ACHN 2018 Proxy Statement

• Advancement of our second factor D inhibitor, ACH-5228, for oral systemic delivery to first-in-human studies; • Progression of two additional compounds through screening toxicology evaluations to start GLP toxicology studies on one compound by the end of 2017; • Development of regulatory and clinical development plan to progress two oral factor D inhibitors in multiple indications; • Advancement of ophthalmology portfolio through a series of studies designed to identify lead factor D compound with formulation/delivery system; • Financial results in line with approved budget and year end cash balance goal; • Share price performance; and • Secondary public offering of shares of the Company’s common stock held by Johnson & Johnson Innovation-JJDC, Inc., or JJDC. In February 2018, our Compensation Committee approved a corporate achievement factor of 71.50% and awarded cash bonus compensation ranging from 71.50% to 78.65% of target for our named executive officers who were still serving as employees. In making this determination, the Compensation Committee gave consideration to: (i) achievement of the 2017 corporate objectives described above, which resulted in 71.50% achievement of corporate performance; and (ii) individual achievements by executives. For 2017 performance, the cash bonus award for our Chief Executive Officer was determined by calculating his base salary multiplied by his target bonus percentage multiplied by the percent of corporate performance achievement, which resulted in a 71.50% payout. The other named executive officers’ cash bonus awards were determined by calculating their base salary multiplied by their target bonus percentage multiplied by the percent of corporate performance achievement multiplied by the percent of individual performance achievement and ranged from 71.50% to 78.65%. Further information regarding the payout of the cash bonuses is included below. 2017 Annual Performance-Based Cash Awards Name 2017 Target Award (% of Base Salary) 2017 Target Bonus Payment ($) 2017 Actual Bonus Payment ($) 2017 Actual Bonus Payment (% of Target Award Opportunity) Milind Deshpande, Ph.D. . . . . . . . . . . . . . . 60% $364,620 $260,703 71.50% Joseph Truitt . . . . . . . . . . . . . . . . . . . . . . . . 40% $163,280 $122,582 75.08% Mary Kay Fenton . . . . . . . . . . . . . . . . . . . . 40% $152,852 $120,218 78.65% Martha Manning . . . . . . . . . . . . . . . . . . . . . 35% $118,965 $ 89,313 75.08% Dr. Deshpande’s annual cash bonus award for 2017 was $260,703, which represents 71.50% of his target bonus award. This award was based on the committee’s determination of the achievement of corporate objectives of 71.50%, as discussed above. Mr. Truitt’s annual cash bonus award for 2017 was $122,582, which represents 75.08% of his target bonus award. In making this award, the Compensation Committee considered, in addition to the Company’s overall performance, Mr. Truitt’s achievement of his individual objectives for 2017, including: (i) his successful leadership in developing business development strategy; (ii) his significant contribution to the secondary offering of common stock held by JJDC; (iii) his significant contributions to the three-year corporate strategy; and (iv) his successful leadership of the corporate strategy, commercial and business development functions. In February 2018, Mr. Truitt was promoted to President and Chief Operating Officer. 40