Disc Medicine Inc

Our executive compensation programs are designed to attract, motivate, incentivize and retain our executive officers, who contribute to our long-term success. Pay that is competitive, rewards performance and effectively aligns the interests of our executive officers with those of our long-term stockholders is key to our compensation program design and decisions. We structure our executive compensation programs to be heavily weighted towards long-term equity incentives that correlate with the growth of sustainable long-term value for our stockholders.

The compensation provided to our named executive officers for the fiscal years ended December 31, 2023 and 2022, as applicable, is detailed in the 2023 Summary Compensation Table and accompanying footnotes and narrative that follow. Our named executive officers for the fiscal year ended December 31, 2023, which consisted of our Chief Executive Officer and our two most highly compensated executive officers other than the Chief Executive Officer, were:

John Quisel, J.D., Ph.D., Chief Executive Officer

William Savage, MD, Ph.D., Chief Medical Officer

Joanne Bryce, CPA, Chief Financial Officer (who departed from her role as Chief Financial Officer effective February 7, 2024)

2023 Summary Compensation Table

The following table provides information regarding the total compensation awarded to, earned by, and paid to our named executive officers for services rendered to us in all capacities for the fiscal years ended December 31, 2023 and 2022, as applicable.

(1)

The amounts reported reflect salaries earned by each named executive officer during the respective fiscal year.

(2)

The amounts reported represent the aggregate grant date fair value of the stock options awarded to our named executive officers during the 2023 and 2022 fiscal years, as applicable, calculated in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 718. Such grant date fair values do not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the stock options reported in this column are set forth in Note 2 to our consolidated financial statements included in this Annual Report on Form 10-K. The amounts reported in this column reflect the accounting cost for the stock options and do not correspond to the actual economic value that may be received by our named executive officers upon the exercise of the stock options or any sale of the common stock underlying such stock options.

(3)

The amounts represent bonuses earned as of December 31, 2023, upon the attainment of one or more pre-established performance goals established by our board of directors on an annual basis.

(4)

The amounts represent safe harbor matching contributions under our 401(k) plan to our named executive officers in 2023.

(5)

Ms. Bryce was a consultant to us until September 14, 2021 when she transitioned to Chief Financial Officer. Effective February 7, 2024, Ms. Bryce departed from her role as Chief Financial Officer and transitioned to an independent contractor advisor.

(6)

The amount reported reflects an accounting charge relating to an amendment of the stock options held by Ms. Bryce of as November 27, 2023. In connection with the Bryce Separation Agreement (as defined below), our board of directors approved an extension of the post-termination exercise period relating to such stock options, such that the vested and outstanding shares subject to the stock options may be exercised until the earlier of (i) twelve months following the end of the Advisor Period (as defined below) and (ii) the original expiration date of the stock option.

Narrative to Summary Compensation Table

Base Salaries

Each named executive officer’s base salary is a fixed component of annual compensation for performing specific duties and functions, and has been established by our board of directors taking into account each individual’s role, responsibilities, skills, and expertise. Base salaries are reviewed annually, typically in connection with our annual performance review process, approved by our board of directors, and adjusted from time to time to realign salaries with market levels after taking into account individual responsibilities, performance and experience. The annual base salaries for Dr. Quisel, Dr. Savage, and Ms. Bryce were $562,000, $458,000 and $419,000, respectively during the fiscal year ended December 31, 2023. There were no annual base salary increases in 2023.

Annual Bonuses

For the fiscal year ended December 31, 2023, each named executive officer was eligible to earn an annual cash bonus based on the achievement of certain corporate performance metrics. Corporate objectives were primarily based on development goals for our product candidates financing and business development goals. The target annual bonus for Dr. Quisel, Dr. Savage, and Ms. Bryce for 2023 was 50%, 40%, and 40%, respectively, of their respective annual base salary as in effect on December 31, 2023.

Equity Compensation

We believe that equity grants provide executives with a strong link to our long-term performance, create an ownership culture and help to align the interests of our executives and stockholders. In addition, we believe that equity grants promote executive retention because they incentivize executive officers to remain employed during the vesting period. During the fiscal year ended December 31, 2022, in connection with our merger with Gemini, we granted stock options to each of our named executive officers. As a result, during the fiscal year ended December 31, 2023, we did not grant any equity awards to our named executive officers. However, in connection with the Bryce Separation Agreement, our board of directors approved an amendment to the stock options held by Ms. Bryce of as November 27, 2023, pursuant to which the post-termination exercise period relating to such stock options was amended to provide that the vested and outstanding shares subject to the stock options may be exercised until the earlier of (i) twelve months following the end of the Advisor Period and (ii) the original expiration date of the stock option. For additional information regarding equity awards previously granted to our named executive officers, please see the table under “Outstanding Equity Awards at 2023 Fiscal Year-End” below.

Outstanding Equity Awards at Fiscal 2023 Year-End

The following table sets forth information regarding outstanding equity awards held by our named executive officers as of December 31, 2023:

(1)

All stock options granted in years 2020 and 2021 were granted pursuant to the terms of our 2017 Stock Option and Grant Plan, as amended, or our 2017 Plan. All stock options granted in year 2022 were granted pursuant to the terms of our Amended and Restated 2021 Stock Option and Incentive Plan, or our 2021 Plan. Pursuant to provisions in our stock plans, the exercise price and number of shares subject to certain of these stock options were adjusted in connection with (i) the 1-for-10 reverse stock split that occurred on December 29, 2022 and (ii) our prior merger with Gemini Therapeutics, Inc., pursuant to which all of our shares of common stock were converted into shares of Gemini’s common stock based on an exchange ratio of 0.1096. Accordingly, the exercise prices shown in the table above (and in the corresponding footnotes) reflect our named executive officers’ post-reverse stock split holdings and post-conversion holdings.

(2)

This stock option vests in 48 equal monthly installments following the Vesting Commencement Date, subject to the named executive officer’s continuous service.

(3)

5,138 shares vested on February 25, 2021. The remaining 56,512 shares vest in 44 equal monthly installments following the Vesting Commencement Date, subject to the named executive officer’s continuous service.

(4)

25% of the shares vested on the one-year anniversary of the Vesting Commencement Date. The remaining shares vest in 36 equal monthly installments following the Vesting Commencement Date, subject to the named executive officer’s continuous service.

(5)

2,140 shares vested on August 3, 2021. The remaining 8,135 shares vest in 38 equal monthly installments following the Vesting Commencement Date, subject to the named executive officer’s continuous service.

(6)

This stock option vests in 16 equal quarterly installments commencing on the three-month anniversary of the Vesting Commencement Date, subject to the named executive officer’s continuous service.

Employment Arrangements for Named Executive Officers

Dr. John Quisel

On August 9, 2022, we entered into an employment agreement with Dr. Quisel effective as of December 29, 2022, or the Quisel Employment Agreement, who currently serves as our Chief Executive Officer, that supersedes his previous employment agreement. The Quisel Employment Agreement provides for Dr. Quisel’s at-will employment, an annual salary of $562,000, subject to our periodic review and increase, but not decrease (except for an across-the-board reduction of no greater than 10% of based on the Company’s financial performance similarly affecting all or substantially all senior management employees of the Company), an annual bonus with a target amount equal to 50% of his base salary and eligibility to participate in the employee benefit plans generally available to our employees. The Quisel Employment Agreement also provides that upon a termination without cause (and not due to death or disability) or if Dr. Quisel resigns for good reason, in each case, outside of the period that is within 3 months prior to, or within 12 months after, the occurrence of the first event constituting a change in control, then Dr. Quisel is entitled to receive cash severance equal to continued base salary payments for 12 months, a lump sum payment equal to 100% of the executive’s target bonus pro-rated for the year of termination, any earned, but unpaid bonus for the fiscal year prior to the fiscal year of termination; acceleration of 25% of Dr. Quisel’s unvested and outstanding time-based vesting equity awards and payment of COBRA premiums (subject to Dr. Quisel’s continued copayment of such premiums at the active employees’ rate) for up to 12 months following the termination date. If within 3 months prior to or 12 months following a change of control, Dr. Quisel is terminated by the Company or a successor involuntarily without cause (and not due to death or disability) or Dr. Quisel resigns for good reason, Dr. Quisel shall be entitled to a lump sum cash payment equal to 18 months of his then current base salary, plus 100% of his target bonus for the year of termination, plus any earned, but unpaid bonus for the fiscal year prior to the fiscal year of termination. In addition, upon such a termination, all of Dr. Quisel’s outstanding equity awards subject to time-based vesting shall be immediately and fully accelerated and he shall be entitled to the payment of COBRA premiums for up to 18 months (subject to Dr. Quisel’s continued copayment of such premiums at the active employees’ rate). All severance payments and benefits are conditioned upon Dr. Quisel’s execution of a release of claims in our favor. If as a result of a termination of his employment Dr. Quisel becomes subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, Dr. Quisel is subject to a modified cutback of the payments and benefits he would otherwise receive in connection with a change in control, such that he would retain the higher of the net amount he would receive if such payments were reduced to avoid payment of the excise tax and the net amount he would receive if he received such payments in full and paid the excise tax. Dr. Quisel is also subject to our confidentiality, assignment, non-solicitation, and noncompetition policies.

Dr. William Savage

On August 9, 2022, we entered into an employment agreement with Dr. Savage effective as of December 29, 2022, or the Savage Employment Agreement, who currently serves as our Chief Medical Officer, that supersedes his previous offer letter. The Savage Employment Agreement provides for Dr. Savage’s at-will employment, an annual salary of $458,000, subject to our periodic review and increase, but not decrease (except for an across-the-board reduction of no greater than 10% of based on the Company’s financial performance similarly affecting all or substantially all senior management employees of the Company), an annual bonus with a target amount equal to 40% of his base salary and his eligibility to participate in the employee benefit plans generally available to our employees. The Savage Employment Agreement also provides that upon a termination without cause (and not due to death or disability) or if Dr. Savage resigns for good reason, in each case, outside of the period that is within 3 months prior to, or within 12 months after, the occurrence of the first event constituting a change in control, then Dr. Savage is entitled to receive cash severance equal to continued base salary payments for 9 months, any earned, but unpaid bonus for the fiscal year prior to the fiscal year of termination, and payment of COBRA premiums (subject to Dr. Savage’s continued copayment of such premiums at the active employees’ rate) for up to 9 months. If within 3 months prior to or 12 months following a change of control, Dr. Savage is terminated by the Company or a successor involuntarily without cause (and not due to death or disability) or Dr. Savage resigns for good reason, Dr. Savage shall be entitled to a lump sum cash payment equal to 12 months of this then current base salary, plus 100% of his target bonus for the year of termination, plus any earned, but unpaid bonus for the fiscal year prior to the fiscal year of termination. In addition, upon such a termination, all of Dr. Savage’s outstanding equity awards subject to time-based vesting shall be immediately and fully accelerated and he shall be entitled to the payment of COBRA premiums for up to 12 months (subject to Dr. Savage’s continued copayment of such premiums at the active employees’ rate). All severance payments and benefits are conditioned upon Dr. Savage’s execution of a release of claims in our favor. If as a result of a termination of his employment Dr. Savage becomes subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, Dr. Savage is subject to a modified cutback of the payments and benefits he would otherwise receive in connection with a change in control, such that he would retain the higher of the net amount he would receive if such payments were reduced to avoid payment of the excise tax and the net amount he would receive if he received such payments in full and paid the excise tax. Dr. Savage is also subject to our confidentiality, assignment, non-solicitation, and noncompetition policies.

Ms. Joanne Bryce

On August 9, 2022, we entered into an employment agreement with Ms. Bryce effective as of December 29, 2022, or the Bryce Employment Agreement, who currently serves as our Chief Financial Officer, that supersedes her previous offer letter. The Bryce Employment Agreement provides for Ms. Bryce’s at-will employment, an annual salary of $419,000, subject to our periodic review and increase, but not decrease (except for an across-the-board reduction of no greater than 10% of based on the Company’s financial performance similarly affecting all or substantially all senior management employees of the Company), an annual bonus with a target amount equal to 40% of her base salary and her eligibility to participate in the employee benefit plans generally available to our employees. The Bryce Employment Agreement also provides that upon a termination without cause (and not due to death or disability) or if Ms. Bryce resigns for good reason, in each case, outside of the period that is within 3 months prior to, or within 12 months after, the occurrence of the first event constituting a change in control, then Ms. Bryce is entitled to receive cash severance equal to continued base salary payments for 9 months, any earned, but unpaid bonus for the fiscal year prior to the fiscal year of termination, and payment of COBRA premiums (subject to Ms. Bryce’s continued copayment of such premiums at the active employees’ rate) for up to 9 months. If within 3 months prior to 12 months following a change of control, Ms. Bryce is terminated by the Company or successor involuntarily without cause (and not due to death or disability) or Ms. Bryce resigns for good reason, Ms. Bryce shall be entitled to cash severance equal to a lump sum cash payment equal to 12 months of her then current base salary, plus 100% of her target bonus for the year of termination, plus any earned, but unpaid bonus for the fiscal year prior to the fiscal year of termination. In addition, upon such a termination, all of Ms. Bryce’s outstanding equity awards subject to time-based vesting shall be immediately and fully accelerated and she shall be entitled to the payment of COBRA premiums (subject to Ms. Bryce’s continued copayment of such premiums at the active employees’ rate) for up to 12 months. All severance payments and benefits are conditioned upon Ms. Bryce’s execution of a release of claims in our favor. If as a result of a termination of his employment Ms. Bryce becomes subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, Ms. Bryce is subject to a modified cutback of the payments and benefits she would otherwise receive in connection with a change in control, such that she would retain the higher of the net amount she would receive if such payments were reduced to avoid payment of the excise tax and the net amount she would receive if she received such payments in full and paid the excise tax. Ms. Bryce is also subject to our confidentiality, assignment, non-solicitation, and noncompetition policies.

On February 7, 2024, Ms. Bryce departed from her role as Chief Financial Officer. In connection with her departure, we entered into a Transition and Separation Agreement with Ms. Bryce, or the Bryce Separation Agreement, which provides that, subject to Ms. Bryce’s execution of the Bryce Separation Agreement, which included a release of claims in favor of the Company, Ms. Bryce will receive 100% of her target annual bonus for 2023, despite her not remaining an employee through the date of payment. In addition, subject to Mr. Bryce’s execution and nonrevocation of the Bryce Separation Agreement, her continued compliance with her Employee Confidentiality, Assignment, Non-solicitation and Noncompetition Agreement, dated as of September 14, 2021, and her cooperation with us to transition her duties and responsibilities, Ms. Bryce will be entitled to the following: (i) we will engage Ms. Bryce as an advisor between the date of her termination of employment (i.e., February 7, 2024) and the date that is nine months after such termination (i.e., November 7, 2024), unless she resigns prior to such date or we terminate her for cause (the “Advisor Period”), and during the Advisor Period we will pay Ms. Bryce $350 per hour of service she provides to the Company, (ii) her base salary for a period of nine months following her termination of employment, (iii) subject to her copayment of premium amounts at the applicable active employees’ rate and proper election to continue COBRA health coverage, payment of the portion of the premiums equal to the amount that we would have paid to provide health insurance to Ms. Bryce had she remained employed with us for up to nine months following her termination of employment, (iii) the period during which Ms. Bryce may exercise her vested and outstanding stock options following the cessation of her service relationship with us was extended to the earlier of (A) the date that is twelve months following the end of the Advisor Period and (b) the original expiration date of the stock option, and (iv) a prorated portion of her target annual bonus for 2024, prorated based on the number of days in 2024 she remained employed by the Company.

Health and Welfare Benefits

Our named executive officers, like all full-time employees, are eligible to participate in our health and welfare benefit plans.

Perquisites and Personal Benefits

We generally do not provide perquisites to our executives.

401(k) Plan

We maintain a tax-qualified retirement plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax-advantaged basis, or the 401(k) Plan. Participants in the 401(k) Plan are able to defer eligible compensation subject to applicable annual Internal Revenue Code limits. During 2023, we implemented a safe harbor match under our 401(k) program of 50% of a participant’s eligible contributions, up to a total of 6% of eligible compensation. We did not provide a matching contribution to the named executive officers or to any employees in 2022. The 401(k) Plan is intended to be qualified under Section 401(a) of the Internal Revenue Code with the 401(k) Plan’s related trust intended to be tax exempt under Section 501(a) of the Internal Revenue Code. As a tax-qualified retirement plan, pre-tax contributions to the 401(k) Plan and earnings on those contributions are not taxable to the employees until distributed from the 401(k) Plan, and earnings on Roth contributions are not taxable when distributed from the 401(k) Plan.

DIRECTOR COMPENSATION

Non-Employee Director Compensation Table

The following table presents the total compensation for each person who served as a non-employee member of our board of directors during the fiscal year ended December 31, 2023. Dr. Quisel, one of our directors who also serves as our Chief Executive Officer, does not receive any additional compensation for his service as a director. Dr. Quisel is one of our named executive officers and, accordingly, the compensation that we pay to Dr. Quisel is discussed above under ‘‘—2023 Summary Compensation Table’’ and ‘‘—Narrative to Summary Compensation Table.’’

Other than as described in this paragraph and set forth in the table and described more fully below, we did not pay any compensation or make any equity awards or non-equity awards to, or pay any other compensation to any of the non-employee members of our board of directors in 2023 for their services as members of the board of directors.

(1)

The amounts reported represent the aggregate grant date fair value of the stock options awarded to the non-employee directors during fiscal year 2023, calculated in accordance with FASB ASC Topic 718. The assumptions used in calculating the grant date fair value of the awards reported in this column are set forth in Note 2 to our consolidated financial statements included in this Annual Report on Form 10-K. The amounts reported in this column reflect the accounting cost for the stock options and does not correspond to the actual economic value that may be received upon exercise of the stock option or any sale of any of the underlying shares of common stock.

(2)

Dr. Backstrom resigned from our board on June 9, 2023. Upon Dr. Backstrom's resignation, our board approved an amendment to the stock options held by Dr. Backstrom to accelerate the vesting such that any unvested stock options held by Dr. Backstrom became vested and exercisable in full as of June 9, 2023.

(3)

Dr. Gemayel joined our board of directors on December 29, 2022.

(4)

As of December 31, 2023, our non-employee members of our board of directors held the following aggregate number of unexercised options as of such date: