Cabaletta Bio Inc

This management-sponsored proposal seeks stockholder approval to adopt Amendment No. 2 to the company’s 2019 Stock Option and Incentive Plan by changing the plan’s evergreen formula to treat outstanding pre-funded warrants as if they were outstanding shares for the purpose of calculating the annual automatic share increase. Management argues this adjustment is necessary because pre-funded warrants have been issued in certain financings in lieu of common shares, and excluding them from the evergreen calculation has effectively reduced the annual replenishment of the equity pool available for employee grants. The company quantifies the impact as modest (an illustrative increase of 240,000 shares, or approximately 0.2% of total capitalization under the December 31, 2025 example) but contends the change preserves the intended purchasing power of the equity reserve for recruitment and retention. The board and the compensation committee, with input from their compensation consultant, view the change as reasonable and consistent with the plan’s spirit and with market practice for companies that have issued pre-funded warrants. Approval would alter future annual increases beginning in 2027 through 2029 as described and would maintain management’s flexibility to grant incentive stock options (ISOs) consistent with the amended ISO evergreen cap. If the amendment is not approved, management warns it could constrain the company’s ability to grant equity awards and therefore hinder recruiting and retention efforts as the company advances its clinical-stage CAR-T program. The proposal raises modest dilutive risk over time but is presented as a targeted technical correction to ensure proportional annual increases rather than an expansion of the long-term share pool; management emphasizes its calculation and limits to address investor concerns. Given the company’s financing history and the small illustrative magnitude, the proposal is likely to be viewed by many governance-minded investors as reasonable if coupled with clear disclosure and guardrails; nevertheless, shareholders should weigh the board’s discretion over future awards and potential cumulative dilution. The board recommends a vote FOR because it believes the amendment preserves the competitiveness of the equity program without representing an excessive increase in the share reserve.

This management proposal asks stockholders to approve an amendment to the company’s certificate of incorporation to increase the number of authorized shares of common stock substantially from 300 million to 600 million (reflected in the Certificate of Amendment text). Management presents the amendment as a strategic necessity given the company’s limited number of unissued shares relative to its capital plan, outstanding warrants and equity reserve, and as a response to representations in the company’s Form 10-K that raise substantial doubt about the company’s ability to continue as a going concern absent additional funding. The board frames the increase as providing flexibility to issue equity or equity-linked securities for financings, potential strategic transactions, equity compensation, stock splits/dividends, and working capital needs, and notes that failure to approve could hinder access to capital and negatively affect the company’s liquidity and ability to operate. The Certificate of Amendment also explicitly defines the classes and counts of voting and non-voting common stock and undesignated preferred shares; the proposed shares would have rights identical to existing common stock, and no preemptive rights would be granted. From a governance perspective, the proposal is dilutive by design and would expand the board’s discretion to issue a large pool of shares without further stockholder approval except where required by law or listing rules, which may concern investors focused on anti-takeover risk and potential opportunistic financings. Management argues such dilution is necessary to address near-term funding needs and preserve operations; investors should weigh the company’s capital shortfall and going-concern disclosures against dilution risk and the board’s stated intent and constraints. Because the vote requires a majority of outstanding shares, approval would be controlling and would immediately enable the company to file the certificate with Delaware and pursue financings; rejection could materially constrain near-term strategic options. The board recommends FOR, emphasizing capital flexibility and the operational risk of not having additional authorized shares.

This advisory, management-supported Say-on-Pay proposal asks shareholders to approve the overall compensation paid to the named executive officers as disclosed in the proxy statement, including base salary, annual cash incentives and long-term equity awards. The company notes the 2025 Say-on-Pay received approximately 54% support and highlights subsequent engagement with holders representing more than 50% of shares to solicit feedback and explain its approach; management indicates the board and compensation committee will consider the vote outcome when setting future compensation. The company frames its program as pay-for-performance with a mix of short-term cash incentives and long-term equity intended to align executives’ interests with stockholders and to retain key leadership during clinical development of rese-cel. From an investor-analyst perspective, the relatively modest prior support (54%) suggests some stockholder concern about pay design or levels, and continued engagement is material to assessing whether governance practices are responsive. The advisory nature means the vote will not bind the board, but a low vote could prompt changes in compensation design, pacing of equity grants, or increased shareholder outreach; conversely, a strong vote would validate current policies. In evaluating this proposal, investors should consider the company’s clinical and financial milestones, historical grant practices (including repricing activity in 2025), severance/change-in-control protections for executives, and how pay outcomes correlate with realized performance or share price movement. The board recommends a vote FOR, emphasizing alignment with market practices and the committee’s use of independent compensation consulting advice, but investors should weigh the company’s prior vote results and whether corrective measures or enhanced disclosure have been implemented.

This management-sponsored adjournment proposal asks shareholders to authorize proxies to adjourn the Annual Meeting if there are insufficient votes to approve the Charter Amendment (increase in authorized shares) or the Plan Amendment (inclusion of pre-funded warrants in the evergreen calculation), or if a quorum is not present. The proposal is procedural and grants the board and its proxies discretion to delay the meeting to solicit additional votes, including from holders who previously voted, and to continue to present the contested proposals until the board is satisfied with the vote outcome. From a governance lens, the adjournment authority is a common device used to allow additional outreach and vote solicitation when management seeks to pass important corporate actions, but it can be controversial because it enables management to seek to overcome an initial shareholder rejection through extended solicitation efforts. The proposal is non-discretionary for brokers (i.e., brokers cannot vote uninstructed shares on this item), making broker-dependent votes potentially pivotal and giving greater weight to investor outreach. Investors should weigh the board’s stated rationale—avoiding the possibility of failed financings or constrained corporate flexibility—against concerns about limiting the finality of an initial shareholder expression and potential entrenchment. If approved, the board could adjourn without immediate vote on proposals and continue to solicit support; if rejected, management would lose a commonly used tactical lever to obtain necessary approvals and may need to accept the initial outcome. The board recommends FOR to preserve the ability to secure required approvals for proposals management considers essential to the company’s capital and operational strategy.