UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment
No. __)
Filed
by the Registrant ☒
Filed
by a party other than the Registrant ☐
Check
the appropriate box:
☒ |
Preliminary
Proxy Statement |
☐ |
Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☐ |
Definitive
Proxy Statement |
☐ |
Definitive
Additional Materials |
☐ |
Soliciting
Material under §240.14a-12 |
LIXTE
BIOTECHNOLOGY HOLDINGS, INC.
(Name
of Registrant as Specified in Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
☒ |
No fee required. |
☐ |
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
|
|
|
(1) |
Title
of each class of securities to which transaction applies: |
|
|
|
|
(2) |
Aggregate
number of securities to which transaction applies: |
|
|
|
|
(3) |
Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): |
|
|
|
|
(4) |
Proposed
maximum aggregate value of transaction: |
|
|
|
|
(5) |
Total
fee paid: |
|
|
|
|
|
|
☐ |
Fee paid previously with preliminary materials. |
☐ |
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
|
(1) |
Amount
Previously Paid: |
|
|
|
|
(2) |
Form,
Schedule or Registration Statement No.: |
|
|
|
|
(3) |
Filing
Party: |
|
|
|
|
(4) |
Date
Filed: |
|
|
|
Lixte
Biotechnology Holdings, Inc.
680
East Colorado Boulevard, Suite 180
Pasadena,
California 91101
NOTICE
OF 2023 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON NOVEMBER 27, 2023
October
13, 2023
To
the stockholders of Lixte Biotechnology Holdings, Inc.:
Notice
is hereby given that the 2023 Annual Meeting of Stockholders (the “Annual Meeting”) of Lixte Biotechnology Holdings, Inc.,
a Delaware corporation (“we”, “us”, “our”, “Lixte”, or the “Company”) will
be held on November 27, 2023, at 10:00 a.m. Pacific Time. You are being asked to vote on the following matters:
|
(1) |
To
elect the six nominees for director named herein;
|
|
(2) |
To
ratify the appointment of Weinberg & Company, P.A. as the Company’s independent registered public accounting firm for the
fiscal year ending December 31, 2023; |
|
|
|
|
(3) |
To
approve a proposal to amend the Company’s 2020 Stock Incentive Plan (the “2020 Plan”) to increase the number of
shares issuable thereunder by 336,667 shares, to a total of 750,000 shares; and |
|
|
|
|
(4) |
To
authorize the adjournment of the Annual Meeting, if necessary, to solicit additional proxies if there are not sufficient votes in
favor of one or more of the Proposals. |
|
|
|
|
(5) |
To
transact other business that may properly come before the meeting and any postponement(s) or adjournment(s) thereof. |
The
accompanying proxy statement contains additional information and should be carefully reviewed by stockholders.
To
accommodate our stockholders, the Annual Meeting will be a completely virtual meeting of stockholders, conducted solely online via live
webcast. You will be able to attend and participate in the Annual Meeting online and vote your shares electronically by visiting: www.meetnow.global/M6YYXWG
at the meeting date and time described in the accompanying proxy statement. There is no physical location for the Annual Meeting.
We are utilizing the latest technology to provide safe access for our stockholders. Hosting a virtual meeting will enable greater stockholder
attendance and participation from any location. Questions related to the Annual Meeting or voting matters can be submitted by email to
info@lixte.com. We encourage you to attend online and participate. We recommend that you log in a few minutes before the Annual
Meeting start time of 10:00 a.m. Pacific Time on November 27, 2023, to ensure you are logged in when the Annual Meeting begins.
Pursuant
to the bylaws of the Company, the Board of Directors has fixed the close of business on October 3, 2023 as the record date (the “Record
Date”) for determination of stockholders entitled to notice and to vote at the Annual Meeting and any adjournment thereof. Holders
of the Company’s Common Stock are entitled to vote at the Annual Meeting.
In
accordance with rules and regulations adopted by the U.S. Securities and Exchange Commission (the “SEC”), we have elected
to provide our beneficial owners and stockholders of record access to our proxy materials over the Internet. Beneficial owners are stockholders
whose shares are held in the name of a broker, bank or other agent (i.e., in “street name”). Accordingly, a Notice of Internet
Availability of Proxy Materials (the “Notice”) will be mailed on or about October 13, 2023 to our beneficial owners and stockholders
of record who owned our Common Stock at the close of business on October 3, 2023. Beneficial owners and stockholders of record will have
the ability to access the proxy materials on a website referred to in the Notice or request a printed set of the proxy materials be sent
to them by following the instructions in the Notice. Beneficial owners and stockholders of record who have previously requested to receive
paper copies of our proxy materials will receive paper copies of the proxy materials instead of a Notice.
|
BY
ORDER OF THE BOARD OF DIRECTORS
|
|
|
|
/s/
John S. Kovach |
|
Executive
Chairman |
Whether
or not you expect to attend the Annual Meeting, please complete, date, sign and return the proxy mailed to you, or vote over the telephone
or the internet as instructed in these materials, as promptly as possible in order to ensure your representation at the meeting. A return
envelope (which is postage prepaid if mailed in the United States) has been provided for your convenience. Even if you have voted by
proxy, you may still vote if you attend the Annual Meeting. Please note, however, that if your shares are held of record by a broker,
bank or other nominee and you wish to vote at the Annual Meeting, you must obtain a proxy issued in your name from that record holder.
TABLE
OF CONTENTS
Lixte
Biotechnology Holdings, Inc.
680
East Colorado Boulevard, Suite 180
Pasadena,
California 91101
PROXY
STATEMENT
FOR
2023
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER
27, 2023
INTRODUCTION
The
enclosed proxy is solicited by the Board of Directors (the “Board of Directors” or “Board”) of Lixte Biotechnology
Holdings, Inc. (the “Company”), in connection with the 2023 Annual Meeting of Stockholders (the “Annual Meeting”)
of the Company, to be held on November 27, 2023, at 10:00 a.m. Pacific Time via live webcast at http://www.meetnow.global/M6YYXWG.
At
the Annual Meeting, you will be asked to consider and vote upon the following matters:
(1) |
To
elect the six nominees for director named herein;
|
(2) |
To
ratify the appointment of Weinberg & Company, P.A. as the Company’s independent registered public accounting firm for the
fiscal year ending December 31, 2023; |
|
|
(3) |
To
approve a proposal to amend the Company’s 2020 Stock Incentive Plan (the “2020 Plan”) to increase the number of
common shares issuable thereunder by 336,667 shares, to a total of 750,000.shares |
|
|
(4) |
To
authorize the adjournment of the Annual Meeting, if necessary, to solicit additional proxies if there are not sufficient votes in
favor of one or more of the Proposals. |
|
|
(5)
|
To
transact other business that may properly come before the meeting and any postponement(s) or adjournment(s) thereof. |
The
Board of Directors has fixed the close of business on October 3, 2023 as the record date (the “Record Date”) for determining
stockholders entitled to notice of and to vote at the Annual Meeting and any adjournment thereof.
On
June 2, 2023, the Company effected a 1-for-10 reverse split of its outstanding shares of common stock. All share and per share amounts
and information presented herein have been retroactively adjusted to reflect the reverse stock split for all periods presented.
In
accordance with rules and regulations adopted by the U.S. Securities and Exchange Commission (the “SEC”), we have elected
to provide our beneficial owners and stockholders of record access to our proxy materials over the Internet. Beneficial owners are stockholders
whose shares are held in the name of a broker, bank or other agent (i.e., in “street name”). Accordingly, a Notice of Internet
Availability of Proxy Materials (the “Notice”) will be mailed on or about October 13, 2023 to our beneficial owners and stockholders
of record who owned our Common Stock at the close of business on October 3, 2023. Beneficial owners and stockholders of record will have
the ability to access the proxy materials on a website referred to in the Notice or request a printed set of the proxy materials be sent
to them by following the instructions in the Notice. Beneficial owners and stockholders of record who have previously requested to receive
paper copies of our proxy materials will receive paper copies of the proxy materials instead of a Notice.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON NOVEMBER 27, 2023: THE NOTICE, PROXY STATEMENT,
PROXY CARD AND THE ANNUAL REPORT ARE AVAILABLE AT HTTPS://IR.LIXTE.COM/SEC-FILINGS AND AT WWW.EDOCUMENTVIEW.COM/LIXT.
QUESTIONS
AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Why
did I receive in the mail a Notice of Internet Availability of Proxy Materials this year instead of a full set of Proxy Materials?
We
are pleased to take advantage of the SEC rule that allows companies to furnish their proxy materials over the Internet. Accordingly,
we have sent to our beneficial owners and stockholders of record a Notice of Internet Availability of Proxy Materials. Instructions on
how to access the proxy materials over the Internet or to request a paper copy may be found in the Notice. Our stockholders may request
to receive proxy materials in printed form by mail or electronically on an ongoing basis. A stockholder’s election to receive proxy
materials by mail or electronically by email will remain in effect until the stockholder terminates its election.
We
intend to mail the Notice on or about October 13, 2023 to all stockholders of record entitled to vote at the Annual Meeting.
Will
I receive any other proxy materials by mail?
We
may send you a proxy card, along with a second Notice, on or after October 13, 2023.
How
can I attend the Annual Meeting?
To
accommodate our stockholders, the Annual Meeting will be a completely virtual meeting of stockholders, which will be conducted exclusively
by webcast. You are entitled to participate in the Annual Meeting only if you were a stockholder of the Company as of the close of business
on the Record Date, or if you hold a valid proxy for the Annual Meeting. No physical meeting will be held. You will be able to attend
the Annual Meeting online by visiting http://www.meetnow.global/M6YYXWG. You also will be able to vote your shares online by attending
the Annual Meeting by webcast. Questions related to the Annual Meeting or voting matters can be submitted by email to info@lixte.com.
To
participate in the Annual Meeting, you will need to review the information included on your Notice, on your proxy card or on the instructions
that accompanied your proxy materials. If you hold your shares through an intermediary, such as a bank or broker, you must register in
advance using the instructions below.
The
online meeting will begin promptly at 10:00 a.m., Pacific Time. We encourage you to access the meeting prior to the start time leaving
ample time for the check in. Please follow the registration instructions as outlined in this proxy statement.
How
do I register to attend the Annual Meeting virtually on the Internet?
If
you are a registered stockholder (i.e., you hold your shares through our transfer agent, Computershare Trust Company, N.A.), you do not
need to register to attend the Annual Meeting virtually on the Internet. Please follow the instructions on the notice or proxy card that
you received. Registered stockholders can attend the meeting by accessing the meeting site at http://www.meetnow.global/MDYYXWG
and entering the 15-digit control number that can be found on your Notice or proxy card mailed with the proxy materials.
If
you hold your shares through an intermediary, such as a bank or broker, you must register in advance to attend the Annual Meeting virtually
on the Internet. To register to attend the Annual Meeting online by webcast you must submit proof of your proxy power (legal proxy) reflecting
your Lixte Biotechnology Holdings, Inc. holdings along with your name and email address to Computershare. Requests for registration must
be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on November 22, 2023. You will receive
a confirmation of your registration by email after we receive your registration materials.
Requests
for registration should be directed to us at the following:
By
email
Send
an email to investorvote@computershare.com with “Proxy Materials Lixte Biotechnology Holdings, Inc.” in the subject
line. Include your full name and address, plus the number located in the shaded bar on the reverse side of the Notice, and state that
you want a paper copy of the meeting materials. You may also forward the email from your broker, or attach an image of your legal proxy,
to legalproxy@computershare.com.
By
phone
Call
Computershare free of charge at 1-866-641-4276.
By
internet
Go
to www.envisionreports.com/LIXT. Click Cast Your Vote or Request Materials.
Who
can vote at the Annual Meeting?
Only
stockholders of record at the close of business on October 3, 2023 will be entitled to vote at the Annual Meeting. On this record date,
there were 2,249,290 shares of common stock outstanding and entitled to vote.
Stockholder
of Record: Shares Registered in Your Name
If
on October 3, 2023 your shares were registered directly in your name with the Company’s transfer agent, Computershare Trust Company,
N.A., then you are a stockholder of record. As a stockholder of record, you may vote at the meeting or vote by proxy. Whether or not
you plan to attend the meeting, we urge you to fill out and return the enclosed proxy card to ensure your vote is counted. Registered
stockholders can attend the meeting by accessing the meeting site at www.meetnow.global/M6YYXWG and entering the 15-digit control
number that can be found on your Notice or proxy card mailed with the proxy materials.
Beneficial
Owner: Shares Registered in the Name of a Broker or Bank
If
on October 3, 2023 your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar
organization, then you are the beneficial owner of shares held in “street name” and the Notice is being forwarded to you
by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the
Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your
account. You are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote your
shares at the meeting unless you request and obtain a valid proxy from your broker or other agent.
What
am I voting on?
There
are three matters scheduled for a vote:
●
To elect the six nominees for director named herein;
●
To approve a proposal to amend the Company’s 2020 Plan to increase the number of shares issuable thereunder by 336,667 shares,
to a total of 750,000 shares; and
●
To ratify the appointment of Weinberg & Company, P.A. as the Company’s independent registered public accounting firm for the
fiscal year ending December 31, 2023.
What
if another matter is properly brought before the meeting?
The
Board of Directors knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are
properly brought before the meeting, it is the intention of the persons named in the accompanying proxy to vote on those matters in accordance
with their best judgment.
How
Do I Vote?
You
may either vote “For” all the nominees to the Board of Directors or you may “Withhold” your vote for any nominee
you specify. For each of the other matters to be voted on, you may vote “For” or “Against” or abstain from voting.
The
procedures for voting are fairly simple:
Stockholder
of Record: Shares Registered in Your Name
If
you are a stockholder of record, you may vote at the Annual Meeting or vote by proxy using the enclosed proxy card. Alternatively, you
may vote by proxy either by telephone or on the Internet. Whether or not you plan to attend the meeting, we urge you to vote by proxy
to ensure your vote is counted. You may still attend the meeting and vote even if you have already voted by proxy.
●
To vote using the proxy card, simply complete, sign and date the proxy card that may be delivered and return it promptly in the envelope
provided. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct.
●
To vote over the telephone, dial toll-free 1-800-652-VOTE (8683) using a touch-tone phone and follow the recorded instructions.
You will be asked to provide the company number and control number from the Notice. Your telephone vote must be received by 11:59 pm
Pacific Time on November 24, 2023 to be counted.
●
To vote through the internet, go to https://www.envisionreports.com/LIXT to complete an electronic proxy card. You will be asked
to provide the company number and control number from the Notice. Your internet vote must be received by 11:59 pm Pacific Time on November
24, 2023 to be counted.
●
To vote during the Annual Meeting, follow the instructions posted at www.meetnow.global/M6YYXWG.
Beneficial
Owner: Shares Registered in the Name of Broker or Bank
If
you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you should have received a Notice containing
voting instructions from that organization rather than from the Company. Simply follow the voting instructions in the Notice to ensure
that your vote is counted. To vote at the Annual Meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow
the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a proxy form.
What
if I have technical difficulties or trouble accessing the virtual Annual Meeting?
The
virtual meeting platform is fully supported across browsers (MS Edge, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets
and cell phones) running the most up-to-date version of applicable software and plugins. Participants should ensure that they have a
strong WiFi connection wherever they intend to participate in the meeting. We encourage you to access the meeting prior to the start
time. A link on the meeting page will provide further assistance should you need it or you may call 1-888-724-2416.
How
many votes do I have?
On
each matter to be voted upon, you have one vote for each share of common stock you own as of October 3, 2023.
What
happens if I do not vote?
Stockholder
of Record: Shares Registered in Your Name
If
you are a stockholder of record and do not vote by completing your proxy card, by telephone, through the internet or at the Annual Meeting,
your shares will not be voted.
Beneficial
Owner: Shares Registered in the Name of Broker or Bank
Our
common stock is listed on The Nasdaq Capital Market. However, under current New York Stock Exchange (“NYSE”) rules and interpretations
that govern broker non-votes, if you are a beneficial owner and do not instruct your broker, bank, or other agent how to vote your shares,
the question of whether your broker or nominee will still be able to vote your shares depends on whether the NYSE deems the particular
proposal to be a “routine” matter. Brokers and nominees can use their discretion to vote “uninstructed” shares
with respect to matters that are considered to be “routine”, but not with respect to “non-routine” matters. Under
the rules and interpretations of the NYSE, “non-routine” matters are matters that may substantially affect the rights or
privileges of stockholders, such as mergers, stockholder proposals, elections of directors (even if not contested), executive compensation
(including any advisory stockholder votes on executive compensation and on the frequency of stockholder votes on executive compensation),
and certain corporate governance proposals, even if management-supported. Accordingly, your broker or nominee may not vote your shares
on Proposals 1 and 3 without your instructions, but may vote your shares on Proposal 2 even in the absence of your instructions. Because
NYSE rules apply to all brokers that are members of the NYSE, the foregoing rules apply to the Annual Meeting even though our common
stock is listed on The Nasdaq Capital Market.
What
if I return a proxy card or otherwise vote but do not make specific choices?
If
you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, as applicable,
“For” the election of all six nominees for director and, “For” the proposals to ratify the appointment of Weinberg
& Company, P.A. as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023
and to approve the amendment to the 2020 Plan. If any other matter is properly presented at the meeting, your proxyholder (one of the
individuals named on your proxy card) will vote your shares using his or her best judgment.
Who
is paying for this proxy solicitation?
We
will pay for the entire cost of soliciting proxies. In addition to these proxy materials, our directors and employees may also solicit
proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation
for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial
owners.
What
does it mean if I receive more than one Notice?
If
you receive more than one Notice, your shares may be registered in more than one name or in different accounts. Please follow the voting
instructions on the Notices to ensure that all of your shares are voted.
Can
I change my vote after submitting my proxy?
Stockholder
of Record: Shares Registered in Your Name
Yes.
You can revoke your proxy at any time before the final vote at the meeting. If you are the record holder of your shares, you may revoke
your proxy in any one of the following ways:
●
You may submit another properly completed proxy card with a later date.
●
You may grant a subsequent proxy by telephone or through the internet.
●
You may send a timely written notice that you are revoking your proxy to the Company’s Secretary at 680 East Colorado Boulevard,
Suite 180, Pasadena, California 91101.
●
You may vote during the Annual Meeting which will be hosted via the Internet.
Your
most current proxy card or telephone or internet proxy is the one that is counted.
Beneficial
Owner: Shares Registered in the Name of Broker or Bank
If
your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank.
When
are stockholder proposals and director nominations due for next year’s Annual Meeting?
Under
the Company’s Bylaws, your proposal (including a director nomination) must be submitted in writing to Lixte Biotechnology Holdings,
Inc., Attn: Secretary, at 680 East Colorado Boulevard, Suite 180, Pasadena, California 91101, not less than ninety (90) days nor more
than one hundred twenty (120) days prior to the one-year anniversary of the preceding year’s annual meeting. Accordingly, notice
of a proposal must be submitted no earlier than July 28, 2024 and no later than August 29, 2024. You are also advised to review the Company’s
Bylaws, which contain additional requirements relating to advance notice of stockholder proposals and director nominations.
How
are votes counted?
Votes
will be counted by the inspector of election appointed for the meeting, who will separately count, for the proposal to elect directors,
votes “For”, “Withhold” and broker non-votes; and, with respect to Proposal 2, votes “For” and “Against”,
and abstentions. Abstentions will be counted towards the vote total for Proposal 2 and will have the same effect as “Against”
votes. Broker non-votes have no effect and will not be counted towards the vote total for any proposal.
What
are “broker non-votes”?
As
discussed above, when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee
holding the shares as to how to vote on matters deemed by the NYSE to be “non-routine”, the broker or nominee cannot vote
the shares. These unvoted shares are counted as “broker non-votes.”
How
Many Votes Are Needed for Each Proposal to Pass?
Proposal |
|
Vote
Required for Approval |
|
Effect
of Abstention |
|
Effect
of Broker Non-Vote |
|
|
|
|
|
|
|
Election
of six members to our Board of Directors
|
|
Plurality
of the votes cast (the six directors receiving the most “For” votes)
|
|
None. |
|
None. |
Ratification
of the Appointment of Weinberg & Company, P.A. as our Independent Registered Public Accounting Firm for our Fiscal Year Ending
December 31, 2023 |
|
“For”
votes from the holders of a majority of shares present in person or represented by proxy and entitled to vote on the matter |
|
Against. |
|
Not
applicable (1). |
|
|
|
|
|
|
|
To
approve a proposal to amend the Company’s 2020 Stock Incentive Plan to increase the number of shares issuable thereunder by
336,667 shares, to a total of 750,000 shares |
|
“For”
votes from the holders of a majority of shares present in person or represented by proxy and entitled to vote on the matter |
|
Against. |
|
None. |
(1) |
This
proposal is considered to be a “routine” matter under NYSE rules. Accordingly, if you hold your shares in street name
and do not provide voting instructions to your broker, bank or other agent that holds your shares, your broker, bank or other agent
has discretionary authority under NYSE rules to vote your shares on this proposal. |
Vote
cast online during the virtual Annual Meeting will constitute votes cast in person at the Annual Meeting for purposes of the votes.
What
Constitutes a Quorum?
To
carry on business at the Annual Meeting, we must have a quorum. A quorum is present when 33-1/3% of the shares entitled to vote, as of
the Record Date, are represented in person or by proxy. Virtual attendance at the Annual Meeting constitutes presence in person for purposes
of a quorum at the meeting. Thus, holders representing at least 749,764 shares must be represented in person or by proxy to have a quorum.
Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank
or other nominee) or if you vote at the Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement.
Shares owned by us are not considered outstanding or considered to be present at the Annual Meeting. If there is not a quorum at the
Annual Meeting, our stockholders may adjourn the meeting.
How
can I find out the Results of the Voting at the Annual Meeting?
Preliminary
voting results will be announced at the Annual Meeting. Final voting results will be published in a Current Report on Form 8-K, which
we will file with the SEC within four business days of the annual meeting.
PROPOSAL
1:
ELECTION
OF DIRECTORS
Each
director to be elected at the Annual Meeting will serve until the next annual meeting of stockholders and until his or her successor
is elected, or, if sooner, until such director’s death, resignation or removal. Unless otherwise instructed, the persons named
in the accompanying proxy intend to vote the shares represented by the proxy for the election of the six nominees listed below. Although
it is not contemplated that any nominee will decline or be unable to serve as a director, in such event, proxies will be voted by the
proxy holder for such other persons as may be designated by the Board of Directors, unless the Board of Directors reduces the number
of Directors to be elected. Election of a director to the Board of Directors requires a plurality of the votes cast at the Annual Meeting.
The
current Board of Directors consists of Dr. John S. Kovach, Dr. Stephen Forman, Dr. Yun Yen, Regina Brown, Dr. Rene Bernards and Bas van
der Baan. The Board of Directors has determined that a majority of its members consisting of Dr. Forman, Dr. Bernards, Dr. Yen, and Ms.
Brown are independent directors within the meaning of the applicable Nasdaq rules.
The
following table sets forth the director nominees, as well as certain information about the nominees as of the Record Date.
Name |
|
Age |
|
Director
Since |
Dr.
John S. Kovach |
|
87 |
|
2005 |
Bas
van der Baan |
|
51 |
|
2022 |
Dr.
Stephen Forman |
|
75 |
|
2016 |
Dr.
Yun Yen |
|
68 |
|
2018 |
Regina
Brown |
|
60 |
|
2021 |
Dr.
Rene Bernards |
|
70 |
|
2022 |
Dr.
John S. Kovach
Dr.
John S. Kovach founded the Company in August 2005 and through September 26, 2023 was our President, Chief Executive Officer and Chief
Scientific Officer. In connection with the Company’s management succession plan, effective September 26, 2023, Dr. Kovach was appointed
to the position of Executive Chairman in lieu of his previous positions of President and Chief Executive Officer and is continuing in
his position as Chief Scientific Officer. Dr. Kovach received a B.A. (cum laude) from Princeton University and an M.D. (AOA) from the
College of Physicians & Surgeons, Columbia University. Dr. Kovach trained in Internal Medicine and Hematology at Presbyterian Hospital,
Columbia University and spent six years in the laboratory of Chemical Biology at the National Institute of Arthritis and Metabolic diseases
studying control of gene expression in bacterial systems.
Dr.
Kovach was recruited to the State University of New York at Stony Brook (“SUNY – Stony Brook”) in Stony Brook, New
York in 2000 to found the Long Island Cancer Center (now named the Stony Brook University Cancer Center). From 1994 to 2000, Dr. Kovach
was Executive Vice President for Medical and Scientific Affairs at the City of Hope National Medical Center in Los Angeles, California.
His responsibilities included oversight of all basic and clinical research initiatives at the City of Hope. During that time, Dr. Kovach
was also Director of the Beckman Research Center at City of Hope and a member of the Arnold and Mabel Beckman Scientific Advisory Board
in Newport Beach, California. Effective February 23, 2017, Dr. Kovach retired from his part-time (50%) academic position at SUNY –
Stony Brook, as a result of which he has devoted 100% of his time to the Company’s business activities since that date.
From
1976 to 1994, Dr. Kovach was a consultant in oncology and director of the Cancer Pharmacology Division at the Mayo Clinic in Rochester,
Minnesota. During this time, he directed the early clinical trials program for evaluation of new anti-cancer drugs as principal investigator
of contracts from the National Cancer Institute. From 1986 to 1994, he was also Chair of the Department of Oncology and Director of the
NCI-designated Mayo Comprehensive Cancer Center. During that time, Dr. Kovach, working with a molecular geneticist, Steve Sommer, M.D.,
Ph.D., published extensively on patterns of acquired mutations in human cancer cells as markers of environmental mutagens and as potential
indicators of breast cancer patient prognosis. Dr. Kovach has published over 100 articles on the pharmacology, toxicity and effectiveness
of anti-cancer treatments and on the molecular epidemiology of breast cancer.
We
believe that Dr. Kovach’s qualifications to sit on the Board include his extensive medical and research experience and, as founder
and Chief Executive Officer of the Company, his deep knowledge of the Company’s compounds and science.
Bas
van der Baan
Bas
van der Baan was appointed to our Board of Directors effective June 17, 2022. Effective September 26, 2023, Mr. van der Baan was appointed
as the Company’s President and Chief Executive Officer and as Vice Chairman of the Board of Directors. Mr. van der Baan has over
20 years of experience in the biotechnology industry, with a key focus on oncology and diagnostics. He has extensive knowhow in the process
of managing a compound from clinical development to reimbursement and commercialization, as well as the establishment of partnerships
with the pharmaceutical industry, academic collaborators, distributors, insurance companies and governments to successfully launch new
oncology products. Mr. van der Baan was most recently the Chief Clinical Officer of Agendia, an oncology molecular diagnostic company
based in Irvine, California and Amsterdam, through July 15, 2023. Mr. van der Baan is an independent director of Tethis S.p.A. a Milan-based
developer of a novel platform for liquid biopsy testing. Mr. van der Baan was co-founder of ThromboDx, a liquid biopsy company that was
acquired in 2016, Qameleon Therapeutics, a company developing synthetic lethal drug combinations for cancer treatment, and Oncosence,
an oncology drug development company using senescence as target for drug development. Mr. van der Baan started his career in 1997 at
a specialty chemicals division of Unilever that got acquired by ICI. In 2002, Mr. van der Baan joined Kreatech, a biotechnology company
acquired by Leica that specialized in life science reagents for gene expression, DNA and protein analysis. Mr. van der Baan holds a Master’s
Degree in Molecular Sciences from the Wageningen University in the Netherlands.
We
believe that Mr. van der Baan’s qualifications to sit on the Board include his extensive business and management experience.
Dr.
Stephen J. Forman
Stephen
J. Forman, M.D., is an internationally recognized expert in hematologic malignancies and bone marrow transplantation and is a leader
in preclinical and clinical cancer research. He is co-editor of Thomas’ Hematopoietic Cell Transplantation, a definitive textbook
for clinicians, scientists and health care professionals. Dr. Forman is the Francis and Kathleen McNamara Distinguished Chair in Hematology
and Hematopoietic Cell Transplantation at the City of Hope Comprehensive Cancer Center, a position he has held since 1987.
In
nearly 40 years at City of Hope, Dr. Forman has been instrumental in advancing the survival rates for patients suffering from cancers
of the blood and immune system such as leukemia, lymphoma and myeloma.
As
Director of the T Cell Immunotherapy Research Laboratory, his current research is focused on cancer immunotherapy, using the body’s
own immune system to attack cancer. Pharmacological enhancement of patients’ immune responses to their cancers is of special interest
to us as the enzyme target of its lead clinical compound, LB-100, has been reported recently to be critical to immune function. Much
of Dr. Forman’s current work centers on T cells and their cancer-fighting potential.
We
believe that Dr. Forman’s qualifications to sit on the Board include his extensive medical and research experience principally
at the City of Hope, one of the nation’s leading biomedical research and treatment institutions.
Dr.
Yun Yen
Yun
Yen, M.D., Ph.D., F.A.C.P. is a physician, scientist, innovator, and philanthropist. He is widely regarded as an expert in ribonucleotide
reductase, a critical target in cancer therapy and diagnostics. He is President Emeritus of Taipei Medical University (TMU) and Chair
Professor of the Ph.D. Program for Cancer Biology and Drug Discovery. Prior to TMU, Dr. Yen was the Allen and Lee Chao Endowed Chair
in Developmental Cancer Therapeutics, Chair of Molecular Pharmacology Department, Associate Director for Translational Research, and
Co-Director of the Developmental Cancer Therapeutics Program at the City of Hope NCI-designated Comprehensive Cancer Center, Duarte California.
He has published more than 300 peer-reviewed articles, holds over 60 patents, and has commercialized multiple methodologies involving
nanoparticles, small and large molecule drugs, biomarkers, stem cells, and medical devices. Dr. Yen also founded philanthropic organizations
aimed at serving the global cancer community and holds membership in numerous professional societies. He serves on the boards of Fulgent
Genetics and Tanvex BioPharma Inc.
We
believe that Dr. Yen’s qualifications to sit on the Board include his extensive medical and research experience.
Regina
Brown
Regina
Brown has been a practicing accountant for over 30 years. Currently, her practice has a wide range of clients, varying in size, industry
and geographic locations. They include large national corporations listed on the New York Stock Exchange, as well as local Southern California
businesses. Other clients consist of professionals, wholesalers, and high net worth individuals. Many of her clients have international
and cross-border operations.
As
a consequence of her depth of experience, she regularly assists other professionals with their client’s issues and performs tax
research and analysis in connection with litigation and other matters including marital dissolution, tax and accounting with respect
to mergers and acquisitions, implementation of internal controls, and extensive work in the area of trusts and estates. In addition,
international tax matters and compliance have become a significant part of her practice. Ms. Brown is a member in good standing of the
California Society of CPAs and the American Institute of Certified Public Accountants and has appeared as a speaker before both.
We
believe that Ms. Brown’s qualifications to sit on the Board include her extensive accounting and business experience.
Dr.
Rene Bernards
Dr.
Rene Bernards is a leader in the field of molecular carcinogenesis, working at the Netherlands Cancer Institute in Amsterdam. His research
focuses on identifying effective new drug combinations, new drug targets, and mechanisms of resistance to anti-cancer drugs. He has also
co-founded four biotechnology companies to bring his scientific discoveries to clinical oncology practice. He is a member of the Royal
Netherlands Academy of Sciences, an International Honorary Member of the American Academy of Arts and Sciences and an International Member
of the National Academy of Sciences (USA). Additionally, he is a fellow of the American Association for Cancer Research (AACR), and has
received the Princess Takamatsu Memorial Lectureship at this year’s AACR annual meeting where he presented new data on the unexpected
effectiveness of the Company’s lead compound, LB-100, when given with a variety of standard and investigational anti-cancer compounds
that have only modest activity on their own.
We
believe that Dr. Bernards’ qualifications to sit on the Board include his extensive medical and research experience.
2020
Stock Incentive Plan
The
Board of Directors of the Company has adopted, and the Company’s stockholders have approved, the 2020 Stock Incentive Plan (the
“2020 Plan”), which provides for the granting of equity-based awards, consisting of stock options, restricted stock, restricted
stock units, stock appreciation rights, and other stock-based awards to employees, officers, directors and consultants of the Company
and its affiliates for up to 413,333 shares of the Company’s common stock, under terms and conditions as determined by the Company’s
Board of Directors. As of September 30, 2023, unexpired stock options for 300,313 shares were issued and outstanding under the 2020 Plan
and 113,020 shares were available for issuance under the 2020 Plan. At the Annual Meeting, stockholders will be asked to approve an amendment
to the 2020 Plan to increase the number of shares issuable thereunder by 336,667 shares, to a total of 750,000 shares.
Director
Compensation
Under
our non-employee Director Compensation policy, the following compensation program was amended in June 2022 for the outside (independent)
directors:
Cash
Compensation (payable quarterly):
Base
director compensation - $20,000 per year
Chair
of audit committee - additional $10,000 per year
Chair
of any other committees - additional $5,000 per year
Member
of audit committee - additional $5,000 per year
Member
of any other committees - additional $2,500 per year
Equity
Compensation:
Appointment
of new director – Options for 25,000 shares of common stock, exercisable at the closing market price on date of grant for a period
of five years, vesting 50% on the grant date and the remainder vesting 12.5% on the last day of each subsequent calendar quarter beginning
in the quarter immediately subsequent to the date of grant until fully vested, subject to continued service. At the discretion of the
Board, for a nominee to the Board who is restricted by his or her respective institution or employer from receiving equity-based compensation,
in lieu of the grant of such stock options, the Company may elect to pay a one-time cash fee to $100,000 to such director, payable upfront.
Annual
grant of stock options to outside directors – effective on the last business day of the month of June, options to purchase 10,000
shares of common stock, exercisable for a period of five years, at the closing market price on the date of the grant, vesting 12.5% on
the last day of each subsequent calendar quarter-end beginning in the quarter immediately subsequent to the date of grant until fully
vested. If any director has served for less than 12 full calendar months at the grant date, the amount of such stock option grant shall
be prorated based on the length of service of such director. At the discretion of the Board, for a nominee who is restricted by his or
her respective institution or employer from receiving equity compensation, in lieu of the grant of such stock options, the Company may
elect to pay an annual cash fee of $40,000 to such director payable quarterly.
Effective
as of June 15, 2022, Dr. René Bernards was appointed to the Company’s Board of Directors. As a new director, in lieu of
a grant of stock options, Dr. Bernards received a one-time cash board fee of $100,000, payable immediately, and an annual cash board
fee of $40,000, payable quarterly. During the year ended December 31, 2022, the Company recorded charges to general and administrative
costs in the consolidated statement of operations of $133,873 with respect to his cash board compensation.
On
June 17, 2022, the Board of Directors appointed Bas van der Baan to the Board of Directors. In connection with his appointment to the
Board of Directors, and in accordance with the Company’s cash and equity compensation package for members of the Board of Directors,
Mr. van der Baan was granted stock options to purchase 25,000 shares of common stock, exercisable for a period of five years at an exercise
price of $7.40 per share (the closing market price on the grant date), vesting 50% on the grant date and the remainder vesting 12.5%
on the last day of each subsequent calendar quarter-end until fully vested, subject to continued service. The fair value of these stock
options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $158,525 ($6.341 per share), of which
$79,263 was attributable to the portion of the stock options fully vested on June 17, 2022 and was therefore charged to operations on
that date. The remaining unvested portion of the fair value of the stock options is being charged to operations ratably from June 17,
2022 through June 30, 2024. During the year ended December 31, 2022, the Company recorded a total charge to general and administrative
costs in the consolidated statement of operations of $100,249 with respect to these stock options. In conjunction with his Employment
Agreement with the Company, effective September 26, 2023, Mr. van der Baan was granted options to purchase 250,000 shares of common stock
exercisable for a period of five years at an exercise price of $1.95 per share, vesting quarterly over a three-year period on the last
day of each calendar quarter commencing October 1, 2023.
On
June 30, 2022, the Board of Directors, in accordance with the Company’s cash and equity compensation package for members of the
Board of Directors, granted to each of the five non-officer directors of the Company stock options to purchase 10,000 shares (a total
of 50,000 shares) of common stock, exercisable for a period of five years at an exercise price of $7.40 per share (the closing market
price on the grant date), vesting 12.5% on the last day of each subsequent calendar quarter-end until fully vested, subject to continued
service. The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be
$316,700 ($6.334 per share), which is being charged to operations ratably from July 1, 2022 through June 30, 2024. During the year ended
December 31, 2022, the Company recorded a total charge to general and administrative costs in the consolidated statement of operations
of $63,777 with respect to these stock options.
On
November 6, 2022, the Board of Directors granted to each of the four officers of the Company stock options to purchase 20,000 shares
(a total of 80,000 shares) of common stock, exercisable for a period of five years at an exercise price of $20.00 per share, vesting
25% on issuance and 25% on each anniversary date thereafter until fully vested, subject to continued service. The total fair value of
these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $262,560 ($3.282 per share),
which is being charged to operations ratably from November 6, 2022 through November 6, 2025. During the year ended December 31, 2022,
the Company recorded a total charge to general and administrative costs in the consolidated statement of operations of $75,520 with respect
to these stock options.
Effective
June 30, 2023, the Company granted to each of the then-for-independent directors stock options to purchase 10,000 shares, exercisable
for a period of five years at an exercise price of $5.88 per share vesting on the last day of each subsequent quarter until fully vested.
Summary
Compensation Table
The
table set forth below presents the compensation awarded to, earned by, or paid to our named directors for the years ended December 31,
2022, 2021 and 2020.
Name and Principal Position | |
Year | | |
Salary
($) | | |
Bonus
($) | | |
Stock Awards
($) | | |
Option Awards
($)(1) | | |
Non-Equity Incentive Plan Compensation
($) | | |
Non-Qualified Deferred Compensation Earnings
($) | | |
All Other Compensation
($) | | |
Total ($) | |
John S. Kovach | |
| 2022 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Director (2) | |
| 2021 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| 2020 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Philip F. Palmedo | |
| 2022 | | |
| - | | |
| - | | |
| - | | |
| 63,340 | | |
| - | | |
| - | | |
| 21,148 | | |
| 84,488 | |
Director (8) | |
| 2021 | | |
| - | | |
| - | | |
| - | | |
| 427,047 | | |
| - | | |
| - | | |
| 20,458 | | |
| 447,505 | |
| |
| 2020 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Stephen J. Forman | |
| 2022 | | |
| - | | |
| - | | |
| - | | |
| 63,340 | | |
| - | | |
| - | | |
| 22,500 | | |
| 85,840 | |
Director | |
| 2021 | | |
| - | | |
| - | | |
| - | | |
| 427,047 | | |
| - | | |
| - | | |
| 16,819 | | |
| 443,866 | |
| |
| 2020 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Winson Sze Chun Ho | |
| 2022 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Director (3) | |
| 2021 | | |
| - | | |
| - | | |
| - | | |
| 142,828 | | |
| - | | |
| - | | |
| - | | |
| 142,828 | |
| |
| 2020 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Yun Yen | |
| 2022 | | |
| - | | |
| - | | |
| - | | |
| 63,340 | | |
| - | | |
| - | | |
| 30,000 | | |
| 93,340 | |
Director | |
| 2021 | | |
| - | | |
| - | | |
| - | | |
| 427,047 | | |
| - | | |
| - | | |
| 21,833 | | |
| 448,880 | |
| |
| 2020 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Gil Schwartzberg | |
| 2022 | | |
| - | | |
| - | | |
| - | | |
| 63,340 | | |
| - | | |
| - | | |
| 16,630 | | |
| 79,970 | |
Director (4) | |
| 2021 | | |
| - | | |
| - | | |
| - | | |
| 1,037,830 | | |
| - | | |
| - | | |
| 14,556 | | |
| 1,052,386 | |
| |
| 2020 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Regina Brown | |
| 2022 | | |
| - | | |
| - | | |
| - | | |
| 63,340 | | |
| - | | |
| - | | |
| 30,000 | | |
| 93,340 | |
Director (5) | |
| 2021 | | |
| - | | |
| - | | |
| - | | |
| 942,582 | | |
| - | | |
| - | | |
| 19,167 | | |
| 961,749 | |
| |
| 2020 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
René Bernards | |
| 2022 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 133,873 | | |
| 133,873 | |
Director (6) | |
| 2021 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| 2020 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Bas van der Baan | |
| 2022 | | |
| - | | |
| - | | |
| - | | |
| 158,525 | | |
| - | | |
| - | | |
| 11,869 | | |
| 170,394 | |
Director (7) | |
| 2021 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| 2020 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
(1)
Consists of grant date fair value of option award calculated pursuant to the Black-Scholes option-pricing model.
(2)
From inception through September 26, 2023, Dr. Kovach was the Company’s President and Chief Executive Officer, and is currently
the Company’s Executive Chairman and Chief Scientific Officer.
(3)
Resigned as a director of the Company effective April 9, 2021.
(4)
Appointed as a director of the Company effective April 9, 2021 and died on October 30, 2022.
(5)
Appointed as a director of the Company effective May 11, 2021.
(6)
Appointed as a director of the Company effective June 15, 2022. Dr. Bernards received all of his compensation in 2022 in the form of
cash.
(7)
Appointed as a director of the Company effective June 17, 2022, and as the Company’s President and Chief Executive Officer effective
September 26, 2023.
(8)
Did not stand for re-election at the Company’s 2022 annual meeting of stockholders. Accordingly, his term as a director of the
Company ended effective October 7, 2022.
Family
Relationships
Eric
Forman, our appointed Vice President and Chief Operating Officer, is the son of board member Dr. Stephen Forman. Julie Forman, Mr. Forman’s
spouse, is Vice President of Morgan Stanley Wealth Management, where the Company’s cash is deposited and with which the Company
maintains a continuing banking relationship.
Involvement
in Certain Legal Proceedings
During
the past ten years, none of our officers, directors, promoters or control persons have been involved in any legal proceedings as described
in Item 401(f) of Regulation S-K.
VOTE
REQUIRED
Under
applicable Delaware law, the election of each nominee requires the affirmative vote by a plurality of the voting power of the shares
present and entitled to vote on the election of directors at the Annual Meeting at which a quorum is present.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES NAMED ABOVE AS DIRECTORS, AND PROXIES SOLICITED BY THE BOARD OF
DIRECTORS WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
INFORMATION
REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Code
of Business Conduct and Ethics
The
Board has established a corporate Code of Business Conduct and Ethics that applies to all officers, directors and employees and which
is intended to qualify as a “code of ethics” as defined by Item 406 of Regulation S-K of the Exchange Act. The Code of Business
Conduct and Ethics is available on the Investor Relations section of the Company’s website at www.lixte.com. If the Company
makes any substantive amendments to the Code of Business Conduct and Ethics or grants any waiver from a provision of the Code to any
executive officer or director, the Company will promptly disclose the nature of the amendment or waiver on its website.
Public
Availability of Corporate Governance Documents
Our
key corporate governance documents, including our Code of Conduct and the charters of our Audit Committee and Compensation Committee
are:
●
available on the Investor Relations section of our corporate website at www.lixte.com; and
●
available in print to any stockholder who requests them from our corporate secretary.
Director
Attendance
The
Board held five meetings during 2022. Each director attended at least 75% of Board meetings and meetings of the committees on which he
or she served.
Board
Qualification and Selection Process
Our
entire Board of Directors serves in place of a Nominating and Corporate Governance Committee. The Board does not have a specific written
policy or process regarding the nominations of directors, nor does it maintain minimum standards for director nominees or consider diversity
in identifying nominees for director. However, the Board does consider the knowledge, experience, integrity and judgment of potential
candidates for nominations to the Board. The Board will consider persons recommended by stockholders for nomination for election as directors.
The Board will consider and evaluate a director candidate recommended by a stockholder in the same manner as a Board-recommended nominee.
Stockholders wishing to recommend director candidates must follow the prior notice requirements as described herein.
Board
Diversity Matrix
The
following Board Diversity Matrix as of September 30, 2023 presents our Board Diversity statistics, in accordance with NASDAQ Rule 5606,
as self-disclosed by the directors. While the Board satisfies minimum objectives of NASDAQ Rule 5605(f)(2), the Board will continue to
consider the diversity of the Board in its selection of director nominees.
Total
Number of Directors: 6 |
|
|
Female |
|
Male |
Gender: |
|
|
|
|
Directors |
|
1 |
|
5 |
Number
of Directors Who Identify in Any of the Categories Below: |
|
|
|
|
Asian |
|
0 |
|
1 |
White |
|
1 |
|
4 |
Board
Leadership Structure and Risk Oversight
The
leadership structure of the Board has recently been revised so that it is being led by the Company’s recently-named Executive Chairman,
Dr. John S. Kovach, the founder of the Company, who was the Company’s President and Chief Executive Officer through September 26,
2023. In connection with the Company’s management succession plan, effective September 26, 2023, Dr. Kovach was appointed to the
position of Executive Chairman in lieu of his previous positions of President and Chief Executive Officer and is continuing in his position
as Chief Scientific Officer, and Bas van der Baan was appointed as President and Chief Executive Officer and as Vice Chairman of the
Board of Directors (see “Employment Agreements; Compensation”).
The
Executive Chairman of the Company’s Board is responsible for the management, development and effective performance of the Board,
and for providing leadership to the Directors in carrying out their collective responsibilities to supervise management, both directly
and through the various Board committees, in the conduct of the business affairs of the Company. The Executive Chairman is also considered
a member of management and remains up-to-date with the business and supports and backs-up the President and CEO. The Vice Chairman provides
ongoing support to the Chairman, assumes tasks and responsibilities at the request of the Chairman, and is available to fill in for the
Chairman as may be necessary due to incapacitation of the Chairman or other unexpected circumstances.
Specific
duties of the Executive Chairman include the following:
With
Respect to the Board:
● |
Presides
over meetings of the Board and the stockholders of the Company; |
|
|
● |
Consults
frequently with the Vice Chairman with respect to the business and operations of the Company; |
|
|
● |
Establishes
the agenda for meetings of the Board in discussion with the President and CEO, and ensure the proper and timely flow of information
and materials to the Board sufficiently in advance of meetings; |
|
|
● |
In
cooperation with the Compensation Committee, recommends compensation awards for the President and CEO and be available to advise
the Board on general compensation matters; |
|
|
● |
Advises
the Board with respect to the performance of the President and CEO and succession planning for that position; |
|
|
● |
Confirms
that the Directors and management understand the responsibilities of the Board and that the boundaries between the responsibilities
of the Board and the responsibilities of management are understood and respected; |
|
|
● |
Leads
the Board in ensuring that the Board and its various Committees assume their duties and responsibilities for the stewardship of the
Company as set out in the corporate governance policies approved by the Board and as disclosed in the Company’s public filings; |
|
|
● |
Acts
as a liaison between the Company’s management and the Board, when and if required; |
|
|
● |
Monitors
whether the Board’s various Committees are working effectively; |
|
|
● |
Monitors
whether the Board is receiving timely, accurate and comprehensive information before, during and after Board meetings; |
|
|
● |
Communicates
with the President and CEO regarding concerns of the Board, stockholders, other stakeholders, regulators and the public; and |
|
|
● |
Carries
out other duties requested by the Directors, as needs and circumstances arise. |
With
Respect to the President and CEO:
● |
Acts
as the principal sounding board, advisor and confidant for the President and CEO, including helping to review strategies, define
issues, maintain accountability and build relationships with important business partners, service providers, and other outside parties; |
|
|
● |
Provides
institutional knowledge and perspective to the CEO as to the history of the Company and its business activities and assets; |
|
|
● |
Works
closely with the President and CEO to develop executive succession planning options to support the Company’s strategies and
to capitalize on opportunities for growth and acquisitions; |
|
|
● |
Works
closely with the President and CEO to further the creation of a healthy corporate governance culture within the Company; |
|
|
● |
Assists
the President and CEO and other members of management in the short-range and long-range planning activities of the Company, including
pursuing clinical trial and licensing opportunities, joint ventures, acquisition, development and protection of intellectual property,
identifying debt and equity financing opportunities, and acquisition and growth strategies; |
|
|
● |
On
an annual basis, and as updated on an interim basis as may be necessary, ensures the development of corporate objectives and a corporate
business plan and operating budget, which the President and CEO is responsible for meeting, for the review and approval of the Board; |
|
|
● |
In
conjunction with the President and CEO, represents the Company before stakeholders, including stockholders, managers and employees,
the investment community, the industry, regulators and the public; and |
|
|
● |
Develops
and maintains a good working relationship between the office of the Executive Chairman, the President and CEO, and the Board to assure
open communications, cooperation, interdependence, mutual trust, respect, and commonality of purpose. |
Given
the size and responsibilities of the executive management team, as well as the age (87) and chronic medical conditions that Dr. Kovach
is continuing to deal with, the Board has determined that this leadership structure is in the best interests of the Company and its stockholders.
The
entire Board of Directors, as well as through its various committees, is responsible for oversight of our Company’s risk management
process. Management furnishes information regarding risk to the Board of Directors as requested. The Audit Committee discusses risk management
with the Company’s management and independent public accountants as set forth in the Audit Committee’s charter. The Compensation
Committee reviews the compensation programs of the Company to make sure economic incentives are tied to the long-term interests of the
stockholders. The Company believes that innovation and the building of long-term stockholder value are impossible without taking risks.
We recognize that imprudent acceptance of risk and the failure to identify risks could be a detriment to stockholder value. The executive
officers of the Company are responsible for assessing these risks on a day-to-day basis and for how to best identify, manage and mitigate
significant risks that the Company may face.
Board
Committees
The
Board has established an Audit Committee and a Compensation Committee. For the fiscal year ended December 31, 2022, Regina Brown, Bas
van der Baan, and Yun Yen served on the Audit Committee, with Ms. Brown serving as Chair. As Mr. van der Baan was appointed as the Company’s
President and Chief Executive Officer, effective September 26, 2023, Rene Bernards replaced Mr. van der Baan on the Audit Committee.
For the fiscal year ended December 31, 2022, Rene Bernards, Stephen Forman and Yun Yen served on the Compensation Committee, with Dr.
Yen serving as Chair.
The
following is a description of each of the committees and their composition:
Audit
Committee
Audit
Committee
Our
Audit Committee is responsible for, among other things:
|
●
|
Approving
and retaining the independent auditors to conduct the annual audit of our financial statements; |
|
|
|
|
●
|
reviewing
the proposed scope and results of the audit; |
|
|
|
|
●
|
reviewing
and pre-approving audit and non-audit fees and services; |
|
●
|
reviewing
accounting and financial controls with the independent auditors and our financial and accounting staff; |
|
|
|
|
●
|
reviewing
and approving transactions between us and our directors, officers and affiliates; |
|
|
|
|
●
|
establishing
procedures for complaints received by us regarding accounting matters; |
|
|
|
|
●
|
overseeing
internal audit functions, if any; and |
|
|
|
|
●
|
preparing
the report of the Audit Committee that the rules of the SEC require to be included in our annual meeting proxy statement. |
Our
Audit Committee currently consists of Rene Bernards, Dr. Yun Yen, and Regina Brown, with Ms. Brown serving as chair. Our Board of Directors
has affirmatively determined that each of the Audit Committee members meet the definition of “independent director” under
the Nasdaq rules, and that they meet the independence standards under Rule 10A-3. Each member of our Audit Committee meets the financial
literacy requirements of the Nasdaq rules. In addition, our Board of Directors has determined that Regina Brown qualifies as an “audit
committee financial expert”, as such term is defined in Item 407(d)(5) of Regulation S-K. Our Board of Directors has adopted a
written charter for the Audit Committee, which is available on our principal corporate website at www.lixte.com. The Audit Committee
met five times during 2022.
Report
of the Audit Committee of the Board of Directors
This
report of the Audit Committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of
or incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities
Act of 1933, as amended (the “Securities Act”), or under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting
material” or “filed” under either the Securities Act or the Exchange Act.
The
Audit Committee has reviewed and discussed the audited financial statements for the fiscal year ended December 31, 2021 with management
of the Company. The Audit Committee has discussed with the Company’s independent registered public accounting firm the matters
required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the
SEC. The Audit Committee has also received the written disclosures and the letter from the independent registered public accounting firm
required by applicable requirements of the PCAOB regarding the independent accountants’ communications with the Audit Committee
concerning independence, and has discussed with the independent registered public accounting firm the accounting firm’s independence.
Based on the foregoing, the Audit Committee has recommended to the Board of Directors that the audited financial statements be included
in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Submitted
by:
The
Audit Committee of
The
Board of Directors
Regina
Brown (Chair)
Bas
van der Baan
Yun
Yen
Compensation
Committee
Our
Compensation Committee is responsible for, among other things:
|
●
|
reviewing
and recommending the compensation arrangements for executive management; |
|
|
|
|
●
|
establishing
and reviewing general compensation policies with the objective to attract and retain superior talent, to reward individual performance
and to achieve our financial goals; |
|
|
|
|
●
|
administering
our stock incentive plans; and |
|
|
|
|
●
|
preparing
the report of the Compensation Committee that the rules of the SEC require to be included in our annual meeting proxy statement. |
Our
Compensation Committee consists of Dr. Yun Yen, Dr. Stephen Forman and Rene Bernards, with Dr. Yen serving as chair. Our Board of Directors
has determined that all three committee members are independent directors under Nasdaq rules. Our Board of Directors has adopted a written
charter for the Compensation Committee, which is available on our principal corporate website at www.lixte.com. The Compensation
Committee met two times during 2022.
Compensation
Committee Interlocks and Insider Participation
None
of the members of the Compensation Committee is an officer or employee of the Company. None of the executive officers currently serves,
or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive
officers serving on the Board or Compensation Committee.
Compensation
Committee Report
This
report of the Compensation Committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part
of or incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities
Act or under the Exchange Act, except to the extent that we specifically incorporate this information by reference, and will not otherwise
be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act.
The
Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this proxy statement with management.
Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion
and Analysis be incorporated into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
Submitted
by:
The
Compensation Committee of
The
Board of Directors
Dr.
Yun Yen (Chair)
Dr.
Stephen Forman
Dr.
Rene Bernards
Stockholder
Communication
Any
stockholder may communicate in writing by mail at any time with the entire Board of Directors or any individual director (addressed to
“Board of Directors” or to a named director), c/o Lixte Biotechnology Holdings, Inc., ATTN: Secretary, 680 East Colorado
Boulevard, Suite 180, Pasadena, California 91101. All communications will be compiled by the Secretary of the Company and promptly submitted
to the Board of Directors or the individual directors on a periodic basis.
Policy
Regarding Attendance at Annual Meetings of Stockholders
The
Company does not have a policy with regard to the attendance of Board members at annual meetings of stockholders.
Director
Independence
As
required under the Nasdaq Stock Market listing standards, a majority of the members of a listed company’s board of directors must
qualify as “independent”, as affirmatively determined by the Board of Directors. The Board of Directors consults with the
Company’s counsel to ensure that its determinations are consistent with relevant securities and other laws and regulations regarding
the definition of “independent”, including those set forth in pertinent listing standards of Nasdaq, as in effect from time
to time.
Consistent
with these considerations, after review of all relevant identified transactions or relationships between each director, or any of his
or her family members, and the Company, its senior management and its independent auditors, the Board of Directors has affirmatively
determined that the following director nominees are independent directors within the meaning of the applicable Nasdaq listing standards:
Stephen Forman, Yun Yen, Regina Brown, and Rene Bernards.
PROPOSAL
2:
RATIFICATION
OF THE APPOINTMENT
OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The
Audit Committee has appointed Weinberg & Company, P.A. (“Weinberg”) to serve as our independent registered public accounting
firm for the fiscal year ending December 31, 2023 and our Board of Directors has further directed that management submit the selection
of its independent registered public accountant firm for ratification by the stockholders at the Annual Meeting. Weinberg has audited
the Company’s financial statements since 2013. Representatives of Weinberg are not expected to be present at the Annual Meeting.
Stockholder
ratification of the selection of Weinberg as the Company’s independent registered public accountants is not required by Delaware
law, the Company’s certificate of incorporation, or the Company’s bylaws. However, the Audit Committee is submitting the
selection of Weinberg to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify
the selection, the Audit Committee will reconsider whether to retain that firm. Even if the selection is ratified, the Audit Committee
in its discretion may direct the appointment of different independent registered public accountants at any time during the year if the
Audit Committee determines that such a change would be in the best interests of the Company and its stockholders.
The
affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the annual
meeting will be required to ratify the selection of Weinberg. Abstentions will be counted toward the tabulation of votes cast on Proposal
2 and will have the same effect as negative votes. Broker non-votes will be counted towards a quorum, but will not be counted for any
purpose in determining whether Proposal 2 has been approved.
Audit
Fees
The
following table sets forth aggregate fees billed to us by Weinberg & Company, P.A., our independent registered public accounting
firm during the fiscal years ended December 31, 2022 and 2021.
| |
Years Ended December 31, | |
| |
2022 | | |
2021 | |
Audit Fees(1) | |
$ | 111,806 | | |
$ | 93,681 | |
Audit-Related Fees(2) | |
| — | | |
| — | |
Tax Fees(3) | |
| 28,553 | | |
| 28,140 | |
Other Fees(4) | |
| — | | |
| 25,200 | |
Total | |
$ | 140,359 | | |
$ | 147,021 | |
(1) |
Audit
fees represent fees for professional services provided in connection with the audit of our annual financial statements included in
our Annual Reports on Form 10-K and the review of our interim financial statements included in our Quarterly Reports on Form 10-Q
and services that are normally provided in connection with statutory or regulatory filings, excluding those fees included in Other
Fees. |
|
|
(2) |
Audit-related
fees represent fees for assurance and related services that are reasonably related to the performance of the audit or review of our
financial statements and not reported above under “Audit Fees.” |
|
|
(3) |
Tax
fees represent fees for professional services related to tax compliance, tax advice and tax planning. |
|
|
(4) |
Other
fees represent fees incurred with respect to our Registration Statements on Forms S-3 and S-8 declared effective by the U.S. Securities
and Exchange Commission during the year ended December 31, 2021. |
All
audit and audit-related services, tax services and other services rendered by Weinberg & Company, P.A. during the fiscal years ended
December 31, 2022 and 2021 were pre-approved by our Board of Directors. The Board of Directors has adopted a pre-approval policy that
provides for the pre-approval of all services performed for us by our independent registered public accounting firm.
Policy
for Pre-Approval of Independent Auditor Services
The
Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by Weinberg. These services may
include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year
and any pre-approval is detailed as to the specific service or category of service and is generally subject to a specific budget. The
independent auditor and management are required to periodically communicate to the Audit Committee regarding the extent of services provided
by the independent auditor in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee
may also pre-approve particular services on a case-by-case basis.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF WEINBERG & COMPANY, P.A. AS THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM, AND PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER
HAS INDICATED OTHERWISE ON THE PROXY.
PROPOSAL
3:
APPROVAL
OF AMENDMENT TO THE LIXTE BIOTECHNOLOGY HOLDINGS, INC.
2020
STOCK INCENTIVE PLAN
On
July 14, 2020, our Board of Directors adopted the Lixte Biotechnology Holdings, Inc. 2020 Stock Incentive Plan, which we refer to as
the “2020 Plan”. The 2020 Plan provides for the granting of equity-based awards, consisting of stock options, restricted
stock, restricted stock units, stock appreciation rights, and other stock-based awards to employees, officers, directors and consultants
of the Company and its affiliates. The adoption of the 2020 Plan fixed the aggregate number of shares of our common stock issuable under
the 2020 Plan at 233,333 shares. The Plan was approved by our stockholders on July 31, 2020. On August 8, 2022, our Board of Directors
adopted and, on October 7, 2022, our stockholders approved an amendment to the 2020 Plan to increase the aggregate number of shares of
our common stock issued or to be issuable under the 2020 Plan to 413,333 shares, including those previously issued or subject to outstanding
awards under the 2020 Plan.
The
Company does not have any other equity compensation plans. A copy of the 2020 Plan is included as Annex A to this Proxy Statement. The
amendment makes no other changes to the 2020 Plan. At September 30, 2023, the Company had 2,249,290 shares of common stock issued and
outstanding.
If
our stockholders approve this Proposal 3, we may issue the additional shares under the 2020 Plan as described below. If our stockholders
do not approve this Proposal 3, we will not implement the amendment to the 2020 Plan.
As
of June 30, 2023, unexpired stock options for 300,313 shares were issued and outstanding under the 2020 Plan and 113,020 shares were
available for issuance under the 2020 Plan. Additionally, as discussed under the section “Executive Officers and Management Compensation,”
in connection with his appointment as the Company’s President and Chief Executive Officer, Bas van der Baan was granted options
to purchase 250,000 shares of common stock vesting quarterly over a three-year period commencing October 1, 2023. The options were granted
under the 2020 Plan. However, the Company does not currently have sufficient shares authorized to issue all of the shares issuable in
the event that Mr. van der Baan attempted to exercise all of his options.
Our
Board of Directors believes that the grant of options and other stock awards is an important incentive for the Company’s officers,
employees and directors. In addition to the shares issuable upon the exercise of Mr. van der Baan options, the Company’s needs
under the 2020 Plan are expected to exceed the number of shares of common stock currently available.
Adding
additional shares to the 2020 Plan would, in addition to satisfy our contractual obligation to Mr. van der Baan, enhance our ability
to grant stock-based incentives and other equity awards to our officers, employees, non-employee directors, and other key persons in
the future, to ensure that we can continue to grant stock options and other equity awards to eligible recipients at levels determined
to be appropriate by our Compensation Committee or our Board of Directors, including annual and bonus stock option grants to our employees
to help us attract and retain talented individuals. As part of the amendment, we will also be increasing the authorized shares to be
issuable pursuant to Incentive Stock Options by the same amount.
Burn
rate, which is the rate at which companies use shares available for grant under their equity compensation plans, is an important factor
for investors concerned about stockholder dilution. In setting and recommending to stockholders the number of additional shares to be
authorized under the amendment to the 2020 Plan, the Compensation Committee and the Board of Directors considered the Company’s
burn rates for all grants of equity awarded by the Board of Directors for the past three fiscal years ended December 31, 2022, 2021 and
2020.
The
following table sets forth information regarding historical awards granted for the fiscal years ended December 31, 2022, 2021 and 2020,
and the corresponding net burn rate. The net burn rate is calculated by adding options granted, less any options forfeited, cancelled,
or expired, and dividing the result by the weighted average number of common shares outstanding. The Company’s three-year average
net burn rate is 7.0%.
Fiscal
Year Ended December 31, | |
Stock
Options
Granted | | |
Less Stock Options Forfeited, Cancelled or Expired | | |
Net Awards Granted
(1) | | |
Weighted Average Number of Common Shares Outstanding | | |
Burn Rate | |
2022 | |
| 165,000 | | |
| 38,854 | | |
| 126,146 | | |
| 1,582,029 | | |
| 8.0 | % |
2021 | |
| 140,000 | | |
| — | | |
| 140,000 | | |
| 1,347,384 | | |
| 10.4 | % |
2020 | |
| 20,000 | | |
| 3,333 | | |
| 16,667 | | |
| 1,127,713 | | |
| 1.5 | % |
Three-Year Average | |
| 108,333 | | |
| 14,062 | | |
| 94,271 | | |
| 1,352,375 | | |
| 7.0 | % |
(1) |
Net
Awards Granted represents the sum of Stock Options Granted, less Stock Options that were forfeited, cancelled, or expired. |
In
the opinion of the Board of Directors, our future success depends in large part on our ability to maintain a competitive position in
attracting, retaining and motivating officers and key employees with experience and ability. The Board of Directors believes that approval
of the amendment to the 2020 Plan and the authorization of the additional shares for issuance thereunder is appropriate and in the best
interests of our stockholders given the highly competitive environment in which we operate.
Our
compensation philosophy reflects broad-based eligibility for equity incentive awards for our officers and employees. By doing so, we
put the interests of our employees directly into alignment with those of our stockholders, as such awards reward employees upon improved
stock price performance. Granting equity awards focuses our employees who receive equity grants on successfully achieving corporate objectives,
and we are embedding in our corporate culture the necessity for employees to think and act as stockholders.
Because
there are a limited number of shares of our common stock that remain available for issuance as to new awards under the 2020 Plan, we
will be unable to attract, retain and motivate our officers, employees, directors and consultants without an increase in the number of
shares of common stock that are available for issuance under the 2020 Plan. This could significantly and adversely affect our ability
to operate our business and reach our corporate objectives.
A
summary of the 2020 Plan is set forth below.
2020
Stock Incentive Plan
Summary
The
2020 Plan provides for the granting of equity-based awards, consisting of stock options, restricted stock, restricted stock units, stock
appreciation rights, and other stock-based awards to employees, officers, directors and consultants, under terms and conditions as determined
by our Board of Directors.
Having
an adequate number of shares available for future equity compensation grants is necessary to promote our long-term success and the creation
of stockholder value by:
|
● |
Enabling
us to continue to attract and retain the services of key service providers who would be eligible to receive grants; |
|
|
|
|
● |
Aligning
participants’ interests with stockholders’ interests through incentives that are based upon the performance of our common
stock; |
|
|
|
|
● |
Motivating
participants, through equity incentive awards, to achieve long-term growth in our business, in addition to short-term financial performance;
and |
|
|
|
|
● |
Providing
a long-term equity incentive program that is competitive as compared to other companies with whom we compete for talent. |
The
2020 Plan permits the discretionary award of incentive stock options (“ISOs”), non-statutory stock options (“NQSOs”),
restricted stock, restricted stock units (“RSUs”), stock appreciation rights (“SARs”), other equity awards and/or
cash awards to selected participants. The 2020 Plan will remain in effect until July 14, 2030.
The
2020 Plan, as amended on October 7, 2022, provides for the reservation of 413,333 shares of common stock for issuance thereunder (the
“Share Limit”), and provides that the maximum number of shares that may be issued pursuant to the exercise of ISOs is 413,333
(the “ISO Limit”). As of June 30, 2023, unexpired stock options for 300,313 shares were issued and outstanding under the
2020 Plan and 113,020 shares were available for issuance.
Key
Features of the 2020 Plan
Certain
key features of the 2020 Plan are summarized as follows:
|
● |
If
not terminated earlier by our Board of Directors, the 2020 Plan will terminate on July 14, 2030. |
|
|
|
|
● |
Up
to a maximum aggregate of 413,333 shares of common stock may be issued under the 2020 Plan. The maximum number of shares that may
be issued pursuant to the exercise of ISOs is also 413,333. |
|
|
|
|
● |
The
2020 Plan is administered by the Compensation Committee, which is comprised solely of independent members of our Board of Directors.
The Board of Directors may designate a separate committee to make awards to employees who are not officers subject to the reporting
requirements of Section 16 of the Exchange Act. |
|
|
|
|
● |
Employees,
consultants and board members are eligible to receive awards, provided that the Compensation Committee has the discretion to determine
(i) who shall receive any awards, and (ii) the terms and conditions of such awards. |
|
|
|
|
● |
Awards
may consist of ISOs, NQSOs, restricted stock, RSUs, SARs, other equity awards and/or cash awards. |
|
|
|
|
● |
Stock
options and SARs may not be granted at a per share exercise price below the fair market value of a share of our common stock on the
date of grant. |
|
|
|
|
● |
Stock
options and SARs may not be repriced or exchanged without stockholder approval. |
|
|
|
|
● |
The
maximum exercisable term of stock options and SARs may not exceed ten years. |
|
|
|
|
● |
Awards
are subject to recoupment of compensation policies adopted by us. |
Eligibility
to Receive Awards. Employees, consultants and members of our Board of Directors are eligible to receive awards under the 2020
Plan. The Compensation Committee determines, in its discretion, the selected participants who will be granted awards under the 2020 Plan.
Shares
Subject to the 2020 Plan. The maximum number of shares of common stock that can be issued under the 2020 Plan is 413,333 shares.
The
shares underlying forfeited or terminated awards (without payment of consideration), or unexercised awards become available again for
issuance under the 2020 Plan. No fractional shares may be issued under the 2020 Plan. No shares will be issued with respect to a participant’s
award unless applicable tax withholding obligations have been satisfied by the participant.
Administration
of the 2020 Plan. The 2020 Plan is administered by the Compensation Committee of the Board of Directors, which consists of independent
board members. With respect to certain awards issued under the 2020 Plan, the members of the Compensation Committee also must be “Non-Employee
Directors” under Rule 16b-3 of the Exchange Act. Subject to the terms of the 2020 Plan, the Compensation Committee has the sole
discretion, among other things, to:
|
● |
Select
the individuals who will receive awards; |
|
|
|
|
● |
Determine
the terms and conditions of awards (for example, performance conditions, if any, and vesting schedule); |
|
|
|
|
● |
Correct
any defect, supply any omission, or reconcile any inconsistency in the 2020 Plan or any award agreement; |
|
|
|
|
● |
Accelerate
the vesting, extend the post-termination exercise term or waive restrictions of any awards at any time and under such terms and conditions
as it deems appropriate, subject to the limitations set forth in the 2020 Plan; |
|
|
|
|
● |
Permit
a participant to defer compensation to be provided by an award; and |
|
|
|
|
● |
Interpret
the provisions of the 2020 Plan and outstanding awards. |
The
Compensation Committee may suspend vesting, settlement, or exercise of awards pending a determination of whether a selected participant’s
service should be terminated for cause (in which case outstanding awards would be forfeited). Awards may be subject to any policy that
the Board of Directors may implement on the recoupment of compensation (referred to as a “clawback” policy). The members
of the Board of Directors, the Compensation Committee and their delegates shall be indemnified by us to the maximum extent permitted
by applicable law for actions taken or not taken regarding the 2020 Plan.
Types
of Awards.
Stock
Options. A stock option is the right to acquire shares at a fixed exercise price over a fixed period of time. The Compensation
Committee determines, among other terms and conditions, the number of shares covered by each stock option and the exercise price of the
shares subject to each stock option, but such per share exercise price cannot be less than the fair market value of a share of our common
stock on the date of grant of the stock option. The exercise price of each stock option granted under the 2020 Plan must be paid in full
at the time of exercise, either with cash, or through a broker-assisted “cashless” exercise and sale program, or net exercise,
or through another method approved by the Compensation Committee. Stock options granted under the 2020 Plan may be either ISOs or NQSOs.
In order to comply with Treasury Regulation Section 1.422-2(b), the 2020 Plan provides that no more than 2,333,333 shares may be issued
pursuant to the exercise of ISOs.
SARs.
A SAR is the right to receive, upon exercise, an amount equal to the difference between the fair market value of the shares on the date
of the SAR’s exercise and the aggregate exercise price of the shares covered by the exercised portion of the SAR. The Compensation
Committee determines the terms of SARs, including the exercise price (provided that such per share exercise price cannot be less than
the fair market value of a share of our common stock on the date of grant), the vesting and the term of the SAR. Settlement of a SAR
may be in shares of common stock or in cash, or any combination thereof, as the Compensation Committee may determine. SARs may not be
repriced or exchanged without stockholder approval.
Restricted
Stock. A restricted stock award is the grant of shares of our common stock to a selected participant and such shares may be subject
to a substantial risk of forfeiture until specific conditions or goals are met. The restricted shares may be issued with or without cash
consideration being paid by the selected participant as determined by the Compensation Committee. The Compensation Committee also will
determine any other terms and conditions of an award of restricted stock.
RSUs.
RSUs are the right to receive an amount equal to the fair market value of the shares covered by the RSU at some future date after the
grant. The Compensation Committee will determine all of the terms and conditions of an award of RSUs. Payment for vested RSUs may be
in shares of common stock or in cash, or any combination thereof, as the Compensation Committee may determine. RSUs represent an unfunded
and unsecured obligation for us, and a holder of a stock unit has no rights other than those of a general creditor.
Other
Awards. The 2020 Plan also provides that other equity awards, which derive their value from the value of our shares or from increases
in the value of our shares, may be granted. In addition, cash awards may also be issued. Substitute awards may be issued under the 2020
Plan in assumption of or substitution for or exchange for awards previously granted by an entity which we may acquire.
Limited
Transferability of Awards. Awards granted under the 2020 Plan generally are not transferrable other than by will or by the laws
of descent and distribution. However, the Compensation Committee may in its discretion permit the transfer of awards other than ISOs.
Change
in Control. In the event that we are a party to a merger or other reorganization or similar transaction, outstanding 2020 Plan
awards will be subject to the agreement pertaining to such merger or reorganization. Such agreement may provide for (i) the continuation
of the outstanding awards by us if we are a surviving corporation, (ii) the assumption or substitution of the outstanding awards by the
surviving entity or its parent, (iii) full exercisability and/or full vesting of outstanding awards, or (iv) cancellation of outstanding
awards either with or without consideration, in all cases with or without consent of the selected participant. The Compensation Committee
will decide the effect of a change in control of us on outstanding awards.
Amendment
and Termination of the 2020 Plan. The Board of Directors generally may amend or terminate the 2020 Plan at any time and for any
reason, except that it must obtain stockholder approval of material amendments to the extent required by applicable laws, regulations
or rules.
Federal
Income Tax Consequences
The
following discussion is a summary of the federal income tax provisions relating to the grant and exercise of awards under the 2020 Plan
and the subsequent sale of Common Stock acquired under the 2020 Plan. The tax effect of awards may vary depending upon the circumstances,
and the income tax laws and regulations change frequently. This summary is not intended to be exhaustive and does not constitute legal
or tax advice.
General.
A recipient of an award of Options or Stock Appreciation Rights under the 2020 Plan will realize no taxable income at the time of grant
if the exercise price is not less than the fair market value of our Common Stock on the date of the grant. The recipient generally will
realize no taxable income at the time of a grant of a Stock Award so long as the Stock Award is not vested (that is, remains subject
to forfeiture and is not transferable) and an election under Section 83(b) of the Internal Revenue Code is not made.
Non-Qualified
Options. The holder of a Non-Qualified Option will recognize ordinary income at the time of the Non-Qualified Option exercise in
an amount equal to the excess of the fair market value of the shares on the date of exercise over the exercise price. This taxable income
will be subject to payroll tax withholding if the holder is an employee.
When
a holder disposes of shares acquired upon the exercise of a Non-Qualified Option, any amount received in excess of the fair market value
of the shares on the date of exercise will be treated as long-term or short-term capital gain, depending upon the holding period of the
shares, and if the amount received is less than the fair market value of the shares on the date of exercise, the loss will be treated
as long-term or short-term capital loss, depending upon on the holding period of the shares.
Incentive
Options. The holder of an Incentive Option will not recognize taxable income upon exercise of the Incentive Option. In order to retain
this tax benefit, the holder must make no disposition of the shares so received for at least one year from the date of exercise and for
at least two years from the date of grant of the Incentive Option. The holder’s compliance with the holding period requirement
and other applicable tax provisions will result in the realization of long-term capital gain or loss when he or she disposes of the shares,
measured by the difference between the exercise price and the amount received for the shares at the time of disposition.
If
a holder disposes of shares acquired by exercise of an Incentive Option before the expiration of the required holding period, the gain,
if any, arising from such disqualifying disposition will be taxable as ordinary income in the year of disposition to the extent of the
lesser of (1) the excess of the fair market value of the shares over the exercise price on the date the Incentive Option was exercised
or (2) the excess of the amount realized over the exercise price upon such disposition. Any amount realized in excess of the fair market
value on the date of exercise is treated as long-term or short-term capital gain, depending upon the holding period of the shares. If
the amount realized upon such disposition is less than the exercise price, the loss will be treated as long-term or short-term capital
loss, depending upon the holding period of the shares.
For
purposes of the alternative minimum tax, the holder will recognize as an addition to his or her tax base, upon the exercise of an Incentive
Option, an amount equal to the excess of the fair market value of the shares at the time of exercise over the exercise price. If the
holder makes a disqualifying disposition in the year of exercise, the holder will recognize taxable income for purposes of the regular
income tax and the holder’s alternative minimum tax base will not be additionally increased.
Stock
Appreciation Rights. The holder of a Stock Appreciation Right will recognize ordinary income at the time that it is exercised in
an amount equal to the excess of the fair market value of the number of shares of Common Stock as to which it is exercised on the date
of exercise over their value at the date of grant. This taxable income will be subject to payroll tax withholding if the holder is an
employee.
Stock
Awards. The recipient of a Stock Award will recognize ordinary income when the stock vests in an amount equal to the excess of the
fair market value of the shares at the time of vesting over the purchase price for the shares, if any, subject to payroll tax withholding
if the holder is an employee. When the recipient sells a Stock Award that has vested, any amount received in excess of the fair market
value of the shares on the date of vesting will be treated as long-term or short-term capital gain, depending upon the holding period
of the shares (after vesting has occurred), and if the amount received is less than the fair market value on the date of vesting, the
loss will be treated as long-term or short-term capital loss, depending on the holding period of the shares. Dividends paid on Stock
Awards that have not vested and that have not been the subject of an election under Section 83(b) of the Internal Revenue Code are treated
as compensation income, subject to payroll tax withholding with respect to an employee.
Section
83(b) of the Internal Revenue Code permits the recipient to elect, not more than thirty (30) days after the date of receipt of a Stock
Award, to include as ordinary income the difference between the fair market value of the Stock Award on the date of grant and its purchase
price (rather than being taxed as the shares vest). If such an election is made, the holding period for long-term capital gain or loss
treatment will commence on the day following the receipt of the Stock Award, dividends on the Stock Award will be treated as such and
not as compensation, and the tax basis of the shares will be their fair market value at the date of grant.
Deduction
for the Company. The Company will be entitled to a deduction for federal income tax purposes at the same time and in the same amount
as the recipient of an award is considered to have realized ordinary income as a result of the award, assuming that the limitation under
Section 162(m) of the Internal Revenue Code is not applicable. Assuming that the holder of shares received on exercise of an Incentive
Option disposes of the shares after compliance with the holding period requirement described above, the Company will not be entitled
to a federal income tax deduction since the holder will not have realized any ordinary income in the transaction.
Prior
to the Tax Cuts and Jobs Act of 2017 (“TCJA”), Section 162(m) of the Internal Revenue Code generally disallowed a tax deduction
to publicly held companies for compensation paid to certain executive officers in excess of $1 million per officer in any year that did
not qualify as performance-based. Under the TCJA, the performance-based exception has been repealed and the $1 million deduction limit
now applies to anyone serving as the chief executive officer or the chief financial officer at any time during the taxable year and the
top three other highest compensated executive officers serving at any fiscal year-end.
Equity
Compensation Plan Information
Securities
Authorized For Issuance Under Equity Incentive Plans
Set
forth in the table below is information regarding awards made under compensation plans or arrangements through December 31, 2022, the
most recently completed fiscal year.
Plan Category | |
Number of securities to be issued upon exercise of outstanding options, warrants and rights | | |
Weighted average price of outstanding options, warrants and rights | | |
Number of securities remaining available for future issuance compensation plans (excluding securities reflected in column 1) | |
| |
| (1) | | |
| (2) | | |
| (3) | |
| |
| | | |
| | | |
| | |
Equity Compensation Plans Approved by Security Holders | |
| 260,313 | | |
$ | 25.25 | | |
| 153,020 | (1) |
| |
| | | |
| | | |
| | |
Equity Compensation Plans Not Approved by Security Holders | |
| — | | |
$ | — | | |
| — | |
(1)
The 153,020 shares that remain available at December 31, 2022 are pursuant to the Company’s 2020 Stock Incentive Plan.
Interests
of Officers and Directors in this Proposal
Members
of our Board of Directors and our executive officers are eligible to receive awards under the terms of the 2020 Plan, and they therefore
have a substantial interest in Proposal 3.
Required
Vote of Stockholders
The
affirmative vote of a majority of the shares of common stock present, in person or by proxy, and entitled to vote at the Annual Meeting
is required for approval of Proposal 3.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT TO THE LIXTE BIOTECHNOLOGY HOLDINGS, INC. 2020 STOCK INCENTIVE PLAN,
AND PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
EXECUTIVE
OFFICERS
Officers
The
names of our officers and their ages, positions, and biographies are set forth below. The backgrounds of Dr. John S. Kovach and Bas van
der Baan are discussed under the section Nominees for Election to Board of Directors. With the exception of Mr. van der Baan, the persons
listed below served as our officers during 2022:
Name |
|
Age |
|
Position |
Dr.
John S. Kovach |
|
87 |
|
Executive
Chairman and Chief Scientific Officer |
Bas
van der Baan |
|
51 |
|
Vice
Chairman and President and Chief Executive Officer |
Dr.
James S. Miser |
|
76 |
|
Chief
Medical Officer |
Robert
N. Weingarten |
|
71 |
|
Vice
President and Chief Financial Officer |
Eric
J. Forman |
|
43 |
|
Vice
President and Chief Operating Officer |
Dr.
James S. Miser
James
S. Miser, M.D., is a pediatric hematologist/oncologist, internationally recognized as an expert in the study and treatment of childhood
cancers. His outstanding career includes leadership positions as Clinical Director, Department of Pediatrics, Division of Pediatric Hematology/Oncology,
Children’s Hospital and Medical Center and Associate Member, Fred Hutchinson Cancer Research Center, Seattle, Washington; Chairman,
Division of Pediatrics, Director, Department of Pediatric Hematology/Oncology, President and Chief Executive Officer, and Chief Medical
Officer, all at City of Hope National Medical Center, Duarte, California. Since 2009, he has been a member of the Active Staff, Department
of Pediatrics at City of Hope, most currently serves as a consultant to the College of Medical Sciences and Technology, Taipei Medical
University, Taipei, Taiwan.
Dr.
Miser has extensive experience in the clinical development of new anti-cancer drugs for pediatric malignancies, leading many clinical
trials at institutional and national cancer study groups. He is expert in the design and monitoring of clinical cancer trials and was
a member of the Soft Tissue Sarcoma Strategy Group, and Member of the New Agents Executive and Steering Committee, Phase II Coordinator
Children’s Cancer Group and Chairman, Data Monitoring Committee, National Wilms Tumor Study. He has authored more than a 100 peer
reviewed articles dealing primarily with pediatric clinical cancer studies.
Robert
N. Weingarten
Mr.
Weingarten was appointed to serve as our Vice President and Chief Financial Officer effective August 12, 2020. Mr. Weingarten is an experienced
business consultant and advisor with a consulting practice focusing on accounting and SEC compliance issues. Since 1979, Mr. Weingarten
has provided such financial consulting and advisory services, has acted as chief financial officer, and has served on the boards of directors
of numerous public companies in various stages of development, operation or reorganization. Mr. Weingarten has experience in a variety
of industries, including the pharmaceutical industry.
Mr.
Weingarten has been a Director of Guardion Health Sciences, Inc. since June 2015 and Chairman of its Board of Directors since July 2020.
Previously, Mr. Weingarten served as Lead Director on Guardion’s Board of Directors from January 2017 to March 2020. Mr. Weingarten
received a B.A. in Accounting from the University of Washington in 1974, an M.B.A. in Finance from the University of Southern California
in 1975, and is a Certified Public Accountant (inactive) in the State of California.
Eric
Forman, J.D.
Mr.
Forman has led our business development as a consultant since 2013. Effective as of October 1, 2020, Mr. Forman was appointed as Chief
Administrative Officer. Effective November 6, 2022, Mr. Forman was promoted as Vice President and Chief Operating Officer. Mr. Forman’s
responsibilities include overseeing all internal operations, the development of science/business collaborations, and the management of
our growing intellectual property portfolio. Prior to his involvement with the Company, he served as Counsel and Senior Project Manager
at Shore Group Associates, managing in-house legal, tax, and regulatory affairs and supervising client relations for financial software
and mobile application development teams.
As
an attorney, Mr. Forman has represented and advised both technology and biotechnology companies, entrepreneurs, non-profits, and start-ups
with a focus on intellectual property, licensing, corporate structure and transactions.
Mr.
Forman earned a B.A. Degree Cum Laude from Loyola Marymount University and a J.D. from the Benjamin N. Cardozo School of Law. He has
an active law license and is a member of the New York State Bar Association.
EXECUTIVE
OFFICERS AND MANAGEMENT COMPENSATION
Compensation
Discussion and Analysis
The
following discussion and analysis of compensation arrangements of our named executive officers for 2022, 2021 and 2020 should be read
together with the compensation tables and related disclosures set forth below.
We
believe our success is driven by the leadership of our named executive officers. Our named executive officers are primarily responsible
for many of our important business development relationships. The growth and maintenance of these relationships is critical to ensuring
our future success, as is experience in managing these relationships. Therefore, it is important to our success that we retain the services
of these individuals. Our Board believes that our current executive compensation program properly aligns the interests of our executive
officers with those of our stockholders.
General
Philosophy
Our
overall compensation philosophy is to provide an executive compensation package that enables us to attract, retain and motivate executive
officers to achieve our near-term and long-term business objectives. We also believe that a meaningful portion of the executive officer’s
total cash compensation should be at risk and dependent upon the achievement of our objectives. Among other things, our compensation
philosophy aims to reward strong performance with competitive pay and thus better enable us to retain executive officers who contribute
to the long-term success of the Company.
We
attempt to pay our executive officers competitively in order to retain the most capable people in the industry. In making executive and
employee compensation decisions, the Compensation Committee considers achievement of certain goals and criteria, some of which relate
to the Company’s performance and others to the performance of the individual employee.
The
Compensation Committee periodically evaluates our compensation policies to determine whether we remain competitive among industry peers
and continue to attract, retain and motivate key personnel. To meet these objectives, the Compensation Committee may from time to time
increase salaries, award additional equity grants or provide other short and long-term incentive compensation. Our Board of Directors
values the perspective of our stockholders, and the Compensation Committee will continue to consider the outcome of future say-on-pay
votes, as well as any other stockholder feedback, when making compensation decisions for the named executive officers.
The
Compensation Committee generally seeks input from our executive officers when discussing the performance and compensation levels for
executives and other Company leadership. The Compensation Committee also works with our Chief Executive Officer and Chief Financial Officer
to evaluate the financial, accounting, tax and retention implications of our various compensation programs. No executive participates
in deliberations relating to his or her own compensation.
The
Compensation Committee will consider the results of any say-on-pay vote on our executive compensation program as part of its executive
compensation review. Our Board of Directors values the opinions of our stockholders, and the Compensation Committee will continue to
consider the outcome of future say-on-pay votes, as well as any feedback received, when making compensation decisions for the named executive
officers.
Compensation
Program and Forms of Compensation
We
provide our executive officers with a compensation package which currently consists of base salary, equity incentives and participation
in benefit plans generally available to other employees. In establishing total compensation, the Compensation Committee considers individual
and company performance, as well as market information regarding compensation paid by other companies in our peer group.
Base
salaries are calculated to be competitive within our industry and to reflect the capabilities and experience of our executives. The equity
awards incentivize executives to deliver long-term stockholder value, while serving as a retention vehicle for our executive talent.
The
Compensation Committee conducts a risk assessment of the Company’s compensation practices to analyze whether they encourage employees
to take excessive or inappropriate risks. After completing the review, the Compensation Committee has concluded that the Company’s
compensation programs are, on balance, consistent with market practices and do not present material risks to the Company.
Hedging
Policy
The
Company has established an Insider Trading Policy, which, among other things, prohibits trading in securities with material nonpublic
information including through hedging activities. Further, none of the Company’s employees, directors, consultants and contractors
may trade in options, warrants, puts and calls or similar instruments on our securities or sell our securities “short”. Engaging
in any transactions relating to our common stock must be pre-cleared by our Chief Financial Officer.
Tax
and Accounting Considerations
Limitation
on Deductibility of Executive Compensation
Under
Section 162(m) of the Internal Revenue Code (“Section 162(m)”), compensation paid to any publicly held corporation’s
“covered employees” that exceeds $1 million per taxable year for any covered employee is generally non-deductible. The Compensation
Committee considers tax implications as one factor in determining executive compensation, but also looks at other factors in making its
decisions, and retains the flexibility to provide compensation for the Company’s named executive officers in a manner consistent
with the goals of the Company’s executive compensation program and the best interests of the Company and its stockholders, which
may include providing for compensation that is not deductible by the Company due to the deduction limit under Section 162(m). The Compensation
Committee also retains the flexibility to modify compensation that may have been initially intended to be exempt from the deduction limit
under Section 162(m) if it determines that such modifications are consistent with the Company’s business needs.
Accounting
Treatment
Under
the Financial Accounting Standards Board Accounting Standards Codification Topic 718 (Compensation – Stock Compensation), the Company
is required to estimate and record an expense for each award of equity compensation allocated over the vesting period of the award. We
record share-based compensation expense on an ongoing basis. The accounting impact of our compensation programs is one of many factors
that the Compensation Committee considers in determining the structure and size of our executive compensation programs.
Summary
Compensation Table
The
table set forth below presents the compensation awarded to, earned by or paid to our named executive officers for the years ended December
31, 2022, 2021 and 2020.
Executive | |
Year | | |
Salary ($) | | |
Bonus ($) | | |
Stock Awards ($) | | |
Option Awards ($)(1) | | |
Non-Equity Incentive Plan Compensation ($) | | |
Non-Qualified Deferred Compensation Earnings ($) | | |
All Other Compensation ($) | | |
Total ($) | |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
John S. Kovach (2) | |
| 2022 | | |
| 250,000 | | |
| - | | |
| - | | |
| 65,640 | | |
| - | | |
| - | | |
| - | | |
| 315,640 | |
| |
| 2021 | | |
| 250,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 250,000 | |
| |
| 2020 | | |
| 107,500 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 107,500 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
James S. Miser (3) | |
| 2022 | | |
| 175,000 | | |
| - | | |
| - | | |
| 65,640 | | |
| - | | |
| - | | |
| - | | |
| 240,640 | |
| |
| 2021 | | |
| 166,667 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 166,667 | |
| |
| 2020 | | |
| 62,500 | | |
| - | | |
| - | | |
| 572,650 | | |
| - | | |
| - | | |
| - | | |
| 635,150 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Robert N. Weingarten (4) | |
| 2022 | | |
| 175,000 | | |
| - | | |
| - | | |
| 65,640 | | |
| - | | |
| - | | |
| - | | |
| 240,640 | |
| |
| 2021 | | |
| 156,667 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 156,667 | |
| |
| 2020 | | |
| 46,451 | | |
| - | | |
| - | | |
| 400,855 | | |
| - | | |
| - | | |
| - | | |
| 447,306 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Eric J. Forman (5) | |
| 2022 | | |
| 178,819 | | |
| - | | |
| - | | |
| 65,640 | | |
| - | | |
| - | | |
| - | | |
| 244,459 | |
| |
| 2021 | | |
| 156,667 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 156,667 | |
| |
| 2020 | | |
| 30,000 | | |
| - | | |
| - | | |
| 400,855 | | |
| - | | |
| - | | |
| - | | |
| 430,855 | |
(1)
Consists of grant date fair value of option award calculated pursuant to the Black-Scholes option-pricing model.
(2)
From inception through September 26, 2023, John S. Kovach was the Company’s President and Chief Executive Officer. Dr. Kovach entered
into an employment agreement with the Company effective July 15, 2020. In connection with the Company’s management succession plan,
effective September 26, 2023, Dr. Kovach was appointed to the position of Executive Chairman in lieu of his positions as President and
Chief Executive Officer and is continuing in his position as Chief Scientific Officer, with the same salary applicable to his prior positions.
On November 6, 2022, Dr. Kovach was awarded an option grant for 20,000 shares of common stock valued at $3.282 per share.
(3)
James S. Miser has been the Company’s Chief Medical Officer since August 1, 2020. In connection with his employment agreement,
Dr. Miser was awarded an option grant for 8,333 shares of common stock valued at $68.718 per share. On November 6, 2022, Dr. Miser was
awarded an option grant for 20,000 shares of common stock valued at $3.282 per share.
(4)
Robert N. Weingarten has been the Company’s Vice President and Chief Financial Officer since August 12, 2020. In connection with
his employment agreement, Mr. Weingarten was awarded an option grant for 58,333 shares of common stock valued at $68.718 per share. On
November 6, 2022, Mr. Weingarten was awarded an option grant for 20,000 shares of the Company’s common stock valued at $3.282 per
share.
(5)
Eric J. Forman was the Company’s Chief Administrative Officer from July 15, 2020 to November 6, 2022. In connection with his employment
agreement, Mr. Forman was awarded an option grant for 5,833 shares of common stock valued at $68.718 per share. Effective November 6,
2022, Mr. Forman was promoted to Vice President and Chief Operating Officer. On November 6, 2022, Mr. Forman was awarded an option grant
for 20,000 shares of common stock valued at $3.282 per share.
There
were no officer option exercises during the years ended December 31, 2022, 2021 or 2020.
Outstanding
Equity Awards at December 31, 2022
The
table set forth below presents information regarding outstanding stock options held by our named executive officers as of December 31,
2022.
NAME | |
GRANT DATE | |
VESTING COMMENCEMENT DATE | |
NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS EXERCISABLE (#) | | |
NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS UNEXERCISABLE (#) | | |
OPTION EXERCISE PRICE ($) | | |
OPTION EXPIRATION DATE |
| |
| |
| |
| | |
| | |
| | |
|
Dr. John S. Kovach | |
November 6, 2022 | |
November 6, 2022 | |
| 5,000 | | |
| 15,000 | | |
| 20.00 | | |
November 6, 2027 |
| |
| |
| |
| | | |
| | | |
| | | |
|
Dr. James S. Miser | |
August 1, 2020 | |
August 1, 2020 | |
| 4,167 | | |
| 4,167 | | |
| 71.40 | | |
August 1, 2025 |
| |
November 6, 2022 | |
November 6, 2022 | |
| 5,000 | | |
| 15,000 | | |
| 20.00 | | |
November 6, 2027 |
| |
| |
| |
| | | |
| | | |
| | | |
|
Robert N. Weingarten | |
August 12, 2020 | |
August 12, 2020 | |
| 2,917 | | |
| 2,917 | | |
| 71.40 | | |
August 12, 2025 |
| |
November 6, 2022 | |
November 6, 2022 | |
| 5,000 | | |
| 15,000 | | |
| 20.00 | | |
November 6, 2027 |
| |
| |
| |
| | | |
| | | |
| | | |
|
Eric J. Forman | |
May 22, 2019 | |
May 22, 2019 | |
| 1,667 | | |
| - | | |
| 66.00 | | |
May 22, 2024 |
| |
August 12, 2020 | |
August 12, 2020 | |
| 2,917 | | |
| 2,917 | | |
| 71.40 | | |
August 12, 2025 |
| |
November 6, 2022 | |
November 6, 2022 | |
| 5,000 | | |
| 15,000 | | |
| 20.00 | | |
November 6, 2027 |
There
was no intrinsic value of exercisable but unexercised in-the-money stock options held by our named executive officers at December 31,
2022, based on a fair market value of $0.51 per share on December 31, 2022.
Employment
Agreements; Compensation
During
July and August 2020, the Company entered into one-year employment agreements with its executive officers, consisting of Dr. John S.
Kovach, Eric J. Forman, Dr. James S. Miser, and Robert N. Weingarten, payable monthly, as described below. The employment agreements
are automatically renewable for additional one-year periods unless terminated by either party upon 60 days written notice prior to the
end of the applicable one-year period, or by death, or by termination for cause. These employment agreements were automatically renewed
for additional one-year periods in July and August 2021, 2022 and 2023.
Effective
September 26, 2023, the Company entered into a three-year employment agreement with Bas van der Baan, as described below. This employment
agreement is automatically renewable for additional one-year periods unless terminated by either party upon 60 days written notice prior
to the end of the applicable one-year period, or by death, disability or termination for cause.
Bas
van der Baan. Effective September 26, 2023, the Company entered into a three-year employment agreement with Bas van der Baan to act
as the Company’s President and Chief Executive Officer. Mr. van der Baan was also appointed as Vice Chairman of the Board of Directors.
His responsibilities include the oversight of the Company’s entire business operations and strategic planning, and he shall be
the principal spokesperson for the Company, and shall have final say on all corporate matters, subject only to the authority of the Board
of Directors. He will receive an annual salary of $150,000 to be paid monthly. His compensation may be adjusted from time-to-time in
the sole discretion of the Board of Directors. In addition, he shall be eligible to receive an annual bonus as determined in the sole
discretion of the Board of Directors. As of the effective date, Mr. van der Baan received a grant of stock options to purchase 250,000
shares of common stock at an exercise price of $1.95 per share. The options are exercisable for a five-year period and vest quarterly
over a three-year period commencing on the last day of each calendar quarter commencing October 1, 2023.
Dr.
John S. Kovach. On July 15, 2020, the Company entered into an employment agreement with Dr. John S. Kovach to continue to act as
the Company’s President, Chief Executive Officer and Chief Scientific Officer, with an annual salary of $250,000, payable monthly.
In conjunction with the Company’s management succession plan, effective September 26, 2023, Dr. Kovach was appointed to the position
of Executive Chairman in lieu of his previous positions of President and Chief Executive Officer and is continuing in his position as
Chief Scientific Officer with the same compensation as applicable to his prior positions. His responsibilities as Executive Chairman
include the oversight of the Company’s strategic direction in collaboration with the Company’s executive management and corporate
governance, and he will act as the primary contact between the Company’s executive team and the Board of Directors, to whom he
shall report. Dr. Kovach shall supervise all scientific endeavors, providing guidance to the Chief Medical Officer. His appointment shall
remain in effect until the earlier of (i) one year from the effective date, automatically renewable for additional one-year periods unless
terminated by either party upon 60 days written notice prior to the end of the applicable one-year period, (ii) his death, or (iii) termination
for cause.
Eric
Forman. On July 15, 2020, as amended on August 12, 2020, the Company entered into an employment agreement with Eric Forman, to act
as the Company’s Chief Administrative Officer reporting directly to the Company’s Chief Executive Officer, with an annual
salary of $120,000, payable monthly. Effective May 1, 2021, Mr. Forman’s annual salary was increased to $175,000. Effective November
6, 2022, Mr. Forman was promoted to Vice President and Chief Operating Officer with an annual salary of $200,000. Mr. Forman’s
primary function is to oversee the Company’s internal operations, including IT, licensing, legal, personnel, marketing, and corporate
governance. Mr. Forman was also granted stock options to acquire 5,833 shares of common stock. The effective date of the agreement was
October 1, 2020 and shall remain in effect until the earlier of (i) one year from the effective date, automatically renewable for additional
one-year periods unless terminated by either party upon 60 days written notice prior to the end of the applicable one-year period, (ii)
his death, or (iii) termination for cause.
Dr.
James Miser. On August 1, 2020, the Company entered into an employment agreement with Dr. James Miser, M.D., pursuant to which Dr.
Miser was appointed as the Company’s Chief Medical Officer, with an annual salary of $150,000. Effective May 1, 2021, Dr. Miser’s
annual salary was increased to $175,000. Under the employment agreement, Dr. Miser plays a leadership role in planning, implementation
and oversight of clinical trials. Dr. Miser is responsible for assisting and developing strategic clinical goals and the implementation
and safety monitoring of investigational studies. Dr. Miser is the primary medical monitor for all clinical investigational studies and
for the oversight of third party CRO monitors. Dr. Miser works closely with management on the development of specific goals needed to
ensure the timely implementation of appropriate clinical studies needed for successful registration of therapeutic products and new drug
development. Dr. Miser is required to devote at least 50% of his business time to the Company’s activities. Dr. Miser was also
granted stock options to acquire 8,333 shares of common stock. The effective date of the agreement was August 1, 2020. The agreement
shall remain in effect until the earlier of (i) one year from the effective date, automatically renewable for additional one-year periods
unless terminated by either party upon 60 days written notice prior to the end of the applicable one-year period, (ii) his death, or
(iii) termination for cause.
Robert
N. Weingarten. On August 12, 2020, the Company entered into an employment agreement with Robert N. Weingarten pursuant to which Mr.
Weingarten was appointed as the Company’s Vice-President and Chief Financial Officer, with an annual salary of $120,000. Mr. Weingarten’s
primary function is the oversight and responsibility for preparation of the Company’s financial statements and financial reporting,
oversight and management of finance activities, budgeting, risk management, and corporate governance. Effective May 1, 2021, Mr. Weingarten’s
annual salary was increased to $175,000. Mr. Weingarten was also granted stock options to acquire 5,833 shares of common stock. The effective
date of the agreement was August 12, 2020. The agreement shall remain in effect until the earlier of (i) one year from the effective
date, automatically renewable for additional one-year periods unless terminated by either party upon 60 days written notice prior to
the end of the applicable one-year period, (ii) his death, or (iii) termination for cause.
PAY
VERSUS PERFORMANCE
The
following information is presented about the relationship between executive compensation actually paid (“CAP”) and certain
financial performance of the Company as required by SEC rules. The Company’s executive compensation program is discussed above
at “Summary of Named Executive Officer Compensation.”
Year | |
Summary Compensation Table
Total for PEO (1) | | |
Compensation Actually Paid to PEO (2) | | |
Average Summary Compensation Table Total for Non-PEO NEO’s (3) | | |
Average Compensation Actually Paid to Non-PEO NEO’s (2) | | |
Value of Initial Fixed $100 Investment Based On Total Shareholder Return (4) | | |
Net Income (Loss) (5) | |
| |
| | |
| | |
| | |
| | |
| | |
| |
2022 | |
$ | 315,640 | | |
$ | 315,528 | | |
$ | 725,739 | | |
$ | 647,694 | | |
$ | 16.09 | | |
$ | (6,312,535 | ) |
2021 | |
$ | 250,000 | | |
$ | 250,000 | | |
$ | 480,001 | | |
$ | 238,677 | | |
$ | 37.54 | | |
$ | (6,728,396 | ) |
| (1) | The
amounts presented reflect the total compensation set forth in the Summary Compensation Table
(“SCT”) for the Company’s former CEO, John S. Kovach, who was the Company’s
PEO. |
| (2) | The
following table reflects the adjustments necessary, each of which is prescribed by SEC rule,
to calculate the Compensation Actually Paid (“CAP”) from those total amounts
reflected in the SCT. The SCT amounts and the CAP amounts do not reflect the actual amount
of compensation earned by or paid to the Company’s executives during the applicable
years, but rather are amounts determined in accordance with Item 402 of Regulation S-K under
the Exchange Act. To determine CAP, the adjustments below were made to the Company’s
executive officer’s total compensation. |
| |
2022 | | |
2021 | |
| |
PEO | | |
Other NEO’s | | |
PEO | | |
Other NEO’s | |
| |
| | |
| | |
| | |
| |
SCT Amounts | |
$ | 315,640 | | |
$ | 725,739 | | |
$ | 250,000 | | |
$ | 480,001 | |
Adjustments Related to Defined Benefit and Actuarial Plans: | |
| | | |
| | | |
| | | |
| | |
None (6) | |
| — | | |
| — | | |
| — | | |
| — | |
Adjustments Related to Stock-Based Compensation: | |
| | | |
| | | |
| | | |
| | |
Values reported in Stock Awards and Option Awards columns of the SCT | |
| (65,640 | ) | |
| (196,920 | ) | |
| — | | |
| — | |
Year-end fair value of awards granted during the year that are outstanding and unvested at the end of the year | |
| 49,118 | | |
| 147,353 | | |
| — | | |
| — | |
Decrease in fair value of awards granted in prior years that are outstanding and unvested at year-end | |
| — | | |
| (39,224 | ) | |
| — | | |
| (208,015 | ) |
Fair value of awards granted and vested during the year | |
| 16,410 | | |
| 49,230 | | |
| — | | |
| — | |
Decrease in fair value of awards granted in prior years that vested during the year | |
| — | | |
| (38,484 | ) | |
| — | | |
| (33,319 | ) |
Decrease in fair value of awards granted in prior years that failed to meet vesting conditions during the year | |
| — | | |
| — | | |
| — | | |
| — | |
Dividends and other earnings paid on awards before the vesting date | |
| — | | |
| — | | |
| — | | |
| — | |
CAP Amounts | |
$ | 315,528 | | |
$ | 647,694 | | |
$ | 250,000 | | |
$ | 238,677 | |
| (3) | The
amounts presented reflect the total compensation set forth in the SCT for the Company’s
Non-PEO NEOs, James S. Miser, Robert N. Weingarten and Eric J. Forman, during the periods
presented. |
| (4) | The
amounts presented reflect the value of a fixed investment of $100 on January 1st of the reporting
period (i.e., January 1, 2020) based upon the closing market price of the Company’s
common stock of $5.10, $11.90 and $31.70 at December 31, 2022, December 31, 2021 and December
31, 2020, respectively, as traded on The Nasdaq Capital Market. All amounts presented herein
have been retroactively adjusted to reflect the 1-for-10 reverse split of the Company’s
common stock effective June 2, 2023. |
| (5) | The
amounts presented reflect the net loss as reported in the Company’s audited financial
statements for the periods presented. |
| (6) | The
Company had no Defined Benefit or Actuarial Plans during the periods presented. |
Analysis
of Information Presented in the Pay Verses Performance Table
The
Company is providing the following descriptions of the relationships between information presented in the Pay Versus Performance table,
including CAP, as required by Item 402(v) of Regulation S-K under the Exchange Act.
The
Company is a pre-revenue drug discovery company that is engaged in research and development activities focused on utilizing biomarker
technology to identify enzyme targets associated with serious common diseases and to then design novel compounds to attack those targets.
Accordingly,
the Compensation Committee does not use TSR or net income (loss) in its compensation programs. However, the Compensation Committee does
utilize several other performance measures that it considers appropriate under the circumstances, including management of research programs
and clinical trials, development, management and protection of intellectual property assets, budget management, and capital raising efforts,
in order to align executive compensation with the Company’s research, business and performance objectives (see “Executive
Compensation”).
Compensation
actually paid to the Company’s PEO increased by $65,528 in 2022 as compared to 2021 due to a continuing focus on clinical trial
programs and development and protection of intellectual property. For 2022, the PEO was paid a salary of $250,000 in cash and was granted
stock options to acquire 20,000 shares of common stock. For 2021, the PEO was paid a salary of $250,000 in cash. No stock options were
granted to the Company’s PEO during 2021.
Average
compensation actually paid to the Company’s non-PEO NEOs increased by $359,787 in 2022 as compared to 2021 due to a continuing
focus on business activities related to clinical trial programs, development and protection of intellectual property, and capital raising
efforts. For 2022, the Company’s three non-PEO NEO’s were paid $528,819 in cash and were granted stock options to acquire
60,000 shares of common stock. No stock options were granted to the Company’s non-PEO NEO’s during 2021.
TSR
represents a cumulative loss in value of 83.19% for the two years ended December 31, 2022, and a loss in value of 62.46% for the year
ended December 31, 2021. Net loss decreased by $415,861 in 2022 as compared to 2021.
The
information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference
into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether
made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent
the Company specifically incorporates such information by reference.
COMPLIANCE
WITH SECTION 16(a)
OF
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors and executive officers and persons who
own more than 10% of a registered class of the Company’s equity securities to file various reports with the Securities and Exchange
Commission concerning their holdings of, and transactions in, securities of the Company. Copies of these filings must be furnished to
the Company.
To
the Company’s knowledge, based solely on its review of the copies of the Section 16(a) reports furnished to the Company and any
written representations to the Company that no other reports were required, the Company believes that all individual filing requirements
applicable to the Company’s directors and executive officers were complied with under Section 16(a) during the year ended December
31, 2021, except as follows: Eric Forman was late in filing one Form 4 in connection with the change of the trustee with respect to the
John and Barbara Kovach 2015 Trust.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
During
the years ended December 31, 2022, 2021 and 2020, there have been no transactions, whether directly or indirectly, between the Company
and any of its officers, directors or affiliates, including their family members, except as described herein or elsewhere in this document,
other than as disclosed below.
Dr.
John S. Kovach has been the Company’s President, Chief Executive Officer and Chief Scientific Officer since inception. Dr. Kovach
entered into an employment agreement with the Company effective October 1, 2020 that increased his annual salary from $60,000 to $250,000.
Dr. Kovach was paid $107,500 for the year ended December 31, 2020 for his services as the Company’s President, Chief Executive
Officer and Chief Scientific Officer.
Eric
J. Forman was appointed as the Company’s Chief Administrative Officer effective July 15, 2020. Mr. Forman was paid $30,000 from
July 15, 2022 through December 31, 2022 for his services as the Company’s Chief Administrative Officer. During the year ended December
31, 2020 (prior to Mr. Forman’s appointment as Chief Administrative Officer), the Company paid the Eric Forman Law Office a total
of $38,000 for legal and consulting services rendered with respect to various corporate and administrative matters.
Dr.
James S. Miser was appointed as the Company’s Chief Medical Officer effective August 1, 2020. Dr. Miser was paid $62,500 from August
1, 2020 through December 31, 2020 for his services as the Company’s Chief Medical Officer.
Robert
N. Weingarten was appointed as the Company’s Vice President and Chief Financial Officer effective August 12, 2020. Mr. Weingarten
was paid $46,451 from August 12, 2020 through December 31, 2020 for his services as the Company’s Vice President and Chief Financial
Officer. During the year ended December 31, 2020 (prior to Mr. Weingarten’s appointment as Vice President and Chief Financial Officer),
the Company paid Mr. Weingarten a total of $79,995 for accounting and financial consulting services rendered with respect to the preparation
of the Company’s consolidated financial statements and certain other financial and compliance matters.
Indemnification
Agreements
We
have entered into indemnification agreements with each of our directors and executive officers. These indemnification agreements provide
the directors and executive officers with contractual rights to indemnification and expense advancement that are, in some cases, broader
than the specific indemnification provisions contained under Delaware law.
Related
Person Transaction Policy
We
have adopted a related person transaction policy that sets forth our procedures for the identification, review, consideration and approval
or ratification of related person transactions. For purposes of our policy only, a related person transaction is a transaction, arrangement
or relationship, or any series of similar transactions, arrangements or relationships, in which we and any related person are, were or
will be participants in which the amount involved exceeds $120,000. Transactions involving compensation for services provided to us as
an employee or director are not covered by this policy. A related person is any executive officer, director or beneficial owner of more
than 5% of any class of our voting securities, including any of their immediate family members and any entity owned or controlled by
such persons.
Under
the policy, if a transaction has been identified as a related person transaction, including any transaction that was not a related person
transaction when originally consummated or any transaction that was not initially identified as a related person transaction prior to
consummation, our management must present information regarding the related person transaction to our audit committee, or, if audit committee
approval would be inappropriate, to another independent body of our Board of Directors, for review, consideration and approval or ratification.
The presentation must include a description of, among other things, the material facts, the interests, direct and indirect, of the related
persons, the benefits to us of the transaction and whether the transaction is on terms that are comparable to the terms available to
or from, as the case may be, an unrelated third party or to or from employees generally. Under the policy, we will collect information
that we deem reasonably necessary from each director, executive officer and, to the extent feasible, significant stockholder to enable
us to identify any existing or potential related-person transactions and to effectuate the terms of the policy. In addition, under our
code of business conduct and ethics, our employees and directors will have an affirmative responsibility to disclose any transaction
or relationship that reasonably could be expected to give rise to a conflict of interest. In considering related person transactions,
our audit committee, or other independent body of our Board of Directors, will take into account the relevant available facts and circumstances
including, but not limited to:
|
●
|
the risks, costs and benefits to us;
|
|
|
|
|
●
|
the
impact on a director’s independence in the event that the related person is a director, immediate family member of a director
or an entity with which a director is affiliated; |
|
|
|
|
●
|
the
availability of other sources for comparable services or products; and |
|
|
|
|
●
|
the
terms available to or from, as the case may be, unrelated third parties or to or from employees generally. |
The
policy requires that, in determining whether to approve, ratify or reject a related person transaction, our audit committee, or other
independent body of our Board of Directors, must consider, in light of known circumstances, whether the transaction is in, or is not
inconsistent with, our best interests and those of our stockholders, as our audit committee, or other independent body of our Board of
Directors, determines in the good faith exercise of its discretion.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
table set forth below presents certain information regarding beneficial ownership of our common stock (the only class of our voting equity
securities issued and outstanding) as of September 30, 2023 by (i) each person or entity who is known by us to own beneficially more
than 5% of our outstanding shares of common stock, (ii) each of our directors, and (iii) all of our directors and executive officers
as a group. As of September 30, 2023, there were 2,249,290 shares of our common stock issued and outstanding. In computing the number
and percentage of shares beneficially owned by a person, shares of common stock that a person has a right to acquire within sixty (60)
days of September 30, 2023 pursuant to stock options, warrants and convertible preferred stock are counted as outstanding, while these
shares are not counted as outstanding for computing the percentage ownership of any other person. This table is based upon information
supplied by our directors, officers and principal stockholders and reports filed with the Securities and Exchange Commission. Except
as noted, the Company’s executive office is reflected as the address of all officers, directors and other stockholders owning more
than 5%.
Name and Address of Beneficial Owner | |
Amount and Nature of Beneficial Ownership | | |
Percent of Class | |
| |
| | |
| |
Officers and Directors | |
| | | |
| | |
| |
| | | |
| | |
Dr. John S. Kovach | |
| | | |
| | |
680 East Colorado Boulevard, Suite 180 | |
| | | |
| | |
Pasadena, California 91101 | |
| 166,128 | (1) | |
| 7.3 | % |
| |
| | | |
| | |
Bas van der Baan | |
| | | |
| | |
Hogeweg 4-H | |
| | | |
| | |
Amsterdam P7 1098CB | |
| | | |
| | |
Netherlands | |
| 22,565 | (2) | |
| 1.0 | % |
| |
| | | |
| | |
Dr. Stephen J. Forman | |
| | | |
| | |
680 East Colorado Boulevard, Suite 180 | |
| | | |
| | |
Pasadena, California 91101 | |
| 32,919 | (3) | |
| 1.4 | % |
| |
| | | |
| | |
Dr. Yun Yen | |
| | | |
| | |
680 East Colorado Boulevard, Suite 180 | |
| | | |
| | |
Pasadena, California 91101 | |
| 37,193 | (12) | |
| 1.6 | % |
| |
| | | |
| | |
Dr. René Bernards | |
| | | |
| | |
Koningsvaren 37 | |
| | | |
| | |
Abcoude P7 1391AD | |
| | | |
| | |
Netherlands | |
| 15,000 | (6) | |
| 0.7 | % |
| |
| | | |
| | |
Regina Brown | |
| | | |
| | |
680 East Colorado Boulevard, Suite 180 | |
| | | |
| | |
Pasadena, California 91101 | |
| 43,130 | (11) | |
| 1.9 | % |
| |
| | | |
| | |
Robert N. Weingarten | |
| | | |
| | |
680 East Colorado Boulevard, Suite 180 | |
| | | |
| | |
Pasadena, California 91101 | |
| 15,833 | (7) | |
| 0.7 | % |
| |
| | | |
| | |
Eric J. Forman | |
| | | |
| | |
680 East Colorado Boulevard, Suite 180 | |
| | | |
| | |
Pasadena, California 91101 | |
| 25,997 | (5) | |
| 1.1 | % |
| |
| | | |
| | |
Dr. James S. Miser | |
| | | |
| | |
680 East Colorado Boulevard, Suite 180 | |
| | | |
| | |
Pasadena, California 91101 | |
| 18,333 | (9) | |
| 0.8 | % |
| |
| | | |
| | |
All officers and directors as a group (nine persons) | |
| 377,098 | | |
| 15.5 | % |
Other Stockholders Owning More Than 5% | |
| | | |
| | |
| |
| | | |
| | |
John and Barbara Kovach 2015 Trust | |
| | | |
| | |
Glenn L. Krinsky, Trustee | |
| | | |
| | |
680 East Colorado Boulevard, Suite 180 | |
| | | |
| | |
Pasadena, California 91101 | |
| 133,333 | (4) | |
| 5.9 | % |
| |
| | | |
| | |
Arthur and Jane Riggs 1990 Irrevocable Trust | |
| | | |
| | |
Jane Riggs, Trustee | |
| | | |
| | |
4852 Saint Andres Avenue | |
| | | |
| | |
La Verne, California 91750 | |
| 174,750 | (8) | |
| 7.5 | % |
| |
| | | |
| | |
Glenn L. Krinsky | |
| | | |
| | |
680 East Colorado Boulevard, Suite 180 | |
| | | |
| | |
Pasadena, California 91101 | |
| 147,499 | (10) | |
| 6.6 | % |
| |
| | | |
| | |
Julie Forman | |
| | | |
| | |
680 East Colorado Boulevard, Suite 180 | |
| | | |
| | |
Pasadena, California 91101 | |
| 114,603 | (13) | |
| 5.0 | % |
(1)
Includes 154,018 shares of common stock and stock warrants to purchase 2,110 shares of common stock owned of record by the John S. Kovach
Trust. Dr. Kovach is a co-trustee of the Trust and has the exclusive right to control the investment of the assets of the Trust. Also
includes stock options to purchase 10,000 shares of common stock owned by Dr. John S. Kovach.
(2)
Includes 1,000 shares of common stock and stock options to purchase 21,565 shares of common stock owned by Bas van der Baan. Excludes
stock options to purchase 250,000 shares of common stock issued effective September 26, 2023 in conjunction with the Company’s
appointment of Mr. van der Baan as President and Chief Executive Officer and as Vice Chairman of the Board of Directors (see “Employment
Agreements; Compensation”).
(3)
Includes 375 shares of common stock and stock options to purchase 23,334 shares of common stock owned by Dr. Stephen Forman. Also includes
7,105 shares of common stock and stock warrants to purchase 2,105 shares of common stock owned by the Stephen Forman Living Trust dated
12/16/98. Stephen Forman is trustee of the trust and holds voting and dispositive power over the common stock and common stock warrants
owned by the trust.
(4)
Includes 133,333 shares of common stock transferred by John S. Kovach and his wife, Barbara C.H. Kovach, as grantors, to the John and
Barbara Kovach 2015 Trust, an irrevocable trust dated July 6, 2015. The primary beneficiaries of the trust are the two adult daughters
of John and Barbara Kovach. Glen L. Krinsky is the trustee of the John and Barbara Kovach 2015 Trust.
(5)
Includes stock options to purchase 12,500 shares of common stock owned by Eric J. Forman. Eric Forman is the husband of Julie (Schwartzberg)
Forman, and the son-in-law of Gil and Debbie Schwartzberg.
Also
includes the following:
|
- |
7,971
shares of common stock and stock warrants to purchase 526 shares of common stock owned by the Eric Forman Revocable Trust. |
Excludes
the following, as to which Eric Forman disclaims beneficial ownership or control:
|
- |
31,842
shares of common stock and stock options to purchase 47,240 shares of common stock owned by the Julie Schwartzberg Trust, as to which
Julie (Schwartzberg) Forman is the trustee and beneficiary. |
|
- |
14,286
shares of common stock owned by the Schwartzberg Trust fbo Julie Forman, dtd 3/3/23, as to which Julie Forman is the trustee. |
|
- |
6,972
shares of common stock and common stock warrants to purchase 5,263 shares of common stock owned by the Julie Forman Inherited IRA.
|
|
- |
8,708
shares of common stock owned by the Julie Forman 2015 Trust, an irrevocable trust, the beneficiaries of which are the minor children
of Eric and Julie Forman, as to which Scott Forman, brother of Eric Forman, as trustee, has voting, dispositive and investment control. |
|
- |
9,000
shares of common stock owned by each of the Savannah Sterling Trust, Amanda Sterling Trust, Daniel Sterling Trust and Charles Sterling
Trust, as to which Julie Forman is the trustee. |
(6)
Consists of 15,000 shares of common stock.
(7)
Consists of stock options to purchase 15,833 shares of common stock.
(8)
Includes 101,833 shares of common stock and 72,917 shares of common stock issuable upon conversion of 350,000 shares of Series A Convertible
Preferred Stock owned by the Arthur and Jane Riggs 1990 Irrevocable Trust dated November 18, 1990. Jane Riggs is the trustee of the Arthur
and Jane Riggs 1990 Irrevocable Trust. The shares of Series A Convertible Preferred Stock were acquired on March 17, 2015 and January
15, 2016, are non-voting, and are immediately convertible into common stock.
(9)
Consists of stock options to purchase 18,333 shares of common stock.
(10)
Includes 14,166 shares of common stock owned by Glenn L. Krinsky. Also includes 133,333 shares of common stock owned by the John and
Barbara Kovach 2015 Trust, as to which Glenn L. Krinsky, as trustee, has voting, dispositive and investment control.
(11)
Includes 630 shares of common stock and stock options to purchase 42,500 shares of common stock.
(12)
Includes 5,263 shares of common stock, stock warrants to purchase 5,263 shares of common stock and stock options to purchase 26,667 shares
of common stock.
(13)
Includes 31,842 shares of common stock and stock options to purchase 47,240 shares of common stock owned by the Julie Schwartzberg Trust,
as to which Julie (Schwartzberg) Forman is the trustee and beneficiary.
Also
includes the following:
|
- |
6,972
shares of common stock and common stock warrants to purchase 5,263 shares of common stock owned by the Julie Forman Inherited IRA.
|
|
- |
9,000
shares of common stock owned by each of the Savannah Sterling Trust, Amanda Sterling Trust, Daniel Sterling Trust and Charles Sterling
Trust, as to which Julie Forman is the trustee. |
|
- |
14,286
shares of common stock owned by the Schwartzberg Trust fbo Julie Forman, dtd 3/3/23, as to which Julie Forman is the trustee. |
Excludes
the following, as to which Julie Forman disclaims beneficial ownership or control:
|
- |
Stock
options to purchase 12,500 shares of common stock owned by Eric J. Forman. |
|
- |
8,708
shares of common stock owned by the Julie Forman 2015 Trust, an irrevocable trust, the beneficiaries of which are the minor children
of Eric and Julie Forman, as to which Scott Forman, brother of Eric Forman, as trustee, has voting, dispositive and investment control. |
|
- |
7,971
shares of common stock and stock warrants to purchase 526 shares of common stock owned by the Eric Forman Revocable Trust. |
HOUSEHOLDING
OF PROXY MATERIALS
The
SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements
and other Annual Meeting materials with respect to two or more stockholder sharing the same address by delivering a proxy statement or
other Annual Meeting materials addressed to those stockholders.
This
process, which is commonly referred to as “householding”, potentially means extra convenience for stockholders and cost savings
for companies. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards.
If
you share an address with another stockholder and have received multiple copies of our proxy materials, you may write or call us at the
address and phone number below to request delivery of a single copy of the notice and, if applicable, other proxy materials in the future.
We undertake to deliver promptly upon written or oral request a separate copy of the proxy materials, as requested, to a stockholder
at a shared address to which a single copy of the proxy materials was delivered. If you hold stock as a record stockholder and would
prefer to receive separate copies of our proxy materials, either now or in the future, please notify your broker or the Company. Written
requests to the Company should be directed to Lixte Biotechnology Holdings, Inc., ATTN: Secretary, 680 East Colorado Boulevard, Suite
180, Pasadena, California 91101, or you may contact the Secretary of the Company at 631-830-7092. If your stock is held through a brokerage
firm or bank and you prefer to receive separate copies of our proxy materials either now or in the future, please contact your brokerage
firm or bank.
OTHER
BUSINESS
As
of the date of this Proxy Statement, the management of the Company has no knowledge of any business that may be presented for consideration
at the Annual Meeting, other than that described above. As to other business, if any, that may properly come before the Annual Meeting,
or any adjournment thereof, it is intended that the Proxy hereby solicited will be voted in respect of such business in accordance with
the judgment of the Proxy holders.
BY
ORDER OF THE BOARD OF DIRECTORS
/s/
John S. Kovach
Executive
Chairman
October
13, 2023
Annex
A
LIXTE
BIOTECHNOLOGY HOLDINGS, INC.
2020 STOCK INCENTIVE PLAN (as amended)
1.
Purpose.
The
purpose of the Plan is to assist the Company in attracting, retaining, motivating, and rewarding certain employees, officers, directors,
and consultants of the Company and its Affiliates and promoting the creation of long-term value for stockholders of the Company by closely
aligning the interests of such individuals with those of such stockholders. The Plan authorizes the award of Stock-based and cash-based
incentives to Eligible Persons to encourage such Eligible Persons to expend maximum effort in the creation of stockholder value.
2.
Definitions.
For
purposes of the Plan, the following terms shall be defined as set forth below:
(a)
“Affiliate” means, with respect to a Person, any other Person that, directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such Person.
(b)
“Award” means any Option, award of Restricted Stock, Restricted Stock Unit, Stock Appreciation Right, or other Stock-based
award granted under the Plan.
(c)
“Award Agreement” means an Option Agreement, a Restricted Stock Agreement, an RSU Agreement, a SAR Agreement, or an
agreement governing the grant of any other Stock-based Award granted under the Plan.
(d)
“Board” means the Board of Directors of the Company.
(e)
“Cause” means, with respect to a Participant and in the absence of an Award Agreement or Participant Agreement otherwise
defining Cause, (1) the Participant’s plea of nolo contendere to, conviction of or indictment for, any crime (whether or
not involving the Company or its Affiliates) (i) constituting a felony or (ii) that has, or could reasonably be expected to result in,
an adverse impact on the performance of the Participant’s duties to the Service Recipient, or otherwise has, or could reasonably
be expected to result in, an adverse impact on the business or reputation of the Company or its Affiliates, (2) conduct of the Participant,
in connection with his or her employment or service, that has resulted, or could reasonably be expected to result, in injury to the business
or reputation of the Company or its Affiliates, (3) any material violation of the policies of the Service Recipient, including, but not
limited to, those relating to sexual harassment or the disclosure or misuse of confidential information, or those set forth in the manuals
or statements of policy of the Service Recipient; (4) the Participant’s act(s) of negligence or willful misconduct in the course
of his or her employment or service with the Service Recipient; (5) misappropriation by the Participant of any assets or business opportunities
of the Company or its Affiliates; (6) embezzlement or fraud committed by the Participant, at the Participant’s direction, or with
the Participant’s prior actual knowledge; or (7) willful neglect in the performance of the Participant’s duties for the Service
Recipient or willful or repeated failure or refusal to perform such duties. If, subsequent to the Termination of a Participant for any
reason other than by the Service Recipient for Cause, it is discovered that the Participant’s employment or service could have
been terminated for Cause, such Participant’s employment or service shall, at the discretion of the Committee, be deemed to have
been terminated by the Service Recipient for Cause for all purposes under the Plan, and the Participant shall be required to repay to
the Company all amounts received by him or her in respect of any Award following such Termination that would have been forfeited under
the Plan had such Termination been by the Service Recipient for Cause. In the event that there is an Award Agreement or Participant Agreement
defining Cause, “Cause” shall have the meaning provided in such agreement, and a Termination by the Service Recipient
for Cause hereunder shall not be deemed to have occurred unless all applicable notice and cure periods in such Award Agreement or Participant
Agreement are complied with.
(f)
“Change in Control” means:
(1)
a change in ownership or control of the Company effected through a transaction or series of transactions (other than an offering of Stock
to the general public through a registration statement filed with the U.S. Securities and Exchange Commission or similar non-U.S. regulatory
agency or pursuant to a Non-Control Transaction) whereby any “person” (as defined in Section 3(a)(9) of the Exchange Act)
or any two or more persons deemed to be one “person” (as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), other
than the Company or any of its Affiliates, an employee benefit plan sponsored or maintained by the Company or any of its Affiliates (or
its related trust), or any underwriter temporarily holding securities pursuant to an offering of such securities, directly or indirectly
acquire “beneficial ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing
more than fifty percent (50%) of the total combined voting power of the Company’s securities eligible to vote in the election of
the Board (the “Company Voting Securities”);
(2)
the date, within any consecutive twenty-four (24) month period commencing on or after the Effective Date, upon which individuals who
constitute the Board as of the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least
a majority of the Board; provided, however, that any individual who becomes a director subsequent to the Effective Date whose
election or nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the directors
then constituting the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such individual
is named as a nominee for director, without objection to such nomination) shall be considered as though such individual were a member
of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of
an actual or threatened election contest (including, but not limited to, a consent solicitation) with respect to the election or removal
of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board; or
(3)
the consummation of a merger, consolidation, share exchange, or similar form of corporate transaction involving the Company or any of
its Affiliates that requires the approval of the Company’s stockholders (whether for such transaction, the issuance of securities
in the transaction or otherwise) (a “Reorganization”), unless immediately following such Reorganization (i) more than
fifty percent (50%) of the total voting power of (A) the corporation resulting from such Reorganization (the “Surviving Company”)
or (B) if applicable, the ultimate parent corporation that has, directly or indirectly, beneficial ownership of one hundred percent (100%)
of the voting securities of the Surviving Company (the “Parent Company”), is represented by Company Voting Securities
that were outstanding immediately prior to such Reorganization (or, if applicable, is represented by shares into which such Company Voting
Securities were converted pursuant to such Reorganization), and such voting power among the holders thereof is in substantially the same
proportion as the voting power of such Company Voting Securities among holders thereof immediately prior to such Reorganization, (ii)
no person, other than an employee benefit plan sponsored or maintained by the Surviving Company or the Parent Company (or its related
trust), is or becomes the beneficial owner, directly or indirectly, of fifty percent (50%) or more of the total voting power of the outstanding
voting securities eligible to elect directors of the Parent Company, or if there is no Parent Company, the Surviving Company, and (iii)
at least a majority of the members of the board of directors of the Parent Company, or if there is no Parent Company, the Surviving Company,
following the consummation of such Reorganization are members of the Incumbent Board at the time of the Board’s approval of the
execution of the initial agreement providing for such Reorganization (any Reorganization which satisfies all of the criteria specified
in clauses (i), (ii), and (iii) above shall be a “Non-Control Transaction”); or
(4)
the sale or disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to any
“person” (as defined in Section 3(a)(9) of the Exchange Act) or to any two or more persons deemed to be one “person”
(as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than the Company’s Affiliates.
Notwithstanding
the foregoing, (x) a Change in Control shall not be deemed to occur solely because any person acquires beneficial ownership of fifty
percent (50%) or more of the Company Voting Securities as a result of an acquisition of Company Voting Securities by the Company that
reduces the number of Company Voting Securities outstanding; provided that if after such acquisition by the Company such person
becomes the beneficial owner of additional Company Voting Securities that increases the percentage of outstanding Company Voting Securities
beneficially owned by such person, a Change in Control shall then be deemed to occur, and (y) with respect to the payment of any amount
that constitutes a deferral of compensation subject to Section 409A of the Code payable upon a Change in Control, a Change in Control
shall not be deemed to have occurred, unless the Change in Control constitutes a change in the ownership or effective control of the
Company or in the ownership of a substantial portion of the assets of the Company under Section 409A(a)(2)(A)(v) of the Code.
(g)
“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time, including the rules and regulations
thereunder and any successor provisions, rules and regulations thereto.
(h)
“Committee” means the Board, the Compensation Committee of the Board or such other committee consisting of two or
more individuals appointed by the Board to administer the Plan and each other individual or committee of individuals designated to exercise
authority under the Plan.
(i)
“Company” means Lixte Biotechnology Holdings, Inc., a Delaware corporation.
(j)
“Corporate Event” has the meaning set forth in Section 10(b) hereof.
(k)
“Data” has the meaning set forth in Section 20(f) hereof.
(l)
“Disability” means, in the absence of an Award Agreement or Participant Agreement otherwise defining Disability, the
permanent and total disability of such Participant within the meaning of Section 22(e)(3) of the Code. In the event that there is an
Award Agreement or Participant Agreement defining Disability, “Disability” shall have the meaning provided in such
Award Agreement or Participant Agreement.
(m)
“Disqualifying Disposition” means any disposition (including any sale) of Stock acquired upon the exercise of an Incentive
Stock Option made within the period that ends either (1) two years after the date on which the Participant was granted the Incentive
Stock Option or (2) one year after the date upon which the Participant acquired the Stock.
(n)
“Effective Date” means July 14, 2020, which is the date on which the Plan was adopted by the Board.
(o)
“Eligible Person” means (1) each employee and officer of the Company or any of its Affiliates, (2) each non-employee
director of the Company or any of its Affiliates; (3) each other natural Person who provides substantial services to the Company or any
of its Affiliates as a consultant or advisor (or a wholly owned alter ego entity of the natural Person providing such services of which
such Person is an employee, stockholder or partner) and who is designated as eligible by the Committee, and (4) each natural Person who
has been offered employment by the Company or any of its Affiliates; provided that such prospective employee may not receive any
payment or exercise any right relating to an Award until such Person has commenced employment or service with the Company or its Affiliates;
provided further, however, that (i) with respect to any Award that is intended to qualify as a “stock right” that
does not provide for a “deferral of compensation” within the meaning of Section 409A of the Code, the term “Affiliate”
as used in this Section 2(o) shall include only those corporations or other entities in the unbroken chain of corporations or other entities
beginning with the Company where each of the corporations or other entities in the unbroken chain other than the last corporation or
other entity owns stock possessing at least fifty percent (50%) or more of the total combined voting power of all classes of stock in
one of the other corporations or other entities in the chain, and (ii) with respect to any Award that is intended to be an Incentive
Stock Option, the term “Affiliate” as used in this Section 2(o) shall include only those entities that qualify as a “subsidiary
corporation” with respect to the Company within the meaning of Section 424(f) of the Code. An employee on an approved leave of
absence may be considered as still in the employ of the Company or any of its Affiliates for purposes of eligibility for participation
in the Plan.
(p)
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended from time to time, including the rules and
regulations thereunder and any successor provisions, rules and regulations thereto.
(q)
“Expiration Date” means, with respect to an Option or Stock Appreciation Right, the date on which the term of such
Option or Stock Appreciation Right expires, as determined under Sections 5(b) or 8(b) hereof, as applicable.
(r)
“Fair Market Value” means, as of any date when the Stock is listed on one or more national securities exchanges, the
closing price reported on the principal national securities exchange on which such Stock is listed and traded on the date of determination
or, if the closing price is not reported on such date of determination, the closing price reported on the most recent date prior to the
date of determination. If the Stock is not listed on a national securities exchange, “Fair Market Value” shall mean
the amount determined by the Board in good faith, and in a manner consistent with Section 409A of the Code, to be the fair market value
per share of Stock.
(s)
“GAAP” means the U.S. Generally Accepted Accounting Principles, as in effect from time to time.
(t)
“Incentive Stock Option” means an Option intended to qualify as an “incentive stock option” within the
meaning of Section 422 of the Code.
(u)
“Nonqualified Stock Option” means an Option not intended to be an Incentive Stock Option.
(v)
“Option” means a conditional right, granted to a Participant under Section 5 hereof, to purchase Stock at a specified
price during a specified time period.
(w)
“Option Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions
of an individual Option Award.
(x)
“Participant” means an Eligible Person who has been granted an Award under the Plan or, if applicable, such other
Person who holds an Award.
(y)
“Participant Agreement” means an employment or other services agreement between a Participant and the Service Recipient
that describes the terms and conditions of such Participant’s employment or service with the Service Recipient and is effective
as of the date of determination.
(z)
“Person” means any individual, corporation, partnership, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, or other entity.
(aa)
“Plan” means this Lixte Biotechnology Holdings, Inc. 2020 Stock Incentive Plan, as amended from time to time.
(bb)
“Qualified Member” means a member of the Committee who is a “Non-Employee Director” within the meaning
of Rule 16b-3 under the Exchange Act and an “independent director” as defined under, as applicable, the NASDAQ Listing Rules,
the NYSE Listed Company Manual or other applicable stock exchange rules.
(cc)
“Qualifying Committee” has the meaning set forth in Section 3(b) hereof.
(dd)
“Restricted Stock” means Stock granted to a Participant under Section 6 hereof that is subject to certain restrictions
and to a risk of forfeiture.
(ee)
“Restricted Stock Agreement” means a written agreement between the Company and a Participant evidencing the terms
and conditions of an individual Restricted Stock Award.
(ff)
“Restricted Stock Unit” means a notional unit representing the right to receive one share of Stock (or the cash value
of one share of Stock, if so determined by the Committee) on a specified settlement date.
(gg)
“RSU Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions
of an individual Award of Restricted Stock Units.
(hh)
“SAR Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions
of an individual Award of Stock Appreciation Rights.
(ii)
“Securities Act” means the U.S. Securities Act of 1933, as amended from time to time, including the rules and regulations
thereunder and any successor provisions, rules and regulations thereto.
(jj)
“Service Recipient” means, with respect to a Participant holding an Award, either the Company or an Affiliate of the
Company by which the original recipient of such Award is, or following a Termination was most recently, principally employed or to which
such original recipient provides, or following a Termination was most recently providing, services, as applicable.
(kk)
“Stock” means Common Stock, par value $0.0001 per share, of the Company, and such other securities as may be substituted
for such stock pursuant to Section 10 hereof.
(ll)
“Stock Appreciation Right” means a conditional right to receive an amount equal to the value of the appreciation in
the Stock over a specified period. Except in the event of extraordinary circumstances, as determined in the sole discretion of the Committee,
or pursuant to Section 10(b) hereof, Stock Appreciation Rights shall be settled in Stock.
(mm)
“Substitute Award” has the meaning set forth in Section 4(a) hereof.
(nn)
“Termination” means the termination of a Participant’s employment or service, as applicable, with the Service
Recipient; provided, however, that, if so determined by the Committee at the time of any change in status in relation to the Service
Recipient (e.g., a Participant ceases to be an employee and begins providing services as a consultant, or vice versa), such change
in status will not be deemed a Termination hereunder. Unless otherwise determined by the Committee, in the event that the Service Recipient
ceases to be an Affiliate of the Company (by reason of sale, divestiture, spin-off, or other similar transaction), unless a Participant’s
employment or service is transferred to another entity that would constitute the Service Recipient immediately following such transaction,
such Participant shall be deemed to have suffered a Termination hereunder as of the date of the consummation of such transaction. Notwithstanding
anything herein to the contrary, a Participant’s change in status in relation to the Service Recipient (for example, a change from
employee to consultant) shall not be deemed a Termination hereunder with respect to any Awards constituting “nonqualified deferred
compensation” subject to Section 409A of the Code that are payable upon a Termination unless such change in status constitutes
a “separation from service” within the meaning of Section 409A of the Code. Any payments in respect of an Award constituting
nonqualified deferred compensation subject to Section 409A of the Code that are payable upon a Termination shall be delayed for such
period as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code. On the first business day following the
expiration of such period, the Participant shall be paid, in a single lump sum without interest, an amount equal to the aggregate amount
of all payments delayed pursuant to the preceding sentence, and any remaining payments not so delayed shall continue to be paid pursuant
to the payment schedule applicable to such Award.
3.
Administration.
(a)
Authority of the Committee. Except as otherwise provided below, the Plan shall be administered by the Committee. The Committee
shall have full and final authority, in each case subject to and consistent with the provisions of the Plan, to (1) select Eligible Persons
to become Participants, (2) grant Awards, (3) determine the type, number and type of shares of Stock subject to, other terms and conditions
of, and all other matters relating to, Awards, (4) prescribe Award Agreements (which need not be identical for each Participant) and
rules and regulations for the administration of the Plan, (5) construe and interpret the Plan and Award Agreements and correct defects,
supply omissions, and reconcile inconsistencies therein, (6) suspend the right to exercise Awards during any period that the Committee
deems appropriate to comply with applicable securities laws, and thereafter extend the exercise period of an Award by an equivalent period
of time or such shorter period required by, or necessary to comply with, applicable law, and (7) make all other decisions and determinations
as the Committee may deem necessary or advisable for the administration of the Plan. Any action of the Committee shall be final, conclusive,
and binding on all Persons, including, without limitation, the Company, its stockholders and Affiliates, Eligible Persons, Participants,
and beneficiaries of Participants. Notwithstanding anything in the Plan to the contrary, the Committee shall have the ability to accelerate
the vesting of any outstanding Award at any time and for any reason, including upon a Corporate Event, subject to Section 10(d), or in
the event of a Participant’s Termination by the Service Recipient other than for Cause, or due to the Participant’s death,
Disability or retirement (as such term may be defined in an applicable Award Agreement or Participant Agreement, or, if no such definition
exists, in accordance with the Company’s then-current employment policies and guidelines). For the avoidance of doubt, the Board
shall have the authority to take all actions under the Plan that the Committee is permitted to take.
(b)
Manner of Exercise of Committee Authority. At any time that a member of the Committee is not a Qualified Member, any action
of the Committee relating to an Award granted or to be granted to a Participant who is then subject to Section 16 of the Exchange Act
in respect of the Company, must be taken by the remaining members of the Committee or a subcommittee, designated by the Committee or
the Board, composed solely of two or more Qualified Members (a “Qualifying Committee”). Any action authorized by such
a Qualifying Committee shall be deemed the action of the Committee for purposes of the Plan. The express grant of any specific power
to a Qualifying Committee, and the taking of any action by such a Qualifying Committee, shall not be construed as limiting any power
or authority of the Committee.
(c)
Delegation. To the extent permitted by applicable law, the Committee may delegate to officers or employees of the Company or any
of its Affiliates, or committees thereof, the authority, subject to such terms as the Committee shall determine, to perform such functions
under the Plan, including, but not limited to, administrative functions, as the Committee may determine appropriate. The Committee may
appoint agents to assist it in administering the Plan. Any actions taken by an officer or employee delegated authority pursuant to this
Section 3(c) within the scope of such delegation shall, for all purposes under the Plan, be deemed to be an action taken by the Committee.
Notwithstanding the foregoing or any other provision of the Plan to the contrary, any Award granted under the Plan to any Eligible Person
who is not an employee of the Company or any of its Affiliates (including any non-employee director of the Company or any Affiliate)
or to any Eligible Person who is subject to Section 16 of the Exchange Act must be expressly approved by the Committee or Qualifying
Committee in accordance with Section 3(b) above.
(d)
Sections 409A and 457A. The Committee shall take into account compliance with Sections 409A and 457A of the Code in connection
with any grant of an Award under the Plan, to the extent applicable. While the Awards granted hereunder are intended to be structured
in a manner to avoid the imposition of any penalty taxes under Sections 409A and 457A of the Code, in no event whatsoever shall the Company
or any of its Affiliates be liable for any additional tax, interest, or penalties that may be imposed on a Participant as a result of
Section 409A or Section 457A of the Code or any damages for failing to comply with Section 409A or Section 457A of the Code or any similar
state or local laws (other than for withholding obligations or other obligations applicable to employers, if any, under Section 409A
or Section 457A of the Code).
4.
Shares Available Under the Plan; Other Limitations.
(a)
Number of Shares Available for Delivery. Subject to adjustment as provided in Section 10 hereof, the total number of shares of
Stock reserved and available for delivery in connection with Awards under the Plan shall equal 413,333. Shares of Stock delivered under
the Plan shall consist of authorized and unissued shares or previously issued shares of Stock reacquired by the Company on the open market
or by private purchase. Notwithstanding the foregoing, (i) except as may be required by reason of Section 422 of the Code, the number
of shares of Stock available for issuance hereunder shall not be reduced by shares issued pursuant to Awards issued or assumed in connection
with a merger or acquisition as contemplated by, as applicable, NYSE Listed Company Manual Section 303A.08, NASDAQ Listing Rule 5635(c)
and IM-5635-1, AMEX Company Guide Section 711, or other applicable stock exchange rules, and their respective successor rules and listing
exchange promulgations (each such Award, a “Substitute Award”); and (ii) shares of Stock shall not be deemed to have
been issued pursuant to the Plan with respect to any portion of an Award that is settled in cash.
(b)
Share Counting Rules. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double-counting
(as, for example, in the case of tandem awards or Substitute Awards) and make adjustments if the number of shares of Stock actually delivered
differs from the number of shares previously counted in connection with an Award. Other than with respect to a Substitute Award, to the
extent that an Award expires or is canceled, forfeited, settled in cash, or otherwise terminated without delivery to the Participant
of the full number of shares of Stock to which the Award related, the undelivered shares of Stock will again be available for grant.
Shares of Stock withheld in payment of the exercise price or taxes relating to an Award and shares of Stock equal to the number surrendered
in payment of any exercise price or taxes relating to an Award shall not be deemed to constitute shares delivered to the Participant
and shall be deemed to again be available for delivery under the Plan.
(c)
Incentive Stock Options. No more than 413,333 shares of Stock (subject to adjustment as provided in Section 10 hereof) reserved
for issuance hereunder may be issued or transferred upon exercise or settlement of Incentive Stock Options.
(d)
Shares Available Under Acquired Plans. To the extent permitted by NYSE Listed Company Manual Section 303A.08, NASDAQ Listing Rule
5635(c) or other applicable stock exchange rules, subject to applicable law, in the event that a company acquired by the Company or with
which the Company combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of
such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the
extent appropriate, using the exchange ratio or other adjustment or valuation ratio of formula used in such acquisition or combination
to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be
used for Awards under the Plan and shall not reduce the number of shares of Stock reserved and available for delivery in connection with
Awards under the Plan; provided that Awards using such available shares shall not be made after the date awards could have been
made under the terms of such pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were
not employed by the Company or any subsidiary of the Company immediately prior to such acquisition or combination.
5.
Options.
(a)
General. Certain Options granted under the Plan may be intended to be Incentive Stock Options; however, no Incentive Stock Options
may be granted hereunder following the tenth (10th) anniversary of the earlier of (i) the date the Plan is adopted by the Board and (ii)
the date the stockholders of the Company approve the Plan. Options may be granted to Eligible Persons in such form and having such terms
and conditions as the Committee shall deem appropriate; provided, however, that Incentive Stock Options may be granted
only to Eligible Persons who are employees of the Company or an Affiliate (as such definition is limited pursuant to Section 2(o) hereof)
of the Company. The provisions of separate Options shall be set forth in separate Option Agreements, which agreements need not be identical.
No dividends or dividend equivalents shall be paid on Options.
(b)
Term. The term of each Option shall be set by the Committee at the time of grant; provided, however, that no Option granted
hereunder shall be exercisable after, and each Option shall expire, ten (10) years from the date it was granted.
(c)
Exercise Price. The exercise price per share of Stock for each Option shall be set by the Committee at the time of grant and shall
not be less than the Fair Market Value on the date of grant, subject to Section 5(g) hereof in the case of any Incentive Stock Option.
Notwithstanding the foregoing, in the case of an Option that is a Substitute Award, the exercise price per share of Stock for such Option
may be less than the Fair Market Value on the date of grant; provided, that such exercise price is determined in a manner consistent
with the provisions of Section 409A of the Code and, if applicable, Section 424(a) of the Code.
(d)
Payment for Stock. Payment for shares of Stock acquired pursuant to an Option granted hereunder shall be made in full upon exercise
of the Option in a manner approved by the Committee, which may include any of the following payment methods: (1) in immediately available
funds in U.S. dollars, or by certified or bank cashier’s check, (2) by delivery of shares of Stock having a value equal to the
exercise price, (3) by a broker-assisted cashless exercise in accordance with procedures approved by the Committee, whereby payment of
the Option exercise price or tax withholding obligations may be satisfied, in whole or in part, with shares of Stock subject to the Option
by delivery of an irrevocable direction to a securities broker (on a form prescribed by the Committee) to sell shares of Stock and to
deliver all or part of the sale proceeds to the Company in payment of the aggregate exercise price and, if applicable, the amount necessary
to satisfy the Company’s withholding obligations, or (4) by any other means approved by the Committee (including, by delivery of
a notice of “net exercise” to the Company, pursuant to which the Participant shall receive the number of shares of Stock
underlying the Option so exercised reduced by the number of shares of Stock equal to the aggregate exercise price of the Option divided
by the Fair Market Value on the date of exercise). Notwithstanding anything herein to the contrary, if the Committee determines that
any form of payment available hereunder would be in violation of Section 402 of the Sarbanes-Oxley Act of 2002, such form of payment
shall not be available.
(e)
Vesting. Options shall vest and become exercisable in such manner, on such date or dates, or upon the achievement of performance
or other conditions, in each case as may be determined by the Committee and set forth in an Option Agreement; provided, however,
that notwithstanding any such vesting dates, the Committee may in its sole discretion accelerate the vesting of any Option at any time
and for any reason. Unless otherwise specifically determined by the Committee, the vesting of an Option shall occur only while the Participant
is employed by or rendering services to the Service Recipient, and all vesting shall cease upon a Participant’s Termination for
any reason. To the extent permitted by applicable law and unless otherwise determined by the Committee, vesting shall be suspended during
the period of any approved unpaid leave of absence by a Participant following which the Participant has a right to reinstatement and
shall resume upon such Participant’s return to active employment. If an Option is exercisable in installments, such installments
or portions thereof that become exercisable shall remain exercisable until the Option expires, is canceled or otherwise terminates.
(f)
Termination of Employment or Service. Except as provided by the Committee in an Option Agreement, Participant Agreement or otherwise:
(1)
In the event of a Participant’s Termination prior to the applicable Expiration Date for any reason other than (i) by the Service
Recipient for Cause, or (ii) by reason of the Participant’s death or Disability, (A) all vesting with respect to such Participant’s
Options outstanding shall cease, (B) all of such Participant’s unvested Options outstanding shall terminate and be forfeited for
no consideration as of the date of such Termination, and (C) all of such Participant’s vested Options outstanding shall terminate
and be forfeited for no consideration on the earlier of (x) the applicable Expiration Date and (y) the date that is ninety (90) days
after the date of such Termination.
(2)
In the event of a Participant’s Termination prior to the applicable Expiration Date by reason of such Participant’s death
or Disability, (i) all vesting with respect to such Participant’s Options outstanding shall cease, (ii) all of such Participant’s
unvested Options outstanding shall terminate and be forfeited for no consideration as of the date of such Termination, and (iii) all
of such Participant’s vested Options outstanding shall terminate and be forfeited for no consideration on the earlier of (x) the
applicable Expiration Date and (y) the date that is twelve (12) months after the date of such Termination.
(3)
In the event of a Participant’s Termination prior to the applicable Expiration Date by the Service Recipient for Cause, all of
such Participant’s Options outstanding (whether or not vested) shall immediately terminate and be forfeited for no consideration
as of the date of such Termination.
(g)
Special Provisions Applicable to Incentive Stock Options.
(1)
No Incentive Stock Option may be granted to any Eligible Person who, at the time the Option is granted, owns directly, or indirectly
within the meaning of Section 424(d) of the Code, stock possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or of any parent or subsidiary thereof, unless such Incentive Stock Option (i) has an exercise price
of at least one hundred ten percent (110%) of the Fair Market Value on the date of the grant of such Option and (ii) cannot be exercised
more than five (5) years after the date it is granted.
(2)
To the extent that the aggregate Fair Market Value (determined as of the date of grant) of Stock for which Incentive Stock Options are
exercisable for the first time by any Participant during any calendar year (under all plans of the Company and its Affiliates) exceeds
$100,000, such excess Incentive Stock Options shall be treated as Nonqualified Stock Options.
(3)
Each Participant who receives an Incentive Stock Option must agree to notify the Company in writing immediately after the Participant
makes a Disqualifying Disposition of any Stock acquired pursuant to the exercise of an Incentive Stock Option.
6.
Restricted Stock.
(a)
General. Restricted Stock may be granted to Eligible Persons in such form and having such terms and conditions as the Committee
shall deem appropriate. The provisions of separate Awards of Restricted Stock shall be set forth in separate Restricted Stock Agreements,
which agreements need not be identical. Subject to the restrictions set forth in Section 6(b) hereof, and except as otherwise set forth
in the applicable Restricted Stock Agreement, the Participant shall generally have the rights and privileges of a stockholder as to such
Restricted Stock, including the right to vote such Restricted Stock. Unless otherwise set forth in a Participant’s Restricted Stock
Agreement, cash dividends and stock dividends, if any, with respect to the Restricted Stock shall be withheld by the Company for the
Participant’s account, and shall be subject to forfeiture to the same degree as the shares of Restricted Stock to which such dividends
relate. Except as otherwise determined by the Committee, no interest will accrue or be paid on the amount of any cash dividends withheld.
(b)
Vesting and Restrictions on Transfer. Restricted Stock shall vest in such manner, on such date or dates, or upon the achievement
of performance or other conditions, in each case as may be determined by the Committee and set forth in a Restricted Stock Agreement;
provided, however, that notwithstanding any such vesting dates, the Committee may in its sole discretion accelerate the vesting
of any Award of Restricted Stock at any time and for any reason. Unless otherwise specifically determined by the Committee, the vesting
of an Award of Restricted Stock shall occur only while the Participant is employed by or rendering services to the Service Recipient,
and all vesting shall cease upon a Participant’s Termination for any reason. To the extent permitted by applicable law and unless
otherwise determined by the Committee, vesting shall be suspended during the period of any approved unpaid leave of absence by a Participant
following which the Participant has a right to reinstatement and shall resume upon such Participant’s return to active employment.
In addition to any other restrictions set forth in a Participant’s Restricted Stock Agreement, the Participant shall not be permitted
to sell, transfer, pledge, or otherwise encumber the Restricted Stock prior to the time the Restricted Stock has vested pursuant to the
terms of the Restricted Stock Agreement.
(c)
Termination of Employment or Service. Except as provided by the Committee in a Restricted Stock Agreement, Participant Agreement
or otherwise, in the event of a Participant’s Termination for any reason prior to the time that such Participant’s Restricted
Stock has vested, (1) all vesting with respect to such Participant’s Restricted Stock outstanding shall cease, and (2) as soon
as practicable following such Termination, the Company shall repurchase from the Participant, and the Participant shall sell, all of
such Participant’s unvested shares of Restricted Stock at a purchase price equal to the original purchase price paid for the Restricted
Stock; provided that, if the original purchase price paid for the Restricted Stock is equal to zero dollars ($0), such unvested
shares of Restricted Stock shall be forfeited to the Company by the Participant for no consideration as of the date of such Termination.
7.
Restricted Stock Units.
(a)
General. Restricted Stock Units may be granted to Eligible Persons in such form and having such terms and conditions as the Committee
shall deem appropriate. The provisions of separate Restricted Stock Units shall be set forth in separate RSU Agreements, which agreements
need not be identical.
(b)
Vesting. Restricted Stock Units shall vest in such manner, on such date or dates, or upon the achievement of performance or other
conditions, in each case as may be determined by the Committee and set forth in an RSU Agreement; provided, however, that
notwithstanding any such vesting dates, the Committee may in its sole discretion accelerate the vesting of any Restricted Stock Unit
at any time and for any reason. Unless otherwise specifically determined by the Committee, the vesting of a Restricted Stock Unit shall
occur only while the Participant is employed by or rendering services to the Service Recipient, and all vesting shall cease upon a Participant’s
Termination for any reason. To the extent permitted by applicable law and unless otherwise determined by the Committee, vesting shall
be suspended during the period of any approved unpaid leave of absence by a Participant following which the Participant has a right to
reinstatement and shall resume upon such Participant’s return to active employment.
(c)
Settlement. Restricted Stock Units shall be settled in Stock, cash, or property, as determined by the Committee, in its sole discretion,
on the date or dates determined by the Committee and set forth in an RSU Agreement. Unless otherwise set forth in a Participant’s
RSU Agreement, a Participant shall not be entitled to dividends, if any, or dividend equivalents with respect to Restricted Stock Units
prior to settlement.
(d)
Termination of Employment or Service. Except as provided by the Committee in an RSU Agreement, Participant Agreement or otherwise,
in the event of a Participant’s Termination for any reason prior to the time that such Participant’s Restricted Stock Units
have been settled, (1) all vesting with respect to such Participant’s Restricted Stock Units outstanding shall cease, (2) all of
such Participant’s unvested Restricted Stock Units outstanding shall be forfeited for no consideration as of the date of such Termination,
and (3) any shares remaining undelivered with respect to vested Restricted Stock Units then held by such Participant shall be delivered
on the delivery date or dates specified in the RSU Agreement.
8.
Stock Appreciation Rights.
(a)
General. Stock Appreciation Rights may be granted to Eligible Persons in such form and having such terms and conditions as the
Committee shall deem appropriate. The provisions of separate Stock Appreciation Rights shall be set forth in separate SAR Agreements,
which agreements need not be identical. No dividends or dividend equivalents shall be paid on Stock Appreciation Rights.
(b)
Term. The term of each Stock Appreciation Right shall be set by the Committee at the time of grant; provided, however,
that no Stock Appreciation Right granted hereunder shall be exercisable after, and each Stock Appreciation Right shall expire, ten (10)
years from the date it was granted.
(c)
Base Price. The base price per share of Stock for each Stock Appreciation Right shall be set by the Committee at the time of grant
and shall not be less than the Fair Market Value on the date of grant. Notwithstanding the foregoing, in the case of a Stock Appreciation
Right that is a Substitute Award, the base price per share of Stock for such Stock Appreciation Right may be less than the Fair Market
Value on the date of grant; provided, that such base price is determined in a manner consistent with the provisions of Section
409A of the Code.
(d)
Vesting. Stock Appreciation Rights shall vest and become exercisable in such manner, on such date or dates, or upon the achievement
of performance or other conditions, in each case as may be determined by the Committee and set forth in a SAR Agreement; provided,
however, that notwithstanding any such vesting dates, the Committee may in its sole discretion accelerate the vesting of any Stock
Appreciation Right at any time and for any reason. Unless otherwise specifically determined by the Committee, the vesting of a Stock
Appreciation Right shall occur only while the Participant is employed by or rendering services to the Service Recipient, and all vesting
shall cease upon a Participant’s Termination for any reason. To the extent permitted by applicable law and unless otherwise determined
by the Committee, vesting shall be suspended during the period of any approved unpaid leave of absence by a Participant following which
the Participant has a right to reinstatement and shall resume upon such Participant’s return to active employment. If a Stock Appreciation
Right is exercisable in installments, such installments or portions thereof that become exercisable shall remain exercisable until the
Stock Appreciation Right expires, is canceled or otherwise terminates.
(e)
Payment upon Exercise. Payment upon exercise of a Stock Appreciation Right may be made in cash, Stock, or property as specified
in the SAR Agreement or determined by the Committee, in each case having a value in respect of each share of Stock underlying the portion
of the Stock Appreciation Right so exercised, equal to the difference between the base price of such Stock Appreciation Right and the
Fair Market Value of one (1) share of Stock on the exercise date. For purposes of clarity, each share of Stock to be issued in settlement
of a Stock Appreciation Right is deemed to have a value equal to the Fair Market Value of one (1) share of Stock on the exercise date.
In no event shall fractional shares be issuable upon the exercise of a Stock Appreciation Right, and in the event that fractional shares
would otherwise be issuable, the number of shares issuable will be rounded down to the next lower whole number of shares, and the Participant
will be entitled to receive a cash payment equal to the value of such fractional share.
(f)
Termination of Employment or Service. Except as provided by the Committee in a SAR Agreement, Participant Agreement or otherwise:
(1)
In the event of a Participant’s Termination prior to the applicable Expiration Date for any reason other than (i) by the Service
Recipient for Cause, or (ii) by reason of the Participant’s death or Disability, (A) all vesting with respect to such Participant’s
Stock Appreciation Rights outstanding shall cease, (B) all of such Participant’s unvested Stock Appreciation Rights outstanding
shall terminate and be forfeited for no consideration as of the date of such Termination, and (C) all of such Participant’s vested
Stock Appreciation Rights outstanding shall terminate and be forfeited for no consideration on the earlier of (x) the applicable Expiration
Date and (y) the date that is ninety (90) days after the date of such Termination.
(2)
In the event of a Participant’s Termination prior to the applicable Expiration Date by reason of such Participant’s death
or Disability, (i) all vesting with respect to such Participant’s Stock Appreciation Rights outstanding shall cease, (ii) all of
such Participant’s unvested Stock Appreciation Rights outstanding shall terminate and be forfeited for no consideration as of the
date of such Termination, and (iii) all of such Participant’s vested Stock Appreciation Rights outstanding shall terminate and
be forfeited for no consideration on the earlier of (x) the applicable Expiration Date and (y) the date that is twelve (12) months after
the date of such Termination. In the event of a Participant’s death, such Participant’s Stock Appreciation Rights shall remain
exercisable by the Person or Persons to whom such Participant’s rights under the Stock Appreciation Rights pass by will or by the
applicable laws of descent and distribution until the applicable Expiration Date, but only to the extent that the Stock Appreciation
Rights were vested at the time of such Termination.
(3)
In the event of a Participant’s Termination prior to the applicable Expiration Date by the Service Recipient for Cause, all of
such Participant’s Stock Appreciation Rights outstanding (whether or not vested) shall immediately terminate and be forfeited for
no consideration as of the date of such Termination.
9.
Other Stock-Based Awards.
The
Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards that may be denominated
or payable in, valued in whole or in part by reference to, or otherwise based upon or related to Stock, as deemed by the Committee to
be consistent with the purposes of the Plan. The Committee may also grant Stock as a bonus (whether or not subject to any vesting requirements
or other restrictions on transfer), and may grant other Awards in lieu of obligations of the Company or an Affiliate to pay cash or deliver
other property under the Plan or under other plans or compensatory arrangements, subject to such terms as shall be determined by the
Committee. The terms and conditions applicable to such Awards shall be determined by the Committee and evidenced by Award Agreements,
which agreements need not be identical.
10.
Adjustment for Recapitalization, Merger, etc.
(a)
Capitalization Adjustments. The aggregate number of shares of Stock that may be delivered in connection with Awards (as set forth
in Section 4 hereof), the numerical share limits in Section 4(a) hereof, the number of shares of Stock covered by each outstanding Award,
and the price per share of Stock underlying each such Award shall be equitably and proportionally adjusted or substituted, as determined
by the Committee, in its sole discretion, as to the number, price, or kind of a share of Stock or other consideration subject to such
Awards (1) in the event of changes in the outstanding Stock or in the capital structure of the Company by reason of stock dividends,
extraordinary cash dividends, stock splits, reverse stock splits, recapitalizations, reorganizations, mergers, amalgamations, consolidations,
combinations, exchanges, or other relevant changes in capitalization occurring after the date of grant of any such Award (including any
Corporate Event); (2) in connection with any extraordinary dividend declared and paid in respect of shares of Stock, whether payable
in the form of cash, stock, or any other form of consideration; or (3) in the event of any change in applicable laws or circumstances
that results in or could result in, in either case, as determined by the Committee in its sole discretion, any substantial dilution or
enlargement of the rights intended to be granted to, or available for, Participants in the Plan.
(b)
Corporate Events. Notwithstanding the foregoing, except as provided by the Committee in an Award Agreement, Participant Agreement
or otherwise, in connection with (i) a merger, amalgamation, or consolidation involving the Company in which the Company is not the surviving
corporation, (ii) a merger, amalgamation, or consolidation involving the Company in which the Company is the surviving corporation but
the holders of shares of Stock receive securities of another corporation or other property or cash, (iii) a Change in Control, or (iv)
the reorganization, dissolution or liquidation of the Company (each, a “Corporate Event”), the Committee may provide
for any one or more of the following:
(1)
The assumption or substitution of any or all Awards in connection with such Corporate Event, in which case the Awards shall be subject
to the adjustment set forth in Section 10(a) above;
(2)
The acceleration of vesting of any or all Awards not assumed or substituted in connection with such Corporate Event, subject to the consummation
of such Corporate Event;
(3)
The cancellation of any or all Awards not assumed or substituted in connection with such Corporate Event (whether vested or unvested)
as of the consummation of such Corporate Event, together with the payment to the Participants holding vested Awards (including any Awards
that would vest upon the Corporate Event but for such cancellation) so canceled of an amount in respect of cancellation equal to the
amount payable pursuant to any Cash Award or, with respect to other Awards, an amount based upon the per-share consideration being paid
for the Stock in connection with such Corporate Event, less, in the case of Options, Stock Appreciation Rights, and other Awards subject
to exercise, the applicable exercise or base price; provided, however, that holders of Options, Stock Appreciation Rights, and
other Awards subject to exercise shall be entitled to consideration in respect of cancellation of such Awards only if the per-share consideration
less the applicable exercise or base price is greater than zero dollars ($0), and to the extent that the per-share consideration is less
than or equal to the applicable exercise or base price, such Awards shall be canceled for no consideration;
(4)
The cancellation of any or all Options, Stock Appreciation Rights and other Awards subject to exercise not assumed or substituted in
connection with such Corporate Event (whether vested or unvested) as of the consummation of such Corporate Event; provided that
all Options, Stock Appreciation Rights and other Awards to be so canceled pursuant to this paragraph (4) shall first become exercisable
for a period of at least ten (10) days prior to such Corporate Event, with any exercise during such period of any unvested Options, Stock
Appreciation Rights or other Awards to be (A) contingent upon and subject to the occurrence of the Corporate Event, and (B) effectuated
by such means as are approved by the Committee; and
(5)
The replacement of any or all Awards (other than Awards that are intended to qualify as “stock rights” that do not provide
for a “deferral of compensation” within the meaning of Section 409A of the Code) with a cash incentive program that preserves
the value of the Awards so replaced (determined as of the consummation of the Corporate Event), with subsequent payment of cash incentives
subject to the same vesting conditions as applicable to the Awards so replaced and payment to be made within thirty (30) days of the
applicable vesting date.
Payments
to holders pursuant to paragraph (3) above shall be made in cash or, in the sole discretion of the Committee, and to the extent applicable,
in the form of such other consideration necessary for a Participant to receive property, cash, or securities (or a combination thereof)
as such Participant would have been entitled to receive upon the occurrence of the transaction if the Participant had been, immediately
prior to such transaction, the holder of the number of shares of Stock covered by the Award at such time (less any applicable exercise
or base price). In addition, in connection with any Corporate Event, prior to any payment or adjustment contemplated under this Section
10(b), the Committee may require a Participant to (A) represent and warrant as to the unencumbered title to his or her Awards, (B) bear
such Participant’s pro-rata share of any post-closing indemnity obligations, and be subject to the same post-closing purchase price
adjustments, escrow terms, offset rights, holdback terms, and similar conditions as the other holders of Stock, and (C) deliver customary
transfer documentation as reasonably determined by the Committee. The Committee need not take the same action or actions with respect
to all Awards or portions thereof or with respect to all Participants. The Committee may take different actions with respect to the vested
and unvested portions of an Award.
(c)
Fractional Shares. Any adjustment provided under this Section 10 may, in the Committee’s discretion, provide for the elimination
of any fractional share that might otherwise become subject to an Award. No cash settlements shall be made with respect to fractional
shares so eliminated.
(d)
Double-Trigger Vesting. Notwithstanding any other provisions of the Plan, an Award Agreement or Participant Agreement to the contrary,
with respect to any Award that is assumed or substituted in connection with a Change in Control, the vesting, payment, purchase or distribution
of such Award may not be accelerated by reason of the Change in Control for any Participant unless the Participant experiences an involuntary
Termination as a result of the Change in Control. Unless otherwise provided for in an Award Agreement or Participant Agreement, any Award
held by a Participant who experiences an involuntary Termination as a result of a Change in Control shall immediately vest as of the
date of such Termination. For purposes of this Section 10(d), a Participant will be deemed to experience an involuntary Termination as
a result of a Change in Control if the Participant experiences a Termination by the Service Recipient other than for Cause, or otherwise
experiences a Termination under circumstances which entitle the Participant to mandatory severance payment(s) pursuant to applicable
law or, in the case of a non-employee director of the Company, if the non-employee director’s service on the Board terminates in
connection with or as a result of a Change in Control, in each case, at any time beginning on the date of the Change in Control up to
and including the second (2nd) anniversary of the Change in Control.
11.
Use of Proceeds.
The
proceeds received from the sale of Stock pursuant to the Plan shall be used for general corporate purposes.
12.
Rights and Privileges as a Stockholder.
Except
as otherwise specifically provided in the Plan, no Person shall be entitled to the rights and privileges of Stock ownership in respect
of shares of Stock that are subject to Awards hereunder until such shares have been issued to that Person.
13.
Transferability of Awards.
Awards
may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the applicable laws
of descent and distribution, and to the extent subject to exercise, Awards may not be exercised during the lifetime of the grantee other
than by the grantee. Notwithstanding the foregoing, except with respect to Incentive Stock Options, Awards and a Participant’s
rights under the Plan shall be transferable for no value to the extent provided in an Award Agreement or otherwise determined at any
time by the Committee.
14.
Employment or Service Rights.
No
individual shall have any claim or right to be granted an Award under the Plan or, having been selected for the grant of an Award, to
be selected for the grant of any other Award. Neither the Plan nor any action taken hereunder shall be construed as giving any individual
any right to be retained in the employ or service of the Company or an Affiliate of the Company.
15.
Compliance with Laws.
The
obligation of the Company to deliver Stock upon issuance, vesting, exercise, or settlement of any Award shall be subject to all applicable
laws, rules, and regulations, and to such approvals by governmental agencies as may be required. Notwithstanding any terms or conditions
of any Award to the contrary, the Company shall be under no obligation to offer to sell or to sell, and shall be prohibited from offering
to sell or selling, any shares of Stock pursuant to an Award unless such shares have been properly registered for sale with the U.S.
Securities and Exchange Commission pursuant to the Securities Act (or with a similar non-U.S. regulatory agency pursuant to a similar
law or regulation) or unless the Company has received an opinion of counsel, satisfactory to the Company, that such shares may be offered
or sold without such registration pursuant to an available exemption therefrom and the terms and conditions of such exemption have been
fully complied with. The Company shall be under no obligation to register for sale or resale under the Securities Act any of the shares
of Stock to be offered or sold under the Plan or any shares of Stock to be issued upon exercise or settlement of Awards. If the shares
of Stock offered for sale or sold under the Plan are offered or sold pursuant to an exemption from registration under the Securities
Act, the Company may restrict the transfer of such shares and may legend the Stock certificates representing such shares in such manner
as it deems advisable to ensure the availability of any such exemption.
16.
Withholding Obligations.
As
a condition to the issuance, vesting, exercise, or settlement of any Award (or upon the making of an election under Section 83(b) of
the Code), the Committee may require that a Participant satisfy, through deduction or withholding from any payment of any kind otherwise
due to the Participant, or through such other arrangements as are satisfactory to the Committee, the amount of all federal, state, and
local income and other taxes of any kind required or permitted to be withheld in connection with such issuance, vesting, exercise, or
settlement (or election). The Committee, in its discretion, may permit shares of Stock to be used to satisfy tax withholding requirements,
and such shares shall be valued at their Fair Market Value as of the issuance, vesting, exercise, or settlement date of the Award, as
applicable.
17.
Amendment of the Plan or Awards.
(a)
Amendment of Plan. The Board or the Committee may amend the Plan at any time and from time to time.
(b)
Amendment of Awards. The Board or the Committee may amend the terms of any one or more Awards at any time and from time to time.
(c)
Stockholder Approval; No Material Impairment. Notwithstanding anything herein to the contrary, no amendment to the Plan or any
Award shall be effective without stockholder approval to the extent that such approval is required pursuant to applicable law or the
applicable rules of each national securities exchange on which the Stock is listed. Additionally, no amendment to the Plan or any Award
shall materially impair a Participant’s rights under any Award unless the Participant consents in writing (it being understood
that no action taken by the Board or the Committee that is expressly permitted under the Plan, including, without limitation, any actions
described in Section 10 hereof, shall constitute an amendment to the Plan or an Award for such purpose). Notwithstanding the foregoing,
subject to the limitations of applicable law, if any, and without an affected Participant’s consent, the Board or the Committee
may amend the terms of the Plan or any one or more Awards from time to time as necessary to bring such Awards into compliance with applicable
law, including, without limitation, Section 409A of the Code.
18.
Termination or Suspension of the Plan.
The
Board or the Committee may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on the day before
the tenth (10th) anniversary of the date the stockholders of the Company approve the Plan. No Awards may be granted under the Plan while
the Plan is suspended or after it is terminated; provided, however, that following any suspension or termination of the Plan,
the Plan shall remain in effect for the purpose of governing all Awards then outstanding hereunder until such time as all Awards under
the Plan have been terminated, forfeited, or otherwise canceled, or earned, exercised, settled, or otherwise paid out, in accordance
with their terms.
19.
Effective Date of the Plan.
The
Plan is effective as of the Effective Date.
20.
Miscellaneous.
(a)
Certificates. Stock acquired pursuant to Awards granted under the Plan may be evidenced in such a manner as the Committee shall
determine. If certificates representing Stock are registered in the name of the Participant, the Committee may require that (1) such
certificates bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Stock, (2) the Company
retain physical possession of the certificates, and (3) the Participant deliver a stock power to the Company, endorsed in blank, relating
to the Stock. Notwithstanding the foregoing, the Committee may determine, in its sole discretion, that the Stock shall be held in book-entry
form rather than delivered to the Participant pending the release of any applicable restrictions.
(b)
Other Benefits. No Award granted or paid out under the Plan shall be deemed compensation for purposes of computing benefits under
any retirement plan of the Company or its Affiliates nor affect any benefits under any other benefit plan now or subsequently in effect
under which the availability or amount of benefits is related to the level of compensation.
(c)
Corporate Action Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant
will be deemed completed as of the date of such corporate action, unless otherwise determined by the Committee, regardless of when the
instrument, certificate, or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant. In
the event that the corporate records (e.g., Committee consents, resolutions or minutes) documenting the corporate action
constituting the grant contain terms (e.g., exercise price, vesting schedule or number of shares of Stock) that are inconsistent
with those in the Award Agreement as a result of a clerical error in connection with the preparation of the Award Agreement, the corporate
records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement.
(d)
Clawback/Recoupment Policy. Notwithstanding anything contained herein to the contrary, all Awards granted under the Plan shall
be and remain subject to any incentive compensation clawback or recoupment policy currently in effect or as may be adopted by the Board
(or a committee or subcommittee of the Board) and, in each case, as may be amended from time to time. No such policy adoption or amendment
shall in any event require the prior consent of any Participant. No recovery of compensation under such a clawback policy will be an
event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) under
any agreement with the Company or any of its Affiliates. In the event that an Award is subject to more than one such policy, the policy
with the most restrictive clawback or recoupment provisions shall govern such Award, subject to applicable law.
(e)
Non-Exempt Employees. If an Option is granted to an employee of the Company or any of its Affiliates in the United States who
is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, the Option will not be first exercisable for
any shares of Stock until at least six (6) months following the date of grant of the Option (although the Option may vest prior to such
date). Consistent with the provisions of the Worker Economic Opportunity Act, (1) if such employee dies or suffers a Disability, (2)
upon a Corporate Event in which such Option is not assumed, continued, or substituted, (3) upon a Change in Control, or (4) upon the
Participant’s retirement (as such term may be defined in the applicable Award Agreement or a Participant Agreement, or, if no such
definition exists, in accordance with the Company’s then current employment policies and guidelines), the vested portion of any
Options held by such employee may be exercised earlier than six (6) months following the date of grant. The foregoing provision is intended
to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option will be exempt
from his or her regular rate of pay. To the extent permitted and/or required for compliance with the Worker Economic Opportunity Act
to ensure that any income derived by a non-exempt employee in connection with the exercise, vesting or issuance of any shares under any
other Award will be exempt from such employee’s regular rate of pay, the provisions of this Section 20(e)will apply to all Awards.
(f)
Data Privacy. As a condition of receipt of any Award, each Participant explicitly and unambiguously consents to the collection,
use, and transfer, in electronic or other form, of personal data as described in this Section 20(e) by and among, as applicable, the
Company and its Affiliates for the exclusive purpose of implementing, administering, and managing the Plan and Awards and the Participant’s
participation in the Plan. In furtherance of such implementation, administration, and management, the Company and its Affiliates may
hold certain personal information about a Participant, including, but not limited to, the Participant’s name, home address, telephone
number, date of birth, social security or insurance number or other identification number, salary, nationality, job title(s), information
regarding any securities of the Company or any of its Affiliates, and details of all Awards (the “Data”). In addition
to transferring the Data amongst themselves as necessary for the purpose of implementation, administration, and management of the Plan
and Awards and the Participant’s participation in the Plan, the Company and its Affiliates may each transfer the Data to any third
parties assisting the Company in the implementation, administration, and management of the Plan and Awards and the Participant’s
participation in the Plan. Recipients of the Data may be located in the Participant’s country or elsewhere, and the Participant’s
country and any given recipient’s country may have different data privacy laws and protections. By accepting an Award, each Participant
authorizes such recipients to receive, possess, use, retain, and transfer the Data, in electronic or other form, for the purposes of
assisting the Company in the implementation, administration, and management of the Plan and Awards and the Participant’s participation
in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Company
or the Participant may elect to deposit any shares of Stock. The Data related to a Participant will be held only as long as is necessary
to implement, administer, and manage the Plan and Awards and the Participant’s participation in the Plan. A Participant may, at
any time, view the Data held by the Company with respect to such Participant, request additional information about the storage and processing
of the Data with respect to such Participant, recommend any necessary corrections to the Data with respect to the Participant, or refuse
or withdraw the consents herein in writing, in any case without cost, by contacting his or her local human resources representative.
The Company may cancel the Participant’s eligibility to participate in the Plan, and in the Committee’s discretion, the Participant
may forfeit any outstanding Awards if the Participant refuses or withdraws the consents described herein. For more information on the
consequences of refusal to consent or withdrawal of consent, Participants may contact their local human resources representative.
(g)
Participants Outside of the United States. The Committee may modify the terms of any Award under the Plan made to or held by a
Participant who is then a resident, or is primarily employed or providing services, outside of the United States in any manner deemed
by the Committee to be necessary or appropriate in order that such Award shall conform to laws, regulations, and customs of the country
in which the Participant is then a resident or primarily employed or providing services, or so that the value and other benefits of the
Award to the Participant, as affected by non—U.S. tax laws and other restrictions applicable as a result of the Participant’s
residence, employment, or providing services abroad, shall be comparable to the value of such Award to a Participant who is a resident,
or is primarily employed or providing services, in the United States. An Award may be modified under this Section 20(g) in a manner that
is inconsistent with the express terms of the Plan, so long as such modifications will not contravene any applicable law or regulation
or result in actual liability under Section 16(b) of the Exchange Act for the Participant whose Award is modified. Additionally, the
Committee may adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Eligible Persons
who are non—U.S. nationals or are primarily employed or providing services outside the United States.
(h)
Change in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or her
services for the Company or any of its Affiliates is reduced (for example, and without limitation, if the Participant is an employee
of the Company and the employee has a change in status from a full-time employee to a part-time employee) after the date of grant of
any Award to the Participant, the Committee has the right in its sole discretion to (i) make a corresponding reduction in the number
of shares of Stock subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in
time commitment, and (ii) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such
Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced
or extended.
(i)
No Liability of Committee Members. Neither any member of the Committee nor any of the Committee’s permitted delegates shall
be liable personally by reason of any contract or other instrument executed by such member or on his or her behalf in his or her capacity
as a member of the Committee or for any mistake of judgment made in good faith, and the Company shall indemnify and hold harmless each
member of the Committee and each other employee, officer, or director of the Company to whom any duty or power relating to the administration
or interpretation of the Plan may be allocated or delegated, against all costs and expenses (including counsel fees) and liabilities
(including sums paid in settlement of a claim) arising out of any act or omission to act in connection with the Plan, unless arising
out of such Person’s own fraud or willful misconduct; provided, however, that approval of the Board shall be required for
the payment of any amount in settlement of a claim against any such Person. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such Persons may be entitled under the Company’s certificate or articles of incorporation
or by-laws, each as may be amended from time to time, as a matter of law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.
(j)
Payments Following Accidents or Illness. If the Committee shall find that any Person to whom any amount is payable under the Plan
is unable to care for his or her affairs because of illness or accident, or is a minor, or has died, then any payment due to such Person
or his or her estate (unless a prior claim therefor has been made by a duly appointed legal representative) may, if the Committee so
directs the Company, be paid to his or her spouse, child, relative, an institution maintaining or having custody of such Person, or any
other Person deemed by the Committee to be a proper recipient on behalf of such Person otherwise entitled to payment. Any such payment
shall be a complete discharge of the liability of the Committee and the Company therefor.
(k)
Governing Law. The Plan shall be governed by and construed in accordance with the laws of State of Delaware without reference
to the principles of conflicts of laws thereof.
(l)
Electronic Delivery. Any reference herein to a “written” agreement or document or “writing” will include
any agreement or document delivered electronically or posted on the Company’s intranet (or other shared electronic medium controlled
or authorized by the Company to which the Participant has access) to the extent permitted by applicable law.
(m)
Arbitration. All disputes and claims of any nature that a Participant (or such Participant’s transferee or estate) may have
against the Company arising out of or in any way related to the Plan or any Award Agreement shall be submitted to and resolved exclusively
by binding arbitration conducted in New York City, New York (or such other location as the parties thereto may agree) in accordance with
the applicable rules of the American Arbitration Association then in effect, and the arbitration shall be heard and determined by a panel
of three arbitrators in accordance with such rules (except that in the event of any inconsistency between such rules and this Section
20(m), the provisions of this Section 20(m) shall control). The arbitration panel may not modify the arbitration rules specified above
without the prior written approval of all parties to the arbitration. Within ten business days after the receipt of a written demand,
each party shall designate one arbitrator, each of whom shall have experience involving complex business or legal matters, but shall
not have any prior, existing or potential material business relationship with any party to the arbitration. The two arbitrators so designated
shall select a third arbitrator, who shall preside over the arbitration, shall be similarly qualified as the two arbitrators and shall
have no prior, existing or potential material business relationship with any party to the arbitration; provided that if the two
arbitrators are unable to agree upon the selection of such third arbitrator, such third arbitrator shall be designated in accordance
with the arbitration rules referred to above. The arbitrators will decide the dispute by majority decision, and the decision shall be
rendered in writing and shall bear the signatures of the arbitrators and the party or parties who shall be charged therewith, or the
allocation of the expenses among the parties in the discretion of the panel. The arbitration decision shall be rendered as soon as possible,
but in any event not later than 120 days after the constitution of the arbitration panel. The arbitration decision shall be final and
binding upon all parties to the arbitration. The parties hereto agree that judgment upon any award rendered by the arbitration panel
may be entered in the United States District Court for the Southern District of New York or any New York State court sitting in New York
City. To the maximum extent permitted by law, the parties hereby irrevocably waive any right of appeal from any judgment rendered upon
any such arbitration award in any such court. Notwithstanding the foregoing, any party may seek injunctive relief in any such court.
(n)
Statute of Limitations. A Participant or any other person filing a claim for benefits under the Plan must file the claim within
one (1) year of the date the Participant or other person knew or should have known of the facts giving rise to the claim. This one-year
statute of limitations will apply in any forum where a Participant or any other person may file a claim and, unless the Company waives
the time limits set forth above in its sole discretion, any claim not brought within the time periods specified shall be waived and forever
barred.
(o)
Funding. No provision of the Plan shall require the Company, for the purpose of satisfying any obligations under the Plan, to
purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets,
nor shall the Company be required to maintain separate bank accounts, books, records, or other evidence of the existence of a segregated
or separately maintained or administered fund for such purposes. Participants shall have no rights under the Plan other than as unsecured
general creditors of the Company, except that insofar as they may have become entitled to payment of additional compensation by performance
of services, they shall have the same rights as other employees and service providers under general law.
(p)
Reliance on Reports. Each member of the Committee and each member of the Board shall be fully justified in relying, acting, or
failing to act, and shall not be liable for having so relied, acted, or failed to act in good faith, upon any report made by the independent
public accountant of the Company and its Affiliates and upon any other information furnished in connection with the Plan by any Person
or Persons other than such member.
(q)
Titles and Headings. The titles and headings of the sections in the Plan are for convenience of reference only, and in the event
of any conflict, the text of the Plan, rather than such titles or headings, shall control.
*
* *
ADOPTED
BY THE BOARD OF DIRECTORS: JULY 14, 2020
APPROVED
BY THE STOCKHOLDERS: JULY 31, 2020
AMENDED
BY THE STOCKHOLDERS: OCTOBER 7, 2022
TERMINATION
DATE: JULY 14, 2030
Lixte Biotechnology (NASDAQ:LIXT)
過去 株価チャート
から 4 2024 まで 5 2024
Lixte Biotechnology (NASDAQ:LIXT)
過去 株価チャート
から 5 2023 まで 5 2024