The 2014 Plan provides that the Board of Directors or Compensation Committee may delegate
its authority, including the authority to grant awards to non-officer employees and service providers of the Company, to one or more executive officers to the extent permitted by applicable law.
Share Reserve
We initially
reserved 1,423,411 shares for issuance pursuant to grants made under our 2014 Plan, which included a number of shares of common stock equal to (i) 756,279 new shares, (ii) plus 70,310 shares, the number of shares available for
issuance under our 2006 Plan at the time our 2014 Plan became effective, and (iii) any shares subject to stock options or other stock awards granted under the 2006 Plan that would have otherwise returned to the 2006 Plan, such as upon the
expiration or termination of a stock award prior to vesting. The number of shares reserved for issuance under our 2014 Plan is subject to automatic increase on January 1 of each calendar year through 2024 by 4% of the total number of shares of
all classes of our common stock outstanding as of the immediately preceding December 31, or such lesser number of shares as determined by our Board of Directors. As a result, the number of shares reserved for issuance under our 2014 Plan
increased by 427,804; 688,479; 936,926; 938,897 and 941,494 shares on January 1 of 2015 through 2019.
Shares subject to awards
granted under our 2014 Plan and 2006 Plan that expire or terminate for any reason prior to exercise or settlement, are forfeited because of the failure to meet a contingency or condition required to vest such shares or that are repurchased at the
original issuance price, or are otherwise reacquired or are withheld (or not issued) to satisfy a tax withholding obligation in connection with an award will become available for future grant under our 2014 Plan.
As of September 18, 2019, there were 4,986,666 shares reserved for issuance under our 2014 Plan, of which 2,908,597 shares are subject to
outstanding stock options and 72,000 shares are subject to outstanding restricted stock units. If this proposal is approved, the number of shares reserved for issuance under our 2014 Plan will be 9,486,666 and will thereafter be subject to automatic
increase pursuant to the terms described above.
Eligibility; Non-Employee Director Share Limits
Our 2014 Plan provides for the grant of awards to our employees, directors, consultants, independent contractors and advisors.
As of September 18, 2019, approximately 14 employees, eight consultants or independent contractors and five non-employee directors are eligible to participate in the 2014 Plan.
Pursuant to the terms of the 2014 Plan, no participant may be granted (i) stock-based awards covering more than 5,445,000 shares of
common stock or (ii) performance cash awards for more than $2,500,000 in any calendar year, in each case subject to certain exceptions set forth in the 2014 Plan. In addition,
no non-employee director may receive awards under our 2014 Plan that, when combined with cash compensation received for service as a non-employee director,
exceed $600,000 in a calendar year.
Corporate Transactions
Our 2014 Plan provides that in the event of certain specified Corporate Transactions, as defined under our 2014 Plan, the Compensation
Committee may take any one or more of the following actions with respect to outstanding awards, which outstanding awards need not be treated identically: (i) arrange for the assumption, continuation or substitution of outstanding awards by a
successor corporation (including, but not limited to, an award to acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction); (ii) arrange for the assignment of any reacquisition or repurchase
rights held by the Company to a successor corporation; (iii) accelerate the vesting, in whole or in part, of any award and provide for its termination prior to the transaction; (iv) arrange for the lapse, in whole or in part, of any
reacquisition or repurchase rights held by the Company; or (v) cancel or arrange for the cancellation of any award prior to the transaction in exchange for a cash payment, if any, determined by the Compensation Committee.
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