unvested portions of the equity awards). In addition, if on the date 24 months immediately following the consummation of any corporate transaction Mr. Borgeson is providing services to the
acquiring company (or its subsidiaries or parent) as either an employee or a consultant, then 100% of Mr. Borgesons outstanding equity awards will vest. The receipt of payments and benefits specified in this paragraph is conditioned upon
Mr. Borgesons execution and non-revocation of a customary release of claims with us.
For information regarding
Mr. Borgesons outstanding equity awards as of December 31, 2022, see the section captioned 2022 Outstanding Equity Awards at Fiscal Year End, including with respect to acceleration of vesting provisions that apply to
certain of his equity awards in certain circumstances.
Jason Ehrlich, M.D., Ph.D.
Our Chief Medical Officer and Chief Development Officer, Dr. Ehrlichs annual base salary is $504,000, and he is eligible for an annual incentive payment equal
to 45% of his base salary, subject to achievement of performance metrics. We entered into an amended employment agreement with Dr. Ehrlich in September 2018. The employment agreement has no specific term and constitutes at-will employment.
Dr. Ehrlichs amended employment agreement also provides that if his employment is terminated by us
without cause, or he terminates his employment for good reason (as such terms are defined in his employment agreement), he is entitled to (1) a lump sum payment equal to nine months base salary (or if the termination occurs during
the period beginning three months prior to and ending 24 months after a corporate transaction (as defined in his amended employment agreement) and ending 24 months after a corporate transaction, 12 months base salary), (2) a lump
sum payment equal to his maximum target annual bonus, prorated for the portion of the fiscal year elapsed as of the termination date (or if the termination occurs during the period beginning three months prior to and ending 24 months after a
corporate transaction, 100% of his maximum target annual bonus, without proration), (3) if he elects to continue receiving health care and dental coverage under COBRA, our payment of the portion of premiums for such continuation coverage that we pay
for active and similarly situated employees for up to nine months (or if the termination occurs during the period beginning three months prior to and ending 24 months after a corporate transaction, for up to 12 months), or if such payments are not
permitted by law, monthly taxable payments to him in lieu of our payment of such COBRA premiums, and (4) accelerated vesting of his outstanding equity awards equal to the portion of the equity awards that would have vested had he continued to
be employed by us during the 12-month period after his termination (or if his termination occurs on or within 24 months of a corporate transaction, 100% of the unvested portions of the equity awards). In
addition, if on the date 24 months immediately following the consummation of any corporate transaction Dr. Ehrlich is providing services to the acquiring company (or its subsidiaries or parent) as either an employee or a consultant, then 100%
of Dr. Ehrlichs outstanding equity awards will vest. The receipt of payments and benefits specified in this paragraph is conditioned upon Dr. Ehrlichs execution and non-revocation of a
customary release of claims with us.
For information regarding Dr. Ehrlichs outstanding equity awards as of December 31, 2022, see the section
captioned 2022 Outstanding Equity Awards at Fiscal Year End, including with respect to acceleration of vesting provisions that apply to certain of his equity awards in certain circumstances.
Equity Plans
The 2021 LTPIP provides that in
the event of a change in control (as defined in the 2021 LTPIP), each outstanding award will be earned as to an applicable percentage of the award based on the per share consideration received by the Companys stockholders in such
change in control transaction meeting or exceeding the corresponding stock price goal, in accordance with the performance-based vesting requirement, with pro-rata vesting between stock price goals. To the extent less than 35% of the award has vested
upon a change in control based on the performance-based requirement, then the award remains eligible to be earned based on the attainment of the operational milestones. The earned award then vests and becomes exercisable in accordance with the
service-based requirement; provided, however, that, subject to the participants timely execution and delivery of a release and waiver of claims agreement, if (1) on the date 24 months immediately following a change in control, the participant
is providing services to the acquiring company as either an employee or a consultant or (2) within 24 months following a change in control, the participants employment is terminated without cause, or by the participant for good reason, then in
either case, 100% of the portion of the award that has been earned but remains unvested based on the service-based requirement will vest and become exercisable in full, effective as of the date the release becomes effective. In addition, in the
event that a successor corporation or its parent or subsidiary does not assume or substitute an equivalent award for any outstanding award, then such award will fully vest and the participant will have the right to exercise the portion of the award
that has been earned as of the date of such change in control. If an award is not assumed or substituted, the administrator will notify the participant in writing or electronically that such award will be exercisable for a period of time determined
by the administrator in its sole discretion and the award will terminate upon the expiration of such period. For additional details regarding the vesting conditions applicable to the 2021 LTPIP awards.
The 2018 Plan provides that in the event of our merger with or into another corporation or other entity or a change in control (as defined in the 2018 Plan),
each outstanding award will be treated as the administrator determines, except that if a successor corporation or its parent or subsidiary does not assume or substitute an equivalent award for any outstanding award, then such award will fully vest,
all restrictions on such award will lapse, all performance goals or other vesting criteria applicable to such award will be deemed achieved at 100% of target levels, and such award will become fully exercisable, if applicable, for a specified period
prior to the transaction. The award will then terminate upon the expiration of the specified period of time.
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2023 PROXY STATEMENT |
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