Pain Therapeutics, Inc.TABLE OF CONTENTS

7801

CassavaSciences,Inc.

6801 N Capital of Texas Highway, Building 1; Suite 260,300, Austin, Texas 78731

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PROXY STATEMENT

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INFORMATION CONCERNING SOLICITATION AND VOTING

GeneralGeneral

The enclosed Proxyproxy is solicited on behalf of the Board of Directors of Pain Therapeutics,Cassava Sciences, Inc. (the “Company”) for use at the Annual Meeting of Stockholders to be held at the Company’s offices located at 7801 N Capital of Texas Highway, Suite 260, Austin, Texas, 78731,virtually on Thursday, May 10, 2018,4, 2023, at 10:00 a.m., local time,Central Time, (the “Annual Meeting”) and at any adjournment(s) or postponement(s) thereof, for the purposes set forth herein and in the accompanying Notice of Annual Meeting of Stockholders. The Company’s principal executive offices are located at the address listed at the top of this page and the Company’s telephone number is (512) 501-2444.

The Company’s Annual Report on Form 10-K, containing financial statements for the fiscal year ended December 31, 2017, are2022 (the “Annual Report”), is being mailed together with these proxy solicitation materials to all stockholders entitled to vote. This Proxy Statement,proxy statement for the Annual Meeting (the “Proxy Statement”), the accompanying Proxyproxy card and the Company’s Annual Report on Form 10-K will first be mailed on or about April 3, 20184, 2023 to all stockholders entitled to vote at the meeting.

THE COMPANY SHALL PROVIDE WITHOUT CHARGE TO ANY STOCKHOLDER SOLICITED BY THESE PROXY SOLICITATION MATERIALS A COPY OF THE COMPANY’S ANNUAL REPORT, ON FORM 10-K, TOGETHER WITH THE FINANCIAL STATEMENTS REQUIRED TO BE FILED WITH THE ANNUAL REPORT ON FORM 10-K, UPON REQUEST OF A STOCKHOLDER MADE IN WRITING TO PAIN THERAPEUTICS,CASSAVA SCIENCES, INC., 78016801 N CAPITAL OF TEXAS HIGHWAY, BUILDING 1; SUITE 260,300, AUSTIN, TEXAS 78731, ATTENTION: INVESTOR RELATIONS.

Can I submit a stockholder question in advance of the Annual Meeting?

Yes, we invite stockholders to ask questions via email to AnnualMeeting2023@CassavaSciences.com up through the time of the Annual Meeting.

We intend to respond to the question period in two parts: the first for questions that relate to the business of this Annual Meeting, and a second period for general questions about our business as a whole, or for questions or comments that a shareholder may wish to make about the conduct of our business. We may reword questions for clarity. If answering once for multiple questions on the same topic, we may combine or paraphrase substantially similar questions.

Togive all shareholders a fair chance to be heard, weexpect shareholders who wish to ask a question at our Annual Meeting to identify themselves - and also to confirm themselves as shareholders in advance.Each questioner may be allowed to ask one brief follow-up question if they wish to do so, to assure a dialogue between the stockholder and the director or manager who answers each question.

Questions are not confidential. However, due to SEC Regulation Fair Disclosure (Reg FD), limits around legal disclosures, time constraints or other limitations, we may not be able to address all comments or questions.

How can I attend the Annual Meeting with the ability to ask a question and/or vote?

The Annual Meeting will be a completely virtual meeting of stockholders, which will be conducted exclusively by webcast. You are entitled to participate in the Annual Meeting only if you were a stockholder of the Company as of the close of business on the Record Date (“Registered Holder”), or if you hold a valid legal proxy for the Annual Meeting if you are a beneficial holder and hold your shares through an intermediary, such as a bank or broker (“Beneficial Holder”).

As a Registered Holder, you will be able to attend the Annual Meeting online, ask a question and vote by visiting meetnow.global/MYWS5XS and following the instructions on your Notice, proxy card, or on the instructions that accompanied your proxy materials.

If you are a Beneficial Holder and want to attend the Annual Meeting online by webcast (with the ability to ask a question and/or vote, if you choose to do so) you have two options:

1)Registration in Advance of the Annual Meeting

Submit proof of your proxy power (“Legal Proxy”) from your broker or bank reflecting your Company holdings along with your name and email address to Computershare.

Requests for registration as set forth in (1) above must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on May 1, 2023. You will receive a confirmation of your registration by email after we receive your registration materials.

Requests for registration should be directed to us at the following:

By email: Forward the email from your broker granting you a Legal Proxy, or attach an

image of your Legal Proxy, to LegalProxy@computershare.com

By mail: Computershare

Cassava Sciences, Inc. Legal Proxy

P.O. Box 43001

Providence, RI 02940-3001

2)Register at the Annual Meeting

Beneficial Holder Access to Virtual Meetings - 2023 Proxy Season

Last year, an industry solution was agreed upon to allow Beneficial Holders to register online at the Annual Meeting to attend, ask questions and vote. We expect that the vast majority of Beneficial Holders will again be able to fully participate using the control number received with their voting instruction form. Please note, however, that this option is intended to be provided as a convenience to Beneficial Holders only, and there is no guarantee this option will be available for every type of Beneficial Holder voting control number. The inability to provide this option to any or all Beneficial Holders shall in no way impact the validity of the Annual Meeting. Beneficial Holders may choose the Register in Advance of the Annual Meeting option above, if they prefer to use that option.

If you access the Annual Meeting but do not enter your control number, you may listen to the proceedings, but you will not be able to vote or otherwise participate. You should log on to the meeting site at least fifteen minutes prior to the start of the Annual Meeting to provide time to register and download the required software, if needed. For further assistance should you need it, you may call 1-888-724-2416 or 1-781-575-2748.

Do I need to register to attend the Annual Meeting virtually?

Registration is only required if you are a Beneficial Holder, as set forth above.

How can I vote online at the meeting?

If you are a Registered Holder follow the instructions on the notice, email or proxy card that you received to access the meeting.

If you are a Beneficial Holder, please see the registration options set forth in numbers (1) and (2) above.

Online voting will be available during the meeting.

Why are you holding a virtual meeting instead of a physical meeting?

We are embracing virtual technology to provide expanded access, improved communication and cost savings for our stockholders and the Company. We believe that hosting a virtual meeting will enable more of our stockholders to attend and participate in the Annual Meeting since our stockholders can participate from any location around the world with Internet access.

What if I have trouble accessing the Annual Meeting virtually?

The virtual meeting platform is intended to be fully supported across browsers (MS Edge, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and cell phones) running the most up-to-date version of applicable software and plugins. Note: Internet Explorer is not a supported browser. Participants should ensure that they have a strong WiFi connection wherever they intend to participate in the meeting. We encourage you to access the meeting prior to the start time. For further assistance should you need it, you may call 1-888-724-2416 or 1-781-575-2748.

Record Date and ShareShare Ownership

Stockholders of record at the close of business on March 21, 201814, 2023 (the “Record Date”) are entitled to notice of the meeting and to vote at the meeting and at any adjournment(s) or postponement(s) thereof. The Company has one series of common shares issued and outstanding, designated as common stock, $0.001 par value per share (the “Common Stock”), and one series of undesignated preferred stock, $0.001 par value per share (the “Preferred Stock”). As of the Record Date, 120,000,000 shares of Common Stock were authorized and 6,595,50941,749,435 shares of Common Stock were issued and outstanding and 10,000,000 shares of Preferred Stock were authorized and none were issued or outstanding. Each share of Common Stock entitles its holder to one vote. Cumulative voting of shares of Common Stock is not permitted.

Revocability of ProxiesProxies

Any proxy given pursuant to this solicitation may be changed or revoked by the person giving it at any time before its use by deliveringprior to the Companytaking of the vote or the polls closing at its principal offices (Attention: Investor Relations)the Annual Meeting.

Stockholders of record may change their vote by:

granting a new proxy bearing a later date (which automatically revokes the earlier proxy) using any of the methods described above (and until the applicable deadline for each method);

providing a written notice of revocation to Cassava’s Secretary at Cassava Sciences, Inc., 6801 N Capital of Texas Highway, Building 1; Suite 300, Austin, Texas 78731, prior to the shares being voted, or

participating in the Annual Meeting and voting electronically online at meetnow.global/MYWS5XS. Participation alone at the Annual Meeting will not cause a duly executedpreviously granted proxy bearing a later date or attendingto be revoked unless the stockholder specifically votes during the meeting online at meetnow.global/MYWS5XS.

Please note, however, that if shares are held of record by a broker, bank or other nominee and a beneficial owner of shares wishes to revoke a proxy, such beneficial owner must contact that firm to revoke any prior voting in person.instructions.

VotingVoting

There are differing votedifferent voting requirements for the approval of the various proposals, as follows:

Proposal One: The directors will be elected by a plurality vote of the shares of Common Stock. See “Proposal One – Election of Two Class II Directors – Vote Required.”

Proposal Two: The affirmative vote of a majority of the outstanding shares entitled to vote is required to approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to limit the liability of certain officers of the Company. Abstentions and broker non-votes, if any, will have the effect of a vote against this proposal.

Proposals Three, Four, Five and Six: The affirmative vote of a majority of votes cast on the proposal at the Annual Meeting is required to approve the Company’s Non-employee Director Compensation Program, the ratification of the selection of Ernst & Young LLP as the independent registered public accounting firm to the Company, the non-binding advisory vote on the 2022 executive compensation, and the non-binding, advisory vote on the frequency of non-binding, advisory votes on the executive compensation of the Company’s named executive officers. Abstentions and broker non-votes, if any, will not be counted either for or against any of these proposals.

Solicitation of ProxiesProxies

The proxy for the Annual Meeting is being solicited on behalf of the Board of Directors. The Company will bear the entire cost of solicitation of proxies, including preparation, assembly, printing and mailing of this proxy statement,Proxy Statement, the proxy card and any additional information furnished to stockholders. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodians holding shares of Common Stock in street name to forward to the beneficial owners of such shares. The Company may reimburse persons representing beneficial owners of Common Stock for their costs of forwarding solicitation materials to such beneficial owners. Proxies may also be solicited by certain of the Company’s directors, officers and regular employees, without additional compensation, personally, via the internet or by telephone or facsimile.facsimile, although the Company may reimburse these individuals for their reasonable out-of-pocket expenses. The Company does not expect to, but has the option to, retain a proxy solicitor.

Quorum; Abstentions; BrokerBroker, Non-Votes

Votes cast by proxy or in personvirtually at the Annual Meeting (“Votes Cast”) will be tabulated by the Inspector of Elections (the “Inspector”). The Inspector will also determine whether or not a quorum is present at the meeting. Except in certain specific circumstances, the affirmative vote of a majority of shares present in personvirtually or represented by proxy at a duly held meeting at which a quorum is present is required under Delaware law for approval of proposals presented to stockholders. In general, Delaware law provides that a quorum consists of a majority of shares entitled to vote are present or represented by proxy at the meeting. Under the General Corporation Law of the State of Delaware, stockholders are not entitled to dissenter’s rights with respect to any matter to be considered and voted on at the Annual Meeting, and we will not independently provide stockholders with any such right.

The Inspector will treat shares that are voted WITHHELD or ABSTAIN as being present and entitled to vote for purposes of determining the presence of a quorum, but shares voted WITHHELD or ABSTAIN will not be treated as votes in favor of approving any matter submitted to the stockholders for a vote. When proxies are properly dated, executed and returned, the shares represented by such proxies will be voted at the Annual Meeting in accordance with the instructions of the stockholder. If no specific instructions are given, the shares will be voted:

FOR the election of the nominees for director set forth herein;

To APPROVE an amendment to the Company’s Amended and Restated Certificate of Incorporation to limit the liability of certain officers of the Company;

To APPROVE the Company’s Non-employee Director Compensation Program;

FOR the ratification of the selection of Ernst & Young LLP as the independent registered public accounting firm to the Company for the fiscal year ending December 31, 2023;

To APPROVE, by a non-binding advisory vote, the 2022 executive compensation for the Company’s named executive officers;

For a frequency of ONE YEAR for future non-binding, advisory votes on the executive compensation of the Company’s named executive officers; and

upon such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof, but will not be voted in the election of directors other than as provided above.

If a broker indicates on the enclosed proxy card or its substitute that such broker does not have discretionary authority as to certain shares to vote on a particular matter (“broker non-votes”), those shares will be considered as present at the meeting with respect to establishing a quorum for the transaction of business. The Company believes that the tabulation procedures to be followed by the Inspector are consistent with the general statutory requirements in Delaware concerning voting of shares and determination of a quorum.

Broker non-votes with respect to proposals set forth in this Proxy Statement will not be considered “Votes Cast” and, accordingly, will not affect the determination as to whether the requisite majority of Votes Cast has been obtained with respect to a particular matter. However, as the proposal regarding the ratification of the selection of Ernst & Young LLP as the independent registered public accounting firm to the Company for the fiscal year ending December 31, 2023 is a “routine” item, if you hold your shares through a bank or a broker and you do not provide instructions to your bank or broker, the Company believes that your bank or broker may cast a broker discretionary vote in favor of this proposal.

Deadline for Receipt of Stockholder Proposals

Requirements for Stockholder Proposals to be considered for inclusion in the Company’s proxy materials for the 2024 Annual Meeting:

Stockholders are entitled to present proposals for actioninclusion in the Company’s proxy statement at a forthcoming meeting if they comply with the requirements of the Company’s bylawsAmended and the rules established by the SecuritiesRestated Bylaws and Exchange Commission (the “SEC”), Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)and related SEC regulations regarding the inclusion of stockholder proposals in company-sponsored proxy materials.

Under these requirements, proposals of stockholders of the Company that are intended to be presented by suchincluded in the Company’s proxy statement for the 2024 annual meeting of stockholders must be received at the Company’s 2019 Annual Meetingprincipal executive offices 6801 N Capital of Stockholders must be received by the Company Texas Highway, Building 1; Suite 300, Austin, Texas 78731, Attention: Secretary, no later than Monday, November 27, 2023, or not less than 120 days prior to the date of the Company’s proxy statement released to the stockholders in connection with the previous year’s annual meeting of stockholders. If the Company does not receive a stockholder proposal by the deadline described in the preceding sentence, the Company may exclude the proposal from its proxy statement for the 2024 annual stockholder meeting of stockholders. However, if the 2024 annual meeting of stockholders is more than 30 days before or after the anniversary date of the Annual Meeting, notice by the stockholder must be delivered a reasonable time before the Company begins to print and send its proxy materials (the “Proposal Deadline”).

Requirements for Stockholder Proposals to be presented at the 2024 Annual Meeting:

Our Amended and Restated Bylaws provide that stockholders may present nominees for the election of directors and proposals to be considered at an annual meeting by providing timely notice to the Company’s Secretary at 6801 N Capital of Texas Highway, Building 1; Suite 300, Austin, Texas 78731. A stockholder’s notice to the Secretary must set forth as to each matter the stockholder proposes to bring before the annual meeting the information required by our Amended and Restated Bylaws. To be timely for the 2024 annual meeting of stockholders, the Secretary must receive the written notice by December 9, 2018.6, 2023. After the Proposal Deadline, a proposal of a stockholder is considered untimely. A copy of the relevant bylaw provisions related to stockholder proposals is available upon written request to the Company at: 78016801 N Capital of Texas Highway, Building 1; Suite 260,300, Austin, Texas 78731, Attention: Investor Relations.

Requirements for Universal Proxy Rules for the 2024 Annual Meeting:

HowIn addition to Obtain Directionssatisfying the foregoing requirements under our Amended and Restated Bylaws, to Locationcomply with the universal proxy rules stockholders who intend to solicit proxies in support of Annual Meetingdirector nominees other than the Company’s nominees must also comply with the additional requirements of Stockholders

Our Annual Meeting of Stockholders is being held at the time and place set forth aboveRule 14a-19 under the heading “General”Exchange Act.

Householding

The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process is commonly referred to as “householding.”

Brokers with account holders who are the Company’s stockholders may be householding the Company’s proxy materials. A single set of proxy materials may be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once a stockholder receives notice from its broker that it will be householding communications to such stockholder’s address, householding will continue until the stockholder is notified otherwise or until the stockholder notifies their broker or the Company that such stockholder no longer wishes to participate in householding.

If, at any time, a stockholder no longer wishes to participate in householding and would prefer to receive a separate proxy statement and annual report, such stockholder may (1) notify their broker, (2) direct their written request to: Investor Relations, Cassava Sciences, Inc., 6801 N. Capital of Texas Highway, Building 1; Suite 300, Austin, Texas 78731 or (3) contact the Investor Relations department by email at IR@cassavasciences.com. For directionsStockholders who currently receive multiple copies of the proxy statement or annual report at their address and would like to request householding of their communications should contact their broker. In addition, the Company will promptly deliver, upon written or oral request to the Annual Meeting, contactaddress or telephone number above, a separate copy of the Companyannual report and proxy statement to a stockholder at (512) 501-2444.

Internet Availabilitya shared address to which a single copy of Proxy Materials

This Proxy Statement, the form of proxy card and the Annual Report on Form 10-K are available at: http://investor.paintrials.com/annual-proxy.cfm.documents was delivered.
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PROPOSAL ONE

PROPOSAL ONE

ELECTION OF THREETWO CLASS IIIII DIRECTORS

Nominees

The Company’s Board of Directors consists of sevensix directors. The Company has a classified Board of Directors, which is divided into three classes of directors whose terms expire at different times. The three classes are currently comprised of the following directors:

Class I consists of Michael J. O’Donnell, who will serve until the 2025 annual meeting of stockholders and who will stand for re-election as a Class I director at such meeting; and

Class II consists of Richard J. Barry and Robert Z. Gussin, Ph.D., who will serve until the upcoming Annual Meeting and who will stand for re-election as Class II directors at this meeting; and

Class III consists of Remi Barbier, Sanford R. Robertson and Patrick J. Scannon, M.D., Ph.D., who will serve until the 2024 annual meeting of stockholders and who will stand for re-election as Class III directors at such meeting.

At each Annual Meeting of Stockholders,annual meeting, the successors to directors whose terms will then expire will be elected to serve from the time of election and qualification until the third annual meeting following election and until their successors have been duly elected and qualified.

Unless otherwise instructed, the proxy holders will vote the proxies received by them for the Company’s nominees named below, who are currently directors of the Company. The nominees have consented to be named as such in the proxy statementthis Proxy Statement and to continue to serve as directors if elected. If a nominee becomes unable or declines to serve as a director or if additional persons are nominated at the meeting, the proxy holders intend to vote all proxies received by them in such a manner as will assure the election of the nominees listed below if possible (or, if new nominees have been designated by the Company’s Board of Directors, in such a manner as to elect such nominees), and the specific nominees to be voted for will be determined by the proxy holders.

The nominees for Class III DirectorII directors are Remi Barbier, Sanford R. RobertsonRichard J. Barry and Patrick J. Scannon, M.D.,Robert Z. Gussin, Ph.D. Biographical information for the nominees can be found below in the section entitled “Directors and Executive Officers.”

The Company is not aware of any reason that the nominees will be unable or will decline to serve as director. The term of office of an individual elected as director will continue until the Company’s Annual Meetingannual meeting of Stockholdersstockholders held in 2021 or2026 and until a successor has been elected and qualified. Other than the relationships noted in the section “Legalentitled “Certain Relationships and Related Party Transactions – Legal Services,” there are no arrangements or understandings between any director or executive officer and any other person pursuant to which he is or was to be selected as a director or officer of the Company.

Vote Required

Each director will be elected by a plurality vote of the shares of Common Stock present or represented and entitled to vote on this matter at the meeting. Accordingly, the candidatecandidates receiving the highest number of affirmative votes of shares represented and voting on this proposal at the meeting will be elected as directordirectors of the Company. Votes withheld from a nominee and broker non-votes will be counted for purposes of determining the presence or absence of a quorum but, because directors are elected by a plurality vote, votes withheld and broker non-votes will have no impact once a quorum is present. See “Quorum; Abstentions; Broker Non-Votes.”

THE CLASS I AND IIIII DIRECTORS RECOMMEND THAT

STOCKHOLDERS VOTE FOR THE TWO CLASS IIIII NOMINEES LISTED ABOVE.SET FORTH IN THIS PROPOSAL ONE.

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PROPOSAL TWO

PROPOSAL TWO

APPROVAL OF 2018 OMNIBUS INCENTIVE PLAN(AN AMENDMENT TO THE COMPANY’S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO LIMIT THE LIABILITY OF CERTAIN OFFICERS OF THE COMPANY

Background and Purpose of Proposal

Effective as of August 1, 2022, the “2018 Plan”Delaware legislature amended Delaware’s General Corporation Law (DGCL) to allow corporations to limit the personal liability of corporate officers for money damages for breaches of their fiduciary duty of care (the “DGCL Amendment”)

The material terms. Previously, Delaware only allowed for such “exculpation clauses”—which must be set forth in the certificate of incorporation—for corporate directors. This disparity resulted in increased litigation against officers for alleged breaches of duties of care when such claims against directors were not available. We believe amending the Company’s Amended and Restated Certificate of Incorporation to limit the liability of certain officers of the 2018 Plan are summarized below.  A copyCompany (“the Amendment”) will allow us to treat the Company’s corporate officers and directors similarly and potentially reduce certain litigation expenses.

What the Amendment Permits

Under Delaware law, corporate officers and directors owe fiduciary duties of care and loyalty to the corporation and its shareholders. Previously, Delaware law (DGCL Section 102(b)(7)) permitted corporations to exculpate directors from claims for breaches of their duty of care, but did not permit any exculpation of corporate officers. Claims against officers for breaches of their duty of care have become especially common in the context of certain transactions, such as M&A. The DGCL Amendment now allows for the exculpation of officers, with some specific limitations. As a matter of policy, Delaware law still does not permit exculpation of claims against directors or officers for breaches of the full textduty of loyalty.

The proposed Amendment would apply only to certain senior officers—specifically, an individual who: (i) is or was president, chief executive officer, chief financial officer, chief legal officer, controller, treasurer or chief accounting officer; (ii) is or was a “named executive officer” identified in the corporation’s SEC filings; or (iii) has, by written agreement with the corporation, consented to be identified as an officer for purposes of accepting service of process.

Mirroring the previous scope of exculpation for directors, the proposed Amendment would not permit exculpation of officers from liability for: (i) breaches of duty of loyalty; (ii) acts or omissions not in good faith or involving intentional misconduct or knowing violations of law; or (iii) any transaction from which a director or officer derives an improper personal benefit. And as with directors, while Section 102(b)(7) allows for exculpation of officers for monetary liability, it does not permit exculpation for equitable relief, which means officers (as was already the case with directors) may still be held liable for injunctive or rescissory relief in connection with a breach of fiduciary duty of care.

Finally, the Amendment would not permit exculpation of officers for claims brought by or in the right of the 2018 Plancorporation, including claims brought derivatively by the corporation against officers for breaches of the duty of care, or brought by stockholders derivatively on behalf of the corporation where demand on the board is attachedproperly excused. Director exculpation is not subject to this same limitation.

The Board of Directors believe that adopting the Amendment makes good sense. It corrects an imbalance that plaintiffs’ lawyers have been exploiting to bring often frivolous claims against corporate officers that could not be maintained against directors, only to increase the settlement value of those lawsuits. Adoption of Proposal Two will enable certain officers to avoid such liability to shareholder plaintiffs when acting in good faith, and for the early dismissal of such claims, while still preserving the ability of the Company or its shareholders to bring claims for breaches of the duty of loyalty, or derivatively where appropriate.

The Board of Directors has adopted a resolution approving the Amendment. To be effective, the Amendment must be approved by our stockholders in the manner described in this proxy statement.

If this proposal is approved by our stockholders, we intend to file the Amendment with the Secretary of State of the State of Delaware as soon as practicable following the Annual Meeting, and the Amendment would become effective upon such filing. The Board of Directors reserves the right, notwithstanding stockholder approval of the proposal and without further action by the stockholders, not to proceed with filing the Amendment at any time before it becomes effective.

The form of the Amendment is set forth as Appendix A to this proxy statementstatement.

Vote Required

The approval of the Amendment requires the affirmative vote of a majority of the outstanding shares of our common stock.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT

STOCKHOLDERS VOTE FOR APPROVAL OF THE AMENDMENT TO THE COMPANY’S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO LIMIT THE LIABILITY OF CERTAIN OFFICERS OF THE COMPANY.
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PROPOSAL THREE

TO APPROVE THE COMPANY’S NON-EMPLOYEE DIRECTOR COMPENSATION PROGRAM

Background

In August 2022, two purported Company stockholders brought a derivative action in the Court of Chancery in Delaware, suing certain members of the Company’s Board of Directors (Robert Gussin, PhD, Michael O’Donnell, Sanford Robertson and Patrick Scannon, MD, PhD), purportedly on behalf of the Company, for equitable relief and damages as Appendix B.a result of their alleged breaches of their fiduciary duties on account of approving the Company’s 2020 Cash Incentive Bonus Plan (the “Cash Incentive Plan”), which, among other things, provided for the potential payment of cash compensation to the Company’s non-employee directors. Plaintiffs further alleged that the non-employee director defendants were unjustly enriched by their alleged entitlement to receive purportedly excessive compensation.

The Company’s non-employee director defendants have denied and continue to deny that they have committed or attempted to commit any violations of law or breached any duty owed to the plaintiff, the Company, or the Company’s stockholders and maintain that their conduct was proper and in compliance with applicable law and that they acted in good faith. Nonetheless, the Board of Directors has concluded that continued litigation over the non-employee director defendants’ entitlement to compensation under the Cash Incentive Plan would be unreasonably protracted and expensive, and therefore effective on March 16, 2023 the Board of Directors voluntarily amended the Cash Incentive Plan to remove all non-employee directors as beneficiaries under the Cash Incentive Plan and the non-employee directors consented to such removal. The non-employee directors’ share of potential benefits under the Cash Incentive Plan were completely forfeited to the Company and will not be allocated to any other participant under the Cash Incentive Plan. Our non-employee directors have not received, and as a result of such amendment will never receive, any payments under the Cash Incentive Plan. Further, our non-employee directors did not receive any form of compensation from the Company in 2021, 2022 and 2023 to date.

Purpose of Proposal

We believe highly qualified directors are critical to the Company’s success. In order to attract, motivate, retain and reward non-employee directors to the Company’s Board of Directors, we believe that stockholder approval of a forward-looking compensation program for non-employee directors (the “Non-employee Director Compensation Program”) is in the best interests of the Company and its stockholders.

To that end, in January 2023, the Company engaged Pearl Meyer & Partners, LLC (“Pearl Meyer”), a national compensation consulting firm, to advise the Nominating & Governance Committee of the Company’s Board of Directors regarding the amount and type of compensation to be paid to non-employee directors pursuant to the Non-employee Director Compensation Program, including a review of comparative data from a peer group of fifteen (15) publicly traded pre-commercial biotechnology companies having a market capitalization ranging from approximately $500 million to $2 billion that the Company established for this purpose based on Pearl Meyer’s review and recommendation. The Company’s market capitalization was approximately at the 55^th percentile of this peer group of companies at the time it was established. The peer group consists of the following companies:

The Nominating & Governance Committee, supported by an analysis performed by Pearl Meyer, then conducted a review and assessment of compensation payable to non-employee directors pursuant to the Non-employee Director Compensation Program and recommended to the Company’s Board of Directors that it adopt the Non-employee Director Compensation Program. The Board of Directors then reviewed the recommendation of the Nominating & Governance Committee and adopted the Non-employee Director Compensation Program effective on May 4, 2023, subject to stockholder approval at this Annual Meeting. The Company is seeking stockholder approval of the Non-employee Director Compensation Program in order to mitigate further litigation risk with respect to the compensation of the Company’s non-employee directors.

Based on Pearl Meyer’s analysis of this peer group (i) annual cash and initial equity compensation (assuming service on two standing Board committees) per non-employee director approximates the 70^th percentile of the peer group for total initial year compensation per average director and (ii) annual cash and annual equity compensation (assuming service on two standing Board committees) per non-employee director approximates the 55^th percentile of the peer group for total annual compensation per average director. These percentiles are subject to change

during the term of the Non-employee Director Compensation Program based on changes to (i) the Company’s stock price and other valuation assumptions used to derive these percentiles and (ii) the compensation practices of this peer group.

Summary of the Non-employee Director Compensation Program

The following is a summary of the material features of the Non-employee Director Compensation Program. This summary of 2018 Plan isdoes not intendedpurport to be a complete description of 2018 Planall the provisions of the Non-employee Director Compensation Program and is qualified in its entirety by reference to the actual textNon-employee Director Compensation Program, a copy of 2018 Planwhich is attached as Appendix B to which referencethis Proxy Statement and is made.incorporated herein by reference.

The 2018 Plan was adopted by ourOnly the non-employee members of the Company’s Board of Directors on January 31, 2018.  The 2018 Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Code, to our employees and any parent and subsidiary employees, and for the grant of non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, cash-based awards (including annual cash incentives and long-term cash incentives), and any combination thereof to our employees, directors, and consultants and to employees, directors, and consultants of certain affiliated entities.  As of March 21, 2018, we had approximately two officers who are directors, five non-employee directors, seven non-officer employees, and nine consultants that were eligible to participate in 2018 Plan.  Such persons are eligible to participate in 2018 Planthe Non-employee Director Compensation Program. There are currently five non-employee directors who are eligible to participate in the Non-employee Director Compensation Program. If approved by the stockholders of the Company, the Non-employee Director Compensation Program will become effective on May 4, 2023, the date of the Annual Meeting (the “Effective Date”).

The Non-employee Director Compensation Program provides for a $10,000 annual retainer, payable in arrears to each member of the Company’s Board of Directors for each 12-month period of service during the 36-month period following the Effective Date, pro-rated for partial periods of service based on the basis that their participationnumber of quarters in which the non-employee director provides an incentive to continue in serviceat least one day of service. The Non-employee Director Compensation Program also provides for the following automatic grants of stock options to the Company and related entities, and to helpnon-employee members of the Company compete effectively with other enterprisesCompany’s Board of Directors:

An initial nonqualified stock option grant on the date of the Annual Meeting for the servicesright to purchase 20,000 shares of qualified persons.  As of February 28, 2018, the closing price of a share of our Common StockCompany’s common stock, vesting monthly over 36 months;

An annual nonqualified stock option grant on the NASDAQ Global Select Market was $6.50.

The 2018 Plan will allow us to continue to offer equity and other awards, which we believe is necessary for us to retain, motivate and attract experienced and highly qualified service providers.

Stockholder approval of 2018 Plan not only will allow us to grant these awards, it will also permit us to structure incentive compensation intended to preserve certain tax deductions under Section 162(m)date of the Internal Revenue Code (“Section 162(m)”).  We referCompany’s annual meetings of stockholders in 2024 and 2025 for the right to these awards as qualified performance-based awards.  Section 162(m) denies a corporation’s tax deduction for compensation it pays to certain executive officers in excess of $1 million per year for each such officer.  Section 162(m) provides an exception to this limitation for qualified performance-based compensation, the material terms of which must be approved by a corporation’s stockholders.  To that end, in connection with approval of 2018 Plan, stockholders are also being asked to approve the management objectives upon which awards intended to qualify as performance-based awards may be based, the annual maximum limits per individual, and eligible employees, as further described below.  We may or may not grant awards under 2018 Plan that are intended to qualify as performance-based awards.  However, to preserve our ability to grant awards intended to qualify as performance-based awards, Section 162(m) requires that stockholders must approve the management objectives upon which awards intended to qualify as performance-based awards may be based, the annual maximum limits per individual, and eligible employees.  Subject to the requirements of Section 162(m), if the material terms under 2018 Plan are not re-approved by stockholders, we will not make any grants under 2018 Plan to our “covered employees” as defined in Section 162(m) that are intended to qualify as performance-based awards, or their successors, until such time, if any, as stockholder approval of a subsequent similar proposal is obtained.

We have reserved 1,000,000purchase 10,000 shares of Common Stockthe Company’s common stock, vesting monthly over 12 months; and

An additional nonqualified stock option grant on the date of the Annual Meeting (and on the date of the Company’s annual meetings of stockholders in 2024 and 2025) for issuance under the 2018 Plan. 

Theright to purchase 2,500 shares of the Company’s common stock for service on one standing committee of the Board of Directors or a committee thereof (the “Administrator”) administers5,000 shares of the 2018 Plan.  In the case of awards intended to qualify as “performance-based compensation” within the meaning of Section 162(m), the Administrator consists ofCompany’s common stock for service on two or more “outside directors” within the meaning of Section 162(m).  The Administrator has the power to determine and interpret the terms and conditionsstanding committees of the awards, including,Board of Directors, vesting monthly over 12 months.

Newly appointed or elected members of the Board of Directors would qualify to receive a nonqualified stock option grant for the right to purchase 20,000 shares of the Company’s common stock, vesting monthly over 36 months, and would thereafter receive benefits in the same manner as applicable,other non-employee directors under the employees, directors, and consultants whoNon-employee Director Compensation Program.

All stock options will receive awards,be granted pursuant to the Company’s 2018 Equity Incentive Plan. Stock options will have an exercise price the number of shares subject to each award, the vesting schedule and exercisability of the awards, the restrictions on transferability of awards, and the form of consideration payable upon exercise. 

The 2018 Plan allows for the grant of incentive stock options that qualify under Section 422 of the Code only to our employees and employees of any of our parents or subsidiaries.  Non-qualified stock options may be granted to our employees and directors and those of certain of our affiliates.  The per share exercise price of all options granted under the 2018 Plan must be equal to at least the per share fair market value of the Common Stock on the date of grant.  The term of an incentive stock option may not exceed 10 years, except that with respect to any employee who owns more than 10% of the voting power of all classes of our outstanding stock or any parent or subsidiary corporation as of the grant date, the term must not exceed five years, and the exercise price must equal at least 110% of the fair market value on the grant date.

After the continuous service of an employee, director or consultant terminates, he or she may exercise his or her option, to the extent vested, for the period of time specified in the option agreement. No option may be exercised later than the expiration of its term.

The 2018 Plan allows for the grant of stock appreciation rights.  Stock appreciation rights allow the recipient to receive the appreciation in the fair market value of Common Stock betweena share of the dateCompany’s common stock at the time of grant and will have a maximum ten-year term.

If the exercise date.  The  AdministratorNon-employee Director Compensation Program is not approved by the Company’s stockholders, the Company will determinenot provide its non-employee directors with compensation under this Non-employee Director Compensation Program. We believe that such an outcome may have an adverse effect on the terms of stock appreciation rights, including when such rights become exercisableCompany’s ability to attract and whether to pay the increased appreciation in cash or with shares of  Common Stock, or a combination thereof, except that the base appreciation amount used to determine the cash or shares to be issued pursuantretain qualified directors to the exerciseCompany’s Board of a stock appreciation right will be no less than 100%Directors.

Amendment and Termination

The Board of Directors generally may amend or terminate the Non-employee Director Compensation Program at any time and for any reason by unanimous vote of the fair market value per shareCompany’s Board of Directors, subject to approval by the Company’s stockholders.

New Plan Benefits

Pursuant to the Non-employee Director Compensation Program, as discussed in further detail in the section entitled “Summary of the Non-employee Director Compensation Program” above, each of the Company’s non-employee directors is eligible to receive the following: (i) a $10,000 annual retainer for each 12-month period of service during the 36-month period following the Effective Date; (ii) an initial grant on the date of grant. this Annual Meeting of 20,000 stock options, vesting over 36 months; (iii) an annual grant on the date of the Company’s annual meetings of stockholders in 2024 and 2025 of 10,000 stock options, vesting over 12 months; and (iv) an annual grant at this Annual Meeting (and on the date of the Company’s annual meetings of stockholders in 2024 and 2025) of 2,500 stock options for service on one standing committee of the Board of Directors or 5,000 stock options for service on two or more standing committees of the Board of Directors, vesting over 12 months. In addition, any newly appointed or elected member of the Board of Directors will receive 20,000 stock options, vesting over 36 months.

AfterThe following table summarizes the continuous serviceaggregate cash and number of an employee, directorstock options that the Company’s current non-employee directors as a group will receive if they remain non-employee directors during the term of the Non-employee Director Compensation Program and continue to serve on the same committees on which they currently serve (if any), and further assumes that there will be no newly appointed or consultant terminates, he or she may exercise his or her stock appreciation right, elected members

to the extent vested, onlyCompany’s Board of Directors during the term of the Non-employee Director Compensation Program. This table also highlights the fact that none of the Company’s executive officers (including our NEOs) or employees will receive any cash, awards, or benefits under the Non-employee Director Compensation Program.

(1) Dr. Friedmann passed away in December 2022 following a brief journey with cancer but is included as an NEO for SEC disclosure purposes since he was a corporate officer during 2022.

(2) Dr. Kupiec served as our Chief Clinical Development Officer until December 19, 2022, when he was named as our Chief Medical Officer.

(3) Mr. Barry, Dr. Gussin, Mr. O’Donnell, Mr. Robertson, and Dr. Scannon are each eligible to receive the extent providedfollowing, subject to their continued service on our Board of Directors during the term of the Non-employee Director Compensation Program: (i) a $10,000 annual retainer for each 12-month period of service during the 36-month period following the Effective Date; (ii) an initial grant in 2023 of 20,000 stock options, vesting over 36 months; and (iii) an annual grant in 2024 and 2025 of 10,000 stock options, vesting over 12 months. In addition, Mr. Barry (as a member of the Audit Committee and Nominating and Governance Committee), Dr. Gussin (as a member of the Audit Committee and Compensation Committee), and Mr. Robertson (as a member of our Audit Committee, Compensation Committee, and Nominating and Governance Committee), are each entitled to an additional annual grant in 2023, 2024 and 2025 of 5,000 stock options for their service on such committees, vesting over 12 months. Mr. O’Donnell and Dr. Scannon do not serve on any standing committees of the Board of Directors. The fair value of the stock appreciation right agreement.

The 2018 Plan allows foroptions subject to each non-employee director’s award will not be determinable until the grant date of restricted stock.  Restricted stocksuch award.

Historical Plan Benefits

(1) No awards are shares of Common Stock that vest in accordance with terms and conditions, if any, established byhave been granted under the Administrator.  The Administrator will determine the number of shares of restricted stock grantedNon-employee Director Compensation Program to any employee, director or consultant.  The Administrator may impose whatever conditions, ifperson, including (i) any on vesting it determines to be appropriate.  For example, the Administrator may set restrictions based on the achievement of specific performance goals.  Shares of restricted stock that do not vest are subject to our right of repurchase or forfeiture.

The 2018 Plan allows for the grant of restricted stock units.  Restricted stock units are awards that will result in payment to a recipient at the end of a specified period only if the vesting criteria established by the Administrator, if any, are achieved or the award otherwise vests.  The Administrator may impose whatever conditions, if any, to vesting, or restrictions and conditions, if any, to payment that it determines to be appropriate.  The Administrator may set restrictions based on the achievement of specific performance goals or on the continuation of service or employment.  Payments of earned restricted stock units may be made, in the Administrator’s discretion, in cash, with shares of Common Stock or other securities, or a combination thereof.

The 2018 Plan also allows for the grant of awards denominated in cash that may be settled in cash or shares of Common Stock, which may be subject to restrictions, as established by the Administrator. 

The Administrator will determine the provisions, terms, and conditions of each award including vesting schedules, forfeiture provisions, form of payment (cash, shares, or other consideration) upon settlement of the award, payment contingencies, and satisfactionassociate of any performance criteria.  The performance criteria established by the Administrator for any awards intended to qualify as “performance-based compensation” for purposes of Section 162(m) will be one of, or combination of, the following: net earnings or net income (before or after taxes); earnings per share; revenues or sales (including net sales or revenue growth); net operating profit; regulatory filings; product approvals; return measures (including return on assets, net assets, capital, invested capital, equity, sales, or revenue); cash flow (including operating cash flow, free cash flow, cash flow return on equity, and cash flow return on investment); earnings before or after taxes, interest, depreciation, or amortization; gross or operating margins; productivity ratios; share price (including growth measures and total stockholder return); expense targets; margins; operating efficiency; market share; working capital targets and change in working capital; economic value added or EVA® (net operating profit after tax minus the sum of capital multiplied by the cost of capital); or net operating income.  The performance criteria may be applicable to our company, our affiliates or any individual business units of our companydirectors (including nominees) or any affiliateexecutive officers and may be measured over any specified period, on an absolute basis or relative(ii) to a pre-established target, to previous years’ results or to a designated comparison group, in each case as specified by the Administrator.

The 2018 Plan allows for the transfernon-employee members of awards under the 2018 Plan only (i) by will, (ii) by the lawsour Board of descent and distribution and (iii) for awards other than incentive stock options, to the extent authorized by the Administrator to certain persons or entities.  Only the recipient of an incentive stock option may exercise such award during his or her lifetime.

In the event of certain changes in our capitalization, to prevent enlargement of the benefits or potential benefits available under the 2018 Plan, the Administrator will make adjustments to oneDirectors. Accordingly, no person has received 5% or more of the numbertotal awards under the Non-employee Director Compensation Program.

(2) All of shares thatthe non-employee directors who are covered by outstanding awards, the exercise or purchase price of outstanding awards, the numerical share limits contained in the 2018 Plan,nominees for election as a director (i.e., Mr. Barry and any other terms that the Administrator determines require adjustment.Mr. Gussin) are included within this group.

The 2018 Plan provides for full acceleration of vesting in the event a grantee’s service provider status with the Company is terminated by the Company (or any successor entity) or a related entity without “cause” or by the grantee for “good reason”, in either case at any time following certain corporate transactions.  In addition, the 2018 Plan providers for full acceleration of vesting in the event of certain changes in control.

The 2018 Plan will automatically terminate ten years following the date it becomes effective, unless we terminate it sooner.  In addition, the Board of Directors has the authority to amend, suspend or terminate the 2018 Plan provided such action does not impair the rights under any outstanding award.

Certain U.S. Federal Income Tax Consequences

The following is a general summary of the federal income tax consequences of 2018 Plan transactions is based upon federal income tax laws in effect onto U.S. taxpayers and the date of this proxy statement.  This summary does not purport to be complete, and does not discuss non-U.S., state or local tax consequences.  As such, please refer to the applicable provisionsCompany of the Codecompensation payable under the Non-employee Director Compensation Program. Tax consequences for additional information. any particular individual may be different. Participants should

consult with their own tax advisors for the latest information on how compensation payable under the Non-employee Director Compensation Program will be taxed in their particular circumstances.

Non-Qualified Stock Options.    Except as provided under Section 409A ofNo amount is included in the Code discussed below (“Section 409A”), the granttaxable income of a non-qualified stock option under the 2018 Plan generally will not result in any U.S. Federal income tax consequences to the grantee or to the Company.  Upon exercise of a non-qualified stock option, the grantee is generally subject to income taxes at the rate applicable to ordinary compensation income on the difference between the option exercise price and the fair market value of the shares on the date of exercise.  This income is generally subject to withholding for U.S. Federal income and employment tax purposes. The Company is entitled to an income tax deduction in the amount of the income recognized by the grantee, subject to possible limitations imposed by Section 162(m) and so long as the Company withholds the appropriate taxes with respect to such income, if required, and the grantee’s total compensation is deemed reasonable in amount.  Any gain or loss on the grantee’s subsequent disposition of the shares of Common Stock will receive long or short-term capital gain or loss treatment, depending on whether the shares are held for more than one year following exercise.  The Company does not receive a tax deduction for any such gain. 

Absent special limitations on exercisability, in the eventparticipant when a nonqualified stock option is granted with anawarded or vests. Upon exercise price less than 100% of the fair market value of the Common Stock on the date of grant or amended in certain respects, such option may be considered deferred compensation and subject to Section 409A, which provide rules regarding the timing of payment of deferred compensation.  An option subject to Section 409A which fails to comply with the rules of Section 409A can result in the acceleration of income recognition, an additional 20% tax obligation, plus potential penalties and interest, and similar treatment under state law. 

Incentive Stock Options.    The grant of an incentivea nonqualified stock option, under the 2018 Plana participant will not result in any U.S. Federal income tax consequences to the grantee or to the Company.  A grantee recognizes no U.S. Federal taxable income upon exercising an incentive stock option (subject to the alternative minimum tax rules discussed below), and the Company receives no deduction at the time of exercise.  In the event of a disposition of stock acquired upon exercise of an incentive stock option, the tax consequences depend upon how long the grantee has held the shares of Common Stock.  If the grantee does not dispose of the shares within two years after the incentive stock option was granted, nor within one year after the incentive stock option was exercised, the grantee will recognize a long-term capital gain (or loss) equal to the difference between the sale price of the shares and the exercise price.  The Company is not entitled to any deduction under these circumstances. 

If the grantee fails to satisfy either of the foregoing holding periods, he or she must recognize ordinary income in the year of the disposition, which is referred to as a “disqualifying disposition.” The amount of such ordinary income generally is the lesser of (i) the difference between the amount realized on the disposition and the exercise price or (ii) the difference between the fair market value of the stock on the exercise date and the exercise price.  Any gain in excess of the amount taxed as ordinary income will be treated as a long or short-term capital gain, depending on whether the stock was held for more than one year.  The Company, in the year of the disqualifying disposition, is entitled to a deduction equal to the amount of ordinary income recognized by the grantee, subject to possible limitations imposed by Section 162(m) and so long as the Company withholds the appropriate taxes with respect to such income, if required, and the grantee’s total compensation is deemed reasonable in amount. 

The “spread” under an incentive stock option the difference between the fair market value of the shares at exercisereceived and the exercise price—is classified as an item of adjustment in the year of exercise for purposes of the alternative minimum tax.  If a grantee’s alternative minimum tax liability exceeds such grantee’s regular income tax liability, the grantee will owe the larger amount of taxes.  In order to avoid the application of alternative minimum tax with respect to incentive stock options, the grantee must sell the shares within the same calendar year in which the incentive stock options are exercised.  However, such a sale of shares within the same year of exercise will constitute a disqualifying disposition, as described above. 

In the event that an incentive stock option is amended in certain respects, such option may be considered deferred compensation and subject to the rules of Section 409A, which provides rules regarding the timing of payment of deferred compensation.  An option subject to Section 409A which fails to comply with the rules of Section 409A can result in the acceleration of income recognition, anprice. Any additional 20% tax obligation, plus potential penalties and interest, and similar treatment under state law.  In addition, the amendment of an incentive stock option may convert the option from an incentive stock option to a nonqualified stock option. 

Restricted Stock and Performance Stock.    The grant of restricted stock and performance shares will generally subject the recipient to ordinary compensation income on the difference between the amount paid for such stock and the fair market value of the shares on the date that the restrictions lapse.  This income is generally subject to withholding for U.S. Federal income and employment tax purposes.  The Company is entitled to an income tax deduction in the amount of the ordinary income recognized by the recipient, subject to possible limitations imposed by Section 162(m) and so long as the Company withholds the appropriate taxes with respect to such income, if required, and the grantee’s total compensation is deemed reasonable in amount.  Any gain or loss on the recipient’s subsequentrecognized upon a later sale or other disposition of the acquired shares will receive long or short-termis generally taxed as capital gain or loss treatment depending on how long the stock has been held since the restrictions lapsed.  The Company does not receive a tax deduction for any such gain. 

Recipients of restricted stock and performance shares may make an election under Section 83(b) of the Code, which is referred to as a “Section 83(b) Election,” toloss. A participant will also recognize as ordinary compensation income in the year that such restricted stock or performance shares are granted, the amount equal to the spread betweencash received under the amount paid for such stock (if any) and the fair market valueNon-employee Director Compensation Program.

Tax Effect on the date of the issuance of the stock.  If such an election is made, the recipient recognizes no further amounts of compensation income upon the lapse of any restrictions and any gain or loss on subsequent disposition will be long or short-term capital gain to the recipient.  The Section 83(b) Election must be made within thirty days from the time the restricted stock or performance share is issued. Company

Stock Appreciation Rights.    Recipients of stock appreciation rights, which are referred to as “SARs,” generally should not recognize income until such rights are exercised, assuming there is no ceiling on the value of the right and Section 409A does not apply.  Upon exercise, the grantee will normally recognize taxable ordinary income for U.S. Federal income tax purposes equal to the amount of cash and fair market value the shares, if any, received upon such exercise.  Grantees who are employees will be subject to withholding for U.S. Federal income and employment tax purposes with respect to income recognized upon exercise of a SAR.  Grantees will recognize gain upon the disposition of any shares received on exercise of a SAR equal to the excess of (i) the amount realized on such disposition over (ii) the ordinary income recognized with respect to such shares under the principles set forth above.  That gain will be taxable as long or short-term capital gain depending on whether the shares were held for more than one year. 

The Company generally will be entitled to a tax deduction toin connection with the extent andexercise of nonqualified stock options under the Non-employee Director Compensation Program in the year that ordinary income is recognized by the grantee, subject to possible limitations imposed by Section 162(m) and so long as the Company withholds the appropriate taxes with respect to such income, if required, and the grantee’s total compensation is deemed reasonable in amount. 

A SAR can be considered deferred compensation and subject to Section 409A.  A SAR that does not meet the requirements of Section 409A, such as with respect to the timing of the delivery of cash or shares following vesting, can result in the acceleration of income recognition, an additional 20% tax obligation, plus potential penalties and interest, and similar treatment under state law. 

Performance Units.    Recipients of performance units generally should not recognize income until such units are converted into cash or shares of stock unless Section 409A applies.  Upon conversion, the grantee will normally recognize taxable ordinary income for federal income tax purposesamount equal to the amount of cash and fair market value the shares, if any, received upon such conversion.  Grantees who are employees will be subject to withholding for federal income and employment tax purposes with respect to income recognized upon conversion of the performance units.  Grantees will recognize gain upon the disposition of any shares received upon conversion of the performance units equal to the excess of (i) the amount realized on such disposition over (ii) the ordinary income recognized with respect torealized by a participant at the time the participant recognizes such shares under the principles set forth above.  That gain will be taxableincome, such as long or short-term capital gain depending on whether the shares were held for more than one year.when a participant exercises a nonqualified stock option. The Company generally will also be entitled to a tax deduction in connection with cash paid under the Non-employee Director Compensation Program in an amount equal to the extent and incash paid under the year that ordinary income is recognized by the grantee, subject to possible limitations imposed by Section 162(m) and so long as the Company withholds the appropriate taxes with respect to such income (if required) and the grantee’s total compensation is deemed reasonable in amount. Non-employee Director Compensation Policy.

Performance units also can be considered non-qualified deferred compensation and subject to the rules of Section 409A, which provide rules regarding the timing of payment of deferred compensation.  A grant of performance units that does not meet the requirements of Code Section 409A can result in the acceleration of income recognition, an additional 20% tax obligation, plus potential penalties and interest to such grantee, and similar treatment under state law. 

Dividends and Dividend Equivalents.    Recipients of stock-based awards that earn dividends or dividend equivalents will recognize taxable ordinary income on any dividend payments received with respect to unvested shares subject to such awards, which income is generally subject to withholding for U.S. Federal income and employment tax purposes.  The Company is entitled to an income tax deduction in the amount of the income recognized by a grantee, subject to possible limitations imposed by Section 162(m) and so long as the Company withholds the appropriate taxes with respect to such income, if required, and the individual’s total compensation is deemed reasonable in amount. 

The foregoing is only a summary of the U.S. Federaleffect of federal income tax consequences of 2018 Plan transactions,taxation upon participants and is based upon U.S. Federal income tax laws in effect on the date of this proxy statement.  Reference should be madeCompany with respect to compensation payable under the applicable provisions of the Code.  This summaryNon-employee Director Compensation Program. It does not purport to be complete or timely and does not discuss the tax consequences of a grantee’sservice provider’s death or the provisions of the income tax laws of any municipality, state, or foreign country toin which the granteeservice provider may reside.

Equity Compensation Plan Information

The Company currently maintains the following equity compensation plans that provide for the issuance of shares of the Company’s common stock to the Company’s officers and other employees, directors, and consultants, each of which has been approved by the Company’s stockholders: the 2008 Equity Incentive Plan (“2008 Plan”), 2018 Equity Incentive Plan (“2018 Plan”), and 2000 Employee Stock Purchase Plan (“ESPP”). The following table presents information as of December 31, 2022, with respect to compensation plans under which shares of the Company’s common stock may be subject.issued.

New(1) Includes outstanding stock options and awards for 1,692,798 shares of our common stock under the 2008 Plan Benefits. 

Awardsand 843,792 shares of our common stock under the 2018 Plan.

(2) Includes the weighted average stock price for outstanding stock options of $11.31 under the 2008 Plan are based onand $13.78 for the discretion2018 Plan.

(3) Represents 4,070,688 shares of the Administrator and/or the Company’s achievement of performance targets established by the Administrator, and it is not currently possible to determine the amounts that will be received by persons participating inour common stock for the 2018 Plan inand 58,017 for the future. ESPP. No future awards shall occur under the 2008 Plan.

Vote Required

The approval of the Non-employee Director Compensation Program requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT

STOCKHOLDERS VOTE FOR THE APPROVAL OF THE 2018 PLANNON-EMPLOYEE DIRECTOR COMPENSATION PROGRAM.

AND THE NUMBER OF SHARES RESERVED FOR ISSUANCE THEREUNDER.
‎

PROPOSAL THREEFOUR

RATIFICATION OF SELECTION OF ERNST & YOUNG LLP

AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TOFOR THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 20182023

The Board of Directors and the Audit Committee have selected Ernst & Young LLP, independent registered public accounting firm, to audit the financial statements of the Company for the fiscal year ending December 31, 20182023 and recommend that the stockholders vote to ratify such selection. Although action by stockholders is not required by law, the Board of Directors has determined that it is desirable to request approvalratification of this selection by the stockholders. Notwithstanding the selection or ratification, the Board of Directors and the Audit Committee, in their discretion, may direct the selection of a new independent registered public accounting firm at any time during the year, if the Board of Directors and the Audit Committee determine that such a change would be in the best interest of the Company.

We expect a representative of Ernst & Young LLP to be present at the meeting and will be afforded the opportunity to make a statement if he or she desires to do so, and is also expected to be available to respond to appropriate questions.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERSA

VOTE FOR THE APPROVAL OF PROPOSAL TO RATIFY THE SELECTION OF ERNST & YOUNG LLPFOUR.

AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2018.

Principal Accountant Fees and Services

Fees for professional services provided by our independent registered public accounting firm in each of the last two fiscal years, in each of the following categories were: