ACHN 2018 Proxy Statement

individual goals for 2017 and to provide long-term retention incentives. In February 2018, the Compensation Committee approved the following equity awards for our named executive officers who were still serving as employees: Name Shares of Common Stock Underlying Stock Options (#)(1) Milind Deshpande, Ph.D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 640,000 Joseph Truitt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419,000 Mary Kay Fenton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250,000 Martha Manning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215,000 (1) These options vest as to 25% of the shares underlying the award on the first anniversary of the date of grant and as to an additional 6.25% of the shares underlying the award at the end of each three-month period thereafter, subject to continued service. Other Compensation We maintain broad-based benefits that are provided to all employees, including our named executive officers who are still serving as employees. These benefits include health insurance, life and disability insurance, dental insurance and a 401(k) defined contribution plan. We currently match employee 401(k) contributions at a rate of $0.50 cents for each dollar contributed, up to 6% of eligible contributions. In particular circumstances, we also utilize cash signing bonuses when certain executives and non-executives join us. Such cash signing bonuses are typically repayable in full to the company if the recipient voluntarily terminates employment with us prior to the first anniversary of the date of hire. Whether a signing bonus is paid and the amount thereof is determined on a case-by-case basis under the specific hiring circumstances. For example, we will consider paying signing bonuses to compensate for amounts forfeited by an employee upon terminating prior employment, to assist with relocation expenses or to create additional incentive for an employee to join our company in a position where there is high market demand. In 2016, Joel Barrish was awarded $200,000 as a sign-on bonus to partially compensate him for the amounts he would not be receiving from his former employer as a result of his leaving that employer to join Achillion. In July 2017, when Dr. Barrish left the company, he was required to repay 50% of his sign-on bonus, which amounted to $100,000. In addition, we also provided Ms. Manning $20,000 for reasonable travel and living expenses incurred as a result of her commuting from Pennsylvania to our offices in Connecticut, and make tax gross-up payments to Ms. Manning to reimburse her for any federal or state income taxes associated with receipt of such reimbursements (and the related income taxes owed due to the receipt of the gross-up payment). We provided similar reimbursements and tax gross-ups to Drs. Apelian and Barrish while they were employed by us. In 2015, we also reimbursed Mr. Truitt for reasonable travel and living expenses incurred as a result of his commuting from Pennsylvania to our offices in Connecticut and made tax gross-up payments to Mr. Truitt associated with the receipt of such reimbursements. Termination-Based Compensation Severance. In the event we terminate Dr. Deshpande’s employment for reasons other than cause, death or disability, or if Dr. Deshpande terminates his employment for good reason (as defined in his employment agreement), he is entitled to receive (i) his salary in effect on the date of termination until the date that is eighteen months following the termination date; (ii) if he is eligible for and elects to receive COBRA continuation, payment of the premiums for his medical or dental insurance benefits for eighteen months or, if earlier, the expiration of his COBRA continuation coverage; (iii) a payment equal to a pro-rated portion of his target bonus for the fiscal year in which termination occurred; and (iv) immediate vesting and exercisability of 25% of the original number of shares subject to unvested option grants and unvested grants of restricted stock and restricted 42