DEF 14A of Instil Bio, Inc., Apr 26, 2024

DEF 14A of Instil Bio, Inc.

Filed Apr 26, 2024 · FY20230001789769-24-000051

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS The Board is divided into three classes, and each class has a three-year term. Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified. The Board presently has five members. There are two directors in the class whose term of office expires in 2024. Each of the nominees listed below is currently a director of the Company who was previously elected by the stockholders. If elected at the Annual Meeting, each of these nominees would serve until the 2027 Annual Meeting of Stockholders and until his or her successor has been duly elected and qualified, or, if sooner, until the director’s death, resignation or removal. It is the Company’s policy to invite and encourage directors and nominees for director to attend each Annual Meeting of Stockholders. Last year, three of our directors participated telephonically in the 2023 Annual Meeting of Stockholders. Directors are elected by a plurality of the votes of the holders of shares present or represented by proxy and entitled to vote on the election of directors. Accordingly, the two nominees receiving the highest number of affirmative votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the two nominees named below. If any nominee becomes unavailable for election as a result of an unexpected occurrence, shares that would have been voted for that nominee will instead be voted for the election of a substitute nominee proposed by Instil Bio. Each person nominated for election has agreed to serve if elected. The Company’s management has no reason to believe that any nominee will be unable to serve.

  2. CLASS III NOMINEES FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE 2027 ANNUAL MEETING

    CLASS III NOMINEES FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE 2027 ANNUAL MEETING The following is a brief biography, as of the date of this proxy statement, of each nominee for director and a discussion of the specific experience, qualifications, attributes or skills of each nominee that led the Nominating and Corporate Governance Committee of the Board to recommend that person as a nominee for director. The Nominating and Corporate Governance Committee seeks to assemble a board that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise and high-level management experience necessary to oversee and direct the Company’s business. To that end, the Committee has identified and evaluated nominees in the broader context of the Board’s overall composition, with the goal of recruiting members who complement and strengthen the skills of other members and who also exhibit integrity, collegiality, sound business judgment and other qualities that the Committee views as critical to effective functioning of the Board. To provide a mix of experience and perspective on the Board, the Committee also takes into account gender, age, and ethnic diversity. The brief biographies below include information, as of the date of this proxy statement, regarding the specific and particular experience, qualifications, attributes or skills of each director or nominee that led the Committee to believe that that nominee should continue to serve on the Board. Gwendolyn Binder, age 49 Gwendolyn Binder, Ph.D. has served as a member of our Board since July 2020. Dr. Binder is President of Science and Technology at Cabaletta Bio, Inc., which she joined in February 2019. Dr. Binder previously served in various roles for Adaptimmune Therapeutics PLC from March 2011 to January 2019, most recently as Chief Technology Officer from March 2016 to January 2019 and Executive Vice President, Head of Translational Sciences from March 2011 to February 2016. Dr. Binder earned her B.A. from Wells College in biochemistry and molecular biology and studied viral immunology and translational research at the Johns Hopkins University in Baltimore, where she earned her Ph.D. in Cellular and Molecular Medicine in 2002. Our Board believes that Dr. Binder is qualified to serve as a director based upon her extensive experience in the biotechnology industry. R. Kent McGaughy, Jr., age 52 R. Kent McGaughy, Jr. has served as a member of our Board since June 2020. He has served as a Partner of CPMG, Inc. since 2005. Mr. McGaughy also served on the board of directors of Apollo Endosurgery from January 2012 to April 2023 and Reata Pharmaceuticals Inc. from December 2004 to September 2023. He earned a B.A. from the University of Texas and an M.B.A. from Harvard Business School. Our Board believes that Mr. McGaughy is qualified to serve as a director based upon his extensive leadership as an investor in the medical technologies industry and his financial expertise.

  3. CLASS III NOMINEES FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE 2027 ANNUAL MEETING

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

  4. DIRECTORS CONTINUING IN OFFICE UNTIL THE 2025 ANNUAL MEETING

    DIRECTORS CONTINUING IN OFFICE UNTIL THE 2025 ANNUAL MEETING Bronson Crouch, age 51 Bronson Crouch has served as our Chief Executive Officer and Chairman of our Board since November 2018. In addition to serving as our Chief Executive Officer and Chairman, Mr. Crouch has served as Founding Partner of Curative Ventures Management LLC since January 2014. Our Board believes that Mr. Crouch is qualified to serve as a director based on his extensive experience in venture capital and in the biotechnology industry.

  5. DIRECTORS CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING

    DIRECTORS CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING George Matcham, age 72 George Matcham, Ph.D. has served as a member of our Board since September 2018. He previously served in various roles for Celgene Corporation since 1988, most recently as Senior Vice President, CAR T CMC & Technology Development from August 2017 to June 2018 and Senior Vice President, Biologics Development and Manufacturing from May 2013 to August 2017, with responsibility for CAR T CMC & Manufacturing from September 2015. Dr. Matcham served on the board of Chimeric Therapeutics from July 2021 to August 2023. Dr. Matcham received his B.Sc. and Ph.D. in biochemistry from Cardiff University. Our Board believes that Dr. Matcham is qualified to serve as a director based upon his extensive experience in the biotechnology industry. Neil Gibson, age 68 Neil Gibson, Ph.D. has served as a member of our Board since June 2020 and as our lead independent director since March 2021. Dr. Gibson most recently served as Senior Vice President of COI Pharmaceuticals, Inc., an accelerator company focused on the creation and development of unique drug discovery companies based on innovative and disruptive technologies, from October 2016 to December 2021. Previously, he served as President and Chief Executive Officer of Adanate from 2017 to November 2021 and President and Chief Executive Officer of PDI Therapeutics from 2017 to June 2020, both COI Pharmaceuticals, Inc. companies. Dr. Gibson has served on the board of TCR2, Shattuck Laboratories and Causeway Therapeutics since 2017 and Adanate since 2021 and previously served on the board of Cytosen Therapeutics from 2016 to 2019. Dr. Gibson earned his B.Sc. in Pharmacy from the University of Strathclyde and his Ph.D. from the University of Aston. Our Board believes that Dr. Gibson is qualified to serve as a director because of his extensive experience as an executive officer in the biopharmaceutical industry.

  6. BOARD DIVERSITY

    BOARD DIVERSITY The Board Diversity Matrix below provides the self-identified diversity statistics for our Board as of the date of this proxy statement. Our previous year’s Board Diversity Matrix can be found in our definitive proxy statement filed with the SEC on April 28, 2023.

  7. BOARD DIVERSITY

    | Board Diversity Matrix as of April 26, 2024 | | | | | | Total Number of Directors | 5 | | | | | | Female | Male | Non-Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | | | | Directors | 1 | 3 | — | 1 | | Part II: Demographic Background | | | | | | African American or Black | — | — | — | — | | Alaskan Native or Native American | — | — | — | — | | Asian | — | — | — | — | | Hispanic or LatinX | — | — | — | — | | Native Hawaiian or Pacific Islander | — | — | — | — | | White | 1 | 3 | — | — | | Two or more races or ethnicities | — | — | — | — | | LGBTQ+ | — | | | | | Did not disclose demographic background | 1 | | | |

  8. INFORMATION REGARDING THE BOARD OF DIRECTORS

    INFORMATION REGARDING THE BOARD OF DIRECTORS

  9. Summary Compensation Table

    Summary Compensation Table The following table sets forth information regarding compensation awarded to, earned by and paid to our named executive officers with respect to the fiscal years ended December 31, 2023 and December 31, 2022:

  10. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($) | Total ($) | | Bronson Crouch(3) | 2023 | 684,653 | 423,833(4) | 437,100 | — | 31,703(5) | 1,577,289 | | Chief Executive Officer and Chairman | 2022 | 633,631 | — | 4,219,650 | 20,475 | 18,261 | 4,892,017 | | Sandeep Laumas | 2023 | 489,038 | 232,875(4) | 181,397 | — | 19,608(6) | 922,918 | | Chief Financial Officer and Chief Business Officer | 2022 | 463,708 | — | 1,316,531 | 11,250 | 14,181 | 1,805,670 | | Sumita Ray | 2023 | 47,509 | — | 181,397 | — | 501,236(7) | 730,142 | | Former Chief Legal, Compliance and Administrative Officer | 2022 | 332,917 | — | 2,367,335 | — | 109,828 | 2,810,080 |

  11. Summary Compensation Table

    __________________________ (1)This column reflects the aggregate grant date fair value of option awards granted during the year measured pursuant to Financial Accounting Standard Board Accounting Standards Codification Topic 718, the basis for computing stock-based compensation in our financial statements. This calculation assumes that the named executive officer will perform the requisite service for the award to vest in full as required by SEC rules. The assumptions we used in valuing options are described in note 9 “Stock-Based Compensation” to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. These amounts do not reflect the actual economic value that will be realized by the named executive officer upon vesting of the stock options, the exercise of the stock options, or the sale of the common stock underlying such stock options. (2)See “—Narrative to Summary Compensation Table—Non-Equity Incentive Plan Compensation” below for a description of the material terms of the program pursuant to which this compensation was awarded. (3) Mr. Crouch is also a member of our Board, but did not receive any additional compensation in his capacity as a director. (4) Represents discretionary retention bonus payments, which are subject to repayment to the Company in full within 30 days of termination in the event the named executive officer resigns without good reason or is terminated for cause at any time on or prior to February 22, 2024. See “—Narrative to Summary Compensation Table—Retention Bonuses” below for a description of the material terms of the retention bonus agreements pursuant to which this compensation was awarded. (5) Includes $12,095 in employer contributions to a 401(k) plan and $17,072 in employer contributions to health insurance coverage. See “—Retirement Benefits and Other Compensation.” (6) Includes $17,072 in employer contributions to medical insurance coverage. See “—Retirement Benefits and Other Compensation.” (7) Includes $493,500 in severance payments made to Ms. Ray pursuant to her separation agreement. See “—Employment Agreements with our Named Executive Officers.”

  12. Outstanding Equity Awards as of December 31, 2023

    Outstanding Equity Awards as of December 31, 2023 The following table sets forth certain information about outstanding equity awards granted to our named executive officers that were outstanding as of December 31, 2023.

  13. Outstanding Equity Awards as of December 31, 2023

    | | Option Awards(1) | | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(2) | Number of Securities Underlying Unexercised Options (#) Unexercisable(2) | Option Exercise Price ($)(2)(3) | Option Expiration Date | | Bronson Crouch | 8/29/2019 | 43,108 | — | 6.80 | 8/28/2029 | | | 8/6/2020(4) | 124,793 | 21,308 | 23.00 | 8/5/2030 | | | 2/10/2021(5) | 42,499 | 17,500 | 118.80 | 2/9/2031 | | | 2/10/2021(6) | 41,250 | 18,750 | 118.80 | 2/9/2031 | | | 5/11/2021(7) | 24,218 | 13,282 | 325.00 | 5/10/2031 | | | 3/4/2022(8) | 16,404 | 21,096 | 172.40 | 3/3/2032 | | | 1/8/2023(9) | — | 49,999 | 12.68 | 1/7/2033 | | Sandeep Laumas, M.D. | 8/29/2019 | 39,500 | — | 6.80 | 8/28/2029 | | | 8/29/2019 | 36,000 | — | 6.80 | 8/28/2029 | | | 8/6/2020(4) | 26,979 | 4,610 | 23.00 | 8/5/2030 | | | 2/10/2021(5) | 4,250 | 1,750 | 118.00 | 2/9/2031 | | | 2/10/2021(6) | 8,249 | 3,750 | 118.00 | 2/9/2031 | | | 5/11/2021(7) | 6,458 | 3,542 | 325.00 | 5/10/2031 | | | 3/4/2022(8) | 5,112 | 6,588 | 172.40 | 3/3/2032 | | | 1/8/2023(9) | — | 20,749 | 12.68 | 1/7/2033 | | Sumita Ray, J.D. | 4/22/2022(5) | 7,968(10) | — | 168.00 | 4/21/2032 |

  14. Outstanding Equity Awards as of December 31, 2023

    ______________________ (1)All of the awards in this table granted prior to March 22, 2021 were granted under the 2018 Plan, and all awards in this table granted subsequent to March 22, 2021 were granted under the 2021 Equity Incentive Plan. (2)The exercise price and number of shares subject to the options granted under the 2018 Plan and 2021 Equity Incentive Plan were adjusted in connection with the 1-for-20 reverse stock split of our common stock effected on December 7, 2023. Accordingly, the share totals and exercise prices shown in the table above reflect our NEOs’ post reverse stock split holdings. (3)All of the option awards listed in the table granted prior to March 22, 2021 were granted with a per share exercise price equal to or above the estimated fair value of our common stock on the date of grant, as determined in good faith by our Board. All of the option awards listed in the table granted after March 22, 2021 were granted with a per share exercise price equal to the closing price of one share of our common stock on the date of grant. (4)25% of the shares subject to this award vested on July 1, 2021, with the remaining shares vesting in substantially equal monthly installments over the three years thereafter, in each case subject to the named executive officer’s continued service through the applicable vesting date. (5)25% of the shares subject to this award vest on the first anniversary of the grant date, with the remaining shares vesting in substantially equal monthly installments over the three years thereafter, in each case subject to the named executive officer’s continued service through the applicable vesting date. (6)This award vests in substantially equal monthly installments over the four years following March 19, 2021, in each case subject to the named executive officer’s continued service through the applicable vesting date. (7)This award vests in substantially equal monthly installments over the four years following the grant date, in each case subject to the named executive officer’s continued service through the applicable vesting date. (8)25% of the shares subject to this award vested on March 4, 2023, with the remaining shares vesting in substantially equal monthly installments over the three years thereafter, in each case subject to the named executive officer’s continued service through the applicable vesting date. (9)25% of the shares subject to this award vested on January 8, 2024, with the remaining shares vesting in substantially equal monthly installments over the three years thereafter, in each case subject to the named executive officer’s continued service through the applicable vesting date. (10)Ms. Ray separated as an employee effective May 9, 2023. Pursuant to her separation agreement, Ms. Ray was entitled to accelerated vesting of outstanding options scheduled to vest within six months of her separation date and an extended post-termination exercise period ending on the one-year anniversary of her separation date. See “—Employment Agreements with our Named Executive Officers.”

  15. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  16. Non-Employee Director Compensation

    Non-Employee Director Compensation The following table shows for the fiscal year ended December 31, 2023 certain information with respect to the compensation of our non-employee directors:

  17. Non-Employee Director Compensation

    | Name(1) | Fees Earned or Paid in Cash ($)(2) | Option Awards ($)(3)(4) | Total ($) | | Gwendolyn Binder, Ph.D. | 46,000 | 11,151 | 57,151 | | Neil Gibson, Ph.D. | 71,500 | 11,151 | 82,651 | | George Matcham, Ph.D. | 46,000 | 11,151 | 57,151 | | R. Kent McGaughy, Jr. | 55,000 | 11,151 | 66,151 | | Jack Nielsen(5) | 47,500 | 11,151 | 58,651 |

  18. Non-Employee Director Compensation

    ______________________ (1)Bronson Crouch, our Chief Executive Officer, is also a member of our Board, but he does not receive any additional compensation for his service as a director. Mr. Crouch’s compensation for the fiscal year ended December 31, 2023 is reflected in the Summary Compensation Table above. (2)Includes amounts earned by Dr. Binder for service as chairperson, and Drs. Gibson and Matcham as members, of our Science and Technology Committee prior to its dissolution in April 2023. (3)The amounts reported do not reflect the amounts actually received by our non-employee directors. Instead, these amounts reflect the aggregate grant date fair value of each stock option granted to our non-employee directors during the fiscal year ended December 31, 2023, as computed in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718 for stock-based compensation transactions. Assumptions used in the calculation of these amounts are included in note 9 “Stock-Based Compensation” to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Our non-employee directors who have received options will only realize compensation with regard to these options to the extent the trading price of our common stock is greater than the exercise price of such options. (4)As of December 31, 2023, Dr. Binder held options to purchase 6,199 shares of our common stock and each of, Dr. Gibson, Dr. Matcham, Mr. McGaughy and Mr. Nielsen held options to purchase 5,599 shares of our common stock. None of our non-employee directors held any stock awards as of December 31, 2023. (5)Mr. Nielsen resigned from the Board effective April 24, 2024.

  19. Narrative to the Non-Employee Director Compensation Table

    Narrative to the Non-Employee Director Compensation Table Our Board adopted a non-employee director compensation policy that became effective in March 2021, which was most recently amended effective as of April 1, 2024. Pursuant to this compensation policy, each of our directors who is not an employee or consultant of Instil Bio or any of its subsidiaries (an “eligible director”) is eligible to receive compensation for service on our Board and committees of our Board. Pursuant to the non-employee director compensation policy as in effect for the fiscal year ended December 31, 2023, each eligible director received an annual cash retainer of $35,000 for serving on our Board, and the lead independent director of our Board received an additional annual cash retainer of $20,000 for his or her service. The chairperson of the audit committee of our Board received an additional annual cash retainer of $20,000, the chairperson of the compensation committee of our Board received an additional annual cash retainer of $10,000, and the chairperson of the nominating and corporate governance committee of our Board received an additional annual cash retainer of $8,000. The members of the audit committee of our Board received an additional annual cash retainer of $7,500, the members of the compensation committee of our Board received an additional annual cash retainer of $5,000, and the members of the nominating and corporate governance committee of our Board received an additional annual cash retainer of $4,000; however, in each case such cash retainer was payable only to members who were not the chairperson of such committee. Prior to the dissolution of our Science & Technology Committee in April 2023, the chairperson of this committee was entitled to an additional annual cash retainer of $8,000, and the members of this committee other than the chairperson were entitled to an additional annual cash retainer of $4,000. In addition, each new eligible director who joined our Board was eligible to receive a non-statutory stock option to purchase 60,000 shares of our common stock under our 2021 Equity Incentive Plan, with the shares vesting in 36 substantially equal monthly installments, subject to continued service as a director through each vesting date. On the date of each annual meeting of our stockholders, each eligible director who continued to serve as a director of our company following the meeting would be granted a non-statutory stock option to purchase 30,000 shares of our common stock under our 2021 Equity Incentive Plan, with the shares vesting in 12 substantially equal monthly installments, subject to continued service as a director through each vesting date, provided that the shares will vest in full upon a “change in control,” as defined in our 2021 Equity Incentive Plan.

  20. Amended and Restated Non-Employee Director Compensation Policy

    Amended and Restated Non-Employee Director Compensation Policy Following a review of the Company’s non-employee director compensation program by the Compensation Committee’s compensation consultant in the first quarter of 2024, the Board approved an amended and restated non-employee director compensation policy, effective as of April 1, 2024. Pursuant to the amended and restated non-employee director compensation policy, eligible directors will receive the following compensation for their service on our Board: Annual Cash Compensation Each eligible director is entitled to receive an annual cash retainer of $40,000 for serving on our Board. An eligible director that serves as independent chair of our Board is entitled to receive an additional annual cash retainer of $30,000, and an eligible director that serves as lead independent director of our Board is entitled to receive an additional annual cash retainer of $20,000. The chairperson of the audit committee of our Board is entitled to receive an additional annual cash retainer of $20,000, the chairperson of the compensation committee of our Board entitled to receive an additional annual cash retainer of $12,000, and the chairperson of the nominating and corporate governance committee of our Board is entitled to receive an additional annual cash retainer of $8,000. The members of the audit committee of our Board are entitled to receive an additional annual cash retainer of $7,500, the members of the compensation committee of our Board are entitled to receive an additional annual cash retainer of $6,000, and the members of the nominating and corporate governance committee of our Board are entitled to receive an additional annual cash retainer of $4,000; however, in each case such cash retainer is payable only to members who are not the chairperson of such committee. Equity Compensation Each non-employee director who is first elected or appointed to our Board following April 1, 2024 will receive an option to purchase 5,000 shares of our common stock, which will vest in substantially equal monthly installments over a two-year period, subject to such director’s continued service through each such vesting date, provided that such grant will vest in full in the event of such director’s death or disability or upon a change in control (as such terms are defined in our 2021 Equity Incentive Plan). Each such new non-employee director who is first appointed to the Board on a date other than the date of the annual stockholder meeting will also receive an option to purchase a pro-rata portion of the annual grant for continuing directors (as described below), which shares will vest in substantially equal monthly installments such that the option is fully vested on the earlier to occur of the (1) first anniversary of the most recently completed annual stockholder meeting and (2) the date of the next annual stockholder meeting, subject to continued service as a director through each vesting date, provided that the pro-rated annual grant will vest in full in the event of such director’s death or disability or upon a change in control. On the date of each annual stockholder meeting held after April 1, 2024, each non-employee director who continues to serve on our Board following such stockholder meeting will receive an option to purchase 5,000 shares of our common stock, which shares will vest in substantially equal monthly installments over a one-year period, subject to such director’s continued through such vesting date, provided that any portion of the annual grant not yet vested on the date of the next annual stockholder meeting shall vest in full and the shares will also vest in full in the event of such director’s death or disability or upon a change in control. Non-Employee Director Compensation Limit As provided in our 2021 Equity Incentive Plan, and notwithstanding the foregoing, the aggregate value of all compensation granted or paid, as applicable, to any non-employee director with respect to any period commencing on the date of the Company’s annual meeting of stockholders for a particular year and ending on the day immediately prior to the date of the Company’s annual meeting of stockholders for the next subsequent year will not exceed (1) $750,000 in total value or (2) in the event such non-employee director is first appointed or elected to the Board during such period, $1,000,000 in total value.