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

Day One Biopharmaceuticals' Director, Habib J. Dable, had stock options repriced to $8.99 per share, contingent on continued service.

Summary

• Day One Biopharmaceuticals, Inc. (DAWN) Director Habib J. Dable's stock options were repriced on November 6, 2025, following Board approval on October 7, 2025.
• Options with original exercise prices of $13.81 (66,660 shares) and $13.87 (32,335 shares) were effectively disposed of.
• New options were acquired with an exercise price of $8.99, which was the closing price on Nasdaq on the effective date.
• The repricing involved 66,660 shares and 32,335 shares, totaling 98,995 shares.
• To exercise the repriced options at the new price, the Reporting Person must remain in service with the Issuer through a 'Retention Period'.
• The Retention Period ends upon the earliest of the 12-month anniversary of the effective date (November 6, 2025) or a Corporate Transaction.
• The 66,660 options vest as to 1/36th of the total shares on each monthly anniversary, beginning on February 17, 2024, subject to continued service.
• The 32,335 options are fully vested.
• These transactions were exempt pursuant to Rule 16b-6(d) and Rule 16b-3 of the Exchange Act.

Sentiment

Score: 6

Explanation: The repricing benefits the director by lowering the exercise price, potentially incentivizing retention. However, it could be viewed negatively by shareholders as it may dilute existing equity and suggests a need to re-incentivize due to a lower stock price. The overall impact is neutral to slightly positive for retention, but with potential for mixed investor sentiment.

Positives

• The repricing provides a lower exercise price for Director Habib J. Dable, potentially increasing the incentive to remain with the company.
• The 'Retention Period' condition aims to ensure the director's continued service, which can be beneficial for company stability and strategic execution.

Negatives

• Option repricing can be viewed negatively by shareholders as it may dilute existing equity and can signal that management is being compensated despite a decline in stock value.
• The repricing effectively allows the director to acquire options at a significantly lower price than previously granted, potentially at the expense of shareholder value if the stock price does not recover substantially.

Risks

• There is a risk that the director may not meet the 'Retention Period' requirements, which could impact the effectiveness of the repricing as a retention tool.
• If the company's stock price does not recover above the new exercise price of $8.99, the repriced options may still not be 'in the money', limiting their incentive value.
• Negative investor sentiment regarding option repricing could put downward pressure on the stock price.

Future Outlook

The repricing is contingent on Director Habib J. Dable remaining in service through a 'Retention Period' which extends for 12 months from November 6, 2025, or until a Corporate Transaction. This aims to secure the director's continued commitment to the company.

Management Comments

• The Issuer's Board of Directors approved an option repricing on October 7, 2025, to be effective 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 strategy sometimes employed by companies, particularly in sectors like biotechnology where stock volatility can be high, to re-incentivize executives and directors when the company's stock price has significantly declined below previous option grant prices. This aims to retain key talent by restoring the 'in-the-money' value of their equity awards.

Comparison to Industry Standards

• Option repricing is a recognized, albeit sometimes controversial, practice in corporate compensation, especially in industries with high R&D costs and volatile stock performance like biotech. Companies such as Biogen or Amgen have faced similar situations where stock performance led to discussions around executive incentives.
• The use of a 'Retention Period' is a common safeguard to ensure that the repricing serves its intended purpose of retaining key personnel, aligning with practices seen in other growth-stage companies seeking to stabilize their leadership.

Corporate Governance

Related Party Transactions

• The option repricing is a transaction between Day One Biopharmaceuticals, Inc. and its Director, Habib J. Dable, which constitutes a related party transaction. It was approved by the Board of Directors and is exempt under SEC Rules 16b-6(d) and 16b-3.

Stakeholder Impact

• Shareholders: Potential for dilution if options are exercised, and possible negative sentiment regarding executive compensation practices if the stock price has underperformed. However, retention of a key director could be seen as positive for long-term stability.
• Director (Habib J. Dable): Directly benefits from a significantly lower exercise price, increasing the potential value of his equity awards and providing a strong incentive for continued service.

Next Steps

• Director Habib J. Dable must remain in service with Day One Biopharmaceuticals through the 'Retention Period' to be eligible to exercise the repriced options at the new exercise price.
• The company will continue to monitor the vesting schedules of the repriced options.

Key Dates

Keywords

Day One Biopharmaceuticals, DAWN, Stock Option Repricing, Form 4, Insider Transaction, Habib J. Dable, Director Compensation, Equity Incentive Plan, Corporate Governance