Form 4: Day One Biopharmaceuticals Director Granted Significant Equity Awards

Day One Biopharmaceuticals, Inc. Director Garry A Nicholson was granted 22,500 stock options and 15,000 deferred restricted stock units, aligning his incentives with long-term company performance.

Summary

• Garry A Nicholson, a Director of Day One Biopharmaceuticals, Inc. (DAWN), received new equity awards on June 2, 2025.
• The awards include 22,500 stock options with an exercise price of $7.01 per share, expiring on June 1, 2035.
• These stock options will vest at a rate of 1/12th of the total grant on each monthly anniversary, commencing July 2, 2025, contingent on his continued service to the Issuer.
• Additionally, Mr. Nicholson was granted 15,000 deferred Restricted Stock Units (RSUs), which represent a contingent right to receive one share of the Issuer's Common Stock upon settlement for no consideration.
• The RSUs will vest 100% on the earlier of June 2, 2026, or the date of the Issuer's 2026 annual meeting of stockholders, subject to his continued service.
• Upon vesting, the RSUs will automatically convert into an equal number of deferred stock units, which will be settled for common stock shares by the earlier of calendar year 2030 or upon his separation from the Issuer.

Sentiment

Score: 7

Explanation: The filing indicates routine equity compensation for a director, which is a positive for aligning interests and retaining talent, but does not contain new financial performance data or strategic announcements that would significantly alter the company's outlook. It's a standard, positive governance event.

Positives

• The granting of equity awards to a director aligns their financial interests with long-term shareholder value creation.
• The vesting schedules for both stock options and RSUs encourage continued service and commitment from the director.
• The deferred settlement mechanism for RSUs may provide tax benefits for the director and potentially reduce immediate selling pressure on the stock.

Negatives

• The value of the equity awards is contingent on the future stock performance of Day One Biopharmaceuticals and the director's continued service.
• These grants do not provide immediate cash compensation to the director.

Risks

• The vesting of both the stock options and Restricted Stock Units (RSUs) is explicitly subject to the Reporting Person's continued provision of service to the Issuer on each vesting date.
• The settlement of the deferred stock units, which convert from RSUs, may occur earlier than 2030 upon the Reporting Person's death, disability, separation from service with the Issuer, or the occurrence of an 'unforeseeable emergency' as defined under the Issuer's deferred compensation plan.

Future Outlook

The equity awards granted to the director, with their multi-year vesting schedules and deferred settlement provisions, indicate a long-term incentive structure designed to align the director's future performance and commitment with the company's sustained growth and shareholder value creation.

Management Comments

• The option vests as to 1/12th of the total grant on each monthly anniversary, beginning on July 2, 2025, subject to the Reporting Person's provision of service to the Issuer on each option vesting date.
• Each restricted stock unit ('RSU') represents a contingent right to receive one share of the Issuer's Common Stock upon settlement for no consideration.
• The RSUs will vest as to 100% of the award on the earlier of (i) June 2, 2026 and (ii) the date of the Issuer's 2026 annual meeting of stockholders (in each case, the 'RSU Vesting Date'), subject to the Reporting Person's provision of services to the Issuer on each vesting date.
• On the RSU Vesting Date, pursuant to the Reporting Person's election, the RSUs will automatically convert into an equal number of deferred stock units, which will be settled for an equal number of shares of the Issuer's Common Stock on the earlier of the calendar year 2030 or the Reporting Person's separation with the Issuer.

Industry Context

Equity compensation, such as stock options and restricted stock units, is a standard practice in the biotechnology and pharmaceutical industries to attract, retain, and incentivize key personnel, including directors, by aligning their financial interests with the long-term success and shareholder value creation of the company. This filing reflects a routine aspect of corporate governance and executive compensation within the sector.

Comparison to Industry Standards

• The granting of stock options and restricted stock units to directors is a common compensation practice across the biotechnology and pharmaceutical sectors, aiming to align director incentives with shareholder returns.
• While specific award sizes vary by company size, stage of development, and individual contribution, these types of equity grants are standard mechanisms for long-term incentive compensation in companies comparable to Day One Biopharmaceuticals.

Stakeholder Impact

• Shareholders: The equity grants to a director further align his financial interests with those of the shareholders, potentially fostering decisions that enhance long-term shareholder value.

Next Steps

• Garry A Nicholson's continued provision of service to Day One Biopharmaceuticals to ensure the vesting of his equity awards.
• The automatic conversion of RSUs into deferred stock units upon vesting.
• The eventual settlement of deferred stock units for common stock shares by calendar year 2030 or upon the director's separation from the Issuer.

Key Dates

Recommendation

Keywords

Day One Biopharmaceuticals, DAWN, SEC Form 4, Insider Transaction, Stock Options, Restricted Stock Units, Equity Awards, Director Compensation, Garry A Nicholson