ACHIEVE LIFE SCIENCES, INC.

During fiscal year 2024, our NEOs and their respective positions were as follows: Richard Stewart, Chief Executive Officer; John Bencich, former Chief Executive Officer; Cindy Jacobs, Ph.D., M.D., President and Chief Medical Officer; and Mark Oki, Chief Financial Officer (collectively referred to in this proxy statement s NEOs, or individually an NEO).

SEC rules require a discussion regarding 2024 executive compensation of our NEOs. Mr. Bencich resigned from his position as Chief Executive Officer on August 21, 2024 and Mr. Stewart was appointed to his position on August 21, 2024. Mr. Oki was appointed as Chief Financial Officer on December 5, 2024.

Summary Compensation Table

The following table sets forth information regarding the compensation of our NEOs for each of the fiscal years ended December 31, 2024 and 2023. The components of the compensation reported in the Summary Compensation Table are described below.

(1)

The dollar amounts in this column reflect the aggregate grant date fair value of performance-based restricted stock units granted during the fiscal year in accordance with FASB Accounting Standards Codification Topic 718 for stock-based compensation, based upon the probable outcome of the performance conditions as of the grant date. These amounts do not correspond to the actual cash value that will be recognized by each of the NEOs when received.

(2)

The dollar amounts in this column reflect the aggregate grant date fair value of stock option agreements granted during the fiscal year in accordance with FASB Accounting Standards Codification Topic 718 for stock-based compensation. These amounts do not correspond to the actual cash value that will be recognized by each of the NEOs when received. For a discussion of the assumptions and methodologies used to value the awards reported in this column, see note 11 to our audited consolidated financial statements, which are included in our 2024 Annual Report on Form 10-K.

(3)

The dollar amounts in this column reflect the aggregate non-equity incentive plan compensation earned by each NEO in 2024 and paid in early 2025. For more information, see “—2024 Bonuses” below.

(4)

Mr. Stewart’s salary was increased to $450,000 as of July 1, 2023 and increased to $615,000 as of August 21, 2024 in connection with his appointment as Chief Executive Officer.

(5)

Mr. Oki became an employee effective December 5, 2024 with an annual salary of $450,000.

(6)

On August 20, 2024, the Board determined that John Bencich will no longer serve as the Company's Chief Executive Officer, effective as of August 21, 2024. In connection with Mr. Bencich’s separation, we entered into a Separation Agreement with Mr. Bencich, pursuant to which he received, in exchange for releasing us from all claims, (i) a lump-sum cash severance payment equivalent to 18 months of his base salary of approximately $855,000, (ii) premium payments for continued healthcare coverage for 18 months, grossed up for applicable taxes, (iii) in lieu of notice of termination, a cash payment equal to 30 days of his base salary of approximately $47,500, (iv) accelerated vesting of the unvested portion of each time-based option grant awarded to Mr. Bencich that is equal to the number of shares that would have vested over 18 months from August 21, 2024 and (v) ability to retain his outstanding performance-based restricted stock units until the earlier of their expiration by their existing terms or the achievement of the milestones. Mr. Bencich continued to serve as an advisor to the Company until December 31, 2024, during which time his existing equity awards continued to vest and he received compensation for his services of $114,750.

The Compensation Philosophy and 2024 Executive Compensation Program

Our Compensation Committee has adopted a pay for performance philosophy. We do not have any formal policies for allocating compensation among salary, annual cash incentive awards and long-term incentive equity grants, short- and long-term compensation or among cash and non-cash compensation. Instead, our Compensation Committee and our Board of Directors exercise judgment to establish a total compensation program for each NEO that is a mix of current, short- and long-term incentive compensation, and cash and non-cash compensation, that our Compensation Committee and Board of Directors believe is appropriate to achieve the goals of our executive compensation program and our corporate objectives. In setting the elements of compensation, our Compensation Committee considers prior compensation paid and amounts realizable from prior stock-based awards, as well as other benefits provided by the Company. Our 2024 executive compensation program was designed to motivate our executive officers to achieve key business goals and objectives by linking their performance and the Company’s performance to the compensation our executive officers receive. As such, we intend for a significant portion of the total compensation of our executive officers to be based on measures that support our Company goals and objectives over both the long and short term. To strengthen this link, we define clear and measurable quantitative objectives that are designed to foster achievement of results and returns to stockholders. Our Compensation Committee undertakes to maintain an overall compensation structure designed to attract, retain and motivate management and employees by providing appropriate incentives based on individual contribution and performance and avoiding undue emphasis on short-term market value.

Our Compensation Committee engages the services of Aon to assist with ensuring that the goals of the compensation program are met and is consistent with the compensation of companies that are similar in size, stage of development and complexity as our Company.

Each compensation element is discussed in more detail below and in the 2024 Summary Compensation Table and 2024 Outstanding Equity Awards at Fiscal Year End Table below.

Annual Base Salary

Base salaries for executive officers are reviewed annually in connection with our annual performance review process, and adjusted from time to time to realign salaries with market levels for similar positions at peer companies after taking into account individual responsibilities, performance, experience and other factors. Our Compensation Committee reviews competitive market data prepared by Aon when determining base salaries of its NEOs. Base salaries are targeted to approximately the 50 th percentile range of comparable peer companies in aggregate. Salary increases are recommended to, and approved at the discretion of, the Board of Directors. The following table shows the annual base salaries for 2023 and 2024 for our named executive officers:

(1)

Mr. Stewart’s salary was increased from $400,000 to $450,000 as of July 1, 2023 and increased to $615,000 as of August 21, 2024 in connection with his appointment as Chief Executive Officer.

(2)

Mr. Oki became an employee effective December 5, 2024 with an annual salary of $450,000.

2024 Equity Awards

Equity awards are granted to executive officers at the discretion of the Compensation Committee. Our Compensation Committee reviews competitive market data prepared by Aon in connection with its grant of long-term equity incentive awards to the named executive officers at the market 50 th to 75 th percentile which is a higher target than our cash compensation to provide economic value as we are a clinical development-stage specialty pharmaceutical company and have not generated revenue to date. A blended approach of options and Performance-Based Restricted Stock Unit, or PSUs, were awarded to attract and retain highly skilled employees and provide long term incentive and performance-based goals which we believe are aligned with motivating our NEOs to enhance stockholder value. Our Compensation Committee believes that this mix of stock options and PSUs is appropriate given the Company's stage of development and the Company's pay for performance philosophy.

In January 2024, the Compensation Committee granted options to purchase 75,000 shares of common stock to John Bencich, options to purchase 60,000 shares of common stock to Richard Stewart, and options to purchase 36,000 shares of common stock to Cindy Jacobs. The stock options have an exercise price of $4.55 per share, which was the closing price of our stock on the date of grant, and vested as to one-third of the total on January 22, 2025, and thereafter vest in equal monthly installments over 24 months. Mr. Bencich’s stock options expired on March 31, 2025. At the same time, the Compensation Committee also granted 175,000 performance-based restricted stock units, or PSUs, to John Bencich, 140,000 PSUs to Richard Stewart and 84,000 PSUs to Cindy Jacobs. The PSUs vest as to 100% of the total amount on the achievement of acceptance of the New Drug Application, or NDA, for cytisinicline with the U.S. Food and Drug Administration, or FDA, in a Day-74 Letter; or 100% upon either marketing approval of cytisinicline by the FDA or acquisition of the Company occurring by a certain time. The Compensation Committee determined these goals were rigorous, but achievable, and as the NDA submission and acceptance is our next pivotal stage for the advancement of cytisinicline, will provide value to our stockholders and reflect our commitment to move cytisinicline to commercialization.

In December 2024, the Compensation Committee granted an option to purchase 72,000 shares of common stock to Mark Oki upon joining the Company which options had an exercise price of $4.52 per share, which was the closing price of our stock on the date of grant. This award vests as to one-third of the total on December 5, 2025, and thereafter vests in equal monthly installments over 24 months. At the same time, the Compensation Committee also granted 168,000 PSUs to Mark Oki with the same achievement vesting conditions set forth above with respect to the other NEOs.

2024 Bonuses

Annual cash bonuses for our executive officers are based on the achievement of corporate performance objectives that our Compensation Committee determined were rigorous, but achievable. In 2024, these goals included the achievement of clinical and CMC development goals, financial milestones and stretch goals to accelerate the cytisinicline development program. In January 2025, our Compensation Committee determined that approximately 150% of our 2024 corporate performance objectives were achieved and determined that 150% of each executive officer’s target bonus should be awarded based on the advancement of our cytisinicline program, including: (1) progress toward the certain milestones to file the NDA in the second quarter of 2025; (2) the initiation and enrollment completion of ORCA-OL clinical trial; (3) the furthering of the e-cigarette cessation program, including receipt of Breakthrough Therapy Designation and a successful, as defined, End of Phase 2 Meeting with the FDA; (4) furthering our CMC objectives; and (5) obtaining sufficient capital to achieve the operational goals.

With respect to the payment of these bonuses, Mr. Stewart’s target bonus was equal to 50% of his annual base salary of $615,000 (increased from $450,000, effective August 21, 2024) and he was awarded $382,253, and Cindy Jacobs’ target bonus was equal to 40% of her annual base salary of $487,000 and she was awarded $290,800. Mr. Oki commenced employment in December 2024 and was not eligible to participate in the 2024 bonus plan.

Outstanding Equity Awards at Fiscal Year-End

The following table provides information regarding the outstanding equity awards held by the NEOs as of December 31, 2024.

(1)

These stock options were granted under the 2017 Equity Incentive Plan and were fully vested on July 26, 2022.

(2)

These stock options were granted under the 2018 Equity Incentive Plan and were fully vested on September 20, 2022.

(3)

These stock options were granted under the 2018 Equity Incentive Plan and were fully vested on January 29, 2023.

(4)

These stock options were granted under the 2018 Equity Incentive Plan and vested on June 12, 2021.

(5)

These stock options were granted under the 2018 Equity Incentive Plan and were fully vested on January 28, 2024.

(6)

These stock options were granted under the 2018 Equity Incentive Plan and were fully vested on June 30, 2023.

(7)

These stock options were granted under the 2018 Equity Incentive Plan and vested as to 25% on January 26, 2022 and then vest monthly over a 36-month period.

(8)

These stock options were granted under the 2018 Equity Incentive Plan and vested as to one-third on January 3, 2023 and then vest monthly over a 24-month period.

(9)

These stock options were granted under the 2018 Equity Incentive Plan and vested as to one-third on January 25, 2024 and then vest monthly over a 24-month period.

(10)

These stock options were granted under the 2018 Equity Incentive Plan and vested as to one-third on January 22, 2025 and then vest monthly over a 24-month period.

(11)

These PSUs were granted under the 2018 Equity Incentive Plan and vest as to 50% upon the filing of a NDA for cytisinicline with the FDA, by a certain time, and 50% upon FDA acceptance of the NDA within 60 days of submission; or 100% upon either marketing approval of cytisinicline by the FDA or an acquisition of us occurring by a certain time.

(12)

These PSUs were granted under the 2018 Equity Incentive Plan and vest as to 100% upon the acceptance of a NDA for cytisinicline by the FDA in a Day-74 Letter; or 100% upon either marketing approval of cytisinicline by FDA or acquisition of us occurring by a certain time.

(13)

These stock options were granted under the 2010 Performance Incentive Plan and were fully vested on January 1, 2019.

(14)

These stock options were granted under the 2017 Equity Incentive Plan and were fully vested on August 15, 2021.

(15)

These stock options were granted under the 2024 Equity Inducement Plan and vest as to one-third on December 5, 2025 and then vest monthly over a 24-month period.

(16)

These PSUs were granted under the 2024 Equity Inducement Plan and vest as to 100% upon the acceptance of a NDA for cytisinicline by the FDA in a Day-74 Letter; or 100% upon either marketing approval of cytisinicline by FDA or acquisition of us occurring by a certain time.

(17)

These stock options were granted under the 2018 Equity Incentive Plan, and pursuant to the Separation Agreement, the vesting of unvested shares was accelerated such that the number of shares that would have vested if Mr. Bencich had continued employment for the 18 months following August 21, 2024. Additionally, during his continued service as an advisor, the shares subject to his existing stock options continued to vest until December 31, 2024.

(18)

Pursuant to the Separation Agreement with Mr. Bencich he retains these outstanding performance-based restricted stock units until the earlier of their expiration by their existing terms or the achievement of the milestones.

Pay versus Performance

As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following disclosure regarding executive compensation for our principal executive officers, or PEOs and our other NEOs, or Non-PEO NEOs and Company performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown. The Compensation Committee undertakes to maintain an overall compensation structure designed to attract, retain and motivate management and employees by providing appropriate incentives based on individual contribution and performance and avoiding undue emphasis on short-term market value. The amounts shown for “Compensation Actually Paid” have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs; these amounts reflect the Summary Compensation Table total with certain adjustments as described in the following table and footnotes.

(1)

Richard Stewart is our Chief Executive Officer and has been our PEO since August 2024; he was a non-PEO NEO in 2022, 2023 and 2024 (until August).

(2)

John Bencich was our PEO in 2022, 2023 and 2024 (until August); he was our Chief Executive Officer from September 2020 to August 2024.

(3)

Cindy Jacobs was a non-PEO NEO in 2022, 2023 and 2024. Mark Oki has been a non-PEO NEO since December 2024.

(4)

Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards and Option Awards columns are the totals from the Stock Awards and Option Awards columns set forth in the Summary Compensation Table.

(5)

Represents the cumulative total return on $100 invested in the Company’s common stock as of the last day of public trading of the Company’s common stock in fiscal year 2021 through the last day of public trading of the Company’s common stock in the applicable fiscal year for which the cumulative total return is reported.

(1)

Richard Stewart is our Chief Executive Officer and has been our PEO since August 2024; he was a non-PEO NEO in 2022, 2023 and 2024 (until August).

(2)

John Bencich was our PEO in 2022, 2023 and 2024 (until August); he was our Chief Executive Officer from September 2020 to August 2024.

The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables for each of Richard Stewart and John Bencich, respectively:

Pay Versus Performance Table

The illustrations below provide a graphical description of compensation actually paid (as calculated in accordance with the SEC rules) and the following measures: (i) ourcumulative total shareholder return, or TSR; and (ii) ournet income/(loss).

Compensation Actually Paid (Cap) and TSR

As shown in the following graph, the compensation actually paid or CAP, to each of Mr. Stewart and Mr. Bencich and the average amount of compensation actually paid to our Non – PEO NEOs during the periods presented are negatively correlated. We do utilize several performance measures to align executive compensation with our performance, but those tend not to be financial performance measures, such as TSR. For example, part of the compensation our named executive officers are eligible to receive consists of annual performance-based cash bonuses which are designed to provide appropriate incentives to our executives to achieve defined annual corporate goals and to reward our executives for individual achievement towards these goals. Additionally, we view stock options, which are an integral part of our executive compensation program, as related to company performance although not directly tied to TSR, because they provide value only if the market price of our common stock increases, and if the executive officer continues in our employment over the vesting period. These stock option awards strongly align our executive officers’ interests with those of our stockholders by providing a continuing financial incentive to maximize long-term value for our stockholders and by encouraging our executive officers to continue in our employment for the long-term.

Compensation Actually Paid and Net Income/(Loss)

Because we are not a commercial-stage company, we did not have any revenue during the periods presented and our company has not historically looked to net income (loss) as a performance measure for our executive compensation program.

Potential Payments Upon Termination/Change of Control

Change of Control Under Our Equity Compensation Plans

The following discussion sets forth the change of control provisions provided for in our various equity compensation plans.

2010 Performance Incentive Plan

Under the 2010 Performance Incentive Plan, the administrator has the discretion to provide in each award agreement the terms and conditions with respect to a change of control that relate to the vesting of an award and the assumption of an award or issuance of comparable securities under an incentive program. If the terms of an option agreement provide for accelerated vesting in the event of a change of control, or to the extent that an option is vested and not yet exercised, the administrator may provide for the purchase or exchange of each option for an amount of cash or other property. Outstanding options shall terminate and cease to be exercisable upon a change of control except to the extent that the options are assumed by the successor entity (or parent of the successor entity) pursuant to the terms of the change of control transaction.

2017 Equity Incentive Plan

Under the 2017 Equity Incentive Plan, or the 2017 Plan, unless otherwise determined by the compensation committee, all outstanding awards will be subject to the agreement governing the change of control transaction. Such agreement need not treat all such awards in an identical manner, and it will provide for one or more of the following with respect to each award: the continuation of the award, the assumption of the award, the substitution of the award, the full or partial acceleration of the award, the settlement of the award in cash, equivalents or securities of the successor entity (or its parent, if any) or the cancellation of the award in exchange for no consideration. In the event the successor corporation in the change of control transaction refuses to either assume, convert, replace or substitute awards, then the compensation committee will notify the award holder in writing or electronically that such award will be exercisable for a period of time determined by the compensation committee (in its sole discretion) and that the award will terminate upon expiration of such period. Upon the effectiveness of our 2018 Equity Incentive Plan, we ceased granting equity awards under our 2017 Plan.

In addition, in the event of a change of control, the vesting of all awards granted to our non-employee directors shall accelerate and any stock option shall become exercisable (as applicable) in full as of the time of consummation of such change in control transaction.

2018 Equity Incentive Plan

Under the 2018 Equity Incentive Plan, unless otherwise determined by the compensation committee, all outstanding awards will be subject to the agreement governing the change of control transaction. Such agreement need not treat all such awards in an identical manner, and it will provide for one or more of the following with respect to each award: the continuation of the award, the assumption of the award, the substitution of the award, the full or partial acceleration of the award, the settlement of the award in cash, equivalents or securities of the successor entity (or its parent, if any) or the cancellation of the award in exchange for no consideration. In the event the successor corporation in the change of control transaction refuses to either assume, convert, replace or substitute awards, then the compensation committee will notify the award holder in writing or electronically that such award will be exercisable for a period of time determined by the compensation committee (in its sole discretion) and that the award will terminate upon expiration of such period.

In addition, in the event of a change of control, the vesting of all awards granted to our non-employee directors shall accelerate and any stock options shall become exercisable in full as of the time of consummation of such change in control transaction.

2024 Equity Inducement Plan

Under the 2024 Equity Inducement Plan, unless otherwise determined by the compensation committee, all outstanding awards will be subject to the agreement governing such change of control transaction. Such agreement need not treat all such awards in an identical manner, and it will provide for one or more of the following with respect to each award: the continuation of the award, the assumption of the award, the substitution of the award, the full or partial acceleration of the award, the settlement of the award in cash, equivalents or securities of the successor entity (or its parent, if any) or the cancellation of the award in exchange for no consideration. In the event the successor corporation in the change of control transaction refuses to either assume, convert, replace or substitute awards, then the compensation committee will notify the award holder in writing or electronically that such award will be exercisable for a period of time determined by the compensation committee (in its sole discretion) and that the award will terminate upon expiration of such period.

Termination and Change of Control Provisions Under Employment Agreements

During the year ended December 31, 2024, we had at-will employment agreements in place with each of our NEOs that provided for compensation upon the termination of their employment under certain circumstances, as described below.

Stewart Agreement

Our agreement (through a United Kingdom subsidiary) with Richard Stewart, referred to as the Stewart Agreement, provides Mr. Stewart with termination benefits in the event of a Qualifying Termination, which is a termination without cause or for good reason (each as defined in the Stewart Agreement), provided that, in the case of termination for good reason, Mr. Stewart has provided us within 60 days of becoming aware of conditions giving rise to a good reason written notice and an opportunity to cure such breach within 30 days of being served the notice.

The Stewart Agreement provides that if a Qualifying Termination occurs, we will be obligated to pay Mr. Stewart a lump sum payment equal to 18 months of his then-current base salary and continue paying his monthly health insurance premiums for a discretionary period to be decided by us. Notwithstanding the terms of any of our equity compensation plans or any agreement in connection with such plans, if there is a Qualifying Termination, each of Mr. Stewart’s then outstanding equity awards, including awards that would otherwise vest only upon satisfaction of performance criteria, shall accelerate and become vested and exercisable as to an additional 18 months as if Mr. Stewart had continued in employment for 18 months following his Qualifying Termination.

The Stewart Agreement provides for specific termination benefits upon a Qualifying Termination which occurs within 12 months after the Company is subject to a corporate transaction, or Corporate Qualifying Termination. Upon such a Corporate Qualifying Termination, we will be obligated to pay Mr. Stewart a lump sum equal to (i) his monthly salary at the rate in effect immediately prior to the termination multiplied by 24, plus (ii) 100% of his target annual bonus for the year during which the termination occurs. In addition, we will be obligated to continue payment of his health insurance premiums for a discretionary period to be decided by us, subject to certain limitations. Notwithstanding the terms of any of our equity compensation plans or any agreement in connection with such plans, upon a Corporate Qualifying Termination, each of Mr. Stewart’s then outstanding equity awards, including awards that would otherwise vest only upon satisfaction of performance criteria, shall accelerate and become vested and exercisable as to 100% of the then unvested shares subject to the equity award, effective as of Mr. Stewart’s separation from service.

All termination benefits in the event of a Qualifying Termination or a Corporate Qualifying Termination are subject to Mr. Stewart’s execution, delivery and non-revocation of a general release of all litigation and other claims against us and our affiliates.

Jacobs Agreement

Our agreement with Cindy Jacobs, referred to as the Jacobs Agreement, provides Dr. Jacobs with termination benefits in the event of an Involuntary Termination, which is a termination without cause, a resignation for good reason or a termination for disability (each as defined in the Jacobs Agreement), provided that, in the case of termination for good reason, Dr. Jacobs has provided us with 30 days’ advance written notice and an opportunity to cure such breach during such 30-day period.

The Jacobs Agreement provides that if an Involuntary Termination occurs, we will be obligated to pay Dr. Jacobs a lump sum payment equal to 12 months of her then-current base salary. In addition, if Dr. Jacobs elects to continue her and her dependents’ health insurance coverage under COBRA, we must pay up to 12 months of Dr. Jacobs’ monthly premium under COBRA. Notwithstanding the terms of any of our equity compensation plans or any agreement in connection with such plans, if there is an Involuntary Termination, then the time-based vesting restrictions, if any, will immediately lapse on an additional number of shares under all of Dr. Jacobs’ outstanding compensatory equity awards, which includes outstanding stock options granted to Dr. Jacobs under our equity compensation plans, that would have time-vested if Dr. Jacobs had continued in employment for 12 months following her Involuntary Termination.

The Jacobs Agreement provides for specific termination benefits if an Involuntary Termination occurs during the period beginning three months before and ending 12 months after a change in control or if such Involuntary Termination is required by the merger agreement, purchase agreement or other instrument relating to such change in control, or such Involuntary Termination is made at the express request of the other party or parties to the transaction constituting such change in control, each of which events is referred to as a Change in Control Termination. Upon such a Change in Control Termination, we will be obligated to pay Dr. Jacobs 24 months of her then-current base salary, plus a sum equal to 24 months of her average monthly bonus earnings, where such average is calculated over the 24-month period immediately preceding Dr. Jacobs’ separation from services and based on Dr. Jacobs’ bonuses paid in such 24-month period. In addition, our payment of monthly COBRA premiums as described above will be for up to 24 months instead of up to 12 months. Notwithstanding the terms of any of our equity compensation plans or any agreement in connection with such plans, upon a Change in Control Termination, all vesting restrictions, if any, including performance vesting restrictions, will immediately lapse on all of Dr. Jacobs’ compensatory equity effective as of her separation from service.

All termination benefits in the event of an Involuntary Termination or Change in Control Termination are subject to Dr. Jacobs’ execution, delivery and non-revocation of a general release of all litigation and other claims against us and our affiliates.

Oki Agreement

Our agreement with Mark Oki, referred to as the Oki Agreement, provides Mr. Oki with termination benefits in the event of an Involuntary Termination, which is a termination without cause, a resignation for good reason or a termination for disability (each as defined in the Oki Agreement), provided that, in the case of termination for good reason, Mr. Oki has provided us with 30 days’ advance written notice and an opportunity to cure such breach during such 30-day period. We may terminate the Oki Agreement with or without cause by giving Mr. Oki 30 days’ advance written notice, or a cash payment equivalent to 30 calendar days of his then-current base salary in lieu of providing such notice.

The Oki Agreement provides that if an Involuntary Termination occurs, we will be obligated to pay Mr. Oki a lump sum payment equal to 12 months of his then-current base salary. In addition, if Mr. Oki elects to continue his and his dependents’ health insurance coverage under COBRA, we must pay in a lump sum payment the number of months of Mr. Oki’s monthly premium under COBRA, that is equal to the 12 months. Notwithstanding the terms of any of our equity compensation plans or any agreement in connection with such plans, if there is an Involuntary Termination, then the time-based vesting restrictions, if any, will immediately lapse on an additional number of shares under all of Mr. Oki’s outstanding compensatory equity awards, which includes outstanding stock options granted to Mr. Oki under our equity compensation plans, that would have time-vested if Mr. Oki had continued in employment for 12 months following his Involuntary Termination.

The Oki Agreement provides for additional termination benefits if an Involuntary Termination occurs during the period beginning three months before and ending 12 months after a change in control or if such Involuntary Termination is required by the merger agreement, purchase agreement or other instrument relating to such change in control, or such Involuntary Termination is made at the express request of the other party or parties to the transaction constituting such change in control, each of which events is referred to as a Change in Control Termination. Upon such a Change in Control Termination, we will be obligated to pay Mr. Oki 24 months of his then-current base salary, plus a sum equal to 24 months of his average monthly bonus earnings, where such average is calculated over the 24-month period immediately preceding Mr. Oki’s separation from services and based on Mr. Oki’s bonuses paid in such 24-month period. In addition, our payment of monthly COBRA premiums as described above will be for up to 24 months instead of up to 12 months. Notwithstanding the terms of any of our equity compensation plans or any agreement in connection with such plans, upon a Change in Control Termination, all vesting restrictions, if any, including performance vesting restrictions, will immediately lapse on all of Mr. Oki’s compensatory equity effective as of his separation from service.

All termination benefits in the event of an Involuntary Termination or Change in Control Termination are subject to Mr. Oki’s execution, delivery and non-revocation of a general release of all litigation and other claims against us and our affiliates.