DEF: Femasys Seeks Stockholder Approval for Equity Incentive Plan Amendment and Director Elections at 2025 Annual Meeting

Femasys Inc. is holding its 2025 Annual Meeting of Stockholders on June 25, 2025, to elect directors, approve an amendment to the equity incentive plan, and ratify the appointment of its independent accounting firm.

Summary

• Femasys Inc. will hold its 2025 Annual Meeting of Stockholders on June 25, 2025, at its Suwanee, Georgia headquarters.
• Stockholders will vote on three proposals: electing two Class I directors, approving an amendment to the 2021 Equity Incentive Plan to increase the authorized shares by 3,000,000, and ratifying the appointment of KPMG LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025.
• The Board of Directors recommends voting FOR all three proposals.
• The record date for determining stockholders eligible to vote is April 15, 2025.
• As of the record date, there were 27,239,885 shares of common stock outstanding and entitled to vote.
• The board of directors currently consists of five directors and is divided into three classes, with staggered three-year terms.
• The terms of office of directors in Class II and Class III expire at our Annual Meetings of Stockholders to be held in 2026 and 2027, respectively.

Sentiment

Score: 7

Explanation: The document is a standard proxy statement, which is generally neutral in tone. The positive aspects include the company's commitment to good corporate governance and the use of equity incentives to align employee and shareholder interests. The potential negative is the need to increase cash compensation if the equity plan amendment is not approved.

Positives

• The proposed amendment to the 2021 Equity Incentive Plan aims to align employee and stockholder interests by providing long-term incentives through equity awards.
• Approval of the amendment will allow Femasys to continue using equity-based compensation to attract, retain, and motivate key talent.
• The board believes that separating the positions of chairman and Chief Executive Officer reinforces the independence of the Board from management, creates an environment that encourages objective oversight of managements performance and enhances the effectiveness of the board of directors as a whole.

Negatives

• If the proposed amendment to the 2021 Equity Incentive Plan is not approved, Femasys may need to use alternative compensation methods, such as cash, which could negatively impact cash management and operating expenses.
• The company's clawback policy applies regardless of whether an executive officer engaged in misconduct or otherwise caused or contributed to the requirement for a restatement.

Risks

• Failure to approve the amendment to the 2021 Equity Incentive Plan could hinder the company's ability to attract and retain key employees.
• The company's success depends on its ability to comply with legal and regulatory requirements, including those related to financial reporting and internal controls.
• The company faces risks related to the independence of its board of directors and potential conflicts of interest.

Future Outlook

The company intends to grant each eligible non-employee director an award of an option to purchase 17,600 shares of our common stock on the date of any annual meeting of our stockholders.

Management Comments

• Kathy Lee-Sepsick, Founder, President and Chief Executive Officer, cordially invites stockholders to attend the 2025 Annual Meeting.
• The Board believes that the increase in the number of shares of Common Stock available for issuance under the 2021 Plan is necessary in order to continue to offer stock-based compensation programs that will ensure that a sufficient amount of awards under the 2021 Plan are available for issuance in the future to allow the Company to carry out the purposes of the 2021 Plan, including attracting and retaining employees who are critical to the growth and success of the Company.

Industry Context

The use of equity incentive plans is a common practice in the biopharmaceutical industry to attract and retain talent and align their interests with those of shareholders.

Comparison to Industry Standards

• The director compensation policy is in line with industry standards, consisting of annual retainer fees and long-term equity awards.
• The company's clawback policy is consistent with the requirements of the Dodd-Frank Act and corresponding Nasdaq listing standards.
• The company's corporate governance practices, including the establishment of an audit committee, compensation committee, and nominating and corporate governance committee, are in line with industry best practices.

Corporate Governance

Related Party Transactions

• We employ Ms. Kayla Carlton, the daughter of Ms. Lee-Sepsick, our President, Chief Executive Officer and director. In 2024, Ms. Lee-Sepsicks daughters total compensation and benefits was $190,000, which was consistent with the compensation and benefits provided to our other employees with equivalent qualifications, experience and responsibilities.

Stakeholder Impact

• Approval of the equity incentive plan amendment could benefit shareholders by aligning employee interests with company performance.
• Employees may benefit from the opportunity to receive equity awards.
• The ratification of KPMG LLP as the independent auditor helps ensure the integrity of the company's financial statements.

Next Steps

• Stockholders should review the proxy materials and vote on the proposals.
• The company will hold the Annual Meeting on June 25, 2025, and announce the voting results.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Equity Incentive Plan, Director Election, KPMG, Stockholders, Femasys