DEF 14A of Celcuity Inc.
Filed Mar 28, 2024 · FY20230001493152-24-011792
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON May 9, 2024
| 5. | To approve a 1,500,000 share increase to the Celcuity Inc. Amended and Restated 2017 Stock Incentive Plan; |
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON May 9, 2024
| 6. | To approve an amendment to the Celcuity Inc. Amended and Restated 2017 Stock Incentive Plan increasing by 250,000 the number of incentive award shares that may be granted in any calendar year to any one eligible recipient; and |
2024 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 9, 2024
| 5. | To approve a 1,500,000 share increase to the Celcuity Inc. Amended and Restated 2017 Stock Incentive Plan; |
2024 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 9, 2024
| 6. | To approve an amendment to the Celcuity Inc. Amended and Restated 2017 Stock Incentive Plan increasing by 250,000 the number of incentive award shares that may be granted in any calendar year to any one eligible recipient; and |
Notice and Access Delivery
| ● | FOR the approval of a 1,500,000 share increase to the Celcuity Inc. Amended and Restated 2017 Stock Incentive Plan (Proposal 5). |
Notice and Access Delivery
| ● | FOR the approval of a 250,000 share increase to the number of incentive award shares that may be granted in any calendar year to any one eligible recipient under the Celcuity Inc. Amended and Restated 2017 Stock Incentive Plan (Proposal 6). |
Nominees for Election
Nominees for Election The Board, upon the recommendation of the Nominating and Corporate Governance Committee, has nominated the seven persons named in the table below for election as directors at the Annual Meeting. Each nominee listed below currently serves as a director of Celcuity.
Nominees for Election
| Name of Nominee | Age | Position Held with Celcuity Inc. | Director Since | | Richard E. Buller | 74 | Director | 2019 | | David F. Dalvey | 65 | Director | 2014 | | Leo T. Furcht | 77 | Director | 2019 | | Lance G. Laing | 62 | Director, Chief Science Officer, Vice President, and Secretary | 2012 | | Polly A. Murphy | 59 | Director | 2022 | | Richard J. Nigon | 76 | Director | 2017 | | Brian F. Sullivan | 62 | Chairman of the Board and Chief Executive Officer | 2012 |
Nominees for Election
The Board has determined that each of Richard E. Buller, David F. Dalvey, Leo T. Furcht, Polly A. Murphy, and Richard J. Nigon qualifies as an independent director under the rules of the Nasdaq Stock Market (the “Nasdaq Listing Rules”). Accordingly, the Board is and will be composed of a majority of independent directors. Set forth below with respect to each director nominee standing for election at the Annual Meeting is each nominee’s principal occupation and business experience during at least the past five years, the names of other publicly-held companies for which such nominee serves or has served as a director during such period, and the experience, qualifications, attributes or skills that has led the Board to conclude that each nominee should serve as a director of the Company. Richard E. Buller, M.D., Ph.D., was appointed to Celcuity’s Board in December 2019. Dr. Buller has over 15 years of experience leading oncology clinical development and translational medicine departments at major pharmaceutical companies. He has participated in the development of 15 drugs and several companion diagnostics that received U.S. FDA approval. Dr. Buller most recently served as Head Oncology Clinical Development and Vice President of Translational Oncology at Pfizer, Inc, one of the world’s largest pharmaceutical companies, until he retired in 2016. He had previously served as Vice President of Translational Medicine at Exelixis, a leading biopharmaceutical company, where he led efforts to study patients selected by molecular testing for inclusion in their phase 2 and phase 3 clinical trials. He began his pharmaceutical company career at GlaxoSmithKline as Director of the Oncology Medicine Development Center. Prior to his leadership positions in drug development, he was Professor of Gynecologic Oncology at the University of Iowa, where he led laboratory research focused on identifying genomic variants involved in ovarian cancer. He received his M.D. from the Baylor College of Medicine, where he also received his Ph.D. in cell biology. Among other attributes, skills, and qualifications, the Board believes Dr. Buller is uniquely qualified to serve as a director based on his oncology drug and diagnostic development expertise. David F. Dalvey has served as a member of Celcuity’s Board since February 2014. Mr. Dalvey has more than 30 years of experience in the fields of corporate finance and venture capital, working primarily with growth-oriented technology and life-science businesses. He has over 10 years of corporate finance advisory experience with two national investment banks, completing over 150 individual transactions. He has been the General Partner of Brightstone Venture Capital, a venture capital management company since September 2000. Brightstone is a 25-year old venture capital management company that has raised and managed ten venture partnerships. Previously, he held management positions with R.J. Steichen and Company, an investment bank, from 1995 to 2000, The Food Fund LP, a venture capital firm, from 1992 to 1995 and Wessels, Arnold & Henderson, an investment bank, from 1987 to 1992. Mr. Dalvey served on the board of directors for Navarre Corporation (now Speed Commerce, Inc.) from 2009 until November 2012, on the board of managers for Blue Rock Market Neutral Fund, a mutual fund registered under the Investment Company Act of 1940, from 2000 to 2014 and on the board of directors for Digitiliti, Inc. from July 2011 until October 2012. Mr. Dalvey has significant operational exposure as a board director or advisor to many other public and privately held growth businesses and has served on these companies’ audit, strategic or governance committees, including companies such as HomeSpotter, Definity Health, AppTec Laboratories, CHF Solutions, BiteSquad, Agiliti, and Nature Vision. Mr. Dalvey received a B.S. in Business/Management Economics from University of Minnesota. Among other attributes, skills, and qualifications, the Board believes Mr. Dalvey is uniquely qualified to serve as a director based on his leadership experience in operating both public and private companies and his experience working in the investment community and with investment firms, which enable him to bring valuable insight and knowledge to our Board. Leo T. Furcht, M.D., was appointed to Celcuity’s Board in May 2019. Dr. Furcht is currently Allen-Pardee Professor of Cancer Biology and Head of the Department of Laboratory Medicine and Pathology at the University of Minnesota and a member of the Division of Molecular Pathology and Genomics. He served as Chairman of the Board of Directors for University of Minnesota Physicians, the Medical School practice plan with approximately 700 physicians, from 2004-2014. He was also the founding Director of the Biomedical Engineering Center from 1990-2001, where he led efforts to establish stem cell and molecular diagnostics expertise at the University of Minnesota. He has published more than 180 scientific papers and holds more than 30 patents in the fields of polypeptides, biomaterials, and adult stem cells. His business experience includes co-founding two medical technology companies, South Bay Medical, a medical device company that was acquired by Mentor Corporation, and Diascreen, a diagnostics company, which was later acquired by Chronimed. Among other attributes, skills, and qualifications, the Board believes Dr. Furcht is uniquely qualified to serve as a director based on his research in tumor cell behavior and extracellular matrix proteins, his role as Head of the University of Minnesota’s Department of Laboratory Medicine and Pathology, and his experience in several biotechnology start-ups. Lance G. Laing, Ph.D. is our co-founder and has served as Chief Science Officer, Vice President, Secretary and a director since we commenced operations in 2012. Dr. Laing’s career spans more than 20 years in drug discovery research and technology development. He received his doctorate in biophysics and biochemistry from The Johns Hopkins University and completed a National Institutes of Health post-doctoral fellowship at Washington University Medical School. He has received 24 U.S. patents and has an additional U.S. patent pending. His drug discovery research career began at Scriptgen/Anadys Pharmaceuticals (purchased by Novartis), where he worked under Professor Peter Kim, who became President of Merck Research. He also was Director of Chemistry and Bioapplications and Director of Detection Product Development for two companies that each developed instruments similar to those Celcuity uses to perform the CELsignia tests. His work at these two instrument companies gave him unique expertise and experience in developing a variety of patented applications for these instruments. Most recently, he served as an executive director for an international drug discovery and development company. Among other attributes, skills, and qualifications, the Board believes Dr. Laing is uniquely qualified to serve as a director based on his significant research, medical and scientific expertise.
Nominees for Election
Polly A. Murphy, D.V.M., Ph.D., was appointed to Celcuity’s Board in September 2022. Dr. Murphy has served as Chief Business Officer at UroGen Pharma, Inc. since August 2020. Prior to that, Dr. Murphy served in various leadership roles at Pfizer, Inc. from September 2008 to August 2020, including as Vice President and Head of Early Commercial Development, Pfizer Oncology Business Unit from January 2019 to August 2020, Vice President and Head of Global Marketing and Commercial Development, Pfizer Oncology Business Unit from June 2017 to December 2018, and as Vice President and Head of Strategy and Business Development for Pfizer China from November 2013 to May 2018. Since August 2020, Dr. Murphy has served on the board of directors of Atea Pharmaceuticals, Inc., a publicly held company. Dr. Murphy received her D.V.M. and Ph.D. from Iowa State University and her M.B.A. from Nova Southeastern University. Among other attributes, skills, and qualifications, the Board believes Dr. Murphy is uniquely qualified to serve as a director based on her extensive experience in strategy, development and commercialization within the pharmaceutical industry. Richard J. Nigon, is currently Senior Vice President of Cedar Point Capital, LLC., a private company that raises capital for early-stage companies, where he has served since 2007. Mr. Nigon has also been a board member for Northern Technologies International Corp. since February 2010, including serving as its non-executive Chairman of the board of directors since November 2012. Mr. Nigon also serves as a director of several private companies. Mr. Nigon previously served as a board member for Tactile Systems Technology from September 2012 to May 2022, Vascular Solutions, Inc. from November 2000 to February 2017, when it was acquired by Teleflex, Incorporated and as a board member for Virtual Radiologic Corporation from May 2007 until it was acquired in July 2010. From February 2001 until December 2006, Mr. Nigon was a Director of Equity Corporate Finance for Miller Johnson Steichen Kinnard, a privately held investment firm, which was acquired in December 2006 by Stifel Nicolaus, a brokerage and investment banking firm. After that acquisition, Mr. Nigon became a Managing Director of Private Placements of Stifel Nicolaus until May 2007. From February 2000 to February 2001, Mr. Nigon served as the Chief Financial Officer of Dantis, Inc., a web hosting company. Prior to joining Dantis, Mr. Nigon was employed by Ernst & Young LLP from 1970 to 2000, where he served as a partner from 1981 to 2000. While at Ernst & Young, Mr. Nigon served as the Director of Ernst & Young’s Twin Cities Entrepreneurial Services Group and was the coordinating partner on several publicly-traded companies in the consumer retailing and manufacturing sectors. Among other attributes, skills, and qualifications, the Board believes Mr. Nigon is qualified to serve as a director because of his extensive public accounting and auditing experience, including experience with emerging growth companies. The Board also believes that Mr. Nigon will bring a strong background in financial controls and reporting, financial management, financial analysis, SEC reporting requirements, and mergers and acquisitions. His strategic planning expertise gained through his management and leadership roles at private investment firms also makes him well-suited to serve as a member of the Board. Brian F. Sullivan is our co-founder and has served as Chairman of the Board and Chief Executive Officer since we commenced operations in 2012. Mr. Sullivan has over 30 years of experience founding and building successful, high growth technology companies. He was Chairman and CEO of SterilMed, a medical device reprocessing company, from 2003, when he led an investment group to acquire a majority interest, until its sale to Ethicon Endo-Surgery Inc., a Johnson & Johnson company, for $330 million in 2011. Previously, he was co-founder and Chief Executive Officer of Recovery Engineering, a filtration company, which he took public and subsequently sold to Procter & Gamble for $265 million in 1999. Mr. Sullivan previously served on the board of directors of two publicly-held companies, Entegris, Inc. and Virtual Radiologic Inc. Mr. Sullivan has received nine U.S. patents and has several patents pending. He graduated magna cum laude with distinction from Harvard College with an A.B. in economics. Among other attributes, skills, and qualifications, the Board believes Mr. Sullivan is uniquely qualified to serve as a director based on his extensive operational and business development experience, and his knowledge in building stockholder value, growing a company from inception and navigating significant corporate transactions and the public company process. Assuming a quorum is present, the affirmative vote of a plurality of the shares of Celcuity common stock represented at the Annual Meeting, either in person or by proxy, and entitled to vote is required for the election of directors. THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE SLATE OF NOMINEES NAMED ABOVE. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Boulay PLLP (“Boulay”), an independent registered public accounting firm, has audited the Company’s financial statements for the years ended December 31, 2023 and 2022. The Audit Committee appointed Boulay as the Company’s independent registered public accounting firm for the year ending December 31, 2024 and has also reviewed and approved the scope and nature of the services to be performed for Celcuity by Boulay. Representatives of Boulay are expected to be present at the Annual Meeting to make a statement if they wish to do so, and to respond to appropriate stockholder questions. The engagement agreement entered into with Boulay for 2024 is subject to mediation and arbitration procedures as the sole method for resolving disputes. Ratification of the appointment of Boulay as the Company’s independent registered public accounting firm is not required to be submitted to our stockholders for a vote. The Sarbanes-Oxley Act of 2002 requires the Audit Committee to be directly responsible for the appointment, compensation and oversight of the audit work of the independent registered public accounting firm. However, the Board is submitting this matter to the stockholders for ratification as a matter of good corporate governance. If the appointment of Boulay is not ratified by the stockholders at the Annual Meeting, the Audit Committee may reconsider whether to retain Boulay, and may retain Boulay or another firm without resubmitting the matter to the Company’s stockholders. Even if the stockholders vote in favor of ratification of the appointment, the Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and the stockholders. Representatives of Boulay regularly attend meetings of the Audit Committee. The Audit Committee pre-approves and reviews audit and non-audit services performed by Boulay, as well as the fees charged by Boulay for such services. In its pre-approval and review of non-audit service fees, the Audit Committee considers, among other factors, the possible effect of the performance of such services on Boulay’s independence. To avoid potential conflicts of interest, publicly traded companies are prohibited from obtaining certain non-audit services, such as bookkeeping or actuarial services, from their independent registered public accounting firm. In 2023 and 2022, we did not obtain any of these prohibited services from Boulay. For additional information concerning the Audit Committee and its relationship with Boulay, see “Corporate Governance” and “Audit Committee Report” below.
Nominees for Election
Audit and Non-Audit Fees Billed to the Company by Independent Registered Public Accounting Firm The following table summarizes the fees we were billed for audit and non-audit services rendered by Boulay for 2023 and 2022.
Nominees for Election
| | 2023 | 2022 | | Audit Fees | $112,500 | $100,900 | | Audit-Related Fees | - | - | | Tax Fees | 9,170 | 4,240 | | All Other Fees | 17,500 | 46,415 | | Total | $139,170 | $151,555 |
Nominees for Election
Audit Fees. These fees were for professional services rendered for 2023 and 2022 in connection with the audit of our annual financial statements and review of the financial statements included in our Quarterly Reports on Form 10-Q. The amounts also include fees for services that are normally provided by Boulay in connection with statutory and regulatory filings and engagements for the years identified. Audit-Related Fees. These fees were for assurance and related services that were related to the performance of the audit or review of our financial statements and were not reported under the caption “Audit Fees.” This category may include fees related to the performance of audits and attestation services not required by statute or regulations, or accounting consultations about the application of generally accepted accounting principles to proposed transactions. Tax Fees. These fees were for tax compliance, tax planning, tax advice and corporate tax services. Corporate tax services encompass a variety of permissible services, including technical tax advice related to tax matters; assistance with withholding-tax matters; assistance with state and local taxes; preparation of reports to comply with local tax authority transfer pricing documentation requirements; and assistance with tax audits. All Other Fees. These fees were primarily for services related to our shelf registration statement and the offerings conducted thereunder.
INCENTIVE PLAN
INCENTIVE PLAN The Board has approved, subject to stockholder approval, an amendment to the Celcuity Inc. Amended and Restated 2017 Stock Incentive Plan, or the 2017 Plan, to allocate 1,500,000 additional shares for issuance under the 2017 Plan. As we continue to execute our clinical development and commercialization plans, we anticipate the need to maintain compensation at competitive levels for existing employees and to add new employees. In order to retain current employees and to motivate individuals to accept offers of employment, we must provide compensation that is competitive with levels offered by other biopharmaceutical companies. Since equity grants are a significant component of the compensation packages offered to employees in the biopharmaceutical industry, we must have sufficient shares available to grant in order to retain current employees and to hire new ones. We expect that our current reserves under the 2017 Plan, including expected increases under the annual increase provisions, will not be sufficient to allow us to meet our needs over the next several years. The proposed 1,500,000 share increase will allow us to meet this expected need and enable us to remain competitive while supporting our future growth and development.
Description of the Plan
Description of the Plan Purpose. The purpose of the 2017 Plan is to advance the interests of the Company and its stockholders by enabling us to attract and retain persons of skill and ability to perform services for the Company by providing an incentive to such individuals through equity participation in the Company and by rewarding such individuals who contribute to the achievement of our economic objectives. As of December 31, 2023, 83 individuals were eligible for selection to receive awards under the Plan. Shares Available. We initially reserved 750,000 shares of our common stock to be issued under our 2017 Plan. We reserved an additional 500,000 shares in each of 2021 and 2022, and an additional 1,500,000 in 2023. In addition, the number of shares reserved for issuance was automatically increased by 102,540, 102,998, 149,189, 216,673, and 255,060 shares on January 1, 2020, 2021, 2022, 2023 and 2024, respectively, and will increase automatically on January 1 of each of 2025 through 2027 by the number of shares equal to 1.0% of the aggregate number of outstanding shares of our common stock as of the immediately preceding December 31. However, our Board may reduce the amount of the increase in any particular year. Any shares of common stock that are subject to an award that lapses, expires, is forfeited or for any reason is terminated unexercised or unvested and any shares of common stock that are subject to an award that is settled or paid in cash or any form other than shares of common stock will automatically again become available for issuance under the 2017 Plan. Any shares of common stock that constitute the forfeited portion of a restricted stock award, however, will not become available for re-issuance under the 2017 Plan after they have been so forfeited. Any shares of common stock withheld to satisfy tax withholding obligations on an award or to pay the exercise price of a stock option will not become available for re-issuance under the 2017 Plan after they have been withheld for such purposes. As of March 12, 2024, 139,613 shares had been issued or withheld under the 2017 Plan, 2,921,933 shares were subject to outstanding awards, and 1,014,914 shares were available for additional grants under the 2017 Plan. Awards Available. Our 2017 Plan authorizes the award of stock options, restricted stock awards, or RSAs, stock appreciation rights, or SARs, restricted stock units, or RSUs, performance awards and stock bonuses. Assuming the amendment to the 2017 Plan as set forth in Proposal 6 below is approved by the stockholders, no person will be eligible to receive more than 500,000 shares in any calendar year under our 2017 Plan. After giving effect to the amendment proposed herein, no more than 4,750,000 shares will be issued pursuant to the exercise of incentive stock options. Our 2017 Plan provides for the grant of awards to our employees, directors, consultants, independent contractors and advisors, provided the consultants, independent contractors, directors and advisors are natural persons that render services not in connection with the offer and sale of securities in a capital-raising transaction. The awards granted may vest based on time and/or achievement of performance conditions. Stock options granted under the 2017 Plan may either be granted as incentive stock options or as non-qualified stock options. Our Compensation Committee may provide for options to be exercised only as they vest or to be immediately exercisable with any shares issued on exercise being subject to our right of repurchase that lapses as the shares vest. The exercise price of stock options must be at least equal to the fair market value of our common stock on the date of grant. The maximum term of options granted under our 2017 Plan is ten years. An RSA is a grant by us of shares of our common stock subject to restrictions. The price (if any) of an RSA will be determined by the Compensation Committee. Unless otherwise determined by the Compensation Committee at the time of award, vesting will cease on the date the participant no longer provides services to us and unvested shares will be forfeited to or repurchased by us. SARs provide for a payment, or payments, in cash or shares of our common stock, to the holder based upon the difference between the fair market value of our common stock on the date of exercise and the stated exercise price up to a maximum amount of cash or number of shares. RSUs represent the right to receive shares of our common stock at a specified date in the future, subject to forfeiture of that right because of termination of employment or failure to achieve certain performance conditions. If an RSU has not been forfeited, then on the date specified in the RSU agreement, we will deliver to the holder of the RSU whole shares of our common stock (which may be subject to additional restrictions), cash or a combination of our common stock and cash. Performance shares are performance awards that cover a number of shares of our common stock that may be settled in cash or by issuance of the underlying shares. These awards are subject to forfeiture prior to settlement because of termination of employment or failure to achieve the performance conditions. Stock bonuses may be granted as additional compensation for service or performance and, therefore, will not be issued in exchange for cash. Transferability. Awards granted under our 2017 Plan may not be transferred in any manner other than by will or by the laws of descent and distribution or as determined by our Compensation Committee. Unless otherwise permitted by our Compensation Committee, stock options may be exercised during the lifetime of the optionee only by the optionee or the optionee’s guardian or legal representative. Options granted under our 2017 Plan generally may be exercised for a period of three months after the termination of the optionee’s service to us, for a period of 12 months in the case of death or disability, or such longer period as our Compensation Committee may provide. Options generally terminate immediately upon termination of employment for cause. Certain Adjustments. In the event there is a specified type of change in our capital structure without our receipt of consideration, such as a stock split, appropriate adjustments will be made to the number of shares reserved under our 2017 Plan, the maximum number of shares that can be granted in a calendar year and the number of shares and exercise price, if applicable, of all outstanding awards under our 2017 Plan.
Description of the Plan
Change of Control and Other Corporate Events. Our 2017 Plan provides that, in the event of specified types of mergers or consolidations, a sale, lease, or other disposition of all or substantially all of our assets or other corporate transactions, outstanding awards under our 2017 Plan may be assumed or replaced by any surviving or acquiring corporation; the surviving or acquiring corporation may substitute similar awards for those outstanding under our 2017 Plan; outstanding awards may be settled for the full value of such outstanding award (whether or not then vested or exercisable) in cash, cash equivalents, or securities (or a combination thereof) of the successor entity with payment deferred until the date or dates the award would have become exercisable or vested; or outstanding awards may be terminated for no consideration. Our Board or its Compensation Committee has the discretion to provide that a stock award under our 2017 Plan will immediately vest as to all or any portion of the shares subject to the stock award at the time of a corporate transaction or in the event a participant’s service with us or a successor entity is terminated actually or constructively within a designated period following the occurrence of the transaction. Stock awards held by participants under our 2017 Plan will not vest automatically on such an accelerated basis unless specifically provided in the participant’s applicable award agreement. In the event of a corporate transaction, the vesting of all awards granted to non-employee directors shall accelerate and such awards shall become exercisable (as applicable) in full upon the consummation of the corporate transaction. Termination; Amendment. Our 2017 Plan will terminate on September 6, 2027, unless it is terminated earlier by our board of directors. Our Board may amend or terminate our 2017 Plan at any time. Our Board generally may amend our 2017 Plan, without stockholder approval unless required by applicable law. Plan Administration. Our 2017 Plan is administered by our Compensation Committee or by our Board acting in place of our Compensation Committee. The Compensation Committee has the authority to construe and interpret our 2017 Plan, grant awards, amend or modify any outstanding award (subject to certain limitations), and make all other determinations necessary or advisable for the administration of the plan. This authority includes the ability to modify the number of shares or other terms and conditions of an award, extend the term of an award, accelerate the exercisability or vesting or otherwise terminate any restrictions relating to an award, reduce the exercise price of any outstanding option, accept the surrender of any outstanding award or, to the extent not previously exercised or vested, authorize the grant of new awards in substitution for surrendered awards.
Tax Consequences
Tax Consequences Options and SARs. Stock options granted under the 2017 Plan may either be granted as incentive stock options, which are governed by Internal Revenue Code Section 422, as amended, or as non-qualified stock options, which are governed by Internal Revenue Code Section 83, as amended. Generally, no federal income tax is payable by the participant upon the grant or exercise of an incentive stock option and no deduction is taken by us. If the participant holds the stock acquired upon exercise of the option for a certain period, all appreciation in the value of the shares will be taxed at favorable capital gains tax rates. If the required holding period is not met, then any appreciation in the stock up to the date of exercise will be taxed at ordinary income tax rates. If after exercise, the participant disposes of the shares within a certain time period, we will be entitled to deduct the appreciation on the shares at the time of exercise. Under current tax laws, if a participant exercises a non-qualified stock option, the participant will be taxed on the difference between the fair market value of the stock on the exercise date and the exercise price and we will be entitled to a corresponding tax deduction. Similar rules apply to SARs. RSAs, RSUs and Performance Shares. RSAs, RSUs and performance shares under the 2017 Plan generally are not subject to federal income tax when awarded, unless, solely in the case of RSAs, the participant properly elects to accelerate the tax recognition. RSAs are generally subject to ordinary income tax at the time the restrictions lapse, and performance shares are taxed at the time the performance targets are met. RSUs are generally subject to ordinary tax at the time of payment, even if vested earlier. We are entitled to a corresponding deduction at the time the participant recognizes taxable income on the RSAs, RSUs or performance shares. The foregoing is only a summary of the effect of U.S. federal income taxation with respect to the grant and exercise of awards under the 2017 Plan. It does not purport to be complete, and does not discuss the tax consequences of an individual’s death or the provisions of the income tax laws of any municipality, state or foreign country in which any eligible individual may reside.
Nominating and Corporate Governance Committee
| ● | An annual equity award with a fair market value of $75,000, payable in the form of restricted stock, stock options or a combination of both, at the director’s election. |
Nominating and Corporate Governance Committee
Pursuant to this policy, during 2023, Celcuity’s non-employee directors received compensation in the form of an equity award with a fair market value of $75,000 as of May 15, 2023, the date of grant, as well as cash compensation in the amount of $6,250 per quarter for each of two quarters, for total cash compensation of $12,500. Dr. Buller received the equity award in the form of restricted stock and a stock option. Dr. Buller received 1,958 shares of restricted stock, which was determined by dividing $18,758 by the closing price of a share of the Company’s common stock on the date of grant. The restricted stock will vest with respect to 100% of the shares on April 30, 2024. Dr. Buller also received a stock option for the purchase of 8,733 shares, the number of shares that results in the option having a Black Scholes value of $56,242 as of the date of grant. Mr. Dalvey, Dr. Furcht, Dr. Murphy, and Mr. Nigon received the equity award in the form of a stock option. Each stock option is for the purchase of 11,645 shares, the number of shares that results in the option having a Black Scholes value of $75,000 as of the date of grant. The stock options have an exercise price of $9.58 per share, which is equal to the closing price of a share of the Company’s common stock on the date of grant. The above stock options will vest and become exercisable with respect to 100% of the shares on April 30, 2024 and will remain exercisable for the remainder of the 10-year term. The Compensation Committee has not yet determined compensation for the non-employee directors for the calendar year running May 2024 – April 2025.
Fiscal Year 2023 Director Compensation
Fiscal Year 2023 Director Compensation The table below summarizes the compensation paid by the Company to its non-employee directors for the fiscal year ended December 31, 2023. Mr. Sullivan and Dr. Laing are not included in this table since they are each an employee of the Company and receive no compensation for their services as a director. Each of Mr. Sullivan and Dr. Laing are included in the Summary Compensation Table under “Executive Compensation” below.
Fiscal Year 2023 Director Compensation
| Name | Fees Earned or Paid in Cash | Stock Awards (1)(2) | Option Awards (1)(3) | Total | | Richard E. Buller | $12,500 | $18,758 | $56,242 | $87,500 | | David F. Dalvey | $12,500 | $- | $75,000 | $87,500 | | Leo T. Furcht | $12,500 | $- | $75,000 | $87,500 | | Polly A. Murphy | $12,500 | $- | $75,000 | $87,500 | | Richard J. Nigon | $12,500 | $- | $75,000 | $87,500 |
Fiscal Year 2023 Director Compensation
| (1) Reflects the aggregate grant date fair value of equity awards to each director during 2023, calculated in accordance with FASB ASC Topic 718. Dr. Buller received 1,958 shares of restricted stock and an option to purchase 8,733 shares of common stock at an exercise price of $9.58. Dr. Furcht, Dr. Murphy, Mr. Dalvey and Mr. Nigon each received an option to purchase 11,645 shares of common stock at an exercise price of $9.58. Refer to “Note 11 – Stock-Based Compensation” in the audited financial statements included in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of the assumptions used in calculating the award amount. |
Fiscal Year 2023 Director Compensation
| (2) The aggregate number of shares of restricted stock held by each of the directors listed in the table above as of December 31, 2023 was as follows: Dr. Buller, 8,431 shares of restricted stock; Mr. Dalvey, 9,325 shares of restricted stock. Dr. Furcht, Dr. Murphy or Mr. Nigon hold no shares of restricted stock. |
Fiscal Year 2023 Director Compensation
| (3) The aggregate number of stock options held by each of the directors listed in the table above as of December 31, 2023 was as follows: Dr. Buller, options to purchase 47,810 shares; Mr. Dalvey, options to purchase 67,513 shares; Dr. Furcht, options to purchase 72,825 shares; Dr. Murphy, options to purchase 37,945 shares; and Mr. Nigon, options to purchase 82,476 shares. |
Fiscal Year 2023 Director Compensation
BENEFICIAL OWNERSHIP OF COMMON STOCK The following table contains information regarding the beneficial ownership of Celcuity’s common stock as of March 12, 2024 (except as otherwise indicated) by (i) each person who is known by Celcuity to beneficially own more than 5% of the outstanding shares of our common stock; (ii) each director of Celcuity; (iii) each director nominee; (iv) each named executive officer of Celcuity; and (v) all executive officers and directors as a group. Unless otherwise noted, each person or group identified possesses sole voting and investment power with respect to such shares and the business address of each person is c/o Celcuity Inc., 16305 36th Avenue North, Suite 100, Minneapolis, MN 55446.
Fiscal Year 2023 Director Compensation
| Name of Beneficial Owner | Amount and Nature of Beneficial Ownership (1)(2) | Percent of Class (3) | | 5% Stockholders | | | | Commodore Capital Master LP (4) | 2,887,796 | 9.99% | | Growth Equity Opportunities 18 VGE, LLC (5) | 2,943,812 | 9.99% | | Soleus Private Equity Fund II, L.P. and affiliates (6) | 3,020,185 | 9.99% | | Venrock Healthcare Capital Partners III, L.P. and affiliates (7) | 2,873,275 | 9.99% | | Morgan Stanley (8) | 2,195,026 | 7.90% | | Perceptive Advisors LLC (9) | 1,481,300 | 5.33% | | Officers and Directors | | | | Richard E. Buller | 55,891 | * | | David F. Dalvey (10) | 301,838 | 1.08% | | Leo T. Furcht | 83,325 | * | | Vicky Hahne | 136,736 | * | | Lance G. Laing | 1,429,076 | 5.11% | | Polly A. Murphy | 35,445 | * | | Richard J. Nigon | 201,376 | * | | Brian F. Sullivan | 3,654,652 | 12.86% | | All directors and executive officers as a group (8 individuals) | 5,898,339 | 20.31% |
Fiscal Year 2023 Director Compensation
* less than 1%
Fiscal Year 2023 Director Compensation
| (1) The beneficial ownership reported in the table includes shares of common stock the beneficial owners have the right to acquire within 60 days of March 12, 2024 upon the exercise of stock options or warrants or conversion of preferred stock, subject to the Beneficial Ownership Limitation described in note 2 below. |
Fiscal Year 2023 Director Compensation
| (2) With respect to 5% stockholders other than Morgan Stanley and Perceptive Advisors LLC, the beneficial ownership shown above includes (a) the number of shares of common stock that may be acquired upon the conversion of shares of Series A Preferred Stock acquired pursuant to the Securities Purchase Agreement, dated May 15, 2022 by and among the Company and the purchasers named therein (the “Securities Purchase Agreement”), and (b) the number of shares of common stock that may be acquired upon exercise of warrants issued under the Securities Purchase Agreement, assuming any such conversions or exercises occur within 60 days of March 12, 2024; provided, however, that the maximum number of shares of common stock that may be acquired upon such conversions or exercises is limited such that the beneficial ownership of such stockholder and its affiliates will not exceed 9.99% (the “Beneficial Ownership Limitation”). |
Fiscal Year 2023 Director Compensation
With respect to officer and directors, the beneficial ownership shown above includes the number of shares of common stock the beneficial owners have the right to acquire within 60 days of March 12, 2024 upon the exercise of stock options or warrants, as follows: Dr. Buller, 47,810 shares; Mr. Dalvey, 67,513 shares; Dr. Furcht, 72,825 shares; Ms. Hahne, 120,179 shares; Dr. Laing, 179,076 shares; Dr. Murphy 30,445 shares; Mr. Nigon, 105,344 shares; Mr. Sullivan, 638,009 shares; and all directors and executive officers as a group, 1,261,201 shares.
Fiscal Year 2023 Director Compensation
| (3) Calculated based on 27,773,777 issued and outstanding shares of Celcuity common stock as of March 12, 2024, plus, for each beneficial owner, any securities that such person has the right to acquire within 60 days of March 12, 2024. |
Fiscal Year 2023 Director Compensation
| (4) In a Schedule 13G/A filed on February 14, 2024, Commodore Capital Master LP reported shared voting power and shared dispositive power over 2,492,886 shares of common stock as of December 31, 2023, including outstanding shares of common stock and shares of common stock issuable upon conversion of the Series A Preferred Stock or exercise of warrants, subject to the Beneficial Ownership Limitation described in Note 2 above. The Company has recalculated the Beneficial Ownership Limitation based on shares outstanding as of March 12, 2024, and the beneficial ownership reported in the table includes additional shares issuable upon conversion of Series A Preferred Stock or exercise of warrants held by Commodore Capital Master LP at December 31, 2023, but without giving effect to any transactions that may have been effected by Commodore Capital Master LP after such date. The reported ownership does not include additional shares of common stock that would be issuable to Commodore Capital Master LP upon conversion of Series A Preferred Stock or exercise of the warrants without giving effect to the Beneficial Ownership Limitation. Commodore Capital LP, a Delaware limited partnership (the “Firm”) is the investment manager to Commodore Capital Master LP. Michael Kramarz and Robert Egen Atkinson are the managing partners of the Firm and exercise investment discretion with respect to the shares reported herein. The address for Commodore Capital Master LP and the Firm is 444 Madison Avenue, Floor 35, New York, New York 10022. |
Fiscal Year 2023 Director Compensation
| (5) In a Schedule 13D/A filed on September 12, 2022, Growth Equity Opportunities 18 VGE, LLC (“GEO”) reported shared voting power and shared dispositive power over 1,520,001 shares of common stock as of September 1, 2022, including outstanding shares of common stock and shares of common stock issuable upon conversion of the Series A Preferred Stock or exercise of warrants, subject to the Beneficial Ownership Limitation described in Note 2 above. The Company has recalculated the Beneficial Ownership Limitation based on shares outstanding as of March 12, 2024, and the beneficial ownership reported in the table includes additional shares issuable upon conversion of Series A Preferred Stock or exercise of warrants held by GEO at September 12, 2022, but without giving effect to any transactions that may have been effected by GEO after such date. The reported ownership does not include additional shares of common stock that would be issuable to GEO upon conversion of Series A Preferred Stock or exercise of the warrants without giving effect to the Beneficial Ownership Limitation. NEA 18 Venture Growth Equity, L.P. (“NEA 18 VGE”) is the sole member of GEO; NEA Partners 18 VGE, L.P. (“NEA Partners 18 VGE”) is the sole general partner of NEA 18 VGE; and NEA 18 VGE GP, LLC (“NEA 18 VGE LLC” and, together with NEA Partners 18 VGE, the “Control Entities”) is the sole general partner of NEA Partners 18 VGE. Ali Behbahani (“Behbahani”), Carmen Chang (“Chang”), Anthony A. Florence, Jr. (“Florence”), Liza Landsman (“Landsman”), Mohamad H. Makhzoumi (“Makhzoumi”), Edward T. Mathers (“Mathers”), Scott D. Sandell (“Sandell”), Peter W. Sonsini (“Sonsini”), Paul Walker (“Walker”) and Rick Yang (“Yang”) (together, the “Managers”) are the managers of NEA 18 VGE LLC. The address of the principal business office of GEO, NEA 18 VGE, each Control Entity and Sandell is New Enterprise Associates, 1954 Greenspring Drive, Suite 600, Timonium, MD 21093. The address of the principal business office of Behbahani and Mathers is New Enterprise Associates, 5425 Wisconsin Avenue, Suite 800, Chevy Chase, MD 20815. The address of the principal business office of Chang, Makhzoumi, Sonsini, Walker and Yang is New Enterprise Associates, 2855 Sand Hill Road, Menlo Park, California 94025. The address of the principal business office of Florence and Landsman is New Enterprise Associates, 104 5th Avenue, 19th Floor, New York, NY 10001. |
Fiscal Year 2023 Director Compensation
| (6) In a Schedule 13G/A filed on February 9, 2024, Soleus Private Equity Fund II, L.P. (“Soleus PE”) and Soleus Capital Master Fund, L.P. (“Master Fund”) reported shared voting power and shared dispositive voting power over 2,623,890 shares of common stock as of December 31, 2023, including outstanding shares of common stock held by Soleus PE and/or Master Fund, and shares of common stock issuable upon conversion of the Series A Preferred Stock or exercise of warrants, subject to the Beneficial Ownership Limitation described in Note 2 above. The Company has recalculated the Beneficial Ownership Limitation based on shares outstanding as of March 12, 2024, and the beneficial ownership reported in the table includes additional shares issuable upon conversion of Series A Preferred Stock or exercise of warrants held by Soleus PE and/or Master Fund at December 31, 2023, but without giving effect to any transactions that may have been effected by Soleus PE and/or Master Fund after such date. The reported ownership does not include additional shares of common stock that would be issuable to Soleus PE and/or Master Fund upon conversion of Series A Preferred Stock or exercise of the warrants without giving effect to the Beneficial Ownership Limitation. Soleus Private Equity GP II, LLC (“Soleus GP”) is the general partner of Soleus PE, and Soleus PE GP II, LLC is the sole manager of Soleus GP. Mr. Guy Levy is the sole managing member of Soleus PE GP II, LLC. Soleus Capital, LLC is the general partner of Master Fund, and Soleus Capital Group, LLC is the sole managing member of Soleus Capital, LLC. Mr. Guy Levy is the sole managing member of Soleus Capital Group, LLC. The address of the above referenced entities and persons is 104 Field Point Road, 2nd Floor, Greenwich, CT 06830. |
Fiscal Year 2023 Director Compensation
| (7) In a Schedule 13G/A filed on February 14, 2024, Venrock Healthcare Capital Partners III, L.P., VHCP Co-Investment Holdings III, LLC, and Venrock Healthcare Capital Partners EG, L.P. (collectively, the Venrock Entities) reported shared voting power and shared dispositive power over 2,476,980 shares of common stock as of December 31, 2023, consisting of (i) 651,198 shares held by Venrock Healthcare Capital Partners III, L.P.; (ii) 65,147 shares held by VHCP Co-Investment Holdings III, LLC; and (iii) 1,760,635 shares held by Venrock Healthcare Capital Partners EG, L.P. The reported ownership included outstanding shares of common stock and shares of common stock issuable upon conversion of Series A Preferred Stock or exercise of warrants, subject to the Beneficial Ownership Limitation described in Note 2 above. The Company has recalculated the Beneficial Ownership Limitation based on shares outstanding as of March 12, 2024, and the beneficial ownership reported in the table includes additional shares issuable upon conversion of the Series A Preferred Stock or exercise of warrants held by the Venrock Entities at December 31, 2023, but without giving effect to any transactions that may have been effected by the Venrock Entities after such date. The reported ownership does not include an additional shares of common stock that would be issuable to the Venrock Entities upon conversion of Series A Preferred Stock or exercise of the warrants without giving effect to the Beneficial Ownership Limitation. VHCP Management III, LLC is the general partner of Venrock Healthcare Capital Partners III, L.P. and the manager of VHCP Co-Investment Holdings III, LLC. VHCP Management EG, LLC is the general partner of Venrock Healthcare Capital Partners EG, L.P. Dr. Bong Koh and Nimish Shah are the voting members of VHCP Management III, LLC and VHCP Management EG, LLC. The address of the above referenced entities and persons is 7 Bryant Park, 23rd Floor, New York, NY 10018. |
Fiscal Year 2023 Director Compensation
| (8) In a Schedule 13G/A filed on February 12, 2024, Morgan Stanley reported shared voting power over 2,118,801 shares of common stock and shared dispositive power over 2,195,026 shares of common stock as of December 31, 2023. The address of Morgan Stanley is 1585 Broadway, New York, New York, 10036. |
Fiscal Year 2023 Director Compensation
| (9) In a Schedule 13G/A filed on February 12, 2024, Perceptive Advisors LLC reported shared voting power and shared dispositive power over 1,481,300 shares of common stock as of December 31, 2023. The address of Perceptive Advisors LLC is 51 Astor Place, 10th Floor, New York, NY 10003. |
Fiscal Year 2023 Director Compensation
| (10) Mr. Dalvey’s beneficial ownership includes 225,000 shares of common stock owned by Brightstone Venture Capital Fund, LP, of which Mr. Dalvey is the General Partner. |
Fiscal Year 2023 Director Compensation
EXECUTIVE OFFICERS The following table identifies our current executive officers, the positions they hold, and their current age. Our executive officers are appointed by our Board of Directors to hold office until their successors are elected or their earlier death, resignation or removal.
Fiscal Year 2023 Director Compensation
| Name | Age | Positions | | Brian F. Sullivan | 62 | Chairman of the Board and Chief Executive Officer | | Lance G. Laing | 62 | Chief Science Officer, Vice President, Secretary and Director | | Vicky Hahne | 57 | Chief Financial Officer |
Fiscal Year 2023 Director Compensation
For biographical information about Mr. Sullivan and Dr. Laing, please refer to Proposal 1 entitled “Election of Directors.” Biographical information about Ms. Hahne is as follows:
Employment Agreements, Severance and Change in Control Agreements
Employment Agreements, Severance and Change in Control Agreements We have not entered into employment agreements, severance agreements or change-of-control agreements with our named executive officers. Mr. Sullivan, Dr. Laing, and Ms. Hahne have each entered into a confidentiality, assignment of inventions and non-competition agreement with us, which provides, among other things, that the named executive officer will not engage in a competitive business or solicit our employees or consultants for a period of 24 months after termination of employment. Summary Compensation Table The following table summarizes the compensation for fiscal 2023 and 2022 of Celcuity’s named executive officers:
Employment Agreements, Severance and Change in Control Agreements
| Name and Principal Position | Year | Salary(1) | Option Awards (2)(3)(4) | Non-Equity Incentive Plan Compensation | Total | | Brian F. Sullivan | 2023 | $209,615 | $1,260,000 | $268,500 | $1,738,115 | | Chairman and Chief Executive Officer | 2022 | $105,769 | $1,707,972(5) | $- | $1,813,741(5) | | Lance G. Laing | 2023 | $312,577 | $1,094,295 | $76,970 | $1,483,842 | | Chief Science Officer | 2022 | $325,385 | $351,807(5) | $72,240(5) | $749,431(5) | | Vicky Hahne | 2023 | $226,769 | $617,155 | $54,819 | $898,743 | | Chief Financial Officer | 2022 | $210,000 | $199,463(5) | $39,990(5) | $449,453(5) |
Pay Versus Performance
Pay Versus Performance We are providing the following information about the relationship between executive compensation actually paid to our named executive officers (NEOs) and certain financial performance measures of the Company for each of the last three fiscal years, in accordance with Item 402(v) of Regulation S-K. For purposes of this disclosure, “compensation actually paid” to our NEOs is determined by making various adjustments to the total compensation amounts reported in the Summary Compensation Table. The table below summarizes compensation amounts reported in our Summary Compensation Table, as well as the adjusted amounts of “compensation actually paid” for fiscal 2023, 2022 and 2021. For our NEOs other than our principal executive officer (PEO), compensation is reported as an average. The following table sets forth information concerning the compensation of our NEOs for fiscal 2023, 2022 and 2021, and certain financial performance measures of the Company for each fiscal year:
Pay Versus Performance
| Year (1) | Summary Compensation Table (SCT) Total for PEO | Compensation Actually Paid (CAP) to PEO (3) | Average SCT Total for Non-PEO NEOs | Average CAP to Non-PEO NEOs (3) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return (TSR) (4) | Net Loss (thousands) | | 2023 | $1,738,115 | $2,464,675 | $1,191,293 | $1,501,865 | $159.06 | $(63,779) | | 2022(2) | $1,813,741 | $2,493,683 | $599,442 | $700,393 | $152.95 | $(40,370) | | 2021 | $1,325,285 | $1,357,562 | $733,334 | $757,811 | $144.00 | $(29,605) |
Pay Versus Performance
| (1) During 2023 and 2022, Brian F. Sullivan was our PEO, and Lance G. Laing and Vicky Hahne were our Non-PEO NEOs. |
Pay Versus Performance
| (2) See footnote 5 to the Summary Compensation Table. |
Pay Versus Performance
| (3) In order to calculate the “compensation actually paid” (CAP) to our NEOs, we are required under the SEC rules to subtract from the total compensation amount in the summary compensation table (SCT) the grant date fair value of equity awards (reflected in column B in the table below), and add back the following (reflected in column C in the table below): (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in the same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. In addition, if any equity award has been modified during a fiscal year, the changes in fair value included pursuant to the adjustments described above must take into account the excess fair value, if any, of any such modified award over the fair value of the original award as of the date of such modification. |
Pay Versus Performance
| | SCT Total | Options Deducted (a) | Options Added (a) | Total CAP | | | (A) | (B) | (C) | A – B + C | | PEO | | | | | | 2023 | $1,738,115 | $1,260,000 | $1,986,560 | $2,464,675 | | 2022(b) | $1,813,741 | $1,707,972 | $2,387,914 | $2,493,683 | | Average for Non-PEO NEOs | | | | | | 2023 | $1,191,293 | $855,725 | $1,166,297 | $1,501,865 | | 2022(b) | $599,442 | $275,635 | $376,586 | $700,393 |
Pay Versus Performance
| a. | The fair value of stock options reported for CAP purposes in columns (B) and (C) is estimated using a Black-Scholes option pricing model in accordance with the SEC rules. This model uses both historical data and current market data to estimate the fair value of options and requires several assumptions. |
Pay Versus Performance
| b. | See footnote 5 to the Summary Compensation Table. |
Pay Versus Performance
| (4) TSR represents the value, as of the end of each fiscal year, of $100 invested in our common stock at the closing price on December 31, 2020, the last trading day before fiscal 2021. The per-share market price of our common stock on such date was $9.16, and the per-share market prices on the last trading days of fiscal 2021, and 2022 and 2023 were $13.19, and $14.01, and $14.57, respectively. No dividends or other distributions have been made with respect to our common stock. |
Analysis of the Information Presented in the Pay versus Performance Table
Analysis of the Information Presented in the Pay versus Performance Table As required by Item 402(v) of Regulation S-K, the Company is providing the following descriptions of the relationships between information presented in the Pay versus Performance table. The following charts compare the amount of CAP to our PEO and the average CAP to our Non-PEO NEOs as a group (excluding our PEO) to Net Income and cumulative total shareholder return (TSR) for the three years presented in the tables. We are a clinical-stage biotechnology company focused on the development of targeted therapies for treatment of multiple solid tumor indications. We have not generated any revenue from sales to date, and we continue to incur significant research and development and other expenses related to our ongoing operations. Due to the company’s operating stage and business needs, and our intent to align the interests of executives with the long-term interests of stockholders, a significant portion of executive compensation over the past three years has been paid in equity rather than cash. The CAP calculation is impacted by the proportion of compensation being delivered in the form of equity awards and reflects that the market price of our common stock increased by approximately 59% from December 31, 2020 to December 31, 2023. The Company believes that the use of equity awards serves to align our NEOs’ outstanding and unvested awards with shareholders’ interests in the long term. However, the CAP for our NEOs may not be correlated with the Company’s TSR or net income (loss) for any given year, including the years set forth in the table, as our core business strategies are implemented over a period of years, and the market price of our common stock is affected by many factors and may not reflect the achievement of milestones under our performance-based incentive pay program. Employee Benefit Plans 2017 Stock Incentive Plan. Our Amended and Restated 2017 Stock Incentive Plan (the “2017 Plan”) was approved by our stockholders at the Company’s annual meeting on May 14, 2020. The Company initially reserved a total of 750,000 shares for issuance under the 2017 Plan. At the Annual Meeting held on May 12, 2021, May 12, 2022, and May 11, 2023, the stockholders approved one-time, share increases of 500,000, 500,000 and 1,500,000 each year, respectively, for a total of 2,500,000 increase, to the number of shares reserved for issuance under the 2017 Plan. As of December 31, 2023, options to purchase 2,666,638 shares were outstanding and 1,019,149 shares remain available to issue. The number of shares reserved for issuance under the 2017 Plan increases automatically on each January 1 through January 1, 2027 by the number of shares equal to 1.0% of the aggregate number of outstanding shares of the Company’s common stock as of the immediately preceding December 31. However, the Board may reduce the amount of the increase in any particular year, and the Board decided that no increase would occur on January 1, 2019. The Board did allow automatic increases in the number of shares reserved for issuance by 102,540, 102,998, 149,189, 216,673, and 255,060 shares on January 1, 2020, 2021, 2022, 2023, and 2024, respectively, for a total of 1,274,209 shares remaining under the 2017 Plan as of January 1, 2024. The maximum permitted term of options granted under the 2017 Plan is ten years. The 2017 Plan provides for share options, restricted stock awards, stock appreciation rights, restricted stock units, performance awards and stock bonuses. Our 2017 Plan provides that, in the event of specified types of mergers or consolidations, a sale, lease, or other disposition of all or substantially all of our assets or other corporate transactions, outstanding awards under our 2017 Plan may be assumed or replaced by any surviving or acquiring corporation; the surviving or acquiring corporation may substitute similar awards for those outstanding under our 2017 Plan; outstanding awards may be settled for the full value of such outstanding award (whether or not then vested or exercisable) in cash, cash equivalents, or securities (or a combination thereof) of the successor entity with payment deferred until the date or dates the award would have become exercisable or vested; or outstanding awards may be terminated for no consideration. Our Board or its Compensation Committee has the discretion to provide that a stock award under our 2017 Plan will immediately vest as to all or any portion of the shares subject to the stock award at the time of a corporate transaction or in the event a participant’s service with us or a successor entity is terminated actually or constructively within a designated period following the occurrence of the transaction. Stock awards held by participants under our 2017 Plan will not vest automatically on such an accelerated basis unless specifically provided in the participant’s applicable award agreement. In the event of a corporate transaction, the vesting of all awards granted to non-employee directors shall accelerate and such awards shall become exercisable (as applicable) in full upon the consummation of the corporate transaction. At the 2024 Annual Meeting, we are proposing certain amendments to our 2017 Plan. See Proposals No. 5 and 6 in this Proxy Statement. 2017 Employee Stock Purchase Plan. Our 2017 Employee Stock Purchase Plan (the “ESPP”) was adopted by our Board on September 6, 2017 and approved by our stockholders at the Company’s annual meeting on May 10, 2018. The Company initially reserved a total of 100,000 shares for issuance under the ESPP. As of December 31, 2023, 119,065 shares had been issued and 266,635 remain available for issuance. The number of shares reserved for issuance under the ESPP increases automatically on the first day of each fiscal year by the number of shares equal to 0.5% of the total outstanding number of shares of common stock. However, the Board may reduce the amount of the increase in any particular year, and the Board decided that no increase would occur on January 1, 2019. The Board did allow an automatic increase in the number of shares reserved for issuance by 51,270, 51,499, 74,594, 108,337, and 127,530 shares on January 1, 2020, 2021, 2022, 2023, and 2024, respectively, for a total of 394,165 shares remaining under the ESPP as of January 1, 2024. The ESPP provides participating employees with an opportunity to purchase shares of the Company’s common stock at a discount through payroll deductions. The ESPP is available to all employees unless they are employed for less than 20 hours per week or own 5% or more of the total combined voting power or value of the Company’s common stock. The ESPP is administered using overlapping 24 month offering periods, referred to as an Offering Period. Each Offering Period has four six-month purchase periods. A new Offering Period and purchase period begin every six months on May 1 and November 1 of each year. Participating employees may purchase common stock, on a voluntary after tax-basis, at a price equal to 85% of the fair market value of a share of common stock on either the offering date or the purchase date, whichever is lower. If the purchase date has a lower price, the employee will automatically be placed in the Offering Period beginning immediately after the purchase date. If the Company is dissolved or liquidated, any purchase period or Offering Period will terminate immediately prior to the dissolution or liquidation. If we sell substantially all of our assets to another company or engage in a merger or consolidation where our stockholders will own less than 50% of shares of stock in the resulting company, the ESPP will either be assumed by the successor entity or a new purchase date will be set before the transaction is completed, after which the ESPP will terminate.
Analysis of the Information Presented in the Pay versus Performance Table
2012 Equity Incentive Plan. Prior to adopting the 2017 Plan, our 2012 Equity Incentive Plan (the “2012 Plan”) was adopted by the board of governors and approved by the members of Celcuity LLC on August 10, 2012 and was subsequently amended on November 12, 2012. We had originally reserved 625,000 shares for issuance under the 2012 Plan. As of December 31, 2023, options to purchase 148,754 of these shares were outstanding. We have ceased granting any additional awards under the 2012 Plan. However, any outstanding options granted under the 2012 Plan will remain outstanding subject to the terms of our 2012 Plan and the related option agreements until such outstanding options are exercised or until they terminate or expire by their terms. In the event of our merger, consolidation, sale of substantially all assets, liquidation or dissolution or other change of control, the 2012 Plan provides that the Board may accelerate the exercisability of awards, terminate the 2012 Plan and unexercised awards, continue the 2012 Plan with respect to outstanding awards, replace or exchange incentive awards for similar securities of the successor, substitute the awards with similar awards of the successor or provide for cash payment for outstanding awards (net of exercise price). Retirement Savings Plans. Celcuity maintains an employee benefit plan qualified under Section 401(k) of the Internal Revenue Code of 1986, as amended. In 2023, the Company matched 100% of a participant’s contributions on the first 2% of eligible compensation and 50% of the participant’s contributions on the next 4% of eligible compensation. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS The following table summarizes equity securities authorized for issuance under our equity compensation plans as of December 31, 2023:
Analysis of the Information Presented in the Pay versus Performance Table
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) (1)(2) | | Equity compensation plans approved by stockholders | 2,815,392 | $7.95 | 1,285,784 | | Equity compensation plans not approved by stockholders | - | - | - | | Total | 2,815,392 | $7.95 | 1,285,784 |
Analysis of the Information Presented in the Pay versus Performance Table
| (1) Includes 1,019,149 shares of common stock available for issuance under the 2017 Plan and 266,635 shares of common stock available for issuance under the ESPP as of December 31, 2023. |
Analysis of the Information Presented in the Pay versus Performance Table
| (2) Warrants to purchase 13,011,520 shares of Company common stock also remain outstanding. These warrants were not issued as part of an equity compensation plan and are not reflected in this table. |
Analysis of the Information Presented in the Pay versus Performance Table
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Except as described below, since January 1, 2022, there were no related party transactions arising or existing requiring disclosure under applicable Nasdaq Listing Rules or SEC rules and regulations.