PROPOSAL 1
Our certificate of incorporation provides for a Board of Directors that is divided into three classes. The term for each class is three years, staggered over time. This year,In 2021, the term of the directors in Class I expires. OurIII expires, and all three Class I directors will each stand for re-election at the Annual Meeting. Our Board of Directors is currently comprised of nine members. If all of the Class I director nominees are elected at the Annual Meeting, the composition of our Board of Directors will be as follows: Class I—Drs. Ted W. Love, Charles Homcy and Glenn F. Pierce; Class II—Messrs. Michael W. Bonney and Willie L. Brown, Jr. and Dr. Philip A. Pizzo; and Class III—III directors—Messrs. Scott W. Morrison, Deval L. Patrick and Mark L. Perry—will stand for re-election at the Annual Meeting.
Our Board of Directors is currently comprised of ten members. If the Class III director nominees who are standing for re-election are elected at the Annual Meeting, our Board of Directors will be as follows:
Class I—Drs. Ted Love, Glenn F. Pierce and Alexis A. Thompson and Ms. Dawn A. Svoronos;
Class II—Mr. Willie L. Brown, Jr., Dr. Philip A. Pizzo and Ms. Wendy L. Yarno; and
Class III—Messrs. Morrison, Patrick and Perry.
In the absence of instructions to the contrary, the persons named as proxy holders in the accompanying proxy intend to vote in favor of the election of the three Class IIII nominees designated below to serve until the 20192024 Annual Meeting of Stockholders and until their successors shall have been duly elected and qualified. Each nominee is currently a director. The Board of Directors expects that each nominee will be available to serve as a director, but if any such nominee should become unavailable or unwilling to stand for election, it is intended that the shares represented by the proxy will be voted for such substitute nominee as may be designated by the Board of Directors.
The biographies of our directorsdirector nominees and each director whose term will continue after the Annual Meeting and their ages as of March 31, 20162021, are set forth below.
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Name | | Position | | Year First Elected or
Appointed Director | | | Age | |
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Ted W. Love, M.D. | | President, Chief Executive Officer and Director | | | 2013 | | | | 62 | |
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Willie L. Brown, Jr. | | Director | | | 2015 | | | | 87 | |
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Scott W. Morrison | | Director | | | 2016 | | | | 63 | |
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Deval L. Patrick | | Director | | | 2015 | | | | 64 | |
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Mark L. Perry | | Director | | | 2015 | | | | 65 | |
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Glenn F. Pierce, M.D., Ph.D. | | Director | | | 2016 | | | | 65 | |
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Philip A. Pizzo, M.D. | | Director | | | 2015 | | | | 76 | |
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Dawn A. Svoronos | | Director | | | 2018 | | | | 67 | |
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Alexis A. Thompson, M.D., M.P.H. | | Director | | | 2021 | | | | 62 | |
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Wendy L. Yarno | | Director | | | 2017 | | | | 66 | |
Global Blood Therapeutics, Inc. ï2021 Proxy Statement5
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Name | | Age | | Position |
Ted W. Love, M.D. | | 57 | | President, Chief Executive Officer and Director |
Michael W. Bonney(2)(3) | | 57 | | Director |
Willie L. Brown, Jr.(3) | | 82 | | Director |
Charles Homcy, M.D.(4) | | 67 | | Director |
Scott W. Morrison(1) | | 58 | | Director |
Deval L. Patrick(1)(2) | | 59 | | Director |
Mark L. Perry(1)(2) | | 60 | | Director |
Glenn F. Pierce, M.D., Ph.D.(4) | | 60 | | Director |
Philip A. Pizzo, M.D.(3)(4) | | 71 | | Director |
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(1) | | Member of the Audit Committee. |
(2) | | Member of the Compensation Committee. |
(3) | | Member of the Nominating and Corporate Governance Committee. |
(4) | | Member of the Research and Development Committee. |
Nominees for Director
III: Director NomineesThe persons listed below are nominated for election to Class IIII of the Board of Directors to serve a three-year term ending at the 2019 annual meeting2024 Annual Meeting of stockholdersStockholders and until their successors are elected and qualified.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
THE CLASS III DIRECTOR NOMINEES BELOW. |
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| | ScottW. Morrison Age 63 Director since January 2016 Committees: • Audit (Chair) • Compensation • Commercial | | | �� | Mr. Morrison has served as a member of our Board of Directors since January 2016. From 1996 to December 2015, Mr. Morrison was a partner at Ernst & Young LLP, a public accounting firm, and served as its U.S. Life Sciences Leader since 2002. He currently serves on the board of directors of Corvus Pharmaceuticals, Inc., a biopharmaceutical company, and Ideaya Biosciences, Inc., a biotechnology company. Mr. Morrison has served on numerous life sciences industry boards, including the Biotechnology Innovation Organization (BIO) ECS Board, the Bay Area Bioscience Center Board (now California Life Sciences Association), the California Life Sciences Foundation and the Biotechnology Institute. Within the past five years, Mr. Morrison previously served on the board of directors of Audentes Therapeutics, Inc., a biotechnology company. Mr. Morrison holds a B.S. in Accounting and Finance from the University of California, Berkeley and is a Certified Public Accountant (inactive). Qualifications: Mr. Morrison’s qualifications to serve on our Board of Directors include significant accounting expertise and knowledge of the life sciences industry through his 35-year career in public accounting serving public and private companies in the life sciences sector, as well as his experience serving on the board of directors (and certain key standing committees) of other biotechnology companies since 2015. |
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| | Deval L. Patrick Age 64 Director since 2020; previously April 2015
to November 2019 Committees: • Audit • Nominating and Corporate Governance | | | | Mr. Patrick has served as a member of our Board of Directors since May 2020 and previously served as a member of our Board of Directors from April 2015 to November 2019. Since March 2021, Mr. Patrick has served as a Senior Advisor at Bain Capital, LP, an investment firm, and he previously served as managing director of Bain Capital from April 2015 to December 2019. Since May 2020, Mr. Patrick has served as co-chair of American Bridge 21st Century, a political action committee and an extension of his work to elevate the values of generational responsibility and servant leadership in politics and public service. Mr. Patrick also serves on the board of directors of AmWell Corp, a telehealth company, Twilio Inc., a cloud communications platform company, Cerevel Therapeutics, a biotechnology company, and Environmental Impact Acquisition Corp, a special purpose acquisition company focused on sustainability. From January 2007 to January 2015, Mr. Patrick served as the governor of Massachusetts. Before his tenure in government, Mr. Patrick served as the executive vice president and general counsel at The Coca-Cola Company, and as vice president and general counsel at Texaco Inc. Mr. Patrick received an A.B. in English and American literature from Harvard College and a J.D. from Harvard Law School. Qualifications: Mr. Patrick’s qualifications to serve on our Board of Directors include his significant experience as a business and government leader with a record of success in solving complex problems, making strategic investments, managing crises and building teams locally, nationally and internationally. |
62021 Proxy Statementï Global Blood Therapeutics, Inc.
The | | | | | | |
| | Mark L. Perry Age 65 Director since April 2015 Committees: • Audit • Compensation • Commercial | | | | Mr. Perry has served as a member of our Board of Directors since April 2015. From October 2012 to October 2013, Mr. Perry served as an entrepreneur-in-residence at Third Rock Ventures. In October 2004, Mr. Perry joined Aerovance, Inc., a biopharmaceutical company, as a director, and he served as president and chief executive officer of Aerovance from February 2007 to October 2011. Prior to that, Mr. Perry served as the senior business adviser of Gilead Sciences, Inc., a biopharmaceutical company, from April 2004 to February 2007 and as an executive officer from May 1994 to April 2004, during which time he served in a variety of capacities, including general counsel, chief financial officer and executive vice president of operations. Earlier in his career, from 1981 to 1994, Mr. Perry served as an attorney at Cooley LLP, and was a partner of the firm from 1987 to 1994. Since August 2011, Mr. Perry has served on various boards of companies and non-profit organizations. Mr. Perry currently serves on the board of directors of Nvidia Corporation, a visual computing company, and, within the past five years, he previously served on the board of directors of MyoKardia, Inc., a biopharmaceutical company. Mr. Perry received a B.A. in history from the University of California, Berkeley and a J.D. from the University of California, Davis. Qualifications: Mr. Perry’s qualifications to serve on our Board of Directors include more than 30 years of experience serving in professional and management positions in the biotechnology industry, as well as his experience serving on the board of directors (and certain key standing committees) of other biopharmaceutical companies. |
Class I: Directors Currently Serving Until the 2022 Annual Meeting of Directors recommends that you vote FOR the following nominees
Ted W. Love, M.D. Stockholders | | | | | | |
| | Ted W. Love, M.D. Age 62 Director since September 2013 Committees: • N/A | | | | Dr. Lovehas served as our Chief Executive Officer and President since June 2014, and as a member of our Board of Directors since September 2013. From February 2010 to August 2012, Dr. Love served as executive vice president, research and development and technical operations of Onyx Pharmaceuticals, Inc. Prior to that, from 2001 to January 2009, he served as president, chief executive officer and chairman of Nuvelo, Inc., and previously served as senior vice president, development of Theravance, Inc., from 1998 to 2001. Previously, he spent six years at Genentech, Inc., where he held a number of senior management positions in medical affairs and product development and served as chairman of Genentech’s Product Development Committee. Dr. Love currently serves on the board of directors of Seagen Inc., a biotechnology company, and Royalty Pharma plc, a biopharmaceutical company. Dr. Love also currently serves on the board of directors of the Biotechnology Innovation Organization (BIO), a non-profit biotechnology trade organization. Within the past five years, Dr. Love previously served on the board of directors of Amicus Therapeutics, Inc., a biotechnology company, and Cascadian Therapeutics, Inc., a biopharmaceutical company. Dr. Love holds a B.A. from Haverford College and an M.D. from Yale Medical School. He completed a residency in internal medicine and fellowship in cardiology at the Massachusetts General Hospital. Qualifications: Dr. Love’s qualifications to serve on our Board of Directors include his role as our principal executive officer and more than 25 years of broad leadership and management experience in the pharmaceutical industry. |
Global Blood Therapeutics, Inc. ï2021 Proxy Statement7
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| | Glenn F. Pierce, M.D., Ph.D. Age 65 Director since February 2016 Committees: • Nominating and Corporate Governance • Research and Development (Chair) | | | | Dr. Pierce has served as a member of our Board of Directors since February 2016. In February 2016, Dr. Pierce joined Third Rock Ventures, a venture capital firm, as an independent consultant and entrepreneur-in-residence. In 2018, Dr. Pierce co-founded Ambys Medicines, a biopharmaceutical company, and currently serves as interim Chief Medical Officer. He also serves on the World Federation of Hemophilia (WFH) Board and the National Hemophilia Foundation (NHF) (US) Medical and Scientific Advisory Council. Dr. Pierce is also a director of Voyager Therapeutics, a biopharmaceutical company. Dr. Pierce retired from Biogen in 2014 as senior vice president of Hematology, Cell and Gene Therapies. He had overall R&D responsibility for hemophilia and hemoglobinopathies and served as Chief Medical Officer since joining the company in 2009. Dr. Pierce was also responsible for global medical affairs for Biogen’s portfolio from 2012 to 2014. Dr. Pierce has 30 years’ experience in biotechnology research and development, beginning at Amgen, is the co-author of more than 150 scientific papers and is a named inventor in over 15 patents. Dr. Pierce also served on the Blood Products Advisory Committee at the United States Food and Drug Administration and the Committee on Blood Safety and Availability at the United States Department of Health and Human Services. He received an M.D. and a Ph.D. in Immunology, both from Case Western Reserve University in Cleveland, Ohio and did his postgraduate training in pathology and hematology research at Washington University in St. Louis, Missouri. Qualifications: Dr. Pierce’s qualifications to serve on our Board of Directors include more than 30 years of experience in leading biotechnology research and development in small, large, public and private biotechnology and biopharmaceutical firms. |
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| | Dawn A. Svoronos Age 67 Director since December 2018 Committees: • Commercial (Chair) | | | | Ms. Svoronos has served as a member of our Board of Directors since December 2018. Ms. Svoronos has more than 30 years of experience in the biopharmaceutical industry, including extensive commercial work with the multinational pharmaceutical company Merck & Co. Inc., where she held roles of increasing seniority over nearly 25 years of service. Prior to her retirement from Merck in 2011, Ms. Svoronos most recently served as President of Merck in Europe/Canada from 2009 to 2011, President of Merck in Canada from 2006 to 2009 and Vice-President of Merck for Asia Pacific from 2005 to 2006. Ms. Svoronos currently serves on the boards of directors of the following public biotechnology companies: Adverum Biotechnologies, Inc., PTC Therapeutics, Inc., Theratechnologies Inc., and Xenon Pharmaceuticals, Inc. Within the past five years, Ms. Svoronos previously served on the board of directors of Medivation Inc., a biopharmaceutical company, and Endocyte, Inc., a biopharmaceutical company. Ms. Svoronos holds a B.A. from Carleton University in Ottawa, Canada. Qualifications: Ms. Svoronos’ qualifications to serve on our Board of Directors include her extensive experience in the global commercialization of pharmaceutical products, including her substantial international commercial experience as well as her leadership experience and her service on the boards of directors of other public companies. |
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| | Alexis A. Thompson, M.D., M.P.H. Age 62 Director since March 2021 Committees: • Research and Development | | | | Dr. Thompson has served as a member of our Board of Directors since March 2021. Since April 2001, she has served as an attending physician at the Ann and Robert H. Lurie Children’s Hospital of Chicago, where she currently serves as the head of the Hematology Section and director of the Comprehensive Thalassemia Program and as the A. Watson and Sarah Armour Endowed Chair for Childhood Cancer and Blood Disorders. Since 2008, Dr. Thompson has served as the associate director for equity and minority health at the Robert H. Lurie Cancer Center and Northwestern University Feinberg School of Medicine. She has served on national advisory committees for governmental agencies as well as non-profit organizations focused on improving healthcare access, increasing workforce diversity and reducing health disparities. In 2018, Dr. Thompson served as president of the American Society of Hematology (ASH) and continues to serve on ASH’s Sickle Cell Disease Task Force. She has been a leader in multicenter collaborations, such as the National Heart, Lung, and Blood Institute’s Sickle Cell Disease Implementation Consortium, and has received numerous awards recognizing her expertise in teaching and clinical care. Dr. Thompson received an M.D. from Tulane University, received her M.P.H. from University of California, Los Angeles, and completed her postgraduate training at Children’s Hospital Los Angeles and the Children’s Hospital of Philadelphia. Qualifications: Dr. Thompson’s qualifications to serve on our Board of Directors include more than 20 years of experience as a world-renowned hematologist and sickle cell disease expert, her leadership in academic medicine, and expertise in science, education and healthcare. |
82021 Proxy Statementï Global Blood Therapeutics, Inc.
Class II: Directors Currently Serving Until the 2023 Annual Meeting of Stockholders
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| | Willie L. Brown, Jr. Age 87 Director since January 2015 Committees: • Nominating and Corporate Governance (Chair) | | | | Mr. Brown has served as a member of our Board of Directors since January 2015. Since January 2004, Mr. Brown has served as an attorney at law representing clients before state and local governments. Prior to that, from January 1996 to January 2004, Mr. Brown served as the 41st mayor of San Francisco. Mr. Brown is a practicing attorney, community leader and well-respected public official who served over 31 years in the California State Assembly, spending more than 14 years as its Speaker, from 1980 to 1995. He currently serves as chairman and chief executive officer of The Willie L. Brown, Jr. Institute on Politics and Public Service, an independent, non-profit organization providing a forum for non-partisan education, debate and discussion of public policy issues. Mr. Brown holds a degree in political science from San Francisco State University and a J.D. from University of California, Hastings College of the Law. He has received over 17 honorary degrees from prestigious institutions throughout his life. Qualifications: Mr. Brown’s qualifications to serve on our Board of Directors include more than 50 years of political, business and non-profit experience. |
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| | Philip A. Pizzo, M.D. Age 76 Director since September 2015 Committees: • Nominating and Corporate Governance • Research and Development | | | | Dr. Pizzo has served as a member of our Board of Directors since September 2015. Dr. Pizzo currently serves as the David and Susan Heckerman Professor of Pediatrics and of Microbiology and Immunology at Stanford School of Medicine and is a founding director of the Stanford Distinguished Careers Institute. He previously served as Dean of the Stanford School of Medicine from 2001 to 2012, where he was also the Carl and Elizabeth Naumann Professor of Pediatrics and of Microbiology and Immunology. Before joining Stanford, he was the physician-in-chief of Children’s Hospital in Boston and chair of the Department of Pediatrics at Harvard Medical School from 1996 to 2001. Prior to that, Dr. Pizzo was at the National Cancer Institute, eventually serving as chief of pediatrics and acting scientific director in the Division of Clinical Sciences. Dr. Pizzo is the author of more than 630 scientific articles and 16 books and monographs, has received numerous awards and honors, is a member of the National Academy of Medicine, and serves on several international boards. Dr. Pizzo holds a B.A. from Fordham University and an M.D. from the University of Rochester, School of Medicine. Qualifications: Dr. Pizzo’s qualifications to serve on our Board of Directors include his leadership in academic medicine, and his work in the fields of pediatric medicine, science, education and healthcare. |
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| | Wendy L. Yarno Age 66 Director since December 2017 Committees: • Compensation (Chair) • Commercial | | | | Ms. Yarno has served as a member of our Board of Directors since December 2017. Ms. Yarno retired in September 2008 from Merck & Co, Inc., where she served in commercial and human resource positions of increasing seniority, most recently as Chief Marketing Officer, before she retired. Prior to this position, Ms. Yarno served as General Manager for Merck’s Cardiovascular/Metabolic United States Business Unit and as Senior Vice President, Human Resources. From 2010 to 2011, Ms. Yarno was the Chief Marketing Officer of HemoShear LLC, a biotechnology research company. Ms. Yarno currently serves on the boards of directors of the following public biopharmaceutical companies: Ideaya Biosciences, Inc., Inovio Pharmaceuticals, Inc. and Tarsus Pharmaceuticals, Inc. Within the past five years, Ms. Yarno previously served as a member of the board of directors of St. Jude Medical, Inc., a medical device company, Medivation, Inc., a biopharmaceutical company, Alder Biopharmaceuticals, Inc., a biopharmaceutical company, Aratana Therapeutics, Inc., a therapeutics company, and MyoKardia, Inc., a biopharmaceutical company. Ms. Yarno received an M.B.A. from Temple University, Fox School of Business, and a B.S. in business administration from Portland State University. Qualifications: Ms. Yarno’s qualifications to serve on our Board of Directors include her extensive experience commercializing pharmaceutical products, and her extensive operational and senior management experience, in the biopharmaceutical industry, as well as her experience serving on the board of directors (and certain key standing committees) of other biopharmaceutical companies. |
Global Blood Therapeutics, Inc. ï2021 Proxy Statement9
Board Skills, Experience and Diversity
The below table provides information regarding our Board of Directors, since September 2013. From February 2010 to August 2012, Dr. Love served as executive vice president, researchincluding certain attributes possessed by our directors, which we and development and technical operations of Onyx Pharmaceuticals, Inc., a biopharmaceutical company. Prior to that, from 2001 to January 2009, he served as president, chief executive officer and chairman of Nuvelo, Inc., a biopharmaceutical company, and previously served as senior vice president, development of Theravance, Inc., a biopharmaceutical company, from 1998 to 2001. Previously, he spent six years at Genentech, Inc., a biotechnology company, where he held a number of senior management positions
in medical affairs and product development and served as chairman of Genentech’s Product Development Committee. Dr. Love currently serves on the board of directors of Amicus Therapeutics, Inc. and Oncothyreon Inc., both biopharmaceutical companies. Dr. Love holds a B.A. from Haverford College and an M.D. from Yale Medical School. He completed a residency in internal medicine and fellowship in cardiology at the Massachusetts General Hospital. Dr. Love’s qualifications to serve on our Board of Directors believe are relevant to our business. The below table does not include his role as our principal executive officer and more than 20 yearsall of broad leadership and management experience in the pharmaceutical industry.
Charles Homcy, M.D. has served as a memberattributes of our directors, and the fact that a director may not have a particular attribute does not mean such director is unable to contribute to the decision-making process in that area. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Knowledge, Skills and Experience |
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| | | | | | | | | | | | | | | | | | | | 6 of 10 | | | | | | | | | | | | | | | | | | | | | | | | 8 of 10 |
| Executive leadership | | | | Healthcare/life sciences |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | 7 of 10 | | | | | | | | | | | | | | | | | | | | | | | | 7 of 10 |
| Business strategy/operations | | | | Public company/other governance role |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | 6 of 10 | | | | | | | | | | | | | | | | | | | | | | | | 6 of 10 |
| Commercial experience | | | | Government/regulatory |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | 7 of 10 | | | | | | | | | | | | | | | | | | | | | | | | 4 of 10 |
| International operating experience | | | | Scientific expertise |
Board composition overview
102021 Proxy Statementï Global Blood Therapeutics, Inc.
CORPORATE GOVERNANCE
Board of Directors since February 2011. In 2010, Dr. Homcy joined Third Rock Ventures, a venture capital firm, as a venture partner. He served as president and chief executive officer of Portola Pharmaceuticals, Inc., a biopharmaceutical company, since co-founding the company in 2003 until 2010. Prior to that, Dr. Homcy served as the president of research and development at Millennium Pharmaceuticals, Inc., a biopharmaceutical company, following its acquisition of COR Therapeutics Inc. in 2002. He joined COR in 1995 as executive vice president of research and development, and he served as a director of the company from 1998 to 2002. Dr. Homcy has been a clinical professor of medicine at the University of California, San Francisco Medical School, and attending physician at the San Francisco Veterans Affairs Hospital since 1997. He was previously president of the medical research division of American Cyanamid-Lederle Laboratories, a division of Wyeth-Ayest Laboratories. He currently serves as co-chairman of the board of directors of Portola and on the board of directors of MyoKardia, Inc., and TOPICA Pharmaceuticals, Inc., both biopharmaceutical companies. Dr. Homcy holds a B.A. and an M.D. from Johns Hopkins University. Dr. Homcy’s qualifications to serve on our Board of Directors include his significant experience building and leading successful biotechnology companies and his scientific expertise.
Glenn F. Pierce, M.D., Ph.D. has served as a member of our Board of Directors since February 2016. In February 2016, Dr. Pierce joined Third Rock Ventures, a venture capital firm, as an entrepreneur-in-residence. Since May 2014, Dr. Pierce has served as an independent advisor to biotechnology companies in research and development programs. Dr. Pierce retired from Biogen Inc., a biotechnology company, in May 2014, where he served in various roles since joining Biogen in March 2009, including as chief medical officer for hematology, and as head of global medical affairs, and most recently led the Hematology, Cell and Gene Therapies division. He had overall R&D responsibility for hemophilia and hemoglobinopathies and led the research and clinical development of extended half-life FVIII and FIX Fc fusions, which culminated in multiple regulatory approvals in 2014. He is the co-author of more than 150 scientific papers and has over 15 patents. He currently serves on the World Federation of Hemophilia (WFH) and WFHUSA board of directors and on the National Hemophilia Foundation (NHF) (U.S.) Medical and Scientific Advisory Council. Dr. Pierce received an M.D. and a Ph.D. in immunology from Case Western Reserve University in Cleveland and conducted postgraduate training in pathology and hematology research at Washington University in St. Louis. Dr. Pierce’s qualifications to serve on our Board of Directors include nearly 30 years of experience in leading biotechnology research and development in small, large, public and private biotechnology and biopharmaceutical firms.
Class II: Currently Serving Until the 2017 Annual Meeting
Michael W. Bonney has served as a member of our Board of Directors since February 2016. In January 2016, Mr. Bonney joined Third Rock Ventures, a venture capital firm, as a partner. He served as chief executive officer and a member of the board of directors of Cubist Pharmaceuticals, Inc., a biopharmaceutical company (now a wholly-owned subsidiary of Merck & Co., Inc.), from June 2003 until his retirement in December 2014. Prior to that, he held various positions of increasing responsibility at Biogen, a biopharmaceutical company, including vice president, sales and marketing, and at Zeneca Pharmaceuticals, where he held positions in sales, marketing and strategic planning. Mr. Bonney currently serves as chairman of the board of directors for Alnylam Pharmaceuticals, Inc., a biopharmaceutical company, and as a board member for Celgene Corporation, a global biopharmaceutical company, the Whitehead Institute for Biomedical Research and the Gulf of Maine Research Institute. He was a director of NPS Pharmaceuticals, Inc., a biopharmaceutical company, from 2005 until its sale to Shire Plc in February 2015. He is also a trustee of the Tekla complex of life sciences and healthcare dedicated funds, which include the H&Q Healthcare Investors and H&Q Life Sciences Investors funds. Mr. Bonney earned a B.A. in economics from Bates College, where he now serves as chairman of the board of trustees. Mr. Bonney’s qualifications to serve on our Board of Directors include his extensive operational, commercial and senior management experience in the biopharmaceutical industry, as well as his experience serving on the board of directors (and certain of their key standing committees) of other companies and trade organizations within the biopharmaceutical industry.
Willie L. Brown, Jr.has served as a member of our Board of Directors since January 2015. Since January 2004, Mr. Brown has served as an attorney at law representing clients before state and local governments. Prior to that, from January 1996 to January 2004, Mr. Brown served as the 41st mayor of San Francisco. Mr. Brown is a practicing attorney, community leader and well-respected public official who served over 31 years in the California State Assembly, spending more than 14 years as its Speaker, from 1980 to 1995. He currently serves as chairman and chief executive officer of The Willie L. Brown, Jr. Institute on Politics and Public Service,
an independent, non-profit organization providing a forum for non-partisan education, debate and discussion of public policy issues. Mr. Brown holds a degree in political science from San Francisco State University and a J.D. from University of California, Hastings College of the Law. He has received over 17 honorary degrees from prestigious institutions throughout his life. Mr. Brown’s qualifications to serve on our Board of Directors include more than 50 years of political, business and non-profit experience.
Philip A. Pizzo, M.D.has served as a member of our Board of Directors since September 2015. Dr. Pizzo currently serves as the David and Susan Heckerman Professor of Pediatrics and of Microbiology and Immunology at Stanford School of Medicine and is a founding director of the Stanford Distinguished Careers Institute. Since 2013, he has served on the board of directors of MRI Interventions, Inc., a publicly-traded medical device company. He previously served as Dean of the Stanford School of Medicine from 2001 to 2012, where he was also the Carl and Elizabeth Naumann Professor of Pediatrics and of Microbiology and Immunology. Before joining Stanford, he was the physician-in-chief of Children’s Hospital in Boston and chair of the Department of Pediatrics at Harvard Medical School from 1996 to 2001. Prior to that, Dr. Pizzo was at the National Cancer Institute, eventually serving as chief of pediatrics and acting scientific director in the Division of Clinical Sciences. Dr. Pizzo is the author of more than 630 scientific articles and 16 books and monographs, has received numerous awards and honors, is a member of the Institute of Medicine, and serves on several international boards. Dr. Pizzo holds a B.A. from Fordham University and an M.D. from the University of Rochester, School of Medicine. Dr. Pizzo’s qualifications to serve on our Board of Directors include his leadership in academic medicine and his work in the fields of pediatric medicine, science, education and healthcare.
Class III: Currently Serving Until the 2018 Annual Meeting
Scott W. Morrison has served as a member of our Board of Directors since January 2016. From 1996 to December 2015, Mr. Morrison was a partner at Ernst & Young LLP, a public accounting firm, and served as its U.S. Life Sciences Leader since 2002. He currently serves on the board of directors of Corvus Pharmaceuticals, Inc., a biopharmaceutical company, and Audentes Therapeutics, Inc., a biotechnology company. Mr. Morrison has served on numerous life sciences industry boards, including the Biotechnology Industry Organization (BIO) ECS Board, the Bay Area Bioscience Center, the California Life Sciences Foundation and the Biotechnology Institute. Mr. Morrison holds a B.S. in Accounting and Finance from the University of California, Berkeley and is a Certified Public Accountant (inactive). Mr. Morrison’s qualifications to serve on our Board of Directors include significant accounting expertise and knowledge of the life sciences industry through his 35 year career in public accounting serving public and private companies in the life sciences sector.
Deval L. Patrick has served as a member of our Board of Directors since April 2015. In April 2015, Mr. Patrick joined Bain Capital, LP, where he serves as managing director. From January 2007 to January 2015, Mr. Patrick served as the governor of Massachusetts. Prior to his tenure in government, from 2000 to 2004, Mr. Patrick served as the executive vice president and general counsel at The Coca-Cola Company. Prior to that, he served as vice president and general counsel at Texaco Inc., from 1998 to 1999. Mr. Patrick received an A.B. in English and American Literature from Harvard College and a J.D. from Harvard Law School. Mr. Patrick’s qualifications to serve on our Board of Directors include his significant experience as a business and government leader with a record of success in solving complex problems, making strategic investments, managing crises and building teams locally, nationally and internationally.
Mark L. Perryhas served as a member of our Board of Directors since April 2015. From October 2012 to October 2013, Mr. Perry served as an entrepreneur-in-residence at Third Rock Ventures. Since August 2011, he has served on various boards of companies and non-profit organizations. In October 2004, Mr. Perry joined Aerovance, Inc., a biopharmaceutical company, as a director, and he served as president and chief executive officer of Aerovance from February 2007 to October 2011. Prior to that, Mr. Perry served as the senior business adviser of Gilead Sciences, Inc., a biopharmaceutical company, from April 2004 to February 2007 and as an executive officer from May 1994 to April 2004, during which time he served in a variety of capacities, including general counsel, chief financial officer and executive vice president of operations. Earlier in his career, from 1981 to 1994, Mr. Perry served as an attorney at Cooley LLP, and was a partner of the firm from 1987 to 1994. Mr. Perry currently serves on the board of directors of Nvidia Corporation, a visual computing company, and MyoKardia, Inc., a biopharmaceutical company. Mr. Perry received a B.A. in history from the University of California, Berkeley and a J.D. from the University of California, Davis. Mr. Perry’s qualifications to serve on our Board of Directors include more than 30 years of experience serving in professional and management positions in the biotechnology industry.
Board of Directors'Directors’ Role in Risk Management
Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including but not limited to risks relating to our financial condition, developmentcommercialization activities, research and commercializationdevelopment activities, clinical and
regulatory matters, operations and intellectual property. Management is responsible for the day-to-day management of risks we face, while our Board of Directors, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, our Board of Directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed.
The role of our Board of Directors in overseeing the management of our risks is conducted primarily through committees of the Board of Directors, as disclosed in the descriptions of each of the committees below and in the charters of each of the committees. For example, the Compensation Committee assesses risks created by the incentives inherent in our compensation programs, policies and practices. The full Board of Directors (or the appropriate board committee in the case of risks that are under the purview of a particular committee) discusses with management our major risk exposures, their potential impact on our company, and the steps we take to manage them. When a board committee is responsible for evaluating and overseeing the management of a particular risk or risks, the chairmanchair of the relevant committee reports on the discussion to the full Board of Directors during the committee reports portion of the next board meeting. This enables our Board of Directors and its committees to coordinate the risk oversight role, particularly with respect to risk interrelationships.
Compensation Risk Assessment
We believe that although a portion of the compensation provided to our executive officers and other employees is performance-based, our executive compensation program does not encourage excessive or unnecessary risk taking. This is primarily due to the fact that our compensation programs are designed to encourage our executive officers and other employees to remain focused on both short-term and long-term strategic goals, in particular in connection with our pay-for-performance compensation philosophy. As a result, we do not believe that our compensation programs are reasonably likely to have a material adverse effect on the Company.
Board of Directors and Committees of the Board
During 2015,2020, the Board of Directors held a total of sevenfour meetings. All directors attended at least 75% of the totalaggregate of the number of Board meetings and all directors attended at least 75% of the total number of meetings of Board committees on which theeach such director served during the time heeach such director served on the Board or such committees.
Our Board of Directors has determined that all of our directors, except for Dr. Love, are independent, as determined in accordance with the rules of The NASDAQNasdaq Stock Market (“NASDAQ”)LLC, or NASDAQ, and the SEC. In making such independence determination, the Board of Directors considered the relationships that each non-employee director has with us and all other facts and circumstances that the Board of Directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director. In considering the independence of the directors listed above, our Board of Directors also consideredconsiders the association, if any, of our directors with the holders of more than 5% of our common stock. There are no family relationships among any of our directors or executive officers.
The Board of Directors has a standing Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee and Research and Development Committee. Each of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee is composed entirely of independent directors in accordance with current NASDAQ listing standards. Furthermore, our Audit Committee meets the enhanced independence standards established by the Sarbanes-Oxley Act of 2002 and related rulemaking of the SEC. CopiesThe authority and responsibility of each of these committees are summarized below, and more detailed descriptions of their functions are included in their written charters, which are available along with our corporate governance guidelines on our website at www.gbt.com.
Pursuant to their charters, each of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee chartersis authorized to access, at our expense, such internal and our corporate governance guidelinesexternal resources as the particular committee deems necessary or appropriate to fulfill its defined responsibilities. Each committee has sole authority to approve fees, costs and other terms of engagement of such outside resources.
The Board of Directors also has a standing Research and Development Committee and Commercial Committee, which are available, freeadvisory committees.
Global Blood Therapeutics, Inc. ï2021 Proxy Statement11
The following chart provides membership as of charge, on our website at http://www.globalbloodtx.com, underApril 28, 2021, for each of the “Investors & Media/Corporate Governance” link.Board of Directors’ standing committees:
| | | | | | | | | | |
| | | | | |
| | Audit
Committee | | Compensation
Committee | | Nominating
and
Corporate
Governance
Committee | | Research
and
Development
Committee
(advisory) | | Commercial Committee (advisory) |
| | | | | |
Willie L. Brown, Jr. | | | | | | C | | | | |
| | | | | |
Scott W. Morrison | | C | | ✔ | | | | | | ✔ |
| | | | | |
Deval L. Patrick | | ✔ | | | | ✔ | | | | |
| | | | | |
Mark L. Perry | | ✔ | | ✔ | | | | | | ✔ |
| | | | | |
Glenn F. Pierce, M.D., Ph.D. | | | | | | ✔ | | C | | |
| | | | | |
Philip A. Pizzo, M.D. | | | | | | ✔ | | ✔ | | |
| | | | | |
Dawn A. Svoronos | | | | | | | | | | C |
| | | | | |
Alexis A. Thompson, M.D., M.P.H. | | | | | | | | ✔ | | |
| | | | | |
Wendy L. Yarno | | | | C | | | | | | ✔ |
✔ - Committee member C - Committee chair
| | |
| |
Audit Committee | | The Audit Committee’s responsibilities include: |
| |
Chair: Mr. Morrison Members: Mr. Patrick Mr. Perry | | • appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm; • pre-approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm; • reviewing the audit plan with our independent registered public accounting firm and members of management responsible for preparing our financial statements; • reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us; • coordinating the oversight and reviewing the adequacy of our internal control over financial reporting and performance of our internal audit function, if any; • establishing policies and procedures for the receipt and retention of accounting-related complaints and concerns; • recommending, based on the Audit Committee’s review and discussions with management and our independent registered public accounting firm, whether our audited financial statements shall be included in our Annual Report on Form 10-K; • monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to our financial statements and accounting matters; • preparing the Audit Committee report required by SEC rules to be included in our annual proxy statement; • reviewing all related person transactions for potential conflict of interest situations and approving all such transactions; • reviewing quarterly earnings releases; • overseeing our compliance with legal and regulatory requirements; • discussing guidelines and policies governing risk assessment matters, and monitoring and overseeing matters related to cybersecurity risks affecting the Company; and • periodically conducting a performance evaluation of the Audit Committee and reporting to the Board on the results of such evaluation. |
122021 Proxy Statementï Global Blood Therapeutics, Inc.
Audit Committee
Mr.During 2020, Messrs. Morrison, Mr. Patrick and Mr. Perry currently serveand Ms. Svoronos served on the Audit Committee, which is chaired bywith Mr. Morrison.Patrick being appointed as a member of the Audit Committee in June 2020, and the Committee held four meetings. Our Board of Directors has determined that each of Mr.Messrs. Morrison, Patrick and Mr. Perry is an “Audit Committee financial expert,” as defined under the applicable rules of the SEC. The Audit Committee's responsibilities include:
appointing, approving the compensationIn April 2021, Ms. Svoronos stepped down as a member of and assessing the independence of our independent registered public accounting firm;
pre-approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;
reviewing the audit plan with our independent registered public accounting firm and members of management responsible for preparing our financial statements;
reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us;
coordinating the oversight and reviewing the adequacy of our internal control over financial reporting;
establishing policies and procedures for the receipt and retention of accounting-related complaints and concerns;
recommending, based upon the Audit Committee's review and discussions with management and our independent registered public accounting firm, whether our audited financial statements shall be included in our Annual Report on Form 10-K;
monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to our financial statements and accounting matters;
preparing the Audit Committee, report required by SEC rulessubsequent to be included in our annual proxy statement;
reviewing all related person transactions for potential conflict of interest situations and approving all such transactions; and
reviewing quarterly earnings releases and scripts.
During 2015, Mr. Patrick, Mr. Perry and Mr. Starr served on the Audit Committee and the Committee held two meetings.
Compensation Committee
Mr. Perry, Mr. Bonney and Mr. Patrick currently serve on the Compensation Committee, which is chaired by Mr. Perry. The Compensation Committee's responsibilities include:
annually reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer;
evaluating the performance of our Chief Executive Officer in light of such corporate goals and objectives and determining the compensation of our Chief Executive Officer;
reviewing and approving the compensation of our other officers;
reviewing and establishing our overall management compensation, philosophy and policy;
overseeing and administering our compensation and similar plans;
evaluating and assessing potential and current compensation advisors in accordance with the independence standards identified in the applicable NASDAQ Stock Market rules;
retaining and approving the compensation of any compensation advisors;
reviewing and approving our policies and procedures for the grant of equity-based awards;
reviewing and making recommendations to our Board of Directors with respect to director compensation;
preparing the compensation committee report required by the SEC rules to beReport included in our annual proxy statement; and
reviewing and discussing with management the compensation discussion and analysis to be included in our annual proxy statement or Annual Report on Form 10-K.
below. | | |
| |
Compensation Committee | | The Compensation Committee’s responsibilities include: |
| |
Chair: Ms. Yarno Members: Mr. Morrison Mr. Perry | | • reviewing and approving corporate goals relevant to the compensation of our Chief Executive Officer; • evaluating the performance of our Chief Executive Officer in light of such corporate goals and determining the compensation of our Chief Executive Officer; • reviewing and approving any peer group of companies used to inform the Company’s evaluation of compensation for its employees and directors; • reviewing and approving the compensation of our other executive officers; • reviewing and establishing our overall management compensation, philosophy, policy and practices; • reviewing, overseeing, and administering our compensation and similar plans; • evaluating and assessing potential and current compensation advisors in accordance with the independence standards identified in the applicable NASDAQ Stock Market rules; • retaining and approving the compensation of any compensation advisors; • reviewing and recommending to our Board of Directors our policies and procedures for the grant of equity-based awards; • reviewing and making recommendations to our Board of Directors with respect to non-employee director compensation; • reviewing and discussing with the Board of Directors the corporate succession plans for the Chief Executive Officer and other executive officers; • preparing the compensation committee report required by the SEC rules to be included in our annual proxy statement and Annual Report on Form 10-K; • reviewing and discussing with management the compensation discussion and analysis to be included in our annual proxy statement or Annual Report on Form 10-K; and • periodically conducting a performance evaluation of the Compensation Committee and reporting to the Board on the results of such evaluation. |
Pursuant to its charter, the Compensation Committee has the authority to retainengage compensation consultants to assist in its evaluation of executive and non-employeedirector compensation. TheFor 2020, the Compensation Committee engaged Compensia, Inc. (“Compensia”) and Arnosti, Inc. ("Arnosti"), a national compensation consulting firm, or Compensia, as a compensation consultants in 2015. The Compensation Committee instructed the consultantsconsultant to, among other things, develop a peer group of companies to assess the competitiveness of theour executive, equity and Board of Directorsnon-employee director compensation programs, advise on our non-employee director compensation and to review the Company'sour equity compensation program and broader equity practices. Our Compensation Committee plans to retainengage Compensia or one or more other third-party compensation advisors to provide similar information and advice in future years for consideration in establishing overall compensation for the Company’sour executives andnon-employee directors. We do not believe the retention of, and the work performed by, Compensia and Arnosti creates any conflict of interest.
See “Executive Compensation-Compensation Discussion and Analysis-Governance of Executive Compensation Program—Role of Compensation Consultant” below for more information.During 2015, Dr. Homcy, Mr. Patrick2020, Messrs. Perry and Mr. PerryMorrison and Ms. Yarno served on the Compensation Committee, and the Committee held one meeting.five meetings.
Global Blood Therapeutics, Inc. ï2021 Proxy Statement13
Nominating and Corporate Governance Committee
Mr. Brown, Mr. Bonney and Dr. Pizzo currently serve on the Nominating and Corporate Governance Committee, which is chaired by Mr. Brown. The Nominating and Corporate Governance Committee's responsibilities include:
developing and recommending to the Board of Directors criteria for board and committee membership;
establishing procedures for identifying and evaluating Board of Director candidates, including nominees recommended by stockholders;
reviewing the size and composition of the Board of Directors to ensure that it is composed of members containing the appropriate skills and expertise to advise us;
identifying individuals qualified to become members of the Board of Directors;
recommending to the Board of Directors the persons to be nominated for election as directors and to each of the Board's committees;
developing and recommending to the Board of Directors a code of business conduct and ethics and a set of corporate governance guidelines;
developing a mechanism by which violations of the code of business conduct and ethics can be reported in a confidential manner;
overseeing the evaluation of the Board of Directors and its committees; and
reviewing and discussing with the Board of Directors the corporate succession plans for the Chief Executive Officer and other executive officers.
| | |
| |
Nominating and Corporate Governance Committee | | The Nominating and Corporate Governance Committee’s responsibilities
include: |
| |
Chair: Mr. Brown Members: Mr. Patrick Dr. Pierce Dr. Pizzo | | • developing and recommending to the Board of Directors criteria for board and committee membership; • establishing procedures for identifying and evaluating Board of Director candidates, including nominees recommended by stockholders; • reviewing the size and composition of the Board of Directors to ensure that it is composed of members containing the appropriate skills and expertise to advise us; • identifying individuals qualified to become members of the Board of Directors; • recommending to the Board of Directors the persons to be nominated for election as directors and to each of the Board’s committees; • developing and recommending to the Board of Directors a code of business conduct and ethics and a set of corporate governance guidelines; • developing a mechanism by which violations of the code of business conduct and ethics can be reported in a confidential manner; • overseeing the evaluation of the Board of Directors and its committees; • reviewing and discussing with the Board of Directors the corporate succession plans for directors; and • periodically conducting a performance evaluation of the Nominating and Corporate Governance Committee and reporting to the Board on the results of such evaluation. |
During 2015, Mr.2020, Messrs. Brown and Dr. HomcyPatrick, Drs. Pierce and Pizzo and Ms. Yarno served on the Nominating and Corporate Governance Committee, and the Committee did not hold anyheld two meetings.
Research In June 2020, Mr. Patrick and Development Committee
Our Board of Directors formed a Research and Development Committee in March 2016. Dr. Pierce Dr. Homcy and Dr. Pizzo currently serve on the Research and Development Committee, which is chaired by Dr. Pierce. Our Board of Directors intends to adopt a written charter setting forth the duties and responsibilitieswere appointed as members of the ResearchNominating and DevelopmentCorporate Governance Committee, which will be made available on our website following adoption.
and Ms. Yarno was removed as a member of such committee. | | |
| |
Research and Development Committee (Advisory) | | |
| |
Chair: Dr. Pierce Members: Dr. Pizzo Dr. Thompson | | Our Board of Directors formed a Research and Development Committee in March 2016. The Research and Development Committee’s responsibilities include providing advice and support related to our research and development programs, strategy and goals. Drs. Pierce, Pizzo and Thompson serve on the Research and Development Committee, which is chaired by Dr. Pierce. |
| | |
| |
Commercial Committee (Advisory) | | |
| |
Chair: Ms. Svoronos Members: Mr. Morrison Mr. Perry Ms. Yarno | | Our Board of Directors formed a Commercial Committee in December 2018. The Commercial Committee’s responsibilities include providing advice and support related to our potential and actual commercialization of any products, including our strategy and goals from pre-launch planning through any approval, launch and later phases of the product lifecycle. Messrs. Morrison and Perry and Mses. Svoronos and Yarno serve on the Commercial Committee, which is chaired by Ms. Svoronos. |
Board Leadership
We do not currently have a ChairmanChair of the Board, but we have appointed Mark L.Mr. Perry to serve as our lead independent
director. We believe that the appointment of a lead independent director allows our Chief Executive Officer to focus on our
day-to-day business, while allowing the lead independent director to lead our Board of Directors in its fundamental role of providing advice to and independent oversight of management. Our Board of Directors recognizes the time, effort and energy that the Chief Executive Officer is required to devote to his position in the current business environment, as well as the commitment required to serve as our lead independent director, particularly as our Board of
Directors'Directors’ oversight responsibilities continue to grow.
142021 Proxy Statementï Global Blood Therapeutics, Inc.
While our Bylaws and corporate governance guidelines do not require that we appoint a separate ChairmanChair of the Board or lead independent director and Chief Executive Officer, our Board of Directors believes that having a Chief Executive Officer and a separate designated lead independent director is the appropriate leadership structure for us at this time and demonstrates our commitment to good corporate governance. Our separated lead independent director and Chief Executive Officer positions are augmented by the independence of eightnine of our nine10 directors, and our entirely independent Board committees that provide appropriate oversight in the areas described above. At executive sessions of independent directors, these directors speak candidly on any matter of interest, without the Chief Executive Officer or other executives present. The independent directors met twofour times in 20152020 without management present. We believe this structure provides consistent and effective oversight of our management and the Company.
Annual Performance Evaluations; Assessment of Charters; Director Education
Our Board of Directors, as well as each of its standing committees, conducts an annual self-evaluation, which includes a review of its performance and, in the case of each of the committees, an assessment of the adequacy and appropriateness of its charter. The Nominating and Corporate Governance Committee is responsible for overseeing this evaluation process, evaluating all standing committees and their charters and recommending to our Board of Directors any changes to our Board and the authority, charters, compositions and chairs of such committees.
Each director is expected to maintain the necessary level of expertise to perform his or her responsibilities as a director. Our Board of Directors regularly discusses recent developments related to corporate governance, legal and regulatory compliance, disclosure obligations or industry-specific matters. In addition, we encourage our directors to participate in outside continuing education programs to assist them in maintaining such expertise and may, from time to time and depending on the circumstances, pay for all or a portion of such outside continuing education programs.
Director Nominations
The director qualifications developed to date focus on what our Board believes to be essential competencies to effectively serve on the Board of Directors. The Nominating and Corporate Governance Committee must reassessreassesses such criteria from time to time and submitsubmits any proposed changes to the Board of Directors for approval. Presently, at a minimum, the Nominating and Corporate Governance Committee must be satisfied that each nominee it recommends (i) has experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing, (ii) is highly accomplished in his or her respective field, with superior credentials and recognition, (iii) is well regarded in the community and has a long-term reputation for high ethicalthe highest personal and moral standards,professional integrity, (iv) has sufficient time and availability to devote to the affairs of the Company, particularly in light of the number of boards of directors on which such nominee may serve, and (v) to the extent such nominee serves or has previously served on other boards, the nominee has a demonstrated history of actively contributing at board meetings.
meetings, and (vi) will be effective, collectively with other members of and/or candidates for our Board of Directors, in serving the long-term interests of our stockholders.In addition to those minimum qualifications, the Nominating and Corporate Governance Committee recommends that our Board of Directors select persons for nomination to help ensure that:
a majority of our Board is “independent” in accordance with NASDAQ standards;
each of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee be comprised entirely of independent directors; and
at least one member of the Audit Committee shall have the experience, education and other qualifications necessary to qualify as an “Audit Committee financial expert” as defined by the rules of the SEC.
In addition to other standards the Nominating and Corporate Governance Committee may deem appropriate from time to time for the overall structure and compensation of the Board of Directors, the Nominating and Corporate Governance Committee may consider the following factors when recommending that our Board select persons for nomination:
whether a nominee has direct experience in the biotechnology or pharmaceuticals industry or in other fields relevant to the Company’sour operations; and
whether the nominee, if elected, assists in achieving a mix of Board members that represents a diversity of background and experience.
Although we have no formal policy regarding board diversity, we and our Board of Directors believe that corporate board diversity, including gender, racial and ethnic diversity, can provide a more effective and dynamic Board of Directors that can better mitigate risk and enhance long-term performance for stockholders. Accordingly, the Nominating and Corporate Governance Committee may considerconsiders whether nominees assist in achieving a mix of Board members that represents a diversity of background and experience, which is not only limited to race, gender or national origin, we have no formal policy regarding board diversity.experience.
Global Blood Therapeutics, Inc. ï2021 Proxy Statement15
The Nominating and Corporate Governance Committee adheres to the following process for identifying and evaluating nominees for the Board of Directors. First, it solicits recommendations for nominees from non-management directors, our Chief Executive Officer, other executive officers, third-party search firms or any other source it deems appropriate. The Nominating and Corporate Governance Committee then reviews and evaluates the qualifications of proposed nominees and conducts inquiries it deems appropriate; all proposed nominees are evaluated in the same manner, regardless of who initially recommended such nominee. In
reviewing and evaluating proposed nominees, the Nominating and Corporate Governance Committee may consider, in addition to the minimum qualifications and other criteria for Board membership approved by our Board from time to time, all facts and circumstances that it deems appropriate or advisable, including, among other things, the skills of the proposed nominee, his or her depth and breadth of business experience or other background characteristics, his or her independence and the needs of the Board.
If the Nominating and Corporate Governance Committee decides to retain a third-party search firm to identify proposed nominees, it has sole authority to retain and terminate such firm and to approve any such firm'sfirm’s fees and other retention terms.
Each nominee for election as director at the 2016 Annual Meeting is recommended by the Nominating and Corporate Governance Committee and is presently a director and stands for re-election by the stockholders. From time to time, the Companywe may pay fees to third-party search firms to assist in identifying and evaluating potential nominees, although no such fees have been paid in connection with nominations to be acted upon at the 2016 Annual Meeting.
Pursuant to our Bylaws, stockholders who wish to nominate persons for election to the Board of Directors at an annual meeting must be a stockholder of record at the time of giving the notice, entitled to vote at the meeting, present (in person or by proxy) at the meeting and must comply with the notice procedures in our Bylaws. A stockholder'sstockholder’s notice of nomination to be made at an annual meeting must be delivered to our principal executive offices not less than 90 days nor more than 120 days before the anniversary date of the immediately preceding annual meeting. However, if an annual meeting is more than 30 days before or more than 60 days after such anniversary date, the notice must be delivered no later than the later of the 90th day prior to such annual meeting or the 10th day following the day on which the first public announcement of the date of such annual meeting was made. A stockholder'sstockholder’s notice of nomination may not be made at a special meeting unless such special meeting is held in lieu of an annual meeting. The stockholder'sstockholder’s notice must include the following information for the person making the nomination:
the class and number of shares of the Company owned beneficially or of record;
disclosure regarding any derivative, swap or other transactions which give the nominating person economic risk similar to ownership of shares of the Company or provide the opportunity to profit from an increase in the price of value of shares of the Company;
any proxy (other than a revocable proxy given in response to a public proxy solicitation made pursuant to, and in accordance with, the Exchange Act), agreement, arrangement, understanding or relationship that confers a right to vote any shares of the Company;
any agreement, arrangement, understanding or relationship engaged in for the purpose of acquiring, holding, disposing or voting of any shares of any class or series of capital stock of the Company;
any rights to dividends or other distributions on the shares that are separate from the underlying shares;
any performance-related fees that the nominating person is entitled to based on any increase or decrease in the value of any shares of the Company;
a description of all agreements, arrangements or understandings by and between the proposing stockholder and another person relating to the proposed business (including an identification of each party to such agreement, arrangement or understanding and the names, addresses and class and number of shares owned beneficially or of record of other stockholders known by the proposing stockholder support such proposed business);
a statement whether or not the proposing stockholder will deliver a proxy statement and form of proxy to holders of, in the case of a business proposal, at least the percentage of voting power of all shares of capital stock required to approve the proposal or, in the case of director nominations, at least the percentage of voting power of all of the shares of capital stock reasonably believed by the proposing stockholder to be sufficient to elect the nominee; and
any other information relating to the nominating person that would be required to be disclosed in a proxy statement filed with the SEC.
With respect to proposed director nominees, the stockholder'sstockholder’s notice must include all information required to be disclosed in a proxy statement in connection with a contested election of directors or otherwise required pursuant to Regulation 14A under the Exchange Act (including such person'sperson’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected).
162021 Proxy Statementï Global Blood Therapeutics, Inc.
For matters other than the election of directors, the stockholder'sstockholder’s notice must also include a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of the stockholder(s) proposing the business.
The stockholder'sstockholder’s notice must be updated and supplemented, if necessary, so that the information required to be provided in the notice is true and correct as of the record date for the meeting and as of the date that is ten10 business days prior to the meeting.
The Board of Directors, a designated committee thereof or the chairman of the meeting will determine if the procedures in our Bylaws have been followed, and if not, declare that the proposal or nomination be disregarded. The nominee must be willing to provide any other information reasonably requested by the Nominating and Corporate Governance Committee in connection with its evaluation of the nominee'snominee’s independence. There have been no material changes to the process by which stockholders may recommend nominees to our Board of Directors.
Stockholder Communications with the Board of Directors
Stockholders may send correspondence to the Board of Directors c/o the Lead Directorlead independent director of the Board at our principal executive offices at the address set forth above. The CompanyWe will forward all correspondence addressed to the Board or any individual Board member. Stockholders may also communicate online with our Board of Directors as a group by accessing our website (www.globalbloodtx.com)at www.gbt.com and selecting “IR Contact” under the “Investors & Media “Investors tab.
Director Attendance at Annual Meetings
Directors are encouraged to attend our annual meetings of stockholders, and eight of our then nine directors attended the 2020 Annual Meeting.
Meeting of Stockholders.Compensation Committee Interlocks and Insider Participation
None of the members of the Compensation Committee is, or has at any time during the past fiscal year been, an officer or employee of the Company or had any relationship requiring disclosure under Item 404 of Regulation S-K. None of the members of the Compensation Committee has formerly been an officer of the Company. None of our executive officers serve, or in the past fiscal year, have served as a member of the Board of Directors or Compensation Committee of any other entity that has one or more executive officers serving as a member of our Board of Directors or Compensation Committee.
Director Compensation
In July 2015,Environmental, Social and Governance Practices
Our mission is to discover, develop and deliver life-changing treatments for people living with grievous blood-based disorders, starting with sickle cell disease. We view our environmental, social and governance practices as important pillars that will help us achieve our mission and contribute to sustainable long-term performance, including recruiting and retaining the best talent.
Environmental
We seek to build a sustainable, vibrant company to develop medicines with optimized efficacy and safety for patients globally. We recognize that the sustainability of our company is linked to our ability to understand and engage all our stakeholders in a consistent and in meaningful manner. Starting with our Board of Directors and our leadership team, we are committed to long-term value driven by the pillars of governance, social responsibility, and integrity across all we do, including employee engagement, research and development, operations, commercialization and access to medicines for patients. Our efforts to help preserve the environment include, among other things, moving to our new headquarters location with pending LEED Silver certification (with efforts underway to achieve LEED Gold status); utilizing technology to reduce energy and water consumption; reducing, recycling and reusing our resources when practicable; promoting employee commuting programs; and partnering with third-party organizations for the ethical treatment of animals in research.
Social—Diversity, Equity & Inclusion
We have a values-driven culture that starts with our senior management team. Since our founding, we have recognized that having a more diverse, equitable and inclusive environment leads to increased performance, better decision making, increased productivity, and greater motivation. As we believe our efforts in this area are important to our success, we are pleased to be one of only 380 companies, including 22 in healthcare, included in the 2021 Bloomberg Gender Equality Index, which measures gender equality across five pillars: female leadership and talent pipeline, equal pay and gender pay parity, inclusive culture, sexual harassment policies, and pro-women brand.
Global Blood Therapeutics, Inc. ï2021 Proxy Statement17
Our team represents a broad range of cultural and professional backgrounds that enrich our culture and drive our future growth and success:
| | | | |
| | |
| GBT Employee Population as of December 31, 2020 | | Female | | People of Color* |
| | |
Overall Population | | 58% | | 59% |
| | |
Senior Management Team | | 33% | | 22% |
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Executive Director and Above (excluding Senior Management Team) | | 40% | | 60% |
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Associate Director—Senior Director | | 54% | | 53% |
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Senior Manager & Below | | 66% | | 65% |
| * | All U.S. Equal Employment Opportunity Commission’s categories of race other than white (not Hispanic or Latino). |
We are committed to fostering workplace development, diversity and inclusion at our company and more broadly across the biotechnology industry. We are also dedicated to being at the forefront of efforts to develop a diverse and talented global workforce, and doing our part to foster diversity and inclusion among our employees and vendors. As part of these efforts, we have established employee-resource groups, or ERGs, to build awareness, grow personally and professionally, and give back to communities, with our first two ERGs focused on social justice issues and advancement for women.
We are actively involved in supporting our local and patient communities, which have been underserved, including through volunteering and charitable donation initiatives. Due in part to the COVID-19 pandemic, 2020 was an extraordinarily difficult year for the sickle cell disease, or SCD, patient community, and we are proud to have helped in a variety of ways. This included our total funding to SCD organizations in 2020 of more than $2 million, including more than $350,000 in contributions from GBT, our board of directors and our employees. In addition, we also continue to support non-profit organizations through our ongoing Access to Excellent Care for Sickle Cell Patients (ACCEL) Grant Program, which we founded in February 2019 to provide grant funding to accelerate the development of sustainable access to care programs for people with SCD.
We believe that a critical component of workplace diversity is our commitment to pay equity. To that end, in 2020, we engaged Radford, part of the rewards practice at Aon plc, to conduct a detailed independent assessment of the impact of gender and ethnic diversity on our pay practices for the first time. This assessment revealed no evidence of discrepancies in our pay practices based on gender and ethnicity. Further, the results of the assessment showed that differences in pay among our employees were attributed to factors such as performance, job level and experience, which are considered “bona fide” factors. We intend to repeat this assessment on a regular basis.
Governance
One of our core values is accountability, and we commit to operating with truthfulness and transparency in accordance with the highest ethical and corporate governance standards. To this end, we maintain a Code of Business Conduct and Ethics and hold ourselves accountable to it in all we do. All of our employees across our operations are provided with training and reference materials to reinforce this commitment to integrity and ethics in our business. Our policies are clearly defined and include guidance on topics including, but not limited to, conflicts of interest; compliance with laws, rules and regulations; confidentiality; fair dealing; antitrust compliance; accuracy of records; corporate disclosure; improper payments; and interactions with healthcare professionals and government employees.
Our Board of Directors, along with the Audit, Compensation and Nominating and Corporate Governance committees, conducts an annual governance review, which includes review, benchmarking and revision of our significant corporate and compensation policies. In addition to our Code of Business Conduct and Ethics mentioned above, these policies include, among others, our Anti-Bribery and Anti-Corruption Policy, our Corporate Governance Guidelines, and our Insider Trading Policy. This periodic review also encompasses the structure and governance of our Board of Directors, voting standards for directors and other matters, and review of the Company’s defensive profile. The Nominating and Corporate Governance Committee is responsible for overseeing this governance review process, and each committee evaluates policies within its purview and recommends changes to our Board of Directors.
182021 Proxy Statementï Global Blood Therapeutics, Inc.
Stock Ownership Policy
In March 2020, we adopted a stock ownership policy for our non-employee directors, which requires each director compensation policy, which became effective upon the completionto acquire and hold a number of shares of our common stock equal in value to at least three times his or her applicable annual cash retainer for regular service on our Board of Directors, excluding any annual cash retainers paid for committee service, until such director’s service on the Board of Directors ceases. We only count directly and beneficially owned shares, including, with respect to non-employee directors, 50% of shares underlying vested and unexercised in-the-money stock options. Each non-employee director has until the later of April 1, 2025, or the Initial Determination Date, or the April 1st in the year that is the fifth anniversary of his or her initial public offeringelection to our Board of Directors, to attain the required ownership level. Once a director satisfies his or her stock ownership requirement, the director must continue to satisfy such stock ownership requirement as assessed on each April 1st thereafter, or Determination Date. If a director fails to satisfy such stock ownership requirement as of any Determination Date (including the Initial Determination Date), then such director shall be required to come into compliance with his or her applicable stock ownership requirement within two years following the Determination Date on which he or she failed to satisfy such stock ownership requirement. As of April 1, 2021, eight of our 10 non-employee directors met their stock ownership requirement, and the remaining non-employee directors have until the later of the Initial Determination Date or the April 1st in August 2015,the year that is the fifth anniversary of his or her initial election to our Board of Directors to attain the required ownership level.
Global Blood Therapeutics, Inc. ï2021 Proxy Statement19
NON-EMPLOYEE DIRECTOR COMPENSATION
The Non-Employee Director Compensation Policy adopted by our Board of Directors is designed to provide a total compensation package, including cash, stock options and restricted stock units, or RSUs, that enablesis competitive in the market to enable us to attract and retain, on a long-term basis, high-caliber non-employee directors. Under this policy,
The Compensation Committee and our Board of Directors review non-employee director compensation and the Non-Employee Director Compensation Policy, including an assessment compared to peer companies, on an annual basis. In March 2020, our Board approved certain adjustments to our Director Compensation Policy upon the recommendation of our Compensation Committee in consultation with the Compensation Committee’s compensation consultant, Compensia. As a result, the annual cash retainer for Board membership increased from $40,000 to $45,000 and the additional annual cash retainer for lead independent director or non-executive Chairperson was increased from $20,000 to $25,000 in order to align cash compensation with the 50th percentile of our peers. The Non-Employee Director Compensation Policy, as amended, provides that all non-employee directors are paidwould receive cash compensation for service on theour Board of Directors and committees of the Board of Directors as set forth below, prorated based on days of service during a calendar year.
|
| | | |
| Board of Directors: | | Annual Retainer |
| All non-employee members | | $ | 35,000 |
| | | Additional Annual Retainer |
| Audit Committee: | | |
|
| Chairperson | | $ | 15,000 |
| Non-Chairperson members | | $ | 7,500 |
| Compensation Committee: | | |
|
| Chairperson | | $ | 10,000 |
| Non-Chairperson members | | $ | 5,000 |
|
| | | |
| Nominating and Corporate Governance Committee: | | |
|
| Chairperson | | $ | 8,000 |
| Non-Chairperson members | | $ | 4,000 |
| | | | | |
| |
Board of Directors: | | Annual Retainer |
| |
All non-employee members | | $45,000 |
| | | | | |
| |
| | Additional Annual
Retainer |
| |
Lead Independent Director or Non-Employee Chairperson of the Board of Directors: | | $25,000 |
| |
Audit Committee: | | |
| |
Chairperson | | $20,000 |
| |
Non-Chairperson members | | $10,000 |
| |
Compensation Committee: | | |
| |
Chairperson | | $15,000 |
| |
Non-Chairperson members | | $ 7,500 |
| |
Nominating and Corporate Governance Committee: | | |
| |
Chairperson | | $10,000 |
| |
Non-Chairperson members | | $ 5,000 |
| |
Research and Development Committee: | | |
| |
Chairperson | | $15,000 |
| |
Non-Chairperson members | | $ 7,500 |
| |
Commercial Committee: | | |
| |
Chairperson | | $15,000 |
| |
Non-Chairperson members | | $ 7,500 |
In addition underto the policy,cash retainer amounts described above, the Non-Employee Director Compensation Policy also provides that each new non-employee director who is initially appointed or elected to our Board of Directors will receive a stock option and RSU grant. Prior to the March 2020 amendment, the Non-Employee Director Compensation Policy provided for an option grant to purchase up to 30,00015,000 shares of our common stock whichand an RSU grant for 9,600 RSUs. As amended in March 2020, the Non-Employee Director Compensation Policy now provides for an option to purchase shares of our common stock with an aggregate value of $415,000, subject to a maximum of 11,200 shares, and an RSU grant for an aggregate value of $415,000, subject to a maximum of 7,200 RSUs, in order to align equity compensation with the 75th percentile of our peers but also to include a maximum share limit in the event of extraordinary market fluctuations. The initial grant of stock options will vest in equal monthly installments during the 36 months following the grant date, subject to the director'sdirector’s continued service on our Board of Directors. The initial grant of RSUs will vest in equal annual installments during the three years following the grant date, subject to the director’s continued service on our Board of Directors.
Thereafter, on the date of each annual meeting of stockholders, each continuing non-employee director will be eligible to receive an annual stock option grantand RSU grant. Prior to the March 2020 amendment, the Non-Employee Director
202021 Proxy Statementï Global Blood Therapeutics, Inc.
Compensation Policy provided for an option to purchase up to 15,0007,500 shares of our common stock whichand an RSU grant for 4,800 RSUs. As amended in March 2020, the Non-Employee Director Compensation Policy now provides for an option to purchase shares of our common stock with an aggregate value of $207,500, subject to a maximum of 5,600 shares, and an RSU grant for an aggregate value of $207,500, subject to a maximum of 3,600 RSUs, in order to align equity compensation with the 75th percentile of our peers but also to include a maximum share limit in the event of extraordinary market fluctuations. The annual grant of stock options will vest in equal monthly installments during the 12 months1/12th on each month following the grant date for 11 months and the remaining 1/12th on the earlier of (i) the one-year anniversary of the grant date or (ii) our next annual meeting of stockholders, and such annual grant of RSUs will vest on the earlier of (A) the one-year anniversary of the grant date or (B) our next annual meeting of stockholders, in each case subject to the director’s continued service on our Board of Directors. All stock options granted to ourDirectors through each applicable vesting date. In addition, as amended in March 2020, the Non-Employee Director Compensation Policy now provides that if a non-employee directors pursuant to this policy are subject to full acceleration of vesting upon the consummation of a sale event. Our non-employee directors may also be granted such additional stock options in such amounts and on such dates asdirector joins our Board of Directors may recommend. Allon a date other than our annual meeting of stockholders, then such non-employee director will be granted a pro-rata portion of the annual stock option and RSU grant based on the time between the non-employee director’s appointment and our next annual meeting of stockholders in order to align with market practice.
For awards of restricted stock or RSUs is denominated in dollars, the number of shares subject to the award will be determined by dividing the dollar value by the average closing market price on the NASDAQ Global Market of a share of our common stock over the trailing 20-trading day period ending on the trading day immediately preceding the grant date. For awards of stock options denominated by reference to a fair value calculated under FASB ASC Topic 718, the number of shares to be subject to such stock option will be determined based on such fair value. In addition, all of the foregoing stock options will be granted with ana per share exercise price equal to the fair market value of a share of our common stock on the date of grant, and will be exercisable (to the extent vested) for up to one year following cessation of the director’s service on our Board of Directors, so long as the director wasis not removed for cause.
All stock options and RSUs granted to our non-employee directors pursuant to the Non-Employee Director Compensation Policy are subject to full acceleration of vesting upon the consummation of a “Sale Event,” as defined in the 2015 Stock Option and Incentive Plan, as amended from time to time, or 2015 Plan. Our non-employee directors could also be granted such additional stock options and RSUs in such amounts and on such dates as our Board of Directors recommended.
We have also agreed to reimburse all reasonable out-of-pocket expenses incurred by non-employee directors in attending Board and committee meetings.
2020 Director Compensation Table—2015
TableThe following table below sets forth information with respect to the compensation earnedreceived by our non-employee directors during the fiscal year ended December 31, 2015.2020. Dr. Love does not receive compensation for service on the Board of Directors and the compensation paid to Dr. Love as an employee of the Company is set forth under the heading “Compensation of Executive Officers—“Executive Compensation—2020 Summary Compensation Table” below. Directors Michael W. Bonney, Scott W. Morrison and Glenn F. Pierce each joined our Board of Directors in 2016, and accordingly, did not receive any compensation from us during the year ended December 31, 2015.
|
| | | | | | | | | | | | | | | |
| Name | Fees Earned or Paid in Cash ($) | | Stock Awards ($)(1) | | Option Awards ($)(1) | | Total ($) |
| Willie L. Brown, Jr.(2) | $ | 31,946 |
| | $ | 34,499 |
| | $ | 297,677 |
| | $ | 364,122 |
|
| Charles Homcy, M.D.(3) | $ | 16,978 |
| | $ | — |
| | $ | 185,798 |
| | $ | 202,776 |
|
| Deval L. Patrick(4) | $ | 27,432 |
| | $ | — |
| | $ | 346,574 |
| | $ | 374,006 |
|
| Mark L. Perry(5) | $ | 29,361 |
| | $ | 72,855 |
| | $ | 297,677 |
| | $ | 399,893 |
|
| Philip A. Pizzo, M.D.(6) | $ | 10,386 |
| | $ | — |
| | $ | 901,350 |
| | $ | 911,736 |
|
| Kevin P. Starr(7) | $ | 19,293 |
| | $ | — |
| | $ | 185,798 |
| | $ | 205,091 |
|
| | | | | | | | | | | | | | | | | | | | |
| | | | |
Name | | Fees Earned or Paid in Cash ($) | | Stock
Awards
($)(1) | | Option Awards ($)(2) | | Total ($) |
| | | | |
Willie L. Brown, Jr.(3) | | $53,847 | | $196,646 | | $207,478 | | $457,971 |
| | | | |
Scott W. Morrison(4) | | $78,847 | | $196,646 | | $207,478 | | $482,971 |
| | | | |
Deval L. Patrick(5) | | $34,767 | | $361,646 | | $232,432 | | $628,845 |
| | | | |
Mark L. Perry(6) | | $92,597 | | $196,646 | | $207,478 | | $496,721 |
| | | | |
Glenn F. Pierce, M.D., Ph.D.(7) | | $61,539 | | $196,646 | | $207,478 | | $465,663 |
| | | | |
Philip A. Pizzo, M.D.(8) | | $56,347 | | $196,646 | | $207,478 | | $460,471 |
| | | | |
Dawn A Svoronos(9) | | $68,847 | | $196,646 | | $207,478 | | $472,971 |
| | | | |
Wendy L Yarno(10) | | $68,847 | | $196,646 | | $207,478 | | $472,971 |
|
| | |
| (1) | | In accordance with SEC rules, this column reflects the aggregate grant date fair value of the restricted stock and option awardsand/or RSUs granted during 20152020, computed in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718, for stock-based compensation transactions (“or FASB ASC 718”).Topic 718. Assumptions used in the calculation of these amounts are included in Note 810 to our financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015.2020. These amounts do not reflect the actual economic value that may be realized by the directors upon the vesting or settlement of the restricted stock or RSUs, as applicable, or the sale of the common stock options,underlying such awards. |
| (2) | In accordance with SEC rules, this column reflects the aggregate grant date fair value of the stock option awards granted during 2020, computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 10 to our financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. These amounts do not reflect the actual economic value that may be realized by the directors upon the exercise of the stock options or the sale of the common stock underlying such stock options. |
Global Blood Therapeutics, Inc. ï2021 Proxy Statement21
(2)(3) | | Mr. Brown was appointed to the Board of Directors in January 2015 and held stock options to purchase an aggregate of 23,60081,347 shares of common stock and 21,428 shares of unvested restricted stock3,037 RSUs as of December 31, 2015.2020. |
(3)(4) | | Dr. HomcyMr. Morrison held stock options to purchase an aggregate of 15,00087,747 shares of common stock and 214,285 shares of vested restricted stock3,037 RSUs as of December 31, 2015.2020. |
(4)(5) | | Mr. Patrick was appointed toresigned from the Board of Directors in April 2015November 2019, and rejoined the Board of Directors in May 2020. In connection with rejoining the Board of Directors, Mr. Patrick received a pro-rata portion of the annual stock option and RSU grant based on the time between when he rejoined the Board of Directors and the Company’s 2020 annual meeting of stockholders. Mr. Patrick received the regular annual stock option and RSU grant, as described above, at the 2020 annual meeting of stockholders. Mr. Patrick held stock options to purchase an aggregate of 45,0285,872 shares of common stock and 3,037 RSUs as of December 31, 2015.2020. |
(5)(6) | | Mr. Perry was appointed to the Board of Directors in April 2015 and held stock options to purchase an aggregate of 23,60027,747 shares of common stock and 21,428 shares of unvested restricted stock3,037 RSUs as of December 31, 2015.2020. |
|
| (7) | | |
(6) | | Dr. Pizzo was appointed to the Board of Directors in September 2015 andPierce held stock options to purchase an aggregate of 30,00072,747 shares of common stock and 3,037 RSUs as of December 31, 2015.2020. |
(7)(8) | | Mr. Starr resigned from the Board of Directors as of February 5, 2016 andDr. Pizzo held stock options to purchase an aggregate of 15,00057,747 shares of common stock and 3,037 RSUs as of December 31, 2015.2020. |
| (9) | Ms. Svoronos held stock options to purchase an aggregate of 42,747 shares of common stock and 3,037 RSUs as of December 31, 2020. |
| (10) | Ms. Yarno held stock options to purchase an aggregate of 57,747 shares of common stock and 3,037 RSUs as of December 31, 2020. |
222021 Proxy Statementï Global Blood Therapeutics, Inc.
PROPOSAL 2
NON-BINDING, ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or Dodd-Frank Act, added Section 14A to the Securities Exchange Act of 1934, as amended, which requires that we provide our stockholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers as disclosed in this Proxy Statement, commonly known as a “Say-on-Pay” vote. Stockholders may also abstain from voting. This Say-on-Pay vote is not intended to address any specific element of the compensation of our named executive officers, but rather the overall executive compensation of our named executive officers and our overall executive compensation program, philosophy and practices as described in this Proxy Statement.
As described in this Proxy Statement, we believe the compensation of our named executive officers and our executive compensation program, philosophy and practices are appropriate, and enable us to attract, motivate and retain top-performing executive officers, including our named executive officers, while aligning the long-term interests of our executive officers with the long-term interests of our stockholders. Accordingly, we ask our stockholders to approve, on a non-binding, advisory basis, the following resolution at the Annual Meeting:
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 is hereby APPROVED.
Required Vote
The three (3) nominees receivingapproval of this advisory non-binding proposal requires the highest numberaffirmative vote of affirmative votesa majority of all the votes properly cast shall be elected as Class I directors to serve untilvoting power of the 2019shares of our common stock present virtually or by proxy at the Annual Meeting of Stockholders or until their successorsand entitled to vote thereon. Abstentions and broker non-votes will have been duly elected and qualified.
Recommendation ofno effect on this proposal.This Say-on-Pay vote is advisory; therefore, it is not binding on the Board of Directors
TheCompany, our Board of Directors
recommends thator our Compensation Committee. However, our Board of Directors and our Compensation Committee will consider the
stockholdersresult of this year’s vote
FORin reviewing and determining the
electioncompensation of
our named executive officers in the
three (3) Class I nominees listed above.future because we value the opinions of our stockholders. |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE, ON A NON-BINDING, ADVISORY BASIS, “FOR” THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS. |
Global Blood Therapeutics, Inc. ï2021 Proxy Statement23
PROPOSAL 2
3RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has appointed KPMG LLP as the Company'sour independent registered public accounting firm for 2016.2021. Representatives of KPMG LLP will attend the Annual Meeting and will have the opportunity to make a statement if they desire to do so. They will also be available to respond to appropriate questions.
The Company'sOur organizational documents do not require that the stockholders ratify the selection of KPMG LLP as the Company'sour independent registered public accounting firm, and stockholder ratification is not binding on the Company, the Board or the Audit Committee. The Company requestsWe request such ratification, however, as a matter of good corporate practice. The ratification of the selection of KPMG LLP requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting. Our Board, including our Audit Committee, values the opinions of our stockholders and, to the extent there is any significant vote against the ratification of the selection of KPMG LLP as disclosed in this Proxy Statement, we will consider our stockholders'stockholders’ concerns and evaluate what actions may be appropriate to address those concerns, although the Audit Committee, in its discretion, may still retain KPMG LLP.
The following table shows information about fees billed to the Company by KPMG LLP for the fiscal years ended December 31, 20152020, and 2014:
|
| | | | | | | | |
| Fees billed by KPMG LLP | | 2015 | | 2014 |
| Audit Fees (1) | | $ | 731,394 |
| | $ | 48,550 |
|
| Audit Related Fees | | | — |
| | | — |
|
| Tax Fees | | | — |
| | | — |
|
| All Other Fees | | | — |
| | | — |
|
| Total | | $ | 731,394 |
| | $ | 48,550 |
|
2019: | | | | | | | | |
| | |
Fees billed by KPMG LLP | | 2020 | | | 2019 | |
| | |
Audit Fees(1) | | | $1,285,190 | | | | $935,000 | |
| | |
Audit Related Fees | | | — | | | | — | |
| | |
Tax Fees(2) | | | 287,533 | | | | 38,676 | |
| | |
All Other Fees | | | — | | | | — | |
| | |
Total | | | $1,572,723 | | | | $973,676 | |
|
| | |
| (1) | | Audit fees of KPMG LLP for the years endingended December 31, 20152020, and 20142019 were for professional services rendered for the audits of our financial statements, including accounting consultation, reviews of quarterly financial statements and professional services rendered in connection with our registration statements. FeesThe fees for 20152020 include services associated with our initial public offering, which was completedautomatic shelf registration statement filed in August 2015.2020. The fees for 2019 include services associated with our follow-on offering of common stock in June 2019. |
| (2) | Tax Fees consist of fees billed for permissible tax services in connection with tax compliance, tax advice and tax planning. The fees for 2020 include services associated with our European subsidiaries. |
Audit Committee Pre-Approval Policies
The Audit Committee is directly responsible for the appointment, retention and termination, and for determining the compensation, of the Company'sour independent registered public accounting firm. The Audit Committee shall pre-approve all auditing services and the terms thereof and non-audit services (other than non-audit services prohibited under Section 10A(g) of the Exchange Act or the applicable rules of the SEC or the Public Company Accounting Oversight Board), except that pre-approval is not required for the provision of non-audit services if the “de minimus” provisions of Section 10A(i)(1)(B) of the Exchange Act are satisfied. The Audit Committee may delegate to the chairperson of the Audit Committee the authority to grant pre-approvals for audit and non-audit services, provided such approvals are presented to the Audit Committee at its next scheduled meeting. All services provided by KPMG LLP during fiscal year 2015 following our initial public offeringyears 2020 and 2019 were pre-approved by the Audit Committee in accordance with the pre-approval policy described above, and all audit fees during fiscal year 2014 were approved by the Board of Directors.above.
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE COMPANY FOR ITS FISCAL YEAR ENDING DECEMBER 31, 2021. |
242021 Proxy Statementï Global Blood Therapeutics, Inc.
Required Vote
AUDIT COMMITTEE REPORT
The ratification of the selection of KPMG LLP requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting (meaning the number of shares voted “for” the proposal must exceed the number of shares voted “against” the proposal). Abstentions arefollowing Audit Committee Report is not considered votes cast forproxy solicitation material and is not deemed filed with the foregoing purpose,Securities and will have no effect onExchange Commission. Notwithstanding anything to the vote for this proposal.
Recommendationcontrary set forth in any of our filings made under the Securities Act of 1933 or the Exchange Act that might incorporate our filings under those statutes, the Audit Committee Report shall not be incorporated by reference into any of our prior filings or into any of our future filings under those statutes.The Audit Committee of the Board of Directors,
or Audit Committee, has furnished this report concerning the independent audit of the Company’s financial statements. Each member of the Audit Committee meets the enhanced independence standards established by the Sarbanes-Oxley Act of 2002 and rulemaking of the Securities and Exchange Commission, or SEC, and the NASDAQ Stock Market regulations. A copy of the Audit Committee Charter is available on the Company’s website at www.gbt.com.The Audit Committee’s responsibilities include assisting the Board of Directors recommends thatregarding the stockholders vote FOR the ratificationoversight of the appointmentintegrity of KPMG LLP asthe Company’s financial statements, the Company’s compliance with legal and regulatory requirements, the independent registered public accounting firmfirm’s qualifications and independence, and the performance of the Companyindependent registered public accounting firm.
In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the Company’s financial statements for itsthe fiscal year endingended December 31, 2016.
PROPOSAL 3
RATIFICATION OF 2015 STOCK OPTION AND INCENTIVE PLAN
Our2020, with the Company’s management and KPMG LLP. In addition, the Audit Committee has discussed with management, and with KPMG LLP, with and without management present, their evaluation of the Company’s internal controls over financial reporting and overall quality of the Company’s financial reporting. The Audit Committee also discussed with KPMG LLP the matters required to be discussed by the Public Company Accounting Oversight Board
of Directors believes that stock options and other stock-based incentive awards are an important part of compensation to our employees and consultants which allow the Company to stay competitive in the market for experienced employees while aligning the interests of employees with stockholders. As we advance our lead product candidate, GBT440, further in Phase 1/2 clinical development in sickle cell disease and pursue the clinical development of GBT440 in hypoxemic pulmonary disorders and the
clinical developmentSEC. The Audit Committee also received the written disclosures and the letter from KPMG LLP required by the Public Company Accounting Oversight Board Rule 3526 and the Audit Committee discussed the independence of
our Kallikrein inhibitor product candidate in hereditary angioedema we anticipateKPMG LLP with that firm.Based on the needAudit Committee’s review and discussions noted above, the Audit Committee recommended to hire additional personnel while maintaining our existing personnel in order to support these activities. As such, the Board of Directors believes that we need to maintain a competitive position in attracting, retaining and motivating employees and consultants. In order to remain competitive, a major component of employee compensation in the San Francisco, California, market is the award of stock options, and it is incumbent upon the Board of Directors, and the Company to ensureBoard of Directors approved, that the award of stock options under our 2015 Stock Optionaudited financial statements be included in the Company’s Annual Report for the fiscal year ended December 31, 2020.
The Audit Committee and Incentive Plan (the “2015 Plan”) is tax efficient under IRS regulations.
Prior to our initial public offering, the Board of Directors and our stockholders approvedhave recommended the 2015 Plan. Under pertinent IRS regulations, grants made to “Covered Employees” (as defined in Section 162(m)selection of the Internal Revenue Code of 1986,KPMG LLP as amended, or the Code) under the 2015 Plan prior to the earlier of (i) the material modification of the 2015 Plan or (ii) our 2019 annual meeting of stockholders (the “Reliance Period”) are not subject to the cap on the Company’s tax deduction imposed by Section 162(m) of the Code with respect to compensation in excess of $1,000,000 per Covered Employee in any year. The Board of Directors seeks stockholders ratification of the 2015 Plan so that certain grants made to Covered Employees under the 2015 Plan, including stock options, stock appreciation rights and restricted stock awards and restricted stock units subject to performance-based vesting, will continue to qualify as “performance-based compensation” under Section 162(m) of the Code beyond the Reliance Period and therefore be exempt from the cap on the Company’s tax deduction imposed by Section 162(m) of the Code.
Our Board of Directors therefore believes that the ratification of the 2015 Plan is in the best interest of our stockholders given our current plans on hiring and the highly competitive environment in which we recruit and retain employees and consultants. If the stockholders do not ratify the 2015 Plan, the Company will either not make grants to Covered Employees under the 2015 Plan after the Reliance Period or will seek stockholder approval of a new stock plan before the end of the Reliance Period.
Summary of Material Features of the 2015 Plan
The material features of the 2015 Plan are:
|
| | | |
| • | | 1,430,000 shares of common stock were initially reserved for issuance under the 2015 Plan. On January 1, 2016, the number of shares reserved and available for issuance under the 2015 Plan increased by 1,218,283 shares of common stock pursuant to a provision in the 2015 Plan that provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2016, by the lesser of 4% of the number of shares of our common stock issued and outstanding on the immediately preceding December 31 or such lesser number as determined by the Board or the compensation committee (the “Annual Increase”); |
|
| | | |
| • | | Shares of common stock that are forfeited, canceled, held back upon the exercise or settlement of an award to cover the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without the issuance of common stock or otherwise terminated (other than by exercise) under the 2015 Plan and our 2012 Stock Option and Grant Plan (the “2012 Plan”) are added back to the shares of common stock available for issuance under the 2015 Plan; |
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| | | |
| • | | Shares of common stock reacquired by the Company on the open market will not be added to the reserved pool under the 2015 Plan; |
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| • | | The award of stock options (both incentive and non-qualified options), stock appreciation rights, restricted stock awards, restricted stock units, unrestricted stock awards, cash-based awards, performance share awards and dividend equivalent rights is permitted; |
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| • | | No dividends or dividend equivalents may be paid on full value shares subject to performance vesting until such shares are actually earned upon satisfaction of the performance criteria; |
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| • | | Without stockholder approval, the exercise price of stock options and stock appreciation rights will not be reduced and stock options and stock appreciation rights will not be otherwise repriced through cancellation in exchange for cash, other awards or stock options or stock appreciation rights with a lower exercise price; |
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| | | |
| • | | Any material amendment to the 2015 Plan is subject to approval by our stockholders; and |
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| | | |
| • | | The term of the 2015 Plan will expire on July 23, 2025. |
Based solely on the closing price of our common stock as reported by The NASDAQ Global Select Market on March 31, 2016, and the maximum number of shares that would have been available for awards as of such date, the maximum aggregate market value of the common stock that could potentially be issued under the 2015 Plan is $27.8 million.
Qualified Performance-Based Compensation under Section 162(m) of the Code
To ensure that certain awards granted under the 2015 Plan to Covered Employees qualify as “performance-based compensation” under Section 162(m) of the Code, the 2015 Plan provides that the compensation committee may require that the vesting of such awards be conditioned on the satisfaction of performance criteria that may include any or all of the following: (1) achievement of specified research and development, publication, clinical and/or regulatory milestones, (2) total shareholder return, (3) earnings before interest, taxes, depreciation and amortization, (4) net income (loss) (either before or after interest, taxes, depreciation and/or amortization), (5) changes in the market price of the common stock, (6) economic value-added, (7) funds from operations or similar measure, (8) sales or revenue, (9) acquisitions or strategic transactions, (10) operating income (loss), (11) cash flow (including, but not limited to, operating cash flow and free cash flow), (12) return on capital, assets, equity or investment, (13) return on sales, (14) gross or net profit levels, (15) productivity, (16) expense, (17) margins, (18) operating efficiency, (19) customer satisfaction, (20) working capital, (21) earnings (loss) per share of common stock, (22) sales or market shares and (23) number of customers, any of which may be measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group. The compensation committee will select the particular performance criteria within 90 days following the commencement of a performance cycle. Subject to adjustments for stock splits and similar events, the maximum award granted to any one individual that is intended to qualify as “performance-based compensation” under Section 162(m) of the Code will not exceed 1,750,000 shares of common stock for any performance cycle and options or stock appreciation rights with respect to no more than 1,750,000 shares of common stock may be granted to any one individual during any calendar year period. If a performance-based award is payable in cash, it cannot exceed $2,000,000 for any performance cycle.
The Board of Directors believes that it is important to maintain our flexibility to make awards to Covered Employees beyond the Reliance Period and to preserve our tax deduction for awards that qualify as “performance-based compensation” under Section 162(m) of the Code.
Summary of the 2015 Plan
The following description of certain features of the 2015 Plan is intended to be a summary only. The summary is qualified in its entirety by the full text of the 2015 Plan, which is attached hereto as Appendix A.
Plan Administration. The 2015 Plan is administered by the compensation committee. The compensation committee has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2015 Plan. The compensation committee may delegate to our chief executive officer the authority to grant awards to employees who are not subject to the reporting and other provisions of Section 16 of the Exchange Act and not subject to Section 162(m) of the Code, subject to certain limitations and guidelines and in August 2015 delegated the authority to make employee new hire grants to our chief executive officer.
Eligibility. Persons eligible to participate in the 2015 Plan are those full or part-time officers, employees, non-employee directors and other key persons (including consultants) of the Company and its subsidiaries as selected from time to time by the compensation committee in its discretion. As of March 31, 2016, approximately 83 individuals are currently eligible to participate in the 2015 Plan, which includes 7 officers, 68 employees who are not officers, and 8 non-employee directors.
Plan Limits. The maximum award of stock options or stock appreciation rights granted to any one individual will not exceed 1,750,000 shares of common stock (subject to adjustment for stock splits and similar events) for any calendar year period. If any award of restricted stock, restricted stock units or performance shares granted to an individual is intended to qualify as “performance-based compensation” under Section 162(m) of the Code, then the maximum award shall not exceed 1,750,000 shares of common stock (subject to adjustment for stock splits and similar events) to any one such individual in any performance cycle. If any cash-based award is intended to qualify as “performance-based compensation” under Section 162(m) of the Code, then the maximum award to be
paid in cash in any performance cycle may not exceed $2,000,000. In addition, no more than 1,430,000 shares of common stock may be issued in the form of incentive stock options, such number to be cumulatively increased on each January 1 by the lesser of the Annual Increase for such year or 2,857,000 shares of common stock.
Stock Options. The 2015 Plan permits the granting of (1) options to purchase common stock intended to qualify as incentive stock options under Section 422 of the Code and (2) options that do not so qualify. Options granted under the 2015 Plan will be non-qualified options if they fail to qualify as incentive options or exceed the annual limit on incentive stock options. Incentive stock options may only be granted to employees of the Company and its subsidiaries. Non-qualified options may be granted to any persons eligible to receive incentive options and to non-employee directors and key persons. The option exercise price of each option will be determined by the compensation committee but may not be less than 100% of the fair market value of the common stock on the date of grant. Fair market value for this purpose will be the last reported sale price of the shares of common stock on The NASDAQ Global Select Market on the date of grant. The exercise price of an option may not be reduced after the date of the option grant, other than to appropriately reflect changes in our capital structure.
The term of each option will be fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committee will determine at what time or times each option may be exercised. Options may be made exercisable in installments and the exercisability of options may be accelerated by the compensation committee. In general, unless otherwise permitted by the compensation committee, no option granted under the 2015 Plan is transferable by the optionee other than by will or by the laws of descent and distribution, and options may be exercised during the optionee’s lifetime only by the optionee, or by the optionee’s legal representative or guardian in the case of the optionee’s incapacity.
Upon exercise of options, the option exercise price must be paid in full either in cash, by certified or bank check or other instrument acceptable to the compensation committee or by delivery (or attestation to the ownership) of shares of common stock that are not then subject to any restrictions under any Company plan. Subject to applicable law, the exercise price may also be delivered to us by a broker pursuant to irrevocable instructions to the broker from the optionee. In addition, the compensation committee may permit non-qualified options to be exercised using a net exercise feature, which reduces the number of shares issued to the optionee by the number of shares with a fair market value equal to the exercise price.
To qualify as incentive options, options must meet additional federal tax requirements, including a $100,000 limit on the value of shares subject to incentive options that first become exercisable by a participant in any one calendar year.
Stock Appreciation Rights. The compensation committee may award stock appreciation rights subject to such conditions and restrictions as the compensation committee may determine. Stock appreciation rights entitle the recipient to shares of common stock equal to the value of the appreciation in the stock price over the exercise price. The exercise price may not be less than the fair market value of the common stock on the date of grant. The maximum term of a stock appreciation right is ten years.
Restricted Stock Awards. The compensation committee may award shares of common stock to participants subject to such conditions and restrictions as the compensation committee may determine. These conditions and restrictions may include the achievement of certain performance goals (as summarized above) and/or continued employment with us through a specified restricted period.
Restricted Stock Units. The compensation committee may award restricted stock units to any participants. Restricted stock units are ultimately payable in the form of shares of common stock and may be subject to such conditions and restrictions as the compensation committee may determine. These conditions and restrictions may include the achievement of certain performance goals (as summarized above) and/or continued employment with the Company through a specified vesting period or for board fees in lieu of cash compensation. In the compensation committee’s sole discretion, it may permit a participant to make an advance election to receive a portion of his or her future cash compensation otherwise due in the form of restricted stock units, subject to the participant’s compliance with the procedures established by the compensation committee and requirements of Section 409A of the Code. During the deferral period, the restricted stock units may be credited with dividend equivalent rights.
Unrestricted Stock Awards. The compensation committee may also grant shares of common stock that are free from any restrictions under the 2015 Plan. Unrestricted stock may be granted to any participant in recognition of past services or other valid consideration and may be issued in lieu of cash compensation due to such participant.
Cash-Based Awards. The compensation committee may grant cash bonuses under the 2015 Plan to participants. The cash bonuses may be subject to the achievement of certain performance goals (as summarized above).
Performance Share Awards. The compensation committee may grant performance share awards to any participant that entitle the recipient to receive shares of common stock upon the achievement of certain performance goals (as summarized above) and such other conditions as the compensation committee shall determine.
Dividend Equivalent Rights. The compensation committee may grant dividend equivalent rights to participants, which entitle the recipient to receive credits for dividends that would be paid if the recipient had held specified shares of common stock. Dividend equivalent rights may be granted as a component of another award (other than a stock option or stock appreciation right) or as a freestanding award. Dividend equivalent rights may be settled in cash, shares of common stock or a combination thereof, in a single installment or installments, as specified in the award.
Sale Event Provisions. The 2015 Plan provides that upon the effectiveness of a “sale event,” as defined in the 2015 Plan, the 2015 Plan and all awards thereunder will terminate, unless the parties to the sale event agree that such awards will be assumed or continued by the successor entity. In the event of such termination, (i) we may make or provide for a cash payment to participants holding options and stock appreciation rights, in exchangeindependent registered public accounting firm for the cancellation thereof, equal to the difference between the per share cash consideration in the sale event and the exercise price of the options or stock appreciation rights, (ii) each participant shall be permitted, within a specified period of time prior to the consummation of the sale event, as determined by the compensation committee, to exercise all outstanding options and stock appreciation rights (to the extent then exercisable) held by such participant, or (iii) we may fully vest all outstanding awards. Notwithstanding anything to the contrary in the 2015 Plan, in the event a participant’s service relationship is terminated by us or any successor without Cause (as that term is defined in the 2015 Plan) within one year following the consummation of a sale event, any awards assumed or substituted in a sale event which are subject to vesting conditions, the lapse or achievement of any conditions and/or a right of repurchase in favor of us or a successor entity, shall accelerate in full, and any awards accelerated in such manner with conditions and restrictions relating to the attainment of performance goals will be deemed achieved at one hundred percent (100%) of target levels.ending December 31, 2021.AUDIT COMMITTEE
SCOTT W. MORRISON, CHAIR
DEVAL L. PATRICK
MARK L. PERRY
DAWN A. SVORONOS
Global Blood Therapeutics, Inc. ï2021 Proxy Statement25
Adjustments for Stock Dividends, Stock Splits, EtcEXECUTIVE OFFICERS.
The 2015 Plan requires the compensation committee to make appropriate adjustments to the number of shares of common stock that are subject to the 2015 Plan, totable below sets forth certain limits in the 2015 Plan, and to any outstanding awards to reflect stock dividends, stock splits, extraordinary cash dividends and similar events.
Tax Withholding. Participants in the 2015 Plan are responsible for the payment of any federal, state or local taxes that we are required by law to withhold upon the exercise of options or stock appreciation rights or vesting of other awards. Subject to approval by the compensation committee, participants may elect to have the minimum tax withholding obligations satisfied by authorizing the Company to withhold shares of common stock to be issued pursuant to exercise or vesting.
Amendments and Termination. The Board of Directors may at any time amend or discontinue the 2015 Plan and the compensation committee may at any time amend or cancel any outstanding award for the purpose of satisfying changes in the law or for any other lawful purpose. However, no such action may adversely affect any rights under any outstanding award without the holder’s consent. To the extent required under the rules of the NASDAQ Stock Market, any amendments that materially change the terms of the 2015 Plan will be subject to approval by our stockholders. Amendments shall also be subject to approval by our stockholders if and to the extent determined by the compensation committee to be required by the Code to preserve the qualified status of incentive options or to ensure that compensation earned under the 2015 Plan qualifies as performance-based compensation under Section 162(m) of the Code.
Effective Date of 2015 Plan. The Board of Directors initially adopted the 2015 Plan on July 23, 2015 and it was subsequently approved by our stockholders on July 27, 2015 and became effective immediately prior to the consummation of our initial public offering. Awards of incentive options may be granted under the 2015 Plan until July 23, 2025. No other awards may be granted under the 2015 Plan after the date that is ten years from the date of stockholder approval.
Plan Benefits
Because the grant of awards under the 2015 Plan is within the discretion of the compensation committee, we cannot determine the dollar value or number of shares of common stock that will in the future be received by or allocated to any participant in the 2015 Plan. Accordingly, in lieu of providing information regarding benefits that will be received under the 2015 Plan, the following table provides information concerning the benefits that were received by the following persons and groups under the 2015 Plan during calendar year 2015: all current directors who are notour executive officers as a group; and all employees who are not executive officers, as a group. None of our named executive officers or current executive officers were granted any equity awards under the 2015 Plan during the calendar year 2015.
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| | | Restricted Stock | | Options |
| Name and Position | | Average
Exercise
Price ($) | | Number
(#) | | Average
Exercise
Price ($) | | Number
(#) |
| All current directors who are not executive officers, as a group | | $ | — |
| | — |
| | $ | 26.08 |
| | 130,800 |
|
| All current employees who are not executive officers, as a group | | $ | — |
| | — |
| | $ | 30.03 |
| | 367,805 |
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Tax Aspects under the Code
The following is a summary of the principal federal income tax consequences of certain transactions under the 2015 Plan. It does not describe all federal tax consequences under the 2015 Plan, nor does it describe state or local tax consequences.
Incentive Options. No taxable income is generally realized by the optionee upon the grant or exercise of an incentive option. If shares of common stock issued to an optionee pursuant to the exercise of an incentive option are sold or transferred after two years from the date of grant and after one year from the date of exercise, then (i) upon sale of such shares, any amount realized in excess of the option price (the amount paid for the shares) will be taxed to the optionee as a long-term capital gain, and any loss sustained will be a long-term capital loss, and (ii) the Company will not be entitled to any deduction for federal income tax purposes. The exercise of an incentive option will give rise to an item of tax preference that may result in alternative minimum tax liability for the optionee.
If shares of common stock acquired upon the exercise of an incentive option are disposed of prior to the expiration of the two-year and one-year holding periods described above (a “disqualifying disposition”), generally (i) the optionee will realize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of the shares of common stock at exercise (or, if less, the amount realized on a sale of such shares of common stock) over the exercise price thereof and (ii) the Company will be entitled to deduct such amount. Special rules apply where all or a portion of the exercise price of the incentive option is paid by tendering shares of common stock.
If an incentive option is exercised at a time when it no longer qualifies for the tax treatment described above, the option is treated as a non-qualified option. Generally, an incentive option will not be eligible for the tax treatment described above if it is exercised more than three months following termination of employment (or one year in the case of termination of employment by reason of disability). In the case of termination of employment by reason of death, the three-month rule does not apply.
Non-Qualified Options. No income is realized by the optionee at the time the option is granted. Generally, (i) at exercise, ordinary income is realized by the optionee in an amount equal to the difference between the option price and the fair market value of the shares of common stock on the date of exercise, and the Company receives a tax deduction for the same amount and (ii) at disposition, appreciation or depreciation after the date of exercise is treated as either short-term or long-term capital gain or loss depending on how long the shares of common stock have been held. Special rules apply where all or a portion of the exercise price of the non-qualified option is paid by tendering shares of common stock. Upon exercise, the optionee will also be subject to Social Security taxes on the excess of the fair market value over the exercise price of the option.
Other Awards. The Company generally will be entitled to a tax deduction in connection with an award under the 2014 Plan in an amount equal to the ordinary income realized by the participant at the time the participant recognizes such income. Participants typically are subject to income tax and recognize such tax at the time that an award is exercised, vests or becomes non-forfeitable, unless the award provides for a further deferral.
Parachute Payments. The vesting of any portion of an option or other award that is accelerated due to the occurrence of a change in control (such as a sale event) may cause a portion of the payments with respect to such accelerated awards to be treated as “parachute payments,” as defined in the Code. Any such parachute payments may be non-deductible to the Company, in whole or in part, and may subject the recipient to a non-deductible 20% federal excise tax on all or a portion of such payment (in addition to other taxes ordinarily payable).
Limitation on Deductions. Under Section 162(m) of the Code, the Company’s deduction for certain awards under the 2015 Plan may be limited to the extent that the chief executive officer or other executive officer whose compensation is required to be reported in the summary compensation table (other than the principal financial officer) receives compensation in excess of $1 million a year (other than performance-based compensation that otherwise meets the requirements of Section 162(m) of the Code). The 2015 Plan is structured to allow certain awards to qualify as performance-based compensation.
Equity Compensation Plans
The following table sets forth information as of December 31, 2015 regarding shares of common stock that may be issued under our equity compensation plans, consisting of the 2012 Plan, the 2015 Plan and our 2015 Employee Stock Purchase Plan (the "ESPP").
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| Plan Category | | Number of Securities to be Issued upon Exercise of Outstanding Options and Rights (#)(a) | | | Weighted Average Exercise Price of Outstanding Options and Rights (b)(1) | | | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) | |
| Equity compensation plans approved by security holders (2) | | 2,058,787 |
| (3 | ) | | $ | 8.71 |
| (3 | ) | | 1,064,485 |
| (4 | ) |
| Equity compensation plans not approved by security holders | | — |
| | | — |
| | | — |
| |
| Total | | 2,058,787 |
| | | $ | 8.71 |
| | | 1,064,485 |
| |
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| |
(1) | The weighted average exercise price is calculated based solely on outstanding stock options. |
(2) | Includes the 2015 Plan and the ESPP. Our 2015 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2016, by 4% of the outstanding number of shares of common stock on the immediately preceding December 31 or such lesser number of shares as determined by the compensation committee of the Company’s Board of Directors. Our ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, from January 1, 2016 until January 1, 2025, by the lesser of (i) 3,000,000 shares of common stock, (ii) 1% of the outstanding number of shares of common stock on the immediately preceding December 31 or (iii) such lesser amount of shares as determined by the compensation committee of the Company’s Board of Directors. On January 1, 2016, the number of shares available for issuance under our 2015 Plan and our ESPP increased by 1,218,283 shares and 91,371 shares, respectively, pursuant to these provisions. These increases are not reflected in the table above. We no longer grant new awards under our 2012 Plan, and any awards previously granted under such plan prior to our initial public offering that are forfeited, canceled, reacquired by us prior to vesting satisfied without the issuance of stock or otherwise terminated (other than by exercise) are added to shares available for issuance under the 2015 Plan. |
(3) | Does not include purchase rights accruing under the ESPP because the purchase right (and therefore the number of shares to be purchased) will not be determined until the end of the purchase period. |
(4) | As of December 31, 2015, there were 1,014,485 shares of common stock available for issuance under the 2015 Plan and 50,000 shares of common stock available for issuance under the ESPP. |
Required Vote
The ratification of the 2015 Stock Option and Incentive Plan requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting (meaning the number of shares voted “for” the proposal must exceed the number of shares voted “against” the proposal). Abstentions and broker non-votes are not considered votes cast for the foregoing purpose, and will have no effect on the vote for this proposal.
Recommendation of the Board of Directors
The Board of Directors recommends that stockholders vote FOR the ratification of the 2015 Stock Option and Incentive Plan.
EXECUTIVE OFFICERS
The names of the executive officers of the Company, their ages as of March 31, 2016, and certain other information about them are set forth below (unless set forth elsewhere in this Proxy Statement).
2021. |
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Name | | Age | | Position |
| | |
Ted W. Love, M.D. | | 5762 | | President, Chief Executive Officer and Director |
| | |
Jeffrey Farrow(1)Farrow | | 5459 | | Chief Financial Officer |
Eleanor L. Ramos, M.D. | | |
Brian Cathers, Ph.D. | | 6051 | | Chief MedicalScientific Officer |
| | |
Jung E. Choi | | 4651 | | Chief Business and Strategy Officer |
Hing Sham, Ph.D.(2) | | |
Eric Fink | | 6344 | | Senior Vice President, Chemistry |
Peter Radovich | | 38 | | Vice President, Program Leadership and Business Strategy |
John Schembri | | 54 | | Vice President, Finance and Administration and Corporate Secretary |
| | | | |
| Chief Human Resources Officer |
| | |
(1)David L. Johnson | | Mr. Jeffrey Farrow joined the Company as Chief Financial Officer on April 4, 2016. |
(2)52 | | Effective as of May 1, 2016, Dr. Hing Sham will be appointed as Senior Vice President, Research.Chief Commercial Officer |
| | |
Tricia Suvari, Esq. | | 60 | | Chief Legal Officer |
The biographies of our executive officers, other than Dr. Love, whose biography is set forth above, appear below.
Jeffrey Farrow
has served as our Chief Financial Officer since April 2016. Mr. Farrow previously served as chief financial officer of ZS Pharma, Inc., a biopharmaceutical company, which was acquired by AstraZeneca in December 2015. Prior to ZS Pharma, he served as the chief financial officer at Hyperion Therapeutics, Inc., a commercial pharmaceutical company, from July 2010 until May 2015 where he was part of the team responsible for the successful regulatory approval and commercial launch of RAVICTI®RAVICTI® for the treatment of urea cycle disorders. He previously served as vice president of finance at Evotec AG, a drug discovery and development company. Prior to Evotec, Mr. Farrow served as vice president of finance and chief accounting officer at Renovis, Inc., a drug discovery and development company, which was acquired by Evotec AG. Earlier in his career, Mr. Farrow spent seven years working in the audit practice of KPMG LLP. Mr. Farrow holds a B.A. in business administration with a concentration in corporate finance from California State University at Fullerton and is a certified public accountant (inactive).Eleanor L. Ramos, M.D.Brian Cathers, Ph.D., has served as our Chief MedicalScientific Officer since May 2014.February 2019. Dr. Cathers previously served as executive director and head of drug discovery at Celgene Corporation, or Celgene, from November 2015 to February 2019, and as senior director of biochemistry and structural biology at Celgene from October 2013 to November 2015. At Celegene, Dr. Cathers’ teams produced eight new development candidates and advanced five investigational drugs into clinical testing. Prior to joining us, since September 2011, sheCelgene, Dr. Cathers served as chief medical officersenior group leader and director at NewBiotics, Inc. from August 2000 to February 2004, where he oversaw enzymology and biophysical chemistry research, and was part of Theraclone Sciences, Inc., where she led the development of monoclonal antibody therapies for viral diseases. From May 2009small team that developed a colorectal cancer drug from basic research to June 2011, Dr. Ramosclinical testing. Prior to joining NewBiotics, he served as the senior vice presidentan enzymologist at Axys Pharmaceuticals. Dr. Cathers holds a B.S. in chemistry from Emporia State University and chief medical officer at ZymoGenetics Inc., a biopharmaceutical company (acquired by Bristol-Myers Squibb Companyan M.S. and Ph.D. in 2010), where she was responsible for the oversight of the company’s clinical portfolio in the therapeutic areas of inflammation, oncology, viral hepatitis and hemostasis. Earlier in her career, she also led significant clinical research and development initiatives while at Bristol-Myers Squibb, a global biopharmaceutical company, and Roche Global Development in the area of solid organ transplantation, and led the Clinical Trials Group at the Immune Tolerance Network, a clinical research consortium, while atmedicinal chemistry from the University of California, San Francisco. Previously, Dr. Ramos held faculty appointments at Harvard Medical School, the University of Florida, Yale University and the University of California, San Francisco. Dr. Ramos holds an M.D. from Tufts University School of Medicine and completed her training in transplant nephrology at the Brigham and Women’s Hospital.
Kansas.Jung E. Choi
has served as our Chief Business and Strategy Officer since April 2015. From April 2014 to March 2015, Ms. Choi served as senior vice president, corporate development for InterMune, Inc., a biotechnology company (acquired by Roche Holding AG in 2014), and served as an adviser on strategy and business development to InterMune from March 2013 to April 2014. Prior to joining InterMune, from February 2011 to March 2013, Ms. Choi led corporate and business development for Chimerix, Inc., a biopharmaceutical company, as a consultant and senior vice president, corporate development. Prior to that, from August 2001 to August 2010, Ms. Choi held various management positions at Gilead Sciences, Inc., a biopharmaceutical company, including leadership of business development, licensing, and mergers and acquisition activities. During her tenure at Gilead Sciences, Ms. Choi built and oversaw the corporate development group, and led the U.S. commercial launch of Hepsera®Hepsera® for the treatment of the hepatitis B virus. Ms. Choi holds a B.A. in human biology and an M.B.A. from Stanford University. Hing Sham, Ph.D.Eric Fink has served as our SeniorChief Human Resources Officer since August 2019. Prior to joining us, from 2010 until July 2019, he most recently served as Vice President, Chemistry since July 2014. Most recently,Human Resources, at Jazz Pharmaceuticals, a global biopharmaceutical company. While there, he held a variety of human resource senior leadership positions to develop human capital and organizational development strategies and scale the global HR operating model to better serve the expanding business. From 2008 to 2009, he held a leadership position in the sales training organization at Bayer Healthcare, a multinational pharmaceutical and life sciences company. From 1999 to 2008, he held various roles at GlaxoSmithKline, a global healthcare company, across a wide spectrum of the U.S. commercial function, including Sales, Sales Training, Commercial Analytics, and Sales Management. He received a B.S. in Biology from January 2013 to July 2014, Dr. ShamPennsylvania State University and an M.S. in Organizational Leadership from Mercyhurst University.
262021 Proxy Statementï Global Blood Therapeutics, Inc.
David L. Johnson has served as headour Chief Commercial Officer since March 2018. From October 2003 until February 2018, Mr. Johnson served in roles of research and developmentincreasing responsibility in the commercial organization at iOneWorldHealth/Path.org (PATH), a non-profit pharmaceutical
development organization. Prior to that, from September 2006 to November 2012, he served as senior vice president of research and head of chemical sciences at Elan Pharmaceuticals,Gilead Sciences, Inc., a biopharmaceutical company, where he led the chemistry team in the discovery of two clinical candidatesultimately as vice president, sales and marketing, for Gilead’s Liver Disease Business Unit. At Gilead, Mr. Johnson was responsible for the commercial launch of Gilead’s hepatitis C treatments Sovaldi®, Harvoni®, Epclusa® and Vosevi®, hepatitis B treatment of Alzheimer’s disease. From July 1983Vemlidy®, and HIV treatments Complera® and Stribild®. Prior to August 2006, Dr. Sham workedGilead, from April 1992 to September 2003, Mr. Johnson served in various roles in sales, product marketing, business development, global commercial strategy and portfolio development at Abbott Laboratories Inc.,GlaxoSmithKline PLC, a global healthcare company, where he and his team discovered and advanced 10 clinical candidates spanning cardiovascular disease, HIV, oncology and diabetes. His 24-year tenure at Abbott Laboratories culminated in his appointment as a distinguished research fellow in globalBritish pharmaceutical discovery. Dr. Sham is the co-inventor of Norvir® and the primary inventor of Kaletra®, Abbott Laboratories’ first and second-generation HIV protease inhibitors approved for the treatment of HIV. Dr. Sham has published more than 180 scientific articles in peer-reviewed journals and is a named inventor on 81 issued U.S. patents. Dr. Sham was named Hero of Chemistry by the American Chemical Society in 2003. Dr. Shamcompany. Mr. Johnson holds a Ph.D.B.A. in synthetic organic chemistrybusiness marketing from the University of HawaiiPuget Sound and completed his post-doctoral training inan M.B.A. from the departmentKenan-Flagler Business School at the University of chemistry at Indiana University.
Peter RadovichNorth Carolina.Tricia Suvari, Esq., has served as our Vice President, Program Leadership and Business StrategyChief Legal Officer since November 2014. Prior to that,October 2016. From 2000 until 2009, Ms. Suvari served in September 2006, he joined Onyx Pharmaceuticals,several senior roles at CV Therapeutics, Inc., a biopharmaceutical company (acquired by Amgen,Gilead Sciences, Inc.) in 2009), ultimately as senior vice president, general counsel and chief compliance officer. Prior to CV Therapeutics, from 1991 until 2000, she served as corporate counsel at Genentech, Inc., in increasingly senior roles. From February 2012 until July 2016, Ms. Suvari served as a vice president program leadershipand general counsel at the non-profit Peninsula Open Space Trust, and from February 2014 to November 2014 and as senior director from Augustearly 2011 to February 2014, during which time he led the company’s global, cross-functional product team responsible for the development2012 she served as an independent consultant to biopharmaceutical companies. Ms. Suvari earned her Bachelor of Sciences degree in Geology and commercialization of Kyprolis®. Prior to joining Onyx,Geophysics from 2004 to 2006, Mr. Radovich was at Chiron Corporation (now Novartis AG) in product marketing supporting Proleukin® (interleukin-2) in multiple oncology indications. Mr. Radovich holds a B.A. in biology and chemistry from Texas ChristianYale University and an M.B.A.her J.D. degree from Washington University in St. Louis.Harvard Law School.
Global Blood Therapeutics, Inc. ï2021 Proxy Statement27
John SchembriEXECUTIVE COMPENSATION
has served asCompensation Discussion and Analysis
This Compensation Discussion and Analysis, or CD&A, describes our Vice President, Financeexecutive compensation program and Administration since January 2014. Prior to joining us, since June 2011, Mr. Schembri served as vice president and chief financial officer at StemPar Sciences, Inc. From July 2009 to May 2011, he was a consulting chief financial officer to early-stage companies. Prior to that, Mr. Schembri served as chief financial officer of BiPar Sciences, Inc., from January 2007 until it was acquired by sanofi-aventis S.A. in 2009. Prior to joining BiPar Sciences, Mr. Schembri led the finance team at Sirna Therapeutics, Inc., a biotechnology company, from January 2006 until it was acquired by Merck & Co., Inc. in December 2006. He also served a key role in the $2 billion sale and integration of COR Therapeutics Inc., a biopharmaceutical company, to Millennium Pharmaceuticals, Inc. in 2001. Mr. Schembri holds a B.S. in business administration from California State Polytechnic University, San Luis Obispo.
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table
The following table presents information regarding the total2020 compensation earned byfor: (i) each individual who served as our chiefprincipal executive officer at any time during the fiscal year ended December 31, 2015,2020; (ii) each individual who served as our two otherprincipal financial officer during 2020 and (iii) our three most highly compensated executive officers whoduring 2020 other than the individuals set forth above in clauses (i) and (ii), all of whom we refer to collectively as our named executive officers, or NEOs. This CD&A should be read with the compensation tables and related disclosures for our NEOs.Our NEOs for 2020 were serving as executive officersfollows:
Ted W. Love, our President and Chief Executive Officer, or CEO;
Jeffrey Farrow, our Chief Financial Officer;
Jung Choi, our Chief Business and Strategy Officer;
David L. Johnson, our Chief Commercial Officer; and
Tricia Suvari, our Chief Legal Officer.
Executive Summary
Overview
We are a biopharmaceutical company dedicated to the discovery, development and delivery of life-changing treatments that provide hope to underserved patient communities. Founded in 2011, our goal is to transform the treatment and care of sickle cell disease, or SCD, a lifelong, devastating inherited blood disorder that is marked by red blood cell destruction and occluded blood flow and hypoxia, which leads to anemia, stroke, multi-organ failure, severe pain crises, and shortened patient life span. Since 2019, we have grown to become a commercial-stage company with 389 employees globally as of December 31, 20152020, a marketed drug in the United States with the approval of Oxbryta® (voxelotor) tablets, and one individual who would have been included as onea marketing approval application under review in the European Union for Oxbryta.
In November 2019, the U.S. Food and Drug Administration, or FDA, granted accelerated approval for our first medicine, Oxbryta for the treatment of SCD in adults and children 12 years of age and older. Oxbryta, an oral therapy taken once daily, is the first FDA-approved treatment that directly inhibits sickle hemoglobin polymerization, the root cause of SCD. This FDA approval was three months ahead of the FDA’s Prescription Drug User Fee Act, or PDUFA, target action date of February 26, 2020, and we began to make Oxbryta available to patients through our specialty pharmacy partner network in early December 2019.
We are conducting and plan to conduct additional studies of Oxbryta. Such ongoing studies include, as a condition of accelerated approval, our Phase 3 HOPE-KIDS 2 Study, a post-approval confirmatory study we initiated in December 2019 that is using transcranial Doppler, or TCD, flow velocity to seek to demonstrate a decrease in stroke risk in children two to 15 years of age.
In January 2021, the European Medicines Agency, or EMA, accepted for review our Marketing Authorization Application, or MAA, seeking full marketing authorization of Oxbryta to treat hemolytic anemia (which is low hemoglobin due to red blood cell destruction) in SCD patients ages 12 years and older. In addition, our goals include expanding the current Oxbryta label in the United States to include treatment of SCD in children ages 4 to 11 years. In addition, we entered into an exclusive agreement in 2020 with Biopharma-Middle East and Africa, or Biopharma-MEA, to distribute Oxbryta in the six countries that make up the Gulf Cooperation Council, or GCC, region (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates), where the U.S. approval of Oxbryta can be referenced to allow for access to the medicine while health authorities conduct their reviews.
Beyond Oxbryta, we are engaged in other research and development activities, including working on new targets to potentially develop next generation treatments for SCD, including inclacumab, a P-selectin inhibitor, which is a clinically validated target in SCD, known to reduce the incidence of vaso-occlusive crises, or VOCs, and our next generation hemoglobin polymerization inhibitor, GBT021601, or GBT601. In addition, our drug discovery team is working on new targets to develop the next generation of treatments for SCD.
As part of those efforts, we regularly evaluate opportunities to in-license, acquire or invest in new business, technology or assets or engage in related discussions with other business entities. In December 2019, we entered into a license and collaboration agreement with Syros Pharmaceuticals, Inc., to discover, develop and commercialize novel therapies for SCD and beta thalassemia, and, in March 2021, we entered into a license agreement with Sanofi, under which we received an
282021 Proxy Statementï Global Blood Therapeutics, Inc.
exclusive license under certain intellectual property controlled by Sanofi to use, develop, manufacture, commercialize and otherwise exploit certain compounds for the treatment of human diseases.
Corporate Performance Highlights
Our executive compensation program seeks to incentivize and reward strong corporate performance. Highlights of our 2020 corporate performance are set forth below.
| • | | Regulatory and Commercial |
| ✔ | Throughout 2020, we executed the commercial launch of Oxbryta in the United States, leveraging our field team and GBT Source Solutions® to educate healthcare professionals, or HCPs, payors and other stakeholders on Oxbryta. Over the course of the year, we secured FDA approval for patient and healthcare provider marketing materials in support of the Oxbryta launch. |
| ✔ | Starting in March 2020, we worked to adapt our commercial launch of Oxbryta to the challenging environment created by the COVID-19 pandemic through proactive measures to reduce the risk of spreading the COVID-19 virus among our employees, customers, business partners and local communities. |
| ✔ | In June 2020, we announced plans to seek the potential expansion of the use of Oxbryta for the treatment of SCD in children ages 4 to 11 years. |
| ✔ | In June 2020, we announced plans to submit an MAA to the EMA for Oxbryta to treat hemolytic anemia in SCD patients ages 12 years and older by mid-2021, and, in January 2021, we were notified that the EMA has completed the validation of the MAA we submitted and has started its standard review process. |
| ✔ | In September 2020, we announced our entry into an exclusive agreement with Biopharma-MEA to distribute Oxbryta in the GCC region. |
| ✔ | As of the end of September 2020 (a quarter ahead of our goal), we achieved broad payer coverage for Oxbryta in the United States, defined as 90% of lives covered by payers either through published policies or verified patient adjudication. |
| ✔ | In December 2020, we initiated two early access programs for Oxbryta. One is in Europe and other regions outside the United States, for the treatment of hemolytic anemia in eligible SCD patients ages 12 years and older, and the other is a multi-center expanded access protocol in the United States for eligible pediatric SCD patients to provide access prior to potential market authorization for children ages 4 to 11 who have no alternative treatment options. |
| ✔ | We announced the appointment of a head of research and development who is expected to join us in May 2021, and, in August 2020, we added a chief medical officer to lead our development organization. |
| ✔ | In October 2020, we received the 2020 Rare Impact Award® for Industry Innovation for Oxbryta from the National Organization for Rare Disorders (NORD); in addition, Oxbryta was selected as Breakthrough Drug of the Year by the 2020 National Xconomy Awards. |
Impact of COVID-19
In March 2020, the Centers for Disease Control and Prevention, or CDC, declared a global pandemic related to SARS-CoV-2, the virus that causes coronavirus disease 2019, or COVID-19, and the pandemic has impacted our business, including our commercialization of Oxbryta and our research and development activities. For example, we implemented a temporary work from home policy; temporarily suspended our field team from most highly compensated executive officers except that she was not serving atin-person interactions, including visits to physician offices, clinics and hospitals as well as in-person meetings with payors; and temporarily delayed or paused certain research and development activities, including screening and enrollment in all clinical studies sponsored by us.
Despite the impact of COVID-19, which we believe negatively impacted new patient prescriptions for Oxbryta after March 2020, we successfully executed the launch of Oxbryta, with nearly 5,000 new prescriptions written for Oxbryta between launch and the end of 2015. We refer2020 and net sales of $123.8 million in 2020, Oxbryta’s first full year of launch.
While the COVID-19 pandemic has had a significant impact on our company, including throughout most of 2020, we did not make any changes to theseour 2020 corporate goals, including our 2020 revenue goal. As discussed below, we considered the impact of COVID-19 in granting our executive officers inperformance-based RSUs, or PSUs, effective June 1, 2020, for retention purposes and to further focus them on our long-term performance.
Global Blood Therapeutics, Inc. ï2021 Proxy Statement29
Overview of Executive Compensation Program
Executive Compensation Philosophy
Our executive compensation program is guided by our overarching philosophy of paying for demonstrable performance. Consistent with this Proxy Statement asphilosophy, we have designed our named executive officers. Thecompensation program to achieve the following table also sets forth information regarding totalprimary goals:
attract, motivate and retain top-performing senior executives;
establish compensation awarded to, earned byopportunities that are competitive and paid to eachreward performance; and
align the interests of our namedsenior executives with the interests of our stockholders to drive the creation of sustainable long-term value.
Executive Compensation Program Design
Our executive compensation program is designed to be reasonable and competitive, and balance our goal of attracting, motivating, rewarding and retaining top-performing senior executives with our goal of aligning their interests with those of our stockholders. The Compensation Committee annually evaluates our executive compensation program to ensure that it is consistent with our short- and long-term goals and the dynamic nature of our business.
Our executive compensation program consists of a mix of compensation elements that balance achievement of our short-term goals with our long-term performance. We provide short-term incentive compensation opportunities in the form of annual cash bonuses, which focus on our achievement of annual corporate goals. We also provide long-term incentive compensation opportunities in the form of equity awards, including stock options, time-based RSUs and periodic PSUs.
We believe that stock options provide a strong reward for growth in the market price of our common stock because their entire value depends on future stock price appreciation. We believe RSUs and PSUs, which are subject to vesting conditions tied to our stock price also reward growth in the market price of our common stock because they derive additional value from future stock price appreciation, and they are less dilutive to our stockholders because they require fewer shares than stock options. In addition, we believe that the multi-year vesting requirements applicable to stock options and RSUs, as well as the additional time-based vesting requirements applicable to our PSUs, encourage retention because our senior executives are incentivized to remain employed through the applicable vesting or performance periods. We also have executive share ownership guidelines to further support our effort to align the interests of executive officers during the fiscal year ending December 31, 2014,and shareholders.
Our executive compensation program is also designed to the extent they were named executive officers in 2014.incorporate sound practices for compensation governance. Below we summarize such practices.
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Global Blood Therapeutics, Inc.
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| Name and Principal Position | | Year | | Salary ($) | | Stock Awards ($)(1) | | | Option Awards ($)(1) | | | Non-Equity Incentive Plan Compensation ($)(2) | | All Other Compensation ($)(3) | | Total ($) |
| Ted W. Love, M.D. | | 2015 | | 437,500 |
| | 1,022,424 |
| (4) | | — |
| | | 76,500 |
| | 750 |
| | 1,537,174 |
|
| President, Chief Executive Officer and Director | | 2014 | | 238,381 |
| | 350,000 |
| | | — |
| | | — |
| | 750 |
| | 589,131 |
|
| Eleanor L. Ramos, M.D. | | 2015 | | 358,333 |
| | — |
| | | 175,112 |
| (5) | | 47,500 |
| | 750 |
| | 581,695 |
|
| Chief Medical Officer | | 2014 | | 224,135 |
| | — |
| | | 50,000 |
| | | 35,000 |
| | 750 |
| | 309,885 |
|
| Hing Sham, Ph.D. | | 2015 | | 306,250 |
| | 31,569 |
| (6) | | 147,550 |
| (6) | | 24,500 |
| | — |
| | 509,869 |
|
| Senior Vice President, Chemistry | | | | | | | | | | | | | | | |
|
|
| Uma Sinha, Ph.D.(7) | | 2015 | | 197,897 |
| | 409,751 |
| | | 129,712 |
| | | 57,500 |
| | 171,250 |
| | 966,110 |
|
| Former Chief Scientific Officer | | 2014 | | 321,547 |
| | 21,000 |
| | | — |
| | | 69,648 |
| | 750 |
| | 412,945 |
|
| | | | |
| | |
(1)What We Do: | | In accordance with SEC rules, these columns reflect the aggregate grant date fair value | | What We Don’t Do: |
✔Maintain an Independent Compensation Committee. The Compensation Committee consists solely of restricted stockindependent directors. ✔Retain an Independent Compensation Advisor. The Compensation Committee engages its own compensation advisor to provide information and option awards granted during 2015 in accordance with FASB ASC Topic 718. Pursuant to FASB ASC Topic 718, the amounts shown exclude the impact of estimated forfeituresanalysis related to service-based vesting conditions. For additional informationannual executive compensation decisions, including the 2020 executive compensation decisions, and other advice on the valuation assumptions underlying the valueexecutive compensation independent of these restricted stockmanagement. ✔Review Executive Compensation Annually and options, see Part II, Item 8 “Financial StatementsRelated Risk Assessment. The Compensation Committee annually reviews our compensation strategy, including a review and Supplementary Data”determination of our 2015 Annual Report on Form 10-K in the Notes to Consolidated Financial Statements, Note 8, “Stock-based awards”. |
(2) | | The amounts reportedcompensation peer group used for 2015 reflect the cash incentive compensation determined by ourcomparative purposes. The Compensation Committee (foralso reviews, on an annual basis, our compensation-related risk profile.✔Emphasize At-Risk Compensation. Our executive compensation program is designed so that a significant portion of our executive officers’ compensation is “at risk” based on our corporate performance, as well as equity-based, to align the Named Executive Officers other thaninterests of our executive officers and stockholders. ✔Use a Pay-for-Performance Philosophy. The majority of our executive officers’ compensation is directly linked to corporate performance and includes a significant long-term equity component, thereby making a substantial portion of each executive officer’s total compensation dependent upon our stock price and/or total stockholder return. ✔Stock Ownership Policy to Align Executives and Board with Shareholder Interests. We maintain a stock ownership policy for our executive officers (and non-executive members of our senior management team), as well as the CEO), and bynon-employee members of our Board of Directors, upon recommendationwhich requires each of them to maintain ownership of a predetermined amount of company stock. ✔Clawback Policy. In March 2021, we adopted a clawback policy under which cash- and equity-based incentive compensation of our Compensation Committee (forCEO and other executive officers may be recovered by us under certain circumstances in the event of a financial restatement. ✔Ongoing Shareholder Outreach and Engagement. We proactively engage with shareholders to solicit and consider shareholder feedback regarding our CEO), based on achievement of certain researchboard governance and development, clinical, financialexecutive compensation programs and operational metrics relatedpolicies to better understand investor viewpoints and inform discussions in the boardroom. ✔Use Double Trigger Change-in-Control Protection. Change-in-control payments and benefits to our 2015 corporate objectives,executive officers occur only upon a qualifying termination of employment in connection with a change in control of the Company, not merely upon a change in control. | | | | ✘No Executive Retirement Plans. We do not offer pension arrangements or retirement plans or arrangements to our executive officers that are different from or in addition to those offered to our other employees. ✘Limited Perquisites. We do not view perquisites as specified bya significant component of our executive compensation program. Accordingly, we do not provide significant perquisites to our executive officers, including our NEOs, except for limited travel stipends or limited housing and travel reimbursements for recruitment and retention purposes. ✘No Special Health and Welfare Benefits. Our executive officers participate in our health and welfare benefits programs on the same basis as our other employees. ✘No Post-Employment Tax Payment Reimbursement. We do not provide any tax reimbursement payments (including “gross-ups”) on any change-in-control or severance payments or benefits. ✘No Hedging or Pledging Our Equity Securities. We prohibit our executive officers, the members of our Board of Directors.Directors and certain other employees from hedging or pledging our securities without the prior approval of the Audit Committee of our Board of Directors, or Audit Committee. ✘No Stock Option Re-Pricing. Our equity plans do not permit stock options to be repriced to a lower exercise or strike price without the approval of our stockholders. |
“Say-on-Pay” Vote on Executive Compensation
At our 2020 Annual Meeting of Stockholders, we held a non-binding, advisory vote on the compensation of our NEOs (a “Say-on-Pay” vote), which received the support of approximately 78% of the votes cast. This was significantly lower than the greater than 97% support received on the Say-on-Pay proposal in each of the previous two years. In response to the relatively lower say-on-pay vote in 2020, we reached out to multiple stockholders and key investors, with aggregate holdings of over 75% of our outstanding shares (as of September 30, 2020), to discuss our executive compensation program and practices as well as our environmental, social and governance (ESG) policies and practices, and solicit feedback on these topics. While not all stockholders accepted our invitation to engage at this time, as of April 1, 2021, we have held these calls with stockholders with aggregate holdings of over 35% of our outstanding shares (as of September 30, 2020). Our calls were led by our Chief Financial Officer, Chief Human Resources Officer and Chief Legal Officer, with the chair of our Compensation Committee also participating on a smaller number of calls. During these
Global Blood Therapeutics, Inc. ï2021 Proxy Statement31
discussions, the majority of our stockholders that we spoke with expressed support of our peer group selection and process, support for our equity programs (including utilization of options and RSUs for senior personnel and support for options as an appropriate performance-based component at this stage of our development), and appreciation of the evolution of our compensation program and the inclusion of stock ownership and clawback policies. In addition, the majority of these stockholders encouraged further disclosure on our peer group (which we have sought to address in this proxy statement), a continued focus on the role of performance-based equity in our compensation program, and continued active engagement with investors.
As a result of these stockholder discussions, as well as through the Compensation Committee’s regular annual review process, the Compensation Committee determined to take certain actions to further enhance the pay-for-performance alignment of our executive compensation program for 2021 and beyond. Specifically, the actions taken by the Compensation Committee (and the full Board of Directors, in the case of the two new policies noted below), included:
adjusting the peer group in December 2020 following a significant shift in our market capitalization that moved us significantly below the median of the peer group originally approved by the Compensation Committee in June 2020;
adding PSUs to our equity mix for executive officers to further incentivize long-term corporate performance and better align their interests with those of our stockholders; and
strengthening our corporate governance by adopting a clawback policy in March 2021, in addition to the stock ownership policy we adopted in March 2020.
We are committed to continuing our ongoing engagement with our stockholders on matters of executive compensation and corporate governance. As our stockholders’ views and market practices on executive compensation evolve, the Compensation Committee will continue to evaluate and, when needed, make changes to our executive compensation program, ensuring that the program continues to reflect our pay-for-performance compensation philosophy and objectives.
As we value the opinions of our stockholders, our Board of Directors and the Compensation Committee will continue to consider the feedback received throughout the year, including when making compensation decisions for our executive officers in the future. In addition, consistent with the recommendation of our Board of Directors and the preference of our stockholders as reflected in the non-binding, advisory vote on the frequency of future Say-on-Pay votes held at our 2018 Annual Meeting of Stockholders, we intend to continue holding an annual Say-on-Pay vote. Our next Say-on-Pay vote will be held at the 2022 Annual Meeting.
Governance of Executive Compensation Program
Role of the Compensation Committee and the Board of Directors
The Compensation Committee discharges many of the responsibilities of our Board of Directors relating to the compensation of our executive officers, including our NEOs. The Compensation Committee oversees and evaluates our compensation and benefits policies generally, and the compensation plans, policies and practices applicable to our CEO and other executive officers. As described below, the Compensation Committee retains a compensation consultant to provide support in its review and assessment of our executive compensation program.
In addition, during 2020, pursuant to our Amended and Restated Equity Award Grant Policy, or Equity Award Grant Policy, the Compensation Committee delegated to a committee comprised of our CEO and another executive (which in practice has been our Chief Human Resources Officer), the authority to approve grants of equity awards to certain non-executive employees, subject to certain parameters, under the 2015 Plan and any other equity compensation plan that the Compensation Committee or the Board may determine to be subject to the policy, excluding our 2017 Inducement Equity Plan, or 2017 Inducement Plan. See “Other Compensation Policies and Practices—Equity Award Grant Policy.”
At the beginning of the year, the Compensation Committee reviews and approves the primary elements of compensation—base salary increases, annual cash bonuses, and annual equity awards—for our CEO, and for all individuals at or above the level of Vice President who report directly to our CEO, which includes our other NEOs. In addition, the Compensation Committee may deem it advisable to review and approve subsequent compensation opportunities for our CEO and such other individuals.
Compensation-Setting Factors
When reviewing and approving the amount of each compensation element and the target total compensation opportunity for all individuals at or above the level of Vice President who report directly to our CEO, which includes our other NEOs, the Compensation Committee considers the following factors:
our performance against the annual corporate goals established by the Compensation Committee in consultation with management;
322021 Proxy Statementï Global Blood Therapeutics, Inc.
each executive officer’s skills, experience and qualifications relative to other similarly-situated executives at the companies in our compensation peer group and/or selected broad-based compensation surveys;
the scope of each executive officer’s role compared to other similarly-situated executives at the companies in our compensation peer group and/or selected broad-based compensation surveys;
the performance of each individual executive officer, based on an assessment of his or her contributions to our overall performance, ability to lead his or her department and work as part of a team, all of which reflect our core values;
compensation parity among our executive officers, and our employee population in general, that aligns with our commitment to diversity, equity and inclusion;
our financial performance relative to our peers;
the compensation practices of our compensation peer group and selected broad-based compensation surveys and the positioning of each executive officer’s compensation in a ranking of peer company compensation levels based on competitive market data; and
the recommendations provided by our CEO with respect to the compensation of our other executive officers.
These factors provide the framework for compensation decisions for each of our executive officers, including our NEOs. The Compensation Committee does not assign relative weights or rankings to these factors, and does not consider any single factor as determinative in the compensation of our executive officers. Rather, the Compensation Committee relies on its own knowledge and judgment in assessing these factors and making compensation decisions.
Role of Management
In discharging its responsibilities, the Compensation Committee works with management, including our CEO. Our management assists the Compensation Committee by providing information on corporate and individual performance, market compensation data and management’s perspective on compensation matters.
In addition, at the beginning of each year, our CEO reviews the performance of our other executive officers, including our other NEOs, based on our achievement of our annual corporate goals and each executive officer’s achievement of his or her departmental and individual goals established for the prior year and his or her overall performance during that year. The Compensation Committee solicits and reviews our CEO’s recommendations for base salary increases, annual cash bonuses, annual equity awards and any other compensation opportunities for our other executive officers, including our other NEOs, and considers our CEO’s recommendations in determining such compensation.
Role of Compensation Consultant
The Compensation Committee engages an external compensation consultant to assist it by providing information, analysis and other advice relating to our executive compensation program. For 2020, the Compensation Committee engaged Compensia as its compensation consultant to advise on executive compensation matters, including:
review and analysis of the compensation for our executive officers, including our NEOs;
a review and analysis of the compensation for the non-employee members of the Board of Directors, including an analysis of a proposed equity award for a returning non-employee director;
review and input on the Compensation Discussion and Analysis section of our proxy statement for our 2020 Annual Meeting of Stockholders;
a qualitative and quantitative assessment of our Say-on-Pay proposal;
an analysis of the company original and year-to-date equity usage;
review, research, and updating of our compensation peer group;
an evaluation of performance-based equity alternatives;
a review of market practice with respect to compensation recovery policies;
a review of market practice with respect to stock ownership guidelines;
an analysis of competitive market compensation practices for the chief medical officer and chief operating officer positions;
a compensation-related risk assessment;
an analysis of a total equity budget and equity grant guidelines for the coming year;
Global Blood Therapeutics, Inc. ï2021 Proxy Statement33
an assessment of executive compensation trends within our industry, and updating on corporate governance and regulatory issues and developments; and
support on other compensation matters as requested throughout the year.
Compensia reports directly to the Compensation Committee and to the chair of the Compensation Committee. Compensia also coordinates with our management for data collection and job matching for our executive officers. Compensia did not provide any other services to us in 2020. The Compensation Committee has evaluated Compensia’s independence pursuant to the listing standards of the relevant NASDAQ and SEC rules and has determined that no conflict of interest has arisen as a result of the work performed by Compensia.
Role of Market Data
For purposes of comparing our executive compensation against the competitive market, the Compensation Committee reviews and considers the compensation levels and practices of a group of peer companies. This compensation peer group consists of public biotechnology companies that are similar to us in terms of market capitalization, stage of development, geographical location and number of employees. The Compensation Committee reviews our compensation peer group at least annually and makes adjustments to our peer group if necessary, taking into account changes in both our business and our peer companies’ businesses.
In July 2019, the Compensation Committee, with the assistance of Compensia, reviewed our compensation peer group to determine our peer group for the remainder of 2019 and for 2020. The Compensation Committee considered our potential estimated revenues in 2020, the increase in our market capitalization and headcount and the near-commercial stage of our lead product candidate, as reflected in the following criteria:
publicly traded companies headquartered in the United States;
companies in the biotechnology and pharmaceutical sector;
similar estimated revenues in 2020—up to 4.0x our projected 2020 revenue of approximately $150 million (resulting in a range of $46 million to $600 million)—new criteria for 2019/2020;
similar market capitalization—within a range of approximately 0.33x to approximately 3.0x our then-current market capitalization of approximately $3.3 billion (approximately $1.1 billion to approximately $9.9 billion);
the stage of development of each company’s lead candidate (with a preference for companies with candidates pending approval, approved or commercialized, and excluding companies whose lead candidates were in Phase 2 or Phase 3 development);
companies developing either orphan drugs or with a rare disease focus; and
similar headcount—within a range of approximately 0.33x to approximately 3.0x our then-current headcount of 171 employees (approximately 50 to 500 employees).
Based on a review of the analysis prepared by Compensia, the Compensation Committee approved the updated compensation peer group below for the remainder of 2019 and for 2020.
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(3) |
2019—2020 Compensation Peer Group |
| | | | |
ACADIA Pharmaceuticals Acceleron Pharma Agios Pharmaceuticals Aimmune Therapeutics Alnylam Pharmaceuticals Amicus Therapeutics bluebird bio | | The amounts reported in this column include employer matching contributions by us in connection with the Company's 401(k) plan benefits. |
(4) | | Includes $684,855 representing the grant date fair value of 201,428 shares of restricted stock awarded to and purchased by Dr. Love, which are subject to time-based vesting, and $337,569 representing the grant date fair value of 99,285 shares of restricted stock awarded to and purchased by Dr. Love with market-contingent vesting. The grant date fair value of an additional 99,285 shares of restricted stock awarded to and purchased by Dr. Love with performance-based vesting assuming achievement of the highest level of performance is $337,569. |
(5)Coherus Biosciences Epizyme FibroGen Insmed Intercept Pharmaceuticals Nektar Therapeutics | | Includes $175,112 representing the grant date fair value of an option to purchase 77,142 shares of common stock subject to time-based vesting. The grant date fair value of an additional stock option granted to Dr. Ramos during 2015 with performance-based vesting assuming achievement of the highest level of performance is $51,282. |
(6) | | Amount reported under "Stock Awards" includes $31,569 representing the grant date fair value of 9,285 shares of restricted stock awarded to and purchased by Dr. Sham, which are subject to time-based vesting. Amount reported under "Option Awards" includes $147,550 representing the grant date fair value of an option to purchase 65,000 shares of common stock subject to time-based vesting. The grant date fair value of an additional stock option granted to Dr. Sham during 2015 with performance-based vesting assuming achievement of the highest level of performance is $43,394.Portola Pharmaceuticals Regenxbio Sage Therapeutics Sarepta Therapeutics Spark Therapeutics Ultragenyx Pharmaceuticals |
342021 Proxy Statementï Global Blood Therapeutics, Inc.
The following chart illustrates that our market capitalization was at about the median against this peer group as of the time Compensia prepared its final recommendation, using the median for our company and the median for the peer group:
The Compensation Committee uses market data—from our compensation peer group and from the Radford Global Life Sciences Compensation survey—as one factor in evaluating whether the compensation for our executive officers is competitive in the market. The Compensation Committee also relies on its own knowledge and judgment in evaluating market data and making compensation decisions.
In June 2020, the Compensation Committee, with the assistance of Compensia, reviewed our compensation peer group to determine its continuing relevancy in the current economic environment. For this purpose, the Compensation Committee considered our then estimated revenues in 2021, the increase in our market capitalization and headcount and the status of Oxbryta, as reflected in the following criteria:
publicly traded companies headquartered in the United States;
companies in the biotechnology and pharmaceutical sectors;
similar estimated revenues in 2021 of less than $1.1 billion, approximately 2.5x (down from 4.0x in 2019/2020) our projected 2021 revenue;
similar market capitalization—within a range of approximately 0.33x to approximately 3.0x our then-current market capitalization of approximately $4.8 billion (approximately $1.6 billion to approximately $14.5 billion);
the stage of development of each company’s lead candidate as pending approval, approved, or commercialized, and excluding candidates in the diagnostics and animal health fields;
companies with a focus on orphan drugs or rare disease indications; and
similar headcount to our headcount of approximately 0.33x to approximately 3.0x our then-current headcount of 356 employees (approximately 120 to approximately 1,100 employees).
Based on a review of the analysis prepared by Compensia, the Compensation Committee approved the updated compensation peer group below for 2021, which was not used to make any compensation decisions.
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(7) |
2021 Compensation Peer Group |
| | | | |
ACADIA Pharmaceuticals Acceleron Pharma Agios Pharmaceuticals Amarin Amicus Therapeutics Bluebird bio | | Dr. Sinha’s employment with the Company ended in June 2015. We entered into a Termination Letter Agreement with Dr. Sinha on July 14, 2015, which provided for the payment of cash severance, the continuation of certain benefits, and accelerated vesting for certain of Dr. Sinha’s outstanding restricted stock. See “Termination Agreement with Uma Sinha, M.D.” for further details. Pursuant to the Termination Letter Agreement with Dr. Sinha, the vesting of 54,998 shares of restricted stock was accelerated, and the Company recognized an expense of $293,182 resulting from the acceleration. The amount reported for Dr. Sinha under (a) "Stock Awards" includes $116,569 representing the grant date fair value of 34,285 shares of restricted stock awarded to and purchased by Dr. Sinha, which were subject to time-based vesting and $293,182 in expense resulting from the acceleration of vesting of restricted stock described above, (b) "Option Awards" includes $129,712 representing the grant date fair value of an option to purchase 57,142 shares of common stock subject to time-based vesting and (c) "All Other Compensation" represents cash severance paid to her pursuant to the Termination Letter Agreement. | | Blueprint Medicines Epizyme Exelixis FibroGen Insmed Immunomedics | | | | Intercept Pharmaceuticals Nektar Therapeutics REGENXBIO Sage Therapeutics Sarepta Therapeutics Ultragenyx Pharmaceuticals |
Global Blood Therapeutics, Inc. ï2021 Proxy Statement35
Base Salaries. OurIn December 2020, in light of the sharp decline in our stock price starting in November 2020 (which had an impact on our market capitalization), the Compensation Committee, with the assistance of Compensia, reviewed the above compensation peer group again to determine a more suitable group of peer companies for 2021. The Compensation Committee used the same criteria that it had considered in updating the peer group in June 2020 within a range of 0.33x to approximately 3.0x our then-current market capitalization of approximately $2.7 billion (approximately $89 million to approximately $8.1 billion). Based on its review of the analysis prepared by Compensia, the Compensation Committee approved the updated compensation peer group below for 2021, which has only been used in evaluating the 2021 annual base salary, target annual bonus opportunities and equity awards for our NEOs, and was not used for setting any 2020 compensation elements.
| | | | | | | | |
|
2021 Compensation Peer Group |
| | | | |
Acceleron Pharma Agios Pharmaceuticals Amarin Amicus Therapeutics bluebird bio Blueprint Medicines | | | | Epizyme Exelixis FibroGen Insmed Intercept Pharmaceuticals Intra-Cellular Therapies | | | | Ironwood Pharmaceuticals Nektar Therapeutics Pacira BioSciences REGENXBIO Sage Therapeutics Sorrento Therapeutics |
Primary Elements of Executive Compensation Program
The primary elements of our executive compensation program are:
short-term incentive compensation in the form of annual cash bonuses; and
long-term incentive compensation in the form of annual equity awards.
We do not have a specific policy regarding the percentage allocation between short- and long-term, or fixed and variable, compensation elements. The balance between these components may change from year to year based on corporate strategy, company performance, market forces and company objectives, among other considerations, but consistent with our philosophy of paying for demonstrable performance, our executive compensation program emphasizes at-risk pay over fixed pay. For example, in 2020, our CEO and other NEOs had the following target pay mix:
Our executive officers, including our NEOs, are also eligible to participate in our standard employee benefit plans, such as our health and welfare benefits plans, our 2015 Employee Stock Purchase Plan, or ESPP, and our 401(k) Plan on the same basis as our other employees. In addition, as described below, our executive officers, including our NEOs, are entitled to certain change-in-control severance payments and benefits and certain termination payments and benefits not in connection with a change in control pursuant to our Amended and Restated Severance and Change in Control Policy.
Base Salary
We pay base salaries to our executive officers, including our NEOs, as the fixed portion of their compensation to provide them with a reasonable degree of financial certainty, and to attract and retain top-performing individuals. At the time of hire, base salaries are determined for our executive officers, including our NEOs, based on the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above. Typically, at the beginning of each year, the
362021 Proxy Statementï Global Blood Therapeutics, Inc.
Compensation Committee reviews base salaries for our executive officers, including our NEOs, based on such factors to determine if an increase is appropriate. In addition, base salaries may be adjusted in the event of a promotion or significant change in responsibilities.
2020 Annual Base Salary
In January 2020, the Compensation Committee reviewed the base salaries of our executive officers, including our namedNEOs. The Compensation Committee considered the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above. In particular, the Compensation Committee increased Dr. Love’s base salary to better align with the median of the competitive market based on the individuals holding the chief executive officer position at the companies in our compensation peer group. Effective in February 2020, the Compensation Committee approved the base salaries of our NEOs below.
| | | | | | |
| | | |
NEO | | 2019 Annual
Base Salary | | 2020 Annual
Base Salary | | Percentage Increase |
| | | |
Dr. Love | | $600,000 | | $670,000 | | 12% |
| | | |
Mr. Farrow | | $442,500 | | $460,000 | | 4% |
| | | |
Mr. Johnson | | $455,000 | | $465,000 | | 2% |
| | | |
Ms. Choi | | $420,000 | | $435,000 | | 4% |
| | | |
Ms. Suvari | | $405,000 | | $425,000 | | 5% |
The actual base salaries paid to our NEOs in 2020 are set forth in the “Summary Compensation Table” below.
Short-Term Incentive Compensation
Annual Cash Bonuses
We provide short-term incentive compensation opportunities to our executive officers, including our NEOs, in the form of annual cash bonuses to drive our short-term success. Our annual cash bonuses for 2020 were tied to the achievement of annual corporate and individual performance goals pursuant to our Cash Incentive Bonus Plan, as amended from time to time, or Cash Incentive Plan, and makesno adjustments (or,were made in the case of our Chief Executive Officer, may recommend adjustments for approval by the Board of Directors) as it determines to be reasonable and necessary to reflect the scopelight of the executive officer’s performance, contributions, responsibilities, experience, prior salary level, position (inCOVID-19 pandemic.
Corporate and Individual Performance Goals
At the casebeginning of a promotion) and market conditions, including base salary amounts relative to similarly situated executive officers at peer group companies.
Cash Incentive Compensation. In January 2016, the Board of Directors adopted the Company's Senior Executive Cash Incentive Bonus Plan (the “Incentive Plan”), which applies to certain key executives (the “Covered Executives”), that are recommended byeach year, the Compensation Committee, after reviewing management’s proposal, establishes the annual corporate performance goals that it believes will be the most significant drivers of our short- and selectedlong-term success. The corporate performance goals include target achievement dates based on calendar quarters. Each corporate performance goal has a percentage weighting, and may include an additional percentage weighting for overachievement, based on the Compensation Committee’s assessment of the goal’s relative significance.Each executive officer is responsible for contributing to the corporate objectives, individually, and as part of the leadership team. In approving individual bonus awards, the compensation committee considers the individual contribution towards the company’s achievement of the corporate objectives by each executive officer (other than the BoardCEO), with a significant weighting towards corporate as compared to individual achievement as described in greater detail below. This weighting is the same for each of Directors. The Incentive Plan providesour executive officers, including our NEOs, who are at the same management level. Our CEO does not have individual performance goals. Rather, his annual cash bonus is based 100% on achievement of our corporate performance goals in recognition of his overall responsibility for bonus payments based uponour corporate performance.
At the attainmentbeginning of the year after the corporate performance objectivesgoals are established, by the Compensation Committee, and related to operational and financial metrics with respect to the Company or any of its subsidiaries (the “Corporate Performance Goals”), which may includeafter reviewing management’s self-assessment, evaluates our achievement of specified researchthe prior year’s corporate performance goals, and development, publication, clinical and/or regulatory milestones, total shareholder return, earnings before interest, taxes, depreciation and amortization, net income (loss) (either before or after interest, taxes, depreciation, stock compensation expense, restructuring charges and/or amortization), changesour overall success in the market priceprior year, and determines our total percentage achievement level. Our CEO evaluates the other executive officers, including the other NEOs, in terms of their individual performance in the prior year, and makes recommendations for a total percentage achievement level for each executive officer. The Compensation Committee considers our CEO’s recommendations, and independently reviews and approves the total percentage achievement level for each of the Company’s common stock, economic value-added, funds from operations or similar measure, sales or revenue, acquisitions or strategic transactions, operating income (loss), cash flow (including, but not limitedother executive officers, including our other NEOs.
Target Annual Bonuses
The target annual bonus is determined for each of our executive officers, including our NEOs, at the beginning of each year, by reference to operating cash flow and free cash flow), return on capital, assets, equity, or investment, return on sales, gross or net profit levels, productivity, expense, margins, operating efficiency, customer satisfaction, working capital, earnings (loss) per share of the Company’s common stock; bookings, new bookings or renewals; sales or market shares; number of customers, number of new customers or customer references; operating income and/or net annual recurring revenue. Any bonuses paid under thethen applicable Cash Incentive Plan, will be based upon objectively determinable bonus formulas that tie suchwhich sets out the target annual bonuses to one or more performance targets relating tofor employees by position level. In approving the Corporate Performance Goals. The bonus formulas will be adopted in each performance period byCash Incentive Plan, the Compensation Committee considers the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above, with an emphasis on market data from our
Global Blood Therapeutics, Inc. ï2021 Proxy Statement37
compensation peer group for comparable positions. Target annual bonuses are the same for executive officers, including our NEOs, who are at the same level, and communicated to each Covered Executive. No bonuses will be paid under the Incentive Plan unless and untilrepresent a specific percentage of annual base salary.
In January 2020, the Compensation Committee makes a determination with respect toreviewed the attainmenttarget annual bonuses of the performance objectives. Notwithstanding the foregoing, theour executive officers, including our NEOs. The Compensation Committee may adjustconsidered the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above, particularly market data from the companies in our compensation peer group, and approved the 2020 target annual bonuses payable under the Incentive Plan based on achievement of individual performance goals or pay bonuses (including, without limitation, discretionary bonuses) to Covered Executives under the Incentive Plan based on individual performance goals and/or upon such other terms and conditions as theour NEOs.
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | |
| | | 2019 | | | | 2020 |
| | | | | |
NEO | | Target Annual Bonus | | Goal Weighting
Corporate/Individual | | | | Target Annual Bonus | | Goal Weighting
Corporate/Individual |
| | | | | |
Dr. Love | | | | 60% | | | | | 100%/0% | | | | | | | | | | 70% | | | | | 100%/0% | |
| | | | | |
Mr. Farrow | | | | 40% | | | | | 75%/25% | | | | | | | | | | 50% | | | | | 80%/20% | |
| | | | | |
Mr. Johnson | | | | 40% | | | | | 75%/25% | | | | | | | | | | 50% | | | | | 80%/20% | |
| | | | | |
Ms. Choi | | | | 40% | | | | | 75%/25% | | | | | | | | | | 50% | | | | | 80%/20% | |
| | | | | |
Ms. Suvari | | | | 40% | | | | | 75%/25% | | | | | | | | | | 50% | | | | | 80%/20% | |
Annual Cash Bonus Formula
The Compensation Committee may in its discretion determine.
Equity Incentive Compensation. We generally grant stock optionsuses the following formula to calculate annual cash bonuses for each of our employees,executive officers, including our named executive officers, in connection with their initial employment with us. Prior to our initial public offering in August 2015, we have also granted to employees, including certain of our named executive officers, at their election, shares of restricted stock purchased at fair market value, as determined byNEOs:
382021 Proxy Statementï Global Blood Therapeutics, Inc.
2020 Corporate Performance Goals
In January 2020, our Board of Directors at the time of grant. We also have historically granted stock optionsapproved our 2020 annual corporate performance goals and prior to our initial public offering, in the case of certain of our named executive officers, at their election, shares of restricted stock purchased at fair market value,weightings as determined by our Board of Directors at the time of grant on an annual basis as part of annual performance reviews of our employees.
Outstanding Equity Awards at Fiscal Year-End
The following table setsset forth certain information with respect to outstanding equity awards held by each of our named executive officers as of December 31, 2015.
|
| | | | | | | | | | | | | | | | | | | | | | |
| | | Option Awards | | Stock Awards |
| Name | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable (1) | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)(1) | | Option Exercise Price ($) | | Option Expiration Date | | Number of shares of stock that have not vested (#)(1) | | Market value of shares of stock that have not vested ($)(2) | | Equity Incentive Plan Awards: Number of unearned shares or options that have not vested (#) | | Equity Incentive Plan Awards: Market value or payout value of unearned shares or options that have not vested ($)(3) |
| (a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | (j) |
| Ted W. Love, M.D. | | — | | — | | — | | — |
| | — |
| | 9,375 | (4) | 303,094 | | — | | — |
|
| | — | | — | | — | | — | | — |
| | 446,428 | (5) | 14,433,017 | | — | | — |
|
| | — | | — | | — | | — | | — |
| | 176,249 | (6) | 5,698,130 | | — | | — |
|
| | — | | — | | — | | — | | — |
| | — | | — | | 99,285 | (7) | 3,209,884 |
|
| | — | | — | | — | | — | | — |
| | — | | — | | 99,285 | (8) | 3,209,884 |
|
| Eleanor L. Ramos, M.D. | | 53,572 | | 89,285 | (9) | — | | $0.49 | | 6/10/2024 |
| | — | | — | | — | | — |
|
| | 9,643 | | 67,499 | (10) | — | | $3.40 | | 4/8/2025 |
| | — | | — | | — | | — |
|
| | — | | — | | 37,142 | (11) | $3.40 | | 4/8/2025 |
| | — | | — | | — | | — |
|
| Hing Sham, Ph.D. | | 5,358 | | 58,928 | (12) | — | | $0.49 | | 9/9/2024 |
| | — | | — | | — | | — |
|
| | 4,063 | | 56,875 | (13) | — | | $3.40 | | 4/8/2025 |
| | — | | — | | — | | — |
|
| | — | | — | | 31,428 | (14) | $3.40 | | 4/8/2025 |
| | — | | — | | — | | — |
|
| | — | | — | — | — | | — | | — |
| | 8,124 | (15) | $262,649 | | — | | — |
|
below. | | | | | | |
| | | |
(1)Category | | All of the equity awards held by our named executive officers will accelerate and become fully vested and exercisable or non-forfeitable if the equity holder is subject to an involuntary termination within 12 months after a sale event. The vesting acceleration of the equity awards held by our named executive officers is described in greater detail in "Employment Arrangements with Our Named Executive Officers- Change in Control Policy". |
(2)Corporate Goal | | Computed in accordance with SEC rules as the number of unvested shares multiplied by the closing market price of our Common Stock on December 31, 2015, which was $32.33. The actual value (if any) to be realized by the officer depends on whether the shares vest and the future performance of our Common Stock. |
(3)Stretch Corporate Goal | | Computed in accordance with SEC rules as the number of unvested shares multiplied by the closing market price of our Common Stock at December 31, 2015, which was $32.33. The actual value (if any) to be realized by the officer depends on whether the performance milestones related thereto are achieved, whether the shares vest following achievement of the performance milestones, and the future performance of our Common Stock. |
(4) | | Dr. Love purchased 21,428 shares of our restricted Common Stock under our 2012 Plan on September 4, 2013 in connection with the commencement of his membership on our Board of Directors. 25% of the shares of restricted Common Stock vested on September 4, 2014, and the remaining shares vest quarterly over the following three years thereafter, subject to Dr. Love's continuous service through each such vesting date. |
(5) | | Dr. Love purchased 714,285 shares of our restricted Common Stock under our 2012 Plan on June 11, 2014 in connection with the commencement of his employment. 25% of the shares of restricted Common Stock vested on June 11, 2015, and the remaining shares vest quarterly over the following three years thereafter, subject to Dr. Love's continuous service through each such vesting date. |
(6) | | Dr. Love purchased 201,428 shares of our restricted Common Stock under our 2012 Plan on April 9, 2015 in connection with an annual replenishment grant. 1/16th of the shares of restricted Common Stock vest on a quarterly basis from the vesting commencement date of April 9, 2015, such that all of the shares will be fully vested on April 9, 2019, provided Dr. Love remains in continuous service through each such vesting date. |
| Weighting |
| | | |
(7)Oxbryta | | Dr. Love purchased 99,285 shares of our restricted Common Stock under our 2012 Plan on April 9, 2015. 25%Commercial • Net sales in 2020 exceed $158 million | | Commercial • Net sales in 2020 exceed $178 million | | 50% (subject to increase to 75% upon achievement of the shares are subject to vesting upon the achievement of each of four (4) specified corporate operating milestones on or before certain specified dates, subject to Dr. Love’s continuous service through each such vesting date. On March 10, 2016, the Compensation Committee determined that one of the four corporate milestones was met within the specified timelinestretch goal, and accordingly 24,822 shares of the shares in column (i) vested.includes linear interpolation for determining payout) |
(8) | | | |
| | Dr. Love purchased 99,285 sharesClinical • First dose in clinical study of our restricted Common Stock under our 2012 PlanOxbryta at doses outside of approved labeling by third quarter | | | | 5% |
| | | |
| | Regulatory • Gain FDA agreement on April 9, 2015. The shares will not vest until our market capitalization (determined based onregulatory path to support label expansion in pediatric patients and secure scientific advice to inform EU strategy | | | | 5% |
| | | |
| | Geographic Expansion • Execute Saudi Arabia partnering/distributor agreement and advance plan for certain other geographies | | Geographic Expansion • Saudi Arabia by third quarter, or another specified territory | | 10% (subject to increase to 20% upon achievement of the numberstretch goal) |
| | | |
Pipeline | | • File investigational new drug, or IND, application for inclacumab • File IND for GBT601 | | • File inclacumab IND by third quarter | | 20% (subject to increase to 40% upon achievement of sharesthe stretch goal) |
| | | |
Corporate | | • Achieve certain business development goals • Complete year with a cash reserve of common stock outstanding multiplied by the closing market price for our common stock as reported on NASDAQ) exceeds at least $2.0 billion for 20 consecutive trading days on or before the date twenty-four (24) months after the closing of our initial public offering (IPO), which was on August 11, 2015. |
(9)a certain minimum• Maintain voluntary turnover below industry standard | | Dr. Ramos received a grant of an option to purchase 142,857 shares of our Common Stock under our 2012 Plan on June 11, 2014 in connection with the commencement of her employment. 25% of the shares subject to the option vested on June 11, 2015, and the remaining shares vest quarterly over the following three years thereafter, subject to Dr. Ramos' continuous service through each such vesting date. |
(10) | | Dr. Ramos received a grant of an option to purchase 77,142 shares of our Common Stock under our 2012 Plan10% |
Global Blood Therapeutics, Inc. ï2021 Proxy Statement39
2020 Annual Cash Bonuses
In January 2021, the Compensation Committee evaluated our achievement of the 2020 corporate performance goals. The Compensation Committee considered whether we had achieved each goal, the weighting established for each goal, including the weighting for overachievement, management’s self-assessment, and our overall corporate performance in 2020.
| | | | | | |
| | | |
Goal | | Weighting | | Actual Results | | Bonus Pool
Funding |
| | | |
Oxbryta Net Sales of $158 million in 2020 (stretch of $178 million in 2020) | | 50%
(75% with stretch) | | $123.6 million in 2020 | | 39.6% |
| | | |
First dose in clinical study of Oxbryta at doses outside of approved labeling by third quarter | | 5% | | Achieved in September | | 5% |
| | | |
Regulatory—Gain alignment with FDA on label expansion in ages less than 12 years old and secure scientific advice to inform EU strategy | | 5% | | FDA Type B meeting held in May EU MAA submitted in December | | 5% |
| | | |
Geographic Expansion—Execute Saudi Arabi partnering/distributor agreement (stretch goal by third quarter) and advance plan for certain other geographies | | 10%
(20% with stretch) | | Distribution Agreement for Gulf Cooperation Council region signed in August, achieving stretch goal of third quarter timing | | 20% |
| | | |
Pipeline—File IND for inclacumab (stretch goal of filing such IND by third quarter) and IND for GBT601 | | 20%
(40% with stretch) | | Both INDs filed in November | | 20% |
| | | |
Corporate • Achieve certain business development goals • Complete year with a cash reserve of at least a certain minimum • Maintain voluntary turnover below the industry standard | | 10% | | • Confidential business development goals achieved by year end • Ended 2020 with approximately $580 million in cash, which significantly exceeded the specified minimum • GBT 2020 voluntary turnover at 10.3% compared to life science market at 13.2% | | 10% |
| |
Total | | 99.6% |
The Compensation Committee also reviewed the 2020 individual performance of each of our executive officers, other than our CEO, based on an evaluation conducted by our CEO of their performance against their 2020 individual performance and contribution to the achievement of the corporate objectives above. The Compensation Committee approved an achievement level of 105% of the 2020 individual performance goals for each of our NEOs based upon their scope of responsibilities and significant contributions to us meeting our corporate objectives in 2020.
The table below sets forth the target annual cash bonuses, the relative weighting of corporate and individual performance, the actual achievement level for corporate and individual performance and the 2020 annual cash bonuses earned by our NEOs.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
NEO | | 2020 Annual
Base Salary
($) | | Target Annual
Cash Bonus
(% of annual
base salary) | | Weighting
(corporate/
individual
performance)
(%) | | Corporate
Performance
(%) | | Individual
Performance
(%) | | Annual Cash
Bonus
($) |
| | | | | | |
Dr. Love | | | $ | 670,000 | | | | | 70 | % | | | | 100 | %/0 | | | | 99.6 | % | | | | N/A | | | | $ | 467,000 | |
| | | | | | |
Mr. Farrow | | | $ | 460,000 | | | | | 50 | % | | | | 80 | %/20% | | | | 99.6 | % | | | | 105 | % | | | $ | 231,500 | |
| | | | | | |
Mr. Johnson | | | $ | 465,000 | | | | | 50 | % | | | | 80 | %/20% | | | | 99.6 | % | | | | 105 | % | | | $ | 234,000 | |
| | | | | | |
Ms. Choi | | | $ | 435,000 | | | | | 50 | % | | | | 80 | %/20% | | | | 99.6 | % | | | | 105 | % | | | $ | 219,000 | |
| | | | | | |
Ms. Suvari | | | $ | 425,000 | | | | | 50 | % | | | | 80 | %/20% | | | | 99.6 | % | | | | 105 | % | | | $ | 214,000 | |
402021 Proxy Statementï Global Blood Therapeutics, Inc.
The annual cash bonuses earned by each of our NEOs for 2020 are set forth in the “Summary Compensation Table” below.
Long-Term Incentive Compensation
We view long-term incentive compensation in the form of equity awards as an important element of our executive compensation program. The value of equity awards is directly related to stock price appreciation over time, which incentivizes our executive officers to achieve long-term corporate goals and create long-term value for our stockholders. Equity awards also help us attract and retain top-performing executive officers in a competitive market.
Typically, at the beginning of each year, the Compensation Committee reviews the equity awards for our executive officers, including our NEOs, and determines the size and relative weighting of the annual equity awards it deems reasonable and appropriate based on the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above. The size and relative weighting is the same for each of our executive officers, including our NEOs, who are at the same level. In addition, the Compensation Committee may deem it advisable to grant subsequent equity awards to our executive officers, including our NEOs, and may adjust their equity awards in the event of a promotion or significant change in responsibilities.
2020 Equity Awards
In January 2020, the Compensation Committee considered the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above, particularly market data from the companies in our compensation peer group and selected broad-based compensation surveys, and approved the 2020 annual equity awards for our NEOs below. Mr. Johnson received a larger grant of time-based RSUs than the other non-CEO NEOs, as 5,000 of such RSUs were granted in recognition of his contribution toward us achieving a $4 billion market capitalization milestone.
| | | | |
| | |
NEO | | Stock Options
(Number of Shares) | | Time-Based RSUs
(Number of Shares) |
| | |
Dr. Love | | 114,190 | | 71,640 |
| | |
Mr. Farrow | | 38,500 | | 24,160 |
| | |
Mr. Johnson | | 38,500 | | 29,160 |
| | |
Ms. Choi | | 38,500 | | 24,160 |
| | |
Ms. Suvari | | 38,500 | | 24,160 |
The stock options vest, and become exercisable, over a four-year period, with 1/16th of the underlying shares vesting on a quarterly basis (every three months) after the vesting commencement date of February 1, 2020, so that all of the underlying shares will be vested on the date four years after the vesting commencement date, so long as the NEO remains an employee or other service provider (including a consultant) of the Company on April 9, 2015 in connection with an annual replenishment grant. 1/16th of the shares subject to option vest on a quarterly basis from the vesting commencement date of April 9, 2015, such that all of the shares will be fully vested on April 9, 2019, provided Dr. Ramos remains in continuous service through each such vesting date.
The time-based RSUs vest over a four-year period, with 1/8th of the underlying shares vesting on a semi-annual basis (every six months) after the vesting commencement date of February 1, 2020, so that all of the underlying shares will be vested on the date four years after the vesting commencement date, so long as the NEO remains an employee or other service provider (including a consultant) of the Company on each such vesting date.
Shortly after the World Health Organization declared COVID-19 a pandemic in March 2020, the Compensation Committee began to review whether the above annual equity awards approved in January 2020 would be insufficient in light of the pandemic and our reduced stock price to serve as an appropriate motivational and retention vehicle for our executive officers, particularly as we were entering our first full year of the commercial launch of our first medicine, Oxbryta. To address these concerns, the Compensation Committee decided to grant an additional performance-based equity award to our executive officers, including our NEOs, to provide an opportunity for them to earn equity compensation in line with the 75th percentile of our peer group’s equity compensation for similarly situated executives.
In determining the form of additional equity to grant the NEOs, the Compensation Committee revisited the positive impact of the PSUs the Committee granted our executive officers in August 2017, or 2017 PSUs. The 2017 PSUs were scheduled to vest, if ever, upon the first instance of us achieving a market capitalization of certain specified amounts of up to $4 billion on or before December 31, 2019, which the Compensation Committee considered as a significant threshold at the time such PSUs were granted. The Compensation Committee concluded that the 2017 PSUs had significant motivation and retention value, including in our achievement of the highest market capitalization threshold of $4 billion, which resulted in the vesting of the final tranche of the 2017 PSUs in December 2019.
Effective June 1, 2020, the Compensation Committee granted PSUs to certain of our senior management, including our NEOs, which are eligible to be earned and vest contingent upon the achievement of three escalating and challenging stock
Global Blood Therapeutics, Inc. ï2021 Proxy Statement41
price targets ($109.20, $145.60 and $182.00 per share), based on average closing market price on the NASDAQ Global Select Market over a 20 consecutive trading day period, with the percentage of shares allotted to the three tranches increasing with each tranche. Upon the achievement of each respective stock price target, 50% of the PSUs allotted to that tranche will vest, while the remaining 50% will vest on the first anniversary of the date the stock price target was achieved, subject to the executive officer’s continued employment or other service relationship with us through such vesting date. The Compensation Committee included such delayed vesting to further foster retention and alignment with stockholder interest. Under the terms of the awards, if the stock price targets are not achieved for all or some of the tranches on or before June 30, 2024, the unvested awards will be automatically terminate and be forfeited.
The following illustrates the market capitalization we would need to achieve to meet each of the stock price targets and the relative shareholder value created:
| | | | | | | | | | | | | | |
| | | | | | |
Stock Price | | % Increase | | Approx.
Market Cap* | | NEOs
Shares
Earned | | NEOs Value
Earned | | Shareholder
Value
Creation | | Payouts as a % of
Shareholder Value |
| | NEOs | | Shareholders |
| | | | | | | |
$109.20 | | +50% | | $6.7B | | 62,200 | | $6.8M | | +$1.9B | | 0.3% | | 99.7% |
| | | | | | | |
$145.60 | | +100% | | $9.0B | | 171,050 | | $24.9M | | +$4.2B | | 0.6% | | 99.4% |
| | | | | | | |
$182.00 | | +150% | | $11.2B | | 311,000 | | $56.6M | | +$6.4B | | 0.9% | | 99.1% |
| * | Approximate market cap is calculated from ~61.7M total common shares outstanding. |
Shareholder Value Created at Maximum Payout
The Compensation Committee granted these performance-based awards as a way to further align the incentives of our senior management, including our NEOs, with our stockholders and to further our pay-for-performance compensation philosophy, as the PSUs will only be earned if our stock price appreciates significantly over a four-year period. Moreover, the PSUs serve to further retain our executive officers, including our NEOs, as they have a time-based vesting component in addition to the stock price target, which requires the applicable executive officer to remain employed for one year following the achievement of the applicable stock price target in order to fully receive the number of PSUs allotted for that tranche. In addition, the Compensation Committee determined to tie achievement of the PSUs to our stock price instead of market capitalization (in contrast to the 2017 PSUs) as it viewed increase in stock price as a better gauge of the return to stockholders than market capitalization, which may simply reflect an increase in the number of shares outstanding rather than an indicator of an increase in equity value.
The PSUs granted to our NEOs are as follows:
| | | | | |
(11) | |
NEO | | Performance-Based RSUs (Number of Shares) |
| |
Dr. Love | | | | Dr. Ramos received a performance-contingent option grant under our 2012 Plan on April 9, 2015. 25% of the shares are subject to vesting upon the achievement of each of four (4) specified corporate operating milestones on or before certain specified dates, subject to Dr. Ramos’ continuous service through each such vesting date . On March 10, 2016, the Compensation Committee determined that one of the four corporate milestones was met within the specified timeline and accordingly 9,286 of the shares in column (d) vested.141,400 | |
(12) | |
Mr. Farrow | | | | Dr. Sham received a grant of an option to purchase 85,714 shares of our Common Stock under our 2012 Plan on September 10, 2014 in connection with the commencement of his employment. 25% of the shares subject to the option vested on September 10, 2015, and the remaining shares vest quarterly over the following three years thereafter, subject to Dr. Sham’s continuous service through each such vesting date. On August 17, 2015, Dr. Sham exercised the option with respect to 21,428 vested shares, which are not included in the table above.42,400 | |
(13) | |
Mr. Johnson | | | | Dr. Sham received a grant of an option to purchase 65,000 shares of our Common Stock under our 2012 Plan on April 9, 2015 in connection with an annual replenishment grant. 1/16th of the shares subject to option vest on a quarterly basis from the vesting commencement date of April 9, 2015, such that all of the shares will be fully vested on April 9, 2019, provided Dr. Sham remains in continuous service through each such vesting date. On August 17, 2015, Dr. Sham exercised the option with respect to 4,062 vested shares, which are not included in the table above.42,400 | |
(14) | |
Ms. Choi | | | | Dr. Sham received a performance-contingent option grant under our 2012 Plan on April 9, 2015. 25% of the shares are subject to vesting upon the achievement of each of four (4) specified corporate operating milestones on or before certain specified dates, subject to Dr. Sham’s continuous service through each such vesting date. On March 10, 2016, the Compensation Committee determined that one of the four corporate milestones was met within the specified timeline and accordingly 7,857 shares of the shares in column (d) vested.42,400 | |
(15) | |
Ms. Suvari | | | | Dr. Sham purchased 9,285 shares of our restricted Common Stock under our 2012 Plan on April 9, 2015 in connection with an annual replenishment grant. 1/16th of the shares of restricted Common Stock vest on a quarterly basis from the vesting commencement date of April 9, 2015 such that all of the shares will be fully vested on April 9, 2019, provided Dr. Sham remains in continuous service through each such vesting date.
42,400 | |
The equity awards granted to our NEOs in 2020 are set forth in the “Summary Compensation Table” and the “Grants of Plan-Based Awards for Fiscal Year 2020” table below.
422021 Proxy Statementï Global Blood Therapeutics, Inc.
Other Employee Benefits
Health and Welfare Benefits
Our executive officers, including our NEOs, are eligible to participate in the same employee benefit plans that are generally available to all of our employees, subject to the satisfaction of certain eligibility requirements, such as medical, dental, and life and disability insurance plans. We pay, on behalf of our employees, all or a portion of the premiums for health, life and disability insurance.
2015 Employee Stock Purchase Plan
Our executive officers, including our NEOs, are eligible to participate in our ESPP on the same basis as our other full-time employees. The ESPP permits eligible employees to set aside a portion of their compensation during offering periods that are generally two years long, with purchase periods generally every six months during each offering period, and use such contributions to purchase shares of our common stock at a purchase price equal to 85% of the lower of the fair market value of the shares on the first business day of the offering period or the last business day of the purchase period.
401(k) Savings Plan and Other Benefits
We maintainOur U.S. executive officers, including our NEOs, are eligible to participate in a tax-qualified retirement plan, or the 401(k) Plan, thaton the same basis as our other employees. The 401(k) Plan provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees are able to defer eligible compensation subject to applicable annual limits of the Internal Revenue Code of 1986, as amended, (the “Code”) limits.or the Code. Employees’ pre-tax contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions. Employees are immediately and fully vested in their contributions. Our 401(k) Plan is intended to be qualified under Section 401(a) of the Code with our 401(k) Plan’s related trust intended to be tax exempt under Section 501(a) of the Code. As a tax-qualified retirement plan, contributions to our 401(k) Plan and earnings and matching amounts on those contributions are not taxable to the employees until distributed from our 401(k) Plan. In
Since December 2015, the Company has approved various matching contributions under the 401(k) Plan. Under our Compensation Committee approved a 401(k) plancurrent matching policy, under which, effective as of January 1, 2016, subject to reassessment of the cap on matching for the calendar year thereafter,2018, we match in cash 100% of an employee’s 401(k) contributions up to the first $500 and, thereafter, we match 50% of employee’s first 6% of 401(k) contributions, subject to aan annual cap of $2,500$6,000 per employee. We also pay, on behalf
Perquisites
Perquisites or other personal benefits are not a significant component of our employees, the premiums for health, life and disability insurance.
executive compensation program. Accordingly, we do not provide significant perquisites or other personal benefits to our executive officers, including our NEOs.Employment Arrangements with Our Named Executive Officers
Change in Control Policy
our NEOsPost-Employment Compensation
We consider it essential to the best interests of our stockholders to foster the continuous employment of our key management personnel. In this regard,Accordingly, we recognizebelieve that reasonable and competitive post-employment compensation arrangements are an important part of an executive compensation program to attract and retain highly-qualified senior executives. While the Compensation Committee does not consider the specific amounts payable under these post-employment compensation arrangements when determining the annual compensation of our NEOs, we believe that providing our executive officers with post-employment payments and benefits if they lose their position in connection with a change in control are in the best interests of our stockholders because the possibility of a change in control and the related uncertainty may exist and that the uncertainty and questions that it may raise among management could result inlead to the departure or distraction of management personnelsenior executives to the detriment of our company and stockholders.
In July 2015, our Board of Directors adopted a change in control policy, which has been subsequently amended and restated (the “Amended and Restated Severance and Change in Control Policy”). The Amended and Restated Severance and Change in Control Policy provides our NEOs with certain payments and benefits upon a qualified termination event outside of a Change in Control Period (as defined below). Based on its review of our pre-amended and restated change in control policy compared to the Companypost-employment compensation arrangements of the companies in our compensation peer group, the Compensation Committee determined that these changes were necessary to recruit and retain top talent and to align with market norms. The Amended and Restated Severance and Change in Control Policy applies to our stockholders. In order to reinforceexecutive officers, including our NEOs, and encouragereinforces and encourages the continued attention and dedication of certain key memberssenior executives in the event of management,a change in July 2015,control by providing these executive officers with certain cash payments, equity acceleration and other benefits upon a qualifying termination of employment event in connection with a change in control.
Pursuant to our Board of Directors adopted aAmended and Restated Severance and Change in Control Policy, which was amended in January 2016 (the “Policy”). Pursuant to the Policy, in the event the employment of any of our named executive officersNEOs is terminated by us or our acquirer or successor without Cause or an NEO resigns for Good Reason (as such
Global Blood Therapeutics, Inc. ï2021 Proxy Statement43
terms are defined in the Policy)our change in control policy), in either case, within one year after the consummation of a saleSale Event (as defined in the 2015 Plan) (such one-year period, the “Change in Control Period”), he or she will be entitled to receive the following payments and benefits, or CIC Benefits, subject to his or her execution and non-revocation of a severance agreement within 60 days following the date of such termination, including a general release of claims in our favor:
a lump sum cash payment equal to 12 months (or 18 months in the case of our CEO) of the NEO’s “base salary” (i.e., the greater of the NEO’s base salary in effect immediately prior to the termination or the base salary in effect immediately prior to the Sale Event, as applicable);
a lump sum cash payment equal to 100% of the NEO’s annual “target incentive bonus” (i.e., the greater of the NEO’s target bonus in effect immediately prior to the termination or the target bonus in effect immediately prior to the Sale Event, as applicable) for the year in which the closing of the Sale Event occurred, which, under our Amended and Restated Severance and Change in Control Policy, was increased from 100% to 150% in the case of our CEO;
a lump sum cash payment equal to the prorated annual cash bonus payout of the NEO for the portion of the year in which the closing of the Sale Event occurred, based on the NEO’s target annual bonus and the date of termination of his or her employment or other service relationship with us;
if the NEO elects to continue his or her group healthcare benefits, a cash payment of an amount equal to the monthly employer contribution we would have made to provide the NEO with health insurance if he or she had remained employed by us until the earlier of (i) 12 months (or 18 months in the case of our CEO) following the date of termination, or (ii) the end of the NEO’s COBRA health continuation period; and
full acceleration of vesting of all outstanding equity awards under the 2015 Plan, the 2017 Inducement Plan and such additional equity incentive plans and arrangements as may be applicable from time to time, including all performance-based equity awards, which will accelerate and vest based on the deemed achievement of 100% of the target performance levels as of the date of the NEO’s termination.
As described above, the CIC Benefits are “double trigger” because the change in control alone does not trigger such payments and benefits. Rather, the CIC Benefits are triggered only if there is a qualifying termination of an NEO’s employment within the Change in Control Period. In the case of the acceleration of vesting of outstanding equity awards, we use this double-trigger arrangement to protect against the loss of retention value following a change in control of the Company and to avoid windfalls, both of which could occur if vesting of either equity or cash-based awards accelerated automatically as a result of the transaction.
In addition, upon a Sale Event, to the extent Section 280G of the Code, or Section 280G, is applicable, each NEO who is then employed with us will be entitled to receive the better treatment of: (i) payment of the full amounts set forth above to which the NEO is entitled or (ii) payment of such lesser amount that does not trigger excise taxes under Section 280G. None of our NEOs are entitled to excise tax payments (or “gross-ups”) relating to a change in control of the Company.
The payments and benefits provided under our Amended and Restated Severance and Change in Control Policy are designed to be competitive in the market. Pursuant to the Amended and Restated Severance and Change in Control Policy, in the event the employment of any of our NEOs is terminated by us or our acquirer or successor without Cause or an NEO resigns for Good Reason outside of the Change in Control Period, he or she will be entitled to receive the following payments and benefits, subject to his or her execution and non-revocation of a severance agreement within 60 days following the date of such termination, including a general release of claims:claims in our favor:
a lump sum cash payment equal to 12 months of the NEO’s then-current base salary;
in the case of our CEO only, a lump sum cash payment equal to (i) 100% of the CEO’s target incentive bonus for the year in which the termination of his employment or other service relationship with the company occurred, plus (ii) a prorated annual cash bonus payout for the portion of the year in which the termination of his employment or other service relationship with the company occurred, based on the CEO’s annual target bonus and the date of termination of his employment or other service relationship with the company; and
if the NEO elects to continue his or her group healthcare benefits, a cash payment of an amount equal to the monthly employer contribution we would have made to provide the NEO with health insurance if he or she had remained employed by us until the earlier of (i) 12 months following the date of termination, or (ii) the end of the NEO’s COBRA health continuation period.
For an estimate of the potential payments and benefits that our NEOs would have been eligible to receive under the Amended and Restated Severance and Change in Control Policy if a hypothetical change in control or other trigger event had occurred on December 31, 2020, see “Potential Payments on Termination or Change in Control” below.
442021 Proxy Statementï Global Blood Therapeutics, Inc.
Other Compensation Policies and Practices
Equity Award Grant Policy
We adopted an Amended and Restated Equity Award Grant Policy in January 2020, as amended in November 2020, that sets forth the process and timing for us to follow when we grant equity awards for shares of our common stock to our employees, including our executive officers, or advisors or consultants to us pursuant to any of our equity compensation plans. Pursuant to the policy, all grants of equity awards must be approved in advance by our Board of Directors, the Compensation Committee or, subject to the delegation requirements in the policy, our CEO or a committee comprised of the CEO and at least one other executive officer of the Company, or Equity Grant Committee. The Equity Grant Committee is currently comprised of our CEO and another executive (which in practice has been our Chief Human Resources Officer). The equity award granting authority delegated to the Equity Grant Committee applies to non-executive employees and covers awards of stock options and RSUs within specific ranges set forth in the policy, which will be updated annually by the Compensation Committee.
The Amended and Restated Equity Award Grant Policy sets forth that equity awards are generally granted on the following regularly scheduled basis:
Equity awards granted in connection with the hiring of a new employee or the engagement of a new consultant are effective on the first trading day of the month following the later of the date on which such individual’s employment or consulting term begins or the date on which such award is approved by the Board, the Compensation Committee or the Equity Grant Committee.
Equity awards granted in connection with the promotion of an existing employee are effective on the first trading day of the month following the later of the date on which such individual’s promotion occurs or the date on which such award is approved by the Board of Directors, the Compensation Committee or the Equity Grant Committee; provided, that in the case of any promotion effective on the first trading day of a particular month, the award will be effective on the effective date of such promotion so long as the Board of Directors, the Compensation Committee or the Equity Grant Committee approves the award on or before such date.
Equity awards granted to existing employees (other than in connection with a promotion) will generally be granted, if at all, on an annual basis effective on the first trading day of the month following the later of the date on which we complete the focal review process with respect to such individual or the date on which such award is approved by the Board of Directors, the Compensation Committee or the Equity Grant Committee.
Our Board of Directors and the Compensation Committee retain the discretion to grant equity awards at other times to the extent appropriate in light of the circumstances of such awards.
In addition, the policy sets forth the manner in which our equity awards will be priced. If an award of restricted stock or restricted stock units is denominated in dollars, the number of shares subject to the award will be determined by dividing the dollar value by the average closing market price on the NASDAQ Global Market of a share of our common stock over the trailing 20-trading day period ending on the trading day immediately preceding the grant date. The exercise price of all stock options will be at least equal to the closing market price on the NASDAQ Global Market of a share of our common stock on the effective date of grant or if no closing price is reported for such date, the closing price on the last date preceding such date for which a closing price is reported. If the amount of a stock option award is to be determined by reference to a fair value calculated under Financial Accounting Standards Board Accounting Standard Codification Topic 718, Stock Compensation , or FASB ASC Topic 718, then the number of shares to be subject to such stock option will be determined based on such fair value, and the exercise price determined in accordance with the preceding sentence and the approved valuation assumptions, subject to any other limits on the number of shares that may be subject to such stock option.
Policy Prohibiting Hedging and Pledging
Our Insider Trading Policy prohibits our executive officers, the non-employee members of our Board of Directors and certain other employees from engaging in the following transactions:
selling any of our securities that they do not own at the time of the sale (referred to as a “short sale”);
buying or selling puts, calls, other derivative securities of the Company or any derivative securities that provide the economic equivalent of ownership of any of our securities or an opportunity, direct or indirect, to profit from any change in the value of our securities or engaging in any other hedging transaction with respect to our securities without the prior approval of the Audit Committee;
using our securities as collateral in a margin account; and
pledging our securities as collateral for a loan (or modifying an existing pledge) unless the pledge has been approved by the Audit Committee.
Global Blood Therapeutics, Inc. ï2021 Proxy Statement45
As of the date of this Proxy Statement, none of our NEOs or non-employee directors had previously sought or obtained approval from the Audit Committee to engage in any hedging or pledging transaction involving our securities.
Stock Ownership Policy
In March 2020, we adopted a stock ownership policy for our senior executive officers (i.e., our CEO and each member of our senior management team, which includes our NEOs), which requires (i) our CEO to acquire and hold a number of shares of our common stock equal in value to at least six times his or her annual base salary and (ii) each senior management team member to acquire and hold a number of shares of our common stock equal in value to at least two times his or her applicable annual base salary, in each case until such executive’s service as our CEO or senior management team member, respectively, ceases. We only count directly and beneficially owned shares, including shares purchased through our ESPP or 401(k) plan, and 50% of shares underlying vested and unexercised in-the-money stock options. Each executive has until the later of April 1, 2025, the Initial Determination Date, or the April 1st in the year that is the fifth anniversary of his or her initial appointment in the capacity of an executive to attain the required ownership level. Once an executive satisfies his or her stock ownership requirement, the executive must continue to satisfy such stock ownership requirement as assessed on each Determination Date. If an executive fails to satisfy such stock ownership requirement as of any Determination Date (including the Initial Determination Date), then such executive shall be required to come into compliance with his or her applicable stock ownership requirement within two years following the Determination Date on which he or she failed to satisfy such stock ownership requirement. As of April 1, 2021, all of our NEOs met their respective stock ownership requirement:
|
| | | | | | | | | |
| • | |
Name | | Ownership
Requirement | | Actual
Ownership |
| | |
Dr. Love | | | | a lump sum cash payment equal to nine months (or 12 months in the case of Dr. Love as our CEO) of the named executive officer’s then-current base salary;6.0x |
| | 67.7x | |
| | | |
Mr. Farrow | • | | | payment of the named executive officer’s target annual incentive compensation;2.0x |
| | 8.2x | |
| | | |
Mr. Johnson | • | | | if the named executive officer elects to continue his or her group healthcare benefits, payment of an amount equal to the monthly employer contribution we would have made to provide the named executive officer with health insurance if he or she had remained employed by us until the earlier of (i) nine months (or 12 months in the case of Dr. Love as our CEO) following the date of termination or (ii) the end of the named executive officer’s COBRA health continuation period; and2.0x |
| | 2.4x | |
| | |
Ms. Choi | | | | 2.0x | | | 24.4x | |
| • | |
Ms. Suvari | | | | all time-based stock options and other stock-based awards granted to the named executive officer will become fully exercisable and non-forfeitable and all performance-based awards will accelerate and vest based on the deemed achievement of 100% of target levels as of the date of the named executive officer’s termination.2.0x | | | 6.4x | |
Clawback Policy
In addition, uponMarch 2021, we adopted a sale event,policy for recoupment of executive incentive compensation, or Clawback Policy, which provides that if our financial statements are materially restated, whether in part or in their entirety, due to misconduct by one or more covered officer (meaning any Section 16 officer(s)), then our Board of Directors or Compensation Committee will have the discretion to recoup a portion of any performance-based compensation that has been paid or distributed to the covered officer during the clawback period (i.e., the three-year period preceding the publication of the restated financials), to the extent such compensation paid or distributed was in excess of what would have been paid under the restated financials. Our Board of Directors or the Compensation Committee, in its sole discretion, may also reduce the amount of future compensation, including, without limitation, any bonus or severance, or the future grant or vesting of any equity award, payable to any covered officer by an amount equal to such excess proceeds from performance-based compensation received by the covered officer during the clawback period. The Clawback Policy is applicable to all cash and equity-based compensation predicated on the achievement of financial performance goals or financial metrics (excluding any such compensation based on TSR or similar stock price-based metrics).
Tax and Accounting Considerations
Deductibility of Executive Compensation
Generally, Section 280G162(m) of the Internal Revenue Code, or Section 162(m), disallows a federal income tax deduction for public corporations of 1986, as amended,remuneration in excess of $1 million paid in any fiscal year to certain specified former or current executive officers.
Other than for remuneration provided pursuant to written binding contracts which were in effect on November 2, 2017 (and which are not subsequently modified in any material respect), for taxable years beginning after December 31, 2017, all remuneration in excess of $1 million paid to a specified executive will not be deductible.
To maintain flexibility to compensate our executive officers in a manner designed to promote our short- and long-term corporate goals, the Compensation Committee has not adopted a policy that all compensation must be deductible. The Compensation Committee believes that our stockholders’ interests are best served if its discretion and flexibility in awarding compensation is applicable, each namednot restricted in order to allow such compensation to be consistent with the goals of our executive officer whocompensation program, even though some compensation awards may result in non-deductible compensation expense. Consequently, the Compensation Committee will not necessarily limit executive compensation to that which is then employed with us willor may be entitled to receive the better treatment of: (i) payment of the full amounts set forth above to which the named executive officer is entitled or (ii) payment of such lesser amount that does not trigger excise taxesdeductible under Section 280G.162(m).
462021 Proxy Statementï Global Blood Therapeutics, Inc.
Employees who are partyAccounting for Stock-Based Compensation
We follow FASB ASC Topic 718 for our stock-based compensation awards. FASB ASC Topic 718 requires us to an agreement or an arrangement withmeasure the Company that provides greater benefits in the aggregate than set forth in the Policy are not eligible to receive any payments or benefits under the Policy.
In addition, we have also entered into a written employment agreement with each of our named executive officers that providescompensation expense for other compensation and benefits, as described below.
Ted W. Love, M.D.
We entered into an at-will employment offer letter agreement with Dr. Love in May 2014, pursuant to which he began serving as our President and CEO in June 2014 (the “CEO Employment Agreement”). Pursuant to the terms of the CEO Employment Agreement, Dr. Love is entitled to an annual base salary currently set at $485,000, subject to adjustment pursuantall share-based payment awards made to our employee compensation policies in effect from time to time. Pursuant to the termsemployees and non-employee members of the CEO Employment Agreement and the Incentive Plan, Dr. Love is eligible to receive annual incentive compensation at a target percentage (currently 50%) of his then-current annual base salary, as determined by our Board of Directors. In connection with his appointment as President and CEO, we issued Dr. Love 714,285Directors, including stock options to purchase shares of our common stock pursuant to a restrictedand other stock award agreement dated June 11, 2014.
Dr. Love’s employment underawards, based on the
CEO Employment Agreementgrant date “fair value” of these awards. This calculation is
at-will. Inperformed for accounting purposes and reported in the
event that Dr. Love’s employment is terminatedexecutive compensation tables required by the
Company without cause, we will provide certain termination benefits, including (i) continuation of base salary for a period of nine months afterfederal securities laws, even though the
effective date of termination and (ii) continuation of group health plan benefits to the extent authorized by and consistent with COBRA, with the costrecipient of the
regular premium for such benefits shared inawards may never realize any value from their awards.Taxation of “Parachute” Payments
Sections 280G and 4999 of the same relative proportion by usCode provide that executive officers and Dr. Love as in effect on the effective date of termination until the earlier of (x) the date that is nine months after the effective date of terminationdirectors who hold significant equity interests and (y) the date Dr. Love becomes eligible for health benefits through another employer or otherwise becomes ineligible for COBRA, in each case,certain other service providers may be subject to Dr. Love’s execution and non-revocation of a separation agreement and release, resignation from all positions with us and compliance with our instructions regarding Company property.
Under the CEO Employment Agreement, the term “cause” is generally defined as follows:
“cause” means (i) dishonest statementssignificant additional taxes if they receive payments or acts with respect to us or any of our affiliates, or any current or prospective customers, suppliers vendors or other third parties with which such entity does business; (ii) commission of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (iii) failure to perform assigned duties and responsibilities to our reasonable satisfaction, which failure continues, in our reasonable judgment, after written notice by us; (iv) gross negligence, willful misconduct or insubordination with respect to us or any of our affiliates; or (v) material violation of any provision of any agreement(s) between Dr. Love and us relating to noncompetition, nonsolicitation, nondisclosure and/or assignment of inventions.
Dr. Love is also eligible to receive certain post-termination compensation and benefits in connection with a change in control
of the company that exceeds certain prescribed limits, and that the company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We have not agreed to provide any executive officer, including any NEO, with a “gross-up” or other reimbursement payment for any tax liability that the executive officer might owe as a result of the application of Sections 280G or 4999 of the Code.Section 409A of the Internal Revenue Code
Section 409A of the Code imposes additional significant taxes in accordancethe event that an executive officer, director or service provider receives “deferred compensation” that does not satisfy the requirements of Section 409A of the Code. Although we do not maintain a traditional nonqualified deferred compensation plan, Section 409A of the Code does apply to certain severance arrangements, bonus arrangements and equity awards. We structure all our severance arrangements, bonus arrangements and equity awards in a manner to either avoid the application of Section 409A or, to the extent doing so is not possible, to comply with the Policy described above.
Eleanor L. Ramos, M.D.
applicable requirements of Section 409A of the Code.Compensation Risk Assessment
We entered into an employment offer letter agreement with Dr. Ramos, pursuantstructure our pay to which she assumedconsist of both fixed and variable compensation to motivate our employees, including our NEOs, to produce superior short- and long-term results that are in the rolebest interests of Chief Medical Officer in May 2014. The agreement entitles Dr. Ramosour company and stockholders to an annual base salary that is currently set at $380,000, subject to adjustment pursuant toattain our employee compensation policies in effect from time to time. Pursuant to the termsultimate objective of her agreementincreasing stockholder value. In addition, we have established, and the Incentive Plan, Dr. Ramos is eligible to receive annual incentive compensation at a target percentage (currently 40%) of her then-current annual base salary, as determined by the Compensation Committee endorses, several controls to address and mitigate compensation-related risk, such as maintaining an anti-hedging and anti-pledging policy and stock ownership guidelines for our executive officers (including our NEOs) and directors.
The Compensation Committee, in consultation with its compensation consultant, Compensia, evaluates whether our policies and practices create excessive risk in our compensation programs. In 2020, this risk assessment included, among other things, a review of our Boardcash and equity incentive-based compensation plans to ensure that they are aligned with our corporate performance goals and overall target total direct compensation to ensure an appropriate balance between fixed and variable pay components. Based on this assessment, the Compensation Committee concluded that our compensation policies and practices are not reasonably likely to have a material adverse effect on our company.
The Compensation Committee intends to continue to evaluate on an annual basis the potential risks associated with our compensation policies and practices, and has engaged Compensia to conduct an updated assessment of Directors. Pursuantour compensation policies and practices during 2021. As a result of the approval and launch of our first commercial product, Oxbryta, in late 2019, we expect this evaluation will include the potential risks associated with field-based incentive compensation and commercial-related goals and targets.
Global Blood Therapeutics, Inc. ï2021 Proxy Statement47
NEO Compensation Tables
2020 Summary Compensation Table
The following table sets forth information regarding total compensation awarded to, earned by and paid to each of our NEOs during the fiscal years ended December 31, 2020, 2019 and 2018.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Name and Principal Position | | Year | | Salary
($) | | Bonus
($) | | Stock
Awards
($)(1) | | Option
Awards
($)(2) | | Non-equity
incentive plan
compensation
($)(3) | | All other
Compensation
($) | | Total ($) |
| | | | | | | | |
Ted Love, M.D. President, Chief Executive Officer and Director | | | | 2020 | | | | | 661,250 | (4) | | | | — | | | | | 11,778,840 | (5) | | | | 4,693,666 | | | | | 467,000 | | | | | 5,000 | (6) | | | | 17,605,756 | |
| | | 2019 | | | | | 596,876 | | | | | — | | | | | 4,359,600 | | | | | 4,595,717 | | | | | 540,000 | | | | | 5,000 | | | | | 10,097,193 | |
| | | 2018 | | | | | 568,750 | | | | | — | | | | | 4,648,800 | | | | | 4,623,690 | | | | | 414,000 | | | | | 5,000 | | | | | 10,260,240 | |
| | | | | | | | |
David Johnson Chief Commercial Officer | | | | 2020 | | | | | 463,750 | (7) | | | | — | | | | | 4,037,361 | (8) | | | | 1,582,504 | | | | | 234,000 | | | | | 5,000 | (6) | | | | 6,322,615 | |
| | | 2019 | | | | | 453,125 | | | | | — | | | | | 1,211,000 | | | | | 1,267,784 | | | | | 250,000 | | | | | 5,000 | | | | | 3,186,909 | |
| | | 2018 | | | | | 355,000 | | | | | 75,000 | | | | | 1,897,750 | | | | | 1,898,534 | | | | | 169,000 | | | | | 5,000 | | | | | 4,394,284 | |
| | | | | | | | |
Jeffrey Farrow Chief Financial Officer | | | | 2020 | | | | | 457,813 | (9) | | | | — | | | | | 3,708,261 | (10) | | | | 1,582,504 | | | | | 231,500 | | | | | 5,000 | (6) | | | | 5,985,078 | |
| | | 2019 | | | | | 440,625 | | | | | — | | | | | 1,211,000 | | | | | 1,267,784 | | | | | 244,000 | | | | | 5,000 | | | | | 3,168,409 | |
| | | 2018 | | | | | 425,938 | | | | | — | | | | | 1,370,800 | | | | | 1,326,469 | | | | | 201,000 | | | | | 5,000 | | | | | 3,329,207 | |
| | | | | | | | |
Jung Choi Chief Business and Strategy Officer | | | | 2020 | | | | | 433,125 | (11) | | | | — | | | | | 3,708,261 | (12) | | | | 1,582,504 | | | | | 219,000 | | | | | 5,000 | (6) | | | | 5,947,890 | |
| | | 2019 | | | | | 416,875 | | | | | — | | | | | 1,211,000 | | | | | 1,267,784 | | | | | 231,000 | | | | | 5,000 | | | | | 3,131,659 | |
| | | 2018 | | | | | 392,063 | | | | | — | | | | | 1,370,800 | | | | | 1,326,469 | | | | | 185,000 | | | | | 5,000 | | | | | 3,279,332 | |
| | | | | | | | |
Tricia Suvari Chief Legal Officer | | | | 2020 | | | | | 422,499 | (13) | | | | — | | | | | 3,708,261 | (14) | | | | 1,582,504 | | | | | 214,000 | | | | | 5,000 | (6) | | | | 5,932,264 | |
| | | 2019 | | | | | 403,125 | | | | | — | | | | | 1,211,000 | | | | | 1,267,784 | | | | | 223,000 | | | | | 5,000 | | | | | 3,109,909 | |
| | | 2018 | | | | | 386,875 | | | | | — | | | | | 1,549,600 | | | | | 1,515,964 | | | | | 183,000 | | | | | 5,000 | | | | | 3,640,439 | |
| (1) | In accordance with SEC rules, this column reflects the aggregate grant date fair value of the RSUs granted during 2018, 2019 and 2020, as applicable, computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 10 to our financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. These amounts do not reflect the actual economic value that may be realized by the NEOs upon the vesting or settlement of RSUs or the sale of the common stock underlying such awards. For performance-based RSUs, or PSUs, this table assumes the maximum achievement as of December 31, 2020, of all three escalating stock price targets under such awards over a four-year period ending June 30, 2024; based on this assumption, the value of the awards made to our NEOs at the date of grant would be as follows: Dr. Love - $7,063,496; Mr. Johnson - $2,118,050; Mr. Farrow - $2,118,050; Ms. Choi - $2,118,050; and Ms. Suvari - $2,118,050. |
| (2) | In accordance with SEC rules, this column reflects the aggregate grant date fair value of the stock option awards granted during 2018, 2019 and 2020, as applicable, computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 10 to our financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. These amounts do not reflect the actual economic value that may be realized by the NEOs upon the exercise of the stock options or the sale of the common stock underlying such stock options. |
| (3) | The amounts reported reflect the annual cash incentive compensation earned by the NEOs under our Cash Incentive Plan, based on our achievement of certain corporate performance goals and each NEO’s (except for the CEO) achievement of his or her individual performance goals. |
| (4) | From January 1, 2020, Dr. Love’s annual base salary was $600,000, which increased to $670,000, effective February 16, 2020. |
| (5) | Includes (a) $7,063,496, representing the PSUs granted to Dr. Love in June 2020, and (b) $4,715,344, representing the time-based RSUs granted to Dr. Love in January 2020. |
| (6) | The amounts reported consist of employer matching contributions under our 401(k) of $5,000 each for each NEO. |
| (7) | From January 1, 2020, Mr. Johnson’s annual base salary was $455,000, which increased to $465,000, effective February 16, 2020. |
| (8) | Includes (a) $2,118,050, representing the PSUs granted to Mr. Johnson in June 2020, and (b) $1,919,311, representing the time-based RSUs granted to Mr. Johnson in January 2020. |
| (9) | From January 1, 2020, Mr. Farrow’s annual base salary was $442,500, which increased to $460,000, effective February 16, 2020. |
| (10) | Includes (a) $2,118,050, representing the PSUs granted to Mr. Farrow in June 2020, and (b) $1,590,211, representing the time-based RSUs granted to Mr. Farrow in January 2020. |
| (11) | From January 1, 2020, Ms. Choi’s annual base salary was $420,000, which increased to $435,000, effective February 16, 2020. |
| (12) | Includes (a) $2,118,050, representing the PSUs granted to Ms. Choi in June 2020, and (b) $1,590,211, representing the time-based RSUs granted to Ms. Choi in January 2020. |
| (13) | From January 1, 2020, Ms. Suvari’s annual base salary was $405,000, which increased to $425,000, effective February 16, 2020. |
| (14) | Includes (a) $2,118,050, representing the PSUs granted to Ms. Suvari in June 2020, and (b) $1,590,211, representing the time-based RSUs granted to Ms. Suvari in January 2020. |
482021 Proxy Statementï Global Blood Therapeutics, Inc.
Grants of Plan-Based Awards for Fiscal Year 2020
The following table sets forth the individual awards made to each of our NEOs during 2020. For a description of the types of awards indicated below, please see our “Compensation Discussion and Analysis” above.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Name | | | | Grant
date | | Estimated
Future
Payouts
Under
Non-
Equity
Incentive
Plan
Awards(1) Target ($) | | Estimated Future
Payouts Under
Equity Incentive Pan
Awards(2) | | All
Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#)(3) | | All Other Option Awards: Number Of
Securities Underlying Options (#)(4) | | Exercise or Base Price of Option Awards ($/sh.) | | Grant Date Fair Market Value of Awards ($)(5) |
| | | | Threshold
(#) | | Maximum
(#) |
| | | | | | | | | |
Ted Love, M.D. | | Time-based RSUs | | | | 2/3/2020 | | | | | — | | | | | | | | | | | | | | | 71,640 | | | | | — | | | | | — | | | | | 4,715,345 | |
| | | | | | | | | |
| | Time-based Stock Options | | | | 2/3/2020 | | | | | — | | | | | | | | | | | | | | | — | | | | | 114,190 | | | | | 65.82 | | | | | 4,693,666 | |
| | | | | | | | | |
| | Performance-based RSUs | | | | 6/1/2020 | | | | | — | | | | | 28,280 | | | | | 141,400 | | | | | | | | | | — | | | | | — | | | | | 7,063,496 | |
| | | | | | | | | |
| | Annual Bonus Opportunity | | | | | | | | | 469,000 | | | | | | | | | | | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | |
David Johnson | | Time-based RSUs | | | | 2/3/2020 | | | | | — | | | | | | | | | | | | | | | 29,160 | | | | | — | | | | | — | | | | | 1,919,311 | |
| | | | | | | | | |
| | Time-based Stock Options | | | | 2/3/2020 | | | | | — | | | | | | | | | | | | | | | — | | | | | 38,500 | | | | | 65.82 | | | | | 1,582,504 | |
| | | | | | | | | |
| | Performance-based RSUs | | | | 6/1/2020 | | | | | — | | | | | 8,480 | | | | | 42,400 | | | | | | | | | | — | | | | | — | | | | | 2,118,050 | |
| | | | | | | | | |
| | Annual Bonus Opportunity | | | | | | | | | 232,500 | | | | | | | | | | | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | |
Jeffrey Farrow | | Time-based RSUs | | | | 2/3/2020 | | | | | — | | | | | | | | | | | | | | | 24,160 | | | | | — | | | | | — | | | | | 1,590,211 | |
| | | | | | | | | |
| | Time-based Stock Options | | | | 2/3/2020 | | | | | — | | | | | | | | | | | | | | | — | | | | | 38,500 | | | | | 65.82 | | | | | 1,582,504 | |
| | | | | | | | | |
| | Performance-based RSUs | | | | 6/1/2020 | | | | | — | | | | | 8,480 | | | | | 42,400 | | | | | | | | | | — | | | | | — | | | | | 2,118,050 | |
| | | | | | | | | |
| | Annual Bonus Opportunity | | | | | | | | | 230,000 | | | | | | | | | | | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | |
Jung Choi | | Time-based RSUs | | | | 2/3/2020 | | | | | — | | | | | | | | | | | | | | | 24,160 | | | | | — | | | | | — | | | | | 1,590,211 | |
| | | | | | | | | |
| | Time-based Stock Options | | | | 2/3/2020 | | | | | — | | | | | | | | | | | | | | | — | | | | | 38,500 | | | | | 65.82 | | | | | 1,582,504 | |
| | | | | | | | | |
| | Performance-based RSUs | | | | 6/1/2020 | | | | | — | | | | | 8,480 | | | | | 42,400 | | | | | | | | | | — | | | | | — | | | | | 2,118,050 | |
| | | | | | | | | |
| | Annual Bonus Opportunity | | | | | | | | | 217,500 | | | | | | | | | | | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | |
Tricia Suvari | | Time-based RSUs | | | | 2/3/2020 | | | | | — | | | | | | | | | | | | | | | 24,160 | | | | | — | | | | | — | | | | | 1,590,211 | |
| | | | | | | | | |
| | Time-based Stock Options | | | | 2/3/2020 | | | | | — | | | | | | | | | | | | | | | — | | | | | 38,500 | | | | | 65.82 | | | | | 1,582,504 | |
| | | | | | | | | |
| | Performance-based RSUs | | | | 6/1/2020 | | | | | — | | | | | 8,480 | | | | | 42,400 | | | | | | | | | | — | | | | | — | | | | | 2,118,050 | |
| | | | | | | | | |
| | | Annual Bonus Opportunity | | | | | | | | | 212,500 | | | | | | | | | | | | | | | — | | | | | — | | | | | — | | | | | — | |
| (1) | The amounts shown reflect the target cash incentive compensation for our NEOs, which are disclosed in the “2020 Target Annual Bonus” section of the above “Compensation Discussion and Analysis.” The actual amounts paid for 2020 are disclosed in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. There were no threshold or maximum payout levels for the cash incentive compensation (however, the portion based on corporate performance goals had a maximum of 155% of target for 2020). |
| (2) | The amounts shown reflect the threshold and maximum payout levels associated with PSUs granted pursuant to our 2015 Plan, which amounts will be payable in shares of our common stock if the stock price targets for such PSUs are met, with each such share price based on the average closing market price on the NASDAQ Global Select Market over a 20 consecutive trading day period. The target payout for the PSUs is the maximum payout. 20% of the maximum number of PSUs will be earned if a stock price of $109.20 per share is achieved on or before June 30, 2024; an additional 35% (for a total of 55%) of the maximum number of PSUs will be earned if a stock price of $145.60 per share is achieved on or before June 30, 2024; and an additional 45% (for a total of 100%) of the maximum number of PSUs will be earned if a stock price of $182.00 per share is achieved on or before June 30, 2024. Upon the achievement of each respective stock price target, 50% of the PSUs allotted to that tranche will vest, while the remaining 50% will vest on the first anniversary of the date the stock price target was achieved, subject to the executive officer’s continued employment or other service relationship with us through such vesting date. |
| (3) | The amounts shown represent time-based RSUs granted pursuant to our 2015 Plan, which amounts will be payable in shares of our common stock if the service-based conditions for such time-based RSUs are met. The time-based RSUs vest semi-annually over four years, subject to the NEO’s continued employment or other service relationship with us through each applicable vesting date. |
| (4) | The amounts shown represent time-based stock options granted pursuant to our 2015 Plan. The time-based stock options vest quarterly over four years, subject to the NEO’s continued employment or other service relationship with us through each applicable vesting date. |
| (5) | In accordance with SEC rules, this column reflects the aggregate grant date fair value of the equity awards granted during 2020, computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 10 to our financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. These amounts do not reflect the actual economic value that may be realized by the NEOs upon the vesting or settlement of PSUs or RSUs or the exercise of the stock options, as applicable, or the sale of the common stock underlying such awards. For PSUs, this table assumes the maximum achievement as of December 31, 2020, of all three escalating stock price targets under such awards over a four-year period ending June 30, 2024; based on this assumption, the value of the awards made to our NEOs at the date of grant would be as follows: Dr. Love - $7,063,496; Mr. Johnson - $2,118,050; Mr. Farrow - $2,118,050; Ms. Choi - $2,118,050; and Ms. Suvari - $2,118,050. |
Global Blood Therapeutics, Inc. ï2021 Proxy Statement49
2020 Outstanding Equity Awards at Fiscal Year End
The following table sets forth certain information with respect to outstanding equity awards held by each of our NEOs as of December 31, 2020.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | |
| | | Option Awards(1) | | | | Stock Awards(1) |
| | | | | | | | | | |
Name | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Equity
Incentive
Plan
Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | Option Exercise Price ($) | | | | Option Expiration Date | | Number of shares or units of
stock that have not vested (#)(1) | | Market value of shares or units of stock that have not vested ($)(2) | | Equity Incentive Plan Awards: Number of unearned shares, units or other
rights that have not vested (#) | | Equity Incentive Plan Awards: Market value or payout value of unearned shares, units or other rights that have not vested ($)(2) |
| | | | | | | | | | |
(a) | | (b) | | (c) | | (d) | | (e) | | | | (f) | | (g) | | (h) | | (i) | | (j) |
| | | | | | | | | | |
Ted Love, M.D. | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | 12,063 | (3) | | | | 522,449 | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 123,743 | (4) | | | | 9,063 | (4) | | | | — | | | | | 16.40 | | | | | | | | | | 1/17/2027 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 83,875 | (5) | | | | 38,125 | (5) | | | | — | | | | | 59.60 | | | | | | | | | | 2/1/2028 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | 29,250 | (6) | | | | 1,266,818 | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | 56,250 | (7) | | | | 2,436,188 | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 63,437 | (8) | | | | 81,563 | (8) | | | | — | | | | | 48.44 | | | | | | | | | | 2/1/2029 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | 62,685 | (9) | | | | 2,714,887 | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 21,410 | (10) | | | | 92,780 | (10) | | | | — | | | | | 65.82 | | | | | | | | | | 2/3/2030 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | — | | | | | — | | | | | 141,400 | (11) | | | | 6,124,034 | |
| | | | | | | | | | |
David Johnson | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | 13,125 | (12) | | | | 568,444 | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 37,812 | (13) | | | | 17,188 | (13) | | | | — | | | | | 54.05 | | | | | | | | | | 3/12/2028 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | 15,625 | (7) | | | | 676,719 | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 17,500 | (8) | | | | 22,500 | (8) | | | | — | | | | | 48.44 | | | | | | | | | | 2/1/2029 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | 25,515 | (9) | | | | 1,105,055 | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 7,218 | (10) | | | | 31,282 | (10) | | | | — | | | | | 65.82 | | | | | | | | | | 2/3/2030 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | — | | | | | — | | | | | 42,400 | (11) | | | | 1,836,344 | |
| | | | | | | | | | |
Jeffrey Farrow | | | | 120,000 | (14) | | | | — | | | | | — | | | | | 14.96 | | | | | | | | | | 2/24/2026 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | 3,063 | (3) | | | | 132,659 | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 31,639 | (4) | | | | 2,313 | (4) | | | | — | | | | | 16.40 | | | | | | | | | | 1/17/2027 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 24,062 | (5) | | | | 10,938 | (5) | | | | — | | | | | 59.60 | | | | | | | | | | 2/1/2028 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | 8,625 | (6) | | | | 373,549 | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | 15,625 | (7) | | | | 676,719 | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 17,500 | (8) | | | | 22,500 | (8) | | | | — | | | | | 48.44 | | | | | | | | | | 2/1/2029 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | 21,140 | (9) | | | | 915,573 | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 7,218 | (10) | | | | 31,282 | (10) | | | | — | | | | | 65.82 | | | | | | | | | | 2/3/2030 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | — | | | | | — | | | | | 42,400 | (11) | | | | 1,836,344 | |
502021 Proxy Statementï Global Blood Therapeutics, Inc.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | |
| | | Option Awards(1) | | | | Stock Awards(1) |
| | | | | | | | | | |
Name | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Equity
Incentive
Plan
Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | Option Exercise Price ($) | | | | Option Expiration Date | | Number of shares or units of
stock that have not vested (#)(1) | | Market value of shares or units of stock that have not vested ($)(2) | | Equity Incentive Plan Awards: Number of unearned shares, units or other
rights that have not vested (#) | | Equity Incentive Plan Awards: Market value or payout value of unearned shares, units or other rights that have not vested ($)(2) |
| | | | | | | | | | |
(a) | | (b) | | (c) | | (d) | | (e) | | | | (f) | | (g) | | (h) | | (i) | | (j) |
| | | | | | | | | | |
Jung Choi | | | | 74,964 | (14) | | | | — | | | | | — | | | | | 3.40 | | | | | | | | | | 4/9/2025 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 5,350 | (14) | | | | — | | | | | — | | | | | 3.40 | | | | | | | | | | 4/9/2025 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | 4,063 | (3) | | | | 175,969 | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 45,937 | (4) | | | | 3,063 | (4) | | | | — | | | | | 16.40 | | | | | | | | | | 1/17/2027 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 24,062 | (5) | | | | 10,938 | (5) | | | | — | | | | | 59.60 | | | | | | | | | | 2/1/2028 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | 8,625 | (6) | | | | 373,549 | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | 15,625 | (7) | | | | 676,719 | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 17,500 | (8) | | | | 22,500 | (8) | | | | — | | | | | 48.44 | | | | | | | | | | 2/1/2029 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | 21,140 | (9) | | | | 915,573 | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 7,218 | (10) | | | | 31,282 | (10) | | | | — | | | | | 65.82 | | | | | | | | | | 2/3/2030 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | — | | | | | — | | | | | 42,400 | (11) | | | | 1,836,344 | |
| | | | | | | | | | |
Tricia Suvari | | | | 100,000 | (14) | | | | — | | | | | — | | | | | 18.25 | | | | | | | | | | 10/11/2026 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 27,500 | (5) | | | | 12,500 | (5) | | | | — | | | | | 59.60 | | | | | | | | | | 2/1/2028 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | 9,750 | (6) | | | | 422,273 | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | 15,625 | (7) | | | | 676,719 | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 17,500 | (8) | | | | 22,500 | (8) | | | | — | | | | | 48.44 | | | | | | | | | | 2/1/2029 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | 21,140 | (9) | | | | 915,573 | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | 7,218 | (10) | | | | 31,282 | (10) | | | | — | | | | | 65.82 | | | | | | | | | | 2/3/2030 | | | | | — | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | — | | | | | — | | | | | — | | | | | 42,400 | (11) | | | | 1,836,344 | |
| (1) | All of the outstanding equity awards held by our NEOs will become fully vested and exercisable or non-forfeitable, as applicable, if the NEO is terminated without Cause or resigns for Good Reason, in either case, within 12 months following a Sale Event. The vesting acceleration of the outstanding equity awards held by our NEOs is described in greater detail in “Employment Arrangements with Our Named Executive Officers—Change in Control Policy”. |
| (2) | Computed in accordance with SEC rules as the number of unvested shares or units multiplied by the closing market price of a share of our common stock on December 31, 2020, which was $43.31. The actual value (if any) to be realized by the NEO depends on whether the shares or units vest and the future performance of our common stock. |
| (3) | 1/8th of the RSUs vest on a semi-annual basis from the vesting commencement date of January 17, 2017, such that all of the RSUs were fully vested on January 17, 2021, subject to the NEO’s continued employment or other service relationship with us through each applicable vesting date. |
| (4) | 1/16th of the shares subject to the stock option vest on a quarterly basis from the vesting commencement date of January 17, 2017, such that all of the shares were fully vested on January 17, 2021, subject to the NEO’s continued employment or other service relationship with us through each applicable vesting date. |
| (5) | 1/16th of the shares subject to the stock option vest on a quarterly basis from the vesting commencement date of February 1, 2018, such that all of the shares will be fully vested on February 1, 2022 subject to the NEO’s continued employment or other service relationship with us through each applicable vesting date. |
| (6) | 1/8th of the RSUs vest on a semi-annual basis from the vesting commencement date of February 1, 2018, such that all of the RSUs will be fully vested on February 1, 2022, subject to the NEO’s continued employment or other service relationship with us through each applicable vesting date. |
| (7) | 1/8th of the RSUs vest on a semi-annual basis from the vesting commencement date of February 1, 2019, such that all of the RSUs will be fully vested on February 1, 2023, subject to the NEO’s continued employment or other service relationship with us through each applicable vesting date. |
Global Blood Therapeutics, Inc. ï2021 Proxy Statement51
| (8) | 1/16th of the shares subject to the stock option vest on a quarterly basis from the vesting commencement date of February 1, 2019, such that all of the shares will be fully vested on February 1, 2023, subject to the NEO’s continued employment or other service relationship with us through each applicable vesting date. |
| (9) | 1/8th of the RSUs vest on a semi-annual basis from the vesting commencement date of February 3, 2020, such that all of the RSUs will be fully vested on February 3, 2024, subject to the NEO’s continued employment or other service relationship with us through each applicable vesting date. |
| (10) | 1/16th of the shares subject to the stock option vest on a quarterly basis from the vesting commencement date of February 3, 2020, such that all of the shares will be fully vested on February 3, 2024, subject to the NEO’s continued employment or other service relationship with us through each applicable vesting date. |
| (11) | Represents the maximum number of PSUs that may be earned. The vesting of the PSUs is contingent upon the achievement of three escalating stock price targets, with each such share price based on the average closing market price on the NASDAQ Global Select Market over a 20 consecutive trading day period. 20% of the maximum number of PSUs will be earned if a stock price of $109.20 per share is achieved on or before June 30, 2024; an additional 35% (for a total of 55%) of the maximum number of PSUs will be earned if a stock price of $145.60 per share is achieved on or before June 30, 2024; and an additional 45% (for a total of 100%) of the maximum number of PSUs will be earned if a stock price of $182.00 per share is achieved on or before June 30, 2024. Upon the achievement of the respective stock price targets, 50% of the PSUs allotted to that tranche will vest, while the remaining 50% will vest on the first anniversary of the date the stock price target was achieved, subject to the NEO’s continued employment or other service relationship with us through such vesting date. |
| (12) | 25% of the RSUs vested on April 1, 2019 and 1/8th of the RSUs vest on a semi-annual basis from such date, such that all of the RSUs will be fully vested on April 1, 2022, subject to the NEO’s continued employment or other service relationship with us through each applicable vesting date. |
| (13) | 25% of the shares subject to the stock option vested on March 12, 2019 and 1/16th of the shares subject to the stock option vest on a quarterly basis from such date, such that all of the shares will be fully vested on March 12, 2022 subject to the NEO’s continued employment or other service relationship with us through each applicable vesting date. |
| (14) | Shares subject to the stock option have fully vested. |
Option Exercises and Stock Vested in Fiscal Year 2020
The following table sets forth the number of shares acquired and the value realized upon exercises of stock options and vesting of RSUs during the fiscal year ended December 31, 2020, by each of our NEOs.
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | |
| | | | | Option Awards | | | | Stock Awards |
| | | | | | |
Name | | | | Number of
Shares
Acquired on
Exercise (#) | | Value Realized
on Exercise ($)(1) | | | | Number of
Shares
Acquired on
Vesting (#) | | Value
Realized on
Vesting ($)(2) |
| | | | | | |
Ted Love, M.D. | | | | | | | — | | — | | | | | | 75,080 | | | | | 4,992,999 | |
| | | | | | |
David Johnson | | | | | | | — | | — | | | | | | 18,645 | | | | | 1,127,546 | |
| | | | | | |
Jeffrey Farrow | | | | | | | — | | — | | | | | | 21,145 | | | | | 1,406,745 | |
| | | | | | |
Jung Choi | | | | | | | — | | — | | | | | | 23,145 | | | | | 1,539,485 | |
| | | | | | |
Tricia Suvari | | | | | | | — | | — | | | | | | 15,770 | | | | | 1,050,007 | |
| (1) | The value realized upon the exercise of stock options is calculated by (a) subtracting the stock option exercise price from the market price on the date of exercise to get the realized value per share, and (b) multiplying the realized value per share by the number of shares underlying the stock options exercised. |
| (2) | The value realized upon vesting of RSUs is calculated by multiplying the number of shares of RSUs vested by the market price on the vest date. |
522021 Proxy Statementï Global Blood Therapeutics, Inc.
Potential Payments on Termination or Change in Control
Our Amended and Restated Severance and Change in Control Policy provides for certain payments and benefits to each of our NEOs if the NEO is terminated by us or our acquirer or successor without Cause or resigns for Good Reason (as such terms are defined in such policy), both during and outside of the Change in Control Period (assuming that all outstanding equity awards were assumed, continued or substituted by an acquirer or successor in such change in control), subject to the termsNEO’s execution and non-revocation of hera severance agreement, Dr. Ramos was issued an optionincluding a general release of claims. The table below quantifies the potential payments and benefits that would have become due to purchase 142,857 sharesour NEOs assuming that Amended and Restated Severance and Change in Control Policy had been in effect as of December 31, 2020, and that one of the triggering events above occurred as of December 31, 2020. The market price of a share of our common stock on June 11, 2014 pursuant to an incentive stock option agreement. In connection with commencement of her employment, we granted Dr. Ramos a signing bonus of $25,000 and a relocation assistance payment of $10,000.
Dr. Ramos is also eligible to receive certain post-termination compensation and benefits in connection with a change in control in accordance with the Policy described above.
Hing L. Sham, Ph.D.
We entered into an employment offer letter agreement with Dr. Sham in June 2014, pursuant to which he assumed the role of Senior Vice President, Chemistry in July 2014. The agreement entitles Dr. Sham to an annual base salary that is currently set at $325,000, subject to adjustment pursuant to our employee compensation policies in effect from time to time. In connection with his appointment as our Senior Vice President, Research, which will be effective May 1, 2016, Dr. Sham's annual base salary will be increased to $360,000. Pursuant to the terms of his agreement and the Incentive Plan, Dr. Sham is eligible to receive annual incentive compensation at a target percentage (currently 35%) of his then-current annual base salary, as determined by the Compensation Committee of our Board of Directors. Pursuant to the terms of his agreement, Dr. Sham was issued an option to purchase 85,714 shares of our common stock on September 10, 2014 pursuant to an incentive stock option agreement.
Dr. Sham is also eligible to receive certain post-termination compensation and benefits in connection with a change in control in accordance with the Policy described above.
Termination Letter Agreement with Uma Sinha, Ph.D.
We entered into a termination letter agreement and release with Dr. Sinha on July 14, 2015 (the “Termination Agreement”). Pursuant to the terms of the Termination Agreement, the Company agreed, in exchange for a full release of claims from Dr. Sinha, to (i) pay Dr. Sinha an aggregate of $171,250, which represented six additional months of her base salary, less applicable withholding, (ii) reimburse Dr. Sinha for certain benefits continuation through December 31,
2015 and (iii) accelerate the vesting of 54,998 shares of Dr. Sinha’s outstanding restricted stock.2020, was $43.31. | | | | | | | | | | |
| | |
Name | | Qualifying
termination
Not in
connection
with a Change
in Control ($) | | Qualifying
Termination in
Connection
with a Change
in Control ($) |
| | |
Ted Love, M.D. | | | | | | | | | | |
| | |
Cash Severance Payment | | | | 670,000 | (1) | | | | 1,005,000 | (2) |
| | | |
Cash Incentive Bonus Payment | | | | 469,000 | (3) | | | | 703,500 | (4) |
| | | |
COBRA Premiums | | | | 21,103 | (5) | | | | 31,655 | (6) |
| | | |
Accelerated Equity Vesting (Time-Based) | | | | — | | | | | 7,184,226 | (7) |
| | | |
Accelerated Equity Vesting (Performance-Based) | | | | — | | | | | — | |
| | |
David Johnson | | | | | | | | | | |
| | |
Cash Severance Payment | | | | 465,000 | (1) | | | | 465,000 | (1) |
| | | |
Cash Incentive Bonus Payment | | | | — | | | | | 232,500 | (3) |
| | | |
COBRA Premiums | | | | 21,783 | (5) | | | | 21,783 | (5) |
| | | |
Accelerated Equity Vesting (Time-Based) | | | | — | | | | | 2,350,217 | (7) |
| | | |
Accelerated Equity Vesting (Performance-Based) | | | | — | | | | | — | |
| | |
Jeffrey Farrow | | | | | | | | | | |
| | |
Cash Severance Payment | | | | 460,000 | (1) | | | | 460,000 | (1) |
| | | |
Cash Incentive Bonus Payment | | | | — | | | | | 230,000 | (3) |
| | | |
COBRA Premiums | | | | 21,103 | (5) | | | | 21,103 | (5) |
| | | |
Accelerated Equity Vesting (Time-Based) | | | | — | | | | | 2,160,742 | (7) |
| | | |
Accelerated Equity Vesting (Performance-Based) | | | | — | | | | | — | |
| | |
Jung Choi | | | | | | | | | | |
| | |
Cash Severance Payment | | | | 435,000 | (1) | | | | 435,000 | (1) |
| | | |
Cash Incentive Bonus Payment | | | | — | | | | | 217,500 | (3) |
| | | |
COBRA Premiums | | | | — | (5) | | | | — | (5) |
| | | |
Accelerated Equity Vesting (Time-Based) | | | | — | | | | | 2,224,235 | (7) |
| | | |
Accelerated Equity Vesting (Performance-Based) | | | | — | | | | | — | |
| | |
Tricia Suvari | | | | | | | | | | |
| | |
Cash Severance Payment | | | | 425,000 | (1) | | | | 425,000 | (1) |
| | | |
Cash Incentive Bonus Payment | | | | — | | | | | 212,500 | (3) |
| | | |
COBRA Premiums | | | | 17,740 | (5) | | | | 17,740 | (5) |
| | | |
Accelerated Equity Vesting (Time-Based) | | | | — | | | | | 2,014,565 | (7) |
| | | |
Accelerated Equity Vesting (Performance-Based) | | | | — | | | | | — | |
| (1) | Represents 12 months of the NEO’s base salary. |
| (2) | Represents 18 months of Dr. Love’s base salary. |
| (3) | Represents 100% of the NEO’s target annual bonus opportunity. The table does not include the prorated annual bonus opportunity that the NEO would be entitled to since, on December 31, 2020, the full annual bonus, which is shown in the “Summary Compensation Table,” was earned. |
| (4) | Represents 150% of Dr. Love’s target annual bonus opportunity. The table does not include the prorated annual bonus opportunity that Dr. Love would be entitled to since, on December 31, 2020, the full annual bonus, which is shown in the “Summary Compensation Table,” was earned. |
Global Blood Therapeutics, Inc. ï2021 Proxy Statement53
| (5) | Represents 12 months of our contribution towards health insurance, based on our actual costs to provide health insurance to the NEO as of the date of termination. Since Ms. Choi did not participate in the Company’s health insurance plan, she will receive zero months of payment of COBRA premiums. |
| (6) | Represents 18 months of our contribution towards health insurance, based on our actual costs to provide health insurance to Dr. Love as of the date of termination. |
| (7) | Represents the value of acceleration of vesting of 100% of the NEO’s unvested and outstanding equity awards, other than PSUs, based on the market price of a share of our common stock on December 31, 2020, which was $43.31. For the PSUs, represents the value of acceleration of vesting of 0% of the NEO’s unvested and outstanding PSUs, based on an assumed sale price of a share of our common stock in the change in control of $43.31. For stock options with a per share exercise price greater than $43.31, no amount was included with respect to such stock options. |
Securities Authorized for Issuance under Equity Compensation Plans
ForEquity Compensation Plans
The following table sets forth information as of December 31, 2020, regarding shares of common stock that may be issued under our equity compensation plans, consisting of our 2012 Stock Option and Grant Plan (or 2012 Plan), our 2015 Plan, our 2017 Inducement Plan and our ESPP.
| | | | | | | | | | | | | | | |
| | | |
Plan Category | | Number of
Securities to be
Issued upon
Exercise of
Outstanding
Options,
Warrants and
Rights (#) (a) | | Weighted
Average Exercise
Price of
Outstanding
Options,
Warrants and
Rights (b)(1) | | Number of
Securities
Remaining
Available for
Future Issuance
under Equity
Compensation
Plans (Excluding
Securities
Reflected in
Column (a)) (c) |
| | | |
Equity compensation plans approved by security holders(2) | | | | 4,408,439 | (3) | | | | $40.38 | (3) | | | | 4,995,682 | (4) |
| | | | |
Equity compensation plans not approved by security holders(5) | | | | 1,543,947 | | | | | $50.44 | | | | | 1,277,475 | |
| | | |
Total | | | | 5,952,386 | | | | | $42.07 | | | | | 6,233,157 | |
| (1) | The weighted average exercise price is calculated based solely on outstanding stock options. |
| (2) | Includes the 2012 Plan, the 2015 Plan and the ESPP. Our 2015 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2016 until January 1, 2025, by 4% of the outstanding number of shares of common stock on the immediately preceding December 31 or such lesser number of shares as determined by the compensation committee of our Board of Directors. Our ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, from January 1, 2016 until January 1, 2025, by the lesser of (i) 3,000,000 shares of common stock, (ii) 1% of the outstanding number of shares of common stock on the immediately preceding December 31 or (iii) such lesser number of shares as determined by the compensation committee of our Board of Directors. On January 1, 2020, the number of shares available for issuance under our 2015 Plan and our ESPP increased by 2,425,694 shares and 100,000 shares, respectively, pursuant to these provisions. These increases are not reflected in the table above. We no longer grant new awards under the 2012 Plan, and any awards previously granted under such plan prior to our initial public offering that are forfeited, canceled, reacquired by us prior to vesting satisfied without the issuance of stock or otherwise terminated (other than by exercise) are added to shares available for issuance under the 2015 Plan. |
| (3) | Does not include purchase rights accruing under the ESPP as of December 31, 2020, because the purchase rights (and, therefore, the number of shares to be purchased) were not determined until the end of the purchase periods on January 31, 2021, and February 28, 2021. |
| (4) | As of December 31, 2020, there were 4,741,092 shares of common stock available for issuance under the 2015 Plan and 254,590 shares of common stock available for issuance under the ESPP (which number includes shares subject to purchase during the current purchase periods which commenced on February 1, 2021 and March 1, 2021, since the exact number of which will not be known until the end of the purchase periods on August 31, 2021. |
| (5) | Consists solely of the 2017 Inducement Plan. |
542021 Proxy Statementï Global Blood Therapeutics, Inc.
CEO Pay Ratio
As required by Section 953(b) of the Dodd-Frank Act, and Item 402(u) of Regulation S-K, we are disclosing the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all our employees (other than our CEO).
For 2020:
the annual total compensation of our CEO was $17,605,756 (as disclosed in the Summary Compensation Table above);
the median of the annual total compensation of all our employees was $373,366; and
the ratio of the annual total compensation of our CEO to the annual total compensation of our median employee was 47 to 1.
In 2020, there was no change in our employee population or employee compensation arrangements that we reasonably believe would result in a significant change to our pay ratio disclosure. However, in 2020 there was a change in the circumstances of the employee identified as the median employee for 2019 as that individual was promoted and received a special promotional award. Accordingly, it is no longer appropriate to use that median employee because we reasonably believe that the change in such employee’s circumstances would result in a significant change in our pay ratio disclosure. As permitted by SEC rules, we have elected to use another employee, whose 2019 compensation was substantially similar to the original median employee’s 2019 compensation based on the same consistently applied compensation measure used to select the original median employee, as our median employee for 2020. After identifying our median employee and ensuring this employee did not have anomalous compensation in 2020, we then calculated the annual total compensation of our median employee using the same methodology we used for our CEO, and our other NEOs, in the 2020 Summary Compensation Table above.
In addition, in 2020, our CEO was granted an award of performance-based RSUs with a grant date fair value of $7,063,496 to be earned and vest contingent upon the achievement of three escalating stock price targets over a four-year period ending June 30, 2024. This one-time award that the Compensation Committee granted to our CEO (as well as other members of our senior management) as a special motivational and retention vehicle had the effect of increasing our CEO’s annual total compensation by nearly 75% year-over-year (based on the calculations and assumptions described above), resulting in a significantly higher pay ratio than in 2019.
In 2019, we identified our median employee as of December 31, 2015, see “Ratification2019, by: (i) calculating for each full-time employee, except our CEO, and part-time employee on that date (a) actual annual base salary in 2019 (annualized for new hires who were not employed for the entire year and for permanent employees on an unpaid leave of 2015 Stock Optionabsence for a portion of the year), (b) actual annual bonus earned in 2019 (annualized for new hires who were not employed for the entire year and Incentive Plan—Equityfor permanent employees on an unpaid leave of absence for a portion of the year), and (c) the grant date fair value of all equity awards granted in 2019; and (ii) ranking this compensation from lowest to highest to identify our median employee. For purposes of this disclosure, earnings of any employee outside the U.S. were converted to U.S. dollars using the monthly average Swiss franc to U.S. dollar exchange rate for each month in 2019, based on exchange rates used by us for various purposes. We used this compensation as our consistently applied compensation measure because we believe it was representative of our employee compensation.
The pay ratio above is a reasonable estimate calculated in a manner consistent with the SEC rules. The SEC rules provide companies with significant flexibility in identifying the median employee and calculating the pay ratio, including flexibility 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. Accordingly, the pay ratio above may not be comparable with the pay ratios of other companies, even companies within our industry.
Global Blood Therapeutics, Inc. ï2021 Proxy Statement55
The following Compensation Plans.”Committee Report is not considered proxy solicitation material and is not deemed filed with the Securities and Exchange Commission. Notwithstanding anything to the contrary set forth in any of our filings made under the Securities Act of 1933 or the Exchange Act that might incorporate our filings under those statutes, the Compensation Committee Report shall not be incorporated by reference into any of our prior filings or into any of our future filings under those statutes.
The Compensation Committee of the Board of Directors has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with the Company’s management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors, and the Board of Directors approved, that the Compensation Discussion and Analysis be included in this Proxy Statement for the Annual Meeting and incorporated by reference in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
COMPENSATION COMMITTEE
WENDY L. YARNO, CHAIR
SCOTT W. MORRISON
MARK L. PERRY
562021 Proxy Statementï Global Blood Therapeutics, Inc.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Other than the compensation agreements and other arrangements with our directors and NEOs described under “Compensation of Executive Officers”above, and the transactions described below, since January 1, 2015,2020, there has not been and there is not currently proposed, any transaction or
series of similar transactions to which we were, or will be, a party in which the amount involved exceeded, or will exceed, $120,000 and in which any director, executive officer, holder of five percent or more of any class of our capital stock or any member of the immediate family of, or entities affiliated with, any of the foregoing persons, had, or will have, a direct or indirect material interest.
Agreements with Stockholders
Since our inception in 2011, we have received consulting and management services from TRV, pursuant to an unwritten agreement with TRV, or the TRV Agreement, which through its affiliates, has a controlling interest in us. During the year ended December 31, 2015, we incurred expenses from TRV of an aggregate of $44,400 for these services, which included, among other things, $33,600 in consulting services provided by Dr. Homcy, a member of our Board of Directors.
We have incurred expenses from TRV of an aggregate of approximately $2,557,000for these services from our inception through December 31, 2015 pursuant to the TRV Agreement. Our director, Dr. Homcy, currently provides us with consulting services pursuant to the TRV Agreement. Dr. Homcy and Mr. Starr, another member of our board of directors during 2015, are affiliated with TRV. Dr. Homcy did not receive any cash compensation from us, as his consulting services were provided to us through TRV.
Participation in Initial Public Offering
In August 2015, certain of our officers purchased an aggregate of 57,500 shares of our common stock in our initial public offering at the initial public offering price of $20.00 per share as follows:
|
| | | | | | | | |
| Beneficial Owner | | Shares Purchased in Offering | | Aggregate Purchase Price |
| Ted W. Love, M.D. (1) | | | 10,000 |
| | $ | 200,000 |
|
| Eleanor L. Ramos, M.D. | | | 10,000 |
| | $ | 200,000 |
|
| Jung E. Choi | | | 25,000 |
| | $ | 500,000 |
|
| Peter Radovich | | | 12,500 |
| | $ | 250,000 |
|
| | | | | | |
|
| | |
(1) | | Includes 5,000 shares purchased directly by Dr. Love and 5,000 shares purchased by Dr. Love’s immediate family members in the offering. |
Executive Officer and Director Compensation
Employment Agreements
We have entered into offer letters or employment agreements with each of Ted W. Love, M.D., Eleanor L. Ramos, M.D., Hing L. Sham, Ph.D. and certain of our executive officers. For more information regarding these arrangements, see “Compensation of Executive Officers—Employment Arrangements with Our Named Executive Officers.”
Restricted Stock and Stock Option Awards
For information regarding stock option awards and other equity incentive awards granted to our named executive officers and directors, see “Election of Directors—Director Compensation” and “Compensation of Executive Officers.”
Indemnification Agreements We have entered into agreements to indemnify our directors and executive officers. These agreements will, among other things, require us to indemnify these individuals for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts reasonably incurred by such person in any action or proceeding, including any action by or in our right, on account of any services undertaken by such person on behalf of our company or that person’s status as a member of our board of directors to the maximum extent allowed under Delaware law.
Procedures for Approval of Related Person Transactions
The Audit Committee conducts an appropriate review of all related party transactions for potential conflict of interest situations on an ongoing basis, and the approval of the Audit Committee is required for all such transactions. The Audit Committee follows the policies and procedures set forth in our Related Person Transaction Policy in order to facilitate such review. The Related Person Transaction Policy is written.
Global Blood Therapeutics, Inc. ï2021 Proxy Statement57
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth the beneficial ownership information of our common stock by:
each person known to us to be the beneficial owner of more than 5% of our common stock as of March 31, 2016;2021;
each named executive officer;NEO;
each of our directors;current director; and
all of ourcurrent executive officers and directors as a group.
We have based our calculation of the percentage of beneficial ownership of 30,527,07562,240,050 shares of common stock outstanding on March 31, 2016.
2021.Each individual or entity shown in the table has furnished information with respect to beneficial ownership. The information with respect to our executive officers and directorseach individual or entity is as of March 31, 20162021, unless otherwise noted. The information with respect to certain significant stockholders is based on filings by the beneficial owners with the SEC pursuant to sectionSections 13(d) and 13(g) of the Exchange Act. We have determined beneficial ownership in accordance with the SEC’s rules. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In addition, the rules include shares of common stock issuable pursuant to the exercise of stock options that are either immediately exercisable or exercisable on or before May 30, 2016,2021, which is 60 days after March 31, 2016.2021. These shares are deemed to be outstanding and beneficially owned by the person holding those stock options for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws.
| | | | | | | | | | |
| | |
Beneficial Owner(1) | | Number of Shares
Beneficially Owned | | Percentage of Shares
Beneficially Owned |
| | |
5% or Greater Stockholders: | | | | | | | | | | |
| | |
Entities affiliated with Janus Henderson Group plc(2) 201 Bishopsgate EC2M 3AE, United Kingdom | | | | 5,966,862 | | | | | 9.6 | % |
| | |
Entities affiliated with Bank of America Corporation(3) 100 N Tryon Street Charlotte, NC 28255 | | | | 5,883,578 | | | | | 9.5 | % |
| | |
Entities affiliated with Perceptive(4) 51 Astor Place, 10th Floor New York, NY 10003 | | | | 5,674,711 | | | | | 9.1 | % |
| | |
Entities affiliated with The Vanguard Group(5) 100 Vanguard Blvd. Malvern, PA 19355 | | | | 5,460,482 | | | | | 8.8 | % |
| | |
Entities affiliated with Fidelity(6) 245 Summer Street Boston, MA 02210 | | | | 4,407,065 | | | | | 7.1 | % |
| | |
Entities affiliated with T. Rowe Price Associates, Inc.(7) 100 E. Pratt Street Baltimore, MD 21202 | | | | 4,063,123 | | | | | 6.5 | % |
| | |
Entities affiliated with BlackRock(8) 55 East 52nd Street New York, NY 10055 | | | | 3,683,260 | | | | | 5.9 | % |
582021 Proxy Statementï Global Blood Therapeutics, Inc.
|
| | | | | | |
| Beneficial Owner (1) | | Number of Shares Beneficially Owned | | Percentage of Shares Beneficially Owned | |
| 5% or Greater Stockholders: | | | | | |
Entities affiliated with Third Rock Ventures (2)
29 Newbury Street, Boston, Massachusetts 02116 | | 14,760,900 |
| | 48.4 | % |
Entities affiliated with Fidelity (3)
245 Summer Street, Boston, MA 02110 | | 4,568,562 |
| | 15.0 | % |
| Named Executive Officers and Directors: | | | | | |
| Ted W. Love, M.D. (4) | | 1,147,636 |
| | 3.8 | % |
| Eleanor L. Ramos, M.D. (5) | | | | * | |
| Hing L. Sham, Ph.D. (6) | | | | * | |
| Uma Sinha, Ph.D. (7) | | | | * | |
| Michael W. Bonney (8) | | | | * | |
| Willie L. Brown, Jr. (9) | | | | * | |
| Charles Homcy, M.D. (10) | | | | * | |
| Scott W. Morrison (11) | | | | * | |
| Deval L. Patrick (12) | | | | * | |
| Mark L. Perry (13) | | | | * | |
| Glenn F. Pierce, M.D., Ph.D. (14) | | | | * | |
| Philip A. Pizzo, M.D. (15) | | | | * | |
| All directors and executive officers as a group (14 persons)(16) | | 1,874,133 |
| | 6.1 | % |
| | | | | | | | | | |
| | |
Beneficial Owner(1) | | Number of Shares
Beneficially Owned | | Percentage of Shares
Beneficially Owned |
| | |
Named Executive Officers and Directors: | | | | | | | | | | |
| | |
Ted W. Love, M.D.(9) | | | | 1,434,488 | | | | | 2.3 | % |
| | |
Jeffrey Farrow(10) | | | | 232,322 | * | | | | * | |
| | |
Jung E. Choi(11) | | | | 394,372 | * | | | | * | |
| | |
David L. Johnson(12) | | | | 103,188 | * | | | | * | |
| | |
Tricia Suvari, Esq.(13) | | | | 186,596 | * | | | | * | |
| | |
Willie L. Brown, Jr.(14) | | | | 117,137 | * | | | | * | |
| | |
Scott W. Morrison(15) | | | | 92,109 | * | | | | * | |
| | |
Deval L. Patrick(16) | | | | 7,834 | * | | | | * | |
| | |
Mark L. Perry(17) | | | | 58,537 | * | | | | * | |
| | |
Glenn F. Pierce, M.D., Ph.D.(18) | | | | 92,109 | * | | | | * | |
| | |
Philip A. Pizzo, M.D.(19) | | | | 62,109 | * | | | | * | |
| | |
Dawn A. Svoronos(20) | | | | 38,731 | * | | | | * | |
| | |
Alexis A. Thompson, M.D., M.P.H.(21) | | | | 622 | * | | | | * | |
| | |
Wendy L. Yarno(22) | | | | 62,109 | * | | | | * | |
| | |
All directors and executive officers as a group (16 persons)(23) | | | | 2,964,928 | | | | | 4.7 | % |
|
| | |
| * | | Represents beneficial ownership of less than 1% of the shares of common stock. |
| (1) | | Unless otherwise indicated, the address for each beneficial owner is c/o Global Blood Therapeutics, Inc., 400 East Jamie Court, Suite 101,181 Oyster Point Boulevard, South San Francisco, CA 94080. |
| (2) | | Based solely on a report on Schedule 13G filed with the SEC on February 10, 2016,12, 2021, which indicates that (i) Third Rock Ventures II, L.P.Janus Henderson Group plc (“TRV II”Janus Henderson”) directly owned, and had shared voting power and shared dispositive power over 12,475,1875,966,862 shares of common stock. Janus Henderson has an indirect 97% ownership stake in Intech Investment Management LLC (“Intech”) and a 100% ownership stake in Janus Capital Management LLC (“JCM”), Perkins Investment Management LLC, Henderson Global Investors Limited and Janus Henderson Investors Australia Institutional Funds Management Limited (each an “Asset Manager”). Each Asset Manager is an investment adviser registered or authorized in its relevant jurisdiction and each furnishing investment advice to various fund, individual and/or institutional clients (collectively referred to herein as “Managed Portfolios”). As a result of its role as investment adviser or sub-adviser to the Managed Portfolios, JCM may be deemed to be the beneficial owner of 5,897,668 shares of common stock, and (ii) Third Rock Ventures III, L.P. (“TRV III”) directly owned, and had shared voting power and dispositive power over 2,285,713as a result of its role as investment adviser or sub-adviser to the Managed Portfolios, Intech may be deemed to be the beneficial owner of 69,194 shares of common stock. Each of Third Rock Ventures GP II, L.P. (“TRV GP II”), the sole general partner of TRV II, and TRV GP II, LLC (“TRV GP II LLC”), the sole general partner of TRV GP II, and Mark Levin, Kevin P. Starr and Robert I. Tepper, the managing members of TRV GP II LLC, may be deemed to have voting and investment power over the shares held of record by TRV II, and each of Third Rock Ventures GP III, LP (“TRV GP III”), the sole general partner of TRV III, and TRV GP III, LLC (“TRV GP III LLC”), the sole general partner of TRV GP III, and Mark Levin, Kevin P. Starr and Robert I. Tepper, the managing managers of TRV GP III LLC, may be deemed to have voting and investment power over the shares held of record by TRV III. |
| (3) | | Based solely on a report on Schedule 13G/A filed with the SEC on February 12, 2016,8, 2021, which indicates that Bank of America Corporation had shared voting power with respect to 5,778,958 shares of common stock and had shared dispositive power over 5,883,578 shares of common stock. |
| (4) | Based solely on a report on Schedule 13G/A filed with the SEC on February 16, 2021, which indicates that Perceptive Advisors LLC and Joseph Edelman had shared voting power and shared dispositive power over 5,674,711 shares of common stock, all of which are held by Perceptive Life Sciences Master Fund Ltd. (the “Fund”). Perceptive Advisors LLC serves as the investment manager to the Fund. Joseph Edelman is the managing member of Perceptive Advisors LLC. |
| (5) | Based solely on a report on Schedule 13G/A filed with the SEC on February 10, 2021, which indicates that The Vanguard Group had (i) shared voting power with respect to 46,133 shares of common stock, (ii) sole dispositive power over 5,368,569 shares of common stock and (iii) shared dispositive power over 91,913 shares of common stock. |
| (6) | Based solely on a report on Schedule 13G/A filed with the SEC on February 8, 2021, which indicates that FMR LLC had sole voting power with respect to 226,576463,185 shares of common stock and had sole dispositive power over 4,568,5624,407,065 shares of common stock. Abigail P. Johnson is a Director, the Vice Chairman, and the Chief Executive Officer and the President of FMR LLC. Members of the Johnson family, including Abigail P. 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, 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 (“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. Fidelity Management & Research Company carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees. |
(4)(7) | Based solely on a report on Schedule 13G/A filed with the SEC on February 16, 2021, which indicates that T. Rowe Price Associates, Inc. had sole voting power with respect to 837,735 shares of common stock and had sole dispositive power over 4,063,123 shares of common stock. |
| (8) | Based solely on a report on Schedule 13G/A filed with the SEC on January 29, 2021, which indicates that BlackRock, Inc. had sole voting power with respect to 3,470,400 shares of common stock and had sole dispositive power over 3,683,260 shares of common stock. |
Global Blood Therapeutics, Inc. ï2021 Proxy Statement59
| (9) | Includes (i) 1,142,636774,311 shares of common stock held by Dr. Love, 573,480 shares of which would be subject to our right of repurchase; andLove; (ii) 5,000 shares of common stock held by Dr. Love’s two daughters, as to which Dr. Love disclaims beneficial ownership. |
(5) | | Includes (i) 12,470ownership; (iii) 306,000 shares of common stock held by three trusts for the benefit of Dr. Ramos; (ii) 1,000 shares of common stock held by Dr. Ramos’ step-daughter;Love’s daughters; and (ii) 100,001(iv) 349,177 shares of common stock that Dr. Ramos had the right to acquire from us within 60 days of March 31, 2016 pursuant to the exercise of stock options. |
(6) | | Includes (i) 36,775 shares of common stock held by Dr. Sham, 7,544 of which would be subject to our right of repurchase; and (ii) 36,117 shares of common stock that Dr. Sham had the right to acquire from us within 60 days of March 31, 2016 pursuant to the exercise of stock options. |
(7) | | Includes111,248 shares of common stock held by Dr. Sinha. |
(8) | | Includes 2,500 shares of common stock that Mr. BonneyLove has the right to acquire from us within 60 days of March 31, 20162021 pursuant to the exercise of stock options. |
(9)(10) | | Includes (i) 21,42815,402 shares of common stock held by Mr. Brown, 16,071 shares of which would be subject to our right of repurchase;Farrow; and (ii) 13,638216,920 shares of common stock that Mr. Brown had the right to acquire from us within 60 days of March 31, 2016 pursuant to the exercise of stock options. |
(10) | | Includes (i) 212,685 shares of common stock held by Dr. Homcy; (ii) 1,600 shares of common stock held by The Charles J. Homcy Irrevocable Trust UA 2/18/99; and (iii) 11,250 shares of common stock that Dr. HomcyFarrow has the right to acquire from us within 60 days of March 31, 20162021 pursuant to the exercise of stock options. |
| (11) | Includes (i) 177,090 shares of common stock held by Ms. Choi; (ii) 25,000 shares of common stock held in The 2005 William Park and Jung Choi Family Trust; and (iii) 192,282 shares of common stock that Ms. Choi has the right to acquire from us within 60 days of March 31, 2021 pursuant to the exercise of stock options. |
| (12) | Includes 3,333(i) 27,407 shares of common stock held by Mr. Johnson; and (ii) 75,781 shares of common stock that Mr. Johnson has the right to acquire from us within 60 days of March 31, 2021 pursuant to the exercise of stock options. |
| (13) | Includes (i) 19,565 shares of common stock held by Ms. Suvari; and (ii) 167,031 shares of common stock that Ms. Suvari has the right to acquire from us within 60 days of March 31, 2021 pursuant to the exercise of stock options. |
| (14) | Includes (i) 36,228 shares of common stock held by Mr. Brown; and (ii) 80,909 shares of common stock that Mr. Brown has the right to acquire from us within 60 days of March 31, 2021 pursuant to the exercise of stock options. |
| (15) | Includes (i) 4,800 shares of common stock held by Mr. Morrison; and (ii) 87,309 shares of common stock that Mr. Morrison has the right to acquire from us within 60 days of March 31, 20162021 pursuant to the exercise of stock options. |
(12)(16) | | Includes (i) 2,5002,400 shares of common stock held by Mr. Patrick; and (ii) 18,9955,434 shares of common stock that Mr. Patrick has the right to acquire from us within 60 days of March 31, 20162021 pursuant to the exercise of stock options. |
(13)(17) | | Includes (i) 26,42831,228 shares of common stock held by Mr. Perry, 21,428 shares of which would be subject to our right of repurchase;Perry; and (ii) 13,63827,309 shares of common stock that Mr. Perry has the right to acquire from us within 60 days of March 31, 20162021 pursuant to the exercise of stock options. |
(14)(18) | | Includes 2,500(i) 19,800 shares of common stock held by Dr. Pierce; and (ii) 72,309 shares of common stock that Dr. Pierce has the right to acquire from us within 60 days of March 31, 20162021 pursuant to the exercise of stock options. |
(15)(19) | | Includes 6,666(i) 4,800 shares of common stock held by Dr. Pizzo; and (ii) 57,309 shares of common stock that Dr. Pizzo has the right to acquire from us within 60 days of March 31, 20162021 pursuant to the exercise of stock options. |
(16)(20) | Includes (i) 2,256 shares of common stock held by Ms. Svoronos; and (ii) 36,475 shares of common stock that Ms. Svoronos has the right to acquire from us within 60 days of March 31, 2021 pursuant to the exercise of stock options. |
| (21) | Includes 622 shares of common stock that Dr. Thompson has the right to acquire from us within 60 days of March 31, 2021 pursuant to the exercise of stock options. |
| (22) | Includes (i) 4,800 shares of common stock held by Ms. Yarno; and (ii) 57,309 shares of common stock that Ms. Yarno has the right to acquire from us within 60 days of March 31, 2021 pursuant to the exercise of stock options. |
| (23) | Includes the number of shares beneficially owned by the named executive officers and directors listed in the table above, as well asas: (i) 143,60612,005 shares of common stock held by Jung Choi, 25,000 shares of common stock held in The 2005 William ParkBrian Cathers, Ph.D. and Jung Choi Family Trust and 28,57137,343 shares of common stock that Ms. Choi hadDr. Cathers has the right to acquire from us within 60 days of March 31, 20162021 pursuant to the exercise of stock options; and (ii) 13,7254,661 shares of common stock held by Peter RadovichEric Fink and 46,78628,656 shares of common stock that Mr. Radovich hadFink has the right to acquire from us within 60 days of March 31, 20162021 pursuant to the exercise of stock options; and (iii) 2,594 shares of common stock held by John Schembri and 58,662 shares of common stock that Mr. Schembri had the right to acquire from us within 60 days of March 31, 2016 pursuant to the exercise of stock options. |
602021 Proxy Statementï Global Blood Therapeutics, Inc.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our officers and directors, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership (Forms 3, 4 and 5) with the SEC. Officers, directors and greater than 10% stockholders are required to furnish us with copies of all such forms which they file.
To our knowledge, based solely on our review of such reports or written representations from certain reporting persons, we believe that all of the filing requirements applicable to our officers, directors, greater than 10% beneficial owners and other persons subject to Section 16 of the Exchange Act were complied with during the year ended December 31, 2015, except that (i) one Form 4 and one related Form 4/A filed on behalf of Dr. Ramos, (ii) one Form 4 filed on behalf of Mr. Radovich, (iii) one Form 4 filed on behalf of Dr. Sham, (iv) one Form 4 filed on behalf of Dr. Love, (v) one Form 4 filed on behalf of Ms. Choi, (vi) one Form 4 filed on behalf of Mr. Patrick, (vii) one Form 4 filed on behalf of Mr. Perry and (viii) one Form 4 filed on behalf of Mr. Schembri, in each case to report the purchase of shares by the applicable reporting persons in the Company's initial public offering in August 2015, were filed late due to administrative error.
The following Audit Committee Report is not considered proxy solicitation material and is not deemed filed with the Securities and Exchange Commission. Notwithstanding anything to the contrary set forth in any of the Company's filings made under the Securities Act of 1933 or the Exchange Act that might incorporate filings made by the Company under those statutes, the Audit Committee Report shall not be incorporated by reference into any prior filings or into any future filings made by the Company under those statutes.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors (the “Audit Committee”) has furnished this report concerning the independent audit of the Company's financial statements. Each member of the Audit Committee meets the enhanced independence standards established by the Sarbanes-Oxley Act of 2002 and rulemaking of the Securities and Exchange Commission (the “SEC”) and the NASDAQ Stock Market regulations. A copy of the Audit Committee Charter is available on the Company's website at http://www.globalbloodtx.com.
The Audit Committee's responsibilities include assisting the Board of Directors regarding the oversight of the integrity of the Company's financial statements, the Company's compliance with legal and regulatory requirements, the independent registered public accounting firm's qualifications and independence, and the performance of the independent registered public accounting firm.
In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the Company's financial statements for the fiscal year ended December 31, 2015 with the Company's management and KPMG LLP. In addition, the Audit Committee has discussed with KPMG LLP, with and without management present, their evaluation of the Company's internal accounting controls and overall quality of the Company's financial reporting. The Audit Committee also discussed with KPMG LLP the matters required to be discussed by Statement on Auditing Standards No. 114 (formerly SAS 61), as amended (AICPA, Professional Standards, Vol. 1 AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T. The Audit Committee also received the written disclosures and the letter from KPMG LLP required by the Public Company Accounting Oversight Board Rule 3526 and the Audit Committee discussed the independence of KPMG LLP with that firm.
Based on the Audit Committee's review and discussions noted above, the Audit Committee recommended to the Board of Directors, and the Board of Directors approved, that the audited financial statements be included in the Company's Annual Report for the fiscal year ended December 31, 2015.
The Audit Committee and the Board of Directors have recommended the selection of KPMG LLP as the Company's independent registered public accounting firm for the year ending December 31, 2016.
|
| | |
| | AUDIT COMMITTEE |
| | SCOTT W. MORRISON, CHAIRMAN
DEVAL L. PATRICK
MARK L. PERRY |
HOUSEHOLDING OF PROXY MATERIALS
We have made available a procedure approved by the SEC known as “householding.” This procedure allows multiple stockholders residing at the same address the convenience of receiving a single copy of our Notice, Annual Report on Form 10-K and proxy materials, as applicable. This allows us to save money by reducing the number of documents we must print and mail, and helps protect the environment as well.
Householding is available to both registered stockholders (i.e., those stockholders with certificates registered in their name) and streetnamestreet name holders (i.e., those stockholders who hold their shares through a brokerage).
If you are a registered stockholder and would like to consent to a mailing of proxy materials and other stockholder information only to one account in your household, as identified by you, we will deliver or mail a single copy of our Annual Report and proxy materials for all registered stockholders residing at the same address. Your consent will be perpetual unless you revoke it, which you may do at any time by contacting the HouseholdingProxy Department of AmericanContinental Stock Transfer & Trust Company, LLC, (“AST”),or Continental, at One Embarcadero Center, Suite 530, San Francisco, CA 94111.
1 State Street, 30th Floor, New York, NY 10004.Registered stockholders who have not consented to householding will continue to receive copies of Annual Reports and proxy materials for each registered stockholder residing at the same address. As a registered stockholder, you may elect to participate in householding and receive only a single copy of Annual Reports or proxy statements for all registered stockholders residing at the same address by contacting ASTContinental as outlined above.
Stockholders who hold their shares through a brokerage may elect to participate in householding or revoke their consent to participate in householding by contacting their respective brokers.
Global Blood Therapeutics, Inc. ï2021 Proxy Statement61
OTHER MATTERS
We are not aware of any matters that may come before the meeting other than those referred to in the Notice. If any other matter shall properly come before the Annual Meeting, however, the persons named in the accompanying proxy intend to vote all proxies in accordance with their best judgment.
Accompanying this Proxy Statement is our Annual Report. Copies of our Annual Report are available free of charge on our website at www.globalbloodtx.comir.gbt.com/financial-information/sec-filings or you can request a copy free of charge by calling Investor Relations at (415) 946-1090650.741.7730 or sending an e-mail request to investor@globalbloodtx.com.investor@gbt.com. Please include your contact information with the request.
By Order of the Board of Directors,
| Global | Blood Therapeutics,Inc. |
Ted W. Love, M.D.
President and Chief Executive Officer
April 28, 2021
622021 Proxy Statementï Global Blood Therapeutics, Inc.
GLOBAL BLOOD THERAPEUTICS, INC.
181 OYSTER POINT BOULEVARD
SOUTH SAN FRANCISCO, CA 94080
VOTE BY INTERNET
Before The Meeting - Go to www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on June 16, 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.
During The Meeting - Go to www.virtualshareholdermeeting.com/GBT2021
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on June 16, 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 Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | |
| | D52148-P49635 | | KEEP THIS PORTION FOR YOUR RECORDS |
| — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —— — —— — —— — —— — —— — — — |
| | |
| | DETACH AND RETURN THIS PORTION ONLY |
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| GLOBAL BLOOD THERAPEUTICS, INC. | | | | For All | | Withhold All | | For All Except | | | | 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. | | | | | | | | | | | | |
| | The Board of Directors recommends you vote FOR the following Class III Directors in Proposal 1: | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | 1. | | Election of Directors. | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | Nominees: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | 01) | | Scott W. Morrison | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 02) | | Deval L. Patrick | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 03) | | Mark L. Perry | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | The Board of Directors recommends you vote FOR Proposals 2 and 3: | | | | | | | | For | | Against | | Abstain |
| | | | | | |
| | 2. | | Approval, on a non-binding, advisory basis, of the compensation of the Company’s named executive officers as disclosed in the poxy statement. | | | | ☐ | | ☐ | | ☐ |
| | | | | | |
| | 3. | | Ratification of the appointment of KPMG LLP as the independent registered public accounting firm of the Company for its fiscal year ending December 31, 2021. | | | | ☐ | | ☐ | | ☐ |
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| | 4. | | Transaction of such other business as may properly come before the meeting or any adjournment or postponement thereof. | | | | | | | | | | |
| | | | | | |
| | NOTE: This proxy, when properly executed, will be voted as directed herein by the undersigned Stockholder. If no direction is made, this proxy will be voted “FOR ALL” in Proposal 1 and “FOR” Proposals 2 and 3. | | | | | | | | | | |
| | | | |
| | By Order of the Board of Directors, | 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 office. | | |
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| Signature [PLEASE SIGN WITHIN BOX] | Global Blood Therapeutics, Inc. | Date | | |
| | | | | | |
| | |
| | /s/ Ted W. Love, M.D. |
| | Ted W. Love, M.D. |
| | President and Chief Executive Officer |
April 28, 2016
GLOBAL BLOOD THERAPEUTICS, INC.
2015 STOCK OPTION AND INCENTIVE PLAN
| | | | |
SECTION 1. Signature (Joint Owners) | GENERAL PURPOSE OF THE PLAN; DEFINITIONS | Date | | |
The name
Important Notice Regarding the Availability of the plan is the Global Blood Therapeutics, Inc. 2015 Stock Option and Incentive Plan (the “Plan”). The purpose of the Plan is to encourage and enable the officers, employees, Non-Employee Directors and other key persons (including Consultants) of Global Blood Therapeutics, Inc., a Delaware corporation (the “Company”), and its Subsidiaries upon whose judgment, initiative and efforts the Company largely dependsProxy Materials for the successful conduct of its business to acquire a proprietary interest in the Company. It is anticipated that providing such persons with a direct stake in the Company’s welfare will assure a closer identification of their interests with those of the CompanyAnnual Meeting:
The Notice and its stockholders, thereby stimulating their efforts on the Company’s behalfProxy Statement and strengthening their desire to remain with the Company.
The following terms shall be defined as set forth below:
“Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
“Administrator” means either the Board or the compensation committee of the Board or a similar committee performing the functions of the compensation committee and which is comprised of not less than two Non‑Employee Directors whoAnnual Report are independent.
“Award” or “Awards,” except where referring to a particular category of grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Units, Restricted Stock Awards, Unrestricted Stock Awards, Cash-Based Awards, Performance Share Awards and Dividend Equivalent Rights.
“Award Certificate” means a written or electronic document setting forth the terms and provisions applicable to an Award granted under the Plan. Each Award Certificate is subject to the terms and conditions of the Plan.
“Board” means the Board of Directors of the Company.
“Cash-Based Award” means an Award entitling the recipient to receive a cash-denominated payment.
“Code” means the Internal Revenue Code of 1986, as amended, and any successor Code, and related rules, regulations and interpretations.
“Consultant” means any natural person that provides bona fide services to the Company, and such services are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities.
“Covered Employee” means an employee who is a “Covered Employee” within the meaning of Section 162(m) of the Code.
“Dividend Equivalent Right” means an Award entitling the grantee to receive credits based on cash dividends that would have been paid on the shares of Stock specified in the Dividend Equivalent Right (or other award to which it relates) if such shares had been issued to and held by the grantee.
“Effective Date” means the date on which the Plan becomes effective as set forth in Section 21.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
“Fair Market Value” of the Stock on any given date means the fair market value of the Stock determined in good faith by the Administrator; provided, however, that if the Stock is admitted to quotation on the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market, the New York Stock Exchange or another national securities exchange, the determination shall be made by reference to the closing price of the Stock as quoted on the applicable exchange. If there is no closing price for such date, the determination shall be made by reference to the last date preceding such date for which there is a closing price; provided further, however, that if the date for which Fair Market Value is determined is the first day when trading prices for the Stock are reported on a national securities exchange, the Fair Market Value shall be the “Price to the Public” (or equivalent) set forth on the cover page for the final prospectus relating to the Company’s Initial Public Offering.
“Incentive Stock Option” means any Stock Option designated and qualified as an “incentive stock option” as defined in Section 422 of the Code.
“Initial Public Offering” means the consummation of the first underwritten, firm commitment public offering pursuant to an effective registration statement under the Act covering the offer and sale by the Company of its equity securities, or such other event as a result of or following which the Stock shall be publicly held.
“Non-Employee Director” means a member of the Board who is not also an employee of the Company or any Subsidiary.
“Non-Qualified Stock Option” means any Stock Option that is not an Incentive Stock Option.
“Option” or “Stock Option” means any option to purchase shares of Stock granted pursuant to Section 5.
“Performance-Based Award” means any Restricted Stock Award, Restricted Stock Units, Performance Share Award or Cash-Based Award granted to a Covered Employee that is intended to qualify as “performance-based compensation” under Section 162(m) of the Code and the regulations promulgated thereunder.
“Performance Criteria” means the criteria that the Administrator selects for purposes of establishing the Performance Goal or Performance Goals for an individual for a Performance Cycle. The Performance Criteria (which shall be applicable to the organizational level specified by the Administrator, including, but not limited to, the Company or a unit, division, group, or Subsidiary of the Company) that will be used to establish Performance Goals are limited to the following: achievement of specified research and development, publication, clinical and/or regulatory milestones, total shareholder return, earnings before interest, taxes, depreciation and amortization, net income (loss) (either before or after interest, taxes, depreciation and/or amortization), changes in the market price of the Stock, economic value-added, funds from operations or similar measure, sales or revenue, acquisitions or strategic transactions, operating income (loss), cash flow (including,
but not limited to, operating cash flow and free cash flow), return on capital, assets, equity, or investment, return on sales, gross or net profit levels, productivity, expense, margins, operating efficiency, customer satisfaction, working capital, earnings (loss) per share of Stock, sales or market shares and number of customers, any of which may be measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group.
“Performance Cycle” means one or more periods of time, which may be of varying and overlapping durations, as the Administrator may select, over which the attainment of one or more Performance Criteria will be measured for the purpose of determining a grantee’s right to and the payment of a Restricted Stock Award, Restricted Stock Units, Performance Share Award or Cash-Based Award, the vesting and/or payment of which is subject to the attainment of one or more Performance Goals. Each such period shall not be less than 12 months.
“Performance Goals” means, for a Performance Cycle, the specific goals established in writing by the Administrator for a Performance Cycle based upon the Performance Criteria.
“Performance Share Award” means an Award entitling the recipient to acquire shares of Stock upon the attainment of specified performance goals.
“Restricted Shares” means the shares of Stock underlying a Restricted Stock Award that remain subject to a risk of forfeiture or the Company’s right of repurchase.
“Restricted Stock Award” means an Award of Restricted Shares subject to such restrictions and conditions as the Administrator may determineavailable at the time of grant.
“Restricted Stock Units” means an Award of stock units subject to such restrictions and conditions as the Administrator may determine at the time of grant.
“Sale Event” shall mean (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power and outstanding stock immediately prior to such transaction do not own a majority of the outstanding voting power and outstanding stock or other equity interests of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, (iii) the sale of all of the Stock of the Company to an unrelated person, entity or group thereof acting in concert, or (iv) any other transaction in which the owners of the Company’s outstanding voting power immediately prior to such transaction do not own at least a majority of the outstanding voting power of the Company or any successor entity immediately upon completion of the transaction other than as a result of the acquisition of securities directly from the Company.
“Sale Price” means the value as determined by the Administrator of the consideration payable, or otherwise to be received by stockholders, per share of Stock pursuant to a Sale Event.
“Section 409A” means Section 409A of the Code and the regulations and other guidance promulgated thereunder.
“Stock” means the Common Stock, par value $0.001 per share, of the Company, subject to adjustments pursuant to Section 3.
“Stock Appreciation Right” means an Award entitling the recipient to receive shares of Stock having a value equal to the excess of the Fair Market Value of the Stock on the date of exercise over the exercise price of
the Stock Appreciation Right multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised.
“Subsidiary” means any corporation or other entity (other than the Company) in which the Company has at least a 50 percent interest, either directly or indirectly.
“Ten Percent Owner” means an employee who owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10 percent of the combined voting power of all classes of stock of the Company or any parent or subsidiary corporation.
“Unrestricted Stock Award” means an Award of shares of Stock free of any restrictions.
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SECTION 2. | ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE AWARDS— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — |
(a)Administration of Plan. The Plan shall be administered by the Administrator.
(b)Powers of Administrator. The Administrator shall have the power and authority to grant Awards consistent with the terms of the Plan, including the power and authority:
(i)to select the individuals to whom Awards may from time to time be granted;
(ii)to determine the time or times of grant, and the extent, if any, of Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Unrestricted Stock Awards, Cash-Based Awards, Performance Share Awards and Dividend Equivalent Rights, or any combination of the foregoing, granted to any one or more grantees;
(iii)to determine the number of shares of Stock to be covered by any Award;
(iv)to determine and modify from time to time the terms and conditions, including restrictions, not inconsistent with the terms of the Plan, of any Award, which terms and conditions may differ among individual Awards and grantees, and to approve the forms of Award Certificates;
(v)to accelerate at any time the exercisability or vesting of all or any portion of any Award; provided, that the Administrator generally shall not exercise such discretion to accelerate Awards subject to Sections 7 and 8 except in the event of the grantee’s death, disability or retirement, or a change in control of the Company (including a Sale Event);
(vi)subject to the provisions of Section 5(c), to extend at any time the period in which Stock Options may be exercised; and
(vii)at any time to adopt, alter and repeal such rules, guidelines and practices for administration of the Plan and for its own acts and proceedings as it shall deem advisable; to interpret the terms and provisions of the Plan and any Award (including related written instruments); to make all determinations it deems advisable for the administration of the Plan; to decide all disputes arising in connection with the Plan; and to otherwise supervise the administration of the Plan.
All decisions and interpretations of the Administrator shall be binding on all persons, including the Company and Plan grantees.
(c)Delegation of Authority to Grant Awards. Subject to applicable law, the Administrator, in its discretion, may delegate to the Chief Executive Officer of the Company all or part of the Administrator’s authority and duties with respect to the granting of Awards to individuals who are (i) not subject to the reporting and other provisions of Section 16 of the Exchange Act and (ii) not Covered Employees. Any such delegation by the Administrator shall include a limitation as to the amount of Awards that may be granted during the period of the delegation and shall contain guidelines as to the determination of the exercise price and the vesting criteria. The Administrator may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Administrator’s delegate or delegates that were consistent with the terms of the Plan.
(d)Award Certificate. Awards under the Plan shall be evidenced by Award Certificates that set forth the terms, conditions and limitations for each Award which may include, without limitation, the term of an Award and the provisions applicable in the event employment or service terminates.
(e)Indemnification. Neither the Board nor the Administrator, nor any member of either or any delegate thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with the Plan, and the members of the Board and the Administrator (and any delegate thereof) shall be entitled in all cases to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including, without limitation, reasonable attorneys’ fees) arising or resulting therefrom to the fullest extent permitted by law and/or under the Company’s certificate of incorporation or bylaws or any directors’ and officers’ liability insurance coverage which may be in effect from time to time and/or any indemnification agreement between such individual and the Company.
(f)Foreign Award Recipients. Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in other countries in which the Company and its Subsidiaries operate or have employees or other individuals eligible for Awards, the Administrator, in its sole discretion, shall have the power and authority to: (i) determine which Subsidiaries shall be covered by the Plan; (ii) determine which individuals outside the United States are eligible to participate in the Plan; (iii) modify the terms and conditions of any Award granted to individuals outside the United States to comply with applicable foreign laws; (iv) establish subplans and modify exercise procedures and other terms and procedures, to the extent the Administrator determines such actions to be necessary or advisable (and such subplans and/or modifications shall be attached to this Plan as appendices); provided, however, that no such subplans and/or modifications shall increase the share limitations contained in Section 3(a) hereof; and (v) take any action, before or afteran Award is made, that the Administrator determines to be necessary or advisable to obtain approval or comply with any local governmental regulatory exemptions or approvals. Notwithstanding the foregoing, the Administrator may not take any actions hereunder, and no Awards shall be granted, that would violate the Exchange Act or any other applicable United States securities law, the Code, or any other applicable United States governing statute or law.
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SECTION 3. | STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTIONGLOBAL BLOOD THERAPEUTICS, INC. Annual Meeting of Stockholders June 17, 2021 8:00 AM This proxy is solicited by the Board of Directors The stockholder(s) hereby appoint(s) Ted Love, M.D. and Jeffrey Farrow, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of GLOBAL BLOOD THERAPEUTICS, INC. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 8:00 AM PDT on June 17, 2021, held virtually at www.virtualshareholdermeeting.com/GBT2021, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. Continued and to be signed on reverse side |
(a)Stock Issuable. The maximum number of shares of Stock reserved and available for issuance under the Plan shall be 1,430,000 shares (the “Initial Limit”), subject to adjustment as provided in Section 3(c), plus on January 1, 2016 and each January 1 thereafter, the number of shares of Stock reserved and available for issuance under the Plan shall be cumulatively increased by four percent (4%) of the number of shares of Stock issued and outstanding on the immediately preceding December 31 or such lesser number of shares of Stock as determined by the Administrator (the “Annual Increase”). Subject to such overall limitation, the maximum aggregate number of shares of Stock that may be issued in the form of Incentive Stock Options shall not exceed the Initial Limit cumulatively increased on January 1, 2016 and on each January 1 thereafter by the lesser of the
Annual Increase for such year or 2,857,000 shares of Stock, subject in all cases to adjustment as provided in Section 3(c). The shares of Stock underlying any Awards under the Plan and under the Company’s 2012 Stock Option and Grant Plan, as amended, that are forfeited, canceled, held back upon exercise of an Option or settlement of an Award to cover the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of Stock or otherwise terminated (other than by exercise) shall be added back to the shares of Stock available for issuance under the Plan. In the event the Company repurchases shares of Stock on the open market, such shares shall not be added to the shares of Stock available for issuance under the Plan. Subject to such overall limitations, shares of Stock may be issued up to such maximum number pursuant to any type or types of Award; provided, however, that Stock Options or Stock Appreciation Rights with respect to no more than 1,750,000 shares of Stock may be granted to any one individual grantee during any one calendar year period. The shares available for issuance under the Plan may be authorized but unissued shares of Stock or shares of Stock reacquired by the Company.
(b)[Reserved].
(c)Changes in Stock. Subject to Section 3(d) hereof, if, as a result of any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar change in the Company’s capital stock, the outstanding shares of Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company, or additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of Stock or other securities, or, if, as a result of any merger or consolidation, sale of all or substantially all of the assets of the Company, the outstanding shares of Stock are converted into or exchanged for securities of the Company or any successor entity (or a parent or subsidiary thereof), the Administrator shall make an appropriate or proportionate adjustment in (i) the maximum number of shares reserved for issuance under the Plan, including the maximum number of shares that may be issued in the form of Incentive Stock Options, (ii) the number of Stock Options or Stock Appreciation Rights that can be granted to any one individual grantee and the maximum number of shares that may be granted under a Performance-Based Award, (iii) the number and kind of shares or other securities subject to any then outstanding Awards under the Plan, (iv) the repurchase price, if any, per share subject to each outstanding Restricted Stock Award, and (v) the exercise price for each share subject to any then outstanding Stock Options and Stock Appreciation Rights under the Plan, without changing the aggregate exercise price (i.e., the exercise price multiplied by the number of Stock Options and Stock Appreciation Rights) as to which such Stock Options and Stock Appreciation Rights remain exercisable. The Administrator shall also make equitable or proportionate adjustments in the number of shares subject to outstanding Awards and the exercise price and the terms of outstanding Awards to take into consideration cash dividends paid other than in the ordinary course or any other extraordinary corporate event. The adjustment by the Administrator shall be final, binding and conclusive. No fractional shares of Stock shall be issued under the Plan resulting from any such adjustment, but the Administrator in its discretion may make a cash payment in lieu of fractional shares.
(d)Mergers and Other Transactions. Except as the Administrator may otherwise specify with respect to particular Awards in the applicable Award Certificate, in the case of and subject to the consummation of a Sale Event, the parties thereto may cause the assumption or continuation of Awards theretofore granted by the successor entity, or the substitution of such Awards with new Awards of the successor entity or parent thereof, with appropriate adjustment as to the number and kind of shares and, if appropriate, the per share exercise prices, as such parties shall agree. To the extent the parties to such Sale Event do not provide for the assumption, continuation or substitution of Awards, the Plan and all outstanding Awards hereunder will terminate upon the effective time of the Sale Event. Notwithstanding the foregoing, the Administrator may, in its discretion or to the extent provided in the relevant Award Certificate, cause certain Awards to become vested
and/or exercisable immediately prior to such Sale Event. In the event of such termination, (i) the Company shall have the right, but not the obligation, to make or provide for a cash payment to the grantees holding Options and Stock Appreciation Rights, in exchange for the cancellation thereof, in an amount equal to the difference between (A) the Sale Price multiplied by the number of shares of Stock subject to outstanding Options and Stock Appreciation Rights (to the extent then exercisable after taking into account any acceleration thereunder at prices not in excess of the Sale Price) and (B) the aggregate exercise price of all such outstanding Options and Stock Appreciation Rights; or (ii) each grantee shall be permitted, within a specified period of time prior to the consummation of the Sale Event as determined by the Administrator, to exercise all outstanding Options and Stock Appreciation Rights (to the extent then exercisable) held by such grantee, including those that will become exercisable upon the consummation of the Sale Event (provided that such exercise shall be subject to the consummation of the Sale Event). The Company shall also have the right, but not the obligation, to make or provide a cash payment to the grantees holding other Awards, in exchange for cancellation thereof an amount equal to the Sale Price multiplied by the number of shares subject to such Awards, to be paid at the time of the Sale Event or upon the later vesting of such Awards.
Notwithstanding anything to the contrary herein, in the event a grantee’s service relationship is terminated by the Company or any successor without Cause within one year following the consummation of a Sale Event, any Awards assumed or substituted in a Sale Event which are subject to vesting conditions, the lapse or achievement of any conditions and/or a right of repurchase in favor of the Company or a successor entity, shall accelerate in full, and any Awards accelerated in such manner with conditions and restrictions relating to the attainment of performance goals will be deemed achieved at one hundred percent (100%) of target levels. As used in this subsection (d) only, “Cause” shall mean dismissal as a result of (i) any material breach by the grantee of any agreement between the grantee and the Company; (ii) the conviction of, indictment for or plea of nolo contendere by the grantee to a felony or a crime involving moral turpitude; or (iii) any material misconduct or willful and deliberate non-performance (other than by reason of disability) by the grantee of the grantee’s duties to the Company.
Grantees under the Plan will be such full or part-time officers and other employees, Non-Employee Directors and other key persons (including Consultants) of the Company and its Subsidiaries as are selected from time to time by the Administrator in its sole discretion.
(a)Award of Stock Options. The Administrator may grant Stock Options under the Plan. Any Stock Option granted under the Plan shall be in such form as the Administrator may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock Options or Non-Qualified Stock Options. Incentive Stock Options may be granted only to employees of the Company or any Subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f) of the Code. To the extent that any Option does not qualify as an Incentive Stock Option, it shall be deemed a Non-Qualified Stock Option.
Stock Options granted pursuant to this Section 5 shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable. If the Administrator so determines, Stock Options may be granted in lieu of cash compensation at the optionee’s election, subject to such terms and conditions as the Administrator may establish.
(b)Exercise Price. The exercise price per share for the Stock covered by a Stock Option granted pursuant to this Section 5 shall be determined by the Administrator at the time of grant but shall not be less than one hundred percent (100%) of the Fair Market Value on the date of grant. In the case of an Incentive Stock Option that is granted to a Ten Percent Owner, the option price of such Incentive Stock Option shall be not less than one hundred ten percent (110%) of the Fair Market Value on the grant date.
(c)Option Term. The term of each Stock Option shall be fixed by the Administrator, but no Stock Option shall be exercisable more than ten years after the date the Stock Option is granted. In the case of an Incentive Stock Option that is granted to a Ten Percent Owner, the term of such Stock Option shall be no more than five years from the date of grant.
(d)Exercisability; Rights of a Stockholder. Stock Options shall become exercisable at such time or times, whether or not in installments, as shall be determined by the Administrator at or after the grant date. The Administrator may at any time accelerate the exercisability of all or any portion of any Stock Option. An optionee shall have the rights of a stockholder only as to shares acquired upon the exercise of a Stock Option and not as to unexercised Stock Options.
(e)Method of Exercise. Stock Options may be exercised in whole or in part, by giving written or electronic notice of exercise to the Company, specifying the number of shares to be purchased. Payment of the purchase price may be made by one or more of the following methods except to the extent otherwise provided in the Option Award Certificate:
(i)In cash, by certified or bank check or other instrument acceptable to the Administrator;
(ii)Through the delivery (or attestation to the ownership following such procedures as the Company may prescribe) of shares of Stock that are not then subject to restrictions under any Company plan. Such surrendered shares shall be valued at Fair Market Value on the exercise date;
(iii)By the optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company for the purchase price; provided that in the event the optionee chooses to pay the purchase price as so provided, the optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Administrator shall prescribe as a condition of such payment procedure; or
(iv)With respect to Stock Options that are not Incentive Stock Options, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price.
Payment instruments will be received subject to collection. The transfer to the optionee on the records of the Company or of the transfer agent of the shares of Stock to be purchased pursuant to the exercise of a Stock Option will be contingent upon receipt from the optionee (or a purchaser acting in his stead in accordance with the provisions of the Stock Option) by the Company of the full purchase price for such shares and the fulfillment of any other requirements contained in the Option Award Certificate or applicable provisions of laws (including the satisfaction of any withholding taxes that the Company is obligated to withhold with respect to the optionee). In the event an optionee chooses to pay the purchase price by previously-owned shares of Stock through the attestation method, the number of shares of Stock transferred to the optionee upon the exercise of the Stock Option shall be net of the number of attested shares. In the event that the Company establishes, for
itself or using the services of a third party, an automated system for the exercise of Stock Options, such as a system using an internet website or interactive voice response, then the paperless exercise of Stock Options may be permitted through the use of such an automated system.
(f)Annual Limit on Incentive Stock Options. To the extent required for “incentive stock option” treatment under Section 422 of the Code, the aggregate Fair Market Value (determined as of the time of grant) of the shares of Stock with respect to which Incentive Stock Options granted under this Plan and any other plan of the Company or its parent and subsidiary corporations become exercisable for the first time by an optionee during any calendar year shall not exceed $100,000. To the extent that any Stock Option exceeds this limit, it shall constitute a Non-Qualified Stock Option.
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SECTION 6. | STOCK APPRECIATION RIGHTS |
(a)Award of Stock Appreciation Rights. The Administrator may grant Stock Appreciation Rights under the Plan. A Stock Appreciation Right is an Award entitling the recipient to receive shares of Stock having a value equal to the excess of the Fair Market Value of a share of Stock on the date of exercise over the exercise price of the Stock Appreciation Right multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised.
(b)Exercise Price of Stock Appreciation Rights. The exercise price of a Stock Appreciation Right shall not be less than one hundred percent (100%) of the Fair Market Value of the Stock on the date of grant.
(c)Grant and Exercise of Stock Appreciation Rights. Stock Appreciation Rights may be granted by the Administrator independently of any Stock Option granted pursuant to Section 5 of the Plan.
(d)Terms and Conditions of Stock Appreciation Rights. Stock Appreciation Rights shall be subject to such terms and conditions as shall be determined from time to time by the Administrator. The term of a Stock Appreciation Right may not exceed ten years.
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SECTION 7. | RESTRICTED STOCK AWARDS |
(a)Nature of Restricted Stock Awards. The Administrator may grant Restricted Stock Awards under the Plan. A Restricted Stock Award is any Award of Restricted Shares subject to such restrictions and conditions as the Administrator may determine at the time of grant. Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives. The terms and conditions of each such Award Certificate shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees.
(b)Rights as a Stockholder. Upon the grant of the Restricted Stock Award and payment of any applicable purchase price, a grantee shall have the rights of a stockholder with respect to the voting of the Restricted Shares and receipt of dividends; provided that if the lapse of restrictions with respect to the Restricted Stock Award is tied to the attainment of performance goals, any dividends paid by the Company during the performance period shall accrue and shall not be paid to the grantee until and to the extent the performance goals are met with respect to the Restricted Stock Award. Unless the Administrator shall otherwise determine, (i) uncertificated Restricted Shares shall be accompanied by a notation on the records of the Company or the transfer agent to the effect that they are subject to forfeiture until such Restricted Shares are vested as provided in Section 7(d) below, and (ii) certificated Restricted Shares shall remain in the possession of the Company until such Restricted Shares are vested as provided in Section 7(d) below, and the grantee shall be
required, as a condition of the grant, to deliver to the Company such instruments of transfer as the Administrator may prescribe.
(c)Restrictions. Restricted Shares may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as specifically provided herein or in the Restricted Stock Award Certificate. Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, if a grantee’s employment (or other service relationship) with the Company and its Subsidiaries terminates for any reason, any Restricted Shares that have not vested at the time of termination shall automatically and without any requirement of notice to such grantee from or other action by or on behalf of, the Company be deemed to have been reacquired by the Company at its original purchase price (if any) from such grantee or such grantee’s legal representative simultaneously with such termination of employment (or other service relationship), and thereafter shall cease to represent any ownership of the Company by the grantee or rights of the grantee as a stockholder. Following such deemed reacquisition of Restricted Shares that are represented by physical certificates, a grantee shall surrender such certificates to the Company upon request without consideration.
(d)Vesting of Restricted Shares. The Administrator at the time of grant shall specify the date or dates and/or the attainment of pre-established performance goals, objectives and other conditions on which the non-transferability of the Restricted Shares and the Company’s right of repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or the attainment of such pre-established performance goals, objectives and other conditions, the shares on which all restrictions have lapsed shall no longer be Restricted Shares and shall be deemed “vested.”
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SECTION 8. | RESTRICTED STOCK UNITS |
(a)Nature of Restricted Stock Units. The Administrator may grant Restricted Stock Units under the Plan. A Restricted Stock Unit is an Award of stock units that may be settled in shares of Stock upon the satisfaction of such restrictions and conditions at the time of grant. Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives. The terms and conditions of each such Award Certificate shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees. Except in the case of Restricted Stock Units with a deferred settlement date that complies with Section 409A, at the end of the vesting period, the Restricted Stock Units, to the extent vested, shall be settled in the form of shares of Stock. Restricted Stock Units with deferred settlement dates are subject to Section 409A and shall contain such additional terms and conditions as the Administrator shall determine in its sole discretion in order to comply with the requirements of Section 409A.
(b)Election to Receive Restricted Stock Units in Lieu of Compensation. The Administrator may, in its sole discretion, permit a grantee to elect to receive a portion of future cash compensation otherwise due to such grantee in the form of an award of Restricted Stock Units. Any such election shall be made in writing and shall be delivered to the Company no later than the date specified by the Administrator and in accordance with Section 409A and such other rules and procedures established by the Administrator. Any such future cash compensation that the grantee elects to defer shall be converted to a fixed number of Restricted Stock Units based on the Fair Market Value of Stock on the date the compensation would otherwise have been paid to the grantee if such payment had not been deferred as provided herein. The Administrator shall have the sole right to determine whether and under what circumstances to permit such elections and to impose such limitations and other terms and conditions thereon as the Administrator deems appropriate. Any Restricted Stock Units that are
elected to be received in lieu of cash compensation shall be fully vested, unless otherwise provided in the Award Certificate.
(c)Rights as a Stockholder. A grantee shall have the rights as a stockholder only as to shares of Stock acquired by the grantee upon settlement of Restricted Stock Units; provided, however, that the grantee may be credited with Dividend Equivalent Rights with respect to the stock units underlying his Restricted Stock Units, subject to the provisions of Section 13 and such terms and conditions as the Administrator may determine.
(d)Termination. Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, a grantee’s right in all Restricted Stock Units that have not vested shall automatically terminate upon the grantee’s termination of employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.
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SECTION 9. | UNRESTRICTED STOCK AWARDS |
Grant or Sale of Unrestricted Stock. The Administrator may grant (or sell at par value or such higher purchase price determined by the Administrator) an Unrestricted Stock Award under the Plan. An Unrestricted Stock Award is an Award pursuant to which the grantee may receive shares of Stock free of any restrictions under the Plan. Unrestricted Stock Awards may be granted in respect of past services or other valid consideration, or in lieu of cash compensation due to such grantee.
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SECTION 10. | CASH-BASED AWARDS |
Grant of Cash-Based Awards. The Administrator may grant Cash-Based Awards under the Plan. A Cash-Based Award is an Award that entitles the grantee to a payment in cash upon the attainment of specified Performance Goals. The Administrator shall determine the maximum duration of the Cash-Based Award, the amount of cash to which the Cash-Based Award pertains, the conditions upon which the Cash-Based Award shall become vested or payable, and such other provisions as the Administrator shall determine. Each Cash-Based Award shall specify a cash-denominated payment amount, formula or payment ranges as determined by the Administrator. Payment, if any, with respect to a Cash-Based Award shall be made in accordance with the terms of the Award and may be made in cash.
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SECTION 11. | PERFORMANCE SHARE AWARDS |
(a)Nature of Performance Share Awards. The Administrator may grant Performance Share Awards under the Plan. A Performance Share Award is an Award entitling the grantee to receive shares of Stock upon the attainment of performance goals. The Administrator shall determine whether and to whom Performance Share Awards shall be granted, the performance goals, the periods during which performance is to be measured, which may not be less than one year except in the case of a Sale Event, and such other limitations and conditions as the Administrator shall determine.
(b)Rights as a Stockholder. A grantee receiving a Performance Share Award shall have the rights of a stockholder only as to shares of Stock actually received by the grantee under the Plan and not with respect to shares subject to the Award but not actually received by the grantee. A grantee shall be entitled to receive shares of Stock under a Performance Share Award only upon satisfaction of all conditions specified in the Performance Share Award Certificate (or in a performance plan adopted by the Administrator).
(c)Termination. Except as may otherwise be provided by the Administrator either in the Award agreement or, subject to Section 18 below, in writing after the Award is issued, a grantee’s rights in all Performance Share Awards shall automatically terminate upon the grantee’s termination of employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.
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SECTION 12. | PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES |
(a)Performance-Based Awards. The Administrator may grant one or more Performance-Based Awards in the form of a Restricted Stock Award, Restricted Stock Units, Performance Share Awards or Cash-Based Award payable upon the attainment of Performance Goals that are established by the Administrator and relate to one or more of the Performance Criteria, in each case on a specified date or dates or over any period or periods determined by the Administrator. The Administrator shall define in an objective fashion the manner of calculating the Performance Criteria it selects to use for any Performance Cycle. Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance or the performance of a division, business unit, or an individual. The Administrator, in its discretion, may adjust or modify the calculation of Performance Goals for such Performance Cycle in order to prevent the dilution or enlargement of the rights of an individual (i) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event or development, (ii) in recognition of , or in anticipation of, any other unusual or nonrecurring events affecting the Company or the financial statements of the Company or (iii) in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles or business conditions; provided, however, that the Administrator may not exercise such discretion in a manner that would increase the Performance-Based Award granted to a Covered Employee. Each Performance-Based Award shall comply with the provisions set forth below.
(b)Grant of Performance-Based Awards. With respect to each Performance-Based Award granted to a Covered Employee (or any other eligible individual that the Administrator determines is reasonably likely to become a Covered Employee), the Administrator shall select, within the first 90 days of a Performance Cycle (or, if shorter, within the maximum period allowed under Section 162(m) of the Code) the Performance Criteria for such grant, and the Performance Goals with respect to each Performance Criterion (including a threshold level of performance below which no amount will become payable with respect to such Award). Each Performance-Based Award will specify the amount payable, or the formula for determining the amount payable, upon achievement of the various applicable performance targets. The Performance Criteria established by the Administrator may be (but need not be) different for each Performance Cycle and different Performance Goals may be applicable to Performance-Based Awards to different Covered Employees.
(c)Payment of Performance-Based Awards. Following the completion of a Performance Cycle, the Administrator shall meet to review and certify in writing whether, and to what extent, the Performance Goals for the Performance Cycle have been achieved and, if so, to also calculate and certify in writing the amount of the Performance-Based Awards earned for the Performance Cycle. The Administrator shall then determine the actual size of each Covered Employee’s Performance-Based Award, and, in doing so, may reduce or eliminate the amount of the Performance-Based Award for a Covered Employee if, in its sole judgment, such reduction or elimination is appropriate.
(d)Maximum Award Payable. The maximum Performance-Based Award payable to any one Covered Employee under the Plan for a Performance Cycle is 1,750,000 shares of Stock (subject to adjustment as provided in Section 3(c) hereof) or $2,000,000 in the case of a Performance-Based Award that is a Cash-Based Award.
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SECTION 13. | DIVIDEND EQUIVALENT RIGHTS |
(a)Dividend Equivalent Rights. The Administrator may grant Dividend Equivalent Rights under the Plan. A Dividend Equivalent Right is an Award entitling the grantee to receive credits based on cash dividends that would have been paid on the shares of Stock specified in the Dividend Equivalent Right (or other Award to which it relates) if such shares had been issued to the grantee. A Dividend Equivalent Right may be granted hereunder to any grantee as a component of an award of Restricted Stock Units, Restricted Stock Award or Performance Share Award or as a freestanding award. The terms and conditions of Dividend Equivalent Rights shall be specified in the Award Certificate. Dividend equivalents credited to the holder of a Dividend Equivalent Right may be paid currently or may be deemed to be reinvested in additional shares of Stock, which may thereafter accrue additional equivalents. Any such reinvestment shall be at Fair Market Value on the date of reinvestment or such other price as may then apply under a dividend reinvestment plan sponsored by the Company, if any. Dividend Equivalent Rights may be settled in cash or shares of Stock or a combination thereof, in a single installment or installments. A Dividend Equivalent Right granted as a component of an Award of Restricted Stock Units, a Restricted Stock Award with performance vesting or a Performance Share Award shall provide that such Dividend Equivalent Right shall be settled only upon settlement or payment of, or lapse of restrictions on, such other Award, and that such Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions as such other Award.
(b)Termination. Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, a grantee’s rights in all Dividend Equivalent Rights or equivalent interest granted as a component of any award of Restricted Stock Units, Restricted Stock Award or Performance Share Award that has not yet vested shall automatically terminate upon the grantee’s termination of employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.
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SECTION 14. | TRANSFERABILITY OF AWARDS |
(a)Transferability. Except as provided in Section 14(b) below, during a grantee’s lifetime, his or her Awards shall be exercisable only by the grantee, or by the grantee’s legal representative or guardian in the event of the grantee’s incapacity. No Awards shall be sold, assigned, transferred or otherwise encumbered or disposed of by a grantee other than by will or by the laws of descent and distribution or pursuant to a domestic relations order. No Awards shall be subject, in whole or in part, to attachment, execution, or levy of any kind, and any purported transfer in violation hereof shall be null and void.
(b)Administrator Action. Notwithstanding Section 14(a), the Administrator, in its discretion, may provide either in the Award Certificate regarding a given Award or by subsequent written approval that the grantee (who is an employee or director) may transfer his or her Non-Qualified Options to his or her immediate family members, to trusts for the benefit of such family members, or to partnerships in which such family members are the only partners, provided that the transferee agrees in writing with the Company to be bound by all of the terms and conditions of this Plan and the applicable Award. In no event may an Award be transferred by a grantee for value.
(c)Family Member. For purposes of Section 14(b), “family member” shall mean a grantee’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the grantee’s household (other than a tenant of the grantee), a trust in which these persons (or the grantee) have more than fifty percent (50%) of the beneficial interest, a foundation in which these
persons (or the grantee) control the management of assets, and any other entity in which these persons (or the grantee) own more than fifty percent (50%) of the voting interests.
(d)Designation of Beneficiary. To the extent permitted by the Administrator, each grantee to whom an Award has been made under the Plan may designate a beneficiary or beneficiaries to exercise any Award or receive any payment under any Award payable on or after the grantee’s death. Any such designation shall be on a form provided for that purpose by the Administrator and shall not be effective until received by the Administrator. If no beneficiary has been designated by a deceased grantee, or if the designated beneficiaries have predeceased the grantee, the beneficiary shall be the grantee’s estate.
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SECTION 15. | TAX WITHHOLDING |
(a)Payment by Grantee. Each grantee shall, no later than the date as of which the value of an Award or of any Stock or other amounts received thereunder first becomes includable in the gross income of the grantee for Federal income tax purposes, pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of, any Federal, state, or local taxes of any kind required by law to be withheld by the Company with respect to such income. The Company and its Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the grantee. The Company’s obligation to deliver evidence of book entry (or stock certificates) to any grantee is subject to and conditioned on tax withholding obligations being satisfied by the grantee.
(b)Payment in Stock. Subject to approval by the Administrator, a grantee may elect to have the Company’s minimum required tax withholding obligation satisfied, in whole or in part, by authorizing the Company to withhold from shares of Stock to be issued pursuant to any Award a number of shares with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the withholding amount due. For purposes of share withholding, the Fair Market Value of withheld shares shall be determined in the same manner as the value of Stock includible in income of the Participants.
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SECTION 16. | SECTION 409A AWARDS |
To the extent that any Award is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A (a “409A Award”), the Award shall be subject to such additional rules and requirements as specified by the Administrator from time to time in order to comply with Section 409A. In this regard, if any amount under a 409A Award is payable upon a “separation from service” (within the meaning of Section 409A) to a grantee who is then considered a “specified employee” (within the meaning of Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the grantee’s separation from service, or (ii) the grantee’s death, but only to the extent such delay is necessary to prevent such payment from being subject to interest, penalties and/or additional tax imposed pursuant to Section 409A. Further, the settlement of any such Award may not be accelerated except to the extent permitted by Section 409A.
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SECTION 17. | TERMINATION OF EMPLOYMENT, TRANSFER, LEAVE OF ABSENCE, ETC. |
(a)Termination of Employment. If the grantee’s employer ceases to be a Subsidiary, the grantee shall be deemed to have terminated employment for purposes of the Plan.
(b)For purposes of the Plan, the following events shall not be deemed a termination of employment:
(i)a transfer to the employment of the Company from a Subsidiary or from the Company to a Subsidiary, or from one Subsidiary to another; or
(ii)an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the employee’s right to re-employment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Administrator otherwise so provides in writing.
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SECTION 18. | AMENDMENTS AND TERMINATION |
The Board may, at any time, amend or discontinue the Plan and the Administrator may, at any time, amend or cancel any outstanding Award for the purpose of satisfying changes in law or for any other lawful purpose, but no such action shall adversely affect rights under any outstanding Award without the holder’s consent. Except as provided in Section 3(c) or 3(d), without prior stockholder approval, in no event may the Administrator exercise its discretion to reduce the exercise price of outstanding Stock Options or Stock Appreciation Rights or effect repricing through cancellation and re-grants or cancellation of Stock Options or Stock Appreciation Rights in exchange for cash. To the extent required under the rules of any securities exchange or market system on which the Stock is listed, to the extent determined by the Administrator to be required by the Code to ensure that Incentive Stock Options granted under the Plan are qualified under Section 422 of the Code, or to ensure that compensation earned under Awards qualifies as performance-based compensation under Section 162(m) of the Code, Plan amendments shall be subject to approval by the Company stockholders entitled to vote at a meeting of stockholders. Nothing in this Section 18 shall limit the Administrator’s authority to take any action permitted pursuant to Section 3(c) or 3(d).
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SECTION 19. | STATUS OF PLAN |
With respect to the portion of any Award that has not been exercised and any payments in cash, Stock or other consideration not received by a grantee, a grantee shall have no rights greater than those of a general creditor of the Company unless the Administrator shall otherwise expressly determine in connection with any Award or Awards. In its sole discretion, the Administrator may authorize the creation of trusts or other arrangements to meet the Company’s obligations to deliver Stock or make payments with respect to Awards hereunder, provided that the existence of such trusts or other arrangements is consistent with the foregoing sentence.
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SECTION 20. | GENERAL PROVISIONS |
(a)No Distribution. The Administrator may require each person acquiring Stock pursuant to an Award to represent to and agree with the Company in writing that such person is acquiring the shares without a view to distribution thereof.
(b)Delivery of Stock Certificates. Stock certificates to grantees under this Plan shall be deemed delivered for all purposes when the Company or a stock transfer agent of the Company shall have mailed such certificates in the United States mail, addressed to the grantee, at the grantee’s last known address on file with the Company. Uncertificated Stock shall be deemed delivered for all purposes when the Company or a Stock transfer agent of the Company shall have given to the grantee by electronic mail (with proof of receipt) or by United States mail, addressed to the grantee, at the grantee’s last known address on file with the Company, notice of issuance and recorded the issuance in its records (which may include electronic “book entry” records). Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing shares of Stock pursuant to the exercise of any Award, unless and until the Administrator
has determined, with advice of counsel (to the extent the Administrator deems such advice necessary or advisable), that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the shares of Stock are listed, quoted or traded. All Stock certificates delivered pursuant to the Plan shall be subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with federal, state or foreign jurisdiction, securities or other laws, rules and quotation system on which the Stock is listed, quoted or traded. The Administrator may place legends on any Stock certificate to reference restrictions applicable to the Stock. In addition to the terms and conditions provided herein, the Administrator may require that an individual make such reasonable covenants, agreements, and representations as the Administrator, in its discretion, deems necessary or advisable in order to comply with any such laws, regulations, or requirements. The Administrator shall have the right to require any individual to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation, as may be imposed in the discretion of the Administrator.
(c)Stockholder Rights. Until Stock is deemed delivered in accordance with Section 20(b), no right to vote or receive dividends or any other rights of a stockholder will exist with respect to shares of Stock to be issued in connection with an Award, notwithstanding the exercise of a Stock Option or any other action by the grantee with respect to an Award.
(d)Other Compensation Arrangements; No Employment Rights. Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, including trusts, and such arrangements may be either generally applicable or applicable only in specific cases. The adoption of this Plan and the grant of Awards do not confer upon any employee any right to continued employment with the Company or any Subsidiary.
(e)Trading Policy Restrictions. Option exercises and other Awards under the Plan shall be subject to the Company’s insider trading policies and procedures, as in effect from time to time.
(f)Clawback Policy. Awards under the Plan shall be subject to the Company’s clawback policy, as in effect from time to time.
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SECTION 21. | EFFECTIVE DATE OF PLAN |
This Plan shall become effective immediately prior to the Company’s Initial Public Offering, following stockholder approval of the Plan in accordance with applicable state law, the Company’s bylaws and certificate of incorporation, and applicable stock exchange rules or pursuant to written consent. No grants of Stock Options and other Awards may be made hereunder after the tenth anniversary of the Effective Date and no grants of Incentive Stock Options may be made hereunder after the tenth anniversary of the date the Plan is approved by the Board.
This Plan and all Awards and actions taken thereunder shall be governed by, and construed in accordance with, the laws of the State of Delaware, applied without regard to conflict of law principles.
