PROPOSAL NO. 3
APPROVAL OF AN AMENDMENT TO THE 2018 PLAN
On April 12
, 2019, our board of directors unanimously approved an amendment (the Plan Amendment) to the 2018 Plan,
and directed the submission of the Plan Amendment for approval by our stockholders at the Annual Meeting.
If approved by our
stockholders, the Plan Amendment would increase the amount of the total number of shares reserved and available for delivery under the 2018 Plan by 2,800,000 shares (from 2,820,000 (as adjusted for the Reverse Stock Split) to 5,620,000, plus any
shares of our common stock subject to awards granted under the 2010 Plan that become available for issuance under the 2018 Plan in accordance with the terms of the 2018 Plan.
Our board of directors considers the proposed increase in the number of shares of our common stock available for delivery under the 2018 Plan
desirable because it will give the board of directors the flexibility to issue additional awards to employees,
non-employee
directors, and consultants of our company and our affiliates. As of April 8,
2019, a total of 2,743,003 shares had been reserved under the 2018 Plan and the 2010 Plan for awards previously granted to our employees,
non-employee
directors, and consultants, and an additional 143,500
shares remained available for award at such date.
Set forth below is a summary of the principal provisions of the 2018 Plan. The summary
is qualified by reference to the full text of the Plan Amendment and the 2018 Plan. The Plan Amendment is attached as Annex B. Terms that are capitalized, but not defined, have the specific meaning provided in the 2018 Plan.
Purpose
The purpose of the 2018 Plan is
to assist our company and our subsidiaries in attracting, motivating, retaining, and rewarding high-quality executives and other employees, officers, directors, and individual consultants who provide services to our company or our subsidiaries, by
enabling such persons to acquire or increase a proprietary interest in our company in order to strengthen the mutuality of interests between such persons and our stockholders, and providing such persons with performance incentives to expend their
maximum efforts in the creation of stockholder value.
Shares Available for Awards; Annual Per Person Limitations
If any shares of our common stock (Shares) subject to an award granted under the 2018 Plan (Awards), or Shares subject
to any awards granted under the 2010 Plan, are forfeited, expire, or otherwise terminate without issuance of such Shares, or any Award, or Shares subject to any award granted under the 2010 Plan, is settled for cash or otherwise does not result in
the issuance of all or a portion of the Shares subject to such Award or award under the 2010 Plan, the Shares to which those Awards or awards under the 2010 Plan were subject will, to the extent of such forfeiture, expiration, termination,
non-issuance,
or cash settlement, again be available for delivery with respect to Awards under the 2018 Plan.
In the event that any option or other Award granted under the 2018 Plan, or any award granted under the 2010 Plan, is exercised through the
tendering of Shares (either actually or by attestation) or by the withholding of Shares by our company, or withholding tax liabilities arising from option or other Award, or any award granted under the 2010 Plan, are satisfied by the tendering of
Shares (either actually or by attestation) or by the withholding of Shares by our company, then only the number of Shares issued net of the shares tendered or withheld will be counted for purposes of determining the maximum number of Shares
available for grant under the 2018 Plan.
Substitute Awards will not reduce the Shares authorized for delivery under the 2018 Plan or
authorized for delivery to a participant in any period. Additionally, in the event that an entity acquired by us or any of our
32