Authorized Shares. Subject to adjustment as described below, 500,000 shares of
our common stock are reserved for issuance under our ESPP (263,145 of which shares remained available for issuance as of March 31, 2020). If any option granted under our ESPP expires or terminates for any reason without having been exercised in
full or ceases for any reason to be exercisable in whole or in part, the unpurchased shares subject to such option will again be available for sale pursuant to the exercise of options under our ESPP. The closing price of our common stock as reported
on NASDAQ on April 24, 2020 was $2.79 per share.
Shares that may be issued under our ESPP may be authorized but unissued shares or
reacquired shares.
Participation. Eligible employees may elect to participate in an option period under our ESPP in the
manner and within the time periods established by the Board. A participant who holds an option under our ESPP may at any time prior to exercise cancel all (but not less than all) of his or her option by written notice to the Company. Upon
cancellation, the balance of the participants account under our ESPP will be returned to the participant.
Option Periods.
Unless otherwise determined by the Board, option periods under our ESPP will be approximately six months in duration and commence on the first business day of January and July of each year and end on the last business day of June and December of
each year, respectively.
Options. Subject to the limitations in our ESPP, on the first day of each option period,
participating employees will be granted an option to purchase no more than 20,000 shares of our common stock. On the last day of each option period, each employee who is a participant in our ESPP will be deemed to have exercised the option granted
to him or her for the option period.
Purchase Price. The purchase price of each share issued pursuant to the
exercise of an option under our ESPP on an exercise date will be 85% of the lesser of (i) the fair market value of a share on the date the option is granted and (ii) the fair market value of a share on the exercise date.
Transfer Restrictions. Options granted under our ESPP during the participants lifetime will be exercisable only by such
participant and may not be sold, pledged, assigned or transferred in any manner.
Adjustments. In the event of any change in
the outstanding stock of the Company by reason of a stock dividend, split-up, recapitalization, merger, consolidation, reorganization, or other capital change, the aggregate number and type of shares available
under our ESPP, the number and type of shares under options granted but not exercised, the maximum number and type of shares purchasable under an option, and the option price will be appropriately adjusted; provided that no adjustment will be made
unless the Company is satisfied that it will not constitute a modification of rights granted under our ESPP or otherwise disqualify our ESPP as an employee stock purchase plan under Section 423 of the Code.
Certain Transactions. In the event of a sale of all or substantially all of our stock or assets, or a merger or similar transaction in
which the Company does not survive or which results in the acquisition of the Company by another person, the Board will (i) if the Company is merged with or acquired by another corporation, provide that each outstanding option will be assumed
or that a substitute option will be granted by the acquirer, the successor or one of their parents or subsidiaries, (ii) cancel each option and return the balances in participants accounts under our ESPP to participants, or (iii) end
the option period on or before the date of the proposed sale or merger.
Term. Our ESPP, became effective on June 30, 2019,
the date it was approved by the board, subject to stockholder approval within 12 months following such date of approval, and no rights shall be granted thereunder after the tenth anniversary of such date of board approval.
Amendment and Termination. The Board may at any time amend our ESPP to the extent, and in any manner, it may deem advisable,
subject to stockholder approval if the amendment would be treated as the adoption of a new plan for purposes of Section 423 of the Code. The Board may suspend or terminate our ESPP at any time. In connection with any such suspension or
termination, the Board may provide that outstanding options will be exercisable either at the end of the applicable option period or such earlier date as the Board may specify.
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