DEF 14A 1 ny20007963x1_def14a.htm DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant ☒

Filed by a party other than the Registrant ☐

Check the appropriate box:

☐			Preliminary Proxy Statement
☐			Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒			Definitive Proxy Statement
☐			Definitive Additional Materials
☐			Soliciting Material under §240.14a-12

Eargo, Inc.

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

☒			No fee required.
☐			Fee paid previously with preliminary materials.
☐			Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

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2665 North First Street, Suite 300

San Jose, California 95134

NOTICE OF THE 2023 ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON JUNE 7, 2023

To the Stockholders of Eargo, Inc.:

I am pleased to invite you to attend the 2023 Annual Meeting of Stockholders (the “Annual Meeting”) of Eargo, Inc., a Delaware corporation (the “Company”), which will be held online at www.virtualshareholdermeeting.com/EAR2023, on June 7, 2023, at 11:00 A.M. Pacific Time. You may submit questions and vote online during the online Annual Meeting. We believe a virtual meeting provides expanded access, improves communication, enables increased stockholder attendance and participation and provides cost savings for our stockholders and the Company.

The Annual Meeting will be held for the following purposes, as more fully described in the accompanying Proxy Statement (the “Proxy Statement”):

(1)	To elect the two Class III director nominees named in the Proxy Statement to serve until the 2026 Annual Meeting of Stockholders and until his or her successor is duly elected and qualified (“Proposal No. 1”);

(2)	To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2023 (“Proposal No. 2”);

(3)	To approve, on a non-binding, advisory basis, the compensation of our named executive officers (“Proposal No. 3”);

(4)	To approve an amendment to our 2020 Incentive Award Plan (the “2020 Plan”) to increase the number of shares of common stock authorized for issuance under the 2020 Plan by 2,414,745 shares; and

(5)	To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice of Annual Meeting of Stockholders. Only stockholders who owned common stock of the Company at the close of business on April 13, 2023 (the “Record Date”) can vote at this Annual Meeting or any adjournments that take place.

The Company’s Board of Directors recommends that you vote FOR the election of the two Class III director nominees named in Proposal No. 1; FOR the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm, as described in Proposal No. 2; FOR the approval of the compensation of the Company’s named executive officers on a non-binding, advisory basis, as described in Proposal No. 3; and FOR the amendment to the 2020 Plan, as described in Proposal No. 4.

YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual Meeting online, we encourage you to read the accompanying Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2022, and submit your proxy as soon as possible using one of the convenient voting methods described in the “Information About the Proxy Process and Voting” section in the Proxy Statement. If you receive more than one set of proxy materials or Notice of Internet Availability because your shares are registered in different names or addresses, each proxy should be signed and submitted to ensure that all of your shares will be voted. Please note that any stockholder attending the virtual Annual Meeting may vote at the Annual Meeting, even if the stockholder has already returned a proxy card or voting instruction card. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the Annual Meeting, you must obtain a proxy issued in your name from that record holder.

We appreciate your continued support of Eargo and look forward to receiving your proxy.

By Order of the Board of Directors

/s/ Christian Gormsen

Christian Gormsen

President, Chief Executive Officer and Director

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Eargo, Inc. Proxy Statement and Notice of 2023 Annual Meeting of Stockholders i

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2665 North First Street, Suite 300

San Jose, California 95134

PROXY STATEMENT

FOR THE 2023 ANNUAL MEETING OF STOCKHOLDERS

JUNE 7, 2023

The board of directors (the “Board” or “Board of Directors”) of Eargo, Inc. (referred to herein as the “Company”, “Eargo”, “we”, “us” or “our”) is soliciting your proxy to vote at our 2023 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on Wednesday, June 7, 2023, at 11:00 A.M. Pacific Time. The Meeting will be held entirely online. You will be able to attend the Meeting, submit your questions and vote online during the meeting by visiting www.virtualshareholdermeeting.com/EAR2023.

•	This Proxy Statement summarizes information about the proposals to be considered at the Annual Meeting and other information you may find useful in determining how to vote.

•	The Proxy Card is the means by which you actually authorize another person to vote your shares in accordance with your instructions (the “Proxy Card”).

In addition to solicitations by mail, our directors, officers and regular employees, without additional remuneration, may solicit proxies by telephone, e-mail and personal interviews. Brokers, custodians and fiduciaries will be requested to forward proxy soliciting material to the owners of stock held in their names, and we will reimburse them for their reasonable out-of-pocket expenses incurred in connection with the distribution of proxy materials.

Pursuant to the rules adopted by the Securities and Exchange Commission (the “SEC”), we have elected to provide access to our proxy materials, which include this Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2022 (the “Form 10-K”), over the internet in lieu of mailing printed copies. On or about April 24, 2023, we will begin mailing a Notice of Internet Availability of Proxy Materials to stockholders; which will contain instructions on how to access and review the proxy materials online, and will also contain instructions on how to request a printed copy of the proxy materials.

In addition, we have provided brokers, dealers, banks, voting trustees and their nominees, at our expense, with additional copies of our proxy materials so that our record holders can supply these materials to the beneficial owners of shares of our common stock as of the Record Date. The Form 10-K is also available on our website at https://ir.eargo.com/financial-information/sec-filings.

The only outstanding voting securities of Eargo are shares of common stock, $0.0001 par value per share (the “common stock”), of which there were 20,741,841 shares outstanding (excluding any treasury shares) as of April 13, 2023 (the “Record Date”). The holders of a majority in voting power of the shares of common stock issued and outstanding and entitled to vote, present by remote communication or represented by proxy, will constitute a quorum for the transaction of business at the Annual Meeting. If a quorum is not present or represented at the Annual Meeting, then the chairperson of the meeting or the holders of a majority in voting power of the outstanding stock entitled to vote at the Annual Meeting, present by remote communication or represented by proxy, may adjourn the meeting from time to time to another time or place, if any.

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Why am I receiving these materials?

We have made these proxy materials available to you on the internet or, upon your request, have delivered printed proxy materials to you, because our Board is soliciting your proxy to vote at the Annual Meeting, including at any adjournments or postponements of the Annual Meeting. The Annual Meeting will be held on June 7, 2023, at 11:00 A.M. Pacific Time. You will be able to attend the Annual Meeting, submit your questions and vote online during the meeting by visiting www.virtualshareholdermeeting.com/EAR2023.

However, you do not need to attend the Annual Meeting to vote your shares. Instead, you may simply follow the instructions below to submit your proxy.

This Proxy Statement, the Notice of Internet Availability, the Notice of Annual Meeting of the Stockholders and accompanying Proxy Card or voting instruction form will be first mailed or made available for access on or about April 24, 2023 to all stockholders of record entitled to vote at the Annual Meeting.

Who can vote at the Annual Meeting, and how do I vote or submit my proxy?

Only stockholders of record at the close of business on the Record Date will be entitled to vote at the Annual Meeting and, on each matter to be voted upon, will have one vote for each share of common stock owned as of the Record Date. At the close of business on the Record Date, there were 20,741,841 shares of common stock issued and outstanding and entitled to vote.

Stockholder of Record: Shares Registered in Your Name

If, on the Record Date, your shares were registered directly in your name with the transfer agent for our common stock, American Stock Transfer & Trust Company, LLC, then you are a stockholder of record. As a stockholder of record, you may vote at the virtual Annual Meeting or vote by proxy by telephone, internet or mail. Whether or not you plan to attend the Annual Meeting online, please submit a proxy to vote as soon as possible to ensure your vote is counted. Even if you have submitted a proxy before the Annual Meeting, you may still attend the Annual Meeting online and vote online. In such case, your previously submitted proxy will be disregarded.

•	To vote by proxy over the internet. To vote by proxy over the internet, follow the instructions provided on your Notice of Internet Availability, or, if you receive printed proxy materials, follow the instructions provided on your Proxy Card.

•	To vote by proxy by telephone. If you receive printed proxy materials, you may also vote by submitting a proxy via telephone by following the instructions on your Proxy Card.

•

To vote by proxy by mail. If you receive printed proxy materials, you may also vote by mail: simply complete, sign and date the Proxy Card and return it promptly in the envelope provided. If you return your signed Proxy Card to us before the Annual Meeting, we will vote your shares in accordance with the Proxy Card.

•	To vote by attending the virtual Annual Meeting. You may vote your shares at www.virtualshareholdermeeting.com/EAR2023. You will be asked to provide the 16-digit control number from your Notice of Internet Availability or Proxy Card, as applicable.

Beneficial Owner: Shares Registered in the Name of a Broker, Bank or Other Agent

If, on the Record Date, your shares were not held in your name, but rather in an account at a brokerage firm, bank, dealer, custodian or other similar organization acting as nominee (each, a “broker”), then you are the beneficial owner of shares held in “street name,” and these proxy materials are being forwarded to you by your broker along with a voting instruction card. The broker holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner of the shares in your account, you have the right to direct your broker on how to vote your shares. Simply complete and mail the voting instruction card to ensure that your vote is counted.

You are also invited to attend the Annual Meeting. However, because you are not the stockholder of record, you may not vote your shares at the virtual Annual Meeting unless you request, obtain and submit, prior to the Annual Meeting, a valid proxy from your broker. If you wish to vote your shares at the Annual Meeting rather than submitting a voting instruction form to your broker, follow the instructions from your broker.

2 Eargo, Inc. Proxy Statement and Notice of 2023 Annual Meeting of Stockholders

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INFORMATION ABOUT THE PROXY PROCESS AND VOTING (continued)

What am I voting on?

There are four matters scheduled for a vote at the Annual Meeting:

•	Proposal No. 1—To elect the two nominees for Class III director named herein to serve for a three-year term of office expiring at the 2026 Annual Meeting and until his or her successor has been duly elected and qualified.

•	Proposal No. 2—To ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for its fiscal year ending December 31, 2023.

•	Proposal No. 3—To approve, on a non-binding, advisory basis, the compensation of the Company’s named executive officers.

•	Proposal No. 4— To approve an amendment to the Company’s 2020 Incentive Award Plan (the “2020 Plan”) to increase the number of shares of common stock authorized for issuance under the 2020 Plan by 2,414,745 shares.

For Proposal No. 1, you may either vote “For” the nominees to the Board of Directors or you may “Withhold” your vote. For Proposal No. 2, Proposal No. 3 and Proposal No. 4, you may vote “For” or “Against” or abstain from voting.

Please note that by casting your vote by submitting a proxy for your shares you are authorizing the individuals listed on the Proxy Card to vote your shares in accordance with your instructions and in their discretion with respect to any other matter that properly comes before the Annual Meeting or any adjournments or postponements thereof.

Who counts the votes?

Broadridge Financial Solutions, Inc. (“Broadridge”) has been engaged as our independent agent to tabulate stockholder votes (the “Inspector of Election”). If you are a stockholder of record, your executed Proxy Card is voted at the Annual Meeting and returned directly to Broadridge for tabulation. If you hold your shares through a broker, your broker returns one Proxy Card to Broadridge on behalf of all its clients.

How are votes counted?

Votes will be counted by the Inspector of Election appointed for the Annual Meeting, who will separately count “For” votes for all proposals, and, with respect to Proposal No. 2, Proposal No. 3, and Proposal No. 4, “Against” votes and abstentions. In addition, with respect to Proposal No. 1, the election of directors, the Inspector of Election will count the number of “Withheld” votes and broker non-votes received. With respect to Proposal No. 3 and Proposal No. 4, the Inspector of Elections will also count the number of broker non-votes received. If your shares are held by your broker as your nominee (that is, in “street name”), you will need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker to vote your shares. If you do not give instructions to your broker, your broker can vote your shares with respect to “routine” items, but not with respect to “non-routine” items. Proposal No. 1 (Election of Directors), Proposal No. 3 (Say-on-Pay) and Proposal No. 4 (Amendment to 2020 Plan) are “non-routine” proposals. If you do not instruct your broker how to vote with respect to Proposals No. 1, No. 3 and No. 4, your broker will not vote on these proposals, as applicable, and, assuming that your broker exercises its discretionary authority on Proposal No. 2, your shares will be recorded as “broker non-votes” with respect to Proposals No. 1, No. 3 and No. 4.

Withhold votes, abstentions and broker non-votes will be counted for purpose of determining whether a quorum exists.

See below for more information regarding: “What are “broker non-votes”?” and “Which ballot measures are considered “routine” or “non-routine”?”

What are “broker non-votes”?

Broker non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker holding the shares as to how to vote on matters deemed “non-routine.” Generally, if shares are held in street name, the beneficial owner of the shares is entitled to give voting instructions to the broker holding the shares. If the beneficial owner does not provide voting instructions, the broker can still vote the shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. In the event that a broker or other record holder of common stock indicates on a proxy that it does not have discretionary authority to vote certain shares on a particular proposal, then those shares will be treated as broker non-votes with respect to that proposal. Accordingly, if you own shares through a nominee, such as a broker, please be sure to instruct your nominee how to vote to ensure that your vote is counted on each of the proposals.

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INFORMATION ABOUT THE PROXY PROCESS AND VOTING (continued)

Which ballot measures are considered “routine” or “non-routine?”

Only the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2023 (Proposal No. 2) is considered “routine” under applicable rules. A broker may generally vote on routine matters, and therefore no broker non-votes are expected to occur with respect to Proposal No. 2. Proposal No. 1 (Election of Directors), Proposal No. 3 (Say-on-Pay) and Proposal No. 4 (Amendment to 2020 Plan) are “non-routine” proposals. A broker cannot vote without instructions on non-routine matters, and therefore there may be broker non-votes on Proposal No. 1, Proposal No. 3 and Proposal No. 4.

How many votes are needed to approve the proposals?

With respect to Proposal No. 1, directors will be elected by a plurality of the votes cast, which means that the two nominees receiving the highest number of “For” votes will be elected. Stockholders do not have cumulative voting rights.

With respect to Proposal No. 2, the affirmative vote of the holders of a majority of votes cast (excluding abstentions) is required for approval. This is a routine proposal, and therefore we do not expect any broker non-votes.

With respect to Proposal No. 3 and Proposal No. 4, the affirmative vote of a majority of the votes cast (excluding abstentions and broker non-votes) is required for approval. Abstentions and broker non-votes will have no impact on the outcome of this proposal. Abstentions and broker non-votes will be counted for purpose of determining whether a quorum exists.

How many votes do I have?

On each matter to be voted upon, you have one vote for each share of common stock you own as of the Record Date.

What if I return a Proxy Card or vote by proxy over the internet but do not make specific choices?

If we receive a signed and dated Proxy Card and the Proxy Card does not specify how your shares are to be voted, or if you vote by proxy over the internet but do not mark the boxes showing how you wish to vote on a particular proposal at the Annual Meeting, your shares will be voted as follows:

•	“For” the election of each of the nominees for director;

•	“For” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023;

•	“For” the approval on a non-binding, advisory basis, of the compensation of the Company’s named executive officers; and

•	“For” the approval of an amendment to the 2020 Plan;

If any other matter is properly presented at the Annual Meeting, your proxy (one of the individuals named on the Proxy Card) will vote your shares in his or her discretion.

Who is paying for this proxy solicitation?

We will pay for the entire cost of soliciting proxies. In addition to these mailed proxy materials, our directors, officers and employees may also solicit proxies in person, by telephone or by other means of communication. Directors, officers and employees will not be paid any additional compensation for soliciting proxies. All costs of solicitation of proxies will be borne by us. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.

What does it mean if I receive more than one set of materials?

If you receive more than one set of materials, your shares are registered in more than one name or are registered in different accounts. In order to vote all the shares you own, you must either sign and return all of the Proxy Cards or follow the instructions for any alternative voting procedure on each of the Proxy Cards or Notices of Internet Availability.

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INFORMATION ABOUT THE PROXY PROCESS AND VOTING (continued)

Can I change my vote after submitting my proxy?

Yes. You can revoke your proxy at any time before the final vote at the Annual Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of three ways:

•	You may do so over the internet, by phone or by mail by following the instructions contained in the proxy materials including that you may submit another properly completed Proxy Card with a later date.

•	You may send a written notice that you are revoking your proxy to the Secretary of the Company at 2665 North First Street, Suite 300, San Jose, California 95134.

•	You may attend the Annual Meeting online and vote by following the instructions at www.virtualshareholdermeeting.com/EAR2023. Simply attending the Annual Meeting online will not, by itself, revoke your proxy.

If your shares are held by your broker, you should follow the instructions provided by them.

How do I attend the virtual Annual Meeting?

The webcast of the Annual Meeting will begin promptly at 11:00 A.M. Pacific Time. We encourage you to access the meeting prior to the start time. Online check-in will begin at 10:45 A.M. Pacific Time, and you should allow reasonable time for the check-in procedures.

To attend the Annual Meeting, stockholders will need to log in to www.virtualshareholdermeeting.com/EAR2023 using the 16-digit control number on the Proxy Card or voting instruction form.

Can I submit questions prior to or at the virtual Annual Meeting?

An online portal will be available to our stockholders at www.virtualshareholdermeeting.com/EAR2023. Stockholders may access this portal and submit questions and vote during the Annual Meeting. To demonstrate proof of stock ownership, you will need to enter the 16-digit control number received with your proxy card or voting instruction form to submit questions and vote at our Annual Meeting. We intend to answer questions submitted during the meeting that are pertinent to the Company and the items being brought before stockholder vote at the Annual Meeting, as time permits, and in accordance with the Rules of Conduct for the Annual Meeting. Questions and answers may be grouped by topic, and substantially similar questions will be answered only once.

Will technical assistance be provided before and during the virtual Annual Meeting?

Beginning 15 minutes prior to the start of and during the virtual Annual Meeting, we will have a support team ready to assist stockholders with any technical difficulties they may have accessing or hearing the virtual meeting.

If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual stockholder meeting log-in page.

When are stockholder proposals due for next year’s Annual Meeting?

To be considered for inclusion in next year’s proxy materials, your proposal must be submitted in writing by December 26, 2023 to the Secretary of the Company at 2665 North First Street, Suite 300, San Jose, California 95134; provided, that if the date of the annual meeting is more than 30 days from June 7, 2024, the deadline is a reasonable time before we begin to print and send our proxy materials for next year’s annual meeting. Pursuant to our Amended and Restated Bylaws, in order for a stockholder to present a proposal for next year’s annual meeting, other than proposals to be included in the proxy statement as described above, or to nominate a director, you must do so between February 8, 2024 and March 9, 2024; provided that if the date of that annual meeting is more than 30 days before or more than 60 days after June 7, 2024, you must give notice not later than the 90^th day prior to the annual meeting date or, if later, the 10^th day following the day on which public disclosure of the annual meeting date is first made. Additionally, a stockholder who intends to solicit proxies in reliance on the SEC’s universal proxy rule for director nominees submitted under the advance notice provisions of our Amended and Restated Bylaws must comply with the additional requirements of Rule 14a-19(b). You are advised to review our Amended and Restated Bylaws, which contain additional requirements for advance notice of stockholder proposals and director nominations.

What is the quorum requirement?

A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if the holders of a majority in voting power of the shares of common stock issued and outstanding and entitled to vote on the Record Date are present in attendance online or represented by proxy at the Annual Meeting. On the Record Date, there were 20,741,841 shares outstanding and entitled to vote. Accordingly, 10,370,921 shares must be represented by stockholders present at the Annual Meeting online or by proxy to have a quorum.

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INFORMATION ABOUT THE PROXY PROCESS AND VOTING (continued)

Your shares will be counted toward the quorum only if you submit a valid proxy or vote at the Annual Meeting online. Abstentions, “withhold” votes and broker non-votes will be counted toward the quorum requirement. If there is no quorum, either the chairperson of the Annual Meeting or the holders of a majority in voting power of the stockholders entitled to vote at the Annual Meeting, in attendance online or represented by proxy, may adjourn the Annual Meeting to another time or place.

How can I find out the results of the voting at the Annual Meeting?

Voting results will be announced by the filing of a Current Report on Form 8-K within four business days after the Annual Meeting. If final voting results are unavailable at that time, we will file an amended Current Report on Form 8-K within four business days of the day the final results are available.

Numbers adjusted for Reverse Stock Split

On January 17, 2023, the Company effected a 1-for-20 reverse stock split of its common stock. No fractional shares were issued as a result of the reverse stock split. Proportionate adjustments were made to the number of shares of common stock reserved for issuance and other share limits under our equity incentive plans and employee stock purchase plan, and to the number of shares underlying outstanding equity awards and the per share exercise price of outstanding options. All share and per share information, including exercise price per share relating to option awards, presented herein has been retroactively adjusted to reflect the reverse stock split.

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Our Board is divided into three classes. Our Amended and Restated Certificate of Incorporation provides that each class will consist, as nearly as possible, of one-third of the total number of directors, and each class has a staggered, three-year term. Unless the Board determines that vacancies or newly created directorships created by increases in the number of directors shall be filled by the stockholders, and except as otherwise provided by law, vacancies and newly created directorships on the Board may be filled only by the affirmative vote of a majority of the remaining directors in office, even though less than a quorum. A director elected by the Board to fill a vacancy or a newly created directorship shall serve for the remainder of the full term of the class of directors in which the vacancy or newly created directorships occurred and until such director’s successor is elected and qualified.

The Board currently consists of seven directors, divided into the three following classes:

•	Class I directors: Trit Garg, M.D., Christian Gormsen, and David Wu, whose current terms will expire at the annual meeting of stockholders to be held in 2024;

•	Class II directors: Justin Sabet-Peyman and Donald Spence, whose current terms will expire at the annual meeting of stockholders to be held in 2025; and

•	Class III directors: Katie Bayne and Karr Narula, whose current terms will expire at the Annual Meeting.

At each annual meeting of stockholders, the successors to the directors whose terms will then expire will be elected to serve from the time of election and qualification until the third subsequent annual meeting of stockholders.

At the Annual Meeting, the stockholders will vote on the election of two Class III directors. Katie Bayne and Karr Narula have been nominated by the Board to serve as Class III directors and have agreed to stand for election. If elected, Ms. Bayne and Mr. Narula will hold office from the date of his or her election by the stockholders until the third subsequent annual meeting of stockholders and until his or her successor is elected and has been qualified, or until his or her earlier death, resignation or removal.

Shares represented by proxies will be voted, if authority to do so is not withheld, for the election of the nominees named below. In the event that any nominee should be unavailable for election as a result of an unexpected occurrence, such shares will be voted for the election of such substitute nominee as the Board may propose. Ms. Bayne and Mr. Narula have each agreed to serve if elected, and the management of the Company (“management”) has no reason to believe that either Ms. Bayne or Mr. Narula will be unable to serve.

Vote Required for Approval

The election of each of the Class III directors requires a plurality of the votes cast at the Annual Meeting.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH NAMED NOMINEE.

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PROPOSAL NO. 1 ELECTION OF DIRECTORS (continued)

The following table sets forth, for the Class III director nominees who are currently standing for election and for our other current directors who will continue in office after the Annual Meeting, information with respect to their ages and position/office held within the Company:

Name	Age	Position(s)
Class III Directors standing for re-election at the Annual Meeting
Katie Bayne⁽¹⁾⁽³⁾	56	Director
Karr Narula	43	Director
Class I Directors whose terms expire at the 2024 Annual Meeting of Stockholders
Trit Garg, M.D.⁽²⁾⁽³⁾	33	Director
Christian Gormsen	46	President, Chief Executive Officer and Director
David Wu⁽¹⁾⁽²⁾	54	Director
Class II Directors whose terms expire at the 2025 Annual Meeting of Stockholders
Justin Sabet-Peyman⁽²⁾⁽³⁾	40	Director
Donald Spence⁽¹⁾	69	Chair of the Board and Director

(1)	Member of our Audit Committee (as described below).

(2)	Member of our Compensation Committee (as described below).

(3)	Member of our Nominating and Corporate Governance Committee (as described below).

Set forth below is biographical information for the nominees for election at the Annual Meeting and each person whose term of office as a director will continue after the Annual Meeting. The following includes certain information regarding our directors’ individual experience, qualifications, attributes and skills that led the Board to conclude that they should serve as directors.

Nominees for Election to a Three-Year Term Expiring at the 2026 Annual Meeting of Stockholders

Katie J. Bayne has served as a member of our Board since June 2021. Since February 2019, Ms. Bayne has served as a Senior Advisor with Guggenheim Securities, LLC, the investment banking and capital markets division of Guggenheim Partners. Since March 2018, Ms. Bayne has also served as founder and President of Bayne Advisors, a strategic and advisory firm. Prior to serving in her current roles, from 1989 to 2018, Ms. Bayne served in numerous roles at The Coca-Cola Company focused on general management, strategy, retail and consumer marketing in the United States, Australia and globally, including President, North America Brands and Chief Marketing Officer, North America. Ms. Bayne previously served as a member of the board of directors for Ascena Retail Group, Inc., Ann Inc. and Beazer Homes USA. Ms. Bayne currently serves as a member of the board of directors of the following publicly traded companies: Acreage Holdings, Inc. and The Honest Company, Inc. Ms. Bayne is also a member of the board of trustees of the Fuqua School of Business at Duke University and is on the executive board of the Cox School of Business at Southern Methodist University. Ms. Bayne holds a B.A. in Psychology from Duke University and an M.B.A. from Duke University’s Fuqua School of Business.

We believe that Ms. Bayne is qualified to serve on our Board due to her strong background in consumer strategy, retail and consumer marketing and brand management.

Karr Narula has served as a member of our Board since December 2022. Mr. Narula is a Founding Partner of Patient Square Capital, a health care focused investment firm that he joined in March 2021. He has over 18 years of health care investment and operations experience. At Patient Square, Mr. Narula brings an operational lens to health care investment decisions and oversees the firm’s Transformation and Growth (TAG) Team, which deploys specialized transformation and growth capabilities to unlock value within portfolio companies. He currently serves on the Board of Directors of Access Tele care and previously served on the Boards of Blue Sprig Pediatrics and Access Physicians.

Prior to Patient Square, Mr. Narula spent 13 years at KKR, a private equity firm, from 2007 until 2020, where he was a Partner and Head of KKR’s Portfolio Operations Team (KKR Capstone) in the Americas. In this role, he led the team responsible for value creation across all industries and asset classes in the Americas and directly drove value creation efforts within the health care sector. While at KKR, Mr. Narula was a member of KKR’s Americas Private Equity Portfolio Management Committee, KKR’s Health Care Strategic Growth Portfolio Management Committee, and KKR’s Portfolio Operations Global Operating Committee. Prior to joining KKR in 2007, he was a private equity investor at HIG Capital and before that, a consultant at Bain & Company in San Francisco and in London.

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Mr. Narula holds a B.S. in Industrial Engineering with Distinction from Stanford University and an M.B.A. from Harvard Business School.

We believe that Mr. Narula is qualified to serve on our Board due to the valuable expertise and perspective he brings with his financial background and his extensive investment experience and board roles in the healthcare industry.

Directors Continuing in Office Until the 2024 Annual Meeting of Stockholders

Dr. Trit Garg has served as a member of our Board since December 2022. Dr. Garg has served as a Vice President at Patient Square Capital, a health care focused investment firm, since October 2021. Prior to joining Patient Square, Dr. Garg was at HealthQuest Capital from 2018 to 2021 where he was most recently a Principal. Previously Dr. Garg was a resident physician in Internal Medicine at Stanford University Hospital from 2017 to 2018. Earlier during his medical training, Dr. Garg spent time at KKR, a private equity firm, and McKinsey & Company. Dr. Garg currently serves on the Board of Directors of Access TeleCare. Dr. Garg holds an M.D. from Stanford Medical School and an M.B.A. from Stanford’s Graduate School of Business. He graduated with a B.A. with High Distinction from the University of California, Berkeley, where he was a Regents’ and Chancellor’s Scholar.

We believe that Dr. Garg is qualified to serve on our Board due to the valuable expertise and perspective he brings with his medical and financial backgrounds and his extensive investment experience in the healthcare industry.

Christian Gormsen has served as a member of our Board since November 2014 and as our President and Chief Executive Officer since June 2016. From June 2014 to June 2016, Mr. Gormsen served as Commercial Director, EMEA, of ISS A/S, a global facility services company. Prior to that, he spent a decade at GN Group, a global leader in intelligent audio solutions including hearing aids, in roles of increasing responsibility until he became the Senior Vice President of Operations, Europe and Strategic Accounts. Mr. Gormsen started his career in investment banking before transitioning to McKinsey & Company, a management consulting firm. Mr. Gormsen received a B.S. in economics and his M.S. in economics and business administration from the Copenhagen Business School.

We believe that Mr. Gormsen is qualified to serve on our Board due to the valuable expertise and perspective he brings in his capacity as our President and Chief Executive Officer and because of his extensive experience and knowledge of our industry.

David Wu has served as a member of our Board since July 2014. Since 2012, Mr. Wu has been a Partner at Maveron LLC, a venture capital firm, where his primary focus is emerging consumer internet companies. Mr. Wu leads Maveron’s investments in Illumix, inkbox, Booster, Wave, PlutoXR and Eargo, and serves on each company’s board of directors. Mr. Wu received a B.S. in electrical engineering and a B.A. in quantitative economics from Stanford University.

We believe that Mr. Wu is qualified to serve on our Board due to the valuable expertise and perspective he brings with his experience investing in consumer-facing companies.

Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders

Justin Sabet-Peyman has served as a member of our Board since December 2022. Mr. Sabet-Peyman is a Partner at Patient Square Capital, a health care focused investment firm, where he has worked since September 2021. Mr. Sabet-Peyman previously worked at KKR on the Americas Health Care Team from 2008 until 2019, where he focused on private equity and growth equity investing. He also spent a year helping to build the Direct Investments platform at Mubadala Investment Company from 2020 until 2021, and he started his career at McKinsey & Company where he served corporate and private equity clients.

Mr. Sabet-Peyman currently serves on the Board of Directors of Access Telecare and previously served on the Boards of Heartland Dental, PetVet Care Centers, Trilogy MedWaste, Ebb Therapeutics, EchoNous, Arbor Pharmaceuticals, and Lake Region Medical.

Mr. Sabet-Peyman received his B.S. and M.S. in Electrical Engineering from Stanford University where he graduated as the Henry Ford II Scholar and was a Mayfield Fellow.

We believe that Mr. Sabet-Peyman is qualified to serve on our Board due to the valuable expertise and perspective he brings with his financial background and his extensive investment experience in the healthcare industry.

Donald Spence has served as a member of our Board, as well as our non-executive Chair, since December 2022. Mr. Spence retired in August 2019 as President and Chief Executive Officer of Ebb Therapeutics, a company in the business of developing and marketing medical products for the treatment of insomnia, a position he held since March 2017. Prior to joining Ebb Therapeutics, Mr. Spence

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served as Chairman and Chief Executive Officer of Lake Region Medical, Inc. from 2010 until its acquisition by Integer Holdings Corporation in October 2015. From 2005 to 2008, he served as President of the Sleep and Home Respiratory Group for Philips Respironics, and from 2008 to 2010 as Chief Executive Officer of Philips Home Healthcare Solutions. Prior to that, Mr. Spence spent eight years with GKN Sinter Metals, as Senior Vice President for Global Sales and Marketing from 1998 to 2001 and as President from 2001 to 2005. Prior to 1998, he served in a number of roles at BOC Group, PLC over a 15-year career at that company including President, Ohmeda Medical Systems from 1997 to 1998. Mr. Spence serves on the boards of the following publicly held companies: Integer Holdings Corp (NYSE: ITGR) and Vapotherm, Inc. (NYSE: VAPO), both medical device manufacturers. Mr. Spence also serves on the board of Linguaflex, Inc. Mr. Spence earned his B.A. in Economics from Michigan State University and his M.A. in Economics from Central Michigan University.

We believe that Mr. Spence is qualified to serve on our Board due to his executive leadership experience and board roles in the healthcare industry.

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The Audit Committee of our Board has appointed Deloitte & Touche LLP (“Deloitte”), as our independent registered public accounting firm for the year ending December 31, 2023, and is seeking ratification of this selection by our stockholders at the Annual Meeting. Deloitte has audited our financial statements for each of our fiscal years since the fiscal year ended December 31, 2017. Representatives of Deloitte are expected to be in attendance online at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

Neither our Amended and Restated Bylaws nor other governing documents or law require stockholder ratification of the selection of Deloitte as our independent registered public accounting firm. However, the Audit Committee is submitting the selection of Deloitte to our stockholders for ratification as a matter of good corporate practice. If our stockholders fail to ratify the selection, the Audit Committee will reconsider the selection of Deloitte as our independent registered public accounting firm. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if they determine that such a change would be in the best interests of the Company and our stockholders.

Aggregate fees for professional services rendered for us by Deloitte & Touche LLP for the years ended December 31, 2022 and 2021 were as follows, all of which were approved by the Audit Committee:

	Year Ended December 31, (in thousands)
	2022	2021
Audit Fees⁽¹⁾	$1,832	$3,185
Audit-Related Fees⁽²⁾	—	—
Tax Fees⁽³⁾	171	57
All Other Fees⁽⁴⁾	2	2
Total Fees	$2,005	$3,244

(1)

Represents the aggregate fees billed for the audit of the Company’s consolidated financial statements, review of the condensed consolidated financial statements included in the Company’s quarterly reports and services in connection with the statutory and regulatory filings or engagements for those years. Fees for our fiscal year ended December 31, 2021 also consisted of professional services rendered in connection with matters relating to an investigation by the United States Department of Justice related to insurance claims submitted for reimbursement. Fees for our fiscal year ended December 31, 2022 also consisted of professional services rendered in connection with our Registration Statement on Form S-1 related to our rights offering for up to 18,750,000 shares of newly issued common stock completed in November 2022 and the PSC Resale Registration Statement (as defined below).

(2)	Represents the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “audit fees.”

(3)	Represents the aggregate fees billed for tax compliance, advice and planning.

(4)	Represents the aggregate fees billed for all products and services that are not included under “audit fees,” “audit-related fees” or “tax fees” and consists of fees billed for subscriptions to an online accounting and financial reporting research assistance service.

Pre-Approval Policies and Procedures

Pursuant to its charter, the Audit Committee or the Chair of the Audit Committee pre-approves all audit and non-audit services provided by the Company’s independent registered public accounting firm, unless the engagement is entered into pursuant to appropriate pre-approval policies established by the Audit Committee or if such service falls within applicable exceptions under SEC rules. The Audit Committee pre-approved all services provided by Deloitte for 2022 in accordance with its pre-approval policies.

Vote Required for Approval

The ratification of the appointment of the independent registered public accounting firm requires the affirmative vote of the holders of a majority of votes cast (excluding abstentions and broker non-votes).

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

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Code of Business Conduct and Ethics

We have adopted a written code of business conduct and ethics that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing similar functions, and agents and representatives. The code of business conduct and ethics contains general guidelines for conducting our business consistent with the highest standards of business ethics. The full text of our code of business conduct and ethics is available on our website at https://ir.eargo.com/. The Nominating and Corporate Governance Committee of our Board is responsible for overseeing our code of business conduct and ethics and any waivers applicable to any director, executive officer or employee. We intend to disclose any future amendments to certain provisions of our code of business conduct and ethics, or waivers of such provisions applicable to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, and agents and representatives, on our website identified above or in public filings.

Corporate Governance Guidelines

We believe in sound corporate governance practices and have adopted formal Corporate Governance Guidelines to enhance our effectiveness. Our Board adopted these Corporate Governance Guidelines in order to ensure that it has the necessary practices in place to review and evaluate our business operations as needed and to make decisions that are independent of our management. The Corporate Governance Guidelines are also intended to align the interests of directors with those of our stockholders. The Corporate Governance Guidelines set forth the practices our Board follows with respect to Board and committee composition and selection, Board meetings and succession planning. The Corporate Governance Guidelines include the Board’s standards used in nominating director candidates, which include candidates who have a high level of personal and professional integrity, strong ethics and values and the ability to make mature business judgments. A copy of our Corporate Governance Guidelines is available in the Investor Relations section of our website at https://ir.eargo.com/.

Independence of the Board of Directors

Patient Square Capital beneficially owns more than 50% of our outstanding voting securities, and we are therefore a “controlled company” within the meaning of the listing rules (the “Listing Rules”) of The Nasdaq Stock Market LLC (“Nasdaq”). For so long as we qualify as a controlled company, we may, at our sole election, rely upon the Listing Rules exemptions applicable to controlled companies, pursuant to which we are exempt from certain corporate governance requirements of Nasdaq such as the requirements that our Board have a majority of independent directors and that our Compensation Committee and Nominating and Corporate Governance Committee be composed entirely of independent directors. The “controlled company” exemption does not modify the independence requirements for our Audit Committee, and we comply with the requirements of the SEC and the Listing Rules requiring that our Audit Committee be composed exclusively of independent directors.

Under the Listing Rules, the definition of independence includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director nor any of his or her family members has engaged in various types of business dealings with us. In addition, as required by the Listing Rules, our Board has made a determination as to each independent director that no relationship exists that, in the opinion of our Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our Board reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management. There are no family relationships among any of our directors or executive officers.

Our Board has undertaken a review of the independence of each of our directors and considered whether any director has a material relationship with us that could compromise such individual’s ability to exercise independent judgment in carrying out their responsibilities. As a result of this review, our Board has determined that each of Katie Bayne, Donald Spence and David Wu qualifies, and prior to their respective resignations during 2022, each of Peter Tuxen Bisgaard, Doug Hughes, Josh Makower, M.D., Nina Richardson, and A. Brooke Seawell qualified, as independent in accordance with the Listing Rules.

As required under the Listing Rules, our independent directors meet in regularly scheduled executive sessions at which only independent directors are present.

Investors’ Rights Agreement

On June 24, 2022, we entered into an agreement (the “Note Purchase Agreement”) with an affiliate of Patient Square Capital (the “PSC Stockholder”) and Drivetrain Agency Services, LLC, as administrative agent and collateral agent (the “Administrative Agent”). Pursuant to the Note Purchase Agreement, we agreed to issue and sell up to $125.0 million in senior secured convertible notes (the “Notes”)

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convertible into shares of our common stock to the PSC Stockholder, of which we issued $100.0 million in June 2022 and approximately $5.5 million in November 2022. We also agreed to conduct a rights offering for up to 18,750,000 shares of newly issued common stock (the “Rights Offering”). In connection with the completion of the Rights Offering, in accordance with the terms of the Note Purchase Agreement, the Notes converted into 15,821,299 shares of our common stock in November 2022, representing approximately 76.3% of our outstanding common stock as of the date of conversion and resulting in a change of control of the Company.

On June 24, 2022, in connection with the Note Purchase Agreement, we also entered into an Investors’ Rights Agreement (the “NPA Investors’ Rights Agreement”) with the PSC Stockholder, pursuant to which, among other things, the PSC Stockholder has the right to nominate a number of directors (“Investor Directors”) to our Board that is proportionate to the PSC Stockholder’s ownership of the Company, which will be rounded up to the nearest whole number (and shall in no event be less than one). The PSC Stockholder has the right to nominate six directors to our Board as of March 31, 2023. The PSC Stockholder has exercised its right to nominate three Investor Directors: Trit Garg, M.D., Karr Narula and Justin Sabet-Peyman.

Controlled Company Exemption

Patient Square Capital beneficially owns more than 50% of the combined voting power for the election of directors. As a result, we are a “controlled company” within the meaning of the Listing Rules. For so long as we qualify as a controlled company, we may, at our sole election, rely upon the Listing Rules exemptions applicable to controlled companies including, but not limited to, the following requirements:

•	that a majority of our Board consist of directors who qualify as “independent” as defined under the Listing Rules;

•	that we have a Nominating and Corporate Governance Committee that it is composed entirely of independent directors; and

•	that we have a Compensation Committee that it is composed entirely of independent directors.

Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of these corporate governance requirements. In the event that we cease to be a “controlled company” and our shares continue to be listed on Nasdaq, we will be required to comply with these provisions within the applicable transition periods.

Leadership Structure of the Board

Our Amended and Restated Bylaws and Corporate Governance Guidelines provide our Board with flexibility to combine or separate the positions of Chair of the Board and Chief Executive Officer and to implement a lead director in accordance with its determination regarding which structure would be in the best interests of our Company. Currently, our Chief Executive Officer and Chair positions are separate. Our Board has separated the roles of Chief Executive Officer and Chair on the basis that such separation promotes independent and effective oversight of management, particularly on key issues such as long-term strategic planning and risk management. Furthermore, this separation provides for focused engagement between these two roles in their respective areas of responsibility, while still providing for collaborative participation.

Our Board has concluded that our current leadership structure is appropriate at this time. However, our Board will continue to periodically review our leadership structure and may make such changes in the future as it deems appropriate.

Role of Board in Risk Oversight Process

Risk assessment and oversight are an integral part of our governance and management processes. Our Board encourages management to promote a culture that incorporates risk management into our corporate strategy and day-to-day business operations. Management discusses strategic and operational risks at regular management meetings and conducts specific strategic planning and review sessions during the year that include a focused discussion and analysis of the risks facing us. Throughout the year, senior management reviews these risks with the Board at regular Board meetings as part of management presentations that focus on particular business functions, operations or strategies, and presents the steps taken by management to mitigate or eliminate such risks.

Our Board administers its risk oversight function directly, as well as through various standing committees of our Board that address risks inherent in their respective areas of oversight. While our Board is responsible for monitoring and assessing strategic risk exposure, our Audit Committee is responsible for overseeing our major financial risk exposures, as well as cybersecurity risks, and the steps our management has taken to monitor and control these exposures and risks. The Audit Committee also approves or disapproves any related person transactions. Our Nominating and Corporate Governance Committee monitors the effectiveness of our Corporate Governance Guidelines. Our Compensation Committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.

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CORPORATE GOVERNANCE (continued)

Board Meetings and Information Regarding Committees of the Board of Directors

During 2022, our Board met 42 times. The Compensation Committee met eight times in 2022, the Nominating and Corporate Governance met seven times in 2022 and the Audit Committee met ten times in 2022. During 2022, each Board member attended at least 75% of the meetings of the Board and of the committees of the Board on which he or she served, in each case, to the extent such individual was a member of the Board and the relevant committee at the time of each meeting. We encourage all of our directors and nominees for director to attend our annual meeting of stockholders; however, attendance is not mandatory.

Our Board of Directors has established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Our Board may establish other committees to facilitate the management of our business. The composition and functions of each committee are described below. Members serve on these committees until their resignation or until otherwise determined by our Board. Each of these committees operates under a written charter that satisfies the applicable rules and regulations of the SEC and Listing Rules and that has been approved by our Board. These written charters are available in the Investor Relations section of our website at https://ir.eargo.com. Website addresses are provided as inactive textual references only. The information provided on or accessible through any website referenced in this Proxy Statement is not a part of, and is not incorporated by any reference into, this Proxy Statement.

Board Diversity Matrix

The following table sets forth Board level diversity information based on voluntary self-identification of our seven current directors, as of March 31, 2023.

Board Diversity Matrix (as of March 31, 2023)
Gender Identity	Female	Male	Non-Binary	Did Not Disclose
Directors	1	6	0	0
Demographic Background
African American or Black	0	0	0	0
Alaskan Native or Native American	0	0	0	0
Asian	0	2	0	0
Hispanic or Latinx	0	0	0	0
Native Hawaiian or Pacific Islander	0	0	0	0
Middle Eastern or North African	0	1
White	1	2	0	0
Two or More Races or Ethnicities	0	1	0	0
LGBTQ+	0
Did Not Disclose Demographic Background	0

Audit Committee

Our Audit Committee oversees our corporate accounting and financial reporting process. Among other matters, the Audit Committee:

•	appoints our independent registered public accounting firm;

•	evaluates the independent registered public accounting firm’s qualifications, independence and performance;

•	determines the engagement of the independent registered public accounting firm;

•	reviews and approves the scope of the annual audit and pre-approves the audit and non-audit fees and services;

•	reviews and approves all related party transactions on an ongoing basis;

•	establishes procedures for the receipt, retention and treatment of any complaints received by the Company regarding accounting, internal accounting controls or auditing matters;

•	discusses with management and the independent registered public accounting firm the results of the annual audit and the review of our quarterly financial statements;

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•	approves the retention of the independent registered public accounting firm to perform any proposed permissible non-audit services;

•	discusses on a periodic basis, or as appropriate, with management the Company’s policies and procedures with respect to risk assessment and risk management;

•	is responsible for reviewing our financial statements and our management’s discussion and analysis of financial condition and results of operations to be included in our annual and quarterly reports to be filed with the SEC;

•	investigates any reports received through the ethics helpline and reports to the Board periodically with respect to any information received through the ethics helpline and any related investigations; and

•	reviews the Audit Committee charter and the Audit Committee’s performance on an annual basis.

Our Audit Committee consists of Katie Bayne, Donald Spence and David Wu. Our Board has determined that all members are independent under the Listing Rules and Rule 10A-3(b)(1) of the Exchange Act. The chair of our Audit Committee is David Wu. Our Board has determined that Mr. Wu is an “audit committee financial expert” as such term is currently defined in Item 407(d)(5) of Regulation S-K. Our Board has also determined that each member of our Audit Committee can read and understand fundamental consolidated financial statements, in accordance with the Listing Rules.

Report of the Audit Committee of the Board of Directors

The Audit Committee has reviewed and discussed the audited financial statements for the fiscal year ended December 31, 2022 with management of the Company. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The Audit Committee has also received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the audit committee concerning independence, and has discussed with the independent registered public accounting firm the accounting firm’s independence. Based on the foregoing, the Audit Committee has recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Respectfully Submitted,

The Audit Committee of the Board of Directors

David Wu, Chair

Katie Bayne

Donald Spence

The Report of the Audit Committee of the Board of Directors is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

Compensation Committee

Our Compensation Committee oversees policies relating to compensation and benefits of our officers and employees. The Compensation Committee reviews and approves or recommends corporate goals and objectives relevant to compensation of our executive officers (other than our Chief Executive Officer), evaluates the performance of these officers in light of those goals and objectives, and approves the compensation of these officers based on such evaluations. The Compensation Committee also reviews and approves or makes recommendations to our Board regarding the issuance of stock options and other awards under our stock plans to our executive officers (other than our Chief Executive Officer). The Compensation Committee reviews the performance of our Chief Executive Officer and makes recommendations to our Board with respect to his compensation, and our Board retains the authority to make compensation decisions relative to our Chief Executive Officer. The Compensation Committee reviews and evaluates, on an annual basis, the Compensation Committee charter and the Compensation Committee’s performance. The Compensation Committee has the authority to engage the services of outside consultants. For fiscal year 2022, the Compensation Committee retained Aon, a national compensation consulting firm, as its independent compensation consultant. Services provided by the independent compensation consultant during this period included reviewing and recommending changes to our peer group, as necessary; reviewing director, executive and senior officer compensation based on an analysis of market-based compensation data of comparable public companies; and providing general information concerning director and executive compensation trends and developments. To facilitate the delivery of these services to the

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Compensation Committee, Aon interfaces with our management, primarily with our Chief Financial Officer, Chief Legal Officer and Senior Vice President of People Operations. In April 2023, our Compensation Committee reviewed Aon’s independence under applicable SEC and Listing Rules. Our Compensation Committee concluded that Aon is independent within the meaning of such rules and that its engagement did not present any conflict of interest.

Our Compensation Committee consists of Trit Garg, M.D., Justin Sabet-Peyman and David Wu. We currently avail ourselves of the “controlled company” exemption under the Listing Rules, pursuant to which we are exempt from the requirement to have a compensation committee that is composed entirely of independent directors. No member of the Compensation Committee is, or was in 2022, an executive officer of the Company. The chair of our Compensation Committee is Mr. Sabet-Peyman.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee is responsible for making recommendations to our Board regarding candidates for directorships and the size and composition of our Board. With the goal of developing a diverse, independent and highly qualified Board, the Nominating and Corporate Governance Committee evaluates candidates in accordance with the qualification standards and selection criteria set forth in our Corporate Governance Guidelines. Evaluations of candidates generally involve a review of background materials, internal discussions and interviews with selected identified candidates, as appropriate. Candidates for the Board are generally selected based on desired skills and experience in the context of the existing composition of the Board and needs of the Board and its committees at that time, including the requirements of applicable SEC rules and the Listing Rules and the PSC Stockholder’s rights to nominate directors under the NPA Investors’ Rights Agreement. When considering candidates for nomination, the Nominating and Corporate Governance Committee may take into consideration many factors, including, among other things, a candidate’s experience with corporate management, public company board membership, professional and academic experience, leadership skills, finance and accounting and/or executive compensation experience, and ability to devote adequate time and effort to responsibilities of the Board in the context of its existing composition. We believe it is important to have a diverse Board and, as such, our Corporate Governance Guidelines provide for the consideration of candidates’ background, gender, age and ethnicity. Our Nominating and Corporate Governance Committee considers these and other factors as it oversees Board and committee evaluations, and as it recommends nominees to our full Board for election. The Nominating and Corporate Governance Committee is also responsible for overseeing our corporate governance policies and making recommendations to our Board concerning governance matters, including assisting the Board in its assessment of the independence of our directors.

Our Nominating and Corporate Governance Committee consists of Katie Bayne, Trit Garg, M.D. and Justin Sabet-Peyman. We currently avail ourselves of the “controlled company” exemption under the Listing Rules, pursuant to which we are exempt from the requirement to have a nominating and corporate governance committee that is composed entirely of independent directors. The chair of our Nominating and Corporate Governance Committee is Mr. Sabet-Peyman.

Stockholder Nominations

The Nominating and Corporate Governance Committee will consider written nominations of director nominees from stockholders. Notice of any such nomination must be submitted to the Secretary of the Company and must include the information and comply with the timing requirements set forth in our Amended and Restated Bylaws. In order for a stockholder to nominate a director nominee for election at our 2024 annual meeting of stockholders, a stockholder must submit the required notice under our Amended and Restated Bylaws between February 8, 2024 and March 9, 2024; provided that if the date of that annual meeting is more than 30 days before or more than 60 days after June 7, 2024, a stockholder wishing to provide notice of a director nomination must give the required notice not later than the 90^th day prior to the annual meeting date or, if later, the 10^th day following the day on which public disclosure of the annual meeting date is first made. Additionally, a stockholder who intends to solicit proxies in reliance on the SEC’s universal proxy rule for director nominees submitted under the advance notice provisions of our Amended and Restated Bylaws must comply with the additional requirements of Rule 14a-19(b).

Hedging and Pledging Policy

Our Insider Trading Policy prohibits officers, directors, employees and designated consultants of the Company and its subsidiaries from purchasing our securities on margin, pledging the Company’s securities as collateral to secure loans, holding our securities in margin accounts, hedging or monetization transactions, including through the use of financial instruments such as zero-cost collars and forward sale contracts, trading in puts, calls or other derivative securities involving the Company’s equity securities, on an exchange or in any other organized market, or engaging in short selling of our securities.

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Stockholder Communications with the Board

Our Board believes that stockholders should have an opportunity to communicate with the Board, and efforts have been made to ensure that the views of stockholders are heard by the Board or individual directors, as applicable, and that appropriate responses are provided to stockholders in a timely manner. Stockholders wishing to communicate with the Board or an individual director may send a written communication to the Board or such director c/o Attn: Secretary, 2665 North First Street, Suite 300, San Jose, California 95134. The Secretary will review each communication. The Secretary will forward such communication to the Board or to any individual director to whom the communication is addressed unless the communication contains advertisements or solicitations or is unduly hostile, threatening or otherwise inappropriate, in which case the Secretary will not provide the communication to members of the Board.

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Other than compensation arrangements, including employment arrangements, with our directors and executive officers, including those discussed in “Executive Compensation” and “Director Compensation,” the following is a description of each transaction since January 1, 2021 in which:

•	we were a party or will be a party;

•	the amounts involved exceeds the lesser of (i) $120,000 and (ii) one percent of the average of our total assets at year-end for the last two completed fiscal years; and

•	any of our directors, executive officers or holders of more than 5% of our capital stock, or an affiliate or immediate family member thereof, had or will have a direct or indirect material interest.

Patient Square Capital Transaction

Overview

On June 24, 2022, we entered into the Note Purchase Agreement with the PSC Stockholder and the Administrative Agent. Pursuant to the Note Purchase Agreement, we agreed to issue and sell up to $125.0 million in Notes, of which we issued $100.0 million in June 2022 and approximately $5.5 million in November 2022. We also agreed to conduct the Rights Offering for up to 18,750,000 newly issued shares of common stock. In connection with the completion of the Rights Offering, in accordance with the terms of the Note Purchase Agreement, the Notes converted into 15,821,299 shares of our common stock (the “Conversion Shares”) in November 2022, representing approximately 76.3% of our outstanding common stock as of the date of conversion and resulting in a change of control of the Company.

As of March 31, 2023, the PSC Stockholder held 15,821,299 shares, representing approximately 76.3% of our outstanding common stock.

NPA Investors’ Rights Agreement

On June 24, 2022, in connection with the Note Purchase Agreement, we also entered into the NPA Investors’ Rights Agreement with the PSC Stockholder, pursuant to which, among other things, we granted the PSC Stockholder certain governance, information and other rights.

The PSC Stockholder has the right to nominate the number of Investor Directors to our Board that is proportionate to the PSC Stockholder’s ownership of the Company, rounded up to the nearest whole number (and in no event be less than one). As of March 31, 2023, the PSC Stockholder has the right to nominate six directors to our Board. The PSC Stockholder has exercised its right to nominate three Investor Directors, Trit Garg, M.D., Karr Narula and Justin Sabet-Peyman, each of whom became directors effective as of December 7, 2022.

We have entered into an indemnification agreement with each Investor Director (the “Investor Director Indemnification Agreement”). The Investor Director Indemnification Agreement generally requires us, among other things, to indemnify each Investor Director against certain liabilities that may arise by reason of their status or service as a director. The Investor Director Indemnification Agreement also generally requires us to advance any expenses incurred by each Investor Director as a result of any proceeding against them as to which they could be indemnified. These indemnification provisions and the Investor Director Indemnification Agreements may be sufficiently broad to permit indemnification of each Investor Director for liabilities, including reimbursement of expenses incurred, arising under the Securities Act of 1933, as amended (the “Securities Act”).

Registration Rights Agreement

One June 28, 2022, we and the PSC Stockholder also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which, among other things, we granted the PSC Stockholder certain customary demand and piggyback registration rights. Under the Registration Rights Agreement, we agreed to use our reasonable best efforts to file a registration statement providing for the resale of the Conversion Shares within ten business days of the completion of the Rights Offering, and to maintain its effectiveness thereafter for so long as any registrable securities remain outstanding. On December 16, 2022, we filed a registration statement on Form S-1 (File No. 333-268859) (as amended, the “PSC Resale Registration Statement”) to register the Conversion Shares. The PSC Resale Registration Statement became effective on February 13, 2023.

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Policies and Procedures for Related Person Transactions

Our Board has adopted a written related-person transaction policy, setting forth the policies and procedures for the review and approval or ratification of related-person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, where the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. In reviewing and approving any such transactions, our Audit Committee is tasked to consider all relevant facts and circumstances, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in an arm’s length transaction with an unrelated third party and the extent of the related person’s interest in the transaction. All of the transactions described above occurred prior to the adoption of this policy.

Indemnification Agreements

We have entered into indemnification agreements with certain of our current directors, executive officers and certain other employees. Our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws provide that we will indemnify our directors and officers to the fullest extent permitted by applicable law.

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Director Compensation Program

Pursuant to the compensation policy for our non-employee directors (the “Director Compensation Program”), which became effective in October 2020 in connection with our IPO, our non-employee directors receive cash compensation as follows:

•	Each non-employee director receives an annual cash retainer in the amount of $40,000 per year.

•	The non-executive Chairperson receives an additional annual cash retainer in the amount of $35,000 per year.

•

The chairperson of the Audit Committee receives additional annual cash compensation in the amount of $20,000 per year for such chairperson’s service on the Audit Committee. Each non-chairperson member of the Audit Committee receives additional annual cash compensation in the amount of $10,000 per year for such member’s service on the Audit Committee.

•

The chairperson of the Compensation Committee receives additional annual cash compensation in the amount of $15,000 per year for such chairperson’s service on the Compensation Committee. Each non-chairperson member of the Compensation Committee receives additional annual cash compensation in the amount of $7,500 per year for such member’s service on the Compensation Committee.

•

The chairperson of the Nominating and Corporate Governance Committee receives additional annual cash compensation in the amount of $10,000 per year for such chairperson’s service on the Nominating and Corporate Governance Committee. Each non-chairperson member of the Nominating and Corporate Governance Committee receives additional annual cash compensation in the amount of $5,000 per year for such member’s service on the Nominating and Corporate Governance Committee.

Under the Director Compensation Program as in effect as of October 2020, each non-employee director would also automatically be granted (i) an option to purchase that number of shares of our common stock calculated by dividing (a) $200,000 by (b) the per share grant date fair value of the option, calculated based on the 30 trading day average closing price of our common stock as of the date of grant (or if the date of grant is not a trading day, the immediately preceding trading day) and using assumptions published in our most recent periodic report as of the date of grant, rounded down to the nearest whole share, upon the director’s initial appointment or election to our Board, referred to as the Initial Grant, and (ii) for each non-employee director who has served for at least 6 months as of the date of each annual meeting, an option to purchase that number of shares of our common stock calculated by dividing (a) $120,000 by (b) the per share grant date fair value of the option, calculated based on the 30 trading day average closing price of our common stock as of the trading day immediately preceding the date of grant and using assumptions published in our most recent periodic report as of the date of grant, rounded down to the nearest whole share, automatically on the date of each annual meeting thereafter, referred to as the Annual Grant. The Initial Grants vest and become exercisable as to 1/36th of the underlying shares on a monthly basis over three years, subject to continued service through each applicable vesting date. The Annual Grants vest and become exercisable as to 1/12th of the underlying shares on each monthly anniversary of the applicable date of grant, provided, that if our annual meeting immediately following the date of grant takes place prior to the first anniversary of the date of grant, the Annual Grants vest and become exercisable immediately prior to our annual meeting following the date of grant, subject to continued service through each applicable vesting date.

In the event of a change in control (as defined under the Director Compensation Program), each Initial Grant and Annual Grant, along with any other stock options or equity-based awards held by any non-employee director, will vest and become exercisable, as applicable, immediately prior to such change in control.

As a result of the uncertainty created by the United States Department of Justice’s (the “DOJ”) investigation related to insurance claims submitted for reimbursement to various federal employee health plans under the Federal Employee Health Benefits program, of which we became aware on September 21, 2021, and the various claims audits initiated by various third-party payors, the Board determined to suspend the non-employee director compensation program with respect to the option awards that would otherwise have been awarded to non-employee directors automatically on the date of the Company’s annual meeting of stockholders held on November 9, 2021. On April 29, 2022, we entered into a civil settlement agreement with the U.S. government that resolved the DOJ investigation.

In August 2022, in accordance with recommendations from the Compensation Committee’s independent compensation consultant, the Human Capital Solutions division of Aon plc (“Aon”), the Board determined to grant each non-employee director an option having a grant date fair value of $120,000, the same grant date fair value a director would have received under the Director Compensation Program following our 2021 annual meeting of stockholders had such program not been suspended, but calculated based on the average closing trading price of our common stock from January 1, 2022 through the date of grant instead of using the trailing 30-day average closing trading price as of the date of grant, which was lower and would have resulted in a larger option grant. Aon also recommended that the stock options vest in twelve substantially equal monthly installments measured from November 9, 2021, the date of the 2021 annual meeting of stockholders, subject to continued service through the applicable vesting date, and that vested options remain outstanding and exercisable until the later of December 31, 2024 or 3 months following a termination of service. Accordingly, on August 23, 2022, we granted each non-employee director an option to purchase 3,740 shares of our common stock with an exercise price per share equal to $49.60 the closing trading price of our common stock on August 23, 2022, on the terms recommended by Aon.

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Also in August 2022, in accordance with the recommendation of Aon, the Board modified the Director Compensation Program to provide that the grant date fair value of the option to be granted automatically to continuing directors on the date of the 2022 annual meeting of stockholders be calculated using the greater of $60.00 per share or, in accordance with the terms of the Director Compensation Program, the trailing 30-day average closing trading price as of the day prior to the date of the 2022 annual meeting of stockholders, or October 12, 2022. Accordingly, on October 12, 2022, we granted each non-employee director an option to purchase 3,703 shares of our common stock with an exercise price per share equal to $14.00, on the terms recommended by Aon.

In connection with the completion of the Rights Offering, in accordance with the terms of the Note Purchase Agreement, the Notes converted into 15,821,299 shares of our common stock (the “Conversion Shares”) in November 2022, representing approximately 76.3% of our outstanding common stock as of the date of conversion and resulting in a change of control of the Company. Each Initial Grant and Annual Grant under the Director Compensation Program vested and became exercisable, as applicable, immediately prior to such change in control in accordance with the program.

On December 2, 2022, the Board appointed Donald Spence as Class II director and Chair of the Board, as well as three Investor Directors: Trit Garg, M.D. as a Class I director, Karr Narula as a Class III director and Justin Sabet-Peyman as a Class II director, in each case, effective as of December 7, 2022. In connection with such appointments, the Board determined to grant each of the Investor Directors and Mr. Spence an option to purchase that number of shares of the Company’s common stock calculated by dividing $200,000 by the per share grant date fair value of the option, provided, that the price per share at which the grant date fair value will be calculated is the greater of $60.00 or the 30-trading day average closing price of the Company’s common stock as of December 6, 2022. Accordingly, on December 7, 2022, we granted to each of the Investor Directors and Mr. Spence an option to purchase 5,859 shares of our common stock with an exercise price per share equal to $14.60.

In April 2023, in response to the sustained volatility of our share price and in accordance with the recommendation of Aon, the Board amended the Director Compensation Program to include a ceiling on the number of shares underlying Annual Grants made to non-employee directors. Effective immediately, each non-employee director who has served on our Board for at least six months as of the date of each annual meeting, including the upcoming Annual Meeting, will be awarded an option on the date of such annual meeting, with the number of shares subject to each option equal to the lesser of (i) 5,000 and (ii) the number determined by dividing (a) $120,000 by (b) the per share grant date fair value of the option, calculated based on the 30 trading day average closing price of our common stock as of the trading day immediately preceding the date of grant and using assumptions published in our most recent periodic report as of the date of grant.

2022 Director Compensation Table

The following table sets forth information regarding the compensation earned for service as a non-employee director on our Board during the year ended December 31, 2022. The compensation for Mr. Gormsen, as a named executive officer, is set forth above under “—Summary Compensation Table.”

Name⁽¹⁾	Fees earned or paid in cash ($)⁽²⁾	Option awards ($)⁽³⁾	Total ($)
Donald Spence	$5,775	$49,075	$54,850
Josh Makower, M.D.	90,530	129,064	219,594
Katie Bayne	45,679	129,064	174,743
Peter Tuxen Bisgaard	34,062	—	34,062
Trit Garg, M.D.	3,566	49,075	52,641
Doug Hughes	46,739	129,064	175,803
Karr Narula	2,718	49,075	51,793
Nina Richardson	37,174	100,232	137,406
Justin Sabet-Peyman	4,416	49,075	53,491
A. Brooke Seawell	56,087	129,064	185,150
David Wu	51,190	129,064	$180,253

(1)

Peter Tuxen Bisgaard resigned from our Board on August 3, 2022. Nina Richardson’s term as a director expired on October 12, 2022, at the 2022 annual meeting of stockholders. Each of Josh Makower, M.D., Doug Hughes and A. Brooke Seawell resigned from our Board, effective as of December 7, 2022. On December 2, 2022, the Board appointed Donald Spence as well as three Investor Directors: Trig Garg, M.D., Karr Narula and Justin Sabet-Peyman, each effective as of December 7, 2022.

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(2)

These amounts include fees earned in 2022 and paid in 2023 in accordance with our Director Compensation Program, described above. Amounts earned by Messrs. Spence, Bisgaard, Hughes and Seawell and Mses. Bayne and Richardson were paid to them directly. Amounts earned by Dr. Makower were paid to NEA Management Company LLC; amounts earned by Dr. Garg and Messrs. Narula and Sabet-Peyman were paid to Patient Square Capital; and certain amounts earned by Mr. Wu were paid to Maveron LLC.

(3)

Amounts reported represent the aggregate grant date fair value of stock option granted to our non-employee directors during 2022, including initial grants to Messrs. Spence, Narula and Sabet-Peyman and Dr. Garg under our 2020 Plan (as defined below and such grants described in detail above), computed in accordance with ASC Topic 718. Assumptions used in the calculation of the amounts are included in Notes 2 and 9 to our audited consolidated financial statements included in the Form 10-K. As of December 31, 2022, our non-employee directors held the following outstanding options:

	Name			Shares subject to outstanding options (#)
	Donald Spence			5,859
	Josh Makower, M.D.			7,776
	Katie Bayne			7,959
	Peter Tuxen Bisgaard			—
	Trig Garg, M.D.			5,859
	Doug Hughes			8,918
	Karr Narula			5,859
	Nina Richardson			6,581
	Justin Sabet-Peyman			5,859
	A. Brooke Seawell			8,918
	David Wu			7,776

None of our non-employee directors held unvested stock awards as of December 31, 2022.

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The following table sets forth certain information with respect to our executive officers:

Name	Age	Position(s)
Executive Officers
Christian Gormsen⁽¹⁾	46	President, Chief Executive Officer and Director
William Brownie	56	Chief Operating Officer
Adam Laponis	46	Chief Financial Officer

(1)	Please see “Proposal No. 1 – Election of Directors – Directors Continuing in Office Until the 2024 Annual Meeting of Stockholders” for Mr. Gormsen’s biography.

Executive Officers

William Brownie has served as our Chief Operating Officer since April 2019. From August 2016 through March 2019, Mr. Brownie served as our Chief Customer Operations Officer. In addition, from January 2017 to June 2019 he served as our Chief Financial Officer. From June 2015 to August 2016, Mr. Brownie served as an independent consultant to various companies. From January 2012 to June 2015, Mr. Brownie served as the Managing Director at Sonova e-Hearing Care, a group company of Sonova AG, a provider of hearing care products. Prior to that, from August 2001 to December 2011, Mr. Brownie served as Chief Financial Officer and then President and Chief Executive Officer of HearingPlanet Inc., which was purchased by Sonova AG. Mr. Brownie received a B.S. in business administration from San Diego State University-California State University.

Adam Laponis has served as our Chief Financial Officer since June 2019. From November 2018 to March 2019, Mr. Laponis served as Vice President of Financial Planning and Analysis for Tesla, an automotive and energy company, where he previously served as Senior Director of Finance from April 2017 to November 2018. Prior to that, he served as the Vice President and Chief Financial Officer of Cardiovascular Care of Cardinal Health, a healthcare services and products company, from October 2015 to April 2017. Prior to that, he served in various financial roles at Johnson & Johnson, a healthcare company, from August 2004 to October 2015. Mr. Laponis received a B.S. in chemical engineering from the University of California, Berkeley and his M.B.A. from the University of Southern California.

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Introduction

This executive compensation section provides an overview of our executive compensation program for our named executive officers (“NEOs”) for our fiscal year ended December 31, 2022. In 2022, all of our executive officers were NEOs, as set forth below:

•	Christian Gormsen, our President and Chief Executive Officer;

•	William Brownie, our Chief Operating Officer; and

•	Adam Laponis, our Chief Financial Officer.

As a “smaller reporting company” under SEC rules, we are not required to include a Compensation Discussion and Analysis section and have elected to comply with the scaled disclosure requirements applicable to smaller reporting companies.

Summary Compensation Table

The following table provides information regarding the compensation awarded to, earned by, or paid to our NEOs for services rendered in all capacities during the years ended December 31, 2022 and December 31, 2021.

Name and principal position	Year	Salary ($)⁽¹⁾	Stock awards ($)⁽²⁾	Option awards ($)⁽²⁾	Non-equity incentive plan compensation ($)⁽³⁾	All other compensation ($)⁽⁴⁾	Total ($)
Christian Gormsen President and Chief Executive Officer	2022	550,000	—	—	440,000	1,200	991,200
Christian Gormsen President and Chief Executive Officer	2021	537,101	3,201,416	1,690,280	110,000	1,200	5,539,997
William Brownie Chief Operating Officer	2022	390,000	—	—	234,000	1,200	625,200
William Brownie Chief Operating Officer	2021	368,750	867,570	458,610	58,500	1,200	1,754,630
Adam Laponis Chief Financial Officer	2022	390,000	—	—	195,000	1,200	586,200
Adam Laponis Chief Financial Officer	2021	368,750	867,570	457,898	48,750	1,200	1,744,168

(1)	The amount reported for Mr. Gormsen in 2021 includes a housing allowance of $25,000 that does not require substantiation and is indistinguishable from base salary. The housing allowance was discontinued on February 28, 2021.

(2)

In accordance with SEC rules, these columns reflect the aggregate grant date fair value of the stock awards and stock options granted during fiscal year 2021, computed in accordance with ASC 718 for stock-based compensation transactions. These amounts do not reflect the actual economic value realized by our NEOs. For a discussion of the valuation of the equity awards, including the assumptions used, see Notes 2 and 9 to our audited consolidated financial statements included in the Form 10-K for a discussion of these awards.

(3)

The amounts reported for 2021 represent the annual bonus earned by each NEO based on the timely launch of the Eargo 6. The amounts reported for 2022 represent the annual bonus earned by each NEO based on the achievement of corporate performance goals relating to milestones related to debt reduction.

(4)	The amounts reported represent a $100 per month technology stipend provided to all employees of the Company.

Elements of Executive Compensation

Our current executive compensation program generally consists of the following components:

•	base salary;

•	annual cash performance-based compensation;

•	equity-based incentive awards; and

•	other benefits as may be determined from time to time.

We combine these elements to formulate compensation packages intended to provide competitive pay, reward achievement of financial, operational, and strategic objectives, and align the interests of our executive officers with those of our stockholders. The overall use and weight of each compensation element is based on our Compensation Committee’s subjective determination of the importance of each element in meeting our overall objectives, including motivating executive officers with an owner’s mentality.

Base Salary

Base salaries for our NEOs are initially established through arm’s-length negotiations at the time of the NEO’s hiring, taking into account such NEO’s qualifications and experience, the scope of his responsibilities and competitive market compensation paid by other

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EXECUTIVE COMPENSATION (continued)

companies for similar positions within the industry and geography. Base salaries are reviewed periodically, typically in connection with our Compensation Committee’s annual performance review process, and adjusted from time to time to realign salaries with market levels after taking into account individual responsibilities, performance and experience.

In 2022, in response to the uncertainty created by the DOJ investigation and the various claims audits initiated by various third-party payors, the Compensation Committee determined not to change the base salary compensation of our NEOs from the prior year.

	Name			2022 base salary
	Christian Gormsen			$550,000
	William Brownie			390,000
	Adam Laponis			390,000

Annual Performance-Based Compensation

Annual bonus opportunities are intended to motivate our executives to achieve short-term performance goals, which the Compensation Committee believes ultimately serves to advance our overall long-term strategic objectives and creation of stockholder value. The 2022 annual target bonus amounts for each of Mr. Gormsen, Mr. Brownie and Mr. Laponis were set at 80%, 60% and 50%, of their respective salary levels. These amounts remained unchanged from the prior year.

Actual bonuses paid to our executive officers have historically been based on achievement of pre-established corporate performance goals approved by the Compensation Committee and Board at the beginning of the fiscal year. In 2022, due to the ongoing impact of, and uncertainty created by, the DOJ investigation, the Compensation Committee and Board modified such corporate performance goals following the issuance of $100 million in convertible notes to Patient Square Capital in June 2022. For 2022, actual bonuses paid to our NEOs were based on 100% achievement of milestones in 2022 related to debt reduction. Each NEO earned 100% of the NEO’s target annual bonus opportunity, which was $440,000, $234,000, and $195,000 for Mr. Gormsen, Mr. Brownie and Mr. Laponis, respectively.

Long-Term Incentive Compensation—Equity-based Incentive Awards

Long-term equity incentive grants are a meaningful retentive component of our compensation program. Our equity incentives are also intended to promote an ownership culture while aligning the long-term interests of our executive officers with those of our stockholders. For 2021, NEOs were granted equity awards with a mix of 50% stock options and 50% restricted stock units (“RSUs”) with respect to the total number of underlying shares.

Stock options are granted with an exercise price based on the closing price of the Company’s common stock on the date of grant (as quoted on the Nasdaq). Historically, the stock option and RSU grants have vested generally over a four-year period, subject to continued service and accelerated vesting terms in the event of certain qualifying terminations of employment, including in connection with a change in control of the Company. The value of these awards that may be realized by our NEOs will vary depending on the price of our common stock and may differ from the amounts reported above and in the Summary Compensation Table above.

In 2022, in response to the uncertainty created by the DOJ investigation and the various claims audits initiated by various third-party payors, we did not make any grants of equity awards to our NEOs.

In February 2023, the Compensation Committee approved stock option grants to employees, including the NEOs (the “February 2023 Grants”), with vesting of 50% of the grant amounts tied to attainment of a pre-established stock price hurdle in addition to service-vesting conditions and 50% of the grant amount tied to service-vesting conditions. The service-vesting portion of each stock option grant vests as to 20% of the shares subject to the stock option on February 15, 2024, with the remainder vesting in 16 equal quarterly installments thereafter subject to continued service through each such date. The remaining 50% of each grant is performance-based and vests in full upon attainment of a 360-day VWAP (volume-weighted average price) of $20 for our common stock between January 27, 2024 and February 15, 2028, subject to continued service through such date. In addition, if the amendment to the 2020 Plan (see Proposal No. 4) is not approved by stockholders at the Annual Meeting, the portion of the February 2023 Grants awarded under the additional reserve being requested under the amendment to the 2020 Plan will be forfeited.

Other Benefits

Like other employees, our NEOs are eligible to participate in the benefit plans made generally available to our employees on the same terms and conditions as our employees, including comprehensive medical, dental and vision insurance, life and disability insurance, commuter benefit program and 401(k) plan. We have not made any matching contributions under our 401(k) plan. We generally do not

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EXECUTIVE COMPENSATION (continued)

provide our NEOs with additional retirement benefits, pensions, perquisites, or other personal benefits. In the future, we may provide perquisites or other personal benefits in limited circumstances, such as where we believe it is appropriate to assist an individual executive in the performance of his or her duties, to make our executive team more efficient and effective, and for recruitment, motivation, or retention purposes. All future practices with respect to perquisites or other personal benefits for executives will be subject to review and approval by the Compensation Committee or Board.

Severance and Change in Control Benefits

The employment agreements of our NEOs provide for certain severance payments and benefits in the event of a qualifying termination, including in connection with change in control of the Company. Pursuant to the terms of these agreements, in the event the NEO is terminated without Cause or resigns for Good Reason (each, as defined in the employment agreements), in each case, other than during the period that is on or 12 months following a change in control of the Company, the NEO will be eligible to receive: (i) a lump sum cash payment equal to 1x, in the case of our Chief Executive Officer, or 0.75x, in the case of our other NEOs, the sum of the executive’s annual base salary and target annual bonus; and (ii) payment or reimbursement of COBRA premiums for 12 months, in the case of our Chief Executive Officer, or nine months, in the case of our other NEOs.

In addition, in the event the NEO is terminated without Cause or resigns for Good Reason, in each case, during the 12-month period commencing on a change in control of the Company, the NEO will be eligible to receive: (i) a lump sum cash payment equal to 2x, in the case of our Chief Executive Officer, or 1x, in the case of our other NEOs, the sum of the executive’s annual base salary and target annual bonus; (ii) payment or reimbursement of COBRA premiums for up to 24 months, in the case of our Chief Executive Officer, or up to 12 months, in the case of our other NEOs; and (iii) full accelerated vesting of all equity awards.

All severance payments and benefits under the employment agreements are subject to the NEO’s timely execution of a release of claims against us.

Hedging and Pledging Policy

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EXECUTIVE COMPENSATION (continued)

Outstanding equity awards at fiscal year-end

The following table provides information regarding the outstanding equity awards held by our NEOs as of December 31, 2022.

Name and principal position	Grant date⁽¹⁾	Vesting commencement date	Number of securities underlying unexercised options (#) (exercisable)	Number of securities underlying unexercised options (#) (unexercisable)	Equity incentive plan awards: number of securities underlying unexercised unearned options (#)⁽²⁾	Option exercise price ($)	Option expiration date	Number of shares or units of stock that have not vested (#)	Market value of shares or units of stock that have not vested ($)⁽³⁾
Christian Gormsen President and Chief Executive Officer	4/22/2014		54	—	—	$25.80	4/22/2024
	11/20/2014		550	—	—	25.80	11/20/2024
	9/1/2016		1,856	—	—	25.80	9/1/2026
	10/11/2016		1,856	—	—	25.80	10/11/2026
	7/12/2017	7/12/2017	—	—	927	25.80	7/11/2027
	11/29/2017	11/29/2017	21,895	—	—	25.80	11/28/2027
	11/3/2018	4/24/2019⁽⁴⁾	2,166	—	—	28.20	11/2/2028
	4/24/2019	4/24/2019⁽⁵⁾	11,486	—	—	51.00⁽⁶⁾	4/23/2029
	4/24/2019	2/26/2020⁽⁷⁾	2,958	—	—	51.00⁽⁶⁾	4/23/2029
	8/3/2020	8/3/2020⁽⁸⁾	12,909	9,222	—	51.00	8/2/2030
	8/20/2020	8/20/2020⁽⁸⁾	14,733	10,527	—	51.00	8/19/2030
	2/3/2021	2/15/2021⁽¹⁰⁾	1,110	1,429	—	1,260.40	2/2/2031
	2/3/2021	2/15/2021⁽¹¹⁾						1,429	16,434
William Brownie Chief Operating Officer	9/1/2016		20	—	—	25.80	9/1/2026
	2/14/2017	2/14/2017	15	—	—	25.80	2/13/2027
	7/12/2017		7	—	—	25.80	7/11/2027
	7/12/2017	7/12/2017	—	—	464	25.80	7/11/2027
	11/29/2017	11/29/2017	2,976	—	—	25.80	11/28/2027
	11/3/2018	4/24/2019⁽⁴⁾	382	—	—	28.20	11/2/2028
	4/24/2019	4/24/2019⁽⁵⁾	1,607	—	—	51.00⁽⁶⁾	4/23/2029
	4/24/2019	2/26/2020⁽⁷⁾	520	—	—	51.00⁽⁶⁾	4/23/2029
	8/3/2020	8/3/2020⁽⁸⁾	3,977	2,840	—	51.00	8/2/2030
	8/20/2020	8/20/2020⁽⁸⁾	4,581	3,276	—

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	INFORMATION ABOUT THE PROXY PROCESS AND VOTING			2
	PROPOSAL NO. 1 ELECTION OF DIRECTORS			7
	PROPOSAL NO. 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			11
	CORPORATE GOVERNANCE			12
	CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS			18
	DIRECTOR COMPENSATION			20
	INFORMATION REGARDING EXECUTIVE OFFICERS			23
	EXECUTIVE COMPENSATION			24
	PROPOSAL NO. 3 APPROVAL, ON AN ADVISORY, NON-BINDING BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS			31
	PROPOSAL NO. 4 AMENDMENT TO THE EARGO, INC. 2020 INCENTIVE AWARD PLAN			32
	INFORMATION ABOUT STOCK OWNERSHIP			38
	ADDITIONAL INFORMATION			41

SEC Form DEF 14A filed by Eargo Inc.