PROPOSAL 03: APPROVAL OF SECOND AMENDMENT AND
RESTATEMENT OF LONG-TERM INCENTIVE PLAN |
MATERIAL TERMS OF THE NEW PLAN SUBMITTED FOR
SHAREHOLDER APPROVAL
The following description of the material terms
of the New Plan is qualified in its entirety by the terms of the plan document, which is attached as Appendix B to this proxy statement.
Available Shares. As of April 14, 2020,
the record date for this meeting, there were 10,150,052 shares of common stock remaining available for issuance under the Current
Plan. Utilizing management’s projections, which are based on past practices and projected headcount, the Compensation Committee
has determined that the 12 million shares newly authorized under New Plan being submitted for shareholder approval (along with
the remaining 10,150,052 shares authorized under the Current Plan) should satisfy the Company’s equity compensation needs
for at least the next three years. If the New Plan is not approved by shareholders, to achieve our equity compensation objectives
we will only be able to utilize the remaining 10,150,052 shares of common stock (as of the record date for this meeting) available
under the Current Plan (plus any shares subject to awards which are returned to the plan upon the expiration, forfeiture, surrender,
exchange, cancellation, or termination of previously granted awards). We believe that the current share pool would be insufficient
to satisfy our expected recruiting and compensation needs. If the New Plan is approved by shareholders, an aggregate of 22,150,052
shares will be available for grants under the New Plan. Shares of common stock underlying or issued pursuant to equity awards previously
granted under the Current Plan, the Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (the “2014 Plan”),
or the Regeneron Pharmaceuticals, Inc. Second Amended and Restated 2000 Long-Term Incentive Plan (the “2000 Plan”)
that would otherwise have again become available under the Current Plan, the 2014 Plan, or the 2000 Plan upon the expiration, forfeiture,
surrender, exchange, cancellation, or termination of such previously granted awards, in whole or in part, for any reason, including
the surrender of shares to pay the exercise price or satisfy withholding tax obligations in connection with the grant, exercise,
or vesting of all or part of an award will be added to the pool of shares available for grant under the New Plan. As of the record
date for this meeting, there were 26,047,513 shares subject to outstanding awards (stock options, RSAs, RSUs, and PSUs) previously
issued under the Current Plan, the 2014 Plan, and the 2000 Plan. All of the shares reserved and available for issuance under the
New Plan, the various limits set forth in the New Plan, and the awards made thereunder will generally be subject to equitable adjustment
upon the occurrence of any stock dividend or other distribution, recapitalization, stock split, subdivision, reorganization, merger,
consolidation, combination, repurchase, or share exchange, or other similar corporate transaction or event. Shares issued pursuant
to awards that are assumed by us in corporate transactions will not count against the shares available under the New Plan.
Plan Term. The term of the New Plan runs
through April 3, 2030 (although awards granted prior to such date may continue in effect beyond that date in accordance with their
respective terms).
Administration. The New Plan is to be
administered by the Compensation Committee of the board of directors. Each member of the Compensation Committee is intended to
be a “Non-Employee Director” (within the meaning of Rule 16b-3 under the Exchange Act) and to otherwise qualify as
independent to the extent required under applicable law, regulations, and listing standards. The New Plan allows the Compensation
Committee to delegate to one or more executive officers of the Company the authority to exercise any of the Compensation Committee’s
responsibilities under the New Plan, including the authority to grant awards thereunder (subject to certain limitations set forth
in the New Plan).
Amendment; Term. The New Plan may be
amended by the board of directors, subject to shareholder approval where necessary, to satisfy certain regulatory or legal requirements.
The New Plan will terminate no later than April 3, 2030. However, awards granted before such termination will extend beyond that
date in accordance with their terms.
Participants. Awards under the New Plan
may be made to employees of the Company, including officers of the Company (whether or not they are directors), and to non-employee
directors and consultants. Non-employee directors receive grants subject to the limits described under “Non-Employee Director
Awards” below. As of the record date for this meeting, we had 8,095 employees and nine non-employee directors, who would
have been eligible to receive awards under the New Plan; as of that date, no consultants would have been eligible to receive awards
thereunder.
Awards. There are generally five types
of awards that may be granted under the New Plan: Stock Options (including both incentive stock options (referred to as “ISOs”)
within the meaning of Section 422 of the Internal Revenue Code
102 / |
2020 PROXY STATEMENT AND NOTICE OF ANNUAL
SHAREHOLDER MEETING |