Form 4: Day One Bio Director's Options Repriced to $8.99

Day One Biopharmaceuticals' Director John A. Josey had 162,716 stock options repriced to an exercise price of $8.99, contingent on continued service through November 2026.

Summary

• Director John A. Josey's stock options for Day One Biopharmaceuticals, Inc. (DAWN) were repriced on November 6, 2025, to a new exercise price of $8.99 per share.
• The repricing affects a total of 162,716 common stock options, which previously had higher exercise prices ranging from $12.69 to $16.29.
• The Issuer's Board of Directors approved this option repricing on October 7, 2025.
• To exercise the repriced options at the new $8.99 price, the Reporting Person is required to remain in service with the Issuer through a 'Retention Period'.
• The Retention Period commences on the effective date (November 6, 2025) and ends upon the earliest of (i) the 12-month anniversary of the effective date (November 6, 2026) or (ii) a Corporate Transaction.
• All other terms of the options remain unchanged, and the options are fully vested.
• The transactions were exempt pursuant to Rule 16b-6(d) and Rule 16b-3 of the Exchange Act.

Sentiment

Score: 6

Explanation: The repricing is a positive for the director, serving as a retention incentive for the company. It's a neutral event for the company's immediate financial health but carries potential future dilution. The future-dated nature of the transaction, as reported, is unusual but does not inherently change the sentiment of the event itself.

Positives

• Director John A. Josey benefits from a significantly lower exercise price of $8.99 for 162,716 stock options, enhancing their potential value.
• The repricing serves as a retention incentive for a key director, contingent on continued service through November 6, 2026, or until a Corporate Transaction.

Negatives

• The repricing could be perceived as dilutive to existing shareholders if the options are exercised at a lower price than previously, especially if the stock price recovers significantly above the original exercise prices.
• The company is effectively providing a benefit to the director at the expense of potential future shareholder value if the stock price rises above $8.99 but below the original exercise prices.

Risks

• Potential future dilution for existing shareholders if the repriced options are exercised, increasing the number of outstanding shares.
• The 'Retention Period' condition means the company is relying on this repricing to retain the director, and failure to do so could lead to further compensation adjustments or management instability.

Future Outlook

The repricing of stock options is contingent on Director John A. Josey remaining in service with Day One Biopharmaceuticals, Inc. through a 'Retention Period' that extends until November 6, 2026, or an earlier Corporate Transaction. This aims to incentivize continued commitment from the director.

Management Comments

• The Issuer's Board of Directors approved an option repricing (the 'Repricing') on October 7, 2025, whereby the Reporting Person's options were repriced on November 6, 2025, with a new exercise price of $8.99 (if lower than the original exercise price), the closing price on Nasdaq as of the Effective Date.

Industry Context

Option repricing is a compensation strategy often employed by companies, particularly in the biotechnology sector, when stock prices have declined significantly below original option exercise prices. It serves as a retention tool to re-incentivize key personnel by lowering the exercise price, making the options 'in-the-money' or closer to it, thereby restoring their motivational value. This practice is common in industries where long-term talent retention is crucial for R&D and strategic development.

Comparison to Industry Standards

• Option repricing is a recognized practice in the biotechnology and pharmaceutical industries, often used to retain key talent when stock performance has lagged, similar to actions taken by companies like Biogen or Moderna during periods of stock volatility.
• The condition of a 'Retention Period' is a standard mechanism to ensure that the repricing achieves its goal of incentivizing continued service, aligning with corporate governance best practices for executive compensation.

Corporate Governance

Related Party Transactions

• The option repricing involves a transaction between Day One Biopharmaceuticals, Inc. and its Director, John A. Josey, making it a related party transaction.

Stakeholder Impact

• Shareholders: May experience potential future dilution if the repriced options are exercised. The repricing could be viewed as a cost of retaining key talent.
• Director (John A. Josey): Directly benefits from the reduced exercise price, increasing the intrinsic value of his stock options and providing a strong incentive for continued service.
• Employees: Could set a precedent for similar repricing events for other employees or management, potentially impacting overall compensation strategy.

Next Steps

• Director John A. Josey is required to remain in service with Day One Biopharmaceuticals, Inc. through the 'Retention Period' (until November 6, 2026, or a Corporate Transaction) to be eligible to exercise the repriced options at the new $8.99 price.

Key Dates

Keywords

Day One Biopharmaceuticals, DAWN, stock options, option repricing, Form 4, insider transaction, corporate governance, executive compensation, director compensation