Use these links to rapidly review the document
TABLE OF CONTENTS

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No.          )

Table of Contents

NETLIST, INC.

TO OUR STOCKHOLDERS:

You are cordially invited to attend the 20162018 Annual Meeting of Stockholders (the “Annual Meeting”"Annual Meeting") of Netlist, Inc., a Delaware corporation (the “Company,” “Netlist,” “we,” “us”"Company," "Netlist," "we," "us" or “our”"our"), to be held on Wednesday, June 8, 2016August 15, 2018 at 10:00 a.m., Pacific Time, to be held at the offices of Merrill Corporation at 2603 Main Street, Suite 100,610, Irvine, California 92614, for the following purposes, which are further described in the accompanying proxy statement:

Your vote is important. We encourage you to sign and return your proxy before the Annual Meeting so that your shares will be represented and voted at the Annual Meeting even if you cannot attend in person.

Thank you for your ongoing support of and interest in Netlist.

May 2, 2016

NETLIST, INC.

175 Technology

Suite 150

Irvine, California 92618

(949) 435‑0025

NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS

The 2016 Annual Meeting of Stockholders (the “Annual Meeting”) of Netlist, Inc. (the “Company,” “Netlist,” “we,” “us” or “our”) will be held on Wednesday, June 8, 2016 at 10:00 a.m., Pacific Time, at the offices of Merrill Corporation 2603 Main Street, Suite 100, Irvine, California, 92614 for the following purposes, which are further described in the accompanying proxy statement:

Our Board of Directors, recommends a vote “FOR” alleach to serve until our 2019 annual meeting of the director nominees (proposal (1))stockholders and “FOR” each of the re-approval of the Amended Plan (proposal (2)), the compensation of our named executive officers (proposal (3))until his successor is duly elected or appointed and the ratification ofqualified or until his earlier resignation or removal;

        Our Board of Directors recommends a vote "FOR" all of the director nominees in Proposal 1, and "FOR" each of Proposals 2, 3, 4 and 5.

        Your vote is important. Whether or not you plan to attend the Annual Meeting in person, please date, sign and return the enclosed proxy card in the enclosed postage prepaid envelope or submit your vote via the Internet or by telephone as promptly as possible, to ensure your shares will be voted at the Annual Meeting. Your proxy is being solicited by our Board of Directors.

        To obtain directions to attend the Annual Meeting and vote in person, please call Investors Relations at (212) 739-6740. If you have questions about the Annual Meeting or need assistance voting your shares, please contact our proxy solicitor, Georgeson LLC, using the following contact information:

Georgeson LLC
1290 Avenue of the Americas, 9th Floor
New York, NY 10104
866-828-4305

        Thank you for your ongoing support of and interest in Netlist.

July    , 2018

Table of Contents

NETLIST, INC.
175 Technology
Suite 150
Irvine, California 92618
(949) 435-0025

NOTICE OF 2018 ANNUAL MEETING OF STOCKHOLDERS

        The 2018 Annual Meeting of Stockholders ("Annual Meeting") of Netlist, Inc. ("Company," "Netlist," "we," "us" or "our") will be held on Wednesday, August 15, 2018 at 10:00 a.m., Pacific Time, at the offices of Merrill Corporation at 2603 Main Street, Suite 610, Irvine, California, 92614, for the following purposes, which are further described in the accompanying proxy statement:

1.

To elect four directors to our Board of Directors, each to serve until our 2019 annual meeting of stockholders and until his successor is duly elected or appointed and qualified or until his earlier resignation or removal



2.

To ratify the appointment of KMJ Corbin & Company LLP as our independent registered public accounting firm for our fiscal year ending December 29, 2018;



3.

To approve an amendment to our Restated Certificate of Incorporation to increase the number of shares of our common stock that we are authorized to issue by approximately 100%;



4.

To approve an amendment to our Restated Certificate of Incorporation to effect, on or before June 30, 2019, a reverse split of our authorized, issued and outstanding common stock, at a ratio of between 1-for-2 and 1-for-20 and if and when and at such ratio as may be determined by our Board of Directors;



5.

To approve the adjournment of the Annual Meeting, if necessary or advisable to permit further solicitation of proxies in the event there are not sufficient votes at the time of the Annual Meeting to approve any or all of the foregoing items of business; and



6.

To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

Only stockholders of record at the close of business on April 19, 2016June 18, 2018 are entitled to receive notice of and to vote at the Annual Meeting. A list of stockholders entitled to vote at the Annual Meeting will be available for examination at the Annual Meetinginspection by any stockholder for any purpose germane to the meeting. The list will also be available for the same purpose for ten days prior to the Annual Meeting at our principal executive offices at 175 Technology, Suite 150, Irvine, California 92618.

To obtain directions to attendduring normal business hours for the 10 days before the Annual Meeting, and vote in person, please call Investors Relationsas well as at (212) 986‑6667. We have enclosed our 2015 annual report, including financial statements, and the proxy statement with this notice of the Annual Meeting.

Table of Contents

NETLIST, INC.

175 Technology,

Suite 150

Irvine, California 92618

PROXY STATEMENT
2018 ANNUAL MEETING OF STOCKHOLDERS

TABLE OF CONTENTS

Table of Contents

NETLIST, INC.
175 Technology, Suite 150
Irvine, California 92618

PROXY STATEMENT
2018 ANNUAL MEETING OF STOCKHOLDERS

GENERAL INFORMATION

PROXY STATEMENT

GENERAL INFORMATION

We areNetlist, Inc., a Delaware corporation ("Company," "Netlist," "we," "us" or "our"), is sending you this proxy statement ("Proxy Statement") in connection with the solicitation of proxies by our Board of Directors (the “Board("Board of Directors”Directors" or the “Board”"Board") for use at the 2016our 2018 Annual Meeting of Stockholders (the “Annual Meeting”) of Netlist, Inc., a Delaware corporation (the “Company,” “Netlist,” “we,” “us” or “our”("Annual Meeting"), which we will hold at the offices of Merrill Corporation at 2603 Main Street, Suite 610, Irvine, California 92614, on Wednesday, June 8, 2016August 15, 2018 at 10:00 a.m., Pacific Time, at the offices of Merrill Corporation, 2603 Main Street, Suite 100, Irvine, California 92614. The record date for the Annual Meeting is April 19, 2016. All holders of record of our common stock on the record date are entitled to notice of and to vote at the Annual Meeting andor any adjournment or postponement thereof. This proxy statement is being initially distributed to our stockholders on or about May 2, 2016.thereof, for the purposes described in this Proxy Statement.

Whether or not you plan to attend the Annual Meeting in person, please date, sign and return the enclosed proxy card in the enclosed postage prepaid envelope or submit your vote via the Internet or by telephone as promptly as possible, in the postage prepaid envelope provided, to ensure that your shares will be voted at the Annual Meeting. Unless you instruct otherwise, in the proxy, any vote submitted by proxy that is not revoked will be voted at the Annual Meeting:Meeting as follows:

Voting Information

At the Annual Meeting, if necessary or advisable to permit further solicitation of proxies in the event there are not sufficient votes willat the time of the Annual Meeting to approve any or all of the foregoing items of business; and

Delivery of Proxy Materials

        In accordance with rules adopted by the Securities and Exchange Commission ("SEC"), we have elected to deliver our proxy materials for the Annual Meeting, including this Proxy Statement, our annual report on Form 10-K (the "Annual Report") for our fiscal year ended December 30, 2017 ("Fiscal 2017"), and a proxy card for the Annual Meeting, to our stockholders by mail or, if a stockholder has previously agreed, by e-mail. Accordingly, we expect to mail or, to stockholders who have agreed, e-mail this Proxy Statement and our other proxy materials to our stockholders on or about July 11, 2018. If you would like to receive our proxy materials for future annual meetings of our stockholders by e-mail rather than by mail, you may submit such consent to electronic delivery by

Table of Contents

writing to the attention of our Corporate Secretary at the address of our principal executive offices or by following the instructions on the accompanying proxy card.

        In addition, we are also making all of our proxy materials for the Annual Meeting available on the Internet. Applicable SEC rules require us to notify our stockholders of the availability of our proxy materials on the Internet with the following notice:

Important Notice Regarding the Availability of Proxy Materials
for the Stockholder Meeting to be countedheld on Wednesday, August 15, 2018

This Proxy Statement and the Annual Report are available at
http://proxy.netlist.com

Record Date; Outstanding Shares

        All stockholders that owned our common stock at the close of business on June 18, 2018, the date fixed by written ballot.the Board as the record date for the Annual Meeting, are entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof.

        At the close of business on June 18, 2018, there were 100,499,508 outstanding shares of our common stock.

Voting Matters

Voting Rights

        Each share of our common stock entitles the owner of the share to one vote on all matters to be voted on at the Annual Meeting.

Quorum Requirement

        The presence, in person or by a proxy relating to any matter to be acted uponon at the Annual Meeting, of the holders of a majority of the outstanding shares of our common stock will constitute a quorum for purposes of the Annual Meeting. Abstentions and broker non‑votes,non-votes, which are explained under "Effect of Not Providing Voting Instructions; Broker Non-Votes" below, andas well as shares as to which authority to vote on any proposal is withheld, are each included in the determination of the number of sharescounted as present at the Annual Meeting for purposes of obtainingdetermining a quorum.

Effect of Not Providing Voting Instructions; Broker Non-Votes

        Stockholders of Record.    You are a "stockholder of record" if your shares are registered directly in your name with Computershare Trust Company, N.A., our transfer agent. If you were a stockholder of record at the close of business on the record date for the Annual Meeting and you submit a valid proxy that does not provide voting instructions with respect to your shares, all shares represented by your proxy will be voted in accordance with the recommendation of our Board on each proposal to be presented at the Annual Meeting, as described in this Proxy Statement.

        Beneficial Owners of Shares Held in Street Name.    You are a beneficial owner of share held in "street name" if your shares are not held of record in your name but are held by a broker or other nominee on your behalf as the beneficial owner. If your shares were held in street name at the close of business on the record date for the Annual Meeting, it is critical that you provide voting instructions to your broker or other nominee if you want your vote to count on the election of directors (Proposal 1) and the approval of an adjournment of the Annual Meeting, if necessary or advisable to permit further solicitation of proxies (Proposal 5). These proposals constitute "non-routine" matters on which a broker or other nominee is not entitled to vote shares held for a beneficial owner without receiving specific voting instructions from the beneficial owner. As a result, if you hold your shares in street name and

Table of Contents

you do not instruct your broker or other nominee on how to vote on Proposals 1 and 5, then no vote would be cast on either of these proposals on your behalf and a "broker non-vote" would occur (except that no broker non-votes are expected with respect to Proposal 5 because of the voting requirement for this proposal, as described below). Your broker or other nominee will, however, have discretion to vote uninstructed shares on the ratification of the appointment of KMJ as our independent registered public accounting firm (Proposal 2), the approval of an amendment to our Restated Certificate to increase the number of authorized shares of our common stock (Proposal 3), and the approval of an amendment to our Restated Certificate to effect, if and when and at such ratio as may be determined by our Board, a Reverse Stock Split (Proposal 4), because these proposals constitute "routine" matters on which a broker or other nominee is entitled to vote shares held on behalf of a beneficial owner even without receiving voting instructions from the beneficial owner. Generally, brokers and other nominees will vote any such uninstructed shares in accordance with the recommendation of the Board for the applicable proposal. As a result, broker non-votes are not expected to occur in the vote on Proposals 2, 3 or 4, and any uninstructed shares held in street name are expected to be voted on each such proposal in accordance with the recommendation of our Board as described in this Proxy Statement.

Voting Requirements

Under our Amended and Restated Bylaws (our “Bylaws”("Bylaws"), when a quorum is present at any meeting of our stockholders, directors are elected by a plurality of the votes cast by the stockholders entitled to vote in the election of directors, and all other matters are determined by a majority of the votes cast affirmatively or negatively on the proposal, except when a different vote is required by law, the national securities exchange on which we are listed, our Restated Certificate of Incorporation or our Bylaws. As a result, abstentionsAbstentions and broker non‑votesnon-votes are not considered votes cast on any of the proposals presented at the Annual Meeting and will have no effect on the voting results for such proposals.

A “broker non‑vote” occurs when a broker or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that proposal and has not received instructions from the beneficial owner. Broker non‑votes are not deemed to be votes cast on a proposal. Under applicable rules, brokers or other nominees have discretionary voting power with respect to matters that are considered routine, but not with respect to non‑routine matters. Proposal No. 1 (the election of directors), Proposal No. 2

(re-approval of the Amended Plan) and Proposal No. 3 (approval, on an advisory basis, of the compensation of our named executive officers) are considered non‑routine matters and Proposal No. 4 (ratification of independent registered public accounting firm) is considered a routine matter. As a result, at the Annual Meeting:

1.

Proposal 1 will be determined by a broker or other nominee cannot vote without instructions on Proposal Nos. 1, 2 or 3 but is entitled to vote without instructions on Proposal No. 4. The voting requirement for eachplurality of the proposals tovotes cast on the proposal, meaning that the four nominees receiving the highest number of affirmative votes will be consideredduly elected as directors. As a result, abstentions and broker non-votes, if any, will have no effect on the outcome of this proposal because of the nature of this voting requirement.



2.

Proposal 2 must be approved by the affirmative vote of a majority of the votes cast on the proposal by shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal at the Annual Meeting. As a result, abstentions, if any, will have no effect on the outcome of this proposal because abstentions are not considered to be present or entitled to vote with respect to the proposal for which the occur, and broker non-votes are not expected to occur on this proposal because, as discussed above, brokers and other nominees will be entitled to vote uninstructed shares held in street name on this proposal.



3.

Proposal 3 must be approved by the affirmative vote of a majority of the issued and outstanding shares of our common stock as of the record date for the Annual Meeting, which is described underrequired by applicable law. As a result, abstentions will have the discussionsame effect as a vote against this proposal because of eachthe nature of this voting requirement, and broker non-votes are not expected to occur on this proposal because, as discussed above, brokers and other nominees will be entitled to vote uninstructed shares held in street name on this proxy statement.

If anyproposal.



4.

Proposal 4 must be approved by the affirmative vote of a majority of the issued and outstanding shares of our common stock as of the record date for the Annual Meeting, which is required by applicable law. As a result, abstentions will have the same effect as a vote against this proposal because of the nature of this voting requirement, and broker non-votes are not expected to occur on this proposal because, as discussed above, brokers and other matters are properly presentednominees will be entitled to vote uninstructed shares held in street name on this proposal.

Table of Contents

5.

Proposal 5 must be approved by the affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting for consideration, including, among other things, consideration of a motionand entitled to postpone or adjournvote on the proposal at the Annual Meeting, to another time or place, the individuals named as proxies and acting thereunderregardless of whether a quorum is present. As a result, abstentions, if any, will have discretionno effect on the outcome of this proposal because abstentions are not considered to be present or entitled to vote on those matters according to their best judgmentwith respect to the same extentproposal for which the occur, and broker non-votes are not expected to occur on this proposal because, pursuant to our Bylaws, broker non-votes are also not considered to be present or entitled to vote with respect to the proposal for which they occur.

        Below is a summary of the voting requirements for each proposal to be voted on at the Annual Meeting:

Tabulation of Votes

        The inspector of elections of the Annual Meeting will tabulate the votes of our stockholders at the Annual Meeting. All shares of our common stock represented by proxy at the Annual Meeting will be voted in accordance with the voting instructions given on the proxy, as long as the person deliveringproxy is properly submitted and unrevoked and is received by the proxy would be entitledapplicable deadline, all as described under "How to vote.Cast or Revoke Your Vote" below. If the Annual Meeting is adjourned or postponed, or adjourned, a stockholder’s proxy mayproperly submitted and unrevoked proxies will remain valideffective and maywill be voted at the adjourned or postponed or adjourned meeting, but a stockholderAnnual Meeting, and stockholders will still be ableretain the right to revoke the stockholder’sany such proxy until it is actually voted. As of the date of this proxy statement, the Board of Directors does not know of any matters other than those described in this proxy statement that will be presentedvoted at the adjourned or postponed Annual Meeting.

Proxies properly executed and received by us prior to the Annual Meeting and not revoked will be voted as directed therein on all matters presented at the Annual Meeting. In the absence of specific direction from a stockholder, proxies will be voted “FOR” the election of all named director nominees and “FOR” Proposal Nos. 2, 3 and 4. 

Record Date and Shares Outstanding

Only holders of record of shares of our common stock at the close of business on the record date, April 19, 2016, will be entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof. At the close of business on April 19, 2016, the Company had (i) 51,085,832 shares of common stock outstanding and entitled to vote and (ii) 7 stockholders of record. Each holder of record of shares of our common stock on the record date will be entitled to one vote for each share held on all matters to be voted upon at the Annual Meeting.

How to Cast or Revoke Your Vote

Stockholders of Record

If you are a stockholder of record, meaning that at the close of business on the record date your shares were registered directly in your name with Computershare Trust Company, N.A., our transfer agent, then you may vote your shares either by attendingtaking any one of the following actions:

•

Attending the Annual Meeting and voting in person;



•

Submitting a proxy by mail, which can be done by completing and signing the accompanying proxy card and mailing it in the envelope provided; or



•

Submitting a proxy via the Internet or by telephone, which can be done by following the instructions on the accompanying proxy card.

        Votes cast in person or by submitting a proxy.mailed proxy must be received no later than the close of voting at the Annual Meeting to be counted, and votes cast by telephone or the Internet must be received by 1:00 a.m., Pacific Time, on August 15, 2018 to be counted. If the Annual Meeting is postponed or

Table of Contents

adjourned, a properly submitted proxy will remain valid and will be voted at the postponed or adjourned meeting unless it is revoked before it is actually voted, as described below.

        If you holdare a stockholder of record and submit your sharesproxy, you may revoke it at any time before it is used by taking any of common stockthe following actions (any of which will automatically revoke an earlier-provided proxy):

•

Voting in “street name,” meaningperson at the Annual Meeting;



•

Delivering a later-dated proxy to us at the address of our principal executive offices; or



•

Delivering a written notice of revocation to our Corporate Secretary at the address of our principal executive offices.

        To be effective, any later-dated proxy must be received by the applicable deadline for the voting method used, and any written notice of revocation must be received no later than the close of voting at the Annual Meeting. Only your latest-dated vote that is received by the deadline applicable to the voting method used will be counted.

Beneficial Owners of Shares Held in Street Name

        If you are thea beneficial owner of your shares but a broker or other nominee is the stockholder of record of your shares,our common stock that are held in street name, then you will receive a notice from your broker or other nominee that includes instructions on how to vote your shares. Your broker or other nominee may allow you to deliver your voting instructionsvote via the Internet or by phone.telephone. In addition, if you are a beneficial owner, you will receive instructions from your broker or other nominee regarding how to revoke a previously submitted proxy or otherwise change your voting instructions. As a result, beneficial owners should follow the instructions provided by their brokers or other nominees in order to vote their shares at the Annual Meeting.

        If you hold your shares in street name and you wish to attend or vote in person at the Annual Meeting, then you must bring certain items with you in order to gain admission to and vote at the Annual Meeting, as described under "Attending and Voting at the Annual Meeting" below.

Attending and Voting at the Annual Meeting

If you plan to attend the Annual Meeting and wish to vote in person, you will be given a ballot for voting at the Annual Meeting. Please note thatIf you elect to attend the Annual Meeting, you may be asked to present valid picture identification, such as a driver's license or passport, to gain admission. Additionally, if you hold your shares in street name and you decide to attend and vote at the Annual Meeting in person, you will not be ableneed to gain entry to or vote atbring a copy of a brokerage statement reflecting your ownership of our common stock as of the record date for the Annual Meeting, unless you presentas well as a legal proxy issued in your name from your broker or other nominee. Even if you plannominee that holds your shares on your behalf. Contact your broker or other nominee to attend the Annual Meeting in person, weobtain these items.

        We encourage you to submit your proxy or otherwise vote your sharesvoting instructions in advance of the Annual Meeting to ensure that your vote will be counted.

Revocation of Proxies

If you are a stockholder of record and submit Submitting your proxy you may revoke it at any time before its use by taking any of the following actions:

If you hold your shares in street name, please follow the instructions provided by your broker or other nominee as to how you may change your vote, or obtain a legal proxy to vote your shares if you wish to attend and cast your vote in person if you decide to attend the Annual Meeting, but your presence at the Annual Meeting.Meeting will not in itself revoke a submitted proxy. In order to do so, you must cast a written ballot at the Annual Meeting and your proxy will be revoked as to the matters on which the ballot is cast.

Proxy Solicitation

Proxy Solicitation Costs

We will pay for the costcosts of preparing, assembling, printing and mailing these proxy materials to our stockholders this Proxy Statement and our other proxy materials for the Annual Meeting, as well as the costall other costs of soliciting proxies relating tofor the Annual Meeting. We may request brokers or other nominees to solicit their customers

Table of Contents

who beneficially own shares of our common stock that are held of record by the broker or other nominee. Wenominee, and we will reimburse these brokers or other nominees for their reasonable out‑of‑pocketout-of-pocket expenses regardingin making these solicitations. Our officers, directorsSolicitations will be made primarily through the delivery of this Proxy Statement and employeesour other proxy materials for the Annual Meeting to our stockholders and the availability of these materials on the Internet, and may supplement the original solicitation by mail of proxiesbe supplemented by telephone, facsimile, e‑maile-mail and personal solicitation. We will pay nosolicitation by our directors, officers and other employees. No additional compensation will be paid to our directors, officers directors or other employees for these activities. Weactivities, and we have not engaged but could elect to engage and payspecial employees for the costspecific purpose of a proxy solicitation firmundertaking these activities. In addition, we have engaged Georgeson LLC ("Georgeson") to assist us with soliciting proxies for the Annual Meeting, and we have agreed to pay Georgeson a fee of approximately $8,000 for such services.

Householding

        The SEC has adopted rules that permit companies and intermediaries (such as brokers and other nominees) to satisfy the delivery requirements for proxy statements and other proxy materials with respect to two or more stockholders sharing the same address by delivering a single copy of all proxy materials addressed to these stockholders. This process, which is commonly referred to as "householding," potentially means extra convenience for stockholders and cost savings for companies.

        This year, a number of brokers and other nominees that hold shares of our common stock for the account of a beneficial owner will be householding our proxy materials for the Annual Meeting. As a result, a single copy of this Proxy Statement, the Annual Report and the other proxy materials for the Annual Meeting will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from one or more of the affected stockholders. Once you have received notice from your broker or other nominee that it will be householding communications to your address, householding will continue until you are notified otherwise or until you provide contrary instructions. If you are a stockholder at a shared address to which a single copy of this Proxy Statement, the Annual Report and the other proxy materials for the Annual Meeting was delivered, we will deliver promptly, at no charge, a separate copy of all or any such materials upon receipt of a written or oral request submitted to us, by writing to our Corporate Secretary at the address of our principal executive offices or by calling Investor Relations at (212) 739-6740, or to Georgeson, our proxy solicitor, by writing to or calling Georgeson at its address or phone number set forth in soliciting proxies.the letter accompanying this Proxy Statement and on the last page of this Proxy Statement. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate copy of our proxy statement, annual report or other proxy materials for future annual meetings of our stockholders, please notify your broker or other nominee or direct your written or oral request to us as described above. Additionally, stockholders who receive multiple copies of this Proxy Statement, the Annual Report and the other proxy materials for the Annual Meeting at their shared address and would like to request householding of these materials for future annual meetings of our stockholders should contact their brokers or other nominees or direct a written or oral request to us as described above

Table of Contents

PROPOSAL NO. 1

ELECTION OF DIRECTORS

Structure

Our Board of Directors currently consists of five members, four of whom have been determined to be independent under the rules and listing requirements of The Nasdaq Capital Market, referred to herein as the Nasdaq rules. Please see the section titled “Director Independence” below for more information. Currently, Chun K. Hong, Charles F. Cargile, Jun S. Cho, Vincent Sheeran, and Blake A. Welcher serve as our directors.

No arrangement or understanding exists between any nominee and any other person or persons pursuant to which any nominee was or is to be selected as a director or director nominee of the Company. There are no familial relationships between any of our directors or our executive officers and any other director or executive officer.

Nominees for Election at the Annual Meeting

The Nominating and Corporate Governance Committee of our Board of Directors has recommended, and our Board of Directors has nominated, Chun K. Hong, Charles F. Cargile, Jun S. Cho, Vincent SheeranKiho Choi and Blake A. Welcher for electionre-election as our directors.directors at the Annual Meeting. All of these individuals are currently members of our Board of Directors. On the date of this Proxy Statement, Jeff Benck is also a member of our Board of Directors. Mr. Benck will not stand for re-election at the Annual Meeting and his term as a director will end at the commencement date of the Annual Meeting.

Each director nominee named in this Proxy Statement has consented to being named in this proxy statement as a nominee and has agreed to serve as a director, if elected.

Unless the proxy indicates otherwise, the The persons named as proxies in the accompanying proxy have advised us that they intend tocard will vote the shares covered by the proxiesany properly submitted proxy card for the election of each of the director nominees named above atin this Proxy Statement, unless the Annual Meeting.proxy card indicates otherwise. The accompanying proxy card contains a discretionary grant of authority with respect to this matter,proposal, so that if one or more of the named director nominees arebecomes unable or not willingunwilling to serve, the persons named as proxies may vote for the election of theany substitute nominees that our Board of Directors may propose. However, the persons named as proxies may not vote for a greater number of persons than the total number of nominees named above.directors to be elected at the Annual Meeting, which is four.

        There is no arrangement or understanding between any of our directors or director nominees and any other person or persons pursuant to which any such individual was or is to be selected as a director or director nominee of the Company. There are no family relationships between any of our directors, director nominees or executive officers.

Director Nominees

The table and narrative set forth below provide, information regardingfor each director nominee’s age, service as a director of our Company,director nominees, each such individual's age as of June 18, 2018; current position(s) with our Company; tenure in such position(s); information about such individual's business experience and qualifications, including principal occupation or employment and principal business of the employer, if any, for at least the past five years; involvement in certain legal or administrative proceedings, if any; other public company director positions held currently or at any time duringin the lastpast five years, information regarding involvement in certain legal or administrative proceedings, if applicable,years; and the experiences, qualifications, attributes and skills that causedled to the Nominating and Corporate Governance Committee and the Board to determineconclusion that the nomineesuch individual should serve as a director of our Company. Additionally, for the Company. Ineach of our directors, and in addition to each nominee’ssuch individual's specific qualifications and skills described below, we believe that each nomineesuch individual brings a strong and unique background and set of skills to theour Board of Directors, giving thewhich gives our Board competence and experience in a wide variety of areas, including corporate governance and board service, executive management, financial reporting, law and regulation, experience in the memory systems market, the semi-conductor industry, licensing, and experience with manufacturers.

Director Nomineesworldwide customer and manufacturer management.

Chun K. Hong is one of the founders of Netlist and has been our President and Chief Executive Officer and a director since our inception.inception in June 2000. Mr. C.K. Hong assumed the title of Chairman of the Board of Directors in January 2004. Prior to his tenure at Netlist, Mr. C.K. Hong has served in various other executive positions including President and

Chief Operating Officer of Infinilink Corporation, a DSL equipment company, as Executive Vice President of Viking Components, Inc., a memory

Table of Contents

subsystems manufacturing company, and as General Manager of Sales at LG Semicon Co., Ltd., a public semiconductor manufacturing company in South Korea. Mr. C. K. Hong received his Bachelor of Science degree in economics from Virginia Commonwealth University and his Master of Science degree in technology management from Pepperdine University’sUniversity's Graduate School of Management. As one of our founders and as our Chief Executive Officer, Mr. C.K. Hong brings to the Board extensive knowledge of our organization and our market.

Charles F. Cargile joined the Netlist Board in August 2013. He currently serves as Senior Vice President, Chief Financial Officer and Treasurer of Newport Corporation, a publicly‑traded global supplier of advanced‑technology products and systems. Mr. Cargile has been the Chief Financial Officer at Newport for 16 years and has been responsible for all aspects of finance, accounting, information technology and strategic planning, including acquisitions and divestitures. Prior to his tenure at Newport, Mr. Cargile held a number of executive positions at York International Corporation and Flowserve Corporation. Mr. Cargile holds a Bachelor of Science degree in Accounting from Oklahoma State University and a Master’s degree in Business Administration from the Marshall School of Business at the University of Southern California. Mr. Cargile brings more than 25 years of industry experience to Netlist’s Board of Directors and has an extensive background in strategic development, capital structures and international operations.

Jun S. Cho joined the Netlist Board in November 2014. He brings a considerable legal background to Netlist’s2014 and became the Lead Independent Director of the Board of Directors,in December 2017. Mr. Cho currently serves as General Counsel to Fiat Chrysler Automobiles (FCA) Asia Pacific and Vice President and Assistant General Counsel to FCA US LLC (formerly called Chrysler Group LLC), a global company engaged in the design, engineering, manufacturing, distribution and sale of automobiles. Heautomobile company. Mr. Cho has more than 1719 years of experience as legal counsel for the FCA Group and over 1112 years of experience in the Asia Pacific region heading up FCA’sleading FCA's initiatives in technology licensing, product distribution, mergers and acquisitionsM&A transactions and joint ventures, from his bases in Beijing and Shanghai, China.Shanghai. Prior to his tenure at FCA, Mr. Cho specialized in international financing and corporate transactions working for globalglobal-reaching law firms including Debevoise & Plimpton in New York, Kim & Chang in Seoul, Korea and Arnold & Porter in Washington D.C. Mr. Cho holds a Juris DoctorDoctorate degree from the New York University School of Law and is admitted to the bar in the state of New York and in Washington D.C. He received his undergraduate degree in economics from the College of William and Mary. Mr. Cho brings to Netlist's Board of Directors his considerable legal background and extensive experience with complex organizations and transactions.

Vince SheeranKiho Choi joined the Netlist Board in November 2014. HeMay 2017. In 2005, Mr. Choi established Choi, Kim & Park, LLP, the largest Korean American full service CPA firm in the United States, and is currently the Chief Executive OfficerManaging Partner of MarginPoint, an indirect materialsthe firm. In this role, Mr. Choi is responsible for directing the publicly-held and international company audit service and management software company, and has servedfinancing consulting practices of the firm. Mr. Choi also currently serves on the Board of Directors of Hanmi Financial Corporation and Hanmi Bank. Mr. Choi began his public accounting career in this position since September 2012. Prior to his tenure at MarginPoint, Mr. Sheeran held multiple Chief Executive Officer positions, including at UltraLink, Inc.1989 in the Assurance and Consulting Division of Watkins, Meegan, Drury & Co, LLC in Washington D.C., a ,full service regional accounting and consulting firm specializing in government, financial institutions, and non-profit organizations. As a director in-charge of the resolution services division, Mr. Choi had responsibility for auditing banks and technology solutions provider ingovernment contractors and worked closely with Resolution Trust Corporation and Federal Deposit Insurance Corporation. In 1995, Mr. Choi joined Kim & Lee, LLP, a Korean-American CPA firm, as a partner responsible for the Employee Benefit Administration outsourcing market,firm's audit and Wherify Wireless,consulting practice. Mr. Choi is a developergraduate of wireless location products and services. Prior to his Chief Executive Officer roles he held various management positions with software industry leaders including Epicor Software, a provider of industry specific business software, where he served as VP of Marketing and Senior Vice President of Worldwide Sales & Operations. Mr. Sheeran holds a Bachelor of Science degree in Management and Management Information Sciences from the Moore School of Business at the University of South Carolina.Illinois, at Chicago, receiving both a Bachelor and Master of Science degrees in Accounting. Mr. SheeranChoi brings to the Board over 30 years of experience in the software and business services industries, during which he has built global organizations through both acquisition and organic growth and developed a track record of building sales and marketing organizations that can successfully sell complex technology to companies seeking cutting edge marketplace advantages.

Blake A. Welcher has served as a member of ourNetlist's Board of Directors sincehis significant accounting and financial expertise, as well as his extensive senior management experience.

Blake A. Welcher joined the Netlist Board in August 2013. HeMr. Welcher currently serves as General Counsel for PSI Services LLC, an assessment and testing development and administration company. Mr. Welcher served as Executive Vice President, General Counsel and Corporate Secretary of DTS, Inc., a consumer electronics company, and hasuntil December 2016, when DTS was sold to Tessera Technologies. Mr. Welcher had been a member of DTS’sthe DTS executive team since March 2000. As General Counsel at DTS, he managesmanaged the licensing operations and was instrumental in building key assets that have led to DTS’DTS' success. Mr. Welcher leads DTS’led DTS' legal licensing functions, and collaboratescollaborated with key partners.partners and worked to establish DTS as a global name in consumer electronics. Mr. Welcher holds a Bachelor of Sciencebachelor's degree in Aeronautical Engineering from California Polytechnic State University at San Luis Obispo, a Juris Doctor degreeDoctorate and Masters of Intellectual Property degree from Franklin Pierce Law Center (University of New Hampshire School of Law) and is a U.S. licensed patent attorney.Patent Attorney. Mr. Welcher brings more than 20 years of industry experience to Netlist’sNetlist's Board of Directors with his extensive background in worldwide licensing operations, corporate governance, risk management, intellectual property and legal affairs.

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF
ALL OF THE NAMED DIRECTOR NOMINEES.

Table of Contents

Required VotePROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Directors will be elected by a pluralityThe Audit Committee of the votes cast on this proposal at a meeting at which a quorum is present, meaning that the five nominees receiving the highest number of votes will be duly elected as directors. Abstentions and broker non‑votes will have no effect on the outcome of the election of directors.

The Board of Directors recommends that you vote “FOR” the election of all of the named director nominees.

CORPORATE GOVERNANCE

Director Independence

Ourour Board of Directors has appointed KMJ as our independent registered public accounting firm for Fiscal 2018. Representatives of KMJ are expected to attend the Annual Meeting and be available to respond to appropriate questions and will have an opportunity to make a statement if they desire to do so.

        In appointing KMJ as our independent registered public accounting firm, the Audit Committee considered KMJ's independence with respect to the services to be performed and other factors the Audit Committee believed to be relevant and in the best interests of our stockholders. Stockholder ratification of the appointment of our independent registered public accounting firm is not required by our Bylaws or otherwise; however, as a matter of good corporate governance, the Audit Committee and our Board of Directors has decided to submit the appointment to stockholders for ratification. If our stockholders fail to ratify the appointment, the Audit Committee will reconsider whether or not to retain the firm. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time if it determines such a change would be in the best interests of the Company and its stockholders. In addition, if KMJ declines to act or otherwise becomes incapable of acting as our independent registered public accounting firm or if KMJ's engagement is otherwise discontinued for any reason, the Audit Committee will appoint another firm to serve as our independent registered public accounting firm for Fiscal 2018.

Fees Paid to Independent Registered Public Accounting Firm

        The following table presents the aggregate fees billed to us by KMJ for the indicated services performed during Fiscal 2017 and our fiscal year ended December 31, 2016 ("Fiscal 2016"):

Pre-Approval Policies and Procedures

        The charter of the Audit Committee of our Board requires such committee to pre-approve all audit and permissible non-audit services to be performed for us by our independent registered public

Table of Contents

accounting firm, except for certain "de minimus" non-audit services that may be ratified by the Audit Committee in accordance with applicable SEC rules, in order to assure that the provision of such services is compatible with maintaining the independence of our independent registered public accounting firm. Our Audit Committee pre-approved all services performed by KMJ in Fiscal 2017 and Fiscal 2016.

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF KMJ AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2018.

Table of Contents

PROPOSAL 3
APPROVAL OF AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE THE AUTHORIZED SHARES OF OUR COMMON STOCK

        Our Restated Certificate currently authorizes the issuance of 150,000,000 shares of our common stock, par value $0.001 per share. Our Board is proposing for approval by our stockholders an amendment to our Restated Certificate to increase the number of shares of our common stock we are authorized to issue by approximately 100%, from 150,000,000 shares to 300,000,000 shares. Our Restated Certificate also authorizes the issuance of 10,000,000 shares of preferred stock, par value $0.001 per share, which would remain unchanged by the amendment to our Restated Certificate contemplated by this Proposal 3.

Background: Our Current Capitalization

        As of June 18, 2018, with respect to our common stock, there were:

•

100,499,508 shares issued and outstanding;



•

2,924,184 shares issuable upon exercise of outstanding warrants, all of which were exercisable as of such date at exercise prices ranging from $0.25 per share to $1.00 per share;



•

12,619,396 shares issuable upon conversion, at a conversion price of $1.25 per share, of $15,185,753 in outstanding principal and accrued interest as of such date under an outstanding convertible note;



•

2,000,000 shares issuable upon exercise of an outstanding warrant, all of which will become exercisable at an exercise price of $0.30 per share upon our redemption of such convertible note;



•

8,532,984 shares issuable upon exercise of outstanding stock options, 6,211,089 of which were exercisable as of such date; and



•

2,116,941 shares reserved for issuance pursuant to equity awards we may grant in the future under the Netlist, Inc. Amended and Restated 2006 Equity Incentive Plan (the "Equity Plan"), which amount is subject to annual increases pursuant to the terms of the Equity Plan.

        Based on the above capitalization information, only 21,256,986 shares of our currently authorized common stock remained unissued and unreserved and available for future issuance as of June 18, 2018.

Reasons for the Proposed Increase to Our Authorized Shares of Common Stock

        The Board has determined, in its business judgment, that an increase to the authorized shares of our common stock by approximately 100%, from 150,000,000 shares to 300,000,000 shares, is in the best interests of the Company and our stockholders, and as a result the Board has unanimously approved such an increase, subject to stockholder approval, and has unanimously recommended that our stockholders approve such an increase by voting in favor of this Proposal 3. In making this determination and approval, the Board considered, among other things: the requirements to maintain our listing on the Nasdaq Capital Market; our historical share issuance purposes and rates, as described below; our anticipated future share requirements; guidelines and potential voting recommendations of third-party proxy advisory services, including Institutional Shareholder Services ("ISS"); recent practices at other public companies; and a recommendation from our management.

        The Board believes the proposed increase to the authorized shares of our common stock is desirable, and is requesting that our stockholders approve the increase, for the following reasons:

•

Pursuit of Near-Term Equity Financing to Try to Maintain Our Nasdaq Capital Market Listing.  As previously disclosed and as described in connection with Proposal 4 below, we are not presently in compliance with certain rules and standards that are required to maintain our listing on the

Table of Contents

Nasdaq Capital Market, including Nasdaq's minimum stockholders' equity standard. As also described below, Nasdaq has granted our request to remain listed on the Nasdaq Capital Market, subject to our satisfaction of a number of conditions in the upcoming months, including, among other things, that, on or before September 25, 2018, we provide to Nasdaq evidence of our compliance with its minimum stockholders' equity standard and projections and other information to demonstrate our ability to maintain compliance with this standard over the coming year. As part of our efforts to satisfy these requirements, we expect to pursue an equity financing in the near term, and in order to do so, we expect to need additional authorized shares of our common stock to issue and sell in such a financing. As a result, one of the purposes of this Proposal 3 is to try to maintain our listing on the Nasdaq Capital Market by complying with the conditions imposed by Nasdaq, including the requirement to regain compliance with Nasdaq's minimum stockholders' equity standard, which we believe may be more attainable after increasing the authorized shares of our common stock and issuing and selling some portion of the newly authorized shares in the near term.

Even though we are taking active steps to pursue a near-term equity financing as described above, we do not currently have any commitment from any third party to purchase any shares of our common stock, and the terms and conditions of any such purchase, including the proceeds we may receive therefrom, remain to be determined. As a result, we may not be able to complete any equity financing in the near term or at all, and even if we do complete such a transaction, we may not be able to obtain the capital we need to regain compliance with Nasdaq's minimum stockholders' equity standard or effect such a transaction on terms that are otherwise favorable to us.

•

Flexibility for Future Stock Issuances for Any Corporate Purpose.  The requested increase to the authorized shares of our common stock is also intended to provide us with the flexibility to issue our common stock as needed for any other purpose the Board may approve in the future, which could include, for instance, raising further capital to support our operations; compensating employees or other service providers; effecting stock splits or dividends or other capitalization changes; acquiring assets, technologies or businesses; and other corporate purposes. If this Proposal 3 is approved, the newly authorized shares of our common stock would be issuable for any proper corporate purpose, including our anticipated near-term equity financing as described above. Historically, we have issued our common stock (or securities convertible into or exercisable or exchangeable for our common stock) to raise capital, in connection with strategic transactions and relationships, as compensation to attract and retain our personnel through grants of equity awards, and for other general corporate purposes. Since January 2015 and as of June 18, 2018, we have issued common stock (or securities convertible into or exercisable or exchangeable for common stock) totaling 87,245,230 shares (on a fully diluted basis) for the reasons described above, and our Board may desire to use our common stock for these or other reasons in the future. Of these shares, since January 2015, we have granted equity awards for compensatory purposes for a total of 6,794,760 shares of our common stock (on a fully diluted basis), and the Board believes the availability of additional shares for future compensatory purposes is an important recruiting and retention tool.

        We currently have no specific understandings or commitments, oral or written, which would require us to issue a material amount of new shares of our common stock, except with respect to the issuance of shares of our common stock (1) to effect any near-term equity financing we are able to complete, as described above, (2) upon the exercise or conversion of outstanding securities, and (3) in connection with the Equity Plan and awards granted thereunder.

Table of Contents

Possible Adverse Effects if this Proposal 3 Is Approved

        If this Proposal 3 is approved by our stockholders, the Board would generally be able to issue the additional authorized shares in its discretion from time to time without further action by or approval of our stockholders, subject to and as limited by the rules and listing requirements of the Nasdaq Stock Market ("Nasdaq") or any other then applicable securities exchange and the requirements of all applicable law.

        Approval of this Proposal 3 could have the following adverse effects:

•

Increased Potential for Dilution.  If approved, this Proposal 3 would result in our Board's ability to issue the newly authorized shares of our common stock in the future (including in our anticipated near-term equity financing) in its discretion and without obtaining further stockholder approval. Because our stockholders do not have preemptive rights with respect to our common stock, they would not have preferential rights to purchase any additional shares we may issue in the future. Consequently, any issuance of additional shares of our common stock that is not pro-rata among existing stockholders, including, for instance, in the anticipated near-term equity financing we are pursuing as described above, would increase the number of outstanding shares of our common stock and decrease the ownership interest of our existing stockholders, as well as their percentage interest in the voting power, liquidation value and book value of our common stock. Depending on the terms of any such issuance, this dilution could be significant. In particular, and in light of the current low per share market price of our common stock, our stockholders may experience material and substantial dilution if we complete an equity financing in the near term. For example, assuming a sale price per share of $0.20, which was the closing sale price per share of our common stock as reported by Nasdaq on June 18, 2018, and also assuming we complete an equity financing that involves our issuance and sale of shares of our common stock and no other securities (such as, for instance, warrants or convertible notes), we would need to issue and sell 50 million shares of our common stock in order to obtain gross proceeds of $10 million. However, because we do not have agreements or other firm commitments for any such issuance, it is impossible to predict at this time the dilutive impact of any future share issuance, including our anticipated near-term financing, if we are able to complete it. The level of any potential dilution would depend on a number of factors, including the price of our common stock at the time of any future issuance and the number of shares of our common stock then outstanding.



•

Anti-Takeover Effects.  The availability of additional shares of our common stock for issuance could, under certain circumstances, discourage or make more difficult efforts to effect a change in control of our Company or remove current management, which our stockholders might otherwise deem favorable. For example, without further stockholder approval, the Board could strategically sell shares of our common stock in a private transaction to purchasers that would oppose a change in control attempt or favor current management, or could more easily dilute the stock ownership of a person or group seeking to effect and change in the composition of the Board or contemplating a tender offer or other transaction that would result in our acquisition by another company. The anti-takeover effect of an increase to the authorized shares of our common stock would be in addition to (1) the provisions of Delaware law that may frustrate business combinations with large stockholders, (2) other provisions in our Restated Certificate and our Bylaws that may also have an anti-takeover effect, such as certain advance notice requirements with respect to any stockholder proposals and nominations of director candidates, the lack of cumulative voting rights of our stockholders, the prohibition on our stockholders from taking action by written consent, and our ability to issue up to 10,000,000 shares of preferred stock with such rights, preferences and privileges as approved by our Board without obtaining stockholder approval, and (3) the anti-takeover effect of our stockholder rights agreement, which would, under certain circumstances, give our stockholders the right to acquire

Table of Contents

additional shares of our capital stock and make it more difficult for a person or group to acquire a significant ownership percentage of our outstanding capital stock or attempt a hostile takeover of our Company.

Except as described above, we do not presently have any plans, intentions or proposals to adopt other provisions or enter into other arrangements that may have material anti-takeover consequences, and the Board is not presently aware of any attempt, or contemplated attempt, to acquire control of our Company. Further, this Proposal 3 is not being presented with the design or intent that it be used to prevent or discourage a change in control or management or an acquisition attempt; however, stockholders should be aware that nothing would prevent the Board from taking any such actions that it deems consistent with its fiduciary duties.

Possible Adverse Effects if this Proposal 3 Is Not Approved

        If this Proposal 3 is not approved by our stockholders, the number of shares of our common stock we would be authorized to issue would remain at its current level of 150,000,000 shares, and we would have only 21,256,986 shares of our common stock available for future issuance (based on our capitalization as of June 18, 2018, as described above, which does not take into account additional issuances of shares of our common stock in our ongoing "at-the-market" common stock offering program or for other reasons after that date).

        A failure to obtain the approval of our stockholders of this Proposal 3 could have the following adverse effects:

•

Inability to Raise Capital By Issuing Our Common Stock.  As described above, we are actively pursuing a near-term equity financing in an effort to facilitate an increase to our stockholders' equity to Nasdaq's minimum standard and maintain our listing on the Nasdaq Capital Market. However, if this Proposal 3 is not approved, then we may not have sufficient shares of our common stock available for issuance in such a financing to enable is to regain compliance with this standard, in which case our ability to complete such a financing at all could be jeopardized and the likelihood of maintaining our Nasdaq listing could be reduced. If we are not able to maintain our listing on the Nasdaq Capital Market, our common stock would be classified as a "penny stock," among other potentially detrimental consequences, and the liquidity and marketability of our common stock, as well as its prevailing market price, could be materially adversely affected by such a delisting and penny stock classification. Any of these outcomes could significantly impact our ability to use our common stock for capital-raising or other purposes, as well as our stockholders' ability to sell their shares of our common stock at prices they deem acceptable or at all.

In addition, in recent years, we have relied heavily on issuances of equity and convertible debt securities to generate sufficient capital to support our operations. For example, we issued a convertible note and warrant in connection with a strategic transaction in November 2015; we completed public or private offerings of our common stock in September 2016, August 2017, and May 2018; and we established an "at-the-market" common stock offering program in November 2017, which remains ongoing. Our capital requirements to support our existing operations, satisfy our commitments and pursue future growth depend on many factors, and we may need to raise additional funding through the issuance of equity or convertible debt securities in the future, even if we are able to complete our anticipated near-term equity financing as described above. If this Proposal 3 is not approved by our stockholders, then we may not have sufficient authorized and unreserved shares of our common stock to pursue such capital-raising transactions if and when market conditions and other factors make these funds available, in which case we may not be able to execute our business plans or take advantage of future opportunities, and we may be forced to modify our business model, implement cost-cutting measures, delay, scale back or

Table of Contents

eliminate some or all of our ongoing and planned investments and initiatives, or reduce or cease our operations entirely. Any of these outcomes could have a material adverse effect on our business, performance and prospects.

•

Lack of Flexibility to Use Equity for Other Valid Purposes.  As described above, the Board believes the increase to the authorized shares of our common stock would provide us with needed flexibility to issue the newly authorized shares in the future when and as necessary and on a timely basis. This flexibility would allow us to take advantage of favorable opportunities without the potential expense or delay incident to obtaining stockholder approval for each separate transaction or issuance. If this Proposal 3 is not approved by our stockholders, our Board would have significantly limited ability to issue equity at its discretion in the future, which could result in, among other things, difficulties retaining and recruiting executives and other personnel consistent with our business plans or an inability to effect potential future strategic transactions or acquisitions efficiently and when desired or otherwise believed to be advantageous to us.

Rights of Additional Authorized Shares of Common Stock

        The additional authorized shares of our common stock, if and when issued, would be part of our existing class of common stock and would have the same rights, preferences and privileges as the shares of common stock that are currently issued and outstanding.

Text and Effectiveness of the Increase to Our Authorized Shares of Common Stock

        We propose to effect the increase to the authorized shares of our common stock by amending the first two sentences of Article IV(A) of our Restated Certificate to read in their entirety as follows:

        "The corporation is authorized to issue two classes of stock to be designated, respectively, "Serial Preferred Stock" and "Common Stock." The total number of shares of stock which the corporation is authorized to issue is Three Hundred Ten Million (310,000,000) shares consisting of Ten Million (10,000,000) shares of Serial Preferred Stock, with a par value of $0.001 per share, and Three Hundred Million (300,000,000) shares of Common Stock, with a par value of $0.001 per share."

        The only change to the language of Article IV(A) being voted on in this Proposal 3 is to increase the total number of shares of our common stock we may issue by 100%, from 150,000,000 shares to 300,000,000 shares, and consequently the total number of shares of stock we may issue by the same amount. Other than as set forth above, our Restated Certificate as currently in effect would remain unchanged by the amendment to effect the authorized share increase contemplated by this Proposal 3.

        Please note, however, that our Restated Certificate could also be amended to implement a reverse split of our common stock, which we are also requesting that our stockholders approve at the Annual Meeting and which is described in Proposal 4 of this Proxy Statement below. As described in Proposal 4 below, if such a reverse split of our common stock is approved and implemented, the number of issued and outstanding shares of our common stock as well as the number of authorized shares of our common stock would be reduced, in each case by the ratio selected by the Board (please see the description of Proposal 4 below for more information). As a result, if this Proposal 3 is approved by our stockholders and Proposal 4 is also approved by our stockholders and such a reverse split of our common stock is implemented before or contemporaneously with the increase to the authorized shares of our common stock as contemplated by this Proposal 3, then the approval of this Proposal 3 will be deemed to be an approval by our stockholders of an increase to the authorized shares of our common stock by an amount equal to approximately 100% of the number of authorized shares of our common stock after giving effect to such reverse split of our common stock (which would result in a different number of authorized shares of our stock and our common stock than is set forth above, due to the impact of such a reverse split). See the tabular disclosure under "Effects of the Reverse Stock Split on our Common Stock" in Proposal 4 below for more information.

Table of Contents

        If this Proposal 3 is approved and adopted by our stockholders at the Annual Meeting, the increase to our authorized shares contemplated hereby would become effective upon our filing of a Certificate of Amendment to our Restated Certificate with the Secretary of State of the State of Delaware reflecting the amendments to Article IV(A) thereof as set forth above, or at such other date and time as may be specified in the Certificate of Amendment. Subject to the discretion of the Board to abandon the authorized share increase contemplated by this Proposal 3, as described below, we expect to file such an amendment with the Secretary of State of the State of Delaware as soon as practicable following stockholder approval.

Board Discretion to Abandon the Increase to Our Authorized Shares of Common Stock

        Even if this Proposal 3 is approved by our stockholders, the Board retains the discretion to abandon the increase to the authorized shares of our common stock as contemplated hereby, if it determines such an abandonment to be in the best interests of the Company and our stockholders.

No Appraisal Rights

        Under applicable Delaware law, our stockholders are not entitled to appraisal rights with respect to the proposed amendment to our Restated Certificate to increase the number of authorized shares of our common stock we are authorized to issue.

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF AN AMENDMENT TO OUR RESTATED CERTIFICATE TO INCREASE THE AUTHORIZED SHARES OF OUR COMMON STOCK.

Table of Contents

PROPOSAL 4
APPROVAL OF AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION
TO EFFECT A REVERSE STOCK SPLIT

        Our Board is proposing for approval by our stockholders an amendment to our Restated Certificate to effect a reverse split of our authorized, issued and outstanding common stock, at such ratio and at such time as determined by the Board and as described in this Proposal 4 below. For purposes of this Proposal 4, "Reverse Stock Split" refers to such a reverse split of our common stock effected at the ratio and time as the Board may determine. Our preferred stock, 10,000,000 shares of which are authorized and none of which are issued or outstanding, would remain unchanged by the amendment to our Restated Certificate contemplated by this Proposal 4.

Background

        In June 2018, our Board determined to seek the approval of our stockholders of a proposal to authorize the Board, in its discretion, to amend our Restated Certificate to effect a Reverse Stock Split of our issued and outstanding common stock at a ratio of 1-for-2, 1-for-3, 1-for-4, 1-for-5, 1-for-6, 1-for 7, 1-for-8, 1-for-9, 1-for-10, 1-for-11, 1-for-12, 1-for-13, 1-for-14, 1-for-15, 1-for-16, 1-for-17, 1-for-18, 1-for-19, or 1-for-20, such ratio to be determined by the Board in its discretion. As a result, if the Board determines to effect a Reverse Stock Split, each outstanding 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19 or 20 shares of our common stock would, at the effective time of the Reverse Stock Split, be combined, converted and changed into one share of our common stock. As part of the Reverse Stock Split, the number of authorized shares of our common stock (as it may be increased pursuant to the amendment to our Restated Certificate contemplated by Proposal 3 described above) would be reduced by the same ratio as the issued and outstanding shares of our common stock.

        This Proposal 4, if approved, would not immediately cause a Reverse Stock Split to be effected, but rather would grant the Board the authority to effect a Reverse Stock Split, if and when determined by the Board, at any time on or before June 30, 2019. As a result, the Board would have the sole discretion, until June 30, 2019, to elect whether to effect a Reverse Stock Split and, if so, the number of shares, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19 or 20, of our common stock that would be combined into one share of our common stock upon implementing the Reverse Stock Split. Accordingly, approval of this Proposal 4 would authorize the Board, in its discretion, to effect the Reverse Stock Split at any of the ratios described above and at any time until the date set forth above, or not to effect the Reverse Stock Split at all.

        If the Board elects to effect a Reverse Stock Split, the number of shares of our common stock that are authorized but unissued, issued and outstanding, and reserved for future issuance, as well as certain other aspects of or factors related to our common stock, would undergo a variety of changes. Please see "Effects of the Reverse Stock Split on Our Common Stock" below for more information.

Reasons for a Reverse Stock Split

        The Board has determined, in its business judgment, that a Reverse Stock Split of our authorized, issued and outstanding common stock at one of the proposed ratios is in the best interests of the Company and our stockholders, and as a result the Board has unanimously approved such a Reverse Stock Split, subject to stockholder approval, and has unanimously recommended that our stockholders approve such a Reverse Stock Split by voting in favor of this Proposal 4. In addition, the Board has determined that obtaining the approval of our stockholders of the nineteen proposed ratios for a Reverse Stock Split (as opposed to approval of a single ratio) provides the Board with appropriate flexibility to better achieve the purposes of a Reverse Stock Split, and as a consequence, is also in the best interests of our Company and our stockholders. In making this determination and approval, the Board considered, among other things: the requirements to maintain our listing on the Nasdaq Capital

Table of Contents

Market; the historical market price and trading volume of our common stock; prevailing market and economic conditions and trends; recent practices at other public companies; guidelines and potential voting recommendations of third-party proxy advisory services, including ISS; and a recommendation from our management.

        The Board believes a Reverse Stock Split is desirable, and is requesting that our stockholders approve and grant the authority to the Board to determine whether to effect a Reverse Stock Split, primarily to try to increase the prevailing market price of our common stock for the following reasons:

•

Maintenance of Our Nasdaq Capital Market Listing.  As previously disclosed, in September 2017, we received a letter from Nasdaq notifying us that, because the bid price of our common stock closed below $1.00 per share for 30 consecutive business days, we are no longer in compliance with Nasdaq's minimum bid price rule, which is a requirement for continued listing on the Nasdaq Capital Market. We have also experienced several other periods of noncompliance with this rule in recent years, including during 2015 and into early 2016 and during April and May of 2017. In January 2018, we received another letter from Nasdaq notifying us that, because the market value of our common stock fell below a minimum of $35.0 million for a period of 30 consecutive business days, we are no longer in compliance with Nasdaq's market value of listed securities rule, which is also a requirement for continued listing on the Nasdaq Capital Market. Because of our failure to comply with the market value of listed securities rule and certain other Nasdaq listing standards, including the minimum stockholders' equity standard, we were not automatically eligible for a 180-day extension of the deadline to regain compliance with the minimum bid price rule, which was passed on March 26, 2018. As a result, our common stock became subject to delisting from the Nasdaq Capital Market on that date, and we received a letter from Nasdaq notifying us of such delisting determination on March 29, 2018. We appealed the delisting determination to a Nasdaq Hearings Panel in accordance with Nasdaq's applicable procedures, and on May 17, 2018, we received from Nasdaq its decision letter regarding our appeal. In the decision letter, Nasdaq notified us that the Nasdaq Hearings Panel has granted our request to remain listed on the Nasdaq Capital Market, subject to our satisfaction of a number of conditions in the upcoming months, including, among other things, that we include this Proposal 4 in this Proxy Statement to try to obtain the approval of our stockholders of a Reverse Stock Split, and that, on or before September 25, 2018, we provide evidence to Nasdaq that the closing bid price of our common stock was $1.00 or more for at least 10 consecutive business days. As a result, the primary purpose of this Proposal 4 is to try to maintain our listing on the Nasdaq Capital Market by complying with the conditions imposed by Nasdaq in is decision letter, including the requirement to regain compliance with Nasdaq's minimum bid price rule, which we believe may be more attainable after effecting a Reverse Stock Split due to the anticipated increase in the prevailing market price of our common stock.



•

Improved Marketability and Liquidity.  We believe the current low per share market price of our common stock has had a negative effect on the marketability of the outstanding shares of our common stock, and we believe there are several reasons for these effects. First, certain institutional and other investors have internal policies that prohibit purchases of lower-priced stocks, and a variety of policies and practices of broker-dealers also discourage individual brokers within these firms from dealing in lower-priced stocks. Second, because the brokers' commissions on lower-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current market price of our common stock could result in individual stockholders paying transaction costs (commissions, markups or markdowns) that are a higher percentage of the total share value than would be the case if the market price of the shares was higher. This factor is also believed to limit the willingness of some institutions and other investors to purchase shares of our common stock at all. Because we expect a Reverse Stock Split could result in a higher prevailing market price for our common stock, we believe it

Table of Contents

could help to alleviate some of these negative effects. In addition, the Board believes the decrease in the number of outstanding shares of our common stock as a consequence of the Reverse Stock Split, coupled with the anticipated increase in the prevailing market price of our common stock, could attract new long-term investors and generate new interest in our common stock, which could potentially promote greater liquidity for our existing stockholders, and could reduce holdings by speculative investors, which could help to reduce volatility in the trading volume and market price of our common stock.

        We note, however, that if the Board elects to implement the Reverse Stock Split, an increase to the market price of our common stock after the Reverse Stock Split, if any, may be proportionately less than the ratio for the Reverse Stock Split that is selected by the Board, and any such increase may not be sustained and may subsequently decrease to current or lower market prices. Any of these outcomes could reduce or eliminate the intended benefits of, and reasons for effecting, a Reverse Stock Split as described above, including an inability to achieve an increase in the prevailing market price of our common stock and a failure to regain compliance with Nasdaq's minimum bid price rule, and could have other negative effects, including effectively reducing our Company's market capitalization. Moreover, even if the prevailing market price for our common stock increases by a sufficient amount to regain compliance with Nasdaq's bid price rule, we may not be able to maintain such compliance and we may not be able to regain or maintain compliance with Nasdaq's other listing requirements, in which case our common stock may be delisted from the Nasdaq Capital Market even though we effect the Reverse Stock Split as required by the Nasdaq Hearings Panel. See "Possible Adverse Effects" below for more information.

        The Reverse Stock Split is not, and the Board does not intend for it to be, the first step in a series of plans or proposals of a "going private" transaction within the meaning of Rule 13e-3 under the Securities Exchange Act of 1934, as amended ("Exchange Act").

Possible Adverse Effects

        As described above, it is expected that a Reverse Stock Split could increase the prevailing market price for our common stock. However, the effect of a Reverse Stock Split on the market price for our common stock cannot be predicted, and the history of similar reverse stock split combinations for companies in like circumstances is varied. In particular, there is no assurance that the price per share of our common stock after a Reverse Stock Split is implemented would be 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19 or 20 times, as applicable, or any other multiple of the price per share of our common stock immediately before the Reverse Stock Split is implemented. Additionally, even if the market price for our common stock increases immediately after a Reverse Stock Split is implemented, such increased market price may not be maintained for any period of time. Moreover, because some investors or the market generally may have a negative view of reverse stock split combinations similar to the Reverse Stock Split, the implementation of a Reverse Stock Split, or the approval of this Proposal 4 by our stockholders or even the mere fact that we are asking our stockholders to vote on this Proposal 4 at the Annual Meeting, could adversely impact the market price of our common stock, which may never exceed or remain in excess of the current market price.

        If any of these negative effects were to occur, the intended benefits of a Reverse Stock Split, described under "Reasons for the Reverse Stock Split" above and including primarily our efforts to maintain our listing on the Nasdaq Capital Market, may not be achieved even if the Reverse Stock Split is implemented. If we are not able to maintain our listing on the Nasdaq Capital Market, and as described in Proposal 3 above, our common stock would be classified as a "penny stock," among other potentially detrimental consequences, and the liquidity and marketability of our common stock, as well as its prevailing market price, could be materially adversely affected by such a delisting and penny stock classification. Any of these outcomes could significantly impact our ability to use our common stock for capital-raising or other purposes, as well as our stockholders' ability to sell their shares of our common

Table of Contents

stock at prices they deem acceptable or at all. Moreover, the marketability and liquidity of our common stock may worsen after a Reverse Stock Split as a result of the decreased number of shares of our common stock that would be outstanding, which effect could be amplified if the market price of our common stock also does not increase as anticipated. Furthermore, the occurrence of any of these negative effects could effectively reduce our Company's market capitalization, which could materially adversely impact our performance by resulting in potential impairments to our assets, our liquidity by reducing our ability to use our common stock for capital-raising or other purposes, or other aspects of our business.

        Moreover, many of these negative effects could also occur if this Proposal 4 is not approved by our stockholders or a Reverse Stock Split is otherwise not implemented. For example, the risk that we may not be able to maintain our listing on the Nasdaq Capital Market is a material potential risk associated with a Reverse Stock Split, but this is also a material and more likely potential risk if no Reverse Stock Split is effected, because the trading price of our common stock would need to increase by a substantial amount in a relatively short period of time in order for us to regain compliance with all of Nasdaq's listing requirements without effecting the Reverse Stock Split. In addition, the risk of worsened marketability and liquidity of our common stock, which is an important potential risk associated with a Reverse Stock Split, is also an important potential risk if no Reverse Stock Split is effected, because the current low market price of our common stock may continue or worsen, particularly if our common stock is delisted and classified as a penny stock.

        Ultimately, the impact of this Proposal 4 on our common stock is unpredictable and uncertain, whether or not it is approved and whether or not the Board decides to implement the Reverse Stock Split, and we could experience any or all of the adverse effects described above in any of these circumstances.

Board Discretion to Implement a Reverse Stock Split

        If this Proposal 4 is approved by our stockholders, a Reverse Stock Split would be effected, if at all, only upon a determination by the Board to effect the Reverse Stock Split, with a ratio among those set forth in this Proposal 4 as determined by the Board and as of an effective time on or before June 30, 2019. Such determination would be based on many factors, including the factors described above that were considered by the Board in determining to approve the solicitation of stockholder approval for this Proposal 4. For example, the Board may determine not to effect the Reverse Stock Split if the trading price of our common stock increases materially before a Reverse Stock Split is effected, if the Board determines to abandon our listing on the Nasdaq Capital Market and establish trading for our common stock on one or more over-the-counter quotation systems, or if the Board determines for any other reason that it is no longer in the best interests of the Company and our stockholders to effect a Reverse Stock Split. As a result, notwithstanding any approval of this Proposal 4 by our stockholders, the Board may, in its sole discretion, determine to abandon the Reverse Stock Split for a period of time or in its entirety. If, however, the Board does not implement the Reverse Stock Split before June 30, 2019, further stockholder approval would be required in order to implement any reverse stock split.

Effects of a Reverse Stock Split on Our Common Stock

        After a Reverse Stock Split, if implemented, each of our stockholders would own a reduced number of shares of our common stock; however, the Reverse Stock Split would affect all of our stockholders uniformly, and thus would not, in itself, affect any stockholder's percentage ownership in our Company, except to the extent the Reverse Stock Split results in a stockholder receiving cash in lieu of an interest in a fractional share, as described below. Similarly, the number of our stockholders would not be affected by the Reverse Stock Split, except to the extent any stockholder holds only an interest in a fractional share after the Reverse Stock Split and receives cash for such interest rather

Table of Contents

than any shares of our common stock, as described below. As of June 18, 2018, there were approximately 14,000 holders of our common stock, including an estimated 13,500 beneficial owners whose shares are held on their behalf by brokers or other nominees.

        In addition, proportionate voting rights and other rights of the holders of our common stock would not be affected by the Reverse Stock Split, except as a result of the payment of cash in lieu of fractional shares, as described below. For example, a holder of 1% of the voting power of the outstanding shares of our common stock immediately before the Reverse Stock Split would continue to hold 1% of the voting power of the outstanding shares of our common stock immediately after the Reverse Stock Split.

        Also, the number of outstanding shares of our common stock and the number of authorized shares of our common stock would be reduced in accordance with the ratio for the Reverse Stock Split selected by the Board from among those set forth in this Proposal 4, but the percentage of the authorized shares of our common stock that are issued and outstanding would remain the same before and after the Reverse Stock Split is implemented (unless Proposal 3 as described in this Proxy Statement is also approved and implemented, as described above and as shown in the tables below, and without giving effect to any issuances of shares of our common stock after the Reverse Stock Split is implemented). For example, based on the 100,499,508 shares of our common stock outstanding on June 18, 2018 and the 150,000,000 shares of our common stock currently authorized under the Restated Certificate, a Reverse Stock Split at a ratio of 1-for-10 would have the effect of reducing the number of outstanding shares of our common stock to approximately 10,049,951 and reducing the number of authorized shares of our common stock to 15,000,000, thereby reducing the number of authorized but unissued shares of common stock from 49,500,492 to approximately 4,950,049; however, the number of shares of outstanding common stock would remain approximately 67% of the number of shares of authorized common stock both immediately before and immediately after the Reverse Stock Split.

        Further, the Reverse Stock Split would reduce the number of shares of our common stock issuable upon conversion or exercise of outstanding convertible notes, warrants and stock options (and, as applicable, would increase the conversion, exchange or exercise price per share under such convertible notes, warrants and stock options), as well as the number of shares of our common stock reserved for issuance pursuant to equity awards we may grant in the future under the Equity Plan (including the annual increases to such share reserve pursuant to the terms of the Equity Plan). In each such case, the number of shares of our common stock would be reduced by the ratio at which the Reverse Stock Split is implemented, and any applicable conversion, exchange or exercise price per share would be increased by the same ratio.

        The following tables illustrate the effect of the Reverse Stock Split on our authorized, outstanding and reserved common stock in two possible scenarios (and, for each, with each of the proposed Reverse Stock Split ratios):

•

If Proposals 3 and 4 Are Approved and Implemented.  The information in the following table is based on the number of shares of our common stock outstanding as of June 18, 2018, after giving effect to the increase to the number of shares of our common stock we are authorized to issue by approximately 100%, as described in Proposal 3 above, and a Reverse Stock Split at each of the ratios described in this Proposal 4. As a result, the information in this table assumes that Proposals 3 and 4 described in this Proxy Statement are both approved by our stockholders at the Annual Meeting, and that no shares of our common stock are issued after June 18, 2018

Table of Contents

(including any portion of the newly authorized shares thatmay be issued in any near-term equity financing we are able to complete, as described in Proposal 3 above).

•

If This Proposal 4 Is Approved and Implemented, But Proposal 3 Is Not Implemented.  The information in the following table is based on the number of shares of our common stock outstanding as of June 18, 2018, after giving effect to a Reverse Stock Split at each of the ratios described in this Proposal 4 but without giving effect to the increase to the number of shares of our common stock we are authorized to issue by approximately 100%, as described in Proposal 3 above. As a result, the information in this table assumes that this Proposal 4 is approved by our stockholders at the Annual Meeting, that Proposal 3 as described in this Proxy Statement above

Table of Contents

is not approved by our stockholders or is otherwise not implemented, and that no shares of our common stock are issued after June 18, 2018.

        If a Reverse Stock Split is implemented, no fractional shares of our common stock would be issued in connection with the Reverse Stock Split. Rather, holders of our common stock who would otherwise receive a fractional share of our common stock as a result of the Reverse Stock Split would instead receive cash in lieu of the fractional share interest, as explained more fully below. As a result, stockholders holding less than 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19 or 20 shares of our common stock immediately before the Reverse Stock Split is implemented would be entitled to receive only a fractional share interest as a result of a Reverse Stock Split effected at a ratio of 1-for-2, 1-for-3, 1-for-4, 1-for-5, 1-for-6, 1-for-7, 1-for-8, 1-for-9, 1-for-10, 1-for 11, 1-for-12, 1-for-13, 1-for-14, 1-for-15, 1-for-16, 1-for-17, 1-for-18, 1-for-19, or 1-for-20, respectively, and thus these stockholders would receive only cash in lieu of such fractional share interests and would be eliminated as stockholders of our Company as a result of the Reverse Stock Split. Further, some stockholders may own less than one hundred shares of our common stock after a Reverse Stock Split is implemented. Generally, a purchase or sale of less than one hundred shares (a so-called "odd lot" transaction) may result in incrementally higher trading costs through certain brokers, particularly "full-service" brokers. As a result, stockholders who own less than one hundred shares of our common stock following a

Table of Contents

Reverse Stock Split may be required to pay modestly higher transaction costs if they subsequently determine to sell their shares.

        Our common stock is currently listed for trading on the Nasdaq Capital Market. After a Reverse Stock Split, our common stock would continue to trade on the Nasdaq Capital Market (for so long as we are able to maintain compliance with all Nasdaq listing requirements) under the same trading symbol, "NLST," although Nasdaq would likely add the letter "D" to the end of the trading symbol for a period of 20 trading days to indicate that the Reverse Stock Split had occurred. Additionally, our common stock is currently registered under Section 12(b) of the Exchange Act, and we are subject to the periodic reporting and other requirements of the Exchange Act as a result of this registration. The Reverse Stock Split would have no impact on the continued registration of our common stock under the Exchange Act. Also, our common stock has a CUSIP number, which is an identification number assigned to securities that is primarily used to facilitate clearing and settlement of open market purchase and sale transactions. Although our common stock would be assigned a different CUSIP number as a result of a Reverse Stock Split, a change to this number would not likely have any practical impact on our stockholders because the number would mainly be used by brokers in executing trades. The par value of our common stock, $0.001 per share, would remain unchanged by a Reverse Stock Split.

Cash Payment In Lieu Of Fractional Shares

        No fractional shares of our common stock would be issued if the Reverse Stock Split is implemented. Rather, in lieu of any fractional shares to which a holder of our common stock would otherwise be entitled as a result of the Reverse Stock Split, we will pay cash equal to such fraction of a share multiplied by the closing sales price of our common stock as reported by the Nasdaq Capital Market on the date on which the Reverse Stock Split is implemented.

Text and Effectiveness of the Reverse Stock Split

        If our stockholders approve the Reverse Stock Split, and if the Board elects to implement the Reverse Stock Split at one of the approved ratios, we would effect the Reverse Stock Split by amending Article IV(A) of our Restated Certificate to add the following sentences immediately after the end thereof:

"Effective as of [    ·    ] [a/p].m., Eastern Time, on [    ·    ], 201[    ·    ] (the "Effective Time"), each [    ·    ] ([    ·    ]) shares of Common Stock of the corporation issued and outstanding immediately prior to the Effective Time shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) validly issued, fully paid and non-assessable share of Common Stock of the corporation. No fractional shares shall be issued or recorded in the stock ledger of the corporation as a result of the reverse stock split provided for in the immediately preceding sentence, and any holder of the corporation's Common Stock that would be entitled to receive a fractional share as a result of such reverse stock split shall, in lieu thereof, be entitled to receive cash (without interest or deduction) from the corporation's transfer agent in lieu of such fractional share interests upon, for any such holder holding the shares in book-entry form, the submission of a transmission letter by the holder or, for any such holder holding the shares in certificated form, the surrender of the holder's Old Certificates (as defined below), in each case in an amount equal to the product obtained by multiplying (i) the most recent closing price per share of the Common Stock as reported on the Nasdaq Capital Market as of the Effective Time (and after giving effect to the Reverse Stock Split on such closing price), by (ii) the amount of the fraction of the fractional share owned by the stockholder. Each certificate that immediately prior to the Effective Time represented shares of Common Stock (collectively, "Old Certificates"), shall thereafter represent that number of shares of Common Stock into

Table of Contents

which the shares of Common Stock represented by the Old Certificate shall have been combined and converted, subject to the elimination of fractional share interests as described above."

        Other than as set forth above, our Restated Certificate as currently in effect would remain unchanged by the amendment to effect the Reverse Stock Split contemplated by this Proposal 4. Please note, however, that our Restated Certificate could also be amended to increase the number of shares of our common stock we are authorized to issue, which we are also requesting our stockholders approve at the Annual Meeting and which is described in Proposal 3 in this Proxy Statement above.

        If this Proposal 4 is approved and adopted by our stockholders at the Annual Meeting, it would become effective at the date and time specified in a Certificate of Amendment to our Restated Certificate that we file with the Secretary of State of the State of Delaware and that reflects the amendments to Article IV(A) thereof as set forth above. Except as explained with respect to fractional shares, at the effective date and time of the Reverse Stock Split as set forth in the Certificate of Amendment, shares of our common stock that are issued and outstanding immediately before such effective time will be, automatically and without any action on the part of the stockholders, combined and converted into new shares of our common stock in accordance with the ratio of the Reverse Stock Split determined by the Board among the eleven proposed ratios set forth in this Proposal 4. The approval of this Proposal 4 would grant the Board the authority, in its discretion, to implement the Reverse Stock Split at any time or not at all. If, however, the Board does not implement the Reverse Stock Split before June 30, 2019, then no reverse stock split could be implemented without obtaining further stockholder approval.

Certain Mechanics of a Reverse Stock Split

        If a Reverse Stock Split is implemented, we intend to treat beneficial owners of shares of our common stock held in street name in the same manner as registered stockholders whose shares of our common stock are registered in their names. Brokers or other nominees would be instructed to effect the Reverse Stock Split for the beneficial owners whose shares of our common stock they hold on behalf of the beneficial owners; however, these brokers or other nominees may apply their own specific procedures for processing the Reverse Stock Split. If we implement a Reverse Stock Split and you hold your shares of our common stock in street name, and you have any questions in this regard, we encourage you to contact your broker or other nominee that holds your shares on your behalf.

        If we implement a Reverse Stock Split and you hold your shares of our common stock in book-entry form, you would not need to take any action to receive your post-Reverse Stock Split shares of our common stock in registered book-entry form or your cash payment in lieu of fractional shares, if applicable. If you are entitled to receive post-Reverse Stock Split shares of our common stock, a transaction statement indicating the number of such shares that you hold would automatically be sent to your address of record by Computershare Trust Company, N.A., the transfer agent and registrar for our common stock ("Transfer Agent"), as soon as practicable after the effective time of the Reverse Stock Split. In addition, if you are entitled to a payment of cash in lieu of fractional shares, a check would be mailed to you at your address of record as soon as practicable after the effective time of the Reverse Stock Split.

        If we implement a Reverse Stock Split and you hold your shares of our common stock in certificated form, you would receive a transmittal letter from our Transfer Agent as soon as practicable after the effective time of the Reverse Stock Split. The transmittal letter would be accompanied by instructions specifying how you could exchange your certificate representing your pre-Reverse Stock Split shares of our common stock for either (1) a certificate representing your post-Reverse Stock Split shares of our common stock, or (2) post-Reverse Stock Split shares of our common stock in book-entry form evidenced by a transaction statement, either of which would be mailed to you at your address of

Table of Contents

record as soon as practicable after the effective time of the Reverse Stock Split and would reflect the number of shares of our common stock you hold after and as a result of the Reverse Stock Split, and either of which would be mailed together with any payment of cash in lieu of fractional shares to which you may be entitled. Beginning as of the effective time of the Reverse Stock Split, each certificate representing pre-Reverse Stock Split shares of our common stock would be deemed for all corporate purposes to evidence ownership of post-Reverse Stock Split shares.

        Each new certificate or book-entry position issued to represent post-Reverse Stock Split shares of our common stock would continue to bear any legends restricting the transfer of such shares that were borne by the certificates or book-entry positions representing the pre-Reverse Stock Split shares of our common stock.

Stockholders should not destroy any stock certificate(s) or transaction statement(s) representing shares of our common stock, and should not submit any stock certificate(s) or other requests for exchange until requested to do so.

        If a Reverse Stock Split is implemented, no service charges, brokerage commissions or transfer taxes would be payable by any holder of any certificate that represented pre-Reverse Stock Split shares of our common stock, except that if any certificates evidencing post-Reverse Stock Split shares of our common stock are to be issued in a name other than that in which the certificates for the pre-Reverse Stock Split shares of our common stock are registered, it would be a condition of such issuance that (1) the person requesting the issuance pay to us any transfer taxes payable by reason thereof (or prior to transfer of such certificate, if any) or establish to our satisfaction that such taxes have been paid or are not payable, (2) the transfer complies with all applicable federal and state securities laws, and (3) the certificate evidencing pre-Reverse Stock Split shares of our common stock is properly endorsed and otherwise in proper form for transfer.

No Appraisal Rights

        Under applicable Delaware law, our stockholders are not entitled to appraisal rights with respect to the proposed amendment to our Restated Certificate to effect the Reverse Stock Split.

Accounting Effects

        If implemented, as a result of the Reverse Stock Split and at its effective time, the stated capital on our consolidated balance sheet attributable to our common stock would be reduced in proportion to the ratio of the Reverse Stock Split, subject to a minor adjustment in respect of the treatment of fractional shares, and the additional paid-in capital account would be credited with the amount by which the stated capital is reduced. Our stockholders' equity, in the aggregate, would remain unchanged.

Material U.S. Federal Income Tax Consequences of the Reverse Stock Split

        The following discussion summarizes the material U.S. federal income tax considerations of the Reverse Stock Split that would be expected to apply generally to U.S. Holders (as defined below) of our common stock. This summary is based on current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), existing Treasury Regulations under the Code, and current administrative rulings and court decisions, all of which are subject to change or different interpretation. Any change, which may or may not be retroactive, could alter the tax consequences to our Company or our stockholders as described in this summary. No ruling from the U.S. Internal Revenue Service has been or will be requested in connection with the Reverse Stock Split. No attempt has been made to comment on all U.S. federal income tax consequences of the Reverse Stock Split that may be relevant to particular U.S. Holders, including holders: (1) who are subject to special tax rules such as dealers, brokers and traders in securities, mutual funds, regulated investment companies, real estate investment

Table of Contents

trusts, insurance companies, banks or other financial institutions or tax-exempt entities; (2) who are subject to the alternative minimum tax provisions of the Code; (3) who acquired their shares in connection with stock options, stock purchase plans or other compensatory transactions; (4) who hold their shares as a hedge or as part of a hedging, straddle, "conversion transaction," "synthetic security," integrated investment or any risk reduction strategy; (5) who are partnerships, limited liability companies that are not treated as corporations for U.S. federal income tax purposes, S corporations, or other pass-through entities or investors in such pass-through entities; (6) who do not hold their shares as capital assets for U.S. federal income tax purposes (generally, property held for investment within the meaning of Section 1221 of the Code); (7) who hold their shares through individual retirement or other tax-deferred accounts; (8) whose shares constitute qualified small business stock with the meaning of Section 1202 of the Code; or (9) who have a functional currency for United States federal income tax purposes other than the U.S. dollar.

        In addition, this summary does not address the tax consequences of the Reverse Stock Split under state, local and foreign tax laws. The summary assumes that, for U.S. federal income tax purposes, the Reverse Stock Split will not be integrated or otherwise treated as part of a unified transaction with any other transaction. Furthermore, this summary does not address the tax consequences of transactions effectuated before, after or at the same time as the Reverse Stock Split, whether or not they are in connection with the Reverse Stock Split.

        For purposes of this discussion, a U.S. Holder means a beneficial owner of our common stock who is: (1) an individual who is a citizen or resident of the United States; (2) a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in the United States or under the laws of the United States or any subdivision thereof; (3) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (4) a trust if (a) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons (as described in Section 7701(a)(30) of the Code) have the authority to control all substantial decisions of the trust or (b) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.

        HOLDERS OF OUR COMMON STOCK ARE ADVISED AND EXPECTED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT IN LIGHT OF THEIR PERSONAL CIRCUMSTANCES AND THE CONSEQUENCES OF THE REVERSE STOCK SPLIT UNDER STATE, LOCAL AND FOREIGN TAX LAWS.

        No gain or loss will be recognized by our Company as a result of the Reverse Stock Split. A stockholder who receives solely a reduced number of shares of our common stock pursuant to the Reverse Stock Split will generally recognize no gain or loss. A stockholder who receives cash in lieu of a fractional share interest will generally recognize gain or loss equal to the difference between (1) the portion of the tax basis of the pre-Reverse Stock Split shares allocated to the fractional share interest and (2) the cash received. A stockholder's basis in its post-Reverse Stock Split shares will be equal to the aggregate tax basis of such stockholder's pre-Reverse Stock Split shares decreased by the amount of any basis allocated to any fractional share interest for which cash is received. The holding period of our common stock received in the Reverse Stock Split will include the holding period of the pre-Reverse Stock Split shares exchanged. For purposes of the discussion of the basis and holding periods for shares of our common stock, the Treasury Regulations provide detailed rules for allocating the tax basis and holding period of the pre-Reverse Stock Split shares to the post-Reverse Stock Split shares. U.S. Holders of shares acquired at different times or at different prices should consult their own tax advisors regarding the allocation of tax basis and holding period of the pre-Reverse Stock Split shares to the post-Reverse Stock Split shares. Any gain or loss recognized by a stockholder as a result of the Reverse Stock Split will generally be a capital gain or loss and will be long term capital gain or loss if the stockholder's holding period for the shares of our common stock exchanged is more than one year.

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF AN AMENDMENT TO OUR RESTATED CERTIFICATE TO EFFECT A REVERSE SPLIT OF OUR COMMON STOCK.

Table of Contents

PROPOSAL 5
APPROVAL OF THE ADJOUNRMENT OF THE ANNUAL MEETING IF NECESSARY OR
ADVISABLE TO SOLICIT ADDITIONAL PROXIES

        Our Board is proposing for approval by our stockholders the adjournment of the Annual Meeting, if necessary or advisable to permit further solicitation of proxies if there are not sufficient votes at the time of the Annual Meeting to approve any or all of the other proposals to be voted on at the Annual Meeting, as described in this Proxy Statement. The Annual Meeting may also be adjourned if there is not a quorum present at the commencement of the Annual Meeting to conduct the business of the Annual Meeting, which would occur if holders of at least a majority of the outstanding shares of our common stock as of the record date for the Annual Meeting are not present or represented by proxy at the Annual Meeting.

        In any such case, and if this Proposal 5 is approved by our stockholders, the Chair of the Annual Meeting may determine, in his or her discretion, to adjourn the Annual Meeting to another place, date or time. If such an adjournment occurs and is for more than 30 days, or if after the adjournment a new record date is established by the Board for the adjourned Annual Meeting, then a notice of the adjourned Annual Meeting would be given to each stockholder of record entitled to vote at such adjourned Annual Meeting; otherwise, no such new notice would be given to stockholders, and the place, date or time of the adjourned Annual Meeting would be announced at the Annual Meeting at which the adjournment is taken.

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF
THE ADJOURNMENT OF THE ANNUAL MEETING, IF NECESSARY OR ADVISABLE.

Table of Contents

CORPORATE GOVERNANCE

Director Independence

        Our Board has determined that each of our director nominees, each of our current directors and each of our directors serving at any time during our fiscal year ended January 2, 2016 (“in Fiscal 2015”),2017, other than our President and Chief Executive Officer, Chun K.Mr. Hong, qualifies asis an independent director within the meaning of applicable Nasdaq Marketplacerules. In addition, our Board has determined that each director serving currently or at any time in Fiscal 2017 as a member of our Audit Committee, Compensation Committee or Nominating and Corporate Governance Committee, at all times of such service, satisfied or satisfies all independence standards and financial expertise requirements applicable to members of each such committee under, and taking into account the factors set forth in, Nasdaq and SEC rules, and also constitutes a non-employee director, as defined in Rule 5605(a)(2).16b-3 under the Exchange Act, and an outside director, as defined in Section 162(m) of the Code. In making this determination,these determinations, the Board of Directors reviewed and discussed information provided by the directors and management with regard toregarding each director’sdirector's business and personal activities as they may relate to our Company.

Information Regarding our Board of DirectorsResponsibilities and its CommitteesMeeting Attendance

        The primary responsibilities of the Board are to provide oversight of the business and affairs of the Company, determination of the Company's mission, our long-term strategy and objectives, and management of the Company's risks. These functions of the Board are carried out by the full Board and, when delegated by the committees thereof.

Our Board of Directors consistedheld four meetings in Fiscal 2017, and each director attended at least 75% of all meetings of the following five members asBoard and each committee on which he served in Fiscal 2017 that were held during the period in which the director served. We do not have a policy requiring that directors attend our annual meetings of the end of Fiscal 2015: Chun K. Hong, Charles F. Cargile, Jun S. Cho, Vincent Sheeranstockholders, and Blake A. Welcher. Mr. Thomas F. Lagatta, a former membernone of our Board of Directors, did not stand for re‑election atindependent directors attended our 20152017 annual meeting of stockholders held on June 3 2015 and ceased his service on the Board at the commencement of such meeting.

stockholders.

Board Committees

Our Board of Directors met four times during Fiscal 2015. Our Board of Directors has established ana standing Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, each of which is described below and has adoptedoperates pursuant to a written charter foradopted by our Board and available on our website,http://www.netlist.com. The table below shows the membership of these committees during Fiscal 2017 and Fiscal 2018 to date, as well as the number of meeting held by each of these committees during Fiscal 2017. Our Board may also create additional committees from time to time, including committees relating to pending litigation proceedings or other significant corporate matters or committees to approve financing or other strategic transactions.

Table of Contents

http://www.netlist.com.Audit Committee

Audit Committee

Our Audit Committee currently consists of the following three members: Charles F. Cargile (chair), Vincent Sheeran and Blake A. Welcher. Messrs. Cargile and Welcher served as membersThe primary functions of our Audit Committee throughout Fiscal 2015 and Mr. Sheeran was appointed to our Audit Committee in June 2015, to fill the vacancy caused by Mr. Lagatta’s departure on June 3, 2015. Our Board of Directors has determined that Mr. Cargile qualifies as an “audit committee financial expert” in accordance with Securities and Exchange Commission (the “SEC”) rules. Our Board has affirmatively determined that each current member of the Audit Committee and each member of the Audit Committee during Fiscal 2015 is or was independent under Nasdaq Marketplace Rule 5605(a)(2) and meets all other requirements under Nasdaq Marketplace Rule 5605(c) and the applicable rules of the SEC. Our Audit Committee met four times during Fiscal 2015 and met with our independent registered public accounting firm without management present at each such meeting.

Our Audit Committee,are, among other things, (i) overseesto:

•

oversee our financial reporting process, including reviewing our audited and interim financial statements, discussing with our independent registered public accounting firm the scope and plans for all annual audits and discussing with management and our independent registered public accounting firm the adequacy and effectiveness of our accounting and financial controls, systems to monitor and manage business risk, and legal and ethical compliance programs, (ii) reviewsprograms;



•

review with management and approvesour independent registered public accounting firm all of our audited and interim financial statements;



•

review and approve in advance any transactions by us with related parties, (iii) appoints, terminates, replaces, ensuresparties;



•

appoint, terminate, replace, ensure the independence of and overseesoversee our independent registered public accounting firm, (iv) pre‑approvesfirm;



•

pre-approve all audit services and, subject to a “de minimus”"de minimus" exception, all otherpermissible non-audit services to be performed by the independent registered public accounting firm, (v) isfirm;



•

be responsible for setting the corporate tone for quality financial reporting and sound business risk practices and ethical behavior,behavior; and (vi) has established



•

establish procedures for the confidential and anonymous submission, receipt, retention and treatment of concerns or complaints regarding accounting, internal accounting controls and auditing matters.

Table of Contents

Compensation Committee

Our Compensation Committee currently consists of the following two members: Jun Cho (chair) and Charles Cargile. Mr. Lagatta served as a member and as the chairThe primary functions of our Compensation Committee until his departure from the Board on June 3, 2015, at which time Mr. Cho was appointed as the chair of the committee. Our Board has determined that each of the members of our Compensation Committee is independent in accordance with Nasdaq Marketplace Rule 5605(a)(2) and meets all other requirements under Nasdaq Marketplace Rule 5605(d) and the applicable rules of the SEC. Each member of our Compensation Committee is also currently a “non‑employee director” as that term is defined under Rule 16b‑3 of the Securities Exchange Act of 1934 (the “Exchange Act”) and an “outside director” as that term is defined in Internal Revenue Service regulations. The Compensation Committee met three times during Fiscal 2015 and also made several decisions on matters coming before the committee by unanimous written consent.

Our Compensation Committee,are, among other things, (i) reviewsto:

•

review and approves,approve, or makesmake recommendations to the Board regarding, our compensation structure, programs and arrangements for our Section 16 executive officers, including salary, incentive compensation, equity compensation and perquisite programs, (ii) reviewsprograms;



•

review the evaluation process and approves on an annual basis the corporate goals and objectives with respect to compensation structure for our Chief Executive Officer, (iii) reviews periodically the succession plans relating to positions held by elected corporate officers and assistsnon-Section 16 executive officers;



•

assist the Board in developing and evaluating potential candidates for executive positions and (iv) reviewsoversee the development of executive succession plans; and acts



•

review and act as administrator of our incentive compensation and other stock-based plans.

        Pursuant to its charter, the Compensation Committee may select, retain and terminate such legal counsel, compensation consultants outside counsel and other experts or advisors as it deems necessary or appropriate in its sole discretion, and has the authority to approve the fees and retention terms relating to any such consultants.consultants or advisors. Pursuant to its charter and in accordance with applicable Nasdaq and SEC rules, the Compensation Committee would assess the independence of any such consultants or advisors, including the existence of any conflicts of interest, before any engagement. In Fiscal 2017, no such consultants or advisors were retained to assist in determining or recommending the amount or form of executive and director compensation.

        The Compensation Committee charter also permits the Compensation Committee to form and delegate any of its responsibility to subcommittees as it deems necessary or appropriate in its sole discretion.discretion, and the terms of the Equity Plan permit the Compensation Committee, as the administrator of such plan, to delegate to management the authority to grant awards under such plan of up to 25,000 shares of our common stock.

        Pursuant to its charter, the Compensation Committee may invite any director, officer or other employee of the Company to be present at meetings of the Compensation Committee, subject to maintenance of the confidentiality of compensation discussions. Our Chief Executive Officer and our Chief Financial Officer generally participate in meetings of the Compensation Committee at the committee’scommittee's request in order to, among other things, make recommendationspresentations regarding Company and individual performance goals for our executives and other significantsenior employees, which are typically discussed on a semi-annual basis, cash bonus and equity award levels for our executives and other significantsenior employees based on achievement of such performance goals, and changes to base salaries offor our executives or other senior employees, ifas applicable. The Compensation Committee then reviews and considers these recommendations, ofbut makes all compensation decisions for our executive officers based on its own judgment and discretion and factors it deems relevant. Our Chief Executive Officer and our Chief Financial Officer when making compensation decisions.is not involved in discussions about or the determination of any aspect of his own compensation.

Nominating and Corporate Governance Committee

Our Nominating and Corporate Governance Committee currently consists of the following two members: Blake A. Welcher (chair) and Vincent Sheeran. Messrs. Welcher and Sheeran served as membersThe primary functions of our Nominating and Corporate Governance Committee throughout Fiscal 2015. Our Board has determined that each of the members of our Nominating and Corporate Governance Committee is independent in accordance with Nasdaq Marketplace Rule 5605(a)(2) and meets all other requirements under Nasdaq Marketplace Rule 5605(e). The Nominating and Corporate Governance Committee met four times during Fiscal 2015 and also made several decisions on matters coming before the committee by unanimous written consent.

Our Nominating and Corporate Governance Committee,are, among other things, (i) reviews changes in legislation, regulations and other developments impacting corporate governances and makes recommendations to the Board with respect to these matters corporate governance matters generally, (ii) leadsto:

•

lead the search for individuals qualified to become members of the Board and selectsselect director nominees to be presented at our annual meetings of stockholders, (iii) reviewsstockholders;



•

review the standards to be applied by the Board in making determinations as to whether a director satisfies applicable independence requirements, (iv) reviewsrequirements;

Table of Contents

•

review the Board’sBoard's structure and the Board’sBoard's committee structure and recommendsmake recommendations as appropriate, including recommending to the Board the directors to serve as members of each Board committee, (v) conductscommittee;



•

conduct an annual performance evaluation of the Board and its committees, and (vi) advisescommittees;



•

advise the Board on candidates for the positions of Chairman of the Board, Lead Independent Director, Chief Executive Officer and other executive officer positions.

Board Leadership Structure

Both the Chairman of

Director Nominations

        Our Board, as a whole and encouragingthrough our independent directors to have a strong voice on our Board.

The Board of Directors believes that our Chief Executive Officer is best situated to serve as Chairman of the Board of Directors because, as one of our founders and due to his intimate involvement in our day‑to‑day operations, he possesses detailed and in‑depth knowledge of the issues, opportunities and challenges facing the Company and its business and is best positioned to develop agendas that ensure the Board’s time and attention are focused on the most critical matters. His combined role, along with his significant ownership in the Company, increases accountability and enhances the Company’s ability to communicate its message and strategy clearly and consistently to the relevant stakeholders. The Board of Directors believes that combining the role of the Chairman and Chief Executive Officer at this point in time promotes strategy development and execution and facilitates information flow between management and the Board of Directors, which are essential to effective governance.

Independent directors and management have different perspectives and roles in strategy development. The Company’s independent directors bring experience, oversight and expertise from outside the Company and our industry, while the Chief Executive Officer brings Company‑specific experience and expertise. All Board committee members are independent directors, and the independent directors of the Board meet with no management directors or other management present as often as they deem advisable, but at least semi‑annually. Executive sessions of the independent directors are called and chaired by the Lead Independent Director, or, in the absence of such person, the chair of the Board’s Nominating and Corporate Governance Committee. These executive session meetings include discussionsCommittee, is responsible for identifying, evaluating, recommending and selecting nominees to serve as directors of such topics as the independent directors determine. During Fiscal 2015, the independent directors met four times in executive session.our Company.

Criteria and Qualifications

Our Board of Directors has always been small in number, with strong participation by all Board members.        Our Nominating and Corporate Governance Committee and our Board of Directors have each considered the needis responsible for and desirability of, separating the Chief Executive Officer and Chairman positions. After consideration, both our Nominating and Corporate Governance Committee and our Board of Directors have concluded that the independent nature of our Board committees, the practice of our independent directors regularly meeting in executive session without Mr. C.K. Hong and the other members of our management present and the appointment of a Lead Independent Director provide our Board with a level of independent oversight of management (including risk oversight) that is appropriate for our Company.

Director Qualifications and Review of Director Nominees

Our Nominating and Corporate Governance Committee identifiesidentifying qualified individuals to become members of our Board of Directors and recommendsrecommending to the Board proposed nominees for Board membership. OurIn identifying and recommending qualified director candidates, the Nominating and Corporate Governance Committee does not have a specific set of minimum criteria for membership on the Board of Directors. In making its recommendations, however, it takes into account an individual’sreviews and evaluates each proposed individual's skills, expertise, industry and other knowledge and business and other experience that may be useful to the effective oversight of the Company’sCompany's business. This committeeIn evaluating continuing directors, the Board also considers an individual's past contributions to the Board and the tenure of the continuing director. Under the Nominating and Corporate Governance Committee charter, the qualifications to be considered in the selection of director tenurecandidates, among others as the committee deems relevant, are broad experience in business, finance or administration; familiarity with the Company's industry; and takes steps as may be appropriateprominence and reputation. Additionally, since prominence and reputation in a particular profession or field of endeavor are what brings most prospective director candidates to ensure that ourthe Board's attention, the Nominating and Corporate Governance Committee also considers whether a prospective candidate has the time available to devote to the work of the Board and one or more of Directors is open to new ideas and,its committees. Further, although it doeswe do not have a formal policy regarding director diversity, we believe a diverse Board encourages new ideas and expands the knowledge base available to management and the Nominating and Corporate Governance Committee considers the diversity of directors,director candidates, including age, skills, and experience, in evaluating prospective director candidates in the context of the needs of the Board. as a whole. The Committee also reviews the activities and associations of each prospective director candidate to ensure that there is no legal impediment, conflict of interest, or other consideration that might hinder or prevent service on the Board.

Further,Except as described above, our Nominating and Corporate Governance Committee does not have a set of specific or minimum criteria or qualifications for membership on our Board of Directors. The Nominating and Corporate Governance Committee does, however, recognize that, pursuant to our Corporate Governance Guidelines and applicable Nasdaq andregulatory requirements, at least one member of our Board of Directors should meet the criteria for an "audit committee financial expert" as defined by SEC rules, at least a majority of our Board of Directors must qualify as independent directors under applicable Nasdaq rules, and Rules 10A‑3the members of certain of our Board committees must satisfy enhanced independence standards and 10C‑1financial expertise requirements under the Exchange Act.applicable Nasdaq and SEC rules.

        Our Nominating and Corporate Governance Guidelines also provide that noCommittee may utilize a variety of methods for identifying director nominees. For example, potential director candidates may concurrently serve oncome to the boardattention of directorsthe committee from current members of more than three public companies and our Chief Executive Officer and any other director that is employed full‑time may not serve on the Board, of Directors of more than two public companies, including our Board of Directors. executive officers, professional search firms, stockholders or others. Pursuant to its charter, the Nominating and Corporate Governance Committee may select, retain and terminate such legal counsel, consultants and other experts or advisors as it deems necessary or appropriate in identifying and evaluating director nominees or otherwise fulfilling its responsibilities, although in Fiscal 2017, no such consultants or advisors were retained.

The Nominating and Corporate Governance Committee assessesmay consider and evaluate potential director candidates at any point during our fiscal year. In addition, in connection with each annual meeting of our stockholders, the effectivenessNominating and Corporate Governance Committee recommends to our Board certain director nominees for election at the annual meeting by our stockholders, and the Board then selects its slate of director nominees based on its determination, using the recommendation and other information provided by the Nominating and Corporate Governance Committee as it deems appropriate, of the Corporate Governance Guidelines, including with respectsuitability of all potential director candidates, individually and in the aggregate, to director nominations and qualifications, through completionserve as directors of its annual self‑evaluation process.our Company.

Stockholder Recommendations of Director Candidates

Our Nominating and Corporate Governance Committee will consider nominees for directorsdirector candidates recommended by our stockholders upon submission in writing to our Secretary of the names and qualifications of such nominees at the address of our principal executive offices.stockholders. The Nominating and Corporate Governance Committee does not evaluate director candidates differently based on whether the candidate wasis recommended by a stockholder or otherwise.otherwise, and any stockholder-recommended candidate would be included in and evaluated in the same manner as the pool of other prospective director candidates. Any such submissionrecommendation should be made in writing to our Corporate Secretary at the address of our principal executive offices and should include the name, address and a current resume and curriculum vitae of the proposed director candidate, a statement describing the candidate’scandidate's qualifications and consent to serve on our Board if selected as a director nominee, and contact information for personal and professional references. The submission should also include the name and address of the stockholder who is submittingrecommending the proposed director candidate, the number of shares whichof our common stock that are owned of record or beneficially by the submittingrecommending stockholder and a description of all arrangements or understandings between the submittingrecommending stockholder and the candidate. Any stockholder-recommended candidate that is selected by our Nominating and Corporate Governance Committee would be recommended by this committee as a director nominee to the Board, which would then consider and evaluate the candidate and, if approved, appoint the individual as a director to a vacant seat on the Board or include the individual in the Board's slate of recommended director nominees for election at our next annual meeting of stockholders.

Stockholder Nominations of Directors

Nominations for Directors

Our Bylaws provide that any stockholder who is entitled to vote at thean annual meeting of our stockholders and who complies with the notice requirements set forth thereinin our Bylaws may nominate persons for election to theour Board of Directors. SuchDirectors at the applicable annual meeting. These notice requirements require, among other things,provide that a stockholder deliverdesiring to nominate a director to our Board of Directors must do so by written notice delivered to or mailed and received by our Corporate Secretary at the address of our principal executive offices not later than 90 calendar days priorwithin a specified time period before the annual meeting of stockholders at which the director nominee is to the datebe up for election. See "Stockholder Proposals or Director Nominations for 2019 Annual Meeting of the applicableStockholders" below for information about these time periods in connection with our 2019 annual meeting of stockholders. The stockholder’sstockholder's written notice must include, among other things as specified in our Bylaws, certain personal identification information about the stockholder and its recommended director nominee(s); the principal occupation

Compensation Committee strivesoversees management of risks relating to create aour executive compensation programprograms and arrangements, including designing compensation programs that encouragesencourage a level of risk‑takingrisk-taking behavior that is appropriate for our Company and our executives and consistent with our business strategy and objectives,objectives; and

        We believe our Board's regular review and analysis of our risks and risk management policies, as well as the fullrole of our independent Board regularly receives reports fromcommittees in the Board's performance of its risk oversight function and the appointment of a Lead Independent Director on the Board, provide appropriate oversight of our risk management practices, policies and procedures, even in light of the Board's current leadership structure, consisting of a single person serving as both the Chairman of the Board and the Chief Executive Officer and Chief Financial Officer, our two executive officers, who are principally responsible for aidingof the Board in identifying, evaluating and implementing risk management controls and methodologies to address identified risks.Company.

Board of Directors’ Attendance at Annual Meeting of Stockholders

We do not have a policy requiring that directors attend our annual meetings of stockholders. None of our independent directors attended our 2015 annual meeting of stockholders.

Stockholder Communications with the Board of Directors

Any stockholder who desires to contact our Board of Directors or any member of our Board of Directors may do so by writing to our Board of Directors, care of our Corporate Secretary, at the address of our principal executive offices. Copies of any such written communicationscommunication received by the Corporate Secretary will be provided to our full Board of Directors or the appropriate member depending on the facts and circumstances described inidentified Board member(s), unless the communication unless they areis considered, in the reasonable judgment of the Corporate Secretary, to be improper for submission to the intended recipient(s).

CompensationTable of Non‑Employee DirectorsContents

EXECUTIVE OFFICERS

        Each of our executive officers is appointed by, and serves at the direction of, our Board, subject to the terms of our employment agreement with Mr. Hong, our President and Chief Executive Officer, which is described under "Executive Compensation—Employment Agreements" in this Proxy Statement below, and which establishes, among other things, Mr. Hong's term of office.

        The narrative below provides, for Gail Sasaki, our only executive officer other than Mr. Hong, such individual's age as of June 18, 2018; current position(s) with our Company; tenure in such position(s); information about such individual's business experience and qualifications, including principal occupation or employment and principal business of the employer, if any, for at least the past five years; and involvement in certain legal or administrative proceedings, if any. Such information about Mr. Hong, who is also a director of our Company, is set forth above in the description of Proposal 1. There is no arrangement or understanding between any executive officer and any other person or persons pursuant to which any executive officer was or is to be selected as an executive officer of the Company.

Gail Sasaki, 61, has been our Vice President and Chief Financial Officer since January 2008 and our Corporate Secretary since August 2007. From 2006 to January 2008, Ms. Sasaki served as our Vice President of Finance. Prior to her tenure at Netlist, Ms. Sasaki served in various senior financial roles, including Chief Financial Officer of eMaiMai, Inc., a commercial technology company based in Hong Kong and mainland China; Chief Financial Officer, Senior Vice President of Finance, Secretary and Treasurer of eMotion, Inc. (a Kodak subsidiary and formerly Cinebase Software), a developer of business-to-business media management software and services, and Chief Financial Officer of MicroNet Technology, Inc., a leader in storage technology. Ms. Sasaki also spent seven years in public accounting leaving as an audit manager with Arthur Young (now known as Ernst &Young LLP). Ms. Sasaki earned a Bachelor's degree from the University of California at Los Angeles, and also earned a Master of Business Administration degree from the University of Southern California.

        We currently maintain one equity incentive plan, the existing key features, backgroundEquity Plan. The Equity Plan initially became effective in 2006, was first amended and a general descriptionrestated in 2010, and was again amended and restated in 2016. Our Board and our stockholders have previously approved the Equity Plan, including all amendments and restatements of the Amended Plan as proposed is set forth below. This summary is qualified in its entirety by thesuch plan. The terms of the AmendedEquity Plan a copy of which is attached to this proxy statement as are summarized below.

Appendix AShare Reserve and is incorporated herein by reference. Capitalized terms used in this Proposal No. 2 but not defined in this proxy statement shall have the same meaning as in the Amended Plan unless otherwise indicated.Share Limits

Key Features of        Each January 1, the Amended Plan:

Material Terms Related to “Performance-Based” Compensation

As discussed more fully below, we are also seeking re-approval of the material terms and the performance criteria that may be considered when granting certain awards under the Amended Plan intended to constitute “performance-based” compensation for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code” and such section, “Code Section 162(m)”). For awards of restricted stock, performance units and restricted stock units that are intended to be performance-based compensation under Code Section 162(m), the maximum number of shares subject to such awards that may be granted to a participant during a calendar year is 1,000,000 shares. The performance criteria that may be considered in granting awards intended to be “performance based” compensation under Code Section 162(m) are: (i) cash flow (before or after dividends), (ii) earnings per share (including, without limitation, earnings before interest, taxes, depreciation and amortization), (iii) stock price, (iv) return on equity, (v) stockholder return or total stockholder return, (vi) return on capital (including, without limitation, return on total capital or return on invested capital), (vii) return on investment, (viii) return on assets or net assets, (ix) market capitalization, (x) economic value added, (xi) debt leverage (debt to capital), (xii) revenue, (xiii) sales or net sales, (xiv) backlog, (xv) income, pre-tax income or net income, (xvi) operating income or pre-tax profit, (xvii) operating profit, net operating profit or economic profit, (xviii) gross margin, operating margin or profit margin, (xix) return on operating revenue or return on operating assets, (xx) cash from operations, (xxi) operating ratio, (xxii) operating revenue, (xxiii) market share improvement, (xxiv) general and administrative expenses or (xxv) customer service.

General Description of the Amended Plan

Purpose.  The purpose of the Amended Plan is to provide the Company’s employees, consultants and directors, whose present and potential contributions are important to the success of the Company and its affiliates, an incentive, through ownership of the Company’s common stock, to continue in service to the Company or an affiliate, and to help the Company and its affiliates compete effectively with other enterprisesreserved for the services of qualified individuals. As of April 19, 2016, approximately 103 employees, 5 directors and 6 consultants would be eligible to participate in the Amended Plan.

Shares Reserved for Issuanceissuance under the AmendedEquity Plan.  Each January 1st, the reserve will continue to be automatically increased by the lesser of (i) 2.5% of the shares then issued and outstanding, or (ii) 1,200,000 shares. The numberAs of June 18, 2018, there were 12,605,566 total shares of common stock availablereserved for issuance under the AmendedEquity Plan, will beincluding 8,532,984 shares subject to adjustment in the event of a stock split, stock or other extraordinary dividend, or other similar change in the common stock or capital structure of the Company. The shares to be issued pursuant tooutstanding equity awards granted under the Amended Plan may be authorized, but unissued, or reacquired common stock. As of April 19, 2016, the closing price of Netlist common stock on The Nasdaq Capital Market was $1.33 per share.this plan.

Any shares subject to an award or portion of an award which is forfeited, canceled or expires shall be deemed not to have been issued for purposes of determining the maximum aggregate number of shares which may be issued under the AmendedEquity Plan. Shares that have been issued under the AmendedEquity Plan pursuant to an award generally shall not be returned to the Amendedreserve under the Equity Plan and shall not become available for future issuance under the AmendedEquity Plan, except that if unvested shares are forfeited, or repurchased by the Companyus at the lower of their original purchase price or their fair market value at the time of repurchase, such shares shall become available for future grant under the AmendedEquity Plan. Shares tendered or withheld in payment of an option exercise price shall not be returned to or become available for future issuance under the AmendedEquity Plan.

The maximum number of shares with respect to which options and stock appreciation rights may be granted to a participant during a calendar year is 1,000,000 shares (with an additional 1,000,000 shares of stock in connection with the participant’sparticipant's initial employment). For awards of restricted stock, restricted stock units, and performance units that are intended to be performance-based compensation under Code Section 162(m), of the Code, the maximum number of shares granted to a participant during a calendar year is 1,000,000 shares.

Administration

        The foregoing limitations shall be adjusted proportionately by the Administrator (defined below) in connection with any change in the Company’s capitalization due to a stock split, stock dividend or similar event affecting the common stock of the Company and its determination shall be final, binding and conclusive.

Administration.  The AmendedEquity Plan is administered, with respect to grants of awards to employees, directors, officers, and consultants, by the plan administrator, (the “Administrator”),which is defined as the Board or one or more committees designated by the Board. With respect to grants to officers and directors, the committee shall be constituted in such a manner as to satisfy applicable laws, including Rule 16b-3 promulgated under the Exchange Act and Code Section 162(m). of the Code. The AmendedEquity Plan is administered by the Compensation Committee of our Board, the Boardcomposition of Directors,which satisfies such tax and SEC rules, subject to the committee’ssuch committee's delegation to management to grant awards to certain eligible persons of up to 25,000 shares.

Eligibility

Terms and Conditions of Awards.  The Amended Plan provides for the grant of stock options, restricted stock, restricted stock units, stock appreciation rights, stock grants and performance units (collectively referred        Persons eligible to as “awards”). Stock options granted under the Amended Plan may be either incentive stock options under the provisions of Section 422 of the Code or non-qualified stock options. Incentive stock options may be granted only to employees. Awards other than incentive stock options may be granted to employees, directors and consultants of the Company and its related entities. To the extent that the aggregate fair market value of shares of the Company’s common stock subject to options designated as incentive stock options which become exercisable for the first time by a participant during any calendar year exceeds $100,000, such excess options shall be treated as non-qualified stock options. Under the Amended Plan, awards may be granted to such employees, directors or consultants who are residing in non-U.S. jurisdictions as the Administrator may determine from time to time. Each award granted under the Amended Plan shall be designated in an award agreement.

The Administrator may issuereceive awards under the AmendedEquity Plan in settlement, assumptioninclude directors, officers and other employees of and consultants and advisors to our Company or substitution for, outstandingany of our subsidiaries. As of June 18, 2018, approximately76 officers and other employees of our Company and our subsidiaries (including all of the named executive officers) and each of our four non-employee directors are eligible to receive awards or obligations to grant future awards in connectionunder the Equity Plan.

Vesting

        Although the Equity Plan provides the administrator with the Company or a related entity acquiring another entity, an interest in another entity or an additional interest in a related entity whether by merger, stock purchase, asset purchase or other form of transaction. Subject to applicable laws, the Administrator has the authority, in its discretion to select employees and directors to whom awards may be granted from time to time, to determine whether and to what extent awards are granted, to determine the number of shares of the Company’s common stock or the amount of other consideration to be covered by each award (subject to the limitations set forth above under “Shares Reserved for Issuance under the Amended Plan”), to approve award agreements for use under the Amended Plan, to determine the terms and conditions of any award (including the vesting schedule applicable to the award), to amend the terms of any outstanding award granted under the Amended Plan, to construe and interpret the terms of the Amended Plan and awards granted, to establish additional terms, conditions, rules or procedures to accommodate the rules or laws of applicable non-U.S. jurisdictions and to take such other action not inconsistent with the terms of the Amended Plan, as the Administrator deems appropriate.

The term of any award granted under the Amended Plan shall be the term stated in the award agreement, provided, however, that the term of awards may not be longer than 10 years (or five years in the case of an incentive stock option granted to any participant who owns stock representing more than 10% of the combined voting power of the Company or any parent or subsidiary of the Company), excluding any period for which the participant has elected to defer the receipt of the shares or cash issuable pursuant to the award pursuant to a deferral program the Administrator may establish in its discretion.

The Amended Plan authorizes the Administrator to grant incentive stock options and non-qualified stock options at an exercise price not less than 100% of the fair market value of the common stock on the date the option is granted (or 110%, in the case of an incentive stock option granted to any employee who owns stock representing more than 10% of the combined voting power of the Company or any parent or subsidiary of the Company). In the case of stock appreciation rights, the base appreciation amount shall not be less than 100% of the fair market value of the

common stock on the date of grant. In the case of awards intended to qualify as performance-based compensation, the exercise or purchase price, if any, shall be not less than 100% of the fair market value per share on the date of grant. In the case of all other awards granted under the Amendedplan, stock option awards granted to employees under the

may be granted to a participant.

For awards of restricted stock and restricted stock units that are intended to be performance-based compensation under Code Section 162(m), the maximum number of shares subject to such awards that may be granted to a participant during a calendar year is 1,000,000 shares. The foregoing limitation shall be adjusted proportionately by the Administrator in connection with any change in the Company’s capitalization due to a stock split, stock dividend or similar event affecting the common stock of the Company and its determination shall be final, binding and conclusive. In order for restricted stock and restricted stock units to qualify as performance-based compensation, the Administrator must establish a performance goal with respect to such award in writing not later than 90 days after the commencement of the services to which it relates and while the outcome is substantially uncertain. In addition, the performance goal must be stated in terms of an objective formula or standard.

Under Code Section 162(m) as currently implemented by the Internal Revenue Service, a “covered employee” is the Company’s chief executive officer and the three other most highly compensated officers of the Company (other than the Chief Financial Officer).

The Amended Plan includes the following performance criteria that may be considered by the Administrator when granting performance-based awards: (i) cash flow (before or after dividends), (ii) earnings per share (including, without limitation, earnings before interest, taxes, depreciation and amortization), (iii) stock price, (iv) return on equity, (v) stockholder return or total stockholder return, (vi) return on capital (including, without limitation, return on total capital or return on invested capital), (vii) return on investment, (viii) return on assets or net assets, (ix) market capitalization, (x) economic value added, (xi) debt leverage (debt to capital), (xii) revenue, (xiii) sales or net sales, (xiv) backlog, (xv) income, pre-tax income or net income, (xvi) operating income or pre-tax profit, (xvii) operating profit, net operating profit or economic profit, (xviii) gross margin, operating margin or profit margin, (xix) return on operating revenue or return on operating assets, (xx) cash from operations, (xxi) operating ratio, (xxii) operating revenue, (xxiii) market share improvement, (xxiv) general and administrative expenses or (xxv) customer service.

Change in Capitalization.  Subject to any required action by the stockholders of the Company, the number of shares of common stock covered by outstanding awards, and the number of shares of common stock which have been authorized for issuance under the Amended Plan but as to which no awards have yet been granted or which have been returned to the Amended Plan, the exercise or purchase price of each such outstanding award, the maximum number of shares of common stock that may be granted subject to awards to any participant in any calendar year, as well as any other terms that the Administrator determines require adjustment shall be proportionately adjusted by the Administrator in the event of (i) any increase or decreasean "acquisition," as defined in the number of issued shares of common stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification ofEquity Plan, the shares, or similar transaction affecting the common stock, (ii) any other increase or decrease in the number of issued shares of common stock effected without receipt of consideration by the Company, or (iii)  any other transaction with respect to common stock including a corporate merger, consolidation, acquisition of property or stock, separation (including a spin-off or other distribution of stock or property), reorganization, liquidation (whether partial or complete) or any similar transaction; provided, however that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.”

Corporate Transactions.  Effective upon the consummation of an Acquisition, the Administratoradministrator may provide for the termination of outstanding awards under the Amended Plan.  However, such awards shall not terminate to the extent the contractual obligations represented by theEquity Plan, unless awards are assumed or replaced by the successor entity.entity in the acquisition. Except as provided in an individual award agreement, for the portion of each award that is not assumed or replaced by the successor corporation,entity, such portion of the award may be vested and become exercisable andin full or be released from any repurchase or forfeiture rights prior tobefore the effective date of the Acquisition,acquisition, provided that the participant’sparticipant's continuous service has not terminated prior tobefore such date.

Under the Amended Plan, an Acquisition is generally defined as: (i) a merger or consolidation of the Company with or into another person; (ii) the sale, transfer, or other disposition of all or substantially all of the Company’s assets to one or more other persons in a single transaction or series of related transactions; or (iii) the acquisition of beneficial ownership (determined pursuant to Securities and Exchange Commission Rule 13d-3 promulgated under the Securities

Exchange Act of 1934, as amended and in effect from time to time) by any person of more than 50% of the Company’s outstanding common stock pursuant to a tender or exchange offer made directly to the Company’s stockholders, other than an underwriter temporarily holding common stock pursuant to an offering of such common stock. Notwithstanding the foregoing, a transaction shall not constitute an “Acquisition” if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately prior to such transaction. 

Amendment, Suspension orand Termination of the Amended Plan.

        The Board may at any time amend, suspend or terminate the Amended Plan. The AmendedEquity Plan will be for a term of 10 years from its 2016 amendment and restatement, unless sooner terminated by the Board. ToThe Board may at any time amend, suspend or terminate the Equity Plan, subject to obtaining stockholder approval for any amendment to the extent necessary to comply with applicable provisions of federal securities laws state corporate and securities laws,rules.

U.S. Federal Income Tax Consequences Relating to Awards Granted under the Code, the rules of any applicable stock exchange or national market system, and the rules of any non-U.S. jurisdiction applicable to awards granted to residents therein, the Company shall obtain stockholder approval of any such amendment to the AmendedEquity Plan in such a manner and to such a degree as is required.

Certain Federal Tax Consequences

The following summary of the federal income tax consequences of the Amended Plan and the awards granted thereunder is based upon federal income tax laws in effect onunder the date of this proxy statement. This summaryEquity Plan does not purport to be complete, and does not discuss non-U.S., state or local tax consequences or additional guidance that is expected to be issued by the Treasury Department under Section 409A of the Code (“Code Section 409A”).Code.

Non-Qualified Stock Options.        The grant of a non-qualified stock option under the AmendedEquity Plan will not result in any federal income tax consequences to the option holder or to the Company. Upon exercise of a non-qualified stock option, the option holder is 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 subject to withholding for federal income and employment tax purposes. The Company is entitled to an income tax deduction in the amount of the income recognized by the option holder, subject to possible limitations imposed by Code Section 162(m) of the Code and so long as the Company withholds the appropriate taxes with respect to such income (if required) and the option holder’sholder's total compensation is deemed reasonable in amount. Any gain or loss on the option holder’sholder'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.

In the event a non-qualified stock option is amended, such option may be considered deferred compensation and subject to the rules of Code Section 409A, which provides rules regarding the timing of payment of deferred compensation. An option subject to Code Section 409A, which fails to comply with the rules of Code Section 409A, can result in an additional 20% tax obligation, plus penalties and interest.

Incentive Stock Options.        The grant of an incentive stock option under the AmendedEquity Plan will not result in any federal income tax consequences to the option holder or to the Company. An option holder recognizes no 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 option holder has held the shares of common stock. If the option holder 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 option holder 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 option holder fails to satisfy either of the foregoing holding periods, he or she must recognize ordinary income in the year of the disposition (referred to as a “disqualifying disposition”"disqualifying disposition"). The amount of such ordinary income generally

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 option holder, subject to possible limitations imposed by Code Section 162(m) of the Code and so long as the option holder’sholder's total compensation is deemed reasonable in amount.

The “spread”        Federal income tax consequences of other awards we may grant under an incentivethe Equity Plan are generally as follows: nontransferable restricted stock option — i.e.,subject to a substantial risk of forfeiture results in income recognition equal to the difference betweenexcess of the fair market value ofover the sharesprice paid (if any) only at exercise and the exercise price — is classified as an item of adjustment in the year of exercise for purposes of the alternative minimum tax.  If an option holder’s alternative minimum tax liability exceeds such option holder’s regular income tax liability, the option holder will owe the larger amount of taxes.  In order to avoid the application of alternative minimum tax with respect to incentive stock options, the option holder 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 an incentive stock option is amended, such option may be considered deferred compensation and subject to the rules of Code Section 409A. An option subject to Code Section 409A, which fails to comply with the rules of Code Section 409A, can result in an additional 20% tax obligation, plus penalties and interest. In addition, the amendment of an incentive stock option may convert the option from an incentive stock option to a non-qualified stock option.

Restricted Stock and Stock Grants.  The grant of restricted stock will 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 thattime the restrictions lapse (or grant in(unless the caserecipient elects to accelerate recognition as of athe date of grant); bonuses, stock grant. This income isappreciation rights, cash and stock-based performance awards, dividend equivalents, stock units, and other types of awards are generally subject to withholding for federal incometax at the time of payment; and employment tax purposes. Thecompensation otherwise effectively deferred is taxed when paid. In each of the foregoing cases, the Company is generally entitled to ana corresponding deduction at the time the participant recognizes income, tax deduction in the amount of the ordinary income recognized by the recipient, subject to possible limitations imposed by Code Section 162(m) of the Code and so long as the Company withholds the appropriate taxes with respect to such income (if required) and the recipient’s total compensation is deemed reasonable in amount. Any gain or loss on the recipient’s subsequent disposition of the shares will receive long or short-term 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 may make an election under Section 83(b) of the Code (“Section 83(b) Election”) to recognize as ordinary compensation income in the year that such restricted stock is granted, the amount equal to the spread between the amount paid for such stock and the fair market value 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 is issued.

Stock Appreciation Rights.  Recipients of stock appreciation rights (“SARs”) generally should not recognize income until the SAR is exercised (assuming there is no ceiling on the value of the right). Upon exercise, the recipient will normally recognize taxable ordinary income for federal income tax purposes equal to the amount of cash and fair market value of the shares, if any, received upon such exercise. Recipients who are employees will be subject to withholding for federal income and employment tax purposes with respect to income recognized upon exercise of a SAR. Recipients 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 will be entitled to a tax deduction to the extent and in the year that ordinary income is recognized by the recipient, subject to possible limitations imposed by Code Section 162(m) and so long as the Company withholds the appropriate taxes with respect to such income (if required) and the recipient’s total compensation is deemed reasonable in amount.

A SAR can be considered non-qualified deferred compensation and subject to Code Section 409A.  A SAR that does not meet the requirements of Code Section 409A will result in an additional 20% tax obligation, plus penalties and interest to such recipient.

Restricted Stock Units and Performance Units.  Recipients of restricted stock units and performance units generally should not recognize income until such units are converted into cash or shares of stock.  Upon conversion, the

recipient will normally recognize taxable ordinary income for federal income tax purposes equal to the amount of cash and fair market value of the shares, if any, received upon such conversion.  Recipients who are employees will be subject to withholding for federal income and employment tax purposes with respect to income recognized upon conversion of the restricted stock units.  Participants will recognize gain upon the disposition of any shares received upon conversion of the restricted stock units 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 will be entitled to a tax deduction to the extent and in the year that ordinary income is recognized by the recipient, subject to possible limitations imposed by Code Section 162(m) and so long as the Company withholds the appropriate taxes with respect to such income (if required) and the recipient’srecipient's total compensation is deemed reasonable in amount.

RestrictedSecurities Authorized for Issuance under Equity Compensation Plans

        The following table provides information as of December 30, 2017 about compensation plans under which our equity securities are authorized for issuance:

Table of Contents

AUDIT COMMITTEE REPORT

        This report has been reviewed and approved by the 2006 Plan to our named executive officers named in the Summary Compensation Table, to all current executive officers as a group, to all non-employee directors as a group and to all other employees as a group, in each case as of January 2, 2016. All members of the Board and allAudit Committee of the Company’s executive officers are eligible for awards under the Amended Plan and thus have a personal interest in the approval of the Amended Plan. The level of past grants is not necessarily indicative of the level of future grants.

Required Vote

Approval of this proposal requires the affirmative vote of a majority of the votes cast on this proposal at a meeting at which a quorum is present. Abstentions and broker non‑votes will have no effect on the outcome of the vote on this proposal.

The Board of Directors recommends that you vote “FOR”Directors. Each such member is an independent director within the approvalmeaning of the Amended Plan.

PROPOSAL NO. 3

ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION

The Dodd‑Frank Wall Street Reformapplicable Nasdaq and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) added Section 14A to Exchange Act, which enables our stockholders to vote to approve, on an advisory, non-binding basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’sSEC rules.

Our named executive officer compensation program is designed to attract, motivate and retain our named executive officers, who are critical to our success. The Compensation Committee believes an effective compensation program is designed to recruit and retain executive leadership and is focused on attaining long‑term corporate goals and increasing stockholder value. The Compensation Committee believes that it has taken a responsible approach to compensating our named executive officers. Please read the “Executive Compensation” section of this proxy statement for additional details about our executive compensation program, including information about the Fiscal 2015 compensation of our named executive officers.

We are asking our stockholders to indicate their support for our named executive officer compensation as described in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers as described in this proxy statement. Accordingly, we will ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:

“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s proxy statement for the 2016 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission.”

The say-on-pay vote is advisory and therefore not binding on the Company, the Compensation Committee or our Board; however, our Board and our Compensation Committee value the opinions of our stockholders and will consider the results of this vote in future compensation decisions, including evaluating whether any actions are necessary to address any concerns of our stockholders evidenced by a significant negative vote on this resolution.

Required Vote

Approval of this proposal requires the affirmative vote of a majority of the votes cast on this proposal at a meeting at which a quorum is present. Abstentions and broker non‑votes will have no effect on the outcome of the vote on this proposal.

The Board of Directors recommends that you vote “FOR” the approval of the compensation of our named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC.

PROPOSAL NO. 4

RATIFICATION OF APPOINTMENT OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has selected KMJ Corbin & Company LLP asthe duties and powers described in its written charter adopted by the Board. A copy of the charter is available on our independent registered public accounting firm with respect to our consolidated financial statements for the fiscal year ending December 31, 2016 (“Fiscal 2016”)website,http://www.netlist.com. In taking this action,

        The purpose of the Audit Committee considered KMJ Corbin & Company LLP’s independenceis to assist the Board in overseeing the integrity of Company's financial reporting process and financial statements, the Company's compliance with respect to the services to be performedlegal and other factors that the Audit Committeeregulatory requirements, and the Board of Directors believe are advisableperformance, qualifications and in the best interest of our stockholders. Stockholder ratification of the selection of our independent registered public accounting firm is not required by our Bylaws or otherwise; however, as a matter of good corporate governance, the Audit Committee has decided to submit its selection to stockholders for ratification. If our stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain the firm. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent public accountant at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders.

Representatives of KMJ Corbin & Company LLP are expected to attend the Annual Meeting and will be available to respond to appropriate questions and to make a statement if they so desire. If KMJ Corbin & Company LLP should decline to act or otherwise become incapable of acting as our independent registered public accounting firm or if KMJ Corbin & Company LLP’s engagement is otherwise discontinued for any reason, the Audit Committee will appoint another independent registered public accounting firm to serve as our independent registered public accounting firm for Fiscal 2016.

Fees Paid to Independent Registered Public Accounting Firm

In connection with the audit of our consolidated financial statements for Fiscal 2015, we entered into an agreement with KMJ Corbin & Company LLP that sets forth the terms by which KMJ Corbin & Company LLP will provide audit services for us. The following table presents the aggregate fees billed for the indicated services performed by KMJ Corbin & Company LLP during Fiscal 2015 and our fiscal year ended December 27, 2014 (“Fiscal 2014”):

Audit Fees.  Audit fees consist of the aggregate amount of fees billed to us for Fiscal 2015 and Fiscal 2014 by KMJ Corbin & Company LLP, our independent registered public accounting firm, for professional services rendered for the audit of our annual consolidated financial statements and the review of our quarterly consolidated financial statements. These fees also included fees for professional services rendered that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings or engagements in Fiscal 2015 and Fiscal 2014, including the review of our registration statements on Form S‑3 and Form S‑8 and certain other related matters, such as the delivery of comfort letters and consents in connection with our registration statements.

KMJ Corbin & Company LLP did not bill any audit‑related fees, tax fees or other fees to us in Fiscal 2015 or Fiscal 2014.

Pre‑approval Policies and Procedures

Our Audit Committee’s charter requires our Audit Committee to pre‑approve all audit and permissible non‑audit services to be performed for the Company by our independent registered public accounting firm, except for certain “de minimus” non‑audit services that may be ratified by the Audit Committee in accordance with applicable rules

of the SEC, in order to assure that the provision of such services does not impair the independence of our independent registered public accounting firm. Our Audit Committee pre‑approved all services performed by KMJ Corbin & Company LLP in Fiscal 2015Management is responsible for the Company's financial reporting process and concluded that such services were compatible with the maintenance of the firm’s independence in the conduct of its auditing functions.

Required Vote

Approval of this proposal requires the affirmative vote of a majority of the votes cast on this proposal at a meeting at which a quorum is present. Abstentions will have no effect on the outcome of the vote on this proposal. Broker non‑votes are not expected to result from the vote on this proposal.

The Board of Directors recommends that you vote “FOR” the ratification of KMJ Corbin & Company LLP
as ourfor designing and monitoring internal control systems. Our independent registered public accounting firm, for Fiscal 2016.

AUDIT COMMITTEE REPORT

The Audit Committee of the Board of Directors is responsible for providing independent, objective oversight of the Company’s accounting functions and internal controls. The Audit Committee is currently composed of Charles F. Cargile, Vincent Sheeran and Blake A. Welcher, each of whom has been determined by our Board of Directors to be independent directors. Management is responsible for internal controls and the financial reporting process. Our independent registered public accounting firmKMJ, is responsible for performing an independent audit of the Company’sCompany's consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States)("PCAOB"). The Audit Committee’s responsibility is to monitor and oversee these processes.

In fulfilling its responsibilities, the Audit Committee methas reviewed and discussed, with management and our independent registered public accounting firm to review and discussKMJ, our annual audited consolidated financial statements and our interim unaudited consolidated financial statements for Fiscal 2015, including2017. The Audit Committee has also discussed with KMJ the disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10‑K and quarterly reports on Form 10‑Q covering such periods, any material changes in accounting policies used in preparing such consolidated financial statements prior to filing the annual report on Form 10‑K or our quarterly reports on Form 10‑Q with the SEC, and the itemsmatters required to be discussed by Statement of Auditing StandardsStandard No. 1301, as amended (AICPA, Professional Standards, Vol. 1. AU section 380),"Communications with respect to annual consolidated financial statements and Statement of Auditing Standards No. 100, as amended (AICPA, Professional Standards, Vol. 1. AU section 722), with respect to quarterly consolidated financial statements.

Audit Committees." In addition, the Audit Committee has received the written disclosures and the letter from the independent registered public accounting firmKMJ required by applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding such firm’sKMJ's communications with the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm such firm’s independence from the Company andKMJ its management. The Audit Committee has concluded that the independent registered public accounting firm is independent from the Company and our management.independence.

In relianceBased on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the Company's audited consolidated financial statements be included in the Company’s annual report on Form 10‑K for the year ended January 2, 2016,Annual Report for filing with the SEC.

        This Audit Committee report shall not be deemed to be "soliciting material," or to be "filed" with the SEC or subject to Regulation 14A or 14C under the Exchange Act, other than as provided by applicable SEC rules, or to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically request that the information be treated as soliciting material or specifically incorporate it by reference into a document filed under the Securities Act of 1933, as amended ("Securities Act"), or the Exchange Act. This audit committee report will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The table below sets forth information regarding the ownership of our common stock, as of April 19, 2016June 18, 2018 unless otherwise indicated in the footnotes to the table, by (i) all persons known by us to beneficially own more than 5% of our common stock, (ii) each of our current directors, and(iii) each of our named executive officers, and (iii)(iv) all of our directors and executive officers as a group. We know of no agreements among our stockholders that relate to voting or investment power over our common stock or any arrangement the operation of which may at a subsequent date result in a change of control of us.our Company.

Beneficial ownership is determined in accordance with Rule 13d‑3 under the Exchange Actapplicable SEC rules and generally includesreflects sole or shared voting or investment power over securities. Under this rule,these rules, a person is deemed to be the beneficial owner of securities that can be acquired by suchthe person has the right to acquire as of or within 60 days after April 19, 2016June 18, 2018, upon the exercise of outstanding stock options or warrants, the conversion of outstanding convertible notes, or the exercise or conversion of any other derivative securities affording suchthe person the right to acquire shares of our common stock. Thus,As a result, each person’sperson's percentage ownership set forth in the table below is determined by assuming that all outstanding stock options, warrants or warrantsother derivative securities held by such person that are exercisable or convertible as of or within 60 days after April 19, 2016June 18, 2018 have been exercised.exercised or converted. Except in cases where community property laws apply or as indicated in the footnotes to the table, we believe that each person identified in the table below possesses sole voting and investment power over all shares of common stock shown as beneficially owned by such person.