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Item
5.07
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Submission
of Matters to a Vote of Security Holders
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On
August 26, 2021, a majority of the Company’s stockholders approved, by written consent without a meeting, the Company’s 2021
Incentive Award Plan (“Award Plan”). The Award Plan was approved by the Company’s board of directors on August 19,
2021, and recommended to the stockholders for their approval.
The
principal purpose of the Award Plan is to attract, retain and motivate selected employees, consultants and directors through the granting
of stock-based compensation awards and cash-based performance bonus awards. The material terms of the Award Plan are summarized below.
Share
Reserve. Under the Award Plan, 4,500,000 shares of our common stock will be initially reserved for issuance pursuant to a variety
of stock-based compensation awards, including stock options, stock appreciation rights, restricted stock awards, restricted stock unit
awards, performance bonus awards, performance stock unit awards, dividend equivalents or other stock or cash based awards.
Administration.
The compensation committee of our board of directors is expected to administer the Award Plan unless our board of directors assumes authority
for administration. The board of directors may delegate its powers to a committee, which, to the extent required to comply with Rule
16b-3, is intended to be comprised of “non-employee directors” for purposes of Rule 16b-3 under the Exchange Act. The Award
Plan provides that the board of directors or leadership development, belonging and compensation committee may delegate its authority
to grant awards other than to individuals subject to Section 16 of the Exchange Act or officers or directors to whom authority to grant
awards has been
delegated.
Subject to the terms and conditions of the Award Plan, the administrator has the authority to select the persons to whom awards are to
be made, to determine the number of shares to be subject to awards and the terms and conditions of awards, and to make all other determinations
and to take all other actions necessary or advisable for the administration of the Award Plan. The administrator is also authorized to
adopt, amend or rescind rules relating to administration of the Award Plan. Our board of directors may at any time remove the leadership
development, belonging and compensation committee as the administrator and revest in itself the authority to administer the Award Plan.
Eligibility.
Awards under the Award Plan may be granted to individuals who are then our officers, employees or consultants or are the officers, employees
or consultants of certain of our subsidiaries. Such awards also may be granted to our directors. However, only employees of our company
or certain of our subsidiaries may be granted incentive stock options, or ISOs.
Awards.
The Award Plan provides that the administrator may grant or issue stock options, stock appreciation rights, restricted stock, restricted
stock unit awards, performance bonus awards, performance stock units, other stock- or cash-based awards and dividend equivalents, or
any combination thereof. Each award will be set forth in a separate agreement with the person receiving the award and will indicate the
type, terms and conditions of the award. Any award may be granted as a performance award, meaning that the award will be subject to vesting
and/or payment based on the attainment of specified performance goals. The Award Plan also provides that unless otherwise provided by
administrator or otherwise directed by the holder of an option or stock appreciation right, each vested and exercisable option and stock
appreciation right outstanding on the automatic exercise date with an exercise price per share that is less than the fair market value
per share as of such date will automatically be exercised on such date.
Adjustments
of Awards. The administrator has broad discretion to take action under the Award Plan, as well as make adjustments to the terms and
conditions of existing and future awards, to prevent the dilution or enlargement of intended benefits and facilitate necessary or desirable
changes in the event of certain transactions and events affecting our common stock, such as stock dividends, stock splits, mergers, acquisitions,
consolidations, and other corporate transactions. In addition, in the event of certain non-reciprocal transactions with our shareholders
known as “equity restructurings,” the administrator will make equitable adjustments to the Award Plan and outstanding awards.
Change
in Control. In the event of a change in control, unless the administrator elects to terminate an award in exchange for cash, rights
or other property, or cause an award to accelerate in full prior to the change in control, such award will continue in effect or be assumed
or substituted by the acquirer, provided that any performance-based portion of the award will be subject to the terms and conditions
of the applicable award agreement. In the event the acquirer refuses to assume or replace awards granted, prior to the consummation of
such transaction, awards issued under the Award Plan (other than any portion subject to performance-based vesting) will be subject to
accelerated vesting such that 100% of such awards will become vested and exercisable or payable, as applicable. The administrator may
also make appropriate adjustments to awards under the Award Plan and is authorized to provide for the acceleration, cash-out, termination,
assumption, substitution or conversion of such awards in the event of a change in control or certain other unusual or nonrecurring events
or transactions.
Amendment
and Termination. The administrator may terminate, amend or modify the Award Plan at any time and from time to time. However, we must
generally obtain shareholder approval to the extent required by applicable law, rule or regulation (including any applicable stock exchange
rule), and generally no amendment may materially and adversely affect any outstanding award without the affected participant’s
consent. Notwithstanding the foregoing, an option may be amended to reduce the per share exercise price below the per share exercise
price of such option on the grant date and options may be granted in exchange for, or in connection with, the cancellation or surrender
of options having a higher per share exercise price without receiving additional shareholder approval.
No
incentive stock options may be granted pursuant to the Award Plan after the tenth anniversary of the effective date of the Award Plan.
Any award that is outstanding on the termination date of the Award Plan will remain in force according to the terms of the Award Plan
and the applicable award agreement.
The
foregoing summary of the Award Plan is qualified in its entirety by reference to the full text of the 2021 Incentive Award Plan and the
Form of Stock Option Grant Notice and Stock Option Agreement under the 2021 Incentive Award Plan, which are attached hereto as Exhibits
10.1 and 10.2 and are incorporated herein by reference. You are urged to read said exhibits attached hereto in their entirety.