (15) | 96,596 | * | |||||
Kathy Y. Yi (16) | 1,429 | * | |||||
Joseph S. Zakrzewski (17) | 90,000 | * | |||||
All current directors and executive officers as a group (14 persons) (18) | 2,137,396 | 1.8 | % |
* | Less than one percent. |
(1) | This information is based solely on information contained in the Schedule 13G/A filed with the SEC on |
The Schedule 13G/A provides information only as of December 31, |
(2) | This information is based solely on information contained in the Schedule |
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(3) | This information is based solely on information contained in the Schedule 13G filed with the SEC on January 28, 2020 by Wellington Management Group LLP, or Wellington. Wellington may be deemed to beneficially own the indicated shares and has shared dispositive power over 7,840,682 shares and shared voting power over 7,550,747 shares. The shares are |
(4) | This information is based solely on information contained in the Schedule 13G filed with the SEC on February 10, 2020 by Wasatch Advisors, Inc. The Schedule 13G provides information only as of December 31, 2019 and, consequently, the beneficial ownership of the above-mentioned entities may have changed between December 31, 2019 and March 20, 2020. |
(5) | Includes |
(6) | Includes 131,038 shares of common stock |
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(7) | Includes (i) 70,000 shares of |
(8) | Includes |
(9) | Consists of |
(10) | Consists of 30,000 shares of common stock issuable upon the exercise of stock options within 60 days of March 20, 2020, of which 4,166 shares fully vest within 60 days of March 20, 2020, and the remaining 25,834 shares are currently exercisable but do not vest within 60 days of March 20, 2020 and would be subject to repurchase upon cessation of service to the Board if exercised prior to vesting. |
(11) | Includes |
(12) | Includes 91,875 shares of common stock issuable upon the exercise of stock options within 60 days of March 20, 2020. |
(13) | Includes (i) 80,000 shares of common stock issuable upon the exercise of stock options within 60 days of March 20, 2020, of which 78,750 shares fully vest within 60 days of March 20, 2020, and the remaining 1,250 shares are currently exercisable but do not vest within 60 days of March 20, 2020 and would be subject to repurchase upon cessation of service to the Board if exercised prior to vesting and (ii) 2,500 RSUs covering shares of common stock that vest and become issuable within 60 days of March 20, 2020. |
(14) | Consists of (i) 45,000 shares of common stock issuable upon the exercise of stock options within 60 days of March 20, 2020, of which 32,083 shares fully vest within 60 days of March 20, 2020, and the remaining 12,917 shares are currently exercisable but do not vest within 60 days of March 20, 2020 and would be subject to repurchase upon cessation of service to the Board if exercised prior to vesting and (ii) RSUs covering 2,500 shares of common stock that vest and become issuable within 60 days of March 20, 2020. |
(15) | Includes (i) 72,916 shares of common stock subject to options exercisable within 60 days after |
(16) | Ms. Yi resigned from her position as Executive Vice President and |
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(17) | Includes (i) 60,000 shares of |
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(18) | The percentages are calculated based on |
DELINQUENT SECTION 16(a) REPORTS
COMPENSATION DISCUSSION AND ANALYSIS
”
Alexander D. Macrae | President and Chief Executive Officer | |
Sung H. Lee | Executive Vice President and Chief Financial Officer | |
Stéphane Boissel | Executive Vice President, Corporate Strategy and former Interim Chief Financial Officer | |
Adrian Woolfson | Executive Vice President, Research and Development | |
Gary H. Loeb | Executive Vice President, General Counsel and Secretary | |
R. Andrew Ramelmeier | Executive Vice President, Technical Operations | |
Kathy Y. Yi | Former Executive Vice President and Chief Financial Officer |
platform.
We are focused on the development of human therapeutics for diverse diseases with well-characterized genetic causes. We have several proprietary clinical and preclinicalproducts as appropriate. Decisions to partner product candidates in development and have strategically partnered certain programs with biopharmaceutical companies to obtain funding forwill be based on review of our own programs and to expedite clinicalinternal resources, internal know-how, and commercial development.
2017considerations.
During 2017,2019 Highlights
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In January 2017, the FDA allowed our Investigational New Drug, or IND, application forSB-525, which we earned a cDNA$25.0 million milestone payment under the terms of our
Fabry disease. In May 2017,2019, the IND was accepted by the FDA and a CTA was granted in the United Kingdom. The FDA also granted Orphan Drug Designation to ST-920 for the treatment of Fabry disease.
In June 2017, we completed an underwritten public offering of our common stock, in which 11.5 million shares of our common stock were sold at a public offering price of $7.25 per share. Net proceeds after deducting underwriting discounts and commissions and other estimated offering expenses, were appropriately $78.1 million.
In October 2017, the FDA accepted an IND application forST-400, a gene-edited cell therapy candidate for people with transfusion-dependent beta-thalassemia. We are developingST-400 as part of an exclusive worldwide collaboration with Bioverativ Inc.
In November 2017, we treated the first patient in the Phase 1/2 clinical trial evaluatingSB-913.
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In February 2018, together with Case Western Reserve University, we announced an $11 million grant from the National Institutes of Health for a planned study of gene-edited T cells designed to eradicate persistent HIV infection in patients receiving anti-retroviral therapy.
In February 2018, we entered into a global collaboration and license agreement with Kite Pharma, Inc., a wholly-owned subsidiary of Gilead Sciences, Inc.,Biogen for the research, development and commercialization of potential engineered cellgene regulation therapies for cancer.
risk, particularly in the early stages of clinical development.risk. As a consequence, the Compensation Committee believes our compensation program must balance long-term incentives that rewardsreward for the realization of our long-term strategic objectives with near-term compensation that rewards for the achievement of annual goals that further the attainment of our long-term objectives and align the interests of our executives with those of our stockholders.clinical stageclinical-stage biotechnology company that is not yet profitable. Instead, the Compensation Committee sets annual performance objectives on which it believes our executive officers2017,2019, aggressivepre-established clinical, research and development,R&D, business and corporate development objectives.
The Compensation Committee strives to create a positive relationship between its compensation program and our corporate performance and considers competitive market dynamics, the business environment in which the results were achieved and any unplanned positive or negative events when making compensation decisions. A significant portion of the total compensation opportunity for each of our named executive officers is directly related to our stock price and to other performance factors that measure our progress against our strategic objectives.
What We Do | What We Don’t Do | |
ü ü Cap the cash incentive compensation plan payouts | X Provide taxgross-ups X Allow repricing of stock options without stockholder approval X Offer significant perquisites or personal benefits to our named executive officers X Allow hedging or pledging of our securities by employees X Offer a defined benefit pension plan, deferred compensation plan or supplemental executive retirement plan |
In making executive compensation determinations, the Compensation Committee considers recommendations from Dr. Macrae. In making his recommendations, Dr. Macrae receives input from our human resources department and from the individuals who manage the other executive officers. While Dr. Macrae discusses his recommendations for the other executive officers with the Compensation Committee, he does not participate in the deliberations or determination of his own compensation. Members of our finance, human resources and legal departments alsomay attend Compensation Committee meetings.
meetings from time to time.
Acceleron Pharma | Fate Therapeutics | |
Aimmune Therapeutics | Global Blood Therapeutics | |
Arena Pharmaceuticals | ImmunoGen | |
Arrowhead Pharmaceuticals | Intellia Therapeutics | |
Atara Biotherapeutics | Iovance Biotherapeutics | |
Audentes Therapeutics | ||
bluebird bio | ||
ChemoCentryx | ||
CRISPR Therapeutics | Revance Therapeutics | |
Cytokinetics | ||
Dynavax Technologies | ||
Editas Medicine | ||
Use of Comparative Data
2017
Component | Key Features | Purpose | ||
Base Salary | •Fixed cash compensation •Annual increases are not guaranteed •Amounts are reviewed and determined annually (or at the time of a change in the executive’s title or position during the year) •Amounts determined based on individual performance, experience, skills and the importance of the executive’s position | •Enables us to attract and retain skilled and experienced executives and to provide a level of economic security for executives from year to year | ||
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Cash Incentive | •Cash compensation under the Sangamo Therapeutics, Inc. Amended and Restated Incentive Compensation Plan, or the Incentive Plan, which is dependent upon achievement of performance objectives | • | ||
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Component | Key Features | Purpose | ||
Equity Compensation | •Generally in the form of stock options and/or | • | ||
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| •Provides long-term incentives that align the interests of our work force with the achievement of our long-term vision to develop and commercialize pharmaceutical products which occurs over time •Given the time periods involved in pharmaceutical development, we believe that long-term incentives are critical to our success to provide long-term focus, aid in retention and mitigate short-term risk taking to realize gains in the near term that creates risk in the long-term •We believe that a mix of stock options and RSUs reinforces the long-term nature of our business and alignment with our stockholders by rewarding for improvements in stock price over a period of time. The Company issues stock options to reward for future performance and appreciation while providing RSUs to manage the natural market volatilities for a development stage company, provide retention incentives during the vesting period and to reinforce a culture of ownership. •By granting RSUs the Company can also reduce the dilutive effect of the equity incentive awards |
2017
2017
Name | 2019 Base Salary ($) | 2018 Base Salary ($) | Percent Increase | |||||
Alexander D. Macrae | 661,939 | 636,480 | 4% | |||||
Sung H. Lee (1) | 435,000 | — | N/A | |||||
Stéphane Boissel | 483,600 | 480,000 | 1% | |||||
Adrian Woolfson (2) | 475,000 | — | N/A | |||||
Gary H. Loeb (3) | 400,000 | — | N/A | |||||
R. Andrew Ramelmeier (4) | 400,000 | — | N/A | |||||
Kathy Y. Yi (5) | 421,026 | 404,833 | 4% |
(1) | Mr. Lee commenced employment with the Company on October 31, 2019. |
(2) | Dr. Woolfson commenced employment with the Company on January 21, 2019. |
(3) | Mr. Loeb commenced employment with the Company on July 30, 2019. |
(4) | Effective as of September 16, 2019, Dr. Ramelmeier’s 2019 base salary increased from $375,950 to $400,000 in connection with his promotion to Executive Vice President, Technical Operations. Dr. Ramelmeier commenced employment with the Company on January 1, 2018 and became an executive officer when he was promoted to Executive Vice President, Technical Operations, in September 2019. |
(5) | Ms. Yi resigned from the Company effective June 7, 2019. |
Name | 2017 Base Salary | 2016 Base Salary | Percent Increase | |||
Alexander D. Macrae | $612,000 | $600,000 | 2% | |||
Kathy Y. Yi (1) | $350,000 | — | N/A | |||
H. Ward Wolff (2) | $422,500 | $422,500 | 0% | |||
Edward R. Conner, M.D. (3) | $400,000 | $400,000 | 0% | |||
Curt A. Herberts, III (4) | $343,400 | $340,000 | 1% |
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20172019 Cash Incentive Compensation
We
The clinical, research and development, business and corporate development objectives and weightings under the 2017 Cash Incentive Program adopted in March 2017 are described in the chart below. The 2017 Cash Incentive Program also included a business development transaction objective that provided the opportunity to earn an additional payout in the event of certain business development transactions, as further described below.
Objective | Weighting | Achievements | Achievement Percentage |
Support financial position consistent with corporate strategy | 15% | Ended 2019 with $385.0 million of cash, cash equivalents, marketable securities and interest receivable Monitored and maintained operational expenses Earned revenues of $102.4 million in 2019, which included a $25.0 million milestone achievement upon completion of the transfer of the IND for SB-525 to Pfizer, $7.5 million pertaining to a milestone achievement with Sanofi upon dosing of the first subject in the Phase 1/2 PRECIZN-1 trial evaluating BIVV003, and a $6.0 million milestone achievement with Sanofi upon dosing of the third subject in the Phase 1/2 THALES study evaluating ST-400 | 15% |
Achieve operational efficiency to support our programs and ensure sufficient resources to prepare for pivotal trials | 10% | In-licensed specific technologies designed to improve process development, optimize assays, enhance our intellectual property position, and maintain competitiveness Built infrastructure to support deliverables in key therapeutic areas Attracted talented staff across the company in line with values and culture Executed on strategic enhancements in the areas of lead development process (i.e., speed and throughput) | 10% |
Advance lead assets and pipeline development programs for IMD and hematology | 15% | SB-913 MPS II Phase 1/2 data presented at major conference, Last-Patient-In Phase 1/2 adult expansion SB-318 MPS I Phase 1/2 data presented at major conference Preparations completed for first patient enrollment in Phase 1/2 STAAR study evaluating ST-920 for Fabry disease (with first patient enrollment expected in 2020) | 10% |
Advance cell therapy pipeline | 15% | Completed integration of Sangamo France (formerly TxCell S.A.) Received CTA in the United Kingdom for the Phase 1/2 STEADFAST clinical study evaluating TX200, which we expect to initiate in 2020 Identified two new early-stage targets in autoimmune disease Delivered proof of concept on at least two gene editing concepts in regulatory T-cells | 10% |
Advance partnered programs in line with contractual terms | 15% | Completed patient enrollment in the Phase 1/2 Alta study evaluating SB-525 with Pfizer (Phase 1/2 expansion) Completed the transfer to Pfizer of the SB-525 IND, triggering a $25 million milestone payment from Pfizer Advanced patient enrollment in the Phase 1/2 THALES study evaluating ST-400; dosed third patient in the THALES study, triggering a $6.0 million milestone from Sanofi and also received $2.1 million from the California Institute for Regenerative Medicine Completed company deliverables to support Chemistry, Manufacturing and Controls (CMC) activities for BIVV003 at Sanofi Dosed first patient in the Phase 1/2 PRECIZN-1 study evaluating BIVV003, triggering a $7.5 million milestone from Sanofi | 25% (achievement percentage increased due to progress in Biogen collaboration and other partnership accomplish-ments and development) |
Objective | Weighting | Achievements | Achievement Percentage |
Build an early, sustainable pipeline for the CNS therapeutic area | 10% | Progressed specific CNS target to pre-IND stage Identified and researched proprietary novel CNS delivery vector Initiated work on at least two new CNS indications and investigated proof of mechanism | 20% (achievement percentage increased due to success in building proprietary pipeline in addition to significant CNS collaboration) |
Remain at the leading edge of gene editing and delivery technologies and explore innovative approaches in genomic medicine | 10% | Obtained improved development outcomes for precision and efficiency of delivery and gene modification/regulation Maintained scientific leadership by meeting high-impact publication targets and speaking at key conferences | 10% |
Build Sangamo culture and support employees based on our core values | 10% | Maintained regular employee opportunities to engage with each other and potential patients Measured semi-annual cultural health check survey of all employees | 10% |
The Compensation Committee and Board of Directors assessed the degree to which the 2017 Cash Incentive Program were met based on the factors described below and determined the achievement percentages described below in January 2018.
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As described above, Dr. Macrae does not have individual goals separate from our corporate objectives. For our other named executive officers, the total cash incentive compensation payout for 20172019 was based on a weighting of 80%90% corporate and 20%10% individual goals. Dr. Macrae recommends individual goals for each other named executive officer, which are aligned with our business strategy and linked with corporate goals, and our Compensation Committee approves these goals. The 20172019 individual goals for the named executive officers include those listed below. These specific goals were in addition to the general responsibilities each officer had for managing his or her respective functional operational area. In early 2018, basedBased on the recommendation of Dr. Macrae, as well as the observations by Compensation Committee members of these executive officers and its own assessment of each individual’s effectiveness, the Compensation Committee determined the level of achievement of each named executive officer’s individual performance goals as follows:
Ms. Yi –Mr. Lee — The Compensation Committee determined that with respectMr. Lee achieved 100% of his individual objectives. Mr. Lee’s key accomplishments in 2019 included: providing leadership to the objectivesCompany’s finance, facilities, and information technology teams during the fourth quarter of keeping compliant2019; leading the process for establishing the Company’s budget for 2020, from departmental operations through the Board of Directors’ approval; and managing all internal and external financial requirements through effective controls and
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Dr. Conner – TheMr. Boissel —The Compensation Committee determined that with respect to the objectives of supporting the development organization, ensuring data quality and Good Clinical Practices, or GCP, compliant study conduct and data collection, establishing a bioethics review board, raising the visibility of clinical development within our company and supporting the career development of members of his team, heMr. Boissel achieved nearly all110% of his individual objectives by establishingobjectives. Mr. Boissel’s key accomplishments in 2019 included: providing effective leadership to the Company’s finance, facilities, legal, and information technology teams during the transition of a clinical group that is on trackboth a new Chief Financial Officer and a new General Counsel; providing strong leadership to meet its milestonesteam and objectives, establishing CDPs, performing clinical assessments forpartners in deal processes, including the Company’s collaboration with Biogen; and effectively managing ambiguity and opportunity to build a pipeline projects, leading clinical contributions to Investigational New Drug Applications, establishing a bioethics review board, progressing with compassionate review policy, raising the visibility and successes of his department and supporting the development and management of his team.new collaborations.
Mr. Herberts – The Compensation Committee determined that with respect to the objectives related to our strategic objectives, corporate development, commercial infrastructure, leading and mentoring his team and other internal departments and engaging with the Board of Directors, he exceeded expectations by supporting transformative transactions, increasing the number and quality of partnership discussions, developing a thoughtful corporate strategy, improving our commercial modeling and forecasts, leading his department and supporting the development and management of other departments.Loeb — The Compensation Committee determined that Mr. HerbertsLoeb achieved 120%100% of his individual objectives.
Name | Target Award | Actual Award | % of Target | |||||||||
Alexander D. Macrae | $367,200 | $381,888 | 104.0% | |||||||||
Kathy Y. Yi (1) | $112,292 | $120,377 | 107.2% | |||||||||
H. Ward Wolff (2) | $— | $— | — | |||||||||
Edward R. Conner, M.D. | $140,000 | $140,280 | 100.2% | |||||||||
Curt A. Herberts, III | $120,190 | $128,844 | 107.2% |
Name | Target Amount ($) | Actual Amount ($) | % of Target | |||||
Alexander D. Macrae | 397,163 | 436,880 | 110% | |||||
Sung H. Lee (1) | 43,500 | 47,415 | 109% | |||||
Stéphane Boissel | 193,440 | 212,784 | 110% | |||||
Adrian Woolfson (2) | 190,000 | 207,100 | 109% | |||||
Gary H. Loeb (3) | 80,000 | 87,200 | 109% | |||||
R. Andrew Ramelmeier (4) | 139,644 | 153,608 | 110% | |||||
Kathy Y. Yi (5) | 168,410 | — | —% |
(1) |
(2) |
2017(3) Mr. Loeb’s target and actual cash incentive compensation amounts were prorated to reflect that he commenced employment with us in July 2019. (4) Dr. Ramelmeier’s target and actual cash incentive compensation amounts were prorated to reflect that (i) his 2019 base salary was $375,950 from January 1, 2019 through September 15, 2019 and (ii) his 2019 base salary was $400,000 from September 16, 2019 through December 31, 2019. (5) Ms. Yi resigned from the Company in June 2019. We have historically made annual equity grants in December of each fiscal year. However, the Compensation Committee in 2016 determined that it would be a better business and governanceMr. HerbertsMs. Yi in January 2017. The Compensation Committee determined not to grant Dr. Conner an equity award in January 2017 because Dr. Conner was granted a stock option in November 2016 in connection with the commencement of his employment with us. To emphasizepay-for-performance, the Compensation Committee determined that the entire annual equity grant would be made in the form of stock options, which provide a return to our executive officers only if the market price of our common stock appreciates over the stock option term, and that RSUs would not be used for 2017 annual grants.February 2019.
The Compensation Committee considered data related tothe approach used when determining the form and size of prior grants, the size of 2018 equity grants, the percent of common stock outstanding as well as grant date value, to determine the overall range for setting the pool of shares available for grants to executive officers and other employees in 20172019 and the size of each executive’s grant. In 2017, the percent of common stock outstanding carried more weight due to the depressed stock price in light of the objective of managing overall dilution for stockholders. In general, the equity compensation of our named executive officers for 20172019 fell within the competitive range of the 50th50th to 75th75th percentiles based on the market data provided by Radford.
grant date.
In connection with his retirement, Mr. Wolff entered into an amendment to his employment agreement with us, pursuant to which we agreed, in recognition of Mr. Wolff’s contributions to us, to reimburse Mr. Wolff for 12 months of COBRA expenses and to extend the post-termination exercise periods of Mr. Wolff’s outstanding stock options (to the extent vested on his termination date), such that each such stock option shall remain exercisable for a period of two years following Mr. Wolff’s termination of employment, or until the end of the term of the option, if earlier. A summary of Mr. Wolff’s severance payments and benefits may be found in the section of the Proxy Statement entitled “—Employment Contracts and Change in Control Arrangements—Senior Vice President Employment Agreements—Mr. Wolff.”
enactment of the Tax Cuts and Jobs Act, Section 162(m) provided a performance-based compensation exception, pursuant to which the deduction limit under Section 162(m) did not apply to any compensation that qualified as “performance-based compensation” under Section 162(m) of the Code was not subject to this deduction limitation.. Pursuant to the Tax Cuts and Jobs Act, thisthe performance-based compensation exception for “performance-based compensation” under Section 162(m) of the Code was repealed with respect to taxable years beginning after December 31, 2017, except that certain transition relief is provided by the Tax Cuts and Jobs Act for remuneration providedcompensation paid pursuant to a written binding contract which was in effect on November 2, 2017 and which wasis not modified in any material respect on or after such date. As a result, compensation
Company’s business needs.
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Option Awards ($) (2) | Non- Equity Incentive Plan Compensation ($) (3) | All Other Compensation ($) (4) | Total ($) | ||||||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (i) | (j) | ||||||||||||||||||||||||||||||||||||
Alexander D. Macrae, | 2017 | 612,000 | - | - | 795,564 | 381,888 | 6,404 | 1,795,856 | ||||||||||||||||||||||||||||||||||||
President and Chief Executive Officer (5) | 2016 | 350,000 | 347,000 | (6) | - | 2,883,090 | - | - | 3,580,090 | |||||||||||||||||||||||||||||||||||
Kathy Y. Yi, Senior Vice President and Chief Financial Officer (7) | 2017 | 294,358 | - | - | 574,560 | 120,377 | 4,710 | 994,005 | ||||||||||||||||||||||||||||||||||||
H. Ward Wolff, | 2017 | 107,643 | - | - | 836,137 | (9) | - | 30,541 | (10) | 974,321 | ||||||||||||||||||||||||||||||||||
Former Executive Vice President and Chief Financial | 2016 | 422,500 | 118,300 | - | - | - | - | 540,800 | ||||||||||||||||||||||||||||||||||||
Officer (8) | 2015 | 415,000 | - | 352,875 | 407,100 | 141,100 | - | 1,316,075 | ||||||||||||||||||||||||||||||||||||
Edward R Conner, M,D., | 2017 | 400,000 | - | - | - | 140,280 | 840 | 541,120 | ||||||||||||||||||||||||||||||||||||
Senior Vice President and Chief Medical Officer (11) | 2016 | 34,848 | 100,000 | (12) | - | 377,820 | - | - | 512,668 | |||||||||||||||||||||||||||||||||||
Curt A. Herberts III, | 2017 | 343,400 | - | - | 165,743 | 128,844 | 4,524 | 642,511 | ||||||||||||||||||||||||||||||||||||
Senior Vice President and Chief Business Officer (13) | 2016 | 289,375 | 72,886 | - | - | - | - | 362,261 |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Option Awards ($) (2) | Non- Equity Incentive Plan Compensation ($) (3) | All Other Compensation ($) (4) | Total ($) | ||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (i) | (j) | ||||||||||||||||||
Alexander D. Macrae | 2019 | 661,939 | — | 571,148 | 2,274,230 | 436,880 | 42,358 | 3,986,555 | ||||||||||||||||||
President and | 2018 | 636,480 | — | 631,575 | 2,410,657 | 420,077 | 5,639 | 4,104,428 | ||||||||||||||||||
Chief Executive Officer | 2017 | 612,000 | — | — | 795,564 | 381,888 | 6,404 | 1,795,856 | ||||||||||||||||||
Sung H. Lee | 2019 | 72,500 | 200,000 | (6 | ) | 452,813 | 1,757,679 | 47,415 | 273 | 2,530,680 | ||||||||||||||||
Executive Vice President | ||||||||||||||||||||||||||
and Chief Financial Officer (5) | ||||||||||||||||||||||||||
Stéphane Boissel | 2019 | 483,600 | — | 158,025 | 629,234 | 212,784 | 1,639 | 1,485,282 | ||||||||||||||||||
Executive Vice President, | 2018 | 120,390 | 100,000 | (9 | ) | — | 2,052,792 | — | 316,884 | 2,590,066 | ||||||||||||||||
Corporate Strategy and former | ||||||||||||||||||||||||||
Interim Chief Financial Officer (7) (8) | ||||||||||||||||||||||||||
Adrian Woolfson | 2019 | 449,732 | 150,000 | (11 | ) | — | 1,498,175 | 207,100 | 5,503 | 2,310,510 | ||||||||||||||||
Executive Vice President, | ||||||||||||||||||||||||||
Research and Development (10) | ||||||||||||||||||||||||||
Gary H. Loeb | 2019 | 166,667 | — | — | 1,788,475 | 87,200 | 683 | 2,043,025 | ||||||||||||||||||
Executive Vice President, | ||||||||||||||||||||||||||
General Counsel and Secretary (12) | ||||||||||||||||||||||||||
R. Andrew Ramelmeier | 2019 | 382,965 | — | 112,875 | 449,453 | 153,608 | 5,639 | 1,104,540 | ||||||||||||||||||
Executive Vice President, | ||||||||||||||||||||||||||
Technical Operations (13) | ||||||||||||||||||||||||||
Kathy Y. Yi | 2019 | 175,428 | — | 173,828 | 692,157 | — | 28,174 | 1,069,587 | ||||||||||||||||||
Former Executive Vice President | 2018 | 404,833 | — | 145,363 | 554,884 | 155,861 | 5,639 | 1,266,580 | ||||||||||||||||||
and Chief Financial Officer (14) | 2017 | 294,358 | — | — | 574,560 | 120,377 | 4,710 | 994,005 |
(1) | The amounts in column (e) reflect the aggregate grant date fair value of the RSUs awarded to the named executive officer for the applicable year, calculated in accordance with ASC 718, without taking into account any estimated forfeitures. The grant date fair value of the RSUs is measured based on the closing price of the underlying common stock on the date of grant. |
(2) |
(3) | The amounts in column (g) reflect the cash bonus awards made to the named executive officer under the cash incentive program under the Incentive Plan for the indicated year. |
(4) | The amounts in column for 2019 (i) include matching payments made to the named executive officer under our 401(k) Plan, a qualified deferred compensation plan under |
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(8) | In 2018, certain amounts paid to Mr. |
(9) |
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Consists of asign-on bonus that was subject to repayment in the event |
(10) | Dr. Woolfson was appointed our Executive Vice President, Research and Development effective January 21, 2019. |
(11) | Consists of a sign-on bonus that was subject to repayment in the event Dr. Woolfson’s employment was terminated for cause or by him without good reason within one year of his appointment. |
(12) | Mr. Loeb was appointed our Executive Vice President and General Counsel effective July 30, 2019 and our Secretary effective September 16, 2019. |
(13) |
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(14) | Ms. Yi was appointed our Senior Vice President and Chief |
Grants of Plan-Based Awards
Estimated Possible Payouts Under Non-Equity | All Other Option Awards: Number of Securities Under- | Exercise or Base Price of | Grant Date Fair Value | |||||||||||||||||||||||||||||||
Incentive Plan Awards | lying | Option or | of Stock and | |||||||||||||||||||||||||||||||
Name | Award Type | Grant Date or Modification Date | Approval Date | Threshold ($) (1) | Target ($) (1) | Maximum ($) (1) | Options (#) (2) | Stock Awards ($/Sh) | Option Awards ($) (3) | |||||||||||||||||||||||||
(a) |
| (b) |
| (c) | (d) | (e) | (j) | (k) | (l) | |||||||||||||||||||||||||
Alexander D. Macrae | Annual Cash | 257,040 | 367,200 | 734,400 | - | - | - | |||||||||||||||||||||||||||
Annual Option | 1/26/2017 | 1/26/2017 | - | - | - | 360,000 | 3.50 | 795,564 | ||||||||||||||||||||||||||
Kathy Y. Yi | Annual Cash | 62,883 | 112,292 | 207,740 | - | - | ||||||||||||||||||||||||||||
New Hire Option | 2/28/2017 | 2/24/2017 | 200,000 | 4.55 | 574,560 | |||||||||||||||||||||||||||||
H. Ward Wolff | Modified Option(4) | 2/27/2017 | 2/24/2017 | - | - | - | 280,000 | 14.27 | 151,200 | |||||||||||||||||||||||||
Modified Option(4) | 2/27/2017 | 2/24/2017 | - | - | - | 112,000 | 3.45 | 104,160 | ||||||||||||||||||||||||||
Modified Option(4) | 2/27/2017 | 2/24/2017 | - | - | - | 200,000 | 5.35 | 230,000 | ||||||||||||||||||||||||||
Modified Option(4) | 2/27/2017 | 2/24/2017 | - | - | - | 150,000 | 5.70 | 171,000 | ||||||||||||||||||||||||||
Modified Option(4) | 2/27/2017 | 2/24/2017 | - | - | - | 90,000 | 5.41 | 102,600 | ||||||||||||||||||||||||||
Modified Option(4) | 2/27/2017 | 2/24/2017 | - | - | - | 55,416 | 12.12 | 36,020 | ||||||||||||||||||||||||||
Modified Option(4) | 2/27/2017 | 2/24/2017 | - | - | - | 40,625 | 14.07 | 22,344 | ||||||||||||||||||||||||||
Modified Option(4) | 2/27/2017 | 2/24/2017 | - | - | - | 23,437 | 9.41 | 18,813 | ||||||||||||||||||||||||||
Edward R. Conner, M.D. | Annual Cash | 78,400 | 140,000 | 259,000 | - | - | - | |||||||||||||||||||||||||||
Curt A. Herberts, III | Annual Cash | 67,306 | 120,190 | 222,352 | ||||||||||||||||||||||||||||||
Annual Option | 1/26/2017 | 1/26/2017 | 75,000 | 3.50 | 165,743 |
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#) (2) | All Other Option Awards: Number of Securities Underlying Options (#) (3) | Exercise or Base Price of Option or Stock Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) (4) | ||||||||||||||||||||
Name | Award Type | Grant Date | Approval Date | Target ($) (1) | Maximum ($) (1) | |||||||||||||||||||
(a) | (b) | (d) | (e) | (j) | (k) | (l) | (m) | |||||||||||||||||
Alexander D. Macrae | Annual Cash | 397,163 | 794,326 | — | — | — | — | |||||||||||||||||
Annual RSU Grant | 43521 | 43521 | — | — | 63,250 | — | — | 571,148 | ||||||||||||||||
Annual Option Grant | 43521 | 43521 | — | — | — | 379,500 | 9.03 | 2,274,230 | ||||||||||||||||
Sung H. Lee | Annual Cash | 43,500 | 87,000 | — | — | — | — | |||||||||||||||||
New Hire RSU Grant | 11/25/2019 | 11/25/2019 | — | — | 43,750 | — | — | 452,813 | ||||||||||||||||
New Hire Option Grant | 11/25/2019 | 11/25/2019 | — | — | — | 262,000 | 10.35 | 1,757,679 | ||||||||||||||||
Stéphane Boissel | Annual Cash | 193,440 | 386,880 | — | — | — | — | |||||||||||||||||
Annual RSU Grant | 02/25/2019 | 43521 | — | — | 17,500 | — | — | 158,025 | ||||||||||||||||
Annual Option Grant | 02/25/2019 | 43521 | — | — | — | 105,000 | 9.03 | 629,234 | ||||||||||||||||
Adrian Woolfson | Annual Cash | 190,000 | 380,000 | — | — | — | — | |||||||||||||||||
New Hire Option Grant | 02/25/2019 | 02/25/2019 | — | — | 250,000 | 9.03 | 1,498,175 | |||||||||||||||||
Gary H. Loeb | Annual Cash | 80,000 | 160,000 | — | — | — | — | |||||||||||||||||
New Hire Option Grant | 08/23/2019 | 43700 | — | — | — | 250,000 | 11.02 | 1,788,475 | ||||||||||||||||
R. Andrew Ramelmeier | Annual Cash | 139,644 | 279,288 | — | — | — | — | |||||||||||||||||
Annual RSU Grant | 43521 | 43521 | — | — | 12,500 | — | — | 112,875 | ||||||||||||||||
Annual Option Grant | 43521 | 43521 | — | — | — | 75,000 | 9.03 | 449,453 | ||||||||||||||||
Kathy Y. Yi | Annual Cash | 168,410 | 336,820 | — | — | — | — | |||||||||||||||||
Annual RSU Grant | 43521 | 43521 | — | — | 19,250 | — | — | 173,828 | ||||||||||||||||
Annual Option Grant | 43521 | 43521 | — | — | — | 115,500 | 9.03 | 692,157 |
(1) | The dollar amounts represent the |
The amount shown as maximum reflects the payment level pursuant to the 2017 Cash Incentive Program if Sangamo had achieved a 200% corporate performance percentage and each individual (other than Dr. Macrae) had achieved a 125% individual performance percentage, which were the maximum percentages allowed for the corporate and individual performance percentages, respectively. Actual payouts differed based on the actual performance objectives achieved. The actual cash bonus award earned for the year ended December 31, 2017 pursuant to the 2017 Cash Incentive Program under the Incentive Plan for each named executive officer is set forth in the Summary Compensation Table above. As such, the amounts set forth in these columns do not represent additional compensation earned by the named executive officers for the year ended December 31, 2017. For more information regarding the 2017 Cash Incentive Program under the Incentive Plan see “—Compensation Discussion and Analysis—2017 Compensation Decisions—2017 Cash Incentive Compensation” above. For more information regarding the Incentive Plan, see “—Employment Agreements and Compensation Arrangements—Annual Cash Bonus Awards” below.
(2) | The reported RSU award was granted under the 2013 Plan and will vest and become exercisable in accordance with the following schedule: 1/3rd of the shares vest in three equal annual installments over the three-year period measured from the grant date, provided |
(3) | The reported option was granted under the |
(4) | Represents the grant date fair value of such stock option |
Employment Agreements and Compensation Arrangements
management, and (xxiii) other corporate performance criteria approved by the Compensation Committee.
Pursuant to the terms of the Incentive Plan, should a change in control transaction be consummated prior to the completion of a performance period that has been implemented under the Incentive Plan, then the performance period will terminate upon the consummation of that change in control and each participant in the Incentive Plan will receive a bonus in the dollar amount previously set by the Compensation Committee at target level attainment of each performance objective; however such bonus will bepro-rated to reflect each participant’s actual period of service from the start date of the performance period through the effective date of
the change in control. Anypro-rated bonus paid pursuant to the terms of the Incentive Plan will reduce the amount of any severance payable to the participant based on the participant’s target bonus pursuant to the terms of any employment agreement.
In the event any payment to which a participant becomes entitled under the Incentive Plan would otherwise constitute a parachute payment under Section 280G of the Code, then that payment will be subject to reduction to the extent necessary to assure that such payment will be limited to the greater of (i) the dollar amount that can be paid to the participant without triggering a parachute payment under Code Section 280G or (ii) the dollar amount of that payment which provides the participant with the greatestafter-tax amount after taking into account any excise tax the participant may incur under Code Section 4999 with respect to such payment and any other benefits or payments to which the participant may be entitled in connection with any change in control of the Company or the subsequent termination of the participant’s employment.
Other Benefits. Our executive officers are eligible to participate in all of our benefit plans, such as our medical, dental, vision, short-term disability, long-term disability and group life insurance plans and the Purchase Plan, in each case generally on the same basis as other employees. We also have a sectionSection 125 flexible benefits healthcare plan and a flexible benefits childcare plan under which employees can set asidepre-tax funds to pay for qualified healthcare expenses and qualified childcare expenses not reimbursed by insurance.insurance, respectively. We do not currently offer pension or other retirement benefits in the U.S.,United States, but do offer pension or other retirement benefits in certain other countries.
Option Awards | Stock Awards | |||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable (1) | Number of Securities Underlying Unexercised Options (#) Unexercisable (1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (3) | |||||||||||||||||||||
(a) |
| (b) | (c) | (d) | (e) | (f) (2) | (g) | |||||||||||||||||||||
Alexander D. Macrae | 01/26/2017 | 360,000 | 3.50 | 01/25/2027 | - | - | ||||||||||||||||||||||
| 06/03/2016
|
| 262,500 | 437,500 | 7.07 | 06/02/2026 | - | - | ||||||||||||||||||||
Kathy Y. Yi | 02/28/2017 | - | 200,000 | 4.55 | 02/27/2027 | - | - | |||||||||||||||||||||
H. Ward Wolff (4) | 12/08/2015 | 23,437 | - | 9.41 | 03/07/2019 | - | - | |||||||||||||||||||||
12/11/2014 | 40,625 | - | 14.07 | 03/07/2019 | - | - | ||||||||||||||||||||||
12/12/2013 | 55,416 | - | 12.12 | 03/07/2019 | - | - | ||||||||||||||||||||||
12/06/2012 | 90,000 | - | 5.41 | 03/07/2019 | - | - | ||||||||||||||||||||||
12/08/2010 | 150,000 | - | 5.70 | 03/07/2019 | - | - | ||||||||||||||||||||||
12/07/2009 | 130,000 | - | 5.35 | 03/07/2019 | - | - | ||||||||||||||||||||||
Edward R. Conner, M.D. | 11/30/2016 | 54,166 | 145,834 | 3.20 | 11/29/2026 | - | - | |||||||||||||||||||||
Curt A. Herberts III | 01/26/2017 | - | 75,000 | 3.50 | 01/25/2027 | - | - | |||||||||||||||||||||
12/08/2015 | 6,250 | 102,500 | ||||||||||||||||||||||||||
12/08/2015 | 18,750 | 18,750 | 9.41 | 12/07/2025 | - | - | ||||||||||||||||||||||
07/27/2015 | 6,041 | 3,959 | 8.87 | 07/26/2025 | - | - | ||||||||||||||||||||||
12/11/2014 | 15,000 | 5,000 | 14.07 | 12/10/2024 | - | - | ||||||||||||||||||||||
12/12/2013 | 20,000 | - | 12.12 | 12/11/2023 | - | - | ||||||||||||||||||||||
12/06/2012 | 25,000 | - | 5.41 | 12/05/2022 | - | - | ||||||||||||||||||||||
12/08/2011 | 12,000 | - | 2.55 | 12/07/2021 | - | - | ||||||||||||||||||||||
09/01/2011 | 15,000 | - | 5.12 | 08/31/2021 | - | - | ||||||||||||||||||||||
10/18/2010 | 35,000 | - | 3.99 | 10/17/2020 | - | - | ||||||||||||||||||||||
- |
Option Awards | Stock Awards | |||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable (1) | Number of Securities Underlying Unexercised Options (#) Unexercisable (1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#) (2) | Market Value of Shares or Units of Stock That Have Not Vested ($) (3) | |||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | ||||||||||||||
Alexander D. Macrae | 43521 | — | 379,500 | 9.03 | 47173 | — | — | |||||||||||||
43124 | 90,562 | 98,438 | 20.05 | 46775 | — | — | ||||||||||||||
42761 | 262,500 | 97,500 | 3.50 | 46412 | — | — | ||||||||||||||
6/3/2016 | 612,500 | 87,500 | 7.07 | 6/2/2026 | — | — | ||||||||||||||
43521 | — | — | — | — | 63,250 | 529,403 | ||||||||||||||
43124 | — | — | — | — | 21,000 | 175,770 | ||||||||||||||
Sung H. Lee (4) | 43794 | — | 262,000 | 10.35 | 47446 | — | — | |||||||||||||
43794 | — | — | — | — | 43,750 | 366,188 | ||||||||||||||
Stéphane Boissel | 43521 | — | 105,000 | 9.03 | 47173 | — | — | |||||||||||||
43427 | 76,787 | 206,736 | 11.08 | 47079 | — | — | ||||||||||||||
43521 | — | — | — | — | 17,500 | 146,475 | ||||||||||||||
Adrian Woolfson | 43521 | — | 250,000 | 9.03 | 47173 | — | — | |||||||||||||
Gary H. Loeb (5) | 43700 | — | 250,000 | 11.02 | 47352 | — | — | |||||||||||||
R. Andrew Ramelmeier | 43521 | — | 75,000 | 9.03 | 47173 | — | — | |||||||||||||
43131 | 57,500 | 62,500 | 20.85 | 46782 | — | — | ||||||||||||||
43521 | — | — | — | — | 12,500 | 104,625 |
(1) | Except as otherwise provided in the footnotes below, each option was subject to the following vesting schedule: 25% of the option shares will vest and become exercisable on the one year anniversary of the option grant date and the remaining option shares will vest and become exercisable in 36 equal monthly installments over the |
(2) | Represents an RSU award subject to vesting in three successive equal annual installments over the |
(3) | Based on the |
(4) |
(5) | Mr. Loeb’s option was subject to the following vesting schedule: 25% of the |
Name | Option Awards | Stock Awards | ||||||||||||||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (2) | |||||||||||||
(a) | (b) | (c) | (d) | (e) | ||||||||||||
Alexander D. Macrae | - | - | - | - | ||||||||||||
Kathy Y. Yi | - | - | - | - | ||||||||||||
H. Ward Wolff | 462,000 | 2,012,225 | - | - | ||||||||||||
Edward R. Conner, M.D. | 5,000 | 64,914 | - | - | ||||||||||||
Curt A. Herberts III | 63,395 | 438,330 | 9,583 | 158,453 |
Name | Option Awards | Stock Awards | ||||||||||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (2) | |||||||||
(a) | (b) | (c) | (d) | (e) | ||||||||
Alexander D. Macrae | — | — | 10,500 | 116,550 | ||||||||
Sung H. Lee | — | — | — | — | ||||||||
Stéphane Boissel | — | — | — | — | ||||||||
Adrian Woolfson | — | — | — | — | ||||||||
Gary H. Loeb | — | — | — | — | ||||||||
R. Andrew Ramelmeier | — | — | — | — | ||||||||
Kathy Y. Yi | 62,500 | 423,742 | 2,417 | 26,829 |
(1) | Value realized is determined by multiplying (i) the amount by which the market price of the common stock on the date of exercise exceeded the exercise price by (ii) the number of shares for which the options were exercised. |
(2) | Value realized is determined by multiplying |
Compensation Committee determined that any risks arising from our compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on us as a whole. In addition, the Compensation Committee believes that the mix and design of the elements of executive compensation do not encourage management to assume excessive risks, and significant compensation decisions, as well as decisions concerning the compensation of our executive officers, include subjective considerations by the compensation committee or the board of directors, which restrain the influence of formulae or objective factors on excessive risk taking. Finally, the mix of short-term compensation (in the form of salary and annual bonus, if any) and long-term compensation (in the form of stock options and RSUs) also prevents undue focus on short-term results and helps align the interests of our executive officers with the interests of our stockholders.
In 2019, Dr. Macrae’s base salary was $661,939 and his target cash bonus was 60% of his base salary.
Senior
In 2019, Ms. Yi’s base salary was $421,026 and her target cash bonus was 40% of her base salary.
Although Ms. Yi’s employment agreement includesprovided that she was eligible to receive certain severance benefits payable to her in connection with separation from service, such terms were waived by Ms. Yi in connection with the March 2017 adoption ofunder the Severance Plan, which now governs her severance benefits. The terms of the Severance Plan are described below under “—2017 Executive Severance Plan.”
Mr. Wolff
In November 2007, we entered into an employment agreement with H. Ward Wolff, our former Executive Vice President and Chief Financial Officer, which wasas amended and restated in December 2008 and December 2011 in order to implement technical changes. Pursuant to the terms of the agreement as amended and restated, Mr. Wolff’s annual base salary was set at a minimum of $375,000, increasing to $390,000 effective January 1, 2012, or such higher rate as the Board determined from time to time, and he was eligible to receive an annual performance bonus of up to 40% of his base salary each calendar year, based on our company’s and his individual achievement of specific performance criteria establishedFebruary 2019 by the Board.
If we had terminated Mr. Wolff’s employment without cause, or Mr. Wolff terminated his employment for good reason, within 12 months following a changeAmended Severance Plan. As Ms. Yi voluntarily resigned in control and Mr. Wolff executed a general release of all claims in our favor, then Mr. Wolff would have received the following severance benefits: (i) a severance payment equal to his annual base salary in effect on his termination date plus his target bonus for the year in which such termination occurred, (ii) reimbursement of his health care coverage costs under COBRA for up to twelve months, (iii) accelerated vesting of all of his outstanding equity awards and (iv) aone-year period measured from his termination date to exercise any outstanding options for all the option shares, but in no event would any such option have remained exercisable following the expiration of the maximum option term. If we had terminated Mr. Wolff’s employment without cause, or Mr. Wolff had terminated his employment for good reason, in the absence of a change in control or more than 12 months after a change in control and Mr. Wolff executed a general release of all claims in our favor, then Mr. Wolff would have received (i) salary continuation payments for a 12 month period following his termination date at his rate of base salary in effect on his termination date and (ii) reimbursement of his health care coverage costs under COBRA for up to 12 months.
Effective as of February 28, 2017, Mr. Wolff retired from his position as our Executive Vice President and Chief Financial Officer. In connection with his retirement, Mr. Wolff entered into an amendment to his employment agreement, pursuant to which Mr. Wolff agreed that he wouldJune 2019, she did not be entitled to receive any cash severance in connection with his retirement; however, we agreed to reimburse Mr. Wolff for the 12 months of COBRA expenses, and his outstanding stock options (to the extent vested on his termination date), will remain exercisable for a period of two years following Mr. Wolff’s termination of employment,payments or until the end of the term of the stock option, if earlier. We estimate the value of the COBRA expense payments to be $30,608 (of which $25,365 was paid during the year ending December 31, 2017) and have calculated the value of his option modifications to be $836,136.65, which represents the aggregate incremental fair value associated with the modifications of Mr. Wolff’s stock options as calculated in accordance with ASC 718.
Dr. Conner
Effective November 1, 2016, we entered into an employment agreement with Dr. Conner, which sets forth the terms and conditions of his employment as Chief Medical Officer. Pursuant to his employment agreement, Dr. Conner will receive a base salary of $400,000 per year, and an annual cash bonus based upon our company’s and his individual achievement of specified objectives under our Incentive Plan with a target cash bonus of 35% of his base salary. Dr. Conner’s base salary and target bonus percentage are subject to annual review by the Compensation Committee and adjustment from time to time by such Committee, and his salary was subject to pro ration for partial service in 2016. Dr. Conner was not eligible for a target cash bonus in 2016.
Dr. Conner’s employment agreement also provided for an initial equity grant of stock optionsbenefits under the 2013 Plan to acquire 200,000 shares of our common stock, which is vesting on the same terms as other discretionary awards under the 2013 Plan.
Although Dr. Conner’s employment agreement includes certain severance benefits payable to him in connection with separation from service, such terms were waived by Dr. Conner in connection with the March 2017 adoption of the Severance Plan, which now governs his severance benefits. The terms of the Severance Plan are described below under “—2017 ExecutiveAmended Severance Plan.”
Mr. Herberts
In August 2010, we entered into an employment agreement with Mr. Herberts setting forth the terms and conditions of his employment as a Director, Corporate Development. In November 2016, Mr. Herberts was promoted to Chief Business Officer. As a Chief Business Officer, Mr. Herberts’ base salary was set a $340,000 per year and Mr. Herberts was eligible for an annual cash bonus based upon our company’s and his individual achievement of specified objectives under our Incentive Plan with a target cash bonus of 35% of his base salary. Mr. Herberts’ base salary and target bonus percentage are subject to annual review by the Compensation Committee and adjustment from time to time by such Committee.
Mr. Herberts’ employment agreement does not provide for any severance benefits. As an executive, Mr. Herberts is an eligible employee under the Severance Plan and may receive benefits under such plan, which is described below.
2017
Under theAmended Severance Plan, which replacedamended and restated the severance arrangement set forth in Dr. Macrae’s employment agreement,Severance Plan.
Under the Severance Plan, which replaced the severance arrangements set forth in Dr. Conner’s and Ms. Yi’s respective employment agreements, Dr. Conner,(and had she not resigned, Ms. Yi and Mr. Herberts are eligiblewould have been eligible) to receive the following severance benefits: (a) cash equal to the sum of (i) 1215 months of base salary and (ii) 1/12 of the target bonus for the year of termination multiplied by 15, payable over 1215 months, reimbursement for health care coverage costs under COBRA for 1215 months, and accelerated vesting of all outstanding equity awards, and any outstanding options as so accelerated will remain exercisable for a period of 12 months following termination, in the event of an involuntary termination during the Change in Control Period; or (b) cash equal to 915 months of base salary, payable over 915 months, and COBRA reimbursement for 915 months, if there is an involuntary termination other than during the Change in Control Period. These cash severance benefits under the Severance Plan are similar to the severance benefits Dr. Conner and Ms. Yi were eligible to receive under their respective employment agreements; however, under the employment agreements, only 50% of the shares subject to any outstanding equity award accelerated if the change in control was within two years following the effective date of the employment agreement and 100% of the shares accelerated if the change in control was more than two years
after the effective date, and (b) the base salary and COBRA reimbursement continuation period was six months under the employment agreements (instead of 12 months in the event of an involuntary termination during the Change in Control Period or 9 months in the event of an involuntary termination other than during the Change in Control Period, under the Severance Plan, as described above).
If any of the severance benefits under the Amended Severance Plan would constitute a “parachute payment” within the meaning of sectionSection 280G of the Code, such payments are subject to reduction to the extent doing so would put the recipient in a betterafter-tax position after taking into account any excise tax that may be incurred under Code Section 4999 in connection with any change in control of the Company or subsequent termination of employment,
employment.
Incentive Compensation
assumption, continuation or substitution.
as of December 31, 2019
Because Ms. Yi voluntarily resigned effective June 7, 2019, she was not eligible for any potential payments or benefits under any of the various scenarios below as of December 31, 2019, and she did not receive any payments or benefits under our Amended Severance Plan or otherwise.
For information with respect to the compensation and benefits we provided to Mr. Wolff in connection with his retirement, see “—Senior Vice President Employment Agreements—Mr. Wolff” above.
Name | Cash | COBRA | ||||||
Alexander D. Macrae | $ | 612,000 | - | |||||
Kathy Y. Yi | $ | 262,500 | 24,762 | |||||
H. Ward Wolff (2) | $ | - | 25,365 | |||||
Edward R. Conner, M.D. | $ | 300,000 | 1,953 | |||||
Curt A. Herberts III | $ | 257,550 | 24,762 |
Name | Cash Severance ($) (1) | COBRA ($) | ||||
Alexander D. Macrae | 992,909 | 26,088 | ||||
Sung H. Lee | 543,750 | 36,258 | ||||
Stéphane Boissel | 604,500 | 26,094 | ||||
Adrian Woolfson | 593,750 | 26,094 | ||||
Gary H. Loeb | 500,000 | 10,763 | ||||
R. Andrew Ramelmeier | 500,000 | 26,094 |
(1) | Cash severance upon termination in the absence of a change in control is payable in a series of successive equal monthly installments over a period ranging from |
Name Alexander D. Macrae Kathy Y. Yi Edward R. Conner, M.D. Curt A. Herberts III (other than Mr. Wolff who retired during the year) would each have received had their employment terminated without cause or with good reason in connection with a change in control under circumstances entitling them to severance benefits under the Amended Severance Plan. Cash
Severance (1) Target
Bonus (2) Accelerated
Vesting of
Equity
Awards COBRA $ 918,000 $ 367,200 $ 8,725,875 $ - $ 350,000 $ 122,500 $ 2,370,000 $ 24,762 $ 400,000 $ 140,000 $ 1,925,009 $ 1,953 $ 343,400 $ 120,190 $ 1,242,524 $ 24,762 Name COBRA ($) Alexander D. Macrae 992,909 595,745 1,293,748 26,088 Sung H. Lee 543,750 217,500 366,188 36,258 Stéphane Boissel 604,500 241,800 146,475 26,094 Adrian Woolfson 593,750 237,500 — 26,094 Gary H. Loeb 500,000 200,000 — 10,763 R. Andrew Ramelmeier 500,000 200,000 104,625 26,094 (1) Cash severance upon termination in connection with a change in control is payable in a series of successive equal monthly installments over 12 months.a period ranging from 15 months (named executive officers other than CEO) to 18 months (CEO).
(2) | Target bonus represents the amount of severance benefit that an executive is entitled to payable in a series of successive equal monthly installments over |
Name Alexander D. Macrae Kathy Y. Yi Edward R. Conner, M.D. Curt A. Herberts III(3) No value is included in this table with respect to the accelerated vesting of options for which the exercise price was in excess of the closing price of our common stock on December 31, 2019. (other than Mr. Wolff who retired during the year) are entitled to receive under the 2013 Plan and 2018 Plan upon a change in control of the Company in which their outstanding equity awards are not assumed or otherwise continued in effect, terminated or cancelledcanceled in connection therewith. Accelerated Equity $ 8,725,875 $ 2,370,000 $ 1,925,009 $ 1,242,524
The chart below quantifies the cash award for the 2017 year the named executive officers are entitled to receive under the Incentive Plan upon a change in control of the Company. This benefit was eliminated by the March 2018 amendment of the Incentive Plan.
Name | Incentive Plan Award | |||
Alexander D. Macrae | $ | 367,200 | ||
Kathy Y. Yi | $ | 112,292 | ||
Edward R. Conner, M.D. | $ | 140,000 | ||
Curt A. Herberts III | $ | 120,190 |
Name | Accelerated Vesting of Equity Awards ($) | ||
Alexander D. Macrae | 1,293,748 | ||
Sung H. Lee | 366,188 | ||
Stéphane Boissel | 146,475 | ||
Adrian Woolfson | — | ||
Gary H. Loeb | — | ||
R. Andrew Ramelmeier | 104,625 | ||
Kathy Y. Yi | — |
For
The CEO Pay Ratio above represents our reasonable estimate calculated in a manner consistent with SEC rules and applicable guidance. SEC rules and guidance provide significant flexibility in how companies identify the median employee, and each company may use a different methodology and make different assumptions particular to that company. As a result, and as explained by the SEC when it adopted these rules, in considering the pay ratio disclosure, stockholders should keep in mind that the rule was not designed to facilitate comparisons of pay ratios among different companies, even companies within the same industry, but rather to allow stockholders to better understand and assess each particular company’s compensation practices and pay ratio disclosures.
Compensation Committee Report
Submitted by the Compensation |
Committee of the |
Board of Directors of Sangamo Therapeutics, Inc. |
Ms. H. Stewart Parker |
Dr. Karen L. Smith |
Mr. Joseph S. Zakrzewski |
1 | The material in this Compensation Committee Report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference into any filing of Sangamo Therapeutics, Inc. under the Securities Act of 1933, as amended, or the Securities Act, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. |
Equity Compensation Plan Information
Column (A) | Column (B) | Column (C) | ||||||||||||||||||||||
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Restricted Stock Units and Other Rights | Weighted Average Exercise Price of Outstanding Options | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column A) | |||||||||||||||||||||
Equity Compensation Plans Approved by Stockholders (1) | 8,203,628 | (2 | )(3) | $ | 7.63 | (4 | ) | 3,601,307 | (5 | )(6) | ||||||||||||||
Equity Compensation Plans Not Approved by Stockholders (1) | 164,000 | (7 | ) | 15.00 | 836,000 | (6 | )(8) | |||||||||||||||||
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| |||||||||||||||||||
Total | 8,367,628 | $ | 7.77 | 4,437,307 | ||||||||||||||||||||
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|
Column (A) | Column (B) | Column (C) | |||||||||||||||||||||
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Restricted Stock Units and Other Rights | Weighted-Average Exercise Price of Outstanding Options | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column A) | ||||||||||||||||||||
Equity Compensation Plans Approved by Stockholders (1) | 10,528,137 | (2 | ) | (3) | $ | 10.64 | (4 | ) | 9,448,809 | (5 | ) | (6) | |||||||||||
Equity Compensation Plans Not Approved by Stockholders (1) | 164,000 | (7 | ) | 15.00 | — | (6 | ) | (8) | |||||||||||||||
Total | 10,692,137 | 10.71 | 9,448,809 |
(1) | The equity compensation plans approved by stockholders |
amendment and restatement of the 2013 Plan to reserve an additional 1,000,000 shares of our common stock to be used exclusively for grants of awards to individuals who were not previously employees ornon-employee directors of the Company (or following a bona fide period ofnon-employment with the Company), as an inducement material to each such individual’s entry into employment with us within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules, or Rule 5635(c)(4) (such awards, the |
(2) | Includes |
(3) | Excludes purchase rights accruing under the Purchase Plan and shares subject to outstanding options granted under the 2013 Plan as Inducement |
(4) | The calculation does not take into account the |
(5) | Consists of shares available for future issuance under the Purchase Plan and the |
(6) | As of December 31, |
(7) | Consists of stock options granted as Inducement Awards under the 2013 Plan. |
(8) | As of December 31, 2019, options to purchase 164,000 shares were outstanding as Inducement Awards. All options granted as Inducement Awards have a maximum term of 10 years. As a result of the adoption of the 2018 Plan at our 2018 annual meeting of stockholders, no additional stock awards may be granted as Inducement Awards. Accordingly, for purposes of the table above, no shares remained available for issuance as Inducement Awards as of December 31, 2019. |
Report of the Audit Committee of the Board of DirectorsREPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS1
Act.
and the Securities and Exchange Commission.
Submitted by the Audit Committee of the Board of Directors of Sangamo Therapeutics, Inc. |
Mr. Robert F. Carey |
Dr. Stephen G. Dilly |
Ms. Saira Ramasastry |
1 | The material in this Report of the Audit Committee is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference into any filing of Sangamo Therapeutics, Inc. under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. |
POLICIES AND PROCEDURES
Consistent with the requirement under Nasdaq listing rules, the Audit Committee of the Board of Directors is responsible for reviewing and approving all related party transactions as defined under SEC rules and regulations. While we do not have a formal written policy or procedure for the review, approval or ratification of related party transactions, the Audit Committee must review the material facts of any such transaction and approve that transaction.
To identify related party transactions, each year we submit and require our directors and officers to complete directorexecutive officers. We may amend these indemnification agreements from time-to-time as appropriate.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The members of the Board of Directors, our executive officersfuture performance and persons who beneficially own more than 10% of our outstanding common stock are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ include, but are not limited to, risks and uncertainties related to: our dependence on the reporting requirementssuccess of Section 16clinical trials; the lengthy and uncertain regulatory approval process; the initiation, enrollment and completion of clinical trials; whether the final results from a study will validate and support interim safety and efficacy data; our reliance on partners and other third-parties to meet their clinical and manufacturing obligations; our ability to maintain strategic partnerships and collaborations; the potential for technological developments by our competitors that will obviate our technologies; and the impact of public health epidemics, such as COVID-19, on employees, our ability to carry out research and clinical trials, our supply chain, and the global economy. Further, there can be no assurance that (i) our global collaboration agreement with Biogen will become effective and that the transactions contemplated thereby or by the stock purchase agreement with Biogen will otherwise close, including as a result of the Exchangefailure by the parties to clear the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in the United States review or otherwise satisfy closing conditions, (ii) any additional milestone events will be achieved related to any of our partnered product candidates or (iii) the necessary regulatory approvals will be obtained or that we and our partners will be able to develop commercially viable product candidates. Actual results may differ from those projected in forward-looking statements due to risks and uncertainties that exist in our operations and business environments. These risks and uncertainties are described more fully
applicable law.
This year, a number of brokers with account holders who are our stockholders will be “householding” Notices and our proxy materials. A single Notice or a single set of Internet Availability of Proxy Materialsproxy materials, as applicable, will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that theyit will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate Notice or set of Internet Availability of Proxy Materials,proxy materials, please notify your broker or us. Direct your written request to Sangamo Therapeutics, Inc., Heather Turner,Gary H. Loeb, Secretary, 501 Canal7000 Marina Boulevard, Richmond,Brisbane, California 9480494005 or contact McDavid Stilwell at510-970-6000. Stockholders who currently receive multiple copies of the NoticesNotice or sets of Internet Availability of Proxy Materialsproxy materials at their addressesaddress and would like to request “householding” of their communications should contact their brokers.broker. In addition, we will promptly deliver, upon written or oral request to the address or telephone number above, a separate copy of thea Notice of Internet Availability of Proxy Materials or the full set of proxy materials, as applicable, to a stockholder at a shared address to which a single copyNotice or set of the documentsproxy materials, as applicable, was delivered.
By Order of the Board of Directors, | |
Gary H. Loeb Corporate Secretary | |
Brisbane, California | |
April , 2020 |
1 | |
2. Shares Subject to the Plan | 1 |
3. Eligibility | 3 |
4. Options and Stock Appreciation Rights | 3 |
6. Awards Other Than Options and Stock Appreciation Rights | 7 |
7. Adjustments upon Changes in Common Stock; Other Corporate Events | 8 |
8. Automatic Grants To Eligible Directors | 11 |
9. Administration | 12 |
10. Tax Withholding | 15 |
11. Miscellaneous | 15 |
12. Covenants of the Company | 20 |
13. Additional Rules for Awards Subject to Section 409A | 21 |
14. Severability | 24 |
14. Termination of the Plan | 24 |
15. Definitions | 25 |
Dated: April 24, 2018
Appendix A
SANGAMO THERAPEUTICS, INC.
2018 EQUITY INCENTIVE PLAN
ADOPTEDBYTHE COMPENSATION COMMITTEEOFTHE BOARD: APRIL 23, 2018
APPROVEDBYTHE STOCKHOLDERS: , 2018
1.
1. |
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A-i-
(a)Successor to and Continuation of Predecessor Plan.The Plan is the successor to and continuation of the Predecessor Plan. As of the Effective Date, (i) no additional awards may be granted under the Predecessor Plan; (ii) the Predecessor Plan’s Available Reserve will become available for issuance pursuant to Awards granted under this Plan; and (iii) all outstanding awards granted under the Prior Plans will remain subject to the terms of the Prior Plans;provided, however, that any Prior Plans’ Returning Shares from the Prior Plans will become available for issuance pursuant to Awards granted under this Plan. All Awards granted under this Plan will be subject to the terms of this Plan.
2. |
(a) Share Reserve.
(i)Shares Subject to the Plan.
A-1.
(d)(e)Share Reserve Limit.For clarity, the Share Reserve limit in Section 2(a) is a limit on the number of shares of Common Stock that may be issued pursuant to Awards and does not limit the granting of Awards, except that the Company will keep available at all times the number of shares of Common Stock reasonably required to satisfy its obligations to issue shares pursuant to such Awards. Shares may be issued in connection with a merger or acquisition as permitted by, as applicable, NASDAQNasdaq Listing Rule 5635(c), NYSE Listed Company Manual Section 303A.08, AMEX Company Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares available for issuance under the Plan.
4.Options and Stock Appreciation Rights. |
Each Option and SAR will have such terms and conditions as determined by the Board. Each Option will be designated in writing as an Incentive Stock Option or Nonstatutory Stock Option at the time of grant;provided, however, that if an Option is not so designated, then such Option will be a Nonstatutory Stock Option, and the shares purchased upon exercise of each type of Option will be separately accounted for. The terms and conditions of separate Options and SARs need not be identical;provided, however, that each Option Agreement and SAR Agreement will conform (through incorporation of provisions hereof by reference in the Award Agreement or otherwise) to the substance of each of the following provisions:
A-2.
an Option may be paid, to the extent permitted by Applicable Law and as determined by the Board, by one or more of the following methods of payment to the extent set forth in the Option Agreement:
A-3.
Code and applicable state law) while such Option or SAR is held in such trust, provided that the Participant and the trustee enter into a transfer and other agreements required by the Company.
A-4.
(i)(i)Termination of Continuous Service for Cause.Except as explicitly otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service is terminated for Cause, the Participant’s Options and SARs will terminate and be forfeited immediately upon such termination of Continuous Service, and the Participant will be prohibited from exercising any portion (including any vested portion) of such Awards on and after the date of such termination of Continuous Service and the Participant will have no further right, title or interest in such forfeited Award, the shares of Common Stock subject to the forfeited Award, or any consideration in respect of the forfeited Award.
(l) Dividends. Dividends or dividend equivalents may not be paid or credited to options or SARs.
5. |
(a)Awards Other Than Options and Stock Appreciation Rights.
A-5.
(ii)Consideration.
(vi)Settlement of RSU Awards.Awards.A RSU Award may be settled by the issuance of shares of Common Stock or cash (or any combination thereof) or in any other form of payment, as determined by the Board and specified in the RSU Award Agreement. At the time of grant, the Board may determine to impose such restrictions or conditions that delay such delivery to a date following the vesting of the RSU Award.
A-6.
exercise price or strike price less than 100% of the Fair Market Value at the time of grant) may be granted either alone or in addition to Awards provided for under Section 4 and the preceding provisions of this Section 5. Subject to the provisions of the Plan, the Board will have sole and complete discretion to determine the persons
A-7.
(referred (referred to as the “Current Eligible Participants”), the vesting of such Awards (and, with respect to Options and Stock Appreciation Rights, the time when such Awards may be exercised) will be accelerated in full to a date prior to the effective time of such Change in Control (contingent upon the effectiveness of the Change in Control) as the Board determines (or, if the Board does not determine such a date, to the date that is five (5) days prior to the effective time of the Change in Control), and such Awards will terminate if not exercised (if applicable) at or prior to the effective time of the Change in Control, and any reacquisition or repurchase rights held by the Company with respect to such Awards will lapse (contingent upon the effectiveness of the Change in Control).
A-8.
granted an Option to purchase 30,000 shares of Common Stock and a RSU Award in respect of 5,00015,000 shares of Common Stock (each such Option and RSU Award an “Initial Award”). Initial Awards of Options shall vest monthly with respect to 1/36th of the shares over the three year period following the date of grant, subject to the Eligible Director’s Continuous Service through the applicable vesting dates, so that the Option will be fully vested on the third anniversary of the date of grant. Initial Awards of RSU Awards shall vest annually with respect to 1/3rd of the shares over the three year period following the date of grant, subject to the Eligible Director’s Continuous Service through the applicable vesting dates, so that the RSU Award is fully vested on the third anniversary of the date of grant.
A-9.
(v)To prohibit the exercise of any Option, SAR or other exercisable Award during a period of up to thirty days prior to the consummation of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of Common Stock or the share price of the Common Stock including any Change in Control, for reasons of administrative convenience.
A-10.
this power, may correct any defect, omission or inconsistency in the Automatic Grant Program or in any Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Automatic Grant Program fully effective.
A-11.
10.Miscellaneous. (a) |
(a) Minimum Vesting Requirements.Requirements. No Award may vest (or, if applicable, be exercisable) until at least twelve (12) months following the date of grant of the Award; provided, however, that shares of Common Stock up to five percent (5%) of the Share Reserve may be subjectissued pursuant to Awards that do not meet such vesting (and, if applicable, exercisability) requirements.
A-12.
(f)(g)No Employment or Other Service Rights.Nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or affect the right of the Company or an Affiliate to terminate at will and without regard to any future vesting opportunity that a Participant may have with respect to any Award (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be. Further, nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award will constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or service or confer any right or benefit under the Award or the Plan unless such right or benefit has specifically accrued under the terms of the Award Agreement and/or Plan.
A-13.
addition, the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including but not limited to a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a Participant’s right to voluntary terminate employment upon a “resignation for good reason,” or for a “constructive termination” or any similar term under any plan of or agreement with the Company.
A-14.
Affiliates and the Plan Administrator for the exclusive purpose of implementing, administering and managing such Participant’s participation in the Plan. Each Participant understands that the Company and the Employer may hold certain personal information about such Participant, including, but not limited to, the Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all Awards or any other entitlement to ordinary shares awarded, canceled, exercised, vested, unvested or outstanding in the Participant’s favor, for the purpose of implementing, administering and managing the Plan (the “Data”). Each Participant understands that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Participant’s country or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than the Participant’s country. Each Participant understands that such Participant may request a list with the names and addresses of any potential recipients of the Data by contacting the Participant’s local human resources representative. Each Participant authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom such Participant may elect to deposit any ordinary shares acquired pursuant to an Award. Each Participant understands that Data will be held only as long as is necessary to implement, administer and manage such Participant’s participation in the Plan. Each Participant understands that such Participant may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, without cost, by contacting in writing such Participant’s local human resources representative. Each Participant understands, however, that refusing or withdrawing such Participant’s consent may affect such Participant’s ability to participate in the Plan. For more information on the consequences of refusal to consent or withdrawal of consent, each Participant understands that such Participant may contact his or her local human resources representative.
A-15.
advised to consult with his or her own personal tax, financial and other legal advisors regarding the tax consequences of the Award and has either done so or knowingly and
A-16.
(i)VestedNon-Exempt Awards: The following provisions shall apply to any VestedNon-Exempt Award in connection with a Change in Control:
A-17.
(i)If the Change in Control is also a Section 409A Change of Control, then the Acquiring Entity may not assume, continue or substitute theNon-Exempt Director Award. Upon the Section 409A Change of Control the vesting and settlement of anyNon-Exempt Director Award will automatically be accelerated and the shares will be immediately issued to the Participant in respect of theNon-Exempt Director Award. Alternatively, the Company may provide that the Participant will instead receive a cash settlement equal to the Fair Market Value of the shares that would otherwise be issued to the Participant upon the Section 409A Change of Control pursuant to the preceding provision.
A-18.
A-19.
(j)(k)“Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Award after the Effective Date without the receipt of consideration by the
A-20.
domicile of the Company, and (B) the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant shall supersede the foregoing definition with respect to Awards subject to such agreement;provided, however, that (1) if no definition of Change in Control or(or any analogous termterm) is set forth in such an individual written agreement, the foregoing definition shall apply.
apply; and (2) no Change in Control (or any analogous term) will be deemed to occur with respect to Awards subject to such an individual written agreement without a requirement that the Change in Control (or any analogous term) actually occur.
A-21.
(v)(w)“Effective Date” means the date of the annual meeting of stockholders of the Company heldAnnual Meeting in 2018, provided this Plan is approved by the Company’s stockholders at such meeting.
(bb) “Exchange Act Person”means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities.
A-22.
governmental division, department, administrative agency or bureau, commission, authority, instrumentality, official, ministry, fund, foundation, center, organization, unit, body or Entity and any court or other tribunal, and for the avoidance of doubt, any Tax authority) or other body exercising similar powers or authority; or (d) self-regulatory organization (including the NASDAQNasdaq Stock Market and the Financial Industry Regulatory Authority).
A-23.
thereunder) (“Separation from Service”) and such severance benefit does not satisfy the requirements for an exemption from application of Section 409A provided under Treasury RegulationsSection 1.409A-1(b)(4),1.409A-1(b), 1.409A-1(b)(9) or otherwise.
A-24.
equity; (xxxi) capital expenditures; (xxxii) debt levels; (xxxiii) operating profit or net operating profit; (xxxiv) workforce diversity; (xxxv) growth of net income or operating income; (xxxvi) billings; (xxxvii) bookings; and (xxxviii) and other measures of performance selected by the Board.
(aaa) “Performance Award” means an Award that may vest or may be exercised contingent upon the attainment during a Performance Period of certain Performance Goals and which is granted under the terms and conditions of Section 5(b).
Plan.
A-25.
(ggg) ““Predecessor Plan’s Available Reserve” means the number of shares available for the grant of new awards under the Predecessor Plan as of immediately prior to the Effective Date.
(hhh)Prior Plans’ Returning Shares“Prospectus” means the document containing the Plan information specified in Section 10(a) of the Securities Act.
(iii) “Restricted Stock Award” means an award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 5(a).
(jjj) “Restricted Stock Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. Each Restricted Stock Award Agreement will be subject to the terms and conditions of the Plan.
(kkk) “RSU Award”means an Award of restricted stock units representing the right to receive an issuance of shares of Common Stock which is granted pursuant to the terms and conditions of Section 5(a).
(lll) “RSU Award Agreement”means a written agreement between the Company and a holder of a RSU Award evidencing the terms and conditions of a RSU Award grant. Each RSU Award Agreement will be subject to the terms and conditions of the Plan.
(mmm) “Returning Shares” means shares subject to outstanding stock awards granted under the Plan or the Prior Plans and that following the Effective Date: (A) are not issued because such stock award or any portion thereof expires or otherwise terminates without all of the shares covered by such stock award having been issued; (B) are not issued because such stock award or any portion thereof is settled in cash; or (C) are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required for the vesting of such shares.
A-26.
(vvv) “ “Subsidiary” means, with respect to the Company, (i) any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than 50%.
(www) “Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate.
A-27.
2010 EMPLOYEE STOCK PURCHASE PLAN
(As Amended )
This Employee Stock Purchase Plan is intended to promote the interests of Sangamo Therapeutics, Inc., a Delaware corporation organized and existing under and by providing eligible employees with the opportunity to acquire a proprietary interest in the Corporation through participation in an employee stock purchase plan designed to qualify under Section 423virtue of the Code.
The Plan shall serve as the successor to the Corporation’s 2000 Employee Stock Purchase Plan, and no additional offering periods shall commence under that Predecessor Plan after November 1, 2009. The Predecessor Plan shall terminate upon the completionGeneral Corporation Law of the purchase date under each offering period in effect under the Predecessor Plan on April 30, 2010.
Capitalized terms herein shall have the meanings assigned to such terms in the attached Appendix.
The Plan Administrator shall have full authority to interpret and construe any provisionState of the Plan and to adopt such rules and regulations for administering the Plan as it may deem necessary in order to comply with the requirements of Code Section 423. Decisions of the Plan Administrator shall be final and binding on all parties having an interest in the Plan.
Delaware, hereby certifies that:
B. Should any change be made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares,spin-off transaction or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration or should the value of outstanding shares of Common Stock be substantially reduced as a result of aspin-off transaction or an extraordinary dividend or distribution, then equitable adjustments shall be made by the Plan Administrator to (i) the maximum number and class of securities issuable under the Plan, (ii) the maximum number and class of securities purchasable per Participant during any offering period and on any one Purchase Date during that offering period, (iii) the maximum number and class of securities purchasable in total by all Participants under the Plan on any one Purchase Date and (iv) the number and class of securities and the price per share in effect under each outstanding purchase right. The adjustments shall be made in such manner as the Plan Administrator deems appropriate, and such adjustments shall be final, binding and conclusive.
A. Shares of Common Stock shall be offered for purchase under the Plan through a series of successive offering periods until such time as (i) the maximum number of shares of Common Stock available for issuance under the Plan shall have been purchased or (ii) the Plan shall have been sooner terminated.
B. Unless otherwise specified by the Plan Administrator prior to the start of the applicable offering period:
(i) each offering period shall have a duration of twenty-four (24) months, and
(ii) offering periods shall commence on the first business day of May and the first business day of November each year.
C. The terms and conditions of each offering period may vary, and two or more offerings periods may run concurrently under the Plan, each with its own terms and conditions. In addition, special offering periods may be established with respect to entities that are acquired by the Corporation (or any subsidiary of the Corporation) or under such other circumstances as the Plan Administrator deems appropriate. In no event, however, shall the terms and conditions of any offering period contravene the express limitations and restrictions of the Plan, and the participants in each separate offering period shall have equal rights and privileges under that offering in accordance with the requirements of Section 423(b)(5) of the Code and the applicable Treasury Regulations thereunder.
D. Unless otherwise specified by the Plan Administrator prior to the start of the applicable offering period, each offering period shall be comprised of four successive Purchase Intervals. Purchase Intervals shall run from the first business day in May to the last business day in October each year and from the first business day in November each year to the last business day in April in the following year.
E. The initial offering period under the Plan shall commence on May 3, 2010, shall have a duration of twenty-four (24) months, and shall have four successivesix-month Purchase Intervals. The Purchase Intervals in such initial offering period shall run from the first business day in May each year to the last business day in October in that year and from the first business day in November each year to the last business day in April in the following year.
F. Should the Fair Market Value per share of Common Stock on any Purchase Date within an offering period be less than the Fair Market Value per share of Common Stock on the start date of that offering period, then the individuals participating in that offering period shall, immediately after the purchase of shares of Common Stock on their behalf on such Purchase Date, have their participation contribution election transferred from that offering period and automatically enrolled, if necessary, in the offering period commencing on the next business day following such Purchase Date, provided and only if the Fair Market Value per share of Common Stock on the start date of that new offering period is lower than the Fair Market Value per share of Common Stock on the start date of the offering period in which they were currently enrolled.Sangamo Therapeutics, Inc. (the “Corporation”).
B.Second: The date an individual enters an offering period shall be designated his or her Entry Date for purposes of that offering period.
B-2.
C. Each corporation that becomes a Corporate Affiliate after May 3, 2010 shall automatically become a Participating Corporation effective as of the start date of the first offering date coincident with or next following the date on which it becomes such an affiliate, unless the Plan Administrator determines otherwise prior to the start date of that offering period.
D. To participate in the Plan for a particular offering period, the Eligible Employee must complete the enrollment forms prescribed by the Plan Administrator (including a stock purchase agreement and a payroll deduction authorization or other authorized form of contribution allowable for that offering period) and file such forms with the Plan Administrator (or its designate) on or before his or her scheduled Entry Date.
A. For each offering period, the Plan Administrator may allow contributions to the Plan to be effected in the form of periodic payroll deductions or one or more other forms specified by the Plan Administrator prior to the start date of the applicable offering period. However, all contributions, whether in the form of payroll deductions or other mode, shall be made solely on the basis of the Participant’s Cash Earnings or Base Salary (as determined by the Plan Administrator prior to the start date of the applicable offering period and to be in effect for all Participants in the offering period) for the offering period up to a maximum of fifteen percent (15%) for all offerings in which the Participant is enrolled or such lower percentage as set by the Plan Administrator prior to the start date of any applicable offering period. Unless the Plan Administrator determines otherwise prior to the start of the applicable offering period:
(i) Participant contributions for each offering period shall be solely in the form of payroll deductions, and
(ii) the payroll deductions that each Participant may authorize for purposes of acquiring shares of Common Stock during any offering period may be in any multiple of one percent (1%) of the Base Salary paid to that Participant during each Purchase Interval within any offering period, up to a maximum of fifteen percent (15%), unless the Plan Administrator establishes a different maximum percentage prior to the start date of the applicable offering period.
B. The rate of payroll deduction or other permitted form of contribution so authorized shall continue in effect throughout the offering period, except to the extent such rate is changed in accordance with the following guidelines:
(i) The Participant may, at any time during the offering period, reduce the rate of his or her payroll deduction or other permitted form of contribution to become effective as soon as administratively possible after filing the appropriate form with the Plan Administrator. The Participant may not, however, effect more than one (1) such reduction per Purchase Interval.
(ii) The Participant may, at any time during the offering period, increase the rate of his or her payroll deduction or other permitted form of contribution (up to the maximum percentage limit for that offering period) to become effective as soon as administratively possible after filing the appropriate form with the Plan Administrator. The Participant may not, however, effect more than one (1) such increase per Purchase Interval.
(iii) The Participant may at any time reduce his or her rate of payroll deduction under the ESPP or other form of permitted contribution to 0%. Such reduction shall become effective as soon as administratively practicable following the filing of the appropriate form with the Plan Administrator. The Participant’s existing payroll deductions or other permitted contribution for the Purchase Interval in which such reduction occurs shall be applied to the purchaseSeventh Amended and Restated Certificate of shares of Common Stock on the next scheduled Purchase Date.
B-3.
C. Payroll deductions shall begin on the first pay day administratively feasible following the Participant’s Entry Date into the offering period and shall (unless sooner terminated by the Participant) continue through the pay day ending with or immediately prior to the last day of that offering period. To the extent the Plan Administrator authorizes other forms of contributions for an offering period, those permitted contributions shall be collected in the manner specified by the Plan Administrator for that offering period. The payroll deductions or other permitted forms of contribution so collected shall be credited to the Participant’s book account under the Plan, but no interest shall be paid on the balance from time to time outstanding in such account, unless otherwise required by the terms of that offering period. Unless the Plan Administrator determines otherwise prior to the start of the applicable offering period, the amounts collected from the Participant shall not be required to be held in any segregated account or trust fund and may be commingled with the general assetsIncorporation of the Corporation and used for any corporate purpose.
D. Payroll deductions or other permitted formwith the Secretary of contribution shall automatically cease upon the terminationState of the Participant’s purchase rightState of Delaware was April 11, 2000.
E. The Participant’s acquisition of Common Stock under the Plan on any Purchase Date shall neither limit nor require the Participant’s acquisition of Common Stock on any subsequent Purchase Date, whether within the same or a different offering period.
A.Grant of Purchase Right.A Participant shall be granted a separate purchase right for each offering period in which he or she participates. The purchase right shall be granted on the Participant’s Entry Date into the offering period. Unless the Plan Administrator determines otherwise prior to the start dateSections 141 and 242 of the applicable offering period and subject to the limitations of Article VIII below, each purchase right granted for an offering period shall provide the Participant with the right to purchase up to 2,000 shares of Common Stock in the aggregate on each Purchase Date applicable to all offering periods in which the Participant is enrolled for a maximum of 8,000 shares of Common Stock purchasable in any single offering period. The Participant shall execute a stock purchase agreement embodying such terms and such other provisions (not inconsistent with the Plan) as the Plan Administrator may deem advisable.
Under no circumstances shall purchase rights be granted under the Plan to any Eligible Employee if such individual would, immediately after the grant, own (within the meaning of Code Section 424(d)) or hold outstanding options or other rights to purchase, stock possessing five percent (5%) or moreGeneral Corporation Law of the total combined voting power or valueState of all classesDelaware, adopted resolutions further amending its Seventh Amended and Restated Certificate of stockIncorporation as follows:
Corporation’s Seventh Amended and Restated Certificate of Incorporation be, and it hereby is, amended and restated to read in its entirety as follows:
C.Purchase Price.The purchase price per share at which Common Stock will be purchased on the Participant’s behalf on each Purchase Date within the offering period will be established by the Plan Administrator prior to the start of that offering period, but in no event shall such purchase price be less than eighty-five percent (85%) of thelower of (i) the Fair Market Value per share of Common Stock on the Participant’s Entry Date into that offering period or (ii) the Fair Market Value per share of Common Stock on that Purchase Date.
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D.Number of Purchasable Shares. The number of shares of Common Stock purchasable by a Participant on each Purchase Date during the offering period shall be the number of whole shares obtained by dividing the amount collected from the Participant through payroll deductions or other permitted form of contribution during the Purchase Interval ending with that Purchase Date by the purchase price in effect for the Participant for that Purchase Date. However, the maximum number of shares of Common Stock purchasable per Participant on any one Purchase Date under all offerings in which the Participant is enrolled shall not exceed Two Thousand (2,000) shares, subject to periodic adjustments in the event of certain changes in the Corporation’s capitalization. In addition, the maximum number of shares of Common Stock purchasable in total by all Participants on any one Purchase Date shall not exceed Two Hundred Thousand (200,000) shares, subject to periodic adjustments in the event of certain changes in the Corporation’s capitalization. However, the Plan Administrator shall have the discretionary authority, exercisable prior to the start of any offering period under the Plan, to increase or decrease the limitations to be in effect for the number of shares purchasable per Participant (and the corresponding maximum number of shares purchasable per Participant for that offering period) and in total by all Participants on each Purchase Date within that offering period.
E.Excess Payroll Deductions/Contributions. Any payroll deductions or other form of contribution not applied to the purchase of shares of Common Stock on any Purchase Date because they are not sufficient to purchase a whole share of Common Stock shall be held for the purchase of Common Stock on the next Purchase Date. However, any payroll deductions or other permitted form of contribution not applied to the purchase of Common Stock by reason of the limitation on the maximum number of shares purchasable per Participant or in the aggregate on the Purchase Date shall be promptly refunded.
F.Suspension of Payroll Deductions/Contributions.In the event that a Participant is, by reason of the accrual limitations in Article VIII, precluded from purchasing additional shares of Common Stock on one or more Purchase Dates during the offering period in which he or she is enrolled, then no further payroll deductions or other form of contribution permitted for that offering period shall be collected from such Participant with respect to those Purchase Dates. The suspension of such deductions or contributions shall not terminate the Participant’s purchase right for the offering period in which he or she is enrolled, and payroll deductions or other form of contribution shall automatically resume on behalf of such Participant once he or she is again able to purchase shares during that offering period in compliance with the accrual limitations of Article VIII.
G.Termination of Purchase Right. The following provisions shall govern the termination of outstanding purchase rights:
(i) A Participant may withdraw from the offering period in which he or she is enrolled by filing the appropriate form with the Plan Administrator (or its designate) at any time prior to the next scheduled Purchase Date in that offering period, and no further payroll deductions or other permitted form of contribution shall be collected from the Participant with respect to the offering period. Any payroll deductions or other permitted contributions collected during the Purchase Interval in which such withdrawal occurs shall, at the Participant’s election, be immediately refunded or held for the purchase of shares on the next Purchase Date. If no such election is made at the time of such withdrawal, then the payroll deductions or other permitted form of contribution collected with respect to the Purchase Interval in which such withdrawal occurs shall be refunded as soon as possible.
(ii) The Participant’s withdrawal from the offering period shall be irrevocable, and the Participant may not subsequently rejoin that offering period. In order to resume participation in any subsequent offering period, such individual mustre-enroll in the Plan (by making a timely filing of the prescribed enrollment forms) on or before his or her scheduled Entry Date into that offering period.
(iii) Should the Participant cease to remain an Eligible Employee for any reason (including death, disability or change in status) while his or her purchase right remains outstanding, then that
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purchase right shall immediately terminate, and all of the Participant’s payroll deductions or other permitted contributions for the Purchase Interval in which the purchase right so terminates shall be immediately refunded. However, should the Participant cease to remain in active service by reason of an approved unpaid leave of absence, then the Participant shall have the right, exercisable up until the last business day of the Purchase Interval in which such leave commences, to (a) withdraw all the payroll deductions or other permitted contributions collected to date on his or her behalf for that Purchase Interval or (b) have such funds held for the purchase of shares on his or her behalf on the next scheduled Purchase Date. In no event, however, shall any further payroll deductions or other permitted form of contribution be collected on the Participant’s behalf during such leave. Upon the Participant’s return to active service (x) within three (3) months following the commencement of such leave or (y) prior to the expiration of any longer period for which such Participant is provided with reemployment rights by statute or contract, his or her payroll deductions or other permitted form of contribution under the Plan shall automatically resume at the rate in effect at the time the leave began, unless the Participant withdraws from the Plan prior to his or her return. An individual who returns to active employment following a leave of absence which exceeds in duration the applicable (x)��or (y) time period will be treated as a new Employee for purposes of subsequent participation in the Plan and must accordinglyre-enroll in the Plan (by making a timely filing of the prescribed enrollment forms) on or before his or her scheduled Entry Date into the offering period.
H.Change in Control.Each outstanding purchase right shall automatically be exercised, immediately prior to the effective date of any Change in Control, by applying the payroll deductions or other permitted contributions of each Participant for the Purchase Interval in which such Change in Control occurs to the purchase of whole shares of Common Stock at the purchase price per share in effect for that Purchase Internal pursuant to the Purchase Price provisions of Paragraph B of this Article VII. However, the applicable limitation on the number of shares of Common Stock purchasable per Participant shall continue to apply to any such purchase, but not the limitation applicable to the maximum number of shares of Common Stock purchasable in total by all Participants.
The Corporation shall use reasonable efforts to provide at least ten (10)-days prior written notice of the occurrence of any Change in Control, and Participants shall, following the receipt of such notice, have the right to terminate their outstanding purchase rights prior to the effective date of the Change in Control.
I.Proration of Purchase Rights.Should the total number of shares of Common Stock to be purchased pursuant to outstanding purchase rights on any particular date exceed the number of shares then available for issuance under the Plan, the Plan Administrator shall make apro-rata allocation of the available shares on a uniform and nondiscriminatory basis, and the payroll deductions or other permitted form of contribution of each Participant, to the extent in excess of the aggregate purchase price payable for the Common Stockpro-rated to such individual, shall be refunded.
J.ESPP Broker Account. The shares purchased on behalf of each Participant shall be deposited directly into a brokerage accountstock which the Corporation shall establish forhave authority to issue is three hundred twenty-five million (325,000,000), consisting of five million (5,000,000) shares of Preferred Stock, par value $0.01 per share (the “Preferred Stock”), and three hundred twenty million (320,000,000) shares of Common Stock, par value $0.01 per share (the “Common Stock”).”
The foregoing procedures shall not in any way limit when the Participant may sell his or her shares.Those procedures are designed solely to assure that any sale of shares prior to the satisfaction of the required holding period is made through the ESPP Broker Account. In addition, the Participant may request a
B-6.
stock certificate or share transfer from his or her ESPP Broker Account prior to the satisfaction of the required holding period should the Participant wish to make a gift of any shares held in that account. However, shares may not be transferred (either electronically or in certificate form) from the ESPP Broker Account for use as collateral for a loan, unless those shares have been held for the required holding period.
The foregoing procedures shall apply to all shares purchased by the Participant under the Plan, whether or not the Participant continues in Employee status.
K.Assignability. The purchase right shall be exercisable only by the Participant and shall not be assignable or transferable by the Participant.
L.Stockholder Rights.A Participant shall have no stockholder rights with respect to the shares subject to his or her outstanding purchase right until the shares are purchased on the Participant’s behalfwas duly adopted in accordance with the provisions of the Plan and the Participant has become a holder of recordSection 242 of the purchased shares.
A. No Participant shall be entitled to accrue rights to acquire Common Stock pursuant to any purchase right outstanding under the Plan if and to the extent such accrual, when aggregated with (i) rights to purchase Common Stock accrued under any other purchase right granted under the Plan and (ii) similar rights accrued under other employee stock purchase plans (within the meaning of Code Section 423) of theGeneral Corporation or any Corporate Affiliate, would otherwise permit such Participant to purchase more than Twenty-Five Thousand Dollars ($25,000.00) worth of stock of the Corporation or any Corporate Affiliate (determined on the basis of the Fair Market Value per share on the date or dates such rights are granted) for each calendar year such rights are at any time outstanding.
B. For purposes of applying such accrual limitations to the purchase rights granted under the Plan, the following provisions shall be in effect:
(i) The right to acquire Common Stock under each outstanding purchase right shall accrue in a series of installments on each successive Purchase Date during the offering period on which such right remains outstanding.
(ii) No right to acquire Common Stock under any outstanding purchase right shall accrue to the extent the Participant has already accrued in the same calendar year the right to acquire Common Stock under one or more other purchase rights at a rate equal to Twenty-Five Thousand Dollars ($25,000.00) worth of Common Stock (determined on the basis of the Fair Market Value per share on the date or dates of grant) for each calendar year such rights were at any time outstanding.
C. If by reason of such accrual limitations, any purchase right of a Participant does not accrue for a particular Purchase Interval, then the payroll deductions or other permitted form of contribution which the Participant made during that Purchase Interval with respect to such purchase right shall be promptly refunded.
D. In the event there is any conflict between the provisions of this Article VIII and one or more provisions of the Plan or any instrument issued thereunder, the provisions of this Article VIII shall be controlling.
A. The Plan shall become effective for the offering period commencing on the Effective Date; provided, however, that (i) the purchase rights for that initial offering period shall be subject to the
B-7.
provisions of Paragraph E of Article IV and (ii) no purchase rights granted under the Plan shall be exercised, and no shares of Common Stock shall be issued hereunder, until the Corporation shall have complied with all applicable requirements of the 1933 Act (including the registration of the shares of Common Stock issuable under the Plan on a FormS-8 registration statement filed with the Securities and Exchange Commission), all applicable listing requirements of any Stock Exchange (or the Nasdaq Stock Market, if applicable) on which the Common Stock is listed for trading and all other applicable requirements established by law or regulation.
B. The Plan shall serve as the successor to the Predecessor Plan, and no further offering periods under the Predecessor Plan shall commence after November 1, 2009.
C. Unless sooner terminated by the Board, the Plan shall terminate upon the earliest of (i) the last business day in April 2020, (ii) the date on which all shares available for issuance under the Plan shall have been sold pursuant to purchase rights exercised under the Plan or (iii) the date on which all purchase rights are exercised in connection with a Change in Control. No further purchase rights shall be granted or exercised, and no further payroll deductions or other forms of contribution shall be collected, under the Plan following such termination.
A. The Board may alter or amend the Plan at any time to become effective as of the start date of the next offering period thereafter under the Plan. In addition, the Board may suspend or terminate the Plan at any time to become effective immediately following the close of any Purchase Interval.
B. In no event may the Board effect any of the following amendments or revisions to the Plan without the approval of the Corporation’s stockholders: (i) increase the number of shares of Common Stock issuable under the Plan, except for permissible adjustments in the event of certain changes in the Corporation’s capitalization or (ii) modify the eligibility requirements for participation in the Plan.
A. All costs and expenses incurred in the administration of the Plan shall be paid by the Corporation; however, each Plan Participant shall bear all costs and expenses incurred by such individual in the sale or other disposition of any shares purchased under the Plan.
B. Nothing in the Plan shall confer upon the Participant any right to continue in the employ of the Corporation or any Corporate Affiliate for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Corporate Affiliate employing such person) or of the Participant, which rights are hereby expressly reserved by each, to terminate such person’s employment at any time for any reason, with or without cause.
C. The provisions of the Plan shall be governed by the lawsLaw of the State of California without resort to that State’sDelaware.
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Schedule A
Corporations Participating in
the Sangamo Therapeutics, Inc. 2010
Employee Stock Purchase Plan
Sangamo Therapeutics, Inc.
APPENDIX
The following definitions shall has caused this Fourth Certificate of Amendment to be in effect under the Plan:
A.2018 Annual Meeting means the date of the annual meeting of stockholders of the Corporation held in 2018.
B.Base Salary shall mean the regular base salary paid to a Participantsigned by one or more Participating Companies during such individual’s period of participation in one or more offering periods under the Plan. Base Salary shall be calculated before deduction of (i) any income or employment tax withholdings or (ii) any contributions made by the Participant to any Code Section 401(k) salary deferral plan or any Code Section 125 cafeteria benefit program now or hereafter established by the Corporation or any Corporate Affiliate. However, Base Salary shallnot include (i) any overtime payments, bonuses, commissions, profit-sharing distributions or other incentive-type payments received during the Participant’s period of participation or (ii) any contributions made by the Corporation or any Corporate Affiliate on the Participant’s behalf to any employee benefit or welfare plan now or hereafter established (other than Code Section 401(k) or Code Section 125 contributions deducted from his or her Base Salary).
C.Board shall mean the Corporation’s Board of Directors.
D.Cash Earningsshall mean (i) the regular base salary paid to a Participant by one or more Participating Companies during such individual’s period of participation in one or more offering periods under the Plan and (ii) any overtime payments, bonuses, commissions, profit-sharing distributions and other incentive-type payments received during such period. Cash Earnings shall be calculated before deduction of (A) any income or employment tax withholdings or (B) any contributions made by the Participant to any Code Section 401(k) salary deferral plan or Code Section 125 cafeteria benefit program now or hereafter established by the Corporation or any Corporate Affiliate. Cash Earnings shall not include any contributions made on the Participant’s behalf by the Corporation or any Corporate Affiliate to any employee benefit or welfare plan now or hereafter established (other than Code Section 401(k) or Code Section 125 contributions deducted from such Cash Earnings).
E.Change in Control shall mean a change in ownership or control of the Corporation effected through any of the following transactions:
(i) a merger, consolidation or other reorganization approved by the Corporation’s stockholders,unless securities representing more than fifty percent (50%) of the total combined voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned, directly or indirectly and in substantially the same proportion, by the persons who beneficially owned the Corporation’s outstanding voting securities immediately prior to such transaction,
(ii) a stockholder-approved sale, transfer or other disposition of all or substantially all of the Corporation’s assets in complete liquidation or dissolution of the Corporation, or
(iii) the closing of any transaction or series of related transactions pursuant to which any person or any group of persons comprising a “group” within the meaning of Rule13d-5(b)(1) of the 1934 Act (other than the Corporation or a person that, prior to such transaction or series of related transactions, directly or indirectly controls, is controlled by or is under common control with, the Corporation) becomes directly or indirectly the beneficial
owner (within the meaning of Rule13d-3 of the 1934 Act) of securities possessing (or convertible into or exercisable for securities possessing) more than fifty percent (50%) of the total combined voting power of the Corporation’s securities (as measured in terms of the power to vote with respect to the election of Board members) outstanding immediately after the consummation of such transaction or series of related transactions, whether such transaction involves a direct issuance from the Corporation or the acquisition of outstanding securities held by one or more of the Corporation’s existing stockholders.
F.Code shall mean the Internal Revenue Code of 1986, as amended.
G.Common Stock shall mean the Corporation’s common stock.
H.Corporate Affiliate shall mean any parent or subsidiary corporation of the Corporation (as determined in accordance with Code Section 424), whether now existing or subsequently established.
I.Corporation shall mean Sangamo Therapeutics, Inc., a Delaware corporation, and any corporate successor to all or substantially all of the assets or voting stock of Sangamo Therapeutics, Inc., which shall assume the Plan.
J.Effective Date shall be May 3, 2010. Any Corporate Affiliate that becomes a Participating Corporation after such Effective Date shall designate a subsequent Effective Date with respect to its employee-Participants.
K.Eligible Employee shall mean any person who is employed by a Participating Corporation on a basis under which he or she is regularly expected to render more than twenty (20) hours of service per week for more than five (5) months per calendar year for earnings that are considered wages under Code Section 3401 (a); provided, however, that the Plan Administrator may, prior to the start of the applicable offering period, waive one or both of the twenty (20) hour and five (5) month service requirements.
L.Entry Date shall mean the date an Eligible Employee first commences participation in the offering period in effect under the Plan. The earliest Entry Date under the Plan shall be the Effective Time.
M.Fair Market Valueper share of Common Stock on any relevant date shall be the closing price per share of Common Stock at the close of regular hours trading (i.e., before after-hours trading begins) on date on question on the Stock Exchange serving as the primary market for the Common Stock, as such price is reported by the National Association of Securities Dealers (if primarily traded on the Nasdaq Select or Global Select Market) or as officially quoted in the composite tape of transactions on any other Stock Exchange on which the Common Stock is then primarily traded. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.
N.1933 Act shall mean the Securities Act of 1933, as amended.
O.1934 Act shall mean the Securities Exchange Act of 1934, as amended.
P.Participant shall mean any Eligible Employee of a Participating Corporation who is actively participating in the Plan.
Q.Participating Corporation shall mean the Corporation and such Corporate Affiliate or Affiliates as may be authorized from time to time by the Board to extend the benefits of the Plan to their Eligible Employees. The Participating Corporations in the Plan are listed in attached Schedule A.
A-2.
R.Plan shall mean the Sangamo Biosciences, Inc. 2010 Employee Stock Purchase Plan, as set forth in[Title] this document.
S.Plan Administrator shall mean the committee of two (2) or more Board members appointed by the Board to administer the Plan.
T.Predecessor Plan shall mean the Corporation’s 2000 Employee Stock Purchase Plan.
U.Purchase Date shall mean the last business day of each Purchase Interval.
V.Purchase Interval shall mean each successive six (6)-month period within the offering period at the end of which there shall be purchased shares of Common Stock on behalf of each Participant; provided, however, that the Plan Administrator may, prior to the start of the applicable offering period, designate a different duration for the Purchase Intervals within that offering period.
W.Stock Exchangeshall mean the American Stock Exchange, the Nasdaq Global or Global Select Market or the New York Stock Exchange.
A-3.
Electronic Voting Instructions Available 24 hours a day, 7 days a week! Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the Internet or telephone must be received by 1:00 a.m., EDT, on June 11, 2018. Vote by Internet • Go to www.envisionreports.com/SGMO • Or scan the QR code with your smartphone • Follow the steps outlined on the secure website Vote by telephone • Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone • Follow the instructions provided by the recorded message Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Annual Meeting Proxy Card 1234 5678 9012 345 qIF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q A Proposals — The Board of Directors recommends a vote FOR all the nominees listed, FOR Proposal 2, FOR Proposal 3, FOR Proposal 4 and FOR Proposal 5. 1. To elect eight (8) directors to serve on the Board of Directors until the next Annual Meeting of Stockholder to be held in 2019 or until their successors are duly elected and qualified; + Nominees: For Against Abstain For Against Abstain For Against Abstain 03 - Stephen G. Dilly, 01 - H. Stewart Parker 02 - Robert F. Carey M.B.B.S., Ph.D. 05 - Alexander D. Macrae, 04 - Roger Jeffs, Ph.D. 06 - Steven J. Mento, Ph.D. M.B., Ch.B., Ph.D. 07 - Saira Ramasastry 08 - Joseph S. Zakrzewski For Against Abstain For Against Abstain 2. To approve, on an advisory basis, the compensation of the Company’s 3. To approve the Sangamo Therapeutics, Inc. named executive officers, as described in the Proxy Statement. 2018 Equity Incentive Plan. 4. To approve an amendment to the Sangamo Therapeutics, Inc. 2010 5. To ratify the appointment of Ernst & Young LLP as Employee Stock Purchase Plan (the “Purchase Plan”) to increase the our independent registered public accounting firm number of shares of our common stock reserved for issuance under the for the year ending December 31, 2018. Purchase Plan by 2,500,000 shares. B Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, GIVE FULL NAME AND TITLE AS SUCH. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD.20 .
Sangamo Therapeutics, Inc. | ||||
By: | ||||
[Name] | ||||
[Title] |
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Proxy — Sangamo Therapeutics, Inc. + PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS, JUNE 11, 2018 The undersigned hereby appoints Alexander D. Macrae, M.B., Ch.B., Ph.D., Kathy Y. Yi and Heather D. Turner, and each of them, as proxies of the undersigned, with full power of substitution, to vote all shares of Sangamo Therapeutics, Inc. Common Stock which the undersigned is entitled to vote on all matters which may properly come before the 2018 Annual Meeting of Stockholders of Sangamo Therapeutics, Inc., to be held at 501 Canal Boulevard, Richmond, California 94804 on June 11, 2018 at 9:00 a.m. PDT or at any postponement or adjournment thereof. THE SHARES REPRESENTED BY THIS PROXY CARD WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE, BUT IF NO SPECIFICATION IS MADE THEY WILL BE VOTED FOR ALL NOMINEES, FOR PROPOSAL 2, FOR PROPOSAL 3, FOR PROPOSAL 4 AND FOR PROPOSAL 5 AND AT THE DISCRETION OF THE PROXY ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING. (SEE PROXY STATEMENT FOR DISCUSSION OF ITEMS) PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ACCOMPANYING ENVELOPE. CONTINUED AND TO BE SIGNED ON REVERSE SIDE C Non-Voting Items Change of Address — Please print new address below. Meeting Attendance Mark box to the right if you plan to attend the Annual Meeting. IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD. +