UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrantx ☒
Filed by a Party other than the Registrant¨
☐
Check the appropriate box:
Preliminary Proxy Statement |
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
Definitive Proxy Statement |
Definitive Additional Materials |
Soliciting Material Pursuant to §240.14a-12 |
Agenus Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
No fee required. |
Fee |
☐ | Fee computed on table in exhibit required by item 25(b) per Exchange Act Rules 14a-6(i)(1) |
AGENUS INC.
NOTICE OF ANNUALSPECIAL MEETING OF STOCKHOLDERS
Date | April 3, 2024 | |||
Time | 10:00 | |||
| ||||
| ||||
|
www.virtualshareholdermeeting.com/AGEN2024SM | |||
Proposals |
| To approve an amendment to our Amended and Restated Certificate of Incorporation, | ||
| ||||
2. |
| |||
| ||||
| ||||
Record Date | You are entitled to vote if you were a stockholder of record on |
A list of stockholders entitled to vote will be open for examination by any stockholder for any purpose germane to the 2016 AnnualSpecial Meeting of Stockholders for ten days before the meeting during ordinary business hours at our principal offices at 3 Forbes Road, Lexington, Massachusetts 02421.
It is important that your shares be represented at the 2016 Annual Meeting of Stockholders.Special Meeting. Therefore, whether or not you plan to attend the meeting virtually, please complete your proxy and return it to us. If you attend the meetingSpecial Meeting virtually and wish to vote in person,at the meeting, your proxy will not be used. You may also vote your shares over the internet or by telephone. Instructions for internet or telephonic voting are printed on your proxy card.
By order of the Board of Directors, |
|
April 28, 2016February , 2024
APPENDIX B AGENUS AMENDED AND RESTATED 2009 EQUITY INCENTIVE PLAN
AGENUS INC.
3 Forbes Road
Lexington, Massachusetts 02421
Telephone: (781) 674-4400
PROXY STATEMENT
APRIL 28, 2016For the Special Meeting of Stockholders
To be Held on April 3, 2024
ThisGeneral
The enclosed proxy statement contains information aboutis solicited by the 2016 Annual MeetingBoard of StockholdersDirectors (the “Board”) of Agenus Inc. (the “2016 Annual“Company,” “Agenus,” “we” or “us”), for use at the Special Meeting of the Company’s stockholders (the “Special Meeting”) to be held on April 3, 2024, at 10:00 A.M. Eastern Time and at any adjournments thereof. Whether or not you expect to attend the meeting, please vote your shares as promptly as possible to ensure that your vote is counted. The proxy materials will be furnished to stockholders on or about February , including2024.
Revocability of Proxy and Solicitation
Any stockholder executing a proxy that is solicited hereby has the power to revoke it prior to the Special Meeting. Revocation may be made by voting over the internet (with only your latest internet vote counted), voting by telephone (with only your latest telephonic vote counted), attending the Special Meeting and voting the shares of stock, or by delivering a later-dated, properly executed proxy in accordance with the instructions below. We have engaged Morrow Sodali LLC (“Morrow Sodali”) as the proxy solicitor for the Special Meeting. Some of our directors, officers and employees may also solicit proxies by telephone, e-mail, and in person.
Record Date
Stockholders of record at the close of business on February 9, 2024 (the “Record Date”) will be entitled to receive notice of, attend and vote at the meeting.
Action to be Taken Under Proxy
Unless otherwise directed by the giver of the proxy, the persons named in the form of proxy, namely, Garo Armen, our Chief Executive Officer, Robin Abrams, our Chief Legal Officer, and Christine Klaskin, our Vice President, Finance and Principal Financial and Accounting Officer, or any one of them who acts, will vote:
FOR approval of an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), to effect a reverse stock split of our issued and outstanding common stock at a ratio of 1-for-20 (Proposal No. 1—the “Proposal to Effect a Reverse Stock Split”).
Vote Required; Quorum; Broker Non-votes
As of the Record Date, there were 399,246,272 shares of common stock issued and outstanding, which constitutes all of the outstanding capital stock of the Company. Stockholders are entitled to one vote for each share of common stock held by them.
A majority of the outstanding shares, present in person by webcast or represented by proxy, will constitute a quorum at the meeting. Shares that are present that vote to abstain or do not vote on one or more of the matters to be voted upon are counted as present for establishing a quorum.
1
It is important that you provide voting instructions to your bank, broker or other nominee if you wish to determine the voting of your shares. Brokers holding shares of record for customers generally are entitled to use their discretion to vote on certain matters if they do not receive voting instructions from their customers. As used herein, “uninstructed shares” means shares held by a broker who has not received such instructions from its customers on a proposal. Under the rules of The Nasdaq Stock Market LLC and the New York Stock Exchange that govern how brokers may vote uninstructed shares, which generally govern this issue regardless of the exchange on which the company is listed, brokers are permitted to exercise discretionary voting authority only on “routine” matters. A “broker non-vote” occurs when nominees, such as banks and brokers holding shares on behalf of beneficial owners, do not receive voting instructions from the beneficial holders of such shares. We expect the Proposal to Effect a Reverse Stock Split to be considered a “routine” matter; therefore, if you do not provide voting instructions to your broker regarding this proposal, your broker will be permitted to exercise discretionary voting authority to vote your shares.
Assuming that a quorum is present, with respect to the Proposal to Effect a Reverse Stock Split, approval will require the affirmative vote of the majority of the votes cast at the Special Meeting, and abstentions and broker non-votes will have the same effect as a vote against this proposal. Banks, brokers and other nominees generally have discretionary authority to vote on the sole proposal; thus, we do not expect any broker non-votes.
Holders of common stock will not have any dissenters’ rights of appraisal in connection with any of the matters to be voted on at the meeting.
2
GENERAL INFORMATION ABOUT THESE PROXY MATERIALS AND VOTING
Why am I receiving these materials?
We have sent you these proxy materials because the Board is soliciting your proxy to vote at the Special Meeting of Stockholders.
According to our records, you were a stockholder of the Company as of the end of business on February 9, 2024.
You are invited to attend the Special Meeting to vote on the proposals described in this proxy statement and at any postponements or adjournments of the meeting.Special Meeting. In addition to the mailing of these materials, our directors, officers and employees may solicit proxies by telephone, e-mail, and in person, without additional compensation. Upon request, we will also reimburse brokerage houses and other custodians, nominees, and fiduciaries for their reasonable out-of-pocket expenses for distributing proxy materials to stockholders. You are invited to attend the Special Meeting and vote your shares. The 2016 AnnualSpecial Meeting will be a virtual meeting of stockholders, and will be held April 3, 2024 at Agenus Inc., 3 Forbes Road, Lexington, Massachusetts 0242110:00 A.M. Eastern Time via live webcast. For instructions on June 14, 2016how to access the live webcast and attend the virtual Special Meeting, see “How do I attend and vote shares at 5:00 P.M., Eastern Time.the virtual Special Meeting?” However, you do not need to attend the meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card.
In thisThe Company intends to mail these proxy statement, we refer to Agenus Inc. as “Agenus,” “us,” “we” or the “Company.”
This proxy statement and solicitation is being made on behalf of the Board of Directors of Agenus Inc.
In accordance with the “e-proxy” rules approved by the Securities and Exchange Commission (“SEC”) and in connection with the solicitation of proxies by our Board of Directors,materials on or about April 28, 2016 we first sent a NoticeFebruary , 2024 to all stockholders of Internet Availability of Proxy Materials and provided access to our proxy materials (consisting of this proxy statement, our Annual Reportrecord on Form 10-K for the year ended December 31, 2015 and a form of proxy) over the internet to each stockholderRecord Date entitled to vote at the 2016 AnnualSpecial Meeting. We intend to mail to requesting
What am I voting on?
The following matter is scheduled for a vote:
1. | To approve an amendment to the Certificate of Incorporation to effect a reverse stock split of our issued and outstanding common stock at a ratio of 1-for-20. |
The Board is not currently aware of any other business that will be brought before the Special Meeting.
Who can vote at the Special Meeting?
Only stockholders full setsat the close of our proxy materials (consisting of this proxy statement, our Annual Report onForm 10-K for the year ended December 31, 2015 and a form of proxy) on or about April 28, 2016.
Our Annual Report on Form 10-K for the year ended December 31, 2015 is also availablebusiness on the “Financial” sectionRecord Date will be entitled to vote at the Special Meeting. On this Record Date, there were 399,246,272 shares of our corporate websitecommon stock outstanding and entitled to vote.
Shareholder of Record: Shares Registered in Your Name
If on the Record Date, your shares were registered directly in your name with Agenus’s transfer agent, Equiniti Trust Company, LLC, then you are a shareholder of record. As a shareholder of record, you may vote in person by webcast at the meeting or vote by proxy. Whether or not you plan to attend the meeting, we urge you to fill out and return the enclosed proxy.
http://investor.agenusbio.com/sec-filingsBeneficial Owner: Shares Registered in the Name of a Broker or Bank and through
If your shares are held for you in an account at a broker, bank, or other nominee, you are considered the SEC’s EDGAR system athttp://www.sec.gov. To request a printed copybeneficial owner of our Annual Report onForm 10-K, which we will provideshares held in “street name.” You have the right to you without charge, writedirect your broker, bank, or nominee how to Investor Relations, Agenus Inc., 3 Forbes Road, Lexington, Massachusetts 02421. No material on our website is part of this proxy statement.
YOUR VOTE IS IMPORTANT. PLEASE TAKE THE TIME TO VOTE.Stockholders have a choice ofvote your shares by using the voting instruction card included in the mailing, or by following their instructions for voting over the internet or by telephone, by mail using atelephone.
3
How do I attend and vote shares at the virtual Special Meeting?
The Special Meeting will convene at 10:00 A.M. Eastern Time on April 3, 2024. In order to participate in the Special Meeting live via the Internet, you will need the 16-digit control number included in your notice regarding the availability of proxy materials, your proxy card or in person aton the 2016 Annual Meeting. Please referinstructions that accompanied your proxy materials. We encourage you to access the meeting prior to the start time. Online check-in will start 15 minutes before the meeting, and you should allow ample time for the check-in procedures. If your shares are held in a bank or brokerage account, instructions should also be provided on the voting instruction form provided by your bank or brokerage firm. If you lose your 16-digit control number, you may join the Special Meeting as a “Guest,” but you will not be able to vote, ask questions or access the list of stockholders as of the record date.
If you encounter any difficulties accessing the Special Meeting live audio webcast during the check-in or meeting time, please call the technical support number that will be posted on the Special Meeting log-in page.
Even if you plan to attend the live webcast of the Special Meeting, we encourage you to vote in advance by Internet, telephone or mail so that your vote will be counted even if you later decide not to attend the virtual Special Meeting.
How can I submit a question for the Special Meeting?
By accessing www.virtualshareholdermeeting.com/AGEN2024SM our stockholders will be able to submit questions in writing during the Special Meeting, vote, view the Special Meeting procedures, and obtain copies of proxy materials. Stockholders can submit questions in advance of the Special Meeting at www.proxyvote.com. Stockholders will need the 16-digit control number included in your notice regarding the availability of proxy materials, your proxy card or other votingon the instructions included with thesethat accompanied your proxy materials.
Can I view the proxy materials over the Internet?
Yes. The Notice of Meeting, this Proxy Statement and accompanying proxy card are available at www.virtualshareholdermeeting.com/AGEN2024SM.
How do I vote?
You may vote “For” or “Against” or abstain from voting. The procedures for information on the voting methods available to you.are simple: If you are a stockholder of record, you may vote overby proxy in any of the internet, by telephone, or in person at the 2016 Annual Meeting, you do not need to return your proxy card.following ways:
| ||
| ||
|
By Telephone—Dial 1-800-690-6903 using any touch-tone telephone and follow the instructions. Your shares will be voted according to your instructions.
By Mail—Complete and sign the enclosed proxy card and mail it in the enclosed postage prepaid envelope to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. The proxy card delivered by mail must be received on or prior to April 2, 2024. Your shares will be voted according to your instructions. If you do not specify how you want your shares voted, they will be voted as recommended by our Board.
At the Special Meeting. You may vote your shares at www.virtualshareholdermeeting.com/AGEN2024SM during the Special Meeting. You will need the 16-digit control number that is on either the notice or the proxy card when voting. Additional instructions regarding voting will be provided on the Special Meeting website.
If you vote via the internet or by telephone, your vote must be received by 11:59 p.m., Eastern Time, on April 2, 2024 for shares held directly and by 11:59 p.m., Eastern Time, on March 31, 2024 for shares held in a company stock plan. You may also vote during the Special Meeting via the internet at www.virtualshareholdermeeting.com/AGEN2024SM. At this site, you will be able to vote electronically. If your shares are held for you in an account by a broker, bank or other nominee, you are considered the beneficial owner of shares held in “street name.” You have the right to direct your broker, bank, or nominee how to vote your shares by using the voting instruction card included in the mailing, or by following their instructions for voting over the internet or by telephone. How many votes do I have? On each matter to be voted upon, you have one vote for each share of common stock you own as of the Record Date. What is a quorum for purposes of conducting the Special Meeting? The presence, via attendance at the virtual Special Meeting or by proxy, of the holders of a majority of the issued and outstanding common stock, or shares, entitled to vote at the meeting is necessary to constitute a quorum to transact business. If a quorum is not present or represented at the Special Meeting, the stockholders entitled to vote thereat, present in person via attendance at the virtual Special Meeting or by proxy, may adjourn the Special Meeting from time to time. What if I return a proxy card but do not make specific choices? If you return a signed and dated proxy card without marking any voting selections, your shares will be voted “FOR” approval of the Proposal to Effect a Reverse Stock Split, and if any other matter is properly presented at the meeting, the persons named in the accompanying proxy card should vote, or otherwise act, in accordance with their judgment.
| ||
| ||
|
| ||
| ||
How does the Board |
| |
|
PROPOSAL 1—ELECTION OF DIRECTORS
The Board of Directors has nominated the individuals listed below for election as Class I directors. Each nominee currently serves as a Class I director.
Our Board of Directors (the “Board”) is divided into three classes. One class is elected each year and members of each class hold office for three-year terms. The Board currently consists of six members. Two members are Class I directors, with terms expiring atrecommends that you vote your shares “FOR” the 2016 Annual Meeting. Two members are Class II directors, with terms expiring at the 2017 Annual Meeting of Stockholders. Two members are Class III directors, with terms expiring at the 2018 Annual Meeting of Stockholders. The Board has nominated Brian Corvese and Timothy R. Wright, each of whom is a current Class I director, for re-election to a term expiring at the 2019 Annual Meeting of Stockholders.
For more information on nomination of directors, see “Corporate Governance and Nominating Committee” below in the section entitled “Our Corporate Governance—Committeesapproval of the Board.”
YourProposal to Effect a Reverse Stock Split. Unless you provide other instructions on your proxy card, the persons named as proxy holders on the proxy card will vote is requested in favor of Brian Corvese and Timothy R. Wright,accordance with the nominees listed below, as Class I directors. The nominees have indicated their willingness to serve, if elected, but if they should be unable or unwilling to serve, proxies may be voted for substitute nominees designated by the Board.
There are no family relationships between or among any of our executive officers, directors, or nominees for directors.
Below are the names and certain information about each memberrecommendations of the Board includingas set forth in this Proxy Statement.
Who is paying for this proxy solicitation?
We are soliciting this proxy on behalf of our Board and will pay all expenses associated therewith. We have engaged Morrow Sodali LLC as the proxy solicitor for the Special Meeting for a base fee of $12,000 plus fees for additional services, if needed. We have also agreed to reimburse Morrow Sodali for its reasonable out of pocket expenses. Some of our officers and other employees also may, but without compensation other than their regular compensation, solicit proxies by further mailing or personal conversations, or by telephone, facsimile or other electronic means.
We will also, upon request, reimburse brokers and other persons holding stock in their names, or in the names of nominees, for election as Class I directors:
their reasonable NOMINEES FOR CLASS I DIRECTORS—TERMS TO EXPIRE IN 2016out-of-pocket expenses for forwarding proxy materials to the beneficial owners of the capital stock and to obtain proxies.
|
5
If you have questions about the proposals or if you need additional copies of the proxy statement or the enclosed proxy card you should contact:
|
333 Ludlow Street, 5th Floor, South Tower
Stamford, Connecticut 09602
Tel: (800) CLASS II DIRECTORS—TERMS TO EXPIRE IN 2017662-5200 or banks and brokers can call collect at (203) 658-9400
What does it mean if I receive more than one set of proxy materials?
If you receive more than one set of proxy materials, your shares may be registered in more than one name or in different accounts. Please complete, sign and return each proxy card to ensure that all of your shares are voted.
I share the same address with another Agenus Inc. stockholder. Why has our household only received one set of proxy materials?
Some banks, brokers, and other nominee record holders may be participating in the practice of “householding” proxy statements. This means that only one copy of our proxy statement or annual report may have been sent to multiple stockholders in your household. We will promptly provide a separate copy of either document to you if you contact Investor Relations at Agenus Inc., 3 Forbes Road, Lexington, Massachusetts 02421, or telephone or e-mail Investor Relations at 781-674-4400 or investor@agenusbio.com. If you want to receive separate copies of proxy statements in the future or if you are receiving multiple copies and would like to receive only one printed copy for your household, you should contact your bank, broker or other nominee record holders, or you may contact us.
Can I change my vote after submitting my proxy?
Yes. You can revoke your proxy at any time before the final vote at the meeting. If you are the record holder of your shares, you may revoke your proxy in any one of three ways:
|
You may submit another properly executed proxy card with a later date;
|
CLASS III DIRECTORS—TERMS TO EXPIRE IN 2018
| ||
|
Vote Required
The two nominees for director receivingYou may authorize a proxy again by Internet or telephone at a later time before the highest numberclosing of votes FOR electionthose voting facilities; or
You may attend the Special Meeting and vote online. Simply attending the meeting virtually will be elected as directors. This is called a plurality. Abstentions and “broker non-votes” are not, counted for purposes of electing directors. by itself, revoke your proxy.
If your shares are held by your broker, bank, or other nominee in “street name” and ifor agent, you do not vote your shares or instructshould follow the instructions provided by your broker bank, or nominee how to vote with respect to this item, your unvoted sharesbank.
How are votes counted?
Votes will be counted by the inspector of elections appointed for the meeting, who will separately count “For” and “Against” votes, abstentions and broker non-votes. Abstentions and broker non-votes will have the same effect as “broker non-votes.” You mayvotes against the Proposal to Effect a Reverse Stock Split. We expect the Proposal to Effect a Reverse Stock Split to be considered a “routine” matter, so banks, brokers and other nominees will have discretionary authority to vote FOR allon this proposal; thus, we do not expect any broker non-votes on this proposal.
How many votes are needed to approve each proposal?
For approval of the nominees, WITHHOLD yourProposal to Effect a Reverse Stock Split, the affirmative vote from all of the nominees or WITHHOLD your vote from any onemajority of the nominees. Votesshares of common stock cast at the Special Meeting is required for approval.
6
Is my vote kept confidential?
Proxy instructions, ballots and voting tabulations that identify individual stockholders are withheldhandled in a manner that protects your voting privacy.
Your vote will not be included indisclosed either within the vote tallyCompany or to third parties, except:
as necessary to meet applicable legal requirements;
to allow for the electiontabulation and certification of directorsvotes; and will have no effect on
to facilitate a successful proxy solicitation.
How can I find out the results of the vote.voting at the Special Meeting?
The Board of Directors recommendsPreliminary voting results will be announced at the Special Meeting. Final voting results will be discussed in a vote FOR each ofForm 8-K filed after the nominees for Director.Special Meeting.
Who can help answer my questions?
If you need assistance with voting or have questions regarding the Special Meeting, please contact:
Morrow Sodali LLC
333 Ludlow Street, 5th Floor, South Tower
Stamford, Connecticut 09602
Tel: (800) 662-5200 or banks and brokers can call collect at (203) 658-9400
7
OWNERSHIP OF OUR CORPORATE GOVERNANCECOMMON STOCK
Our Commitment to Good Corporate GovernanceOwnership By Management
We believe that good corporate governanceOn February 9, 2024, Agenus had 399,246,272 shares of common stock issued and an environmentoutstanding. The table below shows certain information about the beneficial ownership of high ethical standards are important for Agenus to achieve business success and to create value for our stockholders. Our Board is committed to high governance standards and to continually working to improve them. We continue to review our corporate governance practices in lightcommon stock, as of ongoing changes in applicable law and evolving best practices.February 9, 2024, by:
Role of Our Board
Our Board monitors our overall corporate performance, the integrity of our financial controls, risk management and legal compliance procedures. It appoints senior management and oversees succession planning and senior management’s performance and compensation. The Board also oversees our short- and long-term strategic and business planning, and reviews with management its business plan, financing plans, budget, and other key financial and business objectives.
Members of the Board keep informed about our business through discussions with our Chief Executive Officer and other members of our senior management team, by reviewing materials provided to them by the Company on a regular basis and in preparation for Board and committee meetings, and by participating in meetings of the Board and its committees. We regularly review key portions of our business with the Board. These practices afford the Board members the opportunity to actively participate in risk management assessment and raise questions and engage in discussions with management regarding areas of potential risk. The Audit and Finance Committee of the Board reviews the risk management practices of the Company and both the Corporate Governance and Nominating Committee and the Audit and Finance Committee receive an annual report from the Company’s Chief Compliance Officer outlining areas of compliance focus and proposed recommendations. Additionally, the Compensation Committee reviews the Company’s executive compensation program and the incentives created by the executive compensation program, to assess whether our compensation arrangements encourage excessive risk taking by our executives.
We introduce our executives and other employees to the Board so that the Board can become familiar with our key talent. Timothy R. Wright, our Lead Director, introduces each new Board member to our Corporate Governance policies and their responsibilities to the Company as a director. Each Board member receives a Board of Directors handbook that provides the director with a summary of these practices and policies.
In 2015, the Board met ten times and acted by written consent twice. During 2015, each of our directors, attended at least 75% of (i) the total number of meetings of the Board held during the period during which the director served and (ii) all meetings of committees of the Board on which the director served during the periods the director served. In 2015, all of our Board members attended our 2015 Annual Meeting of Stockholders. We expect each of our Board members to attend the 2016 Annual Meeting.
Governance Guidelines
The Board is guided by our Guidelines on Significant Corporate Governance Issues (our “Governance Guidelines”). We believe our Governance Guidelines demonstrate our continuing commitment to good corporate governance. The Board reviews our Governance Guidelines from time to time, as needed, and at least once annually. Our Governance Guidelines are posted on the corporate governance section of our website athttp://investor.agenusbio.com/corporate-governance. No material on our website is part of this proxy statement.
Performance of Our Board
We consider it important to continually evaluate and improve the effectiveness of the Board, its committees and its individual members. We do this in various ways. Each year, the Lead Director surveys the Board members to assess the effectiveness of the Board and its committees. Using these surveys, the Lead Director
assesses the Board’s performance and the performance of individual members, and reports his conclusions to the full Board. The assessment also evaluates the Board’s effectiveness in reviewing executive management, conducting appropriate oversight and adding value to Agenus. Each of the Board’s standing committees also conducts annual self-evaluations.
At each Board meeting, each Board member has the opportunity to assess the effectiveness of the materials presented and the conduct of the meeting, and to offer suggestions for improvement at future meetings.
Code of Business Conduct and Ethics
The Board originally adopted our Code of Business Conduct and Ethics (the “Code of Ethics”) in 2003. The Board reviewed, revised, and updated the Code of Ethics most recently in December 2015. The Code of Ethics applies to all members of the Board and all employees of Agenus, including our Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer. Among other matters, our Code of Ethics prohibits the members of the Board and all employees of Agenus from buying or selling our securities while in possession of material, non-public information about the Company. Our Code of Ethics is posted on the corporate governance section of our website athttp://investor.agenusbio.com/corporate-governance. No material on our website is part of this proxy statement. We intend to post on our website all disclosures that are required by law or NASDAQ listing rules concerning any amendments to, or waivers from, our Code of Ethics. Stockholders may request a free copy of our Code of Ethics by writing to Investor Relations, Agenus Inc., 3 Forbes Road, Lexington, MA 02421.
Independence of Directors
Our Governance Guidelines and NASDAQ listing rules provide that a majority of the Board should be composed of independent directors. The Corporate Governance and Nominating Committee annually reviews the independence of the directors and reports to the Board which directors it recommends that the Board determine are independent. The Board then makes the final determination. The Board takes into account NASDAQ listing rules, applicable laws and regulations, and other factors in making its determinations including potential conflicts of interest, transactions, and other relationships that would reasonably be expected to compromise a director’s independence. The Board has determined that Mr. Corvese, Mr. Jordan, Dr. Malik, Ms. Sharp, and Mr. Wright are currently independent directors. Dr. Armen is currently not an independent director because he is employed as our Chief Executive Officer. In making independence determinations with regard to other directors, the Board considered transactions between us and a director or a director’s affiliates and any positions a director holds with entities with commercial relationships with us.
Executive Sessions of Independent Directors
Our independent directors typically meet in executive session without management present immediately prior to regularly scheduled Board meetings and at least quarterly. Four such meetings were held during 2015.
Leadership Structure of the Board
Mr. Wright, an independent director, serves as the Lead Director of the Board and as Chair of the Corporate Governance and Nominating Committee. Mr. Wright also serves on the Compensation Committee, the Audit and Finance Committee and the Business & Development Advisory Committee. In addition to the duties of all directors, the specific responsibilities of the Lead Director include: (i) acting as chair of the Corporate Governance and Nominating Committee; (ii) developing the agenda for and presiding over all executive sessions of the independent directors; (iii) acting as principal liaison between the independent directors and the Chief Executive Officer on sensitive issues and raising at any meeting of the Board items that are not appropriately or best put forward by the Chief Executive Officer; and (iv) communicating to the Chief Executive Officer the independent directors’ annual evaluation of the Chief Executive Officer. The Company’s Chief Executive Officer
serves as the Chairman of the Board. We believe that the Company’s Chief Executive Officer is best situated to serve as Chairman because he is the director most familiar with the Company’s business, and most capable of effectively identifying strategic priorities and leading the discussion and execution of our Company’s strategy. Our independent directors and management have different perspectives and roles in strategy development. The Company’s independent directors bring experience, oversight, and expertise from outside the Company and from inside and outside the Company’s industry, while the Chief Executive Officer brings Company-specific experience and expertise. To assure effective independent oversight, the Company has adopted a number of governance practices, including:
a strong, independent, clearly-defined Lead Director role (as described above);
each of our named executive sessions of the independent directors held prior to quarterly board meetings;officers, and
an annual performance evaluation of the Chairman/Chief Executive Officer by the independent directors.
While there may be circumstances in the future that would lead the Company to separate the offices of Chairman and Chief Executive Officer, we do not believe this is currently necessary due to the nature and size of the operations of the Company, the overall independence of the Board from management, and the strength of the Lead Director’s role on the Board.
Committees of the Board
The Board currently has five standing committees: the Audit and Finance Committee, the Compensation Committee, the Corporate Governance and Nominating Committee, the Business & Development Advisory Committee, and the Non-Executive Equity Award Committee. The Board also appoints from time to time ad hoc committees to address specific matters.
Audit and Finance Committee
|
The Audit and Finance Committee consists entirely of independent directors within the meaning of the NASDAQ listing rules and the requirements contemplated by Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “1934 Act”). The Board has determined that Mr. Corvese, Chair of the Committee, and Dr. Malik each qualify as audit committee financial experts. For a description of Mr. Corvese and Dr. Malik’s relevant experiences that qualify them as audit committee financial experts, please see their biographies on page 7 and page 9, respectively. During 2015, the Audit and Finance Committee consisted of Mr. Corvese (Chair), Dr. Malik, Mr. Wright and Tom Dechaene. Mr. Dechaene retired from the Board on December 31, 2015, and Dr. Malik joined the Audit and Finance Committee on June 25, 2015. The Audit and Finance Committee’s primary function is to assist the Board in monitoring the integrity of our consolidated financial statements and our system of internal control. The Audit and Finance Committee has direct responsibility for the appointment, independence, and monitoring of the performance of our independent registered public accounting firm. The committee is responsible for pre-approving any engagements of our independent registered public accounting firm. The committee also reviews our risk management practices, strategic tax planning, preparation of quarterly and annual financial reports, and compliance processes.
The Audit and Finance Committee members meet regularly with our independent registered public accounting firm, without management present and with members of management in separate private sessions, to discuss any matters that the committee or these individuals believe should be discussed privately with the
committee, including any significant issues or disagreements concerning our accounting practices or consolidated financial statements. The committee also reviews the Code of Ethics annually, and periodically meets with our Chief Compliance Officer. The committee conducts a meeting each quarter to review our consolidated financial statements prior to the public release of earnings. The committee has the authority to engage special legal, accounting or other consultants to advise the committee. The committee also has the authority to delegate to subcommittees any responsibilities of the full committee. The Audit and Finance Committee charter is posted on the corporate governance section of our website athttp://investor.agenusbio.com/corporate-governance. No material on our website is part of this proxy statement. Please also see the Report of the Audit and Finance Committee on page 69.
Compensation Committee
|
The Compensation Committee consists entirely of independent directors within the meaning of applicable NASDAQ listing rules. During the entirety of 2015, Mr. Jordan (Chair), Mr. Corvese and Mr. Wright were members of the Compensation Committee. The committee’s primary responsibilities are to address our executive officers’ and other key employees’ development, retention, and performance and to oversee compensation and benefit matters. It reviews and approves compensation policies for Agenus to ensure that our compensation strategy supports organizational objectives and stockholder interests and does not create incentives for inappropriate risk-taking. The committee determines the compensation of the Chief Executive Officer, and reviews and approves the compensation of all other executive officers and certain other key employees. It also reviews and recommends compensation for members of the Board. Additionally, the committee approves and recommends, and suggests material changes to, any employee incentive compensation or retirement plans and any director compensation plans.
The Compensation Committee considers appropriate companies for compensation comparison purposes and retained an outside compensation consultant in 2015, Independent Stock Plan Advisors, LLC (“ISP”), and in 2016, Radford, an Aon Hewitt Company—a division of Aon Corporation (“Radford”), to provide market reference information for compensation and benefits. The committee has the authority to retain special legal, accounting, or other consultants to advise the committee. The committee also has the authority to delegate to subcommittees any responsibilities of the full committee. The Compensation Committee charter is posted on the corporate governance section of our website athttp://investor.agenusbio.com/corporate-governance. No material on our website is part of this proxy statement. Please also see the Compensation Discussion and Analysis starting on page 17, and the accompanying Compensation Committee Report on page 32. ISP did, and Radford does, not provide any services to the Company or the Compensation Committee other than those described above. After consideration of the six independence assessment factors provided under the listing rules of NASDAQ, the Compensation Committee determined that ISP, as advisor to the Compensation Committee during 2015, was independent and that the work performed by ISP did not raise any conflicts of interest in 2015 that would preclude the Compensation Committee from reviewing and considering ISP’s analyses when making compensation decisions. The Compensation Committee performed the same analysis with respect to Radford and reached the same conclusion.
Corporate Governance and Nominating Committee
|
The Corporate Governance and Nominating Committee consists entirely of independent directors within the meaning of applicable NASDAQ listing rules. During 2015, the Corporate Governance and Nominating Committee consisted of Mr. Wright (Chair), Ms. Sharp and Mr. Dechaene. Mr. Dechaene retired from the Board on December 31, 2015, and Ms. Sharp joined the Corporate Governance and Nominating Committee on June 25, 2015. The Corporate Governance and Nominating Committee is responsible for recommending to the Board policies relating to the conduct of Board affairs, the process for annual evaluation of the Board and the Chief Executive Officer, issues of corporate public responsibility, and overseeing the Company’s management succession planning process. It periodically evaluates the composition of the Board, the contributions of individual directors, and the Board’s effectiveness as a whole. The committee reviews the Company’s ethics and compliance activities under the Code of Ethics and meets periodically with our Chief Compliance Officer, including meeting, as needed, for separate private sessions with the Chief Compliance Officer without other members of management present.
The Corporate Governance and Nominating Committee recommends to our full Board individuals to serve as directors. The committee recommends to the Board guidelines and criteria for Board membership and reviews with the Board, on a periodic basis, the appropriate skills and characteristics required of Board members in the context of the then current needs of Agenus. The committee is responsible for reviewing with the Board the appropriate personal characteristics and professional competencies preferred of Board members, who are expected to work together as a team to properly oversee our strategies and operations. In general, all directors are expected to possess certain personal characteristics necessary to create a highly functional and collegial Board, which include personal and professional integrity, practical wisdom and mature judgment, an inquisitive and objective perspective, and time availability for performing the duties of a director.
The Board, as a group, is expected to encompass a range of talents, ages, skills, diversity, and expertise sufficient to provide sound and prudent guidance with respect to the operations and interests of our business. Examples of desired professional competencies include accounting and financial literacy, industry knowledge, medical or scientific knowledge, and management experience. When evaluating potential new Board appointments, the Corporate Governance and Nominating Committee considers these factors, but does not have any fixed criteria for candidates it recommends because the Board believes that a flexible evaluation process allows the committee to make sound judgments based on the needs of the organization and specific attributes of each candidate without a need for a formal policy on diversity. Candidates should also be enthusiastic about service on our Board and working collaboratively with existing Board members to create value for all of our stockholders.
The Corporate Governancedirectors and Nominating Committee does not have a formal policy with regard to the consideration of director candidates recommended by stockholders because it does not believe such a policy is necessary given that no unaffiliated stockholder has ever recommended a director candidate. When considering director candidates, the Corporate Governance and Nominating Committee, in consultation with the Chief Executive Officer and full Board, considers the current strengths on the existing Board, the current needs of the organization, and anticipated future activities and requirements of both the Board and the organizationexecutive officers as a whole. Historically, director candidatesgroup.
In accordance with U.S. Securities and Exchange Commission (“SEC”) rules, we have been generally identified primarilyincluded in the column “Number of Issued Shares” all shares of common stock over which the person has sole or shared voting or investment power as of February 9, 2024, and we have included in the column “Number of Shares Issuable” all shares of common stock that the person has the right to acquire within 60 days after February 9, 2024 through referrals and the executive network poolexercise of any stock options, the Board and senior executives. Ifvesting of restricted shares, or in the committee werecase of directors, any shares to receivebe distributed under the Directors’ Deferred Compensation Plan (“DDCP”). All shares that a recommendationperson has a right to acquire within 60 days of February 9, 2024 are deemed outstanding for a director candidate from a stockholder, the committee expects that it would evaluate such a candidate usingpurpose of computing the criteria described above. The committee will consider a recommendation only if appropriate biographical information and background material is provided on a timely basis, accompanied by a statement as to whether the stockholder or group of stockholders making the recommendation haspercentage beneficially owned more than 5%by the person, but are not deemed outstanding for the purpose of our
Unless otherwise indicated, each person has the sole power (or shares the power with a spouse) to invest and vote the shares of common stock for at least one yearlisted opposite the person’s name. Where applicable, ownership is subject to community property laws. Our inclusion of shares in this table as beneficially owned is not an admission of beneficial ownership of those shares by the date thatperson listed in the recommendationtable. Except as noted, the address of each stockholder is made. To submit a recommendation for a nomination, a stockholder may write to the Lead Director,c/o Agenus Inc., 3 Forbes Road, Lexington, Massachusetts 02421, Attention: Lead Director c/o Chief Compliance Officer.
In addition, our by-laws permit stockholders to nominate individuals, without any action or recommendation by the committee or the Board, for election as directors at an annual meeting of stockholders. For a description of this by-law provision, see Additional Information on page 70 of this proxy statement. The charter of the Corporate Governance and Nominating Committee is posted on the corporate governance section of our website athttp://investor.agenusbio.com/corporate-governance. No material on our website is part of this proxy statement.
Communications with the Board
You may contact the Board or any committee of the Board by writing to Board of Directors (or specified committee), Agenus Inc., 3 Forbes Road, Lexington, Massachusetts 02421, Attn: Lead Director c/o Chief Compliance Officer. You should indicate on your correspondence that you are an Agenus stockholder. Communications will be distributed to the Lead Director, the appropriate committee chairman, or other members of the Board or executive management, as appropriate, depending on the facts and circumstances stated in the communication received. Executive management will generally determine the proper response to inquiries of a commercial nature, which generally will not be forwarded to the Lead Director. Inquiries regarding accounting, internal controls over financial reporting, or auditing matters will be forwarded to the Chair of the Audit and Finance Committee, and inquiries involving matters governed by the Code of Ethics will be forwarded to the Chair of the Corporate Governance and Nominating Committee and the Chief Compliance Officer.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee for the year ended December 31, 2015 were Mr. Jordan (Chair), Mr. Corvese, and Mr. Wright. No member of the Compensation Committee was at any time during 2015, or formerly, an officer or employee of Agenus or any subsidiary of Agenus. No executive officer of Agenus has served as a director or member of a compensation committee (or other committee serving an equivalent function) of any other entity while an executive officer of that other entity served as a director of Agenus or member of our Compensation Committee.
COMPENSATION DISCUSSION AND ANALYSIS
This section discusses the principles underlying our policies and decisions with respect to the compensation of our executive officers who are named in the “Summary Compensation Table” below, who are referred to throughout this proxy statement as our “named executive officers,” and the material factors relevant to an analysis of these policies and decisions. Our named executive officers for 2015 are:02421.
Dr. Garo H. Armen—Chairman and Chief Executive Officer
|
|
Ozer Baysal—Chief Business Officer
Dr. Robert B. Stein—President, Research & Development
Karen H. Valentine—Chief Legal Officer and General Counsel
Executive Summary
Our compensation program is designed to attract and retain the highest caliber talent, reward strong performance and align incentives with the creation of long-term stockholder value, taking into consideration the Company’s resource constraints. The short-term compensation of our named executive officers is positioned at approximately the 50thpercentile of our compensation peer group, and our long-term incentive programs are designed to preserve our cash resources, promote long-term decision-making and align reward with stock price appreciation.
Our performance in 2015 exceeded our annual goals in the aggregate, despite challenging circumstances, including limited financial and human resources, aggressive timelines and third party competition. As more specifically described below, during 2015 we:
filed investigational new drug applications (“INDs”) for antibody candidates targeting GITR (in Incyte’s name) and CTLA-4 and advanced additional antibody candidates targeting OX40 and PD-1;
broadened our asset and technology foundation and secured our own antibody manufacturing capabilities by executing a number of strategic acquisitions;
consummated a global alliance with Incyte Corporation (“Incyte”) and later expanded it with the addition of three new targets;
extended our alliance with Merck Sharpe & Dohme (“Merck”);
significantly improved our balance sheet by raising approximately $235 million in cash, including a $100 million royalty bond financing relating to QS-21; and
continued to build our team and expand our internal capabilities by recruiting top tier talent across the broad spectrum of our business.
We believe that our incentive programs were administered in a manner consistent with our operating performance, long-term objectives, and compensation philosophy. Given the Company’s overall performance in 2015, the annual cash bonuses awarded to our named executive officers for 2015 performance ranged from 111% to 170% of their targets, and the remaining one-third of the performance-vesting stock options granted to our named executive officers in 2013 and one-half of the performance-vesting stock options granted to our named executive officers in 2015 vested during 2015 based on the achievement of pre-established milestones relating to our market capitalization.
Compensation Philosophy
Our executive compensation program is designed to attract and retain the highest caliber executives and reward and align incentives with the creation of long-term stockholder value, while effectively managing the risks and challenges inherent to a biotechnology company of our size and stage of development. We offer a compensation package that combines short- and long-term components, cash and equity, and fixed and contingent payments, in the proportions we believe appropriately incent and reward our executives to achieve the following goals:
create long-term stockholder value;
build a creative and high performing team whose participants understand and share our business objectives and ethical and cultural values and retain these key team members;
demonstrate leadership and innovation in the identification, development, and commercialization of product candidates that fit our strategic objectives;
effectively manage the multiple dimensions of our business, from research and development, through clinical trials, manufacturing, strategic alliances, and in all aspects of our operations in order to maximize the value of each dollar deployed; and
identify and address our short- and long-term financing requirements in a highly strategic and creative manner, and deploy available funds for the maximum benefit to our stockholders.
Our general philosophy is to emphasize equity over cash compensation and long-term over short-term compensation. Our executive compensation program not only aims to be competitive in our industry, but also to be fair relative to other professionals within our organization. Our executives’ base salary, target annual bonus levels, and target annual long-term incentive award values are set at levels that are competitive with our peers. Executives have the opportunity to earn above-market pay for above-market performance as measured against our peer group of companies (see “Competitive Market Review” for further information on our peer group).
We continually review our executive compensation program in order to ensure that it rewards executives for achieving our goals and objectives in a manner consistent with our company’s philosophy and values and our peer group. In designing our compensation package we also seek to reward executive decisions that align the Company’s goals and objectives with delivering positive stockholder returns. We evaluate and reward our executives based on the Company’s performance, their contribution to the achievement of short- and long-term goals and objectives, and their ability to take advantage of unique opportunities and overcome difficult challenges within our business. We believe that our mix of short-term and long-term incentives, and our evaluation of performance results, assist us in managing any risk taking that may result from our compensation program and aligning our employees’ behavior with our overall business plan and the interests of our stockholders. Our Compensation Committee has concluded that our current compensation programs present no risk that is reasonably likely to have a material adverse effect on the Company.
At the Company’s 2014 Annual Meeting of Stockholders, our stockholders had the opportunity to cast an advisory vote (a “say-on-pay” proposal) on the compensation of our executive officers as disclosed in our proxy statement for that meeting. Stockholders approved the say-on-pay proposal by the affirmative vote of 96.2% of the votes cast on that proposal. The Compensation Committee believes this affirms stockholders’ support of the Company’s approach to executive compensation, and this approach has not changed since the 2014 Annual Meeting of Stockholders. Our Compensation Committee will continue to consider the outcome of the Company’s say-on-pay votes when making future compensation decisions for our named executive officers. At our 2011 Annual Meeting of Stockholders, our stockholders also had the opportunity to cast an advisory vote (a “say-on-frequency” proposal) on how often the Company should include a say-on-pay proposal in its proxy statements for future annual meetings. Our stockholders approved a proposal to hold say-on-pay votes every three years. Accordingly, our Board adopted the policy to hold say-on-pay votes every three years until the next required “say-on-frequency” advisory vote, and therefore, our stockholders will have the opportunity to vote on both “say-on-pay” and “say-on-frequency” proposals next year at our 2017 Annual Meeting of Stockholders.
Competitive Market Review
The market for top tier executive talent in the biotechnology industry is highly competitive. In order to attract and retain a superior leadership team we need to draw upon a pool of talent that is highly sought after by both large and established pharmaceutical and biotechnology companies in and outside our geographic area and by other life science companies.
We believe we have a competitive advantage in our ability to offer significant upside potential through stock options and other equity-based awards. In addition, we offer market cash compensation levels through competitive base salaries and cash bonus opportunities. We also compete on the basis of our vision of future success, our culture and values, the cohesiveness and productivity of our teams, and the excellence of our scientists and management personnel.
In order to succeed in attracting highly talented executives, we continuously monitor market trends and draw upon surveys prepared by the Radford Surveys division of AON Hewitt, custom research developed by our compensation consultants, ISP for 2015 and Radford for 2016, and other nationally recognized surveys. Our Compensation Committee reviews data that analyzes various cross-sections of our industry as well as relevant geographical areas.
Market References: How We Define Market and How We Use Market Compensation Data. Our Compensation Committee has engaged ISP and Radford as independent compensation consultants to evaluate our total compensation program and compare it to levels in the market.
Defining the Market. For 2015, we used two market references to compare our total compensation practices and levels to those in the market:
ArQule, Inc.
Array BioPharma Inc.
AVEO Pharmaceuticals, Inc.
BioCryst Pharmaceuticals, Inc.
Cell Therapeutics, Inc.
Curis, Inc.
Cytokinetics, Incorporated
GTx, Inc.
Idera Pharmaceuticals, Inc.
Immunomedics, Inc.
Infinity Pharmaceuticals, Inc.
Omeros Incorporated
Pain Therapeutics, Inc.
Peregrine Pharmaceuticals, Inc.
Sunesis Pharmaceuticals, Inc.
Synta Pharmaceuticals Corp.
Trubion Pharmaceuticals, Inc.
Vical, Inc.
ZIOPHARM Oncology, Inc.
Determining Market Levels and Specific Comparisons. We compare our practices and amounts of compensation against our peer group by each compensation component, by total annual compensation (including target annual incentive opportunity) and by total compensation including equity compensation components. The competitive comparisons made in this process are used to determine our approximate position relative to the appropriate market reference by compensation component and in total.
Total Compensation
We intend to continue our strategy of compensating our named executive officers at competitive levels, with the opportunity to earn above-market pay for above-market performance. We will continue to emphasize long-term equity incentives and performance-based incentive compensation delivered in the form of equity-based awards to maintain our competitive pay philosophy.
For 2015, the total compensation paid to the named executive officers generally fell between the 50th and 60th percentile of total compensation paid to executives holding equivalent positions in our peer group of companies. Total compensation includes annual base salary, target cash bonus and grant date value of equity awards. We believe that the total compensation paid to our named executive officers was reasonable in the aggregate given our corporate performance and our financial circumstances.
The competitive posture of our total annual compensation versus the market references will vary year to year based on Company and individual performance, as well as the performance of the peer group companies and their respective level of annual performance bonus awards made to their executives. We expect to continue targeting total compensation at approximately the 50th percentile, with an emphasis on performance-based variable compensation. Further, in light of our compensation philosophy, we believe that the total compensation package for our executives should continue to consist of base salary, annual incentive awards (bonus), long-term equity-based incentive compensation, and certain other benefits.
Role of Our Compensation Committee
Our Compensation Committee approves, administers, and interprets our executive compensation and benefit policies, including awards that have been made to executives under our 1999 Equity Incentive Plan (as amended) and under our 2009 Equity Incentive Plan, as amended to date (the “2009 Equity Incentive Plan”). Our Compensation Committee is appointed by our Board, and consists entirely of directors who are “outside directors” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and “non-employee directors” for purposes of Rule 16b-3 under the 1934 Act. Our Compensation Committee is comprised of Mr. Jordan (Chair), Mr. Corvese and Mr. Wright.
Our Compensation Committee ensures that our executive compensation program is consistent with our compensation philosophy and our Governance Guidelines (described above), and determines the executive compensation packages offered to our officers.
Executive Compensation Program
Components of our Compensation Program
Our compensation program consists of the following four components (each described in more detail below):
Short-term compensation (including base salary and annual incentive bonuses);
Long-term incentives;
Benefits; and
Severance compensation and termination protection.
To determine levels of overall executive compensation, the Compensation Committee balances individual, functional area, and company-wide goals and achievements. For purposes of setting the annual goals under our annual bonus program, each executive participates in establishing the objectives of our Company as a whole and offers his or her views as to the goals of each other’s functional area, insofar as those goals impact the individual executive’s own functional area. After the end of the relevant fiscal year, we also ask our executives to provide feedback not only on their own performance and that of their particular area, but also of other functional areas and our entire organization. We see this process both as the optimal means of assembling accurate information regarding the expectation and realization of performance, as well as an integral part of our culture of collaborative, team-oriented management. Final goals and objectives for our annual bonus program are approved by the Board.
In 2015, our Company goals included:
File INDs for two or more checkpoint modulaters (“CPMs”);
Advance IND enabling studies for two or more additional CPMs sufficient to file INDs in 2016;
Finalize registration strategy for Prophage in newly diagnosed glioblastoma multiforme (“ndGBM”);
Consummate a global alliance for our CPMs and extend our Merck alliance;
Expand, strengthen and optimize our antibody discovery engine through strategic acquisitions and in-licenses;
Raise funds required to aggressively advance our strategic initiatives and key programs, including monetizing non-core assets; and
Close key capability gaps and continue to grow the organization with world class talent.
At the end of each year, we and our Compensation Committee evaluate the achievement of Company goals and objectives, along with individual executive performance, and begin discussions regarding goals and objectives for the next fiscal year. Incentive compensation, based on the achievement of goals and objectives, may be awarded in the form of an annual cash bonus and equity-based awards. Equity-based awards are used to align the interests of our executives with those of our stockholders and to promote a long-term performance perspective and progress toward achieving our long-term strategy.
Our senior executives’ total compensation may vary year to year based on Company and individual performance. Further, the value to our senior executives of equity awards will vary based on our stock price performance. The general structure of our compensation programs for executive officers is consistent with that of non-executive members of the Agenus management team. Perquisites are not a general component of our compensation program for all executives; however, we provide Dr. Armen with car services, and we provide Dr. Stein with access to corporate housing, housing and automobile allowances and financial planning and advisory services, all as noted below.
Short-term Compensation.
Our short-term compensation program consists of base salary and annual incentive bonuses. Base salary will typically be used to recognize the experience, skills, knowledge, and responsibilities required of each officer, as well as competitive market conditions.
Base Salary: Base salaries for our executives are generally positioned at or around the 50th percentile versus our peer group (see “Competitive Market Review” above for further information on our peer group). In
establishing the base salaries of our executive officers, our Compensation Committee (with input from our CEO, other than with respect to his own base salary) takes into account a number of factors, including the executive’s seniority, position and functional role, and level of responsibility.
We also consider the following factors when determining base salary:
For newly hired personnel, we consider the base salary of the individual at his or her prior employment and any unique personal circumstances that motivated the executive to leave that prior position and join Agenus. In addition, we consider the competitive market for corresponding positions within comparable companies of similar size and stage of development.
For individuals newly promoted to a position, we also consider the competitive market and their prior salary and experience. Where these individuals may not have the same level of experience at the time of promotion as a counterpart hired from outside the Company, we may implement a multi-step approach to bringing their salaries in line with targeted levels. Salary increases at each of these steps will be contingent on the continued good performance of the individual.
The base salaries of our named executive officers are reviewed on an annual basis, and adjustments are made to reflect performance-based factors, as well as competitive conditions. Increases are considered within the context of our overall annual financial position before more specific individual and market competitive factors are considered. We do not apply specific formulas to determine base salary increases. In June 2015, the Board approved a base salary increase for each of Dr. Armen, Ms. Klaskin, Dr. Stein and Ms. Valentine effective as of July 1, 2015, as described below under “Compensation Actions for our Named Executive Officers.”
Annual Incentive Bonuses: Annual incentive bonuses for our executive officers are based on achievement of the Company’s goals and objectives as well as individual performance as outlined in our Executive Incentive Plan. Each executive is eligible to receive an award ranging from 0-200% of his or her target bonus based on the Compensation Committee’s evaluation of the achievement of Company goals and objectives and such individual’s performance. The Company’s annual goals and objectives are set at the beginning of each fiscal year and are reviewed and approved by the Board. At the end of the fiscal year, our executive management prepares a report outlining the extent to which Company goals and objectives were achieved and presents that report to the Compensation Committee along with a recommendation on the percentage funding level for the executive officers’ target bonus awards. The Compensation Committee evaluates the report, along with any relevant supporting documentation, and considers it in the context of any change in facts or circumstances that could have impacted goal attainment throughout the year. From time to time, the Compensation Committee may request supplemental information from management to support its evaluation. Based on this evaluation, as well as the Company’s available financial resources, the Compensation Committee determines the appropriate funding level for the executive officers’ target bonus payout. There is no quantifiable formula or weighting of goals. As a result, the Compensation Committee exercises discretion in establishing the funding level of the executive officers’ target bonus payout, taking into account the level of achievement of the Company goals as a whole. Once determined, the recommended bonus payout level is applied to each executive officer’s target bonus percentage to establish the individual target award. The Compensation Committee may exercise further discretion to adjust the actual bonus paid to any individual executive officer based on his or her individual performance that impacted the Company’s overall performance, which it did in 2015.
For the 2015 performance year, the annual incentive awards granted to our executive officers and other members of key management were based on their target bonuses, which were set based on competitive benchmarks, the Committee’s assessment of overall Company performance and each person’s unique contribution to the Company’s overall performance.
In determining the annual incentive awards granted to our executive officers for the 2015 performance year, our Compensation Committee noted the following key company accomplishments:
Filed INDs for antibody candidates targeting GITR and CTLA-4;
Advanced pre-clinical development of antibody candidates targeting OX40 and PD-1;
Consummated a global alliance with Incyte Corporation for our CPMs and later expanded it to include three additional targets;
Extended alliance with Merck;
|
Acquired an antibody pilot plant manufacturing facility from XOMA Corporation and retained all key staff, enabling us to improve the speed, quality and cost of drug product required to advance certain of our CPM programs through clinical proof-of-concept studies, and providing us with a distinct competitive advantage;
Acquired PhosImmune Inc., strengthening our neoantigen and vaccine development capabilities;
Recruited senior leadership in pre-clinical development, informatics and molecular sciences, cellular immunology, non-clinical safety and regulatory affairs and built out our drug discovery and project management teams;
Strengthen our corporate management team with the appointment of a Chief Financial Officer and new senior leadership in business development; and
Significantly improved our balance sheet, raising approximately $235 million in cash and finishing the year with approximately $172 million in cash and cash equivalents, which includes the proceeds from a $100 million royalty bond financing relating to QS-21.
Our Compensation Committee gave weight to the fact that these accomplishments were made in a challenging economic environment in which the management team was under substantial resource constraints, and that the accomplishments in 2015 were critical in repositioning the Company for future growth and the creation of stockholder value, especially the successful consummation of our global alliance with Incyte and the advancement of our CPM programs, including the successful IND filings for antibodies targeting GITR and CTLA-4, which remain on track to commence clinical trials in the first half of 2016, as well as the strengthening of our balance sheet through creative, non-dilutive transactions. The range in individual awards reflects each executive officer’s unique contribution to the Company’s overall performance. The table below shows the following for each of our named executive officers in 2015: target bonus (as a percentage of base salary), actual bonus received (as a percentage of base salary) and actual bonus received (as a percentage of target).
Named Executive Officer | 2015 Target Bonus (% of base salary) | 2015 Actual Bonus (% of base salary) | 2015 Actual Bonus (% of target) | |||||||||
Dr. Armen | 50 | % | 85 | % | 170 | % | ||||||
Mr. Ballantyne | 40 | % | 49 | % | 123 | % | ||||||
Mr. Baysal | 40 | % | 44 | % | 111 | % | ||||||
Ms. Klaskin | 30 | % | 44 | % | 145 | % | ||||||
Dr. Stein | 40 | % | 62 | % | 156 | % | ||||||
Ms. Valentine | 40 | % | 65 | % | 162 | % |
Long-term Incentives.
Our long-term incentives consist of time-vesting and performance-vesting stock options, restricted stock grants and performance shares. Performance shares reward performance and the achievement of key milestones that are important to our success. Stock options are performance-based because no value is created unless the value of our common stock appreciates after grant. We also grant stock options that are subject to performance-based vesting to further drive the achievement of key business objectives. Time-based restricted stock encourages employee retention by providing some level of value to executives who remain employed during the vesting period of the award. Equity-based awards also support an ownership culture and thereby encourage our
executives to take actions that are best for the Company’s long-term success. Our Compensation Committee grants equity incentives to our executives and employees generally to enable them to participate in long-term appreciation of our stockholder value, as well as to share the impact of any business setbacks. Unlike many companies in our industry, we have a practice of granting equity-based awards deep in our organization, believing that we will succeed if our employees feel invested in us, our business and our future.
Initial and Promotional Long-Term Incentive Grants:
The size of the initial long-term incentive grant made to executive officers upon joining the Company or to current employees being promoted to executive officer positions is primarily based on competitive conditions applicable to the executive’s specific position. In addition, the Compensation Committee considers the number of shares of common stock underlying equity-based awards owned by other executives in comparable positions within our Company and has, with the assistance of its independent compensation consultant, established long-term incentive guidelines for specified categories of executives. We believe this strategy is consistent with the approach of other companies in our peer group and, in our Compensation Committee’s view, is appropriate for aligning the interests of our executives with those of our stockholders over the long term.
Market Comparisons:
We use a number of methodologies to make external comparisons when we determine the number of options, restricted stock and performance shares to be granted to each executive. On an individual basis, we compare:
|
the face value of the grant by position,
the face value of the grant as a multiple of base salary,
the number of shares of common stock underlying all options, restricted stock and performance shares granted by position,
the number of shares of common stock underlying all options, restricted stock and performance shares, in total, granted, and still held, by position as a percentage of total shares granted and of total common shares outstanding, and
the proportion of exercisable to non-exercisable awards held, in total.
On a total Company basis, we analyze:
total annual equity burn rates,
total number of shares remaining in the approved pool under the 2009 Equity Incentive Plan, and
equity overhang.
We believe these comparisons provide important additional context for comparing the competitive level of our equity-based compensation practices versus the market.
Ultimately, awards to executive officers are driven by their and the Company’s performance over time, their ability to impact our results that drive stockholder value, their level within the organization, their potential to take on roles of increasing responsibility in our Company, and competitive equity award levels for similar positions and organization levels in our peer companies. Equity awards are not granted automatically to our executives on an annual basis.
Certain Outstanding Awards:
In September 2013, the Compensation Committee approved grants of stock options to the Company’s executive officers and the senior management team that vest on the achievement of key milestones. These awards were based upon guidelines recommended by the Compensation Committee’s independent compensation consultant. The weightings for these awards were based on the Compensation Committee’s judgment and its assessment of the strategic importance of the applicable milestone. The Compensation Committee believes these stock options enhanced the pay-for-performance characteristics of the Company’s long-term incentive strategy and were aligned with stockholder interests as the awards vested upon achievement of strategically important milestones.
For the September 2013 stock option grants, one-third of the options vested on the achievement of any of the seven performance milestones listed below, such that the options would be fully vested if any three of the seven performance milestones were achieved. The 2013 stock option grants had a term of three years, such that any portion of the grant not vested before the three-year anniversary of the grant date would be forfeited. The milestones were as follows:
Filing of a U.S. or European marketing application for a product containing QS-21 Stimulon.
FDA Granting of Breakthrough Therapy Designation for HSPCC-96 in GBM.
A successful readout on Phase 2a trial of HerpV as defined in the protocol.
Execution of an out licensing or collaboration agreement for a Prophage series product.
Execution of an out licensing or collaboration agreement for HerpV.
Completion of one commercial, two clinical, or five pre-clinical in-license, asset acquisition or collaboration agreements.
Achievement of a market capitalization of $200 million or more for a period of 30 consecutive days.
On June 25, 2014, the Compensation Committee vested one-third of the September 2013 grant based on the completion of the acquisition of 4-Antibody, which included six pre-clinical assets.
On July 24, 2014, the Compensation Committee vested an additional one-third of the September 2013 grant based on GlaxoSmithKline plc’s (“GSK’s”) submission of a regulatory application to the EMA for its malaria vaccine candidate, RTS,S, which contains Agenus’ QS-21 Stimulon adjuvant and which the EMA accepted for review.
On January 27, 2015, the remaining one-third vested when the Company’s market capitalization remained above $200 million for the 30th consecutive day.
In February 2015, the Compensation Committee approved grants of stock options to the Company’s executive officers and the senior management team that vest according to the following schedule: (i) 70% of each grant vests quarterly over a three-year period from the date of grant and (ii) 30% of each grant vests on the achievement of performance milestones (the “Milestone Portion”). For each grant, half of the Milestone Portion will vest on the achievement of any one of the four performance milestones listed below, and the remaining half will vest on the achievement of any additional performance milestone listed below. The Milestone Portion of each grant is subject to a term of 30 months, such that any portion of the Milestone Portion of each grant that is not vested before the 30-month anniversary of the grant date will be forfeited. The performance milestones are as follows:
Completion of IND filings with the FDA for antibodies against any two of the following CPM targets on or before March 31, 2016: GITR, OX40, or CTLA-4.
Filing of a U.S. or European marketing application for GSK’s shingles vaccine.
Execution of a licensing, collaboration or special financing agreement advancing Prophage into a Phase 3 trial in newly diagnosed GBM.
Achieving a market capitalization of $500 million or more for a period of 30 consecutive days.
On July 6, 2015, 50% of the “Milestone Portion” of the February 2015 grant vested when the Company’s market capitalization remained above $500 million for the 30th consecutive day.
In July 2015, the Compensation Committee approved a company-wide performance share grant to all employees at the time, including all of our named executive officers, which are eligible to vest in one-third increments over the three-year period beginning on July 1, 2015 based on the achievement of certain key Company milestones that are significant to the success of our business. The Compensation Committee chose as the milestones what it believed to be key drivers of our business that will help create long-term value for our stockholders. Any portion of each performance share award that does not vest during the applicable year will be forfeited automatically at the end of such year.
Benefits.
We provide the following benefits to our executive officers generally on the same basis as the benefits provided to all employees:
Health, vision and dental insurance,
Life insurance,
Short- and long-term disability,
Flexible Spending Accounts,
401(k) plan, and
Employee Stock Purchase Plan.
We believe that these benefits are consistent with those offered by companies against which we compete for talent.
We also provide limited personal benefits to our named executive officers, including certain benefits to Dr. Stein as described in the Summary Compensation Table. We provide these benefits to Dr. Stein in order to allow him to focus on his duties as our President of R&D without the disruption associated with having to relocate his home, which we believe, in turn, will increase long-term stockholder value.
Severance Compensation and Termination Protection.
We have entered into employment and change of control arrangements with Dr. Armen, Dr. Stein and Ms. Valentine. Mr. Ballantyne, Mr. Baysal, and Ms. Klaskin participate in our executive change of control plan. These arrangements provide for severance compensation to be paid if the executive’s employment is terminated under certain conditions, such as in connection with a change of control of the Company or a termination without cause by us, each as is defined in the respective agreements or plan.
The employment and change of control arrangements and the executive change of control plan, as applicable, between our Company and our executive officers and the related severance compensation provisions are designed to meet the following objectives:
|
|
|
The payments provided under these arrangements are as follows:
|
If Dr. Armen’s employment is terminated other than for cause or if he resigns for good reason following a change of control, he is also entitled to receive from the Company:
a lump sum payment of 24 months of base salary plus two times the higher of his target incentive bonus for that year or his last actual incentive bonus,
coverage under our medical and dental plans for a period of 24 months following the date of termination,
a lump sum payment of $15,000 for outplacement assistance,
a gross-up for any taxes with respect to such outplacement assistance payment, and
a gross-up payment for any taxes, interest and penalties imposed by Section 4999 of the Code.
Our other named executive officers, other than Mr. Ballantyne and Mr. Baysal, are entitled to receive from the Company 18 months base salary, bonus, and medical and dental benefits continuation, and outplacement services. Mr. Ballantyne and Mr. Baysal are entitled to receive from the Company base salary, bonus, and medical and dental benefits continuation for a period of 12 months, and outplacement services. In addition, Ms. Valentine is entitled to a gross-up payment to cover any excise taxes imposed by Section 4999 of the Code.
|
If we terminate Dr. Armen’s employment without cause or he resigns for good reason not involving a change of control, he is entitled to receive from the Company:
his base salary for a period of 18 months, plus a lump sum payment of 150% of the higher of his target incentive bonus for that year or his last actual incentive bonus,
coverage under our medical and dental plans for a period of 18 months following the date of termination,
a lump sum payment of $15,000 for outplacement assistance,
a gross-up for any taxes with respect to such outplacement assistance payment,
a gross-up payment for any taxes, interest and penalties imposed by Section 4999 of the Code, and
at the Compensation Committee’s discretion, the acceleration of vesting of any unvested stock options.
Ms. Valentine and Dr. Stein are entitled to 12 months base salary, bonus, medical and dental benefits continuation, and outplacement services under the same circumstances.
Executive employment and change of control arrangements are covered in greater detail below in the section entitled “Compensation of Executive Officers—Potential Payments Upon Termination or Change of Control.”
Compensation Actions for our Named Executive Officers
Compensation actions for 2015 and 2016 reflect our Compensation Committee’s assessments of performance relative to Company goals and objectives and individual performance objectives, and comparisons against market references described above.
Dr. Armen, our Chief Executive Officer, makes recommendations to our Compensation Committee as to individual compensation actions for our senior executives, including our named executive officers, but excluding himself. Using the same criteria outlined above, our Compensation Committee works with our Vice President of Human Resources and Administration and our independent compensation consultant to determine the specific compensation actions for our named executive officers. Our Compensation Committees makes all final determinations regarding the compensation of our executive officers, including our named executive officers.
Our compensation actions for our Chief Executive Officer and our other named executive officers are summarized as follows:
Dr. Garo H. Armen—Chairman and Chief Executive Officer
Compensation Actions in 2015:
|
|
|
Certain Compensation Actions in 2016:
|
|
C. Evan Ballantyne—Chief Financial Officer
Compensation Actions in 2015:
|
|
|
Certain Compensation Actions in 2016:
|
|
Christine M. Klaskin—Vice President, Finance
Compensation Actions in 2015:
|
|
|
Certain Compensation Actions in 2016:
|
|
Ozer Baysal—Chief Business Officer
Compensation Actions in 2015:
|
|
|
Certain Compensation Actions in 2016:
|
|
Dr. Robert B. Stein—President, Research & Development
Compensation Actions in 2015:
|
|
|
|
Certain Compensation Actions in 2016:
|
|
Karen H. Valentine—Chief Legal Officer and General Counsel
Compensation Actions in 2015:
|
|
|
Certain Compensation Actions in 2016:
|
|
Section 162(m) of the Internal Revenue Code disallows a tax deduction for any publicly-held corporation for individual compensation exceeding $1 million in any taxable year for a company’s named executive officers, other than its chief financial officer, unless compensation qualifies as performance-based under such section. We are asking our shareholders to approve the material terms of our 2009 Amended and Restated Equity Incentive Plan and our 2016 Executive Incentive Plan, consistent with Section 162(m). However, the Compensation Committee believes that its primary responsibility is to provide a compensation program that attracts, retains and rewards the executives necessary for our success. Accordingly, the Compensation Committee may, in its judgment, authorize, and has authorized, compensation payments that do not comply with the exemptions, in whole or in part, under Section 162(m) or that may otherwise be limited as to tax deductibility.
The Compensation Committee regularly considers the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. If accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.
The Compensation Committee of the Board consists entirely of independent directors who are not officers or employees of Agenus. The Compensation Committee charter is posted on the corporate governance section of our website at http://www.agenusbio.com/finance/corporate-governance. No material on our website is part of this proxy statement.
The Compensation Committee of the Board has reviewed and discussed with management the foregoing Compensation Discussion and Analysis, and based on such review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement on Schedule 14A for filing with the SEC.
By the Compensation Committee,
Wadih Jordan (Chair)
* |
|
(1) | Excludes shares owned through Antigenics Holdings LLC (“Holdings”). Dr. Armen is Chief Executive Officer, Chairman of the |
(2) | Includes 178,723 deferred shares to be distributed
|
(3) | Includes 240,486 deferred shares to be distributed in accordance with the terms of our DDCP. |
(4) | Includes 63,751 deferred shares to be distributed in accordance with the terms of our DDCP |
(5) | Includes 482,959 deferred shares to be distributed in accordance with the terms of our DDCP, and excludes shares held by Holdings as |
8
Ownership By Certain Beneficial Owners
This table shows certain information, based on filings with the SEC, about the beneficial ownership of our capital stock as of February 14, 2024 by each person known to us owning beneficially more than 5% of any class of our capital stock. Unless otherwise indicated in a footnote to this table, each person has the sole power to invest and vote the shares of common stock listed opposite the person’s name.
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
(2) | Based solely upon information set forth on |
(3) | Based solely upon information set forth on Schedule 13G/A filed with the SEC on February 13, |
(4) | Based solely upon information set forth on Schedule 13G/A filed with the SEC on February 14, 2024 by Deep Track Capital, LP, Deep Track Biotechnology Master Fund, Ltd. and David Kroin. Each of Deep Track Capital, LP, Deep Track Biotechnology Master Fund, Ltd. and David Kroin have shared voting and dispositive power over 31,697,539 shares. The principal business address of Deep Track Biotechnology Master Fund, Ltd. is |
9
PROPOSAL 1—TO APPROVE AN AMENDMENT TO THE COMPANY’S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED, TO EFFECT A REVERSE STOCK SPLIT OF OUR ISSUED AND OUTSTANDING COMMON STOCK AT A RATIO OF 1-FOR-20
The Board recommends that you approve the amendment to Article Fourth of our Certificate of Incorporation of the Company to effect a reverse stock split of the Company’s issued and outstanding common stock at a ratio of 1-for-20.
As of February 9, 2024, there were:
Shares of common stock | As of February 9, 2024 | |||
Outstanding | 399,246,272 | |||
Issuable upon exercise of warrants outstanding | 1,980,000 | |||
Issuable upon exercise of options and vesting of RSUs outstanding under the
| 46,805,941 | |||
| 6,966,861 | |||
Reserved for future purchases under 2019 Employee Stock Purchase Plan | 763,674 | |||
Issuable upon conversion of | 333,333 | |||
Outstanding on a | 456,096,081 |
(1) | Assuming all shares reserved under our
|
Purpose of the Amendment to our Certificate of Incorporation
The Board believes it is in the best interest of the Company to approve the amendment to our Certificate of Incorporation to effect a reverse stock split of the Company’s issued and outstanding common stock to give the Company greater flexibility in considering and planning for future potential business needs. The reverse stock split will result in additional authorized and unissued shares becoming available for general corporate purposes as the Board may determine from time to time, including for use under its equity compensation plans.
The Board also believes the amendment to our Certificate of Incorporation is necessary to ensure that we continue to satisfy the requirements for the continued listing of our common stock on the Nasdaq Capital Market (“Nasdaq”), which we believe helps support and maintain stock liquidity and Company recognition for our stockholders. Companies listed on the Nasdaq, however, are subject to various rules and requirements imposed by Nasdaq which must be satisfied in order to continue having their stock listed on the exchange (these are called the Nasdaq’s continued listing standards). One of these standards is the “minimum bid price” requirement set forth in Marketplace Rule 5450(a)(1), which requires that the bid price of the stock of listed companies be at least $1.00 per share. A listed company risks being delisted and removed from the Nasdaq if the closing bid price of its stock remains below $1.00 per share for an extended period of time.
The closing bid price of our common stock has been below $1.00 per share since October 19, 2023. We believe a reverse stock split will result in a higher price per share for outstanding shares of our common stock, and therefor will allow us to maintain compliance with Nasdaq’s continued listing requirements. A reverse stock split by a publicly traded company generally reduces the number of shares outstanding while leaving the amount of the increase for which stockholder approval is being sought, the Board considered the historical amounts of equity awards granted by the Company in the past three years. In 2013, 2014 and 2015, the Company made equity awards representing a total of 1,720,352 shares, 3,303,689 shares and 4,570,733 shares, respectively. The weighted average number of shares of our common stock outstanding in 2013, 2014 and 2015 were 29,765,547, 59,753,552 and 78,212,094, respectively. The Company’s three-year average burn rate is 6.7%. We believe our historical burn rate is reasonable for a company of our size in our industry, especially given our broad-base use of equity to compensate our employees and other key service providers. We will continue to monitor our equity use in future years to ensure our burn rate is within competitive market norms.
If Proposal No. 3 is approved, there would be an additional 6,000,000 shares available for grant under the Amended Plan. In setting the amount of the increase for which stockholder approval is being sought in Proposal No. 3, the Board also considered the total amount of stock options and other awards outstanding under existing grants. The Company had outstanding, as of April 8, 2016, 86,528,934 shares, including unvested shares of restricted stock. Accordingly, our 11,408,570 outstanding options and other outstanding awards (commonly referred to as the “overhang”) represent approximately 13% of our outstanding shares. For these purposes, outstanding shares include unvested restricted shares of our common stock awarded and outstanding as of the applicable date.
After a review of our historical practices and an estimation of our future growth, the Board believes that the proposed share increase under the Amended Plan would facilitate our ability to continue to grant equity incentives for approximately the next two years, which is vital to our ability to attract and retain the highly skilled individuals required to support the Company’s continued growth in the extremely competitive labor markets in which we compete.
We Believe It Is in the Best Interest of the Company to Have the Ability to Grant Awards that May Qualify as Exempt Performance-Based Compensation under Section 162(m)
In addition, approval of the Amended Plan by our stockholders would permit us, if desired, to grant stock options, stock appreciation rights and performance-based stock awards under the Amended Plan that may qualify
as “qualified performance-based compensation” within the meaning of Section 162(m) of the Code. Section 162(m) disallows a deduction to any publicly held corporation and its affiliates for certain employee compensation that exceeds $1 million. However, compensation that satisfies the requirements of an exception for “qualified performance-based compensation” is not subject to this deduction limitation. For compensation awarded under a plan to fit within this exception under Section 162(m), among other things, the material terms of the related performance goals must be disclosed to and approved by the corporation’s shareholders not less frequently than every five years. Under Section 162(m), the material terms include the class of eligible employees, a description of the business criteria on which the performance goals may be based and the maximum amount that can be paid to any participant for a specified period. For the Amended Plan, these terms are described below under “Eligibility to Receive Awards,” “Annual Individual Limits” and “Performance Criteria.” Although stockholder approval is one of the requirements of the exception to the deductibility limits under Section 162(m), even with stockholder approval, the Board cannot guarantee that awards under the Amended Plan will be deductible as qualified performance-based compensation under Section 162(m). In addition, the Board has and will continue to have authority to pay or provide compensation (including under the Amended Plan) that is not deductible under Section 162(m) in order to maintain a competitive compensation program and provide compensation that will attract and retain highly qualified executives.
The Board believes that the Amended Plan will promote the interests of shareholders and is consistent with principles of good corporate governance, including:
10 capitalization of the company the same, which should increase the price per share of the company’s stock. After a reverse stock split, the enterprise value of a company is spread over fewer shares and so the per share price of the stock should be higher. Even if a reverse stock split is effected, the expected benefits discussed above may not be realized or maintained. The market price of our common stock will continue to be based, in part, on our performance and other factors unrelated to the number of shares of common stock outstanding. With the exception of the Company’s routine practice of granting stock options, restricted stock units, and other stock-based awards to employees and, in certain instances, its consultants, the Company has no current specific plan, commitment, arrangement, understanding, or agreement regarding the issuance of additional shares of Common Stock resulting from the increase in the number of unissued shares available for issuance under our Certificate of Incorporation after giving effect to the proposed reverse stock split. Unless required by applicable law or stock exchange rules, no further vote of the stockholders will be required to issue such shares. Principal Effects of the Amendment to our Certificate of Incorporation Effect Common Stock Capital Stock The amendment to our Certificate of Incorporation will not change the number of authorized shares of common stock or the relative voting power of our shareholders. Because the number of authorized shares will not be reduced, the number of authorized but unissued shares of our common stock will materially increase and will be available for reissuance by the Company. The availability of additional authorized shares for issuance may have the effect of discouraging a merger, tender offer, proxy contest, or other attempt to obtain control of the Company. The reverse stock split, if effected, would affect all holders of our common stock uniformly. The amendment to our Certificate of Incorporation will not affect the par value of our common stock, which will remain at $0.01. Our common stock is currently registered under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we are subject to the periodic reporting and other requirements of the Exchange Act. We do not intend for the reverse stock split to constitute, or be the first step in a series of plans or proposals for, a “going private” transaction pursuant to Rule 13e-3 under the Exchange Act, and we will continue to be subject to the periodic reporting and other requirements of the Exchange Act after giving effect to the reverse stock split. Following the reverse stock split, we expect our common stock will continue to be listed on the Nasdaq under the symbol “AGEN,” although it will trade under a new CUSIP number. Fractional Shares No fractional shares of common stock will be issued as a result of the reverse stock split. Instead, any stockholder who would have been entitled to receive a fractional share as a result of the reverse stock split will receive a cash payment in lieu of such fractional shares equal to the fair market value of such fractional shares, as determined in good faith by the Board. Effect on Stock Options, Restricted Stock Units, and Preferred Stock As of February 9, 2024, we had approximately 46.8 million shares subject to stock options and unvested restricted stock units (including performance-based units) outstanding under our stock incentive plans. Under our 2019 Equity Incentive Plan (the “2019 EIP”), DDCP and 2015 Inducement Equity Plan, and 2019 Employee Stock Purchase Plan (the “ESPP”) (collectively, the “Equity Plans”), an appropriate adjustment to the share pools and awards granted under the Equity Plans must occur in the event of a reverse stock split. Accordingly, if the reverse stock split is effected, the number of shares available for issuance under our Equity Plans, as well as any individual, per-participant and non-employee director limits, are expected to be proportionately adjusted to reflect the reverse stock split. The number of shares subject to any outstanding award or to any outstanding option under the Equity Plans, and the exercise price, grant price or purchase price relating to any such award or |
11 option under the Equity Plans, are also expected to be proportionately adjusted to reflect the reverse stock split. In addition, pursuant to the authority provided under the Equity Plans, the Company is authorized to effect any other changes necessary, desirable or appropriate to give effect to the reverse stock split, including any applicable technical, conforming changes to the Equity Plans. For illustrative purposes only, if a 1-for-20 reverse stock split is effected, the 6,966,861 shares that remain available for issuance under the 2019 EIP, the 2015 Inducement Equity Plan and our DDCP, as of February 9, 2024, are expected to be adjusted to 348,343 shares, subject to increase as awards outstanding under the 2019 EIP expire or are forfeited and revert to the share pool per the terms of the 2019 EIP. Further, for illustrative purposes only, if a 1-for-20 reverse stock split is effected, an outstanding stock option for 10,000 shares of common stock, exercisable at $0.75 per share, would be adjusted as a result of a 1-for-20 split ratio into an option exercisable for 500 shares of common stock at an exercise price of $15.00 per share. If a fractional share would result from any adjustment made to an outstanding award under the Equity Plans in connection with the reverse stock split, the fractional share will be disregarded and the number of shares underlying the outstanding award will be rounded down to the nearest whole share. As of February 9, 2024, there 31,620 shares of our Series A-1 Convertible Preferred Stock issued and outstanding. The amendment to our Certificate of Incorporation will not affect the total authorized number of shares of our preferred stock or the par value of the preferred stock, which will remain at $0.01. Procedures for Effecting the Reverse Stock Split If the amendment to our Certificate of Incorporation is approved by the stockholders at the Special Meeting, the Certificate of Amendment will be filed with the Secretary of State of the State of Delaware to effect the amendment to our Certificate of Incorporation as soon as practicable after the Special Meeting. The form of the Certificate of Amendment that would be enacted if the amendment to our Certificate of Incorporation is adopted is set forth in Appendix A to this Proxy Statement. If the amendment to our Certificate of Incorporation is approved by our shareholders and the reverse stock split is implemented, each holder of our common stock will own a reduced number of shares of our common stock. The reverse stock split will be realized simultaneously and uniformly for all holders of our common stock and will not affect any stockholder’s percentage ownership interest in our Company. Stockholders of Record Our stockholders of record hold their shares in certificated form, direct registration system (“DRS”) form, book-entry form or some combination of certificated, DRS and book-entry form. If the reverse stock split is implemented, all stockholders of record will receive a transmittal letter from our transfer agent, Equiniti Trust Company, LLC, who we expect to act as our exchange agent if the reverse stock split is implemented. The letter of transmittal will contain instructions on how to surrender your certificates, if any, representing your shares of our pre-split common stock to Equiniti Trust Company, LLC, as well as certain other necessary information. Any expenses incurred by us with respect to the exchange of shares held of record, including but not limited to expenses arising from the exchange of shares held in DRS and book-entry form, will be borne by the Company. Beneficial Owners of Shares Held in Street Name Upon the effectiveness of the reverse stock split, shares held by stockholders in “street name,” through a bank, broker or other nominee, will be treated in the same manner as registered stockholders whose shares are registered in their names. However, these banks, brokers or other nominees may have different procedures than those that apply to registered stockholders for reflecting the reverse stock split in their records and distributing cash received in lieu of fractional share interests to the beneficial owners of such shares. If a stockholder holds shares of our common stock with a bank, broker or other nominee and has any questions in this regard, stockholders are encouraged to contact their bank, broker or other nominee. |
12 Discretionary Authority of the Board of Directors to Abandon Reverse Stock Split The Board reserves the right to abandon the amendment to our Certificate of Incorporation without further action by our stockholders at any time before the effectiveness of the filing with the Secretary of State of Delaware of the Certificate of Amendment to the Company’s Certificate of Incorporation, even if the proposed Amendment has been authorized by our stockholders at the Special Meeting. Vote Required Approval of an amendment to our Certificate of Incorporation to effect a reverse stock split requires the affirmative vote of the majority of the voting power of the common stock issued and outstanding as of the Record Date, and abstentions will have the effect of a vote against this proposal. The Board of Directors recommends a vote “FOR” an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to effect a reverse stock split of our issued and outstanding common stock at a ratio of 1-for-20. |
13 Stockholder Proposals for 2024 Annual Meeting of Stockholders Proposals to be included in the Company’s proxy statement. Under SEC rules, if a stockholder wants us to include a proposal in our proxy statement and form of proxy for presentation at our 2024 Annual Meeting of Stockholders, the proposal must comply with Rule 14a-8 under the Exchange Act and must also meet the advance notice requirements in our bylaws applicable to all stockholder proposals (as described in the following paragraphs). Proposals to be brought before an annual meeting. Under our bylaws, a stockholder must follow certain procedures to nominate persons for election as directors or to introduce an item of business at an annual meeting of stockholders. Among other requirements, these procedures require any nomination or proposed item of business to be submitted in writing to our Chairman of the Board or Corporate Secretary at our principal executive offices. Assuming our 2024 Annual Meeting of Stockholders is not more than 30 days before or 30 days after June 12, 2024, if you wish to bring business before the 2024 Annual Meeting of Stockholders, you must have given us written notice by December 29, 2023. However, if at least 60 days’ notice or prior public disclosure of the date of the 2024 Annual Meeting of Stockholders is given or made and the date of the 2024 Annual Meeting of Stockholders is not within 30 days before or after June 12, 2024, notice by the stockholder must be received by the Company 45 days prior to the date of the 2024 Annual Meeting of Stockholders. If less than 60 days’ notice or prior public disclosure of the date of the 2024 Annual Meeting of Stockholders is given or made and the date of the 2024 Annual Meeting of Stockholders is not within 30 days before or after June 12, 2024, notice by the stockholder must be received by the Company no later than 15 days after the date Agenus sends notice of the 2024 Annual Meeting of Stockholders. If a stockholder fails to provide timely notice of a proposal to be presented at the 2024 Annual Meeting of Stockholders, the proxies designated by the Board will have discretionary authority to vote on the proposal. In addition, stockholders who intend to solicit proxies in support of director nominees other than the Board’s nominees must also provide written notice to our Chairman of the Board or Corporate Secretary that sets forth all the information required by Rule 14a-19 of the Exchange Act. Householding of Meeting Materials Some banks, brokers, and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of our proxy statement or annual report may have been sent to multiple stockholders in your household. We will promptly provide a separate copy of either document to you if you contact Investor Relations at Agenus Inc., 3 Forbes Road, Lexington, Massachusetts 02421, or telephone or e-mail Investor Relations at 781-674-4400 or investor@agenusbio.com. If you want to receive separate copies of the annual report and proxy statement in the future or if you are receiving multiple copies and would like to receive only one printed copy for your household, you should contact your bank, broker or other nominee record holders, or you may contact us. |
|
Summary of the Amended Plan
The following is a brief summary of the material terms of the Amended Plan. A copy of the Amended Plan is attached as Appendix B to this proxy statement, and we urge stockholders to read it in its entirety. The following description of certain features of the Amended Plan is qualified in its entirety by reference to the full text of the Amended Plan.
Administration.The Amended Plan is administered by the Board, who has the authority to, among other things, determine eligibility for, grant and amend awards; determine, modify or waive the terms and condition of any award; determine whether awards will be settled in shares of our common stock, cash, other property, other awards or a combination of the foregoing; adopt, amend and repeal the rules relating to the Amended Plan; interpret and correct the provisions of the Amended Plan and any award; and otherwise do all things necessary or
desirable to carry out the purposes of the Amended Plan. The Board may delegate certain of its powers under the Amended Plan, to the extent permitted by law, to one or more of its committees or subcommittees, officers of the Company or other employees or persons. As used herein, the term “Board” refers to the Board or its authorized delegates, as applicable.
Eligibility to Receive Awards. Key employees, officers, directors, consultants and advisors of the Company and its affiliates are eligible to receive awards under the Amended Plan. Eligibility for options intended to be incentive stock options (“ISOs”) is limited to employees of the Company or certain affiliates. As of April 8, 2016, we estimate that approximately 235 employees, 5 non-employee directors and 16 consultants and advisors would be eligible to participate in the Amended Plan.
14Authorized Shares.Subject to adjustment as described below, the maximum number of shares of common stock that may be delivered in satisfaction of awards under the Amended Plan is 20,200,000 shares (the “Share Pool”), of which 1,649,460 shares remain available for grant as of April 8, 2016 and of which 6,000,000 shall become available upon stockholder approval of the Amended Plan. Up to 7,649,460 shares from the Share Pool may be issued in satisfaction of ISOs. The following rules apply in respect of the Share Pool:
The Board knows of no business to be brought before the Special Meeting other than as set forth above. If other matters properly come before the stockholders at the meeting, it is the intention of the persons named on the proxy to vote the shares represented thereby on such matters in accordance with their judgment.
By Order of the Board of Directors,
Garo Armen
Chief Executive Officer
Lexington, Massachusetts
February , 2024
15
CERTIFICATE OF EIGHTH AMENDMENT
TO THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
AGENUS INC., a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:
1. The name of the corporation is Agenus Inc. (the “Corporation”). The Corporation’s original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on November 10, 1999 (the “Certificate of Incorporation”). The Certificate of Incorporation was amended and restated on June 7, 2002 (the “Restated Certificate”), which was further amended on June 15, 2007 by a Certificate of Amendment (the “First Amendment”), which was further amended on January 5, 2011 by a Certificate of Ownership and Merger (the “Name Change Amendment”), which was further amended on September 30, 2011 by a Certificate of Second Amendment (the “Second Amendment”), which was further amended on June 15, 2012 by a Certificate of Third Amendment (the “Third Amendment”), which was further amended on April 24, 2014 by a Certificate of Fourth Amendment (the “Fourth Amendment”), which was further amended on June 14, 2016 by a Certificate of Fifth Amendment (the “Fifth Amendment”), which was further amended on June 21, 2019 by a Certificate of Sixth Amendment (the “Sixth Amendment”), and which was further amended on August 5, 2022 by a Certificate of Seventh Amendment (the “Seventh Amendment”) (the Restated Certificate, as amended by the First Amendment, the Name Change Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment, the Sixth Amendment and the Seventh Amendment, the “Amended Certificate”). This Certificate of Eighth Amendment (the “Eighth Amendment”) amends certain provisions of the Amended Certificate, and has been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.
2. The Board of Directors of the Corporation has duly adopted a resolution, pursuant to Section 242 of the General Corporation Law of the State of Delaware, setting forth the following amendment to the Amended Certificate, and declaring the Eighth Amendment to be advisable.
3. This Eighth Amendment was duly adopted by the vote of the stockholders holding the requisite number of shares of outstanding stock of the Corporation entitled to vote thereon in accordance with the provisions of Sections 216 and 242 of the General Corporation Law of the State of Delaware.
4. The Amended Certificate is hereby amended by adding the following provision to the end of Article Fourth:
As of 12:01 A.M. (Eastern Time) on April , 2024 (the “Second Effective Time”), each issued and outstanding share of the Corporation’s Common Stock (including each share of treasury stock, collectively, the “Pre-Second Split Stock”) shall automatically and without any action on the part of the holder thereof be reclassified as and reduced to one twentieth of a share of Common Stock (such reduction of shares designated as the “Second Reverse Stock Split”). The par value of the Corporation’s Common Stock following the Second Reverse Stock Split shall remain $0.01 per share. Each holder of a certificate or certificates of Pre-Second Split Stock shall be entitled to receive, upon surrender of such certificates to the Corporation’s transfer agent for cancellation, a new certificate or certificates for a number of shares equal to such holder’s Pre-Second Split Stock divided by twenty (20), with any fraction resulting from such division rounded down to the nearest whole number (in each case, such fraction, if any, being a “SecondFractional Share”). No Fractional Shares will be issued for Pre-Second Split Stock in connection with the Second Reverse Stock Split. Each holder of Pre-Second Split Stock at the Second Effective Time who would otherwise be entitled to a Fractional Share shall, in lieu thereof, receive a cash payment equal to x) the Second Fractional Share multiplied by y) the product of (i) the average of the high and low trading prices of the Common Stock as reported on The NASDAQ Capital Market or
A-1
other principal market of the Common Stock, as applicable, during each of the ten (10) trading days immediately preceding the date of the Second Effective Time and (ii) twenty (20).”
5. This Eighth Amendment shall be effective as of April , 2024 in accordance with the provisions of Section 103(d) of the General Corporation Law of the State of Delaware.
6. Except as set forth in this Eighth Amendment, the Restated Certificate remains in full force and effect.
[Signature Page to Follow]
A-2
IN WITNESS WHEREOF, the undersigned has duly executed this Eighth Amendment in the name of and on behalf of the Corporation on this day of April, 2024.
Any shares of stock underlying the portion of an award that expires, become unexercisable without having been exercised, terminates, or is surrendered, forfeited or repurchased by the Company due to failure to vest will not reduce the Share Pool.
All shares covering any portion of a stock appreciation right that is settled in stock and any shares withheld from a stock option or other award in satisfaction of the exercise price or tax withholding obligations will be treated as having delivered under the Amended Plan and will not be added back to the Share Pool.
The Share Pool will not be increased by any shares that are delivered under the Amended Plan that are subsequently repurchased by the Company using proceeds directly attributable to stock option exercises.
Shares issued under awards of an acquired company that are converted, replaced or adjusted in connection with the acquisition will not reduce the Share Pool.
Shares that may be delivered under the Amended Plan may be authorized but unissued shares of our common stock or previously issued shares of our common stock acquired by the Company. The closing price of our common stock as reported on NASDAQ on April 12, 2016 was $4.34 per share.
Annual Individual Limits.With respect to any person in any calendar year (other than a non-employee director, whose awards are subject to the limitations described below), the maximum number of shares for which stock options may be granted and the maximum number of shares subject to SARs that may be granted under the Amended Plan is, in each case, 1,665,000 shares. The maximum number of shares subject to other awards that are denominated in shares of common stock, or the value of which could be paid in cash or other property under such awards, that may be delivered to any person (other than a non-employee director) in any calendar year is 647,682 shares.
In the case of a non-employee director, the maximum grant-date fair market value (determined in accordance with applicable financial accounting rules) of awards granted under the Amended Plan in any calendar year is $500,000, except such limit is $800,000 for the calendar year in which such director is first elected or appointed to the Board. The foregoing limits do not apply to any award granted pursuant to a director’s election to receive shares in lieu of cash retainers or other fees.
Types of Awards. The Plan provides for the grant of stock options, stock appreciation rights, restricted and unrestricted stock awards and other stock-based awards, which we refer to collectively as awards. Any award that is subject to performance criteria is referred to as a performance award. Dividends or dividend equivalents may also be provided in connection with awards under the Amended Plan.
Stock Options and SARs. The Board may grant incentive stock options intended to comply with Section 422 of the Code (“ISOs”), stock options not intended to so qualify and SARs. For each stock option or SAR granted under the Plan, the Board determines the number of shares covered by the stock option or SAR, the exercise price or base value from which appreciation is measured and the conditions and limitations applicable to such award and the common stock issued thereunder. The exercise price of a stock option (or base value of a SAR) granted under the Amended Plan shall be no less than 100% of the fair market value of a share of our common stock on the date of grant (110% in the case of certain ISOs), except in the case of certain substitute awards. Other than in connection with certain corporate transactions, stock options or SARs granted under the Amended Plan may not be repriced or substituted for by new stock options or SARs having a lower exercise price or base value, nor may any consideration be paid upon the termination, cancellation, voluntary surrender or exchange of any stock options or SARs, in each case, without shareholder approval. No stock option or SAR will be granted for a term in excess of ten years (or five years, in the case of certain ISOs).
Stock Awards and Restricted Stock Awards. The Board may grant stock awards, which may, but need not be, subject to forfeiture if specified conditions are not satisfied. The Board shall determine the terms and conditions of any stock award granted under the Plan.
Other Stock-Based Awards. The Board may grant other awards, including restricted stock units, based on or with reference to our common stock and having such terms or conditions as the Board may determine.
Performance Awards.The Board may grant awards subject to performance criteria and such other terms and conditions as may be determined by the Board. Performance awards may be granted as awards that are intended to qualify as exempt performance-based compensation under Section 162(m) of the Code and awards that are not intended to so qualify.
Vesting; Terms of Awards. The Board determines the terms of all awards granted under the Amended Plan, including the time or times an award will vest, become exercisable or remain exercisable, and may at any time accelerate the vesting or exercisability of an award.
Termination of Employment or Other Status.The Board determines the effect of disability, death, retirement, authorized leave or absence or other change in the employment or other status of a participant on an award.
Transferability of Awards.Except as the Board may otherwise determine, awards may not be sold, assigned, transferred, pledged or otherwise encumbered, except by will or the laws of descent and distribution, and, during the life of the participant, are exercisable only by the participant.
Performance Criteria.The Amended Plan provides that grants of performance awards may be made subject to achieving “performance criteria” over a specified performance period. Performance criteria with respect to those awards that are intended to qualify as “performance-based compensation” for purposes of Section 162(m) of the Code are limited to objectively determinable measure(s) of performance relating to any or any combination of the following (measured either absolutely or comparatively (including, without limitation, by reference to an index or indices or a specified peer group or other group of companies) and determined on a consolidated basis or, as the context permits, on a divisional, subsidiary, line of business, project or geographical basis or any combinations thereof and subject to such adjustments, if any, as the Board specifies, consistent with the requirements of Section 162(m) of the Code): sales; revenues; assets; expenses; earnings before or after deduction for all or any portion of interest, taxes, depreciation, amortization or equity expense, whether or not on a continuing operations or an aggregate or per share basis; return on equity, investment, capital, capital employed or assets; one or more operating ratios; operating income or profit, including on an after-tax basis; net income; debt levels or reduction, leverage ratios or credit rating; market share; capital expenditures; cash flow (including, but not limited to, operating cash flow and free cash flow); stock price; stockholder return; sales of particular products or services; customer acquisition, expansion and retention; regulatory compliance; regulatory or other
filings or approvals; research, development, clinical, regulatory, manufacturing or product development milestones; discovery, preclinical or clinical stage scientific discoveries, objectives or inventions; manufacturing or process developments; acquisitions and divestitures (in whole or in part); new or expanded joint ventures, strategic alliances, licenses, collaborations or partnerships, or achievement of milestones under any of the foregoing; spin-offs, split-ups and the like; reorganizations; recapitalizations, restructurings, financings (issuance of debt or equity), refinancings or other capital raising transactions; receipt of alternative financing; implementation or completion of critical projects; employee satisfaction; achievements in strengthening the Company’s intellectual property position; recruiting and maintaining personnel; transactions that would constitute a change of control; or any combination of the foregoing.
Performance criteria and any targets with respect thereto need not be based upon an increase, a positive or improved result or avoidance of loss. To the extent consistent with the requirements for satisfying the performance-based compensation exception under Section 162(m) of the Code, the Board may provide in the case of any award intended to qualify for such exception that one or more of the performance criteria applicable to such award will be adjusted in an objectively determinable manner to reflect events (for example, the impact of charges for restructurings, discontinued operations, mergers, acquisitions, and other unusual or infrequently occurring items, and the cumulative effects of tax or accounting changes, each as defined by U.S. generally accepted accounting principles) occurring during the performance period that affect the applicable performance criteria.
Corporate Transactions.In the event of a sale of the Company in which the stockholders no longer own a majority of outstanding equity securities, a consolidation, merger or a similar transaction in which the Company is not the surviving corporation, a sale of all or substantially all the assets or capital stock of the Company, or any other change in control or acquisition of the Company as determined by the Board, the Board may, with respect to outstanding awards, on the same basis or on different basis and on the terms and conditions as the Board determines, provide for:
the continuation of the awards by the Company;
the assumption or substitution of awards by the acquirer or surviving entity;
upon written notice, the termination of all unexercised awards unless the vested portion is exercised within a specified period following the date of such notice;
the cash payment to the holder of an unexercised award equal to the difference between the fair market value of the award and its exercise price or base price, if applicable, or the vested portion thereof, including any vesting that may be accelerated; or
any combination of the foregoing.
Adjustments.In the event of certain corporate transactions (including, but not limited to, a stock split, stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin-off, or split-up) or other change in the Company’s corporate or capital structure, the Board will make appropriate adjustments to the number and class of securities that may be delivered in satisfaction of awards under the Amended Plan, the number and class of securities, vesting schedule, exercise price or base value subject to outstanding or subsequently granted awards and any other provision of awards effected by the change. The Board may make similar adjustments to account for distributions or other events as appropriate to avoid distortion in the operation of the Amended Plan.
Clawback.Awards granted under the Amended Plan are subject to forfeiture, termination and rescission, and a participant will be obligated to return any payments received in respect of awards to the extent provided in the award, as may be required by law, or as provided in any applicable Company clawback or recoupment policy.
Amendment or Termination; Term.The Board may amend, modify or terminate any outstanding award at any time, provided that the consent of the participant is required if it would materially and adversely affect the participant. The Board may amend, suspend or terminate the Amended Plan or any portion thereof at any time,
subject to any applicable stockholder approval requirements. No awards shall be granted under the Amended Plan after the completion of ten years from the date on which the plan, as amended and restated, was approved by the Company’s stockholders, but awards previously granted may extend beyond that time.
Certain Federal Income Tax Consequences of the Amended Plan
The following is a summary of certain U.S. federal income tax consequences associated with awards granted under the Plan. This summary does not purport to cover federal employment tax or other U.S. federal tax consequences that may be associated with the Amended Plan, nor does it cover state, local or non-U.S. taxes, except as may be specifically noted.
Stock Options (other than ISOs).In general, a participant has no taxable income upon the grant of a stock option that is not intended to be an ISO (an “NSO”) but realizes income in connection with the exercise of the NSO in an amount equal to the excess (at the time of exercise) of the fair market value of the shares acquired upon exercise over the exercise price. A corresponding deduction is generally available to the Company. Upon a subsequent sale or exchange of the shares, any recognized gain or loss is treated as a capital gain or loss for which the Company is not entitled to a deduction.
ISOs. In general, a participant realizes no taxable income upon the grant or exercise of an ISO. However, the exercise of an ISO may result in an alternative minimum tax liability to the participant. With some exceptions, a disposition of shares purchased pursuant to an ISO within two years from the date of grant or within one year after exercise produces ordinary income to the participant (and generally a deduction to the Company) equal to the value of the shares at the time of exercise less the exercise price. Any additional gain recognized in the disposition is treated as a capital gain for which the Company is not entitled to a deduction. If the participant does not dispose of the shares until after the expiration of these one and two-year holding periods, any gain or loss recognized upon a subsequent sale of shares purchased pursuant to an ISO is treated as a long-term capital gain or loss for which the Company is not entitled to a deduction.
SARs. The grant of a SAR does not itself result in taxable income, nor does taxable income result merely because a SAR becomes exercisable. In general, a participant who exercises a SAR for shares of stock or receives payment in cancellation of a SAR will have ordinary income equal to the amount of any cash and the fair market value of any stock received. A corresponding deduction is generally available to the Company.
Unrestricted Stock Awards. A participant who purchases or is awarded unrestricted stock generally has ordinary income equal to the excess of the fair market value of the shares at that time over the purchase price, if any, and a corresponding deduction is generally available to the Company.
Restricted Stock Awards. A participant who is awarded or purchases shares subject to a substantial risk of forfeiture generally does not have income until the risk of forfeiture lapses. When the risk of forfeiture lapses, the participant has ordinary income equal to the excess of the fair market value of the shares at that time over the purchase price, if any, and a corresponding deduction is generally available to the Company. However, a participant may make an election under Section 83(b) of the Code to be taxed on restricted stock when it is acquired rather than later, when the substantial risk of forfeiture lapses. A participant who makes an effective 83(b) election will realize ordinary income equal to the fair market value of the shares as of the time of acquisition less any price paid for the shares. A corresponding deduction will generally be available to the Company. If a participant makes an effective 83(b) election, no additional income results by reason of the lapsing of the restrictions.
For purposes of determining capital gain or loss on a sale of shares awarded under the Amended Plan, the holding period in the shares begins when the participant recognizes taxable income with respect to the transfer. The participant’s tax basis in the shares equals the amount paid for the shares plus any income realized with
respect to the transfer. However, if a participant makes an effective 83(b) election and later forfeits the shares, the tax loss realized as a result of the forfeiture is limited to the excess of what the participant paid for the shares (if anything) over the amount (if any) realized in connection with the forfeiture.
Restricted Stock Units.The grant of a restricted stock unit does not itself generally result in taxable income. Instead, the participant is taxed upon vesting (and a corresponding deduction is generally available to the Company), unless he or she has made a proper election to defer receipt of the shares (or cash if the award is cash settled) under Section 409A of the Code. If the shares delivered are restricted for tax purposes, the participant will instead be subject to the rules described above for restricted stock.
Section 162(m). Stock options, SARs, and certain performance awards under the Amended Plan are generally intended to be exempt or eligible for exemption from the deductibility limits of Section 162(m) of the Code. However, the Board will have discretionary authority to provide compensation that is not exempt from the limits on deductibility under Section 162(m) of the Code.
Certain Change of Control Payments. Under Section 280G of the Code, the vesting or accelerated exercisability of options or the vesting and payments of other awards in connection with a change of control of a corporation may be required to be valued and taken into account in determining whether participants have received compensatory payments, contingent on the change in control, in excess of certain limits. If these limits are exceeded, a substantial portion of amounts payable to the participant, including income recognized by reason of the grant, vesting or exercise of awards may be subject to an additional 20% federal tax and may be non-deductible to the Company.
New Plan Benefits
Because future awards under the Amended Plan will be granted in the discretion of the Board or the Compensation Committee, the type, number, recipients, and other terms of such awards cannot be determined at this time.
The following table sets forth stock options and performance shares that were approved by the Compensation Committee to the persons and groups named below under the Amended Plan in March 2016, subject to receiving the requisite approval of stockholders of this Proposal No. 3. Should such stockholder approval not be obtained, then these grants under the Amended Plan will be rescinded. The number of performance shares included in the table below assumes that target performance is achieved. A participant can receive between 50% and 150% of the target award based on achievement of share price goals (between $10 and $20 per share) over a three-year performance period. Stock options vest over a three-year period, with one-third vesting on the one-year anniversary of the grant date and the remainder vesting quarterly thereafter.
Name and Position | Number of Stock Options | Number of Performance Shares | ||||||
Garo H. Armen, Ph.D.,Chief Executive Officer | 555,000 | 132,500 | ||||||
C. Evan Ballantyne,Chief Financial Officer | 75,000 | 14,000 | ||||||
Christine M. Klaskin,Vice President, Finance | 30,000 | 13,500 | ||||||
Ozer Baysal,Chief Business Officer | 40,000 | 13,500 | ||||||
Robert B. Stein, Ph.D.,President, Research & Development | 250,000 | 34,000 | �� | |||||
Karen H. Valentine,Chief Legal Officer and General Counsel | 140,000 | 27,500 | ||||||
All executive officers as a group | 1,090,000 | 235,000 | ||||||
All non-executive directors as a group | — | — | ||||||
All non-executive officer employees as a group | 830,000 | 199,000 |
Vote Required
To approve Proposal 3, stockholders holding a majority of Agenus common stock present or represented by proxy at the 2016 Annual Meeting and voting on the matter must vote FOR Proposal 3. Abstentions and “broker non-votes” will not be counted as votes cast or shares voting on Proposal 3 and will have no effect on the vote.
The Board of Directors recommends a vote FOR Proposal 3.
PROPOSAL 4—TO APPROVE OUR 2016 EXECUTIVE INCENTIVE PLAN
On April 8, 2016, the Board adopted, subject to stockholder approval, the Agenus Inc. 2016 Executive Incentive Plan (the “EIP”). Under the EIP, executive officers and other key employees of the Company may receive short-term incentive compensation awards, subject to the satisfaction of specified performance criteria and other conditions over a performance period specified by the Compensation Committee.
Reasons for Seeking Stockholder Approval
We are requesting that stockholders approve the EIP to enable us to grant, if desired, short-term incentive compensation awards that are intended to qualify as exempt “performance-based compensation” under Section 162(m) of the Code (and therefore not be subject to the Section 162(m) limits on deductibility of compensation paid to certain of our executive officers). As described in further detail in Proposal No. 3 above, Section 162(m) of the Code disallows a deduction to any publicly held corporation and its affiliates for certain employee compensation that exceeds $1 million. However, compensation that satisfies the requirements of an exception for “qualified performance-based compensation” is not subject to this deduction limitation. For compensation awarded under a plan to fit within this exception under Section 162(m), among other things, the material terms of the related performance goals must be disclosed to and approved by the corporation’s shareholders not less frequently than every five years. Under Section 162(m) of the Code, the material terms include the class of eligible employees, a description of the business criteria on which the performance goals may be based and the maximum amount that can be paid to any participant for a specified period. For the EIP, these terms are described below under “Eligibility,” “Payment Limits” and “Performance Criteria.” We are asking stockholders for this approval so that we may grant, if desired, performance-based cash awards that are intended to be exempt from the tax deduction limitations of Section 162(m) to executive officers whose compensation is subject to such limitations. Although stockholder approval is one of the requirements of the exception to the deductibility limits under Section 162(m), even with stockholder approval, the Compensation Committee cannot guarantee that awards under the EIP will be deductible as qualified performance-based compensation under Section 162(m) of the Code.
Summary of the EIP
The following is a brief summary of the material terms of the EIP. A copy of the EIP is attached as Appendix C to this proxy statement, and we urge stockholders to read it in its entirety. The following description of certain features of the EIP is qualified in its entirety by reference to the full text of the EIP.
Administration. The EIP will be administered by the Compensation Committee, who has the authority to, among other things, interpret the EIP and awards, determine eligibility for and the terms and conditions of awards, and generally do all things necessary to administer the plan. Any interpretation or decision by the Compensation Committee with regard to the EIP or an award is final and conclusive.
Eligibility. Executive officers and other key employees of the Company and our affiliates will be selected from time to time by the Compensation Committee to participate in the EIP. As of April 8, 2016, six executive officers and nine other key employees would be eligible to participate in the EIP.
Awards. The Compensation Committee will select the participants who will receive awards, establish the performance period and performance criteria applicable to the award, the amount or amounts payable if the performance criteria are achieved, and such other terms and conditions as the Compensation Committee deems appropriate. The EIP permits the grant of awards that are intended to qualify as exempt performance-based compensation under Section 162(m) as well as awards that are not intended to so qualify.
Performance Criteria. Awards under the EIP will be made based on, and subject to achieving, “performance criteria” over a specified performance period, as established by the Compensation Committee. Performance
criteria with respect to those awards that are intended to qualify as “performance-based compensation” for purposes of Section 162(m) of the Code are limited to objectively determinable measure(s) of performance relating to any or any combination of the following (measured either absolutely or comparatively (including, without limitation, by reference to an index or indices or a specified peer group or a select group of companies) and determined on a consolidated basis or, as the context permits, on a divisional, subsidiary, line of business, project or geographical basis or in combinations thereof and subject to such adjustments, if any, as the Compensation Committee specifies, consistent with the requirements of Section 162(m) of the Code): sales; revenues; assets; expenses; earnings before or after deduction for all or any portion of interest, taxes, depreciation, amortization or equity expense, whether or not on a continuing operations or an aggregate or per share basis; return on equity, investment, capital, capital employed or assets; one or more operating ratios; operating income or profit, including on an after-tax basis; net income; debt levels or reduction, leverage ratios or credit rating; market share; capital expenditures; cash flow (including, but not limited to, operating cash flow and free cash flow); stock price; stockholder return; sales of particular products or services; customer acquisition, expansion and retention; regulatory compliance; regulatory or other filings or approvals; research, development, clinical, regulatory, manufacturing or product development milestones; discovery, preclinical or clinical stage scientific discoveries, objectives or inventions; manufacturing or process developments; acquisitions and divestitures (in whole or in part); new or expanded joint ventures, strategic alliances, licenses, collaborations or partnerships, or achievement of milestones under any of the foregoing; spin-offs, split-ups and the like; reorganizations; recapitalizations, restructurings, financings (issuance of debt or equity), refinancings or other capital raising transactions; receipt of alternative financing; implementation or completion of critical projects; employee satisfaction; achievements in strengthening the Company’s intellectual property position; recruiting and maintaining personnel; transactions that would constitute a change of control; or any combination of the foregoing.
Provided that the Compensation Committee has specified at least one performance criterion intended to qualify the award as performance-based under Section 162(m), it may specify other performance goals or criteria as a basis for its exercise of negative discretion with respect to the award. To the extent consistent with the requirements of Section 162(m), the Compensation Committee may establish that in the case of any award intended to qualify as exempt performance-based compensation under Section 162(m), that one or more of the performance criteria applicable to such award be adjusted in an objectively determinable manner to reflect events (for example, the impact of charges for restructurings, discontinued operations, mergers, acquisitions, and other unusual or infrequently occurring items, and the cumulative effects of tax on accounting changes, each as defined by U.S. generally accepted accounting principles) occurring during the performance period of such award that affect the applicable performance criteria. With respect to awards other than Section 162(m) awards, the Compensation Committee may provide that such award, and any related performance criteria, will be adjusted in any manner prescribed by the Compensation Committee in its sole discretion.
Payment. A participant will be entitled to payment under an award only if all conditions to payment have been satisfied in accordance with the EIP and the terms of the award. Following the close of a performance period, the Compensation Committee will determine (and, to the extent required by Section 162(m), certify) whether and to what extent the applicable performance criteria have been satisfied. The Compensation Committee will then determine the actual payment, if any, under each award. The Compensation Committee has the sole and absolute discretion to reduce (including to zero) the actual payment to be made under any award. The Compensation Committee will determine the payment dates for awards under the EIP. Generally, all payments under the EIP will be made, if at all, no later than March 15 of the calendar year following the calendar year in which the performance period ends, provided that the Compensation Committee may permit a participant to defer payment of an award in accordance with Section 409A of the Code.
Payment Limits. The maximum payment to any participant under the EIP in any fiscal year will in no event exceed $1,470,000.
Recovery of Compensation. Awards granted under the EIP are subject to forfeiture, termination and rescission, and a participant will be obligated to return any payments received in respect of awards to the extent
provided by the Compensation Committee in connection with a breach by the participant of the EIP, an award or any non-competition, non-solicitation, confidentiality or similar covenant or agreement or an overpayment due to inaccurate financial data. The Compensation Committee may also recover awards pursuant to any applicable Company clawback or recoupment policy or as otherwise required by law or applicable stock exchange listings.
Effective Date; Amendment and Termination. If approved by our stockholders, the EIP will be effective for performance periods beginning on or after January 1, 2017. The Compensation Committee may amend the EIP at any time, provided that any amendment will be approved by our stockholders if required by Section 162(m). The Compensation Committee may terminate the EIP at any time.
New Plan Benefits.
Because awards granted under the EIP will be based on the discretion of the Compensation Committee and any awards granted under the EIP will be based on the achievement of future performance criteria that will be established by the Compensation Committee, we cannot determine the amounts that will be earned in the future under the EIP.
Vote Required
To approve Proposal 4, stockholders holding a majority of Agenus common stock present or represented by proxy at the 2016 Annual Meeting and voting on the matter must vote FOR Proposal 4. Abstentions and “broker non-votes” will not be counted as votes cast or shares voting on Proposal 4 and will have no effect on the vote.
The Board of Directors recommends a vote FOR Proposal 4.
PROPOSAL 5—TO RATIFY THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2016
Our Audit and Finance Committee has selected KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016. Although stockholder approval of the selection of KPMG LLP is not required by law, our Board believes that it is advisable to give stockholders an opportunity to ratify this selection.
If stockholders do not approve this proposal at the 2016 Annual Meeting, our Audit and Finance Committee will reconsider their selection of KPMG LLP. If stockholders do ratify this appointment, the Audit and Finance Committee, which has direct authority to engage our independent registered public accounting firm, may appoint a different independent registered public accounting firm at any time during the year if the Audit and Finance Committee determines that the change would be in the best interests of Agenus and our stockholders.
The Audit and Finance Committee has approved all services provided to Agenus by KPMG LLP during 2015. Representatives of KPMG LLP are expected to be present at the 2016 Annual Meeting. They will have the opportunity to make a statement if they desire to do so and will also be available to respond to appropriate questions from stockholders.
Audit Fees
Fees incurred by us for professional services rendered by KPMG LLP for the audit of the annual consolidated financial statements and of the effective operation of internal control over financial reporting, included in our Annual Report on Form 10-K, for the reviews of the consolidated financial statements included in our Forms 10-Q and for comfort letters, consents and review of registration statements were $836,100 for 2015 and $639,751 for 2014.
Audit-Related Fees
Fees paid to KPMG LLP for the audit of our 401(k) Retirement Plan were $28,000 in 2015 and $27,146 in 2014.
Tax Fees
Fees paid to KPMG LLP associated with tax compliance and tax consultation services were $15,134 in 2015 and $1,215 in 2014.
All Other Fees
We paid no other fees to KPMG LLP for 2015 or 2014.
Pre-Approval of Audit and Non-Audit Services
All of the KPMG LLP fees for 2015 and 2014 shown above were pre-approved by the Audit and Finance Committee. The Audit and Finance Committee pre-approves all audit and other permitted non-audit services provided by our independent registered public accounting firm. Pre-approval is generally provided for up to one year, is detailed as to the particular category of services and is subject to a monetary limit. Our independent registered public accounting firm and senior management periodically report to the Audit and Finance Committee the extent of services provided by the independent registered public accounting firm in accordance with the pre-approval, and the fees for the services performed to date. The Audit and Finance Committee may also pre-approve particular services on a case-by-case basis.
Vote Required
To approve Proposal 5, a majority of the votes cast by stockholders present in person or by proxy and voting on the matter must vote FOR Proposal 5. If your shares are held by your broker, bank, or nominee in “street name,” and you do not vote your shares, your broker, bank, or nominee has authority to vote your unvoted shares on Proposal 5. If the broker, bank, or nominee does not vote your unvoted shares, there will be no effect on the vote because these “broker non-votes” are not considered to be voting on the matter. Abstentions and “broker non-votes” will not be counted as votes cast or shares voting on Proposal 5, and will have no effect on the vote.
The Board of Directors recommends a vote FOR Proposal 5.
REPORT OF THE AUDIT AND FINANCE COMMITTEE
The Audit and Finance Committee of the Board consists entirely of independent directors who are not officers or employees of Agenus. The Board has adopted a written charter for the Audit and Finance Committee, the current version of which is available on our website at http://investor.agenusbio.com/corporate-governance. No material on our website is part of this proxy statement.
In the course of its oversight of the Company’s reporting process, the Audit and Finance Committee of the Board has (1) reviewed and discussed with management the Company’s audited consolidated financial statements and management’s assessment of the effectiveness of internal control over financial reporting for the fiscal year ended December 31, 2015, (2) discussed with KPMG LLP, our independent registered public accounting firm, the matters required to be discussed pursuant to Public Company Accounting Oversight Board Auditing Standard No. 16 (Communications with Audit Committees), including the quality of the Company’s accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements, and (3) discussed with KPMG LLP matters relating to its independence, including a review of audit and non-audit fees and the written disclosures and letter from KPMG LLP pursuant to applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit and Finance Committee concerning independence.
Based on the foregoing review and discussions, the Audit and Finance Committee recommended to the Board that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 for filing with the SEC.
By the Audit and Finance Committee,
Brian Corvese, Chair
Shahzad Malik, MD
Timothy R. Wright
Stockholder Proposals for 2017 Annual Meeting of Stockholders
Proposals to be included in the Company’s proxy statement. Under SEC rules, if a stockholder wants us to include a proposal in our proxy statement and form of proxy for presentation at our 2017 Annual Meeting of Stockholders, the proposal must comply with Rule 14a-8 under the Exchange Act and must also meet the advance notice requirements in our bylaws applicable to all stockholder proposals (as described in the following paragraphs).
Under our by-laws, a stockholder must follow certain procedures to nominate persons for election as directors or to introduce an item of business at an annual meeting of stockholders. Among other requirements, these procedures require any nomination or proposed item of business to be submitted in writing to our Chairman of the Board or Corporate Secretary at our principal executive offices. Assuming our 2017 Annual Meeting of Stockholders is not more than 30 days before or 30 days after June 14, 2017, if you wish to bring business before the 2017 Annual Meeting of Stockholders, you must give us written notice by December 29, 2016.
However, if at least 60 days’ notice or prior public disclosure of the date of the 2017 Annual Meeting of Stockholders is given or made and the date of the 2017 Annual Meeting of Stockholders is not within 30 days before or after June 14, 2017, notice by the stockholder must be received by the Company 45 days prior to the date of the 2017 Annual Meeting of Stockholders. If less than 60 days’ notice or prior public disclosure of the date of the 2017 Annual Meeting of Stockholders is given or made and the date of the 2017 Annual Meeting of Stockholders is not within 30 days before or after June 14, 2017, notice by the stockholder must be received by the Company no later than 15 days after the date Agenus sends notice of the 2017 Annual Meeting of Stockholders. If a stockholder fails to provide timely notice of a proposal to be presented at the 2017 Annual Meeting of Stockholders, the proxies designated by the Board will have discretionary authority to vote on the proposal.
Householding of Meeting Materials
Some banks, brokers, and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of our proxy statement or annual report may have been sent to multiple stockholders in your household. We will promptly provide a separate copy of either document to you if you contact Investor Relations at Agenus Inc., 3 Forbes Road, Lexington, Massachusetts 02421, or telephone or e-mail Investor Relations at 800-962-2436 orIR@agenusbio.com. If you want to receive separate copies of the annual report and proxy statement in the future or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker or other nominee record holders, or you may contact us.
Documents Incorporated by Reference
The 2009 Equity Incentive Plan, the DDCP and the financial statements from our Annual Report on Form 10-K for the year ended December 31, 2015 are incorporated by reference herein.
CERTIFICATE OF FIFTH AMENDMENT
TO THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
AGENUS INC.
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Title: | Chief Executive Officer |
56014118_2
A-3
SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET—www.proxyvote.com or scan the QR Barcode above AGENUS INC. Use the Internet to transmit your voting instructions and for electronic delivery of 3 FORBES ROAD information. Vote by 11:59 P.M. ET on 04/02/2024 for shares held directly and by 11:59 LEXINGTON, MA 02421 P.M. ET on 03/31/2024 for shares held in a Plan. 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/AGEN2024SM 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. Vote by 11:59 P.M. ET on 04/02/2024 for shares held directly and by 11:59 P.M. ET on 03/31/2024 for shares held in a Plan. 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. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. The Board of Directors recommends you vote FOR the following proposal: For Against Abstain 1. To approve an amendment to our Amended and Restated Certificate of Incorporation, as amended, to effect a 0 0 0 reverse stock split of our issued outstanding common stock at a ratio of 1-for-20. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. . 6 . 0 . 0 R1 _ 1 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 0000626650 partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Special Meeting: The Notice and Proxy Statement is available at www.proxyvote.com AGENUS INC. Special Meeting of Stockholders April 3, 2024 10:00 AM This proxy is solicited by the Board of Directors The undersigned stockholder(s) of Agenus Inc. (the “Company”) hereby appoint(s) Garo H. Armen, Ph.D. and Robin E. Abrams, or either of them acting singly, the attorneys and proxies of the undersigned, with full power of substitution, to vote on behalf of the undersigned all of the shares of capital stock of the Company that the undersigned is/are entitled to vote at the Special Meeting of Stockholders of the Company to be held on April 3, 2024, via live webcast at www.virtualshareholdermeeting.com/AGEN2024SM, and all adjournments thereof, hereby revoking any proxy heretofore given with respect to such shares. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED STOCKHOLDER(S). IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR THE PROPOSAL. IN THEIR DISCRETION, THE PROXIES ARE ALSO AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. PLEASE SIGN AND MAIL THIS PROXY TODAY. R1.0.0.6 _ 2 0000626650 Continued and to be signed on reverse side