☐
April 23, 2021
28, 2023
| | | | Very truly yours, | |
| | | | | |
| | | | Angelos M. Stergiou, M.D., Sc.D. h.c. | |
| | | | President and Chief Executive Officer | |
PURPOSES:
To the Stockholders of SELLAS Life Sciences Group, Inc.: You are invited to attend the 2023 Annual Meeting of Stockholders (“2023 Annual Meeting”) of SELLAS Life Sciences Group, Inc. (“SELLAS,” “we,” “us,” “our,” or “Company”) on June 20, 2023, at 8:30 a.m. Eastern Time. The 2023 Annual Meeting will be held exclusively online via the Internet as a live webcast at www.meetnow.global/M46V2FV. There is no physical location for the 2023 Annual Meeting. For further information about the virtual annual meeting, please review the proxy materials beginning on page 1 below. The 2023 Annual Meeting will be held for the following purposes: 1. To elect two (2) Class I directors to serve on our Board of Directors for a three-year term expiring on the date on which our annual meeting of stockholders is held on 2026; 2. To ratify the appointment by our Audit Committee of Moss Adams LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023; 3. To approve an amendment to the Company’s 2019 Equity Incentive Plan (the “2019 Equity Plan”) to increase the number of shares of Common Stock authorized for issuance under the 2019 Equity Plan by 3,000,000 shares and to delete the reference to the evergreen provision which expired on January 2, 2023 from the 2019 Equity Plan; 4. To approve a proposed amendment to the Company’s Amended and Restated Certificate of Incorporation to reflect new Delaware law provisions regarding officer exculpation; 5. To approve, on a non-binding advisory basis, the compensation of the Company’s named executive officers; and 6. To transact such other business as may be properly brought before the annual meeting and any adjournment or postponement thereof. The proposals are described in more detail in this Proxy Statement, which we encourage you to read carefully and in its entirety before voting. The close of business on April 25, 2023 has been fixed as |
WHO MAY VOTE:
You may vote if you were the record ownerdate for determining those holders of SELLAS common stock entitled to receive notice of and vote at the Company’s2023 Annual Meeting or any adjournment or postponement thereof. Accordingly, only record holders of SELLAS common stock at the close of business on Tuesday, April 13, 2021.that date are entitled to notice of and to vote at the 2023 Annual Meeting and at any adjournments or postponements thereof. A list of stockholders of record will be available at the 20212023 Annual Meeting and, during the 10 days prior to the 2021 Annual Meeting,annual meeting, at our principal executive offices located at Times Square Tower, 7 Times Square, Suite 2503, New York, NYNew York 10036.
All stockholders
| | | | By Order of the Board of Directors, | |
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| | | | Barbara A. Wood | |
| | | | Executive Vice President, General Counsel and Corporate Secretary | |
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i
This20, 2023 at 8:30 a.m. (Eastern Time) via Live Webcast
This Proxy Statement relates to the solicitationThe Notice of proxies by our Board of Directors for use at the 2021 Annual Meeting.
On or about April 26, 2021, we intend to begin sending to our stockholders the Important Notice Regarding theInternet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy statementthis Proxy Statement and the Annual Report on Form 10-K for our 2021the fiscal year ended December 31, 2022 (“2023 Annual Report”) is first being mailed to stockholders of record on or about May 5, 2023.
soliciting my proxy?
Why Did I Receive a Notice in the Mail Regarding the Internet Availability of Proxy Materials Insteadinstead of a Full Setfull set of Proxy Materials?
proxy materials?
The 2021
| By email to Computershare Subject line must be: Legal Proxy Forward the email from your intermediary or attach an image of your proof of ownership to: legalproxy@computershare.com | | | By mail to Computershare Computershare SELLAS Life Sciences Group, Inc. Legal Proxy P.O. Box 43001 Providence, RI 02940-3001 | |
If you attend the 2023 Annual Meeting as a “Guest,” then you will not be permitted to submit questions during the meeting.
vote?
| | By | | ||
| | By | | ||
| | By Proxy by | |
19, 2023.
If you are a beneficial owner, your deadline for submitting your vote before the Annual Meeting is 11:59 p.m. Eastern Time on Monday, June 19, 2023. If you wish to cast your vote during the 2023 Annual Meeting, you must obtain a Legal Proxy from your broker or other nominee and register with Computershare in advance of the meeting by following the instructions explained above. If you have already voted your shares and then obtain a Legal Proxy and register with Computershare, your original vote will be invalidated and you will be required to vote again during the Annual Meeting for your vote to be counted.
| Proposal 1: | | | To elect | |
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Proposal 2: | | | To ratify the appointment by our Audit Committee of Moss Adams LLP as our independent registered public accounting firm for the fiscal year ending December 31, | |
| Proposal 3: | | | To approve an amendment to the Company’s 2019 Equity Incentive Plan (“2019 Equity Plan”) to increase the number of shares of Common Stock authorized for issuance by 3,000,000 shares and to delete the reference to the evergreen provision, which expired on January 2, 2023 from the 2019 Equity Plan; | |
| Proposal 4: | | | To approve a | |
| Proposal 5: | | | Non-binding advisory | |
officers. | |||||
proposals?
When are stockholder proposals and director nominations due for next year’s annual meeting?
Proposals of stockholders intended to be presented at our 2022 annual meeting of stockholders pursuant to Rule 14a-8 promulgated under the Exchange Act must be received by us at our principal offices, Times Square Tower, 7 Times Square, Suite 2503, New York, New York 10036, Attention: Corporate Secretary, no later than December 24, 2021, the date that is 120 days prior to the first anniversary of the date of this proxy statement, in order to be included in the proxy statement and proxy card relating to that meeting.
If a stockholder wishes to present a proposal at our 2022 annual meeting, but does not wish to have the proposal considered for inclusion in our proxy statement and proxy card, pursuant to the advance notice provision in our bylaws, such stockholder must give written notice to our Corporate Secretary at our principal executive offices at the address noted above. The Corporate Secretary must receive such notice no earlier than February 8, 2022, and no later than March 10, 2022, provided that if the date of the 2022 annual meeting of stockholders is held before June 8, 2022, such notice must instead be received by the Corporate Secretary no earlier than the 120th day prior to the 2022 annual meeting of stockholders and not later than the close of business on the 90th day prior to the 2022 annual meeting of stockholders in order for such notice to be timely.
I 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” (i) will have no effect on the voting on Proposals 1, 3 and 5 and (ii) will have the proposals referenced above.
effect of votes against Proposal 4. Brokerage firms have authority to vote customers’ unvoted shares held by the firms in “street name” on Proposal 2. If a broker does not exercise this authority, such broker non-votes will have no effect on the results of this vote; abstentions will have no effect on the results of Proposal 2.
What proxy materials are available on the Internet?
This proxy statement and the annual report to stockholders are available at http://www.envisionreports.com/SLS.
proxy card?
Name of Beneficial Owner | | | Number | | | Percentage of Shares Beneficially Owned | | ||||||
Angelos M. Stergiou, President, Chief Executive Officer and Director | | | 213,818(1) | | | | | | * | | | ||
Barbara A. Wood, Executive Vice President, General Counsel and Corporate Secretary | | | 78,592(2) | | | | | | * | | | ||
Robert Francomano, Chief Commercial Officer | | | 34,167(3) | | | | | | * | | | ||
Jane Wasman, Chair of the Board | | | 23,855(5) | | | | | | * | | | ||
David L. Scheinberg, Director | | | 24,037(4) | | | | | | * | | | ||
Robert Van Nostrand, Director | | | 23,855(5) | | | | | | * | | | ||
John Varian, Director | | | 23,855(5) | | | | | | * | | | ||
Katherine Bach Kalin, Director | | | | | — | | | | | | * | | |
All current | | | | 464,350(6) | | | | | 1.6 | | |
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, 2021.28, 2023. 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 | ✔* | ✔ | ✔ |
*Denotes Chair of Committee
below.
Robert L. Van Nostrand. 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 January 2010 to July 2010. Prior to joining Aureon Laboratories, Mr. Van Nostrand served as Executive Vice President and Chief Financial Officer of AGI Dermatics, a private biotechnology company, from July 2007 to September 2008, when the company was acquired. Between 1986 and 2007, Mr. Van Nostrand held various executive and other management positions, including Chief Compliance Officer and Chief Financial Officer, at OSI Pharmaceuticals, Inc., or OSI. (“OSI”). Prior to joining OSI, Mr. Van Nostrand served in a managerial position with the accounting firm, Touche Ross & Co., currently Deloitte. Mr. Van Nostrand is a member of the board of NewYorkBIO where he previously served as Chairman. Mr. Van Nostrand holds a B.S. in Accounting from Long Island University, New York and completed advanced management studies at the Wharton School of the University of Pennsylvania. He is a Certified Public Accountant. The Company believes Mr. Van Nostrand’s vast board and industry experience in life sciences, his qualification as a financial expert, as well as his experience in transaction structuring and risk management qualifies him to serve on our Board.
documents.
In light of the adoption by the SEC in October 2022 of new Rule 10D-1 under the Exchange Act implementing Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we are evaluating our clawback policy and intend to make any appropriate revisions to the policy upon effectiveness of the updated Nasdaq listing standards applicable thereto.
2022.
Name | | | Age | | | Position | | | Term Expires | | | Audit Committee | | | Compensation Committee | | | Nominating And Corporate Governance Committee | | | Science Committee | | ||||||||||||
Jane Wasman | | | 66 | | | Chair of the Board | | | 2023 | | | | | ✔ | | | | | | ✔ | | | | | | ✔* | | | | | | | | |
Angelos M. Stergiou | | | 47 | | | Director, President and Chief Executive Officer | | | 2025 | | | | | | | | | | | | | | | | | | | | | | | ✔ | | |
David A. Scheinberg | | | 67 | | | Director | | | 2024 | | | | | | | | | | | ✔ | | | | | | | | | | | | ✔* | | |
Robert L. Van Nostrand | | | 66 | | | Director | | | 2023 | | | | | ✔ | | | | | | ✔* | | | | | | ✔ | | | | | | | | |
John Varian | | | 63 | | | Director | | | 2025 | | | | | ✔* | | | | | | | | | | | | ✔ | | | | | | ✔ | | |
Katherine Bach Kalin | | | 60 | | | Director | | | 2024 | | | | | | | | | | | ✔ | | | | | | ✔ | | | | | | | | |
Report of the Audit Committee of the Board of Directors
The Audit Committee of our Board of Directors, which consists entirely of directors who meet the independence and experience requirements of the Nasdaq Capital Market, has furnished the following report:
The Audit Committee assists our Board of Directors in overseeing and monitoring the integrity of our financial reporting process, compliance with legal and regulatory requirements and the quality of internal and external audit processes. This committee’s role and responsibilities are set forth in our charter adopted by our Board of Directors, which is available on our website at https://www.sellaslifesciences.com/investors/corporate-governance/default.aspx#section=documents. This committee reviews and reassesses our charter annually and recommends any changes to our Board of Directors for approval. The Audit Committee is responsible for overseeing our overall financial reporting process, and for the appointment, compensation, retention, and oversight of the work of Moss Adams LLP. In fulfilling its responsibilities for the financial statements for fiscal year December 31, 2020, the Audit Committee took the following actions:
Based on the Audit Committee’s review of the audited financial statements and discussions with management and Moss Adams LLP, the Audit Committee recommended to our Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 for filing with the SEC.
Members of the Company’s Audit Committee:
Messrs. John Varian and Robert L. Van Nostrand, and Ms. Jane Wasman.
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.
The functions of this committee include, among other things:
Our Nominating and Corporate Governance Committee also determines whether the nominee is independent for Nasdaq purposes, which determination is based upon applicable Nasdaq listing standards, applicable SEC rules and regulations and the advice of counsel, if necessary.
Our Nominating and Corporate Governance Committee believes that it is in the best position to identify, review, evaluate and select qualified candidates for Board membership, based on the comprehensive criteria for Board membership approved by the Board. The Nominating and Corporate Governance Committee meets to discuss and consider the candidates’ qualifications and then selects a nominee for recommendation to the Board by majority vote.
2022.
Name | | | Age | | | Position with the Company | |
Angelos M. Stergiou, M.D., Sc.D. h.c. | | 47 | | | President, Chief Executive Officer and Director | | |
Barbara A. Wood, Esq. | | 61 | | | Executive Vice President, General Counsel and Corporate Secretary | ||
John T. Burns | | 38 | | | Senior Vice President, | | |
Robert Francomano | | | 57 | | | Senior Vice President, Chief Commercial Officer | |
Esq.Esq. Ms. Wood has served as the Company’s Executive Vice President, General Counsel and Corporate Secretary since March 2018. Prior to joining the Company, Ms. Wood served as Senior Vice President, General Counsel and Corporate Secretary at IVERIC bio, Inc. (formerly known as Ophthotech Corporation) from November 2013 to February 2018. From January 2011 to November 2013, Ms. Wood practiced law at Wood Legal. From April 2001 to December 2010, Ms. Wood served in varying roles at OSI Pharmaceuticals, Inc., most recently as Senior Vice President, General Counsel and Corporate Secretary. Before joining OSI, Ms. Wood was a partner at the New York law firm of Squadron, Ellenoff, Plesent & Sheinfeld (now part of Hogan Lovells), focusing on mergers and acquisitions, biotechnology, licensing, securities and venture capital matters. Ms. Wood received her B.A. in Economics and Classics, magna cum laude, from Connecticut College and her J.D. from Columbia Law School where she was a Harlan Fiske Stone Scholar.
Dragan Cicic, M.D. Dr. CicicJohn T. Burns Mr. Burns has served as the Company’s Senior Vice President, Clinical Development of the CompanyChief Financial Officer 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.
John T. Burns2023. Mr. Burns haspreviously served as the Company’s Vice President, Finance, and Corporate Controller sincefrom December 2017 andto December 2020, as Vice President, Finance, and Corporate Controller and Principal Accounting Officer from January 2021 to December 2021 and as Senior Vice President, Finance, and Chief Accounting Officer sincefrom January 2021.2022 to January 2023. Mr. Burns has over 10 years’14 years of experience in finance and accounting. Mr. Burns joined the Company in May 2013 and has held various positions of increasing responsibility during his tenure. Prior to joining the Company, Mr. Burns was a Securities and Exchange Reporting Manager at Pixelworks, Inc. (NASDAQ: PXLW), and began his career in public accounting at Moss Adams LLP. Mr. Burns received a B.S.M. in Finance and Master of Accounting degree from Tulane University. He is an active Certified Public Accountant.
| | | Year | | | Salary ($) | | | Non-Equity Incentive Plan Compensation ($)(3) | | | Bonus ($) | | | Option Awards ($)(1) | | | Stock Awards ($)(2) | | | All Other Compensation ($) | | | Total ($) | | ||||||||||||||||||||||||
Angelos M. Stergiou, M.D., Sc.D. h.c. President and Chief Executive Officer | | | | | 2022 | | | | | | 593,500 | | | | | | 326,425 | | | | | | — | | | | | | 795,300 | | | | | | 234,960 | | | | | | 2,060(6) | | | | | | 1,952,245 | | |
| | | 2021 | | | | | | 565,100 | | | | | | 280,000 | | | | | | — | | | | | | 827,887 | | | | | | 158,000 | | | | | | 2,930(6) | | | | | | 1,833,917 | | | ||
Robert Francomano Chief Commercial Officer(5) | | | | | 2022 | | | | | | 339,728 | | | | | | 124,950 | | | | | | — | | | | | | 471,980 | | | | | | — | | | | | | 116,725(7) | | | | | | 1,053,383 | | |
Barbara Wood, Esq. Executive Vice President, General Counsel and Corporate Secretary | | | | | 2022 | | | | | | 425,000 | | | | | | 173,400 | | | | | | 20,000(4) | | | | | | 234,975 | | | | | | 69,420 | | | | | | 14,260(8) | | | | | | 937,055 | | |
| | | 2021 | | | | | | 404,700 | | | | | | 152,000 | | | | | | | | | | | | 330,107 | | | | | | 63,000 | | | | | | 14,530(9) | | | | | | 964,337 | | |
Year | Salary ($) | 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 | - | - | - | - | - | - | - |
Annual bonuses
goals.
Company through each such vesting date.
In September 2016, Private SELLAS entered into an employment agreement, or 2016 Stergiou Agreement, with Dr. Stergiou, President and Chief Executive Officer. The 2016 Stergiou Agreement was replaced and superseded in March 2019 by a new employment agreement, or the 2019 Stergiou Agreement, with Dr. Stergiou. Under 2016 Stergiou Agreement, which was governed by Bermuda law, Dr. Stergiou was entitled to an annual base salary of $400,000, net of all legally required applicable taxes, withholdings and deductions (subject to review and adjustment in the discretion of the Board or the compensation committee) and a discretionary annual cash bonus, with a target amount no less than 30% of Dr. Stergiou’s then effective base salary (subject to continued employment and the achievement of certain performance objectives established by the Board of Directors or compensation committee). The 2016 Stergiou Agreement also provided that Dr. Stergiou would receive a monthly housing allowance of $10,000, net of all legally required applicable taxes, withholdings and deductions, and would be eligible to receive an additional discretionary bonus as determined by the Company in its sole discretion.
The 2016 Stergiou Agreement did not have a specified term and either party could terminate such agreement by providing written notice at any time, with or without cause.
The 2019 Stergiou Agreement became effective as of July 1, 2019, at which time it replaced and superseded the 2016 Stergiou Agreement. The 2019 Stergiou Agreement has an initial two-year term unless terminated prior thereto (i) by us with cause (at any time) or without cause (upon at least 30 days’ prior written notice), or (ii) by Dr. Stergiou for good reason (upon at least 90 days prior written notice of the reason with a cure period of 30 days for us to correct the act or failure to act that constitutes good reason), or without good reason (upon at least 90 days prior written notice) or (iii) due to Dr. Stergiou’s death or disability. The 2019 Stergiou Agreement shall continue until terminated in accordance with its terms.
Dragan Cicic, M.D.
Outstanding Equity Awards At 2020 Fiscal Year-End
The following table discloses
Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable (1) | Option Exercise Price ($) (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 | ||||||||||||||||||
Potential Payments Upon Termination or Change of Control
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,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 | | | 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 | | | | | | 1,900 | | | | | | — | | | | | $ | 262.00 | | | | | | 3/13/2028 | | | | | | — | | | | | | — | | |
| | | 3/18/2019 | | | | | | 7,969 | | | | | | 531 | | | | | $ | 69.00 | | | | | | 3/18/2029 | | | | | | — | | | | | | — | | | ||
| | | 3/12/2020 | | | | | | 48,125 | | | | | | 21,875 | | | | | $ | 1.89 | | | | | | 3/12/2030 | | | | | | — | | | | | | — | | | ||
| | | 3/12/2020 | | | | | | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | | 95,000 | | | | | $ | 224,200 | | | ||
| | | 3/4/2021 | | | | | | 51,844 | | | | | | 66,656 | | | | | $ | 8.00 | | | | | | 3/4/2031 | | | | | | — | | | | | | — | | | ||
| | | 3/4/2021 | | | | | | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | | 9,875 | | | | | $ | 23,305 | | | ||
| | | 1/31/2022 | | | | | | — | | | | | | 165,000 | | | | | $ | 5.34 | | | | | | 1/31/2032 | | | | | | — | | | | | | — | | | ||
| | | 1/31/2022 | | | | | | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | | 33,000 | | | | | $ | 77,880 | | | ||
Robert Francomano | | | | | 3/14/2022 | | | | | | — | | | | | | 100,000 | | | | | $ | 5.23 | | | | | | 3/14/2032 | | | | | | — | | | | | | — | | |
Barbara A. Wood | | | | | 3/13/2018 | | | | | | 1,000 | | | | | | — | | | | | $ | 255.00 | | | | | | 3/14/2028 | | | | | | — | | | | | | — | | |
| | | 3/18/2019 | | | | | | 3,094 | | | | | | 206 | | | | | $ | 69.00 | | | | | | 3/18/2029 | | | | | | — | | | | | | — | | | ||
| | | 3/12/2020 | | | | | | 17,188 | | | | | | 7,812 | | | | | $ | 1.89 | | | | | | 3/12/2030 | | | | | | — | | | | | | — | | | ||
| | | 3/12/2020 | | | | | | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | | 35,000 | | | | | $ | 82,600 | | | ||
| | | 3/4/2021 | | | | | | 20,672 | | | | | | 26,578 | | | | | $ | 8.00 | | | | | | 3/4/2031 | | | | | | — | | | | | | — | | | ||
| | | 3/4/2021 | | | | | | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | | 3,937 | | | | | $ | 9,291 | | | ||
| | | 1/31/2022 | | | | | | — | | | | | | 48,750 | | | | | $ | 5.34 | | | | | | 1/31/2032 | | | | | | — | | | | | | — | | | ||
| | | 1/31/2022 | | | | | | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | | 9,750 | | | | | $ | 23,010 | | |
Year(a) | | | Summary Compensation Table Total for PEO(b) | | | Compensation Actually Paid To PEO(c) | | | Average Summary Compensation Table Total for Non-PEO NEOs(d) | | | Average Compensation Actually Paid to Non-PEO NEOs(e) | | | Value of Initial Fixed $100 Investment Based On Total Shareholder Return(f) | | | Net Loss (thousands)(g) | | ||||||||||||||||||
2022 | | | | $ | 1,952,245 | | | | | $ | 667,297 | | | | | $ | 995,219 | | | | | $ | 514,536 | | | | | $ | 42.68 | | | | | $ | (41,301) | | |
2021 | | | | $ | 1,833,917 | | | | | $ | 1,615,812 | | | | | $ | 911,937 | | | | | $ | 935,768 | | | | | $ | 95.18 | | | | | $ | (20,699) | | |
Year | | | Reported Summary Comp Table Total for PEO | | | Reported Value of Equity Awards(1) | | | Equity Award Adjustments(2) | | | Compensation Actually Paid to PEO | | ||||||||||||
2022 | | | | $ | 1,952,245 | | | | | $ | (1,030,260) | | | | | $ | (254,688) | | | | | $ | 667,297 | | |
2021 | | | | $ | 1,833,917 | | | | | $ | (985,887) | | | | | $ | 767,782 | | | | | $ | 1,615,812 | | |
Year | | | Year End Fair Value of Outstanding and Unvested Equity Awards Granted in the Year | | | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | | | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | | | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | | | Total Equity Award Adjustments | | |||||||||||||||
2022 | | | | $ | 413,468 | | | | | $ | (606,744) | | | | | $ | 28,600 | | | | | $ | (90,013) | | | | | $ | (254,688) | | |
2021 | | | | $ | 666,308 | | | | | $ | (46,816) | | | | | $ | 31,057 | | | | | $ | 117,233 | | | | | $ | 767,782 | | |
Year | | | Average Reported Summary Compensation Table Total for Non-PEO NEOs | | | Average Reported Value of Equity Awards(1) | | | Average Equity Award Adjustments(2) | | | Average Compensation Actually Paid to Non-PEO NEOs | | ||||||||||||
2022 | | | | $ | 995,219 | | | | | $ | (388,187) | | | | | $ | (92,496) | | | | | $ | 514,536 | | |
2021 | | | | $ | 911,937 | | | | | $ | (393,107) | | | | | $ | 416,938 | | | | | $ | 935,768 | | |
Year | | | Average Year End Fair Value of Outstanding and Unvested Equity Awards Granted in the Year | | | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | | | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | | | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | | | Total Average Equity Award Adjustments | | |||||||||||||||
2022 | | | | $ | 163,465 | | | | | $ | (229,926) | | | | | $ | 8,450 | | | | | $ | (34,484) | | | | | $ | (92,496) | | |
2021 | | | | $ | 265,680 | | | | | $ | 82,467 | | | | | $ | 12,383 | | | | | $ | 56,408 | | | | | $ | 416,938 | | |
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 ($)(2) | | | Stock Awards ($)(3) | | | Total ($)(4) | | ||||||||||||
Jane Wasman | | | | | 104,000 | | | | | | 33,701 | | | | | | 10,146 | | | | | | 147,847 | | |
Robert L. Van Nostrand | | | | | 74,000 | | | | | | 33,701 | | | | | | 10,146 | | | | | | 117,847 | | |
John Varian | | | | | 74,000 | | | | | | 33,701 | | | | | | 10,146 | | | | | | 117,847 | | |
David A. Scheinberg | | | | | 66,000 | | | | | | 33,701 | | | | | | 10,146 | | | | | | 109,847 | | |
Katherine Bach Kalin(5) | | | | | 19,000 | | | | | | 51,319 | | | | | | — | | | | | | 70,319 | | |
Our Board and
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 | | |
Equity Compensation Plan Information as of December 31, 2020
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 Stock | | | | | 1,273,099 | | | | | $ | 5.35(1) | | | | | | 640,961 | | |
2021 Employee Stock Purchase Plan | | | | | — | | | | | | N/A | | | | | | 274,911 | | |
Equity compensation plans not approved by security holders | | | | | | | | | | | | | | | | | | | |
None | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | | 1,294,619 | | | | | $ | 7.58 | | | | | | 915,872 | | |
DELINQUENT SECTION 16(a) REPORTS
Our records reflect that all reports which were required to be filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, were filed on a timely basis.
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 |
accounting firm.
| | | 2022 | | | 2021 | | ||||||
| | | (in thousands) | | |||||||||
Audit Fees(1) | | | | $ | 416 | | | | | $ | 403 | | |
Audit-related Fees(2) | | | | | 187 | | | | | | 157 | | |
Tax Fees(3) | | | | | 37 | | | | | | 37 | | |
All Other Fees | | | | | — | | | | | | — | | |
Total Fees | | | | $ | 640 | | | | | $ | 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
| | | 2022 | | | 2021 | | | 2020 | | |||||||||
Adjusted Gross Burn Rate as a % of Outstanding Shares(1) | | | | | 3.31% | | | | | | 2.37% | | | | | | 4.46% | | |
Adjusted Net Burn Rate as a % of Outstanding Shares(2) | | | | | 3.10% | | | | | | 2.37% | | | | | | 4.46% | | |
Name and Position | | | Number of shares subject to Stock Options | | | Number of shares subject to Restricted Stock Units | | ||||||
Named Executive Officers | | | | | 917,000 | | | | | | 304,625 | | |
All current executive officers as a group | | | | | 1,055,250 | | | | | | 352,100 | | |
All current directors who are not executive officers as a group | | | | | 151,000 | | | | | | 20,100 | | |
Each director nominee | | | | | — | | | | | | — | | |
Each associate of all directors, nominees and executive officers | | | | | — | | | | | | — | | |
Each person who received 5% of such awards | | | | | — | | | | | | — | | |
All employees who are not executive officers as a group | | | | | 430,950 | | | | | | 121,675 | | |
22
5
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
2021 EMPLOYEE STOCK PURCHASE PLAN
EMPLOYEE STOCK PURCHASE
The
1. Purpose. The purpose2023 Amended and Restated Equity Incentive Plan, have the following meanings:
2. Definitions.
(a) “Board” shall meanDirectors
(b) “election of directors to the Company).
(c) “
(d) “share.
(e) “Compensation” shall mean the regular rate of salary
(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,its Affiliates, provided that such leave isservices are not in connection with the offer or sale of securities in a capital raising transaction, and do not directly or indirectly promote or maintain a market for the Company’s or its Affiliates’ securities.
(g) “Contributions” shall mean all amounts credited toof the accountoutstanding voting stock 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 yearsingle transaction or a series of related transactions by a single entity other than a transaction to merely change the Companystate of incorporation.
(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
(l) “Offering Date” shall mean the first business day of each Offering Period22(e)(3) 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. Code.
(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
(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 stockemployee of the Company or of any Subsidiaryan Affiliate (including, without limitation, an employee who is also serving as an officer or director of the Company or (ii) which permits hisof an Affiliate), designated by the Administrator to be eligible to be granted one or her rights to purchase stockmore Stock Rights under all employee stock purchase plans (described in Section 423the Plan.
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) ifIf 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, if not applicable, the 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)system for the trading day on the applicable date and if such applicable date is not a trading day, the last market trading day prior to such date;
8. Exercisemarket for the most recent trading day on which Common Stock was traded on the applicable date and if such applicable date is not a trading day, the last market trading day prior to such date; and
meet the requirements of paragraphs (2), (3) and (4) of subsection (a) of Section 409A of the Code, to the extent applicable, and be operated in accordance with Section 409A so that any compensation deferred under any Stock-Based Award (and applicable investment earnings) shall not be included in income under Section 409A of the Code. Any ambiguities in the Plan shall be construed to effect the intent as described in this Paragraph 8.
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 Periodexercised by giving written notice to the Company or its designee. Alldesignee (in a form acceptable to the Administrator, which may include electronic notice), together with provision for payment 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 optionaggregate exercise price in accordance with this Paragraph for the current period willShares as to which the Option is being exercised, and upon compliance with any other condition(s) set forth in the Option Agreement. Such notice shall be automatically terminated,signed by the person exercising the Option (which signature may be provided electronically in a form acceptable to the Administrator), shall state the number of Shares with respect to which the Option is being exercised and no further Contributionsshall contain any representation required by the Plan or the Option Agreement. Payment of the exercise price for the purchase of shares willShares as to which such Option is being exercised shall be made during(a) in United States dollars in cash or by check; or (b) at the Offering Period.
(a) Upon terminationdiscretion 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 numberAdministrator, through delivery of shares of Common Stock held for at least six months (if required to avoid negative accounting treatment) having a Fair Market Value equal as of the date of the exercise to the aggregate cash exercise price for the number of Shares as to which the Option is being exercised; or (c) at the discretion of the Administrator, by having the Company retain from the Shares otherwise issuable upon exercise of the Option, a number of Shares having a Fair Market Value equal as of the date of exercise to the aggregate exercise price for the number of Shares as to which the Option is being exercised; or (d) at the
(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 ambiguitydays accrued 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 deathcurrent vesting period prior to the Exercise Datedate of the Offering Period. IfParticipant’s termination of service due to Disability.
(a) Such designationAdministrator, the cost of beneficiary maywhich examination shall be changedpaid for by the participant (and his or her spouse, if any) at any time by submission of the required notice, which may be electronic.Company.
15. Transferabilityand such Participant, in which case such procedure shall be used for such determination). Neither Contributions credited toIf requested, the Participant shall be examined by a participant’s account nor any rights with regardphysician selected or approved by the Administrator, the cost of which examination shall be paid for by the Company.
16. Use of Funds. All Contributions received or held by the Companyeffective under the Plan may be used by the Company for any corporate purpose, andSecurities Act of 1933, as amended, or (b) the Company shall nothave received an opinion of counsel satisfactory to it that an exemption from registration under such Act is then available, and (2) there shall have been compliance with all applicable state securities laws.”
17. Reports. Individual accounts will be maintained for each participantissued in compliance with the Plan. Statements of account will be given to participating Employees promptly followingSecurities Act without registration thereunder.
18. Adjustments upon Changes in Capitalization. Subject to any required action by the stockholdersdissolution or liquidation of the Company, all Options granted under this Plan which as of such date shall not have been exercised and all Stock Grants and Stock-Based Awards which have not been accepted, to the numberextent required under the applicable Agreement, will terminate and become null and void; provided, however, that if the rights of a Participant or a Participant’s Survivors have not otherwise terminated and expired, the Participant or the Participant’s Survivors will have the right immediately prior to such dissolution or liquidation to exercise or accept any Stock Right to the extent that the Stock Right is exercisable or subject to acceptance as of the date immediately prior to such dissolution or liquidation. Upon the dissolution or liquidation of the Company, any outstanding Stock-Based Awards shall immediately terminate unless otherwise determined by the Administrator or specifically provided in the applicable Agreement.
In the event the Corporate Transaction also constitutes a Change of Control, then all Stock Rights outstanding on the date of the proposed dissolution or liquidation of the Company, an Offering Period thenCorporate Transaction shall vest in progress will terminatefull immediately prior to the consummationoccurrence of the Change of Control, unless such proposed action, unless otherwise providedStock Rights are to be assumed or continued by the Board.acquiring or surviving entity in the Corporate Transaction as provided above, in which case such Stock Rights shall vest in full in the event the Participant is terminated without cause within 12 months following the occurrence of the Change of Control.
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 Commonnot settled) or cause a Participant to forfeit any Stock covered by each outstanding option,Right (whether or not vested) 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. ExceptCompany’s Clawback Policy 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 Periodeffect 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
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.
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1 U P X 01 - David A. Scheinberg For Withhold 3. To approve, on a non-binding advisory basis,
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 20212023 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, 2021.28, 2023. The undersigned stockholder hereby also designates Angelos M. Stergiou, M.D., Sc.D. h.c., President and Chief Executive Officer, and Barbara A. Wood, Executive Vice President, Secretary and General Counsel and Corporate Secretary, or anyeither 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 20212023 Annual Meeting of Stockholders of SELLAS Life Sciences Group, Inc. to be held on Tuesday, June 8, 2021,20, 2023, at 8:30 a.m., EDT, Eastern Time, virtually via the internetInternet 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, 4 AND 4,5, 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, 4 AND 4.5. 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 The 2021 Special Meeting of Stockholders of SELLAS Life Sciences Group, Inc. will be held on Tuesday, June 8, 2021 at 8:30 am local time, virtually via the internet at www.meetingcenter.io/287191590. To access the virtual meeting, you must have the information that is printed in the shaded bar located on the reverse side of this form. The password for this meeting is — SLS2021.
— SELLAS Life Sciences Group, Inc. PROXY FOR 20212023 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, 2021.28, 2023. The undersigned stockholder hereby also designates Angelos M. Stergiou, M.D., Sc.D. h.c., President and Chief Executive Officer, and Barbara A. Wood, Executive Vice President, Secretary and General Counsel and Corporate Secretary, or anyeither 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 20212023 Annual Meeting of Stockholders of SELLAS Life Sciences Group, Inc. to be held on Tuesday, June 8, 2021,20, 2023, at 8:30 a.m., EDT, Eastern Time, virtually via the internetInternet 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, 4 AND 4,5, 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, 4 AND 4.5. 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