Exagen (XGN) DEF 14ADefinitive proxy

This proxy statement is furnished in connection with the solicitation by the Board of Directors of Exagen Inc. (the "Board") of proxies to be voted at our Annual Meeting of Stockholders to be held on Monday, June 10, 2024 (the "Annual Meeting"), in the Exagen Administrative Offices, Training Room, 2175 Salk Avenue, 3rd Floor, Carlsbad, California 92008 at 6:00 a.m. Pacific Time and at any continuation, postponement or adjournment thereof. We may decide to hold the meeting in a different location or as a virtual-only meeting. If we hold a virtual-only meeting, we will announce the decision to do so in advance, and details on how to participate will be set forth in a press release issued by us and available on our website (www.exagen.com) and on our proxy website (www.proxydocs.com/XGN). Holders of record of shares of common stock, $0.001 par value per share ("Common Stock"), as of the close of business on April 15, 2024 (the "Record Date"), will be entitled to notice of and to vote at the Annual Meeting and any continuation, postponement or adjournment thereof. As of the Record Date, there were 17,356,580 shares of our Common Stock outstanding and entitled to vote at the Annual Meeting. Each share of Common Stock is entitled to one vote on any matter presented to stockholders at the Annual Meeting.

This proxy statement and the Company's Annual Report to Stockholders for the fiscal year ended December 31, 2023 (the "2023 Annual Report"), or Notice of Internet Availability of Proxy Materials, as applicable, will be sent on or about April 30, 2024 to our stockholders on the Record Date.

In this proxy statement, "Exagen," the "Company," "we," "us" and "our" refer to Exagen Inc.

http://www.proxydocs.com/XGN/.

At this website, you will find a complete set of the following proxy materials: notice of 2024 Annual Meeting of Stockholders; proxy statement (with sample proxy card); and 2023 Annual Report. You are encouraged to access and review all of the important information contained in the proxy materials before submitting a proxy or voting at the meeting.

Stockholders may review directions to attend the meeting in person on our proxy website (www.proxydocs.com/XGN).

At the Annual Meeting, there are two proposals scheduled for a vote:

We currently know of no other business that will be presented at the Annual Meeting. If any other matter properly comes before the stockholders for a vote at the Annual Meeting, however, the proxy holders named on the proxy card will vote your shares in accordance with their best judgment.

The Board recommends that you vote your shares as indicated below. If you return a properly completed proxy card or vote your shares by telephone or Internet, your shares of Common Stock will be voted on your behalf as you direct. If not otherwise specified, the shares of Common Stock represented by the proxies will be voted, and the Board recommends that you vote, as follows:

If any other matter properly comes before the stockholders for a vote at the Annual Meeting, the proxy holders named on the proxy card will vote your shares in accordance with their best judgment.

Stockholders sharing an address that are receiving multiple copies of the Internet Notice can request delivery of a single copy of the proxy statement or 2023 Annual Report or Internet Notice by contacting their broker, bank or other intermediary or sending a written request to Exagen Inc. at the above address or by calling (760) 560-1501.

The Record Date for the Annual Meeting is April 15, 2024. You are entitled to vote on the matters presented at the Annual Meeting if you were a record holder at the close of business on the Record Date. Each outstanding share of Common Stock is entitled to one vote. At the close of business on the Record Date, there were 17,356,580 shares of Common Stock outstanding and entitled to vote at the Annual Meeting. Common Stock is our only class of stock entitled to vote.

If, on the Record Date, your shares were registered directly in your name then you are a stockholder of record.

If, on the Record Date, your shares were held in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in "street name" and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting.

Yes. If your shares are held by a brokerage firm, bank, dealer or other similar organization, you are considered the “beneficial owner” of those shares held in “street name.” If your shares are held in street name, these proxy materials, along with instructions on how to vote your shares, are being provided to you by your brokerage firm, bank, dealer or other similar organization. As the beneficial owner, you have the right to direct your brokerage firm, bank, dealer or other similar organization how to vote your shares, and such organizations are required to vote your shares in accordance with your instructions. If your shares are held in street name, you may not vote your shares in person at the Annual Meeting, unless you obtain, and present at the Annual Meeting, a legal proxy from your brokerage firm, bank, dealer or other similar organization.

A quorum must be present at the Annual Meeting for any business to be conducted. Under Delaware law and our Amended and Restated Bylaws, as amended (the "Bylaws"), the presence at the Annual Meeting of the holders of a majority in voting power of the Common Stock issued and outstanding and entitled to vote, present in person, or by remote communication, if applicable, or represented by proxy, on the Record Date will constitute a quorum for the transaction of business at the Annual Meeting. The inspector of election will determine whether a quorum is present and will tabulate the votes cast at the Annual Meeting.

You may attend the Annual Meeting only if you are a record holder or beneficial owner of our capital stock as of the Record Date. If you are a record holder you are entitled to vote at the Annual Meeting. If you hold your shares in street name you must obtain a valid proxy from your brokerage firm, bank, dealer or other similar organization to vote at the Annual Meeting. We currently intend to hold the Annual Meeting in person. However, we may decide to hold the meeting in a different location or as a virtual-only meeting. If we hold a virtual-only meeting, we will announce the decision to do so in advance, and details on how to participate will be set forth in a press release issued by us and available on our website (www.exagen.com) and on our proxy website (www.proxydocs.com/XGN). We encourage you to check this website prior to the meeting if you plan to attend.

In order to be admitted into the Annual Meeting, your name must appear on the attendance list and you must present government-issued photo identification (such as a driver’s license or passport). If your bank or broker holds your shares in street name, to attend the Annual Meeting you will also be required to present proof of beneficial ownership of our Common Stock on the Record Date, such as the Internet Notice you received from your bank or broker or a bank or brokerage statement or a letter from your bank or broker showing that you owned shares of our Common Stock at the close of business on the Record Date.

It means that your shares are held in more than one account at the transfer agent and/or with banks or brokers. Please vote all of your shares. To ensure that all of your shares are voted, for each Internet Notice or set of proxy materials, please submit your proxy by phone, via the Internet or, if you received printed copies of the proxy materials, by signing, dating and returning the enclosed proxy card in the enclosed envelope.

With respect to the election of directors, you may either vote "For" any one or more of the nominees to the Board or you may "Withhold" your vote for any one or more of the nominees. With respect to the ratification of the appointment of BDO USA, P.C. as our independent registered public accounting firm, you may vote "For," "Against" or "Abstain" from voting.

We recommend that stockholders vote by proxy even if they plan to attend the Annual Meeting and vote in person.

If you are a record holder, there are several ways for you to vote your shares:

If you are a beneficial owner of shares that are held in street name through a brokerage firm, bank, dealer or other similar organization, you will receive instructions on how to vote from that organization rather than from us. You must follow their instructions in order for your shares to be voted. Generally, you will have three options for returning your proxy and voting your shares.

Yes. If you are a record holder, you may revoke your proxy and change your vote any time before the proxy is voted at the Annual Meeting:

We may decide to hold the meeting in a different location or as a virtual-only meeting. If we hold a virtual-only meeting, we will announce the decision to do so in advance, and details on how to participate will be set forth in a press release issued by us and available on our website (www.exagen.com) and on our proxy website (www.proxydocs.com/XGN).

Your most recent proxy card or telephone or Internet proxy is the one that is counted. Your attendance at the Annual Meeting by itself will not revoke your proxy.

If your shares are held in street name, you may change or revoke your voting instructions by following the specific directions provided to you by your bank or broker, or you may vote in person at the Annual Meeting by obtaining a legal proxy from your bank or broker and submitting the legal proxy along with your ballot at the Annual Meeting.

Mediant Communications, Inc. is expected to tabulate the votes and an employee of the Company is expected to be our inspector of election and will certify the votes.

If you are a record holder and you indicate when voting on the Internet or by telephone that you wish to vote as recommended by the Board, then your shares will be voted at the Annual Meeting in accordance with the Board’s recommendation on all matters presented for a vote at the Annual Meeting. Similarly, if you are a record holder and submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote in accordance with the recommendations of the Board. The Board’s recommendations are indicated on page 2 of this proxy statement, along with the description of each proposal in this proxy statement.

If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, then, the organization that holds your shares may generally vote your shares in their discretion on “routine” matters but cannot vote on “non-routine” matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, that organization will inform the inspector of election that it does not have the authority to vote on that matter with respect to your shares. This is generally referred to as a “broker non-vote.”

Shares represented by proxies that reflect a broker non-vote will be counted as present for purposes of determining the presence of a quorum. As discussed above, broker non-votes occur when shares held by a broker in “street name” for a beneficial owner are not voted with respect to a particular proposal because (1) the broker has not received voting instructions from the beneficial owner and (2) the broker lacks discretionary voting power to vote those shares on a particular matter. A broker has discretionary power to vote shares without instruction from the beneficial owner on routine matters, such as the ratification of the appointment of BDO USA, P.C. as our independent registered public accounting firm. Thus, broker non-votes are not expected on that proposal. However, if a broker does not exercise this authority, such broker non-votes are not considered to be votes cast and will have

no effect on that proposal. Absent instructions from the beneficial owner of such shares, a broker is not entitled to vote shares held for a beneficial owner on non-routine matters. Broker non-votes on the election of directors, a non-routine matter, will have no effect because they are not considered a vote cast, and the three directors that receive the highest number of votes will be elected.

Shares of Common Stock held by persons attending the Annual Meeting but not voting, and shares represented by proxies that reflect withheld votes or abstentions as to a particular proposal, will be counted as present for purposes of determining the presence of a quorum. A vote "withheld,” in the case of the proposal regarding the election of directors, or an “abstention,” in the case of the ratification of the appointment of BDO USA, P.C., represents a stockholder's affirmative choice to decline to vote on a proposal. Votes withheld have no effect on the election of directors, as the three directors that receive the highest number of votes will be elected, and abstentions are not considered to be votes cast and will have no effect on the ratification of the appointment of BDO USA, P.C.

We currently know of no other business that will be presented at the Annual Meeting. If any other matter properly comes before the stockholders for a vote at the Annual Meeting, however, the proxy holders named on the Company’s proxy card will vote your shares in accordance with their best judgment.

We plan to announce preliminary voting results at the Annual Meeting and we will report the final results in a Current Report on Form 8-K, which we intend to file with the SEC within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Form 8-K within four business days after the Annual Meeting, we intend to file a Form 8-K to publish the preliminary results and, within four business days after the final results are known to us, file an additional Form 8-K to publish the final results.

At the Annual Meeting, three (3) Class II directors are to be elected to hold office for three-year terms expiring at the Annual Meeting of Stockholders to be held in 2027 and until each such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal. Based on the recommendation of the Nominating and Corporate Governance Committee of the Board (the "Nominating Committee"), the Board has nominated Ana Hooker, Paul Kim and Frank Stokes for re-election as Class II directors at the Annual Meeting.

The division of our Board into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control of our Company. Our directors may be removed only for cause and only by the affirmative vote of the holders of at least two-thirds of the voting power of the then-outstanding shares of capital stock entitled to vote in the election of directors.

In the event any of the nominees should become unable to serve, or will not serve, as a director, it is intended that votes will be cast for a substitute nominee designated by the Board or the Board may elect to reduce its size. The Board has no reason to believe that the nominees named below will be unable to serve if elected. Each of the nominees has consented to being named in this proxy statement and to serve if elected.

Each of our directors and director nominees brings to the Board significant leadership experience derived from their professional experience and service as executives or board members of other companies. The process undertaken by the Nominating and Corporate Governance Committee in recommending qualified director candidates is described below under "Board Diversity and Director Nomination Process." Certain individual qualifications and

skills of our directors that contribute to the board of directors' effectiveness as a whole are described in the following paragraphs.

The information set forth below as to the directors and nominees for director has been furnished to us by the directors and nominees for director:

applied markets. Dr. Kahn has a Ph.D. in Theoretical Organic Chemistry from the University of California, Irvine and was a Fellow Commoner of Churchill College at the University of Cambridge in England.

The Audit Committee of the Board (the "Audit Committee") has appointed BDO USA, P.C. as our independent registered public accounting firm for the fiscal year ending December 31, 2024. The Board has directed that this appointment be submitted to our stockholders for ratification. Although ratification of our appointment of BDO USA, P.C. is not required, we value the opinions of our stockholders and believe that stockholder ratification of our appointment is a good corporate governance practice.

BDO USA, P.C. has served as our independent registered public accounting firm since 2017. Neither the accounting firm nor any of its members has any direct or indirect financial interest in or any connection with us in any capacity other than as our auditors, providing audit and non-audit services. A representative of BDO USA, P.C. is expected to attend the Annual Meeting and to have an opportunity to make a statement if they intend to do so. This representative will also be available to respond to appropriate questions from stockholders.

In the event that the appointment of BDO USA, P.C. is not ratified by the stockholders, the Audit Committee will consider this fact when it appoints the independent registered public accounting firm for the fiscal year ending December 31, 2024. Even if the appointment of BDO USA, P.C. is ratified, the Audit Committee retains the discretion to appoint a different independent registered public accounting firm at any time if it determines that such a change is in the interests of the Company.

The Audit Committee has considered whether the provision of non-audit services is compatible with maintaining the independence of BDO USA, P.C., and has concluded that the provision of such services is compatible with maintaining the independence of our auditors.

The Audit Committee has established a policy that prior to engagement of an independent registered public accounting firm for the next year's audit, management will submit an aggregate of services expected to be rendered during that year for each of four categories of services to the Audit Committee for approval.

The Audit Committee pre-approves the engagement of the independent registered public accounting firm and the provision of audit services and audit-related services on an annual basis. The Audit Committee also pre-approves the particular tax and all other services on a case-by-case basis and does not delegate approval to management. All of the services of BDO USA, P.C., for fiscal years ended December 31, 2023 and 2022 described above were pre-approved by the Audit Committee in accordance with this policy.

The Audit Committee considers whether the provision of each non-audit service is compatible with maintaining the independence of our auditors. Pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. Our independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date.

The Audit Committee has reviewed the Company’s audited financial statements for the fiscal year ended December 31, 2023 and has discussed these financial statements with management and the Company’s independent registered public accounting firm. The Audit Committee has also received from, and discussed with, the Company’s independent registered public accounting firm various communications that such independent registered public accounting firm is required to provide to the Audit Committee, including the matters required to be discussed by statement on Auditing Standards No. 1301 (Communications with Audit Committees), as adopted by the Public Company Accounting Oversight Board (“PCAOB”). The Audit Committee is not employed by the company, nor does it provide any expert assurance or professional certification regarding the company’s financial statements. The Audit Committee relies, without independent verification, on the accuracy and integrity of the information provided, and representations made, by management and the Company’s independent registered public accounting firm.

The Company’s independent registered public accounting firm also provided the Audit Committee with a formal written statement required by PCAOB Rule 3526 (Communications with Audit Committees Concerning Independence) describing all relationships between the independent registered public accounting firm and the Company, including the disclosures required by the applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence. In addition, the Audit Committee discussed with the independent registered public accounting firm its independence from Exagen Inc. The Audit Committee also considered whether the independent registered public accounting firm’s provision of certain other non-audit related services to the Company is compatible with maintaining such firm’s independence.

Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The Audit Committee and the Board have also recommended, subject to stockholder approval, the ratification of the appointment of BDO USA, P.C. as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2024.

This report of the Audit Committee is not “soliciting material,” shall not be deemed “filed” with the SEC and shall not be incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under such acts.

The foregoing report has been furnished by the Audit Committee.

The following table identifies our executive officers and their respective ages as of April 15, 2024:

The Board has adopted Corporate Governance Guidelines, a Code of Conduct and Ethics and charters for our Nominating Committee, Audit Committee and Compensation Committee of the Board (the "Compensation Committee") to assist the Board in the exercise of its responsibilities and to serve as a framework for the effective governance of the Company. You can access our current committee charters, our Corporate Governance Guidelines and our Code of Conduct and Ethics in the “Corporate Governance” section of the “Investors” page of our website located at www.exagen.com, or by writing to our Corporate Secretary at our offices at 1261 Liberty Way, Vista, CA 92081. Please note, however, that the information contained on the website is not incorporated by reference in, or considered part of, this proxy statement.

The Board currently consists of nine members. The Board has determined that Dr. Kahn and all of our current directors, other than Mr. Aballi and Dr. Nova, are independent directors in accordance with the listing requirements of the Nasdaq Global Market ("Nasdaq"). The Nasdaq independence definition includes a series of objective tests, including that the director is not, and has not been for at least three years, one of our employees and that neither the director nor any of his family members has engaged in various types of business dealings with us. In addition, as required by Nasdaq rules, the Board has made a subjective determination as to each independent director and director nominee that no relationships exist, which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, the Board reviewed and discussed information provided by the directors (and director nominee) and us with regard to each director’s or director nominee's business and personal activities and relationships as they may relate to us and our management. There are no family relationships among any of our directors, director nominees or executive officers.

Our Nominating Committee is responsible for reviewing with the Board, on an annual basis, the appropriate characteristics, skills and experience required for the board of directors as a whole and its individual members. In evaluating the suitability of individual candidates (both new candidates and current members) for election or

appointment, the Nominating Committee, in recommending candidates for election, and the Board will take into account many factors, including the following:

Currently, the Board evaluates each individual in the context of the Board as a whole, with the objective of assembling a group that can best maximize the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience in these various areas.

Other than the foregoing, there are no stated minimum criteria for director nominees, although the Nominating Committee may also consider such other factors as it may deem to be in the best interests of our Company and our stockholders. The Nominating Committee does, however, believe it appropriate for at least one member of our Board to meet the criteria for an “audit committee financial expert” as defined by SEC rules, and that a majority of the members of our Board meet the definition of “independent director” under Nasdaq qualification standards. The Nominating Committee also believes it is appropriate for our President and Chief Executive Officer to serve as a member of our Board. As of April 15, 2024, three of our nine directors self-identified as female and five of our nine directors self-identified as members of an "underrepresented community" as defined in the California Corporations Code or an "underrepresented minority" as defined under Nasdaq board diversity requirements. The Board Diversity Matrix, below, provides the diversity statistics of our Board.

The Nominating Committee identifies nominees for director by first evaluating the current members of our Board willing to continue in service. Current members with qualifications and skills that are consistent with the Nominating Committee's criteria for Board service and who are willing to continue in service are considered for re-nomination, balancing the value of continuity of service by existing members of our Board with that of obtaining a new perspective or expertise.

If any member of our Board does not wish to continue in service or if our Board decides not to re-nominate a member for re-election or if the Board decides to expand its size, the Nominating Committee identifies the desired skills and experience of a new nominee in light of the criteria above. The Nominating Committee generally polls our Board and members of management for their recommendations. The Nominating Committee may also review the composition and qualification of the boards of directors of our competitors and may seek input from industry experts or analysts. The Nominating Committee reviews the qualifications, experience and background of the candidates. Final candidates are interviewed by the members of the Nominating Committee and by certain of our other independent directors and executive management. In making its determinations, the Nominating Committee evaluates each individual in the context of our Board as a whole, with the objective of assembling a group that can best contribute to the success of our Company and represent stockholder interests through the exercise of sound business judgment. After review and deliberation of all feedback and data, the Nominating Committee makes its recommendation to our Board.

We have not received director candidate recommendations from our stockholders, and we do not have a formal policy regarding consideration of such recommendations. However, any recommendations received from stockholders will be evaluated in the same manner that potential nominees suggested by members of our Board, management or other parties are evaluated.

Under our Bylaws, a stockholder wishing to suggest a candidate for director should write to our Corporate Secretary and provide such information about the stockholder and the proposed candidate as is set forth in our Bylaws and as would be required by SEC rules to be included in a proxy statement. In addition, the stockholder must include the consent of the candidate and describe any arrangements or undertakings between the stockholder and the candidate regarding the nomination. In order to give the Nominating Committee sufficient time to evaluate a recommended candidate and include the candidate in our proxy statement for the 2025 annual meeting of stockholders (the "2025 Annual Meeting"), the recommendation should be received by our Corporate Secretary at our principal executive offices in accordance with our procedures detailed in the section below entitled "Stockholder Proposals."

The Board will give appropriate attention to written communications that are submitted by stockholders and will respond if and as appropriate. Our Corporate Secretary is primarily responsible for monitoring communications from stockholders and for providing copies or summaries to the directors as he considers appropriate.

Communications are forwarded to all directors if they relate to important substantive matters and include suggestions or comments that our Corporate Secretary and Executive Chairman of the Board consider to be important for the directors to know. In general, communications relating to corporate governance and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances and matters as to which we tend to receive repetitive or duplicative communications. Stockholders who wish to send communications on any topic to the Board should address such communications to the Board in writing: c/o Corporate Secretary, Exagen Inc., 1261 Liberty Way, Vista, California 92081.

Although we do not have a formal policy regarding attendance by members of our Board at our Annual Meeting, we strongly encourage, but do not require, our directors to attend. Nine members of our Board attended our 2023 Annual Meeting of Stockholders.

The Board is currently led by its Executive Chairman, Tina S. Nova, Ph.D. The Board recognizes that it is important to determine an optimal board leadership structure to ensure the independent oversight of management as we continue to grow. We separate the roles of Chief Executive Officer and Executive Chairman of the Board in recognition of the differences between the two roles. The Chief Executive Officer is responsible for setting the strategic direction for our Company and the day-to-day leadership and performance of our Company, while the Executive Chairman of the Board provides guidance to the Chief Executive Officer and presides over meetings of the full Board. We believe that this separation of responsibilities provides a balanced approach to managing the Board and overseeing our Company.

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

The Board has responsibility for the oversight of our risk management processes and, either as a whole or through its committees, regularly discusses with management our major risk exposures, their potential impact on our business and the steps we take to manage them. The risk oversight process includes receiving regular reports from Board committees and members of senior management to enable the Board to understand our risk identification, risk management and risk mitigation strategies with respect to areas of potential material risk, including operations, finance, legal, regulatory, strategic and reputational risk.

The Audit Committee reviews information regarding liquidity and operations and oversees our management of financial risks. Periodically, the Audit Committee reviews our policies with respect to risk assessment, risk management, loss prevention and regulatory compliance. Oversight by the Audit Committee includes direct communication with our external auditors, and discussions with management regarding significant risk exposures and the actions management has taken to limit, monitor or control such exposures. The Compensation Committee is responsible for assessing whether any of our compensation policies or programs has the potential to encourage excessive risk-taking. The Nominating Committee manages risks associated with the independence of the Board, corporate disclosure practices, and potential conflicts of interest. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is regularly informed through committee reports about such risks. Matters of significant strategic risk are considered by the Board as a whole.

Our Corporate Governance Guidelines require the Nominating Committee to oversee an annual assessment by the Board of the Board’s performance. As provided in our Corporate Governance Guidelines, the Nominating Committee is responsible for establishing the evaluation criteria and implementing the process for such evaluation.

We have a written Code of Conduct and Ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We have posted a current copy of the code in the "Corporate Governance" section of the "Investors" page on our website located at www.exagen.com.

In addition, we intend to post on our website all disclosures that are required by law or the listing standards of Nasdaq concerning any amendments to, or waivers from, any provision of the code.

Our Insider Trading Compliance Policy applies to all officers, directors, employees of the Company and certain consultants specified by management and prohibits all hedging transactions involving the Company's equity securities, such as zero-cost collars and forward sale contracts.

There were seven meetings of the Board (including telephonic meetings) during the fiscal year ended December 31, 2023. During the fiscal year ended December 31, 2023, each director attended at least 75% of the aggregate of all meetings of the Board and each director attended as least 75% of meetings of the committees on which such director served, during the period in which he or she served as a director.

The Board has established three standing committees—audit, compensation and nominating and corporate governance.

The current members of each of the Board committees and committee chairs are set forth in the following chart.

The Audit Committee’s main function is to oversee our accounting and financial reporting processes and the audits of our financial statements. This committee’s responsibilities include, among other things:

The members of our Audit Committee are Mr. Stokes, Ms. Hooker, Ms. Johnson and Mr. Kim. Mr. Stokes currently serves as the Chairman of the Audit Committee. Effective as the Company’s Annual Meeting, Ms. Johnson will resign as a member of the Audit Committee. All members of our Audit Committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and Nasdaq. The Board has determined that Mr. Stokes and Mr. Kim are “audit committee financial experts” as defined by applicable SEC rules and have the requisite financial sophistication as defined under the applicable Nasdaq rules and regulations. The Board has determined each of Mr. Stokes, Ms. Hooker, Ms. Johnson and Mr. Kim are independent under the applicable rules of the SEC and Nasdaq. The Audit Committee operates under a written charter that satisfies the applicable standards of the SEC and Nasdaq, which the Audit Committee will review and evaluate at least annually. A copy of the charter for our Audit Committee is available on our investor relations website at investors.exagen.com under Investors—Governance—Governance Documents. The Audit Committee met four times during 2023.

Both our external auditor and internal financial personnel meet privately with the Audit Committee and have unrestricted access to this committee.

Our Compensation Committee reviews, approves and recommends to the Board policies relating to compensation and benefits of our officers, employees and directors. The Compensation Committee approves corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers, evaluates the performance of these officers in light of those goals and objectives and approves the compensation of these officers based on such evaluations. The Compensation Committee also reviews and approves, or makes recommendations to the Board, regarding our incentive compensation plans, equity-based plans and executive severance plans and arrangements. The Compensation Committee has the authority to administer any such plans and arrangements and to approve grants of cash-based and equity-based awards under such plans. In addition, the Compensation Committee periodically reviews, and recommends to the Board, compensation for service on the Board and any committees of the Board. The Compensation Committee may delegate its authority under its charter to one or more subcommittees as it deems appropriate from time to time as further described in its charter. The Compensation Committee will review and evaluate, at least annually, its charter, as well as review and evaluate, at least annually, the performance of the Compensation Committee and its members, including compliance by the Compensation Committee with its charter.

The members of our Compensation Committee are Dr. Robertson, Ms. Hooker and Mr. Kim. Dr. Robertson serves as the Chairman of the committee. Effective as the Company’s Annual Meeting, Ms. Hooker will resign as Chairman and as a member of the Compensation Committee and Dr. Kahn will become a member of the Compensation Committee. Our Board has determined that each member of this committee is independent under the applicable rules and regulations of Nasdaq and is a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. A copy of the charter for our Compensation Committee is available on our investor relations website at investors.exagen.com under Investors - Governance— Governance Documents. The Compensation Committee met three times during 2023.

Our Environmental, Social and Governance Committee (the "ESG Committee") consists of a cross functional leadership team with the purpose, duties and responsibility of reviewing and recommending our Environmental, social and governance ("ESG") programs, policies and practices. The ESG Committee meets formally at least annually and makes recommendations to the President and Chief Executive Officer to be presented to the Audit Committee. For more information regarding our ESG initiatives, including our ESG report, please refer to www.exagen.com/investors.

At Exagen, we believe that working safely and being environmentally responsible are fundamental to our success. We are committed to conducting business in a way that considers our environment and our planet's changing climate, and that is also consistent with providing a high state of wellness and success for our employees and stakeholders. To date, we have incorporated environmentally sustainable practices into certain of our facilities and operations, including installing high efficiency light fixtures at our headquarters and adjusting scheduling and temperature settings of AC units to reduce run-time and energy consumption. Additionally, in 2023, we used environmentally sound methods to dispose of all hazardous and/or medical waste that we produced.

We recognize that our employees are critical to our mandate to provide accurate, timely and differential diagnosis for patients suffering from autoimmune and autoimmune-related diseases. That makes our employees both our most valuable asset and our most important investment. The success of our organization is reliant upon each individual's significant contribution to our corporate culture and goals, in addition to their commitment to our core company values of:

We understand that our future depends upon the attraction, retention, and engagement of a talented, diverse, and committed team that can thrive and innovate in a supportive environment. Our efforts to ensure this occurs across the company include offering ongoing training and development, in addition to competitive compensation and benefits packages.

Our organization recognizes the importance of diversity and inclusion in recruiting, developing and retaining the best available talent. We are committed to further understanding and building upon our diversity and inclusion strengths and are continuing the process of identifying opportunities and developing initiatives, including ongoing training for employees on DEI in the workplace.

As of December 31, 2023, 58.6% of our employees identified as female, 33.9% identified as male and 7.5% of our employees identified as other or declined to self-identify. Additionally, 47.9% of our employees identified as White, 24.2% as Hispanic or Latino, 15.1% as Asian, 3.8% as Black or African-American, 3.2% as two or more races (not Hispanic or Latino), 0.6% as Native Hawaiian or other Pacific Islander, and 0.6% as American Indian or Alaska Native. 4.9% of our employees identified as other or declined to self-identify.

The following tables and accompanying narrative disclosure set forth information about the compensation provided to our named executive officers during the year ended December 31, 2023, who were:

The following table presents summary information regarding the total compensation that was awarded to, earned by or paid to our named executive officers for services rendered during the years ended December 31, 2023 and 2022.

The named executive officers receive a base salary to compensate them for services rendered to our company. The base salary payable to each named executive officer is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities. The Board made no increases to annual base salaries in 2023. The 2023 base salaries of our named executive officers were $525,000, $406,477 and $378,416 for Messrs. Aballi, Adawi and Hazeltine, respectively.

We expect that base salaries for our named executive officers will continue to be reviewed periodically by our Compensation Committee, with adjustments expected to be made generally in accordance with the considerations described above and to maintain base salaries at competitive levels.

Our named executive officers are eligible to earn cash bonuses based on corporate and individual performance measures for the applicable year which, at the discretion of the Compensation Committee, may be further adjusted based on the individual performances of each named executive officer. For 2023, Mr. Aballi was eligible to receive a target bonus of up to 50% of his base salary, and each of Messrs. Adawi and Hazeltine were eligible to receive target bonuses of up to 45% of their base salaries.

For 2023, annual bonus payments were based in part on the achievement of pre-established objective performance goals for revenue, Adjusted EBITDA, cash balance, trailing-twelve-month average sales price, cost of sales and employee turnover, weighted 20%, 20%, 20%, 13.3%, 13.3% and 13.3%, respectively, to determine each executive's bonus opportunity. Award opportunities for each goal were established at target and maximum levels. Achievement at or above maximum for each goal was capped at 150% of target. Straight-line interpolation is used to calculate the 2023 bonus payouts associated with actual results falling between goals. The goals were set at levels that were expected to be challenging but achievable at the outset of the year.

In 2023, actual performance of our goals for revenue, Adjusted EBITDA, cash balance, trailing-twelve-month average sales price, cost of sales and employee turnover, were achieved at 115%, 145%, 135%, 109%, 93% and 113%, respectively, of the target goals.

We award stock options and restricted stock unit awards to our employees, including our named executive officers, as the long-term incentive component of our compensation program. Awards granted since our initial public offering in September 2019 were granted under our 2019 Incentive Award Plan (the “2019 Plan”); prior to our initial public offering, awards were granted under the 2013 Stock Option Plan, as amended from time to time (the “2013 Plan”) and our 2002 Stock Option Plan (the “2002 Plan”).

We typically grant equity awards to key new hires upon their commencing employment with us. We historically have used stock options as the primary incentive for long-term compensation to our named executive officers. Generally, the stock options we grant vest as to 25% of the total number of option shares on the first anniversary of the date of grant and in equal monthly installments over the 36 months thereafter, subject to the employee’s continued service with us on each vesting date. Since 2021, we have used restricted stock units as the primary long-term compensation to our named executive officers. Generally, the restricted stock units we grant vest as to 25% of the total number of restricted stock units on the first anniversary of the first day of the month in which such restricted stock units were granted and in annual installments over the four years thereafter, subject to the employee's continued service with us on each vesting date.

There were no options granted to our named executive officers in 2023.

Restricted stock units and stock options granted to our named executive officers may be subject to accelerated vesting in connection with the termination of their services with the Company. For additional discussion, please see “—Other Elements of Compensation—Severance and Change in Control Benefits” below.

The following table sets forth the number of restricted stock units granted to our named executive officers in 2023.

We currently maintain a 401(k) retirement savings plan that allows eligible employees to defer a portion of their compensation, within limits prescribed by the Code, on a pre-tax basis through contributions to the plan. Our named executive officers are eligible to participate in the 401(k) plan on the same terms as other full-time employees generally. Currently, we make employer matching contributions under the 401(k) plan up to a specified percentage, and these matching contributions are fully vested as of the date on which the contribution is made. We believe that providing a vehicle for tax-deferred retirement savings though our 401(k) plan, and making matching contributions, adds to the overall desirability of our executive compensation package and further incentivizes our employees, including our named executive officers, in accordance with our compensation policies.

Our named executive officers are eligible to participate in our health and welfare plans to the same general extent as all full-time employees, including:

We do not provide our named executive officers with any other perquisites or other personal benefits.

We generally have not made gross-up payments to cover our named executive officers’ personal income taxes that may pertain to any of the compensation paid or provided by our company.

Our named executive officers may become entitled to certain benefits or enhanced benefits upon a termination of employment pursuant to the Exagen Inc. Amended and Restated Executive Change in Control and Severance Plan (the "Amended and Restated Severance Plan"), as explained in further detail below. In addition, stock options granted to our employees, including our named executive officers, may be subject to acceleration in connection with a change in control under our equity plans.

On April 25, 2022, the Compensation Committee adopted the Amended and Restated Severance Plan. The Amended and Restated Severance Plan is intended to provide severance protections to a select group of management or highly compensated employees, including our named executive officers, in the event of a qualifying termination of employment with us. The Amended and Restated Severance Plan superseded any and all severance plans, separation policies, the provisions of any offer letters or any agreement that provided for severance payments and benefits applying to our executives who are party to the Amended and Restated Severance Plan.

Under the Amended and Restated Severance Plan, in the event that we terminate an executive's employment without "cause" and at any time, other than within twelve months following a "change in control," the executive will be eligible to receive the following payments and benefits:

The Amended and Restated Severance Plan also provides that in the event of a termination of an executive's employment by us without "cause" or by the executive for "good reason," in either case, on or within twelve months following a "change in control," the executive will be eligible to receive the following payments and benefits:

The executive's right to receive the severance payments and benefits described above is subject to the executive's delivery and, as applicable, non-revocation of a general release of claims in our favor and the executive's continued compliance with any applicable restrictive covenants.

In addition, in the event that any payment under the Amended and Restated Severance Plan, together with any other amounts we paid to the executive, would subject the executive to an excise tax under Section 4999 of the Internal Revenue Code, such payments will be reduced to the extent that such reduction would produce a better net after-tax result for the executive.

In connection with Mr. Hazeltine’s resignation, the Company and Mr. Hazeltine entered into a consulting agreement (the “Consulting Agreement”) and a severance agreement (the “Severance Agreement”). Pursuant to the Consulting Agreement, among other things, (i) each of Mr. Hazeltine’s unvested stock options and restricted stock awards continued to vest during the term of the Consulting Agreement, and (ii) from December 6, 2023 to March 31, 2024, Mr. Hazeltine provided consulting services to the Company at an hourly rate of $243.00. The Severance Agreement provided, among other things, that Mr. Hazeltine was entitled to receive, in accordance with the Severance Plan, the following cash payments: (i) $202,441.56, which is equivalent to six months of his then-current annual base salary and (ii) $182,197.40, which is equivalent to 100% of his cash performance bonus for 2023.

For additional discussion, please see “Equity Compensation” and "Outstanding Equity Awards at 2023 Fiscal Year-End." Other than the benefits described above, none of our named executive officers are entitled to any severance or change in control benefits.

In May 2017, we entered into an offer letter with Mr. Adawi, which was amended in September 2019.

Mr. Adawi’s offer letter provides for at-will employment, and an annual base salary and bonus. Mr. Adawi’s offer letter provided that, if we terminate Mr. Adawi’s employment without cause, Mr. Adawi would be entitled to a lump sum cash payment in an amount equal to six months of his annual base salary as in effect immediately prior to the date of termination, subject to his delivery and non-revocation of a general release of claims in favor of our company. The severance benefits described in Mr. Adawi's offer letter were superseded by the Amended and Restated Severance Plan.

The following table presents the outstanding equity incentive plan awards held by each named executive officer as of December 31, 2023. Unless otherwise indicated, each option listed in the following table was granted under the 2019 Plan.

Our director compensation program is intended to provide a total compensation package that enables us to attract and retain qualified and experienced individuals to serve as directors and to align our directors' interests with those of our stockholders. Directors who are also employees of our Company do not receive compensation for their service on the Board.

In September 2019, the Board adopted the Non-Employee Director Compensation Program (the "Director Compensation Program") that became effective in connection with our initial public offering.

Under the Director Compensation Program, non-employee directors receive a cash retainer for service on the Board and for service on each committee of which the director is a member. The Chairman of the Board and of each committee receives a higher retainer for such service. In connection with Dr. Nova’s appointment as Executive Chairman of the Board, the Board approved an aggregate annual cash retainer of $100,000 for Dr. Nova in lieu of any retainer under the director compensation program. Cash retainers are payable quarterly in arrears. Annual cash retainers are pro-rated for any partial calendar quarter of service. All cash compensation payable to the directors affiliated with Sun Mountain Capital or H.I.G. Capital, LLC is paid to Sun Mountain Capital or H.I.G. Capital, LLC, as applicable. The fees paid to non-employee directors for service on the Board under the Director Compensation Program are as follows:

In addition, under this program, each of our non-employee directors is eligible to receive an annual stock option grant to purchase 9,000 shares of our Common Stock, which shall vest in full on the earlier to occur of (i) the one-year anniversary of the applicable grant date and (ii) the date of the next annual meeting following the grant date, subject to continued service through the applicable vesting date. Additionally, new non-employee directors are eligible to receive a stock option to purchase 15,000 shares of our Common Stock on the date on which such eligible director is appointed or elected to serve on the Board, and shall vest as to 1/36th of the shares underlying the option on each monthly anniversary of the grant date, subject to the eligible director's continued service through the applicable vesting date.

The following table provides information on our equity compensation plans as of December 31, 2023.

As of December 31, 2023, we had two equity compensation plans in place under which shares of our Common Stock were authorized for issuance detailed as follows:

The following table and accompanying footnotes set forth certain information with respect to the beneficial ownership of our Common Stock at April 15, 2024 for:

We have determined beneficial ownership in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Except as indicated by the footnotes below, we believe, based on information furnished to us, that the persons and entities named in the table below have sole voting and sole investment power with respect to all shares of Common Stock that they beneficially owned, subject to applicable community property laws.

Applicable percentage ownership is based on 17,356,580 shares of Common Stock outstanding as of April 15, 2024. In computing the number of shares of Common Stock beneficially owned by a person and the percentage ownership of that person, we deemed to be outstanding all shares of Common Stock subject to options, warrants or other rights held by that person or entity that are currently exercisable or scheduled to vest within 60 days of April 15, 2024. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Exagen Inc., 1261 Liberty Way, Vista, California 92081.

There are and have been no transactions entered into or existing since January 1, 2022 to which we have been a party in which the amount involved exceeded or will exceed $120,000 (or, if less, 1% of the average of our total assets amounts for the years ended December 31, 2023 and 2022), and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control and other arrangements, which are described under “Executive and Director Compensation.”

The Board adopted a written related person transaction policy, setting forth the policies and procedures for the review and approval or ratification of related-person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, where the amount involved exceeds $120,000 (or, if less, 1% of the average of our total assets at year-end for the last two completed fiscal years) and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. In reviewing and approving any such transactions, our Audit Committee is tasked to consider all relevant facts and circumstances, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in an arm’s length transaction and the extent of the related person’s interest in the transaction.

Stockholders who intend to have a proposal considered for inclusion in our proxy materials for presentation at our 2025 Annual Meeting pursuant to Rule 14a-8 under the Exchange Act must submit the proposal to our Corporate Secretary at our offices at 1261 Liberty Way, Vista, CA 92081 in writing not later than December 31, 2024, which is 120 days prior to the one-year anniversary of the mailing date of the proxy statement for the Annual Meeting, unless the date of the 2025 Annual Meeting of Stockholders is changed by more than 30 days from the anniversary of our Annual Meeting, in which case the deadline for such proposals will be a reasonable time before we begin to print and send our proxy materials. These proposals must comply with the requirements as to form and substance established by the SEC in Rule 14a-8 of the Exchange Act for such proposals in order to be included in the proxy statement.

Stockholders intending to present a proposal at the 2025 Annual Meeting, but not to include the proposal in our proxy statement, or to nominate a person for election as a director, must comply with the requirements set forth in our Bylaws. Our Bylaws require, among other things, that our Corporate Secretary receive written notice from the stockholder of record of their intent to present such proposal or nomination not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the anniversary of the preceding year’s annual meeting. Therefore, the Company must receive notice of such a proposal or nomination for the 2025 Annual Meeting no earlier than the close of business on February 9, 2025 and no later than the close of business on March 11, 2025. The notice must contain the information required by the Bylaws, a copy of which is available upon request to our Corporate Secretary. In the event that the date of the 2025 Annual Meeting is more than 30 days before or more than 60 days after June 9, 2025, our Corporate Secretary must receive such written notice not earlier than the close of business on the 120th day prior to the 2025 Annual Meeting and not later than the close of business on the 90th day prior to the 2025 Annual Meeting and the 10th day following the day on which public disclosure of the date of such meeting is first made by the Company. SEC rules permit management to vote proxies in its discretion in certain cases if the stockholder does not comply with this deadline and, in certain other cases, notwithstanding the stockholder’s compliance with this deadline. Stockholders are advised to review our Bylaws which also specify requirements as to the form and content of a stockholder's notice. In addition to satisfying the foregoing advance notice requirements, to comply with the universal proxy rules under the Exchange Act, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must follow the requirements set forth in Rule 14a-19 as promulgated under the Exchange Act.

We reserve the right to reject, rule out of order or take other appropriate action with respect to any proposal that does not comply with these or other applicable requirements.

The Board is not aware of any matter to be presented for action at the Annual Meeting other than the matters referred to above and does not intend to bring any other matters before the Annual Meeting. However, if other matters should come before the Annual Meeting, it is intended that holders of the proxies named on the Company’s proxy card will vote thereon in their discretion.

To the extent that this proxy statement is incorporated by reference into any other filing by us under the Securities Act or the Exchange Act, the section of this proxy statement entitled “Report of the Audit Committee” to the extent permitted by the rules of the SEC will not be deemed incorporated, unless specifically provided otherwise in such filing. In addition, references to our website are not intended to function as a hyperlink and the information contained on our website is not intended to be part of this proxy statement. Information on our website, other than the 2023 Annual Report, our proxy statement and Internet Notice, is not part of the proxy soliciting material and is not incorporated herein by reference.

The accompanying proxy is solicited by and on behalf of the Board, whose Internet Notice is attached to this proxy statement, and the entire cost of such solicitation will be borne by us. In addition to the use of mail, proxies may be solicited by personal interview, telephone, e-mail and facsimile by our directors, officers and other employees who will not be specially compensated for these services. We will also request that brokers, nominees, custodians and other fiduciaries forward soliciting materials to the beneficial owners of shares held by such brokers, nominees, custodians and other fiduciaries. We will reimburse such persons for their reasonable expenses in connection therewith.

A copy of our 2023 Annual Report, including financial statements thereto but not including exhibits, as filed with the SEC, will be sent to any beneficial owners of our Common Stock on the Record Date without charge upon written request addressed to:

A reasonable fee will be charged for copies of exhibits. You also may access this proxy statement and our 2023 Annual Report at www.proxydocs.com/XGN. We make available free of charge on our website all of our filings that are made electronically with the SEC, including our 2023 Annual Report. These materials can be found at www.exagen.com under the "Investor Relations" section.

By Order of the Board of Directors,

/s/ Kamal Adawi

Kamal Adawi

Corporate Secretary

Vista, California

April 26, 2024