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AERPIO PHARMACEUTICALS, INC.
June 20, 2018
Dear Aerpio Stockholder:
I am pleased to invite you
• accompanying Notice of Annual Meeting and Proxy Statement.
•
• To approve the Amended2023; and Restated 2017 Employee Stock Purchase Plan; and
•
| Sincerely yours, | ||||||||
| /s/ Scott Giacobello | ||||||||
| Scott Giacobello | ||||||||
| Interim President & Chief Executive Officer; Chief Financial Officer | ||||||||
| /s/ Caley Castelein, M.D. | ||||||||
| Caley Castelein, M.D. | ||||||||
| Chairman of the Board | ||||||||
The Boardthereof.
YourAnnual Meeting or any adjournment or postponement of the Annual Meeting. Further information regarding voting rights and matters to be voted upon is presented in the accompanying proxy statement.
Thank you
By Order of the Board of Directors,
Dr. Stephen HoffmanChief Executive Officer
May 15, 2018
1
YOUR VOTE IS IMPORTANT
In order to ensure your representation at the meeting, whether or not you plan to attend the meeting, please vote your shares as promptly as possibleproxy materials over the Internet under the “notice and access” rules adopted by telephone or by following the instructions on your proxy card. Your participation will help to ensure the presence of a quorum at the meetingSecurities and save Aerpio the extra expense associated with additional solicitation. If you hold your shares through a broker, your broker is not permitted to vote on your behalf in the election of directors, unless you provide specific instructions to the broker by completing and returning any voting instruction form that the broker provides (or following any instructions that allow you to vote your broker-held shares via the Internet). For your vote to be counted, you will need to communicate your voting decision before the date of the Annual Meeting. Voting your shares in advance will not prevent you from attending the Annual Meeting, revoking your earlier submitted proxy or voting your stock in person.
| By order of the Board of Directors, | ||||||||
| /s/ Scott Giacobello | ||||||||
| Scott Giacobello | ||||||||
| Interim President & Chief Executive Officer; Chief Financial Officer | ||||||||
| April 28, 2023 | ||||||||
submit questions during the Annual Meeting, and technical details and support related to accessing the virtual platform. You will not be able to attend the Annual Meeting in person. By Internet: You may vote over the Internet by following the instructions provided in the Notice of Availability or on the proxy card. Votes submitted by Internet must be received by 11:59 p.m. Eastern time on June 13, 2023. We will announce preliminary results at the Annual Meeting. We will report final results by filing a Form 8-K within four business days after the Annual Meeting. If final results are not available at that time, we will provide preliminary voting results in the Form 8-K and will provide the final results in an amendment to the Form 8-K as soon as they become available. Our Board is soliciting proxies for use at the annual meeting by means of the proxy materials. We Board and its Nominating and Corporate Governance Committee to the conclusion that he or she should serve as a director, we also believe that each of our directors has a reputation for integrity, honesty and adherence to high ethical standards. of director and committee evaluations. After completing its review and evaluation of director candidates, the Nominating and Corporate Governance Committee recommends to our Board the director nominees for selection. Age Officer; Chief Financial Officer Chief Medical Officer time establish other committees. •trends and emerging topics with respect to executive compensation; •peer group selection for executive compensation benchmarking; •compensation practices of our peer group; •compensation programs for executives and all of our employees; and •stock utilization and related metrics. our non-employee directors (the “Director Compensation •each person, or group of affiliated persons, known by us to beneficially own more than 5% of the outstanding shares of our common stock; •each of our directors; •each of our named executive officers; and •all current directors and executive officers as a group. persons. Shares Beneficially Owned Number Percentage 5% Stockholders: Novartis Bioventures Ltd.(1) 5,805,550 21.4 % Entities affiliated with OrbiMed Private Investments V, LP(2) 4,416,446 16.3 % Trusts and Other Entities affiliated with Muneer A. Satter(3) 3,241,835 11.9 % Venture Investors Early Stage Fund IV(4) 1,576,167 5.8 % Named Executive Officers and Directors: Muneer A. Satter(3) 3,241,835 11.9 % Chau Khuong(2) 4,416,446 16.3 % Steven Prelack — * Paul Weiss(4) 1,576,167 5.8 % Caley Castelein 10,920 * Anupam Dalal 2,269 * Pravin Dugel(5) 14,964 * Joseph Gardner(6) 828,374 3.0 % Steve Pakola(7) 108,129 * Stephen Hoffman — * Michael Rogers — * All directors and executive officers as a group (13 persons) 10,621,998 38.6 % Director Nominees: Cheryl Cohen — * a group. Name and Principal Position Year Salary ($) Bonus ($)(1) Option Awards ($)(2) Non-Equity Incentive Compensation ($)(3) All Other Compensation ($)(4) Total ($) Stephen Hoffman (5) 2017 39,167 2,007,300 21,542 89 2,068,098 Chief Executive Officer 2016 — — — — — Michael Rogers (6) 2017 48,296 1,000,446 21,250 47 1,070,039 Chief Financial Officer 2016 — — — — — Joseph Gardner 2017 383,675 21,000 427,880 127,551 1,069 961,175 President and Founder 2016 350,000 — — 1,069 351,069 Stephen Pakola 2017 348,131 20,400 — 76,589 41 445,161 Chief Medical Officer 2016 340,000 — — 243 340,243 Option Awards Stock Awards Name and Principal Position Vesting Commencement Date(1) Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Option Exercise Price ($) Option Expiration Date Number of Securities That Have Not Vested (#) Market Value of Securities That Have Not Vested ($) Stephen Hoffman 12/14/2017 — 586,012 (2 ) $ 5.50 12/14/2027 — $ — Chief Executive Officer Michael Rogers 12/14/2017 — 293,006 (2 ) $ 5.50 12/14/2027 — $ — Chief Financial Officer Joseph Gardner 3/22/2012 27,727 — $ 1.66 3/22/2022 — $ — President and Founder 2/18/2014 198,950 8,678 $ 2.11 2/18/2024 — $ — 10/23/2014 — — — — 36,583 $ 173,769 12/14/2017 — 135,000 (3 ) $ 5.50 12/14/2027 — $ — Stephen Pakola 12/29/2015 90,689 76,740 (2 ) $ 1.80 12/29/2025 — $ — Chief Medical Officer Name (1) Fees Earned or Paid in Cash($) Total($) Muneer Satter $ 50,271 $ 50,271 Paul M. Weiss $ 31,667 $ 31,667 Caley Castelein, M.D. $ 33,646 $ 33,646 Anupam Dalal, M.D. $ 35,625 $ 35,625 Steven Prelack $ 39,583 $ 39,583 Chau Khuong $ 33,250 $ 33,250 Pravin U. Dugel, M.D. (2) $ 33,646 $ 33,646 Purchasers Aggregate Joseph Gardner $ 37,553.38 Entities affiliated with Kearny Venture(1) $ 284,929.84 Entities affiliated with Novartis Bioventures Ltd.(2) $ 1,167,910.04 Trusts and Other Entities affiliated with Muneer A. Satter(3) $ 472,424.59 Venture Investors Early Stage Fund IV(4) $ 290,302.73 OrbiMed Private Investments V, L.P.(5) $ 813,432.86 Purchasers Shares of Common Aggregate Joseph Gardner 52,834 $ 264,179 Entities affiliated with Kearny Venture(1) 400,000 $ 2,000,000 Novartis Bioventures Ltd. 560,000 $ 2,800,000 Trusts and Other Entities affiliated with Muneer A. Satter(2) 1,120,000 $ 5,600,000 Venture Investors Early Stage Fund IV(3) 272,302 $ 1,361,510 OrbiMed Private Investments V, L.P.(4) 762,995 $ 3,814,975 Chief Executive Officer and as a member of our Board in March 2023. the section titled “ proxy statement. In particular, we are asking whether the Say-on-Pay Vote should occur once every year, every two years or every three years. appointment. Fee Category 2017 2016 Audit Fees(1) $ 695,859 $ 225,627 Audit-Related Fees(2) — — Tax Fees(3) — — All Other Fees(4) — — Total Fees $ 695,859 $ 225,627 comfort letters, consents and assistance with and review of documents filed with the SEC. 2022. Requirements for Stockholder Proposals to be Considered for Inclusion in the Company's Proxy TABLE OF CONTENTSPagePage 417203134373840AADI BIOSCIENCE, INC.17383 Sunset Boulevard, Suite A250Pacific Palisades, California 90272PROXY STATEMENTFOR THE 20182023 ANNUAL MEETING OF STOCKHOLDERSThis proxy statement (“Proxy Statement”) is furnished in connection with the solicitation of proxies by the Board of Directors (the "Board"“Board”) solicits your proxy on our behalfof Aadi Bioscience, Inc. (the “Company”) for use at the 20182023 Annual Meeting of Stockholders (the "Annual Meeting")of the Company and at any postponementadjournments, postponements or adjournment of the Annual Meeting for the purposes set forth in this Proxy Statement.continuations thereof (the “Annual Meeting”). The Annual Meeting will be held at 10:3000 a.m. EasternPacific Time on Wednesday, June 20, 201814, 2023. The Annual Meeting will be a virtual meeting, which will be conducted via live webcast.There will be no physical location for stockholders to attend. You will be able to attend the meeting virtually via the Internet at www.virtualshareholdermeeting.com/AADI2023, where you will be able to vote electronically and submit questions. To participate in the Annual Meeting, you will need your 16-digit control number, which is located on the Notice of Internet Availability of Proxy Materials (the “Notice of Availability”) that you received in the mail, included on your proxy card (printed in the box and marked by the arrow) or on the instructions that accompanied your proxy materials. The Notice of Availability containing instructions on how to access the Proxy Statement and our Annual Report is first being mailed on or about April 28, 2023 to all stockholders entitled to vote at the officesAnnual Meeting. The proxy material and our 2022 Annual Report can be accessed by following the instructions in the Notice of Goodwin Procter LLP, which are located at 620 Eighth Avenue, New York, NY 10018. We made thisAvailability.Please see the “General Information” section of the Proxy Statement availablefor more details regarding the logistics of the virtual Annual Meeting, including the ability of stockholders to stockholders beginning on May 15, 2018.All properly submitted proxies will be voted in accordance with the instructions contained in those proxies. If no instructions are specified, the proxies will be voted in accordance with the recommendation of our Board with respect to each of the matters set forth in the accompanying Notice of Meeting. You may revoke your proxy at any time before it is exercised at the meeting by giving our corporate secretary written notice to that effect.In this Proxy Statement, the terms "Aerpio," "the company," "we," "us,"“Aadi,” the “company,” “we,” “us,” and "our"“our” refer to Aerpio Pharmaceuticals,Aadi Bioscience, Inc. and, where appropriate, our subsidiary. The mailing address of our principal executive offices is Aerpio Pharmaceuticals,Aadi Bioscience, Inc., 9987 Carver Road,17383 Sunset Boulevard, Suite 420, Cincinnati, Ohio 45242.A250 Pacific Palisades, California 90272.Important Notice Regarding the Availability of Proxy Materials forthe Annual Meeting of Stockholders to be Held on June 14, 2023This Proxy Statement and our Annual Report areavailable for viewing, printing and downloading at www.proxyvote.comA copy of our 2022 Annual Report will be furnished without charge to any stockholder upon written request to Aadi Bioscience, Inc., 17383 Sunset Boulevard, Suite A250 Pacific Palisades, California 90272, Attention: Corporate Secretary. This Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 are also available on the Securities and Exchange Commission ("SEC") website at www.sec.gov.1AADI BIOSCIENCE, INC.PROXY STATEMENTFOR THE 2023 ANNUAL MEETING OF STOCKHOLDERSGENERAL INFORMATIONMailingAccess to Proxy Materials The Notice of Proxy MaterialsWe are mailing our proxy materials on May 15, 2018, and they will includeAvailability containing instructions on how to vote.Record DateApril 21, 2018.Record Date The Board has fixed the close of business on April 25, 2023 as the record date (the “Record Date”) for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting or any postponement, adjournment or continuation thereof. Accordingly, only stockholders of record at the close of business on the Record Date are entitled to notice of, and shall be entitled to vote at, the Annual Meeting or any postponement, adjournment or continuation thereof. Quorum A majority of the voting power of all outstanding stock entitled to vote on the record dateRecord Date must be present in person or represented by proxy to constitute a quorum. Abstentions and “broker non-votes” are counted as present and entitled to vote for purposes of determining a quorum. A “broker non-vote” occurs when a broker, bank, trustee, or other nominee holding shares for a beneficial owner does not vote on a particular proposal because that holder does not have discretionary voting power for that particular item and has not received voting instructions from the beneficial owner. If there is no quorum, the chairperson of the meeting or the holders of a majority of the issued and outstanding shares of common stock present at the Annual Meeting may adjourn the meeting to another date.Shares Outstanding 27,146,09924,436,990 shares of common stock outstanding as of April 21, 2018.2ThereVoting If your shares are registered directly in your name, and you are a “stockholder of record,” there are four ways a stockholder of recordthat you can vote:(1)(2)materials.(2)By telephone:Telephone: You may vote over the telephone by following the instructions provided in the proxy materials.(3)By Mail: You can vote by mailing your proxy as described inNotice of Availability or on the proxy materials.(4)In Person: If you are a stockholder as of the record date, you may vote in person at the meeting. Submitting a proxy will not prevent a stockholder from attending the Annual Meeting, revoking their earlier-submitted proxy, and voting in person.In order to be counted, proxiescard. Votes submitted by Internet and telephone must be received by 11:59 p.m. Eastern Timetime on June 19, 2018.13, 2023.(3)By Mail: If you requested printed copies of the proxy materials by mail, you can vote by completing and mailing your proxy card in the enclosed postage prepaid envelope provided. Proxies submitted by U.S. mail must be received before the start of the Annual Meeting.(4)By Attending the Annual Meeting Virtually: You may vote at the Annual Meeting by following the instructions available at www.virtualshareholdermeeting.com/AADI2023. Have your proxy card or Notice of Availability in hand as you will be prompted to enter your 16-digit control number to vote at the Annual Meeting.If your shares are held in an account at a bank or a brokerage firm or other nominee holder, you holdare considered the beneficial owner of shares held in “street name.” The availability of Internet and telephone voting options will depend on the voting process of your broker, bank or other nominee. You will receive instructions from your bank, broker or other nominee explaining how you can vote your shares. Please follow their instructions. If your voting instruction form or Notice of Availability indicates that you may vote your shares through the Internet, then you may vote those shares at the Annual Meeting with the control number indicated on that voting instruction form or the Notice of Availability. Otherwise, you may not vote your shares at the Annual Meeting unless you obtain a legal proxy from your broker, bank or broker, please follow their instructions.other nominee.Revoking Your Proxy Before the polls close, stockholdersStockholders of record may revoke their proxies by at any time before they are voted by:•attending the Annual Meeting and voting in person, directly at the meeting;•by filing an instrument in writing revoking the proxy or proxy;•by filing another duly executed proxy bearing a later date with our Secretary before the vote is countedpolls close; or•by voting again using the Internet or telephone before the cutoff time (your latest Internet or telephone proxy is the one that will be counted), unless such proxy states that it is irrevocable and it is coupled with an interest sufficient in law to support an irrevocable power. If you hold shares through a bank or broker, you may revoke any prior votingmust contact your bank or broker for instructions by contacting that firm.as to how to change your vote.3Votes Required to Adopt Proposals Each share of our common stock outstanding on the record dateRecord Date is entitled to one vote on each proposal presented at the Annual Meeting:For ProposalOne the election of directors,, the three nominees receiving the most votes (also known as a plurality of votes properly castvote) will be elected as directors.For Proposal Two, the affirmative vote of a majority of the voting power of the shares present in person (including virtually) or represented by proxy at the annual meeting and entitled to vote thereon is required to approve, on an advisory basis, the compensation awarded to our named executive officers for the year ended December 31, 2022.For Proposal Three, the frequency receiving the highest number of votes properly castfrom the holders of shares present in person or by proxy at the meeting and entitled to vote thereon will be considered the frequency preferred by the stockholders.For Proposal Four, the affirmative vote of a majority of the voting power of the shares present in person (including virtually) or represented by proxy at the annual meeting and entitled to vote thereon is required to ratify the appointment of Ernst & Young,BDO USA LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018.For Proposal Three, a majority of the votes properly cast is required to approve the Amended and Restated 2017 Employee Stock Purchase Plan (“ESPP”).Effect of Abstentions and Broker Non-Votes VotesFor Proposal One, votes withheld from any nominee, abstentions and "broker nonvotes" (i.e., where a broker has not received voting instructions from the beneficial owner and for which the broker does not have discretionary power to vote on a particular matter) are counted as present for purposes of determining the presence of a quorum. Shares voting "withheld"quorum but have no effect on the election of directors. AbstentionsFor Proposal Two, abstentions have the same effect as a vote against the proposal. Broker non-votes are not included in the tabulation of voting results on this proposal, and will not affect the outcome of voting on this proposal.For Proposal Three, abstentions and broker non-votes will have no effect on the outcome of this proposal.For Proposal Four, abstentions will have the same effect as a vote against the proposal for the ratification of the appointment of Ernst & Young,BDO USA LLP as our independent registered public accounting firm for the fiscal year ending December 31, 20182023. Broker non-votes are not included in the tabulation of voting results on this proposal, and will not affect the outcome of voting on this proposalIf you are a beneficial owner, your broker, bank, trustee, or for the approval of the ESPP.Under the rules that govern brokers holding shares for their customers, brokers who do not receive voting instructions from their customers have the discretionother nominee is permitted to vote uninstructedyour shares on routine matters, but do not have discretion to vote such uninstructed shares on non-routine matters. Only Proposal Two, the ratification of the appointment of Ernst & Young,BDO USA LLP is considered a routine matter where brokers are permittedas our independent registered public accounting firm for the year ending December 31, 2023, even if the record holder does not receive voting instructions from you. However, your broker, bank, trustee, or other nominee does not have discretionary authority to vote shares held by themon the election of the Class III directors without instruction. If your shares are held throughinstructions from you, in which case a broker thosenon-vote will occur and your shares will not be voted inon this matter. In addition, discretionary voting is not allowed with respect to the proposals seeking an advisory vote on approval of executive compensation and the frequency for seeking such an advisory stockholder vote on executive compensation. Accordingly, if you are a beneficial owner, it is particularly important that you provide your instructions for voting your shares to your broker, bank, trustee, or other nominee on the election of the Class III directors, unless you affirmatively provide the broker instructionsadvisory vote on how to vote.4Voting Instructions If you complete and submit your proxy voting instructions, the persons named as proxies will follow your instructions. If you submit proxy voting instructions but do not direct how your shares should be voted on each item, the persons named as proxies will vote your shares in the manner recommended by the Board on all matters presented in this Proxy Statement. The persons named as proxies will vote on any other matters properly presented at the Annual Meeting in accordance with their best judgment, although we have not received timely notice of any other matters that may be properly presented for voting at the Annual Meeting. Voting Results Additional Solicitation/Costs are paying forwill bear the entire cost of the distribution of the Notice of Availability and our proxy materials and solicitation of the proxies. As part of this process, we reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to our stockholders. Proxy solicitation expenses that we will pay include those for preparation, mailing, returning and tabulating the proxies. Our directors, officers, and employees may also solicit proxies on our behalf in person, by telephone, email or facsimile, but they do not receive additional compensation for providing those services.Merger with Aerpio Pharmaceuticals, Inc On August 26, 2021 (the “Closing Date”), Aadi Bioscience, Inc., a Delaware corporation (f/k/a Aerpio Pharmaceuticals, Inc.), completed its business combination with Aadi Subsidiary, Inc. (f/k/a as Aadi Bioscience, Inc., or “Private Aadi”), in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated May 16, 2021, by and among Aadi, Aspen Merger Subsidiary, Inc. (“Merger Sub”) and Private Aadi (the “Merger Agreement”), pursuant to which Merger Sub merged with and into Private Aadi, with Private Aadi surviving as a wholly owned subsidiary of ours (the “Merger”). 5
PROPOSAL ONEBoard StructureOur Board currently consists of Directors; Board StructureOur Boardeight (8) members and is divided into three staggered classes of directors as nearly equal in number as possible. One class is elected each year at the annual meeting of stockholders for a term of three years. The term of the Class IIII directors expires at the Annual Meeting. The term of the Class I directors expires at the 2024 annual meeting and the term of the Class II directors expires at the 2019 annual meeting. The term of the Class III directors expires at the 20202025 annual meeting. Directors are elected to hold office for a three-year term orand until the election and qualification of their successors in office. Our directors as of April 21, 2018 are set forth below:
Director NomineesNameAgePosition(s)Stephen Hoffman64Chief Executive Officer and DirectorMuneer Satter57Director and Chairman of the Board of DirectorsJoseph Gardner62President and Founder and former Chief Executive Officer and DirectorSteven Prelack60DirectorAnupam Dalal46DirectorPravin Dugel54DirectorChau Khuong41DirectorPaul Weiss60Director (not nominated for re-election by the Nominating and Corporate Governance Committee)Caley Castelein47DirectorBased on the recommendation of the Nominating and Corporate Governance Committee, of our Board, our Board has nominated Cheryl Cohen, Caley Castelein,Behzad Aghazadeh, Ph.D., Richard Maroun and Stephen HoffmanEmma Reeve for election as the Class III directors to serve for a three-year term ending at the 20212026 annual meeting orand until their successors are elected and qualified. Caley Casteleinqualified, or until their earlier resignation, death or removal. Dr. Aghazadeh, Mr. Maroun and Stephen Hoffman Ms. Reeveare current members of our Board and have consented to serve, if elected. Cheryl Cohen was nominated by our Nominating and Corporate Governance Committee and has consented to serve if elected. Paul Weiss’ term as a director expires at the Annual Meeting, and he was not nominated for re-election by our Nominating and Corporate Governance Committee.Unless you direct otherwise through your proxy voting instructions, the persons named as proxies will vote all proxies received "for""FOR" the election of each nominee. If any nominee is unable or unwilling to serve at the time of the Annual Meeting, the persons named as proxies may vote for a substitute nominee chosen by the present Board. In the alternative, the proxies may vote only for the remaining nominees,nominee, leaving a vacancy on the Board. The Board may fill such vacancy at a later date or reduce the size of the Board. We have no reason to believe that any of the nominees will be unwilling or unable to serve if elected as a director.Vote RequiredEach director is elected by a plurality of the voting power of the shares present in person (including virtually) or represented by proxy at the meeting and entitled to vote on the election of directors. Because the outcome of this proposal will be determined by a plurality vote, any shares not voted FOR a particular nominee, whether as a result of choosing to WITHHOLD authority to vote or a broker non-vote, will have no effect on the outcome of the election.Recommendation of the BoardTHE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF EACH OF THE FOLLOWING NOMINEES.THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF EACH OF THE NOMINEES SET FORTH BELOW. The biographies of each of the nominees and continuing directors below contain information regarding each such person's service as a director, business experience, public company director positions held currently or at any time during the last five years and the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee to determine that the person should serve as a director of the company.Company. In addition to the information presented below regarding each such person's specific experience, qualifications, attributes and skills that led theEachWhile the Board has not established specific minimum qualifications for Board members, our Board and Nominating and Corporate Governance Committee believe that the assessment of our directors has demonstrateddirector qualifications may include numerous factors, such as character, professional ethics and integrity, judgment, business acumen, proven achievement and ancompetence in one’s field, the ability to exercise sound business judgment, tenure on the Board and skills that are complementary to the Board, an understanding of the Company’s business and an understanding of the responsibilities that are required of a member of the Board, other than time commitments. Diversity with respect to professional background, education, race, gender, age and geography, as well as other individual qualities and attributes that contribute to the total mix of viewpoints and experience represented on the Board. Our Nominating and Corporate Governance Committee and Board evaluate each director in the context of the membership of the Board as a commitmentgroup, with the objective of servicemaintaining a Board that can best perpetuate the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of backgrounds and experiences in various areas. In determining whether to Aerpiorecommend a director for re-election, the Nominating and Corporate Governance Committee also considers the director’s past attendance at meetings, participation in and contribution to the activities of the Board and the Company and other qualifications and characteristics set forth in the charter of the Nominating and Corporate Governance Committee.6Although our Board. Finally,Board does not maintain a specific policy with respect to board diversity, our Board believes that it should be a diverse body, and its Nominating and Corporate Governance Committee considers a broad range of backgrounds and experiences. In addition, we value our directors' experience in relevant areasintend to satisfy applicable laws and regulations regarding board composition, including the rules of business management and on other boardsthe Nasdaq Capital Market ("Nasdaq") regarding “diverse” directors. In making determinations regarding nominations of directors, our Nominating and Corporate Governance Committee may take into account the benefits of diverse viewpoints. Our Board’s Nominating and Corporate Governance Committee also considers these and other factors as it oversees the annual board committees.Our corporate governance guidelines also dictate that a majority of the Board be comprised of independent directors whom the Board has determined have no material relationship with AerpioAadi and who are otherwise "independent" directors under the published listing requirements of Nasdaq.Board Diversity Matrix (as of April 25, 2023)The table below provides certain highlights of the composition of our Board members and nominees as of April 25, 2023. Each of the categories listed in the table below has the meaning as it is used in Nasdaq Global Market ("Nasdaq")Rule 5605(f).Board Diversity Matrix as of April 25, 2023 Total Number of Directors: 8 Part I: Gender Identity Male Female Non-Binary Did Not Disclose Gender Directors 6 2 — — Part II: Demographic Background African American or Black — — — — Alaskan Native or American Indian — — — — Asian 2 — — — Hispanic or Latinx — — — — Native Hawaiian or Pacific Islander — — — — White 4 2 — — Two or More Races or Ethnicities — — — — LGBTQ+ — — — — Did Not Disclose Demographic Background — — — — Director NomineesThe Class III nominees for Election for a Three-Year Term Ending at the 2021 Annual MeetingCheryl CohenCaley CasteleinStephen HoffmanDirectors Continuing in Office Until the 2020 Annual MeetingJoseph GardnerMuneer SatterChau KhuongDirectors Continuing in Office Until the 2019 Annual MeetingSteven PrelackAnupam DalalPravin DugelMuneer A. Satterdirector along with their biographical information as of April 25, 2023 are set forth below:Name Age Position(s) Director Since Board Class / Term Expiration Behzad Aghazadeh, Ph.D. 51 Director 2021 III - 2026 Richard Maroun 68 Director 2021 III - 2026 Emma Reeve 62 Director 2021 III - 2026 Behzad Aghazadeh, Ph.D., has served as a member of Aerpio’sAadi’s board of directors since October 2013. Mr. Satter has been Founder andAugust 2021. Dr. Aghazadeh currently is the Managing Partner and Portfolio Manager of Satter Medical Technology Partners, L.P. since 2016,Avoro Capital Advisors LLC, a global life sciences investment firm with a focus on supporting emerging biotechnology companies, which he joined in July 2011. From March 2017 to October 2020, Dr. Aghazadeh served as Executive Chairman of Satter Investment Management LLC since 2012, and he also manages the Satter Foundation. Prior to Satter Investment Management, Mr. Satter was a partner at Goldman Sachs where he spent 24 years in various roles, most recently as the Global Head of the Mezzanine Group in the Merchant Banking Division, where he raised and managed over $30 billion of assets. Mr. Satter is chairman of the board of directors of Akebia Therapeutics and Restorsea Holdings, LLC andImmunomedics, Inc., a directorbiopharmaceutical company (now a subsidiary of Vital Therapies,Gilead Sciences, Inc., Linq3 Technologies LLC and Annexon Biosciences. He also). Dr. Aghazadeh additionally serves as vice chairman of Goldman Sachs Foundation and GS Gives, is a director of World Business Chicago, is on the Boardboard of Advisorsdirectors of the American Enterprise Institute, is on the Board of Directors of the Navy SEAL Foundation, and is on the Board of Trustees of Northwestern University where he is Chairman of the Finance Committee. Mr. Satter receivedScribe Therapeutics Inc., a B.A. in Economics from Northwestern University, a J.D. from Harvard Law School and an M.B.A. from Harvard Business School.private molecular engineering company developing advanced technologies for CRISPR-based genetic medicine. We believe that Mr. SatterDr. Aghazadeh is qualified to serve as a director based on his more than 25 years of experience in the biopharmaceutical industry, including more than 15 years as an institutional investor and previous six years at Booz Allen as a general management consultant to senior executive teams in the healthcare sector.Richard Maroun served as a member of Private Aadi’s board of directors from February 2017 until the closing of the Merger in August 2021, at which time he became a member of our board of directors. Since June 2014, Mr. Maroun has7served as Partner, General Counsel at Frazier Healthcare Partners, a private equity and venture capital firm. Prior to joining Frazier, Mr. Maroun was Senior Vice President and General Counsel of Aptalis Pharma US, Inc. from 2012 through February 2014. Previously, Mr. Maroun has served in numerous senior executive roles for APP Pharmaceuticals, Inc., a fully-integrated pharmaceutical company, including as Executive Vice President, Chief Administrative Officer, General Counsel, and Business Development Officer. Mr. Maroun has also previously held senior positions with Abraxis Bioscience, Inc., a biotechnology company, and American BioScience, Inc., a company involved in the research and development of novel drug compounds. Prior to joining American BioScience, Mr. Maroun was a Director of Merrill Lynch, Pierce, Fenner & Smith, and before that he was a Senior Tax Manager of Deloitte & Touche LLP. In May 2021, Mr. Maroun was nominated to serve as a member of the board of directors dueof Lazard Healthcare Acquisition Corp. I (“Lazard”), a newly organized blank check company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, to be effective on the effective date of Lazard’s registration statement. Mr. Maroun also currently serves as a board member or advisor of several privately-held companies funded by Frazier Healthcare Partners, including Community Care Health Network, LLC, Parata Systems, Inc., Orthotic Holdings, Inc., and AppianRx, and was previously a member of the board of directors of Organovo Holdings, Inc., a publicly traded biotechnology company, from August 2016 to July 2020. Mr. Maroun holds a LL.M. in Taxation from Boston University School of Law, a J.D. from Santa Clara University School of Law, and a B.S. degree in economics from John Carroll University. We believe Mr. Maroun is qualified to serve as a director based on his extensive investment experience.Paul M. Weiss Ph.D.leadership experience in the life sciences industry, his experience in mergers, acquisitions, and finance, and his legal and accounting expertise.Emma Reeve has served on Aerpio’sAadi’s board of directors since November 2011. Since 2006, Dr. Weiss has been Managing DirectorSeptember 2021. Ms. Reeve served as Senior Vice President and Chief Financial Officer of Venture Investors. From 2001Constellation Pharmaceuticals, Inc., a development-stage oncology company, from October 2017, and as its Treasurer from December 2020, until its acquisition in July 2021, and was its Secretary between December 2017 and September 2018. Prior to 2006 Dr. Weissjoining Constellation, Ms. Reeve served as Corporate Controller of Parexel International, a life sciences consulting firm and contract research organization, from September 2014 to October 2017, and as Interim Chief Financial Officer and Corporate Controller of Parexel from July 2016 to May 2017. Previously, Ms. Reeve served as Head of Finance and Administration at Novartis Pharma Schweiz, a pharmaceutical company, from May 2012 to August 2014, and as Vice President, Global Head Business Planning and Analysis for Novartis Vaccines and Diagnostics, a division of Novartis, from January 2008 to April 2012. Prior to that, she served as the PresidentChief Financial Officer of Inotek Pharmaceuticals Inc., and of Aton Pharma, Inc., and in operational and finance roles at Gala Design, which was sold to Cardinal Health (now part of Catalent). From 1997 to 2000, Dr. WeissMerck Research Laboratories and Bristol Myers Squibb Company. Ms. Reeve has served as a member of the VPboards of Business Development/VPdirectors of TechnologyEditas Medicine, Inc., a publicly traded biopharmaceutical company, since September 2021, and Product Licensing at 3-Dimensional Pharmaceuticals (IPO and subsequent sale to Johnson & Johnson). Prior to that, Dr. Weiss worked as Director of Licensing for thePTC Therapeutics, Inc., a publicly traded pharmaceutical company, Wyeth-Ayerst (now partsince December 2018. Ms. Reeve holds a B.Sc. in computer science from Imperial College, University of Pfizer). Currently, he alsoLondon and is an associate of the Institute of Chartered Accountants in England & Wales. Ms. Reeve serves on our Audit Committee and she qualifies as an audit committee financial expert under the SEC rules. We believe Ms. Reeve is qualified to serve as a director at FluGenbased on her extensive industry knowledge, financial and Madison Vaccines. He servedaccounting expertise as a directorformer chief financial officer and her life sciences expertise.Continuing DirectorsThe directors continuing their term and respective biographical information as of Akebia Therapeutics (Nasdaq: AKBA), Tissue Regeneration Systems,April 25, 2023 are set forth below:Name Age Position(s) Director Since Board Class / Term Expiration Caley Castelein, M.D. 52 Chairman of the Board; Director 2017 I - 2024 Neil Desai, Ph.D. 58 Executive Chairman; Director 2021 I - 2024 Anupam Dalal, M.D. 51 Director 2011 II - 2025 Karin Hehenberger, M.D., Ph.D. 50 Director 2021 II - 2025 Mohammad Hirmand, M.D. 53 Director 2023 II - 2025 and Neurovance (sold to Otsuka). Dr. Weiss holds a Ph.D. in Biochemistry and an M.B.A. from the University of Wisconsin-Madison and a B.Sc. in Biochemistry from Carleton University Institute of Biochemistry. Dr. Weiss’ term as a director expires at the Annual Meeting, and he was not nominated for re-election by our Nominating and Corporate Governance Committee.Caley Castelein, M.D., has served on Aerpio’sthe board of directors of Aadi (formerly known as Aerpio Pharmaceuticals, Inc. through August 2021) since March 2017. Dr. Castelein is the Founder and has been a Managing Director for Kearny Venture Partners, a healthcare investment firm, since 2006. Dr. Castelein is also the Founder and has been the Managing Director for KVP Capital, an investment fund, since 2013. He is a director for ViewRay Alivecor, Boreal(NASDAQ: VRAY), Tourmaline Bio, and Newbridge Pharmaceuticals. Previously, Dr. Castelein served on the board of directors of Alivecor, a medical device company from April 2015 to March 2020; Boreal Genomics, a diagnostics company, from October 2010 to September 2021; Waterstone Pharmaceuticals, a pharmaceutical company from March 2015 to March 2018; Wellpartner, a pharmaceutical distribution solutions company, from March 2015 to November 2017; and Neos Therapeutics, a pharmaceutical company from March 2015 to July 2015. Dr. Castelein received his M.D. from University of California,8San Francisco and his A.B. in Biology from Harvard University. We believe that Dr. Castelein is qualified to serve as a director based on his industry experience and service on multiple company boards.Neil Desai, Ph.D., founded Private Aadi in October 2011 and served as President, Chief Executive Officer, and a member of the board of directors of Private Aadi from inception until the closing of the Merger in August 2021, at which time he became a member of our board of directors and our President and Chief Executive Officer, a role he held until his appointment to Executive Chairman of Aadi in January 2023. From October 2010 to October 2016, Dr. Desai served as Vice President, Strategic Platforms at Celgene Corporation (now Bristol Myers Squibb), a global biopharmaceutical company. Prior to Celgene, Dr. Desai served as Senior Vice President, Global Research and Development at Abraxis BioScience, Inc., a biotechnology company, from November 2008 until Abraxis BioScience was acquired by Celgene Corporation in October 2010 and as Vice President, Research & Development at Abraxis BioScience from March 1999 to October 2008. Dr. Desai has also previously served in positions of increasing seniority at American BioScience, Inc. and its predecessor companies. Dr. Desai holds a M.S and Ph.D. in Chemical Engineering from the University of Texas at Austin, and a B.S. in Chemical Engineering from the University Institute of Chemical Technology in Mumbai, India. We believe Dr. Desai is qualified to serve as a director based on his leadership track record, broad experience in the life sciences industry, and his service as Aadi’s Executive Chairman.Anupam Dalal, M.D., has served on Aerpio’sthe board of directors of Aadi (formerly known as Aerpio Pharmaceuticals, Inc. through August 2021) since November 2011. Since August 1, 2016, Dr. Dalal has been working at Acuta Capital.Capital, a financial investment group. From 2006 to 2016, Dr. Dalal was the Managing Director of Kearny Venture Partners.Partners, a healthcare investment firm. He was a Founder and Managing Member of KVP Capital.Capital, an investment fund. He served as a director of Akebia Therapeutics from 2008 to 2016. Dr. Dalal received an M.D. degree from the University of California in San Francisco with honors; an M.B.A., with distinction, from Harvard Business School; and a B.A. degree in Economics, Phi Beta Kappa and highest honors, from the University of California at Berkeley. We believe that Dr. Dalal is qualified to serve as a director based on his industry experience.Steven PrelackKarin Hehenberger, M.D., Ph.D., has served on Aerpio’sour board of directors since August 2021. Dr. Hehenberger has served as Chief Executive Officer of Lyfebulb, Inc., a patient engagement platform, since January 2014. From 2011 to 2013, Dr. Hehenberger served in various roles at Coronado Biosciences, Inc. (now Fortress Biotech, Inc.), including Senior Vice President of Scientific Affairs and Chief Medical Officer. Dr. Hehenberger has previously served in several management positions including as Vice President, Metabolics Strategy and Business Development at Johnson & Johnson, and Senior Vice President Strategic Alliances at Juvenile Diabetes Research Foundation (“JDRF”), a nonprofit funder of type 1 diabetes research. Dr. Hehenberger previously served as Senior Director of Scientific Communications at Eyetech Pharmaceuticals, Inc., a biopharmaceutical company, and Senior Investment Director and Partner at Scandinavian Life Science Venture. Dr. Hehenberger serves on the board of directors of the American Diabetes Association, the Rolf Luft Foundation for Diabetes Research, and Diamyd Medical. Dr. Hehenberger holds a M.D. and Ph.D. from Karolinksa Institute in Stockholm, Sweden. Dr. Hehenberger did her JDRF post-doctoral fellowship at the Joslin Diabetes Center at Harvard Medical School. We believe Dr. Hehenberger is qualified to serve as a director based on her extensive industry knowledge and her medical and life sciences expertise.Mohammad Hirmand, M.D., has served on Aadi's board of directors since March 2017. Mr. Prelack has been2023. Dr. Hirmand is the Chief Operating Officer and Senior Vice Presidentco-founder of, VetCor since 2010. He is a director at Galectin Therapeutics and Pieris, Mr. Prelack holds a CPA and has served as executive vice president and chief medical officer of, Avenzo Therapeutics, Inc., a B.B.A.privately held biotechnology company focused on oncology therapeutics. Prior to that, Dr. Hirmand served as executive vice president and chief medical officer of Turning Point Therapeutics, a publicly traded precision oncology company, where he was responsible for clinical development, clinical operations and regulatory affairs, from December 2019 until its acquisition by Bristol Myers Squibb in FinanceAugust 2022. Dr. Hirmand also served as chief medical officer of Peloton Therapeutics from May 2017 until its acquisition by Merck & Co., Inc. in November 2019. Before that, Dr. Hirmand served in various roles at Medivation, Inc., a publicly traded biotechnology company, from 2007 to 2017, including most recently as its chief medical officer, through its acquisition by Pfizer Inc. Prior to that, Dr. Hirmand held clinical development roles of increasing responsibility at Nuvelo, Inc. (now ARCA Biopharma), SuperGen, Inc. (now Astex Pharmaceuticals, Inc.), Tularik, Inc. (now part of Amgen), and AccountingTheravance Biopharma, Inc. Dr. Hirmand received his M.D. from the University of Massachusetts, Amherst.Harvard Medical School and his B.A. in Biological Sciences and Economics from Cornell University. We believe Mr. PrelackDr. Hirmand is qualified to serve as a director based on his extensive leadership experience in the life sciences industry experience and service on multiple company boards.Chau Khuong has served on Aerpio’s boardmore than 20 years of directors since April 2014. Since 2003, Mr. Khuong has been a Private Equity Partner at OrbiMed Advisors. He is currently on the boardsbiotechnology clinical development experience.There are no material legal proceedings to which any of Synlogic, Cerapedics, ReViral Ltd., NextCure, Graybug Vision, and Inspire Medical Systems. Mr. Khuong holds a B.S. degree in Molecular, Cellular and Developmental Biology and a Master’s in Public Health from Yale University. We believe that Mr. Khuong is qualified to serve as a director based on his industry experience and service on multiple company boards.Pravin U. Dugel, M.D. has served as a member of Aerpio’s board ofour directors since March 2017. Since 1994, Dr. Dugel has served as the Managing Partner of Retinal Consultants of Arizona and is a Founding Memberparty adverse to us or any of the Spectra Eye Institute. He isour subsidiaries or in which any such person has a Clinical Professor at the USC Roski Eye Institute, Keck Schoolmaterial interest adverse to us or our subsidiary.9EXECUTIVE OFFICERSOur executive officers as of Medicine at the University of Southern California. Dr. Dugel serves on the Advisory Board of Acucela, Inc.April 25, 2023 and as a member of the Scientific Advisory Board at MacuSight, Inc., Alcon Surgical, Genentech and Novartis. He also serves as a Member of the Medical Advisory Board at TrueVision Systems, Inc. and a Member of the Clinical Advisory Board at Opthea Limited. Dr. Dugel received his M.D. from UCLA School of Medicine and his BA from Columbia University. We believe that Dr. Dugel is qualified to serve as a director based on his industry experience and service on multiple boards.Cheryl L. Cohen is being nominated to serve on Aerpio’s board of directors by the Nominating and Corporate Governance Committee. Ms. Cohen currently serves as president of CLC Consulting, a pharmaceutical and biotechnology consulting firm specializing in new product start-up and commercialization, which she incorporated in 2008. From 2011 to 2014, Ms. Cohen served as Chief Commercial Officer of Medivation, Inc., where she established and led the company's commercial organization and was responsible for the U.S. launch of Xtandi® (enzalutamide) for metastatic castration-resistant prostate cancer. Medivation was acquired by Pfizer Inc. for $14 billion in 2016. Ms. Cohen held leadership roles for over a decade at Johnson & Johnson, including as vice president, strategic commercial group, Health Care Systems, Inc., responsible for the negotiations of Johnson & Johnson's portfolio of products to ensure access and preferred positioning, and as vice president, rheumatology franchise, Centocor, Inc., where she had direct responsibility for the $1+ billion per year Remicade U.S. rheumatoid arthritis business. Ms. Cohen began her career at Solvay Pharmaceuticals in a variety of sales positions. Ms. Cohen currently serves on the boards of directors of Novus Therapeutics, a publicly traded company, and Vital Therapies, Inc., a public company. Ms. Cohen received her B.A. from Saint Joseph College. We believe Ms. Cohen is qualified to serve on our board of directors due to her industry experience and service on multiple boards.
their biographical information are set forth below:Executive OfficersNameAgePosition(s)Stephen Hoffman64Position(s) Neil Desai, Ph.D. 58 Executive Chairman Scott Giacobello 52 Interim President and Chief Executive Officer and DirectorMichael Rogers58Joseph Gardner62President and Founder and former Chief Executive Officer and DirectorSteve Pakola49Kevin Peters61Chief Scientific OfficerDhaval Desai41Chief Strategy OfficerStephen Hoffman, M.D., Ph.D.Neil Desai, Ph.D. Please see the biographical information provided above in the section entitled “Continuing Directors.”Scott Giacobello has served as Aerpio’s Chief Executive Officer since December 2017. From February 2014 until joining Aerpio, Dr. Hoffman was a Senior Advisor at PDL BioPharma, an investment firm that manages a portfolio of investments in companies, products, royalty agreements and debt facilities in the biotech, pharmaceutical and medical device industries. Prior to that he served as a Managing Director at Skyline Ventures, a venture capital firm, from 2007 to 2014 and was general partner at TVM Capital from 2003 to 2007. Prior to TVM, he served as President,our interim Chief Executive Officer and President since March 2023 and has served as our Chief Financial Officer since November 2021. Prior to joining the Company, Mr. Giacobello served as the Chief Financial Officer of GW Pharmaceuticals plc, a Director of Allos Therapeuticsglobal pharmaceuticals company, from 1994 to 2002, where he remained as ChairmanMarch 2017 until its acquisition by SpectrumJazz Pharmaceuticals Inc.plc in 2012. Dr. HoffmanMay 2021. Prior to joining GW Pharmaceuticals, Mr. Giacobello served as Chief Financial Officer of Chase Pharmaceuticals Corporation, a clinical stage biopharmaceutical company focused on the development and commercialization of improved treatments for neurodegenerative disorders, until it was acquired by Allergan plc (now a wholly owned subsidiary of AbbVie Inc.) in 2016. From 2008 through 2015, Mr. Giacobello held senior level finance positions at Allergan including Vice President of Finance for Global Research & Development, Vice President of Corporate Finance and Vice President of Internal Audit & Compliance. Mr. Giacobello’s previous experience includes financial positions at the Black & Decker Corporation and Ernst & Young, LLP. Mr. Giacobello currently serves on the board of directors of Dicerna Pharmaceuticals, Inc., AcelRx Pharmaceuticals, Inc., Bicycle Therapeutics Ltd., and Palleon Pharmaceuticals, Inc. Dr. Hoffman completed a fellowship in clinical oncology and a residency and fellowship in dermatology from 1990 to 1994, both at the University of Colorado, andprivately-held company Autobahn Therapeutics. Mr. Giacobello holds a Ph.D.bachelor’s degree in chemistry from Northwestern University and an M.D.business administration from the University of Colorado School of Medicine. HeNotre Dame and is also board-certified in Dermatology. We believe that Dr. Hoffman is qualified to servea Certified Public Accountant.Loretta Itri, M.D., has served as our Chief Medical Officer since October 2021. She was most recently the Chief Medical Officer at Immunomedics, Inc., a biotechnology company (now a subsidiary of Gilead Sciences, Inc.), from February 2020 to March 2021, and provided consulting services for Immunomedics, Inc. from May 2019 to February 2020. Before that, she served as Executive Vice President of Global Health Sciences & Regulatory Affairs at The Medicines Company from January 2013 to May 2019, where she oversaw the development and regulatory approve of a variety of products, including the early development of inclisiran, and other cardiovascular drugs and antibiotics. Previously, she served as President of Pharmaceutical Development and Chief Medical Officer at Genta, Inc., a biopharmaceutical company, as Senior Vice President of Medical and on our boardRegulatory Affairs at Johnson & Johnson’s Pharmaceutical Research Institute, and as Senior Vice President of directors based on his industry experienceClinical Affairs and service on multiple boards.Joseph Gardner, Ph.D.Chief Medical Officer for Ortho Biotech Inc. Dr. Itri began her career at Hoffmann-La Roche, as Assistant Vice President of Clinical Development in immunology and oncology. Dr. Itri received her M.D. from New York Medical College, completed her medical residency at SUNY-Stony Brook, and her fellowship in medical oncology at Memorial Sloan-Kettering Cancer Center where she was an adjunct attending physician for more than 15 years. Dr. Itri has served as Aerpio’s President and Founder since December 2011 and served as its Chief Executive Officer from December 2011 until December 2017. Dr. Gardner co-founded Akebia Therapeutics in 2007 and has been an Advisor for Akebia since 2013. He served as the Chief Executive Officer, President and as a member of the National Cancer Institute Board of Scientific Counselors and has published extensively on the development of therapeutic agents.There are no material legal proceedings to which any of our executive officers is a party adverse to us or any of our subsidiaries or in which any such person has a material interest adverse to us or our subsidiaries.10CORPORATE GOVERNANCEBoard Composition and StructureOur Amended and Restated Certificate of Incorporation ("Certificate of Incorporation") provides that the number of directors that constitutes the entire Board shall be fixed only by resolution of the Board acting pursuant to a resolution adopted by a majority of the whole board. Each director holds office until the expiration of the term for which they are elected and until such director successor is duly elected and qualified or until the earlier of his or her death, resignation or removal. Our Certificate of Incorporation provides that our directors may be removed from office at any time, but only for cause, and only by the affirmative vote of the holders of at least a majority of the voting power of the issued and outstanding capital stock of the Company entitled to vote in the election of directors. Newly created directorships resulting from any increase in the number of directors, created in accordance with our bylaws, and any vacancies on the Board resulting from death, resignation, disqualification, removal or other cause shall be filled only by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board, or by a sole remaining director, and not by the stockholders.Our Certificate of Incorporation provides that our Board is divided into three classes of directors, with the classes as nearly equal in size as practicable, designated Class I, Class II and Class III. Each of our directors previously identified serves in the class indicated. Subject to any earlier resignation or removal in accordance with the terms of our Certificate of Incorporation and our bylaws, if elected, our Class III directors will serve until the 2026 annual meeting of stockholders, our Class II directors will serve until the 2025 annual meeting of stockholders; and our Class I directors will serve until the 2024 annual meeting of stockholders. Any additional directorships resulting from an increase in the number of directors will be apportioned among the classes as to make all classes as nearly equal in number as practicable.Director Nomination ProcessOur Nominating and Corporate Governance Committee is responsible for reviewing with the Board, on an annual basis, the appropriate characteristics, skills and experience required for the Board as a whole and its individual members. In evaluating the suitability of individual candidates (both new candidates and current members), the Nominating and Corporate Governance Committee, in recommending candidates for election, and the Board, in approving (and, in the case of vacancies, appointing) such candidates, will take into account many factors, including the following:•character and professional integrity;•ethics and values;•experience in corporate management, such as serving as an officer or former officer of a publicly held company;•experience in the industries in which we compete;•experience as a director or executive officer of another publicly held company;•diversity with respect to education, race, ethnicity, gender, age and geography;•conflicts of interest; and•practical and mature business judgment.Our Board evaluates each individual in the context of the Board as a whole, with the objective of assembling a group that can best maximize the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience in these various areas.Director IndependenceOur common stock is listed on Nasdaq. As a company listed on Nasdaq, we are required under Nasdaq listing rules to maintain a board comprised of a majority of independent directors as determined affirmatively by our Board. Under Nasdaq listing rules, a director will only qualify as an independent director if, in the opinion of that listed company’s board of directors, the director does not have a relationship that would interfere with the exercise of Akebia until September 2013. Priorindependent judgment in carrying out the responsibilities of a director. In addition, the Nasdaq listing rules require that, subject to that, Dr. Gardner worked in pharmaceutical discovery and development at Procter & Gamble Pharmaceuticals for 23 years, including two years in P&G’s health care mergers and acquisition group and 10 years managing discovery licensing. He served as a Director of Chemistry and Intellectual Property Management of the Pharmaceutical Division of Procter & Gamble, and as a Director of Juvenile Diabetes Research Foundation International Inc. Dr. Gardner received his B.S. with honors in Biological Chemistry from Tulane University in 1977, earned his M.S. in Chemistry in 1980 from Utah State University and Ph.D. in 1983 in Medicinal Chemistry from University of Wisconsin. We believe that based on Dr. Gardner’s knowledgespecified exceptions, each member of our company, industryaudit, compensation and businessnominating and his service as our former Chief Executive Officer and President, Dr. Gardner is qualified to serve on our board of directors.Michael Rogers has served as Aerpio’s Chief Financial Officer since November 2017. From 2016 to 2017, Mr. Rogers served as a consultant to healthcare companies. Prior to that, Mr. Rogers wasgovernance committees be independent.Audit committee members must also satisfy the chief financial officer at Acorda Therapeutics, a biopharmaceutical company, from 2013 to 2016. Prior to Acorda Therapeutics, he was the Executive Vice President and chief financial officer of BG Medicine from 2009 to 2012. From 1999 to 2009, Mr. Rogers was the chief financial officer of Indevus Pharmaceuticals until the company’s sale to Endo Pharmaceuticals. He also served as chief financial officer at Advanced Health Corporation and Autoimmune. Prior to his roles as chief financial officer, Mr. Rogers was an investment banker at Lehman Brothers and PaineWebber, where he focused on life sciences companies. Mr. Rogers received his B.A. from Union College, and an M.B.A. from the Darden School of Business at the University of Virginia. He currently serves as Chairman of the Board of Directors of Keryx Biopharmaceuticals and as a member of the Board of Directors for pSivida Corp.Steve Pakola, M.D. has served as Aerpio’s Chief Medical Officer since October 2015. Since May 2012, Dr. Pakola has served as the Chief Medical Officer of Amakem NV and the Chief Medical Officer, Senior Vice President of Clinical Development and as Director at ThromboGenics NV from 2000 to 2012. Previously, Dr. Pakola served as an Associate Director of Cardiovascular Clinical Research at Boehringer-Ingelheim Pharmaceuticals, where heserved as Global Medical Lead on the Lipid-Lowering Development Programme, as well as USA Medical Lead for the Direct Thrombin Inhibitor Development Programme. From 1996 to 1998, Dr. Pakola served in senior-level clinical development positions at Quintiles Cardiovascular Therapeutics and Organon. Dr. Pakola received his B.A and his MD from the University of Pennsylvania.Kevin G. Peters, M.D. has served as Aerpio’s Chief Scientific Officer since November 2011. Dr. Peters guided the development of AKB-9778 while at Akebia Therapeutics, and continues to be in charge of scientific discovery and development for Aerpio. From 2006 to 2010 he served as Medical Director of Cardiovascular and Metabolic Disease in Global and Discovery Medicine at Bristol Myers Squibb and from 1998 to 2006 he served as head of Therapeutic Angiogenesis research at P&G Pharmaceuticals. He served as a Member of the Scientific Advisory Board of Akebia. Dr. Peters served as an Associate Professor of Medicine and Pharmacology in the Division of Cardiology at Duke University Medical Center. Dr. Peters received his M.D. from the University of Iowa and B.A. from Augustana College.Dhaval Desai has served as Aerpio’s Chief Strategy Officer since May 2018. Dr. Desai previously served as our Vice President, Medical Affairs from July 2014 to April 2018. From 2011 to 2014, Dr. Desai worked at ThromboGenics, Inc. where he was an integral member of the pre-launch team and led all market development efforts. At ThromboGenics, he also led the team that achieved FDA approval of ocriplasmin (Jetrea™) for the treatment of symptomatic VMA. Previously, Dr. Desai worked at Onyx Pharmaceuticals, where he was integral in the early development of sorafenib (Nexavar®) for thyroid cancer. Dr. Desai obtained his PharmD from and completed his postdoctoral fellowship at Rutgers University, and received his B.A. from Rutgers University in 2001.MergerOn March 15, 2017, our wholly-owned subsidiary, Aerpio Acquisition Corp., a corporation formed in the State of Delaware, or the Acquisition Sub, merged with and into Aerpio Therapeutics, Inc., (“Aerpio”) a corporation incorporated on November 17, 2011, under the laws of the State of Delaware. Pursuant to this transaction, or the Merger, Aerpio was the surviving corporation and became our wholly-owned subsidiary. We changed our name from Zeta Acquisition Corp II to Aerpio Pharmaceuticals, Inc. All the outstanding stock of Aerpio was converted into shares of our common stock.At the effective time of the Merger, the legal existence of Acquisition Sub ceased and each 2.3336572 shares of Aerpio common and preferred stock that was issued and outstanding immediately prior to the effective time of the Merger, including share based awards, whether vested or unvested issued under the Aerpio Therapeutics, Inc. 2011 Equity Incentive Plan (the “2011 Plan”), was automatically exchanged for one share of our common stock. In addition, immediately prior to the Merger, the outstanding amounts under certain senior secured convertible notes issued by Aerpio to its pre-Merger noteholders were converted into Aerpio common stock, which were converted in the Merger into shares of our common stock at the same ratio. We issued an aggregate of 18,000,000 shares of our common stock upon such exchange of the outstanding shares of Aerpio common stock. In addition, at the effective time of the Merger, we assumed Aerpio’s 2011 Equity Incentive Plan. At the effective time of the Merger, we assumed the outstanding options under the 2011 Plan and converted them into options to purchase 927,592 shares of our common stock. As a result of the Merger, we acquired the business of Aerpio and will continue the existing business operations of Aerpio as a public reporting company under the name Aerpio Pharmaceuticals, Inc. Immediately after the Merger, Aerpio was converted into a Delaware limited liability company (the “Conversion”).The Merger was treated as a recapitalization and reverse acquisition for financial reporting purposes. We are the legal acquirer of Aerpio in the transaction. However, Aerpio is considered the acquiring company for accounting purposes since (i) former Aerpio stockholders own in excess of 50% of the combined enterprise on a fully diluted basis immediately following the Merger and Offering, and (ii) all members of the Company’s executive management and Board of Directors are from Aerpio. In accordance with the “reverse merger” or “reverse acquisition” accounting treatment, the consolidated financial statements for the period ended December 31, 2017 include the accounts of the Company and its wholly owned subsidiary, Aerpio Therapeutics, LLC. The comparative historical financial statements for periods ended prior to the date of the Merger are the historical financial statements of Aerpio.The following discussion highlights Aerpio’s results of operations and the principal factors that have affected our financial condition as well as our liquidity and capital resources for the periods described, and provides information that management believes is relevant for an assessment and understanding of the consolidated balance sheets and the consolidated statements of operation and comprehensive loss presented herein. The following discussion and analysis are based on the Company’s consolidated financial statements contained in this Form 10-K, which we have prepared in accordance with United States generally accepted accounting principles. You should read the discussion and analysis together with such consolidated financial statements and the related notes thereto.Share CancellationFollowing the Merger and Conversion, and immediately prior to the closing of the Offering, an aggregate of 4,000,000 of the 5,000,000 shares of our common stock that were held by the pre-Merger stockholders of Zeta Acquisition Corp. II were surrendered for cancellation (the “Share Cancellation”).OfferingFollowing the Merger, the Conversion and the Share Cancellation, we sold to accredited investors $40.2 million of our shares of common stock, or 8,049,555 shares, at a price of $5.00 per share, (net proceeds of $37.2 million after deducting placement agent fees and expenses of the offering). In connection with the Offering, we issued warrants topurchase 317,562 shares of our common stock at $5.00 per share to the placement agents for the Offering. The warrants are exercisable for three years. The Offering closed on March 15, 2017.Our securities are not listed on a national securities exchange or on any inter-dealer quotation system which has a requirement that a majority of directors be independent. We evaluateadditional independence by the standards for director independencecriteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and Nasdaq Marketplace Rules. Under suchlisting rules applicable to audit committee members. Compensation committee members must also satisfy the additional independence criteria set forth in Rule 10C-1 under the Exchange Act and Nasdaq listing rules applicable to compensation committee members.11Our Board has undertaken a review of the independence of each of our board of directorsdirectors. Based on information provided by each director concerning his or her background, employment and affiliations, our Board has determined that all members of the board of directors, except Stephen HoffmanDr. Castelein, Dr. Aghazadeh, Dr. Dalal, Dr. Hehenberger, Dr. Hirmand, Mr. Maroun and Joseph Gardner, are independent directors. Stephen Hoffman and Joseph Gardner are not independent directors under these rules because they are executive officersMs. Reeve, representing seven of our eight directors, do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is an “independent director” as defined under the listing standards of Nasdaq. Dr. Desai is not considered an independent director because he is an executive officer of our company.In making such independence determination,these determinations, our board of directorsBoard considered and deemed immaterial the current and prior relationships that each non-employee director has with usour company, including the sale of products and/or services in the ordinary course of business between our company, on the one hand, and, on the other, companies or organizations at which some our directors or their immediate family members were officers or employees during fiscal year 2022, and all other facts and circumstances that our board of directorsBoard deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director.director, and the transactions involving them described in the section titled “Related Person Transactions.” In consideringeach case, the independence ofamount paid to or received from these companies or organizations in the directors listed above, our board of directors considered the association of our directors with the holders of more than 5% of our common stock. The composition and functioning of our board of directorscurrent year and each of our committees complies with allthe last three years was below the 5% of consolidated gross revenues, or $200,000, whichever is more, pursuant to the applicable requirements of the Nasdaq Stock Market and the rules and regulations of the SEC. rules.There are no family relationships among any of our directors, director nominees or executive officers.Stockholder RecommendationsStockholders may submit recommendations for director candidates to the Nominating and Corporate Governance Committee by sending the individual's name and qualifications in writing to our Secretary at Aadi Bioscience, Inc., 17383 Sunset Boulevard, Suite A250 Pacific Palisades, California 90272 in accordance with the bylaws of the Company, who will forward all recommendations to the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will evaluate any candidates recommended by stockholders against the same criteria and pursuant to the same policies and procedures applicable to the evaluation of candidates proposed by directors or management.Board Leadership Structure and Role of Board in Risk OversightBoard Leadership StructureWe have established a role of the chairman of the board, which is currently held by Caley Castelein, M.D., and we plan to keep this role separated from the role of Chief Executive Officer. We believe that separating these positions allows our Chief Executive Officer to focus on our day-to-day business, while allowing a chairman of the board to lead the Board in its fundamental role of providing advice to and independent oversight of management. Our Board recognizes the time, effort and energy that the Chief Executive Officer is required to devote to his position in the current business environment, as well as the commitment required to serve as our chairman, particularly as the Board’s oversight responsibilities continue to grow. Our bylaws and corporate governance guidelines require that our chairman of the board not be an employee or an executive officer of our company, and our Board believes that having separate positions is the appropriate leadership structure for us at this time and demonstrates our commitment to good corporate governance.Risk OversightRisk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including risks relating to our financial condition, development and commercialization activities, operations, strategic direction and intellectual property as more fully discussed in the section entitled “Risk Factors” located in annual and quarterly reports filed with the SEC, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Management is responsible for the day-to-day management of risks we face, while our Board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, our Board has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed.The role of the Board in overseeing the management of our risks is conducted primarily through committees of the Board, as disclosed in the descriptions of each of the committees below and in the charters of each of the committees. The full Board (or the appropriate board committee in the case of risks that are under the purview of a particular committee) discusses with management our major risk exposures, their potential impact on us, and the steps we take to manage them. When a board committee is responsible for evaluating and overseeing the management of a particular risk or risks, the chairman of the relevant committee reports on the discussion to the full Board during the committee reports portion of the next board meeting. This enables the Board and its committees to coordinate the risk oversight role, particularly with respect to risk interrelationships.12Board Meetings and AttendanceThe Board held eight meetings during 2022, and each of the incumbent directors of the board attended at least 75% of the aggregate of all meetings of the Board and all meetings of committees of our Board upon which they served (during the periods that they served) during 2022. The Board regularly holds executive sessions of the independent directors. Executive sessions do not include employee directors or directors who do not qualify as independent under SEC rules. Although we do not have a formal policy regarding attendance by members of our Board at the annual meeting of stockholders, members of our board are encouraged to attend. Each of our directors attended the 2022 Annual Meeting of Stockholders.Board CommitteesWe have established the following board committees: Audit Committee, Compensation Committee and a Nominating and Corporate Governance Committee. Each committee operates pursuant to a charter adopted by our Board. The composition and functioning of all committees comply with all applicable requirements of the Sarbanes-Oxley Act of 2002, SEC rules and regulations, and Nasdaq.The following table sets forth which directors currently serve on each committee of the Board.Audit Compensation Nominating and Corporate Governance Emma Reeve (Chair) Richard Maroun (Chair) Anupam Dalal, M.D. (Chair) Caley Castelein, M.D.* Anupam Dalal, M.D. Behzad Aghazadeh, Ph.D. Richard Maroun Caley Castelein, M.D. Karin Hehenberger, M.D., Ph.D. * In November 2022, Dr. Castelein replaced Dr. Hehenberger on the Audit Committee. Audit CommitteeCaley Castelein, Richard Maroun and Emma Reeve serve on the Audit Committee, which is chaired by Ms. Reeve. Our Board has determined that Caley Castelein, M.D., Richard Maroun and Emma Reeve are “independent” for Audit Committee purposes as that term is defined in the rules of the SEC and the applicable Nasdaq rules, and each has sufficient knowledge in financial and auditing matters to serve on the Audit Committee. Our Board has designated Emma Reeve as an “audit committee financial expert,” as defined under the applicable rules of the SEC. The Audit Committee’s responsibilities include:•appointing, compensating, retaining, evaluating overseeing, and assessing the independence of our independent registered public accounting firm; pre-approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;•reviewing the overall audit plan with our independent registered public accounting firm and members of management responsible for preparing our financial statements; reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us;•reviewing and discussing with management and the Company’s independent registered public accounting firm our internal controls over financial reporting;•adopting and overseeing procedures to address complaints received by the Company regarding accounting, internal accounting controls or auditing matters;•reviewing, approving and monitoring related party transactions involving directors or executive officers of the Company;•recommending based upon the Audit Committee’s review and discussions with management and our independent registered public accounting firm whether our audited financial statements shall be included in our Annual Report on Form 10-K;•monitoring the integrity of our financial statements and our compliance with legal, regulatory and ethical requirements as they relate to our financial statements and accounting matters;•setting hiring policies with regard to the hiring of employees or former employees of the Company’s independent registered public accounting firm and overseeing the compliance with such policies;13•reviewing and discussing with management and the Company’s independent registered public accounting firm guidelines and policies to identify, monitor, and address enterprise risks;•preparing the Audit Committee report required by SEC rules to be included in our annual proxy statement; and•reviewing quarterly earnings releases.The Audit Committee held five meetings during 2022. A copy of the Audit Committee Charter is available on the Company’s website at www.aadibio.com under the Investors & News section.Compensation CommitteeCaley Castelein, Anupam Dalal and Richard Maroun serve on the Compensation Committee, which is chaired by Mr. Maroun. Our Board has determined that each member of the Compensation Committee is “independent” as defined in the applicable Nasdaq rules. The Compensation Committee’s responsibilities include:•annually reviewing and recommending to the independent directors on the Board the corporate goals and objectives relevant to the compensation of our Chief Executive Officer (or Principal Executive Officer);•evaluating the performance of our Chief Executive Officer (or Principal Executive Officer) in light of such corporate goals and objectives and based on such evaluation recommending to the independent directors on the Board the CEO’s: (i) base salary, (ii) incentive bonus, including the specific goals and amount, (iii) equity compensation (iv) any employment agreement, severance arrangement, transition or consulting agreement, retirement agreement or change of control protections and (v) any other benefits, compensation or similar arrangement, if any (including without limitation perquisites and any other form of compensation such as a signing bonus or payment of relocation costs), including any amendments to or termination of any of the foregoing;•reviewing and approving or recommending to the independent directors on the Board (i) base salary, (ii) incentive bonus, including the specific goals and amount, (iii) equity compensation, (iv) any employment agreement, severance arrangement, transition or consulting agreement, retirement agreement or change of control protections and (v) any other benefits, compensation or similar arrangements, if any (including, without limitation, perquisites and any other form of compensation such as a signing bonus or payment of relocation costs), including any amendments to or terminations of any of the foregoing, of our other executive officers;•reviewing and establishing our overall management compensation, philosophy and policy;•reviewing, approving and administering, including the termination of, the Company’s employee benefit and equity incentive plans;•evaluating and assessing potential and current compensation advisors in accordance with the independence standards identified in the applicable Nasdaq rules;•reviewing and approving our policies and procedures for the grant of equity-based awards;•overseeing management’s engagement with stockholders and proxy advisory firms on executive compensation matters;•reviewing and recommending to the independent directors on the Board the compensation of our directors;•preparing the Compensation Committee report required by SEC rules, if and when required, to be included in our annual proxy statement; and•reviewing and approving the retention, termination or compensation of any consulting firm or outside advisor to assist in the evaluation of compensation matters.The Compensation Committee held five meetings during 2022. A copy of the Compensation Committee Charter is available on the Company’s website at www.aadibio.com under the Investors & News section.Nominating and Corporate Governance CommitteeBehzad Aghazadeh, Anupam Dalal and Karin Hehenberger currently serve on the Nominating and Corporate Governance Committee, which is chaired by Dr. Dalal. Our Board has determined that each member of the Nominating and Corporate14Governance Committee is “independent” as defined in the applicable Nasdaq rules. The Nominating and Corporate Governance Committee’s responsibilities include:•reviewing, assessing and recommending to the Board criteria for board and committee membership;•establishing procedures for identifying and evaluating board of director candidates, including nominees recommended by stockholders;•reviewing the composition of the Board to ensure that it is composed of members containing the appropriate skills and expertise to advise us;•identifying individuals qualified to become members of the Board based on the established criteria;•overseeing the Company’s director orientation and continuing education, including making recommendations for continuing education of Board members and evaluating the participation of members of the Board in accordance with applicable listing standards;•recommending to the Board the persons to be nominated for election as directors and to each of the Board’s committees;•administering policies and procedures for various constituencies that are involved with the Company to communicate with the non-management Board members;•developing and recommending to the Board corporate governance guidelines and reviewing the corporate governance guidelines and their application;•developing, approving, reviewing, and monitoring compliance with the Company’s Code of Business Conduct and EthicsWe have adopted a code and considering potential conflicts of business conductinterest of Board members and ethics that applies to allother corporate officers; and•overseeing the evaluation of our employees, officersBoard and directors, including those officers responsible for financial reporting. Our codemanagement.The Nominating and Corporate Governance Committee held two meetings during 2022. A copy of business conductthe Nominating and ethicsCorporate Governance Committee Charter is available on ourthe Company’s website which is located at www.aerpio.com. We intendwww.aadibio.com under the Investors & News section.Our Board may from time to disclose any amendments to the code, or any waivers of its requirements, on our website, or in a current report on Form 8-K as may be required by law.Corporate Governance GuidelinesThe Board has adopted corporate governance guidelines to assist and guide its members in the exercise of its responsibilities. These guidelines should be interpreted in accordance with any requirements imposed by applicable federal or state law or regulation and our certificateCertificate of incorporationIncorporation and bylaws. Our corporate governance guidelines are available on our website at http://www.aerpio.com.www.aadibio.com under the Investors & News Section. Although these corporate governance guidelines have been approved by the Board, it is expected that these guidelines will evolve over time as customary practice and legal requirements change. In particular, those guidelines that encompass legal, regulatory or exchange requirements as they currently exist will be deemed to be modified as and to the extent that such legal, regulatory or exchange requirements are modified. In addition, the guidelines may also be amended by the Board at any time as it deems appropriate.Our boardCode of directors has established an Audit Committee,Business Conduct and EthicsWe have adopted a Compensation Committeecode of business conduct and a Nominating and Corporate Governance Committee, each of which operates pursuantethics that applies to a charter adopted by our board of directors. The composition and functioning of all of our committees comply with all applicable requirements of the Sarbanes-Oxley Act of 2002employees, officers and SEC rules and regulations, and we intend to comply withdirectors, including those of the Nasdaq Stock Market. The Board held ten meetings during 2017, and each of the incumbent directors of the Board attended at least 75% of the aggregate of all meetings of the Board and all meetings of committees of our Board upon which they served (during the periods that they served) during 2017. The Board of Directors regularly holds executive sessions of the independent directors. Executive sessions do not include employee directors or directors who do not qualify as independent under SEC rules. Members of our Board are encouraged to attend annual meetings of our stockholders.Steven Prelack, Caley Castelein and Pravin Dugel serve on the Audit Committee, which is chaired by Steven Prelack. Our board of directors has determined that Steven Prelack, Caley Castelein and Pravin Dugel are “independent” for Audit Committee purposes as that term is defined in the rules of the SEC and the applicable Nasdaq rules, and each has sufficient knowledge in financial and auditing matters to serve on the Audit Committee. Our board of directors has designated each of Steven Prelack and Pravin Dugel as an “Audit Committee financial expert,” as defined under the applicable rules of the SEC. The Audit Committee’s responsibilities include:appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;pre-approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;reviewing the overall audit plan with our independent registered public accounting firm and members of managementofficers responsible for preparing our financial statements;reviewingreporting. Our code of business conduct and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us;coordinating the oversight and reviewing the adequacy of our internal control over financial reporting;establishing policies and procedures for the receipt and retention of accounting-related complaints and concerns;recommending based upon the Audit Committee’s review and discussions with management and our independent registered public accounting firm whether our audited financial statements shall be included in our Annual Report on Form 10-K;monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to our financial statements and accounting matters;preparing the Audit Committee report required by SEC rules to be included in our annual proxy statement;reviewing all related person transactions for potential conflict of interest situations and making recommendations to our board of directors regarding all such transactions; andreviewing quarterly earnings releases.The Audit Committee held three meetings during 2017. A copy of the Audit Committee Charterethics is available on our website, which is located at www.aerpio.comsection.Compensation CommitteePrior& News Section. We intend to disclose any amendments to the Annual Meeting, Anupam Dalalcode, or any waivers of its requirements, on our website or in a current report on Form 8-K as may be required by law.Anti-Hedging and Paul Weiss serve onAnti-Pledging PoliciesUnder our insider trading policy, our directors, officers, employees, consultants, contractors, or advisors are prohibited from, directly or indirectly, among other things, (1) engaging in short sales, (2) trading in publicly-traded options, such as puts and calls, and other derivative securities with respect to our securities (other than stock options, restricted stock units and other compensatory awards issued to such individuals by us), (3) purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds), or otherwise engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of equity securities granted to them by us as part15of their compensation or held, directly or indirectly, by them, (4) pledging any of our securities as collateral for any loans or as part of any other pledging transaction, and (5) holding our securities in a margin account.16EXECUTIVE COMPENSATIONProcesses and Procedures for Compensation Committee, which is chaired by Anupam Dalal. At the time of the Annual Meeting, since Paul Weiss was not nominated for re-election by our Nominating and Corporate Governance Committee, he will be stepping down from the Compensation Committee. Subject to her election at the Annual Meeting, Cheryl Cohen will be appointed to the Compensation Committee. DecisionsOur board of directors has determined that each member of the Compensation Committee is “independent” as defined in the applicable Nasdaq rules. The Compensation Committee’s responsibilities include:annually reviewing and recommending to the independent directors on the board of directors the corporate goals and objectives relevant toresponsible for the compensation ofprograms for our Chief Executive Officer;makes recommendations to our Compensation Committee regarding short- and long-term compensation for all executive officers (other than himself) based on our results, an individual executive officer’s contribution toward these results and individual goal achievement. Our Compensation Committee then reviews the recommendations and other market data. Our Compensation Committee makes decisions as to total compensation for each executive officer, although it may instead, in its discretion, make recommendations to our Board regarding executive compensation.evaluating the performance ofexecutive officers and reports to our Board on its discussions, decisions and other actions. Typically, our Chief Executive Officer makes recommendations to our Compensation Committee, often attends committee meetings and is involved in lightthe determination of such corporate goals and objectives and based on such evaluation: (i) recommendingcompensation for the respective executive officers who report to the independent directors on the board of directors the cash compensation ofhim, except that our Chief Executive Officer and (ii) reviewing and recommendingdoes not make recommendations as to his own compensation or attend the independent directors onportions of the board of directors regarding grants and awards to ourmeeting relating thereto. Our Chief Executive Officer under equity-based plans;reviewing and establishing our overall management compensation, philosophy and policy;overseeing and administering our compensation programs and similar plans;evaluating and assessing potential and current compensation advisors in accordance with the independence standards identified in the applicable Nasdaq rules;reviewing and approving our policies and procedures for the grant of equity-based awards;reviewing and recommending to the independent directors on the board of directors the compensation of our directors;preparing the Compensation Committee report required by SEC rules, if and when required, to be included in our annual proxy statement; andreviewing and approving the retention, termination or compensation of any consulting firm or outside advisor to assist in the evaluation of compensation matters.The Compensation Committee held two meetings during 2017. A copy of the Compensation Committee Charter is available on our website at www.aerpio.com under the Investors section.Compensation Consultant. related policies. As a part of determining compensation for our named executive officers, the Compensation Committee has engaged Radford, a business unit of Aon plc, as an independent compensation consultant. Radford provides analysis and recommendations to the Compensation Committee regarding:When requested, Radford consultants attend meetings of the Compensation Committee, including executive sessions in which executive compensation issues are discussed. Radford reports to the Compensation Committee and not to management, although Radford meets with management for purposes of gathering information for its analyses and recommendations.In determining to engage Radford, the Compensation Committee considered the independence of Radford taking into consideration relevant factors, including the absence of other services provided to us by Radford, the amount of fees we paid to Radford as a percentage of Radford’s total revenue, the policies and procedures of Radford that are designed to prevent conflicts of interest, any business or personal relationship of the individual compensation advisors employed by Radford with any of our executive officers, any business or personal relationship the individual compensation advisors employed by Radford have with any member of the Compensation Committee, and any shares of our stock owned by Radford or the individual compensation advisors employed by Radford. The Compensation Committee has determined, based on its analysis in light of all relevant factors, including the factors listed above, that the work of Radford and the individual compensation advisors employed by Radford as compensation consultants to the Compensation Committee has not created any conflicts of interest and that Radford is independent pursuant to the independence standards set forth in the Nasdaq Stock Market listing standards promulgated pursuant to Section 10C of the Exchange Act.Nominating and Corporate Governance CommitteeChau Khuong and Muneer Satter serve on the Nominating and Corporate Governance Committee, which is chaired by Chau Khuong. Our board of directors has determined that each member of the Nominating and Corporate Governance Committee is “independent” as defined in the applicable Nasdaq rules. The Nominating and Corporate Governance Committee’s responsibilities include:developing and recommending to the board of directors criteria for board and committee membership;establishing procedures for identifying and evaluating board of director candidates, including nominees recommended by stockholders;considering director candidates recommended by stockholders holding at least three percent (3%) of the Company’s common stock continuously for at least twenty four (24) months prior to the date of the submission of the recommendation in the same manner as candidates recommended to the committee from other sources;reviewing the composition of the board of directors to ensure that it is composed of members containing the appropriate skills and expertise to advise us;identifying individuals qualified to become members of the board of directors;recommending to the board of directors the persons to be nominated for election as directors and to each of the board’s committees;developing and recommending to the board of directors a code of business conduct and ethics and a set of corporate governance guidelines; andoverseeing the evaluation of our board of directors and management.Our board of directors may from time to time establish other committees.The Nominating and Corporate Governance Committee held one meeting during 2017. A copy of the Nominating and Corporate Governance Committee Charter is available on our website at www.aerpio.com under the Investors section.Director NominationsOur Nominating and Corporate Governance Committee is responsible for reviewing with the board of directors, on an annual basis, the appropriate characteristics, skills and experience required for the board of directors as a whole and its individual members. In evaluating the suitability of individual candidates (both new candidates and current members), the Nominating and Corporate Governance Committee, in recommending candidates for election, and the board of directors, in approving (and, in the case of vacancies, appointing) such candidates, will take into account many factors, including the following:personal and professional integrity;ethics and values;experience in corporate management, such as serving as an officer or former officer of a publicly held company;experience in the industries in which we compete;experience as a director or executive officer of another publicly held company;diversity of expertise and experience in substantive matters pertaining to our business relative to other board members;conflicts of interest; andpractical and mature business judgment.Our board of directors evaluates each individual in the context of the board of directors as a whole, with the objective of assembling a group that can best maximize the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience in these various areas.Stockholder RecommendationsStockholders may submit recommendations for director candidates to the Nominating and Corporate Governance Committee by sending the individual's name and qualifications in writing to our Secretary at Aerpio Pharmaceuticals, Inc., 9987 Carver Road, Suite 420, Cincinnati, Ohio 45242 in accordance with the bylaws of the Company, who will forward all recommendations to the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will evaluate any candidates recommended by stockholders against the same criteria and pursuant to the same policies and procedures applicable to the evaluation of candidates proposed by directors or management.The Board provides to every securityholder the ability to communicate with the Board, as a whole, and with individual directors on the Board through an established process for securityholder communication. For a securityholder communication directed to the Board of Directors as a whole, securityholders may send such communication to the attention of the Company's Chair of the Board via U.S. Mail or Expedited Delivery Service to: Aerpio Pharmaceuticals, Inc., 9987 Carver Road, Suite 420, Cincinnati, Ohio 45242, Attn: Chair of the Board of Directors.For a securityholder communication directed to an individual director in his or her capacity as a member of the Board, securityholders may send such communication to the attention of the individual director via U.S. Mail or Expedited Delivery Service to: Aerpio Pharmaceuticals, Inc., 9987 Carver Road, Suite 420, Cincinnati, Ohio 45242, Attn: [Name of Individual Director].We will forward by U.S. Mail any such securityholder communication to each director, and the Chairman of the Board in his or her capacity as a representative of the Board, to whom such securityholder communication is addressed to the address specified by each such director and the Chair of the Board, unless there are safety or security concerns that mitigate against further transmission.Communications from an officer or director of the Company and proposals submitted by securityholders to be included in the Company’s annual proxy statement, pursuant to Rule 14a-8of the Securities Exchange Act of 1934, as amended (and related communications) will(the “Exchange Act”).Risk Assessment. Our Compensation Committee has reviewed our incentive compensation programs and discussed the concept of risk as it relates to our compensation program. We believe our approach to goal setting, setting of targets with payouts at multiple levels of performance, and evaluation of performance results assist in mitigating excessive or inappropriate risk-taking. Key features of our programs reflect sound risk management practices. We believe we have allocated our compensation among base salary and short- and long-term compensation target opportunities in such a way as to not be viewed asencourage excessive risk-taking. Further, with respect to our incentive compensation programs, compensation is generally linked to both corporate performance and individual performance. Our corporate targets are applicable to our executives and employees alike, regardless of business unit. We believe this encourages consistent behavior across the organization, rather than establishing different performance metrics depending on a securityholder communication. Communications from an employeeperson's position in the company or agenttheir business unit. Finally, we believe that the multi-year vesting of our equity awards properly account for the time horizon of risk.17OverviewOur executive compensation program reflects our growth and corporate goals. To date, the compensation of the Company will be viewednamed executive officers has consisted of a combination of base salary, annual cash bonus, and long-term equity incentive compensation in the form of restricted stock and stock options, and other employee benefits generally available to our employees. The named executive officers are also entitled to compensation and benefits upon certain terminations of employment pursuant to their executive employment agreements as securityholder communication only if such communications are made solely in such employee’s or agent’s capacitydescribed below.The named executive officers for the year ended December 31, 2022 were as a securityholder.Role of Board in Risk Oversight ProcessWe have established a role of the chairman of the board, who will be Muneer Satterfollows:•Neil Desai, Ph.D., our President and we plan to keep this role separated from the role of Chief Executive Officer. We believe that separating these positions allows our Chief Executive Officer from August 2021 to focus onDecember 31, 2022 and our day-to-day business, while allowing a chairman of the boardExecutive Chairman since January 1, 2023;•Brendan Delaney, our Chief Operating Officer from September 2021 to lead the board of directors in its fundamental role of providing advice toDecember 31, 2022 and independent oversight of management. Our board of directors recognizes the time, effortour President and energy that the Chief Executive Officer is requiredfrom January 1, 2023 until his resignation from such positions as of March 14, 2023; and•Loretta Itri, M.D., our Chief Medical Officer since October 2021.Summary Compensation TableThe following table sets forth information regarding compensation awarded to, devoteearned by or paid to his positioneach of the named executive officers for the years ending December 31, 2022 and 2021.Name and Principal Position Year Salary ($) OptionAwards($)(1)Bonus($)Non-EquityIncentiveCompensation($)(2)All OtherCompensation($)Total ($) Neil Desai (3)2022 618,120 1,934,692 — 500,000 — 3,052,812 Executive Chairman 2021 465,791 2,511,538 394,000 (6) 315,000 53,939 (7) 3,740,262 Brendan Delaney (4) 2022 494,520 769,838 — 270,000 — 1,534,358 Former President and Chief Executive Officer 2021 136,615 5,491,827 — 81,810 — 5,710,252 Loretta Itri, M.D. (5) 2022 507,620 849,346 — 275,400 22,830 (8) 1,655,196 Chief Medical Officer 2021 96,794 4,967,250 — — — 5,064,044 (1)The amounts reported in the current business environment, as well asOption Awards column represent the commitment required to serve as our chairman, particularly as the board of directors’ oversight responsibilities continue to grow. Our amended and restated by-laws and corporate governance guidelines require that our chairmangrant date fair value of the boardstock options granted to the named executive officers as of the grant date as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, not be an employee or an executive officerincluding any estimates of our company, and our boardforfeitures. The assumptions used in calculating the grant date fair value of directors believes that having separate positions is the appropriate leadership structure for us at this time and demonstrates our commitment to good corporate governance.Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including risks relatingstock options reported in the Option Awards column are set forth in Note 13 to our financial condition, development and commercializationactivities, operations, strategic direction and intellectual property as more fully discussed in the section entitled “Risk Factors” locatedstatements included in our Annual Report on Form 10-K for the years ended December 31, 2022 and 2021. Note that the amounts reported in this column reflect the accounting cost for these stock options, and do not correspond to the actual economic value that may be received by the named executive officers from the options.(2)Amount represents cash bonus earned for performance in 2022 and 2021 based upon achievement of corporate performance goals. For additional information regarding our 2022 Cash Bonus Plan, please see the section below titled “—2022 Cash Bonus Plan."(3)Dr. Desai served as the Company’s President and Chief Executive Officer until January 1, 2023, at which time he was appointed as the Company’s Executive Chairman.(4)Mr. Delaney joined the Company in September 2021 as its Chief Operating Officer.He became the Company’s Chief Executive Officer and President on January 1, 2023 and resigned from such positions effective as of March 14, 2023.(5)Dr. Itri joined the Company in October 2021 as its Chief Medical Officer.(6)Amount includes a discretionary bonus paid in 2022 connection with the Merger.(7)Amount includes a cash payout for accrued vacation paid when the Company changed its paid time-off policy.(8)Amount includes reimbursement for monthly housing expenses.18Outstanding Equity Awards at December 31, 2022The following table sets forth information regarding outstanding equity awards for each of the named executive officers as of December 31, 2022Option Awards Name and Principal Position GrantDate (1)Number ofSecuritiesUnderlyingUnexercisedOptions (#)ExercisableNumber ofSecuritiesUnderlyingUnexercisedOptions (#)UnexercisableOptionExercisePrice ($)OptionExpirationDateNeil Desai 4/1/2022 — 153,300 17.24 4/1/2032 Executive Chairman 9/8/2021 39,062 85,938 27.67 9/8/2031 3/13/2020 (2) 3,965 3,965 3.41 3/13/2030 1/31/2018 31,720 — 2.21 1/31/2028 Brendan Delaney 4/1/2022 — 61,000 17.24 4/1/2032 Former President and Chief Executive Officer 9/20/2021 81,250 178,750 29.09 9/20/2031 Loretta Itri, M.D. 4/1/2022 — 67,300 17.24 4/1/2032 Chief Medical Officer 10/21/2021 53,958 131,042 26.85 10/21/2031 (1)Unless otherwise noted, each option vests 25% on the first anniversary of the grant date, then vests in 36 equal monthly installments thereafter, such that the option is vested on the fourth anniversary of the grant date, subject to the holder continuing to provide services to the Company through each applicable vesting date.(2)25% of the shares subject to the option vest on each of the four annual anniversary dates of the grant date, subject to the holder continuing to provide services to the Company through each applicable vesting date.Employment AgreementsWe have entered into employment agreements with each of our named executive officers and our other executive officers. Each employment agreement provides for “at will” employment, meaning that either we or the officer may terminate the employment relationship at any time without cause. The material terms of the employment agreements with our 2022 named executive officers are described below.Executive Employment Agreements with Neil Desai, Ph.D.Dr. Desai entered into an amended and restated executive employment agreement with us in August 2021 (the “Prior Desai Employment Agreement”). The Prior Desai Employment Agreement provided for Dr. Desai’s former position as chief executive officer of Aadi, an initial annual base salary equal to $600,000, eligibility for an annual bonus of up to 60% of annual base salary, eligibility to receive equity awards under the Company’s incentive plans or other arrangements, subject to the discretion of the Board or its authorized committee, and entitlement to participate in benefit plans that were generally available to Aadi’s executive employees. Pursuant to the Prior Desai Employment Agreement, in the event that Dr. Desai’s employment was terminated by Aadi without Cause (as defined in the Prior Desai Employment Agreement) or by Dr. Desai for Good Reason (as defined in the Prior Desai Employment Agreement) in the period commencing 3 months prior to and ending 12 months after a Change in Control (as defined in the Prior Desai Employment Agreement), then subject to Dr. Desai’s execution and non-revocation of a general release and separation agreement in favor of Aadi and its affiliates, (i) Aadi would provide Dr. Desai with a lump sum payment equal to 150% of the sum of his annual base salary and his target bonus for the fiscal year in which the termination occurred, (ii) Dr. Desai would be eligible for Company-paid COBRA coverage for a period of 18 months from the date of termination, and (iii) 100% of his unvested equity awards outstanding as of such termination would become vested. Pursuant to the Prior Desai Employment Agreement, in the event that Dr. Desai’s employment was terminated by Aadi without Cause or by Dr. Desai for Good Reason other than within the period described above, (i) Aadi would provide Dr. Desai with salary continuation payments equal to his then applicable base salary for 12 months following his termination of employment, (ii) an amount equal to the sum of all performance bonuses paid to Dr. Desai for Aadi’s fiscal year immediately preceding the fiscal year in which his termination of employment occurred, paid in equal installments over 12 months, (iii) Company-paid COBRA coverage for a period of up to 18 months, and (iv) in the event such termination occurred on or prior to August 26, 2022, 100% of his unvested equity awards outstanding as of such termination would become vested.19In connection with Dr. Desai’s appointment to Executive Chairman, Dr. Desai entered into an amended and restated executive employment agreement with us in November 2022, which became effective as of January 1, 2023 (the “Desai Employment Agreement”). Dr. Desai’s employment under the Desai Employment Agreement is at will and may be terminated at any time by us or him. The Desai Employment Agreement provides for Dr. Desai’s position as executive chairman of Aadi, an initial annual base salary equal to $624,000, eligibility for a discretionary annual bonus of up to 60% of annual base salary, eligibility to receive equity awards under the Company’s incentive plans or other arrangements, subject to the discretion of the Board or its authorized committee, and entitlement to participate in benefit plans that are generally available to Aadi’s executive employeesPursuant to the Desai Employment Agreement and in connection with his appointment to Executive Chairman, the Compensation Committee approved a grant of an option (the “Desai Option”) to purchase 150,000 shares of the Company's common stock under the 2021 Plan, effective as of January 1, 2023. The Desai Option has an exercise price equal to the closing price of the Company’s common stock in trading on Nasdaq on January 3, 2023. The shares of common stock subject to the Desai Option will vest as to 25% on January 1, 2024, and 1/48th of the total shares of common stock subject to the Desai Option will vest on the 1st of each month thereafter, so that the Desai Option will be fully vested on the four year anniversary of January 1, 2023, in each case subject to Dr. Desai continuing to be a Service Provider (as defined in the 2021 Plan) through each applicable vesting date.Pursuant to the Desai Employment Agreement, in the event that outside of the Change of Control Period (as defined in the Desai Employment Agreement), if Dr. Desai’s employment is terminated by Aadi other than for Cause (as defined in the Desai Employment Agreement), death or Disability (as defined in the Desai Employment Agreement) or Dr. Desai resigns for Good Reason (as defined in the Desai Employment Agreement), Dr. Desai will be entitled to receive: (i) continuing payments of severance pay for a period of eighteen (18) months equal to an amount each month equal to the sum of (A)(x) one hundred and fifty percent (150%) of his base salary, as then in effect, plus (y) one hundred and fifty percent (150%) of the sum of all performance bonuses paid to Dr. Desai for Aadi’s fiscal year immediately preceding the fiscal year in which Dr. Desai’s termination of employment occurs, divided by (B) 18, (ii) if he elects continuation coverage pursuant to COBRA within the time period prescribed pursuant to COBRA for himself and his eligible dependents, then Aadi will reimburse Dr. Desai for the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to Dr. Desai’s termination) until the earlier of (A) a period of eighteen (18) months from the date of termination or (B) the date upon which Dr. Desai and/or Dr. Desai’s eligible dependents are no longer eligible for COBRA continuation coverage, (iii) Dr. Desai’s outstanding and unvested equity awards subject solely to service-based vesting will accelerate vesting as to the number of shares of Common Stock subject to such awards that would have otherwise vested had Dr. Desai continued to be employed by Aadi for an additional eighteen (18) months following termination of Dr. Desai’s employment, (iv) Dr. Desai’s outstanding stock option awards will remain exercisable until the earlier of (a) twelve (12) months following the date of Dr. Desai’s termination of employment or (b) the expiration of the term of such Aadi stock option award set forth in the applicable stock option agreement, and (v) Aadi will pay Dr. Desai (x) a pro rata annual bonus for the year in which such termination occurs based on actual performance (but treating all individual performance goals, if any, as achieved at target levels) (the “Desai Pro Rata Bonus”), and (y) any earned but unpaid annual bonus for a performance year that ended prior to the date of termination (the “Desai Prior Year Bonus”). If, within the Change of Control Period, Dr. Desai’s employment is terminated by Aadi other than for Cause, death or Disability or Dr. Desai resigns for Good Reason, Dr. Desai will be entitled to receive: (i) a lump sum payment equal to one hundred and fifty percent (150%) of the sum of: (A) his base salary, as then in effect, or if greater, at the level in effect immediately prior to the Change of Control, plus (B) his target bonus in effect for the fiscal year in which his termination of employment occurs, (ii) if he elects continuation coverage pursuant to COBRA within the time period prescribed pursuant to COBRA for himself and his eligible dependents, then Aadi will reimburse Dr. Desai for the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to Dr. Desai’s termination) until the earlier of (A) a period of eighteen (18) months from the date of termination or (B) the date upon which Dr. Desai and/or Dr. Desai’s eligible dependents are no longer eligible for COBRA continuation coverage, (iii) accelerated vesting as to one hundred percent of Dr. Desai’s then outstanding and unvested equity awards to acquire Aadi's common stock, (iv) Dr. Desai’s outstanding stock option awards will remain exercisable until the earlier of (a) twelve (12) months following the date of Dr. Desai’s termination of employment or (b) the expiration of the term of such Aadi stock option award set forth in the applicable stock option agreement, and (v) Aadi will pay Dr. Desai (x) the Desai Pro Rata Bonus and (y) any applicable Desai Prior Year Bonus. Payment of any severance payments to Dr. Desai pursuant to the Desai Employment Agreement is contingent on his execution and not revoking a separation agreement and release of claims in a form reasonably satisfactory to Aadi, and provided that such release becomes effective and irrevocable no later than 60 days following the termination date. In addition, Dr. Desai is subject to confidentiality and intellectual property assignment obligations.20Executive Employment Agreements with Brendan DelaneyMr. Delaney entered into an employment agreement with us in September 2021 (the “Prior Delaney Employment Agreement”). The Prior Delaney Employment Agreement provided an initial annual base salary of $480,000 and eligibility to receive an annual bonus of up to 45% of his annual base salary, as well as eligibility to participate in employee benefit plans generally available to other senior executives of the Company. The Prior Delaney Employment Agreement further provided that if Mr. Delaney’s employment was terminated by the Company without Cause (as defined in the Prior Delaney Employment Agreement) or Mr. Delaney resigned for Good Reason (as defined in the Prior Delaney Employment Agreement), he would have been entitled to receive: (i) base salary continuation for twelve months following termination, and (ii) if he elected COBRA coverage, up to twelve months of reimbursement of a portion of each COBRA premium payment equal to the portion the Company contributed to such health insurance premium cost as of the date of termination. In lieu of the severance payments and benefits set forth above, in the event Mr. Delaney’s employment was terminated by the Company without Cause or he resigned for Good Reason, in either case within 12 months following a Change in Control or three months prior to a Change in Control (as defined in the Prior Delaney Employment Agreement), he would have been entitled to receive: (i) a lump sum payment equal to 100% of the sum of: (A) his base salary, as then in effect, or if greater, at the level in effect immediately prior to the Change in Control, plus (B) his target bonus in effect for the fiscal year in which his termination of employment occurs, (ii) if he elects COBRA coverage, up to 12 months of reimbursement of a portion of each COBRA premium payment equal to the portion the Company contributed to such health insurance premium cost as of the date of termination, and (iii) full accelerated vesting of all then-outstanding and unvested equity awards to acquire the Company’s common stock. Payment of any severance payments to Mr. Delaney pursuant to the Prior Employment Agreement was contingent on his executing and not revoking a separation agreement and release of claims in a form reasonably satisfactory to the Company, and provided that such release became effective and irrevocable no later than 60 days following the termination date.In connection with Mr. Delaney’s appointment to president and chief executive officer, he entered into an amended and restated executive employment agreement with us in November 2022, which was effective as of January 1, 2023 (the “Delaney Employment Agreement”). Mr. Delaney subsequently resigned from Aadi in March 2023. Pursuant to the terms of the Delaney Employment Agreement, Mr. Delaney was entitled to receive an annual base salary of $624,000 and was eligible to receive an annual bonus of up to 60% of his annual base salary upon achievement of performance objectives to be determined by the Board or its authorized committee in its sole discretion, with reasonable input from Mr. Delaney. Mr. Delaney was eligible to participate in employee benefit plans generally available to other senior executives of the Company.Pursuant to the Delaney Employment Agreement and in connection with his appointment to president and chief executive officer, the Compensation Committee approved a grant of an option (the “Delaney Option”) to purchase 150,000 shares of the Company's common stock under the 2021 Plan, effective as of January 1, 2023. As a result of his resignation in March 2023, Mr. Delaney forfeited the Delaney Option. The Delaney Option had exercise price equal to the closing price of the Company’s common stock in trading on Nasdaq on January 3, 2023. The shares of common stock subject to the Delaney Option would have vested as to 25% on January 1, 2024, and 1/48th of the total shares of common stock subject to the Delaney Option would have vested on the 1st of each month thereafter, so that the Delaney Option would have been fully vested on the four-year anniversary of January 1, 2023.The Delaney Employment Agreement contained provisions regarding severance payments and benefits due to Mr. Delaney upon certain termination events by Aadi or upon a resignation for Good Reason (as defined in the Delaney Employment Agreement) by Mr. Delaney, but none of these provisions were triggered by Mr. Delaney's resignation in March 2023. Pursuant to the Delaney Employment Agreement, in the event that outside of the Change of Control Period (as defined in the Delaney Employment Agreement), if Mr. Delaney’s employment is terminated by Aadi other than for Cause (as defined in the Delaney Employment Agreement), death or Disability (as defined in the Delaney Employment Agreement) or Mr. Delaney resigns for Good Reason, Mr. Delaney was entitled to receive: (i) continuing payments of severance pay for a period of eighteen (18) months at a rate equal to (A) one hundred and fifty percent (150%) of his base salary, as then in effect, divided by (B) 18, and (ii) if he elected continuation coverage pursuant to COBRA within the time period prescribed pursuant to COBRA for himself and his eligible dependents, then Aadi would have reimbursed Mr. Delaney for the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to Mr. Delaney’s termination) until the earlier of (A) a period of eighteen (18) months from the date of termination or (B) the date upon which Mr. Delaney and/or Mr. Delaney’s eligible dependents were no longer eligible for COBRA continuation coverage. If, within the Change of Control Period, Mr. Delaney’s employment was terminated by Aadi other than for Cause, death or Disability or Mr. Delaney resigns for Good Reason, Mr. Delaney was entitled to receive: (i) a lump sum payment equal to one hundred and fifty percent (150%) of the sum of: (A) his base salary, as then in effect, or if greater, at the level in effect immediately prior to the Change of Control, plus (B) his target bonus in effect for the fiscal year in which his termination of employment occurs, (ii) if he elected continuation coverage pursuant to COBRA within the time period prescribed21pursuant to COBRA for himself and his eligible dependents, then Aadi would have reimbursed Mr. Delaney for the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to Mr. Delaney’s termination) until the earlier of (A) a period of eighteen (18) months from the date of termination or (B) the date upon which Mr. Delaney and/or Mr. Delaney’s eligible dependents were no longer eligible for COBRA continuation coverage, and (iii) accelerated vesting as to one hundred percent (100%) of Mr. Delaney’s then outstanding and unvested equity awards to acquire Aadi's common stock. Payment of any severance payments to Mr. Delaney pursuant to the Delaney Employment Agreement was contingent on his execution and not revoking a separation agreement and release of claims in a form reasonably satisfactory to Aadi, and provided that such release became effective and irrevocable no later than 60 days following the termination date. Mr. Delaney remains subject to confidentiality and intellectual property assignment obligations.Employment Agreement with Loretta Itri, M.D.Dr. Itri entered into an employment agreement with us in November 2021 (the “Itri Employment Agreement”). The Itri Employment Agreement provides for an initial annual base salary of $450,000 and eligibility to receive an annual bonus of up to 45% of her annual base salary. Dr. Itri is eligible to participate in employee benefit plans generally available to other senior executives of the Company. The Itri Employment Agreement further provides that if Dr. Itri’s employment is terminated by the Company without Cause (as defined in the Itri Employment Agreement) or Dr. Itri resigns for Good Reason (as defined in the Itri Employment Agreement), she will be entitled to receive: (i) base salary, at the rate then in effect, continuation for twelve months following termination, and (ii) if she elects COBRA coverage, up to twelve months of reimbursement of a portion of each COBRA premium payment equal to the portion the Company contributed to such health insurance premium cost as of the date of termination. In lieu of the severance payments and benefits set forth above, in the event Dr. Itri’s employment is terminated by the Company without Cause or he resigns for Good Reason, within twelve months following a Change of Control (as defined in the Itri Employment Agreement) or three months prior to a Change of Control, she will be entitled to receive: (i) a lump sum payment equal to 100% of the sum of: (A) her base salary, as then in effect, or if greater, at the level in effect immediately prior to the Change of Control, plus (B) her target bonus in effect for the fiscal year in which her termination of employment occurs, (ii) if she elects COBRA coverage, up to twelve months of reimbursement of a portion of each COBRA premium payment equal to the portion the Company contributed to such health insurance premium cost as of the date of termination, and (iii) full accelerated vesting of all then-outstanding and unvested equity awards to acquire the Company’s common stock. Payment of any severance payments to Dr. Itri pursuant to the Itri Employment Agreement is contingent on her execution and not revoking a separation agreement and release of claims in a form reasonably satisfactory to the Company, and provided that such release becomes effective and irrevocable no later than 60 days following the termination date.2022 Bonus PlanThe Company provides annual cash incentive compensation to its named executive under its Senior Executive Cash Incentive Bonus Plan based on their meeting of one or more corporate performance objectives. The performance objects that the named executive officers must meet change from year to year as from year to year as market conditions evolve and different priorities are established, but the Company’s board of directors select challenging goals that are achievable only by strong performance.All of the Company’s named executive officers participated in its annual cash incentive compensation program for 2022 (the “2022 Bonus Plan”), which provided them with an opportunity to receive formula-based incentive amounts. These named executive officers’ target bonus opportunities under the 2022 Bonus Plan are expressed as a percentage of each named executive officer’s annual base salary. For 2022, the target bonus opportunity was 60% for Dr. Desai and 45% for Mr. Delaney and Dr. Itri.For 2022, the performance metrics for which achievement was measured to determine bonuses were as follows:•clinical goal related to clinical trial initiation and enrollment;•commercial goal related to the launch and annual revenue of FYARRO®;•manufacturing goal related to clinical and commercial supply of FYARRO®;•capitalization goal.In February 2023, our compensation committee reviewed our accomplishments for fiscal year 2022 and determined to approve a bonus payout of 120% of target for each of our named executive officers under the 2022 Bonus Plan.22The amounts in the Summary Compensation Table under the column “Non-equity incentive plan compensation” are based on the named executive officer’s target bonus amount multiplied by the achievement percentage set by our compensation committee, consistent with the determinations under the applicable year’s bonus plan.Retirement PlanStarting in 2022, we offer a 401(k) plan to eligible employees, including our named executive officers. Under this plan, all eligible employees may contribute a percentage of their eligible compensation up to a maximum limit per year. We make matching contributions under our 401(k) plan up to a maximum of 4% of an employee’s eligible earnings. Company contributions are discretionary. For the year ended December 31, 2017. Management is responsible2022, we contributed $477,144 to the 401(k) plan. No contributions were made during the year ended December 31, 2021. We intend for the day-to-day management401(k) plan to qualify, depending on the employee’s election, under Section 401(a) of risksthe Code.Pay Versus PerformanceIn accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we face, whileprovide the following disclosure regarding executive compensation for our principal executive officers (“PEOs”) and Non-PEO NEOs and Company performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.Year Summary Compensation Table Total for Neil Desai(1) ($)Summary Compensation Table Total for Joseph Gardner(1) ($)Compensation Actually Paid to Neil Desai
(1)(2)(3) ($)Compensation Actually Paid to Neil Desai
(1)(2)(3) ($)Average Summary Compensation Table Total for Non-PEO NEOs(1) ($)Average Compensation Actually Paid to Non-PEO NEOs
(1)(2)(3) ($)Value of Initial Fixed $100 Investment based on: (4) TSR ($) Net Income (5)
($ Millions)2022 3,052,812 — 1,388,191 — 1,594,777 (132,196) 87.28 (60.5) 2021 3,740,268 1,515,326 3,032,829 2,056,157 4,900,921 3,084,193 164.29 (110.1) 1. Neil Desai became our PEO in August 2021, upon the merger with Aerpio Pharmaceuticals, Inc. Joseph Gardner was our PEO until the merger in August 2021. The individuals comprising the Non-PEO NEOs for each year presented are listed below, each of whom became NEOs after the merger.2021 2022 Brendan Delaney Brendan Delaney Scott Giacobello Loretta Itri 2. The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below.3. Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEOs and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Option Awards column are the totals from the Option Awards column set forth in the Summary Compensation Table.Year Summary Compensation Table Total for Neil Desai ($) Exclusion of Option Awards for Neil Desai ($) Inclusion of
Equity Values for Neil Desai ($)Compensation
Actually Paid to Neil Desai ($)2022 3,052,812 (1,934,692) 270,071 1,388,191 2021 3,740,268 (2,511,538) 1,804,099 3,032,829 23Year Summary Compensation Table Total for Joseph Gardner ($) Exclusion of Option Awards for Joseph Gardner ($) Inclusion of Equity Values for Joseph Gardner ($) Compensation Actually Paid to Joseph Gardner ($) 2021 1,515,326 — 540,831 2,056,157 Year Average Summary Compensation Table Total for Non-PEO NEOs ($) Average Exclusion of Option Awards for Non-PEO NEOs ($) Average Inclusion of Equity Values for Non-PEO NEOs ($) Average Compensation Actually Paid to Non-PEO NEOs ($) 2022 1,594,777 (809,592) (917,381) (132,196) 2021 4,900,921 (4,731,427) 2,914,699 3,084,193 The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:Year Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Neil Desai ($) Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for
Neil Desai ($)Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for
Neil Desai ($)Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for
Neil Desai ($)Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for
Neil Desai ($)Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Neil Desai ($) Total - Inclusion of
Equity Values for
Neil Desai ($)2022 1,092,468 (579,684) — (242,713) — — 270,071 2021 1,585,800 140,776 — 77,523 — — 1,804,099 Year Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Joseph Gardner ($) Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Joseph Gardner ($) Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Joseph Gardner ($) Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Joseph Gardner ($) Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Joseph Gardner ($) Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Joseph Gardner ($) Total - Inclusion of
Equity Values for Joseph Gardner ($)2021 — — — 540,831 — — 540,831 24Year Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year
for Non-PEO NEOs ($)Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs ($) Average Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs ($) Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs ($) Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs ($) Average Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Non-PEO NEOs ($) Total - Average Inclusion of
Equity Values for Non-PEO NEOs ($)2022 457,155 (966,672) — (407,864) — — (917,381) 2021 2,914,699 — — — — — 2,914,699 4. The Company TSR assumes $100 was invested in the Company for the period starting December 31, 2020 through the end of the listed year. Historical stock performance is not necessarily indicative of future stock performance.Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Company Total Shareholder Return (“TSR”)The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our Non-PEO NEOs, and the Company’s cumulative TSR over the two most recently completed fiscal years.
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net IncomeThe following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Net Income during the two most recently completed fiscal years.25
(5) The dollar amounts reported are the Company's net income or loss as reflected in the Company's audited financial statements.Securities Authorized for Issuance Under Equity Compensation PlansWe maintain our 2017 Stock Option and Incentive Plan, the 2021 Equity Incentive Plan ("2021 Plan"), the 2021 Employee Stock Purchase Plan ("2021 ESPP") and the Amended and Restated 2014 Equity Incentive Plan, which was assumed by us in connection with the Merger approved by our stockholders. As of December 31, 2022, we had two active equity compensation plans and two inactive equity compensation plans with awards still outstanding at December 31, 2022. We also have warrants outstanding that were issued prior to the Merger to an individual pursuant to an equity compensation plan not approved by our stockholders.Plan Category (a) Number of securitiesto be issued uponexercise ofoutstanding options,warrants and rights(b) Weighted averageexercise price ofoutstanding options,warrants and rights(c) Number of securitiesremaining availablefor future issuanceunder equitycompensation plans(excluding securitiesreflected in column (a))Equity compensation plans approvedby security holders (1)(2)(3)2,990,423 $ 19.28 1,346,121 (4) Equity compensation plans not approved by security holders (5) 29,167 Total 3,019,590 $ 1 $ 1,346,121 (4) (1)Includes the following plans: Amended and Restated 2014 Equity Incentive Plan, 2017 Stock Option and Incentive Plan, 2021 Plan, and 2021 ESPP.(2)Our Board adopted, and our stockholders approved, our 2021 Plan. The 2021 Plan provides that the number of shares available for issuance under the 2021 Plan will be increased on the first day of each fiscal year beginning on January 1, 2022, in an amount equal to the least of (i) 2,070,784 shares, (ii) four percent (4%) of the outstanding shares of common stock on the last day of the immediately preceding fiscal year or (iii) such number26of shares determined by our Board no later than the last day of the immediately preceding fiscal year. On January 1, 2023, the number of shares available under the 2021 Plan increased by 977,400 shares pursuant to this feature.(3)Our Board adopted, and our shareholders approved, the 2021 ESPP. The 2021 ESPP provides that the number of shares available for issuance under the 2021 ESPP will be increased on the first day of each fiscal year beginning with the 2022 fiscal year, in an amount equal to the least of (i) 310,617 shares, (ii) one percent (1%) of the outstanding shares of common stock on the last day of the immediately preceding fiscal year or (iii) an amount determined by the administrator no later than the last day of the immediately preceding fiscal year. On January 1, 2023, the number of shares available under the 2021 ESPP increased by 244,350 shares pursuant to this feature.(4)Excludes (i) 977,400 additional shares of common stock that may be issued pursuant to our 2021 Plan pursuant to an automatic annual increase effective on January 1, 2023 and (ii) 244,350 additional shares of common stock that may be issued pursuant to our 2021 ESPP pursuant to an annual increase effective on January 1, 2023.(5)Reflects warrants issued for the purchase of 29,167 shares of common stock at an exercise price of $7.29 per share. These warrants are compensatory in nature and are fully vested.27DIRECTOR COMPENSATIONDirector Compensation PolicyOur Board expects to review director compensation periodically to ensure that director compensation remains competitive such that we are able to recruit and retain qualified directors. In 2021, the compensation committee of the Private Aadi board of directors asretained Radford, a whole and through its committees, has responsibility forthird-party compensation consultant, to provide the oversight of risk management. In its risk oversight role, our board of directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed.The role of the board of directors in overseeing the management of our risks is conducted primarily through committees of the board of directors, as disclosed in the descriptions of each of the committees above and in the charters of each of the committees. The full board of directors (or the appropriate board committee in the case of risks that are under the purview of a particular committee) discusses with management our major risk exposures, their potential impact on us, and the steps we take to manage them. When a board committee is responsible for evaluating and overseeing the management of a particular risk or risks, the chairman of the relevant committee reports on the discussion to the full board of directors during the committee reports portion of the next board meeting. This enables thePrivate Aadi board of directors and its committeescompensation committee with an analysis of publicly available market data regarding practices and compensation levels at comparable companies and assistance in determining compensation to coordinatebe provided to Aadi’s non-employee directors. Based on the risk oversight role, particularlydiscussions with respectand assistance from the compensation consultant, in connection with the Merger, our Board adopted a new compensation policy that provides for certain compensation to risk interrelationships.Risk AssessmentWe believe that although a portionPolicy”). The Director Compensation Policy became effective on August 26, 2021 in connection with the Merger.Pursuant to our Director Compensation Policy, our non-employee directors will receive cash compensation, paid quarterly, as follows:•Each non-employee director is entitled to receive an annual cash retainer in the amount of $40,000 per year.•A non-employee chairperson is entitled to receive an additional annual cash retainer in the amount of $26,000 per year.•The chairperson of the audit committee is entitled to receive additional annual cash compensation in the amount of $20,000 per year for such chairperson’s service on the audit committee. Each non-chairperson member of the audit committee is entitled to receive additional annual cash compensation in the amount of $8,000 per year for such member’s service on the audit committee.•The chairperson of the compensation providedcommittee is entitled to receive additional annual cash compensation in the amount of $12,000 per year for such chairperson’s service on the compensation committee. Each non-chairperson member of the compensation committee is entitled to receive additional annual cash compensation in the amount of $6,000 per year for such member’s service on the compensation committee.•The chairperson of the nominating and corporate governance committee is entitled to receive additional annual cash compensation in the amount of $9,000 per year for such chairperson’s service on the nominating and corporate governance committee. Each non-chairperson member of the nominating and corporate governance committee is entitled to receive additional annual cash compensation in the amount of $4,500 per year for such member’s service on the nominating and corporate governance committee.Under the Director Compensation Policy, upon the director’s initial appointment or election to our executive officersBoard, each non-employee director will receive an option (the “Initial Grant”) to purchase shares of our common stock with an aggregate grant date fair value as determined in accordance with U.S. generally accepted accounting principles equal to $325,000. The Initial Grant will vest as to one thirty-sixth (1/36th) of the shares subject to the Initial Grant on a monthly basis following the Initial Grant’s grant date on the same day of the month as such grant date, subject to continued service through each applicable vesting date.In addition, each non-employee director who has been serving as a director for the prior six months and other employeeswill continue to serve as a director immediately following each annual stockholder meeting, will receive, on the first trading day immediately following the date of such annual stockholder meeting, an option (the “Annual Grant”) to purchase shares of our common stock with an aggregate grant date fair value equal to $180,000. The Annual Grant will fully vest on the earlier of the first anniversary of the applicable grant date or the date immediately before the date of the next annual stockholder meeting, subject to continued service through such vesting date.In the event of a change in control, as defined in our 2021 Plan (or its successor plan, as applicable), each non-employee director’s then outstanding equity awards covering shares of our common stock will accelerate vesting in full, provided that he or she remains a non-employee director through the date of our change in control.Each Initial Grant and Annual Grant will be granted under our 2021 Plan (or its successor plan, as applicable) and form of award agreement under such plan. These awards will have a maximum term to expiration of 10 years from their grant and a per share exercise price equal to 100% of the fair market value of a share of our common stock on the award’s grant date.The 2021 Plan includes a maximum annual limit of $750,000 of cash compensation and equity awards that may be paid, issued or granted to a non-employee director in any fiscal year (increased to $1,000,000 in the fiscal year in which the non-employee director joins the Board). For purposes of these limitations, the value of an equity award is performance-based, our executivebased on its grant date fair value. Any cash compensation programpaid or equity awards granted to a person for his or her services as an employee, or for28his or her services as a consultant (other than as a non-employee director), will not count for purposes of the limitation. The maximum limit does not encourage excessivereflect the intended size of any potential compensation or unnecessary risk taking. Ourequity awards to our non-employee directors.2022 Director Compensation TableThe following table sets forth information for the year ended December 31, 2022, regarding the compensation programsawarded to, earned by or paid to our non-employee directors. Directors who are designedalso our employees receive no additional compensation for their service as a director. The compensation received by Dr. Desai as an employee of the Company is presented in “Executive Compensation—Summary Compensation Table”.Name Fees Earned orPaid in Cash($)StockAwards ($)OptionAwards ($)(1)All Other Compensation($) Total($) Caley Castelein, M.D. (2) 72,000 — 179,995 251,995 Anupam Dalal, M.D. (3) 55,000 — 179,995 234,995 Emma Reeve (4) 60,000 — 179,995 239,995 Behzad Aghazadeh, Ph.D. (5) 44,500 — 179,995 224,495 Karin Hehenberger, M.D., Ph.D. (6) 52,500 — 179,995 50,000 232,495 Richard Maroun (7) 60,000 — 179,995 239,995 Mohammad Hirmand (8) — — — — — (1)The amounts reported in the Option Awards column represent the grant date fair value of the stock options granted to encourage our executive officersnon-employee directors as of the grant date as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, not including any estimates of forfeitures. The assumptions used in calculating the grant date fair value of the stock options reported in the Option Awards column are set forth in Note 13 to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022. Note that the amounts reported in this column reflect the accounting cost for these stock options, and other employees to remain focused on both short-term and long-term strategic goals, in particular in connection with our pay-for-performance compensation philosophy. As a result, we do not believecorrespond to the actual economic value that may be received by our compensation programs are reasonably likely to have a material adverse effect on us.(2)As of December 31, 2022, Dr. Castelein held 36,122 options and Anti-Pledging PoliciesOur insider trading policies prohibit all directors, executive officers,19,694 shares of common stock equity awards, respectively.(3)As of December 31, 2022, Dr. Dalal held 36,122 options and certain employees from buying or selling derivatives on our securities, engaging in hedging transactions involving our securities or holding our securities in a margin account, and only allow our securities to be pledged as collateral1,130 shares of common stock equity awards, respectively.(4)As of December 31, 2022, Ms. Reeve held 35,059 options.(5)As of December 31, 2022, Dr. Aghazadeh held 36,122 options.(6)As of December 31, 2022, Dr. Hehenberger held 36,122 options. The amount under "All Other Compensation" includes $50,000 for a loan with the prior approvalconsulting services fees paid by the Audit CommitteeCompany to Lyfebulb Holdings, Inc., of which must have at least two (2) weeks to consider any such requestDr. Hehenberger is the founder and for approval. To date no such requests have been made or approved.which she serves as chief executive officer.
(7)As of December 31, 2022, Mr. Maroun held 59,912 options.(8)Dr. Hirmand joined the Company's board of directors in March 2023.29SECURITY OWNERSHIPOWNERSHIP OFCERTAIN BENEFICIAL OWNERS AND MANAGEMENTThe following table sets forth information relating to the beneficial ownership of our common stock at March 8, 2018,April 25, 2023 by:The number of shares beneficially owned by each entity, person, director or executive officer is determined in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares over which the individual has sole or shared voting power or investment power as well as any shares that the individual has the right to acquire within 60 days of March 8, 2018April 25, 2023 through the exercise of any stock option, warrants or other rights. Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock held by such person.The percentage of shares beneficially owned is computed on the basis of 27,146,09924,436,990 shares of common stock outstanding as of March 8, 2018.April 25, 2023. Shares of common stock that a person has the right to acquire within 60 days of March 8, 2018April 25, 2023 are deemed outstanding for purposes of computing the percentage ownership of the person holding such rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person, except with respect to the percentage ownership of all directors and executive officers as a group. Unless otherwise indicated below, the address for each beneficial owner listed in the table is c/o Aerpio Pharmaceuticals,Aadi Bioscience, Inc., 9987 Carver Road,17383 Sunset Boulevard, Suite 420, Cincinnati, Ohio 45242.Shares Beneficially Owned 5% Stockholders: Number Percentage Entities Affiliated with Avoro (1) 3,471,752 14.2 % Entities Affiliated with Acuta Capital Partners (2) 1,849,402 7.6 % Entities Affiliated with Muneer A. Satter (3) 1,630,830 6.7 % Named Executive Officers and Directors: Neil Desai, Ph.D. (4) 2,650,308 10.8 % Brendan Delaney (5) 20,000 * Loretta Itri, M.D. (6) 99,712 * Caley Castelein, M.D. (7) 555,814 2.3 % Anupam Dalal, M.D. (8) 1,886,654 7.7 % Behzad Aghazadeh, Ph.D. (9) 3,507,874 14.3 % Emma Reeve (10) 35,059 * Karin Hehenberger, M.D., Ph.D. (11) 36,122 * Richard Maroun (12) 59,912 * Mohammad Hirmand M.D. (13) — * All directors and executive officers as a group (10 persons) (14) 8,964,154 35.8 % *Indicates beneficial ownership of less than 1% of the total outstanding common stock.(1)Consists of 5,805,550 shares of common stock owned directly by Novartis Bioventures, Ltd. The board of directors of Novartis Bioventures Ltd. has sole voting and investment control and power over such shares. None of the members of its board of directors has individual voting or investment power with respect to such shares and each disclaims beneficial ownership of such shares. Novartis Bioventures Ltd. is an indirectly-owned subsidiary of Novartis AG. The address of Novartis Bioventures Ltd. is 131 Front Street, Hamilton, HM12, Bermuda.(2)Consists of 4,416,446 shares of common stock owned directly by OrbiMed Private Investments V, LP, or OPI V. OrbiMed Capital GP V LLC, or GP V, is the general partner of OPI V. OrbiMed Advisors LLC, or OrbiMed, is the managing member of GP V. Samuel D. Isaly is the managing member of and owner of a controlling interest in OrbiMed. By virtue of such relationships, GP V, OrbiMed and Mr. Isaly may be deemed to have voting and investment power over the shares held by OPI V and as a result may be deemed to have beneficial ownership of such shares. Chau Khuong, an employee of OrbiMed, is a member of our board of directors. Each of GP V, OrbiMed, Mr. Isaly and Mr. Khuong disclaims beneficial ownership of the shares held by OPI V, except to the extent of its or his pecuniary interest therein, if any. The address of OrbiMed Investments and OrbiMed Associates is c/o OrbiMed Advisors LLC, 601 Lexington Avenue, 54th Floor, New York, New York 10022.(3)Consists of (a) 976,568 shares of common stock that are held by the Muneer A. Satter Revocable Trust for which Muneer A. Satter serves as trustee and, in such capacity, has sole voting and dispositive power over all such shares, (b) 1,145,267 shares of common stock that are held by various other trusts and other entities for which Muneer A. Satter serves as trustee, investment advisor or manager and, in such capacity, has sole voting and dispositive power over all such shares (collectively, the “Satter Investors”), and (c) 1,120,000 shares of common stock that are held by Satter Medical Technology Partners, L.P., or SMTP, and Muneer A. Satter has sole voting and dispositive power over all such shares. The address of the Satter Investors and SMTP is c/o Satter Management Co., L.P., 676 North Michigan Avenue, Suite 4000, Chicago, Illinois 60610.(4)Consists of 1,576,475 shares of common stock owned directly by Venture Investors Early Stage Fund IV Limited Partnership, or VIESF. The general partner of VIESF, VIESF IV GP LLC, has sole voting and investment control over the shares owned by VIESF. The members of VIESF IV GP LLC, John Neis, Paul M. Weiss, Scott Button, George Arida, James R. Adox, Loren G. Peterson, and Venture Investors Southeast LLC (of which Roger H. Ganser is the sole member), have sole voting and investment power for VIESF IV GP LLC with respect to its voting power in its capacity as General Partner for the shares held by VIESF. None of the members of VIESF IV GP LLC has individual voting or investment power with respect to such shares and each disclaims beneficial ownership of such shares except to the extent of any pecuniary interest therein. The address of Venture Investors Early Stage Fund IV Limited Partnership is 505 South Rosa Road, Suite 201, Madison, Wisconsin, 53719.(5)Consists of 14,964 shares of common stock issuable directly to Pravin Dugel upon the conversion of options within 60 days of March 8, 2018.(6)Consists of (i) 593,019 shares of common stock held directly by Joseph Gardner and (ii) 235,355 shares of common stock issuable upon the conversion of options within 60 days of March 8, 2018.(7)Consists of 108,129 shares of common stock issuable directly to Steve Pakola upon the conversion of options within 60 days of March 8, 2018.Section 16(a) Beneficial Ownership Reporting ComplianceSection 16(a) of the Exchange Act requires our directors, executive officers and holders of more than 10% of our common stock to file(1)Based solely on a Schedule 13D/A filed with the SEC initial reportson September 26, 2022, consists of ownership(i) 2,849,402 shares of ourcommon stock that are held by Avoro Capital Advisors LLC (“Avoro Capital”) and (ii) 622,350 shares of common stock that are held by Avoro Ventures Fund L.P. (“Avoro Ventures Fund”), an investment fund managed by Avoro Ventures LLC (“Avoro Ventures”). According to the Schedule 13D/A, Avoro Capital has sole voting power and sole dispositive power with regard to 2,849,402 shares of common stock and other equity securities onAvoro Ventures has sole dispositive power with regard to 622,350 shares of common stock. Behzad Aghazadeh, a Form 3director of the Company, is the portfolio manager and reportscontrolling person at Avoro Capital and Avoro Ventures. The principal business address of changes in such ownership on a Form 4 or Form 5. Directors, executive officerseach of Avoro Capital and holders of more than 10% of our common stock are required by SEC regulations to furnish us with copies of all30Section 16(a) forms they file. To our knowledge, based(2)Based solely on a review of our recordsSchedule 13F and representations made by our directors and officers regarding their filing obligations, all Section 16(a) filing requirements were satisfied with respect to 2017, except that Anupam Dalal and Caley Castelein each did not timely file a Form 4 filed with respect to one transaction on December 22, 2017 which was reported on Form 5the SEC on February 14, 2018.Historically, our executive compensation program2023 and September 27, 2022, respectively, consists of (i) 1,572,698 shares held by Acuta Capital Fund, L.P. (“Acuta Capital”) and (ii) 276,704 shares held by Acuta Opportunity Fund, L.P. (“Acuta Opportunity Fund”). Acuta Capital Partners, LLC (“Acuta Partners”) is a general partner of each of Acuta Capital and Acuta Opportunity Fund. According to the Schedule 13F, Acuta Partners has reflected its growthsole voting power and corporate goals. To date, the compensationsole dispositive power with regard to 1,849,402 shares of common stock. Dr. Dalal, a director of the named executive officersCompany, is the Chief Investment Officer and Managing Member of Acuta Partners. Dr. Dalal has consisted of a combination of base salary, annual cash bonus,voting and long-term equity incentive compensation in the form of restricted stock and stock options, and other employee benefits generally available to our employees. The named executive officers are also entitled to certain compensation and benefits upon certain terminations of employment pursuant to their executive employment agreements as described below.The named executive officers for the year ended December 31, 2017 were as follows:Stephen Hoffman, our Chief Executive Officer;Michael Rogers, our Chief Financial Officer;Joseph H. Gardner, our President and Founder and former Chief Executive Officer; andSteve Pakola, our Chief Medical Officer.Elements of Executive CompensationBase Salaries. Base salaries for the named executive officers are determined annually by the Compensation Committee, subject to review and approval by the board of directors, based on the scope of each officer’s responsibilities along with his respective experience and contributions during the prior year. When reviewing base salaries, the Compensation Committee takes factors into account such as each officer’s experience and individual performance, our performance as a whole, data from surveys of compensation paid by comparable companies, and general industry conditions, but does not assign any specific weighting to any factor.Annual Cash Bonuses. Prior to the Merger (as further described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017),investment authority over all of the named executive officers participated in an annual cash program sponsoredshares held by Aerpioeach of Acuta Capital and following the Merger, allAcuta Opportunity Fund. Each of Acuta Partners and Dr. Dalal disclaim beneficial ownership of the named executive officers participateshares of common stock held by each of Acuta Capital and Acuta Opportunity Fund except to the extent of their pecuniary interest therein. The principal business address of each of Acuta Capital is c/o Acuta Capital Partners, LLC, 1301 Shoreway Road, Suite 350, Belmont, California 94002.(3)Based solely on a Schedule 13G/A filed with the SEC on February 10, 2023, consist of (i) 1,256,045 shares that are held by Alerce Medical Technology Partners, L.P. for which Mr. Satter has sole voting and dispositive power over all such shares; (ii) 233,333 shares that are held by Satter Medical Technology Partners, L.P. for which Mr. Satter has sole voting and dispositive power over all such shares; (iii) 65,104 shares of Common Stock that are held by Muneer A. Satter Revocable Trust for which Mr. Satter serves as trustee and, in such capacity, has sole voting and dispositive power over all such shares; and (iv) 76,348 shares of common stock that are held by various other trusts and other entities for which Mr. Satter serves as trustee, investment advisor or manager and, in such capacity, has sole voting and dispositive power over all such shares. The principal business address for the entities and individuals affiliated with Mr. Satter listed above is Muneer A. Satter, c/o Alerce Investment Management, L.P., 676 North Michigan Avenue, Suite 4000, Chicago, IL 60611.(4)Consists of (i) 1,873,543 shares of common stock held indirectly by the Anishka Family Trust, (ii) 639,698 shares of common stock held indirectly by the Anishka Irrevocable 2016 Trust dated October 19, 2016 (the “Anishka Irrevocable Trust”), and (iii) 137,067 shares of common stock issuable upon the exercise of options within 60 days of April 25, 2023. Dr. Desai disclaims beneficial ownership of the securities held in the Aerpio Pharmaceuticals, Inc. annual cash bonus program, which promotesAnishka Irrevocable Trust, except to the extent of any pecuniary interest therein.(5)Consists of 20,000 shares of common stock held directly by Mr. Delaney. In March 2023, Mr. Delaney resigned from his position as the Company's president and rewards the executives for the achievement of key strategicchief executive officer and business goals. In anticipation of possible fundraising activities to be completed in 2017, no bonuses were declared for 2016. For the 2017 bonus plan period, the target annual bonus as a percentage of base salary, as determined based on the salary earned throughout the bonus plan period, for eachmember of the named executive officers is further described in the section titled “Executive Compensation—Employment Agreements.” At the beginning of the 2017 bonus plan period, the Compensation Committee established corporate performance goals, each having a designated weighting, which related to key development, strategicBoard and financial goals of our company. At the end of the 2017 bonus plan period, the Compensation Committee met and evaluated the performance of the Company against the specified performance goals. Based on its evaluation, the Compensation Committee recommended, and the board of directors approved, that we achieved 110% of our corporate goals. Consequently, the board of directors approved payment of cash bonuses to the named executive officers for the 2017 bonus plan period in the amounts reported in the “Summary Compensation Table—2017” below.Equity Awards. The named executive officers have historically participated in Aerpio’s 2011 Plan and 2017 Plan. During fiscal year 2017 andforfeited all options in connection with their commencementsuch resignation.(6)Consists of employment with us, we granted Dr. Hoffman an option to purchase 586,012(i) 3,000 shares of our common stock held by Dr. Itri's spouse and Mr. Rogers an option to purchase 293,006(ii) 96,712 shares of our common stock each having anissuable upon the exercise price of $5.50 per share. These options vest 25%within 60 days of April 25, 2023.(7)Consists of (i) 19,694 shares of common stock held directly by Dr. Castelein, (ii) 499,998 shares of common stock held indirectly by KVP Capital, LP (“KVP Capital”), and (iii) 36,122 shares of common stock issuable upon the exercise of options within 60 days of April 25, 2023. Dr. Castelein is the Managing Director of KVP Capital and Dr. Castelein disclaims beneficial ownership of the shares held by KVP Capital, except to the extent of his pecuniary interest therein.(8)Consists of (i) 1,130 shares of common stock held directly by Dr. Dalal, (ii) the securities listed in footnote (2) above, and (iii) 36,122 shares of common stock issuable upon the exercise of options within 60 days of April 25, 2023.(9)Consists of (i) the securities listed in footnote (1) above and (ii) 36,122 shares of common stock issuable upon the exercise of options within 60 days of April 25, 2023.(10)Consists of 35,059 shares of common stock issuable upon the exercise of options within 60 days of April 25, 2023.(11)Consists of 36,122 shares of common stock issuable upon the exercise of options within 60 days of April 25, 2023.(12)Consists of 59,912 shares of common stock issuable upon the exercise of options within 60 days of April 25, 2023.(13)Dr. Hirmand was appointed to the Board in March 2023. His initial option award vests on the first anniversary of the commencementoption grant date.(14)Includes an aggregate of employment and then in 36 monthly installments thereafter, in each case subject to565,937 shares issuable upon the executive continuing to provide services through each such vesting date. Additionally, in 2017, we granted Dr. Gardner an option to purchase 135,000 sharesexercise of stock options within 60 days of April 25, 2023 held by our common stock, having an exercise price of $5.50 per share, which option shall vest in full on July 1, 2018, subject to Dr. Gardner continuing to provide services through such vesting date. We did not grant any equity awards to Dr. Pakola in 2016 or 2017.Other Benefits. Our namedcurrent executive officers are eligible for additional benefits, such(which includes Scott Giacobello and omits Mr. Delaney) and directors as participation in our 401(k) plan, our employee stock purchase plan and basic health benefits that are generally available to all of our employees.Summary Compensation Table – 201731CERTAIN RELATIONSHIPS AND RELATED-PERSON TRANSACTIONSThe following table sets forth information regarding compensation awarded to, earned by or paid to each of the named executive officers for the periods ending December 31, 2017 and 2016.(1)Amount represents discretionary bonuses paid to Drs. Gardner and Pakola in 2017, which amounts were approved and paid after completion of the Merger.(2)The amounts reported in the Option Awards column represent the fair value of the stock options granted to the named executive officers as of the grant date as computed in accordance with FASB ASC Topic 718, not including any estimates of forfeitures. The assumptions used in calculating the grant date fair value of the stock options reported in the Option Awards column are set forth in Note 9 to our financial statements for the year ended December 31, 2017 and 2016. Note that the amounts reported in this column reflect the accounting cost for these stock options, and do not correspond to the actual economic value that may be received by the named executive officers from the options.(3)Amounts for 2017 represent cash bonuses earned for 2017 based upon achievement of corporate performance goals.(4)Amounts represent the dollar value of life insurance premiums paid by us on behalf of the named executive officers.(5)Dr. Hoffman commenced employment with us on December 1, 2017, with an annual base salary of $470,000. Salary and bonus amounts have been prorated to reflect his partial year of employment.(6)Mr. Rogers commenced employment with us on November 15, 2017, with an annual base salary of $375,000. Salary and bonus amounts have been prorated to reflect his partial year of employment.We have entered into employment agreements with each of our named executive officers and our other executive officers. Each employment agreement provides for “at will” employment, meaning that either we or the officer may terminate the employment relationship at any time without cause.Executive Employment Agreement with Stephen Hoffman. Dr. Hoffman’s initial base salary under his employment agreement is $470,000, which is subject to annual review and adjustment, and he is eligible to earn an annual cash incentive bonus with a target amount equal to 50% of his base salary. Dr. Hoffman is also eligible to participate in the employee benefit plans available to our employees, subject to the terms of those plans.Dr. Hoffman’s employment agreement provides that, in the event that his employment is terminated by us without “cause” (as defined in his employment agreement) or Dr. Hoffman resigns for “good reason” (as defined in his employment agreement) subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor, he will be entitled to receive (i) an amount equal to twelve months of his base salary, (ii) if Dr. Hoffman is participating in our group health plan immediately prior to his termination, a monthly cash payment until the earlier of twelve months following termination or the end of Dr. Hoffman’s COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to Dr. Hoffman had he remained employed with us, and (iii) acceleration of all time-based equity awards held by Dr. Hoffman in which Dr. Hoffman would have vested if he had remained employed for an additional twelve months. All amounts payable to Dr. Hoffman shall be made in substantially equal installments over twelve months following his termination.In lieu of the payments and benefits described in the preceding paragraph, in the event that Dr. Hoffman’s employment is terminated by us without cause or Dr. Hoffman resigns for good reason, in either case within fifteen months following a “change in control” (as defined in his employment agreement), subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor, he will be entitled to receive (i) a lump sum cash payment equal to 1.5 times the sum of (x) Dr. Hoffman’s then-current base salary (or his base salary in effect immediately prior to the change in control, if higher) and (y) his target annual incentive compensation, (ii) if Dr. Hoffman is participating in our group health plan immediately prior to his termination, a monthly cash payment until the earlier of twelve months following termination or the end of Dr. Hoffman’s COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to him had he remained employed with us and (iii) acceleration of all time-based equity awards held by Dr. Hoffman in which Dr. Hoffman would have vested if he had remained employed for an additional twelve months.In addition, Dr. Hoffman remains bound by certain restrictive covenants, including non-competition and non-solicitation provisions. These restrictive covenants apply during the term of Dr. Hoffman’s employment and for one year thereafter.Executive Employment Agreement with Michael Rogers. Mr. Rogers’ initial base salary under his employment agreement is $375,000, which is subject to annual review and adjustment, and he is eligible to earn an annual cash incentive bonus with a target amount equal to 40% of his base salary. Mr. Rogers is also eligible to participate in the employee benefit plans available to our employees, subject to the terms of those plans.Mr. Rogers’ employment agreement provides that, in the event that his employment is terminated by us without “cause” (as defined in his employment agreement) or Mr. Rogers resigns for “good reason” (as defined in his employment agreement) subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor, he will be entitled to receive (i) an amount equal to twelve months of his base salary, (ii) if Mr. Rogers is participating in our group health plan immediately prior to his termination, a monthly cash payment until the earlier of twelve months following termination or the end of Mr. Rogers’ COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to Mr. Rogers had he remained employed with us, and (iii) acceleration of all time-based equity awards held by Mr. Rogers in which Mr. Rogers would have vested if he had remained employed for an additional twelve months. All amounts payable to Mr. Rogers shall be made in substantially equal installments over twelve months following his termination.In lieu of the payments and benefits described in the preceding paragraph, in the event that Mr. Rogers’ employment is terminated by us without cause or Mr. Rogers resigns for good reason, in either case within 12 months following a “change in control” (as defined in his employment agreement), subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor, he will be entitled to receive (i) a lump sum cash payment equal to 1 times the sum of (x) Mr. Rogers’ then-current base salary (or his base salary in effect immediately prior to the change in control, if higher) and (y) his target annual incentive compensation, (ii) if Mr. Rogers is participating in our group health plan immediately prior to his termination, a monthly cash payment until the earlier of six months following termination or the end of Mr. Rogers’ COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to him had he remained employed with us and (iii) full acceleration of all time-based equity awards held by Mr. Rogers.In addition, Mr. Rogers remains bound by certain restrictive covenants, including non-competition and non-solicitation provisions, which have been incorporated by reference into the new employment agreement from his prior employment agreement. These restrictive covenants apply during the term of Mr. Rogers’ employment and for one year thereafter.Executive Employment Agreement with Joseph H. Gardner. Dr. Gardner’s base salary under his employment agreement, as amended after the Merger, is $410,000, which is subject to annual review and adjustment, and he is eligible to earn an annual cash incentive bonus with a target amount equal to 50% of his base salary. Dr. Gardner is also eligible to participate in the employee benefit plans available to our employees, subject to the terms of those plans.Dr. Gardner’s employment agreement, as amended after the Merger, provides that, in the event that (a) prior to July 1, 2018 his employment is terminated by us for reasons other than “cause” (as defined in his employment agreement, as amended) or he remains an employee through July 1, 2018 and his employment is terminated by us without cause or he resigns for “good reason” (as defined in his employment agreement, as amended) thereafter, and subject to the execution and effectiveness of a separation agreement, including a general release of claims in ourfavor, he will be entitled to receive (i) an amount equal to twelve months of his base salary, (ii) if Dr. Gardner is participating in our group health plan immediately prior to his termination, a monthly cash payment until the earlier of twelve months following termination or the end of Dr. Gardner’s COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to Dr. Gardner had he remained employed with us, and (iii) acceleration of all time-based equity awards held by Dr. Gardner in which Dr. Gardner would have vested if he had remained employed for an additional twelve months or (b) Dr. Gardner resigns for “good reason” prior to July 1, 2018 and subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor, he will be entitled to receive (i) an amount equal to nine months of his base salary, (ii) if Dr. Gardner is participating in our group health plan immediately prior to his termination, a monthly cash payment until the earlier of nine months following termination or the end of Dr. Gardner’s COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to Dr. Gardner had he remained employed with us, and (iii) acceleration of all time-based equity awards held by Dr. Gardner in which Dr. Gardner would have vested if he had remained employed for an additional six months. All amounts payable to Dr. Gardner shall be made in substantially equal installments over nine months following his termination, except that, in the case of a termination that occurs after July 1, 2018, such amount shall be paid in a lump sum.In lieu of the payments and benefits described in the preceding paragraph, in the event that Dr. Gardner’s employment is terminated by us without cause or Dr. Gardner resigns for good reason, in either case within 12 months following a “change in control” (as defined in his employment agreement, as amended), subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor, he will be entitled to receive (i) a lump sum cash payment equal to 0.75 times the sum of (x) Dr. Gardner’s then-current base salary (or his base salary in effect immediately prior to the change in control, if higher) and (y) his target annual incentive compensation, (ii) if Dr. Gardner is participating in our group health plan immediately prior to his termination, a monthly cash payment until the earlier of nine months following termination or the end of Dr. Gardner’s COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to him had he remained employed with us and (iii) full acceleration of all time-based equity awards held by Dr. Gardner.In addition, Dr. Gardner remains bound by certain restrictive covenants, including non-competition and non-solicitation provisions, which have been incorporated by reference into the employment agreement from his prior employment agreement. These restrictive covenants apply during the term of Dr. Gardner’s employment and for one year thereafter.Executive Employment Agreement with Stephen Pakola, M.D. Dr. Pakola’s base salary under his employment agreement is $350,200, which is subject to annual review and adjustment, and he is eligible to earn an annual cash incentive bonus with a target amount equal to 20% of his base salary. Dr. Pakola is also eligible to participate in the employee benefit plans available to our employees, subject to the terms of those plans.Dr. Pakola’s employment agreement provides that, in the event that his employment is terminated by us without “cause” (as defined in his new employment agreement) or Dr. Pakola resigns for “good reason” (as defined in his employment agreement) subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor, he will be entitled to receive (i) an amount equal to six months of his base salary, (ii) if Dr. Pakola is participating in our group health plan immediately prior to his termination, a monthly cash payment until the earlier of six months following termination or the end of Dr. Pakola’s COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to Dr. Pakola had he remained employed with us, and (iii) acceleration of all time-based equity awards held by Dr. Pakola in which Dr. Pakola would have vested if he had remained employed for an additional six months. All amounts payable to Dr. Pakola shall be made in substantially equal installments over six months following his termination.In lieu of the payments and benefits described in the preceding paragraph, in the event that Dr. Pakola’s employment is terminated by us without cause or Dr. Pakola resigns for good reason, in either case within 12 months following a “change in control” (as defined in his employment agreement), subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor, he will be entitled to receive (i) a lump sum cash payment equal to 0.5 times the sum of (x) Dr. Pakola’s then-current base salary (or his base salary in effect immediately prior to the change in control, if higher) and (y) his target annual incentive compensation, (ii) if Dr. Pakola is participating in our group health plan immediately prior to his termination, a monthly cash payment until the earlier of six months following termination or the end of Dr. Pakola’s COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to him had he remained employed with us and (iii) full acceleration of all time-based equity awards held by Dr. Pakola.In addition, Dr. Pakola has also entered into an employee confidentiality and assignment agreement with us that also contains certain restrictive covenants, including non-competition and non-solicitation provisions that apply during the term of Dr. Pakola’s employment and for one year thereafter.OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-ENDOutstanding Equity Awards at Fiscal Year-End 2017The following table sets forth information concerning outstanding equity awards for each of the named executive officers as of December 31, 2017:(1)Except as otherwise noted, options vest and become exercisable in 48 equal installments on each monthly anniversary of the vesting commencement date, such that all awards will be vested on the fourth anniversary of the vesting commencement date, subject to the holder continuing to provide services to the company through such vesting date.(2)Vests 25% on the first anniversary of the vesting commencement date, then vests in 36 equal monthly installments thereafter, such that the option is vested on the fourth anniversary of the vesting commencement date, subject to the holder continuing to provide services to the company through such vesting date.(3)Vests in full upon July 1, 2018, subject to Dr. Gardner continuing to provide services to the company through such vesting date.On March 15, 2017, we adopted a compensation policy for our non-employee directors, or the Director Compensation Program. Pursuant to the Director Compensation Program, our non-employee directors will receive cash compensation, paid quarterly, as follows:Each non-employee director will receive an annual cash retainer in the amount of $35,000 per year.Any non-employee Chairman will receive an additional annual cash retainer in the amount of $25,000 per year.The chairperson of the Audit Committee will receive additional annual cash compensation in the amount of $15,000 per year for such chairperson’s service on the Audit Committee. Each non-chairperson member of the Audit Committee will receive additional annual cash compensation in the amount of $7,500 per year for such member’s service on the Audit Committee.The chairperson of the Compensation Committee will receive additional annual cash compensation in the amount of $10,000 per year for such chairperson’s service on the Compensation Committee. Each non-chairperson member of the Compensation Committee will receive additional annual cash compensation in the amount of $5,000 per year for such member’s service on the Compensation Committee.The chairperson of the Nominating and Corporate Governance Committee will receive additional annual cash compensation in the amount of $7,000 per year for such chairperson’s service on the Nominating and Corporate Governance Committee. Each non-chairperson member of the Nominating and Corporate Governance Committee will receive additional annual cash compensation in the amount of $3,500 per year for such member’s service on the Nominating and Corporate Governance Committee.Under the Director Compensation Program, upon the director’s initial appointment or election to our board of directors, each non-employee director will receive an option (the Initial Grant) to purchase that number of shares of our common stock such that the award has an aggregate grant date fair value (as defined below) equal to $181,400, rounded down to the nearest whole share (subject to adjustment as provided in the applicable equity plan). In addition, each non-employee director who has been serving as a director for the prior three months and will continue to serve as a director immediately following each annual stockholder meeting, will receive, on the date of such annual stockholder meeting, an option (the Annual Grant) to purchase that number of shares of our common stock such that the award has an aggregate grant date fair value equal to $90,700, rounded down to the nearest whole share (subject to adjustment as provided in the applicable equity plan). For purposes of the Initial Grant and the Annual Grant, “grant date fair value” will mean the fair value of an award as of the date of grant as determined in accordance with ASC Topic 718, “Share-Based Payment”, using the Black-Scholes pricing model and the valuation assumptions used by the company in accounting for options as of such date of grant. The Initial Grant will vest as to one-third of the shares subject to Initial Grant on each yearly anniversary of the applicable grant date, subject to continued service through each applicable vesting date, and the Annual Grant will fully vest on the earlier of the first anniversary of the applicable grant date or the date of the next annual stockholder meeting, subject to continued service through such vesting date.2017 Director Compensation TableThe following table sets forth information for the year ended December 31, 2017, regarding the compensation awarded to, earned by or paid to our non-employee directors as of December 31, 2017. Directors who are also our employees receive no additional compensation for their service as a director. The compensation received by Drs. Gardner and Hoffman as employees of the Company is presented in “Executive Compensation—Summary Compensation Table—2017.(1)Unless otherwise indicated, our non-employee directors do not currently hold any options or stock awards.(2)Dr. Dugel holds options to purchase 16,742 shares of our common stock.EMPLOYEE BENEFIT PLANSSenior executive cash incentive bonus planIn March 2017, our board of directors adopted the Senior Executive Cash Incentive Bonus Plan, or the Bonus Plan. The Bonus Plan provides for cash bonus payments based upon the attainment of performance targets established by our Compensation Committee. The payment targets will be related to financial and operational measures or objectives with respect to our company, or corporate performance goals, as well as individual performance objectives.Our Compensation Committee may select corporate performance goals from among the following: cash flow (including, but not limited to, operating cash flow and free cash flow); revenue; corporate revenue; earnings before interest, taxes, depreciation and amortization; net income (loss) (either before or after interest, taxes, depreciation and/or amortization); changes in the market price of the Company’s common stock; economic value-added; development, clinical, regulatory or commercial milestones; acquisitions or strategic transactions; operating income (loss); return on capital, assets, equity, or investment; stockholder returns; return on sales; gross or net profit levels; productivity; expense efficiency; margins; operating efficiency; customer satisfaction; working capital; earnings (loss) per share of the Company’s common stock; bookings, new bookings or renewals; sales or market shares; number of customers, number of new customers or customer references; operating income and/or net annual recurring revenue, any of which may be (i) measured in absolute terms or compared to any incremental increase, (ii) measured in terms of growth, (iii) compared to another company or companies or to results of a peer group, (iv) measured against the market as a whole and/or as compared to applicable market indices and/or (v) measured on a pre-tax or post-tax basis (if applicable).Each executive officer who is selected to participate in the Bonus Plan will have a target bonus opportunity set for each performance period. The bonus formulas will be adopted in each performance period by the board, upon the recommendation of the Compensation Committee and communicated to each executive. The corporate performance goals will be measured at the enddescription of each performance period after our financial reports have been published or such other appropriate time as the board determines. If the corporate performance goalstransaction since January 1, 2021, and individual performance objectives are met, payments will be made as soon as practicable following the end of each performance period but not later than 74 days after the end of the fiscal year in which such performance period ends. Subject to the rights contained in any agreement between the executive officer and us, an executive officer must be employed by us onthe bonus payment date to be eligible to receive a bonus payment. If a participant was not employed for an entire performance period the board may pro rate the bonus based on the number of days employed during such period. The Bonus Plan also permits the Compensation Committee to approve additional bonuses to executive officers in its sole discretion.We offer a 401(k) plan to eligible employees, including our named executive officers. In accordance with this plan, all eligible employees may contribute a percentage of compensation up to a maximum of the statutory limits per year. Company contributions are discretionary. We made no contributions during the year ended December 31, 2017. We intend for the 401(k) plan to qualify, depending on the employee’s election, under Section 401(a) of the Code, so that contributions by employees, and income earned on those contributions, are not taxable to employees until withdrawn from the 401(k) plan.Indemnification of officers and directorsWe have agreed to indemnify our directors and executive officers in certain circumstances. See “Related Party Transactions — Indemnification Agreements and Directors’ and Officers’ Liability Insurance.”Compensation Committee interlocks and insider participationDuring 2017, our Compensation Committee was comprised of Messrs. Anupam Dalal and Paul Weiss. None of the members of our Compensation Committee is an officer or employee of our company. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or Compensation Committee of any entity that has one or more executive officers serving on our board of directors or Compensation Committee.SEC rules require us to disclose any transaction or currently proposed transaction, in which we were a participantparty and in which any related person haswhich:•the amounts involved exceeded or will have a direct or indirect material interest involvingexceed the lesser of $120,000 or 1% of the average of our total assets as ofat year-end for the end of last two completed fiscal year. A related person is any executive officer, director, nominee for director, or holder of 5% or more of our common stock, or an immediate family member of any of those persons.The following is a description of transactions since January 1, 2017 to which we have been a party, in which the amount involved exceeded or will exceed $120,000,years; and in which •any of our directors (including director nominees), executive officers, or beneficial holders of more than 5% of any class of our capital stock,voting securities, or an affiliate orany immediate family member thereof,of, or person sharing the household with, any of these individuals or entities, had or will have a direct or indirect material interest, other than compensationinterest.PIPE Financing Subscription Agreement and other arrangements that are described inRegistration Rights AgreementIn connection with the section titled “Executive Compensation.”Sales and Purchasesexecution of SecuritiesConvertible Promissory Note Purchasethe Merger Agreement,In October 2016 and January 2017, Aerpio issued convertible promissory notes dated May 16, 2021, we entered into the Subscription Agreement (the “Subscription Agreement”) concurrently with the closing of the Merger for an aggregate principal amountpurchase price of approximately $3.8 million$155,000,000 (the “PIPE Financing”) with the purchasers named therein (the “PIPE Investors”), pursuant to 53 accredited investors. The Convertible Notes accrued interest at 8% per annum, compounded annually. All outstanding principal and interest under these Notes converted intowhich the PIPE Investors purchased an aggregate of 11,852,863 shares of Aerpio common stock immediately prior to the Merger, which were then converted intostock.The shares of our common stock issued pursuant to the Subscription Agreement were not registered under the Securities Act and were issued in reliance of the exemption provided in Section 4(a)(2) of the Securities Act. Pursuant to a Registration Rights Agreement entered into with the PIPE Investors in connection with the Subscription Agreement, we granted the PIPE Investors certain registration rights in connection with the PIPE Financing requiring us to file and maintain an effective resale registration statement with respect to the PIPE Shares for the benefit of the PIPE Investors.The PIPE Investors include entities that are related to Casey Castelein, M.D., and Anupam Dalal, M.D., who served on our Board prior to the Merger. The following table presents the number of shares purchased and the total purchase price paid by these entities.Investor Shares Purchased Total Purchase Price ($) Entities affiliated with Avoro (1) 1,911,752 25,000,000 Entities affiliated with Acuta (2) 1,529,402 20,000,000 Entities affiliated with KVP (3) 764,699 10,000,000 (1)Behzad Aghazadeh, Ph.D., is a 2.3336572:1 basis atmember of our Board and is a representative of Avoro.(2)Anupam Dalal, M.D., is a member of our Board and was a member of our Board prior to the effective timeMerger. Dr. Dalal is a representative of Acuta Capital.(3)Caley Castelein, M.D., is a member of our Board and was a member of our Board prior to the Merger. Dr. Castelein is a representative of KVP.The closing of the PIPE Financing was contingent upon, among other customary closing conditions, including the concurrent closing of the Merger. The table below sets forth the principal amountpurpose of the convertible promissory notes soldPIPE Financing was to our directors, executive officers or holders of more than 5% of ourraise additional capital stock, or an affiliate or immediate family member thereof.
Principal Price
for use by us following the Merger.(1)Consists of an aggregate principal price of (a) $262,606.51 by Kearny Venture Partners, L.P. (b) $5,356.15 by Kearny Venture Partners Entrepreneurs Fund, L.P., (c) $15,211.94 by Revelation TWHVP, LLC, and (d) $1,755.24 by TWHVP SPV, LLC. Caley Castelein, who is on our board of directors, is affiliated with each of these entities.(2)Consists of an aggregate principal price of $1,167,910.04 held by Novartis International Pharmaceutical Investment Ltd., an entity affiliated with Novartis Bioventures Ltd.(3)Consists of an aggregate principal price of (a) $200,994.68 by the Muneer A. Satter Revocable Trust for which Muneer A. Satter serves as trustee and, in such capacity, has sole voting and dispositive power over all such amount and (b) $271,429.91 by various other trusts and other entities for which Muneer A. Satter serves as trustee, investment advisor or manager and, in such capacity, has sole voting and dispositive power over all such amount.(4)Paul Weiss, who is on our board of directors, is affiliated with this entity.(5)Chau Khuong, who is on our board of directors, is affiliated with this entity.In March 2017,Securities Purchase Agreement and Registration Rights AgreementOn September 22, 2022, we entered into a SubscriptionSecurities Purchase Agreement pursuant(the “Purchase Agreement”) for a private placement (the “Private Placement”) with certain qualified institutional buyers, institutional accredited investors and certain executive officers and senior management (each, a “Purchaser” and collectively, the “Purchasers”). Pursuant to whichthe Purchase Agreement, we issuedagreed to sell to the Purchasers (i) 3,373,526 shares of the Company’s common stock, par value $0.0001 per share (the “Shares”), at a purchase price of $12.50 per Share, and sold 8,049,555(ii) 2,426,493 pre-funded warrants (the “Pre-Funded Warrants”) to purchase common stock (the “Warrant Shares” and together with the Shares and the Pre-Funded Warrants, the “Securities”), at a purchase price of $12.4999 per Pre-Funded Warrant. The Pre-Funded Warrants have an exercise price of $0.0001 per share of common stock, are immediately exercisable and remain exercisable until exercised in full. The holders of Pre-Funded Warrants may not exercise a Pre-Funded Warrant if the holder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of our common stock outstanding immediately after giving effect to such exercise. The holders of Pre-Funded Warrants may increase or decrease such percentages not in excess of 19.99% by providing at a price per shareleast 61 days’ prior notice to us.32The Private Placement closed in September 2022. The aggregate net proceeds for the Private Placement were approximately $72.2 million after deducting certain expenses incurred that were direct and incremental to the issuance of $5.00 for an aggregate principal amountthe Shares of approximately $40.2$0.3 million. The table below sets forthpurpose of the Private Placement was to fund working capital and other general corporate purposes.The Company and the Purchasers entered into a Registration Rights Agreement (the "Private Placement Registration Rights Agreement"), providing for the registration for resale of the securities sold under the Purchase Agreement, including the shares purchase byissuable upon the exercise of the Pre-Funded Warrants, that are not then registered on an effective registration statement, pursuant to a registration statement filed with the SEC. We filed a resale registration statement with the SEC on October 26, 2022, which such registration statement was declared effective on November 4, 2022.The Company has granted the Purchasers customary indemnification rights in connection with the Private Placement Registration Rights Agreement. The Purchasers have also granted the Company customary indemnification rights in connection with the Private Placement Registration Rights Agreement.The Purchasers include entities that are related to Casey Castelein, M.D., Anupam Dalal, M.D., and Behzad Aghazadeh, Ph.D., who serve on our directors,Board, as well as executive officers or holdersfor the year ended December 31, 2022, Brendan Delaney and Scott Giacobello. The following table presents the number of more than 5%shares purchased and the total purchase price paid by these entities and individuals.Investor Shares Purchased Total Purchase Price ($) Entities affiliated with Avoro (1) 1,260,000 15,750,000 Entities affiliated with Acuta (2) 320,000 4,000,000 Entities affiliated with KVP (3) 240,000 3,000,000 Brendan Delaney(4) 20,000 250,000 Scott Giacobello(5) 20,000 250,000 (1)Dr. Aghazadeh is a member of our capital stock, or an affiliate or immediate familyBoard and is a representative of Avoro.(2)Dr. Dalal is a member thereof.
Stock
Principal Price(1)Consists of (i) 392,005 shares held by Kearny Venture Partners, L.P. (“KVP”) and (b) 7,995 shares held by Kearny Venture Partners Entrepreneurs Fund, L.P. (“KVPEF”). KVP and KVPEF are affiliated with Caley Castelein, who is on our board of directors.(2)Consists of 1,120,000 shares held by Satter Medical Technology Partners, L.P. (“SMTP”). SMTP is affiliated with Muneer Satter, who is on our board of directors.(3)Paul Weiss, who is on our board of directors, is affiliated with this entity.(4)Chau Khuong, who is on our board of directors, is affiliated with this entity.EMPLOYMENT AGREEMENTSEach of our executive officersBoard and is employed with us under the termsa representative of their employment agreement or offer letter,Acuta Capital.(3)Dr. Castelein is a member of our Board and is a representative of KVP.(4)Mr. Delaney was our Chief Operating Officer from September 2021 until January 1, 2023, at which time he became our President and Chief Executive Officer and a member of our Board. Brendan resigned as applicable. For more information regarding these employment agreements for Messrs. Hoffman, Rogers, GardnerPresident and Pakola, see the section titled "Executive Compensation—Employment Agreements."LIMITATION OF LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS(5)Mr. Giacobello has been our Chief Financial Officer since November 2021 and has served as Interim President and Chief Executive Officer since March 2023.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us to indemnify each director and executive officer to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys’ fees, judgments, fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person’s services as a director or executive officer.AGREEMENTS WITH OUR STOCKHOLDERSOur registration rights We also maintain a general liability insurance policy, which covers certain liabilities of directors and officers of our Company arising out of claims based on acts or omissions in their capacities as directors or officers. We believe that these provisions and agreements are necessary to attract and retain qualified persons as directors and executive officers.Employment Agreements and Offer LettersEach of our executive officers is employed with us under the terms of their employment agreement or Registration Rights Agreement, provides certain holders ofoffer letter, as applicable, in each case approved by the Compensation Committee. For more information regarding these employment agreements for Dr. Desai, Mr. Delaney and Dr. Itri, our capital stock withnamed executive officers, see the right to demand that we file a registration statement, subject to certain limitations, and to request that their shares be covered by a registration statement that we are otherwise filing. These rights terminate for a holder upon the earlier of (a) such time as Rule 144 or another similar exemption under the Securities Act is available for the sale of all of such holder's shares without limitation during a three-month period without registration, and (b) the closing of (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power and outstanding stock immediately prior to such transaction do not own a majority of the outstanding voting power and outstanding stock or other equity interests of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, (iii) the sale of all or substantially all of the Company’s assets or property to an unrelated person, entity or group thereof acting in concert, or (iv) any other transaction in which the owners of the Company’s outstanding voting power immediately prior to such transactionsection titled “Executive Compensation—Employment Agreements.”
Other Transactionsdo not own at least a majority of the outstanding voting power of the Company or any successor entity immediately upon completion of the transaction other than as a result of the acquisition of securities directly from the Company.We have granted stock options to our executive officers. For a description of these stock options granted to such individuals, see the section titled “Executive Compensation.” We have also granted stock options to certain members of the board of directors,33Board and will do so in the future pursuant to our non-employee director compensation policy.Director Compensation Policy. For a description of these stock options, see "Executive Compensation."POLICIES AND PROCEDURES FOR RELATED PARTY TRANSACTIONSPolicies and Procedures for Related-Person TransactionsOur board of directorsBoard has adopted a written related-person transaction policy setting forth the policies and procedures for the review and approval or ratification of related-person transactions. This policy will cover, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, where the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. In reviewing and approving any such transactions, our Audit Committee is tasked to consider all relevant facts and circumstances, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in an arm’s-length transaction and the extent of the related person’s interest in the transaction. Furthermore, all related-person transactions with a majority stockholder requires a supermajority (66 2/3%) vote34PROPOSAL TWOADVISORY VOTE ON EXECUTIVE COMPENSATIONAs required by Section 14A of the directors then in office. AllExchange Act, we are asking our stockholders to cast an advisory vote to approve the compensation of the transactionsnamed executive officers identified in the 2022 Summary Compensation Table in the “Executive Compensation” section of this proxy statement. In connection with Proposal 2, we are also holding an advisory vote on the frequency of the stockholder vote on executive compensation as required by the Dodd-Frank Act. See “Proposal Three — Advisory Vote on the Frequency of an Advisory Vote on Executive Compensation.”Compensation Program and PhilosophyThe primary goal of our executive compensation program is to ensure that we hire and retain talented and experienced executive officers who are motivated to achieve or exceed our short-term and long-term corporate goals. Our compensation philosophy is team-oriented and our success is dependent on what our management team can accomplish together. Therefore, we seek to provide our non-CEO executive officers with comparable levels of base salary, bonuses, and annual equity awards that are based largely on overall company performance.In determining the form and amount of compensation payable to our executive officers, we are guided by the following objectives and principles:•Team-oriented approach to establishing compensation levels;•Compensation should relate to performance;•Equity awards help executive officers think like stockholders; and•Total compensation opportunities should be competitive.Our Board believes that our current executive compensation program has been effective at linking executive compensation to our performance and aligning the interests of our executive officers with those of our stockholders. We are asking our stockholders to indicate their support for the compensation of our named executive officers as described in this proxy statement by voting in favor of the following resolution:“RESOLVED, that the stockholders approve, on an advisory basis in a non-binding vote, the compensation of Aadi Bioscience, Inc. named executive officers as disclosed pursuant to Item 402 of Securities and Exchange Commission Regulation S-K, including the compensation tables and narrative disclosures set forth in the proxy statement relating to Aadi’s 2023 annual meeting of stockholders.”Required VoteThe affirmative “FOR” vote of a majority of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the proposal is required to approve, on an advisory basis, the compensation of the named executive officers identified in the 2022 Summary Compensation Table in the "Executive Compensation" section that occurred priorof the proxy statement (the "Say-on-Pay Vote"). You may vote “FOR,” “AGAINST,” or “ABSTAIN” on this proposal. Abstentions have the same effect as a vote against the proposal. Broker non-votes are not included in the tabulation of voting results on this proposal, and will not affect the outcome of voting on this proposal.Although this say-on-pay vote is advisory and, therefore, will not be binding on us, our compensation committee and our Board value the opinions of our stockholders. Accordingly, to the merger occurred priorextent there is a significant vote against the compensation of our named executive officers, we will consider our stockholders’ concerns, and the compensation committee will evaluate what actions may be necessary or appropriate to address those concerns.Recommendation of the BoardTHE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT. 35PROPOSAL THREEADVISORY VOTE ON THE FREQUENCY OF AN ADVISORYVOTE ON EXECUTIVE COMPENSATIONAs required by the Dodd-Frank Act, we also are asking our stockholders to provide their input with regard to the adoptionfrequency of future Say-on-Pay Votes, such as Proposal Two of this policy.Our board of directors will take into consideration the outcome of this vote in making a determination about the frequency of future Say-on-Pay Votes. However, because this vote is non-binding, our board may decide that it is in the best interests of our stockholders and the company to hold the Say-on-Pay Vote more or less frequently. In the future, we will propose an advisory vote on the frequency of the Say-on-Pay Vote at least once every six calendar years.After careful consideration, our board believes that the Say-on-Pay Vote should be held every year, and therefore our board recommends that you vote for a frequency of every "ONE YEAR" for future Say-on-Pay Votes.Our board believes that an annual Say-on-Pay Vote will facilitate more direct stockholder input about executive compensation. An annual Say-on-Pay Vote is consistent with our policy of reviewing our compensation program annually, as well as being accountable to our stockholders on corporate governance and executive compensation matters. We believe an annual vote would be the best governance practice for our company at this time.Required VoteThe alternative of every “ONE YEAR,” “TWO YEARS” or “THREE YEARS” that receives the highest number of votes from the holders of shares present in person or represented by proxy and entitled to vote thereon at the meeting will be considered the frequency preferred by stockholders. You may vote for “ONE YEAR,” for “TWO YEARS,” for “THREE YEARS” or “ABSTAIN.” Abstentions and broker non-votes will not affect the outcome of this proposal.Even though your vote is advisory and, therefore, will not be binding on Aadi, the Board and the compensation committee value the opinions of our stockholders and will consider our stockholders’ vote. Nonetheless, our Board may decide that it is in the best interests of our stockholders and Aadi to hold the Say-on-Pay Vote more or less frequently than the option voted by our stockholders.Recommendation of the BoardTHE BOARD RECOMMENDS THAT YOU VOTE FOR THE OPTION OF EVERY “ONE YEAR” AS THE FREQUENCY WITH WHICH STOCKHOLDERS ARE PROVIDED AN ADVISORY VOTE ON EXECUTIVE COMPENSATION. 36
PROPOSAL FOURRATIFICATION OF THE APPOINTMENT OFOUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMOur independent registered public accounting firm for the fiscal year ended December 31, 20172022 was Ernst & Young,BDO USA LLP, and wethe Audit Committee has appointed BDO USA LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023. We are asking you and other stockholders to ratify this appointment for the fiscal year ending December 31, 2018.The Audit Committee annually reviews the independent registered public accounting firm's independence, including reviewing all relationships between the independent registered public accounting firm and us and any disclosed relationships or services that may impact the objectivity and independence of the independent registered public accounting firm, and the independent registered public accounting firm's performance. As a matter of good corporate governance, the Board determined to submit to stockholders for ratification of the appointment of Ernst & Young,BDO USA LLP. A majority of the votes properly castvoting power of the shares present in person (including virtually) or represented by proxy at the Annual Meeting and entitled to vote thereon is required in order to ratify the appointment of Ernst & Young,BDO USA LLP. In the event that a majority of the votes properly castvoting power of the shares present in person (including virtually) or represented by proxy at the Annual Meeting and entitled to vote thereon do not ratify this appointment of Ernst & Young,BDO USA LLP, we will review our future appointment of Ernst & Young,BDO USA LLP.We expect that a representative of Ernst & Young,BDO USA LLP will attend the Annual Meeting and the representative will have an opportunity to make a statement if he or she so chooses. The representative will also be available to respond to appropriate questions from stockholders.Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting FirmWe have adopted a policy under which the Audit Committee must pre-approve all audit and permissible non-audit services to be provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval would generally be requested annually, with any pre-approval detailed as to the particular service, which must be classified in one of the categories of services listed below. The Audit Committee may also, on a case-by-case basis, pre-approve particular services that are not contained in the annual pre-approval request. In connection with this pre-approval policy, the Audit Committee also considers whether the categories of pre-approved services are consistent with the rules on accountant independence of the SEC and the Public Company Accounting Oversight Board.In addition, in the event time constraints require pre-approval prior to the Audit Committee's next scheduled meeting, the Audit Committee has authorized its Chairperson to pre-approve services. Engagements so pre-approved are to be reported to the Audit Committee at its next scheduled meeting.The Board preapproved all audit and non-audit services provided by BDO USA LLP during the years ended December 31, 2022 and 2021.Audit Fees and ServicesThe following table summarizes the fees of Ernst and Young LP,BDO USA LLP, our independent registered public accounting firm, for each of the last two fiscal years.(1)Fees represent amounts paid for Aerpio Therapeutics, Inc. 2016 audit.(2)There were no audit-related fees for fiscal years 2017 and 2016.(3)There were no tax fees for fiscal years 2017 and 2016.The Board preapproved all BDO USA LLP's fees in 2021 relate to fees for professional audit services provided by Ernst & Young LLP during fiscal years 2017 and 2016. There were no non-auditrendered to Private Aadi.Year Ended December 31, Fee Category: 2022 2021 Audit fees $ 530,513 $ 764,092 Audit-related fees — — Tax fees 86,174 74,726 All other fees — — Total Fees $ 616,687 $ 838,818 Audit FeesConsist of aggregate fees for professional services provided by Ernst & Young LLP during fiscal years 2017in connection with the annual audit of our financial statements, the review of our quarterly condensed financial statements, consultations on accounting matters directly related to the audit, and 2016.37Tax FeesConsist of aggregate fees for tax compliance, tax advice and tax planning services including the review and preparation of our federal and state income tax returns.Recommendation of the BoardTHE BOARD RECOMMENDS THAT YOU VOTE "FOR"THE BOARD RECOMMENDS THAT YOU VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF BDO USA LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2023. 38REPORT OF THE APPOINTMENT OF ERNST & YOUNG, LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2018.Change in AccountantsEffective atAUDIT COMMITTEEThis report is submitted by the effective timeAudit Committee of the Merger, LWBJ,Board. The Audit Committee consists of the three directors whose names appear below. None of the members of the Audit Committee is an officer or employee of the Company, and the Board has determined that each member of the Audit Committee is "independent" for Audit Committee purposes as that term is defined under Rule 10A-3 of the Exchange Act. Each member of the Audit Committee meets the requirements for financial literacy under the applicable rules and regulations of the SEC. The Board has designated Ms. Reeve as an "audit committee financial expert," as defined under the applicable rules of the SEC. The Audit Committee operates under a written charter adopted by the Board.The Audit Committee's general role is to assist the Board in monitoring our financial reporting process and related matters. Its specific responsibilities are set forth in its charter.The Audit Committee has reviewed our consolidated financial statements for 2022 and met with management, as well as with representatives of BDO USA LLP, or LWBJ, was dismissed asthe Company's independent registered public accounting firm, to discuss the consolidated financial statements. The Audit Committee also discussed with members of BDO USA LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”) and the Securities and Exchange Commission.The Audit Committee reviewed management's report on its assessment of the effectiveness of the Company's internal control over financial reporting. The Audit Committee meets with representatives of the independent registered public accounting firm, with and without management present, to discuss the results of their examinations, their evaluations of the company's internal control, including internal control over financial reporting and the overall quality of the Company's financial reporting.In addition, the Audit Committee received the written disclosures and the letter from BDO USA LLP required by applicable requirements of the PCAOB regarding the independent accountant's communications with the Audit Committee concerning independence and discussed with members of BDO USA LLP its independence.Based on these discussions, the consolidated financial statement review and other matters it deemed relevant, the Audit Committee recommended to the Board that the Company's audited theconsolidated financial statements of our Company. Effective as of the effective time of the Merger, the Board engaged Ernst & Young LLP, as the independent registered public accounting firm to audit the Company’s financial statementsfor 2022 be included in its Annual Report on Form 10-K for the fiscal year ending December 31, 2017.LWBJ’s audit report on our financial statements for the fiscal years ended December 31, 2015 and 2016 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.During the fiscal years ended December 31, 2015 and 2016 and the subsequent interim period through the date of LWBJ’s dismissal, there were no disagreements with LWBJ on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of LWBJ, would have caused it to make reference to the subject matter thereof in connection with its report.During the fiscal years ended December 31, 2015 and 2016 and the subsequent interim period through the date of LWBJ’s dismissal, neither the Company nor anyone acting on its behalf consulted Ernst & Young LLP regarding the application of accounting principles to a specified transaction, either completed or proposed or the type of audit opinion that might be rendered on the Company’s financial statements.Report of the Audit Committee of the Board of DirectorsAudit Committee Emma Reeve (Chairperson) Caley Castelein Richard Maroun April 28, 2023 The information contained in this Audit Committee report shall not be deemed to be (1) "soliciting material," (2) "filed" with the SEC, (3) subject to Regulations 14A or 14C of the Exchange Act, or (4) subject to the liabilities of Section 18 of the Exchange Act. No portion of this Audit Committee report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, through any general statement incorporating by reference in its entirety the proxy statement in which this report appears, except to the extent that AerpioAadi specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed filed under either the Securities Act or the Exchange Act.This report is submitted by the Audit Committee of the Board. The Audit Committee consists of the three directors whose names appear below. None of the members of the Audit Committee is an officer or employee of the Company, and the Board has determined that each member of the Audit Committee is "independent" for Audit Committee purposes as that term is defined under Rule 10A-3 of the Exchange Act. Each member of the Audit Committee meets the requirements for financial literacy under the applicable rules and regulations of the SEC. The Board has designated each of Mr. Prelack and Mr. Dugel as an "Audit Committee financial expert," as defined under the applicable rules of the SEC. The Audit Committee operates under a written charter adopted by the Board.The Audit Committee's general role is to assist the Board in monitoring our financial reporting process and related matters. Its specific responsibilities are set forth in its charter.The Audit Committee has reviewed our consolidated financial statements for 2017 and met with management, as well as with representatives of Ernst & Young, LLP, the Company's independent registered public accounting firm,39to discuss the consolidated financial statements. The Audit Committee also discussed with members of Ernst & Young, LLP the matters required to be discussed under Public Accounting Oversight Board Auditing Standard No. 1301 (Communications with the Audit Committee).The Audit Committee reviewed management's report on its assessment of the effectiveness of the Company's internal control over financial reporting. The Audit Committee meets with representatives of the independent registered public accounting firm, with and without management present, to discuss the results of their examinations, their evaluations of the company's internal control, including internal control over financial reporting and the overall quality of the Company's financial reporting.In addition, the Audit Committee received the written disclosures and the letter from Ernst & Young, LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the Audit Committee concerning independence, and discussed with members of Ernst & Young, LLP its independence.Based on these discussions, the consolidated financial statement review and other matters it deemed relevant, the Audit Committee recommended to the Board that the Company's audited consolidated financial statements for 2017 be included in its Annual Report on Form 10-K for fiscal year 2017.Audit CommitteeSteven Prelack (Chairperson)Pravin Dugel
Caley CasteleinAPPROVAL OF THE AMENDED AND RESTATED 2017 EMPLOYEE STOCK PURCHASE PLANOn December 14, 2017, the board of directors adopted, subject to the approval of our stockholders, the Aerpio Pharmaceuticals, Inc. Amended and Restated 2017 Employee Stock Purchase Plan (the “ESPP”). We believe that the adoption of the ESPP will benefit us by providing employees with an opportunity to acquire shares of our common stock and will enable us to attract, retain and motivate valued employees. Based solely on the closing price of our common stock reported on the OTC Market Group’s OTCQB Market on May 2, 2018, the maximum aggregate market value of the 300,000 shares of common stock that could potentially be issued under the ESPP as of the date it is approved by shareholders is $1,029,000.Summary of the Material Provisions of the ESPPThe following description of certain provisions of the ESPP is intended to be a summary only. The summary is qualified in its entirety by the full text of the ESPP, a copy of which is attached hereto as Appendix A and is incorporated herein by reference. It is our intention that the ESPP qualify as an “employee stock purchase plan” under Section 423 of the Code.Shares Subject to the Plan. An aggregate of 300,000 shares will be reserved and available for issuance under the ESPP, plus on January 1, 2019 and each January 1 thereafter through January 1, 2028, the number of shares reserved and available for issuance shall be cumulatively increased by the number of shares of stock equal to the least of (i) one percent (1%) of the number of shares of common stock issued and outstanding on the immediately preceding December 31, (ii) 350,000 shares of common stock or (iii) such lesser number of shares approved by the Compensation Committee. If our capital structure changes because of a stock dividend, stock split or similar event, the number of shares that can be issued under the ESPP will be appropriately adjusted.Plan Administration. The ESPP will be administered by the Compensation Committee, which will have full authority to make, administer and interpret such rules and regulations regarding the ESPP as it deems advisable. Eligibility. Any employee of the Company or its designated subsidiaries is eligible to participate in the ESPP so long as the employee has been employed for at least 30 days on the first day of the applicable offering period and customarily works at least 20 hours per week. No person who owns or holds, or as a result of participation in the ESPP would own or hold, common stock or options to purchase common stock, that together equal to 5% or more of total outstanding common stock is entitled to participate in the ESPP. No employee may exercise an option granted under the ESPP that permits the employee to purchase common stock of the Company having a value of more than $25,000 (determined using the fair market value of the stock at the time such option is granted) in any calendar year.Payroll Deductions; Participation. Participation in the ESPP is limited to eligible employees who authorize payroll deductions equal to a whole percentage of base pay to the ESPP. Employees may authorize payroll deductions, with a minimum of 1% of base pay and a maximum of 15% of base pay. There are currently approximately 24 employees who will be eligible to participate in the ESPP. Once an employee becomes a participant in the ESPP, that employee will automatically participate in successive offering periods, as described below, until such time as that employee withdraws from the ESPP, becomes ineligible to participate in the ESPP, or his or her employment ceases. Offering Periods. Unless otherwise determined by the Compensation Committee, each offering of common stock under the ESPP will be for a period of six months, which we refer to as an “offering period.” Unless otherwise determined by the Compensation Committee, each offering period under the ESPP will begin on the first business day occurring on or after each January 1 and July 1 and end on the last business day occurring on or before the following June 30 and December 31, respectively. Shares are purchased on the last business day of each offering period, with that day being referred to as an “exercise date.” The Compensation Committee may establish different offering periods or exercise dates under the ESPP.Exercise Price. On the first day of an offering period, we will grant to employees participating in that offering period an option to purchase shares of our common stock. On the exercise date of each offering period, the employee is deemed to have exercised the option, at the exercise price, to the extent of accumulated payroll deductions. The option exercise price is equal to the lesser of (i) 85% the fair market value per share of our common stock on the first day of the offering period or (ii) 85% of the fair market value per share of our common stock on the exercise date. The number of shares to be purchased with respect to any offering period will be the least of (a) the number of shares determined by dividing the participant’s balance in the plan account on the exercise date by the exercise price per share for the stock, (b) the number of shares of common stock determined by multiplying $2,083 by the number of full months in the offering period and dividing the result by the fair market value of our common stock on the offering date, and (c) such other lesser maximum number of shares as shall have been established by the administrator in advance of the offering.Subject to certain limitations, the number of shares of our common stock a participant purchases in each offering period is determined by dividing the total amount of payroll deductions withheld from the participant’s compensation during the offering period by the option exercise price. If an employee is no longer a participant on an exercise date, the employee’s option will be automatically terminated, and the amount of the employee’s accumulated payroll deductions will be refunded.Terms of Participation. Except as may be permitted by the Compensation Committee in advance of an offering, a participant may not increase or decrease the amount of his or her payroll deductions during any offering period but may increase or decrease his or her payroll deduction with respect to the next offering period by filing a new enrollment form within the period beginning 15 business days before the first day of such offering period and ending on the day prior to the first day of such offering period. A participant may withdraw from an offering period at any time without affecting his or her eligibility to participate in future offering periods. If a participant withdraws from an offering period, that participant may not again participate in the same offering period, but may enroll in subsequent offering periods. An employee’s withdrawal will be effective as of the business day following the employee’s delivery of written notice of withdrawal under the ESPP.Term; Amendments and Termination. The ESPP will continue until terminated by our board of directors. Our board of directors may, in its discretion, at any time, terminate or amend the ESPP. Upon termination of the ESPP, all amounts in the accounts of participating employees will be refunded.New Plan BenefitsSince participation in the ESPP is voluntary, the benefits or amounts that will be received by or allocated to any individual or group of individuals under the amended and restated ESPP in the future are not determinable.Summary of Federal Income Tax ConsequencesThe following is only a summary of the effect of the United States income tax laws and regulations upon an employee and us with respect to an employee’s participation in the ESPP. This summary does not purport to be a complete description of all federal tax implications of participation in the ESPP, nor does it discuss the income tax laws of any municipality, state or foreign country in which a participant may reside or otherwise be subject to tax.A participant in the ESPP recognizes no taxable income either as a result of participation in the ESPP or upon exercise of an option to purchase shares of our common stock under the terms of the ESPP.If a participant disposes of shares purchased upon exercise of an option granted under the ESPP within two years from the first day of the applicable offering period or within one year from the exercise date, which we refer to as a “disqualifying disposition,” the participant will realize ordinary income in the year of that disposition equal to the amount by which the fair market value of the shares on the date the shares were purchased exceeds the purchase price. The amount of ordinary income will be added to the participant’s basis in the shares, and any additional gain or resulting loss recognized on the disposition of the shares will be a capital gain or loss. A capital gain or loss will be long-term if the participant’s holding period is more than 12 months, or short-term if the participant’s holding period is 12 months or less.If the participant disposes of shares purchased upon exercise of an option granted under the ESPP at least two years after the first day of the applicable offering period and at least one year after the exercise date, the participant will realize ordinary income in the year of disposition equal to the lesser of (1) 15% of the fair market value of the common stock on the first day of the offering period in which the shares were purchased and (2) the excess of the amount actually received for the common stock over the amount paid. The amount of any ordinary income will be added to the participant’s basis in the shares, and any additional gain recognized upon the disposition after that basis adjustment will be a long-term capital gain. If the fair market value of the shares on the date of disposition is less than the exercise price, there will be no ordinary income and any loss recognized will be a long-term capital loss.We are generally entitled to a tax deduction in the year of a disqualifying disposition equal to the amount of ordinary income recognized by the participant as a result of that disposition. In all other cases, we are not allowed a deduction.THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF THE AMENDED AND RESTATED 2017 EMPLOYEE STOCK PURCHASE PLAN.The Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, the persons appointed in the accompanying proxyacting as proxies intend to vote the shares represented thereby in accordance with their best judgment on such matters, under applicable laws.HOUSEHOLDINGWe have adopted a procedure approved by the SEC called “householding,” under which we can deliver a single copy of the Notice of Internet Availability and, if applicable, the proxy statement and annual report, to multiple stockholders who share the same address unless we receive contrary instructions from one or more stockholders.This means that only one copy of our documents, including the annual report to stockholders and proxy statement, may have been sent to multiple stockholders in your household. We will promptly deliver a separate copy of either document upon written or oral request to Aadi Bioscience, Inc., 17383 Sunset Boulevard, Suite A250 Pacific Palisades, California 90272, Attention: Corporate Secretary, telephone: (424) 744-8055. If you want to receive separate copies of the proxy statement or annual report to stockholders in the future, or if you are receiving multiple copies and would like to receive only one copy per household, you may contact us at the above address and phone number. Street name stockholders may contact their broker, bank or other nominee to request information about householding.Stockholder CommunicationsThe Board provides to every securityholder the ability to communicate with the Board, as a whole, and with individual directors on the Board through an established process for securityholder communication. For a securityholder communication directed to the Board as a whole, securityholders may send such communication to the attention of the Company's Chair of the Board via U.S. Mail or Expedited Delivery Service to: Aadi Bioscience, Inc. 17383 Sunset Boulevard, Suite A250 Pacific Palisades, California 90272, Attn: Chair of the Board.For a securityholder communication directed to an individual director in his or her capacity as a member of the Board, securityholders may send such communication to the attention of the individual director via U.S. Mail or Expedited Delivery Service to: Aadi Bioscience, Inc., 17383 Sunset Boulevard, Suite A250 Pacific Palisades, California 90272, Attn: Caley Castelein, M.D.We will forward by U.S. Mail any such securityholder communication to each director, and the Chair of the Board in his or her capacity as a representative of the Board, to whom such securityholder communication is addressed to the address specified by each such director and the Chair of the Board, unless there are safety or security concerns that mitigate against further transmission.Communications from an officer or director of the Company and proposals submitted by securityholders to be included in the Company’s annual proxy statement, pursuant to Rule 14a-8 of the Exchange Act (and related communications) will not be viewed as a securityholder communication. Communications from an employee or agent of the Company will be viewed as securityholder communication only if such communications are made solely in such employee’s or agent’s capacity as a securityholder.Procedures for Submitting Stockholder ProposalsRequirements for Stockholder Proposals to be Brought Before the Annual Meeting. Our bylaws provide that, for nominations of persons for election to our Board or other proposals to be considered at an annual meeting of stockholders, a stockholder must give written notice to our Secretary at 9987 Carver Road, Cincinnati, Ohio 45242, not later than the close of business 90 days, nor earlier than the close of business 120 days, prior to the first anniversary of the date of the preceding year's annual meeting. However, the bylaws also provide that in the event there was no annual meeting in the preceding year or the date of the annual meeting is more than 30 days before or after such anniversary date, notice must be delivered on or before the 10th day following the day on which public announcement of the date of such meeting is first made.As to any proposal other than the nomination of a director, the stockholder must be of record at the time the notice is made and state (i) as to each proposal that the stockholder seeks to bring before the meeting, a brief description of such proposal, the reasons for making the proposal at the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the bylaws of the Company, the language of the proposed amendment) and any material interest that the stockholder has in the proposal; and (ii) (A) the name and address of the stockholder giving the notice on whose behalf the proposal is made, (B) the class (and, if applicable, series) and number of shares of stock of the Company that are, directly or indirectly, owned beneficially or of record by the stockholder, (C) any option, warrant, convertible security, stock appreciation right or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class (or, if applicable, series) of shares of stock of the Company or with a value derived in whole or in part from the value of any class (or, if applicable, series) of shares of stock of the Company, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Company or otherwise (each, a “Derivative Instrument”) directly or indirectly owned beneficially or of record by such stockholder and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of stock of the Company of the stockholder, (D) any proxy, contract, arrangement, understanding or relationship pursuant to which such stockholder has a right to vote any securities of the Company, (E) any proportionate interest in shares of the Company or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder is a general partner or beneficially owns, directly or indirectly, an interest in a general partner, (F) any performance-related fees (other than an asset-based fee) that such stockholder is entitled to, based on any increase or decrease in the value of the shares of stock of the Company or Derivative Instruments, (G) any other information relating to such stockholder, if any, required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in an election contest pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations of the Securities and Exchange Commission thereunder, (H) a representation that the stockholder is a holder of record of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business, (I) a certification as to whether or not the stockholder has complied with all applicable federal, state and other legal requirements in connection with the stockholder’s acquisition of shares of capital stock or other securities of the Company and the stockholder’s acts or omissions as a stockholder (or beneficial owner of securities) of the Company, and (J) whether the stockholder intends to deliver a proxy statement and form of proxy to holders of at least the percentage of the Company’s voting shares required under applicable law to carry the proposal. The information required to be included in a notice shall be provided as of the date of such notice. The information required to be included in a notice shall not include any ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee who is directed to prepare and submit the notice on behalf of a beneficial owner of the shares held of record by such broker, dealer, commercial bank, trust company or other nominee and who is not otherwise affiliated or associated with such beneficial owner.As to proposals regarding the nomination of members of the board, any nomination must be made by a stockholder of record at the time the notice is made and state (i) as to each nominee that the stockholder proposes for election or reelection as a director, (A) all information relating to such nominee that would be required to be disclosed in solicitations of proxies for the election of such nominee as a director pursuant to Regulation 14A under theExchange Act and such nominee’s written consent to serve as a director if elected, and (B) a description of all direct and indirect compensation and other material monetary arrangements, agreements or understandings during the past three years, and any other material relationship, if any, between or concerning such stockholder, or any of their respective affiliates or associates, on the one hand, and the proposed nominee or any of his or her affiliates or associates, on the other hand; and (ii) (A) the name and address of the stockholder giving the notice on whose behalf the nomination is made, (B) the class (and, if applicable, series) and number of shares of stock of the Company that are, directly or indirectly, owned beneficially or of record by the stockholder, (C) any option, warrant, convertible security, stock appreciation right or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class (or, if applicable, series) of shares of stock of the Company or a Derivative Instrument directly or indirectly owned beneficially or of record by such stockholder and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of stock of the Company of the stockholder, (D) any proxy, contract, arrangement, understanding or relationship pursuant to which such stockholder has a right to vote any securities of the Company, (E) any proportionate interest in shares of the Company or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder is a general partner or beneficially owns, directly or indirectly, an interest in a general partner, (F) any performance-related fees (other than an asset-based fee) that such stockholder is entitled to based on any increase or decrease in the value of the shares of stock of the Company or Derivative Instruments, (G) any other information relating to such stockholder, if any, required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies for the election of directors in an election contest pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations of the Securities and Exchange Commission thereunder, (H) a representation that the stockholder is a holder of record of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such nomination, (I) a certification as to whether or not the stockholder has complied with all applicable federal, state and other legal requirements in connection with the stockholder’s acquisition of shares of capital stock or other securities of the Company and the stockholder’s acts or omissions as a stockholder (or beneficial owner of securities) of the Company, and (J) whether the stockholder intends to deliver a proxy statement and form of proxy to holders of a sufficient number of holders of the Company’s voting shares reasonably believed by such stockholder to be sufficient to elect such nominee or nominees or otherwise to solicit proxies or votes from stockholders in support of such nomination. The Company may require any proposed nominee to furnish such other information as may be reasonably requested by the Company to determine the eligibility of the proposed nominee to serve as an independent director of the Company or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of the nominee. The information required to be included in a notice shall be provided as of the date of such notice. The information required to be included in a notice shall not include any ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee who is directed to prepare and submit the notice on behalf of a beneficial owner of the shares held of record by such broker, dealer, commercial bank, trust company or other nominee and who is not otherwise affiliated or associated with such beneficial owner.The advance notice requirements for the Annual Meeting follows: a stockholder's notice shall be timely if delivered to our Secretary at the address set forth above not later than the close of business 90 days, nor earlier than the close of business 120 days, prior to the first anniversary of the date of the preceding year’s annual meeting.Materials. In addition toMaterialsSeparate from the requirements statedprocess described above, any stockholder who wishes to submit a proposal for inclusion in our proxy materials must comply with Rule 14a-8 promulgated under the Exchange Act. For such proposals to be included in our proxy materials relating to our 20192024 annual meeting of stockholders, all applicable requirements of Rule 14a-8 must be satisfied and we must receive such proposals no later than January 15, 2019.December 28, 2023. Such proposals must be delivered to our Secretary, c/o Aerpio Pharmaceuticals,Aadi Bioscience, Inc., 9987 Carver Road, Cincinnati, Ohio 45242.
Requirements for Stockholder Proposals to be Brought Before the Annual MeetingAERPIO PHARMACEUTICALS, INC.AMENDED AND RESTATED 2017 EMPLOYEE STOCK PURCHASE PLANThe purposeIf a stockholder wishes to propose a nomination of persons for election to our Board or present a proposal to be considered at an annual meeting of stockholders but does not wish to have the Aerpio Pharmaceuticals, Inc. Amendedproposal considered for inclusion in our proxy materials, our bylaws establish an advance notice procedure for such nominations and Restated 2017 Employee Stock Purchase Plan (the “Plan”) isproposals. Our bylaws provide that a stockholder must give written notice to provide eligible employees of Aerpio Pharmaceuticals, Inc. (the “Company”) and each Designated Subsidiary (as defined in Section 11) with opportunities to purchase shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”). 300,000 shares of Common Stock in the aggregate have been approved and reserved for this purpose, plus on January 1, 2019, and each January 1 thereafter through January 1, 2028, the number of shares of Common Stock reserved and available for issuance under the Plan shall be cumulatively increased by the least of (i) one percent (1%) of the number of shares of Common Stock issued and outstandingour Secretary at 17383 Sunset Boulevard, Suite A250 Pacific Palisades, California 90272, not later than 5:00 p.m., Eastern time on the immediately preceding December 31st, (ii) 350,000 shares or (iii) such lesser number of shares of Common Stock as determined by the Board (as defined below). The Plan is intended to constitute an “employee stock purchase plan” within the meaning of Section 423(b) of the Internal Revenue Code of 1986, as amended (the “Code”), and shall be interpreted in accordance with that intent.1. Administration. The Plan will be administered by the person or persons (the “Administrator”) appointed by the Company’s Board of Directors (the “Board”) for such purpose. The Administrator has authority at any time to: (i) adopt, alter and repeal such rules, guidelines and practices for the administration of the Plan and for its own acts and proceedings as it shall deem advisable; (ii) interpret the terms and provisions of the Plan; (iii) make all determinations it deems advisable for the administration of the Plan; (iv) decide all disputes arising in connection with the Plan; and (v) otherwise supervise the administration of the Plan. All interpretations and decisions of the Administrator shall be binding on all persons, including the Company and the Participants. No member of the Board or individual exercising administrative authority with respect90Plan shall be liable for any action or determination made in good faith with respect to the Plan or any option granted hereunder.2. Offerings. The Company will make one or more offerings to eligible employees to purchase Common Stock under the Plan (“Offerings”). Unless otherwise determined by the Administrator, an Offering will begin on the first business day occurring on or after each January 1 and July 1 and will end on the last business day occurring on or before the following June 30 and December 31, respectively. The Administrator may, in its discretion, designate a different period for any Offering, provided that no Offering shall exceed one year in duration or overlap any other Offering.3. Eligibility. All individuals classified as employees on the payroll records of the Company and each Designated Subsidiary are eligible to participate in any one or more of the Offerings under the Plan, provided that as of the first anniversary of the preceding year’s40annual meeting, nor earlier than 8:00 a.m., Eastern time on the 120th day prior to the day of the applicable Offering (the “Offering Date”) they are customarily employed by the Company or a Designated Subsidiary for more than 20 hours a week and have completed at least 30 days of employment. Notwithstanding any other provision herein, individuals who are not contemporaneously classified as employeesfirst anniversary of the Company or a Designated Subsidiary for purposes of the Company’s or applicable Designated Subsidiary’s payroll system are not considered to be eligible employees of the Company or any Designated Subsidiary and shall not be eligible to participate in the Plan. In the event any such individuals are reclassified as employees of the Company or a Designated Subsidiary for any purpose, including, without limitation, common law or statutory employees, by any action of any third party, including, without limitation, any government agency, or as a result of any private lawsuit, action or administrative proceeding, such individuals shall, notwithstanding such reclassification, remain ineligible for participation. Notwithstanding the foregoing, the exclusive means for individuals who are not contemporaneously classified as employees of the Company or a Designated Subsidiary on the Company’s or Designated Subsidiary’s payroll system to become eligible to participate in this Plan is through an amendment to this Plan, duly executed by the Company, which specifically renders such individuals eligible to participate herein.4. Participation. (a) An eligible employee who is not a Participant in any prior Offering may participate in a subsequent Offering by submitting an enrollment form to his or her appropriate payroll location at least 15 business days before the Offering Date (or by such other deadline as shall be established by the Administrator for the Offering).(b) The enrollment form will (a) state a whole percentage or amount to be deducted from an eligible employee’s Compensation (as defined in Section 11) per pay period, (b) authorize the purchase of Common Stock in each Offering in accordance with the terms of the Plan and (c) specify the exact name or names in which shares of Common Stock purchased for such individual are to be issued pursuant to Section 10. An employee who does not enroll in accordance with these procedures will be deemed to have waived the right to participate. Unless a Participant files a new enrollment form or withdraws from the Plan, such Participant’s deductions and purchases will continue at the same percentage or amount of Compensation for future Offerings, provided he or she remains eligible. (c) Notwithstanding the foregoing, participation in the Plan will neither be permitted nor be denied contrary to the requirements of the Code.5. Employee Contributions. Each eligible employee may authorize payroll deductions at a minimum of 1 percent up to a maximum of 15 percent of such employee’s Compensation for each pay period. The Company will maintain book accounts showing the amount of payroll deductions made by each Participant for each Offering. No interest will accrue or be paid on payroll deductions.6. Deduction Changes. Except as may be determined by the Administrator in advance of an Offering, a Participant may not increase or decrease his or her payroll deduction during any Offering, but may increase or decrease his or her payroll deduction with respect to the next Offering (subject to the limitations of Section 5) by filing a new enrollment form at least 15 business days before the next Offering Date (or by such other deadline as shall be established by the Administrator for the Offering). The Administrator may, in advance of any Offering, establish rules permitting a Participant to increase, decrease or terminate his or her payroll deduction during an Offering.7. Withdrawal. A Participant may withdraw from participation in the Plan by delivering a written notice of withdrawal to his or her appropriate payroll location. The Participant’s withdrawal will be effective as of the next business day. Following a Participant’s withdrawal, the Company will promptly refund such individual’s entire account balance under the Plan to him or her (after payment for any Common Stock purchased before the effective date of withdrawal). Partial withdrawals are not permitted. Such an employee may not begin participation again during the remainder of the Offering, but may enroll in a subsequent Offering in accordance with Section 4.8. Grant of Options. On each Offering Date, the Company will grant to each eligible employee who is then a Participant in the Plan an option (“Option”) to purchase on the last day of such Offering (the “Exercise Date”), at the Option Price hereinafter provided for, the lowest of (a) a number of shares of Common Stock determined by dividing such Participant’s accumulated payroll deductions on such Exercise Date by the lower of (i) 85 percent of the Fair Market Value of the Common Stock on the Offering Date, or (ii) 85 percent of the Fair Market Value of the Common Stock on the Exercise Date, (b) a number of shares of Common Stock determined by multiplying $2,083 by the number of full months in such Offering and dividing the result by the Fair Market Value of the Common Stock on the Offering Date, or (c) such other lesser maximum number of shares as shall have been established by the Administrator in advance of the Offering; provided, however, that such Option shall be subject to the limitations set forth below. Each Participant’s Option shall be exercisable only to the extent of such Participant’s accumulated payroll deductions on the Exercise Date. The purchase price for each share purchased under each Option (the “Option Price”) will be 85 percent of the Fair Market Value of the Common Stock on the Offering Date or the Exercise Date, whichever is less.Notwithstanding the foregoing, no Participant may be granted an option hereunder if such Participant, immediately after the option was granted, would be treated as owning stock possessing 5 percent or more of the total combined voting power or value of all classes of stock of the Company or any Parent or Subsidiary (as defined in Section 11). For purposes of the preceding sentence,year's annual meeting. The written notice must contain the attribution rulesinformation specified in our bylaws. To be timely for our 2024 annual meeting of Section 424(d) ofstockholders, our Secretary must receive the Code shall applynotice at the above address:•not earlier than 8:00 a.m., Eastern time, on February 15, 2024; and•no later than 5:00 p.m., Eastern time, on March 16, 2024However, the bylaws also provide that in determining the stock ownership of a Participant, and all stock which the Participant has a contractual right topurchase shall be treated as stock owned by the Participant. In addition,event there was no Participant may be granted an Option which permits his or her rights to purchase stock under the Plan, and any other employee stock purchase plan of the Company and its Parents and Subsidiaries, to accrue at a rate which exceeds $25,000 of the fair market value of such stock (determined on the option grant date or dates) for each calendar year in which the Option is outstanding at any time. The purpose of the limitationannual meeting in the preceding sentence is to comply with Section 423(b)(8) of the Code and shall be applied taking Options into account in the order in which they were granted.9. Exercise of Option and Purchase of Shares. Each employee who continues to be a Participant in the Plan on the Exercise Date shall be deemed to have exercised hisyear or her Option on such date and shall acquire from the Company such number of whole shares of Common Stock reserved for the purpose of the Plan as his or her accumulated payroll deductions on such date will purchase at the Option Price, subject to any other limitations contained in the Plan. Any amount remaining in a Participant’s account at the end of an Offering solely by reason of the inability to purchase a fractional share will be carried forward to the next Offering; any other balance remaining in a Participant’s account at the end of an Offering will be refunded to the Participant promptly.10. Issuance of Certificates. Certificates representing shares of Common Stock purchased under the Plan may be issued only in the name of the employee, in the name of the employee and another person of legal age as joint tenants with rights of survivorship, or in the name of a broker authorized by the employee to be his, her or their, nominee for such purpose.11. Definitions.The term “Compensation” means the amount of base pay, prior to salary reduction pursuant to Sections 125, 132(f) or 401(k) of the Code, but excluding overtime, commissions, incentive or bonus awards, allowances and reimbursements for expenses such as relocation allowances or travel expenses, income or gains on the exercise of Company stock options, and similar items.The term “Designated Subsidiary” means any present or future Subsidiary (as defined below) that has been designated by the Board to participate in the Plan. The Board may so designate any Subsidiary, or revoke any such designation, at any time and from time to time, either before or after the Plan is approved by the stockholders. The current list of Designated Subsidiaries is attached hereto as Appendix A.The term “Fair Market Value of the Common Stock” on any given date means the fair market value of the Common Stock determined in good faith by the Administrator; provided, however, that if the Common Stock is admitted to quotation on the National Association of Securities Dealers Automated Quotation System (“NASDAQ”), NASDAQ Global Market or another national securities exchange, the determination shall be made by reference to the closing price on such date. If there is no closing price for such date, the determination shall be made by reference to the last date preceding such date for which there is a closing price.The term “Parent” means a “parent corporation” with respect to the Company, as defined in Section 424(e) of the Code.The term “Participant” means an individual who is eligible as determined in Section 3 and who has complied with the provisions of Section 4.The term “Subsidiary” means a “subsidiary corporation” with respect to the Company, as defined in Section 424(f) of the Code.12. Rights on Termination of Employment. If a Participant’s employment terminates for any reason before the Exercise Date for any Offering, no payroll deduction will be taken from any pay due and owing to the Participant and the balance in the Participant’s account will be paid to such Participant or, in the case of such Participant’s death, to his or her designated beneficiary as if such Participant had withdrawn from the Plan under Section 7. An employee will be deemed to have terminated employment, for this purpose, if the corporation that employs him or her, having been a Designated Subsidiary, ceases to be a Subsidiary, or if the employee is transferred to any corporation other than the Company or a Designated Subsidiary. An employee will not be deemed to haveterminated employment for this purpose, if the employee is on an approved leave of absence for military service or sickness or for any other purpose approved by the Company, if the employee’s right to reemployment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Administrator otherwise provides in writing.13. Special Rules. Notwithstanding anything herein to the contrary, the Administrator may adopt special rules applicable to the employees of a particular Designated Subsidiary, whenever the Administrator determines that such rules are necessary or appropriate for the implementation of the Plan in a jurisdiction where such Designated Subsidiary has employees; provided that such rules are consistent with the requirements of Section 423(b) of the Code. Any special rules established pursuant to this Section 13 shall, to the extent possible, result in the employees subject to such rules having substantially the same rights as other Participants in the Plan.14. Optionees Not Stockholders. Neither the granting of an Option to a Participant nor the deductions from his or her pay shall constitute such Participant a holder of the shares of Common Stock covered by an Option under the Plan until such shares have been purchased by and issued to him or her.15. Rights Not Transferable. Rights under the Plan are not transferable by a Participant other than by will or the laws of descent and distribution, and are exercisable during the Participant’s lifetime only by the Participant.16. Application of Funds. All funds received or held by the Company under the Plan may be combined with other corporate funds and may be used for any corporate purpose.17. Adjustment in Case of Changes Affecting Common Stock. In the event of a subdivision of outstanding shares of Common Stock, the payment of a dividend in Common Stock or any other change affecting the Common Stock, the number of shares approved for the Plan and the share limitation set forth in Section 8 shall be equitably or proportionately adjusted to give proper effect to such event.18. Amendment of the Plan. The Board may at any time and from time to time amend the Plan in any respect, except that without the approval within 12 months of such Board action by the stockholders, no amendment shall be made increasing the number of shares approved for the Plan or making any other change that would require stockholder approval in order for the Plan, as amended, to qualify as an “employee stock purchase plan” under Section 423(b) of the Code.19. Insufficient Shares. If the total number of shares of Common Stock that would otherwise be purchased on any Exercise Date plus the number of shares purchased under previous Offerings under the Plan exceeds the maximum number of shares issuable under the Plan, the shares then available shall be apportioned among Participants in proportion to the amount of payroll deductions accumulated on behalf of each Participant that would otherwise be used to purchase Common Stock on such Exercise Date.20. Termination of the Plan. The Plan may be terminated at any time by the Board. Upon termination of the Plan, all amounts in the accounts of Participants shall be promptly refunded.21. Governmental Regulations. The Company’s obligation to sell and deliver Common Stock under the Plan is subject to obtaining all governmental approvals required in connection with the authorization, issuance, or sale of such stock.22. Governing Law. This Plan and all Options and actions taken thereunder shall be governed by, and construed in accordance with, the laws of the State of Delaware, applied without regard to conflict of law principles.23. Issuance of Shares. Shares may be issued upon exercise of an Option from authorized but unissued Common Stock, from shares held in the treasury of the Company, or from any other proper source.24. Tax Withholding. Participation in the Plan is subject to any minimum required tax withholding on income of the Participant in connection with the Plan. Each Participant agrees, by entering the Plan, that the Company and its Subsidiaries shall have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant, including shares issuable under the Plan.25. Notification Upon Sale of Shares. Each Participant agrees, by entering the Plan, to give the Company prompt notice of any disposition of shares purchased under the Plan where such disposition occurs within two years after the date of grantthe annual meeting has been changed by more than 25 days from the first anniversary of the Option pursuantpreceding year’s annual meeting, notice must be delivered no earlier than 8:00 a.m., Eastern time, on the 120which such shares were purchased or within one year after the date such shares were purchased.26. Effective Dateday of the annual meeting and Approval of Shareholders. The Plan shall take effectno later than 5:00 p.m., Eastern time, on the later of the 90th day prior to the day of the annual meeting or, if the first public announcement of the date itof such annual meeting is adoptedless than 100 days prior to the date of such annual meeting, the 10th day following the day on which public announcement of the date of the annual meeting was first made by the Board and the date it is approved by the holdersCompany.If a stockholder who has notified us of his, her or its intention to present a majority of the votes castproposal at aan annual meeting of stockholders does not appear to present his, her or its proposal at which a quorum is present or by written consent of the stockholders.APPENDIX ADesignated SubsidiariesAerpio Therapeutics LLCANNUAL MEETING OF SHAREHOLDERS OF AERPIO PHARMACEUTICALS, INC. June 20, 2018 PROXY VOTING INSTRUCTIONS INTERNET - Access “www.voteproxy.com” and follow the on-screen instructions or scan the QR code with your smartphone. Have your proxy card available when you access the web page. TELEPHONE - Call toll-free 1-800-PROXIES (1-800-776-9437) in the United States or 1-718-921-8500 from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy card available when you call. Vote online/phone until 11:59 PM EST the day before the meeting. MAIL - Sign, date and mail your proxy card in the envelope provided as soon as possible. IN PERSON - You may vote your shares in person by attending the Annual Meeting. GO GREEN - e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.astfinancial.com to enjoy online access. COMPANY NUMBER ACCOUNT NUMBER NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The Notice of Meeting, proxy statement and proxy card are available at http://www.astproxyportal.com/ast/21404/ Please detach along perforated line and mail in the envelope provided IF yousuch annual meeting, then we are not voting via telephone orrequired to present the Internet. 20330300000000001000 2 062018 THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND "FOR" PROPOSALS 2 AND 3. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x 1. To elect three Class I directors to hold office until the 2021proposal for a vote at such annual meeting of stockholders: FOR ALL NOMINEES WITHHOLD AUTHORITY FOR ALL NOMINEES: FOR ALL NOMINEES EXCEPT (See instructions below) NOMINEES: Cheryl Cohen Caley Castelein Stephen Hoffman INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: 2. Ratification of appointment of Ernst & Young, LLP as Aerpio's independent registered accounting firm for the fiscal year ending FOR AGAINST ABSTAIN December 31, 2018. FOR AGAINST ABSTAIN To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. 3. Approval of the Amended and Restated 2017 Employee Stock Purchase Plan. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting. This proxy when properly executed will be voted as directed herein by the undersigned shareholder. If no direction is made, this proxy will be voted FOR ALL NOMINEES in Proposal 1 and FOR Proposal 2 and Proposal 3. MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING. Signature of Shareholder Date: Signature of Shareholder Date: Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.41ANNUAL MEETING OF SHAREHOLDERS OF AERPIO PHARMACEUTICALS, INC. June 20, 2018 GO GREEN e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.astfinancial.com to enjoy online access. NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The Notice of Meeting, proxy statement and proxy card are available at http://www.astproxyportal.com/ast/21404/ Please sign, date and mail your proxy card in the envelope provided as soon as possible. Please detach along perforated line and mail in the envelope provided. 20330300000000001000 2 062018 THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND "FOR" PROPOSALS 2 AND 3. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x 1. To elect three Class I directors to hold office until the 2021 annual meeting of stockholders: FOR ALL NOMINEES WITHHOLD AUTHORITY FOR ALL NOMINEES FOR ALL EXCEPT (See instructions below) NOMINEES: Cheryl Cohen Caley Castelein Stephen Hoffman INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. 2. Ratification of appointment of Ernst & Young, LLP as Aerpio's independent registered accounting firm for the fiscal year ending December 31, 2018. FOR AGAINST ABSTAIN 3. Approval of the Amended and Restated 2017 Employee Stock Purchase Plan. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting. This proxy when properly executed will be voted as directed herein by the undersigned shareholder. If no direction is made, this proxy will be voted FOR ALL NOMINEES in Proposal 1 and FOR Proposal 2 and Proposal 3. MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING. Signature of Shareholder Date: Signature of Shareholder Date: Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.0 AERPIO PHARMACEUTICALS, INC. Proxy for Annual Meeting of Shareholders on June 20, 2018 Solicited on Behalf of the Board of Directors. The undersigned hereby appoints Stephen Hoffman, Michael Rogers and Joseph Gardner, and each of them, with full power of substitution and power to act alone, as proxies to vote all the shares of Common Stock which the undersigned would be entitled to vote if personally present and acting at the Annual Meeting of Shareholders of Aerpio Pharmaceuticals, Inc. to be held June 20, 2018 at 620 Eighth Avenue, New York, NY 10018, and at any adjournments or postponements thereof, as follows (Continued and to be signed on the reverse side.) 1.1 1447547
