UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ Preliminary Proxy Statement
☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material Pursuant to §240.14a-12
UNITY BIOTECHNOLOGY, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
☒ No fee required
☐ Fee paid previously with preliminary materials
☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11
UNITY BIOTECHNOLOGY, INC.
285 East Grand Ave.
South San Francisco, CA 94080
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 23, 2023
To the Stockholders of Unity Biotechnology, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the “Annual Meeting”) of Unity Biotechnology, Inc., a Delaware corporation (the “Company”), will be held on June 23, 2023, at 9:00 a.m. PT. We are holding a virtual-only meeting to provide ease of access, real-time communication, and cost savings for our stockholders and our Company. Stockholders can attend the meeting via the internet at www.virtualshareholdermeeting.com/UBX2023 by using the 16-digit control number that appears on the accompanying Proxy Card (printed in the box and marked by the arrow) and the instructions that accompanied these proxy materials.
The Annual Meeting will be held for the following purposes:
The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice of Annual Meeting of Stockholders. Only stockholders who owned common stock of the Company at the close of business on April 24, 2023 (the “Record Date”) can vote at this meeting or any adjournments that take place.
The Board of Directors recommends that you vote FOR the election of the director nominees named in Proposal No. 1 of the Proxy Statement and FOR the ratification of the appointment of Ernst & Young LLP as the independent registered public accounting firm, as described in Proposal No. 2 of the Proxy Statement.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE VIRTUAL ANNUAL MEETING, WE ENCOURAGE YOU TO READ THE ACCOMPANYING PROXY STATEMENT AND OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2022, AND SUBMIT YOUR PROXY AS SOON AS POSSIBLE USING ONE OF THE THREE CONVENIENT VOTING METHODS DESCRIBED IN THE “INFORMATION ABOUT THE PROXY PROCESS AND VOTING” SECTION IN THE PROXY STATEMENT. IF YOU RECEIVE MORE THAN ONE SET OF PROXY MATERIALS OR NOTICE OF INTERNET AVAILABILITY BECAUSE YOUR SHARES ARE REGISTERED IN DIFFERENT NAMES OR ADDRESSES, EACH PROXY SHOULD BE SIGNED AND SUBMITTED TO ENSURE THAT ALL OF YOUR SHARES WILL BE VOTED.
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By Order of the Board of Directors
/s/ Anirvan Ghosh |
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Anirvan Ghosh, Ph.D. Chief Executive Officer |
South San Francisco, California April 28, 2023 |
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TABLE OF CONTENTS
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PROPOSAL NO. 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
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Indemnification Agreements and Directors’ and Officers’ Liability Insurance |
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Narrative to 2022 Summary Compensation Table and Outstanding Equity Awards at 2022 Fiscal Year End |
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1
UNITY BIOTECHNOLOGY, INC.
285 East Grand Ave.
South San Francisco, CA 94080
PROXY STATEMENT
FOR THE 2023 ANNUAL MEETING OF STOCKHOLDERS
JUNE 23, 2023
We have sent you this Proxy Statement and the enclosed Proxy Card because the Board of Directors (the “Board”) of Unity Biotechnology, Inc. (referred to herein as the “Company”, “Unity”, “we”, “us”, or “our”), is soliciting your proxy to vote at our 2023 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on Friday, June 23, 2023, at 9:00 a.m. local time, virtually at www.virtualshareholdermeeting.com/UBX2023. There will be no physical meeting location. The meeting will only be conducted via an audio webcast.
In addition to solicitations by mail, our directors, officers, and regular employees, without additional remuneration, may solicit proxies by telephone, e-mail, and personal interviews. We may retain outside consultants to solicit proxies on our behalf as well. All costs of solicitation of proxies will be borne by us. Brokers, custodians, and fiduciaries will be requested to forward proxy soliciting material to the owners of stock held in their names, and we will reimburse them for their reasonable out-of-pocket expenses incurred in connection with the distribution of proxy materials.
Pursuant to the rules adopted by the Securities and Exchange Commission (the “SEC”), we have elected to provide access to our Annual Meeting materials, which include this Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2022 (the “Form 10-K”), over the internet in lieu of mailing printed copies. We will begin mailing the Notice of Internet Availability to our stockholders of record as of April 24, 2023 (the “Record Date”) for the first time on or about April 28, 2023. The Notice of Internet Availability will contain instructions on how to access and review the Annual Meeting materials and will also contain instructions on how to request a printed copy of the Annual Meeting materials. In addition, we have provided brokers, dealers, banks, voting trustees, and their nominees, at our expense, with additional copies of our proxy materials and the Form 10-K so that our record holders can supply these materials to the beneficial owners of shares of our common stock as of the Record Date. The Form 10-K is also available in the “Financial Information” section of our website at http://ir.unitybiotechnology.com/investor-relations.
The only outstanding voting securities of Unity are shares of common stock, $0.0001 par value per share (the “common stock”), of which there were 14,359,214 shares outstanding as of the Record Date (excluding any treasury shares). The holders of a majority in voting power of the shares of common stock issued and outstanding and entitled to vote, present in person, or by remote communication, if applicable, or represented by proxy, are required to hold the Annual Meeting.
On October 19, 2022, we effected a 1-for-10 reverse stock split of all issued and outstanding shares of our common stock. Proportionate adjustments were made to the exercise prices and the number of shares underlying our outstanding equity awards, as applicable, and warrants exercisable for shares of common stock, as well as to the number of shares issuable under our equity incentive plans and certain existing agreements. This Proxy Statement reflects our reverse stock split.
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INFORMATION ABOUT THE PROXY PROCESS AND VOTING
We have made this Proxy Statement and Proxy Card available to you on the internet or, upon your request, have delivered printed proxy materials to you, because the Board is soliciting your proxy to vote at the Annual Meeting, including at any adjournments or postponements of the Annual Meeting. You are invited to attend the Annual Meeting to vote on the proposals described in this Proxy Statement. However, you do not need to attend the Annual Meeting to vote your shares. Instead, you may simply complete, sign, and return the Proxy Card, or follow the instructions below to submit your proxy over the telephone or on the internet.
This Proxy Statement, the Notice of Internet Availability, the Notice of Annual Meeting, and accompanying Proxy Card will be first made available for access by our stockholders on or about April 28, 2023, to all stockholders of record entitled to vote at the Annual Meeting.
Only stockholders of record at the close of business on the Record Date, will be entitled to vote at the Annual Meeting. At the close of business on the Record Date, there were 14,359,214 shares of common stock issued and outstanding and entitled to vote.
If, on the Record Date, your shares were registered directly in your name with the transfer agent for our common stock, Computershare Trust Company, N.A., then you are a stockholder of record. As a stockholder of record, you may vote at the virtual Annual Meeting or vote by proxy. Whether or not you plan to attend the Annual Meeting, we encourage you to fill out and return the Proxy Card or vote by proxy over the telephone or on the internet as instructed below to ensure your vote is counted.
If, on the Record Date, your shares were held in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote your shares at the virtual Annual Meeting unless you request and obtain a valid Proxy Card from your broker or other agent.
You are being asked to vote on two proposals:
In addition, you are entitled to vote on any other matters that are properly brought before the Annual Meeting.
Please note that by casting your vote by proxy you are authorizing the individuals listed on the Proxy Card to vote your shares in accordance with your instructions and in their discretion with respect to any other matter that properly comes before the Annual Meeting or any adjournments or postponements thereof.
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The procedures for voting are as follows:
If you are a stockholder of record, you may vote at the virtual Annual Meeting. Alternatively, you may vote by proxy, by using the accompanying Proxy Card, over the internet, or by telephone. Whether or not you plan to attend the Annual Meeting, we encourage you to vote by proxy to ensure your vote is counted. Even if you have submitted a proxy before the Annual Meeting, you may still attend the virtual Annual Meeting and vote by following the instructions described below. In such case, your previously submitted proxy will be disregarded.
If you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you should have received a voting instruction card and voting instructions with these proxy materials from that organization rather than from us. Simply complete and mail the voting instruction card to ensure that your vote is counted. To vote at the virtual Annual Meeting, you must obtain a valid proxy from your broker, bank, or other agent. Follow the instructions from your broker, bank, or other agent included with these proxy materials, or contact your broker, bank, or other agent to request a proxy form.
We provide internet proxy voting to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers and telephone companies.
Broadridge Financial Solutions, Inc. (“Broadridge”), has been engaged as our independent agent to tabulate stockholder votes, or Inspector of Election. If you are a stockholder of record, your executed Proxy Card is returned directly to Broadridge for tabulation. As noted above, if you hold your shares through a broker, your broker returns one Proxy Card to Broadridge on behalf of all its clients.
Votes will be counted by the Inspector of Election appointed for the Annual Meeting, who will separately count “For” votes for all proposals, and, with respect to Proposal 2, “Against” votes, abstentions, and broker non-votes. In addition, with respect to Proposal 1, the election of directors, the Inspector of Election will count the number of “Withheld” votes and broker non-votes received. If your shares are held by your broker as your nominee (that is, in “street name”), you will need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker to vote your shares. If you do not give instructions to your broker, your broker can vote your shares with respect to “routine” items, but not with respect to “non-routine” items. See below for more information regarding: “What are ‘broker non-votes’?” and “Which ballot measures are considered ‘routine’ or ‘non-routine’?”
Broker non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed “non-routine.” Generally, if shares are held in street name, the beneficial owner of the shares is entitled to give voting instructions to the broker or nominee holding the shares. If the beneficial owner does not provide voting instructions, the broker or nominee can still vote the shares with respect to matters that are considered to be “routine,”
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but not with respect to “non-routine” matters. In the event that a broker, bank, custodian, nominee, or other record holder of common stock indicates on a proxy that it does not have discretionary authority to vote certain shares on a particular proposal, then those shares will be treated as broker non-votes with respect to that proposal. Accordingly, if you own shares through a nominee, such as a broker or bank, please be sure to instruct your nominee how to vote to ensure that your vote is counted on each of the proposals.
The ratification of the appointment of Ernst & Young LLP, as our independent registered public accounting firm for the year ending December 31, 2023 (Proposal 2) is considered routine under applicable rules. A broker or other nominee may generally vote on routine matters, and therefore, no broker non-votes are expected to exist in connection with Proposal 2. The election of directors (Proposal 1) is considered non-routine under applicable rules. A broker or other nominee cannot vote without instructions on non-routine matters, and therefore, there may be broker non-votes on Proposal 1.
With respect to Proposal 1, the election of directors, the three nominees receiving the highest number of “For” votes will be elected. “Withhold” votes and broker non-votes will have no effect on the election of the nominees.
With respect to Proposal 2, the affirmative vote of the majority of votes cast affirmatively or negatively (excluding abstentions and broker non-votes) is required for approval. This is a routine proposal, and therefore, we do not expect any broker non-votes.
On each matter to be voted upon, you have one vote for each share of common stock you own as of the Record Date.
If we receive a signed and dated Proxy Card and the Proxy Card does not specify how your shares are to be voted, your shares will be voted as follows:
If any other matter is properly presented at the Annual Meeting, your proxy (one of the individuals named on your Proxy Card) will vote your shares in his or her discretion.
We will pay for the entire cost of soliciting proxies. In addition to these mailed proxy materials, our directors, officers, and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors, officers, and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks, and other agents for the cost of forwarding proxy materials to beneficial owners.
If you receive more than one set of materials, your shares are registered in more than one name or are registered in different accounts. In order to vote all the shares you own, you must either sign and return all of the Proxy Cards or follow the instructions for any alternative voting procedure on each of the Proxy Cards.
Yes. You can revoke your proxy at any time before the final vote at the Annual Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of three ways:
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If your shares are held by your broker, bank, or other agent, you should follow the instructions provided by them.
The live audio webcast of the Annual Meeting will begin promptly at 9:00 a.m. local time. Online access to the audio webcast will open approximately 15 minutes prior to the start of the Annual Meeting to allow time for our stockholders to log in and test their devices’ audio system. We encourage our stockholders to access the meeting in advance of the designated start time.
To attend the Annual Meeting, stockholders will need to log-in to www.virtualshareholdermeeting.com/UBX2023 using the 16-digit control number on the proxy card or voting instruction form.
Stockholders may submit questions and vote on the day of, or during, the Annual Meeting on www.virtualshareholdermeeting.com/UBX2023. To demonstrate proof of stock ownership, you will need to enter the 16-digit control number received with your proxy card or voting instruction form to submit questions and vote at our Annual Meeting. We intend to answer questions submitted during the meeting that are pertinent to the Company and the items being brought before stockholder vote at the Annual Meeting, as time permits, and in accordance with the Rules of Conduct for the Annual Meeting. Questions and answers will be grouped by topic and substantially similar questions will be answered only once. To promote fairness, efficiently use the Company’s resources, and ensure all stockholder questions are able to be addressed, we will respond to no more than three questions from a single stockholder.
Beginning 15 minutes prior to the start of and during the virtual Annual Meeting, there will be a support team ready to assist stockholders with any technical difficulties they may have accessing or hearing the virtual meeting.
To be considered for inclusion in next year’s proxy materials, your proposal must be submitted in writing by December 30, 2023, to our Corporate Secretary at Unity Biotechnology, Inc., 285 East Grand Ave., South San Francisco, CA 94080; provided that if the date of the annual meeting is more than 30 days from June 23, 2024, the deadline is a reasonable time before we begin to print and send our proxy materials for next year’s annual meeting. Pursuant to the bylaws, in order for a stockholder to present a proposal for next year’s annual meeting, other than proposals to be included in the proxy statement as described above, or to nominate a director, you must do so between February 24, 2024, and March 25, 2024; provided that if the date of that annual meeting is more than 30 days before or more than 60 days after June 23, 2024, you must give notice not later than the 90th day prior to the annual meeting date or, if later, the 10th day following the day on which public disclosure of the annual meeting date is first made. You are also advised to review our bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations.
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if the holders of a majority in voting power of the shares of common stock issued and outstanding and entitled to vote are present in person, or by remote communication, if applicable, or represented by proxy at the Annual Meeting. Shares are considered present “in person” if voted by the holder of those shares during the Annual Meeting or by proxy. On the Record Date, there were 14,359,214 shares outstanding and entitled to vote. Accordingly, 7,179,608 shares must be represented by stockholders present at the Annual Meeting or by proxy to have a quorum.
Your shares will be counted toward the quorum only if you submit a valid proxy or vote at the Annual Meeting. Abstentions and broker non-votes will be counted toward the quorum requirement. If there is no quorum, either the Chair of the Annual Meeting or a majority in voting power of the stockholders entitled to vote at the Annual Meeting, present in person, or by remote communication, if applicable, or represented by proxy, may adjourn the Annual Meeting to another time or place.
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Voting results will be announced by the filing of a Current Report on Form 8-K within four business days after the Annual Meeting. If final voting results are unavailable at that time, we will file an amended Current Report on Form 8-K within four business days of the day the final results are available.
We are an “emerging growth company” as that term is used in the Jumpstart Our Business Startups Act of 2012 and, as such, have elected to comply with certain reduced public company reporting requirements. These reduced reporting requirements include reduced disclosure about our executive compensation arrangements and no non-binding advisory votes on executive compensation. We will remain an emerging growth company until the earlier of: (1) (a) December 31, 2023, (b) the last day of the fiscal year in which we have total annual gross revenue of at least $1.07 billion, or (c) the last day of the fiscal year in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. We expect that we will no longer qualify as an emerging growth company after December 31, 2023, at which time we will become subject to certain disclosure and compliance requirements as discussed in our Annual Report on Form 10-K for the year ended December 31, 2022 that apply to other public companies but that did not previously, or currently, apply to us due to our status as an emerging growth company.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
Our Board is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors, and each class has a staggered, three-year term. Unless the Board determines that vacancies (including vacancies created by increases in the number of directors) shall be filled by the stockholders, and except as otherwise provided by law, vacancies on the Board may be filled only by the affirmative vote of a majority of the remaining directors. A director elected by the Board to fill a vacancy (including a vacancy created by an increase in the number of directors) shall serve for the remainder of the full term of the class of directors in which the vacancy occurred and until such director’s successor is elected and qualified.
The Board currently consists of eight seated directors, divided into the three following classes:
At each annual meeting of stockholders, the successors to directors whose terms will then expire will be elected to serve from the time of election and qualification until the third subsequent annual meeting of stockholders.
Messrs. Berns and Samar, and Ms. Samuels have been nominated to serve as Class II directors and have each elected to stand for reelection. Each director to be elected will hold office from the date of their election by the stockholders until the third subsequent annual meeting of stockholders or until his or her successor is elected and has been qualified, or until such director’s earlier death, resignation or removal.
Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the three nominees named below. In the event that any nominee should be unavailable for election as a result of an unexpected occurrence, such shares will be voted for the election of such substitute nominee as the Board may propose. Each person nominated for election has agreed to serve if elected, and management has no reason to believe that any nominee will be unable to serve. Directors are elected by a plurality of the votes cast at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE ELECTION OF EACH NAMED NOMINEE.
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The following table sets forth, for the Class II nominees (who are currently standing for re-election) and for our other current directors who will continue in office after the Annual Meeting, information with respect to their ages as of April 24, 2023, and position/office held within the Company:
Name |
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Age |
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Position/Office Held With the Company |
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Director Since |
Class I Directors whose terms expire at the 2025 Annual Meeting of Stockholders |
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Anirvan Ghosh, Ph.D. |
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59 |
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Chief Executive Officer and Director |
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2020 |
Nathaniel E. David, Ph.D.(4) |
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55 |
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Director |
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2011 |
Gilmore O’Neill, M.B.(4) |
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58 |
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Director |
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2020 |
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Class II Directors whose terms expire at the Annual Meeting of Stockholders |
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Paul L. Berns(1)(2) |
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56 |
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Director |
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2018 |
Michael P. Samar(1)(2) |
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50 |
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Director |
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2022 |
Camille D. Samuels(1)(3) |
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51 |
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Director |
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2015 |
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Class III Directors whose terms expire at the 2024 Annual Meeting of Stockholders |
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Keith R. Leonard Jr. |
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61 |
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Chairman and Director |
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2016 |
Margo R. Roberts, Ph.D.(3)(4) |
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68 |
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Director |
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2018 |
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
(3) Member of the Nominating and Corporate Governance Committee.
(4) Member of the Science Committee.
Set forth below is biographical information for the nominees and each person whose term of office as a director will continue after the Annual Meeting. The following includes certain information regarding our directors’ individual experience, qualifications, attributes and skills that led the Board to conclude that they should serve as directors.
Paul L. Berns has served as a member of our board of directors since March 2018. Mr. Berns has served as Chief Executive Officer and Chairman of the Board of Neumora Therapeutics, Inc. since November 2019 and has been a member of ARCH Venture Partners since August 2018. Mr. Berns was a consultant to the pharmaceutical industry from July 2016 to August 2018, from August 2012 to March 2014, and from July 2005 to March 2006. From March 2014 to June 2016, Mr. Berns served as President and Chief Executive Officer and Chairman of the Board at Anacor Pharmaceuticals, Inc., a biopharmaceutical company, which was acquired by Pfizer Inc. in 2016. Previously, Mr. Berns served as President and Chief Executive Officer of Allos Therapeutics, Inc., a biopharmaceutical company, from March 2006 to September 2012, when it was acquired by Spectrum Pharmaceuticals, Inc. Mr. Berns was President and Chief Executive Officer of Bone Care International, Inc., a specialty pharmaceutical company, from June 2002 to July 2005, when it was acquired by Genzyme Corporation. Prior to that, Mr. Berns was Vice President and General Manager of the Immunology, Oncology and Pain Therapeutics business unit of Abbott Laboratories (NYSE: ABT) from 2001 to 2002, and from 2000 to 2001, he served as Vice President, Marketing of BASF Pharmaceuticals/Knoll, when it was acquired by Abbott Laboratories in 2001. Earlier in his career, Mr. Berns held various positions, including senior management roles, at Bristol-Myers Squibb Company from 1990 to 2000. Mr. Berns is currently a board member of the privately held company, HI Bio (since March 2021), the publicly held company, EQRx, Inc. (NASDAQ: EQRX) (since January 2020), and the privately held company, Epirium Bio, Inc. (since July 2019). Mr. Berns is also the chairman of the board of the privately held company Happy AI (since July 2019). Mr. Berns previously served on the boards of Jazz Pharmaceuticals, PLC (NASDAQ: JAZZ) (from April 2010 to July 2021), MC2 Therapeutics (from May 2017 to January 2020), Menlo Therapeutics, Inc. (from November 2017 to March 2020), Anacor Pharmaceuticals, Inc. (from June 2012 to June 2016), XenoPort, Inc. (from November 2005 to May 2016), Allos Therapeutics, Inc. (from March 2006 to September 2012), and Bone Care International, Inc. (from June 2002 to July 2005). Mr. Berns received a B.S. in Economics from the University of Wisconsin. We believe that Mr. Berns is qualified to serve on our board of directors because of his extensive experience in the biopharmaceutical industry and his service as a director of a number of public pharmaceutical companies.
Michael P. Samar has served as a member of our board of directors since May 2022. Mr. Samar has served as Chief Financial Officer at Windgap Medical, Inc. since December 2022. Between January 2017 and August 2022, he served in senior leadership positions including as Chief Financial Officer at Assembly Biosciences from July 2021 to August 2022. Prior to being named CFO at Assembly
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Biosciences, he served as the company’s Senior Vice President of Finance and Business Operations. Previously, Mr. Samar was Vice President of Finance and Site Head for the South San Francisco facility at Acorda Therapeutics (formerly Biotie Therapies). In earlier positions, he served as Director, Financial Planning and Analysis at Onyx Pharmaceuticals, Senior Finance Director, Global Planning and Analysis at Agennix (formerly GPC Biotech), and roles of increasing responsibility within finance at Johnson & Johnson Pharmaceutical Research & Development. Mr. Samar received an M.B.A. from Villanova University and a B.S.B.A. in finance from Bryant University. He also served as Treasurer on the Board of OUTbio Bay Area, Inc., a non-profit organization for LGBTQ+ professionals in the biotech and related industries. We believe that Mr. Samar is qualified to serve on our board of directors due to his extensive experience, including in finance and operations, in the biopharmaceutical industry.
Camille D. Samuels has served as a member of our board of directors since March 2015. Ms. Samuels has been a Partner at Venrock, a venture capital firm, since May 2014. Prior to that, she served as a Managing Director of Versant Ventures, a life sciences venture capital firm, from February 2000 to December 2012. She previously served as a board member or a board observer on other public and private healthcare companies, including Corvidia Therapeutics, Inc., which was acquired by Novo Nordisk, Fluidigm Corporation (NASDAQ: FLDM), Genomic Health, Inc. (NASDAQ: GHDX), KYTHERA Biopharmaceuticals (NASDAQ: KYTH – acquired by Allergan), Novacardia, Inc., which was acquired by Merck & Co., Inc., ParAllele BioScience, Inc., REGENXBIO (NASDAQ: RGNX), and Syrrx. Prior to her venture career, Ms. Samuels held business development and strategic planning roles at Tularik Inc., a public biotechnology company, acquired by Amgen, as well as Genzyme Corporation (now part of Sanofi). Ms. Samuels received a B.A. in Biology from Duke University and an M.B.A. from Harvard Business School, both with high distinction. We believe that Ms. Samuels is qualified to serve on our board of directors due to her extensive experience investing in biotechnology companies and her experience on boards of directors in numerous companies in the healthcare industry, public and private.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE ELECTION OF EACH OF THE ABOVE NAMED NOMINEES
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Directors Continuing in Office Until the 2024 Annual Meeting of Stockholders
Keith R. Leonard Jr. has served as our Chairman since January 2016 and served as our Chief Executive Officer from October 2016 to March 2020. Mr. Leonard was a co-founder of and served as President and Chief Executive Officer of KYTHERA Biopharmaceuticals, Inc., a biopharmaceutical company from August 2005 until its acquisition by Allergan plc in October 2015. Prior to that, Mr. Leonard held roles of increasing responsibility at Amgen Inc. (NASDAQ: AMGN) from October 1991 to November 2004, including as Senior Vice President and General Manager of Amgen Europe. Mr. Leonard currently serves on the board of directors of Arcutis Biotherapeutics, Inc. (NASDAQ: ARQT), a biopharmaceutical company and Intuitive Surgical, Inc. (NASDAQ: ISRG), a medical device company. He previously served on the boards of directors of Sienna Biopharmaceuticals, Inc., a public biopharmaceutical company, Affymax, Inc., a public biotechnology company, Anacor Pharmaceuticals, Inc., a public biopharmaceutical company which was acquired by Pfizer Inc. in 2016, and ARYx Therapeutics, Inc., a public biopharmaceutical company, and Sanifit Laboratories S.A. Mr. Leonard was formerly an active-duty officer in the United States Navy. Mr. Leonard received a B.S. in Engineering from the University of California, Los Angeles, a B.A. in History from the University of Maryland, an M.S. in Engineering from the University of California, Berkeley, and an M.B.A. from the Anderson School of Management at the University of California, Los Angeles. We believe that Mr. Leonard is qualified to serve on our board of directors due to his extensive executive management and leadership experience in the life sciences industry, as well as experience as a director of public companies.
Margo R. Roberts, Ph.D. has served as a member of our board of directors since December 2018. Most recently, Dr. Roberts served as Chief Scientific Officer at Lyell Immunopharma, Inc. from January 2019 to January 2021. Previously, Dr. Roberts served in multiple roles at Kite Pharma Inc. (NASDAQ: KITE), a biopharmaceutical company acquired by Gilead in October 2017, including most recently as Senior Vice President of Discovery Research and Chief Scientific Officer from August 2011 to July 2018. Prior to that, Dr. Roberts served in multiple roles, including as Principal Scientist and Director of Immune and Cell Therapy, at Cell Genesys, Inc., a biotechnology company, from January 1990 to December 1998. Dr. Roberts has also served as an associate professor at the University of Virginia from 1999 to 2011. Dr. Roberts is currently a member of board of Celyad SA (NASDAQ: CYAD), a biotechnology and manufacturing services company, and InsTIL Bio Inc, a private biotechnology company focused on cellular manufacturing in oncology. Dr. Roberts received both her Bachelor of Science degree with honors and her Ph.D. degree from the University of Leeds in England. We believe that Dr. Roberts is qualified to serve on our board of directors because of her extensive experience as an executive in the biopharmaceutical industry.
Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders
Anirvan Ghosh, Ph.D. has served as our Chief Executive Officer since March 2020. Prior to joining as our Chief Executive Officer, Dr. Ghosh held a number of executive leadership roles at leading biotechnology companies, as well as senior roles in premier academic institutions. From April 2017 to March 2020, Dr. Ghosh served as the Senior Vice President, Head of Research and Early Development at Biogen Inc. (NASDAQ: BIIB), a biotechnology company. In that role, Dr. Ghosh had accountability for the research and early clinical development portfolio of programs for all therapeutic areas, including ophthalmology, neuroscience, and immunology. Dr. Ghosh served as the Chief Scientific Officer at E-Scape Bio, a venture-backed private biopharmaceutical company, from May 2016 to April 2017. Prior to that, Dr. Ghosh served as the Global Head and Vice President of Neuroscience Discovery and Biomarkers at Roche Pharmaceuticals from July 2011 to April 2016. Prior to that, Dr. Ghosh held roles of increasing responsibility at The Johns Hopkins School of Medicine and University of California at San Diego (UCSD). After completing his postdoctoral research at Harvard Medical School, Dr. Ghosh was recruited to be on the faculty at Johns Hopkins, where he led a research lab from 1995 to 2003. In 2003, Dr. Ghosh was recruited to UCSD as the Stephen Kuffler Professor in the Division of Biology and served as chair of Neurobiology from 2008 to 2011. Dr. Ghosh received a B.S. with honors in Physics from the California Institute of Technology and a Ph.D. in Neuroscience from Stanford University. We believe that Dr. Ghosh is qualified to serve on our board of directors due to his extensive executive management and leadership experience in the life sciences industry.
Nathaniel E. David, Ph.D. is our co-founder and has served as a member of our board of directors since its inception in November 2011, our President from January 2016 to December 2020, and as our Chief Executive Officer from our inception until January 2016. Dr. David was a co-founder of and served as Chief Science Officer of KYTHERA Biopharmaceuticals, Inc. (NASDAQ: KYTH) from January 2005 to September 2009 and as a member of the board of directors from its inception until its acquisition by Allergan plc in October 2015. He was a co-founder and from 1999 to 2003 was Director of Business Development of Syrrx, Inc., a biotechnology company which was acquired by Takeda Pharmaceutical Company Limited, a public pharmaceutical company. Dr. David was also a co-founder of Achaogen, Inc., a public biotechnology company, and Sapphire Energy, Inc., an energy company. Dr. David previously served on the board of trustees of the Buck Institute for Research on Aging, and on the board of directors of Sapphire Energy, Inc., and currently serves as a Chief Executive Officer and director of Jupiter Bioventures, LLC, and as director of Cavalry Biosciences,
11
Inc. and Jocasta Neurosciences, Inc., all private biotechnology companies. Dr. David received an A.B. in Biology from Harvard University and a Ph.D. in Molecular and Cellular Biology from the University of California, Berkeley. We believe that Dr. David is qualified to serve on our board of directors due to his extensive scientific and operational background gained as a research scientist, founder, and executive focused on life sciences and pharmaceutical companies.
Gilmore O’Neill, M.B. has served as a member of our board of directors since December 2020. Since June 2022, Dr. O’Neill has served as president, Chief Executive Officer, and director of Editas Medicine, Inc. (NASDAQ: EDIT). Previously, he served as Chief Medical Officer and Executive Vice President, Research & Development at Sarepta Therapeutics, Inc. (NASDAQ: SRPT) from June 2018 to November 2021. Prior to joining Sarepta, Dr. O’Neill served as the Senior Vice President, Late Stage Clinical Development of Biogen Inc. (NASDAQ: BIIB) from November 2016 to June 2018. At Biogen, Dr. O’Neill also served as Senior Vice President, Drug Innovation Units from October 2015 to November 2016. From June 2014 to October 2015, Dr. O’Neill served as Vice President, MS Franchise & Head, Multiple Sclerosis Research & Development at Biogen. Prior to this role, Dr. O’Neill served in numerous roles at Biogen since he joined the company in April 2003, including Vice President, Global Neurology Clinical Development, Vice President, Global Late Stage Clinical Development and Vice President, Experimental Neurology (Early Stage). Dr. O’Neill is licensed to practice medicine in the state of Massachusetts. He is a member of the American Academy of Neurology and a board-certified neurologist (ABPN). Dr. O’Neill is formerly Chief Resident in Neurology at the Massachusetts General Hospital (MGH) and served, until recently, as a Clinical Instructor in Neurology at Harvard Medical School. From 1997 to 2015, Dr. O’Neill served as a clinical instructor in neurology at Harvard Medical School. He also serves on the board of directors of the Massachusetts Biotechnology Council (MassBio) and Aptinyx Inc. (NASDAQ: APTX). Dr. O’Neill received a Bachelor of Medicine degree from University College Dublin and a Master of Medical Sciences degree from Harvard University. We believe that Dr. O’Neill is qualified to serve on our board of directors due to his extensive experience in biopharmaceutical industry and his medical background.
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RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of our Board has engaged Ernst & Young LLP (“EY”) as our independent registered public accounting firm for the year ending December 31, 2023 and is seeking ratification of such appointment by our stockholders at the Annual Meeting. EY has served as the Company’s independent registered public accounting firm since 2017. Representatives of EY are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
Neither our bylaws nor other governing documents or law require stockholder ratification of the appointment of EY as our independent registered public accounting firm. However, the Audit Committee is submitting the appointment of EY to our stockholders for ratification as a matter of good corporate practice. If our stockholders fail to ratify the appointment, the Audit Committee will reconsider whether or not to retain EY. Even if the appointment is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if they determine that such a change would be in the best interests of the Company and our stockholders.
The following table provides information regarding the fees incurred for services related to the fiscal years ended December 31, 2022 and 2021, by EY, our independent registered public accounting firm.
|
|
Year Ended December 31, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
|
|
(In thousands) |
|
|||||
Audit Fees(1) |
|
$ |
1,461 |
|
|
$ |
1,075 |
|
Tax Fees(2) |
|
|
37 |
|
|
|
112 |
|
Audit-Related Fees |
|
— |
|
|
— |
|
||
All Other Fees(3) |
|
|
2 |
|
|
— |
|
|
Total Fees |
|
$ |
1,500 |
|
|
$ |
1,187 |
|
All of the services described above were pre-approved by our Audit Committee. The Committee concluded that the provision of these services by EY would not affect their independence.
The Audit Committee or a delegate of the Audit Committee pre-approves, or provides pursuant to pre-approvals policies and procedures for the pre-approval of, all audit and non-audit services provided by its independent registered public accounting firm. This policy is set forth in the charter of the Audit Committee and is available at http://ir.unitybiotechnology.com/investor-relations.
The Audit Committee approved all of the audit, audit-related, tax, and other services provided by EY for the fiscal year ended December 31, 2022 and the estimated costs of those services. Actual amounts billed, to the extent in excess of the estimated amounts, are periodically reviewed and approved by the Audit Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
RATIFICATION OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
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The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference into any filing of Unity under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
The primary purpose of the Audit Committee is to oversee our financial reporting processes on behalf of our Board. The Audit Committee’s functions are more fully described in its charter, which is available on our website at http://ir.unitybiotechnology.com/investor-relations. Management has the primary responsibility for our financial statements and reporting processes, including our systems of internal controls.
In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management Unity’s audited financial statements as of and for the year ended December 31, 2022. The Audit Committee has discussed with Ernst & Young LLP (“EY”), the Company’s independent registered public accounting firm, the matters required to be discussed by the applicable requirements of, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board (“PCAOB”) and the SEC.
In addition, the audit committee has received the written disclosures and the letter from EY required by PCAOB Ethics and Independence Rule 3526, “Communication with Audit Committees Concerning Independence”, and the Audit Committee has discussed with EY their independence from the Company and its management. Finally, the Audit Committee discussed with EY, with and without management present, the scope and results of EY’s audit of such financial statements.
Based on these reviews and discussions, the Audit Committee has recommended to our Board that such audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2022 for filing with the SEC. The Audit Committee has selected EY as our independent registered public accounting firm for the fiscal year ending December 31, 2023 and is seeking ratification of such appointment by the stockholders.
|
Audit Committee |
14
We have adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers, directors, and consultants, including those officers responsible for financial reporting. The code of business conduct and ethics is available on our website at http://ir.unitybiotechnology.com/investor-relations. We expect that any amendments to the code, or any waivers of its requirements, will be disclosed on our website. The reference to our web address does not constitute incorporation by reference of the information contained at or available through our website.
We believe in sound corporate governance practices and have adopted formal Corporate Governance Guidelines to enhance our effectiveness. Our Board adopted these Corporate Governance Guidelines in order to ensure that it has the necessary practices in place to review and evaluate our business operations as needed and to make decisions that are independent of our management. The Corporate Governance Guidelines are also intended to align the interests of directors and management with those of our stockholders. The Corporate Governance Guidelines set forth the practices our Board follows with respect to Board and committee composition and selection, Board meetings, Chief Executive Officer performance evaluation, and succession planning. A copy of our Corporate Governance Guidelines is available on our website at http://ir.unitybiotechnology.com/investor-relations.
As required under the Nasdaq Global Select Market (“Nasdaq”) rules and regulations, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by such board. The Board consults with the Company’s counsel to ensure that the Board’s determinations are consistent with all relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent Nasdaq listing standards, as in effect from time to time.
Consistent with these considerations, our Board has determined that all of our directors, other than Drs. David and Ghosh, qualify as “independent” directors in accordance with the Nasdaq listing requirements. Dr. Ghosh is not considered independent, because he is an employee of Unity. Dr. David is not considered independent, because he has been an employee of Unity within the last three years. The Nasdaq independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director nor any of his or her family members has engaged in various types of business dealings with us. In addition, as required by Nasdaq rules, our Board has made a subjective determination as to each independent director that no relationships exist, which, in the opinion of our Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our Board considered information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management. There are no family relationships among any of our directors or executive officers.
As required under Nasdaq rules and regulations, our independent directors meet in regularly scheduled executive sessions at which only independent directors are present. Each of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee of our Board are comprised entirely of directors determined by the Board to be independent within the meaning of Nasdaq and SEC rules and regulations applicable to the members of such committees.
Our bylaws and Corporate Governance Guidelines provide our Board with flexibility to combine or separate the positions of Chairman of the Board and Chief Executive Officer and/or to implement a lead director in accordance with its determination that utilizing one or the other structure would be in the best interests of the Company. Mr. Leonard currently serves as the Chairman of our Board, and Mr. Berns currently serves as the lead independent director of the Board. All of our directors are encouraged to make suggestions for agenda items and pre-meeting materials for meetings of the Board of Directors. In addition, in his role as lead independent director, Mr. Berns presides over the executive sessions of the Board in which our Chief Executive Officer does not participate and serves as a liaison to management on behalf of the independent members of the Board of Directors.
Our Board has concluded that our current leadership structure is appropriate at this time. However, our Board will continue to periodically review our leadership structure and may make such changes in the future as it deems appropriate.
15
Risk assessment and oversight are an integral part of our governance and management processes. Our Board encourages management to promote a culture that incorporates risk management into our corporate strategy and day-to-day business operations. Management discusses strategic and operational risks at regular management meetings and conducts specific strategic planning and review sessions during the year that include a focused discussion and analysis of the risks facing us. Throughout the year, senior management reviews these risks with the Board at regular Board meetings as part of management presentations that focus on particular business functions, operations, or strategies and presents the steps taken by management to mitigate or eliminate such risks.
Our Board does not have a standing risk management committee, but rather administers this oversight function directly through our Board as a whole, as well as through various standing committees of our Board that address risks inherent in their respective areas of oversight. While our Board is responsible for monitoring and assessing strategic risk exposure, our Audit Committee is responsible for overseeing our major financial risk exposures and the steps our management has taken to monitor and control these exposures. The Audit Committee also monitors compliance with legal and regulatory requirements and considers and approves or disapproves any related person transactions. Our Nominating and Corporate Governance Committee monitors the effectiveness of our corporate governance guidelines. Our Compensation Committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.
Our Board has the following standing committees: an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, and a Science Committee. Our Board may establish other committees to facilitate the management of our business. The composition and functions of each committee are described below.
Our Audit Committee oversees our corporate accounting and financial reporting process. Among other matters, the Audit Committee:
16
The current members of our Audit Committee are Paul L. Berns, Michael P. Samar, and Camille D. Samuels. Mr. Samar serves as the Chair of the committee. All members of our Audit Committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and Nasdaq. Our Board has determined that Mr. Samar is an audit committee financial expert as defined under the applicable rules of the SEC and has the requisite financial sophistication as defined under the applicable rules and regulations of Nasdaq. Under the rules of the SEC, members of the audit committee must also meet heightened independence standards. Our Board has determined that each of Messrs. Berns and Samar and Ms. Samuels are independent under the applicable rules of the SEC and Nasdaq.
The Audit Committee operates under a written charter that satisfies the applicable standards of the SEC and Nasdaq. A copy of the Audit Committee charter is available to security holders on the Company’s website at http://ir.unitybiotechnology.com/investor-relations.
Our Compensation Committee oversees policies relating to compensation of and benefits for our officers and employees. The Compensation Committee approves or recommends to our Board corporate goals and objectives relevant to the compensation of our executive officers (other than our Chief Executive Officer), evaluates the performance of these officers in light of those goals and objectives, and approves the compensation of these officers based on such evaluations. The Compensation Committee also reviews and approves or makes recommendations to our Board regarding the issuance of stock options and other awards under our stock plans to our executive officers (other than our Chief Executive Officer). The Compensation Committee reviews the performance of our Chief Executive Officer and makes recommendations to our Board with respect to his compensation and our Board retains the authority to make compensation decisions relative to our Chief Executive Officer. The Compensation Committee will review and evaluate, at least annually, the performance of the Compensation Committee and its members, including compliance by the Compensation Committee with its charter.
The current members of our Compensation Committee are Paul L. Berns and Michael P. Samar. Mr. Berns serves as the Chair of the committee. Each of the members of our Compensation Committee is independent under the applicable rules and regulations of Nasdaq and is a “non-employee director” as defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Our Compensation Committee has the authority to engage advisors to assist it in carrying out its responsibilities. In accordance with this authority, our Compensation Committee retained Aon's Human Capital Solutions practice, a division of Aon plc (Aon) (“AON Radford”), to serve as its independent compensation consultant and to conduct market research and analysis on our various executive positions, to assist the committee in developing appropriate incentive plans for our executives on an annual basis, to provide the committee with advice and ongoing recommendations regarding material executive compensation decisions, and to review compensation proposals of management. AON Radford reports directly to the Compensation Committee and does not provide any non-compensation related services to the Company. The Compensation Committee reviewed the independence of AON Radford, employing the independence factors specified in the listing requirements of Nasdaq. Based on this assessment, the Compensation Committee determined that the engagement of AON Radford does not raise any conflicts of interest or similar concerns. In addition, the Compensation Committee evaluated the independence of its other outside advisors to the Compensation Committee, including outside legal counsel, considering the same independence factors and concluded their work for the Compensation Committee does not raise any conflicts of interest.
The Compensation Committee operates under a written charter that satisfies the applicable standards of the SEC and the Nasdaq rules. A copy of the Compensation Committee charter is available to security holders on the Company’s website at http://ir.unitybiotechnology.com/investor-relations.
17
The Nominating and Corporate Governance Committee is responsible for making recommendations to our Board regarding candidates for directorships and the size and composition of our Board. In addition, the Nominating and Corporate Governance Committee is responsible for overseeing our corporate governance policies and reporting and making recommendations to our Board concerning governance matters.
The current members of our Nominating and Corporate Governance Committee are Camille D. Samuels and Margo R. Roberts. Ms. Samuels serves as the Chair of the committee. Each of the members of our Nominating and Corporate Governance Committee is an independent director under the applicable rules and regulations of Nasdaq relating to Nominating and Corporate Governance Committee independence.
The Nominating and Corporate Governance Committee operates under a written charter that satisfies the applicable standards of the SEC and Nasdaq rules. A copy of the Nominating and Corporate Governance Committee charter is available to security holders on the Company’s website at http://ir.unitybiotechnology.com/investor-relations.
Our Nominating and Corporate Governance Committee is responsible for reviewing with the Board, on an annual basis, the appropriate characteristics, skills, and experience required for the Board as a whole and its individual members. In evaluating the suitability of individual candidates (both new candidates and current members), the Nominating and Corporate Governance Committee, in recommending candidates for election, and the Board, in approving (and, in the case of vacancies, appointing) such candidates, may take into account many factors, including but not limited to the following:
Currently, our Board evaluates each individual in the context of the Board as a whole, with the objective of assembling a group that can best maximize the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience in these various areas.
The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. For a stockholder to make any nomination for election to the Board at an annual meeting, the stockholder must provide notice to the Company, which notice must be delivered to, or mailed and received at, the Company’s principal executive offices not less than 90 days and not more than 120 days prior to the one-year anniversary of the preceding year’s annual meeting; provided, that if the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, the stockholder’s notice must be delivered, or mailed and received, not later than 90 days prior to the date of the annual meeting or, if later, the 10th day following the date on which public disclosure of the date of such annual meeting is made. Further updates and supplements to such notice may be required at the times, and in the forms, required under our bylaws. As set forth in our bylaws, submissions must include the name and address of the proposed nominee, information regarding the proposed nominee that is required to be disclosed in a proxy statement or other filings in a contested election pursuant to Section 14(a) under the Exchange Act, information regarding the proposed nominee’s indirect and direct interests in shares of the Company’s common stock, and a completed and signed questionnaire, representation, and agreement of the proposed nominee. Our bylaws also specify further requirements as to the form and content of a stockholder’s notice. We recommend that any stockholder wishing to make a nomination for director review a copy of our bylaws, as amended and restated to date, which is available, without charge, from our Corporate Secretary, at Unity Biotechnology, Inc., 285 East Grand Ave., South San Francisco, CA 94080.
18
The Science Committee reviews, evaluates, and advises the Board on the overall strategy, direction, and effectiveness of our research and development programs and related investments, and on our Company’s progress in achieving its long-term strategic research and development goals and objectives. This includes regularly reviewing and making recommendations to the Board and management with respect to the Company’s research and development pipeline, evaluating and advising the Board and management on the opportunities and risks associated with the products, programs. and technologies in which we are, or are considering, investing our research and development efforts, understanding emerging or evolving scientific or technological issues of importance to us, and assisting the Board in understanding our intellectual property position in connection with the foregoing and otherwise.
The current members of our Science Committee are Gilmore O’Neill, Margo R. Roberts, and Nathaniel E. David. Dr. O’Neill serves as the Chair of the committee.
Our Board has adopted an Insider Trading Compliance Policy, which applies to all of our directors, officers, employees, and certain consultants. The policy prohibits our directors, officers, employees, and certain consultants and any entities they control from purchasing financial instruments such as zero-cost collars and forward sale contracts, or otherwise engaging in transactions that hedge, or are designed to hedge, any decrease in the market value of the Company’s equity securities, or that may cause an officer, director, employee, or certain consultants to no longer have the same objectives as the Company’s other stockholders.
Our Board met ten times and acted by unanimous written consent twelve times during 2022. The Audit Committee met four times and acted by unanimous written consent once. The Compensation Committee met seven times and acted by unanimous written consent three times. The Nominating and Corporate Governance Committee met twice and did not act by unanimous written consent. During 2022, each Board member attended at least 75% of the meetings of the Board and of the committees of the Board on which he or she served, in each case, to the extent appointed as a Board member at the relevant time of each meeting. We encourage all of our directors and nominees for director to attend our annual meeting of stockholders; however, attendance is not mandatory.
Should stockholders wish to communicate with the Board or any specified individual directors, such correspondence should be sent to the attention of the Corporate Secretary, at Unity Biotechnology, Inc. 285 East Grand Ave., South San Francisco, CA 94080. The Corporate Secretary will review any such communication and, if appropriate, forward them to the Board or the specified individual directors. Appropriate communications are those that relate to the responsibilities of the intended recipients as directors of the Company. Inappropriate communications include those that are commercial or frivolous in nature, or appear to be unduly hostile, intimidating, threatening, illegal or similarly inappropriate. Such inappropriate communications will not be forwarded.
During 2022, our Compensation Committee consisted of Messrs. Berns, Cooper, Samar and Ms. Kristina Burow. None of the members of our Compensation Committee has at any time been one of our officers or employees. None of our executive officers currently serve, or in the past fiscal year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers on our Board or Compensation Committee. Ms. Burow resigned from our Board effective March 31, 2022. Mr. Cooper resigned from our Board effective May 25, 2022. Mr. Samar joined our Board and our Compensation Committee effective May 25, 2022.
19
We describe below transactions and series of similar transactions, since January 1, 2021, to which we were a party or will be a party, in which:
See “Executive Compensation” and “Director Compensation” for information regarding compensation of directors and executive officers.
We have entered into employment agreements with our executive officers. For more information regarding these agreements, see “Executive Compensation−Narrative to 2022 Summary Compensation Table and Outstanding Equity Awards at 2022 Fiscal Year End.”
We have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us to indemnify each director and executive officer to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys’ fees, judgments, penalties, fines, and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person’s services as a director or executive officer. We have obtained an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicable securities laws.
We entered into an amended and restated investors’ rights agreement with the purchasers of shares of our convertible preferred stock, including entities with which certain of our directors are affiliated, which were outstanding prior to our initial public offering in May 2018 and which converted into shares of common stock in connection therewith. As of December 31, 2022, the holders of approximately 1.1 million shares of our common stock, including the shares of common stock issuable upon exercise of outstanding options, are entitled to rights with respect to the registration of their shares under the Securities Act.
In December 2021, we entered into a licensing agreement with Jocasta Neuroscience, Inc. (“Jocasta”) pursuant to which we exclusively licensed all of our rights to UBX2089, our α-Klotho asset. A member of the Board of Directors of the Company, Nathaniel David, is an affiliate of Jocasta Neuroscience, Inc., also serving on the company's board of directors. The agreement provided for an upfront fee of $5.0 million. Revenue recognized in the year ended December 31, 2021 was related to grant of license and delivery of the know-how performance obligation under the License Agreement. We recognized revenue of $0.2 million and 4.8 million for the years ended December 31, 2022 and 2021, respectively. Revenue recognized in the year ended December 31, 2022 and 2021 was related to grant of license and delivery of the know-how performance obligation under the License Agreement entered into with Jocasta in December 2021.
Our Board has adopted a written related person transaction policy setting forth the policies and procedures for the review and approval or ratification of related person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act of 1933, as amended, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, where the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods, or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness, and employment by us of a related person. In reviewing and approving any such transactions, our Audit Committee is tasked to consider all
20
relevant facts and circumstances, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in an arm’s length transaction with an unrelated third party and the extent of the related person’s interest in the transaction.
21
We maintain a compensation program for our non-employee directors (the “Director Compensation Program”), which was last amended effective March 17, 2023. We do not provide directors who are also our employees any additional compensation for their service as directors.
Pursuant to the Director Compensation Program, effective as of January 1, 2023, each non-employee director receives an annual retainer of $35,000, the lead independent director receives an additional annual retainer of $25,000, the chairman receives an additional annual retainer of $35,000, and non-employee directors who serve on one or more committees are eligible to receive the following annual committee fees:
Committee |
|
Chair |
|
|
Other Member |
|
||
Audit Committee |
|
$ |
15,000 |
|
|
$ |
7,500 |
|
Compensation Committee |
|
|
10,000 |
|
|
|
5,000 |
|
Nominating and Corporate Governance Committee |
|
|
8,000 |
|
|
|
4,000 |
|
Science Committee |
|
|
10,000 |
|
|
|
5,000 |
|
Under the Director Compensation Program, each non-employee director who is elected or appointed to our Board will automatically receive an option to purchase 12,000 shares of our common stock upon the director’s initial appointment or election to our Board (the “Initial Director Grant”). In addition, each non-employee director who is serving on our Board immediately following an annual stockholder’s meeting will automatically be granted an annual option to purchase 6,000 shares of our common stock on the date of such annual stockholder’s meeting (the “Annual Director Grant”), provided that the number of shares subject to the Annual Director Grant will be prorated for any partial year of service as a non-employee director. Each option granted under the Director Compensation Program has an exercise price per share equal to the closing trading price of our common stock on the date of grant (or the immediately preceding trading day if our common stock is not traded on the date of grant). The Initial Director Grant will vest as to 1/36th of the underlying shares on a monthly basis over three years, subject to continued service through each applicable vesting date. The Annual Director Grant will vest in full on the earlier of the first anniversary of the grant date or immediately prior to the next annual stockholders meeting, subject to continued service through the applicable vesting date. All equity awards granted to our non-employee directors under the Director Compensation Program will vest in full immediately prior to the consummation of a change in control.
The following table sets forth information concerning the compensation earned by our non-employee directors during the year ended December 31, 2022. Dr. Ghosh served as both director and executive officer of the Company during fiscal year 2022, and he did not receive any compensation for his services as director during 2022. The 2022 compensation of Dr. Ghosh, as named executive officer, is set forth in the 2022 Summary Compensation Table below.
Name |
|
Fees Earned or |
|
|
Option Awards ($)(1)(2) |
|
|
Total ($) |
|
|||
Paul L. Berns |
|
|
77,500 |
|
|
|
10,748 |
|
|
|
88,248 |
|
Kristina M. Burow (3) |
|
|
11,000 |
|
|
— |
|
|
|
11,000 |
|
|
Graham K. Cooper (4) |
|
|
22,060 |
|
|
— |
|
|
|
22,060 |
|
|
Nathaniel E. David, Ph.D. |
|
|
40,000 |
|
|
|
10,748 |
|
|
|
50,748 |
|
Keith R. Leonard, Jr. |
|
|
70,000 |
|
|
|
10,748 |
|
|
|
80,748 |
|
Gilmore O’Neill, M.B. |
|
|
45,000 |
|
|
|
10,748 |
|
|
|
55,748 |
|
Margo R. Roberts, Ph.D. |
|
|
44,000 |
|
|
|
10,748 |
|
|
|
54,748 |
|
Michael P. Samar (5) |
|
|
32,940 |
|
|
|
27,994 |
|
|
|
60,934 |
|
Camille D. Samuels |
|
|
50,500 |
|
|
|
10,748 |
|
|
|
61,248 |
|
22
Name |
|
Shares Subject to Outstanding Options |
|
|
Paul L. Berns |
|
|
18,474 |
|
Kristina M. Burow |
|
— |
|
|
Graham K. Cooper |
|
— |
|
|
Nathaniel E. David, Ph.D. |
|
|
8,691 |
|
Keith R. Leonard, Jr. |
|
|
146,409 |
|
Gilmore O’Neill, M.B. |
|
|
12,842 |
|
Margo R. Roberts, Ph.D. |
|
|
15,066 |
|
Michael P. Samar |
|
|
5,205 |
|
Camille D. Samuels |
|
|
14,067 |
|
23
The following is biographical information for our executive officers, including their ages as of April 24, 2023 and position/office held with the Company.
Name |
|
Age |
|
Position(s) |
Executive Officers |
|
|
|
|
Anirvan Ghosh, Ph.D. |
|
59 |
|
Chief Executive Officer and Director |
Lynne Sullivan |
|
57 |
|
Chief Financial Officer and Head of Corporate Development |
Jamie Dananberg, M.D.(1) |
|
65 |
|
Chief Medical Officer |
Alexander Nguyen, J.D. |
|
46 |
|
General Counsel and Corporate Secretary |
Executive Officers
Dr. Ghosh’s biographical information is included above under “Proposal No. 1 Election of Directors.”
Lynne Sullivan has served as our Chief Financial Officer since July 2020 and Head of Corporate Development since January 29, 2021. Previously, Ms. Sullivan was Chief Financial Officer at Compass Therapeutics, LLC from December 2018 to August 2019. Prior to that, Ms. Sullivan most recently served as Senior Vice President of Finance for Biogen Inc. (NASDAQ: BIIB) from September 2016 to December 2018. Prior to joining Biogen, Ms. Sullivan served as Senior Vice President, Tax and Corporate Finance for Biogen from June 2015 to December 2018 and served as Vice President, Tax for Biogen from April 2008 to June 2015. From January 2000 through April 2008, Ms. Sullivan served as Vice President Tax for EMD Serono and the Vice President of Tax for North America at Merck KgaA. Ms. Sullivan also currently serves as a member of the boards of directors and as chair of the audit committees of a number of public biopharmaceutical companies, including Solid Biosciences Inc. (NASDAQ: SLDB) and BiomX Inc. (NYSE: PHGE). Ms. Sullivan also currently serves as a member of the board of Inozyme Pharma, Inc. (NASDAQ: INZY). Ms. Sullivan holds an M.S. in taxation from Bentley University and a B.S.B.A. from Suffolk University. Ms. Sullivan was a Certified Public Account for over 20 years.
Jamie Dananberg, M.D. has served as our Chief Medical Officer since January 2016. Prior to that, Dr. Dananberg held roles of increasing responsibility at Takeda Pharmaceutical Company (NYSE: TAK), a public pharmaceutical company, from August 2012 to October 2015, including as Executive Vice President, and at Eli Lilly & Co. (NYSE: LLY), a public pharmaceutical company, from October 2000 to September 2012, including as Vice President for Translational Medicine and Tailored Therapeutics. Dr. Dananberg was at the University of Michigan from 1983 to 1996, where he practiced medicine in Endocrinology & Metabolism and ran a basic science laboratory in metabolic effects on cardiac and vascular function. Dr. Dananberg received a B.S. in Biology and an M.D. from Tufts University. As previously disclosed, Dr. Dananberg's employment with the Company will terminate on April 30, 2023. The Company expects to enter into a consulting agreement with Dr. Dananberg that will provide for his service to the Company as a consultant through December 31, 2023.
Alexander Nguyen, J.D. has served as our General Counsel and Corporate Secretary since March 2021. Most recently, Mr. Nguyen served in a number of leadership roles at Roivant Sciences and its affiliates from May 2016 through November 2019, including as General Counsel at Alyvant, Inc., Head of Legal at Axovant Sciences, Inc. (NASDAQ: SIOX), and Head of Compliance at Roivant Sciences, Inc. (NASDAQ: ROIV). Between 2015 and 2016, Mr. Nguyen served as a litigation partner at Edelson PC. From 2007 through 2015, Mr. Nguyen served as Deputy Section Chief and Federal Prosecutor at the U.S. Attorney’s offices in Alexandria and Philadelphia, respectively. Between 2010 and 2011, Mr. Nguyen additionally served as Assistant White House Counsel. Mr. Nguyen obtained a B.A. from Harvard University and a J.D. from Yale Law School.
24
The following discusses our executive compensation program for our 2022 named executive officers (“NEOs”). As an “emerging growth company” as defined in the JOBS Act, we are not required to include a Compensation Discussion and Analysis section and have elected to comply with the scaled disclosure requirements applicable to emerging growth companies. In addition, as an emerging growth company, we are not required to hold an advisory vote to approve the compensation of our NEOs, or “say-on-pay” vote.
Our Compensation Committee, the members of which are appointed by our Board, is responsible for establishing, implementing, and monitoring our compensation philosophy and objectives. We seek to ensure that the total compensation paid to our executive officers is reasonable and competitive. Compensation of our executives is structured around the achievement of individual performance and near-term corporate targets as well as long-term business objectives.
Our NEOs for fiscal year 2022 and their positions with the Company were as follows:
Dr. Dananberg's employment with the Company will terminate on April 30, 2023.
The following table sets forth total compensation earned by our NEOs for the fiscal years presented.
Name and Principal Position |
|
Year |
|
Salary ($) |
|
|
Bonus ($)(1) |
|
|
|
Stock |
|
|
Option |
|
|
Non-Equity |
|
|
All Other Compensation ($)(4) |
|
|
|
Total ($) |
|
|||||||
Anirvan Ghosh, Ph.D., |
|
2022 |
|
|
580,000 |
|
|
|
200,000 |
|
|
|
|
150,167 |
|
|
|
802,651 |
|
|
|
287,100 |
|
|
|
12,200 |
|
|
|
|
1,085,300 |
|
Chief Executive Officer |
|
2021 |
|
|
562,376 |
|
|
— |
|
|
|
|
1,515,519 |
|
|
|
1,535,653 |
|
|
|
284,562 |
|
|
|
38,600 |
|
|
|
|
3,936,710 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Lynne Sullivan, |
|
2022 |
|
|
453,200 |
|
|
|
100,000 |
|
|
|
|
53,000 |
|
|
|
300,365 |
|
|
|
165,418 |
|
|
|
12,200 |
|
|
|
|
730,818 |
|
Chief Financial Officer and Head of Corporate Development |
|
2021 |
|
|
440,000 |
|
|
— |
|
|
|
|
128,882 |
|
|
|
373,169 |
|
|
|
163,240 |
|
|
|
11,600 |
|
|
|
|
1,116,891 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Jamie Dananberg, M.D., |
|
2022 |
|
|
464,386 |
|
|
|
100,000 |
|
|
|
|
48,583 |
|
|
|
260,211 |
|
|
|
167,719 |
|
|
|
12,200 |
|
|
|
|
743,765 |
|
Chief Medical Officer |
|
2021 |
|
|
455,281 |
|
|
— |
|
|
|
|
104,500 |
|
|
|
302,570 |
|
|
|
168,909 |
|
|
|
11,600 |
|
|
|
|
1,042,860 |
|
|
25
Outstanding Equity Awards at 2022 Fiscal Year End
The following table lists all outstanding equity awards held by our NEOs as of December 31, 2022. All share numbers, share prices and exercise prices have been adjusted to reflect our October 2022 reverse stock split.
|
|
|
|
Option Awards |
|
Stock Awards |
|
|||||||||||||||||||||||||
Name |
|
Vesting Commencement Date |
|
Number of Securities Underlying Unexercised Options Exercisable (#) |
|
|
Number of Securities Underlying Unexercised Options Unexercisable (#) |
|
|
Option Exercise Price ($) |
|
|
Option Expiration Date |
|
Number of Shares or Units of Stock That Have Not Vested (#) |
|
|
Market Value of Shares or Units of Stock That Have Not Vested ($)(1) |
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) |
|
|||||||
Anirvan Ghosh, Ph.D. |
|
3/30/2020(2) |
|
|
55,000 |
|
|
|
25,000 |
|
|
|
59.50 |
|
|
3/29/2030 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
3/30/2020(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000 |
|
|
|
10,960 |
|
|
|
|
|
|
|
|||||
|
|
3/30/2020(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000 |
|
|
|
41,100 |
|
|||||
|
|
9/13/2020(2) |
|
|
14,062 |
|
|
|
10,937 |
|
|
|
29.40 |
|
|
9/12/2030 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
9/13/2020(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
7,500 |
|
|
|
20,550 |
|
|
|
|
|
|
|
|||||
|
|
1/29/2021(2) |
|
|
7,187 |
|
|
|
7,813 |
|
|
|
59.75 |
|
|
1/28/2031 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
1/29/2021(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
10,415 |
|
|
|
28,537 |
|
|
|
|
|
|
|
|||||
|
|
6/24/2021(6) |
|
|
10,874 |
|
|
|
18,126 |
|
|
|
41.80 |
|
|
6/23/2031 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
6/24/2021(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
4,800 |
|
|
|
13,152 |
|
|
|
|
|
|
|
|||||
|
|
2/1/2022(2) |
|
— |
|
|
|
56,666 |
|
|
|
10.60 |
|
|
3/2/2032 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
2/1/2022(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
14,166 |
|
|
|
38,815 |
|
|
|
|
|
|
|
|||||
|
|
11/18/2022(10) |
|
— |
|
|
|
200,000 |
|
|
|
2.38 |
|
|
11/17/2032 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Lynne Sullivan |
|
8/1/2020(2)(9) |
|
|
14,000 |
|
|
|
10,000 |
|
|
99.6 |
|
|
7/31/2030 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
9/13/2020(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000 |
|
|
|
16,440 |
|
|
|
|
|
|
|
|||||
|
|
6/24/2021(6) |
|
|
4,623 |
|
|
|
7,710 |
|
|
41.8 |
|
|
6/23/2031 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
6/24/2021(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
2,055 |
|
|
|
5,631 |
|
|
|
|
|
|
|
|||||
|
|
2/1/2022(2) |
|
— |
|
|
|
20,000 |
|
|
|
10.60 |
|
|
3/2/2032 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
2/1/2022(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000 |
|
|
|
13,700 |
|
|
|
|
|
|
|
|||||
|
|
11/18/2022(10) |
|
— |
|
|
|
80,000 |
|
|
|
2.38 |
|
|
11/17/2032 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Jamie Dananberg, M.D. |
|
1/10/2016(7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,336 |
|
|
|
9,141 |
|
|||||
|
|
5/2/2018(2) |
|
|
3,050 |
|
|
— |
|
|
|
170.00 |
|
|
5/1/2028 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
6/20/2019(8) |
|
|
9,345 |
|
|
|
1,334 |
|
|
|
90.00 |
|
|
6/19/2029 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
3/30/2020(8) |
|
|
6,770 |
|
|
|
3,078 |
|
|
|
59.50 |
|
|
3/29/2030 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
3/30/2020(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
808 |
|
|
|
2,214 |
|
|
|
|
|
|
|
|||||
|
|
9/13/2020(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000 |
|
|
|
16,440 |
|
|
|
|
|
|
|
|||||
|
|
6/24/2021(6) |
|
|
3,749 |
|
|
|
6,251 |
|
|
|
41.80 |
|
|
6/23/2031 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
6/24/2021(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,666 |
|
|
|
4,565 |
|
|
|
|
|
|
|
|||||
|
|
2/1/2022(2) |
|
— |
|
|
|
18,332 |
|
|
|
10.60 |
|
|
3/2/2032 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
2/1/2022(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
4,583 |
|
|
|
12,557 |
|
|
|
|
|
|
|
|||||
|
|
11/18/2022(10) |
|
— |
|
|
|
65,000 |
|
|
|
2.38 |
|
|
11/17/2032 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
26
Narrative to 2022 Summary Compensation Table and Outstanding Equity Awards at 2022 Fiscal Year End
We believe our executive compensation program is closely aligned with stockholders’ interests. While base salary and an annual performance-based cash incentive opportunity incentivize the achievement of shorter-term goals, our long-term equity awards represent a longer-term compensation structure that promotes retention and continuous commitment to the operating results of the Company. We further believe this compensation mix rewards each executive, including the NEOs, for their individual contributions to the Company, both present and future.
At this phase in our growth cycle, a majority of the total direct compensation of our NEOs is directly tied, through the use of equity awards, to the growth in the value of our common stock.
The Compensation Committee oversees our executive compensation program (including our executive compensation policies and practices), administers our various equity plans and approves or makes recommendations regarding the compensation of our executive officers, including our NEOs, to the Board. The Compensation Committee reviews the performance of each NEO to determine whether to make any changes to their compensation. The Compensation Committee approves such changes or presents its recommendations to our Board for review and final approval.
Our Chief Executive Officer makes recommendations to the Compensation Committee regarding the salary, annual cash incentive award, and equity awards for the executive officers other than himself, including the other NEOs. At the Compensation Committee’s request, our Chief Executive Officer reviews with the Compensation Committee the individual performance of each of the other executive officers, including each of our other NEOs. The Compensation Committee gives considerable weight to our Chief Executive Officer’s evaluations and determines whether the recommended changes in each executive officer’s compensation, if any, are appropriate.
The Compensation Committee receives support from our Human Resources Department in designing our executive compensation program and analyzing competitive market practices. In addition, our Chief Executive Officer participates in Compensation Committee meetings (other than when his own compensation is being discussed), providing input from our executive team on organizational structure, executive development, and financial analysis.
While the Compensation Committee does not establish compensation levels based solely on a review of competitive market data, it believes that such data is a useful tool in its deliberations as it recognizes that our compensation policies and practices must be competitive in the marketplace for us to be able to attract, motivate, and retain qualified executive officers. Generally, the Compensation Committee reviews our executive compensation relative to our established competitive market (based on an analysis of the compensation
27
policies and practices of a select group of peer companies) every year. The Compensation Committee uses the competitive market data when evaluating all aspects of executive compensation. The Compensation Committee engages AON Radford to assist with updating our compensation peer group and assessing the competitiveness of our executive compensation program.
We use base salary to compensate our NEOs for their experience, skills, knowledge, role, and responsibilities. When establishing the base salaries of our NEOs, our Board of Directors and the Compensation Committee consider a variety of factors, including each NEO’s seniority and level of responsibility as well as competitive market data and our ability to find a replacement if the individual left our employment. T