Form 4: Day One Bio CEO Options Repriced to $8.99

Day One Biopharmaceuticals' CEO, Jeremy Bender, had his stock options repriced to $8.99, aligning with the closing market price on the effective date.

Summary

• Jeremy Bender, Chief Executive Officer and Director of Day One Biopharmaceuticals, Inc. (DAWN), reported changes in his beneficial ownership of derivative securities.
• The company's Board of Directors approved an option repricing on October 7, 2025, which became effective on November 6, 2025.
• Existing stock options with exercise prices of $16, $14.26, $23.41, $14.44, and $11.87 were effectively disposed of.
• New stock options were acquired with a uniform exercise price of $8.99, which was the closing price on Nasdaq as of the effective date.
• A 'Retention Period' is required for the Reporting Person to exercise the repriced options at the new exercise price, lasting until the 12-month anniversary of the effective date or a Corporate Transaction, whichever is earliest.
• The repricing transactions were exempt pursuant to Rule 16b-6(d) and Rule 16b-3 of the Exchange Act.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative from a pure shareholder perspective due to the repricing of options, which often signals past underperformance and can be perceived as dilutive. However, it carries a positive aspect for executive retention and motivation, which is crucial for the company's future, leading to a balanced but cautious assessment.

Positives

• The repricing of options to a lower exercise price of $8.99 may increase the incentive and motivation for the CEO, Jeremy Bender, by making the options more 'in-the-money' or closer to it.
• The new exercise price is aligned with the closing market price on the effective date, suggesting a market-based valuation for the repriced options.
• The 'Retention Period' condition ties the CEO's ability to fully benefit from the repriced options to continued service, potentially enhancing executive retention for at least 12 months or until a corporate transaction.

Negatives

• Option repricing, especially when options are 'underwater' (exercise price higher than current market price), can be viewed negatively by existing shareholders as it effectively rewards management for past stock price underperformance.
• Repricing can lead to a perception of dilution of shareholder value, as it grants executives more favorable terms on their equity awards without necessarily creating new value for shareholders.
• The benefit to the CEO from a significantly lower exercise price may not be directly correlated with improved company performance in the immediate term, potentially raising questions about executive compensation fairness.

Risks

• The 'Retention Period' for the repriced options, while designed for retention, highlights the risk of executive departure if not for such incentives, tying the CEO to the company for a minimum of 12 months or until a Corporate Transaction.
• Shareholder dissatisfaction with executive compensation practices, particularly option repricing, could lead to negative sentiment or proxy voting issues.

Future Outlook

The repricing of options, coupled with a 'Retention Period' requirement, indicates a strategic move to incentivize and retain the Chief Executive Officer for at least the next 12 months or until a significant corporate transaction, aligning executive compensation with future performance and company stability.

Management Comments

• No direct quotes from management were provided in this filing.

Industry Context

Option repricing is a mechanism sometimes employed by companies, particularly in sectors like biotechnology where stock volatility can be high, to re-incentivize executives when previously granted options become 'underwater' due to market declines. This practice aims to retain key talent and realign their incentives with future stock price appreciation, although it can be controversial among shareholders.

Comparison to Industry Standards

• Not enough information in this filing to provide a detailed comparison to industry standards regarding the frequency, terms, or specific triggers for option repricing across comparable companies or projects.

Corporate Governance

Related Party Transactions

• The repricing of stock options for Jeremy Bender, the Chief Executive Officer and a Director, constitutes a related party transaction as it involves compensation arrangements between the company and a key executive.

Stakeholder Impact

• Shareholders: Potential negative impact due to the perception of rewarding past underperformance and possible dilution from more 'in-the-money' options. However, it could also be seen as a necessary step to retain key leadership.
• Employees (CEO): Jeremy Bender directly benefits from the repricing, which enhances the value of his equity compensation and provides a stronger incentive for continued service and performance.

Next Steps

• Jeremy Bender is required to remain in service with Day One Biopharmaceuticals through the 'Retention Period' to exercise the repriced options at the new $8.99 exercise price. This period ends upon the earliest of the 12-month anniversary of November 6, 2025, or a Corporate Transaction.

Key Dates

Keywords

Day One Biopharmaceuticals, DAWN, Jeremy Bender, stock options, option repricing, executive compensation, Form 4, beneficial ownership, corporate governance