Vor Biopharma Inc. Stock Compensation Disclosure

8. Stock-Based Compensation

2023 Inducement Plan

On August 25, 2023, the Company’s board of directors adopted the Company’s 2023 Inducement Plan (the “2023 Inducement Plan”) pursuant to which the Company reserved 3,500,000 shares of common stock for issuance under the 2023 Inducement Plan. The 2023 Inducement Plan provides for the grant of non-statutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance awards and other forms of stock-based compensation to eligible individuals. In accordance with Nasdaq Marketplace Rule 5635(c)(4), awards under the 2023 Inducement Plan may only be made to individuals not previously employees or directors of the Company (or following such individuals’ bona fide period of non-employment with the Company), as an inducement material to the individuals’ entry into employment with the Company. Awards granted under the 2023 Inducement Plan must be approved by either a majority of the Company’s independent directors or the compensation committee of the Company’s board of directors. As of December 31, 2024, the Company had 2,645,757 shares of its common stock available for future issuance under the 2023 Inducement Plan.

Stock Incentive Plans

In December 2015, the Company’s board of directors adopted and approved the 2015 Stock Incentive Plan (as amended to date, the “2015 Plan”). The 2015 Plan provided for the granting of incentive stock options, non-statutory stock options, restricted stock awards and other stock-based awards to eligible employees, officers, directors, consultants and advisors as determined by the Company’s board of directors.

In February 2021, the Company’s board of directors adopted and stockholders approved the 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan became effective on February 5, 2021, following which no further grants were or will be made under the 2015 Plan. In March 2024, the Company’s board of directors adopted an amendment and restatement of the 2021 Plan, which the Company’s stockholders approved in May 2024. The 2021 Plan provides for the grant of stock options, non-statutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and other forms of stock compensation to the Company's employees, consultants and directors.

The number of shares of the Company's common stock reserved for issuance under the 2021 Plan will automatically increase on January 1 of each year through January 1, 2034, by 5.0% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year. Any grants that expire or are canceled, terminated, forfeited, fail to vest, or are withheld to satisfy a tax withholding obligation are allowed to be reissued under 2021 Plan. As of December 31, 2024, the Company had 3,017,555 shares of its common stock available for future issuance under the 2021 Plan.

Option Repricing

On February 3, 2025, the Company's board of directors approved a stock option repricing whereby the exercise price of certain outstanding options to purchase shares of the Company’s common stock was reduced to $1.34 per share. The repricing applied to options to purchase shares of the Company’s common stock held by continuing employees as of February 3, 2025 that had an exercise price per share greater than $1.34; provided that holders of repriced options must remain in continuous service with the Company through February 3, 2026 or, if earlier, a change in control of the Company or 30 days prior to the applicable repriced option’s original expiration date (the “Retention Period”). If any such repriced option is exercised prior to the end of the Retention Period, the exercise price per share shall be the original exercise price per share, and not the reduced exercise price. The total number of shares underlying all repriced options is approximately 6.76 million shares. The repriced options previously had exercise prices ranging from $1.36 to $44.96 per share. The repricing had no impact on the financial results for the period ended December 31, 2024.

Stock Options

The Company’s stock options generally vest over 48 months with 25% vesting after one year followed by ratable monthly vesting over three years and have a contractual term of 10 years. The weighted-average assumptions used principally in determining the fair value of options granted were as follows:

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the common stock as of the respective date.

The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2024 and 2023 was $1.48 and $3.56 per share, respectively. As of December 31, 2024, total unrecognized compensation expense related to stock options was $8.0 million which is expected to be recognized over a weighted-average period of 2.6 years. The were no stock options exercised during the year ended December 31, 2024.

As of December 31, 2024, there were no exercised and unvested shares. As of December 31, 2023, options for 10,299 shares with a weighted average exercise price of $4.90 were exercised and unvested. As of December 31, 2023, the underlying proceeds from the unvested exercises of less than $0.1 million were recorded in other current liabilities on the consolidated balance sheet.

Restricted Stock Units

As of December 31, 2024, there were 1,308,723 restricted stock units outstanding under the 2021 Plan and the 2023 Inducement Plan. The following table summarizes the Company's unvested restricted stock unit activity for the year ended December 31, 2024:

As of December 31, 2024, total unrecognized compensation expense related to the unvested restricted stock units was $3.5 million, which is expected to be recognized over a weighted average period of 2.6 years.

2021 Employee Stock Purchase Plan

In February 2021, the Company’s board of directors adopted and stockholders approved the 2021 Employee Stock Purchase Plan (the “ESPP”). The ESPP became effective on February 5, 2021. The number of shares of common stock reserved for issuance under the ESPP will automatically increase on January 1 of each year through January 1, 2031, by the lesser of (i) 1% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year, and (ii) 1,800,000 shares. If purchase rights granted under the ESPP terminate without having been exercised, the shares of common stock not purchased under such purchase rights will again become available for issuance under the ESPP. As of December 31, 2024, the Company had 1,740,776 shares of its common stock available for future issuance under the ESPP.

The ESPP permits eligible employees to purchase common stock through accumulated payroll deductions at a purchase price equal to 85% of the lesser of the market value of the common stock at the beginning of the 6-month offering period or on the purchase date. During the years ended December 31, 2024 and 2023, the Company issued 227,844 and 82,703 shares, respectively, with a weighted average purchase price per share of $0.98 and $2.73, respectively, which resulted in an immaterial amount of compensation expense.

Stock-Based Compensation