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.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a Notice containing voting instructions from that organization rather than from us. Simply follow the voting instructions in the Notice to ensure that your vote is counted. Alternatively, you may vote by telephone or over the Internet as instructed by your broker or bank. To vote in person at the Annual Meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker, bank or other agent included with these proxy materials, or contact that organization to request a proxy form.
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. |
How many votes do I have?
On each matter to be voted upon, you have one vote for each share of common stock you owned as of
April 17, 2018.March 20, 2020.
If I am a stockholder of record and I do not vote, or if I return a proxy card or otherwise vote without giving specific voting instructions, what happens?
If you are a stockholder of record and do not vote through the Internet, by telephone, by completing a proxy card
that may be delivered to youoror in person at the Annual Meeting, your shares will not be voted.
If you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted “For” each of the proposals, including for each nominee for director. If any other matter is properly presented at the meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.
If I am a beneficial owner of shares held in street name and I do not provide my broker or bank with voting instructions, what happens?
If you are a beneficial owner of shares held in street name and you do not instruct your broker, bank or other agent how to vote your shares, your broker, bank or other agent may still be able to vote your shares in its discretion. In this regard, under the rules of the New York Stock Exchange,
(“NYSE”),or NYSE, brokers, banks and other securities intermediaries that are subject to NYSE rules may use their discretion to vote your “uninstructed” shares with respect to matters considered to be “routine” under NYSE rules, but not with respect to
“non-routine” “non-routine” matters. In this regard, we
believehave been advised by the NYSE that
ProposalsProposal Nos. 1, 2
3 and
43 are considered to be
“non-routine” “non-routine” under NYSE rules meaning that your broker may not vote your shares on those proposals in the absence of your voting instructions.
However,We have also been advised by the NYSE that Proposal
No.Nos. 4 and 5
isare considered
a “routine”
mattermatters under NYSE rules, meaning that if you do not return voting instructions to your broker by its deadline, your shares may be voted by your broker in its discretion on
Proposal No. 5.such proposals.
If you area beneficial owner of shares held in street name,, to ensure your shares are voted in the way you would prefer, youmustprovide 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.
Who is paying for this proxy solicitation?
We will pay for the entire cost of soliciting proxies. In addition to these proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies.
In addition, we have retained Innisfree M&A Incorporated, a proxy solicitation firm, to assist in the solicitation of proxies for a fee of approximately $15,000, plus reimbursement of certain costs and expenses. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.
What does it mean if I receive more than one
Notice?set of proxy materials, or more than one Notice, or combination thereof?
If you receive more than one
set of proxy materials, or more than one Notice,
or combination thereof, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions on
theeach set of proxy materials or Notices to ensure that all of your shares are voted.
Can I change my vote after submitting my proxy?
Stockholder of Record: Shares Registered in Your Name
Yes. You can revoke your proxy at any time before the final vote at the meeting. If you are the record holder of your shares, you may revoke your proxy in any one of the following ways:
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.
May 15, 2020.You may attend the Annual Meeting and vote in person. Simply attending the meetingAnnual Meeting will not, by itself, revoke your proxy.
Your most current proxy card or telephone or Internet proxy is the one that is counted.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If your shares are held by your broker, bank or other agent, you should follow the instructions provided by your broker, bank or other agent.
Votes will be counted by the inspector of election appointed for the meeting, who will separately count votes “For” and “Against,” abstentions and, if applicable, broker
non-votes.
What are “broker
non-votes?”As discussed above, when a beneficial owner of shares held in street name does not give voting instructions to his or her broker, bank or other securities intermediary holding his or her shares as to how to vote on matters deemed to be
“non-routine” “non-routine” under NYSE rules, the broker, bank or other such agent cannot vote the shares. These un-voted shares are counted as “broker
non-votes.” Proposals We have been advised by the NYSE that Proposal Nos. 1, 2
3 and
43 are considered to be
“non-routine” “non-routine” under NYSE rules and we therefore expect broker
non-votes to exist in connection with those proposals.
As a reminder, if you area beneficial owner of shares held in street name,, to ensure your shares are voted in the way you would prefer, youmustprovide 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.
How many votes are needed to approve each proposal? How are abstentions and broker
non-votes treated?
The following table summarizes the minimum vote needed to approve each proposal and the effect of abstentions and broker
non-votes. |
| | | | | | | | |
| | | | | | | | |
Number | | Proposal Description | | Vote Required for Approval | | Abstentions | | Votes |
| | | | |
| 1 | | Election of Directors directors | | “For”As this is an uncontested election, each director nominee must receive “For” votes from the majority of the votes cast with respect to each respective nominee.on his or her election (i.e., the number of votes cast “For” a nominee’s election must exceed the number of votes cast “Against” that nominee’s election). Pursuant to our SecondThird Amended and Restated Bylaws, as amended, (our “Bylaws”),or our Bylaws, any incumbent director who does not receive the required majority votes at the Annual Meeting will promptly tender his or her resignation to the Board, and the Board, after considering the recommendation of the NominationNominating and Corporate Governance Committee regarding such resignation, shallwill determine whether to accept or reject the resignation. For a more detailed description of the majority voting process, see “Proposal No. 1: Election of Directors—General” below.
| | 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 stock having voting powershares present in person or represented by proxy at the Annual Meeting. Meeting and entitled to vote on this proposal. | | Against | | No effect |
| | | | | | | | |
| 3 | | Approval of the amendment and restatement of the 2018 Plan | | “For” votes from holders of a majority of to, among other things, increase the stock having voting power present in person or represented by proxy at the Annual Meeting.
| | Against | | No effect |
| | | | |
4 | | Approval of an amendment to the Purchase Plan to increase theaggregate number of shares of our common stock reserved for issuance under the Purchase2018 Plan by 2,500,0009,900,000 shares
| | “For” votes from holders of a majority in voting power of the stock having voting powershares present in person or represented by proxy at the Annual Meeting. Meeting and entitled to vote on this proposal. | | 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, 2018 2020 | | “For” votes from holders of a majority in voting power of the stock having voting powershares present in person or represented by proxy at the Annual Meeting. Meeting and entitled to vote on this proposal. | | Against | | Brokers have discretion to vote(1) |
___________________
| |
| (1) | ThisWe have been advised by the NYSE that this proposal is considered a “routine” matter under NYSE rules. Accordingly, if you hold your shares in street name and do not provide voting instructions to your broker, bank or other agent that holds your shares, your broker, bank or other agent has discretionary authority under NYSE rules to vote your shares on this proposal. |
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
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if
stockholdersholdingatstockholders holding at least a majority
in voting power of the outstanding shares entitled to vote are present at the meeting in person or represented by proxy. On the record date, there were
87,145,700 sharesoutstanding116,211,355 shares outstanding and entitled to vote.
Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the meeting. Abstentions and broker
non-votes will be counted towards the quorum requirement. If there is no quorum, the Chair of the Board may adjourn the meeting to another date without a stockholder vote.
How can I find out the results of the voting at the Annual Meeting?
Preliminary voting results will be announced at the Annual Meeting. In addition, final voting results will be published in a current report on Form
8-K that we expect to file within four business days after the Annual Meeting. If final voting results are not available to us in time to file a
Form 8-K within four business days after the meeting, we intend to file a
Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional
Form 8-K to publish the final results.
When are stockholder proposals and director nominations due for next year’s Annual Meeting?
To be considered for inclusion in next year’s proxy materials, your proposal must be submitted in writing by December
27, 2018,, 2020, to our Secretary at
501 Canal7000 Marina Boulevard,
Richmond,Brisbane, California
94804,94005, and you must comply with all applicable requirements of Rule
14a-8 promulgated under the Securities Exchange Act of 1934, as amended,
(the “Exchange Act”).or the Exchange Act.
Pursuant to our Bylaws, if you wish to bring a proposal before the stockholders or nominate a director at the
20192021 Annual Meeting of stockholders, but you are not requesting that your proposal or nomination be included in next year’s proxy materials, you must notify our Secretary, in writing, not later than the close of business on
March 13, 2019February 17, 2021 nor earlier than the close of business on
February 11, 2019.January 18, 2021. However, if our
20192021 Annual Meeting of stockholders is not held between
May 12, 2019April 18, 2021 and
July 11, 2019,June 17, 2021, to be timely, notice by the stockholder must be received not later than the 10th day following the day on which the first public announcement of the date of the
20192021 Annual Meeting is made or the notice of the meeting is mailed, whichever first occurs. You are also advised to review our Bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations.
The chair of the Annual Meeting may determine, if the facts warrant, that a matter has not been properly brought before the meeting and, therefore, may not be considered at the meeting. In addition, the proxy solicited by the Board for the 20192021 Annual Meeting of Stockholders will confer discretionary voting authority with respect to any proposal (i) presented by a stockholder at that meeting for which we have not been provided with timely notice and (ii) made in accordance with our Bylaws, if (x) the 20192021 proxy statement briefly describes the matter and how management’s proxy holders intend to vote on it, and (y) the stockholder does not comply with the requirements of Rule14a-4(c)(2) promulgated under the Exchange Act.
Our Board
currently consists of
eightnine directors and
one vacancy due to the resignation of William R. Ringo effective as of January 1, 2018. Therethere are
eightnine nominees for director this year.
Proxies may not be voted for a greater number of persons than the number of nominees named in this Proxy Statement. Each director to be elected and qualified will
hold serve until the next annual meeting of stockholders
orand until a successor for such director is duly elected and qualified, or until the
earlier death, resignation or removal of such director. The nominees for election have agreed to serve if elected, and management has no reason to believe that such nominees will be unavailable to serve. In the event the nominees are unable or decline to serve as directors at the time of the
annual meeting,Annual Meeting, the proxies will be voted for any nominee who may be designated by the present Board of Directors to fill the vacancy.
Proxies may not be voted for a greater number of persons than the number of nominees named. Unless otherwise instructed, the proxy holders will vote the proxies received by them FOR the nominees named below.
Each of the
eightnine nominees, other than
Roger Jeffs,John H. Markels, Ph.D.
, and
Joseph Zakrzewski,James R. Meyers, has been previously elected by
theour stockholders. Dr.
Jeffs’ and Mr. Zakrzewski’s candidacies wereMarkels was initially recommended to the Nominating and Corporate Governance Committee by
theour Chief Executive Officer,
upon the recommendation of another executive officer. Mr. Meyers was originally identified as a director candidate by a third-party recruiting firm and
another member ofthen recommended by our Chief Executive Officer to the Nominating and Corporate Governance Committee. While the Nominating and Corporate Governance Committee and the Board chose to nominate Alexander D. Macrae, our Chief Executive Officer, for election to the Board for the reasons set forth in his biography below, Dr. Macrae’s employment agreement also provides that the Board shall nominate Dr. Macrae for election as a member of the Board at each annual meeting of stockholders occurring while Dr. Macrae’s employment agreement is in effect.
Each of the
eightnine nominees set forth in this Proxy Statement will be elected by the majority of the votes cast with respect to such
nominee.nominee, which means that the number of votes “For” a nominee’s election must exceed the number of votes “Against” that nominee (with abstentions and broker non-votes not counted as either a “For” or “Against” vote for that nominee’s election). If an incumbent director does not receive the required majority vote, the director
shallis required under our Bylaws to promptly tender his or her resignation to the Board. Within 90 days after the
annual meeting,Annual Meeting, the Nominating and Corporate Governance Committee of the Board will make a recommendation to the Board of Directors as to whether to accept or reject the resignation. The Board will act by taking into account such committee’s recommendation. If the Board does not accept the resignation, the Board is required to publicly disclose its decision and the rationale behind the decision.
The following includes a brief biography of each nominee for director, including their respective ages as of
April 24, 2018.March 20, 2020. Each biography includes information regarding the specific experience, qualifications, attributes or skills that led the Nominating and Corporate Governance Committee and the Board to determine that the applicable nominee should serve as a member of the Board as of the date of this proxy statement.
Alexander D. Macrae, M.B., Ch.B., Ph.D., age 5557, has served as our President and Chief Executive Officer and as a member of our Board of Directors since June 2016. Dr. Macrae also serves on the board of directors of 4D Pharma plc. He has over twenty years of experience in the pharmaceutical industry most recently serving as the Global Medical Officer of Takeda Pharmaceuticals, from 2012 to March 2016, where he established and led the Global Medical Office, which encompasses medical affairs, regulatory affairs, pharmacovigilance, outcomes research and epidemiology, quantitative sciences and knowledge and informatics. From 2001 to 2012, Dr. Macrae held roles of increasing responsibility at GlaxoSmithKline, including Senior Vice President, Emerging Markets Research and Development, (“or R&D”),&D, from 2009 to 2012. In that position, he provided expertise and resources to create afirst-of-its-kind group to expand GSK’s global reach by providing R&D strategies, clinical development and regulatory resources to enter emerging markets and Asia-Pacific. From 2007 to 2008, he was Vice President, Business Development. In that position, he was responsible for scientific assessment and business development project leadership for the neurology, psychiatry, cardiovascular and metabolic therapeutic areas. Earlier in his career, he worked for SmithKline Beecham, where he was responsible for clinical development in the therapeutic areas of neurology
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.
Robert F. Carey, age 59,61, has served as a member of our Board of Directors since June 2016. Mr. Carey has beenserved as executive vice president, chief business officer for Horizon Pharma plc, a biopharmaceutical company, sincefrom March 2014.2014 to October 2019. Prior to that, he served as managing director and head of the healthcare investment banking group at JMP Securities LLC, a full-service investment bank from March 2003 to March 2014. Prior to JMP, Mr. Carey was a managing director in the healthcare
groups at Dresdner Kleinwort Wasserstein and Vector Securities International, Inc. He has also held roles at Shearson Lehman Hutton and Ernst & Whinney. Mr. Carey
has servedalso serves on the board of directors of
ArgosBeyond Air, Inc. (formerly AIT Therapeutics, Inc.
, a life science company, since September 2015.). Mr. Carey received his B.S. in accounting from the University of Notre Dame. The Nominating and Corporate Governance Committee and the Board believe that Mr. Carey’s extensive experience and knowledge in the healthcare investment banking industry, particularly with financings, global expansion and other strategic transactions by life-science companies, as well as his role in business development for a public biopharmaceutical company,
will provideprovides the Board with valuable insight and contribution.
Stephen G. Dilly, M.B.B.S., Ph.D., age 58,60, has served as a member of our Board of Directors since March 2010. SinceFrom May 2014 through June 2018 when he retired, Dr. Dilly has served as Chief Executive Officer and a member of the board of directors of Aimmune Therapeutics, Inc. (formerly Allergen Research Corporation), a biotechnology company developing treatments for food allergies. From January 2012 to December 2012, he was Chief Executive Officer of PhotoThera, Inc., a medical device company. From 2006 to December 2011, he served as President and Chief Executive Officer and a member of the board of directors of APT Pharmaceuticals, Inc., a drug development company. From 2007 to 2009, he served as a member of the board of directors of Avigen, Inc., a biopharmaceutical company that merged with MediciNova, Inc. in December 2009. From 2003 to 2006, he served as Chief Medical Officer and Senior Vice President of Development of Chiron BioPharma, a biotechnology company that was later acquired by Novartis International AG. From 1998 to 2003, he held various management positions at Genentech, Inc., including Vice President of Development Sciences from 2002 to 2003 and Vice President of Medical Affairs from 1998 to 2001. From 1988 to 1998, Dr. Dilly held various management positions in drug development with SmithKline Beecham in the U.K. During his career, Dr. Dilly has been closely associated with the development and launch of marketed drugs for many therapeutic areas, including Kytril, Paxil, Kredex, Requip, TNKase, Xolair, Avastin, Raptiva, Tarceva, Lucentis, Cubicin and Cubicin.Palforzia. In 1982 Dr. Dilly received an M.B.B.S., the equivalent of an M.D. in the United States, from the University of London in the U.K. and a Ph.D. in cardiac physiology from University of London in 1988. Dr. Dilly brings medical expertise and significant drug development experience to our Board. The Nominating and Corporate Governance Committee and the Board believe that Dr. Dilly’s extensive experience in all stages of drug development, from project prioritization through clinical trial design and data analysis to product launch, provides the Board with valuable insight into this process as the Company continues to advance and develop our pipeline of novel genomic and cell therapy assets.Roger Jeffs,
John H. Markels, Ph.D.,age 56,54, has served as a member of our Board of Directors since June 2017. Prior to his retirementFebruary 2020. Dr. Markels has over 30 years of leadership experience in 2016, Dr. Jeffsthe pharmaceutical industry. Since January 2019, he has served as President andco-Chief Executive Officer of United Therapeutics Corp.Global Vaccines at Merck & Co., Inc., or Merck, where he workedleads an integrated team dedicated to discovery and development, supply and access, and global marketing and long-term strategy for 18 years, joining the companyvaccines portfolio. Earlier roles at Merck included President, Latin America from January 2018 to January 2019, SVP, Global Human Health Business Strategy from January 2017 to December 2017, Managing Director, Mexico from November 2013 to January 2017, as well as a long career in itsstart-up phase in 1998 as Director, Research, Development and Medical and serving as President and Chief Operating Officer from 2001 to 2014. He has over 25 years of experience in the biopharmaceutical industry in R&D, clinical development, regulatory and medical affairs. While at United Therapeutics, Dr. Jeffs led the clinical development, regulatory approval and commercialization of six rare disease products and managed the commercial effort that led to a greater than 20% compound annual growth rate (CAGR) and $1.5 billion annual revenue run rate. Prior to joining United Therapeutics, he heldsenior leadership positions in clinicalmajor regions worldwide in manufacturing technology, operations and strategy, business development, at Amgen, Inc.alliance management, and Burroughs Wellcome Co.supply chain. Dr. Jeffs currently also serves as a
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.
James R. Meyers, age 66, 55,has served as a member of our Board of Directors since May 2005. Since July 2005, Dr. MentoNovember 2019. He has over 30 years of commercial leadership experience in the biotechnology industry. Mr. Meyers worked at Gilead Sciences, Inc., or Gilead, from 1996 until his retirement in February 2018. Most recently, he served as President and ChiefGilead’s Executive Officer of Conatus Pharmaceuticals Inc., a biotechnology company engaged in the development of human therapy for liver disease. From 1997 to 2005, he was President and Chief Executive Officer of Idun Pharmaceuticals. From 1992 to 1997, Dr. Mento was an executive officer at Viagene, Inc. In January of 1992 he joined Viagene, Inc. as Vice President of Research and Development,Worldwide Commercial Operations from November 2016 to February 2018, where he was responsible for directing the company’s transition from basic research through initiation of the first company sponsored Phase Iglobal commercial activities, including pricing and Phase II clinical trialsmarket access in North America, Europe, Middle East, Australia and Japan. Mr. Meyers joined Gilead in 1996 where he successfully led several important product launches in the emerging field of gene therapy. In October of 1995, Chiron Corporation acquired Viagene, Inc.,HIV and renamed the company Chiron Viagene, Inc.hepatitis C therapeutic areas. Prior to that, from 1982 to 1992, Dr. MentoGilead, Mr. Meyers held various positions at American Cyanamid Company, the last one being the Director of Viral Vaccine Researchincreasing responsibility with Zeneca Pharmaceuticals and Development at Lederle-Praxis Biologicals, a business unit of American Cyanamid Company. Dr. MentoAstra USA. He currently serves on the boardsboard of BIOCOM, the BIOCOM Institutedirectors of two public companies, Arbutus Biopharma Corporation and the Biotechnology Industry Organization (BIO), as well as a member of the BIO ECS Governing Body, the BIO Health Section Governing Body, the Donald P. Shiley BioScience Center at SDSU Scientific Advisory Board and Cal State San Marcos Advisory Council. Dr. Mento received a B.A., M.S.CytomX Therapeutics, Inc., and he remains an active advisor to several major biopharmaceutical companies. Mr. Meyers holds a Ph.D.B.S. in microbiologyEconomics from Rutgers University. He completed his post-doctoral fellowship in somatic cell genetics at the University of Toronto.Boston College. The Nominating and Corporate Governance Committee and the Board believe that Dr. Mento’s scientific technical background andMr. Meyers’ extensive operationalcommercial leadership experience in the early stages ofbiotechnology industry provides valuable operational, commercial assessment and management skills to the development of biologic drugs provide the Board with expertise in the management and development of our novel genomic and cell therapy assets.Board.
H. Stewart Parker, age 62,64, has been a member of our Board of Directors since June 2014.2014, and has been Chair since June 2017. Ms. Parker has over 30 years of experience in the biotechnology industry. Prior to focusing on boards and consulting, she served as the Chief Executive Officer of The Infectious Disease Research Institute (IDRI), anot-for-profit global health Research institute from March 2011 to December 2013. In 1992, Ms. Parker founded Targeted Genetics Corporation, a publicly traded Seattle-based biopharmaceutical company formed to develop gene-based treatments for acquired and inherited diseases that became a world leader in AAV gene therapy. She held the position of President and Chief Executive Officer and was a member of its board of directors from the company’s inception until November 2008. Prior to founding Targeted Genetics, Ms. Parker served in various capacities at Immunex from August 1981 through December 1991, most recently as Vice President, Corporate Development. From February 1991 to January 1993, Ms. Parker served as President and a Director of Receptech Corporation, a company formed by Immunex in 1989 to accelerate the development of soluble cytokine receptor products. She has served on the board of directors
and the executive committee of BIO, the primary trade organization for the biotechnology industry. She currently serves
as a member ofon the board of directors
for severalfor-profit companies including C3J Therapeutics (formerly C3 Jian Inc),of Armata Pharmaceuticals Inc. and Achieve Life Sciences, Inc.
, StrideBio Inc. and Nexgenia and on the advisory boards of the University of Washington Foundation and College of Arts & Sciences. Ms. Parker received her B.A. and M.B.A. from the University of Washington. The Nominating and Corporate Governance Committee and the Board believe that Ms. Parker’s senior executive experience in AAV gene therapy and biotechnology drug development provides valuable operational, commercial assessment and management skills to the Board.
Saira Ramasastry, age 42,44, has served as a member of our Board of Directors since June 2012. Since April 2009, she has served as Managing Partner of Life Sciences Advisory, LLC, a company that she founded to provide strategic advice, business development solutions and innovative financing strategies for the life science industry. Ms. Ramasastry also serves on the Industry Advisory Board of the Michael J. Fox Foundation for Parkinson’s Research and as business and sustainability lead for the European Prevention of Alzheimer’s Dementia consortium. From August 1999 to March 2009, Ms. Ramasastry was an investment banker with Merrill Lynch & Co., Inc. where she helped establish the biotechnology practice and was responsible for origination of mergers
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.
Karen L. Smith, M.D., Ph.D., M.B.A., L.L.M., age 52, has served on our Board of Directors since June 2018. Dr. Smith is a life sciences thought leader with over 20 years of biopharmaceutical experience bringing drugs into the clinic and through commercialization. She has been a key contributor to the successful development of multiple FDA and EMA approved products in several therapeutic areas, including oncology (Herceptin, Vyxeos), rare disease (Defitelio), cardiology (Irbesartan), dermatology (Voluma, Botox), neuroscience (Abilify) and anti-infectives (Teflaro). Since November 2018, Dr. Smith has been providing consulting services internationally. From May 2019 to January 2020, Dr. Smith served as President and Chief Executive Officer of Medeor Therapeutics, Inc. From June 2018 to May 2019, Dr. Smith served as Chief Executive Officer of Eliminate Cancer, Inc. From April 2015 to May 2018, she served as the Global Head of Research & Development and Chief Medical Officer of Jazz Pharmaceuticals plc, where she built the R&D function into a pipeline of neuroscience and oncology products across all stages of discovery and development. From January 2011 to March 2015, she was Senior Vice President, Global Medical Affairs and Global Therapeutic Area Head (Dermatology) for Allergan, Inc., a multi-specialty health care company. Earlier in her career, she held senior leadership roles at AstraZeneca plc and Bristol Myers Squibb Company. Dr. Smith holds several degrees, including an M.D. from the University of Warwick, a Ph.D. in oncology from the University of Western Australia, an M.B.A. from the University of New England and an L.L.M. (Masters in Law) from the University of Salford. Dr. Smith currently serves on the board of directors of Acceleron Pharma, Inc. and Antares Pharma, Inc. and previously served on the board of directors of Sucampo Pharmaceuticals, Inc. and Forward Pharma A/S. The Nominating and Corporate Governance Committee and the Board believe that Dr. Smith’s extensive executive experience in global research and development, combined with tenure on prior public company boards provides us with access to a valuable skill-set as we translate our science into genomic medicines using our platform technologies in gene editing, gene therapy, gene regulation and cell therapy.
Joseph S. Zakrzewski, age 55,57, has served as a member of our Board of Directors since June 2017. Mr. Zakrzewski has over 25 years of experience in the biopharmaceutical industry with senior leadership experience in R&D, supply chain and manufacturing operations, business development and commercialization. Prior to focusing on serving on boards and investments, from 2010 through 2013, he was Chairman and Chief Executive Officer of Amarin Corporation PLC (formerly Amarin Pharmaceuticals, Inc.), where he led the development and commercialization of the company’s first product, Vascepa. Mr. Zakrzewski previously served as a Venture Partner with Orbimed Advisors LLC, a venture capital firm, and as Chairman, President and CEOChief Executive Officer of Xcellerex, Inc., a privately held company focused on the commercialization of its proprietary manufacturing technology for biotherapeutics and vaccines. Earlier, he served as COOChief Operating Officer of Reliant Pharmaceuticals, Inc. before its acquisition by GlaxoSmithKline in 2007 and held various executive positions at Eli Lilly & Company in the areas of R&D, manufacturing, finance and business development. Mr. Zakrzewski currently serves as a member of the board of directors of various public and private companies, including Acceleron Pharma, Inc., Amarin, Insulet Corporation and Onxeo SA where he serves as Chairman.Amarin. Mr. Zakrzewski received a B.S. in Chemical Engineering and an M.S. in Biochemical Engineering from Drexel University, and an M.B.A. in Finance from Indiana University. The Nominating and Corporate Governance Committee and the Board believe that Mr. Zakrzewski’s significant experience as a Chief Executive Officer and leading a variety of functional areas including supply and manufacturing operations provides the Board with an important set of skills to assist in the oversight of the development of our novel genomic and cell therapy assets.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that the stockholders vote FOR the election of each the nominees listed above.
Stockholder Engagement and Responsiveness
A priority for our Board of Directors is soliciting and listening to the views of our stockholders on a variety of topics, including our business and growth strategy, corporate governance practices and executive compensation matters. In this regard, we regularly engage with our institutional investors, and since our 2019 annual meeting of stockholders, we reached out to investors representing over 30% of our outstanding shares. Our discussions with our investors have been productive and informative, and have provided valuable feedback to our Board of Directors to help ensure that our Board’s decisions are aligned with stockholder objectives.
The Board of Directors has determined that
William R. Ringo was, and each of its
current and nominated directors is independent under applicable listing
standardstandards of
The Nasdaq Stock Market LLC,
(“Nasdaq”),or Nasdaq, except for Dr. Macrae, who is our Chief Executive Officer. There are no family relationships between any of our directors and any of our executive officers.
Board Committees and Meetings
The Board of Directors held 10six meetings and acted by unanimous written consent in lieu of a meeting three times during 2017.2019. The Board of Directors has an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. Each director attended or participated in 75% or more of the aggregate of (i) the total number of meetings of the Board of Directors and (ii) the total number of meetings held by all committees of the Board on which such director served during 2017,2019, in each case held during the period for which each respective director was serving as a director.
The Audit Committee consists of three directors: Mr. Carey,
Dr. Dilly and Ms.
Ramasastry, and Mr. Zakrzewski. Mr. ZakrzewskiRamasastry. Dr. Dilly was appointed to serve on the Audit Committee
effective in
September 2017.January 2020. Mr. Zakrzewski served on the Audit Committee for all of 2019 and was independent under applicable Nasdaq listing standards and SEC rules with respect to audit committee members. Mr. Carey serves as the Chairman of this committee.
Mr. Ringo served on the Audit Committee for all of 2017. His resignation from the Board, including all of its committees, was effective January 1, 2018. Our Board of Directors has determined that
Mr. Ringo was, and each member of the Audit Committee is independent under the applicable listing
standardstandards of Nasdaq and SEC rules. The Board of Directors has determined that Mr. Carey is an “audit committee financial expert” as defined under SEC rules and has the requisite financial sophistication in accordance with the applicable Nasdaq listing standards. The Audit Committee held
fivefour meetings during
2017.2019.
The Audit Committee assists the Board of Directors in its oversight of the integrity of our financial statements, the risk management and our internal controls and our compliance with legal and regulatory requirements. The Audit Committee interacts directly with, and evaluates the performance of, the independent registered public accounting firm, including determining whether to engage or dismiss the independent registered public accounting firm and to monitor the independent registered public accounting firm’s qualifications and independence. The Audit Committee also
pre-approves all audit services and permissible
non-audit services provided by the independent registered public accounting firm. The Audit Committee Report is included herein
on page 82.in the section labeled “Report of the Audit Committee of the Board of Directors.” The Audit Committee has a written charter, which is available on our website at
www.sangamo.com.https://investor.sangamo.com/corporate-governance/governance-overview.
The Compensation Committee consists of three directors:
Dr. Mento, Ms. Parker,
Dr. Smith and
Dr. Jeffs,Mr. Zakrzewski, each of whom is independent under applicable Nasdaq
listing standards and SEC rules. Mr.
Ringo served on the Compensation Committee for all of 2017Zakrzewski and
was independent under applicable Nasdaq and SEC rules. His resignation from the Board, including all of its committees, was effective January 1, 2018. Dr.
Mento serves as the Chairman of this committee. In September 2017, Dr. Jeffs wasSmith were appointed to serve on the Compensation
Committee.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.
The Compensation Committee’s responsibilities include (i) adopting, administering and reviewing compensation plans and programs for our executive officers, including incentive and equity plans and programs; (ii) approving compensation
arrangements for our executive officers; (iii) evaluating the performance of our executive officers; (iv) adjusting compensation arrangements as appropriate based upon performance; (v) reviewing, considering and approving compensation programs applicable to
non-employee members of the Board of Directors; (vi) reviewing and monitoring management development and succession plans and activities and (vii) administering, concurrently with the Board of Directors, the Sangamo Therapeutics Inc. 401(k) Profit Sharing Plan and Trust, originally effective on January 1, 1998, and as most recently amended and restated as of June 24, 2015,
(the “401(k) Plan”).or the 401(k) Plan.
The Compensation Committee may delegate any responsibility or authority of the Compensation Committee under its charter to one or more members of the Compensation Committee, as appropriate and as consistent with applicable laws and rules. Further, the Compensation Committee may delegate to one or more employees or one or more other members of the Board, the authority to grant awards of equity securities pursuant to our equity incentive plans, in each case to any persons who are not executive officers or key employees in accordance with such guidelines as may be established by the Compensation Committee. The Compensation Committee may also form anddoes not, however, delegate authorityany of its functions to a committee composed solely of our employees to serve as an administrative and/others in determining or investment committee, with fiduciary responsibilities under the Employee Retirement Income Security Act of 1974 (“ERISA”), with respect to onerecommending executive or more of our plans that are subject to ERISA. The Compensation Committee may also form and delegate authority to a subcommittee composed solely of at least two members of the Compensation Committee who are“non-employee directors” under Rule16b-3 to grant awards of equity securities and to take such other actions as may be necessary or appropriate to qualify transactions in our equity securities under the Rule16b-3 exemptions.director compensation.
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.
The Compensation Committee held five meetings
and acted three times by unanimous written consent in lieu of a meeting during
2017.2019. The Compensation Committee has a written charter, which is available on our website at
www.sangamo.com.https://investor.sangamo.com/corporate-governance/governance-overview. For information regarding our processes and procedures for the consideration and determination of executive and director compensation, please see “Executive Compensation—Compensation Discussion and Analysis” and “—Director Compensation,” respectively.
Compensation Committee Interlocks and Insider Participation
During
2017, Dr. Mento,2019, Ms. Parker, Dr.
Smith, Mr. Zakrzewski and former directors Drs. Jeffs and
William R. Ringo, who resigned from the Board and all committees thereof effective January 1, 2018,Mento served on the Compensation Committee. None of our Compensation Committee members has been an officer or employee of Sangamo at any time. None of our executive officers serves on the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our Board or our Compensation Committee.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee consists of three directors: Dr. Dilly,
Mr. Meyers and Ms. Parker,
and Dr. Jeffs, each of whom is independent under applicable Nasdaq listing standards. Mr.
RingoMeyers was appointed to serve on the Nominating and Corporate Governance Committee effective in January 2020. Effective April 1, 2020, the Nominating and Corporate Governance Committee will be reconstituted with Dr. Dilly, Ms. Parker and Dr. Markels, each of whom is independent under applicable Nasdaq listing standards. Dr. Jeffs previously served on the Nominating and Corporate Governance
Committee with Dr. Dilly and Ms. Parker until his term expired at the 2019 annual meeting of stockholders when he did not stand for
allreelection. Dr. Dilly serves as Chairman of
2017. His resignation from the Board, including all of its committees, was effective January 1, 2018. As of March 2018, Dr. Jeffs chairs the Nominating and Corporate Governance Committee.this committee. The Nominating and Corporate Governance Committee considers and periodically reports on matters relating to the size, identification, selection and qualification of the Board of Directors and candidates nominated for the Board of Directors and its committees, and develops and recommends governance principles and policies applicable to the Company.
The Nominating and Corporate Governance Committee held
one meeting and acted once by unanimous written consent in lieu of a meetingthree meetings during
2017.2019. The Nominating and Corporate Governance Committee has a written charter, which is available on our website at
www.sangamo.com.https://investor.sangamo.com/corporate-governance/governance-overview. The Nominating and Corporate Governance Committee considers properly submitted stockholder recommendations for candidates for membership on the Board of Directors as described below under “—Identification and Evaluation of Nominees for Directors.” In evaluating such recommendations, the Nominating and Corporate Governance Committee seeks to achieve a balance of knowledge, experience and capability on the Board of Directors and to address the membership criteria set forth below under “—Director Qualifications.”
The Nominating and Corporate Governance Committee will use a variety of criteria to evaluate the qualifications and skills necessary for members of our Board of Directors. The Nominating and Corporate Governance Committee may assess character, judgment, business acumen and scientific expertise, and familiarity with issues affecting the biotechnology and pharmaceutical industries. Other qualifications will be determined on acase-by-case basis, depending on whether the Nominating and Corporate Governance Committee desires to fill a vacant seat or increase the size of the Board to add new directors. In addition, the Nominating and Corporate Governance Committee may also evaluate whether a potential director nominee’s
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,
as a matter of practice, the committee considers diversity in the context of the Board as a whole and takes into account the personal characteristics and experiences of current and prospective directors that reflect a broad range of perspectives in the Board’s decision-making process.
Identification and Evaluation of Nominees for Directors
The Nominating and Corporate Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director. The Nominating and Corporate Governance Committee assesses the appropriate size of the Board of Directors, and whether any vacancies on the Board of Directors are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Nominating and Corporate Governance Committee considers various potential candidates for director. Candidates may come to the attention of the Nominating and Corporate Governance Committee through current members of the Board of Directors or senior management, executive recruiting firms, stockholders or other persons.
With respectIn addition, we have in the past and may from time to
time again in the
appointment of Dr. Jeffs and Mr. Zakrzewski, the Nominating and Corporate Governance Committee paid a fee tofuture engage a third-party
executive recruitingsearch firm to assist
in identifying potential directors. For example, we engaged a search firm to conduct a search on our behalf for a new director with extensive commercial and operational experience in the life sciences industry, and this search firm identified and recommended Mr. Meyers as a director candidate with the
identification and vetting potential candidatesrelevant experience. Candidates for
the Board. These candidatesdirector are evaluated at regular or special meetings of the Nominating and Corporate Governance Committee, and may be considered at any point during the year. The Nominating and Corporate Governance Committee
considerswill consider properly submitted stockholder recommendations for candidates for the Board of Directors.
Stockholder nomineesNominees recommended by stockholders will receive the same consideration that nominees of the Board receive. Any stockholder recommendations proposed for consideration by the Nominating and Corporate Governance Committee must provide all information requested by the Nominating and Corporate Governance Committee relating to such recommendation, including the candidate’s name and qualifications for membership on the Board of Directors and should be addressed to Investor Relations at the following address:
Investor Relations Department
Sangamo Therapeutics, Inc.
501 Canal
7000 Marina Boulevard
Richmond,
In evaluating such recommendations, the Nominating and Corporate Governance Committee applies the qualifications standards discussed above and seeks to achieve a balance of knowledge, experience and capability on the Board of Directors.
Leadership Structure of the Board
Under our Bylaws, the Board is not required to appoint our Chief Executive Officer as the Chair of the Board, and the Board does not have a policy on whether or not the roles of Chief Executive Officer and Chair of the Board should be separate. Currently two individuals serve in these two positions. Ms. Parker currently serves as the Chair of the Board. Ms. Parker has extensive knowledge and experience in the life science industry and anin-depth understanding of our business strategies andday-to-day operations, which makes her well suited to set the agenda and lead the discussions at Board meetings as the Chair. The Chair is responsible for chairing Board meetings and meetings of stockholders, setting the agenda for Board meetings and providing information to the Board members in advance of meetings and between meetings. In addition, our Chief Executive Officer, Dr. Macrae, also serves as a director on our Board. The Board believes that Dr. Macrae’s membership as a director provides the Board with anin-depth understanding of our business operations because of his extensive experiences and knowledge of theday-today day-to-day management of all aspects of our operations. This will also facilitatefacilitates communications between the Board and management by ensuring a regular flow of information, thereby enhancing the Board’s ability to make informed decisions on critical issues facing our company.
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.
Oversight of Risk Management by the Board
Our Board of Directors is generally responsible for the oversight of corporate risk in its review and deliberations relating to our activities and has determined that our principal source of risk falls into two categories: (1) financial and (2) product development and testing.activities. The Audit Committee oversees management of risks associated with our financial and accounting systems, public financial reporting, investment strategies and policy, and certain other matters delegated to the Audit Committee, including risks associated with our information technology systems (including cybersecurity risks). Our Board of Directors regularly reviews information regarding our cash position, liquidity and operations, as well as the risks associated with each. The Board regularly
reviews plans, results and potential risks related to our lead therapeutic development programs and other preclinical programs as well as financial and strategic
riskrisks related to our
business and operations.
In addition, the Nominating and Corporate Governance Committee monitors the effectiveness of our corporate policies and manages risks associated with the independence of the Board of Directors and potential conflicts of interest. Our Compensation Committee oversees risk management as it relates to our compensation plans, policies and practices for all employees, including executives, particularly whether our compensation programs may create incentives for our employees to take excessive or inappropriate risks that could have a material adverse effect on the Company. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board of Directors is regularly informed through committee reports about such risks.
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.
Annual Meeting Attendance
Although we do not have a formal policy regarding attendance by members of the Board of Directors at our annual meetings of stockholders, directors are encouraged to attend annual meetings of our stockholders.
SixOther than Ms. Ramasastry, all of our then current directors
who were nominated for re-election attended the
20172019 annual meeting of stockholders.
Communications with the Board of Directors
Our Board of Directors currently does not have a formal process for stockholders to send communications to the Board of Directors. Although we do not have a formal policy regarding communications with the Board of Directors, stockholders may communicate with the Board of Directors, including the
non-management directors, by sending a letter to the Sangamo Board of Directors, c/o Investor Relations,
501 Canal7000 Marina Boulevard,
Richmond,Brisbane, California
94804.94005. Stockholders who would like their submission directed to a particular member of the Board of Directors may so specify.
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.
Code of Business Conduct and Ethics
The Board of Directors has adopted a Code of Business Conduct and Ethics, which is applicable to all employees and directors of the Company. A copy of our Code of Business Conduct and Ethics is available on our website at www.sangamo.comhttps://investor.sangamo.com/corporate-governance/governance-overview in the Investors &+ Media Section under Corporate Governance. In the event that we make any amendments to or grant any waivers of, a provision of the Code of Business Conduct and Ethics that applies to the principal executive officer, principal financial officer, or principal accounting officer that requires disclosure under applicable SEC rules, we intend to disclose such amendment or waiver and the reasons therefore, on our website at www.sangamo.com,website.
Prohibitions on Hedging, Pledging and Speculative Transactions
Under the terms of our insider trading policy, none of our directors, officers and other employees may engage in any hedging or monetization transactions relating to our securities, including through the Investors & Media section.use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. In addition, all of our officers, directors and employees are prohibited from short-selling our securities or engaging in transactions involving Sangamo-based derivative securities (other than those granted under our employee stock option or equity incentive plans), and are further prohibited from holding our securities in a margin account or otherwise pledging our securities as collateral for a loan.
The following table sets forth certain information regarding the compensation of each
non-employee director for service as a member of the Board of Directors during
2017. | | | | | | |
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 Automatic Grant Program in effectthen existing automatic grant program under our Amended and Restated 2013 Stock Incentivethe 2018 Plan (the “2013 Plan”), Ms. Parker, Mr. Carey, Dr. Dilly, Dr. Mento,Ms. Parker, Ms. Ramasastry, Dr. Smith and Mr. RingoZakrzewski each received an option to purchase 10,00015,000 shares of common stock with an exercise price per share of $7.20$9.38 on the date of the 20172019 annual meeting of stockholders, and each such option had an aggregate grant date fair value of $45,718, calculated in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 718 (“ASC 718”),Compensation - Stock Compensation, using the Black-Scholes option valuation model and without taking into account any estimated forfeitures.$92,862. On June 27, 2017,November 22, 2019, Mr. Jeffs and Mr. Zakrzewski eachMeyers received an option to purchase 30,000 shares of common stock with an exercise price per share of $8.70$9.81 in connection with their appointmentshis appointment to the Board of Directors on June 26, 2017November 22, 2019 and each such option had an aggregate grant date fair value of $165,729, calculated in accordance with ASC 718 using$190,758. |
| |
| (4) | Pursuant to the Black-Scholes option valuation modelthen existing automatic grant program under the 2018 Plan, Mr. Carey, Dr. Dilly, Ms. Parker, Ms. Ramasastry, Dr. Smith and without taking into account any estimated forfeitures. |
(3) | The assumptions used inMr. Zakrzewski each received an award of 2,500 restricted stock units, or RSUs, on the calculationdate of the 2019 annual meeting of stockholders and each such RSU had an aggregate grant date fair values are describedvalue of $23,450. On November 22, 2019, Mr. Meyers received an award of 5,000 RSUs in Note 4connection with his appointment to our consolidated financial statements included in our Annual Report on Form10-K for the year ended December 31, 2017.
Board of Directors and such RSU had an aggregate grant date fair value of $54,000. |
(4) | |
| (5) | As of December 31, 2017,2019, the followingnon-employee directors held options to purchase the following number of shares of our common stock: Ms. Parker, 80,000 shares; Mr. Carey, 40,00070,000 shares; Dr. Dilly, 120,000150,000 shares; Mr. Jeffs,Meyers, 30,000 shares; Dr. Mento, 80,000Ms. Parker, 110,000 shares; Ms. Ramasastry, 59,45080,000 shares; Mr. Ringo (former director), 50,000Dr. Smith, 45,000 shares; and Mr. Zakrzewski, 30,00060,000 shares. |
(5) | |
| (6) | As of December 31, 2019, the following non-employee directors held RSUs for the following number of shares of our common stock: Mr. JeffsCarey, 2,500 shares; Dr. Dilly, 2,500 shares; Mr. Meyers, 5,000 shares; Ms. Parker, 2,500 shares; Ms. Ramasastry, 2,500 shares; Dr. Smith, 5,833 shares; and Mr. Zakrzewski, were2,500 shares. |
| |
| (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 members member of the Board of Directors on June 26, 2017; accordingly, their retainer fees werepro-rated over their period of service. |
(6) | Mr. Lanphier did not stand forre-election to the Board of Directors at the 2017 annual meeting of stockholders (the “2017 Annual Meeting”);November 22, 2019; accordingly, his retainer fees werepro-rated over his period of service.
service in 2019. |
(7) | Mr. Ringo resigned as anon-employee member of the Board of Directors effective January 1, 2018.
|
Processes and Procedures for Determining Director Compensation.
Compensation
The charter of the Compensation Committee provides the Compensation Committee with the responsibility for reviewing, considering and approving compensation programs applicable to
non-employee directors. It is the practice of the Compensation Committee to seek input from outside compensation consultants, including Radford, our Compensation Committee’s compensation consultant, as it deems appropriate.
Director Annual Retainer and Meeting Fees
Eachnon-employee member of the Board of Directors receives an annual cash retainer of $40,000. To the extent the Board of Directors meets more than 10 times in any year, eachnon-employee member of the Board of Directors will receive, for each meeting in excess of 10, a per meeting fee of $1,000 if attended in person and $500 if attended by video or telephone conference. The ChairmanChair of the Board of Directors receives an additional annual cash retainer of $35,000. In addition, thenon-employee members of the Board of Directors serving as the Chairman of the Audit Committee, the Chairman of the Compensation Committee and the Chairman of the Nominating and Corporate Governance Committee receive an additional annual cash retainer of $20,000, $15,000 and $10,000, respectively. Eachnon-employee member of the Board of Directors serving as a member of the
Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee, other than the Chairman, receives an additional annual cash retainer of $10,000, $7,500 and $5,000, respectively. All retainer fees are subject to
pro-ration for directors who join or leave the Board of Directors or the respective committee or begin or cease to serve
Chairmanas Chair of the Board or the respective committee, during the year.
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.
Equity Incentives Granted Under
2013 Stock Incentive PlanUnder 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
Under the subject of Proposal No. 3 provides for a similar program for continuingnon-employee members of the Board of Directors who served as a director for the previous six months, although the amount, type and vesting terms of the awards to be automatically granted are modified. Accordingly, if Proposal No. 3 is approved by the stockholders, ournon-employee members of the Board of Directors will continue to receive automatic equity award grants on the date of each annual stockholders meeting. Additionally, if Proposal No. 3 is approved by the stockholders, newly appointed or electednon-employee members of the Board will receive equity grants automatically upon their initial appointment or election. See “—Proposed New Automatic Grant Program Under 2018 Equity Incentive Plan” below for more information.
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 ofunder the 2018 Plan, eachnon-employee Board member who is initially appointed or elected to the Board on or after the Annual Meeting will automatically be granted aan NSO to purchase 30,000 shares of common stock and a RSU award in respect of 5,000 shares of common stock under the 2018 Plan. The shares subject to each initial 30,000 share automatic NSO grant made to a newly appointed Board member will vest in 36 successive equal monthly installments upon such director’s completion of each month of Board service over the36-month three-year period measured from the grant date. The shares subject to each 5,000 share automatic RSU grant will vest with respect to 1/3rd of the shares in three equal annual installments over the three-year period measured from the date of grant. 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. The shares subject to each automatic NSO grant and each automatic RSU grant will immediately vest in full upon the director’s death or disability or upon the occurrence of a change ofin control or hostile takeover (as such terms are defined in Proposal No. 3 below)the 2018 Plan) in each subject to the director’s continued Boardcontinuous service through such 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.
Under the current automatic grant program under the 2018 Plan, Mr. Meyers was awarded an initial option to purchase 30,000 shares of our common stock on November 22, 2019, with an exercise price per share of $9.81. The option will vest in 36 successive equal monthly installments over the three-year period measured from the grant date, subject to Mr. Meyers’ continuous service on each monthly vesting date. Also on November 22, 2019, Mr. Meyers received a RSU award of 5,000 shares of common stock pursuant to the automatic grant program under the 2018 Plan, which will vest with respect to 1/3rd of the shares in three equal annual installments over the three-year period measured from the grant date, subject to Mr. Meyers’ continuous service on each annual vesting date. The remaining terms of his options and RSU award are similar to the terms of the annual grants under the current automatic grant program.
Under the current automatic grant program under the 2018 Plan, Dr. Markels was awarded an initial option to purchase 30,000 shares of our common stock on February 11, 2020, with an exercise price per share of $7.60. The option will vest in 36 successive equal monthly installments over the three-year period measured from the grant date, subject to Dr. Markels’ continuous service on each monthly vesting date. Also on February 11, 2020, Mr. Meyers received a RSU award of 5,000 shares of common stock pursuant to the automatic grant program under the 2018 Plan, which will vest with respect to 1/3rd of the shares in three equal annual installments over the three-year period measured from the grant date, subject to Dr. Markels’ continuous service on each annual vesting date. The remaining terms of his options and RSU award are similar to the terms of the annual grants under the current automatic grant program.
Proposed New Automatic Grant Program Under Amended and Restated 2018 Equity Incentive Plan
If Proposal No. 3 is approved at the Annual Meeting by the optionsstockholders, the automatic grant program under the 2018 Plan will be replaced by a new automatic grant program under the Amended 2018 Plan. Under the automatic grant program of the Amended 2018 Plan, each individual who is a non-employee Board member will automatically be granted a NSO to purchase 105,00020,000 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 respect to 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 awards will be granted on 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); 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 immediately after the date of grant. The shares subject to each annual 20,000 share automatic NSO grant made to a continuing Board member will vest in 12 successive equal monthly installments over the one-year period following the date of grant, subject to the director’s continuous service through the applicable vesting dates. The shares subject to each annual 10,000 share automatic RSU award grant made to a continuing Board member in 2020 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 continuous service through the applicable vesting date. 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.
Under the automatic grant program of the Amended 2018 Plan, each individual who is initially appointed or elected as a non-employee Board member on or after the 2020 Annual Meeting will, on the date of such appointment or election, automatically be granted a NSO to purchase 30,000 shares of common stock and a RSU award in respect of 15,000 shares of common stock. The shares subject to each initial 30,000 share automatic NSO grant made to a newly appointed or elected Board member will vest in 36 successive equal monthly installments over the three-year period following the date of grant, subject to the director’s continuous service through the applicable vesting dates. The shares subject to each initial 15,000 share automatic RSU award grant made to a newly appointed or elected Board member will vest in three equal annual installments over the three-year period following the date of grant, subject to the director’s continuous service through the applicable vesting dates.
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
RSU awards in respectwill have a term of
17,500 shares10 years, subject to earlier termination following the director’s termination of
our common stockcontinuous service. Each automatic NSO grant will be
automatically granted to ournon-employee directors as a group on such dateimmediately 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
2018 Plan. If Proposal No. 3 isNSO that are not
approvedvested at the
Annual Meeting, the 2013 Plan will remain in effect so that options to purchase 70,000 shares of our common stock will be automatically granted to ournon-employee directors as a group on such date under the 2013 Plan.Recommendationtime of the Boarddirector’s termination of Directors
continuous service.
The Boardshares subject to each automatic NSO grant and each automatic RSU award grant will immediately vest in full upon the director’s termination of Directors recommends thatcontinuous service due to death or disability, or upon the stockholders vote FORoccurrence of a change in control or hostile takeover (each as defined in the electionAmended 2018 Plan), subject to the director’s continuous service through the date of the nominees listed above.such change in control or hostile takeover.
ADVISORY VOTE ON EXECUTIVE COMPENSATION
Under Section 14A(a)(1) of the Exchange Act, our stockholders are entitled to vote to approve, on a
non-binding advisory basis, the compensation of our named executive officers as disclosed in this Proxy Statement in accordance with SEC rules (commonly referred to as a
“say-on-pay” “say-on-pay” vote).
This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement. Based on the voting results from the 2017 annual meeting of stockholders, our stockholders voted
for,“For,” and we have adopted an annual advisory vote on the compensation of the named executive officers in our proxy materials, which will remain in effect until the next required vote on the frequency of stockholder votes on the compensation of named executive officers.
Accordingly, the next advisory vote on the compensation of our named executive officers will be held at the 2021 Annual Meeting of Stockholders. Although the vote is
non-binding, the Board of Directors and the Compensation Committee
of the Board value the opinions of our stockholders and will consider the outcome of the vote when making future compensation decisions affecting our executive officers.
We encourage stockholders to read closely the “Executive Compensation” section of this Proxy Statement, beginning with the Compensation Discussion and Analysis,
(“or CD
&A”) on page 50,&A, included in the section labeled “Executive Compensation—Compensation Discussion and Analysis,” which describes in detail our executive compensation programs, policies and practices with respect to the compensation of our named executive officers in the year ended December 31,
2017.2019.
Our overarching compensation goal is to create a positive relationship between our compensation program and our corporate performance.
We design our executive compensation program to implement our core objectives of attracting and retaining highly qualified executives with extensive industry or scientific experience, rewarding executives for success in meeting our annual clinical development and other research and operational goals, aligning the interests of our executives with those of our stockholders and recognizing executives’ individual performance and, for executives other than our Chief Executive Officer,
achievement ofachieving their individual goals and those of the functional organizations that they manage.
The Compensation Committee established the
20172019 compensation program and the associated Company goals in accordance with the foregoing goals and philosophy. During
2017,2019, we continued
to advance the
importantapplication and value of our technology platforms, as we work
of laying the foundation for the Company astowards becoming a sustainable, fully integrated
company that develops, manufacturersbiopharmaceutical company. Our goal is to develop, manufacture and commercializes novel,
proprietary genomic
therapies onmedicines that leverage our
owntechnical expertise, and
where appropriate, in collaborationstrategically collaborate with industry
partners. We now have six activepartners when appropriate. In 2019, we presented data at key conferences for our pipeline product candidates, achieved clinical
milestones under partnered programs with
additional preclinical assets advancing towardPfizer Inc., or Pfizer, and Bioverativ Inc., (now Sanofi Genzyme, a global business unit of Sanofi, or Sanofi), including transferring an investigational new drug, or IND,
application.application to Pfizer, which plans to commence a Phase 3 registrational trial for SB-525, our first Phase 3 product candidate. We also began enrolling new Phase 1/2 trials for certain of our wholly-owned assets, and received clinical trial authorization, or CTA, to commence additional trials in the United Kingdom in 2020. In addition to these clinical milestones, we also grew our personnel and infrastructure, and integrated Sangamo France S.A.S. to provide a foundation for our strategic initiatives on a global level. In addition to forming a Scientific Advisory Board, we laid the groundwork for our global licensing collaboration with Biogen MA, Inc. and Biogen International GmbH, or collectively Biogen, which we executed in early 2020. The highlights of our business successes in
20172019 are summarized under the heading
“2017“2019 and Early
20182020 Performance Highlights” in the CD&A. The Board of Directors believes our executive compensation program uses appropriate structures and sound pay practices that are effective in achieving our core objectives.
The Board is asking our stockholders to indicate their support for the compensation of our named executive officers, as described in this Proxy Statement, by casting a
non-binding advisory vote “FOR” the following resolution:
“Resolved that the Company’s stockholders hereby approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed in this Proxy Statement pursuant to the
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.”
Advisory approval of this Proposal No. 2 requires votes “FOR” from holders of a majority
in voting power of the
stock having voting powershares present in person or represented by proxy at the Annual
Meeting.Recommendation of the Board of Directors
Meeting and entitled to vote on this Proposal No. 2.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends an advisory vote FOR the resolution to approve, on an advisory basis, the compensation of the named executive officers as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC.
AMENDMENT AND RESTATEMENT OF THE 2018 EQUITY INCENTIVE PLAN
Our Compensation Committee approved an amendment and restatement of the Sangamo Therapeutics, Inc. 2018 Equity Incentive Plan, or the 2018 Plan, on April 23, 2018,March 20, 2020, subject to approval by our stockholders. TheThroughout this Proxy Statement, we refer to the 2018 Plan, is intended to be the successor to the Amendedas amended and Restated 2013 Stock Incentive Plan, or the 2013 Plan. Currently, we maintain the 2013 Plan to grant equity awards to provide long-term incentives to our employees,non-employee directors and consultants. In light of changes in 2017 to federal tax laws and other changes that have occurred since the 2013 Plan was originally adopted,restated by our Compensation Committee decided to adopt and seekon March 20, 2020, as the “Amended 2018 Plan.”
In this Proposal No. 3, we are seeking stockholder approval forof the Amended 2018 Plan to update our equity plan provisions to align with current tax and regulatory rules and market practices. In addition,make the following material changes from the 2018 Plan will include a new reservePlan:
increase the aggregate number of 8,800,000 shares of our common stock (in additionthat may be issued under the Amended 2018 Plan by 9,900,000 shares, subject to adjustment for certain changes in our capitalization (and for purposes of this Proposal No. 3, we refer to such change as the “Share Reserve Amendment”);
increase the aggregate maximum number of shares of our common stock that may be issued pursuant to the exercise of incentive stock options under the Amended 2018 Plan by 19,800,000 shares (for a total of 37,400,000 shares), subject to adjustment for certain changes in our capitalization (and for purposes of this Proposal No. 3, we refer to such change as the “ISO Limit Amendment”); and
make the following changes with respect to the provisions of the automatic grant program for our non-employee directors (as described below in this Proposal No. 3) under the Amended 2018 Plan: (i) increase the number of shares of
our common stock that are
or would become, available under our 2013 Plan)subject to
ensure that we can continuecertain awards granted pursuant to
grant equity awards to attract and retain high quality employees,non-employee directors and consultants. Additionally, the
2018 Plan includes an automatic grant program
as follows, in each case subject to adjustment for
certain changes in our
capitalization: (a) increase the number of shares of our common stock that are subject to one-time RSU awards granted to our newly elected or appointed non-employee directors.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”).
The effectiveness of the Share Reserve Amendment and the ISO Limit Amendment is contingent upon approval of Proposal No. 4 by our stockholders. Accordingly:
if this Proposal No. 3 and Proposal No. 4 are both approved by our stockholders, then the Amended 2018 Plan (including the Share Reserve Amendment, the ISO Limit Amendment and the Automatic Grant Program Amendment) will become effective as of the date of the Annual Meeting, and no additional equity awards will be grantedwith the new shares reserved for issuance under the 2013 Plan. However, all outstanding equity awards granted underShare Reserve Amendment being reserved effective upon the 2013filing of the Common Increase Certificate (as defined in Proposal No. 4) with the Secretary of State of the State of Delaware;
if this Proposal No. 3 is approved by our stockholders, but Proposal No. 4 is not approved by our stockholders, then the Amended 2018 Plan (including the Automatic Grant Program Amendment, but not the Share Reserve Amendment or the ISO Limit Amendment) will become effective as of the date of the Annual Meeting; and
if this Proposal No. 3 is not approved by our stockholders, then the Amended 2018 Plan will not become effective and the 2018 Plan will continue to be subject to the terms and conditions as set fortheffective in the agreements evidencing such awards and the terms of the 2013 Plan. accordance with its terms.
Stockholder approval of this Proposal No. 3 will also constitute
pre-approval of each award granted under the
Amended 2018 Plan pursuant to the provisions of the automatic grant program for our
non-employee directors
as(as described below in this Proposal No.
3. In the event that our stockholders do not approve this Proposal No. 3, the 2018 Plan will not become effective and the 2013 Plan will continue to be effective in accordance with its terms.3).
Why You Should Vote to Approve the
Amended 2018 Plan
Equity Awards Are an Important Part of Our Compensation Philosophy
Our Board believes that the issuance of equity awards is a key element underlying our ability to attract, retain and motivate key personnel,non-employee directors and consultants because of the strong competition for highly trained and experienced individuals among biotechnology and pharmaceutical companies, especially in the greater San Francisco Bay area. Therefore, the
Board believes that the
Amended 2018 Plan is in the best interests of our business and our stockholders and recommends a vote in favor of this Proposal No. 3.
Approval of
the 2018 Planthis Proposal No. 3 and Proposal No. 4 by our stockholders will allow us to
continue to grant equity awards
under the Amended 2018 Plan at levels we determine to be appropriate. The
Amended 2018 Plan will also allow us
to continue to utilize equity awards as long-term incentives to secure and retain the services of our employees,
non-employee directors and consultants, consistent with our compensation philosophy and common compensation practice for our industry in the greater San Francisco Bay Area. To date, equity
incentivesawards have been a key aspect of our program to attract and retain key employees,
non-employee directors and consultants. We believe the use of equity awards strongly aligns the interests of our employees with those of our stockholders by placing a considerable proportion of our employees’ total compensation “at risk” because it is contingent on the appreciation in value of our common stock. In addition, we believe equity awards
encouragesencourage employee ownership of our common stock and
promotespromote retention through the reward of long-term Company performance.
We Carefully Manage the Use of Equity Awards and the Size of our Share Reserve
Increase Request is Reasonable
Our compensation philosophy reflects broad-based eligibility for equity incentive awards, and we generally grant equity awards to all of our employees andnon-employee directors. However, we recognize that equity awards dilute existing stockholders, and, therefore, we are mindful to responsibly manage the growth of our equity compensation program. We are committed to effectively monitoring our equity compensation share reserve,
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.
Determination of Number of
Additional Shares to Request for the
Amended 2018 Plan
In its determination to approve the
Amended 2018 Plan, our Compensation Committee reviewed an analysis prepared by Radford, its compensation consultant, which included an analysis of our historic and estimated prospective share usage needs and the potential costs of the
Amended 2018 Plan. Specifically, our Compensation Committee considered:
Market Competitiveness.The 2018 Plan plays an important role in our effort to align the interests of participants and stockholders. Moreover, in our industry, equity compensation 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 2018 Plan share authorization could potentially last. We expect the share authorization under the 2018 Plan to provide us with enough shares for awards for approximately 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, 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 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 2018 Plan is well within generally accepted standards as measured by an analysis of its cost relative to industry standards. |
| | | |
| • | | 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. |
Historic Use of Equity
Awards and Outstanding Awards
The following table provides certain additional information regarding
our use of
equity.equity awards: |
| | | | | |
| | | 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 |
| |
___________________
| | |
| * | | As of April 17, 2018
Record Date |
TotalReflects the number of shares available under the Sangamo Therapeutics, Inc. 2010 Employee Stock Purchase Plan, as amended, or the Purchase Plan, as of common stock subject to outstanding stock options
| | 8,455,564 |
Weighted-average exercise price of outstanding stock options
| | $10.57 |
Weighted-average remaining term in years of outstanding stock options
| | 7.60 |
Total number ofthe record date. No other shares of common stock subject to outstanding full value awards granted
| | 280,579 |
Total number of shares of common stockare available for grant under the 2013 Plan
| | 1,618,588 |
Total number of shares of common stock available for grant underany other equity incentive plans
| | 835,674* |
Total number of shares of common stock outstanding
| | 87,145,700 |
Per-share closing price of common stock as reported on Nasdaq Global Select Market
| | $19.52 |
| | 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.
