Foghorn Therapeutics Inc

EXECUTIVE OFFICER AND DIRECTOR COMPENSATION

Introduction

This section provides an overview of the compensation awarded to, earned by, or paid to our principal executive officer and our next two most highly compensated executive officers, listed below, in respect of their service to us for the fiscal year ended December 31, 2023. We refer to these individuals as our named executive officers. Our named executive officers are:

• Adrian Gottschalk, our President and Chief Executive Officer;

• Steven Bellon, Ph.D., our Chief Scientific Officer; and

•Alfonso Quintás-Cardama, M.D., our Chief Medical Officer.

The Compensation Committee of our Board of Directors was responsible for determining the compensation of our executive officers during fiscal year 2023, subject, in the case of our Chief Executive Officer, to the approval of our Board of Directors. Our Chief Executive Officer made recommendations to the Compensation Committee about the compensation of his direct reports in respect of fiscal years 2023 and 2022.

Summary Compensation Table

The following table sets forth the compensation awarded to, earned by, or paid to our named executive officers in respect of their service to us for the fiscal years ended December 31, 2023 and 2022, as applicable:

(1) The amount reported for Mr. Gottschalk and Drs. Bellon and Quintás-Cardama includes employee contributions made to our 401(k) plan.

(2) The amount reported for Dr. Quintás-Cardama reflects a sign-on bonus.

(3) The amounts reported represent the aggregate grant date fair value of options to purchase our common stock granted to Mr. Gottschalk and Drs. Bellon and Quintás-Cardama in fiscal year 2023 and/or 2022, as applicable, computed in accordance with FASB ASC 718, excluding the effect of estimated forfeitures. The assumptions used to value the stock options for this purpose are set forth in Note 7 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

(4) The amounts reported represent the annual bonus earned by each of the named executive officers for the relevant fiscal year, to the extent applicable, based on the attainment of corporate performance goals as described below under “Annual Bonuses.”

(5) The amounts reported represent matching contributions made by the Company under our 401(k) plan on behalf of each of our named executive officers in 2023.

(6) Dr. Quintás-Cardama commenced employment with us on September 11, 2023.

Narrative Disclosure to Summary Compensation Table

Base Salary

The letter agreement with each named executive officer, described below, establishes an initial base salary for the named executive officer. For 2023, the base salary of Mr. Gottschalk was $579,000 (increased from $575,000 for 2022), the base salaries of Dr. Bellon was $445,000 (increased from $435,000 for 2022), and the base salary of Dr. Quintás-Cardama was $465,000. For 2024, Mr. Gottschalk’s base salary was increased to $601,500, Dr. Bellon’s base salary was increased to $485,000 and Dr. Quintás-Cardama’s base salary was increased to $471,000.

Annual Bonuses

With respect to fiscal year 2023, each of Mr. Gottschalk and Drs. Bellon and Quintás-Cardama was eligible to receive an annual bonus, with the initial target amount of such bonus for each named executive officer set forth in his letter agreement with us, described below. For fiscal year 2023, the target bonus amount, expressed as a percentage of base salary, for each of Mr. Gottschalk and Drs. Bellon and Quintás-Cardama was as follows: up to 50%, up to 40% and up to 40%, respectively, with Dr. Quintás-Cardama’s 2023 annual bonus prorated based on his September 2023 employment commencement date, as described below. Annual bonuses for fiscal year 2023 for our named executive officers were based on the attainment of certain corporate performance goals as determined by the Compensation Committee, including those related to capital raising and financing, senior management recruitment, development of pipeline candidates, and research and development targets. For 2023, the compensation committee determined that, based on the level of attainment of the applicable corporate performance goals and other factors determined relevant by the committee, each eligible executive would be eligible to earn 70% of his bonus target. As a result, Mr. Gottschalk earned a bonus of $202,650, Dr. Bellon earned a bonus of $124,600, and Dr. Quintás-Cardama earned a bonus of $43,400. For 2024, Mr. Gottschalk’s annual bonus target amount was increased to up to 55% of his base salary.

Agreements With Our Named Executive Officers

Each named executive officer is party to a letter agreement (as amended and restated, in the case of Mr. Gottschalk and Dr. Bellon) with us that sets forth the terms and conditions of his employment. The material terms of the agreements are described below. The terms “cause,” “good reason” and “change of control” referred to below are defined in the respective named executive officer’s agreement.

Mr. Gottschalk. In connection with our initial public offering, we entered into an amended and restated letter agreement with Mr. Gottschalk that provides for an initial base salary and an initial target annual bonus, each of which has subsequently been increased, as described above. The amended and restated letter agreement provides that, as long as he is our Chief Executive Officer, we will nominate Mr. Gottschalk to serve on our Board of Directors and he will serve as a member of our Board of Directors if elected.

Mr. Gottschalk also entered into an Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment of Inventions Agreement under which he has agreed not to compete with us during his employment and for 12 months following the termination of his employment, except for any termination due to layoff or without cause (as defined in this agreement), in exchange for garden leave pay during the post-employment non-competition period equal to 50% of his highest annual base salary during the two years prior to termination of his employment. We may elect to waive the post-employment non-competition period, in which case no garden leave pay would be due. Pursuant to the terms of this agreement, Mr. Gottschalk also has agreed to a perpetual obligation of confidentiality, the assignment of intellectual property, the protection and return of documents and other materials, and not to solicit our customers or business partners, or solicit or hire our employees or independent contractors, during his employment and for 12 months following termination of his employment.

Dr. Bellon. On January 26, 2022, we entered into an amended and restated letter agreement with Dr. Bellon that provided for an initial base salary, which has subsequently been increased, as described above, and a target annual bonus of 40% of his annual base salary.

Dr. Bellon also entered into an Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment of Inventions Agreement, which has terms substantially similar to Mr. Gottschalk’s Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment of Inventions Agreement, as described above.

Dr. Quintás-Cardama. On August 4, 2023, we entered into a letter agreement with Dr. Quintás-Cardama that provided for an initial base salary, which has subsequently been increased as described above, and a target annual bonus of 40% of his annual base salary. With respect to the 2023 fiscal year, any annual bonus earned by Dr. Quintás-Cardama was to be a pro-rated annual bonus equal to one-third of the bonus he would have received had he been employed by the Company for the full calendar year.

In connection with his commencement of employment, pursuant to his letter agreement, Dr. Quintás-Cardama received a one-time signing bonus in the amount of $110,000, which is subject to repayment by Dr. Quintás-Cardama if he resigns without good reason or the Company terminates his employment for cause, in each case, prior to September 11, 2024. Pursuant to his letter agreement, Dr. Quintás-Cardama was granted an option to purchase 272,000 shares of our common stock, as described in more detail below under “Equity Compensation.”

Dr. Quintás-Cardama also entered into an Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment of Inventions Agreement, which has terms substantially similar to Mr. Gottschalk’s Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment of Inventions Agreement, as described above.

Severance Upon Termination of Employment; Change in Control.

Mr. Gottschalk. If Mr. Gottschalk’s employment is terminated by us without cause or if he resigns for good reason outside of a change of control, he will be entitled to receive (i) severance in an amount equal to 12 months of his then-current base salary, payable in installments over six months; (ii) payment of the employer portion of COBRA premiums for 12 months, subject to his eligibility for, and timely election of, COBRA coverage; and (iii) any earned but unpaid bonus relating to the calendar year prior to the year of termination, payable at the same time bonuses otherwise are paid to active employees.

If Mr. Gottschalk’s employment is terminated by us without cause or if he resigns for good reason within the four months prior to or 12 months following a change of control, he will be entitled to receive (i) severance in an amount equal to 1.5 times the sum of (A) his then-current base salary plus (B) his target annual bonus for the year of termination, payable in installments over 12 months; (ii) payment of the employer portion of COBRA premiums for 18 months, subject to his eligibility for, and timely election of, COBRA coverage; (iii) any earned but unpaid bonus relating to the calendar year prior to the year of termination, payable at the same time bonuses otherwise are paid to active employees; and (iv) full acceleration of time-based stock options and other time-based equity awards.

Dr. Bellon. If Dr. Bellon’s employment is terminated by us without cause or if he resigns for good reason outside of a change of control, he will be entitled to receive (i) severance in an amount equal to nine months of his then-current base salary, payable in installments over nine months; (ii) payment of the employer portion of COBRA premiums for nine months, subject to his eligibility for, and timely election of, COBRA coverage; and (iii) any earned but unpaid bonus relating to the calendar year prior to the year of termination, payable at the same time bonuses otherwise are paid to active employees.

If Dr. Bellon’s employment is terminated by us without cause or if he resigns for good reason within the three months prior to or 12 months following a change of control, he will be entitled to receive (i) severance in an amount equal to the sum of (A) his then-current base salary plus (B) his target annual bonus for the year of termination, payable in installments over 12 months; (ii) payment of the employer portion of COBRA premiums for 12 months, subject to his eligibility for, and timely election of, COBRA coverage; (iii) any earned but unpaid bonus relating to the calendar year prior to the year of termination, payable at the same time bonuses otherwise are paid to active employees; and (iv) full acceleration of time-based stock options and other time-based equity awards.

Dr. Quintás-Cardama. If Dr. Quintás-Cardama’s employment is terminated by us without cause or if he resigns for good reason outside of a change of control, he will be entitled to receive (i) severance in an amount equal to nine months of his then-current base salary, payable in installments over nine months; (ii) payment of the employer portion of COBRA premiums for nine months, subject to his eligibility for, and timely election of, COBRA coverage; and (iii) any earned but unpaid bonus relating to the calendar year prior to the year of termination, payable at the same time bonuses otherwise are paid to active employees.

If Dr. Quintás-Cardama’s employment is terminated by us without cause or if he resigns for good reason within the three months prior to or 12 months following a change of control, he will be entitled to receive (i) severance in an amount equal to the sum of (A) his then-current base salary plus (B) his target annual bonus for the year of termination, payable in installments over 12 months; (ii) payment of the employer portion of COBRA premiums for 12 months, subject to his eligibility for, and timely election of, COBRA coverage; (iii) any earned but unpaid bonus relating to the calendar year prior to the year of termination, payable at the same time bonuses otherwise are paid to active employees; and (iv) full acceleration of time-based stock options and other time-based equity awards.

Severance Subject to Compliance with Restrictive Covenant Obligations and Release of Claims. Our obligation to provide severance payments and other benefits under each named executive officer’s letter agreements (as amended and restated, in the case of Mr. Gottschalk and Dr. Bellon) is conditioned on (i) the executive providing a timely and effective separation agreement containing a release of claims in favor of us; and (ii) the executive’s continued compliance with applicable restrictive covenant obligations, including any non-competition, non-solicitation and confidentiality restrictions.

Section 280G of the Code. Each named executive officer’s letter agreement (as amended and restated, in the case of Mr. Gottschalk and Dr. Bellon) provides for a Section 280G “better of provision” such that payments or benefits that each named executive officer receives in connection with a change in control will be reduced to the extent necessary to avoid the imposition of any excise tax under Sections 280G and 4999 of the Code if such reduction would result in a greater after tax payment amount for such named executive officer than if he had been paid the full amount of such payments or benefits, with such payments and benefits subject to the excise tax.

Equity Compensation

Each of our named executive officers received a grant of options to purchase shares of our common stock in 2023 pursuant to the terms of the 2020 Plan.

On January 26, 2023, each of Mr. Gottschalk and Dr. Bellon was granted an option to purchase 280,000 and 100,000 shares of our common stock, respectively, each of which option vested as to 25% of the underlying shares on January 26, 2024, and vests as to 6.25% of the underlying shares on the first day of each calendar quarter thereafter, for the subsequent 12 calendar quarters, generally subject to the applicable executive’s continued employment with us through the applicable vesting date.

On September 11, 2023, Dr. Quintás-Cardama was granted an option to purchase 272,000 shares of our common stock, which will vest as to 25% of the underlying shares on September 11, 2024 and as to 6.25% of the underlying shares on the first day of each calendar quarter thereafter, for the subsequent 12 calendar quarters, generally subject to Dr. Quintás-Cardama’s continued employment with us through the applicable vesting date.

Severance and Change of Control Payments and Benefits

Each of our named executive officers is entitled to severance and change of control benefits pursuant to the terms of his letter agreement (as amended and restated, in the case of Mr. Gottschalk and Dr. Bellon) as described above under “Agreements With Our Named Executive Officers.”

Employee and Retirement Benefits

We currently provide broad-based health and welfare benefits, and certain commuter benefits, that are available to our full-time employees, including our named executive officers, including health, life, disability, vision and dental insurance. In addition, we maintain a 401(k) retirement plan for our full-time employees. The 401(k) plan permits us to make discretionary employer contributions. In 2023, we made employer contributions to the 401(k) plan of up to $3,000 per employee, including for our named executive officers. Other than the 401(k) plan, we do not provide any qualified or non-qualified retirement or deferred compensation benefits to our employees, including our named executive officers.

Outstanding Equity Awards at Fiscal Year-end Table

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

(1) Represents an option to purchase 905,405 shares of our common stock, granted on May 30, 2017, which vested as to 25% of the underlying shares on May 30, 2018, and vested as to 6.25% of the underlying shares on the first day of each calendar quarter thereafter, for the subsequent 12 calendar quarters.

(2) Represents an option to purchase 250,697 shares of our common stock, granted on February 20, 2019, which vested as to 25% of the underlying shares on January 30, 2020, and vested as to 6.25% of the underlying shares on the first day of each calendar quarter thereafter, for the subsequent 12 calendar quarters.

(3) Represents an option to purchase 310,810 shares of our common stock, granted on August 18, 2020, which vested as to 25% of the underlying shares on August 18, 2021, and vests as to 6.25% of the underlying shares on the first day of each calendar quarter thereafter, for the subsequent 12 calendar quarters, generally subject to Mr. Gottschalk’s continued employment with us through the applicable vesting date.

(4) Represents an option to purchase 300,000 shares of our common stock, granted on January 28, 2021, which vested as to 25% of the underlying shares on January 28, 2022, and vests as to 6.25% of the underlying shares on the first day of each calendar quarter thereafter, for the subsequent 12 calendar quarters, generally subject to Mr. Gottschalk’s continued employment with us through the applicable vesting date.

(5) Represents an option to purchase 440,000 shares of our common stock, granted on January 26, 2022, which vested as to 25% of the underlying shares on January 26, 2023, and vests as to 6.25% of the underlying shares on the first day of each calendar quarter thereafter, for the subsequent 12 calendar quarters, generally subject to Mr. Gottschalk’s continued employment with us through the applicable vesting date.

(6) Represents an option to purchase 280,000 shares of our common stock, granted on January 26, 2023, which vested as to 25% of the underlying shares on January 26, 2024, and vests as to 6.25% of the underlying shares on the first day of each calendar quarter thereafter, for the subsequent 12 calendar quarters, generally subject to Mr. Gottschalk’s continued employment with us through the applicable vesting date.

(7) Represents an option to purchase 29,729 shares of our common stock, granted on February 13, 2019, which vested as to 25% of the underlying shares on February 13, 2020, and vested as to 6.25% of the underlying shares on the first day of each calendar quarter thereafter, for the subsequent 12 calendar quarters.

(8) Represents an option to purchase 43,243 shares of our common stock, granted on August 18, 2020, which vested as to 25% of the underlying shares on August 17, 2021, and vests as to 6.25% of the underlying shares on the first day of each calendar quarter thereafter, for the subsequent 12 calendar quarters, generally subject to Dr. Bellon’s continued employment with us through the applicable vesting date.

(9) Represents an option to purchase 64,864 shares of our common stock, granted on August 20, 2020, which vested as to 25% of the underlying shares on August 17, 2021, and vests as to 6.25% of the underlying shares on the first day of each calendar quarter thereafter, for the subsequent 12 calendar quarters, generally subject to Dr. Bellon’s continued employment with us through the applicable vesting date.

(10) Represents an option to purchase 50,000 shares of our common stock, granted on January 28, 2021, which vested as to 25% of the underlying shares on January 28, 2022, and vests as to 6.25% of the underlying shares on the first day of each calendar quarter thereafter, for the subsequent 12 calendar quarters, generally subject to Dr. Bellon’s continued employment with us through the applicable vesting date.

(11) Represents an option to purchase 150,000 shares of our common stock, granted on January 26, 2022, which vested as to 25% of the underlying shares on January 26, 2023, and vests as to 6.25% of the underlying shares on the first day of each calendar quarter thereafter, for the subsequent 12 calendar quarters, generally subject to Dr. Bellon’s continued employment with us through the applicable vesting date.

(12) Represents an option to purchase 100,000 shares of our common stock, granted on January 26, 2023, which vested as to 25% of the underlying shares on January 26, 2024, and vests as to 6.25% of the underlying shares on the first day of each calendar quarter thereafter, for the subsequent 12 calendar quarters, generally subject to Dr. Bellon’s continued employment with us through the applicable vesting date.

(13) Represents an option to purchase 272,000 shares of our common stock, granted on September 11, 2023, which vests as to 25% of the underlying shares on September 11, 2024, and vests as to 6.25% of the underlying shares on the first day of each calendar quarter thereafter, for the subsequent 12 calendar quarters, generally subject to Dr. Quintás-Cardama’s continued employment with us through the applicable vesting date.

Director Compensation

The following table sets forth information concerning the compensation awarded to, earned by, or paid to our non-employee directors during the fiscal year ended December 31, 2023. Mr. Gottschalk’s compensation for 2023 is included with that of our other named executive officers above.

(1) All cash fees payable in respect of Dr. Cole's board service are remitted to an affiliate of Flagship Pioneering, Inc.

(2) In 2023, each of non-employee director who served on our Board of Directors was granted an option to purchase 16,000 shares of our common stock on June 21, 2023, following the 2023 annual meeting of stockholders. Mr. Smith was also granted an option to purchase 26,977 shares of our common stock on December 8, 2023 pursuant to a consulting agreement between Mr. Smith and the Company entered into on December 8, 2023.

(3) The amounts reported represent the aggregate grant date fair value of options to purchase our common stock granted to

our non-employee directors in fiscal year 2023, computed in accordance with FASB ASC 718, excluding the effect of

estimated forfeitures. The assumptions used to value the stock options for this purpose are set forth in Note 7 to our

consolidated financial statements included elsewhere in this Annual Report.

(4) Non-employee directors who served on our Board of Directors during 2023 held the following unexercised stock options

as of December 31, 2023:

Consulting Agreement

On December 8, 2023, we entered into a consulting agreement with Mr. Smith, which provides for compensation in the form of an option to purchase up to 26,977 shares of our common stock at an option exercise price of $5.63 per share, the closing price of a share of our common stock on the date the option was granted. Pursuant to the terms of the consulting agreement, the option vests as to one-twelfth of the underlying shares on the first day of each month starting in January 2024, with the balance of then-unvested shares to vest on December 8, 2024.

Director Compensation Policy

Our Board of Directors adopted a non-employee director compensation policy in connection with our initial public offering. Under the non-employee director compensation policy, our non-employee directors are compensated as follows:

•each non-employee director receives an annual cash fee of $40,000 ($70,000 for the chair of our Board of Directors);

•each non-employee director who is a member of the audit committee receives an additional annual cash fee of $7,500 ($15,000 for the audit committee chair);

•each non-employee director who is a member of the compensation committee receives an additional annual cash fee of $5,000 ($10,000 for our compensation committee chair);

•each non-employee director who is a member of the nominating and corporate governance committee or the science committee receives an additional annual cash fee of $4,000 ($8,000 for the nominating and corporate governance or science committee chair);

•each non-employee director who is first elected or appointed to our Board of Directors after our initial public offering is granted an option under the 2020 Plan to purchase 32,000 shares of our common stock (but in no event will a non-employee director’s initial grant have a grant date fair value, determined in accordance with FASB ASC 718, that exceeds $600,000); and

•each non-employee director who has served as a member of our Board of Directors for at least a six-month period prior to the first meeting of our Board of Directors following the annual meeting of our stockholders is annually granted an option under the 2020 Plan to purchase 16,000 shares of our common stock (but in no event will a non-employee director’s annual grant have a grant date fair value, determined in accordance with FASB ASC 718, that exceeds $300,000).

The stock options granted to our non-employee directors will have a per share exercise price at least equal to the closing price of a share of our common stock on the date of grant and will expire not later than ten years after the date of grant. The stock option granted to a non-employee director upon his or her initial election to our Board of Directors will vest as to one-third of the underlying shares on each of the first three anniversaries of the date of grant, subject to such director’s continued service on our Board of Directors. The annual stock options granted to our non-employee directors will vest in full on the first anniversary of the date of grant, subject to the director’s continued service on our Board of Directors.

Each non-employee director is entitled to reimbursement for reasonable travel and other expenses incurred in connection with attending meetings of our Board of Directors and any committee on which he or she serves.

Pursuant to the terms of the 2020 Plan, the aggregate value of all compensation granted or paid to any director with respect to any calendar year, including awards granted under the 2020 Plan and cash fees or other compensation paid by us to such director outside of the 2020 Plan for his or her services as a director during such calendar year, is subject to a limit of $750,000 in the aggregate ($1,000,000 in the aggregate with respect to a director’s first year of service on our Board of Directors).

Delinquent Section 16(a) Reports

Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers, directors and persons who own more than 10% of Foghorn’s common stock to file reports of ownership and changes in ownership with the SEC. As a matter of practice, the Company assists its executive officers and directors in preparing initial reports of ownership and reports of changes in ownership and files those reports on their behalf. Based on our review of such forms, as well as information provided by the reporting persons, we believe that each of our executive officers, directors and beneficial owners of more than 10% of its common stock complied with the reporting requirements of Section 16(a) during the year ended December 31, 2023.