PROPOSAL THREE
APPROVAL OF AMENDMENT AND RESTATEMENT OF THE 2015 INCENTIVE PLAN
Overview
We currently
maintain the 2015 Incentive Plan, which was adopted by the Board of Directors on March 11, 2015, and approved by stockholders at our 2015 Annual Meeting, on May 19, 2015, and subsequently amended and restated (as amended and restated, the
2015 Incentive Plan).
We are asking stockholders to approve an amendment and restatement of the 2015 Incentive
Plan (the Amendment and Restatement) that would (i) add 4,860,000 new shares of our Common Stock to the pool of shares available for awards, (ii) provide that the payment of dividends and dividend equivalents, if any, on the
shares of Common Stock subject to a restricted stock award, restricted stock unit award, or performance award will be paid only when, and to the extent that, the applicable award is earned or vests, and (iii) extend the term of the 2015
Incentive Plan until May 18, 2030. The Amendment and Restatement was adopted by the Board of Directors on March 26, 2020, subject to stockholder approval.
Under the 2015 Incentive Plan, the Company may issue shares of Common Stock to employees, officers, non-employee directors, consultants and advisors of the Company,
or of any affiliate, as the Compensation Committee may determine and designate from time to time, in the form of restricted stock, restricted stock units, stock options, stock appreciation rights (SARs), performance awards and incentive
awards.
The Board of Directors and the Compensation Committee believe that the 2015 Incentive Plan is a key part of the
Companys compensation philosophy and programs. Our ability to attract, retain and motivate highly qualified officers, non-employee directors, key employees, consultants and advisors is critical to our
success. The Board and the Compensation Committee believe that the interests of the Company and its stockholders will be advanced if we can continue to offer our officers, non-employee directors, key
employees, consultants and advisors the opportunity to acquire or increase a direct proprietary interest in the operations and future success of the Company.
The Company reserved 13,440,011 shares of Common Stock for issuance pursuant to awards under the 2015 Incentive Plan. As of March 20, 2020, 2,914,833 shares of Common Stock remained reserved for
issuance. Additionally, as of March 20, 2020, there were 4,411,015 outstanding full value awards and 1,240,000 outstanding options with a weighted average exercise price of $10.66 and a weighted average remaining contractual life of 1.85 years
under the 2015 Incentive Plan.
In order to increase the pool of shares available for future equity award grants to continue to
operate our compensation program in a manner consistent with past practices and to accommodate anticipated growth, on March 26, 2020, the Board adopted, subject to stockholder approval, the Amendment and Restatement, to (i) add 4,860,000
shares of Common Stock to the pool of shares available for equity awards, (ii) provide that the payment of dividends or dividend equivalents, if any, on the shares of Common Stock subject to a restricted stock award, restricted stock unit
award, or performance award will be paid only when, and to the extent that, the applicable award is earned or vests, and (iii) extend the term of the 2015 Incentive Plan until May 19, 2030. The proposed increase to the share pool, the
restriction on the payment of dividends or dividend equivalents on restricted or unvested awards and the extension of the term of the 2015 Incentive Plan are the only substantive changes to the 2015 Incentive Plan included in the Amendment and
Restatement. We currently anticipate that if the Amendment and Restatement is approved, the number of shares reserved for awards under the 2015 Incentive Plan will be sufficient to cover our equity awards for at least two years.
It is the intention of the Board to prohibit the payment of dividends or dividend equivalents, if any, on the shares of Common Stock
subject to any award unvested or unearned granted under the 2015 Incentive Plan. In this regard, the amendments to the 2015 Incentive Plan prohibit the payment of dividends or dividend equivalents, if any, on the shares of Common Stock subject to a
restricted stock award, restricted stock unit award, or performance award until, and to the extent that, the applicable award is earned or vests, as these types of awards are eligible to receive dividends or dividend equivalents under the terms of
the plan. The Board does not believe that dividend or dividend equivalent rights, if any, apply to other types of equity permitted under the
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