UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

 

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

Check the appropriate box:

 

 

CRISPR THERAPEUTICS AG

(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):

 

 

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CRISPR THERAPEUTICS AG

Baarerstrasse 14

6300 Zug

Switzerland

+41 (0) 41 561 32 77

NOTICE OF INVITATION TO 2021 ANNUAL GENERAL MEETING OF SHAREHOLDERS

To Be Held On June 10, 2021

 

 

Dear Shareholders:

You are cordially invited to the 2021 annual general meeting of shareholders, or the 2021 Annual General Meeting of CRISPR Therapeutics AG, or the Company, to be held on June 10, 2021 at 8:00 a.m. Central European Summer Time (2:00 a.m. Eastern Daylight Time) at the offices of Walder Wyss Ltd., Seefeldstrasse 123, 8008 Zurich, Switzerland. At the 2021 Annual General Meeting, the Company’s board of directors, or the Board of Directors, will ask the Company’s shareholders to consider and vote on the following matters:

The Board of Directors proposes to approve the annual report, the consolidated financial statements and the statutory financial statements of the Company for the year ended December 31, 2020 and to take note of the reports of the auditors. Copies of these documents are available for download at www.proxydocs.com/CRSP.

The Board of Directors proposes to carry forward the net loss resulting from the appropriation of financial results as follows:

 

 

 

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The Board of Directors proposes that the members of the Board of Directors and the Executive Committee of the Company be discharged from personal liability for the business year ended December 31, 2020.

The Board of Directors proposes that Rodger Novak, M.D. be re-elected as member of the Board of Directors and Chairman of the Board of Directors and that each of Samarth Kulkarni, Ph.D., Bradley Bolzon, Ph.D., Ali Behbahani, M.D., H Edward Fleming Jr., M.D., Simeon J. George, M.D., John T. Greene, Katherine A. High, M.D., and Douglas A. Treco, Ph.D. be elected or re-elected, as appropriate, as directors, each for a term extending until completion of the 2022 annual general meeting of shareholders.

The Board of Directors proposes to re-elect, as appropriate, each of Ali Behbahani, M.D., Simeon J. George, M.D., and John T. Greene as members of the Compensation Committee of the Board of Directors, each for a term extending until completion of the 2022 annual general meeting of the shareholders.

The Board of Directors proposes to hold the following separate votes on the non-performance-related and the variable compensation of the Board of Directors and the Executive Committee:

6.a Binding vote on total non-performance-related compensation for members of the Board of Directors from the 2021 Annual General Meeting to the 2022 annual general meeting of shareholders.

The Board of Directors proposes that shareholders approve the total maximum amount of non-performance-related compensation for the members of the Board of Directors covering the period from the 2021 Annual General Meeting to the 2022 annual general meeting of shareholders, i.e., USD $507,000 (cash base compensation plus social security costs).

6.b Binding vote on equity for members of the Board of Directors from the 2021 Annual General Meeting to the 2022 annual general meeting of shareholders.

The Board of Directors proposes that shareholders approve the maximum grant of equity or equity linked instruments for the members of the Board of Directors covering the period from the 2021 Annual General Meeting to the 2022 annual general meeting of shareholders with maximum value of USD $11,738,100 (equity grant date value plus social security costs).

 

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6.c Binding vote on total non-performance-related compensation for members of the Executive Committee from July 1, 2021 to June 30, 2022.

The Board of Directors proposes that shareholders approve the total maximum amount of non-performance-related cash compensation for the members of the Executive Committee covering the period from July 1, 2021 to June 30, 2022, i.e., USD $3,514,207 (cash base compensation plus social security costs).

6.d Binding vote on total variable compensation for members of the Executive Committee for the current year ending December 31, 2021.

 The Board of Directors proposes that shareholders approve the total maximum amount of variable compensation for the members of the Executive Committee for the current year ending December 31, 2021, i.e., USD $2,693,933 (cash compensation plus social security costs).

6.e Binding vote on equity for members of the Executive Committee from the 2021 Annual General Meeting to the 2022 annual general meeting of shareholders.

The Board of Directors proposes that shareholders approve the maximum of equity or equity linked instruments for the members of the Executive Committee covering the period from the 2021 Annual General Meeting of shareholders to the 2022 annual general meeting of shareholders with maximum value of USD $55,827,593 (equity grant date value plus social security costs).

The Board of Directors proposes to increase the Company’s conditional share capital for employee equity plans by 5,000,000 Common Shares in order to cover any future share issuances due to the exercise of equity incentive awards under the Company’s employee equity plans and amend art. 3c para. 1 of the Articles of Association as follows:

 

 

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The Board of Directors proposes to increase the maximum size of the Board of Directors to 10 members, and to amend art. 20 of the Articles of Association to reflect the foregoing as follows:

 

The Board of Directors proposes to increase the authorized share capital to 39,316,975 shares, to extend the date by which the Board of Directors may increase the share capital to June 10, 2023, and to amend art. 3a para 1 of the Articles of Association to reflect the foregoing as follows:

 

 

The Board of Directors proposes the re-election of lic. iur. Marius Meier, Attorney at Law, Lautengartenstrasse 7, CH-4052 Basel, as the independent voting rights representative until the closing of the 2022 annual general meeting of shareholders.

 

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The Board of Directors proposes to re-elect Ernst & Young AG as the Company’s statutory auditor for the term of office of one year and the re-election of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2021.

 

In light of the global spread of the SARS-CoV-2 virus (coronavirus) and the COVID-19 pandemic and the uncertainty whether our chairman or any member of the Board of Directors will be able to personally attend the 2021 Annual General Meeting, the Board of Directors may make an ad hoc proposal for the election of an ad hoc chairperson of the 2021 Annual General Meeting if neither our chairman nor any other member of the Board of Directors is able to preside at the 2021 Annual General Meeting. Please read the “Important Notice Regarding COVID-19 (Coronavirus) in Switzerland” below.

 

The foregoing items of business are more fully described in the attached proxy statement, which forms a part of this notice and is incorporated herein by reference. Shareholders of record at the close of business on April 16, 2021 will be entitled to notice of and to vote at the 2021 Annual General Meeting or any adjournment or postponement thereof.

We have elected to provide access to our proxy materials over the Internet under the Securities and Exchange Commission’s “notice and access” rules. We believe that providing our proxy materials over the Internet expedites shareholders’ receipt of proxy materials, lowers costs and reduces the environmental impact of our annual general meeting.

Due to the current spread of the SARS-CoV-2 virus (coronavirus) and the COVID-19 pandemic in Switzerland and globally, and in accordance with the Swiss Federal Act on the Statutory Principles for Federal Council Ordinances on Combating the COVID-19 Epidemic of 25 September 2020, and the Ordinance 3 on Measures to Combat the Coronavirus (COVID-19), enacted by the Swiss Federal Council on June 19, 2020, in each case as amended from time to time (the COVID-19 Regime), the Board of Directors has decided that shareholders can exercise their rights at the 2021 Annual General Meeting through the independent voting rights representative, as in-person attendance of shareholders at the 2021 Annual General Meeting will not be possible. Under current Swiss statutory corporate law, virtual meetings are not permitted, and under the COVID-19 Regime, voting is permitted only by ballot or electronic means or through the independent voting rights representative. Please read the “Important Notice Regarding COVID-19 (Coronavirus) in Switzerland” on page 6 of this Notice of Invitation to 2021 Annual General Meeting of Shareholders. We encourage you to read this proxy statement and submit your proxy or voting instructions as soon as possible. Please review the instructions on each of your voting options described in the proxy statement.

 

Thank you for your ongoing support and continued interest in CRISPR Therapeutics AG.

 

Zug, Switzerland

April   , 2021

 

 

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CRISPR THERAPEUTICS AG

Baarerstrasse 14

6300 Zug

Switzerland

+41 (0)41 561 32 77

 

PROXY STATEMENT

 

2021 ANNUAL GENERAL MEETING OF SHAREHOLDERS

To Be Held on June 10, 2021

 

INFORMATION CONCERNING SOLICITATION AND VOTING

This proxy statement and the enclosed proxy card are being furnished in connection with the solicitation of proxies by the board of directors, or the Board of Directors, of CRISPR Therapeutics AG, or the Company, for use at the 2021 annual general meeting of shareholders, or the 2021 Annual General Meeting, to be held on June 10, 2021 at 8:00 a.m. Central European Summer Time (2:00 a.m. Eastern Daylight Time) at the offices of Walder Wyss Ltd., Seefeldstrasse 123, 8008 Zurich, Switzerland, and at any adjournment thereof. Please read the “Important Notice Regarding COVID-19 (Coronavirus) in Switzerland” on page 6 of the Notice of Invitation to 2021 Annual General Meeting of Shareholders.

Unless otherwise stated, all references to “us,” “our,” “CRISPR,” “CRISPR Therapeutics,” “we,” the “Company” and similar designations refer to CRISPR Therapeutics AG and its consolidated subsidiaries. References to our website are inactive textual references only, and the contents of our website are not incorporated by reference into this proxy statement.

This proxy statement summarizes information about the proposals to be considered at the meeting and other information you may find useful in determining how to vote. The proxy card is the means by which you actually authorize another person to vote your shares in accordance with your instructions. We are making this proxy statement, the related proxy card and our annual report to shareholders for the year ended December 31, 2020, or the Annual Report, available to shareholders for the first time on or about April      , 2021.

A copy of our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the United States Securities and Exchange Commission, or the SEC, except for exhibits, will be furnished without charge to any shareholder upon written or oral request to CRISPR Therapeutics, Inc., 610 Main Street, Cambridge, Massachusetts 02139, on the internet at www.proxydocs.com/CRSP, by calling (866) 648-8133, by emailing paper@investorelections.com or by submitting a request over the Internet at www.investorelections.com/CRSP. This proxy statement and our Annual Report on Form 10-K for the year ended December 31, 2020 are also available on the SEC’s website at www.sec.gov.

 

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IMPORTANT INFORMATION ABOUT THE ANNUAL GENERAL MEETING AND VOTING

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No In Person Attendance at the 2021 Annual General Meeting: Due to the current spread of the SARS-CoV-2 virus (coronavirus) and the COVID-19 pandemic in Switzerland and globally, in-person attendance of shareholders at the 2021 Annual General Meeting will not be possible. Please read the “Important Notice Regarding COVID-19 (Coronavirus) in Switzerland” on page 6 of this Notice of Invitation to 2021 Annual General Meeting of Shareholders.

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If your shares are held in “street name,” meaning they are held for your account by an intermediary, such as a broker, then you are deemed to be the beneficial owner of your shares, and the broker that actually holds the shares for you is the record holder and is required to vote the shares it holds on your behalf according to your instructions. The proxy materials, as well as voting and revocation instructions, should have been forwarded to you by the broker that holds your shares. In order to vote your shares, you will need to follow the instructions that your broker provides you. Many brokers solicit voting instructions over the Internet or by telephone.

If you do not give instructions to your broker, your broker will still be able to vote your shares with respect to certain “routine” items. The following proposals are considered routine items:

Accordingly, your broker may vote your shares in its discretion with respect to these proposals even if you do not give voting instructions.

Although brokers have discretionary authority to vote shares on “routine” matters, they do not have authority to vote shares on “non-routine” matters under applicable stock exchange rules. We believe that the following proposals to be voted on at the 2021 Annual General Meeting will be considered to be “non-routine” under the applicable stock exchange rules and, if you do not give your broker voting instructions on such proposals, your broker may not vote your shares with respect to these matters and your shares will be counted as “broker non-votes” with respect to the proposal. A “broker non-vote” occurs when shares held by a broker are not voted with respect to a particular proposal because the broker does not have or did not exercise discretionary authority to vote on the matter and has not received voting instructions from its clients. As a result, a broker non-vote is neither a vote cast nor a vote represented, respectively.

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If your shares are held in “street name,” you may submit new voting instructions by contacting your broker or other nominee.

Proposals 7, 8 and 9 require the affirmative vote of at least two thirds of the represented share votes at the 2021 Annual General Meeting.

 

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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Election of Directors

Our Board of Directors is comprised of one class, with members holding office for one year terms. There are currently eight directors on our Board of Directors (Rodger Novak, M.D., Samarth Kulkarni, Ph.D., Bradley Bolzon, Ph.D., Ali Behbahani, M.D., Simeon J. George, M.D., John T. Greene, Katherine A. High, M.D. and Douglas A. Treco, Ph.D.), whose terms expire at the 2021 Annual General Meeting, subject to such director’s earlier death, resignation or removal.

Set forth below are the names and certain information for each member and nominee of the Board of Directors, as of March 15, 2021. The information presented includes each director and nominee’s principal occupation and business experience for the past five years, and the names of other public companies of which he or she has served as a director during the past five years. The information presented below regarding the specific experience, qualifications, attributes and skills of each director and nominee led our nominating and corporate governance committee and our Board of Directors to conclude that he or she should serve as a director and be nominated for directorship at the 2021 Annual General Meeting. In addition, we believe that each director and nominee possesses the attributes or characteristics which the nominating and corporate governance committee expects of each director. These attributes and characteristics are further described in “—Corporate Governance Matters—Director Nomination Process.” There are no family relationships among any of our directors or executive officers.

 

 

Nominee for Re-Election as Member and Chairman of the Board of Directors

Rodger Novak, M.D., Co-Founder, Chairman and President: Dr. Novak co-founded CRISPR Therapeutics AG in November 2013, has served as a director on our Board of Directors since inception, served as our Chief Executive Officer until December 1, 2017 and, since that date, has served as our President and since December 21, 2017 as our Chairman. In addition to his roles with the Company, Dr. Novak also joined SR One Capital Management, LP, or SR One, in November 2020 as a Venture Partner based in Switzerland supporting SR One on new company formation and early-stage investment. Prior to joining our company, Dr. Novak served as Global Head Anti-infectives Research and Development at Sanofi, a pharmaceutical company. Prior to Sanofi, Dr. Novak co-founded Nabriva Therapeutics AG, a biopharmaceutical company, in January 2006, and served as its Chief Operating Officer from inception to May 2012. From March 2003 to January 2006, Dr. Novak served as the Deputy Head of the Antibiotic Research Institute at Sandoz GmbH. Dr. Novak was appointed as Professor for Microbiology at the Vienna Biocenter in March 2001. Dr. Novak received an M.D. from Philipps University of Marburg, Germany. He continued with post-doctoral work in New York City at The Rockefeller University, St. Jude

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Children’s Research Hospital and the Skirball Institute of Biomolecular Medicine at NYU Langone Medical Center. Dr. Novak has authored numerous publications, including articles in Nature, Nature Medicine and Molecular Cell and is a co-inventor of five patents. We believe Dr. Novak’s experience as our Chief Executive Officer, as well as his experience in the biopharmaceutical industry, qualifies him to serve on our Board of Directors.

Nominee for Election as Member

H Edward Fleming Jr., M.D.: Dr. Fleming is a Senior Partner at McKinsey and Company, or McKinsey, in the Silicon Valley Office in Redwood City, California. He is the global leader of McKinsey’s R&D practice where he is responsible for its client service and knowledge development on R&D topics. Dr. Fleming earned his B.A. in Chemistry from Harvard University, his M.D. from Vanderbilt University, and completed internal medicine training at Johns Hopkins Hospital and subspecialty training in pulmonary and critical care medicine at the University of California, San Francisco.  Dr. Fleming joined McKinsey in 1997 where he has focused on healthcare, working closely with life sciences, biopharmaceutical, medical device and technology companies of all sizes to improve their performance. Dr. Fleming serves on the Board of Visitors for Vanderbilt’s School of Basic Sciences. We believe Dr. Fleming’s experience in the healthcare industry, including working closely with biopharmaceutical companies on strategy, operational performance and R&D innovation, qualifies him to serve on our Board of Directors.

Nominees for Re-Election as Member

Ali Behbahani, M.D., M.B.A., Director: Dr. Behbahani has served on our Board of Directors since April 2015. Dr. Behbahani joined New Enterprise Associates, Inc., or NEA, in 2007 and is a General Partner on the healthcare team. Dr. Behbahani also has served as a member of the board of directors of Adaptimmune Therapeutics plc, a biopharmaceutical company, since September 2014, Nkarta, Inc., a biopharmaceutical company, since August 2015 and as chairman since August 2019, Oyster Point Pharma, Inc., a biopharmaceutical company, since July 2017 and as chairman since October 2020, Genocea Biosciences, Inc., a biopharmaceutical company, since February 2018 and Black Diamond Therapeutics, Inc., an oncology company, since December 2018. Dr. Behbahani previously served as a member of the board of directors of Nevro Corp., a medical device company, from August 2014 to March 2019. Prior to joining NEA, Dr. Behbahani served as a consultant in business development at The Medicines Company, a pharmaceutical company. In addition, Dr. Behbahani formerly served as a Venture Associate at Morgan Stanley and as a Healthcare Investment Banking Analyst at Lehman Brothers. Dr. Behbahani received an M.D. from the University of Pennsylvania School of Medicine, an M.B.A. from the Wharton School of the University of Pennsylvania and a B.S. in Biomedical Engineering, Electrical Engineering and Chemistry from Duke University. We believe Dr. Behbahani’s experience in the biopharmaceutical industry, as well as his experience as a member on the boards of directors of multiple companies in the industry, qualifies him to serve on our Board of Directors.

Bradley Bolzon, Ph.D., Director: Dr. Bolzon has served on our Board of Directors since April 2014. Dr. Bolzon is Chairman and Managing Director of Versant Venture Management, LLC, where he has been employed since May 2004. Dr. Bolzon also has served as a member of the board of directors of Black Diamond Therapeutics, Inc., an oncology company, since December 2017. Dr. Bolzon previously served as a member of the board of directors of Flexion Therapeutics, Inc., a pharmaceutical company, from its inception in 2007 to June 2014. From February 2000 to May 2004, Dr. Bolzon served as Executive Vice President, Global Head of Business Development, Licensing & Alliances of F. Hoffman-La Roche Ltd., a pharmaceutical company. Dr. Bolzon also formerly served as Head of Cardiovascular Research at Eli Lilly and Company. Dr. Bolzon received a Ph.D. in Pharmacology and an M.S. in Pharmacology from the University of Toronto. He continued with post-doctoral work at the University of Ottawa Heart Institute. We believe Dr. Bolzon’s experience in the biopharmaceutical industry qualifies him to serve on our Board of Directors.

Simeon J. George, M.D., Director: Dr. George has served on our Board of Directors since April 2015. Dr. George is the Chief Executive Officer of SR One Capital Management, LP, a trans-Atlantic biotech venture capital firm, where he has been employed since September 2020. SR One Capital Management, LP spun out of GlaxoSmithKline plc in November 2020. Previously, Dr. George was the Chief Executive Officer and President of S.R. One, Limited, previously an indirect, wholly-owned subsidiary of GlaxoSmithKline plc, where he had been employed since 2007. Dr. George also has served as a director of Nkarta Therapeutics, Inc. since February 2020 (and previously from July 2015 to September 2017), Turning Point Therapeutics, Inc. since May 2017, and Design Therapeutics, Inc. since February 2020. In addition, Dr. George previously served as a director on the boards of the

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following biotechnology companies: Principia Biopharma Inc. from February 2011 to September 2020, Progyny, Inc. from May 2012 to October 2019, HTG Molecular Diagnostics, Inc. from June 2011 to October 2015 and Genocea Biosciences, Inc. from April 2010 to December 2014. Dr. George also served as a consultant at Bain & Company from October 2006 to August 2007. Dr. George received an M.D. from the University of Pennsylvania School of Medicine, an M.B.A. from the Wharton School of the University of Pennsylvania, and a B.A. in Neuroscience from Johns Hopkins University. We believe Dr. George’s experience in the biopharmaceutical industry, as well as his experience as a member on the boards of directors of multiple companies in the industry, qualifies him to serve on our Board of Directors.

John T. Greene, Director: Mr. Greene has served on our Board of Directors since June 2019. Since September 2019, Mr. Greene has served as Executive Vice President and Chief Financial Officer of Discover Financial Services. From November 2016 to April 2018, Mr. Greene served as Executive Vice President, Chief Financial Officer and Treasurer of Bioverativ, Inc., a global biopharmaceutical company. Prior to joining Bioverativ, Mr. Greene was the Chief Financial Officer of Willis Group Holdings, risk advisory, insurance and reinsurance brokerage company, from June 2014 until January 2016. Before joining Willis Group, Mr. Greene held senior executive roles at HSBC, the global financial services company, for eight years, including Chief Financial Officer for Retail Bank and Wealth Management business. Prior to HSBC, Mr. Greene worked for 12 years in various roles at General Electric Company. Mr. Greene has an undergraduate degree from the State University of New York, and an M.B.A. from Northwestern University’s Kellogg School of Management. We believe Mr. Greene’s experience in the biotechnology industry, as well as his experience as an executive at several large companies in other business sectors, qualifies him to serve on our Board of Directors.

Katherine A. High, M.D, Director: Dr. High has served on our Board of Directors since June 2019. Since January 2021, Dr. High has served as the President, Therapeutics of Asklepios BioPharmaceutical, Inc., or AskBio, a subsidiary of Bayer AG, and as a member of AskBio’s board of directors. Previously, Dr. High co-founded Spark Therapeutics, Inc. and from September 2014 to December 2019, she served as its President and as a member of its board of directors and served as its Head of Research & Development from September 2017 to February 2020. Dr. High also has served as a director of Incyte Corporation since March 2020. From 2004 to 2014, Dr. High was a Professor at the Perelman School of Medicine at the University of Pennsylvania, an Investigator at Howard Hughes Medical Institute and the Director of the Center for Cellular and Molecular Therapeutics at the Children’s Hospital of Philadelphia. She completed a five-year term from 2000 to 2005 on the U.S. Food and Drug Administration Advisory Committee on Cell, Tissue and Gene Therapies and is a past president of the American Society of Gene & Cell Therapy. Dr. High holds an A.B. in chemistry from Harvard University, an M.D. from the University of North Carolina School of Medicine, a business certification from the University of North Carolina Business School Management Institute for Hospital Administrators and an honorary M.A. from The University of Pennsylvania. We believe Dr. High’s experience as an executive and scientific leader in the life sciences industry qualifies her to serve on our Board of Directors.

Samarth Kulkarni, Ph.D., Chief Executive Officer and Director: Dr. Kulkarni has served as our Chief Executive Officer since December 1, 2017 and a member of our Board of Directors since June 2018. Previous to that, Dr. Kulkarni served as our President and Chief Business Officer from May 2017 to November 30, 2017 and, before that, as our Chief Business Officer from August 2015 when he joined our company. Prior to joining our company, Dr. Kulkarni was at McKinsey & Company from 2006 to July 2015, with various titles, his most recent being Partner within the Pharmaceuticals and Biotechnology practice. Dr. Kulkarni also has served as a member of the board of directors of Repare Therapeutics Inc., an oncology company, since November 2019, as well as Black Diamond Therapeutics, Inc., an oncology company, since December 2019. Dr. Kulkarni received a Ph.D. in Bioengineering and Nanotechnology from the University of Washington and a B. Tech. from the Indian Institute of Technology. Dr. Kulkarni has authored several publications in leading scientific and business journals. We believe Dr. Kulkarni’s experience as our Chief Executive Officer, his previous experience as our President and Chief Business Officer, and his experience in the biopharmaceutical industry, qualifies him to serve on our Board of Directors.

Douglas A. Treco, Ph.D., Director: Dr. Treco has served on our Board of Directors since June 2020. Dr. Treco co-founded Ra Pharmaceuticals, Inc., a biopharmaceutical company, in 2008, which was acquired by UCB S.A. in April 2020. He served as its president and chief executive officer and a member of its board of directors from its inception in 2008 through July 2020. Dr.Treco also has served as a member of the board of directors of Inozyme Pharma Inc., a biopharmaceutical company, since May 2020 and has been a Scientific Advisor to Lightstone Ventures since November 2020. Dr. Treco was an entrepreneur-in-residence with Morgenthaler Ventures

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between January 2008 and May 2014. In 1988, he co-founded Transkaryotic Therapies Inc., a biopharmaceutical company, which was acquired in 2005 by Shire Pharmaceuticals Group plc. Dr. Treco was a visiting scientist in the Department of Molecular Biology at Massachusetts General Hospital and a lecturer in genetics at Harvard Medical School from 2004 to 2007. Dr. Treco received his Ph.D. in biochemistry and molecular biology from the State University of New York, Stony Brook, and performed postdoctoral studies at the Salk Institute for Biological Studies and Massachusetts General Hospital. We believe Dr. Treco’s experience as an executive and scientific leader in the life sciences industry, in particular, his unique focus on rare disease, gene targeting, and gene therapy, qualifies him to serve on our Board of Directors.

Corporate Governance Matters

Our Board of Directors believes that good corporate governance is important to ensure that our company is managed for the long-term benefit of shareholders. This section describes key corporate governance guidelines and practices that our Board of Directors has adopted. Complete copies of our Articles of Association, our Organizational Rules, corporate governance guidelines, committee charters for each of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, and Code of Business Conduct and Ethics are available on the “Investors & Media—Corporate Governance” section of our website, which is located at www.crisprtx.com. Alternatively, you can request a copy of any of these documents by writing us at CRISPR Therapeutics, Inc., 610 Main Street, Cambridge, Massachusetts 02139, Attention: Investor Relations.

Code of Business Conduct and Ethics

Our Board of Directors has adopted a Code of Business Conduct and Ethics, or the Code of Conduct, that is applicable to all of our employees, executive officers and directors, which is available on our website www.crisprtx.com. The Audit Committee of our Board of Directors is responsible for overseeing the Code of Conduct. Approval of the Audit Committee is required for any waivers of the Code of Conduct for employees, executive officers and directors. Any amendments to the Code of Conduct, or any waivers of its requirements, will be disclosed on our website.

Board Leadership Structure and Risk Oversight

Board Leadership Structure

As a general policy, our Board of Directors believes that separation of the positions of chairman and chief executive officer reinforces the independence of the Board of Directors from management, creates an environment that encourages objective oversight of management’s performance and enhances the effectiveness of the Board of Directors as a whole. Accordingly, we currently separate the roles of chief executive officer and chairman of the Board of Directors, with Dr. Kulkarni serving as our chief executive officer and Dr. Novak serving as chairman of the Board of Directors. As chief executive officer, Dr. Kulkarni is responsible for managing our executive leadership team and, together with that team, setting the strategic direction for our company and the day-to-day leadership and performance of our company, while the chairman of the Board of Directors presides over meetings of the Board of Directors, including executive sessions, and performs oversight responsibilities. Our Board of Directors has three standing committees that currently consist of, and are chaired by, independent directors. Our Board of Directors delegates substantial responsibilities to the committees, which then report their activities and actions back to the full Board of Directors. We believe that the independent committees of our Board of Directors and their chairpersons promote effective independent governance. We believe this structure represents an appropriate allocation of roles and responsibilities for our company at this time because it strikes an effective balance between management and independent leadership participation in our Board of Directors proceedings.

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Risk Oversight

Our Board of Directors oversees the management of risks inherent in the operation of our business and the implementation of our business strategies. Our Board of Directors performs this oversight role by using several different levels of review. In connection with its reviews of the operations and corporate functions of our company, our Board of Directors addresses the primary risks associated with those operations and corporate functions. In addition, our Board of Directors reviews the risks associated with our company’s business strategies periodically throughout the year as part of its consideration of undertaking any such business strategies.

Each committee of our Board of Directors also oversees the management of our company’s risk that falls within the committee’s areas of responsibility. In performing this function, each committee has full access to management, as well as the ability to engage advisors. Our chief executive officer reports to the Audit Committee and Board of Directors and is responsible for identifying, evaluating and implementing risk management controls and methodologies to address any identified risks. In connection with its risk management role, our Audit Committee meets privately with representatives from our independent registered public accounting firm and our chief executive officer. The Audit Committee oversees the operation of our risk management program, including the identification of the primary risks associated with our business and periodic updates to such risks, and reports to our Board of Directors regarding these activities.

Board Determination of Independence

Rule 5605 of the Nasdaq Listing Rules requires 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 Listing Rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees be independent under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act, and compensation committee members must also satisfy the independence criteria set forth in Rule 10C-1 under the Exchange Act. Under Rule 5605(a)(2) of the Nasdaq Listing Rules, a director will only qualify as an “independent director” if, in the opinion of our 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, 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 committee of the Board of Directors, 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 order to be considered independent for purposes of Rule 10C-1, the Board of Directors must consider, for each member of a compensation committee of a listed company, 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, but not limited to: (1) the source of compensation of the director, including any consulting advisory or other compensatory fee paid by such company to the director; and (2) whether the director is affiliated with the company or any of its subsidiaries or affiliates.

Our Board of Directors has undertaken a review of its composition, the composition of its committees and the independence of each director. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our Board of Directors has determined that the following members of the Board of Directors, Ali Behbahani, M.D., Bradley Bolzon, Ph.D., Simeon J. George, M.D., John T. Greene, Katherine A. High, M.D., and Douglas A. Treco, Ph.D., as well as the nominee to be elected to the Board of Directors at the 2021 Annual General Meeting, H Edward Fleming Jr., M.D., do not have any relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these non-employee directors is “independent” as that term is defined under the applicable rules and regulations of the SEC, and the listing requirements and rules of the Nasdaq Listing Rules. In making this determination, our Board of Directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our Board of Directors deemed relevant in determining their independence, including the beneficial ownership of our common shares by each non-employee director.

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Board of Director Meetings and Attendance

Our Board of Directors held six formal meetings during 2020. During 2020, each of the directors then in office attended at least 75% of the aggregate of the number of Board of Directors meetings and the number of meetings held by all committees of the Board of Directors on which such director then served.

Although we do not have a formal policy regarding attendance by members of our Board of Directors at our annual general meeting, we encourage all of our directors to attend. Due to the spread of the SARS-CoV-2 virus (coronavirus) and the COVID-19 pandemic in Switzerland and globally, in-person attendance at our 2020 annual general meeting was not possible. As a result, our Chairman of the Board of Directors, Rodger Novak, was the only member of the Board of Directors who attended our 2020 annual general meeting of shareholders.

Communicating with the Independent Directors

Our Board of Directors will give appropriate attention to written communications that are submitted by shareholders, and will respond if and as appropriate. The chairman of the Board of Directors is primarily responsible for monitoring communications from shareholders and for providing copies or summaries to the other directors as he considers appropriate.

Shareholders who wish to send communications on any topic to our Board of Directors should address such communications to CRISPR Therapeutics AG, Baarerstrasse 14, 6300 Zug, Switzerland, Attn: General Counsel and Secretary, telephone +41 (0)41 561 32 77 and CRISPR Therapeutics, Inc., 610 Main Street, Cambridge, Massachusetts 02139, Attn: General Counsel and Secretary, telephone: +1 617 315-4600.

Committees of the Board of Directors

We have established an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. Each of these committees operates under a charter that has been approved by our Board of Directors. A copy of each committee’s charter can be found under the “Investors & Media—Corporate Governance” section of our website, which is located at www.crisprtx.com.

Audit Committee

Our Audit Committee currently consists of Simeon J. George, M.D, John T. Greene and Douglas A. Treco, Ph.D, and subject to and following the election of directors at the 2021 Annual General Meeting, each will continue serving as a member of our Audit Committee Our Board of Directors has determined that each member of our Audit Committee is independent under the Nasdaq listing standards and Rule 10A-3(b)(1) of the Exchange Act. The chair of our Audit Committee is Mr. Greene, and if Mr. Greene is re-elected to the Board of Directors at the 2021 Annual General Meeting, Mr. Greene will continue serving as the chair of our Audit Committee. Our Board of Directors has determined that Mr. Greene is an “Audit Committee financial expert” within the meaning of SEC regulations. Our Board of Directors has also determined that each member of our Audit Committee can read and understand fundamental financial statements in accordance with applicable requirements. In arriving at these determinations, the Board of Directors has examined each Audit Committee member’s scope of experience and the nature of their employment in the corporate finance sector. The Audit Committee held four formal meetings during 2020.

The Audit Committee has the responsibility to, among other things:

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Compensation Committee

Our Compensation Committee currently consists of Ali Behbahani, M.D., Simeon J. George, M.D. and John T. Greene and, subject to and following the election of directors at the 2021 Annual General Meeting, each will continue serving as a member of our Compensation Committee. Our Board of Directors has determined that each member of our Compensation Committee is independent under the Nasdaq listing standards, is an outside director within the definition of Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended, or the Code, and is a “non-employee director” for purposes of Rule 16b-3 promulgated by the SEC, and Rule 10C-1(b)(1) of the Exchange Act. The chair of our Compensation Committee is Dr. George, and if Dr. George is re-elected to the Board of Directors at the 2021 Annual General Meeting, Dr. George will continue serving as the chair of our Compensation Committee. The Compensation Committee held four formal meetings during 2020.

Our Compensation Committee has the responsibility to, among other things:

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Nominating and Corporate Governance Committee

Our Nominating and Corporate Governance Committee, or the Nominating Committee, currently consists of Ali Behbahani, M.D., Bradley Bolzon, Ph.D. and Katherine A. High, M.D, and, subject to and following the election of directors at the 2021 Annual General Meeting, each will continue serving as a member of our Nominating Committee. Our Board of Directors has determined that each member of the Nominating Committee is independent under the Nasdaq listing standards. The current chair of our Nominating Committee is Dr. Behbahani, and if Dr. Behbahani is re-elected to the Board of Directors at the 2021 Annual General Meeting, Dr. Behbahani will continue serving as the chair of our Nominating Committee. The Nominating Committee held one formal meeting during 2020.

The Nominating Committee has the responsibility to, among other things:

Director Nomination Process

The process followed by our Nominating 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 Nominating Committee and our Board of Directors.

Criteria and Diversity

In considering whether to recommend to our Board of Directors any particular candidate for inclusion in our Board of Directors’ slate of recommended director nominees, including candidates recommended by shareholders, the Nominating Committee applies the criteria set forth in our corporate governance guidelines. These criteria include the candidate’s experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing, accomplishments in the candidate’s respective field, the candidate’s reputation for high ethical and moral standards, the candidate’s time and ability to devote to the affairs of the company, and to the extent applicable, the candidates history of actively contributing to any boards of directors on which the candidate has previously served.

The director biographies set forth in this proxy statement indicate each nominee’s experience, qualifications, attributes and skills that led our Nominating Committee and our Board of Directors to conclude he or she should continue to serve as a director. Our Nominating Committee and our Board of Directors believe that each of the nominees has the individual attributes and characteristics required of each of our directors, and the nominees as a group possess the skill sets and specific experience desired of our Board of Directors as a whole.

We do not have a policy (formal or informal) with respect to diversity, but we believe that our board, taken as a whole, should embody a diverse set of skills, experiences and backgrounds. In this regard, our Nominating Committee and our Board of Directors also take into consideration the diversity (with respect to gender, race and national origin) of our board members but do not make any particular weighting of diversity or any other characteristic in evaluating nominees and directors. Our Nominating Committee’s and our Board of Directors’ priority in selecting board members is identification of persons who will further the interests of our shareholders.

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Shareholder Nominations

Under our Articles of Association, one or more registered shareholders who together represent shares representing at least the lesser of (i) ten percent of our issued share capital or (ii) an aggregate par value of one million Swiss francs may demand that an item be placed on the agenda of a meeting of shareholders. The relevant provisions of our Articles of Association regarding the right of one or more registered shareholders who together represent shares representing at least the lesser of (i) ten percent of our issued share capital or (ii) an aggregate par value of one million Swiss francs to demand that an item be placed on the agenda of a meeting of shareholders are available on our website at http://ir.crisprtx.com. You may also contact the General Counsel and Secretary of the Company at secretary@crisprtx.com to request a copy of the relevant provisions of our Articles of Association.

Nominations of director candidates by registered shareholders must follow the rules for shareholder proposals described under “Other Matters—Shareholder Proposals and Directors Nominations.” Assuming that appropriate biographical and background material has been provided on a timely basis, the Nominating Committee will evaluate shareholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for candidates submitted by others. If the Board of Directors determines to nominate a shareholder-recommended candidate and recommends his or her election, then his or her name will be included in our proxy card for the next annual general meeting.

Compensation Committee Interlocks and Insider Participation

None of the members of our Compensation Committee and Nominating and Corporate Governance Committees is currently, or has been at any time, one of our officers or employees. None of our executive officers currently serves, or has served during the last year, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our Board of Directors, Compensation Committee, or Nominating Committee.

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 and any director or executive officer, director nominee, holder of 5% or more of any class of our voting securities or any member of the immediate family of or entities affiliated with any of the foregoing 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. Any such transaction must be presented to our Audit Committee for review, consideration and approval. In approving or rejecting any such proposal, our Audit Committee is to consider the relevant facts and circumstances available and deemed relevant to the Audit Committee, including, but not limited to, the extent of the related party’s interest in the transaction, and whether the transaction is on terms no less favorable to us than terms we could have generally obtained from an unaffiliated third party under the same or similar circumstances.

Related Person Transactions

Other than the compensation arrangements for our named executive officers and directors, which are described elsewhere in the “Executive Compensation” and “Director Compensation” sections of this proxy statement, set forth below is a description of transactions since January 1, 2020 to which we were or are a party, and in which:

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Registration Rights Agreement

As of March 15, 2020, 4,667,505 holders of common shares are entitled to certain rights with respect to registration of such shares under the Securities Act of 1933, as amended, or the Securities Act. These shares are referred to as registrable securities. The holders of the registrable securities are entitled to the demand, piggyback and Form S-3 registration rights described below.

The registration of registrable securities pursuant to the exercise of the registration rights would enable the holders to trade these registrable securities without restriction under the Securities Act when the applicable registration statement is declared effective. We will pay the registration expenses of the shares registered pursuant to the demand, piggyback and Form S-3 registrations described below.

Generally, in an underwritten offering, the underwriters, if any, have the right, subject to specified conditions, to limit the number of registrable securities the holders may include. The demand, piggyback and Form S-3 registration rights described below will expire on October 24, 2021, or with respect to any particular holder, at such time that such holder can sell its shares under Rule 144 of the Securities Act during any ninety-day period.

Demand Registration Rights

The holders of the registrable securities are entitled to certain demand registration rights. The holders of at least two-thirds (66 2/3%) of the registrable securities then outstanding may make a written request that we register all or a portion of their registrable securities, subject to certain specified exceptions. Such request for registration must cover securities the aggregate proceeds of which, after payment of underwriting discounts, commissions and other expenses related to such registration, would exceed $10,000,000. In no event will we be required to effect more than two demand registrations.

Piggyback Registration Rights

If we propose to register for offer and sale any of our securities under the Securities Act in an offering for cash, either for our own account or for the account of other security holders, the holders of registrable securities will be entitled to certain “piggyback” registration rights allowing them to include their registrable securities in such registration, subject to certain marketing and other limitations. As a result, whenever we propose to file a registration statement under the Securities Act in connection with a public offering for our own account or for the account of any shareholder, the holders of these registrable securities are entitled to notice of the registration and have the right, subject to limitations that the underwriters may impose on the number of shares included in the registration, to include their registrable securities in the registration.

Form S-3 Registration Rights

The holders of registrable securities are entitled to certain Form S-3 registration rights. Any holder of registrable securities can make a request that we register for offer and sale all or any portion of their registrable securities on Form S-3 or any similar short form registration statement if we are qualified to file a registration statement on Form S-3, subject to certain specified exceptions. Such request for registration on Form S-3 must cover securities the aggregate offering price of which, before payment of the underwriting discounts and commissions, equals or exceeds $2.0 million. We will not be required to effect more than one registration on Form S-3 within any 12-month period.

 

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EXECUTIVE OFFICERS

Certain information regarding our executive officers who are not also directors, as of March 15, 2021, is set forth below.

 

 

Tony W. Ho, M.D., Executive Vice President, Research and Development: Dr. Ho has served as our Executive Vice President, Research and Development since August 2017. Prior to joining our company, Dr. Ho held a number of roles at AstraZeneca between 2012 and 2017, where he most recently was Senior Vice President and Head of Oncology Integration and Innovation. Before that, he was Vice President and Global Medicine Leader, where he led the development and commercialization of two key drugs for AstraZeneca – Lynparza, a PARP inhibitor for ovarian cancer and Imfinizi (anti-PD-L1), AstraZeneca’s first immuno-oncology drug for bladder cancer. Prior to joining AstraZeneca, Dr. Ho was the Neurology and Ophthalmology Clinical Section Head at Merck Research Laboratories, Merck & Co., Inc. Earlier in his career, Dr. Ho was the co-founder and Chief Scientific Officer of Neuronyx, Inc., a regenerative medicine company. Dr. Ho completed his B.S. in Electrical Engineering at the University of California, Los Angeles, and received his M.D. from the Johns Hopkins University School of Medicine.

James R. Kasinger, General Counsel and Secretary: Mr. Kasinger has served as our General Counsel and Secretary since May 2017. Prior to joining our company, Mr. Kasinger served as the General Counsel and Secretary of Moderna, Inc., a biotechnology company, from April 2014 to May 2017. Prior to these roles, Mr. Kasinger was a partner at Goodwin Procter LLP, where he represented life sciences, technology and other high-growth companies. Mr. Kasinger started his legal career at Testa, Hurwitz & Thibeault. Mr. Kasinger holds a J.D. from Boston College Law School and a B.A. from Wheaton College.

Lawrence O. Klein, Ph.D., Chief Operating Officer: Dr. Klein has served as our Chief Operating Officer since January 2020 and remains responsible for business development activities; before that, Dr. Klein served as our Chief Business Officer from January 2019 to January 2020, our Senior Vice President, Business Development and Strategy from November 2017 through December 2018 and as our Vice President, Strategy from February 2016 to November 2017. Before joining our company, from October 2014 to February 2016, Dr. Klein was an Associate Partner at McKinsey & Company, where he was a leader in the biotech practice and served a number of biotechnology companies on a wide range of topics from strategy to operations. Dr. Klein received a Ph.D. from Stanford University, where he conducted research in the field of T cell immunology, and he holds a B.S. from the University of Wisconsin at Madison. Dr. Klein also has served as a member of the board of directors of Dyne Therapeutics, Inc., a biotechnology company, since September 2019.

Michael J. Tomsicek, Chief Financial Officer: Mr. Tomsicek has served as our Chief Financial Officer since November 2017. Prior to joining our company, Mr. Tomsicek served as Chief Financial Officer of Abiomed, a publicly-traded provider of medical devices, from July 2015 to August 2017. Before that, Mr. Tomsicek was Senior Vice President, Chief Financial Officer at Cubist Pharmaceuticals. He was at Cubist from August 2010 to January 2015 (through its sale to Merck) and held a series of roles of increasing responsibility leading finance, investor relations and strategic sourcing through a period of dynamic growth at the company. Prior to Cubist, Mr. Tomsicek spent nearly eight years at General Electric Healthcare, as finance manager in global operations, and then as chief financial officer of its ultrasound business. Mr. Tomsicek holds a B.S. in engineering and an M.B.A., both from the University of Wisconsin. Mr. Tomsicek also has served as a member of the board of directors of Milestone Pharmaceuticals Inc., a biopharmaceutical company, since April 2019.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis, or CDA, describes our executive compensation program and the 2020 compensation for our named executive officers, or NEOs. This CDA should be read with the compensation tables and related disclosures for our NEOs.

Our NEOs for 2020 were as follows:

Executive Summary

We are a leading gene editing company focused on the development of CRISPR/Cas9-based therapeutics. CRISPR/Cas9 stands for Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR)/CRISPR-associated protein 9 (Cas9) and is a revolutionary technology for gene editing, the process of precisely altering specific sequences of genomic DNA. We aim to apply this technology to disrupt, delete, correct and insert genes to treat genetically-defined diseases and to engineer advanced cellular therapies. We believe that our scientific expertise, together with our gene-editing approach, may enable an entirely new class of highly effective and potentially curative therapies for patients with both rare and common diseases for whom current biopharmaceutical approaches have had limited success. Our most advanced programs target the genetically-defined diseases transfusion-dependent beta thalassemia, or TDT, and severe sickle cell disease, or SCD, two hemoglobinopathies with high unmet medical need. We are also progressing several gene-edited allogeneic cell therapy programs, beginning with three allogeneic chimeric antigen receptor T cell, or CAR-T, candidates for the treatment of hematological and solid tumor cancers.

Overview of Executive Compensation Program

Executive Compensation Philosophy

Our executive compensation program is guided by our overarching philosophy of paying for demonstrable performance. Consistent with this philosophy, we have designed our executive compensation program to achieve the following primary goals:

Executive Compensation Program Design

Our executive compensation program is designed to be reasonable and competitive, and balance our goal of attracting, motivating, rewarding and retaining top-performing senior executives with our goal of aligning their interests with those of our shareholders. The Compensation Committee annually evaluates our executive compensation program to ensure that it is consistent with our short-term and long-term goals and the dynamic nature of our business, and makes a recommendation to the Board of Directors.

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Our executive compensation program consists of a mix of compensation elements that balance achievement of our short-term goals with our long-term performance. We provide short-term incentive compensation opportunities in the form of annual cash bonuses, which focus on our achievement of annual corporate goals. We also provide long-term incentive compensation opportunities in the form of equity awards.

Say-on-Pay

We have developed a compensation policy that is designed to attract and retain key executives responsible for our success and motivate management to enhance long-term shareholder value. 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 named executive officers to exert their best efforts for our success.

Pursuant to Swiss law and Article 18 of our Articles of Association, our shareholders must annually approve (i) the non-performance-related compensation of our Executive Committee for the 12-month period starting on July 1 following the annual general meeting, (ii) the variable compensation for the Executive Committee for the current calendar year and (iii) the grant of options or shares in the Company to the Executive Committee from the annual general meeting of shareholders to the next annual general meeting of shareholders. At our 2020 annual general meeting, shareholders approved the proposed compensation for the Executive Committee.

The Compensation Committee was mindful of shareholder support for our pay-for-performance compensation philosophy at our 2019 annual general meeting when setting fiscal year 2020 compensation for our Board of Directors and Executive Committee.  The Compensation Committee also took into account shareholder support of our Executive Committee’s compensation at the 2020 annual general meeting in maintaining our general compensation practices in fiscal year 2020 and setting the compensation for our Board of Directors and Executive Committee, to be resolved upon by the shareholders at the 2021 Annual General Meeting.

Moreover, as part of our commitment to excellence in corporate governance, and as required by Section 14A(a)(1) of the Exchange Act, periodically we must provide our shareholders with an opportunity to provide an advisory vote related to the compensation of our named executive officers, commonly known as the “say-on-pay” proposal. The SEC say-on-pay vote generally covers the calendar year prior to the date of our proxy statement. As such vote is advisory, it is not binding upon our Board of Directors or our Compensation Committee and neither the Board of Directors nor the Compensation Committee are required to take any action as a result of the outcome of such vote. However, our Compensation Committee carefully considers the outcome of this vote when considering future executive compensation policies.

As reported in our current report on Form 8-K, filed with the SEC on June 13, 2019, at our 2019 annual general meeting, approximately 99% of the votes cast on our SEC Say-on-Pay proposal supported the compensation paid to our named executive officers. At our 2019 annual general meeting, we also held a separate non-binding advisory shareholder vote on the frequency of future shareholder advisory votes regarding the compensation program for our named executive officers, commonly referred to as a “say-on-frequency” vote. At the 2019 annual general meeting, our shareholders approved, on an advisory basis, a proposal to take the say-on-pay vote every three years until the next required say-on-frequency vote. Our next say-on-frequency vote will occur at our 2022 annual general meeting. We believe holding that vote every three years is appropriate given that we are required to seek binding say-on-pay votes under Swiss law annually (see above and Proposal 6), which provides our shareholders a consistent and clear communication channel for shareholder concerns about our executive pay programs.

We will continue to engage with our shareholders and consider the results from this year’s binding votes and future advisory and binding votes on board and executive compensation as well as feedback from our shareholders. For more information regarding our binding votes on aggregate compensation, see “Proposal 6 – Approval of Compensation for the Board of Directors and the Executive Committee.”

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Governance of Executive Compensation Program

Our executive compensation program is also designed to incorporate sound practices for compensation governance. Below we summarize such practices.

What We Do:

What We Don’t Do:

Role of the Compensation Committee and the Board of Directors

The Compensation Committee discharges many of the responsibilities of our Board of Directors relating to the compensation of our executive officers, including our NEOs. The Compensation Committee oversees and evaluates our compensation and benefits policies generally, and the compensation plans, policies and practices applicable to our CEO and other executive officers. As described below, the Compensation Committee retains a compensation consultant to provide support in its review and assessment of our executive compensation program.

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At the beginning of the year, the Compensation Committee reviews and recommends to the Board of Directors that it approve of the primary elements of compensation—base salary increases, annual cash bonuses, and annual equity awards—for our CEO and members of our Executive Committee (which includes our other NEOs). In addition, the Compensation Committee may deem it advisable to review and approve subsequent compensation opportunities for our NEOs, and may deem it advisable to recommend such opportunities to the Board of Directors for final review and approval.

Compensation-Setting Factors

When reviewing and recommending to the Board of Directors the amount of each compensation element and the target total compensation opportunity for our NEOs, the Compensation Committee considers the following factors:

These factors provide the framework for compensation decisions for each of our executive officers, including our NEOs. The Compensation Committee and the Board of Directors, as applicable, do not assign relative weights or rankings to these factors, and do not consider any single factor as determinative in the compensation of our executive officers. Rather, the Compensation Committee and the Board of Directors, as applicable, rely on their own knowledge and judgment in assessing these factors and making compensation decisions.

Role of Management

In discharging its responsibilities, the Compensation Committee works with management, including our CEO. Our management assists the Compensation Committee by providing information on corporate and individual performance, market compensation data and management’s perspective on compensation matters.

In addition, at the beginning of each year, our CEO reviews the performance of our other executive officers, including our other NEOs, based on our achievement of our annual corporate goals and each executive officer’s achievement of his or her departmental and individual goals established for the prior year and his or her overall performance during that year. The Compensation Committee solicits and reviews our CEO’s recommendations for base salary increases, annual cash bonuses, annual long-term incentive compensation and other compensation opportunities for our other executive officers, including our other NEOs, and considers our CEO’s recommendations in determining such compensation, but has the authority to make the final decision independent of the CEO’s recommendation.

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Role of Compensation Consultant

The Compensation Committee engages an external compensation consultant to assist it by providing information, analysis and other advice relating to our executive compensation program. Since 2016 the Compensation Committee has engaged a third-party compensation consultant, Radford, part of the Rewards Solutions practice of Aon plc, or Radford, to advise on executive compensation matters. For 2020, the Compensation Committee again engaged Radford as its compensation consultant to advise on executive compensation matters including:

Radford reports directly to the Compensation Committee and to the Compensation Committee chairman. Radford also coordinates with our management for data collection and job matching for our executive officers. Radford did not provide any other services to us in 2020. The Compensation Committee has evaluated Radford’s independence pursuant to the listing standards of the relevant Nasdaq Listing Rules and SEC rules and has determined that no conflict of interest has arisen as a result of the work performed by Radford.

Role of Market Data

For purposes of comparing our executive compensation against the competitive market, the Compensation Committee reviews and considers the compensation levels and practices of a group of peer companies. This compensation peer group consists of public biotechnology companies that are similar to us in terms of revenue, market capitalization, stage of development, geographical location and number of employees. The Compensation Committee reviews our compensation peer group at least annually and makes adjustments to our peer group if necessary, taking into account changes in both our business and our peer companies’ businesses.

In August 2019, the Compensation Committee, with the assistance of Radford, reviewed and updated our compensation peer group for 2020, referred to as our 2020 peer group, considering the acquisition of certain peer companies, as applicable, the increase in our market capitalization, and the increase in our headcount, as reflected in the following criteria:

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Based on a review of the analysis prepared by Radford, the Compensation Committee approved the updated compensation peer group below for 2020.

 

 

The Compensation Committee uses market data—from our compensation peer group and from the Radford Global Life Sciences Compensation survey—as one factor in evaluating whether the compensation for our executive officers is competitive in the market. We generally align compensation to the 60^th percentile of our peer group. In addition, the Compensation Committee and the Board of Directors, as applicable, also rely on their own knowledge and judgment in evaluating market data and making compensation decisions.

Primary Elements of Executive Compensation Program

To achieve our compensation objectives, we provide executives with a total compensation package consisting primarily of the following fixed and variable compensation elements:

 

 

We do not have a specific policy regarding the percentage allocation between short-term and long-term, or fixed and variable, compensation elements.

Our executive officers, including our NEOs, are also eligible to participate in our standard employee benefit plans, such as our retirement, health and welfare benefits plans, on the same basis as our other employees. In addition, as described below, our executive officers, including our NEOs, are entitled to certain change-in-control payments and benefits, and our CEO is also entitled to certain termination payments and benefits not in connection with a change in control.

Base Salary

We pay base salaries to our executive officers, including our NEOs, as the fixed portion of their compensation to provide them with a reasonable degree of financial certainty, and to attract and retain top-performing individuals. At the time of hire, base salaries are determined for our executive officers, including our NEOs. Typically, at the beginning of each year, the Compensation Committee reviews base salaries for our executive officers, including our NEOs, to determine if an increase is appropriate. In addition, base salaries may be adjusted in the event of a promotion or significant change in responsibilities.

2020 Base Salary

In February 2020, the Compensation Committee reviewed the base salaries of our executive officers, including our NEOs. The Compensation Committee considered the factors described above under “Compensation-Setting Factors,” including an analysis prepared by Radford. The Compensation Committee recommendation aimed

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to generally align the base salaries of our executive officers, including our NEOs, to the 60^th percentile of our peer group, which resulted in a greater base salary adjustment for our CEO. Thereafter, the Compensation Committee recommended to the Board of Directors to adjust the annual base salaries of our NEOs set forth below, effective as of January 1, 2020, and the Board of Directors approved that recommendation.

The actual base salaries paid to our NEOs in 2020 are set forth in the “Summary Compensation Table” below.

 

 

Annual Cash Bonuses

We provide short-term incentive compensation opportunities to our executive officers, including our NEOs, in the form of annual cash bonuses to drive our short-term success under our senior executive cash incentive bonus plan. The annual cash bonus review provides that:

The Compensation Committee may also make certain immaterial rounding adjustments to the annual cash bonuses.

Corporate Performance Goals

At the end of each year, the Compensation Committee, after reviewing management’s proposal, establishes the annual corporate performance goals that it believes will be the most significant drivers of our short-term and long-term success. The corporate performance goals include target achievement dates based on calendar quarters. The Compensation Committee then recommends to the Board of Directors that it approve of the proposed corporate performance goals. Each corporate performance goal has a percentage weighting, and may include an additional percentage weighting for overachievement, based on the Compensation Committee’s assessment of the goal’s relative significance. Each executive officer, including each NEO, is eligible to receive an annual performance-based cash bonus based primarily on achievement of corporate performance goals as assessed by our Compensation Committee and Board of Directors with input on individual performance achievement from our CEO. Each executive officer, including each NEO, has a target annual bonus award amount, expressed as a percentage of each NEO’s base salary then in effect. After the fiscal year is completed, the Compensation Committee reviews actual performance against the stated goals and determines subjectively what it believes to be the appropriate level of cash bonus, if any, for our NEOs.

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Further, as a general matter, at the end of the year for which the corporate performance goals have been established, the Compensation Committee, after reviewing management’s self-assessment, evaluates our achievement of the prior year’s corporate performance goals, and our overall success for the year, and determines the total percentage achievement level for the Company. The Compensation Committee then recommends to the Board of Directors that it approve of such percentage achievement level for the Company.

In addition, our CEO evaluates the other executive officers’ individual performance, including the other NEOs’ individual performance, and makes recommendations for total percentage achievement level for such executive officer. Such evaluation is made, in part, by considering the performance relative to the executive officer’s functional attainments and impact on corporate goals, as well as other factors related to conformance with the Company’s core values and policies and the expected competencies and skills for the executive officer’s role. The Compensation Committee considers our CEO’s recommendations, and independently reviews and approves the total percentage achievement level for each of the executive officers and independently evaluates our CEO’s performance using similar criteria used in the CEO’s evaluation of the other executive officers. Since an executive officer’s total percentage achievement level is determined by taking the Company’s percentage achievement level for the most recently completed fiscal year together with the individual executive officer’s percentage achievement level awarded in connection with the annual performance review cycle, the total percentage achievement level for such executive officer could exceed the stated percentage achievement level for the Company. The Compensation Committee then recommends to the Board of Directors that it approve the total percentage achievement level for each executive officer, including our NEOs.

For 2020, the actual bonus amounts for our NEOs were reviewed and approved by our Compensation Committee and the Board of Directors.

Target Annual Bonuses

At the beginning of each year, the Compensation Committee reviews the annual target bonuses for our executive officers, including our NEOs and, if appropriate, makes a recommendation to the Board of Directors to adjust the annual target bonus for our NEOs. The Compensation Committee considers the factors described above and benchmarking analyses prepared by Radford, with an emphasis on market data from our compensation peer group for comparable positions. Target annual bonuses are the same for executive officers, including our NEOs, who are at the same level, and represent a specific percentage of annual base salary.

2020 Target Annual Bonus

In February 2020, the Compensation Committee reviewed the target annual bonuses of our executive officers, including our NEOs. The Compensation Committee considered the factors described in the “Annual Cash Bonus” above as well as the benchmarking analyses prepared by Radford, particularly the market data from the companies in the compensation peer group. The Compensation Committee recommendation aimed to generally align the target annual bonuses of our executive officers, including our NEOs, to the 60^th percentile of our peer group. Thereafter, the Compensation Committee recommended to the Board of Directors to approve of the 2020 target annual bonuses of our NEOs below, and the Board of Directors accepted that recommendation and approved the same.

 

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2020 Corporate Performance Goals

In November 2019, the Compensation Committee and the Board of Directors approved our 2020 annual corporate performance goals and weightings, as summarized below.

 

 

 

Our executive compensation program seeks to incentivize and reward strong corporate performance. In the fourth quarter of 2020, the Compensation Committee evaluated our achievement of the 2020 corporate performance goals, considering whether we had achieved each goal, the weighting established for each goal, management’s self-assessment, and our overall corporate performance in 2020. The Compensation Committee determined that we successfully achieved each of the 2020 corporate performance goals and exceeded such corporate goals up to 140% achievement level. Thereafter, the Compensation Committee recommended to the Board of Directors the foregoing, and the Board accepted that recommendation and approved the same.

Highlights of our 2020 corporate performance include:

 

Program Goals:

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Platform & Capabilities:

 

G&A Goals:

2020 Annual Cash Bonuses

In the first quarter of 2021, the Compensation Committee considered our CEO’s recommendations with respect to our executive officers, including our other NEOs, individual performance for 2020 and independently evaluated the same for each executive officer, including our CEO using similar criteria used in the CEO’s evaluation of the other executive officers. Thereafter, the Compensation Committee recommended to the Board of Directors the total percentage achievement level based on corporate performance goals and individual performance for each of our executive officers, including our other NEOs, and the Board accepted that recommendation and approved the same.

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The table below sets forth the target annual cash bonus each NEO was eligible to earn and the actual bonus amount earned by our NEOs for 2020.

 

 

Long-Term Incentive Compensation

We view long-term incentive compensation in the form of equity awards as an important element of our executive compensation program. The value of equity awards is directly related to share price appreciation over time, which incentivizes our executive officers to achieve long-term corporate goals and create long-term value for our shareholders. Equity awards also help us attract and retain top-performing executive officers in a competitive market.

As we mature as a company, we have evolved the mix of equity awards we grant and have started to deploy different equity vehicles consistent with the practice of our peer group companies. Specifically, we grant our employees, including our NEOs, a mix of stock options and RSUs. At the time of hire, equity awards are granted to our executive officers, including our NEOs. In addition, during our annual employee performance cycle, as a general practice, we grant a mix of equity awards to employees, including our NEOs, twice yearly with the initial award made during the third or fourth quarter of the year for which the equity grant is awarded and the remainder of the annual equity grant is awarded during the first quarter of the following year. We believe granting equity awards bi-annually will better deliver a more consistent equity value to our employees. As a general practice, the first tranche of awards are comprised of 100% stock options and equate roughly to one-third of a typical annual option grant and the second tranche of awards are comprised of a mix of equity awards roughly equating to two-thirds of a typical annual option grant, as well as restricted stock units adjusted for performance. For more information on our equity award grant policy, see “Other Compensation Policies and Practices—Equity Award Grant Policy” below.

At the beginning of each year, the Compensation Committee typically reviews the equity awards for our executive officers, including our NEOs, and determines, based upon performance in the prior year, the amounts of the annual equity awards it deems reasonable and appropriate based on the factors described above under “Compensation-Setting Factors” as well as the benchmarking analyses prepared by Radford. In addition, the Compensation Committee may deem it advisable to grant subsequent equity awards to our executive officers, in the event of a promotion, significant change in responsibilities, recognition for achievement of other performance milestones, recognition of other contributions to the Company, or for purposes of retention.

2020-2021 Annual Equity Awards Based on 2020 Performance

 

 

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Other Employee Benefits

Health and Welfare Benefits

Our executive officers, including our NEOs, are eligible to participate in the same employee benefit plans that are generally available to all of our employees, subject to the satisfaction of certain eligibility requirements, such as medical, dental, and life and disability insurance plans. We pay, on behalf of our employees, the premiums for health, life and disability insurance.

401(k) Savings Plan

Our U.S. executive officers, including our NEOs, are eligible to participate in a tax-qualified retirement plan, or the 401(k) Plan, on the same basis as our other employees. The 401(k) Plan provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees are able to defer eligible compensation subject to applicable annual Code limits. Employees’ pre-tax contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions. Employees are fully vested in their contributions. Our 401(k) Plan is intended to be qualified under Section 401(a) of the Code with our 401(k) Plan’s related trust intended to be tax exempt under Section 501(a) of the Code. As a tax-qualified retirement plan, contributions to our 401(k) Plan and earnings and matching amounts on those contributions are not taxable to the employees until distributed from our 401(k) Plan. We have the ability to make matching contributions under the 401(k) plan. Our 401(k)-match is competitive with other companies in our industry. We contributed approximately $1.9 million in matching contributions for 2020.

Employee Stock Purchase Plan

Pursuant to our employee stock purchase plan, employees, including our NEOs, have an opportunity to purchase our common shares at a discount on a tax-qualified basis through payroll deductions. The employee stock purchase plan is designed to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. The purpose of the employee stock purchase plan is to encourage our employees, including our NEOs, to become our shareholders and better align their interests with those of our other shareholders.

Special Perquisites

We do not provide special perquisites to our executive officers, including our NEOs.

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Employment Arrangements with our NEOs

We have entered into employment agreements with each of our NEOs in connection with their employment with us. These employment agreements provide for certain notice periods and severance benefits, as described in the “Employment Agreements with our NEOs” section below. The Compensation Committee believes that it is in the best interests of our shareholders to extend these benefits to our executives to reinforce and encourage retention and focus of shareholder value creation without distraction.

Other Compensation Policies and Practices

Equity Award Grant Policy

We have adopted an equity award grant policy that sets forth the process and timing for us to follow when we grant equity awards to our employees, including our executive officers, or advisors or consultants to us pursuant to any of our equity compensation plans. Pursuant to the policy, all grants of equity awards must be approved in advance by, as applicable, our Board of Directors, the Compensation Committee or, subject to the delegation requirements in the policy, our CEO.

In addition, our equity award grant policy sets forth the manner in which our equity awards will be priced. The dollar value of restricted stock and restricted stock units will be determined by multiplying the number of shares of our common stock underlying the award by the closing market price on the Nasdaq Global Market of a share of our common stock on the effective date of grant. The exercise price of all stock options will be at least equal to the closing market price on the Nasdaq Global Market of our common shares on the effective date of grant.

Policy Prohibiting Hedging and Pledging

Our Insider Trading Policy prohibits our executive officers, the non-employee members of our Board of Directors and certain designated employees who in the course of the performance of their duties have access to material, nonpublic information regarding our company from engaging in the following transactions:

As of the date of this proxy statement, none of our NEOs had previously sought or obtained approval from the Audit Committee to engage in any hedging or pledging transaction involving our securities.

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Tax and Accounting Considerations

Deductibility of Executive Compensation

Generally, Section 162(m) of the Code, or Section 162(m), disallows a federal income tax deduction for public corporations of remuneration in excess of $1 million paid in any fiscal year to certain specified executive officers. For taxable years beginning before January 1, 2018 (i) these executive officers consisted of a public corporation’s chief executive officer and up to three other executive officers (other than the chief financial officer) whose compensation is required to be disclosed to shareholders under the Securities Exchange Act of 1934 because they are our most highly-compensated executive officers and (ii) qualifying “performance-based compensation” was not subject to this deduction limit if specified requirements are met.

Pursuant to the Tax Cuts and Jobs Act of 2017, which was signed into law on December 22, 2017, or the Tax Act, for taxable years beginning after December 31, 2017, the remuneration of a public corporation’s chief financial officer is also subject to the deduction limit. In addition, subject to certain transition rules (which apply to remuneration provided pursuant to written binding contracts which were in effect on November 2, 2017 and which are not subsequently modified in any material respect), for taxable years beginning after December 31, 2017, the exemption from the deduction limit for “performance-based compensation” is no longer available. Consequently, for fiscal years beginning after December 31, 2017, all remuneration in excess of $1 million paid to a specified executive will not be deductible.

In designing our executive compensation program and determining the compensation of our executive officers, including our NEOs, the Compensation Committee considers a variety of factors, including the potential impact of the Section 162(m) deduction limit. However, the Compensation Committee will not necessarily limit executive compensation to that which is or may be deductible under Section 162(m). The deductibility of some types of compensation depends upon the timing of an executive officer’s vesting or exercise of previously granted rights. Further, interpretations of and changes in the tax laws, and other factors beyond the Compensation Committee’s control also affect the deductibility of compensation. The Compensation Committee will consider various alternatives to preserving the deductibility of compensation payments and benefits to the extent consistent with its compensation goals.

To maintain flexibility to compensate our executive officers in a manner designed to promote our short-term and long-term corporate goals, the Compensation Committee has not adopted a policy that all compensation must be deductible. The Compensation Committee believes that our shareholders’ interests are best served if its discretion and flexibility in awarding compensation is not restricted in order to allow such compensation to be consistent with the goals of our executive compensation program, even though some compensation awards may result in non-deductible compensation expense.

Accounting for Stock-Based Compensation

We follow the Financial Accounting Standard Board’s Accounting Standards Codification Topic 718, or FASB ASC Topic 718, for our stock-based compensation awards. FASB ASC Topic 718 requires us to measure the compensation expense for all share-based payment awards made to our employees and non-employee members of our Board of Directors, including stock options to purchase shares of our common stock and other stock awards, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the executive compensation tables required by the federal securities laws, even though the recipient of the awards may never realize any value from their awards.

Taxation of “Parachute” Payments

Sections 280G and 4999 of the Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to significant additional U.S. taxes if they receive payments or benefits in connection with a change in control of the company that exceeds certain prescribed limits, and that the company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We have not agreed to provide any executive officer, including any NEO, with a “gross-up” or other reimbursement payment for any tax liability that the executive officer might owe as a result of the application of Sections 280G or 4999 of the Code.

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Section 409A of the Internal Revenue Code

Section 409A of the Code imposes additional significant taxes in the event that an executive officer, director or service provider receives “deferred compensation” that does not satisfy the requirements of Section 409A of the Code. Although we do not maintain a traditional nonqualified deferred compensation plan, Section 409A of the Code does apply to certain severance arrangements, bonus arrangements and equity awards. We structure all our severance arrangements, bonus arrangements and equity awards in a manner to either avoid the application of Section 409A or, to the extent doing so is not possible, to comply with the applicable requirements of Section 409A of the Code.

NEO Compensation Tables

Summary Compensation Table

The following table sets forth information regarding total compensation awarded to, earned by and paid to each of our NEOs during the fiscal years ended December 31, 2020, 2019 and 2018, to the extent he was a NEO in such year.

 

 

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Grants of Plan-Based Awards for Fiscal Year 2020

The following table sets forth the individual awards made to each of our NEOs during 2020. For a description of the types of awards indicated below, please see our “Compensation Discussion and Analysis” above:

 

 

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Outstanding Equity Awards at Fiscal Year End

The following table sets forth certain information with respect to outstanding equity awards held by each of our NEOs as of December 31, 2020.

 

 

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Option Exercises and Stock Vested in Fiscal Year 2020

The following table sets forth the number of shares acquired and the value realized upon exercises of stock options and vesting of restricted stock units, or RSUs, during the fiscal year ended December 31, 2020 by each of our NEOs.

 

 

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Potential Payments on Termination or Change in Control

Under the terms of the employment agreements with our NEOs, as described above, each NEO is entitled to receive certain change-in-control payments and benefits if the NEO is terminated by us or our acquirer or successor without cause or resigns for good reason (as such terms are defined in the employment agreements), in either case, within stipulated periods after the consummation of a sale event, subject to a NEO’s execution and non-revocation of a severance agreement, including a general release of claims. The following table quantifies the potential payments that would have become due to our NEOs assuming that one of the triggering events described under their respective employment agreements occurred as of December 31, 2020.

 

 

 

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Employment Arrangements with our NEOs

We have entered into employment agreements with each of our NEO’s in connection with their employment with us. These employment agreements provide for “at will” employment.

Samarth Kulkarni. In October 2017, we entered into a second amended and restated employment agreement with Dr. Kulkarni. As of January 1, 2021, Dr. Kulkarni receives an annual base salary in an amount equal to $670,000, and Dr. Kulkarni’s annual target bonus is currently set at not less than 65% of his salary. Dr. Kulkarni is also eligible to participate in our employee benefit plans on the same terms as other executives.

Under Dr. Kulkarni’s employment agreement, in the case of a termination by us without cause or by Dr. Kulkarni for good reason (in each case, as defined under the employment agreement), he is entitled to twelve months’ notice, or the notice period. During such notice period, and subject to Dr. Kulkarni’s execution of a release of claims in favor of us, Dr. Kulkarni would continue to receive base salary, benefits and, except to the extent the applicable equity award agreements provided otherwise, continued vesting during such period and would be entitled to receive an amount equal to his target bonus for the year in which the termination occurs, prorated based upon the number of days in the notice period.

During the notice period, Dr. Kulkarni will be placed on garden leave on the 15^th day following receipt of the notice (or such earlier date as we may determine in its sole discretion), and we will be required to release Dr. Kulkarni from his working obligations for the remainder of the notice period. During this period of garden leave, Dr. Kulkarni may enter into other employment or consulting arrangements and accept board positions with other companies (subject to certain non-compete obligations). However, Dr. Kulkarni will continue to be entitled to all compensation under his employment agreement through the garden leave period.

In the case of a notice of termination by us without cause or by Dr. Kulkarni for good reason, in each case, that occurs on or within 12 months following a change in control, all vesting or similar restrictions on any equity awards held by Dr. Kulkarni will vest and become exercisable or nonforfeitable upon the date of such termination, subject to his execution of a release. However, in the event we determine at the time of the change in control, based upon an opinion of counsel, that the acceleration described in the preceding sentence is not permissible under applicable law, all stock options and stock-based awards held by Dr. Kulkarni as of the date of the change in control, would vest and become exercisable or nonforfeitable as of the date of the change in control.

Tony W. Ho. In August 2017, and we entered into an employment agreement with Dr. Ho. As of January 1, 2021, Dr. Ho receives an annual base salary in an amount equal to $467,000, and Dr. Ho’s annual target bonus is currently set at not less than 45% of his salary. Dr. Ho is also eligible to participate in our employee benefit plans on the same terms as other executives.

Under Dr. Ho’s employment agreement, in the case of a termination by us without cause or by Dr. Ho for good reason (in each case, as defined under the employment agreement), he is entitled to six months’ notice, or the notice period; provided, that, in the case of a notice of termination by us without cause or by Dr. Ho for good reason that occurs within 12 months following a change in control, the notice period shall be 12 months. During such notice period, and subject to Dr. Ho’s execution of a release of claims in favor of us, Dr. Ho would continue to receive base salary, benefits and continued vesting during such period and would be entitled to receive an amount equal to his target bonus for the year in which the termination occurs, prorated based upon the number of days in the notice period.

During the notice period, Dr. Ho will be placed on garden leave on the 15^th day following receipt of the notice (or such earlier date as we may determine in its sole discretion), and we will be required to release Dr. Ho from his working obligations for the remainder of the notice period. During this period of garden leave, Dr. Ho may enter into other employment or consulting arrangements and accept board positions with other companies (subject to certain non-compete obligations). However, Dr. Ho will continue to be entitled to all compensation under his employment agreement through the garden leave period.

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In the case of a notice of termination by us without cause or by Dr. Ho for good reason, in each case, that occurs on or within 12 months following a change in control, all vesting or similar restrictions on any equity awards held by Dr. Ho will vest and become exercisable or nonforfeitable upon the date of such termination, subject to his execution of a release. However, in the event we determine at the time of the change in control, based upon an opinion of counsel, that the acceleration described in the preceding sentence is not permissible under applicable law, all stock options and stock-based awards held by Dr. Ho as of the date of the change in control, would vest and become exercisable or nonforfeitable as of the date of the change in control.

James R. Kasinger. In May 2017, we entered into an employment agreement with Mr. Kasinger. As of January 1, 2021, Mr. Kasinger receives an annual base salary in an amount equal to $425,000, and Mr. Kasinger’s annual target bonus is currently set at 40% of his annual base salary. Mr. Kasinger is also eligible to participate in our employee benefit plans on the same terms as other executives.

Under Mr. Kasinger’s employment agreement, in the case of a termination by us without cause or by Mr. Kasinger for good reason (in each case, as defined under the employment agreement), he is entitled to six months’ notice, or the notice period; provided, that, in the case of a notice of termination by us without cause or by Mr. Kasinger for good reason that occurs within 12 months following a change in control, the notice period shall be 12 months. During such notice period, and subject to Mr. Kasinger’s execution of a release of claims in favor of us, Mr. Kasinger would continue to receive base salary, benefits and continued vesting during such period and would be entitled to receive an amount equal to his target bonus for the year in which the termination occurs, prorated based upon the number of days in the notice period.

During the notice period, Mr. Kasinger will be placed on garden leave on the 15^th day following receipt of the notice (or such earlier date as we may determine in its sole discretion), and we will be required to release Mr. Kasinger from his working obligations for the remainder of the notice period. During this period of garden leave, Mr. Kasinger may enter into other employment or consulting arrangements and accept board positions with other companies (subject to certain non-compete obligations). However, Mr. Kasinger will continue to be entitled to all compensation under his employment agreement through the garden leave period.

In the case of a notice of termination by us without cause or by Mr. Kasinger for good reason, in each case, that occurs on or within 12 months following a change in control, all vesting or similar restrictions on any equity awards held by Mr. Kasinger will vest and become exercisable or nonforfeitable upon the date of such termination, subject to his execution of a release. However, in the event we determine at the time of the change in control, based upon an opinion of counsel, that the acceleration described in the preceding sentence is not permissible under applicable law, all stock options and stock-based awards held by Mr. Kasinger as of the date of the change in control, would vest and become exercisable or nonforfeitable as of the date of the change in control.

Lawrence O. Klein. In January 2019, we entered into an employment agreement with Dr. Klein. As of January 1, 2021, Dr. Klein receives an annual base salary in an amount equal to $450,000, and Dr. Klein’s annual target bonus is currently set at 45% of his annual base salary. Dr. Klein is also eligible to participate in our employee benefit plans on the same terms as other executives.

Under Dr. Klein’s employment agreement, in the case of a termination by us without cause or by Dr. Klein for good reason (in each case, as defined under the employment agreement), he is entitled to six months’ notice, or the notice period; provided, that, in the case of a notice of termination by us without cause or by Dr. Klein for good reason that occurs within 12 months following a change in control, the notice period shall be 12 months. During such notice period, and subject to Dr. Klein’s execution of a release of claims in favor of us, Dr. Klein would continue to receive base salary, benefits and continued vesting during such period and would be entitled to receive an amount equal to his target bonus for the year in which the termination occurs, prorated based upon the number of days in the notice period.

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During the notice period, Dr. Klein will be placed on administrative leave on the 15^th day following receipt of the notice (or such earlier date as we may determine in its sole discretion), and we will be required to release Dr. Klein from his working obligations for the remainder of the notice period. During this period of administrative leave, Dr. Klein may enter into other employment or consulting arrangements and accept board positions with other companies (subject to certain non-compete obligations). However, Dr. Klein will continue to be entitled to all compensation under his employment agreement through the administrative leave period.

In the case of a notice of termination by us without cause or by Dr. Klein for good reason, in each case, that occurs on or within 12 months following a change in control, all vesting or similar restrictions on any equity awards held by Dr. Klein will vest and become exercisable or nonforfeitable upon the date of such termination, subject to his execution of a release. However, in the event we determine at the time of the change in control, based upon an opinion of counsel, that the acceleration described in the preceding sentence is not permissible under applicable law, all stock options and stock-based awards held by Dr. Klein as of the date of the change in control, would vest and become exercisable or nonforfeitable as of the date of the change in control.

Michael J. Tomsicek. In November 2017, we entered into an employment agreement with Mr. Tomsicek. As of January 1, 2021, Mr. Tomsicek receives an annual base salary in an amount equal to $437,000, and Mr. Tomsicek’s annual target bonus is currently set at 40% of his annual base salary. Mr. Tomsicek is also eligible to participate in our employee benefit plans on the same terms as other executives.

Under Mr. Tomsicek’s employment agreement, in the case of a termination by us without cause or by Mr. Tomsicek for good reason (in each case, as defined under the employment agreement), he is entitled to six months’ notice, or the notice period; provided, that, in the case of a notice of termination by us without cause or by Mr. Tomsicek for good reason that occurs within 12 months following a change in control, the notice period shall be 12 months. During such notice period, and subject to Mr. Tomsicek’s execution of a release of claims in favor of us, Mr. Tomsicek would continue to receive base salary, benefits and continued vesting during such period and would be entitled to receive an amount equal to his target bonus for the year in which the termination occurs, prorated based upon the number of days in the notice period.

During the notice period, Mr. Tomsicek will be placed on garden leave on the 15^th day following receipt of the notice (or such earlier date as we may determine in its sole discretion), and we will be required to release Mr. Tomsicek from his working obligations for the remainder of the notice period. During this period of garden leave, Mr. Tomsicek may enter into other employment or consulting arrangements and accept board positions with other companies (subject to certain non-compete obligations). However, Mr. Tomsicek will continue to be entitled to all compensation under his employment agreement through the garden leave period.

In the case of a notice of termination by us without cause or by Mr. Tomsicek for good reason, in each case, that occurs on or within 12 months following a change in control, all vesting or similar restrictions on any equity awards held by Mr. Tomsicek will vest and become exercisable or nonforfeitable upon the date of such termination, subject to his execution of a release. However, in the event we determine at the time of the change in control, based upon an opinion of counsel, that the acceleration described in the preceding sentence is not permissible under applicable law, all stock options and stock-based awards held by Mr. Tomsicek as of the date of the change in control, would vest and become exercisable or nonforfeitable as of the date of the change in control.

Other Agreements

Employee Confidentiality, Non-Competition, Non-solicitation And Assignment Agreements

Each of our NEOs has entered into an agreement with respect to confidential information and assignment of inventions. Among other things, this agreement obligates each NEO to refrain from disclosing any of our proprietary information received during the course of employment and to assign to us any inventions conceived or developed during the course of employment. In addition, our NEOs are also subject to certain non-competition and/or non-solicitation obligations as set forth in their respective employment agreements.

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Indemnification Agreements

We have entered into indemnification agreements with each of our directors and executive officers. In addition, subject to Swiss law, Article 29 of our Articles of Association provides for indemnification of the existing and former members of the Board of Directors, executive management and their heirs, executors and administrators, against liabilities arising in connection with the performance of their duties in such capacity, and permits us to advance the expenses of defending any act, suit or proceeding to our directors and executive management.

Furthermore, under general principles of Swiss employment law, an employer may be required to indemnify an employee against losses and expenses incurred by such employee in the proper execution of their duties under the employment agreement with the employer.  In addition, as is customary for Swiss corporations and in accordance with Article 698, subsection 2, item 5 of the Swiss Code of Obligations, shareholders are requested to discharge the members of the Board of Directors and the Executive Committee from liability for the past business year. Discharge pursuant to the proposed resolution is only effective with respect to facts that have been disclosed to shareholders and only binds shareholders who either voted in favor of the proposal or who subsequently acquired shares with knowledge that the shareholders have approved this proposal.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

 

 

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COMPENSATION COMMITTEE REPORT

The following Compensation Committee Report is not considered proxy solicitation material and is not deemed filed with the Securities and Exchange Commission. Notwithstanding anything to the contrary set forth in any of our filings made under the Securities Act of 1933 or the Exchange Act that might incorporate our filings under those statutes, the Compensation Committee Report shall not be incorporated by reference into any of our prior filings or into any of our future filings under those statutes.

The Compensation Committee of the Board of Directors has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with the Company’s management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors, and the Board of Directors approved, that the Compensation Discussion and Analysis be included in this Proxy Statement for the Annual General Meeting and incorporated by reference in the Company’s Annual Report for the fiscal year ended December 31, 2020.

By the Compensation Committee of the Board of Directors of CRISPR Therapeutics AG.

 

 

 

 

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CEO PAY RATIO DISCLOSURE

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the total annual compensation of our employees and the total annual compensation of Samarth Kulkarni, our CEO. This information is being provided for compliance purposes and is a reasonable estimate calculated in a manner consistent with SEC rules, based on our internal records and the methodology described below. The SEC rules for identifying the median compensated employee allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported below, as other companies have different employee populations and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. Neither the Compensation Committee nor management of the Company used the CEO Pay Ratio measure in making compensation decisions.

 

Pay Ratio Disclosure

For 2020, our last completed fiscal year:

Based on this information, for 2020, the ratio of the total annual compensation of Dr. Kulkarni, our CEO, to the total annual compensation of our median employee was approximately 29 to 1.

 

Methodology

We selected December 31, 2020, which is within the last three months of our fiscal year, as the date upon which we would identify the median employee. As of December 31, 2020, we had 410 employees globally, including 405 U.S. employees and five non-U.S. employees. In determining the identity of our median employee, we excluded five non-U.S. employees from the following countries, which in aggregate represents less than 5% of our workforce (the number of employees excluded from the country is indicated following the country name): Switzerland (three) and the U.K. (two). After excluding the countries and employees described above, we determined the identity of our median employee from a population of 405 U.S. employees.

Under the relevant rules, we were required to identify the median employee by use of a “consistently applied compensation measure,” or CACM.  We chose a CACM that closely approximates the annual target total direct compensation of our employees. We identified the “median employee” by looking at annual base pay and the annual target cash incentive opportunity for all active U.S. employees as of that date. We did not make any cost-of-living adjustments and did not annualize compensation.

After applying our CACM methodology, we identified the median employee. Once the median employee was identified, we calculated the median employee’s annual target total direct compensation in accordance with the requirements of the Summary Compensation Table.

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DIRECTOR COMPENSATION

We have adopted a non-employee director compensation policy, which is designed to provide a total compensation package that enables us to attract and retain, on a long-term basis, high caliber non-employee directors. Under the non-employee director compensation policy, our non-employee directors are compensated as follows:

Upon the recommendation of the Compensation Committee, the Board of Directors approved and adopted a revised non-employee director compensation policy in March 2021. Following the 2021 Annual General Meeting, our non-employee directors will be compensated as follows:

The stock options granted to our non-employee directors will have an exercise price equal to the fair market value of our common shares on the date of grant and will expire ten years after the date of grant. The initial stock options granted to new non-employee directors will vest in equal monthly installments over a three-year period following the grant date, subject to such director’s continued service on the Board of Directors. The annual stock options granted to our non-employee directors will vest in twelve equal monthly installments and will vest in full upon the earlier of the first anniversary of the date of grant or the date of the following annual general meeting of shareholders, subject to such director’s continued service on the Board of Directors. Any initial stock options and annual stock options granted to each of our non-employee directors will automatically accelerate and become fully vested and exercisable upon the non-employee director’s death or disability or upon a sale event (as defined in the equity plan).

All cash fees will be paid quarterly, in arrears, or upon the earlier resignation or removal of the non-employee director. The amount of each payment will be prorated for any portion of a quarter that a non-employee director is not serving on our Board of Directors, based on the number of calendar days served by such non-employee director.

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Each non-employee director is also entitled to reimbursement for reasonable travel and other expenses incurred in connection with attending meetings of the Board of Directors and any committee on which he or she serves.

In addition, pursuant to Swiss law and Article 18 of the Articles of Association of the Company, our shareholders must annually approve (i) the non-performance-related compensation of our Board of Directors for the next term of office and (ii) any additional compensation of the Board of Directors for the preceding business year. At our 2020 annual general meeting, shareholders approved the proposed compensation for the Board of Directors. For more information regarding the binding votes on aggregate compensation for our Board of Directors, see “Proposal 6 – Approval of Compensation for the Board of Directors and the Executive Committee.”

Director Compensation Table

The following table sets forth a summary of the compensation for our non-employee directors during 2020.

 

 

 

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SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table provides information about the securities authorized for issuance under our equity compensation plans as of December 31, 2020. As of December 31, 2020, we had four equity compensation plans, each of which was approved by our shareholders: the 2015 Stock Option and Grant Plan, or 2015 Plan, the Amended and Restated 2016 Stock Option and Incentive Plan, or 2016 Plan, the 2016 Employee Stock Purchase Plan, or 2016 ESPP, and the 2018 Stock Option and Incentive Plan, as amended, or 2018 Plan.

Equity Compensation Plan Information

 

 

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REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

Our Audit Committee has reviewed our audited consolidated financial statements and the statutory financial statements for the year ended December 31, 2020 and discussed them with our management and our independent registered public accounting firm, Ernst & Young LLP and our statutory auditor, Ernst & Young AG.

Our Audit Committee has also received from, and discussed with, Ernst & Young LLP various communications that Ernst & Young LLP is required to provide to our Audit Committee, including the matters required to be discussed by the statement on Auditing Standard No. 1301, “Communication with Audit Committees,” as adopted by the Public Company Accounting Oversight Board.

In addition, Ernst & Young LLP provided our Audit Committee with the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with the Company’s independent registered public accounting firm their independence.

Based on the review and discussions referred to above, our Audit Committee recommended to our Board of Directors that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2020.

By the Audit Committee of the Board of Directors of CRISPR Therapeutics AG.

 

 

 

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MATTERS TO BE VOTED ON

Proposal 1: Approval of the Annual Report, the Consolidated Financial Statements and the Statutory Financial Statements of CRISPR Therapeutics AG

Explanation

The consolidated financial statements and the statutory financial statements of CRISPR Therapeutics AG for the year ended December 31, 2020 are contained in the Company’s Annual Report, which has been made available to all registered shareholders on or before the date of mailing of this proxy statement. The Annual Report also contains the consolidated and statutory financial statements including the reports to these statements of the Company’s statutory auditor, the Company’s Compensation Report prepared in compliance with the Swiss Ordinance Against Excessive Compensation by Public Corporations, or the Minder Ordinance, and the statutory auditor’s report on the Compensation Report, additional information on the Company’s business, organization and strategy, organization and strategy. Copies of the Annual Report are available on the Internet at ir.crisprtx.com.

Under Swiss law, the Annual Report, the consolidated financial statements and the statutory financial statements of Swiss companies must be submitted to shareholders for approval or disapproval at each annual general meeting. In the event of a negative vote on this proposal by shareholders, the Board of Directors will call an extraordinary general meeting of shareholders for reconsideration of this proposal by shareholders.

Ernst & Young AG, as the Company’s statutory auditors, issued an unqualified recommendation to the 2021 Annual General Meeting that the consolidated and statutory financial statements of CRISPR Therapeutics AG for the year ended December 31, 2020 be approved. Ernst & Young AG expressed their opinion that the “consolidated financial statements for the year ended December 31, 2020 present fairly, in all material respects, the financial position, the results of operations and the cash flows in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and comply with Swiss law.”

Further Ernst & Young AG expressed their opinion and confirmed that the consolidated financial statements, the statutory financial statements and the proposed appropriation of financial results comply with Swiss law and the Articles of Association of CRISPR Therapeutics AG. Ernst & Young AG also expressed their opinion that the Compensation Report complies with the Minder Ordinance and other applicable Swiss law.

Voting Requirement to Approve Proposal

The affirmative “FOR” vote of a majority of the votes cast at the 2021 Annual General Meeting, not counting unmarked, invalid and non-exercisable votes and abstentions.

Recommendation

The Board of Directors recommends a vote “FOR” approval of the Annual Report, the consolidated financial statements and the statutory financial statements of the Company for the year ended December 31, 2020.

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Proposal 2: Approval of the Appropriation of Financial Results

Explanation

Under Swiss law, the appropriation of the financial results as set forth in the Company’s statutory financial statements must be submitted to shareholders for approval at each annual general meeting. The Board of Directors proposes to carry forward the net loss resulting from the following appropriation of financial results:

 

 

Voting Requirement to Approve Proposal

The affirmative “FOR” vote of a majority of the votes cast at the 2021 Annual General Meeting, not counting unmarked, invalid and non-exercisable votes and abstentions.

Recommendation

The Board of Directors recommends a vote “FOR” approval of the proposed appropriation of retained earnings with respect to the year ended December 31, 2020.

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Proposal 3: Discharge of the Members of the Board of Directors and Executive Committee

Explanation

As is customary for Swiss corporations and in accordance with Article 698, subsection 2, item 5 of the Swiss Code of Obligations, shareholders are requested to release the members of the Board of Directors and Executive Committee from liability for the business year ended December 31, 2020. Discharge pursuant to the proposed resolution is only effective with respect to facts that have been disclosed to shareholders (including through any publicly available information, whether or not included in our filings with the SEC) and only binds shareholders who either voted in favor of the proposal or who subsequently acquired shares with knowledge that the shareholders have approved this proposal. In addition, shareholders who vote against this proposal, abstain from voting on this proposal, do not vote on this proposal, or acquire their shares without knowledge of the approval of this proposal, may bring, as a plaintiff, any claims in a shareholder derivative suit within six months after the approval of the proposal. After the expiration of the six-month period, such shareholders will generally no longer have the right to bring, as a plaintiff, claims in shareholder derivative suits against members of the Board of Directors or the Executive Committee with respect to activities during the business year 2020.

Voting Requirement to Approve Proposal

The affirmative “FOR” vote of a majority of the votes cast at the 2021 Annual General Meeting, not counting unmarked, invalid and non-exercisable votes and abstentions and not counting the votes of any member of the Board of Directors or of any of the members of the Executive Committee.

Recommendation

The Board of Directors recommends a vote “FOR” the proposal to release the members of the Board of Directors and the Executive Committee from liability for activities during the year ended December 31, 2020.

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Proposal 4: Election of Nine Directors

Explanation

Our Board of Directors is presently composed of eight members. Each director as well as the Chairman must be elected annually and individually for a term extending until completion of the next annual general meeting of shareholders.

At the recommendation of the Nominating Committee, our Board of Directors has nominated the nine individuals below to serve as directors for a one-year term, beginning in each case as of the 2021 Annual General Meeting and ending at the closing of the 2022 annual general meeting. Eight of the nine nominees currently serve as members of our Board of Directors. Their current terms expire upon the closing of the 2021 Annual General Meeting.

Under Swiss law, board members may only be elected by shareholders. If the individuals below are elected or re-elected, as applicable, our Board of Directors will be composed of nine members. Our Board of Directors has no reason to believe that any of our nominees will be unwilling or unable to serve if elected as a director. There will be a separate vote on each nominee.

For further information on our Board of Directors, including the current members of the board, the proposed member of the board, the committees of the board, the means by which the board exercises supervision of our executive officers, and other information, please see “Board of Directors and Corporate Governance—Election of Directors” starting on page 6.

4.a Re-election of Rodger Novak, M.D., as member and Chairman

Proposal: The Board of Directors proposes that Rodger Novak, M.D., be re-elected to the Board of Directors as member and Chairman for a one-year term ending at the closing of the 2022 annual general meeting.

For biographical information and qualifications of Dr. Novak, please refer to “Board of Directors and Corporate Governance—Election of Directors” on page 6.

4.b Re-election of Samarth Kulkarni, Ph.D.

Proposal: The Board of Directors proposes that Samarth Kulkarni, Ph.D., be re-elected to the Board of Directors for a one-year term ending at the closing of the 2022 annual general meeting.

For biographical information and qualifications of Dr. Kulkarni, please refer to “Board of Directors and Corporate Governance—Election of Directors” on page 8.

4.c Re-election of Ali Behbahani, M.D.

Proposal: The Board of Directors proposes that Ali Behbahani, M.D., be re-elected to the Board of Directors for a one-year term ending at the closing of the 2022 annual general meeting.

For biographical information and qualifications of Dr. Behbahani, please refer to “Board of Directors and Corporate Governance—Election of Directors” on page 7.

4.d Re-election of Bradley Bolzon, Ph.D.

Proposal: The Board of Directors proposes that Bradley Bolzon, Ph.D., be re-elected to the Board of Directors for a one-year term ending at the closing of the 2022 annual general meeting.

For biographical information and qualifications of Dr. Bolzon, please refer to “Board of Directors and Corporate Governance—Election of Directors” on page 7.

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4.e Re-election of Simeon J. George, M.D.

Proposal: The Board of Directors proposes that Simeon J. George, M.D., be re-elected to the Board of Directors for a one-year term ending at the closing of the 2022 annual general meeting.

For biographical information and qualifications of Dr. George, please refer to “Board of Directors and Corporate Governance—Election of Directors” on pages 7.

4.f Re-election of John T. Greene

Proposal: The Board of Directors proposes that John T. Greene, be re-elected to the Board of Directors for a one-year term ending at the closing of the 2022 annual general meeting.

For biographical information and qualifications of Mr. Greene, please refer to “Board of Directors and Corporate Governance—Election of Directors” on page 8.

4.g Re-election of Katherine A. High, M.D.

Proposal: The Board of Directors proposes that Katherine A. High, M.D., be re-elected to the Board of Directors for a one-year term ending at the closing of the 2022 annual general meeting.

For biographical information and qualifications of Dr. High, please refer to “Board of Directors and Corporate Governance—Election of Directors” on page 8.

4.h Re-election of Douglas A. Treco, Ph.D.

Proposal: The Board of Directors proposes that Douglas A. Treco, Ph.D., be re-elected to the Board of Directors for a one-year term ending at the closing of the 2022 annual general meeting.

For biographical information and qualifications of Dr. Treco, please refer to “Board of Directors and Corporate Governance—Election of Directors” on page 8.

4.i Election of H Edward Fleming Jr., M.D.

Proposal: The Board of Directors proposes that H Edward Fleming Jr., M.D., be elected to the Board of Directors for a one-year term ending at the closing of the 2022 annual general meeting.

For biographical information and qualifications of Dr. Fleming, please refer to “Board of Directors and Corporate Governance—Election of Directors” on page 7.

Voting Requirement to Approve Proposals

The affirmative “FOR” vote for each nominee of a majority of the votes cast at the 2021 Annual General Meeting, not counting unmarked, invalid and non-exercisable votes and abstentions.

Recommendation

The Board of Directors recommends a vote “FOR” the election and re-election of each nominee to the Board of Directors.

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Proposal 5: Election of Members of the Compensation Committee

Explanation

Our Compensation Committee is presently composed of three members, of whom all are standing for re-election to the Board of Directors and to the Compensation Committee. In accordance with Swiss law, the members of the Compensation Committee are to be elected annually and individually by the shareholders. Only members of the Board of Directors can be elected as members of the Compensation Committee.

At the recommendation of the Nominating Committee, our Board of Directors has nominated the three individuals below to serve as members of the Compensation Committee for a term of one year. All of the nominees currently serve as members of the Compensation Committee and, as required by our Compensation Committee charter, all of the nominees are independent in accordance with the requirements of the listing standards of the Nasdaq Stock Market, or Nasdaq, the outside director definition of Section 162(m) of the Code, the definition of a “non-employee director” for purposes of Rule 16b-3 promulgated by the SEC and Rule 10C-1(b)(1) of the Exchange Act.

The term of office for each member of the Compensation Committee ends at the closing of the next annual general meeting. There will be a separate vote on each nominee.

5.a Re-election of Ali Behbahani, M.D.

Proposal: The Board of Directors proposes that Ali Behbahani, M.D. be re-elected to the Compensation Committee for a one-year term ending at the closing of the 2022 annual general meeting.

For biographical information and qualifications of Dr. Behbahani, please refer to “Board of Directors and Corporate Governance—Election of Directors” on page 7.

5.b Re-election of Simeon J. George, M.D.

Proposal: The Board of Directors proposes that Simeon J. George, M.D., be re-elected to the Compensation Committee for a one-year term ending at the closing of the 2022 annual general meeting.

For biographical information and qualifications of Dr. George, please refer to “Board of Directors and Corporate Governance—Election of Directors” on pages 7.

5.c Re-Election of John T. Greene

Proposal: The Board of Directors proposes that John T. Greene be re-elected to the Compensation Committee for a one-year term ending at the closing of the 2022 annual general meeting.

For biographical information and qualifications of Mr. Greene, please refer to “Board of Directors and Corporate Governance—Election of Directors” on page 8.

Voting Requirement to Approve Proposals

The affirmative “FOR” vote of a majority of the votes cast at the 2021 Annual General Meeting, not counting unmarked, invalid and non-exercisable votes and abstentions.

Recommendation

The Board of Directors recommends a vote “FOR” the election and re-election of each of nominees to the Compensation Committee.

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Proposal 6: Approval of the Compensation for the Board of Directors and the Members of the Executive Committee

Explanation

Pursuant to Swiss law and Article 18 of the Articles of Association of the Company, the shareholders must annually approve (i) the non-performance-related compensation of the Board of Directors for the next term of office, (ii) any additional compensation of the Board of Directors for the preceding business year, (iii) the non-performance-related compensation of the Executive Committee for the 12-month period starting on July 1 following the Annual General Meeting, (iv) the variable compensation for the Executive Committee for the current year and (v) the grant of options or shares in the Company to the Board of Directors and the Executive Committee. The compensation numbers below include an amount of 10% for unforeseen contingencies and possible compensation increases.

This proposal, as it relates to the compensation of the Board of Directors, is based on the Board of Directors consisting of nine directors, of whom seven are non-employee directors. Only the non-employee directors are included in this proposal. Our president and chief executive officer, who are also members of the Board of Directors, do not receive any compensation for their roles as a director.

Pursuant to Article 6.1 of the Organizational Rules of the Company, the Executive Committee consists of the chief executive officer, the chief financial officer, the chief operating officer, the chief scientific officer, the chief legal officer and such other officers expressly designated by the Board of Directors to be members of the Executive Committee. As such, our Executive Committee is comprised of the following persons: Tony Ho, M.D., James R. Kasinger, Lawrence O. Klein, Ph.D., Samarth Kulkarni, Ph.D., Rodger Novak, M.D., and Michael Tomsicek.

6.a Binding vote on total non-performance-related compensation for members of the Board of Directors from the 2021 Annual General Meeting to the 2022 annual general meeting of shareholders.

The Board of Directors proposes that shareholders approve the total maximum amount of non-performance-related compensation for the members of the Board of Directors covering the period from the 2021 Annual General Meeting to the 2022 annual general meeting of shareholders, i.e., USD $507,000 (cash base compensation plus social security costs).

6.b Binding vote on equity for members of the Board of Directors from the 2021 Annual General Meeting to the 2022 annual general meeting of shareholders.

The Board of Directors proposes that shareholders approve the maximum grant of equity or equity linked instruments for the members of the Board of Directors covering the period from the 2021 Annual General Meeting to the 2022 annual general meeting of shareholders with maximum value of USD $11,738,100 (equity value plus social security costs).

6.c Binding vote on total non-performance-related compensation for members of the Executive Committee from July 1, 2021 to June 30, 2022.

The Board of Directors proposes that shareholders approve the total maximum amount of non-performance-related cash compensation for the members of the Executive Committee covering the period from July 1, 2021 to June 30, 2022, i.e., USD $3,514,207 (cash base compensation plus social security costs).

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6.d Binding vote on total variable compensation for members of the Executive Committee for the current year ending December 31, 2021.

The Board of Directors proposes that shareholders approve the total maximum amount of variable compensation for the members of the Executive Committee for the current year ending December 31, 2021, i.e., USD $2,693,933 (cash compensation plus social security costs).

6.e Binding vote on equity for members of the Executive Committee from the 2021 Annual General Meeting to the 2022 annual general meeting of shareholders.

The Board of Directors proposes that shareholders approve the maximum of equity or equity linked instruments for the members of the Executive Committee covering the period from the 2021 Annual General Meeting to the 2022 annual general meeting of shareholders with maximum value of USD $55,827,593 (equity value plus social security costs).

Voting Requirement to Approve Proposals

The affirmative “FOR” vote of a majority of the votes cast at the 2021 Annual General Meeting, not counting unmarked, invalid and non-exercisable votes and abstentions.

Recommendation

The Board of Directors recommends a vote “FOR” the approval of the compensation of the Board of Directors and members of the Executive Committee as set forth above.

 

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Proposal 7: Increase of the Conditional Share Capital for Employee Equity Plans

Explanation

As a company organized under Swiss corporate law, our Articles of Association set forth the maximum number of shares (referred to as conditional share capital) authorized by our shareholders for the issuance of common shares in connection with the exercise of subscription or similar rights (whether presently outstanding or to be granted in the future) by employees, consultants and other persons providing services to the Company or any subsidiary and members of our Board of Directors. Under Swiss corporate law, we must have sufficient shares available, either through conditional share capital, treasury shares or a combination thereof, to cover the rights to acquire our common shares under equity incentive awards at the time the equity incentive awards are exercised and shares are issued.

At the 2020 annual general meeting, shareholders approved an amendment to the Company’s 2018 Stock Option and Incentive Plan, as amended, or the 2018 Plan, which, among other things, increased the number of common shares reserved for issuance under the 2018 Plan by 5,000,000 common shares; however, shareholders did not approve the proposed corresponding increase of the conditional share capital to cover any future share issuances due to the exercise of equity incentive awards under the Company’s employee equity plans. As a result, the Company is limited in its ability to fully utilize its employee equity plans and provide equity incentive awards to its employees that are otherwise permitted.

Accordingly, in light of the requirements of Swiss corporate law and the business purposes outlined below, the Board of Directors is again proposing that shareholders authorize a corresponding increase of the conditional share capital by 5,000,000 common shares to cover any future share issuances due to the exercise of equity incentive awards under the Company’s employee equity plans.

The Board of Directors or any designee thereof will specify the precise conditions for issuing shares due to the exercise of equity incentive awards at the time such equity awards are granted. The conditions determined by the Board of Directors or any designee thereof will include the issue price of the shares. If this proposal is approved, no further authorization from the shareholders will be necessary or solicited prior to issuing shares for options that have been granted and exercised within the limits in this proposal. In accordance with our Articles of Association, shareholders’ advanced subscription rights provided for by Swiss statutory corporate law will be excluded with regard to these shares.

Rationale for Increasing Conditional Share Capital for Employee Equity Plans

Equity incentive awards are an important component of the compensation of our executive and non-executive employees and our non-employee directors. The Board of Directors believes that the Company must continue to offer a competitive equity compensation program in order to attract, retain and motivate the talented and qualified employees and non-employee directors necessary for our continued growth and success. In addition, the Board of Directors believes that share-based incentive awards play a critical role in the long-term success of the Company by encouraging and enabling employees, officers, non-employee directors and other key persons of the Company and its subsidiaries upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business to acquire a proprietary interest in the Company. Our employee compensation philosophy reflects broad-based eligibility for equity incentive awards for high performing employees. By doing so, we link the interests of those employees with those of our shareholders and motivate our employees to act as owners of the business. The Board of Directors believes that providing such persons with a direct stake in the Company will assure that the interests of such individuals are closely aligned with those of the Company and its shareholders, thereby stimulating their efforts on the Company’s behalf and strengthening their desire to remain with the Company. Simply put, having sufficient shares reserved for issuance under our Articles of Association is critical to our ongoing effort to build shareholder value.

The Board of Directors manages the utilization of employee conditional share capital by limiting the number of equity incentive awards granted annually. The Compensation Committee, on behalf of the Board of Directors, carefully monitors our annual net burn rate, total dilution and equity expense in order to maximize shareholder value by granting only the number of equity incentive awards that it believes are reasonably necessary and appropriate to attract, reward and retain our employees, officers and non-employee directors.

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Under Swiss statutory corporate law, we must have sufficient shares available to cover the rights to acquire our common shares at the time such rights are exercised. Therefore, it is best practices for the employee conditional share capital amount stipulated in our Articles of Association to be sufficient to cover both (i) the total number of equity incentive awards currently outstanding and (ii) the total number of equity incentive awards that may be issued in the future. If the employee conditional capital amount stipulated in our Articles of Association is not sufficient, we will be limited in our ability to fully utilize our employee equity plans and provide equity incentive awards to our employees that are otherwise permitted. Currently, the stated amount of employee conditional share capital in our Articles of Association is insufficient to cover the aggregate amount of the 8,996,072 outstanding equity incentive awards and the 11,772,590 common shares reserved for issuance under our employee equity plans (in each case, as of December 31, 2020).  As noted above, Swiss corporate law requires that we have sufficient shares available, either through conditional share capital, treasury shares or a combination thereof, to cover the rights to acquire our common shares under equity incentive awards at the time the securities are issued.  This proposal addresses the shortfall between the employee conditional share capital in our Articles of Association and the number of common shares available for future grant under the 2018 Plan.

If this proposal to increase the conditional share capital for employee equity plans is approved, the current Article 3c para. 1 of the Articles of Association will be amended as follows:

Current version:

 

New version (changes in italics):

 

Voting Requirement to Approve Proposal

The affirmative “FOR” vote of at least two thirds of the represented share votes at the 2021 Annual General Meeting.

Recommendation

Our Board of Directors recommends a vote “FOR” the Increase of the Conditional Share Capital for Employee Equity Plans.

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Proposal 8: Approval of Increasing the Maximum Size of the Board of Directors

Explanation

The Board of Directors proposes to increase the maximum size of the Board of Directors to 10 members and to amend art. 20 of the Articles of Association to reflect the foregoing as set forth below. The Board of Directors, at its meeting on March 11, 2021, passed a resolution to increase the maximum size of the Board of Directors to 10, subject to shareholder approval. The Board believes an increase in its size will provide the opportunity and flexibility to continue to build a Board of Directors with diverse talents and perspectives, as well as demonstrated experience and expertise. Moreover, the Board of Directors believes an increase in its size will serve to enhance critical thinking and thoughtful discussion in the boardroom.

Current version:

 

New version (changes in italics):

 

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Voting Requirement to Approve Proposal

The affirmative “FOR” vote of at least two thirds of the represented share votes at the 2021 Annual General Meeting

Recommendation

Our Board of Directors recommends a vote “FOR” the approval of an increase to the maximum size of the Board of Directors.

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Proposal 9: Approval of Increasing the Maximum Number of Authorized Share Capital and Extending the Date by which the Board of Directors may Increase the Share Capital.

Explanation

As a company organized under Swiss corporate law, our Articles of Association sets forth (i) the maximum number of authorized share capital that the Company may issue in connection with financing activities, as well as strategic transactions and acquisitions and (ii) the date by which the Company may issue such authorized share capital in connection those financing activities.  The Board of Directors proposes to increase our authorized share capital to provide for the issuance of up to 39,316,975 common shares, and to extend the date by which the Board of Directors may increase the share capital to June 10, 2023, and to amend art. 3a para. 1 of the Articles of Association to reflect the foregoing as set forth below.

We have a history of operating losses and expect to continue to incur operating losses for the foreseeable future. We expect that we will need to continue to raise additional capital including through the sale of our capital shares to fund our continued growth with the objective of increasing shareholder value. For example, since our 2020 annual general meeting we completed several financing transactions including an underwritten public offering of an aggregate of 7.4 million common shares for aggregate net proceeds of $489.7 million and, as of March 15, 2021, we issued and sold an aggregate of 4.6 million common shares under our at-the-market financing facility for aggregate net proceeds of approximately $668.0 million. During this same period, our market value increased from $59.70 (closing price on the date of our 2020 annual general meeting) to $133.60 (closing price as of March 15, 2021). Moreover, in addition to financing activities, we may benefit from deploying our share capital as we pursue strategic licensing transactions, collaborations, and acquisitions, which we believe will grow shareholder value and continue to position us as a leading gene editing company.

It is important to note that the approval of this proposal does not mean that the maximum number of share capital will, in fact, be issued.  Rather, approval of this proposal gives the Board of Directors, in its discretion, the ability to raise additional funds through one or more financing transactions (subject to the aforementioned maximum number of authorized share capital that may be issued) to, inter alia, fund the Company’s business and operations.

We have no current plans, agreements, arrangements or understandings, whether written or oral, relating to the issuance of the additional authorized common shares that will become available as a result of the proposed amendment of art. 3a para. 1 of the Articles of Association.

Pursuant to our existing Articles of Association, our Board of Directors is authorized to issue shares of capital stock representing this share capital for a period of two years from our annual general meeting. We have historically sought, and intend to continue to seek, authorization at each annual general meeting to extend the period of time our Board of Directors may issue additional capital stock for an additional year.

Current version:

 

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New version (changes in italics):

 

Voting Requirement to Approve Proposal

The affirmative “FOR” vote of at least two thirds of the represented share votes at the 2021 Annual General Meeting.

Recommendation

Our Board of Directors recommends a vote “FOR” the increase of the maximum number of authorized share capital and the extension of the date by which the Board of Directors may increase authorized share capital

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Proposal 10: Re-Election of Independent Voting Rights Representative

Explanation

Pursuant to the “Minder Ordinance”, Swiss law requires that the independent representative of the shareholders (Independent Representative) be elected on the occasion of each annual general meeting for a one-year term ending at the closing of the following annual general meeting.

The Board of Directors proposes that lic. iur. Marius Meier, Attorney at Law, Lautengartenstrasse 7, CH-4052 Basel, be re-elected as Independent Representative for a one-year term ending at the closing of the 2022 annual general meeting.

Shareholders may either represent their shares themselves or have them represented by a third party, whether or not a shareholder, if the latter is given a written proxy. In accordance with Swiss law, each shareholder may be represented at the general meeting by the Independent Representative, Mr. Meier, or by a third-party proxy. Mr. Meier is a notary public and has served as the Independent Representative at the Company’s previous annual general meetings.

Under Swiss corporate law, the Independent Representative must satisfy strict independence requirements. In the absence of instructions, the Independent Representative must abstain from voting. General voting instructions can be given with respect to a particular general meeting of shareholders with respect to proposals and agenda items that have not been disclosed in the invitation to the general meeting.

Voting Requirement to Approve Proposal

The affirmative “FOR” vote of a majority of the votes cast at the 2021 Annual General Meeting, not counting unmarked, invalid and non-exercisable votes and abstentions.

Recommendation

Our Board of Directors recommends a vote “FOR” the re-election of Mr. Meier as Independent Representative.

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Proposal 11: Re-election of Ernst & Young AG as our statutory auditor for the term office of one year and the election of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2021

Explanation

Upon recommendation of the Audit Committee, the Board of Directors proposes that Ernst & Young AG be re-elected as statutory auditor for the Company and Ernst & Young LLP be re-elected as the Company’s independent registered public accounting firm for the year ending December 31, 2021. Ernst & Young AG assumed its first audit mandate for the Company during the year ended December 31, 2013 and Ernst & Young LLP assumed its first audit mandate for the Company during the year ended December 31, 2015. Pursuant to Swiss law, the shareholders must elect the auditors of the Company.

Information on the fees paid by the Company to Ernst & Young AG and LLP, the Company’s auditors and independent registered public accounting firm for the years ended December 31, 2020 and December 31, 2019 is set forth below. Additional information regarding Ernst & Young AG and LLP, is included in the “Report of the Audit Committee.”

Members of Ernst & Young AG will be present at the annual general meeting, will have the opportunity to make a statement, and will be available to respond to appropriate questions you may ask.

Audit Fees and Services

The following table summarizes the fees of Ernst & Young billed to us for each of the last two years.

 

 

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Pre-Approval Policies and Procedures

Our Audit Committee has adopted procedures requiring the pre-approval of all non-audit services performed by our independent registered public accounting firm in order to assure that these services do not impair the auditor’s independence. These procedures generally approve the performance of specific services subject to a cost limit for all such services. This general approval is reviewed, and if necessary modified, at least annually. Management must obtain the specific prior approval of the Audit Committee for each engagement of the independent registered public accounting firm to perform other audit-related or other non-audit services. The Audit Committee does not delegate its responsibility to approve services performed by the independent registered public accounting firm to any member of management.

The standard applied by the Audit Committee in determining whether to grant approval of any type of non-audit service, or of any specific engagement to perform a non-audit service, is whether the services to be performed, the compensation to be paid therefore and other related factors are consistent with the independent registered public accounting firm’s independence under guidelines of the SEC and applicable professional standards. Relevant considerations include whether the work product is likely to be subject to, or implicated in, audit procedures during the audit of our financial statements, whether the independent registered public accounting firm would be functioning in the role of management or in an advocacy role, whether the independent registered public accounting firm’s performance of the service would enhance our ability to manage or control risk or improve audit quality, whether such performance would increase efficiency because of the independent registered public accounting firm’s familiarity with our business, personnel, culture, systems, risk profile and other factors, and whether the amount of fees involved, or the non-audit services portion of the total fees payable to the independent registered public accounting firm in the period would tend to reduce the independent registered public accounting firm’s ability to exercise independent judgment in performing the audit.

Voting Requirement to Approve Proposal

The affirmative “FOR” vote of a majority of the votes cast at the 2021 Annual General Meeting, not counting unmarked, invalid and non-exercisable votes and abstentions.

Recommendation

The Board of Directors recommends a vote “FOR” the election of Ernst & Young AG as the statutory auditor of the Company and the election of Ernst & Young LLP as the Company’s independent registered public accounting firm, each for the year ending December 31, 2021.

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TRANSACTION OF OTHER BUSINESS

The Board of Directors knows of no other matters that will be presented for consideration at the 2021 Annual General Meeting as of the date of this Proxy Statement. If neither our chairman nor any other member of the Board of Directors is able to preside at the 2021 Annual General Meeting in light of the global spread of the SARS-CoV-2 virus (coronavirus) and the COVID-19 pandemic, the Board of Directors may make an ad hoc proposal for the election of an ad hoc chairperson of the 2021 Annual General Meeting. If any other matters are properly brought before the 2021 Annual General Meeting or there is a motion to adjourn or postpone such meeting, the independent voting rights representative named in the accompanying proxy intends to vote on such matters in accordance with their best judgment.

 

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STOCK OWNERSHIP AND REPORTING

Security Ownership of Certain Beneficial Owners and Management

Unless otherwise provided below, the following table sets forth information regarding beneficial ownership of our common shares as of March 15, 2021 by:

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 shares. Our common shares subject to options that are currently exercisable or will become exercisable within 60 days after March 15, 2021 are considered outstanding and beneficially owned by the person holding the options 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, to our knowledge, the persons and entities in this table have sole voting and investing power with respect to all of the common shares beneficially owned by them, subject to applicable community property laws. The inclusion herein of any shares as beneficially owned does not constitute an admission of beneficial ownership.

The column entitled “Percentage of Shares Beneficially Owned” is based on a total of 75,612,582 common shares outstanding as of March 15, 2021. Except as otherwise set forth below, the address of the beneficial owner is c/o CRISPR Therapeutics AG, Baarerstrasse 14, 6300 Zug, Switzerland.

 

 

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Restrictions on Voting Rights

Pursuant to Article 4 of our current Articles of Association, each share is entitled to one vote. Our current Articles of Association contain, however, certain restrictions on voting rights.

No person or entity shall be registered with voting rights over its shares (including “Controlled Shares” as defined below) that exceed 5% or more of the registered share capital recorded in the commercial register of the Canton of Zug. This restriction of registration also applies to persons acquiring shares through the exercise of conversion and/or option rights granted in connection with bonds or similar instruments, including convertible debt instruments. Furthermore, this restriction of registration applies to persons who hold some or all of their shares through nominees.

Persons who do not expressly declare in the registration application that they are holding the shares on their own account (nominees) shall forthwith be recorded in the share register as shareholders with voting rights up to a maximum of 3 percent of the share capital. Beyond that limit, registered shares of nominees shall only be entered as voting if the nominees in question confirm in writing that they are willing to disclose the names, addresses and shareholdings of the persons on whose account they hold 0.5 percent or more of the share capital.

When exercising voting rights, no person or entity can accumulate voting rights over its shares (including over “Controlled Shares” as defined below) of more than 15% of the registered share capital recorded in the commercial register of the Canton of Zug. This restriction on exercise of voting rights does not apply to the exercise of voting rights by the independent voting rights representative.

“Controlled Shares” in reference to any individual or entity means:

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Furthermore, with respect to our authorized share capital, the Board of Directors is authorized to withdraw or limit the preemptive rights of the shareholders and to allot them to third parties following a shareholder or a group of shareholders acting in concert having accumulated shareholdings in excess of 15% of the share capital registered in the commercial register without having submitted to the other shareholders a takeover offer recommended by the Board of Directors, or for the defense of an actual, threatened or potential takeover bid, in relation to which the Board of Directors, upon consultation with an independent financial adviser retained by it, has not recommended to the shareholders acceptance on the basis that the Board of Directors has not found the takeover bid to be financially fair to the shareholders.

 

 

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OTHER MATTERS

As of the date of this proxy statement, we know of no matter not specifically referred to above as to which any action is expected to be taken at the 2021s Annual General Meeting. The persons named as proxies will vote the proxies, insofar as they are not otherwise instructed, regarding such other matters and the transaction of such other business as may be properly brought before the meeting, as seems to them to be in the best interest of our Company and our shareholders.

Shareholder Proposals and Directors Nominations

Under our Articles of Association, one or more registered shareholders who together represent shares representing at least the lesser of (i) ten percent of our issued share capital or (ii) an aggregate par value of one million Swiss francs may demand that an item be placed on the agenda of a meeting of shareholders. Any such proposal must be included by the Board of Directors in our materials for the meeting. A request for inclusion of an item on the agenda must be requested in writing delivered to or mailed and received at the registered office of the Company at least 120 calendar days before the first anniversary of the date that the Company’s proxy statement was released to shareholders in connection with the previous year’s annual general meeting. As such, the deadline for inclusion of a shareholder proposal for the 2021 Annual General Meeting was December 28, 2020. With respect to the 2022 annual general meeting of shareholders, the deadline to receive proposals for the agenda is expected to be                  .

In addition, if you are a registered shareholder and satisfy the shareholding requirements under Rule 14a-8 of the Exchange Act, you may submit a proposal for consideration by the Board of Directors for inclusion in the 2022 annual general meeting agenda by delivering a request and a description of the proposal to the General Counsel and Secretary of the Company at secretary@crisprtx.com no later than                      , which is 120 calendar days before the anniversary date of the company’s proxy statement released to shareholders in connection with the previous year’s annual general meeting. The proposal will need to comply with Rule 14a-8 of the Exchange Act, which lists the requirements for the inclusion of shareholder proposals in company-sponsored proxy materials under U.S. securities laws.

Nominations of director candidates by registered shareholders must follow the rules for shareholder proposals above. Assuming that appropriate biographical and background material has been provided on a timely basis, the Nominating Committee will evaluate shareholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for candidates submitted by others. If the board determines to nominate a shareholder-recommended candidate and recommends his or her election, then his or her name will be included in our proxy card for the next annual general meeting.

Householding of Annual General Meeting Materials

Some brokers and other nominee record holders may be “householding” our proxy materials. This means a single notice and, if applicable, the proxy materials will be delivered to multiple shareholders sharing an address unless contrary instructions have been received. We will promptly deliver a separate copy of the notice and, if applicable, the proxy materials and our annual report to shareholders, which consists of our Annual Report on Form 10-K for the year ended December 31, 2020, to you if you write or call us at CRISPR Therapeutics AG, Baarerstrasse 14, 6300 Zug, Switzerland, Attn: General Counsel and Secretary, telephone +41 (0)41 561 32 77 and CRISPR Therapeutics, Inc., 610 Main Street, Cambridge, Massachusetts 02139, Attn: General Counsel and Secretary, telephone: +1 617 315-4600. If you would like to receive separate copies of our proxy materials and annual reports in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker, or other nominee record holder, or you may contact us at the above address and telephone number.

 

 

 

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YOUR VOTE IS IMPORTANT! PLEASE VOTE BY: P.O. BOX 8016, CARY, NC 27512-9903 INTERNET Go To: www.proxypush.com/CRSP • Cast your vote online • Have your Proxy Card ready • Follow the simple instructions to record your vote PHONE Call 1-866-286-3217 • Use any touch-tone telephone • Have your Proxy Card ready • Follow the simple recorded instructions MAIL • Mark, sign and date your Proxy Card • Fold and return your Proxy Card in the postage-paid envelope provided CRISPR Therapeutics AG Annual General Meeting of Shareholders For Stockholders as of record on April 16, 2021 DATE: Thursday, June 10, 2021 TIME: 08:00 AM, Central European Summer Time PLACE: Walder Wyss Ltd., Seefeldstrasse 123, 8008 Zurich, Switzerland This proxy is being solicited on behalf of the Board of Directors The undersigned hereby appoints Marius Meier, as a proxy of the undersigned, or the Named Proxy, with full power of substitution, to vote all of the common shares, or the Shares, of CRISPR Therapeutics AG that the undersigned may be entitled to vote at the Annual General Meeting of Shareholders of CRISPR Therapeutics AG, or the Company, to be held at the offices of Walder Wyss Ltd, Seefeldstrasse 123, 8008 Zurich, Switzerland at 8:00 a.m. Central European Summer Time (2:00 a.m. Eastern Daylight Time) on Thursday, June 10, 2021, and at any and all postponements and adjournments thereof, with all powers that the undersigned would possess if personally present, upon and in respect of the matters indicated on the reverse side, in accordance with the following instructions. If you sign the proxy without otherwise indicating a vote on the proposals, this proxy will be voted “FOR” each of the nominees and theproposals listed on the reverse side. As to any other matter that may properly come before the meeting (including a possible ad hoc proposal regarding the election of an ad hoc chairperson of the 2021 Annual General Meeting in light of the spread of the SARS-CoV-2 virus (coronavirus) and the COVID–19 (pandemic) and all postponements and adjournments thereof, the Shares will be voted by the proxy in accordance with the proposal or recommendation of the Board of Directors. If specific instructions are indicated, this proxy will be voted in accordance therewith. CRISPR THERAPEUTICS AG’s Board of Directors recommends that shareholders vote “FOR” Proposals 1-11. Please read the “Important Notice Regarding COVID-19 (Coronavirus) in Switzerland” on page 6 of the Notice of Invitation to 2021 AnnualGeneral Meeting of Shareholders. In connection with the spread of the SARS-CoV-2 virus (coronavirus) and the COVID-19 pandemic, the Federal Assembly of the Swiss Confederation has enacted, on 25 September 2020, the Swiss Federal Act on the Statutory Principles for Federal Council Ordinances on Combating the COVID-19 Epidemic, and based thereupon, the Swiss Federal Council has issued, on 13 June 2020, the Ordinance 3 on Measures to Combat the Coronavirus, in each case as amended from time to time (also referred to herein as the COVID-19 Regime). Pursuant to the COVID-19 Regime, the Board of Directors has decided that shareholders can exercise their rights at the 2021 Annual General Meeting exclusively through the independent voting rights representative, as in-person attendance of shareholders at the 2021 Annual General Meeting will not be possible. The undersigned hereby agrees that questions, requests for information, proposals for motions, ad hoc proposals and statements made for the record by shareholders may only be submitted in writing or electronically in advance to the 2021 Annual General Meeting. If you have any questions about the 2021 Annual General Meeting, please contact Michael Esposito, our Executive Director, Controller. He may be contacted before June 9, 2021 at 610 Main Street, Cambridge, Massachusetts 02139; telephone: +1 617-315-4600. Alternatively, any questions may be directed by e-mail to secretary@crisprtx.com. You are encouraged to specify your choice by marking the appropriate box (SEE REVERSE SIDE) but you need not mark any box if you wish to vote in accordance with the Board of Directors’ recommendation. The Named Proxy cannot vote your shares unless you sign (on the reverse side) and return this card. PLEASE BE SURE TO SIGN AND DATE THIS PROXY CARD AND MARK ON THE REVERSE SIDE

 

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CRISPR Therapeutics AG Annual General Meeting of Shareholders Please make your marks like this: X Use dark black pencil or pen only THE BOARD OF DIRECTORS RECOMMENDS A VOTE: FOR ON PROPOSALS 1, 2, 3, 4.a, 4.b, 4.c, 4.d, 4.e, 4.f, 4.g, 4.h, 4.i, 5.a, 5.b, 5.c, 6.a, 6.b, 6.c, 6.d, 6.e, 7, 8, 9, 10 AND 11 PROPOSALS 1. The approval of the annual report, the consolidated financial statements and the statutory financial statements of the Company for the year ended December 31, 2020. 2. The approval of the appropriation of financial results. 3. The discharge of the members of the Board of Directors and Executive Committee. 4. The election and re-election of the members to the Board of Directors. 4.a Re-election of Rodger Novak, M.D., as member and Chairman 4.b Re-election of Samarth Kulkarni, Ph.D. 4.c Re-election of Ali Behbahani, M.D. 4.d Re-election of Bradley Bolzon, Ph.D. 4.e Re-election of Simeon J. George, M.D. 4.f Re-election of John T. Greene 4.g Re-election of Katherine A. High, M.D. 4.h Re-election of Douglas A. Treco, Ph.D. 4.i Election of H Edward Fleming Jr., M.D. 5. The re-election of the members of the Compensation Committee. 5.a Re-election of Ali Behbahani, M.D. 5.b Re-election of Simeon J. George, M.D. 5.c Re-election of John T. Greene 6. The approval of the compensation for the Board of Directors and the Executive Committee. 6.a Binding vote on total non-performance-related compensation for members of the Board of Directors from the 2021 Annual General Meeting to the 2022 annual general meeting of shareholders. 6.b Binding vote on equity for members of the Board of Directors from the 2021 Annual General Meeting to the 2022 annual general meeting of shareholders. 6.c Binding vote on total non-performance-related compensation for members of the Executive Committee from July 1, 2021 to June 30, 2022. 6.d Binding vote on total variable compensation for members of the Executive Committee for the current year ending December 31, 2021. 6.e Binding vote on equity for members of the Executive Committee from the 2021 Annual General Meeting to the 2022 annual general meeting shareholders. 7. The approval of an increase in the Conditional Share Capital for Employee Equity Plans. 8. The approval of increasing the maximum size of the Board of Directors. 9. The approval of increasing the maximum number of authorized share capital and extending the date by which the Board of Directors may increase the share capital. 10. The re-election of the independent voting rights representative. 11. The re-election of the auditors. NOTE: The Board of Directors will consider and act upon any other business which may properly come before the 2021 Annual General Meeting. Authorized Signatures -Must be completed for your instructions to be executed. BOARD OF DIRECTORS FOR AGAINST ABSTAIN RECOMMENDS FOR FOR FOR FOR  FOR  FOR  FOR  FOR  FOR  FOR  FOR  FOR  FOR  FOR  FOR  FOR  FOR  FOR  FOR  FOR  FOR  FOR  FOR  FOR  FOR Please sign exactly as your name(s) appears on your account. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy/Vote Form. Signature (and Title if applicable) Date Signature (if held jointly) Date

ogo Control Number YOUR VOTE IS IMPORTANT! PLEASE VOTE BY: INTERNET Go To: www.proxypush.com/CRSP Š Cast your vote online. Š Have your Proxy Card ready. Š Follow the simple instructions to record your vote. PHONE Call 866-286-3217 Š Use any touch-tone telephone. Š Have your Proxy Card ready. Š Follow the simple recorded instructions. MAIL Š Mark, sign and date your Proxy card. Š Fold and return your Proxy Card In the postage-paid envelope provided with the address below showing through the window. ANNUAL GENERAL MEETING PROXY CARD A PROPOSALS 1. The approval of the annual report, the consolidated financial statements and the statutory financial statements of the Company for the year ended December 31, 2019. The Board of Directors proposes to approve the annual report, the consolidated financial statements and the statutory financial statements of the Company for the year ended December 31, 2019 and to take note of the reports of the auditors. Copies of these documents are available for download at www.proxydocs.com/ CRSP. For ‘ Against ‘ Abstain ‘ 2. The approval of the appropriation of financial results. The Board of Directors proposes to carry forward the net income resulting from the appropriation of financial results as follows: For ‘ Against ‘ Abstain ‘ Proposed Appropriation of Net Income: in Swiss Francs (CHF) Balance brought forward from previous years CHF (264,902,686) Net income for the period (on a stand-alone unconsolidated basis): CHF 8,323,716 Total accumulated net loss: CHF (256,578,970) Resolution proposed by the Board of Directors: - RESOLVED, that the net income for the period of CHF 8,323,716 shall be carried forward. 3. The discharge of the members of the Board of Directors and Executive Committee. The Board of Directors proposes that the members of the Board of Directors and the Executive Committee of the Company be discharged from personal liability for the business year ended December 31, 2019. For ‘ Against ‘ Abstain ‘ 4. The election and re-election of the members to the Board of Directors. The Board of Directors proposes that Rodger Novak, M.D. be reelected as member of the Board of Directors and Chairman of the Board of Directors and that each of Samarth Kulkarni, Ph.D., Ali Behbahani, M.D., Bradley Bolzon, Ph.D., Simeon J. George, M.D., John T. Greene, Katherine A. High, M.D., and Douglas A. Treco, Ph.D. be elected or re-elected, as appropriate, as directors, each for a term extending until completion of the 2021 annual general meeting of shareholders. 4.a Re-election of Rodger Novak, M.D., as member and Chairman For ‘ Against ‘ Abstain ‘ 4.b Re-election of Samarth Kulkarni, Ph.D. ‘ ‘ ‘ 4.c Re-election of Ali Behbahani, M.D. ‘ ‘ ‘ 4.d Re-election of Bradley Bolzon, Ph.D. ‘ ‘ ‘ 4.e Re-election of Simeon J. George, M.D. ‘ ‘ ‘ 4.f Re-election of John T. Greene ‘ ‘ ‘ 4.g Re-election of Katherine A. High, M.D. ‘ ‘ ‘ 4.h Election of Douglas A. Treco, Ph.D. ‘ ‘ ‘ 5. The election and re-election of the members of the Compensation Committee. The Board of Directors proposes to elect or re-elect, as appropriate, each of Ali Behbahani, M.D., Simeon J. George, M.D., and John T. Greene as members of the Compensation Committee of the Board of Directors, each for a term extending until completion of the 2021 annual general meeting of the shareholders. 5.a Election of Ali Behbahani, M.D. For ‘ Against ‘ Abstain ‘ 5.b Re-election of Simeon J. George, M.D. ‘ ‘ ‘ 5.c Re-election of John T. Greene‘ ‘ ‘ 6. The approval of the compensation for the Board of Directors and the Executive Committee. The Board of Directors proposes to hold the following separate votes on the non-performance-related and the variable compensation of the Board of Directors and the Executive Committee: 6.a Binding vote on total nonperformance- related compensation for members of the Board of Directors from the 2020 Annual General Meeting to the 2021 annual general meeting of shareholders. The Board of Directors proposes that shareholders approve the total maximum amount of non-performancerelated compensation for the members of the Board of Directors covering the period from the 2020 Annual General Meeting to the 2021 annual general meeting of shareholders, i.e., USD $320,000 (cash base compensation plus social security costs). For ‘ Against ‘ Abstain ‘ 6.b Binding vote on equity for members of the Board of Directors from the 2020 Annual General Meeting to the 2021 annual general meeting of shareholders. The Board of Directors proposes that shareholders approve the maximum grant of equity or equity linked instruments for the members of the Board of Directors covering the period from the 2020 Annual General Meeting to the 2021 annual general meeting of shareholders with maximum value of USD $5,911,650 (equity grant date value plus social security costs). For ‘ Against ‘ Abstain ‘

 

oting Items Change of Address—Please print your new address below. Comment—Please print your comments below. Meeting Attendance Mark the box to the right if you plan to attend the Annual General Meeting ‘ C Authorized Signatures—This section must be completed for your vote to be counted.—Date and Sign Below NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title as such. Date (mm/dd/yyyy)—Please print date below. Signature 1—Please keep signature within the box. Signature 2—Please keep signature within box. / /