PROPOSAL 1: ELECTION OF DIRECTORS

General

Our Certificate of Incorporation provides for a classified Board consisting of three classes of directors. Each class serves for a three-year term. Vacancies on our Board may be filled only by persons elected by a majority of the remaining directors. A director elected by our Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified.

Our Board is currently composed of ten directors, and there are four directors whose term of office expires in 2023: Mark Chin, Andrew Robbins, Alan Colowick and Joanne Viney. Drs. Colowick and Viney have not been nominated for reelection and, accordingly, their terms will expire immediately prior to the Annual Meeting. Effective as of the date of the Annual Meeting, the size of the Board will be reduced to eight directors. Each of the nominees listed below is currently a director who was previously elected by the stockholders at our annual meeting of stockholders in 2020. If the nominees listed below are elected, they will each hold office until the annual meeting of stockholders in 2026 and until each of their successors has been duly elected and qualified or, if sooner, until the director’s death, resignation or removal. All nominees have consented to being named in this Proxy Statement and to serve if elected.

The brief biographies below include information, as of the date of this Proxy Statement, regarding the specific and particular experience, qualifications, attributes or skills that led the Nominating and Corporate Governance Committee to believe that each director or nominee should serve on the Board. There are no family relationships among any of our executive officers or directors.

 

Nominees		Age(1)		Term Expires		Position(s) Held		Director Since
Mark Chin		41		2023		Director		2017
Andrew Robbins		47		2023		Director		2020

 

(1)	As of the date of this Proxy Statement.

Class I Directors—Nominees for Election at the Annual Meeting

Mark Chin has served as a member of our Board since May 2017. Mr. Chin has served as a managing director at Arix Bioscience, a biotech-focused venture capital firm, since July 2021 and was previously an investment director there from July 2016 to April 2020. Prior to Arix Bioscience, he was a principal at Longitude Capital, a healthcare venture capital firm, from January 2012 to August 2018, where he focused on investments in both private and public biotechnology and medical technology companies. Prior to Longitude Capital, Mr. Chin was a consultant at the Boston Consulting Group, a global management consulting firm, from January 2011 to January 2012, where he managed strategy and corporate development projects for pharmaceutical and biotechnology companies, and prior to Boston Consulting Group, he worked in corporate development at Gilead Sciences, a biotechnology company, and in market planning at Genentech, a biotechnology company. Mr. Chin currently serves as a member of the boards of directors of public pharmaceutical companies Disc Medicine, Inc. (Nasdaq: IRON), Imara Inc. (Nasdaq: IMRA) and Iterum Therapeutics (Nasdaq: ITRM). He served on the board of directors of Pyxis Oncology (Nasdaq: PYSX), a public pharmaceutical company, from July 2021 to April 2022. Mr. Chin holds a B.S. in Management Science from the University of California at San Diego, an M.S. in Biotechnology from the University of Pennsylvania and an M.B.A. from The Wharton School at the University of Pennsylvania. Our Board believes that Mr. Chin’s expertise and experience in the life sciences industry, experience as a director of other public companies in our industry and his educational background provide him with the qualifications and skills to serve on our Board.

 

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Andrew Robbins has served as a member of our Board since March 2020. Since October 2020, Mr. Robbins has served as CEO and President, and as a member of the board of directors of, Cogent Biosciences, Inc. (Nasdaq: COGT), a biotechnology company. Mr. Robbins served as Chief Operating Officer at Array BioPharma Inc., a pharmaceutical company, from March 2015 through its acquisition by Pfizer Inc., a pharmaceutical company, in July 2019, after serving as its Senior Vice President, Commercial Operations from July 2012 to March 2015. From January 2007 to July 2012, Mr. Robbins held management positions at Hospira, Inc., a pharmaceutical and medical device company, including General Manager and Vice President of the U.S. Alternate Site business unit and Vice President of Corporate Development. Prior to Hospira, Mr. Robbins held commercial and leadership positions within Pfizer’s oncology unit. Mr. Robbins previously served on the board of directors of Turmeric Acquisition Corp. (Nasdaq: TMPM), a special purpose acquisition company, from October 2020 until December 2022. Mr. Robbins holds a B.A. from Swarthmore College and an M.B.A. from the Kellogg School of Management at Northwestern University. Our Board believes that Mr. Robbins’ expertise and experience in the life sciences industry provide him with the qualifications and skills to serve on our Board.

Vote Required

Directors are elected by a plurality of the votes of the holders of shares present or represented by proxy and entitled to vote at the Annual Meeting on the election of directors. Accordingly, the two nominees receiving the highest number of affirmative votes will be elected. You may not vote your shares cumulatively for the election of directors. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the two nominees named above. If any nominee becomes unavailable for election as a result of an unexpected occurrence, your shares will be voted for the election of a substitute nominee proposed by our Board. The Board has no reason to believe that any of the nominees would prove unable to serve if elected. There are no arrangements or understandings between us and any director, or nominee for directorship, pursuant to which such person was selected as a director or nominee.

Our Recommendation

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE NAMED DIRECTOR NOMINEES.

Information About Our Continuing Directors

Set forth below are the names, ages and length of service of the remaining members of our Board whose terms continue beyond the Annual Meeting.

 

Continuing Directors		Age(1)				Term Expires				Position(s) Held		Director Since
Jonathan Drachman, M.D.			61				2024			Director			2018
Joseph Bailes, M.D.			66				2024			Director			2020
Ronald Hunt			58				2024			Director			2017
Julie Eastland			59				2025			Director, President, CEO and Secretary			2018
Scott Myers			57				2025			Director			2018
Lauren P. Silvernail			64				2025			Director			2022

 

(1)	As of the date of this Proxy Statement.

The principal occupation, business experience and education of each continuing director are set forth below.

Class II Directors—Continuing in Office until the 2024 Annual Meeting of Stockholders

Joseph Bailes, M.D. has served as a member of our Board since March 2020. Dr. Bailes is a medical oncologist with experience in clinical practice, legislation, public policy and advocacy and has served as an

 

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industry consultant for the past decade, including as Senior Advisor to the American Society of Clinical Oncology (ASCO) Government Relations Council since 2010. In addition, Dr. Bailes previously served in various executive leadership roles at ASCO until 2010, including as President, Interim Executive Vice President, Chief Executive Officer, Chair of the Clinical Research Committee and Chair of the Government Relations Council. Industry companies with which Dr. Bailes has consulted include Kite Pharma, Inc. (a subsidiary of Gilead Sciences, Inc.), Eli Lilly and Company (NYSE: LLY), G1 Therapeutics, Inc. (Nasdaq: GTHX), and Telik, Inc. In addition, Dr. Bailes has many years of oncology practice experience in the private sector as a former partner at Texas Oncology, P.A., an oncology practice group, and as a founding member of, and the President of Research overseeing clinical trials and drug development activities at Physician Reliance Network, LLC, a health care company and corporate predecessor of US Oncology, Inc., where he then served as Executive Vice President of Clinical Affairs. Dr. Bailes holds a B.A. from the University of Texas at Austin and an M.D. from the University of Texas Southwestern Medical School, Dallas. Dr. Bailes completed his internship and residency at the Parkland Memorial Hospital in Dallas and his Medical Oncology/Hematology Fellowship at the University of Texas Health Science Center in San Antonio, where he also served as a Clinical Assistant Professor. Our Board believes that Dr. Bailes’ medical expertise and experience in the biopharmaceutical industry provide him with the qualifications and skills to serve on our Board.

Jonathan Drachman, M.D. has served as a member of our Board since September 2018. From January 2019 through March 2023, Dr. Drachman served as Chief Executive Officer and President of Neoleukin Therapeutics, Inc. (Nasdaq: NLTX), a biotechnology company that uses computational algorithms to design de novo proteins for the treatment of cancer, inflammation and autoimmune diseases. He was also on Neoleukin’s board of directors from August 2019 through March 2023. Previously, Dr. Drachman served as the Chief Medical Officer and Executive Vice President, Research and Development of Seattle Genetics (Nasdaq: SGEN), a biotechnology company, from October 2013 until May 2018, after serving as their Senior Vice President, Research and Translational Medicine and various other positions of increasing authority since November 2004. Prior to Seattle Genetics, Dr. Drachman was Associate Professor in the Hematology Division, Department of Medicine at the University of Washington in Seattle, where he remains a Clinical Professor of Medicine. He also served as Senior Investigator in the Division of Research and Education and Medical Director of the Umbilical Cord Blood Program at the Puget Sound Blood Center. Dr. Drachman was on the board of directors of Calithera Biosciences, Inc. (Nasdaq: CALA) from December 2013 to June 2022. Dr. Drachman holds a B.A. in Biochemistry from Harvard University and an M.D. from Harvard Medical School. He completed his residency in Internal Medicine and fellowship in Medical Oncology at the University of Washington School of Medicine. Our Board believes that Dr. Drachman’s scientific and professional expertise and his educational background provide him with the qualifications and skills to serve on our Board.

Ronald Hunt has served as a member of our Board since May 2017 and was the Chair of our Board from April 2020 to October 2021. Mr. Hunt co-founded and has served as a Managing Director of New Leaf Venture Partners, a venture capital fund focused on biopharmaceuticals and other healthcare technologies, since 2005. From 1998 to 2005, Mr. Hunt was a partner at the Sprout Group, an institutional venture capital firm. Prior to Sprout, Mr. Hunt was a consultant within the pharmaceutical industry practice at Coopers & Lybrand Consulting, a consulting firm, and a consultant at The Health Care Group (a division of the Interpublic Group), a strategy consulting firm. Prior to the Health Care Group, Mr. Hunt held a number of roles in the sales and marketing divisions of Johnson & Johnson (NYSE: JNJ) and SmithKline Beecham Pharmaceuticals, both pharmaceutical companies. Mr. Hunt currently serves on the boards of directors of public companies Iterum Therapeutics plc (Nasdaq: ITRM) and Rallybio Corporation (Nasdaq: RLYB), and has previously served as a director for Neuronetics, Inc. (Nasdaq: STIM). Mr. Hunt holds a B.S. from Cornell University and an M.B.A. from The Wharton School at the University of Pennsylvania. Our Board believes that Mr. Hunt’s expertise and experience in the venture capital and pharmaceutical industry, and his educational background provide him with the qualifications and skills to serve on our Board.

 

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Class III Directors—Continuing in Office until the 2025 Annual Meeting of Stockholders

Julie Eastland has served as our President and Chief Executive Officer since November 2021 and as a member of our Board since October 2018. Between October 2020 and November 2021, Ms. Eastland served as the Chief Operating Officer and Chief Financial Officer of ReCode Therapeutics, Inc., a biopharmaceutical company. Prior to ReCode Therapeutics, Ms. Eastland served as the Chief Financial and Business Officer of Rainier Therapeutics, Inc., a biotechnology company, from August 2018 to January 2020. Prior to Rainier Therapeutics, Ms. Eastland served as Chief Business Officer and Chief Financial Officer for Cascadian Therapeutics, Inc., a biotechnology company, from September 2010 through its acquisition by Seattle Genetics in March 2018. Prior to Cascadian, Ms. Eastland served as the Chief Financial Officer and Vice President of Finance and Administration for VLST Corporation, a biotechnology company, from January 2006 to September 2010. Prior to VLST Corporation, Ms. Eastland was the Vice President of Strategic Planning at Dendreon Corporation, a biotechnology company, from October 2000 to October 2005. Prior to Dendreon, Ms. Eastland was the Controller at Amgen, a biopharmaceutical company, from March 1996 to April 1998. Ms. Eastland previously served on the board of directors of Pascal Biosciences Inc and Graybug Vision. She also currently serves on the board of directors of Dynavax Technologies Corporation (Nasdaq: DVAX), a biotechnology company. Ms. Eastland holds a B.S. in Finance from Colorado State University and an M.B.A. from Heriot-Watt University of the Edinburgh University in Scotland. Our Board believes that Ms. Eastland’s extensive professional experience and expertise in the biopharmaceutical industry provide her with the qualifications and skills to serve on our Board.

Scott Myers has served as Chair of our Board since October 2021 and a member of our Board since August 2018. Mr. Myers has served as the President, Chief Executive Officer and a director of Viridian Therapeutics, Inc. since February 2023. He was previously the CEO and served on the board of directors of AMAG Pharmaceuticals, Inc., a pharmaceutical company, beginning in April 2020 and led the Company’s turnaround and strategic exit to Covis Pharma, S.à.r.l., a pharmaceutical company, in November 2020. Mr. Myers has served as Chairman of the board of directors of Rainier Therapeutics, Inc., an oncology biotechnology company focused on late-stage bladder cancer, from June 2018 to January 2020, and served as its Chief Executive Officer from September 2018 to January 2020. Mr. Myers led Rainier’s asset sale of vofatamab to Fusion Pharmaceuticals Inc. Prior to Rainier, Mr. Myers served as Chief Executive Officer, President and Director for Cascadian Therapeutics, Inc., an oncology company, from April 2016 through its acquisition by Seattle Genetics in March 2018. Prior to Cascadian, Mr. Myers served as the Chief Executive Officer of Aerocrine AB, a Swedish medical device company from September 2011 through its acquisition by Circassia Pharmaceuticals plc in July 2015. Mr. Myers is chairman of the board of directors of Dynavax Technologies Corp. (Nasdaq: DVAX) and an independent director on the board of directors of Selecta Biosciences (Nasdaq: SELB), a clinical stage biotechnology company, where he serves as chairman of the compensation and benefits committee and as a member of the nomination and governance committee. Mr. Myers was an independent director at Trillium Therapeutics Inc. (Nasdaq: TRIL) prior to its acquisition by Pfizer Inc. (NYSE: PFE) in November 2021.

Our Board recognizes that certain institutional investors and proxy advisory firms may deem Mr. Myers “overboarded” based on the number of public company boards on which he serves, while also serving as Chief Executive Officer of Viridian Therapeutics. Mr. Myers has demonstrated his ability to dedicate sufficient time and focus to his duties as a member of our Board, including by performing his roles as Chair of the Board, Chair of the Nominating and Corporate Governance Committee and member of our Audit Committee. He attended all of our Board and relevant committee meetings in 2022. Mr. Myers also expects to reduce the number of other boards of directors on which he serves within the next 12 months, in a gradual process to facilitate orderly transition. Mr. Myers holds a B.A. in Biology from Northwestern University and an M.B.A. from the Graduate School of Business (Booth) at the University of Chicago. Our Board believes that Mr. Myers’ experience in the biotechnology industry and his extensive experience in the leadership of both commercial and development stage biopharmaceutical companies provide him with the qualifications and skills to serve on our Board.

 

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Lauren P. Silvernail has served as a member of our board since September 2022. She previously served as Chief Financial Officer and Executive Vice President, Corporate Development of Evolus, Inc. from May 2018 through May 2022. Prior to that time, Ms. Silvernail served as the Chief Financial Officer and Chief Business Officer of Revance Therapeutics, Inc., a pharmaceutical research and development company, from December 2015 to May 2018 and as Chief Financial Officer and Executive Vice President, Corporate Development from March 2013 to December 2015. From 2003 to 2012, Ms. Silvernail was Chief Financial Officer and Vice President of Corporate Development at ISTA Pharmaceuticals, Inc., a commercial pharmaceutical company. From 1995 to 2003, Ms. Silvernail served in various operating and corporate development positions with Allergan, including Vice President, Business Development. Prior to joining Allergan, Mrs. Silvernail worked at Glenwood Ventures, an investment firm, as a General Partner. She currently serves on the board of directors and as a member of the audit and compensation committees and as chairwoman of the corporate governance committee of Nicox S.A. Ms. Silvernail holds a B.A. in Biophysics from the University of California, Berkeley and an M.B.A. from the Anderson Graduate School of Management at the University of California, Los Angeles. Our Board believes that Ms. Silvernail’s decades of experience in lead financial and business development roles provide her with the qualifications and skills to serve on our Board.

Board Diversity

Due to the global and complex nature of our business, the Board believes it is important to consider diversity of race, ethnicity, gender, sexual orientation, age, education, cultural background, and professional experiences in evaluating board candidates in order to provide practical insights and diverse perspectives. Below is an overview of the diversity statistics for our Board:

 

Board Diversity Matrix (As of April 27, 2023)(1)
Total Number of Directors			10
		Female				Male				Non-Binary				Did Not Disclose Gender
Part I: Gender Identity
Directors			3				7				0				0
Part II: Demographic Background
African American or Black			0				0				0				0
Alaskan Native or Native American			0				0				0				0
Asian			0				1				0				0
Hispanic or Latinx			0				0				0				0
Native Hawaiian or Pacific Islander			0				0				0				0
White			3				6				0				0
Two or More Races or Ethnicities			0				0				0				0
LGBTQ+			0
Did Not Disclose Demographic Background			0

 

(1)

The Board Diversity Matrix in our proxy statement filed in conjunction with our 2022 Annual Meeting of Stockholders included the same overview.

 

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INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE

Board Independence

As required under Nasdaq listing standards, a majority of the members of a listed company’s Board must qualify as “independent,” as affirmatively determined by the Board. The Board consults with our counsel to ensure that the Board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of Nasdaq, as in effect from time to time.

Consistent with these considerations, after review of all relevant identified transactions or relationships between each director, or any of his or her family members, and our company, our senior management and our independent registered public accounting firm, our Board has affirmatively determined that all of our directors, except Ms. Eastland, by virtue of her position as President and Chief Executive Officer, are independent directors within the meaning of the applicable Nasdaq listing standards. In making these determinations, our Board has determined, upon the recommendation of our Nominating and Corporate Governance Committee and considered certain relationships and transactions that occurred between the Company and entities with which some of our directors are affiliated, including the affiliation of Mr. Hunt with New Leaf Biopharma Opportunities II, L.P. (“BPO-II”), as a managing director of New Leaf BPO Management II, L.L.C. (“BPO Management-II”), and Mr. Chin with Arix Bioscience Holdings Limited, as a managing director of Arix Bioscience Plc. Both BPO-II and Arix Bioscience Holdings Limited were purchasers in our private placement offering of our Series A redeemable preferred stock and warrants to purchase shares of our common stock. The sole general partner of BPO-II is New Leaf BPO Associates II, L.P. (“NLBA-II”). The sole general partner of NLBA-II is BPO Management-II. Our Board has determined that none of these directors or nominees for director had a material or other disqualifying relationship with the Company. The Board also determined that each member of our Audit, Compensation and Nominating and Corporate Governance Committees satisfies the independence standards for such committees established by the SEC and the Nasdaq listing standards, as applicable.

Leadership Structure and Risk Oversight

The Board has an independent chair (the “Board Chair”), Mr. Myers, who has authority, among other things, to call and preside over Board meetings, including meetings of the independent directors, to set meeting agendas and to determine materials to be distributed to the Board. The Board Chair has substantial ability to shape the work of the Board. We believe that separation of the positions of Board Chair and Chief Executive Officer reinforces the independence of the Board in its oversight of the business and affairs of the Company. In addition, we believe that having an independent Board Chair creates an environment that is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of the Board to monitor whether management’s actions are in the best interests of us and our stockholders. As a result, we believe that having an independent Board Chair can enhance the effectiveness of the Board as a whole.

One of the Board’s key functions is informed oversight of our risk management process. The Board does not have a standing risk management committee, but rather administers this oversight function directly through the Board as a whole, as well as through various Board standing committees that address risks inherent in their respective areas of oversight. In particular, our Board is responsible for monitoring and assessing strategic risk exposure, including a determination of the nature and level of risk appropriate for the Company. Our Audit Committee has the responsibility to consider and discuss with management and the independent registered public accounting firm, as appropriate, our guidelines and policies with respect to financial risk management and financial risk assessment, including our major financial risk exposures and the steps taken by management to monitor and control these exposures. In addition, the Audit Committee considers management risks relating to data privacy, technology and information security, including cyber security, and back-up of information systems and the steps we have taken to monitor and control such exposures. Our Compensation Committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking, including risks related to executive compensation and overall compensation and benefit strategies, plans, arrangements, practices and policies. Our Nominating and Corporate Governance Committee monitors the

 

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effectiveness of our corporate governance guidelines, including whether they are successful in preventing illegal or improper liability-creating conduct. The Nominating and Corporate Governance Committee also oversees and reviews with management our major legal compliance risk exposures and the steps management has taken to monitor or mitigate such exposures, including our procedures and any related policies with respect to risk assessment and risk management. It is the responsibility of the committee chairs to report findings regarding material risk exposures to the Board as quickly as possible. In connection with its reviews of the operations and corporate functions of the Company, our Board addresses the primary risks associated with those operations and corporate functions. In addition, our Board reviews the risks associated with our business strategies periodically throughout the year as part of its consideration of undertaking any such business strategies. While the Board and its committees oversee risk management strategy, management is responsible for implementing and supervising day-to-day risk management processes and reporting to the Board and its committees on such matters.

Board Meetings and Attendance

Our Board held nine meetings during the fiscal year ended December 31, 2022. Each of the incumbent directors attended at least 75% of the total of the meetings of the Board and the meetings of the committees of the Board on which they served during the fiscal year ended December 31, 2022 (in each case, which were held during the period for which they were a director and/or a member of the applicable committee). It is our policy to encourage our directors to attend the Annual Meeting. All of the then-serving members of our Board attended the 2022 Annual Meeting of Stockholders.

As required under applicable Nasdaq listing standards, in the fiscal year ended December 31, 2022, our independent, non-employee directors met regularly in scheduled executive sessions at which only independent directors were present.

Board Committees

The following table provides current membership information and the total number of meetings held during the fiscal year ended December 31, 2022 for three of the Board’s standing committees: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. The Board also has a Research and Development Committee that meets periodically as needed.

In September 2022, concurrent with her appointment to our Board, Ms. Silvernail joined our Audit Committee, as Chair of the committee.

 

Name

Audit Committee

Compensation Committee

Nominating and Corporate Governance Committee

Joseph Bailes, M.D.

X

Mark Chin

X

Alan Colowick, M.D.¥

X

Jonathan Drachman, M.D.

X

Julie Eastland

Ronald Hunt

X

*

Scott Myers†

X

X

*

Andrew Robbins†

X

X

Lauren P. Silvernail†

X

*

Joanne Viney, Ph.D.¥

X

Total meetings held in 2022

4

7

3

 

†	Audit Committee Financial Expert

*	Committee Chair

¥	Term expires effective as of the Annual Meeting

 

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

Audit Committee

The Audit Committee of the Board was established by the Board in accordance with Section 3(a)(58)(A) of the Exchange Act to oversee our corporate accounting and financial reporting processes and audits of its financial statements. For this purpose, the Audit Committee performs several functions, including, among other things:

 

•

evaluating the performance of and assessing the qualifications of the independent registered public accounting firm;

 

•

determining whether to retain or terminate the engagement of the existing independent registered public accounting firm or to appoint and engage a new independent registered public accounting firm;

 

•

reviewing written disclosure on independence of the independent registered public accounting firm prior to their engagement;

 

•

determining and approving the engagement of the independent registered public accounting firm;

 

•

determining and approving the engagement of the independent registered public accounting firm to perform any proposed permissible non-audit services;

 

•

monitoring the rotation of partners of the independent registered public accounting firm on the Company’s audit engagement team as required by applicable laws and rules;

 

•

assessing, at least annually, and taking appropriate action to oversee the independence of the independent registered public accounting firm;

 

•

considering and adopting policies regarding preapproval of employment by the Company of individuals employed or formerly employed by the independent registered public accounting firm;

 

•

reviewing with Company management and the independent registered public accounting firm the results of the annual audit, the independent registered public accounting firm’s views on the Company’s significant accounting practices, the reasonableness of significant judgments and estimates, all known and likely misstatements identified during the audit and other matters required to be communicated under PCAOB standards;

 

•

reviewing the Company’s annual audited financial statements, quarterly financial statements and disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s filings to be filed with the SEC with management and the independent registered public accounting firm, as appropriate;

 

•

overseeing the preparation of the Audit Committee report included in the Company’s annual proxy statement;

 

•

reviewing and establishing appropriate insurance coverage for the Company’s directors and officers;

 

•

reviewing with management and the independent registered public accounting firm, as appropriate, significant issues that arise regarding accounting principles and financial statement presentation;

 

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•

reviewing and discussing with management and the independent registered public accounting firm, as appropriate, the Company’s guidelines and policies with respect to financial risk management and financial risk assessment, as well as management risks related to data privacy, technology and information security;

 

•

establishing procedures, as required under applicable law, for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters;

 

•

reviewing the results of management’s efforts to monitor compliance with the Company’s programs and policies designed to ensure adherence to applicable laws and rules, as well as to its Code of Business Conduct and Ethics; and

 

•

reviewing and evaluating, at least annually, the performance of our Audit Committee and the adequacy of its charter.

During 2022, Ms. Silvernail, Messrs. Myers and Robbins and Dr. Viney served as the members of the Audit Committee, with Ms. Silvernail serving as Chair of the committee. Ms. Silvernail joined the Audit Committee as Chair in September 2022. As of the Annual Meeting, Dr. Viney will no longer be a member of the Audit Committee. The Board has determined that Ms. Silvernail and Messrs. Myers and Robbins are each an “audit committee financial expert” within the meaning of the SEC regulations and applicable listing standards of Nasdaq. Our Board has determined that each of the members of our Audit Committee satisfies the independence requirements under the listing standards of Nasdaq and Rule 10A-3(b)(1) of the Exchange Act. The Audit Committee met four times during the fiscal year ended December 31, 2022.

Report of the Audit Committee of the Board of Directors

The material in this report is not “soliciting material,” is not deemed filed with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

The Audit Committee has reviewed and discussed the audited financial statements for the fiscal year ended December 31, 2022 with management of the Company. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The Audit Committee has also received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountants’ communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm the accounting firm’s independence. Based on the foregoing, the Audit Committee has recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Harpoon Therapeutics, Inc.

Audit Committee

Lauren Silvernail (Chair)

Andrew Robbins

Scott Myers

Joanne Viney, Ph.D.

 

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Compensation Committee

The primary purpose of our Compensation Committee is to discharge the responsibilities of our Board in overseeing our compensation policies, plans and programs and to review and determine the compensation to be paid to our executive officers, directors and other senior management, as appropriate. Specific responsibilities of our Compensation Committee include:

 

•

reviewing and modifying, or reviewing and recommending, as applicable, our overall compensation strategy and policies;

 

•

reviewing and approving, or reviewing and recommending to the Board for approval, compensation and other terms of employment of our chief executive officer and our other executive officers and reviewing and approving corporate performance goals and objectives relevant to such compensation;

 

•

reviewing and recommending to our full Board the compensation of the members of our Board;

 

•

administering the equity incentive plans, compensation plans and similar programs advisable for us, as well as reviewing, adopting, amending and terminating such plans and programs;

 

•

providing recommendations to the Board on compensation related proposals to be considered at the Company’s annual meeting; and

 

•

reviewing and evaluating, at least annually, the performance of our Compensation Committee and the adequacy of its charter.

During 2022, Messrs. Chin, Hunt and Robbins and Dr. Colowick served as the members of the Compensation Committee, with Mr. Hunt serving as Chair of the committee. As of the Annual Meeting, Dr. Colowick will no longer be a member of the Compensation Committee. Our Board has determined that each of the members of our Compensation Committee is independent under the listing standards of Nasdaq and a “non-employee director” as defined in Rule 16b-3 under the Exchange Act. The Compensation Committee met seven times during the fiscal year ended December 31, 2022.

Compensation Committee Processes and Procedures

Typically, the Compensation Committee meets quarterly and with greater frequency if necessary. The agenda for each meeting is usually developed by the Chair of the Compensation Committee, in consultation with our Chief Executive Officer. The Compensation Committee meets regularly in executive session. However, from time to time, various members of management and other employees as well as outside advisers or consultants may be invited by the Compensation Committee to make presentations, to provide financial or other background information or advice or to otherwise participate in Compensation Committee meetings. The Chief Executive Officer may not participate in, or be present during, any deliberations or determinations of the Compensation Committee regarding his or her compensation or individual performance objectives. The charter of the Compensation Committee grants the Compensation Committee full access to all books, records, facilities and personnel of the Company. In addition, under the charter, the Compensation Committee has the authority to obtain, at our expense, advice and assistance from compensation consultants and internal and external legal, accounting or other advisers and other external resources that the Compensation Committee considers necessary or appropriate in the performance of its duties. The Compensation Committee has direct responsibility for the oversight of the work of any consultants or advisers engaged for the purpose of advising the Compensation Committee. In particular, the Compensation Committee has the authority to retain compensation consultants to assist in its evaluation of executive and director compensation, including authority to approve the consultant’s reasonable fees and other retention terms. Under the charter, the Compensation Committee may select, or receive advice from, a compensation consultant, legal counsel or other adviser to the Compensation Committee, other than in-house legal counsel and certain other types of advisers, only after assessing the independence of such person in accordance with SEC and Nasdaq requirements that bear upon the adviser’s independence; however, there is no requirement that any adviser be independent.

 

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During the past fiscal year, after taking into consideration the six factors prescribed by the SEC and Nasdaq, the Compensation Committee engaged Compensia, Inc. (the “Consultant”), a compensation consulting firm, as a compensation consultant. The Compensation Committee has assessed the Consultant’s independence and determined that the Consultant had no conflicts of interest in connection with its provisions of services to the Compensation Committee. Specifically, the Compensation Committee engaged the Consultant to provide market data, peer group analysis and conduct an executive compensation assessment analyzing the current cash and equity compensation of our executive officers and directors against compensation for similarly situated executives at our peer group. Our management did not have the ability to direct the Consultant’s work.

Historically, our Compensation Committee has made most of the significant adjustments to annual compensation, determined bonus and equity awards and established new performance objectives at one or more meetings held during the first quarter of the year. However, our Compensation Committee also considers matters related to individual compensation, such as compensation for new executive hires, as well as high-level strategic issues, such as the efficacy of our compensation strategy, potential modifications to that strategy and new trends, plans or approaches to compensation, at various meetings throughout the year. Generally, the Compensation Committee’s process comprises two related elements: the determination of compensation levels and the establishment of performance objectives for the current year. For executives other than the Chief Executive Officer, our Compensation Committee solicits and considers evaluations and recommendations submitted to the Compensation Committee by the Chief Executive Officer. In the case of the Chief Executive Officer, the evaluation of his or her performance is conducted by the Compensation Committee, which determines any adjustments to his or her compensation as well as awards to be granted. For all executives and directors as part of its deliberations, the Compensation Committee may review and consider, as appropriate, materials such as executive and director stock ownership information, company stock performance data, analyses of historical executive compensation levels and current Company-wide compensation levels, including analyses of executive and director compensation paid at a peer group of other companies approved by our Compensation Committee.

Nominating and Corporate Governance Committee

Specific responsibilities of our Nominating and Corporate Governance Committee include:

 

•

identifying, evaluating, nominating and recommending individuals for membership on our Board;

 

•

reviewing periodically and evaluating director performance on our Board and its applicable committees, and recommending to our Board and management areas for improvement;

 

•

overseeing the Board’s committee structure and operations, including reviewing its authority to delegate to subcommittees and committees reporting to the Board and making recommendations to the Board at least annually on committee chairs and membership;

 

•

reviewing and recommending to our Board any amendments to our corporate governance policies;

 

•

periodically reviewing with our Chief Executive Officer the plans for succession for our executive officers, and making recommendations to the Board with respect to the selection of appropriate individuals to succeed these positions;

 

•

periodically reviewing the processes and procedures used by the Company to provide information to the Board and its committees, and making recommendations to the Board and management for improvement, as appropriate; and

 

•

reviewing and assessing, at least annually, the performance of our Nominating and Corporate Governance Committee and the adequacy of its charter.

During 2022, Mr. Myers and Drs. Bailes and Drachman served as the members of the Nominating and Corporate Governance Committee, with Mr. Myers serving as Chair of the Committee. Our Board has

 

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determined that each member of our Nominating and Corporate Governance Committee is independent under the applicable listing standards of Nasdaq. The Nominating and Corporate Governance Committee met three times during the fiscal year ended December 31, 2022.

The Nominating and Corporate Governance Committee believes that candidates for director should have certain minimum qualifications, including the ability to read and understand basic financial statements, understand the Company’s industry and having the highest personal integrity and ethics. The Nominating and Corporate Governance Committee also intends to consider such factors as possessing relevant expertise upon which to be able to offer advice and guidance to management, having sufficient time to devote to the affairs of the Company, demonstrated excellence in his or her field, having the ability to exercise sound business judgment and having the commitment to rigorously represent the long-term interests of our stockholders. However, the Nominating and Corporate Governance Committee retains the right to modify these qualifications from time to time, subject to Board approval. Candidates for director nominees are reviewed in the context of the current composition of the Board, the operating requirements of the Company and the long-term interests of stockholders. In conducting this assessment, the Nominating and Corporate Governance Committee typically considers diversity, age, skills and such other factors as it deems appropriate, given the current needs of the Board and the Company, to maintain a balance of knowledge, experience and capability.

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

The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate was recommended by a stockholder. Stockholders who wish to recommend individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the Board may do so by providing timely notice in writing to our Corporate Secretary at c/o Harpoon Therapeutics, Inc., 131 Oyster Point Boulevard, Suite 300, South San Francisco, California 94080. Stockholders who intend to solicit proxies in support of director nominees other than our nominees must also comply with the additional requirements of Rule 14a-19(b). To be timely, we must receive the notice not less than 90 days nor more than 120 days prior to the anniversary of the prior year’s annual meeting of stockholders; provided, however, that in

 

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the event that no annual meeting was held during the preceding year or the date of the annual meeting is more than 30 days before or more than 30 days after such anniversary date, we must receive the stockholder’s notice (i) no earlier than the close of business on the 120th day prior to the proposed date of the annual meeting and (ii) no later than the close of business on the later of the 90th day prior to the annual meeting or the 10th day following the day on which we first make a public announcement of the date of the annual meeting. Submissions must include the specific information required in Section 5 of our Bylaws. For additional information about our director nomination requirements, please see our Bylaws.

Research and Development Committee

The Research and Development Committee oversees the overall strategy, direction and effectiveness of our research and development operations. During 2022, Drs. Viney, Bailes, and Drachman and Mr. Chin served as the members of the Research and Development Committee, with Dr. Viney serving as Chair of the committee. As of the Annual Meeting, Dr. Viney will no longer be a member of the Research and Development Committee and Dr. Drachman will serve as Chair of the committee.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics that applies to all employees, officers and directors, including our principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing similar functions. The Code of Business Conduct and Ethics is available in the “Corporate Governance” section of our website, www.harpoontx.com. If we make any substantive amendments to the Code of Business Conduct and Ethics or grant any waiver from a provision of the Code to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website. The inclusion of our website address here and elsewhere in this Proxy Statement does not include or incorporate by reference the information on our website into this Proxy Statement.

Corporate Governance Guidelines

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

Stockholder Communications with Our Board

The Board has adopted a formal process by which stockholders may communicate with the Board or any of its directors. This information is available in the “Corporate Governance” section of our website, www.harpoontx.com. All communications will be compiled by our Corporate Secretary and submitted to our Board or individual directors, as applicable, on a periodic basis. The inclusion of our website address here and elsewhere in this Proxy Statement does not include or incorporate by reference the information on our website into this Proxy Statement.

Hedging Policy

Pursuant to our Insider Trading Policy, our officers, directors, employees and consultants are prohibited from engaging in short sales, transactions in publicly traded options, such as puts or calls, hedging transactions, margin accounts, pledges or other inherently speculative transactions with respect to our common stock at any time. No waivers of this policy were requested or provided during 2022.

 

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The information provided under this Hedging Policy section shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates this information by reference.

 

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EXECUTIVE OFFICER AND DIRECTOR COMPENSATION

Executive Officer Compensation

Summary Compensation Table

The following table sets forth information for each of the last two completed fiscal years regarding compensation awarded to or earned by all individuals that served as our principal executive officer, the two other most highly compensated executive officers other than the principal executive officer during the fiscal years indicated and the two additional individuals for whom disclosure would have been provided but for the fact that such individual was not serving as an executive officer at the end of the last fiscal year (collectively, the “named executive officers”):

 

Name and Principal Position		Year				Salary ($)				Bonus ($)				Stock Awards ($)(1)				Option Awards ($)(1)				Non-Equity Incentive Plan Compensation ($)(2)				All Other Compensation ($)(3)				Total ($)
Julie Eastland			2022				565,000				62,150	(4)			250,000	(5)			—				217,525				66,099				1,160,774
President, Chief Executive Officer and Director			2021				83,766				205,000				—				1,887,676				—				50,899				2,227,341
Luke Walker, M.D.			2022				125,000				250,000	(6)			—				244,530				48,767				667	(7)			668,964
Chief Medical Officer(7)
Georgia Erbez			2022				316,690				—				—				401,294				—				9,863	(7)			727,847
Former Chief Financial Officer(8)			2021				415,000				—				—				1,599,386				203,550				9,711	(7)			2,227,647
Natalie Sacks, M.D.			2022				206,625				—				—				540,970				—				9,685	(7)			757,280
Former Chief Medical Officer(9)			2021				465,000				—				—				1,924,071				277,050				9,741	(7)			2,675,862
Holger Wesche, Ph.D.			2022				430,000				—				—				471,135				—				531,769	(11)			1,432,904
Former Chief Science Officer(10)			2021				400,000				—				—				1,435,840				—				9,681	(7)			1,845,521

 

(1)

The amounts shown for stock awards and option awards represent the aggregate grant date fair value of the stock awards and option awards granted to our named executive officers during the years indicated as computed in accordance with Accounting Standards Codification Topic 718 (“ASC 718”). See Note 9 to the financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of assumptions made in determining the aggregate grant date fair value of our stock awards and option awards. Note that the amounts reported in this column reflect the accounting cost for these stock awards and stock options and do not reflect the actual economic value that may be realized by the named executive officers upon the vesting of the stock awards and stock options, the settlement of the stock awards, the exercise of the stock options or the sale of the common stock underlying such stock awards and stock options.

(2)

The amounts shown for non-equity incentive plan compensation represent amounts earned for the fiscal years presented, whether or not actually paid during such year. This column reflects amounts earned based on the achievement of company and individual performance goals and other factors deemed relevant by the Board and the Compensation Committee.

 

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(3)	The below table shows the components of “All Other Compensation” for each of our named executive officers in 2022.

 

		Retirement Plan Contributions ($)(A)				Insurance Premiums ($)(B)				Other ($)				Total ($)
Julie Eastland			9,150				1,069				55,880	(C)			66,099
Luke Walker, M.D.			400				267				—				667
Georgia Erbez			9,150				713				—				9,863
Natalie Sacks, M.D.			9,150				535				—				9,685
Holger Wesche, Ph.D.			9,150				1,005				521,614	(D)			531,769

 

(A)

These amounts represent our matching contribution benefit on the executive officer’s 401(k) contributions.

(B)

These amounts represent the life insurance premiums we paid on behalf of the executive officer.

(C)

This amount represents a corporate housing benefit.

(D)

This aggregate amount represents COBRA benefits in the amount of $27,114 and severance pay in the amount of $494,500, both pursuant to our separation agreement with Dr. Wesche dated January 31, 2023.

 

(4)	The amount reflects a discretionary cash bonus in the amount of $62,150 in recognition of Ms. Eastland’s work fulfilling chief financial officer and business development functions following staff changes in 2022.

(5)

With respect to Ms. Eastland’s performance-vesting equity award granted in 2022, the aggregate grant date fair value is based on the then-probable outcome of the applicable performance conditions. The grant date fair value of these performance-vesting restricted stock units, assuming achievement of the maximum level of performance under Ms. Eastland’s performance conditions, would have been $819,375.

(6)	This amount reflects a one-time signing bonus pursuant to our offer letter with Dr. Walker dated September 17, 2022.

(7)	Dr. Walker commenced serving as our Chief Medical Officer effective October 3, 2022.

(8)	Ms. Erbez resigned as our Chief Financial Officer effective August 31, 2022.

(9)	Dr. Sacks resigned as our Chief Medical Officer effective June 1, 2022.

(10)	Dr. Wesche was our Chief Science Officer until January 31, 2023, the effective date of our separation agreement with him.

 

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Outstanding Equity Awards at Fiscal Year-End

The following table provides information regarding equity awards held by the named executive officers that were outstanding as of December 31, 2022 under the 2015 Plan (as defined below), the 2019 Plan (as defined below) and, in the case of Dr. Walker, the Inducement Plan (as defined below):

 

		Option Awards																Stock Awards
Name		Number of Securities Underlying Unexercised Options (#) Exercisable				Number of Securities Underlying Unexercised Options (#) Unexercisable				Option Exercise Price ($)				Option Expiration Date				Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)				Equity incentive plan awards: market or payout value of unearned shares, units or other rights  that have not vested ($)
Julie Eastland			—				—				—				—				375,000	(1)			272,250
			94,791				255,209	(2)			6.85				11/8/2031				—				—
			10,167				—				23.20				5/3/2031				—				—
			10,167				—				20.59				5/27/2030				—				—
			10,167				—				11.84				6/2/2029				—				—
			5,907				—				14.00				2/6/2029				—				—
			27,656				—				2.11				10/17/2028				—				—
Luke Walker, M.D.			—				305,000	(3)			1.08				10/2/2032				—				—
Georgia Erbez(4)			—				—				—				—				—				—
Natalie Sacks, M.D.(5)			—				—				—				—				—				—
Holger Wesche, Ph.D.(6)			30,937				104,063	(7)			5.03				1/27/2032				—				—
			67,500				67,500	(8)			7.73				11/11/2031				—				—
			24,916				27,084	(9)			18.66				1/27/2031				—				—
			38,144				14,169	(10)			13.29				1/30/2030				—				—
			95,170				—				2.11				11/16/2028				—				—
			20,538				—				1.62				6/22/2027				—				—
			2,540				—				0.59				1/13/2027				—				—
			21,002				—				0.59				4/6/2026				—				—

 

(1)

Ms. Eastland was awarded a performance-vesting equity award of restricted stock units (“RSUs”) for shares of our common stock on April 27, 2022 of a maximum amount of 375,000 shares, subject to the achievement of certain vesting goals during the one-year period ending on March 31, 2025: for 50% of the RSU award, 125,000 RSUs will vest upon achievement of certain target total shareholder return goals; an additional 31,250 RSUs will vest for each achievement of certain stretch total shareholder return goals; and an additional 31,250 RSUs will vest for each achievement of certain maximum total shareholder return goals; for the other 50% of the RSU award, 125,000 RSUs will vest upon achievement of certain target milestone goals; an additional 31,250 RSUs will vest for each achievement of certain stretch milestone goals; and an additional 31,250 RSUs will vest for each achievement of certain maximum milestone goals, in all cases subject to continuous service through the applicable vesting date.

(2)	25% of the options vest on the first anniversary of November 8, 2022, and the remaining 75% vest in equal monthly installments over the three years following such first anniversary, subject to continuous service through each vesting date.

(3)	25% of the options vest on the first anniversary of October 3, 2022, and the remaining 75% vests in equal monthly installments over the three years following such first anniversary, subject to continuous service through each vesting date.

(4)	Ms. Erbez resigned as our Chief Financial Officer effective August 31, 2022.

(5)	Dr. Sacks resigned as our Chief Medical Officer effective June 1, 2022.

 

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(6)

Dr. Wesche was our Chief Science Officer until January 31, 2023, the effective date of our separation agreement with him. See the section titled “Executive Officer and Director Compensation—Executive Compensation—Employment Agreements—Holger Wesche, Ph.D.” for discussion of Dr. Wesche’s consulting period and option exercise extension.

(7)	The options commenced vesting on January 28, 2022 in equal monthly installments over four years, subject to continuous service through each vesting date.

(8)	50% of the options vest on the first anniversary of November 11, 2021, and the remaining 50% will vest in equal six-month installments, on May 11, 2023 and November 11, 2023, subject to continuous service through each vesting date.

(9)	The options commenced vesting on January 28, 2021 in equal monthly installments over four years, subject to continuous service through each vesting date.

(10)	The options commenced vesting on January 31, 2020 in equal monthly installments over four years, subject to continuous service through each vesting date.

Narrative to Summary Compensation Table and Outstanding Equity Awards at 2022 Fiscal Year End

Employment Agreements

Below are descriptions of our employment agreements and arrangements with our named executive officers. The agreements generally provide for at-will employment without any specific term and set forth the named executive officer’s initial base salary, annual target bonus and severance benefits upon a qualifying termination of employment or change in control of our company. Each named executive officer is also eligible to participate in all employee benefit plans that are generally available to our employees during his or her employment. Furthermore, each of our named executive officers has executed our standard form of proprietary information and inventions assignment agreement. The key terms of the employment agreements with our named executive officers, including potential payments upon termination or change in control with regard to our named executive officers who were serving as of December 31, 2022, are described below.

Julie Eastland

Pursuant to our employment agreement with Ms. Eastland in October 2021, we agreed to an initial annual base salary of $565,000, which could be increased from time to time based on the review of our Compensation Committee. Ms. Eastland’s annual base salary was $565,000 in 2022. Ms. Eastland is eligible for an annual performance bonus as determined by our Compensation Committee. Ms. Eastland’s annual target bonus was set as 55% of her annual base salary for 2022. Effective January 1, 2023, Ms. Eastland’s annual base salary increased to $615,000, and her target bonus was increased to 55% of her base salary.

If within 60 days prior to or within 18 months after a “change in control” (as defined in her employment agreement), Ms. Eastland’s employment is terminated by us without “cause” or by Ms. Eastland for “good reason” (each as defined in the employment agreement), then she would receive (i) full vesting acceleration of her outstanding options and restricted stock, (ii) severance pay equivalent to 18 months of her then-current base salary, payable ratably in installments and (iii) up to 18 months of reimbursement of COBRA premiums, except such reimbursements will not exceed the amount we then pay for health insurance coverage for our active employees (or in our discretion cash payments in lieu thereof for up to 18 months), in each case subject to the execution of an effective release. Upon a termination of Ms. Eastland’s employment without cause or for good reason at any other time, Ms. Eastland would receive (i) severance pay equivalent to 12 months of her then-current base salary, payable ratably in installments and (ii) up to 12 months of reimbursement of COBRA premiums, except such reimbursements will not exceed the amount we then pay for health insurance coverage for our active employees, in each case subject to the execution of an effective release.

Luke Walker, M.D.

Pursuant to our employment agreement with Dr. Walker in September 2022, we agreed to an initial annual base salary of $500,000, which could be increased from time to time based on the review of our Compensation

 

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Committee. Dr. Walker is eligible for an annual performance bonus as determined by our Compensation Committee. Effective January 1, 2023, Dr. Walker’s target bonus was set as 40% of his annual base salary.

If within 60 days prior to or within 24 months after a “change in control” (as defined in his employment agreement), Dr. Walker’s employment is terminated by us without “cause” or by Dr. Walker for “good reason” (each as defined in the employment agreement), then he would receive (i) full vesting of his outstanding equity awards, (ii) a lump sum severance payment equivalent to 12 months of his then-current base salary plus an amount equal to his target bonus for the year in which his separation occurs and (iii) up to 12 months of reimbursement of COBRA premiums, except such reimbursements will not exceed the amount we then pay for health insurance coverage for our active employees, in each case subject to the execution of an effective release. Upon a termination of Dr. Walker’ employment without cause or for good reason at any other time, Dr. Walker would receive (i) a lump sum severance payment equal to 9 months of his then-current base salary and (ii) up to 9 months of reimbursement of COBRA premiums, except such reimbursements will not exceed the amount we then pay for health insurance coverage for our active employees, in each case subject to the execution of an effective release.

Georgia Erbez

Pursuant to our employment agreement with Ms. Erbez, we agreed to an initial annual base salary, which could be increased from time to time based on the review of our Compensation Committee. Ms. Erbez’s annual base salary was $415,000 in 2021 and was set as $430,000 for 2022. During her employment, Ms. Erbez was eligible for an annual performance bonus as determined by our Compensation Committee. Ms. Erbez’s annual target bonus was set as 40% of her annual base salary in 2021 and 40% of her annual base salary in 2022.

Natalie Sacks, M.D.

Pursuant to our employment agreement with Dr. Sacks, we agreed to an initial annual base salary, which could be increased from time to time based on the review of our Compensation Committee. Dr. Sacks’s annual base salary was $465,000 in 2021 and set as $477,000 for 2022. During her employment, Dr. Sacks was eligible for an annual performance bonus as determined by our Compensation Committee. Dr. Sacks’s annual target bonus was set as 40% of her annual base salary in 2021 and 40% of her annual base salary in 2022.

Holger Wesche, Ph.D.

Pursuant to our employment agreement with Dr. Wesche, we agreed to an initial annual base salary, which could be increased from time to time based on the review of our Compensation Committee. Dr. Wesche’s annual base salary was $400,000 in 2021 and $430,000 in 2022. During his employment, Dr. Wesche was eligible for an annual performance bonus as determined by our Compensation Committee. Dr. Wesche’s annual target bonus was set as 40% of his annual base salary in 2021 and 40% of his annual base salary in 2022.

In January 2023, Dr. Wesche entered into a separation agreement with us, pursuant to which he received (i) severance pay equivalent to 9 months of his base salary in effect as of the date of his termination, (ii) a bonus payment of $172,000 and (iii) up to 9 months of reimbursement of COBRA premiums. Under the terms of the separation agreement, Dr. Wesche will serve as a consultant until October 15, 2023 and, after the expiration of the consulting period, he will have until April 30, 2025 to exercise any vested options.

Bonus and Non-Equity Plan Compensation

Cash bonuses are intended to motivate and reward our executive officers for attaining rigorous annual corporate performance goals that relate to our key business objectives. The Compensation Committee reviews annually the target bonus amounts. The Compensation Committee determines actual bonus amounts earned after the end of the year based on the Company’s overall performance and each individual’s achievement and contributions.

 

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Our annual corporate performance goals are typically established around the beginning of each year. Management prepares a set of goals covering corporate, development and financial objectives and key activities, which is then reviewed and, following any modification the Compensation Committee deems appropriate, approved by our Compensation Committee.

The Compensation Committee does not use a formula to calculate the Company’s or any individual’s performance. Rather, it qualitatively evaluates the totality of the Company’s progress and performance, contribution towards the creation of long-term stockholder value, and achievements relative to the goals.

In January 2023, the Compensation Committee completed an evaluation of our overall performance for 2022, and the named executive officers’ respective contributions in achieving this performance. The Compensation Committee’s review was based on company performance against high impact company goals, including clinical, preclinical, technology platforms and overall general administrative matters including financing, human resourcing and other administrative achievements. Following such review, the Compensation Committee awarded Ms. Eastland and Dr. Walker cash bonuses of $217,525 and $49,400 (target bonus of $200,000, prorated), respectively. Ms. Eastland was also awarded an additional discretionary cash bonus in the amount of $62,150 in recognition of her work fulfilling chief financial officer and business development functions following the Company’s staff changes in 2022. Dr. Wesche did not receive bonus and non-equity plan compensation for 2022 because he was no longer with the Company at the time bonuses were paid.

Equity, Benefit and Retirement Plans

We believe that our ability to grant equity-based awards is a valuable and necessary compensation tool that aligns the long-term financial interests of our employees, consultants, and directors with the financial interests of our stockholders. In addition, we believe that our ability to grant stock options and other equity-based awards helps us to attract, retain, and motivate employees, consultants, and directors and encourages them to devote their best efforts to our business and financial success. The principal features of our equity incentive plans and our 401(k) plan are summarized below. These summaries are qualified in their entirety by reference to the actual text of the plans.

2019 Equity Incentive Plan

Our Board adopted and our stockholders approved our 2019 Equity Incentive Plan (the “2019 Plan”) in January 2019 for the purpose of attracting, retaining and incentivizing our executive officers, employees, non-employee directors and other service providers. Our 2019 Plan provides for the grant of incentive stock options (within the meaning of Section 422 of the Code), nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards and other forms of equity compensation, which are collectively referred to as stock awards. Our 2019 Plan also provides for the grant of performance cash awards.

Share Reserve

The aggregate number of shares of our common stock that may be issued pursuant to stock awards under our 2019 Plan was 2,254,423 as of December 31, 2022. Additionally, the number of shares of our common stock reserved for issuance under our 2019 Plan will automatically increase on January 1 of each year, beginning on January 1, 2020 and continuing through and including January 1, 2029, by 5% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our Board. On January 1, 2023, the total number of shares available for issuance under the 2019 Plan was increased by 1,789,337 shares pursuant to this provision. The number of shares reserved for issuance under the 2019 Plan will also be increased by the number of shares subject to stock options or other stock awards granted under our 2015 Plan that would have otherwise returned to our 2015 Plan (such as upon the expiration or termination of a stock award prior to vesting). The maximum number of shares that may be issued upon the exercise of incentive stock options under our 2019 Plan is 8,000,000 shares.

 

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Corporate Transactions

In the event of certain specified significant corporate transactions, the plan administrator has the discretion to take any of the following actions with respect to stock awards:

 

•

arrange for the assumption, continuation or substitution of a stock award by a surviving or acquiring entity or parent company;

 

•

arrange for the assignment of any reacquisition or repurchase rights held by us to the surviving or acquiring entity or parent company;

 

•

accelerate the vesting of the stock award and provide for its termination prior to the effective time of the corporate transaction;

 

•

arrange for the lapse of any reacquisition or repurchase right held by us;

 

•

cancel or arrange for the cancellation of the stock award in exchange for such cash consideration, if any, as our Board may deem appropriate or for no consideration; or

 

•

make a payment equal to the excess of (1) the value of the property the participant would have received would have received upon exercise of the stock award over (2) the exercise price or strike price otherwise payable in connection with the stock award.

Our plan administrator is not obligated to treat all stock awards, even those that are of the same type, in the same manner.

Under our 2019 Plan, a significant corporate transaction is generally the consummation of (1) a sale or other disposition of all or substantially all of our assets, (2) a sale or other disposition of at least 50% of our outstanding securities, (3) a merger, consolidation or similar transaction following which we are not the surviving corporation or (4) a merger, consolidation or similar transaction following which we are the surviving corporation but the shares of our common stock outstanding immediately prior to such transaction are converted or exchanged into other property by virtue of the transaction.

Change in Control

The plan administrator may provide, in an individual award agreement or in any other written agreement between a participant and us that the stock award will be subject to additional acceleration of vesting and exercisability or settlement in the event of a change in control. Under our 2019 Plan, a change in control is generally (1) the acquisition by a person or entity of more than 50% of our combined voting power other than by merger, consolidation or similar transaction, (2) a consummated merger, consolidation or similar transaction immediately after which our stockholders cease to own more than 50% of the combined voting power of the surviving entity or (3) a consummated sale, lease or exclusive license or other disposition of all or substantially all of our assets.

2015 Equity Incentive Plan

In April 2015, our Board and our stockholders adopted our 2015 Equity Incentive Plan (the “2015 Plan”), which was subsequently amended most recently in December 2018. Our 2015 Plan provided for the grant of incentive stock options within the meaning of Section 422 of the Code to our employees and our parent and subsidiary corporations’ employees, and for the grant of nonstatutory options, restricted stock awards, restricted stock unit awards and stock appreciation rights our employees, consultants and directors.

In January 2019, our Board adopted and our stockholders approved our 2019 Plan (as described above), which became effective immediately prior to the execution of the underwriting agreement for our initial public offering in February 2019, at which point our 2015 Plan was terminated and no further grants were made under our 2015 Plan. However, all outstanding stock awards granted pursuant to our 2015 Plan continue to be subject to the terms and conditions as set forth in the agreements evidencing such stock award.

 

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Corporate Transactions

Our 2015 Plan provides that in the event of a merger of our company into another corporation or entity, or a change in control (as defined in our 2015 Plan), the administrator will determine how to treat each outstanding stock award. The administrator may:

 

•

arrange for the assumption or substitution of a stock award by a successor corporation;

 

•

provide that upon written notice that a participant’s awards will terminate upon or immediately prior to the transaction;

 

•

accelerate the vesting of the stock award;

 

•

cancel the stock award prior to the transaction in exchange for a payment, which may be reduced by the exercise price payable in connection with the stock award; or

 

•

a combination of any of the foregoing.

If awards are not assumed or substituted, they will vest and become exercisable in full. The administrator is not obliged to treat all stock awards or portions of stock awards, even those that are of the same type, in the same manner.

2019 Employee Stock Purchase Plan

Our Board adopted and our stockholders approved our 2019 Employee Stock Purchase Plan (“2019 ESPP”) in January 2019, and the 2019 ESPP became effective in connection with our initial public offering in February 2019. The purpose of the 2019 ESPP is to secure the services of new employees, to retain the services of existing employees and to provide incentives for such individuals to exert maximum efforts toward our success and that of our affiliates. Our employees, including executive officers, and the employees of any of our designated affiliates are eligible to participate in our 2019 ESPP, provided they may have to satisfy one or more of the following service requirements before participating in our 2019 ESPP, as determined by the administrator: (1) customary employment with us or one of our affiliates for more than 20 hours per week and five or more months per calendar year or (2) continuous employment with us or one of our affiliates for a minimum period of time, not to exceed two years, prior to the first date of an offering. An employee may not be granted rights to purchase stock under our 2019 ESPP (a) if such employee immediately after the grant would own stock possessing 5% or more of the total combined voting power or value of all classes of our common stock or (b) to the extent that such rights would accrue at a rate that exceeds $25,000 worth of our stock for each calendar year that the rights remain outstanding.

Share Reserve

The maximum number of shares of our common stock that may be issued under our 2019 ESPP was 717,106 shares as of December 31, 2022. Additionally, the number of shares of our common stock reserved for issuance under our 2019 ESPP will automatically increase on January 1 of each year, beginning on January 1, 2020 and continuing through and including January 1, 2029, by the lesser of (1) 1% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year, (2) 750,000 shares of our common stock or (3) such lesser number of shares of our common stock as determined by our Board. On January 1, 2023, the total number of shares available for issuance under the 2019 ESPP was increased by 357,867 shares pursuant to this provision. Shares subject to purchase rights granted under our 2019 ESPP that terminate without having been exercised in full will not reduce the number of shares available for issuance under our 2019 ESPP.

2022 Inducement Award Plan

Our Board adopted our 2022 Inducement Plan (the “Inducement Plan”) in June 2022, which became effective upon adoption. The 2022 Inducement Plan was adopted without stockholder approval, as permitted by

 

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Nasdaq Listing Rule 5635(c)(4). The Inducement Plan provides for the grant of equity-based awards, including nonstatutory stock options, restricted stock units, and other stock-based awards, and its terms are substantially similar to the stockholder-approved 2019 Plan. In accordance with relevant Nasdaq listing rules, awards under the Inducement Plan may only be made to individuals who were not previously employees or non-employee directors of ours (or following such individuals’ bona fide period of non-employment with us), as an inducement material to the individual’s entry into employment with us. In addition, awards must be approved by either a majority of the Company’s “independent directors” (as such term is defined in Nasdaq Listing Rule 5605(a)(2)) or the Compensation Committee, provided such committee is comprised solely of independent directors.

The maximum number of shares of our common stock that may be issued under our Inducement Plan is 1,000,000 shares. Shares subject to stock awards granted under our Inducement Plan that expire or terminate without being exercised in full, or that are paid out in cash rather than in shares, do not reduce the number of shares available for issuance under our Inducement Plan. We have granted nonstatutory stock option awards to purchase an aggregate of 305,000 shares of common stock to new hires who joined during 2022 as material inducements to their acceptance of employment with us in accordance with Nasdaq Listing Rule 5635(c)(4), all of which remain outstanding and were granted pursuant to a form of nonstatutory stock option grant notice and option agreement previously approved by our Board.

Health and Welfare Benefits

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

401(k) Plan

We maintain a 401(k) plan pursuant to which our employees (subject to certain exceptions) are eligible to participate. Our named executive officers are eligible to participate in the 401(k) plan. For 2022, participants could defer up to 100% of their salary, up to the IRS dollar amount limits which was $20,500, with an additional $6,500 in catchup for participants ages 50 and up. We also funded a 3% profit sharing contribution for the 2022 401(k) plan.

Director Compensation

Non-Employee Director Compensation Policy

Our Board adopted a Non-Employee Director Compensation Policy, amended most recently on March 9, 2023 (the “policy”). Under the policy, each of our non-employee directors are eligible to receive compensation for service on our Board and committees of our Board. Non-employee directors also receive reimbursement for out-of-pocket expenses incurred in connection with attendance at meetings of the Board.

The policy provides our non-employee directors with the following cash compensation for their services:

 

•

$40,000 per year for each non-employee director ($35,000 for 2022);

 

•

$80,000 per year for chair of the Board (if applicable) in lieu of the annual amount above ($65,000 for 2022);

 

•

$15,000 per year for chair of the Audit Committee or $7,500 per year for each other member of the Audit Committee;

 

•

$10,000 per year for chair of the Compensation Committee or $5,000 per year for each other member of the Compensation Committee;

 

•

$8,000 per year for chair of the Nominating and Governance Committee or $4,000 per year for each other member of the Nominating and Governance Committee; and

 

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•

$10,000 per year for chair of the Research and Development Committee or $5,000 per year for each other member of the Research and Development Committee.

The cash compensation above is payable to our eligible non-employee directors in equal quarterly installments, prorated for any partial quarter of service.

For the calendar year 2023, each non-employee director may elect to receive all (but not less than all) of their annual cash compensation under the policy in the form of a fully vested restricted stock unit award (“election RSU”). The election must be made according to procedures and timing set forth in the relevant election form. Each election RSU is granted on the day following the final day of each quarter (each such date, an “RSU Grant Date”) in lieu of the cash compensation they would otherwise have received for that quarter (such compensation, the “Quarterly Compensation”), subject to the non-employee director’s continuous service through such date. The number of shares of common stock subject to such non-employee director’s restricted stock unit award will be equal to the director’s Quarterly Compensation divided by the average stock price of our common stock in the five trading days immediately preceding the RSU Grant Date, rounded down to the nearest whole share.

For the calendar year 2022 and calendar years 2024 and later, each non-employee director may elect to receive all (but not less than all) of their annual cash compensation under the policy in the form of a stock option (“election option”). Each such election must be made no later than prior to the calendar year to which the election applies. Each election option is granted on the date of the annual meeting of our stockholders occurring in the calendar year to which the election relates, subject to the non-employee director’s continuous service through such date. Each election option has a grant date value calculated based on the Black-Scholes option valuation methodology equal to the annual cash compensation the election option is granted in lieu of, provided the number of shares subject to the election option will be rounded down to the nearest whole share. 50% of each election option will vest on the grant date and 25% of each election option will vest and become exercisable on September 30 and December 31 of the year in which the election option is granted, subject to the non-employee director’s continuous service through such date.

Each non-employee director who joins our Board is automatically, upon the date of his or her initial election or appointment to be a non-employee director, granted a one-time stock option to purchase 46,000 shares of our common stock (“initial grant”). Each initial grant will vest in three equal annual installments over the three-year period following the grant date, subject to the non-employee director’s continuous service through each applicable vesting date.

In addition, on the date of each annual meeting of our stockholders, each person who is then a non-employee director will automatically be granted a stock option to purchase 23,000 shares of our common stock, other than that, commencing with the 2023 annual meeting of our stockholders, the Chair of the Board will instead automatically be granted a stock option to purchase 46,000 shares of our common stock (the grants to each non-employee director and the Chair of the Board each, an “annual grant”). (In 2022, the annual grant amounts were 20,334 to the Chair of the Board and 10,167 to the other non-employee directors.) If six months or less have elapsed since the date of grant of the initial grant a non-employee director received, then the non-employee director will not be granted a full annual grant and instead will be granted a prorated annual grant that will be subject to 11,500 shares of our common stock (a “prorated annual grant”). (In 2022, the prorated annual grant amount was 5,083.) However, if as of the date of an annual meeting of our stockholders, less than three months have elapsed since the date of grant of the initial grant the non-employee director received (or the non-employee director has not yet received an initial grant but is then eligible to receive an initial grant), then the non-employee director will not receive a prorated annual grant (or an annual grant). Under the policy, each annual grant or prorated annual grant will vest on the day prior to the first anniversary of the date of grant, subject to the non-employee director’s continuous service through such date.

Each option awarded to a non-employee director under the policy will become fully vested upon a Change in Control (as defined in the 2019 Plan), subject to the non-employee director’s continuous service through immediately prior to the closing of the Change in Control.

 

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Each option granted under the policy will be a nonstatutory stock option and will have an exercise price per share equal to the fair market value of a share of our common stock on the date of grant. Each stock option will have a term of ten years from the date of grant, subject to earlier termination in connection with a termination of the eligible director’s continuous service with us.

Non-Employee Director Compensation

The following table sets forth information regarding the compensation earned for service on the Board by our non-employee directors during the year ended December 31, 2022. Ms. Eastland’s compensation is set forth above under “Summary Compensation Table.”

 

Name		Fees Earned or Paid in Cash ($)				Option Awards(1)(2) ($)				Total ($)
Joseph Bailes, M.D.			44,000	(3)			14,559				58,559
Mark Chin			45,000	(3)			14,559				59,559
Alan Colowick, M.D.			40,000	(3)			14,559				54,559
Jonathan Drachman, M.D.			44,000				14,559				58,559
Ronald Hunt			45,000	(3)			14,559				59,559
Scott Myers			80,500				29,118				109,618
Andrew Robbins			47,500				14,559				62,059
Lauren P. Silvernail(4)			14,538				23,217				37,755
Joanne Viney, Ph.D.			52,500	(3)			14,559				67,059

 

(1)

The amounts reported in this column reflect the aggregate grant date fair value of the option awards granted (other than election options) to our directors as computed in accordance with ASC Topic 718. See Note 9 to the financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of assumptions made us in determining the aggregate grant date fair value of our option awards. Note that the amounts reported in this column reflect the accounting cost for these stock options and do not reflect the actual economic value that may be realized by the directors upon the vesting of the stock options, the exercise of the stock options or the sale of the common stock underlying such stock options.

(2)	The following table provides information regarding the aggregate number of option awards granted to our non-employee directors that were outstanding as of December 31, 2022:

 

Name		Option Awards Outstanding at Year-End (#)
Joseph Bailes, M.D.			72,097
Mark Chin			104,671
Alan Colowick, M.D.			59,073
Jonathan Drachman, M.D.			103,126
Ronald Hunt			107,632
Scott Myers			61,002
Andrew Robbins			40,669
Lauren P. Silvernail			20,335
Joanne Viney, Ph.D.			80,740

 

(3)	In lieu of annual cash retainer fees, the director elected to receive an election option as provided for under the Non-Employee Director Compensation Policy, as described above.

(4)

Ms. Silvernail was appointed to our Board in September 2022. Pursuant to the Non-Employee Director Compensation Policy, Ms. Silvernail received an annual cash retainer of $35,000 for service on the Board and $7,500 for service on the Audit Committee (each amount prorated for 2022). In addition, we granted

 

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Ms. Silvernail on the date of her appointment options to purchase 20,335 shares of our common stock at an exercise price per share of the closing price of our common stock on the Nasdaq on the date of grant. The stock options vest in a series of three equal annual installments measured from the date of grant, subject to continued service through each vesting date, and have a term of 10 years, subject to earlier termination upon cessation of continuous service.

Indemnification

Our Certificate of Incorporation authorizes us to indemnify our directors, officers, employees, and other agents to the fullest extent permitted by Delaware law. Our amended and restated bylaws provide that we are required to indemnify our directors and officers to the fullest extent permitted by Delaware law and may indemnify our other employees and agents. Our amended and restated bylaws also provide that, upon satisfaction of certain conditions, we will advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding and permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under the provisions of Delaware law. We have entered and expect to continue to enter into agreements to indemnify our directors, executive officers and other employees as determined by our Board. With certain exceptions, these agreements provide for indemnification for related expenses including attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding. We believe that our Certificate of Incorporation, our amended and restated bylaw provisions and these indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain customary directors’ and officers’ liability insurance.

 

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EQUITY COMPENSATION PLAN INFORMATION

The following table provides certain information with respect to all of our equity compensation plans in effect as of December 31, 2022.

 

Plan Category		Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)(#)				Weighted-average exercise price of outstanding options, warrants and rights (b)($)				Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a)) (c)(#)
Equity compensation plans approved by security holders:
2015 Equity Incentive Plan			1,174,570				1.69				—	(1)
2019 Equity Incentive Plan			4,228,918				14.01				2,254,423	(2)
2019 Employee Stock Purchase Plan			274,598				—				717,106	(3)
Equity compensation plans not approved by security holders:
2022 Inducement Award Plan			305,000				1.08				695,000	(4)
Total			5,983,086								3,666,529

 

(1)	Following the adoption of the 2019 Plan, no additional stock awards were granted under the 2015 Plan. Any shares becoming available under the 2015 Plan by repurchase, forfeiture, expiration or cancellation will become available for grant under the 2019 Plan.

(2)

The number of shares of common stock reserved for issuance under the 2019 Plan automatically increases on January 1 of each year, beginning on January 1, 2020 and continuing through and including January 1, 2029, by 5% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our Board. Pursuant to the terms of the 2019 Plan, an additional 1,789,337 shares were added to the number of available shares effective January 1, 2023.

(3)

The number of shares of common stock reserved for issuance under the ESPP automatically increases on January 1 of each year, beginning on January 1, 2020 and continuing through and including January 1, 2029, by the lesser of (i) 1% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, (ii) 750,000 shares, or (iii) such lesser number of shares determined by our Board. Pursuant to the terms of the ESPP, an additional 357,867 shares were added to the number of available shares effective January 1, 2023.

(4)

The Inducement Plan was adopted exclusively for grants of awards to individuals that were not previously our employees or directors, as an inducement material to the individual’s entry into employment with us within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. The terms and conditions of the Inducement Plan and the equity awards granted thereunder are substantially similar to the 2019 Plan.

 

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TRANSACTIONS WITH RELATED PERSONS

Certain Related-Party Transactions

In addition to the compensation arrangements with our directors and executive officers already described in this Proxy Statement under the headings “Non-Employee Director Compensation” and “Executive Officer and Director Compensation,” the following is a summary of transactions since January 1, 2021 to which we have been a participant, in which:

 

•

the amount involved exceeded or will exceed $120,000; and

 

•

any of our directors, current or former executive officers or holders of more than 5% of our capital stock, or any immediate family member of the foregoing persons, had or will have a direct or indirect material interest, other than compensation and other arrangements that are described under “Non-Employee Director Compensation” and “Executive Officer and Director Compensation” or that were approved by our Compensation Committee.

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

Royalty Transfer Agreement with MPM Oncology Charitable Foundation and UBS Optimus Foundation

In December 2016, we entered into a royalty transfer agreement (the “Royalty Transfer Agreement”) with MPM Oncology Charitable Foundation, Inc. (“MPMOCF”) and UBS Optimus Foundation (“UBS”). MPMOCF and UBS are affiliates of MPM Capital, Inc., a holder of more than 5% of our capital stock. Under the Royalty Transfer Agreement, we will pay 0.5% of our annual global net sales to each of MPMOCF and UBS for products that incorporate or utilize intellectual property that was discovered or developed by us prior to our initial public offering. Our payment obligations for each product will continue on a country-by-county basis upon the later of the twelfth anniversary of the first commercial sale of such product in such country or the expiration of the last to expire claim of certain patents owned or controlled by us covering such product in such country. If there are no such patent claims covering our product during this term, then our payment obligations will be reduced by 50% such that we would pay 0.25% of our annual global Net Sales to each of MPMOCF and UBS for the remainder of this term.

Our payment obligations to MPMOCF will terminate immediately upon the winding up or dissolution of MPMOCF. Our payment obligations to UBS will terminate immediately upon the expiration or termination of a certain contribution agreement between UBS and the Oncology Impact Fund (Cayman) Management L.P. (“OIF”). Additionally, the Royalty Transfer Agreement will terminate immediately if for any reason the MPM Oncology Management GP, LP ceases to serve as the general partner for OIF.

 

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Participation in Our January 2021 Follow-On Offering

In January 2021, we issued and sold an aggregate of 6,764,704 shares of our common stock for $17.00 per share, for aggregate cash proceeds of approximately $108.1 million, net of underwriting discounts and commissions and offering costs, which includes the exercise by the underwriters of their option to purchase additional shares. The table below sets forth the number of shares of our common stock issued to any of our directors, executive officers or stockholders who held more than 5% of any class of our voting securities and their affiliates:

 

		Common Stock Purchased in our Follow-On Offering (#)				Aggregate Cash Purchase Price ($)
Entities affiliated with New Leaf Venture Partners(1)			235,294				3,999,998
Entities associated with OrbiMed(2)			450,000				7,650,000

 

(1)	Mr. Hunt, a member of our Board, was a manager of New Leaf Venture Management III, L.L.C., which is the general partner of New Leaf Venture Associates III, L.P., which is the general partner of New Leaf Ventures III, L.P.

(2)	Entities associated with OrbiMed held more than 5% of our capital stock at the time of the offering.

Participation in Our March 2023 Private Placement Financing

In March 2023, we entered into a securities purchase agreement with purchasers named therein pursuant to which we sold an aggregate of 25,000 shares of our 8.000% Series A redeemable preferred stock (the “Series A Preferred Stock”) and warrants (the “Warrants”) to purchase up to 7,485,762 shares of our common stock for gross proceeds of $25.0 million. The shares of Series A Preferred Stock and accompanying Warrants were sold at a purchase price of $1,000 per share of Series A Preferred Stock. The Series A Preferred Stock is redeemable and not convertible into our common stock. The Warrants were exercisable at the time of closing and will remain exercisable for a period of eight years following the date of issuance at an exercise price of $0.978885 per share.

The table below sets forth the number of shares of our Series A Preferred Stock and Warrants issued to any of our directors, executive officers or stockholders who held more than 5% of any class of our voting securities and their affiliates:

 

		Series A Preferred Stock Purchased in our Private Placement Financing (#)				Warrants Purchased in our Private Placement Financing (#)				Aggregate Subscription Amount ($)
Entities affiliated with New Leaf Venture Partners(1)			10,000				2,994,305				10,000,000
Arix Bioscience Holdings Limited(2)			3,500				1,048,007				3,500,000
Entities associated with OrbiMed(3)			4,000				1,197,722				4,000,000

 

(1)

Entities associated with New Leaf Venture Partners held more than 5% of our capital stock at the time of the private placement financing. These shares of Series A Preferred Stock and Warrants are held directly by New Leaf Biopharma Opportunities II, L.P. (“BPO-II”). The sole general partner of BPO-II is New Leaf BPO Associates II, L.P. (“NLBA-II”). The sole general partner of NLBA-II is New Leaf BPO Management II, L.L.C. (“BPO Management-II”). Mr. Hunt, a member of our Board, is a managing director of BPO Management-II.

(2)

Arix Bioscience Holdings Limited held more than 5% of our capital stock at the time of the private placement financing. These shares of Series A Preferred Stock and Warrants are held directly by Arix Bioscience Holdings Limited. Arix Bioscience Plc is the sole owner and parent of Arix Bioscience Holdings Limited. Mr. Chin, a member of our Board, is a managing director of Arix Bioscience Plc.

(3)	Entities associated with OrbiMed held more than 5% of our capital stock at the time of the private placement financing.

 

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Other Transactions

We have entered into various employment related agreements and compensatory arrangements with our directors and executive officers that, among other things, provide for compensatory and certain severance and change of control benefits. For a description of these agreements and arrangements, see the section titled “Executive Officer and Director Compensation—Executive Compensation—Employment Agreements.”

We entered into indemnification agreements with each of our current directors and executive officers. See the section titled “Executive Officer and Director Compensation—Indemnification.”

 

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