AMTI Applied Molecular Transport Inc

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.)

Filed by the Registrant ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

Payment of Filing Fee (Check the appropriate box):

 

April 28, 2023

Dear Fellow Stockholder:

You are cordially invited to attend the 2023 Annual Meeting of Stockholders (Annual Meeting) of Applied Molecular Transport Inc. (the Company) to be held virtually via live audio webcast on Wednesday, June 14, 2023 at 10:00 a.m., Pacific Time. The attached notice and proxy statement describe the formal business to be transacted at the meeting.

We are furnishing proxy materials to our stockholders over the Internet. You may read, print and download our 2022 Annual Report to Stockholders and our proxy statement at www.virtualshareholdermeeting.com/AMTI2023. On or about April 28, 2023, we mailed to our stockholders a notice containing instructions on how to access these materials and how to vote their shares. The notice provides instructions on how you can request a paper copy of these materials by mail, by telephone or by email. If you requested your materials via email, the email contains voting instructions and links to the materials on the Internet.

You may vote your shares at the Annual Meeting. If you are not able to attend the Annual Meeting, you may submit your proxy via the Internet, by phone, or by signing, dating and returning the enclosed proxy card in the enclosed envelope. The Annual Meeting is being held so that stockholders may consider the election of directors, the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2023, to approve, on an advisory basis, the compensation of our named executive officers, and to consider the stockholder proposal to elect each director annually, if properly presented at the Annual Meeting.

The Board of Directors of the Company has determined that the election of directors, the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2023, and to approve, on an advisory basis, the compensation of our named executive officers, are in the best interests of the Company and its stockholders. For the reasons set forth in the proxy statement, the Board of Directors unanimously recommends a vote “FOR” each of these matters. The Board of Directors of the Company has determined that the stockholder proposal to elect each director annually is not in the best interests of the Company and its stockholders. For the reasons set forth in the proxy statement, the Board of Directors unanimously recommends a vote “AGAINST” such matter. On behalf of the Board of Directors and the officers and employees of the Company, I would like to take this opportunity to thank our stockholders for their continued support of Applied Molecular Transport Inc. We look forward to seeing you at the meeting.

YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual Meeting, we urge you to submit your vote via the Internet, telephone or mail as soon as possible.

April 28, 2023

Please vote via the Internet, telephone or by mail.

If you request a proxy card, please mark, sign and date the proxy card when received and

return it promptly in the self-addressed, stamped envelope we will provide.

Registered Stockholders. If shares of our common stock are registered directly in your name with our transfer agent, you are considered the stockholder of record with respect to those shares and the Notice was provided to you directly by us. As the stockholder of record, you have the right to grant your voting proxy directly to the individuals listed on the proxy card or vote on your own behalf at our virtual Annual Meeting. Throughout this proxy statement, we refer to these registered stockholders as “stockholders of record.”

Street Name Stockholders. If shares of our common stock are held on your behalf in a brokerage account or by a bank or other nominee, you are considered to be the beneficial owner of shares that are held in “street name,” and the Notice was forwarded to you by your broker or nominee, who is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank or other nominee as to how to vote your shares. Beneficial owners are also invited to attend our virtual Annual Meeting. However, since a beneficial owner is not the stockholder of record, you may not vote your shares of our common stock on your own behalf at the Annual Meeting unless you follow your broker’s procedures for obtaining a legal proxy. If you request a printed copy of our proxy materials by mail, your broker, bank or other nominee will provide a voting instruction form for you to use. Throughout this proxy statement, we refer to stockholders who hold their shares through a broker, bank or other nominee as “street name stockholders.”

Holders of common stock are entitled to one vote per share on each matter that is submitted to stockholders for approval.

The presence at the meeting, in person or by proxy, of the holders of common stock representing a majority of the combined voting power of the outstanding shares of stock on the record date will constitute a quorum, permitting the meeting to conduct its business. As of the record date, there were 39,214,146 shares of common stock outstanding, all of which are entitled to be voted at the Annual Meeting. Abstentions, withhold votes and broker non-votes are counted as shares present and entitled to vote for purposes of determining a quorum.

Our Board of Directors recommends a vote:

If you are a stockholder of record, there are four ways to vote:

Even if you plan to participate in our virtual Annual Meeting, we recommend that you also vote by proxy so that your vote will be counted if you later decide not to participate in the Annual Meeting.

If you are a street name stockholder, you will receive voting instructions from your bank, broker or other nominee. You must follow the voting instructions provided by your bank, broker or other nominee on how to vote your shares. Street name stockholders should generally be able to vote by returning an instruction card, or by telephone or on the Internet. However, the availability of telephone and Internet voting will depend on the voting process of your bank, broker or other nominee. As discussed above, if you are a street name stockholder, you may not vote your shares on your own behalf at the Annual Meeting unless you obtain a legal proxy from your bank, broker or other nominee.

Yes. The giving of a proxy does not eliminate the right to vote in person should any stockholder giving the proxy so desire. Stockholders have an unconditional right to revoke their proxy at any time prior to the exercise of that proxy. If you are a stockholder of record, you can change your vote or revoke your proxy any time before the Annual Meeting by:

Proxies are solicited by and on behalf of our Board of Directors. Shawn Cross and Brandon Hants have been designated as proxy holders by our Board of Directors. When proxies are properly dated, executed and returned, the shares represented by such proxies will be voted at the Annual Meeting in accordance with the instructions of the

stockholder. If no specific instructions are given, however, the shares will be voted in accordance with the recommendations of our Board of Directors as described above. If any matters not described in this proxy statement are properly presented at the Annual Meeting, the proxy holders will use their own judgment to determine how to vote the shares. If the Annual Meeting is adjourned, the proxy holders can vote the shares on the new Annual Meeting date as well, unless you have properly revoked your proxy instructions, as described above.

In accordance with the rules of the Securities and Exchange Commission (SEC), we have elected to furnish our proxy materials, including this proxy statement and our annual report, primarily via the Internet. The Notice containing instructions on how to access our proxy materials is first being mailed on or about April 28, 2023 to all stockholders entitled to vote at the Annual Meeting. Stockholders may request to receive all future proxy materials in printed form by mail or electronically by e-mail by following the instructions contained in the Notice. We encourage stockholders to take advantage of the availability of our proxy materials on the Internet to help reduce the environmental impact and cost of our annual meetings of stockholders.

Our Board of Directors is soliciting proxies for use at the Annual Meeting. All expenses associated with this solicitation will be borne by us. We will reimburse brokers or other nominees for reasonable expenses that they incur in sending our proxy materials to you if a broker, bank or other nominee holds shares of our common stock on your behalf. In addition, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Our directors and employees will not be paid any additional compensation for soliciting proxies.

Brokerage firms and other intermediaries holding shares of our common stock in street name for their customers are generally required to vote such shares in the manner directed by their customers. In the absence of timely directions, your broker will have discretion to vote your shares on our sole “routine” matter: the proposal to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm. Your broker will not have discretion to vote on the election of directors, which is a “non-routine” matter, absent direction from you.

We expect to announce voting results at the Annual Meeting. We will also disclose voting results on a Current Report on Form 8-K that we will file with the SEC within four business days after the Annual Meeting.

We have adopted a procedure called “householding,” which the SEC has approved. Under this procedure, we deliver a single copy of the Notice and, if applicable, our proxy materials to multiple stockholders who share the same address unless we have received contrary instructions from one or more of the stockholders. This procedure reduces our printing costs, mailing costs and fees. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written or oral request, we will promptly deliver a separate copy of the Notice and, if applicable, our proxy materials to any stockholder at a shared address to which we delivered a single copy of any of these materials. To receive a separate copy, or, if a stockholder is receiving multiple copies, to request that we only send a single copy of the Notice and, if applicable, our proxy materials, such stockholder may write our Corporate Secretary at the Applied Molecular Transport Inc. email address designated by the company on the Investor Relations page of its website.

Street name stockholders may contact their bank, broker or other nominee to request information about householding.

The submission deadline for stockholder proposals to be included in our proxy materials for the 2024 annual meeting of stockholders pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the Exchange Act) is December 30, 2023 except as may otherwise be provided in Rule 14a-8. All such proposals must be in writing and

received by our Corporate Secretary at the Applied Molecular Transport Inc. email address designated by the company on the Investor Relations page of its website by close of business on the required deadline in order to be considered for inclusion in our proxy materials for the 2024 annual meeting of stockholders. Submission of a proposal before the deadline does not guarantee its inclusion in our proxy materials.

Under our bylaws, director nominations and other business may be brought at an Annual Meeting of stockholders in accordance with the requirements of our bylaws as in effect from time to time. For the 2024 annual meeting of stockholders, a stockholder notice must be received by our Corporate Secretary at the Applied Molecular Transport Inc. email address designated by the company on the Investor Relations page of its website, not later than the close of business on the 45th day nor earlier than the close of business on the 75th day before the one-year anniversary of the date on which we first mailed proxy materials or a notice of availability of proxy materials (whichever is earlier) for the previous year’s Annual Meeting. However, if the 2024 annual meeting of stockholders is advanced by more than 30 days prior to, or delayed by more than 60 days after, the one-year anniversary of the 2023 annual meeting of Stockholders, then, for notice by the stockholder to be timely, it must be received by our Corporate Secretary not earlier than the close of business on the 120th day prior to the 2024 annual meeting of stockholders and not later than the close of business on the later of (i) the 90th day prior to the 2024 annual meeting of stockholders, or (ii) the 10th day following the day on which public announcement of the date of such annual meeting is first made. Please refer to the full text of our bylaw provisions for additional information and requirements. A copy of our current bylaws has been filed with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as amended, and may be obtained by writing to our Corporate Secretary at the address listed in our proxy materials.

You may propose director candidates for consideration by our corporate governance and nominating committee. Any such recommendations should include the nominee’s name and qualifications for membership on our Board of Directors and should be directed to our Corporate Secretary at the address set forth above. In addition, to comply with the universal proxy rules under the Exchange Act, stockholders who intend to solicit proxies in support of director nominees other than our nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act. For additional information regarding stockholder recommendations for director candidates, see “Board of Directors and Corporate Governance-Stockholder Recommendations for Nominations to the Board of Directors.”

In addition, our bylaws permit stockholders to nominate directors for election at an annual meeting of stockholders. To nominate a director, the stockholder must provide the information required by our bylaws. In addition, the stockholder must give timely notice to our Corporate Secretary in accordance with our bylaws, which, in general, require that the notice be received by our Corporate Secretary within the time periods described above under “Stockholder Proposals for 2024 annual meeting” for stockholder proposals that are not intended to be included in a proxy statement.

A copy of our amended and restated bylaws may be obtained by accessing our filings on the SEC’s website at www.sec.gov. You may also contact our Corporate Secretary at our principal executive offices for a copy of the relevant bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates.

To the extent that this proxy statement has been or will be specifically incorporated by reference into any of our other filings with the SEC, the sections of this proxy statement entitled “Audit Committee Report” (to the extent permitted by the rules of the SEC) shall not be deemed to be so incorporated, unless specifically provided otherwise in such filing.

Because we qualify as a “smaller reporting company” under the SEC rules, we have elected to prepare this proxy statement and other annual and periodic reports as a “smaller reporting company” pursuant to the rules of the SEC. Under the scaled disclosure obligations, we are not required to provide, among other things, Compensation Discussion and Analysis and certain other tabular and narrative disclosures relating to executive compensation.

Our business affairs are managed under the direction of our Board of Directors, which currently consists of seven members. Five of our directors are independent within the meaning of the listing standards of the Nasdaq Stock Market. Our Board of Directors is divided into three staggered classes of directors. At each annual meeting of stockholders, a class of directors will be elected for a three-year term to succeed the same class whose term is then expiring.

Upon the recommendation of our corporate governance and nominating committee, we are nominating David Lamond, Tahir Mahmood and Holly Schachner as Class III directors at the Annual Meeting. If elected, Mr. Lamond and Drs. Mahmood and Schachner will each hold office for a three-year term until the annual meeting of stockholders to be held in 2026 or until their successors are duly elected and qualified.

The following table sets forth the names and certain other information about each of the nominees for Class III director. The names of and certain other information about the continuing members of our Board of Directors are also set forth below. Except as noted, all information is as of April 3, 2023:

David Lamond. Mr. Lamond joined our Board of Directors in September 2018. Since April 2016, Mr. Lamond has served as President of En Pointe LLC, an investment firm. From November 2011 to June 2016, he served as the President, Chief Executive Officer and Chief Investment Officer of Lamond Capital Partners LLC, a hedge fund. He has served as a member of the board of directors of Inquis Medical, Inc., a medical device company, since February 2020, Quince Therapeutics, Inc., a clinical-stage biopharmaceutical company, since December 2015, EG 427, a gene therapy company, since August 2019, Windfall, Inc., a data analytics company, since February 2021, and previously served on the board of Arrinex, Inc., a medical device company (now a subsidiary of Stryker Corporation) and Lucira Health, Inc., a diagnostics company. Mr. Lamond holds a B.A. in History from Duke University and a J.D. from Duke Law School.

We believe Mr. Lamond is qualified to serve on our Board of Directors because of his extensive expertise and experience investing in the biotechnology industry as well as his important perspective on operations, finance and corporate governance matters. Mr. Lamond was originally recommended for appointment as a director by Blue Devil Trust, one of our stockholders, in connection with our Series B Preferred Stock financing.

Tahir Mahmood, Ph.D., Co-Founder and Director. Dr. Mahmood co-founded Applied Molecular Transport LLC in September 2010, which became a wholly owned subsidiary of the Company. He has served as a member of our Board of Directors since our incorporation in November 2016, and served as our Chief Executive Officer from November 2016 to March 2023. From September 2011 to April 2013, Dr. Mahmood was a leader in the life sciences practice for the U.S. West Coast at Booz Allen Hamilton, a management consulting firm. Since January 2014,

Dr. Mahmood has been the Co-Founder and a member of the board of directors of MiNDERA Corporation, a non-invasive skin genomics company. From June 2003 to April 2008, Dr. Mahmood also worked at Amgen Inc. where he held various roles including Principal Business Analyst. Dr. Mahmood is an inventor on a number of issued and pending U.S. patents. He holds B.A.Sc. and M.Sc. degrees from the University of Toronto and a Ph.D. in Chemical and Biomedical Engineering from a collaborative program between the University of Twente (The Netherlands) and Massachusetts Institute of Technology.

We believe Dr. Mahmood is qualified to serve on our Board of Directors because of the perspective and experience he provides as one of our founders and as our former Chief Executive Officer, his expertise in life sciences, and strong scientific knowledge.

Holly Schachner, M.D. Dr. Schachner joined our Board of Directors in August 2021. Since November 2022, Dr. Schachner has served as SVP, Head of Clinical Development of NorthSea Therapeutics B.V., a biotechnology company. Previously, Dr. Schachner served as the Chief Medical Officer of DoubleRainbow Biosciences, Inc., a biotechnology company, from August 2021 to May 2022. From September 2020 to April 2021, Dr. Schachner served as Senior Vice President and Therapeutic Head of Clinical Science of MyoKardia, a biopharmaceutical company, prior to its acquisition by Bristol Myers Squibb. From March 2019 to July 2020, she served as Chief Medical Officer of Specialty Medicine of Allergan, a pharmaceutical company, prior to its acquisition by AbbVie. From January 2016 to March 2019, she served as North America Medical Head of the Diabetes Cardiovascular Business Unit of Sanofi S.A. and US Medical Chair of Sanofi S.A., a global healthcare company. She has served as a member of the board of directors of Juvenile Diabetes Research Foundation, NYC, a health research nonprofit from 2004 to 2018, and on the board of directors of Sanofi Foundation for North America, a healthcare access non-profit, from 2015 to 2017. Dr. Schachner holds a B.S. in Psychology from the University of Michigan, an M.D. from SUNY at Stony Brook School of Medicine and completed a pediatric residency and pediatric endocrinology fellowship at the Mount Sinai Medical Center in New York.

We believe that Dr. Schachner is qualified to serve on our Board of Directors because of her research and clinical development expertise and leadership in the biotechnology industry. Dr. Schachner was originally recommended for appointment as a director by Klein Hersh, a director recruiting company focused on the biotechnology industry.

Charlene Banard. Ms. Banard joined our Board of Directors in March 2022. Since April 2022, Ms. Banard has served as Chief Technical Officer of Atara Biotherapeutics, Inc., an allogeneic T-cell immunotherapy company. From February 2020 to November 2021, Ms. Banard worked at Novartis AG, a pharmaceutical company, serving as Global Head and SVP of Technical Operations, Cell and Gene Therapy from June 2020 to November 2021 and as Global Head of Technical Operations, Cell and Gene Therapy, Innovation Pipeline and PMO from February 2020 to June 2020. From October 2011 to January 2019, Ms. Banard worked at Shire plc, a global biopharmaceutical company serving as Senior Vice President, Global Quality from 2013 to January 2019 when it was acquired by Takeda Pharmaceutical Company Limited. Ms. Banard holds a B.S. in Biochemistry from the University of California at Davis and an M.B.A from Saint Mary’s College of Moraga, California.

We believe Ms. Banard is qualified to serve on our Board of Directors because of her extensive expertise and experience at biopharmaceutical companies, and her deep technical knowledge of technical operations, clinical development through product launch and life cycle management, and operational strategy.

Shawn Cross, Chief Executive Officer. Mr. Cross has served as our Chief Executive Officer and Chair of our Board of Directors since March 2023, served as our President and Chief Operating Officer from May 2022 to March 2023 and our Chief Financial Officer from March 2020 to May 2022. Prior to joining the Company, Mr. Cross was at JMP Securities LLC where he was Managing Director and Co-Head Healthcare Investment Banking and a member of the Investment Banking Management Committee from September 2018 to March 2020. Prior to JMP Securities LLC, Mr. Cross worked at GT BioPharma, Inc., a clinical stage immuno-oncology company, where he was President and Chief Operating Officer from November 2017 to February 2018 and Chairman of the board of directors and Chief Executive Officer from February 2018 to July 2018. Mr. Cross was Managing Director, Healthcare Investment Banking at Deutsche Bank Securities from November 2015 to November 2017 and Managing Director, Healthcare Investment Banking at Wells Fargo Securities from November 2010 to August 2015. He has served on the board of directors of BioPlus Acquisition Corp since December 2021. Mr. Cross holds a B.S. in Kinesiology from the University of California, Los Angeles and an M.B.A. from Columbia Business School.

We believe that Mr. Cross is qualified to serve on our Board of Directors and serve as Chair because of the perspective and experience he provides as our Chief Executive Officer and his previous roles as our President and Chief Operation Officer and our Chief Financial Officer, and his prior experience as an executive and board member in the biotechnology industry.

John W. Smither. Mr. Smither joined our Board of Directors in January 2022. Mr. Smither has served as chair of the audit committee on the board of directors of NewAmsterdam Pharma Company N.V since February 2023 and eFFECTOR Therapeutics, Inc. and its predecessor entity since March 2018. Mr. Smither most recently served as the chief financial officer of Arcutis Biotherapeuctic, Inc. from May 2019 to March 2021 where he was responsible for all financial aspects including leading the Company’s successful initial public offering and two follow-on financings. Previously, Mr. Smither was the chief financial officer at Sienna Biopharmaceutics in January 2016 to April 2017, and again in April 2018 to March 2019. He also served as the interim chief financial officer at Kite Pharma, a Gilead Company from November 2017 through April 2018, and was the chief financial officer of Unity Biotechnology. He also served as chief financial officer at Kythera Biopharmaceuticals, where he was responsible for all financial activities during early clinical stage through approval and launch, led private fundraising rounds, prepared the company for its successful initial public offering in October 2012, and oversaw its acquisition by Allergan for approximately $2.1 billion. At Amgen, he held several financial positions of increasing responsibility, including vice president of finance and administration for Amgen’s European operations in 28 countries, and also served as Executive Director, Corporate Accounting. From December 2013 to May 2020, Mr. Smither served as a member of the board of directors of Achaogen, Inc., and was its chair of the audit committee, and a member of the compensation committee. Mr. Smither began his career at Ernst & Young, where he was audit partner and held certification as a Certified Public Accountant (inactive). Mr. Smither holds a B.S. in accounting, with honors, from California State University at Los Angeles.

We believe that Mr. Smither is qualified to serve on our Board of Directors because of his experience as an executive and board member in the biotechnology industry.

Aaron VanDevender, Ph.D. Dr. VanDevender joined our Board of Directors in November 2016. Dr. VanDevender has served as Chief Executive Officer since December 2020 at Methid, Inc., a biotechnology company. Prior to Methid, Dr. VanDevender served as Chief Scientist and Principal from October 2012 to February 2020 and as Chief Scientific Consultant from February 2020 to August 2020 at Founders Fund, LLC, a venture capital firm. From October 2010 to March 2012, Dr. VanDevender served as a physicist at Halcyon Molecular, Inc., a company focused on DNA sequencing technology. From October 2007 to September 2010, he worked as a physicist at the National Institute of Standards and Technology. Dr. VanDevender has served on the board of directors of Emulate, Inc., which creates advanced in vitro human models, since June 2018 and on the board of directors of PsiQuantum, a quantum computer company, since September 2017. Dr. VanDevender holds a B.S. in Physics from the Massachusetts Institute of Technology and a Ph.D. in Physics from the University of Illinois, Urbana-Champaign.

We believe Dr. VanDevender is qualified to serve on our Board of Directors because of his strong scientific background, his experience in various technical roles within the biotechnology industry, as well as his experience operating, evaluating, investing in and overseeing biotechnology companies.

Our common stock is listed on the Nasdaq Global Select Market. The rules of the Nasdaq Stock Market require that, subject to specified exceptions, each member of a listed company’s audit, compensation and corporate governance, and nominating committees be independent. Audit committee members and compensation committee members must also satisfy the independence criteria set forth in Rule 10A-3 and Rule 10C-1, respectively, under the Exchange Act. Under the rules of the Nasdaq Stock Market, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

To be considered to be independent for purposes of Rule 10A-3 and under the rules of the Nasdaq Stock Market, a member of an audit committee of a listed company may not, other than in his, her or their capacity as a member of the audit committee, the board of directors or any other board committee: (1) accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries or (2) be an affiliated person of the listed company or any of its subsidiaries.

To be considered independent for purposes of Rule 10C-1 and under the rules of the Nasdaq Stock Market, the board of directors must affirmatively determine that each member of the compensation committee is independent, including a

consideration of all factors specifically relevant to determining whether the director has a relationship to the company which is material to that director’s ability to be independent from management in connection with the duties of a compensation committee member, including, but not limited to: (1) the source of compensation of such director, including any consulting, advisory, or other compensatory fee paid by the company to such director and (2) whether such director is affiliated with the company, a subsidiary of the company or an affiliate of a subsidiary of the company.

Our Board of Directors undertook a review of its composition, the composition of its committees, and the independence of our directors and considered whether any director has a material relationship with us that could compromise his, her or their ability to exercise independent judgment in carrying out his, her or their responsibilities. Based upon information requested from and provided by each director concerning his background, employment, and affiliations, including family relationships, our Board of Directors has determined that Charlene Banard, David Lamond, Holly Schachner, M.D., John W. Smither and Aaron VanDevender, Ph.D., representing five of our seven directors, do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the rules of the Nasdaq Stock Market.

In making these determinations, our Board of Directors considered the current and prior relationships that each non-employee director has with our Company and all other facts and circumstances our Board of Directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director, and the transactions involving them described in the section titled “Certain Relationships and Related Party Transactions.” There are no family relationships among any of our directors or executive officers.

Our Board of Directors is currently chaired by Shawn Cross, who was appointed to this role in March 2023, and who also serves as our Chief Executive Officer. Although historically our Board of Directors has believed that the separation of the positions of Chair of our Board of Directors and Chief Executive Officer reinforces the independence of our Board of Directors from management, under our Corporate Governance Guidelines, the Board has not adopted a policy requiring separation of the Chair and Chief Executive Officer positions or precluding their combination. In March 2023 our Board of Directors reconsidered the Board of Director’s leadership structure and decided to combine these roles. In making this decision, the Board of Directors considered the need to have unified leadership now that the Company has suspended development activities and is focusing on exploring strategic alternatives. The Board will continue to have a Lead Independent Director selected among non-employee directors.

Recognizing the importance of strong independent oversight, to create an environment that encourages objective oversight of management’s performance and to enhance the effectiveness of our Board of Directors as a whole, the Board of Directors appointed Holly Schachner as Lead Independent Director of our Board of Directors in May 2022. The Board of Directors believes that Dr. Schachner’s experience in various leadership positions with biopharmaceutical companies and her extensive expertise and skills in strategy and management make her well qualified to serve as our Lead Independent Director. While the Chair directs the operations of the Board of Directors and is responsible for the overall management and effective functioning of the Board of Directors, the Lead Independent Director provides leadership to the Board of Directors and particularly to the independent directors.

The lead independent director communicates with the Chief Executive Officer and Chair, disseminates information to the rest of the Board of Directors in a timely manner, raises issues with management on behalf of the outside directors when appropriate and schedules meetings and prepares agendas for meetings of outside directors.

As a company, we are committed to maintaining governance structures that promote effective oversight. Our corporate governance and nominating committee oversees and advises our Board of Directors on management of our strategy, initiatives, risks, opportunities and reporting on ESG matters, as set forth in its charter. The committee reports to the full Board of Directors on ESG matters.

We are committed to creating and maintaining a workplace free from discrimination or harassment on the basis of color, race, sex, national origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression or any other status protected by applicable law. Our management team and employees are expected to

exhibit and promote honest, ethical and respectful conduct in the workplace. All of our employees must adhere to a code of conduct that sets standards for appropriate behavior and we have implemented specific policies designed to prevent, identify, report and stop any type of discrimination and harassment. Our compensation is based on qualifications, performance, skills and experience without regard to gender, race and ethnicity.

We strive to provide competitive and robust compensation and benefits programs that help meet the varying needs of our employees, and we are committed to pay equity, based on gender or race/ethnicity. Our total rewards package includes competitive pay, comprehensive healthcare benefits package for employees, family medical leave and flexible work schedules. In addition, we offer every full-time employee, both exempt and non-exempt, the benefit of equity ownership in the Company through stock option grants, restricted stock unit grants, and our employee stock purchase plan. We offer a 401(k) plan, and we match employee contributions up to a certain limit.

Diversity is important to us, and we have always had diversity within our management team and across the Company. We believe that our management and board of directors should be diverse, including a diversity of experience, competency in relevant fields, gender, race, ethnicity and age. In making determinations regarding nominations of directors, our corporate governance and nominating committee takes into account the benefits of diverse viewpoints. For further discussion, see the section titled “—Considerations in Evaluating Director Nominees”. Currently, 50% of our senior management team, which is comprised of our CEO, his direct reports and other Vice Presidents, identify with underrepresented groups.

The table below provides certain information regarding the composition of our Board of Directors. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f). As shown below in the board diversity matrix, the Company was in compliance with the diversity requirements of Nasdaq Rule 5605(f) as of April 3, 2023.

Our Board of Directors has an active role, as a whole and also at the committee level, in overseeing the management of our risks. Our Board of Directors is responsible for general oversight of risks and regular review of information regarding our risks, including credit risks, liquidity risks, cybersecurity risks and operational risks. The compensation committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. The audit committee is responsible for overseeing the management of risks relating to accounting matters and financial reporting and potential conflicts of interest, including our internal controls and procedures over

financial reporting. The audit committee also reviews our risk management processes and procedures, including our investment policies and our compliance programs with respect to legal, ethical and regulatory requirements. The corporate governance and nominating committee is responsible for overseeing the management of risks associated with the independence of our Board of Directors and ESG matters. Although each committee is responsible for evaluating certain risks and overseeing the management of such risks, our entire Board of Directors is regularly informed through discussions from committee members about such risks. Our Board of Directors believes its current leadership structure supports the risk oversight function of the Board of Directors.

In order to promote open discussion among independent directors, our Board of Directors has a policy of conducting executive sessions of independent directors on a periodic basis, and typically has such a session as part of each regularly scheduled Board meeting.

During the fiscal year ended December 31, 2022, our Board of Directors held nine meetings (including regularly scheduled and special meetings), and each director attended at least 75% of the aggregate of (i) the total number of meetings of our Board of Directors held during the period for which he or she has been a director and (ii) the total number of meetings held by all committees of our Board of Directors on which he or she served during the periods that he or she served. Although we do not have a formal policy regarding attendance by members of our Board of Directors at annual meetings of stockholders, we encourage our directors to attend. Six of our current Board members attended our 2022 annual meeting.

Our Board of Directors has established an audit committee, a compensation committee, and a corporate governance and nominating committee, each of which has the composition and the responsibilities described below.

The members of our audit committee are John W. Smither, Charlene Banard and Aaron VanDevender, Ph.D. Mr. Smither is the chair of our audit committee. Mr. Smither is our audit committee financial expert, as that term is defined under the SEC rules implementing SOX Section 407, and possesses financial sophistication, as defined under the rules of the Nasdaq Stock Market. Our audit committee oversees our corporate accounting and financial reporting process and assists our Board of Directors in monitoring our financial systems. Our audit committee also:

Our audit committee operates under a written charter that satisfies the applicable rules of the SEC and the listing standards of the Nasdaq Stock Market. A copy of the audit committee charter is available at https://ir.appliedmt.com/corporate-governance/documents-charters. During 2022, our audit committee held four meetings.

The members of our compensation committee are David Lamond, Holly Schachner, M.D. and John W. Smither. Mr. Lamond is the chair of our compensation committee. Our compensation committee oversees our compensation policies, plans, and benefits programs. The compensation committee also:

Our compensation committee operates under a written charter that satisfies the applicable rules of the SEC and the listing standards of the Nasdaq Stock Market. A copy of the compensation committee charter is available at https://ir.appliedmt.com/corporate-governance/documents-charters. During 2022, our compensation committee held two meetings.

The members of our corporate governance and nominating committee are David Lamond, Holly Schachner, M.D. and Aaron VanDevender, Ph.D. Mr. Lamond is the chair of our corporate governance and nominating committee. Our corporate governance and nominating committee oversees and assists our Board of Directors in reviewing and recommending nominees for election as directors. Specifically, the corporate governance and nominating committee:

Our corporate governance and nominating committee operates under a written charter that satisfies the applicable rules of the SEC and the listing standards of the Nasdaq Stock Market. A copy of the corporate governance and nominating committee charter is available at https://ir.appliedmt.com/corporate-governance/documents-charters. During 2022, our corporate governance and nominating committee held three meetings.

None of the members of our compensation committee is or has been an officer or employee of the Company. None of our executive officers currently serves, or in the past fiscal year has served, as a member of the Board of Directors or compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire Board of Directors) of any entity that has one or more executive officers serving on our Board of Directors or compensation committee.

Our corporate governance and nominating committee uses a variety of methods for identifying and evaluating director nominees. In its evaluation of director candidates, our corporate governance and nominating committee will consider the current size and composition of our Board of Directors and the needs of our Board of Directors and the respective committees of our Board of Directors. Some of the qualifications that our corporate governance and nominating committee considers include, without limitation, issues of character, integrity, judgment, diversity, age, independence, skills, education, expertise, business acumen, corporate experience, length of service, understanding of the Company’s business, independence, and other commitments. Nominees must also have the ability to offer advice and guidance to management and be leaders in the companies or institutions with which they are affiliated. Director candidates must have sufficient time available in the judgment of our corporate governance and nominating committee to perform all Board of Director and committee responsibilities. Members of our Board of Directors are expected to prepare for, attend, and participate in all Board of Director and applicable committee meetings. Other than the foregoing, there are no stated minimum criteria for director nominees, although our corporate governance and nominating committee may also consider such other factors as it may deem, from time to time, are in our and our stockholders’ best interests.

Our Board of Directors believes that our Board of Directors should be a diverse body, and our corporate governance and nominating committee will consider such factors as differences in professional background, education, skill, and other individual qualities and attributes that contribute to the total mix of viewpoints and experience represented on our Board of Directors. In making determinations regarding nominations of directors, our corporate governance and nominating committee will take into account the benefits of diverse viewpoints. Our corporate governance and nominating committee also considers these and other factors as it oversees the annual Board of Director and committee evaluations. After completing its review and evaluation of director candidates, our corporate governance and nominating committee recommends to our full Board of Directors the director nominees for selection.

Our corporate governance and nominating committee will consider candidates for director recommended by stockholders, so long as such recommendations comply with our amended and restated certificate of incorporation, amended and restated bylaws and applicable laws, rules and regulations, including those promulgated by the SEC. Our corporate governance and nominating committee will evaluate such recommendations in accordance with its charter, our amended and restated bylaws, our policies and procedures for director candidates, as well as the regular director nominee criteria described above. This process is designed to ensure that our Board of Directors includes members with diverse backgrounds, skills and experience, including appropriate financial and other expertise relevant to our business. Eligible stockholders wishing to recommend a candidate for nomination should contact our Corporate Secretary in writing. Such recommendations must include information about the candidate, a statement of support by the recommending stockholder, evidence of the recommending stockholder’s ownership of our common stock and a signed letter from the candidate confirming willingness to serve on our Board of Directors. Our corporate governance and nominating committee has discretion to decide which individuals to recommend for nomination as directors.

Under our amended and restated bylaws, stockholders may also nominate candidates for election to our Board of Directors. Any nomination must comply with the requirements set forth in our amended and restated bylaws and should be sent in writing to our Corporate Secretary at the Applied Molecular Transport Inc. email address designated by the company on the Investor Relations page of its website. To be timely for our 2024 annual meeting of stockholders, nominations must be received by our Secretary not later than the 45th day nor earlier than the 75th day before the one-year anniversary of the date on which we first mailed our proxy materials or a notice of availability of proxy materials (whichever is earlier) for the preceding year’s annual meeting. In addition, to comply with the universal proxy rules under the Exchange Act, stockholders who intend to solicit proxies in support of director nominees other than our nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than 60 days prior to the anniversary date of the Annual Meeting. In the event that no annual meeting was held in the previous year or if the date of the annual meeting is advanced by more than 30 days prior to or delayed by more than 60 days after the one-year anniversary of the date of the previous year’s annual meeting, then notice by the stockholder to be timely must be so received by our Secretary not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of (i) the 90th day prior to such annual meeting and (ii) the 10th day following the day on which public announcement of the date of such annual meeting is first made.

Interested parties wishing to communicate with our Board of Directors or with an individual member or members of our Board of Directors may do so by writing to our Board of Directors or to the particular member or members of our Board of Directors, and mailing the correspondence to our Corporate Secretary at the Applied Molecular Transport Inc. email address designated by the company on the Investor Relations page of its website. Our Corporate Secretary, in consultation with appropriate members of our Board of Directors as necessary, will review all incoming communications and, if appropriate, such communications will be forwarded to the appropriate member or members of our Board of Directors, or if none is specified, to the Chair of our Board of Directors.

Our Board of Directors has adopted Corporate Governance Guidelines that address items such as the qualifications and responsibilities of our directors and director candidates and corporate governance policies and standards applicable to us in general. In addition, our Board of Directors has adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including our Chief Executive Officer and other executive and senior financial officers. The full text of our Corporate Governance Guidelines and our Code of Business Conduct and Ethics is posted on the Corporate Governance portion of our website https://ir.appliedmt.com/corporate-governance/documents-charters. We will post amendments to our Code of Business Conduct and Ethics or waivers of our Code of Business Conduct and Ethics for directors and executive officers on the same website.

The director compensation policy includes a maximum annual limit of $500,000 of cash compensation and equity awards that may be paid, issued or granted to a non-employee director in any fiscal year (increased to $750,000 in the fiscal year in which the non-employee director joins the Board of Directors). For purposes of these limitations, the value of an equity award is based on its grant date fair value. Any cash compensation paid or equity awards granted to a person for his, her or their services as an employee, or for his, her or their services as a consultant (other than as a non-employee director), will not count for purposes of the limitation. The maximum limit does not reflect the intended size of any potential compensation or equity awards to our non-employee directors.

The amounts and terms of the cash and equity compensation that are received by directors, described below, remain unchanged from the amounts that were provided by the updated outside director compensation policy in fiscal year 2022.

Non-employee directors are entitled to receive the following cash compensation for their services under the policy:

Each non-employee director who serves as a committee chair will receive only the additional annual cash fee as the chair of the committee, and not the additional annual fee as a member of the committee. All cash payments to non-employee directors are paid quarterly in arrears on a prorated basis.

Each person who first becomes a non-employee director after the effective date of the director compensation policy will be granted on the date on which such individual first becomes a non-employee director, an initial award of nonstatutory stock options covering 60,000 shares of our common stock (the Initial Option). The Initial Option will be scheduled to vest as to 1/36th of the shares each monthly anniversary of commencement of service as a non-employee director, subject to continuing to provide services to us through each applicable vesting date.

Each non-employee director automatically will receive, on the date of each annual meeting of our stockholders, an annual award of nonstatutory stock option covering 20,000 shares of our common stock (an Annual Option). Each Annual Option will vest in full on the earlier of (i) the one-year anniversary of the date of grant of such Annual Award or (ii) the business day prior to the next annual meeting of stockholders that occurs following the grant of such Annual Award, in each case, subject to continuing to provide service to us through the applicable vesting date.

The term of each option granted under the director compensation policy will be 10 years, subject to earlier termination as provided in the 2020 Equity Incentive Plan (2020 Plan). Each option granted under the director compensation policy will have an exercise price per share equal to 100% of the fair market value per share on the date of grant.

In the event of our “change in control” (as defined in the 2020 Plan), each non-employee director will fully vest in his, her or their outstanding company equity awards provided that the non-employee director continues to be a non-employee director through the date of our change in control.

If Deloitte & Touche LLP renders services other than audit services to the Company, the audit committee will determine whether the rendering of these services is compatible with maintaining Deloitte & Touche LLP’s independence.

The ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm requires the affirmative vote of a majority of the shares of our common stock present (including by proxy) at the Annual Meeting and entitled to vote thereon to be approved. Abstentions will have the effect of a vote “AGAINST” the proposal and broker non-votes will have no effect.

believe our classified board structure encourages our directors to make decisions that are in the long-term interests of the Company and our stockholders. In contrast, the annual election of all directors can, in some cases, lead to short-term focus or a concentration on immediate results, which can discourage or impair long-term investments, improvements and initiatives.

Our classified board structure also creates stability and continuity on our Board and ensures that, at any given time, our Board is comprised of experienced directors who are familiar with our business, strategic goals, history and culture. Currently, three out of seven of our directors have served on our Board since prior to our Company’s initial public offering in June 2020 (IPO), one director who recently joined our Board has served as a senior executive of the Company since prior to our IPO, and three directors have joined our Board more recently. In addition, three out of seven of our directors have been elected by post-initial public offering stockholders and three of the four remaining directors are up for reelection at this annual meeting. We believe our Board composition reflects an appropriate balance, which is made possible by the current classification structure, of both change and continuity.

Further, we believe our current three-year terms are tailored to enable our existing and future directors to develop substantive knowledge about our specific operations and goals, which better positions them to make long-term strategic decisions that are in the best interest of our stockholders. Our classified board structure has assisted us in attracting and retaining highly qualified directors who are willing to commit the time and resources necessary to gain a deep understanding of our business, strategy and industry, which has been particularly important as a relatively new public company in a highly competitive industry. If our Board were to be declassified, it could be replaced in a single year with directors who are unfamiliar with the Company’s business, strategic goals, history and culture. In contrast, a classified board structure allows for orderly change alongside continuity as new directors with fresh perspectives interact and work with experienced directors.

Since becoming a public company, our Board has always been comprised of a majority of independent, non-employee directors and membership of all of our Board’ committees have always consisted entirely of independent directors. We have adopted director membership criteria which are set forth in our Corporate Governance Guidelines to help ensure that the nominees to our Board reflect our high governance standards and are prepared to serve the best interests of all of our stockholders. At least annually, the directors evaluate the performance and effectiveness of our Board and each of our Board committees in a process that is overseen by our Board’s Corporate Governance and Nominating Committee. We believe that our corporate governance practices reflect our commitment to accountability and serve the interests of all of our stockholders.

In addition, all of our directors, regardless of the length of their term, have a fiduciary duty under the law to act in a manner that they believe to be in the best interests of our Company and all of our stockholders. Accountability depends on the selection of experienced and committed individuals, not on whether they serve terms of one or three years. As a result, the classified board structure maintains the same level of accountability as with annual elections of directors. In addition, at each annual meeting, our stockholders have the opportunity to evaluate and elect approximately one-third of our Board. This structure ensures that our stockholders have a frequent and meaningful voice, while balancing the need for continuity and stability on our Board. Additionally, any director, or our entire Board, may be removed from office at any time if there is “cause” for the removal. Notably, since we became a public company in 2020, each of our nominated directors has never failed to receive less than 88% of votes cast for their election, which we believe exemplifies our stockholders’ satisfaction with our Board and management.

Our classified board structure protects our Company and stockholders against a hostile purchaser replacing a majority of our directors with its own nominees at a single annual meeting of stockholders, thereby gaining control of our Company without paying fair market value to our stockholders. Our classified board structure would not preclude a takeover, but rather would encourage potential acquirers to initiate arms-length negotiations with seasoned directors and would provide our Board with the time and flexibility necessary to evaluate the adequacy and fairness of a proposed offer, consider alternative methods of maximizing stockholder value, protect stockholders against abusive tactics during a takeover process, and, as appropriate, negotiate the best possible return for all of our stockholders.

Declassification of our Board would undercut these benefits and could make us a target for unsolicited hostile overtures from investor groups focusing on short-term financial gains. In particular, in recent years, hedge funds and other activist investors have increasingly used the threat of a proxy fight to pressure boards to take actions that

produce short-term gains at the expense of strategies designed to achieve meaningful long-term stockholder value. We believe classified board structures have been shown to be an effective means of protecting long-term stockholder interests against these types of abusive tactics.

The prevalence of classified boards is more common in peer companies in our industry, stage of growth, and with a market capitalization similar to ours than in companies listed in the S&P 500 and Russell 1000 indexes. In particular, development stage, pre-product revenue biotech companies are predominantly classified. We believe that maintaining our classified Board not only provides the benefits described above, but is also consistent with the governance approach adopted by similar companies.

The vote on this stockholder proposal is an advisory vote, and therefore not binding. Consistent with our fiduciary duties, if stockholders approve the proposal, we would reconsider our position with respect to our classified board structure. Declassification of our Board requires an amendment to our Amended and Restated Certificate of Incorporation, which must be adopted pursuant to the procedures set forth therein. A vote in favor of this proposal, therefore, would constitute a recommendation that we initiate this amendment process. For all of the reasons stated above, however, we do not believe that Proposal No. 4 is in the best interests of our Company or stockholders and recommend that you vote AGAINST Proposal No. 4.

Our Board of Directors is asking you to oppose this proposal. Because this vote is advisory, it will not be binding on us or our Board of Directors. However, our Board of Directors will review the voting results in their entirety and take them into consideration when making future decisions regarding our classified board structure.

Shawn Cross, Chief Executive Officer. For a biography of Mr. Cross, please see the section titled “Board of Directors and Corporate Governance.”

Brandon Hants, Chief Financial Officer. Mr. Hants has served as our Chief Financial Officer since May 2022, Senior Vice President, Finance and Business Operations from March 2021 to May 2022, and Vice President, Finance and Business Operations from January 2019 to March 2021. Prior to joining the Company, Mr. Hants held various roles at Singulex, Inc., an immunodiagnostics company, including as Chief Financial Officer from July 2018 to January 2019, Vice President, Finance and Operations from July 2016 to June 2018, Senior Director, Finance from June 2014 to June 2016, and Director, Financial Planning and Analysis from June 2012 to June 2014. Prior to Singulex, Mr. Hants held various roles of increasing responsibility at Novartis Vaccines & Diagnostics and Genentech. Mr. Hants holds a B.S. in Cell and Developmental Biology from the University of California, Santa Barbara and an M.B.A. from the University of San Francisco.

Our compensation committee is responsible for the executive compensation programs for our executive officers and reports to our Board of Directors on its discussions, decisions and other actions. Typically, our Chief Executive Officer makes recommendations to our compensation committee, often attends committee meetings and is involved in the determination of compensation for the respective executive officers who report to him, except that our Chief Executive Officer does not make recommendations as to his own compensation. Our Chief Executive Officer makes recommendations to our compensation committee regarding short- and long-term compensation for all executive officers (other than himself) based on our results, an individual executive officer’s contribution toward these results and performance toward individual goal achievement. Our compensation committee then reviews the recommendations and other data. Our compensation committee makes decisions as to total compensation for each executive officer, although it may instead, in its discretion, make recommendations to our Board of Directors regarding executive compensation.

Our compensation committee is authorized to retain the services of one or more executive compensation advisors, as it sees fit, in connection with the establishment of our compensation programs and related policies. In 2022, our compensation committee engaged Aon, an independent compensation consultant, to provide it with information, recommendations and other advice relating to executive compensation on an ongoing basis. Accordingly, Aon serves at the discretion of our compensation committee. Our compensation committee engaged Aon to assist in developing a group of peer companies to help us determine the appropriate level of overall compensation for our executive officers, as well as assess each separate element of compensation, with a goal of promoting executive compensation that is competitive and fair.

Our compensation committee periodically considers and assesses Aon’s independence, including whether Aon has any potential conflicts of interest with our Company or members of our compensation committee. In connection with Aon’s engagement, our compensation committee conducted such a review and concluded that it was not aware of any conflict of interest that had been raised by work performed by Aon or the individual consultants employed by Aon that perform services for our compensation committee.

Our named executive officers (NEOs) for the fiscal year ended December 31, 2022, which consist of our principal executive officer and the next two most highly compensated executive officers, are:

As required by Item 402(v) of Regulation S-K, we are providing the following information about executive compensation for our principal executive officer (PEO) and the average compensation of the other non-PEO NEOs as reported in the Summary Compensation Table for each of the last two completed fiscal years, as well as Compensation Actually Paid (CAP) as calculated under new SEC Pay Versus Performance (PVP) disclosure requirements and certain performance measures required by the rules. Dollar amounts reported as CAP are computed in accordance with Item 402(v) of Regulation S-K and do not necessarily reflect the actual amount of compensation earned by or paid to our PEO and NEOs during the applicable years.

Compensation Actually Paid vs. Net Loss

 

In June 2020, we entered into a confirmatory employment letter with Tahir Mahmood, Ph.D. our Co-Founder, Director and former Chief Executive Officer. The employment letter provided Dr. Mahmood with severance and change in control benefits pursuant to our Severance Policy described below. During our 2022 fiscal year, Dr. Mahmood’s annual base salary was $580,000 and he was eligible for an annual target cash incentive payment equal to 55% of his annual base salary. In April 2023, we entered into a Separation Agreement and Release with Dr. Mahmood (Separation Agreement). The Separation Agreement supersedes all existing agreements and understandings that Dr. Mahmood may have entered into concerning his employment relationship with us, although the Indemnification Agreement and Information, Invention Assignment, and Arbitration Agreement between us and Dr. Mahmood remain in force. Under the terms of the Separation Agreement, and consistent with the terms of the Company’s Senior Executive Change in Control and Severance Policy, Dr. Mahmood received (i) a lump sum payment equal to 100% of his base salary and (ii) an upfront payment equal to twelve months of premiums for COBRA continuation coverage.

In January 2022, we entered into an Executive Chair Letter Agreement (Letter Agreement) with Graham K. Cooper, who is our Former Executive Chair. Mr. Cooper resigned from our Board of Directors and his position as Executive Chair on March 8, 2023. The Letter Agreement had no specific term and provided that Mr. Cooper was an at-will employee. The Letter Agreement superseded all existing agreements and understandings that Mr. Cooper may have entered into concerning his employment relationship with us. The Letter Agreement also provided Mr. Cooper with severance and change in control benefits pursuant to our Severance Policy described below. During our 2022 fiscal year, Mr. Cooper did not receive an annual base salary and he was not eligible for an annual target cash incentive payment. As of January 1, 2023, Mr. Cooper did not receive an annual base salary and he is not currently eligible for an annual target cash incentive payment.

In June 2020, we entered into a confirmatory employment letter with Shawn Cross, our President and Chief Operating Officer. The confirmatory employment letter has no specific term and provides that Mr. Cross is an at-will employee. The employment letter supersedes all existing agreements and understandings that Mr. Cross may have entered into concerning his employment relationship with us. The employment letter also provides Mr. Cross with severance and

change in control benefits pursuant to our Severance Policy described below. During our 2022 fiscal year, Mr. Cross’s annual base salary was $500,000 and he was eligible for an annual target cash incentive payment equal to 40% of his annual base salary. In March 2023, Mr. Cross was appointed as our Chief Executive Officer, and his annual base salary is $580,000 and he is currently eligible for an annual target cash incentive payment equal to 55% of his annual base salary.

Our Board of Directors adopted our Severance Policy in June 2020. Under the Severance Policy, if a named executive officer’s employment is terminated within a period beginning on a “change in control” (as defined in the Severance Policy) and ending 12 months following a change in control (the “change in control period”), either by us other than for “cause,” death or “disability” or by the named executive officer due to a “constructive termination” (each, as defined within the Severance Policy), referred to as a Non-CIC Qualified Termination, Dr. Mahmood and Mr. Cross will receive:

Under the Severance Policy, if a named executive officer’s employment is terminated inside the change in control period either by us other than for “cause,” death or “disability” or by the named executive officer due to a “constructive termination,” referred to as a CIC Qualified Termination, the named executive officer will receive the following:

The Severance Policy provides that if any payments or benefits received by a named executive officer under the Severance Policy or otherwise would constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code (the Code) and be subject to excise taxes imposed by Section 4999 of the Code, such amount will either be delivered in full or reduced so as not to be subject to excise taxation, whichever amount is higher. The Severance Policy does not require us to provide any tax gross-ups.

To receive the severance described above, the named executive officer must sign and not revoke our standard separation agreement and release of claims within the timeframe that is set forth in the Severance Policy.

We have implemented robust policies that bar employees from hedging and pledging our stock. Named executive officers are prohibited from pledging Company securities as collateral for loans because doing so would be a violation of our Insider Trading Policy. Additionally, employees are barred from engaging in transactions in publicly-traded options, such as puts and calls, and other derivative securities with respect to the Company’s securities. This prohibition extends to any hedging or similar transaction designed to decrease the risks associated with holding Company securities. Our policy provides for limited exceptions to the hedging and pledging prohibitions, however they must be approved by a Compliance Officer, in consultation with the Board of Directors or an independent committee of the Board of Directors, and historically no exceptions have ever been made.