Metagenomi Inc

EXECUTIVE COMPENSATION

As an emerging growth company, we have opted to comply with the executive compensation disclosure rules applicable to “smaller reporting companies”, as such term is defined in the rules promulgated under the Securities Act. The compensation provided to our named executive officers for fiscal year ended December 31, 2023 is detailed in the 2023 Summary Compensation Table and accompanying footnotes and narrative that follows.

Our named executive officers for the fiscal year ended December 31, 2023 are:

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Brian C. Thomas, Ph.D., our Chief Executive Officer;

•

Jian Irish, Ph.D., MBA, our President and Chief Operating Officer; and

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Sarah Noonberg, M.D., Ph.D., our Chief Medical Officer.

2023 Summary Compensation Table

To date, the compensation of our named executive officers has consisted of a combination of base salary, cash bonuses and equity awards in the form of profits interests, as described below. Our named executive officers, like all of our full time employees are eligible to participate in our health and welfare benefit plans. As we transitioned from a private company to a publicly traded company, we intend to evaluate our compensation values and philosophy and compensation plans and arrangements as circumstances require.

The following table shows the total compensation 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 in this column reflect one time special bonuses paid to Dr. Thomas, Dr. Irish and Dr. Noonberg for performance during the applicable fiscal year.

(2)

The amounts reported in this column represent the aggregate grant date fair value of profits interests granted to the named executive officers during the applicable fiscal year, as calculated in accordance with Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”), Topic 718. Such grant date value does not take into account any estimated forfeitures related to service-based vesting conditions. On July 31, 2023, as a result of the amendment to the LLC agreement to include a “catch-up” feature, the Company remeasured the fair value of its profits interests as required under ASC 718 resulting in increases to the originally calculated fair values, in the aggregate amount of $4,564,081. The assumptions used in the grant date fair value of the awards in this column are described in Note 11 – Profits interest plan to our consolidated financial statements as of December 31, 2023 and for the year ended December 31, 2023 and 2022. These awards are described in more detail under “Narrative Disclosure to Summary Compensation Table – Equity-Based Compensation” below.

(3)

The amounts reported represent annual bonuses under our annual cash bonus program based on achievement of company performance and individual performance during the applicable fiscal year. For more information on these bonuses, see description of the annual performance bonuses under the section titled “Narrative Disclosure to Summary Compensation Table – Annual Cash Bonuses” below.

(4)

The amounts reported for fiscal year 2023 reflect an employer matching contribution on the employee’s behalf under our 401(k) plan. The amount for Dr. Thomas also includes $18,102 related to reimbursement of certain legal fees incurred by Dr. Thomas in connection with the negotiation of his employment contract with the Company.

Narrative Disclosure to Summary Compensation Table

2023 Base Salaries

Our named executive officers each receive a base salary to compensate them for services rendered to our Company. The base salary payable to each named executive officer is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities. Base salaries may be adjusted from time to time to realign salaries with market levels after taking into account individual responsibilities, performance and experience.

2023 Cash Bonuses

For the fiscal year ended December 31, 2023, each of the named executive officers is eligible to earn an annual cash bonus determined by our board of directors in its sole discretion, based on achievement of certain individual and corporate performance goals, relating primarily to research and development goals, clinical milestones, business development and organizational goals. The target annual bonus for each of our named executive officers for the fiscal year ended December 31, 2023 was equal to the percentage of the executive’s respective annual base salary specified below:

With respect to the fiscal year ended December 31, 2023, our compensation committee approved a payout of cash bonuses in an amount of 111% of target for Dr. Thomas, 110% for Dr. Irish and 110% for Dr. Noonberg.

Equity-Based Compensation

Although we do not yet have a formal policy with respect to the grant of equity incentive awards to our executive officers, we believe that equity grants provide our executives with a strong link to our long-term performance, create an ownership culture and help to align the interests of our executives and our unitholders. We have granted our named executive officers profits interests under our 2019 Equity Incentive Plan (the “2019 Plan”). These profits interests are subject to time-based vesting conditions and are intended to be treated as “profits interests” for U.S. federal income tax purposes.

In connection with the Reorganization, profits interests were exchanged for shares of common stock and restricted common stock of Metagenomi, Inc.

For additional information regarding outstanding equity awards held by our named executive officers as of December 31, 2023, see the “Outstanding Equity Awards at 2023 Fiscal Year End” table below.

Perquisites/Personal Benefits

Perquisites or other personal benefits are not a significant component of our executive compensation program. Accordingly, we do not provide significant perquisites or other personal benefits to our executive officers, including our named executive officers.

401(k) Plan

We maintain a retirement savings plan (“401(k) plan”) that is intended to qualify for favorable tax treatment under Section 401(a) of the Code and contains a cash or deferred feature that is intended to meet the requirements of Section 401(k) of the Code. U.S. employees are generally eligible to participate in the 401(k) plan, subject to certain criteria. Participants may make pre-tax and certain after-tax (Roth) salary deferral contributions to the plan from their eligible earnings up to the statutorily prescribed annual limit under the Code. Participants who are 50 years of age or older may contribute additional amounts based on the statutory limits for catch-up contributions. Participant contributions are held in trust as required by law. We provide employer matching contributions of 100% on the first 5% of participant’s compensation contributed to our 401(k) plan.

Outstanding Equity Awards at 2023 Fiscal Year End

The following table lists all outstanding equity awards held by our named executive officers as of December 31, 2023.

(1)

All awards in this table consist of profits interests granted under the 2019 Plan that are intended to qualify as “profits interests” for U.S. tax purposes. They do not require the payment of an exercise price and will only obtain value as value of the underlying security rises above its grant date value, which is referred to as the “Threshold Amount.” The profits interests vest as follows: 25% vest on the one year anniversary of the vesting commencement date; and then the remaining 75% of the total profits interests vest in substantially equal amounts on each monthly anniversary of the vesting commencement date thereafter, until fully vested on the fourth anniversary of the vesting commencement date, based upon the participant’s continued service on each applicable vesting date.

(2)

Represents the fair market value of profits interests that were unvested as of December 31, 2023. The fair market value is based on the initial public offering price of $15.00 per share.

(3)

Awards held by Dr. Thomas are subject to certain acceleration provisions, as summarized below under “Employment Arrangements for Named Executive Officers.”

(4)

Awards held by Dr. Irish are subject to certain acceleration provisions, as summarized below under “Employment Arrangements for Named Executive Officers.”

Executive Compensation Arrangements

We have entered into offer letters and/or employment agreements with each of our named executive officers. Each offer letter or employment agreement provides for “at-will” employment and the compensation and benefits described below.

Employment Arrangements for Named Executive Officers

Brian C. Thomas

On March 20, 2023, the Company executed an executive employment agreement with Dr. Thomas (the “Thomas Employment Agreement”), for the position of Chief Executive Officer. The Thomas Employment Agreement provides for Dr. Thomas’s at-will employment. The base salary for Dr. Thomas was adjusted effective as of March 1, 2023 from $500,000 to $520,000 and to $650,000 effective March 1, 2024. Dr. Thomas is eligible to receive an annual bonus with an annual target amount of 50% of his annual base salary in 2023. Dr. Thomas’ annual target amount was increased to 60% of his base salary on March 1, 2024. Dr. Thomas is eligible to participate in the employee benefit plans available to our employees, subject to the terms of such plans.

Upon termination of Dr. Thomas’s employment by us without Cause or his resignation for Good Reason outside of the Change in Control Period, as such terms are defined in the Thomas Employment Agreement, subject to (i) Dr. Thomas resigning from all positions, (ii) signing a general release of claims in favor of the Company and (iii) not breaching any of the post-employment covenants and contractual obligations to the Company, Dr. Thomas shall be entitled to (A) a lump sum payment equal to nine (9) months of his then current base salary and pro-rated target bonus, based on the number of days he was employed in such year, divided by 365, payable within sixty (60) days following his termination, and (B) if Dr. Thomas was participating in the Company’s group health plan immediately prior to the termination date, a monthly cash payment for nine (9) months in an amount equal to Dr. Thomas’s and his eligible dependents monthly COBRA premium. In addition, and subject to the same conditions, upon a termination by us without Cause or his resignation for Good Reason during the Change in Control Period, he shall be entitled to (A) a lump sum payment equal to twelve (12) months of his then current base salary and pro-rated target bonus, based on the number of days he was employed in such year, divided by 365, payable within sixty (60) days following his termination, (B) if Dr. Thomas was participating in the Company’s group health plan immediately prior to the termination date, a monthly cash payment for twelve (12) months in an amount equal to Dr. Thomas’s and his eligible dependents monthly COBRA premium, and (C) full acceleration of his then outstanding and unvested equity awards.

Jian Irish

On January 19, 2021, the Company executed an offer letter with Dr. Irish (the “Irish Offer Letter”), for the position of Chief Operations Officer. The Irish Offer Letter provides for Dr. Irish’s at-will employment. Dr. Irish was promoted to President and Chief Operating Officer effective November 1, 2021. The base salary for Dr. Irish was adjusted effective March 1, 2023 from $450,000 to $468,000 and to $550,000 effective March 1, 2024. Dr. Irish is eligible to receive an annual bonus with an annual target amount of 45% of her annual salary in 2023. Dr. Irish’s annual target amount was increased to 50% of her base salary on March 1, 2024. Dr. Irish is eligible to participate in the employee benefit plans available to our employees, subject to the terms of such plans. The Irish Offer Letter provides for Dr. Irish’s eligibility to receive a grant of profits interests under the 2019 Plan, which will be subject to full acceleration upon the occurrence of a Change of Control (as defined in the Irish Offer Letter).

Upon a termination of Dr. Irish’s agreement by us without Cause, or her resignation for Good Reason, as such terms are defined in the Irish Offer Letter, she will be eligible to receive six (6) months of base salary, pro-rated annual bonus, and six (6) months vesting acceleration.

Dr. Irish entered into an Employee Invention Assignment and Confidentiality Agreement that contains various restrictive covenants, including non-solicitation provisions that apply during her employment and for a period of twelve months thereafter.

Sarah Noonberg

On January 30, 2023, the Company executed an offer letter with Dr. Noonberg (the “Noonberg Offer Letter”), for the position of Chief Medical Officer. The Noonberg Offer Letter provides for Dr. Noonberg’s at-will employment. Dr. Noonberg’s offer letter provides for a base salary of $420,000 which was increased to $475,000 effective March 1, 2024. Dr. Noonberg is eligible to receive an annual bonus with an annual target amount of 40% of her base salary. The target amount for 2023 was prorated given Dr. Noonberg’s employment start date in January 2023. Dr. Noonberg is eligible to participate in the employee benefit plans available to our employees, subject to the terms of such plans. The Noonberg Offer Letter provides for Dr. Noonberg’s eligibility to receive a grant of profits interests under the 2019 Plan.

Dr. Noonberg entered into an Employee Invention Assignment and Confidentiality Agreement that contains various restrictive covenants, including non-solicitation provisions that apply during her employment and for a period of twelve months thereafter.

Employee Benefit and Equity Compensation Plans

2019 Equity Incentive Plan

The 2019 Plan was initially approved by the board of managers of the Company in March 2019. The 2019 Plan provided for the grant of profits interests, restricted common units, options to purchase common units and restricted equity units to selected employees, officers, directors and consultants of the Company.

2024 Stock Option and Incentive Plan

The 2024 Plan replaced the 2019 Plan. The 2024 Plan provides flexibility to our compensation committee to use various equity-based incentive awards as compensation tools to motivate our workforce.

2024 Employee Stock Purchase Plan

The 2024 Employee Stock Purchase Plan (the “2024 ESPP”) includes two components: a Code Section 423 Component, or the 423 Component, and a non-Code Section 423 Component, or the Non-423 Component. The 423 Component is intended to qualify as an “employee stock purchase plan” under Section 423 of the Code. Under the Non-423 Component, which does not qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Code, options will be granted pursuant to rules adopted by the administrator of the ESPP designed to achieve tax or securities laws, or other objectives for eligible employees.

Senior Executive Cash Incentive Bonus Plan

Our Senior Executive Cash Incentive Bonus Plan, provides for cash bonus payments based upon Company and individual performance targets established by our compensation committee. The payment targets will be related to financial and operational measures or objectives with respect to our company, or the Corporate Performance Goals, as well as individual performance objectives.

Executive Severance and Change in Control Policy

Our board of directors adopted an Executive Severance and Change in Control Policy (the “Severance Policy”) in which our named executive officers, and certain other executives, participate. The benefits provided in the Severance Policy replaces any severance for which our executive officers may be eligible under their existing severance and change in control agreements; provided that, in the event an executive is party to an agreement or other arrangement that provides greater benefits than set forth in the Severance Policy, such executive will be entitled to receive the payments and benefits under such other agreement or arrangement and will not be eligible to receive any payments or benefits under the Severance Policy.

The Severance Policy provides that upon a termination due to death, “disability”, as defined in the Severance Policy, or “retirement” (as defined in the Severance Policy), an eligible executive will be entitled to receive, subject in the case of a termination due to retirement to the execution and delivery of an effective and irrevocable release of claims in favor of the Company and continued compliance with all applicable restrictive covenants, (i) a lump sum amount equal to the eligible executive’s annual target bonus in effect immediately prior to such termination, pro-rated for the number of days of service provided by the participant during the year of the termination, and (ii) for all outstanding and unvested equity awards of the company that are subject to time-based vesting held by the participant, full accelerated vesting of such awards; provided, that the performance conditions applicable to any outstanding and unvested equity awards subject to performance-based vesting will be deemed satisfied in accordance with the terms of the applicable award agreement.

The Severance Policy provides that upon a termination by us without “cause,” as defined in the Severance Policy, or a resignation by the executive for “good reason,” as defined in the Severance Policy, in each case outside of the change in control period (i.e., the period of one year after a “sale event,” as defined in the Severance Policy), an eligible executive will be entitled to receive, subject to the execution and delivery of an effective and irrevocable release of claims in favor of the company and continued compliance with all applicable restrictive covenants, (i) base salary continuation for 12 months for our Chief Executive Officer, 9 months for Tier 2 officers (which is determined by the plan administrator and includes the named executive officers other than the Chief Executive Officer) and 6 months for Tier 3 officers (which is determined by the Policy administrator but generally includes vice presidents and above) and (ii) an amount equal to the monthly employer contribution, based on the premiums as of the date of termination, that we would have made to provide health insurance for the applicable executive if he or she had remained employed by us for up to 12 months for our Chief Executive Officer, 9 months for Tier 2 officers and 6 months for Tier 3 officers. The payments under (i) and (ii) will be paid in substantially equal installments in accordance with our payroll practice over 12 months for our Chief Executive Officer, 9 months for Tier 2 officers and 6 months for Tier 3 officers. The Severance Policy will also provide that upon a (A)

termination by us without cause or (B) resignation for good reason, in each case within the change in control period, an eligible executive will be entitled to receive, in lieu of the payments and benefits above and subject to the execution and delivery of an effective and irrevocable release of claims in favor of the company and continued compliance with all applicable restrictive covenants, (I) a lump sum amount equal to the executive’s base salary for a period of 18 months for our Chief Executive Officer, 12 months for our Tier 2 officers and 10 months for our Tier 3 officers, (II) a lump sum payment equal to 100% of the executive’s annual target bonus in effect immediately prior to the date of termination, pro-rated for the number of days of service provided by the executive during the year of the termination, (III) a lump sum amount equal to the monthly employer contribution, based on the premiums as of the date of termination, that we would have made to provide health insurance for the applicable executive if he or she had remained employed by us for 18 months for our Chief Executive Officer, 12 months for our Tier 2 officers and 10 months for our Tier 3 officers, and (IV) for all outstanding and unvested equity awards of the company that are subject to time-based vesting held by the participant, full accelerated vesting of such awards; provided, that the performance conditions applicable to any outstanding and unvested equity awards subject to performance-based vesting will be deemed satisfied in accordance with the terms of the applicable award agreement.

The payments and benefits provided under the Severance Policy in connection with a change in control may not be eligible for a federal income tax deduction by us pursuant to Section 280G of the Code. These payments and benefits may also subject an eligible executive, including the named executive officers, to an excise tax under Section 4999 of the Code. If the payments or benefits payable in connection with a change in control would be subject to the excise tax imposed under Section 4999 of the Code, then those payments or benefits will be reduced if such reduction would result in a higher net after-tax benefit to the participant.

Clawback Policy

Our Board of Directors has adopted a policy that, in the event of a material restatement of our financial results, the Compensation Committee of our Board of Directors will review all incentive-based compensation that was paid to our executive officers on the basis of having met or exceeded specific performance targets for performance periods. If the bonuses paid pursuant to such incentive-based compensation would have been lower had the bonuses been calculated based on such restated results, the Company will seek to recoup the portion of the excess compensation that was received unless recovery would be impractical and either the third-party costs associated with recovery would exceed the amount to be recovered or recovery would cause a tax qualified plan to fail to remain tax qualified.

Limitations on Liability and Indemnification Agreements

As permitted by Delaware law, provisions in our amended and restated certificate of incorporation and amended and restated bylaws limit or eliminate the personal liability of directors for a breach of their fiduciary duty of care as a director. The duty of care generally requires that, when acting on behalf of the corporation, a director exercise an informed business judgment based on all material information reasonably available to him or her. Consequently, a director will not be personally liable to us or our stockholders for monetary damages or breach of fiduciary duty as a director, except for liability for:

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any breach of the director’s duty of loyalty to us or our stockholders;

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any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

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any act related to unlawful stock repurchases, redemptions or other distributions or payments of dividends; or

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any transaction from which the director derived an improper personal benefit.

These limitations of liability do not limit or eliminate our rights or any stockholder’s rights to seek non-monetary relief, such as injunctive relief or rescission. These provisions will not alter a director’s liability under other laws, such as the federal securities laws or other state or federal laws. Our amended and restated certificate of incorporation that were in effect immediately prior to the completion of the IPO also authorizes us to indemnify our officers, directors and other agents to the fullest extent permitted under Delaware law.

As permitted by Delaware law, our amended and restated bylaws provides that:

•

we will indemnify our directors, officers, employees and other agents to the fullest extent permitted by law;

•

we must advance expenses to our directors and officers, and may advance expenses to our employees and other agents, in connection with a legal proceeding to the fullest extent permitted by law; and

•

the rights provided in our amended and restated bylaws are not exclusive.

If Delaware law is amended to authorize corporate action further eliminating or limiting the personal liability of a director or officer, then the liability of our directors or officers will be so eliminated or limited to the fullest extent permitted by Delaware law, as so amended. Our amended and restated bylaws also 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 connection with their services to us, regardless of whether our amended and restated bylaws permit such indemnification. We have obtained such insurance.

In addition to the indemnification that is provided for in our amended and restated certificate of incorporation and amended and restated bylaws, we entered into separate indemnification agreements with each of our directors and executive officers, which may be broader than the specific indemnification provisions contained in the Delaware General Corporation Law. These indemnification agreements may require us, among other things, to indemnify our directors and executive officers for some expenses, including attorneys’ fees, expenses, judgments, fines and settlement amounts incurred by a director or executive officer in any action or proceeding arising out of his service as one of our directors or executive officers or any other company or enterprise to which the person provides services at our request. We believe that these provisions and agreements are necessary to attract and retain qualified individuals to serve as directors and executive officers.

This description of the indemnification provisions of our amended and restated certificate of incorporation, our amended and restated bylaws and our indemnification agreements is qualified in its entirety by reference to these documents, each of which is attached as an exhibit to this Annual Report on Form 10-K.

Insofar as indemnification for liabilities arising under the Securities Act, may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.

There is no pending litigation or proceeding naming any of our directors or officers as to which indemnification is being sought, nor are we aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer.

DIRECTOR COMPENSATION

2023 Director Compensation Tables

The following table presents the total compensation paid by the Company to non-employee members of our board of directors during the fiscal year ended December 31, 2023. Other than as set forth in the table and described more fully below, we did not pay any compensation, make any equity awards or non-equity awards to, or pay any other compensation to any of the members of our board of directors in 2023 for their services as members of the board of directors. Dr. Thomas, our Chief Executive Officer, did not receive any compensation from the Company for his service on our board of directors. See the section titled “Executive Compensation” for more information on the compensation paid to or earned by Dr. Thomas as an employee for the year ended December 31, 2023.

(1)

Dr. Dere and Dr. Stack each held 21,080 and 10,540 unvested profits interests granted under the 2019 Plan as of December 31, 2023. None of our other non-employee directors held any equity awards as of December 31, 2023.

(2)

We entered into an Independent Manager Offer Letter with Dr. Dere, pursuant to which he is eligible to receive cash compensation of $30,000 for each calendar year for his services to our board of managers.

(3)

Dr. Palani has resigned from our board of directors effective as of January 17, 2024.

(4)

The amounts reported in this column represent amounts paid to Dr. Dere in 2023 under his consulting agreement with the Company, which terminated in July 2023.

(5)

Dr. Stack resigned as a member of our board of directors, effective February 8, 2023.

Non-Employee Director Compensation Policy

Our non-employee director compensation policy was designed to enable us to attract and retain, on a long-term basis, highly qualified non-employee directors. Under the policy, our non-employee directors will be eligible to receive cash retainers (which will be payable quarterly in arrears and prorated for partial years of service) and equity awards as set forth below:

In addition, our policy provides that, upon initial election or appointment to our board of directors, each new non-employee director will be granted a one-time grant of a non-statutory stock option to purchase shares of our common stock equivalent to $600,000 in value on the date of such director’s election or appointment to the board of directors (the “Director Initial Grant”). The Director Initial Grant will vest over three years, with 33% vesting on the first anniversary of the grant date and the remaining 67% vesting in 24 equal monthly vesting thereafter, subject to the non-employee director’s continued services to the us. On the date of each annual meeting of stockholders of our company, each non-employee director who will continue as a non-employee director following such meeting will be granted an annual award of a non-statutory stock option to purchase shares of common stock equivalent to $300,000 in value (the “Director Annual Grant”). The Director Annual Grant will vest in full on the earlier of the one-year anniversary of the grant date or on the date of our next annual meeting of stockholders, subject to the non-employee director’s continued services to us. Such awards are subject to full acceleration vesting upon the sale of our company.

The aggregate amount of compensation, including both equity compensation and cash compensation, paid to any non-employee director for service as a non-employee director in a calendar year period will not exceed $1,000,000 in the first calendar year such individual becomes a non-employee director and $800,000 in any other calendar year.

We will reimburse all reasonable out-of-pocket expenses incurred by directors for their attendance at meetings of our board of directors or any committee thereof. Employee directors will receive no additional compensation for their service as a director.