(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Exchange Act of 1934 (Amendment No. )
☒
☐
Dear Stockholder:
26, 2024
meeting live, submit questions, and vote. We believe that holding the meeting virtually is an important step to enhancing accessibility to our annual meeting and reducing the carbon footprint of our activities.
Suite 210
June 12, 2024
fiscal year ended December 31, 2024 (Proposal 2);
Board of Directors,
PROXY STATEMENT
| | | Page | | |||
| | | | 1 | | | |
| | | | 1 | | ||
| | | 7 | | | ||
| | | | 9 | | ||
| | | 16 | | | ||
| | | | 18 | | | |
| | | | 26 | | | |
| | | | 30 | | | |
| | | | 31 | | | |
| | | | 33 | | | |
| | | | 34 | | | |
| | | | 35 | | | |
| | | | 39 | | ||
| | | | 40 | | ||
| | | | 41 | | ||
| | | 41 | | | ||
| | | | A-1 | | ||
| | | | B-1 | | |
i
Suite 210
PROXY STATEMENT
Our
These materials include:
What items will be voted on at the annual meeting?
There are four proposals scheduleddoes it mean to be voted on at the annual meeting:
The Board of Directors is not aware of any other matters to be brought before the meeting. If, other matters are properly raised at the meeting, the proxy holders may vote any shares represented by proxy in their discretion.
What are the Board’s voting recommendations?
Our Board of Directors recommends that you vote your shares:
Who can attend the annual meeting?
Admission to the annual meeting is limited to:
Each stockholder may be asked to present valid picture identification such as a driver’s license or passport and proof of stock ownership as of the record date.
When is the record date and who is entitled to vote?
The Board of Directors set April 5, 2016 as the record date. All record holders of Energous common stock as of the close of business on that date are entitled to vote. Each share of common stock is entitled to one vote. As of the record date, there were 16,538,474your shares of Energous common stock outstanding.
What iswere registered directly in your name with our transfer agent, EQ Shareowner Services, you are a stockholder of record?
Arecord. As the stockholder of record, you have the right to vote at the Annual Meeting. You may also vote by Internet, telephone or registered stockholder is a stockholder whose ownershipmail, as described in the notice and below under the heading “How do I vote?”
How do I vote?
You may voteEQ Shareowner Services website at https://www.shareowneronline.com/UserManagement/ContactUs.aspx or by any of the following methods:
toll-free call at +1-800-468-9716.
contactus@kingsdaleadvisors.com.
Annual Meeting.
this proposal. The ratification of the appointment of MarcumBPM as our independent registered public accounting firm for 2016 (“Proposal 4”)2024 is considered to be a routine matter under applicable rules. A brokerBrokers or other nomineenominees may generally vote on routine matters, and we do not expect there to be any broker non-votes with respect to Proposal 4.
such proposal.
Annual Meeting?
Annual Meeting.
the outcome of the proposal and will not prevent a candidate from being elected.
proxies and the reimbursement of out-of-pocket expenses incurred by it on our behalf.
Annual Meeting?
Annual Meeting.
Stockholders?
Requirements for Stockholder Proposals to Be Brought Before the 20172025 Annual Meeting of Stockholders.
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tableRequirements for Stockholder Proposals Under Rule 14a-19(b) under the Exchange Act. To comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than our nominees for 2025 Annual Meeting of Stockholders, must deliver a written notice that sets forth certainall information regarding beneficial ownership ofrequired by Rule 14a-19 under the Exchange Act to our common stock as of April 5, 2016 by:
Unless otherwise noted below, the address of each person listed on the table is c/o Energous CorporationSecretary at 3590 North First Street, Suite 210, San Jose, California 95134. To95134 within the time frames set forth above. In addition to satisfying the notice requirements under our knowledge, each person listed below has sole voting and investment power over the shares shown as beneficially owned exceptbylaws, to the extent jointly owned with spouses or otherwise noted below.
Beneficial ownership is determined in accordancecomply with the universal proxy rules, the proposing stockholder should also comply with the additional requirements of a proper notice under SEC Rule 14a-19, which includes the statement that such stockholder intends to solicit at least 67% of the SEC. The information does not necessarily indicate ownership for any other purpose. Under these rules,voting power of our shares of common stock issuable by usentitled to a person pursuantvote on the election of directors in support of director nominees other than our nominees. If any change occurs with respect to options and restricted stock units which may be exercised within 60 days after April 5, 2016 are deemedsuch stockholder’s intent to be beneficially owned and outstanding for purposes of calculatingsolicit the numberholders of shares and the percentage beneficially owned by that person. However, these shares are not deemed to be beneficially owned and outstanding for purposesrepresenting at least 67% of computing the percentage beneficially owned by any other person. The applicable percentage of common stock outstanding as of April 5, 2016 is based upon 16,538,474 shares outstanding on that date.
Shares | Number of | |||||||||||||||
Underlying | Shares | |||||||||||||||
Name and Address of Beneficial | Options and | Beneficially | Percentage | |||||||||||||
Owner | Common Stock | RSUs | Owned | of Class | ||||||||||||
Directors and Executive Officers | ||||||||||||||||
Martin Cooper | 10,743 | - | 10,743 | * | ||||||||||||
John R. Gaulding | 18,813 | 19,013 | (1) | 37,826 | * | |||||||||||
Robert J. Griffin | 4,803 | 25,979 | (2) | 30,782 | * | |||||||||||
Rex S. Jackson | 4,803 | 15,768 | (3) | 20,571 | * | |||||||||||
Cesar Johnston | 45,490 | - | 45,490 | * | ||||||||||||
Michael Leabman | 87,245 | 199,639 | (4) | 286,884 | 1.7 | % | ||||||||||
Stephen R. Rizzone | 83,963 | 560,292 | (5) | 644,255 | 3.8 | % | ||||||||||
Brian Sereda | 818 | - | 818 | * | ||||||||||||
Directors and Executive Officers as a group (8 persons) | 256,678 | 820,690 | 1,076,550 | 6.2 | % | |||||||||||
Five Percent Stockholders | ||||||||||||||||
DvineWave Holdings LLC (6) | 1,649,812 | - | 1,649,812 | 10.0 | % | |||||||||||
AWM Investment Company, Inc. (7) | 1,471,919 | - | 1,471,919 | 8.9 | % |
The Company’s
Mr. Cesar Johnston, our former President and Chief Executive Officer who currently continues to serve as a director, was not nominated to stand for re-election.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR THE NOMINEES LISTED BELOW
Board.
| | | Year First Became Director | | | Position with | |
| 2019 | | Director | | |||
J. Michael | | 2022 | | Director | | ||
| 2022 | ||||||
| Director; Chairman of the Board | ||||||
INFORMATION CONCERNING DIRECTORS AND NOMINEES FOR DIRECTOR
Stephen R. Rizzone
Michael Leabman, age 43, founded the Company in October 2012 and became the Company’s Chief Technology Officer in October 2013. Mr. Leabman has been a member of the Company’s Board of Directors since its founding and served as the Company’s President, Chief Financial Officer, Treasurer and Secretary until October 2013. From September 2010 to September 2013, Mr. Leabman served as President of TruePath Wireless, a service provider and equipment provider in the broadband communications industry. Mr. Leabman served on the board of directors of TruePath Holdings from 2010-2013. From 2008 to 2010, Mr. Leabman served as Chief Technology Officer for DataRunwayBroadcom Corporation Inc., a wireless communication company providing broadband internetdeveloper, manufacturer and global supplier of semiconductor and infrastructure software products, where his last role was Senior Vice President and General Manager for the Wireless Connectivity business. From 2000 to airlines.2002, Mr. Leabman received both his BachelorPatel was a business line manager at HiFn, Inc., a security processor company. From 1998 to 2000, Mr. Patel was a Senior Marketing Manager, SystemLSI at Samsung Semiconductor, a subsidiary of Samsung Electronics. From 1996 to 1998, Mr. Patel was Senior Marketing Manager at Tritech Microelectronics, Inc., a semiconductor company. From 1993 to 1996, Mr. Patel served in various Integrated Circuit Design Engineering and Marketing roles at EPSON/S-MOS Systems, a semiconductor company. Mr. Patel holds an M.B.A. from Santa Clara University, an M.S. in Computer Science degree and Master of Engineering degreefrom Arizona State University, and a B. Tech in electrical engineeringElectronics and Communications Engineering from the MassachusettsNational Institute of Technology.Technology, Warangal, India. Our Board believes that Mr. Leabman’sPatel’s extensive executive, managerial, marketing and engineering experience and in-depth knowledge of the Company, its technologysemiconductor, consumer, mobile and the consumer and commercial electronics industry positiontelecommunications industries qualify him well for service on our board of directors.
Martin Cooper, age 87, joined the Company’s Board of Directors in July 2015. Since January 2008, Mr. Cooper has served as Chairman of Dyna, LLC, a new business incubator and developer located in Del Mar, California. Mr. Cooper has over 60 years of experience in the wireless business in which time he has served on numerous boards of directors, participated in the creation of the cellular industry, and contributed to the technology of radio spectrum management. Mr. Cooper previously served as Corporate Director of Research and Development at Motorola and led a team credited with having conceived and created the first portable cellular telephone. Mr. Cooper also previously founded ArrayComm, a software firm specializing in antenna technologies for mobile phones and wireless Internet connectivity. Mr. Cooper is a member of the National Academy of Engineering and serves on the Federal Communications Commission Technology Advisory Council and the United States Department of Commerce Spectrum Management Advisory Committee. Mr. Cooper has been awarded the National Academy of Engineering’s Draper Prize, the Marconi Prize, and is an IEEE Centennial Medal awardee and Prince of Asturias Laureate awardee. Mr. Cooper holds a Bachelors of Science degree and a Masters of Science degree in Electrical Engineering from the Illinois Institute of Technology. Mr. Cooper’s extensive historical engagement in the formation and development of the cellular industry and his scientific and managerial background position him well to serve on our board of directors.
John R. Gaulding, age 70, joined the Company’s Board of Directors in March 2014 and became chairman of the Board of Directors in February 2015. Since July 1996, Mr. Gaulding has been a private investor and business consultant in the fields of strategy and organization. Mr. Gaulding is a Co-Founder and Director Emeritus of Sage Partners, an advisory firm providing counsel on strategy and corporate governance issues. He is also Chairman Emeritus of Dominican University of California where he served for 7 years as Chairman and 16 years as a Trustee. From 1996-1999 and again from 2001 to the present, Mr. Gaulding has been an independent director of Monster, Worldwide (NYSE:MWW), where he chaired the Corporate Governance and Nominating Committee for ten years and now chairs the Audit Committee. From 2002-2012, he served as a Director for Yellow Media, Inc. (TSE:Y) where he also chaired the Corporate Governance and Nominating Committee and the Compensation Committee. Mr. Gaulding’s extensive corporate board experience includes ANTs Software, Inc. where he was lead director and Chairman of the Audit Committee, and ORTEL (NASDAQ:ORTL), a high–technology manufacturer of electro-optical devices used in the telecommunications industry. In addition, he served as the executive Chairman and CEO of National Insurance Group, Inc. (NASDAQ:NAIG). Mr. Gaulding has also served as non-executive Chairman of Novo Media, Inc., one of the first digital agencies, sold to BCOM3 and in the same capacity with GetMeIn, a secondary ticketing agency headquartered in London and sold to Ticketmaster. Finally, he was a founding director of the popular in-airport wine lounge, Vino Volo. Mr. Gaulding’s industry experience includes 15 years as a corporate officer, serving as Vice-President for Corporate Strategy and Development for Pacific Telesis Group, President and CEO for Pacific Bell Yellow Pages, and President and CEO for ADP Claims Solutions Group. Mr. Gaulding holds a BS in Engineering from UCLA, an MBA with honors from the University of Southern California, and an honorary Doctor of Laws from Dominican University of California. Mr. Gaulding’s extensive executive and managerial experience position him well to serve as a member of our Board of Directors.
Robert J. GriffinMichael Dodson
Rex S. JacksonBoard.
INFORMATION CONCERNING EXECUTIVE OFFICERS
Set forth below is background information relating to our executive officers:
Stephen R. Rizzoneis discussed above underInformation Concerning Directors and Nominees for Director.
Michael Leabman is discussed above underInformation Concerning Directors and Nominees for Director.
Brian Sereda joined the Company as Chief Financial Officer in July 2015.December 2021. Prior to joining the Company, Mr. Sereda held senior finance positions in leading technology companies ranging from semiconductor equipment, software and consumer electronics and with extensive experience in corporate finance, capital markets and M&A. From 2011 through 2015 he was CFO of ActiveVideo, a developer of a software platform that enables managed service operators such as cable companies and telcos, to virtualize functions and deliver pay-TV services from the Cloud. During his tenure, he was involved in the settlement of a major IP litigation award to the Company, implemented restructurings and processes to streamline operations as the Company grew, and oversaw the eventual acquisition by Arris Group and Charter Communications in April 2015. Previously he was CFO for Virage Logic, a NASDAQ-listed, leading provider of semiconductor intellectual property from 2008 to 2010 (acquired by Synopsis). Prior to Virage, he was CFO for Proxim Wireless fromMarch 2006 to September 2008. Mr. Sereda received an MBA from St. Mary's College of California and a BSBA from Simon Fraser University in Vancouver, B.C., Canada.
Cesar Johnston joined the Company as Senior Vice President of Engineering in July 2014. Prior to joining the Company,2013, Mr. Johnston had various management roles at Marvell Semiconductor from March 2006 until September 2013, includingwas Vice President of Engineering for Wireless Connectivity since May 2010. Atat Marvell Technology, Inc., a developer and producer of semiconductors and related technology, where he was responsible for R&D and development of all Wi-Fi, Bluetooth, FM, and NFC silicon products. From 2004 to 2006, Mr. Johnston was thea Senior Director Engineeringat Broadcom Inc., a developer, manufacturer and global supplier of semiconductor and infrastructure software products, where he was responsible for Wi-Fi VLSI and Systems Hardware development, at Broadcom from January 2004 until March 2006.including 802.11g and 802.11n products. Mr. Johnston is a recognized pioneer in the technology development of wireless technologies, and he has been responsible for the introduction of multiple first-of generations of SISO and MIMO wireless products. Mr. Johnston is a Senior Member of the IEEE. Mr. Johnston received both a Bachelor of ScienceB.S. and Master of ScienceM.S. degrees in Electrical Engineering from the NYU PolytechnicTandon School of Engineering and holds a Certificate of Business Excellence (COBE) from the University of California, Berkeley. He is listed as either inventor or co-inventor on 18 issuedan IEEE Senior Member, and he has written over 40 conference and journal papers and holds 35 patents.
| | OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES | | |
Executive Sessions of Independent Directors
Executive sessionsdemographic backgrounds of our independentBoard as self-identified by its members in accordance with Nasdaq Listing Rule 5606. Among our four current Board members, two of our directors are generally scheduled following each regularly scheduled in-person meeting of the Board of Directors. Executive sessions do not include any non-independent directors and are led by the Chairman of the Board of Directors, John R. Gaulding, who is independent.
self-identify as being from underrepresented communities.
Board Diversity Matrix (As of April 26, 2024) | | |||||||||||||||
Total Number of Directors | | | 4 | | ||||||||||||
| | | Female | | | Male | | | Did Not Disclose Gender | | ||||||
Part I: Gender Identity | | |||||||||||||||
Directors | | | | | | | | 2 | | | | | | 2 | | |
Part II: Demographic Background | | |||||||||||||||
Asian | | | | | | | | 1 | | | | | | | | |
White | | | | | | | | 1 | | | | | | | | |
Did Not Disclose Demographic Background | | | | | | | | | | | | | | 2 | | |
Policy Governing Effective March 24, 2023, the Board also established an Office of the Chair, currently composed of Mr. Roberson, and Ms. Burak. The Office of the Chair oversees strategic planning and direction of the Company, working closely with the Board, the senior leadership team, and other stakeholders to deliver the strategic mission of the Company.
www.energous.com and summarized below.
Director candidates are considered based upon a variety of criteria, including demonstrated business and professional skills and experiences relevant to our business and strategic direction, concern for long-term stockholder interests, and personal integrity and sound business judgment. The Board of Directors seeks members from diverse professional backgrounds who combine a broad spectrum of relevant industry and strategic experience and expertise that, in concert, offer us and our stockholders diversity of opinion and insight in the areas most important to us and our corporate mission. In addition, nominees for director are selected to have complementary, rather than overlapping, skill sets. However, the Corporate Governance and Nominating Committee does not have a formal policy concerning the diversity of the Board of Directors.Board. All candidates for director nominee must have time available to devote to their service on the activities of the Board of Directors.Board. The Corporate Governance and Nominating Committee also considers the independence of candidates for director nominee, including the appearance of any conflict in serving as a director. Candidates for director nomineesnominee who do not meet all of these criteria may still be considered for nomination to the Board of Directors, if the Corporate Governance and Nominating Committee believes that the candidate will make an exceptional contribution to us and our stockholders.
committees.
Policy Governing Director Attendance at Annual Meetings of Stockholders
THE BOARD OF DIRECTORS AND ITS COMMITTEES
and its Committees
Our Board of Directors met eight times during the year ended December 31, 2015. All directors attended at least 75% of the aggregate of all meetings of the Board of Directors on which he served during 2015.
Name | | | Audit | | | Compensation | | | Corporate Governance and Nominating | |
Rahul Patel | | | X | | | Chair | | | X | |
J. Michael Dodson | | | Chair | | | X | | | X | |
David Roberson | | | X | | | X | | | Chair | |
Committees
Audit Committee.Exchange Act. Our Audit Committee currently consists of Mr. Gaulding,Dodson (Chair), Mr. GriffinRoberson and Mr. Jackson.Patel. The Board of Directors has determined that each current member of the Audit Committee is independent within the meaning of the NASDAQNasdaq director independence standards and applicable rules of the SEC for audit committee members. The Board of Directors has electedappointed Mr. JacksonDodson as ChairpersonChair of the Audit Committee and has determined that he qualifies as an “audit committee financial expert” under the rules of the SEC.SEC rules. The Audit Committee is responsible for assisting the Board of Directors in fulfilling its oversight responsibilities with respect to financial reports and other financial information. The Audit Committee (1) reviews, monitors and reports to the Board of Directors on the adequacy of the Company’sour financial reporting process and system of internal controlscontrol over financial reporting, (2) has the ultimate authority to select, evaluate and replace the independent auditor and is the ultimate authority to which the independent auditors are accountable,
may form, and delegate authority to, subcommittees when it deems appropriate.
Corporate Governance and Nominating Committee. Our Corporate Governance and Nominating Committee currently consists of Mr. GriffinRoberson (Chair), Mr. Dodson and Mr. Jackson.Patel. The Board of Directors has determined that each current member of the Corporate Governance and Nominating Committee is an independent director within the meaning of the NASDAQNasdaq director independence standards and applicable rules of the SEC. Mr. Griffin serves as Chairperson of the Corporate Governance and Nominating Committee.standards. The Corporate Governance and Nominating Committee (1) recommends to the Board of Directors persons to serve as members of the Board of Directors and as members of and chairpersons for theits committees, of the Board of Directors, (2) considers the recommendation of candidates to serve as directorsany director nominees submitted from theby stockholders, of the Company, (3) assists the Board of Directors in evaluating the performance of the Board of Directorsdirectors and the Board committees, (4) advises the Board of Directors regarding the appropriate boardBoard leadership structure, for the Company, (5) reviews and makes recommendations to the Board of Directors on corporate governance and corporate responsibility and sustainability matters and (6) reviews theBoard size and composition of the Board of Directors and recommends to the Board of Directors any changes it deems advisable. The Corporate Governance and Nominating Committee met once in 2015.
Compensation Committee Interlocks and Insider Participation
John R. Gaulding and Robert J. Griffin served onadvisable to the Compensation Committee in 2015. None of the directors who served on the Compensation Committee in 2015 served as one of our employees in 2015 or has ever served as one of our officers. During 2015, none of our executive officers served as a director or member of the compensation committee (or other committee performing similar functions) of any other entity of which an executive officer served on our Board of Directors or Compensation Committee.
Board.
| Chair of the Board | | | | $ | 25,000 | | |
| Lead Independent Director (if applicable) | | | | $ | 25,000 | | |
| Audit Committee Chair | | | | $ | 20,000 | | |
| Audit Committee Member | | | | $ | 10,000 | | |
| Compensation Committee Chair | | | | $ | 15,000 | | |
| Compensation Committee Member | | | | $ | 5,000 | | |
| Corporate Governance and Nominating Committee Chair | | | | $ | 10,000 | | |
| Corporate Governance and Nominating Committee Member | | | | $ | 5,000 | | |
Name | | | Fees Earned or Paid in Cash | | | Stock Awards(1) | | | Total | | |||||||||
Reynette Au(2) | | | | $ | 70,000 | | | | | $ | 37,350 | | | | | $ | 107,350 | | |
Rahul Patel | | | | $ | 60,000 | | | | | $ | 20,750 | | | | | $ | 80,750 | | |
Sheryl Wilkerson(3) | | | | $ | 25,000 | | | | | $ | 20,750 | | | | | $ | 45,750 | | |
J. Michael Dodson | | | | $ | 57,364 | | | | | $ | 8,084 | | | | | $ | 65,448 | | |
David Roberson | | | | $ | 52,364 | | | | | $ | 8,084 | | | | | $ | 60,448 | | |
Name | | Shares Subject to Outstanding Stock Awards(1) | | | Shares Subject to Outstanding Stock Option Awards | | |||||||
Reynette Au(2) | | | | | 2,250 | | | | | | — | | |
Rahul Patel | | | | | 1,250 | | | | | | — | | |
Sheryl Wilkerson(3) | | | | | — | | | | | | — | | |
J. Michael Dodson | | | | | 2,154 | | | | | | — | | |
David Roberson | | | | | 2,154 | | | | | | — | | |
The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls and the certification of the integrity and reliability of the Company’s internal controls procedures. In fulfilling its oversight responsibilities, the Audit Committee has reviewed the Company’s audited financial statements included in the Annual Report on Form 10-Kappointed BPM as our independent registered public accounting firm for the fiscal year endedending December 31, 2015,2024. BPM has served as our independent registered public accounting firm since April 2024. Representatives of BPM are expected to attend the Annual Meeting, where they will be available to respond to appropriate questions and, has discussed them with both management and Marcum LLP (“Marcum”),if they desire, to make a statement.
Fee Category | | | 2023 | | | 2022 | | ||||||
Audit Fees(1) | | | | $ | 283,168 | | | | | $ | 259,309 | | |
Audit-Related Fees | | | | | — | | | | | | — | | |
Tax Fees | | | | | — | | | | | | — | | |
All Other Fees | | | | | — | | | | | | — | | |
Total | | | | $ | 283,168 | | | | | $ | 259,309 | | |
Based on its review of the financial statements and the aforementioned discussions, the Audit Committee concluded that it would be reasonable to recommend, and on that basis did recommend, to the Board of Directors that the audited financial statements be included in the Company’s Annual Report.
Respectfully submitted by the Audit Committee.
| | OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE |
RATIFICATION OF THE APPOINTMENT OF BPM LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2024. | ||
| ||
|
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Our compensation philosophy is to offer our executive officers compensation and benefits that are competitive and meet our goals of attracting, retaining and motivating highly skilled management, which is necessary to achieve our financial and strategic objectives and create long-term value for our stockholders. We believe the levels of compensation we provide should be competitive, reasonable and appropriate for our business needs and circumstances. The principal elements of our executive compensation program have to date included base salary, incentive quarterly performance bonuses and long-term equity compensation in the form of stock options and restricted stock units. We believe successful long-term Company performance is more critical to enhancing stockholder value than short-term results. For this reason and to conserve cash and better align the interests of management and our stockholders, we emphasize long-term performance-based equity compensation over base annual salaries.
The following table sets forth information concerning the compensation earned by the individual that served as our Principal Executive Officer during 2015 and our two most highly compensated executive officers other than the individual who served as our Principal Executive Officer during 2015 (collectively, the “named executive officers”):
Summary Compensation Table for 2015
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(2) | All Other Compensation ($) | TOTAL ($) | |||||||||||||||||||
Stephen R. Rizzone | 2015 | 365,00 | 322,140 | 4,102,165 | (3) | - | - | 4,789,305 | ||||||||||||||||||
Chief Executive Officer | 2014 | 263,654 | 132,720 | - | 1,667,784 | - | 2,064,158 | |||||||||||||||||||
Brian Sereda | 2015 | 117,468 | 82,280 | 1,129,839 | (4) | - | - | 1,329,586 | ||||||||||||||||||
Vice President and Chief Financial Officer | 2014 | - | - | - | - | - | - | |||||||||||||||||||
Cesar Johnston | 2015 | 250,000 | 175,483 | 440,785 | (5) | - | - | 886,268 | ||||||||||||||||||
Senior Vice President of Engineering | 2014 | 121,314 | 23,008 | 1,356,000 | (6) | - | - | 1,500,321 |
Outstanding Equity Awards at December 31, 2015
The following table provides information regarding equity awards held by the named executive officers as of December 31, 2015.
Options Awards | Stock Awards | ||||||||||||||||||||||||||||
Equity | |||||||||||||||||||||||||||||
Incentive | |||||||||||||||||||||||||||||
Equity | Plan | ||||||||||||||||||||||||||||
Incentive | Awards: | ||||||||||||||||||||||||||||
Plan | Market or | ||||||||||||||||||||||||||||
Awards: | Payout | ||||||||||||||||||||||||||||
Market | Number of | Value Of | |||||||||||||||||||||||||||
Value of | Unearned | Unearned | |||||||||||||||||||||||||||
Number of | Number of | Number of | Shares or | Shares, | Shares, | ||||||||||||||||||||||||
Securities | Securities | Shares or | Units of | Units or | Units or | ||||||||||||||||||||||||
Underlying | Underlying | Units of | Stock that | Other | Other Rights | ||||||||||||||||||||||||
Unexercised | Unexercised | Option | Option | Stock that | Have Not | Rights That | That Have | ||||||||||||||||||||||
Options (#) | Options (#) | Exercise | Expiration | Have Not | Vested | Have Not | Not Vested | ||||||||||||||||||||||
Name | Exercisable | Unexercisable | Price ($) | Date | Vested (#) | ($)(1) | Vested (#)(2) | ($)(1) | |||||||||||||||||||||
Stephen R. Rizzone | 155,075 | 120,614 | (3) | 1.68 | 12/12/23 | 246,226 | (5) | 1,947,648 | 622,715 | 4,925,676 | |||||||||||||||||||
279,307 | 217,239 | (4) | 6.00 | 03/27/24 | 8,180 | (6) | 64,704 | ||||||||||||||||||||||
Cesar Johnston | 87,500 | (7) | 692,125 | 124,543 | 985,135 | ||||||||||||||||||||||||
1,636 | (6) | 12,941 | |||||||||||||||||||||||||||
Brian Sereda | 120,000 | (8) | 949,200 | 62,272 | 492,572 | ||||||||||||||||||||||||
818 | (6) | 6,470 |
Employment Agreements and Change of Control Arrangements
Employment Agreements
The following is a summary of the employment arrangements with our named executive officers.
Stephen Rizzone. We entered into an amended and restated employment agreement with Stephen Rizzone, our President, Chief Executive Officer and Chairman of our Board of Directors, effective January 1, 2015. The employment agreement has an initial term of four years (the “Initial Employment Period”) and provides for an annual base salary of $365,000. Mr. Rizzone is eligible to receive quarterly cash bonuses with a total target amount equal to 100% of his base salary based upon achievement of performance-based objectives established by our Board of Directors. Pursuant to Mr. Rizzone’s previous employment agreement, on December 12, 2013 he was granted a ten year option to purchase 275,689 shares of common stock at an exercise price of $1.68 which vests over four years in 48 equal monthly installments beginning October 1, 2013. In connection with the consummation of our initial public offering, Mr. Rizzone was granted a second option award to purchase 496,546 shares of common stock at an exercise price of $6.00. The second option award vests over the same vesting schedule as Mr. Rizzone’s December 2013 option award.
Pursuant to the employment agreement, Mr. Rizzone received a grant of 639,075 performance share units (the “PSUs”). See the description of the PSUs under “Performance Share Unit Awards below.
The employment agreement provides that if Mr. Rizzone’s employment is terminated due to his death or disability, if Mr. Rizzone’s employment is terminated by the Company without cause or if Mr. Rizzone resigns for good reason, 25% of the shares subject to the option awards described above shall immediately vest and become exercisable, he will have a period of one year post-termination to exercise such options, and if a Liquidation Event (as defined below) shall occur prior to the termination of the option awards described above, 100% of the shares subject to such option awards shall immediately vest and become exercisable effective immediately prior to the consummation of the Liquidation Event. In addition, any outstanding deferred PSUs shall be immediately vested and paid, but any remaining unearned portion of the PSUs shall immediately be canceled and forfeited.
If Mr. Rizzone’s employment is terminated due to his death or disability, Mr. Rizzone’s beneficiaries or estate will be entitled to receive (a) an amount equal to one times the sum of (i) his base salary plus (ii) the target amount of his performance bonus for the year of termination, plus (b) any base salary that as shall have accrued but remain unpaid.
If Mr. Rizzone’s employment is terminated by the Company without cause or if he resigns for good reason, the Company shall pay him (a) an amount equal to two times the sum of (i) his base salary plus (ii) the target amount of his performance bonus for the year of termination, payable in substantially equal installments on a payroll period basis during the twenty-four (24) month period immediately following such termination of employment; (b) an amount equal to two years of COBRA premiums based on the terms of Company’s group health plan and Mr. Rizzone’s coverage under such plan as of the date of such termination of employment (regardless of any COBRA election actually made by him or the actual COBRA coverage period under Company’s group health plan), payable in payroll period installments on the same basis as the amount in clause (a) above; and (c) a performance bonus for the year of termination based on actual performance and prorated based on the number of days in the performance year through the date of such termination of employment, payable in cash at the same time bonuses are paid to other employees of Company for such performance year but not later than March 15 of the following year. In addition, any remaining unearned portion of the PSUs shall be immediately canceled and forfeited, and any other outstanding, unvested time-based equity awards other than the option awards described above shall immediately vest to the extent such award was scheduled to vest during the two-year period immediately following such termination of employment.
If Mr. Rizzone resigns without good reason or is terminated by the Company for cause, he will be entitled to his base salary at the rate then in effect up to and through the effective date of his resignation or termination. In addition, upon such termination of employment, all deferred PSUs and any remaining unearned portion of the PSUs shall be immediately canceled and forfeited.
In connection with Mr. Rizzone’s entry into his employment agreement, he also entered into a Non-Competition and Non-Solicitation Agreement with the Company, which prohibits him from competing with the Company and soliciting clients, customers, business partners or employees from the Company for a two-year restricted period in the event of the termination of his employment with the Company for any reason within two years after a transaction resulting in a Liquidation Event (as defined below) or the sale or disposal of all of his ownership interest in the Company. For purposes of Mr. Rizzone’s employment agreement, a Liquidation Event means a merger, acquisition, consolidation or other transaction (other than an equity financing) following which our stockholders prior to such transaction hold less than fifty percent (50%) of our outstanding voting securities of the acquiring or surviving entity, or a sale, license or transfer of all or substantially all of our assets.
Mr. Rizzone is also eligible to receive benefits that are substantially similar to those of the Company’s other senior executive officers. Mr. Rizzone is subject to certain restrictive covenants, including non-solicitation of employees, consultants and customers and non-competition each for a period one year following termination of his employment with the Company.
Michael Leabman. We entered into an employment agreement with Michael Leabman, our Chief Technology Officer, effective October 1, 2013. The employment agreement has no specific term and constitutes at-will employment. Mr. Leabman’s current annual base salary is $250,000, and he is eligible for an annual performance based bonus award of up to 20% of his base salary based upon achievement of performance-based objectives established by our Chief Executive Officer and board of directors. Pursuant to Mr. Leabman’s employment agreement, in January 2013, he was granted a ten year option to purchase 57,644 shares of common stock at an exercise price of $2.49 that vested 3/48ths on the date of grant, and will vest 1/48th monthly over the following 45 months. In connection with the consummation of our initial public offering, Mr. Leabman was granted a second option award to purchase 251,474 shares of common stock at an exercise price of $6.00. The second option award vests over the same vesting schedule as Mr. Leabman’s initial option award.
If Mr. Leabman’s employment is terminated due to his death or disability, by the Company without cause or if Mr. Leabman resigns for good reason, Mr. Leabman will be entitled to receive (i) one year of his base salary at the rate then in effect, (ii) a performance bonus equal to the total performance bonuses paid to Mr. Leabman in the calendar year immediately preceding Mr. Leabman’s termination or resignation (iii) reimbursement of Mr. Leabman’s cost of COBRA coverage for one year, and (iv) 25% of the options to purchase shares of common stock subject to Mr. Leabman’s option awards described above will vest immediately and become exercisable, and, along with any previously vested and unexercised options, may be exercised by Mr. Leabman within one year following his termination or resignation. However, if a Liquidation Event (as defined above) shall occur within one year of Mr. Leabman’s termination without cause or his resignation for good reason, all of Mr. Leabman’s options to purchase shares of common stock pursuant to the option awards described above will vest immediately and become exercisable.
In addition to those benefits described above, if Mr. Leabman’s employment is terminated by the Company without cause or he resigns for good reason within 18 months of a Liquidation Event (as defined above), all of Mr. Leabman’s options to purchase shares of common stock pursuant to the option awards described above will vest immediately and become exercisable. For purposes of Mr. Leabman’s employment agreement, a Liquidation Event has the same meaning as in Mr. Rizzone’s employment agreement.
If Mr. Leabman resigns without good reason, he will be entitled to his base salary at the rate then in effect up to and through the effective date of his resignation, along with any unreimbursed reasonable, out-of-pocket business expenses incurred by Mr. Leabman in the performance of his duties.
Mr. Leabman is also eligible to receive benefits that are substantially similar to those of the Company’s other senior executive officers. Mr. Leabman is subject to certain restrictive covenants, including non-solicitation of employees, consultants and customers and non-competition each for a period one year following termination of his employment with the Company.
Cesar Johnston. Mr. Johnston, our Senior Vice President of Engineering, is employed pursuant to an offer letter dated JulyPROPOSAL 3 2014. Mr. Johnston’s offer letter provides for a base salary of $250,000, and he is eligible for an annual performance based bonus award of up to 20% of his base salary based upon achievement of performance-based objectives established by our Chief Executive Officer and Board of Directors. Mr. Johnston’s offer letter provided for an initial grant of 100,000 RSUs that vest in four equal annual installments on the first four anniversaries of his start date. Additionally, Mr. Johnston’s offer letter provided for a grant of 20,000 performance based RSUs, which such performance conditions have been achieved. In the event of Mr. Johnston’s death or disability, all vested options that he owns at such time will have an extended expiration date of twelve months from the date of death or effective date of disability. Additionally, Mr. Johnston’s offer letter provides for one year of base salary as severance in the event Mr. Johnston’s relationship is terminated with the Company for any reason other than cause. Additionally, Mr. Johnston’s offer letter provides that if he is terminated following a change in control (other than for cause) before the fourth anniversary of his hire date, he is entitled to be made a consultant to the acquiring company through the fourth anniversary of his hire date at the same total compensation in effect at the time of the acquisition. During this period, the above described RSU awards will continue to vest according to their original schedule.
Brian Sereda. Mr. Sereda, our Vice President and Chief Financial Officer, is employed pursuant to an offer letter dated June 17, 2015. Mr. Sereda’s offer letter provides for a base salary of $250,000, and he is eligible for an annual performance based bonus award of up to $187,500 based upon achievement of performance-based objectives established by our Chief Executive Officer and Board of Directors. Mr. Sereda’s offer letter provided for an initial grant of 120,000 RSUs that vest in four equal annual installments on the first four anniversaries of his start date. In the event that Mr. Sereda is terminated within a year after a change in control (other than for cause), all of Mr. Sereda’s unvested restricted stock units will accelerate. Additionally, Mr. Sereda’s offer letter provides for six months of base salary as severance and the continuation of health coverage under COBRA for six months in the event Mr. Sereda’s employment is terminated for any reason other than cause.
Performance Share Unit Awards
In addition to Mr. Rizzone’s award of PSUs pursuant to his employment agreement, each of Mr. Leabman, Mr. Johnston and Mr. Sereda has received an award of PSUs under our 2015 Performance Share Unit Plan. The PSUs, which represent the right to receive shares of common stock, shall be earned based on our achievement of market capitalization growth between the award grant date and the earliest of the award recipient’s separation from service, a Liquidation Event (as defined in the description of Mr. Rizzone’s employment agreement above) and December 31, 2018. If the Company’s market capitalization is $100 million or less, no PSUs will be earned. If the Company reaches a market capitalization of $1.1 billion or more, 100% of the PSUs will be earned. For market capitalization between $100 million and $1.1 billion, the percentage of PSUs earned will be determined on a quarterly basis based on straight line interpolation. PSUs earned as of the end of a calendar quarter will be paid 50% immediately and 50% will be deferred until December 31, 2018 subject to the award recipient’s continued employment with the Company.
Director Compensation
In December 2015, we adopted a non-employee director compensation policy pursuant to which our non-employee directors receive on an annual basis a $50,000 retainer paid in cash and an annual equity award with a value of $75,000. The equity award consists of a restricted stock unit grant made on the first trading day following December 31 of each year covering a number of shares of common stock equal to $75,000 divided by the closing price of our common stock on such date that vests in full on the one year anniversary of grant. The Chairman of the Board, if independent, is granted an additional 25,000 restricted stock units on the first trading day following December 31 of each year that vests in full on the one year anniversary of grant. The Chairman of the Board, lead independent director (if the Chairman of the Board is not independent) and committee members receive additional annual cash compensation as follows:
Chairman of the Board | $ | 50,000 | ||
Lead Independent Director: | $ | 25,000 | ||
Audit Committee Chair: | $ | 20,000 | ||
Audit Committee Member: | $ | 10,000 | ||
Compensation Committee Chair: | $ | 15,000 | ||
Compensation Committee Member: | $ | 5,000 | ||
Corporate Governance and Nominating Committee Chair: | $ | 10,000 | ||
Corporate Governance and Nominating Committee Member: | $ | 5,000 |
A director may elect to receive all or any portion of the cash consideration or restricted stock units payable under the non-employee director compensation policy in deferred stock units.
Grants made under the non-employee director compensation policy are made pursuant to the 2014 Non-Employee Equity Compensation Plan. Mr. Rizzone and Mr. Leabman receive no compensation for their service on our Board or Directors.
The following table sets forth information with respect to compensation earned by or awarded to each of our non-employee Directors who served on our Board during the fiscal year ended December 31, 2015:
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($)(2) | Total ($) | ||||||||||||
John R. Gaulding | 132,651 | 332,219 | 464,870 | |||||||||||||
Martin Cooper | 25,000 | 121,219 | 130,000 | 276,219 | ||||||||||||
Robert J. Griffin | 71,099 | 133,719 | 204,818 | |||||||||||||
Rex S. Jackson | 70,549 | 133,719 | 204,268 | |||||||||||||
Nicolaos G. Alexopoulos | 27,500 | 50,000 | 77,500 |
The following table shows the number of shares subject to outstanding option awards, shares subject to outstanding time-based restricted stock unit awards and shares subject to outstanding performance-based restricted stock unit awards held by each non-employee director as of December 31, 2015:
Name | Shares Subject to Outstanding Stock Awards (#) | Shares Subject to Outstanding Stock Option Awards (#) | ||||||
John R. Gaulding | 96,498 | 19,013 | ||||||
Martin Cooper | 45,578 | - | ||||||
Robert J. Griffin | 44,911 | 25,979 | ||||||
Rex S. Jackson | 44,911 | 15,768 |
PROPOSAL 2—APPROVAL OF AMENDMENT AND RESTATEMENT OF 2013 THE ENERGOUS CORPORATION 2024
EQUITY INCENTIVE PLAN; APPROVAL OF CODE SECTION 162(m) MATERIAL TERMS
Overview
PLAN
Weequity compensation program, we are asking stockholders to approve the amendment and restatementa new 2024 Equity Incentive Plan (the “2024 Plan”) that would replace all of the 2013 Plan (the “AmendmentPrior Plans for purposes of new awards to our employees, non-employee directors and Restatement”), which was adopted by theother eligible service providers. The Board of Directors on April 1, 2016,adopted the 2024 Plan, subject to stockholder approval, and which would, among other things:
As noted above, we are also asking stockholders to approve individual award limits and business criteria that can be used in establishing performance goals for performance awards granted under the 2013 Plan, in each case as described in this Proposal 2, for purposes of Code Section 162(m).
Under the 20132024 Plan, the Company has previously reserved 2,335,967 shares of common stock for issuance to employees, officers, non-employee directors, consultantsPrior Plans will be terminated and advisors of the Company, or of any affiliate, as the Compensation Committee may determine and designate from time to time,no further awards will be made under those plans. However, awards currently outstanding under those plans will remain outstanding in the form of incentive stock options (“ISOs”), nonqualified stock options (“NSOs”), SARs, restricted stock units (“RSUs”), restricted stock and other types of equity and cash incentive grants.
In order As of April 15, 2024, 6,082,821 shares of our common stock were outstanding.
The Amendment and Restatement will become effective on May 19, 2016, the date of our 2016 Annual Meeting, if approved by our stockholders, and will remain in effect until May 19, 2026, unless terminated earlier by the Compensation Committee.
However, we anticipate it will be difficult for the Company to meet its anticipated needs based on the remaining share reserves under those plans.
Eligibility
2024 Plan.
The Compensation Committee is also authorized to interpret and construe the Plan and award agreements issued thereunder and to establish such rules and regulations as it determines appropriate for the proper administration of the 2024 Plan.
2024 Plan.
Non-Employee Directors; Other Limits
20132024 Plan and to any outstanding awards, and in the option exercise price, SAR exercise price or purchase price per share of any outstanding awards in order to prevent dilution or enlargement of participant rights under the 20132024 Plan.20132024 Plan to provide that such awards are for new shares. In thesuch event, of any such amendment, the number of shares subject to, and the option exercise price, SAR exercise price or purchase price per share of, the outstanding awards will be adjusted in a fair and equitable manner as determined by the Compensation Committee. The Compensation Committee may also make such adjustments in the terms of any award to reflect or related to, such changes in our capital structure or distributions as it deems appropriate.20132024 Plan permits the granting of any or all of the following types of awards:·Stock Options. Stock options entitle the holder to purchase a specified number of shares of common stock at a specified price (the exercise price), subject to the terms and conditions of the stock option grant. The Compensation Committee may grant either incentive stock options, which must comply with Code Section 422, or nonqualified stock options. The Compensation Committee sets exercise prices and terms and conditions, except that stock options must be granted with an exercise price not less than 100% of the fair market value of our common stock on the date of grant (excluding stock options granted in connection with assuming or substituting stock options in acquisition transactions). Unless the Compensation Committee determines otherwise, fair market value means, as of a given date, the closing price of our common stock. At the time of grant, the Compensation Committee determines the terms and conditions of stock options, including the quantity, exercise price, vesting periods, term (which cannot exceed 10 years) and other conditions on exercise.·Stock Appreciation Rights. The Compensation Committee may grant SARs, as a right in tandem with the number of shares underlying stock options granted under the 2013 Plan or as a freestanding award. Upon exercise, SARs entitle the holder to receive payment per share in stock or cash, or in a combination of stock and cash, equal to the excess of the share’s fair market value on the date of exercise over the grant price of the SAR. The grant price of a tandem SAR is equal to the exercise price of the related stock option and the grant price for a freestanding SAR is determined by the Compensation Committee in accordance with the procedures described above for stock options. Exercise of a SAR issued in tandem with a stock option will reduce the number of shares underlying the related stock option to the extent of the SAR exercised. The term of a freestanding SAR cannot exceed 10 years, and the term of a tandem SAR cannot exceed the term of the related stock option.33·Restricted Stock, Restricted Stock Units and Other Stock-Based Awards. The Compensation Committee may grant awards of restricted stock, which are shares of common stock subject to specified restrictions, and restricted stock units (RSUs), which represent the right to receive shares of our common stock in the future. These awards may be made subject to repurchase, forfeiture or vesting restrictions at the Compensation Committee’s discretion. The restrictions may be based on continuous service with the Company or the attainment of specified performance goals, as determined by the Compensation Committee. Stock units may be paid in stock or cash or a combination of stock and cash, as determined by the Compensation Committee. The Compensation Committee may also grant other types of equity or equity-based awards subject to the terms and conditions of the 2013 Plan and any other terms and conditions determined by the Compensation Committee.·Performance Awards. The Compensation Committee may grant performance awards, which entitle participants to receive a payment from the Company, the amount of which is based on the attainment of performance goals established by the Compensation Committee over a specified award period of at least one year. Performance awards may be denominated in shares of common stock or in cash, and may be paid in stock or cash or a combination of stock and cash, as determined by the Compensation Committee. Cash-based performance awards include annual incentive awards.
change permitted under the 2024 Plan.
Clawback
Performance-Based Compensation under Section 162(m)
Performance Goals and Criteria. Under Code Section 162(m), we may be prohibited from deducting compensation paid to our principal executive officer and our three other most highly compensated executive officers (other than our principal financial officer) in excess of $1 million per person in any year. However, compensation that qualifies as “performance-based” is not subject to the $1 million limit.
If the Compensation Committee intends to qualify an award under the 2013 Plan as “performance-based” compensation under Code Section 162(m), the performance goals selected by the Compensation Committee may be based on the attainment of specified levels of one, or any combination, of the following performance criteria for the Company on a consolidated basis, and/or specified subsidiaries or business units, as reported or calculated by the Company (except with respect to the total stockholder return and earnings per share criteria):
The Compensation Committee can also select any derivations of these business criteria (e.g., income will include pre-tax income, net income, operating income).
Performance goals may, in the discretion of the Compensation Committee, be established on a Company- wide basis, or with respect to one or more business units, divisions, subsidiaries or business segments, as applicable. Performance goals may be absolute or relative to the performance of one or more comparable companies or indices.
The Compensation Committee may determine at the time that the performance goals are established the extent to which measurement of performance goals may exclude the impact of charges for restructuring, discontinued operations, extraordinary items, debt redemption or retirement, asset write downs, litigation or claim judgments or settlements, acquisitions or divestitures, foreign exchange gains and losses and other extraordinary, unusual or non-recurring items, and the cumulative effects of tax or accounting changes (each as defined by generally accepted accounting principles and as identified in the Company’s financial statements or other SEC filings).
In addition, compensation realized from the exercise of options and SARs granted under the 2013 Plan is intended to meet the requirements of the performance-based compensation exception under Code Section 162(m). These awards must have an exercise price equal at least to fair market value at the date of grant, are granted to covered individuals by a Compensation Committee consisting of at least two outside directors, and the 2013 Plan limits the number of shares that may be the subject of awards granted to any individual during any calendar year.
Limitations. Subject to certain adjustments for changes in our corporate or capital structure described above, participants who are granted awards intended to qualify as “performance-based” compensation under Code Section 162(m) may not be granted stock options or SARs for more than 2,000,000 shares in any calendar year or more than 2,000,000 shares for all share-based awards that are performance awards in any calendar year. The maximum dollar value granted to any participant pursuant to that portion of a cash award granted under the 2013 Plan for any calendar year to any employee that is intended to satisfy the requirements for “performance-based compensation” under Code Section 162(m) may not exceed $1.0 million for an annual incentive award and $1.0 million for all other cash-based awards.
Stockholders are being asked in this Proposal 2 to approve the foregoing material terms described under the heading “Performance-Based Compensation under Section 162(m)” for purposes of Code Section 162(m).
New Plan Benefits
EQUITY COMPENSATION PLAN INFORMATION
We maintain the following equity compensation plans under which our equity securities are authorized for issuance to our employees and/or directors: the 2013 Equity Incentive Plan, the 2014 Non-Employee Equity Compensation Plan, the 2015 Employee Stock Purchase Plan and the 2015 Performance Share Unit Plan. Each of the foregoing equity compensation plans was approved by our stockholders. The following table presents information about these plans as of December 31, 2015.
Number of | ||||||||||||
securities | ||||||||||||
remaining | ||||||||||||
Number of | Weighted | available for | ||||||||||
securities to be | average | future issuance | ||||||||||
issued upon | exercise price | under equity | ||||||||||
exercise of | of outstanding | compensation | ||||||||||
outstanding | options, | plans (excluding | ||||||||||
options, warrants | warrants and | securities | ||||||||||
Plan Category | and rights | rights | outstanding) | |||||||||
Equity compensation plans approved by security holders | 3,996,826 | (1) | $ | 4.73 | (2) | 354,586 | (3) | |||||
Equity compensation plans not approved by security holders | 997,599 | (4) | $ | 3.63 | (2) | None | ||||||
Total | 4,994,425 | $ | 4.71 | (2) | 354,586 |
Federal Income Tax Information
Long-term capital gains of non-corporate taxpayers are generally taxed at preferred tax rates. The deductibility of capital losses is subject to limitations.
participant’s holding period in the shares was more than one year. Long-term capital gains of non-corporate taxpayers are generally taxed at preferred rates. The deductibility of capital losses is subject to limitations.
Stock Appreciation Rights. A participant generally will not recognize taxable income upon the grant or vesting of a SAR with a grant price at least equal to the fair market value of our common stock on the date of grant and no additional deferral feature. Upon the exercise of a SAR, a participant generally will recognize compensation taxable as ordinary income in an amount equal to the difference between the fair market value of the shares underlying the SAR on the date of exercise and the grant price of the SAR.
The affirmative vote
Board Recommendation
The Board recommends that the stockholders vote FOR approval of the Amendment and Restatement of the 2013 Plan and FOR approval of the material terms of the 2013 Plan for Code Section 162(m) purposes.
| OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” APPROVAL OF THE ENERGOUS CORPORATION 2024 EQUITY INCENTIVE PLAN. | | |
Overview
at our 2015 annual meeting, and was subsequently amended and restated with stockholder approval at our 2021 and 2023 annual meetings.
an increase |
Under the Non-employee Plan, the Company has previously reserved 250,000 shares of common stock for issuance to non-employee directors, consultants and advisors of the Company, or of any affiliate, as the Compensation Committee may determine and designate from time to time, in the form of nonqualified stock options (“NSOs”), SARs, restricted stock units (“RSUs”), restricted stock and other types of equity and cash incentive grants.
The Board of Directors and the Compensation Committee believe that the Non-employee Plan is a key part of the Company’s compensation philosophy and programs. Our ability to attract, retain and motivate highly qualified non-employee directors, consultants and advisors is critical to our success. The Board and the Compensation Committee believe that the interests of the Company and its stockholders will be advanced if we can continue to offer our non-employee directors, consultants and advisors the opportunity to acquire or increase a direct proprietary interest in the operations and future success of the Company.
As of March 31, 2016, 69,939 shares of common stock remained reserved for issuance pursuant to awards under the Non-employee Plan.
In order to increase the pool of shares available for future equity award grants to continue to operate our compensation program in a manner consistent with past practices and to accommodate anticipated growth, the Board of Directors has adopted, subject to stockholder approval, the amendment and restatement of the Non-employee Plan, to add 350,000 shares of common stock to the pool of shares available for equity awards. We currently anticipate that if such amendment and restatement is approved, the number of shares reserved for awards underissuance by 6,200 shares, from 102,500 shares currently to 108,700 shares. All share numbers in this proposal and the Non-employee Plan will be sufficientESPP have been adjusted to cover our equity awards forreflect the next two to three years.
The amended and restated Non-employee Plan will become effective on May 19, 2016,Reverse Stock Split. Under the datecurrent ESPP, as of April 15, 2024, 14,716 shares of our 2016 Annual Meeting, if approvedcommon stock remained available for purchase by our stockholders,employees.
Corporate Governance AspectsSection 423 of the Non-employee Plan
Internal Revenue Code of 1986 (the “Code”).
Material Features of the Non-employee Plan, as Amended and Restated
Eligibility
Awards may be granted under the Non-employee Plan to non-employee directors, consultants and advisors of the Company and its affiliates. As of March 31, 2016, approximately four individuals were eligible to receive awards under the Non-employee Plan.
Administration
The Non-employee Plan may be administered by the Board or the Compensation Committee. The Compensation Committee, in its discretion, selects the individuals to whom awards may be granted, the time or times at which such awards are granted and the terms and conditions of such awards.
Number of Authorized Shares
The number ofpurchase shares of common stock authorized for issuance under the Non-employee Plan is 600,000 shares, representing approximately 3% of the fully diluted Company common stock outstanding as of March 31, 2016. The shares of common stock issuable under the Non-employee Plan will consist of authorized and unissued shares, treasury shares or shares purchased on the open market or otherwise.
If any award is canceled, terminates, expires or lapses for any reason prior to the issuance of shares or if shares are issued under the Non-employee Plan and thereafter are forfeited to the Company, the shares subject to such awards and the forfeited shares will not count against the aggregate number of shares of common stock available for grant under the Non-employee Plan. In addition, the following items will not count against the aggregate number of shares of common stock available for grant under the Non-employee Plan: (1) the payment in cash of dividends or dividend equivalents under any outstanding award, (2) any award that is settled in cash rather than by issuance of shares of common stock, (3) shares surrendered or tendered in payment of the option price or purchase price of an award or any taxes required to be withheld in respect of an award or (4) awards granted in assumption of or in substitution for awards previously granted by an acquired company.
Awards to Non-employee Directors
The maximum value of plan awards granted during any calendar year to any non-employee director, taken together with any cash fees paid to such non-employee director during the calendar year and the value of awards granted to the non-employee director under any other equity compensation plan of the Company or an affiliate during the calendar year, may not exceed the following in total value (calculating the value of any equity compensation plan awards based on the grant date fair value for financial reporting purposes): (i) $500,000 for the Chair of the Board and (ii) $300,000 for each non-employee director other than the Chair of the Board. However, awards granted to non-employee directors upon their initial election to the Board or the board of directors of an affiliate will not be counted towards this limit. Any awards that are scheduled to vest over a period of more than one calendar year shall be applied pro rata for purposes of the foregoing limit based on the number of years over which such awards are scheduled to vest.
Adjustments
Subject to any required action by our stockholders, in the event of any change in our common stock effected without receiptat a purchase price equal to 85% of consideration by us, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combinationthe lesser of shares, exchange of shares or similar change in our capital structure, or in the event of payment of a dividend or distribution to our stockholders in a form other than our common stock (excepting normal cash dividends) that has a material effect on the fair market value of our common stock appropriateat the start of an offering period and proportionate adjustments will beat the end of the offering period. Purchases are made inwith payroll contributions. For purposes of the number and classESPP, each participant is deemed to have been granted an “option” to purchase shares of sharesour common stock at the beginning of an offering period, subject to the Non-employee Planterms of the ESPP.
If a majority of our common shares are exchanged for, converted into, or otherwise become shares of another corporation,ESPP, the Compensation Committee may unilaterally amend outstanding awards under the Non-employee Plan to provide that such awards are for new shares. In the event of any such amendment,will equitably adjust the number of shares subject to, and class of common stock that may be delivered under the option exercise price, SAR exercise price orESPP, the purchase price per share, the number of shares covered by each outstanding option under the outstanding awards will be adjusted in a fairESPP, and equitable manner asthe limit on the number of shares that can purchased each offering period.
Types of Awards
The Non-employee Plan permits the granting of any or all of the following types of awards:
No Repricing
Without stockholder approval, the Compensation Committee is not authorized to (1) lower the exercise or grant priceevent of a stock optionproposed dissolution or SAR after it is granted, except in connection with certain adjustments to our corporate or capital structure permitted by the Non-employee Plan, such as stock splits, (2) take any other action that is treated as a repricing under generally accepted accounting principles or (3) cancel a stock option or SAR at a time when its exercise or grant price exceeds the fair market value of the underlying stock, in exchange for cash, another stock option or SAR, restricted stock, RSUs or other equity award, unless the cancellation and exchange occur in connection with a change in capitalization or other similar change.
Forfeitures
The grant of any award under the Non-employee Plan may be contingent upon the participant executing the appropriate award agreement. The Company may retain the right in an award agreement to cause a forfeiture of the gain realized by a participant on account of actions taken by the participant in violation or breach of or in conflict with any service agreement, non-competition agreement, any agreement prohibiting solicitation of employees or clientsliquidation of the Company, or any affiliate or any confidentiality obligation with respect to the Company or any affiliate, or otherwiseoffering period then in competition with the Company or any affiliate, to the extent specified in the award agreement applicable to the participant. Furthermore, the Company may annul an award if the participant is terminated for cause.
Clawback
All awards, amounts or benefits received or outstanding under the Non-employee Planprogress will be subject to clawback, cancellation, recoupment, rescission, payback, reductionshortened by setting a new purchase date and the offering period will end immediately before the proposed dissolution or other similar action in accordance with the terms of any Company clawback or similar policy or any applicable law related to such actions, as may be in effect from time to time. A participant’s acceptance of an award under the Non-employee Planliquidation. The new purchase date will be deemed to constitutebefore the participant’s acknowledgementdate of and consent to the Company’s application, implementation and enforcement of any applicable Company clawbackproposed dissolution or similar policy that may apply to the participant, and any provision of applicable law relating to clawback, cancellation, recoupment, rescission, payback or reduction of compensation, and the participant’s agreement that the Company may take such actions as may be necessary to effectuate any such policy or applicable law, without further consideration or action.
Transferability
Awards are not transferable other than by will or the laws of descent and distribution, except that in certain instances transfers may be made to or for the benefit of designated family members of the participant for no value.
Change in Control
liquidation.
Additionally, the Compensation Committee may, without participant consent, determine that upon the occurrence of a change in control each or any award outstanding under the Non-employee Plan immediately prior to the change in control and not previously exercised or settled will be canceled in exchange for a payment with respect to each vested share (and each unvested share, if so determined by the Compensation Committee) subject to the canceled award in (1) cash, (2) our stock or stock of a corporation or other business entity a party to the change in control or (3) other property that will be in an amount having a fair market value equal to the fair market value of the consideration to be paid per share of our common stock in the change in control, reduced by the exercise or purchase price per share, if any, under such award.
Term, Termination and Amendment of the Non-employee Plan
Unless earlier terminated by the Board, the Non-employee Plan will terminate, and no further awards may be granted, 10 years after the date on which it is most recently approved by stockholders. The Board mayits sole discretion, amend, suspend, or terminate the Non-employee PlanESPP at any time exceptand for any reason. If the ESPP is terminated, the Compensation Committee may elect to terminate all outstanding offering periods either immediately or once shares of common stock have been purchased on the next purchase date (which may, in the discretion of the Compensation Committee, be accelerated) or permit offering periods to expire in accordance with their terms. If any offering period is terminated before its scheduled expiration, all amounts that if required by applicable law, regulation orhave not been used to purchase shares of common stock exchange rule, stockholder approval will be required for any amendment. The amendment, suspension or termination of the Non-employee Plan or the amendment of an outstanding award generally may not, without a participant’s consent, materially impair the participant’s rights under an outstanding award.
returned to participants as soon as administratively practicable.
A new plan benefits table for
executive officers as a group.
Name and Position | | | Number of Shares Purchased | | |||
Named executive officers and current executive officers as a group | | | | | — | | |
Non-executive employees as a group | | | | | 20,366 | | |
Nonqualified Stock Options. ATax Effects for Participants. The amounts deducted from a participant’s pay under the ESPP will be included in his or her compensation that is subject to federal income taxes, and the Company will withhold taxes on these amounts. Generally, a participant generally will not recognize any taxable income (1) when options are granted pursuant to the ESPP, (2) when the shares of our common stock are purchased under the ESPP or (3) at the beginning or end of any offering period.
| | OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE ENERGOUS CORPORATION EMPLOYEE STOCK PURCHASE PLAN | | |
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 plan (excluding securities outstanding) | | |||||||||
Equity compensation plans approved by security holders | | | | | 38,025(1) | | | | | $ | 25.40(2) | | | | | | 256,911(3) | | |
Equity compensation plans not approved by security holders | | | | | 48,709(4) | | | | | $ | —(2) | | | | | | 51,084(5) | | |
Total | | | | | 86,734 | | | | | $ | 25.40(2) | | | | | | 307,995 | | |
Name and Address of Beneficial Owner | | | Number of Shares Beneficially Owned | | | Percentage of Class | | ||||||
Current Directors and Executive Officers | | | | | | | | | | | | | |
Rahul Patel | | | | | 3,659 | | | | | | * | | |
J. Michael Dodson | | | | | 4,236 | | | | | | * | | |
David Roberson | | | | | 4,236 | | | | | | * | | |
Cesar Johnston(1) | | | | | 94,668(4) | | | | | | 1.6% | | |
Mallorie Burak | | | | | — | | | | | | * | | |
Former Executive Officers | | | | | | | | | | | | | |
William Mannina(2) | | | | | 9,093 | | | | | | * | | |
Susan Kim-van Dongen(3) | | | | | — | | | | | | * | | |
All current directors and all executive officers as a group (5 persons) | | | | | 106,799 | | | | | | 1.8% | | |
Five Percent Stockholders | | | | | | | | | | | | | |
None | | | | | — | | | | | | — | | |
Name | | | Age | | | Position | |
Mallorie Burak | | | 53 | | | Chief Financial Officer and Interim Principal Executive Officer | |
Name and Principal Position | | | Year | | | Salary | | | Bonus(1) | | | Stock Awards ($)(2) | | | Stock Option Awards ($)(3) | | | All Other Compensation(4) | | | TOTAL | | |||||||||||||||||||||
Cesar Johnston Former Chief Executive Officer(4) | | | | | 2023 | | | | | $ | 400,000 | | | | | $ | 186,750 | | | | | $ | 15,500 | | | | | | — | | | | | $ | — | | | | | $ | 602,500 | | |
| | | 2022 | | | | | $ | 400,000 | | | | | $ | 480,000 | | | | | $ | 381,240 | | | | | $ | 308,460 | | | | | | — | | | | | $ | 1,569,700 | | | ||
William Mannina Former Acting Chief Financial Officer(5) | | | | | 2023 | | | | | $ | 192,805 | | | | | $ | 69,580 | | | | | $ | — | | | | | | — | | | | | $ | 259,257 | | | | | $ | 521,642 | | |
| | | 2022 | | | | | $ | 253,267 | | | | | $ | 202,901 | | | | | $ | 92,700 | | | | | $ | — | | | | | | — | | | | | $ | 548,868 | | | ||
Susan Kim-van Dongen Former Acting Chief Financial Officer(6) | | | | | 2023 | | | | | $ | 291,200 | | | | | $ | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | $ | 291,200 | | |
| | | 2022 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | | — | | | | | $ | — | | |
| | | Options Awards | | | Stock Awards | | ||||||||||||||||||||||||||||||
Name | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock that Have Not Vested (#) | | | Market Value of Shares or Units of Stock that Have Not Vested ($)(1) | | ||||||||||||||||||
Cesar Johnston | | | | | 7,500 | | | | | | 7,500(2) | | | | | $ | 25.40 | | | | | | 12/5/2031 | | | | | | 1,142(3) | | | | | $ | 2,090 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,875(4) | | | | | | 3,431 | | |
William Mannina | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Susan Kim-van Dongen | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Stock Appreciation Rights. A participant generally will not recognize taxable income upon the grant or vesting of a SAR with a grant price at least equal to the fair market value of our common stock on the date of grant and no additional deferral feature. Upon the exercise of a SAR, a participant generally will recognize compensation taxable as ordinary income inhis monthly base salary plus an amount equal to 100% of his target bonus plus, if agreed by the differenceCompensation Committee, a discretionary bonus for the year in which the termination occurs, (b) any outstanding unvested equity awards held by Mr. Johnston that would vest in the next 18 months of continuing employment (other than any equity awards that vest upon satisfaction of performance criteria) will accelerate and become vested and (c) if Mr. Johnston timely elects continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company or its successor will pay the full amount of Mr. Johnston’s COBRA premiums on his behalf for 18 months. Mr. Johnston will receive the amounts set forth above in connection with his termination of service as Chief Executive Officer in March 2024.
Year(1) | | | Summary Compensation Table Total for Cesar Johnston ($) | | | Summary Compensation Table Total for Stephen R. Rizzone ($) | | | Compensation Actually Paid for Cesar Johnston ($)(2) | | | Compensation Actually Paid for Stephen R. Rizzone ($)(2) | | | Average Summary Compensation Table Total for Non-PEO NEOs ($) | | | Average Compensation Actually Paid to Non-PEO NEOs ($)(2) | | | Value of Initial Fixed $100 Investment Based on Total Shareholder Return ($) | | | Net Loss ($) | | ||||||||||||||||||||||||
2023 | | | | | 565,500 | | | | | | — | | | | | | 583,450 | | | | | | — | | | | | | 812,842 | | | | | | 826,227 | | | | | | 5.08 | | | | | | (19,366,763) | | |
2022 | | | | | 1,569,700 | | | | | | — | | | | | | 1,267,331 | | | | | | — | | | | | | 986,059 | | | | | | 873,418 | | | | | | 46.44 | | | | | | (26,275,260) | | |
2021 | | | | | 1,154,639 | | | | | | 4,059,578 | | | | | | 807,465 | | | | | | 4,205,821 | | | | | | 2,085,394 | | | | | | 1,336,448 | | | | | | 69.44 | | | | | | (41,427,293) | | |
Year | | | PEOs | | | Non-PEO NEOs | |
2023 | | | Cesar Johnston | | | William Mannina, Susan Kim-van Dongen | |
2022 | | | Cesar Johnston | | | William Mannina, Neeraj Sahejpal | |
2021 | | | Cesar Johnston, Stephen R. Rizzone | | | William Mannina, Neeraj Sahejpal, Brian Sereda | |
Year | | | Summary compensation table total for Cesar Johnston ($) | | | Reported value of equity awards for Cesar Johnston(1) ($) | | | Fair value as of year- end for awards granted during the year ($) | | | Fair value year-over- year increase or decrease in unvested awards granted in prior years ($) | | | Fair value of awards granted and vested during the year ($) | | | Fair value increase or decrease from prior year end for awards that vested during the year ($) | | | Fair value of awards granted in prior years that are determined to fail to meet the applicable vesting conditions (forfeited awards) ($) | | | Compensation actually paid to Cesar Johnston ($) | | ||||||||||||||||||||||||
2023 | | | | | 565,500 | | | | | | (15,500) | | | | | | — | | | | | | 10,113 | | | | | | 2,059 | | | | | | 21,278 | | | | | | — | | | | | | 583,450 | | |
2022 | | | | | 1,569,700 | | | | | | (689,700) | | | | | | 278,600 | | | | | | (47,243) | | | | | | 162,341 | | | | | | 2,633 | | | | | | — | | | | | | 1,276,331 | | |
2021 | | | | | 1,154,639 | | | | | | (805,746) | | | | | | 135,497 | | | | | | (11,178) | | | | | | 246,311 | | | | | | 87,942 | | | | | | — | | | | | | 807,465 | | |
Year | | | Summary compensation table total for Stephen R. Rizzone ($) | | | Reported value of equity awards for Stephen R. Rizzone(1) ($) | | | Fair value as of year-end for awards granted during the year ($) | | | Fair value year-over- year increase or decrease in unvested awards granted in prior years ($) | | | Fair value of awards granted and vested during the year ($) | | | Fair value increase or decrease from prior year end for awards that vested during the year ($) | | | Compensation actually paid to Stephen R. Rizzone ($) | | |||||||||||||||||||||
2023 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
2021 | | | | | 4,059,578 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 146,243 | | | | | | 4,205,821 | | |
Year | | | Average summary compensation table total for Non-PEO NEOs ($) | | | Reported value of equity awards for NEOs(1) ($) | | | Fair value as of year- end for awards granted during the year ($) | | | Fair value year-over- year increase or decrease in unvested awards granted in prior years ($) | | | Fair value of awards granted and vested during the year ($) | | | Fair value increase or decrease from prior year end for awards that vested during the year ($) | | | Fair value of awards granted in prior years that are determined to fail to meet the applicable vesting conditions (forfeited awards) ($) | | | Average compensation actually paid to NEOs ($) | | ||||||||||||||||||||||||
2023 | | | | | 812,842 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 16,102 | | | | | | (2,717) | | | | | | 826,227 | | |
2022 | | | | | 986,059 | | | | | | (69,525) | | | | | | 56,430 | | | | | | (20,959) | | | | | | — | | | | | | (78,587) | | | | | | — | | | | | | 873,418 | | |
2021 | | | | | 2,085,394 | | | | | | (1,464,494) | | | | | | 198,364 | | | | | | (12,933) | | | | | | 415,205 | | | | | | 114,912 | | | | | | — | | | | | | 1,336,448 | | |
Restricted Stock Awards, Restricted Stock Units, and Performance Awards. A participant generally will not have taxable income upon the grant of restricted stock, RSUscompensation actually paid to our Non-PEO NEOs, with our cumulative total shareholder return, or performance awards. Instead, the participant will recognize ordinary income at the time of vesting or payout equal to the fair market value (on the vesting or payout date) of the shares or cash received minus any amount paid. For restricted stock only, a participant may instead elect to be taxed at the time of grant.
Other Stock or Cash-Based Awards. The U.S. federal income tax consequences of other stock- or cash- based awards will depend upon the specific terms and conditions of each award.
Tax Consequences to the Company. In the foregoing cases, we generally will be entitled to a deduction at the same time, and in the same amount, as a participant recognizes ordinary income, subject to certain limitations imposed under the Code.
Code Section 409A. We intend that awards granted under the Non-employee Plan will comply with, or otherwise be exempt from, Code Section 409A, but make no representation or warranty to that effect.
Tax Withholding. We are authorized to deduct or withhold from any award granted or payment due under the Non-employee Plan, or require a participant to remit to us, the amount of any withholding taxes due in respect of the award or payment and to take such other action as may be necessary to satisfy all obligations for the payment of applicable withholding taxes. We are not required to issue any shares of common stock or otherwise settle an award under the Non-employee Plan until all tax withholding obligations are satisfied.
Vote Required for Approval
The affirmative vote of the holders of a majority of the shares present or represented at the 2016 Annual Meeting, in person or by proxy, and voting on the amendment and restatement of the Non-employee Plan is required to approve the amended and restated Non-employee Plan.
Board Recommendation
The Board recommends that the stockholders vote FOR approval of the amendment and restatement of the Non-employee Plan.
PROPOSAL 4—RATIFICATION OF APPOINTMENT OFINDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has appointed Marcum LLP (“Marcum”) as our independent registered public accounting firmTSR, for the fiscal year endingyears ended December 31, 2016. We are presenting this selection2023, 2022 and 2021. TSR amounts reported in the graph assume an initial fixed investment of $100.
Marcum audited our financial statements for 2015. A representative of Marcum is not expected to be present at the 2016 Annual Meeting.
Vote Required for Approval
Ratificationaverage of the appointment ofcompensation actually paid to our independent registered public accounting firm requiresNon-PEO NEOs, with our net loss, for the affirmative vote of a majority of the shares present or represented at the 2016 Annual Meeting, in person or by proxy,fiscal years ended December 31, 2023, 2022 and voting on such ratification. If our stockholders fail to ratify the selection of Marcum as the independent registered public accounting firm for 2016, the Audit Committee will reconsider whether to retain that firm. Even if the selection is ratified, the Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year.
Board Recommendation
The Board recommends that the stockholders voteFOR ratification of the appointment of Marcum as our independent registered public accounting firm for 2016.
2021.
During the fiscal year ended December 31, 2015, we paid a total of $150,661 to Financial Consulting Strategies LLC (“FCS”).
In February 2014, our Board of Directorshas adopted a written policy with regard to related person transactions, which sets forth our procedures and standards for the review, approval or ratification of any transaction required to be reported in our filings with the SEC or in which one of our executive officers or directors has a direct or indirect material financial interest, with limited exceptions. Our policy is that the Corporate Governance and Nominating Committee shall review the material facts of all related person transactions (as defined in the related person transaction approval policy) and either approve or disapprove of the entry into any related person transaction. In the event that obtaining the advance approval of the Corporate Governance and Nominating Committee is not feasible, the Corporate Governance and Nominating Committee shall consider the related person transaction and, if the Corporate Governance and Nominating Committee determines it to be appropriate, may ratify the related person transaction. In determining whether to approve or ratify a related person transaction, the Corporate Governance and Nominating Committee will take into account, among other factors it deems appropriate, whether the related person transaction is on terms comparable to those available from an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction.
Fee Category | 2015 | 2014 | ||||||
Audit Fees(1) | $ | 162,731 | $ | 187,976 | ||||
Audit-Related Fees(2) | 11,639 | - | ||||||
Tax Fees | - | - | ||||||
All Other Fees | - | - | ||||||
Total | $ | 174,370 | $ | 187,976 |
PRE-APPROVAL POLICIES AND PROCEDURES
financial statements and the reporting process, including the systems of internal controls and the certification of the integrity and reliability of the Company’s internal controls procedures. In fulfilling its oversight responsibilities, the Audit Committee has reviewed the Company’s audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and has discussed them with both management and Marcum LLP (“Marcum”), the Company’s independent registered public accounting firm. The Audit Committee has adopted a policy that requires that all services to be provided byalso discussed with the Company’s independent registered public accounting firm including audit services and permitted non-audit services,the matters required to be pre-approveddiscussed by the Auditing Standard No. 16,
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 19, 2016
Appendix
2013
(AS AMENDED AND RESTATED __________, 2016)
2.1. “Acquiror”
2.2. “Affiliate”
2.3. “Annual
2.4. “Award”
2.5. “Award Agreement”
2.6. “Board”
2.7. “Business Combination”
2.8. “Cause”
2.9. “Change
2.10. “Code”
2.11. “Committee”
2.12. “Company”
2.13. “Common Stock”
2.14. “Consultant”
2.15. “Covered Employee” means a Grantee who is a “covered employee” within the meaning of Section 162(m), as qualified bySection 12.4.
2.16. “Disability”
2.17. “Effective Date”
2.18. “Exchange Act”
2.19. “Fair
2.20. “Family Member”2.20 “Family Member” means a person who is a spouse, former spouse, child, stepchild, grandchild, parent, stepparent, grandparent, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister, brother-in-law or sister-in-law, including adoptive relationships, of the applicable individual,
2.21. “Grant Date”
2.22. “Grantee”
2.23. “Incentive
2.24. “Incumbent Directors”
2.25. “Non-Employee Director”
2.26. “Non-qualified
2.27. “Option”
2.28. “Option Price”
2.29. “Other
2.30. “Performance Award”Stock Awards, or Performance Share Units.
2.31. “Person”Award and Performance Share Units.
2.32. “Plan”
2.33. “Purchase Price”
2.34. “Restricted Period”Stock or a Stock Award.
2.35. “Restricted Stock”
2.36. “Restricted2.39 “Restricted Stock Unit”Unit
2.37. “SAR
2.38. “SEC”
2.39. “Section 162(m)
2.40. “Section 409A”409A.
2.41. “Securities Act” means the United States Securities Act of 1933.
2.42. “Separation
2.43. “Service”
2.44. “Service Provider”
2.45. “Share”
2.46. “Stock
2.47. “Stockholder”
2.48. “Subsidiary”
2.49. “Substitute Award”
2.50. “Ten
2.51. “Termination Date”
2.52. “Voting Securities”
ADMINISTRATION OF THE PLAN 3.1 General |
3.1. General
The Board shall have such powers and authorities related to the administration of the Plan as are consistent with the Company’s certificate of incorporation and bylaws and applicable law. The Board shall have the power and authority to delegate its responsibilities hereunder to the Committee, which shall have full authority to act in accordance with its charter, and with respect to the power and authority of the Board to act hereunder, all references to the Board shall be deemed to include a reference to the Committee, unless such power or authority is specifically reserved by the Board. Except as specifically provided in
Section 14 or as otherwise may be required by applicable law, regulatory requirement or the certificate of incorporation or the bylaws of the Company, the Board shall have full power and authority to take all actions and to make all determinations required or provided for under the Plan, any Award or any Award Agreement, and shall have full power and authority to take all such other actions and make all such other determinations not inconsistent with the specific terms and conditions of the Plan that the Board deems to be necessary or appropriate to the administration of the Plan. The Committee shall administer the Plan;provided that, the Board shall retain the right to exercise the authority of the Committee to the extent consistent with applicable law and the applicable requirements of any securities exchange on which the Common Stock may3.2.
3.3.
3.4.
3.5.
3.6.
STOCK SUBJECT TO THE PLAN 4.1 |
4.1. Authorized Number of Shares
4.2.
Any Shares under a Restricted Stock Award that are repurchased or forfeited to the Company shall similarly again be available for the grant of Awards.
4.3.
75,000 Shares, each limit to apply independently of the other.
For purposes of this Section 4.3.4, the value of any Awards shall be calculated based on the average of the closing trading prices of the Common Stock on the principal stock exchange for such Common Stock during the 30 consecutive trading days immediately preceding the date the Award is granted. 5. EFFECTIVE DATE, DURATION AND AMENDMENTS 5.1 Term |
5.1. Term
The Plan shall be effective as of the Effective Date,
provided that it has been approved by the Stockholders. The Plan shall terminate automatically on the5.2.
awarded; provided that the Awards may be amended without the consent of the Grantee to comply with applicable law or to clarify the manner of exemption from, or to bring an Award into compliance with, Section 409A. 6. AWARD ELIGIBILITY AND LIMITATIONS 6.1 |
6.1. Service Providers
6.2.
6.3.
8. TERMS AND CONDITIONS OF OPTIONS 8.1 |
8.1. Option Price
8.2.
8.3.
8.4.
8.5.
8.6.
8.7.
8.8.
9. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS 9.1 |
9.1. Right to Payment
9.2.
9.3.
9.4.
multiplying (i) the difference between the Fair Market Value on the date of exercise over the SAR Exercise Price; by (ii) the number of Shares with respect to which the SAR is exercised. A-10 10. TERMS AND CONDITIONS OF STOCK AWARDS, RESTRICTED STOCK AND RESTRICTED STOCK UNITS 10.1 |
10.1. Restrictions
10.2.
10.3.
10.4.
10.4.2.
10.4.3. Creditor’s Rights
A holder of RSUs shall have no rights other than those of a general creditor of the Company. RSUs represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Award Agreement.
10.5.
10.6.
11. FORM OF PAYMENT FOR OPTIONS, STOCK AWARDS AND RESTRICTED STOCK 11.1 |
11.1. General Rule
11.2.
11.3.
11.4.
12. TERMS AND CONDITIONS PERFORMANCE SHARE UNITS AND OTHER PERFORMANCE AWARDS 12.1 |
12.1. Performance Conditions
12.2. Performance Awards Granted to Designated Covered Employees
If and to the extent that the Committee determines that a Performance Award to be granted to a Grantee who is designated by the Committee as likely to be a Covered Employee should qualify as “performance-based compensation” for purposes of Section 162(m), the grant, exercise and/or settlement of such Performance Award shall be contingent upon achievement of pre-established performance goals and other terms and conditions set forth in thisSection
12.2.1.
12.2.2.
12.2.3. Timing for Establishing Performance Goals
Performance goals shall be established not later than 90 days after the beginning of any performance period applicable to Performance Awards, or at such other date as may be required or permitted for “performance-based compensation” under Section 162(m).
12.2.4.
12.3.
12.4. Status of Section 12.2 Awards under Section 162(m)
It is the intent of the Company that Performance Awards underSection 12.2 granted to persons who are designated by the Committee as likely to be Covered Employees within the meaning of Section 162(m) shall, if so designated by the Committee, qualify as “performance-based compensation” within the meaning of Section 162(m). Accordingly, the terms and conditions ofSection 12.2, including the definitions of Covered Employee and other terms used therein, shall be interpreted in a manner consistent with Section 162(m). The foregoing notwithstanding, because the Committee cannot determine with certainty whether a given Grantee will be a Covered Employee with respect to a fiscal year that has not yet been completed, the term Covered Employee as used herein shall mean only a person designated by the Committee, at the time of grant of Performance Awards, as likely to be a Covered Employee with respect to that fiscal year or any subsequent fiscal year. If any provision of the Plan or any agreement relating to such Performance Awards does not comply or is inconsistent with the requirements of Section 162(m), such provision shall be construed or deemed amended to the extent necessary to conform to such requirements.
13. other SHARE-based awards
13.1.
13.2.
14.1.
14.2. Section 25102(o) of the California Corporations Code.
The Plan is intended to comply with Section 25102(o) of the California Corporations Code. In that regard, to the extent required by Section 25102(o), (i) the terms of any Options or SARs, to the extent vested and exercisable upon a Grantee’s Separation from Service, shall include any minimum exercise periods following Separation from Service specified by Section 25102(o), and (ii) any repurchase right of the Company with respect to Shares issued under the Plan shall include a minimum 90-day notice requirement. Any provision of the Plan that is inconsistent with Section 25102(o) shall, without further act or amendment by the Company, be reformed to comply with the requirements of Section 25102(o).
14.3.
15.1.
15.2.
(ii) Assumption, Continuation or Substitution. In the event of a Change in Control, the surviving, continuing, successor or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiror”), may, without the consent of any Grantee, either assume or continue the Company’s rights and obligations under each or any Award or portion thereof outstanding immediately prior to the Change in Control or substitute for each or any such outstanding Award or portion thereof a substantially equivalent award with respect to the Acquiror’s stock, as applicable. For purposes of thisSection 15.2, if so determined by the Committee, an Award denominated in Shares shall be deemed assumed if, following the Change in Control, the Award confers the right to receive, subject to the terms and conditions of the Plan and the applicable Award Agreement, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, other securities or property or a combination thereof) to which a holder of a Share on the effective date of the Change in Control was entitled;provided,however, that if such consideration is not solely common stock of the Acquiror, the Committee may, with the consent of the Acquiror, provide for the consideration to be received upon the exercise or settlement of the Award, for each Share subject to the Award, to consist solely of common stock of the Acquiror equal in Fair Market Value to the per share consideration received by Stockholders pursuant to the Change in Control. If any portion of such consideration may be received by Stockholders pursuant to the Change in Control on a contingent or delayed basis, the Committee may determine such Fair Market Value as of the time of the Change
15.2.2.
(ii) A reorganization, merger, consolidation or recapitalization of the Company (a “Business Combination”), other than a Business Combination in which more than 50% of the combined voting power of the outstanding voting securities of the surviving or resulting entity immediately following the Business Combination is held by the Persons who, immediately prior to the Business Combination, were the holders of the Voting Securities; or
15.3.
17.1.
17.2.
17.3.
17.4.
17.5.
17.6.
17.7.Awards granted under the Plan (unless otherwise expressly provided for in the Award Agreement or Committee resolutions approving the Award) are exempt from the requirements of Section 409A
to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treasury Regulation Section 1.409A-1(b)(4), the exclusion applicable to share options, share appreciation rights and certain other equity-based compensation under Treasury Regulation Section 1.409A-1(b)(5) or 1.409A-1(b)(6), or otherwise. The Committee shall use best efforts to interpret, operate and administer the Plan is intended toand any Award granted under the Plan in a manner consistent with this intention. However, the Committee makes no representations that Awards granted under the Plan shall be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to Awards granted under the Plan.
17.8. Award.
17.9.
17.10.
17.11.
The Plan was originally approved by the Board and the Stockholders in December 2013. An amendment of the Plan was subsequently approved by the Board and the Stockholders in March 2014. This
Appendix B
ENERGOUS CORPORATION
2014 NON-EMPLOYEE EQUITY COMPENSATION PLAN
(AS AMENDED AND RESTATED __________, 2016)
18. PURPOSE
TheEmployee Stock Purchase Plan is intended to enhance the Company’s and its Affiliates’ ability to attract and retain highly qualified Non-Employee Directors and Consultants, and to motivate such Non-Employee Directors and Consultants to serveprovide employees of the Company and its Affiliates and to expend maximum effort to improve the business results and earnings of the Company, by providing to such personsParticipating Subsidiaries with an opportunity to acquire or increase a direct proprietary interest in the operationsCompany through the purchase of shares of Common Stock. The Company intends that this Plan qualify as an “employee stock purchase plan” under Code Section 423 and future success of the Company. To this end, the Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, other share-based awards and cash awards. Any of these awards may, but need not, be made as performance incentives to reward attainment of performance goals in accordance with the terms and conditions hereof. Stock options granted under the Plan shall be non-qualified stock options.
interpreted in a manner that is consistent with that intent.
For purposes of interpreting the Plan and related documents (including Award Agreements), the following definitions shall apply:
19.1. “Acquiror”shall have the meaning set forth inSection 15.2.
19.2. “Affiliate” means any company or other trade or business that “controls,
19.3. “Award” means a grant of an Option, SAR, Restricted Stock, RSU, Other Share-based Award or cash award under the Plan.
19.4. “Award Agreement” means a written agreement between the Company and a Grantee, or notice from the Company or an Affiliate to a Grantee that evidences and sets out the terms and conditions of an Award.
19.5. “Board” means the Board of Directors of the Company.
19.6. “Business Combination”shall have
19.7. “Change in Control” shall have the meaning set forth inSection 15.2.
19.8. “Code” means theU.S. Internal Revenue Code of 1986.
19.9. “Committee”
19.10. “Company” means Energous Corporation, a Delaware Corporation, or any successor corporation.
19.11. “Common Stock”
19.12. “Consultant”Company, par value $0.00001 per share.
19.13. “Effective Date”continuous period of not less than twelve (12) months.
19.14. “Exchange Act”Company or a Participating Subsidiary that meets the requirements of Treasury Regulation Section 1.421-1(h)(2). Where the period of leave exceeds three (3) months, or such other period of time specified in Treasury Regulation Section 1.421-1(h)(2), and the
19.15. “Fair
19.16. “Family Member”
19.17. “Grant Date”this Plan.
19.18. “Grantee” means a person who receives or holds an Award.
19.19. “Incumbent Directors”shall have the meaning set forth inSection 15.2.
19.20. “Non-Employee Director” means a member of the Board or the board of directors of an Affiliate, in each case who is not an officer or employee of the Company or any Affiliate.
19.21. “Option”means an option to purchase one or more Shares pursuant to the Plan.
19.22. “Option Price” means the exercise price for each Share subject to an Option.
19.23. “Other Share-based Awards” means Awards consisting of Share units, or other Awards, valued in whole or in part by reference to, or otherwise based on, Common Stock, other than Options, SARs, Restricted Stock and RSUs.
19.24. “Performance Award” means an Award made subject to the attainment of performance goals (as described inSection 12) over a performance period of at least one year established by the Committee.
19.25. “Person”means an individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act.
19.26. “Plan”“Plan” means this Energous Corporation 2014 Non-employee Equity CompensationEmployee Stock Purchase Plan.
19.27. “Purchase Price”
19.28. “Restricted Period” shall have the meaning set forth inSection 10.1.
19.29. “Restricted Stock”Offering Period.
19.30. “Restricted Stock Unit”or“RSU” means a bookkeeping entry representing the right to receive Shares or their cash equivalent subjectan amount equal to the satisfactionlesser of specified terms and conditions, awarded to a Grantee pursuant toSection 10.
19.31. “SAR Exercise Price” means the per Share exercise price of a SAR granted to a Grantee underSection 9.
19.32. “SEC”means the United States Securities and Exchange Commission.
19.33. “Section 409A” means Code Section 409A.
19.34. “Securities Act” means the Securities Act of 1933.
19.35. “Separation from Service” means the termination of a Service Provider’s Service, whether initiated(i) eighty-five percent (85%) (or such greater percentage as designated by the Service Provider or the Company or an Affiliate;provided that if any Award governed by Section 409A is to be distributed on a Separation from Service, then the definition of Separation from Service for such purposes shall comply with the definition provided in Section 409A.
19.36. “Service” means service as a Service Provider to the Company or an Affiliate. Unless otherwise provided in the applicable Award Agreement, a Grantee’s change in position or duties shall not result in interrupted or terminated Service, so long as such Grantee continues to be a Service Provider to the Company or an Affiliate.
19.37. “Service Provider” means a Non-Employee Director or Consultant of the Company or an Affiliate.
19.38. “Share”means a share of Common Stock.
19.39. “Stock Appreciation Right”or “SAR” means a right granted to a Grantee pursuant toSection 9.
19.40. “Stockholder” means a stockholder of the Company.
19.41. “Subsidiary” means any “subsidiary corporation” of the Company within the meaning of Code Section 424(f).
19.42. “Substitute Award”means any Award granted in assumption of or in substitutionCommittee for an awardOffering Period) of a company or business acquired by the Company or an Affiliate or with which the Company or an Affiliate combines.
19.43. “Termination Date” means the date that is 10 years after the Effective Date, unless the Plan is earlier terminated by the Board underSection 5.2.
19.44. “Voting Securities”shall have the meaning set forth inSection 15.2.
20. ADMINISTRATION OF THE PLAN
20.1. General
The Board shall have such powers and authorities related to the administration of the Plan as are consistent with the Company’s certificate of incorporation and bylaws and applicable law. The Board shall have the power and authority to delegate its responsibilities hereunder to the Committee, which shall have full authority to act in accordance with its charter, and with respect to the power and authority of the Board to act hereunder, all references to the Board shall be deemed to include a reference to the Committee, unless such power or authority is specifically reserved by the Board. Except as specifically provided inSection 14 or as otherwise may be required by applicable law, regulatory requirement or the certificate of incorporation or the bylaws of the Company, the Board shall have full power and authority to take all actions and to make all determinations required or provided for under the Plan, any Award or any Award Agreement, and shall have full power and authority to take all such other actions and make all such other determinations not inconsistent with the specific terms and conditions of the Plan that the Board deems to be necessary or appropriate to the administration of the Plan. The Committee shall administer the Plan;provided that, the Board shall retain the right to exercise the authority of the Committee to the extent consistent with applicable law and the applicable requirements of any securities exchange on which the Common Stock may then be listed. All actions, determinations and decisions by the Board or the Committee under the Plan, any Award or any Award Agreement shall be in the Board’s (or the Committee’s, as applicable) sole discretion and shall be final, binding and conclusive. Without limitation, the Committee shall have full and final power and authority, subject to the other terms and conditions of the Plan, to:
(i) designate Grantees;
(ii) determine the type or types of Awards to be made to Grantees;
(iii) determine the number of Shares to be subject to an Award;
(iv) establish the terms and conditions of each Award (including the Option Price of any Option, the nature and duration of any restriction or condition (or provision for lapse thereof) relating to the vesting, exercise, transfer or forfeiture of an Award or the Shares subject thereto);
(v) prescribe the form of each Award Agreement; and
(vi) amend, modify or supplement the terms or conditions of any outstanding Award including the authority, in order to effectuate the purposes of the Plan, to modify Awards to foreign nationals or individuals who are employed outside the United States to recognize differences in local law, tax policy or custom.
To the extent permitted by applicable law, the Committee may delegate its authority as identified herein to any individual or committee of individuals (who need not be directors), including the authority to make Awards to Grantees who are not subject to Section 16 of the Exchange Act. To the extent that the Committee delegates its authority to make Awards as provided by thisSection 3.1, all references in the Plan to the Committee’s authority to make Awards and determinations with respect thereto shall be deemed to include the Committee’s delegate. Any such delegate shall serve at the pleasure of, and may be removed at any time by, the Committee.
20.2. No Repricing
Notwithstanding any provision herein to the contrary, the repricing of Options or SARs is prohibited without prior approval of the Stockholders. For this purpose, a “repricing” means any of the following (or any other action that has the same effect as any of the following): (i) changing the terms of an Option or SAR to lower its Option Price or SAR Exercise Price; (ii) any other action that is treated as a “repricing” under generally accepted accounting principles; and (iii) repurchasing for cash or canceling an Option or SAR at a time when its Option Price or SAR Exercise Price is greater than the Fair Market Value of the underlying Shares in exchange for another award, unless the cancellation and exchange occurs in connection with a change in capitalization or similar change underSection 15. A cancellation and exchange under clause (iii) would be considered a “repricing” regardlessshare of whether it is treated as a “repricing” under generally accepted accounting principles and regardless of whether it is voluntaryCommon Stock on the part of the Grantee.
20.3. Award Agreements; Clawbacks
The grant of any Award may be contingent upon the Grantee executing the appropriate Award Agreement. The Company may retain the right in an Award Agreement to cause a forfeiture of the gain realized by a Grantee on account of actions taken by the Grantee in violationGrant Date or breach of or in conflict with any service agreement, non-competition agreement, any agreement prohibiting solicitation of employees or clients of the Company or any Affiliate thereof or any confidentiality obligation with respect to the Company or any Affiliate thereof, or otherwise in competition with the Company or any Affiliate thereof, to the extent specified in(ii) eighty-five percent (85%) (or such Award Agreement applicable to the Grantee. Furthermore, the Company may annul an Award if the Grantee is terminated for “cause”greater percentage as defined in the applicable Award Agreement.
All awards, amounts or benefits received or outstanding under the Plan shall be subject to clawback, cancellation, recoupment, rescission, payback, reduction or other similar action in accordance with the terms of any Company clawback or similar policy or any applicable law related to such actions, as may be in effect from time to time. A Grantee’s acceptance of an Award shall be deemed to constitute the Grantee’s acknowledgement of and consent to the Company’s application, implementation and enforcement of any applicable Company clawback or similar policy that may apply to the Grantee, whether adopted prior to or following the Effective Date, and any provision of applicable law relating to clawback, cancellation, recoupment, rescission, payback or reduction of compensation, and the Grantee’s agreement that the Company may take such actions as may be necessary to effectuate any such policy or applicable law, without further consideration or action.
20.4. Deferral Arrangement
The Committee may permit or require the deferral of any Award payment into a deferred compensation arrangement, subject to such rules and procedures as it may establish and in accordance with Section 409A, which may include provisions for the payment or crediting of interest or dividend equivalents, including converting such credits into deferred Share units.
20.5. No Liability
No member of the Board or of the Committee shall be liable for any action or determination made in good faith with respect to the Plan, any Award or Award Agreement.
20.6. Book Entry
Notwithstanding any other provision of the Plan to the contrary, the Company may elect to satisfy any requirement under the Plan for the delivery of stock certificates through the use of book entry.
21. STOCK SUBJECT TO THE PLAN
21.1. Authorized Number of Shares
Subject to adjustment underSection 15, the aggregate number of Shares authorized to be issued under the Plan is 600,000. Shares issued under the Plan may consist in whole or in part of authorized but unissued Shares, treasury Shares or Shares purchased on the open market or otherwise, all as determined by the Board from time to time.
21.2. Share Counting
21.2.1. General
Each Share granted in connection with an Award shall be counted as one Share against the limit inSection 4.1, subject to the provisions of thisSection 4.2.
21.2.2. Cash-Settled Awards
Any Award settled in cash shall not be counted as issued Shares for any purpose under the Plan.
21.2.3. Expired or Terminated Awards
If any Award expires, or is terminated, surrendered or forfeited, in whole or in part, the unissued Shares covered by such Award shall again be available for the grant of Awards.
21.2.4. Payment of Option Price or Tax Withholding in Shares
If Shares issuable upon exercise, vesting or settlement of an Award, or Shares owned by a Grantee (which are not subject to any pledge or other security interest) are surrendered or tendered to the Company in payment of the Option Price or Purchase Price of an Award or any taxes required to be withheld in respect of an Award, in each case, in accordance with the terms and conditions of the Plan and any applicable Award Agreement, such surrendered or tendered Shares shall again be available for the grant of Awards. For a stock-settled SAR, only the net Shares actually issued upon exercise of the SAR shall be counted against the limit inSection 4.1.
21.2.5. Substitute Awards
Substitute Awards shall not be counted against the number of Shares reserved under the Plan.
21.3. Limits on Awards to Non-Employee Directors
The maximum value of Awards granted during any calendar year to any Non-Employee Director, taken together with any cash fees paid to such Non-Employee Director during the calendar year and the value of awards granted to the Non-Employee Director under any other equity compensation plan of the Company or an Affiliate during the calendar year, shall not exceed the following in total value (calculating the value of any Awards or other equity compensation plan awards based on the grant date fair value for financial reporting purposes): (i) $500,000 for the Chair of the Board and (ii) $300,000 for each Non-Employee Director other than the Chair of the Board;provided,however, that Awards granted to Non-Employee Directors upon their initial election to the Board or the board of directors of an Affiliate shall not be counted towards the limit under thisSection 4.3.4. Any Awards or other equity compensation plan awards that are scheduled to vest over a period of more than one calendar year shall be applied pro rata (based on grant date fair value as provided above) for purposes of the limit under thisSection 4.3.4based on the number of years over which such awards are scheduled to vest.
22. EFFECTIVE DATE, DURATION AND AMENDMENTS
22.1. Term
The Plan shall be effective as of the Effective Date,provided that it has been approved by the Stockholders. The Plan shall terminate automatically on the 10-year anniversary of the Effective Date and may be terminated on any earlier date as provided inSection 5.2.
22.2. Amendment and Termination of the Plan
The Board may, at any time and from time to time, amend, suspend or terminate the Plan as to any Awards that have not been made. An amendment shall be contingent on approval of the Stockholders to the extent stated by the Board, required by applicable law or required by applicable securities exchange listing requirements. No Awards shall be made after the Termination Date. The applicable terms and conditions of the Plan, and any terms and conditions applicable to Awards granted prior to the Termination Date shall survive the termination of the Plan and continue to apply to such Awards. No amendment, suspension or termination of the Plan shall, without the consent of the Grantee, materially impair rights or obligations under any Award theretofore awarded.
23. AWARD ELIGIBILITY AND LIMITATIONS
23.1. Service Providers
Subject to thisSection 6.1, Awards may be made to any Service Provider as the Committee may determine and designate from time to time.
23.2. Successive Awards
An eligible person may receive more than one Award, subject to such restrictions as are provided herein.
23.3. Stand-Alone, Additional, Tandem, and Substitute Awards
Awards may be granted either alone or in addition to, in tandem with or in substitution or exchange for, any other Award or any award granted under another plan of the Company, any Affiliate or any business entity to be acquired by the Company or an Affiliate, or any other right of a Grantee to receive payment from the Company or any Affiliate. Such additional, tandem or substitute or exchange Awards may be granted at any time. If an Award is granted in substitution or exchange for another award, the Committee shall have the right to require the surrender of such other award in consideration for the grant of the new Award. Subject to the requirements of applicable law, the Committee may make Awards in substitution or exchange for any other award under another plan of the Company, any Affiliate or any business entity to be acquired by the Company or an Affiliate. In addition, Awards may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other plans of the Company or any Affiliate, in which the value of Shares subject to the Award is equivalent in value to the cash compensation (for example, RSUs or Restricted Stock).
24. AWARD AGREEMENT
The grant of any Award may be contingent upon the Grantee executing an appropriate Award Agreement, in such form or forms as the Committee shall from time to time determine. Without limiting the foregoing, an Award Agreement may be provided in the form of a notice that provides that acceptance of the Award constitutes acceptance of all terms and conditions of the Plan and the notice. Award Agreements granted from time to time or at the same time need not contain similar provisions but shall be consistent with the terms and conditions of the Plan.
25. TERMS AND CONDITIONS OF OPTIONS
25.1. Option Price
The Option Price of each Option shall be fixeddesignated by the Committee and stated in the related Award Agreement. The Option Pricefor an Offering Period) of each Option (except those that constitute Substitute Awards) shall be at least the Fair Market Value of a share of Common Stock on the Grant Date. InPurchase Date; provided, however, that, the Purchase Price per share of Common Stock shall in no case shall the Option Price of any Optionevent be less than the par value of a Share.
25.2. Vesting
Subject toSection 8.3, each Option shall become exercisable at such times and under such conditions (including performance requirements) as stated in the Award Agreement.
25.3. Term
Each Option shall terminate, and all rights to purchase Shares thereunder shall cease 10 yearsCommon Stock.
25.4. Limitations on Exercise of Option
Notwithstanding any other provision of the Plan, in no event may any Option be exercised, in wholeCompany or in part, (i) prior to the date the Plana Subsidiary, whether or not such corporation exists
25.5. Method of Exercise
An Option thatentity is exercisable may be exercised by the Grantee’s delivery of a notice of exercise to the Company, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares. To be effective, notice of exercise mustSubsidiary shall be made in accordance with procedures established by the Company from time to time.
25.6. Rights of Holders of Options
Unless otherwise provided in the applicable Award Agreement, an individual holding or exercising an Option shall have none of the rights of a Stockholder (for example, the right to receive cash or dividend payments or distributions attributable to the subject Shares or to direct the voting of the subject Shares) until the Shares covered thereby are fully paid and issued to him. Except as provided inCode Section 15 or the related Award Agreement, no adjustment shall be made for dividends, distributions or other rights for424(f).
25.7. Delivery of Stock Certificates
Subject toSection 3.6, promptly after the exercise of an Option by a Grantee and the payment in full of the Option Price, such Grantee shall be entitled to the issuance of aestablished stock certificateexchange or certificates evidencing his or her ownership of the Shares subject to the Option.
26. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS
26.1. Right to Payment
A SAR shall confer on the Grantee a right to receive,national market system upon exercise thereof, the excess of (i) the Fair Market Value on the date of exercise over (ii) the SAR Exercise Price, as determined by the Committee. The Award Agreement for a SAR (except those that constitute Substitute Awards) shall specify the SAR Exercise Price, which shall be fixed on the Grant Date as not less than the Fair Market Value on that date. SARs may be granted alone or in conjunction with all or part of an Option or at any subsequent time during the term of such Option or in conjunction with all or part of any other Award. A SAR granted in tandem with an outstanding Option following the Grant Date of such Option shall have a grant price that is equal to the Option Price;provided,however, that the SAR’s grant price may not be less than the Fair Market Value on the Grant Date of the SAR to the extent required by Section 409A.
26.2. Other Terms
The Committee shall determine the time or times at which and the circumstances under which a SAR may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the time or times at which SARs shall cease to be or become exercisable following Separation from Service or upon other conditions, the method of exercise, whether or not a SAR shall be in tandem or in combination with any other Award and any other terms and conditions of any SAR.
26.3. Term of SARs
The term of a SAR shall be determined by the Committee;provided,however, that such term shall not exceed 10 years.
26.4. Payment of SAR Amount
Upon exercise of a SAR, a Grantee shall be entitled to receive payment from the Company (in cash or Shares, as determined by the Committee) in an amount determined by multiplying:
(i) the difference between the Fair Market Value on the date of exercise over the SAR Exercise Price; by
(ii) the number of Shares with respect to which the SAR is exercised.
27. TERMS AND CONDITIONS OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS
27.1. Restrictions
At the time of grant, the Committee may establish a period of time (a “Restricted Period”) and any additional restrictions including the satisfaction of corporate or individual performance objectives applicable to an Award of Restricted Stock or RSUs. Each Award of Restricted Stock or RSUs may be subject to a different Restricted Period and additional restrictions. Neither Restricted Stock nor RSUs may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the Restricted Period or prior to the satisfaction of any other applicable restrictions.
27.2. Restricted Stock Certificates
The Company shall issue Shares, in the name of each Grantee to whom Restricted Stock has been granted, stock certificates or other evidence of ownership representing the total number of Shares of Restricted Stock granted to the Grantee, as soon as reasonably practicable after the Grant Date. The Committee may provide in an Award Agreement that either (i) the Secretary of the Company shall hold such certificates for the Grantee’s benefit until such time as the RestrictedCommon Stock is forfeited tolisted is open for trading or, if the CompanyCommon Stock is not listed on an established stock exchange or the restrictions lapse, or (ii) such certificates shall be delivered to the Grantee;provided,however, that such certificates shall bearnational market system, a legend or legends that comply with the applicable securities laws and regulations and make appropriate reference to the restrictions imposed under the Plan and the Award Agreement.
27.3. Rights of Holders of Restricted Stock
Unless the otherwise provided in the applicable Award Agreement and subject to Section 17.10, holders of Restricted Stock shall have rights as Stockholders, including voting and dividend rights.
27.4. Rights of Holders of RSUs
27.4.1. Settlement of RSUs
RSUs may be settled in cash or Shares,business day, as determined by the Committee in good faith.
27.4.2. Voting and Dividend Rights
Unlessborne by the Company. The Board may take any action under this Plan that would otherwise provided inbe the applicable Award Agreement and subject toSection 17.10, holders of RSUs shall not have rights as Stockholders, including voting or dividend or dividend equivalents rights.
27.4.3. Creditor’s Rights
A holder of RSUs shall have no rights other than those of a general creditorresponsibility of the Company. RSUs represent an unfunded and unsecured obligationCommittee.
27.5. Purchase of Restricted Stock
The Grantee shall be required, to the extent required by applicable law, to purchase the Restricted Stock from the Company at a Purchase Price equal to the greater of (i) the aggregate par value of the Shares represented by such Restricted Stock or (ii) the Purchase Price, if any, specified in the related Award Agreement. If specified in the Award Agreement, the Purchase Price may be deemed paid by Services already rendered. The Purchase Price shall be payable in a form described inSection 11or, if sooperate this Plan.
27.6. Delivery of Shares
Upon the expiration or termination of any Restricted Period and the satisfaction of any other conditions prescribed by the Committee, the restrictions applicable to Shares of Restricted Stock or RSUs settled in Shares shall lapse, and, unless otherwise provided in the applicable Award Agreement, a stock certificate for such Shares shall be delivered, free of all such restrictions, to the Grantee or the Grantee’s beneficiary or estate, as the case may be.
28. FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK
28.1. General Rule
Payment of the Option Price for the Shares purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock shall be made in cash or in cash equivalents acceptable to the Company, except as provided in thisSection 11.
28.2. Surrender of Shares
To the extent the Award Agreement so provides, payment of the Option Price for Shares purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock may be made all or in part through the tender to the Company of Shares, which Shares shall be valued, for purposes of determining the extent to which the Option Price or Purchase Price for Restricted Stock has been paid, at their Fair Market Value on the date of exercise or surrender.
28.3. Cashless Exercise
With respect to an Option only (and not with respect to Restricted Stock), to the extent permitted by law and to the extent the Award Agreement so provides, payment of the Option Price may be made all or in part by delivery (on a form acceptable to the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell Shares and to deliver all or part of the sales proceeds to the Company in payment of the Option Price and any withholding taxes described inSection 17.3.
28.4. Other Forms of Payment
To the extent the Award Agreement so provides, payment of the Option Price or the Purchase Price for Restricted Stock may be made in any other formmanner that is consistent with applicable laws, regulations and rules, includingCode Section 423, any individual who is an Eligible Employee as of the Company’s withholdingfirst day of Shares otherwise duethe enrollment period designated by the Committee for a particular Offering Period shall be eligible to participate in such Offering Period, subject to the exercising Grantee.
29. TERMS AND CONDITIONS OF PERFORMANCE AWARDS
29.1. Performance Conditions
The rightrequirements of a GranteeCode Section 423.
29.2. Settlement of Performance Awards; Other Terms
Settlement of Performance Awards may be in cash, Shares, other Awards or other property,times as determined by the Committee.Committee). The Committee may reduce the amount of a settlement otherwise to be made in connection with Performance Awards.
30. other SHARE-based awards
30.1. Grant of Other Share-based Awards
Other Share-based Awards may be granted either alone or in addition to or in conjunction with other Awards. Subject to the provisions of the Plan, the Committee shall have the authority to determinechange the personsduration, frequency, start date, and end date of Offering Periods.
30.2. Termsthe exercise of Other Share-based Awards
Anyan option or any rights to receive Common Stock subject to Awards made under thisSection 13hereunder, may not be sold, assigned, transferred, pledged, or otherwise encumbered priordisposed of in any way (other than by will, the laws of descent and distribution, or as provided in Section 17) by the Participant. Any attempt to assign, transfer, pledge, or otherwise dispose of such rights or amounts shall be without effect.
31. REQUIREMENTS OF LAW
31.1. General
The Company shall not be required to sell or issue any Shares under any Award if the sale or issuance of such Shares would constitute a violation by the Grantee, any other individual exercising an Option or the Company of any provision of any law, or regulation of any governmental authority, including any federal or state securities laws or regulations. If at any time the Committee determines that the listing, registration or qualification of any Shares subject to an Award upon any securities exchange or under any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the issuance or purchase of Shares hereunder, no Shares may be issued or sold to the Grantee or any other individual exercising an Option pursuant to such Award unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Company, and any delay caused thereby shall in no way affect the date of termination of the Award. Specifically, in connection with the Securities Act, upon the exercise of any Option or the delivery of any Shares underlying an Award, unless a registration statement under such Act is in effect with respect to the Shares covered by such Award, the Company shall not be required to sellsegregate such payroll deductions or issue such Shares unlesscontributions.
31.2. Section 25102(o) of the California Corporations Code.
The Plan is intended to comply with Section 25102(o) of the California Corporations Code. In that regard, to the extent required by Section 25102(o), (i) the terms of any Options or SARs, to the extent vested and exercisable upon a Grantee’s Separation from Service, shall include any minimum exercise periods following Separation from Service specified by Section 25102(o), and (ii) any repurchase right of the Company with respect to Shares issued under the Plan shall include a minimum 90-day notice requirement. Any provision of the Plan that is inconsistent with Section 25102(o) shall, without further act or amendment by the Company, be reformed to comply with the requirements of Section 25102(o).
31.3. Rule 16b-3
During any time when the Company has a class of equity security registered under Section 12 of the Exchange Act, it is the intent of the Company that Awards and the exercise of Options granted hereunder will qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To the extent that any provision of the Plan or action by the Board or Committee does not comply with the requirements of Rule 16b-3, it shall be deemed inoperative to the extent permitted by law and deemed advisableParticipant’s notional account.
32. EFFECT OF CHANGES IN CAPITALIZATION
32.1. Adjustments for Changes in Capital Structure
Subject to any required action by the Stockholders,other distribution (whether in the eventform of any change in the Shares effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation,cash, Common Stock, or other property), recapitalization, reclassification, stock dividend, stock split, reverse stock split, reorganization, merger, consolidation, split-up, split-off, spin-off, combination, of shares,repurchase, or exchange of sharesCommon Stock or similar change in the capital structureother securities of the Company, or other change in the event of payment of a dividend or distribution toCompany’s structure affecting the Stockholders in a form other than Shares (excepting normal cash dividends) that has a material effect on the Fair Market Value of Shares, appropriate and proportionate adjustments shall be made in the number and class of shares subject to the Plan and to any outstanding Awards, and in the Option Price, SAR Exercise Price or Purchase Price per Share of any outstanding AwardsCommon Stock occurs, then in order to prevent dilution or enlargement of Grantees’ rightsthe benefits or potential benefits intended to be made available under the Plan. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.” If a majority of the shares which are of the same class as the shares that are subject to outstanding Awards are exchanged for, converted into, or otherwise become (whether or not pursuant to a Change in Control) shares of another corporation (the “New Shares”),this Plan, the Committee may unilaterally amend the outstanding Awards to provide thatshall, in such Awards are for New Shares. In the event of any such amendment,manner as it deems equitable, adjust the number of Shares subject to,shares and the Option Price, SAR Exercise Price or Purchase Price per Shareclass of the outstanding Awards shallCommon Stock that may be adjusted in a fair and equitable manner as determined bydelivered under this Plan, the Committee. Any fractional share resulting from an adjustment pursuant to thisSection 15.1 shall be rounded down to the nearest whole number and the Option Price, SAR Exercise Price or Purchase Price per share, shall be rounded up toand the nearest whole cent. In no event maynumber of shares of Common Stock covered by each outstanding option under this Plan, and the exercise pricenumerical limits of any Award be decreased to an amount less than the par value, if any, of the stock subject to the Award. The Committee may also make such adjustments in the terms of any Award to reflect,Section 7 and Section 13.
32.2. Change in Control
32.2.1. Consequences of a Change in Control
Subject to the requirements and limitations of Section 409A if applicable, the Committee may provide for any one or more of the following in connection with a Change in Control:
(i) Accelerated Vesting. The Committee may provide in any Award Agreement or, in the event of a Change in Control, may take such actions as it deems appropriate to provide for the accelerationproposed dissolution or liquidation of the exercisability, vesting and/Company, any Offering Period then in progress shall be shortened by setting a new Purchase Date and the Offering Period shall end immediately before the proposed dissolution or settlement in connection with such Change in Control of each or any outstanding Award or portion thereof and shares acquired pursuant thereto upon such conditions, including terminationliquidation. The new Purchase Date shall be before the date of the Grantee’s Service prior to, upon,Company’s proposed dissolution or following such Change in Control, to such extent asliquidation. Before the new Purchase Date, the Committee shall determine.
(ii) Assumption, Continuation or Substitution
(iii) Cash-Out of Awardson June 16, 2031.
32.2.2. Change in Control Defined
Unless otherwise provided in the applicable Award Agreement, a “Change in Control” means the consummation of any of the following events:
(i) The acquisition, other than from the Company, by any individual, entity or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), other than the Company or any subsidiary, affiliate (within the meaning of Rule 144 promulgated under the Securities Act) or employee benefit plan of the Company, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Voting Securities”); or
(ii) A reorganization, merger, consolidation or recapitalization of the Company (a “Business Combination”), other than a Business Combination in which more than 50% of the combined voting power of the outstanding voting securities of the surviving or resulting entity immediately following the Business Combination is held by the Persons who, immediately prior to the Business Combination, were the holders of the Voting Securities; or
(iii) A complete liquidation or dissolution of the Company, or a sale of all or substantially all of the assets of the Company; or
(iv) During any period of 24 consecutive months, the Incumbent Directors cease to constitute a majority of the Board; “Incumbent Directors” means individuals who were members of the Board at the beginning of such period or individuals whose election or nomination for election to the Board by the Stockholders was approved by a vote of at least a majority of the then Incumbent Directors (but excluding any individual whose initial election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors).
Notwithstanding the foregoing, if it is determined that an Award is subject to the requirements of Section 409A and payable upon a Change in Control, the Company will not be deemed to have undergone a Change in Control for purposes of the Plan unless the Company is deemed to have undergone a “change in control event” pursuant to the definition of such term in Section 409A.
32.3. Adjustments
Adjustments under thisSection 15 related to Shares or securities of the Company shall be made by the Committee. No fractional Shares or other securities shall be issued pursuant to any such adjustment, and any fractions resulting from any such adjustment shall be eliminated in each case by rounding downward to the nearest whole Share.
33. No Limitations on Company
The making of Awards shall not affect or limit in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge, consolidate, dissolve or liquidate, or to sell or transfer all or any part of its business or assets.
34. TERMS APPLICABLE GENERALLY TO AWARDS
34.1. Disclaimer of Rights
No provision in the Plan or in any Award Agreement shall be construed to confer upon any individual the right to remain in the employ or service of the Company or any Affiliate, or to interfere in any way with any contractual or other right or authority of the Company or any Affiliate either to increase or decrease the compensation or other payments to any individual at any time, or to terminate any employment or other relationship between any individual and the Company or any Affiliate. In addition, notwithstanding anything contained in the Plan to the contrary, unless otherwise provided in the applicable Award Agreement, no Award shall be affected by any change of duties or position of the Grantee, so long as such Grantee continues to be a Service Provider. The obligation of the Company to pay any benefits pursuant to the Plan shall be interpreted as a contractual obligation to pay only those amounts described herein, in the manner and under the conditions prescribed herein. The Plan shall in no way be interpreted to require the Company to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or escrow for payment to any Grantee or beneficiary under the terms and conditions of the Plan.
34.2. Nonexclusivity of the Plan
Neither the adoption of the Plan nor the submission of the Plan to the Stockholders for approval shall be construed as creating any limitations upon the right and authority of the Board or its delegate to adopt such other compensation arrangements as the Board or its delegate determines desirable.
34.3. Withholding Taxes
The Company or an Affiliate, as the case may be, shall have the right to deduct from payments of any kind otherwise due to a Grantee any federal, state or local taxes of any kind required by law to be withheld (i) with respect to the vesting of or other lapse of restrictions applicable to an Award, (ii) upon the issuance of any Shares upon the exercise of an Option or SAR or (iii) otherwise due in connection with an Award. At the time of such vesting, lapse or exercise, the Grantee shall pay to the Company or the Affiliate, as the case may be, any amount that the Company or the Affiliate may reasonably determine to be necessary to satisfy such withholding obligation. Subject to the prior approvaldiscretion of the Committee, the Grantee may electbe accelerated) or permit Offering Periods to satisfy such obligations, or the Company may require such obligations to be satisfied, in whole or in part, (i) by causing the Company or the Affiliate to withhold the minimum required number of Shares otherwise issuable to the Grantee as may be necessary to satisfy such withholding obligation or (ii) by delivering to the Company or the Affiliate Shares already owned by the Grantee. The Shares so delivered or withheld shall have an aggregate Fair Market Value equal to such withholding obligations. The Fair Market Value used to satisfy such withholding obligation shall be determined by the Company or the Affiliate as of the date that the amount of tax to be withheld is to be determined. A Grantee who has made an election pursuant to thisSection 17.3 may satisfy his or her withholding obligation only with Shares that are not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.
34.4. Other Provisions
Each Award Agreement may contain such other terms and conditions not inconsistent with the Plan as may be determined by the Committee. In the event of any conflict between the terms and conditions of an employment agreement and the Plan, the terms and conditions of the employment agreement shall govern.
34.5. Severability
If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceableexpire in accordance with their terms and conditions, and all provisions shall remain enforceable in(and subject to any other jurisdiction.
34.6. Governing Law
The Plan shall be governed by and construedadjustment in accordance with theSection 18). If any Offering Period is terminated before its scheduled expiration, all amounts that have not been used to purchase shares of Common Stock shall be returned to Participants (without interest, except as otherwise required by law) as soon as administratively practicable.
34.7.rules.
The423
34.8. Separation from Service
The Committee shall determine the effect of a Separation from Service upon Awards, and such effect shall be set forth in the applicable Award Agreement. Without limiting the foregoing, the Committee may provide in the Award Agreements at the time of grant, or any time thereafter with the consent of the Grantee, the actions that will be taken upon the occurrence of a Separation from Service, including accelerated vesting or termination, depending upon the circumstances surrounding the Separation from Service.
34.9. Transferability of Awards
34.9.1. Transfers in General
Except as provided inSection 17.9.2, no Award shall be assignable or transferable by the Grantee, other than by will or the laws of descent and distribution, and, during the lifetime of the Grantee, only the Grantee personally (or the Grantee’s personal representative) may exercise rights under the Plan.
34.9.2. Family Transfers
If authorized in the applicable Award Agreement, a Grantee may transfer, not for value, all or part of an Award to any Family Member. For the purpose of thisSection 17.9.2, a “not for value” transfer is a transfer that is (i) a gift, (ii) a transfer under a domestic relations order in settlement of marital property rights or (iii) a transfer to an entity in which more than 50% of the voting interests are owned by Family Members (or the Grantee) in exchange for an interest in that entity. Following a transfer under thisSection 17.9.2, any such Awardshall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer. Subsequent transfers of transferred Awards are prohibited except to Family Members of the original Grantee in accordance with thisSection 17.9.2 or by will or the laws of descent and distribution.
34.10. Dividends and Dividend Equivalent Rights
If specified in the Award Agreement, the recipient of an Award may be entitled to receive, currently or on a deferred basis, dividends or dividend equivalents with respect to the Common Stock or other securities covered by an Award. The terms and conditions of a dividend equivalent right may be set forth in the Award Agreement. Dividend equivalents credited to a Grantee may be paid currently or may be deemed to be reinvested in additional Shares or other securities of the Company at a price per unit equal to the Fair Market Value on the date that such dividend was paid to Stockholders, as determined by the Committee. Notwithstanding the foregoing, in no event will dividends or dividend equivalents on any Award that is subject to the achievement of performance criteria be payable before the Award has become earned and payable.
34.11.
firm for the fiscal year ending December 31, 2024. 3. To approve the Energous Corporation 2024 Equity Incentive Plan. 4. To approve an amendment and restatement of the Energous Corporation Employee Stock Purchase Plan to increase the total number of shares of common stock available for issuance thereunder by 6,200 shares. NOTE: To transact such other business as may properly come before the annual meeting and any adjournments or postponements thereof. ! ! ! For All Withhold All For All Except For Against Abstain ! ! ! ENERGOUS CORPORATION To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. ENERGOUS CORPORATION 3590 NORTH FIRST STREET, SUITE 210 SAN JOSE, CA 95134 01) Rahul Patel 02) J. Michael Dodson 03) David Roberson 1. Election of Directors Nominees: The Plan was originally approvedBoard of Directors recommends you vote FOR ALL of the following: Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. ! ! ! ! ! ! VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 8:59 p.m. Pacific Time the day before the meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/WATT2024 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 8:59 p.m. Pacific Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. SCAN TO VIEW MATERIALS & VOTE w