| • | | reviews our consolidated financial statements and discusses with management and the independent registered public accounting firm our annual audited and quarterly reviewed consolidated financial statements; helps to ensure the independence and performance of the independent registered public accounting firm;
approves audit and non-audit services and fees;
reviews consolidated financial statements and discusses with management and the independent registered public accounting firm our annual audited and quarterly consolidated
| financial statements, the results of the independent audit and the quarterly reviews and the reports and certifications regarding internal controls over financial reporting and disclosure controls; |
prepares the audit committee report that the SEC requires to be included in our annual proxy statement;
| | | | | • | | prepares the audit committee report that the SEC requires to be included in our annual proxy statement; |
reviews reports and communications from the independent registered public accounting firm;
| | | | | • | | reviews reports and communications from the independent registered public accounting firm; |
reviews the adequacy and effectiveness of our internal controls and disclosure controls and procedure;
| | | | | • | | reviews the adequacy and effectiveness of our internal controls and disclosure controls and procedure; |
reviews our policies on risk assessment and risk management;
| | | | | • | | reviews our policies on risk assessment and risk management; |
reviewing and monitoring conflicts of interest situations, and approving or prohibiting any involvement in matters that may involve a conflict of interest or taking of a corporate opportunity;
| | | | | • | | reviews and monitors conflicts of interest situations, and approves or prohibits any involvement in matters that may involve a conflict of interest or taking of a corporate opportunity; |
reviews related party transactions; and
| | | | | • | | reviews related party transactions; and |
| | | | | • | | establishes and oversees procedures for the receipt, retention and treatment of accounting related complaints and the confidential submission by our employees of concerns regarding questionable accounting or auditing matters. |
establishes and oversees procedures for the receipt, retention and treatment of accounting related complaints and the confidential submission by our employees of concerns regarding questionable accounting or auditing matters.
Our audit committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of Nasdaq. A copy of the charter for our audit committee is available on our investor relations website at https://ir.alxoncology.com/. During 2020,2021, our audit committee held four meetings. Compensation Committee Our compensation committee consists of Dr. Goodman and Messrs. Lettmann and Nielsen. Dr. Goodman is the chair of our compensation committee. Our board of directors has determined that each of the members of our compensation committee is independent under the listing standards of Nasdaq and a
“non-employee director” as defined in Rule 16b-3 under the Exchange Act. Our compensation committee oversees our compensation policies, plans, and benefits programs. The compensation committee also: | | | | | • | | oversees our overall compensation philosophy and compensation policies, plans and benefit programs; |
oversees our overall compensation philosophy and compensation policies, plans and benefit programs;
| | | | | • | | reviews and approves, or recommends to the board of directors for approval, the compensation of our executive officers and directors; |
reviews and approves, or recommend to the board of directors for approval, the compensation of our executive officers and directors;
| | | | | • | | prepares the compensation committee report that the SEC requires to be included in our annual proxy statement; and |
| | | | | • | | administers our equity compensation plans. |
prepares the compensation committee report that the SEC requires to be included in our annual proxy statement; and
administers our equity compensation plans.
Our compensation committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of Nasdaq. A copy of the charter for our compensation committee is available on our investor relations website at https://ir.alxoncology.com/. During 2020,2021, our compensation committee held two meetings. Corporate Governance and Nominating Committee Our corporate governance and nominating committee currently consists of Mr. Lettmann, Drs. Canamasas and Goodman and Walmsley, Ms. Hemrajani, and Mr. Lettmann.Hemrajani. Mr. Lettmann is the chair of our corporate governance and nominating committee. Dr. Canamasas was appointed to the corporate governance and nominating committee in April 2022. Our board of directors has determined that each member of our corporate governance and nominating committee is independent under the listing standards of Nasdaq. Our corporate governance and nominating committee oversees and assists our board of directors in reviewing and recommending nominees for election as directors. Specifically, the corporate governance and nominating committee: | | | | | • | | identifies, evaluates, and makes recommendations to our board of directors regarding nominees for election to our board of directors and its committees; |
identifies, evaluates, and makes recommendations to our board of directors regarding nominees for election to our board of directors and its committees;
| | | | | • | | considers and makes recommendations to our board of directors regarding the composition of our board of directors and its committees; |
considering and making recommendations to our board of directors regarding the composition of our board of directors and its committees;
| | | | | • | | reviews developments in corporate governance practices; |
reviewing developments in corporate governance practices;
| | | | | • | | evaluates the adequacy of our corporate governance practices and reporting; and |
| | | | | • | | evaluates the performance of our board of directors and of individual directors. |
evaluating the adequacy of our corporate governance practices and reporting; and
evaluating the performance of our board of directors and of individual directors.
Our corporate governance and nominating committee operates under a written charter that satisfies the listing standards of Nasdaq. A copy of the charter for our corporate governance and nominating committee is available on our investor relations website at https://ir.alxoncology.com/. During 2020,2021, our corporate governance and nominating committee held one meeting.no formal meetings.
Attendance at Board and Stockholder Meetings During our fiscal year ended December 31, 2020,2021, our board of directors held eleveneight meetings (including regularly scheduled and special meetings), and each director attended at least 75% of the aggregate of (i) the total number of meetings of our board of directors held during the period for which he or she has been a director and (ii) the total number of meetings held by all committees of our board of directors on which he or she served during the periods that he or she served on such committee. Although we do not have a formal policy regarding attendance by members of our board of directors at annual meetings of stockholders, we strongly encourage, but do not require, our directors to attend. This is our firstsecond annual meeting of stockholders. Six of our seven then-current directors attended our 2021 annual meeting of stockholders. Compensation Committee Interlocks and Insider Participation During 2020,2021, Dr. Goodman and Messrs. Lettmann and Nielsen served on our compensation committee. None of the members of our compensation committee is or has been an officer or employee of our company. None of our executive officers currently serves, or in the past fiscal year has served, as a member of the board of directors or compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of any entity that has one or more executive officers serving on our board of directors or compensation committee. Considerations in Evaluating Director Nominees Our corporate governance and nominating committee uses a variety of methods, including engaging the services of outside consultants and search firms, to identify and evaluate director nominees. In its evaluation of director candidates, our corporate governance and nominating committee will consider the current size and composition of our board of directors and the needs of our board of directors and the respective committees of our board of directors. Some of the qualifications that our corporate governance and nominating committee considers include such factors as character, integrity, judgment, diversity (including, without limitation, diversity in terms of gender, race, ethnicity and experience), age, independence, skills, education, expertise, business acumen, corporate experience, length of service, understanding of our business and other commitments, among other things. Nominees must also have the highest personal and professional ethics and integrity and skills that are complementary to those of the existing directors. Director candidates must have the ability to assist and support management and make significant contributions to our success based on proven achievement and competence in the nominee’s field and the ability to exercise sound business judgment. Nominees must also have an understanding of the fiduciary responsibilities that are required of a member of our board of directors and the commitment of time and energy necessary to diligently carry out those responsibilities. Members of our board of directors are expected to prepare for, attend, and participate in all board of directors and applicable committee meetings. Our corporate governance and nominating committee may also consider such other factors as it may deem, from time to time, are in our and our stockholders’ best interests. The corporate governance and nominating committee considers the suitability of each director candidate, including current directors, in light of the current size and composition of our board. Although our board of directors does not maintain a specific policy with respect to board diversity, our board of directors believes that our board of directors should be a diverse body, and our corporate governance and nominating committee considers a broad range of backgrounds and experiences. In making determinations regarding nominations of directors, our corporate governance and nominating committee may take into account the benefits of diverse viewpoints. Our corporate governance and nominating committee also considers these and other factors as it oversees the annual board of director and committee evaluations. After completing its review and evaluation of director candidates, our corporate governance and nominating committee recommends to our full board of directors the director nominees for selection.
Stockholder Recommendations for Nominations to the Board of Directors Our corporate governance and nominating committee will consider director candidates recommended by stockholders holding no less than $2,000 in market value, or one percent (1%), of the outstanding shares of our common stock continuously for at least 12 months prior to the date of the submission of the recommendation or nomination, soas long as such recommendations or nominations comply with our amended and restated certificate of incorporation, amendedBylaws, policies and restated bylaws,procedures for director candidates, and applicable laws, rules and regulations, including those promulgated by the SEC. Our corporate governance and nominating committee will evaluate such recommendations in accordance with its charter, our amended and restated bylawsBylaws and our policies and procedures for director candidates, as well as the regular director nominee criteria described above. This process is designed to ensure that our board of directors includes members with diverse backgrounds, skills and experience, including appropriate financial and other expertise relevant to our business. Eligible stockholders wishing to recommend a candidate for nomination should contact our Secretary in writing. Such recommendations must include information about the candidate, including the principal occupation or employment of the candidate; a statement of support executed by the candidate acknowledging that as a director of the candidate bycorporation, the recommending stockholder,nominee will owe a fiduciary duty under Delaware law with respect to the corporation and its stockholders; evidence of the recommending stockholder’s ownership of our capital stock,stock; a signed letter fromdescription of all arrangements or understandings between the candidate confirming willingnessstockholder and each nominee and any other person or persons (naming such person or persons) pursuant to serve on our board of directors, information regarding any relationships between us andwhich the candidatenominations are to be made by the stockholder; and any additional information required by our amendedBylaws and restated bylaws.our policies and procedures for director candidates. Our corporate governance and nominating committee has discretion to decide which individuals to recommend for nomination as directors. Under our amended and restated bylaws, stockholders may also directly nominate persons for election to our board of directors. Any nomination must comply with the requirements set forth in our amended and restated bylaws and should be sent in writing to our Secretary at ALX Oncology Holdings Inc., 866 Malcolm Road, Suite 100, Burlingame, California 94010. To be timely for the 2022 annual meeting of stockholders, nominations must be received by our Secretary not later than the 45th day nor earlier than the 75th day before the one-year anniversary of the date on which we first mailed our proxy materials or a notice of availability of proxy materials (whichever is earlier) for the preceding year’s annual meeting. In the event that no annual meeting was held in the previous year or if the date of the
annual meeting is advanced by more than 30 days prior to or delayed by more than 60 days after the one-year anniversary of the date of the previous year’s annual meeting, then notice by the stockholder to be timely must be so received by our Secretary not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of (i) the 90th day prior to such annual meeting and (ii) the 10th day following the day on which public announcement of the date of such annual meeting is first made.
Communications with the Board of Directors Interested parties wishing to communicate with non-management members of our board of directors may do so by writing and mailing the correspondence to our Secretary at ALX Oncology Holdings Inc., 866 Malcolm Road, Suite 100, Burlingame,323 Allerton Avenue, South San Francisco, California 94010.94080. Our Secretary monitors these communications and will provide a summary of all received bona fide messages to our board of directors at each regularly scheduled meeting of our board of directors. Where the nature of a communication warrants, our Secretary may determine, in his or her judgment, to obtain the more immediate attention of the appropriate committee of the board of directors or non-management director, of independent advisors or of our management. This procedure does not apply to (a) communications to non-management directors from officers or directors who are stockholders, (b) stockholder proposals submitted pursuant to Rule 14a-8 under the Exchange Act or (c) communications to our audit committee pursuant to our complaint procedures for accounting and auditing matters. Corporate Governance Guidelines and Code of Business Conduct and Ethics Our board of directors has adopted Corporate Governance Guidelines that address items such as the qualifications and responsibilities of our directors and director candidates and corporate governance policies and standards applicable to us in general. In addition, our board of directors has adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including our Chief Executive Officer, Chief Financial Officer and other executive and senior financial officers. The full text of our Corporate Governance Guidelines and our Code of Business Conduct and Ethics is posted on our investor relations website at https://ir.alxoncology.com/. We will post any amendments to our Code of Business Conduct and Ethics and any waivers of our Code of Business Conduct and Ethics for directors and executive officers on the same website or in filings under the Exchange Act. Role of the Board in Risk Oversight
Our board of directors has an active role, as a whole and also at the committee level, in overseeing the management of our risks. Our board of directors is responsible for general oversight of risks and regular review of information regarding our risks, including credit risks, liquidity risks and operational risks. The compensation committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. The audit committee is responsible for overseeing the management of risks relating to accounting matters and financial reporting. The corporate governance and nominating committee is responsible for overseeing the management of risks associated with the independence of our board of directors and potential conflicts of interest. Although each committee is responsible for evaluating certain risks and overseeing the management of such risks, our entire board of directors is regularly informed through discussions from committee members about such risks. Our board of directors believes its administration of its risk oversight function has not negatively affected the board of directors’ leadership structure.
Director Compensation In July 2020, our board of directors adopted, and our stockholders approved, an Outside Director Compensation Policy that provides for certain compensation to our non-employee directors. This policy was developed with input from our compensation committee’s independent compensation consultant, Compensia, regarding practices and compensation levels at comparable companies. It is designed to attract, retain and reward non-employee directors. directors. Under the outside director compensation policy, each non-employee director receives the cash and equity compensation for his or her services as a member of our board of directors, as described below. Cash Compensation The Outside Director Compensation Policy provides for the following cash compensation program for our non-employee directors: directors: | | | | | • | | $40,000 per year for service as a non-employee director; |
$40,000 per year for service as a non-employee director;
| | | | | • | | $30,000 per year for service as non-employee chair of our board of directors; |
$30,000 per year for service as non-employee chair of our board of directors;
| | | | | • | | $20,000 per year for service as chair of the audit committee; |
$20,000 per year for service as chair of the audit committee;
| | | | | • | | $7,500 per year for service as a member of the audit committee; |
$7,500 per year for service as a member of the audit committee;
| | | | | • | | $10,000 per year for service as chair of the compensation committee; |
$10,000 per year for service as chair of the compensation committee;
| | | | | • | | $5,000 per year for service as a member of the compensation committee; |
$5,000 per year for service as a member of the compensation committee;
| | | | | • | | $8,000 per year for service as chair of the corporate governance and nominating committee; and |
| | | | | • | | $4,000 per year for service as a member of the corporate governance and nominating committee |
$8,000 per year for service as chair of the corporate governance and nominating committee; and
$4,000 per year for service as a member of the corporate governance and nominating committee
Each non-employee director who serves as a committee chair will receive only the cash retainer fee as the chair of the committee but not the cash retainer fee as a member of that committee. These fees to our non-employee directors are paid quarterly in arrears on a prorated basis. Under our Outside Director Compensation Policy, we also will reimburse our non-employee directors for reasonable travel expenses to attend meetings of our board of directors and its committees. Equity Compensation Initial Award. Pursuant to our Outside Director Compensation Policy, each person who first becomes a non-employee director after the effective date of such policy will receive, on the first trading day on or after the date that the person first becomes a non-employee director, an initial award, or the Initial Award, of stock options to purchase 24,009 shares of our common stock. The Initial Award will be scheduled to vest in equal installments as to one thirty-sixth of the shares of our common stock subject at grant to the Initial Award on a monthly basis following the Initial Award’s grant date, on the same day of the month as the grant date, subject to continued services to us through the applicable vesting dates. If the person was a member of our board of directors and also an employee, then becoming a non-employee director due to termination of employment will not entitle the person to an Initial Award.
Annual Award. Pursuant to our Outside Director Compensation Policy, each non-employee director automatically will receive, on the first trading day immediately after the date of each annual meeting of our stockholders that occurs following the effective date of our Outside Director Compensation Policy, an annual award, or the Annual Award, of stock options to purchase 12,004 shares of our common stock, with such number of shares prorated if the recipient commenced service as a non-employee director after the date of the immediately prior annual meeting of our stockholders, based on the number of whole months of non-employee director service completed before the Annual Award’s grant date. Each Annual Award will be scheduled to vest as to one-twelfth of the shares of our common stock subject at grant to the Annual Award on a monthly basis following the Annual Award’s grant date, on the same day of the month as the grant date, or if earlier, the day immediately before the day of the next annual meeting of stockholders that occurs after the grant date of the Annual Award, subject to continued services to us through the applicable vesting dates. Change in Control. In the event of a change in control, as defined in our Amended and Restated 2020 Equity Incentive Plan, each non-employee director’s then outstanding equity awards covering shares of our common stock will accelerate vesting in full, provided that he or she remains a non-employee director through the date of our change in control. Other Award Terms. Each Initial Award and Annual Award will be granted under our Amended and Restated 2020 Equity Incentive Plan (or its successor plan, as applicable) and form of award agreement under such plan. These awards will have a maximum term to expiration of ten years from their grant and a per-share exercise price equal to 100% of the fair market value of a share of our common stock on the award’s grant date. Director Compensation Limits. Our Outside Director Compensation Policy provides that in any fiscal year, a non-employee director may be paid cash compensation and granted equity awards with an aggregate value of no more than $1,000,000 (with the value of equity awards based on its grant date fair value determined in accordance with U.S. GAAP for purposes of this limit). Equity awards granted or other compensation provided to a non-employee director while he or she was an employee or consultant (other than a non-employee director), or granted or provided before the effective date of the registration statement related to our initial public offering, do not count toward this annual limit. 20202021 Compensation
Directors who are also our employees receive no additional compensation for their service as directors. During 2020,2021, Drs. Pons and Randolph were employees and executive officers of the Company and did not receive compensation as directors. See the section titled “Executive Compensation” for additional information about Drs.Dr. Pons’ and Dr. Randolph’s compensation.compensation for the year ended December 31, 2021.
The following table presents the total compensation each of our non-employee directors received during the year ended December 31, 2020.2021. Other than as set forth in the table, we did not pay any compensation, make any equity awards or non-equity awards to or pay any other compensation to any of our non-employee directors in 2020.2021. | | | | | | | | | | | | | Name | | Fees Earned or Paid in Cash ($) | | | Option Awards ($)(1) | | | Total ($) | | Robert Adelman, M.D.(2) | | | — | | | | — | | | | — | | Caroline Gaynor(3) | | | — | | | | — | | | | — | | Corey Goodman, Ph.D. | | | 38,500 | | | | 327,447 | | | | 365,947 | | Rekha Hemrajani(4) | | | 37,111 | | | | 301,961 | | | | 339,072 | | Jason Lettmann(4) | | | 24,292 | | | | 327,447 | | | | 351,739 | | Jack Nielsen(4) | | | 24,063 | | | | 327,447 | | | | 351,510 | | Graham Walmsley, M.D., Ph.D.(4) | | | 23,604 | | | | 327,447 | | | | 351,051 | |
| | | | | | | | | | | | | Name | | Fees Earned or Paid in Cash ($) | | | Option Awards ($)(1) | | | Total ($) | | Corey Goodman, Ph.D. | | | 84,000 | | | | 480,962 | | | | 564,962 | | Rekha Hemrajani | | | 64,000 | | | | 480,962 | | | | 544,962 | | Jason Lettmann | | | 55,601 | | | | 480,962 | | | | 536,563 | | Jack Nielsen | | | 52,500 | | | | 480,962 | | | | 533,462 | | Graham Walmsley, M.D., Ph.D.(2) | | | 33,641 | | | | 480,962 | | | | 514,603 | |
| | (1) | This column reflects the aggregate grant date fair value of option awards granted to the officer in the applicable fiscal year, computed in accordance with Financial Accounting Standards Board |
| (FASB) Accounting Standards Codification (ASC) 718, Compensation—Stock Compensation (Topic 718). See Note 89 to our financial statements for the year ended December 31, 20202021 included in our Annual Report on Form 10-K for the year ended December 31, 20202021 for a discussion of the assumptions made by us in determining the grant date fair value of our equity awards. Our named executive officers will only realize compensation to the extent the trading price of our common stock is greater than the exercise price of such stock options. |
(2) | Dr. AdelmanWalmsley resigned from our board of directors in February 2020. |
(3) | Ms. Gaynor resigned from our board of directors in April 2020 and continues to serve on the board of directors of ALX Oncology Limited, one of our subsidiaries.
|
(4) | Mr. Nielsen and Dr. Walmsley joined our board of directors in February 2020, and Ms. Hemrajani and Mr. Lettmann joined our board of directors in April 2020. Therefore, their respective fees set forth in the table above were prorated for the portion of 2020 in which they served as directors.August 26, 2021.
|
The following table lists all outstanding equity awards held by non-employee directors as of December 31, 2020:2021: | | | | | | Option Awards | | | Option Awards | Name | | Date of Grant | | | Number of Securities Underlying Exercisable Options | | | Number of Securities Underlying Unexercisable Options | | Option Exercise Price ($) | | | Option Expiration Date | | | Date of Grant | | Number of Securities Underlying Exercisable Options | | | Number of Securities Underlying Unexercisable Options | | | | Option Exercise Price ($) | | | Option Expiration Date | Corey Goodman, Ph.D. | | | 7/16/20 | | | | 3,334 | | | | 20,675 | (1) | | | 19.00 | | | | 07/15/30 | | | 06/11/21 | | 6,002 | | 6,002 | | (3 | ) | | 59.66 | | 06/10/31 | | | | 07/16/20 | | 11,337 | | 12,672 | | (1 | ) | | 19.00 | | 07/16/30 | Rekha Hemrajani | | | 4/30/20 | | | | — | | | | 87,378 | (2) | | | 4.81 | | | | 04/29/30 | | | 06/11/21 | | 6,002 | | 6,002 | | (3 | ) | | 59.66 | | 06/10/31 | | | | 04/30/20 | | 36,407 | | 50,971 | | (2 | ) | | 4.81 | | 04/30/30 | Jason Lettmann | | | 7/16/20 | | | | 3,334 | | | | 20,675 | (1) | | | 19.00 | | | | 07/15/30 | | | 06/11/21 | | 6,002 | | 6,002 | | (3 | ) | | 59.66 | | 06/10/31 | | | | 07/16/20 | | 11,337 | | 12,672 | | (1 | ) | | 19.00 | | 07/16/30 | Jack Nielsen | | | 7/16/20 | | | | 3,334 | | | | 20,675 | (1) | | | 19.00 | | | | 07/15/30 | | | 06/11/21 | | 6,002 | | 6,002 | | (3 | ) | | 59.66 | | 06/10/31 | Graham Walmsley, M.D. Ph.D. | | | 7/16/20 | | | | 3,334 | | | | 20,675 | (1) | | | 19.00 | | | | 07/15/30 | | | | | | 07/16/20 | | 11,337 | | 12,672 | | (1 | ) | | 19.00 | | 07/16/30 | Graham Walmsley, M.D. Ph.D.(4) | | | 06/11/21 | | 2,000 | | — | | | | | 59.66 | | 06/10/31 | | | | 07/16/20 | | 8,669 | | — | | | | | 19.00 | | 07/16/30 |
| | (1) | In July 2020, our board of directors granted each non-employee director other than Ms. Hemrajani an option to purchase 24,009 shares of our common stock, which became effective as of the date of the effectiveness of the registration statement filed for our initial public offering. Shares subject to the option vest in 1/36th36 equal monthly installments beginning on August 16, 2020 subject to continued service through each such vesting date.
|
(2) | 1/4th4th of the shares subject to the option vested on April 27, 2021 and 1/36th36th of the remaining shares subject to the option vest monthly thereafter subject to continued service through each such vesting date. | (3) | Shares subject to the option vest in 12 equal monthly installments on the same day of month of grant date, or if earlier, the day immediately before the day of the next annual meeting of stockholders, subject to continued service through each such vesting date. | (4) | Dr. Walmsley resigned from our board of directors on August 26, 2021. |
PROPOSAL NO. 1 ELECTION OF DIRECTORS Our board of directors is currently composed of seven members. In accordance with our amended and restated certificate of incorporation, our board of directors is divided into three classes with staggered three-year terms. At the Annual Meeting, threetwo Class III directors will be elected for a three-year term to succeed the same class whose term is then expiring. Each director’s term continues until the election and qualification of such director’s successor, or such director’s earlier death, resignation or removal. Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of our directors. This classification of our board of directors may have the effect of delaying or preventing changes in control of our company. Nominees Our corporate governance and nominating committee has recommended, and our board of directors has approved, Corey Goodman,Itziar Canamasas, Ph.D., Jason Lettmann, and Sophia Randolph, M.D., Ph.D.Jack Nielsen as nominees for election as Class III directors at the Annual Meeting. If elected, each of Drs. Goodman and RandolphDr. Canamasas and Mr. LettmannNielsen will serve as a Class III director until the 20242025 annual meeting of stockholders or until his or her successor is duly elected and qualified. Drs. Goodman and RandolphDr. Canamasas and Mr. LettmannNielsen are currently directors of our company, and each has agreed to being named in this proxy statement as a nominee. For information concerning the nominees, please see the section titled “Board of Directors and Corporate Governance.” If you are a stockholder of record and you sign your proxy card or vote over the Internet or by telephone but do not give instructions with respect to the voting of directors, your shares will be voted FOR the election of Drs. Goodman and RandolphDr. Canamasas and Mr. Lettmann.Nielsen. If you are a street name stockholder of shares of our common stock and you do not give voting instructions to your broker, bank or other nominee, then your broker, bank or other nominee will leave your shares unvoted on this matter. We expect that Drs. Goodman and RandolphDr. Canamasas and Mr. LettmannNielsen will accept such nomination; however, in the event that a director nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee who shall be designated by our board of directors to fill such vacancy. Vote Required The election of Class III directors requires a plurality of the votes of the shares of our common stock present in person (including virtually) or represented by proxy at the Annual Meeting and entitled to vote thereon to be approved. “Plurality” means that the threetwo nominees who receive the most votes cast FOR‘FOR’ will be elected as Class III directors. As a result, any shares not voted FOR‘FOR’ a particular nominee (whether as a result of voting withheld or a broker non-vote) will not be counted in such nominee’s favor and will have no effect on the outcome of the election. THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE THREETWO NOMINEES NAMED ABOVE AS CLASS III DIRECTORS TO SERVE FOR A THREE-YEAR TERM.
PROPOSAL NO. 2 ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS This stockholder advisory vote, commonly known as “say-on-pay,” is required pursuant to Section 14A of the Exchange Act and gives our stockholders the opportunity to approve or not approve, on a non-binding advisory basis, the compensation paid to our Chief Executive Officer and the other executive officers named in the Summary Compensation Table (named executive officers) as disclosed in this proxy statement. The Board recommends a vote “FOR” the following resolution: “RESOLVED, that the stockholders of ALX Oncology Holdings Inc. approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the proxy statement, including the Compensation Discussion and Analysis, the compensation tables and any related narrative discussion.” We became a public company in July 2020 and since that time we have made important changes to our executive compensation program to reflect our transition from a private to public company. This is the first time we have included an advisory “say-on-pay” vote at the annual meeting of the stockholders, as our board of directors believes that stockholders will now be able to provide more meaningful feedback regarding the effectiveness of our executive compensation program and its relation to business outcomes of our company. Each year we intend to submit the executive compensation of our named executive officers to an advisory vote at our annual meeting of stockholders. The Compensation Discussion and Analysis, beginning on page 20, describes our executive compensation programs and the compensation decisions made by our compensation committee and board of directors for the fiscal year ended December 31, 2021 with respect to the named executive officers. As described in detail in the Compensation Discussion and Analysis and highlighted in the section titled “Executive Summary,” our compensation committee believes that the most effective compensation program is designed to provide a substantial portion of executive compensation in the form of variable, at-risk pay which is earned based on performance. Our compensation committee thoughtfully employs the primary compensation elements of base salary, annual cash incentives, and long-term equity awards, to achieve these objectives. Our board of directors is asking you to support this proposal. Because this vote is advisory, it will not be binding on us, our compensation committee or our board of directors. However, our compensation committee and our board of directors will review the voting results in their entirety and take them into consideration when making future decisions regarding named executive officer compensation. OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THE PROXY STATEMENT.
PROPOSAL NO. 3 ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS In accordance with The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Section 14A of the Exchange Act, we must provide our stockholders with the opportunity to make a non-binding, advisory vote on the frequency of future advisory votes on named executive officer compensation (“say-on-frequency” vote). The non-binding, advisory “say-on-frequency” vote must be submitted to our stockholders at least once every six years. We are asking stockholders to indicate whether they prefer to cast future advisory votes on named executive officer compensation “EVERY YEAR,” “EVERY TWO YEARS” or “EVERY THREE YEARS.” Stockholders may also abstain from voting on this proposal. The frequency that receives the greatest number of votes cast by stockholders will be considered the advisory vote of our stockholders. Our board of directors values the opinions of our stockholders and will consider the result of the “say-on-frequency” vote in determining the frequency with which we will hold future advisory votes on named executive officer compensation. However, the “say-on-frequency” vote is not binding. Our board of directors may determine that it is in the best interests of the company and our stockholders to hold an advisory vote on named executive officer compensation more or less frequently than the frequency that is selected by our stockholders. After careful consideration, our board of directors recommends that future non-binding advisory votes on the compensation of our named executive officers be held every year. OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR “EVERY YEAR” ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.
PROPOSAL NO. 4 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Our audit committee has appointed KPMG LLP, an independent registered public accounting firm, to audit our financial statements for our fiscal year ending December 31, 2021.2022. KPMG LLP has served as our independent registered public accounting firm since 2016. At the Annual Meeting, our stockholders are being asked to ratify the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2021.2022. Stockholder ratification of the appointment of KPMG LLP is not required by our bylawsBylaws or other applicable legal requirements. However, our board of directors is submitting the appointment of KPMG LLP to our stockholders for ratification as a matter of good corporate governance. In the event that this appointment is not ratified by the affirmative vote of a majority of the shares present in person (including virtually) or represented by proxy at the Annual Meeting and entitled to vote, such appointment will be reconsidered by our audit committee. Even if the appointment is ratified, our audit committee, in its sole discretion, may appoint another independent registered public accounting firm at any time during our fiscal year ending December 31, 20212022 if our audit committee believes that such a change would be in the best interests our company and our stockholders. A representative of KPMG LLP is expected to be present at the Annual Meeting, will have an opportunity to make a statement if he or she wishes to do so, and is expected to be available to respond to appropriate questions from stockholders. Fees Paid to the Independent Registered Public Accounting Firm The following table presents fees for professional audit services and other services rendered to us by KPMG LLP for our fiscal years ended December 31, 20202021 and 2019.2020. | | | 2020 | | | 2019 | | | 2021 | | | 2020 | | Audit Fees(1) | | $ | 1,381,242 | | | $ | 270,880 | | | Audit Fees(1) | | | $ | 1,188,530 | | $ | 1,381,242 | | Audit-Related Fees | | | — | | | | — | | | — | | — | | Tax Fees(2) | | | 43,116 | | | | 57,468 | | | Tax Fees(2) | | | 6,320 | | 43,116 | | All Other Fees | | | 1,780 | | | | — | | | | — | | | | 1,780 | | | | | | | | | | Total Fees | | $ | 1,426,138 | | | $ | 328,348 | | | $ | 1,194,850 | | $ | 1,426,138 | |
| | (1) | “Audit Fees” consist offees” represent fees billed for professional services rendered in connection withfor the auditaudits of our annual consolidated financial statements, andaudit of internal controls, quarterly reviews of our quarterlyconsolidated financial statements, for those fiscal years. This category also includes fees for services incurred in connectionstatutory audits, reviews of documents filed with our initial public offering.the SEC, registration statements and comfort letters. |
(2) | “Tax Fees” consist of fees billed for professional services rendered by KPMG LLP for tax compliance, tax advice and tax planning. |
Auditor Independence In our fiscal year ended December 31, 2020,2021, there were no other professional services provided by KPMG LLP that would have required our audit committee to consider their compatibility with maintaining the independence of KPMG LLP.
Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm Our audit committee has established a policy governing our use of the services of our independent registered public accounting firm. Under the policy, our audit committee is required to pre-approve all audit and permissible non-audit services performed by our independent registered public accounting firm in order to ensure that the provision of such services does not impair such accounting firm’s independence. All services provided by KPMG LLP for our fiscal yearyears ended December 31, 2019 were approved by our board of directors,2021 and following adoption of our pre-approval policy in June 2020, all fees paid to KPMG LLP for our fiscal year ended December 31, 2020 were pre-approved by our audit committee. Vote Required The ratification of the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ending December 31, 20212022 requires the affirmative vote of a majority of the shares of our common stock present in person (including virtually) or represented by proxy at the Annual Meeting and entitled to vote thereon. Abstentions will have the effect of a vote AGAINST this proposal, and broker non-votes will have no effect. THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR OUR FISCAL YEAR ENDING DECEMBER 31, 2021.2022.
AUDIT COMMITTEE REPORT The audit committee is a committee of the board of directors comprised solely of independent directors as required by the listing standards of the Nasdaq Stock Market LLC and the rules and regulations of the Securities and Exchange Commission (the SEC). The composition of the audit committee, the attributes of its members and the responsibilities of the audit committee, as reflected in its charter, are intended to be in accordance with applicable requirements for corporate audit committees. The audit committee operates under a written charter approved by the board of directors, which is available on our website at https://ir.alxoncology.com/. The audit committee reviews and assesses the adequacy of its charter and the audit committee’s performance on an annual basis. With respect to the Company’s financial reporting process, the Company’s management is responsible for (1) establishing and maintaining internal controls and (2) preparing the Company’s financial statements. The Company’s independent registered public accounting firm, KPMG LLP (KPMG), is responsible for performing an independent audit of the Company’s financial statements. It is the responsibility of the audit committee to oversee these activities. It is not the responsibility of the audit committee to prepare the Company’s financial statements. These are the fundamental responsibilities of management. In the performance of its oversight function, the audit committee has: | | | | | • | | reviewed and discussed the audited financial statements with management and KPMG; |
reviewed and discussed the audited financial statements with management and KPMG;
| | | | | • | | discussed with KPMG the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC; and |
| | | | | • | | received the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the audit committee concerning independence and has discussed with KPMG its independence. |
discussed with KPMG the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC; and
received the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the audit committee concerning independence and has discussed with KPMG its independence.
Based on the audit committee’s review and discussions with management and KPMG, the audit committee 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, 20202021 for filing with the SEC. Respectfully submitted by the members of the audit committee of the board of directors: Rekha Hemrajani (Chair) Graham Walmsley, M.D., Ph.D.Jason Lettmann
Jack Nielsen This report of the audit committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended (the Securities Act), or under the Securities Exchange Act of 1934, as amended (the Exchange Act), except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act.
EXECUTIVE OFFICERS The following table sets forth certain information about our executive officers as of March 31, 2021.2022. Officers are elected by our board of directors to hold office until their successors are elected and qualified. | | | | | Name | | Age | | Position | Jaume Pons, Ph.D. | | 5556 | | Chief Executive Officer, President and Director | Peter Garcia | | 60 | | Chief Financial Officer | Sophia Randolph, M.D., Ph.D. | | 5354 | | Chief Medical Officer and Director | Peter Garcia.Shelly Pinto
| | 5946 | | Vice President, Finance and Chief FinancialAccounting Officer |
For the biography of Dr. Pons, please see “Board of Directors and Corporate Governance—Continuing Directors.” For the biography of Dr. Randolph, please see “Board of Directors and Corporate Governance—Director Nominees.”
Peter Garcia has served as our Chief Financial Officer since January 2020. Prior to joining us, he served as Vice President and Chief Financial Officer from May 2013 until August 2019 and as Acting Chief Accounting Officer from May 2013 until July 2013 at PDL BioPharma, Inc., an acquirer of royalties and pharmaceutical assets. From October 2011 to May 2013, Mr. Garcia served as Chief Financial Officer at BioTime, Inc., a clinical-stage biotechnology company now known as Lineage Cell Therapeutics. He previously served as Chief Financial Officer of six biotechnology and high technology companies, including Marina Biotech, Nanosys, Nuvelo, Novacept, IntraBiotics Pharmaceuticals and Dendreon. Mr. Garcia currently serves as a member of the board of directors of DURECT Corporation, a biopharmaceutical company. Heholds a B.A. in Economics and Sociology from Stanford University and an M.B.A. from the University of California, Los Angeles. For the biography of Dr. Randolph, please see “Board of Directors and Corporate Governance—Continuing Directors.”Shelly Pintohas served as our Vice President, Finance and Chief Accounting Officer since May 2021. Prior to joining us, she was with Tizona Therapeutics, Inc. from July 2016 to April 2021, where she served most recently as Vice President of Finance and Operations from October 2020 to April 2021. Ms. Pinto was the Controller at InSite Vision Inc. from December 2008 to July 2016, the Assistant Controller at Bare Escentuals, Inc. from May 2007 to November 2008, and Director of Corporate Accounting and Financial Reporting at Dreyer’s Grand Ice Cream Holdings, Inc. from March 2002 to May 2007. Ms. Pinto started her career within the audit practice at Deloitte and Touche LLP after graduating with a B.S.B.A. in Accounting from Montana State University.
EXECUTIVE COMPENSATION ProcessesCompensation Discussion and ProceduresAnalysis
This Compensation Discussion and Analysis (CD&A) describes the principles underlying the material components of our executive compensation program for our executive officers, including the named executive officers in the “Summary Compensation DecisionsTable.” We also provide an overview of the overall objectives of the program and the factors relevant to an analysis of these policies and decisions and how we use our executive compensation program to drive our performance. Named Executive Officers Our named executive officers (or NEOs) for the year ended December 31, 2021 are: | | | | | | Name | | Title | Jaume Pons, Ph.D. | | President and Chief Executive Officer | Peter Garcia | | Chief Financial Officer | Sophia Randolph, M.D., Ph.D. | | Chief Medical Officer | Shelly Pinto(1) | | Vice President, Finance and Chief Accounting Officer | Steffen Pietzke(2) | | Former Vice President, Finance and Chief Accounting Officer |
(1) Ms. Pinto was appointed as the Company’s Vice President, Finance and Chief Accounting Officer on May 3, 2021. (2) Mr. Pietzke resigned as the Company’s Vice President, Finance and Chief Accounting Officer on March 31, 2021. Executive Summary Company Background and 2021 Business Highlights We are a clinical-stage immuno-oncology company focused on helping patients fight cancer by developing therapies that block the CD47 checkpoint pathway and bridge the innate and adaptive immune system. Cancer cells leverage CD47, a cell surface protein, as a “don’t eat me” signal to evade detection by the immune system. Our company is developing a next-generation checkpoint inhibitor designed to have a high affinity for CD47 and to avoid the limitations caused by hematologic toxicities inherent in other CD47 blocking approaches. We believe our lead product candidate, evorpacept (also known as ALX148), will have a wide therapeutic window to block the “don’t eat me” signal on cancer cells, and to leverage the immune activation of broadly used anti-cancer agents through combination strategies. Our executive compensation program seeks to incentivize and reward strong corporate performance. Highlights of our 2021 corporate performance and executive compensation program are set forth below. Clinical and Regulatory | | | | | • | | We dosed over 185 subjects with evorpacept across a range of hematologic and solid malignancies in combination with a number of leading anti-cancer agents. We plan to initiate additional studies in combination with leading anti-cancer agents. |
| | | | | • | | In hematologic malignancies, we dosed 13 subjects for the treatment of myelodysplastic syndromes, or MDS, during 2021 and advanced evorpacept into clinical development for the treatment of acute myeloid leukemia, or AML, enrolling the first patient in a Phase 1 trial in October 2021. |
| | | | | • | | In solid tumors, we have initiated two randomized Phase 2 trials of evorpacept for the treatment of first-line head and neck squamous cell carcinoma, or HNSCC, and dosed the first subject in the first trial in May 2021, and dosed the first subject in the second trial in July 2021. Our collaborator, Zymeworks, also initiated a Phase 1 trial for the treatment of advanced HER2-expressing breast cancer and enrolled the first subject in October 2021. |
| | | | | • | | In October 2021, we acquired ScalmiBio, a company specializing protein engineering and oncology in order to expand our pipeline of drug candidates. |
Corporate Financings | | | | | • | | In December 2021, we entered into a Sales Agreement with Cantor Fitzgerald & Co. and Credit Suisse Securities (USA) LLC, pursuant to which we may offer and sell from time to time up to $150 million of shares of our common stock through at-the-market offerings. | | • | | From inception through December 31, 2021, we have raised an aggregate of $545.3 million to fund our operations, of which $175.1 million were net proceeds from sales of our convertible preferred stock, $5.8 million were net proceeds from borrowings under a term loan, $169.5 million were net proceeds from our initial public offering and $194.9 million were net proceeds from our follow-on public offering. |
We have made significant progress on developing evorpacept, advancing preclinical programs, scaling up manufacturing, conducting clinical trials and providing administrative support for these operations and other internal corporate goals. Overview of Executive Compensation Program Our executive compensation program is designed to be competitive and appropriately balance our goals of attracting, engaging and retaining our executive officers and driving company performance. To align our executive officers’ interests with those of our stockholders and to motivate and reward individual initiative and effort, a substantial portion of each executive officer’s total target annual direct compensation opportunity (that is, base salary, target annual cash incentives, and equity awards) is “at-risk,” meaning the amounts paid to each executive officer will vary based on our Company performance and their contributions to that performance. Consistent with our philosophy of aligning executive pay with the short- and long-term performance of the Company, and to align the interests of management and stockholders, the Company’s compensation programs are designed to provide the majority of executive compensation in the form of variable, at-risk pay. Our compensation committee thoughtfully employs the primary compensation elements of base salary, short-term annual cash incentives, and long-term equity awards, to achieve these objectives.
In 2021, these primary elements of compensation for our Chief Executive Officer (CEO) and for our other NEOs comprised the following portions of their total target annual direct compensation: The percentages above were calculated using base salary, target annual cash incentive compensation, and the grant date fair value of stock options. The percentages shown in the graph above for our NEOs other than our CEO are averages of the percentages applicable to the compensation element for each such NEO, other than our Former Vice President, Finance and Chief Accounting Officer, who did not remain eligible for any short-term annual cash incentive, or receive any equity awards, for 2021. The percentages for our current Vice President, Finance and Chief Accounting Officer, who was appointed on May 3, 2021, are not prorated. Similar to our industry-based peers, we rely on stock option grants for our NEOs’ equity-based compensation because they do not provide realizable value to the holder unless stockholders also benefit from a stock price increase. Executive Compensation Governance With guidance from an independent compensation consultant, Compensia, we maintain sound compensation and governance standards, and we adopt best practices in establishing and administering policies in support of these standards. The compensation committee evaluates our executive compensation program regularly to ensure that it supports our short-term and long-term goals to compete for executive talent as well as protect our stockholders’ interests. Our pay-for-performance philosophy and compensation governance practices provide an appropriate framework to our executives to achieve our strategic goals without encouraging them to take excessive risks in their business decisions. Some of our practices include:
| | | | | | | | What We Do | | | ✓ | | Pay for performance philosophy and culture | | | ✓ | | Promote closer alignment of compensation with stockholder interests | | | ✓ | | Use relevant peer group to assist with setting pay | | | ✓ | | Balanced mix of fixed and at-risk pay | | | ✓ | | Robust anti-hedging and pledging policies | | | ✓ | | Retain an independent compensation consultant |
| | | | | What We Don’t Do | | | x | | Provide excessive severance payments | | | x | | Provide excessive perquisites | | | x | | Provide tax gross-ups for any golden parachute payments | | | x | | Provide special retirement plans for executive officers |
Stockholder Engagement The Company is committed to engagement with stockholders. We will review any feedback we receive from our stockholders about our executive compensation program to ensure that we understand key matters of interest to them, and to enable us to take that feedback into consideration for our compensation decisions. Compensation Philosophy The goals of our executive compensation program are to attract, engage, and retain executive officers who share our vision and are deeply connected to our mission. Our overall compensation philosophy is market-based and enables our executive officers to share in the Company’s long-term success. We strive to incentivize these executive officers to achieve our short-term and long-term business objectives in order to increase long-term value and increase stockholder value. Our program combines competitive cash and equity award opportunities in the forms and proportions that we believe will motivate our executive officers to increase stockholder value over the long-term. We routinely review our policies and program design. Our executive compensation program delivers excellent rewards in line with individual and company performance using the following specific compensation methods: | | | | | • | | paying competitive base salaries; |
| | | | | • | | rewarding our teams with a short-term incentive bonus plan opportunity; and |
| | | | | • | | awarding a higher percentage of target total direct compensation opportunity as long-term equity incentives to more closely align employee and stockholder interests over the long-term. |
“Say-on-Pay” Voting In the prior year, we were an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended. Therefore, we were not required to hold a non-binding, advisory vote on the compensation of our named executive officers. At this annual general meeting, we will hold our first “say-on-pay” vote. Our compensation committee and our board of directors will consider the result of the “say-on-pay” vote, and the related “say-on-frequency” vote, as well as feedback received throughout the year, when making compensation decisions for our executive officers in the future because we value the opinions of our stockholders. Compensation Determination Process Role of Compensation Committee and Board of Directors Our compensation committee is responsible for overseeing the total compensation of our executive officers. In this capacity, our compensation programscommittee designs, implements, reviews, and approves all compensation for our CEO and our other executive officers. The compensation committee formally met two times during fiscal year 2021 to review and discuss matters related to compensation of our employees and executive officers and acted by written consent 1 time during fiscal year 2021. Some of these meetings were held with members of management in attendance and some were held in closed session. Most of the meetings also included representatives from our compensation consultant (as described below). Typically, the compensation committee reports to ourthe board of directors on its discussions and on occasion seeks input from the board of directors regarding the decisions to be made and other actions. Typically,actions to be taken with regard to our Chief Executive Officerexecutive officers’ compensation. Our compensation committee’s recommendations regarding executive compensation are based on the compensation committee’s assessment of the performance of the Company and each individual executive officer, as well as other factors, such as prevailing industry trends and the competitive market for executive talent. The compensation committee makes the final decisions regarding executive compensation. Role of Management In 2021, our CEO and CFO made recommendations to our compensation committee, often attendsattended certain compensation committee meetings and iswere involved in the determination ofprocess for determining our executive officers’ compensation, for the respective executive officers who report to him, exceptprovided that the Chief Executive Officer does not makeneither our CEO or CFO made recommendations as to histheir own compensation or participated in compensation committee discussion of their own compensation. Our Chief Executive Officer makes recommendations to our compensation committee regarding short-considers management’s recommendations but is not required to follow any recommendations and long-termmay adjust compensation for all executive officers (other than himself) based on our results, an individual executive officer’s contribution toward these results and performance toward individual goal achievement.up or down as it determines in its discretion. Our compensation committee then reviews the recommendations and other data. Our compensation committeedata and makes decisions as to each executive officer’s total compensation, foras well as each individual pay component. During both compensation committee meetings in 2021, the compensation committee met in executive office, although it may instead, in its discretion, make recommendations to our boardsessions and the Company’s CEO and CFO were not present during such sessions. Role of directors regarding executive compensation for its approval.Independent Compensation Consultant Our compensation committee is authorized to retain the services of one or more executive compensation advisors, as it sees fit, in connection with the establishment of our compensation programs and related policies. In 2020,2021, our compensation committee retained Compensia a nationalas its independent compensation consultant to provide it with information, recommendations, and other advice relating to executive compensation on an ongoing basis. Accordingly, Compensia serves at the discretion of our compensation committee. As part of its engagement,Our compensation committee engaged Compensia assists our compensation committeeto assist in developing an appropriate group of peer companies, to help us determine the appropriate level of overall compensation for our executive officers, as well as assess each separate element of compensation, with a goal of ensuring that the compensation we offer to our executive officers is competitive and fair. Our compensation committee periodically considers and assesses Compensia’s independence, including whether Compensia has any potential conflicts of interest with our company or members of our compensation committee. In connection with Compensia’s engagement, our compensation committee
conducted such a review and concluded that it was not aware of any conflict of interest that had been raised by work performed by Compensia or the individual consultants employed by Compensia that perform services for our compensation committee. Use of Peer Group The compensation committee approves a peer group of companies as a reference group, based upon the analysis and recommendations of Compensia, to provide a broad perspective on competitive pay levels and practices. The peers are reviewed on an annual basis in light of the dynamic environment within our company and the industry more broadly. We undertake this review with Compensia, who also provides competitive market analysis of the base salary, annual cash incentive awards and long-term incentive compensation of our executive officers compared against our compensation peer group and reviews other market practices and trends. 2020 Peer Group In June 2020, the compensation committee approved a peer group for use in assisting it with base salary and annual target bonus decisions.The compensation committee used the following criteria in determining the appropriate peers: | | | | | • | | Industry Sector and Product Focus— Biotechnology and pharmaceutical companies; |
| | | | | • | | Stage— Pre-commercial, developmental-stage companies with a focus on Phase 1, Phase 2 and Phase 3 companies; |
| | | | | • | | Market Capitalization— Range of approximately $300 million to $1.2 billion; |
| | | | | • | | Employee Headcount— Up to 393 employees; and |
| | | | | • | | Location— PrimarilyBiotechnology hub markets |
Based on these criteria and considerations, our peer group for 2020, referred to as our 2020 peer group, as approved by our compensation committee, consisted of the following 18 companies: | | | Arcus Biosciences | Harpoon Therapeutics | NextCure | Atara Biotherapeutics | ImmunoGen | Replimune Group | Atreca | Krystal Biotech | Rocket Pharmaceuticals | Calithera Biosciences | Kura Oncology | Syros Pharmaceuticals | Cue Biopharma | Mersana Therapeutics | Trillium Therapeutics | CytomX Therapeutics | Molecular Templates | Ziopharm Oncology |
2021 Peer Group In May 2021, the compensation committee approved a peer group for use in assisting it with base salary and annual target bonus decisions. The compensation committee used the following criteria in determining the appropriate peers: | | | | | • | | Industry Sector and Product Focus— Biotechnology and pharmaceutical companies; |
| | | | | • | | Stage— Pre-commercial, developmental-stage companies with a focus on Phase 1, Phase 1/2, Phase 2 and Phase 3 companies; |
| | | | | • | | Market Capitalization— Range of approximately $1 billion to $5 billion; |
| | | | | • | | Employee Headcount— Up to 437 employees; and |
| | | | | • | | Location— PrimarilyBiotechnology hub markets (San Francisco, Bay Area, San Diego, East Coast Area, etc.) |
Based on these criteria and considerations, our peer group for 2021, referred to as our 2021 peer group, as approved by our compensation committee, consisted of the following 20 companies: | | | Allogene Therapeutics | Krystal Biotech | Rubius Therapeutics | Arcus Biosciences | Kura Oncology | SpringWorks Therapeutics | Arvinas | Mersana Therapeutics | Trillium Therapeutics | Atara Biotherapies | Relay Therapeutics | Turning Point Therapeutics | IGM Biosciences | Replimune Group | Xencor | ImmunoGen | Revolution Medicines | Zentalis Pharmaceuticals | Iovance Biotherpeutics | Rocket Pharmaceuticals | |
In setting compensation for our executive officers, including our named executive officers, the compensation committee uses competitive compensation data from an annual total compensation study of selected peer companies and relevant survey sources to inform its decisions about overall compensation opportunities and specific compensation elements. However, the compensation committee uses our compensation peer group as one data point when setting executive pay packages. In addition, our compensation decisions are based on the consideration of many factors, including, but not limited to, individual and company performance, internal equity, experience, and strategic needs. As a result of evaluating compensation based on the criteria described above, total target compensation for our named executive officers may in certain circumstances be above or below the target levels of the peer group.
Pay Components The Company’s executive compensation program consists of three primary elements: base salaries, annual cash incentives, and long-term equity awards: | | | | | | | Compensation Element | | Purpose | | | | Key Features | | | | | Base Salary | | • To attract and retain highly skilled executives | | | | • Fixed component of pay to provide financial stability, based on responsibilities, experience, individual contributions, and peer company data | | | | | Annual Cash Incentive Program | | • To promote and reward the achievement of key short-term strategic and business goals of the Company as well as individual performance; • To motivate and attract executives | | | | • Variable component of pay based on annual quantitative and qualitative performance assessment against objectives related to corporate, program-specific, and functional goals | | | | | Equity Incentive Compensation | | • To encourage executives and other employees to focus on long-term company performance; • To promote retention; • To reward outstanding company and individual performance | | | | • Delivered in the form of stock options, subject to multi-year vesting based on continued service. The value of these awards depends on the performance of our common stock price, in order to align employee and executive interests with those of our stockholders over the longer term |
Our Company is committed to a strong performance orientation in our compensation program and effective corporate governance practices for a company at our development stage and industry. Base Salary Base salary provides competitive pay to attract and retain our executives. Annual salary decisions are made in recognition of competitive data as well as the skills and experience that each individual brings to the Company and the performance contributions each makes. Base salary changes in 2021 varied by executive due either to merit increases or market adjustments. Other factors were considered such as tenure, experience, and the role of the individual. For our named executive officers who served in such role for the full year, each officer received a 3.0% increase due to a merit increase/market adjustment.
The 2021 base salaries for our named executive officers were as follows and were effective on January 1, 2021 except as noted below. The compensation committee did not consider any of the salary increases for our named executive officers to be material changes, as they generally reflect inflation-based adjustments. | | | | | | | | | | | | | Name | | 2021 Base Salary (1) | | | Base Salary as of 2020 Fiscal Year End(1) | | | % Increase | | Jaume Pons, Ph.D. | | $ | 566,500 | | | $ | 550,000 | | | | 3.0 | % | Peter Garcia | | $ | 453,200 | | | $ | 440,000 | | | | 3.0 | % | Sophia Randolph, M.D., Ph.D. | | $ | 453,200 | | | $ | 440,000 | | | | 3.0 | % | Shelly Pinto(2) | | $ | 340,000 | | | n/a | | | | — | |
(1)Represents the highest annualized base salary established for the named executive officer during the year indicated. (2)Ms. Pinto was appointed as the Company’s Vice President, Finance and Chief Accounting Officer on May 3, 2021. The 2021 Base Salary set forth above represents the annualized salary set in connection with and effective as of such appointment. Annual Cash Incentive Program We maintain an Executive Incentive Compensation Plan (Incentive Compensation Plan), pursuant to which our named executive officers are eligible to receive cash incentive awards. The Incentive Compensation Plan is designed to provide a financial incentive to reward executives for the achievement of a series of program specific, pipeline, and functional corporate goals. Payments under the plan are ultimately based on achievement of these pre-established corporate goals. Actual performance against targets, as measured by these pre-established corporate goals, funds the incentive payouts. The total bonus payout cannot exceed the total amount of funding in the pool. Annual target bonuses are set based on factors such as the executive’s past contributions, tenure, experience, and role and the annual target bonuses provided by companies in our compensation peer group to their similarly situated executives. Bonuses are typically paid in the month following the end of the performance period. For 2021, the compensation committee maintained Dr. Pons’ annual target bonus of 50% of his annual base salary. The annual target bonus target for each of our other NEOs, as a percentage of the NEO’s base salary, remained at 40%. Bonuses for all employees, including our named executive officers, for the fiscal year ended December 31, 2020,2021 were allocated from a bonus pool funded based on performance against a number of high-impact, cross-functional goals. The project goals related to specific programs, trials, and corporate progress. The cross-functional goals included goals related to business development, positioning for future growth, and development and other functional goals. The combination of the project and cross-functional goals was intended to drive both specific technical achievement and continue to build the foundation for future company growth and advancements. For 2021, the Company established five key corporate objectives: (i) advance clinical trial collaborations, (ii) advance the clinical pipeline, (iii) ensure supply of applicable materials, (iv) advance manufacturing runs, and (v) implement systems to meet corporate needs, which consistare viewed as critical drivers of our principallong-term success and ability to generate sustained growth in stockholder value. Our corporate goals are intended to drive these key objectives, by establishing specific, measurable criteria that could be used to evaluate the performance of our executive officerteam and the next two most highly compensatedCompany in general. We believe that if these goals are achieved, it will have a direct impact on creating value for our stockholders.
Each goal is measured individually, and the percent of goals achieved determines the 2021 bonus payout, subject to the compensation committee’s discretion to alter bonus funding and payouts. The 2021 performance bonuses were earned based upon achievement of such performance goals, as follows: | | | | | Performance Objective | | % Weighting | | Advance clinical trial collaborations | | | 10 | % | Advance the clinical pipeline | | | 65 | % | Ensure supply of applicable materials | | | 10 | % | Advance manufacturing runs | | | 5 | % | Implement systems to meet corporate needs | | | 10 | % | Total | | | 100 | % |
In addition, the Company established certain bonus goals. In January 2022, the compensation committee reviewed the progress against the applicable 2021 goals. Based on the Company’s achievement of these goals (including bonus goals), the compensation committee funded the Company’s bonus pool at 100% of target levels. The resulting bonuses to named executive officers who were serving as executive officers as of December 31, 2020 are:follows: | | | | | | | | | | | | | Named Executive Officer | | 2021 Base Salary | | | Annual Target Bonus (% of base) | | | 2021 Earned Bonus | | Jaume Pons, Ph.D. | | $ | 566,500 | | | | 50 | % | | $ | 283,250 | | Peter Garcia | | $ | 453,200 | | | | 40 | % | | $ | 181,280 | | Sophia Randolph, M.D., Ph.D. | | $ | 453,200 | | | | 40 | % | | $ | 181,280 | | Shelly Pinto(1) | | $ | 340,000 | | | | 40 | % | | $ | 90,542 | | Steffen Pietzke(2) | | $ | 338,000 | | | | 40 | % | | n/a | |
Jaume Pons, Ph.D., our
(1) Ms. Pinto was appointed as the Company’s Vice President, Finance and Chief ExecutiveAccounting Officer on May 3, 2021. The 2021 Earned Bonus set forth above represents her prorated award based upon such start date. (2) Mr. Pietzke resigned as the Company’s Vice President, Finance and Director; Peter Garcia, our Chief Financial Officer;Accounting Officer on March 31, 2021 and
Sophia Randolph, M.D., Ph.D., our Chief Medical Officer and Director.
was not eligible for the 2021 Earned Bonus.Summary Compensation Table
The following table provides information regarding the compensationbonuses paid to each of our named executive officers duringin 2021 under our Incentive Compensation Plan are set forth in the years ended December 31, 2019“Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table below. Equity Long-Term Incentive Compensation We believe long-term incentive compensation is an effective means for focusing our executive officers, including the named executive officers, on driving strong performance and 2020.increased stockholder value over a multi-year period, provides a meaningful reward for long-term value creation, and motivates them to remain employed with us. This approach aligns the contributions of our executive officers with the long-term interests of our stockholders and allows them to participate in any future appreciation in our common stock. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | | Salary ($) | | | Option Awards ($)(1) | | | Non-Equity Incentive Plan Compensation ($)(2) | | | Bonus ($)(3) | | | All Other Compensation ($) | | | Total ($) | | Jaume Pons, Ph.D. | | | 2020 | | | | 487,708 | | | | 5,953,964 | | | | 292,759 | | | | 500,000 | | | | — | | | | 7,234,431 | | Chief Executive Officer, President and Director | | | 2019 | | | | 422,300 | | | | 134,002 | | | | 147,900 | | | | — | | | | — | | | | 704,202 | | | | | | | | | | Peter Garcia | | | 2020 | | | | 416,818 | | | | 2,006,792 | | | | 200,837 | | | | 200,000 | | | | — | | | | 2,824,447 | | Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Sophia Randolph, M.D., Ph.D. | | | 2020 | | | | 397,588 | | | | 1,818,862 | | | | 190,915 | | | | 350,000 | | | | — | | | | 2,757,365 | | Chief Medical Officer and Director | | | 2019 | | | | 351,100 | | | | 40,834 | | | | 105,400 | | | | — | | | | — | | | | 497,334 | |
(1) | This column reflectsIn 2021, we had two equity compensation plans: the Amended and Restated 2020 Equity Incentive Plan and the 2020 Employee Stock Purchase Plan. We determine long-term incentive compensation for our executive officers as part of our biannual compensation review (with cash compensation reviewed in Q1 and equity compensation reviewed in Q3) taking into account competitive market analysis, the recommendations of our CEO (except regarding his own long-term incentive compensation), the aggregate grant date fair value of option awards granted to the officer in the applicable fiscal year, computed in accordance with FASB ASC Topic 718. See Note 8 to our financial statements for the year ended December 31, 2020 included in our Annual Report on Form 10-K for the year ended December 31, 2020 for a discussion of the assumptions made by us in determining the grant date fair value of our equity awards. Our named executive officers will only realize compensation to the extent the trading price of our common stock is greater than the exercise price of such stock options.
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(2) | The amounts disclosed represent discretionary bonuses based upon achievement of certain Company and individual performance metrics.
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(3) | The amounts disclosed represent discretionary bonuses that were not based on satisfaction of performance targets that were pre-established or communicated.
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Outstanding Equity Awards at 2020 Year-End
The following table provides information regarding outstanding equity holdings of each executive officer, the projected impact of the proposed awards held byon our earnings, and our Company performance in 2021.
In 2021, the long-term incentive equity compensation awarded to our named executive officers was granted in the form of stock options vesting over a four-year time-based schedule. The compensation committee believed that this approach is consistent with market practice among our peer group and based on discussions with Compensia, and reinforces a strong pay-for-performance culture as each stock option award only has value for the recipient if the value of December 31, 2020.our common stock appreciates from the grant date. Each stock option award was granted on the following material terms: | | | | | | Option Awards | | | Name | | Date of Grant | | | Number of Securities Underlying Exercisable Options | | Number of Securities Underlying Unexercisable Options(1) | | | Option Exercise Price ($) | | | Option Expiration Date | | | Named Executive Officer | | | Stock Options Number of Shares | | Jaume Pons, Ph.D. | | | 07/16/20 | | | | 28,413 | (2) | | | 244,358 | | | | 19.00 | | | | 7/15/30 | | | 225,000 | (1) | | | | 04/27/20 | | | | 33,054 | (3) | | | 165,256 | | | | 4.81 | | | | 4/26/30 | | | | | | 03/09/20 | | | | 552,533 | (4) | | | — | | | | 4.08 | | | | 03/08/30 | | | | | | 09/12/19 | | | | 105,719 | (5) | | | — | | | | 1.91 | | | | 09/11/29 | | | | | | 03/30/17 | | | | 240,330 | (6) | | | 21,849 | | | | 0.99 | | | | 03/29/27 | | | Peter Garcia | | | 07/16/20 | | | | 9,182 | (2) | | | 78,955 | | | | 19.00 | | | | 7/15/30 | | | 100,000 | (1) | | | | 04/27/20 | | | | 0 | (7) | | | 29,176 | | | | 4.81 | | | | 4/26/30 | | | | | | 03/09/20 | | | | 99,838 | (8) | | | — | | | | 4.08 | | | | 03/08/30 | | | | | | 03/09/20 | | | | 152,417 | (9) | | | — | | | | 4.08 | | | | 03/08/30 | | | Sophia Randolph, M.D., Ph.D. | | | 07/16/20 | | | | 9,339 | (2) | | | 80,318 | | | | 19.00 | | | | 7/15/30 | | | 100,000 | (1) | | | | 04/27/20 | | | | 6,610 | (3) | | | 44,069 | | | | 4.81 | | | | 4/26/30 | | | | | | 03/09/20 | | | | 137,906 | (4) | | | — | | | | 4.08 | | | | 03/08/30 | | | | | | 09/12/19 | | | | 23,490 | (5) | | | — | | | | 1.91 | | | | 09/11/29 | | | | | | 03/30/17 | | | | 7,107 | (6) | | | 5,686 | | | | 0.99 | | | | 03/29/27 | | | Shelly Pinto | | | 25,000 | (1) | Shelly Pinto | | | 125,000 | (2) | Steffen Pietzke(3) | | | | |
(1) | The unvested portion of these awards are also subject to vesting acceleration under certain circumstances, as will be more fully described below under “—Potential Payments upon Termination or Change in Control—Change in Control and Severance Policy.”
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(2) | 1/48th of the shares subject to the option vest each month beginning on August 16, 2020,
(1)The option has an exercise price equal to $58.56 per share, which was the closing price of our common stock on the date of grant (July 30, 2021). 1/48th of the shares subject to the option vest each month beginning on August 30, 2021, subject to continued service through each such vesting date. |
(3) | 1/48th of the shares subject to the option vest each month beginning on May 27, 2020, subject to continued service through each such vesting date.
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(4) | The option is subject to an early exercise provision and is immediately exercisable. 1/48th of the shares subject to the option vest each month beginning on April 9, 2020, subject to continued service through each such vesting date.
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(5) | The option is subject to an early exercise provision and is immediately exercisable. 1/48th of the shares subject to the option vest each month beginning on June 16, 2019, subject to continued service through each such vesting date.
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(6) | 1/48th of the shares subject to the option vest each month beginning on May 1, 2017, subject to continued service through each such vesting date.
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(7) | 1/4th of the shares subject to the option vest on April 27, 2021, and 1/36th of the remaining shares subject to the option vest each month thereafter, subject to continued service through each such vesting date.
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(8) | The option is subject to an early exercise provision and is immediately exercisable. 1/4th of the shares subject to the option vest on January 2, 2021, and 1/36th of the remaining shares subject to the option vest each month thereafter, subject to continued service through each such vesting date.
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(9) | The option is subject to an early exercise provision and is immediately exercisable. 1/4th of the shares subject to the option vest on March 9, 2021, and 1/36th of the remaining shares subject to the option vest each month thereafter, subject to continued service through each such vesting date.
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(2)The option has an exercise price equal to $62.83per share, which was the closing price of our common stock on the date of grant (May 3, 2021). 1/4th of the shares subject to the option vest on May 3, 2022, and 1/36th of the remaining shares subject to the option vest each month thereafter, subject to continued service through each such vesting date. (3)Mr. Pietzke resigned as the Company’s Vice President, Finance and Chief Accounting Officer on March 31, 2021. Executive Letter Agreements
Jaume Pons, Ph.D.
In July 2020, we entered intodetermining the 2021 annual option awards to our named executive officers, our compensation committee considered the equity awards granted at the 75th percentile to the executives holding comparable positions at our peer group companies, as well as each named executive officer’s existing equity holdings, level of responsibility and criticality, unvested status of existing equity holdings, and the committee’s subjective assessment of each named executive officer’s individual performance and our overall company performance. Our compensation committee considered the 75th percentile to be an appropriate benchmark given the growth stage of the business, and consistent with its objectives to emphasize pay for performance and provide incentives more heavily weighted toward promoting close alignment with the interests of our stockholders. We granted Ms. Pinto a confirmatory employment letterstock option to purchase 125,000 shares in connection with Dr. Jaume Pons, our Presidenther hire. In determining the terms of such option, the compensation committee considered her role and Chief Executive Officer. The confirmatory employment letter has no specific termresponsibilities, the peer group data for such position, and provides that Dr. Pons is an at-will employee. The employment letter supersedes all existing agreements and understandings that Dr. Pons may have entered into concerning his employment relationship with us. Dr. Pons’ annual base salary was $550,000 for 2020 and was subsequently increasedits market-competitiveness in order to $566,500, effective January 1, 2021. He is eligible for an annual target cash incentive payment equal to 50.0% of his annual base salary. Peter Garcia
recruit her from her previous employer. In July 2020,2021, as part of the 2021 annual option awards for long-term incentives, we entered into a confirmatory employment letter with Peter Garcia, our Chief Financial Officer. The confirmatory employment letter has no specific termgranted Ms. Pinto an additional stock option to purchase 25,000 shares. Severance and provides that Mr. Garcia is an at-will employee. The employment letter supersedes all existing agreements and understandings that Mr. Garcia may have entered into concerning his employment relationship with us. Mr. Garcia’s annual base salary was $440,000 for 2020 and was subsequently increased to $453,200, effective January 1, 2021. He is eligible for an annual target cash incentive payment equal to 40.0% of his annual base salary. Sophia Randolph, M.D., Ph.D.
In July 2020, we entered into a confirmatory employment letter with Dr. Sophia Randolph, our Chief Medical Officer. The confirmatory employment letter has no specific term and provides that Dr. Randolph is an at-will employee. The employment letter supersedes all existing agreements and understandings that Dr. Randolph may have entered into concerning her employment relationship with us. Dr. Randolph’s annual base salary was $440,000 for 2020 and was subsequently increased to $453,200, effective January 1, 2021. She is eligible for an annual target cash incentive payment equal to 40.0% of her annual base salary.
Change in Control and Severance AgreementsProtections In order to recruit and maintain a stable and effective management team, our compensation committee believes it is appropriate and necessary to provide assurance of certain severance and change in control benefits approved by the compensation committee, in consultation with Compensia. We entered into change in control and severance agreements or CIC Agreements,(Severance Agreements) with each of our named executive officers that provide for the severance and change in control benefits. For a summary of the material terms of the benefits describedprovided to our named executive officers under the Severance Agreements and an estimate of the payments and benefits that may be received by our named executive officers under the Severance Agreements, see “Potential Payments on Termination or Change in Control” below.
Other Compensation Retirement, Welfare, Health, and Other Broad-Based Benefits We maintain a 401(k) retirement savings plan, or 401(k) plan, for the benefit of our employees, including our named executive officers, who satisfy certain eligibility requirements. Our 401(k) plan provides eligible employees with an opportunity to save for retirement on a tax-advantaged basis. Under our 401(k) plan, eligible employees may elect to defer a portion of their compensation, within the limits prescribed by the Code and the applicable limits under the 401(k) plan (generally, up to 90% of the employee’s eligible compensation), on a pre-tax or after-tax (Roth) basis, through contributions to the 401(k) plan. All of a participant’s contributions into the 401(k) plan are 100% vested when contributed. The 401(k) plan permits us to make matching contributions and profit-sharing contributions to eligible participants. The 401(k) plan is intended to qualify under Sections 401(a) and 501(a) of the Code. As a tax-qualified retirement plan, pre-tax contributions to the 401(k) plan and earnings on those pre-tax contributions are not taxable to the employees until distributed from the 401(k) plan, and earnings on Roth contributions are not taxable when distributed from the 401(k) plan. Subject to limits under the Code, we match an amount equal to 50% of the first 6% of the eligible employee’s contributions with a maximum annual employer contribution of $10,000 per employee. Our health and welfare benefits include medical, dental and vision benefits, long-term disability insurance, basic life insurance coverage, health savings and dependent care accounts, and accidental death and dismemberment insurance. Our named executive officers also are eligible to participate in our 2020 Employee Stock Purchase Plan on the same terms as our other eligible employees. We design our employee benefits programs to be affordable and competitive in relation to the market, and compliant with applicable laws and practices. We adjust our employee benefits programs as needed based upon changes in applicable laws and market practices. Perquisites and Other Personal Benefits We do not provide perquisites or other personal benefits to our executive officers, including the named executive officers except in situations where we believe it is appropriate to assist an individual in the performance of his or her duties, to make our executive officers more efficient and effective, and for recruitment and retention purposes. In 2021, we provided Ms. Pinto with a signing bonus of $75,000 in order to incentivize her to join the Company. Ms. Pinto is required to repay all of the signing bonus to the Company if she voluntarily terminates her employment with the Company within 12 months of her date of hire. The compensation committee believed that the bonus was appropriate in order to recruit her from her previous employer. In the future, we may provide perquisites or other personal benefits in limited circumstances. All future practices with respect to perquisites or other personal benefits for executive officers will be approved and subject to periodic review by the compensation committee. Employment Agreements We have entered into confirmatory employment letters with each of our named executive officers. Each of these agreements was approved by our board of directors or our compensation committee. In filling each of our executive positions, our board of directors and the compensation committee recognized the need to develop competitive compensation packages to attract qualified candidates in a dynamic labor market. For information on the specific terms and conditions of the employment letters of the named executive officers, see the discussion of “Executive Employment Letter Agreements” below.
Additional Policies and Practices Hedging and Pledging Prohibitions As part of our Insider Trading Policy, our contractors and employees (including our executive officers and the non-employee members of our board of directors) are prohibited from trading in publicly-traded options, such as puts and calls, and other derivative securities with respect to our securities. This includes any hedging or similar transaction designed to decrease the risks associated with holding shares of our common stock. In addition, our contractors and employees (including our executive officers and the non-employee members of our board of directors) are prohibited from holding our common stock in a margin account or pledging our securities as collateral for a loan. Tax and Accounting Considerations Deductibility of Executive Compensation Our compensation committee takes into account the tax implications to the Company of our named executive officer compensation program, including with respect to the tax deductibility of compensation paid under Section 162(m) of the Code (Section 162(m)). Generally, Section 162(m) disallows a U.S. federal income tax deduction for public corporations of remuneration in excess of $1 million paid in any taxable year to certain specified executive officers. To maintain flexibility to compensate our executive officers in a manner designed to promote our short-term and long-term corporate goals, the compensation committee has not adopted a policy that all compensation must be deductible. The compensation committee believes that our stockholders’ interests are best served if its discretion and flexibility in awarding compensation is not restricted in order to allow such compensation to be consistent with the goals of our executive compensation program, even though some compensation awards may result in non-deductible compensation expense. Accounting for Stock-Based Compensation We follow the Financial Accounting Standard Board’s Accounting Standards Codification Topic 718 (FASB ASC Topic 718) for our stock-based compensation awards. FASB ASC Topic 718 requires us to measure the compensation expense for all share-based payment awards made to our employees and members of our board of directors, including options to purchase shares of our common stock and other stock awards, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the executive compensation tables required by the federal securities laws, even though the recipient of the awards may realize no value from their awards. See Note 9 to our financial statements for the year ended December 31, 2021 included in our Annual Report on Form 10-K for the year ended December 31, 2021 for a discussion of the assumptions made by us in determining the grant date fair value of our equity awards. Our compensation committee generally considers the accounting consequences of its decisions, including the impact of expenses being recognized in connection with equity-based awards, in determining the size and form of different equity-based awards. Taxation of Parachute Payments and Deferred Compensation We do not provide, and have no obligation to provide, any of our named executive officers with a “gross-up” or other reimbursement payment for any tax liability he or she might owe because of the application of Sections 280G, 4999, or 409A of the Code. If any of the payments or benefits provided for under the Severance Agreement or otherwise payable to a named executive officer would constitute “parachute payments” within the meaning of Section 280G of the Code and could be subject to the related excise tax, he or she would receive either full payment of such payments and benefits or such lesser amount that would cause no portion of the payments and benefits being subject to the excise tax, whichever results in the greater after-tax benefits to our named executive officer.
Clawback Arrangements Each CICof our 2020 Equity Incentive Plan and Incentive Compensation Plan provides that awards granted under it will be subject to any clawback policy of ours, which we may establish and/or amend from time to time to comply with applicable laws. The administrator of our 2020 Equity Incentive Plan also may specify in an award agreement that the participant’s rights, payments and benefits with respect to an award will be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events. Our board of directors further may require a participant of our 2020 Equity Incentive Plan to forfeit, return or reimburse us all or a portion of the award and any amounts paid under the award in order to comply with any clawback policy of ours or applicable laws. Under our Incentive Compensation Plan, the plan administrator may impose such other clawback, recovery or recoupment provisions with respect to an award under such plan as the administrator determines necessary or appropriate, including for example, reduction, cancellation, forfeiture or recoupment upon a termination of a participant’s employment for cause. Certain participants may be required to reimburse us for certain amounts paid under an award under our Incentive Compensation Plan in connection with certain accounting restatements we may be required to prepare due to our material noncompliance with any financial reporting requirements under applicable securities laws, as a result of misconduct. Compensation Committee Report The compensation committee has reviewed and discussed with management the CD&A provided above. Based on its review and discussions, the compensation committee recommended to the board of directors that the CD&A be included in this proxy statement and our Annual Report on Form 10-K for our fiscal year ended December 31, 2021. Respectfully submitted by the members of the compensation committee of the board of directors: Corey Goodman, Ph.D. (Chairman) Jason Lettmann Jack Nielsen
Summary Compensation Table The following table provides information regarding the compensation of our named executive officers during the years ended December 31, 2021, 2020 and 2019. | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | Salary ($) | | | Option Awards ($)(1) | | | Non-Equity Incentive Plan Compensation ($)(2) | | | Bonus ($)(3) | | | Total ($) | | Jaume Pons, Ph.D. | | 2021 | | | 566,500 | | | | 9,263,228 | | | | 283,250 | | | | — | | | | 10,112,978 | | Chief Executive Officer and | | 2020 | | | 487,708 | | | | 5,953,964 | | | | 292,759 | | | | 500,000 | | | | 7,234,431 | | President | | 2019 | | | 422,300 | | | | 134,002 | | | | 147,900 | | | | — | | | | 704,202 | | Peter Garcia | | 2021 | | | 453,200 | | | | 4,116,990 | | | | 181,280 | | | | — | | | | 4,751,470 | | Chief Financial Officer | | 2020 | | | 416,818 | | | | 2,006,792 | | | | 200,837 | | | | 200,000 | | | | 2,824,447 | | Sophia Randolph, M.D., Ph.D. | | 2021 | | | 453,200 | | | | 4,116,990 | | | | 181,280 | | | | — | | | | 4,751,470 | | Chief Medical Officer | | 2020 | | | 397,588 | | | | 1,818,862 | | | | 190,915 | | | | 350,000 | | | | 2,757,365 | | | | 2019 | | | 351,100 | | | | 40,834 | | | | 105,400 | | | | — | | | | 497,334 | | Shelly Pinto | | 2021 | | | 226,667 | | | | 6,724,110 | | | | 90,542 | | | | 75,000 | | | | 7,116,319 | | Vice President, Finance and Chief Accounting Officer | | | | | | | | | | | | | | | | | | Steffen Pietzke | | 2021 | | | 104,813 | | | | — | | | | — | | | | — | | | | 104,813 | | Former Vice President, | | 2020 | | | 257,292 | | | | 994,916 | | | | 123,945 | | | | 150,000 | | | | 1,562,865 | |
| | (1) | This column reflects the aggregate grant date fair value of option awards granted to the officer in the applicable fiscal year, computed in accordance with FASB ASC Topic 718. See Note 9 to our financial statements for the year ended December 31, 2021 included in our Annual Report on Form 10-K for the year ended December 31, 2021 for a discussion of the assumptions made by us in determining the grant date fair value of our equity awards. Our named executive officers will only realize compensation to the extent the trading price of our common stock is greater than the exercise price of such stock options. |
| | (2) | The amounts disclosed represent discretionary bonuses based upon achievement of certain Company and individual performance metrics. |
| | (3) | The amounts disclosed represent discretionary bonuses that were not based on satisfaction of performance targets that were pre-established or communicated. |
Grants of Plan-Based Awards The following table provides information regarding grants of plan-based awards to each of our named executive officers during the fiscal year ended December 31, 2021. | | | | | | | | | | | | | | | | | | | | | | | | | Grant Date | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)(1) | | | | | All Other Option Awards: Number of Securities Underlying Options(3) | | | Exercise or Base Price of Option Awards ($/share) | | | Grant Date Fair Value of Stock and Option Awards ($)(2) | | Name | | | | | Target | | | Maximum | | | | | | | | | | Jaume Pons, Ph.D. | | 1/8/2021 | | | | 283,250 | | | | | | | | | | | | | | | 7/30/2021 | | | | | | | | | 225,000 | | | | 58.56 | | | | 9,263,228 | | Peter Garcia | | 1/8/2021 | | | | 181,280 | | | | | | | | | | | | | | | 7/30/2021 | | | | | | | | | 100,000 | | | | 58.56 | | | | 4,116,990 | | Sophia Randolph, M.D., | | 1/8/2021 | | | | 181,280 | | | | | | | | | | | | | Ph.D. | | 7/30/2021 | | | | | | | | | 100,000 | | | | 58.56 | | | | 4,116,990 | | Shelly Pinto(4) | | 5/3/2021 | | | | 90,542 | | | | | | | | | | | | | | | 5/3/2021 | | | | | | | | | 125,000 | | | | 62.83 | | | | 7,853,750 | | | | 7/30/2021 | | | | | | | | | 25,000 | | | | 58.56 | | | | 1,029,248 | | Steffen Pietzke(5) | | | — | | | | — | | | | | | — | | | | — | | | | — | |
| | (1) | The amounts reported in these columns represent the target and maximum amount of annual performance-based incentive bonus compensation that might have been paid to each named executive officer for 2021 performance. The actual payouts approved for 2021 performance are shown in the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table.” These awards are described in further detail in the CD&A in the section entitled “Executive Incentive Compensation Plan.” The bonus payouts approved pursuant to the Executive Incentive Compensation Plan were paid in February 2022. |
| | (2) | The amounts shown are full grant date fair value in accordance with FASB ASC Topic 718. The assumptions used to calculate the grant date fair value of option awards are set forth under Note 9 of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 28, 2022. |
| | (3) | The amounts in this column represent the stock option awards granted in 2021 pursuant to our 2020 Equity Incentive Plan. The per share exercise price of the stock options is equal to the closing price of a share of our common stock on the date of grant. | (4) | Ms. Pinto joined as our Vice President, Finance and Chief Accounting Officer in May 2021. The estimated future payout amount under non-equity incentive plan awards was prorated based on Ms. Pinto’s start date. | (5) | Mr. Pietzke resigned as our Vice President, Finance and Chief Accounting Officer in March 2021. |
Outstanding Equity Awards at 2021 Year-End The following table provides information regarding outstanding equity awards held by our named executive officers as of December 31, 2021. | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Name | | Date of Grant | | | Number of Securities Underlying Exercisable Options | | | Number of Securities Underlying Unexercisable Options(1) | | | Option Exercise Price ($) | | | Option Expiration Date | | Jaume Pons, Ph.D. | | 07/30/21 | | | | 23,437 | | (2) | | 201,563 | | | | 58.56 | | | 07/29/31 | | | | 07/16/20 | | | | 96,606 | | (3) | | 176,165 | | | | 19.00 | | | 07/16/30 | | | | 04/27/20 | | | | 82,633 | | (4) | | 115,677 | | | | 4.81 | | | 04/27/30 | | | | 03/09/20 | | | | 552,533 | | (5) | | — | | | | 4.08 | | | 03/09/30 | | | | 09/12/19 | | | | 89,019 | | (6) | | — | | | | 1.91 | | | 09/12/29 | | | | 03/30/17 | | | | 242,179 | | (7) | | — | | | | 0.99 | | | 03/30/27 | | Peter Garcia | | 07/30/21 | | | | 10,416 | | (2) | | 89,584 | | | | 58.56 | | | 07/29/31 | | | | 07/16/20 | | | | 31,216 | | (3) | | 56,921 | | | | 19.00 | | | 07/16/30 | | | | 04/27/20 | | | | 12,156 | | (8) | | 17,020 | | | | 4.81 | | | 04/27/30 | | | | 03/09/20 | | | | 95,659 | | (9) | | — | | | | 4.08 | | | 03/09/30 | | | | 03/09/20 | | | | 60,468 | | (10) | | — | | | | 4.08 | | | 03/09/30 | | Sophia Randolph, M.D., Ph.D. | | 07/30/21 | | | | 10,416 | | (2) | | 89,584 | | | | 58.56 | | | 07/29/31 | | | | 07/16/20 | | | | 31,753 | | (3) | | 57,904 | | | | 19.00 | | | 07/16/30 | | | | 04/27/20 | | | | 19,831 | | (4) | | 30,848 | | | | 4.81 | | | 04/27/30 | | | | 03/09/20 | | | | 107,906 | | (5) | | — | | | | 4.08 | | | 03/09/30 | | | | 09/12/19 | | | | 12,431 | | (6) | | — | | | | 1.91 | | | 09/12/29 | | Shelly Pinto | | 07/30/21 | | | | 2,604 | | (2) | | 22,396 | | | | 58.56 | | | 07/29/31 | | | | 05/03/21 | | | | — | | (11) | | 125,000 | | | | 62.83 | | | 05/03/31 | | Steffen Pietzke | | | — | | | | — | | | | — | | | | — | | | | — | |
| | (1) | The unvested portion of these awards are also subject to vesting acceleration under certain circumstances, as will be more fully described below under “—Severance and Change in Control Protections.” |
| | (2) | 1/48th of the shares subject to the option vest each month beginning on August 30, 2021, subject to continued service through each such vesting date. |
| | (3) | 1/48th of the shares subject to the option vest each month beginning on August 16, 2020, subject to continued service through each such vesting date. |
| | (4) | 1/48th of the shares subject to the option vest each month beginning on May 27, 2020, subject to continued service through each such vesting date. |
| | (5) | The option is subject to an early exercise provision and is immediately exercisable. 1/48th of the shares subject to the option vest each month beginning on April 9, 2020, subject to continued service through each such vesting date. |
| | (6) | The option is subject to an early exercise provision and is immediately exercisable. 1/48th of the shares subject to the option vest each month beginning on June 16, 2019, subject to continued service through each such vesting date. |
| | (7) | The shares subject to the option are fully vested and immediately exercisable. |
| | (8) | 1/4th of the shares subject to the option vested on April 27, 2021, and 1/36th of the remaining shares subject to the option vest each month thereafter, subject to continued service through each such vesting date. |
| | (9) | The option is subject to an early exercise provision and is immediately exercisable. 1/4th of the shares subject to the option vested on January 2, 2021, and 1/36th of the remaining shares subject to the option vest each month thereafter, subject to continued service through each such vesting date. |
| | (10) | The option is subject to an early exercise provision and is immediately exercisable. 1/4th of the shares subject to the option vested on March 9, 2021, and 1/36th of the remaining shares subject to the option vest each month thereafter, subject to continued service through each such vesting date. | (11) | 1/4th of the shares subject to the option vest on May 3, 2022, and 1/36th of the remaining shares subject to the option vest each month thereafter, subject to continued service through each such vesting date. |
Option Exercises During Fiscal Year 2021 The following table shows certain information concerning option exercises and the value realized upon the exercise of stock options by our named executive officers during the fiscal year ended December 31, 2021. | | | | | | | | | | | Option Awards | | Name | | Number of shares Acquired on Exercise (#) | | | Value Realized on Exercise ($)(1) | | Jaume Pons, Ph.D. | | | 36,700 | | | | 2,603,334 | | Peter Garcia | | | 96,128 | | | | 6,519,422 | | Sophia Randolph, M.D., Ph.D. | | | 53,852 | | | | 1,535,688 | | Shelly Pinto | | | — | | | | — | | Steffen Pietzke | | | 44,956 | | | | 2,319,046 | |
(1)The value realized on exercise is based on the fair market value of our common stock on the date of exercise minus the exercise price. Executive Employment Letter Agreements Jaume Pons, Ph.D. In July 2020, we entered into a confirmatory employment letter with Dr. Jaume Pons, our President and Chief Executive Officer. The confirmatory employment letter has no specific term and provides that Dr. Pons is an at-will employee. The employment letter supersedes all existing agreements and understandings that Dr. Pons may have entered into concerning his employment relationship with us. Dr. Pons’ annual base salary is currently $583,500. He is eligible for an annual target cash incentive payment equal to 55.0% of his annual base salary.
Peter Garcia In July 2020, we entered into a confirmatory employment letter with Peter Garcia, our Chief Financial Officer. The confirmatory employment letter has no specific term and provides that Mr. Garcia is an at-will employee. The employment letter supersedes all existing agreements and understandings that Mr. Garcia may have entered into concerning his employment relationship with us. Mr. Garcia’s annual base salary is currently $466,800. He is eligible for an annual target cash incentive payment equal to 40.0% of his annual base salary. Sophia Randolph, M.D., Ph.D. In July 2020, we entered into a confirmatory employment letter with Dr. Sophia Randolph, our Chief Medical Officer. The confirmatory employment letter has no specific term and provides that Dr. Randolph is an at-will employee. The employment letter supersedes all existing agreements and understandings that Dr. Randolph may have entered into concerning her employment relationship with us. Dr. Randolph’s annual base salary is currently $471,330. She is eligible for an annual target cash incentive payment equal to 40.0% of her annual base salary. Shelly Pinto In May 2021, we entered into a confirmatory employment letter with Shelly Pinto, our Vice President, Finance and Chief Accounting Officer. The employment letter supersedes all existing agreements and understandings that Ms. Pinto may have entered into concerning her employment relationship with us. Ms. Pinto’s annual base salary is currently $350,200. She is eligible for an annual target cash incentive payment equal to 40.0% of her annual base salary. In addition, the Company agreed to pay Ms. Pinto a one-time signing bonus of $75,000 (Signing Bonus), payable at a mutually agreed-upon time after Ms. Pinto’s date of hire, provided that Ms. Pinto is required to repay all of the Signing Bonus to the Company if she voluntarily terminates her employment with the Company within 12 months of her date of hire. Potential Payments on Termination or Change in Control We entered into Severance Agreements with each of our named executive officers, which provides for certain severance and change in control benefits. Each Severance Agreement supersedessuperseded any prior agreement or arrangement that the named executive officer may have had with us that providesprovided for severance and/or change in control payments andor benefits. The CICSeverance Agreements have no specific term and will terminate upon written consent by the parties or when all obligations under the CIC Agreementchange in control agreement are satisfied. The CICSeverance Agreements provide that if, other than during the period beginning three months before our change in control through the one-year anniversary of our change in control or the CIC Period,(change in control period) the named executive officer’s employment with us is terminated by us without cause (as defined in the CICSeverance Agreement, and excluding by reason of his or her death or disability) or by the named executive officer for good reason“good reason” (as defined in the CICSeverance Agreement), the named executive officer will receive the following severance payments and benefits if he or she timely executes and does not revoke a release of claims in our favor: • A lump sum cash payment equal to 100% for Dr. Pons, or 75% for Mr. Garcia, Dr. Randolph and Mr. Garcia,Ms. Pinto, of the named executive officer’s base salary as in effect immediately before such termination; and • Company-paid group health, dental and vision coverage under COBRA for the named executive officer and his or her eligible dependents for up to twelve months for Dr. Pons, or nine months for Mr. Garcia, Dr. Randolph and Mr. Garcia.Ms. Pinto.
If, during the CIC Period,change in control period, the named executive officer’s employment with us is terminated by us without cause (as defined in the CICSeverance Agreement, and excluding by reason of his or her death or disability) or by the named executive officer for good reason (as defined in the CICSeverance Agreement), the named executive officer will receive the following severance payments and benefits if he or she timely executes and does not revoke a separation agreement and release of claims in our favor: • A lump sum cash payment equal to 150% for Dr. Pons, or 100% for Mr. Garcia, Dr. Randolph and Mr. Garcia,Ms. Pinto, of the named executive officer’s base salary as in effect immediately before such termination or if greater, the base salary in effect immediately before our change in control; • A lump sum cash payment equal to 150% for Dr. Pons, or 100% for Mr. Garcia, Dr. Randolph and Mr. Garcia,Ms. Pinto, of the named executive officer’s target bonus opportunity as in effect immediately before such termination or if greater, the target bonus opportunity in effect immediately before our change in control; • Company-paid group health, dental and vision coverage under COBRA for the named executive officer and his or her eligible dependents for up to eighteen months for Dr. Pons, or twelve months for Mr. Garcia, Dr. Randolph and Mr. Garcia;Ms. Pinto; and • 100% accelerated vesting and exercisability of the outstanding and unvested Company equity awards (other than Company equity awards subject to performance-based vesting criteria) granted to the named executive officer. In addition, the CICSeverance Agreement for Dr. Pons provides that in the event of our change in control, 100% of his outstanding Company equity awards (other than Company equity awards subject to performance-based vesting criteria) will accelerate vesting. Each CICSeverance Agreement provides that, if any of the amounts provided for under a CICSeverance Agreement or otherwise payable to the named executive officer would constitute “parachute payments” within the meaning of Internal Revenue Code Section 280G and could be subject to the related excise tax, the named executive officer would be entitled to receive either the full payment of benefits under the named executive officer’s CICSeverance Agreement or such lesser amount that would result in no portion of the payments and benefits being subject to the excise tax, whichever results in the greater amount of after-tax benefits to the named executive officer. The CICSeverance Agreements do not provide for any tax gross-ups in connection with our change in control. The following table provides information concerning the estimated payments and benefits that would be provided in the circumstances described below, assuming that the triggering event took place on December 31, 2021, the last day of our fiscal year. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Termination Without Cause or Resignation for Good Reason Not in Connection with a Change in Control | | | Termination Without Cause or Resignation for Good Reason in connection with a Change in Control | | | Change in Control | | | | Severance | | | Health Care | | | Equity | | | Severance | | | Bonus | | | Health Care | | | Equity | | | | Payments | | | Benefits ($) | | | Acceleration | | | Payments | | | Payments | | | Benefits | | | Acceleration | | | | ($) | | | ($) | | | ($) | | | ($) | | | ($) | | | ($) | | | ($) | | Jaume Pons, Ph.D. | | $ | 566,500 | | | $ | 21,960 | | | $ | 8,512,323 | | | $ | 849,750 | | | $ | 424,875 | | | $ | 33,433 | | | $ | 8,512,323 | | Peter Garcia | | $ | 339,900 | | | $ | 34,894 | | | $ | 2,785,431 | | | $ | 453,200 | | | $ | 181,280 | | | $ | 47,233 | | | $ | — | | Sophia Randolph, M.D., Ph.D. | | $ | 339,900 | | | $ | 34,894 | | | $ | 2,322,724 | | | $ | 453,200 | | | $ | 181,280 | | | $ | 47,233 | | | $ | — | | Shelly Pinto | | $ | 255,000 | | | $ | 30,740 | | | $ | — | | | $ | 340,000 | | | $ | 136,000 | | | $ | 41,619 | | | $ | — | |
Executive Incentive Compensation Plan Our board of directors has adopted our Executive Incentive Compensation Plan, or the Incentive Compensation Plan. Our Incentive Compensation Plan will be administered by the compensation committee of our board of directors, unless and until our board of directors determines otherwise. Our Incentive Compensation Plan allows us to grant incentive awards, generally payable in cash, to employees selected by the administrator, including our named executive officers, based upon performance goals that may be established by the administrator. Under our Incentive Compensation Plan, the administrator determines the performance goals applicable to any award, which goals may include, without limitation, goals related to attainment of research and development milestones; sales bookings; business divestitures and acquisitions; capital raising; cash flow; cash position; contract awards or backlog; corporate transactions; customer renewals; customer retention rates from an acquired company, subsidiary, business unit or division; earnings (which may include any calculation of earnings, including but not limited to earnings before interest and taxes, earnings before taxes, earnings before interest, taxes, depreciation and amortization and net taxes); earnings per share; expenses; financial milestones; gross margin; growth in stockholder value relative to the moving average of the S&P 500 Index or another index; internal rate of return; leadership development or succession planning; license or research collaboration arrangements; market share; net income; net profit; net sales; new product or business development; new product invention or innovation; number of customers; operating cash flow; operating expenses; operating income; operating margin; overhead or other expense reduction; patents; procurement; product defect measures; product release timelines; productivity; profit; regulatory milestones or regularly-related goals; retained earnings; return on assets; return on capital; return on equity; return on investment; return on sales; revenue; revenue growth; sales results; sales growth; savings; stock price; time to market; total stockholder return; working capital; unadjusted or adjusted actual contract value; unadjusted or adjusted total contract value; and individual objectives such as peer reviews or other subjective or objective criteria. The performance goals may differ from participant to participant and from award to award. The administrator also may determine that a target award or portion of a target award will not have a performance goal associated with it but instead will be granted if at all in the compensation committee’s sole discretion. The administrator of our Incentive Compensation Plan, in its sole discretion and at any time, may increase, reduce or eliminate a participant’s actual award, and/or increase, reduce or eliminate the amount allocated to any bonus pool for a particular performance period. The actual award may be below, at or above a participant’s target award, in the discretion of the administrator. The administrator may determine the amount of any reduction on the basis of such factors as it deems relevant, and the administrator is not required to establish any allocation or weighting with respect to the factors it considers. Actual awards generally will be paid in cash (or its equivalent) only after they are earned, and, unless otherwise determined by the administrator, a participant must be employed with us through the date the actual award is paid. The administrator of our Incentive Compensation Plan reserves the right to settle an actual award with a grant of an equity award under our then-current equity compensation plan, which equity award may have such terms and conditions, including vesting, as the administrator of such equity compensation plan determines. Payment of awards occurs as soon as administratively practicable after they are earned, but no later than the dates set forth in our Incentive Compensation Plan. Awards under our Incentive Compensation Plan are subject to any clawback policy of ours, which we may be required to adopt from time to time to comply with applicable laws. The administrator also may impose such other clawback, recovery or recoupment provisions with respect to an award under our Incentive Compensation Plan as the administrator determines necessary or appropriate, including for example, reduction, cancellation, forfeiture or recoupment upon a termination of a participant’s employment for cause. Certain participants may be required to reimburse us for certain amounts paid under an award under our Incentive Compensation Plan in connection with certain accounting restatements we may be required to prepare due to our material noncompliance with any financial reporting requirements under applicable securities laws, as a result of misconduct. The administrator of our Incentive Compensation Plan has the authority to amend, alter, suspend or terminate our Incentive Compensation Plan, provided such action does not impair the existing rights of
any participant with respect to any earned awards. Our Incentive Compensation Plan will remain in effect until terminated in accordance with its terms. 401(k) Plan
We maintain a 401(k) retirement savings plan, or 401(k) plan, for the benefit of our employees, including our named executive officers, who satisfy certain eligibility requirements. Our 401(k) plan provides eligible employees with an opportunity to save for retirement on a tax-advantaged basis. Under our 401(k) plan, eligible employees may elect to defer a portion of their compensation, within the limits prescribed by the Code and the applicable limits under the 401(k) plan (generally, up to 90% of the employee’s eligible compensation), on a pre-tax or after-tax (Roth) basis, through contributions to the 401(k) plan. All of a participant’s contributions into the 401(k) plan are 100% vested when contributed. The 401(k) plan permits us to make matching contributions and profit-sharing contributions to eligible participants. The 401(k) plan is intended to qualify under Sections 401(a) and 501(a) of the Code. As a tax-qualified retirement plan, pre-tax contributions to the 401(k) plan and earnings on those pre-tax contributions are not taxable to the employees until distributed from the 401(k) plan, and earnings on Roth contributions are not taxable when distributed from the 401(k) plan.
Hedging and Pledging Prohibitions
As part of our Insider Trading Policy, our contractors and employees (including our executive officers and the non-employee members of our board of directors) are prohibited from trading in publicly-traded options, such as puts and calls, and other derivative securities with respect to our securities. This includes any hedging or similar transaction designed to decrease the risks associated with holding shares of our common stock. In addition, our contractors and employees (including our executive officers and the non-employee members of our board of directors) are prohibited from holding our common stock in a margin account or pledging our securities as collateral for a loan.
Equity Compensation Plan Information The following table provides information as of December 31, 20202021 with respect to shares of our common stock that may be issued under our existing equity compensation plans. | Plan Category | | Number of Securities to be Issued upon Exercise of Outstanding Options, Restricted Stock Units and Rights (#) | | | Weighted Average Exercise Price of Outstanding Options and Rights ($) | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the first Column) (#) | | | Number of Securities to be Issued upon Exercise of Outstanding Options, Restricted Stock Units and Rights (#) | | | Weighted Average Exercise Price of Outstanding Options and Rights ($) | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the first Column) (#) | | Equity compensation plans approved by security holders | | | | | | | | | | | | | | | | Amended and Restated 2020 Equity Incentive Plan(1) | | | 4,857,308 | | | $ | 8.94 | | | | 2,835,445 | | | 2020 Employee Stock Purchase Plan(2) | | | — | | | | — | | | | 400,000 | | | Equity compensation plans not approved by security holders | | | — | | | | — | | | | — | | | Amended and Restated 2020 Equity Incentive Plan(1) | | | 5,143,714 | | $ | 23.91 | | 3,407,898 | | 2020 Employee Stock Purchase Plan(2) | | | — | | — | | 790,822 | |
| | (1) | Our board of directors adopted, and our stockholders approved, the Amended and Restated 2020 Plan.Equity Incentive Plan (2020 Plan). The 2020 Plan provides that the number of shares available for issuance under the 2020 Plan will be increased |
| on the first day of each fiscal year beginning with the 2021 fiscal year, in an amount equal to the least of (i) 4,000,000 shares, (ii) four percent (4%) of the outstanding shares of our common stock as of the last day of the immediately preceding fiscal year or (iii) such number of shares as our board of directors may determine no later than the last day of our immediately preceding fiscal year. |
| | (2) | Our board of directors adopted, and our shareholdersstockholders approved, the 2020 Employee Stock Purchase Plan (the ESPP). The ESPP provides that the number of shares available for issuance under the ESPP will be increased on the first day of each fiscal year beginning with the 2021 fiscal year, in an amount equal to the least of (i) 800,000 shares, (ii) one percent (1%) of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year or (iii) such number of shares as our board of directors may determine no later than the last day of our immediately preceding fiscal year. |
Risk Analysis of our Compensation PlansOur compensation committee reviews and discusses with management the risks arising from our executive compensation philosophy and practices applicable to all employees to determine whether they encourage excessive risk-taking and to evaluate compensation policies and practices that could mitigate such risks. In addition, our compensation committee engaged Compensia in 2020 and 2021 to independently review our executive compensation program. Based on those reviews, the compensation committee structures our executive compensation program to encourage our named executive officers to focus on both short-term and long-term performance and success. We do not believe that our executive compensation program creates risks that are reasonably likely to have a material adverse effect on us.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth the beneficial ownership of our common stock as of March 31, 20212022 by: | | | | | • | | each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our common stock; |
each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our common stock;
| | | | | • | | each of our named executive officers; |
each of our named executive officers;
| | | | | • | | each of our directors; and |
| | | | | • | | all of our current executive officers and directors as a group |
each of our directors and nominees for director; and
all of our executive officers and directors as a group.
We have determined beneficial ownership in accordance with the rules of the SEC, and thus it represents sole or shared voting or investment power with respect to our securities. Unless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all shares that they beneficially owned, subject to community property laws where applicable. The information does not necessarily indicate beneficial ownership for any other purpose, including for purposes of Sections 13(d) and 13(g) of the Exchange Act. We have based our calculation of the percentage of beneficial ownership on 40,208,56940,656,632 shares of our common stock outstanding as of March 31, 2021.2022. We have deemed shares of our common stock subject to stock options that are currently exercisable or exercisable within 60 days of March 31, 2021,2022, to be outstanding and to be beneficially owned by the person holding the stock option for the purpose of computing the percentage ownership of that person. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o ALX Oncology Holdings Inc., 866 Malcolm323 Allerton Avenue, South San Francisco, California 94080. | | | | | | | | | NAME OF BENEFICIAL OWNER | | NUMBER OF SHARES BENEFICIALLY OWNED | | | PERCENTAGE OF SHARES BENEFICIALLY OWNED | | 5% or Greater Stockholders: | | | | | | | Entities affiliated with venBio Partners(1) | | | 9,699,925 | | | | 23.9 | % | Entities affiliated with Lightstone Ventures(2) | | | 4,526,963 | | | | 11.1 | | Entities affiliated with Vivo Capital(3) | | | 4,220,048 | | | | 10.4 | | Entities affiliated with Wellington Management Company(4) | | | 3,728,330 | | | | 9.2 | | Entities affiliated with Logos Capital(5) | | | 3,156,981 | | | | 7.8 | | FMR LLC(6) | | | 2,592,939 | | | | 6.4 | | Named Executive Officers: | | | | | | | Jaume Pons, Ph.D.(7) | | | 1,603,738 | | | | 3.8 | | Sophia Randolph, M.D., Ph.D.(8) | | | 395,997 | | | | 1.0 | | Peter Garcia(9) | | | 242,035 | | | * | | Shelly Pinto (10) | | | 36,904 | | | * | | Non-Employee Directors: | | | | | | | Corey Goodman, Ph.D.(11) | | | 9,892,970 | | | | 24.3 | | Itziar Canamasas, Ph.D. (12) | | | — | | | * | | Rekha Hemrajani(13) | | | 59,512 | | | * | | Jason Lettmann(14) | | | 4,659,858 | | | | 11.5 | | Jack Nielsen(15) | | | 4,245,723 | | | | 10.4 | | All current executive officers and directors as a group (9 persons)(16) | | | 21,136,737 | | | | 49.9 | | | | | | | | |
* Represents beneficial ownership of less than one percent (1%) of the outstanding shares of our common stock.
(1)Based on a Schedule 13D reporting beneficial ownership as of, and filed with the SEC on, October 1, 2020, the shares consist of (i) 5,268,325 shares held of record by venBio Global Strategic Fund II, L.P. (GSF II LP); (ii) 3,969,789 shares held of record by venBio Global Strategic Fund, L.P. (GSF LP); and (iii) 461,811 shares held of record by venBio SPV, LLC. venBio Global Strategic GP II, L.P. (GS GP II LP) is the general partner of GSF II LP and venBio Global Strategic GP II, Ltd. (GS GP II Ltd) is the general partner of GS GP II LP. venBio Global Strategic GP, L.P. (GS GP LP) is the general partner of GSF LP and venBio Global Strategic GP, Ltd. (GS GP Ltd) is the general partner of GS GP LP. As the Directors of venBio Global GS GP II Ltd and GS GP Ltd and the Managing Directors of venBio SPV, LLC (SPV LLC), Robert Adelman and Corey Goodman, one of our directors, share voting and dispositive power with respect to the shares held of record by GSF II LP, GSF LP and SPV LLC. An additional 96,406 shares are held of record by Dr. Adelman. The address for these entities is c/o venBio Partners, LLC, 1700 Owens Street, Suite 595, San Francisco, California 94158. (2)Based on a Form 4 reporting beneficial ownership as of December 13, 2021 and filed with the SEC on December 15, 2021, the shares consist of (i) 2,097,326 shares held of record by Lightstone Ventures, LP (LV LP); (ii) 2,023,469 shares held of record by Lightstone Ventures II, LP (LV II LP); (iii) 285,956 shares held of record by Lightstone Ventures (A), LP (LV(A) LP); and (iv) 120,212 shares held of record by Lightstone Ventures II (A), LP (LV II(A) LP). LSV Associates, LLC (LSV Associates) is the General Partner of LV LP and LV(A) LP. As the managing directors of LSV Associates, Michael A. Carusi, Jean M. George and Henry A. Plain, Jr. share voting and dispositive power with respect to the shares held of record by LV LP and LV(A) LP. LSV Associates II, LLC (LSV Associates II) is the General Partner of LV II LP and LV II(A) LP. As the managing directors of LSV Associates II, Michael A. Carusi, Jean M. George, Henry A. Plain, Jr. and Jason W. Lettmann share voting and dispositive power with respect to the shares held of record by LV II LP and LV II(A) LP. The address for these entities is c/o LSV Capital Management, LLC, 2884 Sand Hill Road, Suite 100, Burlingame,121, Menlo Park, California 94010.94025. (3)Based on a Schedule 13G reporting beneficial ownership as of and filed with the SEC on, July 29, 2020, the shares consist of (i) 4,034,522 shares held of record by Vivo Capital Fund IX, L.P. (VIVO IX LP) and (ii) 185,526 shares held of record by Vivo Opportunity Fund, L.P. (VOF). Vivo Capital IX, LLC (VIVO IX LLC) is the General Partner of VIVO IX LP. As the managing members of VIVO IX LLC, Frank Kung, Edgar Engleman, Shan Fu, Jack Nielsen and Michael Chang share voting and dispositive power with respect to the shares held of record by VIVO IX LP. Vivo Opportunity, LLC is the general partner of VOF. As the managing members of Vivo Opportunity, LLC, Gaurav Aggarwal, Shan Fu, Frank King and Michael Chang share voting and dispositive power with respect to the shares held of record by VOF but each disclaims beneficial ownership of such shares except to the extent of his individual pecuniary interest therein. The address for these entities is c/o Vivo Capital, 192 Lytton Avenue, Palo Alto, California 94301. (4)Based on a Schedule 13G/A reporting beneficial ownership as of December 31, 2021 and filed with the SEC on February 4, 2022, the 3,728,330 shares are owned of record by clients of the Wellington Investment Advisers. Wellington Investment Advisors Holdings LLP controls directly, or indirectly through Wellington Management Global Holdings, Ltd., the Wellington Investment Advisers. Wellington Investment Advisors Holdings LLP is owned by Wellington Group Holdings LLP. Wellington Group Holdings LLP is owned by Wellington Management Group LLP, the parent holding company. The address for these entities is c/o Wellington Management Company LLP, 280 Congress Street, Boston, Massachusetts 02210. (5)Based on a Schedule 13D/A reporting beneficial ownership as of June 14, 2021, and filed with the SEC on June 15, 2021 and updated from Company records, the shares consist of (i) 2,161,981 shares held of record by Logos Opportunities Fund I, L.P. (LOS I LP) and (ii) 995,000 shares held of record by Logos Global Master Fund, L.P. (LGMF LP). Logos Opportunities GP, LLC (Logos Opportunities GP) is the general partner of LOS I LP, and Logos GP LLC (Logos GP) is the general partner of LGMF LP. Arsani William and Graham Walmsley are the managing members of Logos Opportunities GP and Logos GP and share voting and dispositive power with respect to the shares held of record by LOS I LP and LGMF LP. The address for these entities is c/o Logos Global Management, LP, 1 Letterman Drive, Building D, Suite D3-700, San Francisco, California 94129.
(6)Based on a Schedule 13G filed with the SEC on February 9, 2022 reporting stock ownership as of December 31, 2021, the reported shares of common stock are held of record by FMR LLC, certain of its subsidiaries and affiliates, and other companies and over which shares FMR LLC has sole dispositive power. FMR LLC has sole voting power with respect to 81,786 shares and sole dispositive power with respect to all reported shares. Abigail P. Johnson is a Director, the Chairman, and the Chief Executive Officer of FMR LLC. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B stockholders have entered into a stockholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the stockholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Ms. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act of 1940 (the Fidelity Funds), advised by Fidelity Management & Research Company LLC (FMR Co), a wholly owned subsidiary of FMR LLC, which power resides in the Fidelity Funds’ Boards of Trustees. FMR Co carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees. The address for FMR LLC is 245 Summer Street, Boston, Massachusetts 02210. (7)Consists of (i) 468,978 shares held of record by Dr. Pons and (ii) 1,134,760 shares issuable upon option exercise within 60 days of March 31, 2022, of which 798,654 are fully vested as of March 31, 2022. (8)Consists of (i) 188,396 shares held of record by Dr. Randolph and (ii) 207,601 shares issuable upon option exercise within 60 days of March 31, 2022, of which 114,549 are fully vested as of March 31, 2022. (9)Consists of (i) 24,483 shares held of record by Mr. Garcia and (ii) 217,552 shares issuable upon option exercise within 60 days of March 31, 2022, of which 88,720 are fully vested as of March 31, 2022. (10)Consists of (i) 446 shares held of record by Ms. Pinto and (ii) 36,458 shares issuable upon option exercise within 60 days of March 31, 2022, of which 4,166 are fully vested as of March 31, 2022. (11)Consists of (i) the shares disclosed in footnote (1) above which are held of record by entities affiliated with venBio Partners; (ii) 113,287 shares held of record by the Goodman Barinaga Trust for which Dr. Goodman serves as trustee; (iii) 54,083 shares held of record by the Emaldi Corporation for which Dr. Goodman serves as a director and (iv) 25,675 shares issuable upon option exercise within 60 days of March 31, 2022, of which 22,341 are fully vested. (12)Dr. Canamasas joined our board of directors in April 2022. (13)Consists of (i) 3,000 shares held of record by Rekha Hemrajani and (ii) 56,512 shares issuable upon option exercise within 60 days of March 31, 2022, of which 50,871 are fully vested. (14)Consists of (i) the shares disclosed in footnote (2) above which are held of record by entities affiliated with Lightstone Ventures; (ii) 107,220 shares held of record by Mr. Lettmann and (iii) 25,675 shares issuable upon option exercise within 60 days of March 31, 2022, of which 22,341 are fully vested. (15)Consists of (i) the shares disclosed in footnote (3) above that are held of record by VIVO IX LP and (ii) 25,675 shares issuable upon option exercise within 60 days of March 31, 2022, of which 22,341 are fully vested. (16)Consists of (i) 19,406,829 shares beneficially owned by our current executive officers and directors and (ii) 1,729,908 shares issuable upon option exercise within 60 days of March 31, 2022, of which 1,123,983 are fully vested.
| | | | | | | | | NAME OF BENEFICIAL OWNER | | NUMBER OF SHARES BENEFICIALLY OWNED | | | PERCENTAGE OF SHARES BENEFICIALLY OWNED | | 5% or Greater Stockholders: | | | | | | | | | Entities affiliated with venBio Partners(1) | | | 9,699,925 | | | | 24.1 | % | Entities affiliated with Lightstone Ventures(2) | | | 4,720,990 | | | | 11.7 | | Entities affiliated with Vivo Capital(3) | | | 4,220,048 | | | | 10.5 | | Entities affiliated with Logos Capital(4) | | | 3,156,981 | | | | 7.9 | | Named Executive Officers: | | | | | | | | | Jaume Pons, Ph.D.(5) | | | 1,700,214 | | | | 4.1 | | Sophia Randolph, M.D., Ph.D.(6) | | | 444,683 | | | | 1.1 | | Peter Garcia(7) | | | 302,793 | | | | | * | Non-Employee Directors: | | | | | | | | | Corey Goodman, Ph.D.(8) | | | 9,873,964 | | | | 24.6 | | Rekha Hemrajani(9) | | | 26,665 | | | | | * | Jason Lettmann(10) | | | 4,834,879 | | | | 12.0 | | Jack Nielsen(11) | | | 4,041,191 | | | | 10.1 | | Graham Walmsley, M.D., Ph.D.(12) | | | 3,163,650 | | | | 7.9 | | All executive officers and directors as a group (8 persons)(13) | | | 24,388,039 | | | | 58.2 | |
* | Represents beneficial ownership of less than one percent (1%) of the outstanding shares of our common stock.
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(1) | Based on a Schedule 13D reporting beneficial ownership as of, and filed with the SEC on, October 1, 2020, the shares consist of (i) 5,268,325 shares held of record by venBio Global Strategic Fund II, L.P. (GSF II LP); (ii) 3,969,789 shares held of record by venBio Global Strategic
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| Fund, L.P. (GSF LP); and (iii) 461,811 shares held of record by venBio SPV, LLC. venBio Global Strategic GP II, L.P. (GS GP II LP) is the general partner of GSF II LP and venBio Global Strategic GP II, Ltd. (GS GP II Ltd) is the general partner of GS GP II LP. venBio Global Strategic GP, L.P. (GS GP LP) is the general partner of GSF LP and venBio Global Strategic GP, Ltd. (GS GP Ltd) is the general partner of GS GP LP. As the Directors of venBio Global GS GP II Ltd and GS GP Ltd and the Managing Directors of venBio SPV, LLC (SPV LLC), Robert Adelman and Corey Goodman, one of our directors, share voting and dispositive power with respect to the shares held of record by GSF II LP, GSF LP and SPV LLC. An additional 96,406 shares are held of record by Dr. Adelman. The address for these entities is c/o venBio Partners, LLC, 1700 Owens Street, Suite 595, San Francisco, California 94158. |
(2) | Based on a Schedule 13D reporting beneficial ownership as of, and filed with the SEC on, July 31, 2020, the shares consist of (i) 2,268,087 shares held of record by Lightstone Ventures, LP (LV LP); (ii) 2,023,469 shares held of record by Lightstone Ventures II, LP (LV II LP); (iii) 309,222 shares held of record by Lightstone Ventures (A), LP (LV(A) LP); and (iv) 120,212 shares held of record by Lightstone Ventures II (A), LP (LV II(A) LP). LSV Associates, LLC (LSV Associates) is the General Partner of LV LP and LV(A) LP. As the individual general partners of LSV Associates, Michael A. Carusi, Jean M. George and Henry A. Plain Jr. share voting and dispositive power with respect to the shares held of record by LV LP and LV(A) LP. LSV Associates II, LLC (LSV Associates II) is the General Partner of LV II LP and LV II(A) LP. As the individual general partners of LSV Associates II, Michael A. Carusi, Jean M. George, Henry A. Plain Jr. and Jason W. Lettmann share voting and dispositive power with respect to the shares held of record by LV II LP and LV II(A) LP. The address for these entities is c/o LSV Capital Management, LLC, 2884 Sand Hill Road, Suite 121, Menlo Park, California 94025.
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(3) | Based on a Schedule 13G reporting beneficial ownership as of, and filed with the SEC on, July 29, 2020, the shares consist of (i) 4,034,522 shares held of record by Vivo Capital Fund IX, L.P. (VIVO IX LP) and (ii) 185,526 shares held of record by Vivo Opportunity Fund, L.P. (VOF). Vivo Capital IX, LLC (VIVO IX LLC) is the General Partner of VIVO IX LP. As the managing members of VIVO IX LLC, Frank Kung, Edgar Engleman, Shan Fu, Jack Nielsen and Michael Chang share voting and dispositive power with respect to the shares held of record by VIVO IX LP, but each disclaims beneficial ownership of such shares except to the extent of his individual pecuniary interest therein. Vivo Opportunity, LLC is the general partner of VOF. As the managing members of Vivo Opportunity, LLC, Gaurav Aggarwal, Shan Fu, Frank King and Michael Chang share voting and dispositive power with respect to the shares held of record by VOF but each disclaims beneficial ownership of such shares except to the extent of his individual pecuniary interest therein. The address for these entities is c/o Vivo Capital, 192 Lytton Avenue, Palo Alto, California 94301.
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(4) | The shares consist of (i) 2,161,981 shares held of record by Logos Opportunities Fund I, L.P. (LOS I LP) and (ii) 975,000 shares held of record by Logos Global Master Fund, L.P. (LGMF LP). Logos Opportunities GP, LLC (Logos Opportunities GP) is the general partner of LOS I LP, and Logos GP LLC (Logos GP) is the general partner of LGMF LP. Arsani William and Graham Walmsley are the managing members of Logos Opportunities GP and Logos GP and share voting and dispositive power with respect to the shares held of record by LOS I LP and LGMF LP. The address for these entities is c/o Logos Global Management, LP, 1 Letterman Drive, Building D, Suite D3-700, San Francisco, California 94129.
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(5) | Consists of (i) 561,346 shares held of record by Dr. Pons and (ii) 1,138,868 shares issuable upon option exercise within 60 days of March 31, 2021, of which 497,511 are fully vested as of March 31, 2021.
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(6) | Consists of (i) 201,137 shares held of record by Dr. Randolph and (ii) 243,546 shares issuable upon option exercise within 60 days of March 31, 2021, of which 69,849 are fully vested as of March 31, 2021.
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(7) | Consists of (i) 9,128 shares held of record by Mr. Garcia and (ii) 293,665 shares issuable upon option exercise within 60 days of March 31, 2021, of which 77,977 are fully vested as of March 31, 2021.
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(8) | Consists of (i) the shares disclosed in footnote (1) above which are held of record by entities affiliated with venBio Partners; (ii) 113,287 shares held of record by the Goodman Barinaga Trust for which Dr. Goodman serves as trustee; (iii) 54,083 shares held of record by the Emaldi Corporation for which Dr. Goodman serves as a director and (iv) 6,669 shares issuable upon option exercise within 60 days of March 31, 2021, of which 6,669 are fully vested.
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(9) | Consists of (i) 3,000 shares held of record by Rekha Hemrajani and (ii) 23,665 shares issuable upon option exercise within 60 days of March 31, 2021, of which 23,665 are fully vested.
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(10) | Consists of (i) the shares disclosed in footnote (2) above which are held of record by entities affiliated with Lightstone Ventures; (ii) 107,220 shares held of record by Mr. Lettmann and (iii) 6,669 shares issuable upon option exercise within 60 days of March 31, 2021, of which 6,669 are fully vested.
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(11) | Consists of (i) the shares disclosed in footnote (3) above that are held of record by VIVO IX LP and (ii) 6,669 shares issuable upon option exercise within 60 days of March 31, 2021, of which 6,669 are fully vested.
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(12) | Consists of (i) the shares disclosed in footnote (4) above that are held of record by LOS I LP and LGMF LP and (ii) 6,669 shares issuable upon option exercise within 60 days of March 31, 2021, of which 6,669 are fully vested.
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(13) | Consists of (i) 22,661,619 shares beneficially owned by our executive officers and directors and (ii) 1,726,420 shares issuable upon option exercise within 60 days of March 31, 2021, of which 695,678 are fully vested.
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CERTAIN RELATIONSHIPS, RELATED PARTY AND OTHER TRANSACTIONS The following is a description of certain relationships and transactions since the beginning of our last fiscal year involving our directors, executive officers or beneficial holders of more than 5% of our capital stock. Compensation arrangements with our directors and officers are described in “Management—Director Compensation,” “Executive Compensation” and “Management.” Prior to April 1, 2020, all of our beneficial holders were shareholders of our predecessor, ALX Oncology Limited. On April 1, 2020, we were incorporated in Delaware and completed a reorganization whereby ALX Oncology Limited became our wholly-owned subsidiary and all of the shareholders, warrantholders and optionholders of ALX Oncology Limited became our stockholders, warrantholders and optionholders, holding the same number of corresponding shares, warrants and/or options in us as they did in ALX Oncology Limited immediately prior to the reorganization.
The related-party transaction disclosures included below reflect transactions between ALX Oncology Limited and related parties from January 1, 2020 to March 30, 2020, the period prior to our incorporation and the effectiveness of the reorganization. For all other times, it includes transactions between us and related parties.
Reorganization Transaction
As described above, on April 1, 2020, we consummated a reorganization whereby we issued and sold to the existing shareholders of ALX Oncology Limited an aggregate of 3,166,946 shares of our common stock at purchase prices per share ranging from $0.007 to $1.91, an aggregate of 9,297,081 shares of our Series A convertible preferred stock at a purchase price per share of $6.58, an aggregate of 1,016,727 shares of our Series B convertible preferred stock at a purchase price per share of $9.4972 and an aggregate of 11,055,966 shares of our Series C convertible preferred stock at a purchase price per share of $9.4972, in exchange for promissory notes with an aggregate principal amount of $176.3 million. We also acquired 525,000,000 ordinary shares of ALX Oncology Limited in exchange for the promissory notes that were acquired in connection with such issuance and sale of our capital stock.
Purchasers of our shares of common stock, Series A convertible preferred stock, Series B convertible preferred stock and Series C convertible preferred stock include certain of our directors and executive officers and venture capital funds that beneficially own more than 5% of our outstanding capital stock and/or are represented on our board of directors. The following table presents the number of shares purchased and the total purchase price paid by these persons.
| | | | | | | | | INVESTOR | | SHARES OF COMMON STOCK | | | TOTAL PURCHASE PRICE | | Sophia Randolph, M.D., Ph.D.(1) | | | 132,966 | | | $ | 131,250 | |
(1) | Dr. Randolph currently serves as our Chief Medical Officer and Director.
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| | | | | | | | | INVESTOR | | SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK | | | TOTAL PURCHASE PRICE | | Entities affiliated with venBio Global Strategic Fund, LP(1) | | | 5,498,608 | | | $ | 36,184,150 | | Entities affiliated with Lightstone Ventures, LP(2) | | | 2,579,776 | | | $ | 16,976,504 | | Goodman Barinaga Trust(3) | | | 78,175 | | | $ | 514,446 | | Jason Lettmann(4) | | | 78,175 | | | $ | 514,446 | |
(1) | Entities affiliated with venBio Global Strategic Fund, LP whose shares are aggregated for the purposes of reporting ownership information include venBio Global Strategic Fund LP and venBio Global Strategic Fund II L.P. Dr. Corey Goodman, our Executive Chairman, is a Managing Partner of venBio Partners. Dr. Jaume Pons, our Chief Executive Officer and a member of our board of directors, is a venture partner of venBio Partners.
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(2) | Entities affiliated with Lightstone Ventures, LP whose shares are aggregated for the purposes of reporting ownership information include Lightstone Ventures, LP, Lightstone Ventures (A), LP, Lightstone Ventures II, LP and Lightstone Ventures II (A), LP. Jason Lettmann, a member of our board of directors, is a General Partner of Lightstone Ventures. Dr. Jaume Pons, our Chief Executive Officer and a member of our board of directors, is a scientific advisor of Lightstone Ventures.
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(3) | Dr. Goodman, our Executive Chairman, is a trustee of the Goodman Barinaga Trust.
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(4) | Mr. Lettmann, a member of our board of directors, is a General Partner of Lightstone Ventures.
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| | | | | | | | | INVESTOR | | SHARES OF SERIES B CONVERTIBLE PREFERRED STOCK | | | TOTAL PURCHASE PRICE | | Entities affiliated with venBio Global Strategic Fund, LP(1) | | | 490,411 | | | $ | 4,657,496 | | Entities affiliated with Lightstone Ventures, LP(2) | | | 230,084 | | | $ | 2,185,155 | | Goodman Barinaga Trust(3) | | | 15,794 | | | $ | 149,999 | |
(1) | Entities affiliated with venBio Global Strategic Fund, LP whose shares are aggregated for the purposes of reporting ownership information include venBio Global Strategic Fund LP and venBio Global Strategic Fund II L.P. Dr. Corey Goodman, our Executive Chairman, is a Managing Partner of venBio Partners. Dr. Jaume Pons, our Chief Executive Officer and a member of our board of directors, is a venture partner of venBio Partners.
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(2) | Entities affiliated with Lightstone Ventures, LP whose shares are aggregated for the purposes of reporting ownership information include Lightstone Ventures, LP, Lightstone Ventures (A), LP, Lightstone Ventures II, LP and Lightstone Ventures II (A), LP. Jason Lettmann, a member of our board of directors, is a General Partner of Lightstone Ventures. Dr. Jaume Pons, our Chief Executive Officer and a member of our board of directors, is a scientific advisor of Lightstone Ventures.
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(3) | Dr. Goodman, our Executive Chairman, is a trustee of the Goodman Barinaga Trust.
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| | | | | | | | | INVESTOR | | SHARES OF SERIES C CONVERTIBLE PREFERRED STOCK | | | TOTAL PURCHASE PRICE | | Emaldi Corporation(1) | | | 52,647 | | | $ | 500,000 | | Entities affiliated with venBio Global Strategic Fund, LP(2) | | | 1,052,950 | | | $ | 10,000,001 | | Entities affiliated with Lightstone Ventures, LP(3) | | | 859,311 | | | $ | 8,161,004 | | Logos Opportunities Fund I, LP(4) | | | 2,105,901 | | | $ | 20,000,000 | | Vivo Capital Fund IX, LP(5) | | | 3,158,851 | | | $ | 30,000,000 | |
(1) | Dr. Corey Goodman, our Executive Chairman, is a director of Emaldi Corporation.
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(2) | Entities affiliated with venBio Global Strategic Fund, LP whose shares are aggregated for the purposes of reporting ownership information include venBio Global Strategic Fund LP and venBio Global Strategic Fund II L.P. Dr. Corey Goodman, our Executive Chairman, is a Managing Partner of venBio Partners. Dr. Jaume Pons, our Chief Executive Officer and a member of our board of directors, is a venture partner of venBio Partners.
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(3) | Entities affiliated with Lightstone Ventures, LP whose shares are aggregated for the purposes of reporting ownership information include Lightstone Ventures, LP, Lightstone Ventures (A), LP, Lightstone Ventures II, LP and Lightstone Ventures II (A), LP. Jason Lettmann, a member of our board of directors, is a General Partner of Lightstone Ventures. Dr. Jaume Pons, our Chief
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| Executive Officer and a member of our board of directors, is a scientific advisor of Lightstone Ventures. |
(4) | Dr. Graham Walmsley, a member of our board of directors, is a Founding Member and Managing Partner of Logos Capital.
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(5) | Jack Nielsen, a member of our board of directors, is a Managing Partner of Vivo Capital.
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Convertible Preferred Share Financings
Series C Convertible Preferred Shares Transaction
In February 2020, we issued and sold an aggregate of 11,055,966 shares of our Series C convertible preferred shares at a purchase price of $9.4972 per share for an aggregate purchase price of approximately $105.0 million.
Purchasers of our Series C convertible preferred shares include venture capital funds that beneficially owned more than 5% of our outstanding share capital and/or are represented on our board of directors. The following table presents the number of shares and the total purchase price paid by these persons.
| | | | | | | | | INVESTOR | | SERIES C CONVERTIBLE PREFERRED SHARES | | | TOTAL PURCHASE PRICE | | Emaldi Corporation(1) | | | 52,647 | | | $ | 500,000 | | Entities affiliated with venBio Global Strategic Fund, LP(2) | | | 1,052,950 | | | $ | 10,000,001 | | Entities affiliated with Lightstone Ventures, LP(3) | | | 859,311 | | | $ | 8,161,004 | | Logos Opportunities Fund I, LP(4) | | | 2,105,901 | | | $ | 20,000,000 | | Vivo Capital Fund IX, LP(5) | | | 3,158,851 | | | $ | 30,000,000 | |
(1) | Dr. Corey Goodman, our Executive Chairman, is a director of Emaldi Corporation.
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(2) | Entities affiliated with venBio Global Strategic Fund, LP whose shares are aggregated for the purposes of reporting ownership information include venBio Global Strategic Fund LP and venBio Global Strategic Fund II L.P. Dr. Corey Goodman, our Executive Chairman, is a Managing Partner of venBio Partners. Dr. Jaume Pons, our Chief Executive Officer and a member of our board of directors, is a venture partner of venBio Partners.
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(3) | Entities affiliated with Lightstone Ventures, LP whose shares are aggregated for the purposes of reporting ownership information include Lightstone Ventures, LP, Lightstone Ventures (A), LP, Lightstone Ventures II, LP and Lightstone Ventures II (A), LP. Jason Lettmann, a member of our board of directors, is a General Partner of Lightstone Ventures. Dr. Jaume Pons, our Chief Executive Officer and a member of our board of directors, is a scientific advisor of Lightstone Ventures.
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(4) | Dr. Graham Walmsley, a member of our board of directors, is a Founding Member and Managing Partner of Logos Capital.
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(5) | Jack Nielsen, a member of our board of directors, is a Managing Partner of Vivo Capital.
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Investors’ Rights Agreement We are party to an investors’ rights agreement, as amended, with certain holders of our capital stock, including venBio, Lightstone Ventures, Vivo Capital and Logos Capital. Under our investors’ rights agreement, certain holders of our capital stock have the right to demand that we file a registration statement or request that their shares of our capital stock be covered by a registration statement that we are otherwise filing. venBio Consulting Agreement In January 2017, Dr. Jaume Pons, our Chief Executive Officer and the Chief Executive Officer of ALX Oncology Limited, entered into a consulting agreement with venBio, one of our stockholders and an affiliate of one of our directors, Dr. Corey Goodman, to provide assistance with deal generation, evaluate potential investments and serve on boards of venBio’s portfolio companies. In accordance with this agreement as compensation for services provided, venBio paid Dr. Pons approximately $125,000 per year in 2017, 2018, 2019, 2020 and 2020.2021. The consulting agreement remains in effect until terminated by either party with or without prior notice. Tallac Therapeutics AgreementsAgreement In May 2018, Dr. Jaume Pons, our Chief Executive Officer, entered into a consulting agreement with Tallac Therapeutics. Dr. Pons was engaged to provide management services. In accordance with this agreement as compensation for his services, Tallac Therapeutics issued Dr. Pons shares of its common stock. The consulting agreement will terminate automatically upon the later of completion of all projects under the consulting agreement or two years. In addition, Tallac Therapeutics may terminate the agreement at any time without prior notice, and Dr. Pons may terminate the agreement upon 30 days’ prior written notice if no services remain outstanding under the agreement.
Dr. Pons served as the Chief Executive Officer of Tallac Therapeutics until April 2020, and Dr. Hong Wan, our former Chief Scientific Officer, currently serves as the Chief Executive Officer of Tallac Therapeutics. Dr. Pons also currently serves as a member of the board of directors of Tallac Therapeutics. In addition, two of our current investors, venBio and Lightstone Ventures, who were also investors of ALX Oncology Limited prior to April 1, 2020, are also investors in Tallac Therapeutics.
In June 2018, we entered into the Tollnine Agreement to provide research and development services to Tallac Therapeutics. Pursuant to the terms of the Tollnine Agreement, which was amended in May 2019 and was terminated effective as of June 30, 2020, ALX Oncology Inc. (f/k/a Alexo Therapeutics Inc.), our indirectly wholly-owned subsidiary, provided certain research and development services to Tallac Therapeutics for a service fee based on the costs incurred by the Company plus a mark-up. For the years ended December 31, 2018, 2019 and 2020, we recognized related-party revenues of $2.1 million, $4.8 million and $1.2 million, respectively. As of December 31, 2018, 2019 and 2020, we had outstanding related-party receivables from Tallac Therapeutics of $0.9 million, $0.5 million and zero, respectively.
As of July 1, 2020, we terminated the Tollnine Agreement and entered into a series of transactions with Tallac Therapeutics and Dr. Wan as described below.
Entry into the Tallac Services Agreement: We entered into the Tallac Services Agreement, with Tallac Therapeutics effective as ofJuly 1, 2020. The Tallac Services Agreement provides that Tallac Therapeutics will provide certain preclinical research services to us for a service fee based on the costs incurred by Tallac Therapeutics plus a mark-up equal to 10.0% of such costs. The Tallac Services Agreement has an initial term of four years and is renewed automatically for additional one year terms thereafter.
Resignation of Dr. Wan and entry into Consulting Agreement: Dr. Wan resigned from her position as our Chief Scientific Officerand ceased to be our employee effective as of June 30, 2020. In connection with her resignation, we entered into a Consulting Agreement with Dr. Wan effective as of July 1, 2020. Under the Consulting Agreement, Dr. Wan serves as our Chief Science Consultant and, among other things, spends approximately 20% of her time performing activities typically performed by a consulting scientific adviser in the biotechnology industry. In exchange for such services, the options to purchase shares of our common stock that were previously granted to Dr. Wan will continue to vest and be exercisable subject to Dr. Wan remaining a service provider under the Consulting Agreement or the Tallac Services
| Agreement. The Consulting Agreement has an initial term of four years and is renewed automatically for additional one year terms thereafter.
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Transfer of employees to Tallac Therapeutics: In addition to Dr. Wan, eight of our employees, or Transferred Employees, alsoterminated their employment with us effective as of June 30, 2020 and became employees of Tallac Therapeutics effective as of July 1, 2020. The options to purchase shares of our common stock that were previously granted to the Transferred Employees will continue to vest and be exercisable subject to the Transferred Employees remaining service providers under the Tallac Services Agreement.
Entry into Asset Transfer Agreement: ALX Oncology Inc. entered into an Asset Transfer Agreement with Tallac Therapeuticseffective in July 2020, pursuant to which Tallac Therapeutics purchased certain lab equipment and other assets from ALX Oncology Inc. for minimal cash consideration representing the aggregate book value of such assets.
In addition to the transactions described above, we also assigned to Tallac Therapeutics our lease with respect to our premises located at 866 Malcolm Road, Burlingame, California 94010, and received a sublease for such premises from Tallac Therapeutics.
On March 4, 2021, we entered into a Collaboration Agreement with Tallac Therapeutics pursuant to which we expect to jointly develop, manufacture, and commercialize a novel class of cancer immunotherapeutics. The collaboration builds on our expertise in developing therapies that block the CD47 checkpoint pathway and expands our immuno-oncology pipeline. Together with Tallac Therapeutics, we will leverage our respective scientific and technical expertise to advance an anti-SIRPαanti-SIRPα antibody conjugated to a Toll-like receptor 9 agonist for targeted activation of both the innate and adaptive immune systems. We and Tallac Therapeutics will share equally in the cost and expenses of research and development and any profit or loss. Directed Share ProgramAcquisition of ScalmiBio, Inc.
On October 4, 2021, we entered into a share purchase agreement by and among us, ScalmiBio, Inc. (ScalmiBio) and the stockholders of ScalmiBio. Under the terms of the share purchase agreement, we made an initial payment to the stockholders of ScalmiBio of approximately $4.5 million in cash, net of certain expenses and adjustments. We may make an additional payment of $2.0 million in cash at the one-year anniversary of the transaction, subject to certain conditions. In July 2020,addition, we issuedhave agreed to pay certain milestones based on the clinical development of the acquired ScalmiBio technology, with a maximum amount of milestones payable equal to $35.0 million in the aggregate. We have also agreed to pay a low single digit royalty on net sales of any products developed from the ScalmiBio acquired technology for a defined term, and sold 9,775,000we may exercise a buy-out right of such royalty for a one-time payment on a product-by-product basis. We have the option to pay up to 50% of the milestones and 50%
of the buy-out right in shares of our common stock at a public offering price of $19.00 per share for gross proceeds of $185,725,000. At our request, an affiliate of Jefferies LLC, onesubject to certain limitations. Any shares, if issued, will be issued pursuant to exemptions from registration provided by Section 4(a)(2) of the underwriters inSecurities Act of 1933, as amended. The share purchase agreement contains customary terms and conditions, including holdback and indemnity provisions. Dr. Jaume Pons, our initial public offering, sold 100,000Chief Executive Officer and director, was also a stockholder of ScalmiBio, Inc. and, prior to the acquisition, a director of ScalmiBio. Dr. Pons owned 31.7% of ScalmiBio and as a result will receive his proportional share of the sharesconsideration from us as described above. In addition, out of common stock offeredthe closing proceeds, Dr. Pons received approximately $87,000 for the repayment of a note and accrued interest that Dr. Pons loaned to ScalmiBio. Given Dr. Pons’ interest in our initial public offering to certainthe ScalmiBio acquisition, the audit committee approved the acquisition of our officers,ScalmiBio under the related-party transaction policy. In addition, Dr. Pons recused himself and did not participate in the negotiation of the transaction or the subsequent approval by the board of directors employees and other persons who do business with us. The shares purchased by our executive officers and members of their households were subject to the 180-day lock-up entered into in connection with our initial public offering and the 90-day lock-up entered into in connection with our follow-on offering.ScalmiBio acquisition. Indemnification Agreements Our amended and restated certificate of incorporation contains provisions limiting the liability of the members of our board of directors, and our amended and restated bylawsBylaws provide that we will indemnify each of our officers and the members of our board of directors to the fullest extent permitted under Delaware law. Our amended and restated certificate of incorporation and amended and restated bylawsBylaws also provide our board of directors with discretion to indemnify our employees and other agents when it determines to be appropriate. In addition, we have entered into an indemnification agreement with each of our executive officers and the members of our board of directors requiring us to indemnify them. Related-Party Transaction Policy Our audit committee has the primary responsibility for reviewing and approving or disapproving “related-party transactions,” which are transactions between us and related persons in which the aggregate amount involved exceeds or may be expected to exceed $120,000 and in which a related person has or will have a direct or indirect material interest. The charter of our audit committee provides that our audit committee shall review and approve in advance any related-party transaction. Our board of directors has adopted a formal written policy providing that we are not permitted to enter into any transaction that exceeds $120,000 and in which any related person has a direct or indirect material interest without the consent of our audit committee. In approving or rejecting any such transaction, our audit committee is to consider the relevant facts and circumstances available and deemed relevant to our audit committee, including whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction.
OTHER MATTERS Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires that our executive officers and directors, and persons who own more than 10% of our common stock, file reports of ownership and changes of ownership with the SEC. Such directors, executive officers and 10% stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. In April 2022, a Form 4 for was not timely filed on behalf of Dr. Canamasas and has since been filed. SEC regulations require us to identify in this proxy statement anyone who filed a required report late during the most recent fiscal year. Based solely on our review of forms we received, or written representations from reporting persons stating that they were not required to file these forms, we believe that during our fiscal year ended December 31, 2020,2021, all executive officers, directors and greater than 10% stockholders complied with all applicable SEC filing requirements. Fiscal Year 20202021 Annual Report and SEC Filings Our financial statements for our fiscal year ended December 31, 20202021 are included in our Annual Report on Form 10-K filed with the SEC on March 18, 2021.February 28, 2022. This proxy statement and our Annual Report on Form 10-K are posted on our investor relations website at https://ir.alxoncology.com/ and are available from the SEC at its website at www.sec.gov. You may also obtain a copy of our Annual Report on Form 10-K without charge by sending a written request to ALX Oncology Holdings Inc., Attention: Investor Relations, 866 Malcolm Road, Suite 100, Burlingame,323 Allerton Avenue, South San Francisco, California 94010.94080. * * * The board of directors does not know of any other matters to be presented at the Annual Meeting. If any additional matters are properly presented at the Annual Meeting, the persons named on the enclosed proxy card will have discretion to vote the shares of common stock they represent in accordance with their own judgment on such matters. It is important that your shares of common stock be represented at the Annual Meeting, regardless of the number of shares that you hold. You are, therefore, urged to vote over the Internet or by telephone as instructed on the enclosed proxy card or execute and return, at your earliest convenience, the enclosed proxy card in the envelope that has also been provided. THE BOARD OF DIRECTORS Burlingame, California
April 29, 2021
BROADRIDGE CORPORATE ISSUER SOLUTIONS C/O ALX ONCOLOGY HOLDINGS INC. P.O. BOX 1342 BRENTWOOD, NY 11717 VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.comUse the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on June 9, 2021. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.During The Meeting - Go to www.virtualshareholdermeeting.com/ALXO2021You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALSIf you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on June 9, 2021. Have your proxy card in hand when you call and then follow the instructions.VOTE BY MAILMark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D51569-P56340 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY ALX ONCOLOGY HOLDINGS INC. For Withhold For All To withhold authority to vote for any individual All All Except nominee(s), mark "For All Except" and write the The Board of Directors recommends you vote FOR the number(s) of the nominee(s) on the line below. following: 1. Election of Directors Nominees: 01) Corey Goodman, Ph.D. 02) Jason Lettmann 03) Sophia Randolph, M.D., Ph.D. The Board of Directors recommends you vote FOR the following proposal: For Against Abstain 2. Ratification of the appointment of KPMG LLP as the independent registered public accounting firm for our fiscal year ending December 31, 2021. NOTE: The proxy holders will vote in their discretion on any other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) DateSouth San Francisco, California
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement, Annual Report and Form 10-K are available at www.proxyvote.com. D51570-P56340 ALX ONCOLOGY HOLDINGS INC. ANNUAL MEETING OF STOCKHOLDERS June 10, 2021 3:00 PM, PDT THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The stockholder(s) hereby appoint(s) Jaume Pons and Peter Garcia, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of ALX Oncology Holdings Inc. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 3:00 p.m., Pacific Time on Thursday, June 10, 2021, at www.virtualshareholdermeeting.com/ALXO2021, and any adjournment or postponement thereof. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE FOR THE BOARD OF DIRECTORS, AND FOR PROPOSAL 2. THE ABOVE NAMED PROXIES ARE AUTHORIZED TO VOTE IN THEIR DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE CONTINUED AND TO BE SIGNED ON REVERSE SIDEApril 22, 2022
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