Stockholders' Equity

12 Months Ended

Dec. 31, 2019

NOTE 8 – STOCKHOLDERS’ EQUITY

Preferred Stock

The Company has 5,000,000 preferred shares authorized, which may be issued at the discretion of the Company’s Board of Director’s discretion.

Common Stock

In April 2019, Sangamo completed an underwritten public offering of its common stock, in which the Company sold an aggregate of 12.7 million shares of its common stock at a public offering price of $11.50 per share. The net proceeds to Sangamo from the sale of shares in this offering, after deducting underwriting discounts and commissions and other offering expenses, were approximately $136.3 million.

In April 2018, Sangamo completed an underwritten public offering of its common stock, in which the Company sold an aggregate of 14.2 million shares of its common stock at a public offering price of $16.25 per share. The net proceeds to Sangamo from the sale of shares in this offering, after deducting underwriting discounts and commissions and other offering expenses, were approximately $215.8 million.

In June 2017, Sangamo completed an underwritten public offering of its common stock, in which the Company sold an aggregate of 11.5 million shares of its common stock at a public offering price of $7.25 per share. The net proceeds to Sangamo from the sale of shares in this offering, after deducting underwriting discounts and commissions and other offering expenses, were approximately $78.1 million.

Stock Incentive Plan

In April 2018, the Compensation Committee of the Company’s Board of Directors approved the Sangamo Therapeutics, Inc. 2018 Equity Incentive Plan (the “2018 Plan”), subject to approval by the Company’s stockholders. The 2018 Plan became effective on June 11, 2018 upon approval at the Company’s Annual Meeting of Stockholders. In connection with the approval of the 2018 Plan, no additional equity awards will be granted under the 2013 Plan, however all outstanding equity awards under the 2013 Plan will continue to be subject to the terms and conditions as set forth in the agreements evidencing such awards and the terms of the 2013 Plan.

The exercise price of a stock option granted under the 2018 Plan may not be less than 100% of the fair market value of the Company's common stock subject to the stock option on the date of grant, and the option term will not exceed 10 years. If the person to whom the stock option is granted is a 10% stockholder of the Company, and the stock option granted qualifies as an incentive stock option, then the exercise price per share will not be less than 110% of the fair market value of the Company’s common stock on the date of grant, and the option term will not exceed five years. Generally, stock options granted under the 2018 Plan vest over four years at a rate of 25% on the one year anniversary of the date of grant and 1/48 per month thereafter and expire 10 years after the date of grant, or earlier upon termination of employment or services to the Company.

The number of shares of common stock reserved for issuance under the 2018 Plan will be reduced: (i) on a 1-for-1 basis for each share of common stock subject to a stock option or stock appreciation right granted under the plan, (ii) by a fixed ratio of 1.33 shares of common stock for each share of common stock issued pursuant to a full-value award granted under the plan.

Shares subject to any outstanding stock options or other awards under the 2018 Plan that expire or otherwise terminate prior to the issuance of the shares subject to those stock options or awards will be available for subsequent issuance under the 2018 Plan. Any unvested shares issued under the 2018 Plan that the Company subsequently purchases, pursuant to repurchase rights under the 2018 Plan, will be added back to the number of shares reserved for issuance under the 2018 Plan on a 1-for-1 basis or a 1.33-for-1 basis (depending on the ratio at which the share reserve was debited for the original award) and will accordingly be available for subsequent issuance in accordance with the terms of the 2018 Plan.

Employee Stock Purchase Plan

In June 2018, the Company’s stockholders approved the amendment and restatement of the ESPP. As amended, the ESPP provides a total reserve of 4.6 million shares of common stock for issuance under the ESPP. Eligible employees may purchase common stock at 85% of the lesser of the fair market value of the Company’s common stock on the first day of the applicable two-year offering period or the last day of the applicable six-month purchase period.

Stock Option Activity

A summary of Sangamo’s stock option activity is as follows:


	Number of Shares	Weighted- Average Exercise per Share Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
				(In years)	(In thousands)
Options outstanding at December 31, 2018	8,726,092	$	11.23
Options granted	4,530,288	$	9.68
Options exercised	(806,226)	$	5.08
Options canceled	(2,620,867)	$	12.39
Options outstanding at December 31, 2019	9,829,287	$	10.71	7.91	$	7,472
Options vested and expected to vest at December 31, 2019	9,829,287	$	10.71	7.91	$	7,472
Options exercisable at December 31, 2019	3,993,645	$	10.43	6.54	$	5,442

Newly created shares are issued upon exercises of options. There were no shares subject to Sangamo’s right of repurchase as of December 31, 2019. The intrinsic value of options exercised was $4.7 million, $27.0 million and $12.3 million during 2019, 2018 and 2017, respectively.

At December 31, 2019, the aggregate intrinsic values of outstanding and exercisable options were $7.5 million and $5.4 million, respectively. The aggregate intrinsic value of options vested and expected to vest as of December 31, 2019, 2018 and 2017 was $7.5 million, $24.5 million and $71.7 million, respectively.

Restricted Stock Units

During 2019, 2018 and 2017, the Company awarded 834,745, 346,055, and 12,600 RSUs, respectively. The RSUs awarded in 2019, 2018 and 2017 had an average grant date fair value per award of $9.49, $17.87 and $15.85, respectively. These awards generally vest in a series of three successive equal annual installments. The aggregate fair value of RSUs vested during 2019, 2018 and 2017 was $2.0 million, $0.6 million and $1.2 million, respectively.

A summary of Sangamo’s RSU activity is as follows:


	Number of Shares	Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
		(In years)	(In thousands)
RSUs outstanding at December 31, 2018	322,701
RSUs awarded	834,745
RSUs released	(118,807)
RSUs forfeited	(175,789)
RSUs outstanding at December 31, 2019	862,850	1.22	$	7,222
RSUs vested and expected to vest at December 31, 2019	862,850	1.22	$	7,222

RSUs that vested in 2019, 2018 and 2017 were net-share settled such that the Company withheld shares with value equivalent to the employees’ minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total shares withheld were approximately 39,160, 20,193, and 42,243 for 2019, 2018 and 2017, respectively, and were based on the value of the RSUs on their respective issuance dates as determined by the Company’s closing stock price. Total payments for the employees’ tax obligations to taxing authorities were $0.4 million, $0.3 million and $0.7 million in 2019, 2018 and 2017, respectively and are reflected as a financing activity within the accompanying Consolidated Statements of Cash Flows. These net-share settlements had the effect of share repurchases by the Company as they reduced and retired the number of shares that would have otherwise been issued as a result of the vesting and did not represent an expense to the Company.

As of December 31, 2019, there were 6,691,209 shares reserved for future awards under the Company’s 2018 Plan and 2,757,600 shares of common stock reserved for future issuance under the ESPP.