AKAO 2018 Proxy Statement

33 Equity-Based Long-Term Incentive Awards Our Compensation Committee believes it is essential to provide equity-based compensation to our executive officers in order to link the interests and risks of our executive officers with those of our stockholders, reinforcing our commitment to ensuring a strong linkage between company performance and pay. In 2017, we granted equity-based compensation to our NEOs under our 2014 Equity Incentive Award Plan in the form of stock options and RSUs, with a blend of options comprising 70% of the value of annual grants and RSUs comprising 30% of the value of annual grants. In addition, 20% of our annual grants were comprised of stock options and RSUs that vest subject to certain stock price thresholds in order to incentivize our named executive officers to achieve such thresholds and deliver value to our stockholders. In determining the size of annual equity award grants, the Compensation Committee and Board considered market data, as well as the value of the executives vested and unvested equity. The table below sets forth annual grants made to our NEOs in February 2017: Name Time-Based Stock Options Time-Based RSUs Performance-Based Stock Options Performance-Based RSUs Dr. Hillan 160,000 32,000 40,000 8,000 Mr. Wise 80,000 16,000 20,000 4,000 Mr. Schilke 50,400 10,800 12,600 2,700 Dr. Swem 40,000 8,000 10,000 2,000 Mr. Loeb was not eligible for an annual equity award grant in 2017 as he was granted options and restricted stock units in the final quarter of 2016 in connection with his commencement of employment with the Company. Dr. Friedland did not receive an annual equity award grant in 2017. The time-based stock option awards vest as to 1/48 th of the shares subject to the award on each monthly anniversary of the vesting commencement date, subject to continued service on each applicable vesting date. The time-based RSUs vest in four successive and equal annual installments on the anniversary of the vesting commencement date, subject to continued service on each applicable vesting date. The performance-based awards vest as follows: (i) 40% will vest on the 30th consecutive trading date that the closing trading price of the Company’s common stock reaches or exceeds $30.00 per share; (ii) 40% will vest on the 30th consecutive trading date that the closing trading price of the Company’s common stock reaches or exceeds $40.00 per share; and (iii) 20% will vest on the 30th consecutive trading date that the closing trading price of the Company’s common stock reaches or exceeds $55.00 per share, in each case subject to continued service on each applicable vesting date. Retirement Savings, Health and Welfare Benefits Our NEOs participate in our company-sponsored benefit programs on the same basis as other salaried employees, including a standard complement of health and welfare benefit plans and a 401(k) plan, which is intended to qualify under Section 401(k) of the Internal Revenue Code of 1986, as amended, such that a portion of their eligible compensation may be deferred on a pre-tax basis. Under the 401(k) plan, employees may elect to reduce their current compensation by up to the statutorily prescribed annual limit and to have the amount of such reduction contributed to the 401(k) plan. In 2017, we provided matching contributions to employees under the 401(k) plan in amounts up to 50% of employees’ contributions, up to 8% of annual earnings. Perquisites and Other Personal Benefits We do not currently provide perquisites to our NEOs, and we do not view perquisites or other personal benefits as a significant component of our executive compensation program. In the future, we may provide perquisites or other personal benefits in limited circumstances, such as where we believe it is appropriate to assist an individual executive officer in the performance of his or her duties, to make our executive officers more efficient and effective, and for recruitment, motivation, or retention purposes. All future practices with respect to perquisites or other personal benefits will be approved by the Compensation Committee.