UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
WASHINGTON, DC 20549
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934
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Filed by a Party other than the Registrant | ☐ | |
Check the appropriate box: |
☒ | Preliminary Proxy Statement | |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule | |
☐ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material Pursuant to |
Aptose Biosciences Inc.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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materials | ||
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) |
NOTICEAND PROXY STATEMENT
FORTHE
ANNUALAND SPECIAL MEETINGOF SHAREHOLDERS
TOBEHELDON JUNE 18, 2024
May , 2024
Letter from Our Chairman, President, and CEO
Dear Fellow Shareholders,
During 2023, Aptose advanced the company’s lead precision therapeutic tuspetinib (TUS) toward the goal of developing a tuspetinib-containing triple drug (“triplet”) combination therapy as a new standard of care for frontline therapy of patients with newly diagnosed acute myeloid leukemia (AML). In addition, despite challenges in the markets, we achieved key development timelines and executed on multiple fronts during 2023.
AML is a highly aggressive cancer of the bone marrow and blood, and there is a tremendous unmet need for a therapy that can extend survival of newly diagnosed AML patients and improve their quality of life. Newly diagnosed AML patients typically fail frontline (1L) therapies, and responses to subsequent salvage therapies in the relapsed or refractory (R/R) setting are decidedly limited. This highlights the need for a more effective triplet combination to increase survival in the frontline setting.
Current standard of care (SOC) treatment in the 1L setting for many newly diagnosed AML patients includes a doublet combination of venetoclax and a hypomethylating agent (VEN+HMA). Exploratory triplet therapies using current agents added to VEN+HMA have achieved notable response rates but are inadequate because of toxicities and the limited activity across subpopulations of AML patients. In contrast, tuspetinib is a convenient, orally administered, once daily kinase inhibitor with an excellent safety profile and broad activity across AML populations with adverse genetics. We believe these properties position tuspetinib as an ideal agent for addition to the VEN+HMA backbone therapy to create a superior triplet (TUS+VEN+HMA) frontline therapy to treat newly diagnosed AML.
While the goal for the tuspetinib program is to move into frontline therapy with newly diagnosed AML patients in a triplet combination, the regulatory path to the frontline triplet began with a clinical trial with TUS single agent in patients with relapsed or refractory (R/R) AML and then transitioned through a trial with the TUS+VEN doublet therapy in R/R AML patients. This was essential so that we and regulatory bodies could understand the safety, tolerability, convenience, response activities, and contribution of component that tuspetinib can deliver to a triplet combination therapy.
● | During 2023, our clinical team successfully completed the Phase 1/2 dose escalation and dose exploration trial of tuspetinib as a single agent in R/R AML patients. Tuspetinib achieved durable, objective clinical responses in patients with a diversity of adverse genetics at four active dose levels, all of which were well tolerated with no dose-limiting toxicities. Tuspetinib demonstrated an excellent safety profile, with no instances of drug-related QTc prolongation, differentiation syndrome or muscle damage in any patient. Plus, continuous dosing of tuspetinib was possible when patients achieved remission because tuspetinib did not cause myelosuppression in those patients, which distinguishes our drug from many others in development. |
In our scientific presentations during 2023 we described how tuspetinib targets resistance mechanisms used by AML cells to become resistant to the BCL-2 inhibitor venetoclax and how tuspetinib can combine synergistically with venetoclax in animal models. In addition, we demonstrated that tuspetinib-resistant AML cells are hypersensitive (2000-fold) to venetoclax. This mechanistic complementarity provided a rationale for us to combine tuspetinib with venetoclax to evaluate the TUS+VEN doublet in the R/R AML population. |
● | We initiated the Phase 1/2 APTIVATE trial with the TUS+VEN doublet therapy during 2023, and then subsequently completed it ahead of schedule in early 2024, and we demonstrated TUS+VEN maintained a highly favorable safety profile and broad activity in R/R AML patients with adverse genetics and who had failed prior therapies. |
Additional studies were performed during 2023 to advance tuspetinib, including a food effect study in healthy human volunteers and a 13-week chronic safety-toxicology study in animal species. Such ancillary studies are required by regulatory agencies to advance an agent toward commercialization, and tuspetinib performed admirably in both studies. |
We heard from a number of key opinion leaders (KOLs) in AML that they had great enthusiasm for the safety and activity of tuspetinib. These KOLs voiced their belief that tuspetinib can have its greatest AML patient impact as a frontline triplet therapy by improving the response rates, the depth of responses, the durability of responses, the quality of life, and the long-term survival across a diversity of AML patients, relative to the current standard of care (VEN+HMA) in frontline AML patients who are ineligible for intensive chemotherapy. Indeed, we heard this same message consistently from major pharma companies. Such pharma companies are interested primarily in the TUS+VEN+HMA triplet for frontline AML patients because of the estimated $1Bn annual commercial impact for tuspetinib in the frontline AML setting, and they are eager to see our preliminary triplet pilot data anticipated later this year. These KOLs, potential partners, and our internal team all agree that the primary focus for tuspetinib should be on the TUS+VEN+HMA triplet in frontline AML. The safety, convenience, and broad activity of tuspetinib as a single agent and in combination with venetoclax distinguish tuspetinib from competitor agents and position the tuspetinib-containing TUS+VEN+HMA triplet regimen to potentially become a new standard of care for frontline treatment of newly diagnosed AML.
For these reasons, we are focusing our resources on the TUS+VEN+HMA triplet, which has the potential to deliver the greatest patient impact, the greatest commercial impact, and the greatest return to our investors. Therefore, our next step to build value as quickly as possible will be to initiate the TUS+VEN+HMA triplet pilot study in frontline newly diagnosed AML patients and to select the optimal triplet dosage of tuspetinib, which will be driven by CR/CRh rates, MRD negativity, and safety data. In collaboration with a partner, after selecting appropriate Phase 2 doses of the triplet, we plan to transition into registrational studies that compare the safety and efficacy of the TUS+VEN+HMA triplet to the VEN-HMA control for frontline newly diagnosed AML patients.
Let me now leave you with a quick summary of why we believe tuspetinib may be the best agent to combine with SOC (VEN+HMA) and why the TUS+VEN+HMA triplet can become a new standard of care for frontline therapy of newly diagnosed AML patients.
● | TUS combines synergistically with venetoclax (VEN) |
TUS safety profile indicates no observed overlapping toxicity with SOC |
● | Current data provide evidence for increased efficacy and safety when added to SOC |
● | TUS has broad antileukemic activity across AML populations (TP53MUT, FLT3MUT/WT, NKRASMUT) |
● | TUS has extended patent coverage beyond competitors and has the potential for premium pricing |
● | TUS has $1Bn+ market potential in the frontline AML setting |
● | TUS+VEN+HMA may fill the sizeable gaps left by competitors and combine further with future agents |
And now a quick update on our second asset luxeptinib (LUX or CG-806). LUX is active in AML patients and in B-cell cancer patients but was not consistently achieving the desired exposure levels to drive responses. Because absorption of the original G1 formulation hampered the effectiveness of luxeptinib, a new generation (or G3) formulation was developed. We now report clinical evaluation of the G3 formulation has been completed. G3 formulation was tested in a single dose bioavailability study across five dose levels and then with continuous dosing using two different dose levels. The G3 formulation achieved our desired plasma exposure benchmark, with approximately 10-fold better absorption, and better tolerability than the original formulation. We are seeking alternative development paths and collaborations for LUX.
NoticeImportantly, during 2023, we continued disciplined financial management of our operations. We reduced spending on numerous fronts and Proxy Statement
For the
Annual and Special Meeting of Shareholders
to be held on June 4, 2019
April 25, 2019
Dear Aptose Shareholders,
2019 is an exciting time to be a shareholder of Aptose, and I am personally honored to serveprioritized investments in the key leadership role for this company. Aptose is built upontuspetinib clinical program. We financed corporate activities with cash gleaned from our At-the-Market (or ATM) Facility and Committed Equity Facility, and we entered into an agreement with our strategic partner Hanmi Pharmaceutical to raise $7.3M of additional capital.
Subsequent to the hard workend of 2023, in January of 2024 we closed financings with gross proceeds of $13.7 million, inclusive of a $9.7 million public offering and diligencea separate $4 million private placement with Hanmi Pharmaceutical. The total number of its employees and subject matter experts, its scientific and clinical advisors, its distinctive clinical assets in CG-806 and APTO-253, its strong scientific data buttressingCommon Shares outstanding after the assets, andclosing of course its supportive shareholders. We are confident that both of Aptose’s pharmaceutical assets, our APTO-253 MYC inhibitor and our CG-806 first-in-class oral small molecule pan-FLT3/pan-BTK inhibitor -- while very different from one another -- represent exciting agents with substantial market opportunities in hematology.
Our previous two years focused on building a solid foundation for our molecules and driving them into the clinic. Our actions included collaborating withPublic Offering, including the most brilliant of minds in the hematology/oncology field, establishing robust and reliable drug synthesis processes, identifying leading investigators and clinical sites, and maintaining strong communication with investors, the banking industryOver-Allotment Option, and the regulatory agencies. We accomplished those key objectives and entered 2019 as a clinical-stage company,Private Placement was 15.7 million.
In summary, I’m happy to report on the significant progress we made in 2023 and we look forward to a highly productive periodimportant milestones in which2024, especially as we seek meaningful and durable clinical proofprepare to initiate the triplet pilot study of concept to place value on our molecules and deliver value creationtuspetinib. We are especially grateful for the company.
We recently were granted allowance by the FDA to initiate a Phase 1, multicenter, open label, dose-escalation study of CG-806, our oral, first-in-class small molecule inhibitor of the FLT3 and BTK kinases, in patients, with chronic lymphocytic leukemia (CLL/SLL) or non-Hodgkin lymphomas (NHL) who have failed other therapies, including ibtrutinib. Likewise, CG-806 is being developed for patients with acute myeloid leukemia (AML), a devastating cancer of the blood and bone marrow. Preclinical data support the use of CG-806 broadly in AML patients that have failed other therapies, including other FLT3 inhibitors. In preclinical studies, our researchers and collaborators demonstrated that CG-806 potently inhibits all known forms of FLT3 and BTK, as well as other key oncogenic processes essential for cancer cell survival but with a precision that spares targets and pathways associated with toxicity. Indeed, the preclinical profile of CG-806 is superior to other competitor drugs in the space, and we are hopeful those properties will translate to success in humans. Although drug development takes time, we are all particularly hopeful about CG-806 and believe that it has the potential to serve as a transformational agent for multiple hematologic cancers, including AML, CLL and others.
Separately, our small molecule MYC inhibitor APTO-253 has returned to the clinic in a Phase 1b trial after a hiatus to improve its chemical synthesis and formulation. MYC is the most commonly dysregulated oncogene in cancers and is a key driver of AML and B-cell cancers, as well as certain solid tumors. APTO-253 is the only known clinical-stage molecule that can directly inhibit expression of the MYC oncogene, shown to reprogram survival signaling pathways and contribute to drug resistance in many malignancies, including AML and B cell cancers. Other therapies directed at MYC are limited by severe toxicities, drug resistance and myelosuppression of the healthy bone marrow, which has not been observed in extensive preclinical testing of APTO-253. In our first AML patient administered APTO-253 at the lowest dose, we observed a reduction of MYC expression levels after a 28-day cycle of therapy. We plan to continue to dose escalate and hope to identify a safe dose that effectively inhibits MYC expression and reduces the leukemic burden in AML patients. We continue to exercise prudence in enrolling patients for higher doses of APTO-253 and look forward to reporting our findings. Finally, I wish to thank the clinicians, families and patients for their willingness to participateinvestigators who are participating in advancing our APTO-253 human clinical trial. These are very sick patientsessential work and we don’t want to lose sight of the fact that they are working with ussupport our efforts to create better drugs.
During the past year we received expert guidance and support from our Board of Directors, and we refreshed our Board with the addition of Ms. Carol Ashe and Ms. Caroline Loewy. In addition, we expanded our offices to recruit additional personnel, we presented at multiple scientific, clinical and banking conferences around the world, and we boosted the intellectual property estates protecting our pharmaceutical assets. Our current cash position and access to available sources provide us runway well into the first half of 2020. This comfortably allows us to initiate our clinical trials and collect meaningful clinical data without the need for a near-term financing, though we will continually evaluate our financing and business development opportunities. Although we are proud of our accomplishments as we look in the rear-view mirror, we are keenly focused on the future for Aptose.
As fellow shareholders, we are committed to maximizing shareholder value through the diligent development of our lead assets.superior therapeutics. I thank our entire Aptose organization and thank you, ourmy fellow shareholders, for your trustsupport and support.for being part of our journey. We look forwardare eager to communicating withreport our progress to you onthroughout the progress of the CG-806 and APTO-253 clinical programs as we move forward on this journey.coming year.
Sincerely,
William G. Rice, Ph.D.
Chairman, President and CEOChief Executive Officer
Aptose Biosciences Inc.
Notice of 20192024 Annual and Special Meeting of Shareholders
NOTICE IS HEREBY GIVEN that the annual and special meeting (the “Meeting”) of shareholders of Aptose Biosciences Inc. (the “Corporation”) will be held at the Intercontinental Hotel, 901 Bayfront Court, San Diego, California, 92101 United States of America on June 4, 201918, 2024 at 10:00AM (Pacific8:00 a.m. (Eastern time). The Meeting will be conducted as an online only meeting. There will be no physical location for shareholders and duly appointed proxyholders to attend. Shareholders and duly appointed proxyholders are invited to attend by live webcast accessible directly online at web.lumiagm.com/413029776, where they will be able to listen, vote, and submit questions during the Meeting.
What the Meeting is About
The following items of business will be covered at the Meeting:
1. | receiving the financial statements of the Corporation for the fiscal year ended December 31, |
2. | Proposal No. 1 – electing seven directors to serve until the |
3. | Proposal No. 2 – appointing KPMG LLP as the independent registered public accounting firm of the Corporation for the fiscal year ending December 31, |
4. | Proposal No. 3 – passing an |
5. | Proposal No. 4 – approving the potential issuance of common shares of the Corporation (the “Shares”) to the holders of certain warrants in excess of 19.99% of our outstanding Shares pursuant to the Nasdaq Listing Rules; |
6. | Proposal No. 5 – passing a resolution, the full text of which is set forth in the |
7. | transacting such other business as may be properly brought before the Meeting. |
The shareholders may also consider other business that properly comes before the Meeting or any adjournment of the Meeting. The proxy statement accompanying this notice of meetingProxy Statement provides additional information relating to the matters to be dealt with at the Meeting and forms part of this notice.
You have the right to votevote.
You are entitled to receive notice of and vote at the Meeting, or any adjournment, if you are a holder of common shares of the CorporationShares at the close of business on April 25, 2019.May 10, 2024.
You have the right to vote your sharesShares on items 2 through 45 listed above and any other items that may properly come before the Meeting or any adjournment.
The Notice of Meeting, Proxy Statement and the form of proxy will be mailed to you on or around May 8, 2019.28, 2024. Detailed instructions regarding shareholders’ voting process are also available on our website at https://www.aptose.com/investors/news-events/ir-calendar.
Your vote is importantimportant.
If you are not able to be present atattend the Meeting, please exercise your right to vote by signing and returning the enclosed form of proxy to Computershare Investor Services Inc., 100 University Avenue, 8th8th Floor, Toronto, Canada M5J 2Y1, so as to arrive not later than 5:00 p.m. (Toronto time) on May 31, 2019June 14, 2024 or, if the Meeting is adjourned, 48 hours (excluding Saturdays, Sundays and holidays) before any adjournment of the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
William G. Rice, Ph.D.
Chairman, President and Chief Executive Officer
April 25, 2019May , 2024
IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF PROXY
MATERIALS FOR THE ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD ON JUNE 4, 2019.18, 2024.
Our Notice of 20192024 Annual and Special Meeting of Shareholders, Proxy Statement and Annual Report to Shareholders are available on the Corporation’s website atwww.aptose.com inhttps://www.aptose.com/investors/news-events/ir-calendar.
Copies are also available upon written request to the Investors section.Senior Vice President, Chief Financial Officer, Chief Business Officer and Corporate Secretary (i) at our principal executive and registered office located at 251 Consumers Road, Suite 1105, Toronto, Ontario, Canada, M2J 4R3; or (ii) at our executive headquarters located at Suite 120, 12770 High Bluff Drive, San Diego, California, 92130.
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GENERAL INFORMATION ABOUT THE PROXY STATEMENT
The information contained in this proxy statement (the “Proxy Statement”) is furnished in connection with the solicitation of proxies by Aptose Biosciences Inc. (the “Corporation”, “Aptose”, “we” or “our”) to be used at the annual and special meeting (the “Meeting”) of holders (the “Shareholders”) of common shares (the “Shares”) of Aptose Biosciences Inc. (the “Corporation”, “Aptose”, “we” or “our”)the Corporation to be held on June 4, 201918, 2024 at 10:8:00 A.M. (Pacifica.m. (Eastern time) at the Intercontinental Hotel, 901 Bayfront Court, San Diego, California, 92101, United States of America and at all adjournments thereof, for the purposes set forth in the accompanying notice of meeting (the “Notice of Meeting”). It is expected that the solicitationThe Meeting will be made primarily by mail but proxies may also be solicited personally by directors, officers, employees or agents of the Corporation. The solicitation of proxies by this Proxy Statement is being made by or on behalf of management of the Corporation. The total cost of the solicitationheld online at web.lumiagm.com/413029776. There will be borne by Aptose.no physical location for shareholders and duly appointed proxyholders to attend.
The information contained in this Proxy Statement is given as at April 25, 2019May 10, 2024 except where otherwise noted. All references to “dollar” or the use of the symbol “$” are to United States dollars and use of the symbol “CA$” refers to Canadian dollars, unless otherwise indicated.
In order to maintain its listing on Nasdaq, the Corporation effected a reverse stock split on a fifteen (15) to one (1) Share basis, and the Shares commenced trading on a post-reverse stock split basis at market open on Tuesday, June 6, 2023. All Share and per Share amounts have been adjusted retroactively to reflect the reverse stock split as if it had occurred at the beginning of the earliest period presented.
QUESTIONS ABOUT THE ANNUAL AND SPECIALGENERAL MEETING
AND VOTING YOUR SHARES
What are the date, time and place of the Meeting?
The Meeting will be held on June 4, 201918, 2024 at 10:8:00 A.M. (Pacifica.m. (Eastern time). The Meeting will be held online at Intercontinental Hotel, 901 Bayfront Court, San Diego, California, 92101, United Statesweb.lumiagm.com/413029776. There will be no physical location for shareholders and duly registered proxyholders to attend. The online Meeting will be accessible 15 minutes before the start time.
How can I access the Meeting virtually?
To participate in the Meeting virtually, visit web.lumiagm.com/413029776. Registered Shareholders and duly appointed and registered proxyholders will be able to listen, vote and ask questions via the virtual meeting platform. It is to be noted, however, that questions cannot be submitted prior to the Meeting. Non-registered Shareholders who have not appointed themselves as proxyholders will only be able to attend the online Meeting as “Guests” and will not be able to vote or ask questions at the Meeting. To access the Meeting virtually, registered Shareholders and duly appointed proxyholders will need an Internet connection and an Internet-connected device (such as a desktop, laptop, tablet or cell phone) running the most updated version of America.applicable software and plugins. The virtual meeting platform is fully supported across browsers (Microsoft Edge, Chrome, Firefox and Safari). Participants in the online Meeting must be connected to Internet at all times during the Meeting in order to vote when balloting commences. A summary of the information Shareholders will need to attend the Meeting virtually is provided below:
1. | Registered Shareholders and duly appointed proxyholders can participate in the Meeting virtually by clicking “I have a login” and entering a Username and Password before the start of the Meeting. |
a. | Registered Shareholders – The 15-digit control number located on the form of proxy or in the email notification you received is the Username and the Password is “aptose2024”. |
b. | Duly appointed proxyholders – Following the registration of the proxyholder with Computershare Investor Services Inc. (“Computershare”), Computershare will provide the proxyholder with a Username after the voting deadline has passed. The Password to the online Meeting is “aptose2024”. |
2. | Voting at the Meeting will only be available for registered Shareholders and duly appointed and registered proxyholders. Non-registered Shareholders who have not appointed themselves may attend the Meeting virtually by clicking “I am a guest” and completing the online form. This will allow them to listen to the online Meeting; however, they will not be able to vote or submit questions. |
3. | Registered Shareholders who use a 15-digit control number to login to the online Meeting and who accept the terms and conditions will be revoking any and all previously submitted proxies. However, in such a case, registered Shareholders will be provided the opportunity to vote by ballot on the matters put forth at the Meeting. If registered Shareholders do not wish to revoke all previously submitted proxies, they should not accept the terms and conditions, in which case they can only enter the online Meeting as a guest. |
If you attend the Meeting virtually, it is important that you remain connected to the internet at all times during the online Meeting in order to vote when balloting commences. It is your responsibility to ensure connectivity for the duration of the Meeting. You will be able to access the online Meeting 15 minutes before the start time and should allow ample time for online check-in, which will begin at 7:45 a.m. (Eastern time) on June 18, 2024.
Why is the Meeting held virtually?
By conducting our Meeting online, the Board aims to provide Shareholders a convenient opportunity to participate in the Meeting without incurring significant travel costs or being restricted by time constraints.
The format of the Meeting has been designed to ensure that Shareholders who attend the Meeting online will be afforded the same rights and opportunities to participate as they have in previous annual shareholders’ meetings. Directors will also attend the Meeting via the virtual platform.
Can I submit questions prior or at the Meeting?
Registered Shareholders and duly appointed and registered proxyholders can ask questions during the online Meeting via the virtual meeting platform. It is to be noted, however, that questions cannot be submitted prior to the Meeting. Questions pertinent to the Meeting matters will be answered at a designated time during the Meeting, subject to time constraints. The chair of the Meeting reserves the right to edit or reject questions it deems irrelevant to meeting matters, profane or inappropriate.
The chair of the Meeting has broad authority to conduct the Meeting in an orderly manner. To ensure the Meeting is conducted in a manner that is fair to all Shareholders, the chair of the Meeting may exercise its discretion in recognizing Shareholders who wish to participate, in determining the order in which questions are answered, and the amount of time devoted to each question. However, consistent with prior annual shareholders’ meetings, questions submitted in accordance with the rules of conduct generally will be addressed in the order received during the allotted time for questions.
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Who can vote at the Meeting?
Only Shareholders as of the close of business on the record date, being April 25, 2019,May 10, 2024, are entitled to receive notice of and vote on matters to be presented at the Meeting, or any adjournment or postponement thereof, in the manner and subject to the procedures described in this Proxy Statement and the accompanying proxy card.
form of proxy.
At the close of business on the record date, [ ] Shares were issued and outstanding.
Each Shareholder is entitled to one vote per Share held on all matters to come before the Meeting. Common sharesShares of Aptose are the only securities of Aptose which will have voting rights at the Meeting.
What is the quorum for the Meeting?
The presence at the opening of the Meeting of two persons who are entitled to vote either as Shareholders or as proxy holdersproxyholders and holding or representing not less than 33⅓331⁄3% of the outstanding Shares entitled to vote at the Meeting as of the record date will constitute a quorum for the transaction of business at the Meeting. In general, Shares represented by a properly signed and returned form of proxy, card, or properly voted by Internet or telephone, or voted by your broker will be counted as sharesShares present and entitled to vote at the Meeting for purposes of determining a quorum. Shares represented by proxies marked “Abstain” and “broker non-votes” are also counted in determining whether a quorum is present.
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What does it mean to vote by proxy?
Voting by proxy means that you are giving the person or people named on your form of proxy form (the “proxyholder”) the authority to vote your Shares for you at the Meeting or any adjournment. A form of proxy form is included with this Proxy Statement.
The management representatives named on the form of proxy form will vote your Shares for you, unless you appoint someone else to be your proxyholder. You have the right to appoint a person to represent you at the Meeting other than the persons named on the proxy form.form of proxy. If you appoint someone else, he or she must be present at the Meeting to vote your Shares. If you want to appoint someone else, you can insert that person’s name in the blank space provided in the form of proxy. That other person does not need to be a Shareholder of the Corporation.
If you are voting your Shares by proxy, our transfer agent, Computershare, Investor Services Inc. (“Computershare”), must receive your completed form of proxy form by 5:00 p.m. (Toronto(Eastern time) on May 31, 2019June 14, 2024 or, if the Meeting is adjourned, 48 hours (excluding Saturdays, Sundays and holidays) before any adjournment of the Meeting.
What’s the difference between registered and non-registered (beneficial) Shareholders?
The voting process is different depending on whether you are a registered or non-registered (beneficial) Shareholder:
Registered Shareholders
You are a registered Shareholder if your name appears on your Share certificate or in the registers of the Corporation maintained by Computershare. Your form of proxy form tells you whether you are a registered Shareholder. We mail copies of the Notice of Meeting, this Proxy Statement and the form of proxy (collectively, the “proxy materials”) directly to registered Shareholders. We have previously mailed our annual report to all registered Shareholders.
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Non-Registered (or Beneficial) Shareholders
You are a non-registered (or beneficial) Shareholder if your bank, trust company, securities broker or other financial institution holds your Shares for you (as your nominee). For most of you, your voting instruction form or proxy tells you whether you are a non-registered (or beneficial) Shareholder.
In accordance with Canadian securities law and SEC rules, we have distributed copies of the proxy materials and the annual report to CDS Clearing and Depository Services Inc. and intermediaries (such as securities brokers or financial institutions) for onward distribution to those non-registered or beneficial Shareholders to whom we have not sent the proxy materials and the annual report directly.
The intermediaries are required to forward proxy materials and the annual report to non-registered or beneficial Shareholders unless a non-registered or beneficial Shareholder has waived the right to receive them. Very often, intermediaries will use a service company such as Broadridge Investor Communication Solutions to forward the proxy materials to non-registered or beneficial Shareholders.
How do I vote?
Most non-registered or beneficial Shareholders who have not waived the right to receive proxy materials will receive a voting instruction form (“VIF”). Registered Shareholders will, and some non-registered (beneficial) Shareholders may receivea form of proxy. Shareholders should follow the additional procedures set out below, depending on what type of form they receive. Detailed instructions regarding Shareholders’ voting process are also available on the Investors page of our website at https://www.aptose.com/investors/news-events/ir-calendar.
1. | Voting Instruction Form. If the non-registered Shareholder does not wish to attend and vote at the Meeting |
If a non-registered Shareholder wishes to attend and vote at the Meeting in person (or have another person attend and vote on the non-registered Shareholder’s behalf), the non-registered Shareholder must complete, sign and return the VIF in accordance with the directions provided and a form of proxy givingprovided. If the rightnon-registered Shareholder wishes to attend and vote at the Meeting, they must appoint themselves as proxyholder. Otherwise, the non-registered Shareholder will only be forwardedable to attend the non-registered Shareholder.Meeting as a “Guest”, and will not be able to vote or ask questions at the Meeting. Non-registered Shareholders should visit our website at https://www.aptose.com/investors/news-events/ir-calendar to obtain additional instructions on how to vote online during the Meeting.
Non-registered Shareholders who wish to appoint themselves as a proxy holder in order to attend the Meeting virtually or who wish to appoint a proxyholder other than a management representative to represent them at the online Meeting must submit their VIF prior to registering themselves or their proxyholder, as applicable. Registering themselves or the proxyholder, as applicable, is an additional step once a non-registered Shareholder has submitted their VIF. Failure to register themselves or another person other than a management representative as duly appointed proxyholder will result in the non-registered Shareholder or the proxyholder not receiving a Username to participate in the Meeting. To register a proxyholder (be it themselves or another person other than a management representative), non-registered Shareholders must visit https://www.computershare.com/aptose by 5:00 p.m. (Eastern time) on June 14, 2024 or, if the Meeting is adjourned, 48 hours (excluding Saturdays, Sundays and holidays) before any adjournment of the Meeting, and provide Computershare with their information or their proxyholder’s contact information, as applicable, so that Computershare may provide them or the proxyholder, as applicable, with a Username via email. Without a Username, non-registered Shareholders who appointed themselves as proxyholders and proxyholders will only be able to attend the Meeting as “Guests” and will not be able to vote or ask questions at the Meeting.
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Or
2. | Form of Proxy. A registered Shareholder will receive a form of proxy to be completed, signed and returned in accordance with the directions on the form, if the registered Shareholder does not wish to attend and vote at the Meeting |
Registered Shareholders who wish to appoint a proxyholder other than a management representativeto represent them at the online Meeting must submit their form of proxy prior to registering their proxyholder. Registering the proxyholder is an additional step once a registered Shareholder has submitted their proxy. Failure to register a duly appointed proxyholder will result in the proxyholder not receiving a Username to participate in the Meeting. To register a proxyholder, registered Shareholders must visit https://www.computershare.com/aptose by 5:00 p.m. (Eastern time) on June 14, 2024 or, if the Meeting is adjourned, 48 hours (excluding Saturdays, Sundays and holidays) before any adjournment of the Meeting, and provide Computershare with their proxyholder’s contact information, so that Computershare may provide the proxyholder with a Username via email. Without a Username, proxyholders will only be able to attend the Meeting as “Guests” and will not be able to vote or ask questions at the Meeting.
Registered Shareholders may also attend and vote at the Meeting. Registered Shareholders wishing to attend the Meeting virtually should visit our website at https://www.aptose.com/investors/news-events/ir-calendarto obtain additional instructions on how to vote online during the Meeting. The 15-digit control number provided on the registered Shareholder’s form of proxy will be required.
Less frequently, a non-registered Shareholder will receive, as part of the proxy materials, a form of proxy that has already been signed by the intermediary (typically by a facsimile or stamped signature), which is restricted as to the number of Shares beneficially owned by the non-registered Shareholder, but which is otherwise uncompleted. If the non-registered Shareholder does not wish to attend and vote at the Meeting in person (or have another person attend and vote on the non-registered Shareholder’s behalf), the non-registered Shareholder must complete the form of proxy and deposit it with Computershare, 100 University Avenue, 8th Floor, Toronto, Canada, M5J 2Y1 as described above.
If a non-registered Shareholder wishes to attend and vote at the Meeting in person (or have another person attend and vote on the non-registered Shareholder’s behalf), the non-registered Shareholder must strike out the names of the persons named in the proxy and if they intend to participate in the Meeting virtually, insert the non-registered Shareholder’s (or such other person’s) name in the blank space provided. The non-registered Shareholder must then register themselves or the other person, as applicable, as proxyholder. Registering themselves or the other person, as applicable, is an additional step once a non-registered Shareholder has submitted their completed form of proxy. Failure to register themselves or the other person, as applicable, as duly appointed proxyholder will result in the non-registered Shareholder or the proxyholder, as applicable, not receiving a Username to participate in the online Meeting. To register a proxyholder (be it themselves or another person), non-registered Shareholders must visit https://www.computershare.com/aptose by 5:00 p.m. (Eastern time) on June 14, 2024 or, if the Meeting is adjourned, 48 hours (excluding Saturdays, Sundays and holidays) before any adjournment of the Meeting, and provide Computershare with their information or their proxyholder’s contact information, as applicable, so that Computershare may provide them or the proxyholder, as applicable, with a Username via email. Without a Username, non-registered Shareholders who appointed themselves as proxyholders and proxyholders will only be able to attend the Meeting as “Guests” and will not be able to vote or ask questions at the Meeting.
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3. | United States non-registered (beneficial) Shareholders. If a non-registered Shareholder in the United States wishes to attend and vote at the online Meeting, they must first obtain a valid legal proxy from their broker, bank or other agent and then register in advance to attend the Meeting. The U.S. non-registered Shareholder should follow the instructions from their broker or bank included with these proxy materials, or contact their broker or bank to request a legal form of proxy. After first obtaining a valid legal proxy from their broker, bank or other agent, the U.S. non-registered Shareholder must then register to attend the online Meeting by submitting a copy of their legal proxy to Computershare. Requests for registration should be directed to: |
Computershare
100 University Avenue
8th Floor
Toronto, Ontario
M5J 2Y1
OR
Email at: uslegalproxy@computershare.com
Requests for registration must be labelled as “Legal Proxy” and be received no later than by 5:00 p.m. (Eastern time) on June 14, 2024. U.S. non-registered Shareholders will receive a confirmation of their registration by email receipt of their registration materials by Computershare. U.S. non-registered Shareholders will then be able to attend the Meeting and vote and ask questions at web.lumiagm.com/413029776. U.S. non-registered Shareholders are required to register their appointment at www.computershare.com/appointee. If U.S. non-registered Shareholders do not follow the procedures set out above, they will only be able to attend the Meeting virtually as “Guests” and will not be able to vote or ask questions at the online Meeting.
Shareholders should follow the instructions on the forms they receive, and non-registered Shareholders should contact their intermediaries promptly if they need assistance.
The proxy materials are being sent or made available to both registered and non-registered owners of Shares. The Corporation is sending proxy materials indirectly to non-objecting beneficial owners (as defined in National Instrument 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer (“NI 54-101”)). The Corporation intends to pay for intermediaries to forward to objecting beneficial owners (as defined in NI 54-101) the proxy materials.
How do I request a copy of proxy materials?
To request a printed copy of the proxy materials, please contact your broker, if you are a non-registered Shareholder, or if you are a registered Shareholder, contact our Senior Vice President, Chief Financial Officer, Chief Business Officer and Corporate Secretary at Aptose Biosciences Inc., Suite 120, 12770 High Bluff Drive, San Diego, California, telephone: 858-926-2730.
The proxy materials are being sent or made available to both registered and non-registered owners of Shares. The Corporation is sending proxy materials indirectly to non-objecting beneficial owners (as defined in National Instrument 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer (“NI 54-101”)). The Corporation intends to pay for intermediaries to forward to objecting beneficial owners (as defined in NI 54-101) the proxy materials.
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What am I voting on at the Meeting?
The following items of business will be covered at the Meeting:
1. | receiving the financial statements of the Corporation for the fiscal year ended December 31, |
2. | Proposal No. 1 |
3. | Proposal No. 2 |
4. | Proposal No. 3 – passing an |
5. | Proposal No. 4 – approving the potential issuance of Shares to the holders of certain warrants in excess of 19.99% of our outstanding Shares pursuant to the Nasdaq Listing Rules (the “Nasdaq 20% Issuance Proposal”); |
6. | Proposal No. 5 - Passing a resolution, the full text of which is set forth in |
7. | transacting such other business as may be properly brought before the Meeting. |
As of the date of this Proxy Statement, the Board of Directors (the “Board”) is not aware of any such other business.
How does the Board recommend that I vote?
Our Board recommends that each Shareholder vote ““FOR”FOR” each of the proposals listed above.
Proposals No. 1 through No. 5.
What votes may I cast with regard to each proposal?
proposals
You can choose to vote “For” or “Withhold” for Proposal No. 1 and “For”, “Against” or “Abstain”, for Proposal Nos. 2 and 3.Proposals No. 1 through No. 5. The Shares represented by the form of proxy form will be voted in accordance with the instructions of the Shareholder on any ballot that may be called for and, if the Shareholder specifies a choice with respect to any matter to be acted upon, the Shares will be voted accordingly.
If you return your form of proxy form and do not tell us how you want to vote your Shares, your Shares will be voted “FOR” each director nominee andin accordance with Board recommendations for each proposal by the management representatives named in the form of proxy.
The enclosed form of proxy confers discretionary authority upon the management representatives designated in the form of proxy with respect to amendments to or variations of matters identified in the Notice of Meeting and with respect to other matters that may properly come before the Meeting. At the date of this Proxy Statement, management of the Corporation knows of no such amendments, variations or other matters.
What vote is required in order to approve each proposal?
• | Proposal No. 1: |
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Proposal No. 2: The appointment of KPMG LLP as our independent registered public accounting firm requires a majority of the votes cast at the Meeting, and votes cast only include those votes cast “For” or “Against” the proposal.
Proposal No. 3: The approval of the advisory (non-binding) resolution on the compensation of the Corporation’s named executive officers requires a majority of the votes cast at the Meeting, and votes cast only include those votes cast “For” or “Against” the proposal. Abstentions and broker non-votes will not be included in the total votes cast and will not affect the results.
Proposal No. 4: The approval of the Nasdaq 20% Issuance Proposal requires a majority of the votes cast at the Meeting, excluding the voting power underlying the securities acquired by Hanmi Pharmaceuticals Co., Ltd. (“Hanmi”) in the Hanmi Investment (as defined below), is necessary to approve the Nasdaq 20% Issuance Proposal in accordance with Nasdaq Marketplace Rule 5635(e)(4). Broker non-votes will not affect whether this proposal is approved, but abstentions will have the same effect as a vote against the proposal.
• | Proposal No. 5:The approval of one or more adjournments of the Meeting requires a majority of the votes cast at the Meeting, and votes cast only include those votes cast “For” or “Against” the proposal. |
results. |
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What impact does a “Withhold” oran “Abstain” vote have?
If you select “Abstain,” your vote will have no effect on the votes cast for the purposes of approving each proposal.
What is the effect if I do not cast my vote?
If, as a registered Shareholder, you do not cast your vote in personat the Meeting or by proxy, no votes will be cast on your behalf on any of the proposals.
If you are a U.S. beneficial shareholderShareholder with an intermediary, you must instruct your U.S. intermediary how to vote your shares. If, as a U.S. non-registered or beneficial Shareholder, you do not instruct your intermediary on how to vote on any of the proposals at the Meeting, we believe that the intermediary has discretionary authority to vote your shares on Proposal No. 2, but the intermediary does not have discretionary authority to vote your shares on the rest of the proposalsProposal No. 1, No. 3, No. 4 and No. 5 or any unusual item, so a “broker non-vote” will be recorded with respect to such item. Broker non-votes will be treated as not entitled to vote on any such matter and will not be counted as having been voted in respect of any such matter. Shares represented by such broker “non-votes”“non-votes” will, however, be counted in determining whether there is a quorum for the Meeting.
How do I change my vote?
A registered Shareholder who has given a proxy may revoke that proxy and change a vote by:
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(a) | completing and signing a proxy bearing a later date and depositing it with Computershare as described above; |
(b) | depositing an instrument in writing executed by the Shareholder or by the Shareholder’s attorney authorized in |
writing at our registered office located at 251 Consumers Road, Suite 1105, Toronto, Ontario, Canada, M2J 4R3 at any time before 5:00 p.m. |
using your 15-digit control number and voting online at the Meeting; or |
in any other manner permitted by law. |
A non-registered or beneficial Shareholder may revoke a voting instruction form or a waiver of the right to receive proxy materials and to vote given to an intermediary or to the Corporation, as the case may be, at any time by written notice to the intermediary or the Corporation, except that neither an intermediary nor the Corporation is required to act on a revocation of a voting instruction form or on a waiver of the right to receive materials and to vote that is not received by such intermediary or the Corporation, at least seven days prior to the Meeting.
What does it mean if I receive more than one set of proxy materials?
This means that you own Shares that are registered under different accounts. For example, you may own some Shares directly as a registered Shareholder and other Shares as a non-registered beneficial Shareholder through an intermediary, or you may own Shares through more than one such organization. In these situations, you will receive multiple sets of proxy materials. It is necessary for you to complete and return all forms of proxy cards and VIFs in order to vote all of the Shares you own. Please make sure you return each form of proxy card or VIF in the accompanying return envelope. You may also vote by Internet, telephone, facsimile or email, as applicable, by following the instructions on your proxy materials.
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HowWho is soliciting the proxies, how will proxies be solicited and who will pay the cost of the proxy solicitation?
Aptose is soliciting proxies to be used at the Meeting. The solicitation of proxies will be primarily by mail, but Aptose’s directors, officers and regular employees may also solicit proxies personally or by telephone. Aptose will bear all costs of the solicitation, including the printing, handling and mailing of the Meeting materials. Aptose has arranged for intermediaries to forward the Meeting materials to non-registered or beneficial Shareholders of record, and Aptose may reimburse the intermediaries for their reasonable fees and disbursements in that regard.
In addition, we have engaged Morrow Sodali LLC to help us solicit proxies from Shareholders for a fee of $12,500, plus customary solicitation charges, as well as reimbursement of out-of-pocket expenses.
How can I make a Shareholder proposal for the 2020 Annual General Meeting?
If you want to propose a matter for consideration at our 20202025 Annual General Meeting then thatof Shareholders?
For a proposal to be valid, it must comply with the requirements if the CBCA, as well as those of the Securities Exchange Act of 1934 (United States) (the “Exchange Act”).
In order for a Shareholder proposal to be eligible for inclusion in the Proxy Statement under the Exchange Act, the Shareholder must submit the proposal in accordance with Rule 14a-8, by no later than January 1, 2025, and the Shareholder must follow the procedures of Rule 14a-8 including having continuously held at least US$2,000 in market value of the Shares entitled to be voted on the proposal at the Meeting, for at least three years; at least US$15,000 in market value of the Shares entitled to vote on the proposal for at least two years; at least US$25,000 in market value of the Shares entitled to vote on the proposal for at least one year by the date the Shareholder submits the proposal. The Shareholder must continue to hold those Shares through the date of the Meeting. A shareholder proposal submitted pursuant to the rules of the SEC under the Exchange Act must be received at our registeredprincipal executive office at 251 Consumers Road, Suite 1105, Toronto, ON M2J 4R3 by January 9, 2020. For a proposal to be valid, it1, 2025 and must comply with theCanada Business Corporations Act (the “CBCA”) and requirements of Rule 14a-8 of theSecurities Exchange Act.
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Shareholders who do not wish to use the mechanism provided by the Exchange Act may submit proposals to be considered at the 2025 annual general meeting of 1934 (United States) (the “Exchange Act”).
Shareholders under the provisions of the CBCA. In order for a Shareholder proposal to be eligible under the CBCA, it must be in writing, accompanied by the requisite declarations and signed by the submitter and qualified Shareholders who at the time of signing are the registered or beneficial owners of sharesShares that, in the aggregate: (a) constitute at least 1% of our issued Shares that have the right to vote at general meetings; or (b) have a fair market value in excess of CA$2,000. For the submitter or a qualified Shareholder to be eligible to sign the proposal, that Shareholder must have been the registered or beneficial owner of our Shares that carry the right to vote at general meetings for an uninterrupted period of at least six months before the date the proposal is submitted.
In order for a Shareholder proposal to To be eligibleconsidered for inclusion in the proxy statementmaterials for the 2025 annual general meeting of Shareholders, any such Shareholder proposal under the Exchange Act, the ShareholderCBCA must submit the proposal in accordance with Rule 14a-8, and the Shareholder must have continuously held at least CA$2,000 in market value, or 1%, of the Shares entitled to be voted on the proposal at the meeting, for at least one yearreceived by the date the Shareholder submits the proposal. The Shareholder must continue to hold those Shares through the date of the meeting.
Aptose by no later than March 20, 2025.
A Shareholder wishing to nominate an individual to be a director, , other than pursuant to a requisition of a meeting made pursuant to the CBCA or a Shareholder proposal made pursuant to the CBCA or Exchange Act provisions described above, is required to comply with Section 3.1 of theBy-Law 2015-01 – Advance Notice Bylaw.By-Law of Aptose Biosciences Inc. (the “Advance Notice Bylaw”).
Shareholders who wish to suggest a candidate for our Board in compliance with Section 3.1 of the Advance Notice Bylaw provides, inter alia, that propermay submit a written noticerecommendation to our Secretary at 251 Consumers Road, Suite 1105, Toronto, ON M2J 4R3 along with the Shareholder’s name, setting forth, among other things:
• the name, age, and province or state, and country of any such director nomination (the “Nomination Notice”)residence of the proposed nominee;
• the principal occupation, business or employment of the proposed nominee, both at present and within the five years preceding the recommendation;
• the number of securities of each class of voting securities of the Corporation or its subsidiaries which are beneficially owned, or controlled or directed, directly or indirectly, by the proposed nominee as of the record date for an annual generalthe meeting of Shareholders must be provided(if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice;
• a description of any agreement, arrangement or understanding (financial, compensation or indemnity related or otherwise) between the nominating Shareholder and the proposed nominee, or any affiliates or associates of, or any person acting jointly or in concert with the nominating Shareholder or the proposed nominee, in connection with the proposed nominee’s election as director; and
• whether the proposed nominee is party to any existing or proposed relationship, agreement, arrangement or understanding with any competitor of the Corporation or its affiliates or any other third party which may give rise to a real or perceived conflict of interest between the interests of the Corporation and the interests of the proposed nominee.
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The corporate governance and nominating committee of the Board (the “Corporate Governance and Nominating Committee” may also request that the Shareholder provide certain additional information.
For the Board to consider a candidate for nomination at the 2025 Annual Meeting, Shareholders should submit the required information to the Secretary ofby the Corporationdate not less than 30 days prior tobefore the date of the annual general meeting of Shareholders;2025 Annual Meeting; provided, however, that inif the event that the2025 annual general meeting of Shareholders is to be held on a date that is lessfewer than 50 days after the date (the “Notice Date”) on which the first public announcement of the date of the annual general meeting was made, notice by the Nomination Notice mustnominating Shareholder may be provided nogiven not later than the close of business on the tenth day following the Notice Date. The foregoing is merely a summary of provisions contained in Section 3.1 of the Advance Notice Bylaw, and is not comprehensive and is qualified by the full text of such provisions. The full text of such provisions is set out in Section 3.1 of the Advance Notice Bylaw, a copy of which is filed under the Corporation’s profile at www.sedar.comwww.sedarplus.ca or www.sec.gov.www.sec.gov.
These advance notice provisions are in addition to, and separate from, the requirements that a stockholder must meet in order to have a proposal included in the proxy statement under the rules of the SEC and the CBCA. For such Shareholder’s director nominee to be eligible for inclusion in the proxy statement, however, such nominationplease refer to the deadlines pursuant to the Exchange Act and the CBCA set out above.
To comply with the universal proxy rules set forth in Rule 14a-19 of the Exchange Act, shareholders who intend to solicit proxies in support of director nominees other than the Corporation’s nominees must provide notice to the Corporate Secretary that sets forth the information required by Rule 14a-19(b) under the Exchange Act, which shall be received by our registered office by January 9, 2020.postmarked or transmitted electronically to the Corporation at the Corporation’s principal executive offices no later than April 19, 2025.
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What if amendments are made to the proposals or if other matters are brought before the Meeting?
With respect to any amendments or variations in any of the proposals shown in the Proxy Statement, or any other matters which may properly come before the Meeting, the Shares will be voted by the appointed proxyholder as he or she in their sole discretion sees fit.
As of the date of this Proxy Statement, the Board is not aware of any such amendments, variations or other matters to come before the Meeting. However, if any such changes that are not currently known to the Board should properly come before the Meeting, the Shares represented by your proxyholders will be voted in accordance with the best judgment of the proxyholders.
Who will tabulate the votes?
We currently expect that Computershare will tabulate the votes, and our Corporate Secretarythe secretary of the Meeting will be our inspector of elections for the Meeting.
When will voting results be disclosed?
Preliminary voting results will be announced at the Meeting. Final voting results will be filed with the Canadian provincial securities regulatory authorities on SEDARSEDAR+ at www.sedar.com,www.sedarplus.ca promptly following the Meeting, and will also be published in a Current Report on Form 8-K filed with the SEC on EDGAR at https://www.sec.gov within four business days of the Meeting.
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Whom do I contact if I have questions regarding the Meeting?
If you have any questions or require assistance in voting your Shares, please call Mr. Gregory Chow,Fletcher Payne, Senior Vice President, Chief Financial Officer, Chief Business Officer and Corporate Secretary, at 858-926-2730.
Who may adjourn the meeting?
Meeting?
The Meeting may be adjourned to any other time and any other place by the Shareholders presentwho attend the Meeting or who are represented at the meetingMeeting and entitled to vote even when such Shareholders do not constitute a quorum.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This proxy statementProxy Statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, of 1934, as amended (the “Exchange Act”), and are subject to the safe harbor created by those sections. This proxy statementProxy Statement also contains “forward-looking information” within the meaning of applicable Canadian securities laws. We refer to such forward-looking statements and forward-looking information collectively as “forward-looking statements”. We have identified some of these forward-looking statements with words like “believe,” “may,” “could,” “would,” “might,” “possible,” “potential,” “will,” “should,” “expect,” “intend,” “plan,” “predict,” “anticipate,” “estimate,” “contemplate” and “continue”, the negative of these words, other words and terms of similar meaning and the use of future dates. Forward-looking statements involve risks and uncertainties. These uncertainties include factors that affect all businesses as well as matters specific to us.
Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Uncertainties and risks may cause our actual results to be materially different than those expressed in or implied by our forward-looking statements. For us, particular uncertainties and risks include those described in our filings with the Securities and Exchange Commission (the “SEC”), including our most recent Annual Report on Form 10-K for the year ended December 31, 2018, as amended.2023. A copy of this document can be found by accessing the SEC’s EDGAR filing database atwww.sec.gov and on SEDARSEDAR+ at www.sedar.com;www.sedarplus.ca; however we will promptly provide a copy of this document to any Shareholder of the Corporation free of charge upon request. All forward-looking statements in this proxy statementProxy Statement speak only as of the date of this proxy statementProxy Statement and are based on our current beliefs and expectations. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as otherwise required by law.
VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES
As of April 25, 2019 [ ]the record date, May 10, 2024, Shares are issued and outstanding. Each holder of Shares of record at the close of business on April 25, 2019, the record date established for notice of the Meeting,May 10, 2024 will be entitled to one vote for each Share held on all matters proposed to come before the Meeting, except to the extent that the Shareholder has transferred any Shares after the record date and the transferee of such Shares establishes ownership of them and makes a written demand, not later than 10 days prior to the Meeting, to be included in the list of Shareholders entitled to vote at the Meeting, in which case the transferee will be entitled to vote such Shares.
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SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
MANAGEMENT AND DIRECTORS
The table below sets forth information known to us regarding the beneficial ownership of our Shares as of February 28, 2019April 29, 2024 for:
each person the Corporation believes beneficially holds more than 5% of theour outstanding shares of our Shares based solely on our review of SEC filings;
each of our directors and nominees for directors;
each of the named executive officers named in the Summary Compensation Table (we collectively refer to these persons as our “named executive officers”“Named Executive Officers” or “NEOs”); and
all of our directors and executive officers as a group.
The number of Shares beneficially owned by a person includes shares subject to options held by that person that are currently exercisable or that become exercisable within 60 days of February 28, 2019.April 29, 2024. Percentage calculations assume, for each person and group, that all Shares that may be acquired by such person or group pursuant to options currently exercisable or that become exercisable within 60 days of February 28, 2019April 29, 2024 are outstanding for the purpose of computing the percentage of Shares owned by such person or group. However, such unissued Shares described above are not deemed to be outstanding for calculating the percentage of Shares owned by any other person.
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Except as otherwise indicated, the persons in the table below have sole voting and investment power with respect to all Shares shown as beneficially owned by them, subject to community property laws where applicable and subject to the information contained in the notes to the table.
Name of Beneficial Owner | Amount and | Percent of | ||||||
Named Executive Officers and Directors | ||||||||
Carol G. Ashe | - | * | ||||||
Dr. Denis Burger | 129,922 | * | ||||||
Gregory K. Chow | 821,185 | 2.04% | ||||||
Caroline Loewy | 12,500 | * | ||||||
Dr. Erich Platzer | 203,334 | * | ||||||
Dr. William G. Rice | 1,516,647 | 3.77% | ||||||
Dr. Mark D. Vincent | 113,917 | * | ||||||
Warren Whitehead | 155,834 | * | ||||||
All Executive Officers and Directors as a Group (eight persons) | 2,953,339 | 7.34% | ||||||
Beneficial Owners of More Than 5% | ||||||||
Herbert Abramson(2) | 3,717,000 | 9.23% | ||||||
DRW Securities, LLC(3) | 2,473,135 | 6.14% | ||||||
| ||||||||
*Does not exceed one percent of common shares outstanding | ||||||||
(1) | Includes for the persons listed below the following Shares subject to options held by such persons that are currently exercisable or become exercisable within 60 days of February 28, 2019: 113,668 for Dr. Denis Burger, 709,171 for Mr. Gregory Chow, 12,500 for Caroline Loewy, 88,334 for Dr. Erich Platzer, 1,383,633 for Dr. William G Rice, 107,417 for Dr. Mark D. Vincent, 105,834 for Mr. Warren Whitehead.
| |||||||
(2) | Based on information contained in a Schedule 13G/A filed with the SEC on January 16, 2019 by Herbert Abramson,22 St. Clair Avenue East, 18th Floor, Toronto, Ontario, Canada, M4T 2S3. The filing indicated that as of December 31, 2018, Mr. Abramson had sole voting and dispositive power over all of these shares, of which 103,611 shares are held through Technifund Inc., an investment holding company of which Mr. Abramson holds 100% of the outstanding preferred shares and serves as President and sole Director.
| |||||||
(3) | Based on information contained in a Schedule 13G filed with the SEC on February 8, 2019 by DRW Securities, LLC, 540 West Madison Street, Suite 2500, Chicago, Illinois 60661. The file indicated that as of December 31, 2018, DRW Securities, LLC had sole voting and dispositive power over all of these shares.
|
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors and executive officers and all persons who beneficially own more than 10 percent of the outstanding shares of our Shares to file with the SEC initial reports of ownership and reports of changes in ownership of our Shares. Directors, executive officers and greater than 10 percent beneficial owners also are required to furnish us with copies of all Section 16(a) forms they file with the SEC. To our knowledge, based on a review of the copies of such reports and amendments to such reports furnished to us with respect to the year ended December 31, 2018, and based on written representations by our directors and executive officers, all required Section 16(a) reports under the Exchange Act, for our directors, executive officers and beneficial owners of greater than 10 percent of our Shares were filed on a timely basis during the year ended December 31, 2018.
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Name of Beneficial Owner | Amount and Nature of | Percent of Class | ||||||||||||
Named Executive Officers and Directors | ||||||||||||||
Carol G. Ashe | 22,764 | * | ||||||||||||
Dr. Rafael Bejar | 123,053 | * | ||||||||||||
Dr. Denis Burger | 34,427 | * | ||||||||||||
Philippe Ledru | 40,033 | * | ||||||||||||
Fletcher Payne | 47,332 | * | ||||||||||||
Dr. Erich Platzer | 64,161 | * | ||||||||||||
Dr. William G. Rice | 326,379 | 2.0% | ||||||||||||
Dr. Bernd R. Seizinger | 21,999 | * | ||||||||||||
Mark D. Vincent | 32,994 | * | ||||||||||||
Warren Whitehead | 30,662 | * | ||||||||||||
All Executive Officers and Directors as a Group (10 persons) | 743,804 | 4.6% | ||||||||||||
Beneficial Owners of More Than 5% | ||||||||||||||
Hanmi Pharmaceuticals Co., Ltd.(2)(3) | 2,989,415 | 19.99% | ||||||||||||
*Does not exceed one percent of Shares outstanding | ||||||||||||||
(1) Includes for the persons listed below the following Shares subject to options held by such persons that are currently exercisable or become exercisable within 60 days of April 29, 2024: Ms. Carol G. Ashe: 21,163; Dr. Rafael Bejar: 115,720; Dr. Denis Burger: 32,983; Mr. Philippe Ledru: 33,333; Mr. Fletcher Payne: 40,000; Dr. Erich Platzer: 30,495; Dr. William G. Rice: 292,163; Dr. Bernd R. Seizinger: 4,999; Dr. Mark Vincent: 32,561; and Mr. Warren Whitehead: 29,662. | ||||||||||||||
(2) Based on information contained in a schedule 13D/A filed with the SEC on April 26, 2024 by Hanmi. Hanmi also owns common share purchase warrants which, when exercised, will increase the number of Shares beneficially owned by Hanmi. | ||||||||||||||
(3) Hanmi’s ownership gives effect to the 19.99% ownership blocker (the “Blocker”) restriction contained on certain of its securities. Hanmi currently holds warrants that if we did not give effect to the Blocker their ownership interest in the Corporation would be 28.6%. |
RECEIPT OF FINANCIAL STATEMENTS
At the Meeting, Shareholders will receive and consider the financial statements of the Corporation for the fiscal year ended December 31, 20182023 and the auditor’s report thereon, but no vote by the Shareholders with respect thereto is required or proposed to be taken.
PROPOSAL NO. 1—ELECTION OF DIRECTORS
Pursuant to the articles of the Corporation, the number of directors of the Corporation is set at a minimum of three and a maximum of eleven, and the Board is authorized to determine the actual number of directors to be elected from time to time. The Corporation currently has seven directors, all of whom are being proposed for nomination at the Meeting. Unless they resign, all directors elected at the Meeting will hold office until our next annual meeting of Shareholders or until their successors are elected or appointed.
On February 24, 2014,
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The CBCA provides for a statutory voting requirement for uncontested directors elections whereby shareholders are allowed to vote “for” or “against” (as opposed to “for” and “withhold”) nominees for the Board. The required vote to elect a nominee to the Board adoptedis the majority of the votes cast for their election. If a nominee does not receive a majority voting policy (the “Majority Voting Policy”, also known as a “plurality-plus” standard). The Majority Voting Policy applies to thisof the votes cast for their election, of directors. Under such policy, a directorthe nominee who iswill not be elected in an uncontested election with a greater number of votes “Withheld” than votes “For” will be considered byand the Board not to have receivedposition will remain open or, if in the supportcase of incumbent directors, such director may continue in office until the Shareholders, even though duly elected as a matterearlier of corporate law. Such a nominee will be expected to provide forthwith(i) the 90th day after the election, or (ii) the day on which his or her resignation to the Board, effective on acceptance by the Board. Unless special circumstances apply, the Board will accept the resignation. Within 90 days following the applicable meeting of the Shareholders, the Board will determine whether to acceptsuccessor is appointed or reject the resignation offer that has been submitted. Following the Board’s decision on the resignation, the Board will promptly disclose, via press release, its decision (including the reasons for rejecting the resignation offer, if applicable)elected.
Dr. Bradley Thompson resigned from the Board effective June 5, 2018. Ms. Caroline Loewy and Ms. Carol Ashe were appointed to the Board on April 25, 2018 and August 15, 2018, respectively.
The following incumbent directors of the Corporation are nominated for election at the Meeting.
Director | Experience and Qualifications | |
Carol G. Ashe(2)(3) Pennsylvania, United States Director Since August 2018 | Ms. Ashe, age
Ms. Ashe makes valuable contributions to the Board based on over 25 years of experience in the pharmaceutical and biotechnology industry in business development and as legal counsel for business development transactions and patent matters. |
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Director | Experience and Qualifications |
Dr. Denis Burger(1)(2) Oregon, United States Director Since 2007 | Dr. Burger, age Dr. Burger
Dr. Burger makes valuable contributions to the Board based on his Ph.D. in microbiology and immunology, and his more than 25 years of experience in the biotechnology industry as a senior executive and as a corporate director. | |
|
|
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Dr. Erich Platzer(2)(4) Basel, Switzerland Director Since 2014 | Dr. Platzer, age
Dr. Platzer has served as a pharmaceutical industry expert on the board of directors of multiple biotech companies in both the U.S. and Europe. Currently he serves as chairman of StartAngelsNetwork and remains a board member of this organization.
Dr. Platzer makes valuable contributions to the Board based on over twenty-five years’ experience in the biotechnology industry as a physician in hematology and medical oncology, as a corporate executive, and as a corporate |
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Director | Experience and Qualifications | |
Dr. Bernd R. Seizinger(1)(4)
Director Since 2022 | Dr. Seizinger, age 67, is an accomplished senior executive leader with more than 25 years of industry experience in both U.S. and European biotechnology and pharmaceutical companies and multiple financial advisory positions. His current positions include: Chairman of the board of directors, Oxford BioTherapeutics (U.K. private company, since 2016); Co-founder, executive chairman of the board and acting CEO, CryptoMedix (U.S. private company, since 2015) and he is currently a member of the board of directors of the following publicly traded biotech companies: Aprea Therapeutics Inc. (U.S.; NASDAQ; since 2014)*; Oncolytics Biotech Inc. (Canada/U.S.; NASDAQ and TSX; since 2015)*; BioInvent International AB (Sweden; NASDAQ Stockholm; since 2018); Nykode Therapeutics ASA (Norway; Oslo Stock Exchange; since 2014). In addition, he is currently serving on the advisory board of biotech venture capital fund Pureos (Switzerland; since 2019) and is senior advisor to biotech venture fund Hadean (Sweden & Norway; since 2018). He previously served as VP for oncology drug discovery and VP for corporate and academic alliances at Bristol-Myers Squibb (U.S.). Subsequently, he served as executive vice president and CSO of U.S. biotech company Genome Therapeutics, followed by 12 years as CEO and President of German/U.S. biopharmaceutical company GPC Biotech (listed on Frankfurt Stock Exchange and NASDAQ). Prior to his corporate appointments, Dr. Seizinger held senior faculty positions at Harvard Medical School and Massachusetts General Hospital and was a Visiting Professor at Princeton University during his tenure at Bristol-Myers Squibb. Dr. Seizinger received his M.D. from Ludwig-Maximilians-Universität Munich, and his Ph.D. from Max-Planck-Institute of Psychiatry/Neurobiology in Munich. Dr. Seizinger makes valuable contributions to the Board based on his insight and vast global biopharmaceutical experience. |
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Director | Experience and Qualifications | |
Dr. William G. Rice California, United States Director Since 2013 | Dr. Rice, age
Dr. Rice continues to serve as the Chairman of the
Dr. Rice makes valuable contributions to the Board of Directors based on his Ph.D. in Biochemistry, his extensive involvement in preclinical and clinical studies, his proven record of financings and licensing deals, and his | |
Dr. Mark D. Vincent(3) )(4) Ontario, Canada Director Since 2007 | Dr. Vincent, age
Dr. Vincent makes valuable contributions to the Board based on over 25 years of experience as a medical |
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Director | Experience and Qualifications |
Warren Whitehead(1) Ontario, Canada Director Since 2011 | Mr. Whitehead, age
Mr. Whitehead
Mr. Whitehead makes valuable contributions to the Board based on his financial expertise as a Chartered Professional Accountant (CPA) |
1. | Member of the Audit Committee. |
2. | Member of the Compensation Committee. |
3. | Member of the Corporate Governance and Nominating Committee. |
4. | Member of the R&D Committee. |
5. | Lead Director of the Corporation. |
* SEC reporting issuer
NoOther than as described below, no proposed director is, to the knowledge of the Corporation as at the date of the Proxy Statement, or has been, within 10 years before the date of this Proxy Statement, a director, chief executive officer or chief financial officer of any company (including Aptose) that: (i) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under Canadian securities legislation that was in effect for a period of more than 30 consecutive days, (ii) was subject to cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under Canadian securities legislation that was in effect for a period of more than 30 consecutive days that was issued after the proposed director ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer, (iii) while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, or (iv) become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromised with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director.
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Dr. Seizinger was a non-executive independent director of Opsona Therapeutics Ltd., a private company formed under the laws of Ireland, which filed for a creditors’ voluntary liquidation under applicable Irish law in December 2018.
Moreover, no proposed director of the Corporation has been subject, to the knowledge of the Corporation, to (i) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, or (ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a proposed director.
There are no family relationships among any of the director nominees, directors and/or any of Aptose’s executive officers. In addition, no nominee has an arrangement or understanding with another person under which he or she was or is to be selected as a director or nominee.
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The Board recommends a vote FOR the election of all nominees for directors named in this proxy statement.Proxy Statement.
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Corporate governance relates to the activities of the Board, the members of which are elected by and are accountable to the Shareholders, and takes into account the role of the individual members of management who are appointed by the Board and who are charged with the day-to-day management of Aptose. The Board believes that sound corporate governance practices are essential to contributing to the effective and efficient decision-making of management and the Board and to the enhancement of Shareholder value. The Board and management believe that Aptose has a sound governance structure in place for both management and the Board. Of particular note, Aptose has:
a Board elected annually by a majority voting, with an established |
an audit committee (“Audit |
an independent Lead Director who presides over all independent sessions of the Board; |
● | annual assessments of the Board, each committee and individual directors; |
● | established a written Disclosure and Insider Trading Policy; and |
established a written Code of Ethics. |
Each of the committee charters and the Code of Ethics can be found on the Corporation’s website at https://ir.aptose.com/corporate--governance.corporate-governance.
National Instrument 58-101 — Disclosure of Corporate Governance Practices (“NI 58-101”) and National Policy 58-201 — Corporate Governance Guidelines (“NP 58-201”) requires issuers, including Aptose, to disclose the corporate governance practices that they have adopted. NP 58-201 provides guidance on governance practices. The Corporation is also subject to National Instrument 52-110 – Audit Committees (“NI 52-110”), which has been adopted in various Canadian provinces and territories and which prescribes certain requirements in relation to audit committees.
The Board has adopted a mandate in which it explicitly assumes responsibility for stewardship of the Corporation. The Board is mandated to represent the Shareholders to ensure appropriate succession planning is in place, select the appropriate chief executive officer, assess and approve the strategic direction of the Corporation, ensure that appropriate processes for risk assessment, management and internal control are in place, monitor management performance against agreed benchmarks, and assure the integrity of financial reports. A copy of the Board Mandate is attached hereto as AppendixAPPENDIX A.
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Composition and Independence of the Board
The Corporation’s Board is currently composed of sevendirectors, a majority (six) of whom meet the independence standards under the listing standards of Nasdaq, the rules and regulations of the SEC, and National Instrument 52-110 – Audit Committees(“NI 52-110.52-110”). Each year the Board reviews the composition of the Board and assesses whether a Board member is “independent”.
Director | Independence | |
Carol Ashe |
| |
Yes | ||
Denis Burger | Yes | |
Erich Platzer | Yes | |
William G. Rice | No | |
Bernd R. Seizinger | Yes | |
Mark Vincent | Yes | |
Warren Whitehead | Yes |
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Dr. William G. Rice, Ph.D., Chairman, President and Chief Executive Officer of the Corporation is not an independent director because of his role in the Corporation’s management team.
Directors Skills and Experience Matrix
The following table provides summary information about the skills of the directors of the Corporation.
Carol Ashe | Denis Burger | Erich Platzer | William G. Rice | Bernd R. Seizinger | Mark Vincent | Warren Whitehead | ||||||||
Governance/Public Company Board Experience | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |||||||
Senior Leadership Experience | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |||||||
Financial and Accounting | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ||||||||
Industry Experience | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |||||||
Global Business Experience | ✔ | ✔ | ✔ | ✔ | ✔ | |||||||||
Business Development and M&A Experience | ✔ | ✔ | ✔ | |||||||||||
Legal | ✔ | |||||||||||||
Medicine & Science | ✔ | ✔ | ✔ | ✔ | ✔ |
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Involvement of Directors with other Reporting Issuers
The following table outlines other reporting issuers where our directors serve on the board:Board:
Director | Reporting Issuer | |
Carol G. Ashe | Elicio Therapeutics, Inc. | |
Erich Platzer | Vivoryon Therapeutics NV | |
Bernd R. Seizinger | Aprea Therapeutics, Inc. Oncolytics Biotech Inc. | |
| ||
| ||
In 2014, further toThe Corporation has a chair (the “Chair”) who is currently also the appointment of Dr. William G. Rice, Ph.D. as Chairman of the BoardPresident and Chief Executive Officer of the Corporation, createdDr. William G. Rice. As the positionChair is an executive officer of the Corporation, the Corporation also has a Lead Director to ensure that the directors have an independent leadership contact and maintain and enhance the quality of the Corporation’s corporate governance practices. Dr. Denis Burger, an independent director, is currently the Lead Director.
The Chair and the Lead Director providestogether provide leadership to the Board in discharging its mandate and also assistsassist the Board in discharging its stewardship function,functions, which includesinclude (i) satisfying itselfthemselves as to the integrity of the Chief Executive Officer and the other senior officers of the Corporation and that the Chief Executive Officer and other senior officers create a culture of integrity throughout the organization; (ii) strategic planning; (iii) identifying and managing risks; (iv) succession planning; (v) adopting a disclosure policy; (vi) internal control and management information systems; and (vii) the Corporation’s approach to corporate governance.
In addition, the Lead Director must satisfy itself as to the integrity of the Chief Executive Officer and that the Chief Executive Officer creates a culture of integrity throughout the organization. The Lead Director also provides advice, counsel and mentorship to the Chief Executive Officer.
With regard to risk management, the Board will ensureensures that the business of the Corporation is conducted in compliance with applicable laws and regulations and according to the highest ethical standards; will identify and document the financial risks and other risks that the Corporation faces in the course of its business and ensure that such risks are appropriately managed; and will adopt a disclosure policy.
The Board of Directors as a whole has responsibility for risk oversight, with more in-depth reviews of certain areas of risk being conducted by the relevant Board committees that report on their deliberations to the full Board of Directors.Board. The Board and its committees fulfill their oversight responsibilities with the supportedsupport of management, whose reporting processes are designed to provide information to the Board about the identification, assessment and management of critical risks and management’s risk mitigation strategies. Areas of risk evaluated include regulatory, operational, financial (accounting, liquidity and tax), legal, cybersecurity compensation, competitive, health, safety and reputational risks.
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The standing committees of the Board of DirectorsAudit Committee, Corporate Governance and Nominating Committee and Compensation Committee oversee risks associated with their respective principal areas of focus. The Audit Committee’s role includes a particular focus on the qualitative aspects of financial reporting to stockholders, on our processes for the management of business and financial risk, our financial reporting obligations and for compliance with significant applicable legal, ethical and regulatory requirements. The Audit Committee, along with management, is also responsible for developing and participating in a process for review of important financial and operating topics that present potential significant risk to the Corporation. The Compensation Committee is responsible for overseeing risks and exposures associated with our compensation programs and arrangements, including our executive and director compensation programs and arrangements, and management succession planning. The Corporate Governance and Nominating Committee oversees risks relating to our corporate governance matters and policies and director succession planning.
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We recognize that a fundamental part of risk management is understanding not only the risks a company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for that company. Through their involvement in setting our business strategy, the Board can assess management’s appetite for risk and also determine what constitutes an appropriate level of risk for the Corporation.
We believe our current Board leadership structure is appropriate and helps ensure proper risk oversight for the Corporation. The full Board of Directors conducts general risk oversight in connection with its role in reviewing our key long-term and short-term business strategies and monitoring on an on-goingongoing basis the implementation of our key business strategies, while our standing Board committees conduct more specific risk oversight related to their responsibilities. The Chair ensures that there is sufficient time on the Board agenda for risk management discussions.
Directors of the Corporation are expected to bring to the Board the broadest possible knowledge and depth of experience from their chosen business or profession. Directors should evidence a demonstrated ability to deal with business, financial and social issues, both nationally and internationally. This implies a capacity to provide additional strength, diversity of views and up-to-date perceptions to the Board and its deliberations. It is the mandate of the Corporate Governance and Nominating Committee to identify and recommend qualified candidates for the Board. In assessing whether identified candidates are suitable for the Board, the Corporate Governance and Nominating Committee considers: (i) the competencies and skills considered necessary for the Board as a whole; (ii) the competencies and skills that the existing directors possess and the competencies and skills nominees will bring to the Board; and (iii) whether nominees can devote sufficient time and resources to his or her duties as a member of the Board. Potential candidates for membership on the Board will not be denied consideration by reason of race, sex, religion or affiliation with some special constituency group, nor will any candidate be selected solely for such reason.
It is the Corporate Governance and Nominating Committee’s policy to consider director candidates recommended by our Shareholders in accordance with the provisions set forth in our Advance Notice By-Law, which may be accessed on our website atwww.aptose.com in the Investors section. Candidates recommended by the Corporation’s Shareholders will be considered by the Corporate Governance and Nominating Committee and, as stated in the Corporate Governance and Nominating Committee Charter, such candidates shall be evaluated in the same manner as all other director candidates. During 2018,2023, we received no recommendations of director candidates from our Shareholders. Ms. Ashe
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For additional details, please see above under “Questions About the Annual and Ms. Loewy were both recommended bySpecial Meeting and Voting Your Shares—How can I make a third party search firm.Shareholder proposal for the 2024 Annual and Special Meeting of Shareholders?”
Shareholders who wish to suggest a candidate for our Board may submit a written recommendation to our Secretary at 251 Consumers Road, Suite 1105, Toronto, ON M2J 4R3 along with the Shareholder’s name, setting forth, among other things:
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The Corporate Governance and Nominating Committee may also request that the Shareholder provide certain additional information.
For the Board to consider a candidate for nomination at the 2020 Annual Meeting, Shareholders should submit the required information to the Secretary by the date not less than 30 days before the 2020 Annual Meeting; provided, however, that if the 2020 Annual Meeting is to be held on a date that is fewer than 50 days after the date (the “Notice Date”) on which the first public announcement of the meeting was made, notice by the nominating Shareholder may be given not later than the close of business on the tenth day following the Notice Date.
The Corporate Governance and Nominating Committee takes diversity, including diversity of experience, perspective and education, raceas well as individuals from other designated groups such as women, Aboriginal people, persons with disabilities and gender,members of visible minorities (collectively, the “Designated Groups”), into consideration as part of its overall recruitment and selection process in respect of its Board and management. The Corporation does not have a formal policy on the representation of women or other members of the Designated Groups on the Board or management of the Corporation. The Board does not believe that a formal policy will necessarily result in the identification or selection of the best candidates. As such, the Corporation does not see any meaningful value in adopting a formal policy in this respect at this time as it does not believe that it would further enhance diversity, including gender diversity, beyond the current recruitment and selection process carried out by the Corporate Governance and Nominating Committee. However, the Board is mindful of the benefit of diversity on the Board and management of the Corporation and the need to maximize the effectiveness of the Board and management and their respective decision-making abilities.
The Corporate Governance and Nominating Committee believes that having a diverse Board and management team offers a depth of perspective and enhances Board and management operations. The Corporate Governance and Nominating Committee values diversity of experience, perspective, education and race, and genderconsiders the representation of women and other members of the Designated Groups, as part of its overall annual evaluation of director nominees for election or re-election as well as candidates for management positions.
In addition, in searches for new directors or officers, the Corporate Governance and Nominating Committee will consider the level of female representation of women and diversityother members of the Designated Groups on the Board and in management and this will be one of several factors used in its search process. This will be achieved through continuously monitoring the level of female representation of women and other members of the Designated Groups on the Board and in management positions and, where appropriate, recruiting qualified female candidates who are members of the Designated Groups as part of the Corporation’s overall recruitment and selection process to fill Board or management positions, as the need arises, through vacancies, growth or otherwise.
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The Board has not adopted targets regarding the representation of women and other members of Designated Groups on the Board and in executive officer positions due to the small size of the Corporation and the need to consider a balance of criteria in each individual appointment. It is important that each appointment to the Board or in executive officer positions be made, and be perceived as being made, on the merits of the individual and the needs of the Corporation at the relevant time. In addition, targets based on specific criteria such as gender or race, could limit the Board’s ability to ensure that the overall composition of the Board or management of the Corporation meets the needs of the Corporation. We are actively seeking additional candidates to join our Board and we strongly prioritize diverse candidates.
Currently, none (0%one out of seven (14%) members of the Board and one out of eight (13%) of the executiveofficers are women. One officer identifies as being of “Hispanic, Latinx or Spanish origin” and one as being of “Asian” origin, and one director identifies as being part of the LGBTQ+ group, otherwise no members of the Board or officers of the Corporation are women, and two (29%)who self-identify as being part of any of the directors are women.Designated Groups.
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Board Diversity Matrix
The table below provides certain highlights of the composition of our Board members as of December 31, 2023. Each of the categories listed in the table below has the meaning as it is used in Nasdaq Rule 5605(f).
Total Number of Directors | 7 | |||||||
Female | Male | Non- Binary | Did Not Disclose Gender | |||||
Part I: Gender Identity | ||||||||
Directors | 1 | 6 | - | - | ||||
Part II: Demographic Background | ||||||||
African American or Black | - | - | - | - | ||||
Alaskan Native or Native American | - | - | - | - | ||||
Asian | - | - | - | - | ||||
Hispanic or Latinx | - | - | - | - | ||||
Native Hawaiian or Pacific Islander | - | - | - | - | ||||
White | 1 | 6 | - | - | ||||
Two or More Races or Ethnicities | - | - | - | - | ||||
LGBTQ+ | 1 | |||||||
Did Not Disclose Demographic Background | - |
Director Term Limits and Other Mechanisms of Board Renewal
The Board has not adopted term limits for directors or other mechanisms of board renewal at this time as it believes that the imposition of director term limits or other mechanisms of board renewal on a board implicitly discounts the value of experience and continuity amongst the boardBoard members and runs the risk of excluding experienced and potentially valuable board members as a result of arbitrary determination. The Board believes that it can best strike a balance between continuity and fresh perspectives without mandated term limits or other mechanisms of board renewal.
The Board has developed written position descriptions, which are reviewed annually, for the ChairChairman and the chairs of each of the audit committee, the compensation committee and the corporate governance and nominating committee.committees. The Chief Executive Officer also has a written position description that has been approved by the Board and is reviewed annually.
Orientation and Continuing Education
It is the mandate of the Corporate Governance and Nominating Committee to ensure that a process is established for the orientation and education of new directors that addresses the nature and operation of the Corporation’s business and their responsibilities and duties as directors (including the contribution individual directors are expected to make and the commitment of time and resources that the Corporation expects from its directors).
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The orientation includes an overview of the Corporation’s history and operations, a review of industry conditions and competition, an introduction to the Corporation’s management team and corporate and business information. Any further orientation is dependent on the needs of the new member and may include items such as formal training sessions and attendance at seminars.
With respect to the continuing education of directors, the Corporate Governance and Nominating Committee ensures that directors receive adequate information and continuing education opportunities on an ongoing basis to enable directors to maintain their skills and abilities as directors and to ensure their knowledge and understanding of the Corporation’s business remains current.
It is the Board’s mandate, in conjunction with the Corporate Governance and Nominating Committee, to assess the participation, contributions and effectiveness of the Chair and the individual members of the Board on an annual basis. The Board also monitors the effectiveness of the Board and its committees and the actions of the Board as viewed by the individual directors and senior management.
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The Board has developed a formal questionnaire to be completed by each director on an annual basis for the purpose of formally assessing the effectiveness of the Board as a whole, committees of the Board, and the contribution of individual directors. These questionnaires, and the issues arising therefrom, are intended to be reviewed and assessed by the Lead Director on an annual basis or more frequently from time to time as the need arises. The Lead Director takes appropriate action as required based on the results obtained.
As stated in the Board Mandate, all directors are expected to attend each meeting in person, by phone or by video conference depending on the format of the meeting, to the extent practicable. The Board of Directors and its committees held 13seven meetings during 2018. All of our directors attended at least 75 percent or more of2023, the aggregate meetings ofAudit Committee met four times, the Board of DirectorsCorporate Governance and all committees on which they served during our fiscal 2018. All ofNominating Committee met four times, the directors, withCompensation Committee met four times and the exception of Ms. Ashe, who was not yet a director at that time, attended last year’s Annual Meeting of Shareholders.R&D Committee met once.
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The following table illustrates the attendance record of each director for all Board and committee meetings held for the year ended December 31, 2018.2023.
Director | Meetings Attended |
Audit Committee | Corporate Governance and Nominating Committee | Compensation Committee | R&D Committee | Board | ||||||
Carol G. Ashe | - | 4 of 4 | 4 of 4 | - | 7 of 7 | |||||
Denis Burger | 4 of 4 | 4 of 4 | 4 of 4 | - | 7 of 7 | |||||
Erich Platzer | - | - | 3 of 4 | 1 of 1 | 7 of 7 | |||||
William G. Rice | 4 of 4(1) | 4 of 4(1) | - | 1 of 1 | 7 of 7 | |||||
Bernd R. Seizinger | 4 of 4 | - | - | 1 of 1 | 6 of | |||||
Mark Vincent | - | 4 of 4 | ||||||||
1 of | 7 of 7 | |||||||||
Warren Whitehead | 4 of | - | - | - | 7 of 7 |
(1) | Although not a member of the Audit Committee and Corporate Governance and Nominating Committee, Dr. Rice participated in all meetings of such committees for the year ended December 31, 2023 on invitation as a member of management. |
All director nominees are expected to attend the Meeting.William G. Rice, Denis Burger, Carol G. Ashe, Erich Platzer, Bernd Seizinger, Mark Vincent and Warren Whitehead attended last year’s Annual and Special Meeting of Shareholders.
The independent directors meet regularly without the presence of the non-independent directors and members of management. During the year ended December 31, 2018,2023, independent directors met twicesix times without the presence of the management non-independent director as part of meetings of the Board, and members of the Audit Committee and Corporate Governance and Nominating Committee each met four times without the presence of management as part of meetings of their committees. All meetings of the Compensation Committee in 2023 were held without the presence of management (including the non-independent directors. director).
We have adopted a code of ethics for directors, officers (including our principal executive officer, principal financial officer and principal accounting officer) and employees, known as the Code of Business Conduct and Ethics. The Code of Business Conduct and Ethics is available on our website at http://www.aptose.com under the Corporate Governance section of our Investors page. We will promptly disclose on our website (i) the nature of any amendment to the policy that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and (ii) the nature of any waiver, including an implicit waiver, from a provision of the policy that is granted to one of these specified individuals that is required to be disclosed pursuant to SEC rules and regulations, the name of such person who is granted the waiver and the date of the waiver.
The Corporate Governance and Nominating Committee regularly monitors compliance with the Code through communications with management and reports through the Disclosure and Insider Trading Policy (as described below) and ensures that management of the Corporation encourages and promotes a culture of ethical business conduct. A copy of the Code may be found by accessing the SEC’s EDGAR filing database atwww.sec.gov,, on SEDARSEDAR+ at www.sedar.comwww.sedarplus.ca and on our website atwww.aptose.com. www.aptose.com.
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The Corporation has developed a Disclosure and Insider Trading Policy that covers “whistle blowing” and provides an anonymous means for employees and officers to report violations of the Code or any other corporate policies, in addition to providing guidelines on employee trading in the Corporation’s securities.
The Board has not granted any waiver of the Code in favor of a director or officer of the Corporation. No material change reports have been filed since the beginning of the Corporation’s most recently completed fiscal year that pertain to any conduct of a director or executive officer that constitutes a departure from the Code.
The Corporate Governance and Nominating Committee monitors the disclosure of conflicts of interest by directors and ensures that no director will vote or participate in a discussion on a matter in respect of which such director has a material interest.
Shareholder Communications with the Board
Shareholders may communicate with the Board or any one particular director by sending correspondence, addressed to Mr. Gregory K. Chow, AptoseFletcher Payne, Senior Vice President, Chief Financial Officer, Chief Business Officer and Corporate Secretary, 12770 High Bluff Drive, San Diego, California, 92130, with an instruction to forward the communication to the Board or one or more particular directors. He will forward promptly all such shareholder communications to the Board, or the one or more particular directors, after ascertaining whether the communications are appropriate to the duties and responsibilities of the Board.
The Corporation has a standing Audit Committee, a Corporate Governance and Nominating Committee and a Compensation Committee, each of which are composed entirely of independent directors. In 2023, the Corporation established the R&D Committee. Each current member of the R&D Committee, except for Dr. Rice, qualifies as “independent” under the listing standards of Nasdaq, the rules and regulations of the SEC and NI 52-110.
Audit Committee
Membership. The current members of the Audit Committee are Caroline Loewy, Denis Burger, Bernd R. Seizinger and Warren Whitehead. Mr. Whitehead is the Chair of the Audit Committee. The Board has determined that all members of the Audit Committee qualify as financial experts under the listing standards of Nasdaq.
In addition, each current member of the Audit Committee qualifies as “independent” for purposes of membership on audit committees under the listing standards of Nasdaq, the rules and regulations of the SEC and NI 52-110.
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Meetings. The Audit Committee met four times during the period from January 1, 20182023 until December 31, 2018.
2023.
Committee Mandate. Among its responsibilities, the Audit Committee:
● | serves as an independent and objective party to monitor the integrity of our financial reporting process and systems of internal controls regarding finance, accounting, and legal compliance, including the review of our consolidated financial statements, MD&A and annual and interim results; |
● | identifies and monitors the management of the principal risksthat could impact our financial reporting; |
● | monitors the independence and performance of our independent auditors, including the pre-approval of all audit fees and all permitted non-audit services in accordance with federal securities laws and the rules and regulations of the SEC; |
● | provides an avenue of communication among the independent auditors, management, and the Board; and |
● | encourages continuous improvement of, and foster adherence to, our policies, procedures and practices at all levels. |
The Audit Committee is also responsible for implementing and overseeing our whistle-blowing procedures. procedures and reviewing the Corporation’s plans to mitigate cybersecurity risks and respond to data breaches.
Corporate Governance
Denis Burger
Erich Platzer
William G. Rice
Bernd R. Seizinger
Mark Vincent
Warren Whitehead
Dr. William G. Rice, Ph.D., Chairman, President and Chief Executive Officer of the Corporation is not an independent director because of his role in the Corporation’s management team.
Directors Skills and Experience Matrix
The following table provides summary information about the skills of the directors of the Corporation.
Carol Ashe | Denis Burger | Erich Platzer | William G. Rice | Bernd R. Seizinger | Mark Vincent | Warren Whitehead | ||||||||
Governance/Public Company Board Experience | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |||||||
Senior Leadership Experience | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |||||||
Financial and | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ||||||||
Industry Experience | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |||||||
Global Business Experience | ✔ | ✔ | ✔ | ✔ | ✔ | |||||||||
Business Development and M&A Experience | ✔ | ✔ | ✔ | |||||||||||
Legal | ✔ | |||||||||||||
Medicine & Science | ✔ | ✔ | ✔ | ✔ | ✔ |
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Involvement of Directors with other Reporting Issuers
The following table outlines other reporting issuers where our directors serve on the Board:
Director | Reporting Issuer | |
Carol G. Ashe | Elicio Therapeutics, Inc. | |
Erich Platzer | Vivoryon Therapeutics NV | |
Bernd R. Seizinger | Aprea Therapeutics, Inc.
Nykode Therapeutics ASA BioInvent International AB |
The Corporation has a chair (the “Chair”) who is currently also the President and Chief Executive Officer of the Corporation, Dr. William G. Rice. As the Chair is an executive officer of the Corporation, the Corporation also has a Lead Director to ensure that the directors have an independent leadership contact and maintain and enhance the quality of the Corporation’s corporate governance practices. Dr. Denis Burger, an independent director, is currently the Lead Director.
The Chair and the Lead Director together provide leadership to the Board in discharging its mandate and also assist the Board in discharging its stewardship functions, which include (i) satisfying themselves as to the integrity of the senior officers of the Corporation and that the senior officers create a culture of integrity throughout the organization; (ii) strategic planning; (iii) identifying and managing risks; (iv) succession planning; (v) adopting a disclosure policy; (vi) internal control and management information systems; and (vii) the Corporation’s approach to corporate governance.
In addition, the Lead Director must satisfy itself as to the integrity of the Chief Executive Officer and that the Chief Executive Officer creates a culture of integrity throughout the organization. The Lead Director also provides advice, counsel and mentorship to the Chief Executive Officer.
With regard to risk management, the Board ensures that the business of the Corporation is conducted in compliance with applicable laws and regulations and according to the highest ethical standards; will identify and document the financial risks and other risks that the Corporation faces in the course of its business and ensure that such risks are appropriately managed; and will adopt a disclosure policy.
The Board as a whole has responsibility for risk oversight, with more in-depth reviews of certain areas of risk being conducted by the relevant Board committees that report on their deliberations to the full Board. The Board and its committees fulfill their oversight responsibilities with the support of management, whose reporting processes are designed to provide information to the Board about the identification, assessment and management of critical risks and management’s risk mitigation strategies. Areas of risk evaluated include regulatory, operational, financial (accounting, liquidity and tax), legal, cybersecurity compensation, competitive, health, safety and reputational risks.
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The Audit Committee, Corporate Governance and Nominating Committee and Compensation Committee oversee risks associated with their respective principal areas of focus. The Audit Committee’s role includes a particular focus on the qualitative aspects of financial reporting to stockholders, on our processes for the management of business and financial risk, our financial reporting obligations and for compliance with significant applicable legal, ethical and regulatory requirements. The Audit Committee, along with management, is also responsible for developing and participating in a process for review of important financial and operating topics that present potential significant risk to the Corporation. The Compensation Committee is responsible for overseeing risks and exposures associated with our compensation programs and arrangements, including our executive and director compensation programs and arrangements, and management succession planning. The Corporate Governance and Nominating Committee oversees risks relating to our corporate governance matters and policies and director succession planning.
We recognize that a fundamental part of risk management is understanding not only the risks a company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for that company. Through their involvement in setting our business strategy, the Board can assess management’s appetite for risk and also determine what constitutes an appropriate level of risk for the Corporation.
We believe our current Board leadership structure is appropriate and helps ensure proper risk oversight for the Corporation. The full Board conducts general risk oversight in connection with its role in reviewing our key long-term and short-term business strategies and monitoring on an ongoing basis the implementation of our key business strategies, while our standing Board committees conduct more specific risk oversight related to their responsibilities. The Chair ensures that there is sufficient time on the Board agenda for risk management discussions.
Directors of the Corporation are expected to bring to the Board the broadest possible knowledge and depth of experience from their chosen business or profession. Directors should evidence a demonstrated ability to deal with business, financial and social issues, both nationally and internationally. This implies a capacity to provide additional strength, diversity of views and up-to-date perceptions to the Board and its deliberations. It is the mandate of the Corporate Governance and Nominating Committee to identify and recommend qualified candidates for the Board. In assessing whether identified candidates are suitable for the Board, the Corporate Governance and Nominating Committee considers: (i) the competencies and skills considered necessary for the Board as a whole; (ii) the competencies and skills that the existing directors possess and the competencies and skills nominees will bring to the Board; and (iii) whether nominees can devote sufficient time and resources to his or her duties as a member of the Board. Potential candidates for membership on the Board will not be denied consideration by reason of race, sex, religion or affiliation with some special constituency group, nor will any candidate be selected solely for such reason.
It is the Corporate Governance and Nominating Committee’s policy to consider director candidates recommended by our Shareholders in accordance with the provisions set forth in our Advance Notice By-Law, which may be accessed on our website at www.aptose.com in the Investors section. Candidates recommended by the Corporation’s Shareholders will be considered by the Corporate Governance and Nominating Committee and, as stated in the Corporate Governance and Nominating Committee Charter, such candidates shall be evaluated in the same manner as all other director candidates. During 2023, we received no recommendations of director candidates from our Shareholders.
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For additional details, please see above under “Questions About the Annual and Special Meeting and Voting Your Shares—How can I make a Shareholder proposal for the 2024 Annual and Special Meeting of Shareholders?”
The Corporate Governance and Nominating Committee takes diversity, including diversity of experience, perspective and education, as well as individuals from other designated groups such as women, Aboriginal people, persons with disabilities and members of visible minorities (collectively, the “Designated Groups”), into consideration as part of its overall recruitment and selection process in respect of its Board and management. The Corporation does not have a formal policy on the representation of women or other members of the Designated Groups on the Board or management of the Corporation. The Board does not believe that a formal policy will necessarily result in the identification or selection of the best candidates. As such, the Corporation does not see any meaningful value in adopting a formal policy in this respect at this time as it does not believe that it would further enhance diversity, including gender diversity, beyond the current recruitment and selection process carried out by the Corporate Governance and Nominating Committee. However, the Board is mindful of the benefit of diversity on the Board and management of the Corporation and the need to maximize the effectiveness of the Board and management and their respective decision-making abilities.
The Corporate Governance and Nominating Committee believes that having a diverse Board and management team offers a depth of perspective and enhances Board and management operations. The Corporate Governance and Nominating Committee values diversity of experience, perspective, education and race, and considers the representation of women and other members of the Designated Groups, as part of its overall annual evaluation of director nominees for election or re-election as well as candidates for management positions.
In addition, in searches for new directors or officers, the Corporate Governance and Nominating Committee will consider the level of representation of women and other members of the Designated Groups on the Board and in management and this will be one of several factors used in its search process. This will be achieved through continuously monitoring the level of representation of women and other members of the Designated Groups on the Board and in management positions and, where appropriate, recruiting qualified candidates who are members of the Designated Groups as part of the Corporation’s overall recruitment and selection process to fill Board or management positions, as the need arises, through vacancies, growth or otherwise.
The Board has not adopted targets regarding the representation of women and other members of Designated Groups on the Board and in executive officer positions due to the small size of the Corporation and the need to consider a balance of criteria in each individual appointment. It is important that each appointment to the Board or in executive officer positions be made, and be perceived as being made, on the merits of the individual and the needs of the Corporation at the relevant time. In addition, targets based on specific criteria such as gender or race, could limit the Board’s ability to ensure that the overall composition of the Board or management of the Corporation meets the needs of the Corporation. We are actively seeking additional candidates to join our Board and we strongly prioritize diverse candidates.
Currently, one out of seven (14%) members of the Board and one out of eight (13%) of the officers are women. One officer identifies as being of “Hispanic, Latinx or Spanish origin” and one as being of “Asian” origin, and one director identifies as being part of the LGBTQ+ group, otherwise no members of the Board or officers of the Corporation who self-identify as being part of any of the Designated Groups.
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Board Diversity Matrix
The table below provides certain highlights of the composition of our Board members as of December 31, 2023. Each of the categories listed in the table below has the meaning as it is used in Nasdaq Rule 5605(f).
Total Number of Directors | 7 | |||||||
Female | Male | Non- Binary | Did Not Disclose Gender | |||||
Part I: Gender Identity | ||||||||
Directors | 1 | 6 | - | - | ||||
Part II: Demographic Background | ||||||||
African American or Black | - | - | - | - | ||||
Alaskan Native or Native American | - | - | - | - | ||||
Asian | - | - | - | - | ||||
Hispanic or Latinx | - | - | - | - | ||||
Native Hawaiian or Pacific Islander | - | - | - | - | ||||
White | 1 | 6 | - | - | ||||
Two or More Races or Ethnicities | - | - | - | - | ||||
LGBTQ+ | 1 | |||||||
Did Not Disclose Demographic Background | - |
Director Term Limits and Other Mechanisms of Board Renewal
The Board has not adopted term limits for directors or other mechanisms of board renewal at this time as it believes that the imposition of director term limits or other mechanisms of board renewal on a board implicitly discounts the value of experience and continuity amongst the Board members and runs the risk of excluding experienced and potentially valuable board members as a result of arbitrary determination. The Board believes that it can best strike a balance between continuity and fresh perspectives without mandated term limits or other mechanisms of board renewal.
The Board has developed written position descriptions, which are reviewed annually, for the Chairman and the chairs of each of the committees. The Chief Executive Officer also has a written position description that has been approved by the Board and is reviewed annually.
Orientation and Continuing Education
It is the mandate of the Corporate Governance and Nominating Committee to ensure that a process is established for the orientation and education of new directors that addresses the nature and operation of the Corporation’s business and their responsibilities and duties as directors (including the contribution individual directors are expected to make and the commitment of time and resources that the Corporation expects from its directors).
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The orientation includes an overview of the Corporation’s history and operations, a review of industry conditions and competition, an introduction to the Corporation’s management team and corporate and business information. Any further orientation is dependent on the needs of the new member and may include items such as formal training sessions and attendance at seminars.
With respect to the continuing education of directors, the Corporate Governance and Nominating Committee ensures that directors receive adequate information and continuing education opportunities on an ongoing basis to enable directors to maintain their skills and abilities as directors and to ensure their knowledge and understanding of the Corporation’s business remains current.
It is the Board’s mandate, in conjunction with the Corporate Governance and Nominating Committee, to assess the participation, contributions and effectiveness of the Chair and the individual members of the Board on an annual basis. The Board also monitors the effectiveness of the Board and its committees and the actions of the Board as viewed by the individual directors and senior management.
The Board has developed a formal questionnaire to be completed by each director on an annual basis for the purpose of formally assessing the effectiveness of the Board as a whole, committees of the Board, and the contribution of individual directors. These questionnaires, and the issues arising therefrom, are intended to be reviewed and assessed by the Lead Director on an annual basis or more frequently from time to time as the need arises. The Lead Director takes appropriate action as required based on the results obtained.
As stated in the Board Mandate, all directors are expected to attend each meeting in person, by phone or by video conference depending on the format of the meeting, to the extent practicable. The Board of Directors held seven meetings during 2023, the Audit Committee met four times, the Corporate Governance and Nominating Committee met four times, the Compensation Committee met four times and the R&D Committee met once.
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The following table illustrates the attendance record of each director for all Board and committee meetings held for the year ended December 31, 2023.
Director | Meetings Attended |
Audit Committee | Corporate Governance and Nominating Committee | Compensation Committee | R&D Committee | Board | ||||||
Carol G. Ashe | - | 4 of 4 | 4 of 4 | - | 7 of 7 | |||||
Denis Burger | 4 of 4 | 4 of 4 | 4 of 4 | - | 7 of 7 | |||||
Erich Platzer | - | - | 3 of 4 | 1 of 1 | 7 of 7 | |||||
William G. Rice | 4 of 4(1) | 4 of 4(1) | - | 1 of 1 | 7 of 7 | |||||
Bernd R. Seizinger | 4 of 4 | - | - | 1 of 1 | 6 of 7 | |||||
Mark Vincent | - | 4 of 4 | - | 1 of 1 | 7 of 7 | |||||
Warren Whitehead | 4 of 4 | - | - | - | 7 of 7 |
(1) | Although not a member of the Audit Committee and Corporate Governance and Nominating Committee, |
All director nominees are expected to attend the Meeting.William G. Rice, Denis Burger, Carol G. Ashe, Erich Platzer, Bernd Seizinger, Mark Vincent and Warren Whitehead attended last year’s Annual and Special Meeting of Shareholders.
The independent directors meet regularly without the presence of the non-independent directors and members of management. During the year ended December 31, 2023, independent directors met six times without the presence of the management non-independent director as part of meetings of the Board, and members of the Audit Committee and Corporate Governance and Nominating Committee each met four times without the presence of management as part of meetings of their committees. All meetings of the Compensation Committee in 2023 were held without the presence of management (including the non-independent director).
We have adopted a code of ethics for directors, officers (including our principal executive officer, principal financial officer and principal accounting officer) and employees, known as the Code of Business Conduct and Ethics. The Code of Business Conduct and Ethics is available on our website at http://www.aptose.com under the Corporate Governance section of our Investors page. We will promptly disclose on our website (i) the nature of any amendment to the policy that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and (ii) the nature of any waiver, including an implicit waiver, from a provision of the policy that is granted to one of these specified individuals that is required to be disclosed pursuant to SEC rules and regulations, the name of such person who is granted the waiver and the date of the waiver.
The Corporate Governance and Nominating Committee regularly monitors compliance with the Code through communications with management and reports through the Disclosure and Insider Trading Policy (as described below) and ensures that management of the Corporation encourages and promotes a culture of ethical business conduct. A copy of the Code may be found by accessing the SEC’s EDGAR filing database at www.sec.gov, on SEDAR+ at www.sedarplus.ca and on our website at www.aptose.com.
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The Corporation has developed a Disclosure and Insider Trading Policy that covers “whistle blowing” and provides an anonymous means for employees and officers to report violations of the Code or any other corporate policies, in addition to providing guidelines on employee trading in the Corporation’s securities.
The Board has not granted any waiver of the Code in favor of a director or officer of the Corporation. No material change reports have been filed since the beginning of the Corporation’s most recently completed fiscal year that pertain to any conduct of a director or executive officer that constitutes a departure from the Code.
The Corporate Governance and Nominating Committee monitors the disclosure of conflicts of interest by directors and ensures that no director will vote or participate in a discussion on a matter in respect of which such director has a material interest.
Shareholder Communications with the Board
Shareholders may communicate with the Board or any one particular director by sending correspondence, addressed to Mr. Fletcher Payne, Senior Vice President, Chief Financial Officer, Chief Business Officer and Corporate Secretary, 12770 High Bluff Drive, San Diego, California, 92130, with an instruction to forward the communication to the Board or one or more particular directors. He will forward promptly all such shareholder communications to the Board, or the one or more particular directors, after ascertaining whether the communications are appropriate to the duties and responsibilities of the Board.
The Corporation has a standing Audit Committee, a Corporate Governance and Nominating Committee and a Compensation Committee, each of which are composed entirely of independent directors. In 2023, the Corporation established the R&D Committee. Each current member of the R&D Committee, except for Dr. Rice, qualifies as “independent” under the listing standards of Nasdaq, the rules and regulations of the SEC and NI 52-110.
Audit Committee
Membership. The current members of the Audit Committee are Denis Burger, Bernd R. Seizinger and Warren Whitehead. Mr. Whitehead is the Chair of the Audit Committee. The Board has determined that all members of the Audit Committee qualify as financial experts under the listing standards of Nasdaq.
In addition, each current member of the Audit Committee qualifies as “independent” for purposes of membership on audit committees under the listing standards of Nasdaq, the rules and regulations of the SEC and NI 52-110.
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Meetings. The Audit Committee met four times during the period from January 1, 2023 until December 31, 2023.
Committee Mandate. Among its responsibilities, the Audit Committee:
● | serves as an independent and objective party to monitor the integrity of our financial reporting process and systems of internal controls regarding finance, accounting, and legal compliance, including the review of our consolidated financial statements, MD&A and annual and interim results; |
● | identifies and monitors the management of the principal risksthat could impact our financial reporting; |
● | monitors the independence and performance of our independent auditors, including the pre-approval of all audit fees and all permitted non-audit services in accordance with federal securities laws and the rules and regulations of the
The Audit Committee is also responsible for implementing and overseeing our whistle-blowing procedures and reviewing the Corporation’s plans to mitigate cybersecurity risks and respond to data breaches. Denis Burger | Yes | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Yes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
William G. Rice | No | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bernd R. Seizinger | Yes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mark Vincent | Yes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warren Whitehead | Yes |
Dr. William G. Rice, Ph.D., Chairman, President and Chief Executive Officer of the Corporation is not an independent director because of his role in the Corporation’s management team.
Directors Skills and Experience Matrix
The following table provides summary information about the skills of the directors of the Corporation.
Carol Ashe | Denis Burger | Erich Platzer | William G. Rice | Bernd R. Seizinger | Mark Vincent | Warren Whitehead | ||||||||
Governance/Public Company Board Experience | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |||||||
Senior Leadership Experience | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |||||||
Financial and Accounting | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ||||||||
Industry Experience | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |||||||
Global Business Experience | ✔ | ✔ | ✔ | ✔ | ✔ | |||||||||
Business Development and M&A Experience | ✔ | ✔ | ✔ | |||||||||||
Legal | ✔ | |||||||||||||
Medicine & Science | ✔ | ✔ | ✔ | ✔ | ✔ |
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Involvement of Directors with other Reporting Issuers
The following table outlines other reporting issuers where our directors serve on the Board:
Director | Reporting Issuer | |
Carol G. Ashe | Elicio Therapeutics, Inc. | |
Erich Platzer | Vivoryon Therapeutics NV | |
Bernd R. Seizinger | Aprea Therapeutics, Inc.
Nykode Therapeutics ASA BioInvent International AB |
The Corporation has a chair (the “Chair”) who is currently also the President and Chief Executive Officer of the Corporation, Dr. William G. Rice. As the Chair is an executive officer of the Corporation, the Corporation also has a Lead Director to ensure that the directors have an independent leadership contact and maintain and enhance the quality of the Corporation’s corporate governance practices. Dr. Denis Burger, an independent director, is currently the Lead Director.
The Chair and the Lead Director together provide leadership to the Board in discharging its mandate and also assist the Board in discharging its stewardship functions, which include (i) satisfying themselves as to the integrity of the senior officers of the Corporation and that the senior officers create a culture of integrity throughout the organization; (ii) strategic planning; (iii) identifying and managing risks; (iv) succession planning; (v) adopting a disclosure policy; (vi) internal control and management information systems; and (vii) the Corporation’s approach to corporate governance.
In addition, the Lead Director must satisfy itself as to the integrity of the Chief Executive Officer and that the Chief Executive Officer creates a culture of integrity throughout the organization. The Lead Director also provides advice, counsel and mentorship to the Chief Executive Officer.
With regard to risk management, the Board ensures that the business of the Corporation is conducted in compliance with applicable laws and regulations and according to the highest ethical standards; will identify and document the financial risks and other risks that the Corporation faces in the course of its business and ensure that such risks are appropriately managed; and will adopt a disclosure policy.
The Board as a whole has responsibility for risk oversight, with more in-depth reviews of certain areas of risk being conducted by the relevant Board committees that report on their deliberations to the full Board. The Board and its committees fulfill their oversight responsibilities with the support of management, whose reporting processes are designed to provide information to the Board about the identification, assessment and management of critical risks and management’s risk mitigation strategies. Areas of risk evaluated include regulatory, operational, financial (accounting, liquidity and tax), legal, cybersecurity compensation, competitive, health, safety and reputational risks.
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The Audit Committee, Corporate Governance and Nominating Committee and Compensation Committee oversee risks associated with their respective principal areas of focus. The Audit Committee’s role includes a particular focus on the qualitative aspects of financial reporting to stockholders, on our processes for the management of business and financial risk, our financial reporting obligations and for compliance with significant applicable legal, ethical and regulatory requirements. The Audit Committee, along with management, is also responsible for developing and participating in a process for review of important financial and operating topics that present potential significant risk to the Corporation. The Compensation Committee is responsible for overseeing risks and exposures associated with our compensation programs and arrangements, including our executive and director compensation programs and arrangements, and management succession planning. The Corporate Governance and Nominating Committee oversees risks relating to our corporate governance matters and policies and director succession planning.
We recognize that a fundamental part of risk management is understanding not only the risks a company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for that company. Through their involvement in setting our business strategy, the Board can assess management’s appetite for risk and also determine what constitutes an appropriate level of risk for the Corporation.
We believe our current Board leadership structure is appropriate and helps ensure proper risk oversight for the Corporation. The full Board conducts general risk oversight in connection with its role in reviewing our key long-term and short-term business strategies and monitoring on an ongoing basis the implementation of our key business strategies, while our standing Board committees conduct more specific risk oversight related to their responsibilities. The Chair ensures that there is sufficient time on the Board agenda for risk management discussions.
Directors of the Corporation are expected to bring to the Board the broadest possible knowledge and depth of experience from their chosen business or profession. Directors should evidence a demonstrated ability to deal with business, financial and social issues, both nationally and internationally. This implies a capacity to provide additional strength, diversity of views and up-to-date perceptions to the Board and its deliberations. It is the mandate of the Corporate Governance and Nominating Committee to identify and recommend qualified candidates for the Board. In assessing whether identified candidates are suitable for the Board, the Corporate Governance and Nominating Committee considers: (i) the competencies and skills considered necessary for the Board as a whole; (ii) the competencies and skills that the existing directors possess and the competencies and skills nominees will bring to the Board; and (iii) whether nominees can devote sufficient time and resources to his or her duties as a member of the Board. Potential candidates for membership on the Board will not be denied consideration by reason of race, sex, religion or affiliation with some special constituency group, nor will any candidate be selected solely for such reason.
It is the Corporate Governance and Nominating Committee’s policy to consider director candidates recommended by our Shareholders in accordance with the provisions set forth in our Advance Notice By-Law, which may be accessed on our website at www.aptose.com in the Investors section. Candidates recommended by the Corporation’s Shareholders will be considered by the Corporate Governance and Nominating Committee and, as stated in the Corporate Governance and Nominating Committee Charter, such candidates shall be evaluated in the same manner as all other director candidates. During 2023, we received no recommendations of director candidates from our Shareholders.
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For additional details, please see above under “Questions About the Annual and Special Meeting and Voting Your Shares—How can I make a Shareholder proposal for the 2024 Annual and Special Meeting of Shareholders?”
The Corporate Governance and Nominating Committee takes diversity, including diversity of experience, perspective and education, as well as individuals from other designated groups such as women, Aboriginal people, persons with disabilities and members of visible minorities (collectively, the “Designated Groups”), into consideration as part of its overall recruitment and selection process in respect of its Board and management. The Corporation does not have a formal policy on the representation of women or other members of the Designated Groups on the Board or management of the Corporation. The Board does not believe that a formal policy will necessarily result in the identification or selection of the best candidates. As such, the Corporation does not see any meaningful value in adopting a formal policy in this respect at this time as it does not believe that it would further enhance diversity, including gender diversity, beyond the current recruitment and selection process carried out by the Corporate Governance and Nominating Committee. However, the Board is mindful of the benefit of diversity on the Board and management of the Corporation and the need to maximize the effectiveness of the Board and management and their respective decision-making abilities.
The Corporate Governance and Nominating Committee believes that having a diverse Board and management team offers a depth of perspective and enhances Board and management operations. The Corporate Governance and Nominating Committee values diversity of experience, perspective, education and race, and considers the representation of women and other members of the Designated Groups, as part of its overall annual evaluation of director nominees for election or re-election as well as candidates for management positions.
In addition, in searches for new directors or officers, the Corporate Governance and Nominating Committee will consider the level of representation of women and other members of the Designated Groups on the Board and in management and this will be one of several factors used in its search process. This will be achieved through continuously monitoring the level of representation of women and other members of the Designated Groups on the Board and in management positions and, where appropriate, recruiting qualified candidates who are members of the Designated Groups as part of the Corporation’s overall recruitment and selection process to fill Board or management positions, as the need arises, through vacancies, growth or otherwise.
The Board has not adopted targets regarding the representation of women and other members of Designated Groups on the Board and in executive officer positions due to the small size of the Corporation and the need to consider a balance of criteria in each individual appointment. It is important that each appointment to the Board or in executive officer positions be made, and be perceived as being made, on the merits of the individual and the needs of the Corporation at the relevant time. In addition, targets based on specific criteria such as gender or race, could limit the Board’s ability to ensure that the overall composition of the Board or management of the Corporation meets the needs of the Corporation. We are actively seeking additional candidates to join our Board and we strongly prioritize diverse candidates.
Currently, one out of seven (14%) members of the Board and one out of eight (13%) of the officers are women. One officer identifies as being of “Hispanic, Latinx or Spanish origin” and one as being of “Asian” origin, and one director identifies as being part of the LGBTQ+ group, otherwise no members of the Board or officers of the Corporation who self-identify as being part of any of the Designated Groups.
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Board Diversity Matrix
The table below provides certain highlights of the composition of our Board members as of December 31, 2023. Each of the categories listed in the table below has the meaning as it is used in Nasdaq Rule 5605(f).
Total Number of Directors | 7 | |||||||
Female | Male | Non- Binary | Did Not Disclose Gender | |||||
Part I: Gender Identity | ||||||||
Directors | 1 | 6 | - | - | ||||
Part II: Demographic Background | ||||||||
African American or Black | - | - | - | - | ||||
Alaskan Native or Native American | - | - | - | - | ||||
Asian | - | - | - | - | ||||
Hispanic or Latinx | - | - | - | - | ||||
Native Hawaiian or Pacific Islander | - | - | - | - | ||||
White | 1 | 6 | - | - | ||||
Two or More Races or Ethnicities | - | - | - | - | ||||
LGBTQ+ | 1 | |||||||
Did Not Disclose Demographic Background | - |
Director Term Limits and Other Mechanisms of Board Renewal
The Board has not adopted term limits for directors or other mechanisms of board renewal at this time as it believes that the imposition of director term limits or other mechanisms of board renewal on a board implicitly discounts the value of experience and continuity amongst the Board members and runs the risk of excluding experienced and potentially valuable board members as a result of arbitrary determination. The Board believes that it can best strike a balance between continuity and fresh perspectives without mandated term limits or other mechanisms of board renewal.
The Board has developed written position descriptions, which are reviewed annually, for the Chairman and the chairs of each of the committees. The Chief Executive Officer also has a written position description that has been approved by the Board and is reviewed annually.
Orientation and Continuing Education
It is the mandate of the Corporate Governance and Nominating Committee to ensure that a process is established for the orientation and education of new directors that addresses the nature and operation of the Corporation’s business and their responsibilities and duties as directors (including the contribution individual directors are expected to make and the commitment of time and resources that the Corporation expects from its directors).
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The orientation includes an overview of the Corporation’s history and operations, a review of industry conditions and competition, an introduction to the Corporation’s management team and corporate and business information. Any further orientation is dependent on the needs of the new member and may include items such as formal training sessions and attendance at seminars.
With respect to the continuing education of directors, the Corporate Governance and Nominating Committee ensures that directors receive adequate information and continuing education opportunities on an ongoing basis to enable directors to maintain their skills and abilities as directors and to ensure their knowledge and understanding of the Corporation’s business remains current.
It is the Board’s mandate, in conjunction with the Corporate Governance and Nominating Committee, to assess the participation, contributions and effectiveness of the Chair and the individual members of the Board on an annual basis. The Board also monitors the effectiveness of the Board and its committees and the actions of the Board as viewed by the individual directors and senior management.
The Board has developed a formal questionnaire to be completed by each director on an annual basis for the purpose of formally assessing the effectiveness of the Board as a whole, committees of the Board, and the contribution of individual directors. These questionnaires, and the issues arising therefrom, are intended to be reviewed and assessed by the Lead Director on an annual basis or more frequently from time to time as the need arises. The Lead Director takes appropriate action as required based on the results obtained.
As stated in the Board Mandate, all directors are expected to attend each meeting in person, by phone or by video conference depending on the format of the meeting, to the extent practicable. The Board of Directors held seven meetings during 2023, the Audit Committee met four times, the Corporate Governance and Nominating Committee met four times, the Compensation Committee met four times and the R&D Committee met once.
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The following table illustrates the attendance record of each director for all Board and committee meetings held for the year ended December 31, 2023.
Director | Meetings Attended |
Audit Committee | Corporate Governance and Nominating Committee | Compensation Committee | R&D Committee | Board | ||||||
Carol G. Ashe | - | 4 of 4 | 4 of 4 | - | 7 of 7 | |||||
Denis Burger | 4 of 4 | 4 of 4 | 4 of 4 | - | 7 of 7 | |||||
Erich Platzer | - | - | 3 of 4 | 1 of 1 | 7 of 7 | |||||
William G. Rice | 4 of 4(1) | 4 of 4(1) | - | 1 of 1 | 7 of 7 | |||||
Bernd R. Seizinger | 4 of 4 | - | - | 1 of 1 | 6 of 7 | |||||
| - | 4 of 4 | - | 1 of 1 | 7 of 7 | |||||
Warren Whitehead | 4 of 4 | - | - | - | 7 of 7 |
(1) | Although not a member of the Audit Committee and Corporate Governance and Nominating Committee, Dr. Rice participated in all meetings of such committees for the year ended December 31, 2023 on invitation as a member of management. |
All director nominees are expected to attend the Meeting.William G. Rice, Denis Burger, Carol G. Ashe, Erich Platzer, Bernd Seizinger, Mark Vincent and Warren Whitehead attended last year’s Annual and Special Meeting of Shareholders.
The independent directors meet regularly without the presence of the non-independent directors and members of management. During the year ended December 31, 2023, independent directors met six times without the presence of the management non-independent director as part of meetings of the Board, and members of the Audit Committee and Corporate Governance and Nominating Committee each met four times without the presence of management as part of meetings of their committees. All meetings of the Compensation Committee in 2023 were held without the presence of management (including the non-independent director).
We have adopted a code of ethics for directors, officers (including our principal executive officer, principal financial officer and principal accounting officer) and employees, known as the Code of Business Conduct and Ethics. The Code of Business Conduct and Ethics is available on our website at http://www.aptose.com under the Corporate Governance section of our Investors page. We will promptly disclose on our website (i) the nature of any amendment to the policy that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and (ii) the nature of any waiver, including an implicit waiver, from a provision of the policy that is granted to one of these specified individuals that is required to be disclosed pursuant to SEC rules and regulations, the name of such person who is granted the waiver and the date of the waiver.
The Corporate Governance and Nominating Committee regularly monitors compliance with the Code through communications with management and reports through the Disclosure and Insider Trading Policy (as described below) and ensures that management of the Corporation encourages and promotes a culture of ethical business conduct. A copy of the Code may be found by accessing the SEC’s EDGAR filing database at www.sec.gov, on SEDAR+ at www.sedarplus.ca and on our website at www.aptose.com.
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The Corporation has developed a Disclosure and Insider Trading Policy that covers “whistle blowing” and provides an anonymous means for employees and officers to report violations of the Code or any other corporate policies, in addition to providing guidelines on employee trading in the Corporation’s securities.
The Board has not granted any waiver of the Code in favor of a director or officer of the Corporation. No material change reports have been filed since the beginning of the Corporation’s most recently completed fiscal year that pertain to any conduct of a director or executive officer that constitutes a departure from the Code.
The Corporate Governance and Nominating Committee monitors the disclosure of conflicts of interest by directors and ensures that no director will vote or participate in a discussion on a matter in respect of which such director has a material interest.
Shareholder Communications with the Board
Shareholders may communicate with the Board or any one particular director by sending correspondence, addressed to Mr. Fletcher Payne, Senior Vice President, Chief Financial Officer, Chief Business Officer and Corporate Secretary, 12770 High Bluff Drive, San Diego, California, 92130, with an instruction to forward the communication to the Board or one or more particular directors. He will forward promptly all such shareholder communications to the Board, or the one or more particular directors, after ascertaining whether the communications are appropriate to the duties and responsibilities of the Board.
The Corporation has a standing Audit Committee, a Corporate Governance and Nominating Committee and a Compensation Committee, each of which are composed entirely of independent directors. In 2023, the Corporation established the R&D Committee. Each current member of the R&D Committee, except for Dr. Rice, qualifies as “independent” under the listing standards of Nasdaq, the rules and regulations of the SEC and NI 52-110.
Audit Committee
Membership. The current members of the Audit Committee are Denis Burger, Bernd R. Seizinger and Warren Whitehead. Mr. Whitehead is the Chair of the Audit Committee. The Board has determined that all members of the Audit Committee qualify as financial experts under the listing standards of Nasdaq.
In addition, each current member of the Audit Committee qualifies as “independent” for purposes of membership on audit committees under the listing standards of Nasdaq, the rules and regulations of the SEC and NI 52-110.
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Meetings. The Audit Committee met four times during the period from January 1, 2023 until December 31, 2023.
Committee Mandate. Among its responsibilities, the Audit Committee:
● | serves as an independent and objective party to monitor the integrity of our financial reporting process and systems of internal controls regarding finance, accounting, and legal compliance, including the review of our consolidated financial statements, MD&A and annual and interim results; |
● | identifies and monitors the management of the principal risksthat could impact our financial reporting; |
● | monitors the independence and performance of our independent auditors, including the pre-approval of all audit fees and all permitted non-audit services in accordance with federal securities laws and the rules and regulations of the SEC; |
● | provides an avenue of communication among the independent auditors, management, and the Board; and |
● | encourages continuous improvement of, and foster adherence to, our policies, procedures and practices at all levels. |
The Audit Committee is also responsible for implementing and overseeing our whistle-blowing procedures and reviewing the Corporation’s plans to mitigate cybersecurity risks and respond to data breaches.
Corporate Governance and Nominating Committee
Membership.The current members of the Corporate Governance and Nominating Committee are Mark Vincent, Carol Ashe and Denis Burger. Dr. Vincent is the Chair of the Corporate Governance and Nominating Committee. Each current member of the Committee qualifies as “independent” under the listing standards of Nasdaq, the rules and regulations of the SEC and NI 52-110.
Meetings. The Corporate Governance and Nominating Committee met four times during the period from January 1, 2023 until December 31, 2023. In addition, governance matters were discussed and considered at the Board level.
Committee Mandate. Among its responsibilities, the Corporate Governance and Nominating Committee:
● | identifies qualified individuals to become Board members, consistent with criteria approved by the Board; |
● | determines the composition of the Board |
● | selects the director nominees for the next annual meeting of shareholders; |
● | monitors a process to |
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● | aids and monitors management succession planning; and |
● | develops, recommends to the |
Compensation Committee
Membership. The Compensation Committee is currently comprised of Carol Ashe, Denis Burger and Erich Platzer. Dr. Burger is the Chair of the Compensation Committee. Each current member of the Compensation Committee qualifies as “independent” for purposes of membership on compensation committees under the listing standards of Nasdaq, the rules and regulations of the SEC and NI 52-110, and as a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act.
Meetings. The Compensation Committee met four times during the period from January 1, 2023 until December 31, 2023. In addition, compensation matters were discussed and considered at the Board level.
Committee Mandate. Among its responsibilities, the Compensation Committee:
● | reviews and makes recommendations to the Board regarding the corporate goals and objectives, performance and compensation of the
|
● | evaluates the |
● |
|
● | makes recommendations regarding annual bonus policies for employees, the incentive-compensation plans and equity-based plans for the Corporation; and |
● | reviews executive compensation disclosure before the Corporation publicly discloses this information. |
As part of its process to make recommendations to the Board with respect of the compensation for the non-employee directors and other employees of the Corporation, the Compensation Committee consults with the President and Chief Executive Officer and other officers of the Corporation to obtain recommendations as it deems necessary.
Further information pertaining the compensation of directors and officers and the role and policies of the Compensation Committee can be found in this Proxy Statement under the heading “Executive Compensation”.
R&D Committee
Membership. The current members of the R&D Committee are Erich Platzer, William Rice, Bernd R. Seizinger and Mark Vincent. Dr. Seizinger is the Chair of the R&D Committee. Each current member of the R&D Committee, except for Dr. Rice, qualifies as “independent” under the listing standards of Nasdaq, the rules and regulations of the SEC and NI 52-110.
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Meetings. The R&D Committee met once during the period from January 1, 2023 until December 31, 2023.
Committee Mandate. The R&D Committee’s responsibilities include:
● | serving in an advisory role and interacts with both management and external advisors to develop insights and recommendations regarding the Corporation’s approach to product development and technical innovation; |
● | assisting management in the identification, evaluation and oversight of appropriate technology and product development investments; |
● | overseeing the innovation strategy of the Corporation, including periodic reviews of the Corporation’s research and development portfolio and its overall competitiveness, the science and technology underlying major research and development initiatives, the competitive environment and disruptive technology impacts; |
● | providing feedback and input regarding the Corporation’s development of innovative business models, strategies and tactics; and |
● | assisting the Board with the interpretation of scientific and clinical development data. |
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PROPOSAL NO. 2—APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board, on the Audit Committee’s advice, recommends the appointment of KPMG LLP, as the independent registered public accounting firm of the Corporation for the fiscal year ending December 31, 2024.
We are asking Shareholders to approve the appointment of KPMG for the fiscal year ending December 31, 2024. If Shareholders do not approve the appointment of KPMG LLP, the Audit Committee will reconsider its selection, but it retains sole responsibility for appointing and terminating our independent registered public accounting firm.
Representatives of KPMG LLP will be present at the Meeting.
The Board unanimously recommends a vote FOR the appointment of KPMG LLP as the independent registered public accounting firm of the Corporation for the fiscal year ending on December 31, 2024.
Audit, Audit-Related, Tax and Other Fees
The tables below present fees for professional services rendered by KPMG LLP for the fiscal years ended December 31, 2023 and 2022, respectively.
Aggregate Amount Billed(3)
| ||||||||
2023 | 2022 | |||||||
Audit Fees(1) | $ | 467,098 | $ | 390,265 | ||||
Tax Fees(2) | 30,129 | 33,098 | ||||||
|
| |||||||
Total | $ | 497,227 | $ | 423,363 |
(1) | Audit fees consisted of the audit of our annual financial statements for the fiscal years ended December 31, 2023 and 2022, respectively, and interim reviews. In addition, audit fees consist of the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the issuer’s financials and include the provision of comfort letters and consents and the review of documents filed with regulatory authorities. |
(2) | Tax fees include fees billed for assistance in the preparation of corporate tax returns and related filings and general tax advisory services. |
(3) | All fees by KPMG are invoiced and paid in Canadian dollars. Fees for 2023 have been translated to US dollars at the Bank of Canada average annual exchange rate of 0.7410 and 2022 have been translated to US dollars at the Bank of Canada average annual exchange rate of 0.7685. |
Pre-Approval Policies and Procedures
The Audit Committee has adopted procedures pursuant to which all audit, audit-related and tax services, and all permissible non-audit services provided by our independent registered public accounting firm must be pre-approved by the Audit Committee. All services rendered by KPMG LLP during our fiscal year 2023 were permissible under applicable laws and regulations and were all approved in advance by the Audit Committee in accordance with the rules adopted by the SEC in order to implement requirements of the Sarbanes-Oxley Act of 2002.
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This report is furnished by the Audit Committee of the Board with respect to our financial statements for the year ended December 31, 2023.
One of the purposes of the Audit Committee is to oversee our accounting and financial reporting processes and the audit of our annual financial statements. Our management is responsible for the preparation and presentation of complete and accurate financial statements. Our independent registered public accounting firm, KPMG LLP, is responsible for performing an independent audit of our financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) and for issuing a report on their audit.
In performing its oversight role, the Audit Committee has reviewed and discussed our audited financial statements for the year ended December 31, 2023 with our management. Management represented to the Audit Committee that our financial statements were prepared in accordance with generally accepted accounting principles. The Audit Committee has discussed with KPMG LLP, our independent registered public accounting firm, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the Securities Exchange Commission. The Audit Committee has received the written disclosures and the letter from KPMG LLP required by the applicable requirements of the Public Company Accounting Oversight Board regarding communications with audit committees concerning independence. The Audit Committee has discussed with KPMG LLP its independence and concluded that the independent registered public accounting firm is independent from our company.
Based on the review and discussions of the Audit Committee described above, the Audit Committee recommended to the Board that our audited financial statements for the year ended December 31, 2023 be included in our Annual Report on Form 10-K for the year ended December 31, 2023 for filing with the Securities and Exchange Commission.
Audit Committee
Warren Whitehead, Chair
Denis Burger
Bernd R. Seizinger
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PROPOSAL NO. 3—ADVISORY (NON-BINDING) VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
As required by Section 14A of the Exchange Act, the Corporation is seeking a vote on an advisory basis to approve the compensation of the Named Executive Officers (as defined below), as disclosed in this Proxy Statement. Because this vote is advisory, the results will not be binding on the Corporation or the Board. However, this proposal, commonly known as a “say-on-pay” proposal, gives Shareholders the opportunity to endorse or not endorse the Corporation’s executive compensation programs and the results will be taken into consideration when future decisions regarding executive compensation are made. The Corporation provides its Shareholders with the opportunity to cast an annual advisory vote on executive compensation (commonly known as a ‘Say on Pay Proposal’).
As described under “Executive Compensation” below, the Corporation believes that its executive compensation programs are designed to:
● | attract and retain qualified, motivated and achievement-oriented individuals by offering compensation that is competitive in the industry and marketplace, especially given the current challenging market conditions for recruiting and retaining talent; |
● | align executive interests with the interests of Shareholders; and |
● | ensure that individuals continue to be compensated in accordance with their personal performance and responsibilities and their contribution to the overall objectives of the Corporation. |
These objectives are achieved by offering executives and employees a compensation package that is competitive and rewards the achievement of both short-term and long-term objectives of the Corporation.
The Corporation, the Board and the Compensation Committee believe that the executive compensation of its Named Executive Officers is reasonable and appropriate, justified by the Corporation’s performance and conducive for long-term value creation. The Corporation’s view is that the compensation of its executives must be competitive, weighted and fair. For this reason, the Compensation Committee retained Radford (an Aon Consulting Company) in 2018, 2020, 2022 and 2023, to provide independent advice regarding executive compensation to the Compensation Committee. Radford concluded, in 2023, that the executive compensation program was positionedat the market’s 50th percentile in the aggregate (50th to 75th percentile for the long-term incentives pre-commercial portion of the compensation package, with the potential for actual compensation being higher or lower based on performance)
The Corporation urges Shareholders to read the section entitled “Executive Compensation” and the related narrative and tabular compensation disclosure included in this Proxy Statement. The section entitled “Executive Compensation” provides detailed information regarding the Corporation’s executive compensation program, as well as the compensation of the Named Executive Officers.
At the Meeting, Shareholders will be asked to consider and, if deemed appropriate, to approve, an advisory (non-binding) resolution in the form set out below (the “Say-on-Pay Resolution”), subject to such amendments, variations or additions as may be approved at the Meeting. In order to be passed, the advisory (non-binding)Say-on-Pay Resolution must be passed by a majority of the votes cast by Shareholders present virtually or by proxy at the Meeting.
The text of the advisory (non-binding)Say-on-Pay Resolution to be submitted to Shareholders at the Meeting is set forth below:
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BE IT RESOLVED THAT the compensation paid to the Corporation’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation tables and related narrative discussion contained in the proxy statement dated May , 2024, is approved on an advisory basis.
The Board believes the passing of the Say-on-Pay Resolution is in the best interest of the Corporation and unanimously recommends a vote FOR the passing of the Say-on-Pay Resolution.
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PROPOSAL NO. 4—APPROVAL OF NASDAQ 20% ISSUANCE PROPOSAL
Our Board is seeking the approval of our shareholders of the potential issuance of Shares to the holders of the Warrants (as defined below) in excess of 19.99% of our outstanding Shares as calculated using the number of Shares that were issued and outstanding following the closing of the Offering (as defined below) pursuant to the Nasdaq Listing Rules.
Background and Description of the Proposal
On January 25, 2024, we entered into an Underwriting Agreement (the “Underwriting Agreement”) with Newbridge Securities Corporation, pursuant to which we agreed to issue and sell 4,912,280 Shares and 4,912,280 warrants to acquire common shares (the “Warrants”) at a combined public offering price of $1.71 per Share and Warrant (the “Offering”). The Offering closed on January 30, 2024.
On January 25, 2024, we also entered into a subscription agreement (the “Subscription Agreement”) with Hanmi, pursuant to which we agreed to sell and issue to Hanmi and Hanmi agreed to purchase $4.0 million of our Shares and warrants to purchase common shares (the “Hanmi Investment”). The Shares and warrants were sold in combination, with one Share and 1.11111106 warrant comprising each combined security set purchased by Hanmi. Each whole Hanmi warrant is exercisable for one Share at an exercise price of $1.71 per Share. In connection with the transaction, Hanmi received 2,105,263 Shares and 2,339,181 warrants (the “Hanmi Warrants”). The purchase price for each combined set of one Share and 1.11111106 warrants was $1.90. The warrants acquired by Hanmi pursuant to the Hanmi Investment may not be exercised if Hanmi’s beneficial ownership of our Shares would exceed 19.99% immediately following such exercise. However, the Hanmi Warrants did not include a provision that prohibited the exercise of the warrants if the Shares to be issued in connection with such exercise, combined with the Shares issued upon closing of the Hanmi Investment, would exceed 19.99% of our outstanding Shares at the time of the closing of the Hanmi Investment (the “Nasdaq 19.99% Cap”).
As a result, we and Hanmi subsequently agreed to amend the warrants issued in the Hanmi Investment (the “Amended Warrants”) to prohibit the exercise of the warrants in excess of the Nasdaq 19.99% Cap, unless shareholder approval is first obtained to exceed the Nasdaq 19.99% Cap. Copies of the Amended Warrant were filed with the SEC on April 26, 2024.
The information set forth in this Proposal No. 4 is qualified in its entirety by reference to the full text of the Warrants, Amended Warrants, Underwriting Agreement, and Subscription Agreement, which have been filed as exhibits to the Corporation’s Current Report on Form 8-K filed on January 30, 2024 and April 26, 2024.
Our Shares are listed on Nasdaq, and as a result, we are subject to the Nasdaq Listing Rules, including Nasdaq Listing Rule 5635. Below is an overview of the relevant provisions of Nasdaq Listing Rule 5635 as they relate to the Hanmi Investment, Amended Warrant, and the Nasdaq 20% Issuance Proposal. The overview does not purport to be complete and is qualified in its entirety by the full text of Nasdaq Rule 5635, which is available on the Nasdaq’s Listing Center website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules.
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Nasdaq Rule 5635(d)
Nasdaq Rule 5635(d) requires us to obtain shareholder approval prior to the issuance of securities in connection with a transaction, other than a public offering, involving the sale, issuance or potential issuance by us of more than 19.99% of our outstanding Shares (or securities convertible into or exercisable for Shares) at a price less than the lower of (i) the official closing price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement, or (ii) the average official closing price of the Shares (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement (the “Nasdaq 20% Rule”).
Nasdaq has concluded that the issuance of securities pursuant to the Hanmi Investment did not comply with the Nasdaq 20% Rule, because such issuance did not meet the minimum closing price requirements thereof. Therefore, under the Nasdaq 20% Rule, in no event may we issue or sell to Hanmi, upon the exercise of the warrants issued in connection with the Hanmi Investment, a number of our Shares that, when combined with the Shares issued in the Hanmi Investment, would result in the issuance of more Shares than permitted under the Nasdaq 19.99% Cap unless we obtain shareholder approval to issue Shares in excess of the Nasdaq 19.99% cap. In any event, the Amended Warrants provide that unless we first obtain shareholder approval, we may not issue or sell any of our Shares if such issuance or sale would exceed the Nasdaq 19.99% Cap.
Nasdaq Rule 5635(b)
Nasdaq Listing Rule 5635(b) requires shareholder approval prior to an issuance of securities that will result in a “change of control” of a listed company, which for Nasdaq purposes is generally deemed to occur when, as a result of an issuance, an investor or a group of investors acquires, or has the right to acquire, 20% or more of the outstanding equity or voting power of the company and such ownership or voting power would be the company’s largest ownership position. If the Amended Warrants vest, Hanmi would become the beneficial owner of 28.6% of our outstanding Shares. Further, in the event we issue additional Shares in a financing transaction or otherwise to a person or entity other than Hanmi or its affiliates or Hanmi transfers or sells its Shares to a non-affiliate, and the Amended Warrants subsequently vest, the number of warrant shares subject to the Amended Warrants will increase. As a result, our issuance of Shares pursuant to the Amended Warrants, if exercised, could potentially be deemed to result in a “change of control” for purposes of Nasdaq Listing Rule 5635(b).
Accordingly, we are seeking shareholder approval pursuant to Nasdaq Listing Rule 5635(b) and Rule 5635(d) to permit the issuance of 2,339,181 warrant shares underlying the Amended Warrants in excess of the maximum limits permitted under Nasdaq Rule 5635(b) and Rule 5635(d).
Consequences if Shareholder Approval is Not Obtained
If our shareholders do not approve this proposal, we will not be able to issue to Hanmi the number of Shares to which Hanmi would otherwise be entitled upon full exercise of the Amended Warrants, which could require us, in lieu of delivering those Shares, to pay substantial cash amounts to Hanmi.
We are seeking shareholder approval as required by Nasdaq Rule 5635 (as described above) to enable us to issue a number of Shares in connection with the Hanmi Investment and Amended Warrants, that exceeds 20% of our outstanding Shares as of the closing date of the Hanmi Investment. The Shares that could be issued pursuant to the Amended Warrants consist of 2,339,181 additional Shares issuable upon the exercise of the Amended Warrants.
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The affirmative vote of the Holders of a majority of votes cast on the proposal, which includes those present in person or represented by proxy and entitled to vote on the matter and excludes the voting power underlying the securities acquired by Hanmi in the Hanmi Investment, is necessary to approve the Nasdaq 20% Issuance Proposal in accordance with Nasdaq Marketplace Rule 5635(e)(4). Broker non-votes will not affect whether this proposal is approved, but abstentions will have the same effect as a vote against the proposal.
Anticipated and Potential Effects of this Proposal
The issuance of the Shares which are the subject of the Nasdaq 20% Issuance Proposal will result in an increase in the number of our Shares outstanding. This will result in a decrease to the respective ownership and voting percentage interests of our other shareholders. Our market value and our future earnings per Share, if any, may be reduced.
If Hanmi exercises the Amended Warrants in full to purchase the warrant shares, it would result in Hanmi beneficially owning 28.6% of our outstanding Shares following the exercise. Such ownership would represent the largest ownership position in our Corporation. As a result, Hanmi could be able to exert significant influence over matters requiring approval by our shareholders, including the election of directors and mergers, acquisitions or other extraordinary transactions. Hanmi may have interests that differ from ours or yours, and it may vote or otherwise act in ways with which you disagree and that may be adverse to your interests. In addition, the concentration of ownership in a single Holder may have the effect of delaying, preventing or deterring another change of control of our Corporation, which could deprive our shareholders of an opportunity to receive a premium for their Shares as part of a sale of our Corporation, or conversely, could facilitate a change of control at a time or under circumstances when you and other shareholders may prefer not to sell. Further, the concentration of ownership could adversely affect the prevailing market price for our Shares.
For your consideration of the Nasdaq 20% Issuance Proposal, the above description of the material terms of the Hanmi Investment is set forth in this Proxy Statement to provide you with basic information concerning the Hanmi Investment. However, the description above is not a substitute for reviewing the full text of the referenced documents, which were attached as exhibits to our Current Report on Form 8-K filed with the SEC on January 30, 2024 and April 26, 2024.
The Board unanimously recommends that the Corporation’s shareholders vote FOR the Nasdaq 20% Issuance Proposal (Proposal No. 4), and thereby the issuance of Shares issuable pursuant to the Hanmi Investment, including all of the warrant shares issuable upon exercise of the Amended Warrants.
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PROPOSAL NO. 5—APPROVAL TO ADJOURN THE MEETING, IF NECESSARY, TO SOLICIT ADDITIONAL PROXIES
At the Meeting, Shareholders will be asked to authorize the Corporation to adjourn the Meeting to another time and place, if necessary or advisable, to solicit additional proxies in the event there are not sufficient votes to approve the Nasdaq 20% Issuance Proposal described in this Proxy Statement at the Meeting (the “Adjournment Proposal”). If the Shareholders do not approve such proposal, the presiding officer of the Meeting could adjourn the Meeting without a vote on Proposal No. 4 to solicit additional proxies and/or to seek to convince Shareholders to change their votes in favor of such proposal.
If it is necessary or advisable to adjourn the Meeting, no notice of any adjournment of less than 30 days is required to be given if the time and place of the adjourned Meeting, and the means of remote communication, if any, by which Shareholders and proxyholders may be deemed to be present and to vote at such adjourned Meeting, are announced at the Meeting at which adjournment is taken, unless after the adjournment a new record date is fixed for the adjourned Meeting. At the adjourned Meeting, Aptose may transact any business which might have been transacted at the original Meeting.
In order to be passed, the Adjournment Proposal must be passed by a majority of the votes cast by Shareholders present virtually or by proxy at the Meeting.
Unless you have specified in the enclosed form of proxy that the votes attaching to the Shares represented by the proxy are to be voted against the Adjournment Proposal on any ballot that may be called for, the management representatives designated in the enclosed form of proxy intend to vote the Shares in respect of which they are appointed proxy FOR the Adjournment Proposal.
The Board unanimously recommends a vote FOR the Adjournment Proposal.
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Information About Our Executive Officers
Our leadership team comprises accomplished industry, financial and clinical research professionals who are dedicated to building a comprehensive anticancer drug pipeline and clinical development programs focused on targeted therapeutics directed against dysregulated oncogenic processes in patients with life-threatening hematologic malignancies. For the year ended December 31, 2023, the leadership team included our Chairman, President and Chief Executive Officer, Dr. William G. Rice, our Senior Vice President, Chief Financial Officer and Chief Business Officer, Fletcher Payne; our Senior Vice President and Chief Medical Officer, Dr. Rafael Bejar and our Senior Vice President and Chief Commercial Officer, Philippe Ledru, who departed the Corporation in 2024.
Fletcher Payne, age 61, joined Aptose as Senior Vice President and Chief Financial Officer (“CFO”) and Corporate Secretary in June 2022. Mr. Payne was appointed Chief Business Officer in November 2023. With a healthcare tenure of more than 25 years, Mr. Payne has held several CFO and senior management positions at biotech companies in addition to finance and accounting roles, and has overseen legal, corporate development and licensing functions. During his career, he has executed a wide array of business transactions totaling more than $3.7 billion, with healthcare focus in clinical testing, oncology, neurological, and orphan diseases indications. Mr. Payne most recently served as CFO of Syapse, where he completed several financing transactions and oversaw accounting, finance, corporate development, and legal functions. Prior, he served as CFO at Catalyst Bioscience, a publicly traded biotech company. He served in a CFO capacity and senior financial positions at CytomX Therapeutics, Plexxikon Inc., Rinat Neuroscience Corporation, Dynavax Technologies Corporation, and Cell Genesys, among others. Mr. Payne holds a B.S. in Finance from the Haas School of Business, University of California, Berkeley.
Dr. Rafael Bejar, M.D, Ph.D., age 53, joined Aptose as Senior Vice President and Chief Medical Officer in January 2020. Dr. Bejar is an internationally recognized physician scientist with extensive research and clinical experience in the area of hematologic malignancies. Dr. Bejar joined Aptose from UC San Diego (“UCSD”) where he began working in 2012. He continues to serve at UCSD as an Associate Professor of Clinical Medicine, caring for patients and maintaining a research laboratory focused on translational studies of myeloid malignancies and also serves and is an independent consultant as a member of the Independent Data Monitoring Committee for other pharmaceutical companies. At UCSD, he founded the MDS Center of Excellence and led the Hematology Disease Team from 2017 to 2019. There he has directed several clinical studies and served as an advisor for numerous companies including Celgene, Takeda, AbbVie, Astex, Genoptix, Forty Seven, PersImmune, and Daiichi-Sankyo. Outside UCSD, Dr. Bejar sits on the Scientific Advisory Board for the MDS Foundation, is a prior member of the National Comprehensive Cancer Network Guidelines Committee, and has led projects for the International Working Group for MDS. He is frequently invited to speak at national and international meetings and has published articles in a variety of journals including The New England Journal of Medicine, Journal of Clinical Oncology, Leukemia, Blood, and Blood Advances. Dr. Bejar completed his fellowship at the Dana-Farber Cancer Institute and has been board certified in Hematology and Oncology. He completed his internship in Internal Medicine at the University of Chicago followed by his residency at the Brigham and Women’s Hospital in Boston where he later served a Medical Chief Resident and an Instructor in Hematology. He holds an MD degree and Neuroscience PhD from UCSD and a BS in Physics from MIT.
The following discussion covers the compensation arrangements for Dr. Rice, Mr. Payne, Dr. Bejar and Mr. Ledru, prior to his departure in 2024 (each, an “NEO” and, collectively the “Named Executive Officers”).
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The Compensation Committee’s mandate is to review and advise the Board on the recruitment, appointment, performance, compensation, benefits and termination of executive officers. The Compensation Committee also administers and reviews procedures and policies with respect to equity-based compensation plans, employee benefit programs, pay equity and employment equity and reviews executive compensation disclosure where it is publicly disclosed.
Aptose’s executive compensation program is designed to:
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● | align executive interests with the interests of |
● | ensure that individuals continue to be compensated in accordance with their personal performance and responsibilities and their contribution to our overall objectives. |
These objectives are achieved by offering executives and employees a compensation package that is competitive and rewards the achievement of both our short-term and long-term objectives. As such, our compensation package consists of three key elements: