UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
(Amendment
No.[ ])
Filed
by the Registrant ☒
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Filed
by a party other than the Registrant ☐
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Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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Oragenics,
Inc.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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No
Fee Required
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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(1)
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Title
of each class of securities to which transaction applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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Fee
paid previously with preliminary materials.
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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4902
Eisenhower Blvd., Suite 125
Tampa,
Florida 33634
October
[ ], 2021
Dear
Fellow Shareholders:
You
are cordially invited to attend the Annual Meeting of Shareholders of Oragenics, Inc., which will be held on November 22, 2021, beginning
at 9:00 a.m. Eastern Time. The meeting will be held at the offices of Shumaker, Loop, & Kendrick,
Bank of America Plaza, 101 E Kennedy Blvd Suite 2800, Tampa, FL 33602. The purpose of the meeting is to consider and vote upon
the proposals explained in the accompanying Notice of Annual Meeting of Shareholders and the Proxy Statement.
A
formal notice describing the business to come before the meeting, a proxy statement and a proxy card are enclosed. We have also enclosed
our 2020 Annual Report on Form 10-K for your review, which contains detailed information concerning our financial performance and activities
during 2020.
It
is important that your shares be represented at the Annual Meeting of Shareholders. Whether or not you plan to attend the annual meeting
in person, please vote your shares by completing, signing and dating the enclosed proxy card, and returning it in the enclosed, postage-paid
envelope. If you later decide to attend the annual meeting and vote in person, or if you wish to revoke your proxy for any reason before
the vote at the annual meeting, you may do so and your proxy will have no further effect.
Sincerely,
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Michael
Sullivan
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Interim
Principal Executive Officer and Chief Financial Officer
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Enclosures
ORAGENICS,
INC.
4902
Eisenhower Blvd., Suite 125
Tampa,
Florida 33634
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD ON NOVEMBER 22, 2021
Notice
is hereby given to the shareholders of Oragenics, Inc., a Florida Corporation (the “Company”) that the 2020 Annual Meeting
of Shareholders of the Company (including any postponements or adjournments thereof, the “Annual Meeting”) will be held at
the offices of Shumaker, Loop, & Kendrick, Bank of America Plaza, 101 E Kennedy Blvd Suite
2800, Tampa, FL 33602 on November 22, 2021, at 9:00 a.m. Eastern Time, for the following purposes:
(i)
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To
elect five (5) Directors of the Company to serve until the next Annual Meeting of Shareholders;
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(ii)
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To
conduct a non-binding advisory vote on executive compensation;
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(iii)
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To
approve the adoption of an amendment to our Amended and Restated Articles of Incorporation which will provide a reduced quorum requirement
of one-third (1/3) of shares entitled to be cast, represented in person or by a proxy, in order to constitute a meeting of shareholders;
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(iv)
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To
approve the adoption of an amendment to our Amended and Restated Articles of Incorporation which will increase the number of authorized
shares of our Common Stock from 200,000,000 shares of Common Stock to 250,000,000 shares of Common Stock;
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(v)
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To
approve the Company’s 2021 Equity Incentive Plan;
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(vi)
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To
ratify the selection of Mayer Hoffman McCann P.C. as the Company’s independent auditors for the year ending December 31, 2021;
and
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(vii)
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To
transact such other business as may properly come before the Annual Meeting.
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All
shareholders are cordially invited to attend the Annual Meeting of Shareholders. Information relating to the Annual Meeting of Shareholders
and matters to be considered and voted upon at the Annual Meeting of Shareholders are set forth in the attached Proxy Statement.
Only
those shareholders of record at the close of business on October 1, 2021, are entitled to notice of and to vote at the Annual Meeting
of Shareholders. A complete list of shareholders entitled to vote at the Annual Meeting of Shareholders will be available for examination
by any shareholder at the Annual Meeting of Shareholders and for a period of ten days prior thereto at the executive offices of the Company
in Tampa, Florida.
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BY
ORDER OF THE BOARD OF DIRECTORS,
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Tampa,
Florida
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MICHAEL
SULLIVAN
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[ ],
2021
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Secretary
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WHETHER
OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE VOTE, SIGN, DATE, AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENCLOSED BUSINESS
REPLY ENVELOPE. IF YOU ATTEND THE ANNUAL MEETING YOU MAY, IF YOU WISH, WITHDRAW YOUR PROXY APPOINTMENT AND VOTE IN PERSON.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDERS MEETING TO BE HELD ON NOVEMBER 22, 2021.
This
Proxy Statement and our 2020 Annual Report on Form 10-K for the year ended December 31, 2020, which was filed on March 1, 2021, with
the Securities and Exchange Commission, except for exhibits, are available at: https://ir.oragenics.com/annual-reports
TABLE
OF CONTENTS
ORAGENICS,
INC.
PROXY
STATEMENT
FOR
HOLDERS OF COMMON STOCK
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD ON NOVEMBER 22, 2021
INFORMATION
CONCERNING SOLICITATION AND VOTING
General
This
Proxy Statement is furnished to shareholders, of Oragenics, Inc., a Florida corporation (the “Company”), in connection with
the solicitation of proxies by the Company’s Board of Directors from shareholders for use at the 2020 Annual Meeting of Shareholders
to be held at 9:00 a.m. Eastern Time at the offices of Shumaker, Loop, & Kendrick, Bank of
America Plaza, 101 E Kennedy Blvd Suite 2800, Tampa, FL 33602 on November 22, 2021 (including any postponements or adjournments
thereof, the “Annual Meeting”).
The
Annual Meeting will be held for the following purposes:
(i)
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To
elect five (5) Directors of the Company to serve until the next Annual Meeting of Shareholders;
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(ii)
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To
conduct a non-binding advisory vote on executive compensation;
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(iii)
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To
approve the adoption of an amendment to our Amended and Restated Articles of Incorporation which will provide a reduced quorum requirement
of one-third (1/3) of shares entitled to be cast, represented in person or by a proxy, in order to constitute a meeting of shareholders;
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(iv)
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To
approve the adoption of an amendment to our Amended and Restated Articles of Incorporation which will increase the number of authorized
shares of our Common Stock from 200,000,000 shares of Common Stock to 250,000,000 shares of Common Stock;
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(v)
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To
approve the Company’s 2021 Equity Incentive Plan;
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(vi)
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To
ratify the selection of Mayer Hoffman McCann P.C. as the Company’s independent auditors for the year ending December 31, 2021;
and
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(vii)
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To
transact such other business as may properly come before the Annual Meeting.
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This
Proxy Statement and the accompanying Proxy are first being mailed to shareholders of the Company on or about September [ ],
2021.
Record
Date and Voting Securities
Only
shareholders of record of the Company at the close of business on October 1, 2021 (the “Record Date”) will be entitled to
notice of, and to vote at, the Annual Meeting of Shareholders. On the Record Date, there were [ ] shares of common stock issued and outstanding
(“Common Stock”). Each share of Common Stock is entitled to one vote for each share of Common Stock held. In addition, on
the Record Date we had the following shares of Preferred Stock outstanding:
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9,417,000
shares of Series A Non-Voting, Convertible Preferred Stock, convertible into 941,700 shares of Common Stock; and
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6,600,000
shares of Series B Non-Voting, Convertible Preferred Stock convertible into 1,320,000 shares of Common Stock; and
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Notwithstanding
the Record Date specified above, the Company’s stock transfer books will not be closed and shares may be transferred subsequent
to the Record Date. However, all votes must be cast in the names of shareholders of record on the Record Date.
Quorum
Requirement
The
holders of record of a majority of the votes of Common Stock entitled to be voted at the Annual Meeting of Shareholders, present in person
or by proxy, are required to establish a quorum for the Annual Meeting and for voting on each matter. A broker non-vote is when a brokerage
firm or bank holding shares of record for their customers in street name does not receive specific instructions from their customers,
as the beneficial owners, and the brokerage firm or bank advises that it lacks discretionary voting authority on a particular proposal
and has not received instructions from the beneficial owner.
Vote
Required
PROPOSAL
I: Election of Directors. The election of five Directors by the holders of Common Stock will require a plurality of the votes cast
by the shares of Common Stock represented and entitled to vote in the election at the Annual Meeting of Shareholders. With respect to
the election of Directors, shareholders may (i) vote “for” each of the nominees, (ii) withhold authority for each of such
nominees, or (iii) withhold authority for specific nominees but vote for the other nominees. Because the Directors are elected by a plurality
of the votes cast by the shares represented and entitled to vote and are running unopposed, any nominee can be elected upon any affirmative
vote regardless of whether such nominee receives more than 50% of the shareholder vote. Votes that are withheld or a broker non-vote
will have no effect on the outcome of the election of Directors.
PROPOSAL
II: To conduct an advisory vote on executive compensation. The proposal regarding the approval, on an advisory basis, of the Company’s
executive compensation requires the affirmative vote of a majority of the shares of Common Stock of the Company present in person or
represented by proxy and entitled to vote at the Annual Meeting of Shareholders. Broker non-votes
will have no effect on the outcome of the proposal. Abstentions have the same effect as votes against the proposal.
PROPOSAL
III: To approve the adoption of an amendment to Company’s Articles of Incorporation to reduce the quorum requirement from a
majority of shares entitled to be cast to one-third (1/3) of shares entitled to be cast. Approval of this proposal requires the affirmative
vote of a majority of the shares of Common Stock of the Company present in person or represented by proxy and entitled to vote at the
Annual Meeting. With respect to this proposal, shareholders may (i) vote “for” the proposal, (ii) vote “against”
the proposal, or (iii) abstain from voting. Broker non-votes will have no effect on the outcome of the proposal. Abstentions have the
same effect as votes against the proposal.
PROPOSAL
IV: To approve the adoption of an amendment to Company’s Articles of Incorporation to
increase the number of authorized shares of Common Stock from 200 million shares to 250 million shares. Approval requires the affirmative
vote of a majority of the shares of Common Stock of the Company present in person or represented by proxy and entitled to vote at the
Annual Meeting for approval of the plan amendment. With respect to this proposal, shareholders may (i) vote “for” the proposal,
(ii) vote “against” the proposal, or (iii) abstain from voting. Abstentions will have the same effect as a vote against the
proposal. The approval of the adoption of an amendment to the Company’s Articles of Incorporation is a proposal on which
a broker or other nominee is generally empowered to vote in the absence of voting instructions from the beneficial owner, so broker non-votes
are unlikely to result from this proposal, but if you do not provide voting instructions and your broker or nominee fails to vote your
shares, this will have the same effect as a vote against the proposal.
PROPOSAL
V: To approve the Company’s 2021 Equity Incentive Plan. Approval requires the affirmative
vote of a majority of the shares of Common Stock of the Company present in person or represented by proxy and entitled to vote at the
Annual Meeting for approval of the 2021 Plan. With respect to this proposal, shareholders may (i) vote “for” the proposal,
(ii) vote “against” the proposal, or (iii) abstain from voting. Broker non-votes will have no effect on the outcome of the
proposal. Abstentions have the same effect as votes against the proposal.
PROPOSAL
VI: Ratification of the selection of Mayer Hoffman McCann P.C. as the Company’s independent auditors for the year ending December
31, 2021. Approval requires the affirmative vote of a majority of the shares of Common Stock present in person or represented by proxy
and entitled to vote at the meeting and entitled to vote on the proposal. Abstentions will have
the same effect as a vote against the proposal. The ratification of accountants is a routine proposal on which a broker or other
nominee is generally empowered to vote in the absence of voting instructions from the beneficial owner, so broker non-votes are unlikely
to result from this proposal, but if you do not provide voting instructions and your broker or nominee fails to vote your shares, this
will have the same effect as a vote against the proposal
Recommendation
of the Board of Directors
The
Board unanimously recommends that you vote your shares:
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“FOR”
the nominees listed in Proposal I below;
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“FOR”
the approval, on an advisory basis, of the compensation of our named executive officers as disclosed in this Proxy Statement,
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“FOR”
the approval of the adoption of an amendment to Company’s Articles of Incorporation
to reduce the quorum requirement from a majority of shares entitled to be cast to one-third
(1/3) of shares entitled to be cast;
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“FOR”
the approval of the adoption of an amendment to Company’s Articles of Incorporation
to increase the number of authorized shares of Common Stock from 200 million to 250 million;
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“FOR”
the approval of the Company’s 2021 Equity Incentive Plan; and
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“FOR”
the ratification the selection of Mayer Hoffman McCann P.C. as the Company’s independent auditors for the year ending December
31, 2021.
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Voting
All
shares entitled to vote and represented by properly executed proxies received prior to the Annual Meeting of Shareholders, and not revoked,
will be voted at the annual meeting in accordance with the instructions indicated. If you submit a proxy and do not make voting selections,
the shares represented by that proxy will be voted as recommended by the Board. If any other matters are properly presented for consideration
at the Annual Meeting of Shareholders, including, among other things, consideration of a motion to adjourn the annual meeting to another
time or place (including, without limitation, for the purpose of soliciting additional proxies), the persons named as proxies and acting
thereunder will have discretion to vote on those matters in accordance with their best judgment. To the extent permitted by Rule 14a-4(c)
of the Securities and Exchange Commission, the persons named as proxies on the proxy cards will have discretionary authority to vote
in their judgment on any proposals properly presented by shareholders for consideration at the Annual Meeting of Shareholders that were
not submitted to the Company within a reasonable time prior to the mailing of these proxy materials. At the time this proxy statement
was mailed, we were unaware of any matters proposed to be acted on at the Annual Meeting of Shareholders other than those discussed in
this proxy statement.
Shareholders
of record — If your shares are registered directly in your name with Oragenics’ transfer agent, Continental Stock Transfer
& Trust Company, you are considered, with respect to those shares, the shareholder of record, and the proxy materials and Annual
Report have been sent directly to you. As a shareholder of record, you may instruct the proxy holders how to vote your shares by completing,
signing, dating and returning the proxy card in the postage pre-paid envelope provided. Proxy cards submitted by mail must be received
by the time of the Annual Meeting of Shareholders in order for your shares to be voted. If you sign and return a proxy card without giving
specific voting instructions, your shares will be voted as recommended by our Board. You may also vote by proxy via telephone by calling
Alliance Advisors, Toll Free: 1-855-723,7816 and Outside North America: 1-973-873-7700.
If
you attend the Annual Meeting of Shareholders, you may also submit your vote in person, and any previous votes that you submitted, will
be superseded by the vote that you cast at the Annual Meeting of Shareholders. If you plan to attend the annual Meeting of Shareholders,
please bring proof of identification for entrance to the Annual Meeting of Shareholders.
Beneficial
owners — Many Oragenics shareholders hold their shares through a broker, trustee or other nominee, rather than directly in
their own name. If your shares are held in a brokerage account or by a bank or another nominee, you are considered the “beneficial
owner” of shares held in “street name,” and the Annual Meeting of Shareholders proxy materials have been forwarded
to you by your broker, trustee or nominee who is considered, with respect to those shares, the shareholder of record. As a beneficial
owner, you have the right to direct your broker, trustee or other nominee on how to vote your shares, and you will receive instructions
from them that you must follow in order to have your shares voted. The instructions from your broker, bank or other nominee will indicate
if Internet and telephone voting are available, and if they are available, will provide details regarding Internet and telephone voting.
Because
a beneficial owner is not the shareholder of record, you may not vote these shares in person at the Annual Meeting of Shareholders unless
you obtain a “legal proxy” from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares
at the Annual Meeting of Shareholders.
Changing
Vote; Revocability of Proxies
Subject
to any rules your broker, trustee or nominee may have, you may change your proxy instructions at any time before your proxy is voted
at the Annual Meeting of Shareholders.
Shareholders
of record — If you are a shareholder of record, you may change your vote (1) by delivering to us (Attention: Corporate Secretary,
4902 Eisenhower Blvd., Suite 125, Tampa, Florida 33634), prior to your shares being voted at the Annual Meeting of Shareholders, a later
dated written notice of revocation or a duly executed proxy card, or (2) by attending the Annual Meeting of Shareholders and voting in
person (although attendance at the Annual Meeting of Shareholders will not, by itself, revoke a proxy). A shareholder of record that
has voted on the Internet or by telephone may also change his or her vote by subsequently making a timely and valid later Internet or
telephone vote.
Beneficial
owners — If you are a beneficial owner of shares held in street name, you may change your vote (1) by submitting new voting
instructions to your broker, trustee or nominee, or (2) if you have obtained a legal proxy from the broker, trustee or nominee that holds
your shares giving you the right to vote the shares, by attending the Annual Meeting of Shareholders and voting in person.
Effect
of Not Casting Your Vote
Shareholders
of record — If you are a shareholder of record and you do not cast your vote, no votes will be cast on your behalf on any of
the items of business at the Annual Meeting of Shareholders.
Beneficial
owners — If you hold your shares in street name, it is critical that you cast your vote if you want it to count in the election
of Directors (Proposal I); to conduct a non-binding advisory vote on executive compensation (Proposal II); and the approval of the
Company’s 2021 Equity Incentive Plan (Proposal V) since those are considered non-routine proposals under applicable NYSE
American LLC (“NYSE American”) rules. Under the rules, if you do not instruct your broker, bank or other nominee in a timely
fashion how to vote your shares (so-called “broker non-votes”) the broker or nominee can vote your shares as it sees fit
only on matters that are determined to be routine, and not on any other proposal. The proposal for the approval of the
adoption of an amendment to Company’s Articles of Incorporation to increase the number of authorized shares of Common Stock from
200 million to 250 million (Proposal IV) and the ratification of the auditors (Proposal VI) are considered to be routine proposals
under NYSE American rules and your nominee can vote on such proposal even if it does not receive voting instructions from you. However,
your nominee cannot vote on Proposal I, Proposal II, Proposal III or Proposal V without your voting instructions. Please be sure to give
specific voting instructions so that your vote can be counted.
Expenses
of Solicitation
We
will bear the entire cost of proxy solicitation, including preparation, assembly, printing and mailing of the Proxy Materials, the Notice,
and any additional materials furnished to shareholders. Copies of proxy solicitation material will be furnished to brokerage houses,
fiduciaries, and custodians holding shares in their names which are beneficially owned by others to forward to such beneficial owners.
In addition, we may reimburse such persons for their cost of forwarding the solicitation material to such beneficial owners. We have
retained Alliance Advisors to assist in the distribution of proxy materials and the solicitation
of votes by mail, facsimile or email from brokerage firms, banks, broker-dealers or other similar organizations for the Annual Meeting
for a fee of $12,500, plus additional fees based on the amount and types of services rendered and reimbursement of reasonable expenses.
If you have any questions or need assistance in voting your proxy, please contact Alliance Advisors at the number or email address
listed below:
Alliance
Advisors, 200 Broadacres Drive, 3rd Fl., Bloomfield, NJ 07003
Telephone:
Toll Free: 1-855-723-7816 and Outside North America: 1-973-873-7700
Email:
OGEN@allianceadvisorsllc.com
Solicitation
of proxies by mail may also be supplemented by one or more of telephone, email, telegram, facsimile, or personal solicitation by our
Directors, officers, or regular employees. No additional compensation will be paid for such services.
Shareholder
Proposals to Be Presented at Next Annual Meeting of Shareholders
Requirements
for shareholder proposals to be considered for inclusion in Oragenics’ proxy materials. Shareholders interested in submitting
a proper proposal for inclusion in the proxy materials for our next annual meeting may do so by submitting such proposal in writing to
our offices located at 4902 Eisenhower Blvd., Suite 125, Tampa, Florida 33634, Attn: Corporate Secretary. To be eligible for inclusion,
shareholder proposals must be received by us not less than 120 days before the one year anniversary on which Oragenics’ first mailed
its proxy statement to shareholders in connection with the previous year’s annual meeting of shareholders, which will be January
24, 2022 for the next annual meeting, and must otherwise comply with the requirements of Rule 14a-8 under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), provided, however, that in the event that the date of the annual meeting has been
changed more than 30 days from the one year anniversary of the date of the previous year’s meeting, then the deadline for receipt
of notice by the shareholder is within a reasonable time before the Company begins to print and send its proxy materials in order to
be eligible for inclusion in the Company’s Proxy Statement and Proxy relating to that meeting.
Requirements
for shareholder business or nominations to be brought before Oragenics’ annual meetings. Our bylaws do not establish an advance
notice procedure for shareholders who wish to present certain matters, including nominations of persons for election to the Board and
shareholder proposals not included in our proxy statement, to be brought before an annual meeting of shareholders. Shareholder proposals,
including the nomination of a person for election to the Board, brought before the meeting should consider including, among other things:
information as follows: (i) a description of the business desired to be brought before the meeting and the reasons for conducting the
business at the meeting, (ii) the name and address, as they appear on the Company’s books, of the shareholder submitting the proposal,
(iii) the number of shares that are beneficially owned by such shareholder, (iv) the dates on which the shareholder acquired the shares,
(v) documentary support for any claim of beneficial ownership, (vi) any material interest of the shareholder in the proposal, (vii) a
statement in support of the proposal, and (viii) any other information that may be required by applicable rules and regulations of the
Commission.
Shareholders
may also submit a recommendation (as opposed to a formal nomination) for a candidate for membership on our Board by following the procedures
set forth in “Corporate Governance —Meetings of the Board of Directors — Shareholder Recommendation of Nominees.”
Delivery
of Proxy Materials to Shareholders
If
you share an address with another shareholder, each shareholder may not receive a separate copy of the Notice or Proxy Materials. Shareholders
may request to receive a separate copy of the Notice or Proxy Materials, by writing to Oragenics, Inc., 4902 Eisenhower Blvd., Suite
125, Tampa, Florida 33634, Attention: Corporate Secretary or calling 813-286-7900. Alternatively, shareholders who share an address and
receive multiple copies of the Notice or Proxy Materials may request to receive a single copy by following the same instructions.
You
may also request additional copies from our proxy solicitor, Alliance Advisors, 200 Broadacres Drive, 3rd Fl., Bloomfield, NJ 07003,
Telephone: Toll Free: 1-855-723-7816 and Outside North America: 1-973-873-7700, Email: OGEN@allianceadvisorsllc.com.
PROPOSAL
I ELECTION OF DIRECTORS
Nominees
The
Board of Directors currently is comprised of five Board members including Dr. Frederick W. Telling, Robert C. Koski, Charles L. Pope,
Dr. Alan Dunton and Kimberly M. Murphy. All of our existing Directors are nominated for re-election at the Annual Meeting of Shareholders.
If elected, each of the Directors will hold office until the next annual meeting of shareholders and until their successor is elected
and qualified, or as otherwise provided by the Company’s Bylaws or by Florida law.
If
any of the nominees should be unavailable to serve for any reason, the Board of Directors may:
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designate
a substitute nominee, in which case the persons named as proxies will vote the shares represented by all valid Proxies for the election
of such substitute nominee;
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allow
the vacancy to remain open until a suitable candidate is located and nominated; or
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adopt
a resolution to decrease the authorized number of Directors.
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Vote
Required and Board of Directors’ Recommendation
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR EACH DIRECTOR NOMINEE.
If
a choice is specified on the Proxy by the shareholder, the shares will be voted as specified. If no specification is made, the shares
will be voted FOR the Director nominees. Election of each Director nominee will require the affirmative vote of a plurality of the votes
cast by shares of Common Stock represented and entitled to vote at the Annual Meeting of Shareholders.
Information
About Nominees
Information
about each nominee as of November 22, 2021 is set forth below:
Name
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Age
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Position
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Frederick W. Telling, Ph.D.
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70
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Executive Chairman and Director
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Robert C. Koski
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62
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Director
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Charles L. Pope
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70
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Director
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Alan W. Dunton, M.D.
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67
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Director
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Kimberly M. Murphy
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59
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Director
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Directors
of the Company
Dr.
Frederick W. Telling. Dr. Telling was elected Chairman of the Board of Directors on February 4, 2011 and was appointed as Executive
Chairman on May 2, 2021 following the resignation of Dr. Joslyn, the Company’s former President and Chief Executive Officer. Dr.
Telling has served as a Director since June 2010. Dr. Telling retired from Pfizer Inc. in June 2007 after 30 years of service. At Pfizer
Dr. Telling served as its Corporate Vice President and Vice President of Corporate Strategic Planning and Policy. Dr. Telling also serves
on the boards of various civic and non-profit organizations. Dr. Telling holds a B.A. degree in History and Economics from Hamilton College
and a MA degree in Industrial and Labor Relations and a PhD in Economics and Public Policy from Cornell University.
Dr.
Telling brings to our Board an extensive array of business and industry experience as well as experience as a director of public companies.
Robert
C. Koski. Mr. Koski has served as a Director since June 2009. Mr. Koski has practiced as an attorney with the Koski Firm, a sole
proprietorship located in Atlanta, Georgia since 1992, where his practice includes litigation and tax law. Mr. Koski has also served
as a partner in the Koski Family Limited Partnership, which beneficially owns an interest in the Company, and as a director of the Koski
Family Foundation since December 1996. Mr. Koski holds a B.A. degree in Philosophy and English from Colgate University, a JD from Emory
School of Law and an LLM degree in Taxation and Litigation from Emory University.
Mr.
Koski brings to our Board over two decades of experience in the legal field as a practicing attorney. In addition to his legal experience,
Mr. Koski’s educational background provides a foundation for leadership and consensus-building.
Charles
L. Pope. Mr. Pope has served as a Director since June 2010. Mr. Pope served as the Chief Financial Officer of Palm Bancorp, Inc.
from June 2009 to June 2012. From September 2007 through June 2009, Mr. Pope served as the Chief Financial Officer of Aerosonic Inc.,
a manufacturer of aviation products. Mr. Pope served as the Chief Financial Officer of Reptron Inc., a manufacturer of electronic products,
from March 2005 through June 2007. From March 2002 to March 2005, Mr. Pope served as Chief Financial Officer of SRI/Surgical Express,
Inc. From February 2001 to March 2002, Mr. Pope served as Chief Financial Officer of Innovaro, Inc. (formerly UTEK Corporation NYSE AMERICAN:
INV) a public company. Mr. Pope served as a director of Innovaro, Inc. from March 2010 to August 2012. Mr. Pope also served as a Director
of Inuvo, Inc. from July 2008 through July 2018. Prior to this time, Mr. Pope served as a Partner in the Audit and Financial Advisory
Consulting Divisions of PricewaterhouseCoopers LLP, and he was also a Partner in the Accounting and SEC Directorate in PricewaterhouseCoopers
LLP’s New York City office. Mr. Pope holds a B.S. degree in Economics and Accounting from Auburn University and is a Certified
Public Accountant in Florida.
Mr.
Pope brings to our Board over three decades of experience in the finance and accounting fields. In addition, Mr. Pope also has experience
serving as a Director of public companies.
Dr.
Alan W. Dunton. Dr. Dunton has served as a Director of Oragenics, Inc. since April 2011. He is the principal owner of Danerius, LLC,
a biotechnology consulting company which he founded in 2006. In addition to Oragenics, he is currently a Director of the public biotechnology
company, Palatin, Inc. (AMEX: PTN), CorMedix (NASDAQ: CRMD) and Regeneus (ASX: RGS). Dr. Dunton is also a member of the Board of Members
or Directors of Cytogel Pharma, a privately-held firm in Darien, Connecticut. He previously served as a Director of Sancilio and Company,
MediciNova and Targacept, Inc. Dr. Dunton is also a member of the Board of Director of CorMedix, Inc. (CRMD), a publicly traded biotechnology
company in Berkeley Heights, New Jersey since March 2019. Dr. Dunton has held significant senior positions in major pharmaceutical companies.
Most recent was from November 2015 through March 2018 as the Senior Vice President of Research, Development and Regulatory Affairs of
Purdue Pharma L.P., a private pharmaceutical company. From January 2007 until March 2009, Dr. Dunton served as President and Chief Executive
Officer of Panacos Pharmaceuticals, Inc. He was the non-Executive Chairman and Director of EpiCept, Inc. (OTC MKTS: EPCT) a public biotechnology
company developing products for cancer, pain and inflammatory conditions. In 2005, Dr. Dunton served as the Non-Executive Chairman of
the Board of Directors of ActivBiotics, Inc., a private biopharmaceutical company. Previously, he was the President and Chief Executive
Officer of Metaphore Pharmaceuticals, Inc. from 2003 until 2006, when it merged with ActivBiotics. From 2004 until 2005, Dr. Dunton served
as a member of the board of directors of Vicuron Pharmaceuticals until it was acquired by Pfizer, Inc. In 2002, Dr. Dunton served as
President, Chief Operating Officer and a director of Emisphere Technologies, Inc., a biopharmaceutical company. From 1994 to 2001, Dr.
Dunton was a senior executive in various capacities in the Pharmaceuticals Group of Johnson & Johnson. From 1999 to 2001, Dr. Dunton
was President and Managing Director of The Janssen Research Foundation, a Johnson & Johnson company. From 1998 to 1999, he served
as Group Vice President of Global Clinical Research and Development of Janssen. Prior to joining Janssen, Dr. Dunton was Vice President
of Global Clinical Research and Development at the R.W. Johnson Pharmaceutical Research Institute, also a Johnson & Johnson company.
Prior to joining Johnson & Johnson, Dr. Dunton held positions in clinical research and development at Syntex Corporation, CIBA-GEIGY
Corporation and Hoffmann La Roche Inc. Dr. Dunton holds a MD degree from New York University School of Medicine, where he completed his
residency in internal medicine. He also was a Fellow in Clinical Pharmacology at the New York Hospital/Cornell University Medical Center.
Dr.
Dunton brings to our Board a significant depth of experience in the pharmaceutical industry that will be invaluable to the Company as
we continue to develop biotechnology assets.
Kimberly
M. Murphy. Ms. Murphy has served as a director since May 2020. Before joining the Company, Ms. Murphy served as Vice President of
the Influenza Franchise and Global Vaccine Commercialization Leader at GlaxoSmithKline plc (NYSE: GSK) (“GSK”), where she
led the global influenza vaccines business, global pandemic preparedness across vaccines and antivirals, lifecycle management, business
development, and global P&L management. Ms. Murphy currently serves as a director for Blue Water Acquisition Corp. (NASDAQ: BLUW).
Ms. Murphy also served as Vice President and Global Marketing Head for the shingles vaccine, SHINGRIX. From June 2014 to May 2015, Ms.
Murphy was Vice President and Lead for the North America Vaccines Integration Planning Team, responsible for the integration planning
of GSK’s acquisition of Novartis AG’s vaccine division. From October 2012 to June 2014, Ms. Murphy served as Vice President
of U.S. Vaccines Customer Strategy and from March 2011 to October 2012, she served as the Senior Director of U.S. Influenza Portfolio
Strategy. Prior to joining GSK in March 2011, Ms. Murphy worked for Novartis Vaccines and Diagnostics Inc., a division of Novartis AG
(NYSE: NVS), as the head of the U.S. Meningococcal Franchise. Before working for Novartis, Ms. Murphy enjoyed a distinguished career
at Merck & Co., Inc. (NYSE: MRK). Ms. Murphy has previously served in board and advisory roles for a privately-held vaccine development
company, the Biotechnology Industry Organization, the Biodefense Advisory Council, and the Saint Joseph’s University Pharmaceutical
& Healthcare Marketing MBA Program. Ms. Murphy holds a B.A. degree in English from Old Dominion University and a M.B.A. degree in
Marketing from Saint Joseph’s University. Ms. Murphy has also completed the Marketing Excellence Program at the Wharton School
of the University of Pennsylvania.
Ms.
Murphy brings to the Company’s Board a wealth of experience in the commercialization and marketing of development-stage vaccine
candidates, particularly those created by public companies. Ms. Murphy’s skill will be vital to the Company’s development
of a vaccine candidate for SARS-CoV-2.
See
“Corporate Governance” below for additional information regarding the Board.
PROPOSAL
II
ADVISORY
VOTE ON EXECUTIVE COMPENSATION
Summary
As
provided in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”) and as required by Section
14A of the Exchange Act, we provided our shareholders the opportunity to advise our Compensation Committee and Board of Directors regarding
the compensation of our named executive officers as described in our proxy statement pursuant to the compensation disclosure rules of
the Securities and Exchange Commission (“say on pay”). Our shareholders also were asked to indicate how frequently we should
seek a “say on pay” advisory vote. The shareholders were able to indicate whether they would prefer an advisory vote on named
executive officer compensation once every one, two, or three years. In 2019, our shareholders voted in favor of holding the advisory
votes on executive compensation every year, and the Company adopted this standard. Therefore, we provide our shareholders the opportunity
to advise our Compensation Committee and Board of Directors regarding the compensation of our named executive officers as described in
this Proxy Statement.
As
described under the heading “Executive Compensation – Compensation Discussion and Analysis,” our executive compensation
programs are designed to attract and retain highly qualified leadership personnel, providing them attractive long-term career opportunities.
Our compensation philosophy is to provide executives with a competitive total compensation package which motivates superior job performance,
the achievement of our business objectives, and the enhancement of shareholder value. Rather than basing compensation on a series of
specific performance objectives, we encourage initiative, teamwork and innovation, and each executive is enabled to use his or her abilities
and particular area of responsibility to strengthen our overall performance. Please read the “Compensation Discussion and Analysis”
of this Proxy Statement for a detailed description and analysis of our executive compensation programs, including information about the
fiscal year 2020 compensation of our named executive officers.
It
is the philosophy of the Board of Directors to align the interests of our executive officers and shareholders by integrating the executives’
compensation opportunities with our long-term corporate strategic and financial objectives. Our general approach to compensating executive
officers is to pay cash salaries which generally are competitive within ranges of salaries paid to executives of other healthcare companies,
particularly those of similar size and stage of development. Our compensation committee sets overall compensation at a level it believes
to be fair, based upon a subjective analysis of the individual executive’s experience and past and potential contributions to us.
We
are asking our shareholders to indicate their support for our named executive officer compensation as described in this Proxy Statement.
This proposal, commonly known as a “say-on-pay” proposal, gives our shareholders the opportunity to express their views on
our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather
the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement.
We will ask our shareholders to vote “FOR” the following resolution at the Annual Meeting of Shareholders.
“RESOLVED,
that the shareholders approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in
the Compensation Discussion and Analysis section, the tabular disclosure regarding such compensation and the accompanying narrative disclosure
set forth in the Company’s 2020 Proxy Statement.”
This
say-on-pay vote is advisory, and therefore not binding on the Company, the Compensation Committee or our Board. Our Board and our Compensation
Committee value the opinions of our shareholders and to the extent there is any significant vote against the named executive officer
compensation as disclosed in this proxy statement, we will consider the outcome of the vote when making future executive compensation
decisions.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE
APPROVAL
OF PROPOSAL II, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DESCRIBED IN THIS PROXY STATEMENT.
PROPOSAL
III
APPROVAL TO AMEND THE AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF ORAGENICS, INC. TO PROVIDE FOR A REDUCED
QUORUM REQUIREMENT OF ONE-THIRD (1/3) OF SHARES ENTITLED TO BE CAST
Summary
We
are proposing to amend our Amended and Restated Articles of Incorporation (the “Articles”) to provide a reduced shareholder
quorum requirement of one-third (1/3) of shares entitled to be cast in order to constitute a quorum for a meeting of shareholders (the
“Quorum Amendment”). The Company’s quorum requirement for a shareholder meeting is currently set at a majority of the
votes entitled to be cast. Pursuant to the Florida Business Corporation Act (the “FBCA”), a lesser quorum requirement for
shareholder meetings may be set through an amendment to the Company’s Articles. The Board of Directors has approved the Quorum
Amendment and recommends approval and adoption by the shareholders.
Purpose
and Effect of the Amendment
The
purpose of this Proposal III is to make it easier to achieve a quorum in connection with future shareholder meetings, including annual
meetings. The Company’s June 30, 2021 Annual Meeting of shareholders was originally scheduled and noticed to occur on June 30,
2021 and was adjourned due to a lack of quorum and set to reconvene on August 23, 2021. The Company’s reconvened Annual Meeting
of shareholders on August 23, 2021 again failed to achieve a quorum of shareholders voting necessary to conduct the meeting. As a result
of the inability to achieve a quorum at the initial Annual Meeting and at the time of the reconvened meeting, the Company reset a new
record date and new Annual Meeting date to which this Proxy Statement relates. This proposal to lower the Company’s quorum will
have no effect on the quorum for the reset Annual Meeting.
The
Board believes the shareholder meeting process is important to provide shareholders with meaningful opportunities to raise important
matters and communicate with the Company. The Board believes that reducing the shareholder quorum requirement to one-third, instead of
its current majority, will reasonably balance the shareholders’ rights while protecting the needs of the Company. Reducing the
quorum requirement will help to facilitate the Company establishing a quorum and thereby enable future shareholder meetings. The Board
has determined that it is in the best interest of the Company and its shareholders to seek approval of this Proposal III to approve the
Quorum Amendment to provide for a reduced shareholder quorum threshold to better ensure the Company’s ability to conduct business
in the future.
Risk
Related to Amendment
The
Company’s inability to reach a quorum poses risks to the Company’s ability to conduct future business that may need to come
before shareholders for approval. For example, the Company from time to time has needed to raise additional capital to conduct its business.
Capital raising generally involves the issuance of additional shares of stock. The Company has a proposal before the shareholders to
increase its authorized shares of common stock in this Proxy Statement. The inability to have that proposal or similar proposals in the
future put before shareholders for consideration and approved due to a lack of a quorum can impact the Company’s ability to raise
future capital through the issuance of additional shares of its common stock.
The
Company is currently listed on the New York Stock Exchange (the “Exchange”) and Exchange rules require, under Section 302
of the NYSE Listed Company Manual, that the Company conduct an annual meeting of its shareholders during each fiscal year and the Exchange
does not consider the Company to have met the Section 302 annual meeting requirement if the meeting is postponed or adjourned. If the
Company is unable to satisfy a quorum at the reset November Annual Meeting or any adjournment thereof, the Company would not be in compliance
with the Exchange’s annual meeting requirement and its standing with the Exchange would be jeopardized and could result in the
Company being subject to delisting by the Exchange. Should a quorum be achieved at the reset Annual Meeting and this Proposal III is
approved thereat, given the recent difficulty the Company has encountered in achieving a quorum for its Annual Meeting, there can be
no assurances that the new lower quorum would be achieved in connection with future shareholder meetings as there must still be one-third
of the shares eligible and entitled to vote presently represented either in person or by proxy.
If
the Quorum Amendment is approved by our shareholders it will result in a lesser amount of shareholders being required in order to conduct
future shareholder meetings, which could result in a smaller group of shareholders voting on and approving proposals submitted to our
shareholders in the future.
The
proposed Quorum Amendment to the Articles would reduce the quorum requirement to constitute a shareholder meeting from majority of shares
entitled to be cast to one-third of the shares entitled to be cast. If approved by the shareholders at the Annual Meeting, the proposed
amendment of the Articles would become effective upon the filing of the Articles of Amendment to the Restated Articles of Incorporation
with the Secretary of State of the State of Florida, which the Company would expect to file promptly following the Annual Meeting.
The
proposed Quorum Amendment to the Articles, which the Board has approved and declared advisable, is attached to this Proxy Statement as
Appendix A.
If
the shareholders do not approve the Quorum Amendment, then the Company’s current quorum of a majority of votes represented in person
or by proxy will remain in effect.
No
Appraisal Rights
No
appraisal rights are available to any shareholder who objects to the proposals to amend the Articles under the FBCA or under our current
Amended and Restated Articles of Incorporation.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF
THIS
PROPOSAL TO GRANT OUR BOARD OF DIRECTORS AUTHORITY TO AMEND OUR
ARTICLES
OF INCORPORATION TO PROVIDE FOR A REDUCED
QUORUM
REQUIREMENT OF ONE-THIRD (1/3) OF SHARES ENTITLED TO BE CAST.
PROPOSAL
IV
APPROVAL TO AMEND THE AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF ORAGENICS, INC. TO INCREASE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
Summary
We
are proposing to amend our Amended and Restated Articles of Incorporation to increase our authorized Common Stock from 200,000,000 shares
to 250,000,000 shares (the “Amendment”). The Board of Directors has approved the Amendment and recommends approval and adoption
by the shareholders.
Purpose
and Effect of the Amendment
The
Board of Directors is recommending the proposed Amendment to increase the number of authorized shares of Common Stock to give the Company
the ability and flexibility to issue shares of Common Stock for future corporate needs without the expense and delay associated with
a special shareholders’ meeting, except where shareholder approval is required by applicable law. The Board of Directors believes
that additional authorized shares of Common Stock would give the Company the necessary ability and flexibility to issue shares for various
corporate purposes, including, but not limited to, capital-raising or financing transactions, potential strategic transactions, including
mergers, acquisitions, and other business combinations; grants and awards under equity compensation plans; stock splits and dividends;
and other general corporate purpose transactions. As a general matter, the Company would be able to issue the additional authorized shares
of Common Stock in its discretion from time to time, subject to and as limited by, rules or listing requirements of the NYSE American
or any other then applicable securities exchange, and without further action or approval of the Company’s shareholders. The discretion
of the Board of Directors, however, would be subject to any other applicable rules and regulations in the case of any particular issuance
or reservation for issuance that might require the Company’s shareholders to approve such transaction. We currently have 250,000,000
shares of authorized capital stock consisting of 200,000,000 shares of Common Stock with a par value of $0.001 and 50,000,000 shares
of preferred stock with no par value. As of October 1, 2021, there were [ ] shares of the 200,000,000 authorized common shares issued
and outstanding and 2,261,703 of our authorized preferred stock issued and outstanding, on an as-converted basis. We also have 7,252,710
shares reserved for our stock option and incentive plan and 18,040,572 shares reserved for outstanding warrants. By approving the Amendment,
you are voting to increase our authorized capital stock by an additional 50,000,000, shares for total authorized capital stock of 300,000,000
shares. The Board of Directors does not intend to issue any shares except on terms that it considers to be in the best interests of the
Company and its shareholders. We also have a shelf registration statement to sell up to $17,462,500 shares of Common Stock, we have sold
$7,795,184 with $9,667,316 with a presumed price of $1.25 per share we would issue an additional 7,733,853 shares of Common Stock.
As
of the date of this Proxy Statement, we have no immediate plans, proposals, understandings, agreements or commitments to issue the additional
shares of Common Stock we are seeking through the Amendment for funding, acquisitions or any other purpose. However, we review and evaluate
potential capital raising activities, strategic transactions and other corporate actions on an ongoing basis to determine if such actions
would be in our best interest and the best interest of our shareholders.
Impact
of the Amendment
The
additional shares of Common Stock for which authorization is sought would be a part of the existing class of Common Stock. If and when
issued, these shares would have the same rights and privileges as the shares of Common Stock presently outstanding. No holder of Common
Stock has any pre-emptive rights to acquire additional shares of our Common Stock. One of our current shareholders, Eleszto Genetika,
Inc., has a participation right in connection with the Company’s issuance of shares in future financings to acquire up to 30% of
such public or private qualifying financing, raising in excess of $1.0 million.
Common
Stock
The
terms of the additional shares of Common Stock will be identical to those of the currently outstanding shares of Common Stock. However,
because holders of Common Stock, other than Eleszto Genetika, Inc., which has certain participation rights with respect to future financings,
have no pre-emptive rights to purchase or subscribe for any unissued stock of the Company, the issuance of additional shares of Common
Stock will reduce the current shareholders’ percentage ownership interest in the total outstanding shares of Common Stock. This
Amendment and the creation of additional shares of authorized Common Stock will not alter the current number of issued shares. The relative
rights and limitations of the shares of Common Stock will remain unchanged under this Amendment.
The
proposed increase in the authorized number of shares of Common Stock could have a number of effects on our shareholders depending upon
the exact nature and circumstances of any actual issuances of authorized but unissued shares. The increase could have an anti-takeover
effect, in that additional shares could be issued (within the limits imposed by applicable law) in one or more transactions that could
make a change in control or takeover of us more difficult. For example, additional shares could be issued by us so as to dilute the stock
ownership or voting rights of persons seeking to obtain control of us, even if the persons seeking to obtain control offers an above-market
premium that is favored by a majority of the independent shareholders. Similarly, the issuance of additional shares to certain persons
allied with our management could have the effect of making it more difficult to remove our current management by diluting the stock ownership
or voting rights of persons seeking to cause such removal. We have no plans or proposals to adopt other provisions or enter into other
arrangements that may have material anti-takeover consequences. We are not aware of any attempt, or contemplated attempt, to acquire
control of us, and this proposal is not being presented with the intent that it be utilized as a type of anti-takeover device.
Our
shareholders should recognize that, as a result of this proposal, they will own a fewer percentage of shares with respect to our total
authorized shares, than they presently own, and will be diluted as a result of any issuance of Common Stock by us in the future.
There
are currently no specific plans, arrangements, commitments or understandings for the issuance of the additional shares of Common Stock
which are proposed to be authorized (except with respect to potential issuances of shares upon our future financing efforts and exercise
of currently outstanding options and warrants).
Preferred
Stock
Currently,
we are authorized to issue up to 50,000,000 shares of preferred stock and we have 16,017,000 shares of preferred stock outstanding, as
of the Record Date. The Amendment does not change the number of shares of blank check preferred stock our board of directors is authorized
to issue, however, our board of directors would be able to issue existing shares of authorized preferred stock with such designations,
powers, preferences and rights as may be determined from time to time by our board of directors which include conversion rights into
a greater number of common shares through the approval of the Amendment. This means that, if the Amendment is approved, except as may
be required by law, NYSE American LLC rules or the approval rights of current holders of our outstanding preferred stock, no further
shareholder approval would be required prior to the issuance of shares of preferred stock convertible into the Common Stock authorized
by the Amendment. For example, under NYSE American LLC rules, in certain circumstances shareholder approval is required for any potential
issuance of 20% or more of our outstanding shares of Common Stock (including upon conversion of convertible preferred stock) or 20% or
more of the voting power outstanding before such issuance.
Our
board of directors believes that authorization of additional shares of Common Stock is prudent because it is advisable to have the ability
to authorize such shares of Common Stock and have them available in order to enhance our flexibility to consider and respond to future
financing needs and opportunities as they arise from time to time, including possible issuances of convertible preferred stock in connection
with such activities as public or private offerings of shares for cash and other corporate purposes. We cannot provide assurances that
any such transactions will (i) be consummated on favorable terms or at all, (ii) enhance shareholder value or (iii) not adversely affect
our business or the trading price of our Common Stock.
The
authorization of the Common Stock will not have any immediate effect on the rights of existing shareholders. However, in connection with
the issuance of any convertible preferred stock based on authorized and available blank check preferred, our board of directors would
have the authority to designate and issue series of our preferred stock with dividend, liquidation, conversion, voting or other rights
that may be superior to those of our Common Stock. The effects of the issuance of preferred stock upon holders of our Common Stock may
include, among other things: (1) a preference in the payment of dividends to holders of preferred stock, which may restrict our ability
to declare dividends on our Common Stock; (2) dilution of voting power if holders of preferred stock are given voting rights; (3) dilution
of equity interests and voting power if the preferred stock is convertible, and converted into, Common Stock; or (4) a preference in
payments upon liquidation to holders of preferred stock, which may limit liquidation payments on our Common Stock.
There
are currently no specific plans, arrangements, commitments or understandings for the issuance of the additional shares of preferred stock
which are proposed to be authorized (other than as may be required in connection with future financings).
Certain
Risks Associated with the Amendment
The
issuance of additional shares of Common Stock could reduce existing shareholders’ percentage ownership and voting power in the
Company and, depending on the transaction in which they are issued, could affect the per share book value or other per share financial
measures.
By
voting in favor of this proposal, you are voting to increase our authorized capital stock by an additional 50,000,000 shares for total
authorized capital stock of 300,000,000 shares. Because our Amended and Restated Articles of Incorporation do not confer to our shareholders
pre-emptive rights with respect to our Common Stock, when our Board of Directors elects to issue additional shares of Common Stock in
the future, existing shareholders would not have a preferential right to purchase these shares and could suffer substantial dilution.
You would suffer dilution in the book value of your shares if the additional capital stock is sold at prices lower than the price at
which you purchased your Common Stock.
The
Amendment could, under certain circumstances, have an anti-takeover effect, although that is not our intention with this proposal. For
example, in the event of a hostile attempt to take control of the Company, it may be possible for the Board of Directors to impede that
attempt by issuing shares of Common Stock, which would dilute the voting power for the other outstanding shares and increase the potential
cost to acquire control of the Company. This Amendment therefore may have the effect of discouraging unsolicited takeover attempts, potentially
limiting the opportunities of our shareholders to dispose of their shares at a premium, which may be offered in takeover attempts or
a merger proposal. The Amendment may have the effect of permitting our current management, including the current Board of Directors,
to retain its position. However, as of the date of this Proxy Statement, the Board of Directors is not aware of any attempt to take control
of the Company, and the Board of Directors has not presented this proposal with the intent that it be utilized as a type of anti-takeover
device.
Procedure
For Amending Articles Of Incorporation-Text Of Amendment
Provided
that this Proposal is approved by our shareholders, an Amendment to our Amended and Restated Articles of Incorporation, specifically
amending Article II thereof will be filed with the Secretary of State of the State of Florida and upon such filing the Amendment will
become effective. A copy of the proposed Amendment is attached hereto as Appendix B. The paragraph in Article II of our Amended
and Restated Articles of Incorporation captioned “Capital Stock” is proposed to be replaced with the following text:
“Capital
Stock. The aggregate number of shares of all classes of capital stock which this Corporation shall have authority to issue is Three
Hundred Million (300,000,000) shares, consisting of (i) Two Hundred Fifty Million (250,000,000) shares of common stock, par value $0.001
per share (the “Common Stock”), and (ii) Fifty Million (50,000,000) shares of preferred stock, no par value (the “Preferred
Stock”).”
The
only substantive changes would be to increase the number of shares of Common Stock that the Company may issue from 200,000,000 shares
to 250,000,000 shares and to reflect a corresponding increase in the aggregate number of shares of capital stock that may be issued from
250,000,000 to 300,000,000 shares.
If
the proposed Amendment is not approved by the Company’s shareholders, the number of authorized shares of Common Stock will remain
unchanged.
No
Dissenters’ Rights
No
dissenters’ rights are available to any shareholder who dissents from the proposals to amend the Articles of Incorporation under
the Florida Business Corporation Act (“FBCA”) or under our current Amended and Restated Articles of Incorporation.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF THIS PROPOSAL TO GRANT OUR BOARD OF DIRECTORS AUTHORITY
TO AMEND OUR ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF SHARES OF AUTHORIZED COMMON STOCK.
PROPOSAL
V
APPROVAL OF THE COMPANY’S 2021 EQUITY INCENTIVE PLAN
The
Board of Directors is requesting shareholder approval of the Oragenics, Inc. 2021 Equity Incentive Plan (the “2021 Plan”).
The 2021 Plan is intended to be the successor to the Company’s 2012 Equity Incentive Plan, as amended (the “2012 Plan”
or the “Prior Plan”).
Why
We Are Asking Our Shareholders to Approve the 2021 Plan
Currently,
we maintain the 2012 Plan to grant equity awards to our employees, non-employee directors and consultants and the 2012 Plan only has
970,068 shares remaining available for grant of awards. We are seeking shareholder approval of the 2021 Plan to increase the number of
shares available for the grant of stock options, restricted stock unit awards and other awards, which will enable us to have a competitive
equity incentive program to compete with our peer group for key talent. If the 2021 Plan is approved by our shareholders, no additional
awards will be granted under the Prior Plan.
Approval
of the 2021 Plan by our shareholders will allow us to grant stock options, restricted stock unit awards and other awards at levels determined
appropriate by the Board of Directors or Compensation Committee. The 2021 Plan will also allow us to utilize a broad array of equity
incentives in order to secure and retain the services of our employees, non-employee directors and consultants, and to provide long-term
incentives that align the interests of our employees, non-employee directors and consultants with the interests of our shareholders.
Requested
Shares
If
this Proposal V is approved by our shareholders, then subject to adjustment for certain changes in our capitalization, the aggregate
number of shares of our Common Stock that may be issued under the 2021 Plan will not exceed the sum of (i) 10,000,000 new shares, (ii)
the number of shares remaining available for the grant of new awards under the 2012 Plan as of immediately prior to the effective date
of the 2021 Plan, and (iii) certain shares subject to outstanding awards granted under the 2012 Plan that may become available for issuance
under the 2021 Plan, as such shares become available from time to time (as further described below in “Description of the 2021
Plan—Shares Available for Awards”).
Shareholder
Approval
If
this Proposal V is approved by our shareholders, the 2021 Plan will become effective as of the date of the Annual Meeting and no additional
awards will be granted under the 2012 Plan. In the event that our shareholders do not approve this Proposal IV, the 2021 Plan will not
become effective and the 2012 Plan will continue to be effective in accordance with its terms.
Why
You Should Vote to Approve the 2021 Plan
Equity
Awards Are an Important Part of Our Compensation Philosophy
The
Board of Directors believes that the grant of equity awards is a key element underlying our ability to attract, retain and motivate our
employees, non-employee directors and consultants because of the strong competition for highly trained and experienced individuals among
biopharmaceutical companies. Therefore, the Board of Directors believes that the 2021 Plan is in the best interests of our business and
our shareholders and recommends a vote in favor of this Proposal V.
The
2021 Plan will allow us to continue to utilize equity awards as long-term incentives to secure and retain the services of our employees,
non-employee directors and consultants, consistent with our compensation philosophy and common compensation practice for our industry.
To date, equity awards have been a key aspect of our program to attract and retain key employees, non-employee directors and consultants.
We believe the use of equity awards strongly aligns the interests of our employees with those of our shareholders by placing a considerable
proportion of our employees’ total compensation “at risk” because it is contingent on the appreciation in value of
our Common Stock. In addition, we believe equity awards encourage employee ownership of our Common Stock and promote retention through
the reward of long-term Company performance.
We
Carefully Manage the Use of Equity Awards and Dilution is Reasonable
We
recognize that equity awards dilute existing shareholders, and, therefore, we are mindful to responsibly manage the growth of our equity
compensation program. We are committed to effectively monitoring our equity compensation share reserve, including our “burn rate,”
to ensure that we maximize shareholders’ value by granting the appropriate number of equity awards necessary to attract, reward,
and retain employees, non-employee directors and consultants.
The
Size of Our Share Reserve Request Is Reasonable
If
this Proposal IV is approved by our shareholders, we will have 10,000,000 new shares available for grant after the Annual Meeting, subject
to adjustment for certain changes in our capitalization.
The
2021 Plan Combines Compensation and Governance Best Practices
The
2021 Plan includes provisions that are designed to protect our shareholders’ interests and to reflect corporate governance best
practices, including:
Shareholder
approval is required for additional shares. The 2021 Plan does not contain an annual “evergreen” provision. The 2021
Plan authorizes a fixed number of shares, so that shareholder approval is required to issue any additional shares.
Fungible
share counting. The 2021 Plan contains a “fungible share counting” structure, whereby the number of shares of our Common
Stock available for issuance under the 2021 Plan will be reduced by (i) one share for each share issued pursuant to a stock option or
stock appreciation right with an exercise price that is at least 100% of the fair market value of our Common Stock on the date of grant
(an “Appreciation Award”) granted under the 2021 Plan and (ii) 1.20 shares for each share issued pursuant to an award that
is not an Appreciation Award (a “Full Value Award”) granted under the 2021 Plan. As part of such fungible share counting
structure, the number of shares of our Common Stock available for issuance under the 2021 Plan will be increased by (i) one share for
each share that becomes available again for issuance under the terms of the 2021 Plan subject to an Appreciation Award and (ii) 1.20
shares for each share that becomes available again for issuance under the terms of the 2021 Plan subject to a Full Value Award.
Repricing
is not allowed. The 2021 Plan prohibits the repricing of outstanding stock options and stock appreciation rights, and the cancellation
of any outstanding stock options or stock appreciation rights that have an exercise or strike price greater than the then-current fair
market value of our Common Stock in exchange for cash or other stock awards under the 2021 Plan, without prior shareholder approval.
No
discounted stock options or stock appreciation rights. All stock options and stock appreciation rights granted under the 2021 Plan
must have an exercise price equal to or greater than the fair market value of our Common Stock on the date the stock option or stock
appreciation right is granted.
Limit
on non-employee director compensation. The aggregate value of the equity awards which will be granted to any individual for service
as a non-employee director under the 2021 Plan during any single calendar year will not exceed equity awards with a value of $300,000
or, for the first year a non-employee director is appointed or elected to the Board of Directors, equity awards not exceeding $500,000
in total value. For purposes of these limitations, the value of any equity awards is calculated based on the grant date fair value of
such awards for financial reporting purposes.
Restrictions
on dividends and dividend equivalents. The 2021 Plan provides that (i) no dividends may be paid with respect to any shares of our
Common Stock subject to an award before the date such shares have vested, (ii) any dividends or dividend equivalents that are credited
with respect to any such shares will be subject to all of the terms and conditions applicable to such shares under the terms of the applicable
award agreement (including any vesting conditions), and (iii) any dividends or dividend equivalents that are credited with respect to
any such shares will be forfeited to us on the date such shares are forfeited to or repurchased by us due to a failure to vest.
Awards
subject to forfeiture/clawback. Awards granted under the 2021 Plan will be subject to recoupment in accordance with any clawback
policy that we are required to adopt pursuant to the listing standards of any national securities exchange or association on which our
securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable
law, and any other clawback policy that the Company adopts. In addition, the Board may impose other clawback, recovery or recoupment
provisions in an award agreement, including a reacquisition right in respect of previously acquired shares or other cash or property
upon the occurrence of cause.
Termination
of stock options and stock appreciation rights on a participant’s termination for cause. If a participant’s service is
terminated for cause, as defined under the 2021 Plan, the participant’s stock options and stock appreciation rights terminate immediately,
and the participant is prohibited from exercising his or her stock options and stock appreciation rights.
No
liberal change in control definition. The change in control definition in the 2021 Plan is not a “liberal” definition.
A change in control transaction must actually occur in order for the change in control provisions in the 2021 Plan to be triggered.
No
accelerated vesting of assumed awards upon change in control. The 2021 Plan does not provide for accelerated vesting of awards that
are assumed by an acquirer upon a change in control.
Material
amendments require shareholder approval. Consistent with the applicable stock exchange rules, the 2021 Plan requires shareholder
approval of any material revisions to the 2021 Plan. In addition, certain other amendments to the 2021 Plan require shareholder approval.
Vote
Required
At
the Annual Meeting, the shareholders are being asked to approve the 2021 Plan. The affirmative vote of the holders of a majority of the
shares represented at the meeting or by proxy at the Annual Meeting and entitled to vote on the item will be required to approve the
2021 Plan.
THE
BOARD OF DIRECTORS RECOMMENDS VOTING “FOR” THE APPROVAL OF THE 2021 PLAN.
Description
of the 2021 Plan
The
material features of the 2021 Plan are described below. The following description of the 2021 Plan is a summary only and is qualified
in its entirety by reference to the complete text of the 2021 Plan. Shareholders are urged to read the actual text of the 2021 Plan in
its entirety, which is attached to this Proxy Statement as Appendix C.
Purpose
The
2021 Plan is designed to secure and retain the services of our employees, non-employee directors and consultants, to provide incentives
for such persons to exert maximum efforts for the success of the Company and our affiliates, and to provide a means by which such persons
may be given an opportunity to benefit from increases in the value of our Common Stock. The 2021 Plan is also designed to align employees’
interests with shareholder interests.
Successor
to Prior Plans
The
2021 Plan is intended to be the successor to the Company’s 2012 Equity Incentive Plan, as amended to date. If the 2021 Plan is
approved by our shareholders, no additional awards will be granted under the 2012 Plan. If the 2021 Plan is not approved by our shareholders,
the 2021 Plan will not become effective and the 2012 Plan will continue to be effective in accordance with its terms.
Types
of Awards
The
terms of the 2021 Plan provide for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted
stock awards, restricted stock unit awards, performance awards, and other awards.
Shares
Available for Awards
Subject
to adjustment for certain changes in our capitalization, the aggregate number of shares of our Common Stock that may be issued under
the 2021 Plan will not exceed the sum of (i) 10,000,000 new shares, (ii) the number of shares remaining available for the grant of new
awards under the 2012 Plan as of immediately prior to the effective date of the 2021 Plan and (iii) the 2012 Plan’s Returning Shares
(as defined below), as such shares become available from time to time.
The
“2012 Plan’s Returning Shares” are shares of our Common Stock subject to outstanding awards granted under the Prior
Plan that on or following the effective date of the 2021 Plan: (i) are not issued because such award or any portion thereof expires or
otherwise terminates without all of the shares covered by such award having been issued; (ii) are not issued because such award or any
portion thereof is settled in cash; (iii) are forfeited back to or repurchased by us because of the failure to meet a contingency or
condition required for the vesting of such shares, (iv) are withheld or reacquired by us to satisfy the exercise, strike or purchase
price; or (v) are withheld or reacquired by us to satisfy a tax withholding obligation.
The
number of shares of our Common Stock available for issuance under the 2021 Plan will be reduced by (i) one share for each share of our
Common Stock issued pursuant to an Appreciation Award (i.e., a stock option or stock appreciation right with an exercise or strike price
of at least 100% of the fair market value of the underlying Common Stock on the date of grant), and (ii) 1.20 shares for each share of
our Common Stock issued pursuant to a Full Value Award (i.e., an award that is not an Appreciation Award).
The
following actions will not result in an issuance of shares of our Common Stock under the 2021 Plan and accordingly will not reduce the
number of shares of our Common Stock available for issuance under the 2021 Plan: (i) the expiration or termination of any portion of
an award granted under the 2021 Plan without the shares covered by such portion of the award having been issued; (ii) the settlement
of any portion of an award granted under the 2021 Plan in cash; (iii) the withholding of shares to satisfy the exercise or strike price
of an Appreciation Award; or (iv) the withholding of shares to satisfy a tax withholding obligation in connection with an Appreciation
Award.
If
any shares of our Common Stock issued pursuant to an award granted under the 2021 Plan are (i) forfeited back to or repurchased by us
because of the failure to meet a contingency or condition required for the vesting of such shares or if any shares; (ii) reacquired by
us to satisfy the exercise or strike price of an Appreciation Award; or (iii) reacquired by us to satisfy a tax withholding obligation
in connection with an Appreciation Award, then such shares will become available again for issuance under the 2021 Plan. For each share
subject to a Full Value Award, the number of shares of our Common Stock available for issuance under the 2021 Plan will increase by 1.20
shares.
Any
shares of our Common Stock reacquired or withheld (or not issued) by us to satisfy the purchase price of a Full Value Award will no longer
be available for issuance under the 2021 Plan, including any shares subject to a Full Value Award that are not delivered to a participant
because such Full Value Award is settled through a reduction of shares subject to such Full Value Award. In addition, any shares reacquired
or withheld (or not issued) by us to satisfy a tax withholding obligation in connection with a Full Value Award, or any shares repurchased
by us on the open market with the proceeds from the purchase price of a Full Value Award will no longer be available for issuance under
the Plan.
Eligibility
All
of our employees (including our affiliates), non-employee directors and consultants are eligible to participate in the 2021 Plan and
may receive all types of awards other than incentive stock options. Incentive stock options may be granted under the 2021 Plan only to
our employees (including our affiliates).
As
of May 1, 2021, we (including our affiliates) had 7 employees, 5 non-employee directors and 3 consultants.
Administration
The
2021 Plan will be administered by the Compensation Committee of our Board of Directors, which may in turn delegate some or all of the
administration of the 2021 Plan to a committee or committees composed of members of the Board of Directors. Our Board of Directors has
assigned the authority to administer the 2021 Plan to our Compensation Committee, but may, at any time, re-vest in itself some or all
of the power delegated to our Compensation Committee. Our Compensation Committee is considered to be a Plan Administrator for purpose
of this Proposal IV.
Subject
to the terms of the 2021 Plan, the Plan Administrator may determine the recipients, the types of awards to be granted, the number of
shares of our Common Stock subject to or the cash value of awards, and the terms and conditions of awards granted under the 2021 Plan,
including the period of their exercisability and vesting. The Plan Administrator also has the authority to provide for accelerated exercisability
and vesting of awards. Subject to the limitations set forth below, the Plan Administrator also determines the fair market value applicable
to an award and the exercise or strike price of stock options and stock appreciation rights granted under the 2021 Plan.
The
Plan Administrator may also delegate to one or more executive officers the authority to designate employees who are not executive officers
to be recipients of certain awards and the number of shares of our Common Stock subject to such awards. Under any such delegation, the
Plan Administrator will specify the total number of shares of our Common Stock that may be subject to the awards granted by such executive
officer. The executive officer may not grant an award to himself or herself.
Repricing;
Cancellation and Re-Grant of Stock Options or Stock Appreciation Rights
Under
the 2021 Plan, unless our shareholders have approved such an action within 12 months prior to such an event, the Plan Administrator does
not have the authority to reprice any outstanding stock option or stock appreciation right by (1) reducing the exercise or strike price
of the stock option or stock appreciation right or (2) cancelling any outstanding stock option or stock appreciation right that has an
exercise or strike price greater than the then-current fair market value of our Common Stock in exchange for cash or other awards.
Dividends
The
2021 Plan provides that (i) no dividends may be paid with respect to any shares of our Common Stock subject to an award before the date
such shares have been issued, (ii) no dividend equivalents may be paid with respect to any shares of our Common Stock subject to a restricted
stock unit award before the date such award has become vested, (iii) any dividends or dividend equivalents that are credited with respect
to any such shares will be subject to all of the terms and conditions applicable to such shares under the terms of the applicable award
agreement (including any vesting conditions), and (iv) any dividends or dividend equivalents that are credited with respect to any such
shares will be forfeited to us on the date such shares are forfeited to or repurchased by us due to a failure to vest. Subject to the
foregoing, the 2021 Plan further provides that dividends or dividend equivalents may be paid or credited to shares of our Common Stock
subject to a restricted stock award or restricted stock unit award granted under the 2021 Plan, as determined by the Plan Administrator
and specified in the applicable award agreement.
Limit
on Non-Employee Director Compensation
The
terms of the 2021 Plan will permit annual equity awards to any individual for service as a non-employee director of the Company. As part
of the Company’s Director Compensation Program, each non-employee director receives an annual equity award. For this purpose, the
value of any equity awards is calculated based on the grant date fair value of such awards for financial reporting purposes. Directors
are subject to vesting provided that the recipient remains a director of the Company through the vesting date. The Board retains the
discretion to modify the equity awards provided to non-employee directors under the terms of the Company’s Director Compensation
Program.
Stock
Options
Stock
options may be granted under the 2021 Plan pursuant to stock option agreements. The 2021 Plan permits the grant of stock options that
are intended to qualify as incentive stock options, or ISOs, and nonstatutory stock options, or NSOs.
The
exercise price of a stock option granted under the 2021 Plan may not be less than 100% of the fair market value of the Common Stock subject
to the stock option on the date of grant and, in some cases (see “—Limitations on Incentive Stock Options” below),
may not be less than 110% of such fair market value.
The
term of stock options granted under the 2021 Plan may not exceed ten years from the date of grant and, in some cases (see “—Limitations
on Incentive Stock Options” below), may not exceed five years from the date of grant. Except as otherwise provided in a participant’s
stock option agreement or other written agreement with us or one of our affiliates, if a participant’s service relationship with
us or any of our affiliates (referred to in this Proposal IV as “continuous service”) terminates (other than for cause or
the participant’s death or disability, as defined in the 2021 Plan), the participant may exercise any vested stock options for
up to three months following the participant’s termination of continuous service. Except as otherwise provided in a participant’s
stock option agreement or other written agreement with us or one of our affiliates, if a participant’s continuous service terminates
due to the participant’s disability, the participant may exercise any vested stock options for up to 12 months following the participant’s
termination due to the participant’s disability. Except as otherwise provided in a participant’s stock option agreement or
other written agreement with us or one of our affiliates, if a participant’s continuous service terminates due to the participant’s
death (or the participant dies within a specified period following termination of continuous service), the participant’s beneficiary
may exercise any vested stock options for up to 18 months following the participant’s death.
Except
as explicitly provided otherwise in a participant’s stock option agreement or other written agreement with us or one of our affiliates,
if a participant’s continuous service is terminated for cause, all stock options held by the participant will terminate upon the
participant’s termination of continuous service and the participant will be prohibited from exercising any stock option from and
after such termination date. For this purpose, the term “cause” is defined in the 2021 Plan to mean any event which would
qualify as cause for termination under the participant’s employment agreement with the Company, or, if there is no such employment
agreement, any of the following (i) the commission of an act of fraud, embezzlement, theft or proven dishonesty, or any other illegal
act or practice (whether or not resulting in criminal prosecution or conviction), including theft or destruction of property of the Company
or a subsidiary, or any other act or practice which the Committee shall, in good faith, deem to have resulted in the recipient’s
becoming unbondable under the Company or any subsidiary’s fidelity bond; (ii) the willful engaging in misconduct which is deemed
by the Committee, in good faith, to be materially injurious to the Company or any subsidiary, monetarily or otherwise, including, but
not limited to, improperly disclosing trade secrets or other confidential or sensitive business information and data about the Company
or any subsidiaries and competing with the Company or any subsidiaries, or soliciting employees, consultants or customers of the Company
or any subsidiaries in violation of law or any employment or other agreement to which the recipient is a party; (iii) the continued failure
or habitual neglect by a person who is an participant to perform his or her duties with the Company or any subsidiary; or (iv) other
disregard of rules or policies of the Company or any subsidiary, or conduct evidencing willful or wanton disregard of the interests of
the Company or any subsidiary.
Except
as otherwise provided in a participant’s stock option agreement or other written agreement with us or one of our affiliates, the
term of a stock option may be extended if a participant’s continuous service terminates for any reason other than for cause and,
at any time during the last 30 days of the applicable post-termination exercise period, the exercise of the stock option would be prohibited
by applicable laws or the sale of any Common Stock received upon such exercise would violate our insider trading policy. In no event,
however, may a stock option be exercised after its original expiration date.
Acceptable
forms of consideration for the purchase of our Common Stock pursuant to the exercise of a stock option under the 2021 Plan will be determined
by the Plan Administrator and may include payment: (i) by cash, check, bank draft or money order payable to us; (ii) pursuant to a program
developed under Regulation T as promulgated by the Federal Reserve Board; (iii) by delivery to us of shares of our Common Stock (either
by actual delivery or attestation); (iv) by a net exercise arrangement (for NSOs only); or (v) in other legal consideration approved
by the Plan Administrator.
Stock
options granted under the 2021 Plan may become exercisable in cumulative increments, or “vest,” as determined by the Plan
Administrator at the rate specified in the stock option agreement. Shares covered by different stock options granted under the 2021 Plan
may be subject to different vesting schedules as the Plan Administrator may determine.
The
Plan Administrator may impose limitations on the transferability of stock options granted under the 2021 Plan in its discretion. Generally,
a participant may not transfer a stock option granted under the 2021 Plan other than by will or the laws of descent and distribution
or, subject to approval by the Plan Administrator, pursuant to a domestic relations order. However, the Plan Administrator may permit
transfer of a stock option in a manner that is not prohibited by applicable tax and securities laws. Options may not be transferred to
a third party financial institution for value.
Limitations
on Incentive Stock Options
In
accordance with current federal tax laws, the aggregate fair market value, determined at the time of grant, of shares of our Common Stock
with respect to ISOs that are exercisable for the first time by a participant during any calendar year under all of our stock plans may
not exceed $100,000. The stock options or portions of stock options that exceed this limit or otherwise fail to qualify as ISOs are treated
as NSOs. No ISO may be granted to any person who, at the time of grant, owns or is deemed to own stock possessing more than 10% of our
total combined voting power unless the following conditions are satisfied:
|
●
|
the
exercise price of the ISO must be at least 110% of the fair market value of the Common Stock
subject to the ISO on the date of grant; and
|
|
●
|
the
term of the ISO must not exceed five years from the date of grant.
|
Subject
to adjustment for certain changes in our capitalization, the aggregate maximum number of shares of our Common Stock that may be issued
pursuant to the exercise of ISOs under the 2021 Plan is 10,000,000 shares.
Stock
Appreciation Rights
Stock
appreciation rights may be granted under the 2021 Plan pursuant to stock appreciation right agreements. Each stock appreciation right
is denominated in Common Stock share equivalents. The strike price of each stock appreciation right will be determined by the Plan Administrator,
but will in no event be less than 100% of the fair market value of the Common Stock subject to the stock appreciation right on the date
of grant. The term of stock appreciation rights granted under the 2021 Plan may not exceed ten years from the date of grant. The Plan
Administrator may also impose restrictions or conditions upon the vesting of stock appreciation rights that it deems appropriate. The
appreciation distribution payable upon exercise of a stock appreciation right may be paid in shares of our Common Stock, in cash, in
a combination of cash and stock, or in any other form of consideration determined by the Plan Administrator and set forth in the stock
appreciation right agreement. Stock appreciation rights will be subject to the same conditions upon termination of continuous service
and restrictions on transfer as stock options under the 2021 Plan.
Restricted
Stock Awards
Restricted
stock awards may be granted under the 2021 Plan pursuant to restricted stock award agreements. A restricted stock award may be granted
in consideration for cash, check, bank draft or money order payable to us, the participant’s services performed for us, or any
other form of legal consideration acceptable to the Plan Administrator. Shares of our Common Stock acquired under a restricted stock
award may be subject to forfeiture to or repurchase by us in accordance with a vesting schedule to be determined by the Plan Administrator.
Rights to acquire shares of our Common Stock under a restricted stock award may be transferred only upon such terms and conditions as
are set forth in the restricted stock award agreement. Upon a participant’s termination of continuous service for any reason, any
shares subject to restricted stock awards held by the participant that have not vested as of such termination date may be forfeited to
or repurchased by us.
Restricted
Stock Unit Awards
Restricted
stock unit awards may be granted under the 2021 Plan pursuant to restricted stock unit award agreements. Payment of any purchase price
may be made in any form of legal consideration acceptable to the Plan Administrator. A restricted stock unit award may be settled by
the delivery of shares of our Common Stock, in cash, in a combination of cash and stock, or in any other form of consideration determined
by the Plan Administrator and set forth in the restricted stock unit award agreement. Restricted stock unit awards may be subject to
vesting in accordance with a vesting schedule to be determined by the Plan Administrator. Except as otherwise provided in a participant’s
restricted stock unit award agreement or other written agreement with us, restricted stock units that have not vested will be forfeited
upon the participant’s termination of continuous service for any reason.
Performance
Awards
The
2021 Plan allows us to grant performance awards. A performance award is an award that may vest or may be exercised, or that may become
earned and paid, contingent upon the attainment of pre-determined performance goals during a performance period. A performance award
may require the completion of a specified period of continuous service. The length of any performance period, the performance goals to
be achieved during the performance period, and the measure of whether and to what degree such performance goals have been attained will
be determined by the Plan Administrator in its discretion. In addition, to the extent permitted by applicable law and the applicable
award agreement, the Plan Administrator may determine that cash may be used in payment of performance awards.
Performance
goals under the 2021 Plan are, for a performance period, the one or more goals established by the Plan Administrator for the performance
period based upon the performance criteria that the Plan Administrator will select.
Performance
goals may be based on a Company-wide basis, with respect to one or more business units, divisions, affiliates or business segments, and
in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant
indices. Unless specified otherwise by the Plan Administrator (i) in the award agreement at the time the award is granted or (ii) in
such other document setting forth the performance goals at the time the performance goals are established, the Plan Administrator will
appropriately make adjustments in the method of calculating the attainment of the performance goals for a performance period as follows:
(1) to exclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects, as applicable, for non-U.S. dollar
denominated performance goals; (3) to exclude the effects of changes to generally accepted accounting principles; (4) to exclude the
effects of any statutory adjustments to corporate tax rates; (5) to exclude the effects of items that are “unusual” in nature
or occur “infrequently” as determined under generally accepted accounting principles; (6) to exclude the dilutive effects
of acquisitions or joint ventures; (7) to assume that any business divested by us achieved performance objectives at targeted levels
during the balance of a performance period following such divestiture; (8) to exclude the effect of any change in the outstanding shares
of our Common Stock by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation,
spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common shareholders other than
regular cash dividends; (9) to exclude the effects of stock based compensation and the award of bonuses under our bonus plans; (10) to
exclude costs incurred in connection with potential acquisitions or divestitures that are required to be expensed under generally accepted
accounting principles; (11) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally
accepted accounting principles; and (12) to exclude the effects of the timing of acceptance for review and/or approval of submissions
to the U.S. Food and Drug Administration or any other regulatory body. In addition, the Plan Administrator retains the discretion to
define the manner of calculating the performance criteria it selects to use for a performance period and to reduce or eliminate the compensation
or economic benefit due upon the attainment of any performance goal.
Other
Awards
Other
forms of awards valued in whole or in part by reference to, or otherwise based on, our Common Stock may be granted either alone or in
addition to other awards under the 2021 Plan. Subject to the terms of the 2021 Plan, the Plan Administrator will have sole and complete
authority to determine the persons to whom and the time or times at which such other awards will be granted, the number of shares of
our Common Stock to be granted and all other terms and conditions of such other awards.
Clawback
Policy
Awards
granted under the 2021 Plan will be subject to recoupment in accordance with any clawback policy that we are required to adopt pursuant
to the listing standards of any national securities exchange or association on which our securities are listed or as is otherwise required
by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law, and any other clawback policy that the Company
adopts. In addition, the Board of Directors may impose other clawback, recovery or recoupment provisions in an award agreement, including
a reacquisition right in respect of previously acquired shares or other cash or property upon the occurrence of cause.
Changes
to Capital Structure
In
the event of certain capitalization adjustments, the Plan Administrator will appropriately and proportionately adjust: (i) the class(es)
and maximum number of shares of our Common Stock subject to the 2021 Plan; (ii) the class(es) and maximum number of shares of our Common
Stock that may be issued pursuant to the exercise of ISOs; and (iii) the class(es) and number of shares of our Common Stock and the exercise,
strike or purchase price per share of our Common Stock subject to outstanding awards.
Corporate
Transaction
The
following applies to each outstanding award under the 2021 Plan in the event of a corporate transaction (as defined in the 2021 Plan
and described below), unless provided otherwise in the applicable award agreement, in any other written agreement between a participant
and the Company, or in any director compensation policy of the Company. For purposes of this Proposal 4, the term “Transaction”
will mean such corporate transaction.
In
the event of a Transaction, any awards outstanding under the 2021 Plan may be assumed, continued or substituted for by any surviving
or acquiring corporation (or its parent company) (such entity, the “acquiring entity”), and any reacquisition or repurchase
rights held by us with respect to the award may be assigned to the acquiring entity. If the acquiring entity does not assume, continue
or substitute for such awards, then with respect to any such awards that are held by participants who are employees or non-employee directors
and, in each case, whose continuous service has not terminated prior to the effective time of the Transaction (such participants, the
“current employee and director participants”), the vesting (and exercisability, if applicable) of such awards will be accelerated
in full (and with respect to any such awards that are subject to performance-based vesting conditions or requirements, vesting will be
deemed to be satisfied at the target level of performance as of the date of the Transaction) to a date prior to the effective time of
the Transaction (contingent upon the effectiveness of the Transaction), and such awards will terminate if not exercised (if applicable)
at or prior to the effective time of the Transaction, and any reacquisition or repurchase rights held by us with respect to such awards
will lapse (contingent upon the effectiveness of the Transaction). Any such awards that are held by persons other than current employee
and director participants will terminate if not exercised (if applicable) at or prior to the effective time of the Transaction, except
that any reacquisition or repurchase rights held by us with respect to such awards will not terminate and may continue to be exercised
notwithstanding the Transaction.
In
the event an award will terminate if not exercised at or prior to the effective time of a Transaction, the Plan Administrator may provide
that the holder of such award may not exercise such award but instead will receive a payment equal in value to the excess, if any, of
(i) the value of the property the participant would have received upon the exercise of the award, over (ii) any exercise price payable
by such holder in connection with such exercise.
Under
the 2021 Plan, a “corporate transaction” generally means the consummation of any one or more of the following events: (1)
a sale or other disposition of all or substantially all of our assets; (2) a sale or other disposition of at least 50% of our outstanding
securities; (3) a merger, consolidation or similar transaction where the Company does not survive the transaction; or (4) a merger, consolidation
or similar transaction where the Company does survive the transaction but the shares of our Common Stock outstanding immediately before
such transaction are converted or exchanged into other property by virtue of the transaction.
Under
the 2021 Plan, a “change in control” generally means the occurrence of any one or more of the following events: (1) the acquisition
by any person, entity or group of our securities representing more than 50% of the combined voting power of our then outstanding securities,
other than by virtue of a merger, consolidation, or similar transaction; (2) a merger, consolidation or similar transaction in which
our shareholders immediately before such transaction do not own, directly or indirectly, more than 50% of the combined voting power of
the surviving entity (or the parent of the surviving entity) in substantially the same proportions as their ownership immediately prior
to such transaction; (3) our shareholders approve or our Board of Directors approves our complete dissolution or liquidation, or our
complete dissolution or liquidation otherwise occurs; (4) a sale, lease, exclusive license or other disposition of all or substantially
all of our assets, other than to an entity, more than 50% of the combined voting power of which is owned by our shareholders in substantially
the same proportions as their ownership of our outstanding voting securities immediately prior to such transaction; or (5) when a majority
of our Board of Directors becomes comprised of individuals who were not serving on our Board of Directors on the date the 2021 Plan was
adopted by our Compensation Committee (the “incumbent Board of Directors”), or whose nomination, appointment, or election
was not approved by a majority of the incumbent Board of Directors still in office.
Plan
Amendments and Termination
The
Plan Administrator will have the authority to amend or terminate the 2021 Plan at any time. However, except as otherwise provided in
the 2021 Plan, no amendment or termination of the 2021 Plan may materially impair a participant’s rights under his or her outstanding
awards without the participant’s consent. We will obtain shareholder approval of any amendment to the 2021 Plan as required by
applicable law and listing requirements.
U.S.
Federal Income Tax Consequences
The
following is a summary of the principal United States federal income tax consequences to participants and us with respect to participation
in the 2021 Plan. This summary is not intended to be exhaustive and does not discuss the income tax laws of any local, state or foreign
jurisdiction in which a participant may reside. The information is based upon current federal income tax rules and therefore is subject
to change when those rules change. Because the tax consequences to any participant may depend on his or her particular situation, each
participant should consult the participant’s tax adviser regarding the federal, state, local and other tax consequences of the
grant or exercise of an award or the disposition of stock acquired the 2021 Plan. The 2021 Plan is not qualified under the provisions
of Section 401(a) of the Internal Revenue Code of 1986, as amended, (the “Code”) and is not subject to any of the provisions
of the Employee Retirement Income Security Act of 1974. Our ability to realize the benefit of any tax deductions described below depends
on our generation of taxable income as well as the requirement of reasonableness and the satisfaction of our tax reporting obligations.
Nonstatutory
Stock Options
Generally,
there is no taxation upon the grant of an NSO if the stock option is granted with an exercise price equal to or higher than the fair
market value of the underlying stock on the grant date. Upon exercise, a participant will recognize ordinary income equal to the excess,
if any, of the fair market value of the underlying stock on the date of exercise of the stock option over the exercise price. If the
participant is employed by us, that income will be subject to withholding taxes. The participant’s tax basis in those shares will
be equal to his or her fair market value on the date of exercise of the stock option, and the participant’s capital gain holding
period for those shares will begin on that date.
Subject
to the requirement of reasonableness, the provisions of Section 162(m) of the Code, and the satisfaction of a tax reporting obligation,
we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the participant.
Incentive
Stock Options
The
2021 Plan authorizes the grant of stock options that are intended to qualify as “incentive stock options,” as defined in
Section 422 of the Code. Under the Code, a participant generally is not subject to ordinary income tax upon the grant or exercise of
an ISO. If the participant holds a share received upon exercise of an ISO for more than two years from the date the stock option was
granted and more than one year from the date the stock option was exercised, which is referred to as the required holding period, the
difference, if any, between the amount realized on a sale or other taxable disposition of that share and the participant’s tax
basis in that share will be long-term capital gain or loss.
If,
however, a participant disposes of a share acquired upon exercise of an ISO before the end of the required holding period, which is referred
to as a disqualifying disposition, the participant generally will recognize ordinary income in the year of the disqualifying disposition
equal to the excess, if any, of the fair market value of the share on the date of exercise of the stock option over the exercise price.
However, if the sales proceeds are less than the fair market value of the share on the date of exercise of the stock option, the amount
of ordinary income recognized by the participant will not exceed the gain, if any, realized on the sale. If the amount realized on a
disqualifying disposition exceeds the fair market value of the share on the date of exercise of the stock option, that excess will be
short-term or long-term capital gain, depending on whether the holding period for the share exceeds one year.
For
purposes of the alternative minimum tax, the amount by which the fair market value of a share of stock acquired upon exercise of an ISO
exceeds the exercise price of the stock option generally will be an adjustment included in the participant’s alternative minimum
taxable income for the year in which the stock option is exercised. If, however, there is a disqualifying disposition of the share in
the year in which the stock option is exercised, there will be no adjustment for alternative minimum tax purposes with respect to that
share. In computing alternative minimum taxable income, the tax basis of a share acquired upon exercise of an ISO is increased by the
amount of the adjustment taken into account with respect to that share for alternative minimum tax purposes in the year the stock option
is exercised.
We
are not allowed a tax deduction with respect to the grant or exercise of an ISO or the disposition of a share acquired upon exercise
of an ISO after the required holding period. If there is a disqualifying disposition of a share, however, we will generally be entitled
to a tax deduction equal to the taxable ordinary income realized by the participant, subject to the requirement of reasonableness, the
provisions of Section 162(m) of the Code, and provided that either the employee includes that amount in income or we timely satisfy our
reporting requirements with respect to that amount.
Restricted
Stock Awards
Generally,
the recipient of a restricted stock award will recognize ordinary income at the time the stock is received equal to the excess, if any,
of the fair market value of the stock received over any amount paid by the recipient in exchange for the stock. If, however, the stock
is not vested when it is received (for example, if the employee is required to work for a period of time in order to have the right to
sell the stock), the recipient generally will not recognize income until the stock becomes vested, at which time the recipient will recognize
ordinary income equal to the excess, if any, of the fair market value of the stock on the date it becomes vested over any amount paid
by the recipient in exchange for the stock. A recipient may, however, file an election with the Internal Revenue Service, within 30 days
following his or her receipt of the restricted stock award, to recognize ordinary income, as of the date the recipient receives the restricted
stock award, equal to the excess, if any, of the fair market value of the stock on the date the restricted stock award is granted over
any amount paid by the recipient for the stock.
The
recipient’s basis for the determination of gain or loss upon the subsequent disposition of shares acquired from a restricted stock
award will be the amount paid for such shares plus any ordinary income recognized either when the stock is received or when the stock
becomes vested.
Subject
to the requirement of reasonableness, the provisions of Section 162(m) of the Code, and the satisfaction of a tax reporting obligation,
we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of the restricted stock
award.
Restricted
Stock Unit Awards
Generally,
the recipient of a restricted stock unit award structured to comply with the requirements of Section 409A of the Code or an exception
to Section 409A of the Code will recognize ordinary income at the time the stock is delivered equal to the excess, if any, of the fair
market value of the stock received over any amount paid by the recipient in exchange for the stock. To comply with the requirements of
Section 409A of the Code, the stock subject to a restricted stock unit award may generally only be delivered upon one of the following
events: a fixed calendar date (or dates), separation from service, death, disability or a change in control. If delivery occurs on another
date, unless the restricted stock unit award otherwise complies with or qualifies for an exception to the requirements of Section 409A
of the Code (including delivery upon achievement of a performance goal), in addition to the tax treatment described above, the recipient
will owe an additional 20% federal tax and interest on any taxes owed.
The
recipient’s basis for the determination of gain or loss upon the subsequent disposition of shares acquired from a restricted stock
unit award will be the amount paid for such shares plus any ordinary income recognized when the stock is delivered.
Subject
to the requirement of reasonableness, the provisions of Section 162(m) of the Code, and the satisfaction of a tax reporting obligation,
we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of the restricted stock
unit award.
Stock
Appreciation Rights
Generally,
if a stock appreciation right is granted with an exercise price equal to or greater than the fair market value of the underlying stock
on the grant date, the recipient will recognize ordinary income equal to the fair market value of the stock or cash received upon such
exercise. Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code, and the satisfaction of a tax reporting
obligation, we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of the stock
appreciation right.
Section
162(m) Limitations
Under
Section 162(m) of the Code, compensation paid to any publicly held corporation’s “covered employees” that exceeds $1
million per taxable year for any covered employee is generally non-deductible. Awards granted under the 2021 Plan will be subject to
the deduction limit under Section 162(m) of the Code. These awards will not qualify for the performance-based compensation exception
under Section 162(m) of the Code pursuant to the transition relief provided by the Tax Cuts and Jobs Act.
New
Plan Benefits under 2021 Plan
The
following table sets forth certain information regarding future benefits under the 2021 Plan.
Name and Position
|
|
Dollar Value ($)
|
|
Number of Units
|
Michael O. Sullivan
Interim Principal Executive Officer and Chief Financial Officer
|
|
|
(1)
|
|
|
|
(1)
|
|
Dr. Martin Handfield
Senior Vice President, Discovery Research
|
|
|
(1)
|
|
|
|
(1)
|
|
All current directors who are not executive officers as a group
|
|
|
(2)
|
|
|
|
(2)
|
|
All current employees, including current officers who are not executive officers, as a group
|
|
|
(1)
|
|
|
|
(1)
|
|
|
(1)
|
Awards
granted under the 2021 Plan to our executive officers and other employees are discretionary
and are not subject to set benefits or amounts under the terms of the 2021 Plan, and we have
not granted any awards under the 2021 Plan subject to shareholder approval of this Proposal.
Accordingly, the benefits or amounts that will be received by or allocated to our executive
officers and other employees under the 2021 Plan are not determinable.
|
|
(2)
|
Awards
granted under the 2021 Plan to our non-employee directors are discretionary and are not subject
to set benefits or amounts under the terms of the 2021 Plan. However, pursuant to our current
Director Compensation Program, each of our current non-employee directors is eligible to
receive an annual equity award as part of their compensation which is currently in the form
of a stock options and the number of shares may be based upon a set dollar amount or set
number of shares. This Director Compensation Program may be modified from time to time. For
additional information regarding our current compensation program for non-employee directors,
please see “Director Compensation Table.” Accordingly, the benefits or amounts
that will be received by or allocated to our non-employee directors under the 2021 Plan are
not determinable
|
Securities
Authorized for Issuance under Equity Compensation Plans
Our
2012 Incentive Plan, which is currently our only equity compensation plan, has been approved by our shareholders. The following table
sets forth certain information as of December 31, 2020 with respect to the 2012 Incentive Plan:
Plan Category
|
|
Number
of
Securities
to be
Issued
Upon
Exercise
of
Outstanding
Options
(A)
|
|
|
Weighted-
Average
Exercise
Price
of
Outstanding
Options
(B)
|
|
|
Number
of
Securities
Remaining
Available
for
Future
Issuance
Under
Equity
Compensation
Plans
(Excluding
Securities
Reflected
in
Column
(A))
(C)
|
|
Equity
compensation plans approved by
shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
2012 Equity Incentive Plan
|
|
|
5,801,349
|
|
|
$
|
0.90
|
|
|
|
2,207,901
|
|
Equity
compensation plans not approved by
shareholders:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
None
|
|
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
Total:
|
|
|
5,801,349
|
|
|
$
|
0.90
|
|
|
|
2,207,901
|
|
(1)
|
The
Company does not have any equity compensation plans that have not been approved by shareholders.
|
PROPOSAL VI
RATIFICATION OF THE SELECTION OF MAYER HOFFMAN MCCANN P.C.
AS THE COMPANY’S INDEPENDENT AUDITORS
Summary
Mayer Hoffman McCann P.C. served
as the Company’s independent auditors and independent registered public accounting firm for the completion of the Company’s
audit for the year ended December 31, 2020. The Audit Committee has again approved the appointment of Mayer Hoffman McCann P.C. as the
Company’s independent auditors for the year ending December 31, 2021 and the Board has further directed that the Company submit
the selection of independent auditors and independent registered public accounting firm for 2021 for ratification by the shareholders
at this Annual Meeting.
Representatives of Mayer Hoffman
McCann P.C., who are expected to be present at the Annual Meeting, will have an opportunity to make a statement if they so desire and
are expected to be available to respond to appropriate questions.
Although ratification is not
required by the Bylaws or otherwise, the Company is submitting the selection to its shareholders for ratification as a matter of good
corporate practice and because the Company values its shareholders’ views. In the event the shareholders fail to ratify the selection,
the Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee in its
discretion may direct the appointment of a different auditor/independent accounting firm at any time during the year if the Audit Committee
feels that such a change would be in the Company’s and the Company’s shareholders’ best interests.
Mayer Hoffman McCann P.C. leases
substantially all of its personnel, who work under the control of Mayer Hoffman McCann P.C. shareholders, from wholly owned subsidiaries
of CBIZ, Inc., in an alternative practice structure.
Independent Auditors’ Fees and Services
The following table provides
the aggregate fees billed for professional services rendered by the Company’s principal accountants, Mayer Hoffman McCann P.C.
(“MHM”), in the categories indicated during each of the past two fiscal years ended December 31:
Services
Rendered
|
|
|
2020
|
|
|
|
2019
|
|
Audit Fees (1)
|
|
$
|
154,250
|
|
|
$
|
151,500
|
|
Audit-Related Fees (2)
|
|
|
—
|
|
|
|
—
|
|
Tax Fees (3)
|
|
|
6,800
|
|
|
|
12,200
|
|
All Other Fees (4)
|
|
|
—
|
|
|
|
—
|
|
|
|
$
|
161,050
|
|
|
$
|
163,700
|
|
(1)
|
Audit
Fees. This category includes fees for professional services provided in conjunction with the audit of the Company’s financial
statements and with the audit of management’s assessment of internal control over financial reporting and the effectiveness
of internal control over financial reporting, review of the Company’s quarterly financial statements, assistance and review
of documents filed with the Securities and Exchange Commission, consents, and comfort letters and attestation services provided in
connection with statutory and other regulatory filings and engagements.
|
(2)
|
Audit-Related
Fees. This category includes fees for assurance and related professional services associated with due diligence related to mergers
and acquisitions, consultation on accounting standards or transactions, internal control reviews and assistance with internal control
reporting requirements, services related to the audit of employee benefit plans, and other attestation services not required by statute
or regulation.
|
(3)
|
Tax
Fees. This category includes fees for professional services provided related to tax compliance, tax planning and tax advice.
|
(4)
|
All
Other Fees. There were no other fees paid to Mayer Hoffman McCann P.C.
|
Substantially all MHM’s
personnel, who work under the control of MHM shareholders, are employees of wholly-owned subsidiaries of CBIZ, Inc., which provides personnel
and various services to MHM in an alternative practice structure.
Pre-Approval Policy
The Audit Committee approves
in advance all audit and non-audit services to be performed by the Company’s independent registered public accounting firm. The
Audit Committee considers whether the provision of any proposed non-audit services is consistent with the Securities and Exchange Commission
rules on auditor independence and has pre-approved certain specified audit and non-audit services to be provided by MHM for up to twelve
(12) months from the date of the pre-approval. If there are any additional services to be provided, a request for pre-approval must be
submitted by management to the Audit Committee for its consideration.
Vote Required and Board of Directors’ Recommendation
Ratification of the selection
of Mayer Hoffman McCann P.C. as the Company’s independent auditors for the year ending December 31, 2021 requires the affirmative
vote of the holders of a majority of the shares of Common Stock voting on this Proposal VI in person, or by proxy at the Annual Meeting
of Shareholders. Abstentions will not be counted in the ratification of the selection of independent auditors and will have no effect
on the outcome of the selection of the independent auditors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE “FOR” THE
RATIFICATION OF THE SELECTION OF MAYER HOFFMAN
MCCANN P.C. AS THE COMPANY’S INDEPENDENT AUDITORS.
REPORT OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
The information contained
in this report shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange
Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that we specifically incorporate it by reference in such filing.
The following is the report of
the Audit Committee with respect to our audited financial statements for the fiscal year ended December 31, 2020, and the notes thereto.
Review with Management
The Audit Committee reviewed
and discussed with management our audited financial statements for the fiscal year ended December 31, 2020 and the notes thereto. Management
represented to the Audit Committee that our financial statements were prepared in accordance with generally accepted accounting principles.
Review and Discussions with Independent Registered
Public Accounting Firm
The Audit Committee discussed
with Mayer Hoffman McCann P.C. the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard 1301,
which includes, among other items, matters related to the conduct of the audit of our financial statements.
The Audit Committee also received
and reviewed written disclosures and the letter from Mayer Hoffman McCann P.C. as required by applicable requirements of the Public Company
Accounting Oversight Board regarding the independent accountant’s communications with the audit committee concerning independence
and has discussed with Mayer Hoffman McCann P.C. their independence from us.
Conclusion
Based on the review and discussions
referred to above, the Audit Committee recommended to our Board of Directors that our audited financial statements be included in our
Annual Report on Form 10-K for the year ended December 31, 2020 for filing with the Securities and Exchange Commission.
Submitted by the Audit Committee:
Charles L. Pope (Chair)
Dr. Alan Dunton
Robert C. Koski (from June 30, 2021)
Dr. Frederick Telling (through June 30, 2021)
CORPORATE GOVERNANCE
Oragenics’ current corporate
governance practices and policies are designed to promote shareholder value, and Oragenics is committed to the highest standards of corporate
ethics and diligent compliance with financial accounting and reporting rules. Our Board provides independent leadership in the exercise
of its responsibilities. Our management oversees a system of internal controls and compliance with corporate policies and applicable
laws and regulations, and our employees operate in a climate of responsibility, candor and integrity. You can access information regarding
our corporate governance practices on our web site at https://ir.oragenics.com/governance-docs.
Corporate Governance Principles
Our Board has adopted Board of
Directors Corporate Governance Policy, which sets forth the principles that guide the Board’s exercise of its responsibility to
oversee corporate governance, maintain its independence, evaluate its own performance and the performance of our executive officers and
set corporate strategy. Our Corporate Governance Policy, states that currently different individuals fill the roles of Chairman and Chief
Executive Officer. Our Board may refine our Corporate Governance Principles from time to time. You can access our Corporate Governance
Principles on our web site at https://ir.oragenics.com/governance-docs.
Code of Ethics/Standards of Business Conduct
It is our policy to conduct our
operations in compliance with all applicable laws and regulations and to operate our business under the fundamental principles of honesty,
integrity and ethical behavior. This policy can be found in our Company Operating Principles, which is applicable to all of our Directors,
officers and employees, and which complies with the Securities and Exchange Commission’s requirements and with listing standards
of the NYSE American we have adopted.
Our Company Operating Principles
are designed to promote honest and ethical conduct and compliance with all applicable laws, rules and regulations and to deter wrongdoing.
Our Company Operating Principles are also aimed at ensuring that information we provide to the public (including our filings with and
submissions to the Securities and Exchange Commission) is accurate, complete, fair, relevant, timely and understandable. Our Company
Operating Principles can be accessed on our web site at www.oragenics.com/governance. We intend to disclose amendments to certain provisions
of our Company Operating Principles, or waivers of such provisions granted to Directors and executive officers, on our web site in accordance
with applicable Securities and Exchange Commission requirements.
Independence of Directors
Our Common Stock is listed on
a national securities exchange, the NYSE American. Accordingly, in determining whether our Directors are independent, we are required
to comply with the rules of the NYSE American. We also expect to continue to comply with securities and other laws and regulations regarding
the independence of directors, including those adopted under Section 301 of the Sarbanes-Oxley Act and Rule 10A-3 under the Securities
and Exchange Act of 1934 with respect to the independence of Audit Committee members. The NYSE American listing standards define an “independent
director” generally as a person, other than an officer of a company, who does not, in the view of the company’s Board of
Directors, have a relationship with the Company that would interfere with the director’s exercise of independent judgment. The
Board has affirmatively determined that each of the following directors, constituting a majority of the Board, is independent within
the meaning of the NYSE American listing standards:
Dr. Frederick W. Telling
Charles L. Pope
Dr. Alan Dunton
Robert Koski
Kimberly M. Murphy
Such independence definition
includes a series of objective tests, including that the director is not an executive officer employee of the company and has not engaged
in various types of business dealings with the company. In addition, as further required by the NYSE American listing standards, the
Board has made a subjective determination as to each independent director that no relationships exist which, in the opinion of the Board,
would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Board Leadership Structure
We currently separate the positions
of Chief Executive Officer and Chair of the Board. Since February 2011, Dr. Telling, one of our independent Directors, has served as
our non-executive Chairman of the Board and since May 2, 2021 as Executive Chairman due to the resignation of the Company’s President
and Chief Executive Officer. The responsibilities of the Chair of the Board include: setting the agenda for each Board meeting, in consultation
with the Chief Executive Officer or interim principal executive officer; presiding at executive sessions; facilitating and conducting,
with the Nominating Committee, the annual self-assessments by the Board and each standing committee of the Board, including periodic
performance reviews of individual Directors; and conducting, with the Compensation Committee, a formal evaluation of the Chief Executive
Officer and other executive officers in the context of the annual compensation review. The responsibility of the Executive Chairman includes
providing leadership to the Company to enhance its effectiveness and performance and to advise the interim Principal Executive Officer
on strategic initiatives, relationships with shareholders, including institutional investors, financial institutions, and analysts and
serve in such capacity to carry out such functions on a temporary basis until the Board duly appoints a new President and Chief Executive
Officer.
Separating the positions of Chief
Executive Officer and Chair of the Board allows our Chief Executive Officer to focus on our day-to-day business, while allowing the Chair
of the Board to lead the Board in its fundamental role of providing advice to and independent oversight of management. The Board believes
that having an independent Director serve as Chair of the Board is the appropriate leadership structure for the Company at this time
and demonstrates our commitment to good corporate governance.
In addition, as described in
more detail below, our Board has three standing committees, each chair and each member of which is an independent Director. Our Board
delegates substantial responsibility to each Board committee, which reports their activities and actions back to the Board. We believe
that our independent Board committees and their chairs are an important aspect of our Board leadership structure.
Risk Oversight
Our Board, as a whole and through
its committees, has responsibility for the oversight of risk management. With the oversight of our Board, our officers are responsible
for the day-to-day management of the material risks Oragenics faces. In its oversight role, our Board has the responsibility to satisfy
itself that the risk management processes designed and implemented by management are adequate and functioning as designed. The involvement
of the Board in setting our business strategy at least annually is a key part of its oversight of risk management, its assessment of
management’s appetite for risk and its determination of what constitutes an appropriate level of risk for Oragenics. The Board
regularly receives updates from management and outside advisors regarding certain risks the Company faces, including potential litigation
and various operating risks.
In addition, our Board committees
each oversee certain aspects of risk management. For example, our Audit Committee is responsible for overseeing risk management of financial
matters, financial reporting, the adequacy of our risk-related internal controls, and internal investigations; our Compensation Committee
oversees risks related to compensation policies and practices; and our Nominating Committee oversees governance related risks, such as
Board independence and conflicts of interest, as well as management and Director succession planning. Our Board committees report their
findings to the Board.
Senior management attends Board
and Board committee meetings and is available to address any questions or concerns raised by the Board on risk management-related and
any other matters. The Board holds periodic strategic planning sessions with senior management to discuss strategies, key challenges,
and risks and opportunities for the Company.
Meetings of the Board of Directors and Committees
Board of Directors. Our
property, affairs and business are under the general management of our Board of Directors as provided by the laws of the State of Florida
and our Bylaws. The Board of Directors conducts its business through meetings of the full Board and through committees of the Board.
The Board of Directors has appointed standing Audit, Compensation and Nominating Committees of the Board of Directors. The Board periodically
reviews the size of the Board and recommends any changes it determines to be appropriate given our needs. Under our Bylaws, the number
of members on the Board may be increased or decreased by resolution of the Board.
The Board currently consists
of five members. The Board has no formal policy regarding board member attendance at the Annual Meeting of Shareholders. All of our existing
Directors attended the prior year’s annual meeting and all of our Directors are expected to attend the current Annual Meeting of
Shareholders wither in person or telephonically. The Board of Directors met or unanimously consented to resolutions 24 times during the
year ended December 31, 2020 (“Fiscal 2020”). All Directors attended at least 75% of the aggregate number of meetings of
the Board of Directors and Committees during Fiscal 2020. In conjunction with regularly scheduled meetings, our “independent”
Directors met in separate executive sessions.
Audit Committee: The Audit
Committee members currently consist of Mr. Charles Pope, Robert Koski and Dr. Alan Dunton with Mr. Pope serving as Chairman. The Board
has affirmatively determined that each such person met the independence requirements for audit committee purposes based on the more stringent
independence standards imposed by applicable NYSE American and Securities and Exchange Commission rules. In addition, the Board of Directors
has determined that Mr. Pope is an “audit committee financial expert” as that term is defined in Item 407(d)(5) of Regulation
S-K promulgated under the Securities and Exchange Act of 1934. In March 2004, the Audit Committee adopted a written charter which was
modified on April 24, 2007 on December 29, 2009 and December 2019. The Company believes that its Audit Committee Charter complies with
the requirements related to Sarbanes-Oxley and a current copy of the Audit Committee Charter is available on our website at www.oragenics.com.
The Audit Committee met or unanimously consented to resolutions 6 times during Fiscal 2020.
The Audit Committee has the sole
authority to engage and discharge, review the independence, qualifications, activities and compensation of the Company’s independent
registered certified public accountants. The Audit Committee reports to the Board the appointment of the independent registered certified
public accountants. The Audit Committee must assure regular rotation of the lead and concurring audit partners. The Audit Committee is
responsible for the oversight of the Company’s financial policies, control procedures, accounting staff, and reviews and approves
the Company’s financial statements. The Audit Committee is responsible for the review of transactions between the Company and any
Company officer, Director or entity in which a Company officer or Director has a material interest. The Audit Committee must develop
and maintain procedures for the submission of complaints and concerns about accounting and auditing matters. The Audit Committee must
assure CEO and CFO certifications meet their obligations by performing a review and evaluation of the Company’s disclosure controls
and procedures. The Audit Committee has the authority to engage the services of an outside advisor when required. The Audit Committee
must receive reports from the independent registered certified public accountants on critical accounting policies, significant accounting
judgments and estimates, off-balance sheet transactions and non-Generally Accepted Accounting Principles financial measures.
Compensation Committee:
The Compensation Committee consists of Directors Dr. Alan Dunton, Dr. Frederick Telling, Ms. Kimberly Murphy and Mr. Charles Pope with
Dr. Dunton serving as Chairman. The Board has determined that each current member of the Compensation Committee meets the applicable
requirements for independence. None of the Compensation Committee members has ever been an officer or employee of the Company.
The Compensation Committee is responsible for establishing the compensation of the Company’s Directors, Chief Executive Officer
and all other executive officers, including salaries, bonuses, severance arrangements, and other executive officer benefits. The Committee
also administers the Company’s various incentive and stock option plans and designates both the persons receiving awards and the
amounts and terms of the awards. The Compensation Committee adopted a charter in March 2004 to outline its compensation, benefits and
management development philosophy and to communicate to shareholders the Company’s compensation policies and the reasoning behind
such policies as required by the Securities and Exchange Commission. The Charter was modified on April 24, 2007, on December 29, 2009
and on June 6, 2013 and December 2019. A current copy of the Compensation Committee’s charter is available on our website at www.oragenics.com.
The Compensation Committee met or unanimously consented to resolutions 3 times during Fiscal 2020.
Nominating Committee:
The Nominating Committee consists of Directors Charles Pope, Dr. Alan Dunton and Ms. Kimberly Murphy with Mr. Pope serving as Chairman.
The Board has determined that each current member of the Nominating Committee meets the applicable requirements for independence. The
Nominating Committee met 2 times during Fiscal 2020. The Board adopted a nominating committee charter. The charter was updated on February
12, 2014 and December 2019. A current copy of the Nominating Committee’s charter is available on our website. In addition to recommending
candidates to the Board for election at the Annual shareholder Meeting, the Nominating Committee oversees the evaluation of the Board
as a whole and its committees, as well as individual evaluations of those Directors who are being considered for possible re-nomination
to the Board. The evaluation process occurs annually and has, to date, been informal.
The Nominating Committee has
not established specific minimum age, education, and years of business experience or specific types of skills for potential Director
candidates, but, in general, expects qualified candidates will have ample experience and a proven record of business success and leadership.
The Nominating Committee also believes it is appropriate for a member of the Company’s management to participate as a member of
the Board of Directors, although at present no such management member serves on the Board of Directors. The Nominating Committee will
consider as candidates for Director individuals who possess a high level of ethics, integrity and values, and who are committed to representing
the long-term interests of our shareholders. Such candidates must be able to make a significant contribution to the governance of the
Company by virtue of their business and financial expertise, educational and professional background. The business discipline that may
be sought at any given time will vary depending on the needs and strategic direction of the Company, and the disciplines represented
by incumbent Directors. In evaluating candidates for nomination as a Director, the Nominating Committee will also consider other criteria,
including geographical representation, independence, practical wisdom, mature judgment and having sufficient time to devote to the affairs
of the Company in order to carry out the responsibilities of a Director. One or more of our Directors is required to possess the education
or experience required to qualify as an audit committee financial expert as defined in the applicable rules of the Securities and Exchange
Commission. The Nominating Committee does not have a formal policy with respect to diversity; however, the Board of Directors and the
Nominating Committee believe that it is essential that the members of the Board of Directors represent diverse viewpoints and a diverse
mix of the specific criteria above. The entire Board of Directors is polled for suggestions as to individuals meeting the aforementioned
criteria. Research may also be performed to identify qualified individuals. To date the Company has not engaged third parties to identify
or evaluate or assist in identifying potential nominees.
Shareholder Recommendation
of Nominees. The Board does not currently have a policy with regard to the consideration of any Director candidates recommended by
security holders. Given the Company’s current size, stage of development, and size of the Board, the Board believes that it is
not currently appropriate to establish a separate policy for security holders to submit such recommendations. Notwithstanding the lack
of a formal policy regarding security holder nominations, the Board may from time to time consider candidates proposed for consideration
for service on the Company’s Board by security holders. The Nominating Committee will consider qualified Director nominees recommended
by shareholders when such recommendations are submitted in accordance with applicable law, rule or regulation regarding Director nominations.
Shareholders may submit candidates for nomination to our Board of Directors by writing to: Nominating Committee of the Board of Directors,
Oragenics, Inc., 4902 Eisenhower Blvd., Suite 125, Tampa, Florida 33634.
When submitting a nomination
to us for consideration, a shareholder must provide certain information about each person whom the shareholder proposes to nominate for
election as a Director, including: (i) the name, age, business address and residence address of the person; (ii) the principal occupation
or employment of the person; (iii) the class or series and number of shares of our capital stock owned beneficially or of record by the
person; and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitations of proxies for election of Directors pursuant to Section 14 of the Securities Exchange
Act of 1934, or the Exchange Act, and the rules and regulations promulgated thereunder. Such notice must be accompanied by the proposed
nominee’s written consent to be named as a nominee and to serve as a Director if elected. The Board has not set any specific minimum
qualifications that must be met by a nominee presented for consideration to the Board by a security holder. A Board member may become
aware of a potential nominee and present such nominee to the full Board for consideration at a Board meeting. The Board would evaluate
the candidate and determine whether such person should be considered for Board service based on a variety of criteria including but not
limited to, whether the individual has experience in the Company’s industry, potential conflicts, and the person’s ability
to work with existing Board members and expected contributions. The Board would evaluate a nominee submitted by a security holder in
the same or similar manner as one recommended by the Nominating Committee.
Direct Shareholder Communication to Board Members
The Company does not currently
have a formal process for direct shareholder communications to the Board. The basis for the Board’s view that it is appropriate
for the Company to not have such a formal process includes but is not limited to the following: the Company’s limited financial
and personnel resources, the Company’s stage of operations and development and the ability for shareholders to communicate with
Board members informally.
Shareholders with questions about
the Company are encouraged to contact the Company’s Corporate Secretary. However, if shareholders feel their questions have not
been addressed, they may communicate with the Company’s Board of Directors by sending their communications to an individual Director(s)
or to the Company’s Board of Directors, c/o Corporate Secretary, Oragenics, Inc., 4902 Eisenhower Blvd., Suite 125, Tampa, Florida
33634. All shareholder communications received by the Company’s Corporate Secretary in this manner will be delivered to the individual
Director(s) or to the Company’s Board of Directors.
The Chairman of the Board of
Directors, Dr. Frederick Telling, is an independent Director and has been designated by the Board of Directors to preside at the executive
sessions of the independent Directors. If interested parties wish to make a concern known to the independent Directors, they may do so
in a writing addressed to the Chairman of the Board, Oragenics, Inc., 4902 Eisenhower Blvd., Suite 125, Tampa, Florida 33634.
Director Compensation
The Director Compensation program for 2020 consisted
of the following:
Non-employee directors
Cash Compensation. The
Director compensation program for 2020 provided that all non-employee Directors would receive an annual base fee for service on the Board
of $45,000. In addition, the Chairperson of the Board and of our Audit Committee, Compensation Committee and Nominating Committee would
also receive annual fees of $40,000, $20,000, $15,000 and $10,000 respectively. All non-employee Directors serving on our Audit Committee,
Compensation Committee and Nominating Committee (other than as the Chairperson) would receive an annual fee of $10,000, $7,500, and $5,000,
respectively, in connection with such committee service. In addition, from time to time, the Board may establish special committees and
in connection therewith determine the cash compensation that would be paid to the directors serving on a special committee at the time
of the establishment of such committee. All fees for Board service are generally paid on or before the last business day of each quarter.
The Board is expecting to meet
in-person for a minimum of four meetings each year. To the extent, the Board meets in excess of six in-person meetings an additional
per meeting fee would also be considered to be paid to each director by the Board for such additional in-person meeting. To the extent
the Board determines to establish a special committee or a special committee was previously established and continues to function, the
Board would determine the cash compensation payable to each director serving on any such special committee.
Our Compensation Committee and
our Board of Directors use market data as one means of evaluating and establishing Board remuneration. In 2019 and 2020, the Compensation
Committee engaged Korn Ferry, as a compensation consultant to advise the Compensation Committee. Korn Ferry advises the Compensation
Committee on matters related to executive compensation, board remuneration and related governance matters.
Equity Compensation-New Director.
Equity compensation is issued to Directors upon joining our Board. Non-employee Directors receive a stock option for the purchase
of shares of Company’s Common Stock equating to $60,000 with an exercise price set as the Closing price of the Company’s
Common Stock on the day immediately prior to the appointment to the Board, which will immediately vest and be exercisable for ten years,
subject to early termination under the terms of the 2012 Equity Incentive Plan. If new directors join the Board before July 1 of the
calendar year, they would receive 100% of the value; 50% of such total value if they join between July 1 and October 1; and 25% of such
total value if they join after October 1 in a calendar year.
Annual Equity Compensation
Awards. As part of the Director Compensation Program each non-employee director receives equity awards under the 2012 Incentive Plan.
In 2020 at the time of determining such annual equity award the Board considered the view of its compensation consultant Korn Ferry and
revised its annual equity awards from 4,000 shares of restricted stock and an award of 8,000 stock options to an annual award of stock
options which was based upon a value of $75,000 and equated to 156,540 stock options which were awarded under the Company’s 2012
Incentive Plan at an exercise price of $0.48 per share, the closing price on February 5, 2020. The options vested immediately. The stock
option awards are subject to the standard terms and conditions of the Company’s form of stock option agreement which includes earlier
vesting upon a change in control of the Company.
Discretionary Awards.
As part of the Director Compensation Program, the Board may also make discretionary equity-based awards from time to time under our 2012
Incentive Plan. On February 5, 2020, the Board considered the view of its compensation consultant, Korn Ferry, and made a discretionary
retention stock option award in the amount of 156,540 shares which would vest on the first anniversary of the grant date provided that
the recipient remains a director of the Company through the vesting date.
Minimum dollar value stock
ownership requirements. Each non-employee director receiving the above equity-based awards will be subject to a minimum dollar value
stock ownership holding requirement with respect to the awards received as well as all prior equity awards under the 2012 Incentive Plan
which requirement is intended to align the ability to sell shares with the performance of the Company’s stock price. The non-employee
Directors will each be subject to a minimum dollar value stock ownership requirement equal to six times the annual Board retainer ($270,000)
which dollar threshold they would be precluded from selling shares of Company stock acquired from the Company under its 2012 Incentive
Plan.
Reimbursement of Expenses.
Non-employee Directors are also reimbursed for expenses incurred in connection with their attendance at Board or committee meetings
and reasonable out-of-pocket business expenses associated with their Board service.
Long-term Incentive Compensation.
The Company did not have a Long-Term Incentive Compensation plan in place performance in 2020 for its Non-Employee Directors.
The following table sets forth the compensation of
our non-employee Directors in 2020.
Director Compensation Table
Name
|
|
|
Fees earned
or paid in
cash (1)
|
|
|
|
Stock
Awards
|
|
|
|
Option
awards (2)
|
|
|
|
All other
compensation (3)
|
|
|
|
Total
|
|
Dr. Frederick
W. Telling
|
|
$
|
107,500
|
|
|
|
—
|
|
|
|
147,148
|
|
|
|
—
|
|
|
$
|
254,648
|
|
Robert C. Koski
|
|
$
|
45,000
|
|
|
|
—
|
|
|
|
147,148
|
|
|
|
—
|
|
|
$
|
192,148
|
|
Charles L. Pope
|
|
$
|
82,500
|
|
|
|
—
|
|
|
|
147,148
|
|
|
|
—
|
|
|
$
|
229,648
|
|
Dr. Alan W. Dunton
|
|
$
|
76,687
|
|
|
|
—
|
|
|
|
147,148
|
|
|
|
—
|
|
|
$
|
223,835
|
|
Kimberley W. Murphy
|
|
$
|
42,000
|
|
|
|
—
|
|
|
|
67,945
|
|
|
|
—
|
|
|
$
|
109,945
|
|
(1)
|
Amounts
represent cash compensation earned by our Non-employee Directors during 2020 in connection with their Board service including any
service on standing or special committees.
|
|
|
(2)
|
The amounts
in this column represent the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting
Standards Codification, Topic 718, Compensation—Stock Compensation (ASC 718). As part of the Company’s non-employee Director
Compensation Program, each non-employee Director received an Annual Equity Compensation award of 156,540 stock options under the
Company’s 2012 Incentive Plan at an exercise price of $0.48 per share, the closing price on February 5, 2020, the date of grant.
The options vested immediately. In addition, and as part of the Company’s non-employee Director Compensation Program, each
non-employee Director received a Discretionary award of 156,540 stock options under the Company’s 2012 Incentive Plan at an
exercise price of $0.48 per share, the closing price on February 5, 2020, the date of grant, which would vest on the first anniversary
of the grant date provided that the recipient remains a director of the Company through the vesting date. The stock option awards
are subject to the standard terms and conditions of the Company’s form of stock option agreement which includes earlier vesting
upon a change in control of the Company. In May of 2020, and as part of the Company’s non-employee Director Compensation Program,
director Murphy received an award of 138,644 stock options under the Company’s 2012 Incentive Plan at an exercise price of
$0.43 per share. As of the end of the year non-employee directors, Telling, Koski, Pope, Dunton and Murphy have aggregate options
to acquire, 638,620, 638,620, 638,620, 639,120 and 138,664, respectively and there are no stock awards outstanding for any non-employee
director.
|
|
|
(3)
|
No other
compensation was paid to the non-employee Directors except for reimbursement for travel expenses to Board meetings and other Board
related meetings.
|
Employee Directors
The Director Compensation Program
provides that employee Directors receive no additional compensation in connection with their board service.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This section explains the objectives
of our named executive officer compensation program, the compensation decisions we made with respect to compensation for our fiscal year
ended December 31, 2020, and the factors we considered in making those decisions, and focuses on the compensation of officers who our
“named executive officers” included in the Summary Compensation Table herein:
|
●
|
Michael
Sullivan, our Chief Financial Officer and Interim Principal Executive Officer;
|
|
|
|
|
●
|
Martin
Handfield, our Senior Vice President of Discovery Research; and
|
|
|
|
|
●
|
Alan Joslyn,
(former President and Chief Executive Officer).
|
The Compensation Committee of
our Board of Directors is responsible for establishing and evaluating our policies governing the compensation of our executive officers,
including its named executive officers. The Compensation Committee reviews and proposes recommendations to the Board of Directors regarding
the compensation to be paid to the Chief Executive Officer. In addition, the Compensation Committee reviews and approves the compensation
to be paid to all other executive officers. The Compensation Committee ensures that the total compensation paid to our executive officers
is fair, reasonable and competitive. The Compensation Committee has, in the past, at times included the other members of our Board of
Directors in its deliberations regarding the salaries of our named executive officers.
At our 2020 Annual Meeting of
Shareholders, on an advisory basis, a majority of the shareholders who voted on this matter approved the compensation of our named executive
officers as disclosed in our 2020 Proxy Statement. The Compensation Committee believes the views of our shareholders are an important
consideration when making decisions regarding our compensation program and will continue to take the views of our shareholders into consideration
when assessing our compensation program and making decisions related to the structure and amount of pay.
Business Highlights
This past year was significant
for the Company as we transitioned to the development of the Terra CoV-2 immunization product candidate to combat the novel coronavirus
pandemic. Our compensation program in 2020 reflects the challenges associated with designing a compensation program at the beginning
of the year in light of the efforts directed at the enrolment in a clinical trial and then transitioning to the development of a vaccine.
Despite such challenges, the Compensation Committee remains committed to a philosophy which strongly aligns pay with demonstrated performance,
and is confident that the decisions made are reflective of this overarching philosophy.
Compensation Objective
Our named executive compensation programs are designed to achieve the
following objectives:
|
●
|
Attract,
motivate and reward named executive officers whose knowledge, skills, performance and business relationships are critical to our
success;
|
|
|
|
|
●
|
Align
the interests of our named executive officers and shareholders by motivating named executive officers to ultimately increase shareholder
value as well as facilitate retention;
|
|
|
|
|
●
|
Motivate
our named executive officers to manage our business to meet our short term and long-range goals and reward accomplishment of these
goals;
|
|
|
|
|
●
|
Provide
a competitive compensation package which includes some pay for performance factors.
|
Compensation Determination Process
We conduct an annual review of
named executive officer compensation, generally in December or January. At the Compensation Committee’s direction, our Chief Executive
Officer prepares an executive compensation review for each named executive officer, other than himself, which may include recommendations
for:
|
●
|
a proposed
year-end bonus, if any, based on the achievement of individual and/or corporate objectives;
|
|
|
|
|
●
|
a proposed
increase, if any, in base salary and target annual incentive opportunity for the upcoming year; and
|
|
|
|
|
●
|
an award,
if any, of stock options or stock awards for the year under review.
|
As part of the compensation review,
our Compensation Committee also considers changes to a named executive officer’s employment agreement, compensation arrangements,
responsibilities or severance arrangements.
In accordance with NYSE American
requirements, the Compensation Committee also meets in an executive session without the Chief Executive Officer to consider and make
recommendations to our Board of Directors regarding the Chief Executive Officer’s compensation, including base salary, cash bonus
and year-end annual stock options. The Compensation Committee also grants year-end stock options to other named executive officers based
on, among other factors, recommendations by our Chief Executive Officer.
In conjunction with the year-end
annual compensation review, or as soon as practicable after the fiscal year-end, our Chief Executive Officer recommends to the Compensation
Committee the corporate objectives and other criteria to be utilized for purposes of determining cash bonuses (i) for each named executive
officer for the upcoming year (in accordance with that named executive officer’s employment agreement), and (ii) for all other
employees as a group. The Compensation Committee in its discretion may revise our Chief Executive Officer’s recommendations or
make its own recommendations to our Board of Directors, which may in turn suggest further revisions. At the end of the year, the Compensation
Committee, in consultation with our Chief Executive Officer, reviews performance and determines the extent to which any established goals
were achieved.
Setting Compensation for Named Executive Officers
- Compensation Committee, Board of Directors and Chief Executive Officer
The Compensation Committee of
our Board of Directors has the primary responsibility for determining compensation of our named executive officers. Our Compensation
Committee recommends the compensation of our Chief Executive Officer and determines all compensation matters for our named executive
officers, including base salary, bonuses, and equity compensation. Our Board of Directors, after considering the recommendations of the
Compensation Committee, makes the final determination with respect to the compensation of our Chief Executive Officer. Utilizing input
from our Chief Executive Officer, the Compensation Committee makes an independent decision on compensation for each other named executive
officers, although our Compensation Committee has, on occasion, submitted its compensation determinations for named executive officers
to our full Board of Directors for its approval.
Role of Compensation Consultant
Our Compensation Committee is
authorized to engage a compensation consultant or other advisors to review our executive officers’ compensation, including a benchmarking
analysis against the compensation of executive officers at comparable companies, to ensure that our compensation is market competitive,
with the goal of retaining and adequately motivating our senior management. In March 2019 and January of 2020, our Compensation Committee
retained Korn Ferry as a compensation consultant (“Korn Ferry”) to assess our current compensation programs and provide recommendations
for continued improved alignment of the programs with our compensation philosophy and goals and to review and make recommendations regarding
our executive and director compensation for 2019 and 2020.
Our Compensation Committee regularly
evaluates the performance of its compensation consultant, considers alternative compensation consultants, and has the final authority
to engage and terminate such services. The Compensation Committee has assessed the independence of Korn Ferry pursuant to SEC rules and
the applicable listing standards of the NYSE American and concluded that no conflict of interest exists that would prevent Korn Ferry
from serving as an independent consultant to our Compensation Committee.
During 2019 and 2020, Korn Ferry
attended meetings of our Compensation Committee (both with and without management present) and provided the following services:
|
●
|
consulting
with the Compensation Committee chair and other members between committee meetings;
|
|
|
|
|
●
|
establishing
a compensation comparator peer group for use when making compensation decisions;
|
|
|
|
|
●
|
providing
competitive market data based on the compensation peer group for our executive officer positions and evaluating how the compensation
we pay our executive officers compares both to our performance and to how the companies in our compensation peer group compensate
their executives;
|
|
|
|
|
●
|
reviewing
and analyzing the base salary levels, annual cash bonus opportunities, and equity incentive compensation opportunities of our executive
officers;
|
|
|
|
|
●
|
assessing
executive compensation trends within our industry, and updating on corporate governance and regulatory issues and developments;
|
|
|
|
|
●
|
reviewing
market equity compensation practices, including burn rate and overhang, and advising on the mix of equity award types; and
|
|
|
|
|
●
|
providing
competitive market data based on the compensation peer group for the non-employee members of our Board and evaluating the compensation
we pay to our non-employee directors.
|
Benchmarking in the Context of Our Other Executive
Compensation Principles
Our Compensation Committee reviews
the compensation of similarly-situated executive officers at companies that we consider to be our peers, taking into consideration the
experience, position and functional role, level of responsibility and uniqueness of applicable skills of both our executive officers
and those of our peers, and the demand and competitiveness for attracting and retaining an individual with each executive officer’s
specific expertise and experience. While this analysis is helpful in determining market-competitive compensation for senior management,
it is only one factor in determining our executive officers’ compensation, and our Compensation Committee exercises its judgment
in determining the nature and extent of its use.
For purposes of comparing our
executive compensation against the competitive market, our Compensation Committee reviews and considers the compensation levels and practices
of a group of comparable biotechnology companies. The companies in this compensation peer group for 2019 and 2020 were selected by our
Compensation Committee in March 2019 and reviewed in January 2020, in consultation with Korn Ferry, on the basis of their similarity
to us in terms of size, market capitalization, stage of development, research and development spend, industry sector, business strategy,
and number of employees.
To analyze the compensation practices
of the companies in our compensation peer group, Korn Ferry gathered data from public filings (primarily proxy statements) and from other
sources. This market data was then used as a reference point for our Compensation Committee to assess our current compensation levels
in the course of its deliberations on forms and amounts of compensation. Given our objective of attracting, retaining, motivating, and
rewarding a highly-skilled team of executive officers and other employees, we aim to deliver a total compensation package that is within
a competitive range around the median as compared to peers, with an emphasis on equity incentive compensation so as to more effectively
tie our named executive officers and employees’ interests to those of our shareholders. In light of this, when undertaking its
competitive analysis, our Compensation Committee reviews data pertaining to the 25th, 50th and 75th percentiles for base salary, total
cash compensation (base salary plus annual bonus) and equity compensation. This competitive analysis is one factor, among others, taken
into account by our Compensation Committee in assessing current compensation levels and recommending changes to compensation or additional
awards of equity. Our Compensation Committee expects to review our compensation peer group at least annually and make adjustments to
its composition, taking into account changes in both our business and the businesses of the companies in the peer group.
Our Compensation Committee believes
that, given the competitiveness of our industry and our Company culture, our base compensation, annual cash bonuses and equity programs
are flexible enough to reward the achievement of clearly defined corporate goals and are sufficient to retain our existing executive
officers and to hire new executive officers with the appropriate qualifications and experience.
Elements of Named Executive Compensation
For 2020, the principal components of compensation
for our named executive officers consisted of:
|
●
|
Annual
base salary;
|
|
|
|
|
●
|
Annual
bonus incentives; and
|
|
|
|
|
●
|
Equity
Incentive Awards/Option Awards.
|
Annual Base Salary
We provide our named executive
officers with base salary to compensate them for services rendered during the year. Generally, the base salaries reflect the experience,
skills, knowledge and responsibilities required of each executive officer, and reflect our executive officers’ overall performance
and contributions to our business.
During its review of base salaries
for executives, the Compensation Committee primarily considers:
|
●
|
the negotiated terms of
each named executive officer’s employment agreement, if any;
|
|
|
|
|
●
|
an internal review of the
named executive officer’s compensation, both individually and relative to other named executive officers; and
|
|
|
|
|
●
|
base salaries paid by comparable
companies in the biopharmaceutical industry that have a similar business and financial profile.
|
Salary levels are considered
annually as part of the company’s performance review process. Merit-based increases to salaries are based on management’s
assessment of the individual’s performance, the recommendations made by the Chief Executive Officer to the Compensation Committee,
and the comparative compensation at peer companies. The factors used in determining increases in base salary include individual performance,
changes in role and/or responsibility and changes in the competitive market environment. The Compensation Committee periodically reviews
the base salary for each executive officer.
Annual Incentive Bonuses
We provide an opportunity for
each of our named executive officers to receive an annual incentive bonus based on the satisfaction of individual and company objectives
established by our Board of Directors, or if no objectives are established at the discretion of the Committee. These incentives are paid
in cash. For any given year, these objectives may include individualized goals or company-wide goals that relate to operational, strategic
or financial factors such as progress in developing our product candidates, achieving certain manufacturing, intellectual property, clinical
and regulatory objectives, and raising certain levels of capital.
2020 Bonus Plan
The Company established performance-based
bonus targets for its named executive officers in 2020 (the “2020 Bonus Plan”). The percentages were weighted for purposes
of determining bonuses, if any, for the Company’s executive officers with respect to 2020 performance. Under such cash bonus program,
Dr. Joslyn, Mr. Sullivan, and Dr. Handfield were eligible for cash bonuses of up to 50%, 35% and 25% of their respective base salaries,
or $183,750, $80,483, and $51,345 respectively, (each a “Bonus Target”).
The bonuses payable to Dr. Joslyn
were to be based upon the achievement of the following objectives:
(i) Up to 60% of the
Bonus Target for objectives related to AG013 clinical trials and development strategy;
(ii) Up to 25% of
the Bonus Target for financial performance objectives relating to the Company raising capital; and
(iii) Up to 15% of
the Bonus Target for administrative and management matters.
The bonuses payable to Mr. Sullivan
were to be based upon the achievement of the following objectives:
(i) Up to 80% of the
Bonus Target for financial performance objectives including the Company’s raising capital, budgeting and regulatory compliance;
(ii) Up to 10% of
the Bonus Target for initiatives regarding Company development opportunities; and
(iii) Up to 10% of
the Bonus Target for administrative and management matters.
The bonuses payable to Dr. Handfield
were to be based upon the achievement of the following objectives:
(i) Up to 50% of the
Bonus Target for objectives related to lantibiotic program developments, including toxicology study and manufacturing;
(ii) Up to 25% of
the Bonus Target for strategic initiatives on collaboration development opportunities including diligence; and
(iii) Up to 20% of
the Bonus Target for financial performance objectives relating to grant funding; and
(iv) Up to 5% of the
Bonus Target for administrative and management matters.
The executive officers’
actual bonuses for fiscal year 2020 were eligible to exceed 100% of their 2020 Bonus Target percentage in the event performance exceeded
the predetermined goals and/or upon the achievement of other specified goals, including stretch goals. Payment of bonuses to the Company’s
executive officers under the 2020 Bonus Plan and the actual amount of such bonus, if any, were subject to the discretion of the Committee.
Equity Incentive Compensation
We believe that successful long-term
corporate performance is more likely to be achieved with a corporate culture that encourages a long-term focus by our named executive
officers and other employees through the use of equity awards, the value of which depends on our stock performance. We established our
2012 Equity Incentive Plan, as amended to provide all of our employees, including our named executive officers, with incentives to help
align our employees’ interests with the interests of our shareholders and to enable them to participate in the long-term appreciation
of our shareholder value. Additionally, equity awards provide an important retention tool for all employees, as the awards generally
are subject to vesting over an extended period of time based on continued service with us.
We typically grant equity awards
in connection with hiring a new employee. In addition, equity awards may also be granted for performance annually at, or soon after,
the end of each year, depending on position, performance and tenure at the Company.
The determination of whether
to grant stock options, as well as the size of such grants, to our named executive officers involves assessments by the Compensation
Committee and our Board of Directors and, with respect to named executive officers other than himself, our Chief Executive Officer. Generally,
annual equity awards are driven by our desire to retain and motivate our named executive officers, and we consider individual performance
and contributions during the preceding year to the extent the Compensation Committee and our Board of Directors believe such factors
are relevant. As with base salary and cash bonuses, in evaluating and determining stock option grants to our named executive officers,
the Compensation Committee and our Board of Directors also considers publicly available data prepared by Korn Ferry at the request of
the Compensation Committee from other similar clinical stage companies identified by the Compensation Committee.
We currently grant stock options
or stock awards to new employees when they join our Company based upon their position with us and their relevant prior experience. The
range of options that can be granted to employees is prescribed in a schedule based on employee’s title and position. The awards
granted by the Compensation Committee generally vest over time during the ten-year option term (although some previously granted awards
vest immediately), or upon the achievement of certain milestones. Unless otherwise agreed to by us with respect to a termination without
“cause” or for “good reason,” vesting and exercise rights generally cease upon termination of employment, except
in the case of death (subject to a one-year limitation), disability or retirement. Prior to the exercise of an option, the holder has
no rights as a shareholder with respect to the shares subject to such option, including voting rights or the right to receive dividends
or dividend equivalents. In addition to the initial option grants, our Compensation Committee may grant additional options to retain
our employees and reward, or provide incentive for, the achievement of corporate goals and strong individual performance. Our Board of
Directors has not granted our Chief Executive Officer the discretion to grant options to non-executive employees upon joining our Company,
or to make grants during each annual non-executive employee review cycle.
It is our policy to award stock
options at an exercise price equal to the closing price on the NYSE American Market of our Common Stock on the date of the grant. For
purposes of determining the exercise price of stock options, the grant date is deemed to be the later of the first day of employment
for newly hired employees, or the date on which the Compensation Committee approves the stock option grant.
We have no program, practice
or plan to grant stock options, in coordination with the release of material nonpublic information. We also have not timed the release
of material nonpublic information for the purpose of affecting the value of stock options or other compensation, and we have no plan
to do so. We do, however, have a policy regarding the adjustment or recovery of stock option awards in connection with the restatement
of our financial statements, as our stock option awards have not been tied to the achievement of specific financial statement goals.
Other Compensation
Other aspects of compensation
applicable to our named executive officers consist of the following:
Retirement Benefits. We
maintain a Simple Individual Retirement Arrangement plan in which all full-time employees, including our named executive officers, are
eligible to participate. We provide this plan to help its employees save some amount of their cash compensation for retirement in a tax
efficient manner. We do not provide an option for its employees to invest in our stock under the 401k plan. We match 100% of the employee’s
contribution up to a maximum of 3% of the employee’s compensation.
Health and Welfare Benefits.
All full-time employees, including our named executive officers, may participate in our health and welfare benefit programs, including
medical, dental and vision care coverage as may be provided and applicable to all employees.
Perquisites. We do not
provide perquisites or other personal benefits to our named executive officers other than those that we provide to our employees.
Employment Agreements. During
2020, we had employment agreements in effect with Dr. Alan Joslyn, Mr. Michael Sullivan, and Dr. Martin Handfield. We entered into employment
agreements with these officers to ensure that they would perform their respective roles with us for an extended period of time. In addition,
we also considered the critical nature of each of their positions and our need to retain them when we committed to these agreements.
In June 2020, we amended Dr. Joslyn’s agreement to extend the term for a two-year period. See “Employment Contracts and Change
in Control Arrangements.”
2020 Named Executive Officer Compensation Decisions
We believe that the total compensation
paid to our named executive officers for the fiscal year ended December 31, 2020 achieved the overall objectives of our executive compensation
program. In accordance with our overall objectives, we believe executive compensation for 2020 was competitive with other similarly-sized
companies. The Compensation Committee took the following key compensation actions in 2020:
Base Salaries
During 2020, we made no changes
in the annual base salaries of our named executive officers.
Determination of Cash Bonus-2020:
We made performance-based cash
bonus awards pursuant to the terms of the 2020 Bonus Plan to Dr. Joslyn, Mr. Sullivan, and Dr. Handfield of $137,813, $60,361, and $38,509,
respectively, based upon their performance during 2020. These performance-based cash bonus awards were made in January of 2021.
Determination of Equity Awards:
We made stock option grants to
Dr. Joslyn, Mr. Sullivan, and Dr. Handfield, under the Company’s 2012 Equity Incentive Plan consisting of (i) an annual grant (“Annual
Award”); and (ii) a retention grant (the “Retention Award”). Dr. Joslyn, Mr. Sullivan, and Dr. Handfield, received
Annual Awards which vested immediately on the date of grant to purchase 400,000, 250,000 and 220,000 shares of Company Common Stock,
respectively, at an exercise price of $0.48 per share, the closing price of the Company’s Common Stock on the grant date, February
5, 2020. Each of these officers also received a separate Retention Award which is subject to time-based vesting in equal annual installments
over a three-year period on the first, second and third anniversaries of the date of grant, to purchase 400,000, 250,000 and 220,000
shares of Company Common Stock, respectively, at an exercise price of $0.48 per share, the closing price of the Company’s Common
Stock on the grant date, February 5, 2020. The stock option awards are subject to the standard terms and conditions of the Company’s
form of stock option agreement which includes, as applicable, earlier vesting upon a change in control of the Company.
Summary Compensation Table
The following table sets forth the aggregate compensation
in 2020 and 2019 for services in all capacities paid or accrued by the Company to Dr. Alan Joslyn, our former President and Chief Executive
Officer, Mr. Michael Sullivan, our Chief Financial Officer and Interim Principal Executive Officer and our next most highly compensated
officers who earned more than $100,000 in total salary and bonus during the fiscal year ended December 31, 2020 (the “Named Executive
Officers”).
Name
and principal position
|
|
|
Year
|
|
|
|
Salary
|
|
|
|
Bonus(2)
|
|
|
|
Stock
Awards (3)
|
|
|
|
Option
Awards (3)
|
|
|
|
All Other
Compensation (4)
|
|
|
|
Total
|
|
Michael O. Sullivan
|
|
|
2020
|
|
|
$
|
229,950
|
|
|
$
|
60,361
|
|
|
$
|
—
|
|
|
$
|
235,000
|
|
|
$
|
6,899
|
|
|
$
|
532,210
|
|
Chief Financial Officer
and Interim Principal Executive Officer (1)
|
|
|
2019
|
|
|
$
|
229,950
|
|
|
$
|
76,458
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,899
|
|
|
$
|
313,307
|
|
Dr. Martin Handfield
|
|
|
2020
|
|
|
$
|
205,380
|
|
|
$
|
38,509
|
|
|
$
|
—
|
|
|
$
|
206,800
|
|
|
$
|
6,162
|
|
|
$
|
456,851
|
|
Senior Vice President Discovery
Research
|
|
|
2019
|
|
|
$
|
205,380
|
|
|
$
|
33,374
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,162
|
|
|
$
|
244,916
|
|
Dr. Alan Joslyn
|
|
|
2020
|
|
|
$
|
367,500
|
|
|
$
|
137,813
|
|
|
$
|
—
|
|
|
$
|
376,000
|
|
|
$
|
21,326
|
|
|
$
|
902,639
|
|
(former President
and Chief Executive Officer)
|
|
|
2019
|
|
|
$
|
367,500
|
|
|
$
|
87,282
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,612
|
|
|
$
|
488,394
|
|
(1)
|
Dr. Joslyn
resigned from his position with us as President and Chief Executive Officer on May 2, 2021. Mr. Sullivan was appointed as our Interim
Principal Executive Officer.
|
(2)
|
The amounts
in this column for 2020 represent a performance-based cash bonus award made pursuant to the terms of the 2020 Bonus Plan which was
earned in 2020 and paid in early January 2021.
|
(3)
|
The amounts
in this column represent the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting
Standards Codification, Topic 718, Compensation—Stock Compensation (ASC 718). On February 5, 2020, Dr. Joslyn, our former President
and Chief Executive Officer, Mr. Sullivan, and Dr. Handfield were awarded stock options, under the Company’s 2012 Equity Incentive
Plan consisting of (i) an annual grant (“Annual Award”); and (ii) a retention grant (the “Retention Award”).
Dr. Joslyn, Mr. Sullivan, and Dr. Handfield, received Annual Awards which vested immediately on the date of grant to purchase 400,000,
250,000 and 220,000 shares of Company Common Stock, respectively, at an exercise price of $0.48 per share, the closing price of the
Company’s Common Stock on the grant date, February 5, 2020. Each of these officers also received a separate Retention Award
which is subject to time-based vesting in equal annual installments over a three-year period on the first, second and third anniversaries
of the date of grant, to purchase 400,000, 250,000 and 220,000 shares of Company Common Stock, respectively, at an exercise price
of $0.48 per share, the closing price of the Company’s Common Stock on the grant date, February 5, 2020. The stock option awards
are subject to the standard terms and conditions of the Company’s form of stock option agreement which includes, as applicable,
earlier vesting upon a change in control of the Company. Under Securities and Exchange Commission rules relating to executive compensation
disclosure, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Fair values
relating to share grants have been determined under ASC 718 and were calculated using the Common Stock closing price on the date
of grant and multiplying that price by the number of shares subject to the share grant. The equity-based compensation expense relating
to the stock grants is recognized over the requisite service period of the grant. For option awards, we utilize the Black-Scholes
option pricing model to determine the fair value on the date of the grant multiplied by the number of options subject to the option
grants in accordance with ASC 718. The stock-based compensation expense relating to the stock option grants is recognized over the
requisite service period of the grant and the amounts included in the Option Awards column do not reflect compensation actually received
by the named executive officers. For information on the assumptions used to calculate the fair value of stock option grants, refer
to Note 8 - “Stock Compensation Plan” in our financial statements for the year ended December 31, 2020.
|
(4)
|
Amounts
in this column for Dr. Joslyn, Mr. Sullivan and Dr. Handfield represent the Company’s matching contributions to our Simple
IRA retirement plan. The retirement plan requires us to match employee contributions up to the first 3% of compensation earned. For
Dr. Joslyn, the amount reflected also includes $10,301, which represents amounts reimbursed by the Company for Dr. Joslyn’s
expense in commuting to the Company’s headquarters in Tampa, Florida. Such reimbursement amount is included in Dr. Joslyn’s
compensation.
|
The Compensation Committee believes
that our future success depends, in large part, upon our ability to maintain a competitive position in attracting, retaining and motivating
key personnel. The Compensation Committee utilizes the 2012 Equity Incentive Plan to provide incentives to employees. We do not have
any separate long-term incentive plans that provide compensation intended to serve as incentives for performance other than awards contemplated
under, or pursuant to, our 2012 Equity Incentive Plan.
Outstanding Equity Awards
The following table provides information concerning
unexercised options outstanding as of December 31, 2020:
Name
|
|
Number
of securities underlying unexercised options (#) exercisable
|
|
|
Number
of securities underlying unexercised options (#) unexercisable
|
|
|
Option
exercise price ($)
|
|
|
Option
expiration date
|
Michael O. Sullivan
|
|
|
250,000
|
|
|
|
250,000
|
(1)
|
|
|
0.48
|
|
|
2/5/2030
|
Chief Financial Officer
|
|
|
250,000
|
|
|
|
|
|
|
|
0.73
|
|
|
9/27/2028
|
|
|
|
18,000
|
|
|
|
|
|
|
|
1.52
|
|
|
6/22/2028
|
|
|
|
17,500
|
|
|
|
|
|
|
|
3.70
|
|
|
6/22/2027
|
|
|
|
20,000
|
|
|
|
|
|
|
|
13.20
|
|
|
3/16/2025
|
|
|
|
4,000
|
|
|
|
|
|
|
|
8.80
|
|
|
12/8/2024
|
|
|
|
2,500
|
|
|
|
|
|
|
|
8.60
|
|
|
10/30/2024
|
|
|
|
4,500
|
|
|
|
|
|
|
|
12.00
|
|
|
2/10/2022
|
Dr. Martin Handfield
|
|
|
220,000
|
|
|
|
220,000
|
(1)
|
|
|
0.48
|
|
|
2/5/2030
|
Senior Vice President of
Discovery Research
|
|
|
220,000
|
|
|
|
|
|
|
|
0.73
|
|
|
9/27/2028
|
|
|
|
16,000
|
|
|
|
|
|
|
|
1.52
|
|
|
6/22/2028
|
|
|
|
14,000
|
|
|
|
|
|
|
|
3.70
|
|
|
6/27/2027
|
|
|
|
15,000
|
|
|
|
|
|
|
|
13.20
|
|
|
3/16/2025
|
|
|
|
4,000
|
|
|
|
|
|
|
|
8.80
|
|
|
12/8/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr. Alan Joslyn
|
|
|
400,000
|
|
|
|
400,000
|
(1)
|
|
|
0.48
|
|
|
2/5/2030
|
(Former President and Chief
Executive Officer)
|
|
|
400,000
|
|
|
|
|
|
|
|
0.73
|
|
|
9/27/2028
|
|
|
|
28,000
|
|
|
|
|
|
|
|
1.52
|
|
|
6/22/2028
|
|
|
|
14,000
|
|
|
|
|
|
|
|
3.70
|
|
|
6/22/2027
|
|
|
|
30,000
|
|
|
|
|
|
|
|
5.50
|
|
|
6/6/2026
|
(1)
|
Represents
awards that are time vested with each award vesting evenly on an annual basis over three years, subject to earlier vesting upon a
change in control as defined in the award agreements.
|
Other Policies and Considerations - Employment
Contracts and Change in Control Arrangements
Employment Agreements—Mr. Sullivan and Dr.
Handfield
We have entered into employment
agreements with our Chief Financial Officer, Mr. Michael Sullivan and Dr. Martin Handfield, our Senior Vice-President of Research and
Development (the “Employment Agreements”). The annual base salaries provided in the Employment Agreements are payable in
installments consistent with our normal payroll practices. Mr. Sullivan and Dr. Handfield are also eligible under the Employment Agreements
to receive annual bonuses during the term at the discretion of the Compensation Committee and the Board of Directors with Mr. Sullivan’s
Employment Agreement providing for such a discretionary bonus of up to 35% of his base salary and with Dr. Handfield’s Employment
Agreement providing for a discretionary bonus component, which the Compensation Committee has set as up to 25% of his base salary.
The Employment Agreements are
terminable at any time by either party and if the executive officer is involuntarily terminated by us, he shall receive his base salary
and vacation pay each accrued through the date of termination, and any nonforfeitable benefits earned and payable to him under the terms
of the employee handbook (which applies to all employees) and benefits available under any applicable incentive plan in which the executive
participates. In addition, if the executive officer’s separation from employment is not voluntary and without cause, we would be
obligated to pay the executive officer six months of his annual base salary as severance and the executive shall be entitled to out placement
services. If the executive officer is terminated for cause, he shall be entitled to receive his base salary and accrued vacation due
through the date of termination and any nonforfeitable benefits already earned and payable to the executive under the terms of the employee
handbook or other applicable incentive plans maintained by us. Cause is defined in the Employment Agreements as any action that is illegal,
immoral, or improper that reflects on the Company, the employee, or the ability of either to function optimally. If the executive officer
voluntarily resigns, he shall be entitled to this base salary and accrued vacation due through the date of termination (including any
mutually agreed upon notice period) and any nonforfeitable benefits already earned and payable to the executive officer employee under
the terms of the employee handbook or other incentive plans maintained by us.
If the executive officer dies
during the term of employment with us, his estate shall be paid his salary as it would have accrued over a period of thirty days after
the executive officer’s death. We shall also extend the executive officer’s right to exercise vested stock options for six
months. In the event the executive officer becomes disabled (as defined in the then applicable short and long-term disability insurance
policies) we shall pay to the executive officer his salary as it would have accrued over a period of 30 days after the executive became
so disabled and we shall extend the executive officer’s right to exercise vested stock options for six months.
The Employment Agreements also
each include non-disclosure and Company ownership of invention provisions, as well as a provision providing for the Company to defend
and indemnify the executive if the executive is named as a defendant in any lawsuit regarding any action taken within the scope of employment.
In the event of a change in control, any stock options or other awards granted (other than performance awards) under our 2012 Incentive
Plan shall become immediately vested in full and, in the case of stock options, exercisable in full. If the change in control results
in an involuntary separation from employment of the executive officer within 180 days following a change in control, the executive officer
would be entitled to (i) receive six months of salary and the extension of his benefits (excluding vacation time and paid time off) and
(ii) exercise vested options for six months from the date of separation. Under the Employment Agreements, “involuntary separation
of employment” means (i) termination without cause, (ii) any reduction in responsibilities of office altering the status of the
executive officer as an employee, or (iii) the duplication of the executive officer’s position by an equivalent executive in an
acquiring entity; and “change in control” means the sale of the entire company, or substantially all of its assets, or the
sale of the business unit employing an individual which results in the termination of employment or subsequent transfer of the employment
relationship to another legal entity, or entity, or single party acquiring more shares than are owned by the Koski Family Limited Partnership,
including its members and their immediate families, including spouses and their children.
On February 20, 2015, we entered
into an amended and restated employment agreement, effective January 1, 2015, with Mr. Sullivan (the “A&R Employment Agreement”).
The terms of Mr. Sullivan’s A&R Employment Agreement were substantially similar to those of the previous agreement disclosed
above except for:
|
1.
|
The percentage
of base salary eligible for bonus awards was set as previously disclosed for Mr. Sullivan at up to 35% of base salary.
|
|
|
|
|
2.
|
A provision
was added in Mr. Sullivan’s agreement to provide for the clawback of bonuses pursuant to the Board’s adoption of a clawback
policy. In the A&R Employment Agreement Mr. Sullivan acknowledges and agrees that any incentive-based compensation paid to him
will be subject to clawback or repayment to the extent such clawback or repayment is required by the terms of the Company’s
recoupment, clawback or similar policy as may be in effect from time to time, or as required by law.
|
|
3.
|
A provision was added whereby
Mr. Sullivan would be required to release the Company as a condition to receiving any severance benefit provided by his A&R Employment
Agreement with the form of release added and attached as an exhibit to his A&R Employment Agreement.
|
|
|
|
|
4.
|
The definition of a change
of control in the prior agreement was revised to align it with the definition of a change in control set forth in the Company’s
2012 Incentive Plan as follows:
|
|
(i)
|
Any “person”
(as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”))
becomes the “beneficial owner” (as defined in Rule 13d 3 of the Exchange Act), directly or indirectly, of securities
of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding
voting securities;
|
|
|
|
|
(ii)
|
The consummation
of the sale or disposition by the Company of all or substantially all of the Company’s assets;
|
|
|
|
|
(iii)
|
A change
in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of the directors are
Incumbent Directors. “Incumbent Directors” means directors who either (A) are Directors as of the effective date of this
Agreement, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Directors
at the time of such election or nomination (but will not include an individual whose election or nomination is in connection with
an actual or threatened proxy contest relating to the election of directors to the Company); or
|
|
|
|
|
(iv)
|
The consummation
of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such
merger or consolidation.
|
Employment Agreement—Former President and
Chief Executive Officer, Dr. Joslyn
Dr. Joslyn resigned as our President
and Chief Executive Officer on May 2, 2021 and the Company entered into a separation and release agreement with Dr. Joslyn, which provided
for payments to Dr. Joslyn substantially in accordance with his Employment Agreement with us.
We entered into an Executive
Employment Agreement dated as of June 6, 2016, with Dr. Alan Joslyn pursuant to which Dr. Joslyn served as our President and Chief Executive.
The employment term was a one-year term with an automatic 12-month extension thereafter unless either party provides the other 30 days’
prior written notice of its intention not to renew the employment agreement.
Dr. Joslyn received a one-time
signing bonus of $25,000 upon execution of the employment agreement and is currently entitled to receive an annual base salary of $350,000
which is subject to annual review and adjustment by the Company’s Board of Directors. He is eligible to receive annual performance
bonus from the Company of up to fifty percent (50%) of his annual base salary based upon appropriate Company-based and individual-based
targets specified by the Compensation Committee of the Board, in its discretion, as approved by the full Board of Directors. Dr. Joslyn
is also entitled to participate in our employee benefit plans on terms comparable to other full-time employees as well as four weeks
paid vacation annually.
The employment agreement also
provided for Dr. Joslyn to be granted equity awards under the Company’s 2012 Incentive Plan consisting of (i) stock options to
purchase 30,000 shares of the Company’s Common Stock at an exercise price equal to $5.50 per share which stock options shall vest
is six installments of 5,000 shares each every six months after June 6, 2016, provided that he has continued his employment with the
Company through such dates, and (ii) 3,000 shares of restricted stock of the Company, vesting in two installments on the six month and
twelve month anniversaries of June 6, 2016. All of the performance bonuses, as well as any equity awards which are granted to Dr. Joslyn
or which become vested as a result of the satisfaction of financial performance goals of the Company, are subject to the Company’s
policy on recoupment or clawback of executive incentive compensation.
Dr. Joslyn is subject to a covenant
not to disclose our confidential information during his employment term and an assignment of intellectual property rights. Also, during
his employment term and for a period of 12 months thereafter, Dr. Joslyn covenants not to compete with us and not to solicit any of our
customers, vendors or employees. If Dr. Joslyn breaches any of these covenants, the Company will be entitled to injunctive relief.
If Dr. Joslyn’s employment
is terminated by us for Cause (as defined in his employment agreement) or by Dr. Joslyn during the term of the agreement, he will be
entitled to receive his (i) his then-current annual base salary through the date of termination; (ii) any reimbursable expenses for which
he has not yet been reimbursed as of the date of termination; and (iii) any other rights and vested benefits (if any) provided under
employee benefit plans and programs of the Company, determined in accordance with the applicable terms and provisions of such plans and
programs (“Accrued Compensation”).
If Dr. Joslyn’s employment
is terminated by us without “Cause”, subject to his execution of a release of claims against us, and in addition to the payment
of the Accrued Compensation, the Company is obligated to make payments to Dr. Joslyn within 60 days after his termination date equal
to six months of his annual base salary, as in effect at the termination date, plus any earned but unpaid bonus (the “Additional
Severance Payments”).
The employment agreement also
contains change of control provisions providing that if Dr. Joslyn’s employment with the Company is terminated by the Company without
Cause during the period of ninety (90) days following a Change in Control (as that term is defined below) of the Company, in lieu of
the Additional Severance Payments described above, Dr. Joslyn will be entitled to receive a severance payment equal to the sum of (i)
six (6) months of his annual base salary, at the higher of the base salary rate in effect on the date of termination or the base salary
rate in effect immediately before the effective date of the Change of Control, and (ii) his Performance Bonus for the year which includes
the effective date of the Change in Control, payable at the target level of performance, which will be paid in a single lump sum after
his execution and non-revocation of the Release. In addition, he will also receive in the same payment the amount of any performance
bonus that, as of the date of termination, has been earned by Dr. Joslyn but has not yet been paid by the Company. If Dr. Joslyn holds
any stock options or other stock awards granted under the Company’s 2012 Incentive Plan which are not fully vested at the time
his employment with the Company is terminated by the Company without Cause during the period of ninety (90) days following a Change in
Control, such equity awards shall become fully vested as of the termination date. For purposes of the employment agreement, the term
“Change in Control” means a transaction or series of transactions which constitutes a sale of control of the Company, a change
in effective control of the Company, or a sale of all or substantially all of the assets of the Company, or a transaction which qualifies
as a “change in ownership” or “change in effective control” of the Company or a “change in ownership of
substantially all of the assets” of the Company under the standards set forth in Treasury Regulation section 1.409A-3(i)(5).
Dr. Joslyn’s employment
agreement also provided that each of the payments and benefits under the agreement are subject to compliance with Section 409A of the
Code and it includes time of payment language intended to comply with Section 409A requirements.
Amendments to Dr. Joslyn’s Employment Agreement
On June 8, 2018, we entered into
an amendment to Dr. Joslyn’s employment agreement which extended the term of his agreement to June 6, 2020. All other terms of
his employment agreement remained in full force and effect. On June 5, 2020, we entered into a second amendment that extended the term
for another two years.
Tax and Accounting Implications
Deductibility of Executive Compensation
The Compensation Committee takes
into consideration the tax consequences of compensation to the named executive officers, but tax considerations are not a significant
part of our Company’s compensation policy.
Accounting for Share-Based Compensation
We account for share-based compensation
in accordance with the requirements of FASB ASC Topic 718. This accounting treatment has not significantly affected our executive compensation
decisions.
Clawbacks
In order to further align management’s
interests with those of shareholders and to support the Company’s governance practices, the Board of Directors adopted a recoupment
policy applicable to annual bonuses and other short-term and long-term incentive compensation based on financial targets (“Incentive
Compensation”) received by current and former executive officers of the Company and such other senior executives/employees of the
Company who may from time to time be deemed subject to the policy by the Board of Directors (“Covered Executive”). The policy
provides that if, as a result of a restatement of the Company’s financial statements due to the Company’s material noncompliance
with any financial reporting requirement under the securities laws, a Covered Executive received more Incentive Compensation than the
Covered Executive would have received absent the incorrect financial statements, the Company shall recover said excess Incentive Compensation
(defined as the excess of (i) the actual amount of Incentive Compensation paid to the Covered Executive over (ii) the Incentive Compensation
that would have been paid based on the restated financial results during the three-year period preceding the date on which the Company
is required to prepare such restatement). The policy also provides that if the Board of Directors makes a determination in its sole discretion
that a Covered Executive engaged in Misconduct (as defined below), the Board of Directors may require reimbursement or forfeiture of
all or part of the Incentive Compensation received by the Covered Executive. The Board of Directors may use its judgment in determining
the amount to be recovered. Misconduct is defined as (i) conviction of a felony, (ii) material breach of any agreement with the Company,
(iii) material breach of any Company policy or code, (iv) act of theft, embezzlement or fraud, (v) misrepresentation or misstatement
of financial or performance results, and (vi) any other act or event that the Board of Directors has determined that recoupment is appropriate.
Consideration of Shareholder Advisory Vote on
Executive Compensation
The Compensation Committee also
expects to consider the results of our shareholder advisory vote on executive compensation. At the Company’s previous annual meeting,
our shareholders voted in favor of the compensation of our named executive officers: approximately 95.4% of the shares represented in
person or by proxy having voted in favor of the program. In light of these results, among other factors, the Compensation Committee decided
to substantially continue the executive compensation program in 2020. The Board of Directors determined that shareholder advisory votes
on executive compensation will be submitted to our shareholders annually until the next required advisory vote on the frequency of conducting
advisory votes on executive compensation.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
The following table sets forth
information about beneficial ownership of our Common Stock as of October 1, 2021 (unless otherwise noted) by (i) each shareholder that
has indicated in public filings that the shareholder beneficially owns more than five percent of the Common Stock, (ii) each of the Company’s
directors and named officers and (iii) all directors and officers as a group. Except as otherwise noted, each person listed below, either
alone or together with members of the person’s family sharing the same household, had, to our knowledge, sole voting and investment
power with respect to the shares listed next to the person’s name.
Name
and address(1)
|
|
|
Number of shares
beneficially
owned
|
|
|
|
Percentage of
ownership (2)
|
|
Directors and officers
|
|
|
|
|
|
|
|
|
Dr. Frederick W. Telling (3)
|
|
|
1,388,158
|
|
|
|
1.2
|
%
|
Robert C. Koski (4)
|
|
|
2,382,964
|
|
|
|
2.0
|
%
|
Charles L. Pope (5)
|
|
|
826,728
|
|
|
|
*
|
|
Dr. Alan Dunton (6)
|
|
|
859,881
|
|
|
|
*
|
|
Kimberly Murphy (7)
|
|
|
298,664
|
|
|
|
*
|
|
Michael Sullivan (8)
|
|
|
664,088
|
|
|
|
*
|
|
(All Directors and officers as a group 6 persons)
|
|
|
6,420,483
|
|
|
|
5.3
|
%
|
|
|
|
|
|
|
|
|
|
5% shareholder
|
|
|
|
|
|
|
|
|
Joseph Hernandez (9)
|
|
|
9,200,000
|
|
|
|
7.43
|
%
|
*
|
Beneficial
ownership percentage is less than 1%.
|
|
|
(1)
|
Except
as indicated, the address of the person named in the table is c/o Oragenics, Inc., 4902 Eisenhower Blvd., Suite 125, Tampa, Florida
33634.
|
(2)
|
In computing
the number of shares beneficially owned by a person and the percentage ownership of that person, shares of the Common Stock subject
to options or warrants held by that person that are currently exercisable or will become exercisable within 60 days after October
1, 2021 are deemed outstanding, while the shares are not deemed outstanding for purposes of computing percentage ownership of any
other person. Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have
sole voting and investment power with respect to all shares of the Common Stock held by them. Applicable percentage ownership is
based on [116,194,806] shares of the Common Stock outstanding as of October 1, 2021. The inclusion in the table above of any shares
deemed beneficially owned does not constitute an admission of beneficial ownership of those shares.
|
(3)
|
Includes:
(i) 642,080 shares able to be acquired pursuant to stock options, and (ii) 150,000 shares able to be acquired upon the exercise of
warrants.
|
(4)
|
The share
amounts include: (i) 776,483 shares held by the Koski Family Limited Partnership (“KFLP”) of which Mr. Koski is a general
partner; (ii) 300,000 shares able to be acquired by the KFLP upon conversion of Series B Convertible Preferred Stock; (iii) 241,936
shares able to be acquired by the KFLP upon exercise of warrants; (iv) 212,839 shares owned directly by Mr. Koski; (v) 53,086 shares
owned directly by trusts for which Mr. Koski serves as sole trustee as follows: the Robert Clayton Koski Trust for the benefit of
Anthony James Hunter (10,760 shares); The Robert Clayton Koski Trust for the benefit of Hunter Buchanan Koski (10,760 shares); The
Robert Clayton Koski Trust for the benefit of Clayton Ward Bennett (10,000 shares); and The Robert Clayton Koski Trust for the benefit
of Robert Edward Koski (10,760 shares) and the Robert Clayton Koski Trust for the benefit of Elyse Margaux Koski (10,806 shares);
and (vi) 798,620 shares able to be acquired pursuant to stock options. The address of the KFLP is 3525 Turtle Creek Boulevard #19B,
Dallas, TX 75219.
|
(5)
|
Includes:
798,620 shares able to be acquired pursuant to stock options.
|
(6)
|
Includes:
(i) 798,620 shares able to be acquired pursuant to stock options and (ii) 20,000 shares able to be acquired upon the exercise of
warrants.
|
(7)
|
Includes
298,664 shares able to be acquired pursuant to stock options.
|
(8)
|
Includes:
649,833 shares able to be acquired pursuant to stock options and excludes 416,667 shares subject to options that have not vested.
|
(9)
|
Based
upon information provided by Mr. Hernandez in his Schedule 13D filing with the SEC on January 26, 2021, Mr. Hernandez is the beneficial
owner of 9,200,000 shares of Common Stock issuable upon exercise of warrants that became exercisable on May 1, 2021and are exercisable
at an exercise price of $1.25 per share.
|
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
Securities and Exchange Commission
rules require us to disclose any transaction or currently proposed transaction in which we are a participant and in which any related
person has or will have a direct or indirect material interest involving an amount that exceeds the lesser of $120,000 or one percent
(1%) of the average of the Company’s total assets as of the end of the last two completed fiscal years. A related person is any
executive officer, director, nominee for director, or holder of 5% or more of the Company’s Common Stock, or an immediate family
member of any of those persons.
The Audit Committee of the Board
of Directors (or, to the extent applicable, our disinterested directors) is responsible for reviewing all transactions between the Company
and any officer or Director of the Company or any entity in which an officer of Director has a material interest. Any such transactions
must be on terms no less favorable than those that could be obtained on an arms-length basis from independent third parties.
Financing Transactions
The March 25, 2019 Underwritten Public Offering
On March 25, 2019 we closed on
an underwritten public offering of 16,666,668 shares of our Common stock, par value $0.001 per share (the “Common Stock”),
together with Series 1 Warrants to purchase up to an aggregate of 8,333,334 shares of our Common Stock (the “Series 1 Warrants”)
and Series 2 Warrants to purchase up to an aggregate of 8,333,334 shares of our Common Stock (the “Series 2 Warrants”), at
a price to the public of $0.75 per share and related warrants (the “Public Offering”). We also granted the Underwriter a
30-day option to purchase up to an additional 2,500,000 additional shares of Common Stock (the “Option Shares”) and/or Series
1 Warrants to purchase up to 1,250,000 shares of Common Stock and Series 2 Warrants to purchase up to 1,250,000 shares of Common Stock
(the “Option Warrants”).
Each Series 1 Warrant had an
exercise price of $0.75 per share of Common Stock and expired on the earlier of (1) the eighteen-month anniversary of the date of issuance
and (2) twenty-one trading days following the Company’s release of top-line data related to its Phase 2 double blind, placebo controlled
clinical trial of AG013. Each Series 2 Warrant has an exercise price of $0.90 per share of Common Stock and will expire five years following
the date of issuance.
Dr. Frederick Telling, and our
former Chief Executive Officer, Dr. Alan Joslyn, participated in the Public Offering through the purchase of 100,000 shares and 66,667
shares, respectively, of the Company’s Common Stock and Series 1 warrants to purchase 50,000 shares and 33,333 shares, and Series
2 warrants to purchase 50,000 shares and 33,333 shares respectively, of the Company’s Common Stock. Dr. Telling and Dr. Joslyn’s
participation was approved by our Audit Committee.
Stock Purchase Agreement-Acquisition of Noachis Terra Inc.
On May 1, 2020, we entered into
a Stock Purchase Agreement with Mr. Joseph Hernandez, the sole shareholder of Noachis Terra, pursuant to which we acquired one hundred
percent (100%) of the total issued and outstanding common stock of Noachis Terra (the “Transaction”). In exchange, Mr. Hernandez,
received the following: (i) cash consideration equal to $1,925,000, of which approximately $500,000 was applied to extinguish Noachis
Terra’s pre-Transaction liabilities (a portion of which were due to Mr. Hernandez); (ii) 9,200,000 restricted shares of our Common
Stock; and (iii) warrants to purchase 9,200,000 shares of our Common Stock, which warrants carry an exercise price of $1.25 per share,
a five-year term, and are currently exercisable.
In addition to the above consideration,
Mr. Hernandez was entitled to receive contingent consideration based upon the exercise of certain of our outstanding warrants as follows:
(i) twenty percent (20%) of the cash proceeds received by the Company upon exercise of the Company’s warrants carrying an exercise
price of $0.75 and $0.90; and (ii) forty-five percent (45%) of the cash proceeds received by the Company upon exercise of the Company’s
warrants carrying an exercise price of $1.00, in each case, for so long as the warrants remain outstanding. The warrants with an exercise
price of $0.75 expired on May 14, 2020 pursuant to their terms.
Pursuant to the Stock Purchase
Agreement, within thirty (30) days of the Transaction’s closing, we filed with the Securities and Exchange Commission a registration
statement covering the 9,200,000 shares of the Company’s Common Stock and the warrants to purchase 9,200,000 shares of the Company’s
Common Stock, which was filed on May 29, 2020 and declared effective on June 30, 2020.
November 2020 Public Offering
On November 24, 2020, the Company
announced the closing of an underwritten public offering for gross proceeds of approximately $6.0 million, which included the full exercise
of the underwriter’s over-allotment option to purchase additional shares, prior to deducting underwriting discounts and commissions
and offering expenses payable by the Company.
The offering was comprised of
14,189,189 shares of Common Stock at a price to the public of $0.37 per share. The Company granted the underwriter a 45-day option to
purchase up to 2,128,378 additional shares of Common Stock of the Company at the public offering price, less underwriting discounts and
commissions. The underwriter exercised its option in full to purchase 2,128,378 additional shares of Common Stock, which the indicated
gross proceeds reflect.
Dr. Frederick Telling who is
a Director of the Company, participated in the offering through the purchase of 100,000 shares of the Company’s Common Stock. Dr.
Telling’s participation was approved by the Company’s Audit Committee.
DELINQUENT
SECTION 16(a) REPORTS
Section 16(a) of the Securities
Exchange Act of 1934 requires the Company’s officers and Directors and any persons who beneficially own more than ten percent of
the Company’s Common Stock to file reports of ownership and changes in ownership of such securities with the Securities and Exchange
Commission Officers, Directors and beneficial owners of more than ten percent of the Common Stock are required by applicable regulations
to furnish the Company with copies of all Section 16(a) forms they file. Based solely on its review of copies of forms furnished to the
Company and written representations from the executive officers, Directors and holders of ten percent or more of the Company’s
Common Stock, the Company believes, all person’s subject to the reporting requirements with regard to the Common Stock complied
with the applicable filing requirements during 2020.
OTHER MATTERS
Interim Corporate Mailings
In accordance with National Instrument
54-102 of the Canadian Securities Administrators, registered and beneficial shareholders of the Company may elect annually to receive
interim corporate mailings, including interim financial statements of the Company, if they so request. If you wish to receive such mailings,
please complete the form in Appendix C and mail as instructed on the form.
Availability of Annual Report on Form 10-K
Accompanying this Proxy Statement
is a copy of the Company’s Annual Report on Form 10-K for 2020. Shareholders who would like additional copies of the Annual Report
on Form 10-K should direct their requests in writing to:
Oragenics, Inc.
4902 Eisenhower Blvd., Suite 125
Tampa, Florida 33634
Attention: Michael Sullivan, Secretary.
Miscellaneous
Management does not know of any
matters to be brought before the Annual Meeting of Shareholders other than as described in this Proxy Statement. Should any other matters
properly come before the Annual Meeting of Shareholders, the persons designated as proxies will vote in accordance with their best judgment
on such matters.
BY ORDER OF THE
|
|
BOARD OF DIRECTORS
|
|
|
|
|
|
Michael Sullivan,
|
|
Secretary
|
|
|
|
Tampa, Florida
|
|
October [ ], 2021
|
|
APPENDIX A
ARTICLES OF AMENDMENT TO THE
AMENDED AND RESTATED ARTICLES OF INCORPORATION
ORAGENICS, INC. (QUORUM AMENDMENT)
(Document Number [P96000091949])
Oragenics, Inc. (the “Corporation”),
does hereby certify that the Corporation’s Articles of Incorporation (the “Articles”) originally filed with the Florida
Department of State on November 6, 1996, as amended and restated on May 8, 2002, as further amended by those certain amendments filed
October 28, 2009, September 22, 2010, August 30, 2011, June 2, 2014, January 10, 2017, May 8, 2017, November 8, 2017, December 5, 2017,
December 29, 2017, January 16, 2018, June 22, 2018 and July 13, 2018 are hereby further amended pursuant to Section 607.1006 of the Florida
Business Corporation Act of the State of Florida.
The Corporation does hereby
further certify that this amendment was duly adopted by the Corporation’s Board of Directors and by the shareholders of the Corporation
in accordance with the applicable provisions of Section 607.0725 of the Florida Business Corporation Act of the State of Florida. The
Corporation’s Board of Directors adopted this amendment on September [ ], 2021 and recommended that this amendment be adopted by
the Corporation’s shareholders. This amendment was adopted by the shareholders on [ ], 2021 and the number of votes cast for the
amendment by the shareholders was sufficient for approval. This amendment shall become effective on [ ] at 12:01 p.m.
As it presently stands, the
Articles are silent as to either greater or lesser quorum requirements for shareholders; thus, the Company’s current quorum requirement
is a majority of the votes entitled to be case on the matter by the voting group constitutes a quorum of that voting group for action
on that matter. In compliance with Florida Statute 607.0725(5), a lesser quorum requirement for shareholders may be added to the Articles
through an amendment so long as it is not less than one-third.
The Amended and Restated Articles
of Incorporation of the Corporation, as amended, are amended to add the following provision:
“Shareholder Quorum
and Voting. One-third of the shares entitled to be cast, represented in person or by proxy, shall constitute a quorum at a meeting
of shareholders. When a specified item of business is required to be voted on by a class or series of stock, one-third of the shares
of such class or series shall constitute a quorum for the transaction of such item of business by that class or series.”
The remainder of the Amended
and Restated Articles of Incorporation, as amended, shall remain unchanged and in full force and effect.
IN WITNESS WHEREOF,
the undersigned, the Chief Financial Officer, Secretary and Treasurer of the Corporation, has executed these Articles of Amendment this
[ ]th day of [ ], 2021.
|
|
|
|
Michael Sullivan, Chief Financial
Officer,
|
|
Secretary and Treasurer
|
|
APPENDIX B
ARTICLES OF AMENDMENT TO THE
AMENDED AND RESTATED ARTICLES OF INCORPORATION
ORAGENICS, INC.
(Document Number P96000091949)
Oragenics, Inc. (the “Corporation”),
does hereby certify that the Corporation’s Articles of Incorporation originally filed with the Florida Department of State on November
6, 1996, as amended and restated on May 8, 2002, as further amended by those certain amendments filed October 28, 2009, September 22,
2010, August 30, 2011, June 2, 2014, January 10, 2017, May 8, 2017, November 8, 2017, December 5, 2017, December 29, 2017, January 16,
2018, June 22, 2018 and July 13, 2018 are hereby further amended pursuant to Section 607.1006 of the Florida Business Corporation Act
of the State of Florida.
The Corporation does hereby
further certify that this amendment was duly adopted by the Corporation’s Board of Directors and by the shareholders of the Corporation
in accordance with the applicable provisions of Section 607.0725 of the Florida Business Corporation Act of the State of Florida. The
Corporation’s Board of Directors adopted this amendment on March 31, 2021 and recommended that this amendment be adopted by the
Corporation’s shareholders. This amendment was adopted by the shareholders on [ ], 2021 and the number of votes cast for the amendment
by the shareholders was sufficient for approval. This amendment shall become effective on [ ] at 12:01 p.m.
The Amended and Restated Articles
of Incorporation of the Corporation, as amended, are amended as follows:
The first paragraph of Article
II of the Amended and Restated Articles of Incorporation, as amended, shall be deleted in its entirety and replaced with the following:
“Capital Stock:
The aggregate number of shares of all classes of capital stock which this Corporation shall have authority to issue is 300,000,000 shares,
consisting of (i) 250,000,000 shares of common stock, par value $0.001 per share (“Common Stock”) and (ii) 50,000,000 shares
of preferred stock, no par value (“Preferred Stock”).”
The remainder of the Amended
and Restated Articles of Incorporation, as amended, shall remain unchanged and in full force and effect.
IN WITNESS WHEREOF,
the undersigned, the Chief Financial Officer, Secretary and Treasurer of the Corporation, has executed these Articles of Amendment this
[ ]th day of [ ], 2021.
|
|
|
|
Michael Sullivan, Chief Financial
Officer,
|
|
Secretary and Treasurer
|
|
APPENDIX C
ORAGENICS, INC.
2021 EQUITY INCENTIVE PLAN
1. General.
(a) Plan Purpose. The
Company, by means of the Plan, seeks to secure and retain the services of Employees, Directors and Consultants, to provide incentives
for such persons to exert maximum efforts for the success of the Company and any Affiliate and to provide a means by which such persons
may be given an opportunity to benefit from increases in value of the Common Stock through the granting of Awards.
(b) Available Awards.
The Plan provides for the grant of the following Awards: (i) Incentive Stock Options; (ii) Nonstatutory Stock Options; (iii) SARs; (iv)
Restricted Stock Awards; (v) RSU Awards; (vi) Performance Awards; and (vii) Other Awards.
(c) Adoption Date. The
Plan will come into existence on the Adoption Date. No Award may be granted under the Plan prior to the Adoption Date. Any Award granted
prior to the Effective Date is contingent upon timely receipt of shareholder approval to the extent required under applicable tax, securities
and regulatory rules, and satisfaction of any other compliance requirements.
(d) Successor to and Continuation
of Prior Plans. The Plan is the successor to and continuation of the Company’s 2012 Equity Incentive Plan, as amended from
time to time. As of the Effective Date, (i) no additional awards may be granted under the 2012 Equity Incentive Plan; (ii) the Prior
Plans’ Available Reserve plus any Returning Shares will become available for issuance pursuant to Awards granted under this Plan;
and (iii) all outstanding awards granted under the 2012 Equity Incentive Plan will remain subject to the terms of the 2012 Equity Incentive
Plan (except to the extent such outstanding awards result in Returning Shares that become available for issuance pursuant to Awards granted
under this Plan). All Awards granted under this Plan will be subject to the terms of this Plan.
2. Shares
Subject to the Plan.
(a) Share Reserve. Subject
to adjustment in accordance with Section 2(d) and any adjustments as necessary to implement any Capitalization Adjustments, the aggregate
number of shares of Common Stock that may be issued pursuant to Awards will not exceed the sum of (i) 10,000,000 new shares, plus (ii)
the Prior Plans’ Available Reserve; plus, (iii) the number of Returning Shares, if any, as such shares become available from time
to time.
(b) Fungible Share Counting.
Subject to adjustment in accordance with Section 2(d), the number of shares of Common Stock available for issuance under the Plan
will be reduced by: (i) one share for each share of Common Stock issued pursuant to an Option or SAR with respect to which the exercise
or strike price is at least 100% of the Fair Market Value of the Common Stock subject to the Option or SAR on the grant date (each, an
“Appreciation Award”); and (ii) 1.20 shares for each share of Common Stock issued pursuant to any Award (other
than an Appreciation Award) (each, a “Full Value Award”).
(c) Aggregate Incentive Stock
Option Limit. Notwithstanding anything to the contrary in Section 2(a) and subject to any adjustments as necessary to implement any
Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive
Stock Options is 10,000,000 shares.
(d) Share Reserve Operation.
(i) Limit Applies to Common
Stock Issued Pursuant to Awards. For clarity, the Share Reserve is a limit on the number of shares of Common Stock that may be issued
pursuant to Awards and does not limit the granting of Awards, except that the Company will keep available at all times the number of
shares of Common Stock reasonably required to satisfy its obligations to issue shares pursuant to such Awards. Shares may be issued in
connection with a merger or acquisition as permitted by, as applicable, Nasdaq Listing Rule 5635(c), NYSE Listed Company Manual Section
303A.08, NYSE American Company Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares available
for issuance under the Plan.
(ii) Actions that Do Not Constitute
Issuance of Common Stock and Do Not Reduce Share Reserve. The following actions do not result in an issuance of shares under the
Plan and accordingly do not reduce the number of shares subject to the Share Reserve and available for issuance under the Plan: (1) the
expiration or termination of any portion of an Award without the shares covered by such portion of the Award having been issued, (2)
the settlement of any portion of an Award in cash (i.e., the Participant receives cash rather than Common Stock), (3) the withholding
of shares that would otherwise be issued by the Company to satisfy the exercise or strike price of an Appreciation Award; (4) the withholding
of shares that would otherwise be issued by the Company to satisfy a tax withholding obligation in connection with an Appreciation Award.
(iii) Reversion of Previously
Issued Shares of Common Stock to Share Reserve. The following shares of Common Stock previously issued pursuant to an Award and accordingly
initially deducted from the Share Reserve will be added back to the Share Reserve and again become available for issuance under the Plan:
(1) any shares that are forfeited back to or repurchased by the Company because of a failure to meet a contingency or condition required
for the vesting of such shares; (2) any shares that are reacquired by the Company to satisfy the exercise or strike price of an Appreciation
Award; and (3) any shares that are reacquired by the Company to satisfy a tax withholding obligation in connection with an Appreciation
Award. For each share subject to a Full Value Award that is added back to the Share Reserve pursuant to this subsection, the number of
shares of Common Stock available for issuance under the Plan will increase by 1.20 shares.
(iv) Shares Not Available For
Subsequent Issuance. Any shares of Common Stock reacquired or withheld (or not issued) by the Company to satisfy the purchase price
of a Full Value Award will no longer be available for issuance under the Plan, including any shares subject to a Full Value Award that
are not delivered to a Participant because such Full Value Award is settled through a reduction of shares subject to such Full Value
Award. In addition, any shares reacquired or withheld (or not issued) by the Company to satisfy a tax withholding obligation in connection
with a Full Value Award, or any shares repurchased by the Company on the open market with the proceeds from the purchase price of a Full
Value Award will no longer be available for issuance under the Plan.
3. Eligibility
and Limitations.
(a) Eligible Award Recipients.
Subject to the terms of the Plan, Employees, Directors and Consultants are eligible to receive Awards.
(b) Specific Award Limitations.
(i) Limitations on Incentive
Stock Option Recipients. Incentive Stock Options may be granted only to Employees of the Company or a “parent corporation”
or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and (f) of the Code).
(ii) Incentive Stock Option
$100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect
to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of
the Company and any Affiliates) exceeds $100,000 (or such other limit established in the Code) or otherwise does not comply with the
rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit (according to the order in which they
were granted) or otherwise do not comply with such rules will be treated as Nonstatutory Stock Options, notwithstanding any contrary
provision of the applicable Option Agreement(s).
(iii) Limitations on Incentive
Stock Options Granted to Ten Percent Shareholders. A Ten Percent Shareholder may not be granted an Incentive Stock Option unless
(i) the exercise price of such Option is at least 110% of the Fair Market Value on the date of grant of such Option and (ii) the Option
is not exercisable after the expiration of five years from the date of grant of such Option.
(iv) Limitations on Nonstatutory
Stock Options and SARs. Nonstatutory Stock Options and SARs may not be granted to Employees, Directors and Consultants who are providing
Continuous Service only to any “parent” of the Company (as such term is defined in Rule 405) unless the stock underlying
such Awards is treated as “service recipient stock” under Section 409A because the Awards are granted pursuant to a corporate
transaction (such as a spin off transaction) or unless such Awards otherwise comply with the distribution requirements of Section 409A.
(c) Aggregate Incentive Stock
Option Limit. The aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock
Options is the number of shares specified in Section 2(c).
(d) Non-Employee Director
Compensation Limit. The aggregate value of all Awards granted to any individual for service as a Non-Employee Director with respect
to any calendar year will not exceed (i) $300,000 in total value or (ii) in the event such Non-Employee Director is first appointed or
elected to the Board during such calendar year, $500,000 in total value, in each case calculating the value of any equity awards based
on the grant date fair value of such equity awards for financial reporting purposes.
4. Options.
Each Option will have such terms
and conditions as determined by the Board. Each Option will be designated in writing as an Incentive Stock Option or Nonstatutory Stock
Option at the time of grant; provided, however, that if an Option is not so designated, then such Option will be a Nonstatutory Stock
Option, and the shares purchased upon exercise of each type of Option will be separately accounted for. The terms and conditions of separate
Options need not be identical; provided, however, that each Option Agreement will conform (through incorporation of provisions hereof
by reference in the Award Agreement or otherwise) to the substance of each of the following provisions:
(a) Term. Subject to Section
3(b) regarding Ten Percent Shareholders, no Option will be exercisable after the expiration of ten years from the date of grant of such
Award or such shorter period specified in the Award Agreement.
(b) Exercise or Strike Price.
Subject to Section 3(b) regarding Ten Percent Shareholders, the exercise or strike price of each Option will not be less than 100%
of the Fair Market Value on the date of grant of such Award. Notwithstanding the foregoing, an Option may be granted with an exercise
or strike price lower than 100% of the Fair Market Value on the date of grant of such Award if such Award is granted pursuant to an assumption
of or substitution for another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent with
the provisions of Sections 409A and, if applicable, 424(a) of the Code.
(c) Exercise Procedure and
Payment of Exercise Price for Options. In order to exercise an Option, the Participant must provide notice of exercise to the Plan
Administrator in accordance with the procedures specified in the Option Agreement or otherwise provided by the Company. The Board has
the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain
methods) and to grant Options that require the consent of the Company to utilize a particular method of payment. The exercise price of
an Option may be paid, to the extent permitted by Applicable Law and as determined by the Board, by one or more of the following methods
of payment to the extent set forth in the Option Agreement:
(i) by cash
or check, bank draft or money order payable to the Company;
(ii) pursuant
to a “cashless exercise” program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to
the issuance of the Common Stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt
of irrevocable instructions to pay the exercise price to the Company from the sales proceeds;
(iii) by delivery
to the Company (either by actual delivery or attestation) of shares of Common Stock that are already owned by the Participant free and
clear of any liens, claims, encumbrances or security interests, with a Fair Market Value on the date of exercise that does not exceed
the exercise price, provided that (1) at the time of exercise the Common Stock is publicly traded, (2) any remaining balance of the exercise
price not satisfied by such delivery is paid by the Participant in cash or other permitted form of payment, (3) such delivery would not
violate any Applicable Law or agreement restricting the redemption of the Common Stock, (4) any certificated shares are endorsed or accompanied
by an executed assignment separate from certificate, and (5) such shares have been held by the Participant for any minimum period necessary
to avoid adverse accounting treatment as a result of such delivery;
(iv) if the
Option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will reduce the number
of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value on the date of exercise
that does not exceed the exercise price, provided that (1) such shares used to pay the exercise price will not be exercisable thereafter
and (2) any remaining balance of the exercise price not satisfied by such net exercise is paid by the Participant in cash or other permitted
form of payment; or
(v) in any other
form of consideration that may be acceptable to the Board and permissible under Applicable Law.
(d) Transferability. Options
may not be transferred to third party financial institutions for value. The Board may impose such additional limitations on the transferability
of an Option as it determines. In the absence of any such determination by the Board, the following restrictions on the transferability
of Options will apply, provided that except as explicitly provided herein, no Option may be transferred for consideration and provided,
further, that if an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result
of such transfer:
(i) Restrictions
on Transfer. An Option will not be transferable, except by will or by the laws of descent and distribution, and will be exercisable
during the lifetime of the Participant only by the Participant; provided, however, that the Board may permit transfer of an Option in
a manner that is not prohibited by applicable tax and securities laws upon the Participant’s request, including to a trust if the
Participant is considered to be the sole beneficial owner of such trust (as determined under Section 671 of the Code and applicable state
law) while such Option is held in such trust, provided that the Participant and the trustee enter into a transfer and other agreements
required by the Company.
(ii) Domestic Relations
Orders. Notwithstanding the foregoing, subject to the execution of transfer documentation in a format acceptable to the Company and
subject to the approval of the Board or a duly authorized Officer, an Option may be transferred pursuant to a domestic relations order.
(e) Vesting. The Board
may impose such restrictions on or conditions to the vesting and/or exercisability of an Option as determined by the Board. Except as
otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, vesting of
Options will cease upon termination of the Participant’s Continuous Service.
(f) Termination of Continuous
Service for Cause. Except as explicitly otherwise provided in the Award Agreement or other written agreement between a Participant
and the Company or an Affiliate, if a Participant’s Continuous Service is terminated for Cause, the Participant’s Options
will terminate and be forfeited immediately upon such termination of Continuous Service, and the Participant will be prohibited from
exercising any portion (including any vested portion) of such Awards on and after the date of such termination of Continuous Service
and the Participant will have no further right, title or interest in such forfeited Award, the shares of Common Stock subject to the
forfeited Award, or any consideration in respect of the forfeited Award.
(g) Post-Termination Exercise
Period Following Termination of Continuous Service for Reasons Other than Cause. Subject to Section 4(h), if a Participant’s
Continuous Service terminates for any reason other than for Cause, the Participant may exercise his or her Options to the extent vested,
but only within the following period of time or, if applicable, such other period of time provided in the Award Agreement or other written
agreement between a Participant and the Company or an Affiliate; provided, however, that in no event may such Award be exercised after
the expiration of its maximum term (as set forth in Section 4(a)):
(i) three months
following the date of such termination if such termination is a termination without Cause (other than any termination due to the Participant’s
Disability or death);
(ii) 12 months
following the date of such termination if such termination is due to the Participant’s Disability;
(iii) 18 months
following the date of such termination if such termination is due to the Participant’s death; or
(iv) 18 months
following the date of the Participant’s death if such death occurs following the date of such termination but during the period
such Award is otherwise exercisable (as provided in (i) or (ii) above).
Following the date of such termination, to the extent
the Participant does not exercise such Award within the applicable Post-Termination Exercise Period (or, if earlier, prior to the expiration
of the maximum term of such Award), such unexercised portion of the Award will terminate, and the Participant will have no further right,
title or interest in the terminated Award, the shares of Common Stock subject to the terminated Award, or any consideration in respect
of the terminated Award.
(h) Restrictions on Exercise;
Extension of Exercisability. A Participant may not exercise an Option at any time that the issuance of shares of Common Stock upon
such exercise would violate Applicable Law. Except as otherwise provided in the Award Agreement or other written agreement between a
Participant and the Company or an Affiliate, if a Participant’s Continuous Service terminates for any reason other than for Cause
and, at any time during the last thirty days of the applicable Post-Termination Exercise Period: (i) the exercise of the Participant’s
Option would be prohibited solely because the issuance of shares of Common Stock upon such exercise would violate Applicable Law, or
(ii) the immediate sale of any shares of Common Stock issued upon such exercise would violate the Company’s Trading Policy, then
the applicable Post-Termination Exercise Period will be extended to the last day of the calendar month that commences following the date
the Award would otherwise expire, with an additional extension of the exercise period to the last day of the next calendar month to apply
if any of the foregoing restrictions apply at any time during such extended exercise period, generally without limitation as to the maximum
permitted number of extensions); provided, however, that in no event may such Award be exercised after the expiration of its maximum
term (as set forth in Section 4(a)).
(i) Whole Shares. Options
may be exercised only with respect to whole shares of Common Stock or their equivalents.
5. Stock
Appreciation Rights.
Each SAR will have such terms
and conditions as determined by the Board. Each SAR will be denominated in shares of Common Stock equivalents. The terms and conditions
of separate SARs need not be identical; provided, however, that each SAR Agreement will conform (through incorporation of provisions
hereof by reference in the Award Agreement or otherwise) to the substance of each of the following provisions:
(a) Term. Subject to Section
3(b) regarding Ten Percent Shareholders, no SAR will be exercisable after the expiration of ten years from the date of grant of such
Award or such shorter period specified in the Award Agreement.
(b) Exercise or Strike Price.
Subject to Section 3(b) regarding Ten Percent Shareholders, the exercise or strike price of each SAR will not be less than 100% of
the Fair Market Value on the date of grant of such Award.
(c) Exercise Procedure and
Payment of Appreciation Distribution for SARs. In order to exercise any SAR, the Participant must provide notice of exercise to the
Plan Administrator in accordance with the SAR Agreement. The appreciation distribution payable to a Participant upon the exercise of
a SAR will not be greater than an amount equal to the excess of (i) the aggregate Fair Market Value on the date of exercise of a number
of shares of Common Stock equal to the number of Common Stock equivalents that are vested and being exercised under such SAR, over (ii)
the strike price of such SAR. Such appreciation distribution may be paid to the Participant in the form of Common Stock or cash (or any
combination of Common Stock and cash) or in any other form of payment, as determined by the Board and specified in the SAR Agreement.
(d) Transferability. SARs
may not be transferred to third party financial institutions for value. The Board may impose such additional limitations on the transferability
of an SAR as it determines. In the absence of any such determination by the Board, the following restrictions on the transferability
of SARs will apply, provided that except as explicitly provided herein, no SAR may be transferred for consideration:
(i) Restrictions
on Transfer. An SAR will not be transferable, except by will or by the laws of descent and distribution, and will be exercisable
during the lifetime of the Participant only by the Participant; provided, however, that the Board may permit transfer of an SAR in a
manner that is not prohibited by applicable tax and securities laws upon the Participant’s request, including to a trust if the
Participant is considered to be the sole beneficial owner of such trust (as determined under Section 671 of the Code and applicable state
law) while such SAR is held in such trust, provided that the Participant and the trustee enter into a transfer and other agreements required
by the Company.
(ii) Domestic Relations
Orders. Notwithstanding the foregoing, subject to the execution of transfer documentation in a format acceptable to the Company and
subject to the approval of the Board or a duly authorized Officer, an SAR may be transferred pursuant to a domestic relations order.
(e) Vesting. The Board
may impose such restrictions on or conditions to the vesting and/or exercisability of an r SAR as determined by the Board. Except as
otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, vesting of
SARs will cease upon termination of the Participant’s Continuous Service.
(f) Termination of Continuous
Service for Cause. Except as explicitly otherwise provided in the Award Agreement or other written agreement between a Participant
and the Company or an Affiliate, if a Participant’s Continuous Service is terminated for Cause, the Participant’s SARs will
terminate and be forfeited immediately upon such termination of Continuous Service, and the Participant will be prohibited from exercising
any portion (including any vested portion) of such Awards on and after the date of such termination of Continuous Service and the Participant
will have no further right, title or interest in such forfeited Award, the shares of Common Stock subject to the forfeited Award, or
any consideration in respect of the forfeited Award.
(g) Post-Termination Exercise
Period Following Termination of Continuous Service for Reasons Other than Cause. Subject to Section 5(h), if a Participant’s
Continuous Service terminates for any reason other than for Cause, the Participant may exercise his or her SARs to the extent vested,
but only within the following period of time or, if applicable, such other period of time provided in the Award Agreement or other written
agreement between a Participant and the Company or an Affiliate; provided, however, that in no event may such Award be exercised after
the expiration of its maximum term (as set forth in Section 5(a) above):
(i) three months
following the date of such termination if such termination is a termination without Cause (other than any termination due to the Participant’s
Disability or death);
(ii) 12 months
following the date of such termination if such termination is due to the Participant’s Disability;
(iii) 18 months
following the date of such termination if such termination is due to the Participant’s death; or
(iv) 18 months
following the date of the Participant’s death if such death occurs following the date of such termination but during the period
such Award is otherwise exercisable (as provided in (i) or (ii) above).
Following the date of such termination, to the extent
the Participant does not exercise such Award within the applicable Post-Termination Exercise Period (or, if earlier, prior to the expiration
of the maximum term of such Award), such unexercised portion of the Award will terminate, and the Participant will have no further right,
title or interest in the terminated Award, the shares of Common Stock subject to the terminated Award, or any consideration in respect
of the terminated Award.
(h) Restrictions on Exercise;
Extension of Exercisability. A Participant may not exercise an SAR at any time that the issuance of shares of Common Stock upon such
exercise would violate Applicable Law. Except as otherwise provided in the Award Agreement or other written agreement between a Participant
and the Company or an Affiliate, if a Participant’s Continuous Service terminates for any reason other than for Cause and, at any
time during the last thirty days of the applicable Post-Termination Exercise Period: (i) the exercise of the Participant’s SAR
would be prohibited solely because the issuance of shares of Common Stock upon such exercise would violate Applicable Law, or (ii) the
immediate sale of any shares of Common Stock issued upon such exercise would violate the Company’s Trading Policy, then the applicable
Post-Termination Exercise Period will be extended to the last day of the calendar month that commences following the date the Award would
otherwise expire, with an additional extension of the exercise period to the last day of the next calendar month to apply if any of the
foregoing restrictions apply at any time during such extended exercise period, generally without limitation as to the maximum permitted
number of extensions); provided, however, that in no event may such Award be exercised after the expiration of its maximum term (as set
forth in Section 5(a)).
(i) Whole Shares. Options
and SARs may be exercised only with respect to whole shares of Common Stock or their equivalents.
6. RESTRICTED
STOCK and RESTRICTED STOCK UNITS
(a) Restricted Stock Awards.
Each Restricted Stock Award will have such terms and conditions as determined by the Board; provided, however, that each Restricted
Stock Award Agreement will conform (through incorporation of the provisions hereof by reference in the Award Agreement or otherwise)
to the substance of each of the following provisions:
(i) Form of Award.
To the extent consistent with the Company’s Bylaws, at the Board’s election, shares of Common Stock subject to a Restricted
Stock Award may be (i) held in book entry form subject to the Company’s instructions until such shares become vested or any other
restrictions lapse, or (ii) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Board.
Unless otherwise determined by the Board, a Participant will have voting and other rights as a shareholder of the Company with respect
to any shares subject to a Restricted Stock Award.
(ii) Consideration.
A Restricted Stock Award may be granted in consideration for (A) cash or check, bank draft or money order payable to the Company,
(B) past services to the Company or an Affiliate, or (C) any other form of consideration (including future services) as the Board may
determine and permissible under Applicable Law.
(iii) Vesting.
The Board may impose such restrictions on or conditions to the vesting of a Restricted Stock Award as determined by the Board. Except
as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, vesting
of Restricted Stock Awards will cease upon termination of the Participant’s Continuous Service.
(iv) Termination
of Continuous Service. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the
Company or an Affiliate, if a Participant’s Continuous Service terminates for any reason, the Company may receive through a forfeiture
condition or a repurchase right any or all of the shares of Common Stock held by the Participant under his or her Restricted Stock Award
that have not vested as of the date of such termination as set forth in the Restricted Stock Award Agreement.
(v) Dividends.
Dividends may be paid or credited, as applicable, with respect to any shares of Common Stock subject to a Restricted Stock Award, as
determined by the Board and specified in the Award Agreement; provided, however, that (i) no dividends or dividend equivalents
may be paid with respect to any such shares before the date such shares have vested under the terms of such Award Agreement, (ii) any
dividends or dividend equivalents that are credited with respect to any such shares will be subject to all of the terms and conditions
applicable to such shares under the terms of such Award Agreement (including, but not limited to, any vesting conditions), and (iii)
any dividends or dividend equivalents that are credited with respect to any such shares will be forfeited to the Company on the date,
if any, such shares are forfeited to or repurchased by the Company due to a failure to meet any vesting conditions under the terms of
such Award Agreement.
(b) Restricted Stock Unit
Awards. Each RSU Award will have such terms and conditions as determined by the Board; provided, however, that each RSU Award Agreement
will conform (through incorporation of the provisions hereof by reference in the Award Agreement or otherwise) to the substance of each
of the following provisions:
(i) Form of Award.
A RSU Award represents a Participant’s right to be issued on a future date the number of shares of Common Stock that is equal
to the number of restricted stock units subject to the RSU Award. As a holder of a RSU Award, a Participant is an unsecured creditor
of the Company with respect to the Company’s unfunded obligation, if any, to issue shares of Common Stock in settlement of such
Award and nothing contained in the Plan or any RSU Agreement, and no action taken pursuant to its provisions, will create or be construed
to create a trust of any kind or a fiduciary relationship between a Participant and the Company or an Affiliate or any other person.
A Participant will not have voting or any other rights as a shareholder of the Company with respect to any RSU Award (unless and until
shares are actually issued in settlement of a vested RSU Award).
(ii) Consideration.
Unless otherwise determined by the Board at the time of grant, a RSU Award will be granted in consideration for the Participant’s
services to the Company or an Affiliate, such that the Participant will not be required to make any payment to the Company (other than
such services) with respect to the grant or vesting of the RSU Award, or the issuance of any shares of Common Stock pursuant to the RSU
Award. If, at the time of grant, the Board determines that any consideration must be paid by the Participant (in a form other than the
Participant’s services to the Company or an Affiliate) upon the issuance of any shares of Common Stock in settlement of the RSU
Award, such consideration may be paid in any form of consideration as the Board may determine and permissible under Applicable Law.
(iii) Vesting.
The Board may impose such restrictions on or conditions to the vesting of an RSU Award as determined by the Board. Except as otherwise
provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, vesting of RSU Awards
will cease upon termination of the Participant’s Continuous Service.
(iv) Termination
of Continuous Service. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the
Company or an Affiliate, if a Participant’s Continuous Service terminates for any reason, any portion of his or her RSU Award that
has not vested will be forfeited upon such termination and the Participant will have no further right, title or interest in the RSU Award,
the shares of Common Stock issuable pursuant to the RSU Award, or any consideration in respect of the RSU Award.
(v) Dividend Equivalents.
Dividend equivalents may be paid or credited, as applicable, with respect to any shares of Common Stock subject to a RSU Award, as
determined by the Board and specified in the Award Agreement; provided, however, that (i) no dividend equivalents may be paid
with respect to any such shares subject to an RSU Award before the date such shares have vested under the terms of such Award Agreement,
(ii) any dividend equivalents that are credited with respect to any such shares will be subject to all of the terms and conditions applicable
to such RSU Award and the covered shares under the terms of such Award Agreement (including, but not limited to, any vesting conditions),
and (iii) any dividend equivalents that are credited with respect to any such shares subject to an RSU Award will be forfeited to the
Company on the date, if any, such RSU Award is forfeited to by the Company due to a failure to meet any vesting conditions under the
terms of such Award Agreement.
(vi) Settlement
of RSU Awards. A RSU Award may be settled by the issuance of shares of Common Stock or cash (or any combination thereof) or in any
other form of payment, as determined by the Board and specified in the RSU Award Agreement. At the time of grant, the Board may determine
to impose such restrictions or conditions that delay such delivery to a date following the vesting of the RSU Award.
(c) Time and Performance Vesting.
The Committee, in its sole discretion, may impose such restrictions on the vesting of the Participant’s Restricted Stock Award
or Restricted Stock Units as it may deem advisable or appropriate, in accordance with this Section 6(c).
(i) Service Vesting.
The Committee may condition the vesting of a Participant’s Restricted Stock Award or Restricted Stock Units upon the Participant’s
continued performance of services for the Company through a specified vesting date or dates. If the Participant’s Continuous Service
terminates before such vesting date, the relevant Restricted Stock Award and/or Restricted Stock Units shall be forfeited, except as
may otherwise be provided in the Award Agreement.
(ii) Performance
Vesting. Alternatively, the Committee may, in its discretion, condition the vesting of all or a portion of the Participant’s
Restricted Stock Award or Restricted Stock Units upon completion of based upon the achievement of specific Performance Goals (Company-wide,
divisional, or individual) or any other basis determined by the Committee in its discretion
(d) Performance Awards.
With respect to any RSU Award or other Award designated as a Performance Award, the length of any Performance Period, the Performance
Goals to be achieved during the Performance Period, the other terms and conditions of such Award, and the measure of whether and to what
degree such Performance Goals have been attained will be determined by the Board.
(e) Other Awards. Other
forms of Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value
thereof (e.g., options or stock rights with an exercise price or strike price less than 100% of the Fair Market Value at the time of
grant) may be granted either alone or in addition to Awards provided for under Section 4 and the preceding provisions of this Section
5. Subject to the provisions of the Plan, the Board will have sole and complete discretion to determine the persons to whom and the time
or times at which such Other Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted
pursuant to such Other Awards and all other terms and conditions of such Other Awards.
7. Adjustments
upon Changes in Common Stock; Other Corporate Events.
(a) Capitalization Adjustments.
In the event of a Capitalization Adjustment, the Board shall appropriately and proportionately adjust: (i) the class(es) and maximum
number of shares of Common Stock subject to the Plan pursuant to Section 2(a), (ii) the class(es) and maximum number of shares that may
be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 2(a), and (iii) the class(es) and number of securities
and exercise price, strike price or purchase price of Common Stock subject to outstanding Awards. The Board shall make such adjustments,
and its determination shall be final, binding and conclusive. Notwithstanding the foregoing, no fractional shares or rights for fractional
shares of Common Stock shall be created in order to implement any Capitalization Adjustment. The Board shall determine an appropriate
equivalent benefit, if any, for any fractional shares or rights to fractional shares that might be created by the adjustments referred
to in the preceding provisions of this Section.
(b) Dissolution or Liquidation.
Except as otherwise provided in the Award Agreement, in the event of a dissolution or liquidation of the Company, all outstanding Awards
(other than Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Company’s
right of repurchase) will terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common
Stock subject to the Company’s repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by the Company
notwithstanding the fact that the holder of such Award is providing Continuous Service, provided, however, that the Board may determine
to cause some or all Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such
Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion.
(c) Corporate Transaction.
The following provisions will apply to Awards in the event of a Corporate Transaction unless otherwise provided in the instrument
evidencing the Award or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly
provided by the Board at the time of grant of an Award.
(i) Awards May Be
Assumed. In the event of a Corporate Transaction, any surviving corporation or acquiring corporation (or the surviving or acquiring
corporation’s parent company) may assume or continue any or all Awards outstanding under the Plan or may substitute similar awards
for Awards outstanding under the Plan (including but not limited to, awards to acquire the same consideration paid to the shareholders
of the Company pursuant to the Corporate Transaction), and any reacquisition or repurchase rights held by the Company in respect of Common
Stock issued pursuant to Awards may be assigned by the Company to the successor of the Company (or the successor’s parent company,
if any), in connection with such Corporate Transaction. A surviving corporation or acquiring corporation (or its parent) may choose to
assume or continue only a portion of an Award or substitute a similar award for only a portion of an Award, or may choose to assume or
continue the Awards held by some, but not all Participants. The terms of any assumption, continuation or substitution will be set by
the Board.
(ii) Awards Held
by Current Participants. In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or
its parent company) does not assume or continue such outstanding Awards or substitute similar awards for such outstanding Awards, then
with respect to Awards that have not been assumed, continued or substituted and that are held by Participants whose Continuous Service
has not terminated prior to the effective time of the Corporate Transaction (referred to as the “Current Participants”),
the vesting of such Awards (and, with respect to Options and Stock Appreciation Rights, the time when such Awards may be exercised) will
be accelerated in full to a date prior to the effective time of such Corporate Transaction (contingent upon the effectiveness of the
Corporate Transaction) as the Board determines (or, if the Board does not determine such a date, to the date that is five (5) days prior
to the effective time of the Corporate Transaction), and such Awards will terminate if not exercised (if applicable) at or prior to the
effective time of the Corporate Transaction, and any reacquisition or repurchase rights held by the Company with respect to such Awards
will lapse (contingent upon the effectiveness of the Corporate Transaction). With respect to the vesting of Performance Awards that will
accelerate upon the occurrence of a Corporate Transaction pursuant to this subsection (ii) and that have multiple vesting levels depending
on the level of performance, unless otherwise provided in the Award Agreement, the vesting of such Performance Awards will accelerate
at 100% of the target level upon the occurrence of the Corporate Transaction. With respect to the vesting of Awards that will accelerate
upon the occurrence of a Corporate Transaction pursuant to this subsection (ii) and are settled in the form of a cash payment, such cash
payment will be made no later than 30 days following the occurrence of the Corporate Transaction.
(iii) Awards Held
by Persons other than Current Participants. In the event of a Corporate Transaction in which the surviving corporation or acquiring
corporation (or its parent company) does not assume or continue such outstanding Awards or substitute similar awards for such outstanding
Awards, then with respect to Awards that have not been assumed, continued or substituted and that are held by persons other than Current
Participants, such Awards will terminate if not exercised (if applicable) prior to the occurrence of the Corporate Transaction; provided,
however, that any reacquisition or repurchase rights held by the Company with respect to such Awards will not terminate and may continue
to be exercised notwithstanding the Corporate Transaction.
(iv) Payment for
Awards in Lieu of Exercise. Notwithstanding the foregoing, in the event an Award will terminate if not exercised prior to the effective
time of a Corporate Transaction, the Board may provide, in its sole discretion, that the holder of such Award may not exercise such Award
but will receive a payment, in such form as may be determined by the Board, equal in value, at the effective time, to the excess, if
any, of (1) the value of the property the Participant would have received upon the exercise of the Award (including, at the discretion
of the Board, any unvested portion of such Award), over (2) any exercise price payable by such holder in connection with such exercise.
(d) Appointment of Shareholder
Representative. As a condition to the receipt of an Award under this Plan, a Participant will be deemed to have agreed that the Award
will be subject to the terms of any agreement governing a Corporate Transaction involving the Company, including, without limitation,
a provision for the appointment of a shareholder representative that is authorized to act on the Participant’s behalf with respect
to any escrow, indemnities and any contingent consideration.
(e) No Restriction on Right
to Undertake Transactions. The grant of any Award under the Plan and the issuance of shares pursuant to any Award does not affect
or restrict in any way the right or power of the Company or the shareholders of the Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company,
any issue of stock or of options, rights or options to purchase stock or of bonds, debentures, preferred or prior preference stocks whose
rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock,
or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.
8. Administration.
(a) Administration by Compensation
Committee. The Compensation Committee of the Board will administer the Plan unless and until the Board delegates administration of
the Plan to a different Committee or Committees of the Board.
(b) Powers of Committee.
The Committee will have the power, subject to, and within the limitations of, the express provisions of the Plan:
(i) To determine from time
to time (1) which of the persons eligible under the Plan will be granted Awards; (2) when and how each Award will be granted; (3) what
type or combination of types of Award will be granted; (4) the provisions of each Award granted (which need not be identical), including
the time or times when a person will be permitted to receive an issuance of Common Stock or other payment pursuant to an Award; (5) the
number of shares of Common Stock or cash equivalent with respect to which an Award will be granted to each such person; and (6) the Fair
Market Value applicable to an Award.
(ii) To construe and interpret
the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for its administration. The Committee,
in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Award Agreement, in a manner and
to the extent it deems necessary or expedient to make the Plan or Award fully effective.
(iii) To settle all controversies
regarding the Plan and Awards granted under it.
(iv) To accelerate the time
at which an Award may first be exercised or the time during which an Award or any part thereof will vest, notwithstanding the provisions
in the Award Agreement stating the time at which it may first be exercised or the time during which it will vest.
(v) To prohibit the exercise
of any Option, SAR or other exercisable Award during a period of up to 30 days prior to the consummation of any pending stock dividend,
stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company
assets to shareholders, or any other change affecting the shares of Common Stock or the share price of the Common Stock including any
Corporate Transaction, for reasons of administrative convenience.
(vi) To approve forms of
Award Agreements for use under the Plan and to amend the terms of any one or more Awards, including, but not limited to, amendments to
provide terms more favorable to the Participant than previously provided in the Award Agreement, subject to any specified limits in the
Plan that are not subject to Board or Committee discretion; provided however, that, a Participant’s rights under any Award
will not be Materially Impaired by any such amendment unless (1) the Company requests the consent of the affected Participant, and (2)
such Participant consents in writing.
(vii) Generally, to exercise
such powers and to perform such acts as the Committee deems necessary or expedient to promote the best interests of the Company and that
are not in conflict with the provisions of the Plan or Awards.
(viii) To adopt such procedures
and sub-plans as are necessary or appropriate to permit and facilitate participation in the Plan by, or take advantage of specific tax
treatment for Awards granted to, Employees, Directors or Consultants who are foreign nationals or employed outside the United States
(provided that Board approval will not be necessary for immaterial modifications to the Plan, and Committee approval will not be necessary
for immaterial modifications to any Award Agreement, deemed necessary or desirable to ensure or facilitate compliance with the laws of
the relevant foreign jurisdiction).
(c) Rule 16b-3 Compliance.
To the extent an Award is intended to qualify for the exemption from Section 16(b) of the Exchange Act that is available under Rule
16b-3 of the Exchange Act, the Award will be granted by the Board or a Committee that consists solely of two or more Non-Employee Directors,
as determined under Rule 16b-3(b)(3) of the Exchange Act and thereafter any action establishing or modifying the terms of the Award will
be approved by the Board or a Committee meeting such requirements to the extent necessary for such exemption to remain available.
(d) Effect of Committee’s
Decision. All determinations, interpretations and constructions made by the Committee in good faith will not be subject to review
by any person and will be final, binding and conclusive on all persons.
(e) Cancellation and Re-Grant
of Awards. Neither the Board nor any Committee will have the authority to: (i) reduce the exercise price or strike price of any outstanding
Options or SARs under the Plan, or (ii) cancel any outstanding Options or SARs that have an exercise price or strike price greater than
the current Fair Market Value in exchange for cash or other Awards under the Plan, unless the shareholders of the Company have approved
such an action within twelve months prior to such an event.
(f) Delegation to an Officer.
The Committee may delegate to one or more Officers the authority to do one or both of the following (i) designate Employees who are
not Officers to be recipients of Options and SARs (and, to the extent permitted by Applicable Law, other types of Awards) and, to the
extent permitted by Applicable Law, the terms thereof, and (ii) determine the number of shares of Common Stock to be subject to such
Awards granted to such Employees; provided, however, that the resolutions or charter adopted by the Board or any Committee evidencing
such delegation will specify the total number of shares of Common Stock that may be subject to the Awards granted by such Officer and
that such Officer may not grant an Award to himself or herself. Any such Awards will be granted on the applicable form of Award Agreement
most recently approved for use by the Committee, unless otherwise provided in the resolutions approving the delegation authority. Notwithstanding
anything to the contrary herein, neither the Board nor any Committee may delegate to an Officer who is acting solely in the capacity
of an Officer (and not also as a Director) the authority to determine the Fair Market Value of shares of the Common Stock.
9. Tax Withholding
(a) Withholding Authorization.
As a condition to acceptance of any Award under the Plan, a Participant authorizes withholding from payroll and any other amounts
payable to such Participant, and otherwise agrees to make adequate provision for (including), any sums required to satisfy any U.S. federal,
state, local and/or foreign tax or social insurance contribution withholding obligations of the Company or an Affiliate, if any, which
arise in connection with the grant, exercise, vesting or settlement of such Award, as applicable. Accordingly, a Participant may not
be able to exercise an Award even though the Award is vested, and the Company shall have no obligation to issue shares of Common Stock
subject to an Award, unless and until such obligations are satisfied.
(b) Satisfaction of Withholding
Obligation. To the extent permitted by the terms of an Award Agreement, the Company may, in its sole discretion, satisfy any U.S.
federal, state, local and/or foreign tax or social insurance withholding obligation relating to an Award by any of the following means
or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from
the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Award; (iii) withholding cash from
an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; (v) by allowing a Participant
to effectuate a “cashless exercise” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve
Board, or (vi) by such other method as may be set forth in the Award Agreement.
(c) No Obligation to Notify
or Minimize Taxes; No Liability to Claims. Except as required by Applicable Law the Company has no duty or obligation to any Participant
to advise such holder as to the time or manner of exercising such Award. Furthermore, the Company has no duty or obligation to warn or
otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised.
The Company has no duty or obligation to minimize the tax consequences of an Award to the holder of such Award and will not be liable
to any holder of an Award for any adverse tax consequences to such holder in connection with an Award. As a condition to accepting an
Award under the Plan, each Participant (i) agrees to not make any claim against the Company, or any of its Officers, Directors, Employees
or Affiliates related to tax liabilities arising from such Award or other Company compensation and (ii) acknowledges that such Participant
was advised to consult with his or her own personal tax, financial and other legal advisors regarding the tax consequences of the Award
and has either done so or knowingly and voluntarily declined to do so. Additionally, each Participant acknowledges any Option or SAR
granted under the Plan is exempt from Section 409A only if the exercise or strike price is at least equal to the “fair market value”
of the Common Stock on the date of grant as determined by the Internal Revenue Service and there is no other impermissible deferral of
compensation associated with the Award. Additionally, as a condition to accepting an Option or SAR granted under the Plan, each Participant
agrees not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates in the event that the Internal
Revenue Service asserts that such exercise price or strike price is less than the “fair market value” of the Common Stock
on the date of grant as subsequently determined by the Internal Revenue Service.
(d) Withholding Indemnification.
As a condition to accepting an Award under the Plan, in the event that the amount of the Company’s and/or its Affiliate’s
withholding obligation in connection with such Award was greater than the amount actually withheld by the Company and/or its Affiliates,
each Participant agrees to indemnify and hold the Company and/or its Affiliates harmless from any failure by the Company and/or its Affiliates
to withhold the proper amount.
10. Miscellaneous.
(a) Source of Shares.
The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased
by the Company on the open market or otherwise.
(b) Use of Proceeds from Sales
of Common Stock. Proceeds from the sale of shares of Common Stock pursuant to Awards will constitute general funds of the Company.
(c) Corporate Action Constituting
Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant will be deemed completed as
of the date of such corporate action, unless otherwise determined by the Board or the Committee, regardless of when the instrument, certificate,
or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate
records (e.g., Committee consents, Board consents, resolutions or minutes) documenting the corporate action approving the grant contain
terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award Agreement or related
grant documents as a result of a clerical error in the Award Agreement or related grant documents, the corporate records will control
and the Participant will have no legally binding right to the incorrect term in the Award Agreement or related grant documents.
(d) Shareholder Rights.
No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock
subject to such Award unless and until (i) such Participant has satisfied all requirements for exercise of the Award pursuant to its
terms, if applicable, and (ii) the issuance of the Common Stock subject to such Award is reflected in the records of the Company.
(e) No Employment or Other
Service Rights. Nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award
granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity
in effect at the time the Award was granted or affect the right of the Company or an Affiliate to terminate at will and without regard
to any future vesting opportunity that a Participant may have with respect to any Award (i) the employment of an Employee with or without
notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the
Company or an Affiliate, or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable
provisions of the corporate law of the state or foreign jurisdiction in which the Company or the Affiliate is incorporated, as the case
may be. Further, nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award
will constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work
assignments, future compensation or any other term or condition of employment or service or confer any right or benefit under the Award
or the Plan unless such right or benefit has specifically accrued under the terms of the Award Agreement and/or Plan.
(f) Change in Time Commitment.
In the event a Participant’s regular level of time commitment in the performance of his or her services for the Company and any
Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a change
in status from a full-time Employee to a part-time Employee or takes an extended leave of absence) after the date of grant of any Award
to the Participant, the Board may determine, to the extent permitted by Applicable Law, to (i) make a corresponding reduction in the
number of shares or cash amount subject to any portion of such Award that is scheduled to vest or become payable after the date of such
change in time commitment, and (ii) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable
to such Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is
so reduced or extended.
(g) Execution of Additional
Documents. As a condition to accepting an Award under the Plan, the Participant agrees to execute any additional documents or instruments
necessary or desirable, as determined in the Plan Administrator’s sole discretion, to carry out the purposes or intent of the Award,
or facilitate compliance with securities and/or other regulatory requirements, in each case at the Plan Administrator’s request.
(h) Electronic Delivery and
Participation. Any reference herein or in an Award Agreement to a “written” agreement or document will include any agreement
or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto) or posted on the Company’s
intranet (or other shared electronic medium controlled by the Company to which the Participant has access). By accepting any Award the
Participant consents to receive documents by electronic delivery and to participate in the Plan through any on-line electronic system
established and maintained by the Plan Administrator or another third party selected by the Plan Administrator. The form of delivery
of any Common Stock (e.g., a stock certificate or electronic entry evidencing such shares) shall be determined by the Company.
(i) Clawback/Recovery.
All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to
adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are
listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other Applicable Law and any clawback
policy that the Company otherwise adopts, to the extent applicable and permissible under Applicable Law. In addition, the Board may impose
such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including
but not limited to a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the
occurrence of Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a Participant’s right
to voluntary terminate employment upon a “resignation for good reason,” or for a “constructive termination” or
any similar term under any plan of or agreement with the Company.
(j) Securities Law Compliance.
A Participant will not be issued any shares in respect of an Award unless either (i) the shares are registered under the Securities
Act; or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act.
Each Award also must comply with other Applicable Law governing the Award, and a Participant will not receive such shares if the Company
determines that such receipt would not be in material compliance with Applicable Law.
(k) Transfer or Assignment
of Awards; Issued Shares. Except as expressly provided in the Plan or the form of Award Agreement, Awards granted under the Plan
may not be transferred or assigned by the Participant. After the vested shares subject to an Award have been issued, or in the case of
Restricted Stock and similar awards, after the issued shares have vested, the holder of such shares is free to assign, hypothecate, donate,
encumber or otherwise dispose of any interest in such shares provided that any such actions are in compliance with the provisions herein,
the terms of the Trading Policy and Applicable Law.
(l) Effect on Other Employee
Benefit Plans. The value of any Award granted under the Plan, as determined upon grant, vesting or settlement, shall not be included
as compensation, earnings, salaries, or other similar terms used when calculating any Participant’s benefits under any employee
benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves
its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.
(m) Section 409A. Unless
otherwise expressly provided for in an Award Agreement, the Plan and Award Agreements will be interpreted to the greatest extent possible
in a manner that makes the Plan and the Awards granted hereunder exempt from Section 409A, and, to the extent not so exempt, in compliance
with the requirements of Section 409A. If the Board determines that any Award granted hereunder is not exempt from and is therefore subject
to Section 409A, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid the consequences
specified in Section 409A(a)(1) of the Code, and to the extent an Award Agreement is silent on terms necessary for compliance, such terms
are hereby incorporated by reference into the Award Agreement. Notwithstanding anything to the contrary in this Plan (and unless the
Award Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding an
Award that constitutes “deferred compensation” under Section 409A is a “specified employee” for purposes of Section
409A, no distribution or payment of any amount that is due because of a “separation from service” (as defined in Section
409A without regard to alternative definitions thereunder) will be issued or paid before the date that is six months and one day following
the date of such Participant’s “separation from service” or, if earlier, the date of the Participant’s death,
unless such distribution or payment can be made in a manner that complies with Section 409A, and any amounts so deferred will be paid
in a lump sum on the day after such six month period elapses, with the balance paid thereafter on the original schedule.
(n) Choice of Law. This
Plan and any controversy arising out of or relating to this Plan shall be governed by, and construed in accordance with, the internal
laws of the State of Florida without regard to conflict of law principles that would result in any application of any law other than
the law of the State of Florida.
11. Covenants
of the Company. COMPLIANCE WITH LAW.
The Company will seek to obtain
from each regulatory commission or agency, as may be deemed to be necessary, having jurisdiction over the Plan such authority as may
be required to grant Awards and to issue and sell shares of Common Stock upon exercise or vesting of the Awards; provided, however, that
this undertaking will not require the Company to register under the Securities Act the Plan, any Award or any Common Stock issued or
issuable pursuant to any such Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any
such regulatory commission or agency the authority that counsel for the Company deems necessary or advisable for the lawful issuance
and sale of Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon
exercise or vesting of such Awards unless and until such authority is obtained. A Participant is not eligible for the grant of an Award
or the subsequent issuance of Common Stock pursuant to the Award if such grant or issuance would be in violation of any Applicable Law.
12. Severability.
If all or any part of the Plan
or any Award Agreement is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity
shall not invalidate any portion of the Plan or such Award Agreement not declared to be unlawful or invalid. Any Section of the Plan
or any Award Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner
which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.
13. Amendment
of Termination of the Plan.
(a) Termination. The Board
may suspend or terminate the Plan at any time. No Incentive Stock Options may be granted after the tenth anniversary of the earlier of
(i) the Adoption Date, or (ii) the Effective Date. No Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) Amendment. The Board,
in its sole discretion, may amend the Plan in any respect the Board deems necessary or advisable; provided, however, that shareholder
approval will be required for any amendment to the extent required by Applicable Law.
(c) Effect on Prior Awards.
No Participant’s rights under any Award granted before the amendment or termination of the Plan will be Materially Impaired by
any amendment, suspension, or termination of the Plan unless (1) the Company requests the consent of the affected Participant, and (2)
such Participant consents in writing, provided that such consent shall not be required if the Board determines, in its sole and
absolute discretion, that the amendment, suspension or termination: (a) is required or advisable in order for the Company, the Plan or
the Award to satisfy applicable law, to meet the requirements of any accounting standard or to avoid any adverse accounting treatment,
or (b) in connection with any transaction or event described in Section 7(c), is in the best interests of the Company or its shareholders.
14. Definitions.
As used in the Plan, the following
definitions apply to the capitalized terms indicated below:
(a) “Acquiring
Entity” means the surviving or acquiring corporation (or its parent company) in connection with a Corporate Transaction.
(b) “Adoption
Date” means the date the Plan is first approved by the Board or Compensation Committee.
(c) “Affiliate”
means, at the time of determination, any “parent” or “subsidiary” of the Company as such terms are defined in
Rule 405 promulgated under the Securities Act. The Board may determine the time or times at which “parent” or “subsidiary”
status is determined within the foregoing definition.
(d) “Applicable
Law” means shall mean any applicable securities, federal, state, foreign, material local or municipal or other law, statute,
constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, listing rule, regulation, judicial decision,
ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any
Governmental Body (including under the authority of any applicable self-regulating organization such as the Nasdaq Stock Market, New
York Stock Exchange, or the Financial Industry Regulatory Authority).
(e) “Award”
means any right to receive Common Stock, cash or other property granted under the Plan (including an Incentive Stock Option, a Nonstatutory
Stock Option, a Restricted Stock Award, a RSU Award, a SAR, a Performance Award or any Other Award).
(f) “Award
Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of an Award.
The Award Agreement generally consists of the Grant Notice and the agreement containing the written summary of the general terms and
conditions applicable to the Award and which is provided to a Participant along with the Grant Notice.
(g) “Board”
means the Board of Directors of the Company (or its designee). Any decision or determination made by the Board shall be a decision or
determination that is made in the sole discretion of the Board (or its designee), and such decision or determination shall be final and
binding on all Participants.
(h) “Capitalization
Adjustment” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the
Plan or subject to any Award after the Effective Date without the receipt of consideration by the Company through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend,
stock split, reverse stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or any
similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards Board Accounting Standards
Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the
Company will not be treated as a Capitalization Adjustment.
(i) “Cause”
has the meaning ascribed to such term in any written agreement between the Participant and the Company defining such term and, in the
absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events: (i) the commission
of an act of fraud, embezzlement, theft or proven dishonesty, or any other illegal act or practice (whether or not resulting in criminal
prosecution or conviction), including theft or destruction of property of the Company or a subsidiary, or any other act or practice which
the Committee shall, in good faith, deem to have resulted in the recipient’s becoming unbondable under the Company or any subsidiary’s
fidelity bond; (ii) the willful engaging in misconduct which is deemed by the Committee, in good faith, to be materially injurious to
the Company or any subsidiary, monetarily or otherwise, including, but not limited to, improperly disclosing trade secrets or other confidential
or sensitive business information and data about the Company or any subsidiaries and competing with the Company or any subsidiaries,
or soliciting employees, consultants or customers of the Company or any subsidiaries in violation of law or any employment or other agreement
to which the recipient is a party; (iii) the continued failure or habitual neglect by a person who is a Participant to perform his or
her duties with the Company or any subsidiary; or (iv) other disregard of rules or policies of the Company or any subsidiary, or conduct
evidencing willful or wanton disregard of the interests of the Company or any subsidiary.
(j) “Code”
means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.
(k) “Committee”
means the Compensation Committee and any other committee of Directors to whom authority has been delegated by the Board or Compensation
Committee in accordance with the Plan.
(l) “Common Stock”
means the common stock of the Company.
(m) “Company”
means Oragenics, Inc., a Florida corporation.
(n) “Compensation
Committee” means the Compensation Committee of the Board.
(o) “Consultant”
means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services and
is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services.
However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered a “Consultant”
for purposes of the Plan. Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if a Form S-8 Registration
Statement under the Securities Act is available to register either the offer or the sale of the Company’s securities to such person.
(p) “Continuous
Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director
or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or
an Affiliate as an Employee, Director or Consultant or a change in the Entity for which the Participant renders such service, provided
that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, will not terminate
a Participant’s Continuous Service; provided, however, that if the Entity for which a Participant is rendering services
ceases to qualify as an Affiliate, as determined by the Board, such Participant’s Continuous Service will be considered to have
terminated on the date such Entity ceases to qualify as an Affiliate. For example, a change in status from an Employee of the Company
to a Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service. To the extent permitted by
law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous
Service will be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive officer, including
sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding
the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in an Award only to such extent as may
be provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable
to the Participant, or as otherwise required by law. In addition, to the extent required for exemption from or compliance with Section
409A, the determination of whether there has been a termination of Continuous Service will be made, and such term will be construed,
in a manner that is consistent with the definition of “separation from service” as defined under Treasury Regulation Section
1.409A-1(h) (without regard to any alternative definition thereunder).
(q) “Corporate
Transaction” means the consummation, in a single transaction or in a series of related transactions, of any one or more
of the following events, provided, however, to the extent necessary to avoid adverse personal income tax consequences to the Participant
under Section 409A of the Code in connection with an Award, such transaction or series of transactions, also constitutes a Section 409A
Change in Control:
(i) a sale or
other disposition of all or substantially all, as determined by the Board, of the consolidated assets of the Company and its Subsidiaries;
(ii) a sale or
other disposition of at least 50% of the outstanding securities of the Company;
(iii) a merger,
consolidation or similar transaction following which the Company is not the surviving corporation; or
(iv) a merger,
consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding
immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation
or similar transaction into other property, whether in the form of securities, cash or otherwise.
(r) “Director”
means a member of the Board.
(s) “determine”
or “determined” means as determined by the Board or the Committee (or its designee) in its sole
discretion.
(t) “Disability”
means, with respect to a Participant, such Participant is unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for
a continuous period of not less than 12 months, as provided in Section 22(e)(3) of the Code, and will be determined by the Board on the
basis of such medical evidence as the Board deems warranted under the circumstances.
(u) “Effective
Date” means the date of the annual meeting of shareholders of the Company held in 2021 provided this Plan is approved by
the Company’s shareholders at such meeting.
(v) “Employee”
means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services,
will not cause a Director to be considered an “Employee” for purposes of the Plan.
(w) “Employer”
means the Company or the Affiliate of the Company that employs the Participant.
(x) “Entity”
means a corporation, partnership, limited liability company or other entity.
(y) “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(z) “Fair
Market Value” means, as of any date, unless otherwise determined by the Board, the value of the Common Stock (as determined
on a per share or aggregate basis, as applicable) determined as follows:
(i) If the Common
Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value will be the closing sales
price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common
Stock) on the date of determination, as reported in a source the Board deems reliable.
(ii) If there
is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing selling price
on the last preceding date for which such quotation exists.
(iii) In the absence
of such markets for the Common Stock, or if otherwise determined by the Board, the Fair Market Value will be determined by the Board
in good faith and in a manner that complies with Sections 409A and 422 of the Code.
(aa) “Governmental
Body” means any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction
of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or regulatory body, or quasi-governmental
body of any nature (including any governmental division, department, administrative agency or bureau, commission, authority, instrumentality,
official, ministry, fund, foundation, center, organization, unit, body or Entity and any court or other tribunal, and for the avoidance
of doubt, any Tax authority) or other body exercising similar powers or authority; or (d) self-regulatory organization (including the
Nasdaq Stock Market, New York Stock Exchange, and the Financial Industry Regulatory Authority).
(bb) “Grant
Notice” means the notice provided to a Participant that he or she has been granted an Award under the Plan and which includes
the name of the Participant, the type of Award, the date of grant of the Award, number of shares of Common Stock subject to the Award
or potential cash payment right, (if any), the vesting schedule for the Award (if any) and other key terms applicable to the Award.
(cc) “Incentive
Stock Option” means an option granted pursuant to Section 4 of the Plan that is intended to be, and qualifies as, an “incentive
stock option” within the meaning of Section 422 of the Code.
(dd) “Materially
Impair” means any amendment to the terms of the Award that materially adversely affects the Participant’s rights
under the Award. A Participant’s rights under an Award will not be deemed to have been Materially Impaired by any such amendment
if the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participant’s
rights. For example, the following types of amendments to the terms of an Award do not Materially Impair the Participant’s rights
under the Award: (i) imposition of reasonable restrictions on the minimum number of shares subject to an Option that may be exercised,
(ii) to maintain the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code; (iii) to change the terms
of an Incentive Stock Option in a manner that disqualifies, impairs or otherwise affects the qualified status of the Award as an Incentive
Stock Option under Section 422 of the Code; (iv) to clarify the manner of exemption from, or to bring the Award into compliance with
or qualify it for an exemption from, Section 409A; or (v) to comply with other Applicable Laws.
(ee) “Non-Employee
Director” means a Director who either (i) is not a current employee or officer of the Company or an Affiliate, does not
receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any
capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation
S-K promulgated pursuant to the Securities Act (“Regulation S-K”)), does not possess an interest in any other
transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship
for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee
director” for purposes of Rule 16b-3.
(ff) “Nonstatutory
Stock Option” means any option granted pursuant to Section 4 of the Plan that does not qualify as an Incentive Stock Option.
(gg) “Officer”
means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.
(hh) “Option”
means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan.
(ii) “Option
Agreement” means a written agreement between the Company and the Optionholder evidencing the terms and conditions of the
Option grant. The Option Agreement includes the Grant Notice for the Option and the agreement containing the written summary of the general
terms and conditions applicable to the Option and which is provided to a Participant along with the Grant Notice. Each Option Agreement
will be subject to the terms and conditions of the Plan.
(jj) “Optionholder”
means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.
(kk) “Other
Award” means an award based in whole or in part by reference to the Common Stock which is granted pursuant to the terms
and conditions of Section 6(e).
(ll) “Other
Award Agreement” means a written agreement between the Company and a holder of an Other Award evidencing the terms and
conditions of an Other Award grant. Each Other Award Agreement will be subject to the terms and conditions of the Plan.
(mm) “Own,”
“Owned,” “Owner,” “Ownership” means that a person or Entity
will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership”
of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise,
has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.
(nn) “Participant”
means an Employee, Director or Consultant to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds
an outstanding Award.
(oo) “Performance
Award” means a Restricted Stock Unit Award or other Award that may vest or may be exercised or a cash award that may vest
or become earned and paid contingent upon the attainment during a Performance Period of certain Performance Goals and which is granted
under the terms and conditions of Section 5 pursuant to such terms as are approved by the Board or the Committee. In addition, to the
extent permitted by Applicable Law and set forth in the applicable Award Agreement, the Committee may determine that cash or other property
may be used in payment of Performance Awards. Performance Awards that are settled in cash or other property are not required to be valued
in whole or in part by reference to, or otherwise based on, the Common Stock.
(pp) “Performance
Criteria” means the one or more criteria that the Board or Committee will select for purposes of establishing the Performance
Goals for a Performance Period. The Performance Criteria that will be used to establish such Performance Goals may be based on any measure
of performance selected by the Board or Committee.
(qq) “Performance
Goals” means, for a Performance Period, the one or more goals established by the Board or Committee for the Performance
Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to one or more business
units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable
companies or the performance of one or more relevant indices. Unless specified otherwise by the Board (i) in the Award Agreement at the
time the Award is granted or (ii) in such other document setting forth the Performance Goals at the time the Performance Goals are established,
the Board or Committee will appropriately make adjustments in the method of calculating the attainment of Performance Goals for a Performance
Period as follows: (1) to exclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects; (3) to exclude
the effects of changes to generally accepted accounting principles; (4) to exclude the effects of any statutory adjustments to corporate
tax rates; (5) to exclude the effects of items that are “unusual” in nature or occur “infrequently” as determined
under generally accepted accounting principles; (6) to exclude the dilutive effects of acquisitions or joint ventures; (7) to assume
that any business divested by the Company achieved performance objectives at targeted levels during the balance of a Performance Period
following such divestiture; (8) to exclude the effect of any change in the outstanding shares of Common Stock of the Company by reason
of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange
of shares or other similar corporate change, or any distributions to common shareholders other than regular cash dividends; (9) to exclude
the effects of stock based compensation and the award of bonuses under the Company’s bonus plans; (10) to exclude costs incurred
in connection with potential acquisitions or divestitures that are required to expensed under generally accepted accounting principles;
(11) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally accepted accounting
principles; and (12) to exclude the effects of the timing of acceptance for review and/or approval of submissions to the U.S. Food and
Drug Administration or any other regulatory body. In addition, the Committee retains the discretion to reduce or eliminate the compensation
or economic benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects
to use for such Performance Period. Partial achievement of the specified criteria may result in the payment or vesting corresponding
to the degree of achievement as specified in the Award Agreement or the written terms of a Performance Cash Award.
(rr) “Performance
Period” means the period of time selected by the Committee or the Board over which the attainment of one or more Performance
Goals will be measured for the purpose of determining a Participant’s right to vesting or exercise of an Award. Performance Periods
may be of varying and overlapping duration, at the sole discretion of the Committee or the Board.
(ss) “Plan”
means this Oragenics, Inc. 2021 Equity Incentive Plan.
(tt) “Plan
Administrator” means the person, persons, and/or third-party administrator designated by the Company to administer the
day to day operations of the Plan and the Company’s other equity incentive programs.
(uu) “Post-Termination
Exercise Period” means the period following termination of a Participant’s Continuous Service within which an Option
or SAR is exercisable, as specified in Section 4(g) or Section 5(g), as applicable.
(vv) “Prior
Plan Available Reserve” means the number of shares available for the grant of new awards under the Prior Plan as of the
date immediately prior to the Effective Date.
(ww) “Prior
Plan” mean the Oragenics, Inc. 2012 Equity Incentive Plan, as amended from time to time.
(xx) “Restricted
Stock Award” or “RSA” means an Award of shares of Common Stock which is granted pursuant to the
terms and conditions of Section 6(a).
(yy) “Restricted
Stock Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Award evidencing
the terms and conditions of a Restricted Stock Award grant. The Restricted Stock Award Agreement includes the Grant Notice for the Restricted
Stock Award and the agreement containing the written summary of the general terms and conditions applicable to the Restricted Stock Award
and which is provided to a Participant along with the Grant Notice. Each Restricted Stock Award Agreement will be subject to the terms
and conditions of the Plan.
(zz) “Returning
Shares” means shares subject to outstanding stock awards granted under the Prior Plan and that following the Effective
Date: (A) are not issued because such stock award or any portion thereof expires or otherwise terminates without all of the shares covered
by such stock award having been issued; (B) are not issued because such stock award or any portion thereof is settled in cash; (C) are
forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required for the vesting of
such shares; (D) are withheld or reacquired to satisfy the exercise, strike or purchase price; or (E) are withheld or reacquired to satisfy
a tax withholding obligation.
(aaa) “RSU
Award” or “RSU” means an Award of restricted stock units representing the right to receive an
issuance of shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(b).
(bbb) “RSU
Award Agreement” means a written agreement between the Company and a holder of a RSU Award evidencing the terms and conditions
of a RSU Award grant. The RSU Award Agreement includes the Grant Notice for the RSU Award and the agreement containing the written summary
of the general terms and conditions applicable to the RSU Award and which is provided to a Participant along with the Grant Notice. Each
RSU Award Agreement will be subject to the terms and conditions of the Plan.
(ccc) “Rule
16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.
(ddd) “Rule
405” means Rule 405 promulgated under the Securities Act.
(eee) “Section
409A” means Section 409A of the Code and the regulations and other guidance thereunder.
(fff) “Section
409A Change in Control” means a change in the ownership or effective control of the Company, or in the ownership of a substantial
portion of the Company’s assets, as provided in Section 409A(a)(2)(A)(v) of the Code and Treasury Regulations Section 1.409A-3(i)(5)
(without regard to any alternative definition thereunder).
(ggg) “Securities
Act” means the Securities Act of 1933, as amended.
(hhh) “Share
Reserve” means the number of shares available for issuance under the Plan as set forth in Section 2(a).
(iii) “Stock
Appreciation Right” or “SAR” means a right to receive the appreciation on Common Stock that is
granted pursuant to the terms and conditions of Section 5.
(jjj) “SAR
Agreement” means a written agreement between the Company and a holder of a SAR evidencing the terms and conditions of a
SAR grant. The SAR Agreement includes the Grant Notice for the SAR and the agreement containing the written summary of the general terms
and conditions applicable to the SAR and which is provided to a Participant along with the Grant Notice. Each SAR Agreement will be subject
to the terms and conditions of the Plan.
(kkk) “Subsidiary”
means, with respect to the Company, (i) any corporation of which more than 50% of the outstanding capital stock having ordinary voting
power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class
or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly
or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct
or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than 50%.
(lll) “Ten
Percent Shareholder” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing
more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate.
(mmm) “Trading
Policy” means the Company’s policy permitting certain individuals to sell Company shares only during certain “window”
periods and/or otherwise restricts the ability of certain individuals to transfer or encumber Company shares, as in effect from time
to time.
APPENDIX D
REQUEST FOR INTERIM FINANCIAL STATEMENTS
Oragenics, Inc.
Request for Interim Financial Statements
In accordance with National Instrument
54-102 of the Canadian Securities Administrators, registered and beneficial shareholders of the subject Corporation may elect annually
to receive interim corporate mailings, including interim financial statements of the Corporation, if they so request. If you wish to
receive such mailings, please complete and return this form to:
Oragenics, Inc.
Investor Relations
4902 Eisenhower Blvd., Suite 125
Tampa, Florida 33634
POSTAL CODE:
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I confirm that I am an owner of common
stock of the Corporation.
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SIGNATURE OF
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SHAREHOLDER:
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DATE:
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CUSIP: 684023 30 2
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SCRIP COMPANY CODE: ORGQ
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APPENDIX E
PROXY CARD
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
ORAGENICS, INC.
TO BE HELD AT THE offices
of Shumaker, Loop, & Kendrick, Bank of America Plaza, 101 E Kennedy Blvd Suite 2800, Tampa, FL 33602 ON MONDAY NOVEMBER 22,
2021, AT 9:00 A.M., EASTERN TIME.
The undersigned shareholder of Oragenics,
Inc.(the “Company”), Tampa, Florida, hereby constitutes and appoints Michael Sullivan with full power of substitution or
in the place of the foregoing, Frederick Telling as proxy holder, for and on behalf of the undersigned shareholder with the power of
substitution to attend, act and vote the number of shares of Common Stock which the undersigned would be entitled to vote if personally
present at the Annual Meeting of Shareholders of Shareholders or at any adjournments thereof , upon the proposals described in the Notice
to the Holders of Common Stock of the Annual Meeting of Shareholders and Proxy Statement, both dated October [ ], 2021, the receipt of
which is acknowledged, in the manner specified below. The proxies, in their discretion, are further authorized to vote on any shareholder
proposals not submitted to the Company for a vote of the shareholders at the Annual Meeting of Shareholders within a reasonable time
prior to the mailing of the proxy materials, as well as on the election of any person as a Director if a Director nominee named in Proposal
I is unable to serve or for good cause will not serve, and on matters incident to the conduct of the Annual Meeting of Shareholders.
At the present time, the Board of Directors knows of no other business to be presented to a vote of the shareholders at the Annual Meeting
of Shareholders.
This Proxy, when properly executed, will be voted
in the manner directed by the undersigned shareholder. If no direction is made, this Proxy will be voted FOR the election of the Directors
listed on the reverse side and FOR Proposals II, III, IV and V.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF ORAGENICS, INC. AND MAY BE REVOKED BY THE SHAREHOLDER PRIOR TO ITS EXERCISE. The undersigned reserves the right to revoke
this Proxy at any time prior to the Proxy being voted at the Meeting. The Proxy may be revoked by delivering a signed revocation to the
Company at any time prior to the Meeting, by submitting a later-dated Proxy, or by attending the Meeting in person and casting a ballot.
The undersigned hereby revokes any proxy previously given to vote such shares at the Meeting.
PROXY
A. PROPOSALS – The Board of Directors recommends a vote FOR all
the nominees listed and FOR Proposals II, III, IV and V.
Proposal I: Election of Directors. On the
proposal to elect the following Directors to serve until the indicated Annual Meeting of Shareholders of the Company and until their
successors are elected and qualified:
Dr. Frederick
W. Telling
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For [ ]
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Withhold
Authority [ ]
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Robert C. Koski
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For [ ]
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Withhold Authority [ ]
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Charles L. Pope
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For [ ]
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Withhold Authority [ ]
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Dr. Alan Dunton
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For [ ]
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Withhold Authority [ ]
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Kimberly M. Murphy
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For [ ]
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Withhold Authority [ ]
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Proposal II: Advisory vote on executive compensation.
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[ ] For
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[ ] Against
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[ ] Abstain
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Proposal III: To
approve the adoption of an amendment to Company’s Articles of Incorporation to provide a reduced quorum requirement of one-third
(1/3) of shares entitled to be cast, represented by a person or a proxy, in order to constitute a meeting of shareholders.
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[ ] For
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[ ] Against
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[ ] Abstain
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Proposal IV: To
approve the adoption of an amendment to Company’s Articles of Incorporation to increase the number of authorized shares of Common
Stock from 200 million shares to 250 million shares.
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[ ] For
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[ ] Against
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[ ] Abstain
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Proposal V: To approve the Company’s
2021 Equity Incentive Plan.
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[ ] For
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[ ] Against
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[ ] Abstain
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Proposal VI: Ratification of the selection
of Mayer Hoffman McCann P.C. as the Company’s independent auditors for the year ending December 31, 2021.
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[ ] For
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[ ] Against
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[ ] Abstain
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B. Authorized Signatures – This section must be completed for
your vote to be counted. — Date and Sign Below.
Please sign exactly as your name appears on your
stock certificate and date. Where shares are held jointly, each shareholder should sign. When signing as executor, administrator, trustee,
or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer.
If a partnership, please sign in full partnership name by authorized person.
Shares Held: ________________________________________
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Signature of Shareholder_______________________________
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Signature of Shareholder (If held jointly) ___________________
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Dated:_____________________________________________
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THIS PROXY FORM IS NOT VALID UNLESS IT IS SIGNED.
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