Reasons for Amendment of the Plan
Our Board,board of directors, the Compensationcompensation committee and management believe that the effective use of stock-based long-term incentive compensation is vital to our ability to achieve strong performance in the future. The Plan will maintain and enhance the key policies and practices adopted by our management and board of directors to align employee and stockholder interests and to link compensation to Company performance. In addition, our future success depends, in large part, upon our ability to maintain a competitive position in attracting, retaining and motivating key personnel. We believe that the increase in the number of shares available for issuance under our Plan is essential to permit our management to continue to provide long-term, equity-based incentives to present and future key employees, consultants and directors. Our board of directors believes that the number of shares currently remaining available for issuance pursuant to future awards under the Plan (3,461,717(3,971,119 shares as of April 14, 2022)March 15, 2023) is not sufficient for future granting needs. Our board of directors currently believes that if the amendment to the Plan is approved by stockholders, the additional 6,590,0006,970,817 shares available for issuance under the Plan will result in an adequate number of shares of common stock being available for future awards under the Plan during 2022.2023.
The following is a brief summary of the Plan, as amended. This summary is qualified in its entirety by reference to the text of the Plan, a copy of which is attached as Appendix A to this Proxy Statement.
Summary of Material Features of our Plan
General
The purposes of the Plan are to attract, retain and motivate officers and key employees (including prospective employees), directors, consultants and others who may perform services for the Company to compensate them for their contributions to the long-term growth and profits of the Company and to encourage them to acquire a proprietary interest in the success of the Company. These incentives are provided through the grant of stock options (including incentive stock options intended to be qualified under Section 422 of the Code), stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights and other stock-based and cash-based awards. Any of these awards may, but need not, be made as performance-based incentive awards.
Authorized Shares
If this Proposal 2 is approved by our stockholders, the number of Shares that may be issued from time to time pursuant to this Plan shall be the sum of: (i) 6,590,0006,970,817 additional shares of Class A common stock, (ii) 3,461,7173,971,119 shares of Class A common stock remaining available for issuance as of April 14, 2022,March 15, 2023, and (iii) 8,462,1176,453,724 shares issuable upon exercise of outstanding options under the Company’s prior plan, as adjusted at the Closing of the Business Combination.
If shares covered by an award are not purchased or are forfeited or expire, or otherwise terminate without delivery of any shares subject thereto, then such shares will, to the extent of any such forfeiture, termination, cash-settlement or expiration, be available for future grant under the Plan. The payment of dividend equivalent rights in cash in conjunction with any outstanding awards will not be counted against the shares available for issuance under the Plan. Shares tendered by a participant, repurchased by the Company using proceeds from the exercise of stock options or withheld by the Company in payment of the exercise price of a stock option or to satisfy any tax withholding obligation for an award will not again be available for future awards.
Adjustments to Shares Subject to the Plan
In the event of a recapitalization, stock split, reverse stock split, stock dividend, spinoff, split up, combination, reclassification or exchange of shares, merger, consolidation, rights offering, separation, reorganization or liquidation or any other change in the corporate structure or shares, including any extraordinary dividend or extraordinary distribution that results in any increase or decrease in the number of issued shares, the administrator (as defined below) has the authority to make appropriate adjustments to the aggregate number of shares and class of shares as to which awards may be granted, the number of shares covered by each outstanding award and the option price for each related outstanding option and stock appreciation right.
Administration
The compensation committee of the board of directors will administer the Plan (referred to as the “administrator”); provided that such committee consists of at least two members of the board of directors, each of whom qualifies as a non-employee director under Rule 16b-3 of the Exchange Act, and as an independent director under the rules of