ArriVent Biopharma Inc

Summary Compensation Table

The following table sets forth information regarding compensation earned with respect to our fiscal years ended December 31, 2023 and December 31, 2022 by our principal executive officer and the two next most highly compensated executive officers who earned more than $100,000 during our fiscal year ended December 31, 2023, and were serving as executive officers as of such date, who are referred to as our named executive officers for 2023.

To date, the compensation of our named executive officers has consisted of a combination of base salary, bonuses and long-term incentive compensation in the form of stock options. Our named executive officers, like all full-time employees, are eligible to participate in our 401(k) plan. We expect to evaluate our compensation values and philosophy and compensation plans and arrangements as circumstances require.

Narrative Disclosure to Summary Compensation Table

Base Salaries

Each named executive officer’s base salary is a fixed component of annual compensation for performing specific duties and functions, and has been established by our board of directors taking into account each individual’s role, responsibilities, skills and expertise. Base salaries are reviewed annually, typically in connection with our annual performance review process, approved by our board of directors and adjusted from time to time to realign salaries with market levels after taking into account individual responsibilities, performance and experience.

Annual Bonus

Our annual cash incentive program is designed to reward the achievement of corporate objectives and individual performance. Our named executive officers are eligible to receive annual cash incentive awards, with the target bonus opportunity determined as a percentage of their base salary. Bonus payments are based upon the assessments of individual and company performance measured against prospectively determined objectives, including pipeline development, financial and strategic goals, as determined by our board of directors.

During our fiscal year ended December 31, 2022, the target annual bonuses for Dr. Yao, Dr. Lutzker and Ms. LaChapelle were 50%, 40% and 40% of their base salary, respectively. The annual bonus earned by each named executive officer with respect to our fiscal year ended December 31, 2022 is reported under the “Non-Equity Incentive Plan Compensation” column in the “Summary Compensation Table” above. During our fiscal year ended December 31, 2023, the target annual bonuses for Dr. Yao, Dr. Lutzker and Ms. LaChapelle remained at 50%, 40% and 40% of their base salary, respectively. The annual bonus earned by each named executive officer with respect to our fiscal year ended December 31, 2023 is reported under the “Non-Equity Incentive Plan Compensation” column in the “Summary Compensation Table” above.

Equity Compensation

Although we do not have a formal policy with respect to the grant of equity incentive awards to our executive officers, we believe that equity grants provide our executives with a strong link to our long-term performance, create an ownership culture and help to align the interests of our executives and our stockholders. In addition, we believe that equity grants promote executive retention because they incentivize our executive officers to remain in our employment during the vesting period. Accordingly, our board of directors periodically reviews the equity incentive compensation of our named executive officers and may grant equity incentive awards to them from time to time. Our named executive officers have been granted certain options to purchase shares of our common stock, as described in more detail in the “Outstanding Equity Awards at December 31, 2023” table below.

Offer Letters

We have entered into offer letters with each of our named executive officers in connection with their employment with us, the material terms of which are described below. These offer letters provide for “at will” employment.

Each of the named executive officers, as well as Winston Kung, MBA, our Chief Financial Officer and Treasurer, is a participant in our 2023 Executive Severance Plan (the Severance Plan), the terms of which are described below.

Zhengbin (Bing) Yao, Ph.D.

Zhengbin (Bing) Yao, Ph.D. has served as our Chief Executive Officer since June 1, 2021. We entered into an offer letter with Dr. Yao with respect to his service as Chief Executive Officer on May 5, 2021. Under the terms of the offer letter, Dr. Yao was initially entitled to an annual base salary of $500,000, and was initially eligible to receive a target bonus of 45% of his base salary, with the actual amount of such bonus based on achievement of individual and corporate goals in the discretion of our board of directors. In connection with Dr. Yao’s employment with us, on May 13, 2021, we entered into a Founder Share Restriction Agreement to purchase founder shares (Founder Shares) with Dr. Yao, pursuant to which 599,663 shares of our common stock were issued to Dr. Yao. On December 19, 2022, our board of directors approved an increase in the annual base salary of Dr. Yao to $538,200, effective as of February 1, 2023. Dr. Yao’s annual target bonus was increased to 50% of his annual base salary. On December 21, 2023, our board of directors approved an increase in the annual base salary of Dr. Yao to $560,000, effective as of February 1, 2024. Dr. Yao’s 2024 annual target bonus remains at 50% of his annual salary.

For our fiscal year ended December 31, 2022, Dr. Yao was paid an annual bonus of $258,021. For our fiscal year ended December 31, 2023, Dr. Yao earned an annual bonus of $241,414, which was paid in February 2024. Dr. Yao was also granted option awards to purchase up to an aggregate of 245,231 shares of our common stock on February 1, 2022 and option awards to purchase up to an aggregate of 141,353 shares of our common stock on February 1, 2023. On January 1, 2024, Dr. Yao was granted option awards to purchase up to an aggregate of 264,574 shares of our common stock. The option awards granted to Dr. Yao are subject to a four-year vesting schedule, with 25% vesting one year after the grant date and the balance vesting monthly over the remaining three years, subject to Dr. Yao’s continued service through each vesting date.

By signing the offer letter, Dr. Yao agreed to honor his contractual obligations against disclosing proprietary or trade secret information acquired during prior employment and certified his ability to perform his duties and responsibilities to us without violating his post-employment obligations to former employers. In addition, Dr. Yao agreed not to engage in other employment or activities that conflict with our business during his employment or bring third-party confidential information to us and utilize such information in performing his duties for us.

Stuart Lutzker, M.D., Ph.D.

Stuart Lutzker, M.D., Ph.D. has served as our President of Research and Development since January 25, 2022. He previously served as our Chief Medical Officer beginning June 1, 2021. We entered into an offer letter, dated as of May 1, 2021, with Dr. Lutzker with respect to his service as Chief Medical Officer on May 7, 2021. Under the terms of the offer letter, Dr. Lutzker was initially entitled to an annual base salary of $420,000, and was initially eligible to receive a target bonus of 30% of his base salary, with the actual amount of such bonus based on achievement of individual and corporate goals in the discretion of our board of directors. In connection with Dr. Lutzker’s employment with us, on May 13, 2021, we entered into a Founder Share Restriction Agreement with Dr. Lutzker to purchase Founder Shares, pursuant to which 144,497 Founder Shares were issued to Dr. Lutzker. On December 19, 2022, our board of directors approved an increase in the annual base salary of Dr. Lutzker to $478,400, effective as of February 1, 2023. Dr. Lutzker’s annual target bonus was increased to 40% of his annual base salary. On December 21, 2023, our board of directors approved an increase in the annual base salary of Dr. Lutzker to $497,536, effective as of February 1, 2024. Dr. Lutzker’s 2024 annual target bonus remains at 40% of his annual salary.

For our fiscal year ended December 31, 2022, Dr. Lutzker was paid an annual bonus of $182,667. For our fiscal year ended December 31, 2023, Dr. Lutzker earned an annual bonus of $219,359, which was paid in February 2024. Dr. Lutzker was also granted option awards to purchase up to an aggregate of 67,718 shares of our common stock on February 1, 2022 and option awards to purchase up to an aggregate of 42,734 shares of our common stock on February 1, 2023. On January 1, 2024, Dr. Lutzker was granted option awards to purchase up to an aggregate of 49,309 shares of our common stock. The option awards granted to Dr. Lutzker are subject to a four-year vesting schedule, with 25% vesting one year after the grant date and the balance vesting monthly over the remaining three years, subject to Dr. Lutzker’s continued service through each vesting date.

By signing the offer letter, Dr. Lutzker agreed to honor his contractual obligations against disclosing proprietary or trade secret information acquired during prior employment and certified his ability to perform his duties and responsibilities to us without violating his post-employment obligations to former employers. In addition, Dr. Lutzker agreed not to engage in other employment or activities that conflict with our business during his employment or bring third-party confidential information to us and utilize such information in performing his duties for us.

Robin LaChapelle

Robin LaChapelle has served as our Chief Operating Officer since August 7, 2023. She previously served as our Chief Administrative Officer beginning June 1, 2021. We entered into an offer letter with Ms. LaChapelle with respect to her service as Chief Administrative Officer on May 21, 2021. Under the terms of the offer letter, Ms. LaChapelle was initially entitled to an annual base salary of $262,500 based on a reduced work schedule, and was initially eligible to receive a target bonus of 30% of her base salary, with the actual amount of such bonus based on achievement of individual and corporate goals in the discretion of our board of directors. In connection with Ms. LaChapelle’s employment with us, on May 13, 2021, we entered into a Founder Share Restriction Agreement with Ms. LaChapelle to purchase Founder Shares, pursuant to which 72,248 Founder Shares were issued to Ms. LaChapelle. On December 19, 2022, our board of directors approved an increase in the annual base salary of Ms. LaChapelle to $406,851, effective as of February 1, 2023. Effective February 1, 2023, Ms. LaChapelle’s annual target bonus was increased to 40% of her annual base salary. On December 21, 2023, our board of directors approved an increase in the annual base salary of Ms. LaChapelle to $423,125, effective as of February 1, 2024. Ms. LaChapelle’s 2024 annual target bonus remains at 40% of her annual salary.

For our fiscal year ended December 31, 2022, Ms. LaChapelle was paid an annual bonus of $127,667. For our fiscal year ended December 31, 2023, Ms. LaChapelle earned an annual bonus of $180,614, which was paid in February 2024. Ms. LaChapelle was also granted option awards to purchase up to an aggregate of 43,720 shares of our common stock on February 1, 2022, option awards to purchase up to an aggregate of 31,229 shares of our common stock on February 1, 2023, and option awards to purchase up to an aggregate of 59,171 shares of our common stock on August 22, 2023. On January 1, 2024, Ms. LaChapelle was granted option awards to purchase up to an aggregate of 49,309 shares of our common stock. The option awards granted to Ms. LaChapelle are subject to a four-year vesting schedule, with 25% vesting one year after the grant date and the balance vesting monthly over the remaining three years, subject to Ms. LaChapelle’s continued service through each vesting date.

By signing the offer letter, Ms. LaChapelle agreed to honor her contractual obligations against disclosing proprietary or trade secret information acquired during prior employment and certified her ability to perform her duties and responsibilities to us without violating her post-employment obligations to former employers. In addition, Ms. LaChapelle agreed not to engage in other employment or activities that conflict with our business during her employment or bring third-party confidential information to us and utilize such information in performing her duties for us.

Outstanding Equity Awards at December 31, 2023

The following table shows grants of stock options outstanding on the last day of our fiscal year ended December 31, 2023, to each of the executive officers named in the Summary Compensation Table.

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. This is primarily due to the fact that 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. As a result, we do not believe that our compensation programs are reasonably likely to have a material adverse effect on us.

Potential Payments upon Termination or Change-In-Control

Executive Severance Plan

Each of our named executive officers, as well as Winston Kung, MBA, our Chief Financial Officer and Treasurer, is a participant in the Severance Plan.

Under the Severance Plan, if we terminate a participant’s employment without “Cause” at any time other than during the “Change in Control Period”, then the participant is eligible to receive the following benefits:

Severance is payable in the form of salary continuation. For Dr. Yao, the severance amount is equal to 1.5 times Dr. Yao’s then-current base salary and pro-rated target bonus. For Dr. Lutzker, Ms. LaChapelle and Mr. Kung, the severance amount is equal to 1.25 times their respective then-current base salary and pro-rated target bonus.

Under the Severance Plan, if we terminate a participant’s employment without “Cause” or a participant resigns for “Good Reason”, during the “Change in Control Period”, then the participant is eligible to receive the following benefits:

Severance is payable in a single lump sum. For Dr. Yao, the severance amount is equal to 2 times Dr. Yao’s then-current base salary and target bonus. For Dr. Lutzker, Ms. LaChapelle and Mr. Kung, the severance amount is equal to 1.5 times their respective then-current base salary and target bonus.

The following terms have the following meanings under the Severance Plan:

Director Compensation

We did not pay any compensation, make any equity awards or non-equity awards to or pay any other compensation to any of the non-employee members of our board of directors in our fiscal year ended December 31, 2023 for their services as members of the board of directors except for Bahija Jallal, Ph.D., who received an option award to purchase 6,574 shares of our common stock under the 2021 Plan in connection with her service as a member of the board of directors in February 2023, and Chris W. Nolet who received an option award to purchase 16,436 shares of our common stock under the 2021 Plan in connection with his service as a member of the board of directors in September 2023.

The following table provides information concerning compensation earned by our non-employee directors during our fiscal year ended December 31, 2023:

Non-Employee Director Compensation Policy

We have adopted a policy with respect to the compensation payable to our non-employee directors, other than any director that is affiliated with an institutional investor that held shares of our Series A or Series B convertible preferred stock prior to closing of our initial public offering in January 2024, which became effective upon the completion of our initial public offering. Under this policy, each such non-employee director is eligible to receive compensation for his or her service consisting of annual cash retainers and equity awards. Dr. Yao and Dr. Lutzker will not receive separate compensation from us for serving as members of our board of directors. Our non-employee directors will receive the following annual retainers for their service:

Equity awards for non-employee directors will consist of (i) an initial equity award consisting of options to purchase shares of our common stock, with a grant date fair value of $235,000, upon first appointment to the board of directors, vesting on the first anniversary of the date of the grant and (ii) annual equity awards consisting of options to purchase shares of our common stock, with a grant date fair value of $235,000, vesting on the date of the next annual meeting of stockholders following the grant date. The term of each option will be ten years, subject to earlier termination as provided in the 2024 Plan.

Directors may be reimbursed for travel, food, lodging and other expenses directly related to their service as directors. Directors are also entitled to the protection provided by their indemnification agreements and the indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws.

Equity Compensation Plan and Other Benefit Plans

Equity Compensation Plans

Our equity compensation plans were established to attract, retain and motivate our employees, officers, directors, consultants, agents, advisors and independent contractors by providing them with the opportunity to acquire a proprietary interest in us and to align their interests and efforts with the long-term interests of our stockholders. On June 9, 2021, our board of directors adopted, and our stockholders approved the 2021 Plan. On October 12, 2023, our board of directors adopted the 2024 Equity Incentive Plan (the 2024 Plan, collectively with the 2021 Plan, the Plans). The Plans provide for, among other things, grants of stock options, restricted stock units, restricted stock and other stock-based awards to employees, directors, consultants who provide services to us and our affiliates. We have 3,952,835 shares of our common stock reserved for issuance under the 2024 Plan (plus any shares available for future grants under our 2021 Plan and any shares underlying outstanding stock awards granted under our 2021 Plan that expire or are repurchased, forfeited, cancelled or withheld). Since our 2024 Plan has been approved by our stockholders, we will not make any additional grants under the 2021 Plan.

Other Benefits

All of our current named executive officers are eligible to participate in our employee benefit plans, including our medical, dental, vision, life and disability insurance plans, in each case on the same basis as all of our other employees.

401(k) Plan

We maintain a 401(k) plan for employees. The 401(k) plan is intended to qualify under Section 401(k) of the Internal Revenue Service Code of 1986, as amended, so that contributions to the 401(k) plan by employees or by us, and the investment earnings thereon, are not taxable to the employees until withdrawn from the 401(k) plan, and so that contributions by us, if any, will be deductible by us when made. Under the 401(k) plan, our employees may elect to reduce their current compensation by up to the statutorily prescribed annual limit and to have the amount of such reduction contributed to the 401(k) plan, and we make a matching contribution of 100% of salary deferral contributions up to 4% of pay for each payroll period.

Rule 10b5-1 Sales Plans

Our directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or officer when entering into the plan, without further direction from the director or officer. The director or officer may amend or terminate the plan in limited circumstances. Our directors and executive officers may also buy or sell additional shares of our common stock outside of a Rule 10b5-1 plan when they are not in possession of material, nonpublic information.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters