APPROVAL OF AMENDMENT TO 2002 EMPLOYEE
STOCK PURCHASE PLAN
The Company’s stockholders are being asked to approve a 650,000 share increase in the number
of shares of Common Stock reserved for issuance under the Company’s 2002 Employee Stock Purchase Plan (the “ESPP”).
The ESPP was adopted by the Board of Directors in March 2002 and was approved by our
stockholders in May 2002. The ESPP, as initially approved, permitted the issuance of 1,500,000 shares of Common Stock. Amendments to the ESPP, adopted in May 2004, May 2006, May 2009, July 2011, August 2013, July 2014, June 2016, June 2017, June
2018, June 2019, June 2020, June 2021 and June 2022 increased the maximum number of shares available for issuance under the ESPP by an additional 18,300,000 shares in the aggregate, resulting in 19,800,000 shares of Common Stock permitted for
issuance under the ESPP. As of March 31, 2023, there were 945,187 shares of Common Stock currently available for issuance under the ESPP.
In April 2023, the Board of Directors unanimously approved an amendment to the ESPP, subject
to obtaining stockholder approval, to increase the number of shares of Common Stock available for issuance under the ESPP by 650,000 shares. The ESPP has not been amended in any material way, other than to increase the number of shares of Common
Stock available for issuance under the ESPP. If this proposal is approved by our stockholders, the shares reserved and available for issuance under the ESPP for the current offering period and for offering periods commencing on or after July 1,
2023, will be increased by 650,000 shares. Based on the Company’s current forecasts and estimated participation rates, the Company expects that with this increase, the ESPP will have enough shares of Common Stock to cover ESPP purchases through
If this proposal is not approved by the Company’s stockholders, the shares reserved and
available for issuance under the ESPP will be 945,187, and, based on current forecasts and estimated participation rates, the Company anticipates this would only be enough shares of Common Stock to cover ESPP purchases through January 2024.
The intent of the ESPP is to encourage employees to acquire equity ownership in the Company
in an effort to promote the closer alignment of the interests of employees with those of the Company’s stockholders. The proposed increase in the number of shares available for issuance under the ESPP will enable the Company to continue to use
the ESPP as a valuable tool for attracting and retaining key personnel and aligning the interests of ESPP participants with those of the Company’s stockholders. We believe that the ESPP remains an important element of a competitive compensation
package, especially for technology companies, as these plans are offered by most public companies with which we compete for employees. Approximately 50% of our employees eligible to participate in the ESPP during the offering period ending
July 1, 2023 are participating.
Description of the ESPP
The following is a summary of the principal features of the ESPP and its operation. This
summary is qualified in its entirety by reference to the ESPP, a copy of which is appended as Appendix A.
Purpose. The purpose
of the ESPP is to provide employees with an opportunity to purchase Common Stock through payroll deductions.
ESPP is administered by the Board of Directors or a committee appointed by the Board of Directors (in either case, the “Administrator”). The Administrator has full and exclusive discretionary authority to construe, interpret and apply the terms
of the ESPP, and the Administrator’s findings, decisions, and determinations are final and binding upon all parties to the full extent permitted by law. The ESPP is intended to qualify under the provisions of Sections 421 and 423 of the Code,
provided that the Administrator may permit participation in the ESPP in a component of the ESPP that does not so qualify, in order to accommodate the specific requirements of local laws, regulations and procedures for jurisdictions outside of
the U.S. in accordance with the terms of the ESPP.
Currently, each of our employees, and each employee of our designated subsidiaries, whose customary employment with the Company or the designated subsidiary is at least 20 hours per week and more than five months in any calendar year, is
eligible to participate in the ESPP. As of the beginning of the current offering period on January 1, 2023, approximately 1,307 employees were eligible to participate in the ESPP. No employee who immediately following the grant of a purchase
right under the ESPP, would own stock and/or hold outstanding options to purchase stock that is equal to or greater than 5% of the total combined voting power or value