Preliminary Proxy Soliciting materials
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UNITED STATES
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. 1)
Filed by the Registrant x Filed by a Party other than the
Registrant ¨
Check the appropriate box:
UNWIRED PLANET, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
20 FIRST STREET, FIRST FLOOR
LOS ALTOS, CALIFORNIA 94022
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 4, 2015
Dear Stockholder:
You are cordially invited to attend the 2015 Annual Meeting of
Stockholders (the Annual Meeting) of Unwired Planet, Inc. The
meeting will be held on Friday, December 4, 2015, at 8:00 a.m.
Pacific Standard Time at the offices of Pillsbury Winthrop Shaw
Pittman LLP, 725 South Figueroa Street, Suite 2800, Los Angeles, CA
90017-5406 for the following purposes:
The foregoing items of business are more fully described in the
Proxy Statement accompanying this Notice. The Board of Directors
has fixed the close of business on October 6, 2015 as the record
date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting and at any adjournment or
postponement thereof.
By Order of the Board of Directors,
Los Altos, California
October , 2015
Important Notice Regarding the Availability of Proxy Materials
for the Annual
Meeting of Stockholders to Be Held on December 4, 2015.
The notice, the proxy statement and the annual report to
stockholders are available at
https://materials.proxyvote.com/91531F
You are cordially invited to attend the Annual Meeting in
person. Whether or not you expect to attend the Annual Meeting,
please complete, date, sign and return the proxy card mailed to
you, or vote over the telephone or the Internet as instructed in
these materials, as promptly as possible in order to ensure your
representation at the Annual Meeting. Even if you have voted by
proxy, you may still vote in person if you attend the Annual
Meeting. Please note, however, that if your shares are held of
record by a broker, bank or other nominee and you wish to vote at
the Annual Meeting, you must obtain a proxy issued in your name
from that record holder.
2015 ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
TABLE OF CONTENTS
UNWIRED PLANET, INC.
20 FIRST STREET, FIRST FLOOR
LOS ALTOS, CALIFORNIA 94022
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON December 4, 2015
October , 2015
GENERAL INFORMATION
Our Board of Directors (the Board) is soliciting proxies for our
Annual Meeting of Stockholders to be held on Friday, December 4,
2015 beginning at 8:00 a.m. local time at the offices of Pillsbury
Winthrop Shaw Pittman LLP, 725 South Figueroa Street, Suite 2800,
Los Angeles, CA 90017-5406 (the Annual Meeting). An Annual Report
to Stockholders, containing financial statements for the year ended
June 30, 2015, is being mailed together with this Proxy Statement
to all stockholders entitled to vote at the Annual Meeting. This
Proxy Statement and the form of proxy were first mailed to
stockholders on or about October , 2015.
This Proxy Statement contains important information for you to
consider when deciding how to vote on the matters brought before
the meeting. Please read it carefully. Unless the context requires
otherwise, the words Unwired Planet, we, Company, us and our refer
to Unwired Planet, Inc.
QUESTIONS AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING
Why am I receiving these materials?
Unwired Planet has made these materials available to you on the
Internet and has delivered printed versions of these materials to
you by mail, in connection with our solicitation of proxies for use
at the Annual Meeting, to be held at the offices of Pillsbury
Winthrop Shaw Pittman LLP, 725 South Figueroa Street, Suite 2800,
Los Angeles, CA 90017-5406, on Friday, December 4, 2015, at 8:00
a.m. Pacific Standard Time, and at any postponement(s) or
adjournment(s) thereof. You are invited to attend the Annual
Meeting and are requested to vote on the proposals described in
this Proxy Statement. The Annual Meeting will be held at the
offices located at the address shown above.
What is included in these proxy materials?
These proxy materials include:
These proxy materials also include the proxy card or vote
instruction form for the Annual Meeting.
I share an address with another stockholder, and we received
only one paper copy of the proxy materials. How may I obtain an
additional copy of the proxy materials?
Unwired Planet has adopted a procedure called householding,
which the SEC has approved. Under this procedure, we are delivering
a single copy of this Proxy Statement and the Annual Report to
multiple stockholders who share the same address unless we have
received contrary instructions from one or more of the
stockholders. This procedure reduces our printing costs, mailing
costs and fees. Stockholders who participate in householding will
continue to be able to access and receive separate proxy cards.
Upon written or oral request, we will deliver promptly a separate
copy of this Proxy Statement and the Annual Report to any
stockholder at a shared address to which we delivered a single copy
of any of these documents. To receive a separate copy of this Proxy
Statement or the Annual Report, stockholders may write or call
Unwired Planet at the following address and telephone number: 20
First Street, First Floor, Los Altos, California 94022, (650)
518-7111. Stockholders who hold shares in street name (as described
below) may contact their brokerage firm, bank, broker-dealer or
other similar organization to request information about
householding. Additionally, any stockholders who are presently
sharing an address and receiving multiple copies of the Proxy
Statement or the Annual Report and who would rather receive a
single copy of these materials in the future may instruct us by
directing their request in the same manner.
How can I get electronic access to the proxy materials?
These proxy materials provide you with instructions regarding
how to:
Unwired Planets proxy materials are also available for viewing,
printing and downloading on our website at
www.unwiredplanet.comin the Investors
section.
Choosing to receive future proxy materials by email will save us
the cost of printing and mailing documents to you and will reduce
the impact of our annual meetings on the environment. If you choose
to receive future proxy materials by email, you will receive an
email message next year with instructions containing a link to
those materials and a link to the proxy voting website. Your
election to receive proxy materials by email will remain in effect
until you terminate it.
Who may vote at the Annual Meeting?
Only stockholders of record at the close of business on October
6, 2015 will be entitled to vote at the Annual Meeting. On this
record date, there were 112,809,935 shares of common stock
outstanding and entitled to vote.
What items will be voted on at the Annual Meeting?
Stockholders will vote on eight items at the Annual Meeting:
What are the Boards voting recommendations?
The Board recommends that you vote your shares:
What is the difference between a stockholder of record and a
beneficial owner of shares held in street name?
Stockholder of Record. If your shares are registered
directly in your name with our transfer agent, Computershare Trust
Company N.A. (Transfer Agent), you are considered the stockholder
of record with respect to those shares, and the Proxy Statement was
sent directly to you by Unwired Planet. If you request printed
copies of the proxy materials by mail, you will receive a proxy
card.
Beneficial Owner of Shares Held in Street Name. If your
shares are held in an account at a brokerage firm, bank,
broker-dealer, or other similar organization, then you are the
beneficial owner of shares held in street name, and the Proxy
Statement was forwarded to you by that organization. The
organization holding your account is considered the stockholder of
record for purposes of voting at the Annual Meeting. As a
beneficial owner, you have the right to direct that organization on
how to vote the shares held in your account. If you request printed
copies of the proxy materials by mail, you will receive a vote
instruction form.
If I am a stockholder of record of Unwired Planets shares, how
do I vote?
There are four ways to vote:
We provide Internet and telephonic proxy voting to allow you to
vote your shares online or by telephone, with procedures designed
to ensure the authenticity and correctness of your proxy vote
instructions. However, please be aware that you must bear any costs
associated with your Internet access or telephonic voting, such as
usage charges from Internet access providers and telephone
companies.
If I am a beneficial owner of shares held in street name, how do
I vote?
There are four ways to vote:
How many votes do I have?
On each matter to be voted upon, you have one vote for each
share of common stock you own as of October 6, 2015.
What if I return a proxy card or otherwise vote but do not make
specific choices?
If you submit a proxy by Internet, telephone or mail without
giving specific voting instructions on one or more matters listed
in the Notice, your shares will be voted as recommended by our
Board on such matters, and as the proxyholders may determine in
their discretion with respect to any other matters properly
presented for a vote at the meeting.
Who is paying for this proxy solicitation?
We will pay for the entire cost of soliciting proxies. In
addition to the mailed proxy materials, our directors and employees
may also solicit proxies in person, by telephone, or by other means
of communication. Directors and employees will not be paid any
additional compensation for soliciting proxies. We may also
reimburse brokerage firms, banks and other agents for the cost of
forwarding proxy materials to beneficial owners.
What does it mean if I receive more than one proxy card or
Notice?
If you receive more than one proxy card or Notice, your shares
are registered in more than one name or are registered in different
accounts. Please complete, sign and return each proxy card, or vote
with respect to each Notice, to ensure that all of your shares are
voted.
May I change my vote after submitting my proxy?
Yes. You may revoke your proxy at any time before the final vote
at the Annual Meeting. If you are the record holder of your shares,
you may revoke your proxy in any one of three ways:
Your most current proxy card, or telephone or internet proxy, is
the one that is counted.
If your shares are held by your broker or bank as a nominee or
agent, you should follow the instructions provided by your broker
or bank.
When are stockholder proposals due for the 2016 annual
meeting?
Proposals of stockholders intended for inclusion in the Proxy
Statement to be furnished to all stockholders entitled to vote at
our 2016 annual meeting of stockholders, pursuant to Rule 14a-8
promulgated under the Exchange Act by the SEC, must be received at
our principal executive offices not later than June , 2016. Under
our bylaws, stockholders who wish to make a proposal at the 2016
annual meeting other than one that will be included in our Proxy
Statement must notify us between August 6, 2016 and September 5,
2016. However, in the event that an annual meeting is called for a
date that is not within 30 days before or after the first
anniversary of the preceding years annual meeting, then, in order
to be timely, a stockholders notice must be received by our
Secretary not later than the close of business on the 10th day
following the day on which the notice of the date of the meeting
was mailed or the public announcement of the date of the meeting is
first made, whichever first occurs. If you wish to submit a
stockholder proposal or director nomination, please review our
bylaws, which contain a description of the information required to
be submitted as well as additional requirements about advance
notice of stockholder proposals and director nominations.
What are broker non-votes?
Broker non-votes occur when a beneficial owner of shares held in
street name does not give instructions to the broker or nominee
holding the shares as to how to vote on matters deemed non-routine.
Generally, if shares are held in street name, the beneficial owner
does not provide voting instructions to the broker or nominee
holding the shares. If the beneficial owner does not provide voting
instructions, the broker or nominee can still vote the shares with
respect to matters that are considered to be routine, but not with
respect to non-routine matters. Under the rules and interpretations
of the national securities exchanges, non-routine matters include
director elections (whether contested or uncontested) and matters
involving a contest or a matter that may substantially affect the
rights and privileges of stockholders.
The election of directors (Proposal 1), the amendment to our
2006 Stock Incentive Plan (Proposal 3), the Reverse Stock Split
(Proposal 4), the Authorized Share Reduction (Proposal 5), the
adoption of the Protective Amendment (Proposal 6), the approval of
the Tax Benefits Preservation Agreement (Proposal 7) and the
advisory vote on executive compensation (Proposal 8) are considered
to be non-routine matters and as a result, brokers and nominees
cannot vote your shares on these proposals in the absence of your
direction. The ratification of Grant Thornton LLP as our
independent registered public accounting firm for the fiscal year
ending June 30, 2016 (Proposal 2) is considered to be a routine
matter and, as a result, brokers and nominees will be able to vote
your shares on this proposal in the absence of your direction.
How are votes counted?
Votes will be counted by the inspector of election appointed for
the Annual Meeting, who will separately count For, Withheld, and
broker non-votes with respect to the election of directors, and For
and Against votes, abstentions and broker non-votes, with respect
to all other proposals.
For Proposal 1, withheld votes and broker non-votes will have no
effect on the outcome of the election of directors.
For Proposals 2, 3, 4, 5, 6, 7 and 8, abstentions will be
included in determining the number of shares present and entitled
to vote on the Proposals, thus having the effect of a vote against
the proposal. For Proposals 3, 4, 5, 6, 7 and 8, broker non-votes,
if any, are not counted in determining the number of shares present
and entitled to vote and will therefore have no effect on the
outcome.
The ratification of our independent registered public accounting
firm is a routine matter on which we expect that brokers and other
nominees will be entitled to vote without receiving instructions
from the beneficial holder of the applicable shares of common
stock. Accordingly, we expect no broker non-votes will result from
this proposal; however, if any broker non-votes are submitted, they
will have the same effect as an Against vote. If your shares are
held by your broker as your nominee (that is, in street name), you
will need to obtain a voting instruction form from the institution
that holds your shares and follow the instructions included on that
form regarding how to instruct your broker to vote your shares.
How many votes are needed to approve each proposal?
For Proposal 1, the election of six directors, the six nominees
receiving the most FOR votes at the meeting in person or by proxy
will be elected. Each of the other matters requires for approval
the favorable vote of a majority of the votes present and entitled
to vote on the applicable matter at the Annual Meeting in person or
by proxy.
What is the quorum requirement?
The representation in person or by proxy of at least a majority
of the outstanding shares of our common stock entitled to vote at
the Annual Meeting is necessary to constitute a quorum for the
transaction of business. On the record date, there were 112,809,935
shares outstanding and entitled to vote. Thus, 56,404,968 shares
must be represented by stockholders present at the meeting or by
proxy to have a quorum.
If you are a holder of record, your shares will be counted
towards the quorum only if you submit a valid proxy or are present
at the Annual Meeting. Abstentions and broker non-votes are counted
as present or represented for purposes of determining the presence
or absence of a quorum for the Annual Meeting. If there is no
quorum, a majority of the votes present and entitled to vote at the
meeting or the Chairman of the meeting may adjourn the meeting to
another date.
How can I find out the results of the voting at the annual
meeting?
Preliminary voting results will be announced at the Annual
Meeting. Final voting results will be published in a Current Report
on Form 8-K that we expect to file within four business days after
the Annual Meeting. If final voting results are not available to us
in time to file a Form 8-K within four business days after the
Annual Meeting, we intend to file a Form 8-K to publish preliminary
results and, within four business days after the final results are
known to us, file an amendment to the Form 8-K to publish the final
results.
PROPOSAL 1
ELECTION OF DIRECTORS
As of November 4, 2015, our Board will be comprised of six
directors and will be comprised of six directors following this
Annual Meeting. At our 2013 annual meeting of stockholders, our
stockholders approved an Amended and Restated Certificate of
Incorporation to declassify the Board and transition to annual
elections of directors. The declassification resulted in the Board
being fully declassified, and all Board members standing for annual
elections, beginning with our 2015 annual meeting of stockholders.
Directors elected at this meeting will serve a term of one year.
The Board, upon the recommendation of the Nominating and Corporate
Governance Committee, has nominated Philip A. Vachon, Richard S.
Chernicoff, Peter A. Reed, Boris Teksler, Taylor O. Harmeling and
Jess M. Ravich, and recommended that each be elected to the Board,
each to hold office until the Annual Meeting of Stockholders to be
held in 2016 and until his successor has been duly elected and
qualified or until his earlier death, resignation or removal. Mark
E. Jensen, William E. Marino, Gregory P. Landis and Dallas S.
Clement resigned effective November 4, 2015, and are not standing
for re-election at this Annual Meeting.
Pursuant to the Securities Purchase Agreement dated as of June
28, 2013 by and among us and Indaba Capital Fund, L.P. (Indaba),
Indaba had the right, for as long as certain conditions are met, to
designate one member to the Board (the Designation Right). Indaba
subsequently assigned the Designation Right to certain funds
managed by MAST Capital Management, LLC (MAST) and, as a result of
the assignment of the Designation Right, Peter A. Reed was
appointed to the Board as a director effective on May 28, 2015 to
serve until the next annual meeting of stockholders or until his
successor has been elected pursuant to the Designation Right.
The Board knows of no reason why any of the nominees would be
unable or unwilling to serve, but if any nominee should for any
reason be unable or unwilling to serve, the proxies will be voted
for the election of such other person for the office of director as
the Board may recommend in the place of such nominee. Unless
otherwise instructed, the proxy holders will vote the proxies
received by them for the nominees named below.
Business Experience of Directors
The information with respect to each director nominee and
continuing director includes the principal occupations in which he
has been engaged, and the directorships in which he has served, in
each case during the past five years. The information below is
furnished by each respective director. There are no family
relationships among any of Unwired Planets directors or its
executive officers.
Proposed Director Nominees for Election in 2015
Philip A. Vachonhas served as one of our directors since
June 2013 and as Chairman of the Board from July 2013 to October
2015. In June 2014, Mr. Vachon was appointed our Principal
Executive Officer. In 2009, Mr. Vachon co-founded IPMG AG, a
privately-held global intellectual property licensing firm, where
he currently serves as a director. From 2006 to 2008, Mr. Vachon
advised one of the worlds largest patent holders on licensing to
the telecommunications industry. Mr. Vachon served as President of
Liberate International, a software and services firm that serviced
the telecommunications industry, from 2003 to 2007. Mr. Vachon
previously served on the board of directors of Hostess Brands from
2007 to 2009. The Nominating and Corporate Governance Committee
believes that Mr. Vachons experience as an executive officer at
several technology companies and in the telecommunications
licensing industry qualifies him to serve on the Board.
Richard S. Chernicoffhas served as one of our directors
since March 2014, as our Lead Independent Director since April 2014
and as Chairman of the Board since October 2015. Since March 2015,
he has served as a director, interim general counsel and interim
general manager of the commercialization business at Marathon
Patent Group Inc., a publicly held company engaged in the business
of acquiring patents and patent rights. Prior
to joining the Board, Mr. Chernicoff was President of Tessera
Intellectual Property Corp. from July 2011 to January 2013. Mr.
Chernicoff was President of Unity Semiconductor Corp. from December
2009 to July 2011. Prior to that, Mr. Chernicoff was with SanDisk
Corporation from 2003 to 2009 where as Senior Vice President,
Business Development, Mr. Chernicoff was responsible for mergers
and acquisitions, financings and joint venutures. Previously, Mr.
Chernicoff was a mergers and acquisitions partner in the Los
Angeles office of Brobeck, Phleger & Harrison LLP from 2000 to
2003, and Mr. Chernicoff was a corporate lawyer in the Los Angeles
office of Skadden, Arps, Slate, Meagher & Flom LLP from 1995 to
2000. Prior to that, Mr. Chernicoff was a member of the staff of
the SEC in Washington DC from 1993 to 1995. Mr. Chernicoff began
his career as a certified public accountant with Ernst & Young
LLP. Mr. Chernicoff has a B.S. in Business Administration from
California State University Northridge and received a J.D. from St.
Johns University School of Law. The Nominating and Corporate
Governance Committee believes Mr. Chernicoffs qualifications to
serve as Chairman of the Board include his significant experience
with mergers and acquisitions, leadership of business organizations
and capital market transactions.
Peter A. Reedhas served as one of our directors since May
2015. Mr. Reed is a Portfolio Manager and Partner at MAST Capital
Management, LLC (Mast), a Boston-based registered investment
advisor. Mr. Reed currently serves as a director of International
Wire Group Holdings Inc. and the Chairman of the Board of Nebraska
Book Holdings, Inc. Prior to joining Mast in 2004, Mr. Reed was an
investment banking analyst at Brown, Gibbons, Lang & Company
where he worked on mergers and acquisitions, in-court and
out-of-court financial restructurings, and debt and equity private
placements for middle market companies. Mr. Reed holds his B.S. in
Finance from Miami University in 2002. The Nominating and Corporate
Governance Committee believes Mr. Reeds qualifications to sit on
the Board include his knowledge of the capital markets and
corporate governance practices as a result of his business
background.
Boris Tekslerhas served as one of our directors and as our
Chief Executive Officer, President and Principal Executive Officer
since June 2015. Prior to joining the Board, Mr. Teksler served as
the Senior Executive Vice President and President of the Technology
Business Group at Technicolor, since June 2013. Prior to that, Mr.
Teksler served as the head of Patent Licensing and Strategy at
Apple Inc., from 2009 to 2013. Mr. Teksler holds a B.S. in Computer
Science from University of California, Davis. The Nominating and
Corporate Governance Committee believes Mr. Tekslers qualifications
to sit on the Board include his significant experience with
intellectual property (acquisition, licensing and litigation) and
his industry knowledge.
Taylor O. Harmelingis a nominee for director and has been
appointed to our Board effective November 4, 2015. Mr. Harmeling is
a Portfolio Manager and founder of General Management Holdings LLC
(GMH), a Burlington, Vermont-based investment firm. GMH invests the
assets of its partners through a portfolio of highly-concentrated,
long-term, value-oriented securities. Prior to founding GMH, from
2007 to 2013, Mr. Harmeling was a Managing Director at Lone Pine
Capital where, among other industries, he focused on media &
telecommunications investments. Previously, from 2006 to 2007. Mr.
Harmeling was a Portfolio Manager at Emerging Sovereign Group. He
graduated from Harvard College with a BA in Economics in 2003. The
Nominating and Corporate Governance Committee believes Mr.
Harmelings qualifications to sit on the Board include his knowledge
of the capital markets and corporate governance practices as a
result of his business background.
Jess M. Ravichis a nominee for director and has been
appointed to our Board effective November 4, 2015. Mr. Ravich has
served as a director of ALJ Regional Holdings, Inc. (ALJJ) since
June 26, 2006 and the Chairman of its Board of Directors since
August 31, 2006. He has also served as the Executive Chairman and
Senior Executive Officer of ALJJ since February 20, 2013. Mr.
Ravich joined The TCW Group as Group Managing Director in December
2012. Prior to that, Mr. Ravich was Managing Director at Houlihan
Lokey since December 2009. Prior to that, Mr. Ravich was Chairman
and Chief Executive Officer of Libra Securities, a Los
Angeles-based investment banking firm that focused on capital
raising and financial advisory services for middle market corporate
clients and the sales and trading of debt and equity securities for
institutional investors. Prior to founding Libra Securities in
1991, Mr. Ravich was an Executive Vice President at Jefferies &
Co., Inc. and a
Senior Vice President at Drexel Burnham Lambert. Mr. Ravich has
served on the board of directors of Cherokee Inc. (Nasdaq GS: CHKE)
since May 1995. Mr. Ravich has also served as chairman of the board
of directors of Cherokee Inc. since January 2011. Mr. Ravich has
also served on the boards of directors of Spectrum Group
International, Inc. since 2009, A-Mark Precious Metals, Inc.
(Nasdaq GS: AMRK) since March 2014, as chairman at TCW BDC since
September 2014 and as a board member of TCW Alternative Funds since
March 2015. In addition to his professional responsibilities, Mr.
Ravich has also served on the Undergraduate Executive Board of the
Wharton School and the Board of Trustees of the Archer School for
Girls. Mr. Ravich has both a B.S and M.S. from the Wharton School
and a J.D. from Harvard University. The Nominating and Corporate
Governance Committee believes Mr. Ravichs qualifications to sit on
the Board include his knowledge of mergers and acquisitions,
capital markets and corporate transformation.
Directors Retiring as of November 4, 2015 and Not Standing for
Re-election at the Annual Meeting
Gregory P. Landisserved as one of our directors from July
2013 to November 4, 2015 and served as the Chair of the Nominating
and Corporate Governance Committee. Since January 1, 2013, Mr.
Landis has served as General Counsel of TerraPower LLC, a nuclear
energy research and development company. From November 2007 until
June 2011, Mr. Landis served as General Counsel at Intellectual
Ventures, an invention and patent acquisition and licensing
company. Mr. Landis was the General Counsel of Vulcan Inc. from
2005 to 2007, and from 1995 to 2005 was the General Counsel of
AT&T Wireless, where he also served as Executive Vice President
and Corporate Secretary. He is a member of the board of directors
of the Lawyers Committee for Civil Rights, a public policy and
advocacy organization, and a prior member of the boards of CTIA, a
wireless communications trade association, and the Seattle
Childrens Theater. He also previously served as Chairman of the
Board of Equal Justice Works, a non-profit organization that
enables attorneys to provide pro bono legal services to communities
in need.
Mark E. Jensenserved as one of our directors from October
2012 to November 4, 2015. From October 2001 until his retirement in
June 2012, Mr. Jensen was an executive at Deloitte & Touche
LLP, where he held a variety of positions, including U.S. Managing
Partner-Audit and Enterprise Risk Services, Technology Industry and
U.S. Managing Partner-Venture Capital Services Group. Mr. Jensen
currently serves on the boards of directors of Lattice
Semiconductor Corporation, a publicly-traded developer and
manufacturer of semiconductor devices, Control4 Corporation, a
publicly traded provider of automation systems for homes and
businesses, and ForeScout Technologies, Inc., a leading provider of
real-time network security solutions for business enterprises and
government organizations. Prior to joining Deloitte & Touche
LLP, Mr. Jensen was the Chief Financial Officer of Redleaf Group.
Mr. Jensen brings to the Board significant experience and in-depth
knowledge of public company financial reporting and accounting,
specifically with companies in the technology industry.
William Marinoserved as one of our directors from June 2013
to November 4, 2015. Mr. Marino is currently Chief Executive
Officer of Pragmatus LLC, a privately-held intellectual property
licensing firm. Since January 2011, Mr. Marino has served as Chief
Intellectual Property Officer of ObjectVideo, a provider of
intelligent video analytics software for security, public safety,
business intelligence and other applications. From October 2007 to
June 2010, Mr. Marino served as Chief Executive Officer of Saxon
Innovations, LLC, an intellectual property licensing company in the
networking, wireless and wired voice and data communications
industry. From October 2005 until June 2010, Mr. Marino also served
as partner and General Counsel for Altitude Capital Partners, a
private investment fund focused on investing in intellectual
property. Mr. Marino holds an undergraduate degree in Biochemistry
from the University of Massachusetts and a Juris Doctor from
Suffolk University, and he is registered to practice before the
U.S. Patent and Trademark Office.
Dallas Clementserved as one of our directors from June 2014
to November 4, 2015. Mr. Clement has served as a director of
BitAuto Holdings Ltd, a publicly traded provider of internet
content and marketing services for Chinas automotive industry. Mr.
Clement has served as Executive Vice President, and Chief Financial
Officer of Cox Enterprises, Inc., a privately held communications
and automotive services company, since July 2015. Prior to that,
Mr. Clement served as Executive Vice President and Chief Financial
Officer of
Cox Automotive, Inc. from February 2011 to June 2015. Mr.
Clement joined Cox Communications, Inc. in 1990 as a Policy Analyst
and was promoted to Manager of Investment Planning in January 1993,
Director of Finance in August 1994, and Treasurer in December 1996.
From April 1995 to December 1996, Mr. Clement served as Assistant
Treasurer for Cox Enterprises and Cox Communications, Inc. Prior to
joining Cox Communications, Inc., Mr. Clement held analyst
positions with Merrill Lynch and the Program on Information
Resources Policy. Mr. Clement is a member of the Board of Directors
of Simtrol, Inc. Mr. Clement holds an A.B. from Harvard College and
an M.S. from Stanford University.
Recommendation of the Board of Directors
The Board of Directors recommends that the stockholders vote FOR
the election of each of the named nominees to the Board of
Directors.
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
The Audit Committee of the Board of Directors has selected Grant
Thornton LLP as our independent registered public accounting firm,
for the fiscal year ending June 30, 2016 and has further directed
that management submit the selection of Grant Thornton LLP as our
independent registered public accounting firm for ratification by
the stockholders at the 2016 Annual Meeting. Representatives of
Grant Thornton LLP are expected to be present at the Annual
Meeting, will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate
questions.
Stockholder ratification of the selection of Grant Thornton LLP
as our independent registered public accounting firm is not
required by our bylaws or otherwise. However, the Board is
submitting the selection of Grant Thornton LLP to the stockholders
for ratification as a matter of good corporate practice. If the
stockholders fail to ratify the selection, the Audit Committee may
reconsider whether or not to retain that firm. Even if the
selection is ratified, the Audit Committee in its discretion may
direct the appointment of a different independent registered public
accounting firm at any time during the year if they determine that
such a change would be in the best interests of the Company and its
stockholders.
Replacement of KPMG LLP as Independent Auditors
In September 2013, the Audit Committee determined that it would
solicit proposals for external audit services. On September 27,
2013, KPMG LLP was notified of the Audit Committees decision to
dismiss KPMG LLP as the Companys independent auditor. The reports
of KPMG LLP on the financial statements of the Company as of and
for the fiscal years ended June 30, 2013 and 2012 did not contain
an adverse opinion or disclaimer of opinion and were not qualified
or modified as to uncertainty or audit scope, but the 2013 report
did contain an indication that the Company did not maintain
effective internal control over financial reporting as of June 30,
2013 because of the effect of a material weakness on the
achievement of the objectives of the control criteria and contains
an explanatory paragraph that stated a material weakness related to
the Companys internal control over financial reporting had been
identified. Specifically, the Company had controls over the
preparation of their cash flow statement, calculation of earnings
per share, reconciliation of financial statement footnote
disclosures and completeness of financial statement footnote
disclosures. These controls did not operate effectively due to a
lack of resources with experience in financial reporting.
There were no disagreements with KPMG LLP on any matter of
accounting principles or practices, financial statement disclosure,
or auditing scope or procedure during the fiscal years ended June
30, 2013 and 2012 and through October 1, 2013, which disagreements,
if not resolved to KPMG LLPs satisfaction, would have caused KPMG
LLP to make reference to the subject matter of the disagreement in
its report on the Companys financial statements for such years.
There were no reportable events pursuant to Item 304(a)(1)(v) of
Regulation S-K under the Exchange Act during the fiscal years ended
June 30, 2013 and 2012 and through the date of this proxy
statement.
Policy on Audit Committee Pre-Approval of Audit and Permissible
Non-Audit Services
In accordance with Audit Committee policy, all services provided
by Grant Thornton LLP in fiscal 2014 and fiscal 2015 were
pre-approved by the Audit Committee. These services may include
audit services, audit-related services, tax services and other
services. The pre-approval is for a particular defined task or
scope of work and is subject to a specific budget. In connection
with the pre-approval policy, the Audit Committee considers whether
the categories of pre-approved services are consistent with the
applicable SEC rules on auditor independence. For the fiscal years
ended June 30, 2014 and June 30, 2015, Unwired Planets Audit
Committee did not waive the pre-approval requirement of any
non-audit services to be provided to us by Grant Thornton LLP.
Audit and Audit Related Fees
Aggregate fees billed by Grant Thornton LLP for fiscal years
2015 and 2014 for professional services rendered to Unwired Planet
are presented below (in thousands):
Recommendation of the Board of Directors
The Board of Directors recommends that the stockholders vote FOR
the ratification of the appointment of Grant Thornton LLP as our
independent registered public accounting firm for the fiscal year
ending June 30, 2016.
PROPOSAL 3
AMENDMENT TO SECOND AMENDED AND RESTATED
2006 STOCK INCENTIVE PLAN
Proposal
On October 23, 2015, the Board approved an amendment to the
Companys Second Amended and Restated 2006 Stock Incentive Plan (as
amended and restated, the 2006 Plan), subject to stockholder
approval, to revise the definition of Change in Control to include
the sale, exclusive license or other disposition of the rights held
by the Company or a subsidiary of the Company in or to one or more
patents that has or have been asserted against one or more parties
in any litigation proceeding to which the Company or any of its
subsidiaries is currently a party as of December 4, 2015 (the
Subject Patents) including but not limited to by way of the sale,
transfer or other disposition of a majority of the equity ownership
interests of any subsidiary or other entity directly or indirectly
controlled by the Company and that owns or otherwise holds any of
the Subject Patents. This amendment was designed to ensure that any
holder of a grant under the 2006 Plan who is involved in the
consideration, negotiation and completion of any potential
strategic transactions is neutral as to what form such strategic
transaction may take. A copy of the 2006 Plan (as amended) is
attached as
Annex Ato this Proxy Statement and is incorporated herein by
reference.
Summary of Material Features of the 2006 Plan
The material features of the 2006 Plan are:
The shares of common stock underlying any awards under the 2006
Plan that (i) expire, are canceled or are otherwise terminated, in
whole or in part, without having been exercised or redeemed in
full, (ii) are reacquired by the Company prior to vesting or (iii)
are repurchased at cost by the Company prior to vesting are added
back to the shares of common stock available for issuance under the
2006 Plan. The following shares will not be added back to the
shares authorized for issuance under the 2006 Plan: shares tendered
in payment of an option, shares withheld by the Company to satisfy
a tax withholding obligation and shares purchased by the Company
from the proceeds from the exercise of option.
Qualified Performance-Based Compensation under Code Section
162(m)
To ensure that certain awards granted under the 2006 Plan to a
Covered Employee (as defined in the Code) qualify as
performance-based compensation under Section 162(m) of the Code,
the 2006 Plan provides that the Compensation Committee may require
that the vesting of such awards be conditioned on the satisfaction
of performance criteria that may include any or all of the
following: (1) earnings before interest, taxes, depreciation and
amortization; (2) net income (loss) (either before or after
interest, taxes, depreciation and/or amortization); (3) changes in
the market price of the stock; (4) economic value-added; (5) funds
from operations or similar measures; (6) sales or revenue; (7)
acquisitions or strategic transactions; (8) product development or
quality; (9) operating income (loss); (10) cash flow (including,
but not limited to, operating cash flow and free cash flow); (11)
return on capital, assets, equity, or investment; (12) stockholder
returns; (13) return on sales; (14) gross or net profit levels;
(15) productivity; (16) expenses; (17) margins; (18) operating
efficiency; (19) customer satisfaction; (20) working capital; (21)
earnings (loss) per share of common stock; (22) sales or market
shares; and (23) number of customers, any of which may be measured
either in absolute terms or as compared to any incremental increase
or as compared to results of a peer group. The Compensation
Committee will select the particular performance criteria within 90
days following the commencement of a performance cycle. Subject to
adjustments for stock splits and similar events, the maximum award
granted to any one individual that is intended to qualify as
performance-based compensation under Section 162(m) of the Code
will not exceed 1,500,000 shares of common stock for any
performance cycle and options or stock appreciation rights with
respect to no more than 1,500,000 shares of common stock may be
granted to any one individual during any calendar year period.
Summary of the 2006 Plan
The following description of certain features of the 2006 Plan
is intended to be a summary only. The summary is qualified in its
entirety by the full text of the 2006 Plan, as amended, that is
attached hereto as
Annex A.
Plan Administration.The 2006 Plan is administered by the
Compensation Committee. The Compensation Committee has full power
to select, from among the individuals eligible for awards, the
individuals to whom awards will be granted, to make any combination
of awards to participants, and to determine the specific terms and
conditions of each award, subject to the provisions of the 2006
Plan. The Compensation Committee may delegate to a committee of one
or more directors or to a committee of one or more officers of the
Company the authority to grant awards to individuals eligible for
awards who are not subject to the reporting and other provisions of
Section 16 of the Exchange Act and not subject to Section 162(m) of
the Code, subject to certain limitations and guidelines.
Eligibility. Persons eligible to participate in the 2006
Plan are those employees and consultants of the Company and its
subsidiaries or affiliates as selected from time to time by the
Compensation Committee in its discretion. Approximately 27
individuals are currently eligible to participate in the 2006 Plan,
which includes two officers, 16 employees who are not officers, and
nine consultants.
Plan Limits. The maximum award of stock options or stock
appreciation rights granted to any one individual employee will not
exceed 1,500,000 shares of common stock (subject to adjustment for
stock splits and similar events) for any fiscal year period. If any
award of a restricted stock bonus, performance share bonus,
restricted stock purchase right, phantom stock units, restricted
stock units or performance share units granted to an individual is
intended to qualify as performance-based compensation under Section
162(m) of the Code, then the maximum award shall not exceed
1,500,000 shares of common stock (subject to adjustment for stock
splits and similar events) to any one such individual in any
performance cycle. In addition, no more than 19,000,000 shares may
be issued in the form of incentive stock options.
Effect of Awards.For purposes of determining the number of
shares of common stock available for issuance under the 2006 Plan,
the grant of any full value award, such as a restricted stock
bonus, performance share
bonus, restricted stock purchase right, phantom stock units,
restricted stock units or performance share units, will be counted
as 1.5 shares for each share of common stock actually subject to
the award. The grant of any stock option or stock appreciation
right will be counted for this purpose as one share from each share
of common stock actually subject to the award.
Stock Options.The 2006 Plan permits the granting of (1)
options to purchase common stock intended to qualify as incentive
stock options under Section 422 of the Code, and (2) options that
do not so qualify. Options granted under the 2006 Plan will be
non-qualified options if they fail to qualify as incentive options
or exceed the annual limit on incentive stock options. Incentive
stock options may only be granted to employees of the Company and
its subsidiaries. Non-qualified options may be granted to any
persons eligible to receive incentive options and to consultants.
The option exercise price of each option will be determined by the
Compensation Committee but may not be less than 100% of the fair
market value of the common stock on the date of grant unless such
option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section
424(a) of the Code. Fair market value for this purpose will be the
closing price of the shares of common stock on the NASDAQ on the
date of grant.
The term of each option will be fixed by the Compensation
Committee and may not exceed ten years from the date of grant. The
Compensation Committee will determine at what time or times each
option may be exercised but options granted under the 2006 Plan
will generally vest in equal monthly installments over a three-year
period; provided, however, that vesting for options granted to new
hires will generally occur as to one-third of the shares underlying
the option on the one-year anniversary of the grant date and in
equal monthly installments over the subsequent two years. The
exercisability of options may be accelerated by the Compensation
Committee. In general, unless otherwise permitted by the
Compensation Committee, no option granted under the 2006 Plan is
transferable by the optionee other than by will or by the laws of
descent and distribution or qualified dometic relations order, and
options may be exercised during the optionees lifetime only by the
optionee.
Upon exercise of options, the option exercise price must be paid
in full either in cash, or by check or other instrument acceptable
to the Compensation Committee or pursuant to a same day sale
program to the extent permitted by law.
To qualify as incentive options, options must meet additional
federal tax requirements, including a $100,000 limit on the value
of shares subject to incentive options that first become
exercisable by a participant in any one calendar year.
Stock Appreciation Rights.The Compensation Committee may
award stand-alone stock appreciation rights or stapled stock
appreciation rights, subject to such conditions and restrictions as
the Compensation Committee may determine. Stock appreciation rights
entitle the recipient to shares of common stock equal to the value
of the appreciation in the stock price over the exercise price. The
exercise price may not be less than the fair market value of the
common stock on the date of grant.
Restricted Stock Bonuses and Performance Share Bonuses.The
Compensation Committee may award restricted stock bonuses and/or
performance share bonuses subject to such conditions and
restrictions as the Compensation Committee may determine.
Restricted stock bonuses and performance share bonuses are grants
of shares of common stock not requiring the payment of any monetary
consideration by a participant (except as may be required by
applicable corporate law). The vesting of restricted stock bonuses
may be based on a participants continuous service or the
achievement of performance criteria. The vesting of performance
share bonuses will always be based on the achievement of
performance criteria. Performance share bonuses and
performance-vested restricted stock bonuses generally will not
fully vest in less than one year.
Restricted Stock Purchase Rights.The Compensation Committee
may award restricted stock purchase rights. Restricted stock
purchase rights entitle a participant to purchase shares of common
stock that are subject
to restrictions determined by the Compensation Committee. The
purchase price under each restricted stock purchase right may not
be less than the fair market value of the common stock on the date
of grant. The purchase price must be paid in full either in cash,
or by check or, at the direction of the Board, according to
deferred payment or other similar arrangement to the extent
permitted by law.
Phantom Stock Units.The Compensation Committee may award
phantom stock units to participants. A phantom stock unit is the
right to receive the value of one share of common stock, redeemable
upon terms and conditions set by the Compensation Committee.
Phantom stock units that vest based on continuous service, will not
fully vest in less than three years, but the vesting of such
phantom stock units may be subject to acceleration upon the
achievement of performance criteria, as determined by the
Compensation Committee. Phantom stock units may be paid in shares
of common stock, cash or a combination thereof in the Compensation
Committees discretion at the time of vesting.
Restricted Stock Units and Performance Share Units.The
Compensation Committee may award restricted stock units and/or
performance share units, both of which entitle a participant to
receive the value of one share of common stock per unit at the time
the unit vests and may be subject to such conditions and
restrictions as the Compensation Committee may determine. These
conditions and restrictions may include the achievement of certain
performance goals and/or continued employment with the Company
through a specified vesting period.
Change of Control Provisions.The 2006 Plan provides that, in
the event of a change in control (as defined in the 2006 Plan)
other than a dissolution or liquidation of the Company, the Board
or the board of directors of any surviving entity or acquiring
entity may provide or require that the surviving or acquiring
entity (a) assume or continue all or any part of the awards
outstanding under the 2006 Plan or (b) substitute substantially
equivalent awards for those outstanding under the 2006 Plan. If the
outstanding awards will not be so continued, assumed, or
substituted, then with respect to awards held by participants whose
continuous service has not terminated, the Board in its discretion
may (1) provide for payment of a cash amount in exchange for the
cancellation of awards equal to the excess, if any, of the fair
market value per share of common stock over the exercise or
redemption price, if any multiplied by the total number of shares
of common stock subject to such award, (2) continue the awards or
(3) terminate the stock awards upon the consummation of the change
in control, but only if participants have been permitted to
exercise or redeem any portion of (including at the discretion of
the Board, any unvested portion of) any option, stock appreciation
right, phantom stock unit, restricted stock unit or performance
share unit at or prior to the change in control. In the event of a
change in control involving dissolution or liquidation of the
Company, all outstanding stock awards will terminate immediately
prior to such dissolution or liquidation.
The proposed amendment to the 2006 Plan expands the definition
of Change in Control to include the sale, exclusive license or
other disposition of the rights held by the Company or a subsidiary
of the Company in or to one or more patents that has or have been
asserted against one or more parties in any litigation proceeding
to which the Company or any of its subsidiaries is currently a
party as of December 4, 2015 (the Subject Patents) including but
not limited to by way of the sale, transfer or other disposition of
a majority of the equity ownership interests of any subsidiary or
other entity directly or indirectly controlled by the Company and
that owns or otherwise holds any of the Subject Patents.
Adjustments for Stock Dividends, Stock Splits, Etc.The 2006
Plan requires the Compensation Committee to make appropriate
adjustments to the number of shares of common stock that are
subject to the 2006 Plan, to certain limits in the 2006 Plan, and
to any outstanding awards to reflect stock dividends, stock splits,
extraordinary dividends and similar events.
Tax Withholding.Participants in the 2006 Plan are
responsible for the payment of any federal, state or local taxes
that the Company is required by law to withhold upon the exercise
of options or stock appreciation rights or vesting or settlement of
other awards. Participants may elect to have the minimum tax
withholding obligations satisfied by authorizing the Company to
withhold shares of common stock to be issued pursuant to the
exercise or vesting of an award or by delivering other shares to
the Company.
Amendments and Termination.The Board may amend, suspend or
terminate the 2006 Plan in any respect and at any time, subject to
stockholder approval, if such approval is required by applicable
law or stock exchange rules. Amendments shall also be subject to
approval by our stockholders if and to the extent determined by the
Compensation Committee to be required by the Code to preserve the
qualified status of incentive options or to ensure that
compensation earned under the 2006 Plan qualifies as
performance-based compensation under Section 162(m) of the Code.
Any amendment or termination of the 2006 Plan will not materially
impair the rights of any participant with respect to any awards
already granted to such participant without such participants
consent. The Board may not reprice outstanding options or stock
appreciation rights, by amendment or by cancellation and regrant
(of a new award or cash), without stockholder approval.
Effective Date of the 2006 Plan.The Board originally adopted
the 2006 Plan in 2006 and approved the second amendment and
restatement of the 2006 Plan on September 13, 2013. The proposed
amendment was approved by the Board on October 23, 2015. The
proposed amendment of the 2006 Plan becomes effective on the date
it is approved by stockholders. No awards may be granted under the
2006 Plan after the date that is ten years from the date of most
recent stockholder approval. If the proposed amendment of the 2006
Plan is not approved by stockholders, the 2006 Plan will continue
in effect until it expires, and awards may be granted thereunder,
in accordance with its terms.
New Plan Benefits
Because the grant of awards under the 2006 Plan is within the
discretion of the Compensation Committee, we cannot determine the
dollar value or number of shares of common stock that will in the
future be received by or allocated to any participant in the 2006
Plan. Accordingly, in lieu of providing information regarding
benefits that will be received under the 2006 Plan, the following
table provides information concerning the benefits that were
received by the following persons and groups for the fiscal year
ended June 30, 2015: each named executive officer; all current
executive officers, as a group; all current directors who are not
executive officers, as a group; and all employees who are not
executive officers, as a group.
Tax Aspects Under the Code
The following is a summary of the principal federal income tax
consequences of certain transactions under the 2006 Plan. It does
not describe all federal tax consequences under the 2006 Plan, nor
does it describe state or local tax consequences.
Incentive Options.No taxable income is generally realized by
the optionee upon the grant or exercise of an incentive option. If
shares of common stock issued to an optionee pursuant to the
exercise of an incentive option are sold or transferred after two
years from the date of grant and after one year from the date of
exercise, then (i) upon sale of such shares, any amount realized in
excess of the option price (the amount paid for the shares) will be
taxed to the optionee as a long-term capital gain, and any loss
sustained will be a long-term capital loss, and (ii) the Company
will not be entitled to any deduction for federal income tax
purposes. The exercise of an incentive option will give rise to an
item of tax preference that may result in alternative minimum tax
liability for the optionee.
If shares of common stock acquired upon the exercise of an
incentive option are disposed of prior to the expiration of the
two-year and one-year holding periods described above (a
disqualifying disposition), generally (i) the optionee will realize
ordinary income in the year of disposition in an amount equal to
the excess (if any) of the fair market value of the shares of
common stock at exercise (or, if less, the amount realized on a
sale of such shares of common stock) over the option price thereof
and (ii) the Company will be entitled to deduct such amount.
Special rules will apply where all or a portion of the exercise
price of the incentive option is paid by tendering shares of common
stock.
If an incentive option is exercised at a time when it no longer
qualifies for the tax treatment described above, the option is
treated as a non-qualified option. Generally, an incentive option
will not be eligible for the tax treatment described above if it is
exercised more than three months following termination of
employment (or one year in the case of termination of employment by
reason of disability). In the case of termination of employment by
reason of death, the three-month rule does not apply.
Non-Qualified Options.No income is realized by the optionee
at the time the option is granted. Generally (i) at exercise,
ordinary income is realized by the optionee in an amount equal to
the difference between the option price and the fair market value
of the shares of common stock on the date of exercise, and the
Company receives a tax deduction for the same amount and (ii) at
disposition, appreciation or depreciation after the date of
exercise is treated as either short-term or long-term capital gain
or loss depending on how long the shares of common stock have been
held. Special rules will apply where all or a portion of the
exercise price of the non-qualified option is paid by tendering
shares of common stock. Upon exercise, the optionee will also be
subject to Social Security taxes on the excess of the fair market
value over the exercise price of the option.
Other Awards.The Company generally will be entitled to a tax
deduction in connection with an award under the 2006 Plan in an
amount equal to the ordinary income realized by the participant at
the time the participant recognizes such income. Participants
typically are subject to income tax and recognize such tax at the
time that an award is exercised, vests or becomes non-forfeitable,
unless the award provides for a further deferral.
Parachute Payments.The vesting of any portion of an option
or other award that is accelerated due to the occurrence of a
change in control may cause a portion of the payments with respect
to such accelerated awards to be treated as parachute payments, as
defined in the Code. Any such parachute payments may be
non-deductible to the Company, in whole or in part, and may subject
the recipient to a non-deductible 20% federal excise tax on all or
a portion of such payment (in addition to other taxes ordinarily
payable).
Limitation on Deductions.Under Section 162(m) of the Code,
the Companys deduction for certain awards under the 2006 Plan may
be limited to the extent that the Principal Executive Officer or
other executive officer whose compensation is required to be
reported in the summary compensation table (other than the
Principal
Financial Officer) receives compensation in excess of $1 million
a year (other than performance-based compensation that otherwise
meets the requirements of Section 162(m) of the Code). The 2006
Plan is structured to allow certain awards to qualify as
performance-based compensation.
Recommendation of the Board of Directors
The Board of Directors recommends that the stockholders vote FOR
the adoption of the amendment of the Amended and Restated 2006
Stock Incentive Plan.
PROPOSALS 4 AND 5
BACKGROUND
The Board is recommending that the stockholders approve
amendments to the Companys certificate of incorporation to (i)
effect a reverse stock split of the Companys outstanding shares of
common stock at a ratio up to one-for-twenty (1:20) (the Reverse
Stock Split) and (ii) make the corresponding reduction (based on
the Reverse Stock Split ratio selected by our Board of Directors)
in the number of authorized shares of common stock from
1,000,000,000 to no fewer than 250,000,000 (on a post-split basis)
or such other number of authorized shares, depending on the exact
split ratio chosen by the Board or a committee of the Board (the
Authorized Share Reduction, if and when the Reverse Stock Split is
effected). If these proposals are approved, the Board or a
committee of the Board will have the authority to decide whether to
implement the Reverse Stock Split, and if it decides to do so, the
authority to set a specific ratio within the authorized range of up
to 1:20. If the Board decides to implement the Reverse Stock Split,
it will become effective upon the filing of the amendment to the
Companys Certificate of Incorporation with the Secretary of State
of the State of Delaware (the Effective Date). If the Reverse Stock
Split is implemented, the number of issued and outstanding shares
of common stock would be reduced in accordance with the Reverse
Stock Split ratio noted above, and the total number of authorized
shares of common stock after the Reverse Stock Split would be
reduced to no fewer than 250,000,000 (on a post-split basis) or
such other number of authorized shares, depending on the exact
split ratio chosen by the Board or a committee of the Board, as
outlined in Proposal 5. The form of amendment to the Companys
Certificate of Incorporation to effect the Reverse Stock Split and
Authorized Share Reduction is attached as
Annex Bto this Proxy Statement and incorporated herein by
reference.
Purpose and Background of the Reverse Stock Split and Authorized
Share Reduction
The Boards primary objectives in proposing the Reverse Stock
Split and Authorized Share Reduction are to raise the per share
trading price of our common stock and to decrease the number of
shares of our authorized but unissued common stock. The Board
believes that the Reverse Stock Split and Authorized Share
Reduction would, among other things, (i) enable the Company to
maintain the listing of its common stock on The NASDAQ Global
Select Market immediately after the Reverse Stock Split occurs, and
for the foreseeable future, (ii) facilitate higher levels of
institutional stock ownership, where investment policies generally
prohibit investments in lower-priced securities and (iii) better
enable the Company to raise funds to finance its planned
operations.
The Companys common stock is listed on The NASDAQ Global Select
Market. On March 4, 2015, the Company received a letter from The
NASDAQ Stock Market LLC (NASDAQ) advising that for the previous 30
consecutive business days, the bid price of the Companys common
stock had closed below the minimum $1.00 per share requirement for
continued inclusion on The NASDAQ Global Select Market pursuant to
NASDAQ Marketplace Rule 4450(a)(5). This notification had no
immediate effect on the listing of the common stock. NASDAQ stated
in its letter that in accordance with NASDAQ Marketplace Rule
4450(e)(2), the Company was provided 180 calendar days, or until
August 31, 2015, to regain compliance with the minimum bid price
requirement. The NASDAQ letter also stated that if, at any time
before August 31, 2015, the bid price of the common stock closed at
$1.00 per share or more for a minimum of 10 consecutive business
days, the NASDAQ staff would provide the Company with written
notification that it has achieved compliance with the minimum bid
price requirement.
The Company has no