No. )
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| ☐ | Preliminary Proxy Statement |
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| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
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| ☒ | Definitive Proxy Statement | |
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| ☐ | Definitive Additional Materials | |
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| ☐ | Soliciting Material Pursuant to §240.14a-12 | |
VIR BIOTECHNOLOGY, INC.
☒ | No fee | |||
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Title of each class of securities to which transaction applies:
Aggregate number of securities to which transaction applies:
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
Proposed maximum aggregate value of transaction:
Total fee paid:
☐ | Fee paid previously with preliminary | |||
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| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act 14a-6(i)(1) and0-11. | |||
Amount previously paid:
Form, Schedule or Registration Statement No.:
Filing party:
Date Filed:
499 Illinois Street, Suite 500
San Francisco, California 94158
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 20, 202019, 2023
Dear Stockholder:
YouOn behalf of the Board of Directors, you are cordially invited to attend the 20202023 Annual Meeting of Stockholders (the “Annual Meeting”) of Vir Biotechnology, Inc., a Delaware corporation (the “Company”“Company”). The meetingAnnual Meeting will be held on Friday, May 20, 202019, 2023, at 10:0011:30 a.m. local time atPacific Time. Due to the ongoing COVID-19 pandemic and to support the health and well-being of our offices located at 499 Illinois Street, Suite 500, San Francisco, CA 94158*employees and stockholders, the Annual Meeting will be a completely virtual meeting of the stockholders. You can attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/VIR2023 where you will be able to listen to the meeting live, submit questions and vote online. You will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials or proxy card to attend the Annual Meeting virtually.
We are holding the Annual Meeting for the following purposes:purposes, as more fully described in the accompanying proxy statement:
1. To elect the Board of Directors’ threeDirectors’ four nominees for director named herein to hold office until the 20232026 Annual Meeting of Stockholders.
2. To approve, on an advisory basis, the compensation of the Company’s named executive officers.
3. To ratify the selectionappointment by the Audit Committee of the Board of Directors of Ernst & Young LLP as ourthe Company’s independent registered public accounting firm for our fiscal year ending December 31, 2020.2023.
3. 4. To conduct any other business properly brought before the meeting.
These items of business are more fully described in the Proxy Statement accompanying this Notice.
The record date for the annual meetingAnnual Meeting is March 27, 2020.30, 2023. Only stockholders of record at the close of business on that date may vote at the meetingAnnual Meeting or any adjournment thereof.
By Order of the Board of Directors
Howard HornSung Lee
Secretary
San Francisco, California
April 6, 20207, 2023
Table of Contents
| Proxy Statement Summary | ||||||||||||
This summary highlights important information you will find in this proxy statement. As it is only a summary, please review the complete proxy statement before you vote.
| Annual Meeting Information | ||||||||||||
DATE: | Friday, May 19, 2023 | |
TIME: | 11:30 a.m. Pacific Time | |
LOCATION: | Online only at www.virtualshareholdermeeting.com/VIR2023 | |
| You | ||
RECORD DATE: | March 30, 2023 | |
| Voting Matters and | ||||||||||||
Voting Matter | Board Recommendation | Page Number for more detail | ||
Proposal 1—Election of Directors | FOR each nominee | 7 | ||
Proposal 2—Advisory Vote on Executive Compensation | FOR | 21 | ||
Proposal 3—Ratification of Appointment of Independent Registered Public Accounting Firm | FOR | 23 |
| Corporate Governance Matters | ||||||||||||
We are committed to the highest standards of ethics, business integrity and corporate governance, which we believe will ensure that our Company is managed for the long-term benefit of our stockholders. Our governance practices are designed to establish and preserve accountability of the Board of Directors and management, provide a structure that allows the Board to set objectives and monitor performance, ensure the efficient use and accountability of resources and enhance stockholder value. Please see “Information Regarding the Board of Directors and Corporate Governance” for more information.
Our commitment to good corporate governance is illustrated by the following practices:
| ● | Board independence (9 out of 11 directors are |
| ● | Independent Board Chair |
| ● | Independent directors regularly meet in executive sessions without management present |
| ● | 100% independent Audit, Compensation and Nominating & Governance Committees |
| ● | Board refreshment practices |
| ● | Annual Board and committee self-assessments |
| ● | Strong corporate governance guidelines and policies |
| ● | Board diversity (female and minority directors comprise 45% of our current Board) |
| ● | Stock ownership guidelines for directors and executive management |
| ● | Well-established Board strategic and risk oversight function |
ESG Statement
We aspire to create a world without infectious disease. Guided by science, we relentlessly build on our immunologic expertise and technologies in pursuit of transformative medicines for infectious diseases. Our innovations stem from courage and bold ideas. We approach each day with a sense of optimism and humility, recognizing that our strength resides in the diversity of our journeys and the opportunity to learn from each other.
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Our commitment to Environmental, Social, Governance (ESG) is deeply embedded in our culture and is based on humanitarian principles and practices. We are sensitiveacutely aware of our interconnectedness, and we take responsibility for doing our part to reduce our impact on the environment, to foster a diverse and inclusive workforce and to uphold the highest legal, economic and ethical standards.
| ● | Environment: We recognize the emerging trends of climate change and are dedicated to evaluating practices that reduce our environmental impact, such as recycling, reducing waste and saving energy. |
| ● | Social: We fiercely value diversity of thought and are passionately committed to maintaining a diverse and inclusive culture that extends to our employees, patients, communities and collaborators around the world. |
| ● | Governance: We adhere to strong governance practices and hold ourselves accountable to our high ethical standards. We uphold responsible business practices. |
| Our Director Nominees | ||||||||||||
Proposal 1 — Election of Directors
Each Class I director nominee is listed below, and you can find additional information in the section titled “Proposal 1—Election of Directors” beginning on page 7.
| Name | Age | Director Since | Board Committees | |||
Robert More | 55 | 2016 | Compensation (Chair) and Audit | |||
Janet Napolitano | 65 | 2020 | Compensation and Nominating and Corporate Governance | |||
Vicki Sato, Ph.D. | 74 | 2016 | Nominating and Corporate Governance and Science and Technology | |||
Elliott Sigal, M.D., Ph.D. | 71 | 2020 | Compensation and Science and Technology |
| Executive Compensation Matters | ||||||||||||
Proposal 2 – Advisory Vote on Executive Compensation
The Board of Directors recommends that stockholders vote to approve, on an advisory basis, the compensation paid to the Company’s named executive officers as described in this proxy statement (the “say-on-pay” vote). Detailed information about the compensation paid and awarded to our named executive officers can be found beginning on page 21.
Our executive compensation programs are designed to attract, motivate and retain our executive officers, who are critical to our success. Highlights of our executive compensation best practices follow.
What We Do | What We Don’t Do | |||||||
| Compensation Committee of Independent Directors |
| No Guaranteed Compensation | |||||
| Risk Analysis |
| No Hedging or Pledging our Common Stock | |||||
| Multi-Year Vesting |
| No Tax Reimbursement Payments | |||||
| Annual Compensation Review |
| No Special Health or Welfare Benefits and Limited Perquisites | |||||
| Double-Trigger Change-in-Control |
| No Special Retirement Benefits | |||||
| Clawback Policy and Equity Ownership Guidelines | |||||||
| Independent Compensation Consultant | |||||||
| Our Auditors | ||||||||||||
Proposal 3 – Ratification of Appointment of Independent Registered Public Accounting Firm
You are being asked to vote to ratify the appointment of Ernst & Young LLP as our independent registered public health and travel concerns our management, directors and stockholders may have regardingaccounting firm for the evolving COVID-19 pandemic andyear ending December 31, 2023. Detailed information about this proposal can be found beginning on page 23.
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YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the related protocols that federal, state and local governments may impose. As a result, whileAnnual Meeting, we intendurge you to holdsubmit your vote via the meeting in person, we may decideInternet, telephone or mail as soon as possible to holdensure your shares are represented. For additional instructions on voting by the meeting in a different locationInternet or solely by means of remote communication (i.e., a virtual-only meeting). Please retain the control numbers fromtelephone, please refer to your proxy card so thator Notice of Internet Availability of Proxy Materials. Returning the proxy does not deprive you can accessof your right to attend the meeting if it is convertedAnnual Meeting and to a virtual-only meeting. Any such change will be announced via a press release that will be filed as additional soliciting material withvote your shares at the Securities and Exchange Commission as soon as reasonably practicable before the meeting.Annual Meeting.
499 Illinois Street, Suite 500
San Francisco, California 94158
PROXY STATEMENT
FOR THE 20202023 ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 20, 202019, 2023
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Why did I receive a notice regarding the availability of proxy materials on the internet?Internet?
Pursuant to rules adopted by the Securities and Exchange Commission (the “SEC”“SEC”), we have elected to provide access to our proxy materials over the internet.Internet. Accordingly, we have sent you a Notice of Internet Availability of Proxy Materials (the “Notice”“Notice”) because the Board of Directors (sometimes referred to as the “Board”“Board”) of Vir Biotechnology, Inc. (sometimes referred to as “we,“we,” “us,“us,” “our,“our,” the “Company”“Company” or “Vir”“Vir”) is soliciting your proxy to vote at the 20202023 Annual Meeting of Stockholders (the “Annual Meeting”), including at any adjournments or postponements of the meeting. The Annual Meeting will be held virtually on Friday, May 19, 2023, at 11:30 a.m. Pacific Time. You can attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/VIR2023 where you will be able to listen to the meeting live, submit questions and vote online. You will need the 16-digit control number included on your Notice or proxy card in order to be able to vote your shares or submit questions via the Internet during the Annual Meeting. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the internetInternet or to request a printed copy may be found in the Notice.
We intend to mail the Notice on April 8, 20207, 2023, to all stockholders of record entitled to vote at the annual meeting.Annual Meeting.
Will I receive any other proxy materials by mail?
We may send you a proxy card, along with a second Notice, on or after April 18, 2020.2023.
HowWhy are we holding a virtual Annual Meeting?
This year we are using a virtual format for our Annual Meeting, which will be conducted via live audio webcast, and online stockholder tools. Due to the ongoing public health impact of the COVID-19 pandemic, we believe a virtual format helps to facilitate stockholder attendance and participation by enabling stockholders to participate fully, and equally, from any location around the world without person-to-person contact, at no cost (other than any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies). A virtual Annual Meeting makes it possible for more stockholders (regardless of size, resources or physical location) to have direct access to information more quickly, while saving the Company and our stockholders time and money. We also believe that the online tools we have selected will increase stockholder communication. For example, the virtual format allows stockholders to communicate with us during the Annual Meeting so they can ask questions of the Board of Directors or management. During the Annual Meeting, we may answer questions submitted during the Annual Meeting, to the extent relevant to the business of the Annual Meeting, as time permits.
What do I need to do to attend the annual meeting?Annual Meeting?
The meetingYou will be heldable to attend the Annual Meeting online, submit your questions during the meeting and vote your shares electronically at the meeting by visiting www.virtualshareholdermeeting.com/VIR2023. To participate in the Annual
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Meeting, you will need the 16-digit control number included on Wednesday,your Notice or proxy card. The Annual Meeting webcast will begin promptly at 11:30 a.m. Pacific Time on May 20, 2020 at 10:00 a.m. local time at our offices located at 499 Illinois Street, Suite 500, San Francisco, CA 94158. Directions19, 2023. We encourage you to access the Annual Meeting prior to the annual meeting may be foundstart time. Online check-in will begin at www.vir.bio. Information on how to vote in person at11:15 a.m. Pacific Time, and you should allow ample time for the annual meeting is discussed below.
Please note that while we intend to hold the meeting in person at the location set forth above, we are sensitive to the public health and travel concerns our management, directors and stockholders may have regarding the evolving COVID-19 pandemic and the related protocols that federal, state and local governments may impose. As a result, we may decide to hold the meeting in a different location or solely by means of remote communication (i.e., a virtual-only meeting). Please retain the control numbers from your proxy card so that you can access the meeting if it is converted to a virtual-only meeting. Any such change will be announced via a press release that will be filed as additional soliciting material with the SEC as soon as reasonably practicable before the meeting.check-in procedures.
Who can vote at the annual meeting?Annual Meeting?
Only stockholders of record at the close of business on March 27, 202030, 2023, will be entitled to vote at the annual meeting.Annual Meeting. On this record date, there were 109,803,505133,930,936 shares of common stock outstanding and entitled to vote. A list of our stockholders of record will be open for examination by any stockholder beginning ten days prior to the Annual Meeting. If you would like to view the list, please contact our Secretary to make arrangements by calling (415) 906-4324 or writing to him at Attn: Secretary, 499 Illinois Street, Suite 500, San Francisco, California 94158.
Stockholder of Record: Shares Registered in Your Name
If on March 27, 2020,30, 2023, your shares were registered directly in your name with Vir’sVir’s transfer agent, Computershare Trust Company, N.A., then you are a stockholder of record. As a stockholder of record, you may vote in personlive online at the meetingAnnual Meeting or vote by proxy. Whether or not you plan to attend the meeting,Annual Meeting, we urge you to fill out and return the proxy card that may be mailed to you or vote by proxy over the telephone or on the internetInternet as instructed below to ensure your vote is counted.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
If on March 27, 202030, 2023, your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name”“street name” and the Notice is being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the annual meeting.Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your account. You are also invited to attend the annual meeting.Annual Meeting. However, since you are not the stockholder of record, you may not vote your shares in person atlive online during the meetingAnnual Meeting unless you request and obtain a valid proxy from your broker or other agent.
There are twothree matters scheduled for a vote:
Proposal 1: Election of the Board’s threeBoard’s four nominees for director named herein to hold office until the 20232026 Annual Meeting of Stockholders; and
Proposal 2: To approve, on an advisory basis, the compensation of our named executive officers; and
Proposal 3: Ratification of the selectionappointment by the Audit Committee of the Board of Directors of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2020.2023.
What is the recommendation of the Board on each of the matters scheduled to be voted on at the Annual Meeting?
The Board recommends that you vote:
| • | “FOR” the election of the Board’s four nominees for director named herein to hold office until the 2026 Annual Meeting of Stockholders (Proposal 1); |
| • | On an advisory basis, “FOR” the compensation of our named executive officers (Proposal 2); and |
| • | “FOR” the ratification of the appointment by the Audit Committee of the Board of Directors of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2023 (Proposal 3). |
What if another matter is properly brought before the meeting?Annual Meeting?
The Board of Directors knows of no other matters that will be presented for consideration at the annual meeting.Annual Meeting. If any other matters are properly brought before the meeting,Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote on those matters in accordance with their best judgment.
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How do I vote?
You may either vote “For” all the nominees“For” any nominee to the Board of Directors or you may “Withhold”“Withhold” your vote for any nominee you specify. For each of the other matters to be voted on, you may vote “For”“For” or “Against”“Against” or abstain from voting.
The procedures for voting are fairly simple:
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote in personlive online at the annual meeting,Annual Meeting, vote by proxy over the telephone, vote by proxy through the internetInternet or vote by proxy using a proxy card that you may request or that we may elect to deliver at a later time. Whether or not you plan to attend the meeting,Annual Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the meetingAnnual Meeting and vote in personlive online even if you have already voted by proxy.
To vote in person, come to the annual meeting and we will give you a ballot when you arrive.
| • | To vote live at the Annual Meeting, attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/VIR2023, where stockholders may vote and submit questions during the meeting (have your Notice or proxy card in hand when you visit the website). You will need the 16-digit control number included on your Notice or proxy card in order to be able to vote your shares during the Annual Meeting. |
| • | To vote over the telephone, dial toll-free 1-800-690-6903 and follow the recorded instructions. You will be asked to provide your 16-digit control number from your Notice or proxy card. Your telephone vote must be received by 11:59 p.m., Eastern Time, on May 18, 2023, to be counted. |
| • | To vote through the Internet, go to www.proxyvote.com and follow the on-screen instructions to complete an electronic proxy card or scan the QR code on your Notice with your smartphone. You will be asked to provide your 16-digit control number from your Notice or proxy card. Your Internet vote must be received by 11:59 p.m., Eastern Time, on May 18, 2023, to be counted. |
To vote using the proxy card, simply complete, sign and date the proxy card that may be delivered to you and return it promptly in the envelope provided. If you returnwe receive your signed proxy card to us before the annual meeting,Annual Meeting, we will vote your shares as you direct.
To vote over the telephone, dial toll-free 1-800-690-6903 and follow the recorded instructions. You will be asked to provide our number and control number from the Notice. Your telephone vote must be received by 11:59 p.m., Eastern Time, on May 19, 2020 to be counted.
To vote through the internet, go to www.proxyvote.com and follow the on-screen instructions to complete an electronic proxy card or scan the QR code on your proxy notice with your smartphone. You will be asked to provide our number and control number from the Notice. Your internet vote must be received by 11:59 p.m., Eastern Time, on May 19, 2020 to be counted.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a Notice containing voting instructions from that organization rather than from Vir. Simply follow the voting instructions in the Notice to ensure that your vote is counted. To vote in personlive online at the annual meeting,Annual Meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker, bank or bankother agent included with these proxy materials, or contact your broker, bank or bankother agent to request a proxy form.
Internet proxy voting is being provided to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet |
On each matter to be voted upon, you have one vote for each share of common stock you owned as of the close of business on March 27, 2020.30, 2023.
What happens if I do not vote?
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record and do not vote by completing your proxy card, by telephone, through the internetInternet or in personlive online at the annual meeting,Annual Meeting, your shares will not be voted.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner and do not instruct your broker, bank or other agent how to vote your shares, the question of whether your broker or nominee will still be able to vote your shares depends on whether the New York Stock Exchange (“NYSE”
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(“NYSE”) deems the particular proposal to be a “routine”“routine” matter. Brokers and nominees can use their discretion to vote “uninstructed”“uninstructed” shares with respect to matters that are considered to be “routine,“routine,” but not with respect to “non-routine”non-routine” matters. Under the rules and interpretations of the NYSE, “non-routine”non-routine” matters are matters that may substantially affect the rights or privileges of stockholders, such as mergers, stockholder proposals, elections of directors (even if not contested), executive compensation (including any advisory stockholder votes on executive compensation and on the frequency of stockholder votes on executive compensation), and certain corporate governance proposals, even if management-supported. Accordingly, your broker or nominee may not vote your shares on ProposalProposals 1 or 2 without your instructions, but may vote your shares on Proposal 23 even in the absence of your instruction.
If you are a beneficial owner of shares held in street name, in order to ensure your shares are voted in the way you would prefer, you must provide voting instructions to your broker, bank or other agent by the deadline provided in the materials you receive from your broker, bank or other agent.
What if I return a proxy card or otherwise vote but do not make specific choices?
If you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, as applicable, “For”“For” the election of the threefour nominees for director as described in Proposal 1, “For” the approval of the compensation of our named executive officers as described in Proposal 2 and “For”“For” the ratification of the selectionappointment by the Audit Committee of the Board of Directors of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2020.2023, as described in Proposal 3. If any other matter is properly presented at the meeting,Annual Meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using his or hertheir best judgment.
Who is paying for this proxy solicitation?
We will pay for the entire cost of soliciting proxies. In addition to these proxy materials, our directors and employees may also solicit proxies in person, by telephone or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.
What does it mean if I receive more than one Notice?
If you receive more than one Notice, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions on each of the Notices to ensure that all of your shares are voted.
Can I change my vote after submitting my proxy?
Stockholder of Record: Shares Registered in Your Name
Yes. You can revoke your proxy at any time before the final vote at the meeting.Annual Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of the following ways:
You may submit another properly completed proxy card with a later date.
You may grant a subsequent proxy by telephone or through the internet.Internet.
You may send a timely written notice that you are revoking your proxy to our Secretary at 499 Illinois Street, Suite 500, San Francisco, California 94158.
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You may attend the annual meeting and vote in person. Simply attendingonline at the meetingAnnual Meeting (although attendance at the Annual Meeting will not, by itself, revoke your proxy.
proxy). Your most current proxy card or telephone or internetInternet proxy is the one that is counted.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank.
When are stockholder proposals and director nominations due for next year’s annual meeting?
ToStockholder proposals submitted pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and intended to be consideredincluded in next year’s proxy materials, must be received by our Secretary no later than December 9, 2023, to be eligible for inclusion in next year’sour proxy materials, your proposal must be submitted in writing by December 9, 2020,statement and form of proxy relating to Attn: Secretary, 499 Illinois Street, Suite 500, San Francisco, California 94158. that meeting.
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If you wish to submit a proposal (including a director nomination) at thenext year’s annual meeting that is not to be included in next year’syear’s proxy materials, you must do so between January 20, 20212024 and February 19, 2021.2024. You are also advised to review our Amended and Restated Bylaws (“Bylaws”), which contain additional requirements relating to advance notice of stockholder proposals and director nominations.nominations, including the requirements of Rule 14a-19 under the Exchange Act.
How are votes counted?
Votes will be counted by the inspector of election appointed for the meeting,Annual Meeting, who will separately count, for the proposal to elect directors, votes “For,“For,” “Withhold”“Withhold” and broker non-votes,non-votes; with respect to Proposal 2 regarding the advisory vote to approve executive compensation, votes “For,” “Against,” abstentions and broker non-votes; and for the proposal to ratify the Audit Committee’s selectionCommittee’s appointment of Ernst & Young LLP as our independent registered public accounting firm, votes “For“For,” and “Against, “Against,” abstentions and, if applicable, broker non-votes. Abstentions will be counted towards the vote total for Proposal 2 and Proposal 3 and will have the same effect as “Against” votes.“Against” votes in each case. Broker non-votes will be counted towards the presence of a quorum but will not be counted towards the vote total for any proposal.
What are “broker non-votes”?
As discussed above, when a beneficial owner of shares held in “street name”“street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed by the NYSE to be “non-routine,” the broker or nominee cannot vote the shares. These unvoted shares are counted as “broker “broker non-votes.”
How many votes are needed to approve each proposal?
For the election of directors, the threefour nominees receiving the most “For”“For” votes from the holders of shares present in personby remote communication at the Annual Meeting or represented by proxy and entitled to vote on the election of directors will be elected. Only votes “For”“For” will affect the outcome.
To be approved, on an advisory basis, Proposal 2, the advisory vote on the compensation paid to the Company’s named executive officers, must receive “For” votes from the holders of a majority of shares present by remote communication at the Annual Meeting or by proxy and entitled to vote on the matter. If you “Abstain” from voting, it will have the same effect as an “Against” vote. Broker non-votes will have no effect.
To be approved, Proposal 3, ratification of the selectionAudit Committee’s appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2020,2023, must receive “For”“For” votes from the holders of a majority of shares present in personby remote communication at the Annual Meeting or represented by proxy and entitled to vote on the matter. If you “Abstain”“Abstain” from voting, it will have the same effect as an “Against”“Against” vote. Broker non-votes, if applicable, will have no effect. Brokers generally have discretionary authority to vote on the ratification of the Audit Committee’s appointment of Ernst & Young LLP as our independent registered public accounting firm, thus we do not expect any broker non-votes on Proposal 3.
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding at least a majority of the outstanding shares entitled to vote are present by remote communication at the meeting in personAnnual Meeting or represented by proxy. On the record date, there were 109,803,505133,930,936 shares outstanding and entitled to vote. Thus, the holders of 54,901,75466,965,469 shares must be present in personby remote communication or represented by proxy at the meetingAnnual Meeting to have a quorum.
Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee)agent) or if you vote in personlive online at the meeting.Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, either the chairperson of the Annual Meeting or the holders of a majority of shares present by remote communication at the meeting in personAnnual Meeting or represented by proxy may adjourn the meeting to another date.
How can I find out the results of the voting at the annual meeting?Annual Meeting?
Preliminary voting results will be announced at the annual meeting.Annual Meeting. In addition, final voting results will be published in a current report on Form 8-K that we expect to file within four business days after the annual meeting.Annual Meeting. If final voting results
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are not available to us in time to file a Form 8-K within four business days after the meeting,Annual Meeting, we intend to file a Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional Form 8-K to publish the final results.
Who should I contact if I have any questions?
If you have any questions or require any assistance with voting your shares, please contact the bank, broker or other agent holding your shares, or our Investor Relations department at (415) 915-4228 or at ir@vir.bio.
Who do I contact if I experience technical difficulties trying to access or during the Annual Meeting?
If you have technical difficulties when accessing the Annual Meeting, there will be technicians available to assist you. If you encounter any technical difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Annual Meeting log-in page.
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PROPOSAL 1
Election of DirectorsELECTION OF DIRECTORS
OurThe Board of Directors is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors, and each class has a three-year term. Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified.
OurThe Board of Directors currently consists of nine11 members. There are threefour directors in Class I, whose term of office expires at the Annual Meeting: Kristina Burow, Robert More, andJanet Napolitano, Vicki Sato, Ph.D. Ms. Burow, and Elliott Sigal, M.D., Ph.D. Mr. More and Dr. Sato were previously elected to ourthe Board by our stockholders andstockholders. In connection with the increase in the size of the Board from 9 to 10 members in July 2020, Dr. SatoSigal was appointed to ourthe Board by our then currentthe other then-serving directors. In connection with a newly created vacancy on the Board, following the resignation of Directors.a director, in August 2020, Ms. Burow andNapolitano was appointed to the Board by the other then-serving directors. Mr. More, Ms. Napolitano, Dr. Sato and Dr. Sigal have been nominated for re-election and Dr. Sato has been nominated for election at the Annual Meeting. Proxies may not be voted for a greater number of persons than the number of nominees named in this proxy statement. Ms. Burow, Mr. More, Ms. Napolitano, Dr. Sato and Dr. SatoSigal are each current directors and were each recommended for election to the Board as Class I directors at the Annual Meeting by the Nominating and Corporate Governance Committee of the Board. Each nominee for director is to be elected at the Annual Meeting to serve for a three-year term until our 20232026 Annual Meeting of Stockholders, and until his or hertheir successor is duly elected and qualified, or until his or hertheir earlier death, resignation or removal. It is our policy to encourage directors and nominees for director to attend the Annual Meeting. Five of the then-serving directors attended the Company’s 2022 Annual Meeting of Stockholders.
Directors are elected by a plurality of the votes of the holders of shares present in personby remote communication at the Annual Meeting or represented by proxy and entitled to vote aton the Annual Meeting.election of directors. Accordingly, the threefour nominees receiving the most “For” votes (among votes properly cast at the Annual Meeting or by proxy) will be elected. If no contrary indication is made, shares represented by executed or authenticated proxies will be voted “For” the election of the threefour nominees named above or, if any nominee becomes unavailable for election as a result of an unexpected occurrence, “For” the election of a substitute nominee designated by ourthe Board of Directors. Each nominee has agreed to serve as a director if elected and we have no reason to believe that eitherany nominee will be unable to serve.
The Nominating and Corporate Governance Committee seeks to assemble a Board of Directors that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise and high-level management experience necessary to oversee and direct our business. The Nominating and Corporate Governance Committee also seeks to attain diversity and balance among directors of race, gender, geography, thought, viewpoints and backgrounds. To those ends, the Nominating and Corporate Governance Committee has identified and evaluated nominees in the broader context of the Board of Directors’ overall composition, with the goal of recruiting members who complement and strengthen the skills of other members through diversity and who also exhibit integrity, collegiality, sound business judgment and other qualities that the Nominating and Corporate Governance Committee views as critical to effective functioning of the Board of Directors. The brief biographies below include information, as of the date of this proxy statement, regarding the specific and particular experience, qualifications, attributes or skills of each director/nominee that led the Nominating and Corporate Governance Committee to believe that that nominee should continue to serve on the Board.Board of Directors. However, each of the members of the Nominating and Corporate Governance Committee may have a variety of reasons why they believe a particular person would be an appropriate nominee for the Board of Directors, and these views may differ from the views of other members.
The following is a brief biography of each nominee, each director whose term will continue after the annual meetingAnnual Meeting and each of our executive officers.
Nominees for Election for a Three-Year Term Expiring at the 20232026 Annual Meeting
Kristina BurowRobert More, 46,55, has served as a member of our Board of Directors since December 2016. Ms. Burow has served as Managing Director with ARCH Venture Partners since November 2011 and previously held positions of increasing responsibility at ARCH from August 2002 to November 2011. Ms. Burow also currently serves on the Board of Directors of the following companies: Gossamer Bio, Inc., a public biopharmaceutical company, Vividion Therapeutics, Inc. (“Vividion”), a biotechnology company, Lycera Corp., a biopharmaceutical company, BlackThorn Therapeutics, Inc., a biopharmaceutical company, Metacrine, Inc., a biotechnology company, Scholar Rock Holding Corporation, a public biotechnology company, Unity Biotechnology, a public biotechnology company, Beam Therapeutics Inc., a biotechnology company, Pretzel Therapeutics, Inc., a biotechnology company, Rome Therapeutics, Inc., a biotechnology company, Boragen, Inc., an agtechnology company, AgBiome Inc., a biotechnology company, and Sienna Biopharmaceuticals, Inc., a public pharmaceutical company. She previously was a co-founder and member of the Board of Directors of Receptos, Inc., a public pharmaceutical company, prior to its acquisition by Celgene Corporation, and of Sapphire Energy, Inc., an energy
company. Ms. Burow has participated in a number of other ARCH portfolio companies including Kythera Biopharmaceuticals, Inc., a biotechnology company acquired by Allergan plc, and Ikaria Inc., a biotechnology company acquired by Madison Dearborn Partners LLC. Prior to joining ARCH, Ms. Burow was an associate with the Novartis BioVenture Fund in San Diego and an early employee at the Genomics Institute of the Novartis Research Foundation. Ms. Burow received her B.S. in Chemistry from the University of California, Berkeley, an M.A. in Chemistry from Columbia University and an M.B.A. from the University of Chicago.
Our Nominating and Corporate Governance Committee and Board of Directors believe Ms. Burow is qualified to serve on our Board of Directors due to her extensive experience serving on the Board of Directors of clinical-stage biotechnology companies and her investment experience in the life sciences industry.
Robert More, 52, has served as a member of our Board of Directors since September 2016. Since October 2016, Mr. More has served as Managing Director of Alta Partners, a venture capital firm. From July 2013 to May 2015, Mr. More served as Senior Advisor for the Bill & Melinda Gates Foundation, a private foundation that supports initiatives in education, world health and reducing poverty, and led its Global Health Venture Initiative. He served as a General Partner of venture capital firms Frazier Healthcare Ventures and Domain Associates from September 2008 to June 2013 and from June 1996 to July
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2008, respectively. Mr. More currently serveshas served on the board of directors of Sienna Biopharmaceuticals,Tyra Biosciences, Inc., a public pharmaceutical company.U.S. publicly traded biotechnology company, since 2018. He also currently serves on the boardboards of directors of the following private biotechnology companies: Affinivax, Inc., a biotechnology company, eGenesis, a biotechnology company, Qihan Biotech a biotechnology company,and Sirenas, LLC, a biotechnology company, Tyra Biosciences, Inc., a biotechnology company, and as an advisor on Liquiglide,for LiquiGlide, Inc., a private biotechnology company. Mr. More previously served on the boardboards of directors of the following publicU.S. publicly traded companies: Achaogen, Inc., a biopharmaceutical company, Carticept Medical, Inc., a medical device company, Cartiva, a medical device company, Neothetics Inc., a pharmaceutical company, Glaukos Corporation, a medical technology company, and IntraLase Corp., a medical device company acquired by Advanced Medical Optics in 2007.2007, and Sienna Biopharmaceuticals, Inc., a clinical-stage biopharmaceutical company. He also previously served on the boardboards of directors of the following private life sciences companies: Carticept Medical, Inc., Cartiva, Inc., ESP Pharma, Inc., Proxima Therapeutics, Inc., NovaCardia, Inc., Esprit Pharma, Inc. and Oceana Therapeutics, Inc. Mr. More was a founding member of the board of directors of the Kauffman Fellows Program and previously served on the boardboards of directors of One Revolution and The Foundation for Innovative New Diagnostics (FIND). Mr. More currently serves on one of the governing boards of the Biotechnology Innovation Organization (BIO). He received his B.S. in Biology from Middlebury College and an M.B.A. from the Darden School of Business Administration at the University of Virginia.
OurThe Nominating and Corporate Governance Committee and Board of Directors believe that Mr. More is qualified to serve on ourthe Board of Directors due to his experience serving on the Boardboards of Directorsdirectors of clinical-stage biotechnology companies, his extensive experience as a director of public companies and his investment experience in the life sciences industry.
Janet Napolitano, 65, has served on the Board of Directors since August 2020. Ms. Napolitano served as President of the University of California from September 2013 until her departure in August 2020. Prior to her time serving as the President of the University of California, she served as the U.S. Secretary of Homeland Security from 2009 to 2013, as Governor of the state of Arizona from 2003 to 2009, as Attorney General of Arizona from 1998 to 2003 and as U.S. Attorney for the District of Arizona from 1993 to 1997. In 2010, Ms. Napolitano was awarded the University of Virginia’s Thomas Jefferson Foundation Medal for law. In 2014, Ms. Napolitano was appointed as a tenured faculty member of the University of California Berkeley’s Goldman School of Public Policy. In 2015, Ms. Napolitano was elected to the American Academy of Arts and Sciences, and in 2017, she was inducted into the American Philosophical Association. Ms. Napolitano currently serves on the Council of the American Law Institute and has served on the board of directors of Zoom Video Communications, Inc., a U.S. publicly traded communications technology company, since November 2020 and the Council on Foreign Relations. Ms. Napolitano holds a B.S. in political science (summa cum laude) from Santa Clara University where she was a Truman Scholar and the university’s first female valedictorian and a J.D. from the University of Virginia School of Law.
The Nominating and Corporate Governance Committee and Board of Directors believe Ms. Napolitano is qualified to serve on the Board of Directors due to her extensive leadership experience in running large research institutions and in numerous elected government positions.
Vicki Sato, Ph.D., 71,74, has served as Chairman of ourthe Board of Directors since December 2016. She was a professor of management practice at Harvard Business School from September 2006 to July 2017 and was a professor in the Department of Molecular and Cell Biology at Harvard University from July 2005 until October 2015. Previously, she served as President of Vertex Pharmaceuticals, Inc. (“Vertex”), a publicly-tradedU.S. publicly traded biotechnology company, which she joined in 1992. Prior to becoming President of Vertex, she was the Chief Scientific Officer and Senior Vice President of Research and Development. Prior to joining Vertex, Dr. Sato served as Vice President of Research at Biogen.Biogen Inc., a U.S. publicly traded biopharmaceutical company (“Biogen”). Dr. Sato is a member ofserves on the boardboards of directors of the following publicU.S. publicly traded companies: Bristol Myers Squibb Company, BorgWarner,Allogene Therapeutics, Inc., a biotechnology company, and Denali Therapeutics, Inc., a biotechnology company, and previously served on the boards of directors of Bristol Meyers Squibb Company, a global biopharmaceutical company (“BMS”), BorgWarner, Inc., a multinational automotive supplier, Syros Pharmaceuticals,Pharmaceutical, a biotechnology company, PerkinElmer, Inc., a life sciences diagnostics, discovery and analytical solutions company, and Akouos, Inc., a precision genetic medicine company. Dr. Sato received her A.B. in Biology from Radcliffe College and her A.M. and Ph.D. in Biology from Harvard University. She conducted her postdoctoral work at both the University of California, Berkeley and Stanford Medical Center.
OurThe Nominating and Corporate Governance Committee and Board of Directors believe Dr. Sato is qualified to serve on ourthe Board of Directors due to her experience as a senior executive and as a director of several life sciences companies, and because of her knowledge of our industry.
Elliott Sigal, M.D., Ph.D., 71, has served on the Board of Directors since July 2020. Dr. Sigal currently serves as a senior advisor to the healthcare team of the life sciences venture firm New Enterprise Associates and consults for select
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biopharmaceutical companies. Previously, Dr. Sigal served as Chief Scientific Officer and President of Research & Development of BMS from October 2004 until his retirement in June 2013 and served on the board of directors from March 2011 to June 2013. Dr. Sigal joined BMS in 1997 and held positions of increasing responsibility in drug discovery and development and was a member of the executive committee from September 2001 through June 2013. Prior to BMS, he was Vice President of R&D and Chief Executive Officer for the genomics firm Mercator Genetics Inc. Dr. Sigal has served on the boards of directors for Adaptimmune Therapeutics plc, a U.S. publicly traded clinical-stage biopharmaceutical company, since 2014, Surface Oncology, Inc., a U.S. publicly traded immuno-oncology company, since 2018, Affinia Therapeutics Inc., a private preclinical stage gene therapy company, since 2020 and Tessera Therapeutics, a private biotechnology company, since 2021. In addition, Dr. Sigal co-chairs the Scientific Advisory Board for Amgen Inc., a U.S. publicly traded biopharmaceutical company (“Amgen”), and is a member of the Scientific Steering Committee for the Sean Parker Institute for Cancer Immunology. Dr. Sigal previously served as a director of Spark Therapeutics, Inc. and the Mead Johnson Nutrition Company. Dr. Sigal holds B.S., M.S. and Ph.D. degrees in industrial engineering from Purdue University and an M.D. from the University of Chicago. He completed his training in internal medicine and pulmonary medicine at University of California, San Francisco (“UCSF”). He received his research training at the Cardiovascular Research Institute at UCSF, where he served on the faculty of the UCSF Department of Medicine.
The Nominating and Corporate Governance Committee and Board of Directors believe Dr. Sigal is qualified to serve on the Board of Directors due to his extensive experience in the life sciences industry and his extensive leadership experience.
The Board of Directors Recommends
A Vote “For” Each Named Nominee.
Directors Continuing in Office Until the 20212024 Annual Meeting
Marianne De Backer, MSc, Ph.D., MBA, 54, has served as our Chief Executive Officer and a member of the Board of Directors since April 2023. From September 2019 to March 2023, Dr. De Backer served as Executive Vice President, Head of Pharmaceuticals Strategy, Business Development and Licensing/Open Innovation, and a member of the Executive Committee for Bayer Pharmaceuticals, a multinational pharmaceutical and biotechnology company. Previously, from 1991 through 2019, she was at Johnson & Johnson, a pharmaceutical company, where she most recently held global Business and Corporate Development roles including the position of Vice President of M&A Operations and Divestitures globally for the Pharmaceuticals Group and head of Infectious Diseases & Vaccines Business Development. Prior to that she led a commercial business unit in Europe as well as drug discovery research in both Europe and the United States. Dr. De Backer currently serves as a non-executive Director on the Board of Directors of the Gladstone Foundation, a nonprofit organization, and Kronos Bio, Inc.*, a U.S. publicly traded biotechnology company. Dr. De Backer previously served on the board of directors of Arrowhead Pharmaceuticals Inc., a U.S. publicly traded biotechnology company, from 2019 until April 2023. Dr. De Backer holds a Master in molecular biology from the Vrije Universiteit Brussels, a Master in engineering and biochemistry and a Ph.D. in biotechnology from the Ghent University, Belgium and an MBA from Erasmus University, Rotterdam.
The Nominating and Corporate Governance Committee and Board of Directors believe Dr. De Backer is qualified to serve on the Board of Directors due to her extensive scientific training, business acumen, significant knowledge and experience in the biotechnology, healthcare and pharmaceutical industries and the perspective and experience she brings to the role of Vir’s Chief Executive Officer.
| * | On January 21, 2023, Dr. De Backer notified Kronos Bio, Inc. of her decision to resign from the Board of Directors. The effective date of Dr. De Backer’s resignation will be June 23, 2023. |
Robert Nelsen, 56,59, has served as a member of ourthe Board of Directors since April 2016. Mr. Nelsen co-founded ARCH Venture Partners, L.P., a venture capital firm (“ARCH Venture Partners”), in 1986 and has served as a Managing Director since 1994. Mr. Nelsen has served on the boardboards of directors of Denali Therapeutics,Lyell Immunopharma, Inc. since May 2015, UnitySeptember 2018, Sana Biotechnology, Inc. since November 2011October 2018 and Karuna Therapeutics,Prime Medicine, Inc. since AugustSeptember 2020, each a U.S. publicly traded biotechnology company. Mr. Nelsen has served as the Chairman and as a member of the boards of directors of Hua Medicine, Inc., a drug development company, since April 2010 and Brii Biosciences, Inc., a biotechnology company, since June 2018, each a public biotechnologyHong Kong publicly listed company, and currently serves on the boardboards of directors of a number of private companies. Mr. Nelsen previously served on the boardboards of directors of a number of publicU.S. publicly traded biotechnology companies, including Denali Therapeutics, Inc., from 2015 to June 2022, Karuna Therapeutics, Inc. from 2018 to June 2021, Beam Therapeutics, Inc. from 2017 to May 2021, Unity Biotechnology, Inc. from 2011 to December 2020, Agios Pharmaceuticals, Inc. from 2007 to June 2017, Fate Therapeutics, Inc. from 2007 to June 2014, Syros Pharmaceuticals, Inc.
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from 2012 to June 2018, Sage Therapeutics, Inc. from 2013 to March 2016, Juno Therapeutics, Inc. from 2013 to March 2018 (until it was acquired by Celgene Corporation), Bellerophon Therapeutics, Inc. from February 2014 to November 2015, Sienna Biopharmaceuticals, Inc. from October 2015 to September 2018 and Gossamer Bio, Inc. from January 2018 to December 2018 (prior to its initial public offering). and on the board of directors of Revolution Healthcare Acquisition Corp., a special purpose acquisition company, from 2021 to April 2022. He previously served as a trustee of the Fred Hutchinson Cancer Research Institute and the Institute for Systems Biology, and was a member of the board of directors of the National Venture Capital Association. Mr. Nelsen received an M.B.A. from the University of Chicago and a B.S. from the University of Puget Sound with majors in Economics and Biology.Biology and an M.B.A. from the University of Chicago.
OurThe Nominating and Corporate Governance Committee and Board of Directors believe that Mr. Nelsen is qualified to serve on ourthe Board of Directors due to his venture capital experience in the biotechnology industry.
Robert Perez, 55,58, has served as a member of ourthe Board of Directors since January 2017. Mr. Perez has been an Operating Partner at General Atlantic, a global growth equity firm, since January 2019, the Executive Chairman and member of the board of directors of Akili Interactive Labs, Inc., a private biotechnology company, since 2017, the founder and Chairman of Life Science Cares, a non-profit organization, since 2016, and was the founder and Managing Partner at Vineyard Sound Advisors, LLC, a biopharmaceutical consulting firm, from March 2015 to December 2018. He previously served as Chief Executive Officer of Cubist Pharmaceuticals, Inc. (“Cubist”), a publicU.S. publicly traded pharmaceutical company, from January 1, 2015 until Cubist was acquired by Merck & Co., Inc. later that month. Mr. Perez joined Cubist in 2003 as Senior Vice President, Sales and Marketing, and served as Executive Vice President and Chief Operating Officer from 2007 to 2012 and President and Chief Operating Officer from 2012 to December 2014. Prior to joining Cubist, Mr. Perez held positions of increasing responsibility at Biogen from 1995 to 2003, most recently as Vice President of Biogen’s CNS business unit. Mr. Perez previously held various sales and marketing positions at Zeneca Pharmaceuticals. Mr. Perez has beenPharmaceuticals, a director of AMAG Pharmaceuticals, Inc., a publicmultinational pharmaceutical company, since January 2009, Zafgen, Inc. a public biopharmaceutical company, since September 2015, and Spark Therapeutics, Inc., a public gene therapy company, since January 2018. In addition, Mr. Perez has served as a director of ImmusanT, Inc., a biotechnology company, since April 2018.company. Mr. Perez also currently serves on the board of directors of Immunocore Holdings plc., a U.S. publicly traded biotechnology company, and as a member of the Board of Trustees at the Dana-Farber Cancer Institute, Inc. Mr. Perez was a member ofserved on the boardboards of directors of Cidara Therapeutics, Inc., a publicU.S. publicly traded biotechnology company, from March 2015 to June 2018, Flex Pharma, a publicU.S. publicly traded biotechnology company, from September 2015 to January 2018, Cubist from April 2014 to January 2015, and Unum Therapeutics Inc. (now known as Cogent Biosciences, Inc.), a publicU.S. publicly traded biopharmaceutical company, from March 2018 to June 2019, Zafgen, Inc. (“Zafgen”), a clinical-stage biotechnology company, which merged with Chondrial Therapeutics, Inc. to form Larimar Therapeutics, Inc., from September 2015 to June 2020, AMAG Pharmaceuticals, Inc., a U.S. publicly traded pharmaceutical company which was acquired in November 2020, from February 2009 to November 2020, and Spark Therapeutics, Inc., a U.S. publicly traded gene therapy company which was acquired in December 2019, from January 2018 to December 2019. Mr. Perez received his B.S. from California State University, Los Angeles and an M.B.A. from the Anderson Graduate School of Management at the University of California, Los Angeles.
OurThe Nominating and Corporate Governance Committee and Board of Directors believe Mr. Perez is qualified to serve on ourthe Board of Directors due to his expertise and experience as an executive in the pharmaceutical industry and his board experience provide him with the qualifications and skills to serve on our Board of Directors.experience.
Phillip Sharp, Ph.D., 75,78, has served on ourthe Board of Directors since January 2017. Dr. Sharp has been an institute professor at MITMassachusetts Institute of Technology (“MIT”) since 1999. Prior to that, he led MIT’s Department of Biology from 1991 to 1999 before assuming the directorship of the McGovern Institute from 2000 to 2004. Much of Dr. Sharp’s scientific work has been conducted at MIT’s Center for Cancer Research (now the Koch Institute), which he joined in 1974 and directed from 1985 to 1991. Dr. Sharp is the winner of the 1993 Nobel Prize in Physiology or Medicine. Dr. Sharp is a member ofserves on the board of directors of Alnylam Pharmaceuticals, Inc., a U.S. publicly traded biopharmaceutical company, and served on the board of directors of Syros Pharmaceuticals, Inc., each a publicly traded biopharmaceutical company.company, from 2013 until its merger with Tyne Technologies, Inc. in 2022. From 1982 to 2009, Dr. Sharp served as a director of Biogen, which he co-founded in 1978. Dr. Sharp earned his B.A. from Union College (Kentucky) and his Ph.D. in Chemistry from the University of Illinois, Urbana-Champaign. He completed his postdoctoral training at the California Institute of Technology.
OurThe Nominating and Corporate Governance Committee and Board of Directors believe Dr. Sharp is qualified to serve on ourthe Board of Directors due to his scientific expertise and his experience as a director of a publicly traded company.companies.
Directors Continuing in Office Until the 20222025 Annual Meeting
Dipchand (Deep) Nishar, 51,Jeffrey S. Hatfield, 65, has served as a member of ourthe Board of Directors since December 2020. Mr. Hatfield has been the Chairman of Vividion Therapeutics, Inc. (“Vividion”), a private biotechnology company that was acquired in August 2017. Since June 2015,2021 as
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an arm’s length subsidiary of Bayer Pharmaceuticals, Inc, since January 2023. He previously served as Vividion’s Chief Executive Officer from November 2020 until January 2023. Mr. NisharHatfield has worked for SoftBank Investment Advisorsalso served as Chairman of ROME Therapeutics, Inc., a private biotechnology company, since July 2022. Previously, he served as Chief Executive Officer and currently servesboard member of Zafgen from October 2017 until its acquisition of, and name change to, Larimar Therapeutics, Inc. in May 2020, and as Senior Managing Partner. From January 2009President, Chief Executive Officer and board member of Vitae Pharmaceuticals, Inc. (“Vitae”), a clinical-stage public biotechnology company, from March 2004 until its acquisition by Allergan plc in October 2016. Prior to October 2014,working at Vitae, Mr. NisharHatfield served in various roles with LinkedIn Corporation, most recently asnumerous executive capacities at BMS, including Senior Vice President Productsof BMS’ Immunology and User Experience. From August 2003 to January 2009,Virology divisions, President and General Manager of BMS Canada and Head of U.S. Market Access. Mr. Nishar served in various roles with Google Inc., most recently as the Senior Director of Products for the Asia-Pacific region. Mr. NisharHatfield has served on the board of directors of Guardant Health, Inc. since October 2018, and previously served on the boardboards of directors of Tripadvisor,several publicly traded biotechnology companies, including MiRagen Therapeutics, Inc. (Chairman) from August 2017 until June 2021 shortly after its acquisition of, and name change to, Viridian Therapeutics in October 2020, aTyr Pharma, Inc. from September2013April 2017 to June 2019April 2021, Ambit Biosciences Corp. prior to its acquisition by Daiichi Sankyo Company, Ltd. in November 2014, and the board of directors of OPower,InVivo Therapeutics, Inc. from August 2013October 2016 to June 2016. Mr. Nishar received his M.B.A. with highest honors (Baker Scholar) fromDecember 2018. He is an adjunct professor teaching entrepreneurship to doctorial students at Purdue University’s College of Pharmacy and is a Key Advisory Board member for the Harvard Business School’s Blavatnik Fellowship in Life Sciences Entrepreneurship. Mr. Hatfield holds a B.S. in pharmacy from Purdue University’s College of Pharmacy and an M.B.A. from The Wharton School his M.SEE fromat the University of Illinois, Urbana-Champaign, and his B.Tech with honors from the Indian Institute of Technology.Pennsylvania.
OurThe Nominating and Corporate Governance Committee and Board of Directors believe that Mr. NisharHatfield is qualified to serve on ourthe Board of Directors due to his extensive background in the technology industryexperience as an executive officer and his investment activities in the life science sector.board member of numerous biotechnology companies.
Saira Ramasastry, 44,47, has served as a member of ourthe Board of Directors since September 2019. Ms. Ramasastry has served as Managing Partner of Life Sciences Advisory, LLC since April 2009, a company that she founded to provide strategic advice, business development solutions and innovative financing strategies for the life sciences industry. Ms. Ramasastry also serves on the Industry Advisory Board of the Michael J. Fox Foundation for Parkinson’s Research, and as business and sustainability lead for the European Prevention of Alzheimer’s Dementia consortium.and IMI-PEARL consortiums. From August 1999 to March 2009, Ms. Ramasastry was an investment banker with Merrill Lynch & Co., Inc., an investment management company, where she helped establish the biotechnology practice and was responsible for origination of mergers and acquisitions, strategic and capital markets transactions. Prior to joining Merrill Lynch, she served as a financial analyst in the mergers and acquisitions group at Wasserstein Perella & Co., an investment banking firm, from July 1997 to September 1998. Ms. Ramasastry currently serves on the board of directors of the following public companies: Sangamo TherapeuticsDay One Biopharmaceuticals, Inc and Mirum Pharmaceuticals, Inc., Cassava Sciences, Inc., Innovate Biopharmaceuticals, Inc.,each a U.S. publicly traded biotechnology company, and Glenmark Pharmaceuticals, Ltd. Ms. Ramasastry will step down from, a BSE and NSE-traded pharmaceuticals company, and previously served on the boardboards of directors of Innovate Biopharmaceuticals, Inc. in connection with, a biotechnology company, from 2018 until its proposed merger with RDD Pharma Ltd., which is expected to close early in the second quarter of 2020. Ms. Ramasastry previously served on the board of directors of2020, Repros Therapeutics Inc., a biopharmaceutical company, from March 2013 until it was acquired by Allergan plc in January 2018.2018, Cassava Sciences, Inc., a biopharmaceutical company, from 2013 to 2020, Sangamo Therapeutics, Inc., a biotechnology company, from 2012 to 2022, and Akouos, Inc., a biotechnology company, from 2020 until it was acquired by Eli Lilly and Company in 2022 (each a U.S. publicly traded company). Ms. Ramasastry received her B.A. in economics with honors and distinction and an M.S. in management science and engineering from Stanford University as well as an M. Phil. in management studies from the University of Cambridge where she is a guest lecturer for the Bioscience Enterprise Programme.Programme and serves on the California regional board of Cambridge in America. Ms. Ramasastry is also a Health Innovator Fellow of the Aspen Institute and a member of the Aspen Global Leadership Network.
OurThe Nominating and Corporate Governance Committee and Board of Directors believe Ms. Ramasastry is qualified to serve on ourthe Board of Directors due to her extensive experience in global healthcare investment banking and strategic advisory consulting in the life sciences industry.
George Scangos, Ph.D., 71,74, has served as a member of the Board of Directors since January 2017 and served as our President and Chief Executive Officer and as a member of our Board of Directors sincefrom January 2017.2017 to April 2023. From July 2010 to December 2016, Dr. Scangos served as Chief Executive Officer and as a member of the board of directors of Biogen Inc. (“Biogen”), a publicly traded biopharmaceutical company focused on the treatment of serious diseases.Biogen. From October 1996 to July 2010, Dr. Scangos served as President and Chief Executive Officer of Exelixis, Inc., a drug discovery and development company.company (“Exelixis”). From 1993 to 1996, Dr. Scangos served as President of Bayer Biotechnology, a biotechnology company, where he was responsible for research, business development, process development, manufacturing, engineering and quality assurance of Bayer Biotechnology’s biological products. Before joining Bayer Biotechnology in 1987, Dr. Scangos was a Professor of Biology at Johns Hopkins University. Dr. Scangos has served as a member ofcurrently serves on the board of directors of various publicly traded companies, including: Exelixis, Inc., since 1996; Agilent Technologies, Inc., a U.S. publicly traded life sciences, diagnostics and applied chemical analysis company, since 2014; and Anadys Pharmaceuticals, Inc., a biopharmaceutical company,previously
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served on the board of directors of Exelixis from 20031996 to 2010.2020. Dr. Scangos served as Chair of PhRMA in 2016, and as the Chair of the California Healthcare Institute in 2010. He was a member of the board of directors of the Global Alliance for TB Drug Development from 2006 until 2010. Dr. Scangos currently serves on the Board of Trustees of Cornell University and the Board of Overseers of the University of California, San Francisco.UCSF. Dr. Scangos received his B.A. in Biology from Cornell University and a Ph.D. in Microbiology from the University of Massachusetts.
OurThe Nominating and Corporate Governance Committee and Board of Directors believe Dr. Scangos is qualified to serve on ourthe Board of Directors due to his extensive training as a scientist, significant knowledge and experience in the biotechnology, healthcare and pharmaceutical industries and the perspective and experience he brings as our former President and Chief Executive Officer.
Set forth below is biographical information for each of our executive officers other than Dr. Scangos,De Backer, whose biographical information is set forth above.
Howard HornJohanna Friedl-Naderer, 43,55, has served as our Executive Vice President and Chief FinancialOperating Officer since April 2022 and served as our Executive Vice President and Chief Business Officer, Global from March 2017.2022 to April 2022. As our Chief Operating Officer, Ms. Friedl-Naderer is responsible for business development, finance, product development/regulatory and corporate affairs. Prior to joining us, Mr. Horn servedMs. Friedl-Naderer held various positions at Biogen from February 2001 to March 2022, most recently serving as its Vice President Business Planning from June 2015 to October 2016,of Europe, Canada & Partner Markets at Biogen and as a member of Biogen’s Global Leadership Team, where he led Biogen’s resource allocation processes across all functionsshe was fully responsible for the regional P&L and regions. From October 2013 to June 2015, Mr. Horn served as Biogen’s Vice President, Strategic Corporate Financing, where he led Biogen’s corporate capital allocation processes. Mr. Horn previouslyworking on global commercial aspects of the business including strategy, planning and execution. During her more than 20-year tenure at Biogen, she held positions of increasing responsibility asacross a consultantwide range of functions, building and leading teams in advancing access to medicines for the Pharmaceuticaltreatment of neurological conditions, including multiple sclerosis, spinal muscular atrophy, amyotrophic lateral sclerosis and Medical Products Practice at McKinsey & Company, from 2004 to 2013, and as an equity research analyst inAlzheimer’s disease. Ms. Friedl-Naderer has also served on several boards of directors, including the Life Sciences group at UBS Group AG, from 1999 to 2002. Mr. Horn received his B.A. in Economics from Princeton University and his M.B.A. from the Wharton Schoolboards of directors of the UniversityEuropean Federation of Pennsylvania.Pharmaceutical Industries & Associations (EFPIA), the Swiss-American Chamber of Commerce, Interpharma and the council of the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA).
Michael Kamarck,Ann (Aine) M. Hanly, Ph.D.,69,53, has served as our Chief Technology Officer since June 2017. From September 2013March 2021 and as our Executive Vice President since December 2021. Prior to May 2017,joining us, Dr. KamarckHanly held various positions at Amgen from February 2012 through March 2021, most recently as the Vice President of Process Development, where she was accountable for clinical manufacturing and global supply of clinical trial materials. During her tenure at Amgen, she led teams enabling the commercialization of Amgen’s pipeline products as well as providing technical support for ongoing commercial manufacturing operations. Prior to Amgen, she was employed by Pfizer, Inc. (formerly Wyeth Pharmaceuticals Inc.), a pharmaceutical company, for more than 10 years, where she held roles of increasing responsibility in analytical research and development, process development, quality and product supply strategy. Dr. Hanly received her B.S. in biological chemistry and a Ph.D. in physical organic chemistry from the University of Ulster, Northern Ireland. She completed her post-doctoral fellowship at Creighton University School of Medicine before joining the collaborative research wing at Yale University and CuraGen Corporation, a biopharmaceutical development company, as lead scientist studying gene isolation and subsequent confirmation using a variety of molecular biology techniques.
Sung Lee, 52, has served as a principal for Willow Creek Biotech Consulting, where he provided consulting services in the field of biotechnology technical operations for numerous largeour Executive Vice President and small companies. FromChief Financial Officer since March 20142023. Prior to December 2014, Dr. Kamarckjoining us, Mr. Lee served as interim headthe Chief Financial Officer and Management Board member of the Therapeutic Monoclonal Antibodies organization at Sanofi, whereMorphoSys AG, a biopharmaceutical company, from February 2021 to March 2023. Previously, from October 2019 through February 2021, he led the integration and reorganization of the biotechnology assets of Sanofi and Genzyme. From December 2009 until March 2012, Dr. Kamarck served as the Executive Vice President and Chief Financial Officer of Merck BioVentures andSangamo Therapeutics, Inc., a biotechnology company. Prior to that, Mr. Lee served in various roles at Gilead Sciences, Inc., a biopharmaceutical company, from 2005 through October 2019, most recently as Senior Vice President, of VaccinesFinancial Planning & Analysis and Biologics Manufacturing at Merck & Co., Inc. (“Merck”). From May 2001Investor Relations from March 2019 to October 2009, he held various senior executive positions at Wyeth Pharmaceuticals, Inc. (“Wyeth”), including President, Technical Operations and Product Supply and was responsible for global technical operations for all of the Wyeth businesses. Dr. Kamarck also2019. Previously, Mr. Lee served as a memberVice President of the Wyeth Management Committee. PriorFinancial Planning & Analysis and Investor Relations from September 2018 to Wyeth, he was employed by Bayer AG for 17 years in a varietyFebruary 2019, Vice President of technicalInvestor Relations from June 2016 to August 2018 and leadership capacities. Dr. Kamarck previously served on the board of directors of public companies Omni Bio Pharmaceutical, Inc. and Unilife Corporation,Senior Director, Investor Relations from January 2013 to June 2015May 2016. From 2010 to 2013, Mr. Lee was the Head of Europe Financial Planning & Analysis and July 2016prior to October 2017, respectively. Dr. Kamarckthat served as the Head of Research & Development Financial Planning & Analysis from 2006 through 2010. Mr. Lee received hisa B.A. from Oberlin College, his Ph.D.the University of California, Irvine and an M.B.T. from Massachusetts Institutethe University of Technology (“MIT”), and was a Leukemia Society Fellow at Yale University.Southern California.
Phil
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Phillip Pang, M.D., Ph.D., 45,48, has served as our Chief Medical Officer since December 2018.2018, our Executive Vice President since December 2021 and our Interim Head of Research since August 2022. Prior to that, Dr. Pang served as our Senior Vice President, Development from September 2017 to December 2018. From December 2016 to September 2017, Dr. Pang served as our Vice President, Clinical. From January 2016 to December 2016, Dr. Pang served as Chief Medical Officer of Riboscience LLC, a biotech startup focused on developing small molecule antivirals, where he oversaw both pre-clinical and clinical development. From May 2011 to November 2015, he worked as Program Lead at Gilead Sciences, Inc. (“Gilead”), a biopharmaceutical company, where his responsibilities included, among other things, leading a large matrix team responsible for worldwide approval of a hepatitis C treatment. Dr. Pang received his B.S. in Biological Sciences from Stanford University, his Ph.D. in Biochemistry and Biophysics from Columbia University and his M.D. from Columbia University Vagelos College of Physicians and Surgeons.
Jay Parrish, Ph.D.Steven Rice, 45,63 has served as our Chief BusinessAdministrative Officer since July 2017August 2020 and is one of our co-founders. Prior to that, Dr. Parrish served as our Senior Vice President, Strategy and Corporate Development, from April 2017 to July 2017. Dr. Parrish is a Venture Partner at ARCH Venture Partners, L.P. (“ARCH Venture Partners”), where he has served since May 2016. From September 2011 to May 2016, Dr. Parrish served in Gilead’s Corporate Development group, where he was involved in building Gilead’s oncology and infectious disease portfolio, ultimately leading infectious disease business development for the company. Dr. Parrish also served as a scientist in Gilead’s medicinal chemistry group, from March 2004 to September 2011. Since 2012, Dr. Parrish has served as a part-time instructor at UC Berkeley Extension, where he teaches chemistry to undergraduates and post-baccalaureates. He also previously completed a postdoctoral fellowship at the Scripps Research Institute. Dr. Parrish received his B.S. in Chemistry from Emory University, a Ph.D. in Synthetic Organic Chemistry from the University of South Florida and an M.B.A. from the University of California, Berkeley Haas School of Business.
Herbert (Skip) Virgin, M.D., Ph.D.,64,has served as our Executive Vice President since December 2021. Mr. Rice is responsible for human resources, legal, information technology, facilities and environmental, health and safety. Mr. Rice held the Chief Human Resources Officer position since joining the Company in September 2019. Prior to joining us, Mr. Rice was the Chief Human Resources Officer for the Bill & Melinda Gates Foundation from May 2015 to May 2019, where he led human resources, facilities, events and travel. Prior to the Bill & Melinda Gates Foundation, Mr. Rice was the Executive Vice President of Research and Chief Scientific Officer since January 2018. From July 1990global human resources at Juniper Networks, Inc., a technology company, from February 2006 to February 2019, Dr. Virgin wasMay 2015. Mr. Rice also chaired Juniper Networks’ Corporate Foundation. Additionally, Mr. Rice held several human resources leadership positions at Hewlett-Packard Company, a full-time membercomputer hardware company, from 1981 to 2006, including Vice President of the faculty of Washington University School of Medicine, St. Louis, Missouri. At Washington University School of Medicine he served as the Edward Mallinckrodt Professor and Chair of the Department of Pathology & Immunology from 2006 until 2017. He maintains an association with Washington University as a non-tenured faculty member. Earlier in his career, Dr. Virgin trained in internal medicine at Brigham and Women’s Hospital in Boston and in infectious diseases at Barnes Hospital in St. Louis. He is a member of the American Society for Clinical Investigation, the Association of American Physicians, the American Academy of Microbiology and the National Academy of Sciences. Dr. Virgin previous served on the Board of Reviewing Editors of Science, and is currently on the Editorial Boards of Cell and Cell Host and Microbe. Dr. VirginHuman Resources Global Operations. Mr. Rice received his A.B.A.A. in Biology, his M.D.business administration and his Ph.D. in Immunologymanagement from Harvard University and Harvard Medical School.De Anza College.
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INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Independence of The Board of Directors
As required under the Nasdaq Stock Market (“Nasdaq”(“Nasdaq”) listing standards, a majority of the members of a listed company’scompany’s board of directors must qualify as “independent,“independent,” as affirmatively determined by its board of directors. The Board consults with our counsel to ensure that the Board’sBoard’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,“independent,” including those set forth in pertinent listing standards of Nasdaq, as in effect from time to time.
Consistent with these considerations, after review of all relevant identified transactions or relationships between each director, or any of his or hertheir family members, and us, senior management and our independent registered public accounting firm, the Board has affirmatively determined that all of our current directors other than Dr. De Backer and Dr. Scangos are, and all of our former directors who served during any portion of the last fiscal year other than Dr. Frueh were, independent directors within the meaning of the applicable Nasdaq listing standards. In making this determination, the Board found that none of these directors, other than Dr. ScangosDe Backer and Dr. Frueh,Scangos, had a material or other disqualifying relationship with us.
Board Leadership Structure
OurThe Board has an independent chair, Dr. Sato, who has authority, among other things, to call and preside over Board meetings, including meetings of the independent directors, to set meeting agendas and to determine materials to be distributed to the Board. Accordingly, the Board chair has substantial ability to shape the work of the Board. We believe that separation of the positions of Board chair and Chief Executive Officer reinforces the independence of the Board in its oversight of our business and affairs. In addition, we believe that having an independent Board chair creates an environment that is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of the Board to monitor whether management’s actions are in our best interests and the interests of our stockholders. As a result, we believe that having an independent Board chair can enhance the effectiveness of the Board as a whole.
Board Qualifications
Experience and Expertise: The Board is responsible for overseeing our business consistent with their fiduciary duties. This significant responsibility requires highly skilled individuals with various qualities, attributes, and professional experience. We believe the Board of Directors is well-rounded, with a balance of relevant perspectives and experience.
Diversity: We strive to achieve diversity in the broadest sense, including persons diverse in geography, gender, ethnicity, age and experiences. The overall diversity is an important consideration in the director selection and nomination process. The Nominating and Corporate Governance Committee assesses diversity in connection with the annual nomination process as well as in new director searches. Our 11 directors’ range in age from 47 to 78 and include 4 women and 3 minorities.
| Board Diversity Matrix (As of April 7, 2023) | ||||||||||||||||
| Total Number of Directors | 11 | |||||||||||||||
| Female | Male | Non-Binary | Did Not Disclose Gender | |||||||||||||
Part I: Gender Identity |
| |||||||||||||||
| Directors | 4 | 7 | 0 | 0 | ||||||||||||
Part II: Demographic Background |
| |||||||||||||||
African American or Black | 0 | 1 | 0 | 0 | ||||||||||||
Alaskan Native or Native American | 0 | 0 | 0 | 0 | ||||||||||||
Asian | 1 | 0 | 0 | 0 | ||||||||||||
Hispanic or Latinx | 0 | 0 | 0 | 0 | ||||||||||||
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | ||||||||||||
White | 2 | 6 | 0 | 0 | ||||||||||||
Two or More Races or Ethnicities | 1 | 0 | 0 | 0 | ||||||||||||
LGBTQ+ | 0 | |||||||||||||||
Did Not Disclose Demographic Background | 0 | |||||||||||||||
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Character: Board members should possess the personal attributes necessary to be an effective director, including unquestioned integrity, sound judgment, a collaborative spirit and commitment to the Company, our stockholders and other constituencies.
Role of the Board in Risk Oversight
One of the Board’s key functions is informed oversight of our risk management process. The Board does not have a standing risk management committee, but rather administers this oversight function directly through the Board as a whole as well as through various Board standing committees that address risks inherent in their respective areas of oversight. In particular, ourthe Board is responsible for monitoring and assessing strategic risk exposure, including a determination of the nature and level of risk appropriate for us. OurThe Audit Committee has the responsibility to consider and discuss with management and the auditors, as appropriate, our guidelines and policies with respect to financial risk management, and financial risk assessment and assessment of brand and reputational risks including our major financial risk exposures and the steps taken by management to monitor and control these exposures. In addition, the Audit Committee considers management risks relating to data privacy, technology and information and cyber security, including (i) the potential impact of those exposures on our business, financial results, operations and reputation, (ii) the steps management has taken to monitor and mitigate such exposures, (iii) our information governance policies and programs and (iv) major legislative and regulatory developments that could materially impact our privacy and data security risk exposure. OurThe Compensation Committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking, including risks related to executive compensation and overall compensation and benefit strategies, plans, arrangements, practices and policies. OurThe Nominating and Corporate Governance Committee monitors the effectiveness of our corporate governance guidelines, including whether they are successful in preventing illegal or improper liability-creating conduct. The Nominating and Corporate Governance Committee also oversees and reviews with management our major legal compliance risk exposures and the steps management has taken to monitor or mitigate such exposures, including our procedures and any related policies with respect to risk assessment and risk management. It is the responsibility of the committee chairs to report findings regarding material risk exposures to the Board as quickly as possible. In connection with its reviews of our operations and corporate functions, ourthe Board addresses the primary risks associated with those operations and corporate functions. In addition, ourthe Board reviews the risks associated with our company’s business strategies periodically throughout the year as part of its consideration of undertaking any such business strategies. The Board also reviews the Company’s ESG policies, goals and programs, including the Company’s progress toward achieving those goals. The Board has adopted an ESG Statement that is available to stockholders on our website at www.vir.bio. The Compensation Committee oversees the development, implementation, and effectiveness of the Company’s practices, policies and strategies relating to human capital management regarding matters such as recruiting, selection, talent development and diversity, equity and inclusion. While the Board and its committees oversee risk management strategy, management is responsible for implementing and supervising day-to-day risk management processes and reporting to the Board and its committees on such matters.
Meetings of Thethe Board of Directors
The Board of Directors met six times during the last fiscal year. All directors except Ms. Burow and Mr. Nishar attended at least 75% of the aggregate number of meetings of the Board and of the committees on which they served, held during the portion of the last fiscal year for which they were directors or committee members, respectively. Ms. Burow was unable to attend one meeting of the Board and two meetings of the Audit Committee. Mr. Nishar was unable to attend two meetings of the Board.
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Information Regarding Committees of the Board of Directors
The Board maintains an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee and a Science and Technology Committee. The following table provides membership and meeting information for 20192022 for each of the foregoing Board committees:
Name |
| Audit |
|
| Compensation |
|
| Nominating and Corporate Governance |
| |||
Vick Sato, Ph.D. |
|
|
|
|
|
|
|
|
| X* |
| |
George Scangos, Ph.D. |
|
|
|
|
|
|
|
|
|
|
|
|
Kristina Burow(1) |
| X |
|
| X |
|
|
|
|
| ||
Robert More |
| X |
|
| X* |
|
|
|
|
| ||
Robert Nelsen(2) |
|
|
|
|
| X |
|
| X |
| ||
Dipchand (Deep) Nishar |
|
|
|
|
|
|
|
|
| X |
| |
Robert Perez |
| X |
|
| X |
|
|
|
|
| ||
Saira Ramasastry |
| X* |
|
|
|
|
|
|
|
|
| |
Phillip Sharp, Ph.D. |
|
|
|
|
| X |
|
|
|
|
| |
Klaus Frueh, Ph.D. (3) |
|
|
|
|
|
|
|
|
|
|
|
|
Thomas Daniel(4) |
|
|
|
|
| X |
|
|
|
|
| |
Total meetings in 2019 |
|
| 7 |
|
|
| 4 |
|
|
| 0 |
|
Name | Audit | Compensation | Nominating and Corporate Governance | Science and Technology | ||||||||||||
Vicki Sato, Ph.D. | X | X | ||||||||||||||
George Scangos, Ph.D. | X | |||||||||||||||
Jeffrey S. Hatfield(1) | X | X | * | |||||||||||||
Robert More | X | X | * | |||||||||||||
Janet Napolitano | X | X | ||||||||||||||
Robert Nelsen | X | |||||||||||||||
Dipchand (Deep) Nishar(2) | X | |||||||||||||||
Robert Perez | X | |||||||||||||||
Saira Ramasastry | X | * | ||||||||||||||
Phillip Sharp, Ph.D. | X | X | ||||||||||||||
Elliott Sigal, M.D., Ph.D. | X | X | * | |||||||||||||
Total meetings in 2022 | 6 | 6 | 3 | 4 | ||||||||||||
| * Committee Chairperson |
(1) |
|
| Mr. |
|
|
| Mr. |
The Board of Directors has determined that each member of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee for 2023 meets the applicable Nasdaq rules and regulations regarding “independence” and each member is free of any relationship that would impair their individual exercise of independent judgment.
Below is a description of each committee of the Board of Directors.
The Board of Directors has determined that each member of each committee meets the applicable Nasdaq rules and regulations regarding “independence” and each member is free of any relationship that would impair his or her individual exercise of independent judgment.
Audit Committee
The Audit Committee of the Board of Directors was established by the Board in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to oversee our corporate accounting and financial reporting processes and audits of itsour financial statements. For this purpose, the Audit Committee is responsible for assisting ourthe Board of Directors in its oversight of the integrity of our consolidated financial statements, the qualifications and independence of our independent registered public accounting firm and our internal financial and accounting controls. The Audit Committee has direct responsibility for the appointment, compensation, retention (including termination) and oversight of our independent registered public accounting firm,, and our independent registered public accounting firm report reports directly to the Audit Committee. The Audit Committee evaluates the performance of our independent registered public accounting firm and assesses its qualifications, and monitors the rotation of the partners on our audit engagement team. The Audit Committee may also pre-approve engagements of our independent registered public accounting firm to perform any proposed permissible non-audit services, and the terms of such services. The Audit Committee also prepares the audit committee report that the SEC requires to be included in our annual proxy statement.
The Audit Committee is composed of threefour directors: Ms. Ramasastry, Mr. Hatfield, Mr. More and Mr. Perez and Ms. Ramasastry.Perez. Ms. Ramasastry serves as the chair of ourthe Audit Committee. The Board has adopted a written Audit Committee charter that is available to stockholders on our website at www.vir.bio.
The Board of Directors reviews the Nasdaq listing standards definition of independence for Audit Committee members on an annual basis and has determined that all members of ourthe Audit Committee are independent (as independence is currently defined in Rule 5605(c)(2)(A)(i) and (ii) of the Nasdaq listing standards).
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The Board of Directors has also determined that Ms. Ramasastry and Mr. More each qualify as an “audit“audit committee financial expert,” as defined in applicable SEC rules. The Board made a qualitative assessment of Ms. RamasastryRamasastry’s and Mr. More’s level of knowledge and experience based on a number of factors, including their respective formal education and experience in financial and executive roles.
Report of the Audit Committee of the Board of Directors*
The Audit Committee has reviewed and discussed the audited financial statements for the fiscal year ended December 31, 20192022, with our management. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”(“PCAOB”) as outlined in Auditing Standard 1301, Communications with Audit Committees, and the SEC. The Audit Committee has also received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountants’accountants’ communications with the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm the accounting firm’sfirm’s independence. Based on the foregoing, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.2022.
Audit Committee
Ms. Saira Ramasastry (Chair)
Mr. Jeffrey S. Hatfield
Mr. Robert More
Mr. Robert Perez
* | The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any of our filings under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. |
Compensation Committee
TheIn the beginning of 2022 the Compensation Committee iswas composed of four directors: Ms. Burow, Mr. More, Mr. Perez, Dr. Sharp and Dr. Sharp.Sigal. On February 25, 2022, the Compensation Committee was reconstituted, and the current members of the Compensation Committee are: Mr. More, Ms. Napolitano, Dr. Sharp and Dr. Sigal. Mr. More serves as the chair of ourthe Compensation Committee. All members of the Compensation Committee are independent (as independence is currently defined in Rule 5605(d)(2) of the Nasdaq listing standards). The Board has adopted a written Compensation Committee charter that is available to stockholders on our website at www.vir.bio.
The functions of the Compensation Committee include, among other things, approval of our compensation objectives and the compensation of the Chief Executive Officer. The Compensation Committee also approves, or recommends to ourthe Board of Directors for approval, the compensation of other executives. In addition, the Compensation Committee reviews all compensation components, including base salary, bonus, benefits and other perquisites.
Compensation Committee Processes and Procedures
Typically, the Compensation Committee meets at least quarterly and with greater frequency if necessary. The agenda for each meeting is usually developed by the Chair of the Compensation Committee, in consultation with the Chief Executive Officer and Semler Brossy Consulting Group (“Semler”Semler Brossy”), the Compensation Committee’s independent compensation consultant. The Compensation Committee meets regularly in executive session. However, from time to time, various members of management and other employees as well as outside advisors or consultants may be invited by the Compensation Committee to make presentations, to provide financial or other background information or advice or to otherwise participate in Compensation Committee meetings. The Chief Executive Officer may not participate in, or be present during, any deliberations or determinations of the Compensation Committee regarding histheir compensation or individual performance objectives. The charter of the Compensation Committee grants the Compensation Committee full access to all of our books, records, facilities and personnel. In addition, under the charter, the Compensation Committee has the authority to obtain, at
17
our expense, advice and assistance from compensation
consultants and internal and external legal, accounting or other advisors and other external resources that the Compensation Committee considers necessary or appropriate in the performance of its duties. The Compensation Committee has direct responsibility for the oversight of the work of any consultants or advisers engaged for the purpose of advising the Compensation Committee. In particular, the Compensation Committee has the sole authority to retain, in its sole discretion, compensation consultants to assist in its evaluation of executive and director compensation, including the authority to approve the consultant’sany such consultant’s or advisor’s reasonable fees and other retention terms. Under the charter, the Compensation Committee may select, or receive advice from, a compensation consultant, legal counsel or other adviser to the Compensation Committee, other than in-house legal counsel and certain other types of advisers, only after taking into consideration six factors, prescribed by the SEC and Nasdaq, that bear upon the adviser’sadviser’s independence; however, there is no requirement that any adviser be independent.
During the past fiscal year, after taking into consideration the six factors prescribed by the SEC and Nasdaq described above, the Compensation Committee engaged Semler as a compensation consultant. The Compensation Committee determined that Semler’s engagement raised no conflict of interest or independence concerns. The Compensation Committee requested that Semler review industry-wide compensation practices and trends to assess the competitiveness of our executive and non-employee director compensation programs.
As part of its engagement, Semler was requested by the Compensation Committee to develop a comparative group of companies and to perform analyses of competitive performance and compensation levels for that group. Semler also conducted individual interviews with senior management to learn more about our business operations and strategy, key performance metrics and strategic goals, as well as the labor markets in which we compete. Semler ultimately developed recommendations that were presented to the Compensation Committee for its consideration and to the Board for its information. Following an active dialogue with Semler, the Compensation Committee recommended that the Board approve certain recommendations of Semler.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee of the Board of Directors makes recommendations regarding corporate governance, the composition of ourthe Board of Directors, identification, evaluation and nomination of director candidates and the structure and composition of committees of ourthe Board of Directors. In addition, ourthe Nominating and Corporate Governance Committee is responsible for developing and recommending corporate governance guidelines to ourthe Board of Directors.
In the beginning of 2022 the Nominating and Corporate Governance Committee was composed of four directors: Dr. Sato, Ms. Napolitano, Mr. Nelsen and Mr. Nishar, and Dr. Sato served as the chair of the Nominating and Corporate Governance Committee. On February 25, 2022, the Nominating and Corporate Governance Committee was reconstituted, and the members of the Nominating and Corporate Governance Committee were: Mr. Hatfield, Mr. Nelsen, Mr. Nishar and Dr. Sato. Mr. Hatfield serves as the chair of the Nominating and Corporate Governance Committee. Mr. Nishar left the Board effective May 20, 2022. In addition, on September 8, 2022, Ms. Napolitano was appointed to the Nominating and Corporate Governance Committee. The current members of the Nominating and Corporate Governance Committee areare: Mr. Hatfield, Ms. Napolitano, Mr. Nelsen and Dr. Sato, Mr. Nishar and Mr. Nelsen. OurSato. The Board has determined that each of the members of this committeethe Nominating and Corporate Governance Committee is independent (as independence is currently defined in Rule 5605(a)(2) of the Nasdaq listing standards). Dr. Sato serves as the chair of our Nominating and Corporate Governance Committee.
The Nominating and Corporate Governance Committee believes that candidates for director should have certain minimum qualifications, including the ability to read and understand basic financial statements and understand our industry andas well as having the highest personal integrity and ethics. The Nominating and Corporate Governance Committee also intends to consider such factors as possessing relevant expertise upon which to be able to offer advice and guidance to management; having sufficient time to devote to our affairs; demonstrating excellence in his or hertheir field; having the ability to exercise sound business judgment; having experience as a board member or executive officer of another publicly held company; having a diverse personal background, perspective and experience; requirements of applicable law; and having the commitment to rigorously represent the long-term interests of our stockholders. However, the Nominating and Corporate Governance Committee retains the right to modify these qualifications from time to time, subject to Board approval. Candidates for director nominees are reviewed in the context of the current composition of the Board, our operating requirements and the long-term interests of stockholders. In conducting this assessment, the Nominating and Corporate Governance Committee typically considers diversity, age, skills and such other factors as it deems appropriate, given our current needs and the current needs of the Board, to maintain a balance of knowledge, experience and capability.
In the case of incumbent directors whose terms of office are set to expire, the Nominating and Corporate Governance Committee reviews these directors’ overall service to us during their terms, including the number of meetings attended, level of participation, quality of performance and any other relationships and transactions that might impair the directors’ independence. The Nominating and Corporate Governance Committee will take into account the results of the Board’s self-evaluation, conducted annually on a group and individual basis. In the case of new director candidates, the Nominating and Corporate Governance Committee also determines whether the nominee is independent for Nasdaq purposes, which determination is based upon applicable Nasdaq listing standards, applicable SEC rules and regulations and the advice of counsel, if necessary.
Generally, ourthe Nominating and Corporate Governance Committee identifies candidates for director nominees in consultation with management, using search firms or other advisors, through the recommendations submitted by stockholders or through such other methods as the Nominating and Corporate Governance Committee deems to be helpful to identify candidates. The Nominating and Corporate Governance Committee conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of the Board. The Nominating and
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Corporate Governance Committee meets to discuss and consider the candidates’ qualifications and then selects a nominee for recommendation to the Board by majority vote. The Nominating and Corporate Governance Committee may gather information about the candidates through interviews, questionnaires, background checks or any other means that the Nominating and Corporate Governance Committee deems to be appropriate in the evaluation process. OurThe Nominating and Corporate Governance Committee’s priority in selecting board members is identification of persons who will further the interests of our companythe Company through his or hertheir established record of professional accomplishment, the ability to contribute positively to the collaborative culture among board members and professional and personal experiences and expertise relevant to our growth strategy.
The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate wasCandidates who are recommended by a stockholder.stockholders will be considered in the same manner as candidates from other sources. Stockholders who wish to recommend individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the Board may do so by providing timely notice in writing to our Secretary at c/o Vir Biotechnology, Inc., 499 Illinois Street, Suite 500, San Francisco, California 94158. To be timely, we must receive the notice not lessno later than 90 days nor moreFebruary 19, 2024, and no earlier than 120 days prior to the anniversary of the prior year’s annual meeting of stockholders;January 20, 2024; provided, however, that in the event that the date of the annual meeting is moreearlier than 30 days beforeApril 19, 2024 or morelater than 30 days after such anniversary date,June 18, 2024, we must receive the stockholder’s notice (i) no earlier than the close of business on the 120th120th day prior to the proposed date of the annual meeting and (ii) no later than the close of business on the later of the 90th90th day prior to the proposed date of the annual meeting or the 10th10th day following the day on which we first make a public announcement of the date of the annual meeting. Submissions must include the specific information required in Section 5 of our Bylaws. For additional information about our director nomination requirements, please see our Bylaws.
The Board has adopted a written Nominating and Corporate Governance Committee charter that is available to stockholders on our website at www.vir.bio.
Science and Technology Committee
The Science and Technology Committee is responsible for, among other things: (i) overseeing our scientific advisory board and (ii) reviewing and advising the Board on the Science and Technology Committee’s view of our technologies, research and development activities (including our product discovery and preclinical and clinical development programs) and relevant science. The current members of the Science and Technology Committee are Drs. Sato, Scangos, Sharp and Sigal. Dr. Sigal serves as the chair of the Science and Technology Committee.
Stockholder Communications With Thewith the Board Ofof Directors
OurThe Board has adopted a formal process by which stockholders may communicate with the Board or any of its directors. Stockholders who wish to communicate with the Board may do so by sending written communications addressed to: Attn: Secretary, 499 Illinois Street, Suite 500, San Francisco, California 94158. These communications will be reviewed by the Secretary, who will determine whether the communication is appropriate for presentation to the Board or the relevant director. The purpose of this screening is to allow the Board to avoid having to consider irrelevant or inappropriate communications (such as advertisements solicitations and hostile communications)solicitations).
Compensation Committee Interlocks and Insider Participation
None of the members of the Compensation Committee is currently, or has been at any time, one of our executive officers or employees. None of our executive officers currently serves, or has served during the last year, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our Board of Directors or on our Compensation Committee.
Code of Business Conduct and Ethics
We have adopted the Code of Business Conduct and Ethics that applies to all officers, directors and employees. The Code of Business Conduct and Ethics is available on our website at www.vir.bio. If we make any substantive amendments to the Code of Business Conduct and Ethics or grant any waiver from a provision of the Code to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website.
Corporate Governance Guidelines
The Board has adopted Corporate Governance Guidelines to ensure that the Board will have the necessary authority and practices in place to review and evaluate our business operations as needed and to make decisions that are independent of our management. The guidelinesCorporate Governance Guidelines are also intended to align the interests of directors and management with those of our stockholders. The Corporate Governance Guidelines set forth the practices the Board intends to follow with respect to, among other things, board composition and selection, including diversity, board meetings and involvement of
19
senior management, Chief Executive Officer performance evaluation and succession planning and board committees and compensation. The Corporate Governance Guidelines isare available in the “Investors–Corporate Governance” section ofon our website www.vir.bio.www.vir.bio.
Hedging Policy
Our insider trading policyInsider Trading Policy prohibits our employees, directors and designated consultants from engaging in “hedging”, pledging our securities as collateral for a loan or other monetization transactions with respect to our common stock or borrowing against our common stock.
Clawback Policy
In March 2022, upon the recommendation of the Compensation Committee, the Board of Directors adopted a clawback policy that covers cash and equity incentive-based compensation paid to our executive officers, including our chief executive officer and our chief financial officer and principal accounting officer. The policy provides that if (i) we are required to prepare an accounting restatement for periods that end on or after the effective date of the policy and (ii) the Board determines that a current or former executive officer’s act or omission contributed to the circumstances requiring the restatement, and such executive officer’s actions involved either intentional misconduct or an intentional violation of our rules or any applicable legal or regulatory requirement or fraud in the course of such executive officer’s employment with us, we will use reasonable efforts to recover from such executive officer all or a portion of any incentive-based compensation received by such executive officer in excess of what would have been paid to such executive officer under the restated financial statements during the three-year period preceding the date on which we are required to prepare the restatement.
Equity Ownership Guidelines
In March 2022, upon the recommendation of the Compensation Committee, the Board of Directors adopted equity ownership guidelines applicable to our non-employee directors and our executive officers to further align the interests of our leadership with those of our stockholders. The equity ownership guidelines require that: (i) our Chief Executive Officer hold shares of common stock equal to the lesser of such number of shares with a fair market value of at least four times their annual base salary and 100,000 shares, (ii) each of our other executive officers hold shares of common stock equal to the lesser of such number of shares with a fair market value of at least their annual base salary and 25,000 shares and (iii) each of our non-employee directors hold shares of common stock equal to the lesser of such number of shares with a fair market value of at least three times the cash portion of their annual retainer and 5,000 shares. Covered individuals serving on the date of initial adoption of the equity ownership guidelines have until June 30, 2027, to achieve compliance with the guidelines and newly appointed or elected persons will have five years from the date of hire, promotion or initial election, as applicable. The following forms of equity will count toward the ownership guidelines: shares owned outright and any shares underlying vested equity grants or account balances under share-based compensation plans. Options, whether vested or unvested, are assigned no value under the equity ownership guidelines.
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PROPOSAL 2
ADVISORY VOTE ON EXECUTIVE COMPENSATION
We are providing our stockholders with the opportunity to vote to approve, on an advisory, non-binding basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules. This proposal, which is commonly referred to as “say-on-pay,” is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which added Section 14A to the Exchange Act.
Our executive compensation programs are designed to attract, motivate and retain our executive officers, who are critical to our success. Under these programs, our named executive officers are rewarded for the achievement of our near-term and longer-term financial and strategic goals and for driving corporate financial performance and stability. The programs contain elements of cash and equity-based compensation and are designed to align the interests of our executives with those of our stockholders.
The “Executive Compensation” section of this proxy statement describes in detail our executive compensation programs and the decisions made by the Compensation Committee and the Board of Directors with respect to the fiscal year ended December 31, 2022. Highlights of our 2022 executive compensation program include the following:
| • | Payout of 70% of target in short-term corporate incentive plan: In determining 2022 payouts for our NEOs, the CompensationCommittee reviewed numerous factors relating to both corporate performance and individual performance against the goals and priorities for the year. See the section entitled “Executive Compensation—Compensation Discussion & Analysis—Short-Term Corporate Incentive Plan” below for further information. |
| • | Granted annual equity awards: The Compensation Committee grants annual equity awards inthe first quarter of each year. Equity award sizes are determined based on a variety of factors, including the Compensation Committee’s review of competitive market analysis, current equity holdings and individual performance. Annual equity awards are granted as a mix between restricted stock units (“RSUs”) and stock options. The average grant date fair value across the named executive officers was down 56% in 2022 versus the prior year. See the section entitled “Executive Compensation—Compensation Discussion & Analysis—Long-Term Incentive Compensation” below for further information. |
| • | Granted transition RSU awards: The Compensation Committee also granted transition RSU awards to select named executive officers coinciding with the annual equity awards granted on February 22, 2022. The RSU awards were granted to ensure business continuity and better align unvested equity holdings with market during a time of transition for the Company. See the section entitled “Executive Compensation—Compensation Discussion & Analysis—Long-Term Incentive Compensation” below for further information. |
| • | Significant portion of compensation tied to corporate performance: The majority of each named executive officers’ pay is “at-risk” and is tied tocorporate performance, whether through our short-term corporate incentive plan, which is tied to short-term objectives, or through equity-based compensation, which is tied to the long-term performance of the Company. |
As we describe in the Compensation Discussion & Analysis, our executive compensation program embodies a pay-for-performance philosophy that supports our business strategy and aligns the interests of our executives with our stockholders. The Board of Directors believes this link between compensation and the achievement of our near- and long-term business goals has helped drive our performance over time. At the same time, we believe our program does not encourage excessive risk-taking by management.
The Board of Directors is asking stockholders to approve a non-binding, advisory vote on the following resolution:
RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including the compensation discussion and analysis, the compensation tables and any related material disclosed in this proxy statement, is hereby approved.
As an advisory vote, this proposal is not binding. The outcome of this advisory vote will not overrule any decision by the Company or the Board of Directors (or any committee thereof), create or imply any change to the fiduciary duties of the Company or the Board of Directors (or any committee thereof) or create or imply any additional fiduciary duties for the Company or the Board of Directors (or any committee thereof). However, the Compensation Committee and the Board of Directors value the opinions expressed by our stockholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for named executive officers.
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The affirmative vote of the holders of a majority of the shares present by remote communication or represented by proxy and entitled to vote on the matter at the Annual Meeting will be required to approve, on an advisory basis, the compensation of our named executive officers. If you “Abstain” from voting, it will have the same effect as an “Against” vote. Broker non-votes will have no effect.
The Board of Directors Recommends
A Vote “For” Proposal 2
Ratification of Selection of Independent Registered Public Accounting Firm
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PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has selectedappointed Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 20202023, and has further directed that management submit the selectionappointment of its independent registered public accounting firm for ratification by the stockholders at the annual meeting.Annual Meeting. Ernst & Young LLP has audited our financial statements since 2017. Representatives of Ernst & Young LLP are expected to be present at the annual meeting.Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
Neither our Bylaws nor other governing documents or law require stockholder ratification of the selectionappointment of Ernst & Young LLP as our independent registered public accounting firm. However, the Audit Committee of the Board is submitting the selectionappointment of Ernst & Young LLP to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection,appointment, the Audit Committee of the Board will reconsider whether or not to retain that firm. Even if the selectionappointment is ratified, the Audit Committee of the Board in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if they determine that such a change would be in our best interests and the best interests of our stockholders.
The affirmative vote of the holders of a majority of the shares present in personby remote communication or represented by proxy and entitled to vote on the matter at the annual meetingAnnual Meeting will be required to ratify the selectionappointment of our independent registered public accounting firm. If you “Abstain” from voting, it will have the same effect as an “Against” vote. Broker non-votes, if applicable, will have no effect.
Principal Accountant Fees and Services
The following table represents aggregate fees billed to us for the fiscal years ended December 31, 20192022 and 20182021, by Ernst & Young LLP, our principal accountant.
|
| Fiscal Year Ended |
| |||||
|
| 2019 |
|
| 2018 |
| ||
|
| (in thousands) |
| |||||
Fee Category |
|
|
|
|
|
|
|
|
Audit fees (1) |
| $ | 2,000 |
|
| $ | 438 |
|
Audit-related fees |
|
| — |
|
|
| — |
|
Tax fees (2) |
|
| — |
|
|
| 127 |
|
All other fees (3) |
|
| 2 |
|
|
| 2 |
|
Total fees |
| $ | 2,002 |
|
| $ | 567 |
|
| Fiscal Year Ended | ||||||||
| 2022 | 2021 | |||||||
| (in thousands) | ||||||||
Fee Category | ||||||||
Audit fees(1) | $ | 2,566 | $ | 2,017 | ||||
Audit-related fees(2) | — | — | ||||||
Tax fees(3) | — | — | ||||||
All other fees(4) | — | — | ||||||
|
|
|
| |||||
Total fees | $ | 2,566 | $ | 2,017 | ||||
|
|
|
| |||||
| (1) | Audit fees consist of fees for professional services provided primarily in connection with the annual audit of our financial statements, quarterly reviews and services associated with SEC registration statements and other |
| (2) |
|
|
|
| (3) | Ernst & Young LLP did not provide any tax services during 2022 and 2021. |
| (4) | There were no such fees incurred in 2022 or 2021. |
All fees described above were pre-approved by the Audit Committee.
Pre-Approval Policies and Procedures.
The Audit Committee pre-approves all audit and non-audit services provided by Ernst & Young LLP before it is engaged by us to render non-audit services to ensure that the provision of these services does not impair the auditor’s independence. The non-audit services may include audit-related services, tax services and other non-audit services.
The pre-approval requirement set forth above does not apply with respect to non-audit services if:
all such services do not, in the aggregate, amount to more than 5% of the total fees paid by us to Ernst & Young LLP during the fiscal year in which the services are provided;
such services were not recognized as non-audit services at the time of the relevant engagement; and
such services are promptly brought to the attention of and approved by the Audit Committee (or its delegate) prior to the completion of the annual audit.23
The Audit Committee elected to delegate pre-approval authority to the chair of the Audit Committee to approve any one or more individual permitted non-audit services for which estimated fees do not exceed $100,000 as well as adjustments to any estimated pre-approval fee thresholds up to $50,000 for any individual service. Any services that would exceed such limits should be pre-approved by the full Audit Committee. The chair shall report any
| • | such services were not recognized as non-audit services at the time of the relevant engagement; and |
| • | such services are promptly brought to the attention of and approved by the Audit Committee (or its delegate) prior to the completion of the annual audit. The Audit Committee elected to delegate pre-approval authority to the chair of the Audit Committee to approve any one or more individual permitted non-audit services for which estimated fees do not exceed $100,000 as well as adjustments to any estimated pre-approval fee thresholds up to $50,000 for any individual service. Any services that would exceed such limits should be pre-approved by the full Audit Committee. The chair shall report any pre-approval granted at the next scheduled meeting of the Audit Committee. |
The Board of Directors Recommends
A Vote “For” Proposal 2.3.
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Security Ownership of Certain Beneficial Owners and Management
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership of our common stock as of March 27, 2020April 3, 2023, by: (i) each director; (ii) each of our named executive officers; (iii) all of our executive officers and directors as a group; and (iv) all those known by us to be beneficial owners of more than 5% of itsour common stock.
The table is based upon information supplied by our officers, directors and principal stockholders, Schedules 13D and 13G filed with the SEC and other sources believed to be reliable by us. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, we believe that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based on 109,803,505133,931,374 shares outstanding on March 27, 2020,April 3, 2023, adjusted as required by rules promulgated by the SEC. The number of shares of common stock used to calculate the percentage ownership of each listed beneficial owner includes the shares of common stock underlying options or convertible securities held by such beneficial owner that are exercisable or convertible within 60 days following March 31, 2020.April 3, 2023. The shares described as “owned” are shares of our common stock directly or indirectly owned by each listed person, rounded up to the nearest whole share. Unless otherwise indicated, the address for each person or entity listed in the table is c/o Vir Biotechnology, Inc., 499 Illinois Street, Suite 500, San Francisco, California 94158.
Name of Beneficial Owner |
| Number of shares Beneficially Owned |
|
| Percentage Beneficially Owned |
| ||
Greater than 5% Stockholders |
|
|
|
|
|
|
|
|
Entities affiliated with ARCH Venture Partners (1) |
|
| 28,666,663 |
|
|
| 26.1 | % |
SVF Endurance (Cayman) Limited (2) |
|
| 22,616,666 |
|
|
| 20.6 | % |
Entities affiliated with Temasek Holdings (Private) Limited (3) |
|
| 5,499,999 |
|
|
| 5.0 | % |
Alaska Permanent Fund Corporation (4) |
|
| 5,555,556 |
|
|
| 5.1 | % |
|
|
|
|
|
|
|
|
|
Named Executive Officers and Directors |
|
|
|
|
|
|
|
|
George Scangos, Ph.D. (5) |
|
| 6,984,133 |
|
|
| 6.3 | % |
Howard Horn |
|
| 277,777 |
|
| * |
| |
Herbert (Skip) Virgin, M.D., Ph.D. (6) |
|
| 324,073 |
|
| * |
| |
Vicki Sato, Ph.D. (7) |
|
| 1,816,058 |
|
|
| 1.7 | % |
Kristina Burow |
|
| — |
|
| * |
| |
Robert More (8) |
|
| 2,005,265 |
|
|
| 1.8 | % |
Robert Nelsen (9) |
|
| 28,666,663 |
|
|
| 26.1 | % |
Dipchand (Deep) Nishar |
|
| — |
|
| * |
| |
Robert Perez (10) |
|
| 36,491 |
|
| * |
| |
Saira Ramasastry |
|
| — |
|
| * |
| |
Phillip Sharp, Ph.D. (11) |
|
| 258,712 |
|
| * |
| |
All current executive officers and directors as a group (14 persons) |
|
| 41,322,871 |
|
|
| 37.2 | % |
Name of Beneficial Owner | Number of shares Beneficially Owned | Percentage Beneficially Owned | ||||||
Greater than 5% Stockholders | ||||||||
Entities affiliated with ARCH Venture Partners(1) | 12,916,663 | 9.6 | % | |||||
SVF Endurance (Cayman) Ltd.(2) | 18,319,938 | 13.7 | % | |||||
Glaxo Group Limited(3) | 8,550,954 | 6.4 | % | |||||
The Vanguard Group(4) | 10,094,501 | 7.5 | % | |||||
BlackRock, Inc.(5) | 14,136,628 | 10.6 | % | |||||
Named Executive Officers and Directors | ||||||||
George Scangos, Ph.D.(6) | 6,377,581 | 4.8 | % | |||||
Howard Horn(7) | 381,498 | * | ||||||
Johanna Friedl-Naderer(8) | 35,080 | * | ||||||
Phillip Pang, M.D., Ph.D.(9) | 231,535 | * | ||||||
Ann (Aine) Hanly, Ph.D.(10) | 61,650 | * | ||||||
Herbert (Skip) Virgin, M.D., Ph.D.(11) | 220,775 | * | ||||||
Marianne De Backer, MSc, Ph.D., MBA | — | — | ||||||
Vicki Sato, Ph.D.(12) | 1,595,796 | 1.2 | % | |||||
Jeffrey S. Hatfield(13) | 66,795 | * | ||||||
Robert More(14) | 572,459 | * | ||||||
Janet Napolitano(15) | 56,716 | * | ||||||
Robert Nelsen(16) | 13,565,120 | 10.13 | % | |||||
Robert Perez(17) | 118,503 | * | ||||||
Saira Ramasastry(18) | 94,924 | * | ||||||
Phillip Sharp, Ph.D.(19) | 341,006 | * | ||||||
Elliott Sigal, M.D., Ph.D.(20) | 66,153 | * | ||||||
All current executive officers and directors as a group (16 persons)(21) | 24,246,742 | 18.1 | % | |||||
| * | Represents beneficial ownership of less than 1%. |
| (1) | Based solely on information as of August 12, 2022, contained in a Schedule 13D/A filed with the SEC by ARCH Venture Fund IX, L.P. on September 13, 2022. Consists of (i) |
25
| all shares held by ARCH IX and ARCH Overage. As managing directors of ARCH IX LLC, each of Keith Crandell, Clinton Bybee, and Mr. Nelsen (a member of |
| (3) |
|
| (4) | Based solely on information as of December 30, 2022, contained in a Schedule 13G/A filed with the SEC by The Vanguard Group on February 9, 2023. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. |
| (5) | Based solely on information as of December 31, 2022, contained in a Schedule 13G/A filed with the SEC by BlackRock, Inc. on January 24, 2023. Consists of 14,136,628 shares held by BlackRock, Inc. BlackRock, Inc. has the sole power to vote or to direct the vote of 13,837,001 shares and the sole power to dispose or to direct the disposition of 14,136,628 shares. The address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055. |
| (6) | Consists of (i) |
|
|
|
|
| (7) | Consists of |
| (8) | Consists of (i) 21,018 shares of common stock directly held by Ms. Friedl-Naderer and (ii) 14,062 shares of common stock issuable upon vesting of RSUs and exercise of stock options held by Ms. Friedl-Naderer that are exercisable within 60 days of April 3, 2023. |
| (9) | Consists of (i) 53,000 shares of common stock directly held by Dr. Pang and (ii) 178,535 shares of common stock issuable upon vesting of RSUs and exercise of stock options held by Dr. |
| (10) | Consists of (i) |
| (11) | Consists of 220,775 shares of common stock directly held by Dr. Virgin. |
| (12) | Consists of (i) 1,320,919 shares of common stock directly held by Dr. Sato and (ii) 274,877 shares of common stock issuable upon vesting of RSUs and exercise of stock options held by Dr. Sato that are exercisable within 60 days of |
| (13) | Consists of (i) |
| (14) | Consists of (i) 489,485 shares of common stock held by Alta Partners NextGen Fund I, L.P. (“APNG I”), |
| (15) | Consists of (i) 3,374 shares of common stock directly held by Ms. Napolitano and (ii) 53,342 shares of common stock issuable upon vesting of RSUs and exercise of stock options held by Ms. Napolitano that are exercisable within 60 days of April 3, 2023. |
| (16) | Consists of (i) the shares held by ARCH IX and ARCH Overage disclosed in footnote (1) |
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| Mr. Nelsen is a trustee and (iv) 50,848 shares of common stock issuable upon vesting of RSUs and exercise of stock options held by Mr. Nelsen that are exercisable within 60 days of April 3, 2023. Mr. Nelsen is a managing director of ARCH IX LLC and may be deemed to beneficially own the shares held by ARCH IX and ARCH Overage as disclosed in footnote (1). |
| (17) | Consists of |
| (18) | Consists of (i) |
| (19) | Consists of (i) 108,742 shares of common stock held directly by Dr. Sharp, (ii) 44,444 shares of common stock held |
| (20) | Consists of (i) 3,374 shares of common stock held directly by Dr. Sigal, (ii) 10,000 shares of common stock held in the name of Sigal Family Investments, LLC and (iii) 52,779 shares of common stock issuable upon vesting of RSUs and exercise of stock options held by Dr. Sigal that are exercisable within 60 days of April 3, 2023. Dr. Sigal is a managing member of Sigal Family Investments, LLC. |
| (21) | Includes the shares described in footnote (6), footnotes (8) through (10), footnotes (12) through (20) and shares held or stock issuable upon exercise of stock options that are exercisable within 60 days of April 3, 2023, by executive officers who are not named in the table above. |
27
Delinquent Section 16(A) Reports
DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Exchange Act requires our directors, and executive officers and persons who own more than ten percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.
To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the fiscal year ended December 31, 2019,2022, all Section 16(a) filing requirements applicable to its officers, directors and greater than ten percent beneficial owners were complied with.with except that one Form 4 report covering two transactions was filed late for Dr. Scangos and that the initial Form 3 and one Form 4 covering two transactions for Ms. Friedl-Naderer were filed late.
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EXECUTIVE COMPENSATION
Compensation Discussion & Analysis
Overview
This Compensation Discussion and Analysis (“CD&A”) discusses the compensation philosophy, policies and programs underlying our executive compensation decisions in 2022. This section provides a narrative overview of the factors relevant to these decisions and how compensation is awarded to our named executive officers (our “NEOs”) for the fiscal year ended December 31, 2022, which consist of the following executives:
George Scangos, Ph.D., our former President and Chief Executive Officer (the “CEO”)*
Howard Horn, our Executive Vice President and former Chief Financial Officer*
Johanna Friedl-Naderer, our Executive Vice President and Chief Operating Officer**
Phillip Pang, M.D., Ph.D., our Executive Vice President, Chief Medical Officer and Interim Head of Research
Ann (Aine) Hanly, Ph.D., our Executive Vice President and Chief Technology Officer
Herbert (Skip) Virgin, M.D., Ph.D., our former Executive Vice President, Research and Chief Scientific Officer*
| * | See the sections entitled “—CEO Transition” and “—Other Named Executive Officer Changes” below for more details on recent leadership changes. |
| ** | Ms. Friedl-Naderer joined Vir effective March 2, 2022. |
Executive Summary
We are a commercial-stage immunology company focused on combining immunologic insights with cutting-edge technologies to treat and prevent serious infectious diseases. Infectious diseases are among the leading causes of death worldwide and can cause trillions of dollars of direct and indirect economic burden each year as evidenced by the coronavirus disease 2019 (“COVID-19”) pandemic.
Business Highlights
Our current pipeline consists of sotrovimab (previously VIR-7831; and where marketing authorization has been granted, marketed under the brand name Xevudy®), and other product candidates targeting hepatitis B virus (“HBV”), hepatitis D virus (“HDV”), influenza A virus, and human immunodeficiency virus (“HIV”). We have assembled four technology platforms, focused on antibodies, T cells, innate immunity and small interfering ribonucleic acid through internal development, collaborations and acquisitions. We have built an industry-leading team that has deep experience in immunology, infectious diseases, and product development and commercialization. Given the global impact of infectious diseases, we are committed to developing cost-effective treatments that can be delivered at scale.
During 2022 we achieved several important business milestones and patient outcomes, including but not limited to the following:
| • | Delivered sotrovimab to patients around the world: Approximately 1.5 million doses delivered and $1.5 billion of sotrovimab collaboration revenue recognized. |
| • | Extended our leadership in HBV functional cure development: Shared important new monotherapy and combination therapy clinical data. |
| • | Expanded our clinical pipeline to include HDV chronic treatment development: Initiated a new Phase 2 monotherapy and combination therapy clinical trial. |
| • | Executed next steps in groundbreaking influenza prevention portfolio: Initiated new Phase 1b and Phase 2 clinical trials and secured investment from Biomedical Advanced Research and Development Authority (“BARDA”) for the development of candidates for influenza and potentially other infectious diseases. |
| • | Announced data from our first HIV trial using novel human cytomegalovirus vaccine platform. |
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CEO Transition
On January 19, 2023, Dr. Scangos notified the Board of Directors of his decision to retire as Chief Executive Officer and President effective April 3, 2023. Following his retirement, Dr. Scangos will transition to an advisory role through June 2, 2023, and will continue to serve on the Board of Directors as a Class III director until the Company’s 2025 annual meeting of stockholders and until his successor is duly elected and qualified, or until his earlier death, resignation or removal.
On January 19, 2023, the Board of Directors appointed Dr. De Backer as Chief Executive Officer of the Company, effective as of April 3, 2023. In addition, on April 3, 2023, the size of the Board of Directors increased to 11 directors, and Dr. De Backer joined the Board as a Class II director until the Company’s 2024 annual meeting of stockholders and until her successor is duly elected and qualified, or until her earlier death, resignation or removal.
Other Named Executive Officer Changes
In March 2022 Ms. Friedl-Naderer joined the Company as our Executive Vice President and Chief Business Officer, Global and in April became our Chief Operating Officer. In this role, Ms. Friedl-Naderer is responsible for shaping the Company’s corporate and portfolio strategy, as well as leading the global commercial organization, regulatory affairs, corporate affairs, and business development.
In August 2022 Dr. Virgin resigned from the Company as Executive Vice President, Research and Chief Scientific Officer. To maintain continuity and alignment across our R&D programs, Dr. Pang, our Chief Medical Officer, assumed additional responsibilities as interim Head of Research. He continues to serve in this capacity.
In March 2023 Mr. Lee was appointed as Executive Vice President and Chief Financial Officer of the Company. Mr. Horn will remain with the Company as Executive Vice President until April 28, 2023, to assist with the transition.
Executive Compensation Highlights
Our executive compensation program is designed to enable us to attract and retain the top talent necessary for the success of our long-term business strategy. Each year we review our current compensation practices to ensure that they remain fair yet competitive. The highlights of our 2022 executive compensation program are as follows:
| • | Payout of 70% of target in short-term corporate incentive plan: In determining 2022 payouts for our NEOs, the CompensationCommittee reviewed numerous factors relating to both corporate performance and individual performance against the goals and priorities for the year. See the section entitled “—Short-Term Corporate Incentive Plan” below for further information. |
| • | Granted annual equity awards: The Compensation Committee grants annual equity awards inthe first quarter of each year. Equity award sizes are determined based on a variety of factors, including the Compensation Committee’s review of competitive market analysis, current equity holdings and individual performance. Annual equity awards are granted as a mix between RSUs and stock options. The average grant date fair value across the NEOs was down 56% in 2022 versus the prior year. See the section entitled “ —Long-Term Incentive Compensation” below for further information. |
| • | Granted transition RSU awards: The Compensation Committee also granted transition RSU awards to select NEOs coinciding with the annual equity awards granted on February 22, 2022. The RSU awards were granted to ensure business continuity and better align unvested equity holdings with market during a time of transition for the Company. See the section entitled “—Long-Term Incentive Compensation” below for further information. |
| • | Significant portion of compensation tied to corporate performance: The majority of each NEO’s pay is “at-risk” and is tied tocorporate performance, whether through our short-term corporate incentive plan, which is tied to short-term objectives, or through equity-based compensation, which is tied to the long-term performance of the Company. |
2023 CEO Compensation
Upon appointment as CEO, Dr. De Backer’s annualized base salary was set at $900,000 and with an annual target bonus percentage of 80% of her annualized base salary. Dr. De Backer will also receive a one-time cash sign-on bonus of $5,000,000, which will be paid in two equal installments: (i) $2,500,000 will be paid on or around April 3, 2023, the time of
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her appointment as CEO (the “First Installment”), and (ii) $2,500,000 will be paid on or around April 3, 2024 (the “Second Installment”), subject to Dr. De Backer’s continued employment with the Company on April 3, 2024. If the Company terminates Dr. De Backer’s employment without Cause or Dr. De Backer resigns for Good Reason (each as defined in the Vir Biotechnology, Inc. Change in Control and Severance Benefit Plan) prior to payment of the Second Installment, the Company will pay Dr. De Backer the Second Installment in the Company’s next regular payroll cycle following the separation date. If Dr. De Backer’s employment is terminated by the Company for Cause or if Dr. De Backer resigns her employment without Good Reason prior to April 3, 2024, Dr. De Backer will not be eligible for or have a right to receive the Second Installment. For the avoidance of doubt, any termination of Dr. De Backer’s employment prior to April 3, 2024, will have no effect on the Company’s payment to Dr. De Backer, or her retention of, the First Installment.
In addition, on April 3, 2023, Dr. De Backer was granted a sign-on equity award of 1,152,904 stock options (the “De Backer Option”) and 576,452 RSUs (the “De Backer RSUs” and together with the De Backer Option, the “De Backer Equity Awards”). 25% of the total number of shares subject to the De Backer Option will vest and become exercisable on April 3, 2024, and the remainder will vest in 36 equal monthly installments thereafter. The De Backer RSUs will vest in four equal installments beginning April 3, 2024, until fully vested on April 3, 2027. In the event of a Change in Control (as defined in the Vir Biotechnology, Inc. 2019 Equity Incentive Plan), all shares, options and other securities subject to unvested De Backer Equity Awards (other than the portion of such De Backer Equity Awards that would otherwise have vested during the six-month period after the date of such Change in Control (the “Carved Out Equity”)) that are granted pursuant to Section 7(a) of the Employment Letter Agreement dated January 19, 2023, by and between the Company and Dr. De Backer will become fully vested and exercisable and no longer subject to any restrictions or forfeiture upon such Change in Control. The Carved Out Equity will, subject to Dr. De Backer’s continued employment with the Company or its successor in such Change in Control, continue to vest over the first six months after the date of the Change in Control in accordance with the vesting schedule in effect prior to the Change in Control; provided, that in the event Dr. De Backer’s employment is terminated either by the Company (or its successor) without Cause or by Dr. De Backer for Good Reason then all such Carved Out Equity will immediately become fully vested and exercisable and no longer subject to any restrictions or forfeiture.
Dr. De Backer’s compensation package reflected arms’ length negotiations with her and the consideration of competitive market data by the Board of Directors. See the section entitled “—Agreements with Named Executive Officers” below for further information.
2022 Executive Compensation Policies and Practices
What We Do | What We Don’t Do | |||||
| Compensation Committee of Independent Directors: The Compensation Committee is entirely composed of independent directors. |
| No Guaranteed Compensation: Although we have signed employment letter agreements with each of our NEOs, these agreements provide for “at will” employment, and none of these employment letter agreements provide any guarantees relating to base salary increases or the amounts of any annual incentive awards or long-term equity awards. | |||
| Risk Analysis: We review the structure of our executive compensation program to minimize the risk of inappropriate risk-taking by our executive officers. |
| No Hedging or Pledging our Common Stock: Our Insider Trading Policy prohibits employees, directors and designated consultants from engaging in hedging or pledging our common stock as collateral for a loan, or other monetization transactions with respect to our common stock or borrowing against our common stock. | |||
| Multi-Year Vesting: Equity awards granted to our NEOs in 2022 vest over a three-year or four-year period, as applicable. |
| We do not provide tax reimbursement payments (including “gross-ups”) on perquisites or other personal benefits, other than for qualified relocation expenses, in-line with our standard policy for newly hired employees. | |||
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What We Do | What We Don’t Do | |||||
| Annual compensation review: The Compensation Committee undertakes a comprehensive review of compensation of our executives, including our NEOs, on an annual basis. |
| No Special Health or Welfare Benefits and Limited Perquisites: Our NEOs participate in our broad-based Company-sponsored health and welfare benefits programs on the same basis as our other full-time salaried employees. We generally do not provide perquisites or personal benefits to our NEOs, except in limited circumstances. | |||
| Double-Trigger Change-in-Control: Our change in control and severance benefit plan requires a double-trigger condition prior to awarding our executives with enhanced severance compensation and benefits (including the acceleration of equity awards). |
| No Special Retirement Benefits: We do not provide pension arrangements or post-retirement health coverage for our U.S.-based NEOs or employees. Our U.S.-based NEOs and other employees are eligible to participate in our 401(k) plan. | |||
| Clawback Policy and Equity Ownership Guidelines: Beginning in 2022 we expanded our clawback policy and adopted equity ownership guidelines consistent with the broader market in response to feedback from our stockholders. | |||||
| Independent Compensation Consultant: The Compensation Committee engages its own compensation consultant and reviews its independence from management on an annual basis. | |||||
Executive Compensation Philosophy and Overview
Our executive compensation program is designed to enable us to attract and retain outstanding talent, to motivate management to achieve the Company’s critical priorities, and to align management’s incentives with the long-term interests of our stockholders. In line with this philosophy, our executive compensation program consists of three primary elements:
Base salary
Short-term cash incentive
Long-term equity incentive
The Compensation Committee believes that these three elements – balancing the portion of “base” and “at risk” compensation—serve to both compensate management for their service and align their interests with those of our stockholders. Though the Compensation Committee has not adopted any formal policies or guidelines that dictate the allocation of compensation between these elements, the emphasis is on the “at risk” elements of pay through short-term and long-term incentives. The Compensation Committee reviews executive compensation annually to ensure both pay levels and mix remain competitive and allow us to recruit and retain the caliber of executive officers necessary to fulfill our critical mission of creating a world without infectious disease.
Process of Setting Executive Compensation
Role of the Compensation Committee and the Board
Each year the Compensation Committee reviews our executive compensation strategy, evaluates and approves our compensation levels and design, assesses the risk profile of our executive incentive programs and evaluates both corporate performance and the individual performance of each NEO.
Specifically, the Compensation Committee meets towards the end of the year to review our NEOs’ pay levels as they relate to the broader market. Official compensation decisions for NEOs are typically made during the first Compensation Committee meeting of the following year. This two-step process gives the Compensation Committee time to thoughtfully determine each NEO’s individual pay elements and target total compensation opportunity.
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In determining pay, the Compensation Committee evaluates several factors, including:
The Company’s performance during the prior year against corporate goals;
Each NEO’s positioning against other similarly situated executives at peer companies given their relative scope of responsibilities, skillset and experience;
Each NEO’s individual contributions to our overall performance for the year; and
The recommendations of the CEO for NEOs, other than the CEO.
Role of Management
The Compensation Committee works with management, including the CEO, when reviewing and setting executive compensation for all NEOs other than the CEO. Management generally provides information on corporate and individual performance and works with the independent compensation consultant to provide external market compensation data.
The CEO provides recommendations on the compensation packages for our NEOs other than themself as well as input and recommendations regarding individual executive performance. The CEO is also instrumental in developing both our annual and long-term strategic objectives and goals used in our incentive programs, which are reviewed by both the Compensation Committee and the Board of Directors, and in providing perspective on our performance against those goals. No NEOs, including the CEO, are involved in their own compensation decisions.
Role of the Independent Compensation Consultant
Since 2019, the Compensation Committee has engaged an independent external consultant, Semler Brossy, to advise on overall compensation matters, including:
Guidance and recommendations on the composition of our compensation peer group;
| • | Market data for analysis and design of the compensation levels of our executive officers and non-employee directors; |
Overall compensation program design;
Guidance on our compensation philosophy and strategy;
Input on compensation actions for executive promotions and new hires; and
Input on the Executive Compensation portion of our CD&A.
Semler Brossy reports directly to the Compensation Committee and to its Chair. Additionally, Semler Brossy works with management to source market data and to arrive at market benchmarks for NEOs. Each year, the Compensation Committee performs an assessment of Semler Brossy’s independence. In 2022 the Compensation Committee determined that Semler Brossy is independent consistent with the listing standards of the relevant Nasdaq and SEC rules and that Semler Brossy’s engagement does not raise any conflict of interest. During 2022 Semler Brossy did not provide services to the Company other than the services to the Compensation Committee described herein.
Role of Market Data
The Compensation Committee uses competitive market analyses from a group of peer companies as one input for compensation decisions when reviewing executive compensation levels and practices. The Compensation Committee also uses market data from broader Radford Global Life Sciences compensation surveys and their own knowledge and judgement in evaluating market data when making compensation decisions.
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With the assistance of its compensation consultant, the Compensation Committee considers several factors when reviewing companies for inclusion; primary factors for consideration are industry (biotechnology and pharmaceuticals), stage of drug development, and market valuation. Other key factors considered include similarity of our therapeutic and technological focus, number of employees, R&D spend, and breadth of platforms and clinical trials. The following 22 companies were approved in December 2021 and were used for 2022 compensation decisions:
| Acceleron Pharma Inc. | BridgeBio Pharma, Inc. | Iovance Biotherapeutics, Inc. | ||
| Allakos Inc. | CRISPR Therapeutics AG | Mirati Therapeutics, Inc. | ||
| Allogene Therapeutics, Inc. | Denali Therapeutics Inc. | Novavax, Inc. | ||
| Arrowhead Pharmaceuticals, Inc. | Editas Medicine Inc. | Reata Pharmaceuticals, Inc. | ||
| Beam Therapeutics Inc. | Global Blood Therapeutics, Inc. | REGENXBIO Inc. | ||
| Biohaven Pharmaceutical Holding Company Ltd | Inovio Pharmaceuticals, Inc. | Turning Point Therapeutics, Inc. | ||
| Blueprint Medicines Corporation | Intellia Therapeutics, Inc. | Ultragenyx Pharmaceutical Inc. | ||
| Xencor, Inc. | ||||
In September 2022 the Compensation Committee approved an updated peer group for 2023 compensation decisions. The Compensation Committee added two biotechnology companies with similar valuations (Apellis Pharmaceuticals, Inc. and Dynavax Technologies Corporation), removed two companies due to low market valuations relative to the Company (Inovio Pharmaceuticals, Inc. and Allakos Inc.), and removed one company due to its acquisition (Acceleron Pharma Inc.).
Stockholder Engagement
The Company is committed to engagement with stockholders. We 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 such as introducing equity ownership guidelines and an expanded clawback policy in 2022.
Executive Compensation Program and Compensation Decisions for the Named Executive Officers
The primary components of our executive compensation program in 2022 were as follows:
Compensation Component | Detail | Rationale | ||
Base Salary | Fixed compensation component payable in cash. Reviewed annually and adjusted when appropriate. | The salaries paid to our NEOs are critical to attracting and retaining top talent with demonstrated track records of success. | ||
Short-Term Corporate Incentive Plan | Performance-based variable cash component based on attainment against pre-established goals and assessment of individual performance. | Annual corporate performance objectives that are intended to be the most significant drivers of our short-term and long-term success. | ||
Option Awards | Performance-based equity awards that provide value to our NEOs with sustained stock price appreciation. Option awards vest over four years, with one-quarter vesting on the first anniversary of grant, then monthly thereafter. | The options align interests with those of our stockholders and will only provide value if the Company’s share price appreciates beyond the grant price. | ||
RSU Awards | Time-based equity awards that vest one-quarter on each of the first four anniversaries of grant. | The RSUs align long-term interests with those of our stockholders. They also provide our NEOs with a more stable and retentive form of equity compensation than options, which are subject to stock price volatility. | ||
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Annual Base Salary
The base salaries for our NEOs are designed to provide them with a stable, fixed pay element for their services throughout the year. The Compensation Committee sets the base salary levels with consideration to each NEO’s experience, skills and responsibilities, market data for similar roles at peer companies, the recommendations of the CEO, and may also draw upon the experience of members of the Board of Directors and broader market practices and data. The Compensation Committee reviews executive salaries each year – typically in connection with our annual performance review process – adjusting from time to time as appropriate to align with market competitive pay levels, accounting for individual responsibilities, performance and experience.
In February 2022, consistent with the process detailed above, the Compensation Committee reviewed the base salaries of each NEO. At that time, the Compensation Committee increased the base salaries for Mr. Horn, Dr. Pang, and Dr. Virgin by approximately 3%, consistent with annual merit increases across the rest of the Company. The Compensation Committee increased the base salaries for Dr. Scangos and Dr. Hanly by 12.1% and 7.9%, respectively, to be more in-line with market practice.
The 2022 base salaries for our NEOs were as follows:
Name | 2021 Base Salary | 2022 Base Salary | % Increase | |||||||||
George Scangos, Ph.D. | $ | 580,000 | $ | 650,000 | 12.1 | % | ||||||
Howard Horn | $ | 463,500 | $ | 477,500 | 3.0 | % | ||||||
Johanna Friedl-Naderer | — | $ | 535,000 | — | ||||||||
Phillip Pang, M.D., Ph.D. | $ | 494,400 | $ | 510,000 | 3.2 | % | ||||||
Ann (Aine) Hanly, Ph.D. | $ | 445,000 | $ | 480,000 | 7.9 | % | ||||||
Herbert (Skip) Virgin, M.D., Ph.D. | $ | 658,819 | $ | 675,000 | 2.5 | % | ||||||
Short-Term Corporate Incentive Plan
Our NEOs are eligible to receive an annual cash incentive based on individual and Company performance, which is designed to incentivize our NEOs to achieve critical short-term goals and to align their payouts with our business strategy.
Each of our NEOs is assigned a target annual incentive opportunity based upon a percentage of his or her base salary with consideration to each NEO’s accountability, scope of responsibilities and potential impact on our performance. Based on the recommendations of the Compensation Committee, the Board approved each NEO’s target bonus for 2022. The target bonus percentage for Dr. Scangos increased from 60% to 65% in 2022 to bring target total cash levels more in-line with CEOs at peer companies. Similarly, the target bonus percentages for the NEOs increased from 40% to 45% to align target bonus opportunities with peer practice.
The target annual opportunities for our NEOs were as follows:
Name | 2021 Target Bonus as a % of Base Salary | 2022 Target Bonus as a % of Base Salary | 2022 Target Bonus Value | |||||||||
George Scangos, Ph.D. | 60 | % | 65 | % | $ | 422,500 | ||||||
Howard Horn | 40 | % | 45 | % | $ | 214,875 | ||||||
Johanna Friedl-Naderer | — | 45 | % | $ | 240,750 | |||||||
Phillip Pang, M.D., Ph.D. | 40 | % | 45 | % | $ | 229,500 | ||||||
Ann (Aine) Hanly, Ph.D. | 40 | % | 45 | % | $ | 216,000 | ||||||
Herbert (Skip) Virgin, M.D., Ph.D.(1) | 40 | % | 45 | % | $ | 303,750 | ||||||
| (1) | Dr. Virgin resigned from the Company effective August 30, 2022, and was not eligible for an annual bonus payout under our 2022 short-term corporate incentive plan. |
Payout of each NEO’s annual incentive is based on corporate attainment against a set of pre-determined goals approved by the Board of Directors each year following the recommendation of the Compensation Committee (typically in February).
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After corporate performance against the strategic goals has been approved, each NEO’s incentive is subject to further adjustments up or down based on the Compensation Committee’s qualitative determination of the executive’s individual performance for the year.
2022 Corporate Incentive Plan Performance Objectives
At the beginning of each year, the Compensation Committee determines the annual corporate performance objectives that are intended to be the most significant drivers of our short-term and long-term success.
For 2022 our goals were defined across seven categories: commercial, development, research, financial and business development, corporate affairs, legal, infrastructure and compliance goals, and people and culture. The weightings of each goal category are detailed in the table below.
2022 Corporate Incentive Plan Outcomes
Goal | Achievement | |||
Commercial Goals (10% weight) | Partial Achievement • Manufactured an agreed upon number of sotrovimab doses. • Delivered approximately 1.5 million sotrovimab doses worldwide. • Other specific goals relating to sotrovimab were not fully achieved. | |||
Development Goals (35% weight) | Partial Achievement • HBV – Released preliminary data from Part A of the Phase 2 MARCH trial evaluating VIR-2218 and VIR-3434 combination regimens as a functional cure for chronic HBV infection. • HDV – Initiated Phase 2 SOLSTICE trial evaluating VIR-2218 and VIR-3434 as monotherapy and in combination for the treatment of people living with chronic HDV. • Flu – Initiated Phase 2 PENINSULA trial evaluating the role of VIR-2482, a monoclonal antibody, in the prevention of Influenza A. • HIV – Announced data for VIR-1111, our first HIV trial using novel human cytomegalovirus vaccine platform. Completed investigational new drug-enabling activities for the initiation of a Phase 1 trial of VIR-1388. • COVID-19 – Other specific goals relating to COVID-19 and sotrovimab were not fully achieved. | |||
Research Goals (25% weight) | Partial Achievement • Specific achievement not disclosed due to potential competitive harm. | |||
Financial & Business Development Goals (5% weight) | Met Target • Controlled total cash spend to meet Board-approved 2022 budget. | |||
Corporate Affairs Goals (10% weight) | Met Target • Executed two strategic collaborations with government or non-governmental organizations. • Significantly increased the Company’s visibility in social and mainstream media. | |||
Legal, Infrastructure & Compliance Goals (5% weight) | Met Target • Implemented commercial health care compliance controls and trainings. • Ensured quality and compliance with all applicable good practice (GxP) regulations leading to successful inspections. • Developed and communicated an ESG statement. |
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Goal | Achievement | |||
People and Culture Goals (10% weight) | Met Target • Used scores from the Annual Employee Survey to assess improvement across key areas of company culture, workload, and manager effectiveness. |
In February 2023, the Compensation Committee evaluated our achievement of the 2022 corporate goals and determined that they had been achieved at a level of 70.0% of target for Executive Vice Presidents, including our NEOs. While the execution was there to deliver on certain goals, emerging COVID-19 variants and the status of sotrovimab with the U.S. Food and Drug Administration impacted our ability to achieve several of our commercial and development goals. Additionally, we did not achieve all our pre-clinical research goals for 2022. Notwithstanding, the Company continued to execute on key priorities across the rest of our pipeline and achieved other major milestones that were not originally anticipated or part of the corporate goals, which the Committee considered in determining the 70.0% corporate attainment.
Payouts for each executive were considered with respect to individual performance. Final 2022 payouts as a percentage of target are detailed below:
Name | 2022 Base Salary | 2022 Target Bonus % of Salary | 2022 Corporate Attainment % | 2022 Individual Attainment % | 2022 Bonus Payout | |||||||||||||||
George Scangos, Ph.D. | $ | 650,000 | 65 | % | 70 | % | 100 | % | $ | 295,750 | ||||||||||
Howard Horn | $ | 477,500 | 45 | % | 70 | % | 100 | % | $ | 150,413 | ||||||||||
Johanna Friedl-Naderer | $ | 535,000 | 45 | % | 70 | % | 120 | % | $ | 202,230 | ||||||||||
Phillip Pang, M.D., Ph.D. | $ | 510,000 | 45 | % | 70 | % | 120 | % | $ | 192,780 | ||||||||||
Ann (Aine) Hanly, Ph.D. | $ | 480,000 | 45 | % | 70 | % | 120 | % | $ | 181,440 | ||||||||||
Herbert (Skip) Virgin, M.D., Ph.D.(1) | $ | 675,000 | 45 | % | — | — | — | |||||||||||||
| (1) | Dr. Virgin resigned from the Company effective August 30, 2022, and was not eligible for an annual bonus payout under our 2022 short-term corporate incentive plan. |
When assessing the individual performance of the NEOs, the Compensation Committee decided to set individual attainment for Drs. Pang and Hanly, and Ms. Friedl-Naderer at 120% of target based on their individual contributions throughout the year. Dr. Scangos’ and Mr. Horn’s individual attainment were set at 100% of target.
Dr. Scangos’ payout reflects his leadership of the Company through a seminal year: having remained on the front lines of the COVID-19 pandemic, initiated multiple clinical trials, secured a government contract with the potential for up to $1 billion, and recognized $1.5 billion in revenue. His leadership has helped ensure that the Company stands on an exceptionally strong foundation through the upcoming leadership transitions.
Ms. Friedl-Naderer’s payout reflects her significant impact to the Company, having helped grow the global commercial and business development groups, as well as her pivotal role in shaping and evolving our long-term strategy. Dr. Pang’s payout reflects his leadership of the clinical development function, having successfully advanced our pipeline across several therapeutic areas, including the early and full enrollment of the VIR-2482 Phase 2 PENINSULA Flu trial. Dr. Hanly’s payout reflects her leadership of the technical operations function, helping enable the Company’s on-time supply of materials for clinical studies across the globe.
In addition to the payouts in the table above, the Compensation Committee decided to award one-time special recognition bonuses of $100,000 and $125,000 to Ms. Friedl-Naderer and Dr. Pang, respectively. The additional bonus to Ms. Friedl-Naderer recognized her expanded role as Chief Operating Officer and how critical her role is to the growth and success of the Company. The additional bonus to Dr. Pang recognized his enhanced responsibility after stepping into the role of interim Head of Research.
Long-Term Incentive Compensation
Long-term incentive compensation granted in the form of equity awards is a critical portion of our overall compensation program. Equity awards are intended to (i) further align the interests of our NEOs with the interests of our stockholders, (ii) emphasize long-term financial performance, (iii) reward sustained share price appreciation and (iv) support the retention of our management team.
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Given the nature of the Company and business, we have experienced high stock price volatility. To help manage challenges with volatility, we worked to design the program to emphasize long-term, sustained performance, which includes:
Annual equity grants to establish overlapping grant vesting, which are on a more frequent and consistent basis, further extending and reinforcing the program’s long-term orientation and retentive value.
A mix of equity awards that include both RSUs and stock options. RSUs provide more certainty in value during periods of stock market volatility. Stock options are provided as a performance-oriented equity vehicle given they require an increase in the stock price to deliver value to our NEOs.
Equity ownership guidelines to reinforce outright ownership and further align executive interests with those of our stockholders.
Our annual RSUs and stock options both vest over a four-year period. Subject to continued employment with the Company, the RSUs vest in equal installments of 25% annually, and the shares subject to stock options cliff vest at a rate of 25% after one year of service, and the reminder vest monthly thereafter for an additional three years.
2022 Annual Equity Awards
The Compensation Committee considers a variety of factors in determining the size of the annual equity awards. These factors include regular analyses of each NEO’s outstanding unvested and total equity holdings relative to peer executives, the total value of each NEO’s annual target compensation package relative to peer executives, promotions or changes in role, recognition of significant contributions and retention objectives.
In addition to the factors listed above, the Compensation Committee continues to evaluate both the grant date fair value and the total number of shares given the high volatility of our stock price. The Compensation Committee recognizes that grant date fair value can be a misleading indication of competitiveness with a volatile stock similar to the Company’s stock. As a result, there is a specific focus on the number of shares granted and potential realizable value, which we believe are better indications of the overall competitiveness of the program than grant date fair value.
On February 22, 2022, the Compensation Committee approved the following annual equity awards to our NEOs with the Company’s standard vesting schedules as described above:
Name | # Annual RSUs | # Annual Options | ||||||
George Scangos, Ph.D. | 111,000 | 222,000 | ||||||
Howard Horn | 25,000 | 50,000 | ||||||
Johanna Friedl-Naderer(1) | — | — | ||||||
Phillip Pang, M.D., Ph.D. | 32,000 | 64,000 | ||||||
Ann (Aine) Hanly, Ph.D. | 23,500 | 47,000 | ||||||
Herbert (Skip) Virgin, M.D., Ph.D.(2) | 35,000 | 70,000 | ||||||
| (1) | Ms. Friedl-Naderer received 90,000 RSUs and 45,000 options upon her start date on March 2, 2022. |
| (2) | Dr. Virgin resigned from the Company effective August 30, 2022, and forfeited all of the RSUs and options that were subject to this grant. |
The number of annual RSUs and stock options granted in 2022 were generally consistent with the number granted in the prior year. As a result, overall grant date fair values across our NEOs were lower due to a 56% reduction in grant price in 2022 as compared to the prior year.
Transition RSU Awards
On February 22, 2022, the Compensation Committee also approved additional RSU grants to select NEOs. These awards were granted to:
Ensure business continuity and stability during a critical transitionary period for the Company
Provide longer-term retention and align unvested equity holds with market
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The RSUs vest as follows: 2/3 of the shares vest after the second anniversary of the grant date, and the final 1/3 of shares vest on the third anniversary of the grant date. The number of shares provided the executives are outlined below:
Name | # RSUs | |||
Howard Horn | 10,000 | |||
Phillip Pang, M.D., Ph.D. | 35,000 | |||
Ann (Aine) Hanly, Ph.D. | 30,000 | |||
Herbert (Skip) Virgin, M.D., Ph.D.(1) | 35,000 | |||
| (1) | Dr. Virgin resigned from the Company effective August 30, 2022, and forfeited all the RSUs that were subject to this grant. |
Health and Welfare Benefits
All of our NEOs are eligible to participate in our employee benefit plans, including our medical, dental, vision, disability and life insurance plans, in each case on the same basis as all of our other employees.
Section 401(k) Plan
Our NEOs other than Ms. Friedl-Naderer, who participates in the Swiss pension plan described below in our Summary Compensation Table, are eligible to participate in a defined contribution retirement plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax-advantaged basis. Eligible employees may defer eligible compensation on a pre-tax or after-tax (Roth) basis, up to the statutorily prescribed annual limits on contributions under the Internal Revenue Code of 1986, as amended (the “Code”). Contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participant’s directions. We currently match 100% of employee contributions of the first 3% of eligible compensation, and 50% of contributions on the next 2% of eligible compensation. Participants are immediately and fully vested in all contributions. The 401(k) plan is intended to be qualified under Section 401(a) of the Code, and the 401(k) plan’s related trust is intended to be tax-exempt under Section 501(a) of the Code. As a tax-qualified retirement plan, contributions to the 401(k) plan (except for Roth contributions) and earnings on those contributions are not taxable to participants until distributed from the 401(k) plan.
Perquisites
We generally do not provide perquisites or personal benefits to our NEOs, except in limited circumstances, such as the temporary housing allowances provided to Dr. Virgin, reimbursements related to Dr. Hanly’s relocation to San Francisco, and given the amount of time the Company has asked Ms. Friedl-Naderer to spend in San Francisco, a temporary housing allowance for her. These arrangements are described in more detail under the section entitled “—Agreements with Named Executive Officers” below.
Post-Employment Compensation
Our NEOs, other than Ms. Friedl-Naderer, are entitled to certain severance and change of control payments and benefits pursuant to the Vir Biotechnology, Inc. Change in Control and Severance Benefit Plan, and, for Ms. Friedl-Naderer, pursuant to her employment letter agreement, each as described in more detail below in the section entitled “—Potential Payments Upon Termination or Change of Control.”
Given the industry in which we participate and the range of strategic initiatives that we may explore, we believe these arrangements are an essential element of our executive compensation package and assist us in recruiting and retaining talented individuals. In addition, since we believe it may be difficult for our NEOs to find comparable employment following an involuntary termination of employment in connection with or following a change in control of the Company, these payments and benefits are intended to ease the consequences to a NEO of an unexpected termination of employment. By establishing these payments and benefits, we believe we can mitigate the distraction and loss of our NEOs that may occur in connection with rumored or actual fundamental corporate changes and thereby protect stockholder interests while a transaction is under consideration or pending.
Accounting and Tax Considerations
While the Compensation Committee generally considers the financial accounting and tax implications to us of its executive compensation decisions, neither element was a material consideration in the compensation awarded to our NEOs in 2022. Under Financial Accounting Standard Board ASC Topic 718 (“ASC Topic 718”), we are required to estimate and record an
39
expense for each share-based payment award (including stock options) over the vesting period of the award. We record share-based compensation expense on an ongoing basis according to ASC Topic 718. Section 162(m) of the Code generally disallows a tax deduction to public companies for compensation in excess of $1 million paid in any one year to each of certain of the Company’s current and former executive officers. Historically, compensation that qualified under Section 162(m) as performance-based compensation was exempt from the deduction limitation. However, subject to certain transition rules, tax legislation signed into law in December 2017 eliminated the performance-based compensation exception. As a result, for taxable years beginning after December 31, 2017, all compensation in excess of $1 million paid in any one year to each of the specified officers that is not covered by the transition rules will not be deductible by us.
Risk Assessment Concerning Compensation Practices and Policies
Each year, the Compensation Committee reviews our compensation policies and programs to assess whether they may encourage our employees and executives to take inappropriate risks. In June 2022 the Compensation Committee reviewed our current compensation plans, including the mix of fixed and variable compensation, performance metrics, program oversight, measurement and payout timing, discretion and caps on short-term incentives, award size, vesting schedules and other terms of long-term equity incentives as well as other incentive opportunities and their features. After reviewing each of our compensation plans, the Compensation Committee determined that our compensation programs do not create risks that are reasonably likely to have a material adverse effect on our Company as a whole.
Compensation Committee Report*
The Compensation Committee has reviewed and discussed the Compensation Discussion & Analysis contained in this Proxy Statement with management and, based on such review and discussions, the Compensation Committee has approved the inclusion of the Compensation Discussion & Analysis in this Proxy Statement and its incorporation by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, for filing with the SEC.
Compensation Committee
Mr. Robert More (Chair)
Ms. Janet Napolitano
Dr. Philip Sharp
Dr. Elliott Sigal
| * | The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of the Company under the Exchange Act or the Securities Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. |
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Summary Compensation Table
The following table shows for the fiscal years ended December 31, 2019 and 2018, as applicable, compensation awarded to or paid to or earned by our named executive officers, which consist of our principal executive officer and our two other most highly compensated executive officers as ofNEOs during the years ended December 31, 2019, as follows:
George Scangos, Ph.D., our President2022, December 31, 2021, and Chief Executive Officer;
Howard Horn, our Chief Financial Officer;December 31, 2020, for the year(s) in which they were a NEO. For a narrative description of material factors helpful to understand the information disclosed in the table below for 2022, please see the Compensation Discussion & Analysis and
Herbert (Skip) Virgin, M.D., Ph.D., our Executive Vice President, Research and Chief Scientific Officer.
Summary Compensation Table the narrative to this table.
Name and principal position |
| Year |
| Salary ($)(1) |
|
| Bonus ($) (2) |
|
| Option awards ($) (3) |
|
| Non-equity incentive plan compensation ($) (4) |
|
| All other compensation ($) (5) |
|
| Total ($) |
| ||||||
George Scangos, Ph.D. |
| 2019 |
|
| 514,583 |
|
|
| — |
|
|
| 3,158,780 |
|
|
| 260,044 |
|
|
| 11,200 |
|
|
| 3,944,607 |
|
President and Chief Executive Officer |
| 2018 |
|
| 512,019 |
|
|
| — |
|
|
| — |
|
|
| 260,000 |
|
|
| 11,000 |
|
|
| 783,019 |
|
Howard Horn |
| 2019 |
|
| 413,333 |
|
|
| — |
| �� |
| 1,614,687 |
|
|
| 174,720 |
|
|
| 11,200 |
|
|
| 2,213,940 |
|
Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Herbert (Skip) Virgin, M.D., Ph.D. |
| 2019 |
|
| 617,500 |
|
|
| — |
|
|
| 1,018,963 |
|
|
| 248,400 |
|
|
| 84,000 |
|
|
| 1,968,863 |
|
Executive Vice President, Research and Chief Scientific Officer |
| 2018 |
|
| 592,308 |
|
|
| 600,000 |
|
|
| 627,750 |
|
|
| 259,000 |
|
|
| 84,000 |
|
|
| 2,163,058 |
|
Name and principal position | Year | Salary ($)(1) | Bonus ($)(2) | Stock awards ($)(3) | Option awards ($)(3) | Non-equity incentive plan compensation ($)(4) | Change in pension value and nonqualified deferred compensation earnings(5) | All other compensation ($)(6) | Total ($) | |||||||||||||||||||||||||||
George Scangos, Ph.D. | 2022 | 638,333 | — | 2,489,730 | 4,043,885 | 295,750 | — | 12,200 | 7,479,898 | |||||||||||||||||||||||||||
Former President and Chief Executive Officer | 2021 | 575,000 | — | 7,479,180 | 12,129,858 | 487,000 | — | 11,600 | 20,682,838 | |||||||||||||||||||||||||||
| 2020 | 544,583 | — | — | — | 438,900 | — | 11,400 | 994,883 | ||||||||||||||||||||||||||||
Howard Horn | 2022 | 475,167 | — | 1,031,800 | 1,233,355 | 150,413 | — | 12,200 | 2,902,935 | |||||||||||||||||||||||||||
Executive Vice President and Former Chief Financial Officer | 2021 | 461,250 | — | 1,684,500 | 2,731,950 | 259,560 | — | 11,600 | 5,148,860 | |||||||||||||||||||||||||||
| 2020 | 444,333 | — | — | 960,186 | 226,100 | — | 11,400 | 1,642,019 | ||||||||||||||||||||||||||||
Johanna Friedl-Naderer(7) | 2022 | 444,396 | 1,100,000 | 2,171,700 | 907,412 | 202,230 | 127,877 | 86,416 | 5,040,031 | |||||||||||||||||||||||||||
Executive Vice President and Chief Operating Officer | ||||||||||||||||||||||||||||||||||||
Phillip Pang, M.D., Ph.D. | 2022 | 507,400 | 125,000 | 1,975,160 | 1,578,694 | 192,780 | — | 12,200 | 4,391,234 | |||||||||||||||||||||||||||
Executive Vice President, Chief Medical Officer and Interim Head of Research | 2021 | 492,000 | — | 2,156,160 | 3,496,896 | 276,864 | — | 11,600 | 6,433,520 | |||||||||||||||||||||||||||
Ann (Aine) Hanly, Ph.D. | 2022 | 474,167 | — | 1,577,180 | 1,159,354 | 181,440 | — | 186,625 | 3,578,766 | |||||||||||||||||||||||||||
Executive Vice President and Chief Technology Officer | 2021 | 338,385 | 250,000 | 1,451,400 | 2,367,738 | 249,200 | — | 84,635 | 4,741,358 | |||||||||||||||||||||||||||
Herbert (Skip) Virgin, M.D., Ph.D.(8) | 2022 | 437,928 | — | 2,063,600 | 1,726,697 | — | — | 80,353 | 4,308,578 | |||||||||||||||||||||||||||
Former Executive Vice | 2021 | 655,621 | — | 2,021,400 | 3,278,340 | 368,939 | — | 95,600 | 6,419,900 | |||||||||||||||||||||||||||
President, Research and Chief Scientific Officer | 2020 | 636,525 | — | — | — | 374,311 | — | 95,400 | 1,106,236 | |||||||||||||||||||||||||||
| (1) | Salary amounts represent |
| (2) | For 2022 the amounts in this column represent: (i) for Ms. Friedl-Naderer, (a) $1,000,000 for a sign-on bonus paid in connection with Ms. Friedl-Naderer’s employment letter agreement, of which $700,000 was paid in March 2022 and $300,000 was paid in March 2023, and (b) $100,000 for a one-time special recognition cash bonus for 2022 performance awarded at the discretion of the Compensation Committee in February 2023 and which was paid in March 2023; and (ii) |
|
|
| (3) | In accordance with SEC rules, this column reflects the aggregate grant date fair value of the stock awards and option awards, as applicable, granted during fiscal |
| (4) | Reflects performance-based cash bonuses awarded to our |
41
| (5) |
|
| (6) | For 2022 the amounts in this column represent: (i) for each of Dr. Scangos, |
| (7) | Ms. Friedl-Naderer was appointed as our Chief Business Officer, Global effective March 2, 2022, and |
| (8) | Dr. Virgin ceased to be our Executive Vice President, Research and Chief Scientific Officer effective August 30, 2022. Dr. Virgin’s base salary for |
Annual Base Salary
Base salaries for our executive officers are initially established through arm’s-length negotiations at the time of the executive officer’s hiring, taking into account such executive officer’s qualifications, experience, the scope of his or her responsibilities and competitive market compensation paid by other companies for similar positions within the industry and geography. Base salaries are reviewed periodically, typically in connection with our annual performance review process, and adjusted from time to time to realign salaries with market levels after taking into account individual responsibilities, performance and experience. In making decisions regarding salary increases, we may also draw upon the experience of members of our Board of Directors with executives at other companies. The 2019 base salaries for our named executive officers were as follows: (i) $500,000 for Dr. Scangos from January 1, 2019 to March 1, 2019 and $517,500 for Dr. Scangos from March 1, 2019 through
December 31, 2019; (ii) $400,000 for Mr. Horn from January 1, 2019 to March 1, 2019 and $416,000 from March 1, 2019 through December 31, 2019; and (iii) $600,000 for Dr. Virgin from January 1, 2019 to March 1, 2019 and $621,000 from March 1, 2019 through December 31, 2019. In February 2020, our Board of Directors, based on the recommendation of our Compensation Committee, increased Dr. Scangos’ base salary to $550,000, effective March 1, 2020.
Bonuses and Non-Equity Incentive Plan Compensation
Our named executive officers are each eligible to receive an annual bonus based on individual and company performance. In 2019, Dr. Scangos was eligible to earn an annual target performance bonus equal to 50% of his 2019 base salary based on the achievement of individual and corporate objectives, and Mr. Horn and Dr. Virgin were eligible to earn an annual target performance bonus equal to 40% of each executive’s 2019 base salary based on the achievement of individual and corporate objectives. Payment of 2019 annual bonuses was based in part on us achieving certain research, development, financial and other target goals. In February 2020, our Board of Directors, based on the recommendation of our Compensation Committee, determined that Dr. Scangos was entitled to 100.5% of his target bonus, and our Compensation Committee determined that Mr. Horn and Dr. Virgin were entitled to 105% and 100% of their target bonuses, respectively.
In February 2020, our Board of Directors, based on the recommendation of our Compensation Committee, increased Dr. Scangos’ target performance bonus to 60% of his 2020 base salary.
Our equity-based incentive awards are designed to align our interests and those of our stockholders with those of our employees and consultants, including our named executive officers. As of December 31, 2019, stock option awards and restricted stock awards were the only forms of equity awards we granted to our named executive officers.
We have historically used stock options, as well as a restricted stock grant and restricted stock purchase for Dr. Scangos, as incentives for long-term compensation to our named executive officers because the return on the awards is tied to an increase in the stock price. We may grant equity awards at such times as our Board of Directors determines appropriate. Additional grants may occur periodically in order to specifically incentivize executives with respect to achieving certain corporate goals or to reward executives for exceptional performance.
Prior to our initial public offering in October 2019, all of the equity incentive awards we granted were made pursuant to our 2016 Equity Incentive Plan, as amended (the “2016 Plan”). All equity awards granted since our initial public offering have been granted pursuant to our 2019 Equity Incentive Plan (the “2019 Plan”).
All options are granted with an exercise price per share that is no less than the fair market value of our common stock on the date of grant of such award. Our stock option grants generally vest over a four-year period and may be subject to acceleration of vesting and exercisability under certain termination and change in control events. The restricted stock held by Dr. Scangos vested and continues to vest over consecutive two-year periods, for an aggregate vesting period of 4 years.
Agreements with Named Executive Officers
We have entered into letter agreements with each of our named executive officers.NEOs. The letter agreements generally provide for at-will employment and set forth the named executive officer’sNEO’s initial base salary, eligibility for employee benefits and stock option grants. In addition, each of our named executive officersNEOs has executed a form of our standard confidential information and invention assignment agreement. The key terms of the letter agreements with our named executive officersNEOs are described below. Any potential payments and benefits due upon a qualifying termination of employment or a change in control are further described below under “- “—Potential Payments Upon Termination or Change in Control.”
Agreement with George Scangos, Ph.D.
In December 2016 we entered into an employment letter agreement with Dr. Scangos, our former President and Chief Executive Officer. Pursuant to his letter agreement, Dr. Scangos was initially entitled to an annual base salary of $500,000 and a discretionary annual target bonus equal to 50% of his base salary, contingent upon the achievement of performance objectives established by us. Dr. Scangos’ letter agreement also provided that Dr. Scangos was entitled to a grant of 6,676,444 shares of restricted stock (as adjusted for a 1-for-4.5 reverse stock split), that vest as follows: 25% on October 1, 2017, and the remainderremaining 75% in 36 equal monthly installments thereafter, subject to Dr. Scangos’ continued employment through each such date. In lieu of the restricted stock grant for 6,676,444 shares, on January 7, 2017, Dr. Scangos was granted 3,338,222 shares of restricted stock under the Vir Biotechnology, Inc. 2016
Equity Incentive Plan (the “2016 Plan”) with 50% of these shares vesting on October 1, 2017, and the remainderremaining 50% of the shares vesting in 12 equal monthly installments thereafter, in each case subject to his continued service through the vesting dates. In addition, on January 7, 2017, Dr. Scangos purchased 3,338,222 shares of restricted stock pursuant to the 2016 Plan at the then-current fair market value of $0.86 per share pursuant to a promissory note, subject to our right to repurchase the shares upon termination of his service for any reason at a purchase price equal to the lesser of fair market value or the amount Dr. Scangos paid for the shares that lapses in 24 equal monthly installments beginning November 1, 2018, subject to accelerated vesting as provided below under the section titled “Potential Payments Upon Termination or Change in Control.”vesting. Dr. Scangos’ letter agreement also provided that, if following the closing of our Series B convertible preferred stock financing, Dr. Scangos’ ownership was greater than a 7% ownership of our company,the Company, then he would be required to automatically forfeit such number of shares causing his ownership to exceed 7%, and if his ownership was less than 7%, then he was entitled to an additional grant of restricted stock equal to such number of shares that would result in an ownership of 7%. Our Series B convertible preferred stock financing closed in January 2019 causing Dr. Scangos’ ownership to be reduced to below 7%, and in March 2019, Dr. Scangos was granted an option to purchase 562,444 shares of our common stock that vestvests as follows: 25% on October 1, 2018, and the remainderremaining 75% in 36 equal monthly installments thereafter, subject to Dr. Scangos’ continued employment through each such date, subject to accelerated vesting as provided below under the section titled “—Potential Payments Upon Termination or Change in Control.”vesting. Dr. Scangos and ourthe Board of Directors each approved Dr. Scangos receiving the stock option grant in lieu of the grant of restricted stock and in full satisfaction of the obligation noted above.
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We amended and restated Dr. Scangos’ letter agreement in August 2019. Pursuant to his amended and restated letter agreement, Dr. Scangos will continue to serve as our chief executive officer and as a member of our Board of Directors. Dr. Scangos is entitled to an annual base salary of $517,500 and a discretionary annual target bonus equal to 50% of his base salary, contingent upon the achievement of performance objectives established by us. In addition to his previous equity awards, Dr. Scangos will be eligible to receive future equity award grants as determined by ourthe Board of Directors or its compensation committee.the Compensation Committee. The amended and restated letter agreement provides that Dr. Scangos is entitled to certain accelerated vesting of the equity awards granted prior to the date of the amended and restated letter agreement upon a change in control, and is eligible to participate in ourthe Vir Biotechnology, Inc. Change in Control and Severance Benefit Plan.
In March 2022 the Board of Directors granted Dr. Scangos (i) an option to purchase 222,000 shares of our common stock that vests as follows: 25% on the one-year anniversary of February 22, 2022, and the remaining 75% in 36 equal monthly installments thereafter and (ii) 111,000 shares of RSUs that vests in four equal annual installments beginning on the one-year anniversary of February 22, 2022, in each case, subject to Dr. Scangos’ continued employment or service through each such date.
Dr. Scangos resigned as our Chief Executive Officer and President effective April 3, 2023 and did not receive any severance in connection with his resignation.
Agreement with Howard Horn
In March 2017 we entered into an employment letter agreement with Mr. Horn, our currentExecutive Vice President and former Chief Financial Officer. Pursuant to his letter agreement, Mr. Horn was initially entitled to an annual base salary of $400,000 and a discretionary annual target bonus equal to 40% of his base salary, contingent upon the achievement of performance objectives established by us. In addition, Mr. Horn received a one-time sign-on bonus of $400,000 in March 2017. Mr. Horn’s letter agreement also provided that Mr. Horn was entitled to a restricted stock grant of 277,777 shares of our common stock (as adjusted for a 1-for-4.5 reverse stock split), which was granted in March 2017, that vests as follows: 25% on the first anniversary of his start date and the remainder in 36 equal monthly installments thereafter, subject to Mr. Horn’s continued employment through each such date. Mr. Horn was also granted an option to purchase 111,111 shares of our common stock in October 2019 that vest as follows: 25% on the one-year anniversary of October 10, 2019 and the remainderremaining 75% in 36 equal monthly installments thereafter, subject to Mr. Horn’s continued employment through each such date.
We amended and restated Mr. Horn’s letter agreement in August 2019. Pursuant to his amended and restated letter agreement, Mr. Horn will continue to serve as our Chief Financial Officer. Mr. Horn is entitled to an annual base salary of $416,000 and a discretionary annual target bonus equal to 40% of his base salary, contingent upon the achievement of performance objectives established by us. In addition to his previous equity awards, Mr. Horn will be eligible to receive future equity grants as determined by ourthe Board of Directors or ourthe Compensation Committee. The amended and restated letter agreement provides that Mr. Horn is eligible to participate in ourthe Vir Biotechnology, Inc. Change in Control and Severance Benefit Plan.
In February 2020, our2022 the Compensation Committee granted Mr. Horn (i) an option to purchase 50,000 shares of our common stock that vests as follows: 25% on the one-year anniversary of February 22, 2022, and the remaining 75% in 36 equal monthly installments thereafter, (ii) 25,000 shares of RSUs that vests in four equal annual installments beginning on the one-year anniversary of February 22, 2022, and (iii) a retention award in the amount of 10,000 shares of RSUs that vests as follows: two-thirds on the second anniversary of February 22, 2022, and the final one-third on the third anniversary of February 22, 2022, in each case, subject to Mr. Horn’s continued employment through each such date.
Agreement with Johanna Friedl-Naderer
In December 2021, Humabs entered into an employment letter agreement with Ms. Friedl-Naderer, our current Executive Vice President and Chief Operating Officer. Pursuant to her letter agreement, Ms. Friedl-Naderer was initially appointed to the position of Executive Vice President, Chief Business Officer and was entitled to an annual base salary of $535,000, to be converted into Swiss francs, and a discretionary annual target bonus equal to 45% of her base salary, contingent upon the achievement of performance objectives established by us. In addition, Ms. Friedl-Naderer received a one-time sign-on bonus of $1,000,000, converted into Swiss francs, of which $700,000 was paid in March 2022 and $300,000 was paid in March 2023. Ms. Friedl-Naderer’s letter agreement also provided that Ms. Friedl-Naderer was eligible to receive an equity award for an unspecified number of shares. Effective as of her commencement of employment on March 2, 2022, Ms. Friedl-Naderer was granted (i) an option to purchase 45,000 shares of our common stock that vests as follows: 25% on the one-year anniversary of March 2, 2022, and the remaining 75% in 36 equal monthly installments thereafter and (ii) 90,000 shares of RSUs that vest in four equal annual installments beginning on the one-year anniversary of March 2, 2022, in each case subject to Ms. Friedl-Naderer’s continued employment through each such date. The letter agreement also provides
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Ms. Friedl-Naderer with the following additional annual benefits: (a) car allowance of $25,000, (b) additional healthcare plan benefit of $15,000, (c) personal expenses allowance of $10,000, and (d) tax planning services benefit of $3,000, each to be converted into Swiss Francs. For a description of the benefits Ms. Friedl-Naderer may be entitled to upon termination of her employment, see the section entitled “Change in Control and Severance Benefit Plan—Ms. Friedl-Naderer’s Arrangements.”
In December 2022 our subsidiaries entered into an agreement on transfer of employment and amendment of Ms. Friedl-Naderer’s employment letter agreement, transferring her employment from Humabs to our wholly owned subsidiary Vir Biotechnology International GmbH (“Vir GmbH”), effective as of January 1, 2023. Pursuant to the agreement, Vir GmbH assumed the rights and obligations of Ms. Friedl-Naderer’s original employment letter agreement, subject to amending her position to Group Chief Operations Officer of Vir GmbH and memorializing her monthly housing allowance of $10,000 for housing in the San Francisco area, to be paid in Swiss francs, starting September 1, 2022. The Compensation Committee approved the monthly housing allowance through December 31, 2023.
Agreement with Phillip Pang, M.D., Ph.D.
In December 2016 we entered into an employment letter agreement with Dr. Pang, our current Executive Vice President, Chief Medical Officer and Interim Head of Research. Pursuant to his letter agreement, Dr. Pang was initially appointed to the position of Vice President, Clinical and was entitled to an annual base salary of $275,000 and a discretionary annual target bonus equal to 25% of his base salary, contingent upon the achievement of performance objectives established by us. Dr. Pang’s letter agreement also provided that Dr. Pang was entitled to an option for an unspecified number of shares, which was granted in March 2017, that vests as follows: 25% on the first anniversary of his start date and the remaining 75% in 36 equal monthly installments thereafter, subject to Dr. Pang’s continued employment through each such date.
In September 2017 we entered into an additional employment letter agreement with Dr. Pang pursuant to which Dr. Pang was promoted to Senior Vice President, Development and was entitled to an annual base salary of $325,000 and a discretionary annual bonus target equal to 40% of his base salary, contingent upon the achievement of performance objectives established by us.
We amended and restated Dr. Pang’s letter agreement in August 2019. Pursuant to his amended and restated letter agreement, Dr. Pang will continue to serve as our Chief Medical Officer. Dr. Pang is entitled to an annual base salary of $442,000 and a discretionary annual target bonus equal to 40% of his base salary, contingent upon the achievement of performance objectives established by us. In addition to his previous equity awards, Dr. Pang will be eligible to receive future equity grants as determined by the Board of Directors or the Compensation Committee. The amended and restated letter agreement provides that Dr. Pang is eligible to participate in the Vir Biotechnology, Inc. Change in Control and Severance Benefit Plan.
In February 2022 the Compensation Committee granted Dr. Pang (i) an option to purchase 64,000 shares of our common stock that vests as follows: 25% on the one-year anniversary of February 22, 2022, and the remaining 75% in 36 equal monthly installments thereafter, (ii) 32,000 shares of RSUs that vests in four equal annual installments beginning on the one-year anniversary of February 22, 2022, and (iii) a retention award in the amount of 35,000 shares of RSUs that vests as follows: two-thirds on the second anniversary of February 22, 2022, and the final one-third on the third anniversary of February 22, 2022, in each case, subject to Dr. Pang’s continued employment through each such date.
Agreement with Ann (Aine) Hanly, Ph.D.
In February 2021 we entered into an employment letter agreement with Dr. Hanly, our Executive Vice President and Chief Technology Officer. Pursuant to her letter agreement, Dr. Hanly will serve as our Chief Technology Officer and is entitled to an annual base salary of $445,000 and a discretionary annual target bonus equal to 40% of her base salary, contingent upon the achievement of performance objectives established by us. Dr. Hanly also received a one-time cash retention bonus of $250,000 in May 2021. Dr. Hanly’s one-time cash retention bonus is subject to repayment to the Company in the event Dr. Hanly’s employment with the Company is terminated by the Company for cause or Dr. Hanly resigns without good reason prior to the first anniversary of Dr. Hanly’s employment start date. Dr. Hanly’s letter agreement also provided that Dr. Hanly was entitled to receive (i) an option to purchase 60,000 shares of our common stock that vests as follows: 25% on the one-year anniversary of February 25, 2020March 29, 2021, and the remainderremaining 75% in 36 equal monthly installments thereafter and (ii) 30,000 shares of RSUs that vests in four equal annual installments beginning on the one-year anniversary of March 29, 2021, in each case, subject to Mr. Horn’sDr. Hanly’s continued employment through each such date. These equity grants were made in March 2021. The letter agreement provided that Dr. Hanly is eligible to participate in the Vir Biotechnology, Inc. Change in Control and Severance Benefit Plan.
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We amended and restated Dr. Hanly’s letter agreement in May 2021. Pursuant to her amended and restated letter agreement, Dr. Hanly will continue to serve as our Executive Vice President and Chief Technology Officer, upon similar terms as set forth in her previous letter agreement. In addition to her previous equity awards, Dr. Hanly will be eligible to receive future equity grants as determined by the Board of Directors or the Compensation Committee.
In February 2022 the Compensation Committee granted Dr. Hanly (i) an option to purchase 47,000 shares of our common stock that vests as follows: 25% on the one-year anniversary of February 22, 2022, and the remaining 75% in 36 equal monthly installments thereafter, (ii) 23,500 shares of RSUs that vests in four equal annual installments beginning on the one-year anniversary of February 22, 2022, and (iii) a retention award in the amount of 30,000 shares of RSUs that vests as follows: two-thirds on the second anniversary of February 22, 2022, and the final one-third on the third anniversary of February 22, 2022, in each case, subject to Dr. Hanly’s continued employment through each such date.
In March 2022 the Compensation Committee approved the following reimbursement of Dr. Hanly’s relocation expenses, for total expenses of up to $440,700: (i) an aggregate of $66,000 for temporary housing expenses in 2021, (ii) payments of approximately $13,725 per month for temporary housing expenses in 2022, for an aggregate amount of $164,700, and (iii) up to an aggregate of $210,000 for permanent relocation expenses. In June 2022 the Compensation Committee amended the reimbursement of relocation expenses for Dr. Hanly, increasing the reimbursement of permanent relocation expenses from $210,000 to $368,000, inclusive of a tax gross-up.
Agreement with Herbert (Skip) Virgin, M.D., Ph.D.
In October 2017 we entered into an employment letter agreement with Dr. Virgin, our currentformer Executive Vice President, Research and Chief Scientific Officer. Pursuant to his letter agreement, Dr. Virgin was initially entitled to an annual base salary of $600,000 and a discretionary annual target bonus equal to 40% of his base salary, contingent upon the achievement of performance objectives established by us. In addition, Dr. Virgin received a one-time sign-on bonus of $600,000 in January 2018 and a housing allowance of $7,000 per month for three years. Dr. Virgin’s letter agreement also provided that
Dr. Virgin was entitled to the grant of a stock option to purchase 555,555 shares of our common stock (as adjusted for a 1-for-4.5 reverse stock split), which was granted in January 2018, that vestsvested as follows: 25% on the first anniversary of his start date and the remainderremaining 75% in 36 equal monthly installments thereafter, subject to Dr. Virgin’s continued employment through each such date. The option granted to Dr. Virgin permitspermitted him to net exercise the option following the completion of our initial public offering. Dr. Virgin’s letter agreement also provided that he was eligible to receive an option to purchase 111,111 shares of our common stock (as adjusted for a 1-for-4.5 reverse stock split) on or following the one-year anniversary of his start date based on the achievement of performance goals as determined by ourthe Board of Directors and our chief executive officer.Chief Executive Officer. In July 2019, based on the achievement of performance goals as determined by the Board of Directors and our Chief Executive Officer for 2018, Dr. Virgin was also granted an option to purchase 133,332 shares of our common stock in July 2019 that vestvested as follows: 25% on the one-year anniversary of July 12, 2019, and the remainderremaining 75% in 36 equal monthly installments thereafter, subject to Dr. Virgin’s continued employment through each such date.
We amended and restated Dr. Virgin’s letter agreement in September 2019. Pursuant to his amended and restated letter agreement, Dr. Virgin will continuecontinued to serve as our Executive Vice President, Research and Chief Scientific Officer. Dr. Virgin iswas entitled to an annual base salary of $621,000 and a discretionary annual target bonus equal to 40% of his base salary, contingent upon the achievement of performance objectives established by us. Dr. Virgin’s annual bonus payments arewere calculated in a manner that takestook into consideration the amounts he receivesreceived in royalty payments relating to licensing fees paid by us to Washington University in St. Louis. Subject to his continued employment with us, Dr. Virgin iswas entitled to a housing allowance of $7,000 per month through February 1, 2021, to maintain a residence in the San Francisco area. In June 2021 the Compensation Committee approved an extension to Dr. Virgin’s housing allowance through the earlier of (i) December 31, 2021, and (ii) the date the Compensation Committee determined there was no business reason for Dr. Virgin to maintain a residence in San Francisco, California. In addition to his previous equity awards, Dr. Virgin will bewas eligible to receive future equity grants as determined by ourthe Board of Directors or ourthe Compensation Committee. The amended and restated letter agreement providesprovided that Dr. Virgin iswas eligible to participate in ourthe Vir Biotechnology, Inc. Change in Control and Severance Benefit Plan.
In February 2022 the Compensation Committee granted Dr. Virgin (i) an option to purchase 70,000 shares of our common stock that vested as follows: 25% on the one-year anniversary of February 22, 2022, and the remaining 75% in 36 equal monthly installments thereafter, (ii) 35,000 shares of RSUs that vested in four equal annual installments beginning on the one-year anniversary of February 22, 2022, and (iii) a retention award in the amount of 35,000 shares of RSUs that vested as
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follows: two-thirds on the second anniversary of February 22, 2022, and the final one-third on the third anniversary of February 22, 2022, in each case, subject to Dr. Virgin’s continued employment through each such date.
Dr. Virgin resigned from the Company effective August 30, 2022 and did not receive any severance in connection with his resignation.
Grants of Plan-Based Awards in 2022
The following table shows for the year ended December 31, 2022, certain information regarding grants of plan-based awards to our NEOs.
Name | Grant Date | Estimated future payouts under non- equity incentive plan awards(1) | All other stock awards: number of shares of stock or units (#)(2) | All other option awards: number of securities underlying options (#)(2) | Exercise or base price of option awards ($/Sh) | Grant date fair value of stock and option awards ($) | ||||||||||||||||||||||||||
| Threshold ($) | Target ($) | Maximum ($) | ||||||||||||||||||||||||||||||
George Scangos, Ph.D. |
| |||||||||||||||||||||||||||||||
Stock option award | 3/10/2022 | — | — | — | — | 222,000 | 29.48 | 4,043,885 | ||||||||||||||||||||||||
Restricted stock units | 3/10/2022 | — | — | — | 111,000 | — | — | 2,489,730 | ||||||||||||||||||||||||
Annual bonus | — | — | 422,500 | 633,750 | — | — | — | — | ||||||||||||||||||||||||
Howard Horn |
| |||||||||||||||||||||||||||||||
Stock option award | 2/22/2022 | — | — | — | — | 50,000 | 29.48 | 1,233,355 | ||||||||||||||||||||||||
Restricted stock units | 2/22/2022 | — | — | — | 25,000 | — | — | 294,800 | ||||||||||||||||||||||||
Restricted stock units | 2/22/2022 | — | — | — | 10,000 | — | — | 737,000 | ||||||||||||||||||||||||
Annual bonus | — | — | 214,875 | 322,313 | — | — | — | — | ||||||||||||||||||||||||
Johanna Friedl-Naderer |
| |||||||||||||||||||||||||||||||
Stock option award | 3/2/2022 | — | — | — | — | 45,000 | 24.13 | 907,412 | ||||||||||||||||||||||||
Restricted stock units | 3/2/2022 | — | — | — | 90,000 | — | — | 2,171,700 | ||||||||||||||||||||||||
Annual bonus | — | — | 240,750 | 361,125 | — | — | — | — | ||||||||||||||||||||||||
Phillip Pang, M.D., Ph.D. |
| |||||||||||||||||||||||||||||||
Stock option award | 2/22/2022 | — | — | — | — | 64,000 | 29.48 | 1,578,694 | ||||||||||||||||||||||||
Restricted stock units | 2/22/2022 | — | — | — | 32,000 | — | — | 943,360 | ||||||||||||||||||||||||
Restricted stock units | 2/22/2022 | — | — | — | 35,000 | — | — | 1,031,800 | ||||||||||||||||||||||||
Annual bonus | — | — | 229,500 | 344,250 | — | — | — | — | ||||||||||||||||||||||||
Ann (Aine) Hanly, Ph.D. |
| |||||||||||||||||||||||||||||||
Stock option award | 2/22/2022 | — | — | — | — | 47,000 | 29.48 | 1,159,354 | ||||||||||||||||||||||||
Restricted stock units | 2/22/2022 | — | — | — | 23,500 | — | — | 692,780 | ||||||||||||||||||||||||
Restricted stock units | 2/22/2022 | — | — | — | 30,000 | — | — | 884,400 | ||||||||||||||||||||||||
Annual bonus | — | — | 216,000 | 324,000 | — | — | — | — | ||||||||||||||||||||||||
Herbert (Skip) Virgin, M.D., Ph.D.(3) |
| |||||||||||||||||||||||||||||||
Stock option award | 2/22/2022 | — | — | — | — | 70,000 | 29.48 | 1,726,697 | ||||||||||||||||||||||||
Restricted stock units | 2/22/2022 | — | — | — | 35,000 | — | — | 1,031,800 | ||||||||||||||||||||||||
Restricted stock units | 2/22/2022 | — | — | — | 35,000 | — | — | 1,031,800 | ||||||||||||||||||||||||
Annual bonus | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| (1) | These amounts relate to the performance-based cash bonuses. See the above narrative section “—Agreements with Named Executive Officers” for a description of non-equity incentive plan compensation. The amounts shown in the “Target” column represent the 2022 target payout amount based on the target percentage applied to each NEO’s base salary as of December 31, 2022. For 2022 the bonus targets were 65% of base salary for Dr. Scangos and 45% of base salary for Mr. Horn, Ms. Friedl-Naderer and Drs. Pang, Virgin and Hanly. Actual amounts paid to each NEO are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table above. |
| (2) | All stock options and RSUs were granted under the Vir Biotechnology, Inc. 2019 Equity Incentive Plan (the “2019 Plan”). See the above narrative section “—Agreements with Named Executive Officers” for a description of the material terms of the stock and option awards granted to each NEO during the year ended December 31, 2022. |
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| (3) | Dr. Virgin resigned from the Company effective August 30, 2022. As a result, Dr. Virgin forfeited all then unvested stock option awards and RSUs that were held by him and was entitled to exercise any vested stock option awards as of August 30, 2022, granted (i) under the 2019 Plan until the earlier of (a) the date that is three months following his separation from the Company and (b) the expiration of the term of such stock option award and (ii) under the 2016 Plan within a period of 30 days after his separation from the Company, but in no event beyond the expiration of the stated term of such stock option awards. In addition, Dr. Virgin was not eligible to receive a bonus under our 2022 short-term corporate incentive plan. |
Outstanding Equity Awards at Fiscal Year-End 2022
The following table presents information concerning equity awards held by our NEOs as of December 31, 2022.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Name | Grant Date | Vesting Commencement Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares of Units of Stock That Have Not Vested ($)(1) | ||||||||||||||||||||||||
George Scangos, Ph.D. | 3/11/2019 | 10/1/2017 | 562,443 | — | 5.18 | 3/11/2029 | — | — | ||||||||||||||||||||||||
| 2/16/2021(2) | 2/16/2021 | 101,750 | 120,250 | 67.38 | 2/15/2031 | — | — | |||||||||||||||||||||||||
| 2/16/2021(3) | 2/16/2021 | — | — | — | — | 83,250 | 2,107,058 | |||||||||||||||||||||||||
| 3/10/2022(2) | 2/22/2022 | — | 222,000 | 29.48 | 3/9/2032 | — | — | |||||||||||||||||||||||||
| 3/10/2022(3) | 2/22/2022 | — | — | — | — | 111,000 | 2,809,410 | |||||||||||||||||||||||||
Howard Horn | 10/10/2019(2) | 10/10/2019 | 87,962 | 23,149 | 20.00 | 10/9/2029 | — | — | ||||||||||||||||||||||||
| 2/25/2020(2) | 2/25/2020 | 42,500 | 17,500 | 21.73 | 2/24/2030 | — | — | |||||||||||||||||||||||||
| 2/16/2021(2) | 2/16/2021 | 22,916 | 27,084 | 67.38 | 2/15/2031 | — | — | |||||||||||||||||||||||||
| 2/16/2021(3) | 2/16/2021 | — | — | — | — | 18,750 | 474,563 | |||||||||||||||||||||||||
| 2/22/2022(2) | 2/22/2022 | — | 50,000 | 29.48 | 2/21/2032 | — | — | |||||||||||||||||||||||||
| 2/22/2022(3) | 2/22/2022 | — | — | — | — | 25,000 | 632,750 | |||||||||||||||||||||||||
| 2/22/2022(4) | 2/22/2022 | — | — | — | — | 10,000 | 253,100 | |||||||||||||||||||||||||
Johanna Friedl-Naderer | 3/2/2022(2) | 3/2/2022 | — | 45,000 | 24.13 | 3/1/2032 | — | — | ||||||||||||||||||||||||
| 3/2/2022(3) | 3/2/2022 | — | — | — | — | 90,000 | 2,277,900 | |||||||||||||||||||||||||
Phillip Pang, M.D., Ph.D. | 3/9/2017 | 12/14/2016 | 18,833 | — | 0.86 | 3/9/2027 | — | — | ||||||||||||||||||||||||
| 4/27/2018(2) | 4/27/2018 | 52,591 | — | 1.53 | 4/27/2028 | — | — | |||||||||||||||||||||||||
| 7/19/2018(2) | 7/19/2018 | 38,982 | — | 1.58 | 7/19/2028 | — | — | |||||||||||||||||||||||||
| 3/11/2019(2) | 3/11/2019 | 35,185 | 6,944 | 5.18 | 3/11/2029 | — | — | |||||||||||||||||||||||||
| 2/16/2021(2) | 2/16/2021 | 29,333 | 34,667 | 67.38 | 2/15/2031 | — | — | |||||||||||||||||||||||||
| 2/16/2021(3) | 2/16/2021 | — | — | — | — | 24,000 | 607,440 | |||||||||||||||||||||||||
| 2/22/2022(2) | 2/22/2022 | — | 64,000 | 29.48 | 2/21/2032 | — | — | |||||||||||||||||||||||||
| 2/22/2022(3) | 2/22/2022 | — | — | — | — | 32,000 | 809,920 | |||||||||||||||||||||||||
| 2/22/2022(4) | 2/22/2022 | — | — | — | — | 35,000 | 885,850 | |||||||||||||||||||||||||
Ann (Aine) Hanly, Ph.D. | 3/29/2021(2) | 3/29/2021 | 26,250 | 33,750 | 48.38 | 3/28/2031 | — | — | ||||||||||||||||||||||||
| 3/29/2021(3) | 3/29/2021 | — | — | — | — | 22,500 | 569,475 | |||||||||||||||||||||||||
| 2/22/2022(2) | 2/22/2022 | — | 47,000 | 29.48 | 2/21/2032 | — | — | |||||||||||||||||||||||||
| 2/22/2022(3) | 2/22/2022 | — | — | — | — | 23,500 | 594,785 | |||||||||||||||||||||||||
| 2/22/2022(4) | 2/22/2022 | — | — | — | — | 30,000 | 759,300 | |||||||||||||||||||||||||
Herbert (Skip) Virgin, M.D., Ph.D. | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| (1) | The market value is based on the closing price of $25.31 per share of our common stock on December 30, 2022, the last trading day of the Company’s fiscal year. |
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| (2) | 25% of the shares underlying this option vest on the one-year anniversary of the vesting commencement date and the remainder vest in 36 equal monthly installments thereafter and are eligible for accelerated vesting as described below under the section titled “—Potential Payments Upon Termination or Change in Control.” |
| (3) | Vests in four equal annual installments beginning on the one-year anniversary of the vesting commencement date and are eligible for accelerated vesting as described below under the section titled “—Potential Payments Upon Termination or Change in Control.” |
| (4) | Two-thirds of the shares vest on the two-year anniversary of the vesting commencement date and the remainder of the shares vest on the three-year anniversary of the vesting commencement date and are eligible for accelerated vesting as described below under the section titled “—Potential Payments Upon Termination or Change in Control.” |
2022 Option Exercises and Stock Vested Table
The following table provides information on stock options exercised, including the number of shares of our common stock acquired upon exercise and the value realized, and the vesting of stock awards, determined as described below, for our NEOs in the year ended December 31, 2022.
Name | Option Awards | Stock Awards | ||||||||||||||
| Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | |||||||||||||
George Scangos, Ph.D. | — | — | 27,750 | 913,253 | ||||||||||||
Howard Horn | — | — | 6,250 | 205,688 | ||||||||||||
Johanna Friedl-Naderer | — | — | — | — | ||||||||||||
Phillip Pang, M.D., Ph.D. | 25,000 | 38,475 | 8,000 | 263,280 | ||||||||||||
Ann (Aine) Hanly, Ph.D. | — | — | 7,500 | 169,350 | ||||||||||||
Herbert (Skip) Virgin, M.D., Ph.D. | 327,782 | 1,412,625 | 7,500 | 246,825 | ||||||||||||
| (1) | The value realized on exercise was calculated by multiplying (i) the number of shares exercised by (ii) the difference between (x) the closing market price of our common stock on the date of exercise, or the weighted average selling price if same-day sales occurred, and (y) the exercise price of the applicable options. |
| (2) | The value realized for restricted stock awards was calculated by multiplying the closing price of a share of our common stock on the vesting date by the total number of shares that vested on such date, and does not represent actual amounts received by the NEOs as a result of the vesting of the restricted stock awards. |
Pension Benefits
Swiss Pension Plan. As an employee of our Humabs subsidiary in Switzerland, Ms. Friedl-Naderer is eligible to participate in the Swiss Pension Plan. Swiss Life Collective “BVG” Foundation ensures that Swiss Pension Plan meets at least the mandated requirements for minimum pension benefits. The Swiss Pension Plan is a cash balance formula, with contributions made both by Humabs and Ms. Friedl-Naderer. Ms. Friedl-Naderer’s total pension savings account balance represents contributions and interest made by Humabs, as well as from her prior employers. The Swiss Pension Plan also provides disability and death benefits under certain circumstances. The amount shown in the table below and throughout this proxy statement reflect the portion of the benefit attributable to contributions (made by both Humabs and Ms. Friedl-Naderer) made while employed by Humabs. Upon retirement, Ms. Friedl-Naderer will receive the value of her pension savings account. She may elect to receive her benefit as a lump sum or as an annuity. The pension savings account grows each year with pay credits (40% payable by Ms. Friedl-Naderer and 60% payable by Humabs) and interest. The normal retirement age under the Swiss Pension Plan is age 64 for females (as in accordance with Swiss law). Ms. Friedl-Naderer may elect to retire from the age of 58. Annuity benefits are converted using reduced actuarial equivalence conversion factors.
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The following table provides information about the benefits provided for Ms. Friedl-Naderer under the Swiss Pension Plan. The amount reported represents the U.S. Dollar equivalent of the benefits provided for Ms. Friedl-Naderer in Swiss Francs, based on a conversion rate of CHF 1.0 = $0.92425 as of December 31, 2022.
Name | Plan Name | Number of Years of Credited Service (#) | Present Value of Accumulated Benefit ($) | |||||||
Johanna Friedl-Naderer (1) | Swiss Pension Plan | 0.8 | $ | 127,877 | ||||||
| (1) | The number of years of credited service is equal to Ms. Friedl-Naderer s length of service at Humabs. |
Assumptions for Swiss Pension Plan:
Mortality, disability and turnover rates are calculated according to mortality table BVG 2020 Generational (generated for the calendar year 2022).
Discount rate: 0.8%
Distribution retirement age: 100% at 64
Lump sum probability at retirement: 45%
Long-term assumptions:
Price inflation: 1.2%
Interest rate on the savings account: 2.3%
Expected return on plan assets: 2.3%
Salary increase: 1.5%
Social security increase: 1.2%
Pension increase: 0.0%
Potential Payments Upon Termination or Change in Control
Regardless of the manner in which an executive officer’s service terminates, each executive officer is entitled to receive amounts earned during his or hertheir term of service, including unpaid salary and unused paid-timepaid time off, as applicable. In addition, ourthe Board has approved a Change in Control and Severance Benefit Plan described below.
Accelerated Vesting of Dr. Scangos’ Equity Awards
Dr. Scangos’ amended and restated employment letter agreement provides that in the event of a change in control (as defined in the 2016 Plan), all shares, options and other securities subject to unvested equity awards granted to Dr. Scangos prior to August 27, 2019 will become fully vested, except that the number of shares that would have vested within six months following the change in control will remain subject to the vesting schedule and will vest subject to Dr. Scangos continued employment during the six-month period; provided, however, any such remaining unvested shares will become fully vested in the event of his termination without cause or his resignation for good reason (each as defined in our Change in Control and Severance Benefit Plan) prior to the expiration of such six-month period.
Change in Control and Severance Benefit Plan
In March 2019, our Board of Directors approved the Vir Biotechnology, Inc. Change in Control and Severance Benefit Plan or(the “Severance Plan”) described below. Each of our NEOs, other than Ms. Friedl-Naderer, was covered by the Severance Plan in 2022.
Change in Control and Severance Benefit Plan
In March 2019 the Board of Directors approved the Severance Plan. The Severance Plan provides for severance benefits for certain of our executives and senior management, including our named executive officers,NEOs other than Ms. Friedl-Naderer, subject to the execution and effectiveness of a release of claims. In the event of a covered termination, which is either a termination by us without cause (and other than as a result of death or disability) or the employee’s resignation for good reason, that occurs during the 12-month period following a change in control, or the change in control period, (i) Dr. Scangos will be entitled to a lump sum cash payment equal to 18 months of base salary plus his annual target cash bonus multiplied by 1.5, up to 18 months of payment for continued group health plan benefits and full vesting acceleration of all outstanding equity awards, and (ii) Mr. Horn and Dr. VirginDrs. Pang and Hanly will each be entitled to a lump sum cash payment equal to 12 months of base salary plus histheir annual target cash bonus, up to 12 months of payment for continued group health plan benefits and full vesting acceleration of all outstanding equity awards.
In addition, the Severance Plan provides that in the event of a covered termination that occurs outside of the change in control period, (i) Dr. Scangos will be entitled to a lump sum cash payment equal to 12 months of base salary plus a pro-rated annual target cash bonus and up to 12 months of payment for continued group health plan benefits and (ii) Mr. Horn and Dr. VirginDrs. Pang and Hanly will each be entitled to a lump sum cash payment equal to nine9 months of base salary plus a pro-rated annual target cash bonus and up to nine9 months of payment for continued group health plan benefits.
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The Severance Plan provides that the severance payments and benefits to be paid or provided to Drs. Scangos, Pang and Hanly and Mr. Horn may be reduced if such severance payments and benefits would constitute “parachute payments” within the meaning of Section 280G of the Code and be subject to the excise tax imposed by Section 4999 of the Code, but only to the extent that such reduction would result in the executive receiving a greater amount on an after-tax basis.
For purposes of the Severance Plan, the following definitions are used:
“cause” means, with respect to a particular employee, the occurrence of any of the following events: (i) the employee’s commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof; (ii) the employee’s attempted commission of, or participation in, a fraud or act of dishonesty against us; (iii) the employee’s intentional, material violation of any contract or agreement between the employee and us or of any statutory duty owed to us; (iv) the employee’s unauthorized use or disclosure of our confidential information or trade secrets; or (v) the employee’s gross misconduct.
“good reason” for an employee’s resignation means the occurrence of any of the following events, conditions or actions taken by us without “cause” and without such employee’s consent: (i) a material reduction of the employee’s annual base salary, which is a reduction of at least 20% of such employee’s base salary (unless pursuant to a salary reduction program applicable generally to our similarly situated employees); (ii) a material reduction in the employee’s authority, duties or responsibilities; (iii) a relocation of the employee’s principal place of employment with us (or our successor, if applicable) to a place that increases the employee’s one-way commute by more than 50 miles as compared to the employee’s then-current principal place of employment immediately prior to the relocation (excluding regular travel in the ordinary course of business); provided that if the employee’s principal place of employment is his or her personal residence, this clause (iii) will not apply; or (iv) a material breach by us of any material agreement between the employee and us; provided, however, that in each case above, in order for the employee’s resignation to be deemed to have been for “good reason,” the employee must first give us written notice of the action or omission giving rise to “good reason” within 30 days after the first occurrence thereof; we must fail to reasonably cure such action or omission within 30 days after receipt of notice, and the employee’s resignation must be effective not later than 30 days after the expiration of this cure period.
| • | “good reason” for an employee’s resignation means the occurrence of any of the following events, conditions or actions taken by us without “cause” and without such employee’s consent: (i) a material reduction of the employee’s annual base salary, which is a reduction of at least 20% of such employee’s base salary (unless pursuant to a salary reduction program applicable generally to our similarly situated employees); (ii) a material reduction in the employee’s authority, duties or responsibilities; (iii) a relocation of the employee’s principal place of employment with us (or our successor, if applicable) to a place that increases the employee’s one-way commute by more than 50 miles as compared to the employee’s then-current principal place of employment immediately prior to the relocation (excluding regular travel in the ordinary course of business); provided that if the employee’s principal place of employment is his or her personal residence, this clause (iii) will not apply; or (iv) a material breach by us of any material agreement between the employee and us; provided, however, that in each case above, in order for the employee’s resignation to be deemed to have been for “good reason,” the employee must first give us written notice of the action or omission giving rise to “good reason” within 30 days after the first occurrence thereof; we must fail to reasonably cure such action or omission within 30 days after receipt of notice, and the employee’s resignation must be effective not later than 30 days after the expiration of this cure period. |
“change of control” means: (i) any person becomes the owner, directly or indirectly, of our securities representing more than fifty percent (50%)50% of the combined voting power of our then outstanding securities other than by virtue of a merger, consolidation or similar transaction; provided that notwithstanding the foregoing, a “change in control” will not be deemed to occur (1) on account of the acquisition of our securities by any institutional investor or any other person that acquires our securities in a transaction or series of related transactions that are primarily a private financing transaction for us or (2) solely because the level of ownership held by any person exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by us reducing the number of shares outstanding, provided that if a “change in control” would occur but for this clause as a result of the acquisition of voting securities by us, and after such share acquisition, the person becomes the owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities owned by the person over the designated percentage threshold, then a “change in control” will be deemed to occur; (ii) the consummation of a merger, consolidation or similar transaction involving us, directly or indirectly, if, immediately after the consummation of such merger, consolidation or similar transaction, our stockholders immediately prior thereto do not own, directly or indirectly, either (1) outstanding voting securities representing more than fifty percent (50%)50% of the combined outstanding voting power of the surviving entity in such merger, consolidation or similar transaction or (2) more than fifty percent (50%)50% of the combined outstanding voting power of the parent of the surviving entity in such merger, consolidation or similar transaction; or (iii) the consummation of a sale, lease, license or other disposition of all or substantially all of our and our subsidiaries’ consolidated assets, other than a sale, lease, license or other disposition of all or substantially all of our and our subsidiaries’ consolidated assets to an entity, more than fifty percent (50%)50% of the combined voting power of the voting securities of which are owned by our stockholders in substantially the same proportion as their ownership immediately prior to such sale, lease, license or other disposition.
Ms. Friedl-Naderer’s Arrangements
In December 2021, Humabs entered into an employment letter agreement with Ms. Friedl-Naderer. Upon the termination of the employment letter agreement by Humabs, except for a termination by Humabs for Good Cause (as defined below), or
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Outstanding Equity Awards at Fiscal Year-End
upon a termination by Ms. Friedl-Naderer for Good Cause, Ms. Friedl-Naderer shall be entitled, following a six month notice period required upon termination by either party in such circumstances, (i) to the extent that such termination does not occur within the twelve months following a Change in Control (as defined in the Severance Plan), to a lump sum severance payment equal to the amount of three months of the last earned annual gross base salary or (ii) to the extent that the termination occurs within the twelve months following a Change in Control, to a lump sum severance payment equal to the amount of six months of the last earned annual gross base salary, a lump sum payment equal to 100% of Ms. Friedl-Naderer’s annual target cash bonus for the year of the termination, and any equity awards granted to Ms. Friedl-Naderer by Vir that vest solely based on continued service shall become vested.
For purposes of Ms. Friedl-Naderer’s employment letter agreement, the term “Good Cause” means Good Cause pursuant to Article 337 in the Swiss Code of Obligations. In particular, Good Cause is any circumstance which renders the continuation of the employment relationship in good faith unconscionable for the party giving notice. Such circumstances essentially include (i) willful misconduct, (ii) gross negligence in the performance of Ms. Friedl-Naderer’s duties under the employment letter agreement and (iii) an act of fraud.
Upon Ms. Friedl-Naderer’s Retirement (as defined below), she is entitled to her pro-rated annual target cash bonus. For purposes of Ms. Friedl-Naderer’s employment letter agreement, the term “Retirement” means termination of the agreement (i) by Humabs without Good Cause provided that Ms. Friedl-Naderer has already reached the age of 55, (ii) by Ms. Friedl-Naderer provided that Ms. Friedl-Naderer has already reached the age of 55, (iii) upon a mutual agreement between Ms. Friedl-Naderer and Humabs provided that Ms. Friedl-Naderer has reached the age of 55, or (iv) upon ordinary retirement of Ms. Friedl-Naderer as per the applicable Swiss law.
Dr. Virgin’s Arrangements
Dr. Virgin voluntarily separated from the Company on August 30, 2022, and did not receive any severance benefits in connection with his separation. Dr. Virgin forfeited all then unvested stock option awards and RSUs that were held by him and was entitled to exercise any vested stock option awards as of August 30, 2022, granted (i) under the 2019 Plan until the earlier of (a) the date that is three months following his separation from the Company and (b) the expiration of the term of such stock option award and (ii) under the 2016 Plan within a period of 30 days after his separation from the Company, but in no event beyond the expiration of the stated term of such stock option awards.
51
Potential Post-Termination Payments Table
The following table presents information concerning equity awards held by our named executive officers asprovides an estimate of the potential payments and benefits to each NEO under various termination events except for Dr. Virgin who voluntarily separated from the Company during 2022. The table assumes the triggering event occurred on December 31, 2019.2022:
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| Option Awards |
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| Stock Awards |
| ||||||||||||||||||||||||||||||||
Name |
| Grant Date |
| Vesting Commencement Date |
|
| Number of Securities Underlying Unexercised Options (#) Exercisable |
|
| Number of Securities Underlying Unexercised Options (#) Unexercisable |
|
| Option Exercise Price ($) |
|
| Option Expiration Date |
|
| Number of Shares or Units of Stock That Have Not Vested (#) |
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| Market Value of Shares or Units of Stock That Have Not Vested ($)(1) |
| Benefit | Retirement | Involuntary termination not in connection with a change in control | Involuntary termination in connection with a change in control | |||||||||||||||||
George Scangos, Ph.D. |
| 1/7/2017(2) |
| 11/1/2018 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,390,926 |
|
|
| 16,858,023 |
| Lump sum cash severance benefit | — | $ | 650,000 | $ | 975,000 | |||||||||
|
| 3/11/2019 |
| 10/1/2017 |
|
| 304,656- |
|
| 257,787- |
|
| 5.18- |
|
| 3/11/2029- |
|
|
| — |
|
|
| — |
| Lump sum target bonus payment | — | $ | 422,500 | $ | 633,750 | |||||||||||||
| Health insurance benefits | — | $ | 26,175 | $ | 39,263 | |||||||||||||||||||||||||||||||||||||||
| Vesting acceleration(1) | — | $ | — | $ | 4,916,468 | |||||||||||||||||||||||||||||||||||||||
| Benefit Total | — | $ | 1,098,675 | $ | 6,564,481 | |||||||||||||||||||||||||||||||||||||||
Howard Horn |
| 3/9/2017(3) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 86,806 |
|
|
| 1,052,089 |
| Lump sum cash severance benefit | — | $ | 358,125 | $ | 477,500 | ||||||||
|
| 10/10/2019(3) |
| 10/10/2019 |
|
|
| — |
|
|
| 111,111 |
|
|
| 20.00 |
|
| 10/10/2029 |
|
|
| — |
|
|
| — |
| Lump sum target bonus payment | — | $ | 214,875 | $ | 214,875 | ||||||||||
Herbert (Skip) Virgin, M.D., Ph.D. |
| 1/26/2018(3) |
| 1/8/2018 |
|
|
| 266,203 |
|
|
| 289,352 |
|
|
| 1.53 |
|
| 1/26/2028 |
|
|
| — |
|
|
| — |
| ||||||||||||||||
|
| 7/12/2019(3) |
| 7/12/2019 |
|
|
| — |
|
|
| 133,332 |
|
|
| 10.40 |
|
| 7/12/2029 |
|
|
| — |
|
|
| — |
| Health insurance benefits | — | $ | 28,322 | $ | 37,763 | ||||||||||
| Vesting acceleration(1) | — | $ | — | $ | 1,545,984 | |||||||||||||||||||||||||||||||||||||||
| Benefit Total | — | $ | 601,322 | $ | 2,276,122 | |||||||||||||||||||||||||||||||||||||||
Johanna Friedl-Naderer | Lump sum cash severance benefit | $ | — | $ | 133,750 | $ | 267,500 | |||||||||||||||||||||||||||||||||||||
| Lump sum target bonus payment | $ | 240,750 | $ | 240,750 | $ | 240,750 | ||||||||||||||||||||||||||||||||||||||
| Health insurance benefits | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||||
| Vesting acceleration(1) | $ | — | $ | — | $ | 2,331,000 | ||||||||||||||||||||||||||||||||||||||
| Benefit Total | $ | 240,750 | $ | 374,500 | $ | 2,839,250 | ||||||||||||||||||||||||||||||||||||||
Phillip Pang, M.D., Ph.D. | Lump sum cash severance benefit | — | $ | 382,500 | $ | 510,000 | ||||||||||||||||||||||||||||||||||||||
| Lump sum target bonus payment | — | $ | 229,500 | $ | 229,500 | |||||||||||||||||||||||||||||||||||||||
| Health insurance benefits | — | $ | 28,391 | $ | 37,855 | |||||||||||||||||||||||||||||||||||||||
| Vesting acceleration(1) | — | $ | — | $ | 2,443,027 | |||||||||||||||||||||||||||||||||||||||
| Benefit Total | — | $ | 640,391 | $ | 3,220,382 | |||||||||||||||||||||||||||||||||||||||
Ann (Aine) Hanly, Ph.D. | Lump sum cash severance benefit | — | $ | 360,000 | $ | 480,000 | ||||||||||||||||||||||||||||||||||||||
| Lump sum target bonus payment | — | $ | 216,000 | $ | 216,000 | |||||||||||||||||||||||||||||||||||||||
| Health insurance benefits | — | $ | 28,391 | $ | 37,855 | |||||||||||||||||||||||||||||||||||||||
| Vesting acceleration(1) | — | $ | — | $ | 1,923,560 | |||||||||||||||||||||||||||||||||||||||
| Benefit Total | — | $ | 604,391 | $ | 2,657,415 | |||||||||||||||||||||||||||||||||||||||
| (1) | The |
52
Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (1) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers (1) | Average Compensation Actually Paid to Non-PEO Named Executive Officers (2) | Value of Initial Fixed $100 Investment Based on: | Net Income | ||||||||||||||||||||||
Total Shareholder Return | Peer Group Total Shareholder Return (3) | |||||||||||||||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | |||||||||||||||||||||
| 2022 | $ | 7,479,898 | $ | 3,498,740 | $ | 4,044,309 | $ | 1,084,615 | $ | 201 | $ | 111 | $ | 515,837 | ||||||||||||||
| 2021 | $ | 20,682,838 | $ | 15,032,868 | $ | 5,685,910 | $ | 6,198,242 | $ | 333 | $ | 125 | $ | 528,584 | ||||||||||||||
| 2020 | $ | 994,883 | $ | 34,542,658 | $ | 1,431,729 | $ | 6,929,113 | $ | 213 | $ | 126 | ($ | 298,665 | ) | |||||||||||||
| (1) | Our PEO was George Scangos, Ph.D. for all years in the table. Our Other NEOs were Howard Horn (all years), Johanna Friedl-Naderer (2022), Phillip Pang, M.D., PhD. (2022 and 2021), Ann (Aine) Hanly (2022 and 2021), Herbert (Skip) Virgin, M.D., Ph.D. (all years), Steven Rice (2020) and Michael Kamarck, Ph.D. (2020). |
| (2) | The S-K under the |
Adjustments | 2022 | 2021 | 2020 | |||||||||||||||||||||
PEO | Other NEOs* | PEO | Other NEOs* | PEO | Other NEOs* | |||||||||||||||||||
| SCT Amounts | $ | 7,479,898 | $ | 4,044,309 | $ | 20,682,838 | $ | 5,685,910 | $ | 994,883 | $ | 1,431,729 | ||||||||||||
| Adjustments for defined benefit and actuarial pension plans | ||||||||||||||||||||||||
| (Subtract): Aggregate change in actuarial present value included in SCT Amounts for the covered fiscal year | $ | 0 | ($ | 21,313 | ) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||
| Add: Service cost for the covered fiscal year | $ | 0 | $ | 21,313 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
| Add: Prior service cost for the covered fiscal year | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
| Adjustments for stock and option awards | ||||||||||||||||||||||||
| (Subtract): Aggregate value for stock awards and option awards included in SCT Amounts for the covered fiscal year | ($ | 6,533,615 | ) | ($ | 3,084,990 | ) | ($ | 19,609,038 | ) | ($ | 4,797,096 | ) | $ | 0 | ($ | 609,106 | ) | |||||||
| Add: Fair value at year end of awards granted during the covered fiscal year that were outstanding and unvested at the covered fiscal year end | $ | 7,210,713 | $ | 2,063,502 | $ | 11,767,256 | $ | 3,122,814 | $ | 0 | $ | 523,892 | ||||||||||||
Adjustments | 2022 | 2021 | 2020 | |||||||||||||||||||||
PEO | Other NEOs* | PEO | Other NEOs* | PEO | Other NEOs* | |||||||||||||||||||
| Add (Subtract): Year-over-year change in fair value at covered fiscal year end of awards granted in any prior fiscal year that were outstanding and unvested at the covered fiscal year end | ($ | 3,267,648 | ) | ($ | 659,365 | ) | $ | 0 | $ | 704,842 | $ | 1,653,881 | $ | 2,590,493 | ||||||||||
| Add: Vesting date fair value of awards granted and vested during the covered fiscal year | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
| Add (Subtract): Change as of the vesting date (from the end of the prior fiscal year) in fair value of awards granted in any prior fiscal year for which vesting conditions were satisfied during the covered fiscal year | ($ | 1,390,609 | ) | ($ | 738,105 | ) | $ | 2,191,812 | $ | 1,481,773 | $ | 31,893,895 | $ | 2,992,106 | ||||||||||
| (Subtract): Fair value at end of prior fiscal year of awards granted in any prior fiscal year that failed to meet the applicable vesting conditions during the covered fiscal year | $ | 0 | ($ | 540,735 | ) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||
| Add: Dividends or other earnings paid on stock or option awards in the covered fiscal year prior to vesting if not otherwise included in the total compensation for the covered fiscal year | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||
| CAP Amounts (as calculated) | $ | 3,498,740 | $ | 1,084,615 | $ | 15,032,868 | $ | 6,198,242 | $ | 34,542,658 | $ | 6,929,113 | ||||||||||||
| * | Amounts presented are averages for the entire group of Other NEOs in |
|
| Valuation assumptions used to calculate fair values did not materially differ from those used to calculate fair values at the time of grant as reflected in the |
Equity Benefit Plans
2019 Equity Incentive Plan
Our Board of Directors adopted, and our stockholders approved, our 2019 Plan in 2019.
| (3) | The peer group is Nasdaq Biotechnology Index. |
CEO Pay Ratio
Under the grantrules adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of nonstatutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards2010, we are required to calculate and other forms of stockdisclose the total compensation paid to our employees, including officers, consultants and directors. Our 2019 Plan also provides formedian paid employee, as well as the grantratio of performance cash awardsthe total compensation paid to the median employee as compared to the total compensation paid to the CEO (the “CEO Pay Ratio”).
Measurement Date
We identified the median employee using our employees, consultants and directors. Asemployee population as of December 31, 2019, options to purchase 1,006,208 shares of common stock, at exercise prices ranging from $12.76 to $20.00 per share,2022 (including all employees, whether employed on a full-time, part-time, seasonal or a weighted-average exercise price of $14.96 per share, were outstanding under our 2019 Plan.temporary basis).
Authorized Shares. AsConsistently Applied Compensation Measure (“CACM”)
To identify the median employee, we aggregated for each employee as of December 31, 2019, there were 4,866,468 shares remaining available2022: (1) annual base salary, (2) the actual bonus paid for 2022 and (3) the grant of stock awards under our 2019 Plan. The number of shares of our common stock reserved for issuance under our 2019 Plan will automatically increase on January 1 of each calendar year, starting on January 1, 2020 through January 1, 2029, in an amount equal to 5% of the total number of shares of our capital stock outstanding on the last day of the calendar month before the date of each automatic increase, or a lesser number of shares determined by our Board of Directors. The maximum number of shares of our common stock that may be issued on the exercise of incentive stock options, or ISOs, under our 2019 Plan is 37,000,000 shares.
Shares subject to stock awards granted under our 2019 Plan that expire or terminate without being exercised in full or that are paid out in cash rather than in shares do not reduce the number of shares available for issuance under our 2019 Plan. If any shares of common stock issued pursuant to a stock award are forfeited back to or repurchased or reacquired by us for any reason, the shares that are forfeited or repurchased or reacquired will revert to and again become available for issuance under the 2019 Plan. Any shares reacquired in satisfaction of tax withholding obligations or as consideration for the exercise or purchase price of a stock award will again become available for issuance under the 2019 Plan.
The maximum number of shares of common stock subject to stock awards granted under the 2019 Plan or otherwise during any one calendar year to any non-employee director, taken together with any cash fees paid by us to such non-employee director during such calendar year for service on the Board of Directors, will not exceed $750,000 in total value (calculating the value of any such stock awards based on theestimated grant date fair value of such stockequity awards granted during the fiscal year ended December 31, 2022. Salaries for financial reporting purposes), or, with respect to the calendar year in which a non-employee director is first appointed or electedemployees hired during 2022 were annualized, and we applied an annual average exchange rate to our BoardSwiss employees to convert their pay to U.S. Dollars.
Pay Ratio
After applying our CACM methodology, we identified a group of Directors, $1,100,000.
Plan Administration. Our Board of Directors,employees whose compensation was at or a duly authorized committee or subcommittee of our Board of Directors, will administer our 2019 Plan and is referred to asnear the “plan administrator” herein. Our Board of Directors may also delegate to one or more of our officers the authority to (i) designate employees (other than officers) to receive specified stock awards and (ii) determine the number of shares subject to such stock awards, provided that the officer may not grant any such awards to himself. Our Board of Directors will specify the total number of shares of our common stock that may be subject to stock awards granted by such officer in this manner. Under our 2019 Plan, our Board of Directors has the authority to determine award recipients, grant dates, the numbers and types of stock awards to be granted, the applicable fair market value, and the provisions of each stock award, including the period of exercisability and the vesting schedule applicable to a stock award.
Under the 2019 Plan, the Board of Directors also generally has the authority to effect, with the consent of any adversely affected participant, (i) the reductionmedian of the exercise, purchase, or strike price of any outstanding award; (ii)employee data. From this group, we selected an individual who we reasonably believed represented our median employee. Next, we calculated the cancellation of any outstanding award and the grant in substitution therefor of other awards, cash, or other consideration; or (iii) any other action that is treated as a repricing under generally accepted accounting principles. Under the 2019 Plan, our Board of Directors also has the authority to submit any amendment to the 2019 Plan for stockholder approval.
Stock Options. ISOs and nonstatutory stock options, or NSOs, are granted under stock option agreements adopted by the plan administrator. The plan administrator determines the exercise price for stock options, within the terms and conditions of the 2019 Plan, provided that the exercise price of a stock option generally cannot be less than 100% of the fair market value of our common stock on the date of grant. Options granted under the 2019 Plan vest at the rate specified in the stock option agreement as determined by the plan administrator.
The plan administrator determines the term of stock options granted under the 2019 Plan, up to a maximum of 10 years. Unless the terms of an optionholder’s stock option agreement provide otherwise, if an optionholder’s service relationship with us or any of our affiliates ceases for any reason other than disability, death, or cause, the optionholder may generally exercise any vested options for a period of three months following the cessation of service. This period may be extended in the event that exercise of the option is prohibited by applicable securities laws or our insider trading policy. If an optionholder’s service relationship with us or any of our affiliates ceases due to death, or an optionholder dies within a certain period following cessation of service, the optionholder or a beneficiary may generally exercise any vested options for a period of 18 months following the date of death. If an optionholder’s service relationship with us or any of our affiliates ceases due to disability, the optionholder may generally exercise any vested options for a period of 12 months following the cessation of service. In the event of a termination for cause, options generally terminate upon the termination date. In no event may an option be exercised beyond the expiration of its term.
Acceptable consideration for the purchase of common stock issued upon the exercise of a stock option will be determined by the plan administrator and may include: (i) cash, check, bank draft or money order; (ii) a broker- assisted cashless exercise; (iii) the tender of shares of our common stock previously owned by the optionholder; (iv) a net exercise of the option if it is an NSO; or (v) other legal consideration approved by the plan administrator.
Unless the plan administrator provides otherwise, options generally are not transferable except by will or the laws of descent and distribution. Subject to approval of the plan administrator or a duly authorized officer in each case, (i) an option may be transferred pursuant to a domestic relations order, official marital settlement agreement, or other divorce or separation instrument and (ii) an optionholder may designate a beneficiary who may exercise the option following the optionholder’s death.
Tax Limitations on ISOs. The aggregate fair market value, determined at the time of grant, of our common stock with respect to ISOs that are exercisable for the first time by an award holder during any calendar year under all of our stock plans may not exceed $100,000. Options or portions thereof that exceed such limit will generally be treated as NSOs. No ISO may be granted to any person who, at the time of the grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power or that of any of our affiliates unless (i) the option exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant, and (ii) the term of the ISO does not exceed five years from the date of grant.
Restricted Stock Unit Awards. Restricted stock unit awards are granted under restricted stock unit award agreements adopted by the plan administrator. Restricted stock unit awards may be granted in consideration for any form of legal consideration that may be acceptable to our Board of Directors and permissible under applicable law. A restricted stock unit award may be settled by cash, delivery of stock, a combination of cash and stock as deemed appropriate by the plan administrator, or in any other form of consideration set forth in the restricted stock unit award agreement. Additionally, dividend equivalents may be credited in respect of shares covered by a restricted stock unit award. Except as otherwise provided in the applicable award agreement or other written agreement, restricted stock unit awards that have not vested will be forfeited once the participant’s continuous service ends for any reason.
Restricted Stock Awards. Restricted stock awards are granted under restricted stock award agreements adopted by the plan administrator. A restricted stock award may be awarded in consideration for cash, check, bank draft or money order, past or future services to us, or any other form of legal consideration that may be acceptable to our Board of Directors and permissible under applicable law. The plan administrator determines the terms and conditions of restricted stock awards, including vesting and forfeiture terms. If a participant’s service relationship with us ends for any reason, we may receive any or all of the shares of common stock held by the participant that have not vested as of the date the participant terminates service with us through a forfeiture condition or a repurchase right.
Stock Appreciation Rights. Stock appreciation rights are granted under stock appreciation right agreements adopted by the plan administrator. The plan administrator determines the purchase price or strike price for a stock appreciation right, which generally cannot be less than 100% of the fair market value of our common stock on the date of grant. A stock appreciation right granted under the 2019 Plan vests at the rate specified in the stock appreciation right agreement as determined by the plan administrator. The appreciation distribution may be made in shares of our stock, in cash, in any combination of the two, or in any other form of consideration, as determined by our Board of Directors and contained in the applicable award agreements.
The plan administrator determines the term of stock appreciation rights granted under the 2019 Plan, up to a maximum of 10 years. If a participant’s service relationship with us or any of our affiliates ceases for any reason other than cause, disability, or death, the participant may generally exercise any vested stock appreciation right for a period of three months following the cessation of service, or any other period set by the applicable award agreement, so long as such period complies with applicable law. This period may be further extended in the event that exercise of the stock appreciation right following such a termination of service is prohibited by applicable securities laws or our insider trading policy. If a participant’s service relationship with us, or any of our affiliates, ceases due to disability or death, or a participant dies within a certain period following cessation of service, the participant or a beneficiary may generally exercise any vested stock appreciation right for a period of 12 months in the event of disability and 18 months in the event of death, or any other period set by the applicable award agreement, so long as such period complies with applicable law. In the event of a termination for cause, stock appreciation rights generally terminate immediately upon the occurrence of the event giving rise to the termination of the individual for cause. In no event may a stock appreciation right be exercised beyond the expiration of its term.
Performance Awards. The 2019 Plan permits the grant of performance-based stock and cash awards. Our Compensation Committee may structure awards so that the shares of our stock, cash, or other property will be issued or paid only following the achievement of certain pre-established performance goals during a designated performance period. The performance goals that may be selected include one or more of the following: (i) sales; (ii) revenue; (iii) assets; (iv) expenses; (v) market penetration or expansion; (vi) earnings from operations; (vii) earnings before or after deduction for all or any portion of interest, taxes, depreciation, amortization, incentives, service fees or extraordinary or special items, whether or not on a continuing operations or an aggregate or per share basis; (viii) net income or net income per common share (basic or diluted); (ix) return on equity, investment, capital or assets; (x) one or more operating ratios; (xi) borrowing levels, leverage ratios or credit rating; (xii) market share; (xiii) capital expenditures; (xiv) cash flow, free cash flow, cash flow return on investment, or net cash provided by operations; (xv) stock price, dividends or total stockholder return; (xvi) development of new technologies or products; (xvii) sales of particular products or services; (xviii) economic value created or added; (xix) operating margin or profit margin; (xx) customer acquisition or retention; (xxi) raising or refinancing of capital; (xxii) successful hiring of key individuals; (xxiii) resolution of significant litigation; (xxiv) acquisitions and divestitures (in whole or in part); (xxv) joint ventures and strategic alliances; (xxvi) spin-offs, split-ups and the like; (xxvii) reorganizations; (xxviii) recapitalizations, restructurings, financings (issuance of debt or equity) or refinancings; (xxix) or strategic business criteria, consisting of one or more objectives based on the following goals: achievement of timely development, design management or enrollment, meeting specified market penetration or value added, payor acceptance, patient adherence, peer reviewed publications, issuance of new patents, establishment of or securing of licenses to intellectual property, product development or introduction (including, without limitation, any clinical trial accomplishments, regulatory or other filings, approvals or milestones, discovery of novel products, maintenance of multiple products in pipeline, product launch or other
product development milestones), geographic business expansion, cost targets, cost reductions or savings, customer satisfaction, operating efficiency, acquisition or retention, employee satisfaction, information technology, corporate development (including, without limitation, licenses, innovation, research or establishment of third-party collaborations), manufacturing or process development, legal compliance or risk reduction, patent application or issuance goals, or goals relating to acquisitions, divestitures or other business combinations (in whole or in part), joint ventures or strategic alliances; and (xxx) other measures of performance selected by the Board of Directors.
The performance goals may be based on company-wide performance or performance of one or more business units, divisions, affiliates, or business segments, and may be either absolute or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Our Board of Directors is authorized at any time in its sole discretion, to adjust or modify the calculation of a performance goal for such performance period in order to prevent the dilution or enlargement of the rights of participants, (i) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event or development; (ii) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting us, or our financial statements in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions; or (iii) in view of the board of director’s assessment of our business strategy, performance of comparable organizations, economic and business conditions, and any other circumstances deemed relevant. Specifically, the Board of Directors is authorized to make adjustment in the method of calculating attainment of performance goals and objectives for a performance period as follows: (1) to exclude the dilutive effects of acquisitions or joint ventures; (2) to assume that any business divested by us achieved performance objectives at targeted levels during the balance of a performance period following such divestiture; and (3) to exclude the effect of any change in the outstanding shares of our common stock by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common stockholders other than regular cash dividends. In addition, the Board of Directors is authorized to make adjustment in the method of calculating attainment of performance goals and objectives for a performance period as follows: (A) to exclude restructuring and/or other nonrecurring charges; (B) to exclude exchange rate effects, as applicable, for non-U.S. dollar denominated net sales and operating earnings; (C) to exclude the effects of changes to generally accepted accounting standards required by the Financial Accounting Standards Board; (D) to exclude the effects of any items that are “unusual” in nature or occur “infrequently” as determined under generally accepted accounting principles; (E) to exclude the effects to any statutory adjustments to corporate tax rates; and (F) to make other appropriate adjustments selected by the Board of Directors.
Other Stock Awards. The plan administrator may grant other awards based in whole or in part by reference to our common stock. The plan administrator will set the number of shares under the stock award and all other terms and conditions of such awards.
Changes to Capital Structure. In the event there is a specified type of change in our capital structure, such as a stock split, reverse stock split, or recapitalization, appropriate adjustments will be made to (i) the class(es) and maximum number of shares reserved for issuance under the 2019 Plan; (ii) the class(es) and maximum number of shares by which the share reserve may increase automatically each year; (iii) the class(es) and maximum number of shares that may be issued on the exercise of ISOs; and (iv) the class(es) and number of shares and exercise price, strike price, or purchase price, if applicable, of all outstanding stock awards.
Corporate Transactions. Our 2019 Plan provides that in the event of certain specified significant corporate transactions (or a change in control, as defined below), unless otherwise provided in an award agreement or other written agreement between us and the award holder, the plan administrator may take one or more of the following actions with respect to such stock awards:
arrange for the assumption, continuation, or substitution of a stock award by a successor corporation;
arrange for the assignment of any reacquisition or repurchase rights held by us to a successor corporation;
accelerate the vesting, in whole or in part, of the stock award and provide for its termination if not exercised (if applicable) at or before the effective time of the transaction;
arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by us;
|
|
make a payment in any form determined by our Board of Directors equal to the excess, if any, of (A) the value of the property the participant would have received on exercise of the award immediately before the effective time of the transaction, over (B) any exercise price payable by the participant in connection with the exercise.
The plan administrator is not obligated to treat all stock awards or portions of stock awards in the same manner and is not obligated to take the same actions with respect to all participants.
Under the 2019 Plan, a corporate transaction is generally the consummation of: (i) a sale of all or substantially all of our assets; (ii) the sale or disposition of more than 50% of our outstanding securities; (iii) a merger or consolidation where we do not survive the transaction; or (iv) a merger or consolidation where we do survive the transaction but the shares of our common stock outstanding immediately before such transaction are converted or exchanged into other property by virtue of the transaction.
Change in Control. In the event of a change in control, the plan administrator may take any of the above-mentioned actions. Awards granted under the 2019 Plan may be subject to additional acceleration of vesting and exercisability upon or after a change in control as may be provided in the applicable stock award agreement or in any other written agreement between us or any affiliate and the participant, but in the absence of such provision, no such acceleration will automatically occur. Under the 2019 Plan, a change in control is generally: (i) the acquisition by any person or company of more than 50% of the combined voting power of our then outstanding stock; (ii) a merger, consolidation or similar transaction in which our stockholders immediately before the transaction do not own, directly or indirectly, more than 50% of the combined voting power of the surviving entity (or the parent of the surviving entity) in substantially the same proportions as their ownership immediately prior to such transaction; (iii) a sale, lease, exclusive license or other disposition of all or substantially all of our assets other than to an entity more than 50% of the combined voting power of which is owned by our stockholders in substantially the same proportions as their ownership of our outstanding voting securities immediately prior to such transaction; (iv) a complete dissolution or liquidation of the company; or (v) when a majority of our Board of Directors becomes comprised of individuals who were not serving on our Board of Directors on the date of the underwriting agreement related to our initial public offering, or the incumbent board, or whose nomination, appointment, or election was not approved by a majority of the incumbent board still in office.
Plan Amendment or Termination. Our Board of Directors has the authority to amend, suspend, or terminate our 2019 Plan, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. Certain material amendments also require the approval of our stockholders. No ISOs may be granted after the tenth anniversary of the date our Board of Directors adopts our 2019 Plan. No stock awards may be granted under our 2019 Plan while it is suspended or after it is terminated.
2016 Equity Incentive Plan
General. Our Board of Directors adopted and our stockholders approved our 2016 Plan in September 2016. We have subsequently amended our 2016 Plan in January 2017 and July 2018, the purpose of which was to increase the number of shares available for issuance under our 2016 Plan. Our stockholders approved the amendment in January 2017 and August 2018, respectively. The 2016 Plan was terminated immediately prior to our initial public offering in connection with our adoption of our 2019 Plan; however, awards outstanding under our 2016 Plan continue in full effectmedian employee’s annual compensation in accordance with the requirements of the Summary Compensation Table.
Our median employee compensation in 2022 as calculated using the Summary Compensation Table requirements was $230,835. Our CEO’s compensation in 2022 as reported in the Summary Compensation Table as $7,479,898. Therefore, our CEO Pay Ratio for 2022 is approximately 32:1.
We believe the pay ratio reported above is a reasonable estimate based on our internal records and the methodology described above. The SEC rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their existing terms.
Share Reserve. 18,444,444 shares of our common stock were reserved for issuance under our 2016 Plan.employee populations and compensation practices. As of December 31, 2019, options to purchase 6,180,090shares of common stock, at exercise prices ranging from $0.86 to $10.40 per share, or a weighted-average exercise price of $3.67 per share, and 231,668 shares of restricted common stock were outstanding that were subject to repurchase rights under our 2016 Plan.
Administration. Our Board of Directors administers our 2016 Plan. Our Board of Directors has full authority and discretion to take any actions it deems necessary or advisable forresult, the administration of our 2016 Plan. Our Board of Directors may modify, extend or renew outstanding option or may accept the cancellation of outstanding options (whether grantedpay ratio reported by us or another issuer) in return for the grant of new options for the same or a different number of shares and at the same or a different exercise price.
Types of Awards. Our 2016 Plan provides for the grant of incentive stock options and nonstatutory stock options to purchase shares of our common stock, restricted stock awards and other stock-based awards to employees, members of our Board of Directors and consultants. Incentive stock options may be granted only to employees.
Options. The exercise price of options granted under our 2016 Plancompanies may not be less than 100% (or 110% in the case of incentive stock options granted to certain stockholders) of the fair market value of our common stock on the grant date. Options expire at the time determined by the administrator, but in no event more than 10 years after they are granted, and generally expire earlier if the optionholder’s service terminates.
Change of Control. Unless otherwise expressly provided in the applicable award agreement governing an award, upon a change of control, our Board of Directors (or a committee thereof) may:
accelerate the vesting or lapse of restrictions with respect to, all or any portion of an award;
cancel an award for a cash payment equal to the value of the consideration to be paid in the change of control transaction to holders of the same number of shares of common stock and, in the case of options, less the subject to the options over the aggregate exercise price;
continue, assume or substitute award; or
cancel an appreciation award for no consideration if the exercise price is greater than the value of an underlying share of our common stock in the transaction.
In general, a “change of control” means: (i) the acquisition of the company by another entity by means of any transaction or series of related transactions, unless our stockholders of record immediately prior to such transaction or series of related transactions hold, immediately after such transaction or series of related transactions, at least 50% of the voting power of the surviving or acquiring entity; (ii) a change in control of two-thirds of our Board of Directors; or (iii) a sale of all or substantially all of our assets, subject to certain exceptions.
Transferability. A participant may not transfer stock awards under our 2016 Plan other than by will, the laws of descent and distribution, or as otherwise provided under our 2016 Plan.
Plan Amendment or Termination. Our Board of Directors has the authority to amend, suspend or terminate our 2016 Plan, provided that such action is approved by our stockholders to the extent stockholder approval is necessary. As described above, our 2016 Plan terminated upon the effective date of our 2019 Plan.
2019 Employee Stock Purchase Plan
Our Board of Directors adopted, and our stockholders approved, our 2019 Employee Stock Purchase Plan, or ESPP, in 2019. The ESPP became effective upon the closing of our initial public offering in October 2019. The purpose of the ESPP is to secure the services of new employees, to retain the services of existing employees, and to provide incentives for such individuals to exert maximum efforts toward our success and that of our affiliates. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Code for U.S. employees. In addition, we may make grants of purchase rights that do not comply with Section 423 of the Code (“Non-423 Grants”).
Share Reserve. The ESPP authorizes the issuance of 1,280,000 shares of our common stock under purchase rights grantedcomparable to our employees or to employees of any of our designated affiliates. The number of shares of our common stock reserved for issuance will automatically increase on January 1 of each calendar year, beginning on January 1, 2020 through January 1, 2029, by the lesser of (i) 1% of the total number of shares of our common stock outstanding on the last day of the calendar month before the date of the automatic increasepay ratio as reported above, as other companies have different employee populations and (ii) 2,700,000 shares; provided that before the date of any such increase, our Board of Directors may determine that such increase will be less than the amount set forth in clauses (i) and (ii). As of the date hereof, no shares of our common stock have been purchased under the ESPP.
Administration. Our Board of Directors administers the ESPPpay practices and may delegate its authority to administer the ESPP to our Compensation Committee, which may further delegate its authority to administer the ESPP to a subcommittee. The ESPP is implemented through a series of offerings under which eligible employees are granted purchase rights to purchase shares of our common stock on specified dates during such offerings. Under the ESPP, we may specify offerings with durations of not more than 27 months,utilize different methodologies, exclusions, estimates and may specify shorter purchase periods within each offering. The administrator will establish for each offering, one or more purchase dates on which shares of our common stock will be purchased for employees participatingassumptions in the offering. An offering under the ESPP may be terminated under certain circumstances.
Payroll Deductions. Generally, all regular employees, including executive officers, employed by us or by any of our designated affiliates, may participate in the ESPP and may contribute, normally through payroll deductions, up to 15% ofcalculating their earnings (as defined in the ESPP) for the purchase of our common stock under the ESPP. Unless otherwise determined by our Board of Directors, common stock will be purchased for the accounts of employees participating in the ESPP at a price per share that is at least the lesser of (i) 85% of the fair market value of a share of our common stock on the first date of an offering or (ii) 85% of the fair market value of a share of our common stock on the date of purchase.own pay ratios.
Limitations. Employees may have to satisfy one or more of the following service requirements before participating in the ESPP, as determined by our Board of Directors, including: (i) being customarily employed for more than 20 hours per week; (ii) being customarily employed for more than five months per calendar year; or (iii) continuous employment with us or one of our affiliates for a period of time (not to exceed two years). No employee may purchase shares under the ESPP at a rate in excess of $25,000 worth of our common stock based on the fair market value per share of our common stock at the beginning of an offering for each calendar year such a purchase right is outstanding. Finally, no employee will be eligible for the grant of any purchase rights under the ESPP if immediately after such rights are granted, such employee has voting power over 5% or more of our outstanding capital stock measured by vote or value under Section 424(d) of the Code. The Board of Directors may exclude employees from receiving Non-423 Grants if the Board of Directors determines that these grants would not be practical or advisable.
Changes to Capital Structure. In the event that there occurs a change in our capital structure that affects the shares of our stock subject to the ESPP through such actions as a stock split, merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, liquidating dividend, combination of shares, exchange of shares, change in corporate structure, or similar transaction, the Board of Directors will make appropriate adjustments to: (i) the class(es) and maximum number of shares reserved under the ESPP; (ii) the class(es) and maximum number of shares by which the share reserve may increase automatically each year; (iii) the class(es) and number of shares subject to and purchase price applicable to outstanding offerings and purchase rights; and (iv) the class(es) and number of shares that are subject to purchase limits under ongoing offerings.
Corporate Transactions. In the event of certain significant corporate transactions, any then-outstanding rights to purchase our stock under the ESPP may be assumed, continued, or substituted for by any surviving or acquiring entity (or its parent company). If the surviving or acquiring entity (or its parent company) elects not to assume, continue, or substitute for such purchase rights, then the participants’ accumulated payroll contributions will be used to purchase shares of our common stock within 10 business days before such corporate transaction, and such purchase rights will terminate immediately.
Under the ESPP, a corporate transaction is generally the consummation of: (i) a sale of all or substantially all of our assets, as determined by the board; (ii) the sale or disposition of more than 50% of our outstanding securities; (iii) a merger or consolidation where we do not survive the transaction; and (iv) a merger or consolidation where we do survive the transaction but the shares of our common stock outstanding immediately before such transaction are converted or exchanged into other property by virtue of the transaction.
ESPP Amendment or Termination. Our Board of Directors has the authority to amend or terminate our ESPP, provided that except in certain circumstances such amendment or termination may not materially impair any outstanding purchase rights without the holder’s consent. We will obtain stockholder approval of any amendment to our ESPP as required by applicable law or listing requirements.
Health and Welfare and Retirement Benefits; Perquisites
Health and Welfare Benefits and Perquisites
All of our current named executive officers are eligible to participate in our employee benefit plans, including our medical, dental, vision, disability and life insurance plans, in each case on the same basis as all of our other employees. We generally do not provide perquisites or personal benefits to our named executive officers, except in limited circumstances, such as the housing allowance provided to Dr. Virgin, as described above under “—Agreements with Named Executive Officers—Agreement with Herbert (Skip) Virgin, M.D., Ph.D.”
Our named executive officers are eligible to participate in a defined contribution retirement plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees may defer eligible compensation on a pre-tax or after-tax (Roth) basis, up to the statutorily prescribed annual limits on contributions under the Code. Contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions. We currently match 100% of employee contributions of the first three percent of compensation, and 50% of contributions on the next two percent of compensation. Employees are immediately and fully vested in all contributions. The 401(k) plan is intended to be qualified under Section 401(a) of the Code with the 401(k) plan’s related trust intended to be tax exempt under Section 501(a) of the Code. As a tax-qualified retirement plan, contributions to the 401(k) plan (except for Roth contributions) and earnings on those contributions are not taxable to the employees until distributed from the 401(k) plan. Our Board of Directors may elect to adopt qualified or nonqualified benefit plans in the future, if it determines that doing so is in our best interests.
The table below shows for the fiscal year ended December 31, 20192022, certain information with respect to the compensation of all of our non-employee directors, including our ExecutiveNon-Executive Chairman.
Director Compensation for Fiscal 2019Year 2022
Name |
| Fees Earned or Paid in Cash ($) |
|
| Option Awards ($) (1)(2) |
|
| All Other Compensation ($) |
|
| Total ($) |
| Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) (2) | Option Awards ($)(1) (2) | Total ($) | ||||||||||||||||
Vicki Sato, Ph.D. |
|
| 45,040 |
|
|
| 1,222,757 |
|
|
| — |
|
|
| 1,267,797 |
| 88,274 | 154,617 | 245,323 | 488,214 | ||||||||||||
Kristina Burow |
|
| 10,263 |
|
|
| — |
|
|
| — |
|
|
| 10,263 |
| ||||||||||||||||
Thomas Daniel, M.D.(3) |
|
| 23,917 |
|
|
| — |
|
|
| — |
|
|
| 23,917 |
| ||||||||||||||||
Klaus Frueh, Ph.D. (4) |
|
| 27,661 |
|
|
| — |
|
|
| 150,000 |
|
|
| 177,661 |
| ||||||||||||||||
Jeffrey S. Hatfield | 58,452 | 154,617 | 245,323 | 458,392 | ||||||||||||||||||||||||||||
Robert More |
|
| 13,387 |
|
|
| — |
|
|
| — |
|
|
| 13,387 |
| 65,000 | 154,617 | 245,323 | 464,940 | ||||||||||||
Janet Napolitano | 48,683 | 154,617 | 245,323 | 448,623 | ||||||||||||||||||||||||||||
Robert Nelsen |
|
| 10,040 |
|
|
| — |
|
|
| — |
|
|
| 10,040 |
| 45,000 | 154,617 | 245,323 | 444,940 | ||||||||||||
Dipchand Nishar |
|
| 10,040 |
|
|
| — |
|
|
| — |
|
|
| 10,040 |
| ||||||||||||||||
Dipchand (Deep) Nishar(3) | 17,419 | — | — | 17,419 | ||||||||||||||||||||||||||||
Robert Perez |
|
| 39,239 |
|
|
| 320,428 |
|
|
| — |
|
|
| 359,667 |
| 51,161 | 154,617 | 245,323 | 451,100 | ||||||||||||
Saira Ramasastry | 60,000 | 154,617 | 245,323 | 459,940 | ||||||||||||||||||||||||||||
Phillip Sharp, Ph.D. |
|
| 37,454 |
|
|
| 320,428 |
|
|
| — |
|
|
| 357,882 |
| 55,000 | 154,617 | 245,323 | 454,940 | ||||||||||||
Saira Ramasastry |
|
| 16,060 |
|
|
| 537,603 |
|
|
| — |
|
|
| 553,663 |
| ||||||||||||||||
Elliott Sigal, M.D., Ph.D. | 62,500 | 154,617 | 245,323 | 462,440 | ||||||||||||||||||||||||||||
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| (1) | In accordance with SEC rules, this column reflects the aggregate grant date fair value of the stock awards and option awards granted during fiscal |
Name |
| Option Awards Outstanding at Year-End (#) |
|
| Stock Awards Outstanding at Year-End Subject to Repurchase Rights (#) |
| ||
Vicki Sato, Ph.D. |
|
| 225,265 |
|
|
| 325,600 |
|
Kristina Burow |
|
| — |
|
|
| — |
|
Thomas Daniel, M.D. |
|
| 42,377 |
|
|
| — |
|
Klaus Frueh, Ph.D. |
|
| 42,377 |
|
| 66,667 |
| |
Robert More |
|
| — |
|
|
| — |
|
Robert Nelsen |
|
| — |
|
|
| — |
|
Dipchand Nishar |
|
| — |
|
|
| — |
|
Robert Perez |
|
| 64,599 |
|
|
| — |
|
Phillip Sharp, Ph.D. |
|
| 48,119 |
|
|
| — |
|
Saira Ramasastry |
|
| 57,777 |
|
|
| — |
|
| (3) |
|
Name | Option Awards Outstanding at Year-End (#) | Stock Awards outstanding at Year End Subject to Rights (#) | ||||||
Vicki Sato, Ph.D. | 268,472 | 6,405 | ||||||
Jeffrey S. Hatfield | 66,058 | 6,405 | ||||||
Robert More | 43,913 | 6,405 | ||||||
Janet Napolitano | 49,688 | 6,405 | ||||||
Robert Nelsen | 44,443 | 6,405 | ||||||
Dipchand (Deep) Nishar(1) | — | — | ||||||
Robert Perez | 108,724 | 6,405 | ||||||
Saira Ramasastry | 86,832 | 6,405 | ||||||
Phillip Sharp, Ph.D. | 92,527 | 6,405 | ||||||
Elliott Sigal, M.D., Ph.D. | 47,952 | 6,405 | ||||||
| (1) |
|
Non-Employee Director Compensation Policy
In October 2017, our board of directors adopted a compensation policy applicable to all of our non-employee directors that are not affiliated with our stockholders. This compensation policy provided that each such director would receive annual cash compensation of $35,000 for service on our board of directors. We have reimbursed our non-employee directors for direct expenses incurred in connection with attending meetings of our board of directors or its committees, and occasionally granted stock options and restricted stock.
In addition, in 2016 we entered into a non-executive chairman agreement with Dr. Sato pursuant to which Dr. Sato agreed to serve asDecember 2020 the chairman of the Board, act as a liaison between our senior management and the Board and advise our senior management on company operations. The agreement was terminated in September 2019. In addition, Dr. Sato is eligible to receive any cash fees payable to non-employee directors generally as determined by the Board from time to time, and was eligible for a grant of 1,907,555 restricted shares of common stock. Pursuant to this agreement, on January 6, 2017, Dr. Sato was granted 1,621,422 shares of restricted stock. 476,889 of these shares vested on August 1, 2017 and the remainder of the shares are eligible to vest in 29 equal monthly installments thereafter, provided that 100% of the unvested shares are eligible to vest in full upon a change in control (as defined in the 2016 Plan), in each case subject to her continued service through the vesting dates. In addition, on January 6, 2017, Dr. Sato purchased 286,133 shares of restricted stock at the then-current fair market value of $0.86 per share pursuant to a promissory note, subject to our right to repurchase the shares upon termination of her service for any reason at a purchase price equal to the lesser of fair market value or the amount Dr. Sato paid for the shares that lapses in seven equal monthly installments beginning February 1, 2020 and ending on August 1, 2020, provided that the repurchase right lapses as to all of the shares upon a change in control (as defined in the 2016 Plan), subject to her continued service through the vesting dates. Dr. Sato’s chairman agreement also provided that, if following the closing of our Series B convertible preferred stock financing, Dr. Sato’s ownership was greater than a 2% ownership of our company, then she would be required to automatically forfeit such number of shares causing her ownership to exceed 2%, and if her ownership was less than 2%, then she was entitled to an additional grant of restricted stock equal to such number of shares that would result in an ownership of 2%. Our Series B convertible preferred stock financing closed in January 2019 causing Dr. Sato’s ownership to be reduced to below 2%, and in March 2019, Dr. Sato was granted an option to purchase 160,666 shares of our common stock that vest as follows: 25% on August 1, 2018 and the remainder in 36 equal monthly installments thereafter, subject to Dr. Sato’s continued employment through each such date. Dr. Sato and our board of directors each approved Dr. Sato receiving the stock option grant in lieu of the grant of restricted stock, in full satisfaction of the above.
In August 2019, our Board of Directors approved a new worked in concert with our compensation consultant to review our non-employee director compensation policy and approved a policy that took effect in October 2019January 2021 (our “Director Compensation Policy”). Under this policy,our Director Compensation Policy, each of our non-employee directors areis paid a cash retainer for service on the Board of Directors and an additional cash retainer for service on each committee on which the director is a member. The chairperson of each committee receives a higher retainer than other members of each committee for such service. These retainers are payable in arrears in four equal quarterly installments on the last day of each quarter, provided that the amount of such payment is prorated for any portion of such quarter that the director is not serving on ourthe Board of Directors. No retainers were paid in respect of any period prior to the completion of our initial public offering in October 2019.
The retainers to be paid to non-employee directors for service on the Board of Directors and for service on each committee of the Board of Directors on which the director is a member under this newthe policy arein effect for 2022 were as follows:
Name |
| Annual Service Retainer |
|
| Chairperson Retainer (Inclusive of Annual Service Retainer) |
| Annual Service Retainer | Chairperson Retainer (Inclusive of Annual Service Retainer) | ||||||||
Board of Directors |
| $ | 40,000 |
|
| $ | 70,000 |
| $ | 40,000 | $ | 75,000 | ||||
Audit Committee |
| $ | 8,000 |
|
| $ | 16,000 |
| $ | 10,000 | $ | 20,000 | ||||
Compensation Committee |
| $ | 6,000 |
|
| $ | 12,000 |
| $ | 7,500 | $ | 15,000 | ||||
Nominating and Corporate Governance Committee |
| $ | 5,000 |
|
| $ | 10,000 |
| $ | 5,000 | $ | 10,000 | ||||
Science and Technology Committee | $ | 7,500 | $ | 15,000 | ||||||||||||
In December 2022 the Board of Directors, upon the recommendation of the Compensation Committee, approved changes to the annual cash service retainer, effective January 1, 2023. Under the amended Director Compensation Policy, the annual cash service retainer each non-employee director receives for being a member of the Board of Directors was increased to $50,000.
58
In addition, under our new non-employee director compensation policyDirector Compensation Policy in effect for 2022, each non-employee director newly elected or appointed to ourthe Board of Directors willwas entitled to receive two equity awards (collectively, the “Initial Grants”) with a value of $400,000 in the aggregate comprised of (i) an option to purchase 57,777 shares of our common stock (the “Initial Option Grant”) and (ii) a RSU award covering shares of the Company’s common stock (the “Initial RSU Grant”). The total number of shares subject to the Initial Option Grant will be initially calculated in accordance with the Black-Scholes valuation methodology and the total number of shares subject to the Initial RSU Grant will be initially calculated in accordance with the Fair Market Value (as defined in the 2019 Plan) as of the grant date, and such resulting number of shares shall be divided between the Initial Grants based on a fixed ratio of two shares subject to the first trading day on or after his or her election or appointmentInitial Option Grant for every one share subject to our Boardthe Initial RSU Grant, with the number of Directors. shares subject to the Initial Option Grant rounded down to the nearest whole share and in no event exceeding 16,000 shares and the number of shares subject to the Initial RSU Grant rounded down to the nearest whole share and in no event exceeding 8,000 shares. One-third of the shares subject to each such stock optionInitial Option Grant will vest on the one-year anniversary of such director’s initial election or appointment and thereafter the remainder of the shares subject to each such stock option will vest monthly over a two-year period, subject to the director’s continued service as a director. The Initial RSU Grant will vest in three equal installments on the first, second and third anniversaries of such director’s initial election or appointment, subject to the director’s continued service as a director.
Further, on the first market trading day after eachthe 2022 annual meeting of stockholders, each non-employee director that continuescontinued to serve as a non-employee member on ourthe Board of Directors will receive anreceived two equity awards (collectively, the “Annual Grants”) with a value of $400,000 in the aggregate comprised of (i) a stock option to purchase 28,888 shares of ourthe Company’s common stock.stock (the “Annual Option Grant”); and (ii) a RSU award covering shares of the Company’s common stock (the “Annual RSU Grant”). The shares subject to each such stock optionAnnual Grant will vest in full on the one-year anniversary of the grant date, subject to the director’s continued service as a director. Accordingly, we expectThe total number of shares subject to the Annual Option Grant will be initially calculated in accordance with the Black-Scholes valuation methodology as of the grant an aggregatedate and the total number of 231,104 optionsshares subject to our non-employee directorsthe Annual RSU Grant will be initially calculated in accordance with the Fair Market Value (as defined in the 2019 Plan) as of the grant date, and such resulting number of shares shall be divided between the Annual Grants based on May 21, 2020,a fixed ratio of two shares subject to the first trading day after our annual meeting. Annual Option Grant for every one share subject to the Annual RSU Grant, with the number of shares subject to the Annual Option Grant rounded down to the nearest whole share and in no event exceeding 16,000 shares and the number of shares subject to the Annual RSU Grant rounded down to the nearest whole share and in no event exceeding 8,000 shares.
The exercise price of all options willwas equal the fair market value of our common stock on the date of grant. The options grantedGrants pursuant to our non-employee director compensation policy will be grantedthe Director Compensation Policy were made under the 2019 Plan and are thus subject to the non-employee director compensation limits detailed in the 2019 Plan. Options and RSUs granted to our non-employee directors under the 2019 Plan pursuant to the Director Compensation Policy will vest in full upon the occurrence of a change in control (as defined in the 2019 Plan) prior to the termination of the director’s continuous service.
We also reimburse each non-employee director for travel expenses incurred in connection with attending each board or committee meeting. This policy is intended to provide a total compensation package that enables us to attract and retain qualified and experienced individuals to serve as directors and to align our directors’ interests with those of our stockholders.
Rule 10b5-1 Sales Plans
Our directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contractby contracting with a broker toat a time when they are not in possession of material non-public information about the Company and then buy or sell our common stock on a periodic basis.basis under the plan. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or officer when entering into the plan, without further direction from them.them during the life of the plan. The director or officer may amend a Rule 10b5-1 plan in some circumstances and may terminate a plan at any time.under some circumstances. Our directors and executive officers also may buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material nonpublicnon-public information subject to compliance with the terms of our insider trading policy.policy and our pre-clearance procedures.
Equity Compensation Plan Information
The following table provides certain information with respect to all of our equity compensation plans in effect as of December 31, 2019.2022, about:
Plan Category |
| Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)(#) |
|
| Weighted-average exercise price of outstanding options, warrants and rights (b)($) |
|
| Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a)) (c)(#) |
|
| |||
Equity compensation plans approved by security holders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 Equity Incentive Plan |
|
| 6,180,090 |
|
| $ | 3.67 |
|
|
| — | (1) |
|
2019 Equity Incentive Plan |
|
| 1,006,208 |
|
| $ | 14.96 |
|
|
| 4,866,468 | (2) |
|
2019 Employee Stock Purchase Plan |
|
| — |
|
|
| — |
|
|
| 1,280,000 | (3) |
|
Equity compensation plans not approved by security holders |
|
| — |
|
|
| — |
|
|
| — |
|
|
Total |
|
| 7,186,298 |
|
|
|
|
|
|
| 6,146,468 |
|
|
the number of shares of common stock subject to issuance upon exercise of outstanding stock options and vesting of RSUs under plans adopted by us;
the weighted-average exercise price of outstanding stock options under plans adopted by us; and
59
the number of shares of common stock available for future issuance under: the 2016 Plan, the 2019 Plan and the Vir Biotechnology, Inc. 2019 Employee Stock Purchase Plan (“ESPP”).
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)(#) | Weighted- average exercise price of outstanding options, warrants and rights (b)($) (1) | Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a)) (c)(#) | |||||||||
Equity compensation plans approved by security holders: | ||||||||||||
2016 Equity Incentive Plan(2) | 2,024,011 | $ | 4.82 | — | ||||||||
2019 Equity Incentive Plan(3) | 11,249,534 | $ | 38.04 | 12,911,263 | ||||||||
2019 Employee Stock Purchase Plan(4) | — | — | 4,751,436 | |||||||||
Equity compensation plans not approved by security holders: | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | 13,273,545 | 17,662,699 | ||||||||||
|
|
|
| |||||||||
| (1) |
|
| (2) | Following the adoption of the 2019 Plan, no additional stock awards |
| (3) | The number of shares of common stock reserved for issuance under the 2019 Plan will automatically increase on January 1 of each year, beginning on January 1, 2020, and continuing through and including January 1, 2029, by 5% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by |
| (4) | The number of shares of common stock reserved for issuance under the ESPP will automatically increase on January 1 of each year, beginning on January 1, 2020, and continuing through and including January 1, 2029, by the lesser of (i) 1% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, (ii) 2,700,000 shares or (iii) such lesser number of shares determined by |
60
TRANSACTIONS WITH RELATED PERSONS
Related Persons
Related-PersonPerson Transactions Policy and Procedures
In October 2019 we adopted a written related partyperson transactions policy that sets forth our procedures for the identification, review, consideration and approval or ratification of related partyperson transactions. For purposes of this policy only, a “related person transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which we and any related person, directly or indirectly, are participants involving an amount that exceeds $120,000. Transactions involving compensation for services provided to us as an employee, consultant or director are not considered related-personrelated person transactions under this policy. A “related person” is any executive officer, director, nominee to become a director or a holder of more than 5% of any class of our capital stock,voting securities, or any affiliate or member of the immediate family of the foregoing.
Under the policy, where a transaction has been identified as a related-personrelated person transaction, management must present information regarding the proposed related-personrelated person transaction to our the Nominating and Corporate Governance Committee or, where review by our the Nominating and Corporate Governance Committee would be inappropriate due to a conflict of interest, to the Board of Directors or another independent body of ourthe Board of Directors, for review. The presentation must include a description of, among other things, all of the parties, the direct and indirect interests of the related persons, the purpose of the transaction, the material facts, the benefits of the transaction to us and whether any alternative transactions are available, an assessment of whether the terms are comparable to the terms available from unrelated third parties and management’s recommendation. To identify related-partyrelated person transactions in advance, we rely on information supplied by our executive officers, directors and certain significant stockholders. In considering related-personrelated person transactions, our the Nominating and Corporate Governance Committee, the Board of Directors or another independent body of ourthe Board of Directors takes into account the relevant available facts and circumstances including, but not limited to:
the risks, costs and benefits to us;
the impact on a director’s independence in the event the related person is a director, immediate family member of a director or an entity with which a director is affiliated;
the terms of the transaction;
the availability of other sources for comparable services or products; and
the terms available to or from, as the case may be, unrelated third parties under the same or similar circumstances.
All of the transactions described in this section were entered into prior to the adoption of this policy. Although a written policy for the review and approval of transactions with related persons was not in place prior to our initial public offering in October 2019, our Board of Directors has historically reviewed and approved any transaction where a director or officer had a financial interest, including the transactions described above. Prior to approving such a transaction, the material facts as to a director’s or officer’s relationship or interest in the agreement or transaction were disclosed to our Board of Directors. Our Board of Directors considered this information when evaluating the transaction and in determining whether such transaction was fair to us and in the best interest of all our stockholders.
Certain Related PartyPerson Transactions
The following includes a summary of transactions with related persons since January 1, 20192022, to which we have been a party and in which the amount involved in the transaction exceeded $120,000:
Series B Convertible Preferred Stock FinancingAmendments to GSK Collaboration
In January 2019, we issued an aggregate of 18,202,213 shares of Series B convertible preferred stock at $18.00 per share for gross proceeds of $327.6 million in two closings pursuant to an Amended and Restated Series A-1 and Series B Preferred Stock Purchase Agreement. Both closings occurred in January 2019.
The table below sets forth the number of shares of our Series B convertible preferred stock purchased by our executive officers, directors, holders of more than 5% of our capital stock and their affiliated entities or immediate family members. Each share of Series B convertible preferred stock in the table below converted into one share of our common stock upon the completion of our initial public offering.
Name |
| Series B Convertible Preferred Stock (#) |
|
| Aggregate Cash Purchase Price ($) |
| ||
Entities affiliated with ARCH Venture Partners (1) |
|
| 2,777,777 |
|
|
| 50,000,000 |
|
SVF Endurance (Cayman) Limited (2) |
|
| 6,111,111 |
|
|
| 110,000,000 |
|
Alta Partners NextGen Fund I, L.P. (3) |
|
| 277,777 |
|
|
| 5,000,000 |
|
|
|
|
|
|
|
Relationships with Klaus Frueh
In June 2016, we entered into a consulting agreement with Klaus Frueh, Ph.D., a former member of our Board of Directors and a stockholder, pursuant to which Dr. Frueh agreed to provide certain consulting, advisory and related services within the field of immune programming on an exclusive basis, in exchange for a consulting fee of $150,000 per year. Unless we terminate the agreement earlier, the consulting agreement will terminate in September 2021. We paid Dr. Frueh an aggregate of $150,000 pursuant to the consulting agreement during 2019.
Investors’ Rights, Management Rights, Voting and Co-Sale Agreements
In connection with our convertible preferred stock financings, we entered into investors’ rights, management rights, voting and right of first refusal and co-sale agreements containing registration rights, information rights, rights of first offer, voting rights and rights of first refusal, among other things, with certain holders of our capital stock. The holders of more than 5% of our capital stock that are party to these agreements are entities affiliated with ARCH Venture Partners and SVF. In connection with our acquisition of TomegaVax, former stockholders of TomegaVax became parties to the investors’ rights, voting and right of first refusal and co-sale agreements. Our directors who are parties to these agreements are Dr. Frueh, who resigned from our Board in October 2019, and Mr. More.
These stockholder agreements terminated upon the closing of our initial public offering in October 2019, except for the registration rights granted under our investors’ rights agreement, which will terminate upon the earliest of (1) the closing of a deemed liquidation event, as defined in our amended and restated certificate of incorporation as currently in effect; (2) with respect to each stockholder, the date when such stockholder can sell all of its registrable shares without limitation during a three-month period without registration pursuant to Rule 144 of the Securities Act (“Rule 144”), or another similar exemption under the Securities Act; and (3) five years after the completion of our initial public offering.
In January 2017, we issued two promissory notes to Dr. Scangos, our President, Chief Executive Officer and a member of our Board of Directors, and Vicki Sato, Ph.D., Chairman of our Board of Directors, for principal amounts of $2.9 million and $0.2 million, respectively, with an interest rate of 1.97% per annum, to allow Dr. Scangos and Dr. Sato to purchase 3,338,222 shares and 286,133 shares of our restricted stock, respectively, pursuant to their respective restricted stock purchase agreements. The principal and accrued interest outstanding on each of these promissory notes was approximately $3.0 million and $0.3 million for Dr. Scangos and Dr. Sato, respectively, as of July 31, 2019. These loans were repaid in full in August 2019.
Employment of an Immediate Family Member
Jennifer Scangos, the daughter of Dr. Scangos, our President, Chief Executive Officer and a member of our Board of Directors, is employed by us as a legal counsel. For the year ended December 31, 2019, Ms. Scangos earned $139,000 and $24,325 respectively, in base salary and bonus, which was in line with compensation we pay to employees in similar roles. Ms. Scangos’s 2020 base salary and bonus opportunity are $152,000and $26,600, respectively. Ms. Scangos has received and continues to be eligible to receive equity awards and benefits on the same general terms and conditions as applicable to unrelated employees in similar positions.
Collaboration with Brii Biosciences
InOn May 2018,27, 2022, we entered into an optionamendment (“Amendment No. 1”) to the definitive collaboration agreement (the “2020 GSK Agreement”) with Glaxo Wellcome UK Limited (“GW”) and licenseGlaxoSmithKline Biologicals S.A. (“GSK Bio”) (as assignee of the 2020 GSK Agreement from Beecham S.A.) (together “GSK”) Beecham S.A. (“Beecham” and together “GSK”).
Pursuant to Amendment No. 1, we and GSK acknowledged that the antibody products that had been licensed to WuXi Biologics (Kong Kong) Limited (“WuXi Biologics”) in mainland China, Hong Kong, Macau and Taiwan and had reverted to us pursuant to the termination of our agreement with Brii Bio ParentWuXi Biologics. We agreed with GSK that they are now included in and Brii Bio, pursuantgoverned by the 2020 GSK Agreement, subject to certain amendments relating to sotrovimab.
Under the terms of Amendment No. 1, GSK has the sole right to develop (including to seek, obtain or maintain regulatory approvals), manufacture and commercialize sotrovimab in and for mainland China, Hong Kong, Macau and Taiwan at GSK’s sole cost and expense (other than certain payments for which we remain responsible under certain of our existing agreements with third parties). GSK paid us a one-time upfront payment of $7.0 million in consideration for the rights and licenses granted to GSK under Amendment No. 1. In addition, GSK will be obligated to pay us tiered royalties on net sales of
61
sotrovimab in mainland China, Hong Kong, Macau and were granted, an exclusive option with respectTaiwan in percentages ranging from the high teens to upthe low thirties. Such royalties are payable to four collaboration programs forus during the term of the 2020 GSK Agreement applicable to the antibody program.
On February 8, 2023, we and GSK entered into Amendment No. 2 and Amendment No. 3 to the 2020 GSK Agreement. Pursuant to Amendment No. 2 to the 2020 GSK Agreement, effective as of March 31, 2022 (the “Effective Date”), we and GSK agreed to remove the program relating to the development and commercialization of therapeuticvaccine products targeting SARS-CoV-2 and potentially other coronaviruses (the “CoV Vaccine Program”) from the 2020 GSK Agreement, and to wind down and terminate the cost-sharing arrangements and all ongoing activities in relation to the CoV Vaccine Program. As of the Effective Date, the CoV Vaccine Program had not yet advanced to its predefined development candidate stage. We retain the right to progress development of vaccine products directed to SARS-CoV-2 and other coronaviruses independently (including with or for infectious diseases. Dr. Scangos, our President, Chief Executive Officer and a memberthird parties) outside the scope of our Boardthe 2020 GSK Agreement, subject to the payment of Directors, and Mr. Nelsen, a member of our Board of Directors, served at the time and currently serve as directors of Brii Bio Parent and Brii Bio. We agreedtiered royalties to pay Brii Bio an option exercise fee for each licensed Brii Bio program up to $50.0 million, and milestone payments and royalties forGSK on net sales of licensedany vaccine products covered by certain GSK intellectual property rights in the United States arisinglow single digits, subject to certain deductions in certain circumstances. Pursuant to Amendment No. 3 to the 2020 GSK Agreement, we and GSK agreed to modify the program relating to the development and commercialization of antibodies targeting SARS-CoV-2 and potentially other coronaviruses to remove from the selected collaboration programs. Brii Bio agreedall coronavirus antibodies other than sotrovimab and VIR-7832, and certain variants thereof. Sotrovimab and VIR-7832, and certain variants thereof, remain subject to pay us an option exercise feethe terms of the 2020 GSK Agreement, and we retain the sole right to progress the development and commercialization of the terminated antibody products independently (including with or for each licensed Vir program upthird parties), subject to $20.0 million, and milestone payments andthe payment of tiered royalties forto GSK on net sales of licensedsuch terminated antibody products in greater China arisingat percentages ranging from the selected collaboration programs.very low single digits to the mid-single digits, depending on the nature of the antibody product being commercialized, and subject to certain deductions in certain circumstances.
Other Transactions
We have entered into offer letter agreements with our executive officers that, among other things, provide for certain compensatory and change in control benefits as well as severance benefits. For a description of these agreements with our named executive officers, see the section titled “Agreements“Executive Compensation—Agreements with Named Executive Officers.”
We have also granted stock options and restricted stock to our executive officers and certain of our directors. For a description of these equity awards, see the section titled “Executive Compensation.”
Indemnification Agreements
We have entered into indemnification agreements with each of our current directors and executive officers. Our amended and restated certificate of incorporation and our amended and restated bylawsBylaws provide that we will indemnify our directors and officers to the fullest extent permitted by applicable law.
62
Householding of Proxy Materials
HOUSEHOLDING OF PROXY MATERIALS
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for Notices of Internet Availability of Proxy Materials or other annual meeting materials with respect to two or more stockholders sharing the same address by delivering a single Notice of Internet Availability of Proxy Materials or other annual meeting materials addressed to those stockholders. This process, which is commonly referred to as “householding,“householding,” potentially means extra convenience for stockholders and cost savings for companies.
This year, a number of brokers with account holders who are Company stockholders will be “householding”“householding” our proxy materials. A single Notice of Internet Availability of Proxy Materials will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be “householding”“householding” communications to your address, “householding”“householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding”“householding” and would prefer to receive a separate Notice of Internet Availability of Proxy Materials, please notify us or your broker. Direct your written request to Vir Biotechnology, Inc., Secretary, 499 Illinois Street, Suite 500, San Francisco, California 94158.94158 or call us at (415) 906-4324. Stockholders who currently receive multiple copies of the Notices of Internet Availability of Proxy Materials at their addresses and would like to request “householding”“householding” of their communications should contact their brokers.
63
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented for consideration at the annual meeting.Annual Meeting. If any other matters are properly brought before the meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment.
By Order of the Board of Directors
Howard HornSung Lee
Secretary
April 6, 20207, 2023
A copy of our Annual Report to the Securities and Exchange Commission on Form 10-K for the fiscal year ended December 31, 20192022, is available without charge upon written request to: Secretary, Vir Biotechnology, Inc., 499 Illinois Street, Suite 500, San Francisco, California 94158.
64
| ||
VIR BIOTECHNOLOGY, INC. 499 ILLINOIS STREET, SUITE 500 SAN FRANCISCO, CA 94158 | VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above | |
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form. | ||
During The Meeting - Go to www.virtualshareholdermeeting.com/VIR2023 | ||
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. | ||
VOTE BY PHONE - 1-800-690-6903 | ||
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. | ||
VOTE BY MAIL | ||
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | ||
VIR BIOTECHNOLOGY, INC. 499 ILLINOIS STREET, SUITE 500 SAN FRANCISCO, CA 94158 VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. 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. 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 the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D07048-P38486
V05359-P85892 KEEP THIS PORTION FOR YOUR RECORDS
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY VIR BIOTECHNOLOGY, INC. The Board of Directors recommends you vote FOR the following: To elect the following Class I Director Nominees: Nominees: For Withhold 1a. Kristina Burow 1b. Robert More 1c. Vicki Sato, Ph.D. The Board of Directors recommends you vote FOR the following proposal: 2. Ratification of selection of Ernst & Young LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2020. For Against Abstain 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) Date
| VIR BIOTECHNOLOGY, INC. | ||||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR the following proposals:
| ||||||||||||||||||||||||||||
1. | To elect the following four nominees for director to hold office until the 2026 Annual Meeting of Stockholders | |||||||||||||||||||||||||||
| Nominees: | For | Withhold | ||||||||||||||||||||||||||
| 1a. | Robert More | ☐ | ☐ | |||||||||||||||||||||||||
| 1b. | Janet Napolitano | ☐ | ☐ | |||||||||||||||||||||||||
| 1c. | Vicki Sato, Ph.D. | ☐ | ☐ | |||||||||||||||||||||||||
| 1d. | Elliott Sigal, M.D., Ph.D. | ☐ | ☐ | For | Against | Abstain | ||||||||||||||||||||||
2. | To approve, on an advisory basis, the compensation of the Company’s named executive officers. | ☐ | ☐ | ☐ | ||||||||||||||||||||||||
3. | To ratify the appointment by the Audit Committee of the Board of Directors of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023. | ☐ | ☐ | ☐ | ||||||||||||||||||||||||
NOTE: Such other business as may properly come before the meeting or any adjournment 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) | Date | |||||||||||||||||||||||||
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. D07049-P38486 VIR BIOTECHNOLOGY, INC. Annual Meeting of Stockholders May 20, 2020 10:00 AM PT This proxy is solicited by the Board of Directors The stockholder(s) hereby appoint(s) George Scangos, Ph.D. and Howard Horn, 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 VIR BIOTECHNOLOGY, INC. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 10:00 AM, PT on May 20, 2020, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations and in the discretion of the proxyholders on any other matter that properly comes before the meeting. Continued and to be signed on reverse side
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
V05360-P85892
VIR BIOTECHNOLOGY, INC. Annual Meeting of Stockholders May 19, 2023 11:30 AM PT This proxy is solicited on behalf of the Board of Directors The stockholder(s) hereby appoint(s) Marianne De Backer, MSc, Ph.D., MBA and Sung Lee or any of them, as proxies, each with the power to appoint his or her 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 VIR BIOTECHNOLOGY, INC. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 11:30 AM PT on May 19, 2023, via the Internet at www.virtualshareholdermeeting.com/VIR2023, including any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations and in the discretion of the proxyholders on any other matter that properly comes before the meeting or any adjournment or postponement thereof. |
| Continued and to be signed on reverse side |