Spero Therapeutics Inc

The following table shows the total compensation paid or accrued during the last two fiscal years ended December 31, 2023 and 2022 to our current President and Chief Executive Officer, our former President and Chief Executive Officer, and our two next most highly compensated executive officers who earned more than $100,000 during the fiscal year ended December 31, 2023 and were serving as executive officers as of such date (the “named executive officers”).

Consists of retention bonuses paid to Mr. Shukla, Dr. Mahadevia, Ms. Joseph and Mr. Keutzer during the years ended December 31, 2023 and 2022.

These amounts represent the aggregate grant date fair value for RSU awards computed in accordance with ASC 718. A discussion of the assumptions used in determining grant date fair value may be found in Note 8 to our consolidated financial statements for the year ended December 31, 2023.

These amounts represent the aggregate grant date fair value for option awards computed in accordance with ASC 718. A discussion of the assumptions used in determining grant date fair value may be found in Note 8 to our consolidated financial statements for the year ended December 31, 2023.

Amounts represent annual cash bonuses earned for the applicable fiscal year. The annual cash bonuses are paid in the first quarter of the calendar year following the year to which the cash bonus relates.

Amounts in this column include for the year ended December 31, 2023 (i) in the case of Mr. Shukla, $583 consists of the dollar value of life insurance premiums we paid with respect to term life insurance and $9,900 in a matching contribution under our 401(k) plan, (ii) in the case of Dr. Mahadevia, $340 consists of the dollar value of life insurance premiums we paid with respect to term life insurance, and $9,419 in a matching contribution under our 401(k) plan, $225,719 consists of the pro-rata bonus for calendar year 2023, paid pursuant to the Mahadevia Separation Agreement (as defined below), $11,509 consists of COBRA payments pursuant to the Mahadevia Separation Agreement, $197,250 consists of compensation earned during the year ended December 31, 2023 pursuant to the Mahadevia Consulting Agreement (as defined below), and $31,250 consists of cash compensation earned for his services as a member of our board of directors during the year ended December 31, 2023, and $23,200 consists of RSUs granted for service on our board of directors, each as further described below under “Director Compensation,” (iii) in the case of Ms. Joseph, $583 consists of the dollar value of life insurance premiums we paid with respect to term life insurance and $6,874 in a matching contribution under our 401(k) plan and (iv) in the case of Mr. Keutzer, $583 consists of the dollar value of life insurance premiums we paid with respect to term life insurance and $9,900 in a matching contribution under our 401(k) plan.

Dr. Mahadevia served as our Chief Executive Officer and President until August 2023. Thereafter, Dr. Mahadevia continued to serve as a member of the Board and serves as a consultant to the Company.

Ms. Joseph’s employment as our Chief Legal Officer ended effective March 6, 2024.

Narrative Disclosure to Summary Compensation Table

Our employment and consulting arrangements with the named executive officers are described below.

Satyavrat Shukla

On December 9, 2020, we entered into an employment agreement with Mr. Shukla with respect to his employment as our Chief Financial Officer, as amended on November 10, 2022. The terms of Mr. Shukla’s agreement provided for an annual base salary of $425,000 prorated for fiscal year 2021, and eligibility for an annual incentive bonus, with a target bonus opportunity of 40% of his then-current base salary, subject to adjustment by the Board of Directors or Compensation Committee. Mr. Shukla’s annual base salary has been subsequently increased over time. As of July 1, 2021, Mr. Shukla's base salary was increased to $460,000, with a target bonus opportunity of 40% of his base salary. In December 2021, Mr. Shukla’s base salary was increased, effective February 1, 2022, to $480,000 with a target bonus opportunity of 40% of his base salary. In January 2023, Mr. Shukla’s base salary was increased, effective February 1, 2023, to $489,600 with a target bonus opportunity of 40% of his base salary.

On June 13, 2023, we entered into an Amended and Restated Employment Agreement with Mr. Shukla with connection with his appointment as our Chief Executive Officer and President (the “Shukla Amended Employment Agreement”). Under the terms of the Shukla Amended Employment Agreement, (i) the Company shall pay Mr. Shukla an annual base salary (the “Base Salary”) of $575,000; (ii) Mr. Shukla shall be eligible to receive an annual cash bonus (the “Annual Performance Bonus”), with the target amount of such Annual Performance Bonus equal to 50% of Mr. Shukla’s Base Salary in the year to which the Annual Performance Bonus relates; provided that the actual amount of the Annual Performance Bonus may be greater or less than such target amount; provided further that Mr. Shukla’s Annual Performance Bonus for the 2023 performance year shall be pro-rated such that it shall be based on a Base Salary of $489,600 for the period from January 1, 2023 to July 31, 2023 and on a Base Salary of $575,000 for the period from the Transition Date to December 31, 2023; and (iii) the Company awarded Mr. Shukla 266,000 restricted stock units (the “Shukla RSUs”) under the Plan on the Transition Date; the Shukla RSUs are subject to the terms and conditions of the Plan and the restricted stock unit agreement between Mr. Shukla and Company entered into pursuant thereto (the “Shukla RSU Agreement”); and the Shukla RSUs shall vest in four equal annual installments beginning on the first anniversary of the Transition Date, except as otherwise provided in the Shukla RSU Agreement. In January 2024, Mr. Shukla’s base salary was increased, effective January 1, 2024, to $603,750 with a target bonus opportunity remaining at 50% of his base salary.

The Shukla Amended Employment Agreement also provides for the following severance payments upon termination by the Company without Cause (as defined in the Shukla Amended Employment Agreement) or by Mr. Shukla for Good Reason (as defined in the Shukla Amended Employment Agreement): (i) payment of his then-current Base Salary for a period of 12 months following termination; (ii) a pro-rated target bonus for the period during which Mr. Shukla was employed in the year of termination; and (iii) continued coverage under the Company’s group health insurance plan until the earlier of 12 months from termination or the date Mr. Shukla becomes eligible for medical benefits with another employer. Further, the Shukla Amended Employment Agreement provides that upon termination by the Company without Cause or by Mr. Shukla for Good Reason within (i) 90 days prior to the earlier to occur of a Change of Control (as defined in the Shukla Amended Employment Agreement) or the execution of a definitive agreement, the consummation of which would result in a Change of Control or (ii) one year following a Change of Control, Mr. Shukla will be entitled to receive: (i) a lump sum payment equal to 18 months of his then-current Base Salary plus an amount equal to one-and-one-half times the target amount of his Annual Performance Bonus; (ii) acceleration of all unvested equity awards as of the date of termination; and (iii) continued coverage under the Company’s group health insurance plan until the earlier of 18 months from termination or the date Mr. Shukla becomes eligible for medical benefits with another employer. Payment in each case is subject to Mr. Shukla’s execution of a release satisfactory to the Company following such termination. In addition, if Mr. Shukla’s employment terminates as a result of disability or death, he will be entitled to receive a pro-rated target bonus for the period during which he was employed in the year of termination.

Ankit Mahadevia, M.D.

On October 20, 2017, we entered into an employment agreement with Dr. Mahadevia with respect to his employment as our Chief Executive Officer, as amended on November 10, 2022. The terms of Dr. Mahadevia’s agreement provided for an annual base salary of $400,000, and eligibility for an annual incentive bonus, with a target bonus opportunity of 30% of his then-current base salary, subject to adjustment by the Board of Directors or Compensation Committee. Dr. Mahadevia’s annual base salary and target bonus opportunity were subsequently increased over time. In December 2021, Dr. Mahadevia’s base salary was increased, effective February 1, 2022, to $635,000, with a target bonus opportunity of 60% of his base salary. In January 2023, Dr. Mahadevia’s base salary was increased, effective February 1, 2023, to $647,700, with a target bonus opportunity of 60% of his base salary. Dr. Mahadevia stepped down as Chief Executive Officer effective August 1, 2023. On June 13, 2023, we entered into a (i) Transition and Separation Agreement with Dr. Mahadevia (the “Mahadevia Separation Agreement”) and (ii) Consulting Agreement with Dr. Mahadevia (the “Mahadevia Consulting Agreement”), each as described below.

Dr. Mahadevia’s employment agreement provided for the following increased severance payments upon termination by us without Cause (as defined below) or by Dr. Mahadevia for Good Reason (as defined below): (i) payment of his then current base salary for a period of 12 months following termination; (ii) a pro-rated target bonus for the period during which Dr. Mahadevia was employed in the year of termination; and (iii) continued coverage under our group health insurance plan until the earlier of 12 months from termination or the date Dr. Mahadevia becomes eligible for medical benefits with another employer. Further, the agreement provided that upon termination by us without Cause or by Dr. Mahadevia for Good Reason within 90 days prior to the earlier to occur of a Change of Control (as defined below) or the execution of a definitive agreement the consummation of which would result in a Change of Control or one year following a Change of Control (a “Change of Control Termination”), Dr. Mahadevia was entitled to receive (i) a lump sum payment equal to 18 months of his then-current base salary plus the amount of his then-current target performance bonus; (ii) acceleration of all unvested equity awards as of the date of termination; and (iii) continued coverage under our group health insurance plan until the earlier of 12 months from termination or the date Dr. Mahadevia becomes eligible for medical benefits with another employer. Payment in each case was subject to Dr. Mahadevia’s execution of a release satisfactory to us following such termination. In addition, if Dr. Mahadevia’s employment terminated as a result of disability or death, he was entitled to receive a pro-rated target bonus for the period during which Dr. Mahadevia was employed in the year of termination. The agreement also provided that Dr. Mahadevia shall serve as a member of our Board of Directors during his employment with us until the term of his directorship expires and he is not re-elected or his earlier resignation or removal from our Board of Directors.

On June 13, 2023, we entered into the Mahadevia Separation Agreement. Pursuant to the terms of the Mahadevia Separation Agreement, (i) Dr. Mahadevia remained eligible to receive a bonus amount representing a pro-rata bonus for calendar year 2023, subject to the discretion of the Board, calculated through August 1, 2023 (the “Transition Date”), which was paid within ten days following the Transition Date; (ii) if Dr. Mahadevia is eligible for and elects to continue his health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) following the Transition Date, then the Company shall pay his monthly premium under COBRA until the earliest of (A) January 31, 2024; (B) the expiration of his continuation coverage under COBRA; or (C) the date when he becomes eligible to receive health insurance coverage in connection with new employment or self-employment; (iii) that the Company enter into the Mahadevia Consulting Agreement; (iv) notwithstanding any terms of the Company’s 2017 Plan, or any award agreements to the contrary, in the event of a Change of Control (as defined in the Mahadevia Consulting Agreement) and provided Dr. Mahadevia is a member of the Board on the effective date of the Change of Control, Dr. Mahadevia shall become fully vested in any and all equity awards outstanding as of the effective date of the Change of Control; and (v) Dr. Mahadevia was appointed by the Board of Directors to serve as Chairman of the Board, effective as of the Transition Date.

On June 13, 2023, we entered into the Mahadevia Consulting Agreement. Pursuant to the terms of the Mahadevia Consulting Agreement, Dr. Mahadevia will perform certain consulting services for the Company which commenced on the Transition Date and continues through July 31, 2025, including advising the Company on general operational and strategic matters (the “Mahadevia Services”). Under the Mahadevia Consulting Agreement, the Company shall pay Dr. Mahadevia (i) $54,000 per month for the Mahadevia Services from the Transition Date through January 31, 2024 and (ii) an hourly rate of $310.00 per hour beginning on February 1, 2024 and continuing through July 31, 2025. Further, the equity that Dr. Mahadevia received under the 2017 Plan and any Stock Option Agreement or Restricted Stock Unit Agreement executed pursuant thereto prior to the Transition Date (collectively, the “Mahadevia Award Agreements”) shall continue to vest in accordance with the terms of the Plan and the Mahadevia Award Agreements during the term of the Mahadevia Consulting Agreement. Dr. Mahadevia may exercise any vested options during the term of the Mahadevia Consulting Agreement and for 90 days following a termination event triggering an exercise period applicable to same (but no later than the date such award expires) in accordance with the terms of the Plan and the applicable Mahadevia Award Agreements. In addition, in the event of a Change of Control (as defined in Mahadevia Consulting Agreement) on or before July 31, 2025, Dr. Mahadevia shall become fully vested in any and all equity awards outstanding as of the effective date of such Change of Control, provided that the Mahadevia Consulting Agreement remains in effect as of the effective date of such Change of Control.

Tamara Joseph

On November 6, 2020, we entered into an employment agreement with Ms. Joseph with respect to her employment as our Chief Legal Officer, as amended on November 10, 2022. The terms of Ms. Joseph’s agreement provided for an annual base salary of $385,000 prorated for fiscal year 2020, and eligibility for an annual incentive bonus, with a target bonus opportunity of 40% of her then-current base salary, subject to adjustment by the Board of Directors or Compensation Committee. Ms. Joseph’s annual base salary has been subsequently increased over time. As of July 1, 2021, Ms. Joseph's base salary was increased to $435,000, with a target bonus opportunity of 40% of her base salary. In December 2021, Ms. Joseph’s base salary was increased, effective February 1, 2022, to $450,000 with a target bonus opportunity of 40% of her base salary. In January 2023, Ms. Joseph’s base salary was increased, effective February 1, 2023, to $459,000 with a target bonus opportunity of 40% of her base salary. In January 2024, Ms. Joseph’s base salary was increased, effective January 1, 2024, to $475,065 with a target bonus opportunity of 40% of her base salary.

The agreement also provides for the following severance payments upon termination by us without Cause or by Ms. Joseph for Good Reason: (i) payment of her then-current base salary for a period of nine months following termination; (ii) a pro-rated target bonus for the period during which Ms. Joseph was employed in the year of termination; and (iii) continued coverage under our group health insurance plan until the earlier of 12 months from termination or the date Ms. Joseph becomes eligible for medical benefits with another employer. Further, the agreement provides that upon termination by us without Cause or by Ms. Joseph for Good Reason within 90 days prior to the earlier to occur of a Change of Control or a Change of Control Termination, Ms. Joseph will be entitled to receive: (i) a lump sum payment equal to 12 months of her then-current base salary plus the amount of her then-current target performance bonus; (ii) acceleration of all unvested equity awards as of the date of termination; and (iii) continued coverage under our group health insurance plan until the earlier of 12 months from termination or the date Ms. Joseph becomes eligible for medical benefits with another employer. Payment in each case is subject to Ms. Joseph’s execution of a release satisfactory to us following such termination. In addition, if Ms. Joseph’s employment terminates as a result of disability or death, she shall be entitled to receive a pro-rated target bonus for the period during which Ms. Joseph was employed in the year of termination.

Effective as of March 6, 2024, Ms. Joseph’s employment as our Chief Legal Officer ended. In connection with Ms. Joseph stepping down, she is entitled to receive severance pay in the amount of $356,298.75, payable as continued salary in accordance with the our regular payroll dates and a pro rated cash bonus equal to $34,266.98 for the year ending December 31, 2024, which will be paid to Ms. Joseph when we pay the 2024 annual bonuses to our employees in 2025, but in any event no later than March 15, 2025. To implement the foregoing, we and Ms. Joseph entered into a Separation Agreement. We also entered into the Joseph Consulting Agreement, effective as of March 6, 2024, pursuant to which Ms. Joseph will provide consulting services to us on an hourly, as needed basis, for a term of nine months following March 6, 2024 at a rate of $395.00 per hour. Ms. Joseph’s employee stock options and RSUs will continue to vest during the term of the Joseph Consulting Agreement and after the term of the Joseph Consulting Agreement ends, all of Ms. Joseph’s then vested and unexercised options and RSUs will be exercisable for 90 days in accordance with the terms of such options and RSUs and the 2017 Plan and the 2019 Inducement Plan, as applicable.

Timothy Keutzer

On January 1, 2020, we entered into an employment agreement with Mr. Keutzer with respect to his employment as our Chief Development Officer, as amended on November 10, 2022. The terms of Mr. Keutzer’s agreement provided for an annual base salary of $ 330,000 and eligibility for an annual incentive bonus, with a target bonus opportunity of 40% of his then-current base salary, subject to adjustment by the Board of Directors or Compensation Committee. Mr. Keutzer’s annual base salary has been subsequently increased over time. In December 2021, Mr. Keutzer’s base salary was increased, effective February 1, 2022, to $425,000 with a target bonus opportunity of 40% of his base salary.

On February 1, 2023, we entered into an Amended and Restated Employment Agreement with Mr. Keutzer with connection with his appointment as our Chief Operating Officer (the “Keutzer Amended Employment Agreement”). Under the terms of the Keutzer Amended Employment Agreement, the Company shall pay Mr. Keutzer an annual base salary of $459,000, with a target bonus opportunity of 40% of his base salary. In January 2024, Mr. Keutzer’s base salary was increased, effective January 1, 2024, to $475,065 with a target bonus opportunity remaining at 40% of his base salary.

The agreement also provides for the following severance payments upon termination by us without Cause or by Mr. Keutzer for Good Reason: (i) payment of his then-current base salary for a period of nine months following termination; (ii) a pro-rated target bonus for the period during which Mr. Keutzer was employed in the year of termination; and (iii) continued coverage under our group health insurance plan until the earlier of 12 months from termination or the date Mr. Keutzer becomes eligible for medical benefits with another employer. Further, the agreement provides that upon termination by us without Cause or by Mr. Keutzer for Good Reason within 90 days prior to the earlier to occur of a Change of Control or a Change of Control Termination, Mr. Keutzer will be entitled to receive: (i) a lump sum payment equal to 12 months of his then-current base salary plus the amount of his then-current target performance bonus; (ii) acceleration of all unvested equity awards as of the date of termination; and (iii) continued coverage under our group health insurance plan until the earlier of 12 months from termination or the date Mr. Keutzer becomes eligible for medical benefits with another employer. Payment in each case is subject to Mr. Keutzer ‘s execution of a release satisfactory to us following such termination. In addition, if Mr. Keutzer’s employment terminates as a result of disability or death, he shall be entitled to receive a pro-rated target bonus for the period during which Mr. Keutzer was employed in the year of termination.

Under each of the employment agreements, Cause means (i) the executive’s conviction of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (ii) the executive’s willful failure or refusal to comply with lawful directions of our Board of Directors (or, for Mr. Keutzer and Ms. Joseph, the lawful directions of the Chief Executive Officer), which failure or refusal continues for more than thirty days after written notice is given to the executive by our Board of Directors (or, for Mr. Keutzer and Ms. Joseph, by the Chief Executive Officer), which notice sets forth in reasonable detail the nature of such failure or refusal; (iii) willful and material breach by the executive of a written company policy applicable to the executive or the executive’s covenants and/or obligations under his or her employment agreement or the material breach of the executive’s proprietary information and inventions assignment agreement; and/or (iv) material misconduct by the executive that seriously discredits or damages us or any of our affiliates.

Under each of the employment agreements, Good Reason means (i) relocation of the executive’s principal business location to a location more than thirty (30) miles from the executive’s then-current business location; (ii) a material diminution in the executive’s duties, authority or responsibilities; (iii) a material reduction in the executive’s base salary; (iv) willful and material breach by us of our covenants and/or obligations under the executive’s employment agreement; or (v) within one year following a Change of Control, the executive is not an executive of the parent company, provided that the executive’s roles responsibilities and scope of authority within the subsidiary is not comparable to the executive’s roles, responsibilities and scope of authority with us prior to the Change of Control.

Under each of the employment agreements, Change of Control means (i) any person (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner, directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities (excluding for this purpose any such voting securities held by the Company, or any affiliate, parent or subsidiary of the Company, or by any employee benefit plan of the Company) pursuant to a transaction or a series of related transactions; (ii) a merger or consolidation of the Company other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such corporation) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such corporation, as the case may be, outstanding immediately after such merger or consolidation; (iii) our stockholders approve an agreement for the sale or disposition by the Company of all or substantially all of our assets; or (iv) a change in the composition of our Board of Directors, as a result of which fewer than a majority of the directors are incumbent directors.

All of our executive officers have entered into our standard proprietary information and inventions assignment agreement.

Outstanding Equity Awards at 2023 Fiscal Year-End

The following table shows grants of stock options and awards outstanding on the last day of the fiscal year ended December 31, 2023 to each of the named executive officers.

The market value of the stock awards is based on the closing price of our common stock of $1.47 per share on December 29, 2023.

25% of the options vested on January 4, 2022 and an additional 1/36th of the remaining shares vest monthly until the option is fully vested. In addition, in the event of a Change of Control Termination, the vesting of these options will accelerate in accordance with the terms of the option and his or her employment agreement.

25% of the options vested on February 1, 2023 and an additional 1/36th of the remaining shares vest monthly until the option is fully vested. In addition, in the event of a Change of Control Termination, the vesting of these options will accelerate in accordance with the terms of the option and his or her employment agreement.

Consists of RSUs. Each RSU represents the right to receive one share of common stock upon vesting. The RSUs vest in four equal annual installments beginning on August 26, 2022, subject to the individual's continued service through the applicable vesting date.

Consists of RSUs. Each RSU represents the right to receive one share of common stock upon vesting. The RSUs vest in four equal annual installments beginning on February 1, 2023, subject to the individual's continued service through the applicable vesting date.

Consists of RSUs. Each RSU represents the right to receive one share of common stock upon vesting. The RSUs vest in four equal annual installments beginning on February 1, 2024, subject to the individual's continued service through the applicable vesting date.

Consists of RSUs. Each RSU represents the right to receive one share of common stock upon vesting. The RSUs vest in four equal annual installments beginning on August 1, 2024 subject to the individual's continued service through the applicable vesting date.

100% of these options vested on August 24, 2019.

100% of these options vested on April 28, 2020.

100% of these options vested on July 6, 2017.

100% of these options vested on July 6, 2021.

100% of these options vested on December 13, 2021.

100% of these options vested on January 2, 2023.

25% of the options vested on February 3, 2021 and an additional 1/36th of the remaining shares vest monthly until the option is fully vested. In addition, in the event of a Change of Control Termination, the vesting of these options will accelerate in accordance with the terms of the option and his or her employment agreement.

25% of the options vested on February 1, 2022 and an additional 1/36th of the remaining shares vest monthly until the option is fully vested. In addition, in the event of a Change of Control Termination, the vesting of these options will accelerate in accordance with the terms of the option and his or her employment agreement.

25% of the options vested on December 2, 2021 and an additional 1/36th of the remaining shares vest monthly until the option is fully vested. In addition, in the event of a Change of Control Termination, the vesting of these options will accelerate in accordance with the terms of the option and his or her employment agreement.

During the year ended December 31, 2023, the named executive officers did not exercise any stock options.

2022 Retention Cash Bonus and Performance Awards

On July 1, 2022, upon recommendation of the Compensation Committee, the Board of Directors approved a cash and RSU retention award for the Company’s executive officers, including awards to Mr. Shukla, Dr. Mahadevia, Ms. Joseph and Mr. Keutzer consisting of the following:

•

Mr. Shukla received: (i) a cash bonus of $168,000, which was paid on November 30, 2022, and (ii) upon the achievement of certain performance criteria as of May 31, 2023, a cash payment of $336,000, which was paid in June 2023.

•

Dr. Mahadevia received: (i) a cash bonus of $254,000, which was paid on November 30, 2022, and (ii) upon the achievement of certain performance criteria as of May 31, 2023, a cash payment of $508,000, which was paid in June 2023.

•

Ms. Joseph received: (i) a cash bonus of $157,500, which was paid on November 30, 2022, and (ii) upon the achievement of certain performance criteria as of May 31, 2023, a cash payment of $315,000, which was paid in June 2023.

•

Mr. Keutzer received: (i) a cash bonus of $148,785, which was paid on November 30, 2022, and (ii) upon the achievement of certain performance criteria as of May 31, 2023, a cash payment of $297,500, which was paid in June 2023.

The payments were based on the achievement of certain performance criteria by May 31, 2023 relating to pipeline execution, business development, and financial stewardship.

Potential Payments upon Termination or Change-In-Control

The employment agreements provide for the following severance payments upon termination by us without Cause or by the employee for Good Reason: (i) payment of the employee’s then-current base salary for a period of nine months following termination (12 months in the case of the Chief Executive Officer); (ii) a pro-rated target bonus for the period during which the employee was employed in the year of termination; and (iii) continued coverage under our group health insurance plan until the earlier of 12 months from termination or the date the employee becomes eligible for medical benefits with another employer.

Further, the agreements provide that upon termination by us without Cause or by the employee for Good Reason within 90 days prior to or one year following the earlier to occur of a Change of Control (as defined in the executive’s employment agreements) or the execution of a definitive agreement the consummation of which would result in a Change of Control, the employee will be entitled to receive: (i) a lump sum payment equal to 12 months of the employee’s then-current base salary plus a pro-rated target bonus for the period during which the employee was employed in the year of termination; (ii) acceleration of unvested equity awards as of the date of termination in accordance with the terms of the executive’s employment agreement, as described above under “Narrative Disclosure to Summary Compensation Table;” and (iii) continued coverage under our group health insurance plan until the earlier of 12 months from termination or the date the employee becomes eligible for medical benefits with another employer. Payment in each case is subject to the employee’s execution of a release satisfactory to us following such termination. In addition, if the employee’s employment terminates as a result of disability or death, he or she shall be entitled to receive a pro-rated target bonus for the period during which the employee was employed in the year of termination.

Director Compensation

The following table shows the total compensation paid or accrued during the fiscal year ended December 31, 2023 to each of our current non-employee directors. Directors who are employed by us are not compensated for their service on our Board of Directors.

These amounts represent the aggregate grant date fair value for RSU awards computed in accordance with ASC 718. A discussion of the assumptions used in determining grant date fair value may be found in Note 8 to our consolidated financial statements, included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

These amounts represent the aggregate grant date fair value of options granted to each director in the fiscal year ended December 31, 2023, computed in accordance with FASB ASC Topic 718. A discussion of the assumptions used in determining grant date fair value may be found in Note 8 to our consolidated financial statements, included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Dr. Mahadevia served as our President and Chief Executive Officer for part of 2023; as such, his compensation earned as a director is disclosed in the Summary Compensation Table above.

Represents an option to purchase 30,942 shares of common stock at an exercise price of $1.74. The shares underlying the option award vested and became fully exercisable on December 31, 2023.

Represents an option to purchase 15,471 shares of common stock at an exercise price of $1.74. The shares underlying the option award vested and became fully exercisable on December 31, 2023.

As of December 31, 2023, the aggregate number of options held by each of our current non-employee directors was as follows (representing both exercisable and unexercisable option awards, none of which have been exercised):

Non-Employee Director Compensation Policy

Under our Non-Employee Director Compensation Policy, as amended (the “Non-Employee Director Compensation Policy”), each non-employee director is eligible to receive compensation for his or her service consisting of annual cash retainers and equity awards. Our non-employee directors received the following annual retainers for their service as of December 31, 2023:

Our Non-Employee Director Compensation Policy provides the following with respect to equity awards to non-employee directors: (i) the initial equity award consisting of a non-qualified stock option to purchase shares of our common stock upon first appointment to our Board of Directors and vesting in equal monthly installments until the third anniversary of the grant date subject to the non-employee director’s continued service in the amount of 15,000 shares, and (ii) annual equity awards consisting of a grant of 20,000 RSUs (each RSU relating to one share of our common stock) on the date of our annual meeting of stockholders. The RSUs vest on the first anniversary of the grant date, subject to the director’s continued service, and are issued under, and are subject to the terms of, the 2017 Plan. The policy also provides that, prior to the beginning of each calendar year, a non-employee director may elect to receive all or a portion of his or her base annual fee for service on our Board of Directors in the form of a non-qualified stock option to purchase a number of shares of our common stock based on the Black-Scholes value of such option, which option will be granted on the first business day of the calendar year. These options vest in four quarterly installments on the last day of each calendar quarter during the calendar year, subject to the continued service of the non-employee director.

Directors may be reimbursed for travel, food, lodging and other expenses directly related to their service as directors. Directors are also entitled to the protection provided by their indemnification agreements and the indemnification provisions in our Amended and Restated Certificate of Incorporation, as amended, and Amended and Restated Bylaws.