DEF 14A 1 alxo-def_14a-2022_proxy.htm DEF 14A DEF 14A

 

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-11(c) or §240.14a-2

ALX Oncology Holdings Inc.

(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check all boxes that apply):

 

 

 

 

 

 

 

 

No fee required

 

 

 

 

 

Fee paid previously with preliminary materials

 

 

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 


 

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April 22, 2022

Dear Stockholder:

We are pleased to invite you to attend the 2022 Annual Meeting of Stockholders (the Annual Meeting) of ALX Oncology Holdings Inc. (ALX or the Company) and will be conducted virtually via a live webcast on Tuesday, June 14, 2022 at 1 p.m. Pacific Time. The Annual Meeting will be held in a virtual format this year to support the health and safety of our stockholders, and to afford the same rights and opportunities to participate as would be available at an in-person meeting. You will be able to attend the Annual Meeting virtually by visiting www.virtualshareholdermeeting.com/ALXO2022, where you will be able to listen to the meeting live, submit questions and vote online by entering the control number located on your proxy card.

The attached Notice of Annual Meeting of Stockholders and Proxy Statement contain details of the business to be conducted at the Annual Meeting.

Whether or not you attend the Annual Meeting virtually, it is important that your shares be represented and voted at the meeting. Therefore, we urge you to promptly vote and submit your proxy via the Internet, by phone, or by signing, dating and returning the enclosed proxy card in the enclosed envelope. If you decide to attend the Annual Meeting, you will be able to change your vote or revoke your proxy, even if you have previously submitted your proxy.

On behalf of the Company’s Board of Directors, we would like to thank you for your continued support of and interest in ALX.

Sincerely,

 

 

 

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Corey Goodman, Ph.D.

 

Jaume Pons, Ph.D.

Executive Chairman of the Board of Directors

 

President, Chief Executive Officer and Director

 

 


 

ALX ONCOLOGY HOLDINGS INC.

323 Allerton Avenue

South San Francisco, California 94080

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 

 

 

Time and Date

 

Tuesday, June 14, 2022 at 1 p.m. Pacific Time

 

 

Place

 

The Annual Meeting will be a completely virtual meeting of stockholders, to be conducted via a live webcast. You will be able to attend the Annual Meeting virtually, submit questions and vote online during the meeting by visiting www.virtualshareholdermeeting.com/ALXO2022.

 

 

Items of Business

 

 

 

 

 

 

•  To elect two Class II directors to serve until the 2025 annual meeting of stockholders or until their successors are duly elected and qualified;

 

 

 

 

 

•  To conduct an advisory vote to approve the compensation of our named executive officers (NEO);

 

 

 

 

 

•  To hold an advisory vote on the frequency of future advisory votes to approve the compensation of our named executive officers;

 

 

 

 

•  To ratify the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2022; and

 

 

 

 

•  To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.

 

 

Record Date

 

Monday, April 18, 2022 (the Record Date). Only stockholders of record at the close of business on the Record Date are entitled to receive notice of, and to vote at, the Annual Meeting.

YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual Meeting virtually, we urge you to submit your vote via the Internet, telephone or mail as soon as possible to ensure your shares are represented. For additional instructions for each of these voting options, please refer to the proxy card. Returning the proxy does not deprive you of your right to attend the Annual Meeting and to vote your shares at the Annual Meeting. The proxy statement explains proxy voting and the matters to be voted on in more detail.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to Be Held on June 14, 2022. Our proxy statement and Annual Report to Stockholders are being made available on or about April 22, 2022 on our investor relations website at https://ir.alxoncology.com/ under “Financials & Filings.” We are providing access to our proxy materials over the Internet under the rules adopted by the Securities and Exchange Commission.

 

By order of the Board of Directors,

 

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Jaume Pons

President, Chief Executive Officer and Director

 

South San Francisco, California

April 22, 2022

 

This proxy statement is being mailed to stockholders on or about April 22, 2022.

 


 

TABLE OF CONTENTS

 

 

 

Page

 

 

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

 

1

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

 

9

Director Nominees

 

9

Continuing Directors

 

10

Family Relationships

 

11

Director Independence

 

12

Board Leadership Structure

 

12

Board Diversity

 

13

Role of the Board in Risk Oversight

 

13

Environmental, Social and Governance (ESG) Practices

 

13

Committees of our Board of Directors

 

14

Attendance at Board and Stockholder Meetings

 

17

Compensation Committee Interlocks and Insider Participation

 

17

Considerations in Evaluating Director Nominees

 

17

Stockholder Recommendations for Nominations to the Board of Directors

 

18

Communications with the Board of Directors

 

18

Corporate Governance Guidelines and Code of Business Conduct and Ethics

 

18

Director Compensation

 

19

PROPOSAL NO. 1—ELECTION OF DIRECTORS

 

22

Nominees

 

22

Vote Required

 

22

PROPOSAL NO. 2—ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

 

23

PROPOSAL NO. 3—ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON NAMED EXECUTIVE OFFICER COMPENSATION

 

24

PROPOSAL NO. 4—RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

25

Fees Paid to the Independent Registered Public Accounting Firm

 

25

Auditor Independence

 

25

Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

 

26

Vote Required

 

26

AUDIT COMMITTEE REPORT

 

27

EXECUTIVE OFFICERS

 

28

EXECUTIVE COMPENSATION

 

29

Compensation Discussion and Analysis

 

29

Named Executive Officers

 

29

Executive Summary

 

29

Compensation Philosophy

 

32

“Say-on-Pay” Voting

 

33

Compensation Determination Process

 

33

Pay Components

 

36

Severance and Change in Control Protections

 

39

Other Compensation

 

40

Additional Policies and Practices

 

41

Tax and Accounting Considerations

 

41

Compensation Committee Report

 

42

Summary Compensation Table

 

43

Grants of Plan Based Awards

 

44

Outstanding Equity Awards at 2021 Year-End

 

45

Option Exercises During Fiscal Year 2021

 

46

Executive Employment Letter Agreements

 

46

Potential Payments on Termination or Change in Control

 

47

 

 


 

Executive Incentive Compensation Plan

 

49

Equity Compensation Plan Information

 

50

Risk Analysis of our Compensation Plans

 

50

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

51

CERTAIN RELATIONSHIPS, RELATED PARTY AND OTHER TRANSACTIONS

 

54

Investors’ Rights Agreement

 

54

venBIO Consulting Agreement

 

54

Tallac Therapeutics Agreements

 

54

Acquisition of ScalmiBio, Inc.

 

54

Indemnification Agreements

 

55

Related-Party Transaction Policy

 

55

OTHER MATTERS

 

56

Delinquent Section 16(a) Reports

 

56

Fiscal Year 2021 Annual Report and SEC Filings

 

56

 

 


 

ALX ONCOLOGY HOLDINGS INC.

PROXY STATEMENT

FOR THE 2022 ANNUAL MEETING OF STOCKHOLDERS

To Be Held at 1 p.m. Pacific Time on Tuesday, June 14, 2022

This proxy statement and the enclosed form of proxy are furnished in connection with the solicitation of proxies by our board of directors for use at the 2022 annual meeting of stockholders of ALX Oncology Holdings Inc. (the Annual Meeting), and any postponements, adjournments or continuations thereof. The Annual Meeting will be held on Tuesday, June 14, 2022 at 1 p.m. Pacific Time virtually via a live webcast. You will be able to attend the Annual Meeting virtually by visiting www.virtualshareholdermeeting.com/ALXO2022, where you will be able to listen to the meeting live, submit questions and vote online by entering the control number on your proxy card.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

The information provided in the “question and answer” format below addresses certain frequently asked questions but is not intended to be a summary of all matters contained in this proxy statement. Please read the entire proxy statement carefully before voting your shares. Information contained on, or that can be accessed through, our website is not intended to be incorporated by reference into this proxy statement and references to our website address in this proxy statement are inactive textual references only.

Why am I receiving these materials?

Our board of directors is providing these proxy materials to you in connection with its solicitation of proxies for use at the Annual Meeting, which will take place on June 14, 2022. Stockholders are invited to attend the Annual Meeting and are requested to vote on the proposals described in this proxy statement. This proxy statement and the accompanying proxy card are being mailed on or about April 22, 2022 in connection with the solicitation of proxies on behalf of our board of directors. All stockholders will have the ability to access via the Internet this proxy statement and our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (the SEC) on February 28, 2022.

What proposals will be voted on at the Annual Meeting?

There are four proposals scheduled to be voted on at the Annual Meeting:

 

 

the election of Itziar Canamasas, Ph.D. and Jack Nielsen as Class II directors to serve until the 2025 annual meeting of stockholders or until their successors are duly elected and qualified;

 

 

 

an advisory vote to approve the compensation of our named executive officers;

 

 

 

an advisory vote on the frequency of future advisory votes to approve the compensation of our named executive officers; and

 

 

 

the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2022.

At the time this proxy statement was mailed, our management and board of directors were not aware of any other matters to be presented at the Annual Meeting other than those set forth in this proxy statement and in the notice accompanying this proxy statement.

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How does our board of directors recommend that I vote?

Our board of directors recommends that you vote:

 

 

FOR the election of each of Itziar Canamasas, Ph.D. and Jack Nielsen as Class II directors;

 

 

FOR the approval, on an advisory basis, of the compensation of our named executive officers;

 

 

EVERY YEAR for the frequency of future advisory votes on the compensation of our named executive officers; and

 

 

FOR the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2022.

Who is entitled to vote at the Annual Meeting?

Holders of our common stock at the close of business on April 18, 2022, the record date for the Annual Meeting (the Record Date), are entitled to notice of and to vote at the Annual Meeting. Each stockholder is entitled to one vote for each share of our common stock held as of the Record Date. As of the Record Date, there were 40,680,947 shares of common stock outstanding and entitled to vote. Stockholders are not permitted to cumulate votes with respect to the election of directors.

Stockholders of Record – Shares Registered in Your Name. If, at the close of business on the Record Date, your shares were registered directly in your name with Computershare Trust Company, N.A., our transfer agent, then you are considered the stockholder of record with respect to those shares, and this proxy statement was provided to you directly by us. As the stockholder of record, you have the right to grant your voting proxy directly to the individuals listed on the proxy card or to vote in person (including virtually) at the Annual Meeting. Throughout this proxy statement, we refer to these registered stockholders as “stockholders of record.”

Street Name Stockholders – Shares Registered in the Name of a Broker, Bank or Other Nominee. If, at the close of business on the Record Date, your shares were held, not in your name, but rather in a stock brokerage account or by a bank or other nominee on your behalf, then you are considered the beneficial owner of shares held in “street name,” and this proxy statement was forwarded to you by your broker or nominee, who is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank or other nominee how to vote your shares by following the voting instructions your broker, bank or other nominee provides. If you do not provide your broker, bank or other nominee with instructions on how to vote your shares, your broker, bank or other nominee may, in its discretion, vote your shares with respect to routine matters but may not vote your shares with respect to any non-routine matters. Throughout this proxy statement, we refer to stockholders who hold their shares through a broker, bank or other nominee as “street name stockholders.”

How many votes are needed for approval of each proposal?

 

 

Proposal No. 1: The election of each Class II director requires a plurality of the votes of the shares of our common stock present in person (including virtually) or represented by proxy at the Annual Meeting and entitled to vote thereon to be approved. “Plurality” means that the two nominees who receive the most votes cast FOR will be elected as Class II directors. You may (i) vote FOR all nominees, (ii) WITHHOLD your vote as to all nominees, or (iii) vote FOR all nominees except for those specific nominees from whom you WITHHOLD your vote. Any shares not voted FOR a particular nominee (whether as a result of voting withheld or a broker non-vote) will not be counted in such nominee’s favor and will have no effect on the outcome of the election.

 

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Proposal No. 2: The approval, on an advisory basis, of the compensation of our named executive officers requires an affirmative FOR vote of a majority of the shares of our common stock present in person (including virtually) or represented by proxy at the Annual Meeting and entitled to vote thereon to be approved. You may vote FOR, AGAINST or ABSTAIN. If you ABSTAIN from voting on Proposal No. 2, the abstention will have the same effect as a vote AGAINST the proposal. Broker non-votes will have no effect on the outcome of this proposal. Because this vote is advisory only, it will not be binding on us, our compensation committee or our board of directors. However, we value our stockholders’ input and will take the vote into consideration when evaluating executive compensation decisions.

 

 

 

Proposal No. 3: The frequency of future advisory votes on the compensation of our named executive officers receiving the greatest number of votes cast by stockholders will be considered the advisory vote of our stockholders. You may vote to hold such advisory votes EVERY YEAR, EVERY TWO YEARS or EVERY THREE YEARS, or you may ABSTAIN. Abstentions and broker non-votes will have no effect on the outcome of this proposal. Because this vote is advisory only in accordance with applicable laws, it will not be binding on us, our compensation committee or our board of directors. However, we value our stockholders’ input and will take the vote into consideration when determining the frequency of the advisory vote.

 

 

 

Proposal No. 4: The ratification of the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ended December 31, 2022 requires an affirmative FOR vote of a majority of the shares of our common stock present in person (including virtually) or represented by proxy at the Annual Meeting and entitled to vote thereon to be approved. You may vote FOR, AGAINST or ABSTAIN. If you ABSTAIN from voting on Proposal No. 4, the abstention will have the same effect as a vote AGAINST the proposal. Broker non-votes will have no effect on the outcome of this proposal.

 

 

What is a quorum?

A quorum is the minimum number of shares required to be present at the Annual Meeting for the annual meeting of stockholders to be properly held under our amended and restated bylaws (Bylaws) and Delaware law. A majority of the shares of common stock outstanding and entitled to vote, in person (including virtually) or by proxy, constitutes a quorum for the transaction of business at the Annual Meeting. Abstentions, withhold votes, and broker non-votes are counted as shares present and entitled to vote for purposes of determining a quorum. If there is no quorum, a majority of the shares present at the Annual Meeting may adjourn the meeting to a later date.

What do I need to do to attend the Annual Meeting?

You will be able to attend the Annual Meeting virtually, submit your questions during the meeting and vote your shares electronically at the meeting by visiting www.virtualshareholdermeeting.com/ALXO2022. To participate in the Annual Meeting, you will need the control number from your proxy card. The Annual Meeting webcast will begin promptly at 1 p.m. Pacific Time. We encourage you to access the meeting prior to the start time. Online check-in will begin at 12:45 p.m. Pacific Time, and you should allow ample time for the check-in procedures.

Why is the Annual Meeting held virtually?

Our board of directors believes that a virtual Annual Meeting allows for participation by a broader group of stockholders, reduces the costs to stockholders associated with holding an in-person meeting, and is the best option for ensuring the health and safety of the participants in light of the ongoing COVID-19 pandemic. The virtual meeting format is intended to facilitate a level of transparency as close as possible to an in-person meeting by providing for, among other things, the ability of stockholders to submit

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appropriate questions in advance of the meeting to ensure thoughtful responses from management and our board of directors.

How do I vote and what are the voting deadlines?

Stockholders of Record. If you are a stockholder of record, you can vote in one of the following ways:

 

 

You may vote via the Internet. To vote via the Internet prior to the Annual Meeting, go to http://www.proxyvote.com to complete an electronic proxy card. You will be asked to provide the control number from the proxy card you receive. Your vote must be received by 11:59 p.m. Eastern Time on June 13, 2022 to be counted. If you vote via the Internet prior to the Annual Meeting, you do not need to return a proxy card by mail.

 

 

 

You may vote by telephone. To vote by telephone, dial 1-800-690-6903 (toll-free in the United States and Canada; toll charges apply to calls from other countries) and follow the recorded instructions. You will be asked to provide the control number from the proxy card. Your vote must be received by 11:59 p.m. Eastern Time on June 13, 2022 to be counted. If you vote by telephone, you do not need to return a proxy card by mail.

 

 

 

You may vote by mail. To vote by mail, you need to complete, date and sign the proxy card that accompanies this proxy statement and return it promptly by mail in the enclosed postage-paid envelope so that it is received no later than June 13, 2022. You do not need to put a stamp on the enclosed envelope if you mail it from within the United States. The persons named in the proxy card will vote the shares you own in accordance with your instructions on the proxy card you mail. If you return the proxy card, but do not give any instructions on a particular matter to be voted on at the Annual Meeting, the persons named in the proxy card will vote the shares you own in accordance with the recommendations of our board of directors.

 

 

 

You may vote virtually during the Annual Meeting. If you plan to attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/ALXO2022, you may vote electronically and submit questions during the meeting. Please have your proxy card in hand when you visit the website.

Even if you plan to attend the Annual Meeting, we recommend that you also vote by proxy so that your vote will be counted if you later decide not to attend the Annual Meeting.

Street Name Stockholders. If you are the beneficial owner of shares held of record by a broker, bank or other nominee, you will receive voting instructions from your broker, bank or other nominee. You must follow the voting instructions provided by your broker, bank or other nominee in order to instruct your broker, bank or other nominee how to vote your shares. The availability of Internet and telephone voting options will depend on the voting process of your broker, bank or other nominee. As discussed above, if you are a street name stockholder, you may not vote your shares live at the Annual Meeting unless you obtain a legal proxy from your broker, bank or other nominee.

Can I change my vote or revoke my proxy?

Stockholders of Record. If you are a stockholder of record, you may revoke your proxy or change your proxy instructions at any time before your proxy is voted at the Annual Meeting by:

 

 

 

entering a new vote by Internet or telephone;

 

 

 

signing and returning a new proxy card with a later date;

 

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delivering a written revocation to our Secretary at ALX Oncology Holdings Inc., 323 Allerton Avenue, South San Francisco, California 94080, by 11:59 p.m. Eastern Time on June 13, 2022; or

 

 

 

attending the Annual Meeting and voting in person (including virtually).

Street Name Stockholders. If you are a street name stockholder, you must contact the broker, bank or other nominee holding your shares and follow their instructions to change your vote or revoke your proxy.

What is the effect of giving a proxy?

Proxies are solicited by and on behalf of our board of directors. Jaume Pons, Ph.D., and Peter Garcia have been designated as proxy holders by our board of directors. When a proxy is properly dated, executed and returned, the shares represented by such proxy will be voted at the Annual Meeting in accordance with the instructions of the stockholder. If the proxy is dated and signed, but no specific instructions are given, the shares will be voted in accordance with the recommendations of our board of directors. If any matters not described in this proxy statement are properly presented at the Annual Meeting, the proxy holders will use their own judgment to determine how to vote your shares. If the Annual Meeting is postponed or adjourned, the proxy holders can vote your shares on the new meeting date, unless you have properly revoked your proxy, as described above.

What if I do not specify how my shares are to be voted?

Stockholders of Record. If you are a stockholder of record and you submit a proxy but you do not provide voting instructions, your shares will be voted:

 

 

FOR the election of each of the two directors nominated by our board of directors and named in this proxy statement as Class II directors (Proposal No. 1);

 

 

 

FOR the approval, on an advisory basis, of the compensation of our named executive officers (Proposal No. 2);

 

 

 

EVERY YEAR for the frequency of future advisory votes on the compensation of our named executive officers (Proposal No. 3);

 

 

 

FOR the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2022 (Proposal No. 4); and

 

 

 

In the discretion of the named proxy holders regarding any other matters properly presented for a vote at the Annual Meeting.

Street Name Stockholders. If you are a street name stockholder and you do not provide your broker, bank or other nominee that holds your shares with voting instructions, then your broker, bank or other nominee will determine if it has discretion to vote on each matter. Brokers do not have discretion to vote on non-routine matters. Proposal No. 1 (election of directors), Proposal No. 2 (approval, on an advisory basis, of the compensation of our named executive officers) and Proposal No. 3 (advisory vote on the frequency of future advisory votes on the compensation of our named executive officers) are non-routine matters, while Proposal No. 4 (ratification of the appointment of our independent registered public accounting firm) is a routine matter. As a result, if you do not provide voting instructions to your broker, bank or other nominee, then your broker, bank or other nominee may not vote your shares with respect to Proposal No. 1, Proposal No. 2 and Proposal No. 3, which would result in a “broker non-vote,” but may, in its discretion, vote your shares with respect to Proposal No. 4. For additional information regarding broker non-votes, see “—What are the effects of abstentions and broker non-votes?” below.

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What are the effects of abstentions and broker non-votes?

An abstention represents a stockholder’s affirmative choice to decline to vote on a proposal. If a stockholder indicates on its proxy card that it wishes to abstain from voting its shares, or if a broker, bank or other nominee holding its customers’ shares of record causes abstentions to be recorded for shares, these shares will be considered present and entitled to vote at the Annual Meeting. As a result, abstentions will be counted for purposes of determining the presence or absence of a quorum and will also count as votes against a proposal in cases where approval of the proposal requires the affirmative vote of a majority of the shares present and entitled to vote at the Annual Meeting (e.g., Proposal No. 2 and Proposal No. 4). However, because the outcome of Proposal No. 1 (election of directors) will be determined by a plurality vote, abstentions will have no impact on the outcome of such proposal as long as a quorum exists. Additionally, abstentions will have no impact on the outcome of Proposal No. 3.

A broker non-vote occurs when a broker, bank or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker, bank or other nominee does not have discretionary voting power with respect to such proposal and has not received voting instructions from the beneficial owner of the shares. Broker non-votes will be counted for purposes of calculating whether a quorum is present at the Annual Meeting but will not be counted for purposes of determining the number of votes cast. Therefore, a broker non-vote will make a quorum more readily attainable but will not otherwise affect the outcome of the vote on any proposal.

How are proxies solicited for the Annual Meeting and who is paying for such solicitation?

Our board of directors is soliciting proxies for use at the Annual Meeting by means of the proxy materials. We will bear the entire cost of proxy solicitation, including the preparation, assembly, printing, mailing and distribution of the proxy materials. Copies of solicitation materials will also be made available upon request to brokers, banks and other nominees to forward to the beneficial owners of the shares held of record by such brokers, banks or other nominees. The original solicitation of proxies may be supplemented by solicitation by telephone, electronic communication or other means by our directors, officers, employees or agents. No additional compensation will be paid to these individuals for any such services, although we may reimburse such individuals for their reasonable out-of-pocket expenses in connection with such solicitation. We do not plan to retain a proxy solicitor to assist in the solicitation of proxies.

If you choose to access the proxy materials and/or vote over the Internet, you are responsible for Internet access charges you may incur. If you choose to vote by telephone, you are responsible for telephone charges you may incur.

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

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

 

Is my vote confidential?

Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either within the Company or to third parties, except as necessary to meet applicable legal requirements, to allow for the tabulation of votes and certification of the vote, or to facilitate a successful proxy solicitation.

I share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials?

We have adopted a procedure approved by the SEC called “householding,” under which we can deliver a single copy of the proxy materials and annual report to multiple stockholders who share the same address unless we received contrary instructions from one or more of the stockholders. This procedure

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reduces our printing and mailing costs. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written or oral request, we will promptly deliver a separate copy of the proxy materials and annual report to any stockholder at a shared address to which we delivered a single copy of any of these documents. To receive a separate copy, or, if you are receiving multiple copies, to request that we only send a single copy of next year’s proxy materials and annual report, you may contact us as follows:

ALX Oncology Holdings Inc.

Attention: Secretary

323 Allerton Avenue

South San Francisco, California 94080

(650) 466-7125

Stockholders who hold shares in street name may contact their brokerage firm, bank, broker-dealer or other nominee to request information about householding.

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

We will announce preliminary voting results at the Annual Meeting. In addition, we will disclose final voting results on 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, we will file an amendment to the Form 8-K to disclose the final results.

What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders or to nominate individuals to serve as directors?

Stockholder Proposals or Director Nominations

Stockholders may present proper proposals for inclusion in our proxy statement and for consideration at next year’s annual meeting of stockholders by submitting their proposals in writing to our Secretary in a timely manner. For a stockholder proposal to be considered for inclusion in our proxy statement for our 2023 annual meeting of stockholders, our Secretary must receive the written proposal at our principal executive offices not later than December 23, 2022. In addition, stockholder proposals must comply with the requirements of Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the Exchange Act), regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Stockholder proposals should be addressed to:

ALX Oncology Holdings Inc.

Attention: Secretary

323 Allerton Avenue

South San Francisco, California 94080

 

Our Bylaws also establish an advance notice procedure for stockholders who wish to present a proposal or nominate a director at an annual meeting of stockholders but do not intend for the proposal or director nominee to be included in our proxy statement. Our Bylaws provide that the only business that may be conducted at an annual meeting is business that is (i) specified in our proxy materials with respect to such meeting, (ii) otherwise properly brought before the annual meeting by or at the direction of the our board of directors, or (iii) properly brought before the annual meeting by a stockholder of record entitled to vote at the annual meeting who has delivered timely written notice to our Secretary, which notice must contain the information specified in our Bylaws. To be timely for our 2023 annual meeting of stockholders, our Secretary must receive the written notice at our principal executive offices:

 

 

not earlier than February 6, 2023; and

 

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not later than March 8, 2023.

In the event that we hold our 2023 annual meeting of stockholders more than 30 days before or more than 60 days after the first anniversary of the date of the Annual Meeting, then notice of a stockholder proposal that is not intended to be included in our proxy statement must be received no earlier than the close of business on the 120th day before such annual meeting and no later than the close of business on the later of the following two dates:

 

 

the 90th day prior to such annual meeting; or

 

 

 

the 10th day following the day on which public announcement of the date of such annual meeting is first made.

If a stockholder who has notified us of his, her or its intention to present a proposal at an annual meeting does not appear to present his, her or its proposal at such annual meeting, we are not required to present the proposal for a vote at such annual meeting.

Availability of Bylaws

A copy of our Bylaws may be obtained by accessing our public filings on the SEC’s website at http://www.sec.gov. You may also contact our Secretary at our principal executive office for a copy of the relevant provisions in our Bylaws regarding the requirements for making stockholder proposals and nominating director candidates.

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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Our business affairs are managed under the direction of our board of directors, which currently consists of seven members. Our board of directors has affirmatively determined that five of our seven directors qualify as “independent” within the meaning of the listing standards of the Nasdaq Stock Market LLC. Our board of directors is divided into three classes with staggered three-year terms. At each annual meeting of stockholders, a class of director(s) will be elected for a three-year term to succeed the same class whose term is then expiring.

Upon the recommendation of our corporate governance and nominating committee, we are nominating Itziar Canamasas, Ph.D. and Jack Nielsen as Class II directors at the Annual Meeting. If elected, Dr. Canamasas and Mr. Nielsen will each hold office for a three-year term until the annual meeting of stockholders to be held in 2025 or until their successors are duly elected and qualified.

The following table sets forth the names, ages and certain other information, including the composition of the committees, as of the date of this proxy statement, for each of the directors with terms expiring at the Annual Meeting (who are also nominees for election as a director at the Annual Meeting), and for each of the continuing directors:

 

Name

 

Class

 

Age

 

Position

 

Director Since

 

Current Term Expires

 

Expiration of Term For Which Nominated

Director Nominees

 

 

 

 

 

 

 

 

 

 

 

 

Itziar Canamasas, Ph.D. (3)

 

II

 

48

 

Director

 

2022

 

2022

 

2025

Jack Nielsen, Ph.D.(1)(2)

 

II

 

58

 

Director

 

2020

 

2022

 

2025

Continuing Directors

 

 

 

 

 

 

 

 

 

 

 

 

Jaume Pons, Ph.D.

 

III

 

56

 

President, Chief Executive Officer and Director

 

2015

 

2023

 

Rekha Hemrajani(1)(3)

 

III

 

52

 

Director

 

2020

 

2023

 

Corey Goodman, Ph.D.(2)(3)

 

I

 

70

 

Executive Chairman

 

2015

 

2024

 

Jason Lettmann (1)(2)(3)

 

I

 

44

 

Director

 

2020

 

2024

 

Sophia Randolph, M.D., Ph.D.

 

I

 

54

 

Chief Medical Officer and Director

 

2021

 

2024

 

 

(1)
Member of our audit committee
(2)
Member of our compensation committee
(3)
Member of our corporate governance and nominating committee

 

Director Nominees

Itziar Canamasas, Ph.D. has served as a member of our board of directors since April, 2022. Dr. Canamasas is currently the Head of Oncology EMEA, with responsibility for the commercial success of Oncology in the Region for Bayer Consumer Care AG, Switzerland, a subsidiary of Bayer AG. She has previously served as Managing Director and Country Head of Pharmaceuticals for Bayer Ltd, Ireland, a subsidiary of Bayer AG from May 2017 to July 2020 and prior to that, as VP of Global Marketing Oncology for Bayer Corporation, USA, a subsidiary of Bayer AG. Since 2021, Dr. Canamasas has served as the Organizational Development Director for the Ambassador Program of the Healthcare Businesswomen’s Association. She previously served on the board for Bayer Ltd, a subsidiary of Bayer AG. Dr. Canamasas holds a Llicenciatura in Biology from Universitat de Barcelona and a Ph.D. in Biology, with a focus on Tumor Genetics from Johannes Gutenberg-Universität Mainz.

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We believe Dr. Canamasas is qualified to serve on our board of directors because of her scientific knowledge, commercial and marketing experience and the breadth and depth of her management and leadership experience in the biotechnology and oncology sectors.

Jack Nielsen has served as a member of our board of directors since February 2020. Mr. Nielsen has served as a Managing Director at Vivo Capital LLC, a healthcare focused investment firm, since August 2017 and was promoted to Managing Partner in March 2021. He previously served as a consultant from March 2017 to July 2017. From 2001 to February 2017, Mr. Nielsen was with the Novo A/S (Novozymes) organization and its venture activities in several roles, most recently as a Senior Partner based in Copenhagen, Denmark. From May 2006 to August 2012, Mr. Nielsen was a Partner at Novo Ventures (US) in San Francisco, where he established the office that provides certain consultancy services to Novo A/S. He currently serves as a member of the board of directors of Aligos Therapeutics Inc., a biotechnology company, Harmony Biosciences Holdings Inc., a pharmaceutical company, InstilBio, a clinical-stage cell therapy company, IO Biotech, a clinical-stage biopharmaceutical company, and Reata Pharmaceuticals, a pharmaceutical company and previously served as a director of Akebia Therapeutics, Apollo Endosurgery, Crinetics Pharmaceuticals and Merus, N.V. Mr. Nielsen holds an M.Sc. in Chemical Engineering from the Technical University of Denmark and a Masters in Management of Technology from Center for Technology, Economics and Management, Technical University of Denmark.

We believe Mr. Nielsen is qualified to serve on our board of directors because of his experience working in the biotechnology industry, his experience as a venture capital investor and his board service for several companies in the biotechnology sector.

Continuing Directors

Jaume Pons, Ph.D. has served as our President, Chief Executive Officer and as a member of our board of directors since April 2015. He has also served as a Scientific Advisor at Lightstone Ventures, a venture capital fund, since January 2019 and as a Venture Partner at venBio Partners, a venture capital firm, since January 2017. Prior to joining us, Dr. Pons was with Pfizer, Inc., a biopharmaceutical company, where he served as Senior Vice President and a member of the Pfizer Worldwide Research and Development Leadership Team and Chief Technology Officer for Pfizer Biotherapeutics from September 2009 to February 2015. From October 2007 to February 2015, he served as Chief Scientific Officer at Rinat Neuroscience Corporation, a subsidiary of Pfizer. Dr. Pons holds a B.S. in Biochemistry from Autonomous University of Barcelona and an M.S. in Biotechnology and a Ph.D. in Molecular and Cell Biology from the Institute on Fundamental Biology, Barcelona (Autonomous University of Barcelona).

We believe Dr. Pons is qualified to serve on our board of directors because of the perspective and experience he brings as our Chief Executive Officer, his experience in leadership positions in the biotechnology industry, his educational background and his strong scientific expertise.

Rekha Hemrajani has served as a member of our board of directors since April 2020. She is currently Chief Executive Officer and Director of Jiya Acquisition Corporation. She previously served as President and Chief Executive Officer of Aravive, Inc., a clinical-stage biotechnology company, from January 2020 to April 2020. From March 2019 to September 2019, Ms. Hemrajani served as the Chief Operating Officer and Chief Financial Officer of Arcus Biosciences, a biotechnology company. From March 2016 to March 2019, she served as Chief Operating Officer of FLX Bio, Inc. (now RAPT Therapeutics, Inc.), a biotechnology company. From February 2015 to March 2016, Ms. Hemrajani served as Chief Financial Officer and Senior Vice President of Business and Financial Operations at 3-V Biosciences, Inc. (now Sagimet Biosciences, Inc.), a biotechnology company. From November 2013 to January 2015, Ms. Hemrajani advised privately held companies on strategic corporate development and financing activities at Ravinia Consulting, a consulting firm she founded. She currently serves as a director of Jiya Acquisition Corp., a special purpose acquisition company, MaxCyte, Inc., a provider of cell-engineering platform technologies, and a privately-held company and previously served as a director of Adverum Biotechnologies, Inc. and Aravive, Inc. She holds a B.S. in Economics and Computer Science from the University of Michigan and an MBA from the Kellogg Graduate School of Management at Northwestern University.

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We believe Ms. Hemrajani is qualified to serve on our board of directors due to her executive and financial experience at multiple companies in the biopharmaceutical and biotechnology industries.

Corey Goodman, Ph.D. is our co-founder and has served as a member of our board of directors and as Executive Chairman since March 2015. He co-founded and has served as a Managing Partner of venBio Partners since March 2010. Dr. Goodman founded Labrys, a biopharmaceutical company acquired by Teva, where he served as chairman and as a member of the board of directors from December 2012 to June 2014. He founded Pfizer’s Biotherapeutics and Bioinnovation Center where he served as President and a member of Pfizer’s Executive Leadership Team from October 2007 until May 2009. He co-founded Renovis, a biopharmaceutical company acquired by Evotec, where he served as President, Chief Executive Officer and a director from September 2001 to October 2007. He is a former tenured biology professor at both Stanford University and the University of California, Berkeley, the co-founder of U.C. Berkeley’s Wills Neuroscience Institute, Investigator with the Howard Hughes Medical Institute and currently is an adjunct professor at U.C. Berkeley. Dr. Goodman is a member of the U.S. National Academy of Sciences, the American Academy of Arts & Sciences and the American Philosophical Society and a recipient of the 2020 Gruber Neuroscience Prize. He currently serves as chairman and as a member of the board of directors of several privately held biotechnology companies. Dr. Goodman holds a B.S. in Biology from Stanford University and a Ph.D. in Neurobiology from U.C. Berkeley and was a postdoctoral fellow at the University of California, San Diego.

We believe Dr. Goodman is qualified to serve on our board of directors due to his experience founding and managing biotechnology companies in both the private and public markets.

Jason Lettmann has served as a member of our board of directors since April 2020 and previously served as a member of our board of directors from March 2015 to May 2017. Mr. Lettmann has served as a General Partner of Lightstone Ventures since March 2012 and as a Partner at Morgenthaler Ventures, a venture capital and private equity firm, since June 2009. He previously served as Chief Executive Officer of Promedior Inc., a biotechnology company acquired by Roche, from January 2019 to February 2020 and as a Vice President at Split Rock Partners, a venture capital firm, from June 2006 to June 2009. Mr. Lettmann currently serves as a member of the board of directors of several privately-held companies and previously served as a director of Ra Pharmaceuticals, a clinical-stage pharmaceutical company acquired by UCB. Mr. Lettmann holds a B.A. in Psychology from the University of Iowa and an M.B.A. from the University of Michigan’s Ross School of Business.

We believe Mr. Lettmann is qualified to serve on our board of directors because of his industry experience, his experience serving on the boards of directors for multiple life sciences companies and his extensive experience with venture capital investments.

Sophia Randolph, M.D., Ph.D. has served as our Chief Medical Officer since June 2016 and as a member of our board of directors since March 2021. Prior to joining us, she was with Pfizer Oncology Early and Late Development Groups from June 2008 to April 2016, where she served most recently as Executive Director, Oncology from June 2015 to April 2016. From June 2007 to May 2008, Dr. Randolph served as Director, Clinical Sciences, Oncology at Merck, a pharmaceutical company. She holds an A.B. in Biochemistry from Harvard University and an M.D. and a Ph.D. in Cellular and Molecular Biology from the University of Michigan. Dr. Randolph completed her oncology fellowship training at Seattle Cancer Care Alliance/Fred Hutchinson Cancer Research Center.

We believe Dr. Randolph is qualified to serve on our board of directors because of her medical expertise and her extensive experience within the pharmaceutical and biotechnology sector.

Family Relationships

There are no family relationships among any of our directors or executive officers.

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Director Independence

Our common stock is listed on the Nasdaq Global Select Market (Nasdaq). Under the rules of Nasdaq, independent directors must comprise a majority of a listed company’s board of directors within one year of the completion of its initial public offering. In addition, the rules of Nasdaq require that, subject to specified exceptions, each member of a listed company’s audit, compensation and corporate governance and nominating committees be independent. Audit committee members and compensation committee members must also satisfy the independence criteria set forth in Rule 10A-3 and Rule 10C-1, respectively, under the Exchange Act. Under the rules of Nasdaq, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

To be considered to be independent for purposes of Rule 10A-3 and under the rules of Nasdaq, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors or any other board committee: (1) accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries or (2) be an affiliated person of the listed company or any of its subsidiaries.

To be considered independent for purposes of Rule 10C-1 and under the rules of Nasdaq, the board of directors must affirmatively determine that each member of the compensation committee is independent, including a consideration of all factors specifically relevant to determining whether the director has a relationship to the company which is material to that director’s ability to be independent from management in connection with the duties of a compensation committee member, including, but not limited to: (1) the source of compensation of such director, including any consulting, advisory or other compensatory fee paid by the company to such director and (2) whether such director is affiliated with the company, a subsidiary of the company or an affiliate of a subsidiary of the company.

Our board of directors undertook a review of its composition, the composition of its committees and the independence of our directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon information requested from and provided by each director concerning his background, employment and affiliations, including family relationships, our board of directors has determined that Drs. Canamasas and Goodman, Messrs. Lettmann and Nielsen and Ms. Hemrajani., representing five of our seven directors, do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the rules of Nasdaq.

In making these determinations, our board of directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director, and the transactions involving them described in the section titled “Certain Relationships and Related-Party Transactions.” There are no family relationships among any of our directors or executive officers.

 

Board Leadership Structure

Our board of directors is currently chaired by Dr. Goodman. As a general policy, our board of directors believes that separation of the positions of Executive Chairman of our board of directors and Chief Executive Officer reinforces the independence of our board of directors from management, creates an environment that encourages objective oversight of management’s performance and enhances the effectiveness of our board of directors as a whole. As such, Dr. Pons serves as our Chief Executive Officer while Dr. Goodman serves as the Executive Chairman of our board of directors but is not an officer. We currently expect and intend the positions of Executive Chairman of our board of directors and Chief Executive Officer to continue to be held by two individuals in the future.

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Board Diversity

 

Diversity is important to us, and we have always had diversity across the company. We recognize the benefits associated with a diverse mix of individuals within our board of directors, including a diversity of experience, backgrounds, gender, race, ethnicity, sexual orientation and age.

 

The corporate governance and nominating committee is committed to continuing to identify and recruit highly qualified director candidates with diverse experiences, perspectives, and backgrounds to join our board of directors. The table below provides certain information regarding the composition of our board of directors. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f). As demonstrated by the board diversity matrix, the Company is compliant with the diversity requirements of Nasdaq Rule 5605(f).

 

Board Diversity Matrix (As of December 31, 2021)

Total Number of Directors

6

 

Female

Male

Non-Binary

Did Not
 Disclose Gender

Part I: Gender Identity

 

Directors

2

2

-

2

Part II: Demographic Background

 

 

African American or Black

1

-

-

-

Alaskan Native or Native American

-

-

-

-

Asian

1

-

-

-

Hispanic or Latinx

-

1

-

-

Native Hawaiian or Pacific Islander

-

-

-

-

White

-

1

-

-

Two or More Races or Ethnicities

-

-

-

-

LGBTQ+

-

Did Not Disclose Demographic Background

2

 

Role of the Board in Risk Oversight

Our board of directors has an active role, as a whole and also at the committee level, in overseeing the management of our risks. Our board of directors is responsible for general oversight of risks and regular review of information regarding our risks, including credit risks, liquidity risks, cybersecurity risks and operational risks. The compensation committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. The audit committee is responsible for overseeing the management of risks relating to accounting matters and financial reporting. The corporate governance and nominating committee is responsible for overseeing the management of risks associated with the independence of our board of directors and potential conflicts of interest. Although each committee is responsible for evaluating certain risks and overseeing the management of such risks, our entire board of directors is regularly informed through discussions from committee members about such risks. Our board of directors believes its administration of its risk oversight function has not negatively affected the board of directors’ leadership structure.

 

Environmental, Social and Governance (ESG) Practices

We recognize that environmental, social and governance issues are of increasing importance to our investors, employees and other stakeholders. We are committed to ethical, responsible and sustainable business practices. Corporate social responsibility is an enterprise-wide commitment. Our management team and board of directors are working together to oversee the Company’s efforts to prioritize and integrate ESG considerations into the Company’s business practices and corporate culture.

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Diversity & Inclusion

 

We are committed to creating and maintaining a workplace free from discrimination or harassment on the basis of color, race, sex, national origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression or any other status protected by applicable law. Our management team and employees are expected to exhibit and promote honest, ethical and respectful conduct in the workplace. All of our employees must adhere to our code of conduct that sets standards for appropriate behavior and we have implemented specific policies designed to prevent, identify, report and stop any type of discrimination and harassment. Our recruitment, hiring, development, training, compensation and advancement at our company is based on qualifications, performance, skills and experience without regard to gender, race and ethnicity.

 

Competitive Pay & Benefits and Pay Equity

 

We strive to provide competitive and robust compensation and benefits programs that help meet the varying needs of our employees, and we are committed to pay equity, based on gender or race/ethnicity. Our total rewards package includes competitive pay, comprehensive healthcare benefits package for employees, family medical leave and flexible work schedules. In addition, we offer every full-time employee, both exempt and non-exempt, the benefit of equity ownership in the company through stock option grants, restricted stock unit grants, and our employee stock purchase plan. We offer a 401(k) plan and we match employee contributions up to a certain limit.

 

Employee Development & Training

 

The competition for talent in our industry and in the San Francisco Bay Area where our headquarters is located is significant. As a result, our commitment to investing in human capital is of critical importance to ensure our ability to attract, develop and maintain key talent to support the growth of our business. We emphasize employee development and training. We have a performance development review process in which managers provide regular feedback to assist with the development of our employees, including the use of individual plans to assist with career development.

 

Safety

The safety, health and wellness of our employees is a top priority. In response to COVID-19, we have implemented safety protocols, including limiting onsite activities to essential staff during periods of increased regional COVID-19 infection rates, routine screening for employees and others visiting the site, contact tracing and appropriate protocols to address any known exposures, increased cleaning procedures and readily available hand sanitizer stations, and additional controls based on case rates and local requirements including the wearing of masks and for social distancing. These protocols are designed to maintain the health and safety of our employees and comply with health and safety standards as required by federal, state and local government agencies, taking into consideration guidelines of the Centers for Disease Control and Prevention and other public health authorities.

Committees of our Board of Directors

Our board of directors has established an audit committee, a compensation committee, and a corporate governance and nominating committee. The composition and responsibilities of each of the committees of our board of directors are described below. Members serve on these committees until their resignation or until otherwise determined by our board of directors. Our board of directors may establish other committees as it deems necessary or appropriate from time to time.

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Audit Committee

Our audit committee consists of Ms. Hemrajani and Messrs. Lettmann and Nielsen. Ms. Hemrajani is the chair of our audit committee and is our audit committee financial expert, as that term is defined under the SEC rules implementing Section 407 of SOX, and possesses financial sophistication, as defined under the rules of Nasdaq. Our board of directors has determined that each of the members of our audit committee satisfies the independence requirements under the listing standards of Nasdaq and Rule 10A-3 of the Exchange Act. Our audit committee oversees our corporate accounting and financial reporting process and assists our board of directors in monitoring our financial systems. Our audit committee also:

 

 

selects and hires the independent registered public accounting firm to audit our consolidated financial statements;

 

 

 

helps to ensure the independence and evaluate the performance of the registered public accounting firm;

 

 

 

approves audit and non-audit services and fees;

 

 

 

reviews our consolidated financial statements and discusses with management and the independent registered public accounting firm our annual audited and quarterly reviewed consolidated financial statements, the results of the independent audit and the quarterly reviews and the reports and certifications regarding internal controls over financial reporting and disclosure controls;

 

 

 

prepares the audit committee report that the SEC requires to be included in our annual proxy statement;

 

 

 

reviews reports and communications from the independent registered public accounting firm;

 

 

 

reviews the adequacy and effectiveness of our internal controls and disclosure controls and procedure;

 

 

 

reviews our policies on risk assessment and risk management;

 

 

 

reviews and monitors conflicts of interest situations, and approves or prohibits any involvement in matters that may involve a conflict of interest or taking of a corporate opportunity;

 

 

 

reviews related party transactions; and

 

 

 

establishes and oversees procedures for the receipt, retention and treatment of accounting related complaints and the confidential submission by our employees of concerns regarding questionable accounting or auditing matters.

Our audit committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of Nasdaq. A copy of the charter for our audit committee is available on our investor relations website at https://ir.alxoncology.com/. During 2021, our audit committee held four meetings.

Compensation Committee

Our compensation committee consists of Dr. Goodman and Messrs. Lettmann and Nielsen. Dr. Goodman is the chair of our compensation committee. Our board of directors has determined that each of the members of our compensation committee is independent under the listing standards of Nasdaq and a

15


 

“non-employee director” as defined in Rule 16b-3 under the Exchange Act. Our compensation committee oversees our compensation policies, plans, and benefits programs. The compensation committee also:

 

 

oversees our overall compensation philosophy and compensation policies, plans and benefit programs;

 

 

 

reviews and approves, or recommends to the board of directors for approval, the compensation of our executive officers and directors;

 

 

 

prepares the compensation committee report that the SEC requires to be included in our annual proxy statement; and

 

 

 

administers our equity compensation plans.

Our compensation committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of Nasdaq. A copy of the charter for our compensation committee is available on our investor relations website at https://ir.alxoncology.com/. During 2021, our compensation committee held two meetings.

Corporate Governance and Nominating Committee

Our corporate governance and nominating committee currently consists of Mr. Lettmann, Drs. Canamasas and Goodman and Ms. Hemrajani. Mr. Lettmann is the chair of our corporate governance and nominating committee. Dr. Canamasas was appointed to the corporate governance and nominating committee in April 2022. Our board of directors has determined that each member of our corporate governance and nominating committee is independent under the listing standards of Nasdaq.

 

Our corporate governance and nominating committee oversees and assists our board of directors in reviewing and recommending nominees for election as directors. Specifically, the corporate governance and nominating committee:

 

 

identifies, evaluates, and makes recommendations to our board of directors regarding nominees for election to our board of directors and its committees;

 

 

 

considers and makes recommendations to our board of directors regarding the composition of our board of directors and its committees;

 

 

 

reviews developments in corporate governance practices;

 

 

 

evaluates the adequacy of our corporate governance practices and reporting; and

 

 

 

evaluates the performance of our board of directors and of individual directors.

Our corporate governance and nominating committee operates under a written charter that satisfies the listing standards of Nasdaq. A copy of the charter for our corporate governance and nominating committee is available on our investor relations website at https://ir.alxoncology.com/. During 2021, our corporate governance and nominating committee held no formal meetings.

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Attendance at Board and Stockholder Meetings

During our fiscal year ended December 31, 2021, our board of directors held eight meetings (including regularly scheduled and special meetings), and each director attended at least 75% of the aggregate of (i) the total number of meetings of our board of directors held during the period for which he or she has been a director and (ii) the total number of meetings held by all committees of our board of directors on which he or she served during the periods that he or she served on such committee.

Although we do not have a formal policy regarding attendance by members of our board of directors at annual meetings of stockholders, we strongly encourage, but do not require, our directors to attend. This is our second annual meeting of stockholders. Six of our seven then-current directors attended our 2021 annual meeting of stockholders.

Compensation Committee Interlocks and Insider Participation

During 2021, Dr. Goodman and Messrs. Lettmann and Nielsen served on our compensation committee. None of the members of our compensation committee is or has been an officer or employee of our company. None of our executive officers currently serves, or in the past fiscal year has served, as a member of the board of directors or compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of any entity that has one or more executive officers serving on our board of directors or compensation committee.

Considerations in Evaluating Director Nominees

Our corporate governance and nominating committee uses a variety of methods, including engaging the services of outside consultants and search firms, to identify and evaluate director nominees. In its evaluation of director candidates, our corporate governance and nominating committee will consider the current size and composition of our board of directors and the needs of our board of directors and the respective committees of our board of directors. Some of the qualifications that our corporate governance and nominating committee considers include such factors as character, integrity, judgment, diversity (including, without limitation, diversity in terms of gender, race, ethnicity and experience), age, independence, skills, education, expertise, business acumen, corporate experience, length of service, understanding of our business and other commitments, among other things. Nominees must also have the highest personal and professional ethics and integrity and skills that are complementary to those of the existing directors. Director candidates must have the ability to assist and support management and make significant contributions to our success based on proven achievement and competence in the nominee’s field and the ability to exercise sound business judgment. Nominees must also have an understanding of the fiduciary responsibilities that are required of a member of our board of directors and the commitment of time and energy necessary to diligently carry out those responsibilities. Members of our board of directors are expected to prepare for, attend, and participate in all board of directors and applicable committee meetings. Our corporate governance and nominating committee may also consider such other factors as it may deem, from time to time, are in our and our stockholders’ best interests.

The corporate governance and nominating committee considers the suitability of each director candidate, including current directors, in light of the current size and composition of our board. Although our board of directors does not maintain a specific policy with respect to board diversity, our board of directors believes that our board of directors should be a diverse body, and our corporate governance and nominating committee considers a broad range of backgrounds and experiences. In making determinations regarding nominations of directors, our corporate governance and nominating committee may take into account the benefits of diverse viewpoints. Our corporate governance and nominating committee also considers these and other factors as it oversees the annual board of director and committee evaluations. After completing its review and evaluation of director candidates, our corporate governance and nominating committee recommends to our full board of directors the director nominees for selection.

17


 

Stockholder Recommendations for Nominations to the Board of Directors

 

Our corporate governance and nominating committee will consider director candidates recommended by stockholders holding no less than $2,000 in market value, or one percent (1%), of the outstanding shares of our common stock continuously for at least 12 months prior to the date of the submission of the recommendation or nomination, as long as such recommendations or nominations comply with our amended and restated certificate of incorporation, Bylaws, policies and procedures for director candidates, and applicable laws, rules and regulations, including those promulgated by the SEC. Our corporate governance and nominating committee will evaluate such recommendations in accordance with its charter, our Bylaws and our policies and procedures for director candidates, as well as the regular director nominee criteria described above. This process is designed to ensure that our board of directors includes members with diverse backgrounds, skills and experience, including appropriate financial and other expertise relevant to our business. Eligible stockholders wishing to recommend a candidate for nomination should contact our Secretary in writing. Such recommendations must include information about the candidate, including the principal occupation or employment of the candidate; a statement of support executed by the candidate acknowledging that as a director of the corporation, the nominee will owe a fiduciary duty under Delaware law with respect to the corporation and its stockholders; evidence of the recommending stockholder’s ownership of our capital stock; a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nominations are to be made by the stockholder; and any additional information required by our Bylaws and our policies and procedures for director candidates. Our corporate governance and nominating committee has discretion to decide which individuals to recommend for nomination as directors.

Communications with the Board of Directors

Interested parties wishing to communicate with non-management members of our board of directors may do so by writing and mailing the correspondence to our Secretary at ALX Oncology Holdings Inc., 323 Allerton Avenue, South San Francisco, California 94080. Our Secretary monitors these communications and will provide a summary of all received bona fide messages to our board of directors at each regularly scheduled meeting of our board of directors. Where the nature of a communication warrants, our Secretary may determine, in his or her judgment, to obtain the more immediate attention of the appropriate committee of the board of directors or non-management director, of independent advisors or of our management.

This procedure does not apply to (a) communications to non-management directors from officers or directors who are stockholders, (b) stockholder proposals submitted pursuant to Rule 14a-8 under the Exchange Act or (c) communications to our audit committee pursuant to our complaint procedures for accounting and auditing matters.

Corporate Governance Guidelines and Code of Business Conduct and Ethics

Our board of directors has adopted Corporate Governance Guidelines that address items such as the qualifications and responsibilities of our directors and director candidates and corporate governance policies and standards applicable to us in general. In addition, our board of directors has adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including our Chief Executive Officer, Chief Financial Officer and other executive and senior financial officers. The full text of our Corporate Governance Guidelines and our Code of Business Conduct and Ethics is posted on our investor relations website at https://ir.alxoncology.com/. We will post any amendments to our Code of Business Conduct and Ethics and any waivers of our Code of Business Conduct and Ethics for directors and executive officers on the same website or in filings under the Exchange Act.

 

18


 

Director Compensation

In July 2020, our board of directors adopted, and our stockholders approved, an Outside Director Compensation Policy that provides for certain compensation to our non-employee directors. This policy was developed with input from our compensation committee’s independent compensation consultant, Compensia, regarding practices and compensation levels at comparable companies. It is designed to attract, retain and reward non-employee directors.

Under the outside director compensation policy, each non-employee director receives the cash and equity compensation for his or her services as a member of our board of directors, as described below.

Cash Compensation

The Outside Director Compensation Policy provides for the following cash compensation program for our non-employee directors:

 

 

$40,000 per year for service as a non-employee director;

 

 

 

$30,000 per year for service as non-employee chair of our board of directors;

 

 

 

$20,000 per year for service as chair of the audit committee;

 

 

 

$7,500 per year for service as a member of the audit committee;

 

 

 

$10,000 per year for service as chair of the compensation committee;

 

 

 

$5,000 per year for service as a member of the compensation committee;

 

 

 

$8,000 per year for service as chair of the corporate governance and nominating committee; and

 

 

 

$4,000 per year for service as a member of the corporate governance and nominating committee

Each non-employee director who serves as a committee chair will receive only the cash retainer fee as the chair of the committee but not the cash retainer fee as a member of that committee. These fees to our non-employee directors are paid quarterly in arrears on a prorated basis. Under our Outside Director Compensation Policy, we also will reimburse our non-employee directors for reasonable travel expenses to attend meetings of our board of directors and its committees.

Equity Compensation

Initial Award. Pursuant to our Outside Director Compensation Policy, each person who first becomes a non-employee director after the effective date of such policy will receive, on the first trading day on or after the date that the person first becomes a non-employee director, an initial award, or the Initial Award, of stock options to purchase 24,009 shares of our common stock. The Initial Award will be scheduled to vest in equal installments as to one thirty-sixth of the shares of our common stock subject at grant to the Initial Award on a monthly basis following the Initial Award’s grant date, on the same day of the month as the grant date, subject to continued services to us through the applicable vesting dates. If the person was a member of our board of directors and also an employee, then becoming a non-employee director due to termination of employment will not entitle the person to an Initial Award.

19


 

Annual Award. Pursuant to our Outside Director Compensation Policy, each non-employee director automatically will receive, on the first trading day immediately after the date of each annual meeting of our stockholders that occurs following the effective date of our Outside Director Compensation Policy, an annual award, or the Annual Award, of stock options to purchase 12,004 shares of our common stock, with such number of shares prorated if the recipient commenced service as a non-employee director after the date of the immediately prior annual meeting of our stockholders, based on the number of whole months of non-employee director service completed before the Annual Award’s grant date. Each Annual Award will be scheduled to vest as to one-twelfth of the shares of our common stock subject at grant to the Annual Award on a monthly basis following the Annual Award’s grant date, on the same day of the month as the grant date, or if earlier, the day immediately before the day of the next annual meeting of stockholders that occurs after the grant date of the Annual Award, subject to continued services to us through the applicable vesting dates.

Change in Control. In the event of a change in control, as defined in our Amended and Restated 2020 Equity Incentive Plan, each non-employee director’s then outstanding equity awards covering shares of our common stock will accelerate vesting in full, provided that he or she remains a non-employee director through the date of our change in control.

Other Award Terms. Each Initial Award and Annual Award will be granted under our Amended and Restated 2020 Equity Incentive Plan (or its successor plan, as applicable) and form of award agreement under such plan. These awards will have a maximum term to expiration of ten years from their grant and a per-share exercise price equal to 100% of the fair market value of a share of our common stock on the award’s grant date.

Director Compensation Limits. Our Outside Director Compensation Policy provides that in any fiscal year, a non-employee director may be paid cash compensation and granted equity awards with an aggregate value of no more than $1,000,000 (with the value of equity awards based on its grant date fair value determined in accordance with U.S. GAAP for purposes of this limit). Equity awards granted or other compensation provided to a non-employee director while he or she was an employee or consultant (other than a non-employee director), or granted or provided before the effective date of the registration statement related to our initial public offering, do not count toward this annual limit.

2021 Compensation

Directors who are also our employees receive no additional compensation for their service as directors. During 2021, Drs. Pons and Randolph were employees and executive officers of the Company and did not receive compensation as directors. See the section titled “Executive Compensation” for additional information about Dr. Pons’ and Dr. Randolph’s compensation for the year ended December 31, 2021.

20


 

The following table presents the total compensation each of our non-employee directors received during the year ended December 31, 2021. Other than as set forth in the table, we did not pay any compensation, make any equity awards or non-equity awards to or pay any other compensation to any of our non-employee directors in 2021.

 

Name

 

Fees Earned
or Paid in
Cash ($)

 

 

Option
Awards
($)(1)

 

 

Total ($)

 

Corey Goodman, Ph.D.

 

 

84,000

 

 

 

480,962

 

 

 

564,962

 

Rekha Hemrajani

 

 

64,000

 

 

 

480,962

 

 

 

544,962

 

Jason Lettmann

 

 

55,601

 

 

 

480,962

 

 

 

536,563

 

Jack Nielsen

 

 

52,500

 

 

 

480,962

 

 

 

533,462

 

Graham Walmsley, M.D., Ph.D.(2)

 

 

33,641

 

 

 

480,962

 

 

 

514,603

 

 

(1)

This column reflects the aggregate grant date fair value of option awards granted to the officer in the applicable fiscal year, computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 718, Compensation—Stock Compensation (Topic 718). See Note 9 to our financial statements for the year ended December 31, 2021 included in our Annual Report on Form 10-K for the year ended December 31, 2021 for a discussion of the assumptions made by us in determining the grant date fair value of our equity awards. Our named executive officers will only realize compensation to the extent the trading price of our common stock is greater than the exercise price of such stock options.

(2)

Dr. Walmsley resigned from our board of directors on August 26, 2021.

The following table lists all outstanding equity awards held by non-employee directors as of December 31, 2021:

 

 

 

 

 

Option Awards

Name

 

Date of
Grant

 

Number of
Securities
Underlying
Exercisable Options

 

 

Number of
Securities
Underlying
Unexercisable
Options

 

 

 

Option
Exercise
Price ($)

 

 

Option
Expiration
Date

Corey Goodman, Ph.D.

 

06/11/21

 

 

6,002

 

 

 

6,002

 

 

(3

)

 

59.66

 

 

06/10/31

 

 

07/16/20

 

 

11,337

 

 

 

12,672

 

 

(1

)

 

19.00

 

 

07/16/30

Rekha Hemrajani

 

06/11/21

 

 

6,002

 

 

 

6,002

 

 

(3

)

 

59.66

 

 

06/10/31

 

 

04/30/20

 

 

36,407

 

 

 

50,971

 

 

(2

)

 

4.81

 

 

04/30/30

Jason Lettmann

 

06/11/21

 

 

6,002

 

 

 

6,002

 

 

(3

)

 

59.66

 

 

06/10/31

 

 

07/16/20

 

 

11,337

 

 

 

12,672

 

 

(1

)

 

19.00

 

 

07/16/30

Jack Nielsen

 

06/11/21

 

 

6,002

 

 

 

6,002

 

 

(3

)

 

59.66

 

 

06/10/31

 

 

07/16/20

 

 

11,337

 

 

 

12,672

 

 

(1

)

 

19.00

 

 

07/16/30

Graham Walmsley, M.D. Ph.D.(4)

 

06/11/21

 

 

2,000

 

 

 

 

 

 

 

59.66

 

 

06/10/31

 

 

07/16/20

 

 

8,669

 

 

 

 

 

 

 

19.00

 

 

07/16/30

 

(1)

Shares subject to the option vest in 36 equal monthly installments beginning on August 16, 2020 subject to continued service through each such vesting date.

(2)

1/4th of the shares subject to the option vested on April 27, 2021 and 1/36th of the remaining shares subject to the option vest monthly thereafter subject to continued service through each such vesting date.

(3)

Shares subject to the option vest in 12 equal monthly installments on the same day of month of grant date, or if earlier, the day immediately before the day of the next annual meeting of stockholders, subject to continued service through each such vesting date.

(4)

Dr. Walmsley resigned from our board of directors on August 26, 2021.

 

21


 

PROPOSAL NO. 1

ELECTION OF DIRECTORS

Our board of directors is currently composed of seven members. In accordance with our amended and restated certificate of incorporation, our board of directors is divided into three classes with staggered three-year terms. At the Annual Meeting, two Class II directors will be elected for a three-year term to succeed the same class whose term is then expiring.

Each director’s term continues until the election and qualification of such director’s successor, or such director’s earlier death, resignation or removal. Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of our directors. This classification of our board of directors may have the effect of delaying or preventing changes in control of our company.

Nominees

Our corporate governance and nominating committee has recommended, and our board of directors has approved, Itziar Canamasas, Ph.D. and Jack Nielsen as nominees for election as Class II directors at the Annual Meeting. If elected, each of Dr. Canamasas and Mr. Nielsen will serve as a Class II director until the 2025 annual meeting of stockholders or until his or her successor is duly elected and qualified. Dr. Canamasas and Mr. Nielsen are currently directors of our company, and each has agreed to being named in this proxy statement as a nominee. For information concerning the nominees, please see the section titled “Board of Directors and Corporate Governance.”

If you are a stockholder of record and you sign your proxy card or vote over the Internet or by telephone but do not give instructions with respect to the voting of directors, your shares will be voted FOR the election of Dr. Canamasas and Mr. Nielsen. If you are a street name stockholder of shares of our common stock and you do not give voting instructions to your broker, bank or other nominee, then your broker, bank or other nominee will leave your shares unvoted on this matter. We expect that Dr. Canamasas and Mr. Nielsen will accept such nomination; however, in the event that a director nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee who shall be designated by our board of directors to fill such vacancy.

Vote Required

The election of Class II directors requires a plurality of the votes of the shares of our common stock present in person (including virtually) or represented by proxy at the Annual Meeting and entitled to vote thereon to be approved. “Plurality” means that the two nominees who receive the most votes cast ‘FOR’ will be elected as Class II directors. As a result, any shares not voted ‘FOR’ a particular nominee (whether as a result of voting withheld or a broker non-vote) will not be counted in such nominee’s favor and will have no effect on the outcome of the election.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE TWO NOMINEES NAMED ABOVE AS CLASS II DIRECTORS TO SERVE FOR A THREE-YEAR TERM.

22


 

PROPOSAL NO. 2

ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

This stockholder advisory vote, commonly known as “say-on-pay,” is required pursuant to Section 14A of the Exchange Act and gives our stockholders the opportunity to approve or not approve, on a non-binding advisory basis, the compensation paid to our Chief Executive Officer and the other executive officers named in the Summary Compensation Table (named executive officers) as disclosed in this proxy statement.

The Board recommends a vote “FOR” the following resolution:

“RESOLVED, that the stockholders of ALX Oncology Holdings Inc. approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the proxy statement, including the Compensation Discussion and Analysis, the compensation tables and any related narrative discussion.”

We became a public company in July 2020 and since that time we have made important changes to our executive compensation program to reflect our transition from a private to public company. This is the first time we have included an advisory “say-on-pay” vote at the annual meeting of the stockholders, as our board of directors believes that stockholders will now be able to provide more meaningful feedback regarding the effectiveness of our executive compensation program and its relation to business outcomes of our company. Each year we intend to submit the executive compensation of our named executive officers to an advisory vote at our annual meeting of stockholders.

The Compensation Discussion and Analysis, beginning on page 20, describes our executive compensation programs and the compensation decisions made by our compensation committee and board of directors for the fiscal year ended December 31, 2021 with respect to the named executive officers. As described in detail in the Compensation Discussion and Analysis and highlighted in the section titled “Executive Summary,” our compensation committee believes that the most effective compensation program is designed to provide a substantial portion of executive compensation in the form of variable, at-risk pay which is earned based on performance. Our compensation committee thoughtfully employs the primary compensation elements of base salary, annual cash incentives, and long-term equity awards, to achieve these objectives.

Our board of directors is asking you to support this proposal. Because this vote is advisory, it will not be binding on us, our compensation committee or our board of directors. However, our compensation committee and our board of directors will review the voting results in their entirety and take them into consideration when making future decisions regarding named executive officer compensation.

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”

THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THE PROXY STATEMENT.

23


 

PROPOSAL NO. 3

ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON

THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

In accordance with The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Section 14A of the Exchange Act, we must provide our stockholders with the opportunity to make a non-binding, advisory vote on the frequency of future advisory votes on named executive officer compensation (“say-on-frequency” vote). The non-binding, advisory “say-on-frequency” vote must be submitted to our stockholders at least once every six years.

We are asking stockholders to indicate whether they prefer to cast future advisory votes on named executive officer compensation “EVERY YEAR,” “EVERY TWO YEARS” or “EVERY THREE YEARS.” Stockholders may also abstain from voting on this proposal. The frequency that receives the greatest number of votes cast by stockholders will be considered the advisory vote of our stockholders.

Our board of directors values the opinions of our stockholders and will consider the result of the “say-on-frequency” vote in determining the frequency with which we will hold future advisory votes on named executive officer compensation. However, the “say-on-frequency” vote is not binding. Our board of directors may determine that it is in the best interests of the company and our stockholders to hold an advisory vote on named executive officer compensation more or less frequently than the frequency that is selected by our stockholders.

After careful consideration, our board of directors recommends that future non-binding advisory votes on the compensation of our named executive officers be held every year.

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR “EVERY YEAR”

ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON

THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

24


 

PROPOSAL NO. 4

RATIFICATION OF APPOINTMENT OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Our audit committee has appointed KPMG LLP, an independent registered public accounting firm, to audit our financial statements for our fiscal year ending December 31, 2022. KPMG LLP has served as our independent registered public accounting firm since 2016.

At the Annual Meeting, our stockholders are being asked to ratify the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2022. Stockholder ratification of the appointment of KPMG LLP is not required by our Bylaws or other applicable legal requirements. However, our board of directors is submitting the appointment of KPMG LLP to our stockholders for ratification as a matter of good corporate governance. In the event that this appointment is not ratified by the affirmative vote of a majority of the shares present in person (including virtually) or represented by proxy at the Annual Meeting and entitled to vote, such appointment will be reconsidered by our audit committee. Even if the appointment is ratified, our audit committee, in its sole discretion, may appoint another independent registered public accounting firm at any time during our fiscal year ending December 31, 2022 if our audit committee believes that such a change would be in the best interests our company and our stockholders. A representative of KPMG LLP is expected to be present at the Annual Meeting, will have an opportunity to make a statement if he or she wishes to do so, and is expected to be available to respond to appropriate questions from stockholders.

Fees Paid to the Independent Registered Public Accounting Firm

The following table presents fees for professional audit services and other services rendered to us by KPMG LLP for our fiscal years ended December 31, 2021 and 2020.

 

 

 

2021

 

 

2020

 

Audit Fees(1)

 

$

1,188,530

 

 

$

1,381,242

 

Audit-Related Fees

 

 

 

 

 

 

Tax Fees(2)

 

 

6,320

 

 

 

43,116

 

All Other Fees

 

 

 

 

 

1,780

 

Total Fees

 

$

1,194,850

 

 

$

1,426,138

 

 

(1)

“Audit fees” represent fees billed for professional services rendered for the audits of our annual consolidated financial statements, audit of internal controls, quarterly reviews of our consolidated financial statements, statutory audits, reviews of documents filed with the SEC, registration statements and comfort letters.

(2)

“Tax Fees” consist of fees billed for professional services rendered by KPMG LLP for tax compliance, tax advice and tax planning.

Auditor Independence

In our fiscal year ended December 31, 2021, there were no other professional services provided by KPMG LLP that would have required our audit committee to consider their compatibility with maintaining the independence of KPMG LLP.

25


 

Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

Our audit committee has established a policy governing our use of the services of our independent registered public accounting firm. Under the policy, our audit committee is required to pre-approve all audit and permissible non-audit services performed by our independent registered public accounting firm in order to ensure that the provision of such services does not impair such accounting firm’s independence. All services provided by KPMG LLP for our fiscal years ended December 31, 2021 and December 31, 2020 were pre-approved by our audit committee.

Vote Required

The ratification of the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2022 requires the affirmative vote of a majority of the shares of our common stock present in person (including virtually) or represented by proxy at the Annual Meeting and entitled to vote thereon. Abstentions will have the effect of a vote AGAINST this proposal, and broker non-votes will have no effect.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR OUR FISCAL YEAR ENDING DECEMBER 31, 2022.

26


 

AUDIT COMMITTEE REPORT

The audit committee is a committee of the board of directors comprised solely of independent directors as required by the listing standards of the Nasdaq Stock Market LLC and the rules and regulations of the Securities and Exchange Commission (the SEC). The composition of the audit committee, the attributes of its members and the responsibilities of the audit committee, as reflected in its charter, are intended to be in accordance with applicable requirements for corporate audit committees. The audit committee operates under a written charter approved by the board of directors, which is available on our website at https://ir.alxoncology.com/. The audit committee reviews and assesses the adequacy of its charter and the audit committee’s performance on an annual basis.

With respect to the Company’s financial reporting process, the Company’s management is responsible for (1) establishing and maintaining internal controls and (2) preparing the Company’s financial statements. The Company’s independent registered public accounting firm, KPMG LLP (KPMG), is responsible for performing an independent audit of the Company’s financial statements. It is the responsibility of the audit committee to oversee these activities. It is not the responsibility of the audit committee to prepare the Company’s financial statements. These are the fundamental responsibilities of management.

In the performance of its oversight function, the audit committee has:

 

 

reviewed and discussed the audited financial statements with management and KPMG;

 

 

 

discussed with KPMG the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC; and

 

 

 

received the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the audit committee concerning independence and has discussed with KPMG its independence.

Based on the audit committee’s review and discussions with management and KPMG, the audit committee recommended to the board of directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for filing with the SEC.

Respectfully submitted by the members of the audit committee of the board of directors:

Rekha Hemrajani (Chair)

Jason Lettmann

Jack Nielsen

This report of the audit committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended (the Securities Act), or under the Securities Exchange Act of 1934, as amended (the Exchange Act), except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act.

27


 

EXECUTIVE OFFICERS

The following table sets forth certain information about our executive officers as of March 31, 2022. Officers are elected by our board of directors to hold office until their successors are elected and qualified.

 

Name

 

Age

 

Position

Jaume Pons, Ph.D.

 

56

 

Chief Executive Officer, President and Director

Peter Garcia

 

60

 

Chief Financial Officer

Sophia Randolph, M.D., Ph.D.

 

54

 

Chief Medical Officer and Director

Shelly Pinto

 

46

 

Vice President, Finance and Chief Accounting Officer

For the biography of Dr. Pons, please see “Board of Directors and Corporate Governance—Continuing Directors.

 

Peter Garcia has served as our Chief Financial Officer since January 2020. Prior to joining us, he served as Vice President and Chief Financial Officer from May 2013 until August 2019 and as Acting Chief Accounting Officer from May 2013 until July 2013 at PDL BioPharma, Inc., an acquirer of royalties and pharmaceutical assets. From October 2011 to May 2013, Mr. Garcia served as Chief Financial Officer at BioTime, Inc., a clinical-stage biotechnology company now known as Lineage Cell Therapeutics. He previously served as Chief Financial Officer of six biotechnology and high technology companies, including Marina Biotech, Nanosys, Nuvelo, Novacept, IntraBiotics Pharmaceuticals and Dendreon. Mr. Garcia currently serves as a member of the board of directors of DURECT Corporation, a biopharmaceutical company. He holds a B.A. in Economics and Sociology from Stanford University and an M.B.A. from the University of California, Los Angeles.

For the biography of Dr. Randolph, please see “Board of Directors and Corporate Governance—Continuing Directors.”

Shelly Pinto has served as our Vice President, Finance and Chief Accounting Officer since May 2021. Prior to joining us, she was with Tizona Therapeutics, Inc. from July 2016 to April 2021, where she served most recently as Vice President of Finance and Operations from October 2020 to April 2021. Ms. Pinto was the Controller at InSite Vision Inc. from December 2008 to July 2016, the Assistant Controller at Bare Escentuals, Inc. from May 2007 to November 2008, and Director of Corporate Accounting and Financial Reporting at Dreyer’s Grand Ice Cream Holdings, Inc. from March 2002 to May 2007. Ms. Pinto started her career within the audit practice at Deloitte and Touche LLP after graduating with a B.S.B.A. in Accounting from Montana State University.

28


 

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (CD&A) describes the principles underlying the material components of our executive compensation program for our executive officers, including the named executive officers in the “Summary Compensation Table.” We also provide an overview of the overall objectives of the program and the factors relevant to an analysis of these policies and decisions and how we use our executive compensation program to drive our performance.

Named Executive Officers

Our named executive officers (or NEOs) for the year ended December 31, 2021 are:

 

 

 

Name

 

Title

Jaume Pons, Ph.D.

 

President and Chief Executive Officer

Peter Garcia

 

Chief Financial Officer

Sophia Randolph, M.D., Ph.D.

 

Chief Medical Officer

Shelly Pinto(1)

 

Vice President, Finance and Chief Accounting Officer

Steffen Pietzke(2)

 

Former Vice President, Finance and Chief Accounting Officer

 

(1) Ms. Pinto was appointed as the Company’s Vice President, Finance and Chief Accounting Officer on May 3, 2021.

(2) Mr. Pietzke resigned as the Company’s Vice President, Finance and Chief Accounting Officer on March 31, 2021.

Executive Summary

Company Background and 2021 Business Highlights

We are a clinical-stage immuno-oncology company focused on helping patients fight cancer by developing therapies that block the CD47 checkpoint pathway and bridge the innate and adaptive immune system. Cancer cells leverage CD47, a cell surface protein, as a “don’t eat me” signal to evade detection by the immune system. Our company is developing a next-generation checkpoint inhibitor designed to have a high affinity for CD47 and to avoid the limitations caused by hematologic toxicities inherent in other CD47 blocking approaches. We believe our lead product candidate, evorpacept (also known as ALX148), will have a wide therapeutic window to block the “don’t eat me” signal on cancer cells, and to leverage the immune activation of broadly used anti-cancer agents through combination strategies.

Our executive compensation program seeks to incentivize and reward strong corporate performance. Highlights of our 2021 corporate performance and executive compensation program are set forth below.

Clinical and Regulatory

 

 

We dosed over 185 subjects with evorpacept across a range of hematologic and solid malignancies in combination with a number of leading anti-cancer agents. We plan to initiate additional studies in combination with leading anti-cancer agents.

 

 

 

In hematologic malignancies, we dosed 13 subjects for the treatment of myelodysplastic syndromes, or MDS, during 2021 and advanced evorpacept into clinical development for the treatment of acute myeloid leukemia, or AML, enrolling the first patient in a Phase 1 trial in October 2021.

 

29


 

 

 

In solid tumors, we have initiated two randomized Phase 2 trials of evorpacept for the treatment of first-line head and neck squamous cell carcinoma, or HNSCC, and dosed the first subject in the first trial in May 2021, and dosed the first subject in the second trial in July 2021. Our collaborator, Zymeworks, also initiated a Phase 1 trial for the treatment of advanced HER2-expressing breast cancer and enrolled the first subject in October 2021.

 

 

 

In October 2021, we acquired ScalmiBio, a company specializing protein engineering and oncology in order to expand our pipeline of drug candidates.

Corporate Financings

 

 

In December 2021, we entered into a Sales Agreement with Cantor Fitzgerald & Co. and Credit Suisse Securities (USA) LLC, pursuant to which we may offer and sell from time to time up to $150 million of shares of our common stock through at-the-market offerings.

 

 

From inception through December 31, 2021, we have raised an aggregate of $545.3 million to fund our operations, of which $175.1 million were net proceeds from sales of our convertible preferred stock, $5.8 million were net proceeds from borrowings under a term loan, $169.5 million were net proceeds from our initial public offering and $194.9 million were net proceeds from our follow-on public offering.

We have made significant progress on developing evorpacept, advancing preclinical programs, scaling up manufacturing, conducting clinical trials and providing administrative support for these operations and other internal corporate goals.

Overview of Executive Compensation Program

Our executive compensation program is designed to be competitive and appropriately balance our goals of attracting, engaging and retaining our executive officers and driving company performance. To align our executive officers’ interests with those of our stockholders and to motivate and reward individual initiative and effort, a substantial portion of each executive officer’s total target annual direct compensation opportunity (that is, base salary, target annual cash incentives, and equity awards) is “at-risk,” meaning the amounts paid to each executive officer will vary based on our Company performance and their contributions to that performance.

Consistent with our philosophy of aligning executive pay with the short- and long-term performance of the Company, and to align the interests of management and stockholders, the Company’s compensation programs are designed to provide the majority of executive compensation in the form of variable, at-risk pay. Our compensation committee thoughtfully employs the primary compensation elements of base salary, short-term annual cash incentives, and long-term equity awards, to achieve these objectives.

30


 

In 2021, these primary elements of compensation for our Chief Executive Officer (CEO) and for our other NEOs comprised the following portions of their total target annual direct compensation:

img247672129_4.jpg img247672129_5.jpg 

The percentages above were calculated using base salary, target annual cash incentive compensation, and the grant date fair value of stock options. The percentages shown in the graph above for our NEOs other than our CEO are averages of the percentages applicable to the compensation element for each such NEO, other than our Former Vice President, Finance and Chief Accounting Officer, who did not remain eligible for any short-term annual cash incentive, or receive any equity awards, for 2021. The percentages for our current Vice President, Finance and Chief Accounting Officer, who was appointed on May 3, 2021, are not prorated. Similar to our industry-based peers, we rely on stock option grants for our NEOs’ equity-based compensation because they do not provide realizable value to the holder unless stockholders also benefit from a stock price increase.

Executive Compensation Governance

With guidance from an independent compensation consultant, Compensia, we maintain sound compensation and governance standards, and we adopt best practices in establishing and administering policies in support of these standards. The compensation committee evaluates our executive compensation program regularly to ensure that it supports our short-term and long-term goals to compete for executive talent as well as protect our stockholders’ interests.

Our pay-for-performance philosophy and compensation governance practices provide an appropriate framework to our executives to achieve our strategic goals without encouraging them to take excessive risks in their business decisions. Some of our practices include:

31


 

 

 

 

 

 

What We Do

 

 

 

Pay for performance philosophy and culture

 

 

 

Promote closer alignment of compensation with stockholder interests

 

 

 

Use relevant peer group to assist with setting pay

 

 

 

Balanced mix of fixed and at-risk pay

 

 

 

Robust anti-hedging and pledging policies

 

 

 

Retain an independent compensation consultant

 

 

 

What We Don’t Do

 

 

x

 

Provide excessive severance payments

 

 

x

 

Provide excessive perquisites

 

 

x

 

Provide tax gross-ups for any golden parachute payments

 

 

x

 

Provide special retirement plans for executive officers

 

Stockholder Engagement

The Company is committed to engagement with stockholders. We will review any feedback we receive from our stockholders about our executive compensation program to ensure that we understand key matters of interest to them, and to enable us to take that feedback into consideration for our compensation decisions.

Compensation Philosophy

The goals of our executive compensation program are to attract, engage, and retain executive officers who share our vision and are deeply connected to our mission. Our overall compensation philosophy is market-based and enables our executive officers to share in the Company’s long-term success. We strive to incentivize these executive officers to achieve our short-term and long-term business objectives in order to increase long-term value and increase stockholder value. Our program combines competitive cash and equity award opportunities in the forms and proportions that we believe will motivate our executive officers to increase stockholder value over the long-term. We routinely review our policies and program design.

 

Our executive compensation program delivers excellent rewards in line with individual and company performance using the following specific compensation methods:

 

 

paying competitive base salaries;

 

 

 

rewarding our teams with a short-term incentive bonus plan opportunity; and

 

 

 

awarding a higher percentage of target total direct compensation opportunity as long-term equity incentives to more closely align employee and stockholder interests over the long-term.

 

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“Say-on-Pay” Voting

In the prior year, we were an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended. Therefore, we were not required to hold a non-binding, advisory vote on the compensation of our named executive officers. At this annual general meeting, we will hold our first “say-on-pay” vote. Our compensation committee and our board of directors will consider the result of the “say-on-pay” vote, and the related “say-on-frequency” vote, as well as feedback received throughout the year, when making compensation decisions for our executive officers in the future because we value the opinions of our stockholders.

Compensation Determination Process

Role of Compensation Committee and Board of Directors

Our compensation committee is responsible for overseeing the total compensation of our executive officers. In this capacity, our compensation committee designs, implements, reviews, and approves all compensation for our CEO and our other executive officers. The compensation committee formally met two times during fiscal year 2021 to review and discuss matters related to compensation of our employees and executive officers and acted by written consent 1 time during fiscal year 2021. Some of these meetings were held with members of management in attendance and some were held in closed session. Most of the meetings also included representatives from our compensation consultant (as described below). Typically, the compensation committee reports to the board of directors on its discussions and on occasion seeks input from the board of directors regarding the decisions to be made and other actions to be taken with regard to our executive officers’ compensation. Our compensation committee’s recommendations regarding executive compensation are based on the compensation committee’s assessment of the performance of the Company and each individual executive officer, as well as other factors, such as prevailing industry trends and the competitive market for executive talent. The compensation committee makes the final decisions regarding executive compensation.

Role of Management

In 2021, our CEO and CFO made recommendations to our compensation committee, attended certain compensation committee meetings and were involved in the process for determining our executive officers’ compensation, provided that neither our CEO or CFO made recommendations as to their own compensation or participated in compensation committee discussion of their own compensation. Our compensation committee considers management’s recommendations but is not required to follow any recommendations and may adjust compensation up or down as it determines in its discretion. Our compensation committee reviews the recommendations and other data and makes decisions as to each executive officer’s total compensation, as well as each individual pay component. During both compensation committee meetings in 2021, the compensation committee met in executive sessions and the Company’s CEO and CFO were not present during such sessions.

Role of Independent Compensation Consultant

Our compensation committee is authorized to retain the services of one or more executive compensation advisors, as it sees fit, in connection with the establishment of our compensation programs and related policies. In 2021, our compensation committee retained Compensia as its independent compensation consultant to provide it with information, recommendations, and other advice relating to executive compensation on an ongoing basis. Accordingly, Compensia serves at the discretion of our compensation committee. Our compensation committee engaged Compensia to assist in developing an appropriate group of peer companies, to help us determine the appropriate level of overall compensation for our executive officers, as well as assess each separate element of compensation, with a goal of ensuring that the compensation we offer to our executive officers is competitive and fair.

Our compensation committee periodically considers and assesses Compensia’s independence, including whether Compensia has any potential conflicts of interest with our company or members of our compensation committee. In connection with Compensia’s engagement, our compensation committee

33


 

conducted such a review and concluded that it was not aware of any conflict of interest that had been raised by work performed by Compensia or the individual consultants employed by Compensia that perform services for our compensation committee.

Use of Peer Group

The compensation committee approves a peer group of companies as a reference group, based upon the analysis and recommendations of Compensia, to provide a broad perspective on competitive pay levels and practices. The peers are reviewed on an annual basis in light of the dynamic environment within our company and the industry more broadly. We undertake this review with Compensia, who also provides competitive market analysis of the base salary, annual cash incentive awards and long-term incentive compensation of our executive officers compared against our compensation peer group and reviews other market practices and trends.

2020 Peer Group

In June 2020, the compensation committee approved a peer group for use in assisting it with base salary and annual target bonus decisions. The compensation committee used the following criteria in determining the appropriate peers:

 

 

 

Industry Sector and Product Focus— Biotechnology and pharmaceutical companies;

 

 

 

Stage— Pre-commercial, developmental-stage companies with a focus on Phase 1, Phase 2 and Phase 3 companies;

 

 

 

Market Capitalization— Range of approximately $300 million to $1.2 billion;

 

 

 

Employee Headcount— Up to 393 employees; and

 

 

 

Location— Primarily Biotechnology hub markets

Based on these criteria and considerations, our peer group for 2020, referred to as our 2020 peer group, as approved by our compensation committee, consisted of the following 18 companies:

 

Arcus Biosciences

Harpoon Therapeutics

NextCure

Atara Biotherapeutics

ImmunoGen

Replimune Group

Atreca

Krystal Biotech

Rocket Pharmaceuticals

Calithera Biosciences

Kura Oncology

Syros Pharmaceuticals

Cue Biopharma

Mersana Therapeutics

Trillium Therapeutics

CytomX Therapeutics

Molecular Templates

Ziopharm Oncology

 

2021 Peer Group

In May 2021, the compensation committee approved a peer group for use in assisting it with base salary and annual target bonus decisions. The compensation committee used the following criteria in determining the appropriate peers:

 

 

Industry Sector and Product Focus— Biotechnology and pharmaceutical companies;

 

 

 

Stage— Pre-commercial, developmental-stage companies with a focus on Phase 1, Phase 1/2, Phase 2 and Phase 3 companies;

 

 

 

Market Capitalization— Range of approximately $1 billion to $5 billion;

 

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Employee Headcount— Up to 437 employees; and

 

 

 

Location— Primarily Biotechnology hub markets (San Francisco, Bay Area, San Diego, East Coast Area, etc.)

Based on these criteria and considerations, our peer group for 2021, referred to as our 2021 peer group, as approved by our compensation committee, consisted of the following 20 companies:

 

Allogene Therapeutics

Krystal Biotech

Rubius Therapeutics

Arcus Biosciences

Kura Oncology

SpringWorks Therapeutics

Arvinas

Mersana Therapeutics

Trillium Therapeutics

Atara Biotherapies

Relay Therapeutics

Turning Point Therapeutics

IGM Biosciences

Replimune Group

Xencor

ImmunoGen

Revolution Medicines

Zentalis Pharmaceuticals

Iovance Biotherpeutics

Rocket Pharmaceuticals

 

 

In setting compensation for our executive officers, including our named executive officers, the compensation committee uses competitive compensation data from an annual total compensation study of selected peer companies and relevant survey sources to inform its decisions about overall compensation opportunities and specific compensation elements. However, the compensation committee uses our compensation peer group as one data point when setting executive pay packages. In addition, our compensation decisions are based on the consideration of many factors, including, but not limited to, individual and company performance, internal equity, experience, and strategic needs. As a result of evaluating compensation based on the criteria described above, total target compensation for our named executive officers may in certain circumstances be above or below the target levels of the peer group.

35


 

 

Pay Components

The Company’s executive compensation program consists of three primary elements: base salaries, annual cash incentives, and long-term equity awards:

 

Compensation Element

 

Purpose

 

 

 

Key Features

 

 

 

 

Base Salary

 

•  To attract and retain highly skilled executives

 

 

 

•  Fixed component of pay to provide financial stability, based on responsibilities, experience, individual contributions, and peer company data

 

 

 

 

Annual Cash Incentive Program

 

•  To promote and reward the achievement of key short-term strategic and business goals of the Company as well as individual performance;

•  To motivate and attract executives

 

 

 

•  Variable component of pay based on annual quantitative and qualitative performance assessment against objectives related to corporate, program-specific, and functional goals

 

 

 

 

Equity Incentive Compensation

 

•   To encourage executives and other employees to focus on long-term company performance;

•  To promote retention;

•  To reward outstanding company and individual performance

 

 

 

•  Delivered in the form of stock options, subject to multi-year vesting based on continued service. The value of these awards depends on the performance of our common stock price, in order to align employee and executive interests with those of our stockholders over the longer term

Our Company is committed to a strong performance orientation in our compensation program and effective corporate governance practices for a company at our development stage and industry.

Base Salary

Base salary provides competitive pay to attract and retain our executives. Annual salary decisions are made in recognition of competitive data as well as the skills and experience that each individual brings to the Company and the performance contributions each makes.

Base salary changes in 2021 varied by executive due either to merit increases or market adjustments. Other factors were considered such as tenure, experience, and the role of the individual. For our named executive officers who served in such role for the full year, each officer received a 3.0% increase due to a merit increase/market adjustment.

36


 

The 2021 base salaries for our named executive officers were as follows and were effective on January 1, 2021 except as noted below. The compensation committee did not consider any of the salary increases for our named executive officers to be material changes, as they generally reflect inflation-based adjustments.

 

Name

 

2021
Base Salary (1)

 

 

Base
Salary as of 2020 Fiscal Year End(1)

 

 

% Increase

 

Jaume Pons, Ph.D.

 

$

566,500

 

 

$

550,000

 

 

 

3.0

%

Peter Garcia

 

$

453,200

 

 

$

440,000

 

 

 

3.0

%

Sophia Randolph, M.D., Ph.D.

 

$

453,200

 

 

$

440,000

 

 

 

3.0

%

Shelly Pinto(2)

 

$

340,000

 

 

n/a

 

 

 

 

 

(1)
Represents the highest annualized base salary established for the named executive officer during the year indicated.
(2)
Ms. Pinto was appointed as the Company’s Vice President, Finance and Chief Accounting Officer on May 3, 2021. The 2021 Base Salary set forth above represents the annualized salary set in connection with and effective as of such appointment.

 

Annual Cash Incentive Program

We maintain an Executive Incentive Compensation Plan (Incentive Compensation Plan), pursuant to which our named executive officers are eligible to receive cash incentive awards. The Incentive Compensation Plan is designed to provide a financial incentive to reward executives for the achievement of a series of program specific, pipeline, and functional corporate goals. Payments under the plan are ultimately based on achievement of these pre-established corporate goals. Actual performance against targets, as measured by these pre-established corporate goals, funds the incentive payouts. The total bonus payout cannot exceed the total amount of funding in the pool. Annual target bonuses are set based on factors such as the executive’s past contributions, tenure, experience, and role and the annual target bonuses provided by companies in our compensation peer group to their similarly situated executives. Bonuses are typically paid in the month following the end of the performance period.

For 2021, the compensation committee maintained Dr. Pons’ annual target bonus of 50% of his annual base salary. The annual target bonus target for each of our other NEOs, as a percentage of the NEO’s base salary, remained at 40%.

Bonuses for all employees, including our named executive officers, for the fiscal year ended December 31, 2021 were allocated from a bonus pool funded based on performance against a number of high-impact, cross-functional goals. The project goals related to specific programs, trials, and corporate progress. The cross-functional goals included goals related to business development, positioning for future growth, and development and other functional goals. The combination of the project and cross-functional goals was intended to drive both specific technical achievement and continue to build the foundation for future company growth and advancements.

For 2021, the Company established five key corporate objectives: (i) advance clinical trial collaborations, (ii) advance the clinical pipeline, (iii) ensure supply of applicable materials, (iv) advance manufacturing runs, and (v) implement systems to meet corporate needs, which are viewed as critical drivers of our long-term success and ability to generate sustained growth in stockholder value. Our corporate goals are intended to drive these key objectives, by establishing specific, measurable criteria that could be used to evaluate the performance of our executive team and the Company in general. We believe that if these goals are achieved, it will have a direct impact on creating value for our stockholders.

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Each goal is measured individually, and the percent of goals achieved determines the 2021 bonus payout, subject to the compensation committee’s discretion to alter bonus funding and payouts. The 2021 performance bonuses were earned based upon achievement of such performance goals, as follows:

 

Performance Objective

 

% Weighting

 

Advance clinical trial collaborations

 

 

10

%

Advance the clinical pipeline

 

 

65

%

Ensure supply of applicable materials

 

 

10

%

Advance manufacturing runs

 

 

5

%

Implement systems to meet corporate needs

 

 

10

%

Total

 

 

100

%

 

In addition, the Company established certain bonus goals. In January 2022, the compensation committee reviewed the progress against the applicable 2021 goals. Based on the Company’s achievement of these goals (including bonus goals), the compensation committee funded the Company’s bonus pool at 100% of target levels.

 

The resulting bonuses to named executive officers were as follows:

 

Named Executive Officer

 

2021 Base Salary

 

 

Annual Target Bonus
(% of base)

 

 

2021
Earned
Bonus

 

Jaume Pons, Ph.D.

 

$

566,500

 

 

 

50

%

 

$

283,250

 

Peter Garcia

 

$

453,200

 

 

 

40

%

 

$

181,280

 

Sophia Randolph, M.D., Ph.D.

 

$

453,200

 

 

 

40

%

 

$

181,280

 

Shelly Pinto(1)

 

$

340,000

 

 

 

40

%

 

$

90,542

 

Steffen Pietzke(2)

 

$

338,000

 

 

 

40

%

 

n/a

 

 

(1) Ms. Pinto was appointed as the Company’s Vice President, Finance and Chief Accounting Officer on May 3, 2021. The 2021 Earned Bonus set forth above represents her prorated award based upon such start date.

(2) Mr. Pietzke resigned as the Company’s Vice President, Finance and Chief Accounting Officer on March 31, 2021 and was not eligible for the 2021 Earned Bonus.

The bonuses paid to each of our named executive officers in 2021 under our Incentive Compensation Plan are set forth in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table below.

Equity Long-Term Incentive Compensation

We believe long-term incentive compensation is an effective means for focusing our executive officers, including the named executive officers, on driving strong performance and increased stockholder value over a multi-year period, provides a meaningful reward for long-term value creation, and motivates them to remain employed with us. This approach aligns the contributions of our executive officers with the long-term interests of our stockholders and allows them to participate in any future appreciation in our common stock.

In 2021, we had two equity compensation plans: the Amended and Restated 2020 Equity Incentive Plan and the 2020 Employee Stock Purchase Plan. We determine long-term incentive compensation for our executive officers as part of our biannual compensation review (with cash compensation reviewed in Q1 and equity compensation reviewed in Q3) taking into account competitive market analysis, the recommendations of our CEO (except regarding his own long-term incentive compensation), the outstanding equity holdings of each executive officer, the projected impact of the proposed awards on our earnings, and our Company performance in 2021.

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In 2021, the long-term incentive equity compensation awarded to our named executive officers was granted in the form of stock options vesting over a four-year time-based schedule. The compensation committee believed that this approach is consistent with market practice among our peer group and based on discussions with Compensia, and reinforces a strong pay-for-performance culture as each stock option award only has value for the recipient if the value of our common stock appreciates from the grant date. Each stock option award was granted on the following material terms:

 

Named Executive Officer

 

Stock Options
Number of Shares

 

Jaume Pons, Ph.D.

 

225,000

(1)

Peter Garcia

 

100,000

(1)

Sophia Randolph, M.D., Ph.D.

 

100,000

(1)

Shelly Pinto

 

25,000

(1)

Shelly Pinto

 

125,000

(2)

Steffen Pietzke(3)

 

 

 

 

(1)
The option has an exercise price equal to $58.56 per share, which was the closing price of our common stock on the date of grant (July 30, 2021). 1/48th of the shares subject to the option vest each month beginning on August 30, 2021, subject to continued service through each such vesting date.
(2)
The option has an exercise price equal to $62.83 per share, which was the closing price of our common stock on the date of grant (May 3, 2021). 1/4th of the shares subject to the option vest on May 3, 2022, and 1/36th of the remaining shares subject to the option vest each month thereafter, subject to continued service through each such vesting date.
(3)
Mr. Pietzke resigned as the Company’s Vice President, Finance and Chief Accounting Officer on March 31, 2021.

 

In determining the 2021 annual option awards to our named executive officers, our compensation committee considered the equity awards granted at the 75th percentile to the executives holding comparable positions at our peer group companies, as well as each named executive officer’s existing equity holdings, level of responsibility and criticality, unvested status of existing equity holdings, and the committee’s subjective assessment of each named executive officer’s individual performance and our overall company performance. Our compensation committee considered the 75th percentile to be an appropriate benchmark given the growth stage of the business, and consistent with its objectives to emphasize pay for performance and provide incentives more heavily weighted toward promoting close alignment with the interests of our stockholders.

 

We granted Ms. Pinto a stock option to purchase 125,000 shares in connection with her hire. In determining the terms of such option, the compensation committee considered her role and responsibilities, the peer group data for such position, and its market-competitiveness in order to recruit her from her previous employer. In July 2021, as part of the 2021 annual option awards for long-term incentives, we granted Ms. Pinto an additional stock option to purchase 25,000 shares.

 

Severance and Change in Control Protections

In order to recruit and maintain a stable and effective management team, our compensation committee believes it is appropriate and necessary to provide assurance of certain severance and change in control benefits approved by the compensation committee, in consultation with Compensia. We entered into change in control and severance agreements (Severance Agreements) with each of our named executive officers that provide for the severance and change in control benefits. For a summary of the material terms of the benefits provided to our named executive officers under the Severance Agreements and an estimate of the payments and benefits that may be received by our named executive officers under the Severance Agreements, see “Potential Payments on Termination or Change in Control” below.

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Other Compensation

Retirement, Welfare, Health, and Other Broad-Based Benefits

We maintain a 401(k) retirement savings plan, or 401(k) plan, for the benefit of our employees, including our named executive officers, who satisfy certain eligibility requirements. Our 401(k) plan provides eligible employees with an opportunity to save for retirement on a tax-advantaged basis. Under our 401(k) plan, eligible employees may elect to defer a portion of their compensation, within the limits prescribed by the Code and the applicable limits under the 401(k) plan (generally, up to 90% of the employee’s eligible compensation), on a pre-tax or after-tax (Roth) basis, through contributions to the 401(k) plan. All of a participant’s contributions into the 401(k) plan are 100% vested when contributed. The 401(k) plan permits us to make matching contributions and profit-sharing contributions to eligible participants. The 401(k) plan is intended to qualify under Sections 401(a) and 501(a) of the Code. As a tax-qualified retirement plan, pre-tax contributions to the 401(k) plan and earnings on those pre-tax contributions are not taxable to the employees until distributed from the 401(k) plan, and earnings on Roth contributions are not taxable when distributed from the 401(k) plan. Subject to limits under the Code, we match an amount equal to 50% of the first 6% of the eligible employee’s contributions with a maximum annual employer contribution of $10,000 per employee.

Our health and welfare benefits include medical, dental and vision benefits, long-term disability insurance, basic life insurance coverage, health savings and dependent care accounts, and accidental death and dismemberment insurance. Our named executive officers also are eligible to participate in our 2020 Employee Stock Purchase Plan on the same terms as our other eligible employees. We design our employee benefits programs to be affordable and competitive in relation to the market, and compliant with applicable laws and practices. We adjust our employee benefits programs as needed based upon changes in applicable laws and market practices.

Perquisites and Other Personal Benefits

We do not provide perquisites or other personal benefits to our executive officers, including the named executive officers except in situations where we believe it is appropriate to assist an individual in the performance of his or her duties, to make our executive officers more efficient and effective, and for recruitment and retention purposes. In 2021, we provided Ms. Pinto with a signing bonus of $75,000 in order to incentivize her to join the Company. Ms. Pinto is required to repay all of the signing bonus to the Company if she voluntarily terminates her employment with the Company within 12 months of her date of hire. The compensation committee believed that the bonus was appropriate in order to recruit her from her previous employer.

In the future, we may provide perquisites or other personal benefits in limited circumstances. All future practices with respect to perquisites or other personal benefits for executive officers will be approved and subject to periodic review by the compensation committee.

Employment Agreements

We have entered into confirmatory employment letters with each of our named executive officers. Each of these agreements was approved by our board of directors or our compensation committee. In filling each of our executive positions, our board of directors and the compensation committee recognized the need to develop competitive compensation packages to attract qualified candidates in a dynamic labor market.

For information on the specific terms and conditions of the employment letters of the named executive officers, see the discussion of “Executive Employment Letter Agreements” below.

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Additional Policies and Practices

Hedging and Pledging Prohibitions

As part of our Insider Trading Policy, our contractors and employees (including our executive officers and the non-employee members of our board of directors) are prohibited from trading in publicly-traded options, such as puts and calls, and other derivative securities with respect to our securities. This includes any hedging or similar transaction designed to decrease the risks associated with holding shares of our common stock. In addition, our contractors and employees (including our executive officers and the non-employee members of our board of directors) are prohibited from holding our common stock in a margin account or pledging our securities as collateral for a loan.

Tax and Accounting Considerations