Sensei Biotherapeutics Inc

This management proposal seeks shareholder authorization to permit the automatic conversion of the Series B Non‑Voting Convertible Preferred Stock issued in connection with the Faeth acquisition and the concurrent PIPE financing into common stock. Under the transaction terms the Series B Preferred Stock would convert into approximately 24.9 million common shares (1,000-to-1 conversion), which, if converted without beneficial ownership limitations, would exceed 20% of the Company’s outstanding common stock and trigger Nasdaq Listing Rule requirements. Nasdaq rules require stockholder approval for issuances above 20% and for transactions that Nasdaq deems to result in a change of control; the Company is therefore seeking approval both to comply with Nasdaq Listing Rule 5635(a) (more than 20% issuance) and 5635(b) (change-of-control analysis) and to permit the waiver of beneficial ownership conversion limits after Nasdaq approval. Management frames this as a validation of the already-completed acquisition structure (the Acquisition and PIPE) and a procedural step required for Nasdaq compliance and for enabling holders to convert their preferred shares into common shares and, ultimately, to list on Nasdaq under the expected post‑transaction structure. The board recommends a “FOR” vote because without approval the Series B Preferred Stock would remain non‑convertible under Nasdaq rules, the company could be required to cash settle conversions (potentially large cash outflows), and the company would face repeated shareholder meetings and additional cost and disruption to obtain approvals. Key governance/context issues include the fact that conversion will materially dilute legacy shareholders (from roughly 95% issuance on an as‑converted basis as disclosed) and will reconstitute management and the board, which the proxy discloses; supportive stockholder commitments (support agreements) representing ~1.5% of legacy shares also exist. Vote risk centers on legacy shareholder dilution, change-of-control concerns and the economic and governance consequences of the PIPE investors and Faeth equity holders becoming controlling shareholders; Nasdaq approval remains a condition to some waivers and post-closing corporate changes. For an investor evaluating the merits, the proposal is transaction-and-listing‑driven rather than an operational governance change and should be judged on whether the strategic rationale of the acquisition and the financing (e.g., advancing PIKTOR with the PIPE proceeds) outweighs the immediate dilution and governance changes described in the proxy.

This management proposal requests stockholder approval to amend the Company’s certificate of incorporation to expand authorized common shares from 12.5 million to 300 million. The stated immediate purpose is to create the share capacity necessary for the automatic conversion of the Series B Preferred Stock issued in the Acquisition and the PIPE, which would otherwise be blocked by the existing authorized share ceiling. Management also emphasizes the utility of a larger authorization to support future equity financings, acquisitions, equity‑based compensation (including the proposed 2026 Plan and ESPP), and other corporate actions without the delay and expense of repeated shareholder votes. The Board argues that approval is necessary to permit conversion of the Series B Preferred Stock per the Certificate of Designation and to avoid cash‑settlement or repeated shareholder meetings; failure to approve would force the company to adjourn and re-solicit votes and could trigger cash settlement obligations to preferred holders after a six‑month period. From a governance and investor perspective the major implications are substantial potential dilution and increased Board authority to issue shares without immediate shareholder approval (subject to legal and Nasdaq constraints). The proxy highlights that following the Acquisition and PIPE, legacy shareholders’ ownership was projected to fall to a small minority on an as‑converted basis and that the authorized‑share increase is a necessary step to effectuate that conversion; it discloses support agreements for certain management/director stockholders. For activist or legacy investors the critical evaluation is whether the enlarged authorization is narrowly tailored to enable the conversion and planned equity awards or whether it creates an open-ended dilution tool for management; the company states no present plan to issue additional preferred shares and notes that the Board will consider fiduciary duties in any issuance. Approving shareholders should weigh the strategic financing and operational rationale against dilution and anti‑takeover concerns inherent in a large authorized share pool.

This proposal seeks shareholder approval of a new omnibus equity incentive plan that would succeed the company’s prior plan and reserve a sizeable pool of shares for stock options, restricted stock units, performance awards and other equity compensation, including an automatic annual increase feature. Management and the Compensation Committee state that the 2026 Plan is intended to align employees’ and directors’ interests with long‑term stockholder value, provide competitive compensation, and support retention following the Acquisition; the board has already approved certain contingent grants (220,000 shares to the President and General Counsel contingent on shareholder approval). The plan’s structure includes an initial share reserve, automatic annual increases (5% of outstanding shares for 2027–2036 in the draft), and customary limits on ISOs, repricing controls subject to participant consent and committee authority, change‑in‑control provisions and clawback language. From a governance standpoint, investors should evaluate dilution assumptions (including how many shares are reserved in light of the post‑transaction fully diluted capitalization), burn rate history, the plan’s administrative authorities (broad discretion to set award terms, reprice with consent), and the interaction between the new plan and assumed Faeth awards that are not counted against the pool. The board recommends for approval on the basis that the company needs an equity program sufficiently large to retain and incentivize personnel through clinical and commercial milestones; critics will focus on potential excessive dilution, the automatic annual increases, and the board’s discretion to reprice or amend awards, though material repricings require participant consent. In the context of a controlling investor group post‑PIPE, shareholders should also consider how future awards could affect control dynamics.

This management proposal asks shareholders to approve an employee stock purchase plan that includes a Section 423 qualified component and a non‑423 component for international or other eligible employees. The ESPP would reserve 267,198 shares initially (with an automatic annual share increase mechanism) and permit employees to purchase stock via payroll deductions, typically at a discount (the plan contemplates up to 85% of the lesser of the offering‑date or purchase‑date price). Management positions the ESPP as a broad‑based retention and engagement tool that complements the executive equity plan and aids in recruiting talent. Key investor considerations include the plan’s dilutive impact relative to the company’s post‑transaction capitalization, the mechanics of enrollment and purchase periods (offerings up to 27 months, purchase price at 85% formula), and the automatic annual increases which could expand dilution over time. Because the ESPP is an employee‑focused program, opposition tends to be limited, but some investors scrutinize the size of the reserve and the potential interaction with other equity programs in periods of heavy grant activity. The Board’s recommendation emphasizes competitive practices and broad employee ownership as net positives for long‑term performance.

This management proposal requests authorization for the meeting’s proxy holders to adjourn or postpone the Annual Meeting if Proposals 3–6 have not received sufficient votes for approval or if Nasdaq has not yet approved the Company’s initial listing application as required by the transaction agreements. It is a procedural measure designed to allow the Company to continue soliciting votes (and, if appropriate, to seek additional approvals or clarifications from Nasdaq) without the expense and delay of convening separate special meetings. The Board frames this as a practical necessity given the interdependence of the Nasdaq Listing Application approval and stockholder approval of the Required Company Stockholder Matters; if not approved, the company could be forced into repeated meetings and potential cash settlement obligations to preferred holders. The vote is routine in contested or complex transactions and is low risk substantively, but a “for” vote gives management the ability to keep soliciting support for the very consequential proposals (3–6) after the meeting adjournes. For governance-minded investors, the adjournment authority is neutral if used only to complete the soliciting process but could be concerning if used to unduly delay consideration of shareholder opposition; the company states that approvals would be sought in good faith and that adjourning would be time‑limited in practice.