(4)
| Dr. Ashworth was appointed to assure that the Board will have the necessary authority and practices in place to review and evaluate our business operations as needed and to make decisions that are independent of our management. The guidelines are also intended to align the interests of directors and management with those of our stockholders. The corporate governance guidelines set forthTABLE OF CONTENTS
certain practices the Board will follow with respect to Board composition, Board committees, Board nomination, director qualifications and evaluation of the Board and committees. The corporate governance guidelines and the charter for each committee of the Board may be viewed at www.cytomx.com.
Board Leadership Structure
Our bylaws and Corporate Governance Guidelines provide our Board with flexibility to combine or separate the positions of chairman of the Board and chief executive officer and/or the implementation of a lead director in accordance with its determination that utilizing one or the other structure would be in the best interests of the Company. The position of chief executive officer and chairman of the Board is currently held by Sean A. McCarthy, D. Phil. The Board also appointed Matthew P. Young to serve as Lead Independent Director of the Board. In that role, Mr. Young presides over the executive sessions of the Board in which Dr. McCarthy does not participate, serves as a liaison to Dr. McCarthy and management on behalf of the Board and performs such other duties and exercises such other powers as may from time to time be assigned by the bylaws or the Board.
Our Board has concluded that our current leadership structure is appropriate at this time. However, our Board will continue to periodically review our leadership structure and may make such changes in the future as it deems appropriate.
Risk Oversight
The Board monitors and assesses key business risks directly through deliberations of the Board and also by way of delegation of certain risk oversight functions to be performed by committees of the Board. The Board regularly reviews and assesses, among other matters, the following important areas that present both opportunities and risk to the Company’s business:
review and approval of the Company’s annual operating and capital spending plan and review of management’s updates as to the progress against the plan and any related risks and uncertainties;
periodic consideration of the balance of risk and opportunities presented by the Company’s medium to long-term strategic plan and the potential implications of success and failure in one or more of the Company’s key drug development programs;
regular consideration of the risks and uncertainties presented by alternative clinical development strategies;
regular review of the progress and results of the Company’s clinical development programs and early research efforts, including, without limitation, the strengths, weaknesses, opportunities and threats for these programs;
periodic review and oversight of any material outstanding litigation or threatened litigation;
review and approval of material collaboration partnerships for the further development and commercial exploitation of the Company’s proprietary drug development programs and technologies;
regular review and approval of the annual corporate goals and an assessment of the Company’s level of achievement against these established goals;
regular review of the Company’s financial position relative to the risk and opportunities for the Company’s business;
periodic review of the Company’s intellectual property estate;
review and assessment of succession planning and performance concerns for the Section 16 officers;
review and approval of safety protocols and operational guidelines recommended by the Company’s COVID-19 Transition, Readiness, and Communications team; and
periodic review of the Company’s compensation programs.
The discussion above of risk oversight matters reviewed by the Board is intended to be illustrative only and not a complete list of all important matters reviewed and considered by the Board in providing oversight and direction for the Company’s senior management and business.
The risk oversight function of the Board is also administered through various Board committees. The Audit Committee oversees the management of financial, accounting, internal controls, disclosure controls and the
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engagement arrangement and regular oversight of the independent auditors. The Audit Committee also periodically reviews the Company’s investment policy for its cash reserves and fraud monitoring practices and procedures, including the maintenance and monitoring of a whistleblower hotline.
The Compensation Committee is responsible for the design and oversight of the Company’s compensation programs. The Compensation Committee also regularly reviews and reports to the Board on succession planning for the chief executive officer and certain other select senior management positions.
The Nominating and Corporate Governance Committee periodically reviews the Company’s corporate governance practices, including certain risks that those practices are intended to address. The Nominating and Corporate Governance Committee periodically reviews the composition of the Board to help ensure that a diversity of skills and experiences is represented by the members of the Board taking into account the stage of growth of the Company and its strategic direction, as well as identifies, evaluates and nominates qualified candidates.
In carrying out their risk oversight functions, the Board and its committees routinely request and review management updates, reports from the independent auditors and legal and regulatory advice from outside experts, as appropriate, to assist in discerning and managing important risks that may be faced by the Company. The Board is committed to continuing to ensure and evolve its risk oversight practices as appropriate given the stage of the Company’s evolution as a drug development Company and the fast-paced changes in the biopharmaceutical industry.
Independence of the Board of Directors
Under the rules of The Nasdaq Stock Market LLC (“Nasdaq”), independent directors must comprise a majority of a listed company’s board of directors within twelve months from the date of listing. In addition, Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees be independent. Audit committee members must also satisfy additional independence criteria set forth in Rule 10A-3 under the Exchange Act, and in Nasdaq Rule 5605(c)(2)(A). Under Nasdaq rules, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
To be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in their capacity as a member of the audit committee, the board of directors or any other board committee, accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries or be an affiliated person of the listed company or any of its subsidiaries.
Our Board has undertaken a review of its composition, the composition of its committees and the independence of each director. Based upon information requested from and provided by each director concerning their background, employment and affiliations, including family relationships, our Board determined that none of our directors, other than Dr. McCarthy, has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the Nasdaq rules. Dr. McCarthy is not considered independent because he is an employee of the Company. Our Board determined that Matthew P. Young, a member of our Audit Committee, John Scarlett, M.D., a member of our Audit Committee and Compensation Committee, James R. Meyers, a member of our Compensation Committee and Nominating and Corporate Governance Committee, Elaine V. Jones, Ph.D., a member of our Nominating and Corporate Governance Committee, Halley Gilbert, a member of our Audit Committee and Nominating and Corporate Governance Committee, and Mani Mohindru, Ph.D., a member of our Compensation Committee satisfy the independence standards for such committees established by applicable SEC and the Nasdaq rules, including, with respect to Ms. Gilbert, Dr. Scarlett and Mr. Young, the heightened independence criteria applicable to the Audit Committee, as set forth in Rule 10A-3 and Nasdaq Rule 5605. In making these determinations, our Board considered the relationships that each non-employee director has with us and all other facts and circumstances our Board deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director.
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Information Regarding the Committees of the Board of Directors
Our Board has three regularly constituted committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. The following table provides current membership information for each of the Board committees:
Sean A. McCarthy, D. Phil. | | | — | | | — | | | — | Mani Mohindru, Ph.D.(2) | | | — | | | X | | | — | Frederick W. Gluck | | | — | | | — | | | — | John Scarlett, M.D. | | | X | | | X(1) | | | — | Matthew P. Young | | | X(1) | | | — | | | — | James R. Meyers | | | X | | | X | | | | Elaine V. Jones, Ph.D. | | | — | | | — | | | X | Halley Gilbert | | | X | | | — | | | X(1) | Total meetings in 2020 | | | 4 | | | 6 | | | 4 |
(1)
| Committee chairperson. |
(2)
| Dr. Mohindru was appointed to our Board in December 2020.September 2021. |
Below is a description of each committee of our Board. Audit Committee The Audit Committee of the Board oversees our corporate accounting and financial reporting process. For this purpose, the Audit Committee performs several functions. The responsibilities of the Audit Committee include, among other things: appointing, approving the compensation of and assessing the independence of our independent registered public accounting firm; TABLE OF CONTENTS pre-approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm; reviewing annually a report by the independent registered public accounting firm regarding the independent registered public accounting firm’s internal quality control procedures and various issues relating thereto; reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures; coordinating the oversight and reviewing the adequacy of our internal control over financial reporting with both management and the independent registered public accounting firm; establishing policies and procedures for the receipt and retention of accounting related complaints and concerns, including a confidential, anonymous mechanism for the submission of concerns by employees; periodically reviewing legal compliance matters, including any securities trading policies, periodically reviewing significant accounting and other financial risks or exposures to our company and reviewing and, if appropriate, approving all transactions between our company and any related party (as described in Item 404 of Regulation S-K promulgated under the Exchange Act); establishing policies for the hiring of employees and former employees of the independent registered public accounting firm; consulting with management on the establishment of procedures and internal controls to address cyber security related risks; and preparing the Audit Committee report required by SEC rules to be included in our annual proxy statement. The Audit Committee has the power to investigate any matter brought to its attention within the scope of its duties and will have the authority to retain counsel and advisors to fulfill its responsibilities and duties. TABLE OF CONTENTS
The Audit Committee has the authority to retain special legal, accounting or other consultants to advise the committee as it deems necessary, at the Company’s expense, to carry out its duties and to determine the compensation of any such advisors. The members of the Audit Committee are Matthew P. Young, John Scarlett, M.D. and Halley Gilbert. Mr. Young serves as the chairperson of the committee. Our Board has determined that each of Mr. Young, Dr. Scarlett and Ms. Gilbert are “independent” for Audit Committee purposes as that term is defined in the applicable rules of the SEC and The Nasdaq Global Select Market. Our Board has designated Mr. Young as an “audit committee financial expert” as defined under the applicable rules of the SEC and has determined that Mr. Young has the requisite financial sophistication as defined under the applicable rules and regulations of Nasdaq. The Audit Committee has adopted a written Audit Committee charter that satisfies the applicable standards of the SEC and Nasdaq, and which is available on our corporate website at www.cytomx.com. Compensation Committee The Compensation Committee of the Board reviews the type and level of compensation for directors, officers, employees and compensation consultants of the Company, recommends compensation actions to the Board and administers the variable compensation programs to be adopted by the Company. The responsibilities of the Compensation Committee include, among other things: reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer; evaluating the performance of our chief executive officer in light of such corporate goals and objectives and approving the compensation of our chief executive officer; reviewing and approving the compensation of our other executive officers; reviewing our compensation, welfare, benefit and pension plans and similar plans; reviewing and making recommendations to the Board with respect to director compensation; and preparing for inclusion in our proxy statement the report, if any, of the compensation committee required by the SEC. TABLE OF CONTENTS The Compensation Committee has the power to investigate any matter brought to its attention within the scope of its duties and will have the authority to retain counsel and advisors to fulfill its responsibilities and duties. The Compensation Committee has the sole authority to retain or replace, at the Company’s expense, any independent counsel, compensation and benefits consultants and other outside experts or advisors as the committee believes to be necessary or appropriate. The committee may also utilize the services of the Company’s regular legal counsel or other advisors to the Company. The Compensation Committee has engaged Radford, an Aon Hewitt Company, since 2015 as a compensation consultant to evaluate non-employee director compensation and compensation in comparison to industry peers. For additional information on the role of the compensation consultant and the Chief Executive Officer please see “Compensation Discussion and Analysis – Process for Setting Executive Compensation.” The members of the Compensation Committee are John Scarlett, M.D., James Meyers and Mani Mohindru, Ph.D. Dr. Scarlett serves as the chairperson of the committee. Our Board has determined that each member of the Compensation Committee is an independent director for Compensation Committee purposes as that term is defined in the applicable Nasdaq rules, and is a “non-employee director” within the meaning of Rule 16b-3(d)(3) promulgated under the Exchange Act. The Compensation Committee has adopted a written Compensation Committee charter that satisfies the applicable standards of the SEC and Nasdaq, and which is available on our corporate website at www.cytomx.com. Nominating and Corporate Governance Committee The responsibilities of the Nominating and Corporate Governance Committee include, among other things: identifying individuals qualified to become members of the Board; recommending to the Board the persons to be nominated for election as directors and to each committee of the Board; TABLE OF CONTENTS
annually reviewing our corporate governance guidelines; overseeing management’s handling of environmental, social and governance (“ESG”) matters of importance to the Company; and monitoring and evaluating the performance of the Board and leading the board in an annual self-assessment of its practices and effectiveness. The Nominating and Corporate Governance Committee has the power to investigate any matter brought to its attention within the scope of its duties and will have the authority to retain counsel and advisors to fulfill its responsibilities and duties. The Nominating and Corporate Governance Committee may retain, at the Company’s expense, any independent counsel, experts or advisors that the committee believes to be desirable and appropriate. The committee may also use the services of the Company’s regular legal counsel or other advisors to the Company. The Nominating and Corporate Governance Committee is comprised of Halley Gilbert, Elaine V. Jones, Ph.D., and James R. Meyers. Ms. Gilbert serves as the chairperson of the committee. Our Board has determined that Ms. Gilbert, Dr. Jones and Mr. Meyers are independent directors for Nominating and Corporate Governance Committee purposes as that term is defined in the applicable rules of The Nasdaq Global Select Market. The Nominating and Corporate Governance Committee has adopted a written committee charter that satisfies the applicable standards of the SEC and Nasdaq, and which is available on our corporate website at www.cytomx.com. The Nominating and Corporate Governance Committee reviews candidates for director nominees in the context of the current composition of the Board, our operating requirements and the long-term interests of stockholders. In conducting this assessment, the Nominating and Corporate Governance Committee values diversity of abilities, experience, perspective, education, gender, background, race and national origin, and such other factors as it deems appropriate given our current needs and those of our Board to maintain a balance of knowledge, experience and capability. Additionally, in evaluating and identifying potential nominees, the Nominating and Corporate Governance Committee evaluates skills and backgrounds which may complement those already serving, or provide additional expertise or perspective not already present on our Board. TABLE OF CONTENTS Although the Company has not adopted specific targets, the Nominating and Corporate Governance Committee considers the level of representation of women and other diverse candidates on our Board when making recommendations for nominees to our Board. Board Diversity Matrix (As of March 31, 2021)2022) | | | Female | | Male | | Non-Binary | | Did Not Disclose | | | Female | | Male | | Non-Binary | | Did Not Disclose | Gender Identity | | 3 | | 5 | | 0 | | 0 | | 3 | | 5 | | 0 | | 0 | Demographic Background
| | | | | | | | | | | | | | | | | American Indian or Alaska Native | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | Asian or Asian American | | 1 | | 0 | | 0 | | 0 | | 1 | | 0 | | 0 | | 0 | Black or African American | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | Hispanic, Latino, Latina, or Latinx | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | Middle Eastern or Northern African | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | Native Hawaiian or Other Pacific Islander | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | White | | 2 | | 5 | | 0 | | 0 | | 2 | | 5 | | 0 | | 0 | Two or more races/ ethnicities | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | LGBTQ+ | | | 0 | | 0 | | 0 | | 0 | Did not disclose | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | LGBTQ+ | | 0 | | 0 | | 0 | | 0 | |
The committee also periodically reviews the overall effectiveness of the Board, including Board attendance, level of participation, quality of performance, self-assessment reviews and any relationships or transactions that might impair director independence. In the case of new director candidates, the committee will also determine whether the nominee must be independent for Nasdaq purposes, which determination is based upon applicable Nasdaq listing standards, applicable SEC rules and regulations and the advice of counsel, if necessary. The committee may also use its network of contacts to compile a list of potential candidates and engage, if it deems appropriate, a professional search firm. The committee conducts any appropriate and necessary inquiries into the backgrounds and TABLE OF CONTENTS
qualifications of possible candidates after considering the function and needs of the board. The committee meets to discuss and consider such candidates’ qualifications and then selects a nominee for recommendation to the Board by majority vote. The Nominating and Corporate Governance Committee will consider for nomination any qualified director candidates recommended by our stockholders. Any stockholder who wishes to recommend a director candidate is directed to submit in writing the candidate’s name, biographical information, relevant qualifications and other information required by our bylaws to our Secretary at our principal executive offices before the deadline set forth in our bylaws. All written submissions received from our stockholders will be reviewed by the Nominating and Corporate Governance Committee at the next appropriate meeting. The Nominating and Corporate Governance Committee will evaluate any suggested director candidates received from our stockholders in the same manner as recommendations received from management, committee members or members of our Board. Stockholder Communications with the Board of Directors Any holder of our securities may contact the Board or a specified individual director by writing to the attention of the Board or a specified individual director and sending such communication to our Corporate Secretary at our executive offices as identified in this Proxy Statement. Each communication from a security holder should include the following information in order to permit security holder status to be confirmed and to provide an address to forward a response if deemed appropriate: The name, mailing address, and telephone number of the security holder sending the communication. The number and type of our securities owned by such security holder. If the security holder is not a record owner of our securities, the name of the record owner of our securities beneficially owned by the security holder. Our Corporate Secretary will forward all appropriate communications to the Board or individual members of the Board as specified in the communication. Our Corporate Secretary may (but is not required to) review all correspondence addressed to the Board, or any individual member of the Board of Directors, for any inappropriate TABLE OF CONTENTS correspondence more suitably directed to management. The Board, a committee of the Board, or individual directors, as appropriate, will consider and review carefully any communications from stockholders forwarded by our Corporate Secretary. Additionally, beginning in the fall of 20202021 and in the first quarter of 2021,continuing into 2022, we engaged in an effort to contact certain of our institutional stockholders to listen to their views on corporate issues, including environmental, social and governance matters. We engaged in valuable dialogue on matters of interest to those stockholders and to the Company. We intend to continue to conduct activities directed at stockholder engagement in the future. Material Changes to Nominee Recommendation Procedures There were no material changes to the procedures by which stockholders may recommend nominees to our Board in 2020.2021. Family Relationships There are no family relationships among any of our directors or executive officers. Code of Business Conduct and Ethics We have adopted a code of business conduct and ethics that applies to all employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The code of business conduct and ethics is available on our website at www.cytomx.com. Amendments to, and waivers from, the code of business conduct and ethics that apply to any director, executive officer or persons performing similar functions will be disclosed at the website address provided above and, to the extent required by applicable regulations, on a Current Report on Form 8-K filed with the SEC. Other Policies and Considerations Derivatives Trading, Hedging, and Pledging Policies The Company does not permit our employees or directors to engage in hedging transactions with respect to Company equity securities. TABLE OF CONTENTS REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS The Compensation Committee reviewed and discussed with management the “Compensation Discussion and Analysis” required by Item 402(b) of Regulation S-K and included in this Proxy Statement. Based on those reviews and discussions, the Compensation Committee recommended to the Board that the “Compensation Discussion and Analysis” be included in this Proxy Statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.2021. | | | Compensation Committee | | | | John Scarlett, M.D. (Chairman) | | | | Mani Mohindru Ph.D. | | | | James R. Meyers |
TABLE OF CONTENTS COMPENSATION RISK ASSESSMENT Consistent with the SEC’s disclosure requirements, the Compensation Committee has assessed our compensation programs for all employees. The Compensation Committee has overseen the establishment of a number of controls that address compensation-related risk and serve to mitigate such risk. As a result, the Compensation Committee has concluded that our compensation policies and practices do not encourage excessive or unnecessary risk-taking and are not reasonably likely to have a material adverse effect on the Company. TABLE OF CONTENTS Director Compensation Table—Year Ended December 31, 20202021 The following table presents information regarding the compensation paid to members of our Board, except for Sean A. McCarthy, D. Phil., who is also our president, chief executive officer and chairman of the Board. The compensation paid to Mr. McCarthy is set forth in the section titled “Executive Compensation” in this proxy statement. Dr. McCarthy was not entitled to receive additional compensation for his service as a director or chairman. Name | | Fees earned or
paid in cash
($) | | Option awards(1)
($) | | Total
($) | | Fees earned or
paid in cash
($) | | Option awards(1)
($) | | Total
($) | Mani Mohindru, Ph.D.(2) | | 1,739 | | 163,232 | | 164,971 | | 46,000 | | 79,854 | | 125,854 | Frederick W. Gluck | | 50,500 | | 96,912 | | 147,412 | | 40,000 | | 79,854 | | 119,854 | John Scarlett, M.D.(2) | | 59,500 | | 96,912 | | 156,412 | | 59,500 | | 79,854 | | 139,354 | Matthew P. Young | | 80,000 | | 96,912 | | 176,912 | | 80,000 | | 79,854 | | 159,854 | James R. Meyers | | 51,125 | | 96,912 | | 148,037 | | 50,000 | | 79,854 | | 129,854 | Elaine V. Jones, Ph.D. | | 44,000 | | 96,912 | | 140,912 | | 44,000 | | 79,854 | | 123,854 | Halley Gilbert | | 31,017 | | 306,964 | | 337,981 | | 55,500 | | 79,854 | | 135,354 | Charles S. Fuchs, M.D., M.P.H.(3) | | 46,000 | | 96,912 | | 142,912 | | Alan Ashworth, Ph.D (3) | | | 10,217 | | 108,704 | | 118,921 | Charles S. Fuchs, M.D., M.P.H.(4) | | | 11,500 | | — | | — |
(1)
| Pursuant to applicable SEC executive compensation disclosure rules, except for Dr. Mohindru,Ashworth and Dr. Fuchs, the amount reported in this column reflects the grant of 20,000 options granted on June 17, 2020 to16, 2021 o each director named above, with a grant date fair value in accordance with Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“FASB ASC Topic 718”) of $96,912. Ms. Gilbert,$79,854. . Dr. Ashworth, who joined the Board in April 2020,September 2021, was also granted an option to purchase 40,000 optionsshares on April 27, 2020September 29, 2021 with a grant date fair value in accordance with FASB ASC Topic 718 of $ 210,052 in$108,704in connection with her appointment to the Board. Dr. Mohindru, who joined the Board in December 2020, was granted 40,000 shares on December 16, 2020 with a grant date fair value in accordance with FASB ASC Topic 718 of $163,232 in connection with herhis appointment to the Board. For a discussion of the assumptions and methodologies used to calculate these amounts, please see the discussion of option awards contained in the Stock-based Compensation sub-section under Note 14 to our financial statements included in our annual report on Form 10-K for the year ended December 31, 2020.2021. As of December 31, 2020,2021, our non-employee directors held outstanding options to purchase shares of our common stock as follows: Mr. Gluck, 76,000;96,000; Dr. Scarlett, 90,000;110,000; Mr. Young, 102,895;122,895; Mr. Meyers, 62,000;82,000; Dr. Jones, 62,000;82,000; Ms. Gilbert, 60,000;80,000; Dr. Mohindru, 40,000;60,000; and Dr. Fuchs, who resigned from our Board in March 2021, 76,000.Ashworth, 40,000. Other than these options, none of our non-employee directors held any other equity awards in the Company on that date. |
(2)
| Dr. MohindruScarlett is not standing for re-election at the 2022 Annual Meeting of Stockholders. |
(3)
| Dr. Ashworth was appointed to our Board on December 16,2020September 29, 2021 and received a pro-rated retainer for 2020.2021. |
(3)(4)
| Dr. Fuchs resigned from our Board on March 31, 2021. The fee earned reflects his prorated retainer for serving on the Board and the Compensation Committee up to his resignation. As of December 31, 2021, Dr. Fuchs held 56,000 held outstanding options to purchase shares of our common stock. We entered into a consulting agreement with Dr. Fuchs effective April 1, 2021 pursuant to which Dr. Fuchs agreed to serve as an advisor and provide consulting services to the Company on corporate governance, strategy and development and on medical matters for a fee of $300 per hour. Dr. Fuchs did not perform any consulting services for the Company during 2021 and therefore no fees were rendered. |
TABLE OF CONTENTS Director Compensation During 2020,2021, our Board members were compensated pursuant to our non-employee director compensation program, which provides for cash and equity-based compensation for service on the Board and its committees. Under the program, our non-employee directors receive the following cash compensation for their service on the Board and its committees: Annual Retainer for Board Membership | | | $40,000 | Additional Retainer for:
| | | | Chairperson of the Board | | | $30,000 | Chairperson of the Audit Committee | | | $15,000 | Member of the Audit Committee | | | $7,500 | Chairperson of the Compensation Committee | | | $12,000 | Member of the Compensation Committee | | | $6,000 | Chairperson of the Nominating & Governance Committee | | | $8,000 | Member of the Nominating & Governance Committee | | | $4,000 | Lead Independent Director(1) | | | $25,000 |
(1)
| Mr. Young was reappointed as the Lead Independent Director of our Board in March 2021.2022. |
In 2020,2021, the annual non-employee director cash compensation was paid quarterly in arrears. Under the program, non-employee directors also receive reimbursement for out-of-pocket expenses incurred in connection with attendance at meetings of our Board. TABLE OF CONTENTS
Under the non-employee director stock option program in 2020,2021, new non-employee members of the Board are automatically granted an initial option to purchase 40,000 shares of our common stock on the date such person first becomes a non-employee director. In March of 2022, the Company authorized an increase of the initial option grant to non-employee directors to 50,000 shares of our common stock. The initial grant will vest with respect to 1/36th of the shares subject to the option on each monthly anniversary measured from the grant date, such that 100% of the shares subject to the option will be fully vested and exercisable on the third anniversary of the vesting commencement date, subject to the director’s continued service to us through the applicable vesting date. On the date of each annual meeting of our stockholders, each non-employee director (other than any director receiving an initial grant on the date of such annual meeting) who is then serving as a non-employee director and who will continue as a non-employee director following the date of such annual meeting will automatically be granted an option to purchase 20,000 shares of our common stock. This annual grant will vest in full on the earlier of: (i) the date of the next annual meeting of our stockholders or (ii) the first anniversary of the date of grant, subject to the director’s continuous service to us through the applicable date. In March of 2022, the Company authorized an increase of the annual grant to non-employee directors to 25,000 shares of our common stock. The exercise price of all stock option grants is equal to the closing price of CytomX common stock as reported by the Nasdaq on the date of grant. In addition, upon a change in control, the vesting of all equity awards held by our non-employee directors will accelerate in full. TABLE OF CONTENTS The following sets forth information about our executive officers as of April 19, 2021.18, 2022. Sean A. McCarthy, D. Phil. | | | President, Chief Executive Officer and Chairman of the Board
| | | 5455
| Amy Peterson, M.D. (1) | | | President, Chief Operating Officer | | | 55 | Carlos Campoy(1) | | | Senior Vice President, Chief Financial Officer | | | 5657
| Lloyd A. Rowland | | | Senior Vice President, General Counsel, Chief Compliance Officer and Secretary | | | 64
| Amy Peterson, M.D.
| | | Executive Vice President, Chief Development Officer
| | | 5465
| Alison L. Hannah, M.D.(2) | | | Senior Vice President, Chief Medical Officer | | | 5960
| Jeff Landau | | | Senior Vice President, Chief Business Officer, and Head of Strategy | | | 44 | Chris Ogden | | | Vice President, Finance and Accounting | | | 38 |
(1)
| Mr. CampoyDr. Peterson was appointedpromoted to histhe position atof President and Chief Operating Officer of the Company on March 23, 2020 |
(2)
| Dr. Hannah was appointed to her position at the Company onin February 3, 2020.2022. |
The following is biographical information as of April 19, 202118, 2022 for our executive officers. Sean A. McCarthy, D. Phil., President, Chief Executive Officer and Chairman of the Board Dr. McCarthy’s biographical information is included above under “Board““Proposal No.1 Election of DirectorsDirectors”.” Amy Peterson, M.D., President and Corporate Governance.”Chief Operating Officer Dr. Peterson joined CytomX in October 2019 as executive vice president and chief development officer. She was appointed to the position of President and Chief Operating Officer of CytomX in February 2022. Prior to joining CytomX, from August 2016 to May 2019, Dr. Peterson was chief medical officer of immuno-oncology at BeiGene Ltd., where she created and led a global oncology development organization with direct medical oversight and accountability of seven clinical assets in over thirty global trials in all phases of development in solid tumor indications. Prior to BeiGene, from August 2011 to July 2016, Dr. Peterson was vice president of clinical development at Medivation, where she was primarily responsible for the development of enzalutamide (XTANDI ® and talazoparib (TALZENNA ® ) in breast cancer. Previously, Dr. Peterson served as associate group medical director at Genentech from 2005 to 2011, where she was responsible for the development of early stage molecules targeting multiple major pathways in oncology. Prior to joining Genentech, Dr. Peterson was an Instructor of Medicine in Oncology at the University of Chicago, where she conducted translational research in tumor immunology in conjunction with Dr. Thomas F. Gajewski. She currently serves on the board of The American Society of Clinical Oncology’s (ASCO) Conquer Cancer Foundation. Dr. Peterson received her M.D. from Thomas Jefferson University and completed her residency in Internal Medicine at Northwestern Memorial Hospital and Fellowship in Hematology and Oncology at the University of Chicago. Dr. Peterson received her B.A. degree from Wesleyan University. Carlos Campoy, Senior Vice President, Chief Financial Officer Mr. Campoy joined CytomX as its chief financial officer in March 2020. Mr. Campoy brings over 30 years of financial and leadership experience, the majority from publicly held companies within the healthcare and biopharmaceutical sectors. Prior to joining CytomX, Mr. Campoy held the position of chief financial officer at Alder BioPharmaceuticals, Inc., a public biopharmaceutical company acquired in October 2019 by Lundbeck A/S, from December 2018 to November 2019. During his time at Alder, Mr. Campoy led the finance organization and readied the company for commercial launch of its lead program, eptinezumab. Prior to Alder, Mr. Campoy was a partner at Think Forwards, a boutique financial consulting firm, from September 2017 to December 2018. Prior to his position at Think Forwards, Mr. Campoy held the role of vice president of finance at Allergan plc from July 2014 to November 2016. Prior to joining Allergan, Mr. Campoy held senior financial leadership positions at Eli Lilly and Company from 1996 to 2014, including most recently as chief financial officer of Eli Lilly Japan K.K. Mr. Campoy holds a Certified Management Accountant (CMA) designation. Mr. Campoy received his M.B.A. in Finance and Decision Information Systems from Indiana University and his B.S. in Management from Faculdade C.C. Administracao de Tupa, in São Paulo, Brazil. Lloyd A. Rowland, Senior Vice President, General Counsel, Chief Compliance Officer and Secretary Mr. Rowland joined CytomX in May 2018 as senior vice president, general counsel, secretary and chief compliance officer. Mr. Rowland brings 25 years of biotechnology and pharmaceutical industry legal counsel and TABLE OF CONTENTS transactional experience to CytomX. From August 2014 until February 2017, Mr. Rowland held the position of senior vice president, general counsel, secretary and chief compliance officer of Xencor, a clinical-stage biopharmaceutical company developing engineered monoclonal antibodies for the treatment of autoimmune diseases, asthma and allergic diseases and cancer. Prior to Xencor, Mr. Rowland, over a twelve-year career at Amylin Pharmaceuticals, held various roles, most recently as vice president and chief compliance officer and formerly, as vice president, general counsel and secretary. During his time as general counsel at Amylin, he directed all corporate legal and compliance affairs for the company including the launch of two pharmaceutical products. Prior to joining Amylin, Mr. Rowland served as vice president, secretary and general counsel for Alliance Pharmaceutical Corp. Mr. Rowland received his B.S. degree in economics and political science from Southern Methodist University, and his J.D. from Emory University School of Law. Amy Peterson, M.D., Executive Vice President, Chief Development Officer
Dr. Peterson joined CytomX in October 2019 as executive vice president and chief development officer. Prior to joining CytomX, from August 2016 to May 2019, Dr. Peterson was chief medical officer of immuno-oncology at BeiGene Ltd., where she created and led a global oncology development organization with direct medical oversight
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and accountability of seven clinical assets in over thirty global trials in all phases of development in solid tumor indications. Prior to BeiGene, from August 2011 to July 2016, Dr. Peterson was vice president of clinical development at Medivation, where she was primarily responsible for the development of enzalutamide (XTANDI ® and talazoparib (TALZENNA ® ) in breast cancer. Previously, Dr. Peterson served as associate group medical director at Genentech from 2005 to 2011, where she was responsible for the development of early stage molecules targeting multiple major pathways in oncology. Prior to joining Genentech, Dr. Peterson was an Instructor of Medicine in Oncology at the University of Chicago, where she conducted translational research in tumor immunology in conjunction with Dr. Thomas F. Gajewski. She currently serves on the board of The American Society of Clinical Oncology’s (ASCO) Conquer Cancer Foundation. Dr. Peterson received her M.D. from Thomas Jefferson University and completed her residency in Internal Medicine at Northwestern Memorial Hospital and Fellowship in Hematology and Oncology at the University of Chicago. Dr. Peterson received her B.A. degree from Wesleyan University.
Alison L. Hannah, M.D., Senior Vice President, Chief Medical Officer Alison L.Dr. Hannah, M.D. joined CytomX as senior vice president and chief medical officer in February 2020. Prior to being appointed as our chief medical officer, Dr. Hannah was a consultant for the Company from October 2019 up to February 2020, during which time she advised the Company on matters relating to clinical development, safety and pharmacovigilance. Dr. Hannah brings 30 years of experience in the development of investigational cancer therapies having most recently served as a consultant to nearly 30 pharmaceutical and biotechnology companies between 2000 and 2020. In this capacity, Dr. Hannah has successfully filed over 40 regulatory applications for First-in-Human clinical testing, and has played significant roles in the broad marketing approval of 8 therapeutics (talazoparib, enzalutamide, defibrotide, carfilzomib, sunitinib, toceranib, irinotecan and filgrastim) including extensive experience interacting with global health and regulatory authorities. Earlier in her career, Dr. Hannah held the role of Senior Medical Director at SUGEN, Inc. (acquired by Pharmacia & Upjohn, now Pfizer) where she had oversight of clinical development, clinical operations, and pharmacovigilance. At SUGEN, she specialized in the development of tyrosine kinase inhibitors, including sunitinib (SUTENT) for kidney cancer. Dr. Hannah began her career at Quintiles, a global contract research organization, where she specialized in overseeing early to registrational-stage oncology clinical trials. Dr. Hannah currently serves on the board of NeoGenomics, a publicly traded cancer diagnostic company.company, and Rigel Pharmaceuticals, a publicly traded biotechnology company working in hematologic disorders and rare immune diseases. Dr. Hannah received her B.A in biochemistry and immunology from Harvard University and her M.D. from the University of Saint Andrews.
Jeff Landau, Senior Vice President, Chief Business Officer, and Head of Strategy Mr. Landau joined CytomX in April 2021 as senior vice president, chief business officer and head of strategy. Prior to joining CytomX, Mr. Landau held the position of senior vice president of business development, corporate and commercial strategy at Catalyst Biosciences (“Catalyst”) from January 2020 to March 2021. Mr. Landau joined Catalyst in April 2016 as their vice president of corporate development, commercial and new product strategy. Prior to his time at Catalyst, Mr. Landau served as a senior director of corporate development and global strategic marketing for Threshold Pharmaceuticals from August 2012 to April 2016. Since 2019, Mr. Landau has been a member of the board of directors of Sunshine Bio. Mr. Landau received his M.B.A. from Stanford Graduate School of Business and his B.S. In Honors in Biochemistry/Biotechnology from Virginia Polytechnic Institute. Chris Ogden, Vice President, Finance and Accounting Mr. Ogden joined CytomX in August 2021 as vice president, finance and accounting. Prior to this, Mr. Ogden served as the chief financial officer of the Lilly Diabetes division at Eli Lilly and Company (“Eli Lilly”) from May 2021 to August 2021. While at Eli Lilly, Mr. Ogden also held the positions of senior director, chief financial officer and treasurer of Lilly del Caribe, from April 2018 to May 2021, the Director of Investor Relations from June 2016 to April 2018, and the Financial Director of the U.S. Diabetes division, from January 2014 to May 2016. Mr. Ogden received his B.A. in economics from Wabash College and his M.B.A. from Harvard Business School. TABLE OF CONTENTS Compensation Discussion and Analysis Introduction The following Compensation Discussion and Analysis (“CD&A”) describes the philosophy, objectives, and structure of our executive compensation program for fiscal year 20202021 (the year ending December 31, 2020)2021). This CD&A is intended to be read in conjunction with the tables following this section, which provide further historical compensation information for our 20202021 named executive officers (“NEO’s”(NEOs”) identified below: Sean A. McCarthy, D. Phil. | | | President, Chief Executive Officer and Chairman
| Amy Peterson, M.D.(1) | | | President and Chief Operating Officer | Carlos Campoy(1) | | | Sr. Vice President, Chief Financial Officer | Lloyd A. Rowland, J.D. | | | Sr. Vice President, General Counsel, Secretary, and Chief Compliance Officer | Amy Peterson, M.D.
| | | Executive Vice President, Chief Development Officer
| Alison Hannah(2) | | | Sr. Vice President, Chief Medical Officer | W. Michael Kavanaugh, M.D.(3)
| | | Former Sr. Vice President, Chief Scientific Officer & Head of Research and Non-Clinical Development
|
(1)
| Mr. CampoyDr.Peterson was appointedpromoted to histhe position atof president and chief operating officer in February 2022. Dr. Peterson has served as the Company on March 23, 2020. |
(2)
| Dr. Hannah was appointed to her position at the Company on February 3, 2020. |
(3)
| Dr. Kavanaugh separated employment from the Company, effective December 1, 2020.company’s executive vice president and chief development officer since October 2019. |
Shareholder Engagement: Say on Pay At our 20202021 Annual Meeting of Stockholders, we conducted a stockholder advisory vote, or say-on-pay vote, on the compensation of the Named Executive Officers. At that meeting, our stockholders approved the compensation of our Named Executive Officers, as disclosed in our 20202021 annual proxy statement, with approximately 98%95% of the votes cast in favor of the proposal. Given the strong support for our executive compensation program, we broadly maintained consistency in our executive compensation program from 20192020 to 2020.2021. Executive Summary Highlights of Our Executive Compensation Practices Our Compensation Committee oversees the design and administration of our executive compensation programs to ensure that they are tied directly to performance and that they reward our executive officers in a manner consistent with shareholder interests, competitive pay practices, and applicable requirements of regulatory bodies. Our executive compensation programs are structured to reward executives for achievement of our short and long-term strategic, operational, and financial goals. The compensation paid or awarded to our executive officers is generally based on the assessment of each individual’s performance, as well as the performance of the Company as a whole, compared against individual and Company performance objectives established for the fiscal year. In addition, we seek to pay compensation at a level that is competitive with similarly situated companies within the life sciences industry. As we continue to advance our discovery and clinical development pipeline based on our Probody®platform, it is imperative that we continue to retain, motivate and reward our highly skilled executive team. TABLE OF CONTENTS Key Elements of our Compensation Program Following are the key elements of our compensation program, which also apply to all of our employees: Compensation Governance and Best Practices The Compensation Committee regularly reviews industry best practices in executive compensation. We have implemented several strong governance standards with respect to our compensation programs and practices, as follows: Pay for performance philosophy and culture Significant portion of executive pay “at risk” and equity-based Balance of pay for achievement of both short- and long-term performance Responsible use of shares under our long-term incentive program Engagement of an independent compensation consultant Performance of an annual risk assessment of our compensation programs Prohibition of hedging or pledging of our stock Annual stockholder Say-on-Pay vote Our Executive Compensation Philosophy and Objectives The overall objective of our compensation program is to support business objectives which will deliver shareholder value by attracting, retaining, and engaging the highest caliber of employees, including executive officers, while maintaining a fiscally responsible position in a highly competitive employment environment. Consistent with this overall objective, the goals of the executive compensation program are to: Attract, motivate, retain and engage the highest caliber of executive leadership Maintain a fiscally responsible suite of compensation programs in a highly competitive employment environment Link incentive award opportunities and payouts to the achievement of measurable individual and corporate goals TABLE OF CONTENTS
Align the interests of executive officers with the interests of our shareholders by tying compensation to the achievement of our short- and long-term strategic, operational and financial goals, which will serve to maximize responsible value creation TABLE OF CONTENTS To achieve these goals, we endeavor to maintain compensation plans that tie a substantial portion of executives’ overall compensation to key strategic, operational and financial goals that are supportive of our business strategy. The Compensation Committee also considers internal equity for all employees including, but not limited to, its executive officers, when determining compensation to ensure that the Company is fair in its compensation practices across all levels and to ensure that there is no discrimination in compensation practices. Process for Setting Executive Compensation Role of the Compensation Committee Appointed by our Board, Compensation Committee members are independent of management and meet the Nasdaq listing standards for independence. The Compensation Committee acts on behalf of the Board to oversee the compensation policies and practices applicable to all our employees, including the administration of our equity plans and employee benefit plans. Typically, the Compensation Committee meets at least once quarterly and with greater frequency as necessary. The agenda for each meeting is usually developed by the Chair of the Compensation Committee, in consultation with the Chief Executive Officer and other members of management, as necessary, as well as our independent compensation consultant, Radford.the Aon Human Capital Solutions practice, a division of Aon plc (formerly known as Radford) (“Aon”). The Compensation Committee also regularly meets in executive session without the presence of any employees. Historically, the Compensation Committee makes decisions related to executive compensation after conducting meetings during the fourth quarter of the calendar year and early in the first quarter of the ensuing year. Role of Independent Compensation Consultant The Compensation Committee retained the services of Radford, an Aon Company, as an independent executive compensation consultant due to its extensive analytical and compensation expertise in the biotechnology and pharmaceutical industry. In this capacity, RadfordAon has advised the Compensation Committee on compensation matters related to employee compensation, including the executive and director compensation programs. In fiscal 2020, Radford2021, Aon assisted the Compensation Committee with the following: Review and suggest changes to our compensation peer group for our executive and Board positions. Analyze competitive market compensation for our executives and directors based on recommended peer companies and broader market survey data. Develop and refine executive and director compensation programs. Provide guidance on emerging executive compensation governance issues and industry best practices. The Compensation Committee has the sole authority to engage and terminate Radford’sAon’s services, as well as to approve their compensation. RadfordAon makes recommendations to the Compensation Committee, but has no authority to make compensation decisions on behalf of the Compensation Committee or the Company. RadfordAon reports to the Compensation Committee and has direct access to the Chairperson and the other members of the Compensation Committee. In addition to advice related to the executive and director compensation programs, RadfordAon performs an analysis of all employee compensation for the Company. The Compensation Committee conducted a specific review of its relationship with RadfordAon in the past year, including consideration of the independence factors under applicable SEC and Nasdaq rules, andrules. The Committee determined that Radford’sAon is independent and that its work for the Compensation Committee did not raise any conflicts of interest. Role of Management To aid the Compensation Committee in its responsibilities, the Chief Executive Officer, with assistance from the Senior Vice President, Talent and Systems, regularly discusses compensation-related matters with the Chairperson of the Compensation Committee and then meets with the Compensation Committee to discuss these matters. The Chief Executive Officer also provides the Compensation Committee with quarterly recommendations relating to the level of achievement of our corporate goals. In addition, he presents to the Compensation Committee assessments of the performance and achievements for each of the NEOs (other than himself) for the prior year and makes TABLE OF CONTENTS
recommendations regarding compensation arrangements for these individuals. The Compensation Committee gives considerable weight to the Chief Executive Officer’s performance evaluations of the other NEOs since he has direct TABLE OF CONTENTS knowledge of the criticality of their work, performance and contributions. The Compensation Committee does not consult with any other executive officer with regard to its decisions. The Chief Executive Officer does not participate in the Compensation Committee’s or Board’s deliberations or decisions regarding his own compensation, which is approved by the independent members of the Board. Use of Market Data and Peer Group Analysis When considering executive compensation decisions, the Compensation Committee believes it is important to be informed as to current compensation practices of publicly held companies in the life sciences industry that are most similar to CytomX in terms of labor market competition, stage of product development, market capitalization and number of employees. In fiscal 2020,2021, as in prior years, the Compensation Committee referenced Radford’sAon’s market data for our peer group, along with other factors, in setting total compensation for our NEOs because industry competition for executive management is intense and the retention of our highly skilled leadership team is critical to our success. In determining market-competitive compensation for our NEOs, our Compensation Committee has not targeted a specific percentile relative to our compensation peer group for individual components of our total compensation, but rather generally used a range between the 2550th to 75th percentiles as a reference point. Competitive market data regarding compensation is just one factor considered in determining the individual compensation of executives. Other important considerations include experience, individual performance, relative scope of responsibilities compared with external market positions surveyed, internal equity and retention. 20202021 Peer Group
In the latter half of 2019,September 2020, based on the recommendation of Radford,Aon, the Compensation Committee approved a defined peer group for reference purposes when making 20202021 executive officer compensation decisions. With the assistance of Radford,Aon, the Compensation Committee considered several factors in determining the appropriate companies to be named as peers, including: Sector/Geography: US-based biotechnology companies, located in San Francisco Bay Area or other biotech “hub” markets that reflect the talent market. Stage of development: Pre-commercial companies, with a continued focus on oncology companies when possible. Market capitalization: Generally, between $200M and $1.4B.$1.5B. Number of employees: Headcount between 50 and 300 employees.under 450 employees Using our selected criteria, the following 1821 companies were identified by the Compensation Committee as the defined peer group for 20202021 executive compensation decisions (new additions denoted with *): Adverum Biotechnologies*
| | | ChemoCentryx
| | | MacroGenics
| Alder BioPharmaceuticalsAduro Biotech*
| | | Editas Medicine | | | Replimune Group*Group | Arvinas*Adverum Biotechnologies
| | | EpizymeGritstone Oncology
| | | Sangamo Therapeutics | Agenus* | | | Jounce Therapeutics* | | | Scholar Rock | Arvinas | | | Kura Oncology | | | Sutro Biopharma* | Atara Biotherapeutics | | | Five Prime TherapeuticsMacroGenics
| | | Scholar Rock*TCR2 Therapeutics*
| Audentes TherapeuticsBeyondSpring*
| | | Gritstone Oncology*Mersana Therapeutics*
| | | Voyager Therapeutics | Calithera Biosciences*Biosciences | | | Kura Oncology*NextCure*
| | | WAVE Life Sciences |
Elements of Compensation The Compensation Committee’s objective is to have compensation programs and practices that are competitive with our peers and industry through a mix of cash (base salary and annual, performance-based cash incentive bonuses) and long-term incentives (equity awards). Pay Mix Our executive compensation strategy does not include any formal policy or practice of dividing total compensation into specific, percentage-based cash and non-cash portions. Instead, the Compensation Committee uses its judgment, in consultation with Radford,Aon, in determining an appropriate mix of cash/equity, and short-term/long-long-term TABLE OF CONTENTS term performance-based compensation. The Compensation Committee believes that a substantial portion of pay for the executives should be “at risk” and incentivize long-term performance. Therefore, a majority of the annual compensation is at risk in the form of annual cash bonuses for short term performance and equity-based compensation to incentivize long term performance.
The balance among these components may change from year to year, based on corporate strategy and objectives, among other considerations. While there is no specific target mix of fixed versus performance-based or variable performance-based pay, for fiscal year 2020,2021, approximately 79%86% of our Chief Executive Officer’s total direct compensation (consisting of base salary, target annual cash incentive award and the grant date fair value of equity awards)awards and performance-based stock units (“PSUs”)) was performance-based or variable compensation and approximately 64%70% of the other NEO’s total direct compensation was performance-based or variable compensation, with the majority of compensation incentivizing long-term performance. Base Salaries The Compensation Committee’s philosophy is to maintain base salaries at a competitive level sufficient to recruit and retain individuals possessing the skills and capabilities necessary to achieve the Company’s goals over the long-term. Base salaries serve to provide fixed cash compensation to our executive officers for performing their ongoing responsibilities. Base salaries for our executive officers are approved upon joining the Company by the Compensation Committee and are based on arm’s length negotiations and a review of competitive market data. They are reviewed on an annual basis and adjusted, as appropriate, by the Compensation Committee, following consultation with RadfordAon and taking into consideration the Chief Executive Officer’s recommendations. Such annual adjustments are based on factors that may include each executive officer’s: Position and specific responsibilities. Individual performance. Level of experience. Contribution to corporate and strategic goals. Competitive market data for comparable positions at peer companies and the broader market. The Compensation Committee reviewed our NEOs’ base salaries referencing relevant compensation survey data from Radford,Aon (including peer company data), as well as taking into account our Chief Executive Officer’s assessment of individual executive performance (except with respect to his own salary). Based on this review, the Compensation Committee increased our NEOs’ base salaries in 20202021 effective as of January 1, 2020,2021, as set forth below: Sean A. McCarthy, D. Phil. | | | $575,000 | | | $595,000 | | | 3.5% | Carlos Campoy(1) | | | — | | | $465,000 | | | n/a | Lloyd A. Rowland, J.D. | | | $390,000 | | | $403,700 | | | 3.5% | Amy Peterson, M.D. | | | $500,000 | | | $503,000 | | | 0.6% | Alison Hannah, M.D.(2) | | | — | | | $450,000 | | | n/a | W. Michael Kavanaugh, M.D.(3) | | | $444,451 | | | $460,000 | | | 3.5% |
(1)
| Mr. Campoy joined the Company in March 2020. |
(2)
| Dr. Hannah joined the Company in February 2020. |
(3)
| Dr. Kavanaugh separated employment from the Company on December 2020. |
Sean A. McCarthy, D. Phil. | | | $595,000 | | | $615,825 | | | 3.5% | Amy Peterson, M.D. | | | $503,000 | | | $520,605 | | | 3.5% | Carlos Campoy | | | $465,000 | | | $477,555 | | | 2.7% | Lloyd A. Rowland, J.D. | | | $403,700 | | | $417,778 | | | 3.5% | Alison Hannah, M.D. | | | $450,000 | | | $464,400 | | | 3.2% |
Annual Performance-Based Cash Incentives Our annual cash incentive program is designed to reward all employees, including our NEOs, for the achievement of the Company’s annual corporate goals, as well as individual performance against annual individual goals. We believe that annual incentives hold executives accountable, reward executives based on actual business results and help create a “pay for performance” culture. There are no minimum or guaranteed bonus payments for employees, including the NEOs. TABLE OF CONTENTS
Under our cash incentive program, every employee, including each NEO, has an established annual performance-based incentive target, which is equal to a percentage of the employee’s base salary. This percentage increases as levels of responsibility increase. TABLE OF CONTENTS Executive Incentive Opportunities Under our cash incentive program, each of our executive officers has an established annual incentive target which is equal to a percentage of their base salary (AIP). The actual earned annual incentive bonus, if any, is calculated based on corporate goal achievement and their individual goal achievement, multiplied by the AIP. For 2020,2021, our NEOs had the following annual AIP cash incentive opportunities. The target AIP opportunities as a percentage of base salary were set at the same level as in 2019.2020. Sean A. McCarthy, D. Phil. | | | 60% | Amy Peterson, M.D. | | | 50% | Carlos Campoy | | | 40% | Lloyd A. Rowland, J.D. | | | 40% | Amy Peterson, M.D.
| | | 50%
| Alison Hannah, M.D. | | | 40% | W. Michael Kavanaugh, M.D.(1)
| | | 40%
|
(1)
| Dr. Kavanaugh separated employment from the Company on December 2020. |
Annual Corporate Performance Goals At the beginning of each year, our Chief Executive Officer develops annual corporate goals with input from our executive management team. The goals relate to our strategic, operational and financial strategy. Each goal is assigned a weighting based on its importance and business value for CytomX and our shareholders. Each of the goals is established with criteria for getting to target goal accomplishment (100%) and criteria for obtaining stretch goal accomplishment (up to 150%). The Compensation Committee reviews and adjusts the proposed corporate goals and associated weightings as necessary and then recommends them to the Board for approval. At the end of each performance year, the Chief Executive Officer presents to the Compensation Committee an assessment of the Company’s achievement against the pre-established annual corporate goals. The Compensation Committee reviews and discusses the corporate performance assessment, makes adjustments based on events or circumstances as it deems appropriate, and determines an overall corporate performance score representing the extent to which the Company achieved its overall objectives for the year. The corporate performance score can range up to 150% and is approved by the Board upon recommendation from the Compensation Committee. This corporate performance score serves as the basis for determining actual bonus payouts under the annual cash incentive plan. In early 20202021 we established corporate goals that focused 50%60% of our goal achievement on making substantial progress in advancing our clinical trials, including the substantial enrollment of patients in our clinical trials. We established goals for achievement of research objectives weighted at 20%15%, progress in our business development and financing objectives at weighted at 20%15%, and goals for strengthening our corporate culture, including enhancement of employee performance weighted at 10%. However, it became apparent during the first and early part of the second quarter of 20202021 that due to the continuing impact of the COVID-19 pandemic, that our goals, particularly the clinical trial goals,goal for our ongoing CX-2009 clinical trial, would not be obtainable for reasons outside the control of the Company, the executive officers or its other employees. As a result of that impact, the Compensation Committee chose to reviseand the 2020Board revised the 2021 corporate goals and their weightingsgoal for CX-2009 development so that employees would be incentivized in the new work-from-home environment to excel and achieve stretch accomplishments that would progress the Company forward despite the pandemic. The weightingNone of the clinicalother corporate goals was reduced to 40% ofor the total achievement potential, with a focus on CX-2009 and CX-2029. Research goalsgoal weightings were not modified. The weighting of business development and finance goals was increased to 25%, primarily due to the realization that as the clinical trial timelines were stretched out due to the pandemic, they would be more expensive to conduct. The weighting of the corporate culture goals was increased to 15%, and the goals were enhanced to focus on addressing employee safety concerns both in and out of the office and employee morale during the work-from-home environment. Because each of our corporate goals is related to our business strategy and is highly confidential, we do not publicly disclose them, as we believe their disclosure would provide our competitors, customers and other third-parties with significant insights regarding our confidential business strategies that could cause us substantial harm. TABLE OF CONTENTS 20202021 Corporate Performance
For 20202021 our revised corporate goals were based on the following: 1.
| Clinical development goals for CX-2009, including enhanced clinical trial enrollment and other progress on CX-2009, monotherapy and in combination with CX-072, and CX-2029;CX-072; |
2.
| Clinical development goals for CX-2029, including clinical trial enrollment goals for CX-2029 and the generation of certain data; |
3.
| Research goals, including the filing of an investigational new drug application (IND) and the accomplishment of other projects pertaining to the advancement of potential product candidates; |
3.4.
| BusinessFinancing and business development goals;goals pertaining to the Company’s ability to operate in accordance with its long-range planning effort; and, |
4.5.
| Company culture goals, including goals pertaining to the development and retention of employees, enhancement of the Company’s corporateCompany's compliance programculture with additional compliance training programs, and team efforts.establishing an enhanced ongoing and post-pandemic working model for employees |
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| | | 2020 Performance Goals | | | Weighted
Attainment
Level | | | 2021 Performance Goals | | | Weighted
Attainment
Level | Metric | | Weighting | | Target | | Maximum | | | Weighting | | Target | | Maximum | | Research goals pertaining to the advancement of potential product candidates | | 20% | | 100% | | 150% | | 150% | | Research goals pertaining to the filing of an IND and the advancement of potential product candidates | | | 15% | | 100% | | 150% | | 100% | Development goals pertaining to clinical trial progress on CX-2029 | | 20% | | 100% | | 150% | | 96% | | 30% | | 100% | | 150% | | 100% | Development goals pertaining to clinical trial progress on CX-2009 monotherapy and in combination with CX-072 | | 20% | | 100% | | 150% | | 60% | | 30% | | 100% | | 150% | | 100% | Financing and Business development | | 25% | | 100% | | 150% | | 93% | | Company culture goals, including goals pertaining to hiring and retention, and the establishment of programs for employee development | | 15% | | 100% | | 150% | | 100% | | Financing and business development | | | 15% | | 100% | | 150% | | 100% | Company culture goals, including goals pertaining to employee retention and development, enhancement of the compliance culture, and establishment of the Company working model | | | 10% | | 100% | | 150% | | 75% | Aggregate weighted attainment level | | | | | | | | 96% | | | | | | | | 97.5% |
In early 2021,2022, the BoardCompensation Committee reviewed the Company’s accomplishments for 2020,2021, and with the recommendation of the Compensation Committee, determined that the overall achievement percentage of the Company was 100%97.5% based on the total of each corporate goal accomplishment set forth above and in light of the COVID-19 environment in which the Company operated. Individual Performance To further our commitment to a pay for performance culture, we allocate our annual bonus pool by applying a multiplier to the corporate performance score, based on each executive’s individual performance rating. At the end of each performance year, the Chief Executive Officer presents the Compensation Committee with an evaluation of each executive officer’s performance against pre-established annual individual goals, as well as a performance rating for each executive officer (other than himself) and a recommended annual incentive award amount for each executive officer (other than himself) based on the corporate performance score and the recommended individual performance rating multiplier. OurFor 2021, the Compensation Committee determined that our annual bonus awards areshould be calibrated to pay out at 100% of overall target if an individual’s performance has been rated at the Meets Expectations” level. For those executives receiving an “Exceeds Expectations” level, consistent with our compensation philosophy.rating, annual bonus payouts based on the corporate performance score were at 105% of overall target. For those executives receiving an “Outstanding” individual performance rating, annual bonus payouts based on corporate performance score are increased by an additional 20%. Conversely, for those executives receiving a “Meets Expectation” rating, annual bonus payouts based onwere 120% of the corporate performance score are decreased by 10%.overall target. This element of our compensation philosophy is reflected across the entire organization and is not restricted to executive pay.officers. Dr. McCarthy’s performance is assessed based on leading the Company to achieve its corporate goals and he therefore received a performance rating of 100%97.5% for 2020.2021. Each other NEO received a performance rating calibrated to reflect actual performance against expectations for their target performance. Dr. Peterson and Dr. Hannah received a rating of outstanding, reflecting their respectiveher impact on the Company’s clinical development strategy and operations during the course of 2020.2021. The other NEOs either met or exceeded target performance expectations and received a performance rating at the level discussed above.of exceeds expectations. Mr. Rowland’s performance rating reflected his planning across key legal functions, litigation management and strengthening of the corporate compliance program. TABLE OF CONTENTS Mr. Campoy’s performance rating reflected his leadership of the finance organization and efforts to enhance the financial outlook of the Company. Dr. Kavanaugh did not receive aHannah’s performance rating because he retired fromreflected her efforts to develop the Company in December 2020. clinical team and advance the clinical trials notwithstanding the COVID-19 pandemicTABLE OF CONTENTS
20202021 Earned Cash Bonuses
Based on the annual bonus determination process described above, the following table sets forth each executive’s target annual bonus percentage for 20202021 and associated dollar value, as well as the annual bonus payments for each NEO for the 20202021 performance year. Sean A. McCarthy, D. Phil. | | | $595,000 | | | 60% | | | 357,000 | | | 357,000 | Carlos Campoy(1) | | | $465,000 | | | 40% | | | 186,000 | | | 144,723 | Lloyd A. Rowland, J.D. | | | $403,700 | | | 40% | | | 161,460 | | | 161,460 | Amy Peterson, M.D. | | | $503,000 | | | 50% | | | 251,500 | | | 301,799 | Alison Hannah(2) | | | $450,000 | | | 40% | | | 180,000 | | | 197,063 | W. Michael Kavanaugh, M.D.(3) | | | $460,000 | | | 40% | | | 184,000 | | | NA |
(1)
| Final bonus payment pro-rated based on employment commencing in March 2020. |
(2)
| Final bonus payment pro-rated based on employment commencing in February 2020. |
(3)
| Dr. Kavanaugh separated employment from the Company in December 2020 and in connection with his separation received a prorated target annual bonus as part of his severance. |
Sean A. McCarthy, D. Phil. | | | $615,825 | | | 60% | | | 369,495 | | | 359,500 | Amy Peterson, M.D. | | | $520,605 | | | 50% | | | 260,302 | | | 266,810 | Carlos Campoy | | | $477,555 | | | 40% | | | 191,022 | | | 195,797 | Lloyd A. Rowland, J.D. | | | $417,778 | | | 40% | | | 167,111 | | | 171,288 | Alison Hannah | | | $464,400 | | | 40% | | | 185,760 | | | 190,404 |
Equity Awards The long-term incentive component of our executive compensation program is equity-based and is dependent on the future success of the Company. Prior to 2021, our equity grants were entirely composed of stock options. In 20202021 our equity program consisted ofwas expanded to include not only time-based options to purchase shares of our common stock, which require our common stock to appreciate in value before our executive officers realize any economic benefit from the options.options, but also PSUs, that vest upon the achievement of certain milestones within a designated performance period, and time-based restricted stock units (RSUs) that vest fully-owned shares over the vesting period. In 2021 RSUs were only granted to employees other than the executive officers. Our equity awards program is designed to: Attract key talent. Align our executives’ compensation with the long-term interests of our shareholders, as well as with CytomX’s performance over the long-term. Retain skilled leadership needed to drive the Company forward to achieve long-term success and value creation. Maintain competitive levels of executive compensation. Encourage employee ownership culture. In 2020,2021 equity awards to executives were comprised solely of stock option grants and PSUs under our 2015 Equity Incentive Plan and our 2019 Employment Inducement Plan, which we implemented to enhance our ability to make strategically important employment decisions. For non-executive employees, our equity awards in 2021 consisted of stock option grants and RSUs. The Compensation Committee views options, RSUs and PSUs as performance-based, and took into consideration the fact that mostmany companies in our very competitive market have equity programs that have evolved to include options, RSUs and PSUs. The Compensation Committee added RSUs (for non-executives) and PSUs to the equity mix in which options are2021 to enhance ongoing employee retention and to incentivize the sole vehicle utilized. Suchhiring of potential employees who have become used to receiving RSUs and PSUs. The Compensation Committee also believes such grants encourage employee ownership in CytomX, link pay with performance and align the interests of shareholders and employees. Our employees, including the NEOs, have an opportunity to realize value from equity-based awards through sustained, increasing price per share performance in our common stock.stock, as well as by achieving key milestones within the timelines prescribed in PSU grants. The Compensation Committee determines the size of any stock option, RSU or PSU grant after taking into account a number of factors, including each executive officer’s position and the market data of our peer group companies provided by Radford.Aon. The Compensation Committee also takes into consideration each NEO’s recent performance history, his or her potential for future responsibility, and criticality TABLE OF CONTENTS of his or her work to the long-term success of the Company. Other factors may include equity awards previously granted, the amount of actual versus theoretical equity value per year that has been derived to date by the individual, and the current actual value of unvested equity grants for each individual. The Compensation Committee has the discretion to give relative weight to each of these factors as it sets the size of the stock optionequity grant to appropriately create an opportunity for reward based on increasing shareholder value. CytomX’s standard vesting schedule for the first stock option grant awarded to newly hired employees, including executive officers, provides that 25% of the shares granted will vest on the first anniversary of the TABLE OF CONTENTS
commencement of employment, with the balance vesting in equal monthly installments over the subsequent thirty-six (36) months, until option shares are fully vested, subject to the individual’s continued service to us through the applicable vesting date. For RSUs that are granted to a newly hired employee, the shares will vest 25% on an annual basis over the first four years of their employment, subject to the individual’s continued service to us through the applicable vesting date. Additional annual option grants made after an employee, including an executive officer, has provided services to the Company generally vest monthly from the date of grant over four years, subject to the individual’s continued service to us through the applicable vesting date. Additional annual RSU grants to employees will generally vest 25% on an annual basis over the next four years of their employment, subject to the individual’s continued service to us through the applicable vesting date. In October 2021, the Company made special grants in order to retain and incentivize all employees of the Company in a particularly competitive environment for talent across the biotechnology industry. Executives received a combination of stock options and PSUs. The vesting schedule for these stock options is monthly over a period of four years. The vesting schedule for the PSUs awarded in 2021 to executives provides that 50% of shares granted will vest upon the achievement of a specified clinical development milestone for one of CX-2009, CX-2029 or CX-904 within the first year from the date of grant, and the remaining shares granted will vest upon the achievement of a specified partnership and finance milestone within the second year from the date of grant. The Compensation Committee grants equity awards to newly hired and existing executive officers. Our general policy is to grant stock options and other equity awards on fixed dates determined in advance, although there are occasions when grants are made on other dates. All required approvals are obtained in advance of or on the actual grant date. Other than stock optionequity grants to new hires, stock optionequity grants to executive officers are generally approved once a year when compensation decisions are finalized (typically in January or February, in conjunction with a meeting of the Compensation Committee and Board.)Board). If an executive officer is promoted, grants will normally be made at the time of such promotion, or, in rare circumstances, ad-hoc grants may be made for recognition of outstanding performance. Our NEOs received the following stock optionequity grants in 2020. The annual grants to our NEOs continuing from 2019 and the new-hire grant to Dr. Hannah were made in February 2020, and the new-hire grant to Mr. Campoy was made in November 2020.2021. Sean A. McCarthy, D. Phil.
| | | 500,000
| Carlos Campoy
| | | 350,000
| Lloyd A. Rowland, J.D.
| | | 100,000
| Amy Peterson, M.D. (1)
| | | 25,000
| Alison Hannah, M.D.(2)
| | | 250,000
| W. Michael Kavanaugh, M.D.(3)
| | | 120,000
|
(1)
| Dr. Peterson’s grants were prorated based on her joining the Company in October 2019. |
(2)
| Dr. Hannah was also granted 50,000 shares at an exercise prove of $7.71 per share, with vesting contingent on meeting certain performance milestones. |
(3)
| Dr. Kavanaugh separated employment from the Company in December 2020, at which time, any unvested stock options were forfeited. Additionally, in connection with his consulting services for the Company, Dr. Kavanaugh was granted 12,000 shares at an exercise price of 7.90 per share. |
TABLE OF CONTENTS In accordance with our equity grant practices, the exercise price for these stock option grants was equal to the closing price of our common stock as reported by the Nasdaq Global Select Market on the date of grant and the vesting schedule is as described above for new-hire and subsequent grants. On occasion, when the Compensation Committee wants to incentivize specific corporate objectives which have substantial uncertainty, option grants are made to the person with specific responsibility for such objective. These grants generally vest upon accomplishment of the specific objective, provided it occurs within certain time limits. If the objective does not occur within the established time limit, the grant expires. These equity grants also generally have a term of ten years from the date of grant. The Committee did not make any such grants to executive officers in 2020.
Additional Compensation Policies, Practices, and GovernancePerquisites Perquisites
Mr. Rowland is reimbursed for the cost of commuting for work from Southern California. The Compensation Committee has considered these expenses and believes that in light of the highly competitive market in which the Company competes for talent and the unique talents and contributions of this executive, these expenses are in the best interests of our shareholders.
Employment Agreements and Severance and Change in Control Benefits
We have entered into written employment agreements with each of our NEOs that set forth the terms of their employment, including initial base salaries and eligibility to participate in the Company’s annual performance-based bonus program. In addition, each employment agreement includes restrictive covenants that would apply in the event
TABLE OF CONTENTS
of termination, which our Board believe helps protect our value. Each of our NEOs is employed “at will.” The Company has also agreed to reimburse Mr. Rowland for his travel expense reimbursements for his commute from his principal residence in San Diego to our headquarters in South San Francisco, California.
Our NEOs are entitled to certain severance and change in control benefits under the terms of their severance and change of control agreements, as may have been amended and restated, and our equity plans, as further described under the sub-section entitled “Potential Payments Upon Termination or Change in Control.“Estimated Potential Payments.” Dr. McCarthy’s severance and change of control agreement provides for: (i) 18 months of salary, pro-rated annual target bonus and 18 months of COBRA premiums in the event of a termination without cause or for good reason outside of the 60 days prior to or 12 months following a change in control and (ii) 24 months of salary, 24 months of annual target bonus, 24 months of COBRA premiums and full acceleration of outstanding equity awards in the event of a termination without cause or for good reason within 60 days prior to or 12 months following a change in control. For other NEOs, the severance and change of control agreements provide for: (i) 12 months of base salary, prorated annual target bonus and 12 months of COBRA premiums in the event of a termination without cause or for good reason outside of the 60 days prior to or 12 months following a change in control and (ii) 12 months of base salary, annual target bonus, and 12 months of COBRA premiums and full acceleration of outstanding equity awards in the event of a termination without cause or for good reason within 60 days prior to or 12 months following a change in control. Dr. Peterson’s severance and change of control agreement provides for the same payments and benefits as the other NEOs (other than Dr. McCarthy) in the event of a termination without cause or for good reason, but, for a termination without cause or for good reason within 60 days prior to or 12 months following a change in control, Dr. Peterson would receive 15 months of salary, 15 months annual target bonus and 15 months COBRA premiums and full acceleration of outstanding equity awards. The Compensation Committee believes these severance and change in control benefits, which are subject to the execution of general releases of claims against the Company, are essential elements of our executive compensation program and assist us in recruiting, retaining and developing key management talent in the competitive San Francisco Bay Area employment market. Our change in control benefits are intended to allow employees, including our NEOs, to focus their attention on the business operations of CytomX in the face of the potentially disruptive impact of a rumored or actual change in control transaction, to assess takeover bids objectively without regard to the potential impact on their own job security and to allow for a smooth transition in the event of a change in control of CytomX. In addition, our severance benefits provide reasonable protection to the executive officer in the event that he or she is not retained. We do not provide for any excise tax gross-ups in the amended and restated severance agreements. In connection with Dr. Kavanaugh’s separation of employment from the Company in December 2020, he entered into a consulting arrangement with the Company. Under that arrangement he is entitled to receive $250 per hour for time spent on Company matters other than for service on the Company’s scientific advisory board. Dr. Kavanaugh was also appointed to the Company’s scientific advisory board for which he will receive the Company’s standard annual compensation of $15,000 per year, plus the Company’s standard advisory board option to purchase 12,000 shares of the Company’s common stock under the Company’s 2015 Equity Incentive Plan, which vests in equal monthly installments over two years from December 14, 2020. In connection with his retirement, the Company and Dr. Kavanaugh also entered into a Retirement Agreement on January 4, 2021 which provided that Dr. Kavanaugh would receive severance benefits consistent with a termination without cause or for good reason under the terms of his Amended and Restated Severance and Change of Control Agreement dated as of March��25, 2019, as described above.
Broad-Based Benefits We offer a comprehensive array of benefits to our employees, including our NEOs.NEOs, who are eligible to participate on the same terms as other employees. Benefit programs include a variety of health insurance plans, 401(k) plan with Company matching contributions at Board-approved levels, employee stock purchase plan and term life insurance. These benefits are offered to all employees, including executive officers, in order to attract and retain employees. We do not offer defined benefit pension or other supplementary retirement benefits to employees. TABLE OF CONTENTS
Tax and Accounting Implications of Executive Compensation The Compensation Committee considers the deductibility of executive compensation under Section 162(m) of the Code in designing, establishing and implementing our executive compensation policies and practices. Section 162(m) generally prohibits us from deducting any compensation over $1 million per taxable year paid to “covered employees” which generally includes our NEOs. While the Compensation Committee considers the deductibility of awards as one factor in determining executive compensation, the Compensation Committee also looks at other factors in making its decisions and retains the flexibility to award compensation that it determines to be consistent with the goals of our executive compensation program even if the awards are not deductible by us for tax purposes. TABLE OF CONTENTS In addition to considering the tax consequences, the Compensation Committee considers the accounting consequences of its decisions, including the impact of expenses being recognized in connection with equity-based awards, in determining the size and form of different equity-based awards. Compensation Committee Interlocks and Insider Participation Please see “Board of Directors and Corporate Governance—Information Regarding the Committees of the Board of Directors—Compensation Committee” for information regarding the compensation committee of the Board. In 2020,2021, none of our named executive officers (a) served on the compensation committee of another entity that had an executive officer who served on our compensation committee; (b) served as director of another entity that had an executive officer who served on our compensation committee; or (c) served on compensation committee of another entity that had an executive officer who served as one of our directors. TABLE OF CONTENTS EXECUTIVE COMPENSATION TABLES 20202021 Summary Compensation Table
The following table provides a summary of compensation paid to our named executive officers for the years ended December 31, 2021, 2020 2019 and 2018.2019. Name and principal position | | Fiscal
year | | Base
salary
($) | | Bonus
($) | | Stock
awards
($) | | Option
awards
($)(1) | | Non-equity
incentive plan
compensation
($)(2) | | All other
compensation
($)(3) | | Total
($) | | Fiscal
year | | Salary
($) | | Bonus
($) | | Stock
awards
($) | | Option
awards
($)(1) | | Non-equity
incentive
plan
compensation
($)(2) | | All other
compensation
($)(3) | | Total
($) | Sean A. McCarthy, D. Phil.
President, Chief Executive
Officer and Chairman of the Board of Directors
| | | 2020 | | 595,000 | | — | | — | | 1,892,850 | | 357,000 | | 5,000 | | 2,849,850 | | | 2019 | | 575,000 | | — | | — | | 2,862,180 | | 327,750 | | 5,000 | | 3,769,930 | | | 2018 | | 550,000 | | — | | — | | 4,514,280 | | 412,500 | | 5,453 | | 5,482,233 | | Sean A. McCarthy, D. Phil.
Chief Executive Officer and Chairman of the Board of Directors
| | | | 2021 | | 615,825 | | — | | 427,200(4) | | 2,931,890 | | 359,500 | | 5,000 | | 4,339,415 | | | 2020 | | 595,000 | | — | | — | | 1,892,850 | | 357,000 | | 5,000 | | 2,849,850 | | | 2019 | | 575,000 | | — | | — | | 2,862,180 | | 327,750 | | 5,000 | | 3,769,930 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Carlos Campoy
Senior Vice President, Chief
Financial Officer(4)
| | | 2020 | | 360,052 | | — | | — | | 972,860 | | 144,723 | | 264,004 | | 1,741,639 | | | 2019 | | — | | — | | — | | — | | — | | — | | — | | | 2018 | | — | | — | | — | | — | | — | | — | | — | | Amy Peterson, M.D.
President, Chief
Operating Officer
| | | | 2021 | | 520,605 | | — | | 213,600(5) | | 1,246,265 | | 266,810 | | 5,000 | | 2,252,280 | | | 2020 | | 503,000 | | — | | — | | 94,643 | | 301,800 | | — | | 899,442 | | | 2019 | | 107,955 | | — | | — | | 1,548,000 | | 41,907 | | 1,697,861 | | 3,395,723 | | | | | | | | | | | | | | | | | | | Carlos Campoy
Senior Vice President,
Chief Financial Officer
| | | | 2021 | | 477,555 | | — | | 160,200(6) | | 557,652 | | 195,797 | | 5,000 | | 1,396,204 | | | 2020 | | 360,052 | | — | | — | | 972,860 | | 144,723 | | 264,004 | | 1,741,639 | | | 2019 | | — | | — | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Lloyd A. Rowland
Senior Vice President, General Counsel, Chief Compliance Officer and Secretary
| | | 2020 | | 403,650 | | — | | — | | 378,570 | | 161,460 | | 9,713 | | 953,393 | | | 2021 | | 417,778 | | — | | 160,200(7) | | 667,492 | | 171,288 | | 5,000 | | 1,421,758 | | 2019 | | 390,000 | | — | | — | | 523,779 | | 132,600 | | 51,464 | | 1,097,843 | | 2020 | | 403,650 | | — | | — | | 378,570 | | 161,460 | | 9,713 | | 953,393 | | 2018 | | 360,000 | | | | | | 1,447,650 | | 110,466 | | 26,586 | | 26,586 | | 2019 | | 390,000 | | — | | — | | 523,779 | | 132,600 | | 51,464 | | 1,097,843 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Amy Peterson, M.D.
Executive Vice President, Chief Development Officer(5)
| | | 2020 | | 503,000 | | — | | — | | 94,643 | | 301,800 | | — | | 899,442 | | | 2019 | | 107,955 | | — | | — | | 1,548,000 | | 41,907 | | 1,697,861 | | 3,395,723 | | | 2018 | | — | | — | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | Alison Hannah
Senior Vice President and Chief Medical Officer(6)
| | | 2020 | | 412,500 | | — | | — | | 1,023,425 | | 197,063 | | 45,000 | | 1,677,988 | | | 2019 | | — | | — | | — | | — | | — | | — | | — | | | 2018 | | — | | — | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | W. Michael Kavanaugh, M.D.
Former Senior Vice President, Chief Science Officer and Head of Research and Non-Clinical Development(7)
| | | 2020 | | 423,416 | | — | | — | | 506,212 | | — | | 710,3205 | | 1,639,948 | | | 2019 | | 444,452 | | — | | — | | 858,654 | | 168,892 | | 5,000 | | 1,476,997 | | | 2018 | | 427,357 | | — | | — | | 1,128,570 | | 213,679 | | 5,000 | | 1,774,606 | | Alison Hannah
Senior Vice President and Chief Medical Officer
| | | | 2021 | | 464,400 | | — | | 160,200(8) | | 887,172 | | 190,404 | | 5,000 | | 1,707,176 | | | 2020 | | 412,500 | | — | | — | | 1,023,425 | | 197,063 | | 45,000 | | 1,677,988 | | | 2019 | | — | | — | | — | | — | | — | | — | | — |
(1)
| The amounts reported in this column reflect the grant date fair value of option awards granted to the named executive officers. The grant date fair values have been determined in accordance with FASB ASC Topic 718. For the 20202021 option grants, a discussion of the assumptions and methodologies used to calculate these amounts, please see the discussion of option awards contained in the Stock-based Compensation sub-section under Note 14 to our financial statements included in our annual report on Form 10-K for the year ended December 31, 2020.2021. |
(2)
| These amounts include payments under our annual incentive bonus plan, which is based on our performance against certain research and development and business development goals established by our compensation committee. Please see the above description entitled “Compensation Discussion and Analysis – Annual Performance-Based Cash Incentives” for a further discussion of our annual incentive bonus program. |
(3)
| The amounts reported in this column for 20202021 include a 401(k) matching contribution of $5,000 for all NEOs other than Dr. Peterson, reimbursement, travel expense reimbursements for Mr. Rowland totaling $4,713, sign-on bonus applicable to Mr. Campoy and Dr. Hannah discussed in footnotes (4) and (6) below respectively, and certain termination benefits applicable to Dr. Kavanaugh discussed in footnote 7 below.NEOs. |
(4)
| Mr. Campoy joined the CompanyDr. McCarthy was granted 80,000 performance-based RSUs (“PSUs”) on October 24, 2021 with a grant date fair value in March 2020. Mr. Campoy’s base salary for 2020accordance with FASB ASC Topic 718 of $427,200. The fair value of PSUs was $465,000; the figure under the “Base Salary” column represents the amount actually earned in 2020 pursuant to his March 2020 start date. Under the “Non-Equity incentive plan compensation” column for Mr. Campoy in 2020, the final payment of Mr. Campoy’s annual performance bonus was pro-rateddetermined based on employment commencingthe market price of our common stock on March 2020. Under the “All other compensation” column for Mr. Campoy in 2020, $259,004 represents a sign-on bonus in connection with his hiring.grant date and based on achievement of 100% of the PSUs. |
(5)
| Dr. Peterson joinedwas granted 40,000 performance-based RSUs (“PSUs”) on October 24, 2021 with a grant date fair value in accordance with FASB ASC Topic 718 of $213,600. 50% of the CompanyPSUs granted will vest within one year of the grant date upon achievement of certain specific milestones and the remaining 50% will vest within two years of the grant date upon achievement of additional company objectives. The fair value of PSUs was determined based on the market price of our common stock on the grant date and based on achievement of 100% of the PSUs. |
(6)
| Mr. Campoy was granted 30,000 performance-based RSUs (“PSUs”) on October 24, 2021 with a grant date fair value in accordance with FASB ASC Topic 718 of $160,200. 50% of the PSUs granted will vest within one year of the grant date upon achievement of certain specific milestones and the remaining 50% will vest within two years of the grant date upon achievement of additional company objectives. The fair value of PSUs was determined based on the market price of our common stock on the grant date and based on achievement of 100% of the PSUs. |
(7)
| Mr. Rowland was granted 30,000 performance-based RSUs (“PSUs”) on October 2019.24, 2021 with a grant date fair value in accordance with FASB ASC Topic 718 of $160,200. 50% of the PSUs granted will vest within one year of the grant date upon achievement of certain specific milestones and the remaining 50% will vest within two years of the grant date upon achievement of additional company objectives. The fair value of PSUs was determined based on the market price of our common stock on the grant date and based on achievement of 100% of the PSUs. |
(8)
| Dr. Hannah was granted 30,000 performance-based RSUs (“PSUs”) on October 24, 2021 with a grant date fair value in accordance with FASB ASC Topic 718 of $160,200. 50% of the PSUs granted will vest within one year of the grant date upon achievement of certain specific milestones and the remaining 50% will vest within two years of the grant date upon achievement of additional company objectives. The fair value of PSUs was determined based on the market price of our common stock on the grant date and based on achievement of 100% of the PSUs. |
TABLE OF CONTENTS (6)
| Dr. Hannah joined the Company in February 2020. Dr. Hannah’s base salary for 2020 was $450,000; the figure under the “Base Salary” column represents the amount actually earned in 2020 pursuant to her February 2020 start date. Under the “All other compensation” column for Dr. Hannah in 2020, $40,000 represents a sign-on bonus earned in connection with her hiring. The final payment of Dr. Hannah’s annual performance bonus was pro-rated based on employment commencing on February 2020. Dr. Hannah was also granted 50,000 shares at an exercise price of $7.71 per share, with vesting based on meeting certain performance milestones. Prior to her appointment, we had entered into a consulting agreement with Dr. Hannah in October 2019, that was reported in our 2019 proxy statement, pursuant to which we paid Dr. Hannah a total of $83,362 in fees during the term of her consultancy, which ended upon her appointment as a full-time employee. |
(7)
| Dr. Kavanaugh separated employment from the Company in December 1, 2020 but continues to provide consulting services. Dr. Kavanaugh’s base salary for 2020 was $460,000; the figure under the “Base Salary” column represents the amount actually earned in 2020 up to his separation from the Company in December 2020. Under the “Option Awards” table for Dr. Kavanaugh in 2020, $51,927 represents the grant date fair value of 12,000 shares at $7.90 per share granted to Dr. Kavanaugh under our 2015 Equity Incentive Plan in connection with his services to the Company as a consultant. Under the “All other compensation” column for Dr. Kavanaugh in 2020, $629,290 represents his severance payout, constituting 12 months of his base salary and his 2020 target bonus, pro-rated up to his retirement date, $40,356 represents the payout of 12 months Cobra premium, and $35,674 represents Dr. Kavanaugh’s PTO payout upon retirement. |
20202021 Grants of Plan-Based Awards
The following table summarizes information about the non-equity incentive awards and equity-based awards granted to our NEOs in 2020:2021: | | | Estimated Future Payouts
Under Non-Equity Incentive Plan Award | | | | | | All Other Option Awards | | | Estimated Future Payouts
Under Non-Equity Incentive Plan Award | | Estimated Future Payouts
Under Equity Incentive Plan
Award | | | | | | All Other Option Awards | Name | | Threshold | | Target(1) | | Maximum | | Grant Date | | Number of
Securities
Underlying
Options: | | Exercise or
Base Price of
Option
Awards
($/Share) | | Grant Date
Fair Value of
Option
Awards(2) | | Threshold | | Target(1) | | Maximum | | Threshold | | Target(2) | | Maximum | | Grant Date | | Number
of
Securities
Underlying
Options: | | Exercise or
Base Price
of
Option
Awards
($/Share) | | Grant Date
Fair Value of
Stock and
Option
Awards(3) | Sean A. McCarthy, D. Phil. | | $— | | $357,000 | | $535,500 | | 2/14/2020 | | 500,000 | | $7.13 | | td,892,850 | | | $— | | $369,495 | | $554,242 | | | | | | | | 2/26/2021 | | 400,000 | | 7.85 | | td,757,440 | Carlos Campoy(3) | | $— | | td86,000 | | td79,000 | | 3/23/2020 | | 350,000 | | $4.93 | | $972,860 | | Sean A. McCarthy, D. Phil. | | | | | | | | | | | | | | | 2/27/2021 | | 200,000 | | 7.85 | | $878,720 | | | | | | | | | | | | | | | 10/24/2021 | | 100,000 | | 5.34 | | $295,730 | | | | | | | | | | 40,000 | | 80,000 | | 80,000 | | 10/24/2021 | | | | | | $427,200 | | | $— | | td60,302 | | $390,453 | | | | | | | | 2/26/2021 | | 250,000 | | 7.85 | | td,098,400 | Amy Peterson, M.D. | | | | | | | | | | | | | | | 10/24/2021 | | 50,000 | | 5.34 | | $147,865 | | | | | | | | | 20,000 | | 40,000 | | 40,000 | | 10/24/2021 | | | | | | $213,600 | | | | $— | | td91,022 | | td86,533 | | | | | | | | 2/26/2021 | | 100,000 | | 7.85 | | $439,360 | Carlos Campoy | | | | | | | | | | | | | | | 10/24/2021 | | 40,000 | | 5.34 | | $118,292 | | | | | | | | | 15,000 | | 30,000 | | 30,000 | | 10/24/2021 | | | | | | $160,200 | | $— | | td61,460 | | td42,190 | | 2/14/2020 | | 100,000 | | $7.13 | | $378,570 | | | $— | | $167,111 | | td50,666 | | | | | | | | 2/26/2021 | | 125,000 | | 7.85 | | $549,200 | Amy Peterson, M.D. | | $— | | td51,500 | | $377,250 | | 2/14/2020 | | 25,000 | | $7.13 | | $94,642.50 | | Alison Hannah, M.D.(4) | | $— | | td80,000 | | td70,000 | | 2/3/2020 | | 250,000 | | $7.71 | | td,023,425 | | W. Michael Kavanaugh, M.D.(5) | | $— | | $184,003 | | $276,004 | | 2/14/2020 | | 120,000 | | $7.13 | | $454,284 | | Lloyd Rowland | | | | | | | | | | | | | | | | 10/24/2021 | | 40,000 | | 5.34 | | $118,292 | | | | | | | | | 15,000 | | 30,000 | | 30,000 | | 10/24/2021 | | | | | | $160,200 | | | $— | | td85,760 | | td78,640 | | | | | | | | 2/26/2021 | | 250,000 | | 7.85 | | 768,880 | Alison Hannah, M.D. | | | | | | | | | | | | | | | | 10/24/2021 | | | | 5.34 | | $118,292 | | | | | | | | | 15,000 | | 30,000 | | 30,000 | | 10/24/2021 | | | | | | $160,200 |
(1)
| As a percentage of base salary, the 20202021 target bonus for Dr. McCarthy, Dr. Peterson, Mr. Campoy, Mr. Rowland, Dr. Peterson,and Dr. Hannah and Dr. Kavanaugh was 60%, 40%50%, 40%, 50%, 40% and 40% respectively. Maximum amounts represent 150% of target payouts. |
(2)
| The following PSUs were granted on October 24, 2021: Dr. McCarthy was granted 80,000 PSUs with a grant date fair value of $427,200; Mr. Campoy was granted 30,000 PSUs with a grant date fair value of $160,200. Mr. Rowland was granted 30,000 PSUs with a grant date fair value of $160,200; Dr. Peterson was granted 40,000 PSUs with a grant date fair value of $213,600; and Dr. Hannah was granted 30,000 PSUs with a grant date fair value of $160,200. 50% of the PSUs granted will vest within one year of the grant date upon achievement of certain specific milestones and the remaining 50% will vest within two years of the grant date upon achievement of additional company objectives. |
(3)
| The Company measures its stock-based awards made to employees based on the fair values of the awards as of the grant date using the Black-Scholes option-pricing model in accordance with FASB ASC Topic 718. For the 20202021 option grants, a discussion of the assumptions and methodologies used to calculate these amounts, please see the discussion of option awards contained in the Stock-based Compensation sub-section under Note 14 to our financial statements included in our annual report on Form 10-K for the year ended December 31, 2020. |
(3)
| Mr. Campoy joined the Company in March 2020. His option grants include initial options granted to an NEO upon appointment to the Company. |
(4)
| Dr. Hannah joined the Company in February 2020. Her option grants include initial options granted to an NEO upon appointment to the Company. In addition, Dr. Hannah was also granted 50,000 shares at an exercise prove of $7.71 per share, with vesting contingent on meeting certain performance milestones. |
(5)
| Dr. Kavanaugh separated employment from the Company in December 2020. Dr. Kavanaugh received a pro-rated target cash incentive award as part of his severance package. Additionally, Dr. Kavanaugh was granted 12,000 shares at an exercise price of 7.90 per share with a grant date2021. The fair value of $51,927.60 in connection with his consulting services forPSUs was determined based on the Company.market price of our common stock on the grant date and based on achievement of 100% of the PSUs |
TABLE OF CONTENTS Outstanding Equity Awards at December 31, 20202021 The following table presents information regarding the outstanding stock options held by each of the named executive officers as of December 31, 2020.2021. None of the named executive officers held any outstanding restricted stock or other equity awards as of that date. | | | | Option awards | | Stock awards | | | | Grant Date | | Vesting
Commencement
Date | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) | | Option
Exercise
Price
($) | | Option
Expiration
Date | | | Grant Date | | Vesting
Commencement
Date | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) | | Option
Exercise
Price
($) | | Option
Expiration
Date | | Equity
incentive
plan
awards:
number of
unearned
shares,
units or
other rights
that have
not vested
(#) | | Equity
incentive plan
awards:
market or
payout value
of unearned
shares, units
or other rights
that have not
vested
($) | Sean A. McCarthy D.Phil | | | 9/21/2011 | | 8/9/2011 | | 192,143 | | — | | — | | 1.13 | | 9/20/2021 | | | 2/26/2013 | | 2/26/2013 | | 90,931 | | — | | — | | 0.95 | | 2/25/2023 | | ) | | | | 2/26/2013 | | 2/26/2013 | | 90,941 | | — | | — | | 0.95 | | 2/25/2023 | | 2/9/2015 | | 1/1/2015 | | 126,303 | | — | | — | | 1.57 | | 2/8/2025 | | | | | | 2/9/2015 | | 1/1/2015 | | 126,303 | | — | | — | | 1.57 | | 2/8/2025 | | 1/21/2016(1) | | 1/1/2016 | | 136,299 | | — | | — | | 14.46 | | 1/20/2026 | | | | | | 1/21/2016(1) | | 1/1/2016 | | 136,299 | | — | | — | | 14.46 | | 1/20/2026 | | 1/25/2017(1) | | 1/1/2017 | | 234,299 | | — | | — | | 11.94 | | 1/24/2027 | | | | | | 1/25/2017(1) | | 1/1/2017 | | 227,840 | | 6,459 | | — | | 11.94 | | 1/24/2027 | | 1/24/2018(1) | | 1/1/2018 | | 293,750 | | 6,250 | | — | | 25.82 | | 1/23/2028 | | | | | | 1/24/2018(1) | | 1/1/2018 | | 218,750 | | 81,250 | | — | | 25.82 | | 1/23/2028 | | 1/25/2019(1) | | 1/1/2019 | | 218,750 | | 81,250 | | — | | 16.85 | | 1/24/2029 | | | | | | 1/25/2019(1) | | 1/1/2019 | | 143,750 | | 156,250 | | — | | 16.85 | | 1/24/2029 | | 2/14/2020(1) | | 1/1/2020 | | 239,583 | | 260,417 | | — | | 7.13 | | 2/13/2030 | | | | | | 2/14/2020(1) | | 1/1/2020 | | 114,583 | | 385,417 | | — | | 7.13 | | 2/13/2030 | | 2/26/2021(1) | | 2/26/2021 | | 83,333 | | 316,667 | | — | | 7.85 | | 2/25/2031 | | | | | Sean A. McCarthy D.Phil | | | 2/27/2021(1) | | 2/26/2021 | | 41,666 | | 158,334 | | — | | 7.85 | | 2/26/2031 | | | | | | | 10/24/2021(1) | | 10/24/2021 | | 4,166 | | 95,834 | | — | | 5.34 | | 10/23/2031 | | | | | | | 10/24/2021(4) | | | | | | | | | | | | | | 80,000 | | 427,200 | | | | 10/15/2019(2) | | 10/14/2019 | | 216,666 | | 183,334 | | — | | 7.16 | | 10/14/2029 | | | | | | | 2/14/2020(1) | | 1/1/2020 | | 11,979 | | 13,021 | | — | | 7.13 | | 2/13/2030 | | | | | | | 2/26/2021(1) | | 2/26/2021 | | 52,083 | | 197,917 | | | | 7.85 | | 2/25/2031 | | | | | | | 10/24/2021(1) | | 10/24/2021 | | 2,083 | | 47,917 | | | | 5.34 | | 10/23/2031 | | | | | | | 10/24/2021(4) | | | | | | | | | | | | | | 40,000 | | 213,600 | | | | 3/23/2020(2 | | 3/23/2020 | | 153,125 | | 196,875 | | — | | 4.93 | | 3/22/2030 | | | | | | | 2/26/2021(1) | | 2/26/2021 | | 20,833 | | 79,167 | | | | 7.85 | | 2/25/2031 | | | | | | | 10/24/2021(1) | | 10/24/2021 | | 1,666 | | 38,334 | | | | 5.34 | | 10/23/2031 | | | | | Carlos Campoy | | 3/23/2020(2) | | 3/23/2020 | | — | | 350,000 | | — | | 4.93 | | 3/22/2030 | | 10/24/2021(4) | | | | | | | | | | | | | | 30,000 | | 160,200 | Lloyd A. Rowland | | | 5/31/2018(2) | | 5/21/2018 | | 64,583 | | 35,417 | | — | | 25.67 | | 5/30/2028 | | | 5/31/2018(2) | | 5/21/2018 | | 89,583 | | 10,417 | | — | | 25.67 | | 5/30/2028 | | | | | | 1/25/2019(1) | | 1/1/2019 | | 26,306 | | 28,594 | | — | | 16.85 | | 1/24/2029 | | 1/25/2019(1) | | 1/1/2019 | | 40,031 | | 14,869 | | — | | 16.85 | | 1/24/2029 | | | | | | 2/14/2020(1) | | 1/1/2020 | | 22,916 | | 77,084 | | — | | 7.13 | | 2/13/2030 | | 2/14/2020(1) | | 1/1/2020 | | 47,916 | | 52,084 | | — | | 7.13 | | 2/13/2030 | | | | | Amy Peterson, M.D. | | | 10/15/2019(2) | | 10/14/2019 | | 116,666 | | 283,334 | | — | | 7.16 | | 10/14/2029 | | | 2/14/2020(1) | | 2/13/2030 | | 5,729 | | 19,271 | | — | | 7.13 | | 2/13/2030 | | Lloyd A. Rowland | | | 2/26/2021(1) | | 2/26/2021 | | 26,041 | | 98,959 | | — | | 7.85 | | 2/25/2031 | | | | | | | | 10/24/2021(1) | | 10/24/2021 | | 1,666 | | 38,334 | | — | | 5.34 | | 10/23/2031 | | | | | | | 10/24/2021(4) | | | | | | | | | | | | | | 30,000 | | 160,200 | | | 2/3/2020(3) | | 9/3/2021 | | 25,000 | | 25,000 | | — | | 7.71 | | 2/2/2030 | | 2/3/2020(3) | | 9/3/2021 | | 25,000 | | 25,000 | | — | | 7.71 | | 2/2/2030 | | | | | | 2/3/2020(2) | | 2/3/2020 | | — | | 250,000 | | — | | 7.71 | | 2/2/2030 | | 2/3/2020(2) | | 2/3/2020 | | 114,583 | | 135,417 | | — | | 7.71 | | 2/2/2030 | | | | | | | 2/9/2015(1) | | 1/9/2015 | | 71,512 | | — | | — | | 1.57 | | 2/8/2025 | | W. Michael Kavanaugh, M.D.(5) | | 1/21/2016(1) | | 1/1/2016 | | 80,000 | | — | | — | | 14.46 | | 1/20/2026 | | | 1/25/2017(1) | | 1/1/2017 | | 117,500 | | — | | — | | 11.94 | | 1/24/2027 | | | 1/24/2018(1) | | 1/1/2018 | | 54,687 | | — | | — | | 25.82 | | 1/23/2028 | | | 1/25/2019(1) | | 1/1/2019 | | 43,125 | | — | | — | | 16.85 | | 1/24/2029 | | | 12/14/2020(4) | | 12/14/2020 | | — | | 12,000 | | — | | 7.9 | | 12/13/2030 | | | | | 2/26/2021(1) | | 2/26/2021 | | 36,458 | | 138,542 | | | | 7.85 | | 2/25/2031 | | | | | Alison Hannah, M.D. | | | 10/24/2021(1) | | 10/24/2021 | | 1,666 | | 38,334 | | | | 5.34 | | 10/23/2031 | | | | | | | 10/24/2021(4) | | | | | | | | | | | | | | 30,000 | | 160,200 |
(1)
| This option vests in 1/48th increments beginning on the vesting commencement date, with each additional increment vesting on the last day of each month of continuous service following the vesting commencement date. |
(2)
| This option vests as to 25% of the total number of shares subject to the option on the first anniversary of the vesting commencement date and the remaining 75% of the total number of shares subject to the option will vest in 36 substantially equal installments on the last day of each of the 36 months following the first anniversary of the vesting commencement date, other than the final instalment which shall vest upon the executive officer’s continuous employment through each vesting date. |
(3)
| This option vests upon the attainment of certain clinical development milestones. |
(4)
| Dr. Kavanaugh was granted 12,000 shares under the Company’s 2015 Equity Incentive Plan in connection with his consulting agreement dated December 14, 2020 with the Company. |
(5)
| Dr. Kavanaugh separated employment fromOn October 24, 2021, the Company ingranted PSUs as recognition awards to its executive officers, including its NEOs. 50% of the PSUs granted will vest within one year of the grant date upon achievement of certain specific milestones and the remaining 50% will vest within two years of the grant date upon achievement of additional company objectives. As of December 2020, at which time any unvested31, 2021, the Company determined that it is not probable that the performance conditions will be satisfied and hence the payout value of PSUs was determined based on the market price of our common stock options were forfeited.on the grant date and based on achievement of 100% of the PSUs. |
TABLE OF CONTENTS 2021 Option Exercises and Stock Vested The following table summarizes the stock options exercised and stock awards vested during the year ended December 31, 2020,2021, and the value realized upon exercise or vesting by our NEOs. Other than Mr. McCarthy no other NEOs exercised any stock options during the year ended December 31, 2021. In addition, no stock awards held by the NEOs vested during the year ended December 31, 2021. | | | Option Awards | | Stock Awards | | | Option Awards | | Stock Awards | Name | | Number of
Shares Acquired
on Exercise (#) | | Value Realized
Upon Exercise
($)(1) | | Number of
Shares Acquired
on Vesting (#) | | Value Realized
Upon Vesting ($) | | Number of
Shares Acquired
on Exercise (#) | | Value Realized
Upon Exercise
($)(1) | | Number of
Shares Acquired
on Vesting (#) | | Value Realized
Upon Vesting ($) | Sean A. McCarthy, D. Phil. | | 156,500 | | 1,161,458 | | — | | — | | 192,153 | | 981,391 | | — | | — | W. Michael Kavanaugh, M.D.(1) | | 321,956 | | 1,253,982 | | — | | — | |
(1)
| Amounts are calculated by multiplying the number of underlying shares exercised by the market price of the shares on the exercise date, net of the exercise price. |
(2)
| Dr. Kavanaugh separated employment from the Company in December 2020. |
TABLE OF CONTENTS
Pension Benefits and Nonqualified Deferred Compensation Plans We do not have any pension benefits or nonqualified deferred compensation plans. Severance and Change in Control Arrangements Our NEOs are entitled to certain severance and change in control benefits under the terms of individual severance and change of control agreements and our equity plans. These severance and change in control provisions are intended to allow employees, including NEOs, to focus their attention on the business operations of CytomX in the face of the potentially disruptive impact of a proposed change in control transaction, to assess takeover bids objectively without regard to the potential impact on their own job security and to allow for a smooth transition in the event of a change in control of CytomX. The compensation committee believes that the severance benefits we offer remain essential to fulfill the objectives to recruit, retain and develop key management talent in the competitive San Francisco Bay Area employment market. These arrangements enable us to recruit and retain high-quality management talent because they provide reasonable protection to the executive officer in the event that he or she is not retained under limited circumstances. Dr. McCarthy’s Amended and Restated Severance and Change of Control Agreement provides that if his employment is terminated by us without cause or if Dr. McCarthy terminates his employment due to good reason (as such terms are defined in his agreement), subject to his execution of a general release of claims against the Company, he will be entitled to receive a lump sum payment equal to eighteen months (one-year prior to the amendment) of base salary plus his target annual bonus for such calendar year pro-rated based on his termination date as well as continued medical and dental coverage for a period of either eighteen months (one-year prior to the amendment) following termination of employment or the date Mr. McCarthy becomes eligible for medical and dental coverage from a subsequent employer, whichever occurs earlier. To the extent we are unable to provide such benefit coverage, the Company will make a lump sum payment equal to the premium cost relating to such benefit coverage for the eighteen months prior to Dr. McCarthy’s termination. Dr. McCarthy’s agreement also provides that, in the event of a change of control (as defined in the agreement) and a termination of employment without cause or due to good reason within 60 days prior to or 12 months following such change of control, Dr. McCarthy will be entitled to receive the same benefits, except that the lump sum payment will equal 24 months of his then current base salary plus 24 months of his target annual bonus for such calendar year, and continued medical and dental coverage will be for 24 months, unless, within such period, Mr. McCarthy becomes eligible for coverage from his subsequent employer, and full vesting of his outstanding equity awards. In addition, upon a change of control, the performance goal stipulated in any performance-based equity awards held by Dr. McCarthy will be deemed achieved in full. The Amended and Restated Severance and Change of Control Agreements entered into with each of our named executive officers other than Dr. McCarthy provide that if the officer’s employment is terminated by us without cause or if the officer terminates their employment due to good reason (as such terms are defined in the agreements), subject to their execution of a general release of claims against the Company, they will be entitled to receive a lump sum payment equal to twelve-months of base salary plus their target annual bonus for such calendar year pro-rated based on his or her termination date as well as continued medical and dental coverage for a period of either twelve months TABLE OF CONTENTS following termination of employment or the date the named executive officer becomes eligible for medical and dental coverage from their subsequent employer, whichever occurs earlier. To the extent we are unable to provide such benefit coverage, the Company will make a lump sum payment equal to the premium cost relating to such benefit coverage for the twelve months prior to the named executive officers’ termination. The Amended and Restated Severance and Change of Control Agreements entered into with each of our named executive officers other than Dr. McCarthy and Dr. Peterson also provide that, in the event the officer is terminated without cause or terminates due to good reason, in each case within 60 days prior to or 12 months following a change in control, then the officer will be entitled to receive an amount equal to 12 months of base salary plus 12 months of target annual bonus for such calendar year, and continued medical and dental coverage for 12 months, unless, within such period, the officer becomes eligible for coverage from their subsequent employer, and each named executive officer will also receive full vesting acceleration of their outstanding equity awards. Dr. Peterson’s amended and restated severance and change of control agreement provided for payouts similar to the other NEOs (other than Dr. McCarthy) in the event of a termination without cause or for good reason, but, for a termination without cause or for good reason within 60 days prior to or 12 months following a change in control, Dr. Peterson would receive 15 months of salary, 15 months of annual target bonus and 15 months COBRA premiums. TABLE OF CONTENTS
In addition, under each of the Severance and Change of Control Agreements for our NEOs, if any payment or other benefit provided to the officer pursuant to the Severance and Change of Control Agreement constitutes a “excess parachute payment” within the meaning of Section 280G of the Code, and would be subject to an excise tax imposed by Section 4999 of the Code, then the amounts actually paid to the officer will be either delivered in full pursuant to the terms of the agreement or reduced to the extent that such a reduction would result in no portion of the payment being subject to the excise tax. Estimated Potential Payments Dr. Kavanaugh retired from the Company on December 1, 2020. Pursuant to the terms of his Retirement Agreement, effective January 4, 2021, Dr. Kavanaugh received a total of $629,290 as his severance payout, representing 12 months of his base salary and target bonus for 2020, prorated up to his retirement date. Dr. Kavanaugh’s COBRA continuation amounted to $40,356. The payments to Dr. Kavanaugh are consistent with the terms of his Amended and Restated Severance and Change of Control Agreement dated as of March 25, 2019, as described above.
The following table shows the payments and benefits that would be made to our other NEOs under their agreements as of December 31, 20202021 assuming a termination without cause or a resignation for good reason, including within the period commencing 60 days prior to or 12 months following a change in control (CIC), occurring on December 31, 2020.2021. Name | | Base Salary and
Target
Bonus($) | | COBRA
Premium
($) | | Equity
Acceleration(1)
($) | | Total Potential
Payment(2)
($) | | Base Salary and
Target
Bonus($) | | COBRA
Premium
($) | | Equity
Acceleration(1)
($) | | Total Potential
Payment(2)
($) | Sean A. McCarthy, D. Phil.
| | | | | | | | | | | | | | | | | Qualifying Termination | | 1,249,500 | | 60,534 | | — | | 1,310,034(3) | | 1,293,233 | | 61,816 | | — | | 1,355,049(3) | Qualifying Termination on CIC | | 1,904,000 | | 80,713 | | — | | 1,984,713(4) | | 1,970,640 | | 82,422 | | — | | 2,053,062(4) | Carlos Campoy
| | | | | | | | | | | | | | | | | Qualifying Termination | | 651,000 | | 28,267 | | — | | 679,267(5) | | 668,577 | | 28,884 | | — | | 697,461(5) | Qualifying Termination on CIC | | 651,000 | | 28,267 | | 567,000 | | 1,246,267(6) | | 668,577 | | 28,884 | | — | | 697,461(6) | Lloyd Rowland
| | | | | | | | | | | | | | | | | Qualifying Termination | | 565,110 | | 23,719 | | — | | 588,829(5) | | 584,889 | | 24,207 | | — | | 609,096(5) | Qualifying Termination on CIC | | 565,110 | | 23,719 | | — | | 588,829(6) | | 584,889 | | 24,207 | | — | | 609,096(6) | Amy Peterson, M.D.
| | | | | | | | | | | | | | | | | Qualifying Termination | | 754,500 | | 2,998 | | — | | 757,498(5) | | 780,907 | | 26,698 | | — | | 807,606(5) | Qualifying Termination on CIC | | 943,125 | | 3,748 | | — | | 946,872(7) | | 976,134 | | 33,373 | | — | | 1,009,507(7) | Alison Hannah, M.D.
| | | | | | | | | | | | | | | | | Qualifying Termination | | 630,000 | | 28,267 | | — | | 658,267(5) | | 650,160 | | 28,884 | | — | | 679,044(5) | Qualifying Termination on CIC | | 630,000 | | 28,267 | | — | | 658,267(6) | | 650,160 | | 28,884 | | — | | 679,044(6) |
(1)
| With respect to options, the value of equity acceleration was calculated by multiplying (A) the amount by which the fair market value per share common share on December 31, 2021 ($4.33 per share) exceeded the exercise price per share in effect under each option by (B) the number of unvested shares that vest on an accelerated shares of common stock underlying the options by $6.55, the closing stock price of our common stock on December 31, 2020, the last trading day of fiscal 2019, net of the exercise prices.basis under such option. |
(2)
| Amounts shown are the maximum potential payment the NEO would have received as of December 31, 2020.2021. Amounts of any reduction pursuant to the 280G best pay provision, if any, would be calculated upon actual termination of employment. With respective to PSUs, the value of equity acceleration was determined by multiplying (A) the fair market value per common share on December 31, 2021 ($4.33 per share) by (B) the number of unvested shares that would vest on an accelerated basis under such award. No value is attributed to the market performance of PSU stock units since the threshold level of performance had not been attained as of December 31, 2021. |
TABLE OF CONTENTS (3)
| Calculated based on 18 months base salary and 12 months target bonus (prorated based on termination date) and 18 months COBRA premium. |
(4)
| Calculated based on 24 months base salary, 24 months target bonus and 24 months COBRA premium. |
(5)
| Calculated based on 12 months base salary and 12 months target bonus (prorated based on termination date) and 12 months COBRA premium. |
(6)
| Calculated based on 12 months base salary and 12 months target bonus and 12 months COBRA premium. |
(7)
| Calculated based on 15 months base salary and 15 months target bonus and 15 months COBRA premium. |
CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and the applicable SEC rules (collectively, the “Pay-Ratio Rule”), the Company is required to disclose the ratio of our chief executive officer’s annual total compensation to the annual total compensation of our median employee. TABLE OF CONTENTS
The annual total compensation for 20202021 of our chief executive officer, Dr. McCarthy, was $2,849,850,$4,339,415, as reported in the Summary Compensation Table above. The annual total compensation for 20202021 of our median employee, identified per the methodology discussed below, was $157,110,$208,396, calculated in accordance with the rules applicable to the Summary Compensation Table. Based on this information, for 2020,2021, the ratio of the annual total compensation of Dr. McCarthy, our chief executive officer, to the median of the annual total compensation of our other employees, was approximately 1821 to 1. To identify ourGiven there was no significant difference to the employee population and compensation arrangement, we selected the same median employee that we used in our previous year’s proxy statement. To calculate the media employee’s compensation for 2021, we used the Box 1 Form W-2 compensation for the period from January 1, 20202021 through December 31, 2020 for all employees, other than Dr. McCarthy, employed as of December 31, 2020. Because the median employee identified using this methodology was a partial-year executive employee, we selected as our median employee the employee with the next closest earnings.2021.
The pay ratio reported above is a reasonable estimate calculated in a manner consistent with the Pay-Ratio Rule, based on our internal records and the methodology described above. The Pay-Ratio Rule and its accompanying guidance provide significant flexibility on how companies identify the median employee, and each company may use a different methodology and make different assumptions particular to that company. As a result, as the SEC explained when it adopted the Pay-Ratio Rule, in considering the pay ratio disclosure, stockholders should keep in mind that the Pay-Ratio Rule was not designed to facilitate comparisons of pay ratios among different companies, even companies within the same industry, but rather to allow stockholders to better understand and assess each particular company’s compensation practices and pay ratio disclosures. TABLE OF CONTENTS Securities Authorized for Issuance Under Equity Compensation Plans The following table provides information about the securities authorized for issuance under our equity compensation plans as of December 31, 2020,2021, which consisted of our 2010 Stock Incentive Plan, 2011 Stock Incentive Plan, as amended, 2015 Equity Incentive Plan, 2015 Employee Stock Purchase Plan and 2019 Employment Inducement Incentive Plan: Plan category | | Number of shares
to be issued upon
exercise of
outstanding
options,
warrants and rights
(a) | | Weighted-average
exercise price of
outstanding
options,
warrants and rights
(b)(1) | | Number of shares
remaining available
for future issuance
under equity
compensation plans
(excluding
securities reflected
in column (a))
(c) | | Total of shares
reflected in columns
(a) and (c)
(d) | | Number of shares
to be issued upon
exercise of
outstanding
options,
warrants and rights
(a) | | Weighted-average
exercise price of
outstanding
options,
warrants and rights
(b)(1) | | Restricted Stock
Units outstanding
(c) | | Number of shares
remaining available
for future issuance
under equity
compensation plans
(excluding
securities reflected
in column (a))
(d) | Equity compensation plans approved by Stockholders(2) | | 9,321,973 | | 10.77 | | 2,698,798 | | 13,832,928 | | 9,867,378 | | 9.42 | | 868,250 | | 2,276,341 | Employee Stock Purchase Plan(3) | | — | | — | | 1,935,683 | | 1,935,6831 | | — | | — | | | | 1,751,818 | Equity compensation plans not approved by stockholders(4) | | 1,607,557 | | — | | 204,600 | | — | | 2,324,838 | | — | | | | 486,234 | Total | | 10,929,530 | | 10.77 | | 4,839,081 | | 15,768,611 | | 12,192,216 | | | | 868,250 | | 4,515,393 |
(1)
| Represents the weighted average exercise price solely with respect to the outstanding stock options, which are the only awards outstanding as of December 31, 2020.options. |
(2)
| In 2010, the Company adopted its 2010 Stock Incentive Plan (the “2010 Plan”) which provided for the granting of stock options to employees, directors and consultants of the Company. Options granted under the 2010 Plan were either incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”). In February 2012, the Company adopted its 2011 Stock Incentive Plan (the “2011 Plan”). The 2011 Plan is divided into two separate equity programs, an option and stock appreciation rights grant program and a stock award program. In conjunction with adopting the 2011 Plan, the Company discontinued the 2010 Plan and released the shares reserved and still available under that plan. In connection with the consummation of the IPO in October 2015, the board of directors adopted the Company’s 2015 Equity Incentive Plan.Plan (the “2015 Plan”) and the Company’s 2015 Employee Stock Purchase Plan (the “ESPP”). In conjunction with adopting the 2015 Plan, the Company discontinued the 2011 Plan with respect to new equity awards. |
(3)
| The Company expects that approximately 86,105268,000 shares will be issued with respect to the current purchase period under the ESPP which ends on May 31, 2021.2022 and are not captured in column (a). |
(4)
| In September 2019, the Board adopted the 2019 Employment Inducement Incentive Plan (the “2019 Plan”) which provides for the grant of stock options and other equity awards to any employee who has not previously been an employee or director of the Company or who is commencing employment with the Company following a bona fide period of nonemployment by the Company (the “2019 Plan” and collectively with the 2010 Plan, 2011 Plan and 2015 Plan, the “Plans”). For a detailed discussion of the Plans, please see the discussion of option awards contained in the Stock-based Compensation sub-section under Note 14 to our financial statements included in our annual report on Form 10-K for the year ended December 31, 2020.2021. |
TABLE OF CONTENTS REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS The material in this report is being furnished and shall not be deemed “filed” with the Securities and Exchange Commission (SEC) for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall the material in this section be deemed to be “soliciting material” or incorporated by reference in any registration statement or other document filed with the SEC under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing. The audit committee is currently comprised of three non-employee directors, Matthew P. Young, who chairs the committee, John Scarlett, M.D. and Halley Gilbert. The audit committee has the responsibility and authority described in the audit committee charter, which has been approved by the Board. A copy of the audit committee charter is available on our website at www.cytomx.com. The audit committee is responsible for assessing the information provided by management and our independent registered public accounting firm in accordance with its business judgment. Management is responsible for the preparation, presentation and integrity of our financial statements and for the appropriateness of the accounting principles and reporting policies that are used. Management is also responsible for testing the system of internal controls and reports to the audit committee on any deficiencies found. Our independent registered public accounting firm, Ernst & Young LLP, is responsible for auditing the annual financial statements and for reviewing the unaudited interim financial statements. In fulfilling its oversight responsibilities, the audit committee has reviewed and discussed the audited financial statements in our Annual Report on Form 10-K for the year ended December 31, 20202021 with both management and our independent registered public accounting firm. The audit committee’s review included a discussion of the quality and integrity of the accounting principles, the reasonableness of significant estimates and judgments and the clarity of disclosures in the financial statements. The audit committee reviewed with our independent registered public accounting firm the overall scope and plan of the audit. In addition, it met with our independent registered public accounting firm, with and without management present, to discuss the results of our registered public accounting firm’s examination, the evaluation of our system of internal controls, the overall quality of our financial reporting and such other matters as are required to be discussed under generally accepted accounting standards in the United States. The audit committee has also received from, and discussed with, our independent registered public accounting firm the matters required to be discussed by Auditing Standard No. 16, “Communications with Audit Committees” issued byapplicable requirements of the Public Company Accounting Oversight Board (PCAOB).(“PCAOB”) and the Securities and Exchange Commission. The audit committee has discussed with Ernst & Young LLP that firm’s independence from management and our company, including the matters in the written disclosures and the letter regarding independence from Ernst & Young LLP required by applicable requirements of the PCAOB. The audit committee has also considered the compatibility of audit related and tax services with the auditors’ independence. Based on its evaluation, the audit committee has selected Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021.2022. In reliance on the reviews and discussions referred to above, the audit committee recommended to the Board, and the Board approved, the inclusion of the audited financial statements and management’s assessment of the effectiveness of our internal controls over financial reporting in the Annual Report on Form 10-K for the year ended December 31, 20202021 filed with the SEC. Audit Committee
Matthew P. Young (chairman)
John Scarlett, M.D.
Halley Gilbert TABLE OF CONTENTS The Board knows of no other matters that will be presented for consideration at the annual meeting. If any other matters are properly brought before the meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment. Our website address is http://www.cytomx.com. The information in, or that can be accessed through, our website is not deemed to be incorporated by reference into this proxy statement. Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and amendments to those reports are available, free of charge, on or through our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding our filings at www.sec.gov. In addition, a copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 20202021 filed with the SEC is available without charge upon written request to: Secretary, CytomX Therapeutics, Inc., at 151 Oyster Point Boulevard, Suite 400, South San Francisco, CA 94080. By Order of the Board of Directors | | | | /s/ Lloyd Rowland | | | | Lloyd A. Rowland | | | | General Counsel, Chief Compliance Officer and Secretary | | | | | | | | April 27, 2022 | | | |
April 28, 2021
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