kura-def14a_20210622.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

Filed by the Registrant

Filed by a Party other than the Registrant

Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

KURA ONCOLOGY, INC.

(Name of Registrant as Specified In Its Charter)

 

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Fee paid previously with preliminary materials.

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

(1)

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KURA ONCOLOGY, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON JUNE 22, 2021

Dear Stockholder:

You are cordially invited to attend the 2021 Annual Meeting of Stockholders of Kura Oncology, Inc., a Delaware corporation, to be held on Tuesday, June 22, 2021, at 8:30 a.m. Pacific Time (the “Annual Meeting”). In light of public health concerns regarding the COVID-19 pandemic, to protect the health and safety of our stockholders and employees and facilitate stockholder participation in the Annual Meeting, this year, the Annual Meeting will be held through a live webcast at www.proxydocs.com/KURA. You will not be able to attend the meeting in person. The Annual Meeting is being held for the following purposes:

 

1.

To elect the two nominees for Class I director named in the accompanying proxy statement to serve for three-year terms until the 2024 Annual Meeting of Stockholders.

 

2.

To ratify the selection 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, 2021.

 

3.

To approve, on an advisory basis, the compensation of our named executive officers, as disclosed in the proxy statement.

 

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.

Our Board of Directors has fixed the record date for the Annual Meeting for April 23, 2021. Only stockholders of record at the close of business on that date may vote at the meeting or any adjournment or postponement thereof.

This year’s Annual Meeting will be held virtually through a live webcast. You will be able to attend the Annual Meeting, submit questions and vote during the live webcast by visiting www.proxydocs.com/KURA and entering the 12-digit Control Number included in your Notice of Internet Availability of Proxy Materials, proxy card or in the instructions that you received via email. Please refer to the additional logistical details and recommendations in the accompanying proxy statement. The webcast will start at 8:30 a.m. Pacific Time on Tuesday, June 22, 2021. We currently intend to resume holding in-person meetings under normal circumstances.

Your vote is extremely important regardless of the number of shares you own. Whether or not you expect to attend the virtual meeting, we urge you to cast your vote as soon as possible. You may vote your shares via the internet or via a toll-free telephone number by following the instructions on the Notice of Internet Availability of Proxy Materials. In addition, if you received paper copies of the proxy materials by mail, you can also vote by mail by following the instructions on the proxy card. Submitting a proxy card will not prevent you from attending the Annual Meeting and voting at the Annual Meeting, if you so desire. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain from the record holder a proxy issued in your name.

The Notice of 2021 Annual Meeting of Stockholders, Proxy Statement and 2020 Annual Report on Form 10-K are available at the following website: www.proxydocs.com/KURA.

By Order of the Board of Directors,

 

 

Troy E. Wilson, Ph.D., J.D.

President and Chief Executive Officer

April 29, 2021

12730 High Bluff Drive, Suite 400

San Diego, California 92130

 


 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

Questions and Answers About these Proxy Materials and Voting

 

1

Proposal 1 Election of Directors

 

6

Information Regarding the Board of Directors and Corporate Governance

 

10

Proposal 2 Ratification of Selection of Independent Registered Public Accounting Firm

 

18

Proposal 3 Advisory Vote on Executive Compensation

 

19

Executive Officers

 

20

Executive Compensation

 

21

Security Ownership of Certain Beneficial Owners and Management

 

42

Non-Employee Director Compensation

 

44

Certain Relationships and Related Party Transactions

 

46

Householding of Proxy Materials

 

48

Other Matters

 

48

 

 

 

 

 


 

KURA ONCOLOGY, INC.

PROXY STATEMENT

FOR THE 2021 ANNUAL MEETING OF STOCKHOLDERS

To be held on June 22, 2021

QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING

 

Why did I receive a notice regarding the availability of proxy materials on the internet?

We have sent you a Notice of Internet Availability of Proxy Materials (the “Notice”) because the Board of Directors (sometimes referred to as the “Board”) of Kura Oncology, Inc. (sometimes referred to as “we,” “us,” the “Company” or “Kura”) is soliciting your proxy to vote at the 2021 Annual Meeting of Stockholders, including at any adjournments or postponements of the meeting (the “Annual Meeting”). Pursuant to rules adopted by the Securities and Exchange Commission (the “SEC”), we have elected to provide access to our proxy materials over the internet. Accordingly, we have sent a Notice to our stockholders of record. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the internet or to request a printed copy may be found in the Notice.

We intend to mail the Notice on or about May 13, 2021 to all stockholders of record entitled to vote at the 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 May 23, 2021.

 

What is the format of the Annual Meeting?

 

In light of public health concerns regarding the COVID-19 pandemic, to protect the health and safety of our stockholders and employees and facilitate stockholder participation in the Annual Meeting, this year the Annual Meeting will be held through a live webcast at www.proxydocs.com/KURA. You will not be able to attend the meeting in person. We intend to resume holding in-person meetings under normal circumstances. A summary of the information you need to attend the Annual Meeting online is provided below:

 

Any stockholder may listen to the Annual Meeting and participate live via webcast at www.proxydocs.com/KURA. The webcast will begin at 8:30 a.m. Pacific Time on June 22, 2021.

 

Stockholders may vote and submit questions during the Annual Meeting via live webcast.

 

To enter the meeting, please have your control number which is available on your Notice, your proxy card or the instructions that accompanied your proxy materials. If you do not have your control number, you will be able to listen to the meeting only and you will not be able to vote or submit questions during the meeting.

 

Instructions on how to connect to and participate in the Annual Meeting via the internet, including how to demonstrate proof of stock ownership, are posted at www.proxydocs.com/KURA.

 

 

What do I need in order to be able to participate in the Annual Meeting online?

 

You will need the control number located in the gray box included on your Notice, your proxy card or the instructions that accompanied your proxy materials in order to be able to vote your shares or submit questions during the Annual Meeting. If you do not have your control number, you will be able to listen to the meeting only—you will not be able to vote or submit questions during the meeting. Instructions on how to connect and participate in the Annual Meeting via the internet, including how to demonstrate proof of stock ownership, are posted at www.proxydocs.com/KURA.

1.


Who can vote at the Annual Meeting?

Only stockholders of record at the close of business on April 23, 2021 will be entitled to vote at the Annual Meeting. On this record date, there were 66,273,680 shares of common stock outstanding and entitled to vote.

Stockholder of Record: Shares Registered in Your Name

If on April 23, 2021 your shares were registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC, then you are a stockholder of record. As a stockholder of record, you may vote at the Annual Meeting or vote by proxy. Whether or not you plan to attend the 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 internet as instructed below, to ensure your vote is counted.

Beneficial Owner: Shares Registered in the Name of a Broker or Bank

If on April 23, 2021 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” 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. 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. However, since you are not the stockholder of record, you may not vote your shares at the Annual Meeting unless you request and obtain a valid proxy from your broker or other agent.

What am I voting on?

There are three matters scheduled for a vote:

 

Election of the two nominees for Class I director named in this proxy statement to serve for three-year terms until the 2024 Annual Meeting of Stockholders (Proposal 1);

 

Ratification of the selection 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, 2021 (Proposal 2); and

 

The advisory approval of the compensation of our named executive officers, as disclosed in the proxy statement (Proposal 3).

What vote is required to approve each proposal and how are the votes counted?

Proposal 1: Election of Directors: Directors are elected by a plurality of the votes of the holders of shares present or represented by proxy and entitled to vote at the Annual Meeting – that is, the two nominees receiving the highest number of “For” votes will be elected. Abstentions and broker non-votes, if any, are not counted for purposes of electing directors and will have no effect on the results of this vote.

Proposal 2: Ratification of the Selection of Independent Registered Public Accounting Firm: The affirmative vote of a majority of shares present or represented by proxy and entitled to vote at the Annual Meeting is required to ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021. Abstentions will have the effect of votes against this proposal. Brokers generally have discretionary authority to vote on the ratification of the selection of our independent registered public accounting firm, thus we do not expect any broker non-votes on this proposal.

Proposal 3: Advisory Vote on Executive Compensation: The advisory approval of the compensation of our named executive officers will be considered to be approved if it receives “For” votes from the holders of a majority of shares present or represented by proxy and entitled to vote on the matter. We value the opinions expressed by our stockholders in this advisory vote, and the Compensation Committee of our Board of Directors, which is responsible for overseeing and administering our executive compensation programs, will consider the outcome of this vote when designing our compensation programs and making future compensation decisions for our named executive officers. Abstentions will have the effect of votes against this proposal and broker non-votes will have no effect on the results of this proposal.

2.


What if another matter is properly brought before the Annual Meeting?

The Board of Directors knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, it is the intention of the persons named in the proxy to vote on those matters in accordance with their best judgment.

How do I vote?

For the election of directors, you may either vote “For” the two nominees to the Board of Directors or you may “Withhold” your vote for any nominee you specify. For Proposals 2 and 3, you may vote “For” or “Against” or you may abstain from voting for the proposal. The procedures for voting are as follows:

Stockholder of Record: Shares Registered in Your Name

If you are a stockholder of record, you may vote at the Annual Meeting, vote by proxy over the telephone, vote by proxy through the internet, or vote by proxy using the proxy card that you may request or that we may elect to deliver at a later time. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the Annual Meeting and vote even if you have already voted by proxy.

 

To vote at the Annual Meeting, we are hosting a virtual stockholder meeting where you can view the meeting, submit questions and vote online at www.proxydocs.com/KURA. To access the live online meeting, you will need to register at www.proxydocs.com/KURA using the control number included on your Notice, your proxy card or the instructions that accompanied your proxy materials. If you do not have your control number and attend the meeting online, you will be able to listen to the meeting only – you will not be able to vote or submit questions during the meeting.

 

To vote over the telephone, dial toll-free 1-866-829-5219 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the company number and control number from the Notice or the proxy card that we may deliver. Your telephone vote must be received by 8:30 a.m. Pacific Time on June 22, 2021 to be counted.

 

To vote through the internet, go to www.proxypush.com/KURA to complete an electronic proxy card. You will be asked to provide the company number and control number from the Notice or the proxy card that we may deliver. Your internet vote must be received by 8:30 a.m. Pacific Time on June 22, 2021 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 return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct.

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 Kura. Simply follow the voting instructions in the Notice to ensure that your vote is counted. Alternatively, you may vote by telephone or over the internet as instructed by your broker, bank or other agent. To vote at the Annual Meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker, bank or other agent included with these proxy materials, or contact that organization to request a proxy form.

We provide internet proxy voting to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers and telephone companies.

3.


How many votes do I have?

On each matter to be voted upon, you have one vote for each share of common stock you own as of April 23, 2021.

What happens if I do not vote?

Stockholder of Record: Shares Registered in Your Name

If you are a stockholder of record and do not vote by completing a proxy card, by telephone, through the internet or at the Annual Meeting, your shares will not be voted.

Beneficial Owner: Shares Registered in the Name of Broker or Bank

If you are a beneficial owner of shares, your bank, broker or other agent, as the record holder of the shares, is required to vote those shares in accordance with your instructions. If no voting instructions are provided, these record holders can vote your shares only on discretionary, or routine, matters and not on non-discretionary, or non-routine, matters. Uninstructed shares which cannot be voted on non-routine matters result in what are commonly referred to as “broker-non-votes.” Proposal 2, to ratify the selection of our independent registered public accounting firm is a routine matter and the other proposals are non-routine matters. If you do not instruct your broker, bank, or other agent how to vote your shares, such bank, broker or agent (1) will be entitled to vote your shares on Proposal 2 to ratify the selection of our independent registered public accounting firm and (2) will not be entitled to vote your shares on the other proposals.

What if I return a proxy card or otherwise vote but do not make specific choices?

If you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, as applicable, “For” the election of all nominees for director named in this proxy statement, “For” the ratification of the selection 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, 2021, and “For” the approval of the compensation for our executive officers.

If any other matter is properly presented at the Annual Meeting, your proxy holder (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.

Who is paying for this proxy solicitation?

We will pay for the entire cost of soliciting proxies. In addition to these proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.

What does it mean if I receive more than one Notice?

If you receive more than one Notice, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions on the Notices to ensure that all 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 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.

 

You may send a timely written notice that you are revoking your proxy to our Secretary at 12730 High Bluff Drive, Suite 400, San Diego, CA 92130. To be timely, a written notice revoking your proxy must be received by 8:30 a.m. Pacific Time on June 22, 2021.

4.


 

You may attend the virtual Annual Meeting and vote at the meeting by following the instructions described above. Simply attending the Annual Meeting will not, by itself, revoke your proxy.

Your most current proxy card or telephone or internet proxy is the one that is counted.

Beneficial Owner: Shares Registered in the Name of Broker or Bank

If your shares are held by your broker, bank or other agent, you should follow the instructions provided by your broker, bank or other agent with respect to changing your vote.

When are stockholder proposals and director nominations due for the 2022 Annual Meeting of Stockholders?

To be considered for inclusion in next year’s proxy materials, your proposal must be submitted in writing by January 13, 2022, to the attention of our Secretary at 12730 High Bluff Drive, Suite 400, San Diego, CA 92130. If you wish to submit a proposal (including a director nomination) at the 2022 Annual Meeting of Stockholders that is not to be included in next year’s proxy materials, your written request must be received by our Secretary between February 22, 2022 and March 24, 2022, provided that, if our 2022 Annual Meeting of Stockholders is earlier than May 23, 2022 or later than July 22, 2022, your written request must be received by our Secretary not earlier than the close of business on the 120th day prior to such Annual Meeting and not later than the close of business on the later of the 90th day prior to such Annual Meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. You are also advised to review our Amended and Restated Bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations.

What are “broker non-votes”?

As discussed above, when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed to be “non-routine,” the broker or nominee cannot vote the shares. These un-voted shares are counted as “broker non-votes.”

As a reminder, 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 is the quorum requirement?

A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding a majority of the outstanding shares entitled to vote are present at the Annual Meeting or represented by proxy. On the record date, there were 66,273,680 shares outstanding and entitled to vote. Thus, the holders of at least 33,136,841 shares must be present or represented by proxy at the Annual Meeting to have a quorum.

Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote at the Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the holders of a majority of shares present at the Annual Meeting or represented by proxy may adjourn the Annual Meeting to another date.

How can I find out the results of the voting at the Annual Meeting?

Preliminary voting results will be announced at the Annual Meeting. In addition, final voting results will be published in a current report on Form 8-K that we expect to file within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Form 8-K within four business days after the 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.

 

5.


 

PROPOSAL 1

ELECTION OF DIRECTORS

Our Board of Directors is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors, and each class has a three-year term. Vacancies on the Board of Directors may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board of Directors to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified.

Our Board of Directors currently consists of seven members. There are two directors in Class I, whose term of office expires at the Annual Meeting: Troy E. Wilson, Ph.D., J.D. and Faheem Hasnain. Dr. Wilson and Mr. Hasnain have been nominated for re-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. Dr. Wilson and Mr. Hasnain, each current directors of the Company, were each recommended for nomination to the Board of Directors at the Annual Meeting by the Nominating and Corporate Governance Committee of the Board of Directors. If elected at the Annual Meeting, each of these nominees for director would serve for a three-year term until our 2024 Annual Meeting of Stockholders, and until his successor is duly elected and qualified, or until his earlier death, resignation or removal. It is our policy to invite directors and nominees for director to attend the Annual Meeting. All of our directors attended the 2020 Annual Meeting of Stockholders.

Directors are elected by a plurality of the votes of the holders of shares present or represented by proxy and entitled to vote at the Annual Meeting. Accordingly, the two 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 two 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 our Board of Directors. Each nominee has agreed to serve as a director if elected and we have no reason to believe that any 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 the Company’s business. The Nominating and Corporate Governance Committee and the Board of Directors also seek 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 recommend that person as a nominee. However, each of the members of the Nominating and Corporate Governance Committee may have a variety of reasons why he or she believes a particular person would be an appropriate nominee for the Board of Directors, and these views may differ from the views of other members.

Nominees for Election for a Three-year Term Expiring at the 2024 Annual Meeting

Troy E. Wilson, Ph.D., J.D., 52, has served as our President and Chief Executive Officer and as the chairman of our Board of Directors since March 2015. Dr. Wilson co-founded Kura Oncology in August 2014 and served as the President and Chief Executive Officer as well as a member of the Company’s Board of Directors from August 2014. Dr. Wilson served as President and Chief Executive Officer of Wellspring Biosciences, Inc., a privately-held biopharmaceutical company, and its parent company, Araxes Pharma LLC, or Araxes, from July 2012 to March 2019 and as President and Chief Executive Officer of Avidity Biosciences, Inc., a privately-held biopharmaceutical company, from November 2012 to February 2019. Dr. Wilson served as the President and Chief Executive Officer and a member of the Board of Directors of Intellikine, Inc., a privately-held biopharmaceutical company, from April 2007 to January 2012 and from August 2007 to January 2012, respectively, until its acquisition by Takeda Pharmaceutical Company Limited. He has also been Executive Chairman and a member of the Board of Directors of Abintus Bio, Inc., a privately-held biopharmaceutical company, since November 2020, a member of the Board of Directors of Puma Biotechnology, Inc., a publicly-held biopharmaceutical company, since October 2013, and Chairman and a member of the Board of Directors of Avidity Biosciences, Inc., a publicly-held biopharmaceutical company, since February 2019 and November 2012, respectively. Dr. Wilson holds a J.D. from New York University and graduated with a Ph.D. in bioorganic chemistry and a B.A. in biophysics from the University of California, Berkeley.

6.


The Nominating and Corporate Governance Committee and the Board of Directors believe that Dr. Wilson’s experience in building and operating biopharmaceutical companies, oncology drug discovery and development, strategic partnering, capital raising and investor relations in the pharmaceutical industry as well as his experience serving in executive roles and on other boards of directors qualify him to serve on our Board of Directors, including serving as our chairman.

Faheem Hasnain, 62, has served as a member of our Board of Directors since April 2015 and as our Lead Independent Director since March 2020. Mr. Hasnain has served as Chairman of the Board of Directors of Gossamer Bio, Inc., a publicly-held biopharmaceutical company, since January 2018 and as Chief Executive Officer since November 2020 and previously served as Chief Executive Officer from January 2018 to July 2018. He has also served as Chairman of the Board of Directors of Mirati Therapeutics, Inc., a publicly-held biotechnology company, since February 2019, and of Aspen Neuroscience, a privately-held biotechnology company, since April 2020. Previously, Mr. Hasnain was the President, Chief Executive Officer and on the Board of Directors of Receptos, Inc., a publicly-held biopharmaceutical company, from November 2010 until the company’s acquisition by Celgene Corporation in August 2015. Prior to that, Mr. Hasnain was the President and Chief Executive Officer and a director of Facet Biotech Corporation, a publicly-held biology driven antibody company with a focus in multiple sclerosis and oncology. He held that position from December 2008 until the company’s acquisition by Abbott Laboratories in April 2010. Previously, Mr. Hasnain was President, Chief Executive Officer and a director of PDL BioPharma, Inc., a publicly-held biopharmaceutical company, from October 2008 until Facet Biotech was spun off from PDL BioPharma in December 2008. From October 2004 to September 2008, Mr. Hasnain served at Biogen Inc., a publicly-held biotechnology company specializing in neurological disorders, autoimmune disorders and cancer, most recently as Executive Vice President in charge of the oncology/rheumatology strategic business unit. Prior to Biogen, Mr. Hasnain held roles with Bristol Myers Squibb Co., where he was President of the Oncology Therapeutics Network, and for 14 years at GlaxoSmithKline plc and its predecessor organizations. He was Chairman of the Board of Directors of Panacea Acquisition Corp., a newly incorporated special purpose acquisition company, from May 2020 through February 2021, Tocagen Inc., a publicly-held gene therapy company, from November 2014 through January 2020, and Vital Therapies, Inc., a publicly-held biotherapeutic company, from September 2017 through October 2019, and previously a director since August 2016. From October 2010 to November 2014, he served on the Board of Directors of Ambit Biosciences Corporation, a publicly-held biopharmaceutical company, and from November 2010 to November 2014, served as Chairman of the Board of Directors. He previously served as a member of the Board of Directors of Tercica, Inc. and Somaxon Pharmaceuticals, Inc. Mr. Hasnain received a B.H.K. and B.Ed. from the University of Windsor Ontario in Canada.

The Nominating and Corporate Governance Committee and the Board of Directors believe that Mr. Hasnain’s extensive experience as a member of senior management and boards of directors of multiple biopharmaceutical companies as well as his experience building and operating biopharmaceutical companies, development and commercialization of oncology products, strategic partnering and capital raising and investor relations in the biopharmaceutical industry qualify him to serve on our Board of Directors.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH NAMED NOMINEE.

Directors Continuing in Office Until the 2022 Annual Meeting

Robert E. Hoffman, 55, has served as a member of our Board of Directors since March 2015. Mr. Hoffman served as Chief Financial Officer and Senior Vice President of Heron Therapeutics, Inc., a publicly-held biotechnology company, from April 2017 to October 2020. Prior to joining Heron Therapeutics, Inc., Mr. Hoffman served as Executive Vice President and Chief Financial Officer of Innovus Pharmaceuticals, Inc., a publicly-held pharmaceutical company, from September 2016 to April 2017. Mr. Hoffman served as Chief Financial Officer of AnaptysBio, Inc., a publicly-held biotechnology company, from July 2015 to September 2016. Mr. Hoffman was the Senior Vice President, Finance and Chief Financial Officer of Arena Pharmaceuticals, Inc. (“Arena”), a publicly-held biopharmaceutical company, from June 2012 to July 2015, Vice President, Finance and Chief Financial Officer of Arena from August 2011 to June 2012 and previously from December 2005 to March 2011 and in a number of roles of increasing responsibility from 1997 to December 2005. From March 2011 to August 2011, Mr. Hoffman served as Chief Financial Officer for Polaris Group, a biopharmaceutical drug company. Mr. Hoffman serves as a member of the Financial Accounting Standards Board’s Small Business Advisory Committee and the steering committee of the Association of Bioscience Financial Officers. Mr. Hoffman is also a member and a former director and President of the San Diego Chapter of Financial Executives International. Mr. Hoffman has been a member of the Board of Directors of Antibe Therapeutics, Inc., a publicly-held pharmaceutical development company, since November 2020, Kintara Therapeutics, Inc. (formerly known as DelMar Pharmaceuticals, Inc.), a publicly-held biotechnology company, since April 2018, and ASLAN Pharmaceuticals, Inc, a publicly-held biotechnology company, since October 2018. Previously, Mr. Hoffman was a member of the Board of Directors of CombiMatrix Corporation, a publicly-held molecular

7.


diagnostics company, from 2013 to 2017, MabVax Therapeutics Holdings, Inc., a publicly-held biopharmaceutical company, from 2014 to 2017, and Aravive, Inc., a publicly-held biotechnology company, from October 2018 to April 2020. Mr. Hoffman holds a B.B.A. from St. Bonaventure University, and is licensed as a C.P.A. (inactive) in the State of California.

The Nominating and Corporate Governance Committee and the Board of Directors believe that Mr. Hoffman’s experience as a member of senior management and boards of directors of multiple biopharmaceutical companies as well as his experience in key accounting and finance functions including financial planning and analysis, budgeting, audit, operations and SEC reporting qualify him to serve on our Board of Directors.

Thomas Malley, 52, has served as a member of our Board of Directors since October 2015. Mr. Malley has served as President of Mossrock Capital, LLC, a privately-held investment firm, since May 2007. Mr. Malley worked for Janus Mutual Funds in positions of increasing responsibility from April 1991 to May 2007. From January 1999 to May 2007, Mr. Malley served as the portfolio manager of the Janus Global Life Sciences Fund and also led the Janus Healthcare team of analysts. From 1991 to 1998 Mr. Malley served as an equity analyst for Janus covering, among others, healthcare and biotechnology stocks. Mr. Malley has been a director of BeiGene, Ltd., a publicly-held biotechnology company, since January 2016 and has also been a director of Kiniksa Pharmaceuticals Corp., a publicly-held biotechnology company, since December 2016. Previously, he served as a director of OvaScience, Inc., a publicly-held life sciences company, from 2012 to 2017, Synageva BioPharma Corp., a publicly-held biopharmaceutical company, from 2006 to 2015, until its acquisition by Alexion Pharmaceuticals, Inc., Puma Biotechnology, Inc., a publicly-held biopharmaceutical company, from 2011 to 2015, and Cougar Biotechnology, Inc., a publicly-held biopharmaceutical company, from 2007 to 2009, until its acquisition by Johnson and Johnson. Mr. Malley holds a B.S. in Biology from Stanford University.

The Nominating and Corporate Governance Committee and the Board of Directors believe that Mr. Malley’s extensive experience as an equity analyst, portfolio manager and serving as a member of other boards of directors of publicly-traded companies in the biopharmaceutical industry qualify him to serve on our Board of Directors.

Directors Continuing in Office Until the 2023 Annual Meeting

Steven H. Stein, M.D., 54, has served as a member of our Board of Directors since January 2017. Dr. Stein has served as Executive Vice President and Chief Medical Officer of Incyte Corporation, a publicly-held biopharmaceutical company, since March 2015. Prior to that, from May 2011 to February 2015, Dr. Stein served as Senior Vice President, U.S. Clinical Development & Medical Affairs at Novartis Oncology U.S., a healthcare company. Dr. Stein worked at GlaxoSmithKline plc as Vice President, Global Oncology, Clinical Development and also as Head of Medicines Development for Hematology and Supportive Care. Dr. Stein earned his M.D. from the University of Witwatersrand in Johannesburg, South Africa.

The Nominating and Corporate Governance Committee and the Board of Directors believe that Dr. Stein’s extensive experience in research and development activities, the design and conduct of clinical trials, management of a global, clinical development organization, engagement with research analysts and public stockholders as well as the duties and responsibilities of being a member of an executive leadership team of a publicly-traded biopharmaceutical company qualify him to serve on our Board of Directors.

Mary T. Szela, 57, has served as a member of our Board of Directors since November 2018. Ms. Szela has served as Chief Executive Officer and President and a member of the Board of Directors of TriSalus Life Sciences (formerly Surefire Medical, Inc.), a privately-held medical device company, since January 2018. From January 2016 to November 2016, Ms. Szela served as Chief Executive Officer of Aegerion Pharmaceuticals, Inc., a publicly-held biopharmaceutical company, and served on its Board of Directors. In November 2016, Aegerion Pharmaceuticals, Inc. merged with QLT Inc. to form Novelion Therapeutics Inc., a publicly-held biopharmaceutical company, where, until November 2017, Ms. Szela served as Chief Executive Officer and as a member of its Board of Directors. Ms. Szela served as the Chief Executive Officer of Melinta Therapeutics, Inc. (“Melinta”), a publicly-held antibiotic development company, from April 2013 to August 2015. Ms. Szela has served on the Board of Directors of Coherus Biosciences, Inc., a publicly-traded biopharmaceutical company, since July 2014, Alimera Sciences, Inc., a publicly-traded drug development company, since June 2018, Senda Biosciences, Inc., a privately held therapeutic platform company, since October 2020, Omega Therapeutics, Inc., a privately-held development-stage biotechnology company, since 2019, and Prometheus Biosciences, Inc., a publicly-traded biopharmaceutical company, since February 2021. She also served on the Board of Directors of Melinta from January 2013 to August 2015, Receptos, Inc., a publicly-held biopharmaceutical company, from June 2014 to July 2015, and Novo Nordisk AS, a publicly-held global healthcare company, from March 2014 to March 2017. Previously, Ms. Szela joined Abbott Laboratories (“Abbott”) in 1987 and held several leadership positions, including Senior Vice President of Global Strategic

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Marketing from January 2010 to May 2012 and Senior Vice President of U.S. pharmaceuticals from September 2008 to December 2009. Prior to Abbott, Ms. Szela worked for the University of Illinois Hospital. Ms. Szela earned a B.S. in Nursing and an M.B.A. from the University of Illinois.

The Nominating and Corporate Governance Committee and the Board of Directors believe that Ms. Szela’s extensive experience as a member of senior management and boards of directors of multiple biopharmaceutical companies as well as her expertise in pharmaceutical company operations, development and commercial strategy, strategic partnering and commercial operations qualifies her to serve on our Board of Directors.

Diane Parks, 68, has served as a member of our Board of Directors since October 2019. From February 2016 to July 2018, Ms. Parks served as Senior Vice President, Head of U.S. Commercial for Kite Pharma, Inc., a publicly-held biopharmaceutical company, which was acquired by Gilead Sciences, Inc., where she developed and executed the strategic plan for the commercial launch of Yescarta®, the first CAR-T therapy approved for large B-cell lymphoma. From October 2014 to October 2015, Ms. Parks served as Vice President, Head of Global Marketing for Pharmacyclics, Inc., a publicly-held biopharmaceutical company, which was acquired by AbbVie, Inc., where she was responsible for the marketing strategy and launch of Imbruvica®. From 2007 to 2014, she served as Vice President, Sales for Amgen, Inc., a publicly-held biotechnology company, where she successfully led the hospital and nephrology sales teams. From 1999 to 2002, she served as Senior Vice President, Specialty Biotherapeutics and Managed Care for Genentech, Inc., a publicly-held biotechnology company, which was acquired by F. Hoffmann-La Roche AG. She currently serves on the boards of Calliditas Therapeutics AB, a publicly-held biopharmaceutical company, Soligenix, Inc., a publicly-held biopharmaceutical company, and TriSalus Life Sciences (formerly Surefire Medical, Inc.), a privately-held medical device company. Ms. Parks earned an M.B.A. from Georgia State University and a B.S. from Kansas State University.

The Nominating and Corporate Governance Committee and the Board of Directors believe that Ms. Parks’ extensive experience as a member of senior management and boards of directors of multiple biopharmaceutical companies as well as her expertise in leading the overall strategy, organization and operations for oncology product commercial launches qualifies her to serve on our Board of Directors.

 

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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”) listing standards, a majority of the members of a listed company’s Board of Directors must qualify as “independent,” as affirmatively determined by the Board of Directors of such company. Our Board of Directors consults with our counsel to ensure that the Board of Directors’ determinations are consistent with relevant securities and other laws and regulations regarding the definition of “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 her family members, and our company, our senior management and our independent auditors, the Board of Directors has affirmatively determined that all of our directors, other than Dr. Wilson, are independent within the meaning of the applicable Nasdaq listing standards. In making this determination, the Board of Directors found that none of these directors had a material or other disqualifying relationship with our company.

Board Leadership Structure

Our Board of Directors has a Chairman of the Board of Directors, Dr. Wilson, who has authority to, among other things, call and preside over meetings of the Board of Directors, set meeting agendas, and determine materials to be distributed to the Board of Directors. Accordingly, the Chairman has substantial ability to shape the work of the Board of Directors. In addition, we have a separate chair for each committee of the Board of Directors. The chairs of each committee are expected to report at least annually to the Board of Directors on the activities of their committee in fulfilling their responsibilities as detailed in their respective charters or specify any shortcomings should that be the case. We have chosen to combine the Chief Executive Officer and Chairman of the Board of Directors positions. We believe that this Board of Directors leadership structure is the most appropriate for us. Because we are a small company, it is more efficient to have the leadership of the Board of Directors in the same hands as the Chief Executive Officer. The challenges faced by us at this stage are most efficiently dealt with by one person who is familiar with both the operational aspects as well as the strategic aspects of our business.

Our Board of Directors also believes that strong, independent Board leadership is a critical component of effective corporate governance and, therefore, the Board of Directors has established the position of Lead Independent Director, adopted a Lead Independent Director Charter and appointed Mr. Hasnain to serve as our Lead Independent Director.

The Lead Independent Director is elected annually by a majority of the independent directors upon receiving a recommendation from the Nominating and Corporate Governance Committee. The Lead Independent Director’s responsibilities are set forth in the Lead Independent Director Charter include:

 

 

presiding at all meetings of the Board of Directors at which the Chairman is not present;

 

ensuring that independent directors have adequate opportunities to meet and discuss issues in session of the independent directors without management of the Company present, and serving as chair of such meetings;

 

serving as principal liaison between the independent directors and the Chief Executive Officer and between the independent directors and senior management of the Company;

 

communicating to management of the Company, as appropriate, the results of meeting sessions among independent directors;

 

responding directly to stockholder questions that are directed the Lead Independent Director or the independent directors as a group;

 

in conjunction with the Chairman, ensuring that resources and expertise are available to the Board of Directors so that it may function effectively and efficiently (including the retention of any outside advisors) and ensuring that any outside advisors retained by the Board of Directors are appropriately qualified and independent in accordance with applicable law;

 

in consultation with the Nominating and Corporate Governance Committee, review and report on the results of Board of Directors and Committee performance self-evaluations and solicit feedback from members of the Board of Directors individually or collectively and facilitate Board of Directors discussions regarding Board of Directors effectiveness and composition; and

 

performing such other duties as the Board of Directors may from time to time direct.

 

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Our Lead Independent Director Charter can be found on our website at www.kuraoncology.com. The independent directors regularly meet in executive sessions in connection with regular meetings of the Board of Directors.

Stockholder Communications with the Board of Directors

Our Board of Directors has adopted a formal process by which stockholders may communicate with the Board of Directors or any of its directors. Stockholders who wish to communicate with the Board of Directors may do so by sending written communications addressed to the Secretary of Kura Oncology, Inc., 12730 High Bluff Drive, Suite 400, San Diego, CA 92130. Each communication must set forth: the name and address of the stockholder on whose behalf the communication is sent and the number of our shares that are owned beneficially by such stockholder as of the date of the communication. Each communication will be reviewed by our Secretary to determine whether it is appropriate for presentation to the Board of Directors or such director. Communications determined by our Secretary to be appropriate for presentation to the Board of Directors or such director will be submitted to the Board of Directors or such director on a periodic basis.

Code of Ethics

We have adopted a 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.kuraoncology.com. If we make any substantive amendments to the Code of Business Conduct and Ethics or grant any waiver from a provision of the Code of Business Conduct and Ethics to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website.

Role of the Board of Directors in Risk Oversight

Our Audit Committee is primarily responsible for overseeing our risk management processes on behalf of the full Board of Directors. The Audit Committee receives reports from management at least annually regarding our assessment of risks. In addition, the Audit Committee reports regularly to the full Board of Directors, which also considers our risk profile. The Audit Committee and the full Board of Directors focus on the most significant risks we face and our general risk management strategies. While the Board of Directors oversees our risk management, company management is responsible for day-to-day risk management processes. Our Board of Directors expects company management to consider risk and risk management in each business decision, to proactively develop and monitor risk management strategies and processes for day-to-day activities and to effectively implement risk management strategies adopted by the Audit Committee and the Board of Directors. We believe this division of responsibilities is the most effective approach for addressing the risks we face and that our Board of Directors leadership structure, which also emphasizes the independence of the Board of Directors in its oversight of our business and affairs, supports this approach.

Meetings of the Board of Directors

The Board of Directors held six meetings and acted by unanimous written consent without a meeting seven times during 2020. Each Board member attended 75% or more of the aggregate number of meetings of the Board of Directors and of the committees on which he or she served, held during the portion of the last fiscal year for which he or she was a director or committee member, respectively.

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Information Regarding Committees of the Board of Directors

The Board of Directors has three standing committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. The following table provides membership and meeting information for fiscal year 2020 for each of the committees of the Board of Directors:

 

Name

 

Audit

Committee

 

Compensation

Committee

 

Nominating and

Corporate Governance

Committee

Faheem HasnainI

 

X

 

 

X

(1)

 

 

Robert E. Hoffman**

 

X

*

 

X

(2)

 

X

 

Thomas Malley

 

X

 

 

 

 

X

*

Diane Parks

 

 

 

X

(3)

 

X

(3)

Steven H. Stein, M.D.

 

 

 

X

 

 

X

 

Mary T. Szela

 

X

(4)

 

X

*(4)

 

 

Total meetings in 2020

 

4

 

 

6

 

 

4

 

 

I

Lead Independent Director (as of March 2020)

*

Committee Chairperson

**

Financial Expert

(1)

Mr. Hasnain served as chair of the Compensation Committee until June 2020 and remains on the Compensation Committee as a member.

(2)

Mr. Hoffman was a member of the Compensation Committee until June 2020.

(3)

Ms. Parks became a member of the Compensation Committee and the Nominating and Corporate Governance Committee in June 2020.

(4)

Ms. Szela became a member of the Audit Committee and began serving as Chair of the Compensation Committee in June 2020.

 

Each of the committees has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities. The Board of Directors has determined that each member of each committee meets the applicable Nasdaq rules and regulations regarding “independence” and that each member is free of any relationship that would impair his or her individual exercise of independent judgment with regard to us.

Below is a description of each committee of the Board of Directors.

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 our financial statements. For this purpose, the Audit Committee performs several functions which include, among other things:

 

evaluating the performance, independence and qualifications of our independent auditors and determining whether to retain our existing independent auditors or engage new independent auditors;

 

reviewing and approving the engagement of our independent auditors to perform audit services and any permissible non-audit services;

 

monitoring the rotation of partners of our independent auditors on our engagement team as required by law;

 

prior to engagement of any independent auditor, and at least annually thereafter, reviewing relationships that may reasonably be thought to bear on their independence, and assessing and otherwise taking the appropriate action to oversee the independence of our independent auditor;

 

reviewing our annual and quarterly financial statements and reports, including the disclosures contained under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and discussing the statements and reports with our independent auditors and management;

 

reviewing, with our independent auditors and management, significant issues that arise regarding accounting principles and financial statement presentation and matters concerning the scope, adequacy and effectiveness of our financial controls;

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reviewing with management and our independent auditors any earnings announcements and other public announcements regarding material developments;

 

procedures, as required under applicable law, for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters;

 

preparing the report that the SEC requires in our annual proxy statement;

 

reviewing and providing oversight of any related-party transactions in accordance with our related-party transaction policy and reviewing and monitoring compliance with legal and regulatory responsibilities, including our code of business conduct and ethics;

 

reviewing our major financial, strategic, operational, regulatory and other business-related risk exposures and management risks relating to data privacy, technology and information security (including cyber security and backup information systems), including the guidelines and policies to govern the process by which risk assessment and risk management are implemented;

 

reviewing on a periodic basis and approving changes to our investment policy, related-person transaction policy and signing authority policy; and

 

reviewing and evaluating on an annual basis the performance of the Audit Committee and the Audit Committee charter.

The current members of the Audit Committee are Messrs. Hoffman, Hasnain and Malley and Ms. Szela. Mr. Hoffman serves as the chair of our Audit Committee. The Audit Committee met four times and acted by unanimous written consent without a meeting one time during 2020. Our Board of Directors has determined that each member of the Audit Committee is an independent director under Rule 5605(c)(2)(A)(i) and (ii) of the Nasdaq listing standards and under Rule 10A-3 under the Exchange Act. Each member of our Audit Committee can read and understand fundamental financial statements in accordance with Nasdaq audit committee requirements. In arriving at this determination, the Board of Directors has examined each Audit Committee member’s scope of experience and the nature of their employment in the corporate finance sector.

Our Board of Directors has determined that Mr. Hoffman qualifies as an Audit Committee financial expert within the meaning of SEC regulations and meets the financial sophistication requirements of the Nasdaq Listing Rules. In making this determination, our Board of Directors has considered Mr. Hoffman’s formal education and the nature and scope of his experience with public companies. Both our independent registered public accounting firm and management periodically meet privately with our Audit Committee.

The Audit Committee charter can be found on our website at www.kuraoncology.com in the Corporate Governance section.

Report of the Audit Committee of the Board of Directors

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 Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

The Audit Committee has reviewed and discussed the audited financial statements for the fiscal year ended December 31, 2020 with management of the Company. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board (“PCAOB”). 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 registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm the accounting firm’s independence. Based on the foregoing, the Audit Committee has recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

 

Audit Committee

Robert E. Hoffman, Chair

Faheem Hasnain

Thomas Malley

Mary T. Szela

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Compensation Committee

Our Compensation Committee consists of Mss. Parks and Szela, Mr. Hasnain and Dr. Stein. Ms. Szela serves as the chair of our Compensation Committee. Our Board of Directors has determined that each of the members of our Compensation Committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act, and satisfies the Nasdaq independence requirements. The Compensation Committee met six times and acted by unanimous written consent without a meeting once during 2020. The Compensation Committee has a charter that is reviewed and updated annually, or as may be warranted from time to time. The functions of the Compensation Committee include, among other things:

 

reviewing, modifying and approving (or if it deems appropriate, making recommendations to the full Board of Directors regarding) our overall compensation strategy and policies;

 

reviewing and making recommendations to the full Board of Directors regarding the compensation and other terms of employment of our Chief Executive Officer and reviewing, determining and approving (or if it deems it appropriate, making recommendations to the full Board of Directors regarding) the compensation and other terms of employment of our other executive officers;

 

reviewing and making recommendations to the full Board of Directors regarding performance goals and objectives relevant to the compensation of our executive officers and assessing their performance against these goals and objectives;

 

reviewing and approving (or if it deems it appropriate, making recommendations to the full Board of Directors regarding) the equity incentive plans, compensation plans and similar programs advisable for us, as well as modifying, amending or terminating existing plans and programs;

 

evaluating risks associated with our compensation policies and practices and assessing whether risks arising from our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on us;

 

reviewing and making recommendations to the full Board of Directors regarding the type and amount of compensation to be paid or awarded to our non-employee board members;

 

establishing policies with respect to votes by our stockholders to approve executive compensation to the extent required by Section 14A of the Exchange Act and, if applicable, determining our recommendations regarding the frequency of advisory votes on executive compensation;

 

reviewing and assessing the independence of compensation consultants, legal counsel and other advisors as required by Section 10C of the Exchange Act;

 

administering our equity incentive plans;

 

establishing policies with respect to equity compensation arrangements;

 

reviewing the competitiveness of our executive compensation programs and evaluating the effectiveness of our compensation policy and strategy in achieving expected benefits to us;

 

reviewing and approving (or if it deems appropriate making recommendations to the full Board of Directors regarding) the terms of any employment agreements, severance arrangements, change in control protections and any other compensatory arrangements for our executive officers (other than our Chief Executive Officer);

 

reviewing with management and approving our disclosures under the caption “Compensation Discussion and Analysis” in our periodic reports or proxy statements to be filed with the SEC, to the extent such caption is included in any such report or proxy statement;

 

reviewing and considering the results of any advisory vote on executive compensation, as applicable;

 

preparing the report on executive compensation that the SEC requires in our annual proxy statement (if any); and

 

reviewing and evaluating on an annual basis the performance of the Compensation Committee and the Compensation Committee charter.

Typically, we will plan for the Compensation Committee to meet 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. 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

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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 his compensation or individual performance objectives. The charter of the Compensation Committee grants the Compensation Committee full access to all our books, records, facilities and personnel. In addition, under the charter, the Compensation Committee has the authority to obtain, at our expense, advice and assistance from 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 advisers engaged for the purpose of advising the Compensation Committee. In particular, the Compensation Committee has the authority, in its sole discretion, to retain compensation consultants to assist in its evaluation of executive and director compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. Under its 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’s independence; however, there is no requirement that any adviser be independent.

The Compensation Committee or the Board of Directors upon recommendation from the Compensation Committee, makes the significant adjustments to annual compensation, determines bonus and equity awards and establishes new performance objectives at one or more meetings held during the first quarter of the year. Generally, the Compensation Committee’s process comprises two related elements: the determination of compensation levels and the establishment of performance objectives for the current year. For executives other than the Chief Executive Officer, the Compensation Committee solicits and considers evaluations and recommendations submitted to the Compensation Committee by the Chief Executive Officer. In the case of the Chief Executive Officer, the evaluation of his performance is conducted by the Board of Directors upon recommendation from the Compensation Committee, which determines any adjustments to his compensation as well as awards to be granted. For all executives, as part of its deliberations, the Compensation Committee may review and consider, as appropriate, materials such as financial reports and projections, operational data, tax and accounting information, tally sheets that set forth the total compensation that may become payable to executives in various hypothetical scenarios, executive and director stock ownership information, company stock performance data, analyses of historical executive compensation levels and current Company-wide compensation levels and recommendations of the Compensation Committee’s compensation consultant, including analyses of executive compensation paid at other companies identified by the consultant.

Our Compensation Committee enlists the services of a third-party company to conduct an analysis of our compensation practices compared with current market practices. Our Compensation Committee engaged the services of Radford to review our peer group and conduct a review and analysis of our executive compensation compared with current market practices, to be used for setting 2020 executive compensation levels. The 2020 peer group was chosen based on several characteristics including: comparable stage in key product and corporate development and similar growth and performance potential. Radford reports directly to the Chair of the Compensation Committee. After considering all of the factors required by applicable Nasdaq rules, the Compensation Committee determined that Radford is independent.

The Compensation Committee charter can be found on our website at www.kuraoncology.com in the Corporate Governance section.

Compensation Committee Interlocks and Insider Participation

As noted above, our Compensation Committee consists of Mss. Parks and Szela, Mr. Hasnain and Dr. Stein. None of the members of our Compensation Committee during 2020 has at any time been our officer or employee. None of the members of our Compensation Committee during 2020 had a relationship that must be described under the SEC rules relating to disclosure of related person transactions. None of our executive officers serve, or in the past fiscal year has served, as a member of the board of directors or the compensation committee of any entity that has one or more of its executive officers serving on our Board of Directors or Compensation Committee.

15.


Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee of the Board of Directors is responsible for:

 

identifying, reviewing and evaluating candidates to serve on our Board of Directors;

 

determining the minimum qualifications for service on our Board of Directors;

 

evaluating director performance on the board and applicable committees of the board and determining whether continued service on our board is appropriate;

 

evaluating, nominating and recommending individuals for membership on our Board of Directors;

 

evaluating nominations by stockholders of candidates for election to our Board of Directors;

 

considering and assessing the independence of members of our Board of Directors;

 

developing a set of corporate governance policies and principles and recommending to our Board of Directors any changes to such policies and principles;

 

considering questions of possible conflicts of interest of directors as such questions arise; and

 

reviewing and evaluating on an annual basis the performance of the Nominating and Corporate Governance Committee and the Nominating and Corporate Governance Committee charter.

The current members of the Nominating and Corporate Governance Committee are Messrs. Malley and Hoffman, Dr. Stein and Ms. Parks. Mr. Malley serves as the chair of our Nominating and Corporate Governance Committee. Our Board of Directors has determined that each member of the Nominating and Corporate Governance Committee is independent under Rule 5605(a)(2) of the Nasdaq listing standards. The Nominating and Corporate Governance Committee met four times during 2020.

The Nominating and Corporate Governance Committee believes that the candidates for director, both individually and collectively, have the integrity, experience, judgment, commitment (including having sufficient time to devote to us and level of participation), skills, diversity and expertise appropriate for us. In assessing the directors, both individually and collectively, the Nominating and Corporate Governance Committee considers our current needs and the needs of the Board of Directors, to maintain a balance of knowledge, experience, capability, race, gender, geography, thought, viewpoints, backgrounds, skills, and expertise. However, the Nominating and Corporate Governance Committee retains the right to modify these qualifications from time to time. Candidates for director nominees are reviewed in the context of the current composition of the Board of Directors, our operating requirements and the long-term interests of stockholders. In conducting this assessment, the Nominating and Corporate Governance Committee considers diversity (including with respect to race, gender, geography, thought, viewpoints, and backgrounds), age, skills and such other factors as it deems appropriate given our current needs and the needs of the Board of Directors, 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. 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. The Nominating and Corporate Governance Committee then uses its network of contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm. Any search firm retained to assist the Nominating and Corporate Governance Committee in seeking candidates for the Board of Directors will be instructed to seek to include diverse candidates in terms of race, gender, geography, thought, viewpoints, backgrounds, skills, experience, and expertise from, among other areas, professional and academic areas relevant to the Company’s area of focus. In addition, 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 of Directors. The Nominating and Corporate Governance Committee meets to discuss and consider the candidates’ qualifications and then selects a nominee for recommendation to the Board of Directors by majority vote.

16.


The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate was recommended by a stockholder. Stockholders who wish to recommend individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the Board of Directors may do so by delivering a written recommendation to the Nominating and Corporate Governance Committee at the following address: 12730 High Bluff Drive, Suite 400, San Diego, CA 92130, Attn: Secretary, no later than the 90th day and no earlier than the 120th day prior to the one year anniversary of the preceding year’s Annual Meeting. Submissions must include, among other things, (1) the name and address of the stockholder on whose behalf the submission is made; (2) number of our shares that are owned beneficially by such stockholder as of the date of the submission; (3) the full name of the proposed candidate; (4) description of the proposed candidate’s business experience for at least the previous five years; (5) complete biographical information for the proposed candidate; (6) a description of the proposed candidate’s qualifications as a director and (7) any other information required by our Amended and Restated Bylaws. We may require any proposed nominee to furnish such other information as we may reasonably require to determine the eligibility of such proposed nominee to serve as our independent director or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such proposed nominee.

The Nominating and Corporate Governance Committee charter can be found on our website at www.kuraoncology.com in the Corporate Governance section.

Directors Skills and Qualifications

The Nominating and Corporate Governance Committee believes that the seven members of the Board of Directors have the skills, experience, diversity and character to execute the Board’s responsibilities. The following is a summary of those qualifications:

 

Attributes, Experience and Skills

 

Faheem

Hasnain

 

Robert E.

Hoffman

 

Thomas

Malley

 

Diane

Parks

 

Steven H.

Stein, M.D.

 

Mary T.

Szela

 

Troy E.

Wilson,

Ph.D., J.D.

General Management

 

X

 

X

 

X

 

X

 

X

 

X

 

X

Financial

 

X

 

X

 

X

 

 

 

 

 

X

 

X

Mergers & Acquisitions

 

X

 

X

 

X

 

 

 

 

 

X

 

X

Scientific Research

 

X

 

 

 

 

 

 

 

X

 

X

 

X

Drug Development

 

X

 

X

 

 

 

X

 

X

 

X

 

X

Drug Commercialization

 

X

 

X

 

 

 

X

 

X

 

X

 

X

Operations

 

X

 

X

 

 

 

X

 

X

 

X

 

X

Other Public Company Board Service

 

X

 

X

 

X

 

X

 

X

 

X

 

X

 

17.


 

PROPOSAL 2

RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has selected Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021 and has further directed that management submit the selection of independent registered public accounting firm for ratification by the stockholders at the Annual Meeting.

Representatives of Ernst & Young LLP are expected to be present at the 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 Amended and Restated Bylaws nor other governing documents or law require stockholder ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm. However, the Audit Committee is submitting the selection of Ernst & Young LLP to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of different independent auditors 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 at the Annual Meeting or represented by proxy and entitled to vote at the Annual Meeting will be required to ratify the selection of Ernst & Young LLP. Abstentions will be counted toward the tabulation of votes on proposals presented to the stockholders and will have the same effect as negative votes. Broker non-votes (if any) are counted towards a quorum, but are not counted for any purpose in determining whether this matter has been approved.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL 2.

Principal Accountant Fees and Services

The following table shows the aggregate fees for services provided for the fiscal years ended December 31, 2020 and 2019, by Ernst & Young LLP, our independent registered public accounting firm for those periods. All fees described below were pre-approved by the Audit Committee.

 

 

 

Fiscal Year Ended

 

 

 

December 31,

 

 

 

2020

 

 

2019

 

Audit Fees(1)

 

$

837,353

 

 

$

795,752

 

Audit-Related Fees

 

 

 

 

 

 

Tax Fees

 

 

 

 

 

 

All Other Fees(2)

 

 

1,070

 

 

 

1,605

 

Total Fees

 

$

838,423

 

 

$

797,357

 

 

(1)

Audit fees consist of fees for professional services performed by Ernst & Young LLP for audit and quarterly review of our financial statements and services in connection with our periodic and current SEC filings and registration statements, as well as services that are normally provided in connection with statutory and regulatory filings or engagements.

(2)

All other fees consist of annual licensing fees for an accounting database subscription.

In connection with the audit of the 2020 financial statements, we entered into an engagement agreement with Ernst & Young LLP, which sets forth the terms under which Ernst & Young LLP performed audit services for us.

Pre-Approval Policies and Procedures

The Audit Committee must pre-approve the audit and non-audit services rendered by our independent registered public accounting firm. The Audit Committee has adopted a policy and procedures for the pre-approval of such audit and non-audit services. The policy generally pre-approves specified services in the defined categories of audit services, audit-related services and tax services up to specified amounts. Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent auditor or on an individual, explicit, case-by-case basis before the independent auditor is engaged to provide such service. The pre-approval authority may be delegated to one or more of the Audit Committee’s members, but any pre-approval decisions must be reported to the full Audit Committee at its next scheduled meeting. Pursuant to the policy, the Audit Committee has delegated pre-approval authority to its Chair.

The Audit Committee has determined that the rendering of services other than audit services by Ernst & Young LLP is compatible with maintaining the principal accountant’s independence.

18.


PROPOSAL 3

ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and Section 14A of the Exchange Act, our stockholders are entitled to vote to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with SEC rules, commonly referred to as a “say-on-pay vote”.

At the 2020 Annual Meeting of Stockholders, our stockholders indicated their preference that we solicit say-on-pay vote every year.  Our Board of Directors has adopted a policy that is consistent with that preference. In accordance with that policy, this year, we are again asking our stockholders to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with SEC rules.  

This proposal gives our stockholders the opportunity to express their views on our named executive officers’ compensation as a whole. This vote is not intended to address any specific item of compensation or any specific named executive officer, but rather the overall compensation of all of our named executive officers and the philosophy, policies and practices described in this proxy statement. The compensation of our named executive officers subject to the vote is disclosed in the Compensation Discussion and Analysis, the compensation tables, and the related narrative disclosure contained in this proxy statement. As discussed in those disclosures, we believe that our compensation policies and decisions are based on principles that reflect a “pay-for-performance” philosophy and are strongly aligned with our stockholders’ interests and consistent with current market practices. Compensation of our named executive officers is designed to enable us to attract and retain talented and experienced executives to lead us successfully in a competitive environment.

Accordingly, our Board of Directors is asking our stockholders to indicate their support for the compensation of our named executive officers, as described in this proxy statement, by casting a non-binding advisory vote “FOR” the following resolution:

“RESOLVED, that the stockholders of Kura Oncology, Inc. (the “Company”) approve, on an advisory basis, the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Securities and Exchange Commission Regulation S-K, including the Compensation Discussion and Analysis, the compensation tables, narrative disclosures, and other related disclosure.”

Vote Required

Advisory approval of this Proposal 3 requires the vote of the holders a majority of the shares present at the Annual Meeting or represented by proxy and entitled to vote thereon.

Because the vote is advisory, it is not binding on us, our Compensation Committee or our Board of Directors. Nevertheless, the views expressed by the stockholders, whether through this vote or otherwise, are important to management and our Board of Directors and, accordingly, the Board of Directors and the Compensation Committee intend to consider the results of this vote in making determinations in the future regarding executive compensation arrangements.

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS.

 


19.


 

EXECUTIVE OFFICERS

The following table sets forth information regarding our executive officers as of March 31, 2021.

 

Name

 

Age

 

Position(s)

Troy E. Wilson, Ph.D., J.D.

 

52

 

Chairman, President and Chief Executive Officer

Marc Grasso, M.D.

 

48

 

Chief Financial Officer and Chief Business Officer

Kathleen Ford

 

74

 

Chief Operating Officer

James Basta, J.D.

 

55

 

Chief Legal Officer and Secretary

Kirsten Flowers

 

46

 

Chief Commercial Officer

Stephen Dale, M.D.

 

49

 

Chief Medical Officer

 

The following is biographical information for our executive officers other than Dr. Wilson, whose biographical information is included under Proposal 1.

Marc Grasso, M.D. has served as our Chief Financial Officer and Chief Business Officer since August 2018. Prior to joining us, he served as Managing Director at Stifel Financial Corp., an investment bank and financial services company, from March 2013 to July 2018, where he was responsible for building and managing Stifel’s west coast life sciences and biotechnology investment banking business. From June 2010 to February 2013, Dr. Grasso was Managing Director of Investment Banking in the Global Healthcare Group at UBS Group AG, focused on the biotechnology sector, and from May 2008 to June 2010 he was Managing Director of Investment Banking at Leerink Swann LLC (“Leerink”), a specialist investment bank focused on the healthcare sector, where he was instrumental in the west coast expansion of their franchise. Dr. Grasso joined Leerink from Morgan Stanley, where he served as an Executive Director of Investment Banking in the Global Healthcare Group. Prior to joining Morgan Stanley, he was Vice President of Investment Banking in the Global Healthcare Group of Credit Suisse First Boston. He began his career in investment banking at Deutsche Banc Alex. Brown Inc. Dr. Grasso received his M.D. from The Johns Hopkins University School of Medicine, where he also performed research in molecular oncology. He obtained an A.B. in molecular biology with honors from Princeton University.

Kathleen Ford has served as our Chief Operating Officer since August 2019, and previously served as a consultant to us from January 2019 to August 2019. Prior to joining us, from 2012 to May 2017, she served as Senior Vice President, Head of Global Clinical Operations, at Merck Serono, a division of Merck KGaA, where she led clinical and development operations toward successful drug registrations in both the United States and Europe. From 2002 to 2009, she served in roles of increasing responsibility at Millennium Pharmaceuticals, Inc., a privately-held pharmaceutical company, most recently as Vice President, Clinical Operations, where she led the global operational management of clinical trial activities in all phases of development. From 1993 to 2002, she served as Director of Clinical Operations at Alkermes plc, a publicly-held biopharmaceutical company, where she managed the clinical development for two product approvals. Ms. Ford earned her R.N. from Massachusetts General Hospital School of Nursing and her B.S.N. from Fitchburg State College.

James Basta, J.D. has served as our Chief Legal Officer and Secretary since November 2019. Prior to joining us, from 2006 to November 2019, he served in roles of increasing responsibility at Biogen, Inc., a publicly-held biopharmaceutical company, most recently as Senior Vice President, Chief Corporation Counsel, where he managed the legal representation for Biogen’s securities filings, board of directors, business development, finance and tax, corporate affairs, employment and information technology. Prior to joining Biogen in 2006, he was Partner at Baker & McKenzie LLP. Mr. Basta earned his J.D. from Northwestern University School of Law and his B.A. in Economics from Northwestern University.

Kirsten Flowers has served as our Chief Commercial Officer since January 2020. Prior to joining us, from August 2017 to October 2019, she served first as VP of Marketing and then as Senior Vice President, Commercial Operations, at Array BioPharma, Inc., a publicly-held biopharmaceutical company, where she built and led the commercial organization that delivered the successful launch of Braftovi® + Mektovi® for patients with BRAF-mutant melanoma in the United States. From 2004 to July 2016, she held various commercial leadership roles at Pfizer, Inc., a publicly-held biopharmaceutical company, including serving as the U.S. commercial lead for the launch of the drug IBRANCE® in breast cancer and for the launch of INLYTA® in renal cell carcinoma. From 1997 to 2002, she worked in the pharmaceutical division of Procter & Gamble, a publicly-held consumer product company. Ms. Flowers earned her M.B.A. from Harvard Business School and her B.S. in Molecular & Cellular Biology and Psychology from the University of Arizona.

Stephen Dale, M.D.  has served as our Chief Medical Officer since August 2020.  Prior to joining us, Dr. Dale served as Senior Vice President, Global Head of Medical Sciences for Kyowa Kirin Co., Ltd., a publicly-traded drug development and manufacturing company, from December 2018 to August 2020 and as Vice President, Head of Medical Science R&D from October 2015 to December 2018. Previously, he served in roles of increasing responsibility at AstraZeneca PLC, a publicly-traded drug development and manufacturing company, from July 2006 to September 2015, most recently as Global Clinical VP & Clinical Head of Oncology, where he oversaw the development of Tagrisso® (osimertinib) for metastatic EGFR-T790M mutation-positive non-small cell lung cancer (“NSCLC”). He also worked with the Iressa® (gefitinib) team on the IPASS study in patients with EGFR activating mutations, which evoked a paradigm shift in the way NSCLC is treated. Dr. Dale earned his M.D. from the University of Manchester Medical School and his Masters of Science in Clinical Pharmacology & Pharmaceutical Medicine Modules from the University of Surrey.

20.


Executive Compensation

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (“CD&A”) provides an overview of our business performance in 2020 and highlights the material components of our executive compensation program during 2020, which is the subject of the advisory vote on the compensation of our named executive officers included as Proposal 3 in this proxy statement.

This CD&A is intended to be read in conjunction with the tables following this section which provide further historical information for the current and former executives identified below. We refer to these executives collectively as our “Named Executive Officers”, or “NEOs”.

 

Named Executive Officer

 

Position(s)

Troy E. Wilson, Ph.D., J.D.

 

Chairman, President and Chief Executive Officer

Marc Grasso, M.D.

 

Chief Financial Officer and Chief Business Officer

Stephen Dale, M.D.

 

Chief Medical Officer (1)

Kirsten Flowers

 

Chief Commercial Officer (2)

Kathleen Ford

 

Chief Operating Officer

Bridget Martell, M.A., M.D.

 

Former Acting Chief Medical Officer (3)

 

(1)

Dr. Dale’s employment was effective on August 24, 2020.

(2)

Ms. Flowers’ employment was effective on January 6, 2020.

(3)

Dr. Martell served as our Acting Chief Medical Officer from February 2020 to August 2020.

Executive Summary

Overview

We are a clinical-stage biopharmaceutical company committed to realizing the promise of precision medicines for the treatment of cancer. Our pipeline consists of small molecule product candidates that target cancer signaling pathways where there is a strong scientific and clinical rationale to improve outcomes, and we intend to pair them with molecular or cellular diagnostics to identify those patients most likely to respond to treatment. We presently have two product candidates, tipifarnib and KO-539, in clinical development as well as additional programs that are at a discovery stage. We plan to advance our product candidates through a combination of internal development and strategic partnerships while maintaining significant development and commercial rights.

Our first product candidate, tipifarnib, is a potent, selective and orally bioavailable inhibitor of farnesyl transferase that has been previously studied in more than 5,000 cancer patients and demonstrated compelling and durable anti-cancer activity in certain patients with a manageable side effect profile. We are currently evaluating tipifarnib in multiple solid tumor and hematologic indications.

Our second product candidate, KO-539, is a potent, selective, reversible and oral small molecule inhibitor of the mixed-lineage leukemia 1, or MLL1, gene (now renamed Lysine K-specific Methyltransferase 2A, or KMT2A), or menin-KMT2A, protein-protein interaction. We have generated preclinical data that support the potential anti-tumor activity of KO-539 in genetically defined subsets of acute leukemia, including those with rearrangements or partial tandem duplications in the KMT2A gene as well as those with oncogenic driver mutations in genes such as nucleophosmin 1, or NPM1. The novel mechanism of action targets epigenetic dysregulation and removes a key block to cellular differentiation to drive anti-tumor activity. We believe KO-539 has the potential to address approximately 35% of acute myeloid leukemia, or AML, including NPM1-mutant AML and KMT2A-rearranged AML.

2020 and Early 2021 Financial and Business Highlights

 

Announced preliminary Phase 1 clinical data for KO-539

 

Strengthened leadership team and organization to build additional capabilities in clinical drug development

 

Received Breakthrough Therapy designation for tipifarnib in HRAS mutant head and neck squamous cell carcinoma

21.


 

 

Closed two public stock offerings totaling approximately $459.0 million in net proceeds; ended the 2020 year with approximately $633.3 million held in cash, cash equivalents and short-term investments

Executive Compensation Philosophy and Objectives

We operate in a highly competitive and rapidly evolving market, and we expect competition among companies in our market and adjacent spaces to continue to increase. Our ability to compete and succeed in this environment is directly correlated to our ability to recruit, incentivize, and retain talented executives. Our compensation philosophy is intended to attract and reward talented individuals who possess the skills necessary to expand our business and assist in the achievement of our other strategic goals and thereby create long-term value for our stockholders.

Consistent with our compensation philosophy, the primary objectives of our executive compensation programs are to:

 

Provide competitive compensation to recruit, retain, and motivate top executive talent to achieve our short and long-term performance goals;

 

Align the economic interests of our executive officers and stockholders through the use of equity awards; and

 

Reward executives for achievement of our performance goals.

 

Our executive compensation program generally consists of, and is intended to strike a balance among, the following three principal components: base salary, annual cash incentives, and long-term incentive compensation.

We also provide our executive officers with severance and change-in-control benefits, as well as other benefits available to all our employees, including retirement benefits under the Company’s 401(k) plan and participation in employee benefit plans.

We heavily weight our executives’ total compensation to “at-risk” pay. We believe focusing heavily on at-risk pay for our executives’ helps to properly focus our executives’ decisions, resources, and commitment to enterprise imperatives to advance the goals of the organization.

 

What We Do

   Pay for Performance. We link pay to performance by generally heavily weighting total executive compensation to at-risk pay.

   Thoughtful Analysis of Compensation Program. Our Compensation Committee reviews our compensation philosophy and strategy on an annual basis. Our Compensation Committee’s independent advisor provides information and data regarding competitive practices and pay levels, which is considered by the Compensation Committee prior to making compensation-related decisions.

   Thorough Compensation Risk Assessment. Our Compensation Committee conducts an annual assessment of our compensation programs to promote prudent risk management.

   Compensation Committee Independence and Experience. Our Compensation Committee is comprised solely of independent directors who have extensive relevant experience.

   Independent Compensation Consultant. Our Compensation Committee selects and engages its own independent advisor.

   Conduct an Annual Say-on-Pay Vote. Beginning this year, we will hold an annual say-on-pay vote and are committed to taking the views of our stockholders into consideration when evaluating and making changes to our compensation program.

What We Don’t Do

×   No hedging or pledging in company securities

×   No change in control excise tax gross-ups

×   No backdating or repricing of stock options; no discounted stock options

×   No pension or nonqualified deferred compensation

 

22.


 

How We Determine Executive Compensation

Pursuant to its charter and in accordance with applicable Nasdaq listing standards, our Compensation Committee is responsible for reviewing, evaluating, and approving the compensation arrangements of our executive officers and for establishing and maintaining our executive compensation policies and practices. The Compensation Committee is authorized to engage its own independent advisors to provide advice on matters related to executive compensation and general compensation programs, and for 2020 worked with Radford as its independent compensation consultant. Our Compensation Committee seeks input and receives advice from its independent compensation consultant as well as members of our executive management team when discussing and finalizing compensation- and governance-related decisions for our executive officers. For additional information on the Compensation Committee, see “Information Regarding Committees of the Board of Directors – Compensation Committee” in this proxy statement.

In 2020, the Compensation Committee considered numerous factors in determining whether to make adjustments to the cash and equity compensation of our executive officers, including our NEOs. The Compensation Committee reviewed the performance of our executive officers, taking into consideration financial, operational, customer, strategic, product, and competitive factors, as well as the succession planning and retention objectives for our various executive officer positions. The Compensation Committee also considered data regarding the practices of our comparators provided by its independent compensation consultant. The initial compensation arrangements with our executive officers other than our CEO were the result of arm’s-length negotiations between us and each individual executive officer at the time of his or her hire or appointment.

Role of Management

The role of management is to design our executive compensation programs, policies, and governance and make recommendations to the Compensation Committee regarding these matters. In this respect, management reviews the effectiveness of our compensation programs, including competitiveness and alignment with the Company’s performance goals. Management also recommends changes to our compensation programs to facilitate achievement of our performance goals and reviews and makes recommendations with respect to the adoption and approval of, or modifications to, company-wide equity incentive compensation plans. Except with respect to our CEO’s compensation, our CEO made recommendations to the Compensation Committee regarding base salaries, cash incentive awards, equity incentive awards, and other awards for our executive officers, which were also taken into account by the Compensation Committee in making its decisions regarding executive compensation. Our CEO was not present for the discussions of our Compensation Committee regarding his performance and compensation. Following deliberation, the Compensation Committee approved the cash compensation and equity awards for each of our NEOs as described below and in the Summary Compensation Table.

Role of the Compensation Consultant

The Compensation Committee retained Radford to advise on our 2020 executive compensation programs, practices and decisions given Radford’s expertise in the life sciences industry and its knowledge of competitive practices in the space.

During 2020, Radford provided the following services as requested by the Compensation Committee:

 

Assisted in the development of the 2020 compensation peer group used to assess overall market competitive compensation practices;

 

Prepared for Compensation Committee review, a comprehensive analysis providing a range of market data reference points (generally at the 25th, 50th, and 75th percentiles of the market data) with respect to base salary, target annual incentive opportunities, equity and target total direct compensation;

 

Reviewed and assessed our current compensation programs and identified certain changes for the Compensation Committee’s consideration to potentially implement in order to remain competitive with the market;

 

Conducted an assessment of the equity practices of our peers, and assisted in the continued development of our equity compensation strategy; and

 

Advised on regulatory developments relating to executive compensation and collaborated on the risk assessment relating to employee compensation.

23.


Base salaries, equity awards, and cash bonuses were among the items reviewed based on market data provided by Radford. During 2020, the Compensation Committee reviewed the fees provided to Radford relative to Radford’s revenues, the services provided by Radford to the Compensation Committee, any relationships between Radford and its individual consultants and our executive officers, any stock ownership of the Company by Radford, and other factors relating to Radford’s independence, and concluded that Radford is independent within the meaning of the Nasdaq listing standards and that its engagement did not present any conflict of interest.

Compensation Peer Group and Market Data

With the assistance of Radford, in September 2019, our Compensation Committee selected our primary compensation peer group which we used for our 2020 compensation decisions. The compensation peer group was generally developed from companies with a focus on early-stage pre-commercial public life sciences companies. We selected publicly-traded companies that, at the time the peer group was selected in September 2019, were at similar stages of development, with similar therapeutic focus if possible, had a market valuation generally between $250 million and $2.3 billion, a headcount generally under 150 employees and were located in biotech hubs.

Our primary compensation peer group for 2020 consisted of the following companies:

 

AnaptysBio

 

G1 Therapeutics

Atara Biotherapeutics

 

Gossamer Bio

Audentes Therapeutics

 

Iovance Biotherapeutics

Cara Therapeutics

 

Karyopharm Therapeutics

ChemoCentryx

 

Principia Biopharma

CymaBay Therapeutics

 

Rhythm Pharmaceuticals

CytomX Therapeutics

 

Stemline Therapeutics

Deciphera Pharmaceuticals

 

Syndax Pharmaceuticals

Epizyme

 

Syros Pharmaceuticals

Fate Therapeutics

 

Zogenix

 

As initial guidelines for our executives, we set target cash compensation after referencing the 50th percentile of compensation paid to executives within our compensation peer group and equity compensation after referencing the 75th percentile of the competitive market. The Compensation Committee adjusts actual positioning for our executives vis-à-vis the competitive market either up or down, to reflect experience, performance levels and market factors, as deemed appropriate by the Compensation Committee or the Board of Directors. We believe that our emphasis on equity compensation serves to retain our executives and align their interests with those of our stockholders. We also believe that generally referencing the 50th percentile in setting salary and annual incentive compensation and referencing the 75th percentile in setting equity compensation for our executives appropriately reflects our position and performance.


24.


 

Elements of Our Executive Compensation Program

The key elements of our executive compensation program include base salary, annual cash incentive awards, equity-based awards, and health, welfare and retirement programs. Except with respect to annual cash incentive plan awards, which typically are expressed as a pre-determined percentage of each executive officer’s base salary, we do not use specific formulas or weightings in determining the allocation of the various pay elements. The following chart summarizes the three main elements of compensation, their objectives, and key features.

 

Element of Compensation

 

Objectives

 

Key Features

Base Salary

(fixed cash)

 

Provides financial stability and security through a fixed amount of cash for performing job responsibilities.

 

Generally reviewed annually and determined based on a number of factors (including individual performance, internal equity, retention and the overall performance of our Company) and by reference to market data provided by our independent compensation consultant.

 

 

 

 

 

Annual Incentive

(at-risk cash)

 

Motivates and rewards for attaining rigorous annual corporate performance goals that relate to our key business objectives and individual contributions.

 

Target annual incentive opportunities, calculated as a percentage of base salary, are generally reviewed annually and determined based upon positions that have similar impact on the organization and competitive bonus opportunities in our market. Annual incentive opportunities motivate our executives to achieve specific corporate and individual performance goals aligned with our strategic objectives. Corporate performance goals are established at the beginning of the year and individual performance objectives that relate to the NEOs’ role and expected contribution toward reaching our corporate goals are also established for all NEOs other than our CEO. Actual incentive amounts earned are determined after the end of the year, based on achievement of the designated corporate performance objectives and, where applicable, individual performance objectives.

 

 

 

 

 

Long-Term Incentive (at-risk equity)

 

Motivates and rewards for long-term Company performance; fosters ownership culture,

aligns executives’ interests with stockholder interests and long-term stockholder value. Attracts highly qualified executives and encourages their continued employment over the long-term.

 

Equity opportunities are generally reviewed and determined annually or as appropriate during the year for new hires, promotions, or other special circumstances, such as to encourage retention, or as an incentive for significant achievement. Individual grants are determined based on a number of factors, including current corporate and individual performance, outstanding equity holdings and their retention value and total ownership, historical value of our stock, internal equity amongst executives and market data provided by our independent compensation consultant. Equity grants have historically been provided in the form of stock options that typically vest over a four-year-period.

 

2020 Compensation Decisions

For 2020, the Compensation Committee conducted its regular annual review of our executive compensation program, including an evaluation of competitive market practices; conducted annual performance reviews for our executive officers; determined whether to make adjustments to our executive officers’ base salaries and target annual incentive opportunities; and granted annual equity awards. The Board of Directors, at the recommendation of the Compensation Committee, approved the 2020 compensation of Dr. Wilson.

Base Salary

Base salaries are reviewed annually, typically in connection with our annual performance review process. The Compensation Committee does not apply specific formulas to determine increases to base salaries. Rather, adjustments to

25.


base salaries reflect individual responsibilities, performance and experience of our executives, internal equity considerations and market data reviewed annually. This strategy is consistent with our intent of offering base salaries that are cost-effective while remaining competitive.

In making decisions regarding salary increases, we also draw upon the expertise of the Compensation Committee’s independent compensation consultant and the experience of members of our Board of Directors with other companies.

2020 Base Salaries

Base salaries of executives are reviewed annually by the Compensation Committee as part of our annual review process in light of the executive’s individual performance and the Company’s performance during the year as well as the then current competitive conditions. We believe that it is appropriate during most years to provide an upward adjustment to executive salaries if the executive’s performance warrants such adjustment, our financial condition permits, and/or in order to adhere to our executive compensation philosophy of maintaining base salary levels near the 50th percentile as compared to our peers. The base salaries for Dr. Dale, Ms. Flowers and Dr. Martell were established in connection with their initial appointments to their roles after considering internal pay equity and peer group compensation levels for similar roles.

 

Name

 

2020 Base

Salary

 

 

% Increase

 

Troy E. Wilson, Ph.D., J.D.

 

$

573,000

 

 

 

5.7

%

Marc Grasso, M.D.

 

$

415,000

 

 

 

7.2

%

Stephen Dale, M.D.(1)

 

$

445,000

 

 

N/A

 

Kirsten Flowers(2)

 

$

425,000

 

 

N/A

 

Kathleen Ford

 

$

425,000

 

 

 

6.3

%

Bridget Martell, M.A., M.D.(3)

 

$

425,000

 

 

N/A

 

 

(1)

Dr. Dale’s base salary became effective on August 24, 2020, in connection with his appointment to the role of Chief Medical Officer.

(2)

Ms. Flowers’ base salary became effective on January 6, 2020, in connection with her appointment to the role of Chief Commercial Officer.

(3)

Dr. Martell’s base salary became effective on February 10, 2020, in connection with her appointment to the role of Acting Chief Medical Officer.

Annual Incentive Opportunities

In addition to base salaries, our NEOs are eligible to receive annual incentives, which are designed to provide appropriate incentives to our executives to achieve defined annual corporate goals and individual goals and to reward our executives who significantly impact our corporate results.

Annual corporate goals are established by the Board of Directors at the beginning of each year to which they relate, taking into consideration the recommendations of the Compensation Committee. For all executives other than the CEO, individual performance goals are also established.

The actual annual incentive earned by each NEO is generally determined based on (i) the individual’s target incentive opportunity, as a percentage of base salary, (ii) achievement of corporate goals, and (iii) individual performance, which may be measured against pre-established individual performance goals specified for any particular year and/or a general individual performance assessment for such period.

At the close of the applicable fiscal year, the Compensation Committee reviews all facets of our corporate performance, including our achievement of Board-approved strategic objectives and completes a qualitative assessment of our performance based on a holistic retrospective assessment of our achievements. This conclusion reflects the Compensation Committee’s views as to whether the corporate goals were met, whether the executive has achieved his or her individual performance goals, and whether there were any other extraordinary factors that should be considered in determining the amount of annual incentive earned for the year. In making the final decision on the amount of annual incentives earned, if any, the Compensation Committee considers the review of the year-end financial results as well as the performance reviews for the executive officers given by the CEO with respect to the other NEOs. The Compensation Committee believes that maintaining discretion to evaluate corporate and individual performance at the close of the year based on the totality of the circumstances, and to award or fail to award annual incentive compensation without reliance on rote calculations under set formulas, is appropriate in responsibly discharging its duties given the rapidly evolving environment in which the Company makes strategic decisions. The Compensation Committee recommends, and our Board of Directors makes the final decisions

26.


with respect to annual incentives awarded to our CEO. Payouts of earned annual incentives, if any, are generally made in the year following the year of performance.

2020 Annual Incentive Opportunities and Achievements

The target amount for the annual incentive opportunities for our executives is generally established at the outset of the fiscal year or in the executive officer’s employment agreement and is generally based on a percentage of the executive’s base salary that is intended to be competitive with that offered to similarly-situated executives, to the extent such comparable positions exist. The 2020 target annual incentive opportunities for each of our NEOs is provided in the chart below. Such percentages were not changed from the 2019 levels, which were 55% of base salary for our CEO and 40% of base salary for all other NEOs.  

 

Executive

 

2020 Target Annual

Incentives (% of

Base Salary)

Troy E. Wilson, Ph.D., J.D.

 

55%

Marc Grasso, M.D.

 

40%

Stephen Dale, M.D.

 

40%

Kirsten Flowers

 

40%

Kathleen Ford

 

40%

Bridget Martell, M.A., M.D.

 

40%

 

For 2020, the corporate goals were weighted at 100% for Dr. Wilson and at 75% for the other NEOs, with the remaining 25% tied to their individual performance.

Our corporate goals for 2020 were based on the following core areas:

 

1.

Discovery and Research.  Meeting research and preclinical development milestones supporting clinical investigation of tipifarnib and KO-539 for use in combination with other approved or investigational therapies, and the discovery of potential second-generation farnesyltransferase inhibitor product candidates;

 

2.

Development and Regulatory.  Meeting clinical development and regulatory milestones for KO-539 and tipifarnib relating to clinical trial design and operation including trial investigator site recruitment and patient recruitment; and

 

3.

Financial.  Managing fiscal spend to budget, establishing operational efficiencies and raising additional capital.

 

The table below reflects each of the core corporate goal categories and their relative weightings approved by the Board of Directors, at the recommendation of the Compensation Committee, for 2020:

 

Metric

 

Weighting

 

Discovery and Research

 

30%

 

Development and Regulatory

 

70%

 

Financial

 

40%

 

     Overall Attainment Level

 

140%

 

 

The table below reflects the target and actual annual incentives paid to our NEOs for performance in 2020:

 

 

 

Annual Incentives

 

Executive

 

Target

 

 

Actual

 

Troy E. Wilson, Ph.D., J.D.

 

$

315,150

 

 

$

441,210

 

Marc Grasso, M.D.(1)

 

$

166,000

 

 

$

257,300

 

Stephen Dale, M.D.(2)

 

$

63,441

 

 

$

81,782

 

Kirsten Flowers(2)

 

$

168,147

 

 

$

217,973

 

Kathleen Ford

 

$

170,000

 

 

$

221,000

 

Bridget Martell, M.A., M.D.

 

$

170,000

 

 

$

221,000

 

 

 

(1)

Dr. Grasso’s actual annual incentive reflects the achievement of 200% of his individual performance goals.

 

(2)

Dr. Dale’s and Ms. Flowers’ target and actual incentives reflect amounts pro-rated to reflect date of hire.

27.


 

Long-Term Incentive Program

Our long-term, equity-based incentive awards are designed to align the interests of our NEOs and our other employees, non-employee directors and consultants with the interests of our stockholders. Because vesting is generally subject to continued service over a period of several years following the date of grant, our equity-based incentives also serve as a retention device for NEOs and other service providers. We generally provide initial equity-based incentive awards in connection with the commencement of employment of our NEOs as an inducement to commencement of employment. We award annual equity-based incentive awards at or shortly following the end of each year. Awards are subject to vesting over a period of multiple years to provide long-term incentives to deliver sustained stockholder value and to facilitate retention.

The Compensation Committee views stock options as inherently performance-based compensation that provides a direct link between executive pay and stockholder return, as the value realized, if any, by the executive, is dependent upon, and directly proportionate to, appreciation in stock price over the exercise period and throughout the remaining term prior to exercise. Additionally, stock options will not provide value to the holder if the value of our stock price does not increase after the award is granted. An equity pay mix of 100% options is also common market practice for companies in our industry and stage of development. For these reasons, the Compensation Committee determined to continue the exclusive use of stock options for our 2020 annual awards.

2020 Equity Awards

In 2020, the Compensation Committee (and with respect to Dr. Wilson, our Board of Directors) approved the following annual stock options for our NEOs, which vest over a four-year period, unless otherwise noted below. The awards to Drs. Martell and Dale and to Ms. Flowers were granted in connection with their commencement of employment as executive officers. In determining the grants to our NEOs in 2020, our Compensation Committee reviewed market data and considered a blended value and percent of Company approach.

 

Executive

 

Stock Option

Grant (#)

 

Troy E. Wilson, Ph.D., J.D.

 

 

393,950

 

Marc Grasso, M.D.

 

 

111,723

 

Stephen Dale, M.D.

 

 

200,000

 

Kirsten Flowers

 

 

250,000

 

Kathleen Ford

 

 

45,393

 

Bridget Martell, M.A., M.D.(1)

 

 

100,000

 

 

(1)

In order to provide appropriate incentive for Dr. Martell to perform her role as Acting Chief Medical Officer for a short duration, 50,000 stock options granted to Dr. Martell upon her Acting Chief Medical Officer engagement vested on the one-year anniversary of the grant date thereof. All of Dr. Martell’s unvested stock options are subject to accelerated vesting based on meeting specified performance requirements. For additional information, please see disclosure in “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table,” “Agreements with Named Executive Officers,” “Dr. Martell” provided below.

 

Benefits Programs and Perquisites

Our NEOs are eligible to participate in all of our employee benefit plans, including our medical, dental, vision, group life and disability insurance plans, in each case on the same basis as our other employees. We pay the premiums for term life insurance and disability insurance for all of our employees, including our NEOs. In addition, we have an executive disability policy for our executive officers. None of our NEOs participates in or has account balances in qualified or non-qualified defined benefit, non-qualified defined contribution plans or defined benefit pension plans sponsored by us.

In connection with Dr. Dale’s commencement of employment with us, we paid him a one-time sign-on bonus of $150,000. In addition, we reimburse our NEOs for their commuting expenses from their places of residence to our offices, and we also provide tax gross up payments with respect to taxes on such commuting expense reimbursements. Dr. Dale presently works from his home in Manchester, UK, and we have also agreed to provide him with furnished living space in Boston if and when it is feasible, necessary and advisable for him to work at our Boston office. We do not provide any other perquisites or personal benefits to our NEOs.

28.


All of our full-time employees in the United States, including our NEOs, are eligible to participate in our 401(k) plan, which is a retirement savings defined contribution plan established in accordance with Section 401(a) of the Internal Revenue Code of 1986, as amended (the Code”). Pursuant to our 401(k) plan, employees may elect to defer their eligible compensation on a pre-tax basis, up to the statutorily prescribed annual limits and to have the amount of this reduction contributed to our 401(k) plan. The 401(k) plan also permits us to make discretionary contributions and matching contributions, subject to established limits and a vesting schedule.

Since Dr. Dale works from his residence in the UK, we do not make contributions to our 401(k) plan on his behalf and, instead, we contribute an amount that is equivalent to other discretionary contributions we make to our employees to Dr. Dale’s UK based retirement account.

Other Features of our Executive Compensation Program

Executive Employment Agreements

We have entered into employment agreements with each of our NEOs that provide for the basic terms of their employment, including the details of their compensation as well as certain severance and change of control benefits. Each of our NEOs is employed at will and may be terminated at any time for any reason. The terms of the employment agreements are described in greater detail in the section entitled “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards TableAgreements with our Named Executive Officers.”

Severance and Change in Control Benefits

Regardless of the manner in which our NEOs service terminates, our NEOs are entitled to receive amounts previously earned during his or her term of service, including accrued and unpaid salary and unused vacation pay. Under the employment agreements for our NEOs, all severance payments are conditioned upon the executive providing a release of claims against us. If we terminate the executive’s employment without cause or the executive resigns for good reason more than 59 days prior to or 12 months after the closing of a corporate transaction, we will pay:

 

a cash lump-sum payment in an amount equal to 12 months of the executive’s then annual base salary; and

 

payment of COBRA group health insurance premiums for up to 12 months.

The employment agreements for our NEOs also provide that if we terminate the executive’s employment without cause or the executive resigns for good reason within 59 days before, on or within 12 months after the closing of a corporate transaction, we will pay:

 

with respect to Dr. Wilson, a cash lump-sum payment in an amount equal to 15 months of Dr. Wilson’s then annual base salary;

 

with respect to Drs. Grasso, Dale and Martell and Mss. Flowers and Ford, a cash lump-sum payment in an amount equal to 12 months of the executive’s then annual base salary;

 

a cash lump-sum payment in an amount equal to the executive’s full target bonus amount for services to be performed during the year in which the corporate transaction occurs;

 

with respect to Dr. Wilson, payment of COBRA group health insurance premiums for up to 15 months;

 

with respect to Drs. Grasso, Dale and Martell and Mss. Flowers and Ford, payment of COBRA group health insurance premiums for up to 12 months; and

 

accelerated vesting of all of the executive’s outstanding stock awards in full.

 

 

For purposes of our Named Executive Officer employment agreements:

 

“cause” generally means, (1) being convicted of or pleading guilty or nolo contendere to a felony or any crime involving moral turpitude or dishonesty; (2) participating in a fraud or act of dishonesty against us; (3) materially breaching any agreement with us or any of our written policies, and not curing such breach within five days of our written notice of such breach; (4) engaging in conduct that demonstrates gross unfitness to serve; or (5) engaging in willful misconduct or refusing to comply with any lawful directive of us, and not curing such noncompliance within five days of our written notice of such noncompliance.

29.


 

“good reason” generally means, if any of the following actions are taken by us without such executive officer’s written consent: (1) a material reduction in the executive’s base salary, unless pursuant to a generally applicable salary reduction program; (2) a material reduction in the executive’s duties (including responsibilities and/or authorities); (3) if applicable, a material reduction in the authority, duties, or responsibilities of the supervisor to whom the executive is required to report, including a requirement that the executive report to someone other than our Chief Executive Officer; (4) relocation of the executive’s principal place of employment to a place that increases his or her one-way commute by more than 50 miles; or (5) any other action or inaction that constitutes a material breach by us of the executive’s employment agreement or other service agreement.

 

“corporate transaction” generally means the consummation, in a single transaction or is a series of related transactions, of (1) a sale, lease, or other disposition or all or substantially all of our consolidated assets; (2) a merger, consolidation, or similar transaction following which we are not the surviving entity, or (3) a merger, consolidation or similar transaction following which we are the surviving entity but the units outstanding immediately preceding the transaction are converted or exchanged into other property, whether in the form of securities, cash or otherwise

We believe that these severance benefits are an important element of our executive compensation and retention program, particularly in the context of a corporate transaction where provision of such benefits eliminates, or at least reduces, the reluctance of our executive officers to diligently consider and pursue potential transactions that may be in the best interests of our stockholders. We also believe that our severance benefit arrangements with our NEOs are consistent with compensation arrangements provided in a competitive market for executive talent and the events triggering payment represent appropriate hurdles for the severance benefits. We further believe that the benefits of such severance arrangements, including generally requiring a release of claims against us as a condition to receiving the severance benefits, are in the best interests of the company.

In addition, each of our current NEOs holds outstanding stock options under our Amended and Restated 2014 Equity Incentive Plan (the “2014 Plan”) that were granted subject to our form of award agreement. The employment agreements with our NEOs provide for accelerated vesting of their equity awards upon an involuntary termination (both termination without cause and resignation for good reason) that occurs in connection with a change of control transaction. The Compensation Committee and our Board of Directors believe these accelerated vesting provisions are relatively common for companies in our industry at similar stages of development, based on the collective knowledge and experiences of the Compensation Committee members (and without reference to specific peer group data), and allow us to attract and retain highly qualified executive officers. In addition, we believe these accelerated vesting provisions will allow our NEOs to focus on closing a transaction that may be in the best interest of our stockholders even though the transaction may otherwise result in a termination of their employment and, absent such accelerated vesting, a forfeiture of their unvested equity awards.

Other Compensation Policies

Clawbacks

As a public company, if we are required to restate our financial results due to our material noncompliance with any financial reporting requirements under the federal securities laws as a result of misconduct, the Chief Executive Officer and Chief Financial Officer may be legally required to reimburse our Company for any bonus or other incentive-based or equity-based compensation they receive in accordance with the provisions of Section 304 of the Sarbanes-Oxley Act of 2002. In addition, we will comply with the requirements of the Dodd-Frank Act and will adopt a compensation recovery policy once the SEC adopts final regulations on the subject.

Insider Trading Policy and Window Period Policy

Our insider trading policy prohibits our employees, including our executive officers, non-employee directors and consultants from engaging in short sales, transactions in put or call options, hedging transactions or other inherently speculative transactions with respect to our securities at any time. In addition, no officer, director, other employee or consultant may margin any of our securities, including without limitation, borrowing against such securities, at any time. Our window period policy provides that the Company’s employees, including our executive officers, and our non-employee directors are required to limit their transactions in the Company’s stock to defined time periods following public dissemination of quarterly and annual financial results, notify one or more designated pre-clearance individuals prior to engaging in transactions in the Company’s stock and observe other restrictions designed to minimize the risk of apparent or actual insider trading.

30.


Compensation Policies and Practices as They Relate to Risk Management

With the assistance of the Compensation Committee’s compensation consultant, the Compensation Committee has determined that our compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on our Company.

Accounting and Tax Considerations

Under Financial Accounting Standards Board ASC Topic 718 (“ASC 718”), the Company is required to estimate and record an expense for each award of equity compensation over the vesting period of the award. We record share-based compensation expense on an ongoing basis according to ASC 718. The accounting impact of our compensation programs are one of many factors that the Compensation Committee considers in determining the structure and size of our executive compensation programs.

Under Section 162(m) of the Code (“Section 162(m)”), compensation paid to any publicly held corporation’s “covered employees” that exceeds $1 million per taxable year for any covered employee is generally non-deductible unless the compensation qualifies for (i) certain grandfathered exceptions (including the “performance-based compensation” exception) for certain compensation paid pursuant to a written binding contract in effect on November 2, 2017 and not materially modified on or after such date or (ii) the reliance period exception for certain compensation paid by corporations that become publicly held on or before December 20, 2019.

Although the Compensation Committee will continue to consider tax implications as one factor in determining executive compensation, the Compensation Committee also looks at other factors in making its decisions and retains the flexibility to provide compensation for the Company’s NEOs in a manner consistent with the goals of the Company’s executive compensation program and the best interests of the Company and its stockholders, which may include providing for compensation that is not deductible by the Company due to the deduction limit under Section 162(m). The Compensation Committee also retains the flexibility to modify compensation that was initially intended to be exempt from the deduction limit under Section 162(m) if it determines that such modifications are consistent with the Company’s business needs.

Report of the Compensation Committee of the Board of Directors

The material in this report is not “soliciting material,” is furnished to, but not deemed “filed” with, the SEC and is not deemed to be incorporated by reference in any filing of the Company under the Securities Act or the Exchange Act, other than the Company’s Annual Report on Form 10K, where it shall be deemed to be “furnished,” whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis included in this proxy statement. Based on such review and discussions, the Compensation Committee has recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and be incorporated by reference in our Annual Report on Form 10-K for 2020.

 

Compensation Committee

Mary T. Szela, Chair

Faheem Hasnain

Diane Parks

Steven H. Stein, M.D.

31.


 

Summary Compensation Table for Fiscal 2020, 2019 and 2018

 

Name and Principal Position

 

Year

 

Salary

($)

 

 

Bonus

($)

 

 

Option

Awards

($)(1)

 

 

Non-Equity

Incentive Plan

Compensation

($)(2)

 

 

All Other

Compensation

($)

 

 

Total

($)

 

Troy E. Wilson, Ph.D., J.D.

 

2020

 

$

573,000

 

 

$

 

 

$

3,078,877

 

 

$

441,210

 

 

$

99,029

 

(3)

$

4,192,116

 

President and Chief Executive Officer

 

2019

 

$

542,000

 

 

$

 

 

$

2,327,952

 

 

$

290,275

 

 

$

75,990

 

(3)

$

3,236,217

 

 

 

2018

 

$

526,400

 

 

$

 

 

$

3,794,340

 

 

$

368,480

 

 

$

56,618

 

(3)

$

4,745,838

 

Marc Grasso, M.D.(4)

 

2020

 

$

415,000

 

 

$

 

 

$

873,160

 

 

$

257,300

 

 

$

43,648

 

(5)

$

1,589,108

 

Chief Financial Officer and Chief Business Officer

 

2019

 

$

387,750

 

 

$

 

 

$

1,481,424

 

 

$

152,929

 

 

$

90,179

 

(5)

$

2,112,282

 

 

 

2018

 

$

136,876

 

 

$

100,000

 

(6)

$

3,288,000

 

 

$

69,426

 

 

$

39,965

 

(5)

$

3,634,267

 

Stephen Dale, M.D.(7)

 

2020

 

$

158,602

 

 

$

150,000

 

(8)

$

2,887,220

 

 

$

81,782

 

 

$

8,550

 

(9)

$

3,286,154

 

Chief Medical Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kirsten Flowers(10)

 

2020

 

$

420,368

 

 

$

 

 

$

2,293,025

 

 

$

217,973

 

 

$

17,026

 

(11)

$

2,948,392

 

Chief Commercial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kathleen Ford (12)

 

2020

 

$

425,000

 

 

$

 

 

$

354,764

 

 

$

221,000

 

 

$

37,397

 

(13)

$

1,038,161

 

Chief Operating Officer

 

2019

 

$

157,692

 

 

$

 

 

$

3,234,175

 

 

$

61,881

 

 

$

31,282

 

(13)

$

3,485,030

 

Bridget Martell, M.A., M.D.(14)

 

2020

 

$

397,708

 

 

$

 

 

$

1,363,504

 

(15)

$

221,000

 

 

$

449,434

 

(16)

$

2,431,646

 

Former Acting Chief Medical Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

In accordance with SEC rules, this column reflects the aggregate grant date fair value of the awards computed in accordance with ASC 718. Assumptions used in the calculation of these amounts are included in Note 11 to our financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020. These amounts do not reflect the actual economic value that will be realized by our Named Executive Officer upon the vesting, exercise, or the sale of the shares of common stock underlying such awards.

(2)

Amounts shown represent performance bonuses earned in 2020, 2019 and 2018, which were paid in cash in February 2021, February 2020 and February 2019, respectively. Dr. Grasso’s performance bonus for 2018 was pro-rated to reflect his employment start date of August 21, 2018, Ms. Ford’s performance bonus for 2019 was pro-rated to reflect her employment start date of August 9, 2019 and Ms. Flowers’ and Dr. Dale’s performance bonuses for 2020 were pro-rated to reflect their employment start dates of January 6, 2020 and August 24, 2020, respectively.

(3)

Consists of (i) $8,550, $8,400 and $8,250 for safe harbor 401(k) contributions for 2020, 2019 and 2018, respectively, (ii) $630, $630 and $840 for term life insurance premiums in 2020, 2019 and 2018, respectively, (iii) $1,634 for long-term disability insurance premiums for each of 2020, 2019 and 2018, (iv) $74,442, $65,326 and $45,894 for commuting expenses in 2020, 2019 and 2018, respectively, together with a tax gross up payment and (v) $13,773 for a one-time payout for unused vacation in 2020. For more information regarding these benefits, see “Benefits Programs and Perquisites” above.

(4)

Dr. Grasso’s employment start date was August 21, 2018.

(5)

Consists of (i) $8,550, $8,400 and $7,109 for safe harbor 401(k) contributions for 2020, 2019 and 2018, respectively, (ii) $630, $630 and $280 for term life insurance premiums in 2020, 2019 and 2018, respectively, (iii) $1,710, $1,710 and $570 for long-term disability insurance premiums in 2020, 2019 and 2018, respectively, (iv) $22,782, $79,439 and $32,006 for commuting expenses in 2020, 2019 and 2018, respectively, together with a tax gross up payment, and (v) $9,976 for a one-time payout for unused vacation in 2020. For more information regarding these benefits, see “Benefits Programs and Perquisites” above.

(6)

Represents a sign-on bonus of $100,000 paid to Dr. Grasso in August 2018 upon the commencement of his employment with the Company.

(7)

Dr. Dale’s employment start date was August 24, 2020.

(8)

Represents a sign-on bonus of $150,000 paid to Dr. Dale in August 2020 upon the commencement of his employment with the Company.

(9)

Consists of $8,550 for contributions to Dr. Dale’s UK based retirement account in 2020. For more information regarding these benefits, see “Benefits Programs and Perquisites” above.

32.


(10)

Ms. Flowers’ employment start date was January 6, 2020.

(11)

Consists of (i) $8,550 for safe harbor 401(k) contributions for 2020, (ii) $481 for term life insurance premiums in 2020, (iii) $995 for long-term disability insurance premiums in 2020 and (iv) $7,000 for commuting expenses in 2020 together with a tax gross up payment. For more information regarding these benefits, see “Benefits Programs and Perquisites” above.

(12)

Ms. Ford’s employment start date was August 9, 2019.

(13)

Consists of (i) $8,550 and $5,710 for safe harbor 401(k) contributions for 2020 and 2019, respectively, (ii) $315 for term life insurance premiums for each of 2020 and 2019, (iii) $18,316 and $25,257 for commuting and parking expenses in 2020 and 2019, respectively, together with a tax gross up payment, and (iv) $10,216 for a one-time payout for unused vacation in 2020. For more information regarding these benefits, see “Benefits Programs and Perquisites” above.

(14)

Dr. Martell served as Acting Chief Medical Officer from February 10, 2020 through August 23, 2020.

(15)

Includes incremental fair value associated with the modification of Dr. Martell’s option award in August 2020.

(16)

Consists of (i) $8,550 for safe harbor 401(k) contributions for 2020, (ii) $525 for term life insurance premiums in 2020, (iii) $5,143 for commuting expenses in 2020 together with a tax gross up payment, (iv) $10,216 for a one-time payout for unused vacation in 2020 and (v) $425,000 paid pursuant to the terms of Dr. Martell’s August 2020 amended executive employment agreement in lieu of severance benefits due under her original executive employment agreement.

Grants of Plan-Based Awards

The following table presents, for each of our Named Executive Officers, information concerning grants of plan-based awards made during the fiscal year ended December 31, 2020. This information supplements the information about these awards set forth in the Summary Compensation Table above.

 

 

 

 

 

Estimated Future Payouts

Under Non-Equity Incentive

Plan Awards

 

 

All Other

Stock

Awards:

Number of

Securities

Underlying

Options

 

 

Exercise

Price of

Option

 

 

Grant Date

Fair Value

of Option

 

Name

 

Grant Date

 

Target ($)(1)

 

 

Maximum ($)

 

 

Granted (#)

 

 

Awards ($/Sh)

 

 

Awards ($)(2)

 

Troy E. Wilson, Ph.D., J.D.

 

1/30/2020

 

$

315,150

 

 

$

472,725

 

(3)

 

393,950

 

 

$

11.86

 

 

$

3,078,877

 

Marc Grasso, M.D.

 

1/30/2020

 

$

166,000

 

 

$

269,750

 

(4)

 

111,723

 

 

$

11.86

 

 

$

873,160

 

Stephen Dale, M.D.

 

8/24/2020

 

$

63,441

 

 

$

103,091

 

(4)

 

200,000

 

 

$

21.98

 

 

$

2,887,220

 

Kirsten Flowers

 

1/6/2020

 

$

168,147

 

 

$

273,239

 

(4)

 

250,000

 

 

$

13.85

 

 

$

2,293,025

 

Kathleen Ford

 

1/30/2020

 

$

170,000

 

 

$

276,250

 

(4)

 

45,393

 

 

$

11.86

 

 

$

354,764

 

Bridget Martell, M.A., M.D.

 

2/10/2020

 

$

170,000

 

 

$

276,250

 

(4)

 

100,000

 

 

$

12.22

 

 

$

1,363,504

 

 

(1)

This column reflects a percentage of such Named Executive Officer’s 2020 annual base salary as specified under “2020 Annual Incentive Opportunities and Achievements.”

(2)

This column represents the aggregate grant date fair value of equity awards granted in 2020 and calculated in accordance with ASC 718, excluding the effect of estimated forfeitures. The assumptions used in calculating the fair value of the stock option awards can be found under Note 11 to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2020.

(3)

Amount represents 150% of the respective target amount for the corporate goals which are weighted at 100%. There is no minimum amount payable for a certain level of performance.

(4)

Amount is calculated as the sum of (i) 150% of the respective target amount for the corporate goals which are weighted at 75% and (ii) 200% of the respective target amount for the individual goals which are weighted at 25%. There is no minimum amount payable for a certain level of performance.

33.


Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

Agreements with Named Executive Officers

We have entered into employment agreements with our Named Executive Officers that provide for, among other things, certain base salary, target bonus and severance payments to our Named Executive Officers as follows:

Dr. Wilson

In March 2016, we entered into an amended and restated executive employment agreement with Dr. Wilson, which replaced and superseded his previous executive employment agreement. Pursuant to his amended and restated executive employment agreement, Dr. Wilson is entitled to receive an annual base salary, which was most recently increased to $600,000 for fiscal year 2021, and he is eligible to receive an annual performance bonus based on a target amount of 50% of his annual base salary, most recently increased to 55%. Dr. Wilson also is eligible for severance benefits that are described in the section titled “Potential Payments Upon Termination or Change of Control” below. We reimburse Dr. Wilson for his commuting expenses in connection with his commute to our San Diego office and in March 2019, our Board of Directors also agreed to provide Dr. Wilson with tax gross up payments with respect to taxes on the commuting expense reimbursement payments. Dr. Wilson’s employment is at-will and may be terminated at any time by either Dr. Wilson or by us with or without cause and without notice.

Dr. Grasso

We entered into an executive employment agreement with Dr. Grasso which became effective on the start of his employment with us in August 2018 and which was amended effective as of August 2018. Pursuant to his executive employment agreement, Dr. Grasso is entitled to receive an annual base salary, which was most recently increased to $446,300 for fiscal year 2021, and he is eligible to receive an annual performance bonus based on a target amount of 40% of his annual base salary. Pursuant to his executive employment agreement, Dr. Grasso also received a one-time sign-on bonus of $100,000 and is entitled to reimbursement of his commuting expenses in connection with his commute to our San Diego office, of up to $3,000 per month. In March 2019, our Compensation Committee agreed to remove the $3,000 monthly cap and to also provide Dr. Grasso with tax gross up payments with respect to taxes on the commuting expense reimbursement payments. Dr. Grasso also is eligible for severance benefits that are described in the section titled “Potential Payments Upon Termination or Change of Control” below. Dr. Grasso’s employment is at-will and may be terminated at any time by either Dr. Grasso or by us with or without cause and without notice.

Dr. Dale

We entered into an executive employment agreement with Dr. Dale which became effective on the start of his employment with us in August 2020. Pursuant to his executive employment agreement, Dr. Dale is entitled to receive an annual base salary, which was most recently increased to $465,000 for fiscal year 2021, and he is eligible to receive an annual performance bonus based on a target amount of 40% of his annual base salary. Pursuant to his executive employment agreement, Dr. Dale also received a one-time sign-on bonus of $150,000. Dr. Dale also is eligible for severance benefits that are described in the section titled “Potential Payments Upon Termination or Change of Control” below. Dr. Dale’s employment is at-will and may be terminated at any time by either Dr. Dale or by us with or without cause and without notice.

Ms. Flowers

We entered into an executive employment agreement with Ms. Flowers which became effective on the start of her employment with us in January 2020. Pursuant to her executive employment agreement, Ms. Flowers is entitled to receive an initial annual base salary, which was most recently increased to $442,000 for fiscal year 2021, and she is eligible to receive an annual performance bonus based on a target amount of 40% of her annual base salary. Under her agreement, Ms. Flowers was entitled to a relocation bonus of $100,000 grossed up for taxes if she relocated to the San Diego area before the end of 2020. This event did not occur and as such Ms. Flowers earned no relocation bonus. Ms. Flowers also is eligible for severance benefits that are described in the section titled “Potential Payments Upon Termination or Change of Control” below. Ms. Flowers’ employment is at-will and may be terminated at any time by either Ms. Flowers or by us with or without cause and without notice.


34.


 

Ms. Ford

We entered into an executive employment agreement with Ms. Ford which became effective on the start of her employment with us in August 2019. Pursuant to her executive employment agreement, Ms. Ford is entitled to receive an annual base salary, which was most recently increased to $463,250 for fiscal year 2021, and she is eligible to receive an annual performance bonus based on a target amount of 40% of her annual base salary. Ms. Ford also is eligible for severance benefits that are described in the section titled “Potential Payments Upon Termination or Change of Control” below. Ms. Ford’s employment is at-will and may be terminated at any time by either Ms. Ford or by us with or without cause and without notice.

Dr. Martell

We entered into an executive employment agreement with Dr. Martell which became effective on the start of her role as Acting Chief Medical Officer in February 2020. We subsequently entered into an amended and restated executive employment agreement with Dr. Martell in August 2020, to serve as our Senior Scientific Advisor upon the engagement of Dr. Dale as our permanent Chief Medical Officer. Under the amended and restated executive employment agreement, Dr. Martell’s employment with us will terminate on June 30, 2021 (the “Martell Termination Date”), if not terminated sooner by us or Dr. Martell.

Pursuant to her amended and restated executive employment agreement, Dr. Martell received a base salary of $425,000 for the period from February 10, 2020 to December 31, 2020, and she is eligible to receive an annual performance bonus based on a target amount of 40% of her annual base salary. In addition, under her amended and restated executive employment agreement, all outstanding but unvested options previously granted to Dr. Martell shall vest and become exercisable if certain specified clinical development milestones are met on or prior to June 30, 2021. As of the time of the filing of this proxy statement, the events specified in Dr. Martell’s amended executive employment agreement had not occurred and the automatic vesting of her outstanding but unvested options was not triggered. At the time Dr. Martell transitioned from serving as Acting Chief Medical Officer to Senior Scientific Advisor, we paid her $425,000 in lieu of the severance payments due under her original executive employment agreement. Dr. Martell’s employment is at-will and may be terminated at any time prior to the Martell Termination Date by either Dr. Martell or by us with or without cause and without notice. Upon her termination of employment under her amended and restated executive employment agreement on the Martell Termination Date or if we terminate Dr. Martell prior to the Martell Termination Date, she is eligible for severance benefits that are described in the section titled “Potential Payments Upon Termination or Change of Control” below.

Equity Awards

We have granted equity awards to our Named Executive Officers under our 2014 Plan. For further information regarding such equity awards, including the vesting schedules, please see the “Grants of Plan-Based Awards” table and related footnotes above, the “Outstanding Equity Awards at Fiscal Year End” table and related footnotes below and “Long-Term Incentive Program” in our CD&A above.

Option Repricings or Modifications

In connection with Dr. Martell’s amended executive employment agreement, the vesting of Dr. Martell’s outstanding equity awards are subject to accelerated vesting as noted in “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Agreements with Named Executive Officers—Dr. Martell” above. With the exception of the foregoing, we did not engage in any repricings or other modifications or cancellations to any of our Named Executive Officers’ option awards during 2020.


35.


 

Salary and Annual Incentive Bonus Compared to Total Compensation

The ratio of salary and annual incentive bonus to total compensation in 2020 (each as set forth in the “Summary Compensation Table” above) is set forth below for each Named Executive Officer.

 

Troy E. Wilson, Ph.D., J.D. – 24%

 

Marc Grasso, M.D. – 42%

 

Stephen Dale, M.D. – 7%

 

Kirsten Flowers – 22%

 

Kathleen Ford – 62%

 

Bridget Martell, M.A., M.D. – 25%

 

Outstanding Equity Awards at Fiscal Year End

The following table shows for the fiscal year ended December 31, 2020, certain information regarding outstanding equity awards at fiscal year-end for our Named Executive Officers.

 

 

 

 

 

Option Awards(1)

Name

 

Grant

Date

 

Number of

securities

underlying

unexercised

options

(exercisable)

(#)

 

 

Number of

securities

underlying

unexercised

options

(unexercisable)

(#)

 

 

Option

exercise

price

($/share)(2)

 

 

Option

expiration

date

Troy E. Wilson, Ph.D., J.D.

 

1/29/2016

 

 

6,945

 

 

 

-

 

 

$

4.80

 

 

1/28/2026

 

 

1/23/2017

 

 

85,293

 

 

 

4,917

 

(3)

$

6.15

 

 

1/22/2027

 

 

1/24/2018

 

 

200,520

 

 

 

74,480

 

(3)

$

20.00

 

 

1/23/2028

 

 

1/22/2019

 

 

105,416

 

 

 

114,584

 

(3)

$

15.47

 

 

1/21/2029

 

 

1/30/2020

 

 

90,280

 

 

 

303,670

 

(3)

$

11.86

 

 

1/29/2030

Marc Grasso, M.D.

 

8/21/2018

 

 

143,731

 

 

 

104,167

 

(3)

$

19.40

 

 

8/20/2028

 

 

1/22/2019

 

 

32,083

 

 

 

72,917

 

(3)

$

15.47

 

 

1/21/2029

 

 

1/30/2020

 

 

25,603

 

 

 

86,120

 

(3)

$

11.86

 

 

1/29/2030

Stephen Dale, M.D.

 

8/24/2020

 

 

 

 

 

200,000

 

(4)

$

21.98

 

 

8/23/2030

Kirsten Flowers

 

1/6/2020

 

 

 

 

 

250,000

 

(4)

$

13.85

 

 

1/5/2030

Kathleen Ford

 

8/9/2019

 

 

55,208

 

 

 

166,667

 

(3)

$

19.43

 

 

8/8/2029

 

 

1/30/2020

 

 

10,402

 

 

 

34,991

 

(3)

$

11.86

 

 

1/29/2030

Bridget Martell, M.A., M.D.(5)

 

6/7/2018

 

 

5,528

 

 

 

9,740

 

(4)

$

16.35

 

 

6/6/2028

 

 

1/22/2019

 

 

 

 

 

2,830

 

(3)

$

15.47

 

 

1/21/2029

 

 

2/10/2020

 

 

 

 

 

100,000

 

(6)

$

12.22

 

 

2/9/2030

 

(1)

All of the option awards were granted under the 2014 Plan, the terms of which are described below under “Equity Compensation Plans—Amended and Restated 2014 Equity Incentive Plan.”

(2)

All of the option awards were granted with a per share exercise price equal to the closing sales price for our common stock on the Nasdaq market as of the grant date.

(3)

1/48th of the shares vest monthly over the four years following the applicable grant date set forth in the table above. In addition, the vesting of the option accelerates upon certain terminations occurring in connection with a change of control transaction as described in “Potential Payments Upon Termination or Change of Control.”

(4)

1/4th of the shares vest on the one-year anniversary of the vesting commencement date and 1/48th of the shares vest monthly thereafter for the remaining three years. In addition, the vesting of the option accelerates upon certain terminations occurring in connection with a change of control transaction as described in “Potential Payments Upon Termination or Change of Control.”

(5)

All of Dr. Martell’s unvested stock options are subject to accelerated vesting based on meeting specified performance requirements as described in “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Agreements with Named Executive Officers—Dr. Martell” above.

36.


(6)

50,000 of the shares vest on the one-year anniversary of the vesting commencement date and the remaining 50,000 shares vest as follows: 1/4th of such shares vest on the one-year anniversary of the vesting commencement date and 1/48th of such shares vest monthly thereafter for the remaining three years.

Option Exercises and Stock Vested

The following table provides information regarding option exercises during 2020 for our Named Executive Officers. None of our Named Executive Officers held unvested stock awards during 2020.