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 Pursuant to §240.14a-12

HERON THERAPEUTICS, 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

HERON THERAPEUTICS, INC.

Notice of 2024 Annual Meeting of Stockholders

to Be Held on June 13, 2024

To the Stockholders of Heron Therapeutics, Inc.:

The 2024 Annual Meeting of Stockholders of Heron Therapeutics, Inc., a Delaware corporation (“Heron,” “Company,” “we,” “us” and “our”), will be held on June 13, 2024 at 9:00 a.m. Eastern Time exclusively via the Internet at www.virtualshareholdermeeting.com/HRTX2024, or at any adjournments or postponements thereof(the “Annual Meeting”), for the following purposes, as more fully described in the accompanying Proxy Statement:

1.
To elect six director nominees named in the accompanying Proxy Statement to serve until the 2025 Annual Meeting of Stockholders and until their successors are duly elected and qualified;

2.
To ratify the appointment of Withum Smith+Brown, PC (“Withum”) as our independent registered public accounting firm for the fiscal year ending December 31, 2024;

3.
To approve, on a nonbinding advisory basis, compensation paid to our Named Executive Officers during the fiscal year ended December 31, 2023;

4.
To amend the Company’s Certificate of Incorporation, as amended (the “Certificate of Incorporation”) to increase the aggregate number of authorized shares of the Company’s common stock, par value $0.01 per share (“common stock”) by 175,000,000 from 225,000,000 to 400,000,000;

5.
To amend the Company’s 2007 Amended and Restated Equity Incentive Plan (the “2007 Plan”), to increase the number of shares of common stock authorized for issuance thereunder by 7,500,000 from 39,190,000 to 46,690,000;

6.
To amend the Company’s 1997 Employee Stock Purchase Plan, as amended (the “ESPP”), to increase the number of shares of common stock authorized for issuance thereunder by 1,200,000 from 2,225,000 to 3,425,000; and

7.
To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.

Stockholders will be able to attend the Annual Meeting and vote electronically and submit questions during the Annual Meeting, all by visiting www.virtualshareholdermeeting.com/HRTX2024. To participate in the Annual Meeting, stockholders of record will need the 16-digit control number included on their proxy card. If your shares are held in street name and your voting instruction form indicates that you may vote those shares through the http://www.proxyvote.com website, then you may access, participate in, and vote electronically during the Annual Meeting with the 16-digit access code indicated on that voting instruction form. Otherwise, stockholders who hold their shares in street name should contact their broker, bank, or other agent (preferably at least five days before the Annual Meeting) and obtain a “legal proxy” in order to be able to attend, participate in, or vote at the Annual Meeting. The Annual Meeting will begin promptly at 9:00 a.m. Eastern Time. We encourage you to access the Annual Meeting webcast prior to the start time. Online check-in will begin at 8:45 a.m. Eastern Time, and you should allow ample time for the check-in procedures.

Only stockholders of record at the close of business on April 26, 2024 (the “Record Date”) will be entitled to notice of, and to vote at, the Annual Meeting.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Ira Duarte

San Diego, California

April 29, 2024

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2024 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 13, 2024:

The 2024 Proxy Statement and the Annual Report on Form 10-K for the year ended December 31, 2023 are available at: http://www.proxyvote.com.

YOUR VOTE IS IMPORTANT

You are cordially invited to attend the Annual Meeting. Instructions on how to participate in the Annual Meeting and demonstrate proof of stock ownership are included in the accompanying Proxy Statement and posted at http://www.virtualshareholdermeeting.com/HRTX2024. The webcast of the Annual Meeting will be archived for one year after the date of the Annual Meeting at www.virtualshareholdermeeting.com/HRTX2024. You will not be able to attend the Annual Meeting in person. Whether or not you expect to virtually attend the Annual Meeting, you are urged to cast your vote as soon as possible. You may vote your shares via the Internet or via a toll-free telephone number by following the instructions on the proxy card or the voting instruction card you received, as applicable. In addition, you can also vote by mail by following the instructions on the proxy card or the voting instruction card. Submitting a proxy or voting instruction card will not prevent you from attending the Annual Meeting and voting electronically, if you so desire. Please note, however, that if your shares are held of record by a broker, bank or other agent and you wish to vote at the Annual Meeting, you may also submit voting instructions to your broker, bank or other nominee. In most instances, you will be able to do this over the Internet, by telephone or by mail. Please refer to information from your bank, broker, or other nominee on how to submit voting instructions.

HERON THERAPEUTICS, INC.

4242 Campus Point Court, Suite 200

San Diego, CA 92121

(858) 251-4400

PROXY STATEMENT

2024 ANNUAL MEETING OF STOCKHOLDERS

QUESTIONS AND ANSWERS

Why have these proxy materials been made available to me?

The enclosed proxy is being solicited on behalf of our Board of Directors (“Board”) for use at the Annual Meeting. The proxy materials, including the 2024 Proxy Statement and the Annual Report on Form 10-Kfor the year ended December 31, 2023, will be made available online at http://www.proxyvote.com and mailed to stockholders on or about April 29, 2024. We encourage stockholders to vote well before the Annual Meeting, even if they plan to attend the Annual Meeting (as specified below and in the proxy card you received) or by using the toll-free telephone number provided below or in the proxy card, as applicable. In addition, if you received copies of the proxy materials by mail, you can vote by mail by following the instructions on the proxy card. Stockholders who hold our shares in “street name” should refer to the voting instructions form provided by their broker, bank or other agent for details on how to provide voting instructions to each person. For additional details, see “How can I vote at the Annual Meeting?” below.

Who can vote at the Annual Meeting?

Only stockholders of record at the close of business on the Record Date will be entitled to vote at the Annual Meeting. At the close of business on the Record Date, there were 150,636,976 shares of common stock outstanding and entitled to vote.

Stockholder of Record: Shares Registered in Your Name

If at the close of business on the Record Date, your shares were registered directly in your name, then you are a stockholder of record. As a stockholder of record, you may vote electronically during the Annual Meeting or via one of the methods described in the proxy card you received. Whether or not you plan to attend the Annual Meeting, we urge you to vote well before the Annual Meeting to ensure your vote is counted.

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

If at the close of business on the Record Date, your shares were held, not in your name, but in an account at a brokerage firm, bank or other agent, then you are the beneficial owner of shares held in “street name,” and the proxy materials are being forwarded to you by your broker, bank or other agent. The broker, bank or other agent holding your account is considered to be the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker, bank or other agent on how to vote the shares in your account.

How can I attend the Annual Meeting?

You are entitled to attend the Annual Meeting only if you were a stockholder at the close of business on the Record Date or if you hold a valid proxy to vote at the Annual Meeting.

We will be hosting the Annual Meeting via the Internet. You will not be able to attend the Annual Meeting in person. Any stockholder can listen to and participate in the Annual Meeting via the Internet at www.virtualshareholdermeeting.com/HRTX2024. Our Board annually considers the appropriate format of our annual meeting. Stockholders may submit questions and comments before and during the Annual Meeting. After the Annual Meeting, we will spend up to fifteen minutes answering any appropriately submitted stockholder questions that are pertinent to the Company and that comply with our rules of conduct. Our rules of conduct will be made available at http://www.virtualshareholdermeeting.com/HRTX2024.

1

The Annual Meeting will begin promptly at 9:00 a.m. Eastern Time. We encourage you to access the Annual Meeting webcast prior to the start time. Online check-in will begin, and stockholders may begin submitting written questions, at approximately 8:45 a.m. Eastern Time, and you should allow ample time for the check-in procedures.

What do I need in order to be able to participate in the Annual Meeting?

In order to be able to vote your shares, view the list of our stockholders of record, or submit questions during the Annual Meeting, you will need the 16-digit control number included on your proxy card or included in the email to you if you received the proxy materials by email. If your shares are held in street name and your voting instruction form indicates that you may vote those shares through the http://www.proxyvote.com website, then you may access, participate in, and vote electrically during the Annual Meeting with the 16-digit access code indicated on that voting instruction form. Otherwise, stockholders who hold their shares in street name should contact their broker, bank, or other agent (preferably at least five days before the Annual Meeting) and obtain a “legal proxy” in order to be able to attend, participate in, or vote electronically during the Annual Meeting. You will not be able to attend the Annual Meeting in person. Instructions on how to connect to the Annual Meeting and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at http://www.virtualshareholdermeeting.com/HRTX2024. If you do not have your 16-digit control number, you will be able to access and listen to the Annual Meeting but you will not be able to vote your shares or submit questions during the Annual Meeting.

We will have technicians ready to assist you with any technical difficulties you may have accessing the Annual Meeting webcast or submitting questions. If you encounter any difficulties accessing the Annual Meeting webcast during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting login page.

What am I voting on?

There are six Company proposals scheduled for a vote at the Annual Meeting:

• Proposal 1: To elect six director nominees named in this Proxy Statement to serve until the 2025 Annual Meeting of Stockholders and until their successors are duly elected and qualified;

• Proposal 2: To ratify the appointment of Withum as our independent registered public accounting firm for the fiscal year ending December 31, 2024;

• Proposal 3: To approve, on a nonbinding advisory basis, compensation paid to our Named Executive Officers during the fiscal year ended December 31, 2023;

• Proposal 4: To amend the Company’s Certificate of Incorporation to increase the aggregate number of authorized shares of common stock by 175,000,000 from 225,000,000 to 400,000,000;

• Proposal 5: To amend the 2007 Plan to increase the number of shares of common stock authorized for issuance thereunder by 7,500,000 from 39,190,000 to 46,690,000; and

• Proposal 6: To amend the ESPP to increase the number of shares of common stock authorized for issuance thereunder by 1,200,000 from 2,225,000 to 3,425,000.

What are the Board’s recommendations?

The Board recommends that you vote your shares:

• FOR the six director nominees to serve until the 2025 Annual Meeting of Stockholders and until their successors are duly elected and qualified;

• FOR the ratification of the appointment of Withum as our independent registered public accounting firm for the fiscal year ending December 31, 2024;

• FOR the approval, on a nonbinding advisory basis, compensation paid to our Named Executive Officers during the fiscal year ended December 31, 2023;

• FOR the amendment of the Company’s Certificate of Incorporation to increase the aggregate number of authorized shares of common stock by 175,000,000 from 225,000,000 to 400,000,000;

2

• FOR the amendment of the 2007 Plan to increase the number of shares of common stock authorized for issuance thereunder by 7,500,000 from 39,190,000 to 46,690,000; and

• FOR the amendment of the ESPP to increase the number of shares of common stock authorized for issuance thereunder by 1,200,000 from 2,225,000 to 3,425,000.

What if another matter is properly brought before the Annual Meeting?

At this time, the Board knows of no other matters that will be presented for consideration at the Annual Meeting. However, if any other matter is properly brought before the Annual Meeting, it is the intention of the persons named in the proxy card as “proxies” to vote on those matters in accordance with their best judgment and in their discretion.

How can I vote at the Annual Meeting?

The procedures for voting are as follows:

Stockholder of Record: Shares Registered in Your Name

• To vote during the Annual Meeting, see the instructions on how to vote while participating in the Annual Meeting via the Internet at http://www.virtualshareholdermeeting.com/HRTX2024.

• To vote via the Internet, go to www.proxyvote.com, 24 hours per day, 7 days per week. You will need the 16-digit control number included on your proxy card. Proxies submitted through the Internet must be received by 11:59 p.m. Eastern Time on June 12, 2024.

• To vote by telephone, call toll free 1-800-690-6903, 24 hours per day, 7 days per week. You will need the 16-digit control number included on your proxy card. Proxies submitted through the Internet must be received by 11:59 p.m. Eastern Time on June 12, 2024.

• To vote using the proxy card, simply complete, sign and date the proxy card included with your proxy materials and return it promptly in the envelope provided. If you return your signed and dated proxy card to us before the Annual Meeting with your voting selections, we will vote your shares as you direct. Except for votes cast for shares registered in the name of a broker, bank or other agent (as described below), if you return your signed and dated proxy card to us before the Annual Meeting without your voting selections, proxies named in the proxy card will vote your shares in accordance with the Board’s recommendations (as described above).

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

If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a proxy card and voting instructions with the proxy materials from that institution rather than from us. To ensure that your vote is counted, simply follow the instructions in the materials received from your broker, bank or other agent to vote electronically during the Annual Meeting, via the Internet in advance of the Annual Meeting or by telephone or, if you received a proxy card by mail, complete, sign and return the proxy card.

We provide Internet proxy voting to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers.

How many votes do I have?

On each matter to be voted on, you have one vote for each share of common stock you own as of the close of business on the Record Date for the Annual Meeting. Stockholders do not have cumulative voting rights.

Who is paying for this proxy solicitation?

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

3

What does it mean if I receive more than one proxy card?

If you receive more than one proxy card, your shares are registered in more than one name or are registered in different accounts. Please complete, sign and return each proxy card to ensure that all of your shares are voted.

Can I revoke or change my vote after submitting my proxy?

Yes. You can revoke your proxy and change your vote at any time before the applicable vote deadlines for the Annual Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of four ways:

• you may submit another properly completed proxy with a later date;

• you may vote again by Internet or telephone at a later time;

• you may send a written notice that you are revoking your proxy to our Corporate Secretary at 4242 Campus Point Court, Suite 200, San Diego, California 92121; or

• you may attend the Annual Meeting and vote electronically during the Annual Meeting (however, simply attending the Annual Meeting will not, by itself, revoke your proxy or change your vote).

Your most current proxy card or Internet proxy is the one that is counted.

If you hold your shares beneficially in street name, you may change your vote by submitting new voting instructions to your bank, broker or nominee following the instructions they provide.

How can I submit a proposal (including a director nomination) for next year’s annual meeting?

Under the rules of the U.S. Securities and Exchange Commission (“SEC”), stockholders who wish to submit proposals for inclusion in the Proxy Statement for the 2025 Annual Meeting of Stockholders must submit such proposals to our Corporate Secretary so as to be received by us at 4242 Campus Point Court, Suite 200, San Diego, California 92121, by close of business on or before December 30, 2024 and must comply with all applicable requirements of Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

If a stockholder intends to make a director nomination or present a proposal for other business (other than pursuant to Rule 14a-8 under the Exchange Act) at the 2025 Annual Meeting of Stockholders, the stockholder must deliver written notice to our Corporate Secretary at the address provided above not earlier than February 13, 2025 and not later than March 15, 2025. Such nomination(s) or proposal(s) may or may not be included in the Proxy Statement. If the date of the 2025 Annual Meeting of Stockholders changes by more than 30 calendar days prior to, or more than 30 calendar days after, the anniversary of the 2024 Annual Meeting of Stockholders, then stockholder notice must be delivered not later than the close of business on the later of: (i) the 90^th calendar day prior to such annual meeting; or (ii) the 10^th calendar day following the day on which public disclosure of the date of such meeting is first made. We also advise you to review our bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations.

In addition to satisfying the foregoing requirements under our bylaws, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than our nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 14, 2025.

What are “broker non-votes”?

If your shares are held by your broker, bank or other agent (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, bank or other agent to vote your shares. If a beneficial owner of shares held in “street name” does not give instructions to his or her broker, bank or other agent, such nominee has discretionary authority to vote such shares with respect to “routine” matters but does not have discretionary authority to vote such shares with respect to “non-routine” matters. For “non-routine” matters for which a broker, bank or other agent does not have discretionary authority to vote a beneficial owner’s shares, the un-voted shares are generally referred to and counted as “broker non-votes.” The determination of whether a proposal is “routine” or “non-routine” is made pursuant to applicable stock exchange rules.

4

The election of directors (“Proposal 1”), the approval of the compensation paid to our Named Executive Officers (“Proposal 3”), the amendment of the 2007 Plan to increase the number of shares of common stock authorized for issuance thereunder (“Proposal 5”), and the amendment of the ESPP to increase the number of shares of common stock authorized for issuance (“Proposal 6”) are considered as “non-routine” matters under applicable rules. We therefore expect broker non-votes to exist in connection with Proposals 1, 3, 5 and 6.

The ratification of the appointment of Withum as our independent registered public accounting firm for the fiscal year ending December 31, 2024 (“Proposal 2”) and the approval of the amendment of our Certificate of Incorporation to increase the aggregate number of authorized shares of common stock (“Proposal 4”) are considered “routine” matters under applicable rules. A broker or other nominee may generally vote on routine matters, so we do not expect there will be any broker non-votes with respect to Proposals 2 or 4.

How are votes counted and how many votes are needed to approve each proposal?

Votes will be counted by the Inspector of Elections appointed for the Annual Meeting. The following are the voting requirements for each proposal:

• Proposal 1: Director nominees, in uncontested elections, shall be elected by a majority of the votes properly cast with respect to that director nominee, provided a quorum is established.

• Proposal 2: The proposal to ratify the appointment of Withum as our independent registered public accounting firm for the year ending December 31, 2024 requires the affirmative vote of a majority of the votes properly cast on the proposal, provided a quorum is established.

• Proposal 3: The proposal to approve, on a nonbinding, advisory basis, the compensation paid to our Named Executive Officers requires the affirmative vote of a majority of the votes properly cast on the proposal, provided a quorum is established.

• Proposal 4: The proposal to approve an amendment to our Certificate of Incorporation to increase the aggregate number of authorized shares of common stock by 175,000,000 from 225,000,000 to 400,000,000 requires the affirmative vote of a majority of the votes properly cast on the proposal, provided a quorum is established.

• Proposal 5: The proposal to amend our 2007 Plan requires the affirmative vote of a majority of the votes properly cast on the proposal, provided a quorum is established.

• Proposal 6: The proposal to amend our ESPP requires the affirmative vote of a majority of the votes properly cast on the proposal, provided a quorum is established.

There are no appraisal or dissenter’s rights with respect to the matters to be acted upon at the Annual Meeting.

How are abstentions and broker non-votes treated?

Broker non-votes and abstentions are counted for purposes of determining whether a quorum is present at the Annual Meeting. Broker non-votes will have no effect on Proposals 1, 3, 5, and 6. Broker non-votes are not expected to occur with respect to Proposal 2 or 4.

Abstentions will be counted as votes present and entitled to vote on the proposals considered at the Annual Meeting, but will not be considered as a vote cast. Therefore, abstentions will have no effect on Proposals 1 through 6.

What is the quorum requirement?

A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if at least a majority of the shares issued and outstanding and entitled to vote at the Annual Meeting as of the close of business on the Record Date are represented by stockholders present at the Annual Meeting or represented by proxy. At the close of business on the Record Date, there were 150,636,976 shares outstanding and entitled to vote.

Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, a majority of the votes present at the Annual Meeting may adjourn the Annual Meeting to another date.

5

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

Preliminary voting results will be announced during the Annual Meeting. In addition, final voting results will be published in a Current Report on Form 8-K that we expect to file within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Current Report on Form 8-K within four business days after the Annual Meeting, we intend to file a Current Report on Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an amended report on Form 8-K to publish the final results.

6

INFORMATION CONCERNING THE BOARD OF DIRECTORS

Certain information regarding each of our director nominees, including each nominee’s age, experience, qualifications, attributes and skills that led the Board to conclude that the individual should serve on the Board and each nominee’s principal occupation and directorships during the past five years, is set forth below:

Name	Age	Position	Director Since
Craig Collard	58	Chief Executive Officer and Director	2023
Sharmila Dissanaike, M.D., FACS, FCCM	49	Director	2021
Craig Johnson	62	Director	2014
Adam Morgan	45	Chairman of the Board	2023
Susan Rodriguez	60	Director	2021
Christian Waage	57	Director	2016

Craig Collard has served as a director of Heron since February 2023 and as Chief Executive Officer since April 2023. Mr. Collard most recently served as the Chief Executive Officer of Veloxis Pharmaceutics A/S (now Veloxis Pharmaceuticals Inc., “Veloxis”) before it was acquired by Asahi Kasei Corp, a transplant focused pharmaceutical company with its principal office in Cary, North Carolina, from 2015 to December 2021. Prior to joining Veloxis, Mr. Collard served as the Chief Executive Officer and the Chairman of the Board of Directors of Cornerstone Therapeutics, Inc., a pharmaceutical company (“Cornerstone”), from 2011 until it was acquired by Chiesi Farmaceutici S.p.A. in 2014. Mr. Collard also served as Cornerstone’s Interim Chief Financial Officer, from 2010 to 2011, and as its President, from 2008 to 2011. Mr. Collard served as the Founder, President and Chief Executive Officer of Cornerstone BioPharma Inc. (formerly Cornerstone BioPharma Holdings, Ltd.), a pharmaceutical company, and as a member of its board of directors, from 2004 to 2008. Prior to that, Mr. Collard served as President and Chief Executive Officer of Carolina Pharmaceuticals, Inc., a specialty pharmaceutical company that he founded in 2003. Mr. Collard currently serves on the board of directors of TerrAscend Corp., a North American cannabis operator based in Mississauga, Canada, since December 2018. Mr. Collard previously served as a member of the board of directors of Sierra Oncology, Inc., a San Mateo, California-based late-stage biopharmaceutical company acquired by GlaxoSmithKline plc, from May 2020 to July 2022. He also served as Chairman of Opiant Pharmaceuticals, Inc., a specialty pharmaceutical company in Santa Monica, California developing therapies to treat substance and use disorders and drug overdose since October 2018 until it was acquired by Indivior on March 1, 2023. Mr. Collard holds a B.S. in Engineering from the Southern College of Technology (now Southern Polytechnic State University). Mr. Collard was initially appointed as a director of the Company pursuant to a Cooperation Agreement, dated as of February 21, 2023 (the ‘‘Cooperation Agreement”), by and between the Company, Rubric Capital Management LP and certain of its affiliates and Velan Capital Investment Management LP and certain of its affiliates, regarding changes to the composition of the Board and other related matters. The Board has concluded that Mr. Collard should serve as a director based on his experience in senior management, commercial operations, and as a director with other biotechnology and pharmaceutical companies.

Sharmila Dissanaike, M.D., FACS, FCCM has served as a director of Heron since September 2021. Dr. Dissanaike has been University Distinguished Professor and Peter C. Canizaro Chair of the Department of Surgery at Texas Tech University Health Sciences Center (TTUHSC) since 2016. In addition, from 2015 to 2018, Dr. Dissanaike served as Interim Director of the Timothy J. Harnar Burn Center at University Medical Center in Lubbock, Texas (UMC). From 2014 to 2017, Dr. Dissanaike served as Trauma Medical Director of the John A. Griswold Level 1 Trauma Center at UMC. In January 2021, she was appointed to the Texas Medical Board by Governor Greg Abbott. Dr. Dissanaike is a clinically active trauma, burn and acute care surgeon who has won over 50 awards for clinical, academic and research excellence and service during her career. Dr. Dissanaike has published over 100 peer-reviewed scientific articles, in addition to numerous book chapters, peer-reviewed presentations and national and international invited lectureships. Dr. Dissanaike holds multiple national leadership and quality assurance roles including Chair of the American Burn Association Verification Committee, member of the American College of Surgeons Trauma Verification Committee and Committee on Trauma, and Board member of each of the American Burn Association and Southwestern Surgical Congress. She serves the American College of Surgeons as Governor and on the Committee for Ethics, the Advisory Council of Rural Surgery and Program Committee, highlighting her wide array of interests and longstanding dedication to advancing all aspects of surgical care. Dr. Dissanaike received her medical degree from the University of Sydney,

7

Australia and her undergraduate degree from Methodist College in Colombo, Sri Lanka. Dr. Dissanaike completed her postgraduate medical training at the University of Washington at Harborview Medical Center, the Department of Surgery at TTUHSC, the Department of Surgery at Albert Einstein College of Medicine at Beth Israel Medical Center and the Department of Medicine at Inverclyde Hospital, National Health Service. The Board has concluded that Dr. Dissanaike should serve as a director based on her experience and achievements in surgical medicine.

Craig Johnsonhas served as a director of Heron since 2014. He also serves as a director of Odonate, Inc. Mr. Johnson previously served as a director of Mirati Therapeutics, Inc. from 2013 until its acquisition by Bristol Myers Squibb in 2024, La Jolla Pharmaceutical Company from 2013 until its acquisition by Innoviva, Inc. in 2022, Decipher Biosciences, Inc. from 2015 to 2018, Adamis Pharmaceuticals Corporation from 2011 to 2014, and Ardea Biosciences, Inc. from 2008 until its acquisition by AstraZeneca PLC in 2012. Mr. Johnson served as Vice President and Chief Financial Officer of TorreyPines Therapeutics, Inc. from 2004 until its sale to Raptor Pharmaceuticals Corp. in 2009, and then as Vice President of a wholly-owned subsidiary of Raptor Pharmaceutical Corp. from 2009 to 2010. From 1994 to 2004, he held various positions at MitoKor, Inc., concluding his service as Chief Financial Officer and Senior Vice President of Operations. Mr. Johnson practiced as a Certified Public Accountant with Price Waterhouse, and he received a B.B.A. degree in accounting from the University of Michigan-Dearborn. The Board has concluded that Mr. Johnson should serve as a director based on his experience serving as a director of biotechnology companies and his expertise in financial management.

Adam Morgan has served as a director of Heron since February 2023 and as Chairman of the Board since April 2023. Beginning in 2020, Mr. Morgan has served as the Chief Investment Officer of Velan Capital Investment Management LP, a healthcare-dedicated investment firm based in Alpharetta, Georgia. Mr. Morgan also currently serves on the board of directors of Alimera Sciences, Inc., where he serves as Chairman of the board, and Health Outlook Corporation, a privately-held developer of predictive healthcare technology and service based in New York, New York, where he serves as a director and chair of the audit committee. Previously, Mr. Morgan served as Senior Analyst at Broadfin Capital, LLC, a healthcare dedicated investment firm based in New York, New York, where he covered the Biotech and Pharmaceutical sectors, from February 2018 to June 2020. Prior to that, Mr. Morgan served as Senior Analyst at Iguana Healthcare Partners LLC, a healthcare-dedicated investment firm based in New York, New York, where he covered Medical Devices and Specialty Pharmaceuticals, from 2015 to January 2018. Mr. Morgan also served as Analyst at Pura Vida Investments, LLC, a healthcare-focused investment firm, where he covered global Medical Devices, from 2014 to 2015. Earlier in his career, Mr. Morgan served as a Research Associate at Cowen and Company (a subsidiary of Cowen Inc.), a financial services company, on the firm’s Medical Supplies and Devices team, from January 2014 to June 2014. Mr. Morgan received his B.S. in Chemistry from the University of Minnesota and his MBA from the Carlson School of Management at the University of Minnesota. Mr. Morgan was initially appointed as a director of the Company pursuant to the Cooperation Agreement. The Board has concluded that Mr. Morgan should serve as a director based on extensive investment experience and operational background focused on the healthcare and biotechnology sectors as well as his corporate governance expertise.

Susan Rodriguez has served as a director of Heron since September 2021. Ms. Rodriguez has more than 25 years of experience in the biopharmaceutical industry, serving in senior commercial and operational management roles. Ms. Rodriguez has served as Chief Commercial Officer of Ardelyx, Inc. since May 2020. From 2014 to 2019, Ms. Rodriguez served as the Chief Executive Officer of Tolmar Pharmaceuticals, Inc. (“Tolmar”), a U.S. commercial specialty oncology company, for which in 2019, Ms. Rodriguez was named President of the branded division upon the formation of the global entity, Tolmar, Inc. At Tolmar, Ms. Rodriguez built out their U.S. specialty pharmaceutical business to become a market leader, which required establishing commercial presence in both 340B and private hospitals. Prior to Tolmar, from 1990 to 2014, Ms. Rodriguez held various positions of increasing responsibility at Abbott Laboratories (“Abbott”), most recently as Divisional Vice President of Global Marketing, where she led the global marketing function for an international portfolio of Abbott products. Prior to this role, Ms. Rodriguez served as the Vice President and General Manager of the Abbott Renal Franchise. Ms. Rodriguez received both a M.S. and B.S. in Psychology from the University of Pennsylvania. The Board has concluded that Ms. Rodriguez should serve as a director based on her experience in senior management and commercial operations with other biotechnology and pharmaceutical companies.

8

Christian Waage has served as a director of Heron since 2016. Mr. Waage has more than 15 years of regulatory, legal and financial transaction experience, primarily in the biotechnology industry. Since 2017, he has served as Executive Vice President and General Counsel of Gossamer Bio, Inc., a publicly traded biotechnology company. From 2013 to 2016, Mr. Waage held various positions at Receptos, Inc., a wholly owned subsidiary of Celgene Corporation, most recently serving as Managing Director. Prior to its acquisition by Celgene Corporation in 2015, he served as Senior Vice President and General Counsel of Receptos, Inc. From 2012 through its acquisition by Vista Equity Partners Management, LLC in 2013, Mr. Waage served as Vice President, General Counsel and Corporate Secretary at Websense, Inc. From 2008 through its acquisition by AstraZeneca PLC in 2012, he served as Vice President, General Counsel and Corporate Secretary of Ardea Biosciences, Inc. Prior to 2008, Mr. Waage served as a partner at DLA Piper LLP. He received a J.D. from the University of San Diego School of Law and a B.A. degree in economics from the University of California, San Diego. The Board has concluded that Mr. Waage should serve as a director based on his experience in regulatory, legal and finance matters.

9

INFORMATION CONCERNING EXECUTIVE OFFICERS

Executive officers are elected by our Board and hold office until the earlier of resignation, removal or the appointment and election of a successor.

Our executive officers and their ages and positions as of the Record Date are as follows:

Name	Age	Position	Officer Since
Craig Collard	58	Chief Executive Officer and Director	2023
Ira Duarte	55	Executive Vice President, Chief Financial Officer	2023
William Forbes	62	Executive Vice President, Chief Development Officer	2023

The background of Mr. Collard is described above under “Information Concerning the Board of Directors.”

Ira Duarte joined Heron as Executive Vice President, Chief Financial Officer in June 2023. Ms. Duarte brings significant experience and expertise in financial leadership to Heron. Prior to joining Heron, Ms. Duarte served in financial leadership roles from 2016 to 2023, most recently as Chief Financial Officer, at Veloxis Pharmaceuticals, Inc., a fully integrated specialty pharmaceutical company. Prior to that, Ms. Duarte served as the Corporate Controller at BioDelivery Sciences, Inc. from 2014 to 2016, and from 2009 to 2014 she was Senior Director of Corporate Finance for Chiesi USA, Inc. and Director of Accounting and Financial Planning for Cornerstone Therapeutics, Inc., where she was a core member of the team that guided the sale of Cornerstone Therapeutics, Inc. to Chiesi Farmaceutici S.p.A. Ms. Duarte previously held various roles from Staff to Senior Manager at Ernst & Young Global Limited. Ms. Duarte currently serves on the board of directors of TerrAscend Corporation and has since December 2022. Ms. Duarte is a Certified Public Accountant and holds a B.S. in Accounting from Florida Atlantic University.

William Forbes has served as our Executive Vice President, Chief Development Officer since June 2023. Dr. Forbes brings more than thirty years of pharmaceutical product development experience to Heron and has contributed to fourteen marketing approvals spanning a diverse range of therapeutic areas in the U.S. and European markets. Prior to joining Heron, Dr. Forbes served as the Chief Development Officer at Trevi Therapeutics, Inc. from 2021 to 2022. From 2016 to 2020, Dr. Forbes served as the President and CEO of Vivelix Pharmaceuticals, Ltd., where he was the founder and responsible for all strategic and operational aspects of the organization. Prior to that, Dr. Forbes served as the Chief Development Officer at Salix Pharmaceuticals, Inc. as the Head of Medical and R&D from 2005 to 2015. Earlier in his career, Dr. Forbes held various positions in clinical research and development at Metabasis Therapeutics, Inc., Otsuka America Pharmaceuticals, Inc., and Glaxo, Inc. Dr. Forbes received his Doctor of Pharmacy degree from Creighton University, and he completed fellowships in cardiovascular research at Creighton Cardiac Center and in clinical research at Glaxo, Inc.

There are no family relationships among any of our directors or executive officers.

10

CORPORATE GOVERNANCE

Our Board met fifteen times during the year ended December 31, 2023. Each then-serving director attended seventy-five percent (75%) or more of the meetings of the Board and of each committee on which he or she served during 2023. We have a policy of encouraging all directors to attend the Annual Meeting; four of the seven then-serving directors attended the 2023 Annual Meeting of Stockholders.

Board Independence

On an annual basis, the Board reviews the independence of all directors in light of each director’s (or any family member’s, if applicable) affiliations with the Company and members of management, as well as significant holdings of the Company’s securities. The Board uses the definition of independence from The Nasdaq Stock Market (“Nasdaq”) listing standards to assess independence of our directors. Our Board has determined that all Board members, other than Mr. Collard, are “independent directors” as defined by Nasdaq rules. Mr. Collard was deemed not to be independent under Nasdaq Rules by virtue of his role as our Chief Executive Officer.

The Board has a standing Audit Committee (the “Audit Committee”), Compensation Committee (the “Compensation Committee”), and Nominating and Governance Committee (the “Governance Committee”). The Board has determined that all committee members are independent under applicable Nasdaq and SEC rules for committee memberships, and that each member of the Audit Committee also meets the additional independence criteria set forth in Rule 10A-3(b)(1) under the Exchange Act.

In addition to the Board-level standards for director independence, the directors who serve on the Audit Committee each satisfy standards established by Nasdaq and the SEC, as no member of the Audit Committee accepts directly or indirectly any consulting, advisory or other compensatory fee from the Company other than their director compensation, or otherwise has an affiliate relationship with the Company. Similarly, the members of the Compensation Committee each qualify as independent under Nasdaq standards. Under these standards, the Board considered that none of the members of the Compensation Committee accept directly or indirectly any consulting, advisory or other compensatory fee from the Company other than their director compensation, and that none have any affiliate relationships with the Company or other relationships that would impair the director’s judgment as a member of the Compensation Committee.

Board Committees

The following table sets forth the current members of the Audit, Compensation and Governance Committees of the Board:

Name	Audit	Compensation	Governance
Craig Collard
Sharmila Dissanaike, M.D., FACS, FCCM		C	X
Craig Johnson	C	X
Adam Morgan			X
Susan Rodriguez	X	X
Christian Waage	X		C

C: Chair of Committee

X: Member of Committee

Audit Committee. The Audit Committee is composed of three directors: Messrs. Johnson and Waage and Ms. Rodriguez. Mr. Johnson serves as the Chair of the Audit Committee. The Audit Committee is responsible for appointing, overseeing and replacing, if necessary, our independent registered public accounting firm and for evaluating its work. The Audit Committee also assists the Board in overseeing the integrity of our financial statements and accounting and financial reporting processes, compliance with legal and regulatory requirements, the independent registered public accounting firm’s qualifications and independence and the performance of the Company’s independent registered public accounting firm and internal audit function. During 2023, the Audit Committee received written disclosures from and communicated with the independent registered public accounting firm; met with management and the independent registered public accounting firm to discuss our financial statements; met with the independent registered public accounting firm to discuss matters that may

11

affect our financial statements; approved related-party transactions, if any; provided oversight of risk management, including oversight of cybersecurity risks and risks related to environmental, social and governance matters; and approved professional services provided to us by the independent public accountants. The Audit Committee, together with the Board, was also responsible for reviewing our plans for providing appropriate financial resources to sustain our operations, including review of our strategic corporate plan and annual operating budget. The Board has determined that, during 2023, each then-serving member of the Audit Committee satisfied applicable independence standards promulgated by Nasdaq and the SEC, and the Board has determined that Mr. Johnson qualifies as an “audit committee financial expert” (as the SEC has defined such term in Item 407 of Regulation S-K). We have adopted an Audit Committee charter, which is available at www.herontx.com. The Audit Committee met four times during the year ended December 31, 2023.

Compensation Committee. The Compensation Committee is composed of three directors: Dr. Dissanaike, Ms. Rodriguez, and Mr. Johnson. Dr. Dissanaike serves as the Chair of the Compensation Committee. The Compensation Committee is responsible for overseeing the Company’s compensation philosophy generally and advising the Board regarding the compensation of the Board, the Chief Executive Officer, and the other executive officers of the Company. The Compensation Committee seeks to align our compensation practices with sound fiscal policy and enable the Company to attract and motivate qualified and highly skilled personnel, and is responsible for overseeing the Company’s management resources, succession planning, and management development activities. The Compensation Committee oversees the assessment of the risks related to the Company’s compensation policies and programs applicable to officers and employees, and regularly reports to the Board on the results of this assessment. In 2023, the Compensation Committee administered our benefit and equity incentive plans, and made recommendations to the Board regarding the review and administration of all compensation arrangements for executive officers (including the Chief Executive Officer) and the review and establishment of general policies relating to the compensation and benefits of our officers and employees for the year ended December 31, 2023. The Compensation Committee also reviewed and approved corporate goals for our executive officers and evaluated their performance in light of these goals, and reviewed and made recommendations to the Board regarding the compensation paid to the non-employee directors. Subject to applicable laws, the Compensation Committee may form and delegate authority to subcommittees, each consisting of one or more of its members, with such powers as the Compensation Committee confers. The Board has determined that, during 2023, each then-serving member of the Compensation Committee satisfied applicable independence standards promulgated by Nasdaq and the SEC. We have adopted a Compensation Committee charter, which is available at www.herontx.com. The Compensation Committee met six times during the year ended December 31, 2023.

Governance Committee. The Nominating and Corporate Governance Committee is composed of three directors: Mr. Waage, Dr. Dissanaike and Mr. Morgan. Mr. Waage serves as the Chair of the Governance Committee. The Governance Committee is responsible for setting a process for identifying and evaluating nominees, assessing the qualifications, contributions and independence of incumbent directors, and recommending a slate of director nominees to be proposed by the Board to the stockholders (or any director nominees to be elected by the Board to fill interim vacancies), consistent with the criteria approved by the Board. The Governance Committee also is responsible for establishing and maintaining a policy under which the Company’s stockholders may recommend a candidate to the Governance Committee for consideration for nomination as a director. Procedures for the consideration of director nominees recommended by stockholders are set forth below. In addition, the Governance Committee is responsible for overseeing succession planning for the Board and key leadership roles on the Board and its committees, as well as recommending directors for membership on Board committees. The Governance Committee also is responsible for reviewing and recommending updates to our Code of Ethics and Business Conduct as well as any written corporate governance guidelines. The Board has determined that, during 2023, all members of the Governance Committee satisfied applicable Nasdaq independence standards. We have adopted a Governance Committee charter, which is available at www.herontx.com. The Governance Committee met five times during the year ended December 31, 2023.

Board Leadership Structure

Our bylaws provide our Board with the flexibility to combine or separate the positions of Chairman of the Board and Chief Executive Officer to reflect the Company’s evolving needs and strategy, changes in our Board’s composition and leadership needs, as well as other factors, including the views of our stockholders and other stakeholders. Mr. Collard serves as our Chief Executive Officer, while Mr. Morgan serves as our Chairman of the

12

Board. Our Board regularly reviews its leadership structure to evaluate whether the structure remains appropriate for the Company. Our Board has concluded that balance and varying experience and judgment are added to the leadership of the Board by having these two positions filled by different persons.

Involvement in Certain Legal Proceedings

During the past ten years none of the persons currently serving as executive officers and/or directors of the Company has been the subject matter of any legal proceedings that are required to be disclosed pursuant to Item 401(f) of Regulation S-K. Nor are any such legal proceedings believed to be contemplated by governmental authorities against any director or executive officer. Further, no executive officers, directors, beneficial owners of more than five percent of the Company’s common stock, or any other actor mentioned in Item 103(c)(2) of Regulation S-K is a party adverse to the Company in a material proceeding or has a material interest adverse to the Company.

Director Nomination

Criteria for Board Membership

The Governance Committee is responsible for assessing the appropriate balance of experience, skills and other characteristics required of our directors. Nominees for director are selected based on their experience, knowledge, integrity, understanding of our business environment, specific skills and perspectives they may possess that are helpful to the Company and the willingness to devote adequate time to Board duties. The Governance Committee uses the same selection criteria regardless of whether the candidate has been recommended by a stockholder or identified by the Board. In selecting candidates to recommend to the Board for appointment or re-election to the Board, the Governance Committee considers the current composition of the Board and the attributes and capabilities of the current directors in order to achieve appropriate balance of experience, skills and other characteristics. The Governance Committee also considers potential independence under the rules of Nasdaq, with the additional objective that at least one director qualifies as an “audit committee financial expert” under the rules of the SEC. When evaluating a candidate for our Board, the Governance Committee does not assign specific weight to any of these factors, nor does the Governance Committee believe that all of the criteria must necessarily apply to every candidate. At minimum, a director’s qualifications and attributes, in light of the above-mentioned criteria, are considered each time the director is nominated or re-nominated for Board membership.

Board Diversity

While we do not have a formal written policy regarding diversity in identifying director candidates, the Company believes that a Board comprising directors with diverse backgrounds, experiences, skills and perspectives contributes to overall Board effectiveness and improves Board decision making. The Governance Committee is committed to continuing to enhance the Board’s diversity by identifying potential director candidates with varied attributes and perspectives. Accordingly, the Governance Committee actively considers diversity in its development of the pool from which it identifies qualified director candidates who possess the experience and skills desired for our Board. The Governance Committee looks to incorporate diversity into the Board across a broad spectrum of factors, including race, ethnicity, gender, sexuality or membership in another underrepresented community, as well as skills, experiences, specific operational experience and viewpoints, all with a view to identify candidates that can assist the Board with the performance of its governance and oversight role, in light of the Company’s strategy and evolving needs. The Governance Committee believes that our current Board reflects a diverse mix of directors on a number of these factors. The Governance Committee evaluates the diversity of the Board as part of the annual nomination process and assesses the effectiveness of its approach to Board diversity as part of the Board and committee evaluation process.

13

Board Diversity Matrix (As of April 1, 2024)
Total Number of Directors	6
	Female	Male	Non- Binary	Did Not Disclose Gender
Part I: Gender Identity
Directors	2	4	-	-
Part II: Demographic Background
African American or Black	-	-	-	-
Alaskan Native or Native American	-	-	-	-
Asian	1	-	-	-
Hispanic or Latinx	1	-	-	-
Native Hawaiian or Pacific Islander	-	-	-	-
White	-	4	-	-
Two or More Races or Ethnicities	-		-	-
LGBTQ+	-
Did Not Disclose Demographic Background	-

Board Diversity Matrix (As of April 1, 2023)
Total Number of Directors	7
	Female	Male	Non- Binary	Did Not Disclose Gender
Part I: Gender Identity
Directors	2	5	-	-
Part II: Demographic Background
African American or Black	-	-	-	-
Alaskan Native or Native American	-	-	-	-
Asian	1	-	-	-
Hispanic or Latinx	1	-	-	-
Native Hawaiian or Pacific Islander	-	-	-	-
White	-	5	-	-
Two or More Races or Ethnicities	-		-	-
LGBTQ+	-
Did Not Disclose Demographic Background	-

Stockholder Recommendations

It is the Governance Committee’s policy, as described below, to consider written recommendations from stockholders for nominees for director. The Governance Committee considers persons recommended by our stockholders in the same manner as a nominee recommended by our Board members, management or a third-party executive search firm. Any such recommendations should be submitted to the Governance Committee, c/o the Corporate Secretary, and should include the following information: (i) all information relating to such nominee that is required to be disclosed pursuant to Regulation 14A under the Exchange Act (including such person’s written consent to being named in the Proxy Statement as a nominee and to serving as a director, if elected); (ii) the names and addresses of the stockholders making the nomination and the number of shares of our common stock which are owned beneficially and of record by such stockholders; and (iii) appropriate biographical information and a statement as to the qualification of the nominee. Stockholders seeking to recommend a prospective nominee should follow the instructions under the heading “Communications with Directors” below. The Board did not receive any stockholder recommendations during the year ended December 31, 2023.

14

Process for Identifying and Evaluating Nominees

The Board believes we are well served by our current directors who provide the Board with experience, skills and characteristics that the Board has determined meet its requirements with respect to experience, knowledge, integrity, understanding of our business environment, specific skills that are helpful to the Company and the willingness to devote adequate time to Board duties. The Board, following the recommendation of our Governance Committee, determined that the six director nominees, all of whom were elected at our 2023 Annual Meeting of Stockholders, are best-suited to continue to serve our needs, given our Company’s current anticipated activities.

Oversight of Risk Management

Our Board is responsible for oversight of our risk management policies and procedures. We are exposed to a number of risks, including financial risks, strategic, operational and commercial risks and risks relating to regulatory and legal compliance. The Board will regularly discuss with management our major risk exposures and the steps management has taken to monitor and control such exposures, including the guidelines and policies to govern the process by which risk assessment and risk management are undertaken, and highlighting any new risks that may have arisen since they last met. The Board manages exposure risks within various areas including: (i) risks relating to our employment policies, executive compensation plans and arrangements; (ii) financial risks and taking appropriate actions to help ensure quality financial reporting and appropriately conservative investment practices; (iii) risks associated with the independence of the Board and potential conflicts of interest; (iv) commercial risks; (v) cybersecurity risks; and (vi) risks related to environmental, social and governance matters. The Audit Committee reviews policies with respect to risk assessment and risk management and reviews with the Company’s Chief Financial Officer, who would also consult with outside counsel as appropriate, any legal matter that could have a significant impact on the Company’s financial statements. The Audit Committee also reviews policies with respect to the Company’s major financial, compliance, information technology and cybersecurity risk exposures and the steps management has undertaken to control them and makes related recommendations to the Board.

Clawback Policy

To further discourage inappropriate or excessive risk-taking, the Compensation Committee has adopted a recoupment policy applicable to our Named Executive Officers. Under the policy, in the event of a material restatement of our consolidated financial statements, the Compensation Committee may, to the extent permitted by law and to the extent it determines that it is in our best interests to do so, in addition to all other remedies available to us, require reimbursement or payment of the portion of any incentive compensation, including any equity compensation, paid or awarded to a Named Executive Officer whose misconduct contributed to the reason for the restatement within the three year period prior to the date such material restatement is first publicly disclosed that would have been materially lower if determined using the restated financial results.

Hedging Policy

We maintain an Insider Trading and Trading Window Policy that, among other things, prohibits our officers, including our Named Executive Officers, directors and employees from engaging in short sales, hedging, and transactions in derivative securities relating to our common stock. Our Insider Trading and Trading Window Policy permits our officers, including our named executive officers, directors and employees to pledge our securities as collateral and use our securities as collateral in a margin account.

15

COMMUNICATIONS WITH DIRECTORS

Stockholders and other interested parties may communicate with the Board by sending a letter to Heron’s Board of Directors, c/o Corporate Secretary, 4242 Campus Point Court, Suite 200, San Diego, CA 92121. This will assist the Board in reviewing and responding to stockholder communications in an appropriate manner. The name of any specific intended Board recipient should be noted in the communication. The Board has instructed the Corporate Secretary to forward such correspondence only to the intended recipients; however, the Board has also instructed the Corporate Secretary, prior to forwarding any correspondence, to review such correspondence and, in her discretion, not to forward certain items if they are deemed to be of a commercial or frivolous nature or otherwise inappropriate for the Board’s consideration. In such cases, some of that correspondence may be forwarded elsewhere in the Company for review and possible response.

CODE OF ETHICS AND BUSINESS CONDUCT

We have adopted a Code of Ethics and Business Conduct that applies to our Principal Executive Officer, Principal Financial and Accounting Officer and to all of our other officers, directors and employees. The Code of Ethics and Business Conduct is available in the Corporate Governance section of the Investor Resources page on our website at www.herontx.com. We intend to disclose future waivers or material amendments to certain provisions of our Code of Ethics and Business Conduct on the above-referenced website within four business days following the date of such waiver or amendment. To the extent permissible under Nasdaq rules, if we make any amendments to the Code of Ethics and Business Conduct or grant any waiver, including implicit waiver, from a provision of the Code of Ethics and Business Conduct to a director or executive officer, we intend to disclose the nature of such amendment or waiver in the manner set forth in the Code of Ethics and Business Conduct on our website.

16

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding beneficial ownership of our common stock, as of March 31, 2024 (except as otherwise noted below) by: (i) each person known to us to be the beneficial owner of more than five percent (5%) of the outstanding shares of our common stock; (ii) each of our directors and director nominees; (iii) each of our Named Executive Officers; and (iv) all current directors and executive officers, as a group. Unless otherwise indicated, the address of each of the named individuals is c/o Heron Therapeutics, Inc., 4242 Campus Point Court, Suite 200, San Diego, California 92121. The percentage of ownership is based on 150,362,664 shares of common stock issued and outstanding as of March 31, 2024. Beneficial ownership of shares is determined in accordance with the rules of the SEC. Shares of common stock issuable upon conversion, exercise or vesting, as applicable, of outstanding options, restricted stock units, warrants or underlying convertible notes, as the case may be, within sixty days of March 31, 2024 are deemed to be beneficially owned and outstanding for purposes of calculating the number of shares and the percentage ownership of the person holding such options, restricted stock units, warrants or convertible notes. Except as otherwise noted, to our knowledge, each person listed below has sole voting and investment power with respect to the shares shown.

Name and Address	Amount and Nature of Beneficial Ownership	Percent of Class
Greater than 5% Holders(1)
Rubric Capital Management LP(2) 155 East 44th St, Suite 1630 New York, New York 10017	26,713,503	17.77%
Vanguard Group Inc.(3) 100 Vanguard Blvd. Malvern, PA 19355	8,338,912	5.55%

Name	Title	Amount and Nature of Beneficial Ownership	Percentage of Class
Craig Collard(4)	Chief Executive Officer and Director	1,176,408	*
Sharmila Dissanaike, M.D.(5)	Director	68,447	*
Ira Duarte(6)	Chief Financial Officer	104,372	*
William Forbes(7)	Chief Development Officer	98,372	*
Craig Johnson(8)	Director	65,819	*
Adam Morgan(9)	Chairman of the Board	7,080,026	4.71%
Barry Quart, Pharm. D.(10)	Former Chairman and Chief Executive Officer	177,989	*
Susan Rodriguez(11)	Director	68,447	*
David Szekeres(12)	Former Executive Vice President, Chief Operating Officer	33,754	*
Christian Waage(13)	Director	66,179	*
Current Executive Officers and Directors as a group (8 persons)(14)		8,728,070	5.76%

*
Indicates ownership of less than one percent.

(1)
As applicable, the number of shares of common stock listed as owned by a beneficial holder relies on public filings by such beneficial holder and the number of shares of common stock reported as beneficially owned.

(2)
Based on information set forth in a Schedule 13D/A filed with the SEC on July 25, 2023 by Rubric Capital Management LP and David Rosen. Mr. Rosen is the Managing Member of Rubric Capital Management GP LLC, the general partner of Rubric Capital Management LP. The Schedule 13D/A indicates that Rubric Capital Management LP and David Rosen have shared voting and dispositive power with respect to 26,713,503 shares of common stock.

(3)
Based on information set forth in a Schedule 13G/A filed with the SEC on February 13, 2024 by Vanguard Group Inc. reporting

17

beneficial ownership of 8,338,912 shares of common stock. The Schedule 13G/A indicates that Vanguard Group has shared voting power with respect to 160,021 shares of common stock, sole dispositive power with respect to 8,118,026 shares of common stock and shared dispositive power with respect to 220,886 shares of common stock.

(4)
Consists of 220,587 shares of common stock, 877,157 shares of common stock underlying stock options exercisable within 60 days of March 31, 2024 and 78,664 shares of common stock underlying restricted stock units vesting within 60 days of March 31, 2024.

(5)
Consists of 52,938 shares of common stock and 15,509 shares of common stock underlying stock options exercisable within 60 days of March 31, 2024.

(6)
Consists of 85,000 shares of common stock, 15,498 shares of common stock underlying stock options exercisable within 60 days of March 31, 2024 and 3,874 shares of common stock underlying restricted stock units vesting within 60 days of March 31, 2024.

(7)
Consists of 79,000 shares of common stock, 15,498 shares of common stock underlying stock options exercisable within 60 days of March 31, 2024 and 3,874 shares of common stock underlying restricted stock units vesting within 60 days of March 31, 2024.

(8)
Consists of 51,872 shares of common stock and 13,947 shares of common stock underlying stock options exercisable within 60 days of March 31, 2024.

(9)
Consists of 7,054,242 shares of common stock (inclusive of (i) 6,986,744 shares and (ii) 58,028 pre-funded warrants to purchase common stock held indirectly through Velan Capital Master Fund LP), 23,417 shares of common stock underlying stock options exercisable within 60 days of March 31, 2024 and 2,367 shares of common stock underlying restricted stock units vesting within 60 days of March 31, 2024.

(10)
Consists of 177,989 shares of common stock.

(11)
Consists of 52,938 shares of common stock and 15,509 shares of common stock underlying stock options exercisable within 60 days of March 31, 2024.

(12)
Consists of 33,754 shares of common stock.

(13)
Consists of 52,232 shares of common stock and 13,947 shares of common stock underlying stock options exercisable within 60 days of March 31, 2024.

(14)
Consists of 7,648,809 shares of common stock, 990,482 shares of common stock underlying stock options exercisable within 60 days of March 31, 2024 and 88,779 shares of common stock underlying restricted stock units vesting within 60 days of March 31, 2024.

18

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

Related Person Transactions Policies

Pursuant to our Code of Ethics and Business Conduct, our executive officers, directors and employees must disclose transactions involving actual or apparent conflicts of interest, such as related person transactions, to the Chairman of the Board. Additionally, the Audit Committee is responsible for review and approval of all related person transactions in which any officer, director or stockholder has a direct or indirect interest and would be required to be disclosed under Items 404(a) and 404(d) of Regulation S-K, and has written policies and procedures for reviewing, approving or ratifying any transaction required to be reported under Items 404(a) and 404(d) of Regulation S-K. In reviewing related person transactions, the Audit Committee evaluates any transaction in which the Company was or is to be a participant and the amount involved exceeds the lesser of $120,000 or one percent (1%) of the average of the Company’s total assets at year end for the last two completed fiscal years, and in which the “related person” (as defined in Item 404(a) of Regulation S-K) had, or will have, a direct or indirect material interest. The Audit Committee also will consider whether the proposed terms are at least as favorable to the Company as could be obtained from unaffiliated third parties and will confirm that there is a bona fide business purpose for the transaction. There were no related person transactions since January 1, 2022 that require disclosure under Item 404 of Regulation S-K.

19

EXECUTIVE COMPENSATION

Overview

The following information describes the material elements of 2023 compensation awarded to, earned by, or paid to each of the following executive officers, who are referred to collectively as our “Named Executive Officers”:

• Craig Collard, Chief Executive Officer;

• Ira Duarte, Chief Financial Officer;

• William Forbes, Chief Development Officer;

• Barry Quart, Pharm.D., Former Chairman and Chief Executive Officer; and

• David Szekeres, Former Executive Vice President, Chief Operating Officer.

The following table represents summary information regarding the compensation of each of our Named Executive Officers for 2023 and 2022.

20

2023 Summary Compensation Table

Name and Principal Position	Year	Salary	Stock Awards(1)	Option Awards(1)	Non-Equity Incentive Plan Compensation(2)	All Other Compensation(3)	Total
Craig Collard(4),(6) Chief Executive Officer	2023	$492,986	$547,273	$9,257,049	$326,957	$151,553	$10,775,818
	2022	$—	$—	$—	$—	$—	$—
Ira Duarte(4) Chief Financial Officer	2023	$271,154	$60,500	$1,066,875	$128,844	$7,500	$1,534,873
	2022	$—	$—	$—	$—	$—	$—
William Forbes(4) Chief Development Officer	2023	$329,519	$55,500	$917,433	$155,654	$—	$1,458,106
	2022	$—	$—	$—	$—	$—	$—
Barry Quart, Pharm.D.(4),(5) Former Chief Executive Officer	2023	$188,501	$788,615	$1,625,625	$—	$1,427,606	$4,030,347
	2022	$736,000	$—	$—	$386,400	$23,304	$1,145,704
David Szekeres(4),(5) Executive Vice President, Chief Commercial Officer	2023	$305,539	$400,920	$—	$—	$1,170,920	$1,877,379
	2022	$533,013	$441,456	$235,482	$199,880	$19,400	$1,429,231

(1)
This column represents the aggregate grant date fair value, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 718, for stock awards and option awards granted to the Named Executive Officers in 2023 and 2022. The assumptions used in calculating the fair value of the stock awards and options can be found under Note 10 to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023. These amounts reflect the grant date fair value for these stock awards and option awards and do not necessarily correspond to the actual value that will be realized by the Named Executive Officers. For additional information on stock awards and options granted to the Named Executive Officers in 2023 and in prior years, and outstanding as of the end of fiscal 2023, see below under “Outstanding Equity Awards at Fiscal Year-End.”

(2)
The amounts listed represent cash awards earned for the year under the Company’s annual cash incentive bonus program. For additional information regarding the annual cash incentive bonus program, see below under “Executive Compensation-Compensation Elements-Annual Cash Incentive Bonus.”

(3)
“All Other Compensation” listed consist of our matching contributions on behalf of the named individual to our 401(k) Plan, a cash out of accrued vacation and the severance paid to our former executives in 2023 and a housing allowance provided to Mr. Collard.

(4)
The salary included in the table above is pro-rated for the portion of the year employed by the Company.

(5)
Dr. Quart ceased to serve as our Chief Executive Officer, Chairman of the Board, and as a director as of April 3, 2023. David Szekeres ceased to serve as our Executive Vice President, Chief Commercial Officer as of July 20, 2023. The departures of Dr. Quart and Mr. Szekeres were initiated by the company and they received severance compensation to which they were entitled by their respective pre-existing Employment Agreements, as amended, in Section 4.4 called Compensation Upon Termination.

(6)
The compensation for Mr. Collard includes cash compensation of $5,486 and stock awards and option awards provided for Mr. Collard for his service as a member of the Board of Directors.

Narrative to Summary Compensation Table

Compensation Elements

Base Salary

The Board approved the following base salary increases for 2024 based on performance during 2023:

Executive	Principal Position	2023 Base Salary	Base Salary Increase %	Adjusted Salary For 2024
Craig Collard	Chief Executive Officer	$650,000	3%	$669,500
William Forbes	Chief Development Officer	$575,000	3%	$592,250
Ira Duarte	Chief Financial Officer	$500,000	3%	$515,000
Barry Quart	Former Chief Executive Officer	$758,080	N/A	N/A
David Szekeres	Former Executive Vice President, Chief Operating Officer	$551,669	N/A	N/A

Base salary increases for the two former Named Executive Officers were not applicable in 2024 due to their departures in 2023. Their base salary increases for Dr. Quart and Mr. Szekeres in 2023 were three percent (3.0%) and three- and one-half percent (3.5%) respectively. These 2023 salary increases were smaller than the increases of 2022 which were given during a period of higher wage growth across the entire labor market.

21

Annual Cash Incentive Bonus

In determining the annual cash incentive bonus payout for executives, the Named Executive Officer’s annual base salary is multiplied by his or her target bonus percentage. For Mr. Collard, Ms. Duarte, and Dr. Forbes each of whose bonus is weighted primarily on corporate goal achievement, the resulting amount is then multiplied by the corporate performance percentage approved by the Compensation Committee or the Board, which is based on the achievement of corporate performance goals. For annual cash incentive bonuses to our Named Executive Officers, a minimum overall goal achievement of greater than or equal to fifty percent (50%) is required for any performance-based cash bonus to be earned. The target annual cash incentive bonus can be earned if a goal achievement of one hundred percent (100%) is obtained; for extraordinary performance in corporate goal achievement, up to one hundred fifty percent (150%) of the target annual cash incentive bonus for that goal may be awarded. Accordingly, for each Named Executive Officer in 2023, there was the potential to receive up to one hundred fifty percent (150%) of his or her overall target annual cash incentive bonus payout. The Compensation Committee retains sole discretion to modify our target corporate performance goals at any time, including the methodology for calculating the specific bonus amounts. The Compensation Committee may also, in its sole discretion, determine to either increase annual cash incentive bonus payouts for extraordinary achievement or to reduce payouts if economic and business conditions warrant. For the 2023 cash incentive bonuses, the Compensation Committee did not modify any goals but slightly modified the individual bonus payout for Mr. Collard as noted below.

Our corporate goals are collectively designed to emphasize success with respect to our diverse business efforts and encourage our Named Executive Officers to support each goal as a multi-disciplinary function. For 2023, our corporate goals were a combination of the following: (1) launching APONVIE^® for prevention of post-operative nausea and vomiting; (2) meeting certain commercial sales targets for all Company products; (3) receiving FDA approval on the supplemental NDA to expand the indication for ZYNRELEF^®; (4) achieving certain drug development milestones; and (5) financial goals, including raising money and reducing expenses. The Compensation Committee’s analysis of the level of achievement for each goal was subjective and the goals were considered in the aggregate, without a formulaic evaluation. In the aggregate, the Compensation Committee determined that overall, the corporate performance goals had been achieved at a level of ninety percent (90%) for Mr. Collard, and ninety-five percent (95%) for the remaining Named Executive Officers. Corresponding payouts are noted in the table below. The bonus targets for the former Named Executive Officers were not increased from 2022.

Executive	Principal Position	2023 Base Salary	2023 Target	2023 Corporate Performance Achievement	2023 Annual Cash Incentive Bonus
Craig Collard	Chief Executive Officer	$650,000	75%	90%	$326,957
William Forbes	Chief Development Officer	$575,000	50%	95%	$155,653
Ira Duarte	Chief Financial Officer	$500,000	50%	95%	$128,843
Barry Quart	Former Chief Executive Officer	$758,080	70%	N/A	N/A
David Szekeres	Former Executive Vice President, Chief Operating Officer	$551,669	50%	N/A	N/A

Equity-Based Compensation

Under the 2007 Plan, the Board (or a committee thereof, including the Compensation Committee) may grant stock options, shares of stock, restricted stock units, stock appreciation rights and performance awards. In granting these equity awards, the Board (or a committee thereof, including the Compensation Committee) may establish any conditions or restrictions it deems appropriate.

Equity awards to the new and continuing Named Executive Officers consists of a mix of time-based stock options, performance-based stock options, and time-based restricted stock units. The time-based stock options vest over a four-year period, with twenty-five percent (25%) of the shares vesting upon the first anniversary of the grant and then vesting ratably on a monthly basis, with twenty-five percent (25%) of the shares vesting during each of the second, third and fourth year. The time-based restricted stock units vest in four equal

22

installments annually on the anniversary of the grant date, over a four-year period. The performance stock options vest upon the Company’s stock price reaching pre-established levels as specified in the grant agreement. The number of performance stock options that will vest is dependent upon the achievement of the pre-established levels of the Company’s stock price.

For 2023, the Compensation Committee did not award annual grants to our continuing Named Executive Officers, including the Chief Executive Officer. With respect to our former Named Executive Officers, the former Chief Executive Officer received a stock option grant in January 2023 and a Performance Stock Unit (“PSU”) grant in February 2023. Additionally, the former Named Executive Officers received a Performance Stock Unit grant in February 2023. The performance-based grant for the former Named Executive Officers provided for shares to be earned and vested upon achievement of certain sales and drug development milestones over a period of four years. The possibility of vesting in the first year could only occur if the Company achieved accelerated results, the probability of which was low for 2023, with increasing probability for achievement with each subsequent year. Due to the departures of Mr. Szekeres and Dr. Quart during 2023, none of the PSUs granted in 2023 to our former Named Executive Officers were earned or vested and were therefore forfeited upon their separation from the Company.

There were no annual or other equity grants given to any of the continuing Named Executive Officers in 2023 aside from their new hire awards granted on the date of hire as an inducement for the executives hired as part of the Company restructuring. We used peer-group data and survey data for similarly situated companies in our industry to help set the appropriate value of our Named Executive Officer grants. The Compensation Committee-approved equity grants were as follows:

Executive	Performance-Based Stock Unit Award(1)	Performance-Based Stock Option Award(2)	Time-Based Option Award	Time-Based Restricted Stock Unit Award
Craig Collard	—	4,250,000	3,227,272	287,879
Ira Duarte	—	500,000	800,000	50,000
William Forbes	—	700,000	500,000	50,000
Barry Quart, Pharm.D.	306,854	—	850,000	—
David Szekeres	156,000	—	—	—

(1)
PSUs vest upon achievement of certain corporate performance goals and time-based vesting. The PSUs granted to the former Named Executive Officers were cancelled upon their respective terminations.

(2)
Performance stock options vest upon the Company’s stock price reaching pre-established levels as specified in the grant agreement. The number of performance stock options that will vest is dependent upon the achievement of the pre-established levels of the Company's stock price.

23

2023 Outstanding Equity Awards at Fiscal Year End

The following tables set forth certain information regarding outstanding equity awards granted to our Named Executive Officers that remain outstanding as of December 31, 2023:

Stock Options

	Number of Securities Underlying Unexercised Options		Equity Incentive Plan Awards:	Option Exercise Price ($)	Option Grant Date	Option Expiration Date
Name	Exercisable (#)	Unexercisable (#)	Number of securities underlying unexercised unearned options (#)
Craig Collard	—	—	4,250,000(1)	$1.78	4/3/2023	4/3/2033
	—	224,716(2)	—	$1.78	4/3/2023	4/3/2033
	—	2,775,284(3)	—	$1.78	4/3/2023	4/3/2033
Ira Duarte	—	800,000(3)	—	$1.21	6/16/2023	6/16/2033
	—	—	500,000(1)	$1.21	6/16/2023	6/16/2033
William Forbes	—	500,000(3)	—	$1.11	6/6/2023	6/6/2033
	—	—	700,000(1)	$1.11	6/6/2023	6/6/2033
Barry Quart, Pharm.D.	—	—	—	$—	—	—
David Szekeres	24,688	—	—	$16.20	3/17/2016	3/17/2026
	145,312	—	—	$16.20	3/17/2016	3/17/2026
	2,083	—	—	$16.83	10/7/2016	10/7/2026
	47,917	—	—	$16.83	10/7/2016	10/7/2026
	4	—	—	$13.00	12/21/2016	12/21/2026
	79,163	—	—	$13.00	12/21/2016	12/21/2026
	5,882	—	—	$17.00	12/18/2017	12/18/2027
	84,118	—	—	$17.00	12/18/2017	12/18/2027
	4,004	—	—	$24.97	12/15/2018	12/15/2028
	87,996	—	—	$24.97	12/15/2018	12/15/2028
	3,996	—	—	$25.02	12/19/2019	12/19/2029
	111,004	—	—	$25.02	12/19/2019	12/19/2029
	6,363	—	—	$15.72	10/13/2020	10/13/2030
	29,637	—	—	$15.72	10/13/2020	10/13/2030
	120,000	—	—	$15.72	10/13/2020	10/13/2030
	81,136	—	—	$10.55	10/13/2021	10/13/2031
	3	—	—	$3.17	7/25/2022	7/25/2032
	165,958	—	—	$3.17	7/25/2022	7/25/2032

(1)
Options vest upon achievement of the Company’s stock price reaching pre-established levels as specified in the grant agreement.

(2)
Options vest over a four-year period, with fifteen percent (15%) of the shares vesting upon the first anniversary of the grant and then vesting ratably on a monthly basis, with eighteen percent (18%) of the shares vesting during the second year, twenty-five percent (25%) of the shares vesting during the third year and forty-two percent (42%) vesting during the fourth year.

(3)
Options vest over a four-year period, with 25% of the shares vesting upon the first anniversary of the grant and then vesting ratably on a monthly basis, with twenty-five percent (25%) of the shares vesting during each of the second, third and fourth year.

24

Restricted Stock Units

	Stock Awards
Name	Number of Shares or Units of Stock that Have Not Vested (#)	Market Value of Shares or Units of Stock that Have Not Vested ($)(1)	Grant Date
Craig Collard	250,000(2)	$425,000	4/3/2023
	30,777(3)	$52,321	2/22/2023
Ira Duarte	50,000(2)	$85,000	6/16/2023
William Forbes	50,000(2)	$85,000	6/6/2023
Barry Quart, Pharm.D.	—	$—	—
David Szekeres	—	$—	—

(1)
Market value of unvested shares is based on the closing price of our shares of common stock of $1.70 on December 29, 2023.

(2)
Restricted stock units vest in four equal installments annually on the anniversary of the grant date, over a four-year period.

(3)
Restricted stock units vest in sixteen equal installments quarterly on the anniversary of the grant date, over a four-year period.

Employee Benefit Programs

Our ESPP provides employees with an opportunity for increased equity ownership in the Company. Other than these benefits generally available to all employees, Named Executive Officers do not receive any other benefits or perquisites.

Our retirement savings plan (“401(k) Plan”) is a tax-qualified retirement savings plan, pursuant to which all employees, including the Named Executive Officers, are able to contribute the lesser of one hundred percent (100%) of their annual compensation (as defined in the 401(k) Plan) or the limit prescribed by the Internal Revenue Service to the 401(k) Plan on a pre-tax basis. In 2023, we matched employee contributions to the 401(k) Plan in an amount equal to fifty percent (50%) of each participant’s contribution during the plan year, up to a maximum amount equal to the lesser of either: (a) three percent (3%) of each participant’s annual compensation; or (b) $9,900.

Our vacation cash-out policy allows all employees, including Named Executive Officers, the opportunity to receive pay in lieu of time off for up to 40 hours per calendar year of accrued unused vacation if their vacation balance is approaching the policy’s accrual cap.

Employment and Separation Arrangements

We have entered into employment agreements with each continuing Named Executive Officer, the terms of which provide, among other things, for certain termination and change-in-control payments and benefits. Our Board approved the termination and change-in-control payments and benefits in order to maintain market-competitive compensation practices and to mitigate some of the risk that exists for executives working in a biopharmaceutical company at our current stage of operation, where the possibility exists that a change in control could occur if our business efforts succeed. These arrangements are intended to retain highly skilled executives who have, or who may seek, alternatives that may appear to them to be less risky in terms of the potential loss of their position following a change in control, particularly where the services of these executive officers may not be required following a transaction. We do not provide any of our Named Executive Officers with gross-up protection for “golden parachute” excise taxes in any of these arrangements.

A summary of the terms of each of the arrangements we have with each Named Executive Officer who is currently employed by the Company and the payments and benefits on termination of employment or change in control is provided in this Proxy Statement under the headings “Employment Arrangements”.

Employment Arrangements

Below are descriptions of the material terms of the employment arrangements entered into with our Named Executive Officers.

25

Craig Collard

In connection with his appointment as Chief Executive Officer, the Company entered into an executive employment agreement with Craig Collard on April 3, 2023 (the “Collard Agreement”). The Collard Agreement provided Mr. Collard with a base salary of $650,000 annually which was raised to $669,500 annually for 2024. Mr. Collard is also eligible for an annual target cash incentive bonus in an amount equal to seventy-five percent (75%) of his base salary.

Additionally, the Collard Agreement, provides that if Mr. Collard’s employment is terminated by the Company without “Cause,” or by Mr. Collard for “Good Reason” (each as defined in the Collard Agreement), then he shall be entitled to receive: (i) a lump-sum payment equal to the sum of his annual base salary then in effect and his target performance bonus then in effect, less required deductions and withholdings; and (ii) accelerated time-based vesting of shares subject to all stock awards issued by the Company, for the number of shares that would have vested accordingly had he continued employment with the Company for a period of twelve months after termination (which includes partial accelerated vesting of awards subject to time-vesting, but does not include awards that remain subject to performance criteria as of the date of termination). The Company also agreed to reimburse for, or continue to pay, for health care benefits during the twelve months after the date of termination, or, if sooner, such date when he is no longer eligible for such benefits under applicable law. Per the Collard Agreement, in the event Mr. Collard’s employment is terminated by the Company without Cause, or if he resigns for Good Reason within three months before, or within eighteen months following, a Change in Control (as defined in the Collard Agreement) of the Company, then, in lieu of the above benefits, Mr. Collard would be entitled to receive: (i) a lump sum payment equal to the sum of his annual base salary then in effect, less required deductions and withholdings; and (ii) target performance bonus then in effect less required deductions and withholdings; and (iii) reimbursement for or continued payment of health care benefits during the twelve months after the date of termination, or such earlier date when he is no longer eligible for such benefits under applicable law. In addition, on the closing of a Change in Control transaction, Mr. Collard is entitled to accelerated vesting of one hundred percent (100%) of any outstanding and unvested time-based stock awards and immediate vesting of one hundred percent (100%) of any outstanding and unvested time-based stock awards. Additionally, upon the occurrence of a Change in Control, Mr. Collard will vest in one hundred percent (100%) of any outstanding and unvested performance-based stock awards held by Mr. Collard at such time (including any outstanding and unvested portion of granted performance-based stock options) based upon actual performance through the date of such Change in Control (and based on the value of the Company’s common stock in connection with the Change in Control, as applicable).

William Forbes

In connection with his appointment as Executive Vice President, Chief Development Officer, the Company entered into a management retention agreement with William Forbes on June 6, 2023 (the “Forbes Agreement”). Dr. Forbes was hired at an annual base salary of $575,000, which was raised to $592,250 annually for 2024, and he is also eligible for an annual cash incentive bonus in an amount equal to fifty percent (50%) of his base salary.

The Forbes Agreement provides that if Dr. Forbes’s. employment is terminated by the Company without “Cause,” or by Dr. Forbes for “Good Reason” (each as defined in the Forbes Agreement), then he shall be entitled to receive: (i) a lump-sum payment equal to the sum of his annual base salary then in effect less required deductions and withholdings; (ii) a lump sum payment equal to the average bonus paid by the Company to him for services during each of the three twelve-month periods (or such shorter period of time during which he was eligible for a bonus) prior to the involuntary termination date less required deductions and withholdings; and (iii) accelerated time-based vesting of shares subject to all stock awards issued by the Company, for the number of shares which would have vested accordingly had he continued employment with the Company for a period of twelve months after termination, but does not include awards that remain subject to performance criteria as of the date of termination. The Company also agreed to reimburse for, or continue to pay for, health care benefits during the twelve months after the date of termination, or such date when he is no longer eligible for such benefits under applicable law. In the event Dr. Forbes’s employment is terminated by the Company without Cause, or if he resigns for Good Reason within three months before, or within eighteen months following, a Change in Control (as defined in the Forbes Agreement) of the Company, then, in lieu of the above benefits, Dr. Forbes shall be entitled to receive: (i) a lump-sum payment equal to his annual base salary then in effect, less required deductions and withholdings; (ii) a lump-sum payment in an amount equal to the average bonus paid by

26

the Company to him for services during each of the three twelve-month periods (or such shorter period of time during which he was eligible for a bonus) prior to such termination or resignation date, less required deductions and withholdings; and (iii) accelerated vesting of one hundred percent (100%) of any outstanding and unvested time-based stock awards held by Dr. Forbes at such time. Additionally, upon the occurrence of a Change in Control, Dr. Forbes will vest in one hundred percent (100%) of any outstanding and unvested performance-based stock awards held by Dr. Forbes at such time (including any outstanding and unvested portion of granted performance-based stock options) based upon actual performance through the date of such Change in Control (and based on the value of the Company’s common stock in connection with the Change in Control, as applicable). The Company also agreed to reimburse for, or continue to pay for, health care benefits during the twelve months after the date of termination following a Change in Control, or such date when he is no longer eligible for such benefits under applicable law.

Ira Duarte

In connection with her appointment as Executive Vice President, Chief Financial Officer, the Company entered into a management retention agreement with Ira Duarte on June 16, 2023 (the “Duarte Agreement”). Ms. Duarte was hired at a base salary of $500,000 annually, which was raised to $515,000 annually for 2024, and she is also eligible for an annual target incentive bonus in an amount equal to fifty percent (50%) of her base salary.

The Duarte Agreement provides that if Ms. Duarte’s employment is terminated by the Company without “Cause,” or by Ms. Duarte for “Good Reason” (each as defined in the Duarte Agreement), then she shall be entitled to receive: (i) a lump-sum payment equal to the sum of her annual base salary then in effect less required deductions and withholdings; (ii) a lump sum payment equal to the average bonus paid by the Company to her for services during each of the three twelve-month periods (or such shorter period of time during which she was eligible for a bonus) prior to the involuntary termination date less required deductions and withholdings; and (iii) accelerated time-based vesting of shares subject to all stock awards issued by the Company, for the number of shares which would have vested accordingly had she continued employment with the Company for a period of twelve months after termination, but does not include awards that remain subject to performance criteria as of the date of termination. The Company also agreed to reimburse for, or continue to pay for, health care benefits during the twelve months after the date of termination, or such date when she is no longer eligible for such benefits under applicable law. In the event Ms. Duarte’s employment is terminated by the Company without Cause, or if she resigns for Good Reason within three months before, or within eighteen months following, a Change in Control (as defined in the Duarte Agreement) of the Company, then, in lieu of the above benefits, Ms. Duarte shall be entitled to receive: (i) a lump-sum payment equal to her annual base salary then in effect, less required deductions and withholdings; (ii) a lump-sum payment in an amount equal to the average bonus paid by the Company to her for services during each of the three twelve-month periods (or such shorter period of time during which she was eligible for a bonus) prior to such termination or resignation date, less required deductions and withholdings; and (iii) accelerated vesting of one hundred percent (100%) of any outstanding and unvested time-based stock awards held by Ms. Duarte at such time. Additionally, upon the occurrence of a Change in Control, Ms. Duarte will vest in one hundred percent (100%) of any outstanding and unvested performance-based stock awards held by Ms. Duarte at such time (including any outstanding and unvested portion of granted performance-based stock options) based upon actual performance through the date of such Change in Control (and based on the value of the Company’s common stock in connection with the Change in Control, as applicable). The Company also agreed to reimburse for, or continue to pay for, health care benefits during the twelve months after the date of termination following a Change in Control, or such date when she is no longer eligible for such benefits under applicable law.

Director Compensation

Employee directors do not receive any compensation for their service as members of our Board.

In 2022, the Board engaged Compensia to conduct an assessment of our Board compensation program as compared to the same peer group used for purposes of reviewing our executive compensation program. The annual cash retainer paid to non-employee members of our Board for general service approximates the 50^th percentile of our peer companies and the annual equity-based compensation of our Board for general board service is above the 75^th percentile of our peer companies. The use of stock option and restricted stock unit grants further enhances our non-employee Board members’ long-term equity stake in the Company. In particular,

27

because the realization of financial gain from stock option grants is conditioned on the continued increase of the price of the Company’s common stock, the Company believes that stock option grants encourage our directors to engage in behaviors and implement initiatives that lead to long-term value creation that benefits all of the Company’s stockholders. Our average total direct compensation per director, including remunerations for committee service, is above the 50^th percentile.

The Board approved the following compensation for non-employee directors for 2023:

Cash Compensation

Cash Compensation
Annual Board Cash Retainer*	$50,000
Annual Lead Independent Director Cash Retainer*	$25,000
Annual Audit Committee Chair Cash Retainer*	$20,000
Annual Audit Committee Member Cash Retainer*	$10,000
Annual Compensation Committee Chair Cash Retainer*	$15,000
Annual Compensation Committee Member Cash Retainer*	$7,500
Annual Nominating & Corporate Governance Committee Chair Cash Retainer*	$10,000
Annual Nominating & Corporate Governance Committee Member Cash Retainer*	$5,000

*
paid in quarterly installments

Equity-Based Compensation (shares underlying awards)

Board Grants	Shares (#)
Initial Option Award(1)	227,272
Initial Stock Award(2)	37,879
Annual Option Award	—
Annual Stock Award	—

(1)
Options vest and become exercisable monthly over a four-year period from the date of grant.

(2)
Restricted stock units vest quarterly over a four-year period from the date of grant.

On December 21, 2022, continuing board members were granted stock awards and option awards for their 2023 board service.

The following table includes compensation for services provided by our non-employee directors for the year ended December 31, 2023:

Directors(5)	Fees Earned or Paid in Cash	Option Awards(3)		Stock Awards(3)		Total
Craig Collard(1)	$—	$	—	$	—	$—
Sharmila Dissanaike, M.D., FACS, FCCM	$55,000	$	—	$	—	$55,000
Craig Johnson	$79,028	$	—	$	—	$79,028
Kevin Kotler(2)	$62,014	$	78,716	$	19,175	$159,905
Adam Morgan	$65,417	$	377,840	$	102,273	$545,530
Susan Rodriguez	$65,625	$	—	$	—	$65,625
Christian Waage	$70,514	$	—	$	—	$70,514

(1)
Mr. Collard received compensation for his services as a director, before being appointed as the Company’s Chief Executive Officer on April 3, 2023. Information relating to the compensation paid to Craig Collard for services as a director is included in the Summary Compensation Table above.

(2)
Mr. Kotler resigned as a member of the Board effective December 21, 2023. During 2023, Mr. Kotler was granted option awards of 227,272, of which 179,924 was cancelled upon his resignation and stock awards of 37,789, of which 30,777 was cancelled upon his resignation.

28

(3)
These columns reflect the aggregate grant date fair value of equity awards granted in 2023 and calculated in accordance with FASB ASC 718. The assumptions used in our Annual Report on Form 10-K for the year ended December 31, 2023.

(4)
The Option Awards vest ratably on a monthly basis over forty-eight months and the Stock Awards vest ratably on a quarterly basis over sixteen quarters.

(5)
The aggregate number of shares subject to outstanding stock options held by each director listed in the table above as of December 31, 2023 was as follows: 7,250,000 shares for Mr. Collard, 16,406 shares for Dr. Dissanaike, zero shares for Mr. Johnson and Mr. Kotler, 179,924 shares for Mr. Morgan, 16,406 shares for Ms. Rodriguez and zero shares for Mr. Waage. In addition, the following shares subject to outstanding restricted stock units as of December 31, 2023 was as follows: 280,777 shares for Mr. Collard, 2,734 shares for Dr. Dissanaike, zero shares for Mr. Johnson and Mr. Kotler, 30,777 shares for Mr. Morgan, 2,734 shares for Ms. Rodriguez and zero shares for Mr. Waage.

29

Pay versus Performance

As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. For further information concerning the Company’s compensation philosophy and how the Company seeks to align executive compensation with the Company’s performance, refer to “Executive Compensation—Narrative to Summary Compensation Table.”

Year	Summary Compensation Table Total for Current PEO ($)(1)	Summary Compensation Table Total for Former PEO ($)(1)	Compensation Actually Paid to Current PEO ($)(2)	Compensation Actually Paid to Former PEO ($)(2)	Average Summary Compensation Table Total for Non-PEO NEOs ($)(3)	Average Compensation Actually Paid to Non-PEO NEOs ($)(4)	Value of Initial Fixed $100 Investment Based On: Total Shareholder Return(5)	Net Loss (millions)(6)
(a)	(b)	(b)	(c)	(c)	(d)	(e)	(f)	(g)
2023	$10,775,818	$4,030,347	$10,089,399	$673,388	$1,623,453	$1,179,569	$8.03	$(111)
2022	—	1,145,704	—	(2,798,657)	1,438,169	357,507	11.81	(182)
2021	—	5,430,828	—	(1,032,982)	1,581,471	(619,359)	43.14	(221)

(1)
The dollar amounts reported in column (b) are the amounts of total compensation reported for Craig Collard and Barry Quart (our former Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation—Summary Compensation Table.”

(2)
The dollar amounts reported in column (e) represent the amount of “compensation actually paid” to Craig Collard and Barry Quart, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Craig Collard or Barry Quart during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Craig Collard's and Barry Quart’s total compensation for each year to determine the compensation actually paid:

Year	Reported Summary Compensation Table Total for Current PEO ($)	Reported Summary Compensation Table Total for Former PEO ($)	Reported Value of Equity Awards to Current PEO ($)	Reported Value of Equity Awards to Former PEO ($)	Equity Award Adjustments - Current PEO ($)	Equity Award Adjustments - Former PEO ($)	Compensation Actually Paid to Current PEO ($)	Compensation Actually Paid to Former PEO ($)
2023	$10,775,818	$4,030,347	$(9,804,322)	$(2,414,240)	$9,117,903	$(942,718)	$10,089,399	$673,388

• The “Reported Value of Equity Awards” represents the grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for 2023.

• The equity award adjustments include the addition (or subtraction, as applicable) of the following: (i) the 2023 year-end fair value of any equity awards granted in 2023 that are outstanding and unvested as of the end of 2023; (ii) the amount of change as of the end of the 2023 (from the end of 2022) in fair value of any awards granted prior to 2023 that are outstanding and unvested as of the end of 2023; (iii) for awards that are granted and vest in 2023, the fair value as of the vesting date; (iv) for awards granted prior to 2023 that vest in 2023, the amount equal to the change as of the vesting date (from the end of 2022) in fair value; and (v) for awards granted prior to 2022 that are determined to fail to meet the applicable vesting conditions during 2022, a deduction for the amount equal to the fair value at the end of 2022. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows:

Year	Year End Fair Value of Equity Awards granted in 20–3- Current PEO ($)	Year Over Year Change in Fair Value of Outstanding and Unvested Equity Awards ($)	Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($)	Year Over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($)	Year Over Year Change in Fair Value of Equity Awards Granted in Prior Years that Failed to Meet Vesting Conditions	Total Equity Award Adjustments - Current PEO ($)
2023	$9,107,321	$—	$10,582	$—	$—	$9,117,903

Year	Year End Fair Value of Equity Awards granted in 20–3 - Former PEO ($)	Year Over Year Change in Fair Value of Outstanding and Unvested Equity Awards ($)	Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($)	Year Over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($)	Year Over Year Change in Fair Value of Equity Awards Granted in Prior Years that Failed to Meet Vesting Conditions	Total Equity Award Adjustments - Former PEO ($)
2023	$—	$—	$—	$(549,550)	$(393,168)	$(942,718)

(3)
The dollar amounts reported in column (d) represent the average of the amounts reported for the NEOs as a group (excluding the PEO in each respective year) in the “Total” column of the Summary Compensation Table in each applicable year. The NEOs (excluding the PEO) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2023, Ira Duarte, William Forbes, and David Szkeres; (ii) for 2022, Kimberly Manhard, and David Szekeres , and (iii) for 2021, Kimberly Manhard, John Poyhonen, David Szekeres and Lisa Peraza.

30

(4)
The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding the PEO), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding the PEO) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding the PEO) for 2023 to determine the compensation actually paid, using the same methodology described above:

Year	Average Reported Summary Compensation Table Total for Non-PEO NEOs ($)	Average Reported Value of Equity Awards - NEOs ($)	Average Equity Award Adjustments - NEOs ($)	Average Compensation Actually Paid to Non-PEO NEOs ($)
2023	$1,623,453	$(500,246)	$56,362	$1,179,569

• The amounts deducted or added in calculating the total average equity award adjustments are as follows:

Year	Average Year End Fair Value of Equity Awards granted in 2023 ($)	Year Over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards ($)	Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($)	Year Over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($)	Year Over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Failed to Meet Vesting Conditions	Total Average Equity Award Adjustments - NEOs ($)
2023	$575,333	$—	$—	($360,313)	($158,659)	$56,362

(5)
Cumulative Total Shareholder Return (“TSR”) is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period.

(6)
The dollar amounts reported in column (g) represent the amount of net income (loss) reflected in the Company’s audited financial statements for the applicable year.

Analysis of the Information Presented in the Pay Versus Performance Table

We generally seek to incentivize long-term performance, and therefore do not specifically align our performance measures with “compensation actually paid” (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following description of the relationships between information presented in the Pay Versus Performance table.

Compensation Actually Paid and Net Income (Loss)

As shown in the following graph, the compensation actually paid to Mr. Collard and Dr. Quart and the average amount of compensation actually paid to our non-PEO NEOs as a group (excluding Mr. Collard and Dr. Quart) during the periods presented appear to have some correlation because a significant portion of their compensation is in the form of long-term equity awards. The equity award values are significantly impacted by changes in our stock price each period. These equity awards strongly align our executive officers' interests with those of our stockholders by providing a continuing financial incentive to maximize long-term value for our stockholders and by encouraging our executive officers to continue in our employment for the long-term.

 

31

Compensation Actually Paid and Cumulative TSR

As shown in the following graph, the compensation actually paid to Mr. Collard and Dr. Quart and the average amount of compensation actually paid to our non-PEO NEOs as a group (excluding Mr. Collard and Dr. Quart) during the periods presented appear to have some correlation because a significant portion of their compensation is in the form of long-term equity awards. The equity award values are significantly impacted by changes in our stock price each period. These equity awards strongly align our executive officers' interests with those of our stockholders by providing a continuing financial incentive to maximize long-term value for our stockholders and by encouraging our executive officers to continue in our employment for the long-term.

 

All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference in any filing of our Company under the Securities Act of 1933, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

32

REPORT OF THE AUDIT COMMITTEE

The Audit Committee assists the Board in overseeing the integrity of our accounting and financial reporting processes and the audit of the Company’s financial statements in accordance with the Audit Committee’s written charter, a copy of which is available on the Company’s website at www.herontx.com. The Audit Committee is responsible for evaluating and overseeing the work performed by the Company’s independent registered public accounting firm and the performance of our internal audit function.

The Audit Committee’s functions are not intended to duplicate or to certify the activities of management and the independent registered public accounting firm.

The Audit Committee oversees the Company’s accounting and financial reporting processes on behalf of the Board. The Company’s management has the primary responsibility for the preparation, presentation and integrity of the Company’s financial statements and for establishing and maintaining an effective system of internal control over financial reporting and assessing the effectiveness of internal control over financial reporting. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the audited financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2023, and management’s assessment of the effectiveness of the Company’s internal control over financial reporting with management.

The Audit Committee has discussed with the Company’s independent registered public accounting firm, which is responsible for expressing an opinion on the conformity of the audited financial statements with accounting principles generally accepted in the United States of America, their judgments as to the quality and the acceptability of the Company’s financial reporting and 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 received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence. The Audit Committee has discussed with the independent registered public accounting firm their independence from the Company and from management.

The Audit Committee meets with the independent registered public accounting firm periodically, with and without management present, to discuss the results of the independent registered public accounting firm’s examinations, the overall quality of the Company’s financial reporting and the independent registered public accounting firm’s reviews of the quarterly financial statements and drafts of the quarterly and annual reports.

Based on the reviews, discussions, and written disclosures referred to above, the Audit Committee recommended to the Board that the Company’s audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for filing with the SEC.

Craig Johnson, Chairperson

Susan Rodriguez

Christian Waage

33

FEES OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The following table shows the aggregate fees for services rendered in or provided for 2023 and 2022, as applicable, by Withum, our independent registered public accounting firm.

	2023	2022
Audit fees(1)	$540,660	$406,952
Audit-related fees(2)	24,960	22,880
Tax fees(3)	102,903	98,826
All other fees	—	—
Total	$668,523	$528,658

(1)
The audit fees for both 2023 and 2022 were for professional services rendered in connection with the audit of our annual financial statements and internal control over financial reporting and for the review of the quarterly financial statements. The amounts also include fees for services that are normally provided by the auditor in connection with regulatory filings and engagements for the years identified.

(2)
The audit-related fees for both 2023 and 2022 include fees for procedures performed during that year in connection with the audit of the Heron Therapeutics, Inc. 401(k) Plan.

(3)
Tax fees for both 2023 and 2022 consist of fees for tax compliance.

The Audit Committee reviews and pre-approves all audit and non-audit services performed by the Company’s independent registered public accounting firm, as well as the fees charged for such services, in accordance with the pre-approval policies and procedures that have been established by the Audit Committee. In its review of non-audit service fees, the Audit Committee will consider, among other things, the possible impact of the performance of such services on the auditor’s independence. All services rendered by Withum during 2023 and 2022 were pre-approved by the Audit Committee.

34

PROPOSAL 1 - ELECTION OF DIRECTORS

At the Annual Meeting, the stockholders will vote to elect six nominees to serve as directors of the Company until the 2025 Annual Meeting of Stockholders and until their successors are duly elected and qualified. Pursuant to the Cooperation Agreement, the Company agreed to initially appoint Messrs. Collard and Morgan to the Board and include Messrs. Collard and Morgan in the Company’s slate of nominees for the election of directors at the 2023 Annual Meeting of Stockholders and recommend that the Company’s stockholders vote in favor of their election at the 2023 Annual Meeting of Stockholders. Following their service on the Board during 2023, the Governance Committee has unanimously recommended their nomination for directors at the Annual Meeting. Upon such recommendation of the Governance Committee and the Governance Committee’s nominations with respect to the other director nominees named in this Proxy Statement, our Board has unanimously nominated Dr. Dissanaike, Ms. Rodriguez and Messrs. Collard, Johnson, Morgan and Waage for election as directors of the Company at the Annual Meeting and recommends that the Company’s stockholders vote in favor of their election at the Annual Meeting. The foregoing director nominees have indicated that they are willing and able to serve as directors if elected. If any of these individuals becomes unable or unwilling to serve, the accompanying proxy may be voted for the election of such other person as shall be designated by our Board or our Board may decrease the size of our Board. The proxies being solicited may be voted for no more than six director nominees at the Annual Meeting.

Vote Required and Board Recommendation

The director nominees shall be elected by a majority of the votes properly cast with respect to that director nominee, provided a quorum is established. Abstentions and broker non-votes will have no effect on the outcome of this proposal.

The Board of Directors recommends a vote “FOR” each of the director nominees.

Unless otherwise instructed, it is the intention of the persons named in the accompanying proxy card to vote shares represented by properly executed proxy cards for the election of Dr. Dissanaike, Ms. Rodriguez and Messrs. Collard, Johnson, Morgan, and Waage.

35

PROPOSAL 2 - RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Our Audit Committee has selected Withum as our independent registered public accounting firm for the year ending December 31, 2024. At the Annual Meeting, the stockholders will vote to ratify the appointment of Withum as our independent registered public accounting firm for the fiscal year ending December 31, 2024. Withum has audited our financial statements since August 2021, shortly after its acquisition of certain assets of OUM & Co. LLP, our independent registered accounting firm from 2006 through August 2021. Representatives of Withum are expected to be present online at the Annual Meeting and will have the opportunity to make statements if they desire to do so. Such representatives are also expected to be available to respond to appropriate questions.

Stockholder ratification of the appointment of Withum as our independent registered public accounting firm is not required by law or our bylaws. However, our Audit Committee is submitting the appointment of Withum to the stockholders for ratification as a matter of good corporate practice. In the event our stockholders fail to ratify the appointment of Withum, our Audit Committee will reconsider its selection. Even if the appointment is ratified, our 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.

Vote Required and Board Recommendation

The proposal to ratify the appointment of Withum as our independent registered public accounting firm for the fiscal year ending December 31, 2024 requires the affirmative vote of a majority of the votes properly cast, provided a quorum is established. Abstentions will have no effect on the outcome of this proposal. We do not expect any broker non-votes since we expect brokers, banks or other agents to have discretionary authority to vote on this proposal.

The Board of Directors recommends a vote “FOR” the ratification of the appointment of

Withum Smith+Brown, PC as our independent registered public accounting firm for the

fiscal year ending December 31, 2024.

36

PROPOSAL 3 - ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

At the Annual Meeting, our stockholders will have the opportunity to vote, on a nonbinding advisory basis, to approve the compensation of the Company’s Named Executive Officers, as identified in this Proxy Statement under the heading “Executive Compensation,” in accordance with Section 14A of the Exchange Act (also known as the “say-on-pay” vote). The say-on-pay vote is a nonbinding advisory vote on the compensation of our Named Executive Officers, as such compensation is disclosed pursuant to Item 402 of Regulation S-K in this Proxy Statement. The say-on-pay vote is not a vote on the Company’s general compensation policies, compensation of our Board or the Company’s compensation policies as they relate to risk management.

We conducted our first say-on-pay vote at our 2013 Annual Meeting of Stockholders. At that meeting, we also conducted the first nonbinding advisory vote of our stockholders with respect to whether future say-on-pay votes would be held every one, two or three years (also known as a “say-on-frequency” vote). At our 2019 Annual Meeting of Stockholders, we conducted our second say-on-frequency vote. At each of the 2013 and 2019 Annual Meetings of Stockholders, a plurality of the votes cast selected one year as the frequency of our future say-on-pay votes. Accordingly, we conduct a say-on-pay vote annually, including at the 2024 Annual Meeting of Stockholders, and we expect that our next say-on-pay vote will occur at the 2025 Annual Meeting of Stockholders. We hold a say-on-frequency vote at least once every six years. We anticipate that our next say-on-frequency vote will occur at the 2025 Annual Meeting of Stockholders.

The compensation paid to our Named Executive Officers is described in the compensation tables and the related narrative disclosure contained in this Proxy Statement. Pursuant to Section 14A of the Exchange Act, our Board is asking stockholders to cast a nonbinding advisory vote “FOR” the following resolution:

“RESOLVED, that the compensation paid to the Company’s Named Executive Officers, as described in the tabular disclosure regarding such compensation and the accompanying narrative disclosure, in each case as set forth in the Company’s definitive Proxy Statement for the 2024 Annual Meeting of Stockholders, is hereby approved.”

Although this vote is nonbinding, our Board values the views of our stockholders and will consider the outcome of the vote when determining future compensation arrangements for our Named Executive Officers.

Vote Required and Board Recommendation

The proposal to approve, on a nonbinding advisory basis, the compensation paid to our Named Executive Officers requires the affirmative vote of a majority of the votes properly cast, provided a quorum is established. Abstentions will have no effect on the outcome of this proposal. Under Delaware law, broker non-votes that occur with respect to this proposal will have no effect on the outcome of this proposal.

The Board of Directors recommends a vote “FOR” approval of the compensation paid to our

Named Executive Officers for the fiscal year ended December 31, 2023.

37

PROPOSAL 4 - AMENDMENT OF CERTIFICATE OF INCORPORATION TO INCREASE THE AGGREGATE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK

BY 175,000,000 FROM 225,000,000 TO 400,000,000

General

Our Board has approved, subject to stockholder approval at the Annual Meeting, an amendment to the Company’s Certificate of Incorporation in the form attached as Appendix A to this Proxy Statement (the “Charter Amendment”), to increase the aggregate number of shares of common stock that the Company is authorized to issue from 225,000,000 to 400,000,000, which would also increase the total number of authorized shares of capital stock from 227,500,000 to 402,500,000.

The newly authorized shares of common stock would have the same rights as the currently outstanding shares of our common stock. As of March 31, 2024, 150,362,664 shares of our common stock were issued and outstanding, 27,367,439 shares were subject to outstanding award under our 2007 Plan, 3,759,818 shares of our common stock were available for grants under the 2007 Plan, 1,460,510 shares of our common stock were available for issuance upon exercise of outstanding warrants, 9,819,300 shares of our common stock were reserved for issuance upon conversion of outstanding convertible notes and 1,666,670 shares of our common stock were reserved for issuance pursuant to our agreement with Crosslink Network, LLC. Accordingly, 194,436,401 of the 225,000,000 authorized shares of our common stock are currently issued or reserved while 30,563,599 of the authorized shares of our common stock remain available for future issuance. Assuming that that Proposals 5 (Amendment to the 2007 Plan) and 6 (Amendment to the ESPP) are approved at the Annual Meeting, on a pro forma basis as of March 31, 2024, 203,136,401 of the 225,000,000 authorized shares of our common stock would have been currently issued or reserved while 21,863,599 of the authorized shares of our common stock would remain available for future issuance.

If our stockholders approve this Proposal 4 at the Annual Meeting, we expect to file the Charter Amendment with the Delaware Secretary of State to increase the number of authorized shares of our common stock and capital stock as soon as practicable following the Annual Meeting. Upon the filing of the Charter Amendment with the Delaware Secretary of State, Section A of Article IV of the Company’s Certificate of Incorporation will be amended and restated as set forth in the Charter Amendment.

Reasons for Amendment

The purpose of the Charter Amendment is to provide the Company greater flexibility with respect to managing its common stock in connection with corporate purposes as may be considered advisable by the Board. These corporate purposes could include, without limitation: the issuance of shares in connection with equity financings; the issuance of shares in connection with acquisitions; the issuance of shares on exercise of options or other awards granted under the Company’s various equity compensation plans or in connection with other employee benefit plans; and other general corporate purposes. However, the Company does not have any current intention to issue shares, whether in connection with acquisitions, pursuant to an equity financing or otherwise and has not allocated any specific portion of the proposed increase in the authorized number of shares of common stock to any particular purpose.

General Effect of the Amendment

If approved at the Annual Meeting, the increase in authorized shares pursuant to the Charter Amendment will not have any immediate effect on the rights of existing stockholders. However, our Board may issue authorized shares without requiring future stockholder approval of such issuances, except as may be required by the Certificate of Incorporation and applicable law and regulations. To the extent that the additional authorized shares are issued in the future other than in connection with a stock dividend, they will decrease the existing stockholders’ percentage equity ownership and, depending on the price at which they are issued as compared to the price paid by existing stockholders for their shares, could be dilutive to our existing stockholders. The holders of common stock have no preemptive rights to subscribe for or purchase any additional shares of common stock that may be issued in the future.

38

Vote Required and Board Recommendation

The proposal to approve the Charter Amendment requires the affirmative vote of a majority of the votes properly cast on the proposal, provided a quorum is established. Abstentions will have no effect on the outcome of this proposal. We do not expect any broker non-votes since we expect brokers, banks or other agents to have discretionary authority to vote on this proposal.

The Board of Directors recommends a vote “FOR” the amendment of our Certificate of Incorporation to increase the aggregate number of authorized shares of common stock by 175,000,000 from 225,000,000 to

400,000,000.

39

PROPOSAL 5 — AMENDMENT OF OUR 2007 PLAN

General

At the Annual Meeting, stockholders are being asked to vote to approve an amendment to our 2007 Plan to increase the number of shares of common stock authorized for issuance thereunder from 39,190,000 to 46,690,000.

Our 2007 Plan provides long-term equity incentives to our employees, consultants and directors in order to encourage such award recipients to act in the stockholders’ interest and share in the Company’s future success. Subject to stockholder approval, our Board has approved the amendment to the 2007 Plan to increase the number of shares of common stock available for future grant thereunder by 7,500,000.

Reasons for Seeking the Share Increase

The Board believes that equity-based compensation is a critical part of the Company’s compensation program. Our 2007 Plan is overseen by our Compensation Committee as the delegate administrator. Stockholder approval of the 2007 Plan share increase would allow us greater flexibility to continue to attract, motivate and retain key personnel including directors, officers and other service providers, through equity-based compensation in a highly competitive industry. The Board further believes that, without stockholder approval of the 2007 Plan share increase, the Company’s ability to attract, motivate and retain key personnel would be significantly weakened.

Why We Believe the Share Increase Request is Reasonable

In 2021, 2022, and 2023 the Company granted equity awards covering an aggregate of 4,502,937, 7,128,055, and 14,407,885 shares of common stock under the 2007 Plan, respectively. The footnotes to the Company’s financial statements in its Annual Report on Form 10-K for each of the fiscal years ended December 31, 2021, 2022, and 2023 set forth detailed information regarding the equity awards granted each year, as well as the total number of outstanding shares with respect to each type of award. As of March 31, 2024, there were 3,759,818 shares of common stock remaining available for grants under the 2007 Plan, and the total number of shares of common stock subject to outstanding awards under the 2007 Plan was 27,367,439. If our stockholders approve the proposed amendment to the 2007 Plan, we will reduce the plan share reserve by the number of shares covered by awards that we grant under the 2007 Plan between March 31, 2024 and the date of the Annual Meeting.

The following table includes information regarding potential dilution from equity awards outstanding under the 2007 Plan and shares of common stock available for future grant under the 2007 Plan as of March 31, 2024, outstanding non-2007 Plan equity awards, as well as the proposed increase in shares of common stock available for future grant under the 2007 Plan:

	Number of Shares	As a percentage of common stock outstanding as of March 31, 2024 (150,362,664 shares)
Total shares of common stock subject to outstanding awards as of March 31, 2024 under the 2007 Plan	27,367,439	18.2%
Total shares of common stock available for future grant as of March 31, 2024 under the 2007 Plan	3,759,818	2.5%
Total shares of common stock subject to outstanding awards as of March 31, 2024 not under the 2007 Plan	4,010,000	2.7%
Proposed additional shares of common stock available for future grant under the 2007 plan	7,500,000	5.0%

In addition to overall dilution, the Compensation Committee reviewed annual dilution from the Company’s equity incentive plans during 2023 in approving the amendment to the 2007 Plan. The Company measures annual dilution as: (i) the total number of shares of common stock granted as equity awards during the year; less (ii) cancellations and other shares returned to the reserve; divided by (iii) total shares of common stock outstanding at the end of the year. The Company’s annual dilution for 2023 calculated on this basis was 1.0%.

40

The Company also monitors stockholder dilution by tracking the number of shares of common stock subject to equity awards that it grants annually, commonly referred to as “burn rate.” Burn rate shows how rapidly a company is depleting its shares reserved for equity-based compensation awards, and is calculated as: (i) the number of shares of common stock granted as equity awards during a fiscal year; divided by (ii) the weighted average number of shares of common stock outstanding during the year. The Company also evaluates and considers factors that may impact the burn rate. Such factors include stock price (that is, a lower stock price requires more shares to transfer the same value) and out-of-cycle grants (which include significant new hires and special one-time retention grants). The burn rate for the past three years is reflected in the following table:

	Equity Awards Granted	Weighted Average Number of Shares of Common Stock Outstanding	Burn Rate
2023	14,407,885(1)	138,135,000	10.4%
2022	7,128,055(2)	108,875,738	6.5%
2021	4,502,937(3)	98,471,488	4.6%

(1)
Includes 1,757,506 shares subject to restricted stock units.

(2)
Includes 1,831,508 shares subject to restricted stock units/performance stock units.

(3)
Includes 2,448,957 shares subject to restricted stock units.

The three-year average burn rate (calculated on the basis shown above) is seven and one-half percent (7.5%).

An additional metric that the Company uses to measure the cumulative impact of its equity program is “overhang.” We define overhang as: (i) the number of shares of common stock granted as equity awards, but not exercised or settled; plus (ii) the number of shares of common stock available to be granted; divided by (a) the sum of the total number of shares of common stock outstanding at the end of the year; plus (b) the number of shares of common stock granted as equity awards, but not exercised or settled; plus (c) the number of shares of common stock remaining available for grant. If the proposed amendment to the 2007 Plan is approved, the Company’s overhang calculated on this basis would increase from seventeen and two-tenths percent (17.2%) to twenty and one-half percent (20.5%), and then would be expected to decline as awards are exercised and/or become vested.

The Company believes that the increased number of shares of common stock available for grant requested under this proposal is necessary for the Company to continue to attract, motivate and retain key personnel as part of its overall compensation design. In approving the increase, the Compensation Committee believes that the share increase request is appropriate for our industry and consistent with the practices of our peer companies.

If stockholders do not approve this proposal, the Company will have insufficient shares remaining available for grant under the 2007 Plan which may significantly negatively affect our ability to grow our business by not providing equity-based compensation to attract, motivate and retain key employees.

Summary of the 2007 Plan

General. The following is a summary of the principal features of the 2007 Plan, as amended, together with the applicable tax implications with respect to the 2007 Plan. The summary is qualified by reference to the full text of the 2007 Plan, as amended, which is attached as Appendix A to this Proxy Statement.

The purpose of the 2007 Plan is to encourage ownership in the Company by key personnel whose long-term employment or other service relationship with the Company is considered essential to the Company’s continued progress and, thereby, encourage recipients to act in the stockholders’ interest and share in the Company’s success. Stock options and stock awards, including restricted stock, restricted stock units, stock appreciation rights and similar types of awards, may be granted under the 2007 Plan. Options granted under the 2007 Plan may be either “incentive stock options,” as defined in Section 422 of the United States Internal Revenue Code of 1986, as amended (the “Code”), or non-statutory stock options.

Administration. The 2007 Plan may be administered by our Board, a committee of our Board, or an employee or director delegated by our Board or our Board committee in accordance with the terms of the 2007 Plan (as applicable, the “Administrator”). Our Board has delegated this authority to our Compensation

41

Committee. The Administrator has the authority to, among other things, select the employees, consultants and directors to whom awards are granted under the 2007 Plan; determine the number of shares of common stock to be covered by each award; determine the type of award granted to the selected employees, consultants and directors; determine the terms and conditions, not inconsistent with the terms of the 2007 Plan, of any award; and to construe and interpret the terms of the 2007 Plan.

Eligibility. Awards may be granted under the 2007 Plan to employees, including our officers, directors and consultants of the Company or our affiliates. Incentive stock options may be granted only to our employees or employees of our subsidiaries, if any. As of March 31, 2024, 125 individuals were eligible to receive awards under the 2007 Plan, including 120 employees (including our three Named Executive Officers) and our five non-employee directors. The Administrator, in its discretion, selects the employees, directors and consultants to whom awards may be granted, the time or times at which such awards are granted, and the terms of such awards. However, no individual may be granted equity awards under the 2007 Plan covering more than fifty percent (50%) of the number of shares authorized for issuance under the 2007 Plan (i.e., 15,350,000 shares prior to the adoption of the amendment) in any calendar year, except that in connection with an individual’s commencement of service with us, he or she may be granted awards covering up to an additional 200,000 shares in the year in which such service commences.

Securities Subject to the 2007 Plan. If the amendment is approved, an aggregate of 39,190,000 shares of common stock will be reserved for issuance under the 2007 Plan. As of the Record Date, the closing price of our common stock was $2.45 per share. Unissued shares subject to awards that are canceled, expire or are forfeited will be available for re-grant or sale under the 2007 Plan. Notwithstanding the foregoing, if stockholders approve the amendment to the 2007 Plan, from and after such approval shares withheld by or delivered to satisfy the exercise price of options or tax withholding obligations with respect to any award granted under the 2007 Plan will nonetheless be deemed to have been issued under the 2007 Plan and will not be available for re-issuance under the 2007 Plan. Shares available under the 2007 Plan may be either outstanding shares repurchased by the Company or newly issued shares.

Director Awards. The aggregate dollar value of cash compensation and awards (based on the grant date fair value of such awards) granted under the 2007 Plan or otherwise during any calendar year to any one non-employee director shall not exceed $750,000. However, in any calendar year in which a non-employee director first joins the Board or is designated as Chairman of the Board, the maximum aggregate dollar value of equity-based and cash compensation granted to the non-employee director may be up to two hundred percent (200%) of the foregoing limit.

Minimum Vesting Period. Subject to carve outs for (i) up to five percent (5%) of the maximum number of shares that may be granted under the 2007 Plan, (ii) awards granted to non-employee directors prior to the next annual meeting held at least 50 weeks after the prior annual meeting, and (iii) in the cases of death, disability, retirement or a change in control, awards under the plan may not vest prior to the first anniversary of the grant date.

Terms and Conditions of Options. Each option is evidenced by a stock option agreement between us and the optionee specifying: (i) the number of shares subject to the option; (ii) the type of option; (iii) the exercise price with respect to the shares subject to the option and the means of payment for the shares; (iv) the term of the option; (v) the terms and conditions relating to the vesting and exercisability of the option; (vi) restrictions on transfer of the option or the shares subject to the option and forfeiture provisions; and (vii) such further terms and conditions, in each case not inconsistent with the 2007 Plan, as may be determined from time to time by the Administrator, and is subject to the following additional terms and conditions:

Exercise Price. The Administrator determines the exercise price of options at the time the options are granted. The exercise price of an incentive stock option or a non-statutory stock option may not be less than one hundred percent (100%) of the fair market value of the common stock on the date the option is granted and the exercise price of an incentive stock option granted to an employee who holds more than ten percent (10%) of our voting stock may not be less than one hundred ten percent (110%) of the fair market value of the common stock on the date the option is granted. The fair market value of the common stock is generally equal to the closing price for the shares as quoted on the principal exchange or quotation service for our common stock as of the applicable date.

42

Exercise of Option; Form of Consideration. The Administrator determines when options vest and become exercisable and in its discretion may accelerate the vesting of any outstanding option. Our standard vesting schedule applicable to options granted to employees has been a four-year period from the date of grant or the date of hire, assuming continued employment with us. The means of payment for shares issued upon exercise of an option are specified in each option agreement. The 2007 Plan permits payment to be made by cash, check, wire transfer, other shares of our common stock (with some restrictions), broker assisted same-day sales, a reduction in the amount of any of our liability owed to the awardee (including any liability attributable to the awardee’s participation in any of our deferred compensation programs or arrangements), any other form of consideration permitted by applicable law (which may include a “net exercise” program) and the Administrator, or any combination thereof.

Term of Option. The term of an option may be no more than ten years from the date of grant, although the term of an incentive stock option granted to an employee who holds more than ten percent (10%) of our voting stock may be no more than five years from the date of grant. No option may be exercised after the expiration of its term.

Terms and Conditions of Stock Awards. Stock awards may be restricted or unrestricted stock grants, restricted stock units, stock appreciation rights or other similar stock awards. Each stock award agreement contains provisions regarding (i) the number of shares subject to the stock award, (ii) the purchase price of the shares, if any, and the means of payment for the shares, (iii) the performance criteria, if any, and level of achievement versus these criteria that will determine the number of shares granted, issued, retainable and vested, as applicable, (iv) such terms and conditions on the grant, issuance, vesting and forfeiture of the shares, as applicable, as may be determined from time to time by the Administrator, (v) restrictions on the transferability of the stock award or the shares, and (vi) such further terms and conditions, in each case not inconsistent with the 2007 Plan, as may be determined from time to time by the Administrator.

Performance Criteria. The grant, issuance, retention, settlement and/or vesting of each stock award or the shares subject thereto may be subject to such performance criteria and the level of achievement versus these criteria as the Administrator shall determine, which criteria may be based on financial performance, personal performance evaluations and/or completion of service by the awardee.

The 2007 Plan provides that the Administrator may grant awards that vest or become exercisable upon the attainment of performance targets which are related to one or more of the following performance criteria, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit, affiliate or business segment (which may be measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison group): (i) cash flow; (ii) earnings (including gross margin; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings before taxes; and net earnings); (iii) earnings per share; (iv) growth in earnings or earnings per share; (v) stock price; (vi) return on equity or average stockholders’ equity; (vii) total stockholder return; (viii) return on capital; (ix) return on assets or net assets; (x) return on investment; (xi) revenue or growth in revenue; (xii) income or net income; (xiii) operating income or net operating income, in aggregate or per share; (xiv) operating profit or net operating profit; (xv) operating margin; (xvi) return on operating revenue; (xvii) market share; (xviii) contract awards or backlog; (xix) overhead or other expense reduction; (xx) growth in stockholder value relative to the moving average of the S&P 500 Index or a peer group index; (xxi) credit rating; (xxii) strategic plan development and implementation (including individual performance objectives that relate to achievement of the Company’s or any business unit’s strategic plan); (xxiii) improvement in workforce diversity; (xxiv) growth of revenue, operating income or net income; (xxv) efficiency ratio; (xxvi) ratio of nonperforming assets to total assets; and (xxvii) any other similar criteria. Our Compensation Committee (or another committee of directors appointed by the Board) may appropriately adjust any evaluation of performance under the criteria specified above to exclude any of the following events that occurs during a performance period: asset write-downs, litigation or claim judgments or settlements, the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results, accruals for reorganization and restructuring programs, any gains or losses classified as extraordinary or as discontinued operations in the Company’s financial statements, and merger, acquisitions or divestitures.

Adjustments upon Changes in Capitalization, Dissolution, Merger or Asset Sale. Subject to any required action by the stockholders of the Company, in the event of any stock split, reverse stock split, stock dividend, combination, reclassification of our common stock, payment of a dividend or distribution in a form other than

43

stock (excepting normal cash dividends) that has a material effect on the fair market value of our common stock or any other increase or decrease in the number of issued shares of our common stock effected without receipt of our consideration, proportionate adjustments shall be made to: (i) the number of shares of our common stock covered by each outstanding award under the 2007 Plan; (ii) the number of shares of our common stock which have been authorized for issuance under the 2007 Plan but as to which no awards have yet been granted or which have been returned to the 2007 Plan upon cancellation, forfeiture or expiration of an award; (iii) the aggregate and individual share limitations set forth in the 2007 Plan; and (iv) the price per share of our common stock covered by each such outstanding award under the 2007 Plan.

In the event of certain mergers with or into another corporation, sales of substantially all of our assets, direct or indirect sales or exchanges of more than fifty percent (50%) of our voting stock, liquidations and/or other transactions set forth in an award agreement, unless otherwise provided in an employment agreement (or award agreement, if applicable), in the event that the successor corporation does not assume or substitute for any outstanding award, such award will fully vest and, with respect to options and stock appreciation rights, become exercisable with respect to all of the shares subject to the award, and all performance goals or other vesting criteria with respect to such award will be deemed achieved at target levels and all other terms and conditions will be deemed met.

Term of the 2007 Plan and Amendment and Termination of the 2007 Plan. The 2007 Plan shall continue in effect until June 8, 2033 or, if stockholders approve this amendment of the 2007 Plan, ten years following such approval, unless terminated earlier. The Administrator may amend, alter or discontinue the 2007 Plan or any award agreement at any time. However, we will obtain stockholder approval for any amendment to the 2007 Plan if stockholder approval is necessary or desirable to comply with any applicable law or exchange listing requirements. In addition, we will obtain stockholder approval of any of the following: (i) a material increase in the number of shares available for issuance under the 2007 Plan (other than an adjustment on a stock split or other corporate transaction); (ii) a change of the class of persons eligible to receive awards under the 2007 Plan; (iii) a reduction in the minimum exercise prices at which options may be granted; or (iv) any amendment of outstanding options or stock appreciation rights that effects a repricing of such awards. Generally, no amendment of the 2007 Plan shall impair the rights of an outstanding award without the consent of the awardee.

Clawback requirements. Any awards granted under the 2007 Plan will be subject to recovery under any law, government regulation, stock exchange listing requirement, and any clawback policy adopted by the Company.

Awards under the 2007 Plan. The following table sets forth the options and restricted stock units issued under the 2007 Plan that were granted to specified persons or groups since the 2007 Plan’s inception, as of March 31, 2024.

Name	Position	Number of Shares Underlying Awards
Craig Collard	Chief Executive Officer	9,310,413
William Forbes	Chief Development Officer	483,924
Ira Duarte	Chief Financial Officer	483,924
Barry Quart, Pharm.D	Former Chief Executive Officer	4,214,902
David Szekeres	Former Executive Vice President, Chief Operating Officer	1,407,609
All current executive officers as a group		10,278,251
All current directors who are not executive officers as a group		1,772,971
Each nominee for election as a director
Christian Waage		361,003
Craig Johnson		472,228
Sharmila Dissanaike, M.D.		288,478
Susan Rodriguez		288,478
Adam Morgan		362,784
Each associate of any such directors, executive officers or nominees		—
Each other person who received or is to receive 5% of such options, warrants or rights		—
All current employees, including all officers who are not executive officers, as a group		12,396,445

44

New Plan Benefits. No awards have been made under the 2007 Plan, as proposed to be amended, and no awards have been granted that are contingent on the approval of the 2007 Plan, as proposed to be amended. Awards under the 2007 Plan, as proposed to be amended, would be made at the discretion of the Compensation Committee or the Board. Therefore, the benefits and amounts that will be received or allocated under the 2007 Plan, as proposed to be amended, in the future are not determinable at this time.

SEC Registration. We intend to file with the SEC a registration statement on Form S-8 covering the new shares reserved for issuance under the 2007 Plan in the second half of 2023.

Federal Income Tax Consequences

The following summary is intended only as a general guide to the U.S. federal income tax consequences of participation in the 2007 Plan. The summary is based on existing U.S. laws and regulations, and there can be no assurance that those laws and regulations will not change. The summary is not complete and does not discuss the tax consequences upon a participant’s death, or the income tax laws of any municipality, state or foreign country in which the participant may reside. Tax consequences for any particular participant may vary based on individual circumstances.

Incentive Stock Options. A participant recognizes no taxable income for regular income tax purposes because of the grant or exercise of an option that qualifies as incentive stock option under Section 422 of the Internal Revenue Code (“Code”). If a participant exercises the option and then later sells or otherwise disposes of the shares acquired through the exercise the option after both the two-year anniversary of the date the option was granted and the one-year anniversary of the exercise, the participant will recognize a capital gain or loss equal to the difference between the sale price of the shares and the exercise price, and we will not be entitled to any deduction for federal income tax purposes. However, if the participant disposes of such shares either on or before the two-year anniversary of the date of grant or on or before the one-year anniversary of the date of exercise (a “disqualifying disposition”), any gain up to the excess of the fair market value of the shares on the date of exercise over the exercise price generally will be taxed as ordinary income, unless the shares are disposed of in a transaction in which the participant would not recognize a loss (such as a gift). Any gain in excess of that amount will be a capital gain. If a loss is recognized, there will be no ordinary income, and such loss will be a capital loss. Any ordinary income recognized by the participant upon the disqualifying disposition of the shares generally should be deductible by the Company for federal income tax purposes, except to the extent such deduction is limited by applicable provisions of the Code. For purposes of the alternative minimum tax, the difference between the option exercise price and the fair market value of the shares on the exercise date is treated as an adjustment item in computing the participant’s alternative minimum taxable income in the year of exercise. In addition, special alternative minimum tax rules may apply to certain subsequent disqualifying dispositions of the shares or provide certain basis adjustments or tax credits for purposes.

Nonstatutory Stock Options. A participant generally recognizes no taxable income as the result of the grant of such an option. However, upon exercising the option, the participant normally recognizes ordinary income equal to the amount that the fair market value of the shares on such date exceeds the exercise price. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of the shares acquired by exercising a nonstatutory stock option, any gain or loss (based on the difference between the sale price and the fair market value on the exercise date) will be taxed as capital gain or loss. Any ordinary income recognized by the participant upon exercising a nonstatutory stock option generally should be deductible by the Company for federal income tax purposes, except to the extent such deduction is limited by applicable provisions of the Code. No tax deduction is available to the Company with respect to the grant of a nonstatutory stock option or the sale of the shares acquired through the exercise of the nonstatutory stock option.

Stock Appreciation Rights. In general, no taxable income is reportable when a stock appreciation right is granted to a participant. Upon exercise, the participant generally will recognize ordinary income equal to the fair market value of any shares received. Any additional gain or loss recognized upon any later disposition of the shares would be capital gain or loss.

Restricted Stock Awards. A participant acquiring shares of restricted stock generally will recognize ordinary income equal to the fair market value of the shares on the vesting date, reduced by any amount paid by the participant for such shares. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. The participant may elect, under Section 83(b) of the Code to

45

accelerate the ordinary income tax event to the date of acquisition by filing an election with the Internal Revenue Service no later than thirty days after the date the shares are acquired. Upon the sale of shares acquired under a restricted stock award, any gain or loss, based on the difference between the sale price and the fair market value on the date the ordinary income tax event occurs, will be taxed as capital gain or loss.

Restricted Stock Unit Awards. There are no immediate tax consequences of receiving an award of restricted stock units. A participant who is awarded restricted stock units generally will recognize ordinary income equal to the fair market value of shares issued to such participant at the end of the applicable vesting period or, if later, the settlement date elected by the administrator or a participant. Any additional gain or loss recognized upon any later disposition of any shares received would be capital gain or loss.

Performance Shares and Performance Unit Awards. A participant generally will recognize no income upon the grant of a performance share or a performance unit award. Upon the settlement of such awards, participants normally will recognize ordinary income in the year of receipt in an amount equal to the cash received and the fair market value of any cash or unrestricted shares received. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of any shares received, any gain or loss, based on the difference between the sale price and the fair market value on the date the ordinary income tax event occurs, will be taxed as capital gain or loss.

Section 409A. Section 409A of the Code provides certain requirements for non-qualified deferred compensation arrangements with respect to an individual’s deferral and distribution elections and permissible distribution events. Awards granted under the 2007 Plan with a deferral feature will be subject to the requirements of Section 409A. If an award is subject to and fails to satisfy the requirements of Section 409A of the Code, the recipient of that award may recognize ordinary income on the amounts deferred under the award, to the extent vested, which may be before the compensation is actually or constructively received. Also, if an award subject to Section 409A of the Code violates the provisions of Section 409A of the Code, Section 409A of the Code imposes an additional twenty percent (20%) federal income tax on compensation recognized as ordinary income, and interest on such deferred compensation.

Tax Effect for the Company. We generally will be entitled to a tax deduction in connection with an award under the 2007 Plan equal to the ordinary income realized by a participant when the participant recognizes such income (for example, the exercise of a nonstatutory stock option) except to the extent such deduction is limited by applicable provisions of the Code. Special rules limit the deductibility of compensation paid to our chief executive officer and other “covered employees” as determined under Section 162(m) of the Code and applicable guidance. Under Section 162(m) of the Code, the annual compensation paid to any of these specified executives will be deductible only to the extent that it does not exceed $1,000,000.

46

Equity-Based Compensation Plan Information

The table below discloses information as of December 31, 2023 with respect to our equity-based compensation plans that have been approved by stockholders and equity-based compensation plans that have not been approved by stockholders.

Plan Category	Number of Securities to be Issued upon Exercise of Outstanding Options or Vesting of Outstanding Restricted Stock Units (a)	Weighted- Average Exercise Price of Outstanding Options (b)	Number of Securities Remaining Available for Future Issuance under Equity-Based Compensation Plans (Excluding Securities Reflected in Column (a)) (c)
Equity-based compensation plans approved by security holders:
Stock option and award plans(1)	22,669,791	$7.71	8,605,026
Employee stock purchase plan(2)	—	—	327,555
Equity-based compensation plans not approved by security holders(3)	3,310,000	$1.25	136,666
Total	25,979,791	$6.89	9,069,247

(1)
Includes the Amended and Restated 2007 Equity Incentive Plan. See a description of this plan under Note 10 to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023.

(2)
Includes the 1997 Employee Stock Purchase Plan. See a description of this plan under Note 10 to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023.

(3)
Non-qualified options issued outside of the stockholder approved equity plans are governed in all respects by terms as if granted under the Amended and Restated 2007 Equity Incentive Plan. See description of the stock option plans under Note 10 to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023.

Vote Required and Board Recommendation

The proposal to amend our 2007 Plan requires the affirmative vote of a majority of the votes properly cast on the proposal, provided a quorum is established. Abstentions will have no effect on the outcome of this proposal. Under Delaware law, broker non-votes that occur with respect to this proposal, will have no effect on the outcome of this proposal.

The Board of Directors recommends a vote “FOR” the amendment to our 2007 Plan to increase the number

of shares of common stock authorized for issuance thereunder from 39,190,000 to 46,690,000.

47

PROPOSAL 6 — AMENDMENT OF ESPP

General

At the Annual Meeting, stockholders will vote to approve an amendment to our ESPP to increase the number of shares of common stock authorized for issuance thereunder from 2,225,000 to 3,425,000.

The ESPP permits the Company’s employees to purchase our common stock at a discounted price. This plan is designed to encourage and assist employees of the Company to acquire an equity interest in the Company through the purchase of shares of our common stock. Subject to stockholder approval, our Compensation Committee has approved the amendment to the ESPP to increase the shares of common stock available for issuance thereunder by 1,200,000.

Reasons for Seeking Share Increase

The Board believes that equity-based compensation is a critical part of the Company’s compensation program. Our Compensation Committee acts as administrator for our ESPP pursuant to authority delegated by the Board. Stockholder approval of the amendment to the ESPP would allow us to continue to offer shares under the ESPP as a means of allowing employees to invest a portion of their cash compensation in our common stock, which fosters ownership and encourages employees to focus on long-term growth in value. In 2021, 2022, and 2023 the Company issued a total of 175,228, 406,421, and 717,046 shares of common stock under the ESPP, respectively. As of March 31, 2024, 1,864,366 shares of common stock have been issued under the ESPP and 327,555 shares of common remained available for future issuance; if this proposal is approved, the ESPP would have 1,527,555 shares available for future issuance.

The proposed additional 1,200,000 shares of common stock available for future issuance under the ESPP represents potential dilution of 0.8% as of December 31, 2023 (potential dilution for this purpose is determined by dividing the 1,200,000 additional shares by the total number of shares of the Company’s common stock outstanding as of December 31, 2023). The dilution attributable to the ESPP for 2023 was 0.5% (which was determined by dividing the number of shares issued under the ESPP during 2023 by the total number of shares of the Company’s common stock outstanding as of December 31, 2023). The Compensation Committee believes that this is a reasonable amount of potential dilution and appropriate for our industry and the practices of our peer companies.

The Company believes the proposed additional shares of common stock would be sufficient to cover purchases under the ESPP for approximately two years. If stockholders do not approve this proposal, the Company will have 327,555 shares available for issuance under the ESPP. Given the current employee participation rates in the ESPP, this could limit the Company’s ability to offer this type of equity-based compensation plan to its employees in the future.

Summary of the ESPP

General. The following is a summary of the principal features of the ESPP, as amended, together with the applicable tax implications with respect to the ESPP. The summary is qualified by reference to the full text of the ESPP, as amended, which is attached as Appendix B to this Proxy Statement.

Eligibility. All employees, including executive officers, customarily employed more than twenty hours per week and more than five months per year by the Company or any designated subsidiary are eligible to participate in the ESPP as of the first semi-annual enrollment date following commencement of employment, unless the employee directly or indirectly (including through ownership of options) owns five percent (5%) or more of the combined voting power of the Company. As of the March 31, 2024, the Company had 120 employees eligible to participate in the ESPP, compared to 126 eligible employees as of December 31, 2023. Participation in the ESPP terminates immediately when a participant ceases to be employed for any reason or otherwise becomes ineligible to participate. Participants may elect to make contributions to the ESPP up to a maximum of ten percent (10%) of earnings. On the last trading date of April and October, the Company applies the funds then in each participant’s account to the purchase of shares common stock. The cost of each share of common stock purchased is eighty-five percent (85%) of the lower of the closing prices for common stock on: (i) the first trading day in the enrollment period in which the purchase is made; and (ii) the purchase date. The length of the offering period set by the ESPP may not exceed a maximum of twenty-four months, and is

48

presently set at six months by our Board. Enrollment dates are the first business day of May and November. The Board may limit the maximum number of shares that may be purchased by a participant during any enrollment period and may limit the length of the enrollment periods. No participant’s right to acquire shares may accrue at a rate exceeding $25,000 of the fair market value of our common stock in any calendar year. Shares of common stock available under the ESPP may be either outstanding shares repurchased by the Company or newly issued shares. As of the Record Date, the closing price of our common stock was $2.45 per share.

Administration. Our Compensation Committee acts as administrator of the ESPP and may amend or terminate the ESPP at any time and may provide for an adjustment in the purchase price and the number and kind of securities available under the plan in the event of a reorganization, recapitalization, stock split, or other certain similar events. However, amendments that would increase the number of shares reserved for purchase, would otherwise require stockholder approval in order to comply with Section 423 of the Code, other applicable laws, regulations or rules or with respect to which the Compensation Committee otherwise concludes that stockholder approval is advisable, require stockholder approval.

Awards under the ESPP. The following table shows the number of shares of common stock purchased by the named individuals and groups under the ESPP since its inception. Our non-employee directors are not eligible to participate in the ESPP.

Name and Position	Number of Shares
Craig Collard, Chief Executive Officer	—
William Forbes, Chief Development Officer	—
Ira Duarte, Chief Financial Officer	—
Barry Quart, Pharm.D, Former Chief Executive Officer	15,602
David Szekeres, Former Executive Vice President, Chief Operating Officer	11,063
All current executive officers as a group	26,665
Each associate of any directors, executive officers or nominees	—
Each other person who received or is to receive 5% of such options, warrants or rights	—
All current employees, including all current officers who are not executive officers, as a group	838,435

New Plan Benefits. Because purchase rights are subject to discretion, including an employee’s decision not to participate in the ESPP, awards under the ESPP for the current and future fiscal years are not determinable. No purchase rights have been granted with respect to the additional 1,200,000 shares for which approval is requested.

SEC Registration. We intend to file with the SEC a registration statement on Form S-8 covering the new shares reserved for issuance under the ESPP in the second half of 2024.

Federal Income Tax Consequences. The following is a general, brief summary of the principal federal income tax consequences of certain awards and transactions under the ESPP. The following summary is based upon an interpretation of present federal tax laws and regulations and may be inapplicable if such laws and regulations are changed. This summary is not intended to be exhaustive or constitute tax advice and does not describe state, local or foreign tax consequences, nor does it describe the consequences to any particular participant.

It is the intention of the Company that the ESPP will qualify as an employee stock purchase plan under Section 423 of the Code. The provisions of the ESPP, accordingly, will be construed so as to extend and limit participation in a manner consistent with the requirements of that Section of the Code. The Company believes that the following federal income tax consequences normally will apply with respect to the ESPP.

The payroll deductions withheld from a participant’s pay under the ESPP will be taxable income to the participant and must be included in the participant’s gross income for federal income tax purposes in the year which such amounts otherwise would have been received.

A participant will not be required to recognize any income for federal income tax purposes either at the time the participant is granted an option (which will be on the first day of the offering period) or by virtue of the exercise of the option (which will take place on the last day of such offering period). The federal income tax consequences of a sale or disposition of shares acquired under the ESPP depend in part on the length of time the shares are held by a participant before such sale or disposition. If a participant sells or otherwise disposes of

49

shares acquired under the ESPP (other than any transfer resulting from death) within two years after the first day of the applicable offering period or one year after the shares are acquired (the “Holding Period”), the participant must recognize ordinary compensation income in the year of such disposition in an amount equal to the excess of (i) the fair market value of the shares on the date such shares were acquired over (ii) the price paid for the shares by the participant. If the first day of the applicable offering period is the same date as the date that the shares are acquired, the Holding Period will be two years after such date. The amount of “ordinary” compensation income recognized by the participant will be added to the participant’s basis in such shares for purposes of determining any additional gain or loss realized by the participant on the sale of the shares. Any such additional gain or loss will be taxed as capital gain or loss, long or short, depending on how long the participant held the shares.

If a participant sells shares acquired under the ESPP after the Holding Period or if the participant dies, the participant or the participant’s estate must include as ordinary compensation income in the year of sale (or the taxable year ending upon death) an amount equal to the lesser of (1) the excess of the fair market value of the shares on the first day of the offering period over the option price (determined as if the option had been exercised on the first day of the offering period), or (2) the excess of the fair market value of the shares at the time of sale of the shares or on the date of death over the price paid for the shares by the participant. Except in the case of a transfer as a result of death, the amount of ordinary income recognized by the participant will be added to the participant’s basis in such shares. Any gain realized upon the sale in excess of such basis will be taxed as a long-term capital gain. Any loss realized will be treated as long-term capital loss.

Tax Effect for the Company. The Company will not receive any income tax deduction as a result of issuing shares pursuant to the ESPP, except to the extent that a participant is required to include as ordinary income amounts arising upon the sale or disposition of such shares as discussed above.

Equity-Based Compensation Plan Information

The table below discloses information as of December 31, 2023 with respect to our equity-based compensation plans that have been approved by stockholders and equity-based compensation plans that have not been approved by stockholders.

Plan Category	Number of Securities to be Issued upon Exercise of Outstanding Options or Vesting of Outstanding Restricted Stock Units (a)	Weighted- Average Exercise Price of Outstanding Options (b)	Number of Securities Remaining Available for Future Issuance under Equity-Based Compensation Plans (Excluding Securities Reflected in Column (a)) (c)
Equity-based compensation plans approved by security holders:
Stock option and award plans(1)	22,669,791	$ 7.71	8,605,026
Employee stock purchase plan(2)	—	—	327,555
Equity-based compensation plans not approved by security holders(3)	3,310,000	$ 1.25	136,666
Total	25,979,791	$ 6.89	9,069,247

(1)
Includes the Amended and Restated 2007 Equity Incentive Plan. See a description of this plan under Note 10 to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023.

(2)
Includes the 1997 Employee Stock Purchase Plan. See a description of this plan under Note 10 to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023.

(3)
Non-qualified options issued outside of the stockholder approved equity plans are governed in all respects by terms as if granted under the Amended and Restated 2007 Equity Incentive Plan. See description of the stock option plans under Note 10 to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023.

50

Vote Required and Board Recommendation

The proposal to amend our ESPP requires the affirmative vote of a majority of the votes properly cast on the proposal, provided a quorum is established. Abstentions will have no effect on the outcome of this proposal. Under Delaware law, broker non-votes that occur with respect to this proposal will have no effect on the outcome of this proposal.

The Board of Directors recommends a vote “FOR” the amendment to our ESPP to increase the number of

shares of common stock authorized for issuance thereunder from 2,225,000 to 3,425,000.

51

OTHER MATTERS

As of the date of this Proxy Statement, the Board knows of no matter that will be presented for action by our stockholders at the Annual Meeting other than those discussed in this Proxy Statement. If any other business should properly come before the Annual Meeting, or any adjournment thereof, the proxy holders will vote any shares represented by proxy on such matters according to their best judgment and in their discretion.

DELINQUENT SECTION 16(a) REPORTS

Section 16(a) of the Securities Exchange Act requires the Company’s directors and certain of its executive officers and persons who beneficially own more than ten percent (10%) of the Company’s common shares to file reports of and changes in ownership with the SEC. Based solely on the Company’s review of copies of SEC filings it has received or filed, the Company believes that each of its directors, executive officers, and beneficial owners of more than ten percent (10%) of the shares satisfied the Section 16(a) filing requirements during the year ended December 31, 2023, except for late Forms 4 filed on (i) November 21, 2023 by William Forbes, (ii) October 17, 2023 by Lisa Peraza, and (iii) July 25, 2023 by Adam Morgan.

Annual Report on Form 10-K

Our Annual Report on Form 10-K for the year ended December 31, 2023 is being distributed along with this Proxy Statement. This Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2023 are available to you at no charge electronically at http://www.proxyvote.com. Additional copies of the Annual Report on Form 10-K for the year ended December 31, 2023 are available at no charge on written request. To obtain additional copies of the Annual Report on Form 10-K for the year ended December 31, 2023, please contact us 4242 Campus Point Court, Suite 200, San Diego, CA 92121, Attention: Corporate Secretary.

52

APPENDIX A

CERTIFICATE OF AMENDMENT

 

OF CERTIFICATE OF INCORPORATION OF

 

HERON THERAPEUTICS, INC.

Heron Therapeutics, Inc. (the “Corporation”), a corporation duly organized and existing under the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify:

FIRST: That, upon the Effective Time, Section A of Article IV of the Certificate of Incorporation of the Corporation, as amended (the “Certificate of Incorporation”), shall be amended and restated in its entirety as follows:

“A. Authorized Capital. The Corporation is authorized to issue two classes of shares of stock to be designated, respectively, “preferred” and “common.” The total number of shares that the Corporation is authorized to issue is Four Hundred Two Million Five Hundred Thousand (402,500,000). The number of shares of common stock authorized to be issued is Four Hundred Million (400,000,000), each such share to have a par value of $0.01 (“Common Stock”), and the number of preferred shares authorized to be issued is Two Million Five Hundred Thousand (2,500,000), each such share to have a par value of $0.01 (“Preferred Stock”).”

SECOND: The amendment to the Certificate of Incorporation herein was duly adopted by the Corporation’s Board of Directors in accordance with the applicable provisions of Section 242 of the DGCL. An annual meeting of the stockholders of the Corporation was duly called upon notice in accordance with Section 222 of the DGCL and held on June 13, 2024, at which meeting the necessary number of shares were voted in favor of the proposed amendment. The stockholders of the Corporation duly adopted this Certificate of Amendment in accordance with the applicable provisions of Section 242 of the DGCL.

THIRD: The amendment to the Certificate of Incorporation herein shall be effective June 14, 2024 at 12:01 a.m., Eastern Time (the “Effective Time”).

IN WITNESS WHEREOF, said Corporation has caused this Certificate of Amendment to be executed by its duly authorized officer on this 13th day of June, 2024.

HERON THERAPEUTICS, INC.
By:
Name:	Craig Collard
Title:	Chief Executive Officer

A-1

APPENDIX B

[Proposed additions are indicated in green text and by double underlining, and proposed deletions are indicated in red and struck through text.]

HERON THERAPEUTICS, INC.

AMENDED AND RESTATED 2007 EQUITY INCENTIVE PLAN

1. Purposes of the Plan.

The purpose of this Plan is to encourage ownership in Heron Therapeutics, Inc., a Delaware corporation (the “Company”), by key personnel whose long-term employment or other service relationship with the Company is considered essential to the Company’s continued progress and, thereby, encourage recipients to act in the stockholders’ interest and share in the Company’s success.

2. Definitions.

As used herein, the following definitions shall apply:

(a) “Administrator” means the Board, any Committees or such delegates as shall be administering the Plan in accordance with Section 4 of the Plan.

(b) “Affiliate” means any entity that is directly or indirectly controlled by the Company or any entity in which the Company has a significant ownership interest as determined by the Administrator.

(c) “Applicable Laws” means the requirements relating to the administration of stock option and stock award plans under U.S. federal and state laws, any stock exchange or quotation system on which the Company has listed or submitted for quotation the Common Stock to the extent provided under the terms of the Company’s agreement with such exchange or quotation system and, with respect to Awards subject to the laws of any foreign jurisdiction where Awards are, or will be, granted under the Plan, the laws of such jurisdiction.

(d) “Award” means a Stock Award or Option granted in accordance with the terms of the Plan.

(e) “Awardee” means an Employee, Consultant or Director of the Company or any Affiliate who has been granted an Award under the Plan.

(f) “Award Agreement” means a Stock Award Agreement and/or Option Agreement, which may be in written or electronic format, in such form and with such terms and conditions as may be specified by the Administrator, evidencing the terms and conditions of an individual Award. Each Award Agreement is subject to the terms and conditions of the Plan.

(g) “Board” means the Board of Directors of the Company.

(h) “Cause” means, unless such term or an equivalent term is otherwise defined with respect to an Award by the Participant’s Award Agreement, any of the following: (i) the Participant’s theft, dishonesty, willful misconduct, breach of fiduciary duty for personal profit, or falsification of any Company or Affiliate documents or records; (ii) the Participant’s material failure to abide by a Company’s or Affiliate’s code of conduct or other policies (including without limitation, policies relating to confidentiality and reasonable workplace conduct); (iii) the Participant’s unauthorized use, misappropriation, destruction or diversion of any tangible or intangible asset or corporate opportunity of the Company or an Affiliate (including, without limitation, the Participant’s improper use or disclosure of confidential or proprietary information); (iv) any intentional act by the Participant which has a material detrimental effect on the Company or an Affiliate’s reputation or business; (v) the Participant’s repeated failure or inability to perform any reasonable assigned duties after written notice from the Company or an Affiliate (including, without limitation, habitual absence from work for reasons other than illness), and a reasonable opportunity to cure, such failure or inability; (vi) any material breach by the Participant of any employment or service agreement between the Participant and the Company or an Affiliate, which breach is not cured pursuant to the terms of such agreement; or (vii) the Participant’s conviction (including any plea of guilty or nolo contendere) of any criminal act involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs the Participant’s ability to perform his or her duties with the Company or an Affiliate.

B-1

(i) “Change in Control” means, unless such term or an equivalent term is otherwise defined with respect to an Award by the Participant’s Award Agreement, the occurrence of any of the following:

i. an Ownership Change Event or a series of related Ownership Change Events (collectively, a “Transaction”) in which the stockholders of the Company immediately before the Transaction do not retain immediately after the Transaction, in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately before the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting securities of the Company or such surviving entity immediately outstanding after the Transaction, or, in the case of an Ownership Change Event described in Section 2(bb)(iii), the entity to which the assets of the Company were transferred (the “Transferee” ), as the case may be; or

ii. the liquidation or dissolution of the Company.

For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the case may be, either directly or through one or more subsidiary corporations or other business entities. The Board shall have the right to determine whether multiple sales or exchanges of the voting securities in the Company or multiple Ownership Change Events are related, and its determination shall be final, binding and conclusive. The Board may also, but need not, specify that other transactions or events constitute a Change in Control.

(j) “Code” means the United States Internal Revenue Code of 1986, as amended.

(k) “Committee” means the compensation committee of the Board or a committee of Directors appointed by the Board in accordance with Section 4 of the Plan.

(l) “Common Stock” means the common stock of the Company.

(m) “Company” means Heron Therapeutics, Inc., a Delaware corporation, or its successor.

(n) “Consultant” means any person (including an advisor or an employee of an entity) that is engaged by the Company or any Parent, Subsidiary or Affiliate, to render services and is compensated for such services.

(o) “Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, shall not terminate a Participant’s Continuous Service; provided, however , if the Company for which a Participant is rendering services ceases to qualify as an “Affiliate,” as determined by the Board in its sole discretion, such Participant’s Continuous Service shall be considered to have terminated on the date such Company ceases to qualify as an Affiliate. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of: (i) any leave of absence approved by the Board or the chief executive officer of the Company, including sick leave, military leave or any other personal leave; or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting in a Stock Award only to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law.

(p) “Conversion Award” has the meaning set forth in Section 4(b)(xii) of the Plan.

(q) “Director” means a member of the Board.

(r) “Effective Date” means the date of approval of the Plan by the stockholders of the Company in the manner and to the extent required by Applicable Laws.

(s) “Employee” means a regular, active employee of the Company or any Affiliate, including an Officer and/or Inside Director. Within the limitations of Applicable Law, the Administrator shall have the discretion to determine the effect upon an Award and upon an individual’s status as an Employee in the case of (i) any individual who is classified by the Company or its Affiliate as leased from or otherwise employed by a

B-2

third party or as intermittent or temporary, even if any such classification is changed retroactively as a result of an audit, litigation or otherwise, (ii) any leave of absence approved by the Company or an Affiliate, (iii) any transfer between locations of employment with the Company or an Affiliate or between the Company and any Affiliate or between any Affiliates, (iv) any change in the Awardee’s status from an Employee to a Consultant or Director, and (v) at the request of the Company or an Affiliate an Employee becomes employed by any partnership, joint venture or corporation not meeting the requirements of an Affiliate in which the Company or an Affiliate is a party.

(t) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(u) “Fair Market Value” means, as of any date, the value of a share of Common Stock or other property as determined by the Administrator, in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the Company herein, subject to the following:

i. If, on such date, the Common Stock is listed on a national or regional securities exchange or market system, including without limitation the Nasdaq Stock Market, the Fair Market Value of a share of Common Stock shall be the closing price on such date of a share of Common Stock (or the mean of the closing bid and asked prices of a share of Common Stock if the stock is so quoted instead) as quoted on such exchange or market system constituting the primary market for the Common Stock, as reported in The Wall Street Journal or such other source as the Administrator deems reliable. If the relevant date does not fall on a day on which the Common Stock has traded on such securities exchange or market system, the date on which the Fair Market Value shall be established shall be the last day on which the Common Stock was so traded prior to the relevant date, or such other appropriate day as shall be determined by the Administrator, in its discretion.

ii. If, on such date, the Common Stock is not listed on a national or regional securities exchange or market system, the Fair Market Value of a share of Common Stock shall be as determined by the Administrator in good faith using a reasonable application of a reasonable valuation method without regard to any restriction other than a restriction which, by its terms, will never lapse.

(v) “Grant Date” means, for all purposes, the date on which the Administrator approves the determination of grant of an Award, or such other date as is determined by the Administrator, provided that in the case of any Incentive Stock Option, the grant date shall be the later of the date on which the Administrator makes the determination granting such Incentive Stock Option or the date of commencement of the Awardee’s employment relationship with the Company.

(w) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

(x) “Inside Director” means a Director who is an Employee.

(y) “Nasdaq” means the Nasdaq Stock Market or its successor.

(z) “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option.

(aa) “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

(bb) “Option” means a right granted under Section 8 to purchase a number of Shares at such exercise price, at such times, and on such other terms and conditions as are specified in the agreement or other documents evidencing the Option (the “Option Agreement”). Both Options intended to qualify as Incentive Stock Options and Nonstatutory Stock Options may be granted under the Plan.

(cc) “Outside Director” means a Director who is not an Employee.

(dd) “Ownership Change Event” means the occurrence of any of the following with respect to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of more than fifty percent (50%) of the voting stock of the Company; (ii) a merger or consolidation in which the Company is a party; or (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company.

B-3

(ee) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code, or any successor provision.

(ff) “Participant” means the Awardee or any person (including any estate) to whom an Award has been assigned or transferred as permitted hereunder.

(gg) “Performance Criteria” shall have the meaning set forth in Section 13(b) of the Plan.

(hh) “Plan” means this Heron Therapeutics, Inc. 2007 Equity Incentive Plan.

(ii) “Restricted Stock Unit” means a bookkeeping entry representing an amount equivalent to the Fair Market Value of one Share (or a fraction or multiple of such value), payable in cash, property or Shares. Restricted Stock Units represent an unfunded and unsecured obligation of the Company, except as otherwise provided for by the Administrator.

(jj) “Share” means a share of the Common Stock, as adjusted in accordance with Section 14 of the Plan.

(kk) “Stock Appreciation Right” means a right to receive cash and/or shares of Common Stock based on a change in the Fair Market Value of a specific number of shares of Common Stock between the grant date and the exercise date granted under Section 12.

(ll) “Stock Award” means an award or issuance of Shares, Restricted Stock Units, Stock Appreciation Rights or other similar awards made under Section 12 of the Plan, the grant, issuance, retention, vesting, settlement, and/or transferability of which is subject during specified periods of time to such conditions (including continued employment or performance conditions) and terms as are expressed in the agreement or other documents evidencing the Award (the “Stock Award Agreement”).

(mm) “Subsidiary” means any company (other than the Company) in an unbroken chain of companies beginning with the Company, provided each company in the unbroken chain (other than the Company) owns, at the time of determination, stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other companies in such chain.

(nn) “Termination of Continuous Service” shall mean ceasing to be in Continuous Service as an Employee, Consultant or Director, as determined in the sole discretion of the Administrator. However, for Incentive Stock Option purposes, Termination of Continuous Service will occur when the Awardee ceases to be an employee (as determined in accordance with Section 3401(c) of the Code and the regulations promulgated thereunder) of the Company or one of its Subsidiaries. The Administrator shall determine whether any corporate transaction, such as a sale or spin-off of a division or business unit, or a joint venture, shall be deemed to result in a Termination of Continuous Service.