PROPOSAL 2: APPROVAL OF AMENDMENT NO. 1 TO THE 2016 STOCK INCENTIVE
PLAN
Our
2016 Stock Incentive Plan originally authorized for issuance
3,000,000 shares of our common stock under the plan. As a result of
the 1-for-20 reverse stock split effected on February 23, 2018, the
number of shares authorized for issuance under the 2016 Plan was
reduced to 150,000. On April 18, 2019, our Board of Directors
approved, subject to stockholder approval, Amendment No. 1 to the
2016 Plan to increase the number of shares of common stock
authorized for issuance under the 2016 Plan to a total of 750,000
shares, representing an increase of 600,000 shares. The additional
requested shares represent approximately 10% of our total
outstanding shares as of April 16, 2019. Based upon our assessment
of our anticipated grants under the 2016 Plan, as amended, we
believe that the proposed increase in the number of shares will be
sufficient to meet our equity compensation requirements for
approximately three years from the date of the Annual
Meeting.
The
purpose of the 2016 Plan is to advance the interests of our company
and our stockholders through awards that give eligible employees,
directors and third party service providers a personal stake in our
growth, development and financial success. Awards under the 2016
Plan are also intended to motivate eligible employees, directors
and third party service providers to devote their best efforts to
our business and help us attract and retain the services of
eligible employees, directors and third party service providers who
are in a position to make significant contributions to our future
success and align them with stockholder interests.
We are
requesting that stockholders approve Amendment No. 1 to the 2016
Plan to satisfy Nasdaq rules relating to equity compensation. In
addition, approval would allow us to qualify additional options for
treatment as incentive stock options for purposes of Section 422 of
the Internal Revenue Code. If stockholder approval is not received,
the Compensation Committee will reconsider Amendment No. 1 to the
2016 Plan, and the present 2016 Plan would remain in effect without
such amendment. In addition, if stockholder approval is not
received, we
may seek to hold
additional stockholder meetings until stockholder approval is
obtained.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF
AMENDMENT NO. 1 TO THE 2016 STOCK INCENTIVE PLAN.
Summary of the 2016 Plan Features
The
following is a brief summary of the 2016 Plan, as amended by
Amendment No. 1, and is qualified in its entirety by reference to a
copy of the 2016 Plan and Amendment No. 1 attached to this proxy
statement as Appendix A.
Shares Available
The
total number of shares of common stock available for issuance under
the 2016 Plan is 100,000, subject to adjustment for future stock
splits, stock dividends and similar changes in the capitalization
of our company.
Any
shares related to Awards (as defined below) which terminate by
expiration, forfeiture, cancellation, or otherwise without the
issuance of such shares, are settled in cash in lieu of shares, or
are exchanged with the Compensation Committee’s permission,
prior to the issuance of shares, for Awards not involving shares,
shall be available again for grant under the 2016
Plan.
Shares
of common stock covered by an Award will be reserved for that Award
while it remains outstanding but shall only be counted as used to
the extent they are actually issued; provided, however, that the
full number of stock appreciation rights granted that are to be
settled by the issuance of shares shall be counted against the
number of shares available for award under the 2016 Plan,
regardless of the number of shares actually issued upon settlement
of such stock appreciation rights. Further, any shares
of common stock withheld to satisfy tax withholding obligations on
Awards issued under the 2016 Plan and shares tendered to pay the
exercise price of Awards under the 2016 Plan will not be eligible
to be returned as available shares under the 2016
Plan.
Description of Awards
The
2016 Plan provides for the grant of stock options, stock
appreciation rights, restricted stock, restricted stock units,
performance shares, performance units, cash-based awards, or other
stock-based awards (collectively
“Awards”).
Stock Options
. Optionees
receive the right to purchase a specified number of shares of our
common stock at a specified option price and subject to such other
terms and conditions as are specified in connection with the option
grant. The option price for each grant of an option
under the 2016 Plan will be determined by the Compensation
Committee in its sole discretion and shall be specified in the
Award agreement; provided, however, the option price on the date of
grant must be at least equal to 100% of the fair market value of
the common stock on the date of grant; provided, further, however,
that the option price must be at least equal to 110% of the fair
market value of the common stock on the date of grant with respect
to any incentive stock option issued to a participant who, on the
date of such grant, owns stock possessing more than 10% of the
total combined voting power of all classes of stock of our company
or of any subsidiary corporation (a “10%
Shareholder”). The term of an option and the
period or periods during which, and conditions pursuant to which,
an option may vest and be exercised will be determined by the
Compensation Committee, although the option term may not exceed 10
years (or five years with respect to incentive options granted to
an employee who is a 10% Shareholder). Any option not exercised
before expiration of the option period will terminate. Options
generally are subject to certain restrictions on exercise if the
participant terminates employment or service. The 2016
Plan permits the Compensation Committee to determine the manner of
payment of the exercise price of options, including through payment
by cash or its equivalent, in connection with a “cashless
exercise” through a broker, by surrender to us of shares of
common stock, or by any other lawful means.
Stock Appreciation
Rights
. Stock Appreciation Rights
(“SARs”) entitle recipients to profit from increases in
the value of our common stock, without buying
shares. Like options, SARs benefit the holder when our
common stock price increases. The primary difference is
that the recipient is not required to pay an exercise price, but
instead just receives the amount of the increase in the form of
cash or stock. Upon the exercise of a SAR, the holder of
a SAR is entitled to receive payment from our company in an amount
determined by multiplying (i) the difference between the fair
market value of a share of common stock on the date of exercise
over the grant price per share of such SAR by (ii) the number of
shares of common stock with respect to which the SAR is being
exercised. The grant price may be no less than 100% of the fair
market value per share of the common stock on the date the SAR is
granted. SARs vest and become exercisable according to
the terms established by the Compensation Committee. No
SAR may be exercised more than 10 years after it was granted, or
such shorter period as may apply with respect to a particular SAR.
SARs generally are subject to certain restrictions on exercise if
the participant terminates employment or service.
Restricted Stock and Restricted Stock
Units
. Subject to the limitations of the 2016
Plan, the Compensation Committee may grant shares of restricted
stock and/or restricted stock units to participants in such amounts
as the Compensation Committee determines. Restricted stock units
are similar to restricted stock except that no shares of common
stock are actually awarded to the participant on the date of
grant. Restricted stock and restricted stock units will
be subject to certain conditions which must be met in order for the
restricted stock or restricted stock units to vest and/or be earned
(in whole or in part) and no longer subject to forfeiture.
Restricted stock awards may be payable in shares of common stock,
and restricted stock units may be payable in cash or whole shares
of common stock, or partly in cash and partly in whole shares of
common stock, in accordance with the Compensation Committee’s
discretion. The Compensation Committee has authority to
determine the restriction period for each grant of restricted stock
and/or restricted stock units and will determine the conditions
that must be met in order for such Award to be granted or to vest
or be earned (in whole or in part). These conditions may include
(but are not limited to) payment of a stipulated purchase price,
restrictions based upon the achievement of specific performance
goals, time-based restrictions on vesting following the attainment
of the performance goals, time-based restrictions, and/or
restrictions under applicable laws or under the requirements of any
stock exchange or market upon which such shares are listed or
traded, or holding requirements or sale restrictions placed on the
shares by us upon vesting of such restricted stock or restricted
stock units. Restricted stock and/or restricted stock
units generally are subject to certain restrictions on vesting if
the participant terminates employment or service.
Performance Shares and Performance
Units
. Subject to the limitations of the 2016
Plan, the Compensation Committee may grant performance units and/or
performance shares to participants in such amounts and upon such
terms as the Compensation Committee determines. An award
of a performance share is a grant of a right to receive shares of
common stock or the cash value thereof, or a combination thereof
(as determined in the Compensation Committee’s discretion),
which is contingent upon the achievement of performance goals
during a specified period and which has a value equal to the fair
market value of a share of common stock on the grant date. An award
of a performance unit is a grant of a right to receive shares of
common stock, a designated dollar value amount of common stock, or
a combination thereof (as determined in the Compensation
Committee’s discretion) which is contingent upon the
achievement of performance goals during a specified period, and
which has an initial value established by the Compensation
Committee at the time of grant. The Compensation
Committee will set performance goals in its discretion which,
depending on the extent to which they are met, will determine the
value and/or number of performance units and/or performance shares
that will be paid out to a participant. Performance
units and/or performance shares generally are subject to certain
restrictions on vesting if the participant terminates employment or
service.
Cash-Based Awards and Other Stock-Based
Awards
. Subject to the limitations of the 2016
Plan, the Compensation Committee may grant cash-based awards to
participants in such amounts and upon such terms as the
Compensation Committee may determine. The Compensation
Committee may also grant other types of equity-based or
equity-related Awards not otherwise described by the terms of the
2016 Plan in such amounts and subject to such terms and conditions
as the Compensation Committee may determine. Such Awards may
involve the transfer of actual shares of common stock to
participants, or payment in cash or otherwise of amounts based on
the value of shares, and may include, without limitation, Awards
designed to comply with or take advantage of the applicable local
laws of jurisdictions other than the United States. Each
cash-based award will specify a payment amount or payment range as
determined by the Compensation Committee. Each other
stock-based award will be expressed in terms of shares of common
stock or units based on shares of common stock, as determined by
the Compensation Committee. If the Compensation
Committee exercises its discretion to establish performance goals,
the number and/or value of cash-based awards or other stock-based
awards that will be paid out to a participant will depend on the
extent to which the performance goals are
met. Cash-based awards or other stock-based awards may
be payable in cash or shares of common stock, in accordance with
the Compensation Committee’s
discretion. Cash-based awards or other stock-based
awards generally are subject to certain restrictions on vesting if
the participant terminates employment or service.
Dividend and Dividend
Equivalents
. The Compensation Committee may grant
dividends or dividend equivalents based on the dividends declared
on shares that are subject to any Award, to be credited as of
dividend payment dates, during the period between the date the
Award is granted and the date the Award is exercised, vests, or
expires, as determined by the Compensation Committee; provided,
however, that dividends or dividend equivalents credited with
respect to performance-based Awards will be subject to the same
underlying performance-based vesting conditions as the Awards and
will not be subject to discretion. The dividends or
dividend equivalents may be subject to any limitations and/or
restrictions determined by the Compensation Committee.
Limitations on Awards
The
maximum number of shares that may be issued pursuant to awards
granted under the 2016 Plan may not exceed 750,000 shares. In
addition, under the 2016 Plan, unless and until the Compensation
Committee determines that an Award to a Covered Employee (as
defined in section 162(m) of the IRC) shall not be designed to
qualify as performance-based compensation under section 162(m) of
the IRC, the following annual award limits shall apply to grants of
such Awards under the 2016 Plan:
●
Options
: The maximum aggregate
number of shares of common stock subject to options granted in any
one year to any one participant will be 1,000,000 shares, as
adjusted pursuant to the 2016 Plan;
●
SARs
: The maximum aggregate
number of shares of common stock subject to SARs granted in any one
year to any one participant will be 1,000,000 shares, as adjusted
pursuant to the 2016 Plan;
●
Restricted Stock or Restricted Stock
Units
: The maximum aggregate Awards of restricted stock or
restricted stock units in any one year to any one participant will
be 500,000 shares, as adjusted pursuant to the 2016
Plan;
●
Performance Units or Performance
Shares
: The maximum aggregate Awards of performance units or
performance shares that a participant may receive in any one year
will be 500,000 shares, as adjusted pursuant to the 2016 Plan, or
equal to the value of 500,000 shares, as adjusted pursuant to the
2016 Plan, determined as of the date of vesting or payout, as
applicable;
●
Cash-Based Awards
: The maximum
aggregate amount awarded or credited with respect to cash-based
awards to any one participant in any one year may not exceed the
greater of the value of $4,000,000 or 1,000,000 shares, as adjusted
pursuant to the 2016 Plan, determined as of the date of vesting or
payout, as applicable; and
●
Other Stock-Based Awards
: The
maximum aggregate grants with respect to other stock-based awards
in any one year to any one participant will be 1,000,000 shares, as
adjusted pursuant to the 2016 Plan.
Change
in Control
Unless
otherwise expressly provided in an Award agreement, with respect to
each outstanding Award that is assumed or substituted in connection
with a change in control (as defined in the 2016 Plan), in the
event that (i) a change in control occurs and (ii) the
participant’s employment or service is involuntarily
terminated by us, our successor or affiliate thereof without cause
(as defined in the 2016 Plan) on or after the effective time of the
change in control but prior to 18 months following such change in
control, then Awards will be treated as follows:
●
Options and SARs
: Any and all
options and SARs granted under the 2016 Plan will become
exercisable, and will remain exercisable in accordance with their
terms;
●
Restricted Stock, Restricted Stock
Units or Other Stock-Based Awards
: Any restriction periods
and restrictions imposed on all outstanding Awards of restricted
stock, restricted stock units or other stock-based awards will
lapse and be settled as soon as reasonably practicable, but in no
event later than 10 days following such termination of employment;
and
●
Performance Units, Performance Shares
or other Performance-Based Awards
: For each performance
unit, performance share or other performance-based Awards, all
performance goals or similar performance-based vesting criteria
will be deemed achieved at 100% of target levels and all other
terms and conditions will be deemed met as of the date of the
participant’s termination of employment or service and the
Award shall be settled as soon as reasonably practicable but in no
event later than 10 days following termination of
employment.
For
purposes of the 2016 Plan, an Award will be considered assumed if,
following the change in control, the Award confers the right to
purchase or receive, for each share subject to the Award
immediately prior to the change in control, the consideration
received in the change in control by holders of common stock for
each share held on the effective date of the transaction; provided,
however, that if the consideration received in the change in
control is not solely common stock of the successor corporation or
its parent, the Compensation Committee may, with the consent of the
successor corporation, provide for the consideration to be received
upon the exercise of an option or SAR, for each share subject to
the Award, to be solely common stock of the successor corporation
or its parent equal in fair market value to the per share
consideration received by holders of common stock in the change in
control.
For
purposes of the 2016 Plan, an Award will be considered assumed or
substituted if, upon the occurrence of a change in control after
which there will be a generally recognized U.S. public market for
(i) our stock, (ii) common stock for which our stock is exchanged,
or (iii) the common stock of a successor or acquirer entity (such
publicly traded stock, “Public Shares”), the then
outstanding Awards are assumed, exchanged or substituted for by a
successor or acquirer entity such that following the change in
control, the Awards relate to the Public Shares and, except as
otherwise provided by the 2016 Plan, remain subject to the terms
and conditions that were applicable to the Awards prior to the
change in control.
Unless
otherwise expressly provided in an Award agreement, with respect to
each outstanding Award that is not assumed or substituted in
connection with a change in control, then prior to the occurrence
of the change in control Awards will be treated as
follows:
●
Options and SARs
: Any and all
options and SARs granted under the 2016 Plan will vest in full and
become immediately exercisable in accordance with their terms and
the Compensation Committee will notify the participant in writing
that the options or SARs will be exercisable for a period of time
determined by the Compensation Committee in its sole discretion and
the option or SAR will terminate upon the expiration of the stated
period; and
●
Restricted Stock, Restricted Stock
Units, Performance Units, Performance Shares or Other Stock-Based
Awards
: Any restriction periods and restrictions imposed on
all outstanding Awards of restricted stock, restricted stock units,
performance units, performance shares or other stock-based awards
will lapse and be settled as soon as reasonably practicable, but in
no event later than 10 days following the change in
control.
Notwithstanding any
other provisions of the 2016 Plan, in the event that each
outstanding Award is not assumed or substituted in connection with
a change in control and except as would otherwise result in adverse
tax consequences under section 409A of the IRC, the Compensation
Committee may, in its discretion, provide that each Award shall,
immediately upon the occurrence of a change in control, be
cancelled in exchange for a payment in cash or securities in an
amount equal to (i) the excess if any of the consideration paid per
share in the change in control over the exercise or purchase price
per share subject to the Award multiplied by (ii) the number of
shares granted under the Award. Without limiting the
generality of the foregoing, in the event that the consideration
paid per share in the change in control is less than or equal to
the exercise price or purchase price per share subject to the
Award, the Compensation Committee may, in its discretion, cancel
such Award without any consideration upon the occurrence of a
change in control.
Transferability
Except
as otherwise provided in the 2016 Plan, during a
participant’s lifetime, his or her Awards will be exercisable
only by such participant or such participant’s legal
representative. Awards will not be transferable other
than by will or the laws of descent and distribution; no Awards
will be subject, in whole or in part, to attachment, execution, or
levy of any kind; and any purported transfer in violation of these
restrictions will be null and void. The
Compensation Committee may establish procedures as it deems
appropriate for a participant to designate a beneficiary to whom
any amounts payable or shares deliverable in the event of, or
following, such participant’s death, may be
provided.
Eligibility of Recipients
Employees,
directors and third party service providers of Tenax Therapeutics
are eligible to be granted Awards under the 2016
Plan. As of April 16, 2019, approximately 10 employees,
including two executive officers, and five non-employee directors
are eligible to receive Awards under the 2016
Plan.
On
April 16, 2019, the last reported sale price of our common stock on
the Nasdaq Capital Market was $1.69.
Federal Income Tax Consequences
The
following generally describes the principal federal (but not state
and local) income tax consequences of awards granted under the 2016
Plan as of this time. The summary is general in nature and is not
intended to cover all tax consequences that may apply to a
particular participant or to our company. The provisions of the IRC
and related regulations are complicated and their impact in any one
case may depend upon the particular circumstances.
Incentive Stock
Options. A
participant will not have income upon the grant of an incentive
stock option. Also, except as described below, a participant will
not have income upon exercise of an incentive stock option if the
participant has been employed by us or a 50% or more owned
corporate subsidiary at all times beginning with the option grant
date and ending three months before the date the participant
exercises the option. If the participant has not been so employed
during that time, then the participant will be taxed as described
below under “Nonqualified Stock Options.” The exercise
of an incentive stock option may subject the participant to the
alternative minimum tax.
A
participant will have income upon the sale of the stock acquired
under an incentive stock option at a profit (if sales proceeds
exceed the exercise price). The type of income will depend on when
the participant sells the stock. If a participant sells the stock
more than two years after the option was granted and more than one
year after the option was exercised, then all of the profit will be
long-term capital gain. If a participant sells the stock prior to
satisfying these waiting periods, then the participant will have
engaged in a disqualifying disposition and a portion of the profit
will be ordinary income and a portion may be capital gain. This
capital gain will be long-term if the participant has held the
stock for more than one year and otherwise will be short-term. If a
participant sells the stock at a loss (sales proceeds are less than
the exercise price), then the loss will be a capital loss. This
capital loss will be long-term if the participant held the stock
for more than one year and otherwise will be
short-term.
Nonqualified Stock Options (Nonstatutory Stock
Options)
. A participant will not have income upon
the grant of a nonqualified stock option. A participant will have
compensation income upon the exercise of a nonqualified stock
option equal to the value of the stock on the day the participant
exercised the option less the exercise price. Upon sale of the
stock, the participant will have capital gain or loss equal to the
difference between the sales proceeds and the value of the stock on
the day the option was exercised. This capital gain or loss will be
long-term if the participant has held the stock for more than one
year and otherwise will be short-term.
Stock Appreciate Rights
. A
participant will not have income upon the grant of a
SAR. However, a participant will have compensation taxed
at ordinary income tax rates when a SAR is exercised, to the extent
of the difference between the grant price and the value of the
stock on the date of exercise.
Restricted Stock
. A
participant will not have income upon the grant of restricted stock
unless an election under section 83(b) of the IRC is made within 30
days of the date of grant. If a timely 83(b) election is made, then
a participant will have compensation income on each share equal to
the value of the stock at date of grant less the purchase price
paid, if any. When the stock is sold, the participant will have
capital gain or loss equal to the difference between the sales
proceeds and the value of the stock on the date of grant. If the
participant does not make an 83(b) election, then when the stock
vests the participant will have compensation taxed at ordinary
income tax rates on the value of the stock on the vesting date less
the purchase price, if any. When the stock is later sold, the
participant will also incur capital gain or loss equal to the sales
proceeds less the value of the stock on the vesting date. Any
capital gain or loss will be long-term if the participant held the
stock for more than one year and otherwise will be
short-term.
Restricted Stock Units, Performance Share
Awards, Performance Unit Awards, Dividends and Dividend
Equivalents
. The federal income tax consequences
of the award of restricted stock units, performance share awards,
performance unit awards or dividend equivalents will depend on the
conditions of the particular award. Generally, the grant of one of
these Awards does not result in taxable income to the participant.
However, the participant will recognize ordinary compensation
income (taxable at ordinary income tax rates) at settlement of the
Award in an amount equal to any cash and/or the fair market value
of any common stock received (determined as of the date that the
award is not subject to a substantial risk of forfeiture or freely
transferable).
Cash-Based Awards and Other Stock-Based
Awards
. A participant will not have income upon
the grant of a cash-based award or other stock-based
award. However, a participant will have ordinary
compensation income (taxed at ordinary income tax rates) for cash
payments and/or the fair market value of any shares or other
property received in connection with cash-based awards or other
stock-based awards in the year such payments or shares are received
or made available to the participant without substantial
limitations or restrictions. When any shares received in
connection with cash-based awards or other stock-based awards is
sold, the participant will have capital gain or loss equal to the
sales proceeds less the value of the stock on the vesting date. Any
capital gain or loss will be long-term if the participant held the
stock for more than one year and otherwise will be
short-term.
Tax Consequences to Tenax
Therapeutics
. There will be no tax consequences
to Tenax Therapeutics except that we will be entitled to a
deduction when a participant has compensation income. Any such
deduction will be subject to the limitations of section 162(m) of
the IRC.
Section 409A of the IRC
Section
409A of the IRC imposes certain requirements on nonqualified
deferred compensation. Certain awards provided under the
2016 Plan could be viewed as deferring income for participants and
may, therefore, be subject to section 409A of the
IRC. While it is our intent to have the 2016 Plan and
all awards under the 2016 Plan be exempt from or comply with the
requirements of section 409A of the IRC, including related
regulations and guidance, there can be no assurance that awards
made under the 2016 Plan will satisfy those
requirements. In the event an award is subject to
section 409A of the IRC but does not satisfy the requirements of
section 409A of the IRC, the participant may be subject to
immediate income tax inclusion of the deferred amounts, an
additional 20% excise tax on amounts includible in income, and
interest and penalty charges on such amounts from the date the
amounts became vested. We undertake no responsibility to
take, or to refrain from taking, any actions in order to achieve a
certain
Plan Awards
The
following table sets forth with respect to each individual and
group listed below (i) the number of shares of common stock issued
or issuable pursuant to stock options granted under the 2016 Plan
and (ii) the number of shares underlying restricted stock awards
granted under the 2016 Plan, in each case since the 2016
Plan’s effectiveness on June 16, 2016 through April 16, 2019.
Any future awards to eligible participants under the 2016 Plan are
subject to the discretion of the Compensation Committee or Board
and therefore are not determinable at this time. The table does not
include grants made under any other compensation plan.
CUMULATIVE GRANTS SINCE PLAN INCEPTION IN 2016
|
Number of Shares Underlying Options Granted
|
Number of Shares Underlying Restricted Stock Awards
Granted
|
Anthony
DiTonno
|
50,000
|
--
|
Michael
B. Jebsen, CPA
|
--
|
--
|
Ronald
R. Blanck, DO
|
--
|
--
|
James
Mitchum
|
--
|
--
|
Gregory
Pepin
|
--
|
--
|
Gerald
T. Proehl
|
--
|
--
|
Chris
A. Rallis
|
--
|
--
|
All
current executive officers as a group
|
50,000
|
--
|
All
current directors who are not executive officers as a
group
|
--
|
--
|
All
associates of directors, executive officers or
nominees
|
50,000
|
--
|
All
other persons who received or are to receive 5% of plan
awards
|
--
|
--
|
All
employees, including all current officers who are not executive
officers, as a group
|
--
|
--
|
Equity Compensation Plan Information
The
following table provides information about the securities
authorized for issuance under our equity compensation plans as of
December 31, 2018.
|
|
|
|
|
Number of securities to be issued upon exercise of outstanding
options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants
and rights
|
Number of securities remaining available for future issuances under
equity compensation plans (excluding securities reflected in column
(a))
|
Plan category
|
|
|
|
Equity
compensation plans approved by security holders
|
191,735
|
$
93.72
|
100,000
(1)
|
Equity
compensation plans not approved by security holders
|
—
|
—
|
—
|
Total
|
191,735
|
$
93.72
|
100,000
|
(1)
|
Represents the number of shares available for future issuance under
the 2016 Plan. All of these shares are available for issuance as
restricted stock or other stock-based awards under the 2016
Plan.
|
Stockholder Proposals
Under
certain conditions, stockholders may request us to include a
proposal for action at a forthcoming meeting of our stockholders in
the proxy materials for such meeting. All stockholder proposals
intended to be presented at our 2020 Annual Meeting of Stockholders
must be received by us no later than
December 21, 2019
for inclusion in the
proxy statement and proxy card relating to such meeting.
However, if the date of the 2020
Annual Meeting is changed by more than 30 days from the date
of the first anniversary of the 2019 Annual Meeting, then the
deadline is a reasonable time before we begin to print and mail our
proxy statement for the 2020 Annual Meeting.
In
addition, our bylaws require that we be given advance notice of
stockholder nominations for election to the Board of Directors and
of other matters that stockholders wish to present for action at an
annual meeting of stockholders, other than matters included in our
proxy statement. The required notice must be in writing, include
the information set forth in the bylaws and be received by our
corporate secretary at our principal offices not less than 120 days
nor more than 150 days prior to the one-year anniversary of the
preceding year’s annual meeting, provided, however, that if
the date of the annual meeting is more than 30 days before or more
than 60 days after the one-year anniversary of the preceding
year’s annual meeting, a stockholder’s notice must be
received not later than the 90
th
day prior to such
annual meeting, or if later, the 10
th
day following the
day on which public disclosure of the date of the annual meeting
was first made. The date of our 2020 Annual Meeting of Stockholders
has not yet been established, but assuming it is held on June 16,
2020, in order to comply with the time periods set forth in our
bylaws, appropriate notice for the 2020 Annual Meeting would need
to be provided to our corporate secretary no earlier than January
18, 2020, and no later than February 17, 2020.
Costs of Soliciting Proxies
We will
bear the cost of this solicitation, including the preparation,
printing, and mailing of the proxy statement, proxy card, and any
additional soliciting materials sent by us to stockholders. Our
directors, officers, and employees may solicit proxies personally
or by telephone without additional compensation. We will also
reimburse brokerage firms and other persons representing beneficial
owners of shares for reasonable expenses incurred in forwarding
proxy soliciting materials to the beneficial owners.
Availability of Report on Form 10-K
Copies of our Annual Report on
Form 10-K for the year ended December 31, 2018, including financial
statements and schedules, are available on our website at
http://www.tenaxthera.com and will be provided upon written
request, without charge, to any person whose proxy is being
solicited. Written requests should be made to Tenax Therapeutics,
Inc., Attn: Investor Relations, ONE Copley Parkway, Suite 490,
Morrisville, North Carolina 27560.
Stockholders Sharing the Same Last Name and Address
Only
one annual report or proxy statement, as applicable, may be
delivered to multiple stockholders sharing an address unless we
have received contrary instructions from one or more of the
stockholders. We will deliver promptly upon written or oral request
a separate copy of the annual report or proxy statement, as
applicable, to a stockholder at a shared address to which a single
copy was delivered. Requests for additional copies should be
directed to Investor Relations by e-mail addressed to
n.hecox@tenaxthera.com, by mail addressed to Tenax Therapeutics,
Inc., Attn: Investor Relations, ONE Copley Parkway, Suite 490,
Morrisville, North Carolina 27560, or by telephone at (919)
855-2100. Stockholders sharing an address and currently receiving a
single copy may contact Investor Relations as described above to
request that multiple copies be delivered in future years.
Stockholders sharing an address and currently receiving multiple
copies may request delivery of a single copy in future years by
contacting Investor Relations as described above.
REQUESTS FOR DIRECTIONS TO OUR COMPANY’S ANNUAL
MEETING
The
2019 Annual Meeting of Stockholders will be held on
June 13, 2019
at the offices of Tenax
Therapeutics, Inc. located at ONE Copley Parkway, Suite 490,
Morrisville, North Carolina 27560 at
9:00 a.m.,
Eastern Daylight Time. Requests
for directions to the meeting location may be directed to Tenax
Therapeutics, Inc., Attn: Investor Relations, ONE Copley Parkway,
Suite 490, Morrisville, North Carolina 27560.
Appendix A
Tenax Therapeutics, Inc.
2016 Stock Incentive Plan
(As adopted on April 21, 2016 and approved by stockholders on June
16, 2016)
Article
1.
Establishment, Purpose, and Duration
1.1
Establishment
.
Tenax Therapeutics, Inc. (the “Company”) hereby
establishes an incentive compensation plan to be known as the Tenax
Therapeutics, Inc. 2016 Stock Incentive Plan (the
“Plan”), as set forth in this document. The Plan
permits the grant of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock, Restricted
Stock Units, Performance Shares, Performance Units, Cash-Based
Awards,
and Other
Stock-Based Awards. The Plan shall become effective on the date
that it is approved by the Company’s shareholders (the
“Effective Date”) and remain in effect as provided in
Section 1.3 hereof.
1.2
Purpose
of the Plan
. The purpose of the Plan is to advance the
interests of the Company and its shareholders through Awards that
give Employees, Directors and Third Party Service Providers a
personal stake in the Company’s growth, development and
financial success. Awards under the Plan will motivate Employees,
Directors and Third Party Service Providers to devote their best
efforts to the business of the Company. They will also help the
Company attract and retain the services of Employees, Directors and
Third Party Service Providers who are in a position to make
significant contributions to the Company’s future success and
align them with shareholder interests.
1.3
Duration
of the Plan
. Unless sooner terminated as provided herein,
the Plan shall terminate ten (10) years from the Effective Date.
After the Plan’s termination, no new Awards may be granted,
but Awards previously granted shall remain outstanding in
accordance with their applicable terms and conditions, including
the terms and conditions of the Plan. Notwithstanding the
foregoing, no Incentive Stock Options may be granted more than ten
(10) years after the earlier of: (a) the date the Plan is adopted
by the Board, or (b) the Effective Date.
Article
2.
Definitions
Whenever used in
this Plan, the following terms shall have the meanings set forth
below, and when the meaning is intended, the initial letter of the
word shall be capitalized:
2.1
“Affiliate”
shall mean any corporation or other entity (including, but not
limited to, a partnership or a limited liability company) that is
affiliated with the Company through stock or equity ownership or
otherwise, and is designated as an Affiliate for purposes of this
Plan by the Committee.
2.2
“Annual
Award Limit”
or
“Annual Award Limits”
have
the meaning set forth in Section 4.3.
2.3
“Award”
means, individually or collectively, a grant under this Plan
of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units,
Performance Shares, Performance Units, Cash-Based Awards, or Other
Stock-Based Awards, in each case subject to the terms of this
Plan.
2.4
“Award
Agreement”
means either: (a) a written agreement
entered into by the Company and a Participant setting forth the
terms and provisions applicable to an Award granted under this
Plan, or (b) a written or electronic statement issued by the
Company to a Participant describing the terms and provisions of
such Award, including any amendment or modification thereof. The
Committee may provide for the use of electronic, Internet, or other
nonpaper Award Agreements, and the use of electronic, Internet, or
other nonpaper means for the acceptance thereof and actions
thereunder by a Participant.
2.5
“Beneficial
Owner”
or
“Beneficial Ownership”
shall
have the meaning ascribed to such terms in Rule 13d-3 promulgated
under the Exchange Act.
2.6
“Board”
or
“Board of
Directors”
means the Board of Directors of
the Company.
2.7
“Cash-Based
Award”
means an Award, denominated in cash, granted to
a Participant as described in Article 10.
2.8
“Cause”
shall have the meaning ascribed thereto in any employment agreement
between the Company or any of its subsidiaries and the Participant,
or, if there is no employment agreement or if any such employment
agreement does not contain a definition of “cause”,
then Cause shall mean a finding by the Committee that the
Participant has (i) been charged with a felony or a crime involving
moral turpitude, (ii) committed an act of fraud or embezzlement
against the Company or its subsidiaries, (iii) materially violated
any policy of the Company or its subsidiaries, (iv) failed, refused
or neglected to substantially perform their duties (other than by
reason of a physical or mental impairment) or to implement the
directives of the Company, or (v) willfully engaged in conduct that
is materially injurious to the Company, monetarily or
otherwise.
2.9
“
Change
in Control
” for purposes of this Plan means the
happening of any of the following:
(i)
When any
“person” as such term is used in Section 13(d) and
14(d) of the Exchange Act (other than the Company, a Subsidiary or
a Company benefit plan, including any trustee of such plan acting
as a trustee) is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing fifty percent
(50%) or more of the combined voting power of the Company’s
then outstanding securities entitled to vote generally in the
election of directors;
(ii)
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) at
least fifty percent (50%) of the total voting power represented by
the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the
shareholders of the Company approve an agreement for the sale or
disposition by the Company of all or substantially all the
Company’s assets; or
(iii)
A change in the
composition of the Board of Directors of the Company occurring
within a two-year period, as a result of which fewer than a
majority of the directors are Incumbent Directors. “Incumbent
Directors” for such purposes shall mean non-executive
Directors who either (A) are Directors of the Company as of the
date the Plan is approved by shareholders, or (B) are elected, or
nominated for election to the Board with the affirmative votes of
at least a majority of the Incumbent Directors at the time of such
election or nomination (but shall 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).
Notwithstanding the
foregoing, an Award that is subject to Code Section 409A will not
be paid or settled upon a Change in Control unless the Change in
Control constitutes a “change in control event” under
Code Section 409A and Treasury Regulation Section
1.409A-3(i)(5).
2.10
“Change
in Control Price”
means the price per Share paid in
conjunction with any transaction resulting in a Change in Control
(as determined in good faith by the Committee if any part of the
offered price is payable other than in cash) or, in the case of a
Change in Control occurring solely by reason of events not related
to a transfer of Shares, the highest Fair Market Value of a Share
on any of the thirty (30) consecutive trading days ending on the
last trading day before the Change in Control occurs.
2.11
“Code”
means the U.S. Internal Revenue Code of 1986, as amended from time
to time. For purposes of this Plan, references to sections of the
Code shall be deemed to include references to any applicable
regulations thereunder and any successor or similar
provision.
2.12
“Committee”
means the Compensation Committee of the Board or a subcommittee
thereof, or any other committee designated by the Board to
administer this Plan. The members of the Committee shall be
appointed from time to time by and shall serve at the discretion of
the Board. If the Committee does not exist or cannot function for
any reason, the Board may take any action under the Plan that would
otherwise be the responsibility of the Committee in which case
references to the “Committee” shall be deemed
references to the Board.
2.13
“Company”
means Tenax Therapeutics, Inc., a Delaware corporation, and any
successor thereto as provided in Article 19
herein.
2.14
“
Covered
Employee
” means any Employee who is or may become a
“Covered Employee,” as defined in Code Section 162(m),
and who is designated, either as an individual Employee or class of
Employees, by the Committee within the shorter of: (a) ninety (90)
days after the beginning of the Performance Period, or (b)
twenty-five percent (25%) of the Performance Period having elapsed,
as a “Covered Employee” under this Plan for such
applicable Performance Period.
2.15
“Director”
means any individual who is a member of the Board of Directors of
the Company.
2.16
“Effective
Date”
has the meaning set forth in Section
1.1.
2.17
“Employee”
means any individual who is providing, or has agreed to provide,
services to the Company, an Affiliate or a Subsidiary, as an
employee. An Employee shall not include any individual during any
period he or she is classified or treated by the Company, Affiliate
or Subsidiary as an independent contractor, a consultant, or any
employee of an employment, consulting, or temporary agency or any
other entity other than the Company, Affiliate or Subsidiary,
without regard to whether such individual is subsequently
determined to have been, or is subsequently retroactively
reclassified as a common-law employee of the Company, Affiliate or
Subsidiary during such period.
2.18
“Exchange
Act”
means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act
thereto.
2.19
“
Fair
Market Value
” or “
FMV
” means the closing price of a
Share reported on an established stock exchange on the applicable
date, the preceding trading day, the next succeeding trading day,
or an average of trading days, as determined by the Committee in
its discretion. In the event Shares are not publicly traded at the
time a determination of their value is required to be made
hereunder, the determination of their Fair Market Value shall be
made in good faith by the Committee, taking into account such
factors as the Committee deems appropriate.
2.20
“Full-Value
Award”
means an Award other than in the form of an
ISO, NQSO, or SAR, and which is settled by the issuance of
Shares.
2.21
“Grant
Price”
means the price established at the time of
grant of an SAR pursuant to Article 7, used to determine whether
there is any payment due upon exercise of the SAR.
2.22
“Incentive
Stock Option” or “ISO”
means an Option to
purchase Shares granted under Article 6 to an Employee and that is
designated as an Incentive Stock Option and that is intended
to meet the requirements of Code Section 422 or any successor
provision.
2.23
“Insider”
shall mean an individual who is, on the relevant date, an officer
or Director of the Company, or a more than ten percent (10%)
Beneficial Owner of any class of the Company’s equity
securities that is registered pursuant to Section 12 of the
Exchange Act, as determined by the Board or Committee in accordance
with Section 16 of the Exchange Act.
2.24
“Nonemployee
Director”
means a Director who is not an
Employee.
2.25
“Nonemployee
Director Award”
means any NQSO, SAR, or Full-Value
Award granted, whether singly, in combination, or in tandem, to a
Participant who is a Nonemployee Director pursuant to such
applicable terms, conditions, and limitations as the Board or
Committee may establish in accordance with this Plan.
2.26
“Nonqualified
Stock Option”
or
“NQSO”
means an Option
that is not intended to meet the requirements of Code
Section 422, or that otherwise does not meet such
requirements.
2.27
“Option”
means an Incentive Stock Option or a Nonqualified
Stock Option, as described in Article 6.
2.28
“Option
Price”
means the price at which a Share may be
purchased by a Participant pursuant to an Option.
2.29
“Other
Stock-Based Award”
means an equity-based or
equity-related Award not otherwise described by the terms of this
Plan, granted pursuant to Article 10.
2.30
“Participant”
means any eligible individual as set forth in Article 5 to whom an
Award is granted.
2.31
“Performance-Based
Compensation”
means compensation under an Award that
is intended to satisfy the requirements of Code Section 162(m) for
certain performance-based compensation paid to Covered Employees.
Notwithstanding the foregoing, nothing in this Plan shall be
construed to mean that an Award which does not satisfy the
requirements for performance-based compensation under Code Section
162(m) does not constitute performance-based compensation for other
purposes, including Code Section 409A.
2.32
“Performance
Measures”
means measures as described in Article 12 on
which the performance goals are based and which are approved by the
Company’s shareholders pursuant to this Plan in order to
qualify Awards as Performance-Based Compensation.
2.33
“Performance
Period”
means the period of time during which the
performance goals must be met in order to determine the degree of
payout and/or vesting with respect to an Award.
2.34
“Performance
Share”
means an Award under Article 9 herein and
subject to the terms of this Plan, denominated in Shares, the value
of which at the time it is payable is determined as a function of
the extent to which corresponding performance criteria or
Performance Measure(s), as applicable, have been
achieved.
2.35
“Performance
Unit”
means an Award under Article 9 herein and
subject to the terms of this Plan, denominated in units, the value
of which at the time it is payable is determined as a function of
the extent to which corresponding performance criteria or
Performance Measure(s), as applicable, have been
achieved.
2.36
“Period
of Restriction”
means the period when Restricted Stock
or Restricted Stock Units are subject to a substantial risk of
forfeiture (based on the passage of time, the achievement of
performance goals, or the occurrence of other events as determined
by the Committee, in its discretion), as provided in Article
8.
2.37
“Person”
shall have the meaning ascribed to such term in Section 3(a)(9) of
the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a “group” as defined in Section 13(d)
thereof.
2.38
“Plan”
means this Tenax Therapeutics, Inc. 2016 Stock Incentive
Plan.
2.39
“Plan
Year”
means the calendar year.
2.40
“Restricted
Stock
” means an Award of Shares granted to a
Participant pursuant to Article 8.
2.41
“Restricted
Stock Unit”
means an Award granted to a Participant
pursuant to Article 8, except no Shares are actually awarded to the
Participant on the date of grant.
2.42
“Share”
means a share of common stock of the Company, par value $0.0001 per
share.
2.43
“Stock
Appreciation Right”
or “
SAR
” means an Award, designated as
an SAR, pursuant to the terms of Article 7 herein.
2.44
“Subsidiary”
means any corporation or other entity, whether domestic or foreign,
in which the Company has or obtains, directly or indirectly, a
proprietary interest of more than fifty percent (50%) by reason of
stock ownership or otherwise.
2.45
“Termination”
or
“Terminate”
means: (a) if a Participant is an
Employee, cessation of the employee-employer relationship between a
Participant and the Company and all Affiliates and Subsidiaries for
any reason; (b) if a Participant is a Nonemployee Director,
termination of the Nonemployee Director’s service on the
Board for any reason; and (c)
if a Participant is
a Third Party Service Provider, termination of the Third Party
Service Provider’s service relationship with the Company and
all Affiliates and Subsidiaries for any reason
.
Notwithstanding the foregoing, with respect to any Award subject to
Code Section 409A, any such cessation or termination also must
constitute a “separation from service” as defined under
Treasury Regulation Section 1.409A-1(h).
2.46
“Third
Party Service Provider”
means any consultant, agent,
advisor, or independent contractor who renders services to the
Company, a Subsidiary, or an Affiliate that (a) are not in
connection with the offer or sale of the Company’s securities
in a capital market raising transaction, and (b) do not directly or
indirectly promote or maintain a market for the Company’s
securities.
Article
3.
Administration
3.1
General
.
The Committee shall be responsible for administering the Plan,
subject to this Article 3 and the other provisions of this Plan.
The Committee may employ attorneys, consultants, accountants,
agents, and other advisors, any of whom may be an Employee, and the
Committee, the Company, and its officers and Directors shall be
entitled to rely upon the advice, opinions, or valuations of any
such advisors. All actions taken and all interpretations and
determinations made by the Committee shall be final and binding
upon the Participants, the Company, and all other interested
individuals.
3.2
Authority
of the Committee
. Subject to any express provisions set
forth in the Plan, the Committee shall have full and exclusive
discretionary power to (i) designate Employees, Directors and Third
Party Service Providers to be recipients of Awards; (ii) determine
the type and size of Awards; (iii) determine the terms and
conditions of Awards; (iv) certify satisfaction of performance
goals for purposes of satisfying the requirements of Code Section
162(m), if applicable; (v) construe and interpret the terms and the
intent of the Plan and any Award Agreement or other instrument
entered into under the Plan; (vi) establish, amend, or waive rules
and regulations for the Plan’s administration; (vii) subject
to the provisions of Section 4.4., authorize conversion or
substitution under the Plan of any or all outstanding option or
other awards held by service providers of an entity acquired by the
Company on terms determined by the Committee (without regard to
limitations set forth in Section 6.3 and 7.5); (viii) subject to
the provisions of Articles 15 and 17, amend the terms and
conditions of any outstanding Award; (ix) grant Awards as an
alternative to, or as the form of payment for, grants or rights
earned or due under compensation plans or similar arrangements of
the Company; and (x) make any other determination and take any
other action that it deems necessary or desirable for the
administration of the Plan.
3.3
Delegation
.
To
the extent permitted by law and any applicable rules of a stock
exchange
,
the Committee may,
by resolution, authorize one or more officers of the Company to do
one or both of the following on the same basis as can the
Committee: (a) designate Employees and Third Party Service
Providers to be recipients of Awards; and (b) determine the type
and size of any such Awards; provided, however: (i) the authority
to make Awards to any Nonemployee Director or to any Employee who
is considered an Insider may not be delegated; (ii) the resolution
providing such authorization shall set forth the total number of
Shares and Awards such officer(s) may grant to any one Participant
and in the aggregate; and (iii) the officer(s) shall report
periodically to the Committee regarding the nature and scope of the
Awards granted pursuant to the authority delegated.
Article
4.
Shares Subject to This Plan and Maximum Awards
4.1
Number
of Shares Available for Awards
. Subject to adjustment as
provided in Section 4.4 herein, the maximum number of Shares
currently available for issuance under this Plan (the “Share
Authorization”) shall be three million (3,000,000) Shares.
All such Shares shall be available for issuance in the form of any
of the Awards authorized under the Plan, including, but not limited
to, Full Value Awards or ISOs, as determined by the Committee in
its discretion. An individual Nonemployee Director shall not be
granted Awards in any Plan Year that would result in the Company
recognizing an aggregate compensation expense for such Awards in
excess of five hundred thousand dollars (
$500,000
).
4.2
Share
Usage
. Shares covered by an Award shall be reserved for that
award while the reward remains outstanding but shall only be
counted as used to the extent they are actually issued; provided,
however, that the full number of Stock Appreciation Rights granted
that are to be settled by the issuance of Shares shall be counted
against the number of Shares available for award under the Plan,
regardless of the number of Shares actually issued upon settlement
of such Stock Appreciation Rights. Further, any Shares withheld to
satisfy tax withholding obligations on Awards issued under the Plan
and Shares tendered to pay the exercise price of Awards under the
Plan will not be eligible to be returned as available Shares under
the Plan. Any Shares related to Awards which terminate by
expiration, forfeiture, cancellation, or otherwise without the
issuance of such Shares, are settled in cash in lieu of Shares, or
are exchanged with the Committee’s permission, prior to the
issuance of Shares, for Awards not involving Shares, shall be
available again for grant under this Plan.
4.3
Annual
Award Limits
. Unless and until the Committee determines that
an Award to a Covered Employee shall not be designed to qualify as
Performance-Based Compensation, the following limits (each an
“Annual Award Limit” and, collectively, “Annual
Award Limits”) shall apply to grants of such Awards under
this Plan:
(a)
Options: The
maximum aggregate number of Shares subject to Options granted in
any one Plan Year to any one Participant shall be one million
(1,000,000), as adjusted pursuant to Sections 4.4 and/or
17.2.
(b)
SARs: The maximum
aggregate number of Shares subject to Stock Appreciation Rights
granted in any one Plan Year to any one Participant shall be one
million (1,000,000), as adjusted pursuant to Sections 4.4 and/or
17.2.
(c)
Restricted Stock or
Restricted Stock Units: The maximum aggregate Awards of Restricted
Stock or Restricted Stock Units in any one Plan Year to any one
Participant shall be five hundred thousand (500,000) Shares, as
adjusted pursuant to Sections 4.4 and/or 17.2.
(d)
Performance Units
or Performance Shares: The maximum aggregate Awards of Performance
Units or Performance Shares that a Participant may receive in any
one Plan Year shall be five hundred thousand (500,000) Shares, as
adjusted pursuant to Sections 4.4 and/or 17.2, or equal to the
value of five hundred thousand (500,000) Shares, as adjusted
pursuant to Sections 4.4 and/or 17.2, determined as of the date of
vesting or payout, as applicable.
(e)
Cash-Based Awards:
The maximum aggregate amount awarded or credited with respect to
Cash-Based Awards to any one Participant in any one Plan Year may
not exceed the greater of the value of four million dollars
($4,000,000) or one million (1,000,000) Shares, as adjusted
pursuant to Sections 4.4 and/or 17.2, determined as of the date of
vesting or payout, as applicable.
(f)
Other Stock-Based
Awards: The maximum aggregate grants with respect to Other
Stock-Based Awards pursuant to Section 10.2 in any one Plan Year to
any one Participant shall be one million (1,000,000) Shares, as
adjusted pursuant to Sections 4.4 and/or 17.2.
4.4
Adjustments
in Authorized Shares.
In the event any recapitalization,
forward or reverse split, reorganization, merger, consolidation,
incorporation, spin-off, combination, repurchase, exchange of
Shares or other securities, dividend or distribution of Shares or
other special and nonrecurring dividend or distribution (other than
cash dividends or distributions), liquidation, dissolution, sale or
purchase of assets or other similar transactions or events, affects
the Shares such that an adjustment is determined by the Committee
to be appropriate in order to prevent dilution or enlargement of
the rights of Grantees under the Plan, then the Committee shall
equitably adjust any or all of (i) the number and kind of
securities deemed to be available thereafter for grants of Awards
under this Plan or under particular forms of Awards, (ii) the
number and kind of securities subject to outstanding Awards, (iii)
the Option Price or Grant Price applicable to outstanding Awards,
(iv) the Annual Award Limits or (v) other value determinations
applicable to outstanding Awards.
In
addition, the Committee is authorized to make adjustments in the
terms and conditions of, and the criteria included in, outstanding
Awards (including, without limitation, acceleration of the
expiration date of such Awards, cancellation of such Awards in
exchange for the intrinsic (i.e., in-the-money) value, if any, of
the vested portion thereof, substitution of outstanding Awards
using securities or other obligations of a successor or other
entity, modifications of performance goals, changes in the length
of Performance Periods, or payment of a bonus or dividend
equivalent) in recognition of unusual or nonrecurring events
(including, without limitation, a Change in Control of the Company,
an event described in the preceding sentence, or a cash dividend or
distribution) affecting the Company or any subsidiary of the
Company or the financial statements of the Company or any
subsidiary of the Company, or in response to changes in applicable
laws, regulations, or accounting principles.
Notwithstanding
anything to the contrary in this Section 4.4, an adjustment to an
Option or SAR shall be made only to the extent such adjustment
complies with the requirements of Code Section 409A.
Subject
to the provisions of Article 17 and notwithstanding anything else
herein to the contrary, without affecting the number of Shares
reserved or available hereunder, the Committee may authorize the
issuance or assumption of benefits under this Plan in connection
with any merger, consolidation, acquisition of property or stock,
or reorganization upon such terms and conditions as it may deem
appropriate (including, but not limited to, a conversion of equity
awards into Awards under this Plan in a manner consistent with
applicable accounting standards, subject to compliance with the
rules under Code Sections, 422 and 424, as and where
applicable.
Article
5.
Eligibility and Participation
5.1
Eligibility
.
Individuals eligible to participate in this Plan include all
Employees, Directors and Third Party Service Providers. An Employee
on “leave of absence” (as such term is defined in the
Company’s employee handbook, or, if no such definition
exists, as otherwise defined by the Committee in its direction) may
be considered as still in the employ of the Company, an Affiliate
or Subsidiary for purposes of eligibility for participation in the
Plan, as well as continued vesting of Awards under the Plan, if so
determined by the Committee in its discretion.
5.2
Actual
Participation
. Subject to the provisions of this Plan, the
Committee may, from time to time in its sole discretion, select
from the individuals eligible to participate, those to whom Awards
shall be granted.
Article
6.
Stock Options
6.1
Grant
of Options
. Subject to the terms and provisions of this
Plan, Options may be granted to Participants in such number, and
upon such terms, and at any time and from time to time as
shall be determined by the Committee, in its sole discretion,
provided that ISOs may be granted only to eligible Employees of the
Company or of any parent or subsidiary corporation (as permitted
under Code Sections 422 and 424). An Employee who is employed by an
Affiliate and/or Subsidiary and is subject to Code Section 409A may
only be granted Options to the extent the Affiliate and/or
Subsidiary is part of the Company’s consolidated group for
United States federal tax purposes.
6.2
Award
Agreement
. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the maximum duration
of the Option, the number of Shares to which the Option pertains,
the conditions upon which an Option shall become vested and
exercisable, and such other provisions as the Committee shall
determine which are not inconsistent with the terms of this Plan.
The Award Agreement also shall specify whether the Option is
intended to be an ISO or an NQSO.
6.3
Option
Price
. The Option Price for each grant of an Option under
this Plan shall be determined by the Committee in its sole
discretion and shall be specified in the Award Agreement; provided,
however, the Option Price on the date of grant must be at least
equal to one hundred percent (100%) of the FMV of the Shares as
determined on the date of grant; provided, further, however, that
the Option Price must be at least equal to one hundred and ten
percent (110%) of the FMV of a Share on the date of grant with
respect to any ISO issued to a Participant who, on the date of
grant, owns (as defined in Code Section 424(d)) stock possessing
more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or of its subsidiary
corporation (as defined in Code Section 424(f)) (a “10%
Shareholder”).
6.4
Term
of Options
. Each Option granted to a Participant shall
expire at such time as the Committee shall determine at the time of
grant; provided, however, no Option shall be exercisable later than
the tenth (10
th
) anniversary date
of its grant; provided, further, however, that no ISO granted
to a 10% Shareholder shall be exercisable later than the day before
the fifth (5th) anniversary of its date of
grant.”)
6.5
Exercise
of Options
. Options granted under this Article 6 shall
be exercisable at such times and be subject to such restrictions
and conditions as the Committee shall in each instance approve,
which terms and restrictions need not be the same for each grant or
for each Participant. Notwithstanding anything in this Plan to the
contrary, to the extent that the aggregate FMV of the Shares
(determined as of the date of grant of the applicable ISO) with
respect to which ISOs are exercisable for the first time by a
Participant during any calendar year (under all plans of the
Company and its subsidiary corporations (as defined in
Code Section 424(f)) exceeds $100,000, such Options shall be
treated as NQSOs.
Options
granted under this Article 6 shall be exercised by the delivery of
a notice of exercise to the Company or an agent designated by the
Company in a form specified or accepted by the Committee setting
forth the number of Shares with respect to which the Option is to
be exercised, accompanied by full payment for the Shares, or by
complying with any alternative exercise procedures the Committee
may authorize.
6.6
Payment
.
A condition of the issuance of the Shares as to which an Option
shall be exercised shall be the payment of the Option Price. The
Option Price of any Option shall be payable to the Company in full
either: (a) in cash or its equivalent; (b) by tendering
(either by actual delivery or attestation) previously acquired
Shares having an aggregate Fair Market Value at the time of
exercise equal to the Option Price (provided that the Committee may
in its discretion require the Shares that are tendered have been
held by the Participant for at certain period of time prior to
their tender to satisfy the Option Price if acquired under this
Plan or any other compensation plan maintained by the Company or
purchased on the open market); (c) by a cashless (broker-assisted)
exercise; (d) by a combination of (a), (b), and/or (c); or (e) any
other method approved or accepted by the Committee in its sole
discretion.
Unless
otherwise determined by the Committee, all payments under all of
the methods indicated above shall be paid in United States
dollars.
6.7
Restrictions
on Shares
. The Committee may impose such restrictions on any
Shares acquired pursuant to the exercise of an Option granted under
this Article 6 as it deems advisable, including, without
limitation, minimum holding period requirements, restrictions under
applicable federal securities laws, under the requirements of any
stock exchange or market upon which such Shares are then listed
and/or traded, or under any blue sky or state securities laws
as may be applicable to such Shares.
6.8
Termination
of Employment/Service
.
Each Participant’s Award
Agreement shall set forth the extent to which the Participant shall
have the right to exercise the Option following the
Participant’s Termination. Such provisions shall be
determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each Participant,
need not be uniform among all Options issued pursuant to this
Article 6, and may reflect distinctions based on the reasons for
Termination.
6.9
Notification
of Disqualifying Disposition.
If any Participant shall make
any disposition of Shares issued pursuant to the exercise of an ISO
under the circumstances described in Code Section 421(b) (relating
to certain disqualifying dispositions), such Participant shall
notify the Company of such disposition within ten (10) calendar
days thereof.
Article
7.
Stock Appreciation Rights
7.1
Grant
of SARs
. Subject to the terms and conditions of this Plan,
SARs may be granted to Participants at any time and from time to
time as shall be determined by the Committee. However, an Employee
who is employed by an Affiliate and/or Subsidiary and is subject to
Code Section 409A may only be granted SARs to the extent the
Affiliate and/or the Subsidiary is part of the Company’s
consolidated group for United States federal tax
purposes.
Subject
to the terms and conditions of this Plan, the Committee shall have
complete discretion in determining the number of SARs granted to
each Participant and, consistent with the provisions of this Plan,
in determining the terms and conditions pertaining to such
SARs.
The
Grant Price for each grant of a SAR shall be determined by the
Committee and shall be specified in the Award Agreement; provided,
however, the Grant Price on the date of grant must be at least
equal to one hundred percent (100%) of the FMV of the Shares as
determined on the date of grant.
7.2
SAR
Agreement
. Each SAR Award shall be evidenced by an Award
Agreement that shall specify the Grant Price, the term of the SAR,
and such other provisions as the Committee shall
determine.
7.3
Term
of SAR
. The term of an SAR granted under this Plan shall be
determined by the Committee, in its sole discretion, and except as
determined otherwise by the Committee and specified in the SAR
Award Agreement, no SAR shall be exercisable later than the tenth
(10
th
)
anniversary date of its grant.
7.4
Exercise
of SARs
. SARs may be exercised upon whatever terms and
conditions the Committee, in its sole discretion,
imposes.
7.5
Settlement
of SAR
. Upon the exercise of an SAR, a Participant shall be
entitled to receive payment from the Company in an amount
determined by multiplying:
(a)
The excess of the
Fair Market Value of a Share on the date of exercise over the Grant
Price; by
(b)
The number of
Shares with respect to which the SAR is exercised.
At the
discretion of the Committee, the payment upon SAR exercise may be
in cash, Shares, or any combination thereof, or in any other manner
approved by the Committee in its sole discretion. The
Committee’s determination regarding the form of SAR payout
shall be set forth in the Award Agreement pertaining to the grant
of the SAR.
7.6
Termination
of Employment/Service
. Each Award Agreement shall set forth
the extent to which the Participant shall have the right to
exercise the SAR following the Participant’s Termination.
Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into
with Participants, need not be uniform among all SARs issued
pursuant to this Plan, and may reflect distinctions based on the
reasons for Termination.
7.7
Other
Restrictions.
The Committee may impose such restrictions on
Shares received upon exercise of a SAR granted pursuant to this
Plan as it deems advisable. These restrictions may include, but
shall not be limited to, a requirement that the Participant hold
the Shares received upon exercise of an SAR for a specified period
of time.
Article
8.
Restricted Stock and Restricted Stock Units
8.1
Grant
of Restricted Stock or Restricted Stock Units
. Subject to
the terms and provisions of this Plan, the Committee, at any time
and from time to time, may grant Shares of Restricted Stock and/or
Restricted Stock Units to Participants in such amounts as the
Committee shall determine. Restricted Stock Units shall be similar
to Restricted Stock except that no Shares are actually awarded to
the Participant on the date of grant.
8.2
Restricted
Stock or Restricted Stock Unit Agreement
. Each Restricted
Stock and/or Restricted Stock Unit grant shall be evidenced by an
Award Agreement that shall specify the Period(s) of Restriction,
the number of Shares of Restricted Stock or the number of
Restricted Stock Units granted, and such other provisions as the
Committee shall determine.
8.3
Other
Restrictions
. The Committee may impose such conditions
and/or restrictions on Shares of Restricted Stock granted pursuant
to this Plan and Shares received upon settlement of a Restricted
Stock Unit as it deems advisable including, without limitation, a
requirement that Participants pay a stipulated purchase price for
each Share of Restricted Stock or each Restricted Stock Unit,
restrictions based upon the achievement of specific performance
goals, time-based restrictions on vesting following the attainment
of the performance goals, time-based restrictions, and/or
restrictions under applicable laws or under the requirements of any
stock exchange or market upon which such Shares are listed or
traded, or holding requirements or sale restrictions placed on the
Shares by the Company upon vesting of such Restricted Stock or
Restricted Stock Units.
To the
extent deemed appropriate by the Committee, the Company may retain
the certificates representing Shares of Restricted Stock in the
Company’s possession until such time as all conditions and/or
restrictions applicable to such Shares have been satisfied or
lapse.
Except
as otherwise provided in this Article 8, Shares of Restricted Stock
covered by each Restricted Stock Award shall become freely
transferable by the Participant after all conditions and
restrictions applicable to such Shares have been satisfied or lapse
(including satisfaction of any applicable tax withholding
obligations), and Restricted Stock Units shall be paid in cash,
Shares, or a combination of cash and Shares as the Committee, in
its sole discretion, shall determine.
8.4
Certificate
Legend
. In addition to any legends placed on certificates
pursuant to Section 8.3, each certificate representing Shares
of Restricted Stock granted pursuant to this Plan may bear a legend
such as the following or as otherwise determined by the Committee
in its sole discretion:
“The
transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions
(including forfeiture) of the Tenax Therapeutics, Inc. 2016 Stock
Incentive Plan and a Restricted Stock Agreement. Copies of such
Plan and Agreement are on file at the offices of Tenax
Therapeutics, Inc., One Copley Parkway, Suite 490, Morrisville,
North Carolina 27560.”
8.5
Voting
Rights
. Unless otherwise determined by the Committee and set
forth in a Participant’s Award Agreement, to the extent
permitted or required by law, as determined by the Committee,
Participants holding Shares of Restricted Stock granted hereunder
may be granted the right to exercise full voting rights with
respect to those Shares during the Period of Restriction. A
Participant shall have no voting rights with respect to any
Restricted Stock Units granted hereunder.
8.6
Termination
of Employment/Service
. Each Award Agreement shall set forth
the extent to which the Participant shall have the right to retain
Restricted Stock and/or Restricted Stock Units following the
Participant’s Termination. Such provisions shall be
determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each Participant,
need not be uniform among all Shares of Restricted Stock or
Restricted Stock Units issued pursuant to this Plan, and may
reflect distinctions based on the reasons for
Termination.
8.7
Section
83(b) Election
. The Committee may provide in an Award
Agreement that the Award of Restricted Stock is conditioned upon
the Participant making or refraining from making an election with
respect to the Award under Code Section 83(b). If a Participant
makes an election pursuant to Code Section 83(b) concerning a
Restricted Stock Award, the Participant shall be required to file
promptly a copy of such election with the Company.
Article
9.
Performance Units / Performance Shares
9.1
Grant
of Performance Units / Performance Shares
. Subject to the
terms and provisions of this Plan, the Committee, at any time and
from time to time, may grant Performance Units and/or Performance
Shares to Participants in such amounts and upon such terms as the
Committee shall determine.
9.2
Value
of Performance Units / Performance Shares
. Each Performance
Unit shall have an initial value that is established by the
Committee at the time of grant. Each Performance Share shall have
an initial value equal to the Fair Market Value of a Share on the
date of grant. The Committee shall set performance goals in its
discretion which, depending on the extent to which they are met,
will determine the value and/or number of Performance
Units/Performance Shares that will be paid out to the
Participant.
9.3
Earning
of Performance Units / Performance Shares
. Subject to the
terms of this Plan, after the applicable Performance Period
has ended, the holder of Performance Units/Performance Shares shall
be entitled to receive payout on the value and number of
Performance Units/Performance Shares earned by the Participant over
the Performance Period, to be determined as a function of the
extent to which the corresponding performance goals have been
achieved.
9.4
Form
and Timing of Payment of Performance Units / Performance
Shares
. Payment of earned Performance Units/Performance
Shares shall be as determined by the Committee and as evidenced in
the Award Agreement. Subject to the terms of this Plan,
the Committee, in its sole discretion, may pay
earned Performance Units/Performance Shares in the form of
cash or in Shares (or in a combination thereof) equal to the value
of the earned Performance Units/Performance Shares at the close of
the applicable Performance Period, or as soon as practicable after
the end of the Performance Period. Any Shares may be granted
subject to any restrictions deemed appropriate by the Committee.
The determination of the Committee with respect to the form of
payout of such Awards shall be set forth in the Award Agreement
pertaining to the grant of the Award.
9.5
Termination
of Employment / Service
. Each Award Agreement shall set
forth the extent to which the Participant shall have the right to
retain Performance Units and/or Performance Shares following the
Participant’s Termination. Such provisions shall be
determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each Participant,
need not be uniform among all Awards of Performance Units or
Performance Shares issued pursuant to this Plan, and may reflect
distinctions based on the reasons for Termination.
Article
10.
Cash-Based Awards and Other Stock-Based Awards
10.1
Grant
of Cash-Based Awards
. Subject to the terms and provisions of
the Plan, the Committee, at any time and from time to time,
may grant Cash-Based Awards to Participants in such amounts and
upon such terms as the Committee may determine.
10.2
Other
Stock-Based Awards
. The Committee may grant other types of
equity-based or equity-related Awards not otherwise described by
the terms of this Plan (including the grant or offer for sale of
unrestricted Shares) in such amounts and subject to such terms and
conditions as the Committee shall determine. Such Awards may
involve the transfer of actual Shares to Participants, or payment
in cash or otherwise of amounts based on the value of Shares, and
may include, without limitation, Awards designed to comply with or
take advantage of the applicable local laws of jurisdictions other
than the United States.
10.3
Value
of Cash-Based and Other Stock-Based Awards
. Each Cash-Based
Award shall specify a payment amount or payment range as determined
by the Committee. Each Other Stock-Based Award shall be expressed
in terms of Shares or units based on Shares, as determined by the
Committee. The Committee may establish performance goals in its
discretion. If the Committee exercises its discretion to establish
performance goals, the number and/or value of Cash-Based Awards or
Other Stock-Based Awards that will be paid out to the Participant
will depend on the extent to which the performance goals are
met.
10.4
Payment
of Cash-Based Awards and Other Stock-Based Awards; Restrictions on
Shares
. Payment, if any, with respect to a Cash-Based Award
or any Other Stock-Based Award shall be made in accordance with the
terms of the Award, in cash or Shares as the Committee determines.
Any Shares issued pursuant to this Article 10 shall be subject to
the restrictions set forth in the Award Agreement.
10.5
Termination
of Employment / Service
. The Committee shall determine the
extent to which the Participant shall have the right to receive
Cash-Based Awards or Other Stock-Based Awards following the
Participant’s Termination. Such provisions shall be
determined in the sole discretion of the Committee, such provisions
may be included in an agreement entered into with each Participant,
but need not be uniform among all Awards of Cash-Based Awards
or
Other Stock-Based
Awards issued pursuant to the Plan, and may reflect distinctions
based on the reasons for Termination.
Article
11.
Transferability and Forfeiture of Awards
11.1
Transfer
Restrictions
. Except as provided in Section 11.2 below,
during a Participant’s lifetime, his or her Awards shall be
exercisable only by the Participant or the Participant’s
legal representative. Awards shall not be transferable other than
by will or the laws of descent and distribution; no Awards shall be
subject, in whole or in part, to attachment, execution, or levy of
any kind; and any purported transfer in violation hereof shall be
null and void. The Committee may establish such procedures as it
deems appropriate for a Participant to designate a beneficiary to
whom any amounts payable or Shares deliverable in the event of, or
following, the Participant’s death, may be
provided.
11.2
Committee
Action.
The Committee may, in its discretion, determine that
notwithstanding Section 11.1, any or all Awards (other than ISOs)
shall be transferable to and exercisable by such transferees, and
subject to such terms and conditions, as the Committee may deem
appropriate; provided, however, no Award may be transferred for
value (as defined in the General Instructions to Form
S-8).
11.3
Forfeiture
of Awards.
Notwithstanding anything else to the contrary
contained herein, the Committee in granting any Award shall have
the full power and authority to determine whether, to what extent
and under what circumstances such Award shall be forfeited,
cancelled or suspended. Unless an Award Agreement includes
provisions expressly superseding the provisions of this Section
11.3, the provisions of this Section 11.3 shall apply to all
Awards. Any such forfeiture shall be effected by the Company in
such manner and to such degree as the Committee, in its sole
discretion, determines, and will in all events (including as to the
provisions of this Section 11.3) be subject to applicable
laws.
In
order to effect a forfeiture under this Section 11.3, the Committee
may require that the Participant sell Shares received upon exercise
or settlement of an Award to the Company or to such other person as
the Company may designate at such price and on such other terms and
conditions as the Committee in its sole discretion may require.
Further, as a condition of each Award, the Company shall have, and
each Participant shall be deemed to have given the Company, a proxy
on each Participant’s behalf, and each Participant shall be
required and be deemed to have agreed to execute any other
documents necessary or appropriate to carry out this Section
11.3.
Unless
otherwise specified by the Committee, in addition to any vesting or
other forfeiture or repurchase conditions that may apply to an
Award and Shares issued pursuant to an Award, each Award granted
under the Plan will be subject to the following forfeiture
conditions:
(a)
Breach of a Restrictive Covenant.
All
outstanding Awards and Shares issued pursuant to an Award held by
an Participant will be forfeited in their entirety (including as to
any portion of an Award or Shares subject thereto that are vested
or as to which any repurchase or resale rights or forfeiture
restrictions in favor of the Company or its designee with respect
to such Shares have previously lapsed) if the Participant breaches
any noncompetition, confidentiality or other restrictive covenant
that may apply to the Participant, as determined by the Committee
in its sole discretion;
provided
, that if a Participant has
sold Shares issued upon exercise or settlement of an Award within
six (6) months prior to the date on which the Participant would
otherwise have been required to forfeit such Shares or the Option
under this subsection (a) as a result of the Participant’s
breach, then the Company will be entitled to recover any and all
profits realized by the Participant in connection with such
sale.
(b)
Termination for Cause.
All outstanding
Awards and Shares issued pursuant to an Award held by a Participant
will be forfeited in their entirety (including as to any portion of
an Award or Shares subject thereto that are vested or as to which
any repurchase or resale rights or forfeiture restrictions in favor
of the Company or its designee have previously lapsed) if the
Participant’s employment or service is terminated by the
Company for Cause;
provided
,
however
, that if a Participant has sold
Shares issued upon exercise or settlement of an Award within six
(6) months prior to the date on which the Participant would
otherwise have been required to forfeit such Shares under this
subsection (b) as a result of termination of the
Participant’s employment or service for Cause, then the
Company will be entitled to recover any and all profits realized by
the Participant in connection with such sale; and
provided further
, that in the event the
Committee determines that it is necessary to establish whether
grounds exist for termination for Cause, the Award will be
suspended during any period required to conduct such determination,
meaning that the vesting, exercisability and/or lapse of
restrictions otherwise applicable to the Award will be tolled and
if grounds for such termination are determined to exist, the
forfeiture specified by this subsection (b) will apply as of the
date of suspension, and if no such grounds are determined to exist,
the Award will be reinstated on its original terms.
Article
12.
Performance Measures
12.1
Performance
Measures
. The performance goals upon which the payment or
vesting of an Award to a Covered Employee that is intended to
qualify as Performance-Based Compensation shall be limited to the
following Performance Measures:
(a)
Net earnings or net
income (before or after taxes);
(d)
Net sales or
revenue growth;
(e)
Net operating
profit (including, but not limited to, operating income and
operating surplus);
(f)
Return measures
(including, but not limited to, return on assets, capital, invested
capital, equity, sales, or revenue);
(g)
Cash flow
(including, but not limited to, operating cash flow, free cash
flow, cash generation, cash flow return on equity, and cash flow
return on investment);
(h)
Earnings before or
after taxes, interest, depreciation, and/or
amortization;
(i)
Gross,
contribution, or operating margins;
(j)
Share price
(including, but not limited to, growth measures and total
shareholder return);
(l)
Operating
efficiency (including, but not limited to, productivity
measurements);
(n)
Working capital
targets and change in working capital;
(o)
Economic value
added or EVA
®
(net operating
profit after tax minus the sum of capital multiplied by the cost of
capital); and
(p)
Segment income from
operations and income from operations.
(q)
Commercial
milestones
(r)
Clinical
development milestones
(s)
Regulatory
development milestones
Any
Performance Measure(s) may be used to measure the performance of
the Company, Subsidiary, and/or Affiliate as a whole or any
business unit of the Company, Subsidiary, and/or Affiliate or any
combination thereof, as the Committee may deem appropriate, or any
of the above Performance Measures as compared to the performance of
a group of comparator companies, or published or special index that
the Committee, in its sole discretion, deems appropriate, or the
Company may select Performance Measure (j) above as compared to
various stock market indices. The Committee also has the authority
to provide for accelerated vesting of any Award based on the
achievement of performance goals pursuant to the Performance
Measures specified in this Article 12.
12.2
Evaluation
of Performance
. The Committee may provide in any such Award
that any evaluation of achievement of Performance Measures may
include or exclude any of the following events that occur during a
Performance Period: (a) asset write-downs, (b) litigation or claim
judgments or settlements, (c) the effect of changes in tax laws,
accounting principles, or other laws or provisions affecting
reported results, (d) any reorganization and restructuring
programs, (e) extraordinary nonrecurring items as described in
Accounting Principles Board Opinion No. 30 and/or in
management’s discussion and analysis of financial condition
and results of operations appearing in the Company’s annual
report to shareholders for the applicable year, (f) acquisitions or
divestitures, and (g) foreign exchange gains and losses; and (h)
changes in material liability estimates. To the extent such
inclusions or exclusions affect Awards to Covered Employees, they
shall be prescribed in a form that meets the requirements of Code
Section 162(m) for deductibility.
12.3
Adjustment
of Performance-Based Compensation
. Awards that are intended
to qualify as Performance-Based Compensation may not be adjusted
upward. The Committee shall retain the discretion to adjust such
Awards downward, either on a formula or discretionary basis, or any
combination, based on market, performance or service conditions, as
the Committee determines.
12.4
Committee
Discretion
. In the event that applicable tax and/or
securities laws change to permit Committee discretion to alter the
governing Performance Measures without obtaining shareholder
approval of such changes, the Committee shall have sole discretion
to make such changes without obtaining shareholder approval. In
addition, in the event that the Committee determines that it is
advisable to grant Awards that shall not qualify as
Performance-Based Compensation, the Committee may make such grants
without satisfying the requirements of Code Section 162(m) and base
vesting on Performance Measures other than those set forth in
Section 12.1.
Article
13.
Nonemployee Director Awards
The
Board shall set the amount(s) and type(s) of equity awards that
shall be granted to all Nonemployee Directors on a periodic,
nondiscriminatory basis pursuant to the Plan, as well as any
additional amount(s), if any, to be awarded, also on a periodic,
nondiscriminatory basis. Subject to the foregoing, the Board shall
grant such Awards to Nonemployee Directors, as it shall from time
to time determine.
Article
14.
Dividends and Dividend Equivalents
Any
Participant selected by the Committee may be granted dividends or
dividend equivalents based on the dividends declared on Shares that
are subject to any Award, to be credited as of dividend payment
dates, during the period between the date the Award is granted and
the date the Award is exercised, vests, or expires, as determined
by the Committee; provided, however, that dividends or dividend
equivalents credited with respect to performance-based Awards will
be subject to the same underlying performance-based vesting
conditions as the Awards and will not be subject to Committee
discretion. The dividends or dividend equivalents may be subject to
any limitations and/or restrictions determined by the Committee.
Such dividend equivalents shall be converted to cash or additional
Shares by such formula and at such time and subject to such
limitations as may be determined by the Committee.
Article
15.
Change in Control of the Company
15.1
Awards
Assumed or Substituted in Connection with a Change in
Control
. Unless otherwise expressly provided in an Award
Agreement, with respect to each outstanding Award that is assumed
or substituted in connection with a Change in Control of the
Company, in the event that (1) a Change in Control occurs and (2)
the Participant’s employment or service is involuntarily
terminated by the Company, its successor or affiliate thereof
without Cause on or after the effective time of the Change in
Control but prior to eighteen (18) months following said Change in
Control, then:
(a)
Any and all Options
and Stock Appreciation Rights granted hereunder shall become
exercisable, and shall remain exercisable in accordance with their
terms;
(b)
Any
restriction periods and restrictions imposed on all outstanding
Awards of Restricted Stock, Restricted Stock Units, or Other
Stock-Based Awards shall lapse and be settled as soon as reasonably
practicable, but in no event later than ten (10) days following
such termination of employment. For each Performance Share,
Performance Unit or other performance-based Awards, all Performance
Measures, performance goals or similar performance-based vesting
criteria will be deemed achieved at one hundred percent (100%) of
target levels and all other terms and conditions will be deemed met
as of the date of the Participant’s termination of employment
or service and the Award shall be settled as soon as reasonably
practicable but in no event later than ten (10) days following
termination of employment.
(c)
For Plan purposes,
an Award will be considered assumed if, following the Change in
Control, the Award confers the right to purchase or receive, for
each Share subject to the Award immediately prior to the Change in
Control, the consideration (whether stock, cash, or other
securities or property) received in the Change in Control by
holders of Common Stock for each Share held on the effective date
of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if
such consideration received in the Change in Control is not solely
common stock of the successor corporation or its parent, the
Committee may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of
an Option or Stock Appreciation Right, for each Share subject to
such Award, to be solely common stock of the successor corporation
or its parent equal in fair market value to the per share
consideration received by holders of Common Stock in the Change in
Control.
(d)
Awards shall be
considered assumed or substituted if, upon the occurrence of a
Change in Control after which there will be a generally recognized
U.S. public market for (1) the Company’s Stock, (2) common
stock for which the Company’s Stock is exchanged, or
(3) the common stock of a successor or acquirer entity (such
publicly traded stock, “Public Shares”), the then
outstanding Awards are assumed, exchanged or substituted for by a
successor or acquirer entity such that following the Change in
Control, the Awards relate to such Public Shares and, except as
otherwise provided by this Section 15.1, remain subject to
such terms and conditions that were applicable to the Awards prior
to the Change in Control.
15.2
No
Assumption or Substitution in Connection with Change in
Control
.
Unless
otherwise expressly provided in an Award Agreement, with respect to
each outstanding Award that is not assumed or substituted in
connection with a Change in Control, then prior to the occurrence
of a Change in Control:
(a)
Any and all Options
and Stock Appreciation Rights granted hereunder shall vest in full
and become immediately exercisable in accordance with their terms
and the Committee will notify the Participant in writing that the
Options or Stock Appreciation Rights will be exercisable for a
period of time determined by the Committee in the Committee’s
sole discretion and the Option or Stock Appreciation Right will
terminate upon the expiration of said period; and
(b)
Any restriction
periods and restrictions imposed on all outstanding Awards of
Restricted Stock, Restricted Stock Units, Performance Shares,
Performance Units or Other Stock-Based Awards shall lapse and be
settled as soon as reasonably practicable, but in no event later
than ten (10) days following the Change in Control.
15.3
Cashout
and Cancellation of Awards.
Notwithstanding any other
provisions of the Plan, in the event that each outstanding Award is
not assumed or substituted in connection with a Change in Control
and except as would otherwise result in adverse tax consequences
under Section 409A of the Code, the Committee may, in its
discretion, provide that each Award shall, immediately upon the
occurrence of a Change in Control, be cancelled in exchange for a
payment in cash or securities in an amount equal to (x) the excess
if any of the consideration paid per Share in the Change in Control
over the exercise or purchase price per Share subject to the Award
multiplied by (y) the number of Shares granted under the Award.
Without limiting the generality of the foregoing, in the event that
the consideration paid per Share in the Change in Control is lesser
than or equal to the exercise price or purchase price per Share
subject to the Award, the Committee may, in its discretion, cancel
such Award without any consideration upon the occurrence of a
Change in Control.
Article
16.
Rights of Participants
16.1
Employment
/ Service
. Nothing in this Plan or an Award Agreement shall
interfere with or limit in any way the right of the Company, its
Affiliates, and/or its Subsidiaries to terminate any
Participant’s employment or service on the Board or to the
Company at any time or for any reason not prohibited by law, nor
confer upon any Participant any right to continue his employment or
service as a Director
or Third Party Service Provider
for any specified period of time.
Neither
an Award nor any benefits arising under this Plan shall constitute
an employment contract with the Company, its Affiliates, and/or its
Subsidiaries and, accordingly, subject to Articles 3 and 17,
this Plan and the benefits hereunder may be terminated at any time
in the sole and exclusive discretion of the Committee without
giving rise to any liability on the part of the Company, its
Affiliates, and/or its Subsidiaries.
16.2
Participation
.
No individual shall have the right to be selected to receive an
Award under this Plan or, having been so selected, to be selected
to receive a future Award.
16.3
Rights
as a Shareholder
. Except as otherwise provided herein or in
any Award Agreement, a Participant shall have none of the rights of
a shareholder with respect to Shares covered by any Award until the
Participant becomes the record holder of such Shares.
Article
17.
Amendment, Modification, Suspension, and Termination
17.1
Amendment,
Modification, Suspension, and Termination
. Subject to
Section 17.3, the Committee may, at any time and from time to
time, alter, amend, modify, suspend, or terminate this Plan and any
Award Agreement in whole or in part; provided, however, that,
without the prior approval of the Company’s shareholders and
except as provided in Section 4.4, (a) Options or SARs issued under
this Plan will not be repriced, replaced, or regranted through
cancellation, or by lowering the Option Price of a previously
granted Option or the Grant Price of a previously granted SAR, and
(b) no payment shall be made to cancel an Option or SAR when the
Option Price or Grant Price, as the case may be, exceeds the Fair
Market Value. No material
amendment of this Plan shall be
made without shareholder approval if shareholder approval is
required by law, regulation, or stock exchange rule.
17.2
Adjustment
of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events.
The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition
of unusual or nonrecurring events (including, without limitation,
the events described in Section 4.4 hereof) affecting the Company
or the financial statements of the Company or of changes in
applicable laws, regulations, or accounting principles, whenever
the Committee determines that such adjustments are appropriate in
order to prevent unintended dilution or enlargement of the benefits
or potential benefits intended to be made available under this
Plan. The determination of the Committee as to the foregoing
adjustments, if any, shall be conclusive and binding on
Participants under this Plan.
17.3
Awards
Previously Granted.
Notwithstanding any other
provision of this Plan to the contrary (other than Section 17.4),
no termination, amendment, suspension, or modification of this Plan
or an Award Agreement shall adversely affect in any material
way any Award previously granted under this Plan, without the
written consent of the Participant holding such Award.
17.4
Amendment
to Conform to Law.
Notwithstanding any other
provision of this Plan to the contrary, the Board may amend the
Plan or an Award Agreement, to take effect retroactively or
otherwise, as deemed necessary or advisable for the purpose of
conforming the Plan or an Award Agreement to any present or future
law relating to plans of this or similar nature (including, but not
limited to, Code Section 409A), and to the administrative
regulations and rulings promulgated thereunder. By accepting an
Award under this Plan, each Participant agrees to any amendment
made pursuant to this Section 17.4 to any Award granted under the
Plan without further consideration or action.
Article
18.
Withholding
18.1
Tax
Withholding
. The Company shall have the power and the right
to deduct or withhold, or require a Participant to remit to the
Company, the minimum statutory amount to satisfy federal, state,
and local taxes, domestic or foreign, required by law or regulation
to be withheld with respect to any taxable event arising as a
result of this Plan.
18.2
Share
Withholding
. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on
Restricted Stock and Restricted Stock Units, or upon the
achievement of performance goals related to Performance Shares, or
any other taxable event arising as a result of an Award granted
hereunder, a Participant may elect, subject to the approval of the
Committee, to satisfy the withholding requirement, in whole or in
part, by having the Company withhold Shares having a Fair Market
Value on the date the tax is to be determined equal to the minimum
statutory total tax that could be imposed on the transaction. All
such elections shall be irrevocable, made in writing, and signed by
the Participant, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems
appropriate.
Article
19.
Successors
All
obligations of the Company under this Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct
or indirect purchase, merger, consolidation, or otherwise, of all
or substantially all of the business and/or assets of the
Company.
Article
20.
General Provisions
20.1
Legend
.
The certificates for Shares may include any legend that the
Committee deems appropriate to reflect any restrictions on transfer
of such Shares.
20.2
Gender
and Number
. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the
plural shall include the singular, and the singular shall include
the plural.
20.3
Severability
.
In
the event any provision of this Plan shall be held illegal or
invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of this Plan, and this Plan shall be
construed and enforced as if the illegal or invalid provision had
not been included.
20.4
Requirements
of Law
.
The
granting of Awards and the issuance of Shares under this Plan shall
be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or stock exchange as
may be required.
20.5
Delivery
of Title
.
The
Company shall have no obligation to issue or deliver evidence of
title for Shares issued under this Plan prior to:
(a)
Obtaining any
approvals from governmental agencies that the Company determines
are necessary or advisable; and
(b)
Completion of any
registration or other qualification of the Shares under any
applicable national or foreign law or ruling of any governmental
body that the Company determines to be necessary or
advisable.
20.6
Inability
to Obtain Authority
.
The inability of the Company to
obtain authority from any regulatory body having jurisdiction,
which authority is deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the
failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
20.7
Investment
Representations
.
The Committee may require any
individual receiving Shares pursuant to an Award under this Plan to
represent and warrant in writing that the individual is acquiring
the Shares for investment and without any present intention to sell
or distribute such Shares.
20.8
Employees
Based Outside of the United States
. Notwithstanding any
provision of this Plan to the contrary, in order to comply with the
laws in other countries in which the Company, its Affiliates,
and/or its Subsidiaries operate or have Employees, Directors or
Third Party Service Providers, the Committee, in its sole
discretion, shall have the power and authority to:
(a)
Determine which
Affiliates and Subsidiaries shall be covered by this
Plan.
(b)
Determine which
Employees, Directors or Third Party Service Providers outside the
United States are eligible to participate in this
Plan.
(c)
Modify the terms
and conditions of any Award granted to Employees, Directors or
Third Party Service Providers outside the United States to comply
with applicable foreign laws.
(d) Establish
subplans and modify exercise procedures and other terms and
procedures, to the extent such actions may be necessary or
advisable. Any subplans and modifications to Plan terms and
procedures established under this Section 20.8 by the Committee
shall be attached to this Plan document as appendices.
(e) Take
any action, before or after an Award is made, that it deems
advisable to obtain approval or comply with any necessary local
government regulatory exemptions or approvals.
Notwithstanding the
above, the Committee may not take any actions hereunder, and no
Awards shall be granted that would violate applicable
law.
20.9
State
Securities Laws.
Notwithstanding any provision of this Plan
to the contrary, the Committee, in its sole discretion, shall have
the power and authority to modify the terms and conditions of any
Award granted to Employees, Directors or Third Party Service
Providers who reside in one or more individual states to the extent
necessary or desirable under applicable state securities laws. Any
modifications to Plan terms and procedures established under this
Section 20.9 by the Committee shall be attached to this Plan
document as appendices.
20.10
Uncertificated
Shares.
To the extent that this Plan provides for issuance
of certificates to reflect the transfer of Shares and the Shares
are Publicly Traded, the transfer of such Shares may be effected on
a noncertificated basis, to the extent not prohibited by applicable
law or the rules of any stock exchange.
20.11
Unfunded
Plan
.
Participants shall have no right,
title, or interest whatsoever in or to any investments that the
Company and/or its Subsidiaries and/or its Affiliates may make to
aid it in meeting its obligations under this Plan. Nothing
contained in this Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any
kind, or a fiduciary relationship between the Company and any
Participant, beneficiary, legal representative, or any other
individual. To the extent that any individual acquires a right to
receive payments from the Company, its Subsidiaries, and/or its
Affiliates under this Plan, such right shall be no greater than the
right of an unsecured general creditor of the Company, a
Subsidiary, or an Affiliate, as the case may be. All payments to be
made hereunder shall be paid from the general funds of the Company,
a Subsidiary, or an Affiliate, as the case may be, and no special
or separate fund shall be established and no segregation of assets
shall be made to assure payment of such amounts except as expressly
set forth in this Plan.
20.12
No
Fractional Shares
. No fractional Shares shall be issued or
delivered pursuant to this Plan or any Award. The Committee shall
determine whether cash, Awards, or other property shall be issued
or paid in lieu of fractional Shares or whether such fractional
Shares or any rights thereto shall be forfeited or otherwise
eliminated.
20.13
Retirement
and Welfare Plans
. Neither Awards made under this Plan nor
Shares or cash paid pursuant to such Awards may be included as
“compensation” for purposes of computing the benefits
payable to any Participant under the Company’s or any
Subsidiary’s or Affiliate’s retirement plans (both
qualified and nonqualified) or welfare benefit plans unless such
other plan expressly provides that such compensation shall be taken
into account in computing a Participant’s
benefit.
20.14
Deferred
Compensation
.
Except for any deferral feature
build into an Award of Restricted Stock Units, no deferral of
compensation (as defined under Code Section 409A or guidance
thereto) is intended under this Plan. Notwithstanding this intent,
if any Award would be considered deferred compensation as defined
under Code Section 409A, and if this Plan fails to meet the
requirements of Code Section 409A with respect to such Award, then
such Award shall be null and void. However, the Committee may
permit deferrals of compensation pursuant to the terms of a
Participant’s Award Agreement, a separate plan, or a subplan
which meets the requirements of Code Section 409A and any related
guidance. Additionally, to the extent any Award is subject to Code
Section 409A, notwithstanding any provision herein to the contrary,
the Plan does not permit the acceleration of the time or schedule
of any distribution related to such Award, except as permitted by
Code Section 409A, the regulations thereunder, and/or the Secretary
of the United States Treasury.
20.15
Nonexclusivity
of This Plan
. The adoption of this Plan shall not be
construed as creating any limitations on the power of the Board or
Committee to adopt such other compensation arrangements as it may
deem desirable for any Participant.
20.16
No
Constraint on Corporate Action
. Nothing in this Plan shall
be construed to: (a) limit, impair, or otherwise affect the
Company’s or a Subsidiary’s or an Affiliate’s
right or power to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure,
or to merge or consolidate, or dissolve, liquidate, sell, or
transfer all or any part of its business or assets; or, (b) limit
the right or power of the Company or a Subsidiary or an Affiliate
to take any action which such entity deems to be necessary or
appropriate.
20.17
Governing
Law
. The Plan and each Award Agreement shall be governed by
the laws of the State of Delaware, excluding any conflicts or
choice of law rule or principle that might otherwise refer
construction or interpretation of this Plan to the substantive law
of another jurisdiction. Unless otherwise provided in the Award
Agreement, recipients of an Award under this Plan are deemed to
submit to the exclusive jurisdiction and venue of the federal or
state courts of Delaware to resolve any and all issues that may
arise out of or relate to this Plan or any related Award
Agreement.
20.18
Indemnification
.
Subject
to requirements of Delaware law, each individual who is or shall
have been a member of the Board, or a committee appointed by the
Board, or an officer of the Company to whom authority was delegated
in accordance with Article 3, shall be indemnified and held
harmless by the Company against and from any loss, cost, liability,
or expense that may be imposed upon or reasonably incurred by the
Participant in connection with or resulting from any claim, action,
suit, or proceeding to which the Participant may be a party or in
which the Participant may be involved by reason of any action taken
or failure to act under this Plan and against and from any and all
amounts paid by the Participant in settlement thereof, with the
Company’s approval, or paid by the Participant in
satisfaction of any judgment in any such action, suit, or
proceeding against the Participant, provided the Participant shall
give the Company an opportunity, at its own expense, to handle and
defend the same before the Participant undertakes to handle and
defend it on the Participant’s own behalf, unless such loss,
cost, liability, or expense is a result of the Participant’s
own willful misconduct or except as expressly provided by
statute.
The
foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such individuals may be
entitled under the Company’s Articles of Incorporation or
Bylaws, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them
harmless.
20.19
Recoupment.
A Participant will be obligated to return to the Company payments
received with respect to Awards in the event of an overpayment to
the Participant of incentive compensation due to inaccurate
financial data, in accordance with any applicable Company clawback
or recoupment policy, as such policy may be amended and in effect
from time to time, or as otherwise required by law or applicable
stock exchange listing standards, including, without limitation
Section 10D of the Securities Exchange Act of 1934, as amended.
Each Participant, by accepting an Award pursuant to the Plan,
agrees to return the full amount required under this Section 20.19
at such time and in such manner as the Committee shall determine in
its sole discretion and consistent with applicable
law.
AMENDMENT NO. 1 TO
TENAX THERAPEUTICS, INC.
2016 STOCK INCENTIVE PLAN
This
Amendment No. 1 (the “Amendment”) to the Tenax
Therapeutics, Inc. 2016 Stock Incentive Plan (the
“Plan”) to increase the number of shares of common
stock issuable under the Plan is made on April 18, 2019, effective
as of the time provided below.
WHEREAS
, Tenax Therapeutics, Inc. (the
“Company”) has heretofore adopted the
Plan;
WHEREAS
, as a result of the February 23,
2018 reverse stock split, the number of shares of the
Company’s common stock issuable under the Plan was reduced
from 3,000,000 to 150,000; and
WHEREAS
, the Board of Directors of the
Company has approved the Amendment contingent upon the approval of
the Amendment by the stockholders of the Company.
NOW, THEREFORE
,
BE IT RESOLVED
, that, pursuant to
Section 17.1 of the Plan, the Plan is hereby amended as follows,
effective as of such time as the Amendment is approved by the
stockholders of the Company:
Section
4.1 of the Plan is amended by replacing “three million
(3,000,000) Shares” with seven hundred fifty thousand
(750,000) Shares.”
Except
as expressly amended hereby, all provisions of the Plan shall
remain unamended and shall continue to be, and shall remain, in
full force and effect in accordance with their respective
terms.
The
Amendment shall have no effect until such time as it is approved by
the stockholders of the Company.
The
provisions of the Amendment shall be governed by and interpreted in
accordance with the laws of the State of Delaware.
TENAX THERAPEUTICS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
ANNUAL
MEETING OF STOCKHOLDERS – JUNE 13, 2019 AT 9:00 AM LOCAL
TIME
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CONTROL ID:
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REQUEST ID:
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The
undersigned stockholder of Tenax Therapeutics, Inc. hereby appoints
Nancy J.M. Hecox and Michael B. Jebsen, or either of them, as
proxies, each with full powers of substitution, to represent and to
vote as proxy, as designated, all shares of common stock of Tenax
Therapeutics, Inc. held of record by the undersigned on April 16,
2019, at the Annual Meeting of Stockholders (the “Annual
Meeting”) to be held on Thursday, June 13, 2019 at 9:00 a.m.,
local time, at the offices of Tenax Therapeutics, Inc. located at
ONE Copley Parkway, Suite 490, Morrisville, North Carolina 27560,
or at any adjournment or postponement thereof. The
undersigned hereby revokes all prior proxies.
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(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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VOTING INSTRUCTIONS
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If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
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MAIL:
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Please
mark, sign, date, and return this Proxy Card promptly using the
enclosed envelope.
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INTERNET:
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https://www.iproxydirect.com/TENX
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PHONE:
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1-866-752-VOTE
(8683)
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ANNUAL MEETING OF THE STOCKHOLDERS OF
TENAX THERAPEUTICS, INC.
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PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE:
☒
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PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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Proposal
1
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FOR
ALL
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WITHHOLD
ALL
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FOR
ALL
EXCEPT
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Election
of Directors:
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☐
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CONTROL ID:
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Ronald
R. Blanck, DO
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REQUEST ID:
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Anthony
A. DiTonno
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☐
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James
Mitchum
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☐
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Gregory
Pepin
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☐
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Gerald
T. Proehl
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Chris
A. Rallis
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Proposal
2
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FOR
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AGAINST
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ABSTAIN
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Approval
of Amendment No. 1 to our 2016 Stock Incentive Plan to increase the
number of shares authorized for issuance under the plan by 600,000
shares.
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Proposal
3
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FOR
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AGAINST
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ABSTAIN
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Ratification
of the appointment of Cherry Bekaert LLP as our independent
registered public accounting firm for the fiscal year ending
December 31, 2019
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Proposal
4
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FOR
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AGAINST
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ABSTAIN
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Advisory
(nonbinding) approval of named executive officer
compensation.
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Proposal
5
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ONE
YEAR
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TWO
YEARS
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THREE
YEARS
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ABSTAIN
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Advisory
(nonbinding) vote on the frequency of future advisory votes on
named executive officer compensation.
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☐
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☐
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☐
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MARK
“X” HERE IF YOU PLAN TO ATTEND THE MEETING:
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE
ELECTION OF EACH OF THE DIRECTOR NOMINEES. THE BOARD OF DIRECTORS
RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF
AMENDMENT NO. 1 TO OUR 2016 STOCK INCENTIVE PLAN TO INCREASE THE
NUMBER OF SHARES AUTHORIZED FOR ISSUANCE THEREUNDER,
“FOR” RATIFICATION OF THE APPOINTMENT OF CHERRY BEKAERT
LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE
COMPANY, “FOR” THE APPROVAL OF THE RESOLUTION REGARDING
THE ADVISORY (NONBINDING) VOTE ON NAMED EXECUTIVE OFFICER
COMPENSATION AND FOR “TWO YEARS” (AS OPPOSED TO ONE
YEAR OR THREE YEARS) FOR THE FREQUENCY OF FUTURE ADVISORY VOTES ON
NAMED EXECUTIVE OFFICER COMPENSATION.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
SPECIFIED HEREIN BY THE UNDERSIGNED STOCKHOLDER. THIS PROXY, IF
DULY EXECUTED AND RETURNED, WILL BE VOTED “FOR” THE
ELECTION OF EACH OF THE DIRECTOR NOMINEES AND “FOR”
PROPOSALS 2, 3 AND 4 AND "TWO YEARS" FOR PROPOSAL 5 IF NO
INSTRUCTION TO THE CONTRARY IS INDICATED. THE PROXIES ARE
AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE ANNUAL MEETING OF STOCKHOLDERS IN ACCORDANCE WITH THEIR
JUDGMENT.
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MARK HERE FOR ADDRESS CHANGE
☐
New Address (if applicable):
__________________________________________
__________________________________________
IMPORTANT:
Please sign exactly as your name or names appear
on this Proxy. When shares are held jointly, each holder should
sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized
person.
Dated:
________________________, 2019
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(Print Name of
Stockholder and/or Joint Tenant)
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(Signature of
Stockholder)
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(Second Signature
if held jointly)
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