SECURITIES EXCHANGE ACT OF 1934
| ¨ | Preliminary Proxy Statement | |
| ¨ | Confidential, for Use of the Commission Only (as permitted by Rule | |
| x | Definitive Proxy Statement | |
| ¨ | Definitive Additional Materials | |
| ¨ | Soliciting Material Pursuant to | |
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151
Time and Date |
| Place | Denali Therapeutics Inc., located at |
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Record Date | April |
| By order of the Board of Directors, | |||
 | |||
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| Ryan J. Watts, Ph.D. | |||
President, Chief Executive Officerand Director | |||
| South San Francisco, California | |||
| April | |||
18, 2019.
| Page | ||||
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May 30, 2019
Our board of directors
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.At
Beneficial Owners: Shares Registered in the Name of a Broker, Bank or Other Nominee. If you are the beneficial owner of your shares, you must contact the broker, bank or other nominee holding your shares and follow their instructions to change your vote or revoke your proxy.What is the effect of giving a proxy?Proxies are solicited by and on behalf of our board of directors. The persons named in the proxy have been designated as proxy holders by our board of directors. When a proxy is properly dated, executed and returned, the shares represented by the proxy will be voted at the Annual Meeting in accordance with the instructions of the stockholder. If no specific instructions are given, however, the shares will be voted in accordance with the recommendations of our board of directors. If any matters not described in this proxy statement are properly presented at the Annual Meeting, the proxy holders will use their own judgment to determine how to vote your shares. If the Annual Meeting is postponed or adjourned, the proxy holders can vote your shares on the new meeting date, unless you have properly revoked your proxy, as described above.What if I do not specify how my shares are to be voted?Stockholder of Record: Shares Registered in Your Name. If you are a stockholder of record and you submit a proxy but you do not provide voting instructions, your shares will be voted:FOR the election of each of the three directors nominated by our board of directorsthe Board and named in this proxy statement as Class III directors to serve for a three-year term (Proposal No. 1);
An abstention represents a stockholder’s affirmative choice to decline to vote on a proposal. If a stockholder indicates on its proxy card that it wishes to abstain from voting its shares, or if a broker, bank or other nominee holding its customers’ shares of record causes abstentions to be recorded for shares, these shares will be considered present and entitled to vote at the Annual Meeting. As a result, abstentions will be counted for purposes of determining the presence or absence of a quorum and will also count as votes against a proposal in cases where approval of the proposal requires the affirmative vote of a majority of the shares present and entitled to vote at the Annual Meeting (e.g., Proposal No. 2). However, because the outcome of Proposal No. 1 (election of directors) will be determined by a plurality vote, abstentions will have no impact on the outcome of such proposal as long as a quorum exists. power with respect to such proposal and has not received voting instructions from the beneficial owner of the shares. Brokernon-votes will be counted for purposes of calculating whether a quorum is present at the Annual Meeting but will not be counted for purposes of determining the number of votes cast. Therefore, a brokernon-vote will make a quorum more readily attainable but will not otherwise affect the outcome of the vote on any proposal. stockholders, our Secretary must receive the written proposal at our principal executive offices not later than December Beneficial Owners: Shares Registered in the Name of a Broker, Bank or Other Nominee. If you are a beneficial owner and you do not provide your broker, bank or other nominee that holds your shares with voting instructions, then your broker, bank or other nominee will determine if it has discretion to vote on each matter. Brokers do not have discretion to vote onnon-routine matters. Proposal No. 1 (election of directors) is anon-routine matter, while Proposal No. 2 (ratification of appointment of independent registered public accounting firm) is a routine matter. As a result, if you do not provide voting instructions to your broker, bank or other nominee, then your broker, bank or other nominee may not vote your shares with respect to Proposal No. 1, which would result in a “brokernon-vote,” but may, in its discretion, vote your shares with respect to Proposal No. 2. For additional information regarding brokernon-votes, see “What are the effects of abstentions and brokernon-votes?” below.-4-What are the effects of abstentions and broker non-votes?non-votes?A brokernon-vote occurs when a broker, bank or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker, bank or other nominee does not have discretionary votingWhat is a quorum?A quorum is the minimum number of shares required to be present at the Annual Meeting for the meeting to be properly held under our bylaws and Delaware law. A majority of the shares of common stock outstanding and entitled to vote, in person or by proxy, constitutes a quorum for the transaction of business at the Annual Meeting. As noted above, as of the Record Date, there were a total of 94,441,78295,437,937 shares of common stock outstanding, which means that 47,220,89247,718,970 shares of common stock must be represented in person or by proxy at the Annual Meeting to have a quorum. If there is no quorum, a majority of the shares present at the Annual Meeting may adjourn the meeting to a later date.How many votes are needed for approval of each proposal?•Proposal No. 1: The election of Class I directors requires a plurality vote of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote thereon to be approved. This means that the three nominees who receive the most FOR votes will be elected. You may (i) vote FOR all nominees, (ii) WITHHOLD your vote as to all nominees, or (iii) vote FOR all nominees except for those specific nominees from whom you WITHHOLD your vote. Any shares not voted FOR a particular nominee (whether as a result of voting withheld or a brokernon-vote) will not be counted in such nominee’s favor and will have no effect on the outcome of the election. If you WITHHOLD your vote as to all nominees, you will be deemed to have abstained from voting on Proposal No. 1, and such abstention will have no effect on the outcome of the proposal.•Proposal No. 2: The ratification of the appointment of Ernst & Young LLP requires an affirmative vote of a majority of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote thereon to be approved. You may vote FOR, AGAINST or ABSTAIN. If you ABSTAIN from voting on Proposal No. 2, the abstention will have the same effect as a vote AGAINST the proposal.Proposal No. 1: The election of Class II directors requires a plurality vote of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote thereon to be approved. This means that the three nominees who receive the most FOR votes will be elected. You may (i) vote FOR all nominees, (ii) WITHHOLD your vote as to all nominees, or (iii) vote FOR all nominees except for those specific nominees from whom you WITHHOLD your vote. Any shares not voted FOR a particular nominee (whether as a result of voting withheld or a broker non-vote) will not be counted in such nominee’s favor and will have no effect on the outcome of the election. If you WITHHOLD your vote as to all nominees, you will be deemed to have abstained from voting on Proposal No. 1, and such abstention will have no effect on the outcome of the proposal.Proposal No. 2: The ratification of the appointment of Ernst & Young LLP requires an affirmative vote of a majority of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote thereon to be approved. You may vote FOR, AGAINST or ABSTAIN. If you ABSTAIN from voting on Proposal No. 2, the abstention will have the same effect as a vote AGAINST the proposal.-5-How are proxies solicited for the Annual Meeting and who is paying for such solicitation?Our board of directors is soliciting proxies for use at the Annual Meeting by means of the proxy materials. We will bear the entire cost of proxy solicitation, including the preparation, assembly, printing, mailing and distribution of the proxy materials. Copies of solicitation materials will also be made available upon request to brokers, banks and other nominees to forward to the beneficial owners of the shares held of record by such brokers, banks or other nominees. The original solicitation of proxies may be supplemented by solicitation by telephone, electronic communication, or other means by our directors, officers, employees or agents. No additional compensation will be paid to these individuals for any such services, although we may reimburse such individuals for their reasonableout-of-pocket expenses in connection with such solicitation. We do not plan to retain a proxy solicitor to assist in the solicitation of proxies.If you choose to access the proxy materials and/or vote over the Internet, you are responsible for Internet access charges you may incur. If you choose to vote by telephone, you are responsible for telephone charges you may incur.What does it mean if I received more than one Notice?If you receive more than one Notice, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions on each Notice to ensure that all of your shares are voted.Is my vote confidential?Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either within Denali or to third parties, except as necessary to meet applicable legal requirements, to allow for the tabulation of votes and certification of the vote, or to facilitate a successful proxy solicitation.I share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials?We have adopted anSEC-approved procedure called “householding,” which has been approved by the SEC. Under this procedure, we will deliver only one copy of our Notice of Internet Availability of Proxy Materials, and for those stockholders that received a paper copy of proxy materials in the mail, one copy of our annual report to stockholders and this proxy statement, to multiple stockholders who share the same address (if they appear to be members of the same family) unless we have received contrary instructions from an affected stockholder. Stockholders who participate in householding will continue to receive separate proxy cards if they received a paper copy of proxy materials in the mail. This procedure reduces our printing and mailing costs. Upon written or oral request, we will promptly deliver a separate copy of the proxy materials and annual report to any stockholder at a shared address to which we delivered a single copy of any of these documents. To receive a separate copy, or, if you are receiving multiple copies, to request that we only send a single copy of next year’s proxy materials and annual report, you may contact us as follows:Denali Therapeutics Inc.Attention: Secretary151161 Oyster Point Blvd., 2nd Floor
South San Francisco, California 94080
(650)866-8548Stockholders who hold shares in street name may contact their brokerage firm, bank, broker-dealer or other nominee to request information about householding.-6-How can I find out the results of the voting at the Annual Meeting?Preliminary voting results will be announced at the Annual Meeting. In addition, final voting results will be published in a current report on Form8-K that we expect to file within four business days after the Annual Meeting. If final voting results are not available to us at that time, we intend to file a Form8-K to publish preliminary results and, within four business days after the final results are known to us, file an amendment to the Form8-K to publish the final results.What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders or to nominate individuals to serve as directors?Stockholder ProposalsStockholders may present proper proposals for inclusion in our proxy statement and for consideration at the next annual meeting of stockholders by submitting their proposals in writing to our Secretary in a timely manner. For a stockholder proposal to be considered for inclusion in our proxy statement for our 20192020 annual meeting of27, 2018.20, 2019. In addition, stockholder proposals must comply with the requirements ofRule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Stockholder proposals should be addressed to:Denali Therapeutics Inc.Attention: Secretary151161 Oyster Point Blvd., 2nd Floor
South San Francisco, California 94080
(650)866-8548Our bylaws also establish an advance notice procedure for stockholders who wish to present a proposal before an annual meeting of stockholders but do not intend for the proposal to be included in our proxy statement. Our bylaws provide that the only business that may be conducted at an annual meeting is business that is (i) specified in our proxy materials with respect to such meeting, (ii) otherwise properly brought before the annual meeting by or at the direction of our board of directors, or (iii) properly brought before the annual meeting by a stockholder of record entitled to vote at the annual meeting who has delivered timely written notice to our Secretary, which notice must contain the information specified in our bylaws. To be timely for our 20192020 annual meeting of stockholders, our Secretary must receive the written notice at our principal executive offices:•not earlier than February 10, 2019;andnot earlier than February 3, 2020; andnot later than March 12, 2019.4, 2020.
Name | Class | Age | Position | Director Since | Current Term Expires | Expiration of Term For Which Nominated | ||||||||||||||||
1. Director Nominees | ||||||||||||||||||||||
Douglas Cole, M.D.(1) | I | 57 | Director | 2015 | 2018 | 2021 | ||||||||||||||||
Jay Flatley(1)(2) | I | 65 | Director | 2015 | 2018 | 2021 | ||||||||||||||||
Marc Tessier-Lavigne, Ph.D. (2) | I | 58 | Director | 2015 | 2018 | 2021 | ||||||||||||||||
2. Continuing Directors | ||||||||||||||||||||||
Peter Klein(1) | II | 55 | Director | 2018 | 2019 | — | ||||||||||||||||
Robert Nelsen(2) | II | 54 | Director | 2015 | 2019 | — | ||||||||||||||||
Vicki Sato, Ph.D.(3) | II | 69 | Chairperson of the Board | 2015 | 2019 | — | ||||||||||||||||
David Schenkein, M.D. (3) | III | 60 | Director | 2015 | 2020 | — | ||||||||||||||||
Ryan J. Watts, Ph.D. | III | 42 | President, Chief Executive Officer and Director | 2015 | 2020 | — | ||||||||||||||||
| Name | Class | Age | Position | Director Since | Current Term Expires | Expiration of Term For Which Nominated | ||||||
| 1. Director Nominees | ||||||||||||
Peter Klein(1) | II | 56 | Director | 2018 | 2019 | 2022 | ||||||
Robert Nelsen(2) | II | 55 | Director | 2015 | 2019 | 2022 | ||||||
Vicki Sato, Ph.D.(3) | II | 70 | Chairperson of the Board | 2015 | 2019 | 2022 | ||||||
| 2. Continuing Directors | ||||||||||||
Douglas Cole, M.D.(1) | I | 58 | Director | 2015 | 2021 | — | ||||||
Jay Flatley(1)(2) | I | 66 | Director | 2015 | 2021 | — | ||||||
Marc Tessier-Lavigne, Ph.D.(2) | I | 59 | Director | 2015 | 2021 | — | ||||||
David Schenkein, M.D.(3) | III | 61 | Director | 2015 | 2020 | — | ||||||
Jennifer Cook(3) | III | 53 | Director | 2018 | 2020 | — | ||||||
| Ryan J. Watts, Ph.D. | III | 43 | President, Chief Executive Officer and Director | 2015 | 2020 | — | ||||||
| (1) | Member of our audit committee |
| (2) | Member of our compensation committee |
| (3) | Member of our corporate governance and nominating committee |
Peter Kleinhas served as a member of our board of directors since March 2018. Mr. Klein served as Chief Financial Officer of William Morris Endeavor Entertainment, LLC (“WME”), a marketing firm, from January 2014 to June 2014. Prior to joining WME, Mr. Klein spent over 11 years at Microsoft Corporation, including serving as Chief Financial Officer from November 2009 until May 2013. Mr. Klein currently serves on the boards of directors of F5 Networks Inc., a software company, and Apptio, Inc., a software company. Mr. Klein holds a B.A. in history from Yale University and an M.B.A. from the University of Washington. Hutchinson Cancer Research Center. Mr. Nelsen received his M.B.A. from the University of Chicago and his B.S. degrees from the University of Puget Sound with majors in biology.Nominees for DirectorDouglas Cole, M.D. has served as a member of our board of directors since May 2015. Dr. Cole joined Flagship Pioneering, which conceives, creates, resources and developsfirst-in-category life sciences companies, in 2001, and is currently a Managing Partner focused on life science investments. Dr. Cole currently serves on the board of directors of Quanterix Corporation, a public company digitalizing bio marker analysis to advance the science of precision health, and serves on the board of directors of a number of private companies. Previously, Dr. Cole served on the boards of directors of a number of public companies including Agios Pharmaceuticals, Receptos, AVEO Pharmaceuticals, Editas Medicine, Tetraphase Pharmaceuticals and Concert Pharmaceuticals. Dr. Cole received his M.D. from the University of Pennsylvania School of Medicine and his B.A. in English from Dartmouth College.We believe Dr. Cole is qualified to serve on our board of directors because of his substantial experience as a venture capital investor in emerging life sciences companies, as well as his experience serving on the boards of directors for several life sciences companies.Jay Flatleyhas served as a member of our board of directors since April 2015. Since July 2016, Mr. Flatley has served as the Executive Chairman of the board of directors of Illumina, a public company focused on sequencing- and array-based solutions for genetic analysis. From January 2016 to July 2016, he served as Illumina’s Chairman and has served as a member of its board of directors since October 1999. From December 2013 to July 2016, Mr. Flatley served as the Chief Executive Officer of Illumina and as the President and Chief Executive Officer from October 1999 to December 2013. Prior to joining Illumina, Mr. Flatley wasCo-founder, President, Chief Executive Officer, and a director of Molecular Dynamics, a life sciences company focused on genetic discovery and analysis, from July 1994 until its sale to Amersham Pharmacia Biotech in September 1998. Mr. Flatley is an advisory board member for U.C. San Diego’s Moore Cancer Center, serves on the board of trustees of the Salk Institute and the board of directors at Coherent, a photonics manufacturing company, and previously served on the board of directors of Juno Therapeutics. Mr. Flatley received his B.S. and M.S. in Industrial Engineering from Stanford University and his B.A. in Economics from Claremont McKenna College.We believe Mr. Flatley is qualified to serve on our board of directors because of his extensive leadership experience and industry knowledge.Marc Tessier-Lavigne, Ph.D.is one of ourco-founders and has served as a member of our board of directors since March 2015. From March 2015 to August 2016, Dr. Tessier-Lavigne served as the Chairman of our board of directors. Since September 2016, Dr. Tessier-Lavigne has served as President of Stanford University. From March 2011 to September 2016, he served as President of the Rockefeller University, as well as professor and head of the Laboratory of Brain Development and Repair. From September 2003 to March 2011, Dr. Tessier-Lavigne served in positions of increasing responsibility at Genentech, where in 2009 he was named Executive Vice President for Research and Chief Scientific Officer. He currently serves on the board of directors of Regeneron Pharmaceuticals. Previously, he served on the boards of directors of Pfizer, Juno Therapeutics and Agios Pharmaceuticals. Dr. Tessier-Lavigne received his Ph.D. in Neurophysiology from University College London, his B.A. in Philosophy and Physiology from Oxford University and his B.Sc. in Physics from McGill University. He conducted postdoctoral work at the MRC Developmental Neurobiology Unit in London and at Columbia University.We believe Dr. Tessier-Lavigne is qualified to serve on our board of directors because of his pioneering research, scientific knowledge, service on boards of directors of public companies in the life sciences industry and leadership in the biotechnology industry.We believe Mr. Klein’s extensive experience as a senior finance executive, including as the chief financial officer of one of the world’s largest software companies, qualifies him to serve on our board.-9-Robert Nelsen has served as a member of our board of directors since May 2015. Mr. Nelsen has served as aCo-founder and Managing Director of ARCH Venture Partners, a venture capital firm focused on early-stage technology companies, or its affiliated entities, since 1986. Mr. Nelsen is a director of Sienna Biopharmaceuticals and Syros Pharmaceuticals, along with certain private companies. Previously, Mr. Nelsen served on the boards of directors of Agios Pharmaceuticals, KYTHERA Biopharmaceuticals, Adolor Corporation, Illumina, Fate Therapeutics, deCODE genetics, NeurogesX, Bellerophon Therapeutics, Sage Therapeutics, Juno Therapeutics and Caliper Life Sciences. He also previously served as trustee of FredEconomicseconomics and Biology.We believe Mr. Nelsen is qualified to serve on our board of directors because of his experience as a venture capitalist building and serving on the boards of directors of many public and private emerging companies, including biotechnology companies.Vicki Sato, Ph.D.has served as a member of our board of directors since April 2015 and as Chairperson of our board of directors since August 2016. From September 2006 until July 2017, Dr. Sato served as a professor of management practice at Harvard Business School. From July 2005 until October 2015, she also had an appointment as Professor of the Practice in the Department of Molecular and Cell Biology at Harvard University. From September 2000 to May 2005, Dr. Sato served as the President of Vertex Pharmaceuticals, a pharmaceutical company, with general management responsibility for business and corporate development, commercial operations, legal and finance, in addition to research and development. From 1992 until 2000, she served as the Chief Scientific Officer and Senior Vice President of Research and Development of Vertex Pharmaceuticals. Dr. Sato joined Vertex Pharmaceuticals in 1992, after serving as Vice President of Research at Biogen, a biotechnology company, where she also served as a member of the Scientific Board. Dr. Sato serves on the boards of directors of Bristol Myers Squibb, Syros Pharmaceuticals and BorgWarner. She previously served on the board of directors of PerkinElmer until April 2017. Dr. Sato received her A.M. and Ph.D. degrees from Harvard University and her A.B. in Biologybiology from Radcliffe College.We believe Dr. Sato is qualified to serve on our board of directors because of her extensive industry experience and leadership experience as a senior executive and director of several life sciences companies.David Schenkein,Continuing DirectorsDouglas Cole, M.D. has served as a member of our board of directors since May 2015. Dr. Cole joined Flagship Pioneering, which conceives, creates, resources and develops first-in-category life sciences companies, in 2001, and is currently a Managing Partner focused on life science investments. Dr. Cole currently serves on the board of directors of Quanterix Corporation, a public company digitalizing bio marker analysis to advance the science of precision health, and serves on the board of directors of a number of private companies. Previously, Dr. Cole served on the boards of directors of a number of public companies including Agios Pharmaceuticals, Receptos, AVEO Pharmaceuticals, Editas Medicine, Tetraphase Pharmaceuticals and Concert Pharmaceuticals. Dr. Cole received his M.D. from the University of Pennsylvania School of Medicine and his B.A. in english from Dartmouth College.We believe Dr. Cole is qualified to serve on our board of directors because of his substantial experience as a venture capital investor in emerging life sciences companies, as well as his experience serving on the boards of directors for several life sciences companies.-10-Jay Flatley has served as a member of our board of directors since April 2015. Since July 2016, Mr. Flatley has served as the Executive Chairman of the board of directors of Illumina, a public company focused on sequencing- and array-based solutions for genetic analysis. From January 2016 to July 2016, he served as Illumina’s Chairman and has served as a member of its board of directors since October 1999. From December 2013 to July 2016, Mr. Flatley served as the Chief Executive Officer of Illumina and as the President and Chief Executive Officer from October 1999 to December 2013. Prior to joining Illumina, Mr. Flatley was co-founder, President, Chief Executive Officer, and a director of Molecular Dynamics, a life sciences company focused on genetic discovery and analysis, from July 1994 until its sale to Amersham Pharmacia Biotech in September 1998. Mr. Flatley is an advisory board member for U.C. San Diego’s Moore Cancer Center, serves on the board of trustees of the Salk Institute and on the board of directors at Coherent, a photonics manufacturing company, and at Illumina, a gene technology company, and previously served on the board of directors of Juno Therapeutics. Mr. Flatley received his B.S. and M.S. in industrial engineering from Stanford University and his B.A. in economics from Claremont McKenna College.We believe Mr. Flatley is qualified to serve on our board of directors because of his extensive background in the life sciences industry and leadership experience as a senior executive of companies in the life sciences industry.Marc Tessier-Lavigne, Ph.D. is one of our co-founders and has served as a member of our board of directors since March 2015. From March 2015 to August 2016, Dr. Tessier-Lavigne served as the Chairman of our board of directors. Since September 2016, Dr. Tessier-Lavigne has served as President of Stanford University. From March 2011 to September 2016, he served as President of the Rockefeller University, as well as professor and head of the Laboratory of Brain Development and Repair. From September 2003 to March 2011, Dr. Tessier-Lavigne served in positions of increasing responsibility at Genentech, where in 2009 he was named Executive Vice President for Research and Chief Scientific Officer. He currently serves on the board of directors of Regeneron Pharmaceuticals. Previously, he served on the boards of directors of Pfizer, Juno Therapeutics and Agios Pharmaceuticals. Dr. Tessier-Lavigne received his Ph.D. in neurophysiology from University College London, his B.A. in philosophy and physiology from Oxford University and his B.Sc. in physics from McGill University. He conducted postdoctoral work at the MRC Developmental Neurobiology Unit in London and at Columbia University.We believe Dr. Tessier-Lavigne is qualified to serve on our board of directors because of his pioneering research, scientific knowledge, experience as one of our co-founders, service on boards of directors of public companies in the life sciences industry and leadership in the biotechnology industry.David Schenkein, M.D. has served as a member of our board of directors since April 2015. Dr. Schenkein hasis currently a general partner in GV (Google Ventures). He is also Executive Chairman of the board of directors of Agios Pharmaceuticals, a pharmaceuticals company. Previously, Dr. Schenkein served as President and Chief Executive Officer of Agios Pharmaceuticals a pharmaceuticals company.from August 2009 to February 2019. From April 2006 to July 2009, Dr. Schenkein served as a Senior Vice President of Oncology Development at Genentech. Dr. Schenkein currently serves on the boards of directors of Agios Pharmaceuticals and bluebird bio. Previously, Dr. Schenkein served on the board of directors of Foundation Medicine. He also currently serves as an adjunct attending physician in hematology at Tufts Medical Center. Dr. Schenkein received his M.D. from the State University of New York Upstate Medical School and his B.A. in Chemistrychemistry from Wesleyan University.We believe that Dr. Schenkein is qualified to serve on our board of directors because of his extensive background in the biotechnology industry and leadership experience as a senior executive and director of biotechnology companies.-11-Jennifer Cook has served on our board of directors since November 2018. Since January 2018 Ms. Cook has served as the Chief Executive Officer of GRAIL. Previously, Ms. Cook was at Roche Pharmaceuticals and Genentech, where she held a number of senior management positions; from January 2017 to December 2017, Ms. Cook served as Senior Vice President, Global Head of Clinical Operations for Roche Pharmaceuticals; from September 2013 to December 2016, Ms. Cook served as Head of Region Europe Pharma for Roche Pharmaceuticals; and from July 2010 to September 2013, Ms. Cook served as the Senior Vice President, Business Unit Head Immunology and Ophthalmology for Genentech. Ms. Cook holds a B.A. in human biology and an M.S. in biology from Stanford University, as well as an M.B.A. from the Haas School of Business at University of California, Berkeley.We believe Ms. Cook’s extensive experience as a senior management executive of healthcare and biotechnology companies, including as the senior vice president of one of the world’s largest healthcare companies, qualifies her to serve on our board of directors.Ryan J. Watts, Ph.D.is one of ourco-founders and has served as a member of our board of directors since March 2015 and as our President and Chief Executive Officer since August 2015. From March 2015 to August 2015, Dr. Watts acted as our interim President, Chief Scientific Officer and Head of Research and Development. Dr. Wattsco-founded and joined Denali from Genentech, a biotechnology company, where he held various research and leadership roles of increasing responsibility between 2004 and 2015; from 2013 to February 2015, Dr. Watts served as Director of the Department of Neuroscience; from 2010 to 2013, Dr. Watts served as Associate Director of the Department of Neuroscience; and from 2004 to 2010, Dr. Watts led or served on numerous research and early development teams. In addition, Dr. Watts led Genentech’s blood-brain barrier team between 2009 and 2015, and he served as Chair of the Joint Research Committee with AC Immune between 2006 and 2010 (program currently in Phase 3) and between 2012 and 2014 (program currently in Phase 1). Dr. Watts received his Ph.D. in Biological Sciencesbiological sciences from Stanford University and his B.S. in Biologybiology from the University of Utah. Dr. Watts has authored andco-authored more than 60 scientific papers and has been an invited peer reviewer in numerous publications includingCell,Nature Biotechnology,Nature Medicine,Neuron,Science andScience Translational Medicine.We believe Dr. Watts is qualified to serve on our board of directors because of the perspective and experience he provides as one of our foundersco-founders and as our President and Chief Executive Officer, as well as his broad experience within the pharmaceutical industry, particularly in the area of neuroscience and drug discovery and development.Director IndependenceOur common stock is listed on The NASDAQ Global Select Market. Under the rules of NASDAQ, independent directors must comprise a majority of a listed company’s board of directors within a specified period after the completion of our initial public offering. In addition, the rules of NASDAQ require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and governance committees be independent. Audit committee members and compensation committee members must also satisfy the independence criteria set forth inRule 10A-3 andRule 10C-1, respectively, under the Exchange Act. Under the rules of NASDAQ, 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 ofRule 10A-3 and under the rules of NASDAQ, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of our audit committee, our board of directors, or any other board committee: (1) accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries; or (2) be an affiliated person of the listed company or any of its subsidiaries.-12-To be considered independent for purposes ofRule 10C-1 and under the rules of NASDAQ, the board of directors must affirmatively determine that the member of the compensation committee is independent, including a consideration of all factors specifically relevant to determining whether the director has a relationship to the company which is material to that director’s ability to be independent from management in connection with the duties of a compensation committee member, including, but not limited to: (i) the source of compensation of such director, including any consulting, advisory or other compensatory fee paid by the company to such director; and (ii) whether such director is affiliated with the company, a subsidiary of the company or an affiliate of a subsidiary of the company.Our board of directors has undertaken a review of its composition, the composition of its committees and the independence of our directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon information requested from and provided by each director concerning his background, employment and affiliations, including family relationships, our board of directors has determined that none of Drs.Dr. Cole, Sato and Schenkein andMs. Cook, Messrs. Flatley, Klein, and Nelsen, Dr. Sato, Dr. Schenkein and Dr. Tessier-Lavigne, representing sixeight of our eightnine directors, 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 and the director nominee is “independent” as that term is defined under the rules of NASDAQ. Drs.Dr. Watts and Tessier-Lavigne areis not independent under NASDAQ’s independence standards. Our board of directors also determined that Messrs. Klein (chairperson) and Flatley and Dr. Cole, who comprise our audit committee, and Messrs. Flatley and Nelsen and Dr. Tessier-Lavigne, who comprise two of our three compensation committee, members, satisfy the independence standards for committee members established by applicable SEC rules and the listing standards of NASDAQ. We intend to rely on thephase-in rules of NASDAQ with respect to the independence of our compensation committee.In making these determinations, our board of directors considered the current and prior relationships that eachnon-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by eachnon-employee director, and the transactions involving them described in the section titled “Related Party Transactions.”There are no family relationships among any of our directors or executive officers.Board Leadership StructureOur board of directors is currently chaired by Dr. Sato. As a general policy, our board of directors believes that separation of the positions of Chairperson and Chief Executive Officer reinforces the independence of the board of directors from management, creates an environment that encourages objective oversight of management’s performance and enhances the effectiveness of the board of directors as a whole. As such, Dr. Watts serves as our President and Chief Executive Officer while Dr. Sato serves as our Chairperson of the board of directors but is not an officer. We expect and intend the positions of Chairperson of the board of directors and Chief Executive Officer to continue to be held by two individuals in the future.Board Meetings and CommitteesDuring 2017,2018, our board of directors held fivefour meetings (including regularly scheduled and special meetings), and each director attended at least 75% of the aggregate of (i) the total number of meetings of our board of directors held during the period for which he or she served as a director and (ii) the total number of meetings held by all committees of our board of directors on which he or she served during the periods that he or she served.It is the policy of our board of directors to regularly have separate meeting times for independent directors without management. Although we do not have a formal policy regarding attendance by members of our board of directors at annual meetings of stockholders, we encourage, but do not require, our directors to attend.-13-We have established an audit committee, a compensation committee and a corporate governance and nominating committee. We believe that the composition of these committees will meet the criteria for independence under, and the functioning of these committees comply with the requirements of, the Sarbanes-Oxley Act of 2002, the rules of the NASDAQ Global Select Market, and SEC rules and regulations. We intend to comply with the requirements of the NASDAQ Global Select Market with respect to committee composition of independent directors. Each committee has the composition and responsibilities described below.Audit CommitteeThe members of our audit committee are Messrs. Klein (appointed March 2018) and Flatley and Dr. Cole, each of whom is anon-employee member of our board of directors. Mr. Klein serves as the chairperson of our audit committee. All members of our audit committee meet the requirements for independence and financial literacy of audit committee members under current NASDAQ listing standards and SEC rules and regulations. Our audit committee chairperson, Mr. Klein, is our audit committee financial expert, as that term is defined under the SEC rules implementing Section 407 of the Sarbanes-Oxley Act of 2002, and possesses financial sophistication, as defined under NASDAQ listing standards. The responsibilities of our audit committee include, among other things:selecting and hiring the independent registered public accounting firm to audit our financial statements;
three meetings.
anniversary of the initial award’s grant date and as to 1/48th of the shares subject to the initial award on each monthly anniversary of the date of grant thereafter (and if there is no corresponding day, on the last day of the month), in each case, provided that thenon-employee director continues to serve as anon-employee director through the applicable vesting date.
On the effective date of our initial public offering in December 2017, each individual who then served as anon-employee director automatically was granted a nonstatutory stock option with a grant date value of $600,000 (with the shares covered by the award rounded down to the nearest whole share) (the “Continuing Director IPO Award”). Subject to the terms of the policy, the Continuing Director IPO Award is scheduled to vest and become exercisable as to 25% of the shares subject to the Continuing Director IPO Award on theone-year anniversary of the date of grant and as to 1/48th of the shares subject to the Continuing Director IPO Award on each monthly anniversary of the date of grant thereafter (and if there is no corresponding day, on the last day of the month), in each case, provided that thenon-employee director continues to serve as anon-employee director through the applicable vesting date.
Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(1)(2) | Total ($) | |||||||||
Vicki Sato, Ph.D. | $ | 33,265 | $ | 601,184 | $ | 634,449 | ||||||
Douglas Cole, M.D. | 3,574 | 601,184 | 604,758 | |||||||||
Jay Flatley | 32,049 | 601,184 | 633,233 | |||||||||
Peter Klein(3) | — | — | — | |||||||||
Robert Nelsen | 3,060 | 601,184 | 604,244 | |||||||||
David Schenkein, M.D. | 31,638 | 601,184 | 632,822 | |||||||||
Marc Tessier-Lavigne, Ph.D. | 31,707 | 601,184 | 632,891 | |||||||||
| Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(1)(2) | Total ($) | |||||||||
| Vicki Sato, Ph.D. | $ | 78,000 | $ | 350,132 | $ | 428,132 | ||||||
| Douglas Cole, M.D. | 52,500 | 350,132 | 402,632 | |||||||||
| Jennifer Cook | 6,217 | 600,258 | 606,475 | |||||||||
| Jay Flatley | 54,042 | 350,132 | 404,174 | |||||||||
| Peter Klein | 43,694 | 600,151 | 643,845 | |||||||||
| Robert Nelsen | 33,750 | 350,132 | 383,882 | |||||||||
| David Schenkein, M.D. | 54,000 | 350,132 | 404,132 | |||||||||
| Marc Tessier-Lavigne, Ph.D. | 55,000 | 350,132 | 405,132 | |||||||||
| (1) | This column reflects the aggregate grant date fair value of stock options granted during |
| (2) | As of December 31, |
| 2017 | 2016 | |||||||
Audit Fees(1) | $ | 1,393,000 | $ | 268,000 | ||||
Audit-Related Fees(2) | 71,000 | 5,000 | ||||||
Tax Fees(3) | — | 12,000 | ||||||
All Other Fees(4) | — | — | ||||||
|
|
|
| |||||
| $ | 1,464,000 | $ | 285,000 | |||||
| 2018 | 2017 | ||||||
Audit Fees(1) | $ | 824,000 | $ | 1,393,000 | |||
Audit-Related Fees(2) | 25,000 | 71,000 | |||||
Tax Fees(3) | 10,000 | — | |||||
All Other Fees(4) | — | — | |||||
| $ | 859,000 | $ | 1,464,000 | ||||
| (1) | Audit Fees consist of fees billed for professional services performed by Ernst & Young LLP for the audit of our annual consolidated financial statements, the review of interim financial statements, and related services that are normally provided in connection with registration statements, including the registration statement for our initial public offering. Included in the 2017 Audit Fees is $908,000 of fees billed in connection with our initial public offering. |
| (2) | Audit-Related Fees include fees billed by Ernst & Young LLP for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements. |
| (3) | Tax Fees consist of fees for professional services, including tax consulting and compliance performed by Ernst & Young LLP. |
| (4) | There were no Other Fees incurred in |
2019.Auditor IndependenceIn 2017,2018, there were no other professional services provided by Ernst & Young LLP that would have required our audit committee to consider their compatibility with maintaining the independence of Ernst & Young LLP.-23-Audit Committee Policy onPre-Approval of Audit and PermissibleNon-Audit Services of Independent Registered Public Accounting FirmOur audit committee has established a policy governing our use of the services of our independent registered public accounting firm. Under the policy, our audit committee is required topre-approve all audit and permissiblenon-audit services performed by our independent registered public accounting firm in order to ensure that the provision of such services does not impair such accounting firm’s independence. All fees paid to Ernst & Young LLP for our fiscal years ended December 31, 20162017 and 20172018 werepre-approved by our audit committee.Vote RequiredThe ratification of the appointment of Ernst & Young LLP requires the affirmative vote of a majority of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote thereon. Abstentions will have the effect of a vote AGAINST the proposal.THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR OUR FISCAL YEAR ENDING DECEMBER 31, 2018.-24-AUDIT COMMITTEE REPORTThe information contained in the following Audit Committee Report shall not be deemed to be soliciting material or to be filed with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that Denali Therapeutics Inc. (the “Company”) specifically incorporates it by reference in such filing.The audit committee serves as the representative of our board of directors with respect to its oversight of:our accounting and financial reporting processes and the audit of our financial statements;
Report on Form10-K for the fiscal year ended December 31, 20172018 for filing with the Securities and Exchange Commission. The audit committee also has selected Ernst & Young LLP as the independent registered public accounting firm for fiscal year 2018.2019. Our board of directors recommends that stockholders ratify this selection at the Annual Meeting.
Douglas Cole, M.D.
Name | Age | Position | ||||
Ryan J. Watts, Ph.D. | 43 | President, Chief Executive Officer and Director | ||||
Alexander O. Schuth, M.D. | 45 | Chief Operating Officer and Secretary | ||||
Steve E. Krognes | 50 | Chief Financial Officer and Treasurer | ||||
Carole Ho, M.D. | 46 | Chief Medical Officer | ||||
Johnson & Johnson, a health care products company. From June 2002 to November 2006, she was an instructor in the Department of Neurology and Neurological Sciences at Stanford University. Dr. Ho completed a residency in neurology at Partners Neurology Residency of the Massachusetts General and Brigham and Women’s Hospital and was board certified in neurology and psychiatry between 2004 and 2014. Dr. Ho received her M.D. from Cornell University and her B.S. in Biochemical Sciences from Harvard College.
compensation for its approval.
Name and Principal Position Ryan J. Watts, Ph.D. President and Chief Executive Officer Alexander O. Schuth, M.D. Chief Operating Officer and Secretary Steve E. Krognes Chief Financial Officer and Treasurer Carole Ho, M.D. Chief Medical Officer-29-Summary Compensation TableThe following table provides information regarding the compensation of our named executive officers during the years ended December 31, 20162017 and 2017. Year Salary ($) Bonus ($)(1) Option
Awards ($)(2) All Other
Compensation
($)(3) Total ($) 2017 481,056 374,688 497,350 13,769 1,366,863 2016 450,000 157,500 — — 607,500 2017 369,008 200,000 497,350 10,579 1,076,937 2016 350,000 122,500 — — 472,500 2017 437,750 218,875 497,350 12,585 1,166,560 2016 425,000 398,750 (4) — — 823,750 2017 406,850 203,425 746,025 11,697 1,367,997 2016 395,000 138,250 495,600 — 1,028,850 Name and Principal Position Year Salary ($) Bonus ($)(1) Stock Awards ($)(2) Option
Awards ($)(3) All Other
Compensation
($)(4) Total ($) Ryan J. Watts, Ph.D. 2018 545,000 524,563 — 4,914,360 — 5,986,614 President and Chief Executive Officer 2017 481,056 374,688 — 497,350 13,769 1,366,863 Alexander O. Schuth, M.D. 2018 400,000 355,000 179,673 2,948,616 18,500 3,903,093 Chief Operating Officer and Secretary 2017 369,008 200,000 — 497,350 10,579 1,076,937 Steve E. Krognes 2018 455,260 393,682 179,673 2,948,616 24,000 4,001,231 Chief Financial Officer and Treasurer 2017 437,750 218,875 — 497,350 12,585 1,166,560 Carole Ho, M.D. 2018 423,124 371,187 179,673 2,948,616 12,869 3,935,469 Chief Medical Officer 2017 406,850 203,425 — 746,025 11,697 1,367,997 (1) The amounts included in this column reflect bonus payments earned in 20162017 and 2017.2018.(2) The amounts included in this column reflect the aggregate grant date fair value of restricted stock units granted during 2017 and 2018 based on the closing market price of the Company’s common stock on the date of grant. (3) The amounts included in this column reflect the aggregate grant date fair value of stock options granted during 20162017 and 20172018 computed in accordance with the provisions of Accounting Standards Codification (ASC) 718, Compensation—Stock Compensation.Compensation. The assumptions that we used to calculate these amounts are discussed in Note 911 to our audited consolidated financial statementsConsolidated Financial Statements for the year ended December 31, 20172018 included in our Annual Report on Form10-K for the year ended December 31, 2017.2018. These amounts do not reflect the actual economic value that will be realized by the named executive officer upon the vesting of the stock options, the exercise of the stock options, or the sale of the common stock underlying such stock options.(3)(4) The amounts included in this column reflect the dollar value of employer 401(k) matching contributions paid to each named executive officer. (4)The amount reported represents (i) the portion of thesign-on bonus from 2015 of $250,000, which was earned in October 2016 pursuant to the terms of Mr. Krognes’ employment agreement and (ii) a bonus of $148,750 based upon the achievement of company objectives for the year ended December 31, 2016, which was paid in January 2017. Had Mr. Krognes’ employment been terminated by us for cause or by Mr. Krognes other than for good reason, in each case before October 1, 2016, he would have been required to repay the signing bonuses paid to him, including the $250,000 that was paid to him upon the commencement of his employment with us on October 1, 2015.
2018 Name Ryan J. Watts, Ph.D. Alexander O. Schuth, M.D. Steve E. Krognes Carole Ho, M.D. The shares subject to the option will vest upon certain performance goals being met as follows, in each case subject to the named executive officer’s continued service to us: (a) 50% of the shares subject to the option-30-Outstanding Equity Awards at FiscalYear-End 2017The following table provides information regarding equity awards held by our named executive officers as of December 31, 2017. Option Awards Stock Awards Grant
Date(1) Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable Equity
incentive
awards:
number of
securities
underlying
unexercised
unearned
options (#) Option
Exercise
Price
($)(2) Option
Expiration
Date Number of
Shares of
Stock
That Have
Not
Vested (#) Market
Value of
Shares of
Stock
That
Have Not
Vested
($)(3) 03/13/2015 — — — — — 717,791 (4) 11,226,251 08/21/2015 — — 1,245,617 (5) 0.68 08/20/2025 — — 08/21/2015 — — — — — 99,666 (4) 1,558,776 03/08/2017 — 125,000 (6) — 5.28 03/07/2027 — — 08/22/2017 — 62,500 (7) — 9.60 08/21/2027 — — 03/13/2015 — — — — — 375,960 (8) 5,880,014 08/21/2015 — — 249,123 (5) 0.68 08/20/2025 — — 08/21/2015 — — — — — 52,207 (8) 816,517 03/08/2017 125,000 (9) — — 5.28 03/07/2027 — — 08/22/2017 — 62,500 (7) — 9.60 08/21/2027 — — 11/20/2015 — — 125,000 (5) 0.68 11/19/2025 — — 11/20/2015 — — — — — 229,169 (10) 3,584,203 03/08/2017 — 125,000 (6) — 5.28 03/07/2027 — — 08/22/2017 — 62,500 (7) — 9.60 08/21/2027 — — 08/21/2015 — — 125,000 (5) 0.68 08/20/2025 — — 08/21/2015 — — — — — 93,752 (11) 1,466,281 07/02/2016 33,380 80,730 (12) — 5.28 07/01/2026 — — 03/08/2017 140,625 (9) — — 5.28 03/07/2027 46,875 (13) 733,125 Option Awards Stock Awards Name Grant Date(1) Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Equity incentive awards: number of securities underlying unexercised unearned options (#) Option Exercise Price ($)(2) Option Expiration Date Number of Shares of Stock That Have Not Vested (#) Market Value of Shares of Stock That Have Not Vested ($)(3)Ryan J. Watts, Ph.D. 03/13/2015 — — — — — 102,567(4) 2,119,034 08/21/2015 — — 1,245,617(5) 0.68 08/20/2025 — — 08/21/2015 — — — — — 14,242(4) 294,240 03/08/2017 54,687(6) 70,313 — 5.28 03/07/2027 — — 08/22/2017 20,834(7) 41,666 — 9.60 08/21/2027 — — 02/26/2018 — 300,000(8) — 22.16 02/25/2028 — — Alexander O. Schuth, M.D. 03/13/2015 — — — — — 20,513(9) 423,799 08/21/2015 — — 249,123(5) 0.68 08/20/2025 — — 08/21/2015 — — — — — 2,847(9) 58,819 03/08/2017 117,898(10) — — 5.28 03/07/2027 — — 08/22/2017 14,974(7) 41,667 — 9.60 08/21/2027 — — 02/26/2018 — 180,000(8) — 22.16 02/25/2028 — — 08/20/2018 — — — — — 11,286(11) 179,673 Steve E. Krognes 11/20/2015 — — 125,000(5) 0.68 11/19/2025 — — 11/20/2015 — — — — — 104,171(12) 2,152,173 03/08/2017 54,688(6) 70,312 — 5.28 03/07/2027 — — 08/22/2017 20,834(7) 41,666 — 9.60 08/21/2027 — — 02/26/2018 — 180,000(8) — 22.16 02/25/2028 — — 08/20/2018 — — — — — 11,286(11) 179,673 Carole Ho, M.D. 08/21/2015 — — 125,000(5) 0.68 08/20/2025 — — 08/21/2015 — — — — — 31,253(13) 645,687 07/02/2016 34,895(14) 49,480 — 5.28 07/01/2026 — — 03/08/2017 140,625(10) — — 5.28 03/07/2027 — — 02/26/2018 — 180,000(8) — 22.16 02/25/2028 — — 08/20/2018 — — — — — 11,286(11) 179,673 (1) Each of the outstanding equity awards was granted pursuant to our 2015 Stock Incentive Plan (the “2015 Plan”) or the 2017 Plan. (2) This column represents the fair value of a share of our common stock on the date of grant, as determined by our board of directors. (3) This column represents the fair market value of the shares of our common stock as of December 31, 2017,2018, based on the closing price of our common stock, as reported on the NASDAQ Global Select Market, of $15.64$20.66 per share on December 29, 2017.31, 2018.(4) One-fourth of the total number of shares subject to each restricted stock grant vested on February 23, 2016, and one thirty-sixth of the remaining shares subject to each restricted stock grant is scheduled to vest monthly thereafter, subject to continued service to us through each such vesting date. In the event of a change of control, the vesting of the shares subject to the restricted stock grants shall be accelerated in part so that the number of shares, if any, that would otherwise have first become vested in the period between the date of change of control and the date on which all but the unvested shares that would have vested in the final 12 months of the vesting period shall have first become vested shall immediately become vested. The remaining number of shares representing the last 12 months of vesting shall continue to vest in accordance with the original vesting schedule within the next 12 months set forth in the award agreement, provided, however, that each such award shall be immediately vested in full if on or within 12 months following the consummation of the change of control, Dr. Watts’ employment with us is terminated without cause by us or by Dr. Watts for good reason, subject to Dr. Watts’ execution of a release of claims in our favor and the terms and conditions of the Severance Plan. -31-(5)
| vest upon (i) the date on which the reported closing price of our common stock on NASDAQ or the New York Stock Exchange (or other national securities exchange) has, for 90 consecutive trading days, equaled or exceeded $40.00 per share (subject to adjustments for any stock split, reverse stock split or certain other changes in capitalization), with the first day of the90-day measurement period no earlier than June 6, 2018, or (ii) the date on which we close a change of control (as defined in the applicable award agreement) transaction in which the stockholders receive consideration equal to no less than $40.00 per share (subject to adjustments for any stock split, reverse stock split or certain other changes in capitalization) in exchange for the sale of their capital stock and (b) 50% of the shares subject to the option vest upon (i) the date on which the reported closing price of our common stock on NASDAQ or the New York Stock Exchange (or other national securities exchange) has, for 90 consecutive trading days, equaled or exceeded $80.00 per share (subject to adjustments for any stock split, reverse stock split or certain other changes in capitalization), with the first day of the90-day measurement period no earlier than June 6, 2018, or (ii) the date on which we close a change of control transaction in which the stockholders receive consideration equal to no less than $80.00 per share (subject to adjustments for any stock split, reverse stock split or certain other changes in capitalization) in exchange for the sale of their capital stock. |
| (6) | One-fourth of the total number of shares subject to the option |
| (7) | One-fourth of the total number of shares subject to the option |
| (8) | One-fourth of the total number of shares subject to the option vested on February 26, 2019, and one thirty-sixth of the remaining shares vest monthly thereafter, subject to continued service to us through each such vesting date. |
| (9) | The shares subject to each restricted stock grant will vest as follows, in each case subject to Dr. Schuth’s continued service to us: (a) 54.54% of the total number of shares subject to each restricted stock grant, or Tranche 1, vested as toone-fourth of the original number of Tranche 1 shares on March 17, 2016, and then as to 1/36 of the remaining number of shares of Tranche 1 each month thereafter and (b) 45.46% of the total number of shares subject to each restricted stock grant, or Tranche 2, |
| (10) | The option is subject to an early exercise provision and is immediately exercisable for restricted shares. Restricted shares acquired upon the early exercise of options are subject to repurchase by us at the original exercise price, which right lapses pursuant to the option’s vesting schedule. |
| (11) | The shares were awarded as restricted stock units and remain subject to our repurchase right in accordance with the vesting schedule of the units. 50% of the shares |
| (12) | The shares were acquired pursuant to an early exercise provision and remain subject to our repurchase right in accordance with the vesting schedule of the options.One-fourth of the total number of shares subject to the option vested on October 1, 2016, and one thirty-sixth of the remaining shares vest monthly thereafter, subject to continued service to us through each such vesting date. In the event of a change of control, the vesting of these shares shall be accelerated in part so that the number of shares, if any, that would otherwise have first become vested in the period between the date of change of control and the date on which all but the unvested shares that would have vested in the final 12 months of the vesting period shall have first become vested shall immediately become vested and exercisable. The remaining number of shares representing the last 12 months of vesting shall continue to vest in accordance with the original vesting schedule within the next 12 months set forth in the equity award agreement, provided however that the shares shall be immediately vested in full if on or within 12 months following the consummation of the |
| change of control, Mr. |
| (13) | The shares were acquired pursuant to an early exercise provision and remain subject to our repurchase right in accordance with the vesting schedule of the options.One-fourth of the total number of shares subject to the option vested on June 19, 2016, and one thirty-sixth of the remaining shares vest monthly thereafter, subject to continued service to us through each such vesting date. In the event of a change of control, the vesting of these shares shall be accelerated in part so that the number of shares, if any, that would otherwise have first become vested in the period between the date of change of control and the date on which all but the unvested shares that would have vested in the final 12 months of the vesting period shall have first become vested shall immediately become vested and exercisable. The remaining number of shares representing the last 12 months of vesting shall continue to vest in accordance with the original vesting schedule within the next 12 months set forth in the equity award agreement, provided however that the shares shall be immediately vested in full if on or within 12 months following the consummation of the change of control, Dr. Ho’s employment with us is terminated without cause by us or by Dr. Ho for good reason, subject to Dr. Ho’s execution of a release of claims in our favor and the terms and conditions of the Severance Plan. |
| (14) | One-fourth of the total number of shares subject to the option vested on July 2, 2017, and one thirty-sixth of the remaining shares vest monthly thereafter, subject to continued service to us through each such vesting date. |
2018.-32-Non-Equity Incentive Plan CompensationEach In August 2018, after consideration and discussion regarding the Company’s critical retention needs, the excellent performance of our named executive officers, peer group practices and the Company’s overall compensation strategies and philosophy, our compensation committee approved a "peak achievement" bonus program applicable to the Company’s strongest performers. As part of this program, our compensation committee approved peak achievement cash bonus awards of $75,000 for each of our named executive officers, other than Dr. Watts.In addition, after the end of fiscal 2018, each of our named executive officers was awarded an annual cash bonus for 20172018 based on attainment of corporate objectives for 2017. These bonuses were awarded under, and subject to the terms of, our Executive Incentive Compensation Plan (“Incentive Compensation Plan”), which was adopted by our board of directors in November 2017. Our Incentive Compensation Plan allows the Company to provide incentive awards, generally payable in cash, to employees selected by our compensation committee, including our named executive officers, based upon performance goals established by the Company. The compensation committee of our board of directors administers the Incentive Compensation Plan, and has the authority, in its sole discretion and at any time, to increase, reduce or eliminate a participant’s actual award, and/or increase, reduce or eliminate the amount allocated to the bonus pool for a particular performance period.For fiscal 2017,2018, target bonus amounts for each named executive officer were 55% of base salary for Dr. Watts, and 40% of base salary for each other named executive officer. Bonuses for all employees, including our named executive officers, for fiscal 20172018 were allocated from a bonus pool funded based on performance against six high impact Company goals, including related to research and development, business development and financing goals. The bonus pool couldwas expected to be funded frombetween 0% to a maximum ofof 150% of targettarget funding levels.levels, but the compensation committee had the discretion to go beyond the expected high end of the range. In February 2018,2019, our compensation committee of our board of directors reviewed the progress against the applicable 20172018 goals. Based on its assessment of the Company’s strongstellar (96%) achievement against aggressive performance goals, and on recommendations from management, the compensation committee funded the bonus pool at 125%175% of target levels. On the same date, theThe compensation committee also specifically considered the performance of our named executive officers during 2017, and2018, management’s recommendations and, with respect to Dr. Watt's, input of the Board. After such consideration, the compensation committee awarded bonuses to our named executive officers from the bonus pool, subject to the terms of the Incentive Compensation Plan, which requires each such officer’s continued employment through the bonus payment date.pool. The annual bonuses for fiscal 20172018 performance to our NEOs were generally commensurate with the funding levels of the bonus pool, and were as follows: $374,688$524,563 to Dr. Watts, $200,000$280,000 to Dr. Schuth, $218,875$318,682 to Mr. Krognes, and $203,425$296,187 to Dr. Ho.Executive Employment AgreementsRyan J. Watts, Ph.D.On November 10, 2017, we entered into a confirmatory employment letter with Dr. Watts, our President and Chief Executive Officer. The confirmatory employment letter has no specific term and provides forat-will employment. Dr. Watts’ base salary was $504,250$545,000 during 20172018 and in late January 2018 was subsequently increased to $545,000, retroactively$566,800, effective December 7, 2017,January 1, 2019, and Dr. Watts is considered annually for a target bonus of 55% of his annual base salary, subject to the terms and conditions of a bonus plan approved by our board of directors. The confirmatory offer letter also provides that we may, in our discretion, grant additional bonus amounts to Dr. Watts.Alexander O. Schuth, M.D.On November 10, 2017, we entered into a confirmatory employment letter with Dr. Schuth, our Chief Operating Officer and Secretary. The confirmatory employment letter has no specific term and provides forat-will employment. Dr. Schuth’s base salary was $380,250$400,000 during 20172018 and in late January 2018 was subsequently increased to $400,000, retroactively$428,000, effective December 7, 2017,January 1, 2019, and Dr. Schuth is considered annually for a target bonus of 40% of his annual base salary, subject to the terms of the applicable bonus plan developed by our chief executive officer and approved by our board of directors. The confirmatory offer letter also provides that we may, in our discretion, grant additional bonus amounts to Dr. Schuth.-33-Steve E. KrognesOn November 10, 2017, we entered into a confirmatory employment letter with Mr. Krognes, our Chief Financial Officer and Treasurer. The confirmatory employment letter has no specific term and provides forat-will employment. Mr. Krognes’ base salary was $437,750$455,260 during 20172018 and was subsequently increased to $455,260,$470,057, effective January 1, 2018,2019, and Mr. Krognes is considered annually for a target bonus of 40% of his annual base salary, subject to the terms of the applicable bonus plan developed by our chief executive officer and approved by our board of directors. The confirmatory employment letter also provides that we may, in our discretion, grant additional bonus amounts to Mr. Krognes.Carole Ho, M.D.On November 10, 2017, we entered into a confirmatory employment letter with Dr. Ho, our Chief Medical Officer. The confirmatory employment letter has no specific term and provides forat-will employment. Dr. Ho’s base salary was $406,850$423,124 during 20172018 and was subsequently increased to $423,124,$440,000, effective January 1, 2018,2019, and Dr. Ho is considered annually for a target bonus of 40% of her annual base salary, subject to the terms of the applicable bonus plan developed by our chief executive officer and approved by our board of directors. The confirmatory employment letter also provides that we may, in our discretion, grant additional bonus amounts to Dr. Ho.Potential Payments upon Termination or Change of ControlOur board of directors approved the following change of control and severance benefits for our executive officers (Dr. Watts, Dr. Schuth, Mr. Krognes and Dr. Ho) and other key employees pursuant to our Key Executive Change in Control and Severance Plan (the “Severance Plan”).If we terminate an executive officer’s employment other than for “cause,” death or “disability” or such participant resigns for “good reason” during the period beginning on a “change in control” (as such terms are defined in the Severance Plan) and ending 12 months following a change in control (the “change in control period”), such executive officer will be eligible to receive the following severance benefits (less applicable tax withholdings):100% (150% for Dr. Watts) of the executive officer’s annual base salary as in effect immediately prior to the termination (or if the termination is due to a resignation for good reason based on a material reduction in base salary, then the executive officer’s annual base salary in effect immediately prior to such reduction) paid over 12 months (18 months for Dr. Watts);
each such award that would otherwise have first become vested in the period between the date of the consummation of the change in control and the date on which all but the final 12 months of the vesting period will have first become vested will immediately become vested and exercisable, as applicable. The remaining shares subject to each such award will continue to be eligible to vest in accordance with the original vesting schedule within the next 12 months as set forth in the applicable award agreement, and may accelerate in connection with certain terminations of employment, as described above.
Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options, Restricted Stock Units and Rights | Weighted Average Exercise Price of Outstanding Options and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the first Column) | |||||||||
Equity compensation plans approved by security holders | ||||||||||||
2015 Stock Incentive Plan(1) | 6,322,739 | $ | 3.31 | — | ||||||||
2017 Equity Incentive Plan(2) | 366,740 | $ | 17.42 | 6,012,498 | ||||||||
2017 Employee Stock Purchase Plan (3) | — | — | 1,000,000 | |||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
TOTAL | 6,689,479 | $ | 4.08 | 7,012,498 | ||||||||
| Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options, Restricted Stock Units and Rights | Weighted Average Exercise Price of Outstanding Options and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the first Column) | |||||||
| Equity compensation plans approved by security holders | ||||||||||
2015 Stock Incentive Plan(1) | 5,485,549 | $ | 3.34 | — | ||||||
2017 Equity Incentive Plan(2) | 4,276,761 | $ | 16.82 | 2,289,196 | ||||||
2017 Employee Stock Purchase Plan(3) | — | — | 857,532 | |||||||
| Equity compensation plans not approved by security holders | — | — | — | |||||||
| TOTAL | 9,762,310 | $ | 10.47 | 3,146,728 | ||||||
| (1) | Our board of directors adopted, and our stockholders approved, the 2015 |
| (2) | Our 2017 Plan provides that the number of shares available for issuance under the 2017 Plan will be increased on the first day of each fiscal year beginning with the 2019 fiscal year, in an amount equal to the least of (i) 10,000,000 shares, (ii) five percent (5%) of the outstanding shares of common stock on the last day of the immediately preceding fiscal year or (iii) such other amount as our board of directors or any of its committees as will be administering the 2017 Plan may determine. |
| (3) | Our ESPP provides that the number of shares available for issuance under the ESPP will be increased on the first day of each fiscal year beginning with the 2019 fiscal year, in an amount equal to the least of (i) 2,000,000 shares, (ii) one percent (1%) of the outstanding shares of common stock on the last day of the immediately preceding fiscal year or (iii) such other amount as may be determined by our board of directors or any of its committees as will be administering the ESPP may determine. |
-37-SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTThe following table sets forth certain information with respect to the beneficial ownership of our common stock as of March 31, 20182019 for:each person, or group of affiliated persons, whoknown by us to beneficially ownedown more than 5% of our common stock;
Name of Beneficial Owner | Number of Shares Beneficially Owned | Percentage of Shares Beneficially Owned | ||||||
5% Stockholders: | ||||||||
Entities associated with AKDL, L.P.(1) | 20,574,298 | 21.8 | % | |||||
ARCH Venture Fund VIII, L.P.(2) | 11,068,749 | 11.7 | % | |||||
Flagship Ventures Fund V, L.P.(3) | 8,918,749 | 9.4 | % | |||||
FMR LLC(4) | 9,346,230 | 9.9 | % | |||||
Baillie Gifford & Co(5) | 4,921,783 | 5.2 | % | |||||
Named Executive Officers and Directors: | ||||||||
Ryan J. Watts, Ph.D.(6) | 2,851,601 | 3.0 | % | |||||
Alexander O. Schuth, M.D.(7) | 810,089 | * | ||||||
Steve E. Krognes(8) | 1,036,458 | 1.1 | % | |||||
Carole Ho, M.D.(9) | 494,791 | * | ||||||
Vicki Sato, Ph.D.(10) | 150,000 | * | ||||||
Douglas Cole, M.D.(11) | — | — | ||||||
Jay Flatley(12) | 325,000 | * | ||||||
Peter Klein | — | — | ||||||
Robert Nelsen(13) | 11,068,749 | 11.7 | % | |||||
David Schenkein, M.D.(14) | 324,998 | * | ||||||
Marc Tessier-Lavigne, Ph.D.(15) | 3,139,043 | 3.3 | % | |||||
All current executive officers and directors as a group (11 persons) (16) | 20,200,729 | 21.3 | % | |||||
| Name of Beneficial Owner | Number of Shares Beneficially Owned | Percentage of Shares Beneficially Owned | ||||
| 5% Stockholders: | ||||||
Entities associated with AKDL, L.P.(1) | 20,415,534 | 21.4 | % | |||
ARCH Venture Fund VIII, L.P.(2) | 11,068,749 | 11.6 | % | |||
Flagship Ventures Fund V, L.P.(3) | 8,005,747 | 8.4 | % | |||
FMR LLC(4) | 7,240,508 | 7.6 | % | |||
Vanguard Group(5) | 6,554,883 | 6.9 | % | |||
Baillie Gifford & Co(6) | 6,227,724 | 6.5 | % | |||
| Named Executive Officers and Directors: | ||||||
Ryan J. Watts, Ph.D.(7) | 2,817,276 | 3.0 | % | |||
Alexander O. Schuth, M.D.(8) | 866,458 | * | ||||
Steve E. Krognes(9) | 1,151,301 | 1.2 | % | |||
Carole Ho, M.D.(10) | 405,780 | * | ||||
Vicki Sato, Ph.D.(11) | 179,204 | * | ||||
Douglas Cole, M.D.(12) | 16,704 | * | ||||
Jennifer Cook(13) | — | * | ||||
Jay Flatley(14) | 341,704 | * | ||||
Peter Klein(15) | 11,069 | * | ||||
Robert Nelsen(16) | 11,085,453 | 11.6 | % | |||
David Schenkein, M.D.(17) | 341,702 | * | ||||
Marc Tessier-Lavigne, Ph.D.(18) | 3,155,747 | 3.3 | % | |||
All current executive officers and directors as a group (12 persons)(19) | 20,372,398 | 21.2 | % | |||
| * | Represents beneficial ownership of less than one percent (1%) of the outstanding shares of our common stock. |
| (1) | Based on information set forth in a Schedule 13G filed with the SEC by Douglas K. Bratton on February 13, 2018, |
| (2) | Based on information set forth in a Schedule 13G filed with the SEC by ARCH Venture Fund VIII, L.P. (“ARCH Venture Fund VIII”) on February 2, 2018, these shares consist of 11,068,749 shares held of record by ARCH Venture Fund VIII. ARCH Venture Partners VIII, L.P. (“AVP VIII LP”), as the sole general partner of ARCH Venture Fund VIII, may be deemed to beneficially own certain of the shares held by ARCH Venture Fund VIII. AVP VIII LP disclaims beneficial ownership of all shares held by ARCH Venture Fund VIII in which AVP VIII LP does not have an actual pecuniary interest. ARCH Venture Partners VIII, LLC (“AVP VIII LLC”), as the sole general partner of AVP VIII LP, may be deemed to beneficially own certain of the shares held by ARCH Venture Fund VIII. AVP VIII LLC disclaims beneficial ownership of all shares held by ARCH Venture Fund VIII in which AVP VIII LLC does not have an actual pecuniary interest. As the managing directors of AVP VIII LLC, Keith Crandell, Robert Nelsen, one of our directors, and Clinton Bybee (collectively, the “Managing Directors”), share voting and investment control with respect to the shares held by ARCH Venture Fund VIII. The Managing Directors disclaim beneficial ownership of all shares held by ARCH Venture Fund VIII except to the extent of any pecuniary interest therein. The address of these entities is 8755 West Higgins Road, Suite 1025, Chicago, IL 60631. |
| (3) | Based on information set forth in a Schedule 13G filed with the SEC by Flagship Ventures Fund V, L.P. (“Flagship V”) on February 14, 2018, |
| (4) | Based on information set forth in a Schedule 13G/A filed with the SEC by FMR LLC (“FMR”) on February 13, |
| (5) | Based on information set forth in a Schedule 13G filed with the SEC by Vanguard Group (“Vanguard”) on February 11, 2019, these shares consist of 6,554,883 shares held of record by Vanguard. Vanguard Fiduciary Trust Company ("VFTC"), a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 94,068 shares the Common Stock outstanding of the Company as a result of its serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd. ("VIA"), a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 9,000 shares of the Common Stock outstanding of the Company as a result of its serving as investment manager of Australian investment offerings. The address of these entities is 100 Vanguard Blvd. Malvern, PA 19355. |
| (6) | Based on information set forth in a Schedule 13G/A filed with the SEC by Baillie Gifford & Co (“Baillie Gifford”) on |
| (7) | Consists of (a) 12,505 shares held of record by Dr. Watts, (b) |
| (8) | Consists of (a) |
| (9) | Consists of 1,000,000 shares held of record by The Steve Edward Krognes Revocable Trust, for which Mr. Krognes serves as a trustee, of which |
| (10) | Consists of (a) 46,875 shares held of record by Dr. Ho, (b) |
| (11) | Consists of (a) 137,500 shares held of record by Dr. Sato, of which 1,564 shares are subject to repurchase by us at the original purchase price as of March 31, |
| (12) | Dr. Cole is a member of Flagship V GP but does not have voting or investment control with respect to the shares held by Flagship |
| (13) | Ms. Cook joined the board of directors on November 6, 2018. |
| (14) | Consists of (a) 250,000 shares of unrestricted common stock and 75,000 shares of restricted stock held |
| (15) | Consists of |
| (16) | Mr. Nelsen is a managing director of AVP VIII LLC and shares voting and investment control with respect to these shares. Mr. Nelsen |
| (17) | Consists of (a) 75,000 shares of restricted stock held of record by Dr. Schenkein, which vest on April 17, 2019, (b) 105,225 shares held of record by the David P. Schenkein 2015 Denali Qualified Annuity Trust, for which Dr. Schenkein serves as a trustee, (c) 19,774 shares held of record by the David P. Schenkein 2004 Revocable Trust, for which Dr. Schenkein serves as a trustee, (d) 105,225 shares held of record by the Amy P. Schenkein 2015 Denali Qualified Annuity Trust, for which Dr. Schenkein serves as a trustee, |
| (18) | Consists of (a) |
| (19) | Consists of (i) |
-40-RELATED PERSON TRANSACTIONSWe describe below transactions and series of similar transactions, since the beginning of our last fiscal year, to which we were a party or will be a party, in which:the amounts involved exceeded or will exceed $120,000; and
basis.Investors’ Rights AgreementWe are party to an investors’ rights agreement, as amended, with certain holders of our capital stock, including Ryan J. Watts, Ph.D., Alexander O. Schuth, M.D., Marc Tessier-Lavigne, Ph.D., Jay Flatley, Vicki Sato, Ph.D., David Schenkein, M.D., entities associated with AKDL, L.P., ARCH Venture Fund VIII, L.P., an entity affiliated with Robert Nelsen, entities associated withF-Prime Capital Partners Healthcare Fund IV L.P., entities associated with FIL Limited, Baillie Gifford & Co and Flagship Ventures Fund V, L.P., an entity affiliated with Douglas Cole, M.D. Under our investors’ rights agreement, certain holders of our capital stock have the right to demand that we file a registration statement or request that their shares of our capital stock be covered by a registration statement that we are otherwise filing.Other AgreementsIn addition to the indemnification required in our amended and restated certificate of incorporation and amended and restated bylaws, we have entered into an indemnification agreement with each member of our board of directors and each of our officers. These agreements provide for the indemnification of our directors and officers for certain expenses and liabilities incurred in connection with any action, suit, proceeding or alternative dispute resolution mechanism, or hearing, inquiry or investigation that may lead to the foregoing, to which they are a party, or are threatened to be made a party, by reason of the fact that they are or were a director, officer, employee, agent or fiduciary of our company, or any of our subsidiaries, by reason of any action or inaction by them while serving as an officer, director, agent or fiduciary, or by reason of the fact that they were serving at our request as a director, officer, employee, agent or fiduciary of another entity. In the case of an action or proceeding by or in the right of our company or any of our subsidiaries, no indemnification will be provided for any claim where a court determines that the indemnified party is prohibited from receiving indemnification. We believe that these charter and bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers.We have entered into employment agreements with certain of our executive officers that, among other things, provide for certain severance and change of control benefits. For a description of employment agreements with our named executive officers, see “Executive Compensation—Executive Employment Agreements.”We have granted stock options to our named executive officers, other executive officers and certain of our directors. See “Executive Compensation—Executive Employment Agreements.”Other than as described above, since January 1, 2017,2018, we have not entered into any transactions, nor are there any currently proposed transactions, between us and a related party where the amount involved exceeds, or would exceed, $120,000, and in which any related person had or will have a direct or indirect material interest. We believe the terms of the transactions described above were comparable to terms we could have obtained inarm’s-length dealings with unrelated third parties.-41-Policies and Procedures for Related Party TransactionsWe have adopted a formal written policy providing that our audit committee will be responsible for reviewing “related party transactions,” which are transactions (i) in which we are or will be a participant, (ii) in which the aggregate amount involved exceeds or may be expected to exceed $120,000 and (iii) in which a related person has or will have a direct or indirect interest. For purposes of this policy, a related person will be defined as a director, nominee for director, executive officer, or greater than 5% beneficial owner of our common stock and their immediate family members. In reviewing any related party transaction, our audit committee is to consider the relevant facts and circumstances available to our audit committee, including, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances, and the extent of the related party’s interest in the transaction. Under this policy, all related party transactions may be consummated or continued only if approved or ratified by our audit committee.-42-OTHER MATTERSSection 16(a) Beneficial Ownership Reporting ComplianceSection 16(a) of the Exchange Act requires that our executive officers and directors, and persons who own more than 10% of our common stock, file reports of ownership and changes of ownership with the SEC. Such directors, executive officers and 10% stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.SEC regulations require us to identify in this proxy statement anyone who filed a required report late during the most recent fiscal year. Based on our review of forms we received, or written representations from reporting persons stating that they were not required to file these forms, we believe that during our fiscal year ended December 31, 2017,2018, all Section 16(a) filing requirements were satisfied on a timely basis, except with respect to one failure to timely file a Form 4 for Ryan J. Watts, Ph.D. (filed with the SEC on February 28, 2018).Fiscal Year 20172018 Annual Report and SEC FilingsOur financial statements for our fiscal year ended December 31, 20172018 are included in our Annual Report on Form10-K filed with the SEC on March 19, 201812, 2019 (FileNo. 001-38311). This proxy statement and our Annual Report are posted in the Financial InformationSEC filings section of the Investors webpage& Media Relations web page at http:https://investors.denalitherapeutics.comdenalitherapeutics.com/investors and are available from the SEC at its website at www.sec.gov. You may also obtain a copy of our annual reportAnnual Report without charge by sending a written request to Denali Therapeutics Inc., Attention: Investor Relations, 151161 Oyster Point Blvd., 2nd Floor, South San Francisco, California 94080.Company WebsiteWe maintain a website at www.denalitherapeutics.com. Information contained on, or that can be accessed through, our website is not intended to be incorporated by reference into this proxy statement, and references to our website address in this proxy statement are inactive textual references only.-43-PROPOSALS OF STOCKHOLDERS FOR 20192020 ANNUAL MEETINGStockholders who wish to present proposals for inclusion in the proxy materials to be distributed in connection with next year’s annual meeting must submit their proposals so that they are received at Denali’s principal executive offices no later than December 27, 2018.20, 2019. Pursuant to the rules promulgated by the SEC, simply submitting a proposal does not guarantee that it will be included.In order to be properly brought before the 20192020 annual meeting of stockholders, a stockholder’s notice of a matter the stockholder wishes to present, or the person or persons the stockholder wishes to nominate as a director, must be delivered to the Secretary of Denali at its principal executive offices not less than 45 nor more than 75 days before the first anniversary of the date on which Denali first mailed its proxy materials or a notice of availability of proxy materials (whichever is earlier) for the preceding year’s annual meeting. As a result, any notice given by a stockholder pursuant to these provisions of our bylaws must be received no earlier than February 10, 2019,3, 2020, and no later than March 12, 2019,4, 2020, unless our annual meeting date occurs more than 30 days before or 60 days after June 13, 2019.May 30, 2020. In that case, we must receive proposals not earlier than the close of business on the 120th day prior to the date of the 20192020 annual meeting and not later than the close of business on the later of the 90th day prior to the date of the annual meeting or the 10th day following the day on which we first make a public announcement of the date of the meeting.To be in proper form, a stockholder’s notice must include the specified information concerning the proposal or nominee as described in our bylaws. A stockholder who wishes to submit a proposal or nomination is encouraged to seek independent counsel about our bylaws and SEC requirements. Denali will not consider any proposal or nomination that is not timely or otherwise does not meet the bylaws and SEC requirements for submitting a proposal or nomination.Notices of intention to present proposals at the 20192020 annual meeting of stockholders must be addressed to: Secretary, Denali Therapeutics Inc., 151161 Oyster Point Blvd., 2nd Floor, South San Francisco, California 94080. We reserve the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements.* * *The board of directors does not know of any other matters to be presented at the Annual Meeting. If any additional matters are properly presented at the Annual Meeting, the persons named on the enclosed proxy card will have discretion to vote the shares of common stock they represent in accordance with their own judgment on such matters.It is important that your shares of common stock be represented at the Annual Meeting, regardless of the number of shares that you hold. You are, therefore, urged to vote by telephone, by using the Internet or by mail at your earliest convenience, as instructed on the Notice of Internet Availability of Proxy Materials.THE BOARD OF DIRECTORS South San Francisco, California April 26, 201818, 2019
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