o | Preliminary Proxy Statement |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
x | Definitive Proxy Statement |
o | Definitive Additional Materials |
o | Soliciting Material |
x | No fee required. |
o |
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and | |||||
o | Fee paid previously with preliminary materials. |
You are cordially invited to attend our annual meeting of stockholders to be held at 9:30 a.m. Eastern Time, on Wednesday, May 4, 2022 in a virtual format.
The annual meeting will be held in a virtual meeting format only, via the Internet, with no physical in-person meeting. Stockholders will be able to attend, vote and submit questions (both before, and for a portion of, the meeting) from any location via the Internet at www.virtualshareholdermeeting.com/DCTH2022.
Information regarding each of the matters to be voted on at the virtual annual meeting is contained in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement. Our Board of Directors recommends that you vote “for” each of the proposals to be presented at the meeting.
Whether or not you plan to attend the virtual annual meeting, we urge you to complete, sign and date the accompanying proxy card and return it in the enclosed postage-prepaid envelope as soon as possible. If you later decide to attend the virtual annual meeting or change your vote, you may withdraw your proxy and vote via the Internet, by telephone or at the virtual annual meeting.
Your vote is important. Whether you own a few shares or many, and whether or not you plan to attend the virtual annual meeting, it is important that your shares be represented and voted.
We thank you for your continued support of Delcath Systems, Inc.
Very truly yours,
Gerard Michel
Chief Executive Officer
1633 Broadway, Suite 22C
New York, New York 10019
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 4, 2022
To the Stockholders of Delcath Systems, Inc.:
Notice is hereby given that the 20222024 Annual Meeting of Stockholders of Delcath Systems, Inc., a Delaware corporation (the “Company”), will be held virtually at 9:3010:00 a.m. Eastern Time on Wednesday, May 4, 2022, in23, 2024 (the “Annual Meeting”). There will not be an option to attend the Annual Meeting at a virtual format only forphysical location.
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The 2022 Annual Meeting will be held in a virtual meeting format only, via Stockholders on the Internet, with no physical in-person meeting. StockholdersRecord Date will be able to attend vote and submit questions (both before, and for a portion of, the meeting) from any location via the Internet at www.virtualshareholdermeeting.com/DCTH2022.
A complete list of registered stockholders entitled to vote at the Annual Meeting will be available for ten days prior tovirtually and vote your shares during the Annual Meeting by first registering at http://www.viewproxy.com/DCTH/2024/ and entering the 11-digit Virtual Control Number on the Notice of Internet Availability of Proxy Materials, on your proxy card or on the instructions that accompanied your proxy materials.
http://www.viewproxy.com/DCTH/2024/.
On or about April 4, 2022, we will commence mailingyour name from that record holder.
By order of the Board
of Directors,Queensbury, New York | John R. Sylvester | Gerard Michel | |||||||||
April |
Chair of the Board |
Chief Executive Officer |
A-1 | ||||||||
| At the |
(1) to elect | ||
qualified (the “Director Election Proposal”); (2) to approve an amendment to the | ||
Company’s 2020 Omnibus Equity Incentive Plan (the “Plan”) to increase by 2,000,000 the number of shares of common stock, $0.01 par value per share (“Common Stock”) available thereunder (the “Plan Proposal”); (3) to ratify the selection, by the Audit Committee of our Board, | ||
2024 (the “Ratification Proposal”); (4) to approve, on a non-binding advisory basis, the compensation of our named executive officers as disclosed in this | ||
such proposal, the “Say-on-Pay Proposal”); and (5) to transact such other business as may properly come before the |
Stockholders entitled to vote. | Only stockholders of record and, in the case of the Series F Preferred Stock, subject to the Maximum Percentage Limitation. At the close of business on the Record Date, there were $25,439,319 shares of Common Stock outstanding, $9,505 shares of our Series E Preferred Stock outstanding, $1,753 shares of our Series E-1 Preferred Stock outstanding, $2,542 shares of our Series F-2 Preferred Stock outstanding and $3,010 shares of our Series F-3 Preferred Stock outstanding. See “Number of votes” below for more information. Common Stock: Each share of our Common Stock outstanding as of the Record Date is entitled to one vote per share on all matters properly brought before the Annual Meeting. Series E Preferred Stock: Each share of our Series E Preferred Stock outstanding as of the Record Date has the right to vote on all matters presented to the stockholders for approval, together with the shares of Common Stock and Series F Preferred Stock, voting together as a single class, on an as-converted to Common Stock basis, based on a conversion price of $10.00 per share and stated value of $1,000 per share, subject to the Beneficial Ownership |
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after giving effect to the conversion, the holder (together with its affiliates and any persons acting as a group together with the holder or any of the holder’s affiliates) (such persons, “Attribution Parties”), would beneficially own in excess of the Beneficial Ownership Limitation. For purposes of determining the |
Series F Preferred Stock: Each share of our Series F Preferred Stock outstanding as of the Record Date has the right to vote on all matters presented to the stockholders for approval, together with the shares of Common Stock and Series E Preferred Stock (subject to the Beneficial Ownership Limitation), voting together as a single class, on an as-converted to Common Stock basis, as determined by dividing the Liquidation Preference (as defined in the Series F Certificate of Designation, and which is three times the original per share price of $1,000 per share, together with any dividends declared but unpaid thereon) by the voting conversion price, which is the lower of (i) the Nasdaq Official Closing Price of the Common Stock immediately preceding March 27, 2023 (or $4.84) and (iii) the average Nasdaq Official Closing Price of the Common Stock for the five trading days immediately preceding March 27, 2023 (or $4.58) (such conversion mechanism, the “Voting Conversion Mechanism”), subject to the Maximum Percentage Limitation. The voting of the Series F Preferred Stock is limited by the Series F Certificate of Designation (as defined below), which provides that the Company shall not affect any conversion of the Series F Preferred Stock, and the portion of the Series F Preferred Stock shall not automatically convert, to the extent that, after giving effect to the conversion, the holder and its affiliates and Attribution Parties would beneficially own in excess of the Maximum Ownership Limitation. For purposes of determining the Maximum Ownership Limitation, the number of shares of Common Stock beneficially owned by such holder and its affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon conversion of the Series F Preferred Stock with respect to which such determination is being made, but will exclude the number of shares of Common Stock which are issuable upon (i) exercise of the remaining unconverted portion of the Series F Preferred Stock beneficially owned by such holder or any of its affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained in Additional Information regarding the Series F Preferred Stock and the terms thereof can be found in the The Series E Preferred Stock and Series F Preferred Stock are collectively referred to herein as the “Preferred Stock.” A complete list of registered stockholders entitled to vote at the Annual Meeting will | ||||||||
Number of votes. | Holders of Common Stock have one vote for each share of Common Stock held and holders of Preferred Stock are entitled to vote with the holders of shares of Common Stock, and not as a separate class, on an as-converted to Common Stock basis, subject to, with respect to the Series E Preferred Stock, the Beneficial Ownership Limitation
As of the •9,505 shares of |
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Attending the virtual meeting. | Stockholders of record as of March You must register by 11:59 p.m. Eastern time on May 20, 2024. The 23, 2024. Online check-in will begin at 9: | ||||||||||
How to | Whether or not you plan to virtually attend the Stockholder of Record: Shares Registered in Your Name If, on the Record Date, your shares were registered directly in your name with our transfer agent, Equiniti, LLC, you are a stockholder of record. As a stockholder of record, you may vote as soon as possible. You may vote using the following methods: | ||||||||||
Go to www.FCRvote.com/DCTH to complete an electronic proxy card. You will be asked to provide the | |||||||||||
Dial 1-866-402-3905 using a touch-tone phone and following the recorded instructions. You will be asked to provide the 11-digit control number included on your Notice, your proxy card (that you may request or that was delivered to you) or the instructions that accompanied your proxy materials. Your vote must be received by 11:59 p.m. (Eastern Time) on May 22, 2024, to be counted. | |||||||||||
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In addition, you may vote online during the | |||||||||||
Beneficial Ownership: Shares Registered in the Name of Bank, broker or other nominee If, on the Record Date, your shares were held not in your name, but rather in an account at a bank, broker or other nominee, then you are the beneficial owner of shares held in “street name.” Your bank, broker or other nominee is considered to be the stockholder of record for purposes of voting If your shares are registered directly in your name with our transfer agent, Equiniti, LLC, you are a stockholder of record. As a stockholder of record, you may vote online during the Annual Meeting, vote by proxy through the internet or telephone or vote by proxy using a proxy card that you may request or that was delivered to you. Whether or not you intend to attend the Annual Meeting, we urge you to vote by |
Quorum. | The presence at the | ||||||||||
Broker non-votes. | A broker |
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vote your shares with respect to “routine” proposals, but not with respect to •Routine proposal. •Non-routine proposals. |
Vote required; treatment of abstentions and broker non-votes. | Proposal | Vote Required to Adopt the Proposal | Effect of Abstentions / Withheld Votes | Effect of “Broker Non-Votes” | ||||||||||||||||||||||
Proposal 1 | Nominees receiving the most “FOR” votes from the holders of For purposes of | No effect. | No effect. | |||||||||||||||||||||||
Proposal 2 – Plan Proposal | The Plan Proposal must receive “FOR” votes from the majority of
For purposes of
| An abstention will have the same effect as a vote “AGAINST” the Plan Proposal. | No effect. |
Vote required; treatment of abstentions and broker non-votes. | Proposal | Vote Required to Adopt the Proposal | Effect of Abstentions / Withheld Votes | Effect of “Broker Non-Votes” | ||||||||||||||||||||||
Proposal 3 -Ratification Proposal | The Ratification Proposal must receive “FOR” votes from the holders of a majority of shares present For purposes of the
| An abstention will have the same effect |
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Proposal 4 -Say-on-Pay Proposal | The Say-on-Pay Proposal must receive “FOR” votes from the holders of a majority of shares present or represented by proxy and entitled to vote For purposes of the Say-on-Pay Proposal, shares of Common Stock and Preferred Stock will vote together as a single class with the holders of Preferred Stock voting on an as-converted to Common Stock basis, subject, with respect to
| An abstention will | No effect. |
Voting recommendation of the | The Board recommends a vote “ | |||||
How to revoke your proxy. | Your proxy is revocable. The procedure you must follow to revoke your proxy depends on how you hold your shares. If you are a registered holder of our Common Stock or Preferred Stock, you may revoke a previously submitted proxy by submitting another valid proxy (whether by telephone, the Internet or mail) or by providing a signed letter of revocation to the Corporate Secretary of the Company before the closing of the polls at the virtual annual meeting on May If you hold shares in | |||||
Expenses and solicitation. | We will bear the cost for the solicitation of proxies, including printing and mailing costs. In addition to the solicitation of proxies by mail, proxies may also be solicited personally by directors, officers and employees of Delcath, without additional compensation to these individuals. We have engaged Alliance Advisors, LLC (“Alliance”) as the proxy solicitor for the Annual Meeting for a base fee of $35,000, plus fees for additional services. We have agreed to reimburse Alliance for its reasonable out of pocket expenses. If you have questions about the proposals or if you need copies of this Proxy Statement or a proxy card, you should contact: Alliance Advisors, LLC 200 Broadacres Drive, 3rd Floor Bloomfield, NJ 08003 1-888-511-2637 DCTH@allianceadvisors.com | |||||
Other matters. | We are not aware of any matters to be presented at the | |||||
Vote results. | The preliminary results of the voting on the proposals will be reported at the | |||||
Who should I call if I have additional questions? | If you Alliance Advisors, LLC 200 Broadacres Drive, 3rd Floor Bloomfield, NJ 08003 1-888-511-2637 DCTH@allianceadvisors.com |
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III DIRECTOR
Nominees
Name | Age | Position with Delcath | Director Since | |||||||
Gerard Michel | 58 | Chief Executive Officer and Director | 2020 | |||||||
Gilad Aharon, Ph.D. | 48 | Director | 2020 |
III Director
Name | Age | Position with Delcath | Director Since | |||||||||||||||||
Steven Salamon | 58 | Director | 2020 |
Name | Age | Position with Delcath | Director Since | |||||||||||||||||
Gerard Michel | 60 | CEO/Director | 2020 | |||||||||||||||||
Gilad Aharon, Ph.D. | 50 | Director | 2020 | |||||||||||||||||
Elizabeth Czerepak | 68 | Director | 2020 | |||||||||||||||||
John R. Sylvester | 60 | Non-Executive Chairman | 2019 |
Additional information concerning Gerard Michel, one of our directors and our Chief Executive Officer, is provided under “Information About Our Executive Officers” and elsewhere in this proxy statement.
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Gilad Aharon, Ph.D. was appointed as a director of the Company in May 2020. Dr. Aharon is a co-founder of and has served as a Portfolio Manager at Rosalind Advisors, Inc., a life sciences-focused investment manager (“Rosalind Advisors”), since 2006. Dr. Aharon holds a Ph.D. in Biophysics and Molecular Biology from the University of Toronto. Prior to co-founding Rosalind Advisors, Dr. Aharon worked as an equity analyst at Infinium Securities Inc.
Vote Required
The affirmative vote of Dr. Aharon was elected to our Board pursuant to a pluralityBoard Appointment Agreement entered into with certain of our shares of Common Stockstockholders, Rosalind Master Fund L.P. and Preferred Stock voting together as a single class with the holders of the Preferred Stock voting on an as-converted to Common Stock basis, present in person or represented by proxy at the 2022 Annual Meeting and entitled to vote, is required with respect to this proposal.
Board Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF THE TWO CLASSRosalind Opportunities Fund I DIRECTOR NOMINEES.
Directors Continuing in Office
Name | Age | Position with Delcath | Director Since | |||||||
Elizabeth Czerepak | 66 | Director | 2020 | |||||||
John R. Sylvester | 58 | Director | 2019 | |||||||
Roger G. Stoll, Ph.D. | 79 | Non-Executive Chairman | 2008 | |||||||
Steven Salamon | 56 | Director | 2020 |
Biographical information, including principal occupation and business experience during the last five years, for our directors whose terms continue is set forth below.
L.P.
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which she was an investor. She received a B.A. magna cum laude in Spanish and Mathematics Education from Marshall University and an MBA from Rutgers University. In 2020, Elizabeth earned a Corporate Director Certificate from Harvard Business School.
Manchester Institute of Science and Technology (U.M.I.S.T.).
Class III Directors (Term Expires at 2024 Annual Meeting)
Roger G. Stoll, Ph.D. was appointed as a director
Dr. Stoll possesses decades of business management experience, including tenures as chairman and chief executive officer, in the pharmaceutical and medical devices and equipment industries and his service on the boards of other companies has allowed him to gain broad-based experience and sensitivity regarding best practices, which he shares with our Board. Dr. Stoll’s many years of Board service to our Company is extremely valuable providing not only his own perspective but legacy knowledge as well.
Steven Salamon was appointed as a director of the Company in May 2020. Mr. Salamon is a co-founder of and has served as Portfolio Manager at Rosalind Advisors, since 2006. Mr. Salamon holds a MBA from the Ivey Business School and an Engineering Physics degree from the University of Toronto. Prior to co-founding Rosalind Advisors, Mr. Salamon worked as an equity analyst at HSBC Securities and RBC Capital Markets (formerly RBC Dominion Securities). Prior to completing his MBA, Mr. Salamon worked as a product engineer for Chrysler Corporation.
Mr. Salamon brings to our Board his manufacturing, financial and investment industry experience, his understanding of our business and our industry and his strategic insight. In addition, Mr. Salamon provides a valuable stockholder perspective to the Board.
9
PROPOSAL 2: APPROVAL OF AN AMENDMENT TO THE DELCATH SYSTEMS, INC. 2021 EMPLOYEE STOCK PURCHASE2020 OMNIBUS EQUITY INCENTIVE PLAN
On August 5, 2021,
The ESPP became effective on the date it was adopted by the Board; however, no offerings have commenced under the ESPP.Annual Meeting. If the ESPP is not approved by the stockholders, the Plan Amendment will become effective as of the date of the Annual Meeting.
Summarytake effect.
2020 Plan
Purpose. The ESPP is intended to encourage stock ownership by all eligible employees of Delcath and designated subsidiaries so that they may share in our growth by acquiring or increasing their proprietary interest in Delcath. The ESPP is designed to encourage eligible employees to remain in the employ of Delcath and its designated subsidiaries. The ESPP is intended to constitute an “employee stock purchase plan” within the meaning of Code Section 423(b).
General. As further described below, the ESPP permits eligible employees to use payroll deductions to purchase shares of the Company’s common stock at a discount. The payroll deductions accumulate over “purchase periods.” On the first day of each purchase period, each participant in the ESPP is automatically granted an option to purchase as many whole shares of the Company’s common stock as the participant will be able to purchase with the payroll deductions credited to his or her account during the purchase period, subject to various limits described below. At the end of the purchase period, the total payroll deductions of all participants are used to purchase common stock directly from Delcath at the discount.
Stock Subject to the ESPP. The stock subject to options under the ESPP will be shares of the Company’s authorized but unissued common stock, or shares of common stock we reacquire, including shares purchased in the open market. The aggregate number of shares of common stock that may be issued pursuant to the ESPP is 260,295, subject to adjustment as described below. If any option granted under the ESPP expires or terminates for any reason without having been exercised in full or ceases for any reason to be exercisable in whole or in part, the unpurchased shares subject thereto will again be available under the ESPP. The ESPP2020 Plan is not a tax-qualified deferred compensation plan under Section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”) and is not intended to be an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974.
Administration
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appropriate under applicable local laws, regulationsissued without restrictions on transfer and proceduresfree from forfeiture conditions. A cash award is an award denominated in cash that is subject to permit or facilitate participationsuch performance goals and service requirements as specified by the Administrator in the ESPP by employeesapplicable award agreement.
EligibilityEmployment
Offerings; Purchase Periods; Exercise Dates; Certain Limits. The Company will make one or more offerings to eligible employees to purchase Common Stock under the ESPP. The Administrator will designate the duration, frequency and start and end dates of each offering under the ESPP and the number and duration of purchase periods within an offering, provided that no offering shall exceed 27 months.
The end date within each purchase period will be the day on which shares ofaccordance with the Company’s Common Stock are purchased by participantsclawback policy or Applicable Law. In addition, the Board may impose such other clawback, recovery or recoupment provisions in an award agreement or compensation clawback policy as the Board determines necessary or appropriate, including a purchase period, which date we refer to as exercise date. On the start datereacquisition right in respect of each purchase period, we will grant to each eligible employee who has then elected to be a participant in the ESPP an option to purchase on the relevant exercise date, at the option price hereinafter provided for, the lowest of (a) a number ofpreviously acquired shares of Common Stock determined by dividing such participant’s accumulated payroll deductions on such exercise dateor other cash or property upon the occurrence of an event constituting cause. Further, unless otherwise provided in an award agreement, if at any time within 1 year after an award is exercised, vests, becomes payable, either (i) the participant is terminated for cause, or (ii) the committee determines that while in service the participant had engaged in an act which would have warranted termination for cause, or following termination of service the participant violated continuing obligation or
Option Price. The purchase price for each share of
$25,000 Limitation. No employee will be granted an option that permits the employee’s right to purchase stock under the ESPP, and under all other Code Section 423(b) employee stock purchase plans of the Company and any parent corporations or subsidiary corporations, as “parent corporation” and “subsidiary corporation” are defined in Code Section 424(e) and (f), to accrue at a rate that exceeds $25,000 of fair market value of such stock
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(determined on the date or dates that options on such stock were granted) for each calendar year in which such option is outstanding at any time. The purpose of the limitation in the preceding sentence is to comply, and such limitation will be administered in accordance, with Code Section 423(b)(8).
Payroll Deductions. An eligible employee may enroll in the ESPP by submitting an enrollment form to his or her appropriate payroll location at least 15 business days before the first day of the purchase period in which he or she wishes to participate. An employee may authorize payroll deductions in either a dollar amount or as a percentage of the employee’s Compensation, subject to such minimums and maximums determined by the Administrator and set forth in the offering or enrollment form applicable to such offering. For this purpose, “Compensation” means an employee’s base pay or salary from the Company or designated subsidiary, including such amounts of base pay or salary as are deferred by the employee (a) under a qualified cash or deferred arrangementrepricing described in Code Section 401(k) or (b) to a plan qualified under Code Section 125. A participant in the ESPP may not increase or decrease his or her payroll deduction during the purchase period of an offering but may increase or decrease his or her payroll deduction with respect to the next offering.
Plan Withdrawal. A participant may withdraw from the ESPP (in whole but not in part) by giving written notice of withdrawal to his or her appropriate payroll location. Such withdrawal will be effective as of the next business day. Following a participant’s withdrawal, the entire balance of his or her unused payroll deduction account under the ESPP will be promptly refunded, without interest. An employee who has withdrawn from the ESPP may not begin participation again during the remainder of the offering, but may enroll in a subsequent offering by submitting an enrollment form to his or her appropriate payroll location at least 15 business days before the first day of the next purchase period in which he or she wishes to participate.
Adjustments; Change in Control. The Board, in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the ESPP, will, in such manner as it may deem equitable, adjust the number of shares of common stock available for issuance under the ESPP, the option price, the maximum number of shares that may be purchased during a purchase period, as well as any other terms that the Board determines require adjustment, for: (a) any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock; or (b) any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company.
In the eventabove.
Transfers. An optionan award holder from transferring awards granted under the ESPP may not be transferred or assigned, except2020 Plan other than by will, or the laws of descent and distribution or, with the prior approval of the Administrator.
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Employee Terminations. Whenever a participant ceases Stockholder approval is required (i) to bematerially increase the number of shares subject to the 2020 Plan (other than pursuant to an eligible employee because of retirement, voluntary or involuntary termination, resignation, layoff, discharge, death, or for any other reason, his or her rightsequitable adjustment in connection with changes relating to the Company’s Common Stock as permitted under the ESPP will immediately terminate, and2020 Plan); (ii) to materially expand the entire balanceclass of his or her payroll deduction accountindividuals eligible to receive awards under the ESPP will be promptly refunded, without interest. Notwithstanding2020 Plan; (iii) materially reduce the foregoing, eligible employment will be treated as continuing intact while the participant is on military leave, sick leave, or other bona fide leave of absence (such as temporary employment by the government) if the period of such leave does not exceed three months, or if longer, so long as the participant’s right to reemployment with the Company or designated subsidiary is provided either by statute or by contract. If the period of leave exceeds three months and the participant’s right to reemployment with the Company or designated subsidiary is not provided either by statute or by contract, the employment relationship will be deemed to terminate on the first day immediately following such three-month period.
Termination of Plan; Amendment of Plan. The ESPPprice at which Common Stock may be terminated at any time by the Board, at which time all amounts in the accounts of participants shall be promptly refunded. If the ESPP is terminated, the Administrator may elect to terminate all outstanding offerings either immediatelyissued or once shares of Common Stock have been purchased on the next exercise date (which may, in the Administrator’s discretion, be accelerated) or permit offerings to expire in accordance with their terms. If an offering is terminated before its scheduled expiration, all payroll deductions accumulated on behalf of participants under the ESPP that have not been used to purchase shares2020 Plan; (iv) materially extend the term of Common Stock will be returned to each participant (without interest, exceptthe 2020 Plan; (v) materially expand the types of awards available for issuance under the 2020 Plan, or (vii) as otherwise required by law) as soon as administratively practicable.
The Board may amend the ESPP in any respect, except that, without the approval within 12 months of such Board action by the stockholders, no amendment shall be made increasing the number of shares approved for issuance under the ESPP or making any other change that would require stockholder approval in order for the ESPP, as amended, to qualify as an “employee stock purchase plan” under Section 423(b)Applicable Law.
Designated subsidiaries2020 Plan
Optionees Not Stockholders. Neither the granting of an option to an employee nor the deductions from his or her pay will constitute such employee a stockholderbrief summary of the shares covered by an option until such shares have been actually purchased by the employee. A participant will have no interest or voting right in shares covered by the participant’s option until such shares are actually purchased on the participant’s behalf in accordance with theintended United States federal income tax consequences applicable provisions of the ESPP.
Application of Funds. The Company will accumulate and hold for each participant’s account the amounts deducted from the participant’s pay. No interest will be paid on these amounts. We may use payroll deductions that we receive or holdto awards granted under the ESPP for any corporate purpose, and we will not be obligated to segregate such payroll deductions or hold them exclusively for the benefit of participants.
Governing Law.2020 Plan. The validity and construction of the ESPP will be governed by thediscussion below is based upon United States federal income tax laws of Delaware, without givingin effect to the principles of conflicts of law thereof.
Plan Benefits. Benefits under the ESPP will depend on participants’ elections to participate and the fair market value of Common Stock at various future dates. As a result, it is not possible as of the date of this Proxy Statement to determine future benefits that will be received by executive officers and other employees of Delcath and designated subsidiaries. Each participantStatement. This summary is limited to the $25,000 annual purchase restriction described above.
Form S-8. We anticipate filing a registration statement on Form S-8 with the SEC to register shares of Common Stock under the ESPP as soon as practicable, subject to and effective upon stockholder approval of the ESPP.
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Certain U.S. Federal Income Tax Consequences. The following brief summary of the effect of U.S. federal income taxation upon a participant and the Company with respect to shares of Common Stock purchased under the ESPP does not purportintended to be completeexhaustive and does not discussaddress all matters that may be relevant to a particular participant based on his or her specific circumstances, or the tax consequences of a participant’s death orany awards granted to participants who reside outside of the income tax laws of any state or non-U.S. jurisdiction in which the participant may reside. The ESPP, and the right of U.S. participants to make purchases thereunder, is intended to qualify under the provisions of Code Sections 421 and 423. Under these provisions, no incomeUnited States.
2020 Plan | ||||||||
Name and Position | Number of Options (#) | |||||||
Gerard Michel, Chief Executive Officer | 309,287 | |||||||
John Purpura, Chief Operating Officer | 115,973 | |||||||
Kevin Muir, General Manager, Interventional Oncology | 106,613 | |||||||
Executive Group(1) | 513,873 | |||||||
Non-Executive Director Group | 98,410 | |||||||
Non-Executive Officer Employee Group(2) | 1,212,474 |
Plan Amendment by our stockholders at the Annual Meeting.
Board Recommendation
Abstentions will have the same effect as a vote “against” this proposal. Since we have been advised by NYSE that this proposal is considered “non-routine” under NYSE rules, broker non-votes will have no effect on this proposal.
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Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) (#) | Weighted-average exercise price of outstanding options, warrants and rights (b) ($) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) (#) | |||||||||
Equity compensation plans approved by security holders | 1,233,961 | 10.90 | 1,240,600 | |||||||||
Equity compensation plans not approved by security holders(1) | 498,499 | 13.65 | — | |||||||||
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Total | 1,732,460 | 11.69 | 1,240,600 | |||||||||
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Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | |||||||||||||||||
Equity compensation plans approved by security holders | 3,286,233 | $ | 7.69 | 1,837,509 | ||||||||||||||||
Equity compensation plans not approved by security holders (1) | 896,999 | $ | 9.93 | 623,000 | ||||||||||||||||
Total | 4,183,232 | $ | 8.17 | 2,460,509 |
2024
2023. Representatives of Marcum are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
Representatives of Marcum are expected to be present at the 2022 Annual Meeting, and will have the opportunity to make a statement if he or she (or they) so desires and to respond to appropriate questions.
Fiscal Year | ||||||||
2021 | 2020 | |||||||
Audit Fees | $ | 139,400 | $ | 242,385 | ||||
Audit-Related Fees | 45,000 | 98,431 | ||||||
Tax Fees | — | — | ||||||
All Other Fees | — | — | ||||||
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Total | $ | 184,400 | $ | 340,816 | ||||
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2022 | 2023 | ||||||||||
Audit Fees | $226,900 | $278,100 | |||||||||
Audit-Related Fees | 36,000 | 59,700 | |||||||||
Tax Fees | — | — | |||||||||
All Other Fees | — | — | |||||||||
Total | $262,900 | $337,800 |
2023.
2023.
2023.
16
committee to pre-approve interim services by Delcath’s independent registered public accounting firm; provided that the Chair reports all such pre-approvals to the entire Audit Committee at the next Audit Committee meeting. There were no non-audit services provided to Delcath by our independent registered public accounting firm for 2021 and 2020 2022 or 2023that required review by the Audit Committee.
Board Recommendation
Abstentions will have the same effect as a vote “against” this proposal. Since this proposal is considered “routine” under NYSE rules, we do not expect broker non-votes to exist in connection with this proposal.
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Vote Required
The affirmative vote of a majority of the shares of Common Stock and Preferred Stock voting together as a single class with the holders of the Preferred Stock voting on an as-converted to Common Stock basis, present in person or represented by proxy at the 2022 Annual Meeting and entitled to vote, is required for the approval of this proposal.
Board Recommendation
Abstentions will have the same effect as a vote “against” this proposal. Since we have been advised by NYSE that this proposal is considered “non-routine” under NYSE rules, broker non-votes will have no effect on this proposal.
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Shares Beneficially Owned | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name of Beneficial Owner: | Common Stock(1) | Percent of Class | Series E Preferred Stock | Percent of Class(2) | Series E-1 Preferred Stock | Percent of Class(3) | Series F-2 Preferred Stock | Percent of Class(4) | Series F-3 Preferred Stock | Percent of Class(5) | |||||||||||||||||||||||||||||||||||||||||||||||||
Named Executive Officers and Directors: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gerard Michel(6) | 1,184,866 | 4.50 | % | — | * | — | * | — | * | — | * | ||||||||||||||||||||||||||||||||||||||||||||||||
John Purpura, M.S.(7) | 365,814 | 1.42 | % | — | * | — | * | — | * | — | * | ||||||||||||||||||||||||||||||||||||||||||||||||
Kevin Muir(8) | 170,454 | * | — | * | — | * | — | * | — | * | |||||||||||||||||||||||||||||||||||||||||||||||||
Sandra Pennell(9) | 72,220 | * | — | * | — | * | * | * | |||||||||||||||||||||||||||||||||||||||||||||||||||
Vojislav Vukovic(10) | 138,050 | * | — | * | — | * | — | * | — | * | |||||||||||||||||||||||||||||||||||||||||||||||||
David Hoffman(11) | 165,078 | * | — | * | — | * | — | * | — | * | |||||||||||||||||||||||||||||||||||||||||||||||||
Roger G. Stoll, Ph.D.(12) | 91,171 | * | — | * | — | * | — | * | — | * | |||||||||||||||||||||||||||||||||||||||||||||||||
Gilad Aharon, Ph.D.(13)(18) | 2,704,792 | 9.99 | % | 9,149 | 96.25 | % | 1,753 | 100 | % | 2,150 | 84.58 | % | 3,010 | 100 | % | ||||||||||||||||||||||||||||||||||||||||||||
Elizabeth Czerepak(14) | 57,682 | * | — | * | — | * | — | * | — | * | |||||||||||||||||||||||||||||||||||||||||||||||||
Steven Salamon(15)(18) | 2,699,107 | 9.99 | % | 9,149 | 96.25 | % | 1,753 | 100 | % | 2,150 | 84.58 | % | 3,010 | 100 | % | ||||||||||||||||||||||||||||||||||||||||||||
John R. Sylvester(16) | 78,232 | * | — | * | — | * | — | * | — | * | |||||||||||||||||||||||||||||||||||||||||||||||||
All directors and executive officers as a group (11 persons)(17): | 5,168,238 | 17.94 | % | 9,149 | 96.25 | % | 1,753 | 100 | % | 2,150 | 84.58 | % | 3,010 | 100 | % | ||||||||||||||||||||||||||||||||||||||||||||
5% Stockholders: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rosalind Master Fund L.P.(18) Rosalind Opportunities Fund I L.P. | 2,708,028 | 9.99 | % | 9,149 | 96.25 | % | 1,753 | 100 | % | 2,150 | 84.58 | % | 3,010 | 100 | % | ||||||||||||||||||||||||||||||||||||||||||||
AIGH Investment Partners, LP and affiliated entities(19) | 2,551,012 | 9.99 | % | — | * | — | * | — | * | — | * | ||||||||||||||||||||||||||||||||||||||||||||||||
Vivo Opportunity Fund Holding, LP(20) | 2,638,346 | 9.99 | % | — | * | — | * | — | * | — | * | ||||||||||||||||||||||||||||||||||||||||||||||||
BVF Partners LP(21) | 2,607,693 | 9.99 | % | — | * | — | * | — | * | — | * |
Shares Beneficially Owned(1) | ||||||||||||||||||||||||||||
Name of Beneficial Owner: | Common Stock | Percent | Series E Preferred Stock | Percent | Series E-1 Preferred Stock | Percent | Percent of Total Voting Power | |||||||||||||||||||||
Named Executive Officers and Directors: | ||||||||||||||||||||||||||||
Gerard Michel(2) | 367,022 | 4.47 | % | — | * | — | * | 4.25 | % | |||||||||||||||||||
John Purpura, M.S.(3) | 135,390 | 1.69 | % | — | * | — | * | 1.60 | % | |||||||||||||||||||
Johnny John, M.D.(4) | 59,736 | * | — | * | — | * | * | |||||||||||||||||||||
Roger G. Stoll, Ph.D.(5) | 44,720 | * | — | * | — | * | * | |||||||||||||||||||||
Gilad Aharon, Ph.D.(6)(11) | 794,450 | 9.57 | % | 9,149 | 95.25 | % | 1,753 | 100.00 | % | 9.47 | % | |||||||||||||||||
Elizabeth Czerepak(7) | 20,120 | * | — | * | — | * | * | |||||||||||||||||||||
Steven Salamon(8)(11) | 813,950 | 9.81 | % | 9,149 | 95.25 | % | 1,753 | 100.00 | % | 9.71 | % | |||||||||||||||||
John R. Sylvester(9) | 25,680 | * | — | * | — | * | * | |||||||||||||||||||||
All directors and executive officers as a group(10): | 1,488,738 | 16.76 | % | 9,149 | 95.25 | % | 1,753 | 100.00 | % | 16.67 | % | |||||||||||||||||
5% Stockholders: | ||||||||||||||||||||||||||||
Rosalind Master Fund L.P.(11) Rosalind Opportunities Fund I L.P. 77 Bloor St W, 3rd FL Toronto, Ontario M5S 1M2 | 836,070 | 10.05 | % | 9,149 | 95.25 | % | 1,753 | 100.00 | % | 9.99 | %(11) | |||||||||||||||||
Deerfield Partners, L.P. (12) 780 Third Ave., 37th Floor New York, New York 10017 | 500,000 | 6.32 | % | — | — | — | — | 6.01 | % |
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21
Directors
Independence
Attendance.
As the Company has previously announced, Dr. Stoll will be retiring at the conclusion of the 2024 Annual Shareholder Meeting.
Dr. Stoll servesStructure
22
NASDAQNasdaq Listing Rules 5605(f) and 5606.
5606
The NASDAQ adopted Rules 5605(f) and 5606 in August 2021.
NASDAQ Rule 5606 Matrix as of March 10, 2022 | ||||||||||||||||
Board Size: | ||||||||||||||||
Total Number of Directors | 6 | |||||||||||||||
Male | Female | Non- Binary | Did Not Disclose Gender | |||||||||||||
Part I: Gender Identity | ||||||||||||||||
Directors | 3 | 1 | — | 2 | ||||||||||||
Part II: Demographic Background: | ||||||||||||||||
African American or Black | — | — | — | — | ||||||||||||
Alaskan Native or American Indian | — | — | — | — | ||||||||||||
Asian | — | — | — | — | ||||||||||||
Hispanic or Latinx | — | — | — | — | ||||||||||||
Native Hawaiian or Pacific Islander | — | — | — | — | ||||||||||||
White | 3 | 1 | — | — | ||||||||||||
Two or More Races or Ethnicities | — | — | — | — | ||||||||||||
LGBTQ+ | 1 | — | — | — | ||||||||||||
Did not Disclose Demographic Background | — | — | — | 2 |
Nasdaq Listing Rule 5606 Matrix as of March 28, 2024 | |||||||||||||||||||||||
Board Size: | |||||||||||||||||||||||
Total Number of Directors | 6 | ||||||||||||||||||||||
Male | Female | Non-Binary | Did Not Disclose Gender | ||||||||||||||||||||
Part I: Gender Identity | |||||||||||||||||||||||
Directors | 3 | 1 | — | 2 | |||||||||||||||||||
Part II: Demographic Background: | |||||||||||||||||||||||
African American or Black | — | — | — | — | |||||||||||||||||||
Alaskan Native or American Indian | — | — | — | — | |||||||||||||||||||
Asian | — | — | — | — | |||||||||||||||||||
Hispanic or Latinx | — | — | — | — | |||||||||||||||||||
Native Hawaiian or Pacific Islander | — | — | — | — | |||||||||||||||||||
White | 3 | 1 | — | — | |||||||||||||||||||
Two or More Races or Ethnicities | — | — | — | — | |||||||||||||||||||
LGBTQ+ | 1 | — | — | — | |||||||||||||||||||
Did not disclose demographic background | — | — | — | 2 |
Oversight
Programs
23
assessment, including a review of the overall annual award limitations and individual annual limitations in our stock incentive plans and the Compensation and Stock Option Committee’s role in the consideration and approval of certain awards, the Compensation and Stock Option Committee does not believe that our compensation programs encourage excessive or inappropriate risk-taking, motivate imprudent risk-taking or create risks that are reasonably likely to have a material adverse effect on the Company.
Committees
Committee
•the selection, evaluation and, where appropriate, replacement of our outside auditors;
•an annual review and evaluation of the qualifications, performance and independence of our outside auditors;
•the approval of all auditing services and permitted non-audit services provided by our outside auditors;
•the review of the adequacy and effectiveness of our accounting and internal controls over financial reporting; and
•the review and discussion with management and with our outside auditors of the Company’s financial statements to be filed with the SEC.
Committee
24
Nominating and Corporate Governance Committee.
Committee
On March 28, 2023, the Company, as part of its March 2023 Private Investment in Public Equity agreement with investors, that, upon FDA approval of Delcath’s product candidate, the purchasers of a majority of shares gained the right to designate a director for the Company to appoint to the Board. As of the date of this Proxy Statement, the purchasers have not requested the Company to appoint a new director to the Board.
Nominees
Directors
25
intended recipient(s), will be submitted to the Board or to the particular director(s). Any stockholder communication not so delivered, will be made available upon request to any director. Examples of stockholder communications that would be considered inappropriate for submission include, without limitation, customer complaints, business solicitations, product promotions, job inquiries, junk mail and mass mailings, as well as material that is unduly hostile, threatening, illegal or similarly unsuitable.
Ethics
the compensation committee or board of directors of any other entity that has one or more executive officers that serve as a member of the Board or Compensation Committee.
The
Except for the participation of certain senior management, directors and greater than 5% shareholders in investmentsalso participated in the securitiesoffering purchasing 62,973 pre-funded warrants for approximately $250,000. ITF Rosalind Opportunities Fund I L.P., an entity controlled by Rosalind Advisors, which Steven Salamon and Gil Aharon, both Directors of the Company, as reflectedare co-founders and portfolio managers of, also participated in the footnotesoffering purchasing 503,778 pre-funded warrants for approximately $2,000,000.
this private placement:
Common Stock | Pre-funded Warrants | Purchase Price | ||||||||||||
Gerard Michel | Chief Executive Officer | 40,323 | — | $150,001.56 | ||||||||||
Steven Salamon | Director | 26,882 | — | $100,001.04 | ||||||||||
Gilad Aharon | Director | 26,882 | — | $100,001.04 | ||||||||||
Investor Company ITF Rosalind Master Fund LP | 5% Shareholder | — | 619,946 | $2,299,999.66 | ||||||||||
AIGH Investment Partners, LP | 5% Shareholder | 377,970 | 388,156 | $2,846,107.16 |
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transaction with a Related Party, the Nominating Committee (or Chair) will consider, among other factors, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third-party and the extent of the Related Party’s interest in the transaction.
Certain transactions are deemed pre-approved under the policy, including compensation of executive officers and directors (except that employment of an immediate family member of an executive officer requires specific approval), and transactions with a company at which the Related Party’s only relationship is as a non-officer employee, director, or less than 10% owner if the aggregate amount involved does not exceed 2% of such company’s total annual revenues (or, in the case of charitable contributions by us, 1% of the charity’s total annual receipts). Pre-approval is not required if the amount involved in the transaction is not expected to exceed $120,000 in any calendar year.
For purposes of the policy, aA “Related Party” is generally anyone who since the beginning of the last full fiscal year is or was an executive officer, director or director nominee, owner of more than 5% of our Common Stock, or immediate family member of any of such persons.
Name | Annual Retainer ($) | |||||||||
Board Service | 43,000 | |||||||||
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Chairman of the Board | 25,000 | |||||||||
Chair of Audit Committee | 20,000 | |||||||||
Member of Audit Committee | 8,000 | |||||||||
Chair of Compensation | 12,000 | |||||||||
Member of Compensation | 5,000 | |||||||||
Chair of Nominating and Corporate Governance Committee | 8,000 | |||||||||
Member of Nominating and Corporate Governance Committee | 4,000 |
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The following table sets forth the compensation awarded to, earned by or paid to each non-employee director who served on our Board in 2023.
Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(1) | Total ($) | |||||||||||||||||
Gil Aharon, Ph.D. | 48,000 | 124,956 | 172,956 | |||||||||||||||||
Elizabeth Czerepak | 63,550 | 124,956 | 188,506 | |||||||||||||||||
Steven Salamon | 59,000 | 124,956 | 183,956 | |||||||||||||||||
Roger G. Stoll, Ph.D. | 63,524 | 124,956 | 188,480 | |||||||||||||||||
John Sylvester | 79,927 | 124,956 | 204,883 |
Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(1) | Total ($) | |||||||||
Gil Aharon, Ph.D. | 48,000 | 87,841 | 135,841 | |||||||||
Elizabeth Czerepak | 68,000 | 87,841 | 155,841 | |||||||||
Steven Salamon | 59,000 | 87,841 | 146,841 | |||||||||
Roger G. Stoll, Ph.D. | 92,000 | 87,841 | 179,841 | |||||||||
John Sylvester | 47,000 | 87,841 | 134,841 |
Name | Options Outstanding | |||||||
Gil Aharon, Ph.D. | 57,682 | |||||||
Elizabeth Czerepak | 57,682 | |||||||
Steven Salamon | 57,682 | |||||||
Roger G. Stoll, Ph.D. | 77,824 | |||||||
John Sylvester | 67,682 |
Name | Age | Position | |||||||||||||||
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Gerard Michel | 60 | Chief Executive Officer | |||||||||||||||
| 54 | General Counsel, Chief Compliance Officer, and Corporate Secretary | |||||||||||||||
Kevin Muir | 53 | General Manager, Interventional Oncology | |||||||||||||||
Martha Rook | 54 | Chief Operating Officer | |||||||||||||||
| 45 | Senior Vice President | |||||||||||||||
Vojislav Vukovic | 57 | Chief Medical |
John PurpuraProxy Statement.
Johnny John, M.D.Harvard Medical School’s Center for Neurologic Diseases.
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Name and Position | Year | Salary ($) | Non-Equity Incentive Plan Compensation ($)(1) | Option Awards ($)(2) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||||||||||||
Gerard Michel, | 2023 | 538,078 | 189,888 | 1,792,348 | — | 2,520,314 | ||||||||||||||||||||||||||||||||
Chief Executive Officer | 2022 | 521,024 | 131,175 | 800,499 | 19,500 | 1,472,198 | ||||||||||||||||||||||||||||||||
John Purpura, M.S. | 2023 | 409,229 | 129,977 | 663,821 | — | 1,203,027 | ||||||||||||||||||||||||||||||||
Chief Operating Officer | 2022 | 396,136 | 89,785 | 318,407 | — | 804,328 | ||||||||||||||||||||||||||||||||
Kevin Muir,(3) | 2023 | 316,272 | 78,130 | 621,582 | — | 1,015,984 | ||||||||||||||||||||||||||||||||
General Manager, Interventional Oncology | 2022 | — | — | — | — | — |
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Executive | Hire Date | 2019 Base Salary ($) | Percent Increase in 2019 | 2020 Base Salary ($) | Percent Increase in 2020 | 2021 Base Salary ($) | ||||||||||||||||||
Gerard Michel(1) | 10/1/2020 | — | — | 450,000 | 13.3 | % | 510,000 | |||||||||||||||||
John Purpura, M.S.(2) | 11/16/2009 | 335,000 | 14.9 | % | 385,000 | 0.6 | % | 387,419 | ||||||||||||||||
Johnny John, M.D.(3) | 03/19/2012 | 251,600 | 3.0 | % | 259,148 | 48.6 | % | 385,000 |
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Executive | 2022 Base Salary ($) | Percent Increase from 2022 | 2023 Base Salary ($) | |||||||||||||||||
Gerard Michel | 524,698 | 3.4 | % | 542,538 | ||||||||||||||||
John Purpura, M.S. | 399,042 | 3.4 | % | 412,625 | ||||||||||||||||
Kevin Muir | 308,398 | 3.4 | % | 318,896 |
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Executive | Target Bonus Expressed as % of Base Salary | Dollars ($) | Actual Payout as % of Base Salary | Dollars ($) | ||||||||||||
Gerard Michel | 50.0 | % | 237,576 | 25.62 | % | 130,666 | ||||||||||
John Purpura, M.S. | 45.0 | % | 174,070 | 24.71 | % | 95,739 | ||||||||||
Johnny John, M.D. | 40.0 | % | 105,596 | 15.09 | % | 58,078 |
Executive | Target Bonus Expressed as % of Base Salary | Dollars ($) | Actual Payout as % of Base Salary | Dollars ($) | ||||||||||||||||||||||
Gerard Michel | 50.0 | % | 271,269 | 35.0 | % | 189,888 | ||||||||||||||||||||
John Purpura, M.S. | 45.0 | % | 185,681 | 31.5 | % | 129,977 | ||||||||||||||||||||
Kevin Muir | 35.0 | % | 111,614 | 24.5 | % | 78,130 |
70.0% for 2023.
TheCompensation Committee approved the following table sets forth the total compensation awarded to, earned by or paidstock option awards to our named executive officers, duringwhich vest in equal monthly installments over a three-year period with the fiscal years ending December 31, 2021 and December 31, 2020.
Name and Position | Year | Salary ($) | Bonus ($) | Options Awards(1) ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||
Gerard Michel, | 2021 | 475,151 | 130,666 | 1,230,585 | 78,000 | (2) | 1,914,402 | |||||||||||||||||
Chief Executive Officer | 2020 | 112,500 | — | 5,629,000 | (3) | 19,500 | (2) | 5,761,000 | ||||||||||||||||
John Purpura, | 2021 | 386,823 | 95,739 | 442,927 | — | 925,489 | ||||||||||||||||||
Chief Operating Officer | 2020 | 347,500 | 57,870 | 1,981,900 | 32,000 | (4) | 2,419,270 | |||||||||||||||||
Johnny John, M.D., Senior Vice President Clinical | 2021 | 325,557 | 58,078 | 492,142 | — | 875,777 | ||||||||||||||||||
Development and Medical Affairs | 2020 | 256,632 | 23,740 | 849,395 | — | 1,129,767 |
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GRANTS OF PLAN-BASED AWARDS—2021
The following table sets forth grants of plan-based awards made during the fiscal year ended December 31, 2021 to the named executive officers. All equity grants were made pursuant to the Delcath Systems, Inc. 2020 Omnibus Equity Incentive Plan, as amended (the “2020 Plan”). At present, 2,475,000 shares of Common Stock of the Company are reserved for issuance under the 2020 Plan through September 30, 2030 to the Company’s employees, directorsexecutive’s continued service:
Executive | Grant Date | Number of Shares Subject to Option (#) | Exercise Price ($) | |||||||||||||||||
Gerard Michel | 2/8/2023 | 140,400 | $4.67 | |||||||||||||||||
6/12/2023 | 168,887 | $7.25 | ||||||||||||||||||
John Purpura, M.S. | 2/8/2023 | 56,160 | $4.67 | |||||||||||||||||
6/12/2023 | 59,813 | $7.25 | ||||||||||||||||||
Kevin Muir | 2/8/2023 | 46,800 | $4.67 | |||||||||||||||||
6/12/2023 | 59,813 | $7.25 |
Name | Grant Date | All Other Option Awards; Number of Securities Underlying Options | Option Exercise Price ($) | Grant Date Fair Value of Option Award ($)(1) | ||||||||||||
Gerard Michel | 08/05/21 | 125,000 | 10.16 | 1,230,585 | ||||||||||||
John Purpura, M.S. | 08/05/21 | 45,000 | 10.16 | 442,927 | ||||||||||||
Johnny John, M.D. | 08/05/21 | 50,000 | 10.16 | 492,142 |
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Mr. Michel. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END—2021
The following table sets forth information concerning unexercised stock options for each named executive officer as of December 31, 2021 that had been granted under the Delcath Systems, Inc. 2020 Omnibus Equity Incentive Plan, as amended (the “2020 Plan”), unless otherwise noted in the footnotes to this table.
Name | Option Awards | |||||||||||||||
Number of Securities Underlying Unexercised Options(#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price Per Share ($) | Option Expiration Date | |||||||||||||
Gerard Michel(1) | 165,001 | 230,999 | 11.67 | 10/01/2030 | ||||||||||||
21,250 | 29,750 | 17.51 | 10/01/2030 | |||||||||||||
21,250 | 29,750 | 23.34 | 10/01/2030 | |||||||||||||
27,777 | 97,223 | 10.16 | 08/05/2031 | |||||||||||||
John Purpura, M.S.(2) | 357 | — | 196.70 | 02/01/2029 | ||||||||||||
72,930 | 102,070 | 11.67 | 10/01/2030 | |||||||||||||
10,000 | 35,000 | 10.16 | 08/05/2031 | |||||||||||||
Johnny John, M.D.(3) | 31,260 | 43,740 | 11.67 | 10/01/2030 | ||||||||||||
11,111 | 38,889 | 10.16 | 08/05/2031 |
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Gerard Michel Employment Agreement.
Pursuant to an employment agreement dated as of August 31, 2020 between the Company and Mr. Michel (the “Michel Employment Agreement”), the term of Mr. Michel’s employment began on October 1, 2020. Under the Michel Employment Agreement, Mr. Michel’s annualized base salary was $450,000 in 2020, subject to annual review by the Board’s Compensation and Stock Option Committee. For 2021, Mr. Michel’s base salary was increased to $510,000.$510,000 in 2021, $524,698 in 2022, and $542,538 in 2023. Pursuant to the Michel Employment Agreement, Mr. Michel is eligible to participate in the Company’s annual incentive planAIP with a target annual cash bonus equal to 50% of his then-current base salary.
•A severance payment equal in the aggregate to twelve (12) months of his annual base salary at the time of termination, payable in twelve (12) equal monthly installments (and subject to applicable withholdings and deductions) beginning on the last Company payroll date of the first full month following termination of employment (“Severance Benefits”); and
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•If Mr. Michel timely and properly elects health plan (medical, dental and/or vision) continuation coverage under COBRA, the Company will reimburse Mr. Michel in an amount equal to the difference between the monthly COBRA premium paid by Mr. Michel for him and his dependents and the monthly premium amount paid by similarly situated active executives under the Company’s group health plans (“COBRA Benefits”). Such reimbursement will be paid to Mr. Michel on or by the last day of the month immediately following the month in which Mr. Michel timely remits the COBRA premium payment. Mr. Michel will be eligible to receive COBRA premium reimbursement until the earliest of: (x) the twelve-month anniversary of the date his employment with the Company terminates; (y) the date Mr. Michel is no longer eligible to receive COBRA continuation coverage; and (z) the date on which Mr. Michel becomes eligible to receive substantially similar coverage from another employer.
John Purpura Executive Security Agreement.
Mr. Purpura does not have an employment agreement with the Company.
34
of the termination. On the 60th calendar day following the date of the termination, the Company will pay Mr. Purpura in a lump sum the amount of the severance payments that he would have received during such 60-day period under the Company’s regular payroll schedule, and the balance of such severance will be paid to him in approximately equal installments over the remainder of the Severance Period; (e) if Mr. Purpura elects continuation coverage under COBRA for himself and his covered dependents under the Company’s group health and/or dental plans following the termination, then the Company will pay the COBRA premiums necessary to continue his group health and/or dental coverage in effect for himself and his eligible dependents until the earliest of (i) the close of the Severance Period following the date of the termination, (ii) the date Mr. Purpura ceases to participate, for whatever reason, in the Company’s group health and/or dental plans, or (iii) the date on which Mr. Purpura is covered or is eligible to be covered under another group health and/or dental plan or is otherwise no longer eligible for coverage under COBRA.
Johnny John, M.D. has no employment agreement or
Company agreed to accelerate the vesting of Mr. Purpura’s stock options such that the options will all vest within six months of his termination date and extend the post-termination exercise period of the all stock options until 18 months following his termination date.
Option Awards | ||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price Per Share ($) | Option Expiration Date | |||||||||||||||||||||||||||
Gerard Michel | 10/1/2020 | (2) | 396,000 | — | 11.67 | 10/1/30 | ||||||||||||||||||||||||||
10/1/2020 | (2) | 51,000 | — | 17.51 | 10/1/30 | |||||||||||||||||||||||||||
10/1/2020 | (2) | 51,000 | — | 23.34 | 10/1/30 | |||||||||||||||||||||||||||
8/5/2021 | (3) | 111,078 | 13,922 | 10.16 | 8/5/31 | |||||||||||||||||||||||||||
2/8/2022 | 74,198 | 41,939 | 7.14 | 2/8/32 | ||||||||||||||||||||||||||||
2/8/2023 | 42,900 | 97,500 | 4.67 | 2/8/33 | ||||||||||||||||||||||||||||
6/12/2023 | 32,844 | 136,043 | 7.25 | 6/12/33 | ||||||||||||||||||||||||||||
John Purpura, M.S.(6) | 2/1/2019 | (4) | 357 | — | 196.70 | 2/1/29 | ||||||||||||||||||||||||||
10/1/2020 | 175,000 | — | 11.67 | 10/1/30 | ||||||||||||||||||||||||||||
8/5/2021 | (3) | 39,978 | 5,022 | 10.16 | 8/5/31 | |||||||||||||||||||||||||||
2/8/2022 | 29,532 | 16,666 | 7.14 | 2/8/32 | ||||||||||||||||||||||||||||
2/8/2023 | 17,160 | 39,000 | 4.67 | 2/8/33 | ||||||||||||||||||||||||||||
6/12/2023 | 11,634 | 48,179 | 7.25 | 6/12/33 | ||||||||||||||||||||||||||||
Kevin Muir | 12/7/2020 | (5) | 30,000 | — | 15.32 | 12/7/30 | ||||||||||||||||||||||||||
8/5/2021 | (3) | 35,536 | 4,464 | 10.16 | 8/5/31 | |||||||||||||||||||||||||||
2/8/2022 | 24,610 | 13,889 | 7.14 | 2/8/32 | ||||||||||||||||||||||||||||
2/8/2023 | 14,300 | 32,500 | 4.67 | 2/8/33 | ||||||||||||||||||||||||||||
6/12/2023 | 11,634 | 48,179 | 7.25 | 6/12/33 |
Pay Versus Performance | ||||||||||||||||||||||||||||||||||||||
Year | Summary Compensation Table Total for PEO (1) (3) | Compensation Actually Paid to PEO (1) (2) (5) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers (1) (2)(4) | Average Compensation Actually Paid to Non-PEO Named Executive Officers (1) (2) (6) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return (7) | Net Income (Loss) (8) | ||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (h) | ||||||||||||||||||||||||||||||||
2023 | $ | 2,520,314 | $ | 2,154,023 | $ | 1,109,506 | $ | 952,501 | $ | 23.21 | $ | (47,678,000) | ||||||||||||||||||||||||||
2022 | $ | 1,472,198 | $ | (188,099) | $ | 770,916 | $ | 266,160 | $ | 20.09 | $ | (36,407,000) | ||||||||||||||||||||||||||
2021 | $ | 1,914,402 | $ | (2,082,129) | $ | 900,633 | $ | (133,040) | $ | 43.97 | $ | (25,650,000) |
PEO | ||||||||
2023 | ||||||||
Summary Compensation Table Totals for PEO | $ | 2,520,314 | ||||||
Additions (Subtractions) for Equity Awards | ||||||||
Fair Value at Year-End of Outstanding and Unvested Equity Awards Granted in the Covered Year | (1,792,348) | |||||||
Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | 846,622 | |||||||
Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Covered Year | 7,167 | |||||||
Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Covered Year | 326,952 | |||||||
Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | 245,316 | |||||||
Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | — | |||||||
Compensation Actually Paid to PEO | $ | 2,154,023 |
Other non-PEO NEOs (Average) | ||||||||
2023 | ||||||||
Summary Compensation Table Totals for Non-PEO NEOs | $ | 1,109,506 | ||||||
Additions (Subtractions) for Equity Awards | ||||||||
Average Fair Value at Year-End of Outstanding and Unvested Equity Awards Granted in the Covered Year | (642,702) | |||||||
Average Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | 304,334 | |||||||
Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Covered Year | 2,594 | |||||||
Average Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Covered Year | 118,207 | |||||||
Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | 60,562 | |||||||
Average Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | — | |||||||
Compensation Actually Paid to non-PEO NEOs | $ | 952,501 |
Name | Retirement or Voluntary Termination Without “Good Reason” ($) | Termination for “Cause” ($) | Involuntary Termination (Termination Without Cause, or Termination for Good Reason) ($) | Upon a Change in Control ($) | Death or Disability Termination ($) | |||||||||||||||
Gerard Michel | — | — | 703,516 | 703,516 | — | |||||||||||||||
John Purpura, M.S. | — | — | 746,524 | 746,524 | — | |||||||||||||||
Johnny John, M.D. | — | — | — | — | — |
35
2023.
Commission.
April 4, 2022
36
1633 Broadway, Suite 22C
New York, New York 10019
(518) 743-8892
37
Your cooperation in giving these matters your immediate attention and in returning your proxy promptly will be appreciated.
BY ORDER OF THE BOARD OF DIRECTORS | ||
Gerard Michel | ||
Chief Executive Officer |
38
and approved by stockholders on May 6, 2021)
The purposeand to be effective upon, the approval of the Delcath Systems, Inc. 2021stockholders of the Company in accordance with the requirements of the laws of the State of Delaware at the Company’s
1. Administration. The Plan is administered by the person or persons appointed by the Company’s Board of Directors (the “Board”) for such purpose or, in the event of no such appointment, the Compensation and Stock Option Committee of the Board (the “Administrator”). The Administrator has authority at any time to: (a) adopt, alter and repeal such rules, guidelines and practices for the administration of the Plan and for its own acts and proceedings as it shall deem advisable; (b) interpret the terms and provisions of the Plan; (c) make all determinations it deems advisable for the administration of the Plan; (d) decide all disputes arising 9 in connection with the Plan; (e) generally,Restricted Stock Unit Award, to receive a credit for the account of such Participant in an amount equal to cash or stock dividends or other distributions paid by the Company in respect of one share of Common Stock.
2. Offerings. The Company will make one or more offerings to eligible employees to purchase Common Stock under the Plan (each, an “Offering”). Any Offering may, as determined by the Administrator, consist of one or more periods of time specified in the Offering beginning on the first day of the Offering or on the next day following an Exercise Date (as defined in Section 8) within an Offeringrules and ending on the next-following Exercise Date (each, a regulations promulgated thereunder.
3. Eligibility. All individuals classified as employees on the payroll records of the Company and each Designated Subsidiary are eligible to participate in any one or more of the Offerings under the Plan, providedthat as of the first day of the applicable Offering (the “Offering Date”) they have completed at least 30 days of
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employment, and furtherprovidedthat, unless otherwise specified in an Offering, employees whose customary employment is 20 hours or less per week shall not be eligible. Notwithstanding any other provision herein, individuals who are not contemporaneously (with the first day of the applicable Offering) classified as employees of the Company or a Designated Subsidiary for purposes of the Company’s or applicable Designated Subsidiary’s payroll system are not considered to be eligible employees of the Company or any Designated Subsidiary and shall not be eligible to participate in the Plan. In the event any such individuals are reclassified as employees of the Company or a Designated Subsidiary for any purpose, including, without limitation, common law or statutory employees, by any action of any third party, including, without limitation, any government agency, or as a result of any private lawsuit, action or administrative proceeding, such individuals shall, notwithstanding such reclassification, remain ineligible for participation. The exclusive means for individuals who are not contemporaneously classified as employees of the Company or a Designated Subsidiary on the Company’s or Designated Subsidiary’s payroll system to become eligible to participate in the Plan is through an amendment to this Plan, duly executedterm fixed by the Company, which specifically renders such individuals eligible to participate herein.
4. Participation.
(a) Enrollment. An eligible employee who is not a Participant on any Offering Date may participate in such Offering by submitting an enrollment form (which may be in written or electronic form) to his or her appropriate payroll location at least 15 business days before the Offering Date (or by such means, at such place or by such other deadline as shall be established by the Administrator for the Offering). The enrollment form will (a) state a whole percentage or the amount to be deducted from an eligible employee’s Compensation (as defined in Section 11) per pay period, (b) authorize the purchase of Common Stock in each OfferingCommittee in accordance with the terms of the Plan and (c) specify the exact name or names in which shares of Common Stock purchased for such individual are to be issued pursuant to Section 10. An employee who does not enroll in accordance with these procedures will be deemed to have waived the right to participate. Unless a Participant files a new enrollment form or withdraws from the Plan, such Participant’s deductions and purchases will continue at the same percentage or amount of Compensation for future Offerings, provided he or she remains an eligible employee.
(b) Notwithstanding the foregoing, participation in the Plan will neither be permitted nor be denied contrary to the requirements of the Code.
5. Employee Contributions. Each eligible employee may authorize payroll deductions in either a dollar amount or as a percentage of Compensation, 6, and subject to such minimumsother limitations and maximums, as determined by the Administrator and set forth in the Offering or enrollment form applicable to such Offering. The Company will maintain book accounts showing the amount of payroll deductions made by each Participant for each Offering. No interest will accrue or be paid on payroll deductions.
6. Deduction Changes. Except as provided in Section 7, a Participant may not increase or decrease his or her payroll deduction during any Offering, but may increase or decrease his or her payroll deduction with respect to the next Offering (subject to the limitations of Section 5) by filing a new enrollment form at least 15 business days before the next Offering Date (or by such other deadline as shall be established by the Administrator for the Offering).
7. Withdrawal. A Participant may withdraw from participationrestrictions in the Plan by delivering a written notice of withdrawal to his or her appropriate payroll location. The Participant’s withdrawal will be effective as ofand the next business day. Following a Participant’s withdrawal, the Company will promptly refund all payroll deductions accumulated on behalf of such Participant under the Plan that have not been used to purchase shares of Common Stock (without interest) as soon as administratively practicable. Partial withdrawals are not permitted. Such an employee may not begin participation again during the remainder of the Offering, but may enroll in a subsequent Offering in accordance with Section 4.
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8. Grant of Options. On each Offering Date, the Company will grant to each eligible employee who is then a Participant in the Plan an option (“Option”) to purchase on the last day of such Offering (or, where there are multiple Purchase Periods within the period of an Offering, the last day of a Purchase Period) (the “Exercise Date”), at the Option Price hereinafter provided for, the lowest of (a)applicable Award Agreement, a number of shares of Common Stock determined by dividing such Participant’s accumulated payroll deductions on such Exercise Datethe Committee.
Notwithstanding the foregoing, no Participant may be granted an Option hereunder if such Participant, immediately after the option was granted, would be treated as owning stock possessing 5 percent or more of the total combined voting power or value of all classes of stock of the Company or any Parent or Subsidiary (as defined in Section 11). For purposes of the preceding sentence, the attribution rules of Section 424(d) of the Code shall apply in determining the stock ownership of a Participant, and all stock which the Participant has a contractual right to purchase shall be treated as stock ownedmet by the Participant. In addition, no Participant may be granted an Option which permits his or her rights to purchase stock under the Plan, and any other “employee stock purchase plan” (under Section 423(b) of the Code) of the Company and its Parents and Subsidiaries (which, for the avoidance of doubt, does not include the Company’s 2020 Omnibus Equity Incentive Plan), to accrue at a rate which exceeds $25,000 of the fair market value of such stock (determined on the option grant date or dates) for each calendar year in which the Option is outstanding at any time. The purpose of the limitation in the preceding sentence is to comply with Section 423(b)(8) of the Code and shall be applied taking Options into account in the order in which they were granted.
9. Exercise of Option and Purchase of Shares. The Option of each employee who continues to be a Participant in the Plan on the Exercise Date shall be automatically exercised on such date and he or she shall acquire from the Company such number of whole shares of Common Stock reserved for the purpose of the Plan as his or her accumulated payroll deductions on such date will purchase at the Option Price, subject to any other limitations contained in the Plan. Any amount remaining in a Participant’s account at the end of an Offering solely by reason ofa given Performance Period as a contingency for a given Award to vest and/or become exercisable, settled or payable, or to otherwise determine the inability to purchase a fractional share will be carried forward to the next Offering; if the amount remaining in the Participant’s account after the purchasenumbers of shares of Common Stock is at least equal to the amount required to purchase one (1) whole share of Common Stock on the Exercise Date of the Offering, then such remaining amount shall be distributed in full to such Participant at the end of the Offering without interest. If any Option grantedor stock-denominated units that are earned under the Plan shall for any reason terminate without having been exercised, the shares of Common Stock not purchased under such Option shall again become available for issuance under the Plan.
10. Issuance of Common Stock. Shares of Common Stock purchased under the Plan may be issued only in the name of the employee, in the name of the employee and another person of legal age as joint tenants with rights of survivorship, or in the name of a broker authorized by the employee to be his, her or their, nominee for such purpose.
11. Certain Definitions.
The term an Award.
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The term “Designated Subsidiary” means any present or future Subsidiary (as defined below) that has been designated by the Board to participate in the Plan. The Board may so designate any Subsidiary, or revoke any such designation, at any time and from time to time, either before or after the Plan is approved by the stockholders.
The term “Fair Market Value of the Common Stock” on any given date means the fair market value of the Common Stock determined in good faith by the Administrator; provided, however, that if the Common Stock is admitted to quotation on the Nasdaq Stock Market or another national securities exchange, the determination shall be made by reference to the closing price on such date. If there is no closing price for such date, the determination shall be made by reference to the last date preceding such date for which there is a closing price.
The term “Parent” means a “parent corporation” with respect to the Company, as defined in Section 424(e) of the Code.
The term “Participant” means an individual who is eligible as determined in Section 3 and who has complied with the provisions of Section 4.
The term “Subsidiary” means a “subsidiary corporation” with respect to the Company, as defined in Section 424(f) of the Code.
12. Rights on Termination of Employment. If a Participant’s employment terminates for any reason before the Exercise Date for any Offering (or any Purchase Period within the period of an Offering), no payroll deduction will be taken from any pay due and owing to the Participant and the balance in the Participant’s account will be paid (without interest) to such Participant or, in the case of such Participant’s death, to his or her designated beneficiary as if such Participant had withdrawn from the Plan under Section 7. Notwithstanding the foregoing, an Offering may provide that if a Participant’s employment terminates under specified circumstances other than by the Company for cause (as determined in the sole discretion of the Company), then the Participant will continue to participate in the Offering (or any Purchase Period within the Offering) that ends (and the Exercise Date of which occurs) within three months following the Participant’s termination of employment. An employee will be deemed to have terminated employment, for purposes of this section, if the corporation that employs him or her, having been a Designated Subsidiary, ceases to be a Subsidiary, or if the employee is transferred to any corporation other than the Company or a Designated Subsidiary. An employee will not be deemed to have terminated employment for this purpose if the employee is on an approved leave of absence for military service or sickness or for any other purpose approved by the Company, if the employee’s right to reemployment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Administrator otherwise provides in writing.
13. Special Rules. Notwithstanding anything herein to the contrary, the Administrator may adopt special rules applicable to the employees of a particular Designated Subsidiary whenever the Administrator determines that such rules are necessary or appropriate for the implementation of the Plan in a jurisdiction where such Designated Subsidiary has employees; provided that such rules are consistent with the requirements of Section 423(b) of the Code. Any special rules established pursuant to this Section 13 shall, to the extent possible, result in the employees subject to such rules having substantially the same rights as other Participants in the Plan.
14. Optionees Not Stockholders. Neither the granting of an Option to a Participant nor the deductions from his or her pay shall constitute such Participant a holder of the shares of Common Stock covered by an Option under the Plan until such shares have been purchased by and issued to him or her upon an Exercise Date.
15. Rights Not Transferable. Rights under the Plan are not transferable by a Participant other than by will or the laws of descent and distribution, and are exercisable during the Participant’s lifetime only by the Participant. Any attempt at transferring rights under the Plan in violation of the foregoing shall be null and void without effect.
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16. Application of Funds. All funds received or held by the Company under the Plan may be combined with other corporate funds and may be used for any corporate purpose; the Company shall not be required to segregate any payroll deductions made under the Plan.
17. Adjustment in Case of Changes Affecting Common Stock; Dissolution or Liquidation; Change in Control.
(a) Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Common Stock, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Common Stock or other securities of the Company, or other change in the Company’s structure affecting the Common Stock occurs without the receipt of consideration by the Company, then the Board shall, in such manner as it deems equitable, adjust the number of shares and class of Common Stock that may be delivered under the Plan, the Exercise Price per share and the number of shares of Common Stock covered by each outstanding Option under the Plan, and the numerical limits of the preamble hereof and/or in Section 8.
(b) Dissolution or Liquidation. Unless otherwise determined by the Administrator, in the event of a proposed dissolution or liquidation of the Company, any Offering then in progress will be shortened by setting a new Exercise Date and the Offering will end immediately prior to the proposed dissolution or liquidation. The new Exercise Date will be before the date of the Company’s proposed dissolution or liquidation. Before the new Exercise Date, the Administrator will provide each Participant with written notice, which may be in electronic form, of the new Exercise Date and that the Participant’s Option will be exercised automatically on such date, unless before such time, the Participant has withdrawn from the Offering in accordance with Section 7.
(c) Change in Control. In the event of a Change in Control, each outstanding Option may (if approved by the Board) be assumed or an equivalent option substituted by the surviving corporation or the acquiring corporation (or the Parent or Subsidiary of such surviving or acquiring corporation). If such surviving or successor corporation does not (or will not) assume or substitute the Option, the Offering with respect to which the Option relates will be shortened by setting a new Exercise Date on which the Offering will end. The new Exercise Date will occur before the date of such Change in Control and prior to the new Exercise Date, the Administrator will provide each Participant with written notice, which may be in electronic form, of the new Exercise Date and that the Participant’s Option will be exercised automatically on such date, unless before such time, the Participant has withdrawn from the Offering in accordance with Section 7. For purposes hereof, “Change in Control” means the consummation, in a single transaction or in a series of related transactions, of any one or more periods of time, as the following events:
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(d) For purposesCommittee may select, over which the attainment of this definition, (i) one or more Performance Goals will be measured for the purpose of determining a Participant’s right to vesting, exercisability, settlement or payment of an Award.
18. Designation of Beneficiary.
(a) A Participant may file a written designation of a beneficiary who is to receive any shares of Common Stock under Section 8 that are issued subject to vesting and transfer restrictions and such other conditions as are set forth in the Plan and the applicable Award Agreement.
(b) contingent on the closing of such Change in Control. Any exercise of Options or Stock Appreciation Rights during such period may be contingent on the closing of such Change in Control;
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19. r.No Continued Service Rights. Neither the Plan nor any rightAward granted under the Planhereunder shall confer on any Participant any right to continuation of the Participant’s employment or other service relationship with the Company or any Designated Subsidiary,its Affiliates, nor shall it interfere in any way with such Participant’s right or the right of the Company or Designated Subsidiaryits Affiliates to terminate such employment relationship, with or without cause.
20. Amendment of the Plan. The Board may at any time and from time to time amend the Plan in any respect, except that, without the approval within 12 months of such Board action by the stockholders, no amendment shall be made increasing the number of shares approved for the Plan or making any other change that would require stockholder approval in order for the Plan, as amended, to qualify as an “employee stock purchase plan” under Section 423(b) of the Code.
21. Insufficient Shares. If the total number of shares of Common Stock that would otherwise be purchased on any Exercise Date plus the number of shares purchased under previous Offerings (or previous Purchase Periods within the current Offering) under the Plan exceeds the maximum number of shares issuable under the Plan, the shares then available shall be apportioned among Participants in proportion to the amount of payroll deductions accumulated on behalf of each Participant that would otherwise be used to purchase Common Stock on such Exercise Date.
22. Termination of the Plan. The Plan may be terminated at any time by the Board. Upon termination of the Plan, all amounts in the accounts of Participants shall be promptly refunded. If the Plan is terminated, the Administrator may elect to terminate all outstanding Offerings either immediately or once shares of Common Stock have been purchased on the next Exercise Date (which may, in the discretion of the Administrator, be accelerated) or permit Offerings to expire in accordance with their terms. If any Offering is terminated before its scheduled expiration, all payroll deductions accumulated on behalf of each Participant under the Plan that have not been used to purchase shares of Common Stock will be returned to each Participant (without interest, except as otherwise required by law) as soon as administratively practicable.
23. Governmental Regulations. The Company’s obligation to sell and deliver Common Stock under the Plan is subject to obtaining all governmental approvals required in connection with the authorization, issuance, or sale of such stock. No Option may be exercised to any extent unless the shares of Common Stock to be issued upon such exercise under the Plan are covered by an effective registration statement pursuant to the Securities Act of 1933, as amended, and the Plan is in material compliance with all applicable federal, state, and foreign laws, and any other securities laws and other laws applicable to the Plan, and the requirements of any stock exchange upon which the shares of Common Stock may then be listed. If on an Exercise Date the shares of Common Stock are not so registered or the Plan is not in such compliance, no Option shall be exercised on such Exercise Date, and the Exercise Date shall be delayed until the shares of Common Stock are subject to such an effective registration statement and the Plan is in such compliance, except that the Exercise Date shall not be delayed more than twelve (12) months and the Exercise Date shall in no event be more than twenty-seven (27) months from the Offering Date. If, on the Exercise Date under any Offering hereunder, as delayed to the maximum extent permissible, the shares of Common Stock are not registered and the Plan is not in such compliance, no Options shall be exercised and all payroll amounts accumulated during the Offering (reduced to the extent, if any, such contributions have been used to acquire shares of Common Stock) shall be distributed to the Participants without interest (unless required by applicable law).
24. Cause.
25. Issuance of Shares. Shares may be issued upon exercise of an Option from authorized but unissued Common Stock, from shares held in the treasury of the Company, or from any other proper source.
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26. Tax Withholding. Participation in the Plan is subject to any minimum required tax withholding on income of the Participant in connection with the Plan. Each Participant agrees, by entering the Plan, that the Company and its Subsidiaries shall have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant, including shares issuable under the Plan.
27. Certain Tax Matters.
(a) Code Section 409A. Rights granted under the Plan are intended to be exempt from the application of Section 409A of the Code under U.S. Treasury Regulation Section 1.409A-1(b)(5)(ii).
(b) No Guarantee of Tax Treatment. Although the Company may endeavor to qualify a right granted under the Plan for special tax treatment under the laws of the United States or jurisdictions outside the United States or avoid adverse tax treatment (e.g., under Section 409A of the Code), the Company makes no representation to that effect and expressly disavows any covenant to maintain special or to avoid unfavorable tax treatment, notwithstanding anything to the contrary in the Plan. Nether the Company, any Designated Subsidiary, any other affiliate of the Company, nor any of their respective employees, officers or directors, shall have any liability whatsoever to any Participant or beneficiary thereof in the event rights granted under the Plan do not qualify for special tax treatment under the law of the United States or any other jurisdiction or in the event any adverse tax treatment applies with respect to participation in the Plan.
28. Notification Upon Sale of Shares. Each Participant agrees, by entering the Plan, to give the Company prompt notice of any disposition of shares purchased under the Plan where such disposition occurs within two years after the Offering Date of the Option pursuant to which such shares were purchased or within one year after the Exercise Date of such Option.
29. Successors and Assigns. The Plan shall be binding on the Company and its successors and assigns.
30. t.Captions. The captions in the Plan are for convenience of reference only, and are not intended to narrow, limit or affect the substance or interpretation of the provisions contained herein.
31. Effective Date
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DELCATH SYSTEMS, INC. 1633 BROADWAY, 22ND FLOOR, SUITE C NEW YORK, NY 10019 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting—Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on May 3, 2022. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting—Go to www.virtualshareholdermeeting.com/DCTH2022 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printedexpressly permitted in the box marked byPlan. Notwithstanding the arrow available and followforegoing, subject to the instructions. VOTE BY PHONE—1-800-690-6903 Uselimitations of Applicable Law, if any, touch-tone telephonethe Committee may amend the terms of any one or more Awards without the affected Participant’s consent (i) to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on May 3, 2022. Have your proxy card in hand when you call and then followmaintain the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D77266-P69962 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY DELCATH SYSTEMS, INC. For All Withhold All Except For All The Board of Directors recommends you vote FOR the following: 1. To elect the two Class I director nominees Nominees: 01) Gerard Michel 02) Gilad Aharon, Ph.D. To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s)qualified status of the nominee(s) on the line below. The BoardAward as an Incentive Stock Option under
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com. D77267-P69962 DELCATH SYSTEMS, INC. Annual Meeting of Stockholders May 4, 2022 9:30 AM This proxy is solicited by the Board of Directors Common Stock The stockholder hereby appoints Gerard Michel, John Purpura and David Hoffman, or any of them, as proxies, eachAward into compliance with, the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, allSection 409A of the sharesCode; or (iii) to facilitate compliance with other Applicable Laws.
DELCATH SYSTEMS, INC. 1633 BROADWAY, 22ND FLOOR, SUITE C NEW YORK, NY 10019 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting—Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on May 3, 2022. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting—Go to www.virtualshareholdermeeting.com/DCTH2022 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on May 3, 2022. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D77268-P69962 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY DELCATH SYSTEMS, INC. For All Withhold All Except For All The Board of Directors recommends you vote FOR the following: 1. To elect the two Class I director nominees Nominees: 01) Gerard Michel 02) Gilad Aharon, Ph.D. To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. The Board of Directors recommends you vote FOR proposals 2, 3 and 4. For Against Abstain 2. To approve the Delcath Systems, Inc. 2021 Employee Stock Purchase Plan; 3. To ratify the selection, by the Audit Committee of our Board of Directors, of Marcum LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2022; and 4. To approve, on a non-binding advisory basis, the compensation of our named executive officers as disclosed in the Proxy Statement. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com. D77269-P69962 DELCATH SYSTEMS, INC. Annual Meeting of Stockholders May 4, 2022 9:30 AM This proxy is solicited by the Board of Directors Series E Convertible Preferred Stock The stockholder hereby appoints Gerard Michel, John Purpura and David Hoffman, or any of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Series E Convertible Preferred Stock of DELCATH SYSTEMS, INC. that the stockholder is entitled to vote at the Annual Meeting of Stockholders to be held at 9:30 AM on May 4, 2022, via webcast at www.virtualshareholdermeeting.com/DCTH2022, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. Continued and to be signed on reverse side
DELCATH SYSTEMS, INC. 1633 BROADWAY, 22ND FLOOR, SUITE C NEW YORK, NY 10019 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting—Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on May 3, 2022. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting—Go to www.virtualshareholdermeeting.com/DCTH2022 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on May 3, 2022. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D77270-P69962 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY DELCATH SYSTEMS, INC. For All Withhold All Except For All The Board of Directors recommends you vote FOR the following: 1. To elect the two Class I director nominees Nominees: 01) Gerard Michel 02) Gilad Aharon, Ph.D. The Board of Directors recommends you vote FOR proposals 2, 3 and 4. For Against Abstain 2. To approve the Delcath Systems, Inc. 2021 Employee Stock Purchase Plan; 3. To ratify the selection, by the Audit Committee of our Board of Directors, of Marcum LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2022; and 4. To approve, on a non-binding advisory basis, the compensation of our named executive officers as disclosed in the Proxy Statement. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com. D77271-P69962 DELCATH SYSTEMS, INC. Annual Meeting of Stockholders May 4, 2022 9:30 AM This proxy is solicited by the Board of Directors Series E-1 Convertible Preferred Stock The stockholder hereby appoints Gerard Michel, John Purpura and David Hoffman, or any of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Series E-1 Convertible Preferred Stock of DELCATH SYSTEMS, INC. that the stockholder is entitled to vote at the Annual Meeting of Stockholders to be held at 9:30 AM on May 4, 2022, via webcast at www.virtualshareholdermeeting.com/DCTH2022, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. Continued and to be signed on reverse side