CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
The following is a description of transactions, since January 1, 2020, in which we have been a participant, in which the amount involved
exceeds $120,000, and in which any of our directors, executive officers or holders of more than 5% of our capital stock, or an affiliate or immediate family member thereof, had or will have a direct or indirect material interest. We refer to such
transactions as related party transactions and such persons as related parties. With the approval of the Audit Committee, we have engaged in the related party transactions described below. We believe the terms obtained or
consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, from unaffiliated third parties.
Other than as described below, there have not been, nor are there any currently proposed, transactions or series of similar transactions to
which we have been or will be a party other than compensation arrangements, which are described where required under the Compensation of Named Executive Officers and Director Compensation sections above.
ARC Therapeutics, LLC
On May 22,
2020, we entered into an exclusive license agreement with ARC Therapeutics, LLC (ARC), a company primarily owned by Fredric N. Eshelman, Pharm.D., a former director, whereby we granted to ARC an exclusive, worldwide,
royalty-bearing license, with the right to sublicense, solely to make, have made, use, sell, offer for sale, import, export, and commercialize products related to our cyclin dependent kinase 2 (CDK2) inhibitor compounds. At close, we received
consideration in the form of an upfront payment of $1.0 million and an equity interest in ARC equal to 10% of ARCs issued and outstanding units valued at $1.1 million. In addition, we may receive a future development milestone
payment totaling $2.0 million and royalty payments in the mid-single digits based on net sales of the licensed compound after commercialization. We have the right of first negotiation to reacquire these
assets. This transaction was approved by our Audit Committee in accordance with our related-party transactions policies and procedures.
CEO Transition
In connection with our CEO transition, we entered into senior advisor agreements with John E. Bailey, Jr., as incoming CEO, and Mark
A. Velleca, M.D., Ph.D., as outgoing CEO. As described in the Compensation of Named Executive Officers section above, we entered into a senior advisor agreement with Mr. Bailey, then a member of our Board of Directors, effective October 1,
2020. Pursuant to the terms of the agreement, he received $60,000 per month for his services through December 31, 2020. Mr. Bailey became our President and Chief Executive Officer effective January 1, 2021. Although Mr. Bailey
will continue to serve on our Board of Directors, he will not receive any additional compensation for his service as a director. Our Board of Directors, including all Audit Committee members, with Mr. Bailey abstaining, approved the terms of
the senior advisor agreement with Mr. Bailey.
Dr. Velleca served as our President and Chief Executive Officer through
December 31, 2020 pursuant to the terms of his Employment Agreement with us, which automatically terminated when Mr. Bailey became Chief Executive Officer on January 1, 2021. We entered into a senior advisor agreement on
September 29, 2020 with Dr. Velleca with an effective date of January 1, 2021. Pursuant to the terms of the agreement, Dr. Velleca will receive $200,000 annually, paid in equal quarterly installments, for his services. The senior
advisor agreement will expire on December 31, 2023. Dr. Vellecas currently outstanding options to purchase our common stock will continue to vest pursuant to their current vesting schedule while he serves as a senior advisor. Upon a
change in control of the Company, all of Dr. Vellecas unvested stock options shall vest and be immediately exercisable. Dr. Velleca will continue to serve on our Board of Directors and he will begin to receive an annual cash retainer
(currently in an amount of $40,000 per year) pursuant to the Companys Director Compensation Policy during the remainder of his term as a director; however, he will not receive any additional equity grants. Our Board of
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