UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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:
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| Preliminary Proxy Statement | | |
| Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
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| Definitive Proxy Statement | | |
| Definitive Additional Materials | | |
| Soliciting Material under Rule 14a-12 | | |
☐ 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 Rule 14a-12
CURIS, 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)all boxes that apply):
☒ No fee required.
☐ Fee paid previously with preliminary materials.
☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
CURIS, INC.
NOTICE OF ANNUALSPECIAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 23,SEPTEMBER 26, 2023
NOTICE IS HEREBY GIVEN that the annual meetingSpecial Meeting of stockholdersStockholders of Curis, Inc. (the “Special Meeting”), will be held exclusively online via the Internet as a virtual web conference at www.virtualshareholdermeeting.com/CRIS2023CRIS2023SM on May 23,2023September 26, 2023 at 10:00 a.m. Eastern Time for the purpose of considering and voting upon the following matters:
1.To elect two Class IIIadopt and approve an amendment to our Restated Certificate of Incorporation, as amended, to increase the number of authorized shares of our capital stock from 232,812,500 to 460,625,000 and the number of authorized shares of our common stock from 227,812,500 to 455,625,000 (the “Authorized Shares Proposal”);
2. To adopt and approve an amendment to our Restated Certificate of Incorporation, as amended, to effect a reverse stock split of our issued shares of common stock, by a ratio of not less than 1-for-5 and not more than 1-for-25, and a proportionate reduction in the number of authorized shares of capital stock and common stock, such ratio and the implementation and timing of such reverse stock split to be determined in the discretion of our board of directors for a termwithout further approval or authorization of three years;our stockholders (the “Reverse Stock Split Proposal”); and
2.3. To approve an advisory vote on executive compensation;
3.To recommend, on an advisory basis,a proposal to adjourn the frequencySpecial Meeting to a later date or dates, if necessary or appropriate, to permit further solicitation of future executive compensation advisory votes;
4.To ratifyproxies in the appointmentevent that there are insufficient votes for, or otherwise in connection with, the adoption and approval of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023; and
5.To transact any other business that may properly come beforeAuthorized Shares Proposal or the meeting or any adjournment thereof.Reverse Stock Split Proposal.
The board of directors has fixed the close of business on March 31,August 17, 2023 as the record date for the determination of stockholders entitled to notice of and to vote at the meetingSpecial Meeting and at any adjournments thereof. This year’s annual meetingThe Special Meeting will be conducted as a virtual meeting of stockholders, which will be held exclusively online via the Internet as a virtual web conference. You will be able to attend the annual meetingSpecial Meeting online, vote your shares online during the annual meetingSpecial Meeting and submit your questions online during the annual meeting by visiting www.virtualshareholdermeeting.com/CRIS2023.CRIS2023SM. There will not be a physical meeting location and you will not be able to attend the annual meetingSpecial Meeting in person. Your vote is very important to us. Whether or not you plan to attend the annual meetingSpecial Meeting online, it is important for your shares shouldto be represented and voted.
Instead of mailing aA printed copy of our proxy materials, to all of our stockholders, we provide access to these materials to many of our stockholders via the Internet, in accordance with rules adopted by the Securities and Exchange Commission. If you received onlyincluding a Notice of Internet Availability of Proxy Materials, or Notice, by mail or e-mail, you will not receive a paper copy of the proxy materials unless you request one. Instead, the Notice will provide you with instructions on how to access and view the proxy materials on the Internet. The Notice will also instruct you as to how you may access your proxy card, to vote over the Internet or by telephone. If you received a Notice by mail or e-mail and would like to receive a paper copy of our proxy materials, free of charge, please follow the instructions included in the Notice.
The Notice of Internet Availability of Proxy Materials is being mailed to our stockholders on or about April 11,August 18, 2023 and sent by e-mail to our stockholders who have opted for such means of delivery on or about April 11,August 18, 2023.
PleaseIf you are a stockholder of record, you may vote in one of the following ways:
1. You may submit a proxy to vote over the Internet. If you have Internet access, you may submit a proxy to vote from any location in the world at www.proxyvote.com, by following the instructions on that site or on the “Submit a Proxy to Vote by Internet” instructions on the enclosed proxy card.
2. You may submit a proxy to vote by telephone. You may submit a proxy to vote by calling 1-800-690-6903 and following the instructions provided, or by following the “Submit a Proxy to Vote by Phone” instructions on the enclosed proxy card.
3. You may submit a proxy to vote by mail. If you received a printed copy of the proxy materials by mail and would like to submit a proxy to vote by mail, you need to complete, date and sign the proxy card that
accompanies this proxy statement and promptly mail it in the enclosed postage-prepaid envelope. You do not need to put a stamp on the enclosed envelope if you mail it in the United States. The persons named in the proxy card will vote the shares you own in accordance with your instructions on the proxy card you mail. If you sign and return the proxy card, but do not give any instructions on a particular matter described in this proxy statement, the persons named in the proxy card will vote the shares you own in accordance with the recommendations of our board of directors.
4. You may vote your shares online while virtually attending the Special Meeting. You will be able to attend the Special Meeting online, vote your shares online during the Special Meeting and submit your questions online during the Special Meeting by visiting www.virtualshareholdermeeting.com/CRIS2023SM. You will need your control number included on your proxy overcard in order to be able to vote during the Internet,Special Meeting.
If your shares are held in “street name,” that is, held for your account by phonea bank, brokerage firm or by mail. other nominee, you will receive instructions from the holder of record that you must follow to submit a proxy to vote your shares.
You may revoke your proxy at any time before the annual meetingSpecial Meeting by following the procedures described in the proxy statement. Further information about how to attend the annual meetingSpecial Meeting online, vote your shares online during the annual meetingSpecial Meeting and submit your questions online during the annual meetingSpecial Meeting is included in the accompanying proxy statement.
All stockholders are cordially invited to attend the virtual annual meeting.Special Meeting.
By Order of the Board of Directors,
James E. Dentzer
President and Chief Executive Officer
Lexington, Massachusetts
April 11,August 18, 2023
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUALSPECIAL MEETING ONLINE, WE URGE YOU TO SUBMIT YOUR PROXY TO VOTE YOUR SHARES BY SUBMITTING YOUR PROXY OVER THE INTERNET OR BY TELEPHONE, OR TO COMPLETE, DATE, SIGNBY COMPLETING, DATING, SIGNING AND RETURNRETURNING THE ENCLOSED PROXY CARD IN THE ACCOMPANYING ENVELOPE. NO POSTAGE NEED BE AFFIXED IF THE PROXY CARD IS MAILED IN THE UNITED STATES.
TABLE OF CONTENTS
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Pay Versus Performance Disclosure | |
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PROPOSAL 3 — ADVISORY VOTE ON THE FREQUENCY OF FUTURE EXECUTIVE COMPENSATIONADJOURNMENT PROPOSAL ADVISORY VOTES
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PROPOSAL 4 — RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLICACCOUNTING FIRM
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CURIS, INC.
128 Spring Street, Building C – Suite 500
Lexington, Massachusetts 02421
PROXY STATEMENT FOR ANNUALSPECIAL MEETING OF STOCKHOLDERS
To Be Held on May 23,September 26, 2023
This proxy statement is furnished in connection with the solicitation by the board of directors of Curis, Inc. of proxies for use at the annual meetingSpecial Meeting of stockholdersStockholders (the “Special Meeting”), to be held virtually on May 23,September 26, 2023 at 10:00 a.m. Eastern Time and at any adjournments thereof. The annual meeting of stockholdersSpecial Meeting will be held exclusively online via the Internet as a virtual web conference at www.virtualshareholdermeeting.com/CRIS2023CRIS2023SM.
Except where the context otherwise requires, references to “Curis,” “we,” “us,” “our,” and similar terms refer to Curis, Inc. and its subsidiaries. We include our website address (www.curis.com) in this proxy statement only as an inactive textual reference and do not intend it to be an active link to our website. The contents of our website are not incorporated into this proxy statement.
Important Notice Regarding the Availability of Proxy Materials for
the AnnualSpecial Meeting of Stockholders to be Held on May 23,September 26, 2023:
The proxy statement is available at www.proxyvote.com.
We will upon writtenmail, or oral requestsend by e-mail to our stockholders who have opted for such means of any stockholder, furnish copiesdelivery, the Notice of our 2022 annual report to stockholders, except for exhibits, without charge. Please address all such requests to us at 128 Spring Street, Building C – Suite 500, Lexington, Massachusetts 02421, Attention: Secretary, or telephone: (617) 503-6500.
In accordance with Securities and Exchange Commission, or SEC, rules, instead of mailing a printed copy of our proxy materials to each stockholder of record, we are furnishing the proxy materials, includingSpecial Meeting, this proxy statement our 2022 annual report and thea proxy card, for the 2023 annual meeting, to many of our stockholders of record as of the record date via the Internet. We will send the Notice of Internet Availability of Proxy Materials, or Notice, to these stockholders on or about April 11,August 18, 2023. The Notice contains instructions for accessing and reviewing our proxy materials as well as instructions for voting your proxy via the Internet. If you prefer to receive printed copies of the proxy materials, you can request printed copies of the proxy materials by Internet, telephone or e-mail. If you choose to receive the print materials by mail, you can either (i) complete, date, sign and return the proxy card, (ii) vote via the Internet in accordance with the instructions on the proxy card or (iii) vote via telephone (toll free) in the United States or Canada in accordance with the instructions on the proxy card. Voting by Internet or telephone must be completed by 11:59 P.M. Eastern Time on May 22, 2023. If you choose not to receive printed copies of the proxy materials, you can vote via the Internet in accordance with the instructions contained in the Notice.
If you received a printed copy of the proxy materials, included with such copy is a proxy card or a voter instruction card for the annual meeting.
INFORMATION ABOUT THE ANNUALSPECIAL MEETING AND VOTING
How will the annual meetingSpecial Meeting be held?
This year’s annual meetingThe Special Meeting will be conducted as a live virtual meeting of stockholders. We will host the annual meeting livestockholders online via webcast. You will be able to attend the annual meetingSpecial Meeting online, vote your shares online during the annual meetingSpecial Meeting and submit your questions online during the annual meetingSpecial Meeting by visiting www.virtualshareholdermeeting.com/CRIS2023.CRIS2023SM. There will not be a physical meeting location and you will not be able to attend the annual meetingSpecial Meeting in person. The webcast will start at 10:00 a.m., Eastern Time, on May 23,September 26, 2023. You will need the control number included on your Noticeproxy card or proxy cardvoting instruction form in order to be able to enter the annual meetingSpecial Meeting online. Instructions on how to attend and participate online, including how to demonstrate proof of stock ownership, are posted at www.virtualshareholdermeeting.com/CRIS2023.CRIS2023SM. Information contained on this website is not incorporated by reference into this proxy statement or any other report we file with the SEC.
Online check-in will begin at 9:45 a.m., Eastern Time, on May 23,September 26, 2023, and you should allow ample time for the online check-in proceedings. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number posted at www.virtualshareholdermeeting.com/CRIS2023 on the meeting date.
Our virtual meeting will be governed by our Rules of Conduct and Procedures, which will be posted at www.virtualshareholdermeeting.com/CRIS2023CRIS2023SM in advance of the meeting. We have designed the virtual annual meetingSpecial Meeting to provide the same rights and opportunities to participate as stockholders would have at an in-person meeting, including the right to vote and ask questions through the virtual meeting platform.
What is the purpose of the annual meeting?Special Meeting?
At the annual meeting,Special Meeting, stockholders will consider and vote on the following matters:
1.To elect two Class III directors for a termadopt and approve an amendment to our Restated Certificate of three years;Incorporation, as amended, to increase the number of authorized shares of our capital stock from 232,812,500 to 460,625,000 and the number of authorized shares of our common stock from 227,812,500 to 455,625,000 (the “Authorized Shares Proposal”);
2.To adopt and approve an amendment to our Restated Certificate of Incorporation, as amended, to effect a reverse stock split of our issued shares of common stock, by a ratio of not less than 1-for-5 and not more than 1-for-25, and a proportionate reduction in the number of authorized shares of capital stock and common stock, such ratio and the implementation and timing of such reverse stock split to be determined in the discretion of our board of directors without further approval or authorization of our stockholders (the “Reverse Stock Split Proposal”); and
3. To approve an advisory vote on executive compensation;
3.To recommend, on an advisory basis,a proposal to adjourn the frequencySpecial Meeting to a later date or dates, if necessary or appropriate, to permit further solicitation of future executive compensation advisory votes;
4.To ratifyproxies in the appointmentevent that there are insufficient votes for, or otherwise in connection with, the adoption and approval of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023; and
5.To transact any other business that may properly come beforeAuthorized Shares Proposal or the meeting or any adjournment thereof.Reverse Stock Split Proposal (the “Adjournment Proposal”).
Who can vote at the annual meeting?Special Meeting?
To be entitled to vote on the above matters, you must have been a stockholder of record at the close of business on March 31,August 17, 2023, the record date for the annual meeting.Special Meeting. The number of shares entitled to vote at the meeting is 96,617,898117,704,554 shares of our common stock, which is the number of shares that were outstanding on the record date.
How many votes do I have?
Each share of our common stock that you own on the record date entitles you to one vote on each matter that is voted on.
Is my vote important?
Your vote is important regardless of how many shares you own. Please take the time to read the instructions below and submit your proxy to vote. Choose the method of votingproxy submission that is easiest and most convenient for you and please castsubmit your proxy to vote as soon as possible.
How do I vote?
Stockholder of record: Shares registered in your name. If you are a stockholder of record, that is, your shares are registered in your own name, not in “street name” by a bank or brokerage firm, then you have the right to grant your proxy or to vote at the Special Meeting and you can submit a proxy to vote or vote (as applicable) in any one of the following ways:
1.You may submit a proxy to vote over the Internet. If you have Internet access, you may submit a proxy to vote your shares from any location in the world at www.proxyvote.com, by following the instructions on that site or on the “Vote“Submit a Proxy to Vote by Internet” instructions on the Notice or the enclosed proxy card.
2.You may submit a proxy to vote by telephone. You may submit a proxy to vote your sharesby proxy by calling 1-800-690-6903 and following the instructions provided, or by following the “Vote“Submit a Proxy to Vote by Phone” instructions on the enclosed proxy card.
3.You may submit a proxy to vote by mail. If you received a printed copy of the proxy materials by mail and would like to submit a proxy to vote by mail, you need to complete, date and sign the proxy card that accompanies this proxy statement and promptly mail it in the enclosed postage-prepaid envelope to vote.envelope. You do not need to put a stamp on the enclosed envelope if you mail it in the United States. The persons named in the proxy card will vote the shares you own in accordance with your instructions on the proxy card you mail. If you return and sign the proxy card, but do not give any instructions on a particular matter described in this proxy statement, the persons named in the proxy card will vote the shares you own in accordance with the recommendations of our board of directors.
4.You may vote your shares online while virtually attending the annual meeting.Special Meeting. This year’s annual meeting is a virtual annual meeting of stockholders. There will not be a physical meeting location and you will not be able to attend the annual meeting in person. You will be able to attend the annual meetingSpecial Meeting online, vote your shares online during the annual meetingSpecial Meeting and submit your questions online during the annual meeting by visiting
during the Special Meeting by visiting www.virtualshareholdermeeting.com/CRIS2023.CRIS2023SM. You will need your control number included on your Notice or proxy card in order to be able to vote during the annual meeting.Special Meeting.
Submitting a proxy to vote by Internet or telephone must be completed by 11:59 p.m. Eastern Time on September 25, 2023.
Beneficial owner: Shares held in “street name.” If the shares you own are held in “street name” by a bank or brokerage firm, then you may vote:vote or submit a proxy to vote as follows:
1. Submit a ProxyOver the Internet or by Telephone. You will receive instructions from your bank, brokerage firm or other nominee if they permit submission of proxies by Internet or telephone voting.telephone. You should follow those instructions.
2. Submit a Proxy By Mail. You will receive instructions from your bank, brokerage firm or other nominee explaining how you can submit a proxy to vote your shares by mail. You should follow those instructions.
3. Vote Online While Virtually Attending the AnnualSpecial Meeting. You will receive instructions from your bank, brokerage firm or other nominee explaining how you can vote your shares online during the annual meeting.Special Meeting. You will need your control number included on your Notice or proxy cardvoting instruction form in order to demonstrate proof of beneficial ownership and to be able to vote during the annual meeting.Special Meeting. Instructions on how to attend and participate online, including how to demonstrate proof of stock ownership, are posted at www.virtualshareholdermeeting.com/CRIS2023.CRIS2023SM.
Will my shares be voted if I do not return my proxy?proxy?
If your shares are registered directly in your name, your shares will not be voted if you do not submit a proxy to vote over the Internet or by telephone, by returningreturn your proxy by mail or vote online at the annual meeting.Special Meeting.
If your shares are held in “street name,” your bank, brokerage firm or other nominee may under certain circumstances vote your shares if you do not return your voting instructions. Banks, brokerage firmsThe Authorized Shares Proposal, Reverse Stock Split Proposal and the Adjournment Proposal are matters on which banks, brokers or other nominees can vote customers’ unvotedare expected to have discretionary voting authority under applicable stock exchange rules. If your shares on discretionary matters, butare held by a bank, brokerage firm or other nominee in street name and you do not timely provide voting instructions with respect to your shares, we expect that your bank, brokerage firm or other nominee will not be allowedhave the authority to vote your shares with respect to certain nondiscretionary items. If you do not return voting instructions to your bank, brokerage firm or other nominee to vote your shares, your bank, brokerage firm or other nominee may, on discretionary matters, either vote your shares or leave your shares unvoted.
Your bank, brokerage firm or other nominee cannot vote your shares on any matter that is considered nondiscretionary. Proposal 1 - the election of directors, Proposal 2 - a non-binding advisory vote on executive compensation, and Proposal 3 – a non-binding advisory vote on the frequency of future executive compensation advisory votes are considered nondiscretionary matters. If you do not instruct your bank, brokerage firm or other nominee how to vote with respect to these matters, your bank, brokerage firm or other nominee may not vote with respect to these proposalsAuthorized Shares Proposal, Reverse Stock Split Proposal and those votes will be counted as “broker non-votes.” “Broker non-votes” are shares that are held in “street name” by a bank, brokerage firm or other nominee that indicates on its proxy that it does not have or did not exercise discretionary authority to vote on a particular matter. Proposal 4 -the ratification of the appointment of our independent registered public accounting firm is considered a discretionary matter, and your bank, brokerage firm or other nominee may be able to vote on this matter even if it does not receive instructions from you, so long as it holds your shares in its name. We encourage you to provide voting instructions to your bank, brokerage firm or other nominee. This ensures that your shares will be voted at the annual meeting according to your instructions. You should receive directions from your bank, brokerage firm or other nominee about how to submit your voting instructions to them.Adjournment Proposal.
Can I change my vote after I have mailed my proxy card?
Yes. If you are a stockholder of record, you can revoke your proxy at any time before it is exercised by doing any one of the following things:
•signing and returning another proxy card with a later date;
•giving our corporate secretary written notice before the annual meetingSpecial Meeting that you want to revoke your proxy; or
•voting online while virtually attending the annual meeting.Special Meeting.
Your virtual attendance at the annual meetingSpecial Meeting alone will not revoke your proxy. Any mailed revocation sent to Curis must include the stockholder’s name and must be received by the day prior to the annual meetingSpecial Meeting to be effective.
If you submit a proxy to vote your shares over the Internet prior to the annual meeting,Special Meeting, only your latest Internet voteproxy submitted prior to the annual meetingSpecial Meeting will be counted at the annual meeting.Special Meeting.
If you own shares in “street name,” your bank or brokerage firm should provide you with appropriate instructions for changing your vote.
What constitutes a quorum?
In order for business to be conducted at the meeting, a quorum must be present. A quorum consists of the holders of a majority of the shares of common stock outstanding and entitled to vote at the meeting, that is, at least 48,308,95058,852,278 shares.
Shares of our common stock represented in person or by proxy (including broker non-votes and shares that are represented in person or by proxy but abstain or do not vote with respect to one or more of the matters to be voted upon) will be counted for the purpose of determining whether a quorum exists. Shares present virtually during the annual meetingSpecial Meeting will be considered shares of common stock represented in person at the annual meeting.Special Meeting.
If a quorum is not present, the annual meetingSpecial Meeting will be adjourned until a quorum is obtained.
What vote is required for each item?
Proposal 1 – ElectionAdoption and Approval of Directorsthe Authorized Shares Proposal. The affirmative vote of the holders of a pluralitymajority of the votes cast by the stockholders entitled to vote on the matter iswill be required for the electionadoption and approval of directors. Proposal 1 is considered a nondiscretionary matter. Therefore, if1. If your shares are held by your bank, brokerage firm or other nominee in “street name” and you do not provide voting instructions with respect to your shares, we expect that your bank, brokerage firm or other nominee cannotwill have the authority to vote your shares on Proposal 1. Shares held in “street name” by banks, brokerage firms or other nominees who indicate on their proxiesTo the extent that they do not have authority to vote the shares on Proposal 1 will not be counted as votes FOR or WITHHELD fromthere are any nominee.
Proposal 2 – Approval of an Advisory Vote on Executive Compensation. The affirmative vote of the holders ofbroker non-votes, a majority of the votes cast will be required for the approval of a non-binding advisory vote on executive compensation. Proposal 2 is considered a nondiscretionary matter. Therefore, if your shares are held by your bank, brokerage firm or other nominee in “street name” and you do not provide voting instructions with respect to your shares, your bank, brokerage firm or other nominee cannot vote your shares on Proposal 2. Shares held in “street name” by banks, brokerage firms or other nominees who indicate on their proxies that they do not have authority to vote the shares on Proposal 2 will not be counted as votes FOR or AGAINST the proposal and will also not be counted as votes cast on the proposal. If you ABSTAIN from voting on Proposal 2, your shares will not be voted FOR or AGAINST the proposal and will also not be counted as votes cast on the proposal. As a result, such “broker non-votes” and votes to ABSTAINbroker non-vote will have no effect on the outcome of Proposal 2.
Proposal 3 – Approval of an Advisory Vote on the Frequency of Future Executive Compensation Advisory Votes. The affirmative vote of the holders of a majority of the votes cast will be required for the approval of one of the three frequency options under the advisory vote on the frequency of future executive compensation advisory votes. Proposal 3 is considered a nondiscretionary matter. Therefore, if your shares are held by your bank, brokerage firm or other nominee in “street name” and you do not provide voting instructions with respect to your shares, your bank, brokerage firm or other nominee cannot vote your shares on Proposal 3. Shares held in “street name” by banks, brokerage firms or other nominees who indicate on their proxies that they do not have authority to vote the shares on Proposal 3 will not be counted as votes for one of the three frequency options under the proposal and will also not be counted as votes cast on the proposal.1. If you ABSTAIN from voting on Proposal 3, your shares will not be voted for one of the three frequency options under the proposal and will also not be counted as votes cast on the proposal. As a result, such “broker non-votes” and votes to ABSTAIN will have no effect on the outcome of Proposal 3.
Proposal 4 – Ratification of Independent Auditors. The affirmative vote of the holders of a majority of the votes cast will be required for the approval of the ratification of the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31,2023. Proposal 4 is considered a discretionary matter. Therefore, if your shares are held by your bank, brokerage firm or other nominee in “street name” and you do not provide voting instructions with respect to your shares, your bank, brokerage firm or other nominee may vote your unvoted shares on Proposal 4. If you ABSTAIN from voting on Proposal 4,1, your shares will not be voted FOR or AGAINST the proposal and will also not be counted as votes cast on the proposal. As a result, votes to ABSTAIN will have no effect on the outcome of Proposal 4.1.
Although stockholderProposal 2 – Adoption and Approval of the Reverse Stock Split Proposal. The affirmative vote of a majority of the votes cast will be required for the adoption and approval of our audit committee’s appointmentProposal 2. If your shares are held by your bank, brokerage firm or other nominee in “street name” and you do not provide voting instructions with respect to your shares, we expect that your bank, brokerage firm or other nominee will have the authority to vote your shares on Proposal 2. To the extent that there are any broker non-votes, a broker non-vote will have no effect on the outcome of PricewaterhouseCoopers LLPProposal 2. If you ABSTAIN from voting on Proposal 2, your shares will not be voted FOR or AGAINST the proposal and will also not be counted as our independent registered public accounting firmvotes cast on the proposal. As a result, votes to ABSTAIN will have no effect on the outcome of Proposal 2.
Proposal 3 – Approval of the Adjournment Proposal. The affirmative vote of a majority of the votes cast will be required for the year ending December 31, 2023 isapproval of Proposal 3.If your shares are held by your bank, brokerage firm or other nominee in “street name” and you do not required,provide voting instructions with respect to your shares, we believeexpect that it is
advisableyour bank, brokerage firm or other nominee will have the authority to give stockholders an opportunityvote your shares on Proposal 3. To the extent that there are any broker non-votes, a broker non-vote will have no effect on the outcome of Proposal 3. If you ABSTAIN from voting on Proposal 3, your shares will not be voted FOR or AGAINST the proposal and will also not be counted as votes cast on the proposal. As a result, votes to ratify this appointment. If this proposal is not approved atABSTAIN will have no effect on the annual meeting, our audit committee will reconsider its appointmentoutcome of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2023.Proposal 3.
How will votes be counted?
Each share of common stock will be counted as one vote, whether executedvoted by you directly or voted online during the annual meeting.Special Meeting or submitted by proxy.
Who will count the votes?
Broadridge Financial Solutions, Inc. will serve as the inspector of elections for the Special Meeting and will count, tabulate and certify the votes.
How do I submit a question at the annual meeting?Special Meeting?
If you wish to submit a question, on the day of the annual meeting,Special Meeting, beginning at 9:45 a.m., Eastern Time on May 23,September 26, 2023, you may log into the virtual meeting platform at www.virtualshareholdermeeting.com/CRIS2023,CRIS2023SM, click the Q&A button, type your question into the “Submit a question” field, and click “Submit.” Our virtual meeting will be governed by our Rules of Conduct and Procedures, which will be posted at www.virtualshareholdermeeting.com/CRIS2023CRIS2023SM in advance of the annual meeting.Special Meeting. The Rules of Conduct and Procedures will address the ability of
stockholders to ask questions during the annual meeting,Special Meeting, including rules on permissible topics, and rules for how questions and comments will be recognized and disclosed to meeting participants.
How does the board of directors recommend that I vote on the proposals?
Our board of directors recommends that you vote:
FOR the electionapproval of two Class III directors for a term of three years;the Authorized Shares Proposal (Proposal 1);
FOR the approval of an advisory vote on executive compensation;
FOR a frequency of every ONE YEAR for how frequently you prefer we conduct an advisory vote of stockholders on executive compensation;the Reverse Stock Split Proposal (Proposal 2); and
FORthe ratificationapproval of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023.Adjournment Proposal (Proposal 3).
Will any other business be conducted at the annual meetingSpecial Meeting or will other matters be voted on?
We are not awareNo, under Section 3.5 of any otherour Amended and Restated By-Laws, the business to be conducted ortransacted at any special meeting of the company’s stockholders is limited to the matters to be voted upon at the annual meeting. If any other matter properly comes before the annual meeting, the persons namedstated in the proxy card that accompanies this proxy statement will exercise their judgment in deciding how to vote, or otherwise act, atnotice of the annual meeting with respect to that matter or proposal. Our bylaws establish the process for a stockholder to bring a matter before a meeting. See “Stockholder Proposals for 2024 Annual Meeting” on page 50 of this proxy statement.Where can I find the voting results?
We are required to report the voting results from the annual meetingSpecial Meeting in a Current Report on Form 8-K filed with the SEC within four business days following the date of the annual meeting.Special Meeting.
Who bears the costs of soliciting proxies?
We will bear the cost of soliciting proxies. In addition to solicitation by mail, our directors, officers and employees may solicit proxies by telephone, e-mail, facsimile and in person without additional compensation. We may reimburse banks, brokerage firms or other nominees holding stock in their names, or in the names of their nominees, for their expenses in sending proxies and proxy material to beneficial owners.
How canWhom should I obtain a copy of Curis’s Annual Report on Form 10-K?contact if I have any questions?
Our Annual Report on Form 10-K is available inIf you have any questions about the “Investors” sectionSpecial Meeting or your ownership of our website at www.curis.com. Alternatively, if you would like us to send you a copy, without charge,common stock, please contact:
Curis, Inc.
128 Spring Street, Building C – Suite 500
Lexington, MA 02421
Attention: Secretary
(617) 503-6500
If you would like us to send you a copy of the exhibits listed on the exhibit index of the Annual Report on Form 10-K, we will do so upon your payment of our reasonable expenses in furnishing the requested exhibits.
Whom should I contact if I have any questions?
If you have any questions about the annual meeting or your ownership of our common stock, please contact our secretary at the address or telephone number listed above.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of MarchJuly 31, 2023, with respect to the beneficial ownership of shares of our common stock by:
• each person known to us to beneficially own more than 5% of the outstanding shares of our common stock,
• each director and director nominee named in this proxy statement,of our directors,
• each of our named executive officers for the fiscal year ending December 31, 2022 identified in the “Summary Compensation Table;”officers; and
• all directors and executive officers as a group.
As of MarchJuly 31, 2023, we had 96,617,898117,704,554 shares of common stock outstanding. The number of shares of common stock beneficially owned by each person is determined under rules promulgated by the SEC and includes shares over which the indicated beneficial owner exercises voting and/or investment power. For each person named in the table below, the number in the “Shares Acquirable Within 60 Days” column consists of shares underlying options to purchase common stock that may be exercised within 60 days after MarchJuly 31, 2023. Such options are deemed outstanding for computing the percentage ownership of the person holding the options but are not deemed outstanding for computing the percentage ownership of any other person. Unless otherwise indicated, we believe that each stockholder in the table has sole voting and investment power over the shares listed. The inclusion in the table of any shares does not constitute an admission of beneficial ownership of those shares by the named stockholder. For each person, the “Number of Shares Beneficially Owned” column may include shares of common stock attributable to the person due to that person’s voting or investment power over such shares or other relationship.
Unless otherwise indicated, the address for each of the stockholders in the table below is c/o Curis, Inc., 128 Spring Street, Building C – Suite 500, Lexington, Massachusetts 02421.
| | Name and Address of Beneficial Owner | Name and Address of Beneficial Owner | | Number of Shares
Beneficially
Owned (1) | + | Shares Acquirable
Within 60 Days | = | Total Number of Shares
Beneficially
Owned | | Percent of Shares
Beneficially
Owned (2) | | Name and Address of Beneficial Owner | | Number of Shares
Beneficially
Owned (1) | + | Shares Acquirable
Within 60 Days | = | Total Number of Shares
Beneficially
Owned | | Percent of Shares
Beneficially
Owned (2) | |
| 5% Stockholders: | 5% Stockholders: | | | | | | | | 5% Stockholders: | | | | | | | |
| Aurigene Discovery Technologies Limited (3) | 5,465,692 | | — | | 5,465,692 | 5.66% | | |
| Entities affiliated with Kingdon Capital Management, LLC (3) | | Entities affiliated with Kingdon Capital Management, LLC (3) | 6,182,961 | | — | | 6,182,961 | 5.25% | |
| Entities affiliated with Maverick Capital, Ltd. (4) | Entities affiliated with Maverick Capital, Ltd. (4) | 5,555,598 | | — | | 5,555,598 | 5.75% | | Entities affiliated with Maverick Capital, Ltd. (4) | 11,645,403 | | — | | 11,645,403 | 9.89% | |
| Entities affiliated with M28 Capital Master Fund LP (5) | | Entities affiliated with M28 Capital Master Fund LP (5) | 8,439,024 | | — | | 8,439,024 | 7.17% | |
| Directors and Named Executive Officers: | Directors and Named Executive Officers: | | | | | | | | Directors and Named Executive Officers: | | | | | | | |
| Anne E. Borgman, M.D. (5) | — | | — | | — | * | | |
| Anne E. Borgman, M.D. (6) | | Anne E. Borgman, M.D. (6) | — | | — | | — | — | |
| Martyn D. Greenacre | Martyn D. Greenacre | 26,089 | | 522,000 | | 548,089 | * | | Martyn D. Greenacre | 26,089 | | 522,000 | | 548,089 | * | |
| John A. Hohneker, M.D. | John A. Hohneker, M.D. | — | | 92,812 | | 92,812 | * | | John A. Hohneker, M.D. | — | | 95,937 | | 95,937 | * | |
| Kenneth I. Kaitin, Ph.D. | Kenneth I. Kaitin, Ph.D. | 28,121 | | 522,000 | | 550,121 | * | | Kenneth I. Kaitin, Ph.D. | 28,121 | | 522,000 | | 550,121 | * | |
| Marc Rubin, M.D. | Marc Rubin, M.D. | 28,819 | | 522,000 | | 550,819 | * | | Marc Rubin, M.D. | 28,819 | | 522,000 | | 550,819 | * | |
| James E. Dentzer | James E. Dentzer | 75,563 | | 3,506,807 | | 3,582,370 | 3.58% | | James E. Dentzer | 109,837 | | 3,672,745 | | 3,782,582 | 3.21% | |
| Diantha Duvall (6) | — | | — | | — | * | | |
| Robert E. Martell, M.D., Ph.D. | 23,027 | | 1,172,371 | | 1,195,398 | 1.22% | | |
| William E. Steinkrauss (7) | 83,408 | | — | | 83,408 | * | | |
| Diantha Duvall (7) | | Diantha Duvall (7) | — | | 135,000 | | 135,000 | * | |
| Robert E. Martell, M.D., Ph.D (8). | | Robert E. Martell, M.D., Ph.D (8). | 23,027 | | 1,244,121 | | 1,267,148 | 1.08% | |
| William E. Steinkrauss (9) | | William E. Steinkrauss (9) | 83,408 | | — | | 83,408 | * | |
|
| | | | | | |
| | | | | | | |
All current directors and executive officers as a group (8 persons) | All current directors and executive officers as a group (8 persons) | 181,619 | | 6,337,990 | | 6,519,609 | 6.33% | | All current directors and executive officers as a group (8 persons) | 192,866 | | 5,469,682 | | 5,662,548 | 4.81% | |
|
* Less than 1% of the outstanding common stock.
(1) None of our directors or named executive officers has pledged any of their shares as security.
(2) The percent of ownership for each stockholder on MarchJuly 31, 2023 is calculated by dividing (1) the stockholder’s total beneficial ownership (i.e., the total number of shares beneficially owned plus the shares acquirable within 60 days) by (2) the sum of (i) 96,617,898117,704,554 shares of our common stock that were outstanding on MarchJuly 31, 2023 and (ii) any shares of common stock subject to options held by such person that will be exercisable within 60 days of MarchJuly 31, 2023.
(3) This information is based on a Schedule 13G/A filedinformation provided by Kingdon Capital Management, LLC regarding its affiliated entities’ beneficial ownership of our common stock as of July 31, 2023. Kingdon Capital Management, LLC manages M. Kingdon Offshore Master Fund, LP, which owns 5,502,284 shares of our common stock, and Kingdon Healthcare Master Fund, LP, which owns 680,677 shares of our common stock. Mark Kingdon is the managing member of Kingdon GP, LLC and Kingdon GP II, LLC, which is the general partner of M. Kingdon Offshore Master Fund, LP and M. Kingdon Healthcare Master Fund, LP, respectively. Mr. Kingdon and Kingdon GP, LLC may each be deemed to have shared voting power and shared dispositive power with the SEC on September 13, 2016 by Aurigene Discovery Technologies Limited. respect to 5,502,284 shares of our common stock, and Mr. Kingdon and Kingdon GP II, LLC may each be deemed to have shared voting power and shared dispositive power with respect to 680,677 shares of our common stock.The principal business address of Aurigene Discovery Technologies Limited(i) Kingdon Capital Management, LLC, (ii) M. Kingdon Offshore Master Fund, LP, (iii) Kingdon Healthcare Master Fund, LP, and (iv) Mr. Kingdon is 39-40, KIADB Industrial Area, Phase II, Electronic City Hosur Road, Bangalore – 560100 Karnataka India. Aurigene Discovery Technologies Limited has sole voting power and sole dispositive power with respect to all such shares. Dr. Reddy’s Laboratories Ltd. and Dr. Reddy’s Holdings Limited, parent companies of Aurigene Discovery Technologies Limited each are also beneficial holders of all such shares and each also has sole voting power and sole dispositive power with respect to all 5,465,692 shares of our common stock The principal business address of Dr. Reddy’s Laboratories Ltd. is 8-2-337, Road No. 3, Banjara Hills, Hyderabad, Telangana 500 034, India. The principal business address of Dr. Reddy’s Holdings Ltd. is 7-1-27, Ameerpet, Hyderabad, Telangana 500 016, India.c/o Kingdon Capital Management, LLC, 152 W. 57th Street, 50th Floor, New York, NY 10019.
(4) This information is based on a Schedule 13G/A filed with the SEC on February 14, 2023 by entities affiliated with Maverick Capital, Ltd. and information provided by such entities regarding their beneficial ownership of our common stock as of July 31, 2023. Maverick Capital, Ltd. is an investment adviser registered under Section 203 of the Investment Advisers Act of 1940 and, as such, may be deemed to have beneficial ownership of shares of our common stock through the investment discretion it exercises over its clients’ accounts. Maverick Capital Management, LLC is the General Partner of Maverick Capital, Ltd. Lee S. Ainslie III is the manager of Maverick Capital Management, LLC. Each of Maverick Capital, Ltd., Maverick Capital Management, LLC, and Mr. Ainslie may be deemed to have shared voting power and shared dispositive power with respect to 5,555,5983,182,469 shares of our common stock held directly by Maverick Capital,Fund USA, Ltd., 2,862,973 shares of our common stock held byMaverick Fund II, Ltd, 1,577,245 shares of our common stock held by Maverick Long Fund, Ltd., 1,272,391 shares of our common stock held by Maverick Long Enhanced Fund, Ltd., and 2,750,325 shares of our common stock held by Maverick HP, L.P. The principal business address of (i) Maverick Capital, Ltd. and, (ii) Maverick Capital Management, LLC and (iii) the entities affiliated with Maverick Capital, Ltd. is c/o Maverick Capital, Ltd., 1900 N. Pearl Street, 20th20th Floor, Dallas, Texas 75201, and (ii)TX 75201. The principal business address of Mr. Ainslie is 360 South Rosemary Ave., Suite 1440, West Palm Beach, FloridaFL 33401.
(5) This information is based on information provided by M28 Capital Fund GP LLC, as General Partner of M28 Capital Master Fund LP, regarding M28 Capital Master Fund LP’s beneficial ownership of our common stock as of July 31, 2023. M28 Capital Management LP is the investment manager of M28 Capital Master Fund LP. Marc Elia is the founder and Chief Investment Officer of M28 Capital Management LP. Each of M28 Capital Master Fund LP, M28 Capital Fund GP LLC, M28 Capital Management LP and Mr. Elia may be deemed to have shared voting power and share dispositive power with respect to 8,439,024 shares of our common stock held directly by M28 Capital Master Fund LP. The principal business address of (i) M28 Capital Master Fund LP, (ii) M28 Capital Fund GP LLC, (iii) M28 Capital Management LP, and (iv) Mr. Elia is 700 Canal St, 2nd Floor, Stamford, CT 06902.
(6) Dr. Borgman was elected to our board of directors on October 12, 2022.
(6) (7) Ms. Duvall joined our company on July 26, 2022 as senior vice president of strategy and began serving as our chief financial officer on August 5, 2022.
(7)(8) Dr. Martell ceased serving as an executive officer as of May 2, 2023.
(9) Mr. Steinkrauss served as our chief financial officer and chief administrative officer until August 4, 2022. This information is based upon our equity compensation plan administrator records through August 4, 2022.
PROPOSAL 1 — ELECTIONADOPTION AND APPROVAL OF DIRECTORSAN AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED, TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF OUR COMMON STOCK
On August 3, 2023, our board of directors approved, subject to stockholder approval, an amendment to our Restated Certificate of Incorporation, as amended, to increase the number of authorized shares of our capital stock from 232,812,500 to 460,625,000 and the number of authorized shares of our common stock from 227,812,500 to 455,625,000. Our Restated Certificate of Incorporation authorized 232,812,500 shares of capital stock, consisting of 227,812,500 shares of common stock, par value $0.01 per share, and 5,000,000 shares of preferred stock, par value $0.01 per share. The proposed amendment would not increase or otherwise affect our authorized preferred stock. Our common stock is all of a single class, with equal voting, distribution, liquidation and other rights. The additional shares of capital stock, consisting of shares of common stock to be authorized by adoption of the amendment, would have rights identical to our currently outstanding common stock.
A copy of the amendment to our Restated Certificate of Incorporation is attached as Appendix A to this proxy statement. If our stockholders adopt and approve the Authorized Shares Proposal (this Proposal 1), subject to the discretion of the board, we will file the amendment to our Restated Certificate of Incorporation with the Secretary of State of the State of Delaware as soon as practicable.
Directors and Nominees for DirectorPurpose
Our board of directors believes that it is divided into three classes, with one class being elected each yearin the best interests of our company and members of each class holding office for a three-year term. Our board of directors currently consists of two Class I directors, James E. Dentzer and Anne E. Borgman, M.D., two Class II directors, John A. Hohneker, M.D. and Marc Rubin, M.D., and two Class III directors, Martyn D. Greenacre and Kenneth I. Kaitin, Ph.D. In accordance with our bylaws, our directors may fill existing vacancies on the board of directors. The Class I, Class II and Class III directors will serve until the annual meetings of stockholders to be heldincrease the number of authorized shares of our common stock in 2024, 2025order to give us greater flexibility in considering and 2023 respectively, and until their respective successors are duly elected and qualified. Atplanning for potential business needs. The increase in the 2023 annual meeting, Class III directors stand for reelection.
Our boardnumber of directors has nominated Martyn D. Greenacre and Kenneth I. Kaitin, Ph.D as nominees for reelection as Class III directors, each to serve for a three-year term, until the 2026 annual meeting of stockholders or until their successors are duly elected and qualified. Each of the nominees is currently a director. Each of the nominees has indicated his willingness to serve, if elected; however, if any of the nominees should be unable to serve, theauthorized but unissued shares of common stock represented by proxies willwould enable the company, without the expense and delay of seeking stockholder approval, to issue shares from time to time as may be votedrequired for a substitute nominee designated byproper business purposes.
We anticipate that we may issue additional shares of common stock in the board of directors.
Below are the names, ages and certain other information for each memberfuture in connection with one or more of the board,following:
•financing transactions, such as public or private offerings of common stock or convertible securities, including under our sales agreement (the “ATM Agreement”), with Cantor Fitzgerald & Co. (“Cantor Fitzgerald”) and JonesTrading Institutional Services LLC (“JonesTrading”);
•partnerships, collaborations and other similar transactions;
•our equity incentive plans;
•strategic investments or acquisitions of other businesses or assets; and
•other corporate purposes that have not yet been identified.
We currently have no specific plans, arrangements or understandings to issue additional shares of common stock, except for the nominees for election as Class III directors. There are no familial relationships among anyissuance of common stock pursuant to our equity incentive plans, inducement grant awards or exercise and vesting of our directors, nomineesoutstanding options and restricted stock awards, and any potential issuances under the ATM Agreement as described below. However, the availability of additional shares of common stock for directorissuance is, in management’s view, prudent and executive officers. In additionwill afford us flexibility in acting upon financing transactions to strengthen our financial position and/or commercial partnership opportunities that may arise.
We have entered into the ATM Agreement pursuant to which we may issue shares of our common stock following such an increase in our authorized shares. On March 16, 2021, we entered into the ATM Agreement with Cantor Fitzgerald and Jones Trading, pursuant to which we may sell from time to time up to $100,000,000 of shares of our common stock through an “at the market offering” program under which Cantor and JonesTrading will act as sales agents (under which we have sold 4,583,695 shares, representing gross proceeds of $6.3 million as of July 31, 2023). We may choose to sell shares of our common stock pursuant to the detailed information presented below for each of our directors, we also believe that each of our directors is qualified to serve on our board and has the integrity, business acumen, knowledge and industry experience, diligence, freedom from conflicts of interest and the ability to actATM Agreement in the interests of our stockholders.
The following table sets forth our directors and their respective ages and positions:
| | | | | | | | |
Name | Age | Position |
| | |
Anne E. Borgman, M.D. (1)(2) | 55 | Director |
James E. Dentzer | 56 | President and Chief Executive Officer, Director |
Martyn D. Greenacre (2)(3) | 81 | Chairman of the Board |
John A. Hohneker, M.D. (4)(5) | 63 | Director |
Kenneth I. Kaitin, Ph.D. (2)(3)(4) | 70 | Director |
Marc Rubin, M.D. (3)(4)(5) | 68 | Director |
(1) Dr. Borgman was elected to our board of directors on October 12, 2022.
(2) Member of the nominating and corporate governance committee.
(3) Member of the audit committee.
(4) Member of the compensation committee.
(5) Member of the clinical program committee.
future.
| | | | | | | | | | | | | | |
Board Diversity Matrix (As of March 31, 2023) |
| Total Number of Directors | 6 |
|
Female |
Male |
Non-Binary | Did Not Disclose Gender |
| Part I: Gender Identity |
| Directors | 1 | 5 | 0 | 0 |
| Part II: Demographic Background |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| White | 1 | 5 | 0 | 0 |
| | | | |
| LGBTQ+ | 1 |
| |
Anne E. Borgman, M.D. has served onAs of July 31, 2023, a total of 117,704,554 shares of common stock were issued and outstanding, and there were no shares of preferred stock issued or outstanding. As of July 31, 2023, there were options to purchase an aggregate of 17,278,971 shares of common stock outstanding, composed of 14,439,703 shares underlying options granted under our board since October 2022. Dr. Borgman isFourth Amended and Restated 2010 Stock Incentive Plan (the “2010 Plan”) and 2,839,268 shares underlying options granted as inducement awards. Additionally, an aggregate of 22,516,299 shares of common stock are reserved for future issuance under the sole proprietor2010 Plan, and 788,029 shares of AEB Hematology Oncology Development Consulting which she established in November 2021 to provide clinical consulting. Since February 2023, Dr. Borgman has served as Chief Medical Officer of Sutro Biopharma, Inc., a clinical stage oncology company. She served as the Vice Presidentcommon stock are reserved for issuance under our Amended and Therapeutic Area HeadRestated 2010 Employee Stock Purchase Plan. Accordingly, out of the Hematology/Oncology Global Clinical Research227,812,500 shares of common stock authorized, 117,704,554 shares are issued and Development at Jazz Pharmaceuticals plc, a pharmaceutical company, from July 2019outstanding, 17,278,971 shares are reserved for issuance and 23,304,328 authorized shares of common stock remain for future issuance.
Possible Effects of the Amendment
If the amendment to November 2021. Dr. Borgman served as Vice President, Global Clinical Researchour Restated Certificate of Incorporation is adopted and Development at Exelixis, Inc., a biotechnology company, from December 2012 to July 2019. She served as Associate Chief Medical Officer at KaloBios Pharmaceuticals, Inc., a biotechnology company, from April 2011 to October 2012 and as Vice President and Chief Medical Officer at Talon Therapeutics, Inc. (formerly Hana Biosciences, Inc.), a biopharmaceutical company, from April 2008 to April 2011. Dr. Borgman also serves as a directorapproved, the additional authorized shares of NextCure, Inc., a clinical stage biopharmaceutical company and NiKang Therapeutics Inc., a privately held biotechnology company. Dr. Borgman received her B.S. in biochemistry from the University of Illinois, Urbana-Champaign and an M.D. from Loyola University Chicago Stritch School of Medicine. She completed her residency in pediatricscommon stock would be available for issuance at the Baylor College of Medicine in Houston, Texas, and her fellowship in pediatric hematology-oncology and bone marrow transplantation at the David Geffen School of Medicine at UCLA. Dr. Borgman is a graduate of the Stanford Executive Program and an alumni of Stanford University’s Graduate School of Business. We believe that Dr. Borgman’s qualifications to serve on our board include her expertise in hematology and oncology, and her extensive experience in all phases of oncology drug development at large and small companies across the biotech and pharmaceutical industries.
James E. Dentzer has served on our board and as our President and Chief Executive Officer since September 2018. From March 2018 to September 2018, Mr. Dentzer served as our Chief Operating Officer and Chief Financial Officer. From March 2016 to March 2018, Mr. Dentzer served as our Chief Administrative Officer and Chief Financial Officer. Mr. Dentzer has also held the positions of secretary and treasurer from March 2016 to March 2019. Previously, Mr. Dentzer served as Chief Financial Officer of Dicerna Pharmaceuticals, Inc., a biotechnology company, from December 2013 to December 2015. Prior to that, he was the Chief Financial Officer of Valeritas, Inc., a medical technology company, from March 2010 to December 2013. Prior to joining Valeritas, Inc., he was the Chief Financial Officer of Amicus Therapeutics, Inc., a biotechnology company, from October 2006 to October 2009. In prior positions, he spent six years as Corporate Controller of Biogen Inc., a biotechnology company, and six years in various senior financial roles at E.I. du Pont de Nemours and Company, a chemical, petroleum and biotechnology company, in the U.S. and Asia. Mr. Dentzer also serves as a director of Imunon, Inc., a clinical stage drug development company. Mr. Dentzer holds a B.A. in philosophy from Boston College and an M.B.A. from the University of Chicago. We believe that Mr. Dentzer’s qualifications to serve on our board include his extensive experience in executive leadership roles of more than 25 years, including his roles at Dicerna Pharmaceuticals, Inc., Amicus Therapeutics, Inc., Valeritas, Inc., and Biogen Inc.
Martyn D. Greenacre has served on our board since February 2000 and has served as Chairmandiscretion of our board since May 2017. From June 1993of directors and without further stockholder approval, except as may be required by law or the rules of the Nasdaq Capital Market on which our common stock is listed. The additional shares of authorized common stock would have the same rights and privileges as the shares of common stock currently issued and outstanding. Holders of our common stock have no preemptive rights.
The issuance of additional shares of common stock could have the effect of making it more difficult for a third party to July 2000, Mr. Greenacre wasacquire, or discouraging a directorthird party from attempting to acquire, control of Creative BioMolecules, Inc.,the company. We are not aware of any attempts on the part of a predecessor life sciencethird party to effect a takeover of the company, and the amendment to our Restated Certificate of Curis. Mr. Greenacre served as Chairman of Life Mist L.L.C., a privately held companyIncorporation has been proposed for the reasons stated above and not with the intention that any increase in the fieldauthorized shares of fire suppression, from September 2001 to December 2016. From June 1997 to June 2001, Mr. Greenacre was Chief Executive Officer of Delsys Pharmaceutical Corporation, a drug formulation company. From 1993 to 1997, Mr. Greenacre was President and Chief Executive Officer of Zynaxis, Inc., a biopharmaceutical company. Prior to Zynaxis, Inc., Mr. Greenacre served in various senior management positions at SmithKline Beecham Limited, a pharmaceuticals company, from 1973 through 1992, including as Chairman of European Operations, and was appointed to its board of directors. Previously, Mr. Greenacre servedcommon stock be used as a directortype of Acusphere, Inc., Cephalon, Inc., Formula Pharmaceuticals, Inc., Neostem, Inc. (n/k/anti-takeover device.
The issuance of additional shares of common stock may, among other things, have a Caladrius)dilutive effect on earnings per share and Orchestra Therapeutics, Inc.,on stockholders’ equity and as a directorvoting rights. Furthermore, future sales of substantial amounts of our common stock, or the perception that these sales might occur, could adversely affect the prevailing market price of our common stock or limit our ability to raise additional capital. Stockholders should recognize that if this amendment is adopted, approved and Chairmanfiled with the Secretary of BMP Sunstone Corporation. Mr. Greenacre received an M.B.A. from Harvard Business School and a B.A. from Harvard College. We believe that Mr. Greenacre’s qualifications to serve on our board include his years of experience as President and Chief Executive Officer of various biotech and pharmaceutical companies as well as his experience as a director of other public companies.
John A. Hohneker, M.D. has served on our board since December 2021. From January 2018 to February 2021, Dr. Hohneker was President and Chief Executive Officer of Anokion SA., a biotechnology company. From August 2015 to January 2018, Dr. Hohneker served as Head, Research and Development at Forma Therapeutics, Inc., a clinical stage biopharmaceutical company. From January 2001 to April 2015, Dr. Hohneker held various leadership positions at Novartis Pharmaceuticals Corporation, including Senior Vice President, Global Head of Development of Global Immunology/Dermatology Franchise from 2011 to 2015, Senior Vice President, US Clinical Development and Medical Affairs-Oncology from 2007 to 2011, and Vice President, US Clinical Development and Medical Affairs-Oncology from 2001 to 2007. From July 1990 to January 2001, he held various positions of increasing responsibility at Glaxo Wellcome and its legacy company, Burroughs Wellcome, a pharmaceutical company. He also serves as a director of Evelo Biosciences, Inc., a publicly held
clinical stage biotechnology company, Humanigen, Inc., a publicly held clinical stage biotechnology company, Aravive, Inc., a publicly held clinical stage biotechnology company, Trishula Therapeutics, Inc., a privately held clinical stage biotechnology company, BioTheryX, Inc., a privately held clinical stage biotechnology company, and Sonata Therapeutics (formerly Inzen Therapeutics), a privately held research stage biotechnology company. Dr. Hohneker previously served on the board of directors of Cygnal Therapeutics, Inc., Torque Therapeutics, Inc. and Dimension Therapeutics, Inc. Dr. Hohneker received a B.A. in chemistry from Gettysburg College and an M.D. from Rutgers School of Biomedical and Health Sciences. He completed his internship and residency in internal medicine and his fellowship in medical oncology at the University of North Carolina at Chapel Hill. We believe that Dr. Hohneker’s qualifications to serve on our board include his expertise in oncology as well as his extensive experience in drug development and that his insights and leadership experience in the biotechnology and pharmaceutical industries are valuable to a biotechnology company such as Curis.
Kenneth I. Kaitin, Ph.D. has served on our board since November 2003 and as a Senior Fellow at the Tufts Center for the Study of Drug Development, or CSDD, an academic drug policy research group providing strategic information to help drug developers, regulators, and policy makers improve the quality and efficiencyState of the drug development process, since January 2021. From July 1998State of Delaware, they will own a smaller percentage of shares relative to December 2020, Dr. Kaitin served as the Director of Tufts CSDD. Since 2014, he has held appointments as Professor of Medicine and Professor of Immunology at Tufts University School of Medicine. Between August 2014 and June 2021, Dr. Kaitin held a primary appointment as Professor of Public Health and Community Medicine at the Tufts University School of Medicine. In December 2014, Dr. Kaitin received the appointment of Advisory Professor at Shanghai Medical College of Fudan University. Dr. Kaitin has served on the facultytotal authorized shares of the European Center for Pharmaceutical Medicine at the University of Basel since September 1999. At the Tufts University School of Medicine, Dr. Kaitin was a Research Associate Professor of Medicine from October 2003 to May 2008 and a Research Professor from May 2008 to August 2014. Dr. Kaitin has written extensively on a broad range of drug development issues and has provided public testimony before the U.S. Congress in hearings on pharmaceutical innovation and U.S. Food and Drug Administration, or FDA, reform. An internationally recognized expert on the science of drug development, Dr. Kaitin is regularly quoted in the business and trade press on research and development trends in the research-based drug industry and new models of innovation. In 2011, Dr. Kaitin received the Dr. Louis M. Sherwood Award granted by the Academy of Pharmaceutical Physicians and Investigators, in 2020, he was named a Global Fellow in Medicines Development by the International Federation of Pharmaceutical Physicians, and in 2021, he received the Distinguished Achievement Award from the Sino-American Pharmaceutical Professionals Association. Dr. Kaitin is a former Editor-in-Chief of the Drug Information Journal, and from 1997 to 1998 he was President of the Drug Information Association. Until March 2021, he served as Editor-in-Chief of Expert Review of Clinical Pharmacology, and he currently serves on the editorial boards of a number of peer-review journals. Dr. Kaitin serves as an expert consultant to the U.S. Department of Defense on Bioterror Countermeasure issues. Dr. Kaitin received an M.S. and Ph.D. in pharmacology from the University of Rochester and a B.S. from Cornell University. We believe that Dr. Kaitin's qualifications to serve on our board include his expertise in the economics of drug development and biopharmaceutical innovation and his extensive knowledge on a broad range of drug development and life-sciences industry issues.
Marc Rubin, M.D. has served on our board since June 2010. From May 2009 to August 2022, Dr. Rubin served as Executive Chairman of Titan Pharmaceuticals, Inc., a biopharmaceutical company and he previously served as its President and Chief Executive Officer from October 2007 to December 2008. Dr. Rubin continues to serve as a director of Titan Pharmaceuticals, Inc. From June 2006 to February 2007, Dr. Rubin served as Head of Global Research and Development for Bayer Schering Pharma AG, a pharmaceutical company, as well as a member of the Executive Committee of Bayer HealthCare LLC, a pharmaceutical and medical products company and subsidiary of Bayer AG, and the Board of Management of Bayer Schering Pharma AG. From October 2003 until the merger of Bayer AG and Schering AG in June 2006, Dr. Rubin was a member of the Executive Board of Schering AG, as well as Chairman of Schering Berlin Inc. and President of Berlex Pharmaceuticals, Inc., a division of Schering AG. From January 1990 to August 2003, Dr. Rubin held various positions in global clinical and commercial development at GlaxoSmithKline plc, a healthcare company, as well as the position of Senior Vice President of Global Clinical Pharmacology & Discovery Medicine from 2001 to 2003. Prior to his pharmaceutical industry career, Dr. Rubin completed subspecialty training and board certification in both medical oncology and infectious diseases at the National Cancer Institute within the National Institutes of Health from 1983 to 1986. From September 1986 to December 1989, Dr. Rubin also served as an Investigator and on the Senior Staff of the infectious diseases section at the National Cancer Institute. Dr. Rubin also serves as a director of Galectin Therapeutics Inc., a publicly held biotechnology company, and Soricimed Biopharma, Inc., a privately held drug development company. Previously, Dr. Rubin served as a director of FirstString Research, Inc., Gemmus Pharma, Inc., Medarex, Inc., the Rogosin Institute and Surface Logix, Inc. Dr. Rubin holds an M.D. from Cornell University Medical College. We believe that Dr. Rubin’s qualifications to serve on our board include his extensive experience in clinical development as well as his medical,
commercial and scientific expertise having held executive-level clinical development positions with Bayer Schering Pharma AG, Schering AG and GlaxoSmithKline plc.than they presently own.
Board Recommendation
OUR BOARD OF DIRECTORS BELIEVES THAT THE ELECTIONADOPTION AND APPROVAL OF MARTYN D. GREENACRE AND KENNETH I. KAITIN, PH.D.THE AMENDMENT TO SERVE AS CLASS III DIRECTORS IS IN THE BEST INTERESTSRESTATED CERTIFICATE OF CURIS AND OUR STOCKHOLDERS AND, THEREFORE,INCORPORATION TO INCREASE THE BOARDNUMBER OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE NOMINEES.
CORPORATE GOVERNANCE
Our board of directors believes that good corporate governance is important to ensure that Curis is managed for the long-term benefit of stockholders. This section describes key corporate governance guidelines and practices that our board of directors has adopted. Complete copies of our corporate governance guidelines, committee charters, and code of business conduct and ethics are available on the Investors – Corporate Governance section of our website at www.curis.com. Alternatively, you can request a copy of any of these documents by writing to our secretary at the following address: Curis, Inc., 128 Spring Street, Building C – Suite 500, Lexington, MA 02421.
Corporate Governance Guidelines
Our board of directors has adopted corporate governance guidelines to assist in the exercise of its duties and responsibilities and to serve the best interests of Curis and our stockholders. These guidelines, which provide a framework for the conduct of the board of directors’ business, provide that:
• the board of directors’ principal responsibility is to oversee the management of Curis;
• a majority of the members of the board of directors shall be independent directors;
• the independent directors shall meet regularly in executive session;
• directors have full and free access to management and, as necessary and appropriate, independent advisors;
• all directors are encouraged to participate in continuing director education on an ongoing basis; and
• periodically, the board of directors and its committees will conduct a self-evaluation to determine whether they are functioning effectively.
Our Environmental, Social, and Governance Commitment
Curis’s core values are based upon four pillars. We respect each other, and lead with commitment and innovation. In addition, we believe in succeeding together and sustaining positivity as we work to develop innovative and differentiated therapeutics that improve the lives of cancer patients.
Sustainability
We believe in reducing our impact on the environment and have taken steps to reduce environmental waste and increase environmental sustainability by reducing our use of paper and plastic. Over time, we have reduced the number of printed documents and if printing is necessary, documents are generally printed double-sided to reduce our paper use. In addition, we have provided our employees with reusable water bottles and cups to encourage our employees to assist in preventing single use cups and plastic water bottle waste from entering into the environment. To further encourage environmental sustainability, we have implemented a water and seltzer station to encourage our employees to refill their water bottles and travel cups. By reducing our consumption of bottled water, we hope to reduce the carbon footprint that is generated in bottled water production, including in the packaging, transportation, and refrigeration of bottled water. Over the course of 2022, we continued to maintain this sustainability practice and also implemented a hybrid work environment to further reduce the carbon footprint generated in commuting to and from the office.
Social Responsibility
We strive to be socially responsible. In 2020, during the COVID-19 pandemic, we implemented a remote working environment and restricted business travel to help maintain the safety of our employees, families and community. To support
our employees and to maintain our core values of respect, commitment and innovation, succeeding together, and sustaining our positivity throughout the course of 2020 to present, we have held regular company meetings to stay connected and periodically set aside time for employee engagement activities. We have returned to the office and continue to offer our employees flexibility to work remotely for a portion of the work week. By offering our employees this flexibility, we hope to continue to maintain our core values, support our employees, families and community, and further reduce the carbon footprint that is generated in consuming fossil fuels in commuting to and from the office. In the past, our employees have volunteered at certain organizations, and we hope we are able to continue to provide opportunities for our employees to volunteer. As our company grows and new employees join, we hope to increase the diversity of our workforce. One of the four pillars of our core values – Succeed Together – represents our commitment to diversity and inclusion; we celebrate inclusivity and embrace diversity.
Corporate Governance
For a discussion regarding our governance commitment, see “Corporate Governance Guidelines” above as well as the “Board’s Role in Risk Oversight” and our “Code of Business Conduct and Ethics” below.
Human Capital
We believe that our future success largely depends upon our continued ability to attract and retain highly skilled employees. We offer our employees a comprehensive compensation package. Our well-designed compensation and benefits package includes salaries, annual bonuses, equity compensation, 401(k) match, life insurance, premium health and workers’ compensation insurance, paid vacation, holidays and year-end shutdown. Our equity compensation plans, pursuant to which we may grant stock options, restricted stock and other equity-based awards, are designed to align our employees’ interests with our stockholders’ interests and motivate effective performance, which drives company success. In addition, we provide certain wellness resources for our employees, such as work-life counseling and support through an employee assistance program. Over the course of 2022, we provided various wellness opportunities for our employees to recharge. We continue to conduct quarterly employee surveys to give our employees an opportunity to provide feedback, and to assess employee engagement and sustain positivity.
Determination of Independence
Nasdaq listing standards requires a majority of a listed company's board of directors to be comprising independent directors within one year of listing. In addition, Nasdaq listing standards require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and governance committees be independent and that audit committee members also satisfy independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Under Nasdaq listing standards, a director will only qualify as an “independent director” if in the opinion of our board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In order to be considered independent for purposes of Rule l0A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee: (1) accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries; or (2) be an affiliated person of the listed company or any of its subsidiaries. In addition, in affirmatively determining the independence of any director who will serve on a listed company’s compensation committee, Rule 10C-1 under the Exchange Act requires that a company’s board of directors consider all factors specifically relevant to determining whether a director has a relationship to such company which is material to that director’s ability to be independent from management in connection with the duties of a compensation committee member, including, but not limited to: (1) the source of compensation of the director, including any consulting, advisory or other compensatory fee paid by such company to the director; and (2) whether the director is affiliated with the company or any of its subsidiaries or affiliates.
In March 2023, our board of directors undertook a review of the composition of our board of directors and its committees and the independence of each director. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our board of directors determined that none of Dr. Borgman, Mr. Greenacre, Dr. Hohneker, Dr. Kaitin or Dr. Rubin has a relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is an “independent director” as defined under Nasdaq listing standards. In addition, our board has determined that all of the members of the audit committee, the compensation committee, and the nominating and governance committee are independent as defined under Nasdaq listing standards, including, (i) in the case of all members of the audit committee, the
independence requirements contemplated by Rule 10A-3 under the Exchange Act and (ii) in the case of all members of the compensation committee, the enhanced independence requirements contemplated by Rule 10C-1 under the Exchange Act.
Board Meetings and Attendance
Our corporate governance guidelines provide that directors are expected to attend the annual meeting of stockholders. All current directors then serving attended the 2022 virtual annual meeting of stockholders. The board met eleven times during the fiscal year ended December 31, 2022. During the fiscal year ended December 31, 2022, each of our directors attended at least 75% of the aggregate of the total number of board meetings and meetings of all committees of the board on which they then served.
Board Leadership Structure
Our board has chosen to separate the role of our chief executive officer and the role of chairman of our board. Accordingly, our Board has appointed Mr. Greenacre, an independent director within the meaning of Nasdaq listing standards (see “Determination of Independence” above), as the Chairman of the Board of Directors. Mr. Greenacre's duties as Chairman of the Board include the following:
•chairing meetings of the independent directors in executive session;
•meeting with any director who is not adequately performing his or her duties as a member of our board or any committee;
•facilitating communications between other members of our board and our chief executive officer;
•preparing or approving the agenda for each board meeting;
•determining the frequency and length of board meetings and recommending when special meetings of our board should be held; and
•reviewing and, if appropriate, recommending action to be taken with respect to written communications from stockholders submitted to our board.
Our board decided to separate the roles of Chairman and Chief Executive Officer because it believes that this leadership structure offers the following benefits:
•increasing the independent oversight of Curis and enhancing our board's objective evaluation of our chief executive officer;
•freeing our chief executive officer to focus on company operations instead of board administration;
•providing our chief executive officer with an experienced sounding board;
•providing greater opportunities for communication between stockholders and our board;
•enhancing the independent and objective assessment of risk by our board; and
•providing an independent spokesman for our company.
Board’s Role in Risk Oversight
Our board of directors oversees our risk management processes directly and through its committees. Our management is responsible for risk management on a day-to-day basis. Our board of directors and its committees oversee the risk management activities of management. They fulfill this duty by discussing with management the policies and practices utilized by management in assessing and managing risks, providing input on those policies and practices, and periodically discussing with management its evaluation of the effectiveness of such policies and procedures. In general, our (i) board of directors oversees risk management activities relating to business strategy, acquisitions, capital allocation, organizational
structure and certain operational risks, (ii) audit committee oversees risk management activities related to financial controls, data privacy and cybersecurity, (iii) compensation committee oversees risk management activities relating to our compensation policies, programs and practices and management succession planning, and (iv) nominating and corporate governance committee oversees risk management activities relating to the composition of our board of directors and corporate governance policies and procedures. Each committee reports to our full board of directors on a regular basis, including reports with respect to the committee’s risk oversight activities as appropriate.
With regards to cybersecurity, management periodically reports such risks to our audit committee or as needed to the chair of the audit committee. Based on the size and stage of development of our company, we have implemented certain processes and technology, and work with third-party vendors, to minimize the occurrences and impact of unauthorized access to our network, computers, programs and data. Our mitigation processes include management and monitoring of physical security, wireless access points, data backup and recovery, user security, antivirus protection, firewall and various levels of access authorizations on computer equipment, email and network access. Our data may also be managed and stored by our vendors on their systems with appropriate processes to protect such data.
Board Committees
Our board has established three standing committees – audit, compensation and nominating and corporate governance – each of which operates under a charter that has been approved by our board. In January 2022, our board established a clinical program committee. Current copies of the charters of the audit committee, compensation committee, and nominating and corporate governance committee are posted on the Investors – Corporate Governance section of our website at www.curis.com.
Audit Committee
The audit committee’s responsibilities include:
• appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;
• pre-approving all audit and non-audit services of our independent registered public accounting firm, except for de minimis non-audit services which are approved in accordance with applicable SEC rules, including meeting with our independent registered public accounting firm prior to the annual audit to discuss the planning and staffing of the audit;
• overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of certain reports from such firm;
• reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures, earnings releases and other publicly disseminated financial information;
• reviewing and discussing with our independent registered public accounting firm matters concerning the quality, not just the acceptability, of our accounting determinations, particularly with respect to judgmental areas;
• monitoring our internal control over financial reporting, disclosure controls and procedures and code of business conduct and ethics;
• discussing our risk management policies, including risks relating to data privacy and cybersecurity;
• establishing policies regarding hiring employees from our independent registered public accounting firm and procedures for the receipt and retention of accounting-related complaints and concerns;
• meeting independently with our independent registered public accounting firm and management on a quarterly basis;
• reviewing and approving or ratifying any related person transactions;
• establishing, and periodically reviewing, complaint procedures for (i) the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters; and (ii) the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; and
• preparing the audit committee report required by SEC rules, which is included on page 20 of this proxy statement.
The members of the audit committee are Mr. Greenacre (Chair), Dr. Kaitin and Dr. Rubin. The audit committee met six times during the fiscal year ended December 31, 2022. The board of directors has determined that Mr. Greenacre is an “audit committee financial expert” as defined by applicable SEC rules.
Compensation Committee
The compensation committee’s responsibilities include:
• determining the chief executive officer’s compensation;
• reviewing and approving the compensation of our other executive officers;
• overseeing an evaluation of our executive officers;
• overseeing and administering our cash and equity incentive plans;
• reviewing and making recommendations to the board with respect to director compensation;
• reviewing and discussing annually with management our “Compensation Discussion and Analysis,” which is included beginning on page 22 of this proxy statement;• preparing the compensation committee report required by SEC rules, which is included on page 48 of this proxy statement; and• reviewing and making recommendations to the board with respect to management succession planning.
The processes and procedures followed by our compensation committee in considering and determining executive and director compensation are described below under the heading “Executive Officer and Director Compensation Processes.”
During the fiscal year ended December 31, 2022, the members of the compensation committee were Dr. Rubin (Chair), Dr. Hohneker and Dr. Kaitin. The compensation committee met nine times during the fiscal year ended December 31, 2022.
Nominating and Corporate Governance Committee
The nominating and corporate governance committee’s responsibilities include:
• identifying individuals qualified to become board members;
• recommending to the board the persons to be nominated for election as directors and to each of the board’s committees;
• overseeing an annual evaluation of the board;
• overseeing the evaluation of the effectiveness of the audit function;
• periodically reviewing the composition of each board committee and the establishment or dissolution of additional board committees;
• periodically reviewing and reassessing the adequacy of the corporate governance guidelines; and
• periodically reviewing and making recommendations to the board regarding the company’s environmental, social and governance policies and practices.
The processes and procedures followed by the nominating and corporate governance committee in identifying and evaluating director candidates are described below under the heading “Director Nomination Process.”
During the fiscal year ended December 31, 2022, the members of the nominating and corporate governance committee were Dr. Kaitin (Chair), Dr. Kunkel, and Mr. Greenacre. Dr. Kunkel served on the committee until her resignation, and Dr. Borgman began serving on the committee upon her appointment in October 2022. The nominating and corporate governance committee met five times during the fiscal year ended December 31, 2022.
Clinical Program Committee
The clinical program committee’s responsibilities included reviewing, evaluating, and advising the board and management on the long-term strategic goals and objectives, and the quality and direction of the company's clinical development programs. The members of the clinical program committee were Dr. Kunkel (Chair), Dr. Hohneker and Dr. Rubin. The clinical program committee met five times over the course of 2022 and was dissolved in October 2022.
Executive Officer and Director Compensation Processes
The compensation committee oversees our compensation programs. In this capacity, the compensation committee determines and approves all compensation related to our executive officers.In addition, the compensation committee periodically reviews and makes recommendations to the board with respect to director compensation.
The compensation committee has the authority to retain and terminate any compensation consultant to be used to assist in the evaluation of executive officer compensation and has the sole authority to approve the consultant’s fees and other retention terms. The compensation committee also has authority to commission compensation surveys or studies as the need arises. Periodically, the compensation committee retains an independent third party compensation consultant to review director and officer compensation. The compensation committee has periodically retained Willis Towers Watson as an independent third party compensation consultant. In November 2020, 2021 and 2022, the compensation committee retained Willis Towers Watson to review and update the company’s peer group for 2021, 2022 and 2023 executive officer compensation, respectively. The compensation committee has determined that there are no conflicts of interest or other applicable factors affecting independence with its retention of Willis Towers Watson, as required by Nasdaq listing standards.
The compensation committee typically seeks the chairman of the board’s input in compensation matters involving our president and chief executive officer (to the extent the chairman of the board is not then also a member of the compensation committee). Our president and chief executive officer provides input on all other executive officer compensation matters including the appropriate mix of compensation, which the compensation committee considers when determining compensation for such other officers. Our president and chief executive officer is not present during the compensation committee’s voting or deliberations regarding his compensation.
Risks Arising from Compensation Policies and Practices
Employee compensation generally consists of salary, stock option awards and, depending on overall company performance and the successful achievement of objectives set forth in an annual short-term incentive program, cash bonus payments. We have reviewed our compensation policies and practices for all employees and have concluded that any risks arising from our policies and programs are not reasonably likely to have a material adverse effect on our company.
Director Nomination Process
The process followed by the nominating and corporate governance committee to identify and evaluate director candidates includes requests to board members and others for recommendations, retaining a search firm, meetings from time to time to evaluate biographical information and background material relating to potential candidates, and interviews of selected candidates by members of the nominating and corporate governance committee and the board.
In considering whether to recommend any particular candidate for inclusion in the board’s slate of recommended director nominees, the nominating and corporate governance committee will apply the criteria set forth in our corporate governance guidelines and its charter. These criteria include assessments of the candidate’s integrity, business acumen, knowledge of our business and industry, experience, ability to exercise sound judgment, freedom from conflicts of interest, ability to act in the interests of all stockholders and ability to serve for at least five years. Our nominating and corporate governance charter provides that diversity on our board is highly valued and should be considered by the nominating and corporate governance committee. The nominating and corporate governance committee does not assign specific weights to particular criteria and no particular criterion is a prerequisite for each prospective nominee. We believe that the backgrounds and qualifications of our directors, considered as a group, should provide a significant breadth of experience, diversity, knowledge, and abilities that will assist the board in fulfilling its responsibilities. We do not discriminate against candidates based on their race, religion, national origin, sex, sexual orientation, disability or any other basis proscribed by law.
Stockholders may recommend individuals to the nominating and corporate governance committee for consideration as potential director candidates by submitting candidate names, together with appropriate biographical information and background materials and a statement as to whether the stockholder or group of stockholders making the recommendation has beneficially owned more than 5% of our common stock for at least one year as of the date such recommendation is made, to: Nominating and Corporate Governance Committee, c/o Secretary, Curis, Inc., 128 Spring Street, Building C – Suite 500, Lexington, MA 02421. Assuming that appropriate biographical and background material has been provided on a timely basis, the nominating and corporate governance committee will evaluate stockholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for all candidates.
Stockholders also have the right under our bylaws to nominate director candidates by following the procedures set forth under “Stockholder Proposals for 2024 Annual Meeting.”
Communicating with the Board of Directors
The board of directors will give appropriate attention to written communications that are submitted by stockholders and will respond if and as appropriate. The chairman of the board of directors is primarily responsible for monitoring communications from stockholders and for providing copies or summaries to the other directors as he considers appropriate.
Communications are forwarded to all directors if they relate to important substantive matters and include suggestions or comments that the chairman of the board considers to be important for all directors to know. In general, communications relating to corporate governance and corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances and matters as to which we receive repetitive or duplicative communications.
Stockholders who wish to send communications on any topic to the board of directors should address such communications to: Chairman of the Board of Directors, c/o Secretary, Curis, Inc., 128 Spring Street, Building C – Suite 500, Lexington, MA 02421, or via email at info@curis.com.
Code of Business Conduct and Ethics
We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer. We have posted a current copy of this code on the Investors – Corporate Governance section of our website at www.curis.com. In addition, we intend to post on our website all disclosures that are required by law or Nasdaq listing standards concerning any amendments to, or waivers of, any provision of the code.
Policies and Procedures for Related Person Transactions
Our board has adopted written policies and procedures for the review of any transaction, arrangement or relationship in which Curis is a participant, the amount involved exceeds $120,000, and one of our executive officers, directors, director nominees or 5% stockholders (or their immediate family members), each of whom we refer to as a “related person,” has a material interest, directly or indirectly.
If a related person proposes to enter into such a transaction, arrangement or relationship, which we refer to as a “related person transaction,” the related person must report such proposed transaction to our chief financial officer and/or general counsel. The policy calls for the proposed related person transaction to be reviewed and, if deemed appropriate, approved by the board’s audit committee. Whenever practicable, the reporting, review and approval will occur prior to entry into the transaction. If advance review and approval is not practicable, the audit committee will review, and, in its discretion, may ratify the related person transaction at the next meeting of the committee. The policy also permits the chairman of the audit committee to review and, if deemed appropriate, approve proposed related person transactions that arise between audit committee meetings, subject to ratification by the audit committee at its next meeting. Any related person transactions that are ongoing in nature will be reviewed periodically. The audit committee will review and consider such information regarding the related person transaction as it deems appropriate under the circumstances.
The audit committee may approve or ratify the transaction only if the committee determines that, taking into account all of the circumstances, the transaction is not inconsistent with Curis’s best interests. The audit committee may impose any conditions on the related person transaction that it deems appropriate, which shall be deemed conditions precedent to approval and/or consummation of such transaction.
In addition to transactions excluded by the instructions to the SEC’s related person transaction disclosure rule, the board has determined that the following transactions do not create a material direct or indirect interest on behalf of related persons and, therefore, are excluded from classification as related person transactions for purposes of this policy:
• interests arising solely from the related person’s position as an executive officer of another entity (whether or not the person is also a director of such entity) who is a participant in the transaction, where (a) the related person and all other related persons own, in the aggregate, less than 10% of the equity interests in such entity, and (b) the related person and his or her immediate family members are neither involved in the negotiation of the terms of the transaction, nor receive any special benefits as a result of the transaction; and
• a transaction that is specifically contemplated by the provisions of our charter or bylaws.
The policy provides that transactions involving compensation of executive officers shall be reviewed and approved by the compensation committee in the manner specified in its charter.
Related Person Transactions
Aurigene Discovery Technologies Limited
In January 2015, we entered into an exclusive collaboration agreement for the discovery, development and commercialization of small molecule compounds in the areas of immuno-oncology and selected precision oncology targets with Aurigene Discovery Technologies Limited, or Aurigene. As of March 31, 2023, Aurigene beneficially owned approximately 5.66% of our outstanding shares of common stock.
Under the collaboration agreement, Aurigene granted us an option to obtain exclusive, royalty-bearing licenses to relevant Aurigene technology to develop, manufacture and commercialize products containing certain compounds anywhere in the world, except for India or Russia, which are the territories retained by Aurigene. We have licensed four programs under the Aurigene collaboration. For each of our licensed programs, we are obligated to use commercially reasonable efforts to develop, obtain regulatory approval for, and commercialize at least one product in each of the United States, specified countries in the European Union, and Japan, and Aurigene is obligated to use commercially reasonable efforts to perform its obligations under the development plan for such licensed program in an expeditious manner.
We initially issued to Aurigene 3,424,026 shares of our common stock valued at $24.3 million in partial consideration for the rights granted to us under the collaboration agreement. We also agreed to make specified research payments, option exercise fees and milestone payments under the collaboration agreement. In September 2016, we entered into an amendment to the collaboration agreement, pursuant to which, in exchange for our issuance to Aurigene of 2,041,666 shares of our common stock, Aurigene waived payment of up to a total of $24.5 million in milestones and other payments associated with the first four programs in the collaboration that may have become due to Aurigene under the collaboration agreement. Since January 1, 2021, we have not made any cash payments to Aurigene pursuant to the collaboration agreement, and our aggregate cash payments to Aurigene since the inception of the collaboration agreement are $22.0 million.
In February 2020, we and Aurigene further amended our collaboration agreement. Under the terms of the amended agreement, Aurigene will fund and conduct a Phase 2b/3 randomized study evaluating CA-170, in combination with chemoradiation, in approximately 240 patients with non-squamous non-small cell lung cancer. In turn, Aurigene receives rights to develop and commercialize CA-170 in Asia, in addition to its existing rights in India and Russia, based on the terms of the original agreement. We retain U.S., European Union, and rest of world rights to CA-170, and are entitled to receive royalty payments on potential future sales of CA-170 in Asia.
In addition to the collaboration agreement, in June 2017, we entered into a master development and manufacturing agreement with Aurigene for the supply of drug substance and drug product, under which we made cash payments to Aurigene of $1.1 million in 2022 and $1.1 million in 2021.
Audit Committee Report
The information contained in this report shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically request that it be treated as soliciting material or specifically incorporate it by reference into a document filed under the Securities Act of 1933, as amended, or the Securities Act, or the Exchange Act.
The responsibilities of the audit committee are set forth in the charter of the audit committee. The audit committee has reviewed our audited financial statements for the fiscal year ended December 31, 2022, and has discussed these financial statements with our management and our independent registered public accounting firm.
Our management is responsible for the preparation of our financial statements and for maintaining an adequate system of disclosure controls and procedures and internal control over financial reporting for that purpose. Our independent registered public accounting firm is responsible for conducting an independent integrated audit of our annual financial statements and, as required, our internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board, or PCAOB, and issuing a report on the results of their integrated audit. The audit committee is responsible for providing independent, objective oversight of these processes.
The audit committee has also received from, and discussed with, our independent registered public accounting firm various communications that our independent registered public accounting firm is required to provide to the audit committee, including the matters required to be discussed by the PCAOB Auditing Standard No. 1301. PCAOB Auditing Standard No. 1301 requires our independent registered public accounting firm to discuss with the audit committee, among other things, the following:
• methods to account for significant unusual transactions;
• the effect of significant accounting policies, including policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus;
• the process used by management in formulating particularly sensitive accounting estimates and the basis for the auditors’ conclusions regarding the reasonableness of those estimates;
• disagreements with management over the application of accounting principles, the basis for management’s accounting estimates and the disclosures in the financial statements; and
•written disclosures required by PCAOB Rule 3526— “Communication with Audit Committees Concerning Independence.”
The audit committee has received the written disclosures and the letter from our independent registered public accounting firm required by applicable requirements of the PCAOB regarding our independent registered public accounting firm’s communications with the audit committee concerning independence, and has discussed with the independent registered public accounting firm their independence from Curis. The audit committee has also received written disclosures required by PCAOB Rule 3526 —“Communication with Audit Committees Concerning Independence.”
Based on the review and discussions referred to above, the audit committee recommended to our board of directors that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2022.
Submitted by the audit committee of our board of directors.
Martyn D. Greenacre (Chair)
Kenneth I. Kaitin, Ph.D.
Marc Rubin, M.D.
Independent Registered Public Accounting Firm’s Fees and Other Matters
Independent Registered Public Accounting Firm’s Fees
The following table summarizes the fees of PricewaterhouseCoopers LLP, our independent registered public accounting firm, billed to us for each of the last two fiscal years:
| | | | | | | | | | | | | | |
Fee Category | | 2022 | | 2021 |
| Audit Fees (1) | | $ 849,500 | | $ 865,000 |
| | | | |
| All Other Fees (2) | | 3,081 | | 2,956 |
| | | | | |
| Total Fees | | $ 852,581 | | $ 867,956 |
| | | | | |
(1) Audit fees consist of fees for the audit of our financial statements, the audit of our internal control over financial reporting with respect to 2021, the review of the interim financial statements included in our quarterly reports on Form 10-Q. Audit fees also include fees of $191,500 and $190,000 for 2022 and 2021, respectively, associated with comfort letters and consent letters for our 2022 and 2021 registration statements. 100% of audit fees for 2022 and 2021 were pre-approved by the audit committee. The 2022 and 2021 amounts exclude reimbursement of out-of-pocket expenses. No out-of-pocket expenses were incurred for 2022 and 2021.
(2) All other fees consist of an annual license fee for use of accounting research software. None of the all other fees incurred during 2022 and 2021 were for services provided under the de minimis exception to the audit committee pre-approval requirements. 100% of these fees for 2022 and 2021 were pre-approved by the audit committee.
Pre-Approval Policy and Procedures
Our audit committee has adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by our independent registered public accounting firm. This policy generally provides that we will not engage our independent registered public accounting firm to render audit or non-audit services unless the audit committee specifically approves the service in advance or the engagement is entered into pursuant to one of the pre-approval procedures described below.
From time to time, our audit committee may pre-approve specified types of services that are expected to be provided to us by our independent registered public accounting firm during the next 12 months. Any such pre-approval is detailed as to the particular service or type of services to be provided and is also generally subject to a maximum dollar amount.
The audit committee has also delegated to the chairman of the audit committee the authority to approve any audit or non-audit services to be provided to us by our independent registered public accounting firm. Any approval of services by the chairman of the audit committee pursuant to this delegated authority is reported on at the next meeting of the audit committee.
EXECUTIVE AND DIRECTOR COMPENSATION AND RELATED MATTERS
Compensation Discussion and Analysis
This Compensation Discussion and Analysis describes our compensation strategy, policies, programs and practices for our named executive officers identified in the “Summary Compensation Table” or our “named executive officers.”
For the fiscal year ending December 31, 2022, our named executive officers or “executive officers” were:
•James E. Dentzer, our president and chief executive officer;
•Diantha Duvall, who began serving as our chief financial officer on August 5, 2022;
•Robert E. Martell, M.D., Ph.D., our head of research and development; and
•William E. Steinkrauss, who served as our chief financial officer and chief administrative officer until August 4, 2022.
We held our most recent “say-on-pay” advisory stockholder vote on the compensation of our executive officers at the 2022 annual meeting. This advisory vote was supported by our stockholders with 96.16% of the voted shares voting “for” such proposal. Our compensation committee considered the results of this advisory stockholder vote in determining the compensation for our executive officers in 2023. The compensation committee continues to believe that its pay-for-performance philosophy in determining the compensation of executive officers, as further described herein, best achieves the desired alignment of our compensation objectives.
The compensation paid to our named executive officers in 2022 reflected our primary compensation objectives of attracting and retaining key executive officers critical to our long-term success, recognizing and rewarding overall company performance and each executive officer’s individual performance and level of responsibility and continuing to align our executive officers’ incentives with stockholders’ interests. Cash compensation, including annual cash bonus incentives, is a basic element of our executive officers’ total compensation. In addition, a significant portion of our executive officers’ realizable compensation is tied to the performance of our company and our stock price. We believe stock-based compensation aligns our executive officers’ interest and our stockholders’ interest in incentivizing our executive officers to achieve performance objectives and to create long-term stockholder value. If our executive officers are unable to create long-term stockholder value and the price of our stock declines, then the realizable value of such executive officer’s long-term stock-based compensation also declines. Consistent with its pay-for-performance philosophy, our compensation committee may elect to decrease any executive officer’s compensation, or take other corrective or remedial steps, for non-performance.
2022 Pay-for-Performance
Our executive compensation program embodies a pay-for-performance philosophy that supports our business strategy and aligns the interests of our executives with our stockholders. Our board of directors believes this link between compensation and the achievement of our near- and long-term business goals has helped drive our performance over time. At the same time, we believe our program does not encourage excessive risk-taking by management.
In 2022, the compensation committee continued to adhere to its long-standing pay-for-performance philosophy and a significant portion of total 2022 executive compensation comprised cash incentives and long-term compensation based on corporate performance. We achieved certain goals and objectives in 2022:
•Emavusertib (small molecule inhibitor of IRAK4)
In January 2022, we announced positive updated preliminary clinical data from our TakeAim Leukemia Phase 1/2 study of emavusertib (TakeAim Leukemia). In April 2022, the FDA placed this study and our TakeAim Lymphoma Phase 1/2 study of emavusertib (TakeAim Lymphoma) on partial clinical holds. In August 2022, the FDA lifted the partial clinical hold on our TakeAim Lymphoma study, and allowed us to resume patient enrollment in the monotherapy dose finding phase (Phase 1a) of our TakeAim Leukemia study. As of March 31, 2023, the partial clinical hold remains in place for the combination therapy phase (Phase 1b) and the monotherapy expansion phase (Phase 2a) of our TakeAim Leukemia study.
The partial clinical holds on our TakeAim studies impacted our ability to advance both studies and to achieve certain goals and objectives in 2022. However, there were certain incremental achievements over the course of 2022 including efforts to resolve the partial clinical holds, reactivation of our U.S. clinical sites in order to resume patient enrollment in our TakeAim Lymphoma study and in the Phase 1a of the TakeAim Leukemia study, and our efforts to implement our studies outside of the U.S.
We and/or our collaborators made a number of presentations regarding our TakeAim studies, emavusertib and/or IRAK4. In March 2022, our collaborators published a manuscript in Gastroenterology on the role of IRAK4 in pancreatic ductal adenocarcinoma and the preclinical efficacy of emavusertib in combination with checkpoint immunotherapy. In June 2022, we presented data from our TakeAim Leukemia and TakeAim Lymphoma studies at the 2022 American Society of Clinical Oncology, or ASCO, Annual Meeting andat the 2022 European Hematology Association, or EHA, Hybrid Congress. At the EHA Hybrid Congress, we also presented novel findings on biomarker development for emavusertib, and our collaborators presented on emavusertib in primary central nervous system lymphoma.
In October 2022, we held our 1st Symposium on IRAK4 in Cancer with the goal of highlighting Curis as a leader in IRAK4. In November 2022, our collaborators presented a poster at the 37th Annual Meeting of the Society for Immunotherapy of Cancer, or SITC 2022, on the immune modulation of melanoma brain metastases by IRAK4 inhibition in preclinical models. In December 2022, we presented at the American Society of Hematology and held a webcast to discuss updated emavusertib clinical data and announced additional encouraging preliminary clinical data from our TakeAim Leukemia study.
•CI-8993(anti-VISTA antibody)
In January 2022, we presented preliminary safety data highlighting the procedures we implemented to manage expected cytokine release syndrome and enable dose escalation past 0.3 mg/kg. Over the course of 2022 we continued to focus on enrollment in our Phase 1 study of CI-8993 in patients with solid tumors, and we drafted the development plan for a combination study. We held our 2nd Annual VISTA Symposium in September 2022 with the goal of highlighting Curis as a leader in VISTA. In November 2022, we and our collaborative partners presented two posters at the Society for Immunotherapy of Cancer 37th Annual Meeting. Also in November 2022, CI-8993 was deprioritized as part of a strategic reprioritization.
•Human Capital, Investor Conferences and Financial Runway
In April 2022, we welcomed our employees back to our office and implemented a hybrid work week allowing our employees to work onsite and to work remotely. Over the course of 2022 we continued to host company meetings and employee engagement activities to sustain our company culture. Although we welcomed new colleagues to our company during the first half of 2022, we adjusted our strategy and reprioritized our clinical development programs which resulted in a reduction of our workforce in November 2022.
Over the course of 2022, we presented at a number of investor conferences including the B. Riley Virtual Oncology Investor conference, the SVB Leerink 11th Annual Global Healthcare conference, the 21st Annual Needham Virtual Healthcare conference, the 2022 Jefferies Healthcare conference, the H.C. Wainwright 24th Annual Global Investment Conference, and the Cantor Oncology and HemOnc Conference.
In August 2022, we sold shares of our common stock through “at-the-market” offerings pursuant to our Sales Agreement with Cantor Fitzgerald & Co. and JonesTrading Institutional Services LLC. The gross proceeds of such offering and reduction of our workforce extended the company’s cash runway.
In accordance with the compensation committee’s long-standing pay-for-performance philosophy, the compensation committee considered the overall performance and financial condition of the company,as well as each individual executive officer’s contributions, in determining executive officer compensation for 2022. In January 2022, taking into consideration the results of the January 2022 peer group analysis as described below; the mix of cash compensation and short term incentive compensation; the value of stock option grants to align our executive officers’ interests with the interests of our stockholders; the compensatory value of stock option grants; and the number of shares available for grant under our Fourth Amended and Restated 2010 Stock Incentive Plan, the compensation committee granted stock options and established short-term cash incentive payment amounts to incentivize Mr. Dentzer, Dr. Martell and Mr. Steinkrauss to achieve a number of objectives including (i) continued execution and progression of our clinical development programs with the focus on advancing our TakeAim Leukemia study to support potential regulatory discussions, and to meet other development goals with respect to our TakeAim Lymphoma study and our CI-8993 Phase 1 study, (ii) development of certain translational science and research plans to enhance the development of clinical development programs, (iii) execution of clinical and investor communication plans, and leading symposia in IRAK4 and VISTA, and (iv) managing our cash and resources, raising additional capital as appropriate, evaluating potential business development strategies, continued company growth and sustaining company culture. Mr. Steinkrauss served as our chief financial officer and chief administrative officer until August 4, 2022, and Ms. Duvall began serving as our chief financial officer on August 5, 2022.
In January 2023, taking into consideration the key corporate goals and objectives achieved in 2022 and each executive officer’s individual performance and level of responsibility, the compensation committee awarded cash incentive payments to Mr. Dentzer, Dr. Martell and Ms. Duvall at 75% of each such executive officer’s incentive target in the amount of $276,750, $141,750 and $61,793, respectively. Dr. Martell’s incentive target payout was pro-rated at 70%based upon a 70% time commitment to the company and was set at $189,000. Ms. Duvall’s incentive target payout was pro-rated for her portion of the year completed.
Benchmarking Assessments and Evaluations
In November 2021, the compensation committee retained Willis Towers Watson to review the company’s existing 2021 peer group and to develop the criteria for the 2022 peer group in setting 2022 executive compensation. The proposed 2022 peer group was based upon comparative compensation data for 17 companies in our industry, taking into account both the current and 12-month trailing average market capitalization of our company, and the following factors:
•mainly biotechnology companies, and to a lesser extent pharmaceutical companies, in critical stage or early stage focused on development and commercialization of innovative therapeutics for the treatment of cancer, and other significant diseases;
•market capitalization of approximately at or above $250 million (35% of Curis’s market capitalization as of November 1, 2021), with maximum market capitalization at approximately $1.5 billion (2.5x of Curis);
•focused on achieving a median market cap with an appropriate range between 25th and 75th of the peer group to prevent stock price volatility from impacting the reasonability of the peer group;
•national headquarters considered with strong focus on California and Massachusetts organizations;
•headcount ranging mainly between 50 to 200 employees;
•revenue and 1-year revenue growth, net income and R&D expense, earnings per share, 1-year and 3-year total shareholder return; and
•consideration of ISS’s peer group composition for Curis as result of being listed on the Russell 3000 in June 2021.
In January 2022, the market capitalization and 12-month trailing average market capitalization factors were updated as of December 31, 2021, and the compensation committee adopted the following peer group, which we refer to as the 2022 peer group, in setting 2022 compensation for our executive officers:
| | | | | |
Alpine Immune Sciences, Inc. | MEI Pharma, Inc. |
Atara Biotherapeutics, Inc. | ORIC Pharmaceuticals, Inc. |
Chimerix, Inc. | Pliant Therapeutics, Inc. |
CTI BioPharma Corp. | Seres Therapeutics, Inc. |
Evelo Biosciences, Inc. | Shattuck Labs, Inc. |
G1 Therapeutics, Inc. | Syros Pharmaceuticals, Inc. |
Infinity Pharmaceuticals, Inc. | VBI Vaccines Inc. |
Kezar Life Sciences, Inc. | Vor Biopharma Inc. |
Mersana Therapeutics, Inc. | |
The elements of executive compensation included in this evaluation consisted of base salary, short-term annual incentive compensation opportunities, total cash compensation, the fair value of long-term incentive awards and actual total direct compensation for each of our executive officers as compared to the 2022 peer group. Willis Towers Watson conducted a competitive analysis of compensation at the 25th, 50th, and 75th percentiles of the relevant data. The 2022 evaluation reviewed compensation recommendations for officer base salary increases and annual bonus payments, and annual option grants for directors and officers.
In November 2022, the compensation committee retained Willis Towers Watson to review the 2022 peer group. The 2022 peer group factors were reviewed, and the market capitalization and 12-month trailing average market capitalization criteria were adjusted to reflect peer companies within one-third to 3x of our current and trailing 12-month average market capitalization at the time of assessment:
•Approximately $17 million to $150 million spot market capitalization; and
•Approximately $67 million to $600 million trailing 12-month market capitalization.
Based on this assessment, the 2022 peer group was adjusted to remove larger peer companies and to replace them with peer companies more comparable to us in size. Based on this assessment, the 2023 peer group consists of the 2022 peer group with the removal of Pliant Therapeutics, Inc., Seres Therapeutics, Inc., and Kezar Life Sciences, Inc., and the addition of Akebia Therapeutics, Inc., Omeros Corporation, and Rigel Pharmaceuticals, Inc.
In December 2022, the compensation committee adopted the following 2023 peer group for 2023 executive compensation benchmarking for our executive officers.
| | | | | |
Akebia Therapeutics, Inc. | MEI Pharma, Inc. |
Alpine Immune Sciences, Inc. | Omeros Corporation |
Atara Biotherapeutics, Inc. | ORIC Pharmaceuticals, Inc. |
Chimerix, Inc. | Rigel Pharmaceuticals, Inc., |
CTI BioPharma Corp. | Shattuck Labs, Inc. |
Evelo Biosciences, Inc. | Syros Pharmaceuticals, Inc. |
G1 Therapeutics, Inc. | VBI Vaccines Inc. |
Infinity Pharmaceuticals, Inc. | Vor Biopharma Inc. |
Mersana Therapeutics, Inc. | |
Process for Determining Executive Compensation
Our president and chief executive officer evaluates the performance of each of the other executive officers at least once annually against established goals and objectives for such executive officer, and also takes into consideration each executive officer’s contribution to the achievement of company goals and objectives. These annual assessments are provided either orally or through a written review. The president and chief executive officer provides recommendations to the compensation committee for all elements of compensation of our other executive officers based upon these evaluations, and the compensation committee considers our president and chief executive officer’s assessments when determining compensation for our executive officers. The compensation committee evaluates the performance of the president and chief executive officer based upon its assessment of his performance, and this assessment is updated at periodic committee meetings, and through recommendations from the chairman of our board of directors (to the extent the chairman of the board is not then also a member of the compensation committee). Our president and chief executive officer does not participate in the determination of his own compensation. Our corporate goals and objectives are established through a process that involves input by our board and all of our executive officers. Members of our management team then regularly report on progress toward the achievement of these goals during our periodic meetings of the board of directors.
For a further discussion of the processes and procedures used by our compensation committee in considering and determining executive and director compensation, see “Executive Officer and Director Compensation Processes” beginning on page 18 of this proxy statement.Elements of Executive Compensation
The elements of executive officer compensation generally consist of the following:
• base salary;
• short-term cash incentives;
• stock option and restricted stock awards;
• insurance, retirement and other employee benefits; and
• change in control and severance benefits.
We do not have any formal policy or target for allocating compensation between long-term and short-term compensation, between cash and non-cash compensation, or among the different forms of non-cash compensation. The compensation committee, after considering information including company performance, individual executive officer performance, the financial condition of the company, benchmarking data, and other market compensation for executive
officers at other similarly-sized biotechnology companies, determines what it believes to be the appropriate level and mix of the various compensation components.
Base Salary
Base salary is used to recognize the experience, skills, knowledge and responsibilities required of all our employees, including our executive officers. Base salaries for our executive officers are established based on the scope of their responsibilities, periodically taking into account competitive market compensation paid by other companies for similar positions, and the financial condition of the company. Base salaries are reviewed annually, and adjusted from time to time to reflect promotions and to realign salaries with market levels as appropriate.
2022 Base Salaries
In January 2022, the compensation committee set the base salaries for our named executive officers as follows:
| | | | | | | | | | | | | | | | | | | | |
| Name |
| 2022 Base
Salary |
| 2021 Base
Salary | Percentage Increase |
| James E. Dentzer |
| $ | 615,000 | $ | 590,000 | 4.2% |
| Robert E. Martell, M.D., Ph.D. (1) |
| $ | 378,000 | $ | 370,440 | 2.0% |
| William E. Steinkrauss (2) |
| $ | 478,400 | $ | 400,000 | 19.6% |
(1)Dr. Martell’s annualized base salary for 2022 is set at $540,000 and then pro-rated based upon a 70% time commitment to the company.
(2)Mr. Steinkrauss’s 2022 salary reflects his promotion from chief financial officer to chief financial officer and chief administrative officer in January 2022. Mr. Steinkrauss served as our chief financial officer and chief administrative officer until August 4, 2022.
Based upon the results of the peer group analysis for 2022 executive officer compensation, and the company’s overall 2021 performance, the compensation committee increased Mr. Dentzer’s base salary by 4.2%, increased Mr. Steinkrauss’s base salary by 19.6% to account for his promotion and increased responsibility as chief administrative officer in addition to serving as chief financial officer, and increased Dr. Martell’s base salary by 2%.
Ms. Duvall joined our company on July 26, 2022 as senior vice president of strategy and her base salary was set at $478,400. She began serving as our chief financial officer on August 5, 2022.
2023 Base Salaries
In January 2023, the compensation committee set the base salaries for our named executive officers as follows:
| | | | | | | | | | | | | | | | | | | | |
| Name |
| 2023 Base
Salary |
| 2022 Base
Salary | Percentage Increase |
| James E. Dentzer |
| $ | 633,500 | $ | 615,000 | 3.0% |
| Diantha Duvall |
| $ | 484,600 | $ | 478,400 | 1.3% |
| Robert E. Martell, M.D., Ph.D. (1) |
| $ | 385,600 | $ | 378,000 | 2.0% |
(1)Dr. Martell’s annualized base salary for 2023 is set at $551,000 and then pro-rated based upon a 70% time commitment to the company.
Based upon the company’s overall 2022 performance and the need to manage the company’s cash runway, the compensation committee provided modest merit increases to each of our named executive officers. Mr. Dentzer’s base salary was increased by 3%. Ms. Duvall’s base salary was increased by 1.3%. Dr. Martell’s base salary was increased by 2%.
Short-Term Cash Incentive Plans
The compensation committee believes that allocating a meaningful amount of our executive officers’ total cash compensation to the achievement of objectives under a short-term incentive plan is another way to align our executive officers’ interests with those of our stockholders. Accordingly, the compensation committee implements a short-term incentive plan, which we refer to as a cash incentive program. The cash incentive program sets forth specific objectives each year that, if achieved, result in short-term incentive cash compensation for our executive officers.
A cash incentive program is designed to motivate our executive officers to achieve specified performance objectives for the applicable fiscal year and to reward them for their achievement. To be eligible, an executive officer must (i) be designated by the compensation committee or independent board members as an eligible participant, (ii) have achieved an overall performance evaluation at a “meets expectations” or higher level within our evaluation framework, and (iii) be serving as an executive officer at the time the award is paid.
The compensation committee generally establishes categories of goals that are then further delineated into three levels of potential achievement: “Threshold,” “Target,” and “Maximum.” Cash incentive payments may be paid based upon the degree to which each category of corporate goals has been achieved on this continuum, if at all. For each of the categories, achievement of performance at the “Threshold” level results in a weighted payment of no less than 50% of the target amount, achievement of performance at the “Target” level results in a weighted payment equal to 100% of the target amount, and achievement of performance at the “Maximum” level results in a weighted payment of no more than 150% of the target amount.
The cash incentive program is administered by the compensation committee. The compensation committee has the authority and discretion to modify performance goals under a cash incentive program and has the right to amend, modify or terminate a cash incentive program at any time. The awards generally are paid in cash. The compensation committee has sole discretion, however, to pay an award using a combination of cash and equity, or all equity. If the compensation committee determines that such payment is to be made in the form of equity, in whole or in part, the compensation committee has the sole discretion to determine the nature, amount and other terms of such equity award. Payment of the awards, if any, is generally to be made after the completion of the relevant fiscal year but no later than March 15 of the following year.
2022 Short-Term Cash Incentive Payments
Taking into consideration the 2022 peer group, the compensation committee established the following target short-term incentive target amounts, for each named executive officer:
| | | | | | | | | | | |
| Named Executive Officer | 2022 Annual Base Salary | Target Incentive Compensation Payment as a Percentage of 2022 Annual Base Salary, Assuming Performance at the Target 100% Level |
|
| (%) | ($) |
| James E. Dentzer (1) | $615,000 | 60% | $369,000 |
| Diantha Duvall (2) | $478,400 | 40% | $191,360 |
| Robert E. Martell, M.D., Ph.D. (3) | $378,000 | 50% | $189,000 |
| William E. Steinkrauss (4) | $478,400 | 40% | $191,360 |
Total | $1,949,800 | | $940,720 |
(1) Pursuant to the terms of his employment agreement, Mr. Dentzer may be entitled to receive an annual bonus amount of up to 60% of his base salary based on the achievement of specific objectives established by the board and/or compensation committee.
(2) Ms. Duvall joined our company on July 26, 2022 as senior vice president of strategy and began serving as our chief financial officer on August 5, 2022. Pursuant to the terms of her employment agreement, Ms. Duvall may be entitled to receive an annual bonus amount of up to 40% of her base salary based on the achievement of specific objectives established by the board and/or compensation committee.
(3) Pursuant to the terms of his employment agreement, Dr. Martell may be entitled to receive an annual bonus amount of up to 50% of his pro-rated base salary based on the achievement of specific objectives established by the board and/or compensation committee.
(4) Pursuant to the terms of his employment agreement, Mr. Steinkrauss was entitled to receive an annual bonus amount of up to 40% of his base salary based on the achievement of specific objectives established by the board and/or compensation committee. Mr. Steinkrauss served as our chief financial officer and chief administrative officer until August 4, 2022and, as a result, was ineligible for a payout under the 2022 short-term cash incentive program.
On January 20, 2023, taking into consideration the company’s overall 2022 performance, the compensation committee approved the payment of short-term cash incentive awards at 75% of the target amounts for Mr. Dentzer, Ms. Duvall and Dr. Martell, as follows:
| | | | | | | | | | | | | | |
| Name |
| | Total 2022
Cash Incentive
Amount Paid | Percentage of 2022 Base Salary |
| James E. Dentzer |
| $ | 276,750 | 45.0% |
| Diantha Duvall (1) |
| $ | 61,793 | 12.9% |
| Robert E. Martell, M.D., Ph.D. (2) |
| $ | 141,750 | 37.5% |
(1) Ms. Duvall's incentive target payout was set at $143,520 and pro-rated for her portion of the year completed.
(2) Dr. Martell’s incentive target payout was set at $189,000 and is pro-rated at 70%based upon a 70% time commitment to the company.
2023 Short-Term Cash Incentive Payments
Consistent with the company’s pay-for-performance practices, the compensation committee has established the following categories of corporate goals for 2023:
•Advancement of Emavusertib Program within 2023 target timeframes, including achievement of certain patient enrollment objectives; development of enrichment strategies and potential biomarker analysis; conducting certain manufacturing activities; progressing certain regulatory and quality objectives; development of target product profiles and continued leadership of IRAK4 symposium; and
•Financial and Human Capital execution, including extension of cash runway and sustaining employee engagement and culture.
Under the terms of our employment agreement with Mr. Dentzer, he may be entitled to receive an annual bonus amount of up to 60% of his base salary based on the achievement of specific objectives established by the board and/or compensation committee. Pursuant to his employment agreement, Dr. Martell may be entitled to receive an annual bonus amount of up to 50% of his pro-rated base salary based on the achievement of specific objectives established by the board and/or compensation committee. Pursuant to her employment agreement, Ms. Duvall may be entitled to receive an annual bonus amount of up to 40% of her base salary based on the achievement of specific objectives established by the board and/or compensation committee.
Long-Term Incentive Program
The compensation committee believes that long-term value creation is achieved through an ownership culture that encourages performance by our executive officers through grants of stock and stock-based awards. We have established our stock compensation plans to provide our employees, including our executive officers, with incentives that align employee interests with the interests of our stockholders. Our Fourth Amended and Restated 2010 Plan permits the issuance of stock options, restricted stock awards, and other stock-based awards to our employees, directors and consultants.
Stock Options
The compensation committee reviews and approves stock option grants to all of our executive officers. An initial stock option grant is made to our executive officers at the commencement of their employment, and then options are generally granted in annual supplements in conjunction with the review of the company’s overall performance for the prior fiscal year and the individual performance of our executive officers. Grants may also be made following a significant change in job responsibilities or to meet other special retention or performance objectives. The review and approval of stock option awards to executive officers is based upon an assessment of individual performance, a review of each executive officer’s existing long-term incentives and retention considerations. In appropriate circumstances, the compensation committee considers the recommendations of our president and chief executive officer (except with respect to his own compensation) and the chairman of our board of directors (to the extent the chairman of the board is not then also a member of the compensation committee) in determining the long-term compensation for our executive officers. Stock options are granted with an exercise price equal to the fair market value of our common stock on the date of grant and typically vest with respect to 25% of the shares underlying the award on the first anniversary of the grant date, and as to an additional 6.25% of the shares underlying the award at the end of each subsequent three-month period, subject to the optionholder continuing to provide services to us on the applicable vesting date.
Restricted Stock
The compensation committee may review and approve restricted stock grants to our executive officers from time to time. The review and approval of restricted stock awards to executive officers is based upon an assessment of individual performance, a review of each executive officer’s existing long-term incentives, variable compensation arrangements, and retention considerations. The size of the restricted stock award may be based upon the company’s performance, market data for the median of the broad-based published compensation survey group size grant at peer group and other comparable companies, and target portions of variable compensation determined by the compensation committee. Grants of restricted stock awards with a multi-year vesting period are made to provide a strong incentive for sustained operational and financial performance and align the interests of our executive officers with those of our stockholders. We did not make any restricted stock awards to our named executive officers in 2022 and had not made any such awards as of March 31, 2023.
2022 Stock Option Grants
Taking into consideration the results of the January 2022 peer group analysis, and our then current stock price, in January 2022, the compensation committee granted stock options to Mr. Dentzer, Dr. Martell and Mr. Steinkrauss as set forth in the table below to align the value of such executive officer’s grant at or about the 50th percentile of the 2022 peer group market data. In determining to make these grants, the compensation committee considered the company’s overall performance as well as the performance of each of our executive officers, the mix of cash compensation and short-term incentive compensation, the value of such stock option grants to align our executive officers’ interests with the interests of our stockholders, the compensatory value of such stock option grants, and the number of shares available for grant.
In July 2022, the compensation committee granted stock options to Ms. Duvall, who joined our company on July 26, 2022 as senior vice president of strategy and began serving as our chief financial officer on August 5, 2022.
| | | | | | | | |
| | |
Name
| Number of Shares Underlying
January 2022
Option Grants (1)
| Number of Shares Underlying
July 2022
Option Grants (2)
|
James E. Dentzer | 825,000 | — |
Diantha Duvall | — | 540,000 |
Robert E. Martell, M.D., Ph.D. (3) | 252,000 | — |
William E. Steinkrauss (4) | 360,000 | — |
(1)Such stock options were granted pursuant to our Fourth Amended and Restated 2010 Plan and have an exercise price per share equal to $3.09, the fair market value of our common stock on the last trading day before the date of grant, and became exercisable as to 25% of the shares underlying the award on January 29, 2023 and shall become exercisable as
to an additional 6.25% of the shares underlying the award at the end of each subsequent three-month period, subject to the optionholder continuing to provide services to us on the applicable vesting date. The stock options will terminate no later than January 28, 2032.
(2)Such grant was made as an inducement material to Ms. Duvall’s acceptance of employment and was granted outside of our Fourth Amended and Restated 2010 Plan. The option has an exercise price per share equal to $1.12, the fair market value on the date of grant, has a 10 year term and shall become exercisable as to 25% of the shares underlying the award on the first anniversary of the grant date and as to an additional 6.25% of the shares underlying the award at the end of each subsequent three-month period thereafter, subject to Ms. Duvall’s continued service with us on the applicable vesting date.
(3)Such option grant to Dr. Martell reflects his 70% time commitment to the company.
(4)Mr. Steinkrauss served as our chief financial officer and chief administrative officer until August 4, 2022.
2023 Stock Option Grants
In January 2023, the compensation committee granted stock options to Mr. Dentzer, Ms. Duvall and Dr. Martell as set forth in the table below. In determining to make these grants, the compensation committee considered the company’s overall performance as well as the performance of each of our executive officers, the mix of cash compensation and short-term incentive compensation, the value of such stock option grants to align our executive officers’ interests with the interests of our stockholders, the compensatory value of such stock option grants, the number of shares available for grant, our then current stock price, and the results of the 2023 peer group analysis.
| | | | | |
| |
Name
| Number of Shares Underlying
January 2023
Option Grants (1)
|
James E. Dentzer | 1,000,000 |
Diantha Duvall | 500,000 |
Robert E. Martell, M.D., Ph.D. (2) | 350,000 |
(1)Such stock options were granted pursuant to our Fourth Amended and Restated 2010 Plan and have an exercise price per share equal to $0.70, the fair market value of our common stock on the date of grant, and shall become exercisable as to 25% of the shares underlying the award on January 20, 2024 and exercisable as to an additional 6.25% of the shares underlying the award at the end of each subsequent three-month period, subject to the optionholder continuing to provide services to us on the applicable vesting date. The stock options will terminate no later than January 19, 2033.
(2)Such option grant to Dr. Martell reflects his 70% time commitment to the company.
Amended and Restated 2010 Employee Stock Purchase Plan
As with all employees of the company, our executive officers are eligible to participate in our Amended and Restated 2010 Employee Stock Purchase Plan, as amended, or the Amended and Restated 2010 ESPP. The Amended and Restated 2010 ESPP will be implemented by consecutive, overlapping 24-month offering periods, each consisting of four six-month purchase periods. Each offering period will begin on June 15 and December 15 of each year, or, if the national stock exchanges and the Nasdaq system are not open on such day, then on the first business day thereafter. The Amended and Restated 2010 ESPP permits employee participants to purchase up to $25,000 per calendar year of company stock through payroll deductions. The price of the stock is 85% of the lower of the fair market value of the stock on the first day of the offering period or the last day of the applicable purchase period.
Other Compensation – Employee Benefits
Our employees, including our executive officers, are entitled to various employee benefits such as medical and dental expense coverage, flexible spending accounts, various insurance programs, an employee assistance program, paid time off, and matching contributions in our 401(k) retirement plan.
Change in Control and Severance Payments
Each of our current named executive officers is party to an agreement that obligates us to make cash payments to such executive officer in the event we terminate the executive officer’s employment without cause, or the executive officer resigns for good reason (each as defined in the applicable agreement or offer letter). We believe that our severance program is aligned with other comparable biotechnology companies and provides our executive officers with income protection in the event of an unplanned separation from employment. In addition, we are also obligated to make cash payments to each of our named executive officers in the event of a change in control.
Our Fourth Amended and Restated 2010 Plan provides that, unless otherwise provided in the applicable award agreement, all plan participants, including our executive officers, are entitled to accelerated vesting of stock options and/or restricted stock awards upon certain events (including a change in control). In the event that a change in control occurs, 50% of the then-unvested options of each plan participant, including executive officers, would become immediately exercisable, and the restrictions underlying 50% of any restricted stock awards would lapse. This arrangement is a so-called “single trigger” change in control arrangement because it provides for equity acceleration benefits immediately upon a change in control. In the event any executive officer is terminated without cause or resigns for good reason (each as defined in the applicable plan), in each case, within one year after a change in control, then all remaining unvested stock options and restricted stock awards will become fully vested. This arrangement is a so-called “double trigger” change in control arrangement because it provides for equity acceleration benefits in the event of a change in control, the first trigger, followed by an employment termination under specified circumstances, the second trigger. Our Fourth Amended and Restated 2010 Plan generally defines a change in control as a merger by us with or into another company, or a sale of all or substantially all of our assets.
We provide for these change in control arrangements because we recognize that, as is the case with many publicly-held corporations, the possibility of a change in control of our company exists and such possibility, and the uncertainty and questions which it may raise among our executive officers, could result in the departure or distraction of executive officers to the detriment of our company and our stockholders. As a consequence, our compensation committee determined that it was necessary and appropriate to provide such change in control-related benefits to reinforce and encourage the continued employment and dedication of our executive officers without distraction or interference.
Our change in control and equity acceleration arrangements with our executive officers do not obligate us to make any additional payments to “gross-up” any compensation payable to such executive officers in order to offset income tax liabilities.
For a further description of the foregoing arrangements, see “Summary Compensation Table,” “Employment Agreements” and “Potential Payments Upon Termination or Change in Control.”
Stock Ownership Guidelines
Our compensation committee last considered the implementation of stock ownership guidelines for our executive officers and directors in January 2018. Willis Towers Watson analyzed the proxy filings of our peer group companies and determined that the implementation of stock ownership guidelines was a minority practice within our peer group. Taking into consideration the results of the 2018 evaluation, the compensation committee determined not to implement stock ownership guidelines for our executive officers and directors.
We have not adopted a specific hedging policy limiting the ability of our officers or directors, or any of their designees, to purchase financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds), or otherwise engage in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our equity securities. However, in accordance with our insider trading policy, no employee, officer or director may purchase company securities on margin, borrow against company securities held in a margin account, or pledge company securities as collateral for a loan (except pursuant to an exception granted by the company); engage in short sales of company securities; or purchase or sell puts, calls or other derivatives based on the company’s securities.
Tax and Accounting Considerations
We account for equity compensation paid to our employees under the rules of Financial Accounting Standards Board Accounting Standard Codification Topic 718, or FASB Codification Topic 718, which rules require us to estimate and record an expense over the service period of any such award. Also generally accepted accounting principles require us to record cash compensation as an expense as services are rendered.
Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code, generally disallows a tax deduction to public companies for compensation in excess of $1 million paid in any taxable year to each of certain of the company’s current and former executive officers. Historically, compensation paid to the Company’s chief financial officer and compensation that qualified under Section 162(m) as performance-based compensation was exempt from the deduction limitation. However, subject to certain transition rules, tax reform legislation signed into law on December 22, 2017 expanded the deduction limitation to apply to compensation in excess of $1 million paid in any taxable year to the company’s chief financial officer and eliminated the qualified performance-based compensation exception. As a result, for taxable years beginning after December 31, 2017, all compensation in excess of $1 million paid to each of the executives described above (other than certain grandfathered compensation or compensation paid pursuant to certain equity awards granted during the transition period following our initial public offering) will not be deductible by us.
Summary Compensation Table
The following table sets forth information regarding compensation paid to or earned by each of our named executive officers for the fiscal years ending December 31, 2022 and 2021.
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| Name and Principal Position | Year | Salary ($) |
Option
Awards ($) (1)
| Non-Equity Incentive Plan Compensation ($) (2) | All Other
Compensation ($) | Total ($) |
James E. Dentzer President and Chief Executive Officer | 2022 2021
| 615,000 590,212
| 2,081,805 2,400,156 | 276,750 378,780 | 20,545(3) 21,039(4) | $2,994,100 3,390,187 | |
Diantha Duvall Chief Financial Officer (5) | 2022
| 209,760
| 504,252
| 61,793
| 10,304(6)
| $786,109
| |
Robert E. Martell, M.D., Ph.D. Head of Research and Development | 2022 2021 | 378,000 370,508 | 635,897 916,423 | 141,750 198,186 | 17,400(7) 17,400(8) | $1,173,047 1,502,517 | |
William E. Steinkrauss Former Chief Financial Officer and Chief Administrative Officer (9) | 2022 2021 | 285,200 400,231 | 908,424 1,309,176 | -
171,200 | 173,026(10) 18,838(11) | $1,366,650 1,899,445 | |
(1)The amounts in this column reflect the aggregate grant date fair value of awards of stock options granted pursuant to our Fourth Amended and Restated 2010 Plan or outside of our Fourth Amended and Restated 2010 Plan as an inducement material to the commencement of employment during the relevant fiscal year, computed in accordance with FASB Codification Topic 718 and other relevant guidance. Assumptions used in the calculation of these amounts are included in footnote 12 to our audited financial statements for the fiscal year ended December 31, 2022 included in our Annual Report on Form 10-K filed with the SEC on March 13, 2023.
(2)The amounts in this column reflect amounts paid to each of our named executive officers under the short-term cash incentive payments described in “Compensation Discussion and Analysis” above.
(3)Of this amount, $3,145 represents fees paid for personal estate planning and tax preparation, including an associated gross-up payment for applicable taxes and $17,400 represents a 401(k) matching contribution made by us.
(4)Of this amount, $3,639 represents fees paid for personal estate planning and tax preparation, including an associated gross-up payment for applicable taxes and $17,400 represents a 401(k) matching contribution made by us.
(5)Ms. Duvall joined our company on July 26, 2022 as senior vice president of strategy and began serving as our chief financial officer on August 5, 2022.
(6)Consists entirely of 401(k) matching contributions made by us.
(7)Consists entirely of 401(k) matching contributions made by us.
(8)Consists entirely of 401(k) matching contributions made by us.
(9)In January 2022, Mr. Steinkrauss was promoted to chief administrative officer in addition to serving as chief financial officer. Mr. Steinkrauss served as our chief financial officer and chief administrative officer until August 4, 2022.
(10)Of this amount, $136,800 represents consulting fees earned by Mr. Steinkrauss pursuant to his consulting agreement effective as of August 5, 2022, $16,419 represents accrued vacation paid upon Mr. Steinkrauss’s separation from the company, $2,695 represents fees paid for personal estate planning and tax preparation, including an associated gross-up payment for applicable taxes, and $17,112 represents a 401(k) matching contribution made by us.
(11)Of this amount, $1,438 represents fees paid for personal estate planning and tax preparation, including an associated gross-up payment for applicable taxes and $17,400 represents a 401(k) matching contribution made by us.
Grants of Plan-Based Awards
The following table sets forth information regarding awards under our Fourth Amended and Restated 2010 Plan, to our named executive officers during the fiscal year ended December 31, 2022 and in the case of Ms. Duvall, an inducement stock option award made pursuant to Nasdaq Stock Market Rule 5635(c)(4).
| | | | | | | | | | | | | | |
Name | Grant
Date | All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)(1) | Exercise
or Base
Price of
Option
Awards
($/Sh)(2) | Grant
Date Fair
Value of
Stock and
Option
Awards($)(3) |
| James E. Dentzer | 01/29/2022 | 825,000 | $3.09 | 2,081,805 |
| | | | |
| Diantha Duvall (4) | 07/26/2022 | 540,000 | 1.12 | 504,252 |
| | | | |
| Robert E. Martell | 01/29/2022 | 252,000 | 3.09 | 635,897 |
| | | | |
| William E. Steinkrauss (5) | 01/29/2022 | 360,000 | 3.09 | 908,424 |
(1)The stock options granted to Mr. Dentzer, Dr. Martell and Mr. Steinkrauss were granted pursuant to our Fourth Amended and Restated 2010 Plan. The stock option granted to Ms. Duvall was granted pursuant to the inducement grant exception under Nasdaq Stock Market Rule 5635(c)(4) as an inducement equity award outside of our Fourth Amended and Restated 2010 Plan. Such stock options have an exercise price per share equal to the fair market value of our common stock on the date of grant, and become exercisable as to 25% of the shares underlying the award on the first anniversary of the grant date and as to an additional 6.25% of the shares underlying the award at the end of each subsequent three-month period, subject to the optionholder continuing to provide services to us on the applicable vesting date. Such stock options will expire 10 years from date of grant and in the event of a change in control, 50% of the then unvested options held by each executive officer would become immediately exercisable. In the event an executive officer terminates his or her employment for good reason or we terminate the executive officer without cause, in each case, within one year after a change in control, then all such options held by the executive officer would become fully vested and exercisable upon such termination.
(2)These amounts are equal to the closing price per share of our common stock on the Nasdaq Global Market on the last trading day before the date of grant for the grants to Mr. Dentzer, Dr. Martell, and Mr. Steinkrauss and on the date of grant for the grant to Ms. Duvall.
(3)The amounts shown in this column represent the total grant date fair value of each stock and option award as computed in accordance with FASB Codification Topic 718 and other relevant guidance. Assumptions used in the calculation of
these amounts are included in footnote 12 to our audited financial statements for fiscal year ended December 31, 2022 included in our Annual Report on Form 10-K filed with the SEC on March 13, 2023.
(4)Ms. Duvall joined our company on July 26, 2022 as senior vice president of strategy and began serving as our chief financial officer on August 5, 2022.
(5)Mr. Steinkrauss served as our chief financial officer and chief administrative officer until August 4, 2022 and his January 2022 grant was forfeited.
We have entered into employment agreements with our current named executive officers, as described below under “Employment Agreements” and “Indemnification of Executive Officers.”
Salary and payments pursuant to our short-term incentive plans accounted for approximately 34% of total compensation of our named executive officers for 2022, 31% of total compensation of our named executive officers for 2021, and 63% of total compensation of our named executive officers for 2020.
Outstanding Equity Awards at Fiscal Year-End
The following table summarizes the outstanding equity awards held by our named executive officers as of December 31, 2022.
| | | | | | | | | | | | | | | | | |
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) (1) Unexercisable | Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) | Option
Exercise
Price
($) | Option
Expiration
Date |
| James E. Dentzer | — | 825,000 | — | $3.09 | 1/28/2032 |
| 144,375 | 185,625 | — | $9.14 | 1/27/2031 |
| 515,625 | 234,375 | — | $1.26 | 3/1/2030 |
| 1,046,129 | 69,742 | — | $1.16 | 1/20/2029 |
| 750,000 | — | — | $1.62 | 9/25/2028 |
| 165,000 | — | — | $3.45 | 1/21/2028 |
| 129,999(2) | — | — | $13.15 | 2/13/2027 |
| 340,000(3) | — | — | $7.55 | 3/29/2026 |
| | | | | |
| | | | | |
| Diantha Duvall (4) | — | 540,000 | — | $1.12 | 7/25/2032 |
| | | | | |
| | | | | |
| | | | | |
| Robert E. Martell, M.D., Ph.D. (5) | — | 252,000 | — | $3.09 | 1/28/2032 |
| 55,125 | 70,875 | — | $9.14 | 1/27/2031 |
| 264,687 | 120,313 | — | $1.26 | 3/1/2030 |
| 362,808 | 24,188 | — | $1.16 | 1/20/2029 |
| 303,000 | — | — | $2.49 | 5/31/2028 |
| 24,000 | — | — | $11.55 | 2/27/2027 |
| 10,000 | — | — | $8.80 | 1/19/2026 |
| 5,000 | — | — | $9.70 | 1/26/2025 |
| 5,000 | — | — | $14.70 | 1/27/2024 |
| 5,000 | — | — | $16.60 | 1/17/2023 |
| | | | | |
| | | | | |
| William E. Steinkrauss (6) | 78,750 | — | — | $9.14 | 3/11/2023 |
| 264,687 | — | — | $1.26 | 3/11/2023 |
| 101,562 | — | — | $1.96 | 3/11/2023 |
| 107,812 | — | — | $1.16 | 3/11/2023 |
| 15,400 | — | — | $3.45 | 3/11/2023 |
| 11,220 | — | — | $12.05 | 3/11/2023 |
| 16,000(7) | — | — | $9.60 | 3/11/2023 |
| | | | | |
(1) Except as noted in footnote 3, footnote 4, and footnote 7 below, the stock options were granted pursuant to our Amended and Restated 2010 Stock Incentive Plan, or our Amended and Restated 2010 Plan, our Second Amended and Restated 2010 Plan, our Third Amended and Restated 2010 Plan, or our Fourth Amended and Restated 2010 Stock Incentive Plan, as applicable. Each stock option vests and becomes exercisable as to 25% of the shares underlying the award on the first anniversary of the date of grant and as to an additional 6.25% of the shares underlying the award at the end of each subsequent three-month period, subject to the optionholder continuing to provide services to us on the applicable vesting date. Such stock options will expire 10 years from date of grant and in the event of a change in control, 50% of the then unvested options held by each executive officer would become immediately exercisable. In the
event an executive officer terminates his employment for good reason or we terminate the executive officer without cause, in each case, within one year after a change in control, then all options held by the executive officer would become fully vested upon such termination. In addition, options granted pursuant to our Second Amended and Restated 2010 Plan, our Third Amended and Restated 2010 Plan, and our Fourth Amended and Restated 2010 Plan will automatically become fully vested upon a termination of employment due to the optionholder’s death or disability.
(2) Such stock options were granted pursuant to our Second Amended and Restated 2010 Plan and became exercisable as to 25% of the shares underlying the award on January 1, 2018 and vest as to an additional 6.25% of the shares underlying the award at the end of each subsequent three-month period, subject to the optionholder continuing to provide services to us on the applicable vesting date.
(3) The stock option granted to Mr. Dentzer was granted pursuant to the inducement grant exception under Nasdaq Stock Market Rule 5635(c)(4) as an inducement equity award outside of our stock incentive plans, and such grant was made as an inducement material to Mr. Dentzer's acceptance of employment. Such stock option vests and becomes exercisable as to 25% of the shares underlying the award on the first anniversary of the date of grant and as to an additional 6.25% of the shares underlying the award at the end of each subsequent three-month period, subject to continued service by Mr. Dentzer. Such stock option will expire 10 years from date of grant.
(4) The stock option granted to Ms. Duvall was granted pursuant to the inducement grant exception under Nasdaq Stock Market Rule 5635(c)(4) as an inducement equity award outside of our Amended and Restated 2010 Plan, and such grant was made as an inducement material to Ms. Duvall's acceptance of employment. Such stock option vests and becomes exercisable as to 25% of the shares underlying the award on the first anniversary of the date of grant and as to an additional 6.25% of the shares underlying the award at the end of each subsequent three-month period, subject to continued service by Ms. Duvall. Such stock option will expire 10 years from date of grant.
(5) Dr. Martell served on our board of directors from September 2011 until he resigned on May 31, 2018. He began serving as our head of research and development on June 1, 2018. The outstanding equity awards summarized in this table reflect both options granted to Dr. Martell as a director and options granted to Dr. Martell as a named executive officer.
(6)Mr. Steinkrauss served as our chief financial officer and chief administrative officer until August 4, 2022, and provided consulting services until December 2022 pursuant to our consulting agreement with him effective as of August 5, 2022. Pursuant to the terms of our stock option agreements, Mr. Steinkrauss was eligible to continue vesting in his stock options during the period of his consulting services with the company and such vested and unexercised stock options expired three months from the end of his service with the company.
(7) The stock option granted to Mr. Steinkrauss was granted pursuant to the inducement grant exception under Nasdaq Stock Market Rule 5635(c)(4) as an inducement equity award outside of our Amended and Restated 2010 Plan, and such grant was made as an inducement material to Mr. Steinkrauss’s acceptance of employment. Such stock option vests and becomes exercisable as to 25% of the shares underlying the award on the first anniversary of the date of grant and as to an additional 6.25% of the shares underlying the award at the end of each subsequent three-month period, subject to continued service by Mr. Steinkrauss. Such stock option will expire 10 years from date of grant.
Option Exercises and Stock Vested
The following table summarizes, for each of our named executive officers, each exercise of stock options and vesting of restricted stock during 2022.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Stock Awards | | | |
| | | | | | | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | |
| Name | | | |
| James E. Dentzer | | | | | | 10,313 | 33,720 | | |
| Diantha Duvall | | | | | | — | | | |
| Robert E. Martell, M.D., Ph.D. | | | | | | — | | | |
| William E. Steinkrauss | | | | | | — | | | |
Employment Agreements
We are party to the following employment arrangements with our named executive officers, except for the below-described employment agreement with William E. Steinkrauss, which terminated upon his resignation in August 2022.
James E. Dentzer. On September 24, 2018, we entered into a second amended employment agreement with Mr. Dentzer under which he has served as president, chief executive officer, treasurer and secretary (the last two positions he held until March 2019), which agreement further amended his March 29, 2016 employment agreement, as amended on March 7, 2017 and March 21, 2018. Mr. Dentzer’s then current base salary, which is subject to annual review by the board and/or compensation committee, was set at $495,000 per annum. Mr. Dentzer’s agreement also provides for four weeks paid vacation and for reimbursement of specified expenses related to his estate planning and tax preparation up to an annual maximum of $10,000, for which an associated gross-up payment for applicable taxes is also provided. Mr. Dentzer is entitled to participate in our medical and other benefits programs, and may be entitled to receive an annual bonus of up to 60% of his base salary based on the achievement of specific objectives established by the board and/or compensation committee. Mr. Dentzer is also entitled to receive severance benefits under the agreement in the event of his termination by us without cause (after 30 days’ notice) or by him for good reason (each as defined in the agreement) comprising (i) twelve months’ pay at his then-current base salary, (ii) a portion of the same year’s target bonus, pro-rated to reflect the portion of the year elapsed, and (iii) COBRA premium benefits for up to twelve months. In the event of his termination by us or the surviving entity without cause (after 30 days’ notice) or by him for good reason, in each case, within 12 months following a change in control (as defined in the agreement), Mr. Dentzer will receive (i) an amount equal to twice the sum of (x) his then-current base salary and (y) his target bonus for the year of termination, and (ii) a portion of the same year’s target bonus, pro-rated to reflect the portion of the year elapsed, and (iii) COBRA premium benefits for up to 24 months. The second amended employment agreement also provides for a limitation on payments under the agreement if limiting the payments would leave Mr. Dentzer in a better net position than bearing the tax penalties under Section 280G of the Code. For a description and quantification of such severance and change in control benefits, see “Potential Payments Upon Termination or Change In Control.” In addition, the agreement provides for certain indemnification provisions. For a description of such indemnification provisions, see “Indemnification of Executive Officers.”
Diantha Duvall. On August 4, 2022, we entered into an employment agreement with Ms. Duvall under which she began serving as our chief financial officer on August 5, 2022. Ms. Duvall’s then-current base salary, which is subject to annual review by the board and/or the compensation committee, was set at $478,400 per annum. Ms. Duvall’s agreement also provides for three weeks paid vacation per year and for reimbursement of specified expenses related to her estate planning and tax preparation up to an annual maximum of $7,500 for which an associated gross-up payment for applicable taxes is also provided. Ms. Duvall is entitled to participate in our medical and other benefits program, and may be entitled to receive an annual bonus based on the achievement of specific objectives established by the board and/or compensation committee at a target bonus rate of 40% of her annual base salary, to be paid in the form of cash or capital stock. Ms. Duvall is also entitled to receive severance benefits under the agreement in the event of her termination by termination by us without cause (after 30 days’ notice) or by her for good reason (as defined in the agreement) comprising (i) nine months’ pay at her then-current base salary, (ii) a portion of the same year’s target bonus, pro-rated to reflect the portion of the year elapsed, and (iii) COBRA premium benefits for up to nine months. In the event of her termination by us or the surviving entity without cause (after 30 days’ notice) or by her for good reason, in each case, within 12 months following a change in control (as defined in the agreement), Ms. Duvall will be entitled to receive (i) an amount equal to the sum of (x) her base salary and (y) her full target bonus for the year of termination, (ii) a portion of the same year’s target bonus, pro-rated to reflect the portion of the year elapsed, and (iii) COBRA premium benefits for up to 12 months. The employment agreement also provides for a limitation on payments under the agreement if limiting the payments would leave Ms. Duvall in a better net position than bearing the tax penalties under Section 280G of the Code. For a description and quantification of such severance and change in control benefits, see “Potential Payments Upon Termination or Change in Control.” In addition, the agreement provides for certain indemnification provisions. For a description of such indemnification provisions, see “Indemnification of Executive Officers.”
Robert E. Martell, M.D, Ph.D. On June 1, 2018, we entered into an amended employment agreement with Dr. Martell under which he serves as our head of research and development. Dr. Martell’s then current base salary, which is subject to annual review by the board and/or compensation committee, was set at $332,500 per annum (which reflects an annualized base salary of $475,000 pro-rated for a 70% time commitment to the company). Dr. Martell’s agreement also provides for four weeks paid vacation. Dr. Martell is entitled to participate in our medical and other benefits programs, and may be entitled to receive an annual bonus of up to 50% of his pro-rated base salary based on the achievement of specific objectives established by the board and/or compensation committee. Dr. Martell is also entitled to receive severance benefits under the agreement in the event of his termination by us without cause (after 30 days’ notice) or by him for good reason (each as
defined in the agreement) comprising (i) nine months’ pay at his then-current base salary (as then pro-rated for any partial time commitment to the company), (ii) a portion of the same year’s target bonus, pro-rated to reflect the portion of the year elapsed, and (iii) COBRA premium benefits for up to nine months. In the event of his termination by us or the surviving entity without cause (after 30 days’ notice) or by him for good reason, in each case, within 12 months following a change in control (as defined in the agreement), Dr. Martell will receive (i) an amount equal to the sum of (x) his then-current base salary (as then pro-rated for any partial time commitment to the company) and (y) his target bonus for the year of termination, (ii) a portion of the same year’s target bonus, pro-rated to reflect the portion of the year elapsed and (iii) COBRA premium benefits for up to 12 months. The employment agreement also provides for a limitation on payments under the agreement if limiting the payments would leave Dr. Martell in a better net position than bearing the tax penalties under Section 280G of the Code. For a description and quantification of such severance and change in control benefits, see “Potential Payments Upon Termination or Change in Control.” In addition, the agreement provides for certain indemnification provisions. For a description of such indemnification provisions, see “Indemnification of Executive Officers.”
William E. Steinkrauss. On September 11, 2019, we entered into an employment agreement with Mr. Steinkrauss under which he served as our chief financial officer. In January 2022, Mr. Steinkrauss was promoted to chief administrative officer in addition to serving as chief financial officer. In addition to his base salary, which was subject to annual review by the board and/or compensation committee, Mr. Steinkrauss was entitled to participate in our medical and other benefit programs and was entitled to receive an annual bonus based on the achievement of specific objectives established by the board, subject to the discretion of the board. Mr. Steinkrauss was also entitled to receive severance benefits under the agreement in the event of his termination without cause or for good reason (as defined in the agreement) and he was also entitled to receive certain payments if he was terminated within one year after a change in control. Mr. Steinkrauss’s employment agreement also provided for reimbursement of specified expenses related to his estate planning and tax preparation up to an annual maximum of $7,500, for which an associated gross-up payment for applicable taxes was also provided, and for a limitation on payments under the agreement if limiting the payments would leave Mr. Steinkrauss in a better net position than bearing the tax penalties under Section 280G of the Code.
Mr. Steinkrauss ceased to serve as an officer of the company on August 5, 2022, and did not receive any severance benefits in connection with his separation. We entered into a consulting agreement with Mr. Steinkrauss on August 5, 2022 pursuant to which Mr. Steinkrauss received $136,800 in consulting fees. Pursuant to the terms of our stock option agreements, Mr. Steinkrauss was eligible to continue vesting in his stock options during the period of his consulting services with the company and such vested and unexercised stock options expired three months from the end of his service with the company.
Indemnification of Executive Officers
Our Restated Certificate of Incorporation provides indemnification of our executive officers for any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative (other than an action or claim by or in the right of the company) by reason of the fact that such person serves as an executive officer, to the maximum extent permitted by the General Corporation Law of Delaware. The Restated Certificate of Incorporation further provides that executive officers may be entitled to additional indemnification, under any agreement or vote of the directors.
Each of our executive officer employment agreements also provides that we will indemnify each such executive officer for claims arising in his or her capacity as our executive officer, provided that he or she acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, our best interests. With respect to any criminal proceeding, the executive officer must have had no reasonable cause to believe that the conduct was unlawful. If the claim is brought by us or on our behalf, we will not be obligated to indemnify the executive officer if the executive officer is found liable to us, unless the court determines that, despite the adjudication of liability, in view of all the circumstances of the case the executive officer is fairly and reasonably entitled to be indemnified. In the event that we do not assume the defense of a claim against the executive officer, we are required to advance his or her expenses in connection with his or her defense, provided that he or she undertakes to repay all amounts advanced if it is ultimately determined that he or she is not entitled to be indemnified by us. We will require that any successor to our business assumes and agrees to perform our obligations under the indemnification provisions, which remain in effect until the later of (i) six years after the executive officer has ceased to be an employee or officer of the company or (ii) the date any legal proceedings begun during that period have concluded.
In connection with our indemnification obligations, we have and intend to maintain director and officer liability insurance, if available.
Potential Payments Upon Termination or Change in Control
Each of the above-described employment agreements with our current executive officers provides that in the event we terminate the executive officer’s employment without cause or if the executive officer resigns for good reason (each as defined in the agreements), the executive officer will receive: (1) continuation of his or her then base salary or a portion thereof for the periods and amounts described in the table below, (2) a payment equal in amount to his or her target bonus payment pro-rated for the portion of the year elapsed, and (3) payment of a portion of the executive officer’s COBRA premiums, which is calculated as the difference between the COBRA premium and the amount paid by the employee for medical/dental insurance, for the periods and amounts described in the table below. If the executive officer is terminated without cause or resigns for good reason, in each case, within 12 months after a change in control of the company, the executive officer will receive:
•in the case of Mr. Dentzer, (1) an amount equal to twice the sum of (x) his base salary and (y) his target bonus for the year of termination, for the periods and amounts described in the table below, (2) a portion of the same year’s target bonus, and (3) payment of a portion of Mr. Dentzer’s COBRA premiums, for the periods and amounts described in the table below,
•in the case of Ms. Duvall, (1) an amount equal to the sum of (x) her base salary and (y) her target bonus for the year of termination, for the periods and amounts described in the table below, (2) a portion of the same year’s target bonus, and (3) payment of a portion of her COBRA premiums, for the periods and amounts described in the table below.
•in the case of Dr. Martell, (1) an amount equal to the sum of (x) his base salary and (y) his target bonus for the year of termination, for the periods and amounts described in the table below, (2) a portion of the same year’s target bonus, and (3) payment of a portion of his COBRA premiums, for the periods and amounts described in the table below, and
Each of the above-described employment agreements also provides for a limitation on payments under the agreement if limiting the payments would leave the executive in a better net position than bearing the tax penalties under Section 280G of the Code. In order for our executive officers to receive these severance payments, the executive officer must execute a general release of all claims against the company, its employees, officers, directors and agents in a form acceptable to us.
Pursuant to the terms of our Amended and Restated 2010 Plan, as amended, our Second Amended and Restated 2010 Plan, our Third Amended and Restated 2010 Plan, as amended, and our Fourth Amended and Restated 2010 Plan, unless otherwise provided in the applicable award agreement, at the time of a change in control, 50% of the then-unvested options to purchase our common stock held by each plan participant, including executive officers, would become immediately exercisable and the forfeiture restriction on all outstanding restricted stock awards would lapse with respect to 50% of the number of shares that otherwise would have first become free from such forfeiture restrictions after the date of the change in control. In addition, in the event an executive officer terminates his or her employment for good reason (as defined in the applicable plan) or we terminate the executive officer without cause (as defined in the applicable plan), in each case, within 12 months after such change in control, then all remaining unvested options and restricted stock held by the executive officer would become fully vested and/or free of all forfeiture restrictions, as applicable. Pursuant to the terms of Ms. Duvall’s Inducement Stock Option Agreement, in the event of a change in control, 50% of the then unvested options held by Ms. Duvall would become immediately exercisable, and in the event Ms. Duvall terminates her employment for good reason or we terminate Ms. Duvall without cause, in each case, within 12 months after a change in control, then all options held by Ms. Duvall would become fully vested upon such termination.
Severance Benefits Table
The table below sets forth the estimated benefits provided to each of our current named executive officers, upon a termination event described above, assuming such termination event occurred on December 31, 2022, the last day of our most recently completed fiscal year.
Severance Benefits Table
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
| | | | Triggering Event |
| | | | Severance Upon Termination Without Cause or Resignation for Good Reason (Without Change-in-Control) | | Change in Control (Without Termination of Employment) | | Resignation For Good Reason or Termination Without Cause Upon or Within 12 Months Following a Change-in-Control |
| Name | | Benefit | | ($) | | ($) | | ($) |
| James Dentzer | | Severance Payments | | 615,000 (1) | | - | | 1,968,000(2) |
| President and | | Bonus Payment(3) | | 369,000 | | - | | 369,000 |
| Chief Executive Officer | | Continuation of Benefits | | 32,978(4) | | - | | 65,956(5) |
| | Market Value of Stock Vesting(6) | | - | | - | | - |
| | Total | | 1,016,978 | | - | | 2,402,956 |
| Diantha Duvall | | Severance Payments | | 358,800 (7) | | - | | 560,791(8) |
| Chief Financial Officer | | Bonus Payment(3) | | 82,391 | | - | | 82,391 |
| | Continuation of Benefits | | 24,734 (9) | | - | | 32,978(10) |
| | Market Value of Stock Vesting(6) | | - | | - | | - |
| | Total | | 465,925 | | - | | 676,160 |
| Robert E. Martell | | Severance Payments | | 283,500 (11) | | - | | 567,000 (12) |
| Head of Research and Development | | Bonus Payment(3) | | 189,000 | | - | | 189,000 |
| | Continuation of Benefits | | 8,285(13) | | - | | 11,046(14) |
| | Market Value of Stock Vesting(6) | | - | | - | | - |
| | Total | | 480,785 | | - | | 767,046 |
(1)Represents 12 months of salary based on Mr. Dentzer’s salary in effect for the 2022 fiscal year. Such amount would be paid ratably over a period of 12 months in accordance with the company’s then current payroll policies and practices.
(2)Represents an amount equal to twice the sum of (x) Mr. Dentzer’s salary in effect and (y) his target bonus for the 2022 fiscal year. Such amount would be paid ratably over a period of 24 months in accordance with the company’s then current payroll policies and practices.
(3)Represents a lump sum payment equal to each named executive officer’s target annual cash incentive bonus pro-rated for the portion of the year completed.
(4)Represents a payment of a portion of Mr. Dentzer’s COBRA premiums for up to 12 months.
(5)Represents a payment of a portion of Mr. Dentzer’s COBRA premiums for up to 24 months.
(6)Represents the value of that portion of each named executive officer's in-the-money stock options that would accelerate upon a change in control, assuming such change in control occurred on December 31, 2022, after deducting the exercise price of such stock options and based upon the closing price of $0.55 of our common stock on the Nasdaq Global Market on December 30, 2022, the last trading day for the fiscal year ending 2022. Each named executive officer’s stock options have an exercise price which is greater than the closing price of our common stock on December 30, 2022. As noted above, pursuant to the terms of our stock incentive plans, and our Inducement Stock Option Agreement with Ms. Duvall, unless otherwise provided in the applicable award agreement, at the time of a change in control, 50% of the then-unvested options become immediately exercisable. In addition, in the event an executive officer terminates his or her employment for good reason (as defined in the applicable plan) or we terminate the executive officer without cause (as defined in the applicable plan), in each case, within one year after such change in control, then all remaining unvested options held by the executive officer would become fully vested and/or free of all forfeiture restrictions, as applicable.
(7)Represents 9 months of salary based on Ms. Duvall’s salary in effect for the 2022 fiscal year. Such amount would be paid ratably over a period of 9 months in accordance with the company’s then current payroll policies and practices.
(8)Represents an amount equal to one times the sum of (x) Ms. Duvall’s salary in effect and (y) her target bonus for the 2022 fiscal year. Such amount would be paid ratably over a period of 12 months in accordance with the company’s then current payroll policies and practices.
(9)Represents a payment of a portion of Ms. Duvall’s COBRA premiums for up to 9 months.
(10)Represents a payment of a portion of Ms. Duvall’s COBRA premiums for up to 12 months.
(11)Represents 9 months of salary based on Dr. Martell’s salary in effect for the 2022 fiscal year. Such amount would be paid ratably over a period of 9 months in accordance with the company’s then current payroll policies and practices.
(12)Represents an amount equal to one times the sum of (x) Dr. Martell’s salary in effect and (y) his target bonus for the 2022 fiscal year. Such amount would be paid ratably over a period of 12 months in accordance with the company’s then current payroll policies and practices.
(13)Represents a payment of a portion of Dr. Martell’s COBRA premiums for up to 9 months.
(14)Represents a payment of a portion of Dr. Martell’s COBRA premiums for up to 12 months.
Pay Versus Performance
The following tables and related disclosures provide information about (i) the “total compensation” of our chief executive officer, who is our principal executive officer (“PEO”), and our other named executive officers (the “Other NEOs”) as presented in the Summary Compensation Table on page 33 (the “SCT Amounts”), (ii) the “compensation actually paid” to our PEO and our Other NEOs, as calculated pursuant to the SEC’s pay-versus-performance rules (the “CAP Amounts”), (iii) certain financial performance measures, and (iv) the relationship of the CAP Amounts to those financial performance measures.This disclosure has been prepared in accordance with Item 402(v) of Regulation S-K under the Exchange Act and does not necessarily reflect value actually realized by the executives or how our compensation committee evaluates compensation decisions in light of company or individual performance. For a discussion of how the compensation committee seeks to align pay with performance when making compensation decisions, please review Compensation Discussion and Analysis beginning on page 22.
| | | | | | | | | | | | | | | | | | | | |
| Year | Summary Compensation Table Total for PEO ($)(1) | Compensation Actually Paid to PEO ($)(2) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers ($)(1) | Average Compensation Actually Paid to Non-PEO Named Executive Officers ($)(1) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return (3) | Net Income ($) |
| (a) | (b) | (c) | (d) | (e) | (f) | (h) |
| 2022 | 2,994,100 | (2,263,686) | 1,108,602 | (115,985) | (93)% | (55,994) |
| 2021 | 3,390,187 | 348,483 | 1,700,980 | 651,489 | (42)% | (45,436) |
(1)James E. Dentzer, our chief executive officer, was PEO for all years in the table. The Other NEOs were William E. Steinkrauss, our chief financial officer until August 4, 2022, Diantha Duvall, who commenced serving as our chief financial officer on August 5, 2022, and Robert E. Martell, our head ofresearch and development.
(2)The following table summarizes the adjustments made in accordance with Item 402(v) of Regulation S-K in order to calculate the CAP Amounts from the SCT Amounts. The SCT Amounts and the CAP Amounts do not reflect the actual amount of compensation earned by or paid to our executives during the applicable years, but rather are amounts determined in accordance with Item 402 of Regulation S-K under the Exchange Act.
| | | | | | | | | | | | | | |
Adjustments* | 2022 | 2021 |
PEO
($) | Other NEOs**
($) | PEO
($) | Other NEOs**
($) |
| SCT Amounts | 2,994,100 | 1,108,602 | 3,390,187 | 1,700,980 |
| (Subtraction): Aggregate value for stock awards and option awards included in SCT Amounts for the covered fiscal year | (2,081,805) | (682,858) | (2,400,156) | (1,112,800) |
| Addition: Fair value at year end of awards granted during the covered fiscal year that were outstanding and unvested at the covered fiscal year end | 375,210 | 120,067 | 1,262,526 | 585,353 |
| Addition (Subtraction): Year-over-year change in fair value at covered fiscal year end of awards granted in any prior fiscal year that were outstanding and unvested at the covered fiscal year end | (1,650,939) | (242,014) | (2,568,933) | (942,192) |
| Addition: Vesting date fair value of awards granted and vested during the covered fiscal year | - | - | - | - |
| Addition (Subtraction): Change as of the vesting date (from the end of the prior fiscal year) in fair value of awards granted in any prior fiscal year for which vesting conditions were satisfied during the covered fiscal year | (1,900,252) | (419,782) | 664,859 | 420,148 |
| (Subtraction): Fair value at end of prior fiscal year of awards granted in any prior fiscal year that failed to meet the applicable vesting conditions during the covered fiscal year | - | - | - | - |
| Addition: Dividends or other earnings paid on stock or option awards in the covered fiscal year prior to vesting if not otherwise included in the total compensation for the covered fiscal year | - | - | - | - |
| CAP Amounts (as calculated) | (2,263,686) | (115,985) | 348,483 | 651,489 |
* Valuation assumptions used to calculate fair values did not materially differ from those used to calculate fair values at the time of grant as reflected in the SCT Amounts.
** Amounts presented are averages for the entire group of Other NEOs in each respective year.
We are a small biotechnology company and have yet to generate any significant revenues or become profitable. In addition, our stock price often fluctuates and our stock price volatility is subject to financial, economic and market conditions that may be outside of our control. We have not established any financial performance measures to link executive compensation actually paid to our PEO and Other NEOs to company performance. The compensation committee utilizes a pay-for-performance philosophy in determining the compensation of our PEO and Other NEOs.
The compensation that we pay to our PEO and Other NEOs reflects our primary compensation objectives of attracting and retaining key executive officers critical to our long-term success, recognizing and rewarding overall company performance and each executive officer’s individual performance and level of responsibility and continuing to align our executive officers’ incentives with stockholders’ interests. Cash compensation, including annual cash bonus incentives, is a basic element of our executive officers’ total compensation. In addition, a significant portion of our executive officers’ realizable compensation is tied to the performance of our company and our stock price. We believe stock-based compensation aligns our executive officers’ interest and our stockholders’ interest in incentivizing our executive officers to achieve performance objectives and to create long-term stockholder value. If our executive officers are unable to create long-term stockholder value and the price of our stock declines, then the realizable value of such executive officer’s long-term
stock-based compensation also declines. Consistent with its pay-for-performance philosophy, the compensation committee may elect to decrease any executive officer’s compensation, or take other corrective or remedial steps, for non-performance.
The following charts are a comparison of executive compensation actually paid to our PEO and the average executive compensation actually paid to the Other NEOs as compared to our (1) cumulative total shareholder return, or TSR, and (2) net income.
Director Compensation
The following table sets forth a summary of the compensation earned by or paid to our non-employee directors in 2022:
| | | | | | | | | | | | | | |
| Name | Fees Earned or Paid
In Cash ($) | Option
Awards ($) (1) (2) | All Other
Compensation ($) | Total ($) |
| Anne E. Borgman, M.D. (3) | 10,870 | 15,363 | 48,363(4) | 74,596 |
| Martyn D. Greenacre | 105,000 | 221,451 | — | 326,451 |
| John A. Hohneker, M.D. | 58,370 | 221,451 | — | 279,821 |
| Kenneth I. Kaitin, Ph.D. | 72,500 | 221,451 | — | 293,951 |
| Lori A. Kunkel, M.D. (5) | 45,625 | 221,451 | — | 267,076 |
| Marc Rubin, M.D. | 75,870 | 221,451 | — | 297,321 |
(1) The amounts in this column reflect the grant date fair value of awards made to such individual in accordance with FASB Codification Topic 718 and other relevant guidance, excluding forfeitures, for awards in 2022 pursuant to our Fourth Amended and Restated 2010 Plan. Assumptions used in the calculation of these amounts are included in footnote 12 to our audited financial statements for the fiscal year ended December 31, 2022 included in our Annual Report on Form 10-K filed with the SEC on March 13, 2023.
(2) At December 31, 2022, each of our then-serving non-employee directors held options to purchase shares of our common stock as follows:
| | | | | |
| |
Director
| Aggregate Number
of Stock Options
|
Anne E. Borgman | 25,000 |
Martyn D. Greenacre | 527,000 |
John A. Hohneker, M.D. | 110,000 |
Kenneth I. Kaitin, Ph.D. | 527,000 |
Marc Rubin, M.D. | 527,000 |
| |
(3) Dr. Borgman was elected to our board of directors on October 12, 2022 and received a one-time non-qualified stock option grant of 25,000 shares of common stock at an exercise price of $0.73. Such stock options will vest over a period of four years with 25% of the shares underlying the stock option vesting on October 12, 2023, and an additional 6.25% of the shares vesting at the end of each successive three-month period thereafter until the options are fully vested on October 12, 2026, subject to Dr. Borgman’s continued service on the Company's Board.
(4) Prior to Dr. Borgman’s election as a director, we were party to a consulting agreement dated February 7, 2022 with AEB Hematology-Oncology Consulting, a sole proprietorship owned by Dr. Borgman, under which she provided consulting services to us in the area of clinical development. We and Dr. Borgman terminated the consulting agreement prior to her election to our board of directors. This amount represents payments made by us to Dr. Borgman pursuant to the consulting agreement.
(5) Dr. Kunkel resigned from our board of directors effective as of September 30, 2022, and the exercise period of her then vested options was extended for a period of twelve months.
In January 2022, our board of directors approved the following director cash compensation policy, consistent with past policies:
Non-employee directors other than Mr. Greenacre receive an annual retainer of $45,000. In recognition of the additional duties and responsibilities of the Chairman, Mr. Greenacre receives an annual retainer of $80,000. In addition, members of each of the following standing committees of the board are also paid the following additional annual retainers:
•$10,000 – Audit Committee;
•$7,500 – Compensation Committee;
•$7,500 – Clinical Program Committee; and
•$5,000 – Nominating and Corporate Governance Committee.
The chair of each of the following standing committees of the board is also paid, in addition to his or her retainer as a member of such committee, an additional annual retainer as follows:
•$10,000 – Audit Committee;
•$7,500 – Compensation Committee;
•$7,500 – Clinical Program Committee; and
•$5,000 – Nominating and Corporate Governance Committee.
In January 2023, our board of directors approved the following director cash compensation policy, consistent with past policies:
Each of our non-employee directors receives an annual retainer of $45,000, and the chair of the board receives an additional annual retainer of $35,000. In addition, members of each of the following standing committees of the board are also paid the following additional annual retainers:
•$10,000 – Audit Committee;
•$7,500 – Compensation Committee; and
•$5,000 – Nominating and Corporate Governance Committee.
The chair of each of the following standing committees of the board is also paid, in addition to his or her retainer as a member of such committee, an additional annual retainer as follows:
•$10,000 – Audit Committee;
•$7,500 – Compensation Committee; and
•$5,000 – Nominating and Corporate Governance Committee.
In January 2023, based on Willis Towers Watson’s review of director equity compensation and consistent with prior year grants, each of our non-employee directors received a stock option award of 85,000 shares of common stock. Such stock option awards vest and become exercisable as to 100% of the underlying shares on January 23, 2024, the first anniversary of the date of grant, subject to the director’s continued service, have a term of ten years and are granted at fair market value on the date of grant.
Indemnification of Directors
Our Restated Certificate of Incorporation provides indemnification of our directors for any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative (other than an action or claim by or in the right of the company) by reason of the fact of that such person serves as a director, to the maximum extent permitted by the General Corporation Law of Delaware. The Restated Certificate of Incorporation further provides that directors may be entitled to additional indemnification, under any agreement or vote of the directors.
We have entered into indemnification agreements with each of our non-employee directors. The indemnification provisions apply to each such director and state that we will indemnify him or her for claims arising in his or her capacity as our director, provided that he or she acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, our best interests. With respect to any criminal proceeding, the director must have no reasonable cause to believe
that the conduct was unlawful. If the claim is brought by us or on our behalf, we will not be obligated to indemnify the director if the director is found liable to us, unless the court determines that, despite the adjudication of liability, in view of all the circumstances of the case, the director is fairly and reasonably entitled to be indemnified. In the event that we do not assume the defense of a claim against the director, we are required to advance his or her expenses in connection with his or her defense, provided that he or she undertakes to repay all amounts advanced if it is ultimately determined that he or she is not entitled to be indemnified by us. We will require that any successor to our business assumes and agrees to perform our obligations under the indemnification provisions. For a discussion of our indemnification arrangements with Mr. Dentzer, see “Indemnification of Executive Officers.” In connection with our indemnification obligations, we have and intend to maintain director and officer liability insurance, if available on reasonable terms.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides information as of December 31, 2022 regarding compensation plans (including individual compensation arrangements) under which our equity securities are authorized for issuance.
| | | | | | | | | | | | | | | | | | | | |
| | (a) | | (b) | | (c) |
| | | | | | |
| | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | Weighted average exercise price of outstanding options, warrants and rights | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
| Equity compensation plans approved by security holders | | 11,054,848 | | $3.13 | | 12,566,456(1) |
| Equity compensation plans not approved by security holders (2) | | 2,618,408 | | $3.67 | | N/A |
| Total | | 13,673,256 | | $3.23 | | 12,566,456 |
(1)Comprising 11,391,448 shares available for grant under our Fourth Amended and Restated 2010 Plan and 1,175,008 shares available for sale under our Amended and Restated 2010 ESPP. The 2010 Employee Stock Purchase Plan was approved by our stockholders in June 2010 and was amended to increase the number of shares authorized for issuance thereunder to 2,000,000 shares at our 2017 annual meeting. Our 2010 Stock Incentive Plan was approved by our stockholders in June 2010, our Amended and Restated 2010 Plan was approved by our stockholders in May 2013, an amendment to increase the number of shares authorized for issuance under our Amended and Restated 2010 Plan was approved by our stockholders in May 2015, our Second Amended and Restated 2010 Plan was approved by our stockholders in May 2017, our Third Amended and Restated 2010 Plan was approved by our stockholders in May 2018, an amendment to increase the number of shares authorized for issuance under our Third Amended and Restated 2010 Plan was approved by our stockholders in May 2019, and a second amendment to increase the number of shares authorized for issuance under our Third Amended and Restated 2010 Plan was approved by our stockholders in June 2020. Our Fourth Amended and Restated 2010 Plan was approved by our stockholders in May 2021 to increase the number of shares authorized for issuance pursuant thereto to 23,190,000.
(2)Represents option awards granted to new employees outside of our stock incentive plans, each as a material inducement to such employee’s acceptance of employment. Each such grant was approved by our compensation committee pursuant to the inducement grant exception under Nasdaq Stock Market Rule 5635(c)(4) and disclosed in a press release. Inducement option awards have an exercise price equal to the closing price of our common stock on the date of the grant. Typically, such inducement stock option awards vest with respect to 25% of the shares underlying the award on the first anniversary of the employee’s date of hire, and as to an additional 6.25% of the shares underlying the award at the end of each subsequent three-month period, subject to the optionholder continuing to provide services to us on the applicable vesting date.
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended December 31, 2022, the members of our compensation committee were Dr. Hohneker, Dr. Kaitin, and Dr. Rubin (Chair).
During the fiscal year ended December 31, 2022, none of our executive officers served as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any other entity that had one or more of its executive officers serving as a member of our board of directors or our compensation committee.
Compensation Committee Report
The information contained in this report shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically request that it be treated as soliciting material or specifically incorporate it by reference into a document filed under the Securities Act or the Exchange Act. The compensation committee has reviewed and discussed the Compensation Discussion and Analysis, required by Item 402(b) of Regulation S-K with Curis’s management. Based on this review and discussion, the compensation committee recommended to our board of directors that the Compensation Discussion and Analysis be included in this proxy statement.
Submitted by the compensation committee of our board of directors.
Marc Rubin, M.D. (Chair)
Kenneth I. Kaitin, Ph.D.
John A. Hohneker, M.D.
PROPOSAL 2 — ADVISORY VOTE ON EXECUTIVE COMPENSATION
We are providing our stockholders the opportunity to vote to approve, on an advisory, non-binding basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules. This proposal, which is commonly referred to as “say-on-pay,” is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which added Section 14A to the Exchange Act. At the 2017 annual meeting, our stockholders approved, on an advisory, non-binding basis, an annual advisory vote on the compensation of our executive officers. In accordance with the results of this vote, our board of directors determined to implement an advisory vote on the compensation of our executive officers every year until the next vote in 2023 on the preferred frequency of such advisory votes.
We held our most recent “say-on-pay” advisory stockholder vote on the compensation of our executive officers at the 2022 annual meeting. This advisory vote was supported by our stockholders with 96.16% of the voted shares voting “for” such proposal.Our compensation committee considered the results of this advisory stockholder vote in determining the compensation for our executive officers in 2023. The compensation committee continues to believe that its pay-for-performance philosophy in determining the compensation of executive officers, as further described herein, best achieves the desired alignment of our compensation objectives.
Our executive compensation programs are designed to attract and retain key executive officers critical to our long-term success, to recognize and reward overall company performance and each executive officer’s individual performance and level of responsibility, as well as to align our executive officers’ incentives with stockholders’ interests. Cash compensation, including annual cash bonus incentive, is a basic element of our executive officers’ total compensation. In addition, a significant portion of our executive officers’ realizable compensation is tied to the performance of our company and our stock price. We believe stock-based compensation aligns our executive officers’ interest and our stockholders’ interest in incentivizing our executive officers to achieve performance objectives and to create long-term stockholder value. If our executive officers are unable to create long-term stockholder value and the price of our stock declines, then the realizable value of such executive officer’s long-term stock-based compensation also declines. Consistent with its pay-for-performance philosophy, our compensation committee may elect to decrease any executive officer’s compensation, or take other corrective or remedial steps, for non-performance.
The “Executive and Director Compensation and Related Matters” section of this proxy statement beginning on page 22, including “Compensation Discussion and Analysis,” describes in detail our executive compensation programs and the decisions made by the compensation committee and our board of directors with respect to the fiscal year ended December 31, 2022.Our board of directors is asking stockholders to approve, on an advisory basis, a non-binding vote on the following resolution:
RESOLVED, that the compensation paid to Curis’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, the compensation tables and any related material disclosed in this proxy statement, is hereby approved.
As an advisory vote, this proposal is not binding. The outcome of this advisory vote does not overrule any decision by us or our board of directors (or any committee thereof), create or imply any change to our fiduciary duties or those of our board of directors (or any committee thereof), or create or imply any additional fiduciary duties for us or our board of directors (or any committee thereof). However, our compensation committee and board of directors value the opinions expressed by our stockholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for named executive officers.
Board Recommendation
OUR BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE TO APPROVE, ON AN ADVISORY BASIS, THE COMPENSATIONAUTHORIZED SHARES OF OUR NAMED EXECUTIVE OFFICERS BY VOTING “FOR” THIS PROPOSAL.
PROPOSAL 3—ADVISORY VOTE ONCAPITAL STOCK FROM 232,812,500 TO 460,625,000 AND THE FREQUENCY
NUMBER OF FUTURE EXECUTIVE COMPENSATION ADVISORY VOTES
We are providing our stockholders the opportunity to vote to approve, on an advisory, non-binding basis, the frequency of future executive compensation advisory votes in accordance with the SEC’s rules. We held our second “say-on-frequency” advisory stockholder vote at our May 2017 annual meeting at which we sought stockholder approval, on an advisory basis, a frequency of every three years on future executive compensation advisory votes. After considering the results of our May 2017 annual meeting where our stockholders approved a frequency of every one year, we have held advisory votes on the compensation of our named executive officers every one year. In this Proposal 3, we are asking our stockholders to cast a non-binding advisory vote regarding the frequency of future executive compensation advisory votes. Stockholders may vote for a frequency of every one, two, or three years, or may abstain.
After results of our May 2017 annual meeting, our board of directors believes that the executive compensation advisory vote should be held every one year, and therefore our board of directors recommends that you vote for a frequency of every one year for future executive compensation advisory votes.
Our board of directors will take into consideration the outcome of this vote in making a determination about the frequency of future executive compensation advisory votes. However, because this vote is advisory and non-binding, our board of directors may decide that it is in the best interests of our stockholders and the company to hold the advisory vote to approve executive compensation more frequently.
Board Recommendation
AUTHORIZED SHARES OF OUR BOARD OF DIRECTORS BELIEVES THAT HOLDING THE EXECUTIVE COMPENSATION ADVISORY VOTE ONCE EVERY YEAR IS IN THE BEST INTERESTS OF CURIS AND ITS STOCKHOLDERS AND RECOMMENDS VOTING FOR A FREQUENCY OF EVERY ONE YEAR.
PROPOSAL 4 — RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The audit committee has appointed PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023. PricewaterhouseCoopers LLP has served as our independent registered public accounting firm since 2002. The PricewaterhouseCoopers LLP audit engagement partner rotates every five years. Although stockholder approval of the audit committee’s appointment of PricewaterhouseCoopers LLP is not required by law, the board and the audit committee believe that it is advisable to give stockholders an opportunity to ratify this appointment. If the stockholders do not ratify the appointment of PricewaterhouseCoopers LLP, the audit committee will reconsider the matter. A representative of PricewaterhouseCoopers LLP is expected to be present at the meeting to respond to appropriate questions and to make a statement if he or she so desires.
Board Recommendation
OUR BOARD OF DIRECTORS BELIEVES THAT THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS CURIS’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2023COMMON STOCK FROM 227,812,500 TO 455,625,000 IS IN THE BEST INTERESTS OF CURIS AND OUR STOCKHOLDERS AND, THEREFORE, RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL.
PROPOSAL 2 — ADOPTION AND APPROVAL OF AN AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED, TO EFFECT A REVERSE STOCK SPLIT
We are seeking stockholder adoption and approval of an amendment to our Restated Certificate of Incorporation, as amended, to effect a reverse stock split of our issued shares of common stock by a ratio of not less than 1-for-5 and not more than 1-for-25, and a proportionate reduction in the number of authorized shares of capital stock and common stock (the “Reverse Stock Split”), with such ratio and the implementation and timing of such Reverse Stock Split to be determined in the discretion of our board of directors without further approval or authorization of our stockholders. As further described below, if this proposal is adopted and approved, our board of directors may determine to effect the Reverse Stock Split at any time prior to December 31, 2023 by a ratio of not less than 1-for-5 and not more than 1-for-25, and may determine to effect such Reverse Stock Split promptly after the Special Meeting if such stockholder approval is received. As set forth on Appendix B, by adoption and approval of this Proposal 2, the stockholders will be deemed to have adopted and approved an amendment to effect the Reverse Stock Split at each of the ratios between and including 1-for-5 and 1-for-25.
The form of the proposed certificate of amendment to our Restated Certificate of Incorporation, as amended, to effect the Reverse Stock Split is attached as Appendix B to this proxy statement. Adoption and approval of the Reverse Stock Split Proposal (this Proposal 2) would permit (but not require) our board of directors to amend our Restated Certificate of Incorporation to effect the Reverse Stock Split by a ratio of not less than 1-for-5 and not more than 1-for-25 with the exact ratio to be set within this range as determined by our board of directors in its sole discretion, provided that the board of directors must determine to effect the Reverse Stock Split and such amendment must be filed with the Secretary of State of the State of Delaware no later than December 31, 2023. If our board of directors determines to effect the Reverse Stock Split, (i) the exact ratio of the Reverse Stock Split will be determined by the board of directors prior to the effective time of the Reverse Stock Split and will be publicly announced by us prior to such effective time and (ii) the amendment to the Restated Certificate of Incorporation setting forth the ratio approved by the Board will be filed with the Secretary of State of the State of Delaware and any amendment to effect the Reverse Stock Split at any of the other stockholder-approved ratios will be abandoned. We believe that enabling our board of directors to set the ratio of the Reverse Stock Split within the stated range and within the specified time period will provide us with the flexibility to implement the Reverse Stock Split in a manner and at a time designed to maximize the anticipated benefits for our stockholders.
Criteria to be Used for Decision to Apply the Reverse Stock Split
If our stockholders adopt and approve the Reverse Stock Split Proposal, our board of directors will be authorized to proceed with the Reverse Stock Split. The exact ratio of the Reverse Stock Split, within the range of 1-for-5 to 1-for-25, would be determined by our board of directors and publicly announced by us prior to the effective time of the Reverse Stock Split. In determining whether to proceed with the Reverse Stock Split and setting the appropriate ratio for the Reverse Stock Split, if any, following the receipt of stockholder adoption and approval, our board of directors may consider, among other things, factors such as:
•Nasdaq’s minimum price per share requirements and its other listing requirements such as requirements relating to the minimum number of holders;
•the historical trading prices and trading volume of our common stock;
•the number of shares of our common stock outstanding prior to and after the Reverse Stock Split;
•the then-prevailing and expected trading prices and trading volume of our common stock and the anticipated or actual impact of the Reverse Stock Split (including the reduction in the number of outstanding shares) on the trading prices and trading volume for our common stock;
•the anticipated impact of a particular ratio on our ability to reduce administrative and transactional costs;
•business developments affecting us; and
•prevailing general market and economic conditions.
The Reverse Stock Split would also proportionately reduce the number of authorized shares of capital stock and common stock. The Reverse Stock Split will not change the number of authorized shares of preferred stock. The Reverse Stock Split will not change the par value of the common stock or the preferred stock.
Background and Reasons for the Reverse Stock Split
Our board of directors is seeking authority to effect the Reverse Stock Split with the primary intent of increasing the price of our common stock to meet the price criteria for continued listing on Nasdaq. Our common stock is publicly traded and listed on the Nasdaq Capital Market under the symbol “CRIS.” Our board of directors believes that, in addition to increasing the price of our common stock to meet the price criteria for continued listing on the Nasdaq Capital Market, the Reverse Stock Split would also make our common stock more attractive to a broader range of institutional and other investors. Accordingly, for these and other reasons discussed below, we believe that effecting the Reverse Stock Split is in our company’s and the stockholders’ best interests.
If our stockholders adopt and approve the Reverse Stock Split Proposal, our board of directors will be authorized to proceed with the Reverse Stock Split. Our board of directors currently intends to effect the Reverse Stock Split, if adopted and approved.
Our common stock was previously listed on the Nasdaq Global Market under the symbol “CRIS”. The standards of the Nasdaq Global Market required us to maintain, among other things, a $1.00 per share minimum bid price in order to stay in compliance with listing requirements. On October 21, 2022, we received a deficiency letter from the Listing Qualifications Department of the Nasdaq Stock Market notifying us that, for the last 30 consecutive business days, the bid price for our common stock had closed below the minimum $1.00 per share requirement for continued inclusion on the Nasdaq Global Market. We were provided an initial period of 180 calendar days, or until April 19, 2023, to regain compliance with the minimum bid price requirement. On April 20, 2023, our transfer from the Nasdaq Global Market to the Nasdaq Capital Market was approved, and we were provided an additional 180 calendar days (the “Second Compliance Period”), or until October 16, 2023 (the “Second Compliance Date”), to regain compliance with the minimum bid price requirement. The transfer became effective at the opening of business on April 24, 2023.
Since April 24, 2023, our common stock has been listed on the Nasdaq Capital Market under the symbol “CRIS”. If at any time before the Second Compliance Date, the bid price for our common stock closes at or above $1.00 per share for a minimum of 10 consecutive trading days, we may be eligible to regain compliance with the minimum bid price requirement. However, under certain circumstances Nasdaq could require that the bid price exceed $1.00 for more than ten consecutive trading days before determining that we comply with Nasdaq’s continued listing standards. We may not be able to meet the $1.00 minimum bid price requirement of the Nasdaq Capital Market unless we effect a reverse stock split no later than ten business days prior to the Second Compliance Date, or September 29, 2023, to increase the per share market price of our common stock in order to regain compliance. Therefore, our board of directors may determine to effect the Reverse Stock Split to the extent necessary in order to maintain our listing on the Nasdaq Capital Market.
If we do not regain compliance with the minimum bid price requirement by the Second Compliance Date, or we do not comply with the terms of the Second Compliance Period, then Nasdaq will provide notice to us that our common stock will be subject to delisting. At that time, we may appeal the Nasdaq staff’s delisting determination to a Hearings Panel (the “Panel”). We would expect our common stock to remain listed pending the Panel’s decision. However, there can be no assurance that, even if we do appeal the Nasdaq staff’s delisting determination to the Panel, such appeal would be successful.
In the event we are delisted from Nasdaq, our shares may commence trading on the OTC Markets or another quotation medium. As a result, an investor would likely find it more difficult to trade or obtain accurate price quotations for our shares. Delisting would likely also reduce the visibility, liquidity, and value of our common stock, reduce institutional investor interest in our company, and may increase the volatility of our common stock. Delisting could also cause a loss of confidence of potential industry partners, lenders, and employees, which could further harm our business and our future prospects. We believe that effecting the Reverse Stock Split will help us avoid delisting from Nasdaq and any resulting consequences.
In addition, in determining to seek authorization for the Reverse Stock Split, our board of directors considered that the implementation of a reverse stock split is likely to increase the trading price of our common stock as a result of the reduction in the number of shares outstanding. Our board of directors believes that the increased market price of our common stock expected as a result of implementing the Reverse Stock Split may improve marketability and liquidity of our common stock and may encourage interest and trading in our common stock.
For example, some investors may prefer to invest in stocks that trade at a per-share price range more typical of companies listed on The Nasdaq Capital Market or the Nasdaq Global Market, and, because of the trading volatility often
associated with low-priced stocks, certain institutional investors may be prohibited in their investment charters from purchasing stocks that trade below certain minimum price levels. In addition, brokerage firms may be reluctant to recommend lower-priced stocks to their clients. Further, brokerage commissions paid by investors, as a percentage of a total transaction, tend to be higher for lower-priced stocks. As a result, certain investors may also be dissuaded from purchasing lower-priced stocks. Our board of directors believes that the higher share price that may result from the Reverse Stock Split could enable institutional investors and brokerage firms with such policies and practices to invest in our common stock.
Although we expect that the Reverse Stock Split will increase the market price of our common stock as a result of having fewer outstanding shares, the Reverse Stock Split may not result in a permanent increase in the market price of our common stock, which will continue to be dependent on many factors, including general economic, market and industry conditions and other factors detailed from time to time in the reports we file with the SEC.
Certain Risks Associated with the Reverse Stock Split
Reducing the number of outstanding shares of our common stock through the Reverse Stock Split is intended, absent other factors, to increase the per-share trading price of our common stock above $1.00 to meet the minimum bid price requirement. However, other factors, such as our financial results, market conditions and the market perception of our business, may adversely affect the trading price of our common stock. As a result, there can be no assurance that the Reverse Stock Split, if completed, will result in the intended benefits described above, that the trading price of our common stock will increase following the Reverse Stock Split, that the trading price of our common stock will not decrease in the future or that we will remain in or be able to resume compliance with the Nasdaq listing requirement. Additionally, we cannot assure you that the trading price per share of our common stock after the Reverse Stock Split will increase in proportion to the reduction in the number of shares of our common stock outstanding before the Reverse Stock Split. Additionally, there can be no guarantee that the closing bid price of our common stock will remain at or above $1.00 for 10 consecutive business days, whether following the Reverse Stock Split or otherwise, which is required to cure our current Nasdaq listing standard deficiency. Accordingly, the total market capitalization of our common stock after the Reverse Stock Split may be lower than the total market capitalization before the Reverse Stock Split, including for reasons unrelated to the Reverse Stock Split.
The proposed Reverse Stock Split may decrease the liquidity of our common stock and result in higher transaction costs. The liquidity of our common stock may be negatively impacted by the Reverse Stock Split, given the reduced number of shares that would be outstanding after the Reverse Stock Split, particularly if the per-share trading price does not increase as a result of the Reverse Stock Split. For instance, if the Reverse Stock Split is implemented, it may result in some stockholders owning “odd lots” (less than 100 shares) of common stock. Odd lot shares may be more difficult to sell, and brokerage commissions and other costs of transactions in odd lots may be higher than the costs of transactions in “round lots” of even multiples of 100 shares. If we effect the Reverse Stock Split, the resulting per-share stock price may nevertheless fail to attract institutional investors and may not satisfy the investing guidelines of such investors and, consequently, the trading liquidity of our common stock may not improve. Accordingly, the Reverse Stock Split may not achieve the desired results of increasing marketability of our common stock as described above.
You should also keep in mind that the implementation of the Reverse Stock Split does not have an effect on the actual or intrinsic value of our business or a stockholder’s proportional ownership in our company (subject to the treatment of fractional shares). However, should the overall value of our common stock decline after the proposed Reverse Stock Split, then the actual or intrinsic value of the shares of our common stock held by you will also proportionately decrease as a result of the overall decline in value.
Reservation of Right to Abandon the Amendment to our Restated Certificate of Incorporation and the Reverse Stock Split
Our board of directors reserves the right to abandon the amendment to our Restated Certificate of Incorporation described in this Reverse Stock Split Proposal without further action by our stockholders, even if stockholders adopt and approve such amendment at the Special Meeting, if at any time prior to the filing or effectiveness of a certificate of amendment to our Restated Certificate of Incorporation to effect the Reverse Stock Split, our board of directors determines, in its sole discretion, that the Reverse Stock Split is no longer in the best interest of our company and our stockholders. If we do not file a certificate of amendment effecting the Reverse Stock Split with the Secretary of State of the State of Delaware on or before December 31, 2023, our board of directors will be deemed to have abandoned the Reverse Stock Split.
By voting in favor of the amendment to our Restated Certificate of Incorporation, stockholders are also expressly authorizing the board of directors to determine not to proceed with, or abandon, the Reverse Stock Split if it should so decide. Additionally, if our board of directors determines to effect the Reverse Stock Split, the amendment to the Restated Certificate of Incorporation setting forth the ratio approved by the Board will be filed with the Secretary of State of the State of Delaware and any amendment to effect the Reverse Stock Split at any of the other stockholder-approved ratios will be abandoned.
Procedure for Implementing the Reverse Stock Split
If stockholders adopt and approve the Reverse Stock Split Proposal and if our board of directors elects to implement the Reverse Stock Split (with the ratio to be determined in the discretion of the board of directors within the parameters described), the Reverse Stock Split would become effective upon the filing of a certificate of amendment to our Restated Certificate of Incorporation with the Secretary of State of the State of Delaware (or at a later date specified in the certificate of amendment) and any amendment to effect the Reverse Stock Split at any of the other stockholder-approved ratios will be abandoned. The exact timing of the filing of the certificate of amendment that will effect the Reverse Stock Split will be determined by our board of directors, in its sole discretion, provided that in no event shall the filing of the certificate of amendment effecting the Reverse Stock Split occur after December 31, 2023. If a certificate of amendment effecting the Reverse Stock Split has not been filed with the Secretary of State of the State of Delaware on or before December 31, 2023, our board of directors will be deemed to have abandoned the Reverse Stock Split for each of the stockholder-approved ratios.
Effect of the Reverse Stock Split on Holders of Outstanding Common Stock
If our stockholders adopt and approve the Reverse Stock Split Proposal and our board of directors elects to implement the Reverse Stock Split, depending on the ratio for the Reverse Stock Split determined by our board of directors, a minimum of every 5 and a maximum of every 25 shares of issued common stock will be combined into one new share of common stock.
If implemented, the Reverse Stock Split will have the effect of decreasing the number of shares of our common stock issued, and a corresponding decrease in the number of shares of capital stock and common stock we are authorized to issue. The actual number of shares of common stock authorized, issued, and issued and outstanding after giving effect to the Reverse Stock Split, if implemented, will depend on the ratio for the Reverse Stock Split that is ultimately determined by our board of directors. As of July 31, 2023, there were no shares of common stock held by us in treasury, and therefore the Reverse Stock Split is not expected to have any effect on treasury shares.
Except for adjustments that may result from the treatment of fractional shares as described below, the Reverse Stock Split will affect all holders of our common stock uniformly and will not affect any stockholder’s percentage ownership interest in our company. In addition, the Reverse Stock Split will not affect any stockholder’s proportionate voting power (subject to the treatment of fractional shares).
After the effective time of the Reverse Stock Split, our common stock will have a new Committee on Uniform Securities Identification Procedures (CUSIP) number, which is a number used to identify our equity securities, and stock certificates with the older CUSIP number will need to be exchanged for stock certificates with the new CUSIP number by following the procedures described below. The Reverse Stock Split is not intended as, and would not have the effect of, a “going private transaction” covered by Rule 13e-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). After the Reverse Stock Split, we will continue to be subject to the periodic reporting and other requirements of the Exchange Act.
Assuming Reverse Stock Split ratios of 1-for-5, 1-for-15 and 1-for-25, which reflect the low end, middle and high end of the range that our stockholders are being asked to adopt and approve, the following table sets forth (i) the number of shares of our common stock that would be issued and outstanding, (ii) the number of shares of our common stock that would be reserved for issuance pursuant to outstanding options and (iii) the weighted-average exercise price of outstanding options, each giving effect to the Reverse Stock Split and based on 117,704,554 shares of common stock outstanding as of July 31, 2023, without giving effect to any adjustments for fractional shares.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | Before
Reverse
Stock Split | | | Reverse
Stock
Split Ratio
of 1-for-5 | | | Reverse
Stock
Split Ratio
of 1-for-15 | | | Reverse
Stock
Split Ratio
of 1-for-25 | |
| Number of Shares of Common Stock Issued and Outstanding | | 117,704,554 | | | 23,540,911 | | | 7,846,970 | | | 4,708,182 | |
| Number of Shares of Common Stock Reserved for Issuance Pursuant to Outstanding Options | | 17,278,971 | | | 3,455,794 | | | 1,151,931 | | | 691,159 | |
| Weighted-Average Exercise Price of Outstanding Options | | $ | 2.44 | | | $ | 12.20 | | | $ | 36.60 | | | $ | 61.00 | |
If our board of directors does not implement the Reverse Stock Split prior to December 31, 2023, the authority granted in this proposal to implement the Reverse Stock Split would terminate.
Our directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in the Reverse Split Proposal, except to the extent of their ownership in shares of our common stock and securities exercisable for our common stock, which shares and securities would be subject to the same proportionate adjustment in accordance with the terms of the Reverse Stock Split as all other outstanding shares of our common stock and securities exercisable for our common stock.
Beneficial Holders of Common Stock (i.e., stockholders who hold in street name)
If our board of directors elects to implement the Reverse Stock Split, then, for purposes of implementing the Reverse Stock Split, we intend that shares held by stockholders through a bank, brokerage firm or other nominee will be treated in the same manner as registered stockholders whose shares are registered in their names. Banks, brokerage firms or other nominees will be instructed to effect the Reverse Stock Split for their beneficial holders holding our common stock in street name. However, these banks, brokerage firms or other nominees may have different procedures than registered stockholders for processing the Reverse Stock Split. Stockholders who hold shares of our common stock with a bank, brokerage firm or other nominee and who have any questions in this regard are encouraged to contact their banks, brokerage firms or other nominees.
Registered “Book-Entry” Holders of Common Stock (i.e., stockholders that are registered on our transfer agent’s books and records but do not hold stock certificates)
Certain of our registered holders of common stock may hold some or all of their shares electronically in book-entry form with our transfer agent. These stockholders do not have physical stock certificates evidencing their ownership of the common stock. They are, however, provided with a periodic statement reflecting the number of shares of common stock registered in their accounts.
Stockholders who hold shares of common stock electronically in book-entry form with our transfer agent will not need to take further action to receive whole shares of post-Reverse Stock Split common stock, because the exchange will be automatic.
Exchange of Stock Certificates
If the Reverse Stock Split is effected, each certificate that immediately prior to the effectiveness of the Reverse Stock Split represented shares of common stock (“Old Certificate(s)”) shall, from and after the effective time of the Reverse Stock Split be deemed to represent the whole number of shares of common stock held by such stockholder post-Reverse Stock Split. However, stockholders holding certificated shares (i.e., shares represented by one or more physical stock certificates) will be requested to exchange their Old Certificate(s) for shares held in book-entry form at the transfer agent in their direct registration system representing the appropriate number of whole shares of our common stock resulting from the Reverse Stock Split. Stockholders of record upon the effective time of the Reverse Stock Split will be furnished the necessary materials and instructions for the surrender and exchange of their Old Certificate(s) at the appropriate time by our transfer agent, Computershare Trust Company, N.A. Stockholders will not have to pay any transfer fee or other fee in connection with such exchange, except stockholders will be responsible for the applicable fees for lost certificates. As soon as practicable after the effective time of the Reverse Stock Split, our transfer agent will send a transmittal letter to each stockholder advising such holder of the procedure for surrendering Old Certificate(s) in exchange for new shares held in book-entry. Your Old Certificate(s) representing pre-split shares cannot be used for either transfers or deliveries. Accordingly, you must exchange your Old Certificate(s) in order to effect transfers or deliveries of your shares.
YOU SHOULD NOT SEND YOUR OLD CERTIFICATES NOW. YOU SHOULD SEND THEM ONLY IF WE EFFECT A REVERSE STOCK SPLIT AND YOU RECEIVE A LETTER OF TRANSMITTAL FROM OUR TRANSFER AGENT.
As soon as practicable after the surrender to our transfer agent of any Old Certificate(s), together with a properly completed and duly executed letter of transmittal and any other documents our transfer agent may specify, our transfer agent will have its records adjusted to reflect that the shares represented by such Old Certificate(s) are held in book-entry in the name of such person.
Until surrendered as contemplated herein, a stockholder’s Old Certificate(s) shall be deemed at and after the effective time of the Reverse Stock Split to represent the number of whole shares of our common stock, as applicable, resulting from the Reverse Stock Split.
Any stockholder whose Old Certificate(s) have been lost, destroyed or stolen will be entitled to new shares in book-entry only after complying with the requirements that we and our transfer agent customarily apply in connection with lost, stolen or destroyed certificates.
No service charges, brokerage commissions or transfer taxes shall be payable by any holder of any Old Certificate, except that if any book-entry shares are to be issued in a name other than that in which the Old Certificate(s) are registered, it will be a condition of such issuance that (1) the person requesting such issuance must pay to us any applicable transfer taxes or establish to our satisfaction that such taxes have been paid or are not payable, (2) the transfer complies with all applicable federal and state securities laws, and (3) the surrendered certificate is properly endorsed and otherwise in proper form for transfer.
Any stockholder who wants to continue holding certificated shares may request new certificate(s) from our transfer agent.
Fractional Shares
If our board of directors elects to implement the Reverse Stock Split, fractional shares will not be issued. Stockholders of record and stockholders who hold their shares through a bank, broker, custodian or other nominee who otherwise would be entitled to receive a fractional share as a result of the Reverse Stock Split will have such fractional share of common stock rounded up to the nearest whole share. In any event, cash will not be paid for fractional shares.
Effect of the Reverse Stock Split on Employee Plans, Options and Restricted Stock Awards
Pursuant to the various instruments governing our then-outstanding restricted stock and stock option awards, in connection with the Reverse Stock Split, our board of directors will reduce the number of shares of common stock issued under such restricted stock awards or issuable upon the exercise of such stock options in proportion to the ratio of the Reverse Stock Split and proportionately increase the exercise price of our outstanding stock options. In connection with such proportionate adjustments, the number of shares of common stock issued under such restricted stock awards will be rounded up to the nearest whole share, the number of shares of common stock issuable upon exercise of outstanding stock options will be rounded down to the nearest whole share, and the exercise prices of outstanding stock options will be rounded up to the nearest cent.
No Appraisal Rights
Stockholders do not have the right to dissent and obtain appraisal of, or payment for, such stockholder’s capital stock under the Delaware General Corporation Law, our Restated Certificate of Incorporation, or our bylaws in connection with the Reverse Stock Split.
Accounting Matters
As of the effective date of the Reverse Stock Split, the stated capital on our balance sheet attributable to our common stock would be reduced proportionately based on the selected exchange ratio, and the additional paid-in capital account would be credited with the amount by which the stated capital is reduced. In future financial statements, we would restate net income or loss per share and other per share amounts for periods ending before the Reverse Stock Split to give retroactive effect to the Reverse Stock Split. The per share net income or loss and net book value of our common stock would be increased because there would be fewer shares of our common stock outstanding.
Material U.S. Federal Income Tax Consequences of the Reverse Stock Split
The following discussion is a summary of the material U.S. federal income tax consequences of the proposed Reverse Stock Split to U.S. Holders (as defined below). This discussion is based on the Internal Revenue Code of 1986, as amended, or “theCode,” U.S. Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the U.S. Internal Revenue Service, which we refer to as “theIRS”, in each case in effect as of the date of this proxy statement. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a U.S. Holder. We have not
sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a court will not take a contrary position to that discussed below regarding the tax consequences of the proposed Reverse Stock Split.
For purposes of this discussion, a “U.S. Holder” is a beneficial owner of our common stock that, for U.S. federal income tax purposes, is or is treated as:
•an individual who is a citizen or resident of the United States;
•a corporation (or any other entity or arrangement treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof, or the District of Columbia;
•an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
•a trust if (1) its administration is subject to the primary supervision of a court within the United States and all of its substantial decisions are subject to the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.
This discussion is limited to U.S. Holders who hold our common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all U.S. federal income tax consequences relevant to the particular circumstances of a U.S. Holder, including the impact of the Medicare contribution tax on net investment income. In addition, it does not address consequences relevant to U.S. Holders that are subject to special rules, including, without limitation:
•Financial institutions;
•Insurance companies;
•Real estate investment trusts;
•Regulated investment companies;
•Grantor trusts;
•Tax-exempt organizations;
•Dealers or traders in securities, commodities or currencies;
•Stockholders who hold common stock as part of a position in a straddle or as part of a hedging, conversion or integrated transaction for U.S. federal income tax purposes or U.S. holders that have a functional currency other than the U.S. dollar; or
•Stockholders who actually or constructively own 10% or more of our voting stock.
If a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) is the beneficial owner of our common stock, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. Accordingly, partnerships (and other entities treated as partnerships for U.S. federal income tax purposes) holding our common stock and the partners in such entities should consult their own tax advisors regarding the U.S. federal income tax consequences of the proposed Reverse Stock Split to them.
In addition, the following discussion does not address the U.S. federal estate and gift tax, alternative minimum tax, or state, local and non-U.S. tax law consequences of the proposed Reverse Stock Split. Furthermore, the following discussion does not address any tax consequences of transactions effectuated before, after or at the same time as the proposed Reverse Stock Split, whether or not they are in connection with the proposed Reverse Stock Split.
STOCKHOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE PROPOSED REVERSE STOCK SPLIT ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.
The proposed Reverse Stock Split is intended to be treated as a “recapitalization” for U.S. federal income tax purposes pursuant to Section 368(a)(1)(E) of the Code. As a result, a U.S. Holder generally should not recognize gain or loss upon the proposed Reverse Stock Split for U.S. federal income tax purposes, except with respect to any fractional share of our common stock received as a result of the rounding up of any fractional shares that otherwise would be issued, as discussed below. Subject to the following discussion regarding a U.S. Holder’s receipt of a whole share of our common stock in lieu of a fractional share, a U.S. Holder’s aggregate adjusted tax basis in the shares of our common stock received pursuant to the proposed Reverse Stock Split should equal the aggregate adjusted tax basis of the shares of our common stock surrendered. The U.S. Holder’s holding period in the shares of our common stock received pursuant to the proposed Reverse Stock Split should include the holding period in the shares of our common stock surrendered. U.S. Treasury Regulations provide detailed rules for allocating the tax basis and holding period of shares of common stock surrendered in a recapitalization to shares received in the recapitalization. U.S. Holders of shares of our common stock acquired on different dates and at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.
As described above under “Fractional Shares,” no fractional shares of our common stock will be issued as a result of the Reverse Stock Split. Instead, stockholders of record and stockholders who hold their shares through a bank, broker, custodian or other nominee who otherwise would be entitled to receive a fractional share as a result of the Reverse Stock Split will have such fractional share of common stock rounded up to the nearest whole share. The U.S. federal income tax consequences of the receipt of such additional fraction of a share of our common stock are not clear. A U.S. Holder who receives one whole share of our common stock in lieu of a fractional share may recognize income or gain in an amount not to exceed the excess of the fair market value of such share over the fair market value of the fractional share to which such U.S. Holder was otherwise entitled. We are not making any representation as to whether the receipt of one whole share in lieu of a fractional share will result in income or gain to any stockholder, and stockholders are urged to consult their own tax advisors as to the possible tax consequences, including the effect on the U.S. Holder’s adjusted tax basis, of receiving a whole share in lieu of a fractional share in the Reverse Stock Split.
No gain or loss will be recognized by us as a result of the proposed Reverse Stock Split.
Board Recommendation
OUR BOARD OF DIRECTORS BELIEVES THAT THE ADOPTION AND APPROVAL OF THE AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION TO EFFECT THE REVERSE STOCK SPLIT DESCRIBED ABOVE IS IN THE BEST INTERESTS OF CURIS AND OUR STOCKHOLDERS AND, THEREFORE, RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL.
PROPOSAL 3— ADJOURNMENT PROPOSAL
Our board of directors believes that if the number of votes cast at the Special Meeting is insufficient to adopt and approve the Authorized Shares Proposal (Proposal 1) and the Reverse Stock Split Proposal (Proposal 2), it may be in the best interests of the stockholders to enable our board of directors to continue to seek to obtain a sufficient number of additional votes to adopt and approve the Authorized Shares Proposal and/or the Reverse Stock Split Proposal.
In the Adjournment Proposal, we are asking stockholders to authorize the holder of any proxy solicited by our board of directors to vote in favor of adjourning the Special Meeting or any adjournment or postponement thereof. If our stockholders approve this proposal, we could adjourn the Special Meeting, and any adjourned session of the Special Meeting, to use the additional time to solicit additional proxies in favor of either or both of the Authorized Shares Proposal or the Reverse Stock Split Proposal.
Additionally, approval of the Adjournment Proposal could mean that, in the event we have not received sufficient votes to adopt and approve either or both of the Authorized Shares Proposal or the Reverse Stock Split Proposal, or we have received proxies indicating that a majority in voting power of the votes to be cast by holders of our common stock will vote against one or both of the Authorized Shares Proposal or the Reverse Stock Split Proposal, we could adjourn the Special Meeting without a vote on the Authorized Shares Proposal and/or the Reverse Stock Split Proposal and use the additional time to solicit the holders of those shares to change their vote in favor of the Authorized Shares Proposal and/or the Reverse Stock Split Proposal.
Board Recommendation
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL.
OTHER MATTERS
The board knows of noNo other business that will be presented for consideration at the annual meetingSpecial Meeting other than that described above. However, if any other business should come before the annual meeting, it is the intention of the persons named in the enclosed proxy card to vote, or otherwise act, in accordance with their best judgment on such matters.
If a stockholder fails to provide timely notice of a proposal to be presented at the 2023 annual meeting, the proxies designated by the board will have discretionary authority to vote on any such proposal.
Stockholder Proposals for 2024 Annual Meeting
Any proposal that a stockholder of Curis wishes to be considered for inclusion in our proxy statement and proxy for the 2024 annual meeting of stockholders must be submitted to our secretary at our offices, 128 Spring Street, Building C – Suite 500, Lexington, MA 02421, no later than December 13, 2023.
If a stockholder of Curis wishes to present a proposal at the 2024 annual meeting, but does not wish to have the proposal considered for inclusion in our proxy statement, and proxy, including with respect to the nomination of directors, such stockholder must also give written notice to our secretary at the address noted above. The secretary must receive such notice no later than February 23, 2024 and no earlier than January 24, 2045.2024. However, if the date of the 2024 annual meeting is advanced by more than 30 days, or delayed by more than 60 days, from the first anniversary of the 2023 annual meeting, the secretary must receive such notice not earlier than the 120th120th day prior to the 2024 annual meeting and not later than the close of business on the later of (A) the 90th90th day prior to the 2024 annual meeting and (B) the tenth day following the day on which notice of the date of the 2024 annual meeting is given or public disclosure of the date of the 2024 annual meeting is made, whichever first occurs. You are also advised to review our bylaws, which contain additional requirements relating to advance notice of stockholder proposals and director nominations, including the requirements of Rule 14a-19 under the Exchange Act.
Solicitation of Proxies
We will bear the costs of soliciting proxies. In addition to solicitations by mail, our directors, officers and regular employees may, without additional remuneration, solicit proxies by telephone, facsimile and personal interviews. We will also request brokerage houses, custodians, nominees and fiduciaries to forward copies of the proxy material to those persons for whom they hold shares and request instructions for voting the proxies. We will reimburse such brokerage houses and other persons for their reasonable expenses in connection with this distribution.
Householding of Annual Meeting Materials
Some banks, brokers and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports.statements. This means that only one copy of this proxy statement or our 2022 annual report to stockholders may have been sent to multiple stockholders in your household. We will promptly deliver a separate copy of either documentthe proxy statement if you write or call us at the following address or telephone number: 128 Spring Street, Building C – Suite 500, Lexington, MA 02421, Attention: Secretary, (617) 503-6500. If you want separate copies of the proxy statement and 2022 annual report to stockholders in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, brokerbrokerage firm or other nominee record holder (if the shares you own are held in “street name”), or you may contact us at the above address or telephone number.
APPENDIX A
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
CURIS, INC.
Curis, Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, does hereby certify:
FIRST: That the Board of Directors of the Corporation has duly adopted resolutions authorizing and approving an amendment to the Restated Certificate of Incorporation of the Corporation to (i) increase the number of authorized shares of capital stock of the Corporation and (ii) increase the number of authorized shares of Common Stock of the Corporation.
SECOND: That the amendment to the Restated Certificate of Incorporation of the Corporation set forth in this Certificate of Amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware by the Board of Directors and stockholders of the Corporation.
THIRD: That upon the effectiveness of this Certificate of Amendment, the first paragraph of Article FOURTH of the Restated Certificate of Incorporation is hereby amended and restated as follows:
“FOURTH: The Corporation is authorized to issue two classes of capital stock, one of which is designated as common stock, $0.01 par value per share (“Common Stock”), and the other of which is designated as preferred stock, $0.01 par value per share (“Preferred Stock”). The total number of shares of both classes of capital stock that the Corporation shall have authority to issue is 460,625,000 shares, consisting of 455,625,000 shares of Common Stock and 5,000,000 shares of Preferred Stock. The Preferred Stock may be issued from time to time in one or more series as set forth in Section (b) of this Article FOURTH. The following is a statement of the designations and the powers, preferences and rights of, and the qualifications, limitations or restrictions applicable to, each class of capital stock of the Corporation.”
CURIS, INC.
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By: Title: | James E. Dentzer President and Chief Executive Officer |
APPENDIX B
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
CURIS, INC.
Curis, Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, does hereby certify:
FIRST: That the Board of Directors of the Corporation has duly adopted resolutions authorizing and approving an amendment to the Restated Certificate of Incorporation of the Corporation.
SECOND: That the amendment to the Restated Certificate of Incorporation of the Corporation set forth in this Certificate of Amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of Delaware by the Board of Directors and stockholders of the Corporation.
THIRD: That upon the effectiveness of this Certificate of Amendment, the first paragraph of Article FOURTH of the Restated Certificate of Incorporation is hereby amended and restated as follows:
“FOURTH: At 5:00 p.m., Eastern Time, on the date of filing of this Certificate of Amendment to the Restated Certificate of Incorporation with the Secretary of State of the State of Delaware (the “Effective Time”), a one-for-[__]1 reverse stock split of the Corporation’s common stock, $0.01 par value per share (the “Common Stock”), shall become effective, pursuant to which each [__]1 shares of Common Stock issued and outstanding and held of record by each stockholder of the Corporation or issued and held by the Corporation in treasury immediately prior to the Effective Time shall be reclassified and combined into one validly issued, fully paid and nonassessable share of Common Stock automatically and without any action by the holder thereof upon the Effective Time and shall represent one share of Common Stock from and after the Effective Time (such reclassification and combination of shares, the “Reverse Stock Split”). The par value of the Common Stock following the Reverse Stock Split shall remain at $0.01 par value per share. If, upon aggregating all of the Common Stock held by a holder of Common Stock immediately following the Reverse Stock Split a holder of Common Stock would otherwise be entitled to a fractional share of Common Stock, the Corporation shall issue to such holder such fractions of a share of Common Stock as are necessary to round the number of shares of Common Stock held by such holder up to the nearest whole share.
Each stock certificate or book entry position that, immediately prior to the Effective Time, represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time shall, from and after the Effective Time, automatically and without the necessity of presenting the same for exchange, represent that number of whole shares of Common Stock after the Effective Time into which the shares formerly represented by such certificate or book entry position have been reclassified (including those fractional shares issued by the Corporation in connection with the Reverse Stock Split to round the number of shares held by such holder at the Effective Time up to the nearest whole share); provided, however, that each stockholder of record holding a certificate or
1 Shall be a whole number determined by the Board of Directors and publicly announced by the Company prior to the Effective Time equal to or greater than five (5) and equal to or less than twenty-five (25) (the “Reverse Stock Split Number”) (it being understood that any such whole number within such range shall, together with the remaining provisions of this Certificate of Amendment not appearing in brackets, constitute a separate amendment being approved and adopted by the board and stockholders in accordance with Section 242 of the General Corporation Law of the State of Delaware).
2 This number will be a whole number equal to the sum of (x) 5,000,000 shares of Preferred Stock plus (y) a number of shares of Common Stock ascertained by dividing (i) the total number of authorized shares of Common Stock set forth in the Restated Certificate of Incorporation as in effect immediately prior to the Effective Time by (ii) the Reverse Stock Split Number (it being understood that any such whole number determined by such formula shall, together with the remaining provisions of this Certificate of Amendment not appearing in brackets, constitute a separate amendment being approved and adopted by the board and stockholders in accordance with Section 242 of the General Corporation Law of the State of Delaware).
3 This number will be a whole number equal to a number of shares of Common Stock ascertained by dividing (i) the total number of authorized shares of Common Stock set forth in the Restated Certificate of Incorporation as in effect immediately prior to the Effective Time by (ii) the Reverse Stock Split Number (it being understood that any such whole number determined by such formula shall, together with the remaining provisions of this Certificate of Amendment not appearing in brackets, constitute a separate amendment being approved and adopted by the board and stockholders in accordance with Section 242 of the General Corporation Law of the State of Delaware).
IN WITNESS WHEREOF, this Certificate of Amendment of Restated Certificate of Incorporation has been executed by a duly authorized officer of the Corporation on this ___ day of _______, 2023.
CURIS, INC.
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By: Title: | James E. Dentzer President and Chief Executive Officer |
