Coya Therapeutics Inc

PROPOSAL 2: APPROVAL OF AN AMENDMENT TO THE 2021 INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES RESERVED FOR ISSUANCE THEREUNDER TO 2,571,070

General

The general purpose of the 2021 Equity Incentive Plan (as amended, the “2021 Incentive Plan”) is to provide a means whereby our eligible employees, officers, non-employee directors and other individual service providers (including consultants, advisors and prospective employees, officers, non-employee directors, consultants and advisors) develop a sense of proprietorship and personal involvement in the development and the financial success of our Company and to encourage them to devote their best efforts to the business of our Company, thereby advancing the interests of our Company and our stockholders. We, by means of the 2021 Incentive Plan, seek to retain the services of these eligible persons and to provide incentives for these persons to exert maximum efforts for the success of our Company.

Our Board believes that the granting of stock options, restricted stock awards and similar kinds of equity-based compensation promotes continuity of management and increases incentive and personal interest in the welfare of our Company by those who are primarily responsible for shaping and carrying out our long-term plans and securing our growth and financial success. On March 19, 2024, the Compensation Committee approved an amendment to increase the number of shares authorized for issuance under the 2021 Incentive Plan to 2,571,070 shares (the “Plan Amendment”). Upon the recommendation of the Compensation Committee, the Board directed that the Plan Amendment be submitted to the stockholders for approval at the Annual Meeting. A copy of the Plan Amendment is attached as Annex A.

If our stockholders do not approve this proposal, we will continue to operate the 2021 Incentive Plan under its current provisions.

Reasons for the Proposed Amendment

Our Board unanimously recommends that you vote FOR the Plan Amendment Proposal, including for the following reasons:

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Our future success as a company depends on our continued ability to attract, recruit, motivate and retain high-quality talent. Being able to continue to provide equity-based incentives is critical to achieving this success as we compete for talent in an industry in which equity compensation is market practice and is expected by existing personnel and prospective candidates. Equity awards are intended to motivate high performance levels and to align the interests of our employees, non-employee directors and consultants with those of our stockholders by giving such individuals an equity stake in our Company and by providing a means of recognizing such individuals’ contributions to our success. Our Board and management believe equity awards are necessary to remain competitive in our industry and are essential in a competitive labor market and industry to attracting, recruiting, motivating and retaining the highly qualified employees who help us meet our goals.

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The current number of shares remaining available for grant under the 2021 Incentive Plan is insufficient in light of our existing compensation structure and strategy. The additional share authorization being sought is necessary to help ensure we have a sufficient number of shares authorized, reserved for issuance, and available to appropriately compensate our employees, non-employee directors and consultants in 2024, and to issue appropriate awards going forward, under the 2021 Incentive Plan.

•

In determining the number of additional shares to be reserved for issued under the 2021 Incentive Plan, the Board reviewed market, industry and compensation peer group practices and data. The Board determined that the 2021 Incentive Plan does not provide sufficient share authorization to appropriately compensate our employees, non-employee directors and consultants for a duration comparable to that of the equity incentive plans of similarly situated companies. We believe the Plan Amendment Proposal will remedy this by both meeting our specific needs and positioning us to be in line with the equity incentive plan share authorization levels at similarly situated companies.

Stockholders are being asked to approve the Plan Amendment Proposal to satisfy 2021 Incentive Plan and the Nasdaq Stock Market LLC requirements and to qualify certain stock options authorized under the Amended Plan for treatment as incentive stock options (“ISOs”) under Section 422 of the Code.

Overview of Key Changes Implemented by the Plan Amendment

The Plan Amendment increases the number of shares of Common Stock reserved for issuance under the Plan from 1,821,070 to 2,571,070.

As of December 31, 2023, there were 24,746 shares of Common Stock available for future issuance under the 2021 Incentive Plan. The Compensation Committee believes this amount is insufficient for us to be able to attract, recruit, motivate and retain employees, non-employee directors and consultants or to appropriately compensate these individuals in 2024, and to issue appropriate awards going forward, under the 2021 Incentive Plan.

In the event that stockholders do not approve the Plan Amendment Proposal, the number of shares reserved for issuance under the 2021 Incentive Plan will not increase. Awards will continue to be made under the 2021 Incentive Plan to the limited extent that there are available shares of Common Stock to do so.

Description of the 2021 Incentive Plan

On January 25, 2021 our Board adopted the Coya Therapeutics, Inc. 2021 Equity Incentive Plan, which our stockholders approved on February 5, 2021. On November 17, 2022, our Board of Directors amended and restated the 2021 Equity Incentive Plan, which was then approved by our stockholders.

The following is a summary of the material features of the 2021 Incentive Plan and is qualified in its entirety by reference to the full text of the 2021 Incentive Plan. Capitalized terms used in this summary and not otherwise defined shall have the meaning set forth in the 2021 Incentive Plan.

The 2021 Incentive Plan is intended to enable us to secure and retain the types of employees, consultants and directors who will contribute to our long-range success, and provide incentives for such persons to exert maximum efforts for the success of the Company by aligning their interests with those of our stockholders. Awards that may be granted under the Amended and Restated Plan include: (a) Incentive Stock Options (within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended); (b) Nonstatutory Stock Options (Incentive Stock Options and Nonstatutory Stock Options together referred to as “Options”); (c) Stock Appreciation Rights (“SARs”); (d) Restricted Stock Awards; (e) Restricted Stock Unit (“RSU”) Awards (f) Performance Awards (payable in shares or cash); and (g) Other Awards (all as defined in the 2021 Incentive Plan, and collectively, “Awards”).

The 2021 Incentive Plan initially reserved 1,141,251 shares of our common stock for the grant of Awards. As of January 1, 2024, the 2021 Incentive Plan reserved 1,821,070 shares of our common stock, reflecting the automatic increases as of January 1, 2023 and January 1, 2024 provided by the “evergreen” provision of the 2021 Incentive Plan. All Awards may be granted as Incentive Stock Options. Pursuant to the 2021 Incentive Plan’s “evergreen” feature, the number of shares of common stock reserved for issuance will automatically increase on the first day of each fiscal year commencing with January 1, 2023 and on the first day of each fiscal year thereafter until the date the 2021 Incentive Plan expires, by an amount equal to four percent (4%) of the total number of shares of our common stock outstanding on the last day of the preceding fiscal year, unless the Board determines before an annual increase takes effect that no increase will be made or a lesser increase.

Shares subject to Awards that are forfeited, or expire, as well as shares subject to Awards that are settled in cash, and shares that are reacquired by the Company in satisfaction of tax withholding obligations or as consideration for the exercise or purchase price of an Award, are added back to the shares reserved for issuance under the Plan and may be subject to new Awards under the 2021 Incentive Plan.

The 2021 Incentive Plan is administered by our Board, or in the Board’s sole discretion, by a committee appointed by the Board (the Board or such committee being referred to as the “plan administrator”). The plan administrator has full authority to establish rules and regulations for the administration of the 2021 Incentive Plan, including to determine (i) the persons to whom and the time or times at which Awards may be granted; to determine the type and number of Awards to be granted; (ii) the number of shares of common stock to which an Award may relate; and (iii) the terms, conditions, restrictions and performance criteria of Awards. The plan administrator has authority to modify (reprice) the purchase price or the exercise price of any outstanding Award. Such repricings may be implemented without stockholder approval. The Board may, to the extent permitted by law, delegate to one or more officers the authority to grant Options and SARs to employees who are not officers.

The following describes the types of Awards that may be made under the 2021 Incentive Plan. The 2021 Incentive Plan also contains provisions with respect to payment of exercise prices, vesting and expiration of Awards, transferability of Awards, and various other terms, conditions, and limitations, as further described in the 2021 Incentive Plan.

Stock Options. Nonstatutory Stock Options may be granted to our employees, consultants and directors, while Incentive Stock Options may be granted only to our employees. The exercise price of all Options granted under the 2021 Incentive Plan will be determined by the plan administrator. With limited exceptions, the exercise price per share of any Option may not be less than 100% of the fair market value of our common stock on the grant date. The maximum term of all stock options granted under the 2021 Incentive Plan will be determined by the plan administrator, but may not exceed ten years. However, the exercise price for Incentive Stock Options granted to any stockholder who is designated to be a “Ten Percent Shareholder” under the 2021 Incentive Plan must be at least 110% of the fair market value of the common stock on the date of the grant and such Options must expire no later than five years after the grant date. Each Option will vest and become exercisable at such time and subject to such terms and conditions as determined by the plan administrator in the applicable individual stock option agreement. To the extent that the aggregate fair market value (determined at the time of grant) of common stock with respect to which Incentive Stock Options are exercisable for the first time by any option holder during any calendar year exceeds $100,000, the options or portions thereof which exceed such limit shall be treated as Nonstatutory Stock Options.

An Option may be granted with a right to exercise it before it becomes exercisable (referred to as an early exercise right). If exercised early, the shares of common stock acquired may be subject to a repurchase right in favor of the Company.

Unless the applicable stock option agreement provides otherwise, in the event of an optionee’s termination of employment or service, stock options will be treated as follows: (i) if the termination is for any reason other than for cause, disability or death, vested options generally will remain exercisable until three months after termination and then expire, (ii) if the termination is on account of the optionee’s disability or death, vested options generally will remain exercisable until one year after termination and will then expire and (iii) if the termination is for cause, all options, whether vested or unvested, will expire as of the date of such termination. Unless the applicable stock option agreement provides otherwise, any options that were not vested and exercisable on the date of any termination of employment or service for any reason will expire as of the date of such termination.

SARs. A SAR granted under the 2021 Incentive Plan entitles its holder to receive, at the time of exercise, an amount per share equal to the excess of the fair market value (at the date of exercise) of a share of our common stock over the base price of the SAR. With limited exceptions, each SAR will be granted with a base price that is not less than 100% of the fair market value of a share of our common stock on the grant date. The maximum term of SARs granted under the 2021 Incentive Plan will be determined by the plan administrator, but may not exceed ten years. The plan administrator may determine to settle the exercise of a SAR in shares of common stock, cash or any combination thereof.

Restricted Stock and RSUs. Restricted stock and RSUs may be granted under the 2021 Incentive Plan. RSUs may be settled in shares of common stock or cash, in the discretion of the plan administrator. The plan administrator will determine the purchase price, vesting schedule and performance objectives, if any, applicable to the grant of restricted stock and RSUs. If the restrictions, performance objectives or other conditions determined by the plan administrator are not satisfied, the restricted stock and RSUs will be forfeited. Subject to the provisions of the 2021 Incentive Plan and applicable individual award agreements, the plan administrator has the sole discretion to provide for the lapse of restrictions in installments or the acceleration or waiver of restrictions (in whole or part) under certain circumstances, including the attainment of certain performance goals, a participant’s termination of employment or service or a participant’s death or disability. The rights of restricted stock and RSU holders upon a termination of employment or service will be set forth in individual award agreements.

Recipients of restricted stock will generally have all of the rights of a stockholder during the restricted period, including the right to vote and, to the extent specifically provided in an agreement award, receive dividends declared with respect to such stock (provided that dividends will only be paid out upon vesting of the shares to which they are attributable unless the award agreement provides otherwise). During the restricted period, participants with RSUs will generally not have any rights of a stockholder, but may be credited with dividend equivalent rights if the applicable individual award agreement so provides. Dividend equivalent amounts with respect to restricted stock or RSUs will be subject to the same restrictions, conditions and risks of forfeiture as the underlying restricted stock or RSU.

Performance Awards. Performance Awards under the 2021 Incentive Plan may be payable in shares of common stock and/or cash, contingent on the attainment during the applicable performance period of certain performance goals, as determined by the plan administrator and set forth in an individual’s award agreement.

Other Awards. Other forms of Awards valued in whole or in part by reference to, or otherwise based on, shares of our common stock may be granted under the 2021 Incentive Plan. The plan administrator will determine the terms and conditions of such other awards, including the number of shares of common stock to be granted pursuant to such other awards, the manner in which such other awards will be settled (e.g., in shares of common stock or cash), and the conditions to the vesting and payment of such other awards.

Equitable Adjustments. In the event of a merger, consolidation, reclassification, recapitalization, spin-off, spin-out, repurchase, reorganization, special or extraordinary dividend or other extraordinary distribution (whether in the form of shares of common stock, cash or other property), combination, exchange of shares, or other change in corporate structure affecting the shares of common stock, an equitable substitution or proportionate adjustment shall be made, at the sole discretion of the plan administrator, in (i) the aggregate number of shares of common stock reserved for issuance under the 2021 Incentive Plan, (ii) the kind and number of securities subject to, and the exercise price or base price of, any outstanding Options and SARs granted under the 2021 Incentive Plan, and (iii) the kind, number and purchase price of shares of common stock, or the amount of cash or amount or type of property, subject to outstanding Restricted Stock Awards, RSU Awards, Performance Awards and Other Awards granted under the 2021 Incentive Plan.

Change in Control. In accordance with the 2021 Incentive Plan, subject to the terms of any individual award agreement, the Board may, among other things, take one or more of the following actions in connection with a Change in Control (as defined in the 2021 Incentive Plan): (i) arrange for the surviving corporation or acquiring corporation to assume or continue Awards, (ii) cause any or all outstanding Awards to become vested and, if applicable, allow the holder of an Option or SAR to exercise such Option or SAR prior to the Change in Control and forfeit such Option or SAR if not exercised before the Change in Control, (iii) cancel an Award, to the extent not vested or not exercised prior to the Change in Control, in exchange for such cash consideration, if any, as the Board considers appropriate; or (iv) terminate an Award at or immediately prior to the closing of the Change in Control in exchange for a payment, in such form as may be determined by the Board, equal to the excess, if any, of the value of the property the participant would have received on the exercise of the Award immediately prior to the Change in Control, over any exercise price.

Tax Withholding. Each recipient of an Award will be required to make arrangements satisfactory to the plan administrator regarding payment of the amount of applicable taxes required by law to be withheld with respect to any Award granted under the 2021 Incentive Plan. With the approval of the plan administrator, an individual may satisfy the foregoing requirement by either electing to have us withhold from delivery of shares of common stock, cash or other property, as applicable, or by delivering already owned unrestricted shares of common stock, in each case, having a value not exceeding the applicable taxes to be withheld and applied to the tax obligations. We may also use any other method of obtaining the necessary payment or proceeds, as permitted by law, to satisfy our withholding obligation with respect to any award.

Clawback Rights. All Awards granted under the 2021 Incentive Plan are subject to recoupment in accordance with any clawback policy that the Company adopts pursuant to listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Board may impose such other clawback, recovery or recoupment provisions as the Board deems appropriate.

Amendment and Termination. The 2021 Incentive Plan provides the Board with authority to amend, alter or terminate the 2021 Incentive Plan, but no such action may materially impair the rights of any participant with respect to outstanding Awards without the participant’s consent. Stockholder approval of any such action will be obtained if required to comply with applicable law or regulation.

Plan Term. The 2021 Incentive Plan will terminate on the tenth anniversary of the date the Board adopted the 2021 Incentive Plan (although awards granted before that time will remain outstanding in accordance with their terms).

Vote Required

The affirmative vote of the holders of shares of Common Stock having a majority in voting power of the votes cast by the holders of all of the shares of Common Stock present or represented at the Annual Meeting is required to approve this Proposal 2. As a result, abstentions, broker non-votes, if any, and any other failure to submit a proxy or vote in person at the meeting, will not affect the outcome of the vote of this Proposal 2.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE APPROVAL OF AN AMENDMENT TO OUR 2021 INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES AUTHORIZED FOR ISSUANCE THEREUNDER TO 2,571,070 SHARES.

PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF WEAVER AND TIDWELL, L.L.P. AS

OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2024

The Audit Committee has reappointed Weaver and Tidwell, L.L.P. as our independent registered public accounting firm to audit our financial statements for the fiscal year ending December 31, 2024 and has further directed that management submit their selection of independent registered public accounting firm for ratification by our stockholders at the Annual Meeting. Neither the accounting firm nor any of its members has any direct or indirect financial interest in or any connection with us in any capacity other than as public registered accounting firm.

Principal Accountant Fees and Services

The following table summarizes the fees paid for professional services rendered by Weaver and Tidwell, L.L.P, or Weaver, our independent registered public accounting firm, for each of the last two fiscal years.

(1)

Consists of fees rendered in connection with the audit of our financial statements, review of registration statements, review of the interim financial statements and services normally provided in connection with regulatory filings. Included in 2022 Audit fees is an aggregate of $0.1 million of fees billed in connection with our IPO, which closed in January 2023. Included in 2023 audit fees is an aggregate of approximately $33,000 fees billed in connection with the IPO and other registration statements.

(2)

Consists of income tax compliance services.

Auditor Independence

In our fiscal year ended December 31, 2023, there were no other professional services provided by Weaver that would have required our Audit Committee to consider their compatibility with maintaining the independence of Weaver.

Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

Our Audit Committee has established a policy governing our use of the services of our independent registered public accounting firm. Under this policy, our Audit Committee is required to pre-approve all audit and non-audit services performed by our independent registered public accounting firm in order to ensure that the provision of such services does not impair the public accountants’ independence. All fees paid to Weaver for our fiscal year ended December 31, 2023 were pre-approved by our Board and/or Audit Committee.

Attendance at Annual Meeting

Representatives of Weaver and Tidwell, L.L.P. will be present at the Annual Meeting and will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions from stockholders.

Vote Required

A majority of the votes cast affirmatively by the holders of all of the outstanding shares of our capital stock present or represented at the Annual Meeting is required to approve this Proposal 3. Abstentions, if any, will not affect the outcome of the vote on this Proposal 3.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE RATIFICATION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.