UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment (Amendment No.          )

Filed by the Registrant X
Filed by a Party other than the Registrant ¨
Check the appropriate box:
Filed by the Registrant ý
Filed by a Party other than the Registrant o
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oPreliminary Proxy Statement
oConfidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
XýDefinitive Proxy Statement
oDefinitive Additional Materials
oSoliciting Material Under Rule 14a-12under §240.14a-12
Yield10 Bioscience, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X
Yield10 Bioscience, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
ýNo fee required.

oFee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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oCheck box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing:filing.
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 3)(3)Filing party:Party:
 4)(4)Date Filed:





ytenlogoa01.jpg 
December 4, 2019yield10logoforedgarfilings.jpg
March 24, 2020


    
Dear Stockholder:
You are cordially invited to attend a special meeting (the “Specialthe 2020 Annual Meeting of Stockholders (“Annual Meeting”) of stockholders of Yield10 Bioscience, Inc. (the “Company”), to be held on Tuesday, May 19, 2020, at 9:0030  a.m., Eastern Time on January 9, 2020,time, at the offices of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., at One Financial Center, Boston, MassachusettsMA 02111. DirectionsWe currently intend to hold our Annual Meeting in person. However, we are actively monitoring developments with regard to the locationcoronavirus or COVID-19, and it is possible that the Annual Meeting may be held solely by means of remote communication. In the Specialevent it is not possible or advisable to hold our Annual Meeting canin person, we will announce alternative arrangements for the meeting as promptly as practicable. Details on how to participate will be foundavailable at http://ir.yield10bio.com/investor-relations.investor-relations.
At this Annual Meeting, you will be asked (i) to elect one Class II Director for a three-year term; (ii) to approve a proposed amendment to the Company’s 2018 Stock Option and Incentive Plan(the “2018 Plan”); and (iii) to ratify the appointment of RSM US LLP as our independent registered public accounting firm for the year ending December 31, 2020. The Board of Directors unanimously recommends that you vote FOR the election of the director nominee, FOR the approval of the amendment to the 2018 Plan and FOR the ratification of the appointment of RSM US LLP.
Details regarding the Special Meeting, the businessmatters to be conductedacted upon at this Annual Meeting appear in the Special Meeting, and information about the Company that you should consider when you vote your shares are described in thisaccompanying proxy statement. You may obtain additional information about the Company from documents we file with the Securities and Exchange Commission.Please give this material your careful attention.

At the Special Meeting, we will ask stockholders to approve:

1.A proposed amendment to the Yield10 Bioscience, Inc. Amended and Restated Certificate of Incorporation, as amended, to effect a reverse stock split of our issued and outstanding shares of common stock, at a ratio of between 1-for-20 and 1-for-50 (“Proposal 1”); and

2.The potential issuance of more than 2,500,948 shares of common stock upon the conversion of shares of our Series B Convertible Preferred Stock and the exercise of warrants to purchase our common stock, all of which were issued pursuant to the Company’s private placement that closed on November 19, 2019, as required by and in accordance with Nasdaq Marketplace Rule 5635(d) (“Proposal 2”).

The Board of Directors recommends that you vote “FOR” each of these proposals.

We hope you will be able to attend the Special Meeting. Whether or not you plan to attend the SpecialAnnual Meeting, we urge you to complete, sign, date and mail promptly the enclosed proxy which is being solicited on behalf of the Board of Directors so that your shares will be represented at the SpecialAnnual Meeting. A return envelope which requires no postage if mailed in the United States is enclosed for that purpose. You need to vote in accordance with the instructions listed on the proxy card. If shares are held in a bank or brokerage account, you may be eligible to vote electronically or by telephone. Please refer to the enclosed voting instruction form for instructions. If you attend the SpecialAnnual Meeting, you may vote in person even if you have previously returned your proxy card. Your prompt cooperation will be greatly appreciated.
 Sincerely,
  
 /s/ Oliver P. PeoplesVery truly yours,
 Oliver P. Peoples

peoplesignature.jpg
 

OLIVER P. PEOPLES
President and Chief Executive Officer


YIELD10 BIOSCIENCE, INC.
19 Presidential Way
Woburn, Massachusetts 01801
(617) 583-1700
NOTICE OF SPECIALANNUAL MEETING OF STOCKHOLDERS
TIME: 9:00 a.m. Eastern Time
DATE: January 9,TO BE HELD ON MAY 19, 2020
PLACE:To the Stockholders of Yield10 Bioscience, Inc.:
The 2020 Annual Meeting of Stockholders (“Annual Meeting”) of Yield10 Bioscience, Inc., a Delaware corporation (the “Company”), will be held on Tuesday, May 19, 2020, at 9:30  a.m., Eastern time, at the offices of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., at One Financial Center, Boston, MassachusettsMA 02111,
PURPOSE: To approve: for the following purposes:
1.A proposed amendmentTo elect one (1) Class II Director to the Yield10 Bioscience, Inc. Amendedserve for a three-year term and Restated Certificate of Incorporation, as amended, to effect a reverse stock split of our issueduntil his successor has been duly elected and outstanding shares of common stock, at a ratio of between 1-for-20 and 1-for-50 (“Proposal 1”); andqualified or until his earlier death, resignation or removal;
2.The potential issuance of more than 2,500,948 shares of common stock upon the conversion of shares of our Series B Convertible Preferred Stock and the exercise of warrants to purchase our common stock, all of which were issued pursuantTo approve a proposed amendment to the Company’s private placement that closed on November 19, 2019,2018 Stock Option and Incentive Plan;
3.To ratify the appointment of RSM US LLP as required byour independent registered public accounting firm for the year ending December 31, 2020; and in accordance with Nasdaq Marketplace Rule 5635(d) (“Proposal 2”).
WHO MAY VOTE:
4.To transact such other business as may properly come before the Annual Meeting and any adjournments or postponements thereof.
Only stockholders of record at the close of business on November 15, 2019,March 23, 2020, are entitled to notice of and to vote at the SpecialAnnual Meeting and at any adjournment or postponement thereof.
We currently intend to hold our Annual Meeting in person at the offices of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. at One Financial Center, Boston, MA 02111. However, we are actively monitoring developments regarding the coronavirus or COVID-19, and it is possible that the Annual Meeting may be held solely by means of remote communication. In the event it is not possible or advisable to hold our Annual Meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable. Details on how to participate will be available at http://ir.yield10bio.com/investor-relations.
All stockholders are cordially invited to attend the Special Meeting in person.Annual Meeting. However, to assure your representation at the SpecialAnnual Meeting, we urge you, whether or not you plan to attend the SpecialAnnual Meeting, to complete, sign, date and mail promptly the enclosed proxy card, which is being solicited on behalf of the Board of Directors so that your shares will be represented at the SpecialAnnual Meeting. A return envelope which requires no postage if mailed in the United States is enclosed for that purpose. You need to vote in accordance with the instructions listed on the proxy card. If shares are held in a bank or brokerage account, you may be eligible to vote electronically or by telephone. Please refer to the enclosed voting instruction form for instructions. If you attend the SpecialAnnual Meeting, you may vote in person even if you have previously returned your proxy card.
BY ORDER OF THE BOARD OF DIRECTORS
  
/s/ Lynne H.BrumBy Order of the Board of Directors,
 Lynne
brumsignatureforedgarfilings.jpg
LYNNE H. BrumBRUM
 Secretary
Woburn, Massachusetts
March 24, 2020


WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIALANNUAL MEETING, PLEASE COMPLETE, SIGN, DATE AND MAIL PROMPTLY THE ENCLOSED PROXY CARD WHICH IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS SO THAT YOUR SHARES WILL BE REPRESENTED AT THE SPECIALANNUAL MEETING. A RETURN ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES IS ENCLOSED FOR THAT PURPOSE. YOU NEED TO VOTE IN ACCORDANCE WITH THE INSTRUCTIONS LISTED ON THE PROXY CARD. IF SHARES ARE HELD IN A BANK OR BROKERAGE ACCOUNT, YOU MAY

BE ELIGIBLE TO VOTE ELECTRONICALLY OR BY TELEPHONE. PLEASE REFER TO THE ENCLOSED VOTING INSTRUCTION FORM FOR INSTRUCTIONS.
IN ACCORDANCE WITH OUR SECURITY PROCEDURES, ALL PERSONS ATTENDING THE SPECIALANNUAL MEETING MAY BE REQUIRED TO PRESENT PICTURE IDENTIFICATION.


YIELD10 BIOSCIENCE, INC.
19 Presidential Way
Woburn, Massachusetts 01801
PROXY STATEMENT FOR THE YIELD10 BIOSCIENCE, INC.
SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON JANUARY 9, 2020
This proxy statement, along with the accompanying Notice of the Special Meeting of Stockholders, contains information about the Special Meeting of Stockholders of Yield10 Bioscience, Inc., including any adjournments or postponements thereof (the “Special Meeting”). We are holding the Special Meeting at 9:00 a.m. Eastern Time, on January 9, 2020, at the offices of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., One Financial Center, Boston, Massachusetts 02111.
In this proxy statement, we refer to Yield10 Bioscience, Inc. as “Yield10,” “Yield10 Bioscience,” “the Company,” “we” and “us.”
This proxy statement relates to the solicitation of proxies by our Board of Directors for use at the Special Meeting.

On or about December 12, 2019, we intend to begin sending this proxy statement, the attached Notice of Special Meeting of Stockholders and the enclosed proxy card to all stockholders entitled to vote at the Special Meeting.

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YIELD10 BIOSCIENCE, INC.

19 Presidential Way
Woburn, Massachusetts 01801

PROXY STATEMENT

For a Specialthe Annual Meeting of Stockholders
To Be Held on January 9,May 19, 2020

March 24, 2020
Proxies in the form enclosed with this proxy statementProxy Statement are solicited by the Board of Directors (the “Board” or the “Board of Directors”) of Yield10 Bioscience, Inc., a Delaware corporation (“Yield10” or the “Company”), for use at the Special2020 Annual Meeting of Stockholders of Yield10 to be held on January 9,Tuesday, May 19, 2020, at 9:0030 a.m., Eastern Time,time, or at any adjournments or postponements thereof (the “Special“Annual Meeting”) at the offices of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., at One Financial Center, Boston, MA 02111. DirectionsWe currently intend to hold our Annual Meeting in person. However, we are actively monitoring developments regarding the locationcoronavirus or COVID-19, and it is possible that the Annual Meeting may be held solely by means of remote communication. In the Specialevent it is not possible or advisable to hold our Annual Meeting arein person, we will announce alternative arrangements for the meeting as promptly as practicable. Details on how to participate will be available at http://ir.yield10bio.com/investor-relations. An Annual Report to Stockholders, containing financial statements for the fiscal year ended December 31, 2019, is being mailed together with this proxy statement to all stockholders entitled to vote at the Annual Meeting. On or about March 30, 2020, we intend to begin sending this Proxy Statement and the form of proxy to stockholders.
The purposepurposes of the SpecialAnnual Meeting is to ask stockholders to approve:are to:
1.A proposed amendmentTo elect one (1) Class II Director to the Yield10 Bioscience, Inc. Amendedserve for a three-year term and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”) to effect a reverse stock split of our issueduntil his successor has been duly elected and outstanding shares of common stock, at a ratio of between 1-for-20 and 1-for-50 (“Proposal 1”); andqualified or until his earlier death, resignation or removal;
2.The potential issuance of more than 2,500,948 shares of our common stock upon the conversion of shares of our Series B Convertible Preferred Stock (the “Series B Preferred Stock”) and the exercise of warrantsTo approve a proposed amendment to purchase our common stock, all of which were issued pursuant to or in connection with the Company’s private placement that closed on November 19, 2019,2018 Stock Option and Incentive Plan (the “2018 Plan”);
3.To ratify the appointment of RSM US LLP as required byour independent registered public accounting firm for the year ending December 31, 2020; and in accordance with Nasdaq Marketplace Rule 5635(d) (“Proposal 2”).
4.To transact such other business as may properly come before the Annual Meeting and any adjournments or postponements thereof.
Only stockholders of record at the close of business on November 15, 2019March 23, 2020 (the “Record Date”) will be entitled to receive notice of and to vote at the SpecialAnnual Meeting. As of the Record Date, 12,567,5821,923,184 shares of our common stock (“Common Stock”) were issued, outstanding and entitled to vote.
VOTING AND OTHER INFORMATION

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VOTING

The holders of common stockCommon Stock are entitled to one vote per share on any proposal to be presented at the SpecialAnnual Meeting. Stockholders may vote in person or by proxy. Stockholders may vote by proxy by completing, signing, dating and returning the accompanying proxy card in the prepaid postagepostage-prepaid envelope enclosed for that purpose in accordance with the instructions listed on the proxy card. Execution of a proxy will not in any way affect a stockholder’sstockholder's right to attend the SpecialAnnual Meeting and vote in person.
Any proxy given pursuant to this solicitation may be revoked by the person giving it any time before the taking of the vote at the SpecialAnnual Meeting. Proxies may be revoked by (1) filing with the Secretary of Yield10, before the taking of the vote at the SpecialAnnual Meeting, a written notice of revocation bearing a later date than the proxy, (2) duly executing a later-dated proxy relating to the same shares and delivering it to the Secretary of Yield10, in accordance with the instructions listed on the proxy card, before the taking of the vote at the SpecialAnnual Meeting, (3) if shares are held in a bank or brokerage account and if eligible, by transmitting a subsequent vote over the Internet or by telephone, or (4) attending the SpecialAnnual Meeting and voting in person (although attendance at the SpecialAnnual Meeting will not in and of itself constitute a revocation of a proxy). Any written notice of revocation or subsequent proxy should be sent to Yield10 Bioscience, Inc., 19 Presidential Way, Woburn, MA 01801, Attention: Secretary, so as to be delivered before the taking of the vote at the SpecialAnnual Meeting.

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If your shares are registered in your name with our transfer agent, American Stock Transfer, or if you have stock certificates, they will not be counted if you do not vote as described above. If your shares are held by a broker on your behalf (that is, in “street name”), you may be required to present an account statement or letter from your bank or brokerage firm showing that you are the beneficial owner of the shares as of the Record Date in order to be admitted to the SpecialAnnual Meeting. To be able to vote your shares held in street name at the SpecialAnnual Meeting, you will need to obtain a proxy from the holder of record.
The persons named as attorneys-in-fact in the proxies, Oliver P. Peoples, Ph.D. and Charles B. Haaser, were selected by the Board of Directors and are officers of the Company. All properly executed proxies returned in time to be counted at the SpecialAnnual Meeting will be voted by such persons at the SpecialAnnual Meeting as stated below. When a choice has been specified on the proxy with respect to a matter, the shares represented by the proxy will be voted in accordance with the specifications. If a proxy is submitted without giving voting instructions, such shares will be votedvoted:
FOR election of the director nominee,
FOR the approval of the amendment to the Company’s 2018 Plan,
FOR the ratification of the appointment of RSM US LLP, and
as the persons named as proxies may determine in accordancetheir discretion with respect to any other matters properly presented at the Board of Directors’ recommendation as noted below.
The Board of Directors recommends that you vote “FOR” each of Proposal 1 and Proposal 2.meeting.
The representation in person or by proxy of at least a majority of the outstanding shares of common stockCommon Stock entitled to vote at the SpecialAnnual Meeting is necessary to constitute a quorum for the transaction of business. AbstentionsVotes withheld from the nominee, abstentions and broker “non-votes” are counted as present or represented for purposes of determining the presence or absence of a quorum for the Special Meeting, and will count as “against”Annual Meeting. A “non-vote” occurs when a nominee holding shares for a beneficial owner votes on one proposal but does not vote on another proposal because, with respect to Proposal No. 1. They willsuch other proposal, the nominee does not have no effect with respect to Proposal No. 2.discretionary voting power and has not received instructions from the beneficial owner.
If your shares are held in street name, and you do not instruct the broker as to how to vote your shares on the ratification of the appointment of RSM US LLP as our independent registered public accounting firm for the year ending December 31, 2020 (“Proposal 2,3”), the broker will not havemay exercise its discretion to vote for or against suchthis proposal. ThisIf a broker does not exercise this authority with respect to Proposal 3, this would be a “broker non-vote.” If you do not instruct the broker “non-vote”, although suchas to how to vote your shares on all other proposals described below, the broker may not exercise discretion to vote with respect to those proposals. This would also be a “broker non-vote,” and these shares will have no effectnot be counted as having been voted on the results of the vote.that proposal. Please vote your proxy so your vote can be counted.Brokers will have discretion to vote for or against Proposal 1. However, if a broker chooses not to exercise that discretion, such shares will be considered broker non-votes and will count as votes against the proposal.
Why is the Company seeking approval for these proposals?
Proposal 1. Reverse Stock Split. On June 25, 2019, we received a notification letter from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) informing us that for the prior 30 consecutive business days, the bid price of our securities had closed below $1.00 per share as required by Nasdaq Listing Rule 5550(a)(2). This notice has no immediate effect on our Nasdaq listing, and we have 180 calendar days, or until December 23, 2019, to regain compliance. As of December 3, 2019, we had not regained compliance since the closing bid price of our securities was not at least $1.00 per share for a minimum of ten consecutive business days. To cure the deficiency, we intend to conduct the reverse stock split of our common stock for which we are seeking stockholder approval in this proxy statement. On December 3, 2019, the closing price of our common stock as reported on Nasdaq was $0.15 per share.
The Board of Directors has approved the reverse stock split as a potential means of increasing the share price of our common stock, and may choose to implement it if other options are unavailable, undesirable or insufficient. Our Board of Directors believes that maintaining our listing on Nasdaq may provide a broader market for our common stock and facilitate the use of our common stock in financing and other transactions. We expect the reverse stock split, if effected, to facilitate the continuation of such listing. We cannot assure you, however, that the reverse stock split, if effected, will result in an increase in the per share price of our common stock, or if it does, how long the increase would be sustained, if at all. Although the reverse stock split is designed to raise the stock price, there is no guarantee that the share price will rise proportionately to the reverse stock split, so the end result could be a loss of value.
In addition, on November 19, 2019, we completed a registered public offering (the “Public Offering”) and a concurrent private placement (the “Private Placement” and together with the Public Offering, the “Offering”), pursuant to which the Company issued and sold warrants to purchase shares of our common stock and shares of Series B convertible preferred stock, par value $0.01 per share (“Series B Preferred Stock”), which is convertible into shares of common stock, in addition to other securities. We currently have 60,000,000 authorized shares of common stock, which is not sufficient to allow the full conversion into common stock of the warrants and shares of Series B Preferred Stock issued in the Offering. Accordingly, the approval of the reverse stock split, which will result in a lower number of issued

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and outstanding shares as compared to the numberProposal 1: Election of our authorized shares, is required to allow for the conversionDirector.    Directors are elected by a plurality of the Series B Preferred Stock and the exercise of the warrants issued in the Offering.
If our stockholders approve Proposal 1, the Board of Directors in its sole discretion will determine whether to effect the reverse stock split, no later than six months after the date of the Special Meeting. For more information, see “Proposal 1” contained elsewhere in this proxy statement.
Proposal 2. Private Placement Proposal. Our common stock is listed on Nasdaq, and as such we are subject to the Nasdaq listing rules. Nasdaq Marketplace Rule 5635(d) requires us to obtain stockholder approval in connection with a transaction other than a public offering involving the sale, issuance or potential issuance by us of additional shares of common stock (or securities convertible into or exchangeable for common stock) equal to 20% or more of the common stock outstanding before the issuance, for a price that is less than the lower of (i) the closing price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement for the transaction; or (ii) the average closing price of the common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement for the transaction.
On November 19, 2019, we issued and sold shares of our Series B Preferred Stock, which is convertible into shares of common stock, and warrants to purchase shares of common stock to our largest shareholder, Jack W. Schuler, and related entities, each of which is an accredited investor, in a private placement (the “Private Placement”). If Proposal 2 is not approved, we will not be able to issue the full amount of shares of common stock upon conversion of the Series B Preferred Stock and exercise of the warrants sold pursuant to the Private Placement. The investors who participated in the Private Placement will be unable to convert their Series B Preferred Stock or exercise their warrants for a number of shares in excess of an aggregate of 19.99% of the shares of our common stockissued and outstanding before the Private Placement. If we are unable to fulfill our obligations to the investors under the Private Placement, it is likely that these investors and other potential investors would be unwilling to participate in any non-public capital raising efforts involving our securities in the future, which would have an unfavorable impact on our capital raising efforts. In addition, if the shares of Series B Preferred Stock remain outstanding on March 31, 2020, we will be obligated to start paying a dividend on such shares in the form of additional shares of Series B Preferred Stock. For more information, see “Proposal 2” contained later in this proxy statement.
What are the costs of soliciting these proxies?
We will pay all of the costs of soliciting these proxies. In addition, our directors and employees may solicit proxiesvotes cast, in person or by telephone or email. We will pay these employees and directors no additional compensation for these services. We will ask banks, brokers and other institutions,proxy, at the Annual Meeting. The nominees and fiduciaries to forward these proxy materials to their principals and to obtain authority to execute proxies. We will then reimburse them for their expenses. We have engaged The Proxy Advisory Group, LLC to assist inwho receive the solicitationhighest number of proxies and provide related advice and informational support, for a services fee and the reimbursement of customary disbursements, which are not expected to exceed $25,000 in total.
Vote Required
Proposal 1: Reverse Stock Split. The affirmative vote of the holders of a majorityvotes of the shares of our common stock havingpresent or represented and voting power outstanding on the Record Date is required to approveelection of directors at the amendment to our Certificate of Incorporation to effect a reverse stock split of our common stock. AbstentionsAnnual Meeting will be treatedelected to the Board of Directors. Proxies that are submitted and not so marked as votes against this proposal.to withhold authority to vote for the nominee will be voted FOR that nominee and will be counted toward such nominee's achievement of a plurality. Brokerage firms willdo not have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. However, if thatShares present at the meeting or represented by proxy where the stockholder properly withholds authority isto vote for such nominee in accordance with the proxy instructions will not exercised, any resulting broker non-votes will have the same effect asbe counted toward such nominee's achievement of a vote against this proposal.plurality.
Proposal 2. Private Placement Proposal.2: Approval of Amendment to the Company’s 2018 Stock Option and Incentive Plan. Pursuant to Nasdaq Marketplace Rule 5635(e), the Private Placement Proposal must be approved by a majority of the votes cast affirmatively or negatively on such proposal. Therefore, theThe affirmative vote of the holders of a majority of the shares of our common stock representedCommon Stock cast by the stockholders present in person or represented by proxy and entitled to vote on such proposal that cast a vote for, or against such proposalat the Annual Meeting is required forto approve the approval of this proposal. Abstentions will have no effect onamendment to the results of this vote.Company’s 2018 Plan. Brokerage firms do not have authority to

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vote customers’ unvoted shares held by the firms in street name on this proposal. SuchAs a result, any shares not voted by a customer will be treated as a broker non-vote. Abstentions and broker non-votes will not be counted towards the vote total for this proposal and will have no effect on the results of this vote.
Proposal 3: Ratification of Independent Registered Public Accounting Firm.    The affirmative vote of a majority of the shares of Common Stock cast by the stockholders present in person or represented by proxy at the Annual Meeting is required to ratify the selection of RSM US LLP as our independent registered public accounting firm for the year ending December 31, 2020. Brokerage firms do have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. Abstentions and broker non-votes will not be counted towards the vote total for this proposal and will have no effect on the results of this vote.
Other Matters.    The Board knows of no other matters to be presented at the Annual Meeting. If any other matter should be presented at the Annual Meeting upon which a vote properly may be taken, the affirmative vote of the majority of shares present, in person or represented by proxy, and voting on that matter is required for approval and all such shares represented by proxies received by the Board will be voted with respect thereto in accordance with the judgment of the persons named as attorneys-in-fact in the proxies.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The proxy statement and annual report to stockholders are available for viewing, printing and downloading at http://ir.yield10bio.com/investor-relations.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
        
The following table sets forth certain information with respect to theregarding beneficial ownership of our common stockthe Company’s Common Stock as of November 15, 2019 for (a) our named executive officers, (b) our directors, (c) our executive officers and directors as a group, and (d)March 18, 2020: (i) by each stockholderperson known to us to beneficially ownbe the beneficial owner of more than five percent5% of our common stock. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. We deem shares that may be acquired by an individual or group within 60 days following November 15, 2019, pursuant to the exercise of options or warrants to be outstanding for the purpose of computing the percentage ownership of such individual or group, but not for the purpose of computing the percentage ownership of any other person shown in the table. Except as otherwise indicated, we believe that the stockholders named in the table have sole voting and investment power with respect to all shares shown to be beneficially owned by them based on information provided to us by these stockholders. Percentage ownership is based on a total of 12,567,582 shares of Common Stock; (ii) by each of our common stock issueddirectors and outstanding on November 15, 2019.nominees; (iii) by each of our named executive officers; and (iv) by all of our directors and executive officers as a group. Unless otherwise noted below, the address of each person listed on the table is c/o Yield10 Bioscience, Inc., 19 Presidential Way, Woburn, MA 01801.
CategoryBeneficial OwnerShares of common stock (1)Options Exercisable Within 60 Days (2)Warrants Exercisable Within 60 Days (2)Total Shares Beneficially OwnedPercentage of Outstanding Shares (3)
5% Stockholders


Jack W. Schuler (4)
100 N. Field Drive
Suite 360
Lake Forest, IL 60045
3,804,885—
2,067,136
5,872,02140.1%
        
Directors and Named Executive Officers





Lynne H. Brum (5)31,52096,583
—
128,1031.0%
Oliver P. Peoples (6)91,752326,875
—
418,6273.2%
Kristi Snell (7)28,022181,834
—
209,8561.6%
Richard Hamilton3,04126,431
—
29,4720.2%
Peter Kellogg5,30237,333
—
42,6350.3%
Joseph Shaulson (8)35,295169,030
—
204,3251.6%
Anthony J. Sinskey (9)12,37247,218
—
59,5900.5%
Robert L Van Nostrand11,29367,492
—
78,7850.6%
All directors and executive officers as a group (9 persons)(10)




243,5901,050,048
—
1,293,6389.5%
Beneficial Owner 
Shares of
Common
Stock(1)
 
Options
Exercisable
Within 60
Days(2)
 Warrants Exercisable Within 60 Days (2) 
Total
Shares
Beneficially
Owned
 
Percentage of
Outstanding
Shares(3)
5% Stockholders:          
Jack W. Schuler(4)
28161 North Keith Drive
Lake Forest, IL 60045
 428,395
 —
 840,429
 1,268,824
 45.9%
Directors, Nominees and Named Executive Officers:        
Lynne. H. Brum(8) 1,185
 2,668
 —
 3,853
 *
Oliver P. Peoples, Ph.D.(5) 2,761
 9,075
 —
 11,836
 *
Kristi D. Snell, Ph.D.(9) 1,097
 4,997
 —
 6,094
 *
Sherri M. Brown, Ph.D. —
 751
 —
 751
 *
Richard W. Hamilton, Ph.D. 76
 691
 —
 767
 *
Joseph Shaulson(6) 881
 5,309
   6,190
 *
Anthony J. Sinskey, Sc.D.(7) 309
 1,211
 —
 1,520
 *
Robert L. Van Nostrand 282
 1,717
 —
 1,999
 *
All directors and executive officers as a group (9 persons)(10) 7,586
 29,099
 —
 36,685
 1.9%




6



*less than 1%.
(1)Beneficial ownership, as such term is used herein, is determined in accordance with Rule 13d-3(d)(1) promulgated under the Securities Exchange Act of 1934, as amended, and includes voting and/or investment power with respect to shares of our common stock.Common Stock. Unless otherwise indicated, the named person possesses sole voting and investment power with respect to the shares.
(2)Consists of shares of common stockCommon Stock subject to stock options and warrants held by the person that are currently vested or will vest within 60 days after November 15, 2019.March 18, 2020.
(3)Percentages of ownership are based upon 12,567,5821,923,184 shares of common stockCommon Stock issued and outstanding as of November 15, 2019.March 18, 2020. Shares of common stockCommon Stock that may be acquired pursuant to options and warrants that are vested and exercisable within 60 days after November 15, 2019,March 18, 2020, are deemed outstanding for computing the percentage ownership of the person holding such options, but are not deemed outstanding for the percentage ownership of any other person.
(4)The reported securities consist of 2,838,128394,375 shares of common stockCommon Stock and 2,067,136840,429 shares of common stockCommon Stock underlying the warrants owned by the JWS Living Trust, 965,91433,999 shares of common stockCommon Stock owned by the Schuler Family Foundation, and 84321 shares of common stockCommon Stock owned by the Renate Schuler Trust. Mr. Schuler has sole voting and investment power over the shares issued to the JWS Living Trust, the Schuler Family Foundation and Renate Schuler Trust. Beneficial ownership information for Mr. Schuler has been derived from his historical SEC filings.
(5)Includes 23,991 shares held for Ms. Brum in the Company’s 401(k) plan.
(6)Includes 24,1241,075 shares held for Dr. Peoples in the Company’sCompany's 401(k) plan.
(7)
(6)Includes 23,433 shares held for Dr. Snell in the Company’s 401(k) plan.
(8)Includes 1,47037 shares held for Mr. Shaulson in the Company’sCompany's 401(k) plan.
(9)
(7)Includes 82220 shares owned by Dr. Sinskey’sSinskey's spouse and 1664 shares owned by a trust over which Dr. Sinskey may be deemed to share voting and investment power. Dr. Sinskey disclaims beneficial ownership of such shares.
(8)Includes 999 shares held for Ms. Brum in the Company's 401(k) plan.
(9)Includes 985 shares held for Dr. Snell in the Company's 401(k) plan.
(10)Includes Charles B. Haaser, who is an executive officer but not a named executive officer. Also includes a total of 95,7354,036 shares held for current executive officers and Mr. Shaulson, a current director and our former President and Chief Executive Officer, in the Company’sCompany's 401(k) plan.


7

4



PROPOSAL 1

ELECTION OF DIRECTOR
REVERSE STOCK SPLITNominee

(Notice Item 1)

General
AtThe Company's Board of Directors currently consists of six (6) members. The Company's amended and restated certificate of incorporation divides the Special MeetingBoard of Directors into three classes. One class is elected each year for a term of three years and until their successors have been duly elected and qualified, or until their earlier death, resignation or removal. The Board of Directors, upon the recommendation of the Nominating and Corporate Governance Committee, has nominated Oliver P. Peoples, Ph.D., and recommends that he be elected to the Board of Directors as a Class II Director, to hold office until the annual meeting of stockholders holders of our common stock are being asked to approve the amendment to our Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”) to effect a reverse stock split of the issued and outstanding shares of common stock (such split to combine a number of outstanding shares of our common stock between twenty (20) and fifty (50), such number consisting of only whole shares, into one (1) share of common stock). The full text of the proposed amendment to our Certificate of Incorporation is attached to this proxy statement as Appendix B.
If approved by the stockholders, the reverse stock split would become effective at a time, and at a ratio, to be designated byheld in the year 2023 and until his successor has been duly elected and qualified or until his earlier death, resignation or removal. The nominee is a Class II Director, whose term expires at this Annual Meeting. The Board of Directors is also composed of (i) two Class III Directors (Anthony J. Sinskey, Sc.D. and Richard W. Hamilton, Ph.D.), whose terms expire at the annual meeting of stockholders to be held in 2021, and (ii) two Class I Directors (Sherri M. Brown, Ph.D. and Robert L Van Nostrand), whose terms expire at the annual meeting of stockholders to be held in 2022. Mr. Van Nostrand serves as the Chairman of the Board of Directors. TheJoseph Shaulson, whose term as a director is also expiring at the Annual Meeting, will not be standing for reelection to the Board of Directors may effect only one reverse stock split asDirectors. As a result, of this authorization. The Board of Directors’ decision as to when to effectfollowing the reverse stock split will be based on a numberAnnual Meeting, the authorized size of factors, including market conditions, existing and expected trading prices for our common stock, the continued listing requirements of The Nasdaq Capital Market (“Nasdaq”) and the terms of the Series B Preferred Stock, and in particular the increasing dividend the Company would have to pay on the Series B Preferred Stock if the Company does not implement a reverse stock split. Even if the stockholders approve the reverse stock split, we reserve the right not to effect the reverse stock split if the Board of Directors does not deem it to be in the best interests of us and our stockholders to effect the reverse stock split. The reverse stock split, if authorized pursuant to this resolution and if deemed by the Board of Directors to be in the best interests of us and our stockholders, will be effected at a time that is not later than six months after the date of the Special Meeting.
The actions taken in connection with the reverse stock split will reduce the number of outstanding shares of our common stock, but the number of total authorized shares under the Company’s Certificate of Incorporation will remain at 60,000,000 authorized shares. As of November 25, 2019, 31,272,582 shares of our common stock were issued and outstanding. Assuming a 1-for-20 reverse stock split is effected, there will be approximately 9,735,038 shares outstanding or reserved for future issuance, 1,437,500 of which will be reserved for conversion of the Series B Preferred Stock and 5,750,000 of which will be reserved for exercise of the warrants issued in the Offering. Assuming a 1-for-50 reverse stock split is effected, there will be approximately 3,894,015 shares outstanding or reserved for future issuance, 575,000 of which will be reserved for conversion of the Series B Preferred Stock and 2,300,000 of which will be reserved for exercise of the warrants issued in the Offering.
Purposedecreased to five (5) members.
The Board of Directors has approvedknows of no reason why the proposal authorizingnominee would be unable or unwilling to serve, but if the reverse stock splitnominee should for any reason be unable or unwilling to serve, the proxies will be voted for the election of such other person for the office of director as the Board of Directors may recommend in the place of such nominee. Unless otherwise instructed, the proxy holders will vote the proxies received by them for the nominee named below.
Recommendation of the Board
The Board of Directors unanimously recommends that you vote “FOR” the nominee listed below.
The following reasons:table sets forth the nominee to be elected at the Annual Meeting and the continuing directors, the year each such nominee or director was first elected a director, the positions with the Company currently held by each such nominee or director, the year each nominee's or continuing director's current term will expire, and each nominee's and continuing director's current class:
Nominee's or Director's Name 
Year
First
Became
Director
 Position(s) with the Company 
Year
Current
Term Will
Expire
 
Current
Director
Class
Nominee for Class II Director:        
Oliver P. Peoples, Ph.D. 1992 
President and Chief Executive
Officer, Director
 2023 II
Continuing Directors:        
Anthony J. Sinskey, Sc.D.  1992 Director 2021 III
Richard W. Hamilton, Ph.D.  2017 Director 2021 III
Robert L. Van Nostrand 2006 Chairman of the Board, Director2022  I
Sherri M. Brown, Ph.D. 2020 Director 2022  I


5



DIRECTORS AND EXECUTIVE OFFICERS
The Company's executive officers are appointed on an annual basis by, and serve at the discretion of the Board. Each executive officer is a full-time employee of Yield10. The following table sets forth the directors and executive officers of the Company, their ages, and the positions currently held by each such person with the Company as of the date of this proxy statement:
NameAgePosition
Oliver P. Peoples, Ph.D. 62President and Chief Executive Officer, Director
Sherri M. Brown, Ph.D.(4)58Director
Richard W. Hamilton, Ph.D.(1)(2)(3)57Director
Anthony J. Sinskey, Sc.D.(1)(2)(3)80Director
Robert L. Van Nostrand(1)(2)62Chairman of the Board, Director
Lynne H. Brum56Vice President, Planning and Corporate Communications
Charles B. Haaser64
Vice President, Finance, Chief Accounting
Officer and Treasurer
Kristi D. Snell, Ph.D. 52
Vice President, Research and Chief Science
Officer

(1)Member of the Audit Committee
(2)Member of the Compensation Committee
(3)Member of the Nominating and Corporate Governance Committee
(4)Member of the Science and Technology Committee
BIOGRAPHICAL INFORMATION
Oliver P. Peoples, Ph.D., has served as our President and Chief Executive Officer since October 2016. He was co-founder of Yield10. He served as our Chief Scientific Officer starting in January 2000 and was previously our Vice President of Research and Development. Dr. Peoples has served as a Director since June 1992. Before founding the Company, Dr. Peoples was a research scientist with the Department of Biology at MIT. The research carried out by Dr. Peoples at MIT established the fundamental tools and methods for engineering bacteria and plants to produce polyhydroxyalkanoates. Dr. Peoples received a Ph.D. in Molecular Biology from the University of Aberdeen, Scotland. The Board believes that Dr. Peoples provides important technical and scientific understanding to the Board's analysis of Company strategy. As Chief Executive Officer and a founder of the Company, Dr. Peoples has unique information related to the Company's research and technology and has led and directed many of its scientific research and development programs. Dr. Peoples also contributes to the Board's understanding of the intellectual property aspects of the Company's technology platforms.
Sherri M. Brown, Ph.D., joined Yield10 as a Director in February 2020 and serves as Chair of the Science and Technology Committee. Dr. Brown previously served as a Special Commercial and Technical Advisor to the Company since December 2018. Since 2017, Dr. Brown has served as a managing director of The Yield Lab, a global agrifood tech accelerator based in St. Louis. She previously served in several leadership positions involving the development and global commercialization of new products including biotechnology traits for canola, soybean and corn at Monsanto Company for 28 years. She served as Vice President, Science Strategy at Monsanto from 2014 to 2017. Prior to that, she was Vice President, Global Commercial Technology/Product Development, from 2008 to 2014, where she was responsible for evaluating and launching the seed and trait pipeline, including eight new biotech traits. In addition, she was Vice President, Technology, Global Corn Business (1999-2004) and Vice President, Technology, Oilseeds Business team (1998-1999). Dr. Brown earned a Ph.D. at Indiana University, Bloomington, IN with a major in Genetics/Molecular, Cellular and Developmental Biology. She earned a B.S. at Hope College, Holland, MI with a double major in Biology and Chemistry. The Board has concluded that Dr. Brown


6



should serve as a Director because of the depth of her experience and expertise in agricultural product research and development.
Richard W. Hamilton, Ph.D., joined Yield10 as a Director in March 2017 and serves as Chairman of the Nominating and Corporate Governance Committee. From 2002 to 2016, he served as Chief Executive Officer and as a member of the board of directors at Ceres, Inc., after previously serving as Ceres’ Chief Financial Officer from 1998 to 2002. In addition to his leadership role at Ceres, Dr. Hamilton has served on the Keck Graduate Institute Advisory Council and was a founding member of the Council for Sustainable Biomass Production. He has served on the U.S. Department of Energy's Biomass Research and Development Technical Advisory Committee and has been active in the Biotechnology Industry Organization, where he has served as Vice Chairman of the organization, chaired its Food and Agriculture Governing Board and served in other leadership roles. From 1992 to 1997, Dr. Hamilton was a Principal at Oxford Bioscience Partners, and from 1993 to 1996, he was an Associate at Boston-based MVP Ventures. From 1990 to 1991, Dr. Hamilton was a Howard Hughes Medical Institute Research Fellow at Harvard Medical School. Dr. Hamilton received a B.S. in biology from St. Lawrence University and holds a Ph.D. in molecular biology from Vanderbilt University. The Board believes that Dr. Hamilton brings extensive management, agricultural biotechnology and financial experience that will contribute to his role on the Board and as Chairman of our Nominating and Corporate Governance Committee. He also serves as an important resource on the Audit Committee.
Anthony J. Sinskey, Sc.D.,has served as a Director since June 1992, was a co-founder of Yield10, and serves as Chairman of the Compensation Committee. From 1968 to present, Dr. Sinskey has been on the faculty of MIT. Currently at MIT, he serves as Professor of Microbiology in the Department of Biology, as well as faculty director of the Center for Biomedical Innovation. Dr. Sinskey was a co-founder and served on the board of directors of Merrimack Pharmaceuticals, Inc. from 1999 until January 2015. Dr. Sinskey received a B.S. from the University of Illinois and a Sc.D. from MIT. The Board believes that as a faculty member of an academic institution with significant research activity in areas related to the Company's own research, Dr. Sinskey contributes to the Board his scientific knowledge and his awareness of new developments in these fields. Dr. Sinskey's involvement with other start-up and developing enterprises also makes him a valuable Board member.
Robert L. Van Nostrand is a consultant who has served as Chairman of the Board since October 2013 and as a Director since October 2006. From January 2010 to July 2010, he was Executive Vice President and Chief Financial Officer of Aureon Laboratories, Inc. From July 2007 until September 2008, Mr. Van Nostrand served as Executive Vice President and Chief Financial Officer of AGI Dermatics, Inc. Mr. Van Nostrand was with OSI Pharmaceuticals, Inc. from 1986 to 2007, serving as Senior Vice President and Chief Compliance Officer from May 2005 until July 2007, and as the Vice President and Chief Financial Officer from 1996 through 2005. Prior to joining OSI, Mr. Van Nostrand was in a managerial position with Touche Ross & Co. (currently Deloitte). Mr. Van Nostrand serves on the board of directors and is Chairman of the audit committee of Intra-Cellular Therapies, Inc. (since January 2014), serves on the boards of directors of Enumeral Biomedical, Inc. (since December 2014) and the Biomedical Research Alliance of New York (BRANY) (since 2011), and served on the board of directors and as Chairman of the audit committee of Apex Bioventures, Inc. from 2006 to 2009. Mr. Van Nostrand received a B.S. in Accounting from Long Island University, New York, completed advanced management studies at the Wharton School, and he is a Certified Public Accountant. The Board believes that the Company is very fortunate to have Mr. Van Nostrand serve as a director and as Chairman of our Audit Committee because of the depth of his experience and expertise in financial reporting and corporate compliance, as well as his operational experience.
Lynne H. Brum has served as Vice President, Planning and Communications since October 2016. She joined the Company in November 2011 as Vice President, Marketing and Corporate Communications. Prior to joining the Company, in 2010 to 2011 she was a communications consultant and served in various roles including as a freelance project director for Seidler Bernstein Inc. Ms. Brum served from 2007 to 2009 as an Executive Vice President at Porter Novelli Life Sciences, a subsidiary of global PR firm, Porter Novelli International. Prior to that, Ms. Brum was responsible for corporate communications, investor relations and brand management for Vertex Pharmaceuticals, Inc. from 1994 to 2007 in various positions, including Vice President of Strategic Communications. Ms. Brum was also a vice president at Feinstein Kean Healthcare and was part of the communications team at Biogen, Inc. Ms. Brum holds a bachelor's degree in biological sciences from Wellesley College and a master's degree in business administration from Simmons College's School of Management.


7



Charles B. Haaser has served as the Company's Vice President, Finance, Chief Accounting Officer and Treasurer since October 2016 after having served as Chief Accounting Officer and Treasurer since November 2014, and its Corporate Controller since 2008. Mr. Haaser has more than thirty-five years of experience in accounting and finance, primarily working for publicly traded U.S. companies. Before joining Yield10, Mr. Haaser was the Corporate Controller of Indevus Pharmaceuticals, Inc. from 2006 to 2008. He was the Corporate Controller and Principal Accounting Officer at ABIOMED, Inc. from 1998 to 2006 and additionally served as ABIOMED's Acting Chief Financial Officer from 2003 to 2006. From 1997 to 1998 Mr. Haaser was Controller for Technical Communications Corporation and from 1986 to 1997 was the Director of Finance at ISI Systems, Inc. From 1984 to 1986 Mr. Haaser was an auditor in the commercial audit division of Price Waterhouse LLP (now PricewaterhouseCoopers LLP). Mr. Haaser received a bachelor's degree in business administration (finance) from the University of Notre Dame, an MBA from Northeastern University and a Masters of Science in Taxation from Bentley University. Mr. Haaser became a Certified Public Accountant in 1997.
Kristi D. Snell, Ph.D. was named Vice President, Research and Chief Science Officer in October 2016 in conjunction with the transition to Yield10 as the Company’s core business. Dr. Snell joined the Company in 1997 and she has led the plant science research program since its inception. She has held a number of positions with the Company, including Vice President, Research and Biotechnology from July 2013 until October 2016 and President of Metabolix Oilseeds, the Company's wholly owned Canadian subsidiary, from April 2014 to present. Dr. Snell has more than 20 years of relevant experience and is an industry recognized expert in metabolic engineering of plants and microbes for the production of novel products and increased plant yield. Dr. Snell received a Bachelor of Science degree in Chemistry from the University of Michigan, and a Ph.D. in Organic Chemistry from Purdue University where she worked on metabolic engineering strategies to increase carbon flow to industrial products. Dr. Snell conducted her post-doctoral research at MIT in biochemistry and metabolic engineering.
CORPORATE GOVERNANCE AND BOARD MATTERS
Independence of Members of the Board of Directors
 The Board of Directors has determined that each of the Company's non-employee directors (Dr. Brown, Dr. Hamilton, Dr. Sinskey, and Mr. Van Nostrand) is independent within the meaning of the director independence standards of The Nasdaq Stock Market LLC. (“Nasdaq”) and the Securities and Exchange Commission (“SEC”), including rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Furthermore, the Board of Directors has determined that each member of each of the Audit, Compensation, Nominating and Corporate Governance and Science and Technology committees of the Board of Directors is independent within the meaning of the director independence standards of Nasdaq and the SEC, and that each member of the Audit Committee meets the heightened director independence standards for audit committee members as required by the SEC.
  At least annually, a committee of the Board of Directors evaluates all relationships between the Company and each director in light of relevant facts and circumstances for the purpose of determining whether a material relationship exists that might signal a potential conflict of interest or otherwise interfere with such director's ability to satisfy his responsibilities as an independent director.
Executive Sessions
The Board of Directors generally holds executive sessions of the independent directors following regularly scheduled in-person meetings of the Board of Directors, at least four times a year. Executive sessions do not include any employee directors of the Company.
Board Leadership Structure
Robert L. Van Nostrand serves as our non-executive Chairman of the Board. Since March 2008, we have maintained a leadership structure with the non-executive Chairman separate from the Chief Executive Officer, although the Board of Directors has no formal policy with respect to the separation of such offices. Our Board of Directors believes that effectinghaving separate offices of the reverse stock split may be an effective means of regaining compliance withChairman and Chief Executive Officer currently functions well


8



and is the bid price requirementappropriate leadership structure for the continued listing of our common stock on Nasdaq;
Company. While the Board of Directors believes that it ismay combine these offices in the best interests of the Companyfuture if it considers such a combination to allow for the conversion of the Series B Preferred Stock and the exercise of the warrants issued in the Offering, and to thereby avoid the requirement to pay a dividend on the Series B Preferred Stock if those shares remain outstanding as of March 31, 2020;
the Board of Directors believes that it isbe in the best interest of the Company, it currently intends to retain this structure. Separating these positions allows our Chief Executive Officer to focus on our day-to-day business, while allowing the Chairman of the Board to lead our Board of Directors in its fundamental role of providing advice to and independent oversight of management.
The Board of Directors' Role in Risk Oversight
The risk oversight function of the Board is carried out by both the Board and its committees. The full Board (or the appropriate Board committee in the case of risks that are under the purview of a particular committee) discusses with management our major risk exposures, their potential impact on our Company, and the steps we take to manage them. The Board regularly reviews information regarding our liquidity and operations, as well as the risks associated with each, and oversees management of risks associated with environmental, health and safety, and other compliance matters. Our Audit Committee meets periodically with management to discuss our major financial and operating risk exposures and the steps, guidelines and policies taken or implemented relating to risk assessment and risk management. The Compensation Committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. Our Nominating and Corporate Governance Committee manages risks associated with the independence of the Board and potential conflicts of interest.
Compensation Risk Assessment
The Compensation Committee believes that our employee compensation policies and practices are not structured to be reasonably likely to present a material adverse risk to the Company. We believe we have allocated our compensation among base salary and short- and long-term incentive compensation opportunities in such a way as to not encourage excessive or inappropriate risk-taking by our executives and other employees. We also believe our approach to goal setting and evaluation of performance results reduce the likelihood of excessive risk-taking that could harm our value or reward poor judgment.
Policies Governing Director Nominations
Director Qualifications
The Nominating and Corporate Governance Committee of the Board of Directors is responsible for reviewing, from time to time, the appropriate qualities, skills and characteristics desired of members of the Board of Directors in the context of the current make-up of the Board of Directors and selecting or recommending to the Board of Directors, nominees for election as Directors. This assessment includes consideration of the following minimum qualifications set forth in our Corporate Governance Guidelines that can be found in the corporate governance section of our website at http://ir.yield10bio.com/corporate-governance:
The director shall have experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing.
The director shall be highly accomplished in his or her respective field, with superior credentials and recognition.
The director shall be well regarded in the community and shall have a long-term reputation for high ethical and moral standards.
The director shall have sufficient time and availability to devote to the affairs of the Company, particularly in light of the number of shares available for issuanceboards on which the nominee may serve.
To the extent such director serves or has previously served on other boards, the director shall have a demonstrated history of actively contributing at board meetings.
The Nominating and Corporate Governance Committee also considers numerous other qualities, skills and characteristics when evaluating director nominees, such as:
An understanding of and experience in future financings and for other purposes, although the Company does not currently have any plansbiotechnology, chemicals or proposals relating to any future issuances; and

agricultural industries;

8

9



the BoardAn understanding of Directors believes that a higher stock price may help generate investor interestand experience in us, including interest among institutional investors.accounting oversight, governance, finance, marketing or regulatory affairs; and
If the reverse stock split successfully increases the per share price of our common stock and facilitates the continued listing of our common stock on Nasdaq, as to which no assurance can be given, the Board of Directors believes this increase may facilitate future financings, enhance our ability to transactLeadership experience with our securities and increase the interest of third parties with whom we may be negotiating for purposes of evaluating potential strategic alternatives.public companies or other significant organizations.
Nasdaq Requirements for Continued Listing
Our common stock is listed on Nasdaq under the symbol “YTEN.” One of the requirements for continued listing on Nasdaq is maintenance of a minimum closing bid price of $1.00 per share. On December 3, 2019, the closing market price per share of our common stock was $0.15, as reported by Nasdaq.
On June 25, 2019, we received a notification letter from Nasdaq informing us that for the last 30 consecutive business days, the bid price of our securities had closed below $1.00 per share as required by Nasdaq Listing Rule 5550(a)(2). This notice has no immediate effect on our Nasdaq listing and we have 180 calendar days, or until December 23, 2019, to regain compliance with this requirement, which deadline may be extended for another 180 calendar day period if approved by Nasdaq. As of December 3, 2019, we had not regained compliance with this listing requirement, since the closing bid price of our securities had not been at least $1.00 per share for a minimum of ten consecutive business days. To cure the deficiency, we intend to conduct the reverse stock split of our common stock for which we are seeking stockholder approval in this proxy statement.
Even after we implement the reverse stock split for which we are seeking approval, we cannot assure you that our share price will comply with the requirements for continued listing of our common stock on Nasdaq in the future or that we will comply with the other continued listing requirements. If our common stock is delisted from Nasdaq, our common stock would likely trade in the over-the-counter market. 
If our shares were to trade on the over-the-counter market, selling our common stock could be more difficult because smaller quantities of shares would likely be bought and sold, and transactions could be delayed. In addition, in the event our common stock is delisted, broker-dealers have certain regulatory burdens imposed upon them, which may discourage broker-dealers from effecting transactions in our common stock, further limiting the liquidity of our common stock. These factors could result in lower prices and larger spreads in the bid and ask prices for our common stock.
Such delisting from Nasdaq and continued or further declines in our share price could also greatly impair our ability to raise additional necessary capital through equity or debt financing, and could significantly increase the ownership dilution to stockholders caused by our issuing equity in financing or other transactions.
In light of the factors mentioned above, our Board of Directors approved the reverse stock split as a potential means of increasing the share price of our common stock above $1.00 per share and of maintaining the share price of our common stock above $1.00 per share in compliance with Nasdaq requirements.
Registered Public Offering and Concurrent Private Placement
On November 19, 2019, we completed a registered public offering (the “Public Offering”) pursuant to which we sold (a) 12,480,000 Class A Units, with each Class A Unit consisting of one share of our common stock, a warrant to purchase one share of common stock, which expires two and one half years after the date of issuance (a “Series A Warrant”), and a warrant to purchase one share of common stock, which expires seven and one half years after the date of issuance (a “Series B Warrant”); and (ii) 2,504 Class B Units, with each Class B Unit consisting of one share of the Company’s Series A convertible preferred stock, par value $0.01 per share, Series A Warrants to purchase 5,000 shares of common stock, and Series B warrants to purchase 5,000 shares of common stock. In addition, we issued 3,750,000 shares of common stock, 3,750,000 Series A Warrants and 3,750,000 Series B Warrants to the underwriter pursuant to the overallotment option granted to the underwriter which was exercised in full. We offered the Class A Units and Class B Units pursuant to a registration statement on Form S-1 (File No. 333-233683), as amended. Concurrently with the Public Offering, we also sold 5,750 shares of Series B convertible preferred stock, par value $0.01 per share (“Series

9



B Preferred Stock”), Series A Warrants to purchase 28,750,000 shares of common stock, and Series B Warrants to purchase 28,750,000 shares of common stock to certain investors (the “Investors”) pursuant to an unregistered private placement (the “Private Placement” and together with the Public Offering, the “Offering”).
As of November 25, 2019, 31,272,582 shares of our common stock were issued and outstanding and approximately an additional 9,514,071 shares were reserved for issuance upon the exercise of outstanding warrants and options granted under our various stock-based plans. We do not currently have a sufficient number of authorized shares of common stock to allow for (i) the conversion of the Series B Preferred Stock into common stock or (ii) the full exercise of the warrants issued in the Offering. The approval of the reverse stock split is required in order to allow the exercise of the warrants issued in the Offering and the conversion of the Series B Preferred Stock. The investors in the Offering may lose the value of their warrants, and we would lose the cash proceeds from the exercise of the warrants, if this Proposal 1 is not approved. Further, if we cannot make sufficient shares of common stock available for the full conversion of the Series B Preferred Stock prior to March 31, 2020, shares of the Series B Preferred Stock will be entitled to receive cumulative quarterly dividends payable in additional shares of Series B Preferred Stock, at the initial quarterly rate of 2% of the stated value of those shares, subject to a quarterly increase of 2%.
Assuming a 1-for-20 reverse stock split is effected, there will be approximately 9,735,038 shares outstanding or reserved for future issuance, 1,437,500 of which will be reserved for conversion of the Series B Preferred Stock and 5,750,000 of which will be reserved for exercise of the warrants issued in the Offering. Assuming a 1-for-50 reverse stock split is effected, there will be approximately 3,894,015 shares outstanding or reserved for future issuance, 575,000 of which will be reserved for conversion of the Series B Preferred Stock and 2,300,000 of which will be reserved for exercise of the warrants issued in the Offering. The issuance of shares of common stock upon conversion of the Series B Preferred Stock and exercise of the warrants will have a dilutive effect on our stockholders.
Potential Increased Investor Interest
In approving the proposal authorizing the reverse stock split, the Board of Directorsothers are considered that our common stock may not appeal to brokerage firms that are reluctant to recommend lower priced securities to their clients. Investors may also be dissuaded from purchasing lower priced stocks because the brokerage commissions, as a percentage of the total transaction, tend to be higher for such stocks. Moreover, the analysts at many brokerage firms do not monitor the trading activity or otherwise provide coverage of lower priced stocks.
There are risks associated with the reverse stock split, including that the reverse stock split may not result in a sustained increase in the per share price of our common stock.
We cannot predict whether the reverse stock split will increase the market price for our common stock on a sustained basis. The history of similar stock split combinations for companies in like circumstances is varied. There is no assurance that:
the market price per share of our common stock after the reverse stock split will rise in proportion to the reduction in the number of shares of our common stock outstanding before the reverse stock split;
the reverse stock split will result in a per share price that will attract brokers and investors who do not trade in lower priced stocks;
our ability to conduct future financings will be enhanced; and
the market price per share will either exceed or remain in excess of the $1.00 minimum bid price as required by Nasdaq, or that we will otherwise meet the requirements of Nasdaq for continued listing inclusion for trading on Nasdaq.
The market price of our common stock will also be based on our performance and other factors, some of which are unrelated to the number of shares outstanding. If the reverse stock split is effected and the market price of our common stock declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur in the absence of a reverse stock split. Furthermore, the liquidity of our

10



common stock could be adversely affected by the reduced number of shares that would be outstanding after the reverse stock split.
Principal Effects of the Reverse Stock Split
If the stockholders approve the proposal to authorize the Board of Directors to implement the reverse stock split and the Board of Directors implements the reverse stock split, we will amend our Certificate of Incorporation by adding the following after the end of the first paragraph of Article IV:
[“Upon effectiveness of this Certificate of Amendment (the “Effective Time”), the shares of Common Stock issued and outstanding immediately prior to the Effective Time and the shares of Common Stock issued and held in the treasury of the Corporation immediately prior to the Effective Time are reclassified into a smaller number of shares such that each [ ] shares of issued Common Stock immediately prior to the Effective Time is reclassified into one (1) share of Common Stock. Notwithstanding the immediately preceding sentence, no fractional shares shall be issued as a result of the reverse stock split. Instead, any stockholder who would otherwise be entitled to a fractional share of our Common Stock as a result of the reclassification shall be entitled to receive a cash payment equal to the product of such resulting fractional interest in one share of our Common Stock multiplied by the closing trading price of our Common Stock on the trading day immediately preceding the effective date of the reverse stock split. Notwithstanding the foregoing, the Corporation shall not be obliged to issue certificates evidencing the shares of Common Stock outstanding as a result of the reverse stock split or cash in lieu of fractional shares, if any, unless and until the certificates evidencing the shares held by a holder prior to the reverse stock split are either delivered to the Corporation or its transfer agent, or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates.
Each stock certificate that, immediately prior to the Effective Time, represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time shall, from and after the Effective Time, automatically and without the necessity of presenting the same for exchange, represent the number of whole shares of Common Stock after the Effective Time into which the shares of Common Stock formerly represented by such certificate shall have been reclassified (as well as the right to receive a cash payment in lieu of a fractional share of Common Stock), provided, however, that each person of record holding a certificate that represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time shall receive, upon surrender of such certificate, a new certificate evidencing and representing the number of whole shares of Common Stock after the Effective Time into which the shares of Common Stock formerly represented by such certificate shall have been reclassified (including the right to receive a cash payment in lieu of a fractional share of Common Stock).”]
The reverse stock split will be effected simultaneously for all issued and outstanding shares of common stock, and the exchange ratio will be the same for all issued and outstanding shares of common stock. The reverse stock split will affect all of our stockholders uniformly and will not affect any stockholder’s percentage ownership interests in the Company, except to the extent that cash payments are made in lieu of fractional shares. Common stock issued pursuant to the reverse stock split will remain fully paid and nonassessable. The reverse stock split will not affect the Company continuing to be subject to the periodic reporting requirements of the Exchange Act. Following the reverse stock split, our common stock will continue to be listed on Nasdaq, under the symbol “YTEN,” although it would receive a new CUSIP number.
By approving this amendment, stockholders will approve the combination of any whole number of shares of common stock between and including twenty (20) and fifty (50) into one (1) share. The certificate of amendment to be filed with the Secretary of State of the State of Delaware will include only that number determineduseful by the Board of Directors to beand are reviewed in the best interestscontext of an assessment of the Companyperceived needs of the Board of Directors at a particular point in time. While the Board does not have a formal diversity policy, the Nominating and its stockholders. Corporate Governance Committee seeks nominees with a broad diversity of experience, professions, skills, and backgrounds.
Process for Identifying and Evaluating Director Nominees
The Board of Directors will not implement any amendment providingis responsible for a different split ratio.
Procedureselecting and nominating candidates for Effecting Reverse Stock Splitelection as directors but delegates the selection and Exchange of Stock Certificates
Ifnomination process to the certificate of amendment is approved by our stockholders,Nominating and if at such time the Board of Directors still believes that a reverse stock split is in the best interests of the Company and its stockholders, the Board of Directors

11



will determine the ratio of the reverse stock split to be implemented. We will file the certificate of amendmentCorporate Governance Committee, with the Secretary of State of the State of Delaware at such time as the Board of Directors has determined the appropriate effective time for the reverse stock split. The Board of Directors may delay effecting the reverse stock split, if at all, until a timeexpectation that is not later than six months from the date of the Special Meeting, without re-soliciting stockholder approval. The reverse stock split will become effective on the date of filing of the certificate of amendment with the Secretary of State of the State of Delaware. Beginning on the effective date of the split, each certificate representing pre-split shares will be deemed for all corporate purposes to evidence ownership of post-split shares. 
Book-Entry Shares
If the reverse stock split is effected, stockholders who hold uncertificated shares (i.e., shares held in book-entry form and not represented by a physical stock certificate), either as direct or beneficial owners, will have their holdings electronically adjusted automatically by our transfer agent (and, for beneficial owners, by their brokers or banks that hold in “street name” for their benefit, as the case may be) to give effect to the reverse stock split. Stockholders who hold uncertificated shares as direct owners will be sent a statement of holding from our transfer agent that indicates the number of post-reverse stock split shares of our common stock owned in book-entry form.
Certificated Shares
As soon as practicable after the effective date of the split, our stockholders will be notified that the reverse stock split has been effected. We expect that our transfer agent will act as exchange agent for purposes of implementing the exchange of stock certificates. Holders of pre-split shares will be asked to surrender to the exchange agent certificates representing pre-split shares in exchange for certificates representing post-split shares in accordance with the procedures to be set forth in a letter of transmittal to be sent by us or our exchange agent. No new certificates will be issued to a stockholder until such stockholder has surrendered such stockholder’s outstanding certificate(s) together with the properly completed and executed letter of transmittal to the exchange agent. Any pre-split shares submitted for transfer, whether pursuant to a sale or other disposition, or otherwise, will automatically be exchanged for post-split shares. STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
Fractional Shares
No fractional shares will be issued in connection with the reverse stock split. Stockholders of record on the effective date of the split who otherwise would be entitled to receive fractional shares because they hold a number of pre-split shares not evenly divisible by the number of pre-split shares for which each post-split share is to be exchanged, will in lieu of a fractional share, be entitled upon surrender to the exchange agent of certificates representing such pre-split shares, if any, to receive payment in cash in lieu of any such resulting fractional shares of common stock as the post-reverse split amounts of common stock will be rounded down to the nearest full share. Such cash payment in lieu of a fractional share of common stock will be calculated by multiplying such fractional interest in one share of common stock by the closing trading price of our common stock on the trading day immediately preceding the effective date of the reverse stock split, and rounded to the nearest cent. No fractional shares will be issued in connection with the reverse stock split.
Accounting Matters
The reverse stock split will not affect the common stock capital account on our balance sheet. However, because the par value of our common stock will remain unchanged on the effective date of the split, the components that make up the common stock capital account will change by offsetting amounts. The stated capital component will be reduced, and the additional paid-in capital component will be increased with the amount by which the stated capital is reduced. The per share net loss and net book value of our common stock will be increased because there will be fewer weighted average shares of common stock outstanding. Prior periods’ common stock and additional paid-in capital balances and net loss per share amounts will be restated to reflect the reverse stock split.

12



Effect on Par Value
The proposed amendment to our Certificate of Incorporation will not affect the par value of our common stock, which will remain at $0.01 per share.
No "Going Private Transaction"
Notwithstanding the anticipated decrease in the number of outstanding shares following the proposed reverse stock split, if effected, our Board of Directors does not intend for this transaction to be the first step in a “going private transaction” within the meaning of Rule 13e-3 under the Exchange Act. 
Potential Anti-Takeover Effect
Although the increased proportion of unissued authorized shares to issued shares could, under certain circumstances, have an anti-takeover effect (for example, by permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the compositionmembers of the Board of Directors or contemplating a tender offermembers of management will be requested to take part in the process as appropriate.
Generally, the Nominating and Corporate Governance Committee identifies candidates for director nominees in consultation with management, through the use of search firms or other transactionadvisers, through the recommendations submitted by stockholders or through such other methods as the Nominating and Corporate Governance Committee deems to be helpful to identify candidates. Once candidates have been identified, the Nominating and Corporate Governance Committee confirms that the candidates meet all of the minimum qualifications for director nominees established by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee may gather information about the candidates through interviews, background checks, or any other means that the Nominating and Corporate Governance Committee deems to be helpful in the evaluation process. The Nominating and Corporate Governance Committee discusses and evaluates the qualities and skills of each candidate, taking into account the overall composition and needs of the Board. Based on the results of the evaluation process, the Nominating and Corporate Governance Committee recommends candidates for the combinationBoard's approval as director nominees for election to the Board. The Nominating and Corporate Governance Committee also recommends candidates for the Board's appointment to the committees of the Board.
Procedures for Recommendation of Nominees by Stockholders
The Nominating and Corporate Governance Committee will consider director candidates who are recommended by the stockholders of the Company. Stockholders, in submitting recommendations to the Nominating and Corporate Governance Committee for director candidates, shall follow the procedures set forth in the Company's Corporate Governance Guidelines found on our website at http://ir.yield10bio.com/corporate-governance. The Nominating and Corporate Governance Committee must receive any such recommendation for nomination not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year's annual meeting.
Such recommendation for nomination must be in writing and include the following:
Name and address of the stockholder making the recommendation, as they appear on the Company's books and records, and of such record holder's beneficial owner;
Number of shares of capital stock of the Company with another company),that are owned beneficially and held of record by such stockholder and such beneficial owner;
Name and address of the reverse stock split proposal is not being proposed in response to any effortindividual recommended for consideration as a director nominee (a “Director Nominee”);
The principal occupation of which we are aware to accumulatethe Director Nominee;
The total number of shares of our commoncapital stock or obtain control of the Company northat will be voted for the Director Nominee by the stockholder making the recommendation;
All other information relating to the recommended candidate that would be required to be disclosed in solicitations of proxies for the election of directors, or is it partotherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including the recommended candidate's written consent to


10



being named in the proxy statement as a nominee and to serving as a director if approved by the Board and elected); and
A written statement from the stockholder making the recommendation stating why such recommended candidate would be able to fulfill the duties of a plandirector.
Nominations must be sent to the attention of the Secretary of the Company by managementU.S. Mail (including courier or expedited delivery service) to recommendYield10 Bioscience, Inc., 19 Presidential Way, Woburn, MA 01801. The Secretary of the Company will promptly forward any such nominations to the Nominating and Corporate Governance Committee. Once the Nominating and Corporate Governance Committee receives the nomination of a seriescandidate, the candidate will be evaluated and a recommendation with respect to such candidate will be delivered to the Board. Nominations not made in accordance with the foregoing policy shall be disregarded by the Nominating and Corporate Governance Committee and votes cast for such nominees shall not be counted.
Policy Governing Stockholder Communications with the Board of similar amendmentsDirectors
The Board provides to every stockholder the ability to communicate with the Board, as a whole, and with individual directors on the Board through an established process for stockholder communication (as that term is defined by the rules of the SEC). Stockholders may send such communication to the attention of the Chairman of the Board or to the attention of the individual director by U.S. Mail (including courier or expedited delivery service) to Yield10 Bioscience, Inc., 19 Presidential Way, Woburn, MA 01801. The Company will forward any such stockholder communication to the Chairman of the Board, as a representative of the Board, and/or to the director to whom the communication is addressed.
Policy Governing Director Attendance at Annual Meetings of Stockholders
Our policy is to schedule a regular meeting of the Board of Directors on the same date as the Company's annual meeting of stockholders and, stockholders. Otheraccordingly, directors are encouraged to be present at our stockholder meetings. All the individuals who were directors of the Company at the time of the 2019 annual meeting of stockholders attended that meeting.
Code of Business Conduct and Ethics
The Company has adopted the Code of Business Conduct and Ethics (“Code of Business Conduct”) as its “code of ethics” as defined by regulations promulgated under the Securities Act of 1933, as amended, and the Exchange Act (and in accordance with the Nasdaq requirements for a “code of conduct”), which applies to all of the Company's directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A current copy of the Code of Business Conduct is available at the Company's website at http://ir.yield10bio.com/corporate-governance under “Investor Relations-Corporate Governance.” A copy of the Code of Business Conduct may also be obtained free of charge from the Company upon a request directed to Yield10 Bioscience, Inc., 19 Presidential Way, Woburn, MA 01801, Attention: Investor Relations. The Company will promptly disclose any substantive changes in or waivers, along with reasons for the waivers, of the Code of Business Conduct granted to its executive officers, including its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, and its directors by posting such information on its website at http://ir.yield10bio.com/corporate-governance.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
Board of Directors
The Board of Directors held four meetings during the year ended December 31, 2019. In addition, there were numerous conference calls held with the Board for informational updates and discussion. During the year ended December 31, 2019, no directorattended, either in person or telephonically, fewer than 75% of the reverse stock split proposal,aggregate of (i) the total number of meetings of the Board and (ii) the total number of meetings held by all committees of the Board on which such director served. The Board has a standing Audit Committee, Compensation Committee and Nominating and Corporate


11



Governance Committee. Each of these committees has a charter that has been approved by the Board of Directors does not currently contemplate recommendingDirectors. A current copy of each charter is available on the adoptionCompany's website at http://ir.yield10bio.com/corporate-governance. Each committee reviews the appropriateness of any other actions that could be construedits charter periodically, as conditions dictate. The Board has also a standing Science and Technology Committee. Each committee retains the authority to affectengage its own advisors and consultants. The composition and responsibilities of each committee are summarized below.
Audit Committee
Mr. Van Nostrand, Dr. Sinskey and Dr. Hamilton serve on the ability of third parties to take over or change controlAudit Committee. Mr. Van Nostrand is the Chairman of the Company.Audit Committee. The Board of Directors has determined that each member of the Audit Committee is independent within the meaning of the Company's and Nasdaq's director independence standards and the SEC’s heightened director independence standards for Audit Committee members as determined under the Exchange Act. The Board of Directors has also determined that each of Mr. Van Nostrand and Dr. Hamilton qualify as “audit committee financial experts” under the rules of the SEC. The Audit Committee held four meetings during the year ended December 31, 2019.
No Dissenters’ RightsThe Audit Committee is responsible for overseeing the accounting and financial reporting processes of the Company and the audits of the financial statements of the Company and exercising the responsibilities and duties set forth in its charter, including but not limited to:
Underappointing, approving the Delaware General Corporation Law,compensation of, and assessing the independence of our stockholders are not entitledindependent registered public accounting firm;
pre-approving auditing and permissible non-audit services, and the terms of such services, to dissenters’ rightsbe provided by our independent registered public accounting firm;
reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures;
coordinating the oversight and reviewing the adequacy of our internal control over financial reporting;
establishing policies and procedures for the receipt and retention of accounting related complaints and concerns; and
preparing the Audit Committee report required by SEC rules to be included in our annual proxy statement.
Compensation Committee
Dr. Sinskey, Dr. Hamilton and Mr. Van Nostrand serve on the Compensation Committee. Dr. Sinskey is the Chairman of the Compensation Committee. The Board of Directors has determined that each member of the Compensation Committee is independent within the meaning of the Company’s, the SEC’s and Nasdaq’s director independence standards. The Compensation Committee held three meetings in the year ended December 31, 2019. The Compensation Committee's responsibilities include:
annually reviewing and approving goals and objectives relevant to compensation of our executive officers, including the Chief Executive Officer;
evaluating the performance of our Chief Executive Officer and other executive officers in light of such goals and objectives;
determining the compensation of our Chief Executive Officer and other executive officers;
reviewing and approving, for the Chief Executive Officer and the other executive officers of the Company, any employment agreements, severance arrangements, and change in control agreements or provisions;
overseeing the administration of our incentive-based and equity-based compensation plans; and
reviewing and making recommendations to the Board with respect to director compensation.
Nominating and Corporate Governance Committee
Dr. Sinskey and Dr. Hamilton serve on the reverse stock split,Nominating and we will not independently provide stockholders with any such right.
Material United States Federal Income Tax ConsequencesCorporate Governance Committee. Dr. Hamilton is the Chairman of the Reverse Stock SplitNominating and Corporate Governance Committee. The Board of Directors has determined that each member of the Nominating and Corporate Governance Committee is independent within the meaning of the Company’s, the SEC’s and Nasdaq’s director independence standards. The Nominating and Corporate Governance Committee held three meetings during the year ended December 31, 2019. The Nominating and Corporate Governance Committee's responsibilities include:
developing and recommending to the Board criteria for Board and committee membership;
establishing procedures for identifying and evaluating director candidates, including nominees recommended by stockholders;


12



identifying individuals qualified to become Board members;
recommending to the Board the persons to be nominated for election as directors and to each of the Board's committees;
developing succession plans for the Board;
developing and recommending to the Board a code of business conduct and ethics and a set of corporate governance guidelines; and
overseeing the evaluation of the Board and its committees.
Science and Technology Committee
In February 2020, the Board formed a Science and Technology Committee. Dr. Brown, Dr. Hamilton and Dr. Sinskey serve on the new committee, with Dr. Brown serving as Chairwoman. The role of the Science and Technology Committee is to provide oversight and guidance on the scientific research, development and commercialization activities of Yield10. These duties include:
review of individual program goals and objectives;
product development strategy, and
budgets and performance.


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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following is not intendedtable summarizes the compensation earned during the years ended December 31, 2019 and December 31, 2018 by our principal executive officer and the two other most highly paid executive officers who were serving as tax or legal advice. Each holder should seek adviceexecutive officers on December 31, 2019 (our named executive officers):
Name and Principal PositionYear Salary Bonus
Stock
Awards(1)
 
Option
Awards(1)
 
Non-Equity
Incentive Plan
Compensation(2)
 All Other Compensation(3) Total
Oliver P. Peoples, Ph.D. 2019 $275,000
 $—
$—
 $187,464
 $—
 $12,258
 $474,722
President and Chief Executive Officer2018 $275,000
 $—
$—
 $450,877
 $—
 $12,375
 $738,252
Lynne H. Brum2019 $233,398
 $—
$—
 $46,866
 $—
 $10,390
 $290,654
Vice President, Planning and Communications2018 $226,600
 $—
$—
 $134,590
 $—
 $10,923
 $372,113
Kristi D. Snell, Ph.D. 2019 $233,398
 $—
$—
 $93,732
 $—
 $10,364
 $337,494
Vice President, Research and Chief Scientific Officer2018 $226,600
 $—
$—
 $228,803
 $—
 $12,375
 $467,778

(1)
The amounts listed in the “Stock Awards” and “Option Awards” columns do not represent the actual amounts paid in cash or value realized by the named executive officers. These amounts represent the aggregate grant date fair value of restricted stock units and stock option awards for each individual computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see Note 10 to our 2019 Consolidated Financial Statements, and Note 10 to our 2018 Consolidated Financial Statements included in our Annual Reports on Form 10-K for the years ended December 31, 2019 and 2018, respectively.
(2)Non-Equity Incentive Plan Compensation represents bonus amounts paid based on the Compensation Committee's review of corporate performance for fiscal 2019 and 2018 pursuant to the Company's executive cash incentive performance bonus program.
(3)Other Compensation for 2019 and 2018 includes the value of the Company's Common Stock contributed to the Company's 401(k) plan as a matching contribution.
Narrative Disclosure to Summary Compensation Table
Base Salaries
Base salary levels for the named executive officers were increased effective January 1, 2020, to $288,750 for Dr. Peoples and to $238,066 for Ms. Brum and Dr. Snell. The base salary level for Dr. Peoples during 2019 remained consistent with 2018 at $275,000. Base salary levels for Ms. Brum and Dr. Snell were increased effective January 1, 2019 to $233,398.
Pay for Performance
Executive bonuses have historically been awarded based on his, her oroverall corporate performance and to recognize and reward the teamwork of the named executive officers in advancing corporate goals, although the Compensation Committee retains the discretion to adjust individual bonus amounts in exceptional cases.


14



In light of the Company's financial condition, the Compensation Committee deferred the award and payment of any cash bonuses to its particular circumstancesexecutives for performance during 2018.
Long-Term Incentives

The Compensation Committee awarded long-term stock option incentives in 2019 to the executive officers and other employees. Each awarded option has an exercise price per share equal to the fair market value of Common Stock on the date of the grant, vests in sixteen equal quarterly installments at a rate of 6.25% per installment over four years, and has a term of ten years from an independent tax advisor.the date of grant. Named executive officers receiving these stock option awards were as follows:
2019
Named Executive OfficerNumber of
Options
Oliver P. Peoples, Ph.D. 6,000
Kristi D. Snell, Ph.D. 3,000
Lynne H. Brum1,500


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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following discussion describestable summarizes stock option and restricted stock awards held by our named executive officers at December 31, 2019:
Name Grant Date 
Number of
Securities
Underlying
Unexercised
Options(#)
Exercisable
 
Number of
Securities
Underlying
Unexercised
Options(#)
Unexercisable(1)
 Option
Exercise
Price($)		 
Option
Expiration
Date
 
Equity Incentive
Plan Awards:
Number of Units
That Have Not Vested
(#)
 
Equity Incentive
Plan Awards: Market Value of Units of
Stock That Have Not Vested ($)
Oliver P. Peoples, Ph.D.  5/27/2010 19
 —
 $34,776.00
 5/27/2020 —
 $—
  5/19/2011 18
 —
 $17,400.00
 5/19/2021 —
 $—
  2/1/2012 38
 —
 $6,384.00
 2/1/2022 —
 $—
  9/18/2012 52
 —
 $3,720.00
 9/18/2022 —
 $—
  5/30/2013 29
 —
 $4,056.00
 5/30/2023 —
 $—
  10/26/2016 4,125
 —
 $212.00
 10/26/2026 —
 $—
  5/23/2018 3,146
 5,229
 $66.00
 5/23/2028 —
 $—
  5/22/2019 750
 5,250
 $36.00
 5/22/2029 —
 $—
               
Lynne Brum 11/17/2011 15
 —
 $9,912.00
 11/17/2021 —
 $—
  5/31/2012 8
 —
 $4,800.00
 5/31/2022 —
 $—
  5/30/2013 17
 —
 $4,056.00
 5/30/2023 —
 $—
  10/26/2016 1,251
 —
 $212.00
 10/26/2026 —
 $—
  5/23/2018 940
 1,560
 $66.00
 5/23/2028 —
 $—
  5/22/2019 187
 1,313
 $36.00
 5/22/2029 —
 $—
               
Kristi Snell, Ph.D.  2/12/2010 4
 —
 $23,448.00
 2/12/2020 —
 $—
  2/11/2011 4
 —
 $21,888.00
 2/11/2021 —
 $—
  2/1/2012 9
 —
 $6,384.00
 2/1/2022 —
 $—
  5/31/2012 8
 —
 $4,800.00
 5/31/2022 —
 $—
  9/18/2012 25
 —
 $3,720.00
 9/18/2022 —
 $—
  2/13/2013 4
 —
 $4,032.00
 2/13/2023 —
 $—
  7/22/2013 11
 —
 $3,552.00
 7/22/2023 —
 $—
  2/24/2014 12
 —
 $3,096.00
 2/24/2024 —
 $—
  10/26/2016 2,500
 —
 $212.00
 10/26/2026 —
 $—
  5/23/2018 1,597
 2,653
 $66.00
 5/23/2028 —
 $—
  5/22/2019 374
 2,626
 $36.00
 5/22/2029 —
 $—

(1)All stock options that are not yet fully exercisable vest in equal quarterly installments over a period of four years from the grant date.


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Executive Employment Agreements
Oliver P. Peoples, Ph.D.    The Company has an employment agreement with Dr. Oliver P. Peoples, President and Chief Executive Officer. Effective as of January 1, 2020, Dr. Peoples’ salary has been set at $288,750; his agreement includes a minimum salary of $225,000 and provides that Dr. Peoples will be eligible to receive annual bonuses based on individual and Company performance. Pursuant to the anticipated material United States federal income tax consequencesterms of Dr. Peoples’ agreement, if the Company terminates Dr. Peoples’ employment without “cause” or if Dr. Peoples terminates his employment for “good reason” (each, as defined in the agreement), he will be entitled to “U.S. holders”“separation benefits” (as defined below) of our capital stock relatingin the agreement) including a lump-sum cash payment equal to the reversegreater of $480,000 or 24 months’ base salary and a pro rata portion of the target bonus for the year in which termination occurs, but not less than a pro rata portion of $180,000, plus payment of COBRA premiums for 24 months, provided that he signs a separation agreement that includes an irrevocable general release and non-disparagement and confidentiality provisions in favor of the Company. If the Company terminates Dr. Peoples’ employment without cause or if Dr. Peoples terminates his employment for good reason within the twenty-four month period immediately following, or the two month period immediately prior to, a “change of control” (as defined in the agreement), in addition to any accrued obligations, and subject to certain conditions, Dr. Peoples will be entitled to the separation benefits and automatic full vesting of his unvested stock split. This discussion is based uponoptions. To the extent Dr. Peoples would be subject to tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”“Internal Revenue Code”) as a result of company payments and benefits, the payments and benefits will be reduced if the reduction would maximize his total after-tax payments.
Lynne H. Brum.    The Company has an employment agreement with Lynne H. Brum, Vice President of Planning and Communications. Effective as of January 1, 2020, Ms. Brum's salary has been set at $238,066; her agreement includes a minimum salary of $220,000 and provides that Ms. Brum will be eligible to receive annual bonuses based on individual and Company performance. Pursuant to the terms of Ms. Brum's agreement, if the Company terminates Ms. Brum's employment without “cause” or if Ms. Brum terminates her employment for “good reason” (each, as defined in the agreement), Treasury Regulations promulgated thereunder, judicial authorities, published positionsshe will be entitled to “separation benefits” (as defined in the agreement) including a lump-sum cash payment equal to 12 months’ base salary and payment of COBRA premiums for 12 months, provided that she signs a separation agreement that includes an irrevocable general release and non-disparagement and confidentiality provisions in favor of the Company. If the Company terminates Ms. Brum’s employment without cause or if Ms. Brum terminates her employment for good reason within the twenty-four month period immediately following, or the two month period immediately prior to, a “change of control” (as defined in the agreement), in addition to any accrued obligations, and subject to certain conditions, Ms. Brum will be entitled to the separation benefits and automatic full vesting of her unvested stock options. To the extent Ms. Brum would be subject to tax under Section 4999 of the Internal Revenue Service (“IRS”Code as a result of company payments and benefits, the payments and benefits will be reduced if the reduction would maximize her total after-tax payments.
Charles B. Haaser.    The Company has an employment agreement with Charles B. Haaser, Vice President of Finance & Chief Accounting Officer. Effective as of January 1, 2020, Mr. Haaser's salary has been set at $221,835; his agreement includes a minimum salary of $205,000 and provides that Mr. Haaser will be eligible to receive annual bonuses based on individual and Company performance. Pursuant to the terms of Mr. Haaser's agreement, if the Company terminates Mr. Haaser’s employment without “cause” or if Mr. Haaser terminates his employment for “good reason” (each, as defined in the agreement), he will be entitled to “separation benefits” (as defined in the agreement) including a lump-sum cash payment equal to 12 months' base salary and payment of COBRA premiums for 12 months, provided that he signs a separation agreement that includes an irrevocable general release and non-disparagement and confidentiality provisions in favor of the Company. If the Company terminates Mr. Haaser’s employment without cause or if Mr. Haaser terminates his employment for good reason within the twenty-four month period immediately following, or the two month period immediately prior to, a “change of control” (as defined in the agreement), in addition to any accrued obligations, and subject to certain conditions, Mr. Haaser will be entitled to the separation benefits and automatic full vesting of his unvested stock options. To the extent Mr. Haaser would be subject to tax under Section 4999 of the Internal Revenue Code as a result of company payments and benefits, the payments and benefits will be reduced if the reduction would maximize his total after-tax payments.
Kristi D. Snell, Ph.D.    The Company has an employment agreement with Kristi D. Snell, Vice President of Research & Chief Science Officer. Effective as of January 1, 2020, Dr. Snell's salary has been set at $238,066; her


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agreement includes a minimum salary of $220,000 and provides that Dr. Snell will be eligible to receive annual bonuses based on individual and Company performance. Pursuant to the terms of Dr. Snell's agreement, if the Company terminates Dr. Snell's employment without "cause" or if Dr. Snell terminates her employment for "good reason" (each, as defined in the agreement), she will be entitled to "separation benefits" (as defined in the agreement) including a lump-sum cash payment equal to 12 months' base salary and payment of COBRA premiums for 12 months, provided that she signs a separation agreement that includes an irrevocable general release and non-disparagement and confidentiality provisions in favor of the Company. If the Company terminates Dr. Snell's employment without cause or if Dr. Snell terminates her employment for good reason within the twenty-four month period immediately following, or the two month period immediately prior to, a "change of control" (as defined in the agreement), in addition to any accrued obligations, and subject to certain conditions, Dr. Snell will be entitled to the separation benefits and automatic full vesting of her unvested stock options. To the extent Dr. Snell would be subject to tax under Section 4999 of the Internal Revenue Code as a result of company payments and benefits, the payments and benefits will be reduced if the reduction would maximize her total after-tax payments.
Executive Noncompetition, Nonsolicitation, Confidentiality, and Inventions Agreements
All employees named above have signed the Company's Employee Noncompetition, Nonsolicitation, Confidentiality, and Inventions agreement which prohibits them, during their employment by us and for a period of one year thereafter, from engaging in certain business activities which are directly or indirectly in competition with the products or services being developed, manufactured, marketed, distributed, planned, or sold by the Company during the term of their employment.
Hedging Policy
We do not have a hedging policy, but our code of conduct discourages short sales and trading in our stock on a short-term basis.
DIRECTOR COMPENSATION
The following table summarizes the compensation earned by our non-employee directors in 2019:
NameFees Earned
($)(1)		 Stock
Options
($)(2)(3)		 Total ($)
Peter N. Kellogg(4)
$37,500
 $7,811
 $45,311
Anthony J. Sinskey, Sc.D. $47,500
 $7,811
 $55,311
Robert L. Van Nostrand$72,500
 $7,811
 $80,311
Richard W. Hamilton, Ph.D. $52,500
 $7,811
 $60,311
Joseph Shaulson$30,000
 $7,811
 $37,811

(1)
Represents fees for the year 2019. All such fees were paid during 2019. Mr. Shaulson, Dr. Sinskey and Mr. Van Nostrand elected to receive options to purchase shares of the Company's Common Stock in lieu of cash for all or a portion of their aggregate fees in 2019, in the respective amounts of $30,000, $8,906 and $13,594, computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, See Note 10 to our 2019 Consolidated Financial Statements for the year ended December 31, 2019.
(2)
The amounts listed in the “Stock Options” column do not represent the actual amounts paid in cash or value realized by the directors. These amounts represent the aggregate grant date fair value of option awards for each individual computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see Note 10 to our 2019 Consolidated Financial Statements for the year ended December 31, 2019.
(3)In 2019, each of our non-employee directors was granted an option to purchase 250 shares of the Company's Common Stock. As of December 31, 2019, our non-employee directors listed in the table held the following aggregate number of shares subject to outstanding option awards (representing both exercisable and unexercisable option awards, none of which have been exercised):


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NameNumber of Shares
Underlying Outstanding
Stock Options
Peter N. Kellogg1,308
Anthony J. Sinskey, Sc.D. 1,556
Robert L. Van Nostrand2,062
Richard W. Hamilton, Ph.D. 1,036
Joseph Shaulson4,601

(4)Mr. Kellogg resigned from the Board on February 11, 2020.
Narrative to Director Compensation Table
Under the Company's policy for compensation of non-employee directors, each non-employee member of our Board of Directors is entitled to elect to receive either cash or options to purchase shares of the Company's Common Stock as compensation for their service to the Board and/or its committees, reflecting the following amounts for service in each specified role:
Board service: $30,000 per year
Board Chairman: $20,000 per year
Committee service: $7,500 per year
Audit Committee Chair: $15,000 per year
Compensation Committee Chair: $10,000 per year
Nominating and Corporate Governance Committee Chair: $10,000 per year
Science and Technology Committee Chair: $10,000 per year
In addition, renewing members of the Board are entitled to receive annual grants of options to purchase shares of the Company's Common Stock from time to time as compensation for their service to the Board and/or its committees, and new members of the Board are entitled to receive such grants upon joining the Board, in amounts determined by the Compensation Committee. In the year ended December 31, 2019, renewing members of the Board received option grants of 250 shares effective upon the annual meeting of stockholders.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table provides information about the Common Stock that may be issued upon the exercise of options, warrants and rights under all the Company's existing equity compensation plans as of December 31, 2019.
Plan category 
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 issuance under
equity compensation
plans (excluding securities
reflected in column (a))
  (a) (b) (c)
Equity compensation plans approved by stockholders(1) 61,586
 $155.51
 679
Equity compensation plans not approved by stockholders(2) 479
 $3,192.00
 —

(1)
Consists of the 2006 Stock Option and Incentive Plan, the 2014 Stock Option and Incentive Plan and the 2018 Stock Option and Incentive Plan. For a description of these plans, see Note 10 to the 2019 Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.


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(2)Consists of a stock option granted to Mr. Shaulson as an inducement for him to join the Company. These options originally vested over a four-year period, but the remaining unvested portion became fully vested upon execution of Mr. Shaulson's separation agreement in November 2016.
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
The charter of the Nominating and Corporate Governance Committee provides that the committee shall conduct an appropriate review of all related person transactions (including those required to be disclosed pursuant to Item 404 of Regulation S-K) for potential conflict of interest situations on an ongoing basis, and the approval of that committee shall be required for all such transactions.
Also, under the Company's Code of Business Conduct, any transaction or relationship that reasonably could be expected to give rise to a conflict of interest involving an employee must be reported promptly to the Company's Chief Accounting Officer, who has been designated as the Company's Compliance Officer. The Compliance Officer may notify the Board of Directors or a committee thereof as he deems appropriate. Actual or potential conflicts of interest involving a director, executive officer or the Compliance Officer must be disclosed directly to the Chairman of the Board of Directors.
There were no related person transactions entered into during the fiscal year ended December 31, 2019.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee for the last fiscal year consisted of Mr. Van Nostrand, Chairman, Mr. Kellogg and Dr. Hamilton. Effective February 11, 2020, the current members of the Audit Committee consisted of Mr. Van Nostrand, Dr. Sinskey and Dr. Hamilton. The Audit Committee has the responsibility and authority described in the Yield10 Audit Committee Charter, which has been approved by the Board of Directors. A copy of the Audit Committee Charter is available on our website at http://ir.yield10bio.com/corporate-governance. The Board of Directors has determined that the current members of the Audit Committee meet the independence requirements set forth in Rule 10A-3(b)(1) under the Exchange Act, and the applicable rules of Nasdaq, and that Mr. Van Nostrand and Dr. Hamilton each qualify as an “Audit Committee financial expert” under the rules of the SEC. The Audit Committee oversees the accounting and financial reporting processes of the Company and its subsidiaries and the audits of the financial statements of the Company. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls.
In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with both the management of the Company and RSM US LLP, the Company's independent registered public accounting firm, the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, including a discussion of the acceptability of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements.
The Audit Committee has reviewed with RSM US LLP their judgments as to the application of the Company’s accounting principles and such other matters as are required to be discussed with the Audit Committee by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T. In addition, the Audit Committee has received from RSM US LLP the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding RSM US LLP’s communications with the Audit Committee concerning independence, has discussed with RSM US LLP their independence from management and the Company, and has considered the compatibility with RSM US LLP's independence as auditors of any non-audit services performed for the Company by RSM US LLP.
The Audit Committee discussed with RSM US LLP the overall scope and plans for their audit. The Audit Committee met with RSM US LLP, with and without management present, to discuss the results of their examinations and their evaluations of the Company's financial reporting.


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In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the Company's audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2019 and filed with the SEC, and the Board of Directors approved such inclusion.
Respectfully submitted by the Audit Committee,

Robert L. Van Nostrand, Chairman
Anthony Sinskey, Ph.D.
Richard Hamilton, Ph.D.
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors selected the firm of RSM US LLP, an independent registered public accounting firm, to serve as independent auditors for the fiscal year ended December 31, 2019.
Fees
The following sets forth the aggregate fees billed by RSM US LLP, to the Company for the year ended December 31, 2019:
Audit Fees
Fees related to audit services were approximately $162,000 for the year ended December 31, 2019 and relate to the year-end audit of the Company's financial statements for that year.
Audit Related Fees
Audit Related Fees were approximately $94,500 for the year ended December 31, 2019 and relate to services associated with registration statements and securities offerings.
Tax Fees

Tax fees are estimated to be approximately $29,300 for the fiscal year ended December 31, 2019. Tax fees for the fiscal year ended December 31, 2018 were approximately $48,000.

All Other Fees
RSM US LLP billed no other fees for the year ended December 31, 2019.
Pre-Approval Policy of the Audit Committee

All the services performed by RSM US LLP for the fiscal year ended December 31, 2019 were pre-approved in accordance with the pre-approval policy set forth in the Audit Committee Charter. The Audit Committee pre-approves all audit services and permitted non-audit services performed or proposed to be undertaken by the independent registered public accounting firm (including the fees and terms thereof), except where such services are determined to be de minimis under the Exchange Act, giving particular attention to the relationship between the types of services provided and the independent registered public accounting firm's independence.


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PROPOSAL 2
APPROVAL OF AN AMENDMENT TO THE COMPANY’S 2018 STOCK OPTION AND INCENTIVE PLAN
General
Our Board of Directors is requesting that our stockholders approve an amendment to our 2018 Plan, which amendment was approved by the Board of Directors on February 11, 2020. As of March 18, 2020, we had 20,057 remaining shares of Common Stock available for issuance under the 2018 Plan. Accordingly, we are seeking an approval to increase the aggregate number of shares of Common Stock available for the grant of awards under the 2018 Plan by an additional 250,000 shares. An approval of an additional 250,000 shares will allow us to award up to 250,000 additional awards under the 2018 Plan, which we expect will provide us with enough shares to grant awards to our employees, executive officers and directors pursuant to our fiscal year 2020 compensation programs. Without approval of this amendment to increase the shares authorized under the 2018 Plan, we will not have enough authorized shares under the 2018 Plan to compensate our employees with equity, and we will need to substantially revise our compensation programs. In addition, the amendment to the 2018 Plan provides for an annual increase to the 2018 Plan on the first day of January 2021, 2022, 2023, 2024 and 2025 equal to the lesser of (a) 5% of the outstanding shares of Common Stock for the day prior to the increase in each respective year or (b) such smaller number of shares of Common Stock as determined by the Board (the “Evergreen Provision”),.
Our 2018 Plan was approved by our Board of Directors and stockholders in 2018. We anticipate the need to continue requesting additional shares for authorization under the 2018 Plan to fund our equity compensation programs. As of March 18, 2020, options to purchase 54,986 shares of Common Stock are outstanding under the 2018 Plan. As of March 18, 2020, options to purchase 495 shares of Common Stock are outstanding under our 2006 Stock Option and Incentive Plan (the “2006 Plan”). As of March 18, 2020, options to purchase 16,385 shares of Common Stock are outstanding under our 2014 Stock Option and Incentive Plan (the “2014 Plan”). No further shares are available for issuance under the 2006 Plan or the 2014 Plan. Shares may be transferred back into the 2018 Plan from previously issued options which are canceled or expire under the 2006 Plan and the 2014 Plan. By its terms, the 2018 Plan may be amended by the Board of Directors, provided that any amendment that the Board determines requires stockholder approval is subject to receiving such approval.
On February 11, 2020, the Board of Directors voted to approve an amendment to the 2018 Plan to increase the aggregate number of shares of Common Stock available for the grant of awards under the 2018 Plan by an additional 250,000 shares. This amendment to increase the number of shares available for grant under the 2018 Plan is being submitted for approval at the Annual Meeting in order to ensure that we have an adequate number of shares available for issuance in order to grant equity incentive compensation awards to our employees, executive officers and directors pursuant to our compensation programs. Approval by our stockholders of this amendment to the 2018 Plan is also required by the listing rules of Nasdaq.
Our Board, the Compensation Committee and management believe that the effective use of stock-based, long-term incentive compensation is vital to our ability to achieve strong performance in the future. The 2018 Plan maintains and enhances the key policies and practices adopted by our management and Board of Directors to align employee and stockholder interests. In addition, our future success depends, in large part, upon our ability to maintain a competitive position in attracting, retaining and motivating key personnel. We believe the authorization of an additional 250,000 shares for issuance under our 2018 Plan is essential to permit our management to continue to provide long-term, equity-based incentives to present and future key employees, consultants and directors. Accordingly, our Board of Directors believes approval of the amendment to our 2018 Plan is in our best interests and those of the stockholders and recommends a vote “FOR” the approval of the amendment to the 2018 Plan.
The 2018 Plan, as amended, includes the following provisions:

No Liberal Share Recycling-Shares that are withheld to satisfy any tax withholding obligation related to any stock award or for payment of the exercise price or purchase price of any stock award under the 2018 Plan will not again become available for issuance under the 2018 Plan;


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No Discounted Options or Stock Appreciation Rights:  Stock options and stock appreciation rights may not be granted with exercise prices lower than the fair market value of the underlying shares on the grant date except to replace equity awards due to a corporate transaction;
No Repricing without Stockholder Approval:  Other than in connection with corporate reorganizations or restructurings, at any time when the exercise price of a stock option is above the fair market value of a share, the Company will not, without stockholder approval, reduce the exercise price of such stock option and will not exchange such stock option for a new award with a lower (or no) purchase price or for cash;
No Transferability:  Equity awards generally may not be transferred, except by will or the laws of descent and distribution, unless approved by the Board of Directors and/or Compensation Committee; and
No Dividends:  The 2018 Plan prohibits, for all award types, the payment of dividends or dividend equivalents before the vesting of the underlying award but permits accrual of such dividends or dividend equivalents to be paid upon vesting.
Summary of Material Features of the 2018 Plan
Eligibility. The 2018 Plan allows us, under the direction of our Compensation Committee, to make grants of stock options, restricted and unrestricted stock awards and other applicable authorities, allstock-based awards to employees, consultants and directors who, in the opinion of the Board of Directors and/or Compensation Committee, are in a position to make a significant contribution to our long-term success. All employees, directors and consultants of the Company and its affiliates are eligible to participate in the 2018 Plan. As of March 18, 2020,there were approximately 35 individuals eligible to participate in the 2018 Plan.
Shares Available for Issuance.  The 2018 Plan provides for the issuance of up to 20,057 shares of our Common Stock remaining as currentlyof March 18, 2020, plus the shares to be added pursuant to the Evergreen Provision and a number of additional shares (which shall be no more than 16,880 in effect and alltotal) available to be issued to the extent that awards outstanding under the 2014 Plan or 2006 Plan are canceled or expire on or after the date of the Annual Meeting. If this Proposal 2 is approved by our stockholders, the 2018 Plan will provide for the issuance of up to 250,000 additional shares. Generally, shares of Common Stock reserved for awards under the 2018 Plan that lapse or are canceled (other than by exercise) will be added back to the share reserve available for future awards. However, shares of Common Stock tendered in payment for an award or shares of Common Stock withheld for taxes are not available again for future awards. In addition, Shares repurchased by the Company with the proceeds of the option exercise price may not be reissued under the 2018 Plan.
Stock Options. Stock options granted under the 2018 Plan may either be incentive stock options, which are subjectintended to change or differing interpretations (possibly with retroactive effect). We have not obtained a ruling fromsatisfy the IRS or an opinionrequirements of legal or tax counsel with respect to the tax consequencesSection 422 of the reverseInternal Revenue Code, or non-qualified stock split and there can be no assurance the IRS will not challenge the statements set forth below, or that a court would not sustain any such challenge. The following discussion is for information purposes only and isoptions, which are not intended as tax or legal advice.
For purposesto meet those requirements. Incentive stock options may be granted to U.S. employees of this discussion,the Company and its affiliates. Non-qualified options may be granted to U.S. and Canadian employees, directors and consultants of the Company and its affiliates and the term “U.S. holder” meansof the option may not be longer than ten years. The exercise price of a beneficial ownerstock option may not be less than 100% of the fair market value of our Common Stock on the date of grant. If an incentive stock option is granted to an individual who owns more than 10% of the combined voting power of all classes of our capital stock, that is for United States federal income tax purposes:
(i) an individual citizen or residentthe exercise price may not be less than 110% of the United States;
(ii) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) organized underfair market value of our Common Stock on the lawsdate of grant and the term of the United States,option may not be longer than five years.
Award agreements for stock options include rules for exercise of the stock options after termination of service. Options may not be exercised unless they are vested, and no option may be exercised after the end of the term set forth in the award agreement. Generally, stock options will be exercisable for three months after termination of service for any statereason other than death or the District of Columbia;
(iii) an estate with income subject to United States federal income tax regardless of its source; or
(iv) a trust that (a) is subject to primary supervision by a United States courttotal and permanent disability, and for which United States persons control all substantial decisions12 months after termination of service on account of death or (b) has a valid election in effect under applicable Treasury Regulationstotal and permanent disability but will not be exercisable if the termination of service was due to cause.
 Performance-Based Awards. Performance-based awards are stock-based awards that vest upon the grantee’s attainment of certain performance goals. If the vesting is achieved, the grantee shall be treated as a United States person.entitled to receive

13

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This discussion assumessuch number of shares specified in his or her award agreement. Dividend equivalents may accrue but shall not be paid prior to and shall be paid only to the extent that a U.S. holder holds our capital stock as a capital asset within the meaninggrantee receives the shares upon vesting.
Other Stock-Based Awards. The 2018 Plan also authorizes the grant of Code Section 1221. This discussion does not address allother types of the tax consequences that may be relevant to a particular stockholder or to stockholders that are subject to special treatment under United States federal income tax lawsstock-based compensation including, but not limited to, financial institutions, tax-exempt organizations, insurance companies, regulated investment companies, persons that are broker-dealers, traders in securities who electstock appreciation rights, phantom stock awards, and stock unit awards. Our Board of Directors or an authorized committee may award such stock-based awards subject to such conditions and restrictions as it may determine. These conditions and restrictions may include continued employment with the mark-to-market methodCompany through a specified restricted period or achievement of accounting for their securities,one or stockholders holding their shares of our capital stock as part of a “straddle,” “hedge,” “conversion transaction” or other integrated transaction.more performance goals.
Plan Administration. In addition, this discussion does not address other United States federal taxes (such as gift or estate taxes or alternative minimum taxes),accordance with the tax consequencesterms of the reverse stock split under state, local or foreign tax laws or certain tax reporting requirements that may be applicable with respect to2018 Plan, our Board of Directors administers the reverse stock split. 
If a partnership (or other entity treated as a partnership for United States federal income tax purposes) is a stockholder, the tax treatment of a partner in the partnership or any equity owner of such other entity will generally depend upon the status of the person and the activities of the partnership or other entity treated as a partnership for United States federal income tax purposes.
Tax Consequences of the Reverse Stock Split Generally
We believe that the reverse stock split should qualify as a “recapitalization” under Section 368(a)(1)(E) of the Code. Accordingly:
A U.S. holder will not recognize any gain or loss as a result of the reverse stock split,plan, except to the extent that cashthe Board delegates such authority to our Compensation Committee. In accordance with the provisions of the 2018 Plan, our Board of Directors and/or Compensation Committee determines the terms of awards, including:
which employees, directors and consultants will be granted awards;
the number of shares subject to each award;
any adjustments in the performance goals included in performance-based awards; and
other terms and conditions upon which each award may be granted in accordance with the 2018 Plan.
In addition, our Board of Directors may, in its discretion, amend any term or condition of an outstanding award provided (i) such term or condition as amended is received in lieupermitted by our 2018 Plan, and (ii) any such amendment shall be made only with the consent of the participant to whom such award was made, if the amendment is adverse to the participant unless such amendment is required by applicable law or necessary to preserve the economic value of such award; and provided, further, that, without the prior approval of our stockholders, options and stock appreciation rights are not repriced, replaced or regranted through cancellation or by lowering the exercise price of a fractional share.previously granted award.
A U.S. holder’s aggregate tax basisStock Dividends and Stock Splits. If our Common Stock shall be subdivided or combined into a greater or smaller number of shares or if we issue any shares of Common Stock as a stock dividend, the number of shares of our Common Stock deliverable upon exercise of an option issued or upon issuance of an award shall be appropriately increased or decreased proportionately, and appropriate adjustments shall be made in his, herthe purchase price per share and performance goals applicable to performance based awards, if any, to reflect such subdivision, combination or its post-reverse stock split shares will be equaldividend.
Other Dividends.    Dividends (other than stock dividends as described above) may accrue but are not payable prior to the aggregate tax basis in the pre-reverse stock split shares exchanged therefor, excepttime, and only to the extent that, restrictions or rights to reacquire shares subject to awards have lapsed.
Corporate Transactions. Upon a merger or other reorganization event, our Board of Directors, may, in its sole discretion, take any one or more of the following actions pursuant to our 2018 Plan, as to some or all outstanding awards:
provide that all outstanding options shall be assumed or substituted by the successor corporation, or, in the event that such merger also constitutes a Change of Control (as defined in the 2018 Plan) that does not allow for the continuation of such options, provide that all outstanding awards shall become fully exercisable, vested and/or non-forfeitable as of the effective time of the merger;
upon written notice to a participant, provide that the participant’s unexercised options will terminate immediately prior to the consummation of such transaction unless exercised by the participant;
in the event of a merger pursuant to which holders of our Common Stock will receive a cash is receivedpayment for each share surrendered in the merger, make or provide for a cash payment to the participants equal to the difference between the merger price times the number of shares of our Common Stock subject to such outstanding options, and the aggregate exercise price of all such outstanding options, in exchange for the termination of such options; and
with respect to stock grants and in lieu of any of the foregoing, our Board of Directors or an authorized committee may provide that, upon consummation of the transaction, each outstanding stock grant shall be terminated in exchange for payment of an amount equal to the consideration payable upon


24



consummation of such transaction to a fractional share.holder of the number of shares of Common Stock comprising such award (to the extent such stock grant is no longer subject to any forfeiture or repurchase rights then in effect or, at the discretion of our Board of Directors or an authorized committee, all forfeiture and repurchase rights being waived upon such transaction).
A U.S. holder’s holding periodAmendment and Termination. The 2018 Plan may be amended by our stockholders. It may also be amended by our Board of Directors and/or Compensation Committee, provided that any amendment approved by our Board of Directors and/or Compensation Committee which is of a scope that requires stockholder approval as required by (i) the rules of the Nasdaq, (ii) in order to ensure favorable federal income tax treatment for the post-reverseany incentive stock split shares will include the period during whichoptions under Internal Revenue Code Section 422, or (iii) for any other reason, is subject to obtaining such stockholder heldapproval. In addition, other than in connection with stock dividends, stock splits, recapitalizations or reorganizations, the pre-reverseBoard of Directors and/or Compensation Committee may not without stockholder approval reduce the exercise price of or cancel any outstanding option in exchange for a replacement option having a lower exercise price or for any other equity award or for cash. Further, the Board of Directors and/or Compensation Committee may not take any other action that is considered a direct or indirect “repricing” for purposes of Nasdaq’s stockholder approval rules, including any other action that is treated as a repricing under generally accepted accounting principles. No such action taken by the Board of Directors and/or Compensation Committee may adversely affect any rights under any outstanding award without the holder’s consent unless such amendment is required by applicable law or necessary to preserve the economic value of such award.
Duration of Plan. The 2018 Plan will expire by its terms on April 4, 2028. No awards may be made after termination of the 2018 Plan, although previously granted awards may continue beyond the termination date in accordance with the terms.
Federal Income Tax Considerations
The material federal income tax consequences of the issuance and exercise of stock split shares surrenderedoptions and other awards under the 2018 Plan, based on the current provisions of the Internal Revenue Code and regulations, are as follows. Changes to these laws could alter the tax consequences described below. This summary assumes that all awards granted under the 2018 Plan are exempt from or comply with, the rules under Section 409A of the Internal Revenue Code related to nonqualified deferred compensation.
Incentive Stock Options:Incentive stock options under the 2018 Plan are intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code. An incentive stock option does not result in taxable income to the optionee or deduction to us at the time it is granted or exercised, provided that no disposition is made by the optionee of the shares acquired pursuant to the option within two years after the date of grant of the option nor within one year after the date of issuance of shares to the optionee (referred to as the “ISO holding period”). However, the difference between the fair market value of the shares on the date of exercise and the option price will be an item of tax preference includible in “alternative minimum taxable income” of the optionee. Upon disposition of the shares after the expiration of the ISO holding period, the optionee will generally recognize long-term capital gain or loss based on the difference between the disposition proceeds and the option price paid for the shares. If the shares are disposed of prior to the expiration of the ISO holding period, the optionee generally will recognize taxable compensation, and we will have a corresponding deduction, in the year of the disposition, equal to the excess of the fair market value of the shares on the date of exercise of the option over the option price. Any additional gain realized on the disposition will normally constitute capital gain. If the amount realized upon such a disqualifying disposition is less than fair market value of the shares on the date of exercise, the amount of


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compensation income will be limited to the excess of the amount realized over the optionee’s adjusted basis in the reverse stock split.shares.
Non-Qualified Options:Options not intended to qualify as incentive stock options under the 2018 Plan are designated as non-qualified options. A non-qualified option ordinarily will not result in income to the optionee or deduction to us at the time of grant. The optionee will recognize compensation income at the time of exercise of such non-qualified option in an amount equal to the excess of the then value of the shares over the option price per share. Such compensation income of optionees may be subject to withholding taxes, and a deduction may then be allowable to us in an amount equal to the optionee’s compensation income. An optionee’s initial basis in shares so acquired will be the amount paid on exercise of the non-qualified option plus the amount of any corresponding compensation income. Any gain or loss as a result of a subsequent disposition of the shares so acquired will be capital gain or loss.
Stock Grants:With respect to stock grants under the 2018 Plan that result in the issuance of shares that are either not restricted as to transferability or not subject to a substantial risk of forfeiture, the grantee must generally recognize ordinary income equal to the fair market value of shares received. Thus, deferral of the time of issuance will generally result in the deferral of the time the grantee will be liable for income taxes with respect to such issuance. We generally will be entitled to a deduction in an amount equal to the ordinary income recognized by the grantee. With respect to stock grants involving the issuance of shares that are restricted as to transferability and subject to a substantial risk of forfeiture, the grantee must generally recognize ordinary income equal to the fair market value of the shares received at the first time the shares become transferable or are not subject to a substantial risk of forfeiture, whichever occurs earlier. A grantee may elect to be taxed at the time of receipt of shares rather than upon lapse of restrictions on transferability or substantial risk of forfeiture, but if the grantee subsequently forfeits such shares, the grantee would not be entitled to any tax deduction, including as a capital loss, for the value of the shares on which he previously paid tax. The grantee must file such election with the Internal Revenue Service within 30 days of the receipt of the shares. We generally will be entitled to a deduction in an amount equal to the ordinary income recognized by the grantee.
Stock Units:
The grantee recognizes no income until the issuance of the shares. At that time, the grantee must generally recognize ordinary income equal to the fair market value of the shares received. We generally will be entitled to a deduction in an amount equal to the ordinary income recognized by the grantee.
New Plan Benefits
Treasury Regulations promulgated under the Code provide detailed rules for allocating the tax basis and holding periodNone of the shares of our common stock surrenderedCommon Stock subject to the shares2018 Plan are issuable in connection with any award granted prior to stockholder approval of our common stock received pursuantthe 2018 Plan. Future options and other awards under the 2018 Plan are subject to the reverse stock split. Holders of shares of our common stock who acquired their shares on different dates and at different prices should consult their tax advisors regarding the allocationdiscretion of the tax basis and holding period of such shares among their post-reverse stock split shares.
THE PRECEDING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT AND DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OR DISCUSSION OF ALL POTENTIAL TAX EFFECTS RELEVANT THERETO. YOU SHOULD CONSULT YOUR OWN TAX ADVISORS AS TO THE PARTICULAR FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT IN LIGHT OF YOUR SPECIFIC CIRCUMSTANCES.
InterestsBoard of Directors and/or Compensation Committee, and Executive Officers
Our directors and executive officers have no substantial interests, directlytherefore, it is not possible to identify the persons who will receive options or indirectly,other awards under the 2018 Plan in the matters set forth in this proposal except tofuture, nor the extentamount of their ownership of shares of our common stock.any such future options or other awards.

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Reservation of Right to Abandon Reverse Stock SplitExisting Plan Benefits
We reserveSince the right to not file the Certificate of Amendment and to abandon any reverse stock split without further action by our stockholders at any time before the effectivenessadoption of the filing with2018 Plan through March 18, 2020, we have granted the Secretary offollowing stock options under the State of Delaware of2018 Plan to the Certificate of Amendment, even ifindividuals and groups listed below. In all cases, the authority to effect these amendments is approved by our stockholders at the Special Meeting. By voting in favor of a reversesecurities underlying such stock split, you are expressly also authorizing the Board of Directors to delay, not proceed with, and abandon, this proposed amendment if it should so decide, in its sole discretion, that such action is in the best interestsoptions were shares of our stockholders.Common Stock.
Vote Required and Board
Name and PositionNumber of shares subject to Stock Options
Named Executive Officers
Oliver P. Peoples, Ph.D.
President and Chief Executive Officer
14,375
Lynne H. Brum
Vice President, Planning and Communications		4,000
Kristi D. Snell
Vice President, Research and Chief Scientific Officer		7,250
Charles B. Haaser
Vice President, Finance, Chief Accounting Officer and Treasurer		4,001
Directors and Director Nominee
Oliver P. Peoples, Ph.D.
Director and Nominee		—
Sherri M. Brown, Ph.D.
Director		10,250
Joseph Shaulson
Director		2,879
Richard Hamilton, Ph.D.
Director		500
Anthony J. Sinskey, Ph.D.
Director		1,025
Robert L. Van Nostrand
Director		1,301
As of Directors’ RecommendationMarch 18, 2020, the closing price per share of our Common Stock was $3.94 as reported on Nasdaq.
The affirmative vote of the holders of a majority of the shares of our common stock, having voting power outstanding onCommon Stock cast by the Record Date,stockholders present in person or represented by proxy at the Annual Meeting is required to approve the amendment of the 2018 Plan.
Recommendation of the Board
The Board of Directors unanimously recommends that you vote “FOR” the amendment to our Certificate of Incorporation to effect a reverse stock split of our common stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO AUTHORIZE THE BOARD OF DIRECTORS IN ITS DISCRETION TO AMEND THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED, TO EFFECT A REVERSE STOCK SPLIT OF THE ISSUED AND OUTSTANDING SHARES OF OUR COMMON STOCK (SUCH SPLIT TO COMBINE A NUMBER OF OUTSTANDING SHARES OF OUR COMMON STOCK BETWEEN TWENTY (20) AND FIFTY (50), SUCH NUMBER CONSISTING OF ONLY WHOLE SHARES, INTO ONE (1) SHARE OF OUR COMMON STOCK), AND PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED IN FAVOR OF THE AMENDMENT UNLESS A STOCKHOLDER INDICATES OTHERWISE ON THE PROXY.

the 2018 Plan.

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PROPOSAL 23

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PRIVATE PLACEMENT PROPOSALPUBLIC ACCOUNTING FIRM

(Notice Item 2)

Overview
On November 19, 2019, concurrently withOur Audit Committee is responsible for the appointment, compensation, retention and oversight of the work of our independent registered public offering described in Proposal 1 (the “Public Offering”), we issued and sold an aggregate of 5,750 shares of Series B convertible preferred stock (the “Series B Preferred Stock”), warrants to purchase 28,750,000 shares of common stock, which expire two and one half years after the date of issuance, and warrants to purchase 28,750,000 shares of common stock, which expire seven and one half years after the date of issuance (together, the “Private Placement Warrants”) for aggregate gross proceeds of $5,750,000 to our largest shareholder, Jack W. Schuler, and related entities, each of which is an accredited investor (the “Investors”) in a private placement (the “Private Placement”) pursuant to a securities purchase agreement (the “Securities Purchase Agreement”). The Private Placement Warrants have an exercise price equal to $0.20 per share of common stock. Our Board determined that the Private Placement was advisable and in our best interest and in the best interest of our stockholders, in order for us to have available capital for general corporate purposes.
If this Proposal 2 is approved, on the date of the filing by us, and the acceptance by the State of Delaware, of the amendment to our Amended and Restated Certificate of Incorporation (the “Charter Amendment”) contemplated by Proposal 1 relating to the reverse stock split, such that there are sufficient authorized but unissued shares of common stock to allow all of the warrants issued in the Private Placement and the Public Offering to be exercised in full and all of the Series B Preferred Stock to be converted, each share of Series B Preferred Stock shall automatically convert into a number of shares of common stock equal to $1,000 (the “Stated Value”) divided by a conversion price of $0.20 (the “Conversion Price”). The Conversion Price will be adjusted in the reverse stock split according to the reverse stock split ratio.
Nasdaq Marketplace Rule 5635(d) requiresaccounting firm. Although stockholder approval of a transaction other than athe selection of an independent registered public offering involving the sale, issuance or potential issuance by a company of common stock (or securities convertible into or exercisable for common stock) at a price less than the lower of (i) the closing price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement for the transaction; or (ii) the average closing price of the common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement for the transaction, which alone or together with sales by officers, directors or principal shareholders of the issuer equals 20% or more of the common stock of the company or 20% or more of the voting power outstanding before the transaction.
The Nasdaq rules prevent us from issuing, upon conversion of the Series B Preferred Stock and upon exercise of the Private Placement Warrants, a number of shares of common stock that would exceed 2,500,948 (19.9% of the number of shares of common stock outstanding on the trading day immediately preceding the date of the Purchase Agreement), unless we obtain the stockholder approvalaccounting firm is not required by Nasdaq. If all of the Series B Preferred Stock are converted and all of the Private Placement Warrants are exercised, an aggregate of 86,250,000 shares of common stock, subject to adjustment for the reverse stock split, would be issued upon such conversion and exercise.
Because the number of shares of common stock issuable upon conversion of the Series B Preferred Stock and upon exercise of the Private Placement Warrants will exceed 2,500,948, we are seeking stockholder approval for the issuance of shares of common stock in excess of 19.9% of the number of shares of common stock outstanding immediately prior to the execution of the Purchase Agreement (the “Excess Shares”).
Description of the Series B Preferred Stock
A summary of the Certificate of Designation of the Series B Preferred Stock (the “Series B Certificate of Designation”) and the preferences, rights and limitations of the Series B Preferred Stock is as follows:
Dividends. If the Series B Preferred Stock is not converted to common stock prior to March 31, 2020, shares of the Series B Preferred Stock will be entitled to receive cumulative quarterly dividends payable in additional shares

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of Series B Preferred Stock, at the initial quarterly rate of 2% of the Stated Value, subject to a quarterly increase of 2%, and additional dividends as declared bylaw, our Board of Directors.
Voting Rights. With certain exceptions, as described inDirectors believes that it is advisable to give stockholders an opportunity to ratify this selection. Our Audit Committee has appointed RSM US LLP to perform the Series B Certificate of Designation, the Series B Preferred Stock has no voting rights. However, as long as any shares of Series B Preferred Stock remain outstanding, the Series B Certificate of Designation provides that we shall not, without the affirmative vote of holders of a majority of the then-outstanding Series B Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series B Preferred Stock or alter or amend the Series B Certificate of Designation, (b) increase the number of authorized shares of Series B Preferred Stock or (c) effect a stock split or reverse stock split of the Series B Preferred Stock or any like event. The holders of the Series B Preferred Stock will also have the right to approve specified corporate transactions, including the issuance of any securities that would be senior to the Series B Preferred Stock, material changes in our business, material acquisitions of assets, appointments of new executive officers, liquidations, repurchase of shares,independent audit, review and other matters as set forth in the Series B Certificate of Designation.
Rank. Each share of Series B Preferred Stock shall rank equally in all respects. With respect to distributions upon Liquidation (as defined below), the Series B Preferred Stock ranks senior to the common stock and to each other class of our capital stock existing now or hereafter created that are not specifically designated as ranking senior to the preferred stock.
Liquidation Preference. In the event of any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, or in the event of the Company’s insolvency (a “Liquidation”), the holders of any outstanding shares of Series B Preferred Stock shall be entitled to have set apart for them, or to be paid, out of the assets of the Company available for distribution to stockholders (whether such assets are capital, surplus or earnings), after provision for payment of all debts and liabilities of the Company in accordance with the Delaware General Corporation Law, before any distribution or payment is madeattestation services with respect to any class or series of securities that would be classified as junior toour financial statements for the Series B Preferred Stock and subject to the liquidation rights and preferences of any class or series of securities that would be classified as senior to or on par with the Series B Preferred Stock, an amount equal to the greater of (i) the Stated Value of Series B Preferred Stock (which amount shall be subject to an equitable adjustment in the event of any stock dividend, stock split, combination, reorganization, recapitalization, reclassification, or other similar event involving a change in the capital structure of the Series B Preferred Stock) plus the amount of all accrued and unpaid regular dividends thereon, whether or not declared, up to and including the date full payment shall be tendered to the holders of the Series B Preferred Stock with respect to such Liquidation (the “Liquidation Value”) and (ii) such amount as would have been payable on the number of shares of common stock into which the shares of Series B Preferred Stock held by each holder thereof could have been converted immediately prior to such Liquidation (the “Pre-Liquidation Value”). In the event of any consolidation or merger of the Company with or into another entity or the sale of all or substantially all of the Company’s assets, the holders of Series B Preferred Stock shall be entitled to have set apart for them, or to be paid, subject to the order of preference set forth above in connection with a Liquidation, an amount equal to the greater of (i) 200% of the Liquidation Value and (ii) the Pre-Liquidation Value.fiscal year ending December 31, 2020.
Conversion. If this proposal is not approved onat the Authorized Share Increase Date, each shareAnnual Meeting, our Audit Committee will reconsider the selection of Series B Preferred Stock shall automatically convert intoRSM US LLP for the ensuing fiscal year but may determine that numbercontinued retention of sharesRSM US LLP is in our Company’s and our stockholders’ best interests. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of common stock determined by dividing the Stated Value of such share of Series B Preferred Stock by the Conversion Price. The Conversion Price will be adjusted in the reverse stock split according to the reverse stock split ratio.
Forced Conversion. Subject to certain conditions,a different independent registered public accounting firm at any time followingduring the issuanceyear if it determines that such a change would be in our Company's and our stockholders’ best interests.
We expect representatives of RSM US LLP to be present at the Series B Preferred Stock, weAnnual Meeting. They will have the rightopportunity to cause each holder of the Series B Preferred Stockmake a statement if they desire to convert all or part of such holder’s Series B Preferred Stock in the event that (i) the volume weighted average price of our common stock for 30 consecutive trading days (the “Measurement Period”) exceeds 300% of the Conversion Price (subjectdo so and will also be available to adjustment for forward and reverse stock splits, recapitalizations, stock dividends and similar transactions), (ii) the daily trading volume on each Trading Day during such Measurement Period exceeds $175,000 per trading day and (iii) the holder is not in possession of any information that constitutes or might constitute, material non-public information which was provided by us. Our rightrespond to cause each holder of the Series B Preferred Stock to convert all or part of such holder’s Series B Preferred Stock shall be exercised ratably among the holders of the then outstanding preferred stock.

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Voting Agreement
We have entered into a voting agreement with our largest shareholder, Jack W. Schuler, and entities related to him, pursuant to which Mr. Schuler and those entities have agreed to vote their shares of common stock which they held prior to the issuance of shares in the Private Placement in favor of the Charter Amendment.
Registration Rightsappropriate questions from stockholders.
The holders of the Series B Preferred Stock have the ability to demand that we register the shares of common stock underlying the Series B Preferred Stock and Private Placement Warrants no later than 15 business days after the Authorized Share Increase Date.
Why We Need Stockholder Approval
Our common stock is listed on Nasdaq, and as such we are subject to Nasdaq’s rules. Nasdaq Marketplace Rule 5635(d) requires stockholder approval of a transaction other than a public offering involving the sale, issuance or potential issuance by a company of common stock (or securities convertible into or exercisable for common stock) at a price less than the lower of (i) the closing price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement for the transaction; or (ii) the average closing price of the common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement for the transaction, which alone or together with sales by officers, directors or principal shareholders of the issuer equals 20% or more of the common stock of the company or 20% or more of the voting power outstanding before the transaction.
Impact on Current Stockholders if the Private Placement Proposal is Approved
If our stockholders approve this Proposal 2 and the Charter Amendment, the Series B Preferred Stock will automatically convert to common stock and we will be able to issue the Excess Shares in accordance with the Nasdaq rules, the Series B Certificate of Designation, and the Private Placement Warrants. This will result in an increase in the number of shares of common stock outstanding. The issuance of common stock upon conversion of the Series B Preferred Stock and upon exercise of the Private Placement Warrants, if they are exercised, will have a dilutive effect on our stockholders other than the Investors in that the percentage ownership of the Company held by such current stockholders would decline as a result of the issuance of the Excess Shares. This means that our stockholders other than the Investors would have less ability to influence significant corporate decisions requiring stockholder approval, and that the influence of the Investors over determinations submitted to our stockholders for approval, including, but not limited to, the election of directors and the approval of corporate transactions, will increase in comparison to our other stockholders.
Issuance of the Excess Shares could also have a dilutive effect on book value per share and any future earnings per share. Dilution of equity interests could also cause prevailing market prices for our common stock to decline.
Effect on Current Stockholders if the Private Placement Proposal is Not Approved
If stockholders do not approve this proposal, we will not be able to issue the Excess Shares upon conversion of the Series B Preferred Stock and upon exercise of the Private Placement Warrants and the Investors will be prohibited from converting their Series B Preferred Stock or exercising their Private Placement Warrants in excess of an aggregate of 2,500,948 shares of common stock. If we are unable to fulfill our obligations to the Investors under the Securities Purchase Agreement, the Series B Certificate of Designation or the Private Placement Warrants, it is likely that the Investors and other potential investors would be unwilling to participate in any non-public capital raising efforts in the future, which would have an unfavorable impact on our capital raising efforts. Further, if the Series B Preferred Stock is not converted to common stock prior to March 31, 2020, shares of the Series B Preferred Stock will be entitled to receive cumulative quarterly dividends payable in additional shares of Series B Preferred Stock, at the initial quarterly rate of 2% of the Stated Value, subject to a quarterly increase of 2%, and additional dividends as declared by our Board of Directors.

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Further Information
The terms of the Securities Purchase Agreement, the Series B Certificate of Designation and the Private Placement Warrants are briefly summarized above. For further information, please refer to the Securities Purchase Agreement, Series B Certificate of Designation and Form of Warrant included as Exhibits 10.1, 3.2 and 4.1, respectively, to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 20, 2019.
Vote Required and Board of Directors’ Recommendation
Pursuant to Nasdaq Marketplace Rule 5635(e), the Private Placement Proposal must be approved by a majority of the votes cast affirmatively or negatively on such proposal. Therefore, the affirmative vote of the holders of a majority of the shares of our common stock representedcast by the stockholders present in person or represented by proxy and entitled to vote on such proposal that cast a vote for, or against such proposalat the Annual Meeting is required to ratify the selection of RSM US LLP as our independent registered public accounting firm for the approvalyear ending December 31, 2020.
Recommendation of the Private Placement Proposal.Board
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PRIVATE PLACEMENT PROPOSAL, AND PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED IN FAVOR OF THE PROPOSAL UNLESS A STOCKHOLDER INDICATES OTHERWISE ON THE PROXY.

The Board of Directors unanimously recommends that you vote “FOR” ratification of the appointment of RSM US LLP as our independent registered public accounting firm for the year ending December 31, 2020.


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OTHER MATTERS
The Board of Directors knows of no other matters to be brought before the Annual Meeting. If any other matters are properly brought before the Annual Meeting, the persons appointed in the accompanying proxy intend to vote the shares represented thereby in accordance with their best judgment on such matters, under applicable laws.
STOCKHOLDER PROPOSALS
FOR THE 2021 ANNUAL MEETING
Any stockholder proposals submitted pursuant to Exchange Act Rule 14a-8 for inclusion in the Company’sCompany's proxy statement and form of proxy for its 20202021 annual meeting must be received by Yield10 on or before December 12, 2019November 30, 2020 in order to be considered for inclusion in its proxy statement and form of proxy. Such proposals must also comply with the requirements as to form and substance established by the SEC if such proposals are to be included in the proxy statement and form of proxy. Any such proposal should be mailed to our principal executive offices: Yield10 Bioscience, Inc., 19 Presidential Way, Woburn, MA 01801, Attention: Secretary.
Stockholder proposals to be presented at the Company’s 20202021 annual meeting, other than stockholder proposals submitted pursuant to Exchange Act Rule 14a-8 for inclusion in the Company’sCompany's proxy statement and form of proxy for its 20202021 annual meeting, must be received in writing at our principal executive office not earlier than January 23, 2020,2021, nor later than February 22, 2020,2021, unless our 20202021 annual meeting of stockholders is scheduled to take place before April 22, 20202021 or after July 21, 2020.2021. Our By-Laws state that the stockholder must provide timely written notice of such nomination or proposal as well as be present at such meeting, either in person or by a representative. A stockholders’stockholder’s notice shall be timely received by Yield10 at its principal executive office not less than ninety (90) days nor more than one hundred twenty (120) days prior to the anniversary date of the immediately preceding annual meeting (the “Anniversary Date”); provided, however, that in the event the annual meeting is scheduled to be held on a date more than thirty (30) days before the Anniversary Date or more than sixty (60) days after the Anniversary Date, a stockholder’sstockholder's notice shall be timely if received by Yield10 at its principal executive office not later than the close of business on the later of (a) the ninetieth (90th) day prior to the scheduled date of such annual meeting or (b) the tenth (10th) day following the day on which public announcement of the date of such annual meeting is first made by Yield10. Any such proposal should be mailed to: Yield10 Bioscience, Inc., 19 Presidential Way, Woburn, MA 01801, Attention: Secretary.
Woburn, Massachusetts
December 4, 2019EXPENSES AND SOLICITATION
The cost of solicitation of proxies will be borne by the Company and, in addition to soliciting stockholders by mail through its regular employees, the Company may request banks, brokers and other custodians, nominees and fiduciaries to solicit their customers who have stock of the Company registered in the names of a nominee and, if so, will reimburse such banks, brokers and other custodians, nominees and fiduciaries for their reasonable out-of-pocket costs. Solicitation by officers and employees of the Company may also be made of some stockholders in person or by mail, telephone or e-mail following the original solicitation. If Yield10 does retain a proxy solicitation firm, Yield10 would pay such firm's customary fees and expenses, which fees would be expected not to exceed $10,000 plus expenses.

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APPENDIX A
FORM OF PROXY CARD


Proxy Card:
SPECIAL MEETING OF STOCKHOLDERS OF
YIELD10 BIOSCIENCE, INC.
January 9, 2020
Important Notice Regarding Internet Availability of Proxy Materials for the Special Meeting: The proxy statement is available at http://ir.yield10bio.com/investor-relations.
Please sign, date and mail your proxy card in the envelope provided
as soon as possible.
Please detach along perforated line and mail in the envelope provided.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1AMENDED AND PROPOSAL 2. PLEASE SIGN, DATERESTATED 2018 STOCK OPTION AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE ☒INCENTIVE PLAN
1.Proposal to amend the Company’s Amended and Restated Certificate of Incorporation, as amended, to effect a reverse stock split of our issued and outstanding shares of common stock, at a ratio of between 1-for-20 and 1-for-50.
This Proxy, when executed, will be voted in the manner directed herein. If you do not specify below how you want your shares to be voted, this Proxy will be voted FOR the Proposal.
VOTE BY MAIL
Mark, sign, and date your proxy card. Return it in the prepaid postage envelope we have provided, or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.DEFINITIONS.
Unless otherwise specified or unless the context otherwise requires, the following terms, as used in this Yield10 Bioscience, Inc. 2018 Stock Option andIncentive Plan, have the following meanings:
Administrator means the Board of Directors, unless it has delegated power to act on its behalf to the Committee, in which case the term Administrator means the Committee.
Affiliate means a corporation which, for purposes of Section 424 of the Code, is a parent or subsidiary of the Company, direct or indirect.
Agreement means a written or electronic document setting forth the terms of a Stock Right delivered pursuant to the Plan in such form as the Administrator shall approve.
Board of Directors means the Board of Directors of the Company.
Cause means, with respect to a Participant (a) dishonesty with respect to the Company or any Affiliate, (b) insubordination, substantial malfeasance or non‑feasance of duty, (c) unauthorized disclosure of confidential information, (d) breach by a Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or similar agreement between the Participant and the Company or any Affiliate, and (e) conduct substantially prejudicial to the business of the Company or any Affiliate; provided, however, that any provision in an agreement between a Participant and the Company or an Affiliate, which contains a conflicting definition of Cause for termination and which is in effect at the time of such termination, shall supersede this definition with respect to that Participant. The determination of the Administrator as to the existence of Cause will be conclusive on the Participant and the Company.
Change of Control means the occurrence of any of the following events:
Ownership. Any “Person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “Beneficial Owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities (excluding for this purpose any such voting securities held by the Company or its Affiliates or by any employee benefit plan of the Company) pursuant to a transaction or a series of related transactions which the Board of Directors does not approve; or
Merger/Sale of Assets. (A) A merger or consolidation of the Company whether or not approved by the Board of Directors, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such corporation) more than 50% of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such corporation, as the case may be, outstanding immediately after such merger or consolidation; or (B) the sale or disposition by the Company of all or substantially all of the Company’s assets in a transaction requiring stockholder approval; or
Change in Board Composition. A change in the composition of the Board of Directors, as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (A) are directors of the Company as of May 23, 2018, or (B) are elected, or nominated for election, to the Board of Directors 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);
provided, that if any payment or benefit payable hereunder upon or following a Change of Control would be required to comply with the limitations of Section 409A(a)(2)(A)(v) of the Code in order to avoid an additional tax under Section 409A of the Code, such payment or benefit shall be made only if such Change in Control constitutes a change in ownership or control of the Company, or a change in ownership of the Company’s assets in accordance with Section 409A of the Code.
Code means the United States Internal Revenue Code of 1986, as amended including any successor statute, regulation and guidance thereto.
Committee means the committee of the Board of Directors to which the Board of Directors has delegated power to act under or pursuant to the provisions of the Plan.
Common Stock means shares of the Company’s common stock, $0.01 par value per share.
Company means Yield10 Bioscience, Inc., a Delaware corporation.
Consultant means any natural person who is an advisor or consultant who provides bona fide services to the Company or its Affiliates, provided that such services are not in connection with the offer or sale of securities in a capital raising transaction, and do not directly or indirectly promote or maintain a market for the Company’s or its Affiliates’ securities.
Disability or Disabled means permanent and total disability as defined in Section 22(e)(3) of the Code.
Employee means any employee of the Company or of an Affiliate (including, without limitation, an employee who is also serving as an officer or director of the Company or of an Affiliate), designated by the Administrator to be eligible to be granted one or more Stock Rights under the Plan.
Exchange Act means the United States Securities Exchange Act of 1934, as amended.
Fair Market Value of a Share of Common Stock means:
If the Common Stock is listed on a national securities exchange or traded in the over‑the‑counter market and sales prices are regularly reported for the Common Stock, the closing or, if not applicable, the last price of the Common Stock on the composite tape or other comparable reporting system for the trading day on the applicable date and if such applicable date is not a trading day, the last market trading day prior to such date;
If the Common Stock is not traded on a national securities exchange but is traded on the over‑the‑counter market, if sales prices are not regularly reported for the Common Stock for the trading day referred to in clause (1), and if bid and asked prices for the Common Stock are regularly reported, the mean between the bid and the asked price for the Common Stock at the close of trading in the over-the-counter market for the trading day on which Common Stock was traded on the applicable date and if such applicable date is not a trading day, the last market trading day prior to such date; and
If the Common Stock is neither listed on a national securities exchange nor traded in the over‑the‑counter market, such value as the Administrator, in good faith, shall determine in compliance with applicable laws.
ISO means a stock option intended to qualify as an incentive stock option under Section 422 of the Code.
Non‑Qualified Option means a stock option which is not intended to qualify as an ISO.


Option means an ISO or Non‑Qualified Option granted under the Plan.
Participant means an Employee, director or Consultant of the Company or an Affiliate to whom one or more Stock Rights are granted under the Plan.As used herein, “Participant” shall include “Participant’s Survivors” where the context requires.
Performance-Based Award means a Stock Grant or Stock-Based Award which vests based on the attainment of written Performance Goals as set forth in Paragraph 9 hereof.
Performance Goals means performance goals determined by the Committee in its sole discretion and set forth in an Agreement. The satisfaction of Performance Goals shall be subject to certification by the Committee. The Committee has the authority to take appropriate action with respect to the Performance Goals (including, without limitation, making adjustments to the Performance Goals or determining the satisfaction of the Performance Goals, in each case, in connection with a Corporate Transaction) provided that any such action does not otherwise violate the terms of the Plan.
Plan means this Yield10 Bioscience, Inc. 2018 Stock Option and Incentive Plan.
Securities Act means the Securities Act of 1933, as amended.
Shares means shares of the Common Stock as to which Stock Rights have been or may be granted under the Plan or any shares of capital stock into which the Shares are changed or for which they are exchanged within the provisions of Paragraph 3 of the Plan. The Shares issued under the Plan may be authorized and unissued shares or shares held by the Company in its treasury, or both.
Stock-Based Award means a grant by the Company under the Plan of an equity award or an equity-based award which is not an Option or a Stock Grant.
Stock Grant means a grant by the Company of Shares under the Plan.
Stock Right means a right to Shares or the value of Shares of the Company granted pursuant to the Plan -- an ISO, a Non-Qualified Option, a Stock Grant or a Stock-Based Award.
Survivor means a deceased Participant’s legal representatives and/or any person or persons who acquired the Participant’s rights to a Stock Right by will or by the laws of descent and distribution.
☐ FOR ☐ AGAINST ☐ ABSTAIN
2.Proposal to approve the potential issuance of more than 2,500,948 shares of our common stock upon the conversion of shares of our Series B Convertible Preferred Stock and the exercise of warrants to purchase our common stock, all of which were issued pursuant to the private placement that closed on November 19, 2019.
☐ FOR ☐ AGAINST ☐ ABSTAIN
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. ☐PURPOSES OF THE PLAN.
The Plan is intended to encourage ownership of Shares by Employees and directors of and certain Consultants to the Company and its Affiliates in order to attract and retain such people, to induce them to work for the benefit of the Company or of an Affiliate and to provide additional incentive for them to promote the success of the Company or of an Affiliate. The Plan provides for the granting of ISOs, Non‑Qualified Options, Stock Grants and Stock-Based Awards.

Signature3.SHARES SUBJECT TO THE PLAN.
(a)    Commencing on May 19, 2020, the number of Shares which may be issued from time to time pursuant to this Plan shall be the sum of: (i) 270,057shares of Common Stock and (ii) any shares of Common Stock that are represented by awards granted under the Company’s 2006 Stock Option and Incentive Plan and 2014 Stock Option and Incentive Plan that are forfeited, expire or are canceled without delivery of shares of Common Stock or which result in the forfeiture of shares of Common Stock back to the Company on or after May 19, 2020, or the equivalent of such number of Shares after the Administrator, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with Paragraph 25 of this Plan; provided, however, that as of May 19, 2020 no more than 16,880 shares shall be added to the Plan pursuant to subsection (ii).


(b)    Notwithstanding Subparagraph (a) above, the number of Shares issuable pursuant to this Plan shall be increased, on the first day of each of the Company’s 2021, 2022, 2023, 2024 and 2025 fiscal years, by an amount equal to the lesser of (A) five percent (5%) of the outstanding shares of the Company’s Common Stock on the last day of the immediately preceding fiscal year and (B) such smaller number of Shares as determined by the Board; provided, however, no more than 5,000,000 Shares may be issued upon the exercise of Incentive Stock Options.
(c)    If an Option ceases to be “outstanding”, in whole or in part (other than by exercise), or if the Company shall reacquire (at not more than its original issuance price) any Shares issued pursuant to a Stock Grant or Stock-Based Award, or if any Stock Right expires or is forfeited, cancelled, or otherwise terminated or results in any Shares not being issued, the unissued or reacquired Shares which were subject to such Stock Right shall again be available for issuance from time to time pursuant to this Plan. Notwithstanding the foregoing, if a Stock Right is exercised, in whole or in part, by tender of Shares or if the Company or an Affiliate’s tax withholding obligation is satisfied by withholding Shares, the number of Shares deemed to have been issued under the Plan for purposes of the limitation set forth in Paragraph 3(a) above shall be the number of Shares that were subject to the Stock Right or portion thereof, and not the net number of Shares actually issued. In addition, Shares repurchased by the Company with the proceeds of the option exercise price may not be reissued under the Plan. However, in the case of ISOs, the foregoing provisions shall be subject to any limitations under the Code.
4.ADMINISTRATION OF THE PLAN.
The Administrator of the Plan will be the Board of Directors, except to the extent the Board of Directors delegates its authority to the Committee, in which case the Committee shall be the Administrator. Subject to the provisions of the Plan, the Administrator is authorized to:
(a)    Interpret the provisions of the Plan and all Stock Rights and to make all rules and determinations which it deems necessary or advisable for the administration of the Plan;
(b)    Determine which Employees, directors and Consultants shall be granted Stock Rights;
(c)    Determine the number of Shares for which a Stock Right or Stock Rights shall be granted, provided however that in no event shall Stock Rights to be granted to any non-employee director under the Plan in any calendar year exceed an aggregate grant date fair value of $250,000 except that the foregoing limitation shall not apply to Stock Rights made pursuant to an election by a non-employee director to receive the Stock Rights in lieu of cash for all or a portion of cash fees to be received for service on the Board or any Committee thereof;
(d)    Specify the terms and conditions upon which a Stock Right or Stock Rights may be granted;
(e)    Make any adjustments in the Performance Goals included in the Performance-Based Awards;
(f)    Amend any term or condition of any outstanding Stock Right, other than reducing the exercise price or purchase price or extending the expiration date of an Option, provided that (i) such term or condition as amended is not prohibited by the Plan; (ii) any such amendment shall not impair the rights of a Participant under any Stock Right previously granted without such Participant’s consent or in the event of death of the Participant the Participant’s Survivors; and (iii) any such amendment shall be made only after the Administrator determines whether such amendment would cause any adverse tax consequences to the Participant, including, but not limited to, the annual vesting limitation contained in Section 422(d) of the Code and described in Paragraph 6(b)(iv) below with respect to ISOs and pursuant to Section 409A of the Code;
(g)    Make any adjustments in the Performance Goals included in any Performance-Based Awards; and
(h)    Adopt any sub-plans applicable to residents of any specified jurisdiction as it deems necessary or appropriate in order to comply with or take advantage of any tax or other laws applicable to the Company, any Affiliate or to Participants or to otherwise facilitate the administration of the Plan, which sub-plans may include additional restrictions or conditions applicable to Stock Rights or Shares issuable pursuant to a Stock Right; provided, however, that all such interpretations, rules, determinations, terms and conditions shall be made and prescribed in the context of potential tax consequences under Section 409A of the Code and preserving the tax status under Section 422 of the Code


of those Options which are designated as ISOs. Subject to the foregoing, the interpretation and construction by the Administrator of any provisions of the Plan or of any Stock Right granted under it shall be final, unless otherwise determined by the Board of Directors, if the Administrator is the Committee. In addition, if the Administrator is the Committee, the Board of Directors may take any action under the Plan that would otherwise be the responsibility of the Committee.
To the extent permitted under applicable law, the Board of Directors or the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any portion of its responsibilities and powers to any other person selected by it. The Board of Directors or the Committee may revoke any such allocation or delegation at any time. Notwithstanding the foregoing, only the Board of Directors or the Committee shall be authorized to grant a Stock Right to any director of the Company or to any “officer” of the Company as defined by Rule 16a-1 under the Exchange Act.
5.ELIGIBILITY FOR PARTICIPATION.
The Administrator will, in its sole discretion, name the Participants in the Plan; provided, however, that each Participant must be an Employee, director or Consultant of the Company or of an Affiliate at the time a Stock Right is granted. Notwithstanding the foregoing, the Administrator may authorize the grant of a Stock Right to a person not then an Employee, director or Consultant of the Company or of an Affiliate; provided, however, that the actual grant of such Stock Right shall be conditioned upon such person becoming eligible to become a Participant at or prior to the time of the execution of the Agreement evidencing such Stock Right. ISOs may be granted only to Employees who are deemed to be residents of the United States for tax purposes. Non‑Qualified Options, Stock Grants and Stock-Based Awards may be granted to any Employee, director or Consultant of the Company or an Affiliate. The granting of any Stock Right to any individual shall neither entitle that individual to, nor disqualify him or her from, participation in any other grant of Stock Rights or any grant under any other benefit plan established by the Company or any Affiliate for Employees, directors or Consultants.
6.TERMS AND CONDITIONS OF OPTIONS.
Each Option shall be set forth in an Option Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Administrator may provide that Options be granted subject to such terms and conditions, consistent with the terms and conditions specifically required under this Plan, as the Administrator may deem appropriate including, without limitation, subsequent approval by the shareholders of the Company of this Plan or any amendments thereto. The Option Agreements shall be subject to at least the following terms and conditions:
(a)    Non‑Qualified Options: Each Option intended to be a Non‑Qualified Option shall be subject to the terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards for any such Non‑Qualified Option:
(i)
Exercise Price: Each Option Agreement shall state the exercise price (per share) of Stockholder
Date:Signaturethe Shares covered by each Option, which exercise price shall be determined by the Administrator and shall be at least equal to the Fair Market Value per share of StockholderDate:the Common Stock on the date of grant of the Option.
(ii)
Number of Shares: Each Option Agreement shall state the number of Shares to which it pertains.
(iii)
Vesting: Each Option Agreement shall state the date or dates on which it first is exercisable and the date after which it may no longer be exercised, and may provide that the Option rights accrue or become exercisable in installments over a period of months or years, or upon the occurrence of certain performance conditions or the attainment of stated goals or events.
(iv)
Additional Conditions: Exercise of any Option may be conditioned upon the Participant’s execution of a shareholder's agreement in a form satisfactory to the Administrator providing for certain protections for the Company and its other shareholders, including requirements that:
A.The Participant’s or the Participant’s Survivors’ right to sell or transfer the Shares may be restricted; and

Note: Please sign exactly
B.The Participant or the Participant’s Survivors may be required to execute letters of investment intent and must also acknowledge that the Shares will bear legends noting any applicable restrictions.
(v)
Term of Option: Each Option shall terminate not more than ten years from the date of the grant or at such earlier time as the Option Agreement may provide.
(b)    ISOs: Each Option intended to be an ISO shall be issued only to an Employee who is deemed to be a resident of the United States for tax purposes, and shall be subject to the following terms and conditions, with such additional restrictions or changes as yourthe Administrator determines are appropriate but not in conflict with Section 422 of the Code and relevant regulations and rulings of the Internal Revenue Service:
(i)
Minimum standards: The ISO shall meet the minimum standards required of Non‑Qualified Options, as described in Paragraph 6(a) above, except clause (i) and (v) thereunder.
(ii)
Exercise Price: Immediately before the ISO is granted, if the Participant owns, directly or by reason of the applicable attribution rules in Section 424(d) of the Code:
A.
10% or less of the total combined voting power of all classes of stock of the Company or an Affiliate, the exercise price per share of the Shares covered by each ISO shall not be less than 100% of the Fair Market Value per share of the Common Stock on the date of grant of the Option; or
B.More than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, the exercise price per share of the Shares covered by each ISO shall not be less than 110% of the Fair Market Value per share of the Common Stock on the date of grant of the Option.
(iii)
Term of Option: For Participants who own:
A.
10% or less of the total combined voting power of all classes of stock of the Company or an Affiliate, each ISO shall terminate not more than ten years from the date of the grant or at such earlier time as the Option Agreement may provide; or
B.More than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, each ISO shall terminate not more than five years from the date of the grant or at such earlier time as the Option Agreement may provide.
(iv)
Limitation on Yearly Exercise: The Option Agreements shall restrict the amount of ISOs which may become exercisable in any calendar year (under this or any other ISO plan of the Company or an Affiliate) so that the aggregate Fair Market Value (determined on the date each ISO is granted) of the stock with respect to which ISOs are exercisable for the first time by the Participant in any calendar year does not exceed $100,000.
7.TERMS AND CONDITIONS OF STOCK GRANTS.
Each Stock Grant to a Participant shall state the principal terms in an Agreement duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards:
(a)    Each Agreement shall state the purchase price per share, if any, of the Shares covered by each Stock Grant, which purchase price shall be determined by the Administrator but shall not be less than the minimum consideration required by theDelaware General Corporation Law, if any, on the date of the grant of the Stock Grant;
(b)    Each Agreement shall state the number of Shares to which the Stock Grant pertains;
(c)    Each Agreement shall include the terms of any right of the Company to restrict or reacquire the Shares subject to the Stock Grant, including the time period or attainment of Performance Goals or such other performance criteria upon which such rights shall accrue and the purchase price therefor, if any; and


(d)    Dividends (other than stock dividends to be issued pursuant to Section 25 of the Plan) may accrue but shall not be paid prior to the time, and only to the extent that, the restrictions or rights to reacquire the Shares subject to the Stock Grant lapse.
8.TERMS AND CONDITIONS OF OTHER STOCK-BASED AWARDS.
The Administrator shall have the right to grant other Stock-Based Awards based upon the Common Stock having such terms and conditions as the Administrator may determine, including, without limitation, the grant of Shares based upon certain conditions, the grant of securities convertible into Shares and the grant of stock appreciation rights, phantom stock awards or stock units. The principal terms of each Stock-Based Award shall be set forth in an Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company. Each Agreement shall include the terms of any right of the Company including the right to terminate the Stock-Based Award without the issuance of Shares, the terms of any vesting conditions, Performance Goals or events upon which Shares shall be issued provided that dividends (other than stock dividends to be issued pursuant to Section 25 of the Plan) or dividend equivalents may accrue but shall not be paid prior to and only to the extent that, the Shares subject to the Stock-Based Award vest. Under no circumstances may the Agreement covering stock appreciation rights (a) have a base price (per share) that is less than the Fair Market Value per share of Common Stock on the date of grant or (b) expire more than ten years following the date of grant.
The Company intends that the Plan and any Stock-Based Awards granted hereunder be exempt from the application of Section 409A of the Code or meet the requirements of paragraphs (2), (3) and (4) of subsection (a) of Section 409A of the Code, to the extent applicable, and be operated in accordance with Section 409A so that any compensation deferred under any Stock-Based Award (and applicable investment earnings) shall not be included in income under Section 409A of the Code. Any ambiguities in the Plan shall be construed to effect the intent as described in this Paragraph 8.
9.
PERFORMANCE-BASED AWARDS.
The Committee shall determine whether, with respect to a performance period, the applicable Performance Goals have been met with respect to a given Participant and, if they have, to so certify and ascertain the amount of the applicable Performance-Based Award. No Performance-Based Awards will be issued for such performance period until such certification is made by the Committee. The number of Shares issued in respect of a Performance-Based Award determined by the Committee for a performance period shall be paid to the Participant at such time as determined by the Committee in its sole discretion after the end of such performance period and any dividends (other than stock dividends to be issued pursuant to Section 25 of the Plan) or dividend equivalents that accrue shall only be paid in respect of the number of Shares earned in respect of a Performance-Based Award.
10.EXERCISE OF OPTIONS AND ISSUE OF SHARES.
An Option (or any part or installment thereof) shall be exercised by giving written notice to the Company or its designee (in a form acceptable to the Administrator, which may include electronic notice), together with provision for payment of the aggregate exercise price in accordance with this Paragraph for the Shares as to which the Option is being exercised, and upon compliance with any other condition(s) set forth in the Option Agreement. Such notice shall be signed by the person exercising the Option (which signature may be provided electronically in a form acceptable to the Administrator), shall state the number of Shares with respect to which the Option is being exercised and shall contain any representation required by the Plan or the Option Agreement. Payment of the exercise price for the Shares as to which such Option is being exercised shall be made (a) in United States dollars in cash or by check; or (b) at the discretion of the Administrator, through delivery of shares of Common Stock held for at least six months (if required to avoid negative accounting treatment) having a Fair Market Value equal as of the date of the exercise to the aggregate cash exercise price for the number of Shares as to which the Option is being exercised; or (c) at the discretion of the Administrator, by having the Company retain from the Shares otherwise issuable upon exercise of the Option, a number of Shares having a Fair Market Value equal as of the date of exercise to the aggregate exercise price for the number of Shares as to which the Option is being exercised; or (d) at the discretion of the Administrator, in accordance with a


cashless exercise program established with a securities brokerage firm, and approved by the Administrator; or (e) at the discretion of the Administrator, by any combination of (a), (b), (c) and (d) above or (f) at the discretion of the Administrator, by payment of such other lawful consideration as the Administrator may determine. Notwithstanding the foregoing, the Administrator shall accept only such payment on exercise of an ISO as is permitted by Section 422 of the Code.
The Company shall then reasonably promptly deliver the Shares as to which such Option was exercised to the Participant (or to the Participant’s Survivors, as the case may be). In determining what constitutes “reasonably promptly,” it is expressly understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including, without limitation, state securities or “blue sky” laws) which requires the Company to take any action with respect to the Shares prior to their issuance. The Shares shall, upon delivery, be fully paid, non-assessable Shares.
11.PAYMENT IN CONNECTION WITH THE ISSUANCE OF STOCK GRANTS AND STOCK-BASED AWARDS AND ISSUE OF SHARES.
Any Stock Grant or Stock-Based Award requiring payment of a purchase price for the Shares as to which such Stock Grant or Stock-Based Award is being granted shall be made (a) in United States dollars in cash or by check; or (b) at the discretion of the Administrator, through delivery of shares of Common Stock held for at least six months (if required to avoid negative accounting treatment) and having a Fair Market Value equal as of the date of payment to the purchase price of the Stock Grant or Stock-Based Award; or (c) at the discretion of the Administrator, by any combination of (a) and (b) above; or (d) at the discretion of the Administrator, by payment of such other lawful consideration as the Administrator may determine.
The Company shall when required by the applicable Agreement, reasonably promptly deliver the Shares as to which such Stock Grant or Stock-Based Award was made to the Participant (or to the Participant’s Survivors, as the case may be), subject to any escrow provision set forth in the applicable Agreement. In determining what constitutes “reasonably promptly,” it is expressly understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including, without limitation, state securities or “blue sky” laws) which requires the Company to take any action with respect to the Shares prior to their issuance.
12.RIGHTS AS A SHAREHOLDER.
No Participant to whom a Stock Right has been granted shall have rights as a shareholder with respect to any Shares covered by such Stock Right except after due exercise of an Option or issuance of Shares as set forth in any Agreement, tender of the aggregate exercise or purchase price, if any, for the Shares being purchased and registration of the Shares in the Company’s share register in the name appearof the Participant.
13.ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS.
By its terms, a Stock Right granted to a Participant shall not be transferable by the Participant other than (i) by will or by the laws of descent and distribution, or (ii) as approved by the Administrator in its discretion and set forth in the applicable Agreement provided that no Stock Right may be transferred by a Participant for value. Notwithstanding the foregoing, an ISO transferred except in compliance with clause (i) above shall no longer qualify as an ISO. The designation of a beneficiary of a Stock Right by a Participant, with the prior approval of the Administrator and in such form as the Administrator shall prescribe, shall not be deemed a transfer prohibited by this Paragraph. Except as provided above during the Participant’s lifetime a Stock Right shall only be exercisable by or issued to such Participant (or his or her legal representative) and shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted transfer, assignment, pledge, hypothecation or other disposition of any Stock Right or of any rights granted thereunder contrary to the provisions of this Plan, or the levy of any attachment or similar process upon a Stock Right, shall be null and void.


14.EFFECT ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE OR DEATH OR DISABILITY.
Except as otherwise provided in a Participant’s Option Agreement, in the event of a termination of service (whether as an Employee, director or Consultant) with the Company or an Affiliate before the Participant has exercised an Option, the following rules apply:
(a)    A Participant who ceases to be an Employee, director or Consultant of the Company or of an Affiliate (for any reason other than termination for Cause, Disability, or death for which events there are special rules in Paragraphs 15, 16, and 17, respectively), may exercise any Option granted to him or her to the extent that the Option is exercisable on the date of such termination of service, but only within such term as the Administrator has designated in a Participant’s Option Agreement.
(b)    Except as provided in Subparagraph (c) below, or Paragraph 16 or 17, in no event may an Option intended to be an ISO, be exercised later than three months after the Participant’s termination of employment.
(c)    The provisions of this Proxy. WhenParagraph, and not the provisions of Paragraph 16 or 17, shall apply to a Participant who subsequently becomes Disabled or dies after the termination of employment, director status or consultancy; provided, however, in the case of a Participant’s Disability or death within three months after the termination of employment, director status or consultancy, the Participant or the Participant’s Survivors may exercise the Option within one year after the date of the Participant’s termination of service, but in no event after the date of expiration of the term of the Option.
(d)    Notwithstanding anything herein to the contrary, if subsequent to a Participant’s termination of employment, termination of director status or termination of consultancy, but prior to the exercise of an Option, the Administrator determines that, either prior or subsequent to the Participant’s termination, the Participant engaged in conduct which would constitute Cause, then such Participant shall forthwith cease to have any right to exercise any Option.
(e)    A Participant to whom an Option has been granted under the Plan who is absent from the Company or an Affiliate because of temporary disability (any disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated such Participant’s employment, director status or consultancy with the Company or with an Affiliate, except as the Administrator may otherwise expressly provide; provided, however, that, for ISOs, any leave of absence granted by the Administrator of greater than three months, unless pursuant to a contract or statute that guarantees the right to reemployment, shall cause such ISO to become a Non-Qualified Option on the date that is six months following the commencement of such leave of absence.
(f)    Except as required by law or as set forth in a Participant’s Option Agreement, Options granted under the Plan shall not be affected by any change of a Participant’s status within or among the Company and any Affiliates, so long as the Participant continues to be an Employee, director or Consultant of the Company or any Affiliate.
15.EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR CAUSE.
Except as otherwise provided in a Participant’s Option Agreement, the following rules apply if the Participant’s service (whether as an Employee, director or Consultant) with the Company or an Affiliate is terminated for Cause prior to the time that all his or her outstanding Options have been exercised:
(a)    All outstanding and unexercised Options as of the time the Participant is notified his or her service is terminated for Cause will immediately be forfeited.
(b)    Cause is not limited to events which have occurred prior to a Participant’s termination of service, nor is it necessary that the Administrator’s finding of Cause occur prior to termination. If the Administrator determines, subsequent to a Participant’s termination of service but prior to the exercise of an Option, that either prior or subsequent to the Participant’s termination the Participant engaged in conduct which would constitute Cause, then the right to exercise any Option is forfeited.


16.EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY.
Except as otherwise provided in a Participant’s Option Agreement:
(a)    A Participant who ceases to be an Employee, director or Consultant of the Company or of an Affiliate by reason of Disability may exercise any Option granted to such Participant to the extent that the Option has become exercisable but has not been exercised on the date of the Participant’s termination of service due to Disability; and in the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of the Participant’s termination of service due to Disability of any additional vesting rights that would have accrued on the next vesting date had the Participant not become Disabled. The proration shall be based upon the number of days accrued in the current vesting period prior to the date of the Participant’s termination of service due to Disability.
(b)    A Disabled Participant may exercise the Option only within the period ending one year after the date of the Participant’s termination of service due to Disability, notwithstanding that the Participant might have been able to exercise the Option as to some or all of the Shares on a later date if the Participant had not been terminated due to Disability and had continued to be an Employee, director or Consultant or, if earlier, within the originally prescribed term of the Option.
(c)    The Administrator shall make the determination both of whether Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another agreement between the Company and such Participant, in which case such procedure shall be used for such determination). If requested, the Participant shall be examined by a physician selected or approved by the Administrator, the cost of which examination shall be paid for by the Company.
17.EFFECT ON OPTIONS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.
Except as otherwise provided in a Participant’s Option Agreement:
(a)    In the event of the death of a Participant while the Participant is an Employee, director or Consultant of the Company or of an Affiliate, such Option may be exercised by the Participant’s Survivors to the extent that the Option has become exercisable but has not been exercised on the date of death; and in the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of death of any additional vesting rights that would have accrued on the next vesting date had the Participant not died. The proration shall be based upon the number of days accrued in the current vesting period prior to the Participant’s date of death.
(b)    If the Participant’s Survivors wish to exercise the Option, they must take all necessary steps to exercise the Option within one year after the date of death of such Participant, notwithstanding that the decedent might have been able to exercise the Option as to some or all of the Shares on a later date if he or she had not died and had continued to be an Employee, director or Consultant or, if earlier, within the originally prescribed term of the Option.
18.EFFECT OF TERMINATION OF SERVICE ON UNACCEPTED STOCK GRANTS AND STOCK-BASED AWARDS.
In the event of a termination of service (whether as an Employee, director or Consultant) with the Company or an Affiliate for any reason before the Participant has accepted a Stock Grant or a Stock-Based Award and paid the purchase price, if required, such grant shall terminate.
For purposes of this Paragraph 18 and Paragraph 19 below, a Participant to whom a Stock Grant or a Stock-Based Award has been issued under the Plan who is absent from work with the Company or with an Affiliate because of temporary disability (any disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated such Participant’s employment, director status or consultancy with the Company or with an Affiliate, except as the Administrator may otherwise expressly provide.
In addition, for purposes of this Paragraph 18 and Paragraph 19 below, any change of employment or other service within or among the Company and any Affiliates shall not be treated as a termination of employment, director


status or consultancy so long as the Participant continues to be an Employee, director or Consultant of the Company or any Affiliate.
19.EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE, DEATH OR DISABILITY.
Except as otherwise provided in a Participant’s Agreement, in the event of a termination of service for any reason (whether as an Employee, director or Consultant), other than termination for Cause, death or Disability for which there are special rules in Paragraphs 20, 21, and 22 below, before all forfeiture provisions or Company rights of repurchase shall have lapsed, then the Company shall have the right to cancel or repurchase that number of Shares subject to a Stock Grant or Stock-Based Award as to which the Company’s forfeiture or repurchase rights have not lapsed.
20.EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF TERMINATION OF SERVICE FOR CAUSE.
Except as otherwise provided in a Participant’s Agreement, the following rules apply if the Participant’s service (whether as an Employee, director or Consultant) with the Company or an Affiliate is terminated for Cause:
(a)    All Shares subject to any Stock Grant or Stock-Based Award that remain subject to forfeiture provisions or as to which the Company shall have a repurchase right shall be immediately forfeited to the Company as of the time the Participant is notified his or her service is terminated for Cause.
(b)    Cause is not limited to events which have occurred prior to a Participant’s termination of service, nor is it necessary that the Administrator’s finding of Cause occur prior to termination. If the Administrator determines, subsequent to a Participant’s termination of service, that either prior or subsequent to the Participant’s termination the Participant engaged in conduct which would constitute Cause, then all Shares subject to any Stock Grant or Stock-Based Award that remained subject to forfeiture provisions or as to which the Company had a repurchase right on the date of termination shall be immediately forfeited to the Company.
21.EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF TERMINATION OF SERVICE FOR DISABILITY.
Except as otherwise provided in a Participant’s Agreement, the following rules apply if a Participant ceases to be an Employee, director or Consultant of the Company or of an Affiliate by reason of Disability: to the extent the forfeiture provisions or the Company’s rights of repurchase have not lapsed on the date of Disability, they shall be exercisable; provided, however, that in the event such forfeiture provisions or rights of repurchase lapse periodically, such provisions or rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Grant or Stock-Based Award through the date of Disability as would have lapsed had the Participant not become Disabled. The proration shall be based upon the number of days accrued prior to the date of Disability.
The Administrator shall make the determination both as to whether Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another agreement between the Company and such Participant, in which case such procedure shall be used for such determination). If requested, the Participant shall be examined by a physician selected or approved by the Administrator, the cost of which examination shall be paid for by the Company.
22.EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.
Except as otherwise provided in a Participant’s Agreement, the following rules apply in the event of the death of a Participant while the Participant is an Employee, director or Consultant of the Company or of an Affiliate: to the extent the forfeiture provisions or the Company’s rights of repurchase have not lapsed on the date of death, they shall be exercisable; provided, however, that in the event such forfeiture provisions or rights of repurchase lapse periodically, such provisions or rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Grant or Stock-Based Award through the date of death as would have lapsed had the Participant not died. The proration shall be based upon the number of days accrued prior to the Participant’s date of death.


23.PURCHASE FOR INVESTMENT.
Unless the offering and sale of the Shares shall have been effectively registered under the Securities Act, the Company shall be under no obligation to issue Shares under the Plan unless and until the following conditions have been fulfilled:
(a)    The person who receives a Stock Right shall warrant to the Company, prior to the receipt of Shares, that such person is acquiring such Shares for his or her own account, for investment, and not with a view to, or for sale in connection with, the distribution of any such Shares, in which event the person acquiring such Shares shall be bound by the provisions of the following legend (or a legend in substantially similar form) which shall be endorsed upon the certificate evidencing the Shares issued pursuant to such exercise or such grant of a Stock Right:
“The shares represented by this certificate have been taken for investment and they may not be sold or otherwise transferred by any person, including a pledgee, unless (1) either (a) a Registration Statement with respect to such shares shall be effective under the Securities Act of 1933, as amended, or (b) the Company shall have received an opinion of counsel satisfactory to it that an exemption from registration under such Act is then available, and (2) there shall have been compliance with all applicable state securities laws.”
(b)    At the discretion of the Administrator, the Company shall have received an opinion of its counsel that the Shares may be issued in compliance with the Securities Act without registration thereunder.
24.DISSOLUTION OR LIQUIDATION OF THE COMPANY.
Upon the dissolution or liquidation of the Company, all Options granted under this Plan which as of such date shall not have been exercised and all Stock Grants and Stock-Based Awards which have not been accepted, to the extent required under the applicable Agreement, will terminate and become null and void; provided, however, that if the rights of a Participant or a Participant’s Survivors have not otherwise terminated and expired, the Participant or the Participant’s Survivors will have the right immediately prior to such dissolution or liquidation to exercise or accept any Stock Right to the extent that the Stock Right is exercisable or subject to acceptance as of the date immediately prior to such dissolution or liquidation. Upon the dissolution or liquidation of the Company, any outstanding Stock-Based Awards shall immediately terminate unless otherwise determined by the Administrator or specifically provided in the applicable Agreement.
25.ADJUSTMENTS.
Upon the occurrence of any of the following events, a Participant’s rights with respect to any Stock Right granted to him or her hereunder shall be adjusted as hereinafter provided, unless otherwise specifically provided in a Participant’s Agreement.
(a)    Stock Dividends and Stock Splits. If (i) the shares of Common Stock shall be subdivided or combined into a greater or smaller number of shares or if the Company shall issue any shares of Common Stock as a stock dividend on its outstanding Common Stock, or (ii) additional shares or new or different shares or other securities of the Company or other non-cash assets are hold jointly,distributed with respect to such shares of Common Stock, each Stock Right and the number of shares of Common Stock deliverable thereunder shall be appropriately increased or decreased proportionately, and appropriate adjustments shall be made including, in the exercise, base or purchase price per share, and the Performance Goals applicable to outstanding Performance-Based Awards to reflect such events. The number of Shares subject to the limitations in Paragraph 3(a), 3(b) and 4(c)shall also be proportionately adjusted upon the occurrence of such events.
(b)    Corporate Transactions. If the Company is to be consolidated with or acquired by another entity in a merger, consolidation, or sale of all or substantially all of the Company’s assets or the acquisition of all of the outstanding voting stock of the Company in a single transaction or a series of related transactions by a single entity other than a transaction to merely change the state of incorporation (a “Corporate Transaction”), the Administrator or the board of directors of any entity assuming the obligations of the Company hereunder (the “Successor Board”), shall, as to outstanding Options, either (i) make appropriate provision for the continuation of such Options by substituting on an equitable basis for the Shares then subject to such Options either the consideration payable with respect to the


outstanding shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity; or (ii) upon written notice to the Participants, provide that such Options must be exercised (either (A) to the extent then exercisable or, (B) at the discretion of the Administrator, any such Options being made partially or fully exercisable for purposes of this Subparagraph), within a specified number of days of the date of such notice, at the end of which period such Options which have not been exercised shall terminate; or (iii) terminate such Options in exchange for payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to a holder should sign. When signerof the number of shares of Common Stock into which such Option would have been exercisable (either (A) to the extent then exercisable or, (B) at the discretion of the Administrator, any such Options being made partially or fully exercisable for purposes of this Subparagraph) less the aggregate exercise price thereof. For purposes of determining the payments to be made pursuant to Subclause (iii) above, in the case of a Corporate Transaction the consideration for which, in whole or in part, is other than cash, the consideration other than cash shall be valued at the fair value thereof as determined in good faith by the Board of Directors.
Notwithstanding the foregoing, in the event the Corporate Transaction also constitutes a Change of Control, and the Change of Control does not provide for the continuation of such Options as set forth in clause (i) above, then on the date of the Corporate Transaction all Options outstanding shall become fully exercisable as of the effective time of the Corporate Transaction, all other Stock Rights with time-based vesting, conditions or restrictions shall become fully vested and nonforfeitable as of the effective time of the Corporate Transaction, and all Performance-Based Awards may become vested and nonforfeitable in connection with the Corporate Transaction in the Administrator’s discretion or to the extent specified in the relevant Agreement.
With respect to outstanding Stock Grants, the Administrator or the Successor Board, shall make appropriate provision for the continuation of such Stock Grants on the same terms and conditions by substituting on an equitable basis for the Shares then subject to such Stock Grants either the consideration payable with respect to the outstanding Shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity. In lieu of the foregoing, in connection with any Corporate Transaction, the Administrator may provide that, upon consummation of the Corporate Transaction, each outstanding Stock Grant shall be terminated in exchange for payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to a holder of the number of shares of Common Stock comprising such Stock Grant (to the extent such Stock Grant is no longer subject to any forfeiture or repurchase rights then in effect or, at the discretion of the Administrator, all forfeiture and repurchase rights being waived upon such Corporate Transaction).
In taking any of the actions permitted under this Paragraph 25(b), the Administrator shall not be obligated by the Plan to treat all Stock Rights, all Stock Rights held by a Participant, or all Stock Rights of the same type, identically.
(c)    Recapitalization or Reorganization. In the event of a recapitalization or reorganization of the Company other than a Corporate Transaction pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding shares of Common Stock, a Participant upon exercising an Option or accepting a Stock Grant after the recapitalization or reorganization shall be entitled to receive for the price paid upon such exercise or acceptance if any, the number of replacement securities which would have been received if such Option had been exercised or Stock Grant accepted prior to such recapitalization or reorganization.
(d)    Adjustments to Stock-Based Awards. Upon the happening of any of the events described in Subparagraphs (a), (b) or (c) above, any outstanding Stock-Based Award shall be appropriately adjusted to reflect the events described in such Subparagraphs. The Administrator or the Successor Board shall determine the specific adjustments to be made under this Paragraph 25, including, but not limited to the effect of any, Corporate Transaction and Change of Control and, subject to Paragraph 4, its determination shall be conclusive.
(e)    Modification of Options. Notwithstanding the foregoing, any adjustments made pursuant to Subparagraph (a), (b) or (c) above with respect to Options shall be made only after the Administrator determines whether such adjustments would (i) constitute a “modification” of any ISOs (as that term is defined in Section 424(h) of the Code) or (ii) cause any adverse tax consequences for the holders of Options, including, but not limited to, pursuant to Section 409A of the Code. If the Administrator determines that such adjustments made with respect to Options would constitute a modification or other adverse tax consequence, it may in its discretion refrain from making such adjustments, unless the holder of an Option specifically agrees in writing that such adjustment be made and such writing indicates


that the holder has full knowledge of the consequences of such “modification” on his or her income tax treatment with respect to the Option. This paragraph shall not apply to the acceleration of the vesting of any ISO that would cause any portion of the ISO to violate the annual vesting limitation contained in Section 422(d) of the Code, as described in Paragraph 6(b)(iv).
26.
ISSUANCES OF SECURITIES.
Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares subject to Stock Rights. Except as expressly provided herein, no adjustments shall be made for dividends paid in cash or in property (including without limitation, securities) of the Company prior to any issuance of Shares pursuant to a Stock Right.
27.FRACTIONAL SHARES.
No fractional shares shall be issued under the Plan and the person exercising a Stock Right shall receive from the Company cash in lieu of such fractional shares equal to the Fair Market Value thereof.
28.WITHHOLDING.
In the event that any federal, state, or local income taxes, employment taxes, Federal Insurance Contributions Act withholdings or other amounts are required by applicable law or governmental regulation to be withheld from the Participant’s salary, wages or other remuneration in connection with the issuance of a Stock Right or Shares under the Plan or for any other reason required by law, the Company may withhold from the Participant’s compensation, if any, or may require that the Participant advance in cash to the Company, or to any Affiliate of the Company which employs or employed the Participant, the statutory minimum amount of such withholdings unless a different withholding arrangement, including the use of shares of the Company’s Common Stock or a promissory note, is authorized by the Administrator (and permitted by law). For purposes hereof, the fair market value of the shares withheld for purposes of payroll withholding shall be determined in the manner set forth under the definition of Fair Market Value provided in Paragraph 1 above, as of the most recent practicable date prior to the date of exercise. If the Fair Market Value of the shares withheld is less than the amount of payroll withholdings required, the Participant may be required to advance the difference in cash to the Company or the Affiliate employer.
29.NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.
Each Employee who receives an ISO must agree to notify the Company in writing immediately after the Employee makes a Disqualifying Disposition of any Shares acquired pursuant to the exercise of an ISO. A Disqualifying Disposition is defined in Section 424(c) of the Code and includes any disposition (including any sale or gift) of such Shares before the later of (a) two years after the date the Employee was granted the ISO, or (b) one year after the date the Employee acquired Shares by exercising the ISO, except as otherwise provided in Section 424(c) of the Code. If the Employee has died before such Shares are sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter.
30.TERMINATION OF THE PLAN.
The Plan will terminate on April 4, 2028,the date which is ten years from the earlier of the date of its adoption by the Board of Directors and the date of its approval by the shareholders of the Company. The Plan may be terminated at an earlier date by vote of the shareholders or the Board of Directors of the Company; provided, however, that any such earlier termination shall not affect any Agreements executed prior to the effective date of such termination. Termination of the Plan shall not affect any Stock Rights theretofore granted.
31.AMENDMENT OF THE PLAN AND AGREEMENTS.
The Plan may be amended by the shareholders of the Company. The Plan may also be amended by the Administrator; provided that any amendment approved by the Administrator which the Administrator determines is of a scope that requires shareholder approval shall be subject to obtaining such shareholder approval including, without


limitation, to the extent necessary to qualify any or all outstanding Stock Rights granted under the Plan or Stock Rights to be granted under the Plan for favorable federal income tax treatment as may be afforded ISOs under Section 422 of the Code and to the extent necessary to qualify the Shares issuable under the Plan for listing on any national securities exchange or quotation in any national automated quotation system of securities dealers. Other than as set forth in Paragraph 25 of the Plan, the Administrator may not without shareholder approval reduce the exercise price of an Option or cancel any outstanding Option in exchange for a replacement option having a lower exercise price, any Stock Grant, any other Stock-Based Award or for cash. In addition, the Administrator not take any other action that is considered a direct or indirect “repricing” for purposes of the shareholder approval rules of the applicable securities exchange or inter-dealer quotation system on which the Shares are listed, including any other action that is treated as a repricing under generally accepted accounting principles. Any modification or amendment of the Plan shall not, without the consent of a Participant, adversely affect his or her rights under a Stock Right previously granted to him or her, unless such amendment is required by applicable law or necessary to preserve the economic value of such Stock Right. With the consent of the Participant affected, the Administrator may amend outstanding Agreements in a manner which may be adverse to the Participant but which is not inconsistent with the Plan. In the discretion of the Administrator, outstanding Agreements may be amended by the Administrator in a manner which is not adverse to the Participant. Nothing in this Paragraph 31 shall limit the Administrator’s authority to take any action permitted pursuant to Paragraph 25.
32.EMPLOYMENT OR OTHER RELATIONSHIP.
Nothing in this Plan or any Agreement shall be deemed to prevent the Company or an Affiliate from terminating the employment, consultancy or director status of a Participant, nor to prevent a Participant from terminating his or her own employment, consultancy or director status or to give any Participant a right to be retained in employment or other service by the Company or any Affiliate for any period of time.
33.SECTION 409A.
If a Participant is a partnership, please sign“specified employee” as defined in partnership nameSection 409A of the Code (and as applied according to procedures of the Company and its Affiliates) as of his separation from service, to the extent any payment under this Plan or pursuant to the grant of a Stock-Based Award constitutes deferred compensation (after taking into account any applicable exemptions from Section 409A of the Code), and to the extent required by authorized person.Section 409A of the Code, no payments due under this Plan or pursuant to a Stock-Based Award may be made until the earlier of: (i) the first day of the seventh month following the Participant’s separation from service, or (ii) the Participant’s date of death; provided, however, that any payments delayed during this six-month period shall be paid in the aggregate in a lump sum, without interest, on the first day of the seventh month following the Participant’s separation from service.
The Administrator shall administer the Plan with a view toward ensuring that Stock Rights under the Plan that are subject to Section 409A of the Code comply with the requirements thereof and that Options under the Plan be exempt from the requirements of Section 409A of the Code, but neither the Administrator nor any member of the Board, nor the Company nor any of its Affiliates, nor any other person acting hereunder on behalf of the Company, the Administrator or the Board shall be liable to a Participant or any Survivor by reason of the acceleration of any income, or the imposition of any additional tax or penalty, with respect to a Stock Right, whether by reason of a failure to satisfy the requirements of Section 409A of the Code or otherwise.
34.INDEMNITY.
Neither the Board nor the Administrator, nor any members of either, nor any employees of the Company or any parent, subsidiary, or other Affiliate, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with their responsibilities with respect to this Plan, and the Company hereby agrees to indemnify the members of the Board, the members of the Committee, and the employees of the Company and its parent or subsidiaries in respect of any claim, loss, damage, or expense (including reasonable counsel fees) arising from any such act, omission, interpretation, construction or determination to the full extent permitted by law.


35.CLAWBACK.
Notwithstanding anything to the contrary contained in this Plan, the Company may recover from a Participant any compensation received from any Stock Right (whether or not settled) or cause a Participant to forfeit any Stock Right (whether or not vested) in the event that the Company’s Clawback Policy then in effect is triggered.
36.GOVERNING LAW.
This Plan shall be construed and enforced in accordance with the law of the State of Delaware.


APPENDIX B
FORMYIELD10 BIOSCIENCE, INC.
19 Presidential Way, Woburn Massachusetts 01801
PROXY FOR ANNUAL MEETING OF CERTIFICATESTOCKHOLDERS
MAY 19, 2020
YIELD10 BIOSCIENCE’S BOARD OF AMENDMENT TO EFFECT REVERSE STOCK SPLITDIRECTORS SOLICITS THIS PROXY



FORM OF CERTIFICATE OF AMENDMENT TO EFFECT REVERSE STOCK SPLIT

PursuantThe undersigned, revoking any previous proxies relating to Section 242these shares, hereby appoints Oliver P. Peoples, Ph.D. and Charles B. Haaser, and each of them (with full power to act alone), the attorneys-in-fact and proxies of the General Corporation Lawundersigned, with power of substitution to each, to vote all shares of the StateCommon Stock of Delaware, Yield10 Bioscience, Inc., a corporation organizedregistered in the name provided in this Proxy which the undersigned is entitled to vote at the 2020 Annual Meeting of Stockholders, to be held at 9:30 am on Tuesday, May 19, 2020 at the offices of Mintz, Levin, Cohn, Ferris, Glovsky and existing under the lawsPopeo, P.C. at One Financial Center, Boston, MA 02111, and at any adjournments of the Statemeeting, with all the powers the undersigned would have if personally present at the meeting. Without limiting the general authorization given by this Proxy, the proxies are, and each of Delaware (the “Corporation”), does hereby certifythem is, instructed to vote or act as follows:follows on the proposals set forth in the Proxy.

1. The nameThis Proxy, when executed, will be voted in the manner directed herein. If you do not specify below how you want your shares to be voted, this Proxy will be voted FOR the nominated Class II Director and FOR Proposals 2 and 3.In their discretion, the proxies are authorized to vote upon such other matters as may properly come before the meeting or any adjournments of the Corporation is Yield10 Bioscience, Inc.meeting.
1.Proposal to elect Oliver Peoples as Class II Director of the Company.
()   Oliver Peoples

FORTHE NOMINEEWITHHOLD AUTHORITY FOR THE NOMINEE
2.Proposal to approve an amendment to the Yield10 Bioscience, Inc. 2018 Stock Option and Incentive Plan.
FORAGAINSTABSTAIN
3.
Proposal to ratify the appointment of RSM US LLPas the Company’s independent public accountants for the fiscal year ending December 31, 2020.
FORAGAINSTABSTAIN
2. Please mark your vote in blue or black ink as shown here.
The Board of Directors ofrecommends a vote FOR the Corporation has duly adopted a resolution pursuant to Section 242 of the General Corporation Law of the State of Delaware setting forth a proposed amendment to the Amendednominee in Proposal 1, FOR Proposal 2 and Restated Certificate of Incorporation of the Corporation and declaring said amendment to be advisable. The requisite stockholders of the Corporation have duly approved said proposed amendment in accordance with Section 242 of the General Corporation Law of the State of Delaware. The amendment amends the Amended and Restated Certificate of Incorporation of the Corporation as follows:

FOR Proposal 3. The Corporation’s Amended and Restated Certificate of Incorporation, as amended, is hereby further amended by adding the following after the end of the first paragraph of Article IV:

[“Upon effectiveness of this Certificate of Amendment (the “Effective Time”), the shares of Common Stock issued and outstanding immediately prior to the Effective Time and the shares of Common Stock issued and held in the treasury of the Corporation immediately prior to the Effective Time are reclassified into a smaller number of shares such that each [ ] shares of issued Common Stock immediately prior to the Effective Time is reclassified into one (1) share of Common Stock. Notwithstanding the immediately preceding sentence, no fractional shares shall be issued as a result of the reverse stock split. Instead, any stockholder who would otherwise be entitled to a fractional share of our Common Stock as a result of the reclassification shall be entitled to receive a cash payment equal to the product of such resulting fractional interest in one share of our Common Stock multiplied by the closing trading price of our Common Stock on the trading day immediately preceding the effective date of the reverse stock split. Notwithstanding the foregoing, the Corporation shall not be obliged to issue certificates evidencing the shares of Common Stock outstanding as a result of the reverse stock split or cash in lieu of fractional shares, if any, unless and until the certificates evidencing the shares held by a holder prior to the reverse stock split are either delivered to the Corporation or its transfer agent, or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates.
Each stock certificateChange of Address - Please print new address below
By checking this box, I/we consent to future access and delivery of Annual Reports and Proxy Statements electronically via the Internet. I/We understand that immediately priorthe Company may no longer distribute printed materials to the Effective Time, represented shares of Common Stockme/us for any future stockholder meetings until this consent that were issuedI/we have given is revoked. I/we understand that I/we may revoke this consent to electronic access and outstanding immediately prior to the Effective Time shall, from and after the Effective Time, automatically and without the necessity of presenting the same for exchange, represent the number of whole shares of Common Stock after the Effective Time into which the shares of Common Stock formerly represented by such certificate shall have been reclassified (as welldelivery at any time.
Please sign exactly as the right to receive a cash payment in lieu of a fractional share of Common Stock), provided, however, thatname(s) appears hereon. Joint owners should each person of record holding a certificate that represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time shall receive, upon surrender of such certificate, a new certificate evidencing and representing the number of whole shares of Common Stock after the Effective Time into which the shares of Common Stock formerly represented by such certificate shall have been reclassified (including the right to receive a cash payment in lieu of a fractional share of Common Stock).”]

4. The Amendment of the Amended and Restated Certificate of Incorporation,sign. When signing as amended, herein certified has been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.attorney, executor, administrator, trustee or guardian, please give full title as such.

5. This Certificate of Amendment shall be effective on [    ] at [    ], Eastern Time.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its duly authorized officer on this [    ] day of  [    ].




YIELD10 BIOSCIENCE, INC.
Signature:Date _______
By: _____________________
Name: Oliver P. Peoples
Title: President and Chief Executive Officer
Signature:Date _______
PLEASE CAST YOUR VOTE AS SOON AS POSSIBLE!







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