DEF 14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Pursuant to §240.14a-12

EPIZYME, INC.

(Exact 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 the appropriate box):

  No fee required.
  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1)   Title of each class of securities to which transaction applies:
  (2)   Aggregate number of securities to which transaction applies:
  (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
  (4)   Proposed maximum aggregate value of transaction:
  (5)   Total fee paid:
  Fee paid previously with preliminary materials.
  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  (1)   Amount Previously Paid:
  (2)   Form, Schedule or Registration Statement No.:
  (3)   Filing Party:
  (4)   Date Filed:

 

 

 


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LOGO

EPIZYME, INC.

400 Technology Square, 4th Floor

Cambridge, Massachusetts 02139

NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS

To be held June 11, 2021

You are cordially invited to attend the 2021 Annual Meeting of Stockholders, or the Annual Meeting, of Epizyme, Inc., which is scheduled to be held on Friday, June 11, 2021 at 10:00 a.m. Eastern time. The Annual Meeting will be held via the Internet this year, at a virtual web conference at www.meetingcenter.io/209067253.

Only stockholders who owned common stock at the close of business on April 16, 2021 can vote at the Annual Meeting or any adjournment that may take place. At the Annual Meeting, the stockholders will consider and vote on the following matters:

 

  1.

Election of three class II directors to our board of directors, each to serve until the 2024 annual meeting of stockholders;

 

  2.

Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021;

 

  3.

Approval on an advisory (non-binding) basis, of the compensation of our named executive officers;

 

  4.

Approval of an amendment to our Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 150,000,000 to 225,000,000; and

 

  5.

Transaction of any other business properly brought before the Annual Meeting or any adjournment or postponement of the Annual Meeting.

You can find more information, including the nominees for director, in the proxy statement for the Annual Meeting, which is available for viewing, printing and downloading at http://www.edocumentview.com/epzm. The board of directors recommends that you vote in favor of each of proposals one through four as outlined in the attached proxy statement.

Instead of mailing a paper copy of our proxy materials to all of our stockholders, we are providing access to our proxy materials over the Internet under the Securities and Exchange Commission’s “notice and access” rules. As a result, we are sending to our stockholders a Notice of Internet Availability of Proxy Materials, or the Notice, instead of a paper copy of this proxy statement and our Annual Report to Stockholders for the fiscal year ended December 31, 2020, or the 2020 Annual Report. We plan to mail the Notice on or about April 29, 2021. The Notice contains instructions on how to access our proxy materials over the Internet. The Notice also contains instructions on how each of our stockholders can receive a paper copy of our proxy materials, including the proxy statement, our 2020 Annual Report, and a form of proxy card.

We cordially invite all stockholders to attend the Annual Meeting online. Holders of our common stock as of the close of business on April 16, 2021, the record date for the Annual Meeting, are entitled to notice of, and to vote at, the Annual Meeting or any adjournment or postponement of the Annual Meeting. Whether or not you expect to attend the Annual Meeting online, please vote your shares to ensure your representation and the presence of a quorum at the Annual Meeting. If you are a holder of our common stock as of the close of business on the record date, you may vote your shares on the Internet by visiting https://www.investorvote.com/epzm, by telephone by calling 1-800-652-VOTE (8683) and following the recorded instructions or by completing, signing, dating, and


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returning a proxy card. Your vote is important regardless of the number of shares you own. If you mail your proxy card or vote by telephone or the Internet and then decide to attend the Annual Meeting online to vote your shares during the meeting, you may still do so. Your proxy is revocable in accordance with the procedures set forth in the proxy statement.

If your shares are held in “street name,” that is, held for your account by a broker or other nominee, you will receive instructions from the holder of record that you must follow for your shares to be voted.

Our Annual Meeting will be a “virtual meeting” of stockholders this year, which will be conducted exclusively via the Internet as a virtual web conference. There will not be a physical meeting location, and stockholders will not be able to attend the Annual Meeting in person. This means that you can attend the Annual Meeting online, vote your shares during the online meeting and submit questions during the online meeting by visiting www.meetingcenter.io/209067253. We believe that hosting a “virtual meeting” will enable greater stockholder attendance and participation from any location around the world.

A complete list of registered stockholders will be available to holders of our common stock as of the close of business on the record date of April 16, 2021 during the Annual Meeting for examination at www.meetingcenter.io/209067253.

 

By Order of the Board of Directors,

/s/ Robert Bazemore

Robert Bazemore
President and Chief Executive Officer

Cambridge, Massachusetts

April 29, 2021


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Epizyme, Inc.

Proxy Statement

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     Page  

Proxy Statement

     1  

Important Information About the Annual Meeting and Voting

     2  

Proposal No. 1: Election of Class II Directors

     7  

Proposal No. 2: Ratification of the Appointment of Ernst  & Young LLP as Our Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 2021

     14  

Corporate Governance

     15  

Executive Compensation

     24  

Proposal No. 3: Advisory Vote on Executive Compensation

     51  

Proposal No.  4: Approval of an Amendment to Our Restated Certificate of Incorporation to Increase the Number of Authorized Shares of Common Stock

     52  

Transactions with Related Persons

     54  

Principal Stockholders

     57  

Delinquent Section 16(a) Reports

     59  

Report of the Audit Committee

     60  

Householding

     60  

Stockholder Proposals

     61  

Other Matters

     61  

Unless otherwise stated or the context indicates otherwise, all references in this proxy statement to “Epizyme,” “Epizyme, Inc.,” “we,” “us,” “our,” “our company,” “the Company” and similar references refer to Epizyme, Inc. and its wholly owned subsidiary, Epizyme Securities Corporation; all references herein to “TAZVERIK® (tazemetostat),” “TAZVERIK®” and “TAZVERIK” refer to tazemetostat in the context of the commercially-available product for which we received accelerated approval from the United States Food and Drug Administration, or FDA, in January 2020 for epithelioid sarcoma, or ES, and in June 2020 for follicular lymphoma, or FL; and all references herein to “tazemetostat” refer to tazemetostat in the context of the product candidate for which we are exploring further applications and indications. Epizyme® and TAZVERIK® are registered trademarks of Epizyme, Inc. in the United States and other countries. Epizyme, Inc. has also submitted trademark applications for Epizyme and TAZVERIK in other countries. All other trademarks, service marks or other tradenames appearing in this proxy statement are the property of their respective owners.


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LOGO

EPIZYME, INC.

400 Technology Square, 4th Floor

Cambridge, Massachusetts 02139

617-229-5872

PROXY STATEMENT

FOR THE 2021 ANNUAL MEETING OF STOCKHOLDERS

to be held June 11, 2021

This proxy statement contains information about the Annual Meeting of Stockholders of Epizyme, Inc., or the Annual Meeting, to be held on Friday, June 11, 2021 at 10:00 a.m. Eastern time. The Annual Meeting will be held via the Internet this year, as a virtual web conference at www.meetingcenter.io/209067253. The board of directors of Epizyme is using this proxy statement to solicit proxies for use at the Annual Meeting.

All properly submitted proxies will be voted in accordance with the instructions contained in those proxies. If no instructions are specified, the proxies will be voted in accordance with the recommendation of our board of directors with respect to each of the matters set forth in the accompanying Notice of Meeting. If you are a stockholder as of the close of business on the record date, you may change your vote or revoke your proxy at any time before it is exercised at the meeting by giving our Secretary written notice to that effect.

Instead of mailing a paper copy of our proxy materials to all of our stockholders, we are providing access to our proxy materials over the Internet under the Securities and Exchange Commission’s “notice and access” rules. As a result, we are mailing to our stockholders a Notice of Internet Availability of Proxy Materials, or Notice, instead of a paper copy of this proxy statement and our Annual Report to Stockholders for the fiscal year ended December 31, 2020, or the 2020 Annual Report. We plan to send the Notice on or about April 29, 2021, and it contains instructions on how to access those documents over the Internet. The Notice also contains instructions on how each of our stockholders can receive a paper copy of our proxy materials, including this proxy statement, our 2020 Annual Report, and a form of proxy card.

Important Notice Regarding the Availability of Proxy Materials for

the Annual Meeting of Stockholders to be Held on June 11, 2021:

This proxy statement and our 2020 Annual Report are

available for viewing, printing and downloading at http://www.edocumentview.com/epzm.

A copy of our annual report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the Securities and Exchange Commission, or SEC, except for exhibits, will be furnished without charge to any stockholder upon written request to Epizyme, Inc. 400 Technology Square, 4th Floor, Cambridge, Massachusetts 02139. This proxy statement and our annual report on Form 10-K for the fiscal year ended December 31, 2020 are also available on the SEC’s website at http://www.sec.gov.

 

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IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

Purpose of the Annual Meeting

At the Annual Meeting, our stockholders will consider and vote on the following matters:

 

  1.

Election of three class II directors to our board of directors, each to serve until the 2024 annual meeting of stockholders;

 

  2.

Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021;

 

  3.

Approval, on an advisory (non-binding) basis, of the compensation of our named executive officers;

 

  4.

Approval of an amendment to our Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 150,000,000 to 225,000,000; and

 

  5.

Transaction of any other business properly brought before the Annual Meeting or any adjournment or postponement thereof.

As of the date of this proxy statement, we are not aware of any business to come before the meeting other than the first four items noted above.

Board of Directors Recommendation

Our board of directors unanimously recommends that you vote:

FOR the election of the three nominees to serve as class II directors on our board of directors for a three-year term;

FOR the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021;

FOR the approval, on an advisory (non-binding) basis, of the compensation of our named executive officers; and

FOR the approval of an amendment to our Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 150,000,000 to 225,000,000.

Availability of Proxy Materials

The proxy materials, including this proxy statement, a proxy card and our 2020 Annual Report are available for viewing, printing and downloading on the Internet at http://www.edocumentview.com/epzm.

Who can vote at the Annual Meeting?

Only stockholders of record at the close of business on the record date of April 16, 2021, are entitled to receive notice of the Annual Meeting and to vote the shares of our common stock that they held on that date. As of April 16, 2021, there were 101,975,604 shares of common stock issued and outstanding. Each share of common stock is entitled to one vote on each matter properly brought before the Annual Meeting.

Difference between a “stockholder of record” and a beneficial owner of shares held in “street name”

Stockholder of Record. If your shares are registered directly in your name with our transfer agent, Computershare, then you are considered a “stockholder of record” of those shares. You may vote your shares by proxy prior to the Annual Meeting by following the instructions contained in the Notice and in the section titled “How do I vote at the Annual Meeting” on page 4 of this proxy statement.

 

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Beneficial Owners of Shares Held in Street Name. If your shares are held in a brokerage account or by a bank, trust or other nominee or custodian, then you are considered the beneficial owner of those shares, which are held in “street name.” The organization holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting. As the beneficial owner, you have the right to instruct that organization as to how to vote the shares held in your account by following the instructions contained on the voting instruction card provided to you by that organization.

Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?

We are pleased to comply with the SEC rules that allow companies to distribute their proxy materials over the Internet under the “notice and access” approach. As a result, on or about April 29, 2021, we plan to send our stockholders and beneficial owners a copy of the Notice instead of paper copies of this proxy statement, our proxy card, and our 2020 Annual Report. Detailed instructions on how to access these materials via the Internet may be found in the Notice. The Notice also contains instructions on how each of our stockholders can receive a paper copy of our proxy materials, including the proxy statement, our 2020 Annual Report, and a form of proxy card. This proxy statement and our 2020 Annual Report are available for viewing, printing and downloading on the Internet at http://www.edocumentview.com/epzm.

Why is the Annual Meeting a virtual, online meeting?

Our Annual Meeting will be a virtual meeting of stockholders this year where stockholders will participate by accessing a website using the Internet. There will not be a physical meeting location. We believe that hosting a virtual meeting will facilitate stockholder attendance and participation at our Annual Meeting by enabling stockholders to participate remotely from any location around the world. We have designed the virtual annual meeting to provide the same rights and opportunities to participate as stockholders would have at an in-person meeting, including the right to vote and ask questions through the virtual meeting platform.

How do I virtually attend the Annual Meeting?

We will host the Annual Meeting live online via webcast. You may attend the Annual Meeting live online by visiting www.meetingcenter.io/209067253. The webcast will start at 10:00 a.m. Eastern time on Friday, June 11, 2021. You are entitled to participate in the Annual Meeting only if you were a stockholder as of the close of business on the record date of April 16, 2021, or if you hold a valid proxy for the Annual Meeting.

If you are a stockholder of record, then you do not need to register to virtually attend the Annual Meeting. Please follow the instructions on the Notice or proxy card that you received. You will need the control number included on your proxy card in order to be able to enter the Annual Meeting online. To participate in the Annual Meeting, you will need to review the information included on your Notice, on your proxy card or in the instructions that accompanied your proxy materials. The password for the meeting is EPZM2021. The online meeting will begin promptly at 10:00 a.m., Eastern time. We encourage you to access the meeting prior to the start time to leave ample time for the online check-in proceedings.

If you hold your shares in “street name” you must register in advance to virtually attend the Annual Meeting. To register to virtually attend the Annual Meeting online by webcast you must submit proof of your proxy power (legal proxy) reflecting your Epizyme, Inc. holdings along with your name and email address to Computershare. Requests for registration must be labeled as “Legal Proxy” and be received by Computershare no later than 5:00 p.m., Eastern Time, on June 8, 2021. You will receive a confirmation of your registration by email after we receive your registration materials. Requests for registration should be directed to Computershare as follows:

By email: Forward the email from your broker, or attach an image of your legal proxy, to legalproxy@computershare.com

 

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By Mail:

Computershare

Epizyme, Inc. Legal Proxy

P.O. Box 43001

Providence, RI 02940-3001

How do I submit a question at the Annual Meeting?

You will be able to submit your questions prior to and during the Annual Meeting by visiting www.meetingcenter.io/209067253.

How do I vote at the Annual Meeting?

If you are a stockholder of record, you can vote your shares in one of two ways: either by proxy or if you attend the Annual Meeting online, during the Annual Meeting. If you choose to vote by proxy, you may do so by telephone, via the Internet or by mail. Each of these methods is explained below.

 

   

By Telephone. You may transmit your proxy over the phone by calling 1-800-652-VOTE (8683) and following the instructions provided in the Notice and on the proxy card.

 

   

Via the Internet. You may transmit your proxy via the Internet prior to the Annual Meeting by following the instructions provided in the Notice and on the proxy card.

 

   

By Mail. If you requested printed copies of proxy materials, you can vote by mailing your proxy card as described in the proxy materials.

 

   

Online during the Annual Meeting. You may vote your shares online while virtually attending the Annual Meeting by visiting www.meetingcenter.io/209067253. You will need your control number included on your proxy card in order to be able to vote during the Annual Meeting. Even if you plan to attend the Annual Meeting online, we urge you to vote your shares by proxy in advance of the Annual Meeting so that if you should become unable to attend the Annual Meeting online your shares will be voted as directed by you.

Telephone and Internet voting for stockholders of record will be available until 1:00 am Eastern time on June 11, 2021, and mailed proxy cards must be received by June 10, 2021 in order to be counted at the Annual Meeting. If the Annual Meeting is adjourned or postponed, these deadlines may be extended.

If you are the beneficial owner of shares held in “street name” and you wish to vote online during the Annual Meeting, you must obtain a legal proxy from the organization that holds your shares and demonstrate proof of beneficial ownership to virtually attend the Annual Meeting. The voting deadlines and availability of telephone and Internet voting for beneficial owners of shares held in “street name” will depend on the voting processes of the organization that holds your shares. Therefore, we urge you to carefully review and follow the voting instruction card and any other materials that you receive from that organization.

Can I vote my shares by filling out and returning the Notice of Internet Availability of Proxy Materials?

No. The Notice contains instructions on how to vote via the Internet, by telephone, by requesting and returning a paper proxy card by mail, or by virtually attending the Annual Meeting and voting during the Annual Meeting.

What constitutes a quorum?

A quorum of stockholders is necessary to hold a valid meeting. Our amended and restated by-laws provide that a quorum will exist if stockholders holding a majority of the shares of stock issued and outstanding and entitled to vote are present at the meeting in person or by proxy. Shares present virtually during the Annual Meeting will be considered shares of common stock represented in person at the meeting. If a quorum is not present, the meeting may be adjourned until a quorum is obtained.

 

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Abstentions and broker non-votes count as present for establishing a quorum but will not be counted as votes cast. Broker non-votes occur when your broker or other nominee submits a proxy for your shares (because the broker or other nominee has received instructions from you on one or more proposals, but not all proposals, or has not received instructions from you but is entitled to vote on a particular “discretionary” matter) but does not indicate a vote for a particular proposal because the broker or other nominee either does not have the authority to vote on that proposal and has not received voting instructions from you or has discretionary authority but chooses not to exercise it.

May I see a list of stockholders entitled to vote as of the record date for the Annual Meeting?

A complete list of registered stockholders will be available to stockholders of record during the Annual Meeting for examination at www.meetingcenter.io/209067253.

Ballot Measures Considered “Discretionary” and “Non-Discretionary”

The election of directors (Proposal No. 1) is a matter considered non-discretionary under applicable rules. A broker or other nominee cannot vote without instructions on non-discretionary matters, and therefore there may be broker non-votes on Proposal No. 1.

The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021 (Proposal No. 2) is a matter considered discretionary under applicable rules. A broker or other nominee may generally exercise discretionary authority and vote on discretionary matters. If they exercise this discretionary authority, no broker non-votes are expected to occur in connection with Proposal No. 2. If a broker or other nominee does not exercise this discretionary authority and does not have instructions from you, then broker non-votes would occur in connection with Proposal No. 2.

The approval, on an advisory (non-binding) basis, of the compensation of our named executive officers (Proposal No. 3) is a matter considered non-discretionary under applicable rules. A broker or other nominee cannot vote without instructions on non-discretionary matters, and therefore there may be broker non-votes on Proposal No. 3.

The approval of an amendment to our Restated Certificate of Incorporation to increase the number of authorized shares of common stock (Proposal No. 4) is a matter considered discretionary under applicable rules. A broker or other nominee may generally exercise discretionary authority and vote on discretionary matters. If they exercise this discretionary authority, no broker non-votes are expected to occur in connection with Proposal No. 4. If a broker or other nominee does not exercise this discretionary authority and does not have instructions from you, then broker non-votes would occur in connection with Proposal No. 4.

Votes Required to Elect a Director, Ratify Appointment of Ernst & Young LLP, Approve the Advisory Vote on Executive Officer Compensation and Approve an Amendment to our Restated Certificate of Incorporation

To be elected, a director must receive a plurality of the votes cast by stockholders entitled to vote at the Annual Meeting (Proposal No. 1).

The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm (Proposal No. 2) and the approval of the advisory vote on executive compensation (Proposal No. 3) require the affirmative vote of a majority of the shares of common stock present or represented by proxy and voted “for” or “against” such matter.

Shares which abstain and broker non-votes will not be counted as votes in favor of, or with respect to, these proposals and will also not be counted as votes cast. Accordingly, abstentions and broker non-votes will have no effect on the outcome of Proposals No. 1, No. 2 and No. 3.

 

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The amendment of our Restated Certificate of Incorporation to increase the number of authorized shares of common stock (Proposal No. 4) requires the affirmative vote of stockholders holding a majority of the shares of our common stock issued and outstanding and entitled to vote at the Annual Meeting. Because Proposal No. 4 requires the affirmative vote of the holders of a majority of the shares of our common stock issued and outstanding and entitled to vote at the Annual Meeting, abstentions and broker non-votes will have the same effect as a vote “AGAINST” Proposal No. 4.

Method of Counting Votes

Each holder of common stock is entitled to one vote at the Annual Meeting on each matter to come before the Annual Meeting, including the election of directors, for each share held by such stockholder as of the record date. Votes cast virtually during the Annual Meeting or by proxy by mail, via the Internet prior to the Annual Meeting or by telephone will be tabulated by the inspector of election appointed for the Annual Meeting, who will also determine whether a quorum is present.

Revoking a Proxy; Changing Your Vote

If you are a stockholder of record, you may revoke your proxy before the vote is taken at the Annual Meeting:

 

   

by submitting a new proxy with a later date before the applicable deadline either signed and returned by mail or transmitted using the telephone or Internet voting procedures described in the “How do I vote at the Annual Meeting” section above;

 

   

by voting virtually during the Annual Meeting; or

 

   

by filing a written revocation with our corporate Secretary.

If your shares are held in “street name,” you may submit new voting instructions by contacting your broker or other organization holding your account. You may also vote virtually during the Annual Meeting, which will have the effect of revoking any previously submitted voting instructions, if you obtain a legal proxy from the organization that holds your shares as described in the “How do I vote at the Annual Meeting” section above.

Your virtual attendance at the Annual Meeting will not automatically revoke your proxy.

Costs of Proxy Solicitation

We will bear the costs of soliciting proxies. Our directors, officers and regular employees, without additional remuneration, may solicit proxies by mail, telephone, facsimile, email, personal interviews and other means.

Voting Results

We plan to announce preliminary voting results at the Annual Meeting and will publish final results in a Current Report on Form 8-K to be filed with the SEC within four business days following the Annual Meeting.

 

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PROPOSAL NO. 1

ELECTION OF THREE CLASS II DIRECTORS

Our board of directors currently consists of ten members. In accordance with the terms of our certificate of incorporation and by-laws, our board of directors is divided into three classes (class I, class II and class III), with members of each class serving staggered three-year terms. The members of the classes are divided as follows:

 

   

the class I directors are Andrew R. Allen, M.D., Ph.D., Kenneth Bate, Robert Bazemore, and Victoria Richon, Ph.D., and their term expires at the annual meeting of stockholders to be held in 2023;

 

   

the class II directors are Grant Bogle, Kevin T. Conroy, and Carl Goldfischer, M.D., and their term expires at the Annual Meeting; and

 

   

the class III directors are Michael F. Giordano, M.D., Pablo Legorreta, and David M. Mott, and their term expires at the annual meeting of stockholders to be held in 2022.

Upon the expiration of the term of a class of directors, directors in that class will be eligible to be elected for a new three-year term at the annual meeting of stockholders in the year in which their term expires.

Our certificate of incorporation and by-laws provide that the authorized number of directors may be changed only by resolution of our board of directors. Our certificate of incorporation and by-laws also provide that our directors may be removed only for cause by the affirmative vote of the holders of at least 75% of the votes that all our stockholders would be entitled to cast in an annual election of directors, and that any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by vote of a majority of our directors then in office.

Our board of directors has nominated Grant Bogle, Kevin T. Conroy and Carl Goldfischer, M.D. for election as class II directors at the Annual Meeting. Each of the nominees is presently a director, and each has indicated a willingness to continue to serve as director, if elected. If a nominee becomes unable or unwilling to serve, however, the proxies may be voted for substitute nominees selected by our board of directors.

We have no formal policy regarding board diversity. Our priority in selection of board members is identification of members who will further the interests of our stockholders through their established record of professional accomplishment, the ability to contribute positively to the collaborative culture among board members, knowledge of our business and understanding of the competitive landscape.

Nominees for Election as Class II Directors

Biographical information as of April 1, 2021, including principal occupation and business experience during the last five years, for our nominees for election as class II directors at our Annual Meeting is set forth below.

Class II Directors (Term Expires at Annual Meeting)

 

    

Age

Grant Bogle has served as a director since September 2019. Mr. Bogle served as Senior Vice President and Chief Commercial Officer for Tesaro, Inc, a biopharmaceutical company, or Tesaro, from July 2015 to January 2019. Prior to joining Tesaro, Mr. Bogle served as Senior Vice President, Pharmaceutical and Biotech Solutions at McKesson Specialty Health (formerly U.S. Oncology) from July 2007 to June 2015. Previously, he was Senior Vice President of Sales and Marketing for Millennium Pharmaceuticals. Mr. Bogle holds a B.A. in economics from Dartmouth College, an M.B.A. from Columbia University and is a Senior Fellow of the Advanced Leadership Initiative at Harvard University. We believe that Mr. Bogle’s extensive experience in the commercialization, sales, marketing and distribution of biopharmaceutical products provide him with the qualification and skills to serve as a director of our company.    63

 

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Kevin T. Conroy has served as a director since February 2017. Mr. Conroy is currently the President, Chief Executive Officer and chairman of the board of directors of Exact Sciences Corporation, or Exact Sciences, a publicly traded molecular diagnostics company. Mr. Conroy has served as chairman of the board of directors of Exact Sciences since March 2014, as President and Chief Executive Officer since April 2009 and as a director since March 2009. Prior to joining Exact Sciences, Mr. Conroy served in multiple executive leadership positions at Third Wave Technologies, or Third Wave, a molecular diagnostic testing company, including President and Chief Executive Officer from December 2005 until the acquisition of Third Wave by Hologic, Inc. in July 2008. He joined Third Wave in July 2004 and served as General Counsel from October 2004 until December 2005. Prior to Third Wave, Mr. Conroy served as Intellectual Property Counsel at GE Healthcare, a medical imaging and diagnostics company and a division of General Electric Company. Before joining GE Healthcare, Mr. Conroy was the chief operating officer of two early-stage, venture-backed technology companies. Prior to that, he was an intellectual property litigator at McDermott Will & Emery and Pattishall, McAuliffe, Newbury, Hilliard and Geraldson, where he was a partner. Since April 2019, Mr. Conroy has served on the board of directors of Adaptive Biotechnologies Corporation, a publicly traded commercial-stage biotechnology company. Mr. Conroy previously served on the board of directors of Arya Sciences Acquisition Corp., a publicly traded special purpose acquisition company sponsored by an affiliate of Perceptive Advisors LLC, from July 2018 to July 2020. Mr. Conroy received a B.S. in electrical engineering from Michigan State University and a J.D. from the University of Michigan Law School. We believe that Mr. Conroy’s extensive executive experience in the life sciences industry and his service on the board of directors of a life sciences company provide him with the qualifications and skills to serve as a director of our company.    55
Carl Goldfischer, M.D. has served as a director since September 2009. Dr. Goldfischer has served as an Investment Partner, Managing Director, member of the board of directors and member of the executive committee of Bay City Capital LLC, or Bay City Capital, a life sciences investment firm, since January 2000. Prior to joining Bay City Capital, Dr. Goldfischer was Chief Financial Officer of ImClone Systems Incorporated, a biopharmaceutical company. Since January 2020, Dr. Goldfischer has served on the board of directors of Galecto, Inc., a publicly traded clinical-stage biotechnology company and since January 2016, Dr. Goldfischer has served on the board of directors of Imara, Inc., a publicly traded clinical-stage biotechnology company. He previously served on the board of directors of EnteroMedics Inc., now ReShape Lifesciences Inc., a publicly traded medical device company, from 2004 to September 2017. Dr. Goldfischer received a B.A. from Sarah Lawrence College and an M.D. with honors in Scientific Research from Albert Einstein College of Medicine. We believe that Dr. Goldfischer’s extensive finance and investment experience, his experience as an executive and his service on the board of directors of numerous public and privately held companies provide him with the qualifications and skills to serve as a director of our company.    62

The proxies will be voted in favor of the nominees unless a contrary specification is made in the proxy. The nominees have consented to serve as our directors if elected. However, if any nominee is unable for any reason to serve as a director, proxies may be voted for one or more substitute(s) who will be designated by our board of directors.

The board of directors recommends voting “FOR” the election of each of Grant Bogle, Kevin T. Conroy, and Carl Goldfischer, M.D. as class II directors, each for a three-year term ending at the annual meeting of stockholders to be held in 2024.

Directors Continuing in Office

Biographical information as of April 1, 2021, including principal occupation and business experience during the last five years, for our directors continuing in office after the Annual Meeting is set forth below.

 

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Class III Directors (Term Expires at 2022 Annual Meeting)

 

     Age  
Michael F. Giordano, M.D. has served as a director since March 2018. Dr. Giordano served as a clinical advisor to us from December 2017 to August 2018. From 1999 to 2017, Dr. Giordano worked at Bristol-Myers Squibb, or BMS, most recently serving as senior vice president and head of development, oncology and immuno-oncology from February 2012 to February 2017. From 1990 to 1999, he served as assistant professor of medicine and founding director of the Cornell Clinical Trials Unit, a National Institutes of Health and Industry-supported AIDS clinical trials center at New York Hospital-Cornell University Medical Center. Since January 2018, Dr. Giordano has served on the board of directors of RAPT Therapeutics, Inc., a publicly traded clinical-stage, immunology-based biopharmaceutical company. He earned his M.D. and completed his residency and fellowship training at NewYork-Presbyterian/Weill Cornell Medical Center, and received his B.A. in natural sciences from The Johns Hopkins University. We believe that Dr. Giordano’s extensive experience in oncology and immuno-oncology at BMS, as well as his experience as a clinical advisor to us, provide him with the qualifications and skills to serve as a director of our company.      63  
Pablo Legorreta has served as a director since November 2019. Since 1996, Mr. Legorreta is the founder and chief executive officer of Royalty Pharma plc, a life sciences investment company that went public in June 2020. Mr. Legorreta also serves as chairman of the board of directors of Royalty Pharma plc. Mr. Legorreta was elected as a director under the terms of our purchase agreement dated November 4, 2019 with RPI Finance Trust, a subsidiary of Royalty Pharma and a holder of more than 5% of our voting securities. Mr. Legorreta is also a co-founder of Pharmakon Advisors, LP, an affiliate of the lenders under our loan agreement dated November 4, 2019. Mr. Legorreta has over 20 years of experience investing in pharmaceutical royalties and building and managing a leading life sciences investment company. Prior to founding Royalty Pharma in 1996, Mr. Legorreta was an investment banker at Lazard Frères in Paris and New York. Mr. Legorreta serves on the Board of Governors of the New York Academy of Sciences, as well as the Boards of Trustees of Rockefeller University, Brown University, the Hospital for Special Surgery, Pasteur Foundation (the U.S. affiliate of the French Institut Pasteur), Open Medical Institute and Park Avenue Armory. Mr. Legorreta is the founder and chairman of Alianza Médica para la Salud, a non-profit dedicated to enhancing the quality of health care in Latin America by providing doctors and healthcare providers with continued education opportunities. Mr. Legorreta has a degree in industrial engineering from Universidad Iberoamericana in Mexico City. We believe that Mr. Legorreta’s experience in investing in pharmaceutical royalties and managing a growing life sciences investment company, as well as significant background in investment banking and debt financing provide him with the qualifications and skills to serve as a director of our company.      57  
David M. Mott has served as a director since December 2009 and as Chairman of our board of directors since April 2016. Mr. Mott has been a private investor through Mott Family Capital since February 2020. Mr. Mott previously served as a general partner of New Enterprise Associates, Inc., an investment firm focused on venture capital and growth equity investments, from September 2008 to February 2020, where he led the healthcare investing practice. From 1992 until 2008, Mr. Mott worked at MedImmune, Inc., or MedImmune, a biotechnology company and subsidiary of AstraZeneca Plc, or AstraZeneca, and served in numerous roles during his tenure, including most recently as Chief Executive Officer from October 2000 to July 2008. During that time, Mr. Mott also served as Executive Vice President of AstraZeneca from June 2007 to July 2008 following AstraZeneca’s acquisition of MedImmune in June 2007. Mr. Mott also serves on the board of directors of several publicly traded life sciences companies: Adaptimmune Therapeutics plc, a clinical-stage biopharmaceutical company, as a director since February 2015 and as chairman since January 2017; Ardelyx, Inc., a biopharmaceutical company, as a director since March 2009 and as chairman since March 2014; Imara, Inc., a clinical-stage biotechnology company, as a director since January 2016 and as chairman since April 2016; Mersana Therapeutics, Inc., a clinical-stage biopharmaceutical company, as chairman since July 2012; and Novavax, Inc., a late-stage biotechnology      55  

 

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company, as a director since June 2020. Mr. Mott also previously served on the board of directors of Tesaro, as a director from May 2010 and as chairman from July 2011 until its sale to GlaxoSmithKline plc in January 2019 and Nightstar Therapeutics plc, a clinical-stage gene therapy company, as a director from August 2015 until its sale to Biogen in June 2019. He also serves on the boards of several private biopharmaceutical companies. Mr. Mott received a B.A. from Dartmouth College. We believe that Mr. Mott’s extensive experience in the life sciences industry as a senior executive and venture capitalist, as well as his service on the boards of directors of other life sciences companies, provide him with the qualifications and skills to serve as a director of our company.   

Class I Directors (Term Expires at 2023 Annual Meeting)

 

     Age  
Andrew R. Allen, M.D., Ph.D. has served as a director since June 2014. Dr. Allen has served as the Chief Executive Officer and President and a member of the board of directors of Gritstone Oncology, Inc., a publicly traded immunotherapy company that he co-founded, since September 2015. From April 2009 to August 2015, Dr. Allen served as the Executive Vice President of Clinical and Pre-Clinical Development and Chief Medical Officer of Clovis Oncology, Inc., a publicly traded biopharmaceutical company that he co-founded. Prior to co-founding Clovis, he served in the same role at Pharmion Corporation, a pharmaceutical company, beginning in 2006. From 2004 to 2006, Dr. Allen served as Vice President of BioPharma Development and Head of the Oncology Therapeutic Unit for Chiron Corporation, a biotechnology company. Prior to that, Dr. Allen served as global project head in Abbott Laboratories’ oncology franchise, and he progressed through positions of increasing responsibility at the management consulting firm McKinsey & Company, with a focus on oncology strategy. Dr. Allen currently serves on the board of directors of TCR2 Therapeutics Inc., a publicly traded clinical-stage cell therapy company, since December 2018 and Sierra Oncology, Inc., a publicly traded late-stage biopharmaceutical company, since October 2017. Dr. Allen qualified in medicine at Oxford University and earned his Ph.D. from the Imperial College of Science, Technology and Medicine in London. Dr. Allen also obtained post-graduate internal medicine qualification as a Member of Royal College of Physicians. We believe that Dr. Allen’s extensive experience in the pharmaceutical industry, his experience as an executive and his service on the board of directors of numerous public and privately held life sciences companies, and his expertise in oncology clinical development and oncology strategy provide him with the qualifications and skills to serve as a director of our company.      54  
Kenneth Bate has served as a director since December 2014. Mr. Bate served as an independent consultant in the biotechnology field from 2012 until 2017. From 2009 to 2012, Mr. Bate served as President and Chief Executive Officer of Archemix, Inc., or Archemix, a privately-held biotechnology company. Prior to Archemix, from 2006 to 2009, Mr. Bate served in various positions at NitroMed, Inc., a pharmaceutical company, most recently as President and Chief Executive Officer. From 2002 to 2005, Mr. Bate served as Chief Financial Officer of Millennium Pharmaceuticals, where he headed the commercial organization. Prior to joining Millennium Pharmaceuticals, Mr. Bate co-founded JSB Partners, LLC, a banking and advisory services firm for biopharmaceutical and life sciences companies. From 1990 to 1996, he was with Biogen Inc., a biotechnology company, first as their Chief Financial Officer, and then as head of the commercial organization responsible for launching the multiple sclerosis business. Mr. Bate serves on the board of directors of four other publicly traded biopharmaceutical companies: AVEO Pharmaceuticals, Inc., since December 2007; Catabasis Pharmaceuticals, Inc., since January 2014, as co-chair from February 2016 to February 2019 and as chair since February 2019; Madrigal Pharmaceuticals, Inc., since July 2016; and Genocea Biosciences, Inc., since September 2014 and as chair since December 2018. Mr. Bate received his B.A. in chemistry from Williams College and his M.B.A. from the Wharton School of the University of Pennsylvania. We believe that Mr. Bate’s extensive financial and leadership experience, his experience as an executive and his service on the board of directors of numerous public and privately held companies provide him with the qualifications and skills to serve as a director of our company.      70  

 

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Robert B. Bazemore has served as a director and our President and Chief Executive Officer since September 2015. Prior to joining us, from September 2014 to June 2015, Mr. Bazemore served as the Chief Operating Officer of Synageva BioPharma Corp., a biopharmaceutical company developing therapeutic products for rare disorders. Prior to joining Synageva, Mr. Bazemore served in increasing levels of responsibility at Johnson & Johnson, a healthcare company, including Vice President of Centocor Ortho Biotech Sales & Marketing from 2008 to 2010, President of Janssen Biotech from January 2010 to October 2013 and Vice President of Global Surgery at Ethicon from October 2013 to September 2014. Prior to Johnson & Johnson, Mr. Bazemore worked at Merck & Co., Inc. for eleven years, where he served in a variety of roles in medical affairs, sales and marketing. Mr. Bazemore serves on the board of directors of Ardelyx, Inc., a publicly traded biopharmaceutical company, since June 2016 and Nuvation Bio, Inc., a publicly traded biopharmaceutical company, since July 2020. Mr. Bazemore previously served as a director of Neon Therapeutics, Inc., a publicly traded, clinical-stage immuno-oncology company, from November 2018 until its sale to BioNTech in May 2020. He received a B.S. in biochemistry from the University of Georgia. We believe that Mr. Bazemore’s extensive experience in the pharmaceutical industry, his experience as an executive, and his service on the board of directors of a life sciences industry group and life sciences companies, provide him with the qualifications and skills to serve as a director of our company.      53  
Victoria Richon, Ph.D. has served as a director since September 2019. Dr. Richon has served as President and Chief Executive Officer of Ribon Therapeutics Inc., a biotechnology company, since November 2015. Prior to joining Ribon, Dr. Richon was Vice President, Global Head of Oncology Research and Translational Medicine at Sanofi Oncology from November 2012 to October 2015. Dr. Richon previously served as our Vice President of Biological Sciences from October 2008 to November 2012. Dr. Richon received her Ph.D. in biochemistry at the University of Nebraska Medical Center and a B.A. in chemistry at the University of Vermont. We believe that Dr. Richon’s extensive experience in the pharmaceutical industry, her experience as an executive, and her expertise in oncology clinical development provide her with the qualifications and skills to serve as a director of our company.      62  

There are no family relationships between or among any of our directors or executive officers. The principal occupation and employment during the past five years of each of our directors was carried on, in each case except as specifically identified above, with a corporation or organization that is not a parent, subsidiary or other affiliate of us. There is no arrangement or understanding between any of our directors and any other person or persons pursuant to which he or she is to be selected as a director. Mr. Legorreta was elected to our board under the terms of our purchase agreement dated November 4, 2019 with RPI Finance Trust, an affiliate of Royalty Pharma.

There are no material legal proceedings to which any of our directors is a party adverse to us or any of our subsidiaries or in which any such person has a material interest adverse to us or any of our subsidiaries.

Executive Officers Who Are Not Directors

Biographical information as of April 1, 2021 for our executive officers who are not directors is listed below.

 

     Age  
Paolo Tombesi has served as our Chief Financial Officer since joining us in August 2019. Prior to joining us, from June 2017 to June 2019 Mr. Tombesi served as the Chief Financial Officer for Insmed Incorporated, or Insmed, a global biopharmaceutical company. Prior to joining Insmed, Mr. Tombesi was Chief Financial and Administrative Officer of Novartis Pharmaceuticals Corporation, a U.S. subsidiary of multinational pharmaceutical company Novartis AG, or Novartis, a position he held from December 2014 through May 2017. Mr. Tombesi was Managing Director and Chief Financial Officer of Novartis Pharma K.K., a Japanese subsidiary of Novartis, from April 2009 to November 2014 and held various finance roles at Novartis from September 2006 to March 2009. Mr. Tombesi held several finance director positions at      57  

 

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Bristol-Myers Squibb, a multinational biopharmaceutical company, from August 1996 to September 2006. From January 1988 to July 1996, Mr. Tombesi held various positions in consumer goods at Unilever NV and Johnson & Johnson. Mr. Tombesi holds a B.Ed. in Business and Managerial Economics from Sapienza Università di Roma and a B.A. in Accounting from Duca degli Abruzzi Roma.   
Matthew E. Ros has served as our Executive Vice President, Chief Strategy and Business Officer since September 2020, served as our Chief Strategy and Business Officer from September 2018 to September 2020 and served as our Chief Operating Officer from May 2016 to September 2018. He has more than 30 years of experience with global pharmaceutical and early-stage biotechnology companies, building and leading teams across sales, marketing, medical affairs, franchise strategy and business operations. Prior to joining us, from September 2010 to May 2016, Mr. Ros served in increasing levels of responsibility at Sanofi, a multinational pharmaceutical company, most recently as Chief Operating Officer/Global Head of the Oncology Business unit from December 2014 to May 2016. From October 2007 to June 2010, Mr. Ros served at ARIAD Pharmaceuticals, Inc., a global oncology company, most recently as Senior Vice President, Commercial Operations. He started his pharmaceutical career in Bristol-Myers Squibb’s Oncology Division, serving in roles with increasing responsibility from 1990 to 2007. Mr. Ros has served as a member of the board of directors of Cogent Biosciences, Inc., a publicly traded biotechnology company, since July 2019. He received a B.S. from the State University of New York, College at Plattsburgh and completed the Executive Education Program in Finance and Accounting for the Non-Financial Manager at Wharton School of the University of Pennsylvania.      54  
Dr. Shefali Agarwal has served as our Executive Vice President, Chief Medical and Development Officer since February 2021 and served as our Chief Medical Officer from June 2018 to February 2021. Prior to joining us, Dr. Agarwal held leadership positions across medical research, clinical development, clinical operations and medical affairs. She most recently served as chief medical officer at SQZ Biotech, a biotechnology company developing cell therapies for patients with a wide range of diseases, from July 2017 to May 2018 and as a non-executive advisor from May 2018 to July 2018, where she built and led the clinical development organization, which included clinical research operations and the regulatory function. Before SQZ Biotech, Dr. Agarwal also held leadership positions at Curis, Inc. a biotechnology company developing therapeutics for the treatment of cancer, from July 2016 to July 2017 and Tesaro from July 2013 to July 2017. Dr. Agarwal also held positions of increasing responsibility at AVEO Pharmaceuticals, Inc., a biopharmaceutical company, from December 2011 to July 2013, Covidien, a medical devices and health care products company, from April 2010 to December 2011, and Pfizer Inc., a pharmaceutical company with a wide range of treatments, from June 2005 to April 2010. She has served as a member of the board of directors of Fate Therapeutics, Inc., a publicly traded clinical-stage biopharmaceutical company, since July 2019. Dr. Agarwal received her MBBS medical degree from Karnataka University’s Mahadevappa Rampure Medical School in India, Master’s Degree in Public Health from Johns Hopkins University, where she led clinical research in the Department of Anesthesiology and Critical Care Medicine, and a Master of Science degree in Business from the University of Baltimore’s Merrick School of Business.      47  
Jeffery L. Kutok, M.D., Ph.D., has served as our Chief Scientific Officer since joining us in April 2020. Dr. Kutok previously served as Chief Scientific Officer of Infinity Pharmaceuticals, Inc., or Infinity, a biotechnology company that develops cancer medication, from February 2017 to March 2020. Dr. Kutok previously served as Infinity’s Vice President of Biology and Translational Science from August 2013 to February 2017, and in other roles with increasing responsibility from January 2011 to August 2013. Prior to joining Infinity, Dr. Kutok was an associate professor of pathology at Harvard Medical School and Brigham and Women’s Hospital. Dr. Kutok’s laboratory focused on translational medicine research and biomarker identification in cancer, and he is an author on over 200 journal articles, reviews and book chapters. Dr. Kutok is board certified in Anatomic Pathology and Hematology and had clinical duties in Hematopathology and Molecular Diagnostics at Brigham and Women’s Hospital. Dr. Kutok received his B.S. in biology and his M.D., Ph.D. in medicine and molecular pathology from the State University of New      54  

 

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York at Stony Brook. He was also a post-doctoral fellow at Harvard University in the laboratory of Dr. Gary Gilliland, M.D., Ph.D.   
Vicki Vakiener has served as our Chief Commercial Officer since September 2020 and served as our Senior Vice President, Commercial from December 2018 to September 2020. Prior to joining us, Ms. Vakiener held positions of leadership with increasing responsibility across Johnson & Johnson’s pharmaceuticals and diagnostics businesses. Most recently, she was the Vice President and Oncology Global Commercial Leader for Prostate Cancer at Janssen from January 2018 to September 2020 in which role she led a cross-functional team to develop and execute the global commercial strategy for its portfolio of late stage and early pipeline compounds. She also previously served as the Vice President of Oncology Marketing at Janssen Oncology U.S. from November 2014 to December 2018 and during her tenure in this position, Ms. Vakiener managed the launch of multiple oncology therapeutics for Janssen, including DARZALEX, ZYTIGA, and IMBRUVICA. Prior to Johnson & Johnson, Ms. Vakiener began her pharmaceutical career at Schering-Plough and spent nine years there in both scientific roles and commercial positions. She received a B.S. in Biochemistry from Albright College, Reading, PA.      57  

The principal occupation and employment during the past five years of each of our executive officers was carried on, in each case except as specifically identified above, with a corporation or organization that is not a parent, subsidiary or other affiliate of us. There is no arrangement or understanding between any of our executive officers and any other person or persons pursuant to which he or she was or is to be selected as an executive officer.

There are no material legal proceedings to which any of our executive officers is a party adverse to us or any of our subsidiaries or in which any such person has a material interest adverse to us or any of our subsidiaries.

 

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PROPOSAL NO. 2

RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP

AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE

FISCAL YEAR ENDING DECEMBER 31, 2021

Our stockholders are being asked to ratify the appointment by the audit committee of the board of directors of Ernst & Young LLP as our independent registered public accounting firm. Ernst & Young LLP has served as our independent registered public accounting firm since 2009.

The audit committee is solely responsible for appointing our independent registered public accounting firm for the fiscal year ending December 31, 2021. Stockholder approval is not required to appoint Ernst & Young LLP as our independent registered public accounting firm. However, the board of directors believes that submitting the appointment of Ernst & Young LLP to the stockholders for ratification is consistent with good corporate governance. If the stockholders do not ratify this appointment, the audit committee will reconsider whether to retain Ernst & Young LLP. If the appointment of Ernst & Young LLP is ratified, the audit committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time it decides that such a change would be in the best interest of our company and our stockholders.

A representative of Ernst & Young LLP is expected to attend the virtual Annual Meeting and will have an opportunity to make a statement if he or she desires to do so and to respond to appropriate questions from our stockholders.

We incurred the following fees from Ernst & Young LLP for the audit of the consolidated financial statements and for other services provided during the years ended December 31, 2020 and 2019.

 

     2020      2019  

Audit fees (1)

   $ 1,443,000      $ 1,147,000  

Audit-related fees

     —          —    

Tax fees

     —          —    

All other fees

     —          —    
  

 

 

    

 

 

 

Total fees

   $ 1,443,000      $ 1,147,000  
  

 

 

    

 

 

 

 

(1)

Audit fees consist of fees for the audit of our annual financial statements, the review of the interim financial statements included in our quarterly reports on Form 10-Q, and other professional services provided in connection with any registration statements filed with the SEC.

Audit Committee Pre-Approval Policy and Procedures

Our audit committee has adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by our independent registered public accounting firm. This policy provides that we will not engage our independent registered public accounting firm to render audit or non-audit services unless the service is specifically approved in advance by our audit committee or the engagement is entered into pursuant to the pre-approval procedure described below.

From time to time, our audit committee may pre-approve specified types of services that are expected to be provided to us by our independent registered public accounting firm during the next 12 months. Any such pre-approval is detailed as to the particular service or type of services to be provided and is also generally subject to a maximum dollar amount.

During our 2020 and 2019 fiscal years, no services were provided to us by Ernst & Young LLP other than in accordance with the pre-approval policies and procedures described above.

The board of directors recommends voting “FOR” Proposal No. 2 to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm.

 

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CORPORATE GOVERNANCE

Director Nomination Process

Our nominating and corporate governance committee is responsible for identifying individuals qualified to serve as directors, consistent with criteria approved by our board, and recommending the persons to be nominated for election as directors, except where we are legally required by contract, law or otherwise to provide third parties with the right to nominate director candidates.

The process followed by our nominating and corporate governance committee to identify and evaluate director candidates includes requests to board members and others for recommendations, meetings from time to time to evaluate biographical information and background material relating to potential candidates and interviews of selected candidates by members of the committee and our board. While there are no specific minimum qualifications for a committee-recommended nominee to our board of directors, the qualifications, qualities and skills that our nominating and corporate governance committee believes must be met by a committee-recommended nominee for a position on our board of directors are as follows:

 

   

Nominees should have a reputation for integrity, honesty and adherence to high ethical standards.

 

   

Nominees should have demonstrated business acumen, experience and ability to exercise sound judgments in matters that relate to our current and long-term objectives and should be willing and able to contribute positively to our decision-making process.

 

   

Nominees should have a commitment to understand our company and our industry and to regularly attend and participate in meetings of our board of directors and its committees.

 

   

Nominees should have the interest and ability to understand the sometimes conflicting interests of our various constituencies, which include stockholders, employees, customers, governmental units, creditors and the general public, and to act in the interests of all stockholders.

 

   

Nominees should not have, nor appear to have, a conflict of interest that would impair the nominee’s ability to represent the interests of all of our stockholders and to fulfill the responsibilities of a director.

 

   

Nominees shall not be discriminated against on the basis of race, religion, national origin, sex, sexual orientation, disability or any other basis proscribed by law. Our nominating and corporate governance committee does not have a formal diversity policy, but believes that our board, taken as a whole, should embody a diverse set of skills, experiences and backgrounds. In this regard, the nominating and corporate governance committee also takes into consideration the diversity (for example, with respect to gender, race and national origin) of our board members. The nominating and corporate governance committee does not make any particular weighting of diversity or any other characteristic in evaluating nominees and directors.

 

   

Nominees should typically be able to serve for at least three years before reaching the age of 75.

Stockholders may recommend individuals to the nominating and corporate governance committee for consideration as potential director candidates. Any such proposals should be submitted to our corporate Secretary at our principal executive offices and should include appropriate biographical and background material to allow the nominating and corporate governance committee to properly evaluate the potential director candidate; such proposal submission should also include the number of shares of our stock beneficially owned by the stockholder proposing the candidate. The specific requirements for the information that is required to be provided for such recommendations to be considered are specified in our amended and restated by-laws and must be received by us no later than the date referenced below under the heading “Stockholder Proposals.” Assuming that biographical and background material has been provided on a timely basis, any recommendations received from stockholders will be evaluated in the same manner as potential nominees proposed by the nominating and corporate governance committee. If our board of directors decides to nominate a stockholder-recommended candidate and recommends his or her election, then his or her name will be included on our proxy card for the next annual meeting of stockholders.

 

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Director Independence

Applicable Nasdaq rules require a majority of a listed company’s board of directors to be comprised of independent directors within one year of listing.

In addition, the Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees be independent and that audit committee members also satisfy independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act and that compensation committee members satisfy independence criteria set forth in Rule 10C-1 under the Exchange Act. Under applicable Nasdaq rules, a director will only qualify as an “independent director” if, in the opinion of the listed company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

In order to be considered independent for purposes of Rule 10A-3 under the Exchange Act, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries or otherwise be an affiliated person of the listed company or any of its subsidiaries.

In addition, in affirmatively determining the independence of any director who will serve on a company’s compensation committee, Rule 10C-1 under the Exchange Act requires that a company’s board of directors must consider all factors specifically relevant to determining whether a director has a relationship to such company which is material to that director’s ability to be independent from management in connection with the duties of a compensation committee member, including: the source of compensation to the director, including any consulting, advisory or other compensatory fee paid by such company to the director, and whether the director is affiliated with the company or any of its subsidiaries or affiliates.

In April 2021, our board of directors undertook a review of the composition of our board of directors and the independence of each director. Based upon business and personal information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our board of directors determined that each of our directors, with the exceptions of Mr. Bazemore, Dr. Giordano and Mr. Legorreta, are “independent directors” as defined under applicable Nasdaq rules. In making such determination, our board of directors considered the relationships that each such director has with our company and all other facts and circumstances that our board of directors deemed relevant in determining his or her independence, including the beneficial ownership of our capital stock by each director. Mr. Bazemore is not an independent director under these rules because he is currently serving as our president and chief executive officer. Dr. Giordano is not an independent director under these rules because he has received more than $120,000 in consulting fees during a 12-month period within the last three years. Mr. Legorreta is not an independent director under these rules because of our transactions with RPI Finance Trust and Pharmakon Advisors, LP.

Board Committees

Our board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee. Each of the audit committee, compensation committee and nominating and corporate governance committee operates under a charter, and each such committee reviews its respective charter at least annually. A current copy of the charter for each of the audit committee, compensation committee and the nominating and corporate governance committee is posted on the corporate governance section of the “Investor Center” on our website, which is located at http://www.epizyme.com.

 

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Audit Committee

The members of our audit committee are Dr. Goldfischer, Mr. Bate and Mr. Conroy. Richard Pops served as a member of our audit committee until his resignation from our board of directors, effective in October 2020. Dr. Goldfischer is chair of the audit committee. Our audit committee met five times during 2020. Our audit committee’s responsibilities include:

 

   

appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;

 

   

overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of reports from that firm;

 

   

reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures;

 

   

monitoring our internal control over financial reporting, disclosure controls and procedures and code of conduct;

 

   

overseeing our internal audit function, if any;

 

   

discussing our risk management policies;

 

   

establishing procedures for the receipt and retention of accounting-related complaints and concerns;

 

   

meeting independently with our internal audit staff, if any, our independent registered public accounting firm and management;

 

   

reviewing and approving or ratifying any related person transactions; and

 

   

preparing the audit committee report required by SEC rules.

All audit and non-audit services, other than de minimis non-audit services, to be provided to us by our independent registered public accounting firm must be approved in advance by our audit committee.

Our board of directors has determined that Dr. Goldfischer and Mr. Bate are each an “audit committee financial expert” as defined in applicable SEC rules. We believe that the composition of our audit committee meets the requirements for independence under current Nasdaq and SEC rules and regulations.

Compensation Committee

The members of our compensation committee are Mr. Mott, Dr. Allen, and Mr. Bogle. Mr. Mott is chair of the compensation committee. Our compensation committee met eight times during 2020. Our compensation committee’s responsibilities include:

 

   

reviewing and approving, or making recommendations to our board of directors with respect to, our chief executive officer’s compensation;

 

   

reviewing and approving, or making recommendations to our board of directors with respect to, the compensation of our other executive officers;

 

   

overseeing the evaluations of our senior executives;

 

   

reviewing and making recommendations to our board of directors with respect to management succession planning;

 

   

overseeing and administering our cash and equity incentive plans;

 

   

reviewing and making recommendations to our board of directors with respect to director compensation;

 

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reviewing and discussing annually with management our “Compensation Discussion and Analysis” disclosure; and

 

   

preparing the compensation committee report if and to the extent then required by SEC rules.

Our compensation committee may delegate to one or more executive officers the power to grant options or other stock awards pursuant to our incentive plans to employees of the company who are not executive officers or senior vice presidents.

We believe that the composition of our compensation committee meets the requirements for independence under current Nasdaq and SEC rules and regulations.

Compensation Committee Interlocks and Insider Participation

During 2020, the members of our compensation committee were Mr. Mott, Dr. Allen and Mr. Bogle. None of the members of our compensation committee is an officer or employee of our company, nor have they ever been an officer or employee of our company. None of our executive officers has served as a director or member of the compensation committee (or other committee serving an equivalent function) of any other entity whose executive officers served as one of our directors or a member of the compensation committee.

Nominating and Corporate Governance Committee

The members of our nominating and corporate governance committee are Dr. Goldfischer, Mr. Conroy and Dr. Richon. Dr. Goldfischer is chair of the nominating and corporate governance committee. Our nominating and corporate governance committee had one meeting during 2020. Our nominating and corporate governance committee’s responsibilities include:

 

   

identifying individuals qualified to become members of our board of directors;

 

   

recommending to our board of directors the persons to be nominated for election as directors and to each of our board’s committees;

 

   

developing, reviewing and recommending proposed updates to our board of directors of our board’s corporate governance guidelines; and

 

   

overseeing an annual evaluation of our board of directors.

We believe that the composition of our nominating and corporate governance committee meets the requirements for independence under current Nasdaq and SEC rules and regulations.

Board and Committee Meetings Attendance

Our board of directors recognizes the importance of director attendance at board and committee meetings. The full board of directors met six times during 2020. During 2020, each member of the board of directors attended in person or participated in 75% or more of the aggregate of (i) the total number of meetings of the board of directors (held during the period for which such person has been a director) and (ii) the total number of meetings held by all committees of the board of directors on which such person served (during the periods that such person served).

Director Attendance at Annual Meeting of Stockholders

Directors are responsible for attending the annual meeting of stockholders. Four members of our board of directors attended the 2020 annual meeting of stockholders.

Code of Business Conduct and Ethics

We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or

 

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controller, or persons performing similar functions. A current copy of the code of business conduct and ethics is posted on the corporate governance section of the “Investor Center” on our website, which is located at http://www.epizyme.com. If we make any substantive amendments to, or grant any waivers from, the code of business conduct and ethics for any officer or director, we will disclose the nature of such amendment or waiver on our website or in a current report on Form 8-K.

Corporate Governance Guidelines

Our board of directors has adopted corporate governance guidelines to assist in the exercise of its duties and responsibilities and to serve the best interests of our company and our stockholders. The guidelines provide that:

 

   

the principal responsibility of our board of directors is to oversee the management of our company;

 

   

a majority of the members of our board of directors must be independent directors;

 

   

the independent directors meet in executive session at least twice a year;

 

   

directors have full and free access to management and, as necessary, independent advisors; and

 

   

our nominating and corporate governance committee will oversee an annual self-evaluation of our board of directors to determine whether it and its committees are functioning effectively.

A copy of the corporate governance guidelines is posted under the heading “Corporate Governance” on the Investor Relations section of our website, which is located at http://www.epizyme.com.

Board Leadership Structure and Board’s Role in Risk Oversight

In April 2016, we appointed David M. Mott, an independent director under applicable Nasdaq rules, as chairman of our board of directors. Separating the duties of the chairman of the board from the duties of the chief executive officer allows our chief executive officer to focus on our day-to-day business, while allowing the chairman of the board to lead the board of directors in its fundamental role of providing advice to and independent oversight of management. Specifically, our chairman of the board runs meetings of our independent directors, facilitates communications between management and the board of directors and assists with other corporate governance matters.

Our board of directors believes that this structure ensures a greater role for the independent directors in the oversight of our company and active participation of the independent directors in setting agendas and establishing priorities and procedures for the work of our board of directors. Our board of directors believes its administration of its risk oversight function has not affected its leadership structure. Our board of directors believes that we have an appropriate leadership structure for us at this time which demonstrates our commitment to good corporate governance.

Risk is inherent with every business and how well a business manages risk can ultimately determine its success. We face a number of risks, including those described under “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2020. Our board of directors is actively involved in oversight of risks that could affect us. This oversight is conducted primarily by our full board of directors, which has responsibility for general oversight of risks.

Our board of directors oversees our risk management processes directly and through its committees. Our management is responsible for risk management on a day-to-day basis and our board of directors and its committees oversee the risk management activities of management. Our board of directors satisfies this responsibility through full reports by each committee chair regarding the committee’s considerations and actions, as well as through regular reports directly from officers responsible for oversight of particular risks within our company. For example, during meetings of our board of directors, members of our senior management team

 

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provide updates to our board of directors on the impacts of the COVID-19 pandemic on our business and workforce, and continue to do so as the COVID-19 pandemic remains ongoing. Our audit committee oversees risk management activities related to financial controls, cybersecurity and legal and compliance risks. Our compensation committee oversees risk management activities relating to our compensation, management succession planning and human capital management policies and practices. Our nominating and corporate governance committee oversees risk management activities relating to the composition of our board of directors and board committees. In addition, members of our senior management team attend our board meetings, which are held at least quarterly, and are available to address any questions or concerns raised by our board of directors on risk management and any other matters. Our board of directors believes that full and open communication between management and the board of directors is essential for effective risk management and oversight.

Communication with Our Directors

Any interested party with concerns about our company may report such concerns to the board of directors, or the chairman of our board of directors, or otherwise the chairman of the nominating and corporate governance committee, by submitting a written communication to the attention of such director at the following address:

c/o Epizyme, Inc.

400 Technology Square, 4th Floor

Cambridge, Massachusetts 02139

United States

You may submit your concern anonymously or confidentially by postal mail. You may also indicate whether you are a stockholder, customer, supplier, or other interested party.

We may choose to forward a copy of any such written communication to our legal counsel and a copy of such communication may be retained for a reasonable period of time. The director may discuss the matter with our legal counsel, with independent advisors, with non-management directors, or with our management, or may take other action or no action as the director determines in good faith, using reasonable judgment and discretion.

Communications may be forwarded to all directors if they relate to important substantive matters and include suggestions or comments that may be important for the directors to know. In general, communications relating to corporate governance and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances, and matters as to which we tend to receive repetitive or duplicative communications.

The audit committee oversees the procedures for the receipt, retention, and treatment of complaints received by us regarding accounting, internal accounting controls, or audit matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting, internal accounting controls or auditing matters. We have also established a toll-free telephone number for the reporting of such activity, which is 866-858-6315.

 

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Director Compensation

The table below shows all compensation earned by our non-employee directors during 2020.

 

Name

   Fees Earned or
Paid

In Cash
($) (1)
    Option
Awards
($) (2)
    Total
($)
 

Andrew R. Allen, M.D., Ph.D.

     46,250       150,000       196,250  

Kenneth Bate

     47,500       150,000       197,500  

Carl Goldfischer, M.D.

     76,000       150,000       226,000  

David M. Mott

     93,750  (3)      545,740  (4)      639,490  

Richard F. Pops (6)

     47,500       150,000       197,500  

Kevin Conroy

     44,500  (5)      150,000       194,500  

Michael Giordano, M.D.

     40,000       150,000       190,000  

Victoria Richon, Ph.D.

     44,500       150,000       194,500  

Grant Bogle

     46,250       150,000       196,250  

Pablo Legorreta

     40,000       150,000       190,000  

 

(1)

Amounts represent cash compensation earned during 2020 for services rendered by each non-employee member of the board of directors.

(2)

Amounts shown reflect the aggregate grant date fair value of option awards granted during 2020. The grant date fair value was computed in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 718, Compensation-Stock Compensation. See note 15 to the financial statements in our annual report on Form 10-K for the year ended December 31, 2020 regarding assumptions we made in determining the fair value of option awards. The aggregate number of shares of common stock underlying stock options outstanding as of December 31, 2020 for our non-employee directors were: Dr. Allen: 81,645; Mr. Bate: 94,145; Dr. Goldfischer: 101,478; Mr. Mott: 151,478; Mr. Conroy: 69,146; Dr. Giordano: 56,646; Dr. Richon: 51,088; Mr. Bogle: 51,088; and Mr. Legorreta: 48,421.

(3)

Includes $93,750 of fees Mr. Mott elected to receive in common stock in lieu of cash for his 2020 annual board of director fees.

(4)

Consists of (i) an option to purchase 14,013 shares of our common stock granted on the date of our 2020 annual meeting and (ii) an option to purchase 50,000 shares of our common stock granted on September 22, 2020, as further described below.

(5)

Includes $44,500 of fees Mr. Conroy elected to receive in common stock in lieu of cash for his 2020 annual board of director fees.

(6)

Mr. Pops resigned from the board of directors effective October 31, 2020.

During 2020, we did not provide any cash compensation to Mr. Bazemore, our President and Chief Executive Officer, for his service as a director. Mr. Bazemore’s compensation is set forth under “Executive Compensation—Summary Compensation Table.”

Non-Employee Director Compensation Program

2020 Program

Our non-employee director compensation program is intended to provide a total compensation package that enables us to attract and retain qualified and experienced individuals to serve as directors and to align our directors’ interests with those of our stockholders. Under our non-employee director compensation program, we pay our non-employee directors a cash retainer for service on the board of directors and for service on each committee on which the director is a member. The chairman of the board and the chairman of each committee receive additional retainers for such service. These fees are payable in arrears in four equal quarterly installments on the last day of each quarter, provided that the amount of such payment is prorated for any portion of such quarter that the director is not serving on our board of directors.

 

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In 2020, directors received the following cash fees under our non-employee director compensation program for service on our board of directors, as chairman of our board of directors and for service on each committee of our board of directors on which the director is a member.

 

     Member
Annual Fee
     Chairman
Additional
Annual Fee
 

Board of Directors

   $ 40,000      $ 35,000  

Audit Committee

     7,500        15,000  

Compensation Committee

     6,250        12,500  

Nominating and Corporate Governance Committee

     4,500        9,000  

Under our non-employee director compensation program, directors have the right to elect to receive 100% of their cash fees payable in a calendar year in the form of unrestricted shares of our common stock in lieu of cash fees. These shares of common stock are issued under our 2013 Stock Incentive Plan, or the 2013 Plan. The number of shares to be issued to participating directors will be determined by dividing the cash fees for which the director has elected to receive common stock by the closing price of our common stock on the last trading day of the quarter in which such fees were earned. Each incumbent director may elect to receive stock for fees prior to the beginning of each fiscal year, and each new director has the immediate option to elect to receive stock for fees, beginning with the next full fiscal year during which he or she serves. In 2020, two members of the Board, Mr. Mott and Mr. Conroy, elected to receive their cash fees in the form of unrestricted shares of our common stock.

In addition, under our 2020 director compensation program, upon a non-employee director’s initial election to our board of directors, such director received an option to purchase the number of shares of our common stock that have a Black-Scholes value as of the date of grant equal to $300,000 (as calculated using the same methodology that we use to calculate the value of stock awards for purposes of our financial statements); however, the number of shares of common stock issuable upon exercise of such option may in no event exceed 50,000 shares. On the date of each annual meeting of stockholders, each non-employee director that had served on our board of directors for at least six months and that continued to serve on our board of directors after such annual meeting, received an option to purchase the number of shares of our common stock that have a Black-Scholes value as of the date of grant equal to $150,000 (as calculated using the same methodology that we use to calculate the value of stock awards for purposes of our financial statements); however, in no year may the number of shares of common stock issuable upon such option exceed 25,000 shares. Subject to the non-employee director’s continued service as a director, each option will vest with respect to 25% of the shares on the first anniversary of the grant date and the remaining shares vest in equal monthly installments thereafter until the fourth anniversary of the grant date.

Option Grant Outside of Non-Employee Director Compensation Program

In addition to the annual grants of stock options provided to our non-employee directors in 2020 pursuant to our non-employee director compensation program, in September 2020 Mr. Mott was granted stock options to purchase up to 50,000 shares of our common stock, having a grant date fair value of $395,740. This grant was awarded to Mr. Mott in light of his significant contributions to the Company as a long-standing member of our board of directors.

Amendment to Non-Employee Director Compensation Program

In addition, in December 2020, our compensation committee, in consultation with our independent compensation consultant, Pearl Meyer, recommended for approval by our board of directors, and our board of directors approved, updates to our non-employee director compensation program. These updates were based on an analysis of the market and peer company review and to bring our non-employee director compensation program in line with others in the industry. Effective January 1, 2021, under our non-employee director compensation program,

 

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each non-employee director receives, upon his or her initial election to our board of directors, an option to purchase the number of shares of our common stock that has a Black-Scholes value as of the date of grant equal to $412,500, or the Initial Option Grant. The Initial Option Grant will vest over three years, with 33% of the shares of the common stock underlying such option vesting on the one-year anniversary of the grant date and the balance vesting in equal monthly installments thereafter until the third anniversary of the grant date, subject to the non-employee director’s continued service as a director. Each non-employee director also receives, upon his or her initial election to our board of directors, a grant of restricted stock units for a number of shares of our common stock determined by dividing $137,500 by the closing price of our common stock on the Nasdaq Global Market on the date of grant, or the Initial RSU Grant. The Initial RSU Grant will vest in equal annual installments over three years with the first installment vesting on the first anniversary of the grant date, subject to the non-employee director’s continued service as a director. The number of shares of common stock issuable upon exercise of the Initial Option Grant and the Initial RSU Grant shall in no event exceed a total of 100,000 shares of common stock.

Further, under our non-employee director compensation program, on the date of each annual meeting of stockholders, each non-employee director that has served on our board of directors for at least six months will receive an option to purchase the number of shares of our common stock that have a Black-Scholes value as of the date of grant equal to $206,250, or the Annual Option Grant. The Annual Option Grant will vest in full on the earlier of the first anniversary of the grant date and the date of the succeeding annual meeting of stockholders, subject to the non-employee director’s continued service as a director. On the date of each annual meeting of stockholders, each non-employee director that has served on our board of directors for at least six months will also receive a grant of restricted stock units for a number of shares of our common stock determined by dividing $68,750 by the closing price of our common stock on the Nasdaq Global Market on the date of grant, or the Annual RSU Grant. The Annual RSU Grant will vest in full on the earlier of the first anniversary of the grant date and the date of the succeeding annual meeting of stockholders, subject to the non-employee director’s continued service as a director. In no year shall the number of shares of common stock issuable upon exercise of the Annual Option Grant and vesting of the Annual RSU Grant exceed a total of 50,000 shares of common stock.

All options and restricted stock units issued to our non-employee directors under our non-employee director compensation program will become exercisable in full upon a change in control. The exercise price of these options will be equal to the fair market value of our common stock on the date of grant.

The updated non-employee director compensation program also provides for the payment of the following annual cash fees, payable in arrears in four equal quarterly installments on the last day of each quarter, to our non-employee directors as consideration for their service on our board of directors, as chairman of our board of directors and for service on each committee of our board of directors on which the director is a member:

 

     Member
Annual Fee
     Chairman
Additional
Annual Fee
 

Board of Directors

   $ 45,000      $ 35,000  

Audit Committee

     10,000        10,000  

Compensation Committee

     7,500        7,500  

Nominating and Corporate Governance Committee

     5,000        5,000  

 

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview

Our compensation committee is responsible for reviewing and approving, or recommending for approval by the board of directors, the compensation of our named executive officers, or NEOs, including salary, cash bonus and equity incentive compensation levels, severance arrangements, change in control benefits and other forms of compensation. This section discusses the philosophy, programs, processes, decisions, and other relevant information with respect to the compensation of our NEOs.

Our NEOs for the year ended December 31, 2020 were:

 

Name

  

Title

Robert Bazemore

   President and Chief Executive Officer

Paolo Tombesi

   Chief Financial Officer

Matthew Ros

   Executive Vice President, Chief Strategy and Business Officer

Shefali Agarwal

   Executive Vice President, Chief Medical and Development Officer

Jeffery Kutok

   Chief Scientific Officer

Our Mission and Vision

Our mission is to rewrite treatment for cancer through novel epigenetic medicines. We aspire to change the standard of care for patients and physicians by developing targeted medicines with fundamentally new mechanisms of action directed at specific causes of hematological malignancies and solid tumors.

Our vision is focused on four critical imperatives that we refer to as The Next EPIsode: Rewriting Oncology Treatment with Epigenetics and announced earlier in 2021. The four pillars of this five-year corporate strategy are:

 

   

Maximize our effectiveness as a commercial organization to achieve adoption of TAZVERIK® among as many follicular lymphoma (FL) and epithelioid sarcoma (ES) patients as possible, including in earlier treatment lines and in combination regimens with the data to support this expanded use;

 

   

Build on TAZVERIK’s pipeline-in-a-drug potential, demonstrating tazemetostat’s benefit in additional hematological malignancies and solid tumors;

 

   

Expand our pipeline and evolving oncology portfolio, bringing novel oncology therapeutics into clinical development to maintain our position as a leader in epigenetics; and

 

   

Leverage options to expand patient reach and increase shareholder value, including through commercial, clinical, and research collaborations.

Our pioneering work in epigenetic drug development and delivery is demonstrated by the commercialization of TAZVERIK and the continued development and advancement of tazemetostat in a number of cancer indications and treatment settings. Our scientific capabilities have enabled us to expand our platform into new epigenetic target classes that we believe have the potential to be highly important in disease biology. Our discovery research continues to yield exciting new targets for which we are developing novel small molecule programs with the goal of creating a sustainable pipeline of clinical candidates. To help further accelerate our portfolio, we have established, and plan to continue to identify and potentially pursue additional, strategic collaborations with biopharmaceutical leaders in order to maximize our resources.

 

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Business Environment and Performance

As a fully integrated, commercial-stage biopharmaceutical company headquartered in Cambridge, Massachusetts, we operate in a highly competitive environment for capital and talent. Achieving our mission requires vision, expertise and execution from our executives. 2020 was a year of tremendous progress towards our long-term goals and mission, highlighted by the following:

Commercial

 

   

We positioned ourselves as a leader in epigenetics in 2020, with back-to-back accelerated approvals for TAZVERIK, the first and only FDA-approved EZH2 inhibitor, in both a solid tumor (ES) and hematological malignancy (FL).

 

   

In January 2020, the U.S. Food and Drug Administration, or FDA, granted accelerated approval of TAZVERIK for the treatment of adult and pediatric patients aged 16 years and older with metastatic or locally advanced ES not eligible for complete resection.

 

   

In June 2020, the FDA approved a supplemental New Drug Application for TAZVERIK for the following FL indications: (1) adult patients with relapsed or refractory FL whose tumors are positive for an EZH2 mutation as detected by an FDA-approved test and who have received at least two prior systemic therapies, and (2) adult patients with relapsed or refractory FL who have no satisfactory alternative treatment options.

 

   

We shipped/made TAZVERIK available to patients within five days after the first FDA approval.

 

   

Despite the impact of the global COVID-19 pandemic, which impacted patient visits to physicians, new prescriptions in the oncology patient setting overall, and our ability to access healthcare professionals directly, we made progress in the adoption by physicians of TAZVERIK for the treatment of ES and FL.

 

   

TAZVERIK was included in the National Comprehensive Cancer Network’s Clinical Practice Guidelines in Oncology (NCCN Guidelines®) as a recommended Category 2A treatment for the approved ES and FL indications (added to NCCN Guidelines in February 2020 and February 2021, respectively), and 90% of insured lives covered by payors in the approved indications.

Scientific/Pipeline

 

   

Results of our Phase 2 trials evaluating TAZVERIK for the treatment of FL and for the treatment of ES were published in The Lancet Oncology in October 2020.

 

   

We progressed the clinical development of tazemetostat to investigate therapeutic potential in a range of cancer indications, including clinical trials in earlier lines of therapy for FL, ES and clinical trials in metastatic castration-resistant prostate cancer, or mCRPC, achieving enrollment expectations despite the challenges related to the COVID-19 pandemic.

 

   

As part of the accelerated approval for ES and FL in the approved indications, we completed the planned enrollment in the safety run-in portions of our confirmatory trials of TAZVERIK in ES and FL.

 

   

We progressed a number of pre-clinical programs across our three epigenetic classes (histone methyltransferase, or HMT, inhibitors; histone acetyltransferases, or HAT, inhibitors; and helicase inhibitors) to next milestones and decision points, including an inhibitor program in SETD2, an HMT which is currently on track for a planned IND submission with the FDA in mid-2021.

Organizational

 

   

We transitioned to a fully integrated, commercial-stage organization through the launch of TAZVERIK for patients in the approved indications in ES and FL in the midst of unique challenges presented by the evolving COVID-19 pandemic, including fully hiring our field sales, market access and medical affairs teams to support both launches.

 

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We hired according to plan, kept pace with backfill, and achieved a low rate of employee attrition.

 

   

We appointed Dr. Jeffery Kutok as our Chief Scientific Officer in April 2020 and Erin Boyer as our Chief People & Culture Officer in November 2020.

 

   

We promoted Matthew Ros to Executive Vice President, Chief Strategy and Business Officer and Vicki Vakiener to Chief Commercial Officer, each in September 2020.

 

   

We entered into an amended and restated loan agreement with BioPharma Credit Investments V (Master) LP, BPCR Limited Partnership and BioPharma Credit PLC and drew down an additional $150 million from Pharmakon in November 2020 to fund our growth initiatives.

 

   

We closely managed expenses and hiring given the impact of the COVID-19 pandemic on business results.

Key Compensation Decisions and Actions

Our compensation committee took several actions in 2020 and 2021 taking into account our compensation philosophy and objectives, the needs and performance of our company, individual performance, and other factors such as market data and industry best practices.

 

   

Set Compensation for our new Chief Scientific Officer. In January 2020, the compensation committee approved a compensation arrangement for our new chief scientific officer who started in April 2020, consisting of a base salary of $450,000, an annual target bonus opportunity of 40% of his base salary, a new hire long-term incentive award of stock options to purchase 131,580 shares of common stock and 27,412 shares of restricted stock units (RSUs), each with a Company-standard time-based vesting schedule, and a cash sign-on bonus of $85,000.

 

   

Base Salary Adjustments. In January 2020, the compensation committee reviewed base salaries of our NEOs other than Dr. Kutok. Mr. Bazemore and Mr. Ros received market adjustments to bring their salaries in line with targeted peer group positioning, and Mr. Tombesi and Dr. Agarwal each received an annual merit-based salary adjustment reflecting their performance and contributions and to maintain reasonable positioning relative to our peer companies. Further detail relating to salaries paid to our NEOs and the compensation committee’s determination of such salaries is provided in the section “Compensation Elements and Decisions-Annual Base Salary” below.

 

   

Target Short-term Incentive Opportunities. In January 2020, the compensation committee determined not to adjust individual target short-term incentive bonus percentages for our NEOs for 2020. Further detail relating to the target and earned bonuses paid to our NEOs and the compensation committee’s determination of such bonuses is provided in the section “Compensation Elements and Decisions-Short-term Incentives” below.

 

   

Short-term Incentive Plan Objectives and Design. In January 2020, the compensation committee recommended, and the board of directors approved, corporate objectives for 2020, and the compensation committee approved bonus targets for the NEOs as part of our 2020 bonus program. The approved set of corporate objectives consisted of five corporate objectives, each with its own weighting to reflect its importance to our business. To the extent objectives are partially met or exceeded, the compensation committee may ascribe a partial achievement or overachievement percentage to each objective, as applicable. The compensation committee also reviews individual performance to determine whether the potential bonus should be increased or decreased on an individual basis. In December 2020, the compensation committee reviewed our achievements in 2020 against our 2020 corporate objectives and the compensation committee recommended, and the board of directors approved, a corporate funding factor of 95%. In January 2021, the compensation committee utilized this factor in making its bonus determinations for 2020. Further detail relating to the compensation committee’s bonus determinations is provided in the section “Compensation Elements and Decisions-Short-term Incentives” below.

 

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Long-term Incentive Grants. In January 2020, the compensation committee approved long-term incentive grants under the 2013 Stock Incentive Plan to our NEOs. The compensation committee determined that, for 2020, eligible NEOs would receive 75% of the value of their long-term incentive grant in stock options and 25% in RSUs. The compensation committee believes that these actions aligned with our overall compensation philosophy and program objectives. Further detail relating to our long-term incentive grants is provided in the section “Compensation Elements and Decisions-Long-term Incentives” below.

 

   

Bazemore Make-up Equity Awards. In March 2020, certain stock options and restricted stock units that had inadvertently been granted to Mr. Bazemore in excess of the annual per participant limit under our 2013 Stock Incentive Plan were rescinded, and we granted new stock options and restricted stock units to Mr. Bazemore in order to replace the fair value of the rescinded equity awards, and to provide Mr. Bazemore with the equity incentive compensation that the compensation committee had intended to provide Mr. Bazemore with the rescinded awards. Further detail relating to the rescinded awards and the replacement awards is provided in the section “Compensation Elements and Decisions-Long-term Incentives” below.

In January 2021, the compensation committee approved 2021 base salaries, short-term incentive targets for 2021, and new long-term incentive grants with the same mix of stock options and RSUs as in 2020.

Compensation Philosophy and Process

The goal of our compensation program is to pay for performance. Within this overarching principle, there are a number of key objectives that the compensation program is designed to achieve.

 

Overarching Philosophy:           Pay for Performance
Key Objectives:  

Attract and retain qualified executive talent to support our mission, vision, and business objectives

 

Motivate individuals to achieve our mission, vision, and business objectives

 

Foster a culture of camaraderie, collaboration, discipline, innovation, openness, patient-focus, and resilience

 

Align the interests of our NEOs with our stockholders

To attract and retain qualified executives, we seek to pay our NEOs compensation that is competitive within our industry. To understand the competitive market for NEO compensation in our industry, we engage our independent compensation consultant, Pearl Meyer, to perform benchmarking exercises. We do not explicitly target a certain percentile from our market benchmarking to compensate our NEOs, but rather review each NEO’s positioning relative to the market within the context of his or her experience, contributions, role, potential, and other factors. Similarly, we do not target a specific mix of compensation, although we deliver a majority of compensation through long-term incentives consistent with our pay for performance philosophy, and adopt a program that is generally competitive with peers in terms of each element of pay.

Role of the Compensation Committee. The compensation committee is responsible for establishing and overseeing our executive compensation program. Our compensation committee typically reviews and discusses with our chief executive officer proposed compensation for all executives other than the chief executive officer. Following the compensation committee’s discussions with our chief executive officer, and in consideration of the information provided by Pearl Meyer, the compensation committee may consult with our board of directors about the compensation of each NEO before determining and approving each NEO’s compensation or may determine and approve NEO compensation as a committee.

Role of our Chief Executive Officer. Our chief executive officer evaluates and reviews with the compensation committee the individual performance and contributions of each of the other NEOs and makes recommendations

 

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to the compensation committee regarding base salary, non-equity incentive plan compensation and equity awards. The compensation committee reviews and considers such recommendations, but ultimately retains full discretion and authority over the final compensation decisions for the NEOs. Our chief executive officer, in consultation with other members of our management team, also recommends the corporate performance objectives that are reviewed and approved by the compensation committee and the board of directors and used to determine bonus amounts.

Role of our Independent Compensation Consultant. Pursuant to its charter, the compensation committee has the sole authority to retain compensation consultants to assist in its evaluation of executive and director compensation. Our compensation committee engaged Pearl Meyer as its independent compensation consultant to review our executive compensation peer group and program design and assess our executives’ and our directors’ compensation relative to comparable companies. Pearl Meyer provides our compensation committee with information regarding market compensation practices and trends. Our compensation committee considered the relationship that Pearl Meyer has with us, the members of our board of directors and our executive officers, and has determined that Pearl Meyer is serving, and has served, as an independent and conflict-free advisor to the compensation committee.

Factors in Setting Compensation. The compensation committee reviews NEO compensation annually. As part of its annual compensation review, the compensation committee evaluates our compensation program and arrangements for our NEOs based on a number of factors, including:

 

Internal Factors    External Factors

•  Compensation philosophy and objectives

•  Company goals and objectives

•  Historical company performance and company outlook

•  Individual NEO roles and profiles

•  Individual performance and contributions

•  Current pay data for NEOs

•  Historical Say on Pay voting results

  

•  Peer group information and data

•  Broader industry-specific information and data

•  Compensation committee experience

•  Market dynamics

An important external factor in making compensation decisions is our compensation peer group. The compensation committee considers a select number of key inputs, summarized below, to determine the companies to be included in the peer group. The compensation data from the peer group provide a benchmark for market-competitive base salaries, short- and long-term incentive targets, and estimated total direct compensation.

In October 2019, the compensation committee, together with Pearl Meyer, used the following screening criteria to determine the group of companies to be in the peer group that was used in setting 2020 compensation:

 

Criteria    Description
Industry    U.S. publicly-traded biotechnology or pharmaceutical companies
Development Stage    Companies with a lead asset in phase III, NDA, or commercial entities
Size   

Market capitalization of $500m to $10bln

Headcount of 60 to 600

Annual R&D expense of $30m to $325m

Other Factors used to Prioritize Selected Companies   

Companies with an oncology focus

Local companies

 

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Based on this screening criteria, in October 2019 the compensation committee approved a peer group of 21 companies to be used in setting 2020 compensation, listed below.

 

Acceleron Pharma Inc.    Five Prime Therapeutics, Inc.    MacroGenics, Inc.
Akebia Therapeutics, Inc.    G1 Therapeutics, Inc.    Mirati Therapeutics, Inc.
Blueprint Medicines Corporation    ImmunoGen, Inc.    Odonate Therapeutics, Inc.
Clovis Oncology, Inc.    Inovio Pharmaceuticals, Inc.    Radius Health, Inc.
Coherus BioSciences, Inc.    Iovance Biotherapeutics, Inc.    Seres Therapeutics, Inc.
Deciphera Pharmaceuticals, Inc.    Ironwood Pharmaceuticals, Inc.    TG Therapeutics, Inc.
Dynavax Technologies Corporation    Karyopharm Therapeutics Inc.    Xencor, Inc.

The 2020 peer group included the following changes from the 2019 peer group.

 

    Action    Company    Rationale
2019 peer group companies excluded from the 2020 peer group    Aduro BioTech, Inc.    Market capitalization below range
   Array BioPharma Inc.    Acquired
   Syros Pharmaceuticals, Inc.    Phase II lead asset
   ZIOPHARM Oncology, Inc.    Phase II lead asset
New companies included in the 2020 peer group    Coherus BioSciences, Inc.    Met screening criteria
   G1 Therapeutics, Inc.    Met screening criteria
   Ironwood Pharmaceuticals, Inc.    Met screening criteria
   Radius Health, Inc.    Met screening criteria
   TG Therapeutics, Inc.    Met screening criteria

The summary statistics below demonstrate how we compared to the companies in the 2020 peer group at the time we determined the peer group.

 

Statistic

   Market
Capitalization

($B)
     Headcount      R&D
Expense

($M)
 

75th Percentile

     1.7        324        158  

50th Percentile

     0.9        217        123  

25th Percentile

     0.4        117        101  

Epizyme

     1.1        200      $ 117  

In September 2020, the compensation committee, with the assistance of Pearl Meyer, reviewed the companies included in the 2020 peer group for continued appropriateness in 2021 using similar criteria it used to determine the 2020 peer group. The criteria used for the 2021 peer group was as follows:

 

Criteria    Description
Industry    U.S. publicly-traded biotechnology or pharmaceutical companies
Development Stage    Companies with a lead asset in phase 3, NDA or commercial entities
Size   

Market capitalization of $500m to $5bln

Headcount of 100 to 600

Annual R&D expense of $40m to $400m

Other Factors used to Prioritize Selected Companies   

Commercial companies

Companies most similar to Epizyme in terms of size and R&D spending

 

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Pearl Meyer recommended the following changes to the 2020 peer group, which the compensation committee approved. The revised group was used to set compensation for fiscal year 2021.

 

Action   Company    Rationale
2020 peer group companies excluded from the 2021 peer group   Acceleron Pharma Inc.    Market capitalization above range
  Five Prime Therapeutics, Inc.    Headcount and market capitalization below range, phase II lead asset
  ImmunoGen, Inc.    Headcount below range
  Seres Therapeutics, Inc.    Market capitalization below range
  Xencor, Inc.    Phase II lead asset
New companies included in the 2021 peer group   Akcea Therapeutics, Inc.(1)    Met screening criteria
  Corcept Therapeutics Incorporated    Met screening criteria
  Global Blood Therapeutics, Inc.    Met screening criteria
  Halozyme Therapeutics, Inc.    Met screening criteria
  Zogenix, Inc.    Met screening criteria

 

(1)

Ionis Pharmaceuticals, Inc. announced the completion of its acquisition of Akcea Therapeutics, Inc. in October 2020, and moving forward Akcea will not be included in the peer group.

The summary statistics below demonstrate how we compared to the companies in the 2021 peer group at the time we determined the peer group.

 

Statistic

   Market
Capitalization

($B)
     Headcount      R&D
Expense

($M)
 

75th Percentile

     2.4        352        211  

50th Percentile

     1.3        255        158  

25th Percentile

     0.9        141        109  

Epizyme

     1.5        203        131  

Say on Pay Vote Results

We held a non-binding advisory vote on executive compensation, or “say on pay” vote, at our 2020 annual meeting of stockholders. Over 90% of the shares voted on this proposal were cast in support of our 2019 executive compensation program. While the compensation committee viewed the results of the “say-on-pay” vote as broad stockholder support for our executive compensation program, the compensation committee will continue to consider the results of stockholder advisory votes on executive compensation when making future decisions relating to our executive compensation program.

Compensation Elements and Decisions

The primary elements of our executive compensation program are:

 

Element   Purpose   Timing
Base Salary   Fixed amount to attract and retain top talent.   Initial base salaries are set at the time of hire, and adjustments to base salaries are considered in conjunction with changes in job responsibility or annually as part of our merit increase process.

 

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Element   Purpose   Timing
Short-term Incentives   Performance-contingent compensation to reward company and individual performance against a set of annual objectives.   Generally measured and paid out on an annual basis, typically in the first quarter of the following fiscal year.
Long-term Incentives   Variable incentive compensation to promote performance, support retention, and create stockholder alignment.   Generally granted at the time of hire, and annually following the close of the previous fiscal year.
Severance and Change in Control Benefits   Competitive benefits consistent with industry practice.   Upon a change of control of our company or an NEO’s termination of employment.
Benefits   Fixed benefits to promote individual health, welfare and financial security.   The timing of our benefits varies by element.

Annual Base Salary

Base salaries are used to recognize the experience, skills, knowledge and responsibilities required of our NEOs. Base salaries for our NEOs are established at the time the NEO is hired, taking into account the position for which the NEO is being considered and the relevant market data (where available), as well as the NEO’s qualifications and prior experience. None of our NEOs is currently party to an employment agreement that provides for automatic or scheduled increases in base salary. However, on an annual basis, our compensation committee reviews and evaluates, with input from our chief executive officer (other than with respect to himself), the need for adjustment of the base salaries of our NEOs based on changes and expected changes in the scope of a NEO’s responsibilities, including promotions, the individual contributions made by and performance of the NEO during the prior year, overall labor market conditions, the relative ease or difficulty of replacing the executive with a well-qualified person, our overall growth and development as a company and general salary trends in our industry and among our peer group and where the NEO’s salary falls in the salary range presented by that data. In making decisions regarding salary increases, our compensation committee may also draw upon the experience of members of the committee and of our full board of directors with other companies. No formulaic base salary increases are provided to our NEOs.

The following table presents the base salaries for each of our NEOs for the years 2019 and 2020, as approved by our compensation committee. Unless otherwise noted, the 2019 base salaries became effective on January 1, 2019 and the 2020 base salaries became effective on January 1, 2020.

 

Named Executive Officer

   2019
Annualized
Salary

($)
    2020 Adjustment      2020
Annualized
Salary

($)
     Nature of Increase
  % of Base
Salary
    Amount
($)
 

Robert Bazemore

     592,937       9.6     57,063        650,000      Market adjustment

Paolo Tombesi

     455,000 (1)      1.1     5,000        460,000      Merit increase

Matthew Ros

     432,600       6.3     27,400        460,000      Market adjustment

Shefali Agarwal

     463,500       3.1     14,500        478,000      Merit increase

Jeffery Kutok (2)

     —         —         —          450,000      Set at time of hire

 

(1)

Mr. Tombesi commenced employment in August 2019.

(2)

Dr. Kutok commenced employment in April 2020 and was not part of the January 2020 merit increase process.

 

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Short-term Incentives

Our bonus program is designed to motivate and reward our NEOs for achievements relative to our corporate objectives and expectations for each fiscal year. Under our bonus program, each NEO has a target bonus opportunity, defined as a percentage of his or her annual base salary. The general design of our bonus program is as follows:

 

NEO

Base

Salary

  X  

NEO

Target

Bonus

Percentage

  X  

Corporate

Funding

Factor

  X  

Individual

Performance

Modifier

  =  

Short-term

Incentive

Earned

For 2020, our compensation committee set the following target bonus opportunities for each NEO:

 

NEO

   2020 Base
Salary

($)
     Target
Bonus
%
    Target
Bonus
Award
($)
 

Robert Bazemore

     650,000        60     390,000  

Paolo Tombesi

     460,000        40     184,000  

Matthew Ros

     460,000        40     184,000  

Shefali Agarwal

     478,000        40     191,200  

Jeffery Kutok (1)

     450,000        40     180,000  

 

(1)

Dr. Kutok’s 2020 target bonus was established at the time of his hire.

Corporate Objectives

Our compensation committee established the following corporate objectives to assess our corporate performance in 2020. In December 2020, the compensation committee reviewed our achievements against these 2020 corporate objectives to arrive at a recommended corporate funding factor of 95%, which the board of directors approved.

 

Objective/Assessment

  

Weighting

Objective: Launch TAZVERIK Successfully in U.S.

 

•  Achieve U.S. revenue forecast expectations.

 

•  Ensure TAZVERIK available to be shipped within 10 business days of approval.

 

•  Ensure ³ 90% payer access to TAZVERIK within approved indications within 6 months of approval.

 

•  Ensure TAZVERIK prescriptions fulfilled, on average, within five days.

 

•  Execute TAZVERIK publication plan and scientific exchange in high impact journals and medical meetings.

   40%

Assessment:

 

•  TAZVERIK shipped within five days of first FDA approval.

 

•  TAZVERIK added to NCCN Guidelines for both ES and FL according to label, and 90% of insured lives covered for both indications by year-end.

 

•  Average time from prescription to fulfillment to patients averaged approximately five days during 2020.

  

 

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Objective/Assessment

  

Weighting

 

•  Achieved important metrics regarding commercial execution and TAZVERIK uptake in both indications, including awareness, share of promotional voice with customers, and share of new patient starts, given that we launched in an entirely virtual environment with little to no physical access to customers.

 

•  Exceeded 2020 revenue forecast for TAZVERIK in ES, and did not meet 2020 revenue forecast in FL largely, we believe, due to COVID-19-related impact on our ability to access customers and impact on patient visits to oncologists, resulting in reduction in new patient starts across all FL therapies.

  

Objective: Transition Epizyme to a Commercial Enterprise & Prepare for Global Launch

 

•  Ensure ES and FL commercial organizations fully hired and trained by launch readiness date.

 

•  Maintain compliant culture and operations in both in-house and field-based organizations.

   20%

Assessment:

 

•  Hired all commercial staff and field teams on time.

 

•  Reinforced a compliance-based culture from senior leadership, revised operating procedures to allow for escalation of compliance matters, and had no compliance violations reported requiring investigation or disciplinary action.

  

Objective: Expand TAZVERIK Potential

 

•  Progress all FDA required clinical studies to key milestones.

 

•  Execute at least 4 board-approved clinical proof of concept studies in new indications or combinations.

 

•  Execute all company-supported investigator sponsored trials (ISTs) or collaborations.

 

•  Obtain FDA approval for ES and relapsed or refractory FL (mutant and wild-type) indications with a successful FDA inspection.

   30%

Assessment:

 

•  TAZVERIK approved for both ES and relapsed or refractory FL with broad labels allowing for use of TAZVERIK in all lines of ES, and in relapsed or refractory FL in patients with both mutant and wild-type EZH2.

 

•  All approved ISTs and collaboration studies underway and enrolling patients. The previous IST combining tazemetostat plus Rituximab in relapsed or refractory FL was converted to a company-sponsored study in order to expand the number of participating sites.

 

•  The safety run-in portions of 3 company-sponsored trials (EZH-302 in relapsed or refractory FL, EZH-301 in ES, and EZH-1101 in mCRPC) completed the planned enrollment, despite the challenges related to the COVID-19 pandemic.

 

•  All FDA-required studies or post-marketing commitments on track for their milestones and expectations.

 

•  We completed a positive FDA inspection to support the approval of TAZVERIK.

  

Objective: Enhance Depth of Epizyme Pipeline

 

•  Complete necessary tazemetostat pre-clinical studies to support expansion of TAZVERIK to selected new indications.

   5%

 

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Objective/Assessment

  

Weighting

 

•  Advance SETD2 through all IND-enabling activities, and prepare for Phase 1 study start.

 

•  Advance multiple HMT, HAT and helicase inhibitor targets to next research stage gates.

  

Assessment:

 

•  Completed pre-clinical studies to support expansion of TAZVERIK development in multiple hematologic and solid tumor cancers in basket studies to be initiated in 2021.

 

•  SETD2 IND-enabling studies ongoing and we plan to submit an IND in mid-2021.

 

•  Advanced multiple epigenetic targets against pre-specified milestones and decision points, supporting our pipeline and ambition of identifying 5 new development candidates over the next 5 years.

 

•  Boehringer Ingelheim collaboration program assets and rights fully returned to us, which we will continue to assess.

  

Objective: Build the Organization and Its Capabilities

 

•  Transform and build the organizational capabilities needed to accomplish our work.

 

•  Make value-driven capital allocation decisions and manage costs to budget.

 

•  Ensure we remain well capitalized to fund our growth plans.

   5%

Assessment:

 

•  Recruited and hired the expertise necessary to operate as a commercial-stage biopharmaceutical company, supporting approvals, promotion, and distribution of TAZVERIK in two initial cancer indications.

 

•  Given the risks and uncertainties regarding the impact of the COVID-19 pandemic on our business, we tightly managed our hiring and expenses.

 

•  Utilized our expanded debt facility under our amended and restated loan agreement to increase our cash position by $150M, furthering our ability to fund the ongoing commercialization of TAZVERIK and other important growth initiatives.

  
Total    100%

Individual Performance Considerations

Our compensation committee also evaluates the individual performance of our NEOs. Consistent with this process, our compensation committee assessed the performance of our chief executive officer in 2020 based on our relative achievement of our corporate objectives as well as his leadership in driving the execution of our strategic plans. In assessing the individual performance in 2020 of our NEOs other than our chief executive officer, our compensation committee, with the input of our chief executive officer, considered each such officer’s individual contributions to the achievement of our corporate objectives, and the officer’s individual achievements in helping to build our business and execute on our strategy. These achievements include the following:

Robert Bazemore, President and Chief Executive Officer: For 2020, the compensation committee reflected on our overall level of performance and determined to award Mr. Bazemore 95% of his total target short-term incentive payment, in line with the corporate funding factor.

Paolo Tombesi, Chief Financial Officer: For 2020, the compensation committee reflected on Mr. Tombesi’s accomplishments, including: providing leadership and continuing to build the organization, scaling our

 

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infrastructure and systems, and achieving our financial goals, and determined that, taking into account both the corporate funding factor and individual performance modifier, Mr. Tombesi earned a bonus equal to 95% of his total target short-term incentive payment.

Matthew Ros, Executive Vice President, Chief Strategy and Business Officer: For 2020, the compensation committee reflected on Mr. Ros’ accomplishments, including: providing leadership and continuing to build the organization, leading build-out of the commercial capabilities and readiness for our launches of TAZVERIK in ES and FL (including adjusting launch plans to virtual interactions), leading our corporate and internal communications, and leading the development of our five-year strategy, The Next EPIsode, and determined that, taking into account both the corporate funding factor and individual performance modifier, Mr. Ros earned a bonus equal to 95% of his total target short-term incentive payment.

Shefali Agarwal, Executive Vice President, Chief Medical and Development Officer: For 2020, the compensation committee reflected on Dr. Agarwal’s accomplishments, including: providing leadership in support of the approvals of TAZVERIK in ES and FL in January 2020 and June 2020, respectively, as well as continuing to build the organization, providing oversight of the medical affairs team to support our launches of TAZVERIK in ES and FL, executing on our existing clinical trials and beginning new trials aimed at maximizing the value and potential of tazemetostat, and determined that, taking into account both the corporate funding factor and individual performance modifier, Dr. Agarwal earned a bonus equal to 104.5% of her total target short-term incentive payment.

Jeffery Kutok, Chief Scientific Officer: For 2020, the compensation committee reflected on Dr. Kutok’s accomplishments, including: establishing and providing leadership to our research organization, providing leadership to enhance the depth of our pipeline, and developing our five-year strategy for research, and determined that, taking into account both the corporate funding factor and individual performance modifier, Dr. Kutok earned a bonus equal to 100% of his total target short-term incentive payment, pro-rated to reflect his April 2020 start date.

Final Calculations

The final calculations used to arrive at the 2020 bonus awards are as follows:

 

NEO    2020 Base
Salary ($)
            Target
Bonus %
           Corporate
Funding
Factor
           Individual
Performance
Modifier
           Bonus
Award ($)
 

Robert Bazemore

     650,000        X        60     X        95     X        100     =        370,500  

Paolo Tombesi

     460,000        X        40     X        95     X        100     =        174,800  

Matthew Ros

     460,000        X        40     X        95     X        100     =        174,800  

Shefali Agarwal

     478,000        X        40     X        95     X        110     =        199,804  

Jeffery Kutok (1)

     337,500        X        40     X        95     X        105     =        134,663  

 

(1)

Dr. Kutok’s 2020 salary and bonus award were pro-rated for time as an Epizyme employee in 2020.

In addition to these short-term incentive payouts, the compensation committee may approve cash bonuses to induce individuals to join our company or make up for lost compensation opportunities at previous employers, or to assist in defraying the cost of relocation to the greater Boston area, commonly referred to as “sign-on” bonuses. In 2020, the compensation committee approved a cash sign-on bonus for Dr. Kutok of $85,000.

Long-term Incentives

Long-term incentives represent a key component of our overall compensation program, and in many cases represent the majority of total annual compensation.

 

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We believe that equity grants provide our NEOs with a strong link to our long-term performance, create an ownership culture and help to align the interests of our NEOs and our stockholders. Our NEOs benefit from equity awards as our stock price increases through the creation of shareholder value. Accordingly, we believe equity awards provide meaningful incentives to our NEOs to achieve increases in the value of our stock over time. In addition, the vesting feature of our equity awards contributes to NEO retention by providing an incentive to our NEOs to remain employed by us during the vesting period.

The compensation committee typically approves long-term incentive grants for NEOs at the start of their employment, and annually thereafter in connection with the annual performance review. Additionally, the compensation committee may periodically grant additional equity awards based on individual role, performance and contribution, as well as competitive market data and information.

None of our NEOs are currently party to an employment agreement that provides for an automatic award of stock options. In 2020, our compensation committee approved, and we granted under our 2013 Stock Incentive Plan, equity awards to our NEOs with time-based vesting, split between stock options, representing 75% of the grant-date target value of the award, and RSUs, representing 25% of the grant-date target value of the award. The time-based vesting schedules were consistent with our previous time-based vesting awards. Although the compensation committee did not elect to make grants that vest based on performance metrics in connection with its 2020 annual compensation review, it may elect to do so either as one-time events or as part of the annual long-term incentive program as circumstances warrant.

 

   

The stock options that we grant to our NEOs typically vest and become exercisable as to 25% of the shares of common stock underlying the option on the first anniversary of the grant date, and as to an additional 1/36th of the shares of common stock underlying the option monthly thereafter. The exercise price of all stock options equals the fair market value of shares of our common stock on the date of grant. Prior to the exercise of an option, the holder has no rights as a stockholder with respect to the shares of common stock underlying such option, including no voting rights and no right to receive dividends or dividend equivalents. Vesting and exercise rights for stock options typically cease shortly after termination of employment except in the case of death or disability. In specified termination and change in control circumstances, equity awards held by our NEOs are subject to accelerated vesting. See “—Severance and Change in Control Benefits” for further information.

 

   

The time-based vesting RSUs that we grant to our NEOs typically vest as to 25% of the shares of the common stock underlying such RSU on an annual basis over a four-year period of time from the grant date.

Within this construct, in determining long-term incentive grants for new hires, the compensation committee evaluates (where available):

 

   

market data for annual and new hire long-term incentive grant values;

 

   

potential lost long-term incentive opportunity from candidate’s current employer, where available; and

 

   

candidate background, experience, and potential.

In determining annual long-term incentive grants for existing NEOs, the compensation committee evaluates:

 

   

market data for annual long-term incentive grant values (where available);

 

   

time the NEO has been employed with us;

 

   

NEO performance and contributions in the previous year;

 

   

overall corporate performance and outlook; and

 

   

NEO current outstanding equity, including the current and potential value of outstanding unvested awards.

 

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The following table sets forth the compensation committee approved long-term incentive grant value for the combined stock options and RSUs grants, as well as the number of shares of common stock issuable upon exercise of the stock options and upon vesting of the RSUs granted to our NEOs in 2020:

 

NEO

   Compensation
Committee
Approved
Fair Value (1)
     Number of
Stock
Options
     Number of
RSUs
 

Robert Bazemore (2)

   $ 4,500,000        252,956        52,595  

Paolo Tombesi

   $ 1,000,000        56,213        11,688  

Matthew Ros

   $ 1,000,000        56,213        11,688  

Shefali Agarwal

   $ 1,100,000        61,834        12,856  

Jeffery Kutok (3)

     —          —          —    

 

(1)

These figures may be different than those reported in the Summary Compensation Table and other required tabular disclosures due to the process of converting a fair value to a number of stock options or RSUs and associated rounding.

(2)

In addition and as more fully described below, in March 2020, certain historical equity awards granted to Mr. Bazemore in excess of the annual per participant limit under our 2013 Stock Incentive Plan were rescinded, and new awards were issued to replace the fair value of the rescinded awards and to provide Mr. Bazemore the equity incentive compensation that the compensation committee had originally intended with the rescinded awards. The new awards are not reflected in this table.

(3)

Dr. Kutok was hired in April 2020 and was not part of the January 2020 long-term incentive award review and approval process for NEOs. The compensation committee granted Dr. Kutok a new hire long-term incentive award of stock options to purchase 131,580 shares of common stock and 27,412 RSUs, each with a standard time-based vesting schedule. The approximate value of these stock option and RSU awards was $1,500,000, as calculated using the same methodology that we use to calculate the value of stock awards for purposes of our financial statements.

The compensation committee also awarded performance-based RSUs to eligible NEOs in 2019. The following table sets forth the number of awards outstanding, earned, and forfeited for each NEO in 2020. The awards earned in 2020 for select NEOs were earned as a result of achieving three of the performance milestones, worth a combined 75% vesting of the overall grant, which vested upon:

 

   

receipt of acknowledgement from the FDA that our supplemental New Drug Application, or sNDA, for FL had been accepted for filing; and ES launch readiness (25% of total award);

 

   

receipt of approval from the FDA for our ES NDA; and fulfillment of the scientific criteria associated with a second milestone per our collaboration agreement with Boehringer Ingelheim (20% of total award); and

 

   

receipt of approval from the FDA of our sNDA for TAZVERIK for FL (30% of total award).

 

NEO

   Number of Performance-based RSUs  
   Outstanding
as of
1/1/2020 (1)
     Earned in
2020
     Outstanding
as of
12/31/2020
 

Robert Bazemore

     26,250        26,250        —    

Paolo Tombesi

     15,000        15,000        —    

Matthew Ros

     15,000        15,000        —    

Shefali Agarwal

     15,000        15,000        —    

 

(1)

Outstanding RSUs as of January 1, 2020 includes impact of Performance-based RSUs cancelled during 2019 as a result of a performance goal that became no longer achievable.

 

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In March 2020 certain historical equity awards granted to Mr. Bazemore in excess of the annual per participant limit under our 2013 Stock Incentive Plan were rescinded, and new awards were granted to replace the fair value of the rescinded awards and to provide Mr. Bazemore the equity incentive compensation that the compensation committee had originally intended with such awards. The rescinded awards included stock options to purchase 79,167 shares of common stock granted to Mr. Bazemore in February 2016, stock options to purchase 2,371 shares of common stock granted to Mr. Bazemore in February 2017, stock options to purchase 48,727 shares of common stock granted to Mr. Bazemore in January 2019, 56,537 RSUs subject to time-based vesting granted to Mr. Bazemore in January 2019, and 17,500 performance-based RSUs granted to Mr. Bazemore in March 2019. The new awards included stock options to purchase 73,409 shares of common stock, 113,393 RSUs subject to time-based vesting and 17,500 performance-based RSUs. In replacing the fair value of the rescinded awards, some of the value associated with in-the-money stock options was replaced with RSUs in order to replace them on an intrinsic value-for-value basis. While the new awards are accounted for in the 2020 summary compensation table, we do not believe that the value associated with them reflects additional compensation in 2020 as they are intended to make up for historical awards that were granted in prior years and subsequently rescinded.

Severance and Change of Control Benefits

Each NEO is also eligible for severance benefits in specified circumstances, as set forth in our Executive Severance and Change in Control Plan, as amended. Under the terms of this plan, upon execution and effectiveness of a severance agreement and release of claims, each NEO will be entitled to severance payments if we:

 

   

terminate his or her employment without cause, prior to or more than 12 months following a change in control; or

 

   

terminate his or her employment without cause or he or she terminates employment with us for good reason within 12 months following a change in control.

Additionally, Mr. Bazemore is entitled to severance payments if he terminates his employment with us for good reason prior to or more than 12 months following a change in control. Please refer to “ -Employment, Severance and Change in Control Arrangements” below for a more detailed discussion of severance and change in control benefits for our NEOs.

Benefits

We generally pay relocation expenses for newly-hired NEOs whom we require to relocate as a condition to their employment with us. We also have, and may in the future, pay local housing expenses and travel costs for executives who maintain a primary residence outside of a reasonable daily commuting range to our headquarters prior to such executive’s relocation. We evaluate the competitiveness of our arrangements periodically and have found that our NEO benefits are competitive with our peers. For more information on our employment arrangements, please see “ -Employment, Severance and Change in Control Arrangements.” We believe that these are typical benefits offered by comparable companies to executives who are asked to relocate and that we would be at a competitive disadvantage in trying to attract executives who would need to relocate in order to work for us if we did not offer such assistance.

We maintain a defined contribution employee retirement plan for our employees. Our 401(k) plan is intended to qualify as a tax-qualified plan under Section 401 of the Internal Revenue Code so that contributions to our 401(k) plan, and income earned on such contributions, are not taxable to participants until withdrawn or distributed from the 401(k) plan. Our 401(k) plan provides that each participant may contribute up to 90% of his or her pre-tax compensation, up to a statutory limit, which was $19,500 for 2020. Participants who are at least 50 years old can also make “catch-up” contributions, which in 2020 could be up to an additional $6,500 above the statutory limit. Under our 401(k) plan, each employee is fully vested in his or her deferred salary contributions. Employee contributions are held and invested by the plan’s trustee, subject to participants’ ability to give investment

 

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directions by following certain procedures. During the year ended December 31, 2020, we provided a matching contribution to the 401(k) plan, matching 50% of an employee’s contribution up to a maximum of 3% of the participant’s compensation, with such employer matching contributions vesting over three years with approximately 33% of the balance of unvested employer matching contributions vesting each year. Matching contributions made to each of our NEOs are included in the “Summary Compensation Table-All Other Compensation.”

Our NEOs are eligible to participate in all of our employee benefit plans, including our medical, dental, long-term disability and term life insurance plans, our fitness benefits and 401(k) matching contributions, in each case on the same basis as other employees. We typically do not provide additional perquisites or personal benefits to our NEOs, although on a case-by-case basis we may periodically do so, subject to any required approvals. We do not sponsor any qualified or non-qualified defined benefit plans for any of our employees, including NEOs.

Other

Anti-Hedging and Pledging Policy

Our insider trading policy expressly prohibits all of our employees, including our NEOs, as well as our directors, from engaging in speculative transactions in our stock, including short sales, puts/calls, hedging transactions and margin accounts or pledges.

No Tax Gross-ups

We do not provide for any tax gross-up payments to our NEOs.

Tax and Accounting Considerations

Under Section 162(m) of the Internal Revenue Code of 1986, as amended, a company will generally not be entitled to a tax deduction for individual compensation over $1 million that is paid to certain executive officers. As in effect prior to its recent amendment by the Tax Cuts and Jobs Act of 2017, Section 162(m) provided an exception to the deductibility limitations for performance-based compensation that met certain requirements. While considering the impact of Section 162(m) and awarding certain elements of compensation that, at the time, were intended to qualify as performance-based compensation, the compensation committee did not adopt a policy requiring all compensation to be fully deductible under Section 162(m). As Section 162(m) has been amended, effective for taxable years beginning after December 31, 2017, the “performance-based” compensation exception was eliminated from Section 162(m), except for certain grandfathered arrangements under the transition rules. In light of this amendment, the compensation committee will continue to consider the potential impact of the application of Section 162(m) on compensation for our executive officers and reserves the right to provide compensation to executive officers that may not be tax-deductible, as well as the right to modify compensation that was initially intended to qualify as “performance-based” compensation if it believes that taking any such action is in the best interests of our company and our stockholders.

Compensation Risk Assessment

Our management and the compensation committee review our compensation practices and policies with regard to risk management. We have reviewed our programs and determined that there are no practices or policies that are likely to lead to excessive risk-taking or have a material adverse effect on the Company. Further, we identified the following practices that serve to mitigate risk:

 

   

we provide a balance of fixed and performance-based compensation;

 

   

our short-term incentive plan is based on a number of challenging objectives;

 

   

our long-term incentive grants vest over time, generally four years;

 

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our compensation committee has discretion to reduce bonus awards should the objective formula yield an inappropriate result;

 

   

we have an independent compensation committee;

 

   

we engage with independent compensation advisors;

 

   

we have proper administrative and oversight controls; and

 

   

we have an established compensation committee calendar for governance purposes.

Pay Ratio Disclosure

The following is a reasonable estimate, prepared under applicable SEC rules, of the ratio of the annual total compensation of our chief executive officer to the median of the annual total compensation of our other employees.

As disclosed in our proxy statement last year, to identify our median employee, we used the following methodology:

 

   

We determined our median employee based on our employee population of 189 employees (excluding our chief executive officer) as of December 31, 2019.

 

   

We used a consistently applied compensation measure that included the sum of each employee’s (excluding our chief executive officer) base salary and the grant date fair value of all equity granted in 2019.

 

   

We annualized the base salaries for employees who were employed by us for less than the entire calendar year.

Pursuant to the applicable SEC rules outlining this pay ratio disclosure requirement, the median employee may be identified once every three years unless there has been a change in the Company’s employee population or compensation arrangements that the Company reasonably believes would result in a significant change in the pay ratio disclosure. While we have seen growth in our employee headcount, as hiring has been spread out across all levels of the Company, we do not believe that the changes in our employee population or to the median employee’s compensation arrangements in 2020 would significantly affect our pay ratio disclosure. As a result, the employee representing the median employee this year is the same employee selected for our proxy statement filing last year.

Using this approach, and to update our pay ratio disclosure for this year, we calculated the annual total compensation of our previously identified median employee for 2020 in accordance with the requirements of the Summary Compensation Table.

We determined that the 2020 annual total compensation of our median employee, other than our chief executive officer, for 2020 was $333,249. As disclosed in our Summary Compensation Table appearing on page 42, our chief executive officer’s annual total compensation for 2020 was $8,458,342. Based on the foregoing, our estimate of the ratio of the annual total compensation of our chief executive officer to the median of the annual total compensation of all other employees was approximately 25 to 1.

This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. Because the SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

 

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Supplemental Pay Ratio

As discussed above, in March 2020 certain equity awards granted to our chief executive officer in prior years were rescinded because the grants were in excess of the annual per participant limit under our 2013 Stock Incentive Plan. At the same time, new awards were granted to replace the fair value of the rescinded awards and to provide our chief executive officer the equity incentive compensation that our compensation committee had originally intended with such awards. While the value of these new awards ($2,838,213) is included in our chief executive officer’s annual total compensation for 2020, we do not believe that the value associated with such awards reflects additional compensation to our chief executive officer as the new awards are intended to replace the value of the historical awards that were granted in prior years and subsequently rescinded.

Our compensation committee believes it is helpful in evaluating our chief executive officer’s compensation in 2020 and in evaluating our chief executive officer pay ratio to exclude the value of those new replacement awards. Excluding the value of those awards, our chief executive officer’s adjusted annual total compensation for 2020 would be $5,620,129, and our estimate of the supplemental ratio of the annual adjusted total compensation of our chief executive officer to the median of the annual total compensation of all other employees would be approximately 17 to 1.

This supplemental pay ratio is not a substitute for the pay ratio calculated in accordance with SEC rules. However, we believe this supplemental pay ratio is helpful to our stockholders in fully evaluating the ratio of our chief executive officer’s annual total compensation to that of our median employee.

Compensation Committee Report

The compensation committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with our management. Based on this review and discussion, the compensation committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this proxy statement.

THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF EPIZYME, INC.

David M. Mott, Chairman

Andrew R. Allen, M.D., Ph.D.

Grant Bogle

 

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Summary Compensation Table

The following table presents the compensation awarded to, earned by or paid to each of our named executive officers for the years ended December 31, 2020, 2019 and 2018:

 

Name and Principal Position

  Year     Salary ($)     Bonus
($) (1)
    Restricted
Stock Unit
Awards
($) (2)
    Option
Awards
($) (2)
    Non-equity
incentive
plan
compensation
($) (3)
    All Other
Compensation
($) (4)
    Total ($)  

Robert B. Bazemore Jr. (5)

    2020       650,000       —         3,237,620  (6)      4,103,853  (7)      370,500       96,369       8,458,342  

President and Chief Executive Officer

    2019       592,937       —         1,105,393       2,060,531       409,127       5,630       4,173,618  
    2018       575,667       —         —         2,748,939       320,575       5,690       3,650,871  

Paolo Tombesi

    2020       460,000       —         250,006       750,730       174,800       48,198       1,683,734  

Chief Financial Officer (8)

    2019       168,901       —         612,848       1,173,669       76,076       146,971       2,178,465  

Matthew E. Ros

    2020       447,982       —         250,006       750,730       174,800       11,271       1,634,789  

Executive Vice President, Chief Strategy and Business Officer

    2019       432,600       —         538,793       899,137       199,861       11,598       2,081,989  
   
2018
 
   
420,000
 
   
—  
 
   
—  
 
   
1,099,576
 
   
187,100
 
   
12,214
 
   
1,718,890
 

Dr. Shefali Agarwal

    2020       478,000       —         274,990       825,799       199,804       7,154       1,785,747  

Executive Vice President, Chief Medical and Development Officer

    2019       463,500       —         894,607       1,255,325       265,122       8,652       2,887,206  
   
2018
 
   
199,615
 
   
125,000
 
   
—  
 
   
1,472,846
 
   
200,500
 
   
1,648
 
   
1,999,609
 

Jeffery L. Kutok, M.D., Ph.D.

    2020       337,500       85,000       374,996       1,124,996       134,663       6,813       2,063,968  

Chief Scientific Officer (9)

               

 

(1)

The amounts reflect one-time sign-on bonuses paid pursuant to the terms of the respective named executive officer’s employment agreement.

(2)

Except as otherwise expressly noted, the amounts reflect the grant date fair value for equity awards granted during the applicable year. The grant date fair value was computed in accordance with FASB Codification Topic 718, Compensation-Stock Compensation. See note 15 to the financial statements in our annual report on Form 10-K for the year ended December 31, 2020 regarding assumptions we made in determining the fair value of the awards.

(3)

The amounts reflect the annual cash performance bonuses paid, as discussed under “Compensation Discussion and Analysis-Compensation Elements and Decisions-Short-term Incentives.”

(4)

All other compensation includes the following for the year ended December 31, 2020:

 

Name

   Gym
($)
     Relocation
Expenses
($)
    401(k)
Employer
Match
($)
     Transportation
Benefits
($)
    Short-term
and
Long-term
Life
Insurance
Disability
Premiums
($)
     Total
($)
 

Robert B. Bazemore

     —          —         —          94,829     1,540        96,369  

Paolo Tombesi

     208        36,400 **      8,550        1,500       1,540        48,198  

Matthew Ros

     —          —         8,231        1,500       1,540        11,271  

Shefali Agarwal

     —          —         2,990        2,624       1,540        7,154  

Jeffery Kutok

     —          —         5,630        —         1,183        6,813  

 

*

In 2020 we reimbursed Mr. Bazemore for $93,329 in private air travel authorized by our board of directors due to the health and safety risks and uncertainties associated with traveling during the COVID-19 pandemic.

**

In 2020 we paid for temporary corporate housing costs of $36,400 for Mr. Tombesi.

 

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All other compensation includes the following for the year ended December 31, 2019:

 

Name

   Gym
($)
     Relocation
expenses
($)
    401(k)
Employer
Match
($)
     Transportation
Benefits
($)
     Short-term
and

Long-term
Life

Insurance
Disability
Premiums
($)
     Total
($)
 

Robert B. Bazemore

     —          —         —          4,200        1,430        5,630  

Paolo Tombesi

     168        145,178 ***      —          1,400        225        146,971  

Matthew Ros

     —          —         5,968        4,200        1,430        11,598  

Shefali Agarwal

     —          —         —          7,222        1,430        8,652  

Jeffery Kutok

     —          —         —          —          —          —    

 

***

Pursuant to Mr. Tombesi’s employment offer letter, we made a one-time payment to Mr. Tombesi of $100,000 for relocation expenses and we paid for temporary corporate housing for Mr. Tombesi, which temporary corporate housing costs were $45,178 for 2019.

All other compensation includes the following for the year ended December 31, 2018:

 

Name

   Gym
($)
     401(k)
Employer
Match
($)
     Transportation
Benefits
($)
     Short-term
and

Long-term
Life

Insurance
Disability
Premiums
($)
     Total
($)
 

Robert B. Bazemore

     360        —          3,900        1,430        5,690  

Paolo Tombesi

     —          —          —          —          —    

Matthew Ros

     —          6,884        3,900        1,430        12,214  

Shefali Agarwal

     —          —          1,052        596        1,648  

Jeffery Kutok

     —          —          —          —          —    

 

(5)

In March 2020, options to purchase 79,167 shares of our common stock granted to Mr. Bazemore in February 2016, options to purchase 2,371 shares of our common stock granted to Mr. Bazemore in February 2017, options to purchase 48,727 shares of our common stock granted to Mr. Bazemore in January 2019, 56,537 restricted stock units with time-based vesting granted to Mr. Bazemore in January 2019, and 17,500 performance-based restricted stock units granted to Mr. Bazemore in March 2019, each granted in excess of the annual per participant limit under our 2013 Stock Incentive Plan, were rescinded, as discussed under “Compensation Discussion and Analysis—Long-term Incentives.” For purposes of the compensation described in this table, the value of the options and restricted stock units that were granted to Mr. Bazemore in 2019 and rescinded in 2020 is reflected in Mr. Bazemore’s compensation for 2019 and the value of the replacement grants for such rescinded awards is reflected in Mr. Bazemore’s compensation for 2020.

(6)

In addition to 52,595 restricted stock units with a grant date fair value of $1,125,007 that were granted on February 3, 2020, this amount includes (i) 113,393 restricted stock units subject to time-based vesting and (ii) 17,500 restricted stock unites subject to performance-based vesting, with an aggregate grant date fair value of $2,112,613 that were granted on March 24, 2020 to replace the fair value of the rescinded equity awards described in footnote (5). Refer to the “Compensation Discussion and Analysis—Long-term Incentives” section in this proxy statement for additional details regarding these replacement grants.

(7)

In addition to options to purchase 252,956 shares of our common stock with a grant date fair value of $3,378,253 that were granted on February 3, 2020, this amount includes options to purchase 73,409 shares of our common stock with a grant date fair value of $725,600 that were granted on March 24, 2020 to replace the fair value of the rescinded equity awards described in footnote (5). Refer to the “Compensation

 

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  Discussion and Analysis—Long-term Incentives” section in this proxy statement for additional details regarding these replacement grants.
(8)

Mr. Tombesi commenced employment in August 2019.

(9)

Dr. Kutok commenced employment in April 2020 and was not part of the January 2020 merit increase process.

Grants of Plan-Based Awards Table

The following table sets forth information concerning each grant of an award made to our named executive officer during the fiscal year ended December 31, 2020 under any plan, contract, authorization or arrangement pursuant to which cash, securities, similar instruments or other property may be received:

 

Name

   Grant
Date
     Estimated
Future

Payouts
under

Equity
Incentive

Plan
Awards (1)

Target (#)
     All other
stock

awards:
Number
of Shares
of

Stock or
Units (#)
     All other
option

awards:
Number of
securities

underlying
options (#)
     Exercise or
base price
of option
awards
($)
     Grant date
fair

value of
stock

and option
awards
($) (2)
 

Robert B. Bazemore (3)(4)

     2/3/2020              252,956        21.39        3,378,253  
     2/3/2020           52,595              1,125,007  
     3/24/2020              73,409        16.14        725,600  
     3/24/2020           113,393              1,830,163  
     3/24/2020        17,500                 282,450  

Paolo Tombesi (3)

     2/3/2020              56,213        21.39        750,730  
     2/3/2020           11,688              250,006  

Matthew Ros (3)

     2/3/2020              56,213        21.39        750,730  
     2/3/2020           11,688              250,006  

Shefali Agarwal (3)

     2/3/2020              61,834        21.39        825,799  
     2/3/2020           12,856              274,990  

Jeffery Kutok (3)(5)

     4/1/2020              131,580        13.68        1,124,996  
     4/1/2020           27,412              374,996  

 

(1)

The amounts reflect the target payouts under the restricted stock units granted under our 2013 Stock Incentive Plan that vest upon achievement of specified performance targets.

(2)

The amounts reflect the grant date fair value for awards granted during the applicable year. The grant date fair value was computed in accordance with FASB Codification Topic 718, Compensation-Stock Compensation. See note 15 to the financial statements in our annual report on Form 10-K for the year ended December 31, 2020 regarding assumptions we made in determining the fair value of option awards.

(3)

For information on vesting acceleration upon termination of employment, see the “—Employment, Severance and Change in Control Arrangements” section below.

(4)

In March 2020, options to purchase 79,167 shares of common stock granted to Mr. Bazemore in February 2016, options to purchase 2,371 shares of common stock granted to Mr. Bazemore in February 2017, options to purchase 48,727 shares of common stock granted to Mr. Bazemore in January 2019, 56,537 restricted stock units subject to time-based vesting granted to Mr. Bazemore in January 2019, and 17,500 performance-based restricted stock units granted to Mr. Bazemore in March 2019 were rescinded. In connection with such rescission, in March 2020 we granted to Mr. Bazemore stock options to purchase 73,409 shares of common stock, 113,393 restricted stock units subject to time-based vesting and 17,500 restricted stock units subject to performance-based vesting. Refer to the “Compensation Discussion and Analysis—Long-term Incentives” section in this proxy statement for additional details regarding these replacement grants.

(5)

Dr. Kutok was granted restricted stock unit awards and options in April 2020 as part of his employment offer letter with the Company.

 

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Outstanding Equity Awards at 2020 Fiscal Year End Table

The following table presents information regarding all outstanding stock options held by each of our named executive officers on December 31, 2020:

 

                Option Awards     Stock Awards  

Name

  Grant
Date
    Notes     Number of
Securities

Underlying
Unexercised
Options
Exercisable
(#)
    Number of
Securities

Underlying
Unexercisable
Options

(#)
    Option
Exercise
Price
($)
    Option
Expiration
Date
    Number of
Shares of
Stock
or Units

That
Have Not
Vested (#)
    Market
Value of
Shares or

Units of
Stock

That Have
Not Vested
($)
 

Robert B. Bazemore (19)

    8/5/2015       (1     300,000       —         22.29       8/4/2025      
    2/8/2016       (2     323,333       —         8.98       2/7/2026      
    2/8/2017       (3     319,575       13,758       12.45       2/7/2027      
    2/9/2018       (4     188,317       77,543       16.00       2/8/2028      
    1/24/2019       (5     153,203       145,534       9.12       1/23/2029      
    2/3/2020       (6     —         252,956       21.39       2/2/2030      
    2/3/2020       (7             52,595       571,182  
    3/24/2020       (8     44,047       29,362       16.14       3/23/2030      
    3/24/2020       (9             113,393       1,231,448  

Paolo Tombesi

    8/19/2019       (10     44,075       88,150       13.86       8/18/2029      
    8/19/2019       (11             21,162       229,819  
    2/3/2020       (6     —         56,213       21.39       2/2/2030      
    2/3/2020       (7             11,688       126,932  

Matthew Ros

    5/16/2016       (12     32,523       —         9.58       5/15/2026      
    2/8/2017       (3     102,999       4,578       12.45       2/7/2027      
    2/9/2018       (4     75,327       31,017       16.00       2/8/2028      
    1/24/2019       (5     31,588       78,969       9.12       1/23/2029      
    1/24/2019       (13             24,670       267,916  
    2/3/2020       (6     —         56,213       21.39       2/2/2030      
    2/3/2020       (7             11,688       126,932  

Shefali Agarwal

    7/23/2018       (14     102,708       67,292       13.35       7/22/2028      
    1/24/2019       (5     72,651       78,969       9.12       1/23/2029      
    1/24/2019       (13             24,670       267,916  
    12/2/2019       (15     8,745       26,233       15.76       12/1/2029      
    12/2/2019       (16             16,932       183,882  
    2/3/2020       (6     —         61,834       21.39       2/2/2030      
    2/3/2020       (7             12,856       139,616  

Jeffery Kutok

    4/1/2020       (17     —         131,580       13.68       3/31/2030      
    4/1/2020       (18             27,412       297,694  

 

(1)

The shares under this option vested as to 25% of the unvested shares on August 5, 2016, with the remainder vesting in approximately equal monthly installments through August 5, 2019.

(2)

The shares under this option vested as to 25% of the unvested shares on February 8, 2017, with the remainder vesting in approximately equal monthly installments through February 8, 2020.

(3)

The shares under this option vested as to 25% of the unvested shares on February 8, 2018, with the remainder vesting in approximately equal monthly installments through February 8, 2021.

(4)

The shares under this option vested as to 25% of the unvested shares on February 9, 2019, with the remainder vesting in approximately equal monthly installments through February 9, 2022.

(5)

The shares under this option vested as to 25% of the unvested shares on January 24, 2020, with the remainder vesting in approximately equal monthly installments through January 24, 2023.

 

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(6)

The shares under this option vested as to 25% of the unvested shares on February 3, 2021, with the remainder vesting in approximately equal monthly installments through February 3, 2024.

(7)

The shares under this restricted stock unit award vest 25% annually over four years through February 3, 2024.

(8)

The shares under this option vested as to 44,047 shares on March 24, 2020, vest with respect to 1,829 shares on February 8, 2021, and vest with respect to 27,533 shares over seven months starting on June 24, 2022 through December 24, 2022.

(9)

56,537 of the shares under this restricted stock unit award vest in three equal annual installments on January 24, 2021, January 24, 2022 and January 24, 2023. 56,856 of the shares under this restricted stock unit award vest annually over two years in substantially equal annual installments on March 24, 2021 and March 24, 2022.

(10)

The shares under this option vested as to 25% of the unvested shares on August 19, 2020, with the remainder vesting in approximately equal monthly installments through August 19, 2023.

(11)

The shares under this restricted stock unit award vest 25% annually over four years through August 19, 2023.

(12)

The shares under this option vested as to 25% of the unvested shares on May 16, 2017, with the remainder vesting in approximately equal monthly installments through May 16, 2020.

(13)

The shares under this restricted stock unit award vest 25% annually over four years through January 24, 2023.

(14)

The shares under this option vested as to 25% of the unvested shares on July 23, 2019, with the remainder vesting in approximately equal monthly installments through July 23, 2022.

(15)

The shares under this option vested as to 25% of the unvested shares on December 2, 2020, with the remainder vesting in approximately equal monthly installments through December 2, 2023.

(16)

The shares under this restricted stock unit award vest 25% annually over four years through December 2, 2023.

(17)

The shares under this option vested as to 25% of the unvested shares on April 1, 2021, with the remainder vesting in approximately equal monthly installments through April 1, 2024.

(18)

The shares under this restricted stock unit award vest 25% annually over four years through April 1, 2024.

(19)

In March 2020, options to purchase 79,167 shares of our common stock granted to Mr. Bazemore in February 2016, options to purchase 2,371 shares of our common stock granted to Mr. Bazemore in February 2017, options to purchase 48,727 shares of our common stock granted to Mr. Bazemore in January 2019, 56,537 restricted stock units with time-based vesting granted to Mr. Bazemore in January 2019, and 17,500 performance-based restricted stock units granted to Mr. Bazemore in March 2019, each granted in excess of the annual per participant limit under our 2013 Stock Incentive Plan, were rescinded, and replacement awards were granted, as discussed under “Compensation Discussion and Analysis—Long-term Incentives.” The equity awards described in this table are presented after giving effect to the March 2020 rescission and replacement grants.

 

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Option Exercises and Stock Vested

The following table sets forth information concerning option exercises and stock vested for each of our named executive officers during the fiscal year ended December 31, 2020:

 

     Option Awards      Stock Awards  
     Number of
Shares

Acquired on
Exercise
(#)
     Value
Realized

on Exercise
($) (1)
     Number of
Shares

Acquired on
Vesting
(#)
    Value
Realized on
Vesting

($) (2)
 

Robert B. Bazemore

     10,000        130,200        45,096  (3)      655,950  

Paolo Tombesi

     —          —          20,357  (3)      386,455  

Matthew Ros

     112,003        1,317,774        20,829  (3)      382,378  

Shefali Agarwal

     —          —          28,869  (3)      481,498  

Jeffery Kutok

     —          —          —         —    

 

(1)

Value realized on exercise of stock option awards does not represent proceeds from any sale of any common stock acquired upon exercise, but is determined by multiplying the number of shares acquired upon exercise by the difference between the per share exercise price of the option and the closing price of a share of our common stock on the Nasdaq Global Select Market on the date of exercise.

(2)

The value realized on vesting is based on the closing market price per share of our common stock on the Nasdaq Global Select Market on the vesting date, or if the Nasdaq Global Select Market was not open on such vesting date the next trading date, multiplied by the number of shares of stock that vested.

(3)

Includes restricted stock units that vested on January 23, 2020, March 24, 2020, and June 25, 2020 upon achievement of pre-specified performance milestones.

Employment, Severance and Change in Control Arrangements

Robert Bazemore. We entered into an employment offer letter with Mr. Bazemore, our president and chief executive officer, on August 5, 2015. The employment offer letter established the terms of his employment with us, including his title, salary, bonus and eligibility for benefits. Pursuant to the employment offer letter, on August 5, 2015, the Company granted to Mr. Bazemore stock options to purchase 300,000 shares of common stock of the Company. This award is subject to time-based vesting. The employment offer letter also provides that Mr. Bazemore may be eligible for additional equity award grants from time to time.

Paolo Tombesi. We entered into an employment offer letter with Mr. Tombesi, our chief financial officer, on July 19, 2019. The employment offer letter established the terms of his employment with us, including his title, salary, bonus and eligibility for benefits. Pursuant to the employment offer letter, on August 19, 2019, the Company granted to Mr. Tombesi stock options to purchase 132,225 shares of common stock of the Company and an award of 28,217 shares of restricted stock units. These awards are subject to time-based vesting. The Company also granted to Mr. Tombesi 16,000 restricted stock units that vest upon achievement of certain performance milestones, and a cash relocation payment of $100,000. The employment offer letter also provides that Mr. Tombesi may be eligible for additional equity award grants from time to time.

Matthew Ros. We entered into an employment offer letter with Mr. Ros, our executive vice president, chief strategy and business officer, on April 15, 2016. The employment offer letter established the terms of his employment with us, including his title, salary, bonus and eligibility for benefits. Pursuant to the employment offer letter, on April 15, 2016, the Company granted to Mr. Ros stock options to purchase 173,438 shares of common stock of the Company. This award is subject to time-based vesting. The employment offer letter also provides that Mr. Ros may be eligible for additional equity award grants from time to time.

Shefali Agarwal. We entered into an employment offer letter with Dr. Agarwal, our executive vice president, chief medical and development officer, on June 18, 2018. The employment offer letter established the terms of

 

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her employment with us, including his title, salary, bonus and eligibility for benefits. Pursuant to the employment offer letter, on June 18, 2018, the Company granted to Dr. Agarwal stock options to purchase 170,000 shares of common stock of the Company. This award was subject to time-based vesting. The employment offer letter also provides that Dr. Agarwal may be eligible for additional equity award grants from time to time.

Jeffery Kutok. We entered into an employment offer letter with Dr. Kutok, our chief scientific officer, on February 21, 2020. The employment offer letter established the terms of his employment with us, including his title, salary, bonus and eligibility for benefits. Pursuant to the employment offer letter, on April 1, 2020, the Company granted to Dr. Kutok stock options to purchase 131,580 shares of common stock of the Company and an award of 27,412 shares of restricted stock units. These awards are subject to time-based vesting. The Company also provided Dr. Kutok with a one-time cash sign-on bonus of $85,000. The employment offer letter also provides that Dr. Kutok may be eligible for additional equity award grants from time to time.

Each of our named executive officers is employed at-will.

Each named executive officer has entered into a non-competition and non-solicitation agreement, which will prohibit him or her from competing with us and soliciting or hiring our employees for a period of one year following the end of his or her employment with us.

Each named executive officer is also eligible for severance benefits in specified circumstances, as set forth in our Executive Severance and Change in Control Plan, as amended. Under the terms of this plan, upon execution and effectiveness of a severance agreement and release of claims, each named executive officer will be entitled to severance payments if we:

 

   

terminate his or her employment without cause, prior to or more than 12 months following a change in control; or

 

   

terminate his or her employment without cause or he terminates employment with us for good reason within 12 months following a change in control.

Additionally, Mr. Bazemore is entitled to severance payments if he terminates his employment with us for good reason prior to or more than 12 months following a change in control.

The following definitions have been adopted in our Executive Severance and Change in Control Plan under which our named executive officers participate:

 

   

“cause” means (I) with respect to a termination prior to or more than 12 months following a change in control, any of: (a) the executive’s conviction of, or plea of guilty or nolo contendere to, any crime involving dishonesty or moral turpitude or any felony; or (b) a good faith finding by us that the executive has (i) engaged in dishonesty, willful misconduct or gross negligence, (ii) breached or threatened to breach the terms of any restrictive covenants or confidentiality agreement or any similar agreement with us, (iii) violated company policies or procedures, or (iv) failed to perform his assigned duties to our satisfaction, following notice of such failure by us and a period of 15 days to cure and (II) with respect to a termination upon or during the 12-month period following a change in control, (i) the executive’s conviction of, or plea of guilty or nolo contendere to, any felony; (ii) the willful and continued failure by the executive (other than any such failure resulting from the executive’s incapacity due to physical or mental illness) to perform substantially the duties and responsibilities of the executive position after a written demand for substantial performance (providing a period of 15 days to cure) is delivered to the executive by the Company; (iii) the material breach by the executive of the terms of any restrictive covenants or confidentiality agreement with the Company; or (iv) the willful engaging by the executive in fraud or dishonesty which is demonstrably and materially injurious to the Company or its reputation, monetarily or otherwise. No act, or failure to act, on the executive’s part shall be deemed “willful” unless committed or omitted by the executive in bad faith and without reasonable belief that the executive’s act or failure to act was in, or not opposed to, the best interest of the Company.

 

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“good reason” means the occurrence, without the executive’s prior written consent, of any of the following events: (i) a material reduction in the executive’s authority, duties, or responsibilities; (ii) the relocation of the principal place at which the executive provides services to us by at least 30 miles and to a location such that his daily commuting distance is increased; or (iii) a material reduction of the executive’s base salary. No resignation will be treated as a resignation for good reason unless (x) the executive has given written notice to us of his intention to terminate his or her employment for good reason, describing the grounds for such action, no later than 90 days after the first occurrence of such circumstances, (y) the executive has provided us with at least 30 days in which to cure the circumstances, and (z) if we are not successful in curing the circumstances, the executive ends his employment within 30 days following the cure period in (y).

 

   

“change in control” means any of the following:

 

  (i)

the acquisition by an individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, referred to as a “Person” of beneficial ownership of any of our capital stock if, after such acquisition, such Person beneficially owns more than 50% of either (x) our then-outstanding shares of common stock or (y) the combined voting power of our then-outstanding securities entitled to vote generally in the election of directors; provided, however, that any acquisition directly from us will not be a change in control, nor will any acquisition by any individual, entity, or group pursuant to specified business combinations;

 

  (ii)

the consummation of a merger, consolidation, reorganization, recapitalization or share exchange involving us or a sale or other disposition of all or substantially all of our assets subject to specified exceptions; or

 

  (iii)

the liquidation or dissolution of our company;

provided that, where required to avoid additional taxation under Section 409A, the event that occurs must also be a “change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation” as defined under applicable regulations.

The following table summarizes the schedule of severance payments our current named executive officers would receive in the event of a qualifying termination.

 

Scenario and Executive Level

   Salary
Continuation
     Bonus      Continuation of
Employer
Portion of
Medical,
Dental and
Vision Benefit
Premiums
     Acceleration of
Unvested
Equity
 

Prior to a Change in Control

           

Robert Bazemore

     12 months        None        12 months        None  

Matthew Ros

     9 months        None        9 months        None  

Shefali Agarwal

     9 months        None        9 months        None  

Paolo Tombesi

     9 months        None        9 months        None  

Jeffery Kutok

     9 months        None        9 months        None  

Following a Change in Control

           

Robert Bazemore

     18 months        150% of target        18 months        100%  

Matthew Ros

     12 months        100% of target        12 months        100%  

Shefali Agarwal

     12 months        100% of target        12 months        100%  

Paolo Tombesi

     12 months        100% of target        12 months        100%  

Jeffery Kutok

     12 months        100% of target        12 months        100%  

 

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Securities Authorized for Issuance Under Equity Compensation Plans

 

     Equity Compensation Plan Information As of
December 31, 2020
 

Plan Category

   (a)
Number of
Securities

to be Issued
Upon

Exercise of
Outstanding
Options,
Warrants
and Rights
    (b)
Weighted-
Average

Exercise
Price of

Outstanding
Options,
Warrants
and Rights
    (c)
Number of
Securities

Remaining
Available for

Future
Issuance
Under

Equity
Compensation

Plans
(Excluding
Securities

Reflected in
Column (a))
 

Equity compensation plans approved by security holders

     10,893,027  (1)      $14.77  (2)     3,619,534  (3)(4) 

Equity compensation plans not approved by security holders

     —         —         —    
  

 

 

   

 

 

   

 

 

 

Total

     10,893,027     $ 14.77       3,619,534  
  

 

 

   

 

 

   

 

 

 

 

(1)

Consists of 6,817 outstanding options to purchase common stock under our 2008 Stock Incentive Plan, or the 2008 Plan; 10,217,577 outstanding options to purchase common stock under the 2013 Plan; and 668,633 restricted stock units under the 2013 Plan.

(2)

As of December 31, 2020, the weighted-average exercise price of outstanding options under the 2008 Plan was $3.41, and the weighted-average exercise price of outstanding options under the 2013 Plan was $14.77.

(3)

As of December 31, 2020, 14,512,561 shares were available for future issuance under our 2013 Plan, which became effective on June 5, 2013. The number of shares of our common stock reserved for issuance under the 2013 Plan will be increased (i) from time to time by the number of shares of our common stock forfeited upon the expiration, cancellation, forfeiture, cash settlement or other termination of awards under the 2008 Plan, and (ii) annually on the first day of each year, by up to the lesser of (x) 2,500,000 shares of our common stock, (y) 5.0% of the number of shares of our common stock outstanding on the first day of the applicable year and (z) an amount determined by our board of directors. On January 1, 2021, 2,500,000 shares of our common stock were added to the 2013 Plan pursuant to this provision, which shares are not reflected in the number of shares available for issuance under the 2013 Plan.

(4)

As of December 31, 2020, 569,900 shares were available for future issuance under our 2013 Employee Stock Purchase Plan, or 2013 ESPP, which became effective on June 5, 2013. The number of shares of our common stock reserved for issuance under the 2013 ESPP will be increased annually on the first day of each year, by up to the lesser of (x) 233,333 shares of our common stock, (y) 1% of the number of shares of our common stock outstanding on the first day of the applicable year and (z) an amount determined by our board of directors. On January 1, 2021, the number of shares of our common stock reserved for issuance under the 2013 ESPP was increased by 233,333 the pursuant to this provision, which shares are not reflected in the number of shares available for issuance under the 2013 ESPP.

 

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PROPOSAL NO. 3

ADVISORY VOTE ON EXECUTIVE COMPENSATION

We are providing our stockholders the opportunity to vote to approve, on an advisory, non-binding basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules. This proposal, which is commonly referred to as “say-on-pay,” is required by the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which added Section 14A to the Exchange Act.

Our executive compensation programs are designed to attract and retain qualified executive talent to support our mission, vision, and business objectives. These programs embody a pay-for-performance philosophy and reward our named executive officers, or NEOs, for the achievement of our near-term and longer-term financial and strategic goals and for driving corporate financial performance and stability. The programs contain elements of cash and equity-based compensation and are designed to align the interests of our executives with those of our stockholders. We believe our compensation policy strikes an appropriate balance between the implementation of responsible, measured compensation practices and the effective provision of incentives for our NEOs to exert their best efforts for our success. At the same time, we believe our program does not encourage excessive risk-taking by management.

The “Executive Compensation” section of this proxy statement beginning on page 24, including “Compensation Discussion and Analysis,” describes in detail our executive compensation programs and the decisions made by our compensation committee and our board of directors with respect to the year ended December 31, 2020.

Our board of directors is asking stockholders to approve a non-binding advisory vote on the following resolution:

RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, the compensation tables and any related material disclosed in this proxy statement, is hereby approved.

As an advisory vote, this proposal is not binding. The outcome of this advisory vote does not overrule any decision by the Company or the board of directors (or any committee thereof), create or imply any change to the fiduciary duties of the Company or the board of directors (or any committee thereof), or create or imply any additional fiduciary duties for the Company or the board of directors (or any committee thereof). However, our compensation committee and board of directors value the opinions expressed by our stockholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for named executive officers.

The board of directors recommends that stockholders vote to approve the compensation of our named executive officers by voting “FOR” Proposal No. 3.

 

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PROPOSAL NO. 4

APPROVAL OF AN AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK

Background

Our authorized capital stock presently consists of 150,000,000 shares of common stock, $0.0001 par value per share (“common stock”), and 5,000,000 shares of preferred stock, $0.0001 par value per share. On April 8, 2021, our board of directors adopted, subject to stockholder approval, a proposed amendment to our Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 150,000,000 to 225,000,000. The number of authorized shares of preferred stock would not be affected by the proposed amendment.

As of March 31, 2021, a total of 101,968,751 shares of common stock were issued and outstanding and no shares were held in treasury. In addition, as of March 31, 2021, there were 1,427,575 restricted stock units outstanding and options outstanding to purchase an aggregate of 12,331,095 shares of common stock under our equity incentive plans and an aggregate of 2,703,950 and 461,105 shares of common stock reserved for future issuance under our 2013 Stock Incentive Plan and 2013 Employee Stock Purchase Plan, respectively. Additionally, an aggregate of (i) 3,378,000 shares of common stock are reserved for issuance upon conversion of our outstanding Series A Convertible Preferred Stock and (ii) 2,500,000 shares of common stock are reserved for issuance upon exercise of the warrant to purchase shares of our common stock held by RPI Finance Trust (see “Transactions with Related Persons”). Accordingly, as of March 31, 2021 out of the 150,000,000 shares of common stock presently authorized, 124,770,476 shares are issued or reserved for issuance and 25,229,524 authorized shares of common stock remain available for future issuance.

If stockholders approve the proposed amendment, the first sentence of Article Fourth of our Restated Certificate of Incorporation will be deleted in its entirety and replaced by the following:

“FOURTH: The total number of shares of all classes of stock which the Corporation shall have the authority to issue is 230,000,000 shares, consisting of (i) 225,000,000 shares of Common Stock, $0.0001 par value per share (“Common Stock”), and (ii) 5,000,000 shares of Preferred Stock, $0.0001 par value per share (“Preferred Stock”).”

The proposed amendment, if approved by our stockholders, would become effective upon the filing of a Certificate of Amendment to our Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, in the form of Appendix A hereto, or at the later time set forth in such amendment. The board of directors reserves the right, notwithstanding stockholder approval and without further action by stockholders, to elect not to proceed with the proposed amendment if the board determines that the proposed amendment is no longer in our best interests and the best interests of our stockholders.

If our stockholders approve the proposed amendment, subject to the discretion of the board of directors, we intend to file such amendment to our Restated Certificate of Incorporation with the Secretary of State of the State of Delaware as soon as practicable after the Annual Meeting.

Reasons for the Proposed Increase

Over the past several years, we have used shares of our common stock to, among other things, engage in financings, incentivize and compensate employees and other service providers and for other general corporate purposes. We anticipate that we may issue additional shares of common stock in the future in connection with one or more of the following:

 

   

financing transactions, such as public or private offerings of common stock or convertible securities;

 

   

partnerships, collaborations and other similar transactions;

 

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our equity incentive plans;

 

   

strategic investments; and

 

   

other corporate purposes that have not yet been identified.

We do not currently have any specific plans, proposals or arrangements, written or oral, to issue any of the proposed additional authorized shares of common stock for general corporate or any other purposes. However, we believe that the availability of additional authorized shares of our common stock will afford us needed flexibility in acting upon financing transactions to strengthen our financial position and/or engaging in strategic activities without using cash. Unless required by applicable law or stock exchange rules, no further vote of the holders of common stock will be required with respect to any such transaction.

Potential Effects of the Proposed Increase

The additional shares of common stock for which authorization is sought would be identical in powers, privileges and rights to the shares of common stock that are now authorized. Holders of common stock do not have preemptive rights to subscribe to additional securities that we may issue.

The issuance of additional shares of common stock may, among other things, have a dilutive effect on earnings per share and on stockholders’ equity and voting rights. Furthermore, future sales of substantial amounts of our common stock, or the perception that these sales might occur, could adversely affect the prevailing market price of our common stock or limit our ability to raise additional capital. Stockholders should recognize that, as a result of this proposal, they will own a smaller percentage of shares relative to the total authorized shares of the company than they presently own.

Effectiveness of Amendment

If the proposed amendment is adopted, it will become effective upon the filing of a Certificate of Amendment to our Restated Certificate of Incorporation with the Secretary of State of the State of Delaware.

Recommendation of the Board of Directors

Our Board of Directors unanimously recommends that the stockholders vote to approve an amendment to our Restated Certificate of Incorporation to increase the number of authorized shares of common stock by voting “FOR” Proposal No. 4.

 

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TRANSACTIONS WITH RELATED PERSONS

Since January 1, 2020, we have engaged in the following transactions in which the amount involved in the transaction exceeds $120,000 and in which any of our directors or executive officers or their immediate family members or beneficial owners of more than 5% of our voting securities had or will have a direct or indirect material interest. We believe that all of these transactions were on terms no less favorable as could have been obtained from unrelated third parties.

Transactions with Entities Affiliated with Pablo Legorreta

Loan Agreement with Pharmakon and affiliates

On November 3, 2020, we entered into an Amended and Restated Loan Agreement with BioPharma Credit PLC, or the Collateral Agent, and BioPharma Credit Investments V (Master) LP and BPCR Limited Partnership (as transferee of BioPharma Credit Investments V (Master) LP’s interest as a lender), or the Lenders, amending and restating the loan agreement dated November 4, 2019. The Amended and Restated Loan Agreement provides for, among other things, an additional secured term loan facility of $150.0 million, or the Tranche D Loan. On November 3, 2020, we also delivered written notice to the Lenders to draw down the Tranche D Loan, and the Tranche D Loan was closed and funded on November 18, 2020.

The interest rate for the Tranche D Loan will be determined by reference to a Eurodollar rate plus 7.75% above such Eurodollar rate. The Eurodollar rate will have a 2.00% floor. The Tranche D Loan will be due in eight equal quarterly principal payments commencing on the 51st month anniversary of the date on which the Lenders funded the Tranche D Loan. All unpaid principal and interest under the Tranche D Loan will be due and payable on the 72nd month anniversary of the date on which the Lenders fund the Tranche D Loan.

The Amended and Restated Loan Agreement also amended the payment period principal and interest for the first three tranches of term loans. Under the original terms, we were required to make interest only payments on the outstanding obligation through February 28, 2023, and thereafter eight quarterly payments of principal and interest. Under the amended and restated terms, we are required to make interest only payments on the $70.0 million outstanding obligation through November 2023, and thereafter four quarterly payments of principal and interest. All unpaid principal and interest on the $70.0 million borrowed under the original Loan Agreement is due and payable in November 2024, the 60th month anniversary of the date on which the Lenders funded the first tranche of term loans. The interest rates for the existing tranches of term loans remain unchanged and will continue to be determined by reference to a Eurodollar rate plus 7.75% above such Eurodollar rate. The Eurodollar rate will have a 2.00% floor.

Under the Amended and Restated Loan Agreement we have the right to request from the Lenders, subject to the Lenders’ agreement to lend additional amounts to the Company, up to an additional $150.0 million, provided that we have not prepaid any outstanding term loans at the time of our request and such request is made before November 18, 2021.

Each of the four term loans may be prepaid before maturity in whole or in part, however there is a $50.0 million minimum prepayment for any prepayment of the term loans. If we prepay any tranche of term loans, in whole or in part, during the first 36 months from the date on which the Lenders funded such tranche of term loans, then we must pay a prepayment premium equal to the greater of (x) a make-whole amount equal to the interest that would have accrued on the principal amount to be prepaid and (y) a premium equal to 0.03 multiplied by the principal amount to be prepaid. If we prepay a tranche of term loan, in whole or in part, between the 36th month and 48th month from the date on which the Lenders funded such tranche of term loans, then we must pay a prepayment premium equal to 0.02 multiplied by the principal amount to be prepaid. If we prepay a tranche of term loans, in whole or in part, between the 48th month and 60th month from the date on which the Lenders funded such tranche of term loans, then we must pay a prepayment premium equal to 0.01 multiplied by the principal amount to be prepaid.

 

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The obligations under the Amended and Restated Loan Agreement, including our payment obligations in respect of the Tranche D Loan, are secured by the first priority security interest in and a lien on substantially all of our assets, subject to certain exceptions, that we granted to the Lenders in connection with the first tranche of term loans under the Loan Agreement.

The Amended and Restated Loan Agreement contains certain customary representations and warranties, affirmative and negative covenants and events of default applicable to us and our subsidiaries. If an event of default occurs and is continuing, the Collateral Agent may, among other things, accelerate the loans and foreclose on the collateral.

Pablo Legorreta, a member of our board of directors, is a co-founder of Pharmakon Advisors, LP, an affiliate of the Collateral Agent and Lenders.

RPI Finance Trust Purchase Agreement

On November 4, 2019, we, entered into a purchase agreement with RPI Finance Trust, an entity affiliated with our director Pablo Legorreta, pursuant to which we agreed to elect Mr. Legorreta to our board of directors. Pursuant to the purchase agreement, we sold to RPI Finance Trust 6,666,667 shares of our common stock, a warrant to purchase up to 2,500,000 shares of our common stock at an exercise price of $20.00 per share, and all of our rights to receive royalties from Eisai Co., Ltd. with respect to net sales by Eisai of tazemetostat products in Japan pursuant to the Amended and Restated Collaboration and License Agreement by and between Eisai and us, dated as of March 12, 2015. In consideration for the sale of the shares of our common stock, the warrant to purchase shares of our common stock and our rights to receive royalties from Eisai Co., Ltd. with respect to net sales by Eisai of tazemetostat products in Japan, RPI paid us $100.0 million upon the closing of the purchase agreement. RPI Finance Trust also granted us the option to sell to RPI Finance Trust $50.0 million of shares of our common stock for an 18-month period beginning November 4, 2019. On February 11, 2020 we sold 2,500,000 shares of our common stock to RPI Finance Trust at a purchase price of $20.00 per share pursuant to such option.

Policies and Procedures for Related Person Transactions

Our board of directors has adopted a written related person transaction policy to set forth policies and procedures for the review and approval or ratification of related person transactions. This policy covers any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we were or are to be a participant, the amount involved exceeds $120,000, and one of our executive officers, directors, director nominees or 5% stockholders, or their immediate family members, each of whom we refer to as 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.

If a related person proposes to enter into such a transaction, arrangement or relationship, which we refer to as a “related person transaction,” the related person must report the proposed related person transaction to our general counsel, or if we do not have a general counsel, our chief financial officer. The policy calls for the proposed related person transaction to be reviewed and, if deemed appropriate, approved by our audit committee. Whenever practicable, the reporting, review and approval will occur prior to entry into the transaction. If advance review and approval is not practicable, the audit committee will review, and, in its discretion, may ratify the related person transaction. The policy also permits the chairman of the audit committee to review and, if deemed appropriate, approve proposed related person transactions that arise between audit committee meetings, subject to ratification by the audit committee at its next meeting. Any related person transactions that are ongoing in nature will be reviewed annually.

 

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A related person transaction reviewed under the policy will be considered approved or ratified if it is authorized by the audit committee after full disclosure of the related person’s interest in the transaction. As appropriate for the circumstances, the audit committee will review and consider:

 

   

the related person’s interest in the related person transaction;

 

   

the approximate dollar value of the amount involved in the related person transaction;

 

   

the approximate dollar value of the amount of the related person’s interest in the transaction without regard to the amount of any profit or loss;

 

   

whether the transaction was undertaken in the ordinary course of our business;

 

   

whether the terms of the transaction are no less favorable to us than terms that could have been reached with an unrelated third party;

 

   

the purpose of, and the potential benefits to us of, the transaction; and

 

   

any other information regarding the related person transaction or the related person in the context of the proposed transaction that would be material to investors in light of the circumstances of the particular transaction.

Our audit committee may approve or ratify the transaction only if it determines that, under all of the circumstances, the transaction is in, or is not inconsistent with, our best interests. Our audit committee may impose any conditions on the related person transaction that it deems appropriate.

In addition to the transactions that are excluded by the instructions to the SEC’s related person transaction disclosure rule, our board of directors has determined that the following transactions do not create a material direct or indirect interest on behalf of related persons and, therefore, are not related person transactions for purposes of this policy:

 

   

interests arising solely from the related person’s position as an executive officer of another entity whether or not the person is also a director of the entity, that is a participant in the transaction, where the related person and all other related persons own in the aggregate less than a 10% equity interest in such entity, the related person and his or her immediate family members are not involved in the negotiation of the terms of the transaction and do not receive any special benefits as a result of the transaction and the amount involved in the transaction is less than the greater of $200,000 or 5% of the annual gross revenues of the company receiving payment under the transaction; and

 

   

a transaction that is specifically contemplated by provisions of our certificate of incorporation or by-laws.

The policy provides that transactions involving compensation of executive officers shall be reviewed and approved by our compensation committee in the manner specified in the compensation committee’s charter.

 

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PRINCIPAL STOCKHOLDERS

The following table sets forth information, to the extent known by us or ascertainable from public filings, with respect to the beneficial ownership of our common stock as of March 31, 2021 by:

 

   

each of our directors;

 

   

each of our named executive officers;

 

   

all of our current directors and executive officers as a group; and

 

   

each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our common stock.

The column entitled “Percentage Beneficially Owned” is based on a total of 101,968,751 shares of our common stock outstanding as of March 31, 2021.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to our common stock. Shares of our common stock subject to options that are currently exercisable or exercisable within 60 days of March 31, 2021 or shares of restricted stock that vest within 60 days of March 31, 2021 are considered outstanding and beneficially owned by the person holding the options or restricted stock units, as applicable, for the purpose of calculating the percentage ownership of that person but not for the purpose of calculating the percentage ownership of any other person. Except as otherwise noted, the persons and entities in this table have sole voting and investing power with respect to all of the shares of our common stock beneficially owned by them, subject to community property laws, where applicable. Except as otherwise indicated in the table below, addresses of named beneficial owners are in care of Epizyme, Inc., 400 Technology Square, 4th Floor, Cambridge, Massachusetts 02139.

 

Name of Beneficial Owner    Number of
Shares
Beneficially
Owned
     Percentage
Beneficially
Owned
 

5% Stockholders:

     

PRIMECAP Management Company (1)

     15,208,527        14.9

RPI Finance Trust (2)

     11,666,667        11.2

Redmile Group, LLC (3)

     10,267,912        9.9

BlackRock, Inc. (4)

     7,911,028        7.8

The Vanguard Group (5)

     7,565,247        7.4

Palo Alto Investors, LLC (6)

     6,783,913        6.6

Directors and Named Executive Officers:

     

David M. Mott (7)

     362,064            

Pablo Legorreta (8)

     11,693,583        11.2

Carl Goldfischer, M.D. (9)

     3,487,429        3.4

Andrew R. Allen, M.D., Ph.D. (10)

     94,145            

Kenneth Bate (11)

     94,145            

Grant Bogle (12)

     29,461            

Kevin Conroy (13)

     80,428            

Victoria Richon, Ph.D. (14)

     35,015            

Michael F. Giordano, M.D. (15)

     50,396            

Robert B. Bazemore (16)

     1,552,639        1.5

Matthew Ros (17)

     321,304            

Shefali Agarwal (18)

     266,204            

Paolo Tombesi (19)

     95,051            

Jeffery Kutok (20)

     42,489            

All current executive officers and directors as a group (15 persons) (21)

     18,314,808        17.5

 

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*

Represents beneficial ownership of less than one percent of our outstanding common stock.

(1)

PRIMECAP Management Company has sole voting and dispositive power over all of its shares of common stock. The information reported is based on a Schedule 13G/A, as filed with the SEC on February 12, 2021. The principal business address of PRIMECAP Management Company is 177 E. Colorado Blvd., 11th Floor, Pasadena, CA 91105.

(2)

RPI Finance Trust has shared voting and dispositive power over all of its shares of common stock. RPI Finance Trust’s beneficial ownership is comprised of 9,166,667 shares of common stock and a warrant to purchase 2,500,000 shares of common stock. The information reported is based on a Schedule 13D/A, as filed with the SEC on February 21, 2020. The principal business address of RPI Finance Trust is 110 E. 59th Street, 33rd Floor, New York, NY 10022.

(3)

Redmile Group, LLC (“Redmile”) has shared voting and dispositive power over all of its shares of common stock. Redmile’s beneficial ownership is comprised of 9,450,305 shares of common stock owned by certain private investment vehicles and/or separately managed accounts managed by Redmile and 817,607 shares of common stock issuable upon conversion of 81,761 shares of Series A Convertible Preferred Stock owned by Redmile. Redmile’s beneficial ownership reported here does not include 2,560,393 shares of common stock issuable upon conversion of 256,039 shares of Series A Convertible Preferred Stock owned by Redmile, as we may not effect any conversion of the Series A Convertible Preferred Stock held by Redmile, and Redmile does not have the right to convert any portion of the Series A Convertible Preferred Stock that it holds, to the extent that, after giving effect to the attempted conversion set forth in a notice of conversion, Redmile, together with its affiliates and any other person whose beneficial ownership of Common Stock would be aggregated with Redmile’s beneficial ownership for purposes of Section 13(d) or Section 16 of the Securities Exchange Act of 1934, as amended, and the applicable regulations of the Securities and Exchange Commission, including any “group” of which Redmile is a member, would beneficially own a number of shares of common stock in excess of the Beneficial Ownership Limitation. The “Beneficial Ownership Limitation” is 9.99% of the shares of common stock then issued and outstanding, which percentage may be changed at Redmile’s election upon 61 days’ notice to us. The information reported is based on a Schedule 13G/A, as filed with the SEC on February 16, 2021. The principal business address of Redmile is One Letterman Dr, Building D, Suite D3-300, The Presidio of San Francisco, CA 94129.

(4)

BlackRock, Inc. has sole dispositive power over 7,911,028 of its shares of common stock and has sole voting power over 7,728,209 shares of common stock. The information reported is based on a Schedule 13G/A, as filed with the SEC on January 29, 2021. BlackRock, Inc.’s principal business address is 55 East 52nd Street, New York, NY 10055.

(5)

The Vanguard Group has sole voting power over zero shares of common stock and shared voting power over 159,280 shares of common stock. The Vanguard Group has sole dispositive power over 7,341,483 shares of common stock and shared dispositive power over 223,764 shares of common stock. The information reported is based on a Schedule 13G, as filed with the SEC on February 10, 2021. The principal business address of The Vanguard Group is 100 Vanguard Blvd. Malvern, PA 19355.

(6)

Palo Alto Investors, LLC (“PAI”) has shared voting and dispositive power over all of its shares of common stock. The information reported is based on a Schedule 13G/A, as filed with the SEC on February 16, 2021. The principal business address of PAI is 470 University Avenue, Palo Alto, CA 94301.

(7)

Consists of 153,627 shares of common stock held by Mr. Mott, 106,959 shares of common stock held by the David Mott Declaration of Trust dated May 31, 2001 as amended (the “Mott Trust”) and 101,478 shares of common stock issuable upon the exercise of options exercisable within 60 days after March 31, 2021. Mr. Mott disclaims beneficial ownership of the shares in the Mott Trust except to the extent of any pecuniary interest therein.

(8)

Consists of 11,666,667 shares of common stock held by RPI Finance Trust as described in note (2) above that have shared voting and dispositive power with Mr. Legorreta and 26,916 shares of common stock issuable upon the exercise of options exercisable within 60 days after March 31, 2021. Mr. Legorreta is the chief executive officer, beneficial owner and sole manager of RP Management, LLC whose principal business is to act as the manager of RPI Finance Trust and investment vehicles that invest in RPI Finance Trust.

(9)

Consists of 5,000 shares of common stock held by Dr. Goldfischer, 3,380,951 shares of common stock held by entities affiliated with Bay City Capital, LLC, including Bay City Capital Fund V, L.P. and Bay City Capital Fund V Co-Investment Fund, L.P., and 101,478 shares of common stock issuable upon the exercise of options exercisable within 60 days after March 31, 2021. Bay City Capital Management V LLC (“GP V”) is the general partner of Bay City Capital Fund V, L.P. and Bay City Capital Fund V Co-Investment Fund, L.P. (collectively,

 

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  “BCC V”). Bay City Capital LLC (“BCC LLC”) is the manager of GP V. Dr. Goldfischer is an investment partner and managing director of BCC LLC and shares voting and dispositive power with respect to shares held by BCC V. Dr. Goldfischer disclaims beneficial ownership of these shares, except to the extent of any pecuniary interest therein.
(10)

Includes 81,645 shares of common stock issuable upon the exercise of options exercisable within 60 days after March 31, 2021.

(11)

Consists of 94,145 shares of common stock issuable upon the exercise of options exercisable within 60 days after March 31, 2021.

(12)

Consists of 29,461 shares of common stock issuable upon the exercise of options exercisable within 60 days after March 31, 2021.

(13)

Includes 69,146 shares of common stock issuable upon the exercise of options exercisable within 60 days after March 31, 2021.

(14)

Includes 29,461 shares of common stock issuable upon the exercise of options exercisable within 60 days after March 31, 2021.

(15)

Consists of 50,396 shares of common stock issuable upon the exercise of options exercisable within 60 days after March 31, 2021.

(16)

Includes 1,479,615 shares of common stock issuable upon the exercise of options exercisable within 60 days after March 31, 2021.

(17)

Includes 291,453 shares of common stock issuable upon the exercise of options exercisable within 60 days after March 31, 2021.

(18)

Includes 233,489 shares of common stock issuable upon the exercise of options exercisable within 60 days after March 31, 2021.

(19)

Includes 75,416 shares of common stock issuable upon the exercise of options exercisable within 60 days after March 31, 2021.

(20)

Consists of 35,636 shares of common stock issuable upon the exercise of options exercisable within 60 days after March 31, 2021 and 6,853 shares of common stock issuable under restricted stock unit awards that vest within 60 days after March 31, 2021.

(21)

Includes 2,793,463 shares of common stock issuable upon the exercise of options exercisable within 60 days after March 31, 2021, 6,853 shares of common stock issuable under restricted stock unit awards that vest within 60 days after March 31, 2021 and 2,500,000 shares of common stock issuable upon RPI Finance Trust’s exercise of its warrant to purchase common stock.

DELINQUENT SECTION 16(A) REPORTS

Section 16(a) of the Exchange Act requires our directors, executive officers, and persons holding more than 10% of our common stock to report their initial ownership of the common stock and other equity securities and any changes in that ownership in reports that must be filed with the SEC. The SEC has designated specific deadlines for these reports, and we must identify in this proxy statement those persons who did not file these reports when due. The Form 3 filed for Ms. Vakiener on September 28, 2020 inadvertently misreported the number of restricted stock units beneficially owned by Ms. Vakiener by 1,714 shares, which restricted stock units were reported on an amended Form 3 filed on January 27, 2021. The amounts of restricted stock units granted to Mr. Tombesi, Ms. Agarwal, Mr. Ros and our Corporate Controller, Joseph Beaulieu, on March 24, 2020 were inadvertently misreported and corrected by filing of Forms 4/A on June 30, 2020. Common stock acquired by Mr. Bazemore, Ms. Agarwal, Mr. Beaulieu, Mr. Ros and Mr. Tombesi under our 2013 Employee Stock Purchase Plan was inadvertently excluded from the beneficial ownership reported for such executive officers, which shares of common stock are now reflected in reports required to be filed pursuant to Section 16(a) under the Exchange Act.

Other than with respect to such reports, based solely on a review of reports furnished to us, or written representations from reporting persons, we believe all directors, executive officers, and 10% owners timely filed all reports regarding transactions in our securities required to be filed for 2020 by Section 16(a) under the Exchange Act.

 

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REPORT OF THE AUDIT COMMITTEE

The audit committee is appointed by the board of directors to assist the board of directors in fulfilling its oversight responsibilities with respect to (1) the integrity of Epizyme’s financial statements and financial reporting process and systems of internal controls regarding finance, accounting, and compliance with legal and regulatory requirements, (2) the qualifications, independence, and performance of Epizyme’s independent registered public accounting firm, (3) the performance of Epizyme’s internal audit function, if any, and (4) other matters as set forth in the charter of the audit committee approved by the board of directors.

Management is responsible for the preparation of Epizyme’s financial statements and the financial reporting process, including its system of internal control over financial reporting and its disclosure controls and procedures. The independent registered public accounting firm is responsible for performing an audit of Epizyme’s financial statements in accordance with the standards of the Public Company Accounting Oversight Board, or PCAOB, and issuing a report thereon. The audit committee’s responsibility is to monitor and oversee these processes.

In connection with these responsibilities, the audit committee reviewed and discussed with management and the independent registered public accounting firm the audited consolidated financial statements of Epizyme for the fiscal year ended December 31, 2020. The audit committee also discussed with the independent registered public accounting firm the matters required to be discussed by the AS No. 1301, Communications with Audit Committees. In addition, the audit committee received written communications from the independent registered public accounting firm confirming their independence as required by the applicable requirements of the PCAOB and has discussed with the independent registered public accounting firm their independence.

Based on the reviews and discussions referred to above, the audit committee recommended to the board of directors that the audited consolidated financial statements of Epizyme be included in Epizyme’s annual report on Form 10-K for the fiscal year ended December 31, 2020, which was filed with the SEC.

THE AUDIT COMMITTEE OF THE

BOARD OF

DIRECTORS OF EPIZYME, INC.

Carl Goldfischer, M.D., Chairman

Kenneth Bate

Kevin T. Conroy

April 29, 2021

HOUSEHOLDING

Some banks, brokers and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of our documents, including the Notice of Internet Availability of Proxy Materials or, if requested, the 2020 Annual Report and proxy statement, may have been sent to multiple stockholders in your household. We will promptly deliver a separate copy of any of the above documents to you upon written or oral request to Epizyme, Inc., 400 Technology Square, 4th Floor, Cambridge, Massachusetts 02139, Attention: Investor Relations, telephone: 617-229-5872. If you want to receive separate copies of the Notice of Internet Availability of Proxy Materials, proxy statement or annual report to stockholders in the future, or if you are receiving multiple copies and would like to receive only one copy per household, you should contact your bank, broker or other nominee record holder, or you may contact us at the above address and phone number.

 

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STOCKHOLDER PROPOSALS

A stockholder who would like to have a proposal considered for inclusion in our 2022 proxy statement must submit the proposal in accordance with the procedures outlined in Rule 14a-8 of the Exchange Act so that it is received by us no later than December 30, 2021. However, if the date of the 2022 annual meeting of stockholders is changed by more than 30 days from the date of the previous year’s meeting, then the deadline is a reasonable time before we begin to print and send our proxy statement for the 2022 annual meeting of stockholders. SEC rules set standards for eligibility and specify the types of stockholder proposals that may be excluded from a proxy statement. Stockholder proposals should be addressed to Epizyme, Inc., 400 Technology Square, 4th Floor, Cambridge, Massachusetts 02139, Attention: IR.

If a stockholder wishes to propose a nomination of persons for election to our board of directors or present a proposal at an annual meeting but does not wish to have the proposal considered for inclusion in our proxy statement and proxy card, our amended and restated by-laws establish an advance notice procedure for such nominations and proposals. Stockholders at an annual meeting may only consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of the board of directors or by a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has delivered timely notice in proper form to our corporate Secretary of the stockholder’s intention to bring such business before the meeting.

The required notice must be in writing and received by our corporate Secretary at our principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting. However, in the event that the date of the annual meeting is advanced by more than 20 days, or delayed by more than 60 days, from the first anniversary of the preceding year’s annual meeting, a stockholder’s notice must be so received no earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of (A) the 90th day prior to such annual meeting and (B) the tenth day following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs. For stockholder proposals to be brought before the 2022 annual meeting of stockholders, the required notice must be received by our corporate Secretary at our principal executive offices no earlier than February 11, 2022 and no later than March 13, 2022.

OTHER MATTERS

Our board of directors does not know of any other matters to be brought before the Annual Meeting. If any other matters not mentioned in this proxy statement are properly brought before the meeting, the individuals named in the proxy intend to use their discretionary voting authority under the proxy to vote the proxy in accordance with their best judgment on those matters.

By Order of the Board of Directors

/s/ Robert Bazemore
Robert Bazemore
President and Chief Executive Officer

 

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Appendix A

CERTIFICATE OF AMENDMENT OF

RESTATED CERTIFICATE OF INCORPORATION

OF

EPIZYME, INC.

(Pursuant to Section 242 of the

General Corporation Law of the State of Delaware)

Epizyme, Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware, does hereby certify as follows:

A resolution was duly adopted by the Board of Directors of the Corporation pursuant to Section 242 of the General Corporation Law of the State of Delaware setting forth a proposed Amendment to the Restated Certificate of Incorporation of the Corporation and declaring said amendment to be advisable. The stockholders of the Corporation duly approved said proposed amendment in accordance with Section 242 of the General Corporation Law of the State of Delaware. The resolution setting forth the amendment is as follows:

 

RESOLVED:    That the first sentence of Article FOURTH of the Restated Certificate of Incorporation of the Corporation be and hereby is deleted in its entirety and the following is inserted in lieu thereof:

“FOURTH: The total number of shares of all classes of stock which the Corporation shall have the authority to issue is 230,000,000 shares, consisting of (i) 225,000,000 shares of Common Stock, $0.0001 par value per share (“Common Stock”), and (ii) 5,000,000 shares of Preferred Stock, $0.0001 par value per share (“Preferred Stock”).”

***

IN WITNESS WHEREOF, this Certificate of Amendment has been executed by a duly authorized officer of the Corporation on this                  day of                 , 2021.

 

EPIZYME, INC.
By:    
Name:   Robert B. Bazemore
Title:   Chief Executive Officer

 

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Proposals — The Board of Directors recommend a vote FOR all the nominees listed, and FOR Proposals 2, 3 and 4.

 

 

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3. Approval on an advisory (non-binding) basis, of the compensation of our named executive officers.

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4. Approval of an amendment to our Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 150,000,000 to 225,000,000.

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2021 Annual Meeting

of Stockholders of Epizyme, Inc.

The 2021 Annual Meeting of Stockholders of Epizyme, Inc. will be held on Friday, June 11, 2021, at 10:00 am Eastern Time exclusively by virtual meeting via the internet at www.meetingcenter.io/209067253

To access the virtual meeting, you must have the information that is printed in the shaded bar located on the reverse side of this form.

The password for this meeting is — EPZM2021

Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Stockholders.

The material is available at: www.edocumentview.com/EPZM

 

 

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  Proxy — Epizyme, Inc.        LOGO

Notice of 2021 Annual Meeting of Stockholders

Proxy Solicited by Board of Directors for Annual Meeting — June 11, 2021

Robert B. Bazemore, Jr. and Paolo Tombesi (the Proxies), or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of Epizyme, Inc. to be held on June 11, 2021 or at any postponement or adjournment thereof.

This proxy, when properly executed, will be voted as directed. If no direction is given, the Proxies will have authority to vote FOR Proposal 1 “Election of three Class II Directors, each for a three-year term ending at the annual meeting of stockholders to be held in 2024”, FOR Proposal 2 “Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021”, FOR Proposal 3 “Approval on an advisory (non-binding) basis, of the compensation of our named executive officers” and FOR Proposal 4 “Approval of an amendment to our Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 150,000,000 to 225,000,000”. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting.

Attendance of the undersigned at the Annual Meeting or at any postponement or adjournment thereof will not be deemed to revoke this proxy unless the undersigned revokes this proxy in writing or votes online during the virtual annual meeting. Unless voting by the Internet or telephone, please complete, sign and date this proxy card and return it in the enclosed postage-prepaid envelope.

(Items to be voted appear on reverse side)

 

  C    

 

Non-Voting Items

 

 

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Comments — Please print your comments below.

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