UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 | ||||||||
SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 | ||||||||
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐ | ||||||||
Check the appropriate box: ☐Preliminary Proxy Statement ☐Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) ☒Definitive Proxy Statement ☐Definitive Additional Materials ☐Soliciting Material Pursuant to Rule 14a-12 | ||||||||
Neoleukin Therapeutics, Inc. (Name of Registrant as Specified In Its Charter) (Name of Person(s) Filing Proxy Statement, if other than the Registrant) | ||||||||
Payment of Filing Fee (Check all boxes that apply): ☒ No fee required ☐ Fee paid previously with preliminary materials ☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 |
Neoleukin Therapeutics, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
NEOLEUKIN THERAPEUTICS, INC. 188 East Blaine Street, Suite 450 Seattle, WA 98102 | ||||||
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NEOLEUKIN THERAPEUTICS, INC.
188 East Blaine Street, Suite 450
Seattle, WA 98102
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 13, 2021
Notice of Annual Meeting of Stockholders
1 | To elect |
2 | To ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for its fiscal year ending December 31, |
3 |
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To approve, by a non-binding advisory vote, the compensation paid by the Company to its named executive officers. |
4 | To conduct any other business properly brought before the meeting. |
By Order of the Board of Directors Dr. Jonathan G. Drachman Chief Executive Officer Seattle, Washington March 31, 2022 |
Questions and Answers | |||||
Proposal Number 1: Election of Directors | |||||
Information Regarding the Board of Directors and Corporate Governance | 19 | ||||
Report of the Audit Committee of the Board of Directors | |||||
Proposal Number 2: Ratification of Appointment of Independent Registered Public Accounting Firm | |||||
Equity Compensation Plan Information | |||||
Proposal Number 3: Non-Binding Advisory Vote on Named Executive Officer Compensation | 32 | ||||
Security Ownership of Certain Beneficial Owners and Management | |||||
Executive Officers | |||||
Executive Compensation | |||||
Director Compensation | |||||
Transactions With Related Persons | |||||
Householding of Proxy Materials | |||||
Where You Can Find More Information | |||||
Other Matters |
Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 3 |
NEOLEUKIN THERAPEUTICS, INC. 188 East Blaine Street, Suite 450 Seattle, WA 98102 |
Pursuant to rules adopted by the Securities and Exchange Commission (the “SEC”), we have elected to provide access to our proxy materials over the internet. Accordingly, we have sent you a Notice of Internet Availability of Proxy Materials (the “Notice”) because the Board of Directors (the “Board”) of Neoleukin Therapeutics, Inc. (the “Company,” “Neoleukin,” “we,” “us”, or “our”) is soliciting your proxy to vote at the 2022 Annual Meeting of Stockholders (the “Annual Meeting”), including at any adjournments or postponements of the meeting. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the internet or to request a printed copy may be found in the Notice. We intend to mail the Notice on or about March 31, 2022, to all stockholders of record entitled to vote at the Annual Meeting. We intend to send you a proxy card, along with a second Notice, on or after March 31, 2022. |
Seattle, Washington
March 31, 2021
PROXY STATEMENT
Why did I receive a notice regarding the availability of proxy materials on the internet? | ||||||||||||||
In order to facilitate stockholder participation and save costs, this year’s annual meeting will be accessible online through the Internet. We have worked to offer the same participation opportunities as if you attended the annual meeting in person and hope the online format will allow more stockholders to participate by removing any barriers caused by travel requirements. You may attend the annual meeting online, including voting and submitting questions, at www.virtualshareholdermeeting.com/NLTX2022. We encourage you to access the annual meeting before it begins. Online check-in will begin at 1:30 p.m. Pacific Time on the date of the annual meeting. If you have difficulty accessing the meeting, please call TFN: 844-986-0822 / International: 303-562-9302. We will have technicians available to assist you. | |||||||||||||||||
How do I attend this year’s Annual Meeting? | |||||||||||||||||
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| 4 | 2022 Proxy Statement |
GENERAL INFORMATION |
NEOLEUKIN THERAPEUTICS, INC.
188 East Blaine Street, Suite 450
Seattle, Washington 98102
PROXY STATEMENT
FOR THE 2021 ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 13, 2021
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Why did I receive a notice regarding the availability of proxy materials on the internet?
Pursuant to rules adopted by the Securities and Exchange Commission (the “SEC”), we have elected to provide access to our proxy materials over the internet. Accordingly, we have sent you a Notice of Internet Availability of Proxy Materials (the “Notice”) because the Board of Directors of Neoleukin Therapeutics, Inc. (the “Company,” “Neoleukin,” “we,” “us” or “our”) is soliciting your proxy to vote at the 2021 Annual Meeting of Stockholders (the “Annual Meeting”), including at any adjournments or postponements of the meeting. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the internet or to request a printed copy may be found in the Notice.
We intend to mail the Notice on or about March 31, 2021, to all stockholders of record entitled to vote at the Annual Meeting.
Will I receive any other proxy materials by mail?
We intend to send you a proxy card, along with a second Notice, on or after March 31, 2021.
How do I attend the Annual Meeting?
Due to public health and travel concerns as well as state and local government restrictions caused by the COVID-19 pandemic, this year’s annual meeting will be accessible online through the Internet. We have worked to offer the same participation opportunities as if you attended the annual meeting in person. You may attend the annual meeting online, including voting and submitting questions, at www.virtualshareholdermeeting.com/NLTX2021. We encourage you to access the annual meeting before it begins. Online check-in will begin at 1:30 p.m. Pacific Time on the date of the annual meeting. If you have difficulty accessing the meeting, please call TFN: 844-986-0822 / International: 303-562-9302. We will have technicians available to assist you.
What am I voting on?
At the Annual Meeting, stockholders will act upon the matters outlined in the Notice of Annual Meeting of Stockholders, including:
To elect Martin Babler, Erin Lavelle and Lewis T. “Rusty” Williams as Class I directors of the Company to hold office until the 2024 Annual Meeting of Stockholders.
To ratify appointment of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for its fiscal year ending December 31, 2021.
To approve amendments to the Company’s 2014 Equity Incentive Plan.
To approve, by a non-binding advisory vote, the compensation paid by the Company to its named executive officers.
To conduct any other business properly brought before the meeting.
Who is entitled to vote at the meeting?
Our Board of Directors has set March 18, 2021 as the record date for the Annual Meeting. If you were a stockholder of record of our common stock at the close of business on March 18, 2021, you are entitled to vote at the meeting. As of the record date, 42,296,033 shares of our common stock were issued and outstanding and, therefore, eligible to vote at the meeting.
What are my voting rights?
Holders of our common stock are entitled to one vote per share. There is no cumulative voting.
What if another matter is properly brought before the meeting?
The Board of Directors 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 those matters in accordance with their best judgment.
How do I vote?
You may either vote “For” or “Withhold” for each nominee to the Board of Directors. For the approval of amendments to our 2014 Equity Incentive Plan, the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm, and the advisory approval of the compensation of named executive officers, you may vote “For” or “Against” or abstain from voting.
The procedures for voting are as follows:
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote online at the Annual Meeting, vote by proxy over the telephone, vote by proxy through the internet or vote by proxy using a proxy card that you may request or that we may elect to deliver at a later time. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the Annual Meeting and vote in person even if you have already voted by proxy.
To vote online at the meeting, attend the Annual Meeting on the Internet at www.virtualshareholdermeeting.com/NLTX2021.
To vote using the proxy card, simply complete, sign and date the proxy card that may be delivered and return it promptly in the envelope provided. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct.
To vote over the telephone, dial toll-free 1-800-690-6903 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the company number and control number from the Notice. Your telephone vote must be received by 11:59 p.m., Eastern Time, on May 12, 2021 to be counted.
To vote through the internet, go to www.proxyvote.com to complete an electronic proxy card. You will be asked to provide the company number and control number from the Notice. Your internet vote must be received by 11:59 p.m., Eastern Time, on May 12, 2021 to be counted.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a Notice containing voting instructions from that organization rather than from us. Simply follow the voting instructions in the Notice to ensure that your vote is counted. To vote online at the Annual Meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker or bank included with these proxy materials or contact your broker or bank to request a proxy form.
Internet proxy voting will be provided to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers and telephone companies.
In light of the evolving COVID-19 situation, we strongly recommend that you vote your shares in advance of the meeting as instructed above, even if you plan to attend the meeting.
How many votes do I have?
On each matter to be voted upon, you have one vote for each share of common stock you own as of March 18, 2021.
What happens if I do not vote?
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record and do not vote by completing your proxy card, by telephone, through the internet or online at the Annual Meeting, your shares will not be voted.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner and do not instruct your broker, bank, or other agent how to vote your shares, the question of whether your broker or nominee will still be able to vote your shares depends on whether the particular proposal is considered to be a “routine” matter. Brokers and nominees can use their discretion to vote “uninstructed” shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. Under the rules and interpretations of various national and regional securities exchanges, “non-routine” matters are matters that may substantially affect the rights or privileges of stockholders, such as mergers, stockholder proposals, elections of directors (even if not contested), executive compensation (including any advisory stockholder votes on executive compensation and on the frequency of stockholder votes on executive compensation), and certain corporate governance proposals, even if management-supported. Ratification of the appointment of auditors is considered a “routine” matter. Accordingly, your broker or nominee may not vote your shares on the election of either nominee for director, for the approval of amendments to our 2014 Equity Incentive Plan, or the advisory approval of compensation of our named executive officers, without your instructions, but may vote your shares on the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021, without your instructions. When a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed to be “non-routine,” the broker or nominee cannot vote the shares. These unvoted shares are counted as “broker non-votes.”
What if I return a proxy card or otherwise vote but do not make specific choices?
If you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, as applicable, “For” the election of all of the nominees for director, “For” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2021, “For” the approval of amendments to our 2014 Equity Incentive Plan, and “For” the advisory approval of compensation of our named executive officers. If any other matter is properly presented at the meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.
Who is paying for this proxy solicitation?
We will pay for the entire cost of soliciting proxies. In addition to these proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.
What does it mean if I receive 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 the Notices to ensure that all of your shares are voted.
Can I change my vote after submitting my proxy?
Stockholder of Record: Shares Registered in Your Name
Yes. You can revoke your proxy at any time before the final vote at the meeting. If you are the record holder of your shares, you may revoke your proxy in any one of the following ways:
You may submit another properly completed proxy card with a later date.
You may grant a subsequent proxy by telephone or through the internet.
You may send a timely written notice that you are revoking your proxy to our Corporate Secretary at 188 East Blaine Street, Suite 450, Seattle, Washington 98102.
You may attend the Annual Meeting and vote online. Simply attending the meeting will not, by itself, revoke your proxy.
Your most current proxy card or telephone or internet proxy is the one that is counted.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank.
When are stockholder proposals and director nominations due for next year’s annual meeting?
To be considered for inclusion in next year’s proxy materials, your proposal must be submitted in writing by December 1, 2021, to our Corporate Secretary at 188 East Blaine Street, Suite 450, Seattle, Washington 98102, and must comply with all applicable requirements of Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); provided, however, that if our 2022 Annual Meeting of Stockholders is held before April 13, 2022 or after June 12, 2022, then the deadline is a reasonable amount of time prior to the date we begin to print and mail our proxy statement for the 2022 Annual Meeting of Stockholders. If you wish to submit a proposal (including a director nomination) at the 2022 Annual Meeting of Stockholders that is not to be included in next year’s proxy materials, the proposal must be received by our Corporate Secretary not later than the close of business on February 12, 2022 nor earlier than the close of business on January 13, 2022; provided, however, that if our 2022 Annual Meeting of Stockholders is held before April 13, 2022 or after June 12, 2022, then the proposal must be received no earlier than the close of business on the 120th day prior to such meeting and not later than the close of business on the later of the 90th day prior to such meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. You are also advised to review our bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations.
How are votes counted?
Votes will be counted by the inspector of election appointed for the meeting, who will separately count, for the proposal to elect directors, votes “For,” “Withhold” and broker non-votes; and, with respect to the proposals to
ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm, to approve amendments to our 2014 Equity Incentive Plan and to approve the compensation for our named executive officers, votes “For,” “Against,” abstentions and broker non-votes.
How many votes are needed to approve each proposal?
For the election of directors, the three nominees to serve until the 2024 Annual Meeting of Stockholders receiving the most “For” votes from the shares present online at the meeting or represented by proxy and entitled to vote generally on the election of directors will be elected. Because directors are elected by a plurality of the votes received, only votes “For” will affect the outcome.
To be approved, Proposal No. 2, ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2021, must receive “For” votes from the holders of a majority of shares present online at the meeting or represented by proxy and entitled to vote on the matter. If you “Abstain” from voting, it will have the same effect as an “Against” vote.
Proposal No. 2 is considered a routine matter, and therefore no broker non-votes are expected to exist in connection with Proposal No. 2.
To be approved, Proposal No. 3, approval of amendments to our 2014 Equity Incentive Plan, must receive “For” votes from the holders of a majority of shares present online at the meeting or represented by proxy and entitled to vote on such matter. If you “Abstain” from voting, it will have the same effect as an “Against” vote. Broker non-votes will have no effect.
To be approved, Proposal No. 4, an advisory vote on the compensation for our named executive officers, must receive “For” votes from the holders of a majority of shares present in person or represented by proxy and entitled to vote on such matter. If you “Abstain” from voting, it will have the same effect as an “Against” vote. Broker non-votes will have no effect.
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding at least a majority of the outstanding shares entitled to vote are present online at the meeting or represented by proxy. On the record date, there were 42,296,033 shares outstanding and entitled to vote. Thus, the holders of 21,148,017 shares must be present online at the meeting or represented by proxy at the Annual Meeting to have a quorum.
Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote online at the meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the holders of a majority of shares present online at the meeting or represented by proxy may adjourn the Annual Meeting to another date.
How does the Board of Directors recommend that I vote?
You will vote on the following management proposals:
At the Annual Meeting, stockholders will act upon the matters outlined in the Notice of Annual Meeting of Stockholders, including: • To elect |
• To ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for its fiscal year ending December 31, |
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2022. • To approve, by a non-binding advisory vote, the compensation paid by the Company to its named executive officers. • To conduct any other business properly brought before the meeting. | ||||||||||||||
What am I voting on? | ||||||||||||||
The Board of Directors recommends that you vote FOR all the nominees in Proposal No. 1, and FOR Proposal Nos. 2, 3 and 4.
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 Form 8-K that we expect to file within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Form 8-K within four business days after the meeting, we intend to file a Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an amended Form 8-K to publish the final results.
How will the proxies vote on any other business brought up at the meeting?
Our Board of Directors has set March 17, 2022 as the record date for the Annual Meeting. If you were a stockholder of record of our common stock at the close of business on March 17, 2022, you are entitled to vote at the meeting. As of the record date, 42,493,971 shares of our common stock were issued and outstanding and, therefore, eligible to vote at the meeting. Holders of common stock are entitled to one vote per share. There is no cumulative voting. | |||||||||||||||||
Who is entitled to vote at the meeting? | |||||||||||||||||
The Board of Directors 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 those matters in accordance with their best judgment. | |||||||||||||||||
What if another matter is properly brought before the meeting? | |||||||||||||||||
Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 5 |
GENERAL INFORMATION |
You may either vote “For” or “Withhold” for each nominee to the Board of Directors. With respect to the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm, and the advisory approval of the compensation of named executive officers, you may vote “For” or “Against” or abstain from voting. The procedures for voting are as follows: | ||||||||||||||||||||||||||
How do I vote? | ||||||||||||||||||||||||||
During Meeting | By Mail | By Phone | By Internet | |||||||||||||||||||||||
Stockholder of Record: Shares Registered in Your Name If you are a stockholder of record, you may vote online at the Annual Meeting, vote by proxy over the telephone, vote by proxy through the internet or vote by proxy using a proxy card that you may request or that we may elect to deliver at a later time. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the Annual Meeting and vote in person even if you have already voted by proxy. •To vote online at the meeting, attend the Annual Meeting on the internet at www.virtualshareholdermeeting.com/NLTX2022. •To vote using the proxy card, simply complete, sign and date the proxy card that may be delivered and return it promptly in the envelope provided. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct. •To vote over the telephone, dial toll-free 1-800-690-6903 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the company number and control number from the Notice. Your telephone vote must be received by 11:59 p.m., Eastern Time, on May 11, 2022 to be counted. •To vote through the internet, go to www.proxyvote.com to complete an electronic proxy card. You will be asked to provide the company number and control number from the Notice. Your internet vote must be received by 11:59 p.m., Eastern Time, on May 11, 2022 to be counted. Beneficial Owner: Shares Registered in the Name of Broker or Bank If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a Notice containing voting instructions from that organization rather than from us. Simply follow the voting instructions in the Notice to ensure that your vote is counted. To vote online at the Annual Meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker or bank included with these proxy materials or contact your broker or bank to request a proxy form. |
X | 6 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
GENERAL INFORMATION |
Internet proxy voting will be provided to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers and telephone companies. We strongly recommend that you vote your shares in advance of the meeting as instructed above, even if you plan to attend the meeting. On each matter to be voted upon, you have one vote for each share of common stock you own as of March 17, 2022. | |||||||||||||||||
Stockholder of Record: Shares Registered in Your Name If you are a stockholder of record and do not vote by completing your proxy card, by telephone, through the internet or online at the Annual Meeting, your shares will not be voted. Beneficial Owner: Shares Registered in the Name of Broker or Bank If you are a beneficial owner and do not instruct your broker, bank, or other agent how to vote your shares, the question of whether your broker or nominee will still be able to vote your shares depends on whether the particular proposal is considered to be a “routine” matter. Brokers and nominees can use their discretion to vote “uninstructed” shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. Under the rules and interpretations of various national and regional securities exchanges, “non-routine” matters are matters that may substantially affect the rights or privileges of stockholders, such as mergers, stockholder proposals, elections of directors (even if not contested), executive compensation (including any advisory stockholder votes on executive compensation and on the frequency of stockholder votes on executive compensation), and certain corporate governance proposals, even if management-supported. Ratification of the appointment of auditors is considered a “routine” matter. Accordingly, your broker or nominee may not vote your shares on the election of either nominee for director, or the advisory approval of compensation of our named executive officers, without your instructions, but may vote your shares on the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022, without your instructions. When a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed to be “non-routine,” the broker or nominee cannot vote the shares. These unvoted shares are counted as “broker non-votes.” | |||||||||||||||||
What happens if I do not vote? | |||||||||||||||||
Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 7 |
GENERAL INFORMATION |
If you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, as applicable, “For” the election of all of the nominees for director, “For” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2022, and “For” the advisory approval of compensation of our named executive officers. If any other matter is properly presented at the meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using his or her best judgment. | |||||||||||||||||
What if I return a proxy card or otherwise vote, but do not make specific choices? | |||||||||||||||||
We will pay for the entire cost of soliciting proxies. In addition to these proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners. | |||||||||||||||||
Who is paying for this proxy solicitation? | |||||||||||||||||
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 the Notices to ensure that all of your shares are voted. | |||||||||||||||||
What does it mean if I receive more than one Notice? | |||||||||||||||||
X | 8 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
GENERAL INFORMATION |
Stockholder of Record: Shares Registered in Your Name Yes. You can revoke your proxy at any time before the final vote at the meeting. If you are the record holder of your shares, you may revoke your proxy in any one of the following ways: •You may submit another properly completed proxy card with a later date. •You may grant a subsequent proxy by telephone or through the internet. •You may send a timely written notice that you are revoking your proxy to our Corporate Secretary at 188 East Blaine Street, Suite 450, Seattle, Washington 98102. •You may attend the Annual Meeting and vote online. Simply attending the meeting will not, by itself, revoke your proxy. Your most current proxy card or telephone or internet proxy is the one that is counted. Beneficial Owner: Shares Registered in the Name of Broker or Bank If your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank. | |||||||||||||||||
Can I change my vote after submitting my proxy? | |||||||||||||||||
To be considered for inclusion in next year’s proxy materials, your proposal must be submitted in writing by December 1, 2022, to our Corporate Secretary at 188 East Blaine Street, Suite 450, Seattle, Washington 98102, and must comply with all applicable requirements of Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); provided, however, that if our 2023 Annual Meeting of Stockholders is held before April 12, 2022 or after June 11, 2023, then the deadline is a reasonable amount of time prior to the date we begin to print and mail our proxy statement for the 2023 Annual Meeting of Stockholders. If you wish to submit a proposal (including a director nomination) at the 2023 Annual Meeting of Stockholders that is not to be included in next year’s proxy materials, the proposal must be received by our Corporate Secretary not later than the close of business on February 11, 2023 nor earlier than the close of business on January 12, 2023; provided, however, that if our 2022 Annual Meeting of Stockholders is held before April 12, 2022 or after June 11, 2022, then the proposal must be received no earlier than the close of business on the 120th day prior to such meeting and not later than the close of business on the later of the 90th day prior to such meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. You are also advised to review our bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations. | |||||||||||||||||
When are stockholder proposals and director nominations due for next year’s annual meeting? | |||||||||||||||||
Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 9 |
GENERAL INFORMATION |
Votes will be counted by the inspector of election appointed for the meeting, who will separately count, for the proposal to elect directors, votes “For,” “Withhold” and broker non-votes; and, with respect to the proposals to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm and to approve the compensation for our named executive officers, votes “For,” “Against,” abstentions and broker non-votes. | |||||||||||||||||
How are votes counted? | |||||||||||||||||
For the election of directors, the two nominees to serve until the 2025 Annual Meeting of Stockholders receiving the most “For” votes from the shares present online at the meeting or represented by proxy and entitled to vote generally on the election of directors will be elected. Because directors are elected by a plurality of the votes received, only votes “For” will affect the outcome. To be approved, Proposal No. 2, ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2022 must receive “For” votes from the holders of a majority of shares present online at the meeting or represented by proxy and entitled to vote on the matter. If you “Abstain” from voting, it will have the same effect as an “Against” vote. Proposal No. 2 is considered a routine matter and therefore no broker non-votes are expected to exist in connection with Proposal No. 2. To be approved, Proposal No. 3, an advisory vote on the compensation for our named executive officers, must receive “For” votes from the holders of a majority of shares present in person or represented by proxy and entitled to vote on such matter. If you “Abstain” from voting, it will have the same effect as an “Against” vote. Broker non-votes will have no effect. | |||||||||||||||||
How many votes are needed to approve each proposal? | |||||||||||||||||
X | 10 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
GENERAL INFORMATION |
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding at least a majority of the outstanding shares entitled to vote are present online at the meeting or represented by proxy. On the record date, there were 42,493,971 shares outstanding and entitled to vote. Thus, the holders of 21,246,986 shares must be present online at the meeting or represented by proxy at the Annual Meeting to have a quorum. Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote online at the meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the holders of a majority of shares present online at the meeting or represented by proxy may adjourn the Annual Meeting to another date. | |||||||||||||||||
What is the quorum requirement? | |||||||||||||||||
You will vote on the following management proposals: 1.To elect Jonathan G. Drachman and Sarah B. Noonberg as Class II directors of the Company to hold office until the 2025 Annual Meeting of Stockholders. 2.To ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for its fiscal year ending December 31, 2022. 3.To approve, by a non-binding advisory vote, the compensation paid by the Company to its named executive officers. The Board of Directors recommends that you vote FOR all the nominees in Proposal No. 1, and FOR Proposal Nos. 2 and 3. | |||||||||||||||||
How does the Board of Directors recommend that I vote? | |||||||||||||||||
Preliminary voting results will be announced at the Annual Meeting. In addition, final voting results will be published in a current report on Form 8-K that we expect to file within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Form 8-K within four business days after the meeting, we intend to file a Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an amended Form 8-K to publish the final results. | |||||||||||||||||
How can I find out the results of the voting at the Annual Meeting? | |||||||||||||||||
Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 11 |
GENERAL INFORMATION |
By submitting your proxy card, you authorize the proxies named therein to use their judgment to determine how to vote on any other matter brought before the meeting. We do not know of any other business to be considered at the meeting. The proxies’ authority to vote according to their judgment applies only to shares you own as the stockholder of record. | |||||||||||||||||
How will the proxies vote on any other business brought up at the meeting? | |||||||||||||||||
Stockholders may communicate with our Board of Directors by sending a letter addressed to the Board of Directors, all independent directors or specified individual directors to: Neoleukin Therapeutics, Inc., c/o Corporate Secretary at 188 East Blaine Street, Suite 450, Seattle, Washington 98102. All communications will be compiled by the Secretary and submitted to the Board of Directors or the specified directors on a periodic basis. | |||||||||||||||||
How can I communicate with Neoleukin’s Board of Directors? | |||||||||||||||||
The proxies’ authority to vote according to their judgment applies only to shares you own as the stockholder of record.
How can I communicate with Neoleukin’s Board of Directors?
Stockholders may communicate with our Board of Directors by sending a letter addressed to the Board of Directors, all independent directors or specified individual directors to: Neoleukin Therapeutics, Inc., c/o Corporate Secretary at 188 East Blaine Street, Suite 450, Seattle, Washington 98102. All communications will be compiled by the Secretary and submitted to the Board of Directors or the specified directorsHeld on a periodic basis.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDER MEETING TO BE HELD ON MAY 13, 2021
May 12, 2022
2021 are available at
http://investor.neoleukin.com/financial-filings/sec-filings.X | 12 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
Our Board of Directors is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors, and each class has a three-year term. Vacancies on the Board of Directors may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board of Directors to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified.
Our Board of Directors is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors, and each class has a three-year term. Vacancies on the Board of Directors may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board of Directors to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified. In March 2022, the Board of Directors, based on the recommendation of the Nominating and Governance Committee, appointed Rohan Palekar to fill a vacancy created by the resignation of Lewis T. “Rusty’” Williams. Mr. Palekar will serve as a Class III Director until the 2023 Annual Meeting. | ||||||||||||||||||||
Name | Age | Position | Director Since | ||||||||||||||
Class | |||||||||||||||||
| |||||||||||||||||
| |||||||||||||||||
| |||||||||||||||||
| |||||||||||||||||
Jonathan G. Drachman | 60 | Director, Chief Executive Officer | August 2019 | ||||||||||||||
Sarah B. Noonberg | 54 | Director | August 2019 | ||||||||||||||
Class III Directors – Continuing in Office until the 2023 Annual Meeting | |||||||||||||||||
M. Cantey Boyd | 42 | Director | August 2019 | ||||||||||||||
Todd Simpson | 61 | Director, Chairman of the Board | January 2014 | ||||||||||||||
Rohan Palekar | 56 | Director | March 2022 | ||||||||||||||
Class I Directors – Continuing in Office until the 2024 Annual Meeting | |||||||||||||||||
Martin Babler | 57 | Director | September 2020 | ||||||||||||||
Erin Lavelle | 44 | Director | June 2020 |
Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 13 |
PROPOSAL ONE |
Total number of Directors | 7 | |||||||||||||
Gender Identity | Male | Female | Non-Binary | Not Disclosed | ||||||||||
Number of Directors based on Gender Identity | 4 | 3 | – | – | ||||||||||
Number of Directors who identify in any categories below: | ||||||||||||||
African American or Black | – | – | – | – | ||||||||||
Alaskan Native or American Indian | – | – | – | – | ||||||||||
Asian | 1 | – | – | – | ||||||||||
Hispanic or Latinx | – | – | – | – | ||||||||||
Native Hawaiian or Pacific Islander | – | – | – | – | ||||||||||
White | 3 | 3 | – | – | ||||||||||
Two or More Races or Ethnicities | – | – | – | – | ||||||||||
LGBTQ+ | 1 | |||||||||||||
Did Not Disclose Demographic Background | – |
Independence | Tenure | Age |
X | 14 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
PROPOSAL ONE |
Martin Babler served as President and Chief Executive Officer at Principia Biopharma Inc., a biopharmaceutical company, from April 2011 until its acquisition by Sanofi S.A. in October 2020. From December 2007 to April 2011, Mr. Babler served as President and Chief Executive Officer of Talima Therapeutics, Inc., a pharmaceutical company. From 1998 to 2007, Mr. Babler held several positions at Genentech, Inc., a biopharmaceutical company, most notably as Vice President, Immunology Sales and Marketing. While at Genentech he also helped to build and led the Commercial Development organization and led the Cardiovascular Marketing organization. Mr. Babler was previously employed at Eli Lilly and Company, a pharmaceutical company, in positions focused on sales, sales management, global marketing and business development. Mr. Babler presently
serves on the board of directors of Omega Alpha SPAC and on the Emerging Companies Section Governing Board of the Biotechnology Innovation Organization, or BIO. Mr. Babler received a Swiss Federal Diploma in pharmacy from the Federal Institute of Technology in Zurich and completed the Executive Development Program at the Kellogg Graduate School of Management at Northwestern University. The Nominating and Governance Committee believes that Mr. Babler is qualified to serve on our Board of Directors because he has extensive experience in the biopharmaceutical industry.
Erin Lavelle has served as the Chief Operating Officer and Chief Financial Officer Eliem Therapeutics, a Seattle-based privately held neurological therapeutics company, since October 2020. From April 2018 to February 2020, Ms. Lavelle served as the Chief Operating Officer at Alder BioPharmaceuticals, Inc. In addition to that role, she served as Alder’s appointed director for Vitaeris Inc., a privately held biotechnology company based in Vancouver, British Columbia, Canada. Prior to that, she served in various roles at Amgen Inc. from 2003 to 2018, most recently serving as General Manager Taiwan from September 2017 to April 2018, as Executive Director, Japan Asia Pacific (Hong Kong) from May 2016 to September 2017, and Executive Director, Global Marketing Business Analytics and Insights from June 2014 to May 2016. She started her career in Investment Banking at Merrill Lynch. Ms. Lavelle holds a Bachelor of Arts in Economics from Yale University. The Nominating and Governance Committee believes that Ms. Lavelle is qualified to serve on our Board of Directors because she has extensive experience in the biopharmaceutical industry.
Lewis T. “Rusty” Williams, M.D., Ph.D., has served as the Chairman and Chief Executive Officer of Walking Fish Therapeutics, Inc., a biotechnology start-up company, since February 2019. Dr. Williams has also served as a venture partner of Quan Capital, LLP, a healthcare-focused venture capital firm, since October 2018. From January 2002 to December 2017, Dr. Williams founded and held several positions at Five Prime Therapeutics, Inc., culminating in the position of President and Chief Executive Officer from April 2011 to December 2017. From September 1992 to December 2001, Dr. Williams held several positions at Chiron Corporation, culminating in the position as Chief Scientific Officer and as a member of the board of directors. Prior to joining Chiron, Dr. Williams was a professor of medicine at the University of California, San Francisco from August 1984 to June 1993, where he served as the director of the Cardiovascular Research Institution and Daiichi Research Center. Prior to UCSF, Dr. Williams co-founded and served on the board of directors of COR Therapeutics, Inc., a biotechnology company focused on cardiovascular disease, from June 1989 to September 1994, and served on the faculties of Harvard Medical School and Massachusetts General Hospital from July 1982 to July 1984. He is a member of the National Academy of Sciences and a fellow of the American Academy of Arts and Sciences. Dr. Williams received his B.S. in Chemistry from Rice University, and his M.D. and Ph.D. in Pharmacology / Biochemistry from Duke University. The Nominating and Governance Committee believes that Dr. Williams is qualified to serve on our Board of Directors because he has extensive experience in the biopharmaceutical industry.
THE BOARD RECOMMENDS
A VOTE IN FAVOR OF EACH NAMED NOMINEE.
Directors Continuing in Office Until the 2022 Annual Meeting
Jonathan G. Drachman, M.D. | Director Since: 2019 | Age:60 | ||||||
Jonathan G. Drachman, M.D., has served as a director and the Chief Executive Officer of Neoleukin since November 2018. From November 2004 to May 2018, Dr. Drachman held several positions at Seattle Genetics, Inc., culminating in the position of Chief Medical Officer and Executive Vice President of Research and Development. From 1998 to 2004, he was a faculty member in the Division of Hematology at the University of Washington, and a Senior Investigator in the Division of Research and Education at Puget Sound Blood Center. He currently serves on the board of directors of Harpoon Therapeutics, Inc. and until recently was a director of Calithera Biosciences, Inc. Dr. Drachman received his M.D. at Harvard Medical School and his A.B. in Biochemistry from Harvard College. He completed his residency in internal medicine and a fellowship in medical oncology at the University of Washington. | ||||||||
The Nominating and Governance Committee believes that Dr. Drachman is qualified to serve on our Board of Directors because he has extensive experience in the biopharmaceutical industry and service as our Chief Executive Officer. |
Sarah B. Noonberg, M.D., Ph.D. | Director Since: 2019 | Age:54 | ||||||
Sarah B. Noonberg, M.D., Ph.D., is the Chief Medical Officer of Maze Therapeutics. From May 2018 to May 2019, Dr. Noonberg served as the Chief Medical Officer of Nohla Therapeutics Inc., a developer of universal, off-the-shelf cell therapies for patients with hematological malignancies and other critical diseases. Prior to joining Nohla Therapeutics, she served as the Chief Medical Officer of Prothena Corporation plc, a biotechnology company, from May 2017 to May 2018. Dr. Noonberg previously served as Group Vice President and Head of Global Clinical Development at BioMarin Pharmaceuticals Inc., a biotechnology company from August 2015 to March 2017. From May 2007 to August 2015, she held several positions at Medivation, Inc., a biopharmaceutical company, culminating in the position of Senior Vice President of Early Development. She currently serves on the board of directors of Protagonist Therapeutics, Inc. Dr. Noonberg received her M.D. at the University of California, San Francisco, her Ph.D. in Bioengineering at the University of California, Berkeley, and her B.S. in Engineering at Dartmouth College. She is a board-certified internist and completed her residency at Johns Hopkins Hospital. | ||||||||
The Nominating and Governance Committee believes that Dr. Noonberg is qualified to serve on our Board of Directors because she has extensive medical knowledge and clinical development and regulatory expertise. |
Sarah B. Noonberg, M.D., Ph.D., is the Chief Medical Officer of Maze Therapeutics. Previously, Dr. Noonberg served as the Chief Medical Officer of Nohla Therapeutics Inc., a developer each named nominee.
biotechnology company, from May 2017 to March 2018. Prior to joining Prothena, Dr. Noonberg served as Group Vice President and Head of Global Clinical Development at BioMarin Pharmaceuticals Inc., a biotechnology company, from August 2015 to March 2017. From May 2007 to August 2015, she held several positions at Medivation, Inc., a biopharmaceutical company, culminating in the position of Senior Vice President of Early Development. She currently serves on the board of directors of Protagonist Therapeutics, Inc. Dr. Noonberg received her M.D. at the University of California, San Francisco, her Ph.D. in Bioengineering at the University of California, Berkeley, and her B.S. in Engineering at Dartmouth College. She is a board-certified internist and completed her residency at Johns Hopkins Hospital. The Nominating and Governance Committee believes that Dr. Noonberg is qualified to serve on our Board of Directors because she has extensive medical knowledge and clinical development and regulatory expertise.
Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 15 |
PROPOSAL ONE |
M. Cantey Boyd is a Managing Director at Baker Brothers Investments,
M. Cantey Boyd | Director Since: 2019 | Age:42 | ||||||
M. Cantey Boyd is a Managing Director at Baker Bros. Advisors LP, a registered investment adviser focused on long-term investments in life-sciences companies. Prior to joining Baker Bros. Advisors LP in 2005, Ms. Boyd was an Analyst in the Healthcare Investment Banking Group of Deutsche Bank Securities from 2002 to 2004. Ms. Boyd graduated with an A.B. in Business-Economics from Brown University. | ||||||||
The Nominating and Corporate Governance Committee believes that Ms. Boyd is qualified to serve on our Board of Directors because of her significant experience working with life sciences companies. |
Rohan Palekar | Director Since: 2022 | Age: 56 | ||||||
Rohan Palekar was appointed to our Board of Directors in March 2022 to fill the vacancy created by the resignation of Dr. Williams from our Board of Directors. Mr. Palekar, age 56, has served as Chief Executive Officer and director of 89Bio, Inc., a biopharmaceutical company since June 2018. Mr. Palekar held various positions at Avanir Pharmaceuticals, Inc., a specialty pharmaceutical company, including the role of President and Chief Executive Officer of Avanir following its acquisition by Otsuka Pharmaceutical Co., Ltd. in 2015. Prior to the acquisition, Mr. Palekar had also served as Chief Operating Officer and Chief Commercial Officer of Avanir. From 2008 to 2011, Mr. Palekar served as Chief Commercial Officer for Medivation, Inc., a biopharmaceutical company, where he was responsible for all commercial activities, chemistry, manufacturing and controls, medical affairs and public relations functions. Mr. Palekar also spent over 16 years at Johnson & Johnson, a diversified healthcare company, in various senior commercial and strategic management roles. Since 2018, he has served as a trustee for Aim High for High School, a non-profit educational institution, and currently serves as Chairman of the Board of Trustees. Mr. Palekar earned his M.B.A. from the Tuck School of Business at Dartmouth College, his B.Com. in Accounting from the University of Mumbai and his L.L.B. from the University of Mumbai. Mr. Palekar is also a certified Chartered Accountant and a Cost and Management Accountant. | ||||||||
The Nominating and Corporate Governance Committee believes that Mr. Palekar is qualified to serve on our Board of Directors because of his extensive experience with biotechnology companies and his extensive knowledge of compliance and oversight of the financial reporting processes of publicly traded corporations. |
X | 16 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
PROPOSAL ONE |
Todd Simpson | Director Since: 2014 | Age:61 | ||||||
Todd Simpson has served as a member of our Board of Directors since January 2014 and as the Chairman of the Board since March 2020. Since October 2005, Mr. Simpson has served as the Chief Financial Officer of Seagen, Inc., a biotechnology company (formerly Seattle Genetics, Inc.). From October 2001 to October 2005 Mr. Simpson was Vice President, Finance & Administration and Chief Financial Officer of Targeted Genetics Corporation, a biotechnology company. From January 1996 to October 2001, Mr. Simpson served as Vice President, Finance & Administration and Chief Financial Officer of Aastrom Biosciences, Inc., a biotechnology company. From 1992 through August 1995, Mr. Simpson held various finance-related positions at Telios Pharmaceuticals, Inc., ultimately serving as Vice President of Finance and Chief Financial Officer until its acquisition by Integra LifeSciences Corporation, a biotechnology company, in August 1995; subsequent to that acquisition, he served as Treasurer of Integra LifeScience Corporation until December 1995. Mr. Simpson is a certified public accountant (inactive), and from 1983 to 1992 he practiced public accounting with the firm of Ernst & Young LLP. Mr. Simpson received a B.S. in Accounting and Computer Science from Oregon State University. | ||||||||
The Nominating and Corporate Governance Committee believes that Mr. Simpson is qualified to serve on our Board of Directors and as Chairman of the Audit Committee because of his extensive experience with biotechnology and pharmaceutical companies and his extensive knowledge of accounting principles and financial reporting rules and regulations, tax compliance and oversight of the financial reporting processes of publicly traded corporations. |
Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 17 |
PROPOSAL ONE |
Martin Babler | Director Since: 2020 | Age:57 | ||||||
Martin Babler has served on our Board of Directors since September 2020. He has served as President and CEO of Alumis Inc., a privately held biopharmaceutical company, since September 2021. From April 2011 to October 2020, Mr. Babler served as President and Chief Executive Officer at Principia Biopharma Inc., a biopharmaceutical company which was acquired by Sanofi SA in September 2020. From December 2007 to April 2011, Mr. Babler served as President and Chief Executive Officer of Talima Therapeutics, Inc., a pharmaceutical company. From 1998 to 2007, Mr. Babler held several positions at Genentech, Inc., a biopharmaceutical company, notably as Vice President, Immunology Sales and Marketing. While at Genentech he also helped to build and lead the commercial development organization and the cardiovascular marketing organization. Mr. Babler was previously employed at Eli Lilly and Company, a pharmaceutical company, in positions focused on sales, sales management, global marketing and business development. Mr. Babler presently serves on the board of directors of Omega Alpha SPAC, Prelude Therapeutics Inc, Sardona Therapeutics Inc and on the Health Section and Emerging Companies Section Governing Boards of the Biotechnology Innovation Organization, or BIO. Mr. Babler received a Swiss Federal Diploma in pharmacy from the Federal Institute of Technology in Zurich and completed the Executive Development Program at the Kellogg Graduate School of Management at Northwestern University. | ||||||||
The Nominating and Governance Committee believes that Mr. Babler is qualified to serve on our Board of Directors because he has extensive experience in the biopharmaceutical industry. |
Erin Lavelle | Director Since: 2020 | Age:44 | ||||||
Erin Lavelle has served on our Board of Directors since May 2020. Since October 2020, Erin has been the Chief Operating Officer and Chief Financial Officer for Eliem Therapeutics (ELYM), a Seattle-based public company focused on neurology therapeutics. From April 2018 to February 2020, Ms. Lavelle served as the Chief Operating Officer at Alder BioPharmaceuticals, Inc. In addition to that role, she served as Alder’s appointed director for Vitaeris Inc., a privately held biotechnology company founded based in Vancouver, British Columbia, Canada. Prior to that, she served in various roles at Amgen Inc. from 2003 to 2018, most recently serving as General Manager Taiwan from September 2017 to April 2018, as Executive Director, Japan Asia Pacific (Hong Kong) from May 2016 to September 2017, and Executive Director, Global Marketing Business Analytics and Insights from June 2014 to May 2016. She started her career in Investment Banking at Merrill Lynch. Ms. Lavelle holds a Bachelor of Arts in Economics from Yale University. | ||||||||
The Nominating and Governance Committee believes that Ms. Lavelle is qualified to serve on our Board of Directors because she has extensive experience in the biopharmaceutical industry. |
X | 18 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
Todd Simpson has served as the Chief Financial Officer of Seagen Inc., a biotechnology company, since October 2005. Previously, Mr. Simpson served from October 2001 to October 2005 as Vice President, Finance & Administration and Chief Financial Officer of Targeted Genetics Corporation, a biotechnology company. From January 1996 to October 2001, Mr. Simpson served as Vice President, Finance & Administration and Chief Financial Officer of Aastrom Biosciences, Inc., a biotechnology company. From August 1995 to December 1995, he served as Treasurer of Integra LifeSciences Corporation, a biotechnology company, which acquired Telios Pharmaceuticals, Inc., in August 1995. From 1992 until its acquisition by Integra, he served as Vice President of Finance and Chief Financial Officer of Telios and in various other finance-related positions. Mr. Simpson is a certified public accountant (inactive), and from 1983 to 1992 he practiced public accounting with the firm of Ernst & Young LLP. Mr. Simpson received a B.S. in Accounting and Computer Science from Oregon State University. The Nominating and Corporate Governance Committee believes that Mr. Simpson is qualified to serve on our Board of Directors because of his extensive experience with biotechnology and pharmaceutical companies and his extensive knowledge of accounting principles and financial reporting rules and regulations, tax compliance and oversight of the financial reporting processes of publicly traded corporations.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
INDEPENDENCE OF THE BOARD OF DIRECTORS
BOARD LEADERSHIP STRUCTURE
Board Leadership Structure
ROLE OF THE BOARD OF DIRECTORS IN RISK OVERSIGHT
Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 19 |
BOARD OF DIRECTORS |
MEETINGS OF THE BOARD OF DIRECTORS
INFORMATION REGARDING COMMITTEES OF THE BOARD OF DIRECTORS
Name | Audit | Compensation | Nominating and Corporate Governance | |||
Dr. Jonathan Drachman | ||||||
M. Cantey Boyd | X | X | ||||
Dr. Sarah Noonberg | X* | |||||
Dr. Lewis “Rusty” Williams | X | X* | ||||
Mr. Martin Babler | X | |||||
Mr. Todd Simpson | X* | |||||
Ms. Erin Lavelle | X | X | ||||
Total meetings in 2020: | 4 | 4 | 3 |
Name | Audit Committee | Compensation Committee | Nominating and Corporate Governance Committee | ||||||||
Dr. Jonathan Drachman | |||||||||||
Mr. Martin Babler | C | ||||||||||
Ms. M. Cantey Boyd | X | X | |||||||||
Ms. Erin Lavelle | X | X | |||||||||
Dr. Sarah Noonberg | C | ||||||||||
Mr. Rohan Palekar (1) | X | X | |||||||||
Mr. Todd Simpson | C | ||||||||||
Total meetings in 2021: | 4 | 4 | 4 |
| |||||||||||||||||
X | 20 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
BOARD OF DIRECTORS |
The Audit Committee of the Board of Directors was established by the Board of Directors in accordance with Section 3(a)(58)(A) of the Exchange Act to oversee our corporate accounting and financial reporting processes and audits of our financial statements. The primary functions of this committee include:
reviewing with management and our independent auditors our financial results, including our financial statement audits;
providing oversight over our accounting and financial reporting processes and systems of internal controls and the integrity of the Company’s financial statements;
selecting and hiring our independent registered public accounting firm;
evaluating the qualifications, independence and performance of our independent auditors;
reviewing with management our programs for compliance with legal and regulatory requirements and risk exposures;
reviewing and approving related-person transactions; and
the preparation of the audit committee report to be included in our annual proxy statement.
The Audit Committee consists of three directors: Ms. Lavelle, Mr. Simpson and Dr. Williams. The Board of Directors has adopted a written Audit Committee charter that is available to stockholders on our website at http://investor.neoleukin.com/corporate-governance.
The Board of Directors reviews the Nasdaq listing standards definition of independence for Audit Committee members on an annual basis and has determined that all members of our Audit Committee that served during 2020 were, and all current members are, independent (as independence is currently defined in Rule 5605(c)(2)(A)(i) of the Nasdaq listing standards and Rule 10A-3 of the Exchange Act). Our Board of Directors also determined that each member of the Audit Committee that served during 2020 could, and all current members can, read and understand fundamental financial statements in accordance with applicable requirements.
The Board of Directors has further determined that Mr. Simpson qualifies as an “audit committee financial expert,” as defined in applicable SEC rules. The Board of Directors made a qualitative assessment of Mr. Simpson’s level of knowledge and experience based on a number of factors, including his formal education and experience as a chief financial officer for a public reporting company.
Compensation Committee
The Compensation Committee of the Board of Directors acts on behalf of the Board of Directors to review, adopt and oversee our compensation strategy, policies, plans and programs and to assist the Board of Directors with other human resources matters. The primary functions of this committee include:
evaluating, recommending, approving and reviewing executive officer compensation arrangements, plans, policies and programs;
evaluating and recommending non-employee director compensation arrangements for determination by our Board of Directors;
administering our cash-based and equity-based compensation plans;
overseeing our compliance with regulatory requirements associated with the compensation of directors, officers and employees;
Members | Responsibilities | ||||
Mr. Simpson (Chair) Ms. Lavelle Mr. Palekar | |||||
•Reviewing with management and our independent auditors our financial results, including our financial statement audits; •Providing oversight over our accounting and financial reporting processes and systems of internal controls and the integrity of the company’s financial statements; •Selecting and hiring our independent registered public accounting firm; •Evaluating the qualifications, independence and performance of our independent auditors; •Reviewing with management our programs for compliance with legal and regulatory requirements and risk exposures; •Reviewing and approving related-person transactions; and •The preparation of the audit committee report to be included in our annual proxy statement. The Audit Committee has been established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Board of Directors reviews the Nasdaq listing standards definition of independence for Audit Committee members on an annual basis and has determined that all members of our Audit Committee that served during 2021 were, and all current members are, independent (as independence is currently defined in Rule 5605(c)(2)(A)(i) of the Nasdaq listing standards and Rule 10A-3 of the Exchange Act). Our Board of Directors also determined that each member of the Audit Committee that served during 2021 could, and all current members can, read and understand fundamental financial statements in accordance with applicable requirements. | |||||
The Board of Directors has adopted a written Audit Committee charter that is available to stockholders on our website at http://investor.neoleukin.com/corporate-governance. The Board of Directors has further determined that Mr. Simpson qualifies as an “audit committee financial expert,” as defined in applicable SEC rules. The Board of Directors made a qualitative assessment of Mr. Simpson’s level of knowledge and experience based on a number of factors, including his formal education and experience as a chief financial officer for a public reporting company. | |||||
Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 21 |
BOARD OF DIRECTORS |
Members | Responsibilities | ||||
Mr. Babler (Chair) Ms. Boyd Mr. Palekar | |||||
The Compensation Committee of the Board of Directors acts on behalf of the Board of Directors to review, adopt and oversee our compensation strategy, policies, plans and programs and to assist the Board of Directors with other human resources matters. The primary functions of this committee include: ▪evaluating, reviewing, recommending for approval by our Board of Directors (as needed), and approving executive officer compensation arrangements, plans, policies and programs; ▪evaluating and recommending non-employee director compensation arrangements for determination by our Board of Directors; ▪administering our cash-based and equity-based compensation plans; ▪overseeing our compliance with regulatory requirements associated with the compensation of directors, officers and employees; ▪reviewing with management the Company’s human resource activities; •when required, reviewing with management our Compensation Discussion and Analysis and considering whether to recommend that it be included in proxy statements and other filings; and •assisting our Board of Directors in assessing risks created by the incentives inherent in our compensation policies. | |||||
All members of our Compensation Committee that served during 2021 were, and all current members are, independent (as independence is currently defined in Rule 5605(d)(2) of the Nasdaq listing standards), are “non-employee directors” as defined in Rule 16b-3 promulgated under the Exchange Act. The Board of Directors has adopted a written Compensation Committee charter that is available to stockholders on our website at http://investor.neoleukin.com/corporate-governance. | |||||
when required, reviewing with management our Compensation Discussion and Analysis and considering whether to recommend that it be included in proxy statements and other filings.
The Compensation Committee consists of three directors: Mr. Babler, Ms. Boyd and Dr. Williams. All members of our Compensation Committee that served during 2020 were, and all current members are, independent (as independence is currently defined in Rule 5605(d)(2) of the Nasdaq listing standards), are “non-employee directors” as defined in Rule 16b-3 promulgated under the Exchange Act. The Board of Directors has adopted a written Compensation Committee charter that is available to stockholders on our website at http://investor.neoleukin.com/corporate-governance.
Compensation Committee Processes and Procedures
X | 22 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
BOARD OF DIRECTORS |
•evaluate the efficacy of our existing compensation strategy and practices in supporting and reinforcing our long-term strategic goals; and
•assist in refining our compensation strategy and in developing and implementing an executive compensation program to execute that strategy.
Compensation Committee Interlocks and Insider Participation
Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 23 |
BOARD OF DIRECTORS |
The Nominating and Corporate Governance Committee of the Board of Directors oversees our corporate governance function. The primary functions of this committee include:
identifying, considering and recommending candidates for membership on our Board of Directors;
Members | Responsibilities | ||||
Dr. Noonberg (Chair) Ms. Boyd Ms. Lavelle | |||||
The Nominating and Corporate Governance Committee of the Board of Directors oversees our corporate governance function. The primary functions of this committee include: •identifying, considering and recommending candidates for membership on our Board of Directors; •developing and recommending corporate governance guidelines and policies for the Company; •overseeing the evaluation of the performance of our Board of Directors and its committees; •advising our Board of Directors on other corporate governance matters; and •assisting the Board of Directors in overseeing any program related to corporate responsibility and sustainability, including environmental, social and corporate governance matters. | |||||
All members of the Nominating and Corporate Governance Committee that served during 2021 were, and all current members are independent (as independence is currently defined in Rule 5605(a)(2) of the Nasdaq listing standards). The Board of Directors has adopted a written Nominating and Corporate Governance Committee charter that is available to stockholders on our website at http://investor.neoleukin.com/corporate-governance. | |||||
developing and recommending corporate governance guidelines and policies for the Company;
overseeing the evaluation of the performance of our Board of Directors and its committees;
advising our Board of Directors on other corporate governance matters; and
assisting the Board of Directors in overseeing any program related to corporate responsibility and sustainability, including environmental, social and corporate governance matters.
The Nominating and Corporate Governance Committee consists of three directors: Ms. Boyd, Ms. Lavelle and Dr. Noonberg. All members of the Nominating and Corporate Governance Committee that served during 2020 were, and all current members are independent (as independence is currently defined in Rule 5605(a)(2) of the Nasdaq listing standards). The Board of Directors has adopted a written Nominating and Corporate Governance Committee charter that is available to stockholders on our website at http://investor.neoleukin.com/corporate-governance.
The Board shall be responsible for nominating persons for election to the Board and for filling vacancies on the Board that may occur between annual meetings of stockholders. Our Nominating and Corporate Governance Committee has primary responsibility for setting the qualifications as to who can sit on our Board. The Nominating and Corporate Governance Committee is tasked with identifying individuals who meet those qualifications and periodically reviewing our Board’s structure. As part of this process, the Nominating and Corporate Governance Committee will consider the size and breadth of our business and the need for Board diversity and will recommend candidates with the goal of developing an experienced, diverse, and highly qualified Board.
X | 24 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
BOARD OF DIRECTORS |
The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate was recommended by a stockholder. Stockholders who wish to recommend individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the Board of Directors may do so by delivering a written recommendation to the Nominating and Corporate Governance Committee at the following address: c/o Corporate Secretary, 188 East Blaine Street, Suite 450, Seattle, Washington 98102. Submissions must include the full name of the proposed nominee, a description of the proposed nominee’s business experience for at least the previous five years, complete biographical information, a description of the proposed nominee’s qualifications as a director and a representation that the nominating stockholder is a beneficial or record holder of our stock. Any such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director if elected.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
CODE OF ETHICS
CORPORATE GOVERNANCE GUIDELINES
Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 25 |
BOARD OF DIRECTORS |
X | 26 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
independence and has discussed with the independent registered public accounting firm the accounting firm’s independence. Based on the foregoing, the Audit Committee has recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 27 |
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
SUMMARY
Deloitte & Touche LLP, an independent registered public accounting firm, served as our independent auditors for the year ended December 31, 2020.
The Audit Committee of the Board of Directors has appointed Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021, and has further directed that management submit the appointment of its independent registered public accounting firm for ratification by the stockholders at the Annual Meeting. Representatives of Deloitte & Touche LLP are expected to be present at the Annual Meeting by telephone. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
Summary Deloitte & Touche LLP, an independent registered public accounting firm, served as our independent auditors for the year ended December 31, 2021. The Audit Committee of the Board of Directors has appointed Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022 and has further directed that management submit the appointment of its independent registered public accounting firm for ratification by the stockholders at the Annual Meeting. Representatives of Deloitte & Touche LLP are expected to attend the Annual Meeting virtually. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions. | ||||||||||||||||||||
CHANGE IN INDEPENDENT REGISTERED ACCOUNTING FIRM
X | 28 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
PROPOSAL TWO |
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Principal Accountant Fees and Services
2021(1) ($) | 2020(1) ($) | |||||||||||||
Audit Fees | 65,281 | 62,886 | ||||||||||||
Audit-related Fees | — | — | ||||||||||||
Tax Fees | — | — | ||||||||||||
All Other Fees | — | — | ||||||||||||
Total Fees | 65,281 | 62,886 |
2020(1) | 2019(1) | |||||||
Audit Fees | $ | 59,084 | $ | 308,047 | ||||
Audit-related Fees | — | 28,226 | ||||||
Tax Fees | — | — | ||||||
All Other Fees | — | — | ||||||
|
|
|
| |||||
Total Fees | $ | 59,084 | $ | 336,273 |
|
US$0.7462, respectively.
2020 | 2019 | |||||||
Audit Fees | $ | 518,000 | $ | — | ||||
Audit-related Fees | — | — | ||||||
Tax Fees | — | — | ||||||
All Other Fees | 2,086 | — | ||||||
|
|
|
| |||||
Total Fees | $ | 520,086 | $ | — |
2021:
2021 ($) | 2020 ($) | |||||||||||||
Audit Fees | 494,013 | 520,500 | ||||||||||||
Audit-related Fees | — | — | ||||||||||||
Tax Fees | — | — | ||||||||||||
All Other Fees | 2,089 | 2,086 | ||||||||||||
Total Fees | 496,102 | 522,586 |
Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 29 |
PROPOSAL TWO |
The total Audit fees for Deloitte & Touche LLP for the fiscal year ended December 31, 2020 includes $2,500 in Audit fees billed after March 31, 2021, the date that our proxy statement for our 2021 annual meeting of stockholders was filed with the SEC
.Fees”.
All fees described above were pre-approved by the Audit Committee.
PRE-APPROVAL POLICIES AND PROCEDURES
The Audit Committee has determined that the rendering of services other than audit services by Deloitte & Touche LLP is compatible with maintaining the principal accountant’s independence.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL NO. 2.
APPROVAL OF AMENDMENTS TO THE 2014 EQUITY INCENTIVE PLAN
Overview
We are asking our stockholders to approve an amendment and restatementThe Board recommends a vote in favor of our 2014 Equity Incentive Plan (the “Restated 2014 Plan”) to enable us to continue to grant shares of our common stock reserved for issuance under the 2014 Equity Incentive Plan (“2014 Plan”). Our Board of Directors adopted the Restated 2014 Plan on March 23, 2021, subject to approval by our stockholders. If the Restated 2014 Plan is not approved, our current 2014 Plan will remain as-is.
Our 2014 Plan was initially adopted by Aquinox Pharmaceuticals, Inc., or Aquinox, and approved by its shareholders in 2014. In 2019, Aquinox and Neoleukin Corporation completed a reverse merger (the “Reverse Merger”), after which the 2014 Plan covered employees, consultants and directors of both Aquinox and Neoleukin Corporation. Aquinox was renamed Neoleukin Therapeutics, Inc. (“Neoleukin”) on the completion of the Reverse Merger.
The 2014 Plan, as originally adopted in 2014, provides that the share pool automatically increases on each January 1 by 4% of the total number of shares of all classes of our common stock outstanding on December 31st of the preceding calendar year, through January 1, 2024 (the “Evergreen Provision”), unless our Board of Directors determines to increase the share pool by a smaller number of shares.
Our Board of Directors has determined that it is in the best interests of Neoleukin and its stockholders to seek approval of the Restated 2014 Plan with the following material changes from our 2014 Plan, which changes were approved by our Board of Directors on March 23, 2021:
Revise the current Evergreen Provision to add pre-funded warrants (which are warrants with a nominal exercise price that generally may be exercised for shares of common stock at any time) to the outstanding classes of common stock to which the 4% share replenishment will be applied;
Extend the Evergreen Provision, as amended, for 6 years such that it will expire on January 1, 2030, instead of January 1, 2024;
X | 30 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
Revise the total compensation that may be awarded to non-employee directors from $600,000 to $750,000 (increased to $1,000,000 in the calendar year of the director’s initial services as a non-employee director), with such compensation limit to cover awards granted in such calendar year combined with cash compensation for such calendar year, as calculated under the Restated 2014 Plan; and
Provide for a 9-year term of the Restated 2014 Plan from the date of the Board of Directors’ approval of the Restated 2014 Plan (March 23, 2030).
Reasons for Amendment and Restatement of the 2014 Plan
We are an early stage company with a rapidly growing workforce. We had 8 employees at the end of 2018 and 70 employees as of December 31, 2020. In addition, we believe that equity awards are a crucial component of our total compensation package, necessary to recruit, retain and reward qualified personnel in the intensely competitive biotechnology and pharmaceutical industry. We expect to continue to grow rapidly as we become a clinical stage company.
Many of our peers, with whom we compete for talent, adopted 10-year evergreens in connection with their initial public offerings, each with a 4-5% average annual increase. We believe that in many respects we were analogous to a newly public company upon the completion of the Reverse Merger. Neoleukin Corporation was only formed in 2018 as a private company prior to the Reverse Merger, and became part of Neoleukin, the publicly traded entity, following the Reverse Merger. At the time of our Reverse Merger in 2019, there were only 5 years remaining
in the current Evergreen Provision. We do not believe that our current share pool plus the current Evergreen Provision provide us with enough flexibility to appropriately meet our anticipated equity needs in the years of expected high growth ahead. We further believe that having incremental share pool increases each year via an evergreen provision is more prudent and efficient at our current growth stage than asking for large share increases periodically.
Also, the efficacy of our current Evergreen Provision is materially impeded because we have issued a significant number of pre-funded warrants in lieu of common stock to investors. Pre-funded warrants are issued to investors either in exchange for fully paid shares of common stock or in connection with an equity offering and at a purchase price consistent with the price of common stock issued in such offering, which are fully vested and exercisable at any time for common stock for only additional nominal cash consideration (by way of example, all pre-funded warrants outstanding as of December 31, 2020 have a per share exercise price of $0.000001), such that there is no meaningful cost to convert such warrants into shares of common stock. As of December 31, 2020, we had 12,663,010 pre-funded warrants outstanding and 42,196,296 shares of common stock outstanding. Accordingly, if as of December 31, 2020, the pre-funded warrants were included as shares of common stock outstanding, the pre-funded warrants would represent 23% of the total. Because of the characteristics of pre-funded warrants discussed above and the significant number of pre-funded warrants outstanding, our Compensation Committee and Board of Directors, with the input of its independent compensation consultant, believes it is appropriate to include pre-funded warrants in the calculation of the number of shares of outstanding common stock to which the 4% evergreen increase will be applied. This would include any pre-funded warrants currently outstanding and any that we issue in the future.
In determining the proposed changes to the Evergreen Provision, our Board of Directors carefully considered a number of factors, including the potential dilutive impact of equity awards and the Company’s anticipated growth, hiring plans, retention needs and competitive landscape for talent.
In approving the Restated 2014 Plan, our stockholders will also be approving (i) an increased term of the plan, through March 23, 2030, 9-years from the date of the Board of Directors’ approval of the Restated 2014 Plan, (ii) a revised limit on the aggregate number of shares that may be issued upon the exercise of incentive stock options under the Restated 2014 Plan, which limit is included to comply with requirements under regulations relating to incentive stock options, and (iii) an increase in the yearly compensation limit for non-employee directors from $600,000 to $750,000 (increased to $1,000,000 in the calendar year of the director’s initial services as a non-employee director), with such compensation limit to cover awards granted in such calendar year combined with cash compensation for such calendar year, as calculated under the Restated 2014 Plan. Our compensation consultant advised us that the $750,000 and $1,000,000 limits are aligned with comparable companies.
If our stockholders do not approve the Restated 2014 Plan, the 2014 Plan will remain as-is.
Approval of the Restated 2014 Plan will enable us to continue to attract, retain and motivate talented individuals who possess the skills necessary to expand our business and assist in the achievement of our strategic objectives, to the benefit of all of our stockholders and in the best interest of the Company.
We believe that our future success and our ability to remain competitive are dependent on our continuing efforts to attract, retain and motivate highly qualified personnel. Allowing employees to participate in owning shares of our common stock helps align the objectives of our stockholders and our employees, and is important in attracting, motivating and retaining the highly skilled personnel that are essential to our success. We currently grant options to the majority of our newly hired employees and to all of our executives and Information
Summary of the Restated 2014 Plan
Our 2014 Plan was initially adopted by Aquinox Pharmaceuticals, Inc., or Aquinox, and approved by its shareholders in 2014. The 2014 Plan was a successor and continuation of Acquinox’s Joint Canadian Stock Option Plan (the “2006 Plan”). In 2019, Aquinox and Neoleukin Corporation completed the Reverse Merger, after which the 2014 Plan covered both employees of Aquinox and Neoleukin. Aquinox was renamed Neoleukin Therapeutics, Inc. on the completion of the Reverse Merger. In 2019 and shortly following the Reverse Merger, our 2014 Plan was amended.
The amendments described in this proposal were adopted by the Board of Directors in March 2021 subject to approval of our stockholders. The material terms of the Restated 2014 Plan, as would be modified by the proposed amendments, are summarized below. The summary is qualified in its entirety by reference to the full text of the Restated 2014 Plan, which is attached as Appendix A to this proxy statement.
The Restated 2014 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards, and other forms of stock awards to our employees, directors, and consultants which may vest subject to continued service or such performance criteria as determined by our Compensation Committee in accordance with the terms of the Restated 2014 Plan.
Plan Administration
Our Compensation Committee administers the Restated 2014 Plan. Subject to the terms of our Restated 2014 Plan, our Compensation Committee has the authority to, among other matters, select the persons to whom awards may be granted, construe and interpret our Restated 2014 Plan as well as to determine the terms of such awards and prescribe, amend and rescind the rules and regulations relating to administration of the Restated 2014 Plan or any award granted thereunder. Our Compensation Committee may, with consent of any adversely affected participant, reduce the exercise price or purchase price of any outstanding award, provide for the cancellation of any outstanding stock award in exchange for new stock awards, cash or other consideration, or take any other action that is treated as a repricing under generally accepted accounting principles.
The Restated 2014 Plan provides that the Board of Directors or Compensation Committee may delegate its authority, including the authority to grant awards to non-officer employees and service providers of the Company, to one or more executive officers to the extent permitted by applicable law.
Share Reserve
Aquinox initially reserved 826,589 shares for future issuance under the 2014 Plan, which included a number of shares of common stock equal to (i) 793,257 new shares plus (ii) 33,332 shares issuable upon the exercise of outstanding options granted under the 2014 Plan at the time the 2014 Plan became effective. In connection with and shortly following the Reverse Merger, the number of shares reserved for issuance under the 2014 Plan was increased by 4,500,000. Under the terms of our current 2014 Plan, the number of shares reserved for issuance under the 2014 Plan is automatically increased on January 1 of each calendar year through 2024 by 4% of the total number of shares of all classes of our common stock outstanding as of the immediately preceding December 31, or such lesser number of shares as determined by our Board of Directors. As a result, the number of shares reserved for issuance under the 2014 Plan increased by 427,804; 688,479; 936,926; 938,897; 941,494; 1,519,873; and 1,687,852 shares on each January 1 from 2015 through 2021.
If approved, under the terms of our Restated 2014 Plan, the number of shares reserved for issuance under our Restated 2014 Plan will be automatically increased on January 1 of each calendar year from 2022 through 2030 by 4% of the sum of (i) the total number of shares of all classes of our common stock and (ii) the total number of shares of our common stock subject to pre-funded warrants, in each case that are outstanding on December 31st of the preceding calendar year, or such lesser number of shares as determined by our Board of Directors.
Shares subject to awards granted under our Restated 2014 Plan and 2006 Plan that expire or terminate for any reason prior to exercise or settlement, are forfeited because of the failure to meet a contingency or condition required
to vest such shares or that are repurchased at the original issuance price, or are otherwise reacquired or are withheld (or not issued) to satisfy a tax withholding obligation in connection with an award will become available for future grant under our Restated 2014 Plan.
As of March 23, 2021, the date the Board of Directors approved the Restated 2014 Plan, there were 11,344,478 shares available for issuance under our Restated 2014 Plan, 3,607,620 shares were subject to outstanding stock options and 148,500 shares were subject to outstanding restricted stock units. If this proposal is approved, the number of shares reserved for issuance under our Restated 2014 Plan will be subject to automatic increase pursuant to the terms described above for our Restated 2014 Plan.
Eligibility
Persons eligible to participate in the Restated 2014 Plan are those employees, officers and directors of, and consultants and advisors to, Neoleukin, as selected from time to time by the administrator in its discretion.
Participant & Non-Employee Director Share Limits
Pursuant to the terms of the Restated 2014 Plan, no participant may be granted (i) stock-based awards covering more than 5,445,000 shares of common stock or (ii) performance cash awards for more than $2,500,000 in any calendar year, in each case subject to certain exceptions set forth in the Restated 2014 Plan. In addition, no non-employee director may receive awards under our Restated 2014 Plan that, when combined with cash compensation received for service as a non-employee director, exceeds $750,000.00 in value in any calendar year, increased to $1,000,000.00 in value in the calendar year of his or her initial services as a Non-Employee Director.
Corporate Transactions
Our Restated 2014 Plan provides that in the event of certain specified Corporate Transactions, as defined under our Restated 2014 Plan, our Compensation Committee may take any one or more of the following actions with respect to outstanding awards, which outstanding awards need not be treated identically: (i) arrange for the assumption, continuation or substitution of outstanding awards by a successor corporation (including, but not limited to, an award to acquire the same consideration paid to the stockholders of the Company pursuant to a Corporate Transaction, as defined in the Restated 2014 Plan); (ii) arrange for the assignment of any reacquisition or repurchase rights held by the Company to a successor corporation; (iii) accelerate the vesting, in whole or in part, of any award and provide for its termination prior to the transaction; (iv) arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by the Company; or (v) cancel or arrange for the cancellation of any award prior to the transaction in exchange for a cash payment, if any, determined by our Compensation Committee.
Transferability and Recoupment of Awards
No participant may transfer awards under our Restated 2014 Plan other than by will, the laws of descent and distribution, or as otherwise provided under our Restated 2014 Plan. Awards granted under the Restated 2014 Plan will be subject to recoupment in accordance with any claw-back policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange on which the Company’s securities are listed or as is otherwise required by other applicable law or imposed by the Board of Directors.
Amendment or Termination
Our Board of Directors has the authority to amend, suspend, or terminate our Restated 2014 Plan, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. No awards may be granted after the ninth anniversary of the date our Board of Directors approved our Restated 2014 Plan.
Federal Tax Consequences
The following is a brief summary of the federal income tax consequences applicable to awards granted under the Restated 2014 Plan based on federal income tax laws in effect on the date of this Proxy Statement. This
summary is not intended to be exhaustive and does not address all matters that may be relevant to any particular participant. The summary does not discuss the tax laws of any state, municipality, or foreign jurisdiction, or the gift, estate, excise, payroll, or other tax laws. This summary does not discuss the impact of Section 280G of the Code governing parachute payments or Section 409A of the Code governing nonqualified deferred compensation plans. Because circumstances may vary, we advise all participants to consult their own tax advisors under all circumstances.
Stock Options. A recipient of a stock option will generally not recognize taxable income upon the grant of the option. For non-qualified stock options, the participant will recognize ordinary income upon exercise in an amount equal to the difference between the fair market value of the shares and the exercise price on the date of exercise, and the Company is generally entitled to a corresponding deduction. Any gain or loss recognized upon any later disposition of the shares generally will be a capital gain or loss. The acquisition of shares upon exercise of an incentive stock option will generally not result in any taxable income to the participant, however the excess of the fair market value of the common stock received over the exercise price may be treated as an adjustment for purposes of calculating alternative minimum tax. The gain or loss recognized by the participant on a later sale or other disposition of such shares will be a long-term capital gain or loss if the participant holds the shares for the statutorily required period (more than two years from the date of grant and more than one year from the date of exercise), and the Company will not be entitled to a corresponding deduction. If the shares are not held for the required period, the participant will recognize ordinary income in the year of such disposition equal to the lesser of (i) the difference between the fair market value of the shares on the date of exercise and the exercise price, and (ii) the difference between the sales price and the exercise price and the Company will receive a corresponding deduction. Any additional gain recognized on the sale generally will be a capital gain. Different and complex rules may apply to incentive stock options that are early exercisable, and we encourage participants holding such any such awards to seek the advice of their own tax counsel.
Other Share-Based Awards. The tax effects of other share-based awards will vary depending on the type, terms and conditions of those awards. In general, the current federal income tax consequences of other awards authorized under the Restated 2014 Plan follow certain basic principles: nontransferable restricted stock subject to a substantial risk of forfeiture and restricted stock units will result in income recognition equal to the excess of the fair market value over the price paid, if any, at the time the restrictions applicable to such awards lapse (unless, with respect to an award of restricted stock, the recipient elects to accelerate recognition of income as of the date of grant). In each of the foregoing cases, the Company will generally have a corresponding deduction at the time the participant recognizes income, subject to Section 162(m) of the Code with respect to covered employees as described below.
Impact of Section 162(m)
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally disallows public companies a tax deduction for federal income tax purposes of remuneration in excess of $1 million paid to certain “covered employees” within the meaning of Section 162(m). Recent changes to Section 162(m) in connection with the passage of the Tax Cuts and Jobs Act repealed exceptions to the deductibility limit that were previously available for “qualified performance-based compensation,” including stock option grants, effective for taxable years after December 31, 2017. As a result, any cash or equity compensation paid to certain of our officers in excess of $1 million will be non-deductible unless it qualifies for transition relief afforded to compensation payable pursuant to certain binding arrangements in effect on November 2, 2017. While our Compensation Committee may consider the deductibility of awards as one factor in determining executive compensation, our 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 compensation programs even if the awards are not deductible by us for tax purposes. Moreover, because of uncertainties in the interpretation and implementation of the changes to Section 162(m), including the scope of the transition relief, we can offer no assurance of deductibility.
New Plan Benefits
At our Board of Directors’ next meeting, we expect to make equity grants to our new and continuing members of our Board of Directors consistent with our director compensation policy. See “Director Compensation.” All other future awards to directors, executive officers, employees and consultants are made at the discretion of our Compensation Committee, or by our Board of Directors acting in place of our Compensation Committee. As a result, the benefits and amounts that will be received or allocated under the Restated 2014 Plan are not determinable at this time.
Existing Plan Benefits
From the inception of the 2014 Plan through March 1, 2021, options to purchase a total of 7,576,822 shares had been granted under the 2014 Plan, of which 1,142,455 shares had been exercised and 3,608,620 shares of which remained outstanding. The options outstanding as of March 1, 2021, had a weighted-average exercise price of $9.97 per share and a weighted average remaining contractual term of 8.67 years. From the inception of the 2014 Plan through March 1, 2021, restricted stock units covering a total of 224,000 shares have been granted and 178,500 remained outstanding under the 2014 Plan. The closing price per share of our common stock as reported by Nasdaq on March 1, 2021 was $12.35.
The table below shows grants made to our named executive officers, all current executive officers as a group, all current non-employee directors as a group and all current employees (excluding all executive officers) for the aggregate number of awards under the 2014 Plan from the inception of the 2014 Plan through March 1, 2021, without regard to equity awards that have been forfeited or cancelled:
Name and Principal Position | Number of Shares Underlying Options Granted | Number of Shares Underlying RSUs Granted | ||||||
Jonathan G. Drachman | 420,000 | (1) | — | |||||
Robert Ho | 290,000 | 75,000 | ||||||
Holly Vance | 220,000 | — | ||||||
Martin Babler | 50,000 | — | ||||||
M. Cantey Boyd | 47,000 | — | ||||||
Erin Lavelle | 50,000 | — | ||||||
Sarah B. Noonberg | 47,000 | — | ||||||
Todd Simpson | 91,833 | — | ||||||
Lewis T. “Rusty” Williams | 47,000 | — | ||||||
All current executive officers as a group (4 persons) | 1,075,000 | (1) | 75,000 | |||||
All current non-employee directors as a group (6 persons) | 332,833 | — | ||||||
All employees as a group, excluding executive officers (159 persons) | 6,168,989 | 149,000 |
|
Vote Required
The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote on the matter at the Annual Meeting will be required to approve the Equity Plan Proposal.
Certain Interests of Directors
In considering the recommendation of our Board of Directors with respect to the approval of the Restated 2014 Plan, stockholders should be aware that the members of our Board of Directors have certain interests that may present them with conflicts of interest in connection with such proposal. As discussed above, directors are eligible to receive awards under the Restated 2014 Plan. Our Board of Directors recognizes that approval of this proposal may benefit our directors and their successors.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE AMENDED
AND RESTATED 2014 EQUITY INCENTIVE PLAN
EQUITY COMPENSATION PLAN INFORMATION
The following table provides certain information with respect to all of our equity compensation plans in effect
as of December 31, 2020:
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for issuance under equity compensation plans | |||||||||
Equity compensation plans approved by stockholders | 3,772,789 | (1) | $ | 9.23 | 6,797,116 | (3)(4) | ||||||
Equity compensation plans not approved by | 3,260,000 | $ | 2.80 | — | ||||||||
Total | 7,032,789 | $ | 6.25 | 6,797,116 |
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants, and Rights ($) | Number of Securities Remaining Available for Issuance Under Equity Compensation Plans | ||||||||||||||||||
Equity compensation plans approved by stockholders | 6,248,445 | (1) | 9.06 | 5,730,137 | (3)(4) | |||||||||||||||
Equity compensation plans not approved by stockholders (2) | 2,847,500 | 2.80 | — | |||||||||||||||||
Total | 9,095,945 | 7.20 | 5,730,137 |
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| Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 31 |
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We are providing our stockholders with an opportunity to vote, on an advisory basis, on the compensation of our named executive officers as disclosed in the “Executive Compensation” section, the compensation tables and the narrative discussions set forth on pages 31 to 34 of this proxy statement. This non-binding advisory vote is commonly referred to as a “Say on Pay” proposal.
We are providing our stockholders with an opportunity to vote, on an advisory basis, on the compensation of our named executive officers as disclosed in the “Executive Compensation” section, the compensation tables and the narrative discussions set forth on pages 38 to 43 of this proxy statement. This non-binding advisory vote is commonly referred to as a “Say on Pay” proposal. Our Board and stockholders have determined to hold a “Say on Pay” advisory vote every year. In accordance with this determination and Section 14A of the Securities Exchange Act of 1934, as amended, and as a matter of good corporate governance, we are asking you to indicate your support for the compensation of our named executive officers as described in this proxy statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in the “Executive Compensation” section of this proxy statement. | ||||||||||||||||||||
2021.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL NO. 4.
X | 32 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
•each of our named executive officers;
•each of our directors;
•all of our directors and executive officers as a group; and
•each person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock.
Beneficial Ownership | ||||||||
Beneficial Owner | Number of Shares | Percent of Total | ||||||
Named Executive Officers and Directors: | ||||||||
Jonathan G. Drachman(1) | 2,886,186 | 6.7 | % | |||||
Robert Ho(2) | 82,167 | * | ||||||
Holly Vance | — | — | ||||||
Martin Babler | — | — | ||||||
M. Cantey Boyd(3) | — | — | ||||||
Erin Lavelle | — | — | ||||||
Sarah B. Noonberg(4) | 30,250 | * | ||||||
Todd Simpson(5) | 75,083 | * | ||||||
Lewis T. “Rusty” Williams(6) | 30,250 | * | ||||||
All executive officers and directors as a group (10 persons)(7) | 4,738,515 | 10.9 | % | |||||
5% Stockholders: | ||||||||
Baker Bros. Advisors LP. and Affiliates(8) | 4,269,559 | 9.9 | % | |||||
Entities affiliated with Redmile Group, LLC(9) | 4,195,658 | 9.9 | % | |||||
EcoR1 Capital, LLC(10) | 3,122,704 | 7.4 | % | |||||
Daniel-Adriano Silva | 2,938,146 | 7.0 | % | |||||
Umut Ulge | 2,945,441 | 7.0 | % | |||||
Black Rock, Inc. (11) | 2,684,910 | 6.4 | % |
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Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 33 |
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
Beneficial Ownership | |||||||||||
Beneficial Owner | Number of Shares (#) | Percent of Total (%) | |||||||||
Named Executive Officers and Directors: | |||||||||||
Jonathan G. Drachman(1) | 3,682,436 | 8.67 | |||||||||
Robert Ho(2) | 151,086 | * | |||||||||
Priti Patel(3) | 130,750 | * | |||||||||
Martin Babler(4) | 41,666 | * | |||||||||
M. Cantey Boyd(5) | – | – | |||||||||
Erin Lavelle(6) | 41,666 | * | |||||||||
Sarah B. Noonberg(7) | 64,666 | * | |||||||||
Todd Simpson(8) | 109,499 | * | |||||||||
Rohan Palekar | – | – | |||||||||
All executive officers and directors as a group (10 persons)(9) | 5,847,651 | 13.76 | |||||||||
5% Stockholders: | |||||||||||
Baker Bros. Advisors LP. and Affiliates(10) | 4,245,148 | 9.99 | |||||||||
Entities affiliated with Redmile Group, LLC(11) | 4,245,148 | 9.99 | |||||||||
Pictet Asset Management SA(12) | 2,574,289 | 6.06 | |||||||||
Daniel Adriano Silva Manzano(13) | 2,909,168 | 6.85 | |||||||||
Umut Ulge(14) | 3,127,733 | 7.36 | |||||||||
BlackRock, Inc.(15) | 2,604,645 | 6.13 |
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
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(4)Consists of 41,666 shares issuable pursuant to stock options exercisable within 60 days of March 17, 2022. (5)Ms. Boyd, an employee of Baker Bros. Advisors LP (the “Adviser”), serves on our Board of Directors as a representative of 667, L.P. (“667”) and Baker Brothers Life Sciences, L.P. (“Life Sciences”, and together with 667, the “Funds”) and the Adviser may be deemed to beneficially own the securities received by Ms. Boyd as compensation for serving as a director. Pursuant to the policies of the Adviser, Ms. Boyd does not have any right to the pecuniary interest in securities received as compensation for serving as a director and the Funds are entitled to an indirect proportionate pecuniary interest in such securities. (6)Consists of 41,666 shares issuable pursuant to stock options exercisable within 60 days of March 17, 2022. (7)Consists of 64,666 shares issuable pursuant to stock options exercisable within 60 days of March 17, 2022. (8)Consists of 109,499 shares issuable pursuant to stock options exercisable within 60 days of March 17, 2022. (9)Consists of (a) 3,753,175 shares held by the directors and executive officers as of March 17, 2022, (b) 2,084,476 shares issuable pursuant to stock options exercisable within 60 days of March 17, 2022, and (c) 10,000 shares issuable pursuant to settlement of restricted stock unit awards within 60 days of March 17, 2022 (10)Based on information provided in a Schedule 13D/A and Form 4 filed with the SEC on December 23, 2020 and, with respect to certain securities, the Company’s records. The Schedule 13D/A was filed jointly by the Baker Bros. Advisors LP (the “Adviser”), Baker Bros. Advisors (GP) LLC (the “Adviser GP”), Felix J. Baker, and Julian C. Baker, with respect to shares held by the Funds (defined below), Felix J. Baker and Julian C. Baker, and certain stock options granted to a member of our Board of Directors. Current beneficial ownership of the Adviser, the Adviser GP, and Messrs. Baker consists of (i) 320,049 shares of common stock and 36,990 shares of common stock issuable upon the exercise of pre-funded warrants held by 667, L.P. (“667”), (ii) 3,501,691 shares of common stock and 317,233 shares of common stock issuable upon the exercise of pre-funded warrants held by Baker Brothers Life Sciences, L.P. (“Life Sciences,” and together with 667, the “Funds”) and (iii) 64,666 shares of common stock issuable upon exercise of stock options held by M. Cantey Boyd exercisable within 60 days of March 17, 2022. In addition, Felix J. Baker and Julian C. Baker each directly hold 2,260 shares of common stock. The pre-funded warrants are only exercisable to the extent that after giving effect to such exercise the holders thereof and their affiliates would beneficially own no more than 9.99% of our outstanding common stock (the “Maximum Percentage”). By written notice to the Company, the Funds may from time to time increase or decrease the Maximum Percentage applicable to that Fund to any other percentage not in excess of 19.99%. Any such change will not be effective until the 61st day after such notice is delivered to us. As a result of this restriction, the number of shares of common stock that may be issued upon exercise of the pre-funded warrants by the above holders may change depending upon changes in the outstanding shares of common stock. Without giving effect to the above beneficial ownership limitation, the pre-funded warrants that 667 holds would be exercisable for an aggregate of 1,199,122 shares of common stock and the pre-funded warrants that Life Sciences holds would be exercisable for an aggregate of 10,283,888 shares of common stock. Pursuant to management agreements, as amended, among the Adviser, the Funds and their respective general partners, the Funds respective general partners relinquished to the Adviser all discretion and authority with respect to the investment and voting power of the securities held by the Funds, and thus the Adviser has complete and unlimited discretion and authority with respect to the Funds’ investments and voting power over investments. The Adviser GP, Felix J. Baker and Julian C. Baker, as managing members of the Adviser GP, and the Adviser may be deemed to be beneficial owners of securities of the Company directly held by the Funds. M. Cantey Boyd, an employee of the Adviser, serves on our Board of Directors as a representative of the Funds and the Adviser may be deemed to beneficially own the securities received by Ms. Boyd as compensation for serving as a director. Pursuant to the policies of the Adviser, Ms. Boyd does not have any right to the pecuniary interest in securities received as compensation for serving as a director and the Funds are entitled to an indirect proportionate pecuniary interest in such securities. The address of the foregoing entities and persons is 860 Washington Street, 3rd Floor, New York, New York 10014. (11)Based solely on information provided in a Schedule 13G filed with the SEC on February 14, 2022. Redmile Group, LLC’s beneficial |
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DELINQUENT SECTION 16(A) REPORTS
Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than ten percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock is comprised of 3,490,835 shares of Common Stock owned by certain private investment vehicles and/or separately managed accounts managed by Redmile Group, LLC, which shares of Common Stock may be deemed beneficially owned by Redmile Group, LLC as investment manager of such private investment vehicles and/or separately managed accounts. The reported securities may also be deemed beneficially owned by Jeremy C. Green as the principal of Redmile Group, LLC. Redmile Group, LLC and other equity securities. Officers, directors and greater than ten percent stockholders are required by SEC regulationMr. Green each disclaim beneficial ownership of these shares, except to furnish us with copiesthe extent of all Section 16(a) forms they file.
To our knowledge, based solely on a reviewits or his pecuniary interest in such shares, if any. Subject to the Beneficial Ownership Blocker (as defined below), Redmile Group, LLC may also be deemed to beneficially own 1,180,000 shares of Common Stock issuable upon exercise of certain Pre-Funded Warrants to Purchase Common Stock (the “Warrants”). Pursuant to the terms of the copiesWarrants, we may not effect any exercise of any Warrant, and a holder of a Warrant does not have the right to exercise any portion of the Warrant held by such reports furnishedholder, to usthe extent that, after giving effect to the attempted exercise set forth in a notice of exercise, such holder, together with such holder’s affiliates and written representations that noany other reports were required, during the year ended December 31, 2020, all Section 16(a) filing requirements applicable to our officers, directors and greater than ten percentperson whose beneficial owners were compliedownership of Common Stock would be aggregated with exceptsuch holder’s for the Form 4 for Baker Bros. Advisors LP forpurposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the applicable regulations of the Securities and Exchange Commission (the “SEC”), including any “group” of which such holder is a member, would beneficially own a number of shares of Common Stock in excess of the Beneficial Ownership Limitation (the “Beneficial Ownership Blocker”). The “Beneficial Ownership Limitation” is 9.99% of the shares of our Common Stock then issued and outstanding, which percentage may be changed at a holder’s election upon 61 days’ notice to us. The address of the foregoing entities and persons is c/o Redmile Group, LLC, One Letterman Drive, Building D, Suite D3-300, The Presidio of San Francisco, San Francisco, CA 94129.
February 2, 2022. The address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.
Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 35 |
Name | Age | Position(s) |
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Jonathan Drachman, | 60 | Chief Executive Officer, President, and | |||||||||||||
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| Priti Patel, M.D | 46 | Chief Medical Officer | ||||||||||||
Carl Walkey, Ph.D. | 37 | Senior Vice President of Corporate Development | |||||||||||||
Donna Cochener | 47 | General Counsel, Senior Vice President Legal |
Robert Ho
Holly Vance, Pharm.D.Medicine.
Carl Walkey, Ph.D. has served as Senior Vice President of Corporate Development since February 2021. Prior to that he served as Vice President of Corporate Development from July 2019 until February 2021. Before coming to Neoleukin Therapeutics, Dr.Mr. Walkey was a Senior Fellow at the University of Washington, Institute for Protein Design from May 2016 until July 2019. Prior to that, he served as Founding Partner at Ansible Marketing from May 2014 until September 2015. DrMr. Walkey received a Bachelor of Engineering in Engineering Physics from Carleton University and a Ph.D. in Bioengineering and Biomedical Engineering from the University of Toronto.
Donna Cochener has served as our General Counsel, Senior Vice President Legal since March 2022. Before joining us, Ms. Cochener was Senior Vice President, Deputy General Counsel of HomeStreet, Inc., a financial services holding company, and its wholly owned subsidiary, HomeStreet Bank, from 2016 to November 2021. Prior to joining HomeStreet, Ms. Cochener was a Partner at Davis Wright Tremaine, LLP, a law firm, in Seattle, Washington. She has served as Chairman of the Board of Cochener Garvey Capital Partners, Inc. and its affiliated subsidiaries since August 2012. Ms. Cochener received a Bachelors of Science in Journalism from Northwestern University and a Juris Doctorate and Masters of Law in International Comparative Law from Duke University.
X | 36 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
•Jonathan Drachman, Chief Executive Officer and President;
•Robert Ho, Former Chief Financial Officer;Officer
Holly Vance, General Counsel
Name and principal position | Year | Salary ($) | Bonus ($) | Equity Awards ($) | (1) | Non-Equity Incentive Plan Compensation ($) | (2) | All Other Compensation ($) | (3) | Total ($) | |||||||||||||||||||||||||||||||
Jonathan Drachman Chief Executive Officer | 2021 | 438,640 | — | 1,998,837 | 208,354 | 4,300 | 2,650,131 | ||||||||||||||||||||||||||||||||||
2020 | 418,750 | — | 3,830,108 | 219,680 | — | 4,468,538 | |||||||||||||||||||||||||||||||||||
Robert Ho (4) Former Chief Financial Officer | 2021 | 396,266 | — | 949,531 | 155,336 | 4,300 | 1,505,433 | ||||||||||||||||||||||||||||||||||
2020 | 280,000 | — | 2,255,062 | 119,210 | — | 2,654,272 | |||||||||||||||||||||||||||||||||||
Priti Patel (5) Chief Medical Officer | 2021 | 294,556 | 100,000 | (6) | 4,897,435 | 115,466 | 2,706 | 5,410,163 | |||||||||||||||||||||||||||||||||
2020 | — | — | — | — | — | — |
Name and principal position | Year | Salary ($) | Equity Awards(1) ($) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($) | Total ($) | ||||||||||||||||
Jonathan Drachman | 2020 | 418,750 | 3,830,108 | 219,680 | — | 4,468,538 | ||||||||||||||||
Chief Executive Officer | 2019 | 137,304 | 3,445,109 | 240,625 | — | 3,823,038 | ||||||||||||||||
Robert Ho(3) Chief Financial Officer | 2020 | 280,000 | 2,255,062 | 119,210 | — | 2,654,271 | ||||||||||||||||
Holly Vance(4) General Counsel | 2020 | 70,182 | 1,986,479 | 30,570 | — | 2,091,819 |
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Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 37 |
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EXECUTIVE COMPENSATION |
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EMPLOYMENT AGREEMENTS
Pursuant to the amended employment agreement, Dr. Drachman’s initial base salary will be $425,000, and he will remainsubject to increases from time to time as determined by the Compensation Committee. Dr. Drachman is also eligible to receive an annual bonus with a target level of 50% of his base salary.
salary as determined by the Compensation Committee.
X | 38 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
EXECUTIVE COMPENSATION |
Holly Vance
We entered into an employment agreement with Ms. Vance effective as of October 19, 2020, setting forth the terms of Ms. Vance’s employment as our General Counsel. Pursuant to her employment agreement, Ms. Vance will receive an annual base salary of $350,000 and is eligible to receive an annual bonus with a target level of 40% of her base salary. Ms. Vance was also granted an option to purchase 220,000 shares of common stock with an exercise price of $12.30 per share. The option vests and becomes exercisable with respect to (i) 1/4th of the total underlying shares on the first anniversary of the grant date and (ii) with respect to 1/48th of the total underlying shares on a monthly basis thereafter such that the option will be fully vested and exercisable on the fourth anniversary of the grant date, each subject to Ms. Vance’s continuous service through each applicable vesting date.
In the event Ms. Vance experiences a termination of her employment without “cause” or she resigns for “good reason” (each as defined in Ms. Vance’s employment agreement), provided that she executes and makes effective a
release of claims against us and our affiliates, Ms. Vance will become entitled to (i) continued base salary for nine months, payable in accordance with our standard payroll practices; and (ii) premium payments for continued healthcare coverage for up to nine months. In the event Ms. Vance experiences a termination without “cause” or she resigns for “good reason” during the 12-month period following a change in control, then in lieu of the foregoing, Ms. Vance would become entitled to (a) continued base salary for 12 months, payable in accordance with our standard payroll practices; (b) 100% of her annual target bonus, payable in a single lump-sum; (c) premium payments for continued healthcare coverage for up to 12 months; and (d)(e) 100% accelerated vesting on her then-outstanding equity awards.
OUTSTANDING EQUITY AWARDS AT DECEMBER
Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 39 |
EXECUTIVE COMPENSATION |
2021
Equity Awards | ||||||||||||||||||||
Name | Vesting Commencement Date | Number of Securities Underlying Unexercised Awards (#) Exercisable | Number of Securities Underlying Unexercised Awards (#) Unexercisable(1)(2) | Exercise Price ($) | Expiration Date | |||||||||||||||
Jonathan Drachman | 8/10/2020 | — | 420,000 | 12.80 | 8/10/2030 | |||||||||||||||
8/31/2019 | 550,000 | 1,100,000 | 2.80 | 8/30/2029 | ||||||||||||||||
Robert Ho | 8/10/2020 | — | 90,000 | 12.00 | 8/3/2030 | |||||||||||||||
3/16/2020 | — | 200,000 | 6.44 | 3/15/2030 | ||||||||||||||||
3/16/2020 | (3) | — | 75,000 | N/A | 3/15/2030 | |||||||||||||||
Holly Vance | 10/19/2020 | — | 220,000 | 12.30 | 10/18/2030 |
Equity Awards | ||||||||||||||||||||||||||||||||
Name | Vesting Commencement Date | Number of Securities Underlying Unexercised Awards (#) Exercisable | Number of Securities Underlying Unexercised Awards (#) Unexercisable (1)(2) | Exercise Price ($) | Expiration Date | |||||||||||||||||||||||||||
Jonathan Drachman | 8/3/2021 | — | 400,000 | 6.80 | 8/2/2031 | |||||||||||||||||||||||||||
8/10/2020 | 140,000 | 280,000 | 12.00 | 8/10/2030 | ||||||||||||||||||||||||||||
8/31/2019 | 962,500 | 687,500 | 2.80 | 8/30/2029 | ||||||||||||||||||||||||||||
Robert Ho (5) | 8/3/2021 | — | 190,000 | 6.80 | 8/2/2031 | |||||||||||||||||||||||||||
8/10/2020 | 30,000 | 60,000 | 12.00 | 8/10/2030 | ||||||||||||||||||||||||||||
3/16/2020 | 87,500 | 112,500 | 6.44 | 3/15/2030 | ||||||||||||||||||||||||||||
3/16/2020 | (3) | — | 50,000 | N/A | N/A | |||||||||||||||||||||||||||
Priti Patel | 8/3/2021 | — | 50,000 | 6.80 | 8/2/2031 | |||||||||||||||||||||||||||
4/30/2021 | — | 475,000 | 12.49 | 4/29/2031 | ||||||||||||||||||||||||||||
4/30/2021 | (4) | — | 20,000 | N/A | N/A |
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X | 40 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
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Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(1)(2) | Total ($) | |||||||||
Martin Babler | 14,753 | 464,637 | 479,390 | |||||||||
M. Cantey Boyd(3) | 49,083 | 233,276 | 282,359 | |||||||||
Erin Lavelle | 30,917 | 509,955 | 540,872 | |||||||||
Sean Nolan(4) | 26,250 | 233,276 | 259,526 | |||||||||
Sarah B. Noonberg | 51,553 | 233,276 | 284,829 | |||||||||
Todd Simpson | 87,917 | 233,276 | 321,193 | |||||||||
Lewis T. “Rusty” Williams | 60,083 | 233,276 | 293,359 |
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Name | In Cash ($) | Option Awards ($)(1)(2) | Total ($) | |||||||||||||||||
Martin Babler | 47,000 | 195,775 | 242,775 | |||||||||||||||||
M. Cantey Boyd (3) | 52,000 | 195,775 | 247,775 | |||||||||||||||||
Erin Lavelle | 53,000 | 195,775 | 248,775 | |||||||||||||||||
Sarah B. Noonberg | 48,000 | 195,775 | 243,775 | |||||||||||||||||
Todd Simpson | 85,000 | 195,775 | 280,775 | |||||||||||||||||
Lewis T. “Rusty” Williams (4) | 63,000 | 195,775 | 258,775 |
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Name | Number of Shares Subject to Outstanding Options as of December 31, | |||||||||
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M. Cantey Boyd (3) | ||||||||||
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Sarah B. Noonberg | 72,000 | |||||||||
Todd Simpson | 116,833 | |||||||||
Lewis T. “Rusty” Williams(4) |
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Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 41 |
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DIRECTOR COMPENSATION |
•$40,000 per year for service as a member of our Board of Directors;
•$25,000 per year for service as our Chairperson;
•$20,000 per year for service as the chair of the Audit Committee and $8,000 per year for service as a member (other than as chair) of the Audit Committee;
•$15,000 per year for service as the chair of the Compensation Committee and $7,000 per year for service as a member (other than as chair) of the Compensation Committee; and
•$8,000 per year for service as the chair of the Nominating and Corporate Governance Committee and $5,000 per year for service as a member (other than as chair) of the Nominating and Corporate Governance Committee.
In addition, each newly appointed Each new non-employee director who joins our Board of Directors will be granted an option to purchase 50,000 shares of our common stock. These options will vest on a three-year, annual vesting schedule. Additionally, on the date of eachEach non-employee director continuing in office following an annual meeting each person who is elected or appointed and each director who continues to serve aswill receive a director immediately after such annual meeting shall be grantedgrant of stock options covering 25,000 shares of our common stock, vesting on a one-year, monthly vesting schedule.
X | 42 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
•the amounts involved exceeded or will exceed $120,000; and
•any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of, or person sharing the household with, the foregoing persons, had or will have a direct or indirect material interest.
Underwritten Public Offering
On July 1, 2020, we entered into an underwriting agreement (the “Underwriting Agreement”) with BofA Securities, Inc. and Piper Sandler & Co. (the “Representatives), as representatives of the several underwriters listed on Schedule A thereto (the “Underwriters”), relating to a public offering (the “Offering”) of an aggregate of 3,262,471 shares of our common stock at a public purchase price of $15.25 per share and pre-funded warrants to purchase an aggregate of 1,737,529 shares of common stock at a purchase price of $15.249999 per share. The Offering closed on July 7, 2020.
Pursuant to the Offering, on July 7, 2020, (a) Baker Brothers Life Sciences, L.P. (“Life Sciences”) and 667, L.P. (“667”) purchased 394,360 and 29,640 shares of our common stock, respectively, for an aggregate purchase price of $6,466,000.00 and pre-funded warrants representing the right to purchase 518,555 and 38,974 shares of our common stock, respectively, for an aggregate purchase price of $8,502,316.71; (b) EcoR1 Capital, LLC purchased 326,247 shares of our common stock for an aggregate purchase price of $4,975,266.75; and (c) entities affiliated with Redmile Group, LLC purchased 131,475 shares of our common stock for an aggregate purchase price of $2,004,993.75 and pre-funded warrants representing the right to purchase 1,180,000 shares of our common stock, for an aggregate purchase price of $17,994,998.85.
INDEMNIFICATION AGREEMENTS
POLICY ON FUTURE RELATED PARTY TRANSACTIONS
Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 43 |
X | 44 | 2022 Proxy Statement | Neoleukin Therapeutics, Inc. |
Neoleukin Therapeutics, Inc. | 2022 Proxy Statement | 45 |
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Amended and Restated Neoleukin Therapeutics, INC.
2014 EQUITY INCENTIVE PLAN
As Amended and Restated: [ ], 2021
1. GENERAL.
(a) Successor to and Continuation of Prior Plan.
(i) The Plan is intended as the successor to and continuation of the Neoleukin Therapeutics, Inc. and Aquinox Pharmaceuticals (Canada), Inc. Joint Canadian Stock Option Plan, as amended March 19, 2013 (the “Prior Plan”). From and after 12:01 a.m. Pacific time on the Effective Date, no additional stock awards will be granted under the Prior Plan. All Awards granted on or after 12:01 a.m. Pacific Time on the Effective Date will be granted under this Plan. All stock awards granted under the Prior Plan will remain subject to the terms of the Prior Plan.
(ii) Any shares that would otherwise remain available for future grants under the Prior Plan as of 12:01 a.m. Pacific Time on the Effective Date (the “Prior Plan’s Available Reserve”) will cease to be available under the Prior Plan at such time. Instead, that number of shares of Common Stock equal to the Prior Plan’s Available Reserve will be added to the Share Reserve (as further described in Section 3(a) below) and will be immediately available for grants and issuance pursuant to Stock Awards under this Plan, up to the maximum number set forth in Section 3(a) below.
(iii) From and after 12:01 a.m. Pacific time on the Effective Date, that number of shares of Common Stock subject to outstanding stock awards granted under the Prior Plan that (A) expire or terminate for any reason prior to exercise or settlement, (B) are forfeited because of the failure to meet a contingency or condition required to vest such shares or repurchased at the original issuance price, or (C) are otherwise reacquired or are withheld (or not issued) to satisfy a tax withholding obligation in connection with an award (the “Returning Shares”) will immediately be added to the Share Reserve (as further described in Section 3(a) below) as and when such shares become Returning Shares (up to the maximum number set forth in Section 3(a)), and become available for issuance pursuant to Stock Awards granted hereunder.
(b) Eligible Award Recipients. Employees, Directors and Consultants are eligible to receive Awards.
(c) Available Awards. The Plan provides for the grant of the following Awards: (i) Incentive Stock Options; (ii) Nonstatutory Stock Options; (iii) Stock Appreciation Rights; (iv) Restricted Stock Awards; (v) Restricted Stock Unit Awards; (vi) Performance Stock Awards; (vii) Performance Cash Awards; and (viii) Other Stock Awards.
(d) Purpose. This Plan, through the granting of Awards, is intended to help the Company and any Affiliate secure and retain the services of eligible award recipients, provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate, and provide a means by which the eligible recipients may benefit from increases in value of the Common Stock.
2. ADMINISTRATION.
(a) Administration by Board. The Board will administer the Plan. The Board may delegate administration of the Plan to a Committee or Committees, as provided in Section 2(c).
(b) Powers of Board. The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:
(i) To determine: (A) who will be granted Awards; (B) when and how each Award will be granted; (C) what type of Award will be granted; (D) the provisions of each Award (which need not be identical), including when a person will be permitted to exercise or otherwise receive cash or Common Stock under the Award; (E) the number of shares of Common Stock subject to, or the cash value of, an Award; and (F) the Fair Market Value applicable to a Stock Award.
(ii) To construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for administration of the Plan and Awards. The Board, in the exercise of these powers, may correct any defect, omission or inconsistency in the Plan or in any Award Agreement or in the written terms of a Performance Cash Award, in a manner and to the extent it will deem necessary or expedient to make the Plan or Award fully effective.
(iii) To settle all controversies regarding the Plan and Awards granted under it.
(iv) To accelerate, in whole or in part, the time at which an Award may be exercised or vest (or the time at which cash or shares of Common Stock may be issued in settlement thereof).
(v) To suspend or terminate the Plan at any time. Except as otherwise provided in the Plan or an Award Agreement, suspension or termination of the Plan will not materially impair a Participant’s rights under the Participant’s then-outstanding Award without such Participant’s written consent except as provided in subsection (viii) below.
(vi) To amend the Plan in any respect the Board deems necessary or advisable, including, without limitation, by adopting amendments relating to Incentive Stock Options and certain nonqualified deferred compensation under Section 409A of the Code and/or bringing the Plan or Awards granted under the Plan into compliance with the requirements for Incentive Stock Options or nonqualified deferred compensation under Section 409A of the Code, subject to the limitations, if any, of applicable law. If required by applicable law or listing requirements, and except as provided in Section 9(a) relating to Capitalization Adjustments, the Company will seek stockholder approval of any amendment of the Plan that (A) materially increases the number of shares of Common Stock available for issuance under the Plan, (B) materially expands the class of individuals eligible to receive Awards under the Plan, (C) materially increases the benefits accruing to Participants under the Plan, (D) materially reduces the price at which shares of Common Stock may be issued or purchased under the Plan, (E) materially extends the term of the Plan, or (F) materially expands the types of Awards available for issuance under the Plan. Except as otherwise provided in the Plan (including subsection (viii) below) or an Award Agreement, no amendment of the Plan will materially impair a Participant’s rights under an outstanding Award without the Participant’s written consent.
(vii) To submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of (A) Section 422 of the Code regarding “incentive stock options” or (B) Rule 16b-3.
(viii) To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion. A Participant’s rights under any Award will not be impaired by any such amendment unless the Company requests the consent of the affected Participant, and the Participant consents in writing. However, a Participant’s rights will not be deemed to have been impaired by any such amendment if the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participant’s rights. In addition, subject to the limitations of applicable law, if any, the Board may amend the terms of any one or more Awards without the affected Participant’s consent (A) to maintain the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code, (B) to change the terms of an Incentive Stock Option, if such change results in impairment of the Award solely because it impairs the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code, (C) to clarify the manner of exemption from, or to bring the Award into compliance with, Section 409A of the Code; or (D) to comply with other applicable laws or listing requirements.
(ix) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan and/or Award Agreements.
(x) To adopt such procedures and sub-plans as are necessary or appropriate (A) to permit or facilitate participation in the Plan by Employees, Directors or Consultants who are foreign nationals or employed outside the United States or (B) allow Awards to qualify for special tax treatment in a foreign jurisdiction; provided that Board approval will not be necessary for immaterial modifications to the Plan or any Award Agreement that are required for compliance with the laws of the relevant foreign jurisdiction.
(xi) To effect, with the consent of any adversely affected Participant, (A) the reduction of the exercise, purchase or strike price of any outstanding Stock Award; (B) the cancellation of any outstanding Stock Award and the grant in substitution therefor of a new (1) Option or SAR, (2) Restricted Stock Award, (3) Restricted Stock Unit Award, (4) Other Stock Award, (5) cash award and/or (6) award of other valuable consideration determined by the Board, in its sole discretion, with any such substituted award (x) covering the same or a different number of shares of Common Stock as the cancelled Stock Award and (y) granted under the Plan or another equity or compensatory plan of the Company; or (C) any other action that is treated as a repricing under generally accepted accounting principles.
(c) Delegation to Committee.
(i) General. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee, as applicable). Any delegation of administrative powers will be reflected in resolutions, not inconsistent with the provisions of the Plan, adopted from time to time by the Board or Committee (as applicable). The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated.
(ii) Rule 16b-3 Compliance. The Committee shall consist solely of two or more Non-Employee Directors, in accordance with Rule 16b-3, unless otherwise determined by the Board.
(d) Delegation to an Officer. The Board may delegate to one (1) or more Officers the authority to do one or both of the following (i) designate Employees who are not Officers to be recipients of Options and SARs (and, to the extent permitted by applicable law, other Stock Awards) and, to the extent permitted by applicable law, the terms of such Awards, and (ii) determine the number of shares of Common Stock to be subject to such Stock Awards granted to such Employees; provided, however, that the Board resolutions regarding such delegation will specify the total number of shares of Common Stock that may be subject to the Stock Awards granted by such Officer and that such Officer may not grant a Stock Award to himself or herself. Any such Stock Awards will be granted on the form of Stock Award Agreement most recently approved for use by the Committee or the Board, unless otherwise provided in the resolutions approving the delegation authority. The Board may not delegate authority to an Officer who is acting solely in the capacity of an Officer (and not also as a Director) to determine the Fair Market Value pursuant to Section 13(y)(iii) below.
(e) Effect of Board’s Decision. All determinations, interpretations and constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.
3. SHARES SUBJECTTOTHE PLAN.
(a) Share Reserve.
(i) Subject to Section 9(a) relating to Capitalization Adjustments and the “evergreen” provision in Section 3(a)(ii), the aggregate number of shares of Common Stock that may be issued pursuant to Stock Awards will not exceed 12,467,914 shares (the “Share Reserve”) plus the Returning Shares, if any, as such shares become available for grant under this Plan from time to time.
(ii) The Share Reserve will automatically increase on January 1st of each year through and including January 1, 2030, commencing on January 1, 2022, in an amount equal to 4% of the sum of (A) the total number of shares of Capital Stock and (B) the total number of shares of Common Stock subject to Pre-Funded Warrants, in each case outstanding on December 31st of the preceding calendar year. The Board may act prior to January 1st of a given year to provide that there will be no January 1st increase in the Share Reserve for such year or that the increase in the Share Reserve for such year will be a smaller number of shares of Common Stock than would otherwise occur pursuant to the preceding sentence.
(iii) For clarity, the Share Reserve is a limitation on the number of shares of Common Stock that may be issued under the Plan. As a single share may be subject to grant more than once (e.g., if a share subject to a Stock Award is forfeited, it may be made subject to grant again as provided in Section 3(b) below), the Share Reserve is not a limit on the number of Stock Awards that can be granted.
(iv) Shares may be issued in connection with a merger or acquisition as permitted by NASDAQ Listing Rule 5635(c) or, if applicable, NYSE Listed Company Manual Section 303A.08, AMEX Company Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares available for issuance under the Plan.
(b) Reversion of Shares to the Share Reserve. If a Stock Award or any portion of a Stock Award (i) expires or otherwise terminates without all of the shares covered by such Stock Award having been issued or (ii) is settled in cash (i.e., the Participant receives cash rather than stock), such expiration, termination or settlement will not reduce (or otherwise offset) the number of shares of Common Stock that are available for issuance under the Plan. If any shares of Common Stock issued under a Stock Award are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required to vest such shares in the Participant, then the shares that are forfeited or repurchased will revert to and again become available for issuance under the Plan. Any shares reacquired by the Company in satisfaction of tax withholding obligations on a Stock Award or as consideration for the exercise or purchase price of a Stock Award will again become available for issuance under the Plan.
(c) Incentive Stock Option Limit. Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued on the exercise of Incentive Stock Options will be 24,935,828.
(d) Annual Limitations. Subject to the provisions of Section 9(a) relating to Capitalization Adjustments, the following limitations will apply.
(i) A maximum of 5,445,000 shares of Common Stock subject to Options, SARs and Other Stock Awards whose value is determined by reference to an increase over an exercise or strike price of at least one hundred percent (100%) of the Fair Market Value on the date the Stock Award is granted may be granted to any single Participant during any single calendar year.
(ii) A maximum of 5,445,000 shares of Common Stock subject to Performance Stock Awards may be granted to any one Participant during any one calendar year (whether the grant, vesting or exercise is contingent upon the attainment during the Performance Period of the Performance Goals).
(iii) A maximum of $2,500,000 may be granted as a Performance Cash Award to any one Participant during any one calendar year.
If a Performance Stock Award is in the form of an Option, it will count only against the Performance Stock Award limit. If a Performance Stock Award could (but is not required to) be paid out in cash, it will count only against the Performance Stock Award limit.
(e) Limitation on Awards Granted to Non-Employee Directors. No Non-Employee Directors may receive awards under the Plan that, when combined with cash compensation received for service as a Non-Employee Director, exceeds $750,000.00 in value (as described below) in any calendar year, increased to $1,000,000.00 in value (as described below) in the calendar year of his or her initial services as a Non-Employee Director. Grant date fair value for purposes of Awards to Non-Employee Directors under the Plan will be determined as follows: (i) for Options and SARs, grant date fair value will be calculated using the Black-Scholes valuation methodology on the date of grant of such Option or SAR and (ii) for all other Awards other than Options and SARs, grant date fair value will be determined by either (1) calculating the product of the Fair Market Value per share on the date of grant and the aggregate number of shares subject to the Award or (2) calculating the product
using an average of the Fair Market Value over a number of trading days as determined by the Board or Committee and the aggregate number of shares subject to the Award. Awards granted to an individual while he or she was serving in the capacity as an Employee or while he or she was a Consultant but not a Non-Employee Director will not count for purposes of the limitations set forth in this Section 3(e).
(f) Source of Shares. The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise.
4. ELIGIBILITY.
(a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code). Stock Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants; provided, however, that Stock Awards may not be granted to Employees, Directors and Consultants who are providing Continuous Service only to any “parent” of the Company, as such term is defined in Rule 405 of the Securities Act (US), unless (i) the stock underlying such Stock Awards is treated as “service recipient stock” under Section 409A of the Code (for example, because the Stock Awards are granted pursuant to a corporate transaction such as a spin off transaction), (ii) the Company, in consultation with its legal counsel, has determined that such Stock Awards are otherwise exempt from Section 409A of the Code, or (iii) the Company, in consultation with its legal counsel, has determined that such Stock Awards comply with the distribution requirements of Section 409A of the Code.
(b) Ten Percent Stockholders. A Ten Percent Stockholder will not be granted an Incentive Stock Option unless the exercise price of such Option is at least 110% of the Fair Market Value on the date of grant and the Option is not exercisable after the expiration of five years from the date of grant.
5. PROVISIONS RELATINGTO OPTIONSAND STOCK APPRECIATION RIGHTS.
Each Option or SAR will be in such form and will contain such terms and conditions as the Board deems appropriate. All Options will be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option. If an Option is not specifically designated as an Incentive Stock Option, or if an Option is designated as an Incentive Stock Option but some portion or all of the Option fails to qualify as an Incentive Stock Option under the applicable rules, then the Option (or portion thereof) will be a Nonstatutory Stock Option. The provisions of separate Options or SARs need not be identical; provided, however, that each Award Agreement will conform to (through incorporation of provisions hereof by reference in the applicable Award Agreement or otherwise) the substance of each of the following provisions:
(a) Term. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, no Option or SAR will be exercisable after the expiration of ten years from the date of its grant or such shorter period specified in the Award Agreement.
(b) Exercise Price. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, the exercise or strike price of each Option or SAR will be not less than 100% of the Fair Market Value of the Common Stock subject to the Option or SAR on the date the Award is granted. Notwithstanding the foregoing, an Option or SAR may be granted with an exercise or strike price lower than 100% of the Fair Market Value of the Common Stock subject to the Award if such Award is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent with the provisions of Section 409A of the Code and, if applicable, Section 424(a) of the Code. Each SAR will be denominated in shares of Common Stock equivalents.
(c) Purchase Price for Options. The purchase price of Common Stock acquired pursuant to the exercise of an Option may be paid, to the extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below. The Board will have the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to use a particular method of payment. The permitted methods of payment are as follows:
(i) by cash, check, bank draft or money order payable to the Company;
(ii) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds;
(iii) by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock;
(iv) if an Option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however, that the Company will accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued. Shares of Common Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent that (A) shares issuable upon exercise are used to pay the exercise price pursuant to the “net exercise,” (B) shares are delivered to the Participant as a result of such exercise, and (C) shares are withheld to satisfy tax withholding obligations; or
(v) in any other form of legal consideration that may be acceptable to the Board, permissible under applicable law, the rules of any applicable stock exchange and specified in the applicable Award Agreement.
(d) Exercise and Payment of a SAR. To exercise any outstanding SAR, the Participant must provide written notice of exercise to the Company in compliance with the provisions of the Stock Appreciation Right Agreement evidencing such SAR. The appreciation distribution payable on the exercise of a SAR will be not greater than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the SAR) of a number of shares of Common Stock equal to the number of Common Stock equivalents in which the Participant is vested under such SAR (with respect to which the Participant is exercising the SAR on such date), over (B) the aggregate strike price of the number of Common Stock equivalents with respect to which the Participant is exercising the SAR on such date. The appreciation distribution may be paid in Common Stock, in cash, in any combination of the two or in any other form of consideration, as determined by the Board and contained in the Award Agreement evidencing such SAR.
(e) Transferability of Options and SARs. The Board may, in its sole discretion, impose such limitations on the transferability of Options and SARs as the Board will determine. In the absence of such a determination by the Board to the contrary, the following restrictions on the transferability of Options and SARs will apply:
(i) Restrictions on Transfer. An Option or SAR will not be transferable except by will or by the laws of descent and distribution (or pursuant to subsections (ii) and (iii) below), and will be exercisable during the lifetime of the Participant only by the Participant. The Board may permit transfer of the Option or SAR in a manner that is not prohibited by applicable tax and securities laws. Except as explicitly provided herein, neither an Option nor a SAR may be transferred for consideration.
(ii) Domestic Relations Orders. Subject to the approval of the Board or a duly authorized Officer, an Option or SAR may be transferred pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by U.S. Treasury Regulation 1.421-1(b)(2). If an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.
(iii) Beneficiary Designation. Subject to the approval of the Board or a duly authorized Officer, a Participant may, by delivering written notice to the Company, in a form approved by the Company (or the designated broker), designate a third party who, on the death of the Participant, will thereafter be entitled to exercise
the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation, upon the death of the Participant, the executor or administrator of the Participant’s estate will be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. However, the Company may prohibit designation of a beneficiary at any time, including due to any conclusion by the Company that such designation would be inconsistent with the provisions of applicable laws.
(f) Vesting Generally. The total number of shares of Common Stock subject to an Option or SAR may vest and become exercisable in periodic installments that may or may not be equal. The Option or SAR may be subject to such other terms and conditions on the time or times when it may or may not be exercised (which may be based on the satisfaction of Performance Goals or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options or SARs may vary. The provisions of this Section 5(f) are subject to any Option or SAR provisions governing the minimum number of shares of Common Stock as to which an Option or SAR may be exercised.
(g) Termination of Continuous Service. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates (other than for Cause and other than upon the Participant’s death or Disability), the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Award as of the date of termination of Continuous Service) within the period of time ending on the earlier of (i) the date three months following the termination of the Participant’s Continuous Service (or such longer or shorter period specified in the applicable Award Agreement), and (ii) the expiration of the term of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR (as applicable) within the applicable time frame, the Option or SAR will terminate.
(h) Extension of Termination Date. If the exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause and other than upon the Participant’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act (US), then the Option or SAR will terminate on the earlier of (i) the expiration of a total period of time (that need not be consecutive) equal to the applicable post termination exercise period after the termination of the Participant’s Continuous Service during which the exercise of the Option or SAR would not be in violation of such registration requirements, and (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement. In addition, unless otherwise provided in a Participant’s Award Agreement, if the sale of any Common Stock received on exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause) would violate the Company’s insider trading policy, then the Option or SAR will terminate on the earlier of (i) the expiration of a period of months (that need not be consecutive) equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service during which the sale of the Common Stock received upon exercise of the Option or SAR would not be in violation of the Company’s insider trading policy, or (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement.
(i) Disability of Participant. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Option or SAR as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date 12 months following such termination of Continuous Service (or such longer or shorter period specified in the Award Agreement) and (ii) the expiration of the term of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the applicable time frame, the Option or SAR (as applicable) will terminate.
(j) Death of Participant. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, if (i) a Participant’s Continuous Service terminates as a result of the Participant’s death, or (ii) the Participant dies within the period (if any) specified in the Award Agreement for exercisability after the termination of the Participant’s Continuous Service for a reason other than death, then the Option or SAR may be exercised (to the extent the Participant was entitled to exercise such Option or SAR as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option or SAR by
bequest or inheritance or by a person designated to exercise the Option or SAR upon the Participant’s death, but only within the period ending on the earlier of (i) the date 12 months following the date of death (or such longer or shorter period specified in the Award Agreement) and (ii) the expiration of the term of such Option or SAR as set forth in the Award Agreement. If, after the Participant’s death, the Option or SAR is not exercised within the applicable time frame, the Option or SAR (as applicable) will terminate.
(k) Termination for Cause. Except as explicitly provided otherwise in a Participant’s Award Agreement or other individual written agreement between the Company or any Affiliate and the Participant, if a Participant’s Continuous Service is terminated for Cause, the Option or SAR will terminate immediately upon such Participant’s termination of Continuous Service, and the Participant will be prohibited from exercising his or her Option or SAR from and after the date of such termination of Continuous Service.
(l) Non-Exempt Employees. If an Option or SAR is granted to an Employee who is a non-exempt employee for purposes of the U.S. Fair Labor Standards Act of 1938, as amended, the Option or SAR will not be first exercisable for any shares of Common Stock until at least six (6) months following the date of grant of the Option or SAR (although the Award may vest prior to such date). Consistent with the provisions of the U.S. Worker Economic Opportunity Act, (i) if such non-exempt Employee dies or suffers a Disability, (ii) upon a Corporate Transaction in which such Option or SAR is not assumed, continued, or substituted, (iii) upon a Change in Control, or (iv) upon the Participant’s retirement (as such term may be defined in the Participant’s Award Agreement in another agreement between the Participant and the Company, or, if no such definition, in accordance with the Company’s then current employment policies and guidelines), the vested portion of any Options and SARs may be exercised earlier than six months following the date of grant. The foregoing provision is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay. To the extent permitted and/or required for compliance with the U.S. Worker Economic Opportunity Act to ensure that any income derived by a non-exempt employee in connection with the exercise, vesting or issuance of any shares under any other Stock Award will be exempt from the employee’s regular rate of pay, the provisions of this Section 5(l) will apply to all Stock Awards and are hereby incorporated by reference into such Stock Award Agreements.
6. PROVISIONSOF STOCK AWARDSOTHERTHAN OPTIONSAND SARS.
(a) Restricted Stock Awards. Each Restricted Stock Award Agreement will be in such form and will contain such terms and conditions as the Board deems appropriate. To the extent consistent with the Company’s bylaws, at the Board’s election, shares of Common Stock may be (x) held in book entry form subject to the Company’s instructions until any restrictions relating to the Restricted Stock Award lapse, or (y) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Board. The terms and conditions of Restricted Stock Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Award Agreements need not be identical. Each Restricted Stock Award Agreement will conform to (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:
(i) Consideration. A Restricted Stock Award may be awarded in consideration for (A) cash, check, bank draft or money order payable to the Company, (B) past services to the Company or an Affiliate, or (C) any other form of legal consideration (including future services) that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.
(ii) Vesting. Shares of Common Stock awarded under the Restricted Stock Award Agreement may be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the Board.
(iii) Termination of Participant’s Continuous Service. If a Participant’s Continuous Service terminates, the Company may receive through a forfeiture condition or a repurchase right any or all of the shares of Common Stock held by the Participant that have not vested as of the date of termination of Continuous Service under the terms of the Restricted Stock Award Agreement.
(iv) Transferability. Rights to acquire shares of Common Stock under the Restricted Stock Award Agreement will be transferable by the Participant only upon such terms and conditions as are set forth in the Restricted Stock Award Agreement, as the Board will determine in its sole discretion, so long as Common Stock awarded under the Restricted Stock Award Agreement remains subject to the terms of the Restricted Stock Award Agreement.
(v) Dividends. A Restricted Stock Award Agreement may provide that any dividends paid on Restricted Stock will be subject to the same vesting and forfeiture restrictions as apply to the shares subject to the Restricted Stock Award to which they relate.
(b) Restricted Stock Unit Awards. Each Restricted Stock Unit Award Agreement will be in such form and will contain such terms and conditions as the Board deems appropriate. The terms and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical. Each Restricted Stock Unit Award Agreement will conform to (through incorporation of the provisions hereof by reference in the Agreement or otherwise) the substance of each of the following provisions:
(i) Consideration. At the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board, in its sole discretion, and permissible under applicable law and the rules of any applicable stock exchange.
(ii) Vesting. At the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.
(iii) Payment. A Restricted Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit Award Agreement.
(iv) Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award.
(v) Dividend Equivalents. Dividend equivalents may be credited in respect of shares of Common Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such dividend equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock Unit Award in such manner as determined by the Board. Any additional shares covered by the Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all of the same terms and conditions of the underlying Restricted Stock Unit Award Agreement to which they relate.
(vi) Termination of Participant’s Continuous Service. Except as otherwise provided in the applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award that has not vested will be forfeited upon the Participant’s termination of Continuous Service.
(c) Performance Awards.
(i) Performance Stock Awards. A Performance Stock Award is a Stock Award (covering a number of shares not in excess of that set forth in Section 3(d) above) that is payable (including that may be granted, may vest or may be exercised) contingent upon the attainment during a Performance Period of certain Performance Goals. A Performance Stock Award may, but need not, require the Participant’s completion of a specified period of Continuous Service. The length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained will be conclusively determined by the Committee or the Board, in its sole discretion. In addition, to the extent permitted by applicable law and the applicable Award Agreement, the Board may determine that cash may be used in payment of Performance Stock Awards.
(ii) Performance Cash Awards. A Performance Cash Award is a cash award (for a dollar value not in excess of that set forth in Section 3(d)(iii) above) that is payable contingent upon the attainment during a Performance Period of certain Performance Goals. A Performance Cash Award may also require the completion of a specified period of Continuous Service. At the time of grant of a Performance Cash Award, the length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained will be conclusively determined by the Committee or the Board, in its sole discretion. The Board may specify the form of payment of Performance Cash Awards, which may be cash or other property, or may provide for a Participant to have the option for his or her Performance Cash Award, or such portion thereof as the Board may specify, to be paid in whole or in part in cash or other property.
(iii) Board Discretion. The Board retains the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects to use for a Performance Period. Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement as specified in the Stock Award Agreement or the written terms of a Performance Cash Award.
(iv) Determination of Performance Goals. Unless otherwise determined by the Board, the Committee will establish the Performance Goals applicable to, and the formula for calculating the amount payable under, the Award no later than the earlier of (A) the date 90 days after the commencement of the applicable Performance Period, and (B) the date on which 25% of the Performance Period has elapsed, and in any event at a time when the achievement of the applicable Performance Goals remains substantially uncertain. Prior to the payment of any compensation under an Award subject to Performance Goals, the Committee will certify in writing the extent to which any Performance Goals and any other material terms under such Award have been satisfied (other than in cases where such Performance Goals relate solely to the increase in the value of the Common Stock). Notwithstanding satisfaction of, or completion of any Performance Goals, the number of shares of Common Stock, Options, cash or other benefits granted, issued, retainable and/or vested under an Award on account of satisfaction of such Performance Goals may be reduced by the Committee on the basis of such further considerations as the Committee, in its sole discretion, will determine.
(d) Other Stock Awards. Other forms of Stock Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options or stock rights with an exercise price or strike price less than 100% of the Fair Market Value of the Common Stock at the time of grant) may be granted either alone or in addition to Stock Awards provided for under Section 5 and the preceding provisions of this Section 6. Subject to the provisions of the Plan, the Board will have sole and complete authority to determine the persons to whom and the time or times at which such Other Stock Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Stock Awards and all other terms and conditions of such Other Stock Awards.
7. COVENANTSOFTHE COMPANY.
(a) Availability of Shares. The Company will keep available at all times the number of shares of Common Stock reasonably required to satisfy then-outstanding Stock Awards.
(b) Securities Law Compliance. The Company will seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that this undertaking will not require the Company to register under the Securities Act (US) the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained. A Participant will not be eligible for the grant of an Award or the subsequent issuance of cash or Common Stock pursuant to the Award if such grant or issuance would be in violation of any applicable securities law.
(c) No Obligation to Notify or Minimize Taxes. The Company will have no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Stock Award. Furthermore, the Company will have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of an Award to the holder of such Award.
8. MISCELLANEOUS.
(a) Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common Stock pursuant to Stock Awards will constitute general funds of the Company.
(b) Corporate Action Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award Agreement or related grant documents as a result of a clerical error in the papering of the Award Agreement or related grant documents, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement or related grant documents.
(c) Stockholder Rights. No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to a Stock Award unless and until (i) such Participant has satisfied all requirements for exercise of, or the issuance of shares of Common Stock under, the Stock Award pursuant to its terms, and (ii) the issuance of the Common Stock subject to such Stock Award has been entered into the books and records of the Company.
(d) No Employment or Other Service Rights. Nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or will affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.
(e) Change in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or her services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a change in status from a full-time Employee to a part-time Employee or takes an extended leave of absence) after the date of grant of any Award to the Participant, the Board has the right in its sole discretion to (x) make a corresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment, and (y) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced or extended.
(f) Incentive Stock Option Limitations. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and any Affiliates) exceeds $100,000 (or such other limit established in the Code) or otherwise does not comply with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise do not comply with such rules will be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s).
(g) Investment Assurances. The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that such Participant is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award, and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, will be inoperative if (A) the issuance of the shares upon the exercise or acquisition of Common Stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act (US), or (B) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock.
(h) Withholding Obligations. Unless prohibited by the terms of an Award Agreement, the Company may, in its sole discretion, satisfy any U.S. federal, state, local, foreign or other tax withholding obligation relating to an Award by any of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Award; provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law (or such other amount as may be necessary to avoid classification of the Stock Award as a liability for financial accounting purposes); (iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant, including proceeds from the sale of shares of Common Stock issued pursuant to a Stock Award; or (v) by such other method as may be set forth in the Award Agreement.
(i) Electronic Delivery. Any reference herein to a “written” agreement or document will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto), or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access).
(j) Deferrals. To the extent permitted by applicable law and the rules of any applicable stock exchange, the Board, in its sole discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may establish programs and procedures for deferral elections to be made by Participants. Deferrals by Participants will be made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the Board may provide for distributions while a Participant is still an employee or otherwise providing services to the Company. The Board is authorized to make deferrals of Awards and determine when, and in what annual percentages, Participants may receive payments, including lump sum payments, following the Participant’s termination of Continuous Service, and implement such other terms and conditions consistent with the provisions of the Plan and in accordance with applicable law.
(k) Compliance with Section 409A of the Code. Unless otherwise expressly provided for in an Award Agreement, the Plan and Award Agreements will be interpreted to the greatest extent possible in a manner that makes the Plan and the Awards granted hereunder exempt from Section 409A of the Code, and, to the extent not so exempt, in compliance with Section 409A of the Code. If the Board determines that any Award granted hereunder is not exempt from and is therefore subject to Section 409A of the Code, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent an Award Agreement is silent on terms necessary for compliance, such terms are hereby incorporated by reference into the Award Agreement. Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding an Award that constitutes “deferred compensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A of the Code, no distribution or payment of any amount that is due because of a “separation from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) will be issued or paid before the date that is six (6) months
following the date of such Participant’s “separation from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies with Section 409A of the Code, and any amounts so deferred will be paid in a lump sum on the day after such six (6) month period elapses, with the balance paid thereafter on the original schedule.
(l) Clawback/Recovery. All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including but not limited to a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of an event constituting Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) under any agreement with the Company.
9. ADJUSTMENTSUPON CHANGESIN COMMON STOCK; OTHER CORPORATE EVENTS.
(a) Capitalization Adjustments. In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3(c), (iii) the class(es) and maximum number of securities that may be awarded to any person pursuant to Sections 3(d), and (iv) the class(es) and number of securities and price per share of stock subject to outstanding Stock Awards. The Board will make such adjustments, and its determination will be final, binding and conclusive.
(b) Dissolution or Liquidation. Except as otherwise provided in the Stock Award Agreement, in the event of a dissolution or liquidation of the Company, all outstanding Stock Awards (other than Stock Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Company’s right of repurchase) will terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common Stock subject to the Company’s repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that the holder of such Stock Award is providing Continuous Service; provided, however, that the Board may, in its sole discretion, cause some or all Stock Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such Stock Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion.
(c) Corporate Transaction. The following provisions will apply to Stock Awards in the event of a Corporate Transaction unless otherwise provided in the instrument evidencing the Stock Award or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by the Board at the time of grant of a Stock Award. In the event of a Corporate Transaction, then, notwithstanding any other provision of the Plan, the Board will take one or more of the following actions with respect to Stock Awards, contingent upon the closing or completion of the Corporate Transaction:
(i) arrange for the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) to assume or continue the Stock Award or to substitute a similar stock award for the Stock Award (including, but not limited to, an award to acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction);
(ii) arrange for the assignment of any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to the Stock Award to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company);
(iii) accelerate the vesting, in whole or in part, of the Stock Award (and, if applicable, the time at which the Stock Award may be exercised) to a date prior to the effective time of such Corporate Transaction as the Board determines (or, if the Board does not determine such a date, to the date that is five (5) days prior to the effective date of the Corporate Transaction), with such Stock Award terminating if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction;
(iv) arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by the Company with respect to the Stock Award;
(v) cancel or arrange for the cancellation of the Stock Award, to the extent not vested or not exercised prior to the effective time of the Corporate Transaction, in exchange for such cash consideration, if any, as the Board, in its sole discretion, may consider appropriate; and
(vi) make a payment, in such form as may be determined by the Board equal to the excess, if any, of (A) the value of the property the Participant would have received upon the exercise of the Stock Award immediately prior to the effective time of the Corporate Transaction, over (B) any exercise price payable by such holder in connection with such exercise.
The Board need not take the same action or actions with respect to all Stock Awards or portions thereof or with respect to all Participants.
(d) Change in Control. A Stock Award may be subject to additional acceleration of vesting and exercisability upon or after a Change in Control as may be provided in the Stock Award Agreement for such Stock Award or as may be provided in any other written agreement between the Company or any Affiliate and the Participant, but in the absence of such provision, no such acceleration will occur.
10. PLAN TERM; EARLIER TERMINATIONOR SUSPENSIONOFTHE PLAN.
The Board may suspend or terminate the Plan at any time. The Plan will expire on the ninth anniversary of the earlier of (i) the Amendment Date or (ii) the date the amended and restated Plan is approved by the Board. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.
11. EXISTENCEOFTHE PLAN; TIMINGOF FIRST GRANTOR EXERCISE.
The Plan came into existence on the Adoption Date and was amended and restated as of the Amendment Date.
12. CHOICEOF LAW.
The law of the State of Delaware will govern all questions concerning the construction, validity and interpretation of this Plan, without regard to that state’s conflict of laws rules.
13. DEFINITIONS. As used in the Plan, the following definitions will apply to the capitalized terms indicated below:
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The determination that a termination of the Participant’s Continuous Service is either for Cause or without Cause will be made by the Company, in its sole and exclusive judgment and discretion. Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards held by such Participant will have no effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose.
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(i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control will not be deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities or (C) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control will be deemed to occur;
(ii) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than 50% of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than 50% of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;
(iii) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or
(iv) individuals who, on the Adoption Date, are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member will, for purposes of this Plan, be considered as a member of the Incumbent Board.
Notwithstanding the foregoing definition or any other provision of this Plan, (A) the term Change in Control will not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, and (B) the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant will supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition will apply.
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(i) a sale or other disposition of all or substantially all, as determined by the Board, in its sole discretion, of the consolidated assets of the Company and its Subsidiaries;
(ii) a sale or other disposition of at least 90% of the outstanding securities of the Company;
(iii) a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or
(iv) a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.
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(i) If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share of Common Stock will be the closing sales price for such stock as quoted on such exchange or market (or the exchange or market where the greatest volume of trading and value in the Common Stock occurs) on the date of determination, as reported in a source the Board deems reliable.
(ii) Unless otherwise provided by the Board, if there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing selling price on the last preceding date for which such quotation exists.
(iii) In the absence of such markets for the Common Stock, the Fair Market Value will be determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
X | 46 | 2022 Proxy Statement |
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The 2020Annual Report, Notice & Proxy Statement is/ are available at www.proxyvote.com NEOLEUKIN THERAPEUTICS, INC. Proxy for Annual Meeting of Stockholders on May 12, 2022 Solicited on Behalf of the Board of Directors The undersigned stockholder(s) hereby revoke(s) all previous proxies, acknowledge(s) receipt of the Notice of the 2022 Annual Meeting of Stockholders of Neoleukin Therapeutics, Inc., the accompanying proxy statement and the 2021 Annual Report, and Proxy Statement forhereby appoint(s) Jonathan Drachman and Sean Smith, or either of them, as proxies of the 2021undersigned, each with the power to appoint his substitute, and hereby authorize(s) them, or either of them, to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of Neoleukin Therapeutics, Inc. that the undersigned stockholder(s) is/are entitled to vote at the 2022 Annual Meeting are availableof Stockholders of Neoleukin Therapeutics, Inc. to be held at www.proxyvote.com.1:30 p.m. local time on May 12, 2022, and any adjournment or postponement thereof. The shares represented by this proxy, when properly executed, will be voted in the manner directed by the stockholder(s), with discretionary authority as to any and all other matters that may properly come before the meeting. If no such direction is made, the proxyholders will have the authority to vote FOR both of the nominees listed in Proposal No. 1, and FOR Proposal Nos. 2 and 3. Continued and to be signed on reverse side
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