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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No.        )

Filed by the Registrant ý   Filed by a Party other than the Registrant o

 

Check the appropriate box:

o

 

Preliminary Proxy Statement

o

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material Pursuant to §240.14a-12

 

KINIKSA PHARMACEUTICALS, LTD.

(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):

ý

 

No fee required.

o

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 

(1)

 

Title of each class of securities to which transaction applies:
        
 
    (2)   Aggregate number of securities to which transaction applies:
        
 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        
 
    (4)   Proposed maximum aggregate value of transaction:
        
 
    (5)   Total fee paid:
        
 

o

 

Fee paid previously with preliminary materials:

o

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount previously paid:
        
 
    (2)   Form, Schedule or Registration Statement No.:
        
 
    (3)   Filing Party:
        
 
    (4)   Date Filed:
        
 


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  Kiniksa Pharmaceuticals, Ltd.

 
  PROXY
STATEMENT
 
  Annual Meeting of Shareholders

 

 

 

 

 
  May 29, 2019
7:30 a.m. (Atlantic Time)


 


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KINIKSA PHARMACEUTICALS, LTD.
CLARENDON HOUSE
2 CHURCH STREET
HAMILTON HM11, BERMUDA

April 17, 2019

To Our Shareholders:

You are cordially invited to attend Kiniksa Pharmaceuticals, Ltd.'s 2019 Annual Meeting of Shareholders (the "Annual Meeting") at 7:30 a.m. Atlantic Time, on Wednesday, May 29, 2019, at the Fairmont Southampton Hotel located at 101 South Shore Road, Southampton SN02, Bermuda.

The Notice of Annual Meeting and proxy statement on the following pages describe the matters to be presented at the Annual Meeting. Please see the heading "Who Can Attend the Annual Meeting of Shareholders?" on page 4 of the proxy statement for more information about how to attend the meeting in person.

Whether or not you attend the Annual Meeting, it is important that your shares be represented and voted at the Annual Meeting. Therefore, I urge you to promptly vote and submit your proxy by phone, via the Internet, or, if you received paper copies of our proxy materials and a proxy card, by signing, dating and mailing the proxy card in the return envelope provided therewith. If you have received our Notice of Internet Availability of Proxy Materials, the instructions regarding how you can vote are contained in that notice. If you have received a proxy card, then instructions regarding how you can vote are contained on the proxy card. If you decide to attend the Annual Meeting, you will be able to vote in person, even if you have previously submitted your proxy.

Thank you for your support.

Sincerely,

Sanj K. Patel
Chief Executive Officer and Chairman of the Board


Table of Contents

Table of Contents

Notice of Annual Meeting of Shareholders    

Proxy Statement

 

1

Proposals

  1

Recommendations of the Board

  2

Information About This Proxy Statement

  2

Questions and Answers about the Annual Meeting of Shareholders

 

4

Proposals to be Voted On

 

9

Proposal 1:

  Election of Directors   9

Proposal 2:

  Appointment of Auditor, Delegation to Our Board of Directors, Through Our Audit Committee, of the Authority to Set the Auditor's Remuneration, and Ratification of the Appointment of Independent Registered Public Accounting Firm   14

Report of the Audit Committee of the Board of Directors

 

15

Independent Registered Public Accounting Firm Fees and Other Matters

 

16

Executive Officers

 

18

Corporate Governance

 

20

General

  20

Board Composition

  20

Director Independence

  20

Director Candidates

  21

Communications from Shareholders

  21

Board Leadership Structure and Role in Risk Oversight

  22

Board Evaluation

  23

Code of Ethics

  23

Attendance by Members of the Board of Directors at Meetings

  23

Committees of the Board

 

24

Audit Committee

  24

Compensation Committee

  25

Nominating and Corporate Governance Committee

  26

Executive and Director Compensation

 

27

Executive Compensation

  27

2018 Summary Compensation Table

  27

Narrative Disclosure to Summary Compensation Table

  27

Outstanding Equity Awards at 2018 Fiscal Year End

  30

Employment Agreements

  31

Director Compensation

  33

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Table of Contents continued

2018 Director Compensation Table

  34

Equity Compensation Plan Information

  35

Security Ownership of Certain Beneficial Owners and Management

 

36

Certain Relationships

 

39

Other Matters

 

43

Section 16(a) Beneficial Ownership Reporting Compliance

  43

Compensation Committee Interlocks and Insider Participation

  43

Shareholders' Proposals

  43

Other Matters to be Presented at the Annual Meeting

  44

Solicitation of Proxies

  44

Kiniksa's Annual Report on Form 10-K

  45

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Notice of Annual Meeting of Shareholders
To Be Held Wednesday, May 29, 2019

KINIKSA PHARMACEUTICALS, LTD.
CLARENDON HOUSE
2 CHURCH STREET
HAMILTON HM11, BERMUDA

Kiniksa Pharmaceuticals, Ltd.'s 2019 Annual Meeting of Shareholders (the "Annual Meeting") will be held at 7:30 a.m. Atlantic Time, on Wednesday, May 29, 2019, at the Fairmont Southampton Hotel located at 101 South Shore Road, Southampton SN02, Bermuda, for the following purposes:

GRAPHIC   To elect (a) Sanj K. Patel, Thomas R. Malley and Richard S. Levy as Class I Directors to serve until the 2022 Annual Meeting of Shareholders, and until their respective successors shall have been duly elected and qualified, (b) Stephen R. Biggar and Barry D. Quart as Class II Directors to serve until the 2020 Annual Meeting of Shareholders, and until their respective successors shall have been duly elected and qualified, and (c) Felix J. Baker, Tracey L. McCain and Kimberly J. Popovits as Class III Directors to serve until the 2021 Annual Meeting of Shareholders, and until their respective successors shall have been duly elected and qualified;

GRAPHIC

 

To approve the appointment of PricewaterhouseCoopers LLP as our auditor until the close of our next Annual Meeting of Shareholders, to delegate to our Board of Directors, through our Audit Committee, the authority to set the auditor's remuneration for such period, and to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019; and

GRAPHIC

 

To transact such other business as may properly come before the Annual Meeting or any continuation, postponement, or adjournment of the Annual Meeting.

Holders of record of our Class A common shares and Class B common shares as of the close of business on April 12, 2019 are entitled to notice of and to vote at the Annual Meeting, or any continuation, postponement or adjournment of the Annual Meeting. A complete list of these shareholders will be open to the examination of any shareholder during normal business hours at the Company's registered offices located at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda. The Annual Meeting may be continued or adjourned from time to time without notice other than by announcement at the Annual Meeting.

It is important that your shares be represented regardless of the number of shares you may hold. Whether or not you plan to attend the Annual Meeting in person, we urge you to vote your shares and submit your proxy via the toll-free telephone number or over the Internet, as described in the materials you received. If you received a paper copy of the proxy card by mail, you may sign, date and mail the proxy card in the return envelope provided therewith. Promptly voting your shares and submitting your proxy will help ensure the presence of a quorum at the Annual Meeting and will save us the expense of further solicitation. Voting your shares and submitting your proxy now will not prevent you from voting your shares at the Annual Meeting if you desire to do so.

By Order of the Board of Directors,

Thomas Beetham
Secretary

Hamilton, Bermuda
April 17, 2019


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Proxy Statement

KINIKSA PHARMACEUTICALS, LTD.
CLARENDON HOUSE
2 CHURCH STREET
HAMILTON HM11, BERMUDA

This proxy statement is furnished in connection with the solicitation by the Board of Directors of Kiniksa Pharmaceuticals, Ltd., a Bermuda exempted company, of proxies to be voted at our 2019 Annual Meeting of Shareholders (the "Annual Meeting") to be held 7:30 a.m. Atlantic Time, on Wednesday, May 29, 2019, at the Fairmont Southampton Hotel located at 101 South Shore Road, Southampton SN02, Bermuda, and at any continuation, postponement, or adjournment of the Annual Meeting. Holders of record of our Class A common shares ("Class A Shares") and Class B common shares ("Class B Shares" and, together with the Class A Shares, the "Common Shares"), as of the close of business on April 12, 2019 (the "Record Date"), will be entitled to notice of and to vote at the Annual Meeting and any continuation, postponement, or adjournment of the Annual Meeting. As of the Record Date, there were 19,010,408 Class A Shares outstanding and entitled to vote at the Annual Meeting and 4,638,855 Class B Shares outstanding and entitled to vote at the Annual Meeting. Each Class A Share is entitled to one vote and each Class B Share is entitled to ten votes on any matter presented to shareholders at the Annual Meeting.

This proxy statement and the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2018 (the "2018 Annual Report") will be released on or about April 17, 2019 to holders of record of our Common Shares as of the close of business on the Record Date.

In this proxy statement, "Kiniksa", "Company", "we", "us", and "our" refer to Kiniksa Pharmaceuticals, Ltd. together with its consolidated subsidiaries, unless the context otherwise requires.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON WEDNESDAY, MAY 29, 2019

This proxy statement and our 2018 Annual Report are available at http://www.proxyvote.com/

PROPOSALS

At the Annual Meeting, our shareholders will be asked:

GRAPHIC   To elect (a) Sanj K. Patel, Thomas R. Malley and Richard S. Levy as Class I Directors to serve until the 2022 Annual Meeting of Shareholders, and until their respective successors shall have been duly elected and qualified, (b) Stephen R. Biggar and Barry D. Quart as Class II Directors to serve until the 2020 Annual Meeting of Shareholders, and until their respective successors shall have been duly elected and qualified, and (c) Felix J. Baker, Tracey L. McCain and Kimberly J. Popovits as Class III Directors to serve until the 2021 Annual Meeting of Shareholders, and until their respective successors shall have been duly elected and qualified;

GRAPHIC

 

To approve the appointment of PricewaterhouseCoopers LLP as our auditor until the close of our next Annual Meeting of Shareholders, to delegate to our Board of Directors, through our Audit Committee, the authority to set the auditor's remuneration for such period, and to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019; and

GRAPHIC

 

To transact such other business as may properly come before the Annual Meeting or any continuation, postponement, or adjournment of the Annual Meeting.

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The audited financial statements of the Company for the fiscal year ended December 31, 2018, as approved by the Board of Directors, together with the report of the Company's independent registered public accounting firm and auditor with respect to those financial statements, will be presented at the Annual Meeting.

We know of no other business that will be presented at the Annual Meeting. If any other matter properly comes before the shareholders for a vote at the Annual Meeting, however, the proxy holders named on the Company's proxy card will vote your shares in accordance with their discretion.

RECOMMENDATIONS OF THE BOARD

The Company's Board of Directors ("Board" or "Board of Directors") recommends that you vote your shares as indicated below. If you return a properly completed proxy card, or vote your shares by telephone or through the Internet, your Common Shares will be voted on your behalf as you direct. If not otherwise specified, the Common Shares represented by the proxies will be voted, and the Board of Directors recommends that you vote:

GRAPHIC   FOR the election of Sanj K. Patel, Thomas J. Malley and Richard S. Levy as Class I Directors; Stephen R. Biggar and Barry D. Quart as Class II Directors; and Felix J. Baker, Tracey L. McCain and Kimberly J. Popovits as Class III Directors; and

GRAPHIC

 

FOR the appointment of PricewaterhouseCoopers LLP as our auditor until the close of our next Annual Meeting of Shareholders, the delegation to our Board of Directors, through our Audit Committee, of the authority to set the auditor's remuneration for such period, and the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019.

If any other matter properly comes before the shareholders for a vote at the Annual Meeting, the proxy holders named on the Company's proxy card will vote your shares in accordance with their discretion.

INFORMATION ABOUT THIS PROXY STATEMENT

Why you received this proxy statement. You are viewing or have received this proxy statement and the other proxy materials because our Board of Directors is soliciting your proxy to vote your shares at the Annual Meeting. This proxy statement includes information that we are required to provide to you under the rules of the Securities and Exchange Commission ("SEC") and that is designed to assist you in voting your shares.

Notice of Internet Availability of Proxy Materials. As permitted by SEC rules, Kiniksa is making this proxy statement and its 2018 Annual Report available to its shareholders electronically via the Internet. On or about April 17, 2019, we mailed to our shareholders a Notice of Internet Availability of Proxy Materials (the "Internet Notice") containing instructions on how to access this proxy statement and our 2018 Annual Report and on how to vote. If you receive an Internet Notice by mail, you will not receive a printed copy of our proxy materials in the mail unless you specifically request them. Instead, the Internet Notice instructs you on how to access and review all of the important information contained in this proxy statement and 2018 Annual Report. The Internet Notice also instructs you on how you may submit your proxy over the Internet. If you receive an Internet Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials contained in the Internet Notice.

Printed Copies of Our Proxy Materials. If you receive printed copies of our proxy materials, then instructions regarding how you can vote are contained on the proxy card included in the materials.

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Householding. The SEC's rules permit us to deliver a single Internet Notice or set of our proxy materials to one address shared by two or more of our shareholders. This delivery method is referred to as "householding" and can result in significant cost savings. Bermuda law does not permit householding for delivery to our registered holders, however, we expect brokers, banks and other nominees to take advantage of this opportunity and deliver only one Internet Notice or one set of our proxy materials to multiple shareholders who hold Common Shares in "street name" and who share an address, unless they receive contrary instructions from the impacted shareholders prior to the mailing date. If you would prefer to receive separate copies of the Internet Notice or our proxy materials, please contact your broker, bank or nominee. We will also deliver promptly, upon written or oral request, a separate copy of the Internet Notice or our proxy materials, as requested, to any shareholder at the shared address to which a single copy of those documents was delivered. If you prefer to receive separate copies of the Internet Notice or our proxy materials, contact your broker, bank or nominee or Broadridge Financial Solutions, Inc. at 1-866-540- 7095 or in writing at Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717.

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Questions and Answers about the Annual Meeting of Shareholders

WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING?

The Record Date for the Annual Meeting is April 12, 2019. You are entitled to vote at the Annual Meeting only if you were a holder of record of our Common Shares at the close of business on that date, or if you hold a valid proxy for the Annual Meeting. Each outstanding Class A Share is entitled to one vote and each outstanding Class B Share is entitled to ten votes on all matters brought before the Annual Meeting. At the close of business on the Record Date, there were 19,010,408 Class A Shares outstanding and entitled to vote at the Annual Meeting and 4,638,855 Class B Shares outstanding and entitled to vote at the Annual Meeting. We also have two classes of non-voting common shares, Class A1 common shares and Class B1 common shares, which do not have the right to vote on any matters at the Annual Meeting.

WHAT IS THE DIFFERENCE BETWEEN BEING A "RECORD HOLDER" AND HOLDING SHARES IN "STREET NAME"?

A record holder holds shares in his or her name. Shares held in "street name" means shares that are held in the name of a bank, broker or other nominee on a person's behalf.

AM I ENTITLED TO VOTE IF MY SHARES ARE HELD IN "STREET NAME"?

Yes. If your shares are held by a bank, a brokerage firm or other nominee, you are considered the "beneficial owner" of those shares held in "street name." If your shares are held in street name, our proxy materials are being provided to you by your bank, brokerage firm or other nominee, along with a voting instruction card if you received printed copies of our proxy materials. As the beneficial owner, you have the right to direct your bank, brokerage firm or other nominee how to vote your shares, and the bank, brokerage firm or other nominee is required to vote your shares in accordance with your instructions. If your shares are held in street name, you may not vote your shares in person at the Annual Meeting, unless you obtain a legal proxy from your bank, brokerage firm or other nominee.

HOW MANY SHARES MUST BE PRESENT TO HOLD THE ANNUAL MEETING?

A quorum must be present at the Annual Meeting for any business to be conducted. The presence at the Annual Meeting of two or more persons, in person or by proxy, representing the holders of a majority in voting power of the Common Shares issued and outstanding and entitled to vote on the Record Date will constitute a quorum.

WHO CAN ATTEND THE ANNUAL MEETING OF SHAREHOLDERS?

You may attend the Annual Meeting only if you are a Kiniksa shareholder who is entitled to vote at the Annual Meeting, or if you hold a valid proxy for the Annual Meeting. In order to be admitted into the Annual Meeting, you must present government-issued photo identification (such as a passport). If your bank, broker or other nominee holds your shares in "street name", you will also be required to present proof of beneficial ownership of our Common Shares on the Record Date, such as the Internet Notice you received from your bank, broker or other nominee, or a statement or letter from your bank, broker or other nominee showing that you owned our Common Shares at the close of business on the Record Date.

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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING OF SHAREHOLDERS

WHAT IF A QUORUM IS NOT PRESENT AT THE ANNUAL MEETING?

If within a half hour from the time appointed for a meeting, a quorum is not present then the meeting will be adjourned to the same day one week later, at the same time and place or to another day, time or place as the Secretary of the Company determines. Unless the meeting is adjourned to a specific date, time and place announced at the meeting being adjourned, notice of the resumption of the meeting shall be given to each shareholder entitled to attend and vote at the Annual Meeting.

WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE INTERNET NOTICE OR MORE THAN ONE SET OF PROXY MATERIALS?

It means that your Common Shares are held in more than one account at the transfer agent, share registrar and/or with banks, brokers or other nominees. Please vote all of your shares.

Shares Registered in Your Name. For shares registered in your name, to ensure that all of your shares are voted, for each Internet Notice or set of our proxy materials you received, please submit your proxy by phone, via the Internet, or, if you received printed copies of our proxy materials, by signing, dating and mailing the proxy card in the return envelope provided therewith.

Shares held in Street Name. If your shares are held through a bank, broker or other nominee, you will receive instructions on how to vote your shares from your bank, broker or other nominee. You must follow their instructions in order for your shares to be voted. Telephone and Internet voting also may be offered to shareholders owning shares through certain banks, brokers and other nominees. If your shares are not registered in your own name and you would like to vote your shares in person at the Annual Meeting, you should contact your bank, broker or other nominee to obtain a legal proxy and bring it to the Annual Meeting.

HOW DO I VOTE?

Shares Registered in Your Name. We recommend that shareholders vote by proxy even if they plan to attend the Annual Meeting and vote in person. If you are a registered shareholder, there are three ways to vote by proxy:

Telephone and Internet voting facilities for holders of record of our Common Shares will be available 24 hours a day and will close at 11:59 p.m., Eastern Time, on May 28, 2019.

Shares held in Street Name. If your shares are held in "street name" through a bank, broker or other nominee, you will receive instructions on how to vote your shares from the bank, broker or other nominee. You must follow their instructions in order for your shares to be voted. Telephone and Internet voting also may be offered to shareholders owning shares through certain banks, brokers and other nominees. If your shares are not registered in your own name and you would like to vote your shares in person at the Annual Meeting, you should contact your bank, broker or other nominee to obtain a legal proxy and bring it to the Annual Meeting.

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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING OF SHAREHOLDERS

CAN I CHANGE MY VOTE AFTER I SUBMIT MY PROXY?

Yes.

Shares Registered in Your Name. If you are a registered shareholder, you may revoke your proxy and change your vote by:

Your most recent proxy card or telephone or Internet proxy is the one that is counted. Your attendance at the Annual Meeting by itself will not revoke your proxy unless you give written notice of revocation to the Secretary before your proxy is voted or you vote in person at the Annual Meeting.

Shares held in Street Name. If your shares are held in "street name," you may change or revoke your voting instructions by following the specific directions provided to you by your bank, broker or other nominee, or you may vote in person at the Annual Meeting by obtaining a legal proxy from your bank, broker or other nominee and submitting the legal proxy along with your ballot.

WHO WILL COUNT THE VOTES?

A representative of Broadridge Financial Solutions, Inc., our inspector of election, will tabulate and certify the votes.

WHAT IF I DO NOT SPECIFY HOW MY SHARES ARE TO BE VOTED?

Shares Registered in Your Name. If you are a registered shareholder and you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote in accordance with the recommendations of the Board of Directors. The Board of Directors' recommendations are indicated under the heading "Recommendations of the Board" on page 2 of this proxy statement, as well as with the description of each proposal in this proxy statement.

Shares held in Street Name. If your shares are held in "street name" and you do not provide voting instructions to your bank, broker or other nominee, the bank, broker or other nominee (a) is entitled to vote your shares held for you as a beneficial owner on routine matters, such as approval of the appointment of PricewaterhouseCoopers LLP as our auditor until the close of our next Annual Meeting of Shareholders, the delegation to our Board of Directors, through our Audit Committee, of the authority to set the auditor's remuneration for such period, and the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019, in which case the bank, broker or other nominee would vote your shares in its discretion on these matters, and (b) is not entitled to vote your shares on non-routine matters, such as the election of directors, in which case a broker-non vote would occur.

WILL ANY OTHER BUSINESS BE CONDUCTED AT THE ANNUAL MEETING?

We know of no other business that will be presented at the Annual Meeting. If any other matter properly comes before the shareholders for a vote at the Annual Meeting, however, the proxy holders named on the Company's proxy card will vote your shares in accordance with their discretion.

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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING OF SHAREHOLDERS

HOW MANY VOTES ARE REQUIRED FOR THE APPROVAL OF THE PROPOSALS TO BE VOTED UPON AND HOW WILL ABSTENTIONS AND BROKER NON-VOTES BE TREATED?

Proposal

  Votes required   Effect of Votes Withheld / Abstentions
and Broker Non-Votes

Proposal 1: Election of Directors

  The plurality of the votes cast. This means that the three nominees receiving the highest number of affirmative "FOR" votes will be elected as Class I Directors, the two nominees receiving the highest number of affirmative "FOR" votes will be elected as Class II Directors and the three nominees receiving the highest number of affirmative "FOR" votes will be elected as Class III Directors.   Votes withheld and broker non-votes will have no effect.

Proposal 2: Appointment of Auditor, Delegation to Our Board of Directors, Through Our Audit Committee, of the Authority to Set the Auditor's Remuneration, and Ratification of Appointment of the Independent Registered Public Accounting Firm

  The affirmative vote of a majority in voting power of the votes cast affirmatively or negatively.   Abstentions will have no effect. We do not expect any broker non-votes on this proposal.

WHAT IS AN ABSTENTION AND HOW WILL VOTES WITHHELD AND ABSTENTIONS BE TREATED?

A "vote withheld," in the case of the proposal regarding the election of directors, or an "abstention," in the case of the proposal regarding the appointment of PricewaterhouseCoopers LLP as our auditor until the close of our next Annual Meeting of Shareholders, the delegation to our Board of Directors, through our Audit Committee, of the authority to set the auditor's remuneration for such period, and the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019, represents a shareholder's affirmative choice to decline to vote on a proposal. Votes withheld and abstentions are counted as present and entitled to vote for purposes of determining a quorum. Votes withheld have no effect on the election of directors and abstentions have no effect on the appointment of PricewaterhouseCoopers LLP as our auditor until the close of our next Annual Meeting of Shareholders, the delegation to our Board of Directors, through our Audit Committee, of the authority to set the auditor's remuneration for such period, and the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019.

WHAT ARE BROKER NON-VOTES AND DO THEY COUNT FOR DETERMINING A QUORUM?

Generally, broker non-votes occur when shares held in "street name" for a beneficial owner are not voted with respect to a particular proposal because the broker, bank or other nominee:

has not received voting instructions from the beneficial owner; and

lacks discretionary voting power to vote those shares.

A broker, bank or other nominee is entitled to vote shares held for a beneficial owner on routine matters, such as the appointment of PricewaterhouseCoopers LLP as our auditor until the close of our next Annual Meeting of Shareholders, the delegation to our Board of Directors, through our Audit Committee, of the authority to set the auditor's remuneration for such period, and the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019, without instructions from the beneficial owner of those shares. On the other hand, absent instructions from the beneficial owner of such shares, a broker, bank or other nominee is not entitled to vote shares held for a beneficial owner on

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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING OF SHAREHOLDERS

non-routine matters, such as the election of directors. Broker non-votes count for purposes of determining whether a quorum is present.

WHERE CAN I FIND THE VOTING RESULTS OF THE ANNUAL MEETING OF SHAREHOLDERS?

We plan to announce preliminary voting results at the Annual Meeting and we will report the final results in a Current Report on Form 8-K, which we intend to file with the SEC after the Annual Meeting.

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PROPOSALS TO BE VOTED ON

Proposal 1—Election of Directors

At the Annual Meeting, three Class I Directors are to be elected to hold office until the Annual Meeting of Shareholders to be held in 2022 and until their respective successors are elected and qualified or until such directors' earlier death, resignation or removal; two Class II Directors are to be elected to hold office until the Annual Meeting of Shareholders to be held in 2020 and until their respective successors are elected and qualified or until such directors' earlier death, resignation or removal; and three Class III Directors are to be elected to hold office until the Annual Meeting of Shareholders to be held in 2021 and until their respective successors are elected and qualified or until such directors' earlier death, resignation or removal.

We currently have eight directors on our Board, including three Class I Directors, two Class II Directors and three Class III Directors. Our current Class I Directors are Sanj K. Patel, who has served on our Board since our formation in July 2015, Thomas R. Malley, who has served on our Board since December 2016, and Richard S. Levy, who has served on our Board since March 2019. Our current Class II Directors are Stephen R. Biggar, who has served on our Board since October 2015, and Barry D. Quart, who has served on our Board since October 2015. Our current Class III Directors are Felix J. Baker, who has served on our Board since October 2015, Tracey L. McCain, who has served on our Board since February 2018, and Kimberly J. Popovits, who has served on our Board since February 2018. Our Board of Directors has nominated:

Proxies cannot be voted for a greater number of persons than the number of nominees named in this proposal.

The proposal regarding the election of directors requires the approval of a plurality of the votes cast. This means that the three nominees receiving the highest number of affirmative "FOR" votes will be elected as Class I Directors, the two nominees receiving the highest number of affirmative "FOR" votes will be elected as Class II Directors, and the three nominees receiving the highest number of affirmative "FOR" votes will be elected as Class III Directors. Votes withheld and broker non-votes are not considered to be votes cast and, accordingly, will have no effect on the outcome of the vote on this proposal.

As set forth in our Amended and Restated Bye-laws, our Board of Directors is currently divided into three classes with staggered terms. At the first general meeting of shareholders following the initial public offering of our Class A Shares (the "IPO"), which is this Annual Meeting, each Class I director will be elected for a three-year initial term of office, each Class II director will be elected for a one-year initial term of office, and each Class III director will be elected for a two-year initial term of office. Thereafter, members of each class shall serve three-year terms. The class structure following this Annual Meeting will be: Class I, whose next term expires at the 2022 Annual Meeting of Shareholders; Class II, whose next term expires at the 2020 Annual Meeting of Shareholders; and Class III, whose next term will expire at the 2021 Annual Meeting of Shareholders. The current Class I Directors are Sanj K. Patel, Thomas R. Malley and Richard S. Levy; the current Class II

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PROPOSAL 1—ELECTION OF DIRECTORS

Directors are Stephen R. Biggar and Barry D. Quart; and the current Class III Directors are Felix J. Baker, Tracey L. McCain and Kimberly J. Popovits.

Our Amended and Restated Bye-laws provide that the authorized number of directors may be changed only by resolution of the Board of Directors. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of our Board of Directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control of our Company. Our directors may be removed only for cause by the affirmative vote of the holders of at least a majority of our outstanding voting shares entitled to vote in the election of directors.

There are no family relationships among any of our executive officers or directors.

If you are a registered shareholder, and you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote the Common Shares represented thereby for the election as directors of the persons whose names and biographies appear below. If you hold your shares in "street name" and do not provide voting instructions to your bank, broker or other nominee, your bank, broker or other nominee is not entitled to vote your shares on non-routine matters, such as the election of directors, in which case a broker-non vote would occur with respect to your shares.

All of the persons whose names and biographies appear below are currently serving as our directors. In the event any of the nominees should become unable to serve, or for good cause will not serve, as a director, it is intended that votes will be cast for a substitute nominee designated by our Board of Directors or the Board may elect to reduce its size. The Board of Directors has no reason to believe that the nominees named below will be unable to serve if elected. Each of the nominees has consented to being named in this proxy statement and to serve if elected.

VOTE REQUIRED

The proposal regarding the election of directors requires the approval of a plurality of the votes cast. This means that the three nominees receiving the highest number of affirmative "FOR" votes will be elected as Class I Directors, the two nominees receiving the highest number of affirmative "FOR" votes will be elected as Class II Directors and the three nominees receiving the highest number of affirmative "FOR" votes will be elected as Class III Directors. Votes withheld and broker non-votes are not considered to be votes cast and, accordingly, will have no effect on the outcome of the vote on this proposal.

RECOMMENDATION OF THE BOARD OF DIRECTORS

GRAPHIC   The Board of Directors unanimously recommends a vote FOR the election of the below director nominees.

NOMINEES FOR CLASS I DIRECTORS (TERMS TO EXPIRE AT THE 2022 ANNUAL MEETING OF SHAREHOLDERS)

The current members of the Board of Directors who are also nominees for election to our Board of Directors as Class I Directors are as follows:

  Name

  Age   Served as a
Director Since
  Position(s) with Kiniksa

  Sanj K. Patel

  49   2015   Chief Executive Officer and Chairman of the Board

  Thomas R. Malley

  50   2016   Director

  Richard S. Levy, M.D.

  61   2019   Director

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PROPOSAL 1—ELECTION OF DIRECTORS

The principal occupations and business experience, for at least the past five years, of each Class I Nominee for election at the Annual Meeting are as follows:


GRAPHIC

 

SANJ K. PATEL

 

Age 49

 

 

 

 

 

Sanj K. Patel has served as our Chief Executive Officer and Chairman of our Board of Directors since our formation in July 2015. In June 2008, Mr. Patel formed Synageva BioPharma Corp. ("Synageva"), a biotechnology company focused on rare diseases, where he served as President and Chief Executive Officer and was a member of its board of directors until Synageva's sale to Alexion Pharmaceuticals, Inc. ("Alexion") in June 2015. Prior to Synageva, Mr. Patel held various roles at Genzyme Corporation ("Genzyme") from 1999 to 2008, most recently as head of U.S. Sales, Marketing and Commercial Operations for the Genzyme Therapeutics franchise. Mr. Patel previously served as a member of the boards of directors of Syros Pharmaceuticals, Inc., BioCryst Pharmaceuticals, Inc., and Intercept Pharmaceuticals, Inc. He is also the founder and director of the Sanj K. Patel and Family Foundation, a philanthropic organization that supports charities for patients with rare and devastating diseases. Mr. Patel holds a B.Sc. with Honors from the University of the South Bank, London and completed his management and business studies at Ealing College, London and his Pharmacology research program at the Wellcome Foundation. We believe that Mr. Patel is qualified to serve on our Board of Directors due to his extensive business, sales and product development experience in the biotechnology industry.


GRAPHIC

 

THOMAS R. MALLEY

 

Age 50

 

 

 

 

 

Thomas R. Malley has served as a member of our Board of Directors since December 2016. Since May 2007, Mr. Malley has served as the President of Mossrock Capital, LLC, a private investment firm. Mr. Malley serves on the boards of directors of BeiGene, Ltd. and Kura Oncology, Inc., and previously served on the boards of directors of OvaScience, Inc., Cougar Biotechnology, Inc., Puma Biotechnology, Inc. and Synageva. Mr. Malley holds a B.S. degree in Biology from Stanford University. We believe Mr. Malley is qualified to serve on our Board of Directors due to his experience working in the biopharmaceutical industry and experience working with and serving on the boards of directors of numerous biotechnology and pharmaceutical companies.


GRAPHIC

 

RICHARD S. LEVY, M.D.

 

Age 61

 

 

 

 

 

Richard S. Levy, M.D. has served on our Board of Directors since March 2019. Dr. Levy has been a Senior Advisor at Baker Bros. Advisors LP ("Baker Brothers"), a registered investment adviser focused on long-term investments in life-sciences companies, since December 2016. Prior to joining Baker Brothers, Dr. Levy served as Executive Vice President and Chief Drug Development Officer at lncyte Corporation, a biopharmaceutical company, from January 2009 until June 2016, and as Senior Vice President of Drug Development from August 2003 to January 2009. Dr. Levy serves on the boards of directors of Madrigal Pharmaceuticals, Inc., Aquinox Pharmaceuticals, Inc. and Kodiak Sciences, Inc. Dr. Levy is Board Certified in Internal Medicine and Gastroenterology and holds an A.B. in Biology from Brown University and an M.D. from the University of Pennsylvania School of Medicine, and completed his training in Internal Medicine at the Hospital of the University of Pennsylvania and a fellowship in Gastroenterology and Hepatology at UCLA. We believe Dr. Levy is qualified to serve on our Board of Directors due to his experience in the biotechnology industry, his medical and scientific training and experience working with and serving on the boards of directors of numerous biotechnology and pharmaceutical companies.

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PROPOSAL 1—ELECTION OF DIRECTORS

NOMINEES FOR CLASS II DIRECTORS (TERMS TO EXPIRE AT THE 2020 ANNUAL MEETING OF SHAREHOLDERS)

The current members of our Board of Directors who are also nominees for election to the Board of Directors as Class II Directors are as follows:

  Name

  Age   Served as a
Director Since
  Position with Kiniksa

  Stephen R. Biggar, M.D., Ph.D.

  48   2015   Director

  Barry D. Quart, Pharm.D.

  62   2015   Director

The principal occupations and business experience, for at least the past five years, of each Class II Director are as follows:


GRAPHIC

 

STEPHEN R. BIGGAR, M.D., PH.D.

 

Age 48

 

 

 

 

 

Stephen R. Biggar, M.D., Ph.D., has served as a member of our Board of Directors since October 2015. Dr. Biggar is a Partner at Baker Brothers. Dr. Biggar joined Baker Brothers in 2000. Dr. Biggar is currently chairman of the board of directors of ACADIA Pharmaceuticals Inc. and previously served on the board of directors of Synageva. Dr. Biggar received an M.D. and a Ph.D. in Immunology from Stanford University and a B.S. in Genetics from the University of Rochester. We believe Dr. Biggar is qualified to serve on our Board of Directors due to his experience in the biotechnology industry, his medical and scientific training and experience working with and serving on the boards of directors of numerous biotechnology and pharmaceutical companies.


GRAPHIC

 

BARRY D. QUART, PHARM.D.

 

Age 62

 

 

 

 

 

Barry D. Quart, Pharm.D., has served as a member of our Board of Directors since October 2015. Since 2013, Dr. Quart has served as the Chief Executive Officer and on the board of directors of Heron Therapeutics, Inc., a biotechnology company. In 2006, Dr. Quart co-founded Ardea Biosciences, Inc., a biotechnology company, and served as its President and Chief Executive Officer, and on its board of directors, from its inception through May 2013. Dr. Quart previously served on the board of directors of Synageva. Dr. Quart holds a Pharm.D. degree from the University of California, San Francisco. We believe Dr. Quart is qualified to serve on our Board of Directors due to his extensive management experience in the biotechnology industry and his experience developing pharmaceutical products.

NOMINEES FOR CLASS III DIRECTORS (TERMS TO EXPIRE AT THE 2021 ANNUAL MEETING OF SHAREHOLDERS)

The current members of our Board of Directors who are also nominees for election to the Board of Directors as Class III Directors are as follows:

  Name

  Age   Served as a
Director Since
  Position with Kiniksa

  Felix J. Baker, Ph.D.

  50   2015   Director

  Tracey L. McCain

  51   2018   Director

  Kimberly J. Popovits

  60   2018   Director

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PROPOSAL 1—ELECTION OF DIRECTORS

The principal occupations and business experience, for at least the past five years, of each Class III Director are as follows:


GRAPHIC

 

FELIX J. BAKER, PH.D.

 

Age 50

 

 

 

 

 

Felix J. Baker, Ph.D., has served as our Lead Independent Director and on our Board of Directors since October 2015. Dr. Baker is Co-Managing Member of Baker Brothers. Dr. Baker and his brother, Julian Baker, started their fund management careers when they co-founded a biotechnology investing partnership with the Tisch Family. In 2000, they founded Baker Brothers. Dr. Baker currently serves on the boards of directors of Alexion, Genomic Health, Inc. ("Genomic Health"), Seattle Genetics, Inc., and Kodiak Sciences Inc. and previously served on the board of directors of Synageva. Dr. Baker holds a B.S. and a Ph.D. in Immunology from Stanford University, where he also completed two years of medical school. We believe Dr. Baker is qualified to serve on our Board of Directors due to his extensive experience in the biotechnology industry and experience working with and serving on the boards of directors of numerous biotechnology and pharmaceutical companies.


GRAPHIC

 

TRACEY L. MCCAIN

 

Age 51

 

 

 

 

 

Tracey L. McCain has served as a member of our Board of Directors since February 2018. Since September 2016, Ms. McCain has served as Executive Vice President and Chief Legal and Compliance Officer of Blueprint Medicine Corporation ("Blueprint"), a biotechnology company. Prior to Blueprint, from January 2016 to September 2016, Ms. McCain was Senior Vice President and Head of Legal for Sanofi Genzyme, a global business unit of Sanofi S.A. ("Sanofi"). From May 1997 to September 2016, Ms. McCain held various roles at Genzyme, including as General Counsel following Genzyme's acquisition by Sanofi in 2011. Ms. McCain holds a J.D. from Columbia University School of Law and a B.A. from the University of Pennsylvania. We believe Ms. McCain is qualified to serve on our Board of Directors due to her experience working with numerous biotechnology and pharmaceutical companies.


GRAPHIC

 

KIMBERLY J. POPOVITS

 

Age 60

 

 

 

 

 

Kimberly J. Popovits has served as a member of our Board of Directors since February 2018. Since 2009, Ms. Popovits has served as the Chief Executive Officer of Genomic Health, and since 2012, has served as the Chairman of the board of directors of Genomic Health. Ms. Popovits also serves on the board of directors of MyoKardia, Inc., and previously served on the board of directors of ZS Pharma Inc. Ms. Popovits holds a B.A in Business from Michigan State University. We believe Ms. Popovits is qualified to serve on our Board of Directors due to her experience working with and serving on the boards of directors of numerous biotechnology and pharmaceutical companies.

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PROPOSALS TO BE VOTED ON
Proposal 2—Appointment of Auditor, Delegation to Our Board of Directors, Through Our Audit Committee, of the Authority to Set the Auditor's Remuneration, and Ratification of the Appointment of Independent Registered Public Accounting Firm

Our Audit Committee has selected PricewaterhouseCoopers LLP as our auditor and appointed PricewaterhouseCoopers LLP as our independent registered public accounting firm. Under Bermuda law, our shareholders have the right to appoint our auditor and set our auditor's remuneration. In addition, our Board of Directors determined that the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm be submitted to our shareholders for ratification. Although ratification of our appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm is not required, we value the opinions of our shareholders and believe that shareholder ratification of this appointment is a good corporate governance practice.

Therefore, we are submitting for approval at the Annual Meeting (a) the appointment of PricewaterhouseCoopers LLP as our auditor for statutory purposes under the Bermuda Companies Act of 1981, as amended, until the close of our next Annual Meeting of Shareholders, (b) the delegation to our Board of Directors, through the Audit Committee, of the authority to set the auditor's remuneration for such period, and (c) the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019.

PricewaterhouseCoopers LLP also served as our auditor and independent registered public accounting firm for the fiscal year ended December 31, 2018. Neither the accounting firm nor any of its members has any direct or indirect financial interest in or any connection with us in any capacity other than as our auditors, providing audit and non-audit related services. A representative of PricewaterhouseCoopers LLP is not expected to attend the Annual Meeting and, accordingly, will not have an opportunity to make a statement or be available to respond to appropriate questions from shareholders.

If the shareholders do not approve the appointment of PricewaterhouseCoopers LLP as our auditor and the delegation to our Board of Directors, through the Audit Committee, of the authority to set the auditor's remuneration, the Audit Committee will consider the appointment of another auditor and that auditor's remuneration, which will require the approval of our shareholders.

VOTE REQUIRED

This proposal requires the affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively. Abstentions are not considered to be votes cast and, accordingly, will have no effect on the outcome of the vote on this proposal. We do not expect any broker non-votes in connection with this proposal.

RECOMMENDATION OF THE BOARD OF DIRECTORS

GRAPHIC   The Board of Directors unanimously recommends a vote FOR the appointment of PricewaterhouseCoopers LLP as our Auditor until the close of our next Annual Meeting of Shareholders, the delegation to our Board of Directors, through our Audit Committee, of the authority to set the Auditor's remuneration for such period, and the ratification of the appointment of PricewaterhouseCoopers LLP as our Independent Registered Public Accounting Firm for the fiscal year ending December 31, 2019.

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Report of the Audit Committee of the Board of Directors

The Audit Committee has reviewed the Company's audited financial statements for the fiscal year ended December 31, 2018 and has discussed these financial statements with management and the Company's independent registered public accounting firm. The Audit Committee has also received from, and discussed with, the Company's independent registered public accounting firm various communications that such independent registered public accounting firm is required to provide to the Audit Committee, including the matters required to be discussed by statement on Auditing Standards No. 1301, as adopted by the Public Company Accounting Oversight Board ("PCAOB").

The Company's independent registered public accounting firm also provided the Audit Committee with a formal written statement required by PCAOB Rule 3526 (Communications with Audit Committees Concerning Independence) describing all relationships between the independent registered public accounting firm and the Company, including the disclosures required by the applicable requirements of the PCAOB regarding the independent registered public accounting firm's communications with the Audit Committee concerning independence. In addition, the Audit Committee discussed with the independent registered public accounting firm its independence from the Company. The Audit Committee also considered whether the independent registered public accounting firm's provision of certain other non-audit related services to the Company is compatible with maintaining such firm's independence.

Based on its discussions with management and the independent registered public accounting firm, and its review of the representations and information provided by management and the independent registered public accounting firm, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

Thomas R. Malley (Chair)

Tracey L. McCain

Barry D. Quart

The foregoing Report of the Audit Committee of the Board of Directors does not constitute soliciting material and shall not deemed filed with the SEC, and is not to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent specifically incorporated by reference therein.

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Independent Registered Public Accounting Firm Fees and Other Matters

The following table summarizes the fees of PricewaterhouseCoopers LLP, our auditor and independent registered public accounting firm, billed to us for each of the last two fiscal years for audit services and billed to us in each of the last two fiscal years for other services:

Fee Category

  2018   2017

Audit Fees

  $1,596,250   $401,250

Audit-Related Fees

  $0   $0

Tax Fees

  $0   $0

All Other Fees

  $2,756   $0

Total Fees

  $1,599,006   $401,250

AUDIT FEES

Audit fees consisted of fees billed for professional services performed by PricewaterhouseCoopers LLP for the audit of our annual consolidated financial statements, the review of our interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including the registration statement for our initial public offering and follow-on offering. Included in 2018 Audit Fees is an aggregate of $1,100,000 of fees billed in connection with our initial public offering which closed in 2018 and our follow-on offering which closed in 2019.

AUDIT-RELATED FEES

There were no such fees incurred in 2017 or 2018.

TAX FEES

There were no such fees incurred in 2017 or 2018.

ALL OTHER FEES

All other fees for 2018 represented the cost of accounting research tools licensed from PricewaterhouseCoopers LLP. There were no such fees incurred in 2017.

AUDIT COMMITTEE PRE-APPROVAL POLICY AND PROCEDURES

The Audit Committee has adopted a policy (the "Pre-Approval Policy") which sets forth the procedures and conditions pursuant to which audit and non-audit services proposed to be performed by the independent auditor may be pre-approved. The Pre-Approval Policy generally provides that we will not engage PricewaterhouseCoopers LLP to render any audit, audit-related, tax or permissible non-audit service unless the service is either (a) explicitly approved by the Audit Committee ("specific pre-approval") or (b) entered into pursuant to the pre-approval policies and procedures described in the Pre-Approval Policy ("general pre-approval"). Unless a type of service to be provided by PricewaterhouseCoopers LLP has received general pre-approval under the Pre-Approval Policy, it requires specific pre-approval by the Audit Committee or by a designated member of the Audit Committee to whom the committee has delegated the authority to grant pre-approvals. Any proposed services exceeding pre-approved cost levels or budgeted amounts will also require specific pre-approval. For both types of pre-approval, the Audit Committee will consider whether such services are consistent with the SEC's rules on auditor independence. The Audit

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Committee will also consider whether the independent auditor is best positioned to provide the most effective and efficient service, for reasons such as its familiarity with the Company's business, people, culture, accounting systems, risk profile and other factors, and whether the service might enhance the Company's ability to manage or control risk or improve audit quality. All such factors will be considered as a whole, and no one factor should necessarily be determinative. On an annual basis, the Audit Committee reviews and generally pre-approves the services (and related fee levels or budgeted amounts) that may be provided by PricewaterhouseCoopers LLP without first obtaining specific pre-approval from the Audit Committee. The Audit Committee may revise the list of general pre-approved services from time to time, based on subsequent determinations.

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Executive Officers

The following table identifies our current executive officers:

  Name
  Age
  Position

Sanj K. Patel (1)

    49   Chief Executive Officer and Chairman of the Board

Stephen Mahoney (2)

    48   President and Chief Operating Officer

Chris Heberlig (3)

    44   Executive Vice President, Chief Financial Officer and Treasurer

John F. Paolini, M.D., Ph.D. (4)

    54   Senior Vice President and Chief Medical Officer

Thomas Beetham (5)

    49   Executive Vice President, Chief Legal Officer and Corporate Development, and Secretary

(1) See biography on page 11 of this proxy statement.

(2) Stephen Mahoney has served as our Chief Operating Officer since our formation in July 2015 and as our President since June 2017. Prior to serving as our Chief Operating Officer, Mr. Mahoney held various roles at Synageva from 2012 to 2015, most recently as Chief Commercial Officer, where he was responsible for Synageva's global commercial operations. Prior to serving as Chief Commercial Officer, Mr. Mahoney was responsible for areas such as Global Sales Operations & Business Analytics, Commercial Supply Chain and Logistics, Global Procurement, Patient Services, Sales Training and Legal and Corporate Development at Synageva. Prior to Synageva, Mr. Mahoney held various roles at Genzyme from 2003 to 2012, most recently as the Regional Legal Director for the Asia Pacific region, where he was responsible for legal and healthcare compliance issues for multiple business units. Mr. Mahoney holds an M.B.A. from Boston College's Carroll School of Management, a J.D. from Boston College Law School and a B.A. from Colorado College.

(3) Chris Heberlig has served as our Chief Financial Officer since our formation in July 2015 and also serves as our Treasurer. Prior to serving as our Chief Financial Officer, Mr. Heberlig held various roles at Synageva from 2008 to 2015, most recently serving as Senior Vice President of Finance and Business Operations. In addition to serving as Senior Vice President of Finance and Business Operations, he led strategic tax planning, including overseeing the transfer of tax and intellectual property assets to Europe, and was responsible for global financial operations, facilities, as well as program management at Synageva. Mr. Heberlig holds an M.B.A. from Boston University School of Management and a B.A. from St. Lawrence University. Mr. Heberlig is also a Certified Public Accountant.

(4) John F. Paolini, M.D., Ph.D., has served as our Chief Medical Officer since August 2016. From August 2015 to August 2016, Dr. Paolini was Clinical Research Head of the Cardiovascular and Metabolic Diseases Research Unit at Pfizer Inc., a pharmaceutical company ("Pfizer"), where he was responsible for bringing forward programs from pre-clinical through early clinical development and proof of concept. Prior to Pfizer, from August 2011 to July 2015, Dr. Paolini served as Chief Medical Officer of Cerenis Therapeutics, a biotechnology company focused on cardiovascular and metabolic diseases, where he was responsible for designing and executing clinical trials and regulatory strategy for a portfolio of products. Dr. Paolini holds an M.D. and a Ph.D. from Duke University School of Medicine, a B.A. and a B.S. from Tulane University, and completed his internship, residency and fellowship in Internal Medicine and Cardiology at Brigham and Women's Hospital, Boston.

(5) Thomas Beetham has served as our Chief Legal Officer since our formation in July 2015 and is also responsible for corporate development and serves as our Secretary. Prior to serving as our Chief Legal Officer, Mr. Beetham held various roles at Synageva from October 2013 to June 2015, most recently serving as the Chief Legal Officer and Senior Vice President of Corporate Development, where he led the legal department and was responsible for business development

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EXECUTIVE OFFICERS

activities. Prior to joining Synageva, from 2011 to 2013, Mr. Beetham was the General Legal Counsel for New England Biolabs, Inc. ("Biolabs"). Before Biolabs, Mr. Beetham held various roles at Genzyme, most recently as the lead corporate attorney responsible for Genzyme's hematology/oncology and multiple sclerosis products, and before that was a corporate and transactional attorney with the law firm of Palmer & Dodge, LLP. Mr. Beetham holds a J.D. from Boston College Law School, an M.B.A. from Boston College's Carroll School of Management, and a B.A. from the University of Rochester.

None of our executive officers is related to any other executive officer or to any of our directors.

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Corporate Governance

GENERAL

Our Board of Directors has adopted Corporate Governance Guidelines, an Insider Trading Compliance Policy, a Code of Business Conduct and Ethics and charters for our Nominating and Corporate Governance Committee, Audit Committee and Compensation Committee to assist the Board of Directors in the exercise of its responsibilities and to serve as a framework for the effective governance of the Company. You can access our current committee charters, our Corporate Governance Guidelines and our Code of Business Conduct and Ethics in the "Corporate Governance" section of the "Investors & Media" page of our website located at www.kiniksa.com, or by writing to our Secretary c/o Kiniksa Pharmaceuticals Corp. at 100 Hayden Avenue, Lexington, MA 02421.

BOARD COMPOSITION

Our Board of Directors currently consists of eight members: Sanj K. Patel, Felix J. Baker, Stephen R. Biggar, Richard S. Levy, Thomas R. Malley, Tracey L. McCain, Kimberly J. Popovits and Barry D. Quart. As set forth in our Amended and Restated Bye-laws, the Board of Directors is currently divided into three classes with staggered terms. At the first general meeting of shareholders following our IPO, which is this Annual Meeting, each Class I director will be elected for a three-year initial term of office, each Class II director will be elected for a one-year initial term of office, and each Class III director will be elected for a two-year initial term of office. Thereafter, members of each class will serve three-year terms. At each annual meeting of shareholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Our Amended and Restated Bye-laws provide that the authorized number of directors may be changed only by resolution of the Board of Directors. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of our Board of Directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control of our Company. Our directors may be removed only for cause by the affirmative vote of the holders of at least a majority in voting power of our outstanding shares entitled to vote in the election of directors.

DIRECTOR INDEPENDENCE

All of our directors, other than Sanj K. Patel, qualify as "independent" in accordance with the listing requirements of The Nasdaq Global Select Market ("Nasdaq"). Mr. Patel does not qualify as independent because he is the Chief Executive Officer of our Company. The Nasdaq independence definition includes a series of objective tests, including that the director is not, and has not been for at least three years, one of our employees and that neither the director nor any of his or her family members has engaged in various types of business dealings with us. In addition, as required by Nasdaq rules, our Board of Directors has made a subjective determination as to each independent director that no relationships exist, which, in the opinion of our Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our Board of Directors reviewed and discussed information provided by the directors and us with regard to each director's business and personal activities and relationships as they may relate to us and our management. There are no family relationships among any of our directors or executive officers.

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CORPORATE GOVERNANCE

DIRECTOR CANDIDATES

Our Nominating and Corporate Governance Committee is primarily responsible for searching for qualified director candidates for election to the Board of Directors and filling vacancies on the Board of Directors. To facilitate the search process, the Nominating and Corporate Governance Committee may solicit current directors and executives of the Company for the names of potentially qualified candidates or ask directors and executives to pursue their own business contacts for the names of potentially qualified candidates. The Nominating and Corporate Governance Committee may also consult with outside advisors or retain search firms to assist in the search for qualified candidates, or consider director candidates recommended by our shareholders. Once potential candidates are identified, the Nominating and Corporate Governance Committee reviews the backgrounds of those candidates, evaluates candidates' independence from the Company and potential conflicts of interest and determines if candidates meet the qualifications desired by the Nominating and Corporate Governance Committee for candidates for election as a director. Felix J. Baker and Stephen R. Biggar were each elected to our Board of Directors in accordance with designation rights held by the Baker Brothers, which terminated in connection with the IPO.

In evaluating the suitability of individual candidates (both new candidates and current members of our Board of Directors), the Nominating and Corporate Governance Committee, in recommending candidates for election, and our Board of Directors, in approving (and, in the case of vacancies, appointing) such candidates, may take into account many factors, including: personal and professional integrity, ethics and values; experience in corporate management, such as serving as an officer or former officer of a publicly held company; strong finance experience; experience relevant to the Company's industry; experience as a board member or executive officer of another publicly held company; relevant academic expertise or other proficiency in an area of the Company's operations; diversity of expertise and experience in substantive matters pertaining to the Company's business relative to other board members; diversity of background and perspective, including, but not limited to, with respect to age, gender, race, place of residence and specialized experience; practical and mature business judgment, including, but not limited to, the ability to make independent analytical inquiries; and any other relevant qualifications, attributes or skills. Our Board of Directors evaluates each individual in the context of the board as a whole, with the objective of assembling a group that can best perpetuate the success of the business and represent shareholder interests through the exercise of sound judgment using its diversity of experience in these various areas. In determining whether to recommend a director for re-election, the Nominating and Corporate Governance Committee may also consider the director's past attendance at meetings and participation in and contributions to the activities of our Board of Directors.

Shareholders may recommend individuals to the Nominating and Corporate Governance Committee for consideration as potential director candidates by submitting the names of the recommended individuals, together with appropriate biographical information and background materials, to the Nominating and Corporate Governance Committee, Attention: Secretary, c/o Kiniksa Pharmaceuticals Corp., 100 Hayden Avenue, Lexington, MA 02421. In the event there is a vacancy, and assuming that appropriate biographical and background material has been provided on a timely basis, the 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.

COMMUNICATIONS FROM SHAREHOLDERS

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

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CORPORATE GOVERNANCE

Communications are forwarded to all directors if they relate to important substantive matters and include suggestions or comments that our Secretary, Lead Independent Director and Chairman of the Board consider to be important for the directors to know. In general, communications relating to corporate governance and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances and matters as to which we tend to receive repetitive or duplicative communications. Shareholders who wish to send communications on any topic to the Board of Directors should address such communications to the Board of Directors in writing: Attention: Secretary, c/o Kiniksa Pharmaceuticals Corp., 100 Hayden Avenue, Lexington, MA 02421.

BOARD LEADERSHIP STRUCTURE AND ROLE IN RISK OVERSIGHT

Our Amended and Restated Bye-laws and Corporate Governance Guidelines provide our Board of Directors with flexibility to combine or separate the positions of Chairman of the Board and Chief Executive Officer in accordance with its determination that utilizing one or the other structure would be in the best interests of our Company. At the current time, Sanj K. Patel, our Chief Executive Officer, serves as Chairman of the Board. Our Board of Directors has determined that combining the roles of Chairman of the Board and Chief Executive Officer is best for our company and our shareholders at this time because it promotes unified leadership by Mr. Patel and allows for a single, clear focus for management to execute the Company's strategy and business plans. If the Chairman of the Board is a member of management or does not otherwise qualify as independent, our Corporate Governance Guidelines provide for the appointment by the independent directors of a lead director ("Lead Independent Director"). Since our Chairman of the Board is a member of management, the independent directors elected Felix J. Baker as the Lead Independent Director. The Lead Independent Director's responsibilities include, but are not limited to, presiding over all meetings of the Board of Directors at which the Chairman of the Board is not present, including any executive sessions of the independent directors, approving the Board of Directors' meeting schedules and agendas, and acting as liaison between the independent directors of the Board of Directors and the Chief Executive Officer and the Chairman of the Board. Our Board of Directors is comprised of individuals with extensive experience with the biotechnology and pharmaceutical industries and, with the exception of Mr. Patel, is comprised of directors who meet the independence standards of Nasdaq. For these reasons and because of the strong leadership of Mr. Patel as Chairman of the Board and Chief Executive Officer and the counterbalancing role of the Lead Independent Director, our Board of Directors has concluded that our current leadership structure is appropriate at this time. However, our Board of Directors will continue to periodically review our leadership structure and may make such changes in the future as it deems appropriate.

Risk assessment and oversight are an integral part of our governance and management processes. Our Board of Directors encourages management to promote a culture that incorporates risk management into our corporate strategy and day-to-day business operations. Management discusses strategic and operational risks at regular management meetings and conducts specific strategic planning and review sessions during the year that include a focused discussion and analysis of the risks facing us. Throughout the year, senior management reviews these risks with the Board of Directors at regular Board meetings as part of management presentations that focus on particular business functions, operations or strategies, and presents the steps taken by management to mitigate or eliminate such risks. Our Board of Directors does not have a standing risk management committee, but rather administers this oversight function directly through the Board of Directors as a whole, as well as through various standing committees of the Board of Directors that address risks inherent in their respective areas of oversight. In particular, our Board of Directors is responsible for monitoring and assessing strategic risk exposure, and our Audit Committee is responsible for overseeing our major financial and cyber-security risk exposures and the steps our management has taken to monitor and control these exposures. The Audit Committee also monitors

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compliance with legal and regulatory requirements and considers and approves or disapproves any related person transactions. Our Nominating and Corporate Governance Committee monitors the effectiveness of the Corporate Governance Guidelines. Our Compensation Committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking. The Board of Directors does not believe that its role in the oversight of our risks adversely affects the Board's leadership.

BOARD EVALUATION

Our Corporate Governance Guidelines require the Nominating and Corporate Governance Committee to oversee periodic assessments of the Board of Directors and its committees.

CODE OF ETHICS

We have a written Code of Business Conduct and Ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions. We have posted a current copy of the code in the "Corporate Governance" section of the "Investors & Media" page of our website located at www.kiniksa.com. In addition, we intend to post on our website all disclosures that are required by law or the rules of Nasdaq concerning any amendments to, or waivers from, any provision of the code.

ATTENDANCE BY MEMBERS OF THE BOARD OF DIRECTORS AT MEETINGS

There were 5 meetings of the Board of Directors during the fiscal year ended December 31, 2018. During the fiscal year ended December 31, 2018, each director attended at least 75% of the aggregate of all meetings of the Board of Directors and meetings of the committees on which the Director served during the period in which he or she served as a director.

Currently, we do not maintain a formal policy regarding director attendance at the Annual Meeting; however, it is expected that directors will attend.

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Committees of the Board

Our Board of Directors has established three standing committees—Audit, Compensation, and Nominating and Corporate Governance—each of which operates under a written charter that has been approved by our Board and that are available in the "Corporate Governance" section of the "Investors & Media" page of our website located at www.kiniksa.com. Our Board of Directors has determined that (a) all of the members of each of the Board's three standing committees are independent as defined under Nasdaq rules, (b) all of the members of the Audit Committee of our Board of Directors (the "Audit Committee") meet the independence requirements of Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and (c) all members of the Compensation Committee of our Board of Directors (the "Compensation Committee") meet the heightened standard for independence specific to members of a compensation committee under Nasdaq rules.

The members of each of the Board committees and committee Chairs are set forth in the following chart.

Name
  Audit
  Compensation
  Nominating and
Corporate
Governance

Felix J. Baker, Ph.D.        Chair   X
Stephen R. Biggar, M.D., Ph.D.           Chair
Thomas R. Malley   Chair       X
Tracey L. McCain   X        
Kimberly J. Popovits       X    
Barry D. Quart, Pharm.D.   X   X    

AUDIT COMMITTEE

The responsibilities of the Audit Committee include:

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COMMITTEES OF THE BOARD

The members of the Audit Committee are Mr. Malley, Ms. McCain and Dr. Quart. Mr. Malley serves as the Chairperson of the committee. The members of the Audit Committee meet the requirements for financial literacy under the applicable rules of the SEC and Nasdaq. Our Board of Directors has determined that Mr. Malley is an "audit committee financial expert" as defined by Item 407(d)(5)(ii) of Regulation S-K.

The Audit Committee was formed in May 2018 in connection with our IPO and met 2 times in 2018.

COMPENSATION COMMITTEE

The Compensation Committee is responsible for assisting the Board in the discharge of its responsibilities relating to the compensation of our executive officers and directors, among other things. In fulfilling its purpose, the Compensation Committee's responsibilities include:

The Compensation Committee has the authority to retain or obtain the advice of compensation consultants, legal counsel and other advisors to assist in carrying out its responsibilities. During 2018, the Compensation Committee engaged Compensia, Inc., a compensation consulting firm ("Compensia"), to, among other things, assess and, as applicable, make recommendations with respect to the amount and types of compensation to provide our executives and directors and related matters. Compensia reported directly to the Compensation Committee. However, certain of our executive officers and other members of senior management consulted with Compensia (in its role as an advisor to the Compensation Committee) with respect to assessments of executive compensation and related matters to be provided to the committee. The Compensation Committee reviewed compensation assessments provided by Compensia comparing our compensation to that of a group of peer companies within our industry and met with Compensia to discuss compensation of our executive officers and to receive its input and advice. The Compensation Committee has considered the adviser independence factors required under SEC and Nasdaq rules as they relate to Compensia, which did not raise any conflicts of interest concerns in 2018.

The Compensation Committee may delegate its authority under its charter to one or more subcommittees as it deems appropriate from time to time as further described in its charter. The Compensation Committee may also delegate to one or more of our executive officers the authority to grant equity awards to certain employees, as further described in its charter and subject to the terms of our equity plans and any such delegation.

The members of our Compensation Committee are Dr. Baker, Ms. Popovits and Dr. Quart. Dr. Baker serves as the Chairperson of the committee.

The Compensation Committee was formed in May 2018 in connection with our IPO and met 3 times during 2018.

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COMMITTEES OF THE BOARD

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

The responsibilities of the Nominating and Corporate Governance Committee of our Board of Directors (the "Nominating and Corporate Governance Committee") include:

The members of our Nominating and Corporate Governance Committee are Dr. Biggar, Dr. Baker and Mr. Malley. Dr. Biggar serves as the Chairperson of the committee.

The Nominating and Corporate Governance Committee was formed in May 2018 in connection with our IPO and did not meet in 2018.

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Executive and Director Compensation

EXECUTIVE COMPENSATION

This section discusses the material components of the executive compensation program for our executive officers who are named in the "2018 Summary Compensation Table" below. In 2018, our "named executive officers" and their positions were as follows:

2018 SUMMARY COMPENSATION TABLE

The following table sets forth information concerning the compensation of our named executive officers for the years ended December 31, 2017 and 2018.

Name and principal position

  Year   Salary
($)
  Option
awards
($)(1)
  Non-equity
incentive
plan
compensation
($)
  All other
compensation
($)(2)
  Total
($)

Sanj K. Patel

  2018   740,469   5,814,588   742,500   11,000   7,308,557

Chief Executive Officer and Chairman of the Board

  2017   700,000   644,950   140,000   10,800   1,495,750

Stephen Mahoney

  2018   434,970   1,980,564   291,892   11,000   2,718,426

President and Chief Operating Officer

  2017   405,000   219,629   81,000   10,800   716,429

John F. Paolini, M.D., Ph.D

  2018   409,626   1,875,468   207,900   11,000   2,503,994

Senior Vice President and Chief Medical Officer

  2017   380,000   275,358   114,000   10,800   780,158

NARRATIVE DISCLOSURE TO SUMMARY COMPENSATION TABLE

The primary elements of compensation for our named executive officers are base salary, annual performance bonuses and long-term equity-based compensation awards. The named executive officers also generally participate in employee benefit plans and programs that we offer to our other full-time employees on the same basis.

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2018 Salaries

We pay our named executive officers a base salary that is intended to provide a fixed component of compensation reflecting the executive's skill set, experience, role and responsibilities. Base salaries for our named executive officers generally have been set at levels deemed necessary to attract and retain the named executive officers. Our Board of Directors approved increases in the base salaries of our named executive officers effective May 30, 2018. The following table shows the annual base salaries of our named executive officers for 2018 before and after the May 30, 2018 increases:

Name

  2018
Annual
Base
Salary
Before
Salary
Increase ($)
  2018
Annual
Base
Salary
After
Salary
Increase ($)

Sanj K. Patel

  725,000   750,000

Stephen Mahoney

  421,200   442,260

John F. Paolini, M.D., Ph.D. 

  391,400   420,000

In December 2018, the Compensation Committee approved the following increased annual base salaries for our named executive officers, effective January 1, 2019: $780,000 for Mr. Patel, $477,641 for Mr. Mahoney and $443,100 for Dr. Paolini.

2018 Bonuses

We offer our named executive officers the opportunity to earn annual performance bonuses to compensate them for attaining short-term company and individual goals as approved by our Board of Directors. For 2018, performance bonuses were based on attaining corporate goals relating to the overall business, generally comprised of goals with respect to: (a) the advancement of our multi-program portfolio of product candidates (carrying an 80% weighting), including development of product candidates, business development, intellectual property protection, manufacturing and supply, and organizational and corporate structure; (b) capitalization, financial management, and capital allocation (carrying a 15% weighting); and (c) compliance and training (carrying a 5% weighting). The 2018 target bonus amounts for our named executive officers, expressed as percentages of their respective annual base salaries, were 60% for Mr. Patel, 40% for Mr. Mahoney and 30% for Dr. Paolini.

In December 2018, the Compensation Committee reviewed performance against the 2018 bonus goals and approved cash bonuses for the named executive officers in the amounts set forth in the Non-Equity Incentive Plan Compensation column of the 2018 Summary Compensation Table above. In December 2018, the Compensation Committee also approved the following 2019 target bonus amounts for our named executive officers, expressed as percentages of their respective annual base salaries: 65% for Mr. Patel, 45% for Mr. Mahoney and 35% for Dr. Paolini.

Equity Compensation

We generally offer share options to our employees, including our named executive officers, as the long-term incentive component of our compensation program. Share options allow our employees to purchase our Class A Shares at a price equal to the fair market value per Class A Shares on the date of grant. In 2018, our named executive officers were granted the share options set forth in the table below. These share options were granted with exercise prices equal to the fair market value of

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our Class A Shares on the date of grant. Refer to our "Outstanding Equity Awards at 2018 Fiscal Year-End" table for additional information on the share option grants made in 2018.

Named executive officer

  2018 option
awards
granted

Sanj K. Patel

  564,182

Stephen Mahoney

  178,094

John F. Paolini, M.D., Ph.D. 

  173,094

In March 2019, the Compensation Committee approved and we granted options to purchase 187,000, 83,000 and 51,000 Class A Shares to Mr. Patel, Mr. Mahoney and Dr. Paolini, respectively, each at an exercise price of $17.92 per share. These options vest and become exercisable as to 25% of the total grant on the first anniversary of the vesting commencement date (the date of grant) and vest in thirty-six equal monthly installments thereafter.

Prior to our IPO, we issued share options under our 2015 Equity Incentive Plan (the "2015 Plan"). Effective on the effective date of the registration statement for our IPO, our Board of Directors adopted, and our shareholders approved, the 2018 Incentive Award Plan (the "2018 Plan"), in order to facilitate the grant of cash and equity incentives to directors, employees (including our named executive officers) and consultants and to enable us to obtain and retain services of these individuals, which we believe is essential to our long-term success. Following effectiveness of the 2018 Plan, we ceased making grants under our 2015 Plan. However, the 2015 Plan continues to govern the terms and conditions of the outstanding awards granted under it.

Other elements of compensation

We maintain a 401(k) retirement savings plan for our employees, including our named executive officers, who satisfy certain eligibility requirements. Our named executive officers are eligible to participate in the 401(k) plan on the same terms as other full-time employees. We provide matching contributions of 100% of the first 3% of each participant's salary contributed, plus 50% for each of the next 2% contributed. Employee 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 own contributions and the employer match. We believe that providing a vehicle for tax-deferred retirement savings though our 401(k) plan adds to the overall desirability of our executive compensation package and further incentivizes our employees, including our named executive officers, in accordance with our compensation policies.

All of our full-time employees, including our named executive officers, are eligible to participate in our health and welfare plans, including medical, dental and vision benefits, a healthcare spending account, a dependent care flexible spending account, short-term and long-term disability insurance and life insurance to the same extent as our other full-time employees generally, subject to the terms and eligibility requirements of those plans.

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We do not make gross-up payments to cover our named executive officers' personal income taxes that may pertain to any of the compensation or perquisites paid or provided by us.

OUTSTANDING EQUITY AWARDS AT 2018 FISCAL YEAR END

The following table summarizes the number of Class A Shares underlying outstanding equity incentive plan awards for each named executive officer as of December 31, 2018.

      Option awards(1)                  

      Number of   Number of           Share awards  

Name

  Vesting
start
date
  securities
underlying
unexercised
options (#)
exercisable
  securities
underlying
unexercised
options (#)
unexercisable
  Option
exercise
price
($)
  Option
expiration
date
  Number of
shares
that
have not
vested (#)
  Value of
shares
that
have not
vested ($)

Sanj K. Patel

  8/1/2015   419,809   83,959(2)   1.59   12/15/2025    

  6/28/2017   96,740   161,229(2)   3.80   6/28/2027    

  3/1/2018     439,182(3)   10.36   3/1/2028    

  9/20/2018     125,000(2)   30.93   9/20/2028    

            36,600(4)   1,028,094

            182,994(5)   5,140,301

Stephen Mahoney

 
8/1/2015
 
104,952
 
20,989(2)
 
1.59
 
12/15/2025
 
 

  6/28/2017   32,944   54,904(2)   3.80   6/28/2027    

  3/1/2018     128,094(3)   10.36   3/1/2028    

  9/20/2018     50,000(2)   30.93   9/20/2028    

            18,300(4)   514,047

            91,497(5)   2,570,151

John F. Paolini, M.D., Ph.D

 
8/15/2016
 
132,754
 
94,820(2)
 
1.86
 
9/13/2026
 
 

  6/28/2017   41,303   68,835(2)   3.80   6/28/2027    

  3/1/2018     128,094(3)   10.36   3/1/2028    

  9/20/2018     45,000(2)   30.93   9/20/2028    

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EMPLOYMENT AGREEMENTS

Through our wholly-owned U.S. subsidiary, Kiniksa Pharmaceuticals Corp., we have entered into employment agreements with each of our named executive officers. Certain key terms of these agreements are described below.

Sanj K. Patel

The term of our employment agreement with Mr. Patel lasts until either the Company or Mr. Patel terminates his employment by giving notice to the other party or his employment terminates due to his death. Pursuant to the employment agreement, Mr. Patel is entitled to receive an annual base salary of at least $750,000, subject to increase from time to time by the Company and the opportunity to earn an annual performance-based bonus based on actual corporate and individual performance against established objectives for each calendar year, with a minimum target bonus opportunity of 60% of his annual base salary. In addition, if Mr. Patel's employment with us is terminated as a result of his death or disability, by the Company without Cause, or by Mr. Patel for Good Reason, whether or not in connection with a change in control, he will be entitled to receive (a) a lump sum payment equal to (i) 200% of the sum of his annual base salary and the target bonus for the year of termination plus (ii) $25,000 and (b) a prorated portion of his target bonus for the year of termination. Also, if the termination occurs other than during the 12-month period following a change in control, Mr. Patel will be entitled to accelerated vesting of all of his then-unvested time-vesting equity that would have, absent termination, become vested within 18 months following termination, or if the termination occurs during the 12-month period following a change in control, Mr. Patel will be entitled to full accelerated vesting of all of his then-unvested time-vesting equity. Mr. Patel's right to receive these severance payments and benefits is subject to his execution and non-revocation of a release of claims for the benefit of the Company and his compliance with certain confidentiality obligations and restrictive covenants.

In the event of a change in control, Mr. Patel will become immediately 100% fully vested in each time-vesting equity award granted to him that is not assumed or substituted for in the change in control transaction.

Stephen Mahoney

The term of our employment agreement with Mr. Mahoney lasts until either the Company or Mr. Mahoney terminates his employment by giving notice to the other party or his employment terminates due to his death. Pursuant to the employment agreement, Mr. Mahoney is entitled to receive an annual base salary of $442,260, subject to change from time to time by the Company, and the opportunity to earn an annual performance-based bonus, with an initial target bonus opportunity of 40% of his annual base salary. In addition, if Mr. Mahoney's employment with us is terminated as a result of his death or disability, by the Company without Cause, or by Mr. Mahoney for Good Reason, he will be entitled to receive (a) a lump sum payment equal to his annual base salary plus $16,500, (b) a prorated portion (or, if the termination occurs during the 12 months following a change in control, 100%) of his target bonus for the year of termination and

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(c) accelerated vesting of all of his then-unvested time-vesting equity that would have, absent termination, become vested within 12 months following termination (or, if the termination occurs during the 12 months following a change in control, full accelerated vesting of all of his then-unvested time-vesting equity). Mr. Mahoney's right to receive these severance payments and benefits is subject to his execution and non-revocation of a release of claims for the benefit of the Company and his compliance with certain confidentiality obligations and restrictive covenants.

John F. Paolini, M.D., Ph.D.

The term of our employment agreement with Dr. Paolini lasts until either the Company or Dr. Paolini terminates his employment by giving notice to the other party or his employment terminates due to his death. Pursuant to the employment agreement, Dr. Paolini is entitled to receive an annual base salary of $420,000, subject to change from time to time by the Company, and the opportunity to earn a discretionary performance-based bonus, with a target bonus opportunity of 30% of his annual base salary. In addition, if Dr. Paolini's employment with us is terminated as a result of his death or disability or without Cause, he will be entitled to receive (a) a lump sum payment that is equivalent to 9 months of his annual base salary (or, if the termination occurs during the 12 months following a change in control, a lump sum payment that is equivalent to 12 months of his annual base salary) plus $16,500, (b) a prorated portion (or, if the termination occurs during the 12 months following a change in control, 100%) of his target bonus for the year of termination and (c) accelerated vesting of all of his then-unvested time-vesting equity that would have, absent termination, become vested within 12 months following termination (or, if the termination occurs during the 12 months following a change in control, full accelerated vesting of all of his then-unvested time-vesting equity). Dr. Paolini's right to receive these severance payments and benefits is subject to his execution and non-revocation of a release of claims for the benefit of the Company and his compliance with certain confidentiality obligations and restrictive covenants.

As used in the executive employment agreements, the following capitalized terms generally have the following meanings:

The term Cause generally means (i) gross negligence or willful misconduct in performance of the named executive officer's duties which results in material damage to us; (ii) the commission of any act of fraud, embezzlement or professional dishonesty with respect to our business; (iii) the commission of a felony or crime involving moral turpitude; (iv) the material breach of any provision of the executive employment agreement or any other written agreement between the named executive officer and us; or (v) the failure to comply with our lawful directives, which results in damage to us.

The term Good Reason generally means the occurrence of any of the following events without the named executive officer's written consent: (i) a demotion or, in the case of Mr. Patel only, the assignment of duties materially inconsistent with his title, position, status, reporting relationships, authority, duties or responsibilities with us; (ii) a requirement that the named executive officer relocate his primary reporting location to a location more than fifty (50) miles from our offices in Lexington, Massachusetts; (iii) our breach of the executive employment agreement with the named executive officer; (iv) our failure to comply with the provisions addressing each named executive officer's compensation and benefits, including the base salary, bonus compensation, and annual vacation, other than insubstantial or inadvertent failures not in bad faith that we remedy promptly after receiving notice thereof; (v) for Mr. Patel only, a material diminution in the budget over which he has responsibility; or (vi) for Mr. Mahoney only, a reduction of more than five percent of his base salary other than in connection with a reduction of similar magnitude to the base salaries of employees who are similarly situated.

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DIRECTOR COMPENSATION

Directors who are also our employees do not receive compensation for their service as directors. Prior to our IPO, directors who were affiliated with one of our principal shareholders did not receive compensation for their service as directors. For the portion of 2018 preceding our IPO, our other non-employee directors received cash payments of $10,000 per year, paid quarterly, and awards of our share options as compensation for their service as directors.

Effective on the effective date of the registration statement for our IPO, we adopted a compensation program for our non-employee directors, which our Board of Directors and the Compensation Committee may review from time to time. Under the program each non-employee director receives the following amounts for their services on our Board of Directors:

an option to purchase 37,965 Class A Shares upon the director's initial election or appointment to our Board of Directors that occurs after our IPO,

if the director has served on our Board of Directors for at least six months as of the date of an annual meeting of shareholders, an option to purchase 18,760 Class A Shares on the date of the annual meeting,

an annual director fee of $35,000, and

if the director serves on a committee of our Board of Directors or in the other capacities stated below, an additional annual fee as follows:

    Chairman of the Board of Directors or Lead Independent Director, $22,500,

    Chairman of the Audit Committee, $15,000,

    Audit Committee member other than the chairman, $7,500,

    Chairman of the Compensation Committee, $10,000,

    Compensation Committee member other than the chairman, $5,000,

    Chairman of the Nominating and Corporate Governance Committee, $8,000, and

    Nominating and Corporate Governance Committee member other than the chairman, $4,000.

Share options granted to our non-employee directors under the program have an exercise price equal to the fair market value of our Class A Shares on the date of grant and expire not later than ten years after the date of grant. The share options granted upon a director's initial election or appointment vest and become exercisable as to one-third of the shares on the first anniversary of the date of grant and as to the remainder in twenty-four substantially equal monthly installments thereafter, subject to the director continuing in service through each such vesting date. The share options granted annually to directors vest and become exercisable in 12 substantially equal monthly installments following the date of grant, subject to the director continuing in service through each such vesting date. In addition, all unvested share options will vest in full upon the occurrence of a change in control.

Director fees under the program are payable in arrears in four equal quarterly installments not later than the fifteenth day following the final day of each calendar quarter, provided that the amount of each payment are prorated for any portion of a quarter that a director is not serving on our Board of Directors and no fee is payable in respect of any period prior to the effective date of the registration statement for our IPO.

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2018 DIRECTOR COMPENSATION TABLE

The following table sets forth in summary form information concerning the compensation that was earned by or paid to each of our non-employee directors during the fiscal year ended December 31, 2018:

Name(2)

  Fees
earned
or paid in
cash ($)
  Option
awards
($)(1)
  Total ($)

Felix J. Baker, Ph.D

  41,708   216,640   258,348

Stephen R. Biggar, M.D., Ph.D

  25,083   216,640   241,723

Thomas R. Malley

  35,667   134,476   170,143

Tracey L. McCain

  28,958   317,752   346,710

Kimberly J. Popovits

  27,500   317,752   345,252

Barry D. Quart, Pharm.D

  31,875   134,476   166,351

The following table sets forth the aggregate numbers of share options (exercisable and unexercisable) held by our non-employee directors as of December 31, 2018. Refer to our "Outstanding Equity Awards at 2018 Fiscal Year-End" table for information regarding equity awards held by Mr. Patel as of December 31, 2018.

Name

  Option
awards(#)

Felix J. Baker, Ph.D

  18,760

Stephen R. Biggar, M.D., Ph.D

  18,760

Thomas R. Malley

  69,536

Tracey L. McCain

  45,748

Kimberly J. Popovits

  45,748

Barry D. Quart, Pharm.D

  69,536

For the portion of 2018 preceding our IPO, our non-employee directors who were not affiliated with one of our principal shareholders received awards of share options as a component of their compensation for their service as directors. In March 2018, Mr. Malley and Dr. Quart received grants of options to purchase 20,129 of our Class A Shares and Ms. McCain and Ms. Popovits received grants of options to purchase 45,748 of our Class A Shares. These shares options have exercise prices equal to $10.36, which our Board of Directors determined was the fair market value per Class A Share on the date of grant. The share options granted to Mr. Malley and Dr. Quart vest in 12 equal monthly installments following the effective date of grant. The share options granted to Ms. McCain and Ms. Popovits vest as to one-third of the underlying shares on March 1, 2019 and as to the remaining shares in 24 equal monthly installments thereafter. In May 2018, Dr. Baker and Dr. Biggar received grants of options to purchase 18,760 of our Class A Shares. These share options have exercise prices equal to the IPO price of $18.00 per Class A Share and vest in 12 equal monthly installments following the effective date of grant.

In March 2019, Richard S. Levy, M.D. was appointed to our Board of Directors. Dr. Levy receives the standard non-employee director compensation prorated, as applicable, for the length of his service during 2019, under our non-employee director compensation program.

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EXECUTIVE AND DIRECTOR COMPENSATION

EQUITY COMPENSATION PLAN INFORMATION

The following table provides information on our equity compensation plans as of December 31, 2018.

Plan Category
  Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options,
Warrants and
Rights

  Weighted
Average
Exercise Price
of Outstanding
Options
Warrants and
Rights

  Number of
Securities
Available for
Future
Issuance
Under Equity
Compensation
Plans(1)

Equity compensation plans approved by security holders(2)

  5,960,939(3)   $10.25(4)   3,824,325(5)

Equity compensation plans not approved by security holders

     

Total

  5,960,939   $10.25   3,824,325

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Table of Contents

Security Ownership of Certain Beneficial Owners and Management

COMMON SHARES

The following table sets forth information with respect to the beneficial ownership of our Class A Shares, Class A1 common shares, Class B Shares and Class B1 common shares, as of March 31, 2019, by:

The number of shares beneficially owned by each shareholder is determined under rules issued by the SEC. Under these rules, beneficial ownership includes any shares over which the individual or entity has sole or shared voting power or investment power. Applicable percentage ownership is based on 18,989,580 Class A Shares outstanding, 4,638,855 Class B Shares outstanding, 14,995,954 Class A1 common shares outstanding, and 16,057,618 Class B1 common shares outstanding, each as of March 31, 2019. In computing the number of shares beneficially owned by an individual or entity and the percentage ownership of that person, common shares subject to options or other rights held by such person that are currently exercisable or will become exercisable within 60 days of March 31, 2019 are considered outstanding, although these shares are not considered outstanding for purposes of computing the percentage ownership of any other person.

Unless noted otherwise, the address of all listed shareholders is c/o Kiniksa Pharmaceuticals Corp., 100 Hayden Avenue, Lexington, Massachusetts 02421. Each of the shareholders listed has sole voting and investment power with respect to the shares beneficially owned by the shareholder unless noted otherwise, subject to community property laws where applicable.

Our Class B Shares are convertible into Class A Shares or Class B1 common shares at any time at the option of the holder, with prior notice to us, on a one-for-one basis. Accordingly, each holder of Class B Shares is deemed to be the beneficial owner of, in each case, an equal number of Class A Shares and Class B1 common shares, in addition to any other Class A Shares or Class B1 common shares beneficially owned by such holder.

Our Class A1 common shares are convertible into Class A Shares at any time at the option of the holder, with prior notice to us, on a one-for-one basis, unless, immediately prior to or following such conversion, the holder and its affiliates beneficially own, or would beneficially own, more than 4.99% of our issued and outstanding Class A Shares, in which case such notice would need to be provided to us at least 61 days prior to any such conversion. Accordingly, each holder of Class A1 common shares is deemed to be the beneficial owner of the number of Class A Shares that would result in such holder owning up to 4.99% of the issued and outstanding Class A Shares, in addition to any other Class A Shares beneficially owned by such holder.

Our Class B1 common shares are convertible into Class A Shares or Class B Shares at any time at the option of the holder, with prior notice to us, on a one-for-one basis, unless, immediately prior to or following such conversion, the holder and its affiliates beneficially own, or would beneficially own, more than 4.99% of our issued and outstanding Class A Shares, in which case such notice would need to be provided to us at least 61 days prior to any such conversion. Accordingly, each holder of Class B1 common shares is deemed to be the beneficial owner of the number of Class A Shares and Class B Shares, in each case, that would result in such holder owning up to 4.99% of our

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Table of Contents

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

issued and outstanding Class A Shares, in addition to any other Class A Shares or Class B Shares beneficially owned by such holder.

    Class A
common shares
    Class A 1
common
shares
    Class B common
shares
    Class B1
common shares
    % of total  

    Shares     %     Shares     %     Shares     %     Shares     %     voting power  

5% Shareholders

                                                       

Arrowmark Funds(1)

   
1,235,492
   
6.51

%
 
   
   
   
   
   
   
1.89

%

Deerfield Special Situations Fund, L.P.(2)

   
1,128,822
   
5.94

%
 
   
   
   
   
   
   
1.73

%

HH RSV-XVII Holdings Limited(3)

   
1,388,888
   
7.31

%
 
4,347,639
   
29.0

%
 
   
   
   
   
2.12

%

Entities managed by Baker Bros. Advisors LP(4)

   
3,037,520
   
15.96

%
 
9,753,392
   
65.0

%
 
   
   
16,057,618
   
100

%
 
4.59

%

Officers and Directors

   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Sanj K. Patel(5)

   
947,580
   
4.84

%
 
   
   
1,526,160
   
32.90

%
 
1,526,160
   
8.68

%
 
23.89

%

Thomas Beetham(6)

   
664,003
   
3.39

%
 
   
   
414,157
   
8.93

%
 
414,157
   
2.51

%
 
6.46

%

Carsten Boess(7)

   
689,939
   
3.52

%
 
   
   
473,035
   
10.20

%
 
473,035
   
2.86

%
 
7.36

%

Chris Heberlig(8)

   
689,012
   
3.52

%
 
   
   
440,920
   
9.50

%
 
440,920
   
2.67

%
 
6.87

%

Rasmus Holm-Jorgensen(9)

   
503,082
   
2.59

%
 
   
   
340,960
   
7.35

%
 
340,960
   
2.08

%
 
5.31

%

Stephen Mahoney(10)

   
956,291
   
4.82

%
 
   
   
656,027
   
14.14

%
 
656,027
   
3.93

%
 
10.21

%

John F. Paolini, M.D., Ph.D.(11)

   
233,147
   
1.21

%
 
   
   
   
   
   
   
 

Felix J. Baker, Ph.D.(4)

   
3,037,520
   
15.96

%
 
9,753,392
   
65.0

%
 
   
   
16,057,618
   
100

%
 
4.59

%

Stephen R. Biggar, M.D., Ph.D.(12)

   
   
   
   
   
   
   
   
   
 

Thomas R. Malley(13)

   
118,517
   
*
   
   
   
   
   
   
   
*
 

Tracey L. McCain(14)

   
19,062
   
*
   
   
   
   
   
   
   
 

Kimberly J. Popovits(15)

   
19,062
   
*
   
   
   
   
   
   
   
 

Barry D. Quart, Pham. D.(16)

   
52,954
   
*
   
   
   
   
   
   
   
 

Richard S. Levy

   
   
   
   
   
   
   
   
   
 

All executive officers and directors as a group (12 persons)(17)

   
6,737,148
   
33.75

%
 
9,753,392
   
65.0

%
 
3,037,264
   
65.47

%
 
19,094,882
   
100

%
 
52.01

%
*
Less than one percent.

(1)
Consists of (a) 28,446 Class A Shares held directly by ArrowMark Fundamental Opportunity Fund, L.P. ("Opportunity Fund"), (b) 224,726 Class A Shares held directly by Meridian Growth Fund ("Meridian Growth"), (c) 22,756 Class A Shares held directly by Lookfar Investments LLC ("Lookfar"), (d) 56,892 Class A Shares held directly by Iron Horse Investments LLC ("Iron Horse"), (e) 112,082 Class A Shares held directly by THB Iron Rose LLC ("Rose"), (f) 1,278 Class A Shares held directly by THB Iron Rose LLC, Life Science Portfolio ("Life Science") and (g) 789,312 Class A Shares held directly by ArrowMark Colorado Holdings LLC ("ArrowMark Colorado") (collectively, the "ArrowMark Funds"). ArrowMark Partners GP, LLC ("ArrowMark GP") is the general partner of Opportunity Fund and David Corkins is the managing member of ArrowMark GP. ArrowMark Colorado is investment advisor to Meridian, Meridian Growth, Lookfar, Iron Horse, Rose and Life Science (collectively, the "ArrowMark Colorado Funds"). Mr. Corkins is a managing member of ArrowMark Colorado and Mr. Yao is a portfolio manager of ArrowMark Colorado. Mr. Corkins may be considered the beneficial owner of the shares held by the ArrowMark Funds and Mr. Yao may be considered the beneficial owner of the shares held by ArrowMark Colorado. The principal business address of the ArrowMark Funds is 100 Fillmore Street, Suite 325, Denver, Colorado 80206. The foregoing information is based on a Schedule 13G filed on February 14, 2019 and information known to us.

(2)
Consists of (a) 745,284 Class A Shares held by Deerfield Partners, L.P. ("Deerfield Partners") and (b) 383,538 Class A Shares held by Deerfield Special Situations Fund, L.P. ("Deerfield Special" together with Deerfield Partners, the "Deerfield Funds"). Deerfield Mgmt, L.P. is the general partner of the Deerfield Funds. Deerfield Management Company, L.P. is the investment manager of the Deerfield Funds. James E. Flynn is the sole member of the general partner of each of Deerfield Mgmt, L.P. and Deerfield Management Company, L.P. Deerfield Mgmt, L.P., Deerfield Management and Mr. Flynn may be deemed to be the beneficial owners of the shares owned by Deerfield Funds. Deerfield Mgmt, L.P., Deerfield Management Company, L.P. and Mr. Flynn disclaim beneficial ownership of such shares except to the extent of its or his pecuniary interest therein. The address for the Deerfield Funds is 780 Third Avenue, 37th Floor, New York, NY 10017. The foregoing information is based on a Schedule 13G/A filed on February 12, 2019 and information known to us.

(3)
Consists of (a) 1,388,888 Class A Shares and (b) 4,347,639 Class A1 common shares held directly by HH RSV-XVII Holdings Limited ("HH RSV-XVII"). Hillhouse Fund III, L.P. ("Fund III") is the sole owner of HH RSV-XVII and Hillhouse Capital Management, Ltd. ("Hillhouse Capital Management") acts as the sole management company of Fund III. Wei Cao is the managing director of Hillhouse Capital Management. As a result, Fund III, Hillhouse Capital Management and Wei Cao may be considered beneficial owners of the shares held by HH RSV-XVII. The address of HH RSV-XVII is Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital Road, Grand Cayman, KYI-9008, Cayman Islands. The foregoing is based on information known to us.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(4)
Consists of (a) 2,700,597 Class A Shares held directly by Baker Brothers Life Sciences, L.P. ("BBLS"), (b) 299,403 Class A Shares held by 667, L.P. ("667" and with BBLS, the "Baker Funds") (c) 8,837,349 Class A1 common shares held directly by BBLS, (d) 916,043 Class A1 common shares held by 667, (e) 14,658,102 Class B1 common shares held directly by BBLS, (f) 1,399,516 Class B1 common shares held directly by 667, (g) 18,760 Class A Shares that Felix J. Baker (a member of our board) has the right to acquire within 60 days following March 31, 2019 pursuant to the exercise of share options, and (h) 18,760 Class A Shares that Stephen R. Biggar (a member of our board) has the right to acquire within 60 days following March 31, 2019 pursuant to the exercise of share options. Dr. Baker is a managing member of Baker Bros. Advisors LP (the "Advisors"). Baker Bros. Advisors (GP) LLC ("Adviser GP") is the sole general partner of the Adviser. Pursuant to management agreements, as amended, among the Adviser, the Baker Funds, and their respective general partners, the Baker Funds' respective general partners relinquished to the Adviser all discretion and authority with respect to the investment and voting power of the securities held by the Funds, and thus the Adviser has complete and unlimited discretion and authority with respect to the Funds' investments and voting power over investments. The Adviser GP, Dr. Baker and Julian C. Baker as principals of the Adviser GP, and the Adviser may be deemed to be beneficial owners of securities of the Issuer directly held by the Funds, and may be deemed to have the power to vote or direct the vote of and the power to dispose or direct the disposition of such securities. Dr. Baker disclaims beneficial ownership of such shares except to the extent of any pecuniary interest therein. The address for the Baker Funds is 860 Washington Street, 3rd Floor, New York, NY 10014. The foregoing information is based on a Schedule 13D/A filed on February 6, 2019 and information known to us.

(5)
Consists of 245,685 Class A Shares held directly by Mr. Patel and 109,795 Class A Shares held by Mr. Patel as trustee for the Manisha S. Patel 2016 Irrevocable Trust. Mr. Patel also (a) holds 1,526,160 Class B Shares and (b) has the right to acquire 677,879 Class A Shares within 60 days following March 31, 2019 pursuant to the exercise of share options. In accordance with certain contractual arrangements entered into between Mr. Patel and the Company, Mr. Patel would not be entitled to convert his Class B Shares into Class A Shares or exercise his share options in less than 61 days prior written notice to us, if immediately following such conversion or exercise, he would beneficially own more than 4.99% of our issued and outstanding Class A Shares in addition to any other Class A Shares beneficially owned by him. Accordingly, as of March 31, 2019, Mr. Patel is deemed to be the beneficial owner of up to 592,100 Class A Shares that he may acquire upon conversion of his Class B Shares or exercise of his share options or any combination thereof.

(6)
Consists of (a) 79,589 Class A Shares, (b) 414,157 Class B Shares and (c) 170,257 Class A Shares that Mr. Beetham has the right to acquire within 60 days following March 31, 2019 pursuant to the exercise of share options.

(7)
Consists of (a) 79,589 Class A Shares, (b) 473,035 Class B Shares, and (c) 137,315 Class A Shares that Mr. Boess has the right to acquire within 60 days following March 31, 2019 pursuant to the exercise of share options.

(8)
Consists of (a) 42,991 Class A Shares held directly by Mr. Heberlig and 36,598 Class A Shares held by Sandra C. Heberlig, Mr. Heberlig's spouse, as trustee for the Christopher J. Heberlig 2017 Irrevocable Trust, (b) 440,920 Class B Shares, and (c) 168,503 Class A Shares that Mr. Heberlig has the right to acquire within 60 days following March 31, 2019 pursuant to the exercise of share options.

(9)
Consists of (a) 64,949 Class A Shares, (b) 340,960 Class B Shares, and (c) 97,173 Class A Shares that Mr. Holm-Jorgensen has the right to acquire within 60 days following March 31, 2019 pursuant to the exercise of share options.

(10)
Consists of (a) 79,589 Class A Shares held directly by Mr. Mahoney and 36,598 Class A Shares held by Krisha S. Mahoney, Mr. Mahoney's spouse, as trustee for the Stephen F. Mahoney 2016 Irrevocable Trust, (b) 656,027 Class B Shares, and (c) 184,077 Class A Shares that Mr. Mahoney has the right to acquire within 60 days following March 31, 2019 pursuant to the exercise of share options.

(11)
Consists of 233,147 Class A Shares that Dr. Paolini has the right to acquire within 60 days following March 31, 2019 pursuant to the exercise of share options.

(12)
Dr. Biggar has the right to acquire 18,760 Class A Shares within 60 days following March 31, 2019 pursuant to the exercise of share options. However, the policy of the Baker Funds and the Advisors does not permit Dr. Biggar to receive compensation for serving on our Board of Directors, and the Baker Funds are instead entitled to the pecuniary interest in any compensation received for his service. Therefore, Dr. Biggar has no voting or dispositive power and no pecuniary interest in these share options.

(13)
Consists of (a) 71,967 Class A Shares held by Mossrock Capital, LLC ("Mossrock") and (b) 46,550 Class A Shares that Mr. Malley has the right to acquire within 60 days following March 31, 2019 pursuant to the exercise of share options. Mr. Malley is the president of Mossrock and may be deemed to beneficially own the shares owned by Mossrock. The address of Mossrock is 19 Martin Lane, Englewood, CO 80113.

(14)
Includes 19,062 Class A Shares that Ms. McCain has the right to acquire within 60 days following March 31, 2019 pursuant to the exercise of share options.

(15)
Includes 19,062 Class A Shares that Ms. Popovits has the right to acquire within 60 days following March 31, 2019 pursuant to the exercise of share options.

(16)
Includes 52,954 Class A Shares that Dr. Quart has the right to acquire within 60 days following March 31, 2019 pursuant to the exercise of share options.

(17)
Consists of (a) 702,812 Class A Shares, (b) 9,753,392 Class A1 common shares, (c) 3,037,264 Class B Shares, (d) 16,057,618 Class B1 common shares, and (e) 1,556,057 Class A Shares that all executive officers and directors as a group have the right to acquire within 60 days following March 31, 2019 pursuant to the exercise of share options.

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Table of Contents

Certain Relationships

POLICIES AND PROCEDURES FOR RELATED PERSON TRANSACTIONS

Our Board of Directors has adopted a written Related Person Transaction Policy and Procedures, setting forth the policies and procedures for the review and approval or ratification of related person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K of the Securities Act of 1933, as amended (the "Securities Act"), any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we (including any of our subsidiaries) are, were or will be a participant, where the amount involved exceeds $120,000 in any fiscal year and a related person has, had or will have a direct or indirect material interest. Our finance team is primarily responsible for developing and implementing procedures to obtain information regarding potential related person transactions and for determining whether a related person transaction requiring compliance with our policy exists. Our Chief Financial Officer then presents the related person transaction to our Audit Committee. In reviewing and approving any such transaction, our Audit Committee is tasked to consider all relevant facts and circumstances, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in an arm's length transaction, the extent of the related person's interest in the transaction and the conflicts of interest and corporate opportunity provisions under our Code of Business Conduct and Ethics. No director may participate in approval of a related person transaction in which he or she is a related person. Our Audit Committee may also ratify related person transactions that were entered into by management because pre-approval was not feasible and transactions that were not initially recognized as related person transactions. If these transactions are not ratified, our management must make all reasonable efforts to cancel or annul such transactions. Our management must update our Audit Committee on material changes to any approved or ratified related person transaction and provide an annual status report on all then-current related person transactions. The following are certain transactions, arrangements and relationships with our directors, executive officers and shareholders owning 5% or more of our outstanding Class A Shares or Class B Shares, or both.

PRIVATE PLACEMENT

In February 2019, one or more entities managed by Baker Brothers purchased 2,000,000 of our non-voting Class A1 common shares in a private placement exempt from the registration requirements of the Securities Act, at a price per share of $18.26.

PARTICIPATION IN OUR INITIAL PUBLIC OFFERING

In May 2018, Baker Brothers and HH RSV-XVII Holdings Limited, each a beneficial owner of more than 5% of our Class A Shares, purchased 3,000,000 and 1,388,888 Class A Shares, respectively, in our IPO at the IPO price of $18.00 per share.

SERIES C PREFERRED SHARE FINANCING

In February 2018, we issued and sold an aggregate of 12,784,601 Series C preferred shares to new investors, existing shareholders and certain executive officers at a price of $15.6438 per share. Each Series C preferred share converted into one Class A Share or, at the holder's election, one Class A1 common share upon the closing of the IPO.

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Table of Contents

CERTAIN RELATIONSHIPS

REGISTRATION RIGHTS

In connection with our Series C preferred share financing, we entered into an amended and restated investors' rights agreement (the "investors' rights agreement"), with holders of our preferred shares, including certain executive officers, holders of 5% of a class of our voting shares and entities affiliated with certain of our directors. The investors' rights agreement grants these shareholders specified registration rights with respect to Class A Shares held by them, including common shares issued or issuable upon conversion of any other class of our common shares convertible into, or options, warrants or other securities exercisable for, our Class A Shares. We refer to these Class A shares as "registrable securities." The registration of registrable securities as a result of the following rights being exercised would enable holders to trade these shares without restriction under the Securities Act when the applicable registration statement is declared effective.

Demand Registration Rights

If at any time the holders of a majority of the registrable securities request in writing that we effect a registration with respect to all or part of such registrable securities then outstanding, we may be required to register their shares. We are obligated to effect at most one registration in response to these demand registration rights. If the holders requesting registration intend to distribute their shares by means of an underwriting, the managing underwriter of such offering will have the right to limit the numbers of shares to be underwritten for reasons related to the marketing of the shares.

Piggyback Registration Rights

If at any time we propose to register any of our Class A Shares under the Securities Act, subject to certain exceptions, the holders of registrable securities are entitled to notice of the registration and to include their registrable securities in the registration. If our proposed registration involves an underwriting, the managing underwriter of such offering will have the right to limit the number of shares to be underwritten for reasons related to the marketing of the shares.

Form S-3 Registration Rights

If, at any time after we become entitled under the Securities Act to register our shares on a registration statement on Form S-3, 25% of the holders of the registrable securities then outstanding request in writing that we effect a registration with respect to registrable securities at an aggregate price to the public in the offering of at least $5.0 million, we will be required to effect such registration on Form S-3 within 20 days after the date of such request. We will not be required to effect such a registration if, within the 12-month period immediately preceding the date of such request, we have already effected two registrations on Form S-3 for the holders of registrable securities.

On the day we are eligible to use a Form S-3 registration statement, we are obligated to register any then outstanding registrable securities held by affiliates.

Expenses

Ordinarily, other than underwriting discounts and commissions, we will be required to pay all expenses incurred by us related to any registration effected pursuant to the exercise of these registration rights. These expenses may include all registration and filing fees, printing expenses, fees and disbursements of our counsel, reasonable fees and disbursements of a counsel for the selling shareholders and blue-sky fees and expenses.

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Table of Contents

CERTAIN RELATIONSHIPS

Termination of Registration Rights

The registration rights terminate upon the earlier of the closing of a deemed liquidation event, as defined in our Amended and Restated Bye-laws, or, with respect to the registration rights of an individual holder, when the holder can sell all of such holder's registrable securities in a 90-day period without restriction under Rule 144 under the Securities Act.

EMPLOYMENT AGREEMENTS

We have entered into employment agreements with our executive officers. For more information regarding the employment agreements with our named executive officers, see the section in this proxy statement entitled "Executive and Director Compensation—Employment Agreements." In addition, we have entered into employment agreements with our executive officers and certain other members of our senior management team, who are each a beneficial owner of more than 5% of our Class B Shares, as follows:

Chris Heberlig

Chris Heberlig serves as our Executive Vice President and Chief Financial Officer and Treasurer. Mr. Heberlig's employment agreement provides for an annual base salary of $350,000, which may be changed from time to time in the discretion of our Board of Directors. Mr. Heberlig is eligible to earn an annual discretionary cash bonus with a target of 35% of base salary based on our Board of Directors' assessment of his individual performance as well as overall company performance.

In December 2018, the Compensation Committee raised Mr. Heberlig's annual base salary to $400,750, effective January 1, 2019, and 2019 target bonus opportunity, expressed as a percentage of his annual base salary, to 40%.

Thomas Beetham

Thomas Beetham serves as our Executive Vice President, Chief Legal Officer and Corporate Development, and Secretary. Mr. Beetham's employment agreement provides for an annual base salary of $375,000, which may be changed from time to time in the discretion of our Board of Directors. Mr. Beetham is eligible to earn an annual discretionary cash bonus with a target of 35% of base salary based on our Board of Directors' assessment of his individual performance as well as overall company performance.

In December 2018, the Compensation Committee raised Mr. Beetham's annual base salary to $400,000, effective January 1, 2019, and 2019 target bonus opportunity, expressed as a percentage of his annual base salary, to 40%.

Carsten Boess

Carsten Boess serves as our Executive Vice President, Corporate Affairs. Mr. Boess' employment agreement provides for an annual base salary of $400,000, which may be changed from time to time in the discretion of our Board of Directors. Mr. Boess is eligible to earn an annual discretionary cash bonus with a target of 35% of base salary based on our Board of Directors' assessment of his individual performance as well as overall company performance.

In December 2018, the Compensation Committee raised Mr. Boess' annual base salary to $412,000, effective January 1, 2019, and 2019 target bonus opportunity, expressed as a percentage of his annual base salary, to 40%.

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CERTAIN RELATIONSHIPS

Rasmus Holm-Jorgensen

Rasmus Holm-Jorgensen serves as our Senior Vice President, Chief Strategy and Portfolio Officer. Mr. Holm-Jorgensen's employment agreement provides for an annual base salary of $337,740, which may be changed from time to time in the discretion of our Board of Directors. Mr. Holm-Jorgensen is eligible to earn an annual discretionary cash bonus with a target of 30% of base salary based on our Board of Directors' assessment of his individual performance as well as overall company performance.

In December 2018, the Compensation Committee raised Mr. Holm-Jorgensen's annual base salary to $354,627, effective January 1, 2019, and 2019 target bonus opportunity, expressed as a percentage of his annual base salary, to 35%.

SHARE OPTION GRANTS

We have granted share options for our Class A Shares to our named executive officers and our directors as described in the section entitled "Executive and Director Compensation." In March 2018, we granted a share option to purchase 109,795 Class A Shares to each of Mr. Heberlig and Mr. Beetham and a share option to purchase 9,149 and 36,598 Class A Shares to Mr. Boess and Mr. Holm-Jorgensen, respectively, each at an exercise price of $10.36 per share. In September 2018, we granted a share option to purchase 45,000 Class A Shares to each of Mr. Heberlig and Mr. Beetham and a share option to purchase 20,000 and 15,000 Class A Shares to Mr. Boess and Mr. Holm-Jorgensen, respectively, each at an exercise price of $30.93 per share. In March 2019, we granted a share option to purchase 46,000, 42,000, 19,000, and 28,000 Class A Shares to Mr. Heberlig, Mr. Beetham, Mr. Boess and Mr. Holm-Jorgensen, respectively, each at an exercise price of $17.92 per share.

INDEMNIFICATION AGREEMENTS

We have entered into indemnification agreements with all of our directors and executive officers. These agreements, among other things, require us or will require us to indemnify each director (and in certain cases their related investment funds) and executive officer to the fullest extent permitted by Bermuda law, including indemnification of expenses such as attorneys' fees, judgments, fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of our company, arising out of such person's services as a director or executive officer.

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Other Matters

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our directors, executive officers and shareholders who beneficially own more than 10% of any class of our equity securities registered pursuant to Section 12 of the Exchange Act (the "Reporting Persons") to file initial statements of beneficial ownership of securities and statements of changes in beneficial ownership of securities with respect to our equity securities with the SEC. All Reporting Persons are required by SEC regulation to furnish us with copies of all reports that such Reporting Persons file with the SEC pursuant to Section 16(a). Based solely on our review of the copies of such forms received by us and upon written representations of our directors and executive officers received by us, we believe that there has been compliance with all Section 16(a) filing requirements applicable to such Reporting Persons with respect to the fiscal year ended December 31, 2018.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During the fiscal year ended December 31, 2018, Felix J. Baker, Kimberly J. Popovits and Barry D. Quart served as members of our Compensation Committee. No member of our Compensation Committee during the fiscal year ended December 31, 2018 is or has been an officer or employee of the Company. None of our executive officers served as a director or a member of a compensation committee (or other committee serving an equivalent function) of any other entity, one of whose executive officers served as a director or member of our Compensation Committee during the fiscal year ended December 31, 2018.

SHAREHOLDERS' PROPOSALS

Shareholders who intend to have a proposal considered for inclusion in our proxy materials for presentation at our 2020 Annual Meeting of Shareholders pursuant to Rule 14a-8 under the Exchange Act must submit the proposal to our Secretary c/o Kiniksa Pharmaceuticals Corp. at our offices at 100 Hayden Avenue, Lexington, MA 02421 in writing not later than December 19, 2019.

Shareholders intending to present a proposal at the 2020 Annual Meeting of Shareholders, but not to include the proposal in our proxy statement, to nominate a person for election as a director, must comply with the requirements set forth in our Amended and Restated Bye-laws. Our Amended and Restated Bye-laws require, among other things, that our Secretary receive written notice from the shareholder of record of their intent to present such proposal or nomination not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the anniversary of the preceding year's annual meeting. Therefore, we must receive notice of such a proposal or nomination for the 2020 Annual Meeting of Shareholders no earlier than the close of business on January 31, 2020 and no later than February 29, 2020. The notice must contain the information required by our Amended and Restated Bye-laws, a copy of which is available upon request to our Secretary. In the event that the date of the 2020 Annual Meeting of Shareholders is more than 30 days before or more than 30 days after May 29, 2020, then the notice must be given not later than 10 days following the earlier of the date on which notice of the 2020 Annual Meeting was posted to shareholders or the date on which public disclosure of the date of the 2020 Annual Meeting was made. SEC rules permit management to vote proxies in its discretion in certain cases if the shareholder does not comply with this deadline and, in certain other cases notwithstanding the shareholder's compliance with this deadline.

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OTHER MATTERS

Under the Bermuda Companies Act 1981, as amended, shareholders may, at their own expense (unless the company otherwise resolves) require a company to: (a) give to the shareholders entitled to receive notice of our next annual general meeting notice of any resolution that shareholders can properly propose at that meeting; and/or (b) to circulate a statement (of not more than 1,000 words) in respect of any matter referred to in a proposed resolution or any business to be conducted at that meeting. The number of shareholders necessary for such a request is either the number of shareholders representing not less than one-twentieth of the total voting rights of all shareholders having at the date of the request a right to vote at the meeting to which the request relates, or not less than 100 shareholders. Notice of any intended resolution must be given, and any statement must be circulated, to shareholders entitled to have notice of the meeting at which the resolution is proposed to be presented by sending a copy of the resolution or statement to each shareholder in any manner permitted for service of notice of the meeting, and notice of any intended resolution must also be given to any other shareholder of the company, including shareholders who are not entitled to notice of the meeting, by giving notice of the general effect of the resolution in any manner permitted for giving notice of meetings to such shareholder.

We reserve the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with these or other applicable requirements.

OTHER MATTERS TO BE PRESENTED AT THE ANNUAL MEETING

The audited financial statements of the Company for the fiscal year ended December 31, 2018, as approved by the Board of Directors, together with the report of the Company's independent registered public accounting firm and auditor with respect to those financial statements, will be presented at the Annual Meeting.

Our Board of Directors is not aware of any matter to be presented for action at the Annual Meeting other than the matters referred to above and does not intend to bring any other matters before the Annual Meeting. However, if other matters should come before the Annual Meeting, it is intended that holders of the proxies named on the Company's proxy card will vote your shares in their discretion on any such matters.

SOLICITATION OF PROXIES

The accompanying proxy is solicited by and on behalf of our Board of Directors, whose Notice of Annual Meeting is attached to this proxy statement, and the entire cost of such solicitation will be borne by us. In addition to the use of mail, proxies may be solicited by personal interview, telephone, e-mail and facsimile by our directors, officers and other employees who will not be specially compensated for these services. We will also request that banks, brokers, nominees, custodians and other fiduciaries forward soliciting materials to the beneficial owners of shares held by such banks, brokers, nominees, custodians and other fiduciaries. We will reimburse such persons for their reasonable expenses in connection therewith.

Certain information contained in this proxy statement relating to the occupations and security holdings of our directors and officers is based upon information received from the individual directors and officers.

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OTHER MATTERS

KINIKSA'S ANNUAL REPORT ON FORM 10-K

A copy of Kiniksa's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, including financial statements and schedules thereto but not including exhibits, as filed with the SEC, will be sent to any holder of record of our Common Shares as of the close of business on April 12, 2019 without charge upon written request addressed to:


Kiniksa Pharmaceuticals, Ltd.
Attention: Secretary
c/o Kiniksa Pharmaceuticals Corp.
100 Hayden Avenue
Lexington, MA 02421

A reasonable fee will be charged for copies of exhibits. You also may access this proxy statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 at www.proxyvote.com. You also may access our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 in the "Financial Information" section of the "Investors & Media" page of our website located at www.kiniksa.com.

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER OF SHARES YOU MAY HOLD. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, WE URGE YOU TO VOTE YOUR SHARES AND SUBMIT YOUR PROXY VIA THE TOLL-FREE TELEPHONE NUMBER OR OVER THE INTERNET, AS DESCRIBED IN THE MATERIALS YOU RECEIVED. IF YOU RECEIVED A PAPER COPY OF THE PROXY CARD BY MAIL, YOU MAY SIGN, DATE AND MAIL THE PROXY CARD IN THE RETURN ENVELOPE PROVIDED THEREWITH. PROMPTLY VOTING YOUR SHARES AND SUBMITTING YOUR PROXY WILL HELP ENSURE THE PRESENCE OF A QUORUM AT THE ANNUAL MEETING AND WILL SAVE US THE EXPENSE OF FURTHER SOLICITATION. VOTING YOUR SHARES AND SUBMITTING YOUR PROXY NOW WILL NOT PREVENT YOU FROM VOTING YOUR SHARES AT THE ANNUAL MEETING IF YOU DESIRE TO DO SO.

By Order of the Board of Directors,

Thomas Beetham
Secretary

Hamilton, Bermuda
April 17, 2019

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VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on May 28, 2019. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on May 28, 2019. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. KINIKSA PHARMACEUTICALS, LTD. CLARENDON HOUSE 2 CHURCH STREET HAMILTON HM11, BERMUDA TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E75945-P23578 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. KINIKSA PHARMACEUTICALS, LTD. The Board of Directors recommends you vote FOR the following proposals: Vote Withheld 1. Election of Class I Directors Nominees: For ! ! ! ! ! ! 1a. Sanj K. Patel For Against Abstain 1b. Thomas R. Malley 2. The appointment of PricewaterhouseCoopers LLP as the Company’s auditor until the close of the Company’s next Annual Meeting of Shareholders, the delegation to the Company’s Board of Directors, through its Audit Committee, of the authority to set the auditor’s remuneration for such period, and the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2019. ! ! ! 1c. Richard S. Levy Election of Class II Directors Nominees: 1d. Stephen R. Biggar ! ! ! ! 1e. Barry D. Quart NOTE: Such other business as may properly come before the meeting or any continuation, adjournment or postponement thereof. Election of Class III Directors Nominees: ! ! ! ! ! ! 1f. Felix J. Baker 1g. Tracey L. McCain 1h. Kimberly J. Popovits Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

 

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. E75946-P23578 KINIKSA PHARMACEUTICALS, LTD. Annual Meeting of Shareholders May 29, 2019 7:30 AM (Atlantic Time) This proxy is solicited by the Board of Directors The shareholder(s) hereby appoint(s) Sanj K. Patel and Thomas Beetham, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the Class A Common Shares and Class B Common Shares of KINIKSA PHARMACEUTICALS, LTD. that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders to be held at 7:30 AM, Atlantic Time on May 29, 2019, at the Fairmount Southampton Hotel located at 101 South Shore Road, Southampton SN02, Bermuda, and any continuation, adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. The proxies are authorized to vote upon such other business as may properly come before the Annual Meeting, or any adjournment, postponement or continuation thereof, in their discretion. Continued and to be signed on reverse side