AKAO 2018 Proxy Statement

42 reduced so that no portion would be subject to the excise tax, whichever would result in the largest payment to the executive on an after-tax basis. In February 2017, our Compensation Committee approved a new form of change in control severance agreement, providing for a new tiers of benefits for our President/Executive Vice Presidents and Vice President. In connection with Mr. Wise’s promotion to President and Chief Operating Officer, we entered into this new form of change in control severance agreement with Mr. Wise. Pursuant to this agreement, in the event his employment is terminated other than for cause or he experiences a constructive termination, in each case, other than during the period commencing three months prior to and ending 12 months following a change in control, and he executes and does not revoke a general release of claims in favor of the Company, then (i) he will receive a severance payment equal to 12 months of his base salary, payable in a lump sum; (ii) 12 months of COBRA reimbursement; and (iii) 12 months’ accelerated vesting of his outstanding equity awards. In addition, in the event Mr. Wise’s employment is terminated other than for cause or he experiences a constructive termination, in each case, during the period commencing three months prior to and ending 12 months following a change in control of the Company, and he executes and does not revoke a general release of claims in favor of the Company, then (i) he will receive a severance payment equal to 15 months of his base salary, payable in a lump sum; (ii) 100% of his target annual bonus, payable in a single lump sum; (iii) 15 months of COBRA reimbursement; and (iii) full vesting acceleration of his outstanding equity awards. Mr. Wise’s new change in control severance agreement also contains a 280G “best pay” provision. In connection with Mr. Wise’s and Dr. Hillan’s appointments to Chief Executive Officer and President, R&D, respectively, effective January 1, 2018, we entered into new change in control severance agreements with each of them, as described above under “2018 Leadership Transition.” Equity Incentive Plans Under our 2014 Equity Incentive Award Plan and our Amended and Restated 2003 Stock Plan, in the event that within the twelve month period following a change in control, a participant is terminated by the Company other than for “cause” (as defined in the applicable plan) or by the participant for “good reason” (as defined in the applicable plan), then each outstanding equity award held by the participant will vest in full on the date of his or her termination. Transition and Separation Agreement with Ian Friedland In connection with Dr. Friedland’s resignation from his position as our Chief Medical Officer, we entered into a transition and separation agreement (the “Separation Agreement”) with him on March 14, 2017, which provided for certain severance payments and benefits in exchange for a release of claims against the Company, and, effective as of March 16, 2017, amended the consulting agreement we had entered into with Planet Pharma, LLC (a firm with which Dr. Friedland is associated) dated March 15, 2013 (as amended, the “Consulting Agreement”) to provide for Dr. Friedland’s continued availability to us to provide services through July 31, 2017 on an as-needed basis to support the Company’s clinical operations. The consulting services were extended in a separate consulting agreement with Friedland Strategic Consulting, LLC dated August 1, 2017 (“Extended Consulting Agreement”). Pursuant to the Separation Agreement, Dr. Friedland received (i) a cash payment of $319,800, which constitutes nine months of base salary, (ii) up to nine months of reimbursement for continued healthcare pursuant to COBRA, and (iii) nine months of vesting acceleration on his outstanding equity awards subject to time-based vesting. Pursuant to the Consulting Agreement, in exchange for Dr. Friedland’s availability to provide continued services to the Company, the Company will pay Planet Pharma, LLC a consulting fee of $40,000 per month up to a maximum of $180,000 through July 31, 2017. While providing services under the Consulting Agreement, Dr. Friedland’s time-based stock options and restricted stock units continue to vest and his performance-based options and restricted stock units remain eligible to vest if the performance goals applicable to them are achieved. Pursuant to the Extended Consulting Agreement, in exchange for Dr. Friedland’s availability to provide continued services to the Company, the Company will pay Friedland Strategic Consulting, LLC a consulting fee of $32,000 per month up to a maximum of $352,000 through June 30, 2018. While providing services under the Extended Consulting Agreement, Dr. Friedland’s equity awards do not continue to vest.