Pulmatrix, Inc.

Executive Summary

This section discusses the material components of our executive compensation program. We 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, which require compensation disclosure for (i) our principal executive officer; (ii) the two most highly compensated executive officers other than our principal executive officer; and (iii) up to two additional individuals for whom disclosure would have been provided pursuant to clause (ii) but for the fact that the individual was not serving as an executive officer at the end of 2024. These current officers are referred to as our Named Executive Officers.

Summary Compensation Table

The following table sets forth information concerning the compensation of our Named Executive Officers for the years ended December 31, 2024 and 2023.

Narrative Disclosure to Summary Compensation Table

Executive Employment Agreements

We have entered into executive employment agreements with each of our Named Executive Officers. The executive employment agreements provide for “at will” employment and set forth the terms and conditions of employment, including annual base salary, discretionary bonus opportunities, benefits and eligibility to participate in our employee benefit plans and programs. As a condition of their employment, our Named Executive Officers were each required to execute our standard proprietary information, inventions, and non-competition agreement. The material terms of these executive employment agreements are summarized below.

Retirement Plans

As part of our overall compensation program, we provide all full-time employees, including our named executive officers, with the opportunity to participate in a defined contribution 401(k) plan. Our 401(k) plan is intended to qualify under Section 401 of the Internal Revenue Code so that employee pre-tax contributions and income earned on such contributions are not taxable to employees until withdrawn. Employees may elect to defer up to 100 percent of their eligible compensation (not to exceed the statutorily prescribed annual limit) in the form of elective deferral contributions to our 401(k) plan. Our 401(k) plan also has a “catch-up contribution” feature for employees aged 50 or older (including those who qualify as “highly compensated” employees) who can defer amounts over the statutory limit that applies to all other employees.

Employee Benefits and Perquisites

During their employment, Mr. Raad, Ms. Siegert, and Dr. Wasilewski are eligible to participate in our health and welfare plans, including medical and dental benefits, short-term and long-term disability insurance, and life insurance.

No Tax Gross-Ups

We do not make gross-up payments to cover our executives’ personal income taxes that may pertain to any of the compensation or perquisites paid or provided by us.

Mr. Ludlum, Interim Chief Executive Officer and Interim Chief Financial Officer

Mr. Ludlum has served as our Interim Chief Executive Officer and principal executive officer since July 20, 2024, our Interim Chief Financial Officer, principal accounting officer and principal financial officer since April 2022, and our Strategic Advisor – Finance since December 2021, all pursuant to a November 30, 2021, consulting agreement and subsequent amendments thereto, by and between us and Danforth (the “Ludlum Consulting Agreement”).

Ludlum Consulting Agreement

Pursuant to the Ludlum Consulting Agreement, Danforth received cash compensation at a rate of $400 per hour for Mr. Ludlum’s services as our Interim Chief Financial Officer. Effective following Mr. Ludlum’s appointment as our Interim Chief Executive Officer, the rate payable to Danforth increased to $700 per hour to cover Mr. Ludlum’s roles as interim CEO and interim CFO collectively. Each month, we and Danforth shall evaluate jointly the current fee structure and scope of Services (as defined in the Ludlum Consulting Agreement). Danforth reserves the right to an annual increase in consultant rates of up to 4%, effective January 1 of each year. Upon termination of the Ludlum Consulting Agreement, no compensation or benefits of any kind shall be payable or issuable to Danforth after the effective date of such termination. In addition, we will reimburse Danforth for reasonable out-of-pocket business expenses, including but not limited to travel and parking, incurred by Danforth in performing the services, upon submission by Danforth of supporting documentation reasonably acceptable to us. Any such accrued expenses in any given three (3) month period that exceed $1,000 shall be submitted to us for our prior written approval.

Pursuant to the Ludlum Consulting Agreement, Mr. Ludlum will provide services to us under the Ludlum Consulting Agreement as an independent contractor and employee of Danforth. The term of the Ludlum Consulting Agreement will continue until such time as either party has given notice of termination. The Ludlum Consulting Agreement may be terminated by either party hereto: (a) with cause (as defined in the Ludlum Consulting Agreement) upon written notice to the other party; or (b) without cause upon 30 days prior written notice to the other party.

Ludlum Retention Agreement

In addition to the Ludlum Consulting Agreement, pursuant to the terms of a retention letter agreement, dated as of July 15, 2024, and effective as of July 20, 2024 (the “Ludlum Retention Agreement”), we also agreed to pay to Mr. Ludlum two bonuses to reflect his increased role with us. We paid Mr. Ludlum a lump sum $30,000 bonus in July 2024 and an additional $20,000 following the completion of our 2024 annual meeting of stockholders (the “2024 Annual Meeting”) held on December 18, 2024. Pursuant to this agreement, Mr. Ludlum must be providing services to us on the date of the 2024 Annual Meeting (such date, the “Ludlum Retention Date” and each bonus, a “Ludlum Retention Bonus”), which Mr. Ludlum was as of the date of the 2024 Annual Meeting.

Notwithstanding the foregoing, if Mr. Ludlum’s services relationship with us is terminated prior to the Ludlum Retention Date by us without Cause (as defined in the Ludlum Retention Agreement) or due to Mr. Ludlum’s death or disability, then we shall pay any Ludlum Retention Bonus not previously paid to him (or to his estate) on our next regularly scheduled payroll date following the date he (or his estate or legal representative) returns a validly executed, irrevocable release of claims in the form provided by us at the time of his termination (the “Ludlum Release”) and such Ludlum Release becomes effective; provided, however, that in the event the time period for signing the Ludlum Release, plus the expiration of any applicable revocation period, begins in one taxable year and ends in a second taxable year, payment of the applicable retention bonus will not be made until the second taxable year.

Mr. Raad, Former Chief Executive Officer

Raad Employment Agreement

On May 16, 2019, the Board appointed Mr. Raad to serve as Chief Executive Officer and a Class II director. Prior to Mr. Raad’s appointment as the Chief Executive Officer, Mr. Raad served as our Chief Business Officer pursuant to an employment agreement, dated April 28, 2017. On June 28, 2019, we and Mr. Raad entered into an amended and restated employment agreement (the “Raad Agreement”), with Mr. Raad to serve as our President and Chief Executive Officer. Mr. Raad’s employment with us was “at-will,” and the Raad Agreement did not include a specified term. As consideration for his services as Chief Executive Officer, the Raad Agreement provided that Mr. Raad would receive (i) an annual base salary of $450,000 and (ii) a target annual cash bonus equal to 45% of his base salary. Both Mr. Raad’s salary and bonus were subject to review and adjustment by the Board or an appropriate committee thereof. The actual bonus amount was based on both our and Mr. Raad’s individual performance during the year. Effective as of January 1, 2022, after taking into consideration previous increases, Mr. Raad’s base salary was increased to $525,272 and the target annual cash bonus equaled 50% of the base salary. Effective as of January 1, 2023, Mr. Raad’s base salary was increased to $567,294 and the target annual cash bonus remained at 50% of the base salary. No incentive bonus was paid to Mr. Raad for the year ended December 31, 2023. Effective January 6, 2024, Mr. Raad was granted a Retention Bonus (defined below) totaling $340,000 payable in two equal installments following each of the first two calendar quarters in 2024.

We initially agreed in the Raad Agreement to grant Mr. Raad an option to purchase 6,831 shares of common stock, subject to the terms and conditions of the Amended and Restated 2013 Employee, Director and Consultant Equity Incentive Plan (the “Incentive Plan”) and our standard form of stock option agreement, as soon as practicable upon execution of the Raad Agreement. On January 9, 2020, after taking into consideration the results of a compensation survey, the Compensation Committee made various compensation adjustments, which included a grant to Mr. Raad, in lieu of the option to purchase 6,831 shares of common stock, of (i) an option to purchase 23,572 shares of common stock, of which 3,437 optioned shares were fully vested and exercisable as of January 9, 2020, and the remaining optioned shares to vest and become exercisable in 41 equal monthly installments on the 16th day of each of the 41 calendar months following January 2020, and (ii) an option to purchase 39,089 shares of common stock, 1/48th of the optioned shares to vest and become exercisable on each of the 48 monthly anniversaries of January 9, 2020. On April 2, 2020, Mr. Raad was granted an option to purchase 499 shares of common stock, 1/48th of the optioned shares to vest and become exercisable on each of the 48 monthly anniversaries of April 2, 2020.

On January 28, 2021, Mr. Raad was granted an option to purchase 28,274 shares of common stock, with 2.08333% of the optioned shares to vest and become exercisable on each of the 48 monthly anniversaries of grant date. On January 27, 2022, Mr. Raad was granted an option to purchase 37,500 shares of common stock, with 2.08333% of the optioned shares to vest and become exercisable on each of the 48 monthly anniversaries of grant date. On January 26, 2023, Mr. Raad was granted an option to purchase 34,900 shares of common stock, with 2.08333% of the optioned shares to vest and become exercisable on each of the 48 monthly anniversaries of grant date.

Mr. Raad’s employment with us ceased on July 19, 2024, without cause. Termination and severance benefits provided to Mr. Raad are described below under “General Release and Severance Agreement”. As of December 31, 2024, none of the option awards described above remain outstanding.

Retention Bonus and Letter Agreement

On January 6, 2024, we and Mr. Raad entered into a letter agreement (the “Raad Letter Agreement”), pursuant to which Mr. Raad shall be granted a retention bonus of $170,000 per quarter, for each of the full calendar quarters ending March 31, 2024, and June 30, 2024, respectively, less applicable payroll and other tax withholdings (such bonus, the “Raad Retention Bonus”). Pursuant to the Raad Letter Agreement, Mr. Raad must be employed by us on the last day of such applicable calendar quarter unless Mr. Raad’s employment is terminated on the closing date of a potential acquisition of us by an unrelated third party, merger by us with or into an unrelated third party or other liquidation event (such closing date, the “Raad Retention Date”), in which case, Mr. Raad shall receive the full Raad Retention Bonus for the calendar quarter in which the Raad Retention Date occurs.

Notwithstanding the foregoing, if Mr. Raad’s employment with us is terminated by us without Cause prior to the Raad Retention Date, or due to death or disability, then we shall pay to Mr. Raad the full Raad Retention Bonus with respect to the calendar quarter of such termination, subject to the receipt of a release of claims by Pulmatrix (the “Raad Release”). We shall not be obligated to pay the Raad Retention Bonus if (i) Mr. Raad terminates his employment with us prior to the Raad Retention Date, (ii) we terminate Mr. Raad’s employment prior to the Raad Retention Date for Cause, or (iii) Mr. Raad’s employment is terminated due to his death, disability or by us without Cause, and a Raad Release has not been received. We paid the Raad Retention Bonus to Mr. Raad in full during the year ending December 31, 2024.

General Release and Severance Agreement with Mr. Raad

On July 15, 2024, the Board approved a General Release and Severance Agreement (the “Raad Severance Agreement”), by and between us and Mr. Raad, dated as of July 19, 2024, and effective as of the same date (the “Raad Separation Date”). Effective as of the Raad Separation Date, Mr. Raad’s employment with us ceased and Mr. Raad relinquished all positions, offices, and authority with us and any affiliates, including as a member of the Board and all committees thereto. As of the Raad Separation Date, the Raad Agreement was terminated.

Pursuant to the terms of the Raad Severance Agreement, we provided to Mr. Raad (i) severance pay of $567,294, less all lawful and authorized withholdings and deductions, (ii) payment of a pro-rated bonus in the amount of $156,310.85, less all lawful and authorized withholdings and deductions (equal to a pro-rated portion of Mr. Raad’s target bonus for 2024), and (iii) payment of a separation bonus in the amount of $283,647, less all lawful and authorized withholdings and deductions (equal to 100% of Mr. Raad’s target bonus for 2024). We additionally paid to Mr. Raad $170,000, less all lawful and authorized withholdings and deductions pursuant to the Raad Letter Agreement, and will pay the portion of Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) premiums paid by Mr. Raad for the continuation of health, dental, and vision benefits coverage under our group benefit plans, for up to 12 months and subject to certain exceptions if Mr. Raad timely elects to receive coverage under COBRA. Any outstanding equity awards granted to Mr. Raad under our equity compensation plans and that would have vested during the 12-month period following the Raad Separation Date became fully vested as of the Raad Separation Date.

Pursuant to the Raad Severance Agreement, Mr. Raad agreed to waive and release any claims in connection with Mr. Raad’s employment, separation and departure. The Raad Severance Agreement also provided for certain customary covenants regarding confidentiality. Mr. Raad’s separation from us was not the result of any disagreement regarding any matter relating to our operations, policies, or practices.

Dr. Wasilewski, Former Chief Medical Officer

On March 1, 2022, we appointed Dr. Wasilewski to serve as its Chief Medical Officer. Dr. Wasilewski’s employment with us was “at-will,” pursuant to an employment agreement (the “Wasilewski Agreement”). As consideration for her services as Chief Medical Officer, the Wasilewski Agreement provided that Dr. Wasilewski would receive (i) an annual base salary of $442,000 and (ii) a target annual cash bonus equal to 40% of her base salary. Both Dr. Wasilewski’s salary and bonus were subject to review and adjustment by the Board or an appropriate committee thereof. The actual bonus amount was based on both our and Dr. Wasilewski’s individual performance during the year.

Pursuant to the Wasilewski Agreement, we agreed to grant Dr. Wasilewski an option to purchase 21,060 shares of common stock, subject to the terms and conditions of the Incentive Plan and our standard form of stock option agreement, as soon as practicable upon execution of the Wasilewski Agreement. Effective January 1, 2023, Dr. Wasilewski’s base salary was increased to $461,890 and the target annual cash bonus remained at 40% of the base salary. No incentive bonus was paid to Dr. Wasilewski for the year ended December 31, 2023. On March 7, 2024, the Board approved the termination of Dr. Wasilewski without cause. Termination benefits provided to Dr. Wasilewski are described below.

Termination Benefits

Pursuant to the Wasilewski Agreement, if Dr. Wasilewski’s employment is terminated (i) by us other than cause or (ii) by Dr. Wasilewski for good reason, then we must pay Dr. Wasilewski, in addition to any then-accrued and unpaid obligations owed to her, the following (i) severance in the amount equal to six (6) months of her base salary, less all customary and required taxes and employment-related deductions, paid in equal installments commencing on the first payroll date following the date on which the release of claims referenced above becomes effective and non-revocable, provided that, if the release consideration period plus the revocation period spans two taxable years, payments will commence in the later taxable year; (ii) payment for any approved, but unpaid bonus for the year immediately preceding the year her employment terminates, less all customary and required taxes and employment-related deductions; (iii) payment of a pro-rated bonus in an amount equal to her target bonus to which she may have been entitled for the year in which her employment terminates, less all customary and required taxes and employment-related deductions; (iv) up to twelve (12) months of COBRA health insurance premiums at our then-normal rate of contribution; and (v) she shall become fully vested in any and all equity awards outstanding as of the date of her termination.

In the event that a change of control occurs and within a period of one (1) year following the change of control, either her employment is terminated by us other than for cause or she terminates her employment for good reason, in exchange for her execution and non-revocation of a release of claims, she shall receive the payments and benefits set forth above, provided that the severance shall be for twelve (12) months (rather than six (6) months).

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information concerning the outstanding equity awards that have been previously awarded to each of our Named Executive Officers and which remain outstanding as of December 31, 2024:

Compensation Recovery Policy

In November 2023, our board of directors approved a Compensation Recovery Policy, which states that in the event we are required to prepare an accounting restatement, then we are directed, to the fullest extent permitted by governing law, to recover from each executive officer the amount, if any, of previously awarded compensation that has been determined to be erroneously awarded. This policy applies to incentive-based compensation received by executive officers on or after October 2, 2023.

Director Compensation

We have entered into a director’s agreement with each of our non-employee directors. In 2024, under these agreements, non-employee directors were paid cash compensation payable in four quarterly payments as set forth in the table below.

The agreements also provide that such directors will be reimbursed for reasonable out-of-pocket expenses incurred in connection with the attendance of board and committee meetings.

Director Compensation Table

The following table presents the total compensation for each person who served as a member of our Board during 2024. Other than as set forth in the table and described more fully below, we did not pay any compensation, reimburse any expense of, make any equity awards or non-equity awards to, or pay any other compensation to any of the other members of our Board in such period. Prior to his separation from us, Mr. Raad received no additional compensation for his services as a director, and, consequently, is not included in this table. The compensation received by Mr. Raad as our President and Chief Executive Officer for the year ended December 31, 2024, is set forth in the “Summary Compensation Table” under the section “Executive Compensation” above.