ETTX Entasis Therapeutics Holdings Inc

PROPOSAL  1: ELECTION OF DIRECTORS

General

Our amended and restated certificate of incorporation, or the Certificate of Incorporation, provides for a classified Board consisting of three classes of directors. Each class consists, as nearly as possible, of one‑third of the total number of directors, and each class has a three‑year term. Vacancies on our Board may be filled only by persons elected by a majority of the remaining directors. A director elected by our Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified.

Our Board currently is composed of eight directors with no vacancies. There are three directors whose term of office expires in 2020 and, on April 27, 2020, Dr. Galakatos provided notice of his resignation as a member of our Board effective May 1, 2020. Upon the recommendation of the Nominating and Corporate Governance Committee, our Board has nominated Dr. Heather Behanna, Ph.D. and Dr. Howard Mayer, M.D., for election as directors at the Annual Meeting to hold office until the 2023 Annual Meeting of Stockholders. Mr. Norden has not been nominated for re-election and, therefore, his term of office will expire at the Annual Meeting. If you elect the nominees listed below, they will hold office until the 2023 Annual Meeting of Stockholders and until their successors have been duly elected and qualified, or, if sooner, until their death, resignation or removal. If you elect the nominees listed below, our Board following the Annual Meeting will be composed of six directors with two vacancies. All nominees have consented to being named in this Proxy Statement and to serve if elected. It is our policy to encourage directors and nominees for director to attend the Annual Meeting.

Information About Our Class II Director Nominees for Election to a Three-Year Term Expiring at the 2023 Annual Meeting of Stockholders

The brief biographies of our Class II director nominees below include information, as of the date of this Proxy Statement, regarding the specific and particular experience, qualifications, attributes or skills that led the Company to believe that each nominee should serve on the Board. There are no family relationships among any of our executive officers or directors. The Board has no reason to believe that any of the nominees would prove unable to serve if elected. There are no arrangements or understandings between us and any director, or nominee for directorship, pursuant to which such person was selected as a director or nominee.

Heather Behanna,  Ph.D., has served as a member of our Board since August 2017.  Dr. Behanna is a principal at SR One, Limited, a position she has held since April 2019. From January 2017 to November 2018, she was a principal at Sofinnova Investments, or Sofinnova,  focusing on biopharmaceutical investments. Prior to joining Sofinnova, Dr. Behanna was a senior vice president and biotechnology sell-side analyst at Wedbush Securities from August 2014 to December 2016, preceded by a role as an associate at JMP Securities LLC from September 2010 to June 2014. Prior to this, Dr. Behanna worked in early stage drug discovery at the Astellas Research Institute and was also an adjunct professor at the Feinberg School of Medicine at Northwestern University. Dr. Behanna received her Ph.D. in Chemistry from Northwestern University, an M.S. in Organic Chemistry from the Weizmann Institute of Science and her B.S. from Tufts University. We believe that Dr. Behanna is qualified to serve on our Board because of her extensive experience in the biopharmaceutical investment industry and her scientific background.

Howard Mayer, M.D. has served as a member of our Board since August 2019.  Dr. Mayer was most recently senior vice president, chief medical officer and global head of R&D, Neuroscience Division at Shire Pharmaceuticals, or Shire Pharma, from 2018 to 2019 (acquired by Takeda Pharmaceutical Company in 2019). Previously, Dr. Mayer was senior vice president and head of global clinical development at Shire Pharma from 2013 to 2018. Dr. Mayer joined Shire Pharma in 2012 and in his prior role at Shire Pharma was responsible for global clinical development (Phase I-IV)

across the hematology, immunology, oncology, genetic diseases, GI/metabolic, neuroscience and ophthalmology therapeutic areas. He was also responsible for clinical development operations, clinical pharmacology, and medical devices. Previously he served as chief medical officer at EMD Serono, a division of Merck KGaA. Prior to that, he held a variety of global roles at Pfizer Inc. over nearly eight years, including head of clinical development and medical affairs for Virology/Infectious Diseases. Prior to joining Pfizer, he served as director of infectious diseases clinical research at Bristol-Myers Squibb for five years. Dr. Mayer obtained his BA from the University of Pennsylvania and his M.D. from Albert Einstein College of Medicine in New York, which was followed by an internship and residency at Mount Sinai Hospital and an Infectious Diseases fellowship at Harvard Medical School. Dr. Mayer has served on the board of directors of Genocea Biosciences, Inc., a publicly held company since 2017. He also has served on the board of Autism Speaks in New England since 2011 and on the board of the Melmark Charitable Foundation since 2016. In 2011 and in 2017, he was honored by PharmaVoice as one of the 100 Most Inspiring People in the Life Sciences Industry. We believe that Dr. Mayer is qualified to serve on our Board because of his extensive experience in the biopharmaceutical industry and his scientific background.

Vote Required

Directors are elected by a plurality of the votes of the holders of shares present in person or represented by proxy and entitled to vote on the election of directors. Accordingly, the two nominees receiving the greatest number of “For” votes, even if less than a majority, will be elected.  Withheld votes and broker non-votes will have no effect on the election of a nominee. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the nominees named above. If the nominees become unavailable for election as a result of an unexpected occurrence, your shares will be voted for the election of a substitute nominee proposed by our Board.

(1)  On April 27, 2020, Dr. Galakatos provided notice to the Company of his intent to resign as a member of our Board effective May 1, 2020.

The principal occupation, business experience and education of each of our continuing directors are set forth below. Unless otherwise indicated, principal occupations shown for each director have extended for five or more years.

Class I Directors Continuing in Office until the 2022 Annual Meeting of Stockholders

David Meek has served as Chairman of the Board since June 2019. In January 2020, Mr. Meek joined FerGene, a gene therapy company, as their chief executive officer.  Prior to FerGene, he was the chief executive officer and board member of Ipsen S.A., a public biopharmaceutical company based in Paris, France, from July 2016 to December 2019.

Prior to joining Ipsen, Mr. Meek served as executive vice president and president of the oncology division of Baxalta Inc. from July 2014 to July 2016. From August 2012 to July 2014, Mr. Meek served as the chief commercial officer of Endocyte, Inc., or Endocyte, an oncology-focused biotechnology company. Prior to Endocyte, Mr. Meek spent eight years in a variety of senior roles at Novartis AG, including region head for oncology, chief executive officer Novartis Canada, and global franchise head. He also spent 15 years at Johnson & Johnson and Janssen Pharmaceutica, Inc., where he held a variety of senior commercial positions. Mr. Meek has served on the board of uniQure NV, a publicly held gene therapy company based in the Netherlands, since 2018. Mr. Meek received his B.A. in Management from the University of Cincinnati. We believe that Mr. Meek is qualified to serve on our Board because of his extensive executive experience and commercialization expertise within the biopharmaceutical industry as well as his experience as a director of public companies in the biopharmaceutical industry. 

Heather Preston, M.D., has served as a member of our Board since August 2017. Dr. Preston has served as a managing partner at Pivotal bioVenture Partners since July 2018 and as a senior advisor to TPG Biotech, a biotechnology venture capital firm, since July 2018. Dr. Preston was previously a partner and managing director at TPG Biotech from 2005 to July 2018. Prior to joining TPG Biotech, Dr. Preston served for two years as a medical device and biotechnology venture capital investor at J.P. Morgan Partners, LLC, a private equity firm. Prior to that, she was an entrepreneur-in-residence at New Enterprise Associates, a venture capital firm, and was a leader of the pharmaceutical and medical products consulting practice at McKinsey & Co. Dr. Preston has served on the boards of directors of Oxford BioMedica plc and Karuna Therapeutics., both publicly held companies, since 2018 and 2019, respectively.  Dr. Preston has also served on the board of a number of private companies. Dr. Preston received her M.D. from the University of Oxford and a B.S. in Biochemistry from the University of London. We believe that Dr. Preston is qualified to serve on our Board because of her extensive experience in the biopharmaceutical investment industry and her scientific background.

Class II Director Whose Term Expires at the Annual Meeting

Gregory Norden has served as a member of our Board since October 2016. From 1989 to 2010, Mr. Norden held various senior positions at Wyeth/American Home Products, or Wyeth, most recently as Wyeth’s senior vice president and chief financial officer. Mr. Norden has served on the board of directors of Nanostring Technologies, Inc. and Zoetis Inc., both publicly held companies, since  2012 and 2013, respectively. Since 2015, Mr. Norden has served on the boards of directors of, Royalty Pharma AG and Univision Communications Inc.  Mr. Norden received a M.S. in Accounting from Long Island University—C.W. Post and a B.S. in Management/Economics from the State University of New York—Plattsburgh. We believe that Mr. Norden is qualified to serve on our Board because of his extensive financial and accounting expertise and experience at Wyeth and at Arthur Andersen & Company and his significant experience in the biopharmaceutical industry.

Class III Directors Continuing in Office until the 2021 Annual Meeting of Stockholders

Nicholas Galakatos, Ph.D., has served as a member of our Board since March 2016 and through June 2019 was our chairman. On April 27, 2020, Dr. Galakatos provided notice to the Company of his intent to resign from the Board effective May 1, 2020. Dr. Galakatos is the Global Head of the Blackstone Life Sciences business, having joined Blackstone as part of its acquisition of Clarus in November of 2018. Prior to joining Blackstone, Dr. Galakatos was a co-founder and managing director of Clarus, a health care and life sciences venture capital firm, since the firm’s inception in 2005. Dr. Galakatos has over 30 years of industry and investment experience in the healthcare sector and has led investments in biotechnology, pharmaceutical company partnerships, and diagnostics, from startups to commercial-stage companies. Prior to Clarus, Dr. Galakatos was a general partner at MPM Capital, a healthcare venture capital firm. From 1997 to 2000 he was vice president of new business at Millennium Pharmaceuticals (presently Takeda Pharmaceutical Company) and a member of the management team. He is a founder of Millennium Predictive Medicine, or Millennium, and TransForm Pharmaceuticals, where he was the chairman and founding chief executive officer. Prior to Millennium, he was at Venrock Associates, or Venrock, focusing on early stage biotechnology investments. Prior to Venrock he was head of molecular biology research at Ciba-Geigy (presently Novartis International AG). Dr. Galakatos served on the board of directors of Nanostring Technologies, a publicly held company, from 2009 to 2019. Dr. Galakatos has served as the chairman of the board of Anthos Therapeutics since 2018 and Praxis Precision Medicine since 2017, and a member of the board of directors of Talaris, Inc since 2018. He is a member of the Director's Council of the Koch Institute at

MIT and a member of the Board of Trustees at Reed College.  We believe that Dr. Galakatos is qualified to serve on our Board because of his operating experience in the biopharmaceutical industry and his extensive experience as a venture capital investor and a director of public companies in the life sciences industry.

David C. Hastings has served as a member of our Board since April 2018. Mr. Hastings has served as the Chief Financial Officer of Arbutus Biopharma Corporation since June 2018. Prior to joining Arbutus, Mr. Hastings served as the Senior Vice President and Chief Financial Officer of Unilife Corporation from February 2015 to June 2017 and as Unilife’s Chief Accounting Officer and Treasurer from July 2016 to June 2017. From October 2003 to October 2014, Mr. Hastings served as Executive Vice President and Chief Financial Officer at Incyte Corporation. Mr. Hastings has served on the board of directors and chairs the audit committee of Scynexis Inc. and VBL Therapeutics Ltd., both publicly held companies, since 2015 and 2018, respectively. Mr. Hastings received his B.A. in Economics from the University of Vermont. We believe that Mr. Hastings is qualified to serve on our Board because of his extensive financial experience, including experience as the chief financial officer of multiple publicly traded companies.

Manoussos Perros, Ph.D., has served as our Chief Executive Officer, co‑founder and a member of our Board since May 2015. Prior to this, Dr. Perros worked for AstraZeneca AB, or AstraZeneca, as vice president and head of its infection research and early development organization from 2010 to 2015 and as site head for its research center in Waltham, Massachusetts from 2012 to 2015. Prior to joining AstraZeneca, Dr. Perros served as director of the Novartis Institute for Tropical Diseases in Singapore, and prior to that, as vice‑president and chief scientific officer, antivirals, at Pfizer, Inc. A chemist by training, Dr. Perros conducted his Ph.D. work in Belgium, France and Germany, and was an associate in the Biophysics department at Yale from 1993 to 1995. Dr. Perros received the PhRMA Discoverer’s Award in 2010. We believe that Dr. Perros is qualified to serve on our Board because of his extensive knowledge of our company as co‑founder and Chief Executive Officer, his experience at major pharmaceutical companies and his scientific experience and achievements.

In the last 10 years none of our directors were executive officers of a corporation that declared bankruptcy within two years of the director being an executive officer of that corporation other than Mr. Hastings, who was an executive officer of Unilife Corporation when it filed for voluntary bankruptcy in April 2017.

INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE

Board Independence

As required under the Nasdaq Stock Market LLC, or Nasdaq, listing standards, a majority of the members of a listed company’s  board of directors must qualify as “independent.” Under the Nasdaq listing standards, a director is independent only if the board of directors of a company makes an affirmative determination that the director has no material relationship with the company that would impair his or her independence. The Board consults with the Company’s counsel to ensure that the Board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of Nasdaq, as in effect from time to time.

Consistent with these considerations, after review of all relevant identified transactions or relationships between each director, or any of his or her family members, and the Company, its senior management and its independent auditors, our Board has affirmatively determined that all of our current directors, except Dr. Perros, by virtue of his position as our President and Chief Executive Officer, are independent within the meaning of the applicable Nasdaq listing standards. In making these determinations, our Board has determined, upon the recommendation of our Nominating and Corporate Governance Committee, that none of our directors or nominees for director had a material or other disqualifying relationship with the Company. The Board has also determined that each member of our Audit, Compensation and Nominating and Corporate Governance committees satisfies the independence standards for such committees established by the SEC and the Nasdaq listing standards, as applicable.

Leadership Structure and Risk Oversight

The Board is currently chaired by Mr. Meek.  Mr. Meek has authority, among other things, to call and preside over Board meetings, including meetings of the independent directors, to set meeting agendas and to determine materials to be distributed to the Board. Accordingly, the Chairman of the Board has substantial ability to shape the work of the Board. The Company believes that separating the positions of Chairman and Chief Executive Officer creates an environment that is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of the Board to monitor whether management’s actions are in the best interests of the Company and its stockholders. The Company believes that this separation can enhance the effectiveness of the Board as a whole.

One of the Board’s key functions is informed oversight of our risk management process. The Board does not have a standing risk management committee, but rather administers this oversight function directly through the Board as a whole, as well as through its various standing committees that address risks inherent in their respective areas of oversight.

In particular, our Board is responsible for monitoring and assessing strategic risk exposure, including a determination of the nature and level of risk appropriate for the Company.

Our Audit Committee has the responsibility to consider and discuss with management and the auditors, as appropriate, the Company’s guidelines and policies with respect to financial risk management and financial risk assessment, including the Company’s major financial risk exposures and the steps taken by management to monitor and control these exposures. In addition, the Audit Committee considers management risks relating to data privacy, technology and information security, including cybersecurity, and back‑up of information systems and the steps the Company has taken to monitor and control such exposures as well as overseeing the performance of our internal audit function. Our Compensation Committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk‑taking, including risks related to executive compensation and overall compensation and benefit strategies, plans, arrangements, practices and policies. Our Nominating and Corporate Governance Committee monitors the effectiveness of our Corporate Governance Guidelines, including whether they are successful in preventing illegal or improper liability‑creating conduct. The Nominating and Corporate Governance Committee also oversees and reviews with management the Company’s major legal compliance risk exposures and the steps management has taken to monitor or mitigate such exposures, including the Company’s procedures and any related policies with respect to risk assessment and risk management. It is the responsibility of the committee chairs to report findings regarding material risk exposures to the Board as quickly as possible. In connection with its reviews of the operations and corporate functions of our company, our Board evaluates the primary risks associated with those operations and corporate functions. In addition, our Board 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. While the Board and its committees oversee risk management strategy, management is responsible for implementing and supervising day‑to‑day risk management processes and reporting to the Board and its committees on such matters.

Board Meetings and Annual Meeting Attendance

Our Board held six meetings during the fiscal year ended December 31, 2019.  During 2019, each of the incumbent directors other than Dr. Galakatos attended at least 75% of the total of the meetings of the Board and the meetings of the committees of the Board on which he or she served (in each case, which were held during the period for which he or she was a director and/or a member of the applicable committee). It is our policy to encourage our directors to attend the Annual Meeting. We anticipate that a majority of the members of the Board will attend the Annual Meeting. In 2019, five of our seven serving directors attended the 2019 Annual Meeting of Stockholders.

As required under applicable Nasdaq listing standards, during 2019, the Company’s independent, non‑employee directors met in six regularly scheduled executive sessions at which only independent directors were present.

*             Committee Chair

Below is a description of each committee of the Board. Each of the committees has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities. The Board has determined that each member of each committee meets the applicable Nasdaq rules and regulations regarding “independence” and each member is free of any relationship that would impair his or her individual exercise of independent judgment with regard to the Company. Each of the committees operates pursuant to a written charter and each committee reviews and assesses the adequacy of its charter and submits its charter to the Board for approval. The charters are all available at www.entasistx.com/corporate-governance/. The inclusion of our website address here and elsewhere in this Proxy Statement does not include or incorporate by reference the information on our website into this Proxy Statement.

Audit Committee

The Audit Committee of the Board is responsible for, among other things:

The current members of our Audit Committee are Mr. Hastings, Dr. Behanna and Dr. Preston with Mr. Hastings serving as chairperson. Our Board has determined that each of the members of our Audit Committee satisfies the requirements for independence and financial literacy under the rules and regulations of Nasdaq and the SEC. Our Board has determined that Mr. Hastings is an “audit committee financial expert” within the meaning of the SEC regulations and applicable listing standards of Nasdaq. During the fiscal year ended December 31, 2019, the Audit Committee met four times.

Compensation Committee

The Compensation Committee is responsible for, among other things:

The current members of our Compensation Committee are Mr. Norden, Dr. Behanna and Dr. Mayer, with Mr. Norden serving as chairperson. Our Board has determined that each of the members of our Compensation Committee are independent within the meaning of the independent director requirements of Nasdaq. Our Board has also determined that the composition of our Compensation Committee meets the requirements for independence under, and the functioning of our Compensation Committee complies with, any applicable requirements of Nasdaq and SEC rules and regulations. During the fiscal year ended December 31, 2019, the Compensation Committee met three times. Because Mr. Norden

has not been nominated for re-election to our Board, our Board will appoint a new chairperson of the Compensation Committee at its next regularly scheduled meeting.

Compensation Committee Processes and Procedures

The Compensation Committee acts on behalf of the Board to review, modify (as needed) and approve, or review and recommend, as applicable, the overall compensation strategy and policies for the Company. The Committee may form and delegate authority to subcommittees as appropriate.

The Compensation Committee has the authority to obtain, at our expense, advice and assistance from compensation consultants and internal and external legal, accounting or other advisers and other external resources that the Compensation Committee considers necessary or appropriate in the performance of its duties. The Compensation Committee has direct responsibility for the oversight of the work of any consultants or advisers engaged for the purpose of advising the Compensation Committee. In particular, the Compensation Committee has sole authority to retain compensation consultants to assist in its evaluation of executive and director compensation, including authority to approve the consultant’s reasonable fees and other retention terms.  During the past fiscal year, the Compensation Committee engaged Radford Consulting, or Radford, as a compensation consultant.

Specifically, the Compensation Committee engaged Radford to:

Independent Compensation Consultant Evaluation

The Compensation Committee may select, or receive advice from, a compensation consultant, legal counsel or other adviser to the Compensation Committee, other than in‑house legal counsel and certain other types of advisers, only after assessing the independence of such person in accordance with SEC and Nasdaq requirements that bear upon the adviser’s independence. The Compensation Committee has assessed Radford’s independence and determined that there was no conflict of interest resulting from retaining Radford for this engagement. 

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee is responsible for, among other things:

The current members of our Nominating and Corporate Governance Committee are Dr. Galakatos, Mr. Norden and Mr. Meek, with Dr. Galakatos serving as chair. Our Board has determined that each of the members of our Nominating and Corporate Governance Committee are independent within the meaning of the independent director requirements of Nasdaq. During the fiscal year ended December 31, 2019, the Nominating and Corporate Governance Committee met one time. Because Dr. Galakatos has provided notice of his intent to resign from the Board effective May 1, 2010, our Board will appoint a new chairperson of the Nominating and Corporate Governance Committee at its next regularly scheduled meeting.

Identifying and Evaluating Nominees for Directors

In recommending candidates for election to the Board at the annual meeting of stockholders, or any special meeting of stockholders, the independent members of the Nominating and Corporate Governance Committee believes that candidates for director should have certain minimum qualifications, including the ability to read and understand basic financial statements, understand the Company’s industry and having the highest personal integrity and ethics. The Nominating and Corporate Governance Committee also intends to consider such factors as (i) possessing relevant expertise upon which to be able to offer advice and guidance to management, (ii) having sufficient time to devote to the affairs of the Company, (iii) demonstrating excellence in his or her field, (iv) having the ability to exercise sound business judgment, (v) having experience as a board member or executive officer of another publicly held company, (vi) having a diverse personal background, perspective and experience and (vii) having the commitment to rigorously represent the long‑term interests of our stockholders. Candidates for director nominees are reviewed in the context of the current composition of the Board, the operating requirements of the Company and the long‑term interests of stockholders. In conducting this assessment, the Nominating and Corporate Governance Committee typically considers diversity, age, skills and such other factors as it deems appropriate, given the current needs of the Board and the Company, to maintain a balance of knowledge, experience and capability.

In the case of incumbent directors whose terms of office are set to expire, the Nominating and Corporate Governance Committee reviews these directors’ overall service to the Company during their terms, including the number of meetings attended, level of participation, quality of performance and any other relationships and transactions that might impair the directors’ independence. The Nominating and Corporate Governance Committee will take into account the results of the Board’s self‑evaluation, conducted periodically on a group and individual basis. In the case of new director candidates, the Nominating and Corporate Governance Committee also determines whether the nominee is independent for Nasdaq purposes, which determination is based upon applicable Nasdaq listing standards, applicable SEC rules and regulations and the advice of counsel, if necessary. Generally, our Nominating and Corporate Governance Committee identifies candidates for director nominees in consultation with management, using search firms or other advisors, through the recommendations submitted by stockholders or through such other methods as the Nominating and Corporate Governance Committee deems to be helpful to identify candidates. The Nominating and Corporate Governance Committee conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of the Board. The Nominating and Corporate Governance Committee meets to discuss and consider the candidates’ qualifications and then selects a nominee for recommendation to the Board. The Nominating and Corporate Governance Committee may gather information about the candidates through interviews, questionnaires, background checks or any other means that the Nominating and Corporate Governance Committee deems to be appropriate in the evaluation process. We have no formal policy regarding board diversity. Our Nominating and Corporate Governance Committee’s priority in selecting board members is identification of persons who will further the interests of our company through his or her established record of professional accomplishment, the ability to contribute positively to the collaborative culture among board members, and professional and personal experiences and expertise relevant to our growth strategy.

As described above, the Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate was recommended by a stockholder. For more information regarding how a stockholder can recommend individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the Board, please see the section titled “Questions and Answers About These Proxy Materials - When are stockholder proposals due for the 2021 Annual Meeting of Stockholders?”

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics that applies to all officers, directors and employees. The Code of Business Conduct and Ethics is available on our website at www.entasistx.com/corporate-governance/documents-charters. If we make any substantive amendments to the Code of Business Conduct and Ethics or grant any waiver from a provision of the Code to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website.

Corporate Governance Guidelines

The Board has adopted Corporate Governance Guidelines to assure that the Board will have the necessary authority and practices in place to review and evaluate our business operations as needed and to make decisions that are independent of our management. The Corporate Governance Guidelines are also intended to align the interests of directors and management with those of our stockholders. The Corporate Governance Guidelines set forth the practices the Board intends to follow with respect to, among other things, board composition and selection including diversity, board meetings and involvement of senior management, Chief Executive Officer performance evaluation and succession planning, and board committees and compensation. The Corporate Governance Guidelines are available on our website at www.entasistx.com/corporate-governance/documents-charters.

Stockholder Communications with Our Board

The Board has adopted a formal process by which stockholders may communicate with the Board or any of its directors. Should stockholders wish to communicate with the Board or any specified individual directors, such correspondence should be sent to the attention of the Company’s Secretary at 35 Gatehouse Dr., Waltham, Massachusetts 02451. The Secretary will forward the communication to the Board members.

Pre‑Approval Policies and Procedures

Our Audit Committee pre-approves all audit and non‑audit services provided by KPMG LLP before it is engaged by us to render non‑audit services to ensure that the provision of these services does not impair the auditor’s independence. These services may include audit‑related services, tax services and other non‑audit services.

The pre‑approval requirement set forth above does not apply with respect to non‑audit services if:

The Audit Committee elected to delegate pre‑approval authority to the chairperson of the Audit Committee to approve any one or more individual permitted non‑audit services for which estimated fees do not exceed $75,000 as well as adjustments to any estimated pre‑approval fee thresholds up to $50,000 for any individual non‑audit service. Any non‑audit services that would exceed such limits should be pre‑approved by the full Audit Committee. The chairperson shall report any pre‑approval granted at the next scheduled meeting of the Audit Committee.

Our Recommendation

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “For” the ratification of the SELECTION OF KPMG LLP as our independent registered public accounting firm for the FISCAL year ending December 31, 2020.

proxy filing, fewer than 200,000 shares remain available for issuance.  If approved by the stockholders at the Annual Meeting, the maximum number of shares underlying awards available for grant under the 2018 Plan effective June 10, 2020 will increase by 500,000 shares to 2,850,000, leaving a remainder of approximately 700,000 available for future issuance. If our stockholders do not approve the increase, we may experience a shortfall of shares of common stock available for issuance for stock-based compensation awards, which we believe will adversely affect our ability to attract, retain and reward the many employees who contribute to our success. Shares of common stock delivered in satisfaction of awards will not include shares withheld by the Company to pay the exercise price of an award or to satisfy tax withholding requirements with respect to an award; the Company will not deliver common stock in satisfaction of awards that are settled in cash, lapse, expire or that are forfeited, cancelled or terminated. The number of shares that may be delivered under the 2018 Plan is subject to adjustment for share splits, recapitalizations and other changes to the Company’s capital structure.

Shares of common stock subject to an award that remain unissued upon the cancellation, surrender, exchange or termination of the award generally may again become available for issuance under the 2018 Plan in an amount calculated in accordance with the share counting formula described in the preceding sentences.

Corporate Transactions; Change in Control. In the event of certain mergers or consolidations of the Company, the Compensation Committee may provide for the assumption or continuation of some or all outstanding awards; a cash-out payment with respect to some or all awards or acceleration of an award, provided, however, that full acceleration of an award will only be permissible in the event that the Change in Control (as defined in the 2018 Plan) results in the termination of the participant’s employment with the Company.

Alteration of Termination. The Compensation Committee may at any time amend the 2018 Plan or any outstanding award for any purpose which may at the time be permitted by law, and may at any time terminate the 2018 Plan as to any future grants of awards; provided, that, except as otherwise expressly provided in the 2018 Plan, the Compensation Committee may not, without the participant’s consent, alter the terms of an award, unless expressly provided for at the time the award was granted. Any amendment to the 2018 Plan will be conditioned upon stockholder approval only to the extent, if any, such approval is required by law, as determined by the Compensation Committee.

New Plan Benefits.  The Compensation Committee will determine in its discretion the timing and amount of awards under the 2018 Plan and the recipients or class of recipients of such awards. It is therefore not possible to state the amount of awards that will be made in the future if the amendment to the 2018 Plan is approved by our stockholders.

Securities Authorized for Issuance Under Equity Compensation Plans.  Information concerning securities authorized for issuance under equity compensation plans is set forth in the “Equity Compensation Plan Information” section of this Proxy Statement.

Effective Date. The increase of shares of common stock available for issuance under the 2018 Plan will be effective on June 10, 2020, or such other date on which it is approved by stockholders.

Vote Required

The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote on the matter at the annual will be required to approve the amendment to the 2018 Plan to add 500,000 shares available for issuance. Abstentions will have the same effect as an “Against” vote for Proposal 3. Broker non-votes, if any, will not be counted “For” or “Against” Proposal 3, and will have no effect on the outcome of this proposal.

Our Recommendation

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE AMENDMENT TO THE 2018 PLAN TO INCREASE THE NUMBER SHARES AVAILABLE FOR ISSUANCE.

Manoussos Perros, Ph.D. Biographical information for Dr. Perros is included above with the director biographies under the caption “Information About Our Continuing Directors.”

Michael Gutch, Ph.D., has served as our chief financial officer and chief business officer since April 2017. From January 2014 to March 2017, he served as executive director of corporate development and head of equities at AstraZeneca. Dr. Gutch served as managing director, MedImmune Ventures, the corporate venture capital arm of AstraZeneca, from September 2011 to December 2013. Prior to that, Dr. Gutch served as investment director of HIG BioVentures at the investment firm HIG Capital and as a principal of Lilly Ventures, the corporate venture arm of Eli Lilly & Company. He has served on the board of directors of Albireo Pharma, Inc. since 2016. Dr. Gutch received his MBA in Finance from Indiana University and a Ph.D. in Molecular Pathology from SUNY Stony Brook. He received his B.S. degrees in Biology and Chemistry from Alfred University.

David Altarac, M.D., has served as our chief medical officer since November 2019. From July 2015 to April 2019, Dr. Altarac was a senior vice president and head of global regulatory affairs, global drug safety and R&D quality and compliance at Shire Inc., or Shire. Prior to joining Shire, Dr. Altarac was vice president, regulatory affairs at NeoStem Inc., a biopharmaceutical company developing novel, cell-based, individualized therapeutics from July 2013 to June 2015. Dr. Altarac holds an M.D. degree from New York Medical College, a Master of Public Administration (M.P.A.) degree from New York University, and a B.A. in Chemistry from the State University of New York at Binghamton, New York. Dr. Altarac completed his Internal Medicine residency and Infectious Diseases fellowship at Beth Israel Medical Center in New York. Dr. Altarac has held multiple academic, hospital and post graduate teaching appointments during his career and has authored/coauthored numerous scientific publications.

John Mueller, Ph.D., has served as our chief development officer since May 2015. Prior to this, Dr. Mueller served as senior project director at AstraZeneca from June 2011 to May 2015, where he led a global multidisciplinary team to advance zoliflodacin into a Phase 2 clinical trial. Prior to that, Dr. Mueller worked at Pfizer, Inc. and Alexion Pharmaceuticals, Inc. Dr. Mueller received his Ph.D. in Microbiology and Immunology from the Albany Medical College, and subsequently conducted post‑doctoral studies at the Tufts Medical School as a National Institutes of Health fellow where he completed his bacterial genetics research training.

Ruben Tommasi, Ph.D., has served as our chief scientific officer since May 2015. Prior to this, Dr. Tommasi served as executive director of chemistry of the infection innovative medicines unit at AstraZeneca from May 2011 to May 2015. Before that, he led the infection chemistry unit at Novartis Institutes for Biomedical Research from December 2006 to April 2011. Prior to that, Dr. Tommasi worked at Novartis International AG. Dr. Tommasi received both his Ph.D. in Organic Chemistry and his B.S. degree in Chemistry from the State University of New York, Albany.

Elizabeth Keiley has served as our general counsel since April 2019. Prior to this from 2012 to 2019,  Ms. Keiley served in a variety of positions at Oxford Immunotec Global PLC, or Oxford Immunotec, a publicly traded global diagnostics company, including most recently serving as senior vice president and general counsel. Prior to joining Oxford Immunotec,  Ms. Keiley was assistant general counsel of Zimmer, Inc., a subsidiary of Zimmer Holdings, Inc., an orthopedic device manufacturer. Prior to working at Zimmer, Ms. Keiley was a trial lawyer and

partner with Wildman, Harrold, Allen & Dixon in Chicago, Illinois. Ms. Keiley received her B.S. and B.A. degrees in Psychology and Philosophy, respectively, from Boston College and her J.D. from Loyola University School of Law.

Eric Kimble has served as our chief commercial officer since April 2019. Prior to joining Entasis, Mr. Kimble served in a variety of leadership roles at Cubist Pharmaceuticals, or Cubist, including vice president of sales & marketing and vice president of program & portfolio management from 2004 to 2013.  Prior to joining Cubist, Mr. Kimble held numerous commercial roles at Biogen and Merck, and he began his biopharma career as a research associate at Arthur D. Little, Inc.  Mr. Kimble received his M.B.A. from Harvard University and his B.A. as a double major in English Literature and Business Economics from Brown University.

Employment Arrangements

Below are descriptions of our employment agreements and arrangements with our Named Executive Officers. The agreements generally provide for at‑will employment without any specific term and set forth the Named Executive Officers’ initial base salary, eligibility for employee benefits and severance benefits upon a qualifying termination of employment or change in control of our company. Furthermore, each of our Named Executive Officers has executed a form of our standard proprietary information and inventions assignment agreement. The key terms of the employment agreements with our Named Executive Officers, including potential payments upon termination or change in control, are described below.

Agreement with Dr. Perros

We have an employment agreement with Manoussos Perros, our president and Chief Executive Officer, which became effective on September 25, 2018, and which sets forth the revised terms of Dr. Perros’ employment with us. Pursuant to his employment agreement, Dr. Perros is eligible to receive an annual performance bonus with a target of 45% of his then‑current base salary, as determined by our Board, and reimbursement for expenses. Dr. Perros’ current base salary is $536,600. His employment agreement does not have a specified term and his employment may be terminated by us or by Dr. Perros at any time, with or without cause. Dr. Perros is additionally eligible for certain severance and change in control benefits pursuant to his employment agreement, the terms of which are described below under “—Potential Payments and Benefits upon Termination or Change of Control.”

Agreement with Dr. Isaacs

Effective September 25, 2018, we entered into an employment agreement with Robin Isaacs, our former chief medical officer, which set forth the revised terms of Dr. Isaacs’ employment with us. Pursuant to his employment agreement, Dr. Isaacs is eligible to receive an annual performance bonus with a target of 35% of his then‑current base salary, as determined by our Board, and reimbursement for expenses. His employment agreement does not have a specified term and his employment may be terminated by us or by Dr. Isaacs at any time, with or without cause. Dr. Isaacs resigned from his position as chief medical officer on November 4, 2019, and retired from the Company on January 10, 2020.  No severance was due to Dr. Isaacs upon his retirement. 

Agreement with Mr. Kimble

We have an employment agreement with Eric Kimble, our chief commercial officer, which became effective on April 26, 2019, and which sets forth the terms of Mr. Kimble’s employment with us under the form of employment agreement used for our executive officers. Pursuant to Mr. Kimble’s employment agreement, Mr. Kimble is eligible to receive an annual performance bonus with a target of 35% of his base salary, as determined by our Board, and reimbursement for expenses.  Mr. Kimble’s current annual base salary is $382,700. His employment agreement does not have a specified term and his employment may be terminated by us or by Mr. Kimble at any time, with or without cause. Mr. Kimble is additionally eligible for certain severance and change in control benefits pursuant to his employment agreement, the terms of which are described below under “—Potential Payments and Benefits upon Termination or Change of Control.”

Agreement with Dr. Gutch

We have an employment agreement with Michael Gutch, our chief financial officer and chief business officer, which became effective on September 25, 2018, and which sets forth the revised terms of Dr. Gutch’s employment with us. Pursuant to his employment agreement, Dr. Gutch is eligible to receive an annual performance bonus with a target of 35% of his then‑current base salary, as determined by our Board, and reimbursement for expenses. Dr. Gutch’s current base salary is $379,000. His employment agreement does not have a specified term and his employment may be terminated by us or by Dr. Gutch at any time, with or without cause. Dr. Gutch is additionally eligible for certain severance and change in control benefits pursuant to his employment agreement, the terms of which are described below under “—Potential Payments and Benefits upon Termination or Change of Control.”

Potential Payments and Benefits upon Termination or Change of Control

Each of the employment agreements with our Named Executive Officers provides that if we terminate the employment of the Named Executive Officer for any reason other than for cause, or if such executive officer resigns his position with us for good reason, he would be eligible to receive the following severance benefits:

Alternatively, if such termination or resignation occurs on or within 18 months after a change of control (as defined therein), the Named Executive Officer is instead eligible for:

Each employment agreement provides that the Named Executive Officer’s death (or disability subject to applicable state and federal law) terminates the employment relationship and executive officer’s legal representatives will not receive severance benefits. Payment of any of the above‑described severance benefits is conditioned on the executive officer’s delivery and non‑revocation of a severance and release of claims agreement, which will include a general release of claims in our favor, within the time period provided in such agreement, which will be no later than 60 days after such executive officer’s termination.

For purposes of the  employment agreements:

Health and Welfare Benefits

All of our current Named Executive Officers are eligible to participate in our employee benefit plans, including our medical, dental and vision insurance plans, in each case on the same basis as all of our other employees.

Long‑Term Incentives

2018 Equity Incentive Plan and Amended and Restated Stock Incentive Plan

Our board of directors adopted and our stockholders approved the 2018 Plan, in September 2018 for the purpose of attracting and retaining our directors, executive officers and other key employees, consultants and service providers, and to stimulate their efforts toward our continued success, long‑term growth and profitability. The 2018 Plan became effective on September 25, 2018. Our 2018 Plan provides for the grant of stock options qualifying as incentive stock options,  or ISOs, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, or the Code, to our employees and our parent and subsidiary corporations’ employees, and for the grant of nonstatutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and other forms of stock compensation to our employees, consultants and directors. Our 2018 Plan also provides for the grant of performance based awards to our employees, consultants and directors. We also maintain the Amended and Restated Stock Incentive Plan, or the 2015 Plan, which has been terminated and under which no future awards will be granted, but under which outstanding awards have been granted. These awards will continue to be governed by the terms of the 2015 Plan.

As of April 1, 2020, we had 150,720 shares of common stock reserved for issuance pursuant to the 2018 Plan. The number of shares of our common stock reserved for issuance under our 2018 Plan automatically increases on January 1 of each year, for a period of 10 years, through January 1, 2028, by 4% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by our Board. The maximum number of shares that may be issued pursuant to the exercise of ISOs under the 2018 Plan is 7,500,000.

The administrator may provide, in an individual award agreement or in any other written agreement between us and the participant, that the stock award will be subject to additional acceleration of vesting and exercisability in the event of a change in control (as defined in the 2018 Plan). In the absence of such a provision, no such acceleration of the stock award will occur in the event of a change in control. See “Equity Compensation Plan Information” for further information.

2018 Employee Stock Purchase Plan

Our board of directors adopted and our stockholders approved the 2018 Employee Stock Purchase Plan, or the ESPP, in September 2018. The ESPP became effective on September 25, 2018. The purpose of the ESPP is to secure the services of new employees, to retain the services of existing employees and to provide incentives for such individuals to exert maximum efforts toward our success and that of our affiliates. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Code. The ESPP authorizes the issuance of 140,000 shares of our common stock pursuant to purchase rights granted to our employees or to employees of any of our designated affiliates. The number of shares of our common stock reserved for issuance will automatically increase on January 1 of each calendar year, from January 1, 2019 through January 1, 2028, by the lesser of (i) 1% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year, and (ii) 250,000 shares; provided, that prior to the date of any such increase, our Board may determine that such increase will be less than the amount set forth in clauses (i) and (ii). If purchase rights granted under the ESPP terminate without having been exercised in full, the shares of our common stock not purchased under such purchase rights will again become available for issuance under the ESPP. See “Equity Compensation Plan Information” for further information.

401(k) Plan

We maintain a defined contribution retirement plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees may defer eligible compensation on a pre‑tax basis, up to the statutorily prescribed annual limits on contributions under the Code. Contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions. Employees are immediately and fully vested in their contributions. The 401(k) plan is intended to be qualified under Section 401(a) of the Code with the 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 the 401(k) plan and earnings on those contributions are not taxable to the employees until distributed from the 401(k) plan. Pursuant to our 401(k) plan, during 2019, we made 50% matching contributions on up to 6% of an employee’s eligible compensation.

Director Compensation

Cash and Equity Compensation

We maintain a non‑employee director compensation policy that is intended to provide a total compensation package that enables us to attract and retain qualified and experienced individuals to serve as directors and to align our directors’ interests with those of our stockholders. Effective as of June 19, 2019, the Board amended the non‑employee director compensation policy, or the Amended Policy, such that: 

Retainers are payable in arrears in four equal quarterly installments on the last day of each quarter, provided that the amount of such payment was prorated for any portion of such quarter that the director was not serving on the Board or the applicable committee.

In addition, pursuant to the Amended Policy, each non‑employee director elected to the Board receives an initial one‑time option to purchase 15,000 shares of our common stock. The shares subject to each such stock option will vest monthly over a three‑year period, subject to the director’s continued service as a director.

Further, on the date of each annual meeting of stockholders, each non‑employee director that continues to serve as a non‑employee member on the Board will receive an option to purchase 7,500 shares of our common stock. The shares subject to each such stock option will vest in equal monthly installments over the 12 months following the date of grant, provided that the grant will in any case be fully vested on the date of the next annual meeting of stockholders, subject to the director’s continued service on the Board through the date of such meeting. The exercise price of these options will equal the fair market value of our common stock on the date of grant.

TRANSACTIONS WITH RELATED PERSONS

Policies and Procedures Regarding Transactions with Related Parties

We have adopted a written Related Person Transactions Policy that sets forth our policies and procedures regarding the identification, review, consideration and approval or ratification of “related‑persons transactions.” For purposes of our policy only, a “related‑person transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which we and any “related person” are participants involving an amount that exceeds or will exceed $120,000 or, during such time as we qualify as a “smaller reporting company,” the lesser of (1) $120,000 or (2) 1% of the average of our total assets for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest. Transactions involving compensation for services provided to us as an employee, director, consultant or similar capacity by a related person are not covered by this policy. A “related person” is any executive officer, director or a holder of more than 5% of our capital stock, including any of their immediate family members, and any entity owned or controlled by such persons.

Certain Related‑Party Transactions

Below are our related‑party transactions since January 1, 2018 to which we were a party or will be a party, other than compensation, termination and change of control arrangements with our Named Executive Officers and directors, which are described where required under the sections entitled “Executive Officer and Director Compensation—Employment Arrangements” and “Director Compensation—Cash and Equity Compensation.”

We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that we would pay or receive, as applicable, in arm’s‑length transactions with unrelated third parties.

Pharmaron Beijing Co., Ltd. (China)

We currently contract with Pharmaron Beijing Co., Ltd. (China), or Pharmaron, to provide various medicinal chemistry research,  manufacturing development and clinical services related to our ongoing product candidates. We began utilizing Pharmaron as a service provider prior to our spin‑off in 2015, and this relationship has continued into 2019. In 2019, the Senior Vice President of Strategic Partnerships at Pharmaron, or the Pharmaron Executive, began sharing a household with the Company’s Chief Executive Officer, and as a result we now consider the agreements between us and Pharmaron to be related‑party transactions. The Pharmaron Executive is responsible for overseeing client relationships, but is not directly involved in our agreements with Pharmaron, and neither Dr. Perros nor the Pharmaron Executive have participated or will participate in the negotiation or the approval of the ongoing services provided thereunder. In 2018  and 2019, we paid Pharmaron approximately $7.7 million and $5.3 million, respectively, for services rendered pursuant to multiple agreements, and since our spin‑out in 2015, have paid Pharmaron approximately $20.2 million for services rendered.

Registration Rights Agreement

We are party to Registration Rights Agreement, dated September 14, 2018, with Clarus Lifesciences III, L.P., Frazier Life Sciences VIII, LP., Novo Holdings A/S, Pivotal bioVenture Partners Fund I, L.P., TPG Biotechnology Partners V, L.P.,  Sofinnova Venture Partners IX, L.P., AstraZeneca, Eventide Gilead Fund and Eventide Healthcare & Life Sciences Fund. This agreement provides that these holders are entitled to certain registration rights, including the right to demand that we file a registration statement or request that their shares be covered by a registration statement that we otherwise file. The registration rights will terminate upon the earliest of (1) the closing of a deemed liquidation event, as defined in our Certificate of Incorporation, as currently in effect, (2) with respect to each stockholder, the date when such stockholder can sell all of its registrable shares without limitation during a three‑month period without registration pursuant to Rule 144 of the Securities Act or another similar exemption under the Securities Act and (3) five years after the completion of our initial public offering.

Payment of Dividends on Preferred Stock

On September 28, 2018, we completed our initial public offering and issued an aggregate of 609,484 shares of our common stock as settlement of accrued dividends through September 27, 2018 due to the holders of our convertible preferred stock. Holders of our convertible preferred stock were entitled to receive a cumulative preferred dividend at a

fixed rate of 4.0% of the issuance price of such preferred stock annually. No dividends accrued after September 27, 2018. The following table summarizes such issuance:

Lease Agreement

In May 2015, our U.S. subsidiary, Entasis Therapeutics Inc., entered into a lease agreement with AstraZeneca Pharmaceuticals LP, an affiliate of AstraZeneca, which was amended effective February 2, 2018.  Under the terms of the lease, as amended, we lease a total of 20,062 square feet of office, research and development and laboratory facility space in Waltham, Massachusetts. The lease expires on December 31, 2022. For each of the years ended December 31, 2018 and December 31, 2019, we paid rent of $0.6 million under the lease agreement.

investment power of that security, and includes options and warrants that are currently exercisable within 60 days of April 1, 2020. Options to purchase shares of our common stock that are exercisable within 60 days of April 1, 2020, are deemed to be beneficially owned by the persons holding these options for the purpose of computing percentage ownership of that person, but are not treated as outstanding for the purpose of computing any other person’s ownership percentage. Except as indicated in the footnotes below, each of the beneficial owners named in the table below has, to our knowledge, sole voting and investment power with respect to all shares of common stock listed as beneficially owned by him or her, except for shares owned jointly with that person’s spouse.

We have based our calculation of beneficial ownership on 13,291,563 shares of our common stock outstanding as of April 1, 2020. Unless otherwise indicated, the address for each of the stockholders in the table below is c/o Entasis Therapeutics Holdings Inc., 35 Gatehouse Drive, Waltham, Massachusetts 02451.