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| reviewing and pre-approving the engagement of our independent registered public accounting firm to perform audit services and any permissible non-audit services; evaluating the performance of our independent registered public accounting firm and deciding whether to retain its services; monitoring the rotation of partners on the engagement team of our independent registered public accounting firm; reviewing our annual and quarterly financial statements and reports and discussing the statements and reports with our independent registered public accounting firm and management, including a review of disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; considering and approving or disapproving of all related party transactions; reviewing, with our independent registered public accounting firm and management, significant issues that may arise regarding accounting principles and financial statement presentation, as well as matters concerning the scope, adequacy and effectiveness of our financial controls; assessing our financial risks and management of those risks;
·
| evaluating the performance of our independent registered public accounting firm and deciding whether to retain its services;
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establishing procedures for the receipt, retention and treatment of complaints received by us regarding financial controls, accounting or auditing matters; and ·
reviewing and evaluating, at least annually, the performance of the Audit Committee and the adequacy of its charter. | monitoring the rotation of partners on the engagement team of our independent registered public accounting firm;
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·
| reviewing our annual and quarterly financial statements and reports and discussing the statements and reports with our independent registered public accounting firm and management, including a review of disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”;
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·
| considering and approving or disapproving of all related party transactions;
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·
| reviewing, with our independent registered public accounting firm and management, significant issues that may arise regarding accounting principles and financial statement presentation, as well as matters concerning the scope, adequacy and effectiveness of our financial controls;
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·
| assessing our financial risks and management of those risks;
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·
| establishing procedures for the receipt, retention and treatment of complaints received by us regarding financial controls, accounting or auditing matters; and
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·
| reviewing and evaluating, at least annually, the performance of the Audit Committee and the adequacy of its charter.
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The Audit Committee has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities. The Board has adopted a written Audit Committee charter that is available to stockholders on our website at http://investors.atarabio.com/corporate-governance.cfm.corporate-governance. Report of the Audit Committee of the Board of Directors1 The Audit Committee has reviewed and discussed the audited financial statements for the fiscal year ended December 31, 20152020 with our management. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by Auditing Standard No. 16, Communications with Audit Committees, as adopted bythe applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”). and the SEC. The Audit Committee has also received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountants’ communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm the accounting firm’s independence. Based on the foregoing, the Audit Committee has recommended to the Board that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015.2020. Matthew K. Fust Eric L. Dobmeier William Heiden Compensation Committee The Board has determined that each member of the Compensation Committee is independent under Nasdaq listing standards and Rule 10c-1 promulgated under the Exchange Act, and a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. The primary functions of this committee include: | Matthew K. Fust
determining the compensation and other terms of employment of our Chief Executive Officer and other executive officers and reviewing and approving corporate performance goals and objectives relevant to such compensation; | Eric L. Dobmeier
| Carol Gallagher, Pharm.D.
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determining the compensation of our non-employee directors; evaluating, adopting and administering the equity incentive plans, compensation plans and similar programs advisable for Atara, as well as reviewing and recommending to the Board the adoption, modification or termination of our plans and programs; establishing policies with respect to equity compensation arrangements; reviewing with management any required disclosures under the caption “Compensation Discussion and Analysis” and recommending to the Board its inclusion in our periodic reports to be filed with the SEC; periodically review with the Chief Executive Officer the plans for succession for the Company’s executive officers; and reviewing and evaluating, at least annually, the performance of the Compensation Committee and the adequacy of its charter. 1 | The material in this report is not “soliciting material,” is being furnished and shall not be deemed “filed” with the Commission and is not to be incorporated by reference in any filing of Atara under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. |
9
Compensation Committee
The Board has determined that each member of the Compensation Committee is independent under Nasdaq listing standards and Rule 10c-1 promulgated under the Exchange Act, a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act and an “outside director” as that term is defined in Section 162(m) of the Internal Revenue Code. The functions of this committee include:
| ·
| determining the compensation and other terms of employment of our Chief Executive Officer and other executive officers and reviewing and approving corporate performance goals and objectives relevant to such compensation;
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| ·
| determining the compensation of our non-employee directors;
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| ·
| evaluating, adopting and administering the equity incentive plans, compensation plans and similar programs advisable for Atara, as well as reviewing and recommending to the Board the adoption, modification or termination of our plans and programs;
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| ·
| establishing policies with respect to equity compensation arrangements;
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| ·
| reviewing with management any required disclosures under the caption “Compensation Discussion and Analysis” and recommending to the Board its inclusion in our periodic reports to be filed with the SEC; and
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| ·
| reviewing and evaluating, at least annually, the performance of the Compensation Committee and the adequacy of its charter.
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The Compensation Committee has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities. The Board has adopted a written Compensation Committee charter that is available to stockholders on our website at http://investors.atarabio.com/corporate-governance.cfm.corporate-governance. Compensation Committee Processes and Procedures Typically, theThe Compensation Committee meets at least fourmet five times annually, and with greater frequency, if necessary.during 2020. The agenda for each meeting is usually developed by the Secretary andour Chief Executive Officer, Chief People Officer and General Counsel in consultation with the ChairmanChair of the Compensation Committee and our outside compensation consultants, if applicable. The Compensation Committee meets regularly in executive session. However, from time to time, various members of management and other employees as well as outside advisors or consultants may be invited by the Compensation Committee to make presentations, to provide financial or other background information or advice or to otherwise participate in Compensation Committee meetings. The Chief Executive Officer does not and will not participate in, or be present during, any deliberations or determinations of the Compensation Committee regarding his compensation. The charter of the Compensation Committee grants the Compensation Committee full access to all of our books, records, facilities and personnel. In addition, under the charter, the Compensation Committee has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities. The Compensation Committee has the authority to retain compensation consultants to assist in its evaluation of executive and director compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. Under the charter, the Compensation Committee may select, or receive advice from, a compensation consultant, legal counsel or other adviseradvisor to the Compensation Committee other(other than in-house legal counsel and certain other types of advisers,advisors), only after taking into consideration six factors, prescribedassessing their independence in accordance with, and to the extent required by, applicable law and the SEC and Nasdaq, that bear upon the adviser’s independence;listing requirements of Nasdaq; however, there is no requirement that any adviseradvisor be independent.
During 2015 and in February 2016,2020, the Compensation Committee engaged the Radford anadvisory team of the Rewards Solution practice at Aon Hewitt Company,(“Radford”) as independent compensation consultant. After considering all of the factors required by applicable Nasdaq rules, the Compensation Committee was satisfied with Radford’s independence and requested that Radford evaluate and help us refine our employee and non-employee director compensation strategies and practices. As part of its engagement, Radford was requested by the Compensation Committee to develop a comparative group of companies and to perform analyses of competitive performance and compensation levels for that group. With respect to the compensation of the Chief Executive Officer, Radford developed recommendations that were presented to the Compensation Committee for its consideration. Following an active dialogue with Radford, the Compensation Committee considered the recommendations in addition to corporate performance and approved the recommendations subject to certain modifications deemed appropriate by the Compensation Committee. With respect to the executive officers, the Chief Executive Officer in consultation with Radford developed recommendations that were presented to the Compensation Committee for its consideration. Following an active dialogue with the Chief Executive Officer and with Radford, the Compensation Committee considered the recommendations in addition to corporate and individual performance and approved the recommendations subject to certain modifications deemed appropriate by the Compensation Committee. 10
Historically, the Compensation Committee has made most of the significant adjustments to annual compensation and determined bonus and equity awards and established new performance objectives at one or more meetings held during the first quarter of the year. However, theThe Compensation Committee also considers matters related to individual compensation, such as compensation for new executive hires, as well as high-level strategic issues, such as the efficacy of our compensation strategy, potential modifications to that strategy, risks created by that strategy and new trends, retention concerns and plans or approaches to compensation, at various meetings throughout the year. Generally, the Compensation Committee’s process comprises two related elements: (1) the determination of compensation levels and (2) the establishment of corporate goals for the current year. For executives other than the Chief Executive Officer, the Compensation Committee solicits and considers evaluations and recommendations submitted to the Committee by the Chief Executive Officer. In the case of the Chief Executive Officer, the evaluation of his performance is conducted by the Compensation Committee with feedback from the Board as well as the executives, which determines any adjustments to hisChief Executive Officer’s compensation as well as awards to be granted. For all executives and directors as part of its deliberations, the Compensation Committee may review and consider, as appropriate, materials that it deems relevant, such asrelevant. These materials may include financial reports and projections, operational data, tax and accounting information, tally sheets that set forth the total compensation that may become payable to executives in various hypothetical scenarios, executive and director stock ownership information, company stock performance data, analyses of historical executive compensation levels and current compensation levels across our companyCompany and recommendations of the Compensation Committee’s compensation consultant, including analyses of executive and director compensation paid at otherthe comparative group of companies identified(with such group of companies developed by Radford and agreed upon by the consultant.Compensation Committee).
Compensation Committee Interlocks and Insider Participation None of the members of the Compensation Committee is currently or has been at any time one of our officers or employees. None of our executive officers currently serves, or has served during the last year, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of the Board or the Compensation Committee. Report of the Compensation Committee of the Board of Directors2 The Compensation Committee, consisting solely of independent directors, has reviewed and discussed with management the Compensation Discussion and Analysis (“CD&A”) contained in this Proxy Statement. Based on this review and discussion, the Compensation Committee has recommended to the Board that the CD&A be included in this Proxy Statement and incorporated into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020. Eric L. Dobmeier Roy Baynes Carol S. Gallagher Nominating and Corporate Governance Committee The Board has determined that each member of the Nominating and Corporate Governance Committee is independent under the Nasdaq listing standards. The primary functions of this committee include: ·
| reviewing periodically and evaluating director performance on the Board and its applicable committees, and recommending to the Board and management areas for improvement;
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periodically reviewing and evaluating director performance on the Board and its committees, and recommending to the Board and management areas for improvement; ·
| interviewing, evaluating, nominating and recommending individuals for membership on the Board;
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interviewing, evaluating, nominating and recommending individuals for membership on the Board and its committees; ·
| reviewing and recommending to the Board any amendments to our corporate governance policies; and
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reviewing and recommending to the Board any amendments to our corporate governance policies; and ·
| reviewing and assessing, at least annually, the performance of the Nominating and Corporate Governance Committee and the adequacy of its charter.
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reviewing and assessing, at least annually, the performance of the Nominating and Corporate Governance Committee and the adequacy of its charter. The Nominating and Corporate Governance Committee has authority to engage advisors or consultants (including legal counsel or other experts or consultants,and search firms), as it deems appropriate to carry out its responsibilities. The Board has adopted a written Nominating and Corporate Governance Committee charter that is available to stockholders on our website at http://investors.atarabio.com/corporate-governance.cfm.corporate-governance. 11
The Nominating and Corporate Governance Committee believes that candidates for director should have certain minimum qualifications, including the ability to read and understand basic financial statements, being over 21 years of age and having the highest personal integrity and ethics. TheIn evaluating director nominee candidates, the Nominating and Corporate Governance Committee typically also intends to considerconsiders factors such factors asas: possessing relevant expertise upon which to be able to offer advice and guidance to management, having sufficient time to devote to our affairs, demonstrated excellence in his or hertheir field, having the ability to exercise sound business judgment and having the commitment to rigorously represent the long-term interests of our stockholders.stockholders and other factors is deems appropriate given then-current needs of the Board and Atara, to maintain a balance of knowledge, experience and capability. However, the Nominating and Corporate Governance Committee retains the right to modify thesethe above qualifications from time to time. The Board believes that diversity of viewpoints, background, experience and other characteristics, such as race, gender, ethnicity, sexual orientation, culture and nationality, are an important part of its makeup, and the Nominating and Corporate Governance Committee and the Board actively seek these characteristics in identifying director candidates. 2 | The material in this report is not “soliciting material,” is being furnished and shall not be deemed “filed” with the Commission and is not to be incorporated by reference in any filing of Atara under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. |
Candidates for director nominees are reviewed in the context of the current composition of the Board, our operating requirements, Nasdaq listing standards, applicable law and regulations and the long-term interests of stockholders. In conducting this assessment, theThe Nominating and Corporate Governance Committee typically considers diversity, age, skillsalso determines whether a nominee is independent for Nasdaq purposes based upon Nasdaq listing standards, SEC rules and such other factors as it deemsregulations and the advice of counsel, if necessary. The Nominating and Corporate Governance Committee conducts any appropriate givenand necessary inquiries into the current needsbackgrounds and qualifications of potential director candidates. The Nominating and Corporate Governance Committee meets to discuss and consider the Boardcandidates’ qualifications and Atara,ultimately recommend director nominees to maintain a balance of knowledge, experience and capability. the Board. In the case of incumbent directors whose terms of office are set to expire, the Nominating and Corporate Governance Committee reviews these directors’ overall service to Atara during their terms, including the number of meetings attended, level of participation, quality of performance and any other relationships and transactions that might impair the directors’ independence. In the case of new director candidates, the Nominating and Corporate Governance Committee also determines whether the nominee is independent for Nasdaq purposes, which determination is based upon applicable Nasdaq listing standards, applicable SEC rules and regulations and the advice of counsel, if necessary. The Nominating and Corporate Governance Committee then uses its network of contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm. The Nominating and Corporate Governance Committee conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of the Board. The Nominating and Corporate Governance Committee meets to discuss and consider the candidates’ qualifications and then selects a nominee for recommendation to the Board by majority vote. The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate was recommended by a stockholder. Stockholders who wish to recommend individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the Board may do so by delivering a written recommendation to the Nominating and Corporate Governance Committee at the following address: 611 Gateway Blvd., Suite 900, South San Francisco, CA 94080 not less than six months prior to any meeting at which directors are to be elected. Submissions must include the full name of the proposed nominee, a description of the proposed nominee’s business experience for at least the previous five years, complete biographical information, a description of the proposed nominee’s qualifications as a director and a representation that the nominating stockholder is a beneficial or record holder of our common stock and has been a holder for at least one year. Any such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director if elected. Research and Development Committee The Research and Development Committee provides advice and support to the Company in relation to the Company’s research and development activities and strategy. The primary function of this committee is to confer with the Chief Executive Officer and the Company’s research and development leadership team regarding: the Company’s research and development activities and strategy; significant emerging regulatory, research, scientific, and medical trends and developments relevant to the Company’s research and development activities and strategy, including their potential impact on the Company’s programs or plans; infrastructure and resources made available by the Company for its research and development activities and clinical trial programs; and research and development, scientific, medical and intellectual property aspects of any proposed material transactions such as significant investments, acquisitions and licenses. The Board has adopted a written Research and Development Committee charter that is available to stockholders on our website at http://investors.atarabio.com/corporate-governance. Stockholder Communications with the Board The Board has adopted a formal process by which stockholders may communicate with the Board or any of its directors. This information is available on our website at http://investors.atarabio.com/corporate-governance.cfm.corporate-governance. Any interested person may however,also communicate directly with the presiding lead directorchair of the Board or the independent or non-managementnon-employee directors. Persons interested in communicating directly with the independent or non-managementnon-employee directors regarding their concerns or issues are referred to the procedures for such communications on our website at http://investors.atarabio.com/contactboard.cfm.contact-board.
Code of Conduct The Board has adopted a code of conduct that applies to all of our corporate employees, officers and directors, including those officers and employees responsible for financial reporting. Our code of conduct is available on our website at http://investors.atarabio.com/corporate-governance.cfm.corporate-governance. We intend to disclose any amendments to this policy, or any waivers of its requirements, on our website or in public filings to the extent required by applicable SEC rules or exchange requirements. Corporate Governance Guidelines The Board has adopted Corporate Governance Guidelines to assure that the Board will have the necessary authority and practices in place to review and evaluate our business operations as needed and to make decisions that are independent of our management. The guidelines are also intended to align the interests of directors and management with those of our stockholders. The Corporate Governance Guidelines set forth the practices the Board intends to follow with respect to board composition and selection, board meetings and involvement of senior management, Chief Executive Officer performance evaluation and succession planning, and board committees and compensation. The Corporate Governance Guidelines also formalize the Board’s belief that a diversity of viewpoints, background, experience and other characteristics, such as race, gender, ethnicity, sexual orientation, culture and nationality, are an important part of its makeup, and that it actively seeks these characteristics in identifying director candidates. Our Corporate Governance Guidelines are available on our website at http://investors.atarabio.com/corporate-governance.cfm.corporate-governance. 12Stock Ownership Guidelines
In December 2020, the Board approved Stock Ownership Guidelines for our directors and named executive officers to further align their financial interests with those of our stockholders, as well as promote sound corporate governance. For a detailed description of our Stock Ownership Guidelines see “Other Compensation Policies and Guidelines – Stock Ownership Guidelines” below. Hedging Policy The Company’s policies prohibit all employees (including executive officers) and directors from engaging in short sales, transactions in put or call options, hedging transactions or similar inherently speculative transactions with respect to our stock at any time. Clawback Policy In December 2020, the Board adopted an Incentive Compensation Recoupment Policy (“Clawback Policy”). For a detailed description of our Clawback Policy see “Other Compensation Policies and Guidelines – Clawback Policy” below. Environmental, Social and Governance Our approach to Environmental, Social and Governance (“ESG”) factors is consistent with our mission and our corporate values. We are committed to conducting our business in a safe and environmentally sustainable manner that promotes the health of our employees, our customers, our community and the environment. Governance We are committed to good corporate governance and to conduct our business in an ethical manner. We have adopted numerous policies and guidelines to facilitate legal and ethical conduct and to further align the interests of our employees and directors with our stockholders and other key stakeholders, including the patients we serve. For a detailed description of several of these policies and guidelines, see “Information Regarding the Board of Directors and Corporate Governance” above. Environmental Sustainability We are committed to operating our facilities in an environmentally responsible way to reduce environmental impacts and protect our people, our business, the environment and the communities where we operate. In light of the potential impact our business may have on the environment, we have set goals and adopted a number of internal policies and management systems designed to eliminate, reduce, or substitute hazardous materials and waste and reduce water and energy consumption. For
example, our Thousand Oaks, CA manufacturing facility: (i) is LEED certified (LEED V.3 BD+C Certified Core & Shell); (ii) is California Energy Commission Title 24 compliant for building and interior improvements; and (iii) has equipment and systems in place designed to ensure operational and energy efficiency. Supplier Code of Conduct We are committed to maintaining the highest standards of legal and ethical conduct and to reflect our corporate values of transparency, respect, accountability, integrity and trust (“TRAIT”). We expect our suppliers to demonstrate a similar commitment to legal and ethical business practices. In 2020, we developed and implemented the Atara Supplier Code of Conduct to convey our minimum expectations for our suppliers, and their respective subcontracts and suppliers, to: (i) operate in full compliance with all laws, rules and regulations; (ii) conduct business ethically and act with integrity; (iii) uphold the human rights of workers and to treat workers with dignity and respect; (iv) provide a safe and healthy working environment; and (v) operate in an environmentally responsible and efficient manner. COVID-19 Response During the COVID-19 pandemic, to support the health, safety and engagement of our staff and to ensure business continuity, we enacted numerous safeguards, such as: (i) reduction of on-site staff presence to essential activities and implemented remote work for non-essential activities; (ii) established engineering controls and business processes to reduce risk of on-site transition and preventing “super-spreader” events through physical distancing, enhanced cleaning and hygiene, and providing our staff with personal protective equipment; (iii) created an on-site COVID-19 monitoring program and an at-home testing program; and (iv) designed and executed a rapid and transparent communication and education strategy to ensure our staff has all relevant scientific data at the local, regional and national level. In February 2020, we established a COVID-19 Rapid Response Team (“RRT”), sponsored by two Company executives, to assess and address business risks associated with the COVID-19 pandemic. The RRT created clear and regular communications channels, ensured enhanced cleaning and sanitation at our facilities, assessed the impact to our operations, donors, vendors, and clinical trial sites globally, as well as monitored peer companies’ approaches to apply best practices to our processes and decisions. We have established a team tasked with creating a return-to-office plan to ensure staff safety and business continuity for the transition back to our offices and facilities. We intend to adopt several new work arrangement models to facilitate, where appropriate, workplace flexibility and to support our return-to-office plan safely and effectively. In addition to promoting productivity and efficiency, we believe these new work arrangement models will reduce the environmental impact of our business and operations. Our continued efforts throughout the COVID-19 pandemic have reinforced our commitment to staff safety and serving patients by maintaining business continuity and executing on our commitment to develop transformative therapies for patients with serious diseases, including solid tumors, hematologic cancers and autoimmune diseases. We believe going above and beyond to mitigate the risk of COVID-19 to on-site staff and other stakeholders exemplifies our TRAIT values. TRAIT Values and Diversity We have formalized a set of corporate values to guide us in how we conduct our business and execute our corporate strategy. ![](https://capedge.com/proxy/DEF 14A/0001564590-21-020128/ga5ozxl324dc000002.jpg)
Consistent with our TRAIT values, we believe a diverse and inclusive culture supports our ability to serve patients. We encourage all of our employees to participate in our diversity, inclusion and belonging initiatives to strengthen and grow our diverse and inclusive culture, which include educational webinars, cultural engagement events, fireside chats and a robust set of diversity, inclusion and belonging courses available through LinkedIn Learning. We also have an employee resource group, the Atara Women’s Alliance, the mission of which is to strengthen the leadership, voices and impact of women and to create an inclusive environment where diverse viewpoints and backgrounds are valued. In addition, our Board meets the current diversity requirements specified under California law and it is our expectation we will continue to meet such requirements in future periods. Employee Engagement We conduct employee feedback surveys on a regular basis that are designed to help us measure overall employee engagement. These surveys help us assess our culture and the feedback helps us in building a great company to work for and provides important insight into the areas we may need to focus on. The surveys will continue to be leveraged to support measuring our progress on the Company’s important initiatives and adherence to our TRAIT values.
PROPOSAL 2 Advisory Vote on Executive Compensation Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), and Section 14A of the Exchange Act, the Company’s stockholders are entitled to vote to approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed in this Proxy Statement in accordance with SEC rules. This vote is not intended to address any specific item of compensation, but rather the overall compensation of the Company’s named executive officers and the philosophy, policies and practices described in this Proxy Statement. The compensation of the Company’s named executive officers subject to the vote is disclosed in the Compensation Discussion and Analysis, the compensation tables, and the related narrative disclosure contained in this Proxy Statement. As discussed in those disclosures, the Company believes that its compensation policies and decisions are designed to meet two objectives: (i) to attract and retain talented and skilled executives by paying for performance; and (ii) to align compensation of our executives with our stockholders through an appropriate mix of short-term and long-term compensation. Compensation of the Company’s named executive officers is designed to enable the Company to attract and retain talented and experienced executives to lead the Company successfully in a competitive environment. Accordingly, the Board is asking the stockholders to indicate their support for the compensation of the Company’s named executive officers as described in this Proxy Statement by casting a non-binding advisory vote “FOR” the following resolution: “RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion that accompanies the compensation tables, is hereby APPROVED.” Because the vote is advisory, it is not binding on the Board or the Company. Nevertheless, the views expressed by the stockholders, whether through this vote or otherwise, are important to the Board and the Compensation Committee, and accordingly the Board and the Compensation Committee intend to consider the results of this vote in making determinations in the future regarding executive compensation arrangements. Advisory approval of this proposal requires the vote of the holders of a majority of the shares present in person, present by remote communications, if applicable, or represented by proxy and entitled to vote on the matter at the annual meeting. Unless the Board decides to modify its policy regarding the frequency of soliciting advisory votes on the compensation of the Company’s named executives, the next scheduled say-on-pay vote will be at the 2022 Annual Meeting of Stockholders. The Board Of Directors Recommends A Vote In Favor Of Proposal 2
PROPOSAL 3 RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee has selected Deloitte & Touche LLP (“Deloitte & Touche”) as our independent registered public accounting firm for the fiscal year ending December 31, 20162021 and has further directed that management submit the selection of its independent registered public accounting firm for ratification by the stockholders at the annual meeting.Annual Meeting. Deloitte & Touche has audited our financial statements since our inception in 2012. Representatives of Deloitte & Touche are expected to be present at the annual meeting.Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions. Neither our Bylaws nor other governing documents or law require stockholder ratification of the selection of Deloitte & Touche as our independent registered public accounting firm. However, the Audit Committee is submitting the selection of Deloitte & Touche to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of different independent auditors at any time during the year if they determine that such a change would be in the best interests of Atara and our stockholders. The affirmative vote of the holders of a majority of the shares present in person, present by remote communications, if applicable, or represented by proxy and entitled to vote on the matter at the annual meetingAnnual Meeting will be required to ratify the selection of Deloitte & Touche. Principal Accountant Fees and Services The following table represents aggregate fees billed to us for 20152020 and 20142019 by Deloitte & Touche. | | Fiscal Year Ended December 31, | | | Fiscal Year Ended December 31, | | | | 2015 | | | 2014 | | | 2020 | | | 2019 | | | | (in thousands) | | | (in thousands) | | Audit fees(1) | | $ | 875 | | | $ | 1,209 | | | $ | 1,220 | | | $ | 1,041 | | Audit-related fees | | | — | | | | — | | | - | | | - | | Tax fees | | | — | | | | — | | | - | | | - | | All other fees | | | — | | | | — | | | - | | | | - | | Total fees | | $ | 875 | | | $ | 1,209 | | | $ | 1,220 | | | $ | 1,041 | |
Audit Fees.
(1) | Audit fees. Audit fees consist of fees for services rendered in connection with the audits of our annual financial statements and reviews of our interim financial statements, services rendered in connection with the filing of our registration statements, including our Registration Statement on Form S-1 related to our initial public offering in 2014, and the issuance of comfort letters and consents. |
All fees described above were pre-approved by the Audit Committee. Pre-Approval Policies and Procedures The Audit Committee has adopted a policy and procedures for the pre-approval of audit and non-audit services rendered by Deloitte & Touche. The policy generally pre-approves specified services in the defined categories of audit services, audit-related services and tax services up to specified amounts. Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent auditor or on an individual, explicit, case-by-case basis before the independent auditor is engaged to provide each service. The pre-approval of services may be delegated to one or more of the Audit Committee’s members, but the decision must be reported to the full Audit Committee at its next scheduled meeting. The Audit Committee has determined that the rendering of services other than audit services by Deloitte & Touche is compatible with maintaining the principal accountant’s independence. THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2.3 13
PROPOSAL 3
Approval of the amended and restated 2014 Equity Incentive PLan
General
We are asking our stockholders to approve the 2014 Equity Incentive Plan, as amended and restated (which we refer to as the 2014 EIP) in order to increase the number of authorized shares available under the 2014 EIP and update the 2014 EIP to reflect certain practices generally requested by stockholders in today’s market. The current terms of the 2014 EIP are identical to the terms of the plan that stockholders approved on June 2, 2014.
Background for Proposal
Increase Maximum Number of Authorized Shares: The 2014 EIP sets forth a maximum number of shares authorized for issuance under the 2014 EIP. We are asking stockholders to approve an increase in the maximum number of authorized shares. Specifically, the Board is requesting that stockholders approve increasing each of these authorizations by 4,000,000 shares. These 4,000,000 shares represent 14% of our outstanding shares of common stock as of March 31, 2016. If approved by stockholders, the number of additional shares authorized for issuance under the 2014 EIP may all be issued pursuant to restricted stock units or restricted stock awards, which may result in greater dilution than if such shares were subject to stock options or stock appreciation rights granted under the 2014 EIP.
Equity Plan Share Reservation
| | Shares (Millions)
| Beginning shares authorized under the 2014 EIP (less shares that represented the prior plans’ available reserve*)
| | 2.23
| Shares that represented the prior plans’ available reserve as of March 31, 2014
| | 1.29
| New shares authorized under the 2014 EIP annual “evergreen” increase (plan inception to present)
| | 2.45
| Total shares authorized to date under the 2014 EIP
| | 5.97
| Less: shares issued or issuable under awards granted from plan inception through March 31, 2016
| | (5.46)
| Shares added back to share reserve as a result of forfeitures from plan inception through March 31, 2016
| | 0.33
| Shares available for grant as of March 31, 2016
| | 0.84
| Additional shares requested under this proposal
| | 4.00
| Estimated total shares available for issuance from March 31, 2016 through March 31, 2024 (if proposal is approved, assuming no cancellation of outstanding awards and assuming future annual “evergreen” increases are consistent with the January 1, 2016 annual “evergreen” increase)
| | 16.31
| Total authorization of shares from plan inception through March 31, 2024 (if proposal is approved)
| | 21.45
| *As of the adoption of the 2014 EIP, we maintained existing equity plans – the 2012 Equity Incentive Plan of Nina Biotherapeutics, Inc., the 2012 Equity Incentive Plan of Pinta Biotherapeutics, Inc. and the 2012 Equity Incentive Plan of Santa Maria Biotherapeutics, Inc., which were assumed by us in connection with a certain recapitalization.
| | |
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Section 162(m) Re-Approval: The 2014 EIP is being submitted to our stockholders to ensure that certain awards granted under the 2014 EIP that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code may so qualify. Generally, Section 162(m) does not permit a tax deduction for compensation in excess of $1 million paid in any calendar year by a publicly held company to its chief executive officer or any of the three other most highly compensated executive officers (other than the principal financial officer). However, certain compensation, including compensation based on the attainment of performance goals, is excluded from this deduction limit if certain criteria are satisfied, including that the material terms pursuant to which the compensation is to be paid is disclosed to and approved by the company’s stockholders. Accordingly, if the 2014 EIP, including the list of performance criteria applicable under the 2014 EIP for awards intended to qualify as performance-based under Section 162(m), is approved by stockholders and other conditions of Section 162(m) are satisfied, certain compensation paid to the above individuals pursuant to the 2014 EIP should not be subject to the deduction limit of Section 162(m). Because of the fact-based nature of the performance-based compensation exception under Section 162(m) and the limited availability of formal guidance thereunder, we cannot guarantee that any awards under the 2014 EIP intended to qualify for exemption under Section 162(m) will actually receive this treatment. However, the 2014 EIP is structured with the intention that our Compensation Committee will have the discretion to make awards under the 2014 EIP that would qualify as “performance-based compensation” and be fully deductible. At the annual meeting, our stockholders are being requested to further qualify the 2014 EIP for purposes of Section 162(m), including re-approval of the performance criteria applicable under the 2014 EIP for awards intended to qualify as performance-based compensation under Section 162(m).
Background of Equity Compensation at Atara
Atara grants equity awards to more than 90% of our employees annually in the first quarter of the year. In 2015, we granted equity awards covering 2.7 million shares under the 2014 EIP, of which awards for 0.7 million shares, or 26.1%, were granted to our listed officers; awards for 0.1 million shares, or 5.4%, were granted to our non-employee directors and consultants; and awards for 1.9 million shares, or 68.5%, were granted to our broad-based employee population. Generally, the company grants a mix of options to purchase common stock and restricted stock units to all our employees. The intention of equity awards is to incentivize employees. Because of volatility in the biotherapeutics market, we believe restricted stock units are an important component of our equity compensation as they address this volatility and ensure our employees remain incentivized.
As noted above, the potential dilution from the 4,000,000 share increase requested to be approved by stockholders is 13.9%, based on the total common shares outstanding as of March 31, 2016. Since the 2014 EIP was put into effect, the average annual dilution was 5.8%. We manage our long-term dilution goal by limiting the number of shares subject to equity awards that we grant annually, commonly referred to as burn rate. Burn rate is another measure of dilution that shows how rapidly a company is depleting its shares reserved for equity compensation plans, and differs from annual dilution because it does not take into account cancellations. Since the 2014 EIP was put into effect, our annual burn rate has averaged 6.3%. For this purpose, we are calculating both dilution and burn rate based upon total common shares outstanding at the end of the year, to align more closely with industry practice.
An additional metric that we use to measure the cumulative impact of the 2014 EIP is overhang (number of shares subject to equity awards outstanding but not exercised, plus number of shares available to be granted, divided by total common shares outstanding at the end of the year). Since the 2014 EIP was put into effect, our overhang has averaged 15.2%. If the amendment of the 2014 EIP is approved, our overhang would increase to 32.4%.
Equity Compensation Plan Key Metrics
| | 2016* (%) | | 2015 (%) | | 2014** (%) | | | Weighted Average (%) | Percentage of Awards Granted to Named Executive Officers | | 28.2 | | 26.1 | | 32.1 | | | 28.6 | Dilution | | 3.2 | | 8.8 | | 2.8 | | | 5.8 | Burn Rate | | 3.3 | | 9.5 | | 3.2 | | | 6.3 | Overhang | | 18.4 | | 13.6 | | 16.1 | | | 15.2 |
* Partial year, January 1, 2016 – March 31, 2016
** Partial Year, March 31, 2014 – December 31, 2014
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In considering the proposed amendments to the 2014 EIP, the Compensation Committee was presented with information on Atara’s historical dilution, burn rate, and overhang. In addition, the Compensation Committee considered the development timelines for our lead product candidate, Epstein Bar Virus cytotoxic T-lymphocyte for post-transplant lymphoproliferative disorder, or EBV-CTL for PTLD, after hematopoetic cell transplant, or HCT, or solid organ transplant, or SOT. Because the EBV-CTL for PTLD received breakthrough therapy designation from the U.S. Food and Drug Administration, or FDA, and the European Medicines Agency, or EMA, the early access program is expected to begin in the first half of 2016 and the pivotal trials for the HCT and SOT indications are expected to commence in late 2016. Due to this accelerated development timeline, if EBV-CTL is approved by the FDA or EMA, it is possible that our EBV-CTL product could be commercialized within the next three years. Commercialization of a drug in the U.S. or Europe requires additional resources and infrastructure. In order to be in a position to build the infrastructure and resources needed to launch an approved product, our organization will need to grow in a short time frame. This growth will include expansion of existing departments as well as the creation and growth of new departments, including a medical affairs department and a commercial department. The Compensation Committee considered this fast expansion in headcount when evaluating the proposed amendment to the 2014 EIP. Taking into account Atara’s broad-based equity grant practices and the foregoing information, Atara believes that the additional share authorization requested is appropriate to support the expected growth of the organization.
2014 EIP Description
Administration: Under the terms of the 2014 EIP, the Board of Directors (and, through delegation, the Compensation Committee) has the power (i) to determine who will be granted Awards (as defined in the 2014 EIP); when and how each Award will be granted; what type of Award will be granted; the provisions of each Award; the number of shares of Common Stock (as defined in the 2014 EIP) subject to, or the cash value of, an Award; and the fair market value applicable to a stock award; (ii) to construe and interpret the 2014 EIP and awards granted under it, and to establish, amend and revoke rules and regulations for administration of the 2014 EIP and awards; (iii) to settle all controversies regarding the 2014 EIP and awards granted under it; (iv) in corporate transactions and change of control situations, to accelerate, in whole or in part, the time at which an award may be exercised or vest (or at which cash or shares of Common Stock may be issued); (v) to suspend or terminate the 2014 EIP at any time; provided that such action generally does not materially impair a participant’s rights under his or her then-outstanding award without his or her written consent; (vi) to amend the 2014 EIP in any respect the Board of Directors deems necessary or advisable, including, without limitation, adopting amendments relating to incentive stock options and nonqualified deferred compensation under Section 409A of the Code (as defined in the 2014 EIP) and/or making the 2014 EIP or awards granted under the 2014 EIP exempt from or compliant with the requirements for incentive stock options or exempt from or compliant with the requirements for nonqualified deferred compensation under Section 409A of the Code, subject to the limitations, if any, of applicable law; (vii) to submit any amendment to the 2014 EIP for stockholder approval, including, but not limited to, amendments to the 2014 EIP intended to satisfy the requirements of (A) Section 162(m) of the Code regarding the exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to “Covered Employees,” (B) Section 422 of the Code regarding incentive stock options or (C) Rule 16b-3 of U.S. Securities Exchange Act of 1934 or any successor rule; (viii) to approve forms of award agreements for use under the 2014 EIP and to amend the terms of any one or more outstanding awards; (ix) generally, to exercise such powers and to perform such acts as the Board of Directors deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the 2014 EIP and/or award agreements; (x) to adopt such procedures and sub-plans as are necessary or appropriate (A) to permit or facilitate participation in the 2014 EIP by participants who are foreign nationals or employed outside the United States or (B) allow awards to qualify for special tax treatment in a foreign jurisdiction; provided that Board of Director approval will not be necessary for immaterial modifications to the 2014 EIP or any award agreement that are required for compliance with the laws of the relevant foreign jurisdiction; and (xi) to effect, with the consent of any adversely affected participant, (A) the reduction of the exercise, purchase or strike price of any outstanding stock award; (B) the cancellation of any outstanding stock award and the grant in substitution therefore of a new (1) stock option or stock appreciation right, (2) restricted stock award, (3) restricted stock unit award, (4) other stock award, (5) cash award and/or (6) award of other valuable consideration determined by the Board of Directors, in its sole discretion, with any such substituted award covering the same or a different number of shares of Common Stock as the cancelled stock award and granted under the 2014 EIP or another equity or compensatory plan of the Company; or (C) any other action that is treated as a repricing under generally accepted accounting principles.
Ability to Permit Deferrals: Under the terms of the 2014 EIP, to the extent permitted by applicable law, the Board of Directors, in its sole discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any award may be deferred and may establish programs and procedures for deferral elections to be made by participants. Deferrals by participants will be made in accordance with Section 409A of the Code (to the extent applicable to a participant). Consistent with Section 409A of the Code, the Board of Directors may provide for distributions while a participant is still an employee or otherwise providing services to the Company. The Board of Directors is authorized to make deferrals of awards and determine when, and in what annual percentages participants may receive payments, including lump sum payments, following the participant’s termination of continuous service, and implement such other terms and conditions consistent with the provisions of the 2014 EIP and in accordance with applicable law.
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Adjustments Upon Changes in Control in Common Stock; Other Corporate Events: Under the terms of the 2014 EIP, in the event of a capitalization adjustment, the Board of Directors will appropriately and proportionately adjust the classes and maximum number of securities subject to the 2014 EIP, including the price per share of stock subject to outstanding stock awards as applicable. Except as otherwise provided in the stock award agreement, in the event of a dissolution or liquidation of the Company, all outstanding stock awards (other than stock awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Company’s right of repurchase) will terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common Stock subject to the Company’s repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that the holder of such stock award is providing continuous service; provided, however, that the Board of Directors may, in its sole discretion, cause some or all stock awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such stock awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion. In the event of a “Corporate Transaction” (as defined in the 2014 EIP and summarized below under the heading “Corporate Transactions”), the Board of Directors will take one or more of the following actions with respect to stock awards, contingent upon the closing or completion of the Corporate Transaction: (i) arrange for the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) to assume or continue the stock award or to substitute a similar stock award for the stock award (including, but not limited to, an award to acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction); (ii) arrange for the assignment of any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to the stock award to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company); (iii) accelerate the vesting of the stock award (and, if applicable, the time at which the stock award may be exercised) to a date prior to the effective time of such Corporate Transaction as the Board of Directors will determine (or, if the Board of Directors will not determine such a date, to the date that is 5 days prior to the effective date of the Corporate Transaction), with such stock award terminating if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction; (iv) arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by the Company with respect to the stock award; (v) cancel or arrange for the cancellation of the stock award, to the extent not vested or not exercised prior to the effective time of the Corporate Transaction, in exchange for such cash consideration, if any, as the Board, in its sole discretion, may consider appropriate; and (vi) cancel or arrange for the cancellation of the stock award in exchange for a payment in such form as may be determined by the Board of Directors equal to the excess, if any, of (A) the value of the property the participant would have received upon the exercise of the stock award immediately prior to the effective time of the Corporate Transaction, over (B) any exercise price payable by such holder in connection with such exercise. In the absence of any affirmative determination by the Board of Directors at the time of a Corporate Transaction, each outstanding stock award will be assumed or an equivalent stock award will be substituted by such successor corporation or a parent or subsidiary of such successor corporation, unless the successor corporation does not agree to assume the stock award or to substitute an equivalent stock award, in which case such stock award will terminate upon the consummation of the transaction. In the event of a “Change in Control” (as defined in the 2014 EIP), a stock award may be subject to additional acceleration of vesting and exercisability upon or after a Change in Control as may be provided in the stock award agreement for such stock award or as may be provided in any other written agreement between the Company or any affiliate and the participant, but in the absence of such provision, no such acceleration will occur.
Awards and Eligibility: The 2014 EIP provides for the grant of stock options, stock appreciation rights restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards, and other stock awards. All employees of the Company (approximately 60 people), consultants of the Company (approximately 14 people) and non-employee directors of the Company (currently six people) are eligible to participate in the 2014 EIP. The persons to whom awards will be granted and the terms thereof are determined by the Compensation Committee. The bases on which individuals receive actual awards will depend on a number of factors, including an individual’s potential contribution to the business, compensation practices at the time, retention issues and the Company’s stock price.
Shares Available: 836,815 shares remain available for the grant of awards under the 2014 EIP as of March 31, 2016 and the closing per-share sales price of our Common Stock on that date as reported on Nasdaq was $19.03. If an award (or any portion of an award) under the 2014 EIP (i) expires or otherwise terminates without all of the shares covered by the award having been issued or (ii) is settled in cash (i.e., the participant receives cash rather than stock), such expiration, termination or settlement does not reduce (or otherwise offset) the number of shares that are available for issuance under the 2014 EIP. If any shares issued under an award are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required to vest such shares, then the shares that are forfeited or repurchased will revert to and again become available for issuance under the 2014 EIP. Any shares reacquired by the Company in satisfaction of tax withholding obligations on an award or as consideration for the exercise or purchase price of an award will again become available for issuance under the 2014 EIP.
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Maximum Grants under the 2014 EIP: At such time as the Company is subject to limitations under Section 162(m) of the Code, (a) a maximum of 3,000,000 shares of Common Stock subject to stock options, stock appreciation rights and similarly structured other stock awards may be granted to any one participant during any one calendar year; (b) no individual may be granted greater than 3,000,000 shares of Common Stock subject to Performance Stock Awards during any one calendar year (whether the grant, vesting or exercise is contingent upon the attainment during the performance period of the performance goals); and (c) a maximum of $2,000,000 may be granted as a performance cash award to any one participant during any one calendar year.
Director Limitation: We are asking stockholders to approve an amendment that would add annual maximum limitations to awards to our non-employee directors. Under this amendment, the maximum number of shares subject to awards granted during a single fiscal year to any non-employee director under the plan and under any other Company equity plan, taken together with any cash fees paid to such non-employee director during the fiscal year, would not exceed $1,500,000 in total value (calculating the value of any such awards based on the grant date fair value of such awards for financial reporting purposes and excluding, for this purpose, the value of any dividend equivalent payments paid pursuant to any award granted in a previous fiscal year).
Performance Goals: Unless otherwise permitted in compliance with the requirements of Section 162(m) of the Code with respect to an award intended to qualify as “performance-based compensation” thereunder, the Compensation Committee will establish the performance goals applicable to, and the formula for calculating the amount payable under, performance-based awards no later than the earlier of (a) the date 90 days after the commencement of the applicable performance period, and (b) the date on which 25% of the performance period has elapsed, and in any event at a time when the achievement of the applicable performance goals remains substantially uncertain. Prior to the payment of any compensation under an award intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Compensation Committee will certify in writing the extent to which any performance goals and any other material terms under such award have been satisfied (other than in cases where such relate solely to the increase in the value of the Common Stock). Notwithstanding satisfaction of any completion of any performance goals, the number of shares of Common Stock, stock options, cash or other benefits granted, issued, retainable and/or vested under an award on account of satisfaction of such performance goals may be reduced by the Compensation Committee on the basis of such further considerations as the Compensation Committee, in its sole discretion, will determine.
Options and Stock Appreciation Rights: Options to purchase shares of Common Stock and stock appreciation rights each may be granted under the 2014 EIP, either alone or in addition to other awards, in consideration (in whole or in part) for the performance of services. The exercise price per share may not be less than the closing sales price per share as reported on the Nasdaq on the date of grant. The term of each stock option and stock appreciation right is fixed by the Compensation Committee in its sole discretion, but no stock option or stock appreciation right may be exercised more than ten years after the date the option is granted. Stock options and stock appreciation rights are exercisable at such time or times as determined by the Compensation Committee. Subject to the other provisions of the 2014 EIP and any applicable award agreement, any stock option may be exercised by the participant upon payment by delivery of cash, shares of Common Stock or by any combination thereof. To exercise any outstanding stock appreciation right, the participant must provide written notice of exercise to the Company in compliance with the provisions of the stock appreciation right agreement evidencing such stock appreciation right. The appreciation distribution payable on the exercise of a stock appreciation right will be not greater than an amount equal to the excess of (A) the aggregate fair market value (on the date of the exercise of the stock appreciation right) of a number of shares of Common Stock equal to the number of Common Stock equivalents in which the participant is vested under such stock appreciation right (with respect to which the participant is exercising the stock appreciation right on such date), over (B) the aggregate strike price of the number of Common Stock equivalents with respect to which the participant is exercising the stock appreciation right on such date. The appreciation distribution may be paid in Common Stock, in cash, in any combination of the two or in any other form of consideration, as determined by the Compensation Committee and contained in the award agreement evidencing such stock appreciation right. In general, if a participant’s employment or service as a director terminates, other than by reason of retirement, death or disability, all of the participant’s unexercisable options and stock appreciation rights are forfeited and all exercisable options and stock appreciation rights may be exercised within 3 months following termination or they will expire. In the event of termination because of death or disability, all of the participant’s unexercisable options and stock appreciation rights are forfeited and all exercisable options may be exercised within 18 or 12 months following termination because of death or disability, respectively, or they will expire.
Restricted Stock: Restricted stock awards may be issued to participants for (a) cash, check, bank draft or money order payable to the Company, (b) past services to the Company or an affiliate, or (c) any other form of legal consideration (including future services) permissible under applicable law, either alone or in addition to other awards granted under the 2014 EIP. Shares of Common Stock awarded under a restricted stock award agreement may be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the Compensation Committee.
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Performance Stock Awards: The Compensation Committee may grant performance stock awards under the 2014 EIP. A performance stock award is a stock award payable contingent upon the attainment during a performance period of certain performance goals. A performance stock award may, but need not, require the completion of a specified period of continuous service. The length of any performance period, the performance goals to be achieved during the performance period, and the measure of whether and to what degree such performance goals have been attained will be conclusively determined by the Board of Directors or the Compensation Committee in their sole discretion. To the extent permitted by applicable law and the applicable award agreement, the Compensation Committee may determine that cash may be used in payment of performance stock awards.
Performance Cash Awards: The Compensation Committee may grant performance cash awards under the 2014 EIP. A performance cash award is a cash award payable contingent upon the attainment during a performance period of certain performance goals. A performance cash award may also require the completion of a specified period of continuous service. At the time of grant of a performance cash award, the length of any performance period, the performance goals to be achieved during the performance period, and the measure of whether and to what degree such performance goals have been attained will be conclusively determined by the Board of Directors or the Compensation Committee in their sole discretion. The Compensation Committee may specify the form of payment of performance cash awards, which may be cash or other property, or may provide for a participant to have the option for his or her performance cash award, or such portion thereof as the Compensation Committee may specify, to be paid in whole or in part in cash or other property.
Restricted Stock Units: Restricted stock unit awards may be issued to participants for consideration, if any, to be paid by the participant upon delivery of each share of Common Stock subject to the restricted stock unit award as the Compensation Committee may determine. The consideration to be paid (if any) by the participant for each share of Common Stock subject to a restricted stock unit award may be paid in any form of legal consideration that may be acceptable to the Compensation Committee, in its sole discretion, and permissible under applicable law. At the time of the grant of a restricted stock unit award, the Compensation Committee may impose such restrictions on or conditions to the vesting of the restricted stock unit award as it, in its sole discretion, deems appropriate.
Other Stock Awards: Other awards of shares and other awards that are valued in whole or in part by reference to, or are otherwise based on, shares may be granted to participants, either alone or in addition to other awards granted under the 2014 EIP, and may include awards based on the achievement of pre-established performance criteria during a specified period. Other stock unit awards may be paid in shares of Common Stock, cash or any other form of property as the Compensation Committee determines.
Corporate Transactions: In the event of a Corporate Transaction, the Compensation Committee shall have discretion to accelerate the vesting of awards, eliminate restrictions, deem any performance measure to be satisfied or take such other action as it deems appropriate in its sole discretion. A Corporate Transaction shall occur upon (a) a sale or other disposition of all or substantially all, as determined by the Compensation Committee in its sole discretion, of the consolidated assets of the Company and any subsidiaries; (b) a sale or other disposition of at least 90% of the outstanding securities of the Company; (c) a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or (d) a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise. For additional description of additional potential treatments of awards in a Corporate Transaction, see the discussion under the “Adjustments Upon Changes in Control in Common Stock; Other Corporate Events” heading above.
Other Provisions: The Compensation Committee may amend, suspend or discontinue the 2014 EIP at any time, but no amendment, alteration or discontinuation may be made that would impair rights under an award previously granted without the participant’s consent. The Compensation Committee may not, without shareholder approval, amend the 2014 EIP to increase the aggregate number of shares that may be issued or transferred to participants or to any one participant, extend the term of the 2014 EIP or awards granted thereunder, change the eligibility criteria for participants or grant options at less than fair market value. The 2014 EIP will expire on March 31, 2024, and no awards may be made under the 2014 EIP after such date.
The Compensation Committee is authorized to make adjustments in performance award criteria or in the terms and conditions of other awards in recognition of unusual or nonrecurring events affecting the Company or its financial statements or changes in applicable laws, regulations or accounting principles. The 2014 EIP contains an anti-dilution provision that provides for the adjustment of the number of shares available for the grant of stock awards and certain limits under the 2014 EIP in the event of a merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other similar equity restructuring transaction.
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The foregoing summary of the material terms of the 2014 EIP is qualified in its entirety by reference to the text of the 2014 EIP, which is attached as Appendix A to this proxy statement.
Tax Consequences
The following is a brief summary of certain federal income tax consequences of certain transactions under the 2014 EIP based on federal income tax laws in effect on the date hereof. This summary is not intended to be exhaustive and does not describe state or local tax consequences.
In general, (i) no income will be recognized by an optionee at the time a nonqualified option is granted, (ii) at the time of exercise of a nonqualified option, ordinary income will be recognized by the optionee in an amount equal to the difference between the purchase price paid for the shares and the fair market value of the shares if they are non-restricted on the date of exercise and (iii) at the time of sale of shares acquired pursuant to the exercise of a nonqualified option, any appreciation (or depreciation) in the value of the shares after the date of exercise will be treated as either short-term or long-term capital gain (or loss) depending on how long the shares have been held. No income generally will be recognized by an optionee upon the grant or qualifying exercise of an incentive stock option. However, for purposes of calculating the optionee’s alternative minimum tax, if any, the difference between the fair market value of the shares at exercise and the purchase price generally constitutes an item of adjustment. If shares are issued to an optionee pursuant to the exercise of an incentive stock option and no disqualifying disposition of the shares is made by the optionee within two years after the date of grant or within one year after the transfer of the shares to the optionee, then upon the sale of the shares, any gain realized will be taxed to the optionee as long-term capital gain and any loss sustained will be a long-term capital loss. If shares acquired upon the exercise of an incentive stock option are disposed of prior to the expiration of either holding period described above, the optionee generally will recognize ordinary income in the year of disposition in an amount equal to any excess of the fair market value of the shares at the time of exercise (or, if less, the amount realized on the disposition of the shares in a sale or exchange) over the purchase price paid for the shares. Any further gain (or loss) realized by the optionee generally will be taxed as short-term or long-term gain (or loss) depending on the holding period.
A recipient of a restricted stock award generally will be subject to tax at ordinary income rates on the fair market value of the restricted shares, reduced by any amount paid for the shares by the recipient, at such time as the shares are no longer subject to a substantial risk of forfeiture or restrictions on transfer for purposes of Section 83 of the Code. However, a recipient who properly elects under Section 83(b) of the Code within 30 days of the date of transfer of the shares to the recipient will have taxable ordinary income on the date of transfer of the shares equal to the excess of the fair market value of the shares (determined without regard to the risk of forfeiture or restrictions on transfer) over any purchase price paid for the shares. If a Section 83(b) election has not been made, any dividends received with respect to restricted shares that are subject at that time to a substantial risk of forfeiture and restrictions on transfer generally will be treated as compensation that is taxable as ordinary income to the recipient.
Generally, no income will be recognized by a participant in connection with the grant of a stock unit award. Subject to the specific terms of the award, when the award is paid to the participant, the participant normally will be required to include as taxable ordinary income in the year of payment an amount equal to the amount of any cash and the fair market value of any non-restricted shares of Common Stock actually or constructively received.
To the extent that a participant recognizes ordinary income in the circumstances described above, the Company will be entitled to a corresponding deduction provided that, among other things, (i) the income meets the test of reasonableness, is an ordinary and necessary business expense and is not an “excess parachute payment” within the meaning of Section 280G of the Code and is not disallowed by the $1 million limitation under Section 162(m) and (ii) any applicable reporting obligations are satisfied.
Section 409A of the Code is applicable to certain types of awards that may be granted under the 2014 EIP. To the extent applicable, it is intended that the 2014 EIP and any grants made under the 2014 EIP comply with the provisions of Section 409A. The Company intends to administer the 2014 EIP and any grants made thereunder in a manner consistent with the requirements of Section 409A, and to adopt such amendments (including retroactive amendments) to the 2014 EIP and any grants made thereunder as may be required in order to comply with Section 409A.
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New Plan Benefits
Awards under the 2014 EIP are within the discretion of the Compensation Committee. As a result, the benefits that will be awarded under the 2014 EIP, including to our non-employee directors, are not determinable at this time and, therefore the table below shows the aggregate number and value of awards granted under the 2014 EIP during 2015.
Name and Position | | Dollar Value ($)(1) | | | Number of Securities Underlying Restricted Stock Units | | | | Number of Securities Underlying Options | Isaac Ciechanover, M.D. | | 5,164,426 | | | 38,000 | | | | 346,667 | Chief Executive Officer | | | | | | | | | | Christopher Haqq, M.D., Ph.D. | | 1,873,872 | | | 12,400 | | | | 116,333 | Chief Medical Officer | | | | | | | | | | Heather D. Turner | | 5,139,147 | | | — | | | | 195,000 | Vice President, General Counsel and Secretary | | | | | | | | | | Executive Officer Group (6 persons) | | 17,858,449 | | | 87,600 | | | | 976,999 | Non-Executive Director Group (6 persons) | | 1,881,868 | | | — | | | | 115,500 | Non-Executive Officer Employee Group (43 persons) | | 25,697,078 | | | — | | | | 1,501,175 |
(1)
| Amounts reported as the dollar value of stock and option awards do not reflect compensation actually received by the named executive officer. Instead, the amount reported is the grant date fair value calculated under FASB ASC Topic 718. The amounts shown assume that there will be no service-based forfeitures of awards. Assumptions used in the calculation of these amounts are included in the notes to our consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2015.
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History of Grants under the 2014 EIP
From the inception of the 2014 EIP through March 31, 2016, 269,230 shares of restricted stock were granted under the 2014 EIP; 3,561,933 options were granted under the 2014 EIP, 25,066 of which have been exercised, 106,385 of which have been cancelled and 3,430,482 of which remain outstanding as of March 31, 2016; 1,899,178 restricted stock units were granted under the 2014 EIP of which 1,031,521 remain outstanding as of March 31, 2016. The following table summarizes the grants made to our named executive officers, all current executive officers as a group, all current directors who are not executive officers as a group, each nominee for election as a director, each associate of any director, executive officer or nominee, each other person who received or are to receive 5% of such options, restricted stock or restricted stock units as a group, and all employees, excluding current executive officers, as a group, from the inception of the 2014 EIP through March 31, 2016.
| | | | | | | Name and Position | | Number of Options Granted | | Number of Shares of Restricted Stock Granted | | Number of Shares of Restricted Stock Units Granted | Isaac Ciechanover, M.D. | | 501,667 | | — | | 296,496 | Chief Executive Officer | | | | | | | Christopher Haqq, M.D., Ph.D. | | 166,333 | | 269,230 | | 81,566 | Chief Medical Officer | | | | | | | Heather D. Turner | | 195,000 | | — | | 48,857 | Vice President, General Counsel and Secretary | | | | | | | All current executive officers as a group (6 persons) | | 1,276,999 | | 269,230 | | 1,101,871 | All current non-executive directors as a group (6 persons) | | 178,500 | | — | | 108,363 | Matthew K. Fust (nominee for director and current non-executive director) | | 23,000 | | — | | 25,640 | Joel S. Marcus (nominee for director and current non-executive director) | | 35,500 | | — | | — | Each associate of any director, executive officer or nominee (0 persons) | | — | | — | | — | Each other person who received or is to receive 5% of such options, restricted stock or restricted stock units (0 persons) | | — | | — | | — | All employees, excluding current executive officers | | 3,506,281 | | — | | 392,166 |
Certain Interests of Directors
In considering the recommendation of our Board of Directors with respect to the approval of the 2014 EIP, stockholders should be aware that members of our Board of Directors have certain interests, which may present them with conflicts of interest in connection with this proposal. As discussed above, directors are eligible to receive awards under the 2014 EIP. For more information about the compensation we pay to our directors, see “Non-Employee Director Compensation” on Page 34. Our Board of Directors recognizes that approval of this proposal may benefit our directors and their successors.
Information About Other Equity Compensation Plans
Reference is made to that certain information set forth in the section entitled “Equity Compensation Plan Information” on page 36 of this proxy statement.
Vote Required
Approval of the 2014 EIP requires the affirmative vote of a majority of the votes cast on the proposal at the annual meeting.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 3.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth, as of March 31, 2016,2021, information regarding beneficial ownership of our common stock by: ·
| each person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock;
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each person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock; ·
| each of our named executive officers;
|
each of our named executive officers; ·
| each of our directors and nominees for director; and
|
each of our directors and nominees for director, if any; and ·
| all of our current executive officers and directors as a group.
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all of our current executive officers and directors as a group. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Atara Biotherapeutics, Inc., 611 Gateway Blvd., Suite 900, South San Francisco, CA 94080.2 | | Beneficial Ownership(1) | Beneficial Owner | | Number of Shares | | Percent of Total | 5% Holders: | | | | | Entities managed by The Baupost Group (2) | | 5,359,632 | | 18.6% | Entities affiliated with FMR LLC (3) | | 2,085,790 | | 7.3% | Entities affiliated with DAG Ventures (4) | | 1,962,564 | | 6.8% | Entities affiliated with Kleiner Perkins Caufield & Byers (5) | | 1,876,650 | | 6.5% | Entities affiliated with Domain Associates (6) | | 1,657,432 | | 5.8% | Redmile Group, LLC (7) | | 1,534,962 | | 5.3% | Amgen Inc. (8) | | 1,468,501 | | 5.1% | | | | | | Directors and Named Executive Officers: | | | | | Isaac E. Ciechanover, M.D. (9) | | 1,170,150 | | 4.1% | Christopher Haqq, M.D., Ph.D. (10) | | 293,285 | | 1.0% | Heather Turner (11) | | 6,771 | | * | Eric Dobmeier (12) | | 13,750 | | * | Matthew K. Fust (13) | | 26,388 | | * | Carol Gallagher, Pharm.D. (14) | | 109,935 | | * | William K. Heiden | | — | | * | Joel S. Marcus (15) | | 912,355 | | 3.2% | Beth Seidenberg, M.D. (5)(16) | | 1,883,733 | | 6.6% | | | | | | All Executive Officers and Directors as a Group (12 persons) (17) | | 4,682,127 | | 16.1% |
| | Beneficial Ownership(1) | Beneficial Owner | | Number of Shares | | Percent of Total | 5% Holders: | | | | | Entities managed by The Baupost Group(2) | | 9,108,988 | | 10.8% | Redmile Group, LLC(3) | | 7,863,613 | | 9.4% | Maverick Capital, Ltd.(4) | | 7,324,539 | | 8.7% | Entities affiliated with Blackrock, Inc.(5) | | 6,454,415 | | 7.7% | Entities affiliated with JPMorgan Chase & Co.(6) | | 6,028,503 | | 7.2% | The Vanguard Group(7) | | 5,638,274 | | 6.7% | | | | | | Directors and Named Executive Officers: | | | | | Pascal Touchon, D.V.M.(8) | | 256,024 | | * | Jakob Dupont, M.D.(9) | | 87,693 | | * | Utpal Koppikar(10) | | 151,381 | | * | Joseph Newell(11) | | 167,757 | | * | Kristin Yarema, Ph.D.(12) | | 58,221 | | * | Roy Baynes, M.D., Ph.D.(13) | | 27,998 | | * | Eric L. Dobmeier(14) | | 100,500 | | * | Matthew K. Fust(15) | | 93,854 | | * | Carol Gallagher, Pharm.D.(16) | | 160,818 | | * | William K. Heiden(17) | | 83,500 | | * | Ronald C. Renaud, Jr.(18) | | 23,830 | | * | Maria Grazia Roncarolo, M.D.(19) | | 19,831 | | * | Beth Seidenberg, M.D.(20) | | 1,976,733 | | 2.3% | | | | | | All Executive Officers and Directors as a Group (14 persons) (21) | | 3,257,585 | | 3.8% |
* | Represents beneficial ownership of less than 1% of the outstanding common stock. |
(1) | This table is based upon information supplied by officers, directors and certain principal stockholders and Schedules 13D and 13G filed with the SEC. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, we believe that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based on 28,744,01184,074,862 shares outstanding on March 31, 2016,2021, adjusted as required by rules promulgated by the SEC. Common stock subject to stock options currently exercisable or exercisable within 60 days of March 31, 2016,2021, or issuable upon settlement of restricted stock units (“RSUs”) within 60 days of March 31, 2016,2021, is deemed to be outstanding for computing the percentage ownership of the person holding these options or restricted stock units and the percentage ownership of any group of which the holder is a member but is not deemed outstanding for computing the percentage of any other person. |
(2) | The indicated ownership is based solely on a Schedule 13G/A filed with the SEC by the reporting person on February 12, 2021. The Schedule 13G/A provides information as of December 31, 2020 and, consequently, the beneficial ownership of the reporting person may have changed between December 31, 2020 and March 31, 2021. The Baupost Group, L.L.C. (“Baupost”) is a registered investment adviser and acts as thean investment adviser and general partner to certainvarious private investment limited partnerships on whose behalf these securities were purchased, and in such capacity has voting and investment power with respect to such securities.purchased. None of the investment limited partnerships owns greater than 5% of any class of voting securities. SAK CorporationBaupost Group GP, L.L.C. (“BG GP”) is the manager of Baupost, and Mr. Seth A. Klarman is the sole directormanaging member of SAK Corporation. BG GP. Each of Baupost, BG GP, and Mr. Klarman has shared voting and dispositive power over the shares. Mr. Klarman and SAK CorporationBG GP disclaim beneficial ownership of the securities. The principal business address for Baupost, SAK Corporation,BG GP, Mr. Klarman and the investment limited partnerships is 10 St. James Avenue, Suite 1700, Boston, MA 02116. |
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(3) | MRThe indicated ownership is based solely on a Schedule 13G/A filed with the SEC by the reporting person on February 16, 2021. The Schedule 13G/A provides information as of December 31, 2020 and, consequently, the beneficial ownership of the reporting person may have changed between December 31, 2020 and March 31, 2021. Redmile Group, LLC (“Redmile”) and Abigail P. Johnson haveJeremy C. Green’s beneficial ownership of the shares is through certain private investment vehicles and/or separately managed accounts managed by Redmile, which may be deemed beneficially owned by Redmile as investment manager of such private investment vehicles and/or separately managed accounts. Each of Redmile and Mr. Green has shared voting and dispositive control overinvestment power with respect to the shares. Redmile and Mr. Green may also be deemed to beneficially own 7,796,303 shares issuable upon exercise of certain pre-funded warrants (the “Warrants”), subject to terms that the Company may not effect any exercise of any Warrant, and a holder of a Warrant does not have the right to exercise any portion of the Warrant held by such holder, to the extent that such holder, together with such holder’s affiliates, would beneficially own a number of shares in excess of 9.99% of the shares and Abigail P. Johnson is a director, the vice chairman, the chief executive officer and the president of FMR LLC. Memberscommon stock of the Johnson family, including Abigail P.Company then issued and outstanding, which percentage may be changed at a holder’s election upon 61 days’ notice to the Company. According to the Schedule 13G/A, the shares reported as beneficially owned by Redmile represent 9.99% of the outstanding shares of common stock of the Company. The reported securities may also be deemed beneficially owned by Mr. Green as the principal of Redmile. The address for Redmile is One Letterman Drive, Building D, Suite D3-300, The Presidio, San Francisco, CA 94129.
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Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, as amended (the “Investment Company Act”), to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act (the “Fidelity Funds”) advised by Fidelity Management & Research Company (“FMR Co.”), a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ Boards of Trustees. FMR Co. carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees. The address for FMR LLC is 245 Summer Street, Boston, MA 02210.
(4) | ConsistsThe indicated ownership is based solely on a Schedule 13G/A filed with the SEC by the reporting person on February 16, 2021. The Schedule 13G/A provides information as of 1,798,185 shares of common stock held by DAG Ventures V-QP, L.P., 4,379 shares of common stock held by DAG Ventures V, L.P.December 31, 2020 and, 160,000 shares held by R. Thomas Goodrich. The general partner of DAG Ventures V, L.P. is DAG Ventures Management V, LLC. John J. Cadeddu, Greg Williams, Young J. Chung, Nick Pianim and R. Thomas Goodrich,consequently, the managing members of DAG Ventures Management V, LLC, share the power to vote or disposebeneficial ownership of the reporting person may have changed between December 31, 2020 and March 31, 2021. Maverick Capital, Ltd. (“Maverick Capital”) is an investment adviser registered under Section 203 of the Investment Advisers Act of 1940 and, as such, may be deemed to have beneficial ownership of such shares held by each such entity.through the investment discretion it exercises over its clients’ accounts. Maverick Capital Management, LLC is the General Partner of Maverick Capital. Lee S. Ainslie III is the manager of Maverick Capital Management, LLC. Andrew H. Warford serves as the Chairman of the Stock Committee of Maverick Capital. Each of Maverick Capital, Maverick Capital Management, LLC, Mr. Ainslie and Mr. Warford has sole voting and dispositive power over the shares. The principal business address of DAG Ventures V-QP, L.P. and DAG Ventures V, L.P.for Maverick Capital is 251 Lytton Avenue, Suite 200, Palo Alto, CA 94301.1900 N. Pearl Street, 20th Floor, Dallas, TX 75201.
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(5) | The indicated ownership is based solely on a Schedule 13G/A filed with the SEC by the reporting person on January 29, 2021. The Schedule 13G/A provides information as of December 31, 2020 and, consequently, the beneficial ownership of the reporting person may have changed between December 31, 2020 and March 31, 2021. Includes shares owned by the following subsidiaries of BlackRock, Inc. (“BlackRock”): BlackRock Life Limited; BlackRock Advisors, LLC; BlackRock (Netherlands) B.V.; BlackRock Institutional Trust Company, National Association; BlackRock Asset Management Ireland Limited; BlackRock Financial Management, Inc.; BlackRock Japan Co., Ltd.; BlackRock Asset Management Schweiz AG; BlackRock Investment Management, LLC; BlackRock Investment Management (UK) Limited; BlackRock Asset Management Canada Limited; BlackRock (Luxembourg) S.A.; BlackRock Investment Management (Australia) Limited; BlackRock Fund Advisors; and BlackRock Fund Managers Ltd, and reports, as of December 31, 2020, sole voting power over 6,288,668 of such shares and sole dispositive power over 6,454,415 of such shares. The address for Blackrock is 55 East 52nd Street, New York, NY 10055. |
(6) | The indicated ownership is based solely on a Schedule 13G filed with the SEC by the reporting person on January 8, 2021. The Schedule 13G provides information as of December 31, 2020 and, consequently, the beneficial ownership of the reporting person may have changed between December 31, 2020 and March 31, 2021. Includes shares owned by the following subsidiaries of JPMorgan Chase & Co. (“JPMorgan Chase”): J.P. Morgan Investment Management Inc.; JPMorgan Chase Bank, National Association; and JPMorgan Asset Management (UK) Limited, and reports, as of December 31, 2020, sole voting power over 5,136,870 of such shares and sole dispositive power over 6,017,103 of such shares. The address for JPMorgan Chase is 383 Madison Avenue, New York, NY 10179. |
(7) | The indicated ownership is based solely on a Schedule 13G/A filed with the SEC by the reporting person on February 8, 2021. The Schedule 13G/A provides information as of December 31, 2020 and, consequently, the beneficial ownership of the reporting person may have changed between December 31, 2020 and March 31, 2021. Includes shares owned by the following subsidiaries of The Vanguard Group, Inc. (“Vanguard”): Vanguard Asset Management, Limited; Vanguard |
| Fiduciary Trust Company; Vanguard Global Advisors, LLC; Vanguard Group (Ireland) Limited; Vanguard Investments Australia Ltd; Vanguard Investments Canada Inc.; Vanguard Investments Hong Kong Limited; and Vanguard Investments UK, Limited, and reports, as of December 31, 2020, shared voting power over 146,512 of such shares, sole dispositive power over 5,430,807 of such shares and shared dispositive power over 207,467 of such shares. The address of the Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, PA 19355. |
(8) | Consists of 53,559 shares held directly by Dr. Touchon and 202,465 shares pursuant to options exercisable and RSUs expected to vest within 60 days of March 31, 2021. |
(9) | Consists of 87,693 shares pursuant to options exercisable and RSUs expected to vest within 60 days of March 31, 2021. |
(10) | Consists of 46,134 shares held directly by Mr. Koppikar and 105,247 shares pursuant to options exercisable and RSUs expected to vest within 60 days of March 31, 2021. |
(11) | Consists of 24,737 shares held directly by Mr. Newell and 143,020 shares pursuant to options exercisable and RSUs expected to vest within 60 days of March 31, 2021. |
(12) | Consists of 16,018 shares held directly by Dr. Yarema and 42,203 shares pursuant to options exercisable and RSUs expected to vest within 60 days of March 31, 2021. |
(13) | Consists of 4,000 shares held directly by Dr. Baynes and 23,998 shares pursuant to options exercisable within 60 days of March 31, 2021. |
(14) | Consists of 20,000 shares held directly by Mr. Dobmeier and 80,500 shares pursuant to options exercisable within 60 days of March 31, 2021. |
(15) | Consists of 25,854 shares held directly by Mr. Fust and 68,000 shares pursuant to options exercisable within 60 days of March 31, 2021. |
(16) | Consists of 92,818 shares held directly by Dr. Gallagher and 68,000 shares pursuant to options exercisable within 60 days of March 31, 2021. |
(17) | Consists of 12,500 shares held directly by Mr. Heiden and 71,000 shares pursuant to options exercisable within 60 days of March 31, 2021. |
(18) | Consists of 23,830 shares pursuant to options exercisable within 60 days of March 31, 2021. |
(19) | Consists of 19,831 shares pursuant to options exercisable within 60 days of March 31, 2021. |
(20) | Consists of 1,822,228 shares of common stock held by Kleiner Perkins Caufield & Byers XV, LLC (“KPCB XV”) and 54,422 shares of common stock held by KPCB XV Founders Fund, LLC (“KPCB XV FF”). All shares are held for convenience in the name of “KPCB Holdings, Inc., as nominee” for the accounts of such entities. The managing member of KPCB XV and KPCB XV FF is KPCB XV Associates, LLC (“KPCB XV Associates”). Michael Abbott, L., John Doerr, William Gordon, Wen Hsieh, Randy Komisar, Matthew Murphy, Theodore Schlein and Dr. Seidenberg, the managing members of KPCB XV Associates, exercise shared voting and dispositive control over the shares held by KPCB XV. Dr. Seidenberg disclaims beneficial ownership of all shares held by KPCB XV except to the extent of her pecuniary interest therein. The principal business address for all entities and individuals affiliated with Kleiner Perkins Caufield & Byers is 2750 Sand Hill Road, Menlo Park, CA 94025. |
(6)
| Consists of 1,641,542 shares of common stock held by Domain Partners VIII, L.P. and 15,890 shares of common stock held by DP VIII Associates, L.P. The general partner of Domain Partners VIII, L.P. and DP VIII Associates, L.P. is One Palmer Square Associates VIII, L.P. James C. Blair, Brian H. Dovey, Jesse I. Treu, Kathleen K. Schoemaker, Brian K. Halak and Nicole Vitullo, the managing members of One Palmer Square Associates VIII, L.L.C., share the power to vote or dispose of the shares held by each such entity. The principal business address of Domain Partners VIII, L.P. and DP VIII Associates, L.P. is One Palmer Square, Suite 515, Princeton, NJ 08542.
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(7)
| The ownership of Redmile Group, LLC (“Redmile”) consists of an aggregate of 1,534,962 shares of common stock owned by certain investment limited partnerships, pooled investment vehicle(s), separately managed accounts, etc. for which Redmile serves as the general partner and/or investment manager. Redmile, as the general partner and/or investment manager to the limited partnerships, pooled investment vehicle(s), separately managed accounts, etc. and Jeremy Green, as the majority managing member and owner of Redmile, may therefore be deemed to beneficially own the shares owned by such investment limited partnerships, pooled investment vehicle(s), separately managed accounts, etc., insofar as they may be deemed to have the power to direct the voting or disposition of those shares. Each of Redmile and Jeremy Green disclaims beneficial ownership as to the shares, except to the extent of his or its pecuniary interests therein. The mailing address of the beneficial owners is One Letterman Drive, Bldg D, Ste D3-300, San Francisco, CA 94129.
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(8)
| Consists of 853,117 shares of common stock held by Amgen Investments Ltd., an affiliate of Amgen Inc., and 615,384 shares of common stock held by Amgen Inc. The address for Amgen Inc. is One Amgen Center Drive, Mail Stop 28‑5‑C, Thousand Oaks, CA 91320.
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(9)
| Consists of 25,640 Also includes 19,189 shares held directly by Dr. Ciechanover, 378,911Seidenberg, 394 shares held by the Isaac E. Ciechanoverirrevocable trusts, of which Dr. Seidenberg is trustee, and Allison M. Ciechanover Family Trust dated 8/8/08, 450,824 shares held by the Ciechanover Family GRAT, 180,000 shares held by the Ciechanover Family 2015 GRAT dated February 11, 2015 and 134,77580,500 shares pursuant to options exercisable and restricted stock units (“RSUs”) expected to vest within 60 days of March 31, 2016.2021.
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(10)(21)
| Consists of 230,298Includes 1,065,063 shares held directly by Dr. Haqq, 17,312 shares held by Chris Haqq 2014 GRAT, 2,688 shares held by the Havenside Trust and 42,987 sharesissuable pursuant to options exercisable and RSUs expected to vest within 60 days of March 31, 2016.Consists of 6,771 shares pursuant to options exercisable within 60 days of March 31, 2016.
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(11)
| Consists of 6,771 shares pursuant to options exercisable within 60 days of March 31, 2016.
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(12)
| Consists of 5,500 shares held directly by Mr. Dobmeier and 8,250 shares pursuant to options exercisable within 60 days of March 31, 2016.
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(13)
| Consists of 12,286 shares held directly by Mr. Fust and 14,102 shares pursuant to options exercisable and RSUs expected to vest within 60 days of March 31, 2016.2021.
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(14)
| Consists of 94,280 shares held by the Gallagher Revocable Trust and 15,655 shares pursuant to options exercisable and RSUs expected to vest within 60 days of March 31, 2016.
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(15)
| Consists of 908,355 shares held by Alexandria Equities, LLC, an affiliate of Alexandria Real Estate Equities, Inc., and 4,000 shares held by a family trust. The address for this stockholder is 385 East Colorado Boulevard, Suite 299, Pasadena, CA 91101.
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(16)
| Includes 6,689 shares held by Ms. Seidenberg and 394 shares held by irrevocable trusts, of which Ms. Seidenberg is trustee.
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(17)
| Includes 356,663 shares pursuant to options exercisable and RSUs expected to vest within 60 days of March 31, 2016.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.
To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the year ended December 31, 2015, all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners were complied with except Ms. Turner filed a Form 4 on March 4, 2016 for an event that occurred on August 3, 2015.
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EXECUTIVE OFFICERS The following table sets forth certain information with respect to our executive officers as of March 31, 2016.April 22, 2021. Biographical information with regard to Dr. CiechanoverTouchon is presented under “Proposal No. 1—Election of Directors” in this Proxy Statement. Name | | Age | | Position(s) | Isaac E. Ciechanover, M.D.Pascal Touchon, D.V.M.
| | 4558
| | President, Chief Executive Officer and Director | John F. McGrath, Jr.Jakob Dupont, M.D.
| | 56 | | Executive Vice President, Global Head of Research and Development | Utpal Koppikar | | 50 | | Senior Vice President, Chief Financial Officer | Amar Murugan | | 46 | | Senior Vice President, General Counsel | Joseph Newell | | 51 | | Executive Vice President, Chief FinancialOperations Officer | Mitchall G. Clark
| | 55
| | Chief Regulatory and Quality Assurance Officer
| Christopher Haqq, M.D.,Kristin Yarema, Ph.D.
| | 50 | | Senior Vice President, Chief MedicalCommercial Officer | Gad Soffer
| | 39
| | Chief Operating Officer
| Heather D. Turner
| | 43
| | General Counsel and Secretary
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John F. McGrath, Jr.Jakob Dupont, M.D., 56, has served as our Chief Financial OfficerExecutive Vice President, Global Head of Research & Development since January 2013.May 2020. From December 20092018 to January 2013, Mr. McGrath was an Executive in Residence and Operating Partner at Kleiner Perkins Caufield & Byers. From November 2001 to November 2009, Mr. McGrath May 2020, Dr. Dupontserved as Chief Medical Officer at Gossamer Bio, Inc. He previously served as the Vice President and Global Head of Breast and Gynecologic Cancer Development for Genentech USA, Inc. (Roche) from January 2017 to December 2018. Before that, Dr. Dupont served as the Senior Vice President and Chief FinancialMedical Officer for Network Equipment Technologies,of OncoMed Pharmaceuticals, Inc., a networking equipment company. Mr. McGrath’s prior experience includes from January 2012 to December 2016 and as the Vice President, Clinical Research from October 2011 to January 2012. From September 2006 to October 2011, Dr. Dupont held roles of Financeincreasing responsibility in early to late-stage clinical development at Genentech, most recently as its Global Medical Director, Avastin from January 2011, in which capacity he oversaw the global medical strategy and late-stage medical program for Aspect Communications, Director of Finance for TCSI Corporation and Manager in the High Technology and Manufacturing practice at Ernst & Young. He wasAvastin. Dr. Dupont has served as a member of the board of directors of Endwave Corporation, Actel Corporation andApexigen, Inc. since August 2020. Since February 2009, Dr. Dupont has also served as an adjunct clinical assistant professor at the Presidio Fund. Mr. McGrath isStanford University School of Medicine. Prior to joining Genentech in 2006, Dr. Dupont was a registered C.P.A. (inactive)faculty member at Memorial Sloan-Kettering Cancer Center from January 2002 to September 2006. Dr. Dupont received an A.B. in the State of CaliforniaPhilosophy from Vassar College, received an M.A. in Philosophy from New York University, and received a B.S.an M.D. from the UniversityJoan & Sanford I. Weill Medical College of Wyoming and an M.B.A. from the Stanford Graduate School of Business.Cornell University.
Mitchall G. ClarkUtpal Koppikar, 50, has served as our Senior Vice President, Chief Regulatory and Quality AssuranceFinancial Officer since March 2014. From June 20132018. Prior to March 2014, he served as the Principal of Lindum Pharmaceutical Services, a regulatory consultancy. From Decemberjoining Atara, from June 2011 to June 2013, he served as Senior Vice President, Regulatory Affairs and Quality of NantPharma, LLC, a pharmaceutical company.2018, Mr. Clark served as an independent regulatory consultant between June 2011 and December 2011. From October 2010 to June 2011, Mr. Clark served as Senior Vice President of Regulatory Affairs of Celgene. From November 2007 to October 2010, he served as Senior Vice President of Global Regulatory Affairs of Abraxis, a biopharmaceutical company, which was acquired by Celgene in October 2010. From April 2006 to November 2007, Mr. Clark servedKoppikar held several senior financial leadership positions at Gilead Sciences, Inc., including as Vice President of Regulatory Affairs of AbraxisCorporate and its predecessor entity. From May 2002 to April 2006, Mr. Clark served as Vice President of Regulatory Affairs of American BioScience, Inc., a pharmaceutical company, which was merged with Abraxis in April 2006.Operations Finance, responsible for R&D, corporate, G&A, process development and manufacturing, and strategic sourcing. Prior to that, Mr. ClarkGilead, from January 2001 to June 2011, he served in various senior regulatory positionsmultiple finance roles of increasing responsibility at American Pharmaceutical Partners, VivoRx, Inc. and Faulding,Amgen, Inc. Mr. ClarkKoppikar earned his B.S. in aerospace engineering at the University of Maryland and received a M.S. in aeronautical and astronautical engineering from Stanford University. He also holds a B. Pharm.an MBA in finance and marketing from The University of Nottingham, England.Anderson School at UCLA.
Christopher Haqq, M.D.Amar Murugan, 46, has served as our Chief Medical Officer since September 2012. From September 2011 to August 2012, Dr. Haqq served as the Chief Executive Officer of Genomic Systems, a biotechnology company. From 2007 to September 2011, Dr. Haqq served as Vice President for Clinical Research and Development at Cougar Biotechnology, Inc., a cancer-focused biotechnology company that was acquired by Johnson & Johnson in 2009, and Johnson & Johnson’s Janssen Pharmaceutical Companies division. Prior to that time, Dr. Haqq served in drug development roles at Amgen Inc., a biotechnology company, and practiced as a medical oncologist and led a translational science laboratory as an Assistant Adjunct Professor in the Division of Hematology/Oncology at the University of California, San Francisco. Dr. Haqq received a B.S. degree from Stanford University and an M.D. and Ph.D. from Harvard Medical School.
Gad Soffer has served as our Chief Operating Officer since March 2013. From August 2008 to March 2013, he held various roles in Business Development and served as Global Project Leader Abraxane at Celgene. From June 2000 to June 2001 and from April 2004 to April 2006, Mr. Soffer was a healthcare consultant with Easton Associates. He received an A.B. from Harvard University, an M.S. from Columbia University and an M.B.A. from Harvard Business School.
Heather D. Turner has served as our General Counsel and Secretary since July 2015. From June 2007 to June 2015, she was first Vice President and later Senior Vice President, General Counsel since April 2020. From February 2013 to February 2020, Mr. Murugan held several senior legal leadership positions at Assertio Therapeutics, Inc., a specialty pharmaceutical company, including as Vice President, Legal Affairs from February 2013 to February 2016, as Vice President, Legal and SecretaryDeputy General Counsel from March 2016 to June 2018, and most recently as Senior Vice President and General Counsel from July 2018 to February 2020. Prior to joining Assertio, he was a partner in the law firms of Baker Botts L.L.P. and McDermott Will & Emery LLP, where he represented technology and life sciences companies in connection with public and private financings, mergers and acquisitions and corporate securities matters. Mr. Murugan holds a B.S. from Georgetown University and a J.D. from University of California, Los Angeles.
Joseph Newell, 51, has served as our Executive Vice President and Chief Operations Officer since February 2020. From April 2017 to February 2020, Mr. Newell served as our Executive Vice President and Chief Technical Operations Officer. From July 2015 to April 2017, he was Vice President, North America Manufacturing at Orexigen Therapeutics,Alexion Pharmaceuticals, Inc., a publicly traded biotechnology company. PriorFrom March 2008 to that time, sheJuly 2015, Mr. Newell served first as Corporate Counsel and later as Associate General Counsel – Corporate for Conor Medsystems, LLC (previously Conor Medsystems,various roles within Amgen, Inc.), a publicly traded medical devicehuman therapeutics company, including as Executive Director and Plant Manager from August 2012 to September 2014 and Executive Director, Operations Strategic Planning from September 2014 to June 2015. He received a B.S. from California State Polytechnic University – Pomona.
Kristin Yarema, Ph.D., 50,has served as our Senior Vice President, Chief Commercial Officer since February 2020. From February 2013 to January 2020, Dr. Yarema held positions of increasing responsibility at Amgen Inc., most recently serving as Amgen’s Vice President & Therapeutic Area Head for Global Product Strategy & Commercial Innovation in Hematology and Oncology with global accountability for all hematology marketed and pipeline products, including a portfolio of innovative therapies for various hematological malignancies such as multiple myeloma, leukemia and lymphoma. From July 2007 to January 2013, she held numerous roles of increasing responsibility at Novartis AG. From September 2000 to June 2007, she held roles of increasing responsibility at McKinsey & Company. In addition, Dr. Yarema has served as a member on the board of directors of the Celiac Disease Foundation, the U.S.-based patient advocacy group, since 2017 and as a board member of the Alliance for Regenerative Medicine, an associate at Cooley LLP,international patient advocacy organization dedicated to realizing the promise of regenerative medicines and therapies, since 2020. Dr. Yarema holds a law firm. She received a J.D.Ph.D. in Chemical Engineering from the UCLA School of Law and a B.A. from the University of California, Santa Barbara where she graduated with honorsBerkeley and was elected Phi Beta Kappa. Shea B.S. in Chemical Engineering and B.A. in English from Stanford University.
EXECUTIVE COMPENSATION Compensation Discussion and Analysis This Compensation Discussion and Analysis (“CD&A”) explains the strategy, design, and decision-making related to our compensation programs and practices for our principal executive officer, our principal financial officer and our three other most highly compensated executive officers, referred to collectively as our named executive officers. This CD&A is a memberintended to provide perspective on the information contained in the tables that follow this discussion. For fiscal year 2020, our named executive officers were: | | Name | Position | Pascal Touchon, D.V.M. | President and Chief Executive Officer | Jakob Dupont, M.D.1 | Executive Vice President, Global Head of Research & Development | Utpal Koppikar | Senior Vice President, Chief Financial Officer | Joseph Newell | Executive Vice President, Chief Operations Officer | Kristin Yarema, Ph.D.2 | Senior Vice President, Chief Commercial Officer |
1Dr. Dupont joined the Company in May 2020. 2Dr. Yarema joined the Company in February 2020. While the principal purpose of this CD&A is to discuss the compensation of our named executive officers, many of the State Barprograms discussed apply to other members of California.senior management who, together with the named executive officers, are collectively referred to as our executive officers. Executive Summary
We are a leading allogeneic T-cell immunotherapy company pioneering the development of transformative therapies for patients with serious diseases including solid tumors, hematologic cancers and autoimmune diseases. Using our novel allogeneic EBV T-cell platform, we intend to deliver treatments to patients with high unmet need. Our platform aims to leverage the unique biology of EBV T cells to channel the power of the immune system and has the potential to treat a wide range of diseases. We are applying this one platform to create a robust pipeline with the goal of developing treatments that improve the quality and longevity of patients’ lives. Our pipeline includes tabelecleucel (tab-cel®) in Phase 3 development for patients with EBV-driven post-transplant lymphoproliferative disease (“PTLD”) and in earlier stages of development for other EBV-associated diseases, ATA188 for the potential treatment of multiple sclerosis and next-generation CAR T therapies for the potential treatment of solid tumors and hematologic cancers. Despite the significant headwinds created by the COVID-19 pandemic over the past year to our business, operations, people and communities, we believe the Company had a remarkable year, delivering on key milestones across the Company’s three strategic priorities. Significant accomplishments of our team in 2020 include: (i) the important progress we made on the anticipated regulatory filing package for tab-cel, both in the United States and in Europe; (ii) initiation of our Phase 2 multi-cohort study to evaluate tab-cel in other areas of high unmet medical need; (iii) initiation and continued enrollment of our Phase 2 randomized controlled study of ATA188, a product candidate with the potential to transform the treatment paradigm for multiple sclerosis; (iv) execution of a strategic collaboration with Bayer AG (“Bayer”) involving ATA2271 and ATA3271, our next-generation mesothelin-targeted CAR T program; (v) initiation of investigational new drug (“IND”) enabling studies for ATA3219, our preclinical, allogeneic CD19 CAR T we believe has the potential be a best-in-class therapy; and (vi) numerous presentations of clinical and preclinical data throughout 2020, which reflect not only the potential of our product candidates to treat patients with high unmet need, but also the perseverance and resilience of our team as well as the healthcare professionals and patients participating in our clinical development programs. The commitment and dedication of the entire Atara team in 2020 was impressive and inspiring. Through unprecedented and unpredictable circumstances, our team remained nimble, adapting to new challenges, and protecting the health and safety of Atara’s employees while remaining focused on our mission to bring transformative therapies to patients with serious diseases.
This focus and resiliency helped us deliver on key milestones across Atara’s three strategic priorities in 2020: | | Strategic Priority | Select Achievements for 2020 | Tabelecleucel (tab-cel®) | ✓ Conducted an interim analysis of the pivotal Phase 3 ALLELE study showing tab-cel for patients with EBV+ PTLD achieved a 50% objective response rate and safety consistent with historical data ✓ Discussions with FDA confirmed Atara may complete a Biologics License Application (“BLA”) filing with the pivotal Phase 3 ALLELE study’s currently enrolled patients with at least six-months follow-up for duration of response ✓ Completed the preclinical module 4 of the BLA filing package and made progress through active and productive discussions with FDA on the final content of the chemistry, manufacturing and control (“CMC”) module 3 ✓ Progressed enrollment in the pivotal Phase 3 ALLELE study despite challenges posed by the COVID-19 pandemic ✓ Initiated a tab-cel Phase 2 multi-cohort study in the third quarter of 2020 concurrently in the U.S. and the European Union (“EU”) ✓ Received ratification from Pediatric Committee of the European Medicines Agency of our Pediatric Investigation Plan (‘PIP”) | ATA 188 | ✓ Progressed enrollment in the ATA188 Phase 2 randomized, double-blind, placebo-controlled trial (“RCT”) in Progressive Multiple Sclerosis (“PMS”) following enrollment of its first patient in June 2020 despite challenges posed by the COVID-19 pandemic ✓ Presented data from the ongoing Phase 1 clinical study of ATA188 at the 8th Joint ACTRIMS-ECTRIMS Meeting in September 2020, showing all PMS patients achieving Sustained Disability Improvement (“SDI”) at any time point maintained SDI at all future time points, with favorable safety at all dose levels ✓ Presented new data from the Open Label Extension of the Phase 1 study at the European Charcot Foundation 28th Annual Meeting in November 2020 showing that 50% of patients in the two highest dose cohorts demonstrated SDI at 15 months | CAR T Programs | ATA2271/ATA3271 ✓ Entered into a strategic collaboration with Bayer in December 2020 through an exclusive worldwide license agreement and research, development and manufacturing collaboration ✓ Presented IND-enabling ATA2271 preclinical data at the American Association for Cancer Research (“AACR”) Virtual Meeting II in June 2020 ✓ Announced FDA clearance of the IND for ATA2271 in September 2020 ✓ Presented first preclinical data on ATA3271 at the Society for Immunotherapy of Cancer (“SITC”) 35th Anniversary Annual Meeting in November 2020 ATA3219 ✓ An academic team presented initial clinical proof-of-principle that an EBV T-cell platform has the potential to generate off-the-shelf, allogeneic CAR T immunotherapies with high response rates, durable responses and low risk of toxicity at the 2020 Transplantation and Cellular Therapy (“TCT”) Meetings in February 2020 ✓ Initiated IND-enabling studies and held a pre-IND meeting with the FDA in October 2020, where we received feedback to guide the IND filing for ATA3219 ✓ Presented preclinical data for ATA3219 demonstrate functional persistence, polyfunctional phenotype and efficient targeting of CD19-expressing tumor cells both in vitro and in vivo at the 62nd American Society for Hematology (“ASH”) Annual Meeting and Exposition in December 2020 |
We believe these significant achievements helped to deliver our strong total stockholder return of over 19% in 2020.
2020 Executive Compensation Program Highlights Throughout the past year, the Compensation Committee, in conjunction with the entire Board, monitored the evolving COVID-19 pandemic and assessed the potential impact on our business and operations, including our manufacturing operations, the timing and execution of clinical and preclinical studies, and the health and safety of our employees. Compensation decisions were designed to advance the interests of the Company, our stockholders and our employees. To further strengthen the alignment between executive and stockholder interests, the Compensation Committee also made several changes to our executive compensation program described below. Our first two highlights are changes to our equity granting practices: | | | | | ![](https://capedge.com/proxy/DEF 14A/0001564590-21-020128/ga5ozxl324dc000003.jpg)
| Introduction of Performance-based RSUs (“PSUs”) | | ![](https://capedge.com/proxy/DEF 14A/0001564590-21-020128/ga5ozxl324dc000004.jpg)
| Equity Value Split 50/50 RSUs / Options | • Informed by stockholder feedback, the Compensation Committee introduced PSUs to the long-term equity vehicle mix for 2020 • PSUs, which were granted to all named executive officers, vest based on tab-cel milestone achievements | | • In late 2020, the Compensation Committee approved a switch to granting equity on a target value basis equally between options and RSUs in 2020, which was implemented in March 2021 |
Our next highlight further aligned our pay program with leading market practices: | | | ![](https://capedge.com/proxy/DEF 14A/0001564590-21-020128/ga5ozxl324dc000005.jpg)
| Introduction of Stock Ownership Guidelines | | • To further strengthen the alignment between executive and stockholder interests, in late 2020 the Compensation Committee approved stock ownership guidelines for executives and directors, which became effective beginning January 1, 2021 • This decision was based in part on stockholder input and was confirmed with market practice analysis |
Compensation Practices and Governance Highlights The Compensation Committee recognizes the Company operates in the highly competitive and dynamic biotechnology industry, and in particular, within the cell and gene therapy area. Therefore, to ensure that the overall compensation packages we offer to our executive officers remain competitive with the packages offered by companies with which we compete for executive talent, our Compensation Committee reviews market best practices in executive compensation to continually refine our programs. In addition, our Compensation Committee reviews our executive compensation program to ensure our practices align the interests of our directors and executive officers with our stockholders. Below are features of our compensation program which the Compensation Committee believes demonstrate our commitment to link executive compensation to performance and to incentivize the creation of stockholder value. Pay for Performance Philosophy | ❖ We link a significant proportion of the compensation of our named executive officers to the achievement of our corporate goals and stock price appreciation | Stockholder Alignment | ❖ Our emphasis on long-term equity awards aligns the interests of executives and stockholders | Corporate Strategy Alignment | ❖ Our Compensation Committee establishes incentive compensation programs based on metrics that are aligned with our corporate strategy and designed to grow stockholder value | Clawback Policy (new) | ❖ We permit the Company to recoup variable compensation from Section 16 officers, including our named executive officers, in the event of misconduct that causes material accounting restatement | Change in Control Provisions | ❖ Does not include excessive change in control or severance payments ❖ Provides “double-trigger” change in control benefits ❖ Does not include excise tax gross-ups for severance or change in control benefits | Stock Ownership Guidelines (new) | ❖ In late 2020, we adopted stock ownership guidelines for our executives and directors to further align their interests with those of our stockholders | Anti-Hedging and Pledging Provisions | ❖ Our Insider Trading Policy strictly prohibits hedging and pledging activities by executive officers and directors | Repricing Prohibited | ❖ Our equity plan prohibits repricing of underwater stock options without prior stockholder approval | Stockholder Feedback | ❖ We value the feedback of our stockholders and solicit it throughout the year, including through an annual say-on-pay proposal | Compensation Risk Assessment | ❖ Our Compensation Committee assesses the risk associated with our compensation policies and practices annually, to ensure they are not reasonably likely to have a material adverse effect on the Company | No Guaranteed Annual Bonus or Salary Increase | ❖ We do not guarantee executive officers annual salary increases or bonuses. | Avoid Excessive Perquisites | ❖ Consistent with our pay for performance philosophy, we provide very limited perquisites to our executive officer and do not provide personal perquisites such as automobile leases | Good Standing Requirement | ❖ We require executive officers and all other employees to be in good standing to be eligible for awards under our short-term cash incentive program |
Result of Stockholder Advisory Vote and Stockholder Engagement We believe that strong corporate governance should include year-round, constructive dialogue with stockholders on business strategy, operational executive, corporate governance, our executive compensation program and other critical business matters. Our engagement with stockholders allows us to better understand stockholders' views and interests, solicit their feedback and share our perspective on these and other important subjects. In 2019 we held our first stockholder advisory vote on executive compensation (commonly referred to as a “say-on-pay” vote), which resulted in strong support. There was a decreased level of support of our say-on-pay proposal in 2020. Following the 2020 annual meeting, we initiated further engagement with stockholders aimed at eliciting a better understanding of their concerns and perspectives. The Compensation Committee considered the feedback obtained from these discussions with our stockholders in making its executive compensation decisions in 2020, and to the extent applicable, will consider such feedback for future periods. The Compensation Committee also considered issues identified by several proxy advisory firms, adopting several policies in line with peer companies to further strengthen the alignment between executive and stockholder interests and mitigate perceived compensation-related risk. Our investor relations team and members of our senior management regularly engage and have dialogue with our stockholders throughout the year, including following our quarterly earnings calls, through participation at investor conferences and via other channels of communication. These interactions provide an opportunity to discuss the Company’s executive compensation measures and obtain feedback from stockholders to better understand investor perspectives on the Company’s strategic, operational, governance, executive compensation matters and other topics of interest. Compensation Philosophy and Objectives
Our philosophy in setting compensation policies for executive officers has two primary objectives: (i) to attract and retain talented and skilled executives by paying for performance; and (ii) to align compensation of our executives with the interests of our stockholders through an appropriate mix of short-term and long-term compensation. Our Compensation Committee believes that executive compensation should be directly linked to corporate performance and longer-term stockholder value and our executive compensation program is appropriately designed, balanced, and appropriately links executive compensation to both continuous and longer-term improvement in corporate performance. Our compensation program is consistently and meaningfully focused on pay for performance principles, and historically payouts have been both above and below target under our annual incentive plans to reflect Company performance in that year. In determining compensation for executive officers, the Compensation Committee does not formulaically benchmark against any one specific reference point. Instead, the Compensation Committee considers several factors, including peer group survey data, tenure, role, responsibilities, performance and local competitive market practices and trends. Our Compensation Committee focuses on the following principles to guide decisions regarding executive compensation: Competitive Total Compensation Package. We strive to offer a market-competitive compensation package that enables us to attract and retain highly qualified and high-performing executives. To ensure that our total compensation levels are competitive, our Compensation Committee, in consultation with independent advisors and senior management, reviews the compensation policies and practices of our peer companies. The Compensation Committee, with the assistance of an independent compensation consultant, also reviews the composition of the peer group to ensure that the peer group continues to accurately reflect comparable companies as our Company grows and evolves over time. Pay-for-Performance. We structure our executive compensation program to reflect individual performance as well as achievement of our annual corporate goals and longer-term business strategies and objectives. We achieve this balance by linking short-term and long-term cash and equity incentives to performance of corporate and individual performance goals and objectives. Alignment with Stockholders. We use equity-based awards to align executive incentives with the creation of stockholder value. Internal Parity, Flexibility and Simplicity.To the extent practicable, we design our compensation program to achieve the following: (i) internal parity for similarly situated executives within the Company, (ii) flexibility that allows us to adapt to rapid changes in the competitive environment for executives in the biotechnology industry and (iii) simplicity in design that allows for clear and easy to understand communication to our employees, as well as ease of administration.
Avoidance of Excessive Perquisites. We generally intend to avoid the payment of excessive, unusual or unnecessary perquisites to executives, although from time-to-time we may offer certain perquisites that are common and appropriate for similarly situated executives of peer companies. In addition, we do not offer our executive team any substantially enhanced benefits or perquisites when compared with our overall employee population. How We Determine Executive Compensation Role of the Compensation Committee and Executive Officers The Compensation Committee oversees and approves all compensation arrangements for our executive officers, including our named executive officers. While the Compensation Committee has numerous resources available to it, including input from our Board, Chief Executive Officer and independent consultants, ultimate decision-making authority rests with the Compensation Committee. The Compensation Committee retains discretion over base salaries, annual bonuses and equity compensation for executive officers and bases its decision on a careful review of performance as well as the competitive market environment. The Compensation Committee typically meets at least four times per year, with additional meetings as necessary. The Compensation Committee met five times in 2020. The agenda for each meeting is set by the Chair of the Compensation Committee, with consultation, as appropriate with our Chief Executive Officer, Chief People Officer, General Counsel and Radford, our independent compensation consultant. Members of management and Radford may be invited to participate in meetings, but the Compensation Committee meets regularly in executive session. Our Chief Executive Officer is often present and participates in discussions regarding compensation of our other executive officers. Executives, including our Chief Executive Officer, are not present during deliberations regarding their own performance or compensation. Role of Compensation Consultants The Compensation Committee has retained the services of Radford, as our independent compensation consultant. Radford assists the Compensation Committee in its review of executive and director compensation practices, including the market competitiveness of compensation, executive compensation design, benchmarking with industry peers and other technical considerations including those related to tax and accounting. For 2020 compensation matters, Radford advised and assisted with the following: Development of a peer group to be used in the evaluation of 2020 executive and director compensation; Documentary support, including peer group and industry data with respect to base salaries, target annual cash bonuses, and equity compensation; A market analysis of executive officer compensation compared to our peer group, which market analysis was reviewed with the Compensation Committee and used to guide 2020 base salary and bonus target decisions for our named executive officers; A market analysis of long-term incentive compensation of our executive officers compared to our peer group, which market analysis was reviewed with the Compensation Committee and used to guide 2020 long-term equity compensation determinations; and A market analysis of director compensation compared to our peer group, which market analysis was reviewed with the Compensation Committee and used to guide adjustments made to the compensation payable to our non-employee directors. The Compensation Committee regularly evaluates the services Radford provides and has final authority to engage and terminate their services. Our Compensation Committee has assessed Radford’s independence consistent with Nasdaq listing standards and has concluded that the engagement of Radford does not raise any conflict of interest.
Competitive Assessment A key objective of our executive compensation program is to ensure that the overall compensation packages we offer our executive officers remain competitive with the packages offered by companies with which we compete for executive talent. The Compensation Committee consults with its independent compensation consultant to develop a peer group of companies to serve as the basis for comparing our executive compensation program to the market. 2020 Peer Group With the assistance of Radford, the Compensation Committee annually reviews the composition of the peer group to account for changes in both our business and the businesses of the companies in the peer group. While referencing the peer group compensation levels is helpful in determining market-competitive compensation for our named executive officers, the Compensation Committee does not directly tie any pay elements to particular benchmarks within the peer group. Rather, peer data is one consideration, along with employee knowledge, skills and experience, individual performance, and scope of responsibilities, among other factors. 26A key change to the 2020 peer group from the previous year was to realign our peer group to target companies within a market cap range of $300 million to $3 billion. As a result, five companies were removed because they were outliers based on the new criteria or had been acquired. In developing the 2020 peer group, the Compensation Committee considered several key qualitative and quantitative elements as set out below.
Sector and Stage—highly competitive and dynamic biotechnology industry, with an emphasis on pre-commercial biopharmaceutical companies within the cell and gene therapy area Stage of Business—focus on later stage (Phase 3) pre-commercial companies, with an emphasis on oncology and cell and gene therapy area Market Capitalization—between approximately $300 million and $3 billion Headcount—generally between 100 to 1,000 employees Geography-U.S.-based companies located in biotechnology “hub” locations Following this analysis, the Compensation Committee identified the following 19 publicly-traded, U.S-based biotechnology/pharmaceutical companies as our peer group to be used in reviewing compensation for 2020: 2020 Peer Group | Agenus Inc. | Agios Pharmaceuticals, Inc. | Aimmune Therapeutics Inc. | Allogene Therapeutics, Inc. | Clovis Oncology, Inc. | Editas Medicine, Inc.* | Epizyme, Inc. | Fate Therapeutics, Inc. | ImmunoGen, Inc. | Iovance Biotherapeutics, Inc. | Karyopharm Therapeutics Inc. | MacroGenics, Inc. | Precision Biosciences, Inc.* | Rubius Therapeutics, Inc. | Sangamo Therapeutics, Inc. | TCR2 Therapeutics Inc.* | TG Therapeutics, Inc. | Voyager Therapeutics, Inc. | Xencor, Inc. | | | *New additions for 2020 | | |
Elements of Executive Compensation The Compensation Committee has developed an executive compensation program that consists of the following primary elements: Short-term incentives in the form of an annual cash bonus opportunity; and Long-term incentives in the form of equity-based compensation (stock options, RSUs and PSUs). The relative mix of these components is generally weighted towards incentive rather than fixed compensation and towards long-term incentive compared to short-term incentive compensation. We believe this relative weighting towards long-term equity-based compensation ensures that the interests of our executives are aligned with those of our stockholders. Base Salary | Base salaries are set to be competitive within our industry and are important in attracting and retaining talented executives. Base salaries are fixed pay set with consideration for responsibilities, market data, employee knowledge, skills and experience, individual performance, and scope of responsibilities, among other factors. | Annual Cash Bonus | The annual cash incentive award plan is intended to motivate and reward our executives for the achievement of individual goals as well as the strategic goals of the Company. In 2020, our annual incentives were based on key strategic, research, development, regulatory, clinical, financial and operational corporate objectives. | Long-Term Equity Incentives | Long-term equity awards incentivize executives to deliver long-term stockholder value, while also providing a retention vehicle for our top executive talent. Equity awards are typically delivered as a combination of some or all of the following: •Stock options •RSUs •PSUs |
Target Compensation Mix Our Compensation Committee has not established formal policies or guidelines for allocating compensation between annual and long-term incentive compensation, or between cash and non-cash compensation. Instead, through our compensation program, the Compensation Committee seeks to align pay and performance. As can be seen in the graphs below, a large percentage of executive pay in 2020 was variable and “at-risk” (89% for the Chief Executive Officer, and 79% on average for our other named executive officers), meaning that value to the executive is tied directly to corporate goals, individual goals (except for the Chief Executive Officer), and stock price performance. In this sense, we believe we have established a pay-for-performance culture and pay program. The balance between these components may change from year to year based on corporate strategy and objectives, among other considerations. ![](https://capedge.com/proxy/DEF 14A/0001564590-21-020128/ga5ozxl324dc000006.jpg)
The PSUs in the chart reflect the target grant date aggregate fair value of PSUs based on the performance conditions.
Base Salary In considering the appropriate level of base salaries for our named executive officers for 2020, the Compensation Committee employed a holistic analysis of multiple relevant factors using its professional judgment and experience, emphasizing the following: the individual contribution of the named executive officer to our key strategic, research, development, regulatory, clinical, financial and operational corporate objectives in 2020; the criticality of each named executive officer’s skill set and relative expected future contributions to our business; the growing complexity of our business, which results in increased workloads and responsibilities of each of our named executive officers; and the need to attract, retain and motivate the named executive officer in a highly competitive marketplace. The Compensation Committee considered the base salaries of similarly situated executives at our 2020 peer group companies for an understanding of whether our compensation program is competitively positioned to retain our highly qualified named executive officers. The Compensation Committee determined that each named executive officer should receive an increase in his or her base salary for 2020 as follows: Named Executive Officer | 2019 Base Salary | 2020 Base Salary | Year-over-Year % Increase |
Pascal Touchon, D.V.M. | $615,000 | $650,000 | 5.7% | Jakob Dupont, M.D.1 | - | $500,000 | - | Utpal Koppikar | $439,875 | $457,500 | 4.0% | Joseph Newell2 | $390,000 | $450,000 | 15.4% | Kristin Yarema, Ph.D.3 | - | $420,000 | - | 1 Dr. Dupont joined the Company in May 2020. 2 Mr. Newell was promoted from Chief Technical Operations Officer to Chief Operations Officer in February 2020. 3 Dr. Yarema joined the Company in February 2020. |
Annual Cash Bonuses Annual Performance Goals The Compensation Committee works with the executive team to develop goals with respect to the Company’s annual incentive compensation program and ultimately recommends a list of goals to the Board for approval. The Board reviews the strategic, operational and financial components of the goals and approves the goals as well as a weighting for each goal based on its relative importance. Our Chief Executive Officer and executive team provide updates to the Board through the course of the year on performance towards these goals. At the end of the year, our Chief Executive Officer presents the Compensation Committee with a proposed score based on the Company’s performance against the goals. After discussion and review, the Compensation Committee a recommendation on the overall corporate achievement score compared to the annual performance goals to the Board for approval. This score is then used to establish the corporate portion of annual bonus payments. In addition, our Chief Executive Officer works with each executive officer to establish individual performance goals and objectives. Individual goals are evaluated in a more qualitative and subjective manner than the corporate goals, and executive officers are evaluated on overall achievement of individual goals as well as overall contribution to the Company’s corporate goals. This evaluation is done by our Chief Executive Officer who then recommends an individual bonus amount to the Compensation Committee for consideration and approval.
Annual Bonus Process The Compensation Committee conducts an annual performance and compensation review for our executive officers, including our Chief Executive Officer. The Compensation Committee reviews base salary, annual bonus and equity-based compensation annually as part of this review. The review is typically conducted over a series of meetings beginning at the end of the year and as part of the Company’s broader annual performance review process. The annual corporate score which is determined as described above in “Annual Performance Goals” is used to determine the size of the Company-wide bonus pool. Our Chief Executive Officer receives a bonus based entirely on corporate performance since they have ultimate operational responsibility for corporate performance. Our other executives receive a bonus which is primarily linked to corporate performance (85%), with a smaller individual performance component (15%). The individual performance component of the bonus for these executive officers can be modified up to 125% or down to 0% dependent on performance in the prior year. In addition, the Compensation Committee retains flexibility to increase or decrease any and all compensation components to reflect performance. 2020 Bonus Targets Bonus targets (expressed as a percentage of base salary) are reviewed annually by the Compensation Committee, taking into consideration competitive market data, and adjusted if deemed appropriate by the Compensation Committee. Named Executive Officer | Target Bonus (as % of base salary) | Target Bonus ($ amount) |
Pascal Touchon, D.V.M. | 65% | $422,500 | Jakob Dupont, M.D. | 45% | $225,000 | Utpal Koppikar | 40% | $183,000 | Joseph Newell | 45% | $202,500 | Kristin Yarema, Ph.D. | 40% | $168,000 |
2020 Corporate Goal Development and Weighting In February 2020, the Board reviewed and approved the corporate goals and objectives for 2020, as summarized in the table below. In selecting these goals, the Board believed that they were appropriate drivers for our business, as they provided a balance between the efforts necessary (i) for the continued clinical development of tab-cel, ATA188 and our CAR T program, including ATA2271, ATA3271 and ATA3219, (ii) to advance critical elements of our manufacturing and operational capabilities to support our clinical and preclinical activities and potential commercial requirements, (iii) to financially fund our operations to support such efforts, (iv) to further the strategic value of our CAR T platform and (v) to enhance our corporate culture to enable these critical corporate objectives. At the time the 2020 corporate goals were set, the Board and management believed that such goals were challenging, and that achieving them would require not only continued strong progress on research and clinical development, manufacturing and operational capabilities, and prudent fiscal and legal management, but also a high level of effort and execution on the part of our named executive officers.
The Board also applied a performance weighting to each goal relative to our overall performance to reflect the prioritization of key business objectives. Additionally, a weighting between corporate performance and individual performance was applied for each named executive officer to reflect the level of impact such individual would be able to make on the overall corporate performance. The relative weighting between our 2020 corporate objectives relating to advancing our pipeline and developing our platform relative to additional 2020 corporate objectives is summarized below. 2020 Objectives | 2020 Goals Summary | Weight | Advance the Pipeline | Tab-cel • Meet certain enrollment goals for the pivotal Phase 3 ALLELE study • Execute meetings with FDA toinitiate arolling BLA submission • Meet enrollment goals for the Phase 2 multi-cohort study | 70% | ATA188 • Meet 2020 enrollment goals for the Phase 1b/2 RCT | ATA2271 • File an IND | ATA3219 • Meet certain preclinical and technical targets | Develop our Platform | • Meet certain operational and technical goals at our manufacturing facility | Additional Objectives | • Meet Company’s cash runway target • Execute at least one partnership relating to our allogeneic CAR T platform • Further cultivate a high performing culture that empowers, values and inspires our employees to deliver transformative therapies to patients • Fill identified critical roles to advance the execution of Company’s corporate strategy | 30% |
Performance Evaluation Despite the unprecedented challenges we faced in 2020, we achieved most of our corporate goals and objectives set for 2020, including, but not limited to: (i) meeting our enrollment goals for the pivotal Phase 3 ALLELE Study for tab-cel; (ii) filing an IND for ATA2271; (iii) meeting our operational and technical goals at our manufacturing facility; (iv) meeting our cash runway target; and (v) securing a partner for our mesothelin targeted CAR T program with the execution of our strategic collaboration with Bayer for our CAR T platform. We also continued to cultivate a high performing corporate culture, notwithstanding the disruption caused by the COVID-19 pandemic, and filled critical roles at the Company in order to drive the execution of our corporate objectives. In addition to achieving the foregoing corporate goals, we also made significant progress on our strategic priorities in 2020. We conducted an interim analysis of the Phase 3 ALLELE study showing tab-cel for patients with EBV+ PTLD achieved a 50% objective response rate and safety consistent with historical data. We had productive discussions with the FDA on the BLA filing package and completed the preclinical module 4 of the BLA filing package. In Europe, we received ratification from the Pediatric Committee of the European Medicines Agency of our PIP for tab-cel. We also presented data across our programs at a number of virtual congresses and conferences throughout 2020, including ATA188 data showing PMS patients achieving SDI at any time point maintained SDI at all future time points, with favorable safety at all dose levels. We believe our strategic collaboration with Bayer for ATA2271 and ATA3271 serves as strong recognition of the innovative and leading position of our CAR T platform. We also rapidly and effectively responded to the COVID-19 pandemic with support designed to address our employees’ needs and operational requirements. At the onset of the COVID-19 pandemic, we promptly established a pandemic rapid response team, implemented new oversight, operational and safety protocols to enable a core essential team to safely work in our laboratories and manufacturing facility. With these new safety measures, we continued to manufacture, test, release and deliver our clinical products to patients without delay and advance our pre-clinical and translational research at our laboratories despite the impact of the COVID-19 pandemic.
The Board evaluated the Company’s performance against the above goals considering the additional challenges brought on by the COVID-19 pandemic. The Board determined the Company was able to meet key critical goals relating to our pipeline and corporate operations. The Board also determined where certain goals were not achieved, or where there was delayed achievement, such non-achievement or delayed achievement was immaterial in the overall context of these goals. The Board further determined the Company overachieved a number of the goals, including with regard to the goals relating to the continuing advances in the development of our platform, securing a strategic collaboration with Bayer, meeting our cash runway target, improvements in staff member engagement, recruitment of talented executives to fill critical roles and enhancement of our corporate culture. Based on the Company’s foregoing achievements, considering the unanticipated and significant challenges and additional workload imposed by the need to adapt to the unprecedented environment created by the COVID-19 pandemic, and as recommended by the Compensation Committee, the Board deemed it appropriate to approve 100% achievement of the 2020 corporate goals. In consideration of the foregoing, in February 2021, pursuant to the terms and conditions of the applicable annual bonus guidelines, the Compensation Committee approved annual cash bonus payments for each named executive officer as reflected in the table below. Name | 2020 Bonus Target | Corporate Score Modifier | 2020 Individual Modifier | 2020 Actual Bonus Paid as a % of Salary | 2020 Actual Bonus Paid | Pascal Touchon, D.V.M. | 65% | 100% | -- | 65.0% | $422,500 | Jakob Dupont, M.D.1 | 45% | 100% | 115% | 28.7% | $143,346 | Utpal Koppikar | 40% | 100% | 115% | 40.9% | $187,032 | Joseph Newell | 45% | 100% | 115% | 45.2% | $203,435 | Kristin Yarema, Ph.D.2 | 40% | 100% | 115% | 35.2% | $147,995 |
1Dr. Dupont joined the Company in May 2020, which resulted in a prorated annual bonus. 2Dr. Yarema joined the Company in February 2020, which resulted in a prorated annual bonus. Long-Term Incentives Our goal is to align executive compensation and performance that advances our critical business objectives. Therefore, a significant portion of the named executive officers’ total compensation typically has consisted of, and is expected to continue to consist of, equity-based awards. In evaluating the mix of equity awards for 2020, the Compensation Committee considered market trends, as well as applicable feedback from stockholders and proxy advisory firms, and determined that a mix of stock options, RSUs and where appropriate, PSUs, would be the most appropriate incentive structure for our named executive officers to reward performance over time and achieve our retention objectives. The following table outlines the equity awards granted to named executive officers in 2020 (excluding one-time retention grants).
Equity Grants Named Executive Officer | Grant Date | Type of Grant | Stock Options (#) | RSUs (#) | PSUs (#)1 | Pascal Touchon, D.V.M. | March 1, 2020 | Annual | 242,000 | 150,000 | | | March 1, 2020 | Performance | | | 100,300 | Jakob Dupont, M.D. | May 14, 2020 | New Hire | 277,500 | 46,250 | | | September 18, 2020 | Performance | | | 15,1202 | Utpal Koppikar | March 1, 2020 | Annual | 73,750 | 36,875 | | | March 1, 2020 | Performance | | | 17,700 | Joseph Newell | March 1, 2020 | Annual | 53,000 | 26,500 | | | March 1, 2020 | Promotional | 17,000 | 8,500 | | | March 1, 2020 | Performance | | | 29,795 | Kristin Yarema, Ph.D. | February 18, 2020 | New Hire | 110,000 | 55,000 | | | September 18, 2020 | Performance | | | 9,0003 |
1Reflects 100% target payout of PSUs. 2 Dr. Dupont joined the Company in May 2020, which resulted in a reduced PSU grant. 3Dr. Yarema joined the Company in February 2020, which resulted in a reduced PSU grant. Stock Options The Compensation Committee grants stock options to emphasize retention and align the named executive officers’ interests with those of stockholders. These awards provide a necessary balance between performance-based and time-vesting awards. Stock option awards will generally be fully vested four years after the option grant date, subject to continuous service. RSUs RSUs are an important retention vehicle for named executive officers, as well as a variable and at-risk component of executive compensation. Market trends reflect their favored use among our peer group and other companies in the biotechnology sector. RSU awards will generally be fully vested four years after the RSU grant date, subject to continuous service. PSUs Our currently outstanding PSUs are contingent on the completion of significant performance goals and milestones related to tab-cel, as approved by the Compensation Committee in March 2020. The PSUs vest in three separate tranches, each tied to one of the following tab-cel milestones: (i) initiation of a BLA; (ii) completion of a BLA filing; and (iii) receipt of FDA marketing approval. The number of PSUs that actually vest upon completion of a milestone is also contingent on the timing of when the applicable milestone is met and is scaled such that a larger percentage of PSUs vest on the earlier achievement of such milestone. The PSU tranches relating to the initiation of a BLA and the completion of a BLA filing may vest between 0-100%, and the PSU tranche relating to the receipt of FDA marketing approval may vest between 0-130%, in each case depending on the date when such applicable milestone is achieved. None of these PSUs vested in 2020. Additionally, in September 2020, the Compensation Committee approved PSUs for certain employees joining the Company between January 2020 and June 2020. This PSU grant is contingent upon the receipt of FDA marketing approval. The number of PSUs that actually vest upon completion of the milestone is also contingent on the timing of when the milestone is met and is scaled such that a larger percentage of PSUs vest on the earlier achievement of the milestone. These PSUs may vest between 0-130%, depending on the date when the milestone is achieved. None of these PSUs vested in 2020.
One-Time Retention Grants The Compensation Committee recognizes the Company operates in the highly competitively biotechnology industry, and in particular, within the cell and gene therapy area. The Compensation Committee believes that retention grants are crucial tools for rewarding key employees for their achievements as well as future performance. In 2020, the Compensation Committee approved one-time, targeted retention grants of RSUs to certain key individuals at the Company along with their 2020 annual RSU grants to mitigate attrition and promote retention amongst leaders critical to our business continuity and to our ability to achieve our strategic objectives and meet significant milestones. The following targeted retention grants were made to named executive officers in 2020. Named Executive Officer | Grant Date | RSU Grant (#) | Pascal Touchon, D.V.M. | - | - | Jakob Dupont, M.D.1 | - | - | Utpal Koppikar | March 1, 2020 | 30,000 | Joseph Newell | March 1, 2020 | 40,000 | Kristin Yarema, Ph.D.2 | - | - |
1Dr. Dupont joined the Company in May 2020 and was ineligible to receive a retention grant. 2Dr. Yarema joined the Company in February 2020 and was ineligible to receive a retention grant.
Other Compensation Policies and Practices
Hedging Policy The Company’s policies prohibit all employees (including executive officers) and directors from engaging in short sales, transactions in put or call options, hedging transactions or similar inherently speculative transactions with respect to our stock at any time. Stock Ownership Guidelines Effective as of January 1, 2021, in order to further align their financial interests with those of our stockholders as well as to promote sound corporate governance, we adopted stock ownership guidelines for our named executive officers. These guidelines establish the following ownership targets for the value of stock held by each individual: Role | Ownership Guideline (as a multiple of base pay) | Chief Executive Officer | 3x | All other Officers | 1x | Non-employee Directors | 3x |
The guidelines must be achieved (i) by each individual covered under the guidelines (a “Covered Individual”) by December 31, 2025 and (ii) for any individual who becomes a Covered Individual after January 1, 2021, by December 31 of the calendar year in which the fifth anniversary of the date the individual became a Covered Individual occurs. The shares counted towards the ownership requirements specified in the guidelines include shares owned outright (valued at fair market value), unvested RSUs (valued at 70% of fair market value) and vested stock options (valued at 70% of intrinsic value, the number of shares vested multiplied by the difference between the exercise price and the Nasdaq closing price of our common stock on the measurement date), as applicable, to account for any sales of such equity required to be sold or withheld to cover taxes.
Once a Covered Individual has complied with these Guidelines, such Covered Individual shall be deemed to remain compliant under the guidelines notwithstanding any change in his or her base pay or change in the value of his or her equity which would otherwise make such Covered Individual non-compliant; provided that a sale or other disposition of shares of stock (other than the sale, or surrender to the Company, of shares of stock in payment of the exercise price of any equity award or in satisfaction of taxes in connection with vesting or exercise of any equity award) may, as applicable, cause the Covered Individual to no longer be deemed in compliance with the guidelines. A Covered Individual’s ownership is reviewed annually as of December 31 of a calendar year to determine if the Covered Individual has met, or is on track to meet, the applicable guideline. As of March 31, 2021, each Covered Individual is either in compliance, or on track to be in compliance, with the ownership targets set forth in the guidelines within the timeframe specified in the guidelines. Clawback Policy In December 2020, the Board adopted the Clawback Policy which provides for the Company’s recoupment of certain incentive compensation paid to covered officers of the Company under certain circumstances of misconduct. The Board may delegate determinations to be made under the Policy to a committee of the Board. Pursuant to the Clawback Policy: (i) “misconduct” refers to a knowing violation of SEC rules or regulations or Company policy or the willful commission of an act of fraud, dishonesty or gross recklessness in the performance or disregard of a person’s duties; and (ii) “covered officer” refers to a current or former officer of the Company who is or was designated as an “officer” for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, by the Board or an appropriate committee of the Board. There was no recoupment under the Clawback Policy in 2020. Accounting and Tax Considerations Under the Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (Topic 718) (“ASC 718”), we are required to estimate and record an expense for each award of equity compensation (including stock options, RSUs and PSUs) over the vesting period of the award. For such period as stock options, RSUs and PSUs remain the sole components of our long-term compensation program, we expect to record stock-based compensation expense on an ongoing basis according to ASC 718. Compensation expense relating to awards subject to performance conditions is recognized if it is probable that the performance goals will be achieved. The probability of achievement of such goals is assessed on a quarterly basis. The Compensation Committee has considered, and may in the future consider, the grant of restricted stock to our executive officers in lieu of stock option grants, RSU and/or PSU awards. Under Section 162(m) of the Internal Revenue Code (“Section 162(m)”), compensation paid to each of the Company’s “covered employees” that exceeds $1 million per taxable year is generally non-deductible unless the compensation qualifies for certain grandfathered exceptions (including the “performance-based compensation” exception) for certain compensation paid pursuant to a written binding contract in effect on November 2, 2017 and not materially modified on or after such date. Although the Compensation Committee will continue to consider tax implications as one factor in determining executive compensation, the Compensation Committee also looks at other factors in making its decisions and retains the flexibility to provide compensation for the named executive officers in a manner consistent with the goals of the Company’s executive compensation program and the best interests of the Company and its stockholders, which may include providing for compensation that is not deductible by the Company due to the deduction limit under Section 162(m). The Compensation Committee also retains the flexibility to modify compensation that was initially intended to be exempt from the deduction limit under Section 162(m) if it determines that such modifications are consistent with the Company’s business needs. Compensation Policies and Practices as They Relate to Risk Management The Compensation Committee has reviewed the Company’s compensation policies and practices, in consultation with Radford and the Company’s outside counsel, to assess whether they encourage employees to take inappropriate risks. After reviewing and assessing the Company’s compensation philosophy, terms and practices, including the mix of fixed and variable, short and long-term incentives and overall pay, incentive plan structures and the checks and balances built into, and oversight of, each plan and practice, the Compensation Committee determined that any risks arising from our compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on our Company as a whole.
EXECUTIVE COMPENSATIONCEO Pay Ratio Disclosure
Under the Dodd-Frank Act and the related SEC rule (the “Rule”), we are required to provide our stockholders with specified disclosure regarding the relationship of our Chief Executive Officer’s total compensation to the total compensation of our median employee, referred to as “pay-ratio” disclosure. For 2020, the annual total compensation of our Chief Executive Officer, for purposes of this disclosure, was $5,285,827, and the compensation of our median employee was $192,923, resulting in a pay ratio of approximately 27:1. In accordance with SEC rules, we have identified the median employee as of December 31, 2020 by: (i) aggregating for each applicable employee: (a) annual base salary for salaried employees (or annual scheduled wages plus overtime for hourly employees), (b) the target incentive pay paid for fiscal year 2020, and (c) the estimated grant date fair value of any equity awards granted during fiscal year 2020, and (ii) ranking this compensation measure for our employees from lowest to highest. This calculation was performed for all employees employed by us as of December 31, 2020, excluding the Chief Executive Officer, whether employed on a full-time, part-time or seasonal basis. In making this determination, we annualized the compensation of employees who were employed by the Company for less than the entire fiscal year. This compensation measure was consistently applied to all employees included in the calculation and reasonably reflects the annual compensation of employees. All amounts paid in currencies other than US Dollars were converted to US Dollars based on the applicable average annual exchange rates. The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our internal records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Therefore, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. Dr. Touchon’s compensation as Chief Executive Officer for 2020 was as follows: Name | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($) | All Other Compensation ($) | Total ($) | Pascal Touchon, D.V.M. | 2020 | 654,857 | 422,500 | 2,235,600 | 1,959,208 | 13,662 | 5,285,827 | | | | | | | | |
| (1) | Amounts reported in this column for 2020 represent discretionary bonuses approved in February 2021 by our Board for fiscal year 2020, following the achievement of certain corporate goals as determined by the Compensation Committee and as detailed in the heading “Compensation Discussion & Analysis – Performance Evaluation”. |
| (2) | The amounts in this column reflect the grant date aggregate fair value of PSUs based on the performance conditions deemed probable as of the grant date. The maximum potential value of PSUs (assuming the highest level of performance achievement) for Dr. Touchon is $1,218,645. |
Summary Compensation Table The following table sets forth information regarding compensation awarded to or earned by theour named executive officers listed below during the years ended December 31, 20152020, 2019 and December 31, 2014. As an emerging growth company, we comply with the executive compensation disclosure rules applicable to “smaller reporting companies,” as such term is defined in the rules promulgated under the Securities Act, which require compensation disclosure for our principal executive officer and the two most highly compensated executive officers other than our principal executive officer. These three officers are referred to as our named executive officers.2018. Name and Principal Position | | Year | | Salary | | | Bonus(1) | | | Stock Awards(2) | | | Option Awards(3) | | | All Other Compensation(4) | | | Total | | Isaac E. Ciechanover, M.D. | | 2015 | | $ | 506,250 | | | $ | 419,569 | | | $ | 955,700 | | | $ | 4,658,726 | | | $ | 5,286 | | | $ | 6,545,531 | | Chief Executive Officer | | 2014 | | | 410,825 | | | | 420,100 | | | | 812,236 | | | | 907,238 | | | | 4,890 | | | | 2,555,289 | | Christopher Haqq, M.D., Ph.D. | | 2015 | | | 381,250 | | | | 198,250 | | | | 311,860 | | | | 1,562,012 | | | | 3,254 | | | | 2,456,626 | | Chief Medical Officer | | 2014 | | | 333,225 | | | | 168,750 | | | | 113,995 | | | | 292,658 | | | | 1,994 | | | | 910,622 | | Heather Turner | | 2015 | | | 159,614 | | | | 88,117 | | | | — | | | | 5,139,147 | | | | 40,721 | | | | 5,427,598 | | Vice President, General Counsel and Secretary | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | All Other Compensation ($)(4) | Total ($) | Pascal Touchon, D.V.M.(5) | 2020 | 654,857 | 422,500 | 2,235,600 | 1,959,208 | 13,662 | 5,285,827 | President & Chief Executive Officer | 2019 | 319,327 | 334,791 | 2,861,712 | 3,049,718 | 71,760 | 6,637,307 | | | | | | | | | Jakob Dupont, M.D.(6) | 2020 | 319,231 | 143,346 | 443,075 | 1,757,296 | 133,297 | 2,796,245 | EVP, Global Head of Research and Development | | | | | | | | | | | | | | | | Utpal Koppikar(7) | 2020 | 460,947 | 187,032 | 885,431 | 597,073 | 7,470 | 2,137,953 | Chief Financial Officer | 2019 | 439,875 | 155,606 | 1,034,714 | 909,080 | 895 | 2,540,170 | | 2018 | 240,289 | 189,771 | 1,903,500 | 1,886,325 | 398 | 4,220,282 | | | | | | | | | Joseph Newell | 2020 | 466,055 | 203,435 | 1,033,965 | 566,713 | 895 | 2,251,063 | EVP, Chief Operations | 2019 | 390,000 | 155,208 | 1,240,675 | 932,390 | 895 | 2,719,167 | Officer | 2018 | 365,000 | 155,490 | 895,000 | 1,060,710 | 16,092 | 2,492,292 | | | | | | | | | Kristin Yarema, Ph.D.(8) | 2020 | 368,308 | 147,995 | 668,250 | 1,067,484 | 184,370 | 2,436,407 | SVP, Chief Commercial Officer | | | | | | | |
(1) | Amounts reported in this column for 2014 represent discretionary bonuses approved in January 2015 by our Board for fiscal year 2014, based on company and individual performance and a monthly payment of $4,800 for Dr. Ciechanover. Amounts reported in this column for 20152020 represent discretionary bonuses approved in February 20162021 by our Boardthe Compensation Committee for fiscal year 2015, based on company2020, following the achievement of certain corporate goals as determined by the Board and individual performance and a monthly payment of $4,800 for Dr. Ciechanover and a discretionary bonus of $15,000 for Ms. Turner paidas detailed in September 2015.the heading “Compensation Discussion & Analysis – Performance Evaluation”. |
(2) | The amounts in this column reflect: (i) the aggregate fair value of RSUs awarded during the year, computed at the measurement date in accordance with FASB ASC Topic 718, and (ii) the grant date aggregate fair value of PSUs based on the performance conditions deemed probable as of the grant date. The maximum potential value of PSUs (assuming the highest level of performance achievement) are as follows: (a) in the case of Dr. Touchon, $1,218,645; (b) in the case of Dr. Dupont, $312,560; (c) in the case of Mr. Koppikar, $215,055; (d) in the case of Mr. Newell, $362,009; and (e) in the case of Dr. Yarema, $185,679. Pursuant to SEC rules, the amounts shown assume that there will be no service-based forfeitures of awards. Assumptions used in the calculation of these amounts are included in the notes to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. |
(3) | The amounts in this column reflect the aggregate fair value of RSUs awardedstock options granted during the year, computed at the measurement date in accordance with FASB ASC Topic 718. Pursuant to SEC rules, the amounts shown assume that there will be no service-based forfeitures of awards. Assumptions used in the calculation of these amounts are included in the notes to our consolidated financial statements included in our annual reportAnnual Report on Form 10-K for the year ended December 31, 2015. |
(3)
| Amounts reported as the dollar value of option awards2020. These amounts do not reflect compensation actually receivedthe actual economic value that will be realized by the named executive officer. Instead,officer upon the amount reported isvesting of the grant date fair value calculated under FASB ASC Topic 718. Pursuant to SEC rules,stock options, the amounts shown assume that there will be no service-based forfeituresexercise of awards. Assumptions used in the calculationstock options, or the sale of these amounts are included in the notes to our consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2015.common stock underlying such stock options.
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(4) | Amounts reported in this column include the following: (a) life insurance premiums paid on behalf of the named executive officers, (b) to the extent the named executive officer participated, employer contributions to the named executive officers’ 401k benefit plan accounts under the Company’s employer match program, (c) to the extent the named executive officer participated, reimbursements up to $250 under the Company’s wellness program, (d) in the case of Dr. Ciechanover, also includes a $3,000 medical insurance opt-out benefitTouchon, additional payments of $4,467 in relocation assistance in 2020 and (c)additional payments of $41,413 in relocation assistance and $30,000 in housing allowance in 2019, (e) in the case of Ms. Turner, also includesMr. Newell, additional payments of $15,403 in 2018 for relocation assistance, (f) in the case of Dr. Dupont, a $40,000 sign-on bonus.bonus cash payment of $130,000 in 2020 in connection with his joining the Company in May 2020, and (g) in the case of Dr. Yarema, a sign-on bonus cash payment of $175,000 in 2020 in connection with her joining the Company in February 2020. |
(5) | Dr. Touchon joined the Company in June 2019. |
(6) | Dr. Dupont joined the Company in May 2020. |
(7) | Mr. Koppikar joined the Company in June 2018. |
(8) | Dr. Yarema joined the Company in February 2020. |
27Grants of Plan-Based Awards
The following table provides information regarding grants of plan-based awards to our named executive officers for the fiscal year ended December 31, 2020: Name | | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | Award Type | Threshold ($) | Target ($) | Maximum ($) | Target ($) | Maximum ($) | (a) | | (b) | (c) | (d) | (e) | | | (i) | (j) | (k) | (l) | Pascal Touchon, D.V.M. | Annual Grant | 3/1/2020 | | | | | | 150,000 | 242,000 | 12.15 | 3,781,708 | | PSU(3) | 3/1/2020 | | | | 85,000 | 100,300 | | 413,100 | | | | Annual Cash | | | 422,232 | (1) | | | | | | | | | | | | | | | | | | | Jakob Dupont, M.D. | New Hire Grant | 5/14/2020 | | | | | | 46,250 | 277,500 | 9.58 | 2,200,372 | | PSU(3) | 9/18/2020 | | | | 15,150 | 19,695 | | --- | | | | Annual Cash | | | 140,192 | (2) | | | | | | | | | | | | | | | | | | | Utpal Koppikar | Annual Grant | 3/1/2020 | | | | | | 36,875 | 73,750 | 12.15 | 1,045,104 | | Retention Grant | 3/1/2020 | | | | | | 30,000 | | | 364,500 | | PSU(3) | 3/1/2020 | | | | 15,000 | 17,700 | | 72,900 | | | | Annual Cash | | | 182,917 | (2) | | | | | | | | | | | | | | | | | | | Joseph Newell | Annual Grant | 3/1/2020 | | | | | | 26,500 | 53,000 | 12.15 | 751,058 | | Retention Grant | 3/1/2020 | | | | | | 40,000 | | | 486,000 | | PSU(3) | 3/1/2020 | | | | 25,250 | 29,795 | | 122,715 | | | | Promotion Grant | 3/1/2020 | | | | | | 8,500 | 17,000 | 12.15 | 240,905 | | Annual Cash | | | 198,959 | (2) | | | | | | | | | | | | | | | | | | | Kristin Yarema, Ph.D. | New Hire Grant | 2/18/2020 | | | | | | | 110,000 | 14.56 | 1,067,484 | | New Hire Grant | 3/1/2020 | | | | | | 55,000 | | | 668,250 | | PSU(3) | 9/18/2020 | | | | 9,000 | 11,700 | | --- | | | | Annual Cash | | | 144,739 | (2) | | | | | | |
(1) | 100% of our Chief Executive Officer’s bonus is linked to corporate performance, which is not capped. |
(2) | 85% of this named executive officer’s bonus is linked to corporate performance, which is not capped, and 15% is linked to individual performance, which is capped at 125% of the target amount. |
(3) | The share amounts reported represent the target and maximum number of shares to be issued upon the vesting of these PSUs. The number of PSUs that actually vest upon completion of a milestone is also contingent on the timing of when the applicable milestone is met and is scaled such that a larger percentage of PSUs vest on the earlier achievement of such milestone. The vesting of such PSU awards is based on the completion of performance goals and milestones related to tab-cel, as detailed under the heading “Compensation Discussion and Analysis—PSUs.” |
Outstanding Equity Awards atas of December 31, 20152020 The following table provides information regarding outstanding equity awards held by our named executive officers as of December 31, 2015.2020. | | | | | | | | Option Awards | | | Stock Awards | | Name | | Grant Date | | Notes | | | Number of Securities Underlying Unexercised Options Exercisable | | | Number of Securities Underlying Unexercised Options Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | | All Other Stock Awards: Number of Shares or Units That Have Not Vested | | | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | | Isaac E. Ciechanover, M.D. | | 08/30/12 | | | (2) | | | | — | | | | — | | | | — | | | | — | | | | 185,096 | | | | 4,888,385 | | | | 01/10/14 | | | (3) | | | | — | | | | — | | | | — | | | | — | | | | 49,231 | | | | 1,300,191 | | | | 10/15/14 | | | (4) | | | | 45,208 | | | | 109,792 | | | | 11.00 | | | 10/14/21 | | | | — | | | | — | | | | 01/16/15 | | | (4) | | | | 9,472 | | | | 97,639 | | | | 25.15 | | | | 01/15/22 | | | | | | | | | | | | 01/16/15 | | | (5) | | | | — | | | | — | | | | — | | | | — | | | | 29,292 | | | | 773,602 | | | | 12/17/15 | | | (4) | | | | — | | | | 220,000 | | | | 22.72 | | | | 12/16/22 | | | | — | | | | — | | Christopher Haqq, M.D., Ph.D. | | 03/4/13 | | | (6) | | | | — | | | | — | | | | — | | | | — | | | | 48,317 | | | | 1,276,052 | | | | 01/10/14 | | | (3) | | | | — | | | | — | | | | — | | | — | | | | 6,909 | | | | 182,467 | | | | 10/15/14 | | | (4) | | | | 14,583 | | | | 35,417 | | | | 11.00 | | | 10/14/21 | | | | — | | | | — | | | | 01/16/15 | | | (4) | | | | 9,472 | | | | 31,861 | | | | 25.15 | | | 01/15/22 | | | | | | | | | | | | 01/16/15 | | | (5) | | | | — | | | | — | | | | — | | | — | | | | 9,558 | | | | 252,247 | | | | 12/17/15 | | | (4) | | | | — | | | | 75,000 | | | | 22.72 | | | 12/16/22 | | | | — | | | | — | | Heather Turner | | 08/03/15 | | | (7) | | | | — | | | | 130,000 | | | | 56.98 | | | 08/02/22 | | | | — | | | | — | | | | 12/17/15 | | | (4) | | | | — | | | | 65,000 | | | | 22.72 | | | 12/16/22 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | Option Awards | Stock Awards | Equity Incentive Plan Awards | Name | Grant Date | Notes | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) |
Number of Unearned Shares, Unit or Other Rights That Have Not Vested (#)
| Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1)
| Target ($) | Maximum ($) | Pascal | 6/24/2019 | (2) | --- | --- | --- | --- | 84,375 | 1,656,281 | | | Touchon, | 6/24/2019 | (3) | 84,375 | 140,625 | 20.43 | 6/23/2029 | --- | --- | | | D.V.M. | 3/1/2020 | (4) | --- | --- | --- | --- | 121,875 | 2,392,406 | | | | 3/1/2020 | (5) | 45,375 | 196,625 | 12.15 | 2/28/2030 | --- | --- | | | | 3/1/2020 | (11) | | --- | --- | --- | --- | --- | --- | 96,050 | 1,885,462 | Jakob Dupont, | 5/14/2020 | (10) | --- | --- | --- | --- | 46,250 | 907,888 | | | M.D. | 5/14/2020 | (9) | --- | 277,500 | 9.58 | 5/13/2030 | --- | --- | | | | 9/18/2020 | (12) | --- | --- | --- | --- | --- | --- | --- | 19,695 | 386,613 | Utpal | 6/7/2018 | (2) | --- | --- | --- | --- | 22,500 | 441,675 | | | Koppikar | 6/7/2018 | (3) | 46,875 | 28,125 | 42.30 | 6/6/2025 | --- | --- | | | | 2/6/2019 | (6) | --- | --- | --- | --- | 12,797 | 251,205 | | | | 2/6/2019 | (5) | 15,641 | 18,484 | 38.47 | 2/5/2029 | --- | --- | | | | 3/26/2019 | (7) | --- | --- | --- | --- | 5,000 | 98,150 | | | | 3/1/2020 | (5) | 13,828 | 59,922 | 12.15 | 2/28/2030 | --- | --- | | | | 3/1/2020 | (4) | --- | --- | --- | --- | 54,338 | 1,066,655 | | | | 3/1/2020 | (11) | --- | --- | --- | --- | --- | --- | --- | 16,950 | 332,729 | Joseph Newell | 4/3/2017 | (8) | --- | --- | --- | --- | 1,875 | 36,806 | | | | 4/3/2017 | (9) | 57,500 | 7,500 | 20.40 | 4/2/2024 | --- | --- | | | | 2/6/2018 | (6) | --- | --- | --- | --- | 12,500 | 245,375 | | | | 2/6/2018 | (5) | 35,417 | 14,583 | 35.80 | 2/5/2025 | --- | --- | | | | 2/6/2019 | (6) | --- | --- | --- | --- | 13,125 | 257,644 | | | | 2/6/2019 | (5) | 16,042 | 18,958 | 38.47 | 2/5/2029 | --- | --- | | | | 3/26/2019 | (7) | --- | --- | --- | --- | 7,500 | 147,225 | | | | 3/1/2020 | (5) | 6,125 | 56,875 | 12.15 | 2/28/2030 | --- | --- | | | | 3/1/2020 | (4) | --- | --- | --- | --- | 60,939 | 1,196,233 | | | | 3/1/2020 | (11) | --- | --- | --- | --- | --- | --- | --- | 28,532 | 560,083 | Kristin | 2/18/2020 | (3) | --- | 110,000 | 14.56 | 2/17/2030 | --- | --- | | | Yarema, Ph.D. | 3/1/2020 | (10) | --- | --- | --- | --- | 55,000 | 1,079,650 | | | | 9/18/2020 | (12) | --- | --- | --- | --- | --- | --- | --- | 11,700 | 229,671 |
(1) | Amounts reflect the value of RSUs, each with respect to one share of our common stock, as of December 31, 2015.2020. |
(2) | Represents RSUs issued as an inducement grant under Nasdaq Listing Rule 5635(c)(4) pursuant to our 2018 Inducement Plan (the “Inducement Plan”). 25% of the unvested portion of 1,066,155 restricted shares purchased in August 2012 by the Isaac E. Ciechanover and Alison M. Ciechanover Family Trust dated August 8, 2008, which shares are subject to vesting over four years,the RSUs vest upon completion of one year of service, and on the same day for each year thereafter, subject to Dr. Ciechanover’s continuous service, commencing on October 2012.service. |
(3) | Represents RSUsoptions issued as an inducement grant under Nasdaq Listing Rule 5635(c)(4) pursuant to the 2012 Equity Incentive PlanInducement Plan. 25% of Nina Biotherapeutics, Inc., the 2012 Equity Incentive Plan of Pinta Biotherapeutics, Inc. and the 2012 Equity Incentive Plan of Santa Maria Biotherapeutics, Inc. (collectively, the “2012 Plans”), which areshares subject to both (i) a liquidity-based performance vesting condition, which was metthe options vest upon completion of our initial public offering in October 2014,one year of service, and (ii) a service-based vesting condition. The service-based vesting condition is satisfied as tothereafter, an additional 1/48th of the total number of shares underlying the options vest each month, subject to continuous service RSUs. |
(4) | Represents RSUs issued under the 2014 Equity Incentive Plan (the “2014 EIP”). Approximately 1/16th of the total number of shares underlying the RSUs each month measuredvest on specific dates that approximately quarterly vesting from the grant date, subject to continuous service. |
(4)(5)
| Represents options issued under the 2014 EIP. 1/48th of the total number shares underlying the options vest each month measured from the grant date, subject to continuous service. |
(5)(6)
| Represents RSUs issued under the 2014 EIP. 1/48th25% of the total number of shares underlying the RSUs vest annually measured from the grant date, subject to continuous service. |
(7) | Represents RSUs issued under the 2014 EIP. 50% of the total number of shares underlying the RSUs vest annually measured from the grant date, subject to continuous service. |
(8) | Represents RSUs issued under the 2014 EIP. 25% of the total number shares underlying the RSUs vest upon completion of one year of service, and thereafter, an additional 25% of the total number of shares underlying the RSUs vest on the same day for each month measured from the grant date,year thereafter, subject to continuous service. |
(6)(9)
| Represents the unvested portion of 269,230 restricted shares purchased in March 2013 by Dr. Haqq, which shares are subject to vesting over four years, subject to Dr. Haqq’s continuous service, commencing in September 2012.
|
(7)
| Represents options issued under the 2014 EIP. 25% of the shares underlying the options vest upon completion of one year of service, measured from the vesting commencement date of July 6, 2015, and thereafter, an additional 1/48th of the total number of shares underlying the options vest each month, subject to Ms. Turner’s continuous service. |
(10) | Represents RSUs issued as an inducement grant under the Nasdaq Listing Rule 5635(c)(4) pursuant to the Inducement Plan. 25% of the shares subject to the RSUs vest upon completion of approximately one year of service, and thereafter, an additional approximately 1/16th of the total number of shares underlying the RSUs vest on specific dates that approximately quarterly vesting, subject to continuous service. |
(11) | The share amounts reported represent the target and maximum number of shares to be issued upon the vesting of these PSUs. The number of PSUs that actually vest upon completion of a milestone is also contingent on the timing of when the applicable milestone is met and is scaled such that a larger percentage of PSUs vest on the earlier achievement of such milestone. The vesting of such PSU awards is based on the completion of performance goals and milestones related to tab-cel, as detailed under the heading “Compensation Discussion and Analysis—PSUs.” |
(12) | The share amounts reported represent the target and maximum number of shares to be issued upon the vesting of these PSUs. The vesting of such PSU awards is based on the receipt of FDA marketing approval for tab-cel, as detailed under the heading “Compensation Discussion and Analysis – PSUs”. |
Employment ArrangementsOption Exercises and Stock Vested
We have entered into employment agreements with each of
The following table sets forth certain information concerning the named executive officers. With the exception of his own arrangement, each of these employment agreements was negotiated onoption awards exercised and stock awards vested for our behalf by our Chief Executive Officer, with the oversight and approval of our Board. These arrangements provide for “at will” employment and set forth the initial terms and conditions of employment of each executive officer, including base salary, target bonus opportunity, standard employee benefit plan participation, a recommendation for initial equity awards, opportunities for postemployment compensation and vesting acceleration terms. The named executive officers also executed standard proprietary informationin 2020.
| Option Awards | Stock Awards | Name | Number of shares acquired on exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | Pascal Touchon, D.V.M. | --- | --- | 83,824 | 1,139,855 | Jakob Dupont, M.D. | --- | --- | --- | --- | Utpal Koppikar | --- | --- | 33,053 | 403,598 | Joseph Newell | 7,000 | 60,612 | 34,061 | 440,549 | Kristin Yarema, Ph.D. | --- | --- | --- | --- |
(1) | Represents intrinsic value, being the number of shares exercised multiplied by the difference between the exercise price and the Nasdaq closing price of our common stock on the date of exercise. |
(2) | Represents intrinsic value, being the number of shares released multiplied by the Nasdaq closing price of our common stock on the date of release. |
Pension Benefits We do not have a defined benefit plan. Our named executive officers did not participate in, or otherwise receive, any special benefits under, any pension or defined benefit retirement plan sponsored by us during 2020. Nonqualified Deferred Compensation During 2020, our named executive officers did not contribute to, or earn any amount with respect to, any defined contribution or other plan sponsored by us that provides for the deferral of compensation on a basis that is not tax-qualified. Employment Contracts and inventions agreement.Change in Control Arrangements 28
Isaac E. CiechanoverPascal Touchon, D.V.M.
We entered into an amended and restated executive employment agreement with Isaac E. Ciechanover,Dr. Touchon in May 2019 (the “Touchon Employment Agreement”) in connection with him joining the Company as our President and Chief Executive Officer in October 2015.June 2019. The employment agreement providesTouchon Employment Agreement provided for an initial annual base salary of $525,000, an additional monthly payment of $4,800 and$615,000, a target annual bonus of up to 55%65% of his then
current base salary.salary, and did not pro-rate his 2019 bonus payment based on his hire date. This agreement also provided Dr. Touchon with a relocation reimbursement of up to $100,000 for his permanent relocation to the San Francisco Bay Area. Under Dr. Ciechanover’s employment agreementthe Touchon Employment Agreement and the agreements governing his equity awards, he is entitled to certain benefits in the event of a change in control, termination of employment without cause or resignation for good reason. In the event Dr. Ciechanover’sTouchon’s employment is terminated by us without cause or he resigns for good reason, in either case, unrelated to a change in control (other than as a result of his death or disability), he will be entitled to receive the following benefits: | ·
| Severance pay in the form of a lump sum payment equal to his final base salary for the year in which the termination date occurs;
|
Severance pay in the form of continuation of his final monthly base salary for 12 months following termination; | ·
| Either (a) subject to Dr. Ciechanover’s timely election for continued coverage under COBRA, payment by us of his COBRA premiums for up to 12 months following his termination of employment or (b) if Dr. Ciechanover is not entitled to COBRA continuation coverage or if we determine that we cannot pay his COBRA premiums without potentially incurring financial costs or penalties under applicable law, payment by us to Dr. Ciechanover of a fully taxable cash payment equal to the applicable COBRA premiums on the first of each month for up to 12 months following his termination of employment; and
|
Pro rata bonus pay in an amount equal to the prorated amount of his target bonus amount for the year in which the termination of employment occurs; | ·
| Vesting of the equity awards that vest solely subject to Dr. Ciechanover’s continued service to the extent that such awards would have vested during the six months following termination of employment had his employment not terminated.
|
Prior year bonus pay if termination of employment occurs prior to his receipt of an annual bonus payment for the completed calendar year that immediately precedes the calendar year of his termination of employment; Either (a) subject to Dr. Touchon’s timely election for continued coverage under COBRA, reimbursement by us of his COBRA premiums for up to 12 months following his termination of employment or (b) if Dr. Touchon is not entitled to COBRA continuation coverage or if we determine that we cannot pay his COBRA premiums without potentially incurring financial costs or penalties under applicable law, payment by us to Dr. Touchon of a fully taxable cash payment equal to the applicable COBRA premiums on the first of each month for up to 12 months following his termination of employment; and Vesting and exercisability of the unvested time-based equity awards shall accelerate as if Dr. Touchon had provided an additional 12 months of continued services following his employment termination date. In addition, in the event Dr. Ciechanover’sTouchon’s employment is terminated by us without cause (other than as a result of his death or disability) at any time during the change in control period, or as a result of a resignationhe resigns for good reason at any time during the period commencing three months before and ending twelve months after a change in control period, he will be entitled to receive the following payments and benefits: | ·
| Severance pay in the form of a lump sum payment equal to his final base salary for the year in which the termination date occurs, multiplied by 1.5;
|
Severance pay in an amount equal to his final annual base salary plus his final target bonus amount, multiplied by two, paid in equal installments on the Company’s regular payroll schedule over the period of 24 months following his employment termination date; | ·
| Either (a) subject to Dr. Ciechanover’s timely election for continued coverage under COBRA, payment by us of his COBRA premiums for up to 18 months following his termination of employment or (b) if Dr. Ciechanover is not entitled to COBRA continuation coverage or if we determine that we cannot pay Dr. Ciechanover’s COBRA premiums without potentially incurring financial costs or penalties under applicable law, payment by us to Dr. Ciechanover of a fully taxable cash payment equal to the applicable COBRA premiums on the first of each month for up to 18 months following his termination of employment;
|
Prior year bonus pay if termination of employment occurs prior to his receipt of an annual bonus payment for the completed calendar year that immediately precedes the calendar year of his termination of employment; | ·
| Lump sum amount equal to his target bonus for that year, multiplied by 1.5; and
|
Either (a) subject to Dr. Touchon’s timely election for continued coverage under COBRA, reimbursement by us of his COBRA premiums for up to 24 months following his termination of employment or (b) if Dr. Touchon is not entitled to COBRA continuation coverage or if we determine that we cannot pay his COBRA premiums without potentially incurring financial costs or penalties under applicable law, payment by us to Dr. Touchon of a fully taxable cash payment equal to the applicable COBRA premiums on the first of each month for up to 24 months following his termination of employment; and | ·
| Full acceleration and immediate exercisability, if applicable, of all outstanding equity awards subject to time-based vesting conditions.
|
Full acceleration and immediate exercisability, if applicable, of all outstanding equity awards subject to time-based vesting conditions. In the event that Dr. Touchon’s employment is terminated by us as a result of his death or disability, he (or his heirs or estate) will be entitled to receive the following payments and benefits: Pro rata bonus pay in an amount equal to the prorated amount of his target bonus amount for the year in which the termination of employment occurs; and Prior year bonus pay if termination of employment occurs prior to his receipt of an annual bonus payment for the completed calendar year that immediately precedes the calendar year of his termination of employment. The receipt of any termination-based payments or benefits by Dr. CiechanoverTouchon is subject to his execution and the effectiveness of a release of claims against Atara.the Company. Pursuant to the Touchon Employment Agreement, if any payments or benefits provided to Dr. Ciechanover’s employment agreement also provides that, if Atara is subject toTouchon in connection with a change in control before Dr. Ciechanover’s service with us terminates,are subject to excise taxes as a result of the equity awards we granted to him on January 10, 2014application of Sections 280G and October 15, 20144999 of the Internal Revenue Code, such payments and benefits will fully accelerate suchbe reduced so that all shares become immediately vested and exercisable,no excise tax is payable, but only if applicable, upon such changethis reduction results in control.a more favorable after-tax position for him.
In January 2015,February 2021, the compensation committeeCompensation Committee approved a grant effective as of March 1, 2021 to Dr. CiechanoverTouchon of 38,000117,187 RSUs, and an optionoptions to purchase 126,667176,886 shares of common stock with an exercise price of $25.15 per share. In December 2015, the compensation committee approved a grant to Dr. Ciechanover of an option to purchase 220,000 shares of common stock with an exercise price of $22.72 per share. In February 2016, the compensation committee approved a grant to Dr. Ciechanover of 163,973 RSUs.stock. 29
Christopher HaqqJakob Dupont, M.D.
We entered into an amended and restated executive employment agreement with Christopher Haqq,Dr. Dupont in May 2020 (“Dupont Employment Agreement”) in connection with his joining the Company as our Chief Medical Officer,Executive Vice President, Head of Research and Development in October 2015.May 2020. The employment agreementDupont Employment Agreement provides for an initial annual base salary of $400,000$500,000 and a target annual bonus of up to 40%45% of his then current base salary. In addition, Dr. Dupont was entitled to a signing and retention bonus of $130,000, paid upon the commencement of his employment, subject to clawback by the Company. The clawback right expires according to the following schedule: (a) 50% on the first anniversary of Dr. Dupont’s start date; and (b) 50% on the second anniversary of Dr. Dupont’s start date. Furthermore, Dr. Dupont is entitled a second retention bonus of $130,000, payable in 2021, subject to clawback by the Company. The clawback rights to the second retention bonus expire according to the following schedule: (a) 50% on the second anniversary of Dr. Dupont’s start date; and (b) 50% on the third anniversary of Dr. Dupont’s start date. In addition, the Dupont Employment Agreement provides a commuting allowance of $3,500 per month, during the first 24-months of his employment to support travel between Company locations. Under Dr. Haqq’s employment agreementthe Dupont Employment Agreement and the agreements governing his equity awards, he is entitled to certain benefits in the event of a change in control, termination of employment without cause or resignation for good reason. In the event Dr. Haqq’sDupont’s employment is terminated by us without cause or he resigns for good reason, in either case, unrelated to a change in control (other than as a result of his death or disability), he will be entitled to receive the following benefits: | ·
| Severance pay in the form of the continuation of his final base salary for nine months following termination;
|
Severance pay in the form of the continuation of his final annual base salary for 12 months following termination; and Either (a) subject to Dr. Dupont’s timely election for continued coverage under COBRA, payment by us of his COBRA premiums for up to 12 months following his termination of employment or (b) if Dr. Dupont is not entitled to COBRA continuation coverage or if we determine that we cannot pay his COBRA premiums without potentially incurring financial costs or penalties under applicable law, payment by us to Dr. Dupont of a fully taxable cash payment equal to the applicable COBRA premiums on the first of each month for up to 12 months following his termination of employment. | ·
| Either (a) subject to Dr. Haqq’s timely election for continued coverage under COBRA, payment by us of his COBRA premiums for up to nine months following his termination of employment or (b) if Dr. Haqq is not entitled to COBRA continuation coverage or if we determine that we cannot pay his COBRA premiums without potentially incurring financial costs or penalties under applicable law, payment by us to Dr. Haqq of a fully taxable cash payment equal to the applicable COBRA premiums on the first of each month for up to nine months following his termination of employment; and
|
| ·
| Vesting of the equity awards that vest solely subject to Dr. Haqq’s continued service to the extent that such awards would have vested during the three months following termination of employment had his employment not terminated.
|
In addition, in the event Dr. Haqq’sDupont’s employment is terminated by us without cause (other than as a result of his death or disability) or as a result of a resignation for good reason, in either case, during the period commencing three months before and ending twelve months after a change in control period, he will be entitled to receive the following payments and benefits: | ·
| Severance pay in the form of a lump sum payment equal to his final base salary for the year in which the termination date occurs;
|
Severance pay in the form of a lump sum payment equal to his final annual base salary for 12 months following termination; | ·
| Either (a) subject to Dr. Haqq’s timely election for continued coverage under COBRA, payment by us of his COBRA premiums for up to 12 months following his termination of employment or (b) if Dr. Haqq is not entitled to COBRA continuation coverage or if we determine that we cannot pay his COBRA premiums without potentially incurring financial costs or penalties under applicable law, payment by us to Dr. Haqq of a fully taxable cash payment equal to the applicable COBRA premiums on the first of each month for up to 12 months following his termination of employment; and
|
Either (a) subject to Dr. Dupont’s timely election for continued coverage under COBRA, payment by us of his COBRA premiums for up to 12 months following his termination of employment or (b) if Dr. Dupont is not entitled to COBRA continuation coverage or if we determine that we cannot pay his COBRA premiums without potentially incurring financial costs or penalties under applicable law, payment by us to Dr. Dupont of a fully taxable cash payment equal to the applicable COBRA premiums on the first of each month for up to 12 months following his termination of employment; | ·
| Lump sum amount equal to his target bonus for that year; and
|
Lump sum amount equal to 100% of his target annual bonus for the year in which the termination date occurs; and | ·
| Full acceleration and immediate exercisability, if applicable, of all outstanding equity awards subject to time-based vesting conditions.
|
Full acceleration and immediate exercisability, if applicable, of all outstanding equity awards subject to time-based vesting conditions. The receipt of any termination-based payments or benefits by Dr. HaqqDupont is subject to his execution and the effectiveness of a release of claims against Atara.the Company. Pursuant to the Dupont Employment Agreement, if any payments or benefits provided to Dr. Haqq’sDupont in connection with a change in control are subject to excise taxes as a result of the application of Sections 280G and 4999 of the Internal Revenue Code, such payments and benefits will be reduced so that no excise tax is payable, but only if this reduction results in a more favorable after-tax position for him. In April 2020, the Compensation Committee approved a new hire grant effective as of May 14, 2020 to Dr. Dupont of 46,250 RSUs, and options to purchase 277,500 shares of stock.
In February 2021, the Compensation Committee approved a grant effective as of March 1, 2021 to Dr. Dupont of 53,879 RSUs, and options to purchase 81,327 shares of stock. Utpal Koppikar We entered into an executive employment agreement also provides that, if Atarawith Mr. Koppikar, our Senior Vice President, Chief Financial Officer, in May 2018 in connection with his joining the Company in June 2018. In November 2020, we amended and restated Mr. Koppikar’s executive employment agreement in a form consistent with our form of executive employment agreement previously filed with the SEC (the “Amended Koppikar Employment Agreement”). The Amended Koppikar Employment Agreement provided for an initial annual base salary of $457,500 and a target annual bonus of up to 40% of his then current base salary. Under the Amended Koppikar Employment Agreement and the agreements governing his equity awards, he is subjectentitled to certain benefits in the event of a change in control, termination of employment without cause or resignation for good reason. In the event Mr. Koppikar’s employment is terminated by us without cause or he resigns for good reason, in either case, unrelated to a change in control before Dr. Haqq’s service with(other than as a result of his death or disability), he will be entitled to receive the following benefits: Severance pay in the form of the continuation of his final annual base salary for 12 months following termination; and Either (a) subject to Mr. Koppikar’s timely election for continued coverage under COBRA, payment by us terminates,of his COBRA premiums for up to 12 months following his termination of employment or (b) if Mr. Koppikar is not entitled to COBRA continuation coverage or if we determine that we cannot pay his COBRA premiums without potentially incurring financial costs or penalties under applicable law, payment by us to Mr. Koppikar of a fully taxable cash payment equal to the applicable COBRA premiums on the first of each month for up to 12 months following his termination of employment. In addition, in the event Mr. Koppikar’s employment is terminated by us without cause (other than as a result of his death or disability) or as a result of a resignation for good reason, in either case, during the change in control period, he will be entitled to receive the following payments and benefits: Severance pay in the form of a lump sum payment equal to 12 months of his final annual base salary; Either (a) subject to Mr. Koppikar’s timely election for continued coverage under COBRA, payment by us of his COBRA premiums for up to 12 months following his termination of employment or (b) if Mr. Koppikar is not entitled to COBRA continuation coverage or if we determine that we cannot pay his COBRA premiums without potentially incurring financial costs or penalties under applicable law, payment by us to Mr. Koppikar of a fully taxable cash payment equal to the applicable COBRA premiums on the first of each month for up to 12 months following his termination of employment; Lump sum amount equal to 100% of his target annual bonus for the year in which the termination date occurs; and Full acceleration and immediate exercisability, if applicable, of all outstanding equity awards we grantedsubject to him on March 4, 2013, January 20, 2014time-based vesting conditions. The receipt of any termination-based payments or benefits by Mr. Koppikar is subject to his execution and October 15, 2014 will fully accelerate such that all shares become immediately vested and exercisable,the effectiveness of a release of claims against the Company. Pursuant to the Amended Koppikar Employment Agreement, if applicable, upon suchany payments or benefits provided to Mr. Koppikar in connection with a change in control.control are subject to excise taxes as a result of the application of Sections 280G and 4999 of the Internal Revenue Code, such payments and benefits will be reduced so that no excise tax is payable, but only if this reduction results in a more favorable after-tax position for him. In January 2015,February 2021, the compensation committeeCompensation Committee approved a grant effective as of March 1, 2021 to Dr. HaqqMr. Koppikar of 12,40045,258 RSUs, and an optionoptions to purchase 41,33368,314 shares of common stockstock.
Joseph Newell We entered into an executive employment agreement with Mr. Newell in March 2017 in connection with his joining the Company as our Executive Vice President, Chief Technical Operations Officer in April 2017. Mr. Newell was promoted to Executive Vice President, Chief Operations Officer in March 2020. In November 2020, we amended and restated Mr. Newell’s executive employment agreement in a form consistent with our form of executive employment agreement previously filed with the SEC (the “Amended Newell Employment Agreement”). The Amended Newell Employment Agreement provided for an exercise priceinitial annual base salary of $25.15 per share.$450,000 and a target annual bonus of up to 45% of his then current base salary. Under the Amended Newell Employment Agreement and the agreements governing his equity awards, he is entitled to certain benefits in the event of a change in control, termination of employment without cause or resignation for good reason. In December 2015, the compensation committeeevent Mr. Newell’s employment is terminated by us without cause or he resigns for good reason, in either case, unrelated to a change in control (other than as a result of his death or disability), he will be entitled to receive the following benefits: Severance pay in the form of the continuation of his final annual base salary for 12 months following termination; and Either (a) subject to Mr. Newell’s timely election for continued coverage under COBRA, payment by us of his COBRA premiums for up to 12 months following his termination of employment or (b) if Mr. Newell is not entitled to COBRA continuation coverage or if we determine that we cannot pay his COBRA premiums without potentially incurring financial costs or penalties under applicable law, payment by us to Mr. Newell of a fully taxable cash payment equal to the applicable COBRA premiums on the first of each month for up to 12 months following his termination of employment. In addition, in the event Mr. Newell’s employment is terminated by us without cause (other than as a result of his death or disability) or as a result of a resignation for good reason, in either case, during the change in control period, he will be entitled to receive the following payments and benefits: Severance pay in the form of a lump sum payment equal to his final annual base salary for 12 months following termination; Either (a) subject to Mr. Newell’s timely election for continued coverage under COBRA, payment by us of his COBRA premiums for up to 12 months following his termination of employment or (b) if Mr. Newell is not entitled to COBRA continuation coverage or if we determine that we cannot pay his COBRA premiums without potentially incurring financial costs or penalties under applicable law, payment by us to Mr. Newell of a fully taxable cash payment equal to the applicable COBRA premiums on the first of each month for up to 12 months following his termination of employment; Lump sum amount equal to 100% of his target annual bonus for the year in which the termination date occurs; and Full acceleration and immediate exercisability, if applicable, of all outstanding equity awards subject to time-based vesting conditions. The receipt of any termination-based payments or benefits by Mr. Newell is subject to his execution and the effectiveness of a release of claims against the Company. Pursuant to the Amended Newell Employment Agreement, if any payments or benefits provided to Mr. Newell in connection with a change in control are subject to excise taxes as a result of the application of Sections 280G and 4999 of the Internal Revenue Code, such payments and benefits will be reduced so that no excise tax is payable, but only if this reduction results in a more favorable after-tax position for him. In February 2021, the Compensation Committee approved a grant effective as of March 1, 2021 to Dr. HaqqMr. Newell of an option37,715 RSUs, and options to purchase 75,00056,929 shares of common stock with an exercise price of $22.72 per share. In February 2016, the compensation committee approved a grant to Dr. Haqq of 55,900 RSUs.stock. 30
Heather TurnerKristin Yarema, Ph.D.
We entered into an amended and restated executive employment agreement with Heather Turner,Dr. Yarema in January 2020 in connection with her joining the Company as our Senior Vice President, GeneralChief Commercial Officer in February 2020 (the “Yarema Employment Agreement”). The employment agreement provides for an initial annual base salary of $333,000$420,000 and a target annual bonus of up to 40% of her then current base salary. In addition, Dr. Yarema was entitled to a signing and retention bonus of $175,000, paid upon the commencement of her employment, subject to clawback by the Company. The clawback right expires according to the following schedule: (a) 50% on the first anniversary of Dr. Yarema’s start date; and (b) 50% on the second anniversary of Dr.
Yarema’s start date. Furthermore, Dr. Yarema was entitled to a second retention bonus of $75,000, which was paid in 2021, subject to clawback by the Company. The clawback rights to the second retention bonus expire according to the following schedule: (a) 50% on the second anniversary of Dr. Yarema’s start date; and (b) 50% on the third anniversary of Dr. Yarema’s start date. Under Ms. Turner’s employment agreementthe Yarema Employment Agreement and the agreements governing her equity awards, she is entitled to certain benefits in the event of a change in control, termination of employment without cause or resignation for good reason. In the event Ms. Turner’sDr. Yarema’s employment is terminated by us without cause or she resigns for good reason, in either case, unrelated to a change in control (other than as a result of her death or disability), she will be entitled to receive the following benefits: | ·
| Severance pay in the form of the continuation of her final base salary for nine months following termination; and
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Severance pay in the form of the continuation of her final annual base salary for 12 months following termination; and | ·
| Either (a) subject to Ms. Turner’s timely election for continued coverage under COBRA, payment by us of her COBRA premiums for up to nine months following her termination of employment or (b) if Ms. Turner is not entitled to COBRA continuation coverage or if we determine that we cannot pay her COBRA premiums without potentially incurring financial costs or penalties under applicable law, payment by us to Ms. Turner of a fully taxable cash payment equal to the applicable COBRA premiums on the first of each month for up to nine months following her termination of employment.
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Either (a) subject to Dr. Yarema’s timely election for continued coverage under COBRA, payment by us of her COBRA premiums for up to 12 months following her termination of employment or (b) if Dr Yarema is not entitled to COBRA continuation coverage or if we determine that we cannot pay her COBRA premiums without potentially incurring financial costs or penalties under applicable law, payment by us to Dr. Yarema of a fully taxable cash payment equal to the applicable COBRA premiums on the first of each month for up to 12 months following her termination of employment. In addition, in the event Ms. Turner’sDr. Yarema’s employment is terminated by us without cause (other than as a result of her death or disability) or as a result of a resignation for good reason, in either case, during the period commencing three months before and ending twelve months after a change in control period, she will be entitled to receive the following payments and benefits: | ·
| Severance pay in the form of a lump sum payment equal to her final base salary for the year in which the termination date occurs;
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Severance pay in the form of a lump sum payment equal to her final annual base salary for 12 months following termination; | ·
| Either (a) subject to Ms. Turner’s timely election for continued coverage under COBRA, payment by us of her COBRA premiums for up to 12 months following her termination of employment or (b) if Ms. Turner is not entitled to COBRA continuation coverage or if we determine that we cannot pay her COBRA premiums without potentially incurring financial costs or penalties under applicable law, payment by us to Ms. Turner of a fully taxable cash payment equal to the applicable COBRA premiums on the first of each month for up to 12 months following her termination of employment; and
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Either (a) subject to Dr. Yarema’s timely election for continued coverage under COBRA, payment by us of her COBRA premiums for up to 12 months following her termination of employment or (b) if Dr. Yarema is not entitled to COBRA continuation coverage or if we determine that we cannot pay her COBRA premiums without potentially incurring financial costs or penalties under applicable law, payment by us to Dr. Yarema of a fully taxable cash payment equal to the applicable COBRA premiums on the first of each month for up to 12 months following her termination of employment; | ·
| Lump sum amount equal to her target bonus for that year; and
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Lump sum amount equal to 100% of her target annual bonus for the year in which the termination date occurs; and | ·
| Full acceleration and immediate exercisability, if applicable, of all outstanding equity awards subject to time-based vesting conditions.
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Full acceleration and immediate exercisability, if applicable, of all outstanding equity awards subject to time-based vesting conditions. The receipt of any termination-based payments or benefits by Ms. TurnerDr. Yarema is subject to her execution and the effectiveness of a release of claims against Atara.the Company. Pursuant the Yarema Employment Agreement, if any payments or benefits provided to Dr. Yarema in connection with a change in control are subject to excise taxes as a result of the application of Sections 280G and 4999 of the Internal Revenue Code, such payments and benefits will be reduced so that no excise tax is payable, but only if this reduction results in a more favorable after-tax position for him. In August 2015,February 2021, the compensation committeeCompensation Committee approved a grant effective as of March 1, 2021 to Ms. TurnerDr. Yarema of an option35,021 RSUs, and options to purchase 130,00052,862 shares of stock.
Potential Payments Upon Termination or Change of Control The amount of compensation and benefits payable to each named executive officer in various termination and change in control situations has been estimated in the tables below. The value of the option and RSU vesting accelerations was calculated for each of the tables below on the assumption that the change in control and executive’s employment termination occurred on December 31, 2020. The closing price of our common stock with an exerciseon December 31, 2020 was $19.63, which was used as the value of our common stock in the change in control calculations. The value of the option vesting acceleration was calculated by multiplying the number of unvested option shares subject to vesting acceleration as of December 31, 2020 by the difference between the closing price of $56.98 per share. In December 2015, the compensation committee approved a grant to Ms. Turner of an option to purchase 65,000 shares ofour common stock with anas of December 31, 2020 and the exercise price. No value is attributed to unvested options subject to acceleration which have exercise prices above the closing market price of $22.72 per share. In February 2016,our common stock on December 31, 2020. The value of RSUs was calculated by multiplying the compensation committee approved a grantnumber of unvested RSUs subject to Ms. Turnervesting acceleration as of 48,857 RSUs.December 31, 2020 by the closing price of our common stock on December 31, 2020. 31
Name | Termination by Company without Cause or resignation for Good Reason not in Change in Control period ($) (1) | Termination by Company without Cause or resignation for Good Reason during a Change in Control period ($) | Termination by Company on Death or Disability ($) | Termination by Company for Cause or resignation without Good Reason ($) | Pascal Touchon, D.V.M. | | | | | Base salary continuation | 650,000 | 1,300,000 | --- | --- | Bonus continuation | --- | 845,000 | --- | --- | Lump sum bonus payment | 422,500 | --- | 422,500 | --- | COBRA premiums | 9,058 | 18,116 | --- | --- | Accelerated vesting of equity awards | 2,107,996 | 5,519,443 | --- | --- | | | | | | Jakob Dupont, M.D. | | | | | Base salary continuation | 500,000 | 500,000 | --- | --- | Lump sum bonus payment | --- | 225,000 | --- | --- | COBRA premiums | 28,585 | 28,585 | --- | --- | Accelerated vesting of equity awards | --- | 3,696,763 | --- | --- | | | | | | Utpal Koppikar | | | | | Base salary continuation | 457,500 | 457,500 | --- | --- | Lump sum bonus payment | --- | 183,000 | --- | --- | COBRA premiums | 25,690 | 25,690 | --- | --- | Accelerated vesting of equity awards | --- | 2,305,901 | --- | --- | Joseph Newell | | | | | Base salary continuation | 450,000 | 450,000 | --- | --- | Lump sum bonus payment | --- | 202,500 | --- | --- | COBRA premiums | 28,585 | 28,585 | --- | --- | Accelerated vesting of equity awards | --- | 2,308,708 | --- | --- | | | | | | Kristin Yarema, Ph.D. | | | | | Base salary continuation | 420,000 | 420,000 | --- | --- | Lump sum bonus payment | --- | 168,000 | --- | --- | COBRA premiums | 28,585 | 28,585 | --- | --- | Accelerated vesting of equity awards | --- | 1,637,350 | --- | --- | | | | | |
(1) | The change in control period shall mean the time period commencing three months before the effective date of a change in control and ending 12 months after said effective date. |
Non-Employee Director Compensation The following table sets forth information regarding compensation earned by or paid to our non-employee directors during 2015.2020. Name | | Fees Earned or Paid in Cash | | | Stock Awards(1) | | | Option Awards(2)(3) | | | Total | | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Total ($) | Eric L. Dobmeier (4) | | $ | 38,664 | | | $ | — | | | $ | 493,838 | | | $ | 532,501 | | | Roy Baynes, M.D., Ph.D. | | 52,500 | 84,320 | 166,725 | 303,545 | Eric L. Dobmeier | | 70,000 | 83,320 | 166,725 | 321,045 | Matthew K. Fust | | | 70,000 | | | | — | | | | 177,063 | | | | 247,063 | | 70,000 | 84,320 | 166,725 | 321,045 | Carol Gallagher, Pharm.D. | | | 72,500 | | | | — | | | | 177,063 | | | | 249,563 | | 72,500 | 84,320 | 166,725 | 323,545 | William K. Heiden (5) | | | 3,709 | | | | — | | | | 325,655 | | | | 329,364 | | | Joel M. Marcus | | | 52,500 | | | | — | | | | 354,125 | | | | 406,625 | | | William K. Heiden | | 55,000 | 84,320 | 166,725 | 306,045 | Ronald C. Renaud, Jr. | | 59,403 | --- | 400,722 | 460,125 | Maria Grazia Roncarolo, M.D. | | 28,625 | --- | 400,078 | 428,703 | Beth Seidenberg, M.D. | | | 43,000 | | | | — | | | | 354,125 | | | | 397,125 | | 55,000 | 84,320 | 166,725 | 306,045 | Eckard Weber, M.D. (6) | | | 30,489 | | | | — | | | | 354,125 | | | | 384,614 | | | | | | | | |
(1) | No stock awards were granted to our non-employee directorsThe amounts in this column reflect the aggregate fair value of RSUs awarded during the year, ended December 31, 2015. As of December 31, 2015, Mr. Fust held 14,957 RSUs and Ms. Gallagher held 21,836 RSUs. Our other non-employee directors did not hold stock awardscomputed at year-end.the measurement date in accordance with FASB ASC Topic 718.
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(2) | Amounts reported as the dollar value of stock option awards do not reflect compensation actually received by the named directors. Instead, the amount reported is the grant date fair value calculated under FASB ASC Topic 718. Pursuant to SEC rules, the amounts shown assume that there will be no service-based forfeitures of awards. Assumptions used in the calculation of these amounts are included in the notes to our consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2015.2020. |
(3)
| As of December 31, 2015, Messrs. Dobmeier and Marcus and Dr. Seidenberg each held options to purchase 25,000 shares, Mr. Fust and Ms. Gallagher each held options to purchase 12,500 shares and Mr. Heiden held options to purchase 15,500 shares. Dr. Weber did not hold option awards at year-end.
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(4)
| Mr. Dobmeier joined the Board in March 2015.
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(5)
| Mr. Heiden joined the Board in November 2015.
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(6)
| Dr. Weber resigned from the Board in October 2015.
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In January 2015, our Board adopted aOur non-employee director compensation policy, pursuant to which we compensate our non-employee directors with a combination of cash and equity.equity, is intended to be fair and competitive to account for the time and effort required of a director of the Company. The annual cash compensation contained in this policy, set forth below, is payable in equal quarterly installments, in arrears following the end of each quarter in which the service occurred, pro-rated for any partial months of service. For purposes of cash compensation, this policy was made effective retroactively to October 16, 2014, the dateThe Compensation Committee reviews pay levels for non-employee directors regularly with assistance from Radford, who prepares a comprehensive assessment of our initial public offering.non-employee director compensation program. That assessment includes benchmarking of director compensation against the same peer group used for executive compensation purposes and an update on recent trends in director compensation. Following that review, the Compensation Committee approved changes to the equity compensation in the non-employee director compensation policy for 2021. Our director compensation is set forth below:
| ·
| Annual Board Service Retainer:
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Annual Board Service Retainer: All Directors other than Lead Director: $35,000Director or Chair of the Board: $45,000 Lead Director: $50,000$75,000 Chair of the Board: $85,000 | ·
| Annual Committee Service Retainer (Chair):
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Annual Committee Service Retainer (Chair): Chair of the Audit Committee: $20,000 Chair of the Compensation Committee: $15,000 Chair of the Nominating and Corporate Governance Committee: $8,000$10,000 | ·
| Annual Committee Service Retainer (Non-Chair):
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Annual Committee Service Retainer (Non-Chair): Audit Committee: $10,000 Compensation Committee: $7,500 Nominating and Corporate Governance Committee: $5,000 Research and Development Committee: $5,000 We have reimbursed, and under this policy will continue to reimburse, our non-employee directors for their travel, lodging and other reasonable expenses incurred in attending meetings of our Board and committees of our Board. The non-employee director compensation policy adopted in January 2015 also provides for equity compensation to each non-employee director as follows: | ·
| Initial Grant: At the time he or she joins our Board, each new non-employee director will receive an initial stock option grant with a grant date fair value of $325,000,
Initial Grant: At the time they join our Board, each new non-employee director will receive an initial stock option grant with a grant date fair value of $450,000, rounded to the nearest 500 shares, vesting annually over three years.
Annual Grant: Each non-employee director will receive an annual grant of equity awards in the form of stock options and RSUs at a 1:1 stock-option-to-RSU ratio calculated on the basis of such equity awards together having an aggregate grant date fair value of $300,000, rounded to the nearest 500 shares, vesting annually over three years. |
| ·
| Annual Grant: On January 1 of each year (beginning in 2016), each non-employee director will receive an annual stock option grant with a grant date fair value of $162,500, rounded to the nearest 500 shares, vesting over one year.
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Existing Non-Employee Directors: On the date the policy was adopted, Drs. Weber and Seidenberg and Mr. Marcus, who had not previously received any equity awards in respect of their service on our Board, each received an option to purchase 25,000 shares, both option grants vest in full on the 18 month anniversarydate of the option grant (June 30, 2016), and Dr. Gallagher and Mr. Fust, who had previously received RSUs in respectnext annual meeting of their service on our Board, each received an optionstockholders, subject to purchase 12,500 shares, both option grants vested in full on January 1, 2016. All of the options granted to the existing non-employee directors had an exercise price per share of $25.15, the closing price of our common stock on Nasdaq on January 16, 2015.continued service.
In March 2015, in connection with his nomination to the Board, Mr. Dobmeier received an option to purchase 25,000 shares, vesting over three years. The options granted to Mr. Dobmeier had an exercise price per share of $34.90 per share, the closing price of our common stock on Nasdaq on March 26, 2015. In November 2015, in connection with his nomination to the Board, Mr. Heiden received an option to purchase 15,500 shares, vesting over three years. The options granted to Mr. Heiden had an exercise price per share of $34.98 per share, the closing price of our common stock on Nasdaq on November 23, 2015.
All options granted to our non-employee directors under the policy will vest in full upon the completion of a change in control. Grant date option value is determined using the same method we use to calculate the grant date fair value of stock options in our financial statements, except that no provision shall be made for estimated forfeitures related to service-based vesting.statements. Equity Compensation Plan Information The following table provides certain information with respect to all of our equity compensation plans in effect as of December 31, 2015.2020. | Plan Category | | Number of Securities to be Issued upon Exercise of Outstanding Options and RSUs | | | Weighted-Average Exercise Price of Outstanding Options | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (2) | | Number of Securities to be Issued upon Exercise of Outstanding Options and RSUs | Weighted-Average Exercise Price of Outstanding Options | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans(1) | Equity Compensation Plans Approved by Stockholders (1) | | | 3,605,469 | | | $ | 25.68 | | | | 743,191 | | | Equity Compensation Plans Not Approved by Stockholders | | | — | | | | — | | | | — | | | Equity Compensation Plans Approved by Stockholders(2) | | 10,780,881 | $23.01 | 3,715,028 | Equity Compensation Plans Not Approved by Stockholders(3) | | 900,625 | 21.52 | 1,734,211 | Total | | | 3,605,469 | | | $ | 25.68 | | | | 743,191 | | 11,681,506 | $22.89 | 5,449,239 |
(1) | Includes securities issuable under the 2012 Equity Incentive Plan of Nina Biotherapeutics, Inc., the 2012 Equity Incentive Plan of Pinta Biotherapeutics, Inc. and the 2012 Equity Incentive Plan of Santa Maria Biotherapeutics, Inc., which were assumed by us in connection with a certain recapitalization, our 2014 Equity Incentive Plan, and our 2014 Employee Stock Purchase Plan.
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(2)
| Excludes outstanding securities included in the column labeled ‘Number of Securities to be Issued upon Exercise of Outstanding Options and RSUs’RSUs. |
(2) | Includes securities issuable under our 2014 EIP and our 2014 Employee Stock Purchase Plan (the “2014 ESPP”). |
(3) | Includes securities issuable pursuant to Nasdaq Listing Rule 5635(c)(4) and pursuant to our Inducement Plan. The Inducement Plan provides for the grant of equity awards to individuals who were not previously employees or directors of the Company, other than following a bona fide period of non-employment. All equity awards under the Inducement Plan are intended to meet the standards of Nasdaq Listing Rule 5635(c)(4). The terms and conditions of the Inducement Plan and the equity awards to be granted thereunder are substantially similar to the 2014 EIP. |
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TRANSACTIONS WITH RELATED PERSONS AND INDEMNIFICATION Policies and Procedures for Transactions with Related Persons We have adopted a policy that our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of any class of our common stock, any members of the immediate family of any of the foregoing persons and any firm, corporation or other entity in which any of the foregoing persons is an executive partner or principal or which such person has a 5% or greater beneficial ownership interest (each a “Related Person”), are not permitted to enter into a related personRelated Person transaction with us without the prior consent of the Audit Committee. Any request for us to enter into a transaction with a Related Person, in which the amount involved exceeds $120,000 and such person would have a direct or indirect interest, must first be presented to the Audit Committee for review, consideration and approval. In approving or rejecting any such proposal, the Audit Committee is to consider the material facts of the transaction, including, but not limited to, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’sRelated Person’s interest in the transaction. Certain Related-Person Transactions This section describes transactions sinceSince January 1, 20152020, we have not entered into any transactions, nor are any such transactions currently proposed, to which we were a party and in which the amount involved exceeded $120,000, and in which Related Person had or will behave a party,direct or indirect material interest, other than compensation arrangements for our directorswhich are described under “Executive Compensation” and executive officers, in which:
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| the amounts involved exceeded or will exceed $120,000; and
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| A Related Person had or will have a direct or indirect material interest.
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We believe the terms of the transactions described below were comparable to terms we could have obtained in arm’s length dealings with unrelated third parties.“Non-Employee Director Compensation.”
We are party to an investors’ rights agreement with certain holders of our common stock issued upon conversion of our preferred stock, including certain of our named executive officers and directors and entities with which certain of our directors are affiliated. This agreement provides that such holders of common stock have the right to demand that we file a registration statement or request that their shares of common stock be covered by a registration statement that we are otherwise filing.Indemnification Agreements
We have entered into indemnity agreements with our directors and officers that provide, among other things, that we will indemnify such officer or director, under the circumstances and to the extent provided for therein, for all reasonable expenses and liabilities incurred with any action or proceeding brought against them by reason of the fact that they are serving in such capacity, and otherwise to the fullest extent permitted under Delaware law and our Bylaws. See “Executive Compensation”
Merck Relationship In April 2017, we entered into an agreement with Merck Sharp & Dohme (known as MSD outside of the U.S. and Canada) to provide drug supply for additional information regardinga study to be sponsored and conducted by us to evaluate our compensationtab-cel® product candidate in combination with Merck’s anti-PD-1 (programmed death receptor-1) therapy, KEYTRUDA® (pembrolizumab), in patients with platinum-resistant or recurrent Epstein-Barr virus-associated nasopharyngeal carcinoma. The Phase 1/2 study achieved its safety endpoints and stable disease in some patients and some patients are still receiving treatment in the study. Dr. Baynes, who joined our Board in September 2018, is Senior Vice President Global Clinical Development and Chief Medical Officer at Merck Research Laboratories, which is an affiliate of and employment agreements with our named executive officers. See “Non-Employee Director Compensation” for additional information regarding our compensation of our non-employee directors.Merck Sharp & Dohme.
HOUSEHOLDING OF PROXY MATERIALS The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for Notices of Internet Availability of Proxy Materials or other annual meetingAnnual Meeting materials with respect to two or more stockholders sharing the same address by delivering a single Notice of Internet Availability of Proxy Materials or other annual meetingAnnual Meeting materials addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies. This year, aA number of brokers with account holders who are Atara stockholders will be “householding” our proxy materials. A single Notice of Internet Availability of Proxy Materials will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate Notice of Internet Availability of Proxy Materials, please notify your broker or Atara. Direct your written request to Atara Biotherapeutics, Inc., Investor Relations, 611 Gateway Blvd., Suite 900, South San Francisco, CA 94080 or contact Investor Relations at 650-278-8930. In addition, Atara will promptly deliver, upon written or oral request to the address or telephone number above, a separate copy of the Notice of Internet Availability of Proxy Materials or the full set of proxy materials, as applicable, to a stockholder at a shared address to which a single copy of the documents was delivered. Stockholders who currently receive multiple copies of the Notices of Internet Availability of Proxy Materials at their addresses and would like to request “householding” of their communications should contact their brokers.
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OTHER MATTERSMATTERS The Board of Directors knows of no other matters that will be presented for consideration at the annual meeting.Annual Meeting. If any other matters are properly brought before the meeting,Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment. By Order of the Board of Directors | By Order of the Board of Directors
/s/ Pascal Touchon Pascal Touchon, D.V.M. President and Chief Executive Officer | | ![](https://capedge.com/proxy/DEF 14A/0001564590-16-017048/gyqkw3i2loeg000002.jpg)
| Heather D. Turner
| Secretary
|
April 29, 201622, 2021 A copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 20152020 is available without charge upon written request to: Corporate Secretary, Atara Biotherapeutics, Inc., 611 Gateway Blvd., Suite 900, South San Francisco, CA 94080. 35
APPENDIX A
ATARA BIOTHERAPEUTICS, INC.
2014 EQUITY INCENTIVE PLAN
First Amended and Restated: May 28, 2014
Second Amended and Restated: __________, 2016
Approved by the Stockholders: __________, 2016
Effective Date: __________, 2016
(a)Successor to and Continuation of Prior Plans.
(i)The Plan is the successor to and continuation of the Nina Biotherapeutics, Inc. 2012 Equity Incentive Plan, the Pinta Biotherapeutics, Inc. 2012 Equity Incentive Plan, and the Santa Maria Biotherapeutics 2012 Equity Incentive Plan, as amended (collectively, the “Prior Plans”). From and after 12:01 a.m. Pacific time on the Original Effective Date, no additional stock awards will be granted under the Prior Plans. All stock awards granted under the Prior Plans remain subject to the terms of the Prior Plans. All Awards granted on or after 12:01 a.m. Pacific Time on the Original Effective Date are subject to the terms of this Plan.
(ii)Any shares that would otherwise remain available for future grants under any of the Prior Plans as of 12:01 a.m. Pacific Time on the Original Effective Date ceased to be available under the Prior Plans at such time. Instead, that number of shares of Common Stock equal to the number of shares of the Company then available for future grants under the Prior Plans (the “Prior Plans’ Available Reserve”) was added to the Share Reserve (as further described in Section 3(a) below) and became immediately available for grants and issuance pursuant to Stock Awards under this Plan, up to the maximum number set forth in Section 3(a) below.
(iii)From and after 12:01 a.m. Pacific time on the Original Effective Date, a number of shares of Common Stock equal to the total number of shares of common stock subject to outstanding stock awards granted under the Prior Plans that (A) expire or terminate for any reason prior to exercise or settlement, (B) are forfeited because of the failure to meet a contingency or condition required to vest such shares or repurchased at the original issuance price, or (C) are otherwise reacquired or are withheld (or not issued) to satisfy a tax withholding obligation in connection with an award (the “Returning Shares”) will immediately be added to the Share Reserve (as further described in Section 3(a) below) as and when such shares become Returning Shares (up to the maximum number set forth in Section 3(a)), and become available for issuance pursuant to Stock Awards granted hereunder.
(b)Eligible Award Recipients. Employees, Directors and Consultants are eligible to receive Awards.
(c)Available Awards. The Plan provides for the grant of the following Awards: (i) Incentive Stock Options; (ii) Nonstatutory Stock Options; (iii) Stock Appreciation Rights; (iv) Restricted Stock Awards; (v) Restricted Stock Unit Awards; (vi) Performance Stock Awards; (vii) Performance Cash Awards; and (viii) Other Stock Awards.
(d)Purpose. This Plan, through the granting of Awards, is intended to help the Company secure and retain the services of eligible award recipients, provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate and provide a means by which the eligible recipients may benefit from increases in value of the Common Stock.
(a)Administration by Board. The Board will administer the Plan. The Board may delegate administration of the Plan to a Committee or Committees, as provided in Section 2(c).
(b)Powers of Board. The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:
(i)To determine: (A) who will be granted Awards; (B) when and how each Award will be granted; (C) what type of Award will be granted; (D) the provisions of each Award (which need not be identical), including when a person will be permitted to exercise or otherwise receive cash or Common Stock under the Award; (E) the number of shares of Common Stock subject to, or the cash value of, an Award; and (F) the Fair Market Value applicable to a Stock Award.
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(ii)To construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for administration of the Plan and Awards. The Board, in the exercise of these powers, may correct any defect, omission or inconsistency in the Plan or in any Award Agreement or in the written terms of a Performance Cash Award, in a manner and to the extent it will deem necessary or expedient to make the Plan or Award fully effective.
(iii)To settle all controversies regarding the Plan and Awards granted under it.
(iv)To accelerate, in whole or in part, the time at which an Award may be exercised or vest (or at which cash or shares of Common Stock may be issued).
(v)To suspend or terminate the Plan at any time. Except as otherwise provided in the Plan or an Award Agreement, suspension or termination of the Plan will not materially impair a Participant’s rights under his or her then-outstanding Award without his or her written consent except as provided in subsection (viii) below.
(vi)To amend the Plan in any respect the Board deems necessary or advisable, including, without limitation, adopting amendments relating to Incentive Stock Options and nonqualified deferred compensation under Section 409A of the Code and/or making the Plan or Awards granted under the Plan exempt from or compliant with the requirements for Incentive Stock Options or exempt from or compliant with the requirements for nonqualified deferred compensation under Section 409A of the Code, subject to the limitations, if any, of applicable law. If required by applicable law or listing requirements, and except as provided in Section 9(a) relating to Capitalization Adjustments, the Company will seek stockholder approval of any amendment of the Plan that (A) materially increases the number of shares of Common Stock available for issuance under the Plan, (B) materially expands the class of individuals eligible to receive Awards under the Plan, (C) materially increases the benefits accruing to Participants under the Plan, (D) materially reduces the price at which shares of Common Stock may be issued or purchased under the Plan, (E) materially extends the term of the Plan, or (F) materially expands the types of Awards available for issuance under the Plan. Except as otherwise provided in the Plan (including subsection (viii) below) or an Award Agreement, no amendment of the Plan will materially impair a Participant’s rights under an outstanding Award without the Participant’s written consent.
(vii)To submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of (A) Section 162(m) of the Code regarding the exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to Covered Employees, (B) Section 422 of the Code regarding “incentive stock options” or (C) Rule 16b-3 of Exchange Act or any successor rule.
(viii)To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more outstanding Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion. A Participant’s rights under any Award will not be impaired by any such amendment unless the Company requests the consent of the affected Participant, and the Participant consents in writing. However, a Participant’s rights will not be deemed to have been impaired by any such amendment if the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participant’s rights. In addition, subject to the limitations of applicable law, if any, the Board may amend the terms of any one or more Awards without the affected Participant’s consent (A) to maintain the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code, (B) to change the terms of an Incentive Stock Option, if such change results in impairment of the Award solely because it impairs the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code, (C) to clarify the manner of exemption from, or to bring the Award into compliance with, Section 409A of the Code, or (D) to comply with other applicable laws or listing requirements.
(ix)Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan and/or Award Agreements.
(x)To adopt such procedures and sub-plans as are necessary or appropriate (A) to permit or facilitate participation in the Plan by Employees, Directors or Consultants who are foreign nationals or employed outside the United States or (B) allow Awards to qualify for special tax treatment in a foreign jurisdiction; provided that Board approval will not be necessary for immaterial modifications to the Plan or any Award Agreement that are required for compliance with the laws of the relevant foreign jurisdiction.
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(xi)To effect, with the consent of any adversely affected Participant, (A) the reduction of the exercise, purchase or strike price of any outstanding Stock Award; (B) the cancellation of any outstanding Stock Award and the grant in substitution therefore of a new (1) Option or SAR, (2) Restricted Stock Award, (3) Restricted Stock Unit Award, (4) Other Stock Award, (5) cash award and/or (6) award of other valuable consideration determined by the Board, in its sole discretion, with any such substituted award (x) covering the same or a different number of shares of Common Stock as the cancelled Stock Award and (y) granted under the Plan or another equity or compensatory plan of the Company; or (C) any other action that is treated as a repricing under generally accepted accounting principles.
(c)Delegation to Committee.
(i)General. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee). Any delegation of administrative powers will be reflected in resolutions, not inconsistent with the provisions of the Plan, adopted from time to time by the Board or Committee (as applicable). The Committee may, at any time, abolish the subcommittee and/or revest in the Committee any powers delegated to the subcommittee. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated.
(ii)Section 162(m) and Rule 16b-3 Compliance. The Committee may consist solely of two or more Outside Directors, in accordance with Section 162(m) of the Code, or solely of two or more Non-Employee Directors, in accordance with Rule 16b-3 of the Exchange Act.
(d)Delegation to an Officer. The Board may delegate to one (1) or more Officers the authority to do one or both of the following: (i) designate Employees who are not Officers to be recipients of Options and SARs (and, to the extent permitted by applicable law, other Stock Awards) and, to the extent permitted by applicable law, the terms of such Awards; and (ii) determine the number of shares of Common Stock to be subject to such Stock Awards granted to such Employees; provided, however, that the Board resolutions regarding such delegation will specify the total number of shares of Common Stock that may be subject to the Stock Awards granted by such Officer and that such Officer may not grant a Stock Award to himself or herself. Any such Stock Awards will be granted on the form of Stock Award Agreement most recently approved for use by the Committee or the Board, unless otherwise provided for in the resolutions approving the delegation authority. The Board may not delegate authority to an Officer who is acting solely in the capacity of an Officer (and not also as a Director) to determine the Fair Market Value (as defined below).
(e)Effect of Board’s Decision. All determinations, interpretations and constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.
3.
| Shares Subject to the Plan.
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(a)Share Reserve.
(i)Subject to Section 9(a) relating to Capitalization Adjustments and the “evergreen” provision in Section 3(a)(ii), the aggregate number of shares of Common Stock that may be issued pursuant to Stock Awards from and after the Effective Date will not exceed 10,858,902 shares (the “Share Reserve”). The Share Reserve includes (A) 4,000,000 new shares, (B) the 5,971,408 shares that represented the Prior Plans’ Available Reserve and the shares reserved for issuance immediately prior to the Effective Date, and (C) the Returning Shares, if any, in an amount not to exceed 887,494 shares (if and when the Returning Shares ever become available for grant under this Plan).
(ii)The Share Reserve will automatically increase on January 1st of each year, for a period of not more than ten years, commencing on January 1st of the year following the year in which the IPO Date occurs and ending on (and including) January 1, 2024, in an amount equal to 5% of the total number of shares of Company capital stock outstanding on December 31st of the preceding calendar year. Notwithstanding the foregoing, the Board may act prior to January 1st of a given year to provide that there will be no January 1st increase in the Share Reserve for such year or that the increase in the Share Reserve for such year will be a lesser number of shares of Common Stock than would otherwise occur pursuant to the preceding sentence.
(iii)For clarity, the Share Reserve is a limitation on the number of shares of Common Stock that may be issued under to the Plan. As a single share may be subject to grant more than once (e.g., if a share subject to a Stock Award is forfeited, it may be made subject to grant again as provided in Section 3(b) below), the Share Reserve is not a limit on the number of Stock Awards that can be granted.
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(iv)Shares may be issued under the terms of this Plan in connection with a merger or acquisition as permitted by NASDAQ Listing Rule 5635(c), NYSE Listed Company Manual Section 303A.08, AMEX Company Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares available for issuance under the Plan.
(b)Reversion of Shares to the Share Reserve. If a Stock Award or any portion of a Stock Award (i) expires or otherwise terminates without all of the shares covered by the Stock Award having been issued or (ii) is settled in cash (i.e., the Participant receives cash rather than stock), such expiration, termination or settlement will not reduce (or otherwise offset) the number of shares of Common Stock that are available for issuance under the Plan. If any shares of Common Stock issued under a Stock Award are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required to vest such shares in the Participant, then the shares that are forfeited or repurchased will revert to and again become available for issuance under the Plan. Any shares reacquired by the Company in satisfaction of tax withholding obligations on a Stock Award or as consideration for the exercise or purchase price of a Stock Award will again become available for issuance under the Plan.
(c)Incentive Stock Option Limit. Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued on the exercise of Incentive Stock Options will be 11,538,461 shares of Common Stock.
(d)Section 162(m) Limitations. Subject to the provisions of Section 9(a) relating to Capitalization Adjustments, at such time as the Company may be subject to the applicable provisions of Section 162(m) of the Code, the following limitations shall apply.
(i)A maximum of 1,538,461 shares of Common Stock subject to Options, SARs and Other Stock Awards whose value is determined by reference to an increase over an exercise or strike price of at least 100% of the Fair Market Value on the date the Stock Award is granted may be granted to any one Participant during any one calendar year. Notwithstanding the foregoing, if any additional Options, SARs or Other Stock Awards whose value is determined by reference to an increase over an exercise or strike price of at least 100% of the Fair Market Value on the date the Stock Award are granted to any Participant during any calendar year, compensation attributable to the exercise of such additional Stock Awards will not satisfy the requirements to be considered “qualified performance-based compensation” under Section 162(m) of the Code unless such additional Stock Award is approved by the Company’s stockholders.
(ii)A maximum of 1,538,461 shares of Common Stock subject to Performance Stock Awards may be granted to any one Participant during any one calendar year (whether the grant, vesting or exercise is contingent upon the attainment during the Performance Period of the Performance Goals).
(iii)A maximum of $2,000,000 may be granted as a Performance Cash Award to any one Participant during any one calendar year.
(e)Source of Shares. The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise.
(f)Director Limitations. The maximum total value of Awards granted during a single fiscal year to any non-employee director under the Plan and under any other Company equity plan, taken together with any cash fees paid to such non-employee director during the fiscal year, shall not exceed $1,500,000 (calculating the value of any such awards based on the grant date fair value of such awards for financial reporting purposes and excluding, for this purpose, the value of any dividend equivalent payments paid pursuant to any award granted in a previous fiscal year).
(a)Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code). Stock Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants; provided, however, that Stock Awards may not be granted to Employees, Directors and Consultants who are providing Continuous Service only to any “parent” of the Company, as such term is defined in Rule 405 of the Securities Act, unless (i) the stock underlying such Stock Awards is treated as “service recipient stock” under Section 409A of the Code (for example, because the Stock Awards are granted pursuant to a corporate transaction such as a spin off transaction), or (ii) the Company, in consultation with its legal counsel, has determined that such Stock Awards are otherwise exempt from or comply with the distribution requirements of Section 409A of the Code.
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(b)Ten Percent Stockholders. A Ten Percent Stockholder will not be granted an Incentive Stock Option unless the exercise price of such Option is at least 110% of the Fair Market Value on the date of grant and the Option is not exercisable after the expiration of five (5) years from the date of grant.
5.
| Provisions Relating to Options and Stock Appreciation Rights.
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Each Option or SAR will be in such form and will contain such terms and conditions as the Board deems appropriate. All Options will be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option. If an Option is not specifically designated as an Incentive Stock Option, or if an Option is designated as an Incentive Stock Option but some portion or all of the Option fails to qualify as an Incentive Stock Option under the applicable rules, then the Option (or portion thereof) will be a Nonstatutory Stock Option. The provisions of separate Options or SARs need not be identical; provided, however, that each Award Agreement will conform to (through incorporation of provisions hereof by reference in the applicable Award Agreement or otherwise) the substance of each of the following provisions:
(a)Term. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, no Option or SAR will be exercisable after the expiration of 10 years from the date of its grant or such shorter period specified in the Award Agreement.
(b)Exercise Price. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, the exercise or strike price of each Option or SAR will be not less than 100% of the Fair Market Value of the Common Stock subject to the Option or SAR on the date the Award is granted. Notwithstanding the foregoing, an Option or SAR may be granted with an exercise or strike price lower than 100% of the Fair Market Value of the Common Stock subject to the Award if such Award is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent with the provisions of Section 409A of the Code and, if applicable, Section 424(a) of the Code. Each SAR will be denominated in shares of Common Stock equivalents.
(c)Purchase Price for Options. The purchase price of Common Stock acquired pursuant to the exercise of an Option may be paid, to the extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below. The Board will have the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to use a particular method of payment. The permitted methods of payment are as follows:
(i)by cash, check, bank draft or money order payable to the Company;
(ii)pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds;
(iii)by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock;
(iv)if an Option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however, that the Company will accept cash or other payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued. Shares of Common Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent that (A) shares issuable upon exercise are used to pay the exercise price pursuant to the “net exercise,” (B) shares are delivered to the Participant as a result of such exercise, and (C) shares are withheld to satisfy tax withholding obligations; or
(v)in any other form of legal consideration that may be acceptable to the Board and specified in the applicable Award Agreement.
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(d)Exercise and Payment of a SAR. To exercise any outstanding SAR, the Participant must provide written notice of exercise to the Company in compliance with the provisions of the Stock Appreciation Right Agreement evidencing such SAR. The appreciation distribution payable on the exercise of a SAR will be not greater than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the SAR) of a number of shares of Common Stock equal to the number of Common Stock equivalents in which the Participant is vested under such SAR (with respect to which the Participant is exercising the SAR on such date), over (B) the aggregate strike price of the number of Common Stock equivalents with respect to which the Participant is exercising the SAR on such date. The appreciation distribution may be paid in Common Stock, in cash, in any combination of the two or in any other form of consideration, as determined by the Board and contained in the Award Agreement evidencing such SAR.
(e)Transferability of Options and SARs. The Board may, in its sole discretion, impose such limitations on the transferability of Options and SARs as the Board will determine. In the absence of such a determination by the Board to the contrary, the following restrictions on the transferability of Options and SARs will apply:
(i)Restrictions on Transfer. An Option or SAR will not be transferable except by will or by the laws of descent and distribution (or pursuant to subsections (ii) and (iii) below), and will be exercisable during the lifetime of the Participant only by the Participant. The Board may permit transfer of the Option or SAR in a manner that is not prohibited by applicable tax and securities laws. Except as explicitly provided herein, neither an Option nor a SAR may be transferred for consideration.
(ii)Domestic Relations Orders. Subject to the approval of the Board or a duly authorized Officer, an Option or SAR may be transferred pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by U.S. Treasury Regulation 1.421-1(b)(2). If an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.
(iii)Beneficiary Designation. Subject to the approval of the Board or a duly authorized Officer, a Participant may, by delivering written notice to the Company, in a form approved by the Company (or the designated broker), designate a third party who, on the death of the Participant, will thereafter be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation, the executor or administrator of the Participant’s estate will be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. However, the Company may prohibit designation of a beneficiary at any time, including due to any conclusion by the Company that such designation would be inconsistent with the provisions of applicable laws.
(f)Vesting Generally. The total number of shares of Common Stock subject to an Option or SAR may vest and therefore become exercisable in periodic installments that may or may not be equal. The Option or SAR may be subject to such other terms and conditions on the time or times when it may or may not be exercised (which may be based on the satisfaction of Performance Goals or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options or SARs may vary. The provisions of this Section 5(f) are subject to any Option or SAR provisions governing the minimum number of shares of Common Stock as to which an Option or SAR may be exercised.
(g)Termination of Continuous Service. Except as otherwise provided in the applicable Award Agreement, or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates (other than for Cause and other than upon the Participant’s death or Disability), the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Award as of the date of termination of Continuous Service) within the period of time ending on the earlier of (i) the date three (3) months following the termination of the Participant’s Continuous Service and (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the applicable time frame, the Option or SAR will terminate.
(h)Extension of Termination Date. Except as otherwise provided in the applicable Award Agreement, if the exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause and other than upon the Participant’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option or SAR will terminate on the earlier of (i) the expiration of a total period of three (3) months (that need not be consecutive) after the termination of the Participant’s Continuous Service during which the exercise of the Option or SAR would not be in violation of such registration requirements, and (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement. In addition, unless otherwise provided in a Participant’s applicable Award Agreement, if the sale of any Common Stock received upon exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause) would violate the Company’s insider trading policy, then the Option or SAR will terminate on the earlier of (i) the expiration of a period of months (that need not be consecutive) equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service during which the sale of the Common Stock received upon exercise of the Option or SAR would not be in violation of the Company’s insider trading policy, or (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement.
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(i)Disability of Participant. Except as otherwise provided in the applicable Award Agreement, or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Option or SAR as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date 12 months following such termination of Continuous Service, and (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the applicable time frame, the Option or SAR (as applicable) will terminate.
(j)Death of Participant. Except as otherwise provided in the applicable Award Agreement, or other agreement between the Participant and the Company, if (i) a Participant’s Continuous Service terminates as a result of the Participant’s death, or (ii) the Participant dies within the period (if any) specified in the applicable Award Agreement for exercisability after the termination of the Participant’s Continuous Service (for a reason other than death), then the Option or SAR may be exercised (to the extent the Participant was entitled to exercise such Option or SAR as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option or SAR by bequest or inheritance or by a person designated to exercise the Option or SAR upon the Participant’s death, but only within the period ending on the earlier of (i) the date 18 months following the date of death, and (ii) the expiration of the term of such Option or SAR as set forth in the applicable Award Agreement. If, after the Participant’s death, the Option or SAR is not exercised within the applicable time frame, the Option or SAR will terminate.
(k)Termination for Cause. Except as explicitly provided otherwise in a Participant’s Award Agreement or other individual written agreement between the Company or any Affiliate and the Participant, if a Participant’s Continuous Service is terminated for Cause, the Option or SAR will terminate upon the date on which the event giving rise to the termination for Cause first occurred, and the Participant will be prohibited from exercising his or her Option or SAR from and after the date on which the event giving rise to the termination for Cause first occurred (or, if required by law, the date of termination of Continuous Service). If a Participant’s Continuous Service is suspended pending an investigation of the existence of Cause, all of the Participant’s rights under the Option or SAR will also be suspended during the investigation period.
(l)Non-Exempt Employees. If an Option or SAR is granted to an Employee who is a non-exempt employee for purposes of the U.S. Fair Labor Standards Act of 1938, as amended, the Option or SAR will not be first exercisable for any shares of Common Stock until at least 6 months following the date of grant of the Option or SAR (although the Award may vest prior to such date). Consistent with the provisions of the U.S. Worker Economic Opportunity Act, (i) if such non-exempt Employee dies or suffers a Disability, (ii) upon a Corporate Transaction in which such Option or SAR is not assumed, continued, or substituted, (iii) upon a Change in Control, or (iv) upon the non-exempt Employee’s retirement (as such term may be defined in the non-exempt Employee’s applicable Award Agreement, in another agreement between the non-exempt Employee and the Company, or, if no such definition, in accordance with the Company’s then current employment policies and guidelines), the vested portion of any Options and SARs may be exercised earlier than 6 months following the date of grant. The foregoing provision is intended to operate so that any income derived by a non-exempt Employee in connection with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay. To the extent permitted and/or required for compliance with the U.S. Worker Economic Opportunity Act to ensure that any income derived by a non-exempt Employee in connection with the exercise, vesting or issuance of any shares under any other Stock Award will be exempt from such employee’s regular rate of pay, the provisions of this paragraph will apply to all Stock Awards and are hereby incorporated by reference into such Stock Award Agreements.
6.
| Provisions of Stock Awards Other than Options and SARs.
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(a)Restricted Stock Awards. Each Restricted Stock Award Agreement will be in such form and will contain such terms and conditions as the Board deems appropriate. To the extent consistent with the Company’s bylaws, at the Board’s election, shares of Common Stock may be (x) held in book entry form subject to the Company’s instructions until any restrictions relating to the Restricted Stock Award lapse, or (y) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Board. The terms and conditions of Restricted Stock Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Award Agreements need not be identical. Each Restricted Stock Award Agreement will conform to (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:
(i)Consideration. A Restricted Stock Award may be awarded in consideration for (A) cash, check, bank draft or money order payable to the Company, (B) past services to the Company or an Affiliate, or (C) any other form of legal consideration (including future services) that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.
(ii)Vesting. Shares of Common Stock awarded under the Restricted Stock Award Agreement may be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the Board.
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(iii)Termination of Participant’s Continuous Service. If a Participant’s Continuous Service terminates, the Company may receive through a forfeiture condition or a repurchase right, any or all of the shares of Common Stock held by the Participant that have not vested as of the date of termination of Continuous Service under the terms of the Restricted Stock Award Agreement.
(iv)Transferability. Rights to acquire shares of Common Stock under the Restricted Stock Award Agreement will be transferable by the Participant only upon such terms and conditions as are set forth in the Restricted Stock Award Agreement, as the Board will determine in its sole discretion, so long as Common Stock awarded under the Restricted Stock Award Agreement remains subject to the terms of the Restricted Stock Award Agreement.
(v)Dividends. A Restricted Stock Award Agreement may provide that any dividends paid on Restricted Stock will be subject to the same vesting and forfeiture restrictions as apply to the shares subject to the Restricted Stock Award to which they relate.
(b)Restricted Stock Unit Awards. Each Restricted Stock Unit Award Agreement will be in such form and will contain such terms and conditions as the Board deems appropriate. The terms and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical. Each Restricted Stock Unit Award Agreement will conform to (through incorporation of the provisions hereof by reference in the Agreement or otherwise) the substance of each of the following provisions:
(i)Consideration. At the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.
(ii)Vesting. At the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.
(iii)Payment. A Restricted Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit Award Agreement.
(iv)Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award.
(v)Dividend Equivalents. Dividend equivalents may be credited in respect of shares of Common Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such dividend equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock Unit Award in such manner as determined by the Board. Any additional shares covered by the Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all of the same terms and conditions of the underlying Restricted Stock Unit Award Agreement to which they relate.
(vi)Termination of Participant’s Continuous Service. Except as otherwise provided in the applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award that has not vested will be forfeited upon the Participant’s termination of Continuous Service.
(c)Performance Awards.
(i)Performance Stock Awards. A Performance Stock Award is a Stock Award (covering a number of shares not in excess of that set forth in Section 3(d) above) that is payable (including that may be granted, vest or exercised) contingent upon the attainment during a Performance Period of certain Performance Goals. A Performance Stock Award may, but need not, require the completion of a specified period of Continuous Service. The length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained will be conclusively determined by the Committee (or, if not required for compliance with Section 162(m) of the Code, the Board), in its sole discretion. In addition, to the extent permitted by applicable law and the applicable Award Agreement, the Board may determine that cash may be used in payment of Performance Stock Awards.
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(ii)Performance Cash Awards. A Performance Cash Award is a cash award (for a dollar value not in excess of that set forth in Section 3(d)(iii) above) that is payable contingent upon the attainment during a Performance Period of certain Performance Goals. A Performance Cash Award may also require the completion of a specified period of Continuous Service. At the time of grant of a Performance Cash Award, the length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained will be conclusively determined by the Committee (or, if not required for compliance with Section 162(m) of the Code, the Board), in its sole discretion. The Board may specify the form of payment of Performance Cash Awards, which may be cash or other property, or may provide for a Participant to have the option for his or her Performance Cash Award, or such portion thereof as the Board may specify, to be paid in whole or in part in cash or other property.
(iii)Board Discretion. The Board retains the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects to use for a Performance Period.
(iv)Section 162(m) Compliance. Unless otherwise permitted in compliance with the requirements of Section 162(m) of the Code with respect to an Award intended to qualify as “performance-based compensation” thereunder, the Committee will establish the Performance Goals applicable to, and the formula for calculating the amount payable under, the Award no later than the earlier of (A) the date 90 days after the commencement of the applicable Performance Period, and (B) the date on which 25% of the Performance Period has elapsed, and in any event at a time when the achievement of the applicable Performance Goals remains substantially uncertain. Prior to the payment of any compensation under an Award intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee will certify in writing the extent to which any Performance Goals and any other material terms under such Award have been satisfied (other than in cases where such relate solely to the increase in the value of the Common Stock). Notwithstanding satisfaction of any completion of any Performance Goals, the number of shares of Common Stock, Options, cash or other benefits granted, issued, retainable and/or vested under an Award on account of satisfaction of such Performance Goals may be reduced by the Committee on the basis of such further considerations as the Committee, in its sole discretion, will determine.
(d)Other Stock Awards. Other forms of Stock Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options or stock rights with an exercise price or strike price less than 100% of the Fair Market Value of the Common Stock at the time of grant) may be granted either alone or in addition to Stock Awards provided for under Section 5 and the preceding provisions of this Section 6. Subject to the provisions of the Plan, the Board will have sole and complete authority to determine the persons to whom and the time or times at which such Other Stock Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Stock Awards and all other terms and conditions of such Other Stock Awards.
7.
| Covenants of the Company.
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(a)Availability of Shares. The Company will keep available at all times the number of shares of Common Stock reasonably required to satisfy then-outstanding Stock Awards.
(b)Securities Law Compliance. The Company will seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that this undertaking will not require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained. A Participant will not be eligible for the grant of an Award or the subsequent issuance of cash or Common Stock pursuant to the Award if such grant or issuance would be in violation of any applicable securities law.
(c)No Obligation to Notify or Minimize Taxes. The Company will have no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Stock Award. Furthermore, the Company will have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of an Award to the holder of such Award.
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(a)Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common Stock pursuant to Stock Awards will constitute general funds of the Company.
(b)Corporate Action Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award Agreement as a result of a clerical error in the papering of the Award Agreement, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement.
(c)Stockholder Rights. No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to a Stock Award unless and until (i) such Participant has satisfied all requirements for exercise of, or the issuance of shares of Common Stock under, the Stock Award pursuant to its terms, and (ii) the issuance of the Common Stock subject to such Stock Award has been entered into the books and records of the Company.
(d)No Employment or Other Service Rights. Nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or will affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, including, but not limited to, Cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.
(e)Change in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or her services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a change in status from a full-time Employee to a part-time Employee or takes an extended leave of absence) after the date of grant of any Award to the Participant, the Board has the right in its sole discretion to (i) make a corresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment, and (ii) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced or extended.
(f)Incentive Stock Option Limitations. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and any Affiliates) exceeds $100,000 (or such other limit established in the Code) or otherwise does not comply with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise do not comply with such rules will be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s).
(g)Investment Assurances. The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award, and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, will be inoperative if (i) the issuance of the shares upon the exercise of a Stock Award or acquisition of Common Stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act, or (ii) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock.
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(h)Withholding Obligations. Unless prohibited by the terms of an Award Agreement, the Company may, in its sole discretion, satisfy any U.S. federal, state, local, foreign or other tax withholding obligation relating to an Award by any of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Award; provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law (or such other amount as may be necessary to avoid classification of the Stock Award as a liability for financial accounting purposes); (iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant, including proceeds from the sale of shares of Common Stock issued pursuant to a Stock Award; or (v) by such other method as may be set forth in the Award Agreement.
(i)Electronic Delivery. Any reference herein to a “written” agreement or document will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto), or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access).
(j)Deferrals. To the extent permitted by applicable law, the Board, in its sole discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may establish programs and procedures for deferral elections to be made by Participants. Deferrals by Participants will be made in accordance with Section 409A of the Code (to the extent applicable to a Participant). Consistent with Section 409A of the Code, the Board may provide for distributions while a Participant is still an employee or otherwise providing services to the Company. The Board is authorized to make deferrals of Awards and determine when, and in what annual percentages, Participants may receive payments, including lump sum payments, following the Participant’s termination of Continuous Service, and implement such other terms and conditions consistent with the provisions of the Plan and in accordance with applicable law.
(k)Compliance with Section 409A. Unless otherwise expressly provided for in an Award Agreement, the Plan and Award Agreements will be interpreted to the greatest extent possible in a manner that makes the Plan and the Awards granted hereunder exempt from Section 409A of the Code, and, to the extent not so exempt, in compliance with Section 409A of the Code. If the Board determines that any Award granted hereunder is not exempt from and is therefore subject to Section 409A of the Code, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent an Award Agreement is silent on terms necessary for compliance, such terms are hereby incorporated by reference into the Award Agreement. Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding an Award that constitutes “deferred compensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A of the Code, no distribution or payment of any amount that is due because of a “separation from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) will be issued or paid before the date that is six (6) months following the date of such Participant’s “separation from service” or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies with Section 409A of the Code, and any amounts so deferred will be paid in a lump sum on the day after such six (6) month period elapses, with the balance paid thereafter on the original schedule.
(l)Clawback/Recovery. All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including, but not limited to, a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) under any agreement with the Company or an Affiliate.
9.
| Adjustments upon Changes in Common Stock; Other Corporate Events.
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(a)Capitalization Adjustments. In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a); (ii) the class(es) and maximum number of securities that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3(c); (iii) the class(es) and maximum number of securities that may be awarded to any person pursuant to Section 3(d) and (iv) the class(es) and number of securities and price per share of stock subject to outstanding Stock Awards. The Board will make such adjustments, and its determination will be final, binding and conclusive.
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(b)Dissolution or Liquidation. Except as otherwise provided in the Stock Award Agreement, in the event of a dissolution or liquidation of the Company, all outstanding Stock Awards (other than Stock Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Company’s right of repurchase) will terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common Stock subject to the Company’s repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that the holder of such Stock Award is providing Continuous Service; provided, however, that the Board may, in its sole discretion, cause some or all Stock Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such Stock Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion.
(c)Corporate Transaction. The following provisions will apply to Stock Awards in the event of a Corporate Transaction unless otherwise provided in the instrument evidencing the Stock Award or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by the Board at the time of grant of a Stock Award. In the event of a Corporate Transaction, then, notwithstanding any other provision of the Plan, the Board will take one or more of the following actions with respect to Stock Awards, contingent upon the closing or completion of the Corporate Transaction:
(i)arrange for the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) to assume or continue the Stock Award or to substitute a similar stock award for the Stock Award (including, but not limited to, an award to acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction);
(ii)arrange for the assignment of any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to the Stock Award to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company);
(iii)accelerate the vesting, in whole or in part, of the Stock Award (and, if applicable, the time at which the Stock Award may be exercised) to a date prior to the effective time of such Corporate Transaction as the Board will determine (or, if the Board will not determine such a date, to the date that is 5 days prior to the effective date of the Corporate Transaction), with such Stock Award terminating if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction;
(iv)arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by the Company with respect to the Stock Award;
(v)cancel or arrange for the cancellation of the Stock Award, to the extent not vested or not exercised prior to the effective time of the Corporate Transaction, in exchange for such cash consideration, if any, as the Board, in its sole discretion, may consider appropriate; and
(vi)cancel or arrange for the cancellation of the Stock Award, to the extent not vested or not exercised prior to the effective time of the Corporate Transaction, in exchange for a payment, in such form as may be determined by the Board equal to the excess, if any, of (A) the value of the property the Participant would have received upon the exercise of the Stock Award immediately prior to the effective time of the Corporate Transaction, over (B) any exercise price payable by such holder in connection with such exercise.
The Board need not take the same action or actions with respect to all Stock Awards or portions thereof or with respect to all Participants. The Board may take different actions with respect to the vested and unvested portions of a Stock Award.
In the absence of any affirmative determination by the Board at the time of a Corporate Transaction, each outstanding Stock Award will be assumed or an equivalent Stock Award will be substituted by such successor corporation or a parent or subsidiary of such successor corporation (the “Successor Corporation”), unless the Successor Corporation does not agree to assume the Stock Award or to substitute an equivalent Stock Award, in which case such Stock Award will terminate upon the consummation of the transaction.
(d)Change in Control. A Stock Award may be subject to additional acceleration of vesting and exercisability upon or after a Change in Control as may be provided in the Stock Award Agreement for such Stock Award or as may be provided in any other written agreement between the Company or any Affiliate and the Participant, but in the absence of such provision, no such acceleration will occur.
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10.
| Termination or Suspension of the Plan.
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The Board may suspend or terminate the Plan at any time. No Awards may be granted after March 31, 2024. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.
11.
| Effective Date of Plan; Timing of First Grant or Exercise.
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The Plan came into existence on March 31, 2014 (the “Original Effective Date”). The stockholders of the Company approved the Plan on June 2, 2014. The Board approved the Plan, as amended and restated, as of April 26, 2016 (the “Effective Date”). No Stock Award may be exercised (or, in the case of a Restricted Stock Award, Restricted Stock Unit Award, Performance Stock Award, or Other Stock Award, may be granted) and no Performance Cash Award may be settled, under the Plan, as amended and restated, unless and until the Plan, as amended and restated, has been approved by the stockholders of the Company, which approval will be within 12 months after the Effective Date; provided, however, that in the absence of such approval this Plan shall continue to operate as approved by the stockholders of the Company on June 2, 2014.
The laws of the State of Delaware will govern all questions concerning the construction, validity and interpretation of this Plan, without regard to that state’s conflict of laws rules.
As used in the Plan, the following definitions will apply to the capitalized terms indicated below:
(a)“Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company, as such terms are defined in Rule 405 of the Securities Act. The Board will have the authority to determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.
(b)“Award” means a Stock Award or a Performance Cash Award.
(c)“Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of an Award.
(d)“Board” means the Board of Directors of the Company.
(e)“Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Stock Award after the Adoption Date without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other similar equity restructuring transaction, as that term is used in Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.
(f)“Cause” will have the meaning ascribed to such term in any written agreement between the Participant and the Company or any Affiliate defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events: (i) Participant’s willful failure substantially to perform his or her duties and responsibilities to the Company or any Affiliate or deliberate violation of a policy of the Company or any Affiliate; (ii) Participant’s commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably expected to result in material injury to the Company or any Affiliate; (iii) unauthorized use or disclosure by Participant of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company or any Affiliate; or (iv) Participant’s willful breach of any of his or her obligations under any written agreement or covenant with the Company or any Affiliate. The determination as to whether a Participant is being terminated for Cause will be made in good faith by the Company and will be final and binding on the Participant. Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards held by such Participant will have no effect upon any determination of the rights or obligations of the Company, any Affiliate or such Participant for any other purpose.
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(g)“Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:
(i)any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control will not be deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities or (C) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control will be deemed to occur;
(ii)there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than 50% of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than 50% of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;
(iii)there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than 50% of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or individuals who, on the Effective Date, are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board;
(iv)provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member will, for purposes of this Plan, be considered as a member of the Incumbent Board.
Notwithstanding the foregoing definition or any other provision of this Plan, (A) the term Change in Control will not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, and (B) the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant will supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition will apply.
If required for compliance with Section 409A of the Code, in no event will a Change in Control be deemed to have occurred if such transaction is not also a “change in the ownership or effective control of” the Company or “a change in the ownership of a substantial portion of the assets of” the Company as determined under U.S. Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder). The Board may, in its sole discretion and without a Participant’s consent, amend the definition of “Change in Control” to conform to the definition of “Change in Control” under Section 409A of the Code, and the regulations thereunder.
(h)“Code” means the U.S. Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.
(i)“Committee” means a committee of one (1) or more Directors to whom authority has been delegated by the Board in accordance with Section 2(c).
(j)“Common Stock” means the common stock of the Company.
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(k)“Company” means Atara Biotherapeutics, Inc., a Delaware corporation.
(l)“Consultant” means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered a “Consultant” for purposes of the Plan. Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if a Form S-8 Registration Statement under the Securities Act is available to register either the offer or the sale of the Company’s securities to such person.
(m)“Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the Entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, will not terminate a Participant’s Continuous Service. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service. If the Entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board in its sole discretion, such Participant’s Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. In addition, if required for exemption from or compliance with Section 409A of the Code, the determination of whether there has been a termination of Continuous Service will be made, and such term will be construed, in a manner that is consistent with the definition of “separation from service” as defined under U.S. Treasury Regulation Section 1.409A-1(h) (without regard to any alternative definition thereunder). A leave of absence will be treated as Continuous Service for purposes of vesting in a Stock Award only to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law.
(n)“Corporate Transaction” means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:
(i)a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets of the Company and its Subsidiaries;
(ii)a sale or other disposition of at least 90% of the outstanding securities of the Company;
(iii)a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or
(iv)a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.
To the extent required for compliance with Section 409A of the Code, in no event will an event be deemed a Corporate Transaction if such transaction is not also a “change in the ownership or effective control of” the Company or “a change in the ownership of a substantial portion of the assets of” the Company as determined under U.S. Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).
(o)“Covered Employee” will have the meaning provided in Section 162(m)(3) of the Code.
(p)“Director” means a member of the Board.
(q)“Disability” means, with respect to a Participant, the inability of such Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months as provided in Sections 22(e)(3) and 409A(a)(2)(C)(i) of the Code, and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.
(r)“Effective Date” is defined in Section 11 of the Plan.
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(s)“Employee” means any person providing services as an employee of the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan.
(t)“Entity” means a corporation, partnership, limited liability company or other entity.
(u)“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(v)“Exchange Act Person” means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14 (d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company, or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities.
(w)“Fair Market Value” means, as of any date, the value of the Common Stock determined as follows:
(i)If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share of Common Stock will be, unless otherwise determined by the Board, the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as reported in a source the Board deems reliable.
(ii)Unless otherwise provided by the Board, if there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing selling price on the last preceding date for which such quotation exists.
(iii)In the absence of such markets for the Common Stock, the Fair Market Value will be determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.
(x)“Incentive Stock Option” means an option granted pursuant to Section 5 of the Plan that is intended to be, and that qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code.
(y)“IPO Date” means the date of the underwriting agreement between the Company and the underwriters(s) managing the initial public offering of the Common Stock, pursuant to which the Common Stock is priced for the initial public offering (the “IPO”).
(z)“Non-Employee Director” means a Director who either (i) is not a current employee or officer of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3 of the Exchange Act.
(aa)“Nonstatutory Stock Option” means any option granted pursuant to Section 5 of the Plan that does not qualify as an Incentive Stock Option.
(bb)“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.
(cc)“Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan.
(dd)“Option Agreement” means a written agreement between the Company and an Optionholder evidencing the terms and conditions of an Option grant. Each Option Agreement will be subject to the terms and conditions of the Plan.
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(ee)“Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.
(ff)“Original Effective Date” is defined in Section 11 of the Plan.
(gg)“Other Stock Award” means an award based in whole or in part by reference to the Common Stock which is granted pursuant to the terms and conditions of Section 6(d).
(hh)“Other Stock Award Agreement” means a written agreement between the Company and a holder of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each Other Stock Award Agreement will be subject to the terms and conditions of the Plan.
(ii)“Outside Director” means a Director who either (i) is not a current employee of the Company or an “affiliated corporation” (within the meaning of U.S. Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated corporation” who receives compensation for prior services (other than benefits under a tax-qualified retirement plan) during the taxable year, has not been an officer of the Company or an “affiliated corporation,” and does not receive remuneration from the Company or an “affiliated corporation,” either directly or indirectly, in any capacity other than as a Director, or (ii) is otherwise considered an “outside director” for purposes of Section 162(m) of the Code
(jj)“Own,” “Owned,” “Owner,” “Ownership” means a person or Entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.
(kk)“Participant” means a person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award.
(ll)“Performance Cash Award” means an award of cash granted pursuant to the terms and conditions of Section 6 (c)(ii).
(mm)“Performance Criteria” means the one or more criteria that the Board will select for purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that will be used to establish such Performance Goals may be based on any one of, or combination of, the following as determined by the Board: (1) profit before tax; (2) billings; (3) revenue; (4) net revenue; (5) earnings (which may include earnings before interest and taxes, earnings before taxes, and net earnings); (6) operating income; (7) operating margin; (8) operating profit; (9) controllable operating profit, or net operating profit; (10) net profit; (11) gross margin; (12) operating expenses or operating expenses as a percentage of revenue; (13) net income; (14) earnings per share; (15) total stockholder return; (16) market share; (17) return on assets or net assets; (18) the Company’s stock price; (19) growth in stockholder value relative to a pre-determined index; (20) return on equity; (21) return on invested capital; (22) cash flow (including free cash flow or operating cash flows); (23) cash conversion cycle; (24) economic value added; (25) individual confidential business objectives; (26) contract awards or backlog; (27) overhead or other expense reduction; (28) credit rating; (29) strategic plan development and implementation; (30) succession plan development and implementation; (31) improvement in workforce diversity; (32) customer indicators; (33) new product invention or innovation; (34) attainment of research and development milestones; (35) improvements in productivity; (36) bookings; (37) initiation of phases of clinical trials and/or studies by specified dates; (38) regulatory body approval with respect to products, studies and/or trials; (39) patient enrollment dates; (40) commercial launch of products; and (41) to the extent that an Award is not intended to comply with Section 162(m) of the Code, other measures of performance selected by the Board.
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(nn)“Performance Goals” means, for a Performance Period, the one or more goals established by the Board for the Performance Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless specified otherwise by the Board (i) in the Award Agreement at the time the Award is granted or (ii) in such other document setting forth the Performance Goals at the time the Performance Goals are established, the Board will appropriately make adjustments in the method of calculating the attainment of Performance Goals for a Performance Period as follows: (1) to exclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects; (3) to exclude the effects of changes to generally accepted accounting principles; (4) to exclude the effects of any statutory adjustments to corporate tax rates; (5) to exclude the effects of any “extraordinary items” as determined under generally accepted accounting principles; (6) to exclude the dilutive effects of acquisitions or joint ventures; (7) to assume that any business divested by the Company achieved performance objectives at targeted levels during the balance of a Performance Period following such divestiture; (8) to exclude the effect of any change in the outstanding shares of common stock of the Company by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common stockholders other than regular cash dividends; (9) to exclude the effects of stock based compensation and the award of bonuses under the Company’s bonus plans; (10) to exclude costs incurred in connection with potential acquisitions or divestitures that are required to expensed under generally accepted accounting principles; (11) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally accepted accounting principles; (12) to exclude the effect of any other unusual, non-recurring gain or loss or other extraordinary item; (13) to exclude the effects of the timing of acceptance for review and/or approval of submissions to the Food and Drug Administration or any other regulatory body; and (14) to exclude the effects of entering into or achieving milestones involved in licensing joint ventures. In addition, the Board retains the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects to use for such Performance Period. Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement as specified in the Stock Award Agreement or the written terms of a Performance Cash Award.
(oo)“Performance Period” means the period of time selected by the Board over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of a Stock Award or a Performance Cash Award. Performance Periods may be of varying and overlapping duration, at the sole discretion of the Board.
(pp)“Performance Stock Award” means a Stock Award granted under the terms and conditions of Section 6(c)(i).
(qq)“Plan” means this Atara Biotherapeutics, Inc. 2014 Equity Incentive Plan, as amended and restated.
(rr)“Restricted Stock Award” means an award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(a).
(ss)“Restricted Stock Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. Each Restricted Stock Award Agreement will be subject to the terms and conditions of the Plan.
(tt)“Restricted Stock Unit Award” means a right to receive shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(b).
(uu)“Restricted Stock Unit Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted Stock Unit Award Agreement will be subject to the terms and conditions of the Plan.
(vv)“Securities Act” means the U.S. Securities Act of 1933, as amended.
(ww)“Stock Appreciation Right” or “SAR” means a right to receive the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 5.
(xx)“Stock Appreciation Right Agreement” means a written agreement between the Company and a holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation Right grant. Each Stock Appreciation Right Agreement will be subject to the terms and conditions of the Plan.
(yy)“Stock Award” means any right to receive Common Stock granted under the Plan, including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right, a Performance Stock Award, or any Other Stock Award.
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(zz)“Stock Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement will be subject to the terms and conditions of the Plan.
(aaa)“Subsidiary” means, with respect to the Company, (i) any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than 50%.
(bbb)“Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate.
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![](https://capedge.com/proxy/DEF 14A/0001564590-16-017048/gyqkw3i2loeg000003.jpg) ![](https://capedge.com/proxy/DEF 14A/0001564590-21-020128/ga5ozxl324dc000007.jpg)
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY D47727-P55168 ! ! ! For All Withhold All For All Except For Against Abstain ! ! ! ! ! ! To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. ATARA BIOTHERAPEUTICS, INC. 611 GATEWAY BLVD., SUITE 900 SOUTH SAN FRANCISCO, CA 94080 The Board of Directors recommends you vote FOR the following proposal: The Board of Directors recommends you vote FOR the following proposal: Nominees: 01) Eric L. Dobmeier 02) William K. Heiden 03) Beth Seidenberg, M.D. 2. To approve, on an advisory basis, the compensation of the Company's named executive officers, as disclosed in the Proxy Statement. 3. To ratify the selection of Deloitte & Touche LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2021. NOTE: Such other matters that may properly come before the meeting or any adjournment or postponement thereof will be voted on by the proxy holders in their discretion. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. 1. Election of Directors ATARA BIOTHERAPEUTICS, INC. The Board of Directors recommends you vote FOR the following: For Against Abstain VOTE BY INTERNET - www.proxyvote.comUsewww.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M.p.m. Eastern Time on June 22, 2016.7, 2021. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy card sandcards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903Use1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59P.M.59 p.m. Eastern Time on June 22, 2016.7, 2021. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broad ridge,Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Investor Address Line 1 Investor Address Line 2 Investor Address Line 3 Investor Address Line 4 Investor Address Line 5 John Sample 1234 ANYWHERE STREET ANY CITY, ON A1A 1A1 For Withhold For All All All Except The Board of Directors recommends you vote FOR the following: 0 0 01. Election of Directors To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. 01 Nominees Matthew K. Fust 02 Joel S. Marcus The Board of Directors recommends you vote FOR the following proposals: 2 Ratification of the appointment of Deloitte & Touche, LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2016. 3 To approve the Company's 2014 Equity Incentive Plan, as amended, to increase the aggregate number of shares of Common Stock authorized for issuance thereunder by 4,000,000 shares and to make certain other changes thereto as described in the proxy statement. 0 0 For 0 0 Against 00 Abstain NOTE: In their discretion, upon such other matters that may properly come before the meeting or any adjournment or adjournments thereof. Investor Address Line 1 Investor Address Line 2 Investor Address Line 3 Investor Address Line 4 Investor Address Line 5 Please sign exactly as your name(s) appear(s) hereon. When signing as John Sample attorney, executor, administrator, or other fiduciary, please give full 1234 ANYWHERE STREET title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or ANY CITY, ON A1A 1A1 partnership name, by authorized officer. 0000291616_1 R1.0.1.25
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0000291616_2 R1.0.1.25D47728-P55168 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice &and Proxy Statement Annual Report is/and Form 10-K are available atwww.proxyvote.comat www.proxyvote.com. ATARA BIOTHERAPEUTICS, INC. Annual Meeting of Stock holdersStockholders June 23, 20168, 2021 9:00 AM This proxy is solicited by the Board of Directors The stockholders hereby appoint John F. McGrathPascal Touchon and Heather D. Turner,Utpal Koppikar, or either of them, as proxies, each with the power to appoint his/herhis substitute, and here byhereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stockcommon stock of ATARA BIOTHERAPEUTICS, INC. that the stockholders are entitled to vote at the Annual Meeting of stockholdersStockholders to be held at 9:00 AM, PDT on June 23, 2016,8, 2021 at 611 Gateway Blvd., Suite 900, S. San Francisco,2430 Conejo Spectrum Street, Thousand Oaks, CA 94080,91320, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed here in.herein. If no such direction is made, this proxy will be voted FOR all nominees listed in accordance withProposal 1, FOR Proposals 2 and 3, as more specifically described in the Boardproxy statement, and in the discretion of Directors' recommendations.the proxy holders upon any other business as may properly come before the Annual Meeting of Stockholders or any adjournment or postponement thereof. Continued and to be signed on reverse side
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