Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Share Option Repricing
On January 27, 2023, the Compensation Committee (the "Compensation Committee")
of the Board of Directors (the "Board") of Ambrx Biopharma Inc. (the "Company")
approved an amendment to certain outstanding options to purchase the Company's
ordinary shares, par value $0.0001 per ordinary share ("Ordinary Shares"), under
the Company's 2021 Equity Incentive Plan (the "2021 Plan") and the Company's
Share Incentive Plan (the "Prior Plan"), each of which had an exercise price per
Ordinary Share that was higher than the fair market value of the Ordinary Shares
as of January 27, 2023 (the "Underwater Options"), held by the Company's current
employees, directors and consultants providing services ("Service Providers") as
of January 27, 2023, including Kate Hermans, a director of the Company and
former Interim Chief Executive Officer, and Sonja Nelson, the Company's Chief
Financial and Operating Officer, but not including the Company's Chief Executive
Officer, Daniel O'Connor, as the exercise price per Ordinary Share of his
options was not greater than the fair market value of the Ordinary Shares as of
January 27, 2023.
Ms. Hermans holds an Underwater Option to purchase 210,000 Ordinary Shares,
which was granted on June 30, 2022, with an exercise price of $0.38 per Ordinary
Share, an Underwater Option to purchase 105,000 Ordinary Shares, which was
granted on July 8, 2022, with an exercise price of $0.43 per Ordinary Share, and
an Underwater Option to purchase 210,000 Ordinary Shares, which was granted on
August 15, 2022, with an exercise price of $0.35 per Ordinary Share. Ms. Nelson
holds an Underwater Option to purchase 2,574,596 Ordinary Shares, which was
granted on September 2, 2021, with an exercise price of $2.56 per Ordinary
Share, an Underwater Option to purchase 850,000 Ordinary Shares, which was
granted on February 23, 2022, with an exercise price of $0.64 per Ordinary
Share, and an Underwater Option to purchase 425,000 Ordinary Shares, which was
granted on February 23, 2022, with an exercise price of $0.64 per Ordinary
Share.
Each Underwater Option was amended to reduce the exercise price per Ordinary
Share to $0.28 (or the equivalent of $1.95 per American Depositary Share, each
representing seven Ordinary Shares), which was the fair market value of the
Ordinary Shares as of January 27, 2023 (the "Repricing Amendment"). Pursuant to
Section 7(b)(xii) of the 2021 Plan and Section 9.2 of the Prior Plan, the
Compensation Committee has the authority to adopt the Repricing Amendment under
the terms of the 2021 Plan and the Prior Plan, as applicable, without Company
shareholder consent. All features of the Underwater Options other than the
exercise price remain the same (including the number of shares, vesting schedule
and expiration date).
The Compensation Committee believes that the Repricing Amendment is in the best
interests of the Company and its shareholders, as adjusting the exercise price
of the Underwater Options for all its Service Providers will provide added
incentive to retain and motivate valuable Service Providers of the Company, and
to align such Service Providers' interests with those of the Company's
shareholders.
Because many of the outstanding options held by the Company's Service Providers
were underwater prior to the effectiveness of the Repricing Option, the
Compensation Committee considered that the Company may have faced a considerable
challenge in retaining its Service Providers. The Compensation Committee
designed the Repricing Amendment to address these concerns by restoring equity
value, which it believes will incentivize retention and reinvigorate motivation
in a competitive labor market and align the Service Providers' interests with
the interests of the Company's shareholders. Further, the Compensation Committee
believes that, by increasing the Company's ability to retain experienced and
talented Service Providers, the Repricing Amendment will enhance long-term
shareholder value.
The information contained in this Form 8-K is hereby incorporated by reference
into the Company's Registration Statement Form F-3 (Registration No.
333-266404).
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