Adicet Bio Inc

Our named executive officers for the year ended December 31, 2024 are:

•

Chen Schor, MBA, our President and Chief Executive Officer;

•

Brian Nicholas Harvey (Nick Harvey), MBA, our Chief Financial Officer;

•

Blake Aftab, Ph.D., our Chief Scientific Officer and Senior Vice President; and

•

Francesco Galimi, M.D., Ph.D., our former Chief Medical Officer.

2024 Summary Compensation Table

The following table sets forth information regarding compensation award to, earned by, or paid to each of our named executive officers for services rendered to us in all capacities during the fiscal year ended December 31, 2024. The following table also presents information regarding compensation awarded to, earned by, and paid to each such individual during the fiscal years ended December 31, 2024 and December 31, 2023, to the extent such individual was a named executive officer for such year.

(1)

The amounts reported in the “Salary” column set forth the base salary earned during each fiscal year.

(2)

In accordance with SEC rules, these columns set forth the aggregate grant date fair value of the stock awards and option awards, as applicable, granted during the applicable fiscal year. For 2023, the amounts also reflect the incremental fair value with respect to the option repricing that took place in August 2023, calculated as of August 14, 2023. The amounts are computed in accordance with the provisions of FASB ASC Topic 718 disregarding the effect of estimated forfeitures related to service-based vesting. These amounts reflect the accounting cost for the equity awards and do not correspond to the actual economic value that may be received by the named executive officer upon exercise of the stock options or vesting or settlement of stock awards. See Note 12 to this Annual Report on Form 10-K regarding certain assumptions underlying the valuation of equity awards.

(3)

The amounts reported in the “Non-Equity Incentive Plan Compensation” column set forth the amount of compensation earned by the executive officers under the Company’s annual performance-based bonus program during each fiscal year.

(4)

The amounts reported in the “All Other Compensation” column set forth all of the compensation for each fiscal year that we could not properly report in any other column of the table, including, but not limited to, severance pay as well as the incremental cost to the Company of perquisites and other personal benefits, such as parking reimbursement, relocation assistance, 401(k) match contributions and mobile phone allowances.

(5)

Amount includes parking reimbursement of $2,393, 401(k) matching contributions of $15,525 and mobile phone allowance of $720.

(6)

Amount includes parking reimbursement of $3,842, 401(k) matching contributions of $15,525 and mobile phone allowance of $720.

(7)

Drs. Galimi and Aftab were not named executive officers in fiscal year 2023 and, therefore, their 2023 compensation is not disclosed in this summary compensation table. Additionally, Dr. Galimi resigned from his position as chief medical officer, effective December 13, 2024.

(8)

Amount includes relocation assistance of $75,000, 401(k) matching contributions of $15,525 and mobile phone allowance of $720.

(9)

Amount includes severance pay of $433,666 as per the terms of Dr. Galimi's employment agreement and separation agreement and release. See section titled “Employment Arrangements with Our Named Executive Officers” below for additional information on Dr. Galimi's employment agreement and separation agreement and release. Amount also includes 401(k) matching contributions of $15,525 and mobile phone allowance of $720.

Narrative to 2024 Summary Compensation Table

Our board of directors and Compensation Committee review compensation annually for all employees, including our executives. In setting executive base salaries and bonuses and granting equity incentive awards, we consider compensation for comparable positions in the market, the historical compensation levels of our executives, individual performance as compared to our expectations and objectives, our desire to motivate our employees to achieve short- and long-term results that are in the best interests of our stockholders, and a long-term commitment to our Company. We target a general competitive position, based on independent third-party benchmark analytics to inform the mix of compensation of base salary, bonus or long-term incentives.

Our Compensation Committee has historically reviewed and made recommendations to our board of directors regarding the compensation to be paid to our chief executive officer and determined the compensation of our other executive officers. Our Compensation Committee typically reviews and discusses management’s proposed compensation with the chief executive officer for all executives other than the chief executive officer. Based on those discussions and its discretion, taking into account the factors noted above, the Compensation Committee then approves the compensation of our executive officers other than the chief executive officer without members of management present. Our board of directors discusses the Compensation Committee’s recommendations and ultimately approves the compensation of our chief executive officer without members of management present. Aon Consulting, Inc. (Aon Consulting) advised the board of directors and the Compensation Committee on certain compensation matters and decisions during fiscal year 2024. Aon Consulting served at the discretion of the Compensation Committee and did not provide any other services to the Company during fiscal year 2024 other than those for which they were engaged by the Compensation Committee. Our Compensation Committee requires that its compensation consultants be independent of Company management and performs an annual assessment of the compensation consultants’ independence to determine whether the consultants are independent. Our Compensation Committee has determined that Aon Consulting is independent and that its respective work has not raised any conflicts of interest.

Annual base salary

We use base salaries to recognize the experience, skills, knowledge and responsibilities required of all our employees, including our 2024 named executive officers. Base salaries for our named executive officers are reviewed annually by our Compensation Committee, typically in connection with our annual performance review process, and adjusted from time to time, based on the recommendation of the Compensation Committee, to realign salaries with market levels after taking into account individual responsibilities, performance and experience. None of our 2024 named executive officers are currently party to an employment agreement or other agreement or arrangement that provides for automatic or scheduled increases in base salary.

During 2024, the annual base salaries for each of Messrs. Schor, Harvey, Aftab and Galimi, were $628,000, $462,000, $471,000 and $495,000, respectively, which was an increase of approximately 3.5%, 3.6%, 3.5% and 3.6%, respectively, as compared to their 2023 annual base salaries. Dr. Galimi resigned from his position as chief medical officer, effective December 13, 2024, and, therefore, his annual salary reflected his partial year of employment for fiscal year 2024, as reflected in the section titled “2024 Summary Compensation Table” above.

Annual bonus

Our named executive officers, as well as other executive officers, are eligible to participate in our Cash Incentive Bonus Plan (Bonus Plan) which is an annual bonus program intended to reward our named executive officers for meeting objective or subjective performance goals for a fiscal year. The Bonus Plan provides for cash payments based upon the attainment of performance targets established by the Compensation Committee, which may relate to financial and operational measures or objectives with respect to the Company. Each executive officer who is selected to participate in the Bonus Plan will have a target bonus opportunity set for each performance period.

With respect to performance in fiscal year 2024, the target bonus opportunity as a percentage of base salary for each of Messrs. Schor, Harvey, Aftab and Galimi were 55%, 40%, 40%, and 40%, respectively.

The 2024 corporate goals used in our 2024 Cash Incentive Bonus Plan were proposed by management, and reviewed and approved by our Compensation Committee and our board of directors in January 2024. Our board of directors considered and assigned a relative weight to each corporate goal to appropriately focus efforts on achievements that were intended to enhance stockholder value.

Based on the Company’s achievement of certain performance goals and metrics related to our 2024 corporate objectives, the Compensation Committee determined that the bonuses for executives, including our named executive officers, would be paid at 70% of target and paid in the amounts as set forth above in the Summary Compensation Table. Dr. Galimi resigned from his position as chief medical officer, effective December 13, 2024, and, therefore, he did not receive a cash incentive bonus with respect to fiscal year 2024, as reflected in the section titled “2024 Summary Compensation Table” above. See section titled “Employment Arrangements with Our Named Executive Officers” below for additional information on Dr. Galimi's employment agreement and separation agreement and release.

Long-term equity incentives

Our equity grant program is intended to align the interests of our named executive officers with those of our stockholders and to motivate them to make important contributions to our performance. In addition, the vesting requirements of our equity awards contribute to executive retention by providing an incentive to our executive officers to remain employed by us during the vesting period.

Significant equity awards are granted at the time an executive officer commences employment. Thereafter, equity awards may be granted at varying times and in varying amounts in the discretion of our Compensation Committee or, if awards are being granted to the Chief Executive Officer, in the discretion of our board of directors. None of our executive officers is currently party to an employment agreement that provides for an automatic grant of long-term equity incentives.

During the fiscal year ended December 31, 2024, we granted stock options and restricted stock units to each of our named executive officers, as shown in more detail in the “Outstanding Equity Awards at 2024 Fiscal Year End” table below.

401(k) Savings Plan

We maintain a 401(k) retirement savings plan for the benefit of our employees, including our named executive officers, who satisfy certain eligibility requirements. Under the 401(k) plan, eligible employees may elect to defer a portion of their compensation, within the limits prescribed by the Code, on a pre-tax or after-tax (Roth) basis, through contributions to the 401(k) plan. The 401(k) plan is intended to qualify under Sections 401(a) and 501(a) of the Code. As a tax-qualified retirement plan, pre-tax contributions to the 401(k) plan and earnings on those pre-tax contributions are not taxable to the employees until distributed from the 401(k) plan, and earnings on Roth contributions are not taxable when distributed from the 401(k) plan. The 401(k) plan authorizes employer discretionary match contributions. We match 100% of the first 3% and 50% of the next 3% of the contributions that eligible participants make to the 401(k) plan up to 6.00% of the participant’s eligible compensation.

Health and Welfare Benefits

All of our full-time employees, including our executive officers, are eligible to participate in our health and welfare benefits, including medical, dental and vision insurance, medical and dependent care flexible spending accounts, group life and disability insurance, and 401(k) plan. Named executive officers are eligible to participate in all our employee benefit plans, in each case on the same basis as other employees.

We do not offer any defined benefit pension plans or nonqualified defined compensation arrangements for our employees, including our named executive officers.

Perquisites and Personal Benefits

Our policy in 2024 was generally not to provide significant perquisites and personal benefits to our executive officers, including our named executive officers, other than reimbursements for relocation and commuting expenses and certain other de minimis perquisites to our executive officers, including our named executive officers. In 2024, we provided Dr. Aftab relocation assistance of $75,000.

Compensation Recovery Policy

On November 16, 2023, our board adopted a compensation recovery policy, which became effective on October 2, 2023. The compensation recovery policy provides that in the event we are required to prepare a restatement of financial statements due to material noncompliance with any financial reporting requirement under securities laws, we will seek to recover any incentive-based compensation that was based upon the attainment of a financial reporting measure and that was received by any current or former executive officer during the three-year period preceding the date that the restatement was required if such compensation exceeds the amount that the executive officers would have received based on the restated financial statements. The full text of the compensation recovery policy is included as Exhibit 97.1 to this Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Policy on the Timing of Awards of Options and Other Option-Like Instruments

We generally grant annual equity awards, including stock option grants to our named executive officers, in the first quarter of each fiscal year. This grant date timing coincides with our calendar-year-based employee review cycle, allowing managers to deliver the equity awards close in time to performance reviews and feedback. In addition, new hires receive equity grants at the time of their hiring. During 2024, the Compensation Committee did not take into account any material nonpublic information when determining the timing and terms of equity incentive awards, and we did not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.

The Compensation Committee met to discuss the size and nature of the equity awards for our named executive officers on December 12, 2023, January 4, 2024 and January 24, 2024. The Compensation Committee discussed the Company’s projected equity usage for fiscal year 2024 and potential dilutive impact of equity awards to our named executive officers, and determined to grant a number of the annual equity awards for the named executive officers effective immediately as of January 24, 2024 with the remaining number of their respective annual awards to be granted contingent upon the approval of the Shareholder Proposal (as defined below). During 2024, consistent with our ordinary course practice of granting equity awards in the first quarter of the fiscal year, we granted stock options to our Named Executive Officers on January 24, 2024 (the “January 24th Awards”), which was the same business day that we filed the Current Report on Form 8-K announcing the closing of our underwritten public offering of 27,054,667 shares of our common stock, and, in lieu of common stock to an investor, pre-funded warrants to purchase 8,445,333 shares of common stock (collectively, the “January 2024 Offering”). The Company originally publicly announced the launch and pricing of the January 2024 Offering on January 22, 2024 via launch and pricing press releases as well as the filing of the preliminary prospectus supplement with the SEC.

On January 26, 2024, following finalization of the terms of the Shareholder Proposal, the Compensation Committee approved the grant of the remainder of the annual equity awards, contingent upon the approval of the shareholders of an amendment to the Amended and Restated 2018 Stock Option and Grant Plan (the “Shareholder Proposal”) and with an exercise price equal to the closing price of the Common Stock on the date of the Compensation Committee approval (the “Contingent Awards”). To the extent the Shareholder Proposal was not approved by the shareholders, the Contingent Awards would have been forfeited in their entirety. On June 5, 2024, the Company held its annual meeting of shareholders, where, among other things, the shareholders approved the Shareholder Proposal. Also on June 5, 2024, we furnished a Form 8-K announcing that we had received FDA Fast Track Designation for ADI-001 in Lupus Nephritis and on June 7, 2024, we filed a Current Report on Form 8-K announcing the results of the annual meeting.

(1)

The awards with a grant date of June 5, 2024 were approved by the compensation committee on January 26, 2024, contingent upon shareholder approval of an amendment to our equity plan, which approval was obtained at the annual meeting on June 5, 2024. Accordingly, such grants have an exercise price equal to the closing price on January 26, 2024, and were not made in contemplation of or in connection with the disclosures made on June 5, 2024 or June 7, 2024 in separate Current Report on Form 8-Ks.

(2)

Each of the option awards has a ten-year term and vests over four years. The amounts are computed in accordance with the provisions of FASB ASC Topic 718 disregarding the effect of estimated forfeitures related to service-based vesting. These amounts reflect the accounting cost for the equity awards and do not correspond to the actual economic value that may be received by the named executive officer upon exercise of the stock options or vesting or settlement of stock awards. See Note 12 to this Annual Report on Form 10-K regarding certain assumptions underlying the valuation of equity awards.

(3)

Calculated using the closing price of our common stock on the Nasdaq Global Select Market on January 24, 2024, and January 25, 2024, of $2.40 and $2.47 per share, respectively, given the filing of the Current Report on Form 8-K announcing the closing of the January 2024 Offering on January 24, 2024. As disclosed above, the January 2024 Offering was disclosed to the public on January 22, 2024. Accordingly, on January 22, 2024 and January 23, 2024, the trading days ending immediately prior and beginning immediately following the actual disclosure of the material non-public information to the public via launch and pricing press releases and the filing of a preliminary prospectus, the closing price of our common stock on the Nasdaq Global Select Market was $2.48 and $2.51.

(4)

Calculated using the closing price of our common stock on the Nasdaq Global Select Market on June 4, 2024, and June 6, 2024, of $1.44 and $1.40 per share, respectively. As disclosed above, the June 5, 2024 awards were approved on January 26, 2024. Accordingly, the percentage change in market value of the closing price on January 26, 2024 (which reflects the exercise price of such grants) compared to the closing price of our common stock on June 6, 2024, represents a change of -44.7%.

Employment Arrangements with Our Named Executive Officers

Chen Schor

In March 2017, we entered into an offer letter with Mr. Schor, as amended in January 2018 and September 2020. Under his amended offer letter, Mr. Schor is entitled to receive an annual base salary, an annual target bonus expressed as a percentage of his annual base salary, reimbursements for reasonable expenses, and is eligible to participate in our employee benefit plans, subject to the terms of such plans.

In the event Mr. Schor’s employment is terminated by us without cause or by him for good reason, and such termination occurs outside of a change in control period, Mr. Schor shall be entitled to receive, subject to his execution and non-revocation of a release in favor of the Company (i) an amount equal to twelve (12) months of Mr. Schor’s base salary; (ii) any unpaid bonus earned for the year preceding the date of Mr. Schor’s employment termination, payable at the time it otherwise would have been paid had Mr. Schor’s employment with the Company not terminated; and (iii) a monthly cash payment (including a gross up payment to account for applicable taxes and withholdings) equal to the monthly employer contribution that the

Company would have made to provide health insurance to Mr. Schor and covered dependents if the executive had remained employed by the Company until the earliest of (A) the twelve (12) month anniversary of the date of termination; (B) the date that Mr. Schor becomes eligible for group medical plan benefits under any other employer’s group medical plan; or (C) the cessation of the Mr. Schor health continuation rights under COBRA. The amounts payable under (i) and (iii), to the extent taxable, shall be paid out in substantially equal installments in accordance with the Company’s payroll practice over twelve (12) months commencing within 60 days after the date of termination.

Mr. Schor’s amended offer letter further provides that, in the event that his employment is terminated by us without cause or by him for good reason, and such termination occurs 3 months prior to or within the 12-month period following a change of control, then in lieu of the payments and benefits described above, Mr. Schor shall be entitled to receive, subject to his execution and non-revocation of a release in favor of the Company, (i) a lump sum cash payment equal to 1.5 times the sum of his then current base salary and target annual incentive compensation for the then-current year (or the target annual incentive compensation in effect immediately prior to the change in control, if higher), (ii) a lump sum cash payment of any unpaid bonus earned for the year preceding the date of Mr. Schor’s employment termination, payable at the time it otherwise would have been paid had Mr. Schor’s employment with the Company not terminated, (iii) a monthly cash payment (including a gross up payment to account for applicable taxes and withholdings) equal to the monthly employer contribution that the Company would have made to provide health insurance to Mr. Schor and covered dependents if Mr. Schor had remained employed by the Company until the earliest of (A) the eighteen (18) month anniversary of the date of termination; (B) the date that Mr. Schor becomes eligible for group medical plan benefits under any other employer’s group medical plan; or (C) the cessation of Mr. Schor’s health continuation rights under COBRA, and (iv) full acceleration of all time-based stock options and other time-based stock-based awards held by Mr. Schor. All references to “cause,” “good reason,” “change in control period” and “change in control” are as defined in his amended offer letter.

The payments and benefits provided to Mr. Schor in connection with a change in control may not be eligible for a federal income tax deduction for the company pursuant to Section 280G of the Internal Revenue Code of 1986, as amended, or the Code, and may subject Mr. Schor to an excise tax under Section 4999 of the Code. If the payments or benefits payable to Mr. Schor in connection with a change in control would be subject to the excise tax on golden parachutes imposed under Section 4999 of the Code, then those payments or benefits will be reduced if such reduction would result in a higher net after-tax benefit to Mr. Schor.

Nick Harvey

In September 2020, we entered into an employment agreement with Mr. Harvey. Under his agreement, Mr. Harvey is entitled to receive an annual base salary, an annual target bonus expressed as a percentage of his base salary, reimbursements for reasonable expenses, and is eligible to participate in our employee benefit plans, subject to the terms of such plans. The company granted Mr. Harvey an inducement grant equal to one percent of the issued and outstanding shares of the company, which fully vests over a period of four years.

In the event Mr. Harvey’s employment is terminated by us without cause or by him for good reason, and such termination occurs outside of a change in control period, Mr. Harvey will be eligible to receive, subject to his execution and non-revocation of a release in favor of the Company, (i) an amount equal to nine (9) months of the Mr. Harvey’s base salary; (ii) any unpaid bonus earned for the year preceding the date of Mr. Harvey’s employment termination, payable at the time it otherwise would have been paid had the Mr. Harvey’s employment with the Company not terminated; and (iii) a monthly cash payment (including a gross up payment to account for applicable taxes and withholdings) equal to the monthly employer contribution that the Company would have made to provide health insurance to Mr. Harvey and covered dependents if Mr. Harvey had remained employed by the Company until the earliest of (A) the nine (9) month anniversary of the date of termination; (B) the date that Mr. Harvey becomes eligible for group medical plan benefits under any other employer’s group medical plan; or (C) the cessation of Mr. Harvey’s health continuation rights under COBRA. The amounts payable under (i) and (iii), to the extent taxable, shall be paid out in substantially equal installments in accordance with the Company’s payroll practice over nine (9) months commencing within 60 days after the date of termination.

Mr. Harvey’s employment agreement further provides that, in the event that his employment is terminated by us without cause or by him for good reason, and such termination occurs within the 12-month period following a change of control, then in lieu of the payments and benefits described above, Mr. Harvey shall be entitled to receive, subject to his execution and non-revocation of a release in favor of the Company, (i) a lump sum in cash in an amount equal to one (1) times the sum of (A) Mr. Harvey’s then-current base salary (or Mr. Harvey’s base salary in effect immediately prior to the change in control, if higher) plus (B) Mr. Harvey’s target bonus for the then-current year (or Mr. Harvey’s target bonus in effect immediately prior to the change in control, if higher), (ii) any unpaid bonus earned for the year preceding the date of Mr. Harvey’s employment termination, payable at the time it otherwise would have been paid had Mr. Harvey’s employment with the Company not terminated, (iii) 100% acceleration of all time-based equity awards held as of the date of termination and (iv) subject to his election of COBRA health continuation coverage, for up to twelve (12) months or his COBRA health continuation period, whichever ends earlier, a monthly cash payment equal to the monthly employer contribution that the Company would have made to provide health insurance to him if he has remained employed by the Company. All references to “cause”, “good reason”, “change in control period” and “change in control” are as defined in his employment agreement.

The payments and benefits provided to Mr. Harvey in connection with a change in control may not be eligible for a federal income tax deduction for the company pursuant to Section 280G of the Internal Revenue Code of 1986, as amended, or the Code, and may subject Mr. Harvey to an excise tax under Section 4999 of the Code. If the payments or benefits payable to Mr. Harvey in connection with a change in control would be subject to the excise tax on golden parachutes imposed under Section 4999 of the Code, then those payments or benefits will be reduced if such reduction would result in a higher net after-tax benefit to Mr. Harvey.

Blake Aftab, Ph.D.

In April 2021, we entered into an employment agreement with Dr. Aftab, as amended in October 2021. Under his amended agreement, Dr. Aftab is entitled to receive an annual base salary, an annual target bonus expressed as a percentage of his base salary and reimbursements for reasonable expenses, and is eligible to participate in our employee benefit plans, subject to the terms of such plans. Under the amended agreement, the company provided Dr. Aftab with a fully taxable relocation allowance of up to $6,250 per month (for up to four years from his permanent relocation date), less all required deductions and withholdings.

In the event Dr. Aftab’s employment is terminated by us without cause or by him for good reason, and such termination occurs outside of a change in control period, Dr. Aftab will be eligible to receive, subject to his execution and non-revocation of a release in favor of the Company, (i) an amount equal to nine (9) months of Dr. Aftab’s base salary; (ii) any unpaid bonus earned for the year preceding the date of Dr. Aftab’s employment termination, payable at the time it otherwise would have been paid had Dr. Aftab’s employment with the Company not terminated; (iii) an amount equal to the lesser of (A) nine (9) months of the monthly relocation allowance or (ii) the number of months of the monthly relocation allowance remaining in the four-year period following his permanent relocation; and (iv) a monthly cash payment (including a gross up payment to account for applicable taxes and withholdings) equal to the monthly employer contribution that the Company would have made to provide health insurance to Dr. Aftab and covered dependents if Dr. Aftab had remained employed by the Company until the earliest of (A) the nine (9) month anniversary of the date of termination; (B) the date that Dr. Aftab becomes eligible for group medical plan benefits under any other employer’s group medical plan; or (C) the cessation of Dr. Aftab’s health continuation rights under COBRA. The amounts payable under (i) and (iv), to the extent taxable, shall be paid out in substantially equal installments in accordance with the Company’s payroll practice over nine (9) months commencing within 60 days after the date of termination.

Dr. Aftab’s employment agreement further provides that, in the event that his employment is terminated by us without cause or by him for good reason, and such termination occurs within the 12-month period following a change of control, then in lieu of the payments and benefits described above, Dr. Aftab shall be entitled to receive, subject to his execution and non-revocation of a release in favor of the Company, (i) a lump sum in cash in an amount equal to one (1) times the sum of (A) Dr. Aftab’s then-current base salary (or Dr. Aftab’s base salary in effect immediately prior to the change in control, if higher) plus (B) Dr. Aftab’s target bonus for the then-current year (or Dr. Aftab’s target bonus in effect immediately prior to the change in control, if higher), (ii) any unpaid bonus earned for the year preceding the date of Dr. Aftab’s employment termination, payable at the time it otherwise would have been paid had Dr. Aftab’s employment with the Company not terminated, (iii) an amount equal to the lesser of (A) nine (9) months of the monthly relocation allowance or (ii) the number of months of the monthly relocation allowance remaining in the four-year period following his permanent relocation; (iv) 100% acceleration of all time-based equity awards held as of the date of termination and (v) subject to his election of COBRA health continuation coverage, for up to twelve (12) months or his COBRA health continuation period, whichever ends earlier, a monthly cash payment equal to the monthly employer contribution that the Company would have made to provide health insurance to him if he has remained employed by the Company. All references to “cause,” “good reason,” “change in control period” and “change in control” are as defined in his employment agreement.

Francesco Galimi

In October 2021, we entered into an employment agreement with Dr. Galimi. Under his employment agreement, Dr. Galimi was entitled to receive an annual base salary, an annual target bonus expressed as a percentage, reimbursements for reasonable expenses, and was eligible to participate in our employee benefit plans, subject to the terms of such plans. The company also provides Dr. Galimi with a fully taxable commuter reimbursement for reasonable travel, less all required deductions and withholdings.

In the event Dr. Galimi’s employment was terminated by us without cause or by him for good reason, and such termination occurs outside of a change in control period, Dr. Galimi was eligible to receive, subject to his execution and non-revocation of a separation agreement and release in favor of the Company, (i) an amount equal to nine (9) months of Dr. Galimi’s base salary; (ii) any unpaid bonus earned for the year preceding the date of Dr. Galimi’s employment termination, payable at the time it otherwise would have been paid had Dr. Galimi’s employment with the Company not terminated; and (iii) a monthly cash payment (including a gross up payment to account for applicable taxes and withholdings) equal to the monthly employer contribution that the Company would have made to provide health insurance to Dr. Galini and covered dependents if Dr. Galimi had remained employed by the Company until the earliest of (A) the nine (9) month anniversary of the date of termination; (B) the date that Dr. Galimi becomes eligible for group medical plan benefits under any other employer’s group medical plan; or (C) the cessation of Dr. Galimi’s health continuation rights under COBRA. The amounts payable under (i) and (iii), to the extent taxable, are paid out in substantially equal installments in accordance with the Company’s payroll practice over nine (9) months commencing within 60 days after the date of termination.

Dr. Galimi’s employment agreement further provided that, in the event that his employment was terminated by us without cause or by him for good reason, and such termination occurred within the 12-month period following a change in control, then in lieu of the payments and benefits described above, Dr. Galimi would be entitled to receive, subject to his execution and non-revocation of a release in favor of the Company, (i) a lump sum in cash in an amount equal to one (1) times the sum of (A) Dr. Galimi’s then-current base salary (or Dr. Galimi’s base salary in effect immediately prior to the change in control, if higher) plus (B) Dr. Galimi’s target bonus for the then-current year (or Dr. Galimi’s target bonus in effect immediately prior to the change in control, if higher), (ii) any unpaid bonus earned for the year preceding the date of Dr. Galimi’s employment termination, payable at the time it otherwise would have been paid had Dr. Galimi’s employment with the Company not terminated, (iii) 100% acceleration of all time-based equity awards held as of the date of termination and (iv) subject to his election of COBRA health continuation coverage, for up to twelve (12) months or his COBRA health continuation period, whichever ends earlier, a monthly cash payment equal to the monthly employer contribution that the Company would have made to provide health insurance to him if he has remained employed by the Company. All references to “cause,” “good reason,” “change in control period” and “change in control” are as defined in his employment agreement.

In December 2024, we entered into a separation agreement and release with Dr. Galimi. Under his separation agreement and release, Mr. Galimi was entitled to receive (i) an amount equal to nine (9) months of Dr. Galimi’s base salary; and (ii) a monthly cash payment (including a gross up payment to account for applicable taxes and withholdings) equal to the monthly employer contribution that the Company would have made to provide health insurance to Dr. Galini and covered dependents if Dr. Galimi had remained employed by the Company until the earliest of (A) the nine (9) month anniversary of the date of termination; (B) the date that Dr. Galimi becomes eligible for group medical plan benefits under any other employer’s group medical plan; or (C) the cessation of Dr. Galimi’s health continuation rights under COBRA.

Compensation Risk Assessment

We believe that although a portion of the compensation provided to our executive officers and other employees is performance-based, our executive compensation program does not encourage excessive or unnecessary risk taking. Our compensation programs are designed to encourage our executive officers and other employees to remain focused on both short-term and long-term strategic goals, in particular in connection with our pay-for-performance compensation philosophy. As a result, we do not believe that our compensation programs are reasonably likely to have a material adverse effect on us.

Outstanding Equity Awards at 2024 Fiscal Year End Table

(1)

All equity awards listed in this table were granted pursuant to our 2015 Plan and 2018 Plan.

(2)

For options granted prior to August 13, 2023, the option exercise prices reflects the effect of the option repricing which took effect on August 14, 2024 and reduced the exercise price of outstanding options under the 2018 and 2015 Plans to $2.14. Options granted after August 14, 2023 have an exercise price equal to the closing stock price on the date of grant.

(3)

The market value is based on the closing price of our common stock on December 31, 2024, the last trading day of our fiscal year 2024, in the amount of $0.96 per share.

(4)

Represents fully vested shares of common stock subject to this option.

(5)

1/48th of the shares subject to the option vest on each of the next forty-eight (48) monthly anniversaries of the vesting commencement date, provided that the optionee remains in continuous service as of the applicable vesting date.

(6)

Restricted Stock Units (RSUs) vest in three (3) annual installments, with 1/3 vesting on each of January 24, 2024, January 24, 2025 and January 24, 2026.

(7)

Restricted Stock Units (RSUs) vest in three (3) annual installments, with 1/3 vesting on each of January 24, 2025, January 24, 2026 and January 24, 2027.

(8)

25% of the shares subject to the option vest twelve (12) months after the vesting commencement date, and 1/36th of the remaining unvested shares subject to the option vest on each of the next thirty-six (36) monthly anniversaries of the vesting commencement date thereafter, provided that the optionee remains in continuous service as of the applicable vesting date.

(9)

The vesting commencement date for this grant is April 5, 2021.

(10)

The vesting commencement date for this grant is April 29, 2022.

Director Compensation

The table below shows all compensation earned by or paid to our non-employee directors during 2024. Mr. Schor, our chief executive officer, did not receive any compensation for his services as director in 2024 and, consequently, is not included in this table. The compensation received by Mr. Schor during 2024 is set forth in the section of this Annual Report on Form 10-K captioned “2024 Summary Compensation Table”.

(1)

Amounts represent cash compensation for services rendered by each member of the board of directors.

(2)

Amounts shown reflect the grant date fair value of stock option and restricted stock unit awards granted during 2024. The grant date fair value was computed in accordance with FASB ASC Topic 718 disregarding the effect of estimated forfeitures related to service-based vesting. These amounts reflect the accounting cost for the stock options and RSU awards and do not correspond to the actual economic value that may be received by the director upon exercise of the stock options. See Note 12 to this Annual Report on Form 10-K regarding certain assumptions underlying the valuation of equity awards.

(3)

The following table shows the number of outstanding stock options and restricted stock units held by our directors as of December 31, 2024:

(4)

Dr. Kauffman resigned from our board of directors, effective August 19, 2024. His cash fees earned represent a pro-rated amount from January 1, 2024 through August 19, 2024, the date he ceased being a member of our board of directors.

(5)

Dr. Klickstein was appointed to the board, effective August 19, 2024. Dr. Klickstein received an initial stock option grant to purchase 70,200 shares of the Company’s common stock. In addition, Dr. Klickstein replaced Dr. Kauffman as a member of the nominating and corporate governance committee, effective August 19, 2024. His cash fees earned represent a pro-rated amount from August 19, 2024 through December 31, 2024.

Under our director compensation program, we pay our non-employee directors a cash retainer for service on the board of directors and for service on each committee on which the director is a member. The chairman of each committee receives a higher retainer for such service. These fees are payable in arrears in four equal quarterly installments on the last day of each quarter, provided that the amount of such payment is prorated for any portion of such quarter that the director is not serving on our board of directors. The fees paid to non-employee directors for service on the board of directors and for service on each committee of the board of directors on which the director is a member are as follows:

We also reimburse our non-employee directors for reasonable travel and out-of-pocket expenses incurred by our non-employee directors in connection with attending our meetings of the board of directors and committees thereof.

In addition, effective as of January 24, 2023, each new non-employee director elected to our board of directors will be granted an initial, one-time award of a stock option to purchase 70,200 shares, which shall vest in thirty-six (36) equal monthly installments over a three-year period from the date of grant, subject to continued service as a director through each such vesting date. Additionally, on the date of each annual meeting of stockholders of our company, each continuing non-employee director will receive an annual equity award of 26,400 options and 5,900 restricted stock units which shall vest in full upon the earlier to occur of the first anniversary of the date of grant or the date of the next annual meeting of stockholders; provided, however, that all vesting shall cease if the director resigns from the board of directors or otherwise ceases to serve as a director, unless the board of directors determines that the circumstances warrant continuation of vesting. This non-employee director compensation program is intended to provide a total compensation package that enables us to attract and retain qualified and experienced individuals to serve as directors and to align our directors’ interests with those of our stockholders.