Exicure, Inc 10-K/A, filed May 1, 2023
Exicure, Inc. (XCUR)
10-K/A
2023-05-01
For: 2022-12-31
View Original
Added on
April 10, 2026
About this 10-K/A
Exicure, Inc filed this 10-K/A on May 1, 2023, covering the fiscal year ended December 31, 2022.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________
FORM | ||
| (Amendment No. 1) | ||
______________________________________
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the fiscal year ended December 31 , 2022
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission file number 001-39011
______________________________________
(Exact name of registrant as specified in its charter)
______________________________________
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices and Zip Code)
(847 ) 673-1700
(Registrant’s telephone number, including area code)
______________________________________
Securities registered pursuant to Section 12(b) of the Act:
(Title of each class) | (Trading symbol(s)) | (Name of each exchange on which registered) | ||||||
Securities registered pursuant to Section 12(g) of the Act:
None
______________________________________
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ¨ | Accelerated filer | ¨ | |||||||||||||||||
x | Smaller reporting company | |||||||||||||||||||
Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant as of June 30, 2022 was approximately $8.9 million, based on a closing price of $2.16 per share of the registrant's common stock as reported on The Nasdaq Capital Market. For purposes of this computation, all officers, directors, and 10% beneficial owners of the registrant are deemed to be affiliates. Such determination should not be deemed to be an admission that such officers, directors or 10% beneficial owners are, in fact, affiliates of the registrant.
As of March 23, 2023, the registrant had 8,366,715 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
EXICURE, INC.
ANNUAL REPORT ON FORM 10-K/A
(Amendment No. 1)
TABLE OF CONTENTS
| PART III | ||||||||
| PART IV | ||||||||
3
EXPLANATORY NOTE
Exicure, Inc. (the “Company,” “we,” “us,” or “our”) is filing this Amendment No. 1 on Form 10-K/A (this “Amendment No. 1”) to amend our Annual Report on Form 10-K for the year ended December 31, 2022, originally filed with the Securities and Exchange Commission (the “SEC”) on March 27, 2023 (our “Annual Report”), to include the information required by Items 10 through 14 of Part III of Form 10-K. This information was previously omitted from our Annual Report in reliance on General Instruction G(3) to Form 10-K, which permits the information in the above referenced items to be incorporated in the Form 10-K by reference from our definitive proxy statement if such statement is filed no later than 120 days after our fiscal year-end. We are filing this Amendment No. 1 to provide the information required in Part III of Form 10-K because a definitive proxy statement containing such information will not be filed by the Company within 120 days after the end of the fiscal year covered by the Form 10-K.
Pursuant to the rules of the SEC, Part IV, Item 15 has also been amended to contain the currently dated certifications from the Company’s principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. The certifications of the Company’s principal executive officer and principal financial officer are attached to this Amendment No. 1 as Exhibits 31.1.1. Because no financial statements have been included in this Amendment No. 1 and this Amendment No. 1 does not contain or amend any disclosure with respect to Items 307 and 308 of Regulation S-K, paragraphs 3, 4 and 5 of the certifications have been omitted. Additionally, we are not including currently dated certifications required under Section 906 of the Sarbanes-Oxley Act of 2002 as no financial statements are being filed with this Amendment No. 1.
This Amendment No. 1 does not amend any other information set forth in our Annual Report, and we have not updated disclosures included therein to reflect any subsequent events. This Amendment No. 1 should be read in conjunction with our Annual Report and with our filings with the SEC subsequent to our Annual Report.
4
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Directors
Our Board of Directors is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors, and each class has a three-year term. Any vacancies on our Board of Directors resulting from death, resignation, disqualification, removal or other causes, and any newly created directorships resulting from any increase in the number of directors, shall be filled by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors. Any director elected to fill a vacancy shall hold office for the remainder of the unexpired term in which the vacancy occurred or newly created directorship was created and until such director’s successor shall have been elected and qualified.
Our Board of Directors presently has 6 directors. Changil Ahn, Paul Kang, and Hyukku Lee were delegated to the Board of Directors by CBI USA, Inc. (“CBI USA”) pursuant to its rights under the Securities Purchase Agreement, dated September 26, 2022 (the “Securities Purchase Agreement”) and appointed to the Board of Directors by the Board of Directors in February 2023 upon closing of the transactions contemplated by the Securities Purchase Agreement to fill vacancies on the Board. CBI USA requested that Jiyoung Hwang be appointed pursuant to such rights.
Class III Directors (Term Expires 2023)
Changil Ahn, age 53, has served as a member of our Board of Directors since February 2023. Mr. Ahn is the CEO of Dream Holdings, Inc., a Korean company that provides funeral hall and related services. Before becoming the CEO of Dream Holdings, Mr. Ahn worked as the director of FICC Korea Sales team at Merrill Lynch Korea from 2009 to 2021. The FICC Korea Sales team offers various investment products in fixed income instruments, commodities, and currencies to provide clients with financial solutions. During his tenure at Merrill Lynch, Mr. Ahn worked with both public and private sector clients, including Bank of Korea (BOK), Korea Investment Corporation (KIC), National Pension Service (NPS), banks, insurance companies, asset management companies, and other institutional investors. Prior to joining Merrill Lynch, Mr. Ahn began his career at Bank of Korea in 1992. He worked in various departments, including the International Finance Department, Busan branch, and Research Department, as part of BOK's policy for promoting junior economists. He also worked at Deutsche Securities Korea, Deutsche Bank in Hong Kong, UBS Seoul, and UBS Hong Kong before joining Merrill Lynch. Mr. Ahn has a Bachelor's degree in Business Administration from Yonsei University and an MBA in Finance from Penn State University. Mr. Ahn’s experience as a CEO and in various financial positions qualifies him to serve on the Board.
Paul Kang, age 61, has served as a member of our Board of Directors since February 2023. Mr. Kang began his 35-year investment and merger advisory career at Goldman Sachs in New York. He also served as CEO of Alta Capital Group, focusing on cross border merchant banking. He began his career as a brand manager at Procter & Gamble in Cincinnati. Mr. Kang has served as an interim CEO for a range of industries, and his investment experience includes leading the acquisition for KBL Healthcare Acquisition Corp., the first successful healthcare SPAC. His biopharma experience began with advising LG on the first Korean FDA-approved drug in the late 90s. He received his A.B. in applied mathematics from Harvard College and his M.B.A. from the Stanford Graduate School of Business. Mr. Kang’s experience in finance and working with companies in a range of industries qualifies him to serve on the Board.
Class I Directors (Term Expires 2024)
Cheolho Jo, age 51 has served as a member of our Board of Directors since February 2023. Mr. Jo has been a financial advisor for Hana Securities since 2014 and prior to that at Aplus Asset from 2009 to 2014. Prior to serving as a financial advisor, Mr. Jo served in various credit analysis roles at subsidiaries of Shinhan Financial Group from 1996 to 2008. Mr. Jo has graduated from Kyunghee University with a B.A. in English Language and Literature.
5
Mr. Jo is certified as a CFP by the Financial Planning Standards Board of Korea. Mr. Jo’s experience in finance qualifies him to serve on the Board.
Jiyoung Hwang, age 46, has served as a member of our Board of Directors since April 2023. Ms. Hwang has served as an independent consultant since 2017. As a consultant she has worked on investments in Viral Gene, Liminatus Pharma, Epivara and Hyperfine. She also serves as a member of the evaluation committee at MSIT, KHIDI, KIPA, and KIPO of the Republic of Korea since 2013. Prior to 2017 she was the Managing Director of Intervest Co., Ltd a venture capital fund. Prior to 2017, she also served as a Managing Director at Neoplux Co., Ltd, a Fund Manager at National Agricultural Cooperative Federation, a Manager at NEXUS Investment Co, Ltd., a Manager at Pulmuone Holdings Co., Ltd and Venture Capitalist & Analyst at Hyundai Venture Investment Corp. Ms. Hwang holds a Life Science degree from Pohang University of Science of Technology and a graduate degree in Environmental Management from Graduate School of Environmental Studies, Seoul National University.
Class II Directors (Term Expires 2025)
Jung Sang Kim, age 62, has served as Chief Executive Officer, Chief Financial Officer and a member of our Board of Directors since April 2023. Mr. Kim, age 62, has served as the President of Hanil Energy since May 2019, a company focused on manufacturing fuel pallets as a form of renewable energy. Prior to his work at Hanil Energy, he served as the President and Chief Executive Officer of Signal Entertainment from February 2015 until August 2018. Signal Entertainment is an entertainment holding company aiming to distribute Korean entertainment contents in China. Prior to 2018, Mr. Kim also served at AZ Works Inc., Evergreen Contents Group, Plenus Entertainment Inc., Cinema Service Inc., Twentieth Century Fox Korea Inc., FoxVideo Korea Inc. and Daewoo Electronics. Mr. Kim holds a B.A. from State University of New York at Binghamton.
Hyukku Lee, age 43, has served as a member of our Board of Directors since February 2023. Mr. Lee has been CEO of AFS Company since 2017, providing business development and investor relations consulting services to a variety of early-stage Korean businesses. Mr. Lee is also the co-founder and a director since 2018 of Happy Works, a laundry services business based in Korea. Prior to these positions, Mr. Lee served as an investment review officer for Korean venture capital fund TGCK Partners and venture advisor HN Investment Advisors, where his responsibilities included review of investment opportunities, management of portfolio investments (including service as a director), and fundraising. Mr. Lee graduated from Yongin University, majoring in Video Media. Mr. Lee is a registered venture capitalist under the Korea Venture Capital Association. Mr. Lee’s experience in venture capital and providing business development and investor relations services to early-stage businesses qualifies him to serve on the Board.
Executive Officers
The following sets forth information about our executive officers as of April 27, 2023.
Name | Position | Age | |||||||||||||||
Jung Sang Kim | Chief Executive Officer and Chief Financial Officer | 62 | |||||||||||||||
Sarah Longoria | Chief Human Resources and Compliance Officer | 41 | |||||||||||||||
Jung Sang Kim. Biographical information for Mr. Kim is presented above under the caption “Directors.”
Sarah Longoria has served as our Chief Human Resources & Compliance Officer since December 2021 and was our Vice President, Human Resources from March 2021 to December 2021. Prior to joining us, Ms. Longoria served as vice president, head of human resources at Assertio Therapeutics, Inc., a publicly traded pharmaceutical company, from May 2020 to February 2021. Before that, Ms. Longoria held various positions of increasing responsibility with Abbott Laboratories from June 2001 to March 2020, most recently as head of human resources for three global divisions within the diagnostics segment. Ms. Longoria received her B.B.A. degree in business, human resources from the University of Wisconsin — Whitewater.
6
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who own more than ten percent of a registered class of the Company’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors, and greater than ten percent stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.
To the Company’s knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the fiscal year ended December 31, 2022, all Section 16(a) filing requirements applicable to our officers, directors, and greater than ten percent beneficial owners were complied with, except that: a late report on Form 3 was filed on May 20, 2022 relating to an initial statement of beneficial ownership of securities by Sarah Longoria.
Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. The Code of Business Conduct and Ethics is available on our website at www.exicuretx.com. If we make any substantive amendments to the Code of Business Conduct and Ethics or grants any waiver from a provision of the Code to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website.
Audit Committee Matters
Our Audit Committee is currently comprised of Hyukku Lee, Changil Ahn, and Cheolho Jo. Mr. Lee serves as the chairperson of the Audit Committee. Our Board of Directors has determined that all members are “independent” for Audit Committee purposes as that term is defined in the applicable rules of the SEC and The Nasdaq Stock Market (“Nasdaq”) rules. Our Board has designated Mr. Lee as an “audit committee financial expert,” as defined under the applicable rules of the SEC.
Item 11. Executive Compensation.
Executive Compensation
Compensation Overview
This section provides a discussion of the total compensation awarded to, earned by, or paid to, during the years ended December 31, 2022 and 2021: (1) the individuals who served as our principal executive officer during the fiscal year ended December 31, 2022, (2) our two next most highly compensated executive officers who earned more than $100,000 during the fiscal year ended December 31, 2022 and were serving as executive officers as of such date, and (3) any individual who would otherwise be included in (2) above but for the fact that such individual was not serving as an executive officer of ours as of December 31, 2022. We refer to these individuals in this prospectus as our named executive officers. Our named executive officers for 2022 who appear in the Summary Compensation Table are:
•Matthias G. Schroff, our former Chief Executive Officer;
•Elias D. Papadimas, our former Chief Financial Officer;
•Sarah Longoria, our Chief Human Resource and Compliance Officer;
•Brian C. Bock, our former Chief Executive Officer;
•David Giljohann, our former Chief Executive Officer;
•Doug Feltner, our former Chief Medical Officer;
7
Role of Compensation Consultant
Our Compensation Committee had previously reviewed our executive compensation program on an annual basis or more frequently as it deems appropriate. During 2022, we retained Compensia, an independent compensation consultant, to assist in evaluating our executive compensation program, including an assessment of the competitive market for similar positions at comparable companies.
Elements of Compensation
Our executive compensation program is based on a pay-for-performance philosophy. We designed our executive compensation program to align executive compensation with our business objectives and the interests of our stockholders and to attract, retain and reward executives who contribute to our success.
During 2022, compensation for our named executive officers was comprised primarily of the following three components.
Base Salary
Base salaries are determined on a case-by-case basis for each executive. The base salary levels are designed to reflect each executive officer’s experience, expertise and performance, as well as market compensation levels for similar positions. They also reflect negotiated levels in employment agreements. Refer to the Summary Compensation Table below for information with respect to base salary of our named executive officers for 2021 and 2022.
Annual Cash Incentive Bonuses
Annual cash incentive bonuses provide incentive award opportunities for the achievement of performance goals established by our Compensation Committee. The payment of awards under our 2022 annual cash incentive bonus program were subject to the attainment of specific performance goals relating to research and development and financing. Each executive officer’s target bonus amount is expressed as a percentage of the executive officer’s annual base salary and is intended to be commensurate with the executive officer’s position and responsibilities.
The following table sets forth the target bonus opportunities for each of our named executive officers for 2022.
Name | 2022 BONUS TARGET (%) | ||||||||||
Matthias G. Schroff, Ph.D. Former Chief Executive Officer | 50 | ||||||||||
Brian C. Bock (1) Former Chief Executive Officer | — | ||||||||||
Elias D. Papadimas Former Chief Financial Officer | 40 | ||||||||||
Sarah Longoria Chief Human Resources and Compliance Officer | 40 | ||||||||||
(1) Mr. Bock resigned from the role of our Chief Executive Officer effective February 4, 2022, and therefore, did not have 2022 bonus target.
Other than retention bonuses paid in the amounts of $140,000 paid to Dr. Schroff, $180,000 paid to Mr. Bock, $120,000 paid to Mr. Papadimas, and $99,750 paid to Ms. Longoria, as well as a cash bonus of $20,000 paid to Mr. Papadimas, we did not pay any annual cash incentive bonuses with respect to 2022 as a result of a determination by our Board of Directors to preserve resources following our restructuring as we explore strategic alternatives.
8
Equity Awards
We believe equity awards in the form of options to purchase shares of our common stock, restricted stock units, and performance stock units, provide an incentive for our executives to focus on driving growth in our stock price and long-term value creation and helps us attract and retain key talent. In addition, we believe that the granting of stock options further aligns the interests of our executive officers with those of our stockholders as the options only have value if our stock price increases after the date of grant.
The following table provides a summary of the equity awards granted to the named executive officers in 2022.
| Performance-Based RSUs | Options to Purchase Common Stock | |||||||||||||||||||||||||
Named executive officer | Number of Shares | Grant Date Fair Value | Number of Shares | Grant Date Fair Value | ||||||||||||||||||||||
| Matthias G. Schroff, Ph.D. | 77,485 | $267,323 | 77,485 | $208,533 | ||||||||||||||||||||||
Elias D. Papadimas | 14,133 | 48,759 | 14,133 | 38,036 | ||||||||||||||||||||||
| Sarah Longoria | 6,025 | 20,786 | 6,025 | 16,215 | ||||||||||||||||||||||
Refer to “Employment Agreements” below for a description of the treatment of the equity awards held by Dr. Schroff and Mr. Papadimas upon their separations effective April 26, 2023.
Repricing of Outstanding and Unexercised Options
On March 24, 2022, the Board unanimously approved the repricing of all outstanding and unexercised stock options granted under the 2015 Plan and 2017 Plan (the “Plans”) and held by current employees, executive officers, and directors of the Company (the “Eligible Stock Options”). Effective April 1, 2022, the exercise price of the eligible stock options was reduced to $5.51, the closing price of its common stock on April 1, 2022. Except for the modification to the exercise price of the Eligible Stock Options, all other terms and conditions of each of the Eligible Stock Options will remain in full force and effect.
Pursuant to the Plans, the Board, as the administrator of the Plans, has discretionary authority, exercisable on such terms and conditions that it deems appropriate under the circumstances, to reduce the exercise price in effect for outstanding options under the Plans. In approving the repricing, the Board considered the impact of the current exercise prices of outstanding stock options on the incentives provided to employees and directors, the lack of retention value provided by the outstanding stock options to employees and directors, and the impact of such options on the capital structure of the Company. As of March 24, 2022, there were 233,224 stock options outstanding under the Plans, and all of the Company’s outstanding stock options had exercise prices in excess of the current fair market value of the Company’s common stock as of March 24, 2022, which is why the Board made the determination to deem all outstanding and unexercised stock options held by current employees, executive officers, and directors as Eligible Stock Options.
Matthias Schroff, the Company’s former Chief Executive Officer, and Elias Papadimas, the Company’s former Chief Financial Officer, held Eligible Stock Options exercisable into an aggregate of 29,373 and 12,513 shares of the Company’s common stock, respectively. Ms. Longoria held Eligible Stock Options exercisable of 4,166 shares of the Company’s common stock. Former non-employee directors, Jeffrey Cleland, Elizabeth Garofalo, Bali Muralidhar and James Sulat, held Eligible Stock Options exercisable into an aggregate of 3,835, 5,000, 3,835 and 3,112 shares of the Company’s common stock, respectively.
Retirement Benefits and Other Compensation
Our named executive officers are also eligible to participate in our 401(k) plan, 2017 Employee Stock Purchase Plan and health and welfare benefit plans that are generally available to our other salaried employees, in each case, on the same basis as all of our other employees.
9
Summary Compensation Table
The following table provides a summary of compensation paid or accrued for the years ended December 31, 2022 and 2021 to our named executive officers.
| Name and principal position | Year | Salary ($) | Bonus ($) | Stock awards ($)(1) | Option awards ($)(2) | All other compensation ($)(3) | Total ($) | |||||||||||||||||||||||||||||||||||||||||||
Matthias G. Schroff, Ph.D. (4) Former Chief Executive Officer | 2022 | 538,163 | 122,197(5) | 267,323 | 277,785 | 12,250 | 1,217,718 | |||||||||||||||||||||||||||||||||||||||||||
| 2021 | 449,111 | 17,803(5) | — | 713,146 | 12,172 | 1,192,232 | ||||||||||||||||||||||||||||||||||||||||||||
Elias D. Papadimas (6) Former Chief Financial Officer | 2022 | 400,625 | 140,000(7) | 48,759 | 67,125 | 10,250 | 666,759 | |||||||||||||||||||||||||||||||||||||||||||
Sarah Longoria (8) Chief Human Resources and Compliance Officer | 2022 | 300,000 | 99,750(9) | 20,786 | 26,125 | — | 446,661 | |||||||||||||||||||||||||||||||||||||||||||
David A. Giljohann, Ph.D. (10) Former Chief Executive Officer | 2022 | 45,833 | — | — | — | 530,132(10) | 575,965 | |||||||||||||||||||||||||||||||||||||||||||
| 2021 | 560,577 | — | — | 1,520,057 | 9,750 | 2,090,384 | ||||||||||||||||||||||||||||||||||||||||||||
Brian C. Bock (11) Former Chief Executive Officer | 2022 | 51,705 | 105,283(12) | — | — | 5,250 | 162,238 | |||||||||||||||||||||||||||||||||||||||||||
| 2021 | 269,824 | 134,717(12) | — | 480,000(13) | 44,750(14) | 929,291 | ||||||||||||||||||||||||||||||||||||||||||||
Douglas E. Feltner, M.D. (15) Former Chief Medical Officer | 2022 | 33,333 | — | — | — | 235,293 (15) | 268,626 | |||||||||||||||||||||||||||||||||||||||||||
| 2021 | 409,231 | — | — | 292,600 | 12,250 | 714,081 | ||||||||||||||||||||||||||||||||||||||||||||
10
| (1) | The amounts reported in this column reflect the aggregate grant date fair value for performance stock units granted during such fiscal year. | ||||
| (2) | The amounts reported in this column reflect the grant date fair value of the option awards granted to the named executive officers during the years presented and do not reflect the actual amounts earned. Such grant date fair values do not take into account any estimated forfeitures related to service-based vesting conditions. These values have been determined in accordance with FASB ASC Topic 718. See Note 10 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC on March 27, 2023 for a discussion of the relevant assumptions used in calculating these amounts. The amounts in this column for 2022 for Dr. Schroff, Mr. Papadimas, and Ms. Longoria also include the incremental fair value of outstanding awards as a result of the repricing of stock options effective April 1, 2022. | ||||
| (3) | Except as set forth below in footnotes 10 and 15 with respect to 2022 amounts, and footnote 14 with respect to 2021 amounts, the amounts reported in this column represent a match of contributions to our 401(k) savings plan. | ||||
| (4) | Dr. Schroff served as our Chief Operating Officer in 2021 until December 10, 2021, and as our Chief Scientific Officer from December 10, 2021 through February 4, 2022. Effective February 4,2022, Dr. Schroff was appointed as Chief Executive Officer, succeeding Mr. Bock. He separated from the Company effective April 26, 2023. | ||||
| (5) | Represents retention award amounts earned in each respective year and paid to Dr. Schroff in 2022. | ||||
| (6) | Mr. Papadimas was not a named executive officer in 2021. Mr. Papadimas was appointed as our Chief Financial Officer in January 2022. He separated from the Company effective April 26, 2023 | ||||
| (7) | The amount reported represents (i) a retention award in the amount of $120,000 earned in 2022 and (ii) a bonus in the amount of $20,000 earned in 2022, each paid to Mr. Papadimas in 2022. | ||||
| (8) | Ms. Longoria was not a named executive officer in 2021. Ms. Longoria was appointed as our Chief Human Resources and Compliance Officer in December 2021. | ||||
| (9) | Represents retention award amounts earned and paid to Ms. Longoria in 2022. | ||||
| (10) | Dr. Giljohann served as our Chief Executive Officer in 2021 until December 10, 2021, when he was succeeded by Mr. Bock. Effective December 10, 2021, Dr. Giljohann was appointed as our Chief Technology Officer, a role he served in through January 31, 2022, at which time Dr. Giljohann separated from the Company. In connection with his separation, Dr. Giljohann received a separation payment equal to $550,000, less applicable withholdings and deductions, payable during the twelve-month period following Dr. Giljohann’s separation from the Company. In addition, the Board agreed to extend the post-termination exercise period of his vested stock options, such that each of his vested stock options that was outstanding as of January 31, 2022 remained exercisable until the earlier to occur of (a) December 10, 2022 and (b) the applicable option’s original expiration date. All Other Compensation for 2022 includes $528,045 in severance and subsidized COBRA payments. | ||||
| (11) | Mr. Bock was appointed as our Chief Financial Officer on May 13, 2021. In December 2021, he was appointed as our Chief Executive Officer effective December 10, 2021. Effective February 4, 2022, Mr. Bock resigned from the position of our Chief Executive Officer and as a member of the Board. We entered into an advisor agreement with Mr. Bock, dated as of February 4, 2022, pursuant to which Mr. Bock served as Special Advisor to the Chief Executive Officer for an initial transition period of three months; such agreement terminated in May 2022. | ||||
| (12) | The amount reported for 2022 represents a retention award in the amount earned in 2021 and paid to Mr. Bock in 2022. The amount reported for 2021 represents (i) a signing bonus in the amount of $60,000 paid to Mr. Bock in 2021; and (ii) a retention award in the amount of $74,717 earned in 2021 and paid to Mr. Bock in 2022. | ||||
| (13) | In connection with Mr. Bock’s resignation from the Company on February 4, 2022, Mr. Bock’s stock options were forfeited. | ||||
| (14) | Represents (i) a match of contribution to Mr. Bock’s 401(k) savings plan in the amount of $9,750; and (ii) a relocation bonus payment paid to Mr. Bock pursuant to the terms of his employment agreement in the amount of $35,000. | ||||
| (15) | Dr. Feltner ceased serving as our Chief Medical Officer effective January 30, 2022. In connection with his separation, Dr. Feltner received a severance payment of approximately $200,000, which was paid in the form of salary continuation payments in 2022. Due to Dr. Feltner’s termination of employment, his outstanding stock options expired on April 30, 2022. The amount reported in All Other Compensation for 2022 includes $231,954 in severance and subsidized COBRA payments. | ||||
Employment Agreements
We had employment agreements with each of our named executive officers who were still serving in their positions at the end of 2022. These employment agreements are described below. With respect to Dr. Schroff and Mr. Papadimas, who departed the Company effective April 26, 2023, the terms of their separation agreements are also described below. Refer to the footnotes to the Summary Compensation Table above with respect to named executive officers who were no longer serving at the end of 2022.
Matthias G. Schroff, Ph.D. We and Dr. Schroff entered into a Second Amended and Restated Employment Agreement dated January 26, 2022, as amended by the First Amendment dated September 23, 2022 (collectively, the “Schroff Employment Agreement”). Under the terms of the Schroff Employment Agreement, Dr. Schroff’s annual base salary was $550,000, subject to adjustment as provided in the agreement, and he was eligible to earn an annual cash incentive bonus, which was initially set at a target aggregate bonus amount of 50% of annual base salary, upon achievement of certain individual and/or Company performance goals. In connection with Dr. Schroff’s separation from the Company effective April 26, 2023, we entered into a Separation and Release Agreement, which terminated the Schroff Employment Agreement (other than post-termination restrictive covenants). Pursuant to the Separation and Release Agreement, Dr. Schroff is entitled to a lump sum severance payment of approximately $603,800. In the
11
event of a “Change in Control” (as defined in the agreement) prior to December 31, 2024, Dr. Schroff will be entitled to additional payment of $275,000. In addition, three months following his separation date, all of Dr. Schroff’s existing equity awards will become fully vested and he will be granted additional shares worth approximately $300,000 (based on the closing price on the grant date), less applicable withholding. The foregoing severance payments and benefits are in lieu of any benefits provided by the Schroff Employment Agreement, are provided in exchange for Dr. Schroff’s release of claims against the Company and related parties, and are subject to Dr. Schroff’s compliance with the post-termination restrictive covenants to which he is subject. Dr. Schroff’s also resigned as a member of the Board of Directors effective April 26, 2023.
Elias D. Papadimas. We and Mr. Papadimas entered into an Amended and Restated Employment Agreement dated June 1, 2021, as amended by the First Amendment dated January 17, 2022 and the Second Amendment dated September 23, 2022 (collectively, the “Papadimas Employment Agreement”). Under the terms of the Papadimas Employment Agreement, Mr. Papadimas’s annual base salary was $405,000, subject to adjustment as provided in the agreement, and he was eligible to earn an annual cash incentive bonus, which was initially set at a target aggregate bonus amount of 40% of annual base salary, upon achievement of certain individual and/or Company performance goals. In addition, pursuant to the First Amendment and a separate retention agreement, we paid certain retention bonuses to Mr. Papadimas in 2022. In connection with Mr. Papadimas’s separation from the Company effective April 26, 2023, we entered into a Separation and Release Agreement, which terminated the Papadimas Employment Agreement (other than post-termination restrictive covenants). Pursuant to the Separation and Release Agreement, Mr. Papadimas is entitled to a lump sum severance payment of $370,000 and all of Mr. Papadimas’s existing equity awards became fully vested as of his separation date. The foregoing severance payments and benefits are in lieu of any benefits provided by the Papadimas Employment Agreement, are provided in exchange for Mr. Papadimas’s release of claims against the Company and related parties, and are subject to Mr. Papadimas’s compliance with the post-termination restrictive covenants to which he is subject. In addition, Mr. Papadimas agreed to provide limited consulting services for two months following his separation for $15,000 per month.
Sarah Longoria. We and Ms. Longoria entered into an Employment Agreement dated March 5, 2021, as amended by the First Amendment dated December 10, 2021 and the Second Amendment dated September 23, 2022 (collectively, the “Longoria Employment Agreement”). Under the terms of the Longoria Employment Agreement, Ms. Longoria’s annual base salary is $300,000, subject adjustment as provided in the agreement, and she is eligible to earn an annual cash incentive bonus, which is initially set at a target aggregate bonus amount of 40% of annual base salary, upon achievement of certain individual and/or Company performance goals. In the event of termination of Ms. Longoria’s employment by us without “Cause” or by Ms. Longoria with “Good Reason” (as such terms are defined in the Longoria Employment Agreement), other than as described in the following sentence, Ms. Longoria shall be entitled to cash severance equal to six months of base salary, a pro rata annual bonus for the year of termination based on actual performance and a payment equal to 12 months of our portion of group health insurance premiums. In the event of termination of Ms. Longoria’s employment by us without “Cause” or by Ms. Longoria with “Good Reason” within 12 months following a “Change in Control” of the Company (as defined), Ms. Longoria shall be entitled to cash severance equal to 15 months of base salary plus target annual bonus for the year of termination, vesting of all equity awards and a payment equal to 15 months of our portion of group health insurance premiums.
Defined Contribution Plan
We sponsor a defined contribution plan intended to qualify under Section 401 of the Internal Revenue Code (the “Code”) as a 401(k) plan. Employees who are at least 21 years of age are generally eligible to participate and may enter the plan on the first day of any month following the employment start date. Participants may make pre-tax contributions or Roth 401(k) contributions up to the maximum limit established by the Code. 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 below age 50. Participant contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participant’s directions. Participants are immediately and fully vested in their contributions. We provide matching contributions under the plan of up to 100% of the first 50% of the participant’s elective contributions.
12
Outstanding Equity Awards at Fiscal Year-End
The following table presents information regarding the outstanding and unvested performance share units and outstanding and unexercised stock options held by each of the named executive officers as of December 31, 2022. None of the named executive officers held any outstanding restricted stock or other equity awards as of that date. None of the named executive officers listed in the above Summary Compensation Table who were not serving at the end of 2022 (David Giljohann, Ph.D., Brian C. Bock, and Douglas E. Feltner, Ph.D.,) held any outstanding and unvested stock awards or outstanding and unexercised stock options as of that date.
| Stock Awards | Option Awards | |||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Grant Date | Number of securities underlying unvested performance share units (#) | Market value of number of securities underlying unvested performance share units ($) | Vesting Commencement Date | Number of securities underlying unexercised options exercisable (#) | Number of securities underlying unexercised options unexercisable (#) | Option exercise price ($) | Option expiration date | ||||||||||||||||||||||||||||||||||||||||||
| Matthias G. Schroff, Ph.D. | 5/1/2018(1)(2) | 4/1/2018 | 11,500 | — | 5.51 | 5/1/2028 | ||||||||||||||||||||||||||||||||||||||||||||
4/27/2021(1)(3) | 4/27/2021 | 6,613 | 9,260 | 5.51 | 4/26/2031 | |||||||||||||||||||||||||||||||||||||||||||||
4/27/2021(1)(3) | 4/27/2021 | 833 | 1,167 | 5.51 | 4/26/2031 | |||||||||||||||||||||||||||||||||||||||||||||
5/16/2022(2) | 5/16/2022 | — | 77,485 | 3.46 | 5/16/2032 | |||||||||||||||||||||||||||||||||||||||||||||
5/16/2022(4) | 77,485 | 89,108 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Elias D. Papadimas | 2/15/2018(1)(2) | 1/2/2018 | 1,233 | — | 5.51 | 2/14/2028 | ||||||||||||||||||||||||||||||||||||||||||||
12/11/2019(1)(3) | 12/10/2019 | 2,499 | 834 | 5.51 | 12/9/2029 | |||||||||||||||||||||||||||||||||||||||||||||
4/27/2021(1)(3) | 4/27/2021 | 885 | 1,241 | 5.51 | 4/26/2031 | |||||||||||||||||||||||||||||||||||||||||||||
4/27/2021(1)(3) | 4/27/2021 | 1,666 | 2,334 | 5.51 | 4/26/2031 | |||||||||||||||||||||||||||||||||||||||||||||
5/16/2022(2) | 5/16/2022 | — | 14,133 | 3.46 | 5/16/2032 | |||||||||||||||||||||||||||||||||||||||||||||
5/16/2022(4) | 14,133 | 16,253 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Sarah Longoria | 3/22/2021(1)(2) | 3/22/2021 | 1,822 | 2,344 | 5.51 | 3/21/2031 | ||||||||||||||||||||||||||||||||||||||||||||
5/16/2022(2) | 5/16/2022 | — | 6,025 | 3.46 | 5/16/2032 | |||||||||||||||||||||||||||||||||||||||||||||
5/16/2022(5) | 6,025 | 6,929 | ||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | On March 24, 2022, our Board of Directors unanimously approved the repricing of all outstanding and unexercised stock options granted under our 2015 Equity Incentive Plan and 2017 Equity Incentive Plan and held by our current employees, executive officers, and directors. The exercise price of the eligible stock options was reduced to $5.51, the closing price of our common stock on April 1, 2022. | ||||
| (2) | One-fourth of the shares subject to these options vest on the first anniversary of the vesting commencement date, and the remainder of the shares subject to these options vest in 36 substantially equal monthly installments thereafter on the same day of the month as the vesting commencement date(or if there is no corresponding day, on the last day of such month), subject to the executive continuing to be employed by us through each applicable vesting date. Refer to “Employment Agreements” above for a description of the treatment of the equity awards held by Dr. Schroff and Mr. Papadimas upon their separations effective April 26, 2023 | ||||
| (3) | These options vest in 48 equal monthly installments, commencing on the vesting commencement date and subject to the executive continuing to be employed by us through the applicable vesting date. Refer to “Employment Agreements” above for a description of the treatment of the equity awards held by Dr. Schroff and Mr. Papadimas upon their separations effective April 26, 2023. | ||||
| (4) | Refer to “Employment Agreements” above for a description of the treatment of the equity awards held by Dr. Schroff and Mr. Papadimas upon their separations effective April 26, 2023. | ||||
| (5) | Certain performance metrics must be met by the performance measurement date in 2023 in order for the performance-based restricted stock units granted during 2022 to vest as follows: one-third on May 16, 2023, one-third on May 16, 2024, and one-third on May 16, 2025, in exchange for continued service provided by the performance-based restricted stock unit recipient during that vesting period. | ||||
13
Director Compensation
Under our non-employee director compensation policy, as amended, each of our non-employee directors is eligible to receive cash and equity compensation for service on our Board of Directors and committees of our Board of Directors.
2022 Director Compensation
Cash Compensation
During 2022, each non-employee director was eligible to receive an annual cash retainer of $40,000 for serving on the Board of Directors, and the chairperson of our Board of Directors was eligible to receive an additional annual cash retainer of $30,000. The program also provided that we compensate the members of the Board of Directors for service on our committees as follows:
•The chairperson of our Audit Committee was entitled to an annual cash retainer of $15,000, and each of the other members of the Audit Committee were entitled to an annual cash retainer of $7,500;
•The chairperson of our Compensation Committee was entitled to an annual cash retainer of $12,000, and each of the other members of the Compensation Committee were entitled to an annual cash retainer of $5,000; and
•The chairperson of our Nominating and Corporate Governance Committee was entitled to an annual cash retainer of $8,000, and each of the other members of the Nominating and Corporate Governance Committee were entitled to an annual cash retainer of $5,000.
Equity Compensation
In addition to cash compensation, each non-employee director was eligible to receive nonqualified stock options and/or restricted stock unit awards under our equity incentive plans. Any stock options granted under this policy were nonstatutory stock options, with a term of ten years from the date of grant, subject to earlier termination in connection with a termination of service. Each option granted under our director compensation program had an exercise price equal to the closing price of our common stock on the grant date.
Vesting schedules for equity awards were subject to the non-employee director’s continuous service on each applicable vesting date.
Initial Award
Each non-employee director who was newly elected or appointed to our Board was granted an initial, one-time equity award of options to purchase 100,000 shares of our common stock upon his or her appointment to the Board of Directors, with an exercise price equal to the closing price of our common stock on the date of grant. The initial award was scheduled to vest in 36 substantially equal monthly installments over three years from the date of grant, subject to the director’s continued service through each applicable vesting date.
Annual Award
On the business day following the date of each of our Annual Meeting of Stockholders, each continuing non-employee director was automatically granted an option to purchase 50,000 shares of our common stock, with an exercise price equal to the closing price of our common stock on the date of grant.
The annual awards were scheduled to vest in twelve substantially equal monthly installments, subject to the director’s continued service through each applicable vesting date.
14
Director Compensation Table
The following table presents information regarding the compensation earned for service by our non-employee directors during the year ended December 31, 2022. Mr. Bock and Dr. Schroff each served as a director in addition to serving as our Chief Executive Officer during the year ended December 31, 2022. Neither Mr. Bock nor Dr. Schroff received any additional compensation for their respective service as a director and accordingly, are not included in the table below.
| Name | Fees Earned or Paid In Cash ($) | Option Awards (1)(2) ($) | Total ($) | |||||||||||||||||
Jeffrey L. Cleland, Ph.D.(3) | 55,833 | 13,850 | 69,683 | |||||||||||||||||
Elizabeth Garofalo, M.D. (4) | 79,097 | 15,762 | 94,859 | |||||||||||||||||
Bosun Hau (5) | 5,542 | — | 5,542 | |||||||||||||||||
Jiyoung Hwang (6) | — | — | — | |||||||||||||||||
Bali Muralidhar, M.D., Ph.D.(7) | 14,417 | 14,101 | 28,518 | |||||||||||||||||
James Sulat (8) | — | 11,408 | 11,408 | |||||||||||||||||
Andrew Sassine (9) | 4,486 | — | 4,486 | |||||||||||||||||
Timothy P. Walbert (10) | 8,021 | — | 8,021 | |||||||||||||||||
| (1) | The amounts reported in this column reflect the grant date fair value of the option awards granted to the non-employee director during the year presented and do not reflect the actual amounts earned. Such grant date fair values do not take into account any estimated forfeitures related to service-based vesting conditions. These values have been determined in accordance with FASB ASC Topic 718. See Note 10 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC on March 27, 2023 for a discussion of the relevant assumptions used in calculating these amounts. The amounts in this column for 2022 for Dr. Cleland, Dr. Garofalo, Dr. Muralidhar, and Mr. Sulat also include the incremental fair value of outstanding awards as a result of the repricing of stock options effective April 1, 2022. | ||||
| (2) | As of December 31, 2022, each individual who served as a non-employee director during 2022 had outstanding options to purchase the following number of shares: Jeffrey L. Cleland, Ph.D., 5,501; Elizabeth Garofalo, M.D., 6,665; Bali Muralidhar, M.D., Ph.D., 4,668; James Sulat, 3,422. | ||||
| (3) | Dr. Cleland resigned from the Board of Directors effective February 10, 2023. | ||||
| (4) | Dr. Garofalo resigned from the Board of Directors effective February 24, 2023. | ||||
| (5) | Mr. Hau resigned from the Board of Directors effective February 4, 2022. | ||||
| (6) | Ms. Hwang was appointed to the Board of Directors effective December 30, 2022 and resigned effective January 16, 2023. | ||||
| (7) | Dr. Muralidhar resigned from the Board of Directors effective December 30, 2022. | ||||
| (8) | Mr. Sulat resigned from the Board of Directors effective December 30, 2022. | ||||
| (9) | Mr. Sassine resigned from the Board of Directors effective February 3, 2022. | ||||
| (10) | Mr. Walbert resigned from the Board of Directors effective February 4, 2022. | ||||
Changes to Director Compensation
Following the closing of the Private Placement in February 2023, each of our non-employee directors is entitled to an annual retainer of $20,000. None of our current non-employee directors have received any equity grants. We expect to evaluate our director compensation program going forward.
15
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Equity Compensation Plan Information
The following table provides information about the securities authorized for issuance under our equity compensation plans as of December 31, 2022, which as of that date consisted of our 2017 Equity Incentive Plan and 2017 Employee Stock Purchase Plan.
| Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted- average exercise price of outstanding options, warrants and rights(1) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | ||||||||||||||||||||||||||||||||
| (a) | (b) | (c) | |||||||||||||||||||||||||||||||||
| Equity compensation plans approved by stockholders | 341,361 | $ | 4.74 | 301,002 | (2) (3) | ||||||||||||||||||||||||||||||
| Equity compensation plans not approved by stockholders | - | - | - | ||||||||||||||||||||||||||||||||
| Total | 341,361 | $ | 4.74 | 301,002 | |||||||||||||||||||||||||||||||
| (1) | On March 24, 2022, our Board of Directors unanimously approved the repricing of all outstanding and unexercised stock options granted under our 2015 Equity Incentive Plan and 2017 Equity Incentive Plan and held by our current employees, executive officers, and directors. The exercise price of the eligible stock options was reduced to $5.51, the closing price of our common stock on April 1, 2022. | ||||
| (2) | Represents 259,031 and 41,971 shares of common stock available for issuance under the 2017 Equity Incentive Plan and 2017 Employee Stock Purchase Plan, respectively, as of December 31, 2022. | ||||
| (3) | The number of shares of common stock reserved for issuance under the 2017 Equity Incentive Plan automatically increases on January 1 of each year, beginning on January 1, 2020, by the lesser of (i) 153,333 shares, (ii) 5% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or (iii) a lesser number of shares determined by the Compensation Committee. Effective January 1, 2023, pursuant to the terms of the 2017 Equity Incentive Plan, the number of awards that are reserved and may be awarded under the 2017 Equity Incentive Plan was automatically increased by 153,333 awards. The number of shares of common stock reserved for issuance under the 2017 Employee Stock Purchase Plan automatically increases on January 1 of each year, beginning on January 1, 2018, by the lesser of (i) 10,000 shares of common stock, (ii) 0.3% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or (iii) such lesser number of shares determined by our Board. Effective January 1, 2023, pursuant to the terms of the 2017 Employee Stock Purchase Plan, the number of shares that are reserved and may be issued under the 2017 Employee Stock Purchase Plan was automatically increased by 10,000 shares. | ||||
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the ownership of our common stock as of April 27, 2023 by: (i) each of our directors and nominees for director; (ii) each of our named executive officers named in the 2022 Summary Compensation Table below; (iii) all of our current executive officers and directors as a group; and (iv) all those known by us to be beneficial owners of more than five percent of our common stock.
Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities, or have the right to acquire such powers within 60 days. Common stock subject to options that are currently exercisable or exercisable within 60 days of April 27, 2023 are deemed to be outstanding and beneficially owned by the person holding the options. These shares, however, are not deemed outstanding for the
16
purposes of computing the percentage ownership of any other person. Except as otherwise indicated, all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them. Percentage ownership calculations are based on 8,371,462 shares outstanding as of April 27, 2023, adjusted as required by rules promulgated by the SEC.
This table is based upon information supplied by our officers, directors and principal stockholders and Schedules 13D and 13G filed with the SEC. Except as otherwise noted below, the address for each executive officer and director listed in the table is c/o Exicure, Inc., 2430 N. Halsted Street, Chicago, Illinois 60614.
| Beneficial Ownership | ||||||||||||||
| Beneficial Owner Greater than 5% Stockholders | Number of Shares Beneficially Owned (#) | Percentage of Common Stock Beneficially Owned (%) | ||||||||||||
CBI USA, Inc. (1) | 4,218,299 | 50.4 | % | |||||||||||
| Directors and Named Executive Officers | ||||||||||||||
| Changil Ahn | — | * | ||||||||||||
| Cheolho Jo | — | * | ||||||||||||
| Paul Kang | — | * | ||||||||||||
| Hyukku Lee | — | * | ||||||||||||
| Seung Soo Shin | — | * | ||||||||||||
Matthias Schroff, Ph.D. (2) | 36,281 | * | ||||||||||||
Elias D. Papadimas (3) | 41,327 | * | ||||||||||||
Sarah Longoria (4) | 3,210 | * | ||||||||||||
Brian C. Bock (5) | — | * | ||||||||||||
David A. Giljohann, Ph.D. (6) | — | * | ||||||||||||
Douglas E. Feltner, M.D. (7) | — | * | ||||||||||||
All directors and executive officers as a group (7 persons) (8) | 3,210 | * | ||||||||||||
17
| * | Indicates beneficial ownership of less than one percent of the outstanding shares of common stock. | ||||
| (1) | The address of CBI USA is 3000 Western Avenue #400, Seattle, WA 98121. As a result of the closing of the Private Placement pursuant to the Securities Purchase Agreement on February 24, 2023, a change of control of the Company occurred. CBI USA became the beneficial owner of 50.4% of the Company’s outstanding shares and, as previously disclosed, pursuant to the board designation rights under the Securities Purchase Agreement, CBI USA designated three members to the Company’s board of directors effective as of February 24, 2023. CBI USA funded the acquisition pursuant to the Securities Purchase Agreement through a loan from an affiliate, Daehan Green Power Corporation (“DGP”). DGP is a Republic of Korea listed company that has overlapping board members with CBI Co., Ltd. (“CBI Co”), CBI USA’s Korean listed parent company, and the Chief Executive Officer of DGP is also the Chief Executive Officer of CBI USA and CBI Co. In addition, CBI Co is a significant investor in DGP. DGP provided a loan to CBI USA on February 22, 2023 in the form of an exchangeable bond in the principal amount of $5,440,000. The note has a two-year term, a 0% coupon and yield to maturity of 5% per annum. DGP would have the option to exchange the note for 3,400,000 shares of common stock from the three months of issuance to 5 business days before the maturity date. As a result, DGP may also be considered the beneficial owner of these 3,400,000 shares due to the right to acquire them upon exchange. However, CBI USA intends to repay the note prior to DGP exercising the option to exchange. | ||||
| (2) | Consists of (i) 250 shares of common stock and (ii) 36,031 shares of common stock issuable upon the exercise of options exercisable within 60 days of April 27, 2023. | ||||
| (3) | Consists of (i) 14,683 shares of common stock and (ii) 26,644 shares of common stock issuable upon the exercise of options exercisable within 60 days of April 27, 2023. | ||||
| (4) | Consists of 3,210 shares of common stock issuable upon the exercise of options exercisable within 60 days of April 27, 2023. | ||||
| (5) | Mr. Bock resigned as our Chief Executive Officer and a member of our Board of Directors effective February 4, 2022. In connection with Mr. Bock’s resignation from the Company on February 4, 2022, all stock options were forfeited. | ||||
| (6) | Dr. Giljohann was a named executive officer for fiscal year 2022. He resigned as a member of the Board, effective December 10, 2021. Effective January 31, 2022, Dr. Giljohann separated from the Company. Pursuant to the terms and conditions of a separation and transition agreement between us and Dr. Giljohann, dated as of January 31, 2022, Dr. Giljohann’s outstanding vested stock options as of January 31, 2022 remained exercisable until the earlier to occur of (a) December 10, 2022 and (b) the applicable option’s original expiration date; these options expired unexercised. | ||||
| (7) | Dr. Feltner was a named executive officer for fiscal year 2022. He separated from us effective January 30, 2022. Due to Dr. Feltner’s termination of employment, his outstanding stock options expired on April 30, 2022. | ||||
| (8) | Consists of (i) 0 shares of common stock held by members of our Board of Directors and current executive officers and (ii) 3,210 shares of common stock issuable upon the exercise of options exercisable within 60 days of April 27, 2023 held by all current executive officers and directors as a group. | ||||
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Certain Relationships and Related Party Transactions
Policies and Procedures for Related Party Transactions
Our Board of Directors adopted a written related person transaction policy to set forth the policies and procedures for the review and approval or ratification of related person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K promulgated under the Exchange Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we were or are to be a participant, where the amount involved exceeds or will exceed the lesser of $120,000 or 1% of the average of our total assets as of the end of the last two completed fiscal years and a related person had, has or will have a direct or indirect material interest, including purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. As provided by our Audit Committee charter, our Audit Committee is responsible for reviewing and approving in advance the related party transactions covered by our related transaction policies and procedures.
A related party transaction reviewed under the policy will be considered approved or ratified if it is authorized by the Audit Committee of our Board of Directors or the chairperson of the Audit Committee in accordance with the standards set forth in the policy after full disclosure of the related party’s interests in the transaction. As appropriate for the circumstances, the Audit Committee or the chairperson of the Audit Committee, as applicable, shall review and consider:
•the related party’s interest in the transaction;
•the approximate dollar value of the amount involved in the related party transaction;
•the approximate dollar value of the amount of the related party’s interest in the transaction without regard to the amount of any profit or loss;
18
•whether the transaction was undertaken in our ordinary course of business;
•whether the transaction with the related party is proposed to be, or was, entered into on terms no less favorable to us than terms that could have been reached with an unrelated third party;
•required public disclosure, if any; and
•any other information regarding the related party transaction in the context of the proposed transaction that would be material to investors in light of the circumstances of the particular transaction.
Related Party Transactions
The following is a description of related party transactions we have entered into since January 1, 2022 with our directors, executive officers and holders of more than 5% of our outstanding voting securities and their affiliates, whom we refer to as our related persons, in which the amount involved exceeds the lesser of $120,000 or 1% of the average of our total assets as of the end of the last two completed fiscal years, other than the compensation arrangements we describe in the sections titled “Director Compensation” and “Executive Compensation” in this Proxy Statement.
CBI USA Private Placement
On September 26, 2022, the Company entered into the Securities Purchase Agreement with CBI USA, pursuant to which the Company agreed to issue and sell to CBI USA in a private placement an aggregate of 3,400,000 shares of the Company’s common stock at a purchase price of $1.60 per share (the “Private Placement”). CBI USA was already a holder of more than 5% of our outstanding voting securities at the time we entered into the Securities Purchase Agreement as a result of a previous private placement completed in May 2022. The Private Placement closed on February 24, 2023.
Paul Kang Consulting Fees
The Company engaged entities controlled by Mr. Kang to provide business development consulting services in 2022. An aggregate of approximately $465,600 has been paid by the Company to the entities controlled by Mr. Kang for such services to date. Mr. Kang was not yet serving as a director at the time he was engaged to provide these services.
Indemnification of Directors and Officers
We have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us or will require us to indemnify each director and executive officer to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys’ fees, judgments, fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of Exicure, arising out of the person’s services as a director or executive officer.
Independence of the Board of Directors and Controlled Company Exemption
The following former directors who served on our Board of Directors at any point during 2022 or subsequent thereto were determined to be independent under the applicable Nasdaq standards, both generally and with respect to any committees on which they served during the year: Jeffrey L. Cleland, Ph.D., Elizabeth Garofalo, M.D., Bosun Hau, Bali Muralidhar, M.D., Ph.D., James Sulat, Andrew Sassine, and Timothy P. Walbert.
Upon consummation of the Private Placement, CBI USA became the owner of 50.4% of our outstanding shares of common stock, entitling us to rely on the “controlled company” exemption under Nasdaq rules. We are currently relying on Nasdaq’s “controlled company” exemption from the requirements that a majority of our board be independent and that we have an independent compensation committee and an independent nominating committee or function. Following the consummation of the Private Placement, our Board of Directors dissolved the Compensation Committee and Nomination and Corporate Governance Committee.
19
The following current directors were determined to be independent under the applicable Nasdaq standards: Changil Ahn, Cheolho Jo, and Hyukku Lee.
Item 14. Principal Accounting Fees and Services.
Independent Registered Public Accounting Firm Fees and Services
The following table sets forth the aggregate fees billed to us for the years ended December 31, 2022 and 2021 by KPMG LLP , Chicago, IL (PCAOB ID: 185 ), our independent registered public accounting firm for such years.
Year Ended December 31, | |||||||||||
| 2022 | 2021 | ||||||||||
Audit Fees(1) | $ | 440,000 | $ | 543,000 | |||||||
Audit-Related Fees(2) | 21,000 | 120,500 | |||||||||
| Total Fees | $ | 461,000 | $ | 663,500 | |||||||
| (1) | Audit fees for the fiscal years ended December 31, 2022 and 2021 consist of fees for professional services rendered in connection with the audit of our annual financial statements and review of our quarterly financial statements. | ||||
| (2) | Audit-related fees for the fiscal years ended December 31, 2022 and 2021 consist principally of fees for professional services rendered that are reasonably related to the performance of the audit or review of our financial statements and fees related to assistance with registration statements filed with the SEC. | ||||
All fees described above were pre-approved by the Audit Committee of the Board of Directors.
Pre-Approval Policies and Procedures
The Audit Committee has adopted policies and procedures for the pre-approval of audit and non-audit services provided by our independent registered public accounting firm. The policy generally requires pre-approval for specified services in the defined categories of audit services, audit-related services and tax services up to specified amounts. Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent registered public accounting firm or on an individual explicit case-by-case basis before the independent registered public accounting firm is engaged to provide each service. The pre-approval of services may be delegated to one or more of the Audit Committee’s members, but the decision must be reported to the full Audit Committee at its next scheduled meeting.
The Audit Committee will review both audit and non-audit services performed by the independent registered public accounting firm and the fees charged for such services on at least an annual basis. Among other things, the Audit Committee will review non-audit services proposed to be provided by the independent registered public accounting firm and pre-approve such services only if they are compatible with maintaining the independent registered public accounting firm’s status as an independent registered public accounting firm. All services provided by KPMG LLP in 2022 and 2021 were pre-approved by our Audit Committee after review of each of the services proposed for approval.
20
PART IV
Item 15. Exhibit and Financial Statement Schedules.
(a) The following documents are filed as part of this report:
1. See Index to Financial Statements on page 43 of our Annual Report.
2. Financial Statement Schedules - All financial statement schedules are omitted from our Annual Report because they are not applicable or the required information is included in the financial statements or notes thereto.
3. Exhibits
| Exhibit Number | Exhibit Description | Incorporated by Reference herein from Form or Schedule | Filing Date | SEC File/Reg. Number | ||||||||||||||||||||||||||||
| 3.1 | 10-K (Exhibit 3.3) | 3/11/2021 | 001-39011 | |||||||||||||||||||||||||||||
| 3.2 | 8-K (Exhibit 3.1) | 6/29/2022 | 001-39011 | |||||||||||||||||||||||||||||
| 3.3 | 8-K (Exhibit 3.4) | 10/2/2017 | 000-55764 | |||||||||||||||||||||||||||||
| 4.1 | 10-K (Exhibit 4.4) | 3/10/2020 | 001-39011 | |||||||||||||||||||||||||||||
| 10.1+ | 8-K (Exhibit 10.1) | 10/2/2017 | 000-55764 | |||||||||||||||||||||||||||||
| 10.2+ | 8-K (Exhibit 10.2) | 10/2/2017 | 000-55764 | |||||||||||||||||||||||||||||
| 10.3+ | 8-K (Exhibit 10.3) | 10/2/2017 | 000-55764 | |||||||||||||||||||||||||||||
| 10.4+ | 8-K (Exhibit 10.4) | 10/2/2017 | 000-55764 | |||||||||||||||||||||||||||||
| 10.5+ | 8-K (Exhibit 10.3) | 2/4/2022 | 001-39011 | |||||||||||||||||||||||||||||
| 10.6+ | 8-K (Exhibit 10.2) | 2/4/2022 | 001-39011 | |||||||||||||||||||||||||||||
| 10.7+ | 8-K (Exhibit 10.3) | 9/27/2022 | 001-39011 | |||||||||||||||||||||||||||||
| 10.8+ | 8-K (Exhibit 10.1) | 2/4/2022 | 001-39011 | |||||||||||||||||||||||||||||
| 10.9+ | 10-Q (Exhibit 10.3) | 8/12/2021 | 001-39011 | |||||||||||||||||||||||||||||
| 10.10+ | 8-K (Exhibit 10.2) | 1/18/2022 | 001-39011 | |||||||||||||||||||||||||||||
| 10.11+ | 8-K (Exhibit 10.4) | 9/27/2022 | 001-39011 | |||||||||||||||||||||||||||||
| 10.12+ | 10-K (Exhibit 10.20) | 3/25/2022 | 001-39011 | |||||||||||||||||||||||||||||
| 10.14+ | X | |||||||||||||||||||||||||||||||
| 10.15+ | X | |||||||||||||||||||||||||||||||
21
| 10.16+ | X | |||||||||||||||||||||||||||||||
| 10.17 | 10-Q (Exhibit 10.1) | 5/14/2020 | 001-39011 | |||||||||||||||||||||||||||||
| 10.18* | 8-K/A (Exhibit 10.20) | 11/7/2017 | 000-55764 | |||||||||||||||||||||||||||||
| 10.19.1* | 8-K/A (Exhibit 10.23) | 11/7/2017 | 000-55764 | |||||||||||||||||||||||||||||
| 10.19.2* | 10-K (Exhibit 10.22) | 3/10/2020 | 001-39011 | |||||||||||||||||||||||||||||
| 10.19.3* | 10-K (Exhibit 10.23) | 3/10/2020 | 001-39011 | |||||||||||||||||||||||||||||
| 10.19.4 | 10-K (Exhibit 10.24) | 3/10/2020 | 001-39011 | |||||||||||||||||||||||||||||
| 10.19.5 | 10- Q (Exhibit 10.5) | 11/19/2021 | 001-39011 | |||||||||||||||||||||||||||||
| 10.20* | 8-K/A (Exhibit 10.21) | 11/7/2017 | 000-55764 | |||||||||||||||||||||||||||||
| 10.21.1* | 10-K (Exhibit 10.26) | 3/10/2020 | 001-39011 | |||||||||||||||||||||||||||||
| 10.22.2 | 10-K (Exhibit 10.27) | 3/10/2020 | 001-39011 | |||||||||||||||||||||||||||||
| 10.23* | 8-K/A (Exhibit 10.22) | 11/7/2017 | 000-55764 | |||||||||||||||||||||||||||||
| 10.24* | 10-K (Exhibit 10.27) | 3/10/2020 | 001-39011 | |||||||||||||||||||||||||||||
| 10.25* | 8-K/A (Exhibit 10.24) | 11/7/2017 | 000-55764 | |||||||||||||||||||||||||||||
| 10.26* | 10-Q (Exhibit 10.2) | 5/8/2019 | 000-55764 | |||||||||||||||||||||||||||||
| 10.27 | 8-K/A (Exhibit 10.25) | 11/7/2017 | 000-55764 | |||||||||||||||||||||||||||||
| 10.28* | 8-K (Exhibit 10.2) | 12/14/2022 | 001-39011 | |||||||||||||||||||||||||||||
| 10.29* | 10-K (Exhibit 10.33) | 3/10/2020 | 001-39011 | |||||||||||||||||||||||||||||
| 10.30 | 10-K (Exhibit 10.34) | 3/10/2020 | 001-39011 | |||||||||||||||||||||||||||||
| 10.31 | 8-K (Exhibit 10.1) | 12/14/2022 | 001-39011 | |||||||||||||||||||||||||||||
22
| 10.32* | 10- Q (Exhibit 10.3) | 11/19/2021 | 001-39011 | |||||||||||||||||||||||||||||
| 10.33 | 10- Q (Exhibit 10.4) | 11/19/2021 | 001-39011 | |||||||||||||||||||||||||||||
| 10.34 | 8-K (Exhibit 10.1) | 5/13/2022 | 001-39011 | |||||||||||||||||||||||||||||
| 10.35 | 8-K (Exhibit 10.2) | 5/13/2022 | 001-39011 | |||||||||||||||||||||||||||||
| 10.36 | 8-K (Exhibit 10.1) | 9/27/2022 | 001-39011 | |||||||||||||||||||||||||||||
| 10.37 | 8-K (Exhibit 10.2) | 9/27/2022 | 001-39011 | |||||||||||||||||||||||||||||
| 21.1 | X | |||||||||||||||||||||||||||||||
| 23.1 | X | |||||||||||||||||||||||||||||||
| 24.1 | X | |||||||||||||||||||||||||||||||
| 31.1 | X | |||||||||||||||||||||||||||||||
| 31.1.1 | XX | |||||||||||||||||||||||||||||||
| 31.2 | X | |||||||||||||||||||||||||||||||
| 32.1** | X | |||||||||||||||||||||||||||||||
| 101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | X | ||||||||||||||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||||||||||||||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||||||||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||||||||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||||||||||||||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | X | ||||||||||||||||||||||||||||||
X – Indicates filed with Annual Report.
XX – Indicates filed with this Amendment No. 1.
+ Indicates a management contract or compensatory plan.
* Indicates that portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
** This certification is not deemed filed with the SEC and is not to be incorporated by reference into any filing of Exicure, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended
23
(whether made before or after the date of such Form 10-K), irrespective of any general incorporation language contained in such filing.
24
SIGNATURES
Pursuant to the requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Amendment No. 1 to Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on May 1, 2023.
| EXICURE, INC. | ||||||||
| By: | /s/ Jung Sang Kim | |||||||
| Jung Sang Kim | ||||||||
Chief Executive Officer and Chief Financial Officer | ||||||||
25
Exhibit 10.14
Employment Agreement
This Employment Agreement (the “Agreement”) between Exicure, Inc., a Delaware corporation (the “Company”), and Sarah Longoria (the “Executive”) (each of the Executive and the Company, a “Party,” and collectively, the “Parties”), is entered into as of March 5th, 2021.
Whereas, the Executive desires to be employed by the Company as “Vice President of Human Resources” and to perform duties to the Company on the terms and conditions hereinafter set forth; and
Now, Therefore, in consideration of the mutual covenants contained herein and other valid consideration, the sufficiency of which is acknowledged, the Parties hereto agree as follows:
1.Employment. Executive’s employment under this Agreement shall commence on March 22nd, 2021 (the “Effective Date”) and shall continue until the termination of Executive’s employment under this Agreement. The period from the Effective Date until the termination of Executive’s employment under this Agreement is referred to as the “Employment Period.”
2.Position and Duties. Subject to the terms and conditions of this Agreement, Executive shall serve as the “Head of Human Resources” of the Company and shall have the duties, responsibilities and authority of an executive serving in such position, reporting and subject to the direction of the Chief Executive Officer of the Company or other duly authorized executive. Executive shall devote Executive’s full business time and efforts to the business and affairs of the Company and its subsidiaries. Executive shall not become a director of any for-profit entity without first receiving the approval of the Nominating and Corporate Governance Committee of the Board.
3.Compensation and Benefits.
(a)Base Salary. As compensation for Executive’s performance of Executive’s duties hereunder, Executive shall receive a base salary at the rate of two hundred eighty-five thousand ($285,000.00) per year (the “Base Salary”), subject to standard payroll deductions and withholdings and payable in accordance with the Company’s regular payroll schedule. Executive’s Base Salary shall be reviewed by the Board for possible adjustment annually. The Base Salary shall be reviewed for adjustments by the Compensation Committee of the Board (the “Compensation Committee”) in good faith, based upon Executive’s performance and the Company’s pay philosophy, not less often than annually, provided, that Executive’s Base Salary may be decreased as part of an across-the-board reduction in base salaries of all Company executive officers so long as the percentage reduction in Executive’s Base Salary is not greater than the percentage reduction applicable to other executive officers. The term “Base Salary” shall refer to the Base Salary as may be in effect from time to time.
(b)Annual Incentive Compensation. Executive shall be eligible to participate in the annual cash bonus program maintained for executive officers of the Company (the “Annual Incentive Program”). Executive’s minimum target annual bonus shall be equal to at least 25% of Base Salary for each year during the Employment Period in which Executive participates in the
1
Annual Incentive Program. The actual amount of the annual bonus earned by and payable to Executive in any year shall be determined upon the satisfaction of goals and objectives established by the Compensation Committee and communicated to Executive, and shall be subject to such other terms and conditions of the Annual Incentive Program as in effect from time to time. Each bonus paid under the Annual Incentive Program shall be paid to Executive no later than March 15th of the calendar year following the calendar year in which the bonus is earned.
(c)Subject to approval by the Board, the Company shall grant Executive an option (the “Option”) to purchase 125,000 shares of the Company’s common stock, with an exercise price equal to the fair market value of a share of common stock as determined by the Board as of the date of grant, pursuant to the terms of the Company’s 2017 Equity Incentive Plan (the “Plan”) and the individual stock option grant notice and related agreements to be provided to the Executive. The Option will vest subject to the terms and conditions of the Plan and Executive’s grant agreement, with 25% of the shares subject to the Option vesting upon the first anniversary of the Effective Date and the remaining 75% of the shares subject to the Option vesting over the subsequent 3-year period in substantially equal monthly installments at a rate of 1/48th of the total shares subject to the Option each month, subject to Executive’s continuous service as of each such vesting date.
(d)Other Benefits.
(i)Savings and Retirement Plans. Except as otherwise limited by applicable law, Executive shall be entitled to participate in all qualified and non-qualified savings and retirement plans applicable generally to other senior executive officers of the Company, in accordance with the terms of the plans, as may be amended from time to time.
(ii)Welfare Benefit Plans. Except as otherwise limited by applicable law, Executive and/or Executive’s eligible dependents shall be eligible to participate in and shall receive all benefits under the Company’s welfare benefit plans and programs applicable generally to other senior executive officers of the Company, in accordance with the terms of the plans, as may be amended from time to time.
(iii)Perquisites. Except as otherwise limited by applicable law, Executive shall be entitled to such perquisites as may be available generally from time to time to other senior executive officers of the Company, but at levels commensurate with executive’s position as Vice President of Human Resources and Talent Acquisitions.
(iv)Business Expenses. Subject to Section 14, Executive shall be reimbursed for reasonable travel and other expenses incurred in the performance of Executive’s duties on behalf of the Company in a manner consistent with the Company’s policies regarding such reimbursements, as may be in effect from time to time.
4.Termination of Employment.
(a)Executive’s employment under this Agreement shall terminate upon the earliest to occur of: (i) the expiration of the term of this Agreement pursuant to Section 1 hereof;
(ii) Termination due to Disability (as defined below); (iii) termination of Executive’s employment by the Company for any reason other than Termination due to Disability; (iv) Executive’s death;
2
or (v) termination of Executive’s employment by Executive for any reason. Upon the termination of Executive’s employment with the Company for any reason, Executive shall be deemed to have resigned from all positions with the Company or any of its affiliates held by Executive as of the date immediately preceding Executive’s termination of employment.
(b)If Executive’s employment ends for any reason, except as otherwise contemplated in this Section 4, Executive shall cease to have any rights to salary, bonus (if any) or other benefits, other than (i) the earned but unpaid portion of Executive’s Base Salary through the date of termination or resignation, (ii) any annual, long-term, or other incentive award that relates to a completed fiscal year or performance period, as applicable, and is payable (but not yet paid) on or before the date of termination or resignation, which shall be paid in accordance with the terms of such award, (iii) a lump-sum payment in respect of accrued but unused vacation days at the Executive’s per-business-day Base Salary rate, (iv) any unpaid expense or other reimbursements due to Executive, and (v) any other amounts or benefits required to be paid or provided by law or under any plan, program, policy or practice of the Company, provided that Executive shall not be entitled to any payment or benefit under any severance plan maintained by the Company.
(c)Termination without Cause or for Good Reason in Connection with a Change in Control. If Executive’s employment hereunder shall be terminated by the Company without Cause, or by Executive for Good Reason, in either case within 12 months following a Change in Control then, in addition to the payments and benefits described in Section 4(b) and subject to Executive’s execution and non-revocation of the release contemplated in Section 4(e) of this Agreement and Executive’s continuing compliance with the Company's Confidential Information Agreement (as defined below):
(i)The Company shall pay Executive continuation of twelve (12) months (“Benefit Period”) of Executive’s annual Base Salary, as in effect immediately prior to Executive’s termination of employment hereunder, payable during the 12-month period following Executive’s termination of employment in the form of salary continuation in accordance with the Company’s normal payroll practices;
(ii)The Company shall pay Executive an annual cash bonus equal to Executive’s annual target bonus as set forth in Section 3(b) for the year in which the termination of employment occurs, payable by the later of (A) the same date as annual cash bonuses are paid to senior management for the calendar year in which Executive’s termination occurs; or (B) 30 days after the effective date of the release contemplated in Section 4(e);
(iii)All equity awards, to the extent outstanding as of immediately prior to such termination, will be (or will be deemed to have been) fully vested and exercisable as of immediately prior to the latter of: (1) the date of termination and (2) the date of the Change in Control;
(iv)If the Executive timely elects to receive continued coverage under the Company’s group health care plan pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall pay the employer
3
portion of applicable COBRA premium payments for the Executive’s and, as applicable, Executive’s dependents’, continued health coverage under such plan (as in effect or amended from time to time) (the “COBRA Subsidy”) until the earlier of: (1) twelve (12) months following the Executive’s termination of employment, or (2) the date upon which the Executive obtains or becomes eligible for other health care coverage from a new employer or otherwise (such period referred to as the “COBRA Subsidy Period”). The Executive shall promptly inform the Company in writing when Executive obtains or becomes eligible for any such other health care coverage. The Executive shall be responsible for paying a share of such COBRA premiums during the COBRA Subsidy Period at active employee rates as in effect from time to time, and shall be responsible for the full unsubsidized costs of such COBRA coverage thereafter.
(d)Section 280G. Notwithstanding anything to the contrary in this Agreement, Executive expressly agrees that if the payments and benefits provided for in this Agreement or any other payments and benefits which Executive has the right to receive from the Company and its affiliates (collectively, the “Payments”), would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the Payments shall be either (a) reduced (but not below zero) so that the present value of the Payments will be one dollar ($1.00) less than three times Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code) and so that no portion of the Payments received by Executive shall be subject to the excise tax imposed by Section 4999 of the Code or (b) paid in full, whichever produces the better net after-tax position to Executive. The reduction of Payments, if any, shall be made by reducing first any Payments that are exempt from Section 409A of the Code and then reducing any Payments subject to Section 409A of the Code in the reverse order in which such Payments would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time). The determination as to whether any such reduction in the Payments is necessary shall be made by the Compensation Committee in good faith. If a reduced Payment is made or provided and, through error or otherwise, that Payment, when aggregated with other payments and benefits from Company (or its affiliates) used in determining if a “parachute payment” exists, exceeds one dollar ($1.00) less than three times Executive’s base amount, then Executive shall immediately repay such excess to the Company.
(e)Release. Executive’s execution of a complete and general release of any and all of Executive’s potential claims (other than for benefits and payments described in this Agreement or any other vested benefits with the Company and/or its affiliates) against the Company, any of its affiliated companies, and their respective successors and any officers, employees, agents, directors, attorneys, insurers, underwriters, and assigns of the Company or its affiliates and/or successors, is an express condition of Executive’s right to receive the payments and benefits set forth in Section 4(c). Executive shall be required to execute within 45 days after Executive’s termination of employment a general waiver and release agreement in a form reasonably satisfactory to the Company.
(f)Certain Definitions.
“Cause” shall mean the occurrence of any one of the following:
4
(i)gross negligence or willful misconduct in the performance of, or Executive’s abuse of alcohol or drugs rendering Executive unable to perform the material duties and services required for Executive’s position with the Company;
(ii)Executive’s conviction or plea of nolo contendere for any crime involving moral turpitude or a felony;
(iii)Executive’s commission of an act of deceit or fraud intended to result in personal and unauthorized enrichment of Executive at the expense of the Company or any of its affiliates; or
(iv)Executive’s material violation of the written policies of the Company or any of its affiliates (including ethics and compliance policies, as in effect from time to time), Executive’s material breach of a material obligation of Executive to the Company pursuant to Executive’s duties and obligations under the Company’s Bylaws, or Executive’s material breach of a material obligation of Executive to the Company or any of its affiliates pursuant to this Agreement or any award or other agreement between Executive and the Company or any of its affiliates.
“Change in Control” shall be deemed to have occurred upon the occurrence of any of the following events:
(i)The acquisition, other than from the Company, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either the then outstanding shares of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, but excluding, for this purpose, any such acquisition by the Company or any of its subsidiaries, or any employee benefit plan (or related trust) of the Company or its subsidiaries, or any corporation with respect to which, following such acquisition, more than 50% of, respectively, the then outstanding shares of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of all or substantially all directors is then beneficially owned, directly or indirectly, by the individuals and entities who were the beneficial owners, respectively, of shares and voting securities of the Company immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the then outstanding shares of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, as the case may be;
(ii)The consummation of a reorganization, merger or consolidation of the Company, in each case, with respect to which all or substantially all of the individuals and entities who were the respective beneficial owners of shares and voting securities of the Company immediately prior to such reorganization, merger or consolidation do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares and the combined voting power of the then
5
outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such reorganization, merger or consolidation;
(iii)During any twenty-four (24) month period, individuals who, as of the beginning of such period, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the beginning of such period whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director; or
(iv)a complete liquidation or dissolution of the Company or of the sale or other disposition of all or substantially all of the assets of the Company.
In no event shall a Change in Control include the initial public offering of the Company registered on Form S-1 (or any successor form under the Securities Act of 1933, as amended) (the “Initial Public Offering”) or any bona fide primary or secondary public offering following the occurrence of the Initial Public Offering.
“Good Reason” shall mean the existence of any of the following:
(i)a material diminution in Executive’s authority, duties, or responsibilities from those applicable to Executive as of the Effective Date;
(ii)a material diminution in Executive’s annual Base Salary, except to the extent contemplated by Section 3(b) of this Agreement;
(iii)a relocation of Executive’s principal place of employment by more than 50 miles from the location where Executive was assigned to work immediately prior to such relocation, which for purposes of this Agreement shall mean the Company requiring Executive to be permanently based in a location that is more than 50 miles from either (A) the Executive’s assigned Company office if such office is assigned, or (B) if Executive is assigned to work remotely, from the approved remote work location; or
(iv)a material breach by the Company of any provision of this
Agreement.
Notwithstanding the foregoing or any other provision in this Agreement to the contrary, any assertion by Executive of a Good Reason termination shall not be effective unless all of the following conditions are satisfied:
(i)the conditions described in the preceding sentence giving rise to Executive’s termination of employment must have arisen without Executive’s written consent;
6
(ii)Executive must provide written notice to the Company of such condition and Executive’s intent to terminate employment within 90 days after the initial existence of the condition;
(iii)the condition specified in such notice must remain uncorrected for 30 days after receipt of such notice by the Company; and
(iv)the date of Executive’s termination of employment must occur within 90 days after the notice provided by Executive pursuant to clause (ii).
“Termination due to Disability” shall mean Executive’s termination of employment as a result of Executive becoming incapacitated for a period of at least 180 days by accident, sickness or other circumstance that renders Executive mentally or physically incapable of performing the material duties as Vice President of Human Resources and Talent Acquisitions.
5.Confidential Information and Inventions Assignment Obligations.
As a condition of employment, Executive agrees to execute and abide by an Employee Confidential Information, Inventions, Non-Solicitation and Non-Competition Agreement attached as Exhibit A (“Confidential Information Agreement”), which may be amended by the parties from time to time without regard to this Agreement. The Confidential Information Agreement contains provisions that are intended by the parties to survive and do survive termination of this Agreement
6.Survival. Sections 5, 6, 8, 9 and 14 hereof shall survive and continue in full force and effect in accordance with their respective terms, notwithstanding any termination of the Employment Period.
7.Notices. Any notice provided for in this Agreement shall be in writing and shall be delivered (i) personally, (ii) by certified mail, postage prepaid, (iii) by Federal Express or other reputable courier service regularly providing evidence of delivery (with charges paid by the party sending the notice), or (iv) by facsimile or a PDF or similar attachment to an email. Any such notice to a party shall be addressed at the address set forth below (subject to the right of a party to designate a different address for itself by notice similarly given):
If to the Company:
Exicure, Inc.
2430 N. Halsted St. Chicago, Illinois 60614 c/o davidg@exicuretx.com
If to Executive:
Sarah Longoria
At the most recent address on file with the Company.
7
8.Entire Agreement. This Agreement, including the Confidential Information Agreement, constitutes the entire agreement and understanding between the parties with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or between the parties, written or oral, which may have related in any manner to the subject matter hereof.
9.No Conflict. Executive represents and warrants that Executive is not bound by any employment contract, restrictive covenant, or other restriction preventing Executive from carrying out Executive’s responsibilities for the Company, or which is in any way inconsistent with the terms of this Agreement. Executive further represents and warrants that Executive shall not disclose to the Company or induce the Company to use any confidential or proprietary information or material belonging to any previous employer or others.
10.Successors and Assigns. This Agreement shall inure to the benefit of and be enforceable by Executive and Executive’s heirs, executors and personal representatives, and the Company and its successors and assigns. Any successor or assignee of the Company shall assume the liabilities of the Company hereunder.
11.Governing Law. This Agreement shall be governed by the internal laws (as opposed to the conflicts of law provisions) of the State of Illinois.
12.Amendment and Waiver. The provisions of this Agreement may be amended or waived only with the prior written consent of the Company and Executive, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement.
13.Withholding. All payments and benefits under this Agreement are subject to withholding of all applicable taxes.
14.Code Section 409A. This Agreement is intended to comply with the requirements of Section 409A of the Code, and shall be interpreted and construed consistently with such intent. The payments to Executive pursuant to this Agreement are also intended to be exempt from Section 409A of the Code to the maximum extent possible, under either the separation pay exemption pursuant to Treasury regulation §1.409A-1(b)(9)(iii) or as short-term deferrals pursuant to Treasury regulation §1.409A-1(b)(4), and for such purposes, each payment to Executive under this Agreement shall be considered a separate payment. In the event the terms of this Agreement would subject Executive to taxes or penalties under Section 409A of the Code (“409A Penalties”), the Company and Executive shall cooperate diligently to amend the terms of the Agreement to avoid such 409A Penalties, to the extent possible. To the extent any amounts under this Agreement are payable by reference to Executive’s “termination of employment” such term and similar terms shall be deemed to refer to Executive’s “separation from service,” within the meaning of Section 409A of the Code. Notwithstanding any other provision in this Agreement, to the extent any payments made or contemplated hereunder constitute nonqualified deferred compensation, within the meaning of Section 409A, then (i) each such payment which is conditioned upon Executive’s execution of a release and which is to be paid or provided during a designated period that begins in one taxable year and ends in a second taxable year, shall be paid or provided in the later of the two taxable years and (ii) if Executive is a specified employee (within the meaning of Section
8
409A of the Code) as of the date of Executive’s separation from service, each such payment that is payable upon Executive’s separation from service and would have been paid prior to the six- month anniversary of Executive’s separation from service, shall be delayed until the earlier to occur of (A) the first day of the seventh month following Executive’s separation from service or
(B) the date of Executive’s death. Any reimbursement payable to Executive pursuant to this Agreement shall be conditioned on the submission by Executive of all expense reports reasonably required by Company under any applicable expense reimbursement policy, and shall be paid to Executive within 30 days following receipt of such expense reports, but in no event later than the last day of the calendar year following the calendar year in which Executive incurred the reimbursable expense. Any amount of expenses eligible for reimbursement, or in-kind benefit provided, during a calendar year shall not affect the amount of expenses eligible for reimbursement, or in-kind benefit to be provided, during any other calendar year. The right to any reimbursement or in-kind benefit pursuant to this Agreement shall not be subject to liquidation or exchange for any other benefit.
15.Clawbacks. The payments to Executive pursuant to this Agreement are subject to forfeiture or recovery by the Company or other action pursuant to any clawback or recoupment policy which the Company may adopt from time to time, including without limitation any such policy or provision that the Company has included in any of its existing compensation programs or plans or that it may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law.
16.Company Policies. Executive shall be subject to additional Company policies as they may exist from time-to-time, including but not limited to the Confidential Information Agreement, the Company’s Code of Business Conduct and Ethics, Security Trading Policy (pursuant to which Executive may be determined by the Chief Financial Officer of the Company to be a Restricted Person), and other applicable policies with regard to stock ownership by senior executives and/or regarding trading of securities.
[Signature Page to Follow]
9
In Witness Whereof, the parties hereto have executed this Agreement as of the date first written above.
Exicure, Inc.
/s/ David Giljohann
Name: David Giljohann
Title: Chief Executive Officer
Sarah Longoria
/s/ Sarah Longoria
10
EXHIBIT A
Confidentiality, Non-Hire, Non-Disparagement, and Work Product Agreement
Exhibit 10.15
FIRST AMENDMENT TO THE EMPLOYMENT AGREEMENT OF SARAH LONGORIA
This FIRST AMENDMENT TO THE EMPLOYMENT AGREEMENT OF SARAH LONGORIA (the “Amendment”) is effective as of the 10th day of December 2021 (the “Effective Date”), by and between SARAH LONGORIA (the “Executive”) and EXICURE, INC. (the “Company”) (each of the Executive and the Company, a “Party,” and collectively, the “Parties”).
Recitals
WHEREAS, the Company and the Executive have entered into that certain Employment Agreement effective March 5, 2021 (the “Executive Agreement”); and
WHEREAS, the Company and the Executive desire to employ the Executive as its Chief Human Resources Officer and Chief Compliance Officer and the Executive desires to accept such employment and to perform the duties to the Company on the terms and conditions hereinafter set forth in this Amendment; and
WHEREAS, the Company and the Executive wish to amend the Executive Agreement as set forth in this Amendment.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other valid consideration, the sufficiency of which is acknowledged, the Parties hereto agree as follows:
Agreement
1.Amendment to Section 2. Section 2 of the Executive Agreement is hereby and replaced in its entirety as follows:
2.Position and Duties. Subject to the terms and conditions of this Agreement, Executive shall serve as Chief Human Resources Officer and Chief Compliance Officer of the Company and shall have the duties, responsibilities and authority of an executive serving in such position, reporting and subject to the direction of the Chief Executive Officer of the Company or other duly authorized executive. Executive shall devote Executive’s full business time and efforts to the business and affairs of the Company and its subsidiaries. Executive shall not become a director of any for-profit entity without first receiving the written approval of the Nominating and Corporate Governance Committee of the Board of Directors.
2.Amendment to Section 3.
a.Section 3(a) is hereby replaced in its entirety as follows:
(a) Base Salary. As compensation for Executive’s performance of Executive’s duties hereunder, Executive shall receive a base salary at the rate of three hundred thousand ($300,000) per year (the “Base Salary”), subject to standard payroll deductions and withholdings and payable in accordance with the Company’s
1
normal payroll practices. Executive’s Base Salary shall be reviewed by the Board for possible adjustment annually. The Base Salary shall be reviewed for adjustments by the Compensation Committee of the Board (the “Compensation Committee”), and the Compensation Committee may, but is not required to, amend the Base Salary. The term “Base Salary” shall refer to the Base Salary as may be in effect from time to time.
b.Section 3(b) is hereby amended as follows: “25%” is replaced with “40%.”
c.Section 3(e) is hereby added as a new paragraph immediately following subsection 3(d), as follows:
(e) Retention Award. Subject to Executive’s continued employment in good standing from the Effective Date through May 31, 2022 (the “Retention Period”), the Company will pay Executive a one-time retention award of $99,750 (the “Retention Award”), subject to applicable tax withholdings. Fifty percent (50%) of the Retention Award will be paid on February 15, 2022 (the “February 2022 Portion”), and fifty percent (50%) of the Retention Award will be paid to Executive within ten (10) days after the completion of the Retention Period. Both such portions of the Retention Award shall become earned upon the completion of the Retention Period. If Executive’s employment terminates for Cause or if Executive voluntarily resigns, in either case prior to completion of the Retention Period, but after receipt of the February 2022 Portion, Executive will be required to repay the February 2022 Portion. Executive acknowledges and agrees that any such repayment of the unearned Retention Award shall be made by Executive no later than thirty (30) days after Executive’s employment ends.
It is intended that the Retention Award satisfies, to the greatest extent possible, the exemption from the application of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) provided under Treasury Regulations Section 1.409A-1(b)(4) and in all cases will be paid not later than March 15 of the year following the year in which your right to such amount became vested.
3.Amendment to Section 4.
a.Section 4(c)(i) of the Executive Agreement is hereby and replaced in its entirety as follows:
The Company shall pay Executive continuation of Executive’s annual Base Salary, as in effective immediately prior to Executive’s termination of employment hereunder, payable during the 15-month period following Executive’s termination of employment in the form of salary continuation in accordance with the Company’s normal payroll practices;
b.Section 4(c)(iii) of the Executive Agreement is hereby and replaced in its entirety as follows:
2
If the Executive timely elects to receive continued coverage under the Company’s group health care plan pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall pay the employer portion of applicable COBRA premium payments for the Executive’s and, as applicable, Executive’s dependents’, continued health coverage under such plan (as in effect or amended from time to time) (the “COBRA Subsidy”) until the earlier of: (1) fifteen (15) months following the Executive’s termination of employment, or (2) the date upon which the Executive obtains or becomes eligible for other health care coverage from a new employer or otherwise (such period referred to as the “COBRA Subsidy Period”). The Executive shall promptly inform the Company in writing when Executive obtains or becomes eligible for any such other health care coverage. The Executive shall be responsible for paying a share of such COBRA premiums during the COBRA Subsidy Period at active employee rates as in effect from time to time, and shall be responsible for the full unsubsidized costs of such COBRA coverage thereafter.
c.Section 4(g) of the Executive Agreement is hereby added as a new paragraph immediately following subsection 4(f), as follows:
(g)Termination without Cause or for Good Reason. If Executive's employment hereunder shall be terminated by the Company without Cause, or by Executive for Good Reason, then in addition to the payments and benefits described in Section 4(b) and subject to Executive’s execution and non-revocation of the release contemplated in Section 4(e) of this Agreement and Executive's continuing compliance with the Confidentiality and Work Product Assignment Agreement (as defined below):
(i)the Company shall pay Executive continuation of six (6) months of Executive’s annual Base Salary, as in effective immediately prior to Executive’s termination of employment hereunder, payable during the 6-month period following Executive’s termination of employment in the form of salary continuation in accordance with the Company’s normal payroll practices;
(ii)the Company shall pay Executive an annual cash bonus for the year of termination, payable at the same time as annual cash bonuses are paid to senior management, based on actual achievement of performance targets (as if Executive had remained employed through the end of the applicable performance period), subject, however, to proration based on the number of days in the applicable performance period that had elapsed prior to the date of termination; and
(iii)if the Executive timely elects to receive continued coverage under the Company’s group health care plan pursuant to COBRA, the Company shall pay the employer portion of applicable COBRA premium payments for the Executive's and, as applicable, Executive’s dependents’, continued health coverage under such plan (as in effect or amended from time to time) (the “COBRA Subsidy”) until the earlier of: (1) twelve (12) months following the Executive's termination of employment, or (2) the date upon which the Executive obtains or becomes eligible for other health care coverage from a new employer or otherwise (such period referred to as the “COBRA Subsidy Period”). The Executive shall promptly inform
3
the Company in writing when Executive obtains or becomes eligible for any such other health care coverage. The Executive shall be responsible for paying a share of such COBRA premiums during the COBRA Subsidy Period at active employee rates as in effect from time to time, and shall be responsible for the full unsubsidized costs of such COBRA coverage thereafter.
4.The Company and the Executive further agree that this Amendment does not constitute grounds for “Good Reason” pursuant to Section 4(c) of the Executive Agreement, or otherwise constitute any trigger for the Company’s payment of any severance benefits to Executive pursuant to the Executive Agreement.
5.The Executive will continue to abide by Company rules and policies. Executive reaffirms, acknowledges and agrees to continue to comply with the Confidentiality, Non-Hire, Non-Disparagement, and Work Product Agreement, which Executive signed on March 9, 2021 (the “Confidentiality and Work Product Assignment Agreement”) and which prohibits unauthorized use or disclosure of the Company’s proprietary information, among other obligations.
6.The Executive confirms that she has read this Amendment, understands the terms thereof and has had sufficient opportunity to obtain independent legal advice.
7.Except as modified or amended in this Amendment, no other term or provision of the Executive Agreement is amended or modified in any respect. The Executive Agreement, and its exhibits, along with this Amendment, set forth the entire understanding between the Parties with regard to the subject matter hereof and supersedes any prior oral discussions or written communications and agreements. This Amendment cannot be modified or amended except in writing signed by the Executive and an authorized officer of the Company.
[Signature page follows]
4
The Parties have executed this FIRST AMENDMENT TO THE EMPLOYMENT AGREEMENT OF SARAH LONGORIA on the day and year first written above.
Exicure, Inc.
/s/ Matthias Schroff
Matthias Schroff
Chief Executive Officer
Executive
/s/ Sarah Longoria
Sarah Longoria
5
Exhibit 10.16
SECOND AMENDMENT TO THE EMPLOYMENT AGREEMENT OF SARAH LONGORIA
This Second Amendment To The Employment Agreement Of Sarah Longoria (the “Amendment”) is effective as of the 23rd day of September, 2022 (the “Effective Date”), by and between Sarah Longoria (the “Executive”) and EXICURE, INC. (the “Company”) (each of the Executive and the Company, a “Party,” and collectively, the “Parties”).
RECITALS
WHEREAS, the Company and the Executive have entered into that certain Employment Agreement effective March 5, 2021 (the “Executive Agreement”);
WHEREAS, the Company and Executive amended the Executive Agreement pursuant to that certain First Amendment to the Executive Agreement on December 10, 2021 (the “First Amendment”); and
WHEREAS, the Company and the Executive wish to amend the Executive Agreement and the First Amendment as set forth in this Amendment.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other valid consideration, the sufficiency of which is acknowledged, the Parties hereto agree as follows:
AGREEMENT
1.Amendments to Section 4.
a.Section 4(c)(i) of the Executive Agreement is hereby amended and restated in its entirety as follows:
“The Company shall pay Executive a lump sum amount equal to fifteen (15) months of Base Salary, less applicable withholdings and deductions, payable within sixty (60) days following Executive’s termination from employment;”
b.To address a typographical error contained in the First Amendment, Section 4(c)(iii) of the Executive Agreement is hereby amended and restated in its entirety as follows:
“All equity awards, to the extent outstanding as of immediately prior to such termination, will be (or will be deemed to have been) fully vested and exercisable as of immediately prior to the latter of: (1) the date of termination and (2) the date of the Change in Control; and”
c.Section 4(c)(iv) of the Executive Agreement is hereby amended and restated in its entirety as follows:
“The Company shall pay Executive a lump sum amount equal to fifteen (15) months of the employer portion of Executive’s group health insurance premiums, as in effect immediately prior to the termination of employment, less applicable withholdings and deductions, payable within sixty (60) days following Executive’s termination from employment.”
1.
d.Section 4(g) of the Executive Agreement, which was added in the First Amendment, is hereby amended and restated in its entirety as follows:
“(g) Termination without Cause or for Good Reason. If Executive's employment hereunder shall be terminated by the Company without Cause, or by Executive for Good Reason, then in addition to the payments and benefits described in Section 4(b) and subject to Executive’s execution and non-revocation of the release contemplated in Section 4(e) of this Agreement and Executive's continuing compliance with the Confidentiality and Work Product Assignment Agreement (as defined below):
(i) The Company shall pay Executive a lump sum amount equal to six (6) months of Base Salary as in effect immediately prior to Executive’s termination of employment hereunder, less applicable withholdings and deductions, payable within sixty (60) days following Executive’s termination from employment.
(ii) the Company shall pay Executive an annual cash bonus for the year of termination, payable at the same time as annual cash bonuses are paid to senior management, based on actual achievement of performance targets (as if Executive had remained employed through the end of the applicable performance period), subject, however, to proration based on the number of days in the applicable performance period that had elapsed prior to the date of termination; and
(iii) the Company shall pay Executive a lump sum amount equal to twelve (12) months of the employer portion of Executive’s group health insurance premiums, as in effect immediately prior to the termination of employment, less applicable withholdings and deductions, payable within sixty (60) days following Executive’s termination from employment.”
2.The Company and the Executive further agree that this Amendment does not constitute grounds for “Good Reason” pursuant to the Executive Agreement, or otherwise constitute any trigger for the Company’s payment of any severance benefits to Executive pursuant to the Executive Agreement.
3.The Executive will continue to abide by Company rules and policies. Executive reaffirms, acknowledges and agrees to continue to comply with the Confidentiality, Non-Hire, Non-Disparagement, and Work Product Agreement, which Executive signed on March 9, 2021 (the “Confidentiality and Work Product Assignment Agreement”) and which prohibits unauthorized use or disclosure of the Company’s proprietary information, among other obligations.
4.The Executive confirms that she has read this Amendment, understands the terms thereof and has had sufficient opportunity to obtain independent legal advice.
5.Except as modified or amended in this Amendment, no other term or provision of the Executive Agreement or First Amendment is amended or modified in any respect. The Executive Agreement, and its exhibits, along with this Amendment, set forth the entire understanding between the Parties with regard to the subject matter hereof and supersedes any prior oral discussions or written communications and agreements. This Amendment cannot be modified or amended except in writing signed by the Executive and an authorized officer of the Company.
[Signature page follows]
2.
The Parties have executed this SECOND AMENDMENT TO THE EMPLOYMENT AGREEMENT OF SARAH LONGORIA on the day and year written above.
EXICURE, INC.
/s/ Matthias Schroff
_________________________
/s/ Matthias Schroff
_________________________
Matthias Schroff, Ph.D.
Chief Executive Officer
EXECUTIVE
/s/ Sarah Longoria
__________________________
/s/ Sarah Longoria
__________________________
Sarah Longoria
Exhibit 21.1
Subsidiaries of Exicure, Inc.
| Name: | Jurisdiction of Organization: | |||||||
| Exicure Operating Company | Delaware | |||||||
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the registration statements (Nos. 333-237043, 333-222999, 333-254189, and 333-263876) on Form S-8 and (Nos. 333-251555, 333-227475, 333-221791, 333-230175, and 333-266093) on Form S-3 of our report dated March 27, 2023, with respect to the consolidated financial statements of Exicure, Inc.
/s/ KPMG LLP
Chicago, Illinois
March 27, 2023
Exhibit 31.1
CERTIFICATIONS
I, Matthias Schroff, Ph.D., certify that:
1. I have reviewed this Annual Report on Form 10-K of Exicure, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: March 27, 2023
/s/ Matthias Schroff, Ph.D. | ||
| Matthias Schroff, Ph.D. | ||
| President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
Exhibit 31.1.1
CERTIFICATIONS
I, Jung Sang Kim, certify that:
1. I have reviewed this Annual Report on Form 10-K/A of Exicure, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
Date: May 1, 2023
/s/ Jung Sang Kim | ||
| Jung Sang Kim | ||
| Chief Executive Officer and Chief Financial Officer | ||
| (Principal Executive Officer and Principal Financial Officer) | ||
Exhibit 31.2
CERTIFICATIONS
I, Elias D. Papadimas, certify that:
1. I have reviewed this Annual Report on Form 10-K of Exicure, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: March 27, 2023
/s/ Elias D. Papadimas | ||
| Elias D. Papadimas | ||
| Chief Financial Officer | ||
| (Principal Financial Officer) | ||
Exhibit 32.1
SECTION 1350 CERTIFICATIONS*
Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. § 1350), Matthias Schroff, Ph. D., President and Chief Executive Officer of Exicure, Inc. (the “Company”), and Elias D. Papadimas, Chief Financial Officer of the Company, each hereby certifies that, to the best of his knowledge:
1. The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, to which this Certification is attached as Exhibit 32.1 (the “Annual Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and
2. The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: March 27, 2023
| /s/ Matthias Schroff | /s/ Elias D. Papadimas | |||||||||||||
| Matthias Schroff | Elias D. Papadimas | |||||||||||||
| President and Chief Executive Officer | Chief Financial Officer | |||||||||||||
(Principal Executive Officer) | (Principal Financial Officer) | |||||||||||||
| * | This certification accompanies the Annual Report on Form 10-K, to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Annual Report on Form 10-K), irrespective of any general incorporation language contained in such filing. | ||||