Cullinan Oncology Inc

The compensation provided to our named executive officers for 2023 and 2022 is detailed in the 2023 Summary Compensation Table and accompanying footnotes and narrative that follow this table. Our named executive officers for 2023, which consist of the individual who served as our principal executive officer during 2023 and our next two most highly compensated executive officers, are:

•

Nadim Ahmed, our President and Chief Executive Officer;

•

Jeffrey Jones, our Chief Medical Officer; and

•

Jeffrey Trigilio, our Chief Financial Officer.

2023 Summary Compensation Table

The following table presents total compensation awarded to, earned by or paid to our named executive officers for services rendered to us in all capacities during the years listed below.

(1)

The amounts reported for 2023 and 2022 represent discretionary cash bonuses paid by us based on our named executive officers’ performance during such fiscal year. Additionally, for Mr. Trigilio, the amounts reported for 2023 and 2022 include a cash retention bonus for his continued service through August 2022, February 2023 and August 2023 in the amounts of $180,800 for 2023 and $45,200 for 2022.

(2)

The amounts reported represent the aggregate grant date fair value of the stock option and restricted stock unit (“RSUs”) awards granted to the named executive officers during 2023 and 2022, respectively, computed in accordance with FASB ASC Topic 718, disregarding the effects of estimated forfeitures. The assumptions used to value the stock option and market-based RSU awards for this purpose are set forth in Note 9 to our consolidated financial statements included in this Annual Report on Form 10-K. Service-based RSUs are valued based on the closing price of our common stock on the grant date.

(3)

Mr. Ahmed also serves as a member of our board of directors but does not receive any additional compensation for his service as a director.

(4)

The amounts reported for 2023 for Mr. Ahmed and Dr. Jones and for both 2023 and 2022 for Mr. Trigilio represent the grant date fair value of their respective service-based RSUs, which were valued based on the closing price of our common stock on the grant date.

(5)

The amount reported for Mr. Ahmed for 2023 includes commuting and related travel expenses of $37,608, the use of a corporate apartment valued at $43,304, a housing allowance of $24,000, and 401(k) matching contributions of $16,500. The amount reported for Mr. Ahmed for 2022 includes commuting and related travel expenses of $46,343, a housing allowance of $87,000, and 401(k) matching contributions of $15,250. The housing allowance reported for 2022 reflects $15,000 in housing expenses for the portion of 2021 that Mr. Ahmed was employed by us but that were not paid to Mr. Ahmed until early 2022.

(6)

The amount reported represents the grant date fair value of Mr. Ahmed’s market-based RSUs based upon the probable achievement level of the corporate stock price metrics associated with the award at the time of grant.

(7)

The amount reported for Dr. Jones for 2023 includes commuting and related travel expenses of $34,501 and 401(k) matching contributions of $16,500.

(8)

The amount reported for Mr. Trigilio for 2023 includes commuting and related travel expenses of $25,839 and 401(k) matching contributions of $16,500. The amount reported for Mr. Trigilio for 2022 includes 401(k) matching contributions of $15,250.

Narrative to 2023 Summary Compensation Table

Our executive compensation program is designed to attract, retain and reward key employees and to align their interests with the interests of our stockholders. Our Chief Executive Officer makes recommendations to the compensation committee of our board of directors (our “compensation committee”) about the compensation of his direct reports (except with respect to his own compensation), and our compensation committee is responsible for determining the compensation of our executive officers.

Our compensation committee has engaged Compensia as its independent compensation consultant since November 2022. Compensia assists the compensation committee in evaluating the Company’s executive and director compensation practices, including program design, identification of an appropriate peer group for compensation comparison purposes and providing competitive market pay data. Our compensation committee assessed the independence of Compensia from management and, on the basis of that assessment and after taking into consideration the independence factors that are required to be considered under applicable stock exchange listing standards and SEC rules, determined that none of the work performed by Compensia gave rise to a conflict of interest or would compromise Compensia’s independence.

Base Salary

During 2023 and 2022, the annual base salary for Mr. Ahmed was $648,900 and $618,000, respectively. During 2023, the annual base salary for Dr. Jones was $492,200. During 2023 and 2022, the annual base salary for Mr. Trigilio was $474,600 and $452,000, respectively.

Bonus Arrangements

Pursuant to the terms of Mr. Ahmed’s employment agreement, his target incentive bonus was 50% of his base salary in both 2023 and 2022. Based on our compensation committee’s and board of directors’ evaluation of his and the Company’s performance during each of 2023 and 2022, Mr. Ahmed was awarded a discretionary bonus equal to 60% of his base salary.

Pursuant to the terms of Dr. Jones’ employment agreement, his target incentive bonus was 40% of his base salary in 2023. Based on our compensation committee’s evaluation of his and the Company’s performance during 2023, Dr. Jones was awarded a discretionary bonus equal to 48% of his base salary.

Pursuant to the terms of Mr. Trigilio’s employment agreement, his target incentive bonus was 40% of his base salary in both 2023 and 2022. Based on our compensation committee’s evaluation of his and the Company’s performance during 2023 and 2022, Mr. Trigilio was awarded a discretionary bonus equal to 47% and 48% of his base salary, respectively.

Additionally, Mr. Trigilio received a retention bonus as part of an initiative implemented broadly across the workforce. The purpose of the retention initiative was to ensure workforce stabilization and continuity during a transition period, especially for key roles given the company had 31 full time employees as of December 31, 2021. Pursuant to the supplemental bonus agreement entered into in February 2022, Mr. Trigilio was entitled to cash retention bonuses tied to continued service with the Company through August 2023. The total bonus amount was paid in installments according to the following payout schedule: 20% in August 2022, 40% in February 2023 and the remaining 40% in August 2023. Mr. Trigilio received $180,800 in 2023 and $45,200 in 2022 for his continued service through the respective payout dates.

Equity Compensation

Our employees and executive officers are eligible to receive stock options and other stock-based awards pursuant to our 2021 Stock Option and Incentive Plan (the “2021 Stock Plan”).

We believe that equity awards provide our executive officers with a strong link to our long-term performance, create an ownership culture and help to align the interests of our executive officers and our stockholders. In addition, we believe that equity awards with multi-year vesting requirements promote executive retention because they incentivize our executive officers to remain in our employment during the award's vesting period. Our compensation committee annually reviews the equity incentive compensation of our executive officers, including our named executive officers, and from time to time may grant equity awards to them. We typically grant equity awards in the form of stock options in connection with the commencement of an executive officer’s employment and as a combination of both stock options and RSUs on an annual basis thereafter. We set option exercise prices at the closing market price of a share of our common stock on the date of grant (or the immediately preceding date on which a closing market price was reported if there is no closing market price on the date of grant).

On February 22, 2023, Mr. Ahmed was granted (i) an option to purchase 211,000 shares of our common stock at an exercise price of $11.03 per share and (ii) RSUs that represent the right to receive, at settlement, 109,000 shares of our common stock (the “2023 Ahmed Equity Awards”). One forty-eighth of the shares underlying the 2023 Ahmed Equity Awards vest monthly, subject to continued service through each vesting date. The unvested portion of the 2023 Ahmed Equity Awards is subject to vesting acceleration in the event of a termination of Mr. Ahmed’s employment by us without cause or by him for good reason (as such terms are defined in his employment agreement), in either case within 12 months following a change in control of the Company, also known as a "sale event" (as defined in the 2021 Stock Plan). On March 5, 2022, pursuant to the terms of his employment agreement, Mr. Ahmed was granted market-based RSUs that represent the right to receive, at settlement, 215,000 shares of our common stock. The number of shares subject to market-based RSUs represents the number of shares issuable upon vesting, assuming the Company achieves its corporate stock price metrics at the target achievement level. The number of shares issuable, if any, when the award vests will depend on the degree of achievement of corporate stock price metrics at the vesting date and ranges between 0% and 200% of the target number of shares. The market-based RSUs will vest and be settled three years from the grant date in an amount to be determined based on the price per share of our common stock at such time. The market-based RSUs are subject to vesting acceleration in the event of a change in control of the Company prior to the vesting date.

On February 17, 2023, Dr. Jones was granted (i) an option to purchase 120,000 shares of our common stock at an exercise price of $11.34 per share and (ii) RSUs that represent the right to receive, at settlement, 60,000 shares of our common stock (the “2023 Jones Equity Awards”). One forty-eighth of the shares underlying the 2023 Jones Equity Awards vest monthly, subject to continued service through each vesting date. The unvested portions of the 2023 Jones Equity Awards are subject to vesting acceleration in the event of a termination of Dr. Jones’ employment by us without cause or by him for good reason (as such terms are defined in his employment agreement), in either case within 12 months following a change in control of the Company, also known as a "sale event" ( as defined in the 2021 Stock Plan).

On February 17, 2023, Mr. Trigilio was granted (i) an option to purchase 93,500 shares of our common stock at an exercise price of $11.34 per share and (ii) RSUs that represent the right to receive, at settlement, 47,000 shares of our common stock (the “2023 Trigilio Equity Awards”). One forty-eighth of the shares underlying the 2023 Trigilio Equity Awards vest monthly, subject to continued service through each vesting date. On February 11, 2022, Mr. Trigilio was granted (i) an option to purchase 75,000 shares of our common stock at an exercise price of $13.60 per share and (ii) RSUs that represent the right to receive, at settlement, 37,500 shares of our common stock, (the “2022 Trigilio Equity Awards”). One forty-eighth of the shares underlying the 2022 Trigilio Equity Awards vest monthly, subject to continued service through each vesting date. The unvested portions of the 2023 Trigilio Equity Awards and the 2022 Trigilio Equity Awards are subject to vesting acceleration in the event of a termination of Mr. Trigilio’s employment by us without cause or by him for good reason (as such terms are defined in his employment agreement), in either case within 12 months following a change in control of the Company, also known as a "sale event" (as defined in the 2021 Stock Plan).

Employment Agreements with our Named Executive Officers

We have entered into employment agreements with each of our named executive officers. Each agreement sets forth such executive officer’s base salary, target bonus percentage and eligibility to participate in our benefit plans generally. Each of our named executive officers is also subject to a confidentiality, assignment and non-solicitation agreement, which provides for a perpetual post-termination confidentiality covenant as well as non-solicitation of employees and consultants covenants that apply during employment and for one year following termination. The terms “cause”, “good reason” and “change in control” referred to below are defined in each named executive officer’s employment agreement.

Nadim Ahmed

In October 2021, we entered into an employment agreement with Mr. Ahmed, who currently serves as our President and Chief Executive Officer. The employment agreement provides for an annual base salary, subject to periodic review by our board of directors or compensation committee, and an annual target bonus equal to 50% of Mr. Ahmed’s annual base salary, with the actual amount of any bonus payable determined in the sole discretion of our board of directors or compensation committee based on milestones to be determined by our board of directors or compensation committee. Pursuant to his employment agreement, Mr. Ahmed received a sign-on bonus of $625,000 and was also entitled to a housing allowance of $6,000 per month. In May 2023, we entered into an amendment to Mr. Ahmed’s employment agreement to permit use of a corporate apartment in lieu of the provision of a housing allowance. The employment agreement also provides for Mr. Ahmed to be nominated for election to our board of directors and to be recommended to our stockholders for election to our board of directors for so long as he remains our Chief Executive Officer.

Under Mr. Ahmed’s employment agreement, in the event that Mr. Ahmed’s employment is terminated by us without cause or Mr. Ahmed resigns for good reason, subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor and, in the Company’s sole discretion, a one-year post-employment noncompetition agreement, he will be entitled to receive (i) an amount equal to 12 months of his then-current base salary plus a pro-rata portion of his annual bonus, based on actual performance for the year, and (ii) if Mr. Ahmed is participating in our group health plans immediately prior to his termination and elects COBRA health continuation, continuation of such group health coverage at the same rate as if he were an active employee, until the earliest of (A) the 12-month anniversary of his termination, (B) his eligibility for group medical plan benefits under any other employer’s group medical plan or (C) the cessation of his continuation rights under COBRA. The employment agreement also provides that, in lieu of the payments and benefits described above, in the event that Mr. Ahmed’s employment is terminated by us without cause or Mr. Ahmed resigns for good reason, in either case within 12 months following a change in control of the Company, subject to the execution and effectiveness of a general release of claims in our favor, he will be entitled to receive (i) an amount equal to 24 months of his then-current base salary (or his base salary in effect immediately prior to the change in control, if higher) plus his prorated annual bonus, based on actual performance for the year, and (ii) an amount equal to the premiums the Company would have paid to its group health plan provider or the COBRA provider as a monthly employer contribution if Mr. Ahmed had remained employed by the Company for an additional 24 months.

In addition, in the event of a termination of Mr. Ahmed’s employment by us without cause or by him for good reason, in either case within 12 months following a change in control of the Company, all outstanding equity awards that vest solely based on time will become fully vested and nonforfeitable and any performance-based RSUs outstanding will vest pro-rata based on the period of Mr. Ahmed’s employment during the applicable performance period.

Jeffrey Jones, M.D.

In February 2022, we entered into an employment agreement with Dr. Jones, who currently serves as our Chief Medical Officer. The employment agreement provides for an annual base salary, subject to periodic review by our board of directors or compensation committee, and an annual target bonus equal to 40% of Dr. Jones’ annual base salary, with the actual amount of any bonus payable determined in the sole discretion of our board of directors or compensation committee, subject to the terms of any applicable incentive compensation plan of the Company. Pursuant to his employment agreement, Dr. Jones also received a sign-on bonus of $100,000.

Under Dr. Jones’ employment agreement, in the event that Dr. Jones’ employment is terminated by us without cause or Dr. Jones resigns for good reason, subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor and, in the Company’s sole discretion, a one-year post-employment noncompetition agreement, he will be entitled to receive (i) an amount equal to nine months of his then-current base salary plus a prorated bonus for the year of termination, based on the termination date, and (ii) if Dr. Jones is participating in our group health plans immediately prior to his termination and elects COBRA health continuation, continuation of such group health coverage at the same rate as if he were an active employee, until the earliest of (A) the nine-month anniversary of his termination, (B) his eligibility for group medical plan benefits under any other employer’s group medical plan or (C) the cessation of his continuation rights under COBRA. Dr. Jones’ employment agreement also provides that, in lieu of the payments and benefits described above, in the event that his employment is terminated by us without cause or he resigns for good reason, in either case within 12 months following a change in control of the Company, subject to the execution and effectiveness of a general release of claims in our favor, he will be entitled to receive (i) a lump sum cash payment equal to 12 months of his then-current base salary (or his base salary in effect immediately prior to the change in control, if higher) plus his annual target bonus for the then-current year (or the annual target bonus in effect immediately prior to the change in control, if higher), and (ii) if Dr. Jones is participating in our group health plans immediately prior to his termination and elects COBRA health continuation, continuation of such group health coverage at the same rate as if he were an active employee, until the earliest of (A) the 12-month anniversary of his termination, (B) his eligibility for group medical plan benefits under any other employer’s group medical plan or (C) the cessation of his continuation rights under COBRA.

Dr. Jones’ employment agreement also provides that in the event Dr. Jones’ employment is terminated by us without cause or Dr. Jones resigns for good reason, in either case within 12 months following a change in control of the Company, each unvested stock option and outstanding equity award subject to time-based vesting will immediately accelerate and become fully vested and exercisable or nonforfeitable on the date of termination.

Jeffrey Trigilio

In connection with our initial public offering in 2021, we entered into a new employment agreement with Mr. Trigilio who currently serves as our Chief Financial Officer. His employment agreement provides for an annual base salary, subject to periodic review by our board of directors or compensation committee, and an annual target bonus equal to 40% of Mr. Trigilio’s annual base salary, with the actual amount of any bonus payable determined in the sole discretion of our board of directors or compensation committee, subject to the terms of any applicable incentive compensation plan of the Company.

Under Mr. Trigilio’s employment agreement, in the event that Mr. Trigilio’s employment is terminated by us without cause or Mr. Trigilio resigns for good reason, subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor and, in the Company’s sole discretion, a one-year post-employment noncompetition agreement, he will be entitled to receive (i) an amount equal to nine months of his then-current base salary plus a pro-rata portion of his annual target bonus, and (ii) if Mr. Trigilio is participating in our group health plans immediately prior to his termination and elects COBRA health continuation, continuation of such group health coverage at the same rate as if he were an active employee, until the earliest of (A) the nine-month anniversary of his termination, (B) his eligibility for group medical plan benefits under any other employer’s group medical plan or (C) the cessation of his continuation rights under COBRA. Mr. Trigilio’s employment agreement also provides that, in lieu of the payments and benefits described above, in the event that his employment is terminated by us without cause or he resigns for good reason, in either case within 12 months following a change in control of the Company, subject to the execution and effectiveness of a general release of claims in our favor, he will be entitled to receive (i) a lump sum cash payment equal to 12 months of his then-current base salary (or his base salary in effect immediately prior to the change in control, if higher) plus his annual target bonus for the then-current year (or the annual target bonus in effect immediately prior to the change in control, if higher), and (ii) if Mr. Trigilio is participating in our group health plans immediately prior to his termination and elects COBRA health continuation, continuation of such group health coverage at the same rate as if he were an active employee, until the earliest of (A) the 12-month anniversary of his termination, (B) his eligibility for group medical plan benefits under any other employer’s group medical plan or (C) the cessation of his continuation rights under COBRA.

Mr. Trigilio’s employment agreement also provides that in the event his employment ends as a result of his death or disability, unless otherwise set forth in an award agreement evidencing an equity award subject to performance-based vesting, 25% of each then-unvested equity award outstanding, plus an additional 5% for each full year of service to the Company, will immediately accelerate and become fully vested and exercisable or nonforfeitable on the date of termination. The employment agreement further provides that in the event Mr. Trigilio’s employment is terminated by us without cause or Mr. Trigilio resigns for good reason, in either case within 12 months following a change in control of the Company, each outstanding equity award will immediately accelerate and become fully vested and exercisable or nonforfeitable on the date of termination.

2023 Outstanding Equity Awards at Fiscal Year End Table

The following table presents the outstanding equity awards held by each of our named executive officers as of December 31, 2023.

(1)

Amounts shown are based on a price of $10.19 per share, which was the closing market price of our common stock as reported on the Nasdaq Global Select Market on the last trading day of the year, December 29, 2023.

(2)

Represents an option to purchase shares of our common stock, which vests in 48 monthly equal installments, generally subject to the named executive officer’s continued service through each vesting date.

(3)

Represents shares of common stock underlying market-based RSUs granted on March 5, 2022, which vest three years from the grant date in an amount to be determined based on the price per share of our common stock at such time, assuming the Company achieves its corporate stock price metrics at the threshold achievement level.

(4)

Represents shares of common stock underlying service-based RSUs granted on February 22, 2023, which vest in 48 monthly equal installments, generally subject to the named executive officer’s continued service through each vesting date.

(5)

Represents an option to purchase shares of our common stock, which vests as follows: 25% of the shares underlying the option vest on the first anniversary of the vesting commencement date and the remaining shares vest in 36 equal monthly installments thereafter, generally subject to the named executive officer’s continued service through each vesting date.

(6)

Represents shares of common stock underlying service-based RSUs granted on February 17, 2023, which vest in 48 monthly equal installments, generally subject to the named executive officer’s continued service through each vesting date.

(7)

Reflects shares of common stock underlying service-based RSUs granted on February 11, 2022, which vest in 48 monthly equal installments, generally subject to the named executive officer’s continued service through each vesting date.

Compensation Risk Assessment

We do not believe that our executive compensation program encourages excessive or unnecessary risk taking. Our compensation program, including any performance-based compensation, is designed to encourage our named executive officers and other employees to remain focused on both short-term and long-term strategic goals. As a result, we do not believe that our compensation programs are reasonably likely to have a material adverse effect on us.

Employee Benefits

Our eligible U.S. employees, including our executive officers, participate in a tax-qualified retirement plan that provides an opportunity to save for retirement on a tax-advantaged basis. Plan participants are able to defer eligible compensation subject to applicable annual limits under the Internal Revenue Code of 1986, as amended (the “Code”). We make a safe harbor matching contribution equal to 100% of our employee’s deferrals, up to a maximum of 5% of the employee’s salary, subject to applicable Code limits.

All of our full-time employees, including our executive officers, are eligible to participate in certain medical, disability and life insurance benefit programs offered by us. We pay the premiums for term life insurance and short-term and long-term disability for all of our employees, including our executive officers. We also provide all employees, including our executive officers, paid time off benefits including, vacation, sick time and holidays. We do not sponsor any qualified or non-qualified defined benefit plans nor any non-qualified defined contribution plans for any of our employees or executive officers.

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

Director Compensation

2023 Director Compensation Table

The table below shows all compensation earned by or paid to our non-employee directors during 2023. Nadim Ahmed, our Chief Executive Officer, does not receive any compensation for his services as director and, consequently, is not included in this table. The compensation received by Mr. Ahmed during 2023 is set forth in the “Executive Compensation— 2023 Summary Compensation Table.”

(1)

In June 2023, the compensation committee approved a revised schedule of non-employee director cash retainers to align with the director cash retainers provided at our peer companies based on information provided by Compensia. The amounts represent payment of board fees at the previously-set fees for one quarter of the year and the revised fees for three quarters of the year.

(2)

Amounts represent the aggregate grant date fair value of options to purchase shares of our common stock granted to our non-employee directors in 2023, computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. The assumptions used to value the options for this purpose are set forth in Note 9 to our consolidated financial statements included in this Annual Report on Form 10-K.

(3)

As of December 31, 2023, the aggregate number of shares of our common stock subject to outstanding option awards held by our non-employee directors was as follows: Mr. Ebeling, 126,949 shares; Dr. Martin, 55,330 shares; Mr. Rosenberg, 250,609 shares; Dr. Ryan, 26,150 shares; and Mr. Webster, 68,014 shares.

(4)

Dr. Martin does not receive cash retainer fees due to her agreement with the Company.

(5)

Consists of reimbursement of travel expenses.

(6)

Dr. Ryan commenced service as a director in November 2022 and therefore was ineligible for an Annual Grant in 2023 under the terms of our non-employee director compensation policy, as described below.

Non-Employee Director Compensation Policy

Under our non-employee director compensation policy, we pay our non-employee directors a cash retainer for service on the board of directors and for service on each committee on which the director is a member. The chairperson of our board of directors receives an additional annual retainer for such service. The fees are designed to enable us to attract and retain, on a long-term basis, highly qualified non-employee directors. In June 2023, the following increases to cash retainers for service on our board were approved based on market data of director compensation levels at our peer companies provided by Compensia: (i) the annual cash retainer for directors and the additional annual retainer for the non-executive chairman were increased from $35,000 to $40,000 and from $30,000 to $33,000, respectively, and (ii) the annual cash retainers for serving as the chairperson and a member of the Nominating and Corporate Governance Committee were increased from $8,000 to $10,000 and from $4,000 to $5,000, respectively. The schedule of non-employee director cash retainers in effect as of December 31, 2023 is set forth below.

In addition, our non-employee director compensation policy provides that, upon initial election to our board of directors, each non-employee director will be granted an option to purchase shares of our common stock with a grant date fair value of $275,000 (the "Initial Grant"). The Initial Grant vests in equal installments on the first, second and third anniversaries of the grant date, subject to continued service as a director through the applicable vesting date. Furthermore, on the date of each annual meeting of stockholders, each non-employee director who continues as a non-employee director following such meeting will be granted an option to purchase shares of our common stock with a grant date fair value of $165,000 (the "Annual Grant"). The Annual Grant will vest in full on the earlier of (i) the first anniversary of the grant date or (ii) our next annual meeting of stockholders, subject to continued service as a director through the applicable vesting date. Directors are not entitled to the Annual Grant until they have been on the board for a full year. Initial Grants and Annual Grants vest in full upon the sale of the Company.

We reimburse all reasonable out-of-pocket expenses incurred by non-employee directors in attending meetings of the board of directors and committees.

Under the non-employee director compensation policy, the aggregate amount of compensation, including both equity compensation and cash compensation, paid to a non-employee director in any year for service as a director may not exceed $500,000 ($750,000 for the year in which the non-employee director is initially elected or appointed to our board of directors).