Longeveron Inc

The Summary Compensation Table below summarizes the compensation of the executive officers named therein (our “named executive officers” or “NEOs”) during 2023 and 2022. Our NEOs for 2023 were as follows:

The principal elements of our executive compensation program are base salary, discretionary annual performance bonuses, and discretionary equity awards. Our NEOs are also entitled to participate in employee benefit plans and programs that we offer to our other employees, as described below. We view these components of compensation as related but distinct. Although our Compensation Committee does review total compensation, we do not believe that significant compensation derived from one component of compensation should negate or offset compensation from other components. Our executive compensation program is designed to attract, motivate, and retain talented and dedicated executive officers, who are critical to our success. The following highlights our approach to executive compensation:

*Competitive Positioning:*We seek to establish the overall compensation of our executive officers at levels that we believe are roughly comparable with the average levels of compensation of executives at other clinical state biotechnology companies of similar size.

*Annual Bonus Compensation Tied to Performance:*Our executive compensation program has three primary components: base salary; discretionary annual bonus compensation; and discretionary equity compensation; and other benefits and perquisites. Among these components, bonus compensation is tied in whole or in part to individual performance, company performance, or as otherwise determined appropriate by the Compensation Committee.

*Equity-Based Incentives align our NEOs with our Stockholders:*Our equity-based incentive awards are designed to align our interests and the interests of our stockholders with those of our employees and consultants, including our named executive officers. The Compensation Committee of the board of directors is responsible for approving equity grants.

Base Salary Compensation. We pay our NEOs a base salary to compensate them for the satisfactory performance of services rendered to us. The base salary payable to each NEO is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities. Base salaries for our NEOs have generally been set at lower levels than would normally be deemed necessary to attract and retain individuals with this level of talent. For more information, seeSummary Compensation Table — 2023 and 2022 on page 100 of this Form 10-K.

Bonus Compensation. In order to retain and motivate our named executive officers and other executives, from time to time the Board upon recommendation of our Chief Executive Officer, may approve bonuses for our NEOS based on individual performance, company performance, or as other determined based on the Committee’s discretion. For more information, seeSummary Compensation Table — 2023 and 2022 on page 100 of this Form 10-K.

**Equity Compensation.**We believe that for growth companies in the biotechnology sector, such as Longeveron, equity awards are a significant compensation-related motivator in attracting and retaining executive-level employees. Accordingly, we have provided our named executive officers and other executives with long-term equity incentive awards that incentivize those individuals to stay with us for long periods of time, which in turn should provide us with greater stability over such periods than we would experience without such awards.

Other Elements of Compensation

*Perquisites, Health, Welfare and Retirement Benefits.*Our named executive officers are eligible to participate in our employee benefit plans, including our medical, dental, vision, group life, disability and accidental death and dismemberment insurance plans, in each case on generally the same basis as all of our other employees. We provide a 401(k) Plan to our employees, including our current named executive officers, as discussed in the section below titled “— 401(k) Plan.”

*401(k) Plan.*We maintain a defined contribution employee retirement plan, or 401(k) Plan, for our employees. Our named executive officers are eligible to participate in the 401(k) Plan on the same basis as our other employees, if they are considered an employee and not a consultant. The 401(k) Plan is intended to qualify as a tax-qualified plan under Section 401(k) of the Internal Revenue Code. The 401(k) Plan provides that each participant may make pre-tax deferrals from his or her compensation up to the statutory limit, which is $22,500 for calendar year 2023, and other testing limits. Participants that are 50 years or older can also make “catch-up” contributions, which in calendar year 2023 may be up to an additional $7,500 above the statutory limit. The 401(k) Plan provides for discretionary matching and profit-sharing contributions, we currently provide 5% match to the 401(k) Plan. Participant contributions are held and invested, pursuant to the participant’s instructions, by the plan’s trustee.

*Nonqualified Deferred Compensation.*We do not maintain nonqualified defined contribution plans or other nonqualified deferred compensation plans. Our board of directors may elect to provide our officers and other employees with non-qualified defined contribution or other nonqualified deferred compensation benefits in the future if it determines that doing so is in our best interests.

Summary Compensation Table — 2023 and 2022

Outstanding Equity Awards at Fiscal Year End 2023 Table

The following table sets forth information with respect to outstanding equity awards for each of our NEOs as of December 31, 2023. As a result of Dr. Min’s and Mr. Clavijo’s separation from service in 2023 as discussed below, neither NEO had any equity awards outstanding as of December 31, 2023.

Employment Agreements/Letters with our NEOs

Mr. Wa’el Hashad. Pursuant to the terms of the letter agreement (“Agreement”) setting forth Mr. Hashad’s compensation as Chief Executive Officer of the Company starting on March 1, 2023, Mr. Hashad receives an annual salary of $530,000 and will be eligible for an annual cash bonus of up to seventy percent (70%) of his base salary, eighty percent (80%) of which will be based on the achievement of pre-established performance criteria and twenty percent (20%) of which will be discretionary. Mr. Hashad received a signing bonus of 50,000 Restricted Stock Units, which vested in quarterly installments on each of April 1, 2023, July 1, 2023, September 1, 2023, and December 31, 2023. Mr. Hashad will also be eligible to receive annual long-term equity incentive awards through 2026 consisting of 50,000 shares of time-based vesting stock options and up to 125,000 of performance share units, in accordance with the terms of the Longeveron 2021 Incentive Award Plan.

In the event of the Company’s termination of Mr. Hashad’s employment without Cause, as defined therein, he will be entitled to receive all unpaid but accrued bonuses for the prior year, salary continuation for 12 months, COBRA coverage for 18 months, and bonus payment prorated based on date of termination. Mr. Hashad also entered into a Confidentiality and Nondisclosure Agreement simultaneously with this Agreement which imposed certain confidentiality, non-competition, non-disclosure obligations on Mr. Hashad.

Ms. Lisa Locklear. On July 14, 2023, the Company entered into a letter agreement (“Agreement”) with Ms. Lisa Locklear and hired her as Chief Financial Officer and Executive Vice President of the Company. Ms. Locklear receives an annual salary of $400,000 and is eligible to receivean annual cash bonus of up to forty-five percent (45%) of her base salary, eighty percent (80%) of which will be based on the achievement of pre-established performance criteria and twenty percent (20%) of which will be based on pre-established individual performance criteria. Ms. Locklear received a signing bonus of 40,000 Restricted Stock Units, which shall vest in quarterly installments on each of October 1, 2023, January 1, 2024, April 1, 2024, and July 1, 2024. Ms. Locklear will also be eligible to receive up to 100,000 of performance share units annually, eighty percent (80%) of which will be based on the achievement of pre-established performance criteria and twenty percent (20%) of which will be pre-established individual performance criteria.

Upon termination of employment, Ms. Locklear shall be entitled to receive accrued salary and benefits, unless terminated without Cause (as defined therein) or by Ms. Locklear for Good Reason (as defined therein), in which event, in addition to accrued amounts, Ms. Locklear shall also be entitled to receive earned but unpaid equity bonus amounts, annual prorated cash bonus payment at target level, plus severance and reimbursement of COBRA premiums equal to three months of base salary and premiums for each full year worked at the Company (not less than six months in any case), in all cases only if a release is executed and not revoked. Ms. Locklear also entered into a Confidentiality and Nondisclosure Agreement simultaneously with this Agreement that imposed certain confidentiality, non-competition, non-disclosure obligations on her.

Mr. Paul Lehr. The Company has an employment agreement with Mr. Lehr, entered into on May 3, 2022 with an initial term of one year, with automatic one-year renewals thereafter, unless either party terminates the Agreement by providing 60 days written notice prior to the end of the then current term. The Company may terminate the Agreement for Cause (as defined therein), and Mr. Lehr may terminate the Agreement for a Good Reason (as defined therein). Under the terms of the Agreement, Mr. Lehr receives an annual salary of $390,000 and is eligible for an annual bonus based on the achievement of pre-established metrics agreed by Mr. Lehr and the CEO and/or the Compensation Committee. Mr. Lehr is also eligible to participate in the Company’s 2021 Incentive Award Plan.

Upon termination of employment, Mr. Lehr shall be entitled to receive accrued salary and benefits, unless terminated without Cause (as defined therein) or by Mr. Lehr for Good Reason (as defined therein), in which event, in addition to accrued amounts, Mr. Lehr shall also be entitled to receive earned but unpaid equity bonus amounts, annual prorated cash bonus payment at target level, severance equal to three months of base salary for each full year worked at the Company (not less than six months in any case), accelerated vesting of any unvested equity award, and 18 months of COBRA coverage, subject to execution and non-revocation of a standard release. The Agreement subjects Mr. Lehr to certain restrictive covenants which prohibits him from soliciting employees of the Company or working for businesses in competition with the Company for 24 months after the date of his employment termination with the Company. The Agreement also imposes certain confidentiality obligations on Mr. Lehr.

Separation Severance Agreements/Letters with our Former NEOs

Dr. Christoper Min. On March 23, 2023, the Company entered into a Separation Agreement and General Release (“Separation Agreement”) with Dr. Christoper Min that terminated his employment with the Company, effective March 31, 2023. Dr. Min’s severance package under the Separation Agreement included (i) payment of an amount equal to $112,000, (ii) immediate acceleration and vesting of 40,000 Restricted Stock Units previously granted to him, and (iii) the cost of relinquishing his lease in Miami in the amount of $5,800. Additionally, Dr. Min agreed to release the Company from all past, present, and future claims related to the Separation Agreement, his benefits, wages, employment and departure, except for a few customary exceptions such as enforcement of the Separation Agreement or reporting violations to applicable federal agencies. Dr. Min was given 21 days to review the terms of the Separation Agreement and seven days to revoke his acceptance after entering into the Separation Agreement. The Separation Agreement also included a “No Re-Employment” clause pursuant to which Dr. Min is prohibited from knowingly re-applying for employment with the Company. Dr. Min is also obligated to maintain the confidentiality of the Company’s trade secret and Confidential Information (as defined in the Separation Agreement). Dr. Min subsequently entered into a consulting agreement where he was paid an hourly cash consulting fee until his services were no longer required by the Company. Dr. Min was no longer entitled to any benefits afforded by the Company to full or part-time employees and remained bound by Confidentiality/Nondisclosure and any other continuing obligations under terms of his employment agreement with the Company.

Mr. James Clavijo. On April 19, 2023, the Company entered into a Separation Agreement and General Release (“Separation Agreement”) with Mr. James Clavijo terminating his employment with the Company, effective June 9, 2023. As part of Mr. Clavijo’s severance package under the Separation Agreement, he received (i) severance amount equal to $275,000 was paid, (ii) accelerated vesting of 6,690 Restricted Stock Units previously granted to him, and (iii) three months payment for COBRA coverage. Additionally, Mr. Clavijo agreed to release the Company from all past, present, and future claims related to his employment and departure from the Company, except for a few customary exceptions such as the enforcement of the Separation Agreement or reporting any violation to applicable federal agencies. He was given 21 days to review the terms of the Separation Agreement and seven days to revoke his acceptance after entering into the Separation Agreement. The Separation Agreement also included a “No-Re-Employment” clause pursuant to which Mr. Clavijo is prohibited from knowingly re-applying for employment with the Company. Mr. Clavijo is also obligated to maintain the confidentiality of the Company’s trade secret and Confidential Information (as defined in the Separation Agreement). Mr. Clavijo subsequently entered into a consulting agreement where he was paid an hourly cash consulting fee until his services were no longer required by the Company. Mr. Clavijo was no longer entitled to any benefits afforded by the Company to full or part-time employees and remained bound by Confidentiality/Nondisclosure and any other continuing obligations under terms of his employment agreement with the Company.

Potential Payments Upon Termination or Change in Control

The terms of the Company’s 2021 Incentive Award Plan (the “Plan”) provide that the shares subject to vesting granted under any equity award may automatically become fully vested, no longer subject to restrictions and freely transferable upon a “Change of Control” as such term is defined in our Plan. We provide this benefit in order to properly incentivize our executives to support a Change of Control that would be deemed beneficial to our shareholders.

DIRECTOR COMPENSATION

*Director Compensation Table.*The following table presents summary information regarding the total compensation that was awarded to, earned by or paid to our non-employee directors for services rendered during the year ended December 31, 2023. Mr. Hashad, the Company’s Chief Executive Officer, does not receive any additional compensation for serving as a member of the Board of Directors.

Summary of Director Compensation

The director compensation program provides for annual retainer fees and/or long-term equity awards for our directors. For 2023, each director received an annual retainer of $35,000. A director serving as chairman of the board or lead independent director received an additional annual retainer of $15,000. Directors serving as the chairs of the audit, compensation and nominating and corporate governance, and finance committees received additional annual retainers of $15,000, $10,000, $8,000, and $7,500, respectively. Directors serving as members of the audit, compensation, finance, and nominating and corporate governance committees received additional annual retainers of $15,000, $10,000, $7,500 and $4,000, respectively. Annual equity grants, to be made following the Company’s annual meeting of stockholders consist of stock options, with a grant date fair value of $15,000. Upon joining the board new directors receive initial equity grants of 5,000 shares of our Class A common stock, which shall be subject to vesting requirements.

Our board of directors or its authorized committee may modify the director compensation program from time to time in the exercise of its business judgment, taking into account such factors, circumstances and considerations as it shall deem relevant from time to time, subject to the annual limit on director compensation set forth in the Plan. As provided in the Plan, our board of directors or its authorized committee may make exceptions to this limit for individual directors in extraordinary circumstances, as the board of directors or its authorized committee may determine in its discretion.