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25, 2022
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i
Tuesday,
2022
2022.
How Do I Vote?
| | | | By Internet: If you have Internet access, you may submit your vote from any location in the world by following the instructions in the Notice or following the instructions on the proxy card or voting instruction card sent to you. Specifcially, to vote through the Internet, go to www.envisionreports.com/SLS to complete an electronic proxy card. You will be asked to provide the control number from the enclosed proxy card. | | | ||
| | | | By Telephone: You may submit your vote by following the telephone voting instructions on the proxy card or voting instruction card sent to you. To vote over the telephone, dial toll-free 1-800-652-VOTE (8683) using a touch-tone phone and follow the recorded instructions. You will be asked to provide the company number and control number from the enclosed proxy card. | | | ||
| | | | By Proxy by Mail: You may vote by mail by requesting a full paper copy of the Proxy Statement materials as instructed in the Notice of Internet Availability and marking, dating and signing your proxy card or, for shares held in street name, the voting instruction card provided to you by your broker or nominee, and mailing it in the enclosed, self-addressed, postage prepaid envelope. If you return your signed proxy card to us before the 2022 Annual Meeting, we will vote your shares as you direct. If you are a beneficial owner, the deadline for submitting your vote is 11:59 p.m., Tuesday June 7, 2022. | | |
2022.
11:59 p.m., Tuesday, June 7, 2022.
III Directors.
Proposal 4: To approve the 2021 Employee Stock Purchase Plan. The affirmative vote of the holders of shares of common stock representing a majority of the votes cast on the matter is required for the approval of the 2021 Employee Stock Purchase Plan.
Shares that abstain from voting as to a particular matter and shares held in “street name” by brokerage firms who indicate on their proxies that they do not have discretionary authority to vote such shares as to a particular matter will not be counted as votes in favor of such matter, and will also not be counted as shares votingcast on such matter. Accordingly, abstentions and “broker non-votes” will have no effect on the voting on the proposals referenced above.
SLS.
2022.
Name of Beneficial Owner | | | Number | | | Percentage of Shares Beneficially Owned | | ||||||
Angelos M. Stergiou, President, Chief Executive Officer and Director | | | | | 98,268(1) | | | | | | * | | |
Barbara A. Wood, Executive Vice President, General Counsel and Corporate Secretary | | | | | 34,919(2) | | | | | | * | | |
Dragan Cicic, Senior Vice President, Clinical Development | | | | | 36,755(3) | | | | | | * | | |
Jane Wasman, Chair of the Board | | | | | 14,830(5) | | | | | | * | | |
David L. Scheinberg, Director | | | | | 15,012(4) | | | | | | * | | |
Robert Van Nostrand, Director | | | | | 14,830(5) | | | | | | * | | |
John Varian, Director | | | | | 14,830(5) | | | | | | * | | |
All current executive officers and directors as a group (7 persons) | | | | | 229,444 | | | | | | 1.1 | | |
Annual Meeting.
Set forth below are the names of (i) the persons nominated for election as directors, and (ii) those directors whose terms do not expire this year, their ages, their offices in the Company, if any, their principal occupations or employment for at least the past five years, the length of their tenure as directors and the names of other public companies in which such persons hold or have held directorships during the past five years as of April 27, 2021.25, 2022. Additionally, information about the specific experience, qualifications, attributes or skills that led to our Board of Directors’ conclusion at the time of filing of this proxy statement that each person listed below should serve as a director is set forth below:
Name | Age | Position | Term Expires | Audit Committee | Compensation Committee | Nominating And Corporate Governance Committee | Science Committee | |||||||
Jane Wasman | 64 | Chair of the Board | 2023 | ✔ | ✔ | ✔* | ||||||||
Angelos M. Stergiou | 45 | Director President and Chief Executive Officer | 2022 | ✔ | ||||||||||
David A. Scheinberg | 65 | Director | 2021 | ✔* | ||||||||||
Robert L. Van Nostrand | 64 | Director | 2023 | ✔ | ✔* | ✔ | ||||||||
John Varian | 60 | Director | 2022 | ✔* | ✔ | ✔ |
Name | | | Age | | | Position | | | Term Expires | | | Audit Committee | | | Compensation Committee | | | Nominating And Corporate Governance Committee | | | Science Committee | | ||||||||||||||||||
Jane Wasman | | | | | 65 | | | | Chair of the Board | | | | | 2023 | | | | | | ✓ | | | | | | ✓ | | | | | | ✓* | | | | | | | | |
Angelos M. Stergiou | | | | | 46 | | | | Director, President and Chief Executive Officer | | | | | 2022 | | | | | | | | | | | | | | | | | | | | | | | | ✓ | | |
David A. Scheinberg | | | | | 66 | | | | Director | | | | | 2024 | | | | | | | | | | | | ✓ | | | | | | | | | | | | ✓* | | |
Robert L. Van Nostrand | | | | | 65 | | | | Director | | | | | 2023 | | | | | | ✓ | | | | | | ✓* | | | | | | ✓ | | | | | | | | |
John Varian | | | | | 61 | | | | Director | | | | | 2022 | | | | | | ✓* | | | | | | | | | | | | ✓ | | | | | | ✓ | | |
Robert L. Van Nostrand.Mr. Van Nostrand has been a director of the Company and Chair of the Compensation Committee since December 2017. He was a member of the board of directors of Achillion Pharmaceuticals, Inc. (NASDAQ: ACHN), a biotechnology company, until it was acquired in January 2020. He is a member of the board of directors of Intra-Cellular Therapies, Inc. (NASDAQ: ITCI), a biopharmaceutical company, Yield10 Bioscience, Inc. (NASDAQ: YTEN), formerly Metabolix, Inc., a bio-agricultural company, Likeminds, Inc., a private biotech company, and the Biomedical Research Alliance of New York, a private company providing clinical trial services. Mr. Van Nostrand was Executive Vice President and Chief Financial Officer of Aureon Laboratories, Inc., a pathology life science company, from
documents.
2021.
Compensation Committee
Radford ultimately developed compensation recommendations that were presented to the Compensation Committee for its consideration. Based on these recommendations, we determined our current compensation levels for our executive officers, including base salary and target bonus payments.
Name | | | Age | | | Position with the Company | |
Angelos M. Stergiou, M.D., Sc.D. h.c. | | 46 | | | President, Chief Executive Officer and Director | | |
Barbara A. Wood, Esq. | | 60 | | | Executive Vice President, General Counsel and Corporate Secretary | | |
Dragan Cicic, M.D. | | 58 | | | Senior Vice President, Clinical Development | | |
John T. Burns | | 37 | | | Senior Vice President, Finance, and | | |
Robert Francomano | | | 56 | | | Senior Vice President, Chief Commercial Officer | |
Dragan Cicic, M.D. Dr. Cicic has served as Senior Vice President, Clinical Development of the Company since February 2020. Dr. Cicic has 21 years of experience in the biopharmaceutical industry. Before joining the Company, he was a Senior Vice President, Clinical Lead, at Klus Pharma, a wholly owned U.S. subsidiary of Kelun, a major China-based multinational pharmaceutical company with about 30,000 employees worldwide. At Klus Pharma, Dr. Cicic led the global clinical development of targeted solid cancer biologicals and was involved in the development of novel checkpoint inhibitors as well as other innovative biological and small molecule drug candidates. Prior to Klus Pharma, Dr. Cicic held senior management positions at Actinium Pharmaceuticals where he launched key clinical trials, both early and late stage, in hematologic malignancies, primarily in acute myeloid leukemia. Dr. Cicic also worked with QED Technologies, a consulting company focused on life sciences. He received his medical degree from the University of Belgrade, and an MBA from the Wharton School of the University of Pennsylvania. Dr. Cicic also did a Fellowship at Harvard University. Dr. Cicic has published extensively in the fields of hematologic malignancies and solid cancers. He is a member of the American Society of Hematology.
On January 19, 2021, the Board of Directors of the Company appointed Mr. Burns as the Company’s principal accounting officer.
| | | Year | | | Salary ($) | | | Non-Equity Incentive Plan Compensation ($)(3) | | | Bonus ($) | | | Option Awards ($)(1) | | | Stock Awards ($)(2) | | | All Other Compensation ($) | | | Total ($) | | ||||||||||||||||||||||||
Angelos M. Stergiou, M.D., Sc.D. h.c. | | | | | 2021 | | | | | | 565,100 | | | | | | 280,000 | | | | | | — | | | | | | 827,887 | | | | | | 158,000 | | | | | | 2,930(6) | | | | | | 1,833,917 | | |
President and Chief Executive Officer | | | | | 2020 | | | | | | 540,750 | | | | | | 283,894 | | | | | | — | | | | | | 107,800 | | | | | | 179,550 | | | | | | 2,930(6) | | | | | | 1,114,924 | | |
Barbara A. Wood, Esq. | | | | | 2021 | | | | | | 404,700 | | | | | | 152,000 | | | | | | — | | | | | | 330,107 | | | | | | 63,000 | | | | | | 14,530(7) | | | | | | 964,337 | | |
Executive Vice President, General Counsel and Corporate Secretary | | | | | 2020 | | | | | | 387,230 | | | | | | 165,734 | | | | | | 10,000(4) | | | | | | 38,500 | | | | | | 66,150 | | | | | | 14,330(8) | | | | | | 681,944 | | |
Dragan Cicic, M.D.(5) | | | | | 2021 | | | | | | 339,900 | | | | | | 112,000 | | | | | | — | | | | | | 330,107 | | | | | | 63,000 | | | | | | 14,530(7) | | | | | | 859,537 | | |
Senior Vice President, Clinical Development | | | | | 2020 | | | | | | 302,550 | | | | | | 91,658 | | | | | | — | | | | | | 53,900 | | | | | | 47,250 | | | | | | 13,694(8) | | | | | | 509,052 | | |
Year | Salary ($) | Bonus ($) | Non-Equity Incentive Plan Compensation ($) (1) | Option Awards ($) (2) | Stock Awards ($) (3) | All Other Compensation ($) (4) | Total ($) | |||||||||||||||||||||||||
Angelos M. Stergiou, M.D., Sc.D. h.c. | 2020 | 540,750 | - | 283,894 | 107,800 | 179,550 | 2,930 | (9) | 1,114,924 | |||||||||||||||||||||||
President and Chief Executive Officer | 2019 | 629,649 | (5) | - | 223,125 | 464,105 | - | 109,731 | (6) | 1,426,610 | ||||||||||||||||||||||
Barbara A. Wood, Esq. | 2020 | 387,230 | 10,000 | (7) | 165,734 | 38,500 | 66,150 | 14,330 | (8) | 681,944 | ||||||||||||||||||||||
Executive Vice President, General Counsel and Corporate Secretary | 2019 | 376,000 | - | 135,360 | 180,182 | - | 14,130 | (8) | 705,672 | |||||||||||||||||||||||
Dragan Cicic, M.D. (9) | 2020 | 302,550 | - | 91,658 | 53,900 | 47,250 | 13,694 | (8) | 509,052 | |||||||||||||||||||||||
Senior Vice President, Clinical Development | 2019 | - | - | - | - | - | - | - |
Awards made under our short-term cash incentive program utilize a pay-for-performance strategy and compensate our NEOs for the level of achievement of specified annual corporate goals, as well as individual goals for our NEOs other than our CEO whose short-term incentive compensation is based 100% on the level of achievement of our corporate goals. Our annual corporate goals are focused on the achievement of meaningful and specified clinical development goals with a focus on advancing our clinical pipeline. The annual goals also usually include the pursuit of certain corporate development actions, such as business development initiatives and achievement of cash management strategies in order to assure adequate funding for our clinical development programs and cash run-way. The annual goals are proposed by senior management and reviewed and approved by our Compensation Committee and our Board. The goals are designed to require significant effort in order to achieve our clinical development and operational goals while also being achievable with the requisite hard work and dedication.
In September 2016, Private SELLAS
The 2016 Stergiou Agreement did not have a specified term and either party could terminate such agreement by providing written notice at any time, with or without cause.
The 2019 Stergiou Agreement became effective as of July 1, 2019, at which time it replaced and superseded the 2016an employment agreement entered into with Dr. Stergiou Agreement.in September 2016. The 2019 Stergiou Agreement has an initial two-year term unless terminated prior thereto (i) by us with cause (at any time) or without cause (upon at least 30 days’ prior written notice), or (ii) by Dr. Stergiou for good reason (upon at least 90 days prior written notice of the reason with a cure period of 30 days for us to correct the act or failure to act that constitutes good reason), or without good reason (upon at least 90 days prior written notice) or (iii) due to Dr. Stergiou’s death or disability. The 2019 Stergiou Agreement shall continue until terminated in accordance with its terms.
compensation committee thereof.
Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable (1) | Option Exercise Price ($) (2) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) (3) | Market Value of Shares or Units of Stock That Have Not Vested ($) (4) | |||||||||||||||||||
Angelos M. Stergiou | 3/13/2018 | 1,306 | 594 | $ | 262.00 | 3/13/2028 | — | — | ||||||||||||||||||
3/18/2019 | 3,719 | 4,781 | $ | 69.00 | 3/18/2029 | — | — | |||||||||||||||||||
3/12/2020 | — | 70,000 | $ | 1.89 | 3/12/2030 | — | — | |||||||||||||||||||
3/12/2020 | — | — | $ | — | — | 95,000 | $ | 551,950 | ||||||||||||||||||
Barbara A. Wood | 3/13/2018 | 688 | 312 | $ | 262.00 | 3/13/2028 | — | — | ||||||||||||||||||
3/18/2019 | 1,444 | 1,856 | $ | 69.00 | 3/18/2029 | — | — | |||||||||||||||||||
3/12/2020 | — | 25,000 | $ | 1.89 | 3/12/2030 | — | — | |||||||||||||||||||
3/12/2020 | — | — | $ | — | — | 35,000 | $ | 203,350 | ||||||||||||||||||
Dragan Cicic | 3/12/2020 | — | 35,000 | $ | 1.89 | 3/12/2030 | ||||||||||||||||||||
3/12/2020 | — | — | $ | — | — | 25,000 | $ | 145,250 | ||||||||||||||||||
Name | | | Grant Date | | | Number of Securities Underlying Unexercised Options Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | | | Option Exercise Price ($)(2) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#)(3) | | | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | | |||||||||||||||||||||
Angelos M. Stergiou | | | | | 3/13/2018 | | | | | | 1,781 | | | | | | 119 | | | | | $ | 262.00 | | | | | | 3/13/2028 | | | | | | — | | | | | | — | | |
| | | | | 3/18/2019 | | | | | | 5,844 | | | | | | 2,656 | | | | | $ | 69.00 | | | | | | 3/18/2029 | | | | | | — | | | | | | — | | |
| | | | | 3/12/2020 | | | | | | 30,625 | | | | | | 39,375 | | | | | $ | 1.89 | | | | | | 3/12/2030 | | | | | | — | | | | | | — | | |
| | | | | 3/12/2020 | | | | | | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | | 95,000 | | | | | $ | 525,350 | | |
| | | | | 3/4/2021 | | | | | | — | | | | | | 118,500 | | | | | $ | 8.00 | | | | | | 3/4/2031 | | | | | | — | | | | | | — | | |
| | | | | 3/4/2021 | | | | | | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | | 14,812 | | | | | $ | 81,910 | | |
Barbara A. Wood | | | | | 3/13/2018 | | | | | | 938 | | | | | | 62 | | | | | $ | 255.00 | | | | | | 3/14/2028 | | | | | | — | | | | | | — | | |
| | | | | 3/18/2019 | | | | | | 2,269 | | | | | | 1,031 | | | | | $ | 69.00 | | | | | | 3/18/2029 | | | | | | — | | | | | | — | | |
| | | | | 3/12/2020 | | | | | | 10,938 | | | | | | 14,062 | | | | | $ | 1.89 | | | | | | 3/12/2030 | | | | | | — | | | | | | — | | |
| | | | | 3/12/2020 | | | | | | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | | 35,000 | | | | | $ | 193,550 | | |
| | | | | 3/4/2021 | | | | | | — | | | | | | 47,250 | | | | | $ | 8.00 | | | | | | 3/4/2031 | | | | | | — | | | | | | — | | |
| | | | | 3/4/2021 | | | | | | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | | 5,906 | | | | | $ | 32,660 | | |
Dragan Cicic | | | | | 3/12/2020 | | | | | | 15,313 | | | | | | 19,687 | | | | | $ | 1.89 | | | | | | 3/12/2030 | | | | | | | | | | | | | | |
| | | | | 3/12/2020 | | | | | | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | | 25,000 | | | | | $ | 138,250 | | |
| | | | | 3/4/2021 | | | | | | — | | | | | | 47,250 | | | | | $ | 8.00 | | | | | | 3/4/2031 | | | | | | — | | | | | | — | | |
| | | | | 3/4/2021 | | | | | | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | | 5,906 | | | | | $ | 32,660 | | |
Potential Payments Upon Termination Related to Change in Control.The Wood Severance Agreement provides that if we terminate Ms. Wood’s employment without cause or she resigns for good reason within one year following a change in control we will pay her the following amounts in equal installments over a 18 month period: (i) an amount equal to 18 months of her then-current Base Salary, less standard employment-related withholdings and deductions; and (ii) an amount equal to her target bonus for the year in which her employment terminates, without regard to whether the performance goals with respect to such target bonus have been established or met and less standard employment-related with holdings and deductions. In addition, Ms. Wood will be entitled, if she so elects, to receive reimbursement for COBRA monthly premiums for a specified period of time.
Name | Fees Earned or Paid in Cash ($)(1) | Option Awards ($) (2) | Total ($)(3) | |||||||||
Jane Wasman | 90,000 | 9,880 | 99,880 | |||||||||
Robert L. Van Nostrand | 61,375 | 9,880 | 71,255 | |||||||||
John Varian | 62,750 | 9,880 | 72,630 | |||||||||
David A. Scheinberg | 47,500 | 9,880 | 57,380 | |||||||||
Name | | | Fees Earned or Paid in Cash ($)(1) | | | Option Awards ($)(2) | | | Total ($)(3) | | |||||||||
Jane Wasman | | | | | 90,000 | | | | | | 51,505 | | | | | | 141,505 | | |
Robert L. Van Nostrand | | | | | 61,375 | | | | | | 51,505 | | | | | | 114,255 | | |
John Varian | | | | | 62,750 | | | | | | 51,505 | | | | | | 112,880 | | |
David A. Scheinberg | | | | | 47,500 | | | | | | 51,505 | | | | | | 99,005 | | |
Our
Compensation Category | Amount | |||
Annual Base Compensation | $ | 40,000 | ||
Additional Non-Executive Chair Compensation | $ | 30,000 | ||
Additional Committee Chair Compensation: | ||||
Audit | $ | 15,000 | ||
Compensation | $ | 10,000 | ||
Nominations and Governance | $ | 7,500 | ||
Science (f/k/a Research & Development) | $ | 7,500 | ||
Additional Committee Membership Compensation: | ||||
Audit | $ | 7,500 | ||
Compensation | $ | 5,000 | ||
Nominations and Governance | $ | 3,875 | ||
Science | $ | 3,875 |
Compensation Category | | | Amount | | |||
Annual Base Compensation | | | | $ | 40,000 | | |
Additional Non-Executive Chair Compensation | | | | $ | 30,000 | | |
Additional Committee Chair Compensation: | | | | | | | |
Audit | | | | $ | 18,000 | | |
Compensation | | | | $ | 18,000 | | |
Nominations and Governance | | | | $ | 18,000 | | |
Science (f/k/a Research & Development) | | | | $ | 18,000 | | |
Additional Committee Membership Compensation: | | | | | | | |
Audit | | | | $ | 8,000 | | |
Compensation | | | | $ | 8,000 | | |
Nominations and Governance | | | | $ | 8,000 | | |
Science | | | | $ | 8,000 | | |
Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Previous Columns) | |||||||||
Equity compensation plans approved by security holders | ||||||||||||
2017 Equity Incentive Plan | 21,520 | $ | 112.81 | — | ||||||||
2019 Equity Incentive Plan | 186,000 | $ | 1.87 | 100,689 | ||||||||
Restricted Stock units | 170,000 | N/A | — | |||||||||
2017 Employee Stock Purchase Plan | — | N/A | 8,302 | |||||||||
Equity compensation plans not approved by security holders | ||||||||||||
None | — | — | — | |||||||||
Total | 377,520 | $ | 13.38 | 108,991 |
Plan Category | | | Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights | | | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | | | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Previous Columns) | | |||||||||
Equity compensation plans approved by security holders | | | | | | | | | | | | | | | | | | | |
2017 Equity Incentive Plan | | | | | 21,520 | | | | | $ | 112.85 | | | | | | — | | |
2019 Equity Incentive Plan | | | | | 512,250 | | | | | $ | 5.77 | | | | | | 449,476 | | |
Restricted Stock units | | | | | 200,280 | | | | | | N/A | | | | | | — | | |
2017 Employee Stock Purchase Plan | | | | | — | | | | | | N/A | | | | | | 11,302 | | |
2021 Employee Stock Purchase Plan | | | | | — | | | | | | N/A | | | | | | 300,000 | | |
Equity compensation plans not approved by security holders | | | | | | | | | | | | | | | | | | | |
None | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | | 734,050 | | | | | $ | 10.09 | | | | | | 760,778 | | |
19
directors.
20
2019 | 2020 | |||||||
(in thousands) | ||||||||
Audit Fees(1) | $ | 383 | $ | 373 | ||||
Audit-related Fees(2) | 187 | 108 | ||||||
Tax Fees(3) | 119 | 46 | ||||||
All Other Fees | — | — | ||||||
Total Fees | $ | 689 | $ | 527 |
| | | 2020 | | | 2021 | | ||||||
| | | (in thousands) | | |||||||||
Audit Fees(1) | | | | $ | 373 | | | | | $ | 403 | | |
Audit-related Fees(2) | | | | | 105 | | | | | | 157 | | |
Tax Fees(3) | | | | | 50 | | | | | | 37 | | |
All Other Fees | | | | | — | | | | | | — | | |
Total Fees | | | | $ | 528 | | | | | $ | 597 | | |
Our Audit Committee has determined that the rendering of services other than audit services by Moss Adams is compatible with maintaining the principal accountant’s independence.
THe board of directors UNAnIMOUSLY Recommends
22
meeting.
Advisory
23
TO APPROVE THE 2021 EMPLOYEE STOCK PURCHASE PLAN
On April 22, 2021, our Board unanimously approved, subject to stockholder approval at the meeting, the adoption of the 2021 Employee Stock Purchase Plan (the “ESPP”). The ESPP provides eligible employees with the opportunity to purchase shares of our common stock at a discount, on a tax-favored basis, through regular payroll deductions in compliance with Section 423 of the IRC.
The ESPP is being submitted to stockholders for approval at the meeting in order to ensure favorable federal income tax treatment under Section 423 of the IRC for purchases of shares by our employees under the ESPP.
The ESPP allows all of the full-time and certain part-time employees of the Company to purchase shares of our common stock at a discount to fair market value. Employees will purchase shares in September and March of each year using funds deducted from their paychecks during the preceding six months. The ESPP is expected to be an important component of the benefits package that we offer to our employees. We believe that the ESPP will aid us in retaining existing employees, recruiting and retaining new employees and aligning and increasing the interest of all employees in our success.
Our Board believes it is in the best interest of the Company and its stockholders that the ESPP be approved. If approved, eligible employees who elect to participate in the ESPP will first be granted options to purchase common stock under the ESPP on September 15, 2021.
Summary of Material Features of the ESPP
The following description of the material features of the ESPP is intended to be a summary only. This summary is qualified in its entirety by the full text of the ESPP that is attached to this proxy statement as Appendix A.
Administration. The ESPP will be administered under the direction of the Compensation Committee. The Compensation Committee has authority to interpret the ESPP and to make all other determinations necessary or advisable in administering it.
Eligibility. All full-time employees and certain part-time employees who have been continuously employed for at least one month prior to an offering date will be eligible to participate in the ESPP. For part-time employees to be eligible, they must have customary employment of more than five months in any calendar year and more than 20 hours per week. However, no employee shall be eligible to participate to the extent that, immediately after the grant, (i) that employee would own stock and/or options or securities to purchase stock possessing 5% or more of the combined voting power or the value of all classes of our stock, or (ii) his or her rights to purchase stock under all of our employee stock purchase plans accrues at a rate that exceeds $25,000 for each calendar year in which such rights are outstanding and exercisable. All of our employees will be eligible to participate in the ESPP. Participation in the ESPP is at the election of each eligible employee and the amounts received by a participant under the ESPP depend on the fair market value of our common stock on future dates; therefore, the benefits or amounts that will be received by any participant if the ESPP is approved by our stockholders, are not currently determinable.
Shares Available for Issuance. Assuming the ESPP is approved by our stockholders at the meeting, there will be 300,000 shares of our common stock available for issuance under the ESPP.
Participation. To participate in the ESPP, an eligible employee authorizes payroll deductions in an amount not less than 1% nor greater than 20% of his or her “eligible earnings” (i.e., regular rate of salary or wages, including overtime pay but not including incentive payments, bonuses, commissions or other additional payments) for each full payroll period in the offering period. The maximum number of shares of common stock that may be purchased by any participant during an offering period shall equal the lesser of 5,000 shares or $25,000 divided by the fair market value of our common stock on the first day of an offering period. To ensure that IRS share limitations are not exceeded, we do not accept contributions from an individual participant in excess of $25,000 per calendar year.
Purchases. Eligible employees enroll in a six-month offering period during the open enrollment period prior to the start of that offering period. A new offering period begins approximately every September 15 and March 15. At the end of each offering period, the accumulated deductions are used to purchase shares of our common stock from us during an offering period. Shares are purchased at a price equal to 85% of the lower of the fair market value of our common stock on the first business day or the last business day of an offering period. On April 22, 2021, the closing market price per share of our common stock was $7.75 as reported by the Nasdaq Stock Market.
Termination of Employment. If a participating employee voluntarily resigns or is terminated by the Company prior to the last day of an offering period, the employee’s option to purchase terminates and the amount in the employee’s account is returned to the employee.
Transferability. Neither contributions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive shares under the ESPP may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent or distribution to a designated beneficiary upon the participant’s death) by the participant.
Adjustments upon Change in Capitalization. Subject to any required action by our stockholders, the number of shares of common stock covered by unexercised options under the ESPP, the number of shares of common stock which have been authorized for issuance under the ESPP but are not yet subject to options, the maximum number of shares of common stock that may be purchased by a participant in an offering period, as well as the price per share of common stock covered by each unexercised option under the ESPP, shall be proportionately adjusted for any increase or decrease in the number of issued shares of common stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the common stock.
In the event of the proposed dissolution or liquidation of the Company, any offering period then in progress will terminate immediately prior to the consummation of such proposed action, unless otherwise provided by our Board. In the event of a proposed sale of all or substantially all of the assets of the Company, or merger, consolidation or other capital reorganization of the Company with or into another corporation, each option outstanding under the ESPP shall be assumed or an equivalent option shall be substituted by such successor corporation unless our Board determines, in its sole discretion and in lieu of assumption or substitution, to shorten an offering period then in progress.
Participation Adjustment. If the number of unsold shares that are available for purchase under the ESPP is insufficient to permit exercise of all rights deemed exercised by all participating employees, a participation adjustment will be made, and the number of shares purchasable by all participating employees will be reduced proportionately. Any funds remaining in a participating employee’s account after such exercise are refunded to the employee, without interest.
Amendment. Our Board may amend the ESPP at any time and in any respect unless stockholder approval of the amendment in question is required under Section 423 of the IRC, any national securities exchange or system on which our common stock is then listed or reported, or under any other applicable laws, rules, or regulations.
Termination. Our Board may terminate the ESPP at any time and for any reason or for no reason, provided that no termination shall impair any rights of participating employees that have vested at the time of termination. Without further action of our Board, the ESPP shall terminate on April 22, 2031 or, if earlier, at such time as all shares of our common stock that may be made available for purchase under the ESPP have been issued.
Federal Income Tax Consequences
The ESPP, and the rights of participant employees to make purchases thereunder, qualify for treatment under the provisions of Sections 421 and 423 of the IRC. Under these provisions, no income will be taxable to a participant until the shares purchased under the ESPP are sold or otherwise disposed of.
Upon sale or other disposition of the shares, the participant will generally be subject to tax and the amount of the tax will depend upon the holding period. If the shares are sold or otherwise disposed of more than two years from the first day of the relevant offering period (and more than one year from the date the shares are purchased), then the participant generally will recognize ordinary income measured as the lesser of:
Any additional gain should be treated as long-term capital gain.
If the shares are sold or otherwise disposed of before the expiration of this holding period, the participant will recognize ordinary income at the time of such disposition generally measured as the excess of the fair market value of the shares on the date the shares are purchased over the purchase price. Any additional gain or loss on such sale or disposition will be long-term or short-term capital gain or loss, depending on the holding period.
The Company is not entitled to a deduction for amounts taxed as ordinary income or capital gain to a participant except to the extent ordinary income is recognized by participants upon a sale or disposition of shares prior to the expiration of the holding period(s) described above. In all other cases, no deduction is allowed to the Company.
The foregoing tax discussion is a general description of certain expected federal income tax results under current law. No attempt has been made to address any state, local, foreign or estate and gift tax consequences that may arise in connection with participation in the ESPP.
Vote Required
The affirmative vote of the holders of shares of common stock representing a majority of the votes cast on the matter is required for the approval of the proposal.
THE BOARD
CONTENTS
APPENDIX
2021 EMPLOYEE STOCK PURCHASE PLAN
SELLAS LIFE SCIENCES GROUP, INC.
EMPLOYEE STOCK PURCHASE PLAN
The following constitute SAMPLE DESIGNATION (IF ANY) ADD 1ADD 2ADD 3ADD 4ADD 5ADD 6Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the provisionsdesignated areas. Your vote matters – here’s how to vote!You may vote online or by phone instead of mailing this card.OnlineGo to www.envisionreports.com/SLS or scan the QR code — login details are located in the shaded bar below.PhoneCall toll free 1-800-652-VOTE (8683) within the USA, US territories and CanadaSave paper, time and money! Sign up for electronic delivery at www.envisionreports.com/SLS q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q1.To Elect Two Class III Directors. Directors are elected by a plurality of the 2021 Employee Stock Purchase Plan (the “Plan”) of Sellas Life Sciences Group, Inc. (the “Company”).
1. Purpose. The purposevotes of the Planholders of shares present in person or represented by proxy and entitled to vote on the election of directors. Accordingly, the nominee receiving the highest number of affirmative votes will be elected. The nominees for Class III director to be considered at the annual meeting are John Varian and Angelos M. Stergiou. Shares represented by executed proxies will be voted, if authority to do so is to provide Employeesnot withheld, for the election of the Company and its Designated Subsidiaries with an opportunity to purchase Common Stockforegoing Class III Directors.For Withhold01- John Varian02- Angelos M. StergiouForAgainst Abstain2.To Ratify the Appointment by the Audit Committee of Moss Adams LLP as our Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 2022. A majority of the Company. Itvotes cast is required for the intentionratification of the Company to have the Plan qualifyappointment of Moss Adams LLP as an “Employee Stock Purchase Plan” under Section 423 of the Code. The provisions of the Plan shall, accordingly, be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code.
2. Definitions.
(a) “Board” shall mean the Board of Directors of the Company, or a committee of the Board of Directors named by the Board to administer the Plan.
(b) “Code” shall mean the Internal Revenue Code of 1986, as amended, including any successor statute, regulation and guidance thereto.
(c) “Common Stock” shall mean the common stock, $0.0001 par value per share, of the Company.
(d) “Company” shall mean Sellas Life Sciences Group, Inc., a Delaware corporation.
(e) “Compensation” shall mean the regular rate of salary or wages received by the Employee from the Company or a Designated Subsidiary that is taxable income for federal income tax purposes or applicable tax law, including payments for overtime and shift premium, but excluding incentive compensation, incentive payments, bonuses, commissions, relocation, expense reimbursements, tuition or other reimbursements or compensation received from the Company or a Designated Subsidiary.
(f) “Continuous Status as an Employee” shall mean the absence of any interruption or termination of service as an Employee. Continuous Status as an Employee shall not be considered interrupted in the case of a leave of absence agreed to in writing by the Company, provided that such leave is for a period of not more than ninety (90) days or reemployment upon the expiration of such leave is guaranteed by contract or statute.
(g) “Contributions” shall mean all amounts credited to the account of a participant pursuant to the Plan.
(h) “Designated Subsidiaries” shall mean the Subsidiaries which have been designated by the Board from time to time in its sole discretion as eligible to participate in the Plan.
(i) “Employee” shall mean any person who is employed by the Company or one of its Designated Subsidiaries for tax purposes and who is customarily employed for at least twenty (20) hours per week and more than five (5) months in a calendar year by the Company or one of its Designated Subsidiaries.
(j) “Exercise Date” shall mean the last business day of each Offering Period of the Plan.
(k) “Exercise Price” shall mean with respect to an Offering Period, an amount equal to 85% of the fair market value (as defined in Section 7(b)) of a share of Common Stock on the Offering Date or on the Exercise Date, whichever is lower.
(l) “Offering Date” shall mean the first business day of each Offering Period of the Plan.
(m) “Offering Period” shall mean a period of six months as set forth in Section 4 of the Plan.
(n) “Plan” shall mean this Sellas Life Sciences Group, Inc. Employee Stock Purchase Plan.
(o) “Subsidiary” shall mean a corporation, domestic or foreign, of which not less than 50% of the voting shares are held by the Company or a Subsidiary, whether or not such corporation now exists or is hereafter organized or acquired by the Company or a Subsidiary.
3. Eligibility.
(a) Any person who has been continuously employed as an Employee for one (1) month as of the Offering Date of a given Offering Period shall be eligible to participate in such Offering Period under the Plan and further, subject to the requirements of Section 5(a) and the limitations imposed by Section 423(b) of the Code. All Employees granted options under the Plan with respect to any Offering Period will have the same rights and privileges except for any differences that may be permitted pursuant to Section 423.
(b) Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the Plan (i) if, immediately after the grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own stock and/or hold outstanding options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any Subsidiary of the Company or (ii) which permits his or her rights to purchase stock under all employee stock purchase plans (described in Section 423 of the Code) of the Company and its Subsidiaries to accrue at a rate which exceeds $25,000 of fair market value of such stock as defined in Section 7(b) (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time. In addition, the maximum number of shares of Common Stock that may be purchased by any participant during an Offering Period shall equal the lesser of (i) 5,000 shares of Common Stock or (ii) $25,000 divided by the fair market value of the Common Stock on the first trading day of such Offering Period, which price shall be adjusted if the price per share is adjusted pursuant to Section 18. Any option granted under the Plan shall be deemed to be modified to the extent necessary to satisfy this Section 3(b).
4. Offering Periods. The Plan shall be implemented by a series of Offering Periods, with a new Offering Period commencing on March 15 and September 15 of each year or the first business day thereafter (or at such other time or times as may be determined by the Board).
5. Participation.
(a) An eligible Employee may become a participant in the Plan by completing an Enrollment Form provided by the Company and filing it with the Company or its designee at least ten (10) days prior to the applicable Offering Date, unless a later time for filing the Enrollment Form is set by the Board for all eligible Employees with respect to a given Offering Period. The Enrollment Form and its submission may be electronic as directed by the Company. The Enrollment Form shall set forth the percentage of the participant’s Compensation (which shall be not less than one percent (1%) and not more than twenty percent (20%) to be paid as Contributions pursuant to the Plan.
(b) Payroll deductions shall commence with the first payroll following the Offering Date, unless a later time is set by the Board with respect to a given Offering Period, and shall end on the last payroll paid on or prior to the Exercise Date of the Offering Period to which the Enrollment Form is applicable, unless sooner terminated as provided in Section 10.
6. Method of Payment of Contributions.
(a) Each participant shall elect to have payroll deductions made on each payroll during the Offering Period in an amount not less than one percent (1%) and not more than twenty percent (20%) of such participant’s Compensation on each such payroll (or such other percentage as the Board may establish from time to time before an Offering Date). All payroll deductions made by a participant shall be credited to his or her account under the Plan. A participant may not make any additional payments into such account.
A participant may discontinue his or her participation in the Plan as provided in Section 10, or, on one occasion only during the Offering Period, may decrease, but may not increase, the rate of his or her Contributions during the Offering Period by completing and filing with the Company a new Enrollment Form authorizing a change in the deduction rate. The change in rate shall be effective as of the beginning of the next payroll period following the date of filing of the new Enrollment Form, if the Enrollment Form is submitted at least ten (10) days prior to such date, and, if not, as of the beginning of the next succeeding payroll period.
(b) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b), a participant’s payroll deductions may be decreased to 0% at such time during any Offering Period which is scheduled to end during the current calendar year that the aggregate of all payroll deductions accumulated with respect to such Offering Period and any other Offering Period ending within the same calendar year equals $21,250. Payroll deductions shall recommence at the rate provided in such participant’s Enrollment Form at the beginning of the first Offering Period which is scheduled to end in the following calendar year, unless terminated by the participant as provided in Section 10.
7. Grant of Option.
(a) On the Offering Date of each Offering Period, each eligible Employee participating in such Offering Period shall be granted an option to purchase on the Exercise Date of such Offering Period a number of shares of the Common Stock determined by dividing such Employee’s Contributions accumulated prior to such Exercise Date and retained in the participant’s account as of the Exercise Date by the applicable Exercise Price; provided however, that such purchase shall be subject to the limitations set forth in Sections 3(b) and 12. The fair market value of a share of the Common Stock shall be determined as provided in Section 7(b).
(b) The fair market value of the Common Stock on a given date shall be (i) if the Common Stock is listed on a national securities exchange or traded in the over-the-counter market and sales prices are regularly reported for the Common Stock, the closing or last sale price of the Common Stock for such date (or, in the event that the Common Stock is not traded on such date, on the immediately preceding trading date), on the composite tape or other comparable reporting system; or (ii) if the Common Stock is not listed on a national securities exchange and such price is not regularly reported, the mean between the bid and asked prices per share of the Common Stock at the close of trading in the over-the-counter market.
8. Exercise of Option. Unless a participant withdraws from the Plan as provided in Section 10, his or her option for the purchase of shares will be exercised automatically on the Exercise Date of the Offering Period, and the maximum number of full shares subject to the option will be purchased for him or her at the applicable Exercise Price with the accumulated Contributions in his or her account. If a fractional number of shares results, then such number shall be rounded down to the next whole number and any unapplied cash shall be carried forward to the next Exercise Date, unless the participant requests a cash payment. The shares purchased upon exercise of an option hereunder shall be deemed to be transferred to the participant on the Exercise Date. During a participant’s lifetime, a participant’s option to purchase shares hereunder is exercisable only by him or her.
9. Delivery. Upon the written request of a participant, certificates representing the shares purchased upon exercise of an option will be issued as promptly as practicable after the Exercise Date of each Offering Period to participants who wish to hold their shares in certificate form, except that the Board may determine that such shares shall be held for each participant’s benefit by a broker designated by the Board. Any payroll deductions accumulated in a participant’s account which are not sufficient to purchase a full Share shall be retained in the participant’s account for the subsequent Offering Period, subject to earlier withdrawal by the participant as provided in Section 10 below. Any other amounts left over in a participant’s account after an Exercise Date shall be returned to the participant.
10. Withdrawal; Termination of Employment. A participant may withdraw all but not less than all the Contributions credited to his or her account under the Plan at any time prior to the Exercise Date of the Offering Period by giving written notice to the Company or its designee. All of the participant’s Contributions credited to his or her account will be paid to him or her promptly after receipt of his or her notice of withdrawal and his or her optionour independent registered public accounting firm for the current period will be automatically terminated, and no further Contributions for the purchase of shares will be made during the Offering Period.
(a) Upon termination of the participant’s Continuous Status as an Employee prior to the Exercise Date of the Offering Period for any reason, including retirement or death, the Contributions credited to his or her account will be returned to him or her or, in the case of his or her death, to the person or persons entitled thereto under Section 14, and his or her option will be automatically terminated.
(b) In the event an Employee fails to remain in Continuous Status as an Employee for at least 20 hours per week during the Offering Period in which the Employee is a participant, he or she will be deemed to have elected to withdraw from the Plan and the Contributions credited to his or her account will be returned to him or her and his or her option terminated.
A participant’s withdrawal from an Offering Period will not have any effect upon his or her eligibility to participate in a succeeding offering or in any similar plan which may hereafter be adopted by the Company.
11. Interest. No interest shall accrue on the Contributions of a participant in the Plan.
12. Stock.
(a) The maximum number of shares of Common Stock which shall be made available for sale under the Plan shall be 300,000 shares, subject to adjustment upon changes in capitalization of the Company as provided in Section 18. If the total number of shares which would otherwise be subject to options granted pursuant to Section 7(a) on the Offering Date of an Offering Period exceeds the number of shares then available under the Plan (after deduction of all shares for which options have been exercised), the Company shall make a pro rata allocation of the shares remaining available for option grants in as uniform a manner as shall be practicable and as it shall determine to be equitable. Any amounts remaining in an Employee’s account not applied to the purchase of shares pursuant to this Section 12 shall be refunded on or promptly after the Exercise Date. In such event, the Company shall give written notice of such reduction of the number of shares subject to the option to each Employee affected thereby and shall similarly reduce the rate of Contributions, if necessary.
(b) The participant will have no interest or voting right in shares covered by his or her option until such option has been exercised.
13. Administration. The Board shall supervise and administer the Plan and shall have full power to adopt, amend and rescind any rules deemed desirable and appropriate for the administration of the Plan and not inconsistent with the Plan, to construe and interpret the Plan, to correct any defect or supply any omission or reconcile any inconsistency or ambiguity in the Plan and to make all other determinations necessary or advisable for the administration of the Plan, including without limitation, adopting subplans applicable to particular Designated Subsidiaries or locations, which subplans may be designed to be outside the scope of Section 423 of the Code..
14. Designation of Beneficiary. A participant may designate a beneficiary who is to receive any shares and cash, if any, from the participant’s account under the Plan in the event of such participant’s death subsequent to the end of the Offering Period but prior to delivery to him or her of such shares and cash. In addition, a participant may designate a beneficiary who is to receive any cash from the participant’s account under the Plan in the event of such participant’s death prior to the Exercise Date of the Offering Period. If a participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective. Beneficiary designations shall be made either in writing or by electronic delivery as directed by the Company.
(a) Such designation of beneficiary may be changed by the participant (and his or her spouse, if any) at any time by submission of the required notice, which may be electronic. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant’s death, the Company shall deliver such shares and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
15. Transferability. Neither Contributions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 14) by the participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds in accordance with Section 10.
16. Use of Funds. All Contributions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such Contributions.
17. Reports. Individual accounts will be maintained for each participant in the Plan. Statements of account will be given to participating Employees promptly following the Exercise Date, which statements will set forth the amounts of Contributions, the per share purchase price, the number of shares purchased and the remaining cash balance, if any.
18. Adjustments upon Changes in Capitalization. Subject to any required action by the stockholders of the Company, the number of shares of Common Stock covered by unexercised options under the Plan and the number of shares of Common Stock which have been authorized for issuance under the Plan but are not yet subject to options under Section 12(a) (collectively, the “Reserves”), the maximum number of shares of Common Stock that may be purchased by a participant in an Offering Period set forth in Section 3(b) as well as the price per share of Common Stock covered by each unexercised option under the Plan, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock. Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive.
In the event of the proposed dissolution or liquidation of the Company, an Offering Period then in progress will terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board. In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger, consolidation or other capital reorganization of the Company with or into another corporation, each option outstanding under the Plan shall be assumed or an equivalent option shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation, unless the Board determines, in the exercise of its sole discretion and in lieu of such assumption or substitution, to shorten the Offering Period then in progress by setting a new Exercise Date (the “New Exercise Date”). If the Board shortens the Offering Period then in progress in lieu of assumption or substitution in the event of a merger or sale of assets, the Board shall notify each participant in writing, at least ten days prior to the New Exercise Date, that the Exercise Date for his or her option has been changed to the New Exercise Date and that his or her option will be exercised automatically on the New Exercise Date, unless prior to such date he or she has withdrawn from the Offering Period as provided in Section 10. For purposes of this section, an option granted under the Plan shall be deemed to be assumed if, following the sale of assets, merger or other reorganization, the option confers the right to purchase, for each share of Common Stock subject to the option immediately prior to the sale of assets, merger or other reorganization, the consideration (whether stock, cash or other securities or property) received in the sale of assets, merger or other reorganization by holders of Common Stock for each share of Common Stock held on the effective date of such transaction (and if such holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock); provided, however, that if such consideration received in such transaction was not solely common stock of the successor corporation or its parent (as defined in Section 424(e) of the Code), the Board may, with the consent of the successor corporation, provide for the consideration to be received upon exercise of the option to be solely common stock of the successor corporation or its parent equal in fair market value to the per share consideration received by holders of Common Stock in the sale of assets, merger or other reorganization.
The Board may, if it so determines in the exercise of its sole discretion, also make provision for adjusting the Reserves, as well as the price per share of Common Stock covered by each outstanding option, in the event that the Company effects one or more reorganizations, recapitalizations, rights offerings or other increases or reductions of shares of its outstanding Common Stock, and in the event of the Company being consolidated with or merged into any other corporation.
19. Amendment or Termination.
(a) The Board may at any time terminate or amend the Plan. Except as provided in Section 18, no such termination may affect options previously granted, nor may an amendment make any change in any option theretofore granted which adversely affects the rights of any participant provided that an Offering Period may be terminated by the Board on an Exercise Date or by the Board’s setting a new Exercise Date with respect to an Offering Period then in progress if the Board determines that termination of the Offering Period is in the best interests of the Company and the stockholders or if continuation of the Offering Period would cause the Company to incur adverse accounting charges in the generally-accepted accounting rules applicable to the Plan. In addition, to the extent necessary to comply with Section 423 of the Code (or any successor rule or provision or any applicable law or regulation), the Company shall obtain stockholder approval in such a manner and to such a degree as so required.
(b) Without stockholder consent and without regard to whether any participant rights may be considered to have been adversely affected, the Board shall be entitled to change the Offering Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company’s processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each participant properly correspond with amounts withheld from the participant’s Compensation, and establish such other limitations or procedures as the Board determines in its sole discretion advisable that are consistent with the Plan.
20. Notices. All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.
21. Conditions upon Issuance of Shares. Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law.
22. Information Regarding Disqualifying Dispositions. By electing to participate in the Plan, each participant agrees to provide any information about any transfer of shares of Common Stock acquired under the Plan that occurs within two years after the first business day of the Offering Period in which such shares were acquired as may be requested by the Company or any Subsidiaries in order to assist it in complying with the tax laws.
23. Right to Terminate Employment. Nothing in the Plan or in any agreement entered into pursuant to the Plan shall confer upon any Employee the right to continue in the employment of the Company or any Subsidiary, or affect any right which the Company or any Subsidiary may have to terminate the employment of such Employee.
24. Rights as a Stockholder. Neither the granting of an option nor a deduction from payroll shall constitute an Employee the owner of shares covered by an option. No Employee shall have any right as a stockholder unless and until an option has been exercised, and the shares underlying the option have been registered in the Company’s share register.
25. Term of Plan. The Plan became effective upon its adoption by the Board on April 22, 2021 and shall continue in effect through April 22, 2031, unless sooner terminated under Section 19.
26. Applicable Law. This Plan shall be governed in accordance with the laws of the State of Delaware, applied without giving effect to any conflict-of-law principles.
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1 U P X 01 - David A. Scheinberg For Withhold 3. Tofiscal year.3.To approve, on a non-binding advisory basis, the compensation of our Named Executive Officers. These proposals callThis proposal calls for a non-binding, advisory vote, and accordingly there is no “required vote” that would constitute approval. However, our Board of Directors, including our compensation committee, values the opinions of our stockholders and we will consider our stockholders’ concerns to the extent there are a substantial number of votes cast against the executive officer compensation as disclosed in this proxy statement and evaluate what actions may be appropriate to address those concerns. 2. To Ratify the Selection by the Audit Committee of Moss Adams LLP as our Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 2021. The affirmative vote of the holders of shares of common stock representing a majority of the votes cast on the matter is required for the ratification of the selection of Moss Adams LLP as our independent registered public accounting firm for the current fiscal year. Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. + + Proposals — The Board of Directors recommends a v A ote FOR all the nominees listed and FOR Proposals 2, 3 and 4. Pleaseconcerns.Please sign exactly as your name(s) appear(s) hereon. All holders must sign. When signing in a fiduciary capacity, please indicate full title as such. If a corporation or partnership, please sign in full corporate or partnership name by authorized person. Dateperson.Date (mm/dd/
reverse side of this form. Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/SLS q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q Proxy — SELLAS Life Sciences Group, Inc. PROXY FOR 20212022 ANNUAL MEETING OF STOCKHOLDERS THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SELLAS LIFE SCIENCES GROUP, INC. AND MAY BE REVOKED BY THE STOCKHOLDER PRIOR TO ITS EXERCISE. The undersigned stockholder of SELLAS Life Sciences Group, Inc., a Delaware corporation, acknowledges receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement, each dated April 23, 2021.25, 2022. The undersigned stockholder hereby also designates Angelos M. Stergiou, President and Chief Executive Officer, Barbara A. Wood, Executive Vice President, Secretary and General Counsel, or any of them, as proxies and attorneys-in-fact, with full power to each other of substitution, on behalf and in the name of the undersigned, to represent the undersigned at the 20212022 Annual Meeting of Stockholders of SELLAS Life Sciences Group, Inc. to be held on Tuesday,Wednesday, June 8, 2021,2022, at 8:30 a.m., EDT, virtually via the internet and at any adjournment thereof, and to vote all shares of Common Stock which the undersigned would be entitled to vote, if then and there personally present, on the matters set forth on the reverse side. THE SHARES PRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO CONTRARY DIRECTION IS INDICATED, WILL BE VOTED “FOR” THE NOMINEES NAMED IN PROPOSAL 1 AND “FOR” PROPOSALS 1, 2 3 AND 4,3, AND AS SAID PROXIES (OR ANY OF THEM) DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY POSTPONEMENT OR ADJOURNMENT THEREOF. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE NOMINEES NAMED IN PROPOSAL 1 AND “FOR” PROPOSALS 1, 2 3 AND 4.3. CONTINUED AND TO BE SIGNED ON REVERSE SIDE Proxy — SELLAS Life Sciences Group, Inc. qIF
1 U P X 01 - David A. Scheinberg For Withhold 3. Tothe current fiscal year.3.To approve, on a non-binding advisory basis, the compensation of our Named Executive Officers. These proposals callThis proposal calls for a non-binding, advisory vote, and accordingly there is no “required vote” that would constitute approval. However, our Board of Directors, including our compensation committee, values the opinions of our stockholders and we will consider our stockholders’ concerns to the extent there are a substantial number of votes cast against the executive officer compensation as disclosed in this proxy statement and evaluate what actions may be appropriate to address those concerns. 2. To Ratify the Selection by the Audit Committee of Moss Adams LLP as our Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 2021. The affirmative vote of the holders of shares of common stock representing a majority of the votes cast on the matter is required for the ratification of the selection of Moss Adams LLP as our independent registered public accounting firm for the current fiscal year. Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. + + Proposals — The Board of Directors recommends a v A ote FOR all the nominees listed and FOR Proposals 2, 3 and 4. Pleaseconcerns.Please sign exactly as your name(s) appear(s) hereon. All holders must sign. When signing in a fiduciary capacity, please indicate full title as such. If a corporation or partnership, please sign in full corporate or partnership name by authorized person. Dateperson.Date (mm/dd/yyyy) — Please print date below. Signaturebelow.Signature 1 — Please keep signature within the box. Signaturebox.Signature 2 — Please keep signature within the box. B Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below qIF
— SELLAS Life Sciences Group, Inc. PROXY FOR 20212022 ANNUAL MEETING OF STOCKHOLDERS THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SELLAS LIFE SCIENCES GROUP, INC. AND MAY BE REVOKED BY THE STOCKHOLDER PRIOR TO ITS EXERCISE. The undersigned stockholder of SELLAS Life Sciences Group, Inc., a Delaware corporation, acknowledges receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement, each dated April 23, 2021.25, 2022. The undersigned stockholder hereby also designates Angelos M. Stergiou, President and Chief Executive Officer, Barbara A. Wood, Executive Vice President, Secretary and General Counsel, or any of them, as proxies and attorneys-in-fact, with full power to each other of substitution, on behalf and in the name of the undersigned, to represent the undersigned at the 20212022 Annual Meeting of Stockholders of SELLAS Life Sciences Group, Inc. to be held on Tuesday,Wednesday, June 8, 2021,2022, at 8:30 a.m., EDT, virtually via the internet and at any adjournment thereof, and to vote all shares of Common Stock which the undersigned would be entitled to vote, if then and there personally present, on the matters set forth on the reverse side. THE SHARES PRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO CONTRARY DIRECTION IS INDICATED, WILL BE VOTED “FOR” THE NOMINEES NAMED IN PROPOSAL 1 AND “FOR” PROPOSALS 1, 2 3 AND 4,3, AND AS SAID PROXIES (OR ANY OF THEM) DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY POSTPONEMENT OR ADJOURNMENT THEREOF. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE NOMINEES NAMED IN PROPOSAL 1 AND “FOR” PROPOSALS 1, 2 3 AND 4.3. CONTINUED AND TO BE SIGNED ON REVERSE SIDE Proxy — SELLAS Life Sciences Group, Inc. qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q