As filed with the Securities and Exchange Commission
on July 24, 2024
Registration No. 333-
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HELIUS
MEDICAL TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
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| Delaware |
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36-4787690 |
(State or other
jurisdiction of
incorporation or organization) |
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(I.R.S.
Employer
Identification No.) |
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642 Newtown
Yardley Road, Suite 100
Newtown, Pennsylvania |
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18940 |
| (Address
of principal executive offices) |
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(Zip
code) |
Helius Medical Technologies, Inc. 2022
Equity Incentive Plan
Helius Medical Technologies, Inc. 2021
Inducement Plan
(Full title of the plan)
Dane
C. Andreeff
President and Chief Executive Officer
Helius Medical Technologies, Inc.
642 Newtown Yardley Road, Suite 100
Newtown, Pennsylvania 18940
(215) 944-6100
(Name, address, and telephone number, including area code, of agent for service)
Copy to:
Phillip D. Torrence, Esq.
Emily J. Johns, Esq.
Honigman LLP
650 Trade Center Way, Suite 200
Kalamazoo, Michigan 49002-0402
(269) 337-7700
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions
of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging
growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer |
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Accelerated filer |
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| Non-accelerated
filer |
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x |
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Smaller reporting company |
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x |
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Emerging growth company |
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¨ |
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ¨
EXPLANATORY NOTE
Inducement Plan
On July 2, 2024, Helius Medical Technologies, Inc. (the “Company,” the “Registrant,”
“we,” “us,” or “our”) approved an amendment to the Helius Medical
Technologies, Inc. 2021 Inducement Plan (the “2021 Inducement Plan”), pursuant to which the Company increased
the shares of its common stock, par value $0.001 per share (the “Common Stock”) reserved to be used exclusively
for grants of equity-based awards to individuals who were not previously employees or directors of the Company, as an inducement material
to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq Listing
Rules to 150,000 shares. The 2021 Inducement Plan provides for the grant of equity-based awards in the form of nonstatutory stock
options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, cash awards, and
other stock awards. The amendment to the 2021 Inducement Plan was adopted by our board of directors without stockholder approval pursuant
to Rule 5635(c)(4) of the Nasdaq Listing Rules.
2022 Equity Incentive Plan
This Registration Statement on Form S-8 is also being filed by
the Company, for the purpose of registering an additional 1,826,909 shares of Common Stock issuable pursuant to the Helius Medical Technologies, Inc.
2022 Equity Incentive Plan (the “2022 Equity Incentive Plan”) ”), as amended by the First Amendment to
the 2022 Equity Incentive Plan (the “Amendment”). The Amendment was approved by the Company’s stockholders
at the Registrant’s Annual Meeting of Stockholders on June 27, 2024.
Pursuant
to General Instruction E to Form S-8, this Registration Statement is being filed for the purpose of increasing the number of securities
of the same class as other securities for which Registration Statements of the Company on Form S-8 relating to the 2021 Inducement
Plan and the 2022 Equity Incentive Plan, respectively, are effective, and the Company’s Registration Statements on Form S-8
previously filed with the Securities and Exchange Commission (the “Commission”) on July 7, 2021 (File
No. 333-257749), May 31, 2022 (File No. 333-265324) and January 19, 2023 (File No. 333-269305) registering
shares of Common Stock issuable under the 2021 Inducement Plan and the 2022 Equity Incentive Plan, respectively, are incorporated by
reference and made part of this Registration Statement, except as amended hereby.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information specified in Part I of Form S-8 is omitted
from this Registration Statement in accordance with the provisions of Rule 428 under the Securities Act of 1933, as amended (the
“Securities Act”) and the introductory note to Part I of Form S-8. The documents containing
the information specified in Part I of Form S-8 will be delivered to the participants in the plan covered by
this Registration Statement as specified by Rule 428(b)(1) under the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
| Item
3. | Incorporation
of Documents by Reference. |
The following documents filed with the Commission by the Registrant
are hereby incorporated by reference in this Registration Statement:
| (c) | the
Registrant’s Current Reports on Form 8-K filed with the Commission on February 9, 2024, March 4, 2024, March 15, 2024, April 5, 2024, May 6, 2024, May 9, 2024, May 31, 2024, June 3, 2024, and June 28, 2024; |
| (d) | the
description of the Registrant’s Common Stock contained in the Registrant’s Form 8-A
(File No. 001-38445) filed with the Commission on April 4, 2018, as amended
by the description of the Common Stock contained in Exhibit 4.7 to the Registrant’s
Annual Report on Form 10-K for the year ended December 31, 2020, and as further
amended by any subsequent amendment or report filed for the purpose of updating such description. |
In addition, all documents the Registrant subsequently files pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
after the filing of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities covered hereby then remaining unsold are incorporated by reference
in this Registration Statement and are a part hereof from the date of filing of such documents. Notwithstanding anything herein, the
Registrant is not incorporating by reference any information furnished under Item 2.02 or Item 7.01 of any Current Report on Form 8-K,
unless, and to the extent, specified in any such Current Report on Form 8-K.
Any statement herein or contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein, or in any subsequently filed document, which also is or is deemed to be incorporated by reference
herein, modifies or supersedes such prior statement. Any such statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute part of this Registration Statement.
| Item
4. | Description
of Securities. |
Not applicable.
| Item
5. | Interests of Named Experts and Counsel. |
Not applicable.
| Item
6. | Indemnification
of Directors and Officers. |
We are incorporated under the laws of the State of Delaware. Section 102
of the Delaware General Corporation Law permits a corporation to eliminate the personal liability of directors of a corporation to the
corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director or officer, except where the director
or officer breached his or her duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated
a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper
personal benefit.
Section 145 of the Delaware General Corporation Law provides
that a corporation has the power to indemnify a director, officer, employee or agent of the corporation and certain other persons serving
at the request of the corporation in related capacities against expenses (including attorneys’ fees), judgments, fines and amounts
paid in settlements actually and reasonably incurred by the person in connection with an action, suit or proceeding to which he or she
is or is threatened to be made a party by reason of such position, if such person acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable
cause to believe his or her conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation,
no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable
to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines upon application that,
despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled
to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
As permitted by the Delaware General Corporation Law, our amended
and restated bylaws provide that: (1) we are required to indemnify our directors and executive officers to the fullest extent permitted
by the Delaware General Corporation Law; (2) we may, in our discretion, indemnify our other officers, employees and agents as set
forth in the Delaware General Corporation Law; (3) we are required, upon satisfaction of certain conditions, to advance all expenses
incurred by our directors and executive officers in connection with certain legal proceedings; (4) the rights conferred in the bylaws
are not exclusive; (5) we are authorized to enter into indemnification agreements with our directors, officers, employees and agents;
and (6) we may secure insurance on behalf of any director, officer, employee or other agent for any liability arising out of his
or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under the provisions of
Delaware law.
Indemnification Agreements
We have entered into indemnification agreements with our directors
and officers. These agreements provide broader indemnity rights than those provided under the Delaware General Corporation Law and the
Registrant’s certificate of incorporation, as amended. The indemnification agreements are not intended to deny or otherwise limit
third-party or derivative suits against us or our directors or officers, but to the extent a director or officer were entitled to indemnity
or contribution under the indemnification agreement, the financial burden of a third-party suit would be borne by us, and we would not
benefit from derivative recoveries against the director or officer. Such recoveries would accrue to our benefit but would be offset by
our obligations to the director or officer under the indemnification agreement.
Insurance Policy
We maintain a directors’ and officers’ liability insurance
policy. The policy insures directors and officers against unindemnified losses arising from certain wrongful acts in their capacities
as directors and officers and reimburses us for those losses for which we have lawfully indemnified the directors and officers. The policy
contains various exclusions.
The foregoing summaries are not intended to be exhaustive and are
qualified in their entirety by reference to the complete text of the statute, the Registrant’s certificate of incorporation, as
amended and the agreements referred to above and are qualified in their entirety by reference thereto.
| Item
7. | Exemption
from Registration Claimed. |
Not applicable.
EXHIBIT INDEX
The following exhibits are filed as part of this
registration statement.
INDEX
TO EXHIBITS
| 4.5 |
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Corrected
Certificate of Amendment to Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Form 8-K filed
August 16, 2023) |
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| 4.6 |
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Second
Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Form 8-K filed March 15, 2024) |
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| 4.7 |
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Helius
Medical Technologies, Inc. 2021 Inducement Plan (incorporated by reference to Exhibit 4.5 to the Form S-8 filed July 7,
2021 |
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| 4.8* |
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Amendment
to the Helius Medical Technologies, Inc. 2021 Inducement Plan |
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| 4.9 |
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Form of
Stock Option Grant Notice, Option Agreement and Notice of Exercise under the Helius Medical Technologies, Inc. 2021 Inducement
Plan (incorporated by reference to Exhibit 4.6 to the Form S-8 filed July 7, 2021) |
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| 4.10 |
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Helius
Medical Technologies, Inc. 2022 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Form 8-K filed
February 18, 2022) |
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| 4.11 |
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Helius
Medical Technologies, Inc. 2022 Equity Incentive Plan Form of Stock Option Agreement (incorporated by reference to Exhibit 10.3
to the Form 8-K filed February 18, 2022) |
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| 4.12 |
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Amendment
to the Helius Medical Technologies, Inc. 2022 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Form 8-K
filed June 28, 2024) |
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| 5.1* |
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Opinion
of Honigman LLP |
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| 23.1* |
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Consent
of Baker Tilly US, LLP |
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| 23.2* |
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Consent
of Honigman LLP (included in its opinion filed as Exhibit 5.1 to this Registration Statement) |
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| 24.1* |
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Power
of Attorney (included after the signature of the Registrant contained on Signature Page of this Registration Statement) |
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| 107* |
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Filing
Fee Table |
*-Filed herewith.
| (a) | The Registrant hereby undertakes: |
| (1) | To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement: |
| (i) | To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933; |
| (ii) | To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change in the information
set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent
no more than 20 percent change in the maximum aggregate offering price set forth in
the “Calculation of Filing Fee Tables” or “Calculation of Registration
Fee” table, as applicable, in the effective Registration Statement; |
| (iii) | To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any material change
to such information in the Registration Statement; |
provided,
however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement; and
| (2) | That,
for the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof. |
| (3) | To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the offering. |
| (b) | The Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the Registrant’s annual
report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit plan’s annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated
by reference in the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof. |
| (c) | Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted
to directors, officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of such issue. |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned, hereunto duly authorized, in the City of Newtown, State of
Pennsylvania, on July 24, 2024.
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Helius Medical Technologies, Inc. |
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By: |
/s/
Dane C. Andreeff |
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Name: |
Dane C. Andreeff |
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Title: |
President and Chief Executive Officer |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each
person whose signature appears below hereby constitutes and appoints Dane C. Andreeff and Jeffrey S. Mathiesen as his or her true and
lawful attorneys-in-fact and agents with full power of substitution, severally, for him in any and all capacities, to sign the Registration
Statement on Form S-8 of Helius Medical Technologies, Inc., and any or all amendments (including post-effective amendments
thereto), and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite
and necessary to be done in connection therewith, as fully for all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or his or their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.
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| Signature |
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Title |
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Date |
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| /s/ Dane C.
Andreeff |
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President, Chief Executive Officer |
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July 24, 2024 |
| Dane C. Andreeff |
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(Principal Executive Officer) and Director |
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| /s/ Jeffrey
S. Mathiesen |
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Chief Financial Officer |
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July 24, 2024 |
| Jeffrey S. Mathiesen |
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(Principal Financial
Officer and Principal Accounting Officer),
Treasurer, Secretary and Director |
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| /s/ Paul Buckman |
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Director |
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July 24, 2024 |
| Paul Buckman |
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| /s/ Blane Walter |
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Director |
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July 24, 2024 |
| Blane Walter |
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| /s/ Sherrie
Perkins |
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Director |
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July 24, 2024 |
| Sherrie Perkins |
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| /s/ Edward M.
Straw |
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Director |
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July 24, 2024 |
| Edward M. Straw |
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Exhibit 4.8
Helius
Medical Technologies, Inc.
2021
Inducement Plan
Adopted by the Board of Directors: July 1, 2021
Amended
by the Board of Directors: July 2, 2024
1. General.
(a) Eligible
Award Recipients. The only persons eligible to receive grants of Awards under this Plan
are individuals who satisfy the standards for inducement grants under Nasdaq Marketplace Rule 5635(c)(4) or 5635(c)(3), if applicable,
and the related guidance under Nasdaq IM 5635-1 (together with any analogous rules or guidance effective after the date hereof, the
“Inducement Award Rules”). A person who previously served as an Employee or Director will not be eligible to
receive Awards under this Plan, other than following a bona fide period of non-employment. Persons eligible to receive grants of
Awards under this Plan are referred to in this Plan as “Eligible Employees.” These Awards must be approved by
either a majority of the Company’s “Independent Directors” (as such term is defined in Nasdaq Marketplace
Rule 5605(a)(2)) or the Company’s compensation committee, provided such committee comprises solely of two (2) or more
Independent Directors to whom authority has been delegated by the Board in accordance with Section 2(c) (the “Committee”)
in order to comply with the exemption from the stockholder approval requirement for “inducement grants” provided under the
Inducement Award Rules.
(b) Available
Awards. This Plan provides for the grant of the following Awards: (i) Options, (ii) Stock
Appreciation Rights, (iii) Restricted Stock Awards, (iv) Restricted Stock Unit Awards, (v) Performance Stock Awards, (vi) Performance
Cash Awards and (vii) Other Stock Awards. All Options shall be Nonstatutory Stock Options.
(c) Purpose.
This Plan, through the grant of Awards, is intended to provide (i) an inducement material for certain individuals to enter into employment
with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq Marketplace Rules, (ii) incentives for such persons
to exert maximum efforts for the success of the Company and any Affiliate and (iii) a means by which Eligible Employees may be given
an opportunity to benefit from increases in value of the Common Stock.
2. Administration.
(a) Administration
by Board. The Board will administer this Plan; provided, however, that Awards may only
be granted by either (i) a majority of the Company’s Independent Directors or (ii) the Committee. Subject to those constraints
and the other constraints of the Inducement Award Rules, the Board may delegate some of its powers of administration of this Plan to a
Committee or Committees, as provided in Section 2(c).
(b) Powers
of Board. The Board will have the power, subject to, and within the limitations of, the
express provisions of this Plan and the Inducement Award Rules:
(i) To
determine: (A) who will be granted Awards; (B) when and how each Award will be granted; (C) what type of Award will be
granted; (D) the provisions of each Award (which need not be identical), including when a person will be permitted to exercise or
otherwise receive cash or Common Stock under the Award; (E) the number of shares of Common Stock subject to, or the cash value of,
an Award; and (F) the Fair Market Value applicable to an Award; provided, however, that Awards may only be granted by either (i) a
majority of the Company’s Independent Directors or (ii) the Committee.
(ii) To
construe and interpret this Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for administration
of this Plan and Awards. The Board, in the exercise of these powers, may correct any defect, omission or inconsistency in this Plan
or in any Award Agreement, in a manner and to the extent it will deem necessary or expedient to make this Plan or Award fully effective.
(iii) To
settle all controversies regarding this Plan and Awards granted under it.
(iv) To
accelerate, in whole or in part, the time at which an Award may be exercised or vest (or the time at which cash or shares of Common Stock
may be issued in settlement thereof).
(v) To
suspend or terminate this Plan at any time. Except as otherwise provided in this Plan or an Award Agreement, suspension or termination
of this Plan will not materially impair a Participant’s rights under the Participant’s then-outstanding Award without the
Participant’s written consent, except as provided in subsection (viii) below.
(vi) To
amend this Plan in any respect the Board deems necessary or advisable, including, without limitation, by adopting amendments relating
to certain nonqualified deferred compensation under Section 409A of the Code and/or to ensure this Plan or Awards granted under this
Plan are exempt from, or compliant with, the requirements for nonqualified deferred compensation under Section 409A of the Code,
subject to the limitations, if any, of applicable law. Except as provided in Section 9(a) relating to Capitalization
Adjustments, if required by applicable law or listing requirements, the Company shall seek stockholder approval for any amendment of this
Plan. Except as otherwise provided in this Plan or an Award Agreement, no amendment of this Plan will materially impair a Participant’s
rights under an outstanding Award without the Participant’s written consent.
(vii) To
submit any amendment to this Plan for stockholder approval, including, but not limited to, amendments to this Plan intended to satisfy
the requirements of Rule 16b-3 or to comply with other applicable laws or listing requirements.
(viii) To
approve forms of Award Agreements for use under this Plan and to amend the terms of any one or more Awards, including, but not limited
to, amendments to provide terms more favorable to the Participant than previously provided in the Award Agreement, subject to any specified
limits in this Plan that are not subject to Board discretion; provided, however, that a Participant’s rights under any Award will
not be impaired by any such amendment unless (A) the Company requests the consent of the affected Participant, and (B) such
Participant consents in writing. Notwithstanding the foregoing, (1) a Participant’s rights will not be deemed to have been
impaired by any such amendment if the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially
impair the Participant’s rights, and (2) subject to the limitations of applicable law, if any, the Board may amend the terms
of any one or more Awards without the affected Participant’s consent (A) to clarify the manner of exemption from, or to bring
the Award into compliance with, Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance
issued thereunder (including, without limitation, such guidance as may be issued after the Effective Date); or (B) to comply with
other applicable laws or listing requirements.
(ix) Generally,
to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company
and that are not in conflict with the provisions of this Plan or Awards.
(x) To
adopt such procedures and sub-plans as are necessary or appropriate to permit participation in this Plan by Eligible Employees who are
foreign nationals or employed outside the United States (provided that Board approval will not be necessary for immaterial modifications
to this Plan or any Award Agreement that are required for compliance with the laws of the relevant foreign jurisdiction).
(c) Delegation
to Committee.
(i) General.
Subject to the terms of Section 4(b), the Board may delegate some or all of the administration of this Plan to a Committee
or Committees. If administration of this Plan is delegated to a Committee, the Committee will have, in connection with the administration
of this Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate
to a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan
to the Board will thereafter be construed as being to the Committee or subcommittee, as applicable). Any delegation of administrative
powers will be reflected in resolutions, not inconsistent with the provisions of this Plan, adopted from time to time by the Board or
Committee (as applicable). The Committee may, at any time, abolish the subcommittee and/or revest in the Committee any powers delegated
to the subcommittee. The Board may retain the authority to concurrently administer this Plan with the Committee and may, at any time,
revest in the Board some or all of the powers previously delegated.
(ii) Rule 16b-3
Compliance. The Committee may consist solely of two or more Non-Employee Directors in accordance
with Rule 16b-3.
(d) Effect
of Board’s Decision. All determinations, interpretations and constructions made by the
Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.
(e) Repricing;
Cancellation and Re-Grant of Awards. Neither the Board nor any Committee will have the
authority to reduce the exercise, purchase or strike price of any outstanding Option or SAR, unless the stockholders of the Company have
approved such an action within twelve (12) months prior to such an event.
3. Shares
Subject to this Plan.
(a) Share
Reserve. Subject to Section 9(a) relating to Capitalization Adjustments,
the aggregate number of shares of Common Stock that may be issued pursuant to Awards will not exceed 150,000 shares (the “Share
Reserve”). No Participant in the Plan may be granted an Award during the term of the Plan in excess of the Share Reserve.
For clarity, the Share Reserve is a limitation in the number of shares of Common Stock that may be issued pursuant to the Plan and does
not limit the granting of Awards except as provided in Section 7(a). Shares may be issued in connection with a merger or acquisition
as permitted by Nasdaq Marketplace Rule 5635(c) or, if applicable NYSE Listed Company Manual Section 303A.08, AMEX Company
Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares available for issuance under this
Plan.
(b) Reversion
of Shares to the Share Reserve. If an Award or any portion thereof (i) expires or otherwise
terminates without all of the shares covered by such Award having been issued or (ii) is settled in cash (i.e., the Participant
receives cash rather than stock), such expiration, termination or settlement will not reduce (or otherwise offset) the number of shares
of Common Stock that may be available for issuance under this Plan. If any shares of Common Stock issued pursuant to an Award are
forfeited back to or repurchased or reacquired by the Company for any reason, including because of the failure to meet a contingency or
condition required to vest such shares in the Participant, then the shares that are forfeited or repurchased or reacquired will revert
to and again become available for issuance under this Plan. Any shares reacquired by the Company in satisfaction of tax withholding
obligations on an Award or as consideration for the exercise or purchase price of an Award will again become available for issuance under
this Plan.
(c) Source
of Shares. The stock issuable under this Plan will be shares of authorized but unissued
or reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise.
4. Eligibility.
(a) Eligibility
for Specific Awards. Awards may only be granted to persons who are Eligible Employees described
in Section 1(a) of this Plan, where the Award is an inducement material to the individual’s entering into employment
with the Company or an Affiliate within the meaning of Rule 5635(c)(4) of the Nasdaq Marketplace Rules or is otherwise
permitted pursuant to Rule 5635(c) of the Nasdaq Marketplace Rules, provided, however, that Awards may not be granted
to Eligible Employees who are providing Continuous Service only to any “parent” of the Company, as such term is defined in
Rule 405 of the Securities Act, unless (i) the stock underlying such Awards is treated as “service recipient stock”
under Section 409A of the Code (for example, because the Awards are granted pursuant to a corporate transaction such as a spin off
transaction), (ii) the Company, in consultation with its legal counsel, has determined that such Awards are otherwise exempt from
Section 409A of the Code, or (iii) the Company, in consultation with its legal counsel, has determined that such Awards comply
with the distribution requirements of Section 409A of the Code.
(b) Approval
Requirements. All Awards granted must be approved either by a majority of the Company’s
Independent Directors or the Committee.
5. Provisions
relating to Options and Stock Appreciation Rights. Each Option or SAR will be in such
form and will contain such terms and conditions as the Board deems appropriate. All Options will be Nonstatutory Stock Options at the
time of grant. The provisions of separate Options or SARs need not be identical; provided, however, that each Award Agreement will
conform to (through incorporation of provisions hereof by reference in the applicable Award Agreement or otherwise) the substance of each
of the following provisions:
(a) Term.
No Option or SAR will be exercisable after the expiration of 10 years from the date of its grant or such shorter period specified in the
Award Agreement.
(b) Exercise
Price. The exercise or strike price of each Option or SAR will be not less than 100% of
the Fair Market Value of the Common Stock subject to the Option or SAR on the date the Award is granted. Notwithstanding the foregoing,
an Option or SAR may be granted with an exercise or strike price lower than 100% of the Fair Market Value of the Common Stock subject
to the Award if such Award is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant
to a Corporate Transaction and in a manner consistent with the provisions of Section 409A of the Code. Each SAR will be denominated
in shares of Common Stock equivalents.
(c) Purchase
Price for Options. The purchase price of Common Stock acquired pursuant to the exercise
of an Option may be paid, to the extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination
of the methods of payment set forth below. The Board will have the authority to grant Options that do not permit all of the following
methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company
to use a particular method of payment. The permitted methods of payment are as follows:
(i) by
cash, check, bank draft or money order payable to the Company;
(ii) pursuant
to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the stock subject
to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds;
(iii) by
delivery to the Company (either by actual delivery or attestation) of shares of Common Stock;
(iv) by
a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon
exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided,
however, that the Company will accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate
exercise price not satisfied by such reduction in the number of whole shares to be issued. Shares of Common Stock will no longer
be subject to an Option and will not be exercisable thereafter to the extent that (A) shares issuable upon exercise are used to pay
the exercise price pursuant to the “net exercise,” (B) shares are delivered to the Participant as a result of such exercise,
and (C) shares are withheld to satisfy tax withholding obligations; or
(v) in
any other form of legal consideration that may be acceptable to the Board and specified in the applicable Award Agreement.
(d) Exercise
and Payment of a SAR. To exercise any outstanding SAR, the Participant must provide written
notice of exercise to the Company in compliance with the provisions of the Stock Appreciation Right Agreement evidencing such SAR.
The appreciation distribution payable on the exercise of a SAR will be not greater than an amount equal to the excess of (A) the
aggregate Fair Market Value (on the date of the exercise of the SAR) of a number of shares of Common Stock equal to the number of Common
Stock equivalents in which the Participant is vested under such SAR, and with respect to which the Participant is exercising the SAR on
such date, over (B) the aggregate strike price of the number of Common Stock equivalents with respect to which the Participant is
exercising the SAR on such date. The appreciation distribution may be paid in Common Stock, in cash, in any combination of the two
or in any other form of consideration, as determined by the Board and contained in the Award Agreement evidencing such SAR.
(e) Transferability
of Options and SARs. The Board may, in its sole discretion, impose such limitations on
the transferability of Options and SARs as the Board will determine. In the absence of such a determination by the Board to the
contrary, the following restrictions on the transferability of Options and SARs will apply:
(i) Restrictions
on Transfer. An Option or SAR will not be transferable except by will or by the laws of
descent and distribution (or pursuant to subsections (ii) and (iii) below), and will be exercisable during the lifetime of the
Participant only by the Participant. The Board may permit transfer of the Option or SAR in a manner that is not prohibited by applicable
tax and securities laws. Except as explicitly provided in this Plan, neither an Option nor a SAR may be transferred for consideration.
(ii) Domestic
Relations Orders. Subject to the approval of the Board or a duly authorized Officer, an
Option or SAR may be transferred pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce
or separation instrument.
(iii) Beneficiary
Designation. Subject to the approval of the Board or a duly authorized Officer, a Participant
may, by delivering written notice to the Company, in a form approved by the Company (or the designated broker), designate a third party
who, on the death of the Participant, will thereafter be entitled to exercise the Option or SAR and receive the Common Stock or other
consideration resulting from such exercise. In the absence of such a designation, upon the death of the Participant the executor
or administrator of the Participant’s estate will be entitled to exercise the Option or SAR and receive the Common Stock or other
consideration resulting from such exercise. However, the Company may prohibit designation of a beneficiary at any time, including due
to any conclusion by the Company that such designation would be inconsistent with the provisions of applicable laws.
(f) Vesting
Generally. The total number of shares of Common Stock subject to an Option or SAR may vest
and become exercisable in periodic installments that may or may not be equal. The Option or SAR may be subject to such other terms
and conditions on the time or times when it may or may not be exercised (which may be based on the satisfaction of Performance Goals or
other criteria) as the Board may deem appropriate. The vesting provisions of individual Options or SARs may vary. The provisions
of this Section 5(f) are subject to any Option or SAR provisions governing the minimum number of shares of Common Stock
as to which an Option or SAR may be exercised.
(g) Termination
of Continuous Service. Except as otherwise provided in the applicable Award Agreement or
other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates (other than for Cause
and other than upon the Participant’s death or Disability), the Participant may exercise his or her Option or SAR (to the extent
that the Participant was entitled to exercise such Award as of the date of termination of Continuous Service) within the period of time
ending on the earlier of (i) the date that is three (3) months following the termination of the Participant’s Continuous
Service (or such longer or shorter period specified in the applicable Award Agreement, which period will not be less than thirty (30)
days if necessary to comply with applicable laws unless such termination is for Cause) and (ii) the expiration of the term of the
Option or SAR as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant does not exercise
his or her Option or SAR (as applicable) within the applicable time frame, the Option or SAR will terminate.
(h) Extension
of Termination Date. Except as otherwise provided in the applicable Award Agreement or
other written agreement between the Participant and the Company, if the exercise of an Option or SAR following the termination of the
Participant’s Continuous Service (other than for Cause and other than upon the Participant’s death or Disability) would be
prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities
Act, then the Option or SAR will terminate on the earlier of (i) the expiration of a total period of time (that need not be consecutive)
equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service during which
the exercise of the Option or SAR would not be in violation of such registration requirements, and (ii) the expiration of the term
of the Option or SAR as set forth in the applicable Award Agreement. In addition, unless otherwise provided in a Participant’s
Award Agreement, if the sale of any Common Stock received on exercise of an Option or SAR following the termination of the Participant’s
Continuous Service (other than for Cause) would violate the Company’s insider trading policy, then the Option or SAR will terminate
on the earlier of (i) the expiration of a period of months (that need not be consecutive) equal to the applicable post-termination
exercise period after the termination of the Participant’s Continuous Service during which the sale of the Common Stock received
upon exercise of the Option or SAR would not be in violation of the Company’s insider trading policy, or (ii) the expiration
of the term of the Option or SAR as set forth in the applicable Award Agreement.
(i) Disability
of Participant. Except as otherwise provided in the applicable Award Agreement or other
agreement between the Participant and the Company, if a Participant’s Continuous Service terminates as a result of the Participant’s
Disability, the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Option
or SAR as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the
date twelve (12) months following such termination of Continuous Service (or such longer or shorter period specified in the Award Agreement,
which period will not be less than six (6) months if necessary to comply with applicable laws) and (ii) the expiration of the
term of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant does
not exercise his or her Option or SAR within the applicable time frame, the Option or SAR (as applicable) will terminate.
(j) Death
of Participant. Except as otherwise provided in the applicable Award Agreement or other
agreement between the Participant and the Company, if (i) a Participant’s Continuous Service terminates as a result of the
Participant’s death, or (ii) the Participant dies within the period (if any) specified in the Award Agreement for exercisability
after the termination of the Participant’s Continuous Service for a reason other than death, then the Option or SAR may be exercised
(to the extent the Participant was entitled to exercise such Option or SAR as of the date of death) by the Participant’s estate,
by a person who acquired the right to exercise the Option or SAR by bequest or inheritance or by a person designated to exercise the Option
or SAR upon the Participant’s death, but only within the period ending on the earlier of (i) the date eighteen (18) months
following the date of death (or such longer or shorter period specified in the Award Agreement, which period will not be less than six
(6) months if necessary to comply with the applicable laws) and (ii) the expiration of the term of such Option or SAR as set
forth in the Award Agreement. If, after the Participant’s death, the Option or SAR is not exercised within the applicable
time frame, the Option or SAR (as applicable) will terminate.
(k) Termination
for Cause. Except as explicitly provided otherwise in a Participant’s Award Agreement
or other individual written agreement between the Company or any Affiliate and the Participant, if a Participant’s Continuous Service
is terminated for Cause, the Option or SAR will terminate immediately upon such Participant’s termination of Continuous Service,
and the Participant will be prohibited from exercising his or her Option or SAR from and after the time of such termination of Continuous
Service.
(l) Non-Exempt
Employees. If an Option or SAR is granted to an Employee who is a non-exempt employee for
purposes of the Fair Labor Standards Act of 1938, as amended, the Option or SAR will not be first exercisable for any shares of Common
Stock until at least six (6) months following the date of grant of the Option or SAR (although the Award may vest prior to such date).
Consistent with the provisions of the Worker Economic Opportunity Act, (i) if such non-exempt Employee dies or suffers a Disability,
(ii) upon a Corporate Transaction in which such Option or SAR is not assumed, continued, or substituted, (iii) upon a Change
in Control, or (iv) upon the Participant’s retirement (as such term may be defined in the Participant’s Award Agreement,
in another agreement between the Participant and the Company, or, if no such definition, in accordance with the Company’s then current
employment policies and guidelines), the vested portion of any Options and SARs may be exercised earlier than six (6) months following
the date of grant. The foregoing provision is intended to operate so that any income derived by a non-exempt employee in connection
with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay. To the extent permitted and/or required
for compliance with the Worker Economic Opportunity Act to ensure that any income derived by a non-exempt employee in connection with
the exercise, vesting or issuance of any shares under any other Award will be exempt from the employee’s regular rate of pay, the
provisions of this Section 5(l) will apply to all Awards and are hereby incorporated by reference into such Award Agreements.
6. Provisions
of Awards Other than Options and SARs.
(a) Restricted
Stock Awards. Each Restricted Stock Award Agreement will be in such form and will contain
such terms and conditions as the Board deems appropriate. To the extent consistent with the Company’s bylaws, at the Board’s
election, shares of Common Stock may be (i) held in book entry form subject to the Company’s instructions until any restrictions
relating to the Restricted Stock Award lapse; or (ii) evidenced by a certificate, which certificate will be held in such form and
manner as determined by the Board. The terms and conditions of Restricted Stock Award Agreements may change from time to time, and
the terms and conditions of separate Restricted Stock Award Agreements need not be identical. Each Restricted Stock Award
Agreement will conform to (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:
(i) Consideration.
A Restricted Stock Award may be awarded in consideration for (A) cash, check, bank draft or money order payable to the Company, (B) past
or future services to the Company or an Affiliate, or (C) any other form of legal consideration that may be acceptable to the Board,
in its sole discretion, and permissible under applicable law.
(ii) Vesting.
Shares of Common Stock awarded under the Restricted Stock Award Agreement may be subject to forfeiture to the Company in accordance with
a vesting schedule to be determined by the Board.
(iii) Termination
of Participant’s Continuous Service. If a Participant’s Continuous Service
terminates, the Company may receive through a forfeiture condition or a repurchase right any or all of the shares of Common Stock held
by the Participant as of the date of termination of Continuous Service under the terms of the Restricted Stock Award Agreement.
(iv) Transferability.
Rights to acquire shares of Common Stock under the Restricted Stock Award Agreement will be transferable by the Participant only upon
such terms and conditions as are set forth in the Restricted Stock Award Agreement, as the Board will determine in its sole discretion,
so long as Common Stock awarded under the Restricted Stock Award Agreement remains subject to the terms of the Restricted Stock Award
Agreement.
(v) Dividends.
A Restricted Stock Award Agreement may provide that any dividends paid on Restricted Stock will
be subject to the same vesting and forfeiture restrictions as apply to the shares subject to the Restricted Stock Award to which they
relate.
(b) Restricted
Stock Unit Awards. Each Restricted Stock Unit Award Agreement will be in such form and
will contain such terms and conditions as the Board deems appropriate. The terms and conditions of Restricted Stock Unit Award Agreements
may change from time to time, and the terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical.
Each Restricted Stock Unit Award Agreement will conform to (through incorporation of the provisions hereof by reference in the Agreement
or otherwise) the substance of each of the following provisions:
(i) Consideration.
At the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if any, to be paid by the Participant
upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by
the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of legal consideration
that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.
(ii) Vesting.
At the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions
on or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.
(iii) Payment.
A Restricted Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, any combination thereof
or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit Award Agreement.
(iv) Additional
Restrictions. At the time of the grant of a Restricted Stock Unit Award, the Board, as
it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash
equivalent) subject to a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award.
(v) Dividend
Equivalents. Dividend equivalents may be credited in respect of shares of Common Stock
covered by a Restricted Stock Unit Award, as determined by the Board and contained in the Restricted Stock Unit Award Agreement.
At the sole discretion of the Board, such dividend equivalents may be converted into additional shares of Common Stock covered by the
Restricted Stock Unit Award in such manner as determined by the Board. Any additional shares covered by the Restricted Stock Unit
Award credited by reason of such dividend equivalents will be subject to all of the same terms and conditions of the underlying Restricted
Stock Unit Award Agreement to which they relate.
(vi) Termination
of Participant’s Continuous Service. Except as otherwise provided in the applicable
Restricted Stock Unit Award Agreement or other written agreement between a Participant and the Company or an Affiliate, such portion of
the Restricted Stock Unit Award that has not vested will be forfeited upon the Participant’s termination of Continuous Service.
(c) Performance
Awards.
(i) Performance
Stock Awards. A Performance Stock Award is an Award that is payable (including that may
be granted, may vest or may be exercised) contingent upon the attainment during a Performance Period of certain Performance Goals.
A Performance Stock Award may, but need not, require the Participant’s completion of a specified period of Continuous Service. The
length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to
what degree such Performance Goals have been attained will be conclusively determined by the Board or Committee, in its sole discretion.
In addition, to the extent permitted by applicable law and the applicable Award Agreement, the Board or the Committee may determine that
cash may be used in payment of Performance Stock Awards.
(ii) Performance
Cash Awards. A Performance Cash Award is a cash award that is payable contingent upon the
attainment during a Performance Period of certain Performance Goals. A Performance Cash Award may also require the completion of
a specified period of Continuous Service. At the time of grant of a Performance Cash Award, the length of any Performance Period,
the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals
have been attained will be conclusively determined by the Board or Committee, in its sole discretion. The Board or Committee may
specify the form of payment of Performance Cash Awards, which may be cash or other property, or may provide for a Participant to have
the option for his or her Performance Cash Award, or such portion thereof as the Board may specify, to be paid in whole or in part in
cash or other property.
(iii) Discretion.
A majority of the Company’s Independent Directors or the Committee retains the discretion to adjust or eliminate the compensation
or economic benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects
to use for a Performance Period. Partial achievement of the specified criteria may result in the payment or vesting corresponding
to the degree of achievement as specified in the Award Agreement or the written terms of a Performance Cash Award.
(d) Other
Stock Awards. Other forms of Stock Awards valued in whole or in part by reference to, or
otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options or stock rights with an exercise price or
strike price less than 100% of the Fair Market Value of the Common Stock at the time of grant) may be granted either alone or in addition
to Awards provided for under Section 5 and the preceding provisions of this Section 6. Subject to the provisions
of this Plan, a majority of the Company’s Independent Directors or the Committee will have sole and complete authority to determine
the persons to whom and the time or times at which such Other Stock Awards will be granted, the number of shares of Common Stock (or the
cash equivalent thereof) to be granted pursuant to such Other Stock Awards and all other terms and conditions of such Other Stock Awards.
7. Covenants
of the Company.
(a) Availability
of Shares. The Company will keep available at all times the number of shares of Common
Stock reasonably required to satisfy then-outstanding Awards.
(b) Securities
Law Compliance. The Company will seek to obtain from each regulatory commission or agency
having jurisdiction over this Plan, as necessary, such authority as may be required to grant Awards and to issue and sell shares of Common
Stock upon exercise or vesting of the Awards; provided, however, that this undertaking will not require the Company to register
under the Securities Act, or other securities or applicable laws, this Plan, any Award or any Common Stock issued or issuable pursuant
to any such Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory
commission or agency the authority that counsel for the Company deems necessary or advisable for the lawful issuance and sale of Common
Stock under this Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon exercise or vesting
of such Awards unless and until such authority is obtained. A Participant will not be eligible for the grant of an Award or the subsequent
issuance of cash or Common Stock pursuant to the Award if such grant or issuance would be in violation of any applicable securities law.
(c) No
Obligation to Notify or Minimize Taxes. The Company will have no duty or obligation to
any Participant to advise such holder as to the tax treatment or time or manner of exercising such Award. Furthermore, the Company
will have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible
period in which the Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of an Award
to the holder of such Award.
8. Miscellaneous.
(a) Use
of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common Stock
pursuant to Awards will constitute general funds of the Company.
(b) Corporate
Action Constituting Grant of Awards. Corporate action constituting a grant by the Company
of an Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board,
regardless of when the instrument, certificate, or letter evidencing the Award is communicated to, or actually received or accepted by,
the Participant. In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate
action approving the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those
in the Award Agreement or related grant documents as a result of a clerical error in the papering of the Award Agreement or related grant
documents, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award
Agreement or related grant documents.
(c) Stockholder
Rights. No Participant will be deemed to be the holder of, or to have any of the rights
of a holder with respect to, any shares of Common Stock subject to an Award unless and until (i) such Participant has satisfied all
requirements for exercise of, or the issuance of shares of Common Stock under, the Award pursuant to its terms, and (ii) the issuance
of the Common Stock subject to such Award has been entered into the books and records of the Company.
(d) No
Employment or Other Service Rights. Nothing in this Plan, any Award Agreement or any other instrument
executed thereunder or in connection with any Award granted pursuant thereto will confer upon any Participant any right to continue to
serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or will affect the right of the Company
or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service
of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service
of a Director pursuant to the bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state or
foreign jurisdiction in which the Company or the Affiliate is domiciled or incorporated, as the case may be.
(e) Change
in Time Commitment. In the event a Participant’s regular level of time commitment
in the performance of his or her services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant
is an Employee of the Company and the Employee has a change in status from a full-time Employee to a part-time Employee or takes an extended
leave of absence) after the date of grant of any Award to the Participant, the Board has the right in its sole discretion to (x) make
a corresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled to vest or become
payable after the date of such change in time commitment, and (y) in lieu of or in combination with such a reduction, extend the
vesting or payment schedule applicable to such Award. In the event of any such reduction, the Participant will have no right with respect
to any portion of the Award that is so reduced or extended.
(f) Investment
Assurances. The Company may require a Participant, as a condition of exercising or acquiring
Common Stock under any Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge
and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who
is knowledgeable and experienced in financial and business matters and that such Participant is capable of evaluating, alone or together
with the purchaser representative, the merits and risks of exercising the Award; and (ii) to give written assurances satisfactory
to the Company stating that the Participant is acquiring Common Stock subject to the Award for the Participant’s own account and
not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances
given pursuant to such requirements, will be inoperative if (A) the issuance of the shares upon the exercise or acquisition of Common
Stock under the Award has been registered under a then currently effective registration statement under the Securities Act, or (B) as
to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances
under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates
issued under this Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the Common Stock.
(g) Withholding
Obligations. Unless prohibited by the terms of an Award Agreement, the Company may, in
its sole discretion, satisfy any federal, state or local tax withholding obligation relating to an Award by any of the following means
or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common
Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Award; provided, however,
that no shares of Common Stock are withheld with a value exceeding the maximum amount of tax required to be withheld by law (or such lesser
amount as may be necessary to avoid classification of the Award as a liability for financial accounting purposes); (iii) withholding
cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; or (v) by
such other method as may be set forth in the Award Agreement.
(h) Electronic
Delivery. Any reference herein to a “written” agreement or document will include
any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto) or posted on the
Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access).
(i) Deferrals.
To the extent permitted by applicable law, the Board, in its sole discretion, may determine that the delivery of Common Stock or the payment
of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may establish programs and procedures
for deferral elections to be made by Participants. Deferrals by Participants will be made in accordance with Section 409A of
the Code. Consistent with Section 409A of the Code, the Board may provide for distributions while a Participant is still an employee
or otherwise providing services to the Company. The Board is authorized to make deferrals of Awards and determine when, and in what
annual percentages, Participants may receive payments, including lump sum payments, following the Participant’s termination of Continuous
Service, and implement such other terms and conditions consistent with the provisions of this Plan and in accordance with applicable law.
(j) Compliance
with Section 409A of the Code. Unless otherwise expressly provided for in an Award
Agreement, this Plan and Award Agreements will be interpreted to the greatest extent possible in a manner that makes this Plan and the
Awards granted hereunder exempt from Section 409A of the Code, and, to the extent not so exempt, in compliance with Section 409A
of the Code. If the Board determines that any Award granted hereunder is not exempt from and is therefore subject to Section 409A
of the Code, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid the consequences specified
in Section 409A(a)(1) of the Code, and to the extent an Award Agreement is silent on terms necessary for compliance, such terms
are hereby incorporated by reference into the Award Agreement. Notwithstanding anything to the contrary in this Plan (and unless
the Award Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding
an Award that constitutes “deferred compensation” under Section 409A of the Code is a “specified employee”
for purposes of Section 409A of the Code, no distribution or payment of any amount that is due because of a “separation from
service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) will be issued or paid
before the date that is six months following the date of such Participant’s “separation from service” (as defined in
Section 409A of the Code without regard to alternative definitions thereunder) or, if earlier, the date of the Participant’s
death, unless such distribution or payment can be made in a manner that complies with Section 409A of the Code, and any amounts so
deferred will be paid in a lump sum on the day after such six month period elapses, with the balance paid thereafter on the original schedule.
Notwithstanding any provision of this Plan, in no event will the Company be liable for any additional tax, interest or penalty imposed
upon or other detriment suffered by a Participant under Section 409A of the Code or for any damages suffered by such Participant
for any failure of this Plan or any Award to comply with or be exempt from Section 409A of the Code.
(k) Clawback/Recovery.
All Awards granted under this Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to
adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are
listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition,
the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or
appropriate, including but not limited to a reacquisition right in respect of previously acquired shares of Common Stock or other cash
or property upon the occurrence of an event constituting Cause. No recovery of compensation under such a clawback policy will be an event
giving rise to a right to voluntary terminate employment upon “resignation” for “good reason” or for a “constructive
termination” or any similar term under any plan of or agreement with the Company.
(l) Not
Benefit Plan Compensation. Payments and other benefits received by a Participant under an Award
made pursuant to this Plan will not be deemed a part of Participant’s compensation for purposes of determining the Participant’s
benefits under any other benefit plans or arrangements provided by the Company or an Affiliate, except where the Board expressly provides
otherwise in writing.
9. Adjustments
upon Changes in Common Stock; Other Corporate Events.
(a) Capitalization
Adjustments. In the event of a Capitalization Adjustment, the Board will appropriately
and proportionately adjust: (i) the class(es) and maximum number of securities subject to this Plan pursuant to Section 3(a);
and (ii) the class(es) and number of securities and price per share of Common Stock subject to outstanding Awards. The Board
will make such adjustments, and its determination will be final, binding and conclusive.
(b) Dissolution.
Except as otherwise provided in the Award Agreement, in the event of a Dissolution of the Company, all outstanding Awards (other than
Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Company’s right
of repurchase) will terminate immediately prior to the completion of such Dissolution, and the shares of Common Stock subject to the Company’s
repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that the
holder of such Award is providing Continuous Service; provided, however, that the Board may, in its sole discretion, cause some
or all Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such Awards have
not previously expired or terminated) before the Dissolution is completed but contingent on its completion.
(c) Transaction.
The following provisions will apply to Awards in the event of a Transaction unless otherwise provided in the instrument evidencing the
Award or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by
the Board at the time of grant of an Award. In the event of a Transaction, then, notwithstanding any other provision of this Plan,
the Board may take one or more of the following actions with respect to Awards, contingent upon the closing or completion of the Transaction:
(i) arrange
for the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) to assume or
continue the Award or to substitute a similar stock award for the Award (including, but not limited to, an award to acquire the same consideration
paid to the stockholders of the Company pursuant to the Transaction);
(ii) arrange
for the assignment of any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to the Award
to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company);
(iii) accelerate
the vesting, in whole or in part, of the Award (and, if applicable, the time at which the Award may be exercised) to a date prior to the
effective time of such Transaction as the Board determines (or, if the Board does not determine such a date, to the date that is five
days prior to the effective date of the Transaction), with such Award terminating if not exercised (if applicable) at or prior to the
effective time of the Transaction; provided, however, that the Board may require Participants to complete and deliver to the Company a
notice of exercise before the effective date of a Transaction, which exercise is contingent upon the effectiveness of such Transaction;
(iv) arrange
for the lapse, in whole or in part, of any reacquisition or repurchase rights held by the Company with respect to the Award;
(v) cancel
or arrange for the cancellation of the Award, to the extent not vested or not exercised prior to the effective time of the Transaction,
in exchange for such cash consideration, if any, as the Board, in its sole discretion, may consider appropriate; and
(vi) make
a payment, in such form as may be determined by the Board equal to the excess, if any, of (A) the value of the property the Participant
would have received upon the exercise of the Award immediately prior to the effective time of the Transaction, over (B) any exercise
price payable by such holder in connection with such exercise. For clarity, this payment may be $0 if the value of the property
is equal to or less than the exercise price. Payments under this provision may be delayed to the same extent that payment of consideration
to the holders of the Company’s Common Stock in connection with the Transaction is delayed as a result of escrows, earn outs, holdbacks
or other contingencies.
The Board need not take the same action or actions
with respect to all Awards or portions thereof or with respect to all Participants. The Board may take different actions with respect
to the vested and unvested portions of an Award.
(d) Change
in Control. An Award may be subject to additional acceleration of vesting and exercisability
upon or after a Change in Control as may be provided in the Award Agreement for such Award or as may be provided in any other written
agreement between the Company or any Affiliate and the Participant, but in the absence of such provision, no such acceleration will automatically
occur.
10. Termination
or Suspension of this Plan. The Board may suspend or terminate this Plan at any time. No Awards
may be granted under this Plan while this Plan is suspended or after it is terminated.
11. Effective
Date of this Plan. This Plan will come into existence on the Effective Date.
12. Choice
of Law. The laws of the State
of Delaware will govern all questions concerning the construction, validity and interpretation of this Plan, without regard to that state’s
conflict of laws rules.
13. Definitions.
As used in this Plan, the following definitions will apply to the capitalized terms indicated
below:
(a) “Affiliate”
means, at the time of determination, any “parent” or “subsidiary” of the Company as such terms are defined in
Rule 405 of the Securities Act. The Board will have the authority to determine the time or times at which “parent”
or “subsidiary” status is determined within the foregoing definition.
(b) “Award”
means an Option, a Stock Appreciation Right, a Restricted Stock Award, a Restricted Stock Unit Award, a Performance Stock Award, a Performance
Cash Award or an Other Stock Award.
(c) “Award
Agreement” means a written agreement between the Company and a Participant evidencing
the terms and conditions of an Award.
(d) “Board”
means the Board of Directors of the Company.
(e) “Capitalization
Adjustment” means any change that is made in, or other events that occur with respect
to, the Common Stock subject to this Plan or subject to any Award after the Effective Date without the receipt of consideration by the
Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than
cash, large nonrecurring cash dividend, stock split, reverse stock split liquidating dividend, combination of shares, exchange of shares,
change in corporate structure or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting
Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion
of any convertible securities of the Company will not be treated as a Capitalization Adjustment.
(f) “Cause” shall
have the meaning ascribed to such term in any written agreement between the Participant and the Company defining such term and, in the
absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events: (i) such
Participant’s commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United
States or any state thereof; (ii) such Participant’s attempted commission of, or participation in, a fraud or act of dishonesty
against the Company; (iii) such Participant’s intentional, material violation of any contract or agreement between the Participant
and the Company or of any statutory duty owed to the Company; (iv) such Participant’s unauthorized use or disclosure of the
Company’s confidential information or trade secrets; or (v) such Participant’s gross misconduct. The determination that
a termination of the Participant’s Continuous Service is either for Cause or without Cause shall be made by the Company, in its
sole discretion. Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause
for the purposes of outstanding Awards held by such Participant shall have no effect upon any determination of the rights or obligations
of the Company or such Participant for any other purpose.
(g) “Change
in Control” unless otherwise defined in the applicable Award Agreement or other written
agreement approved by the Board or the Committee means the occurrence of any of the following:
(i) the
acquisition (including through purchase, reorganization, merger, consolidation or similar transaction), directly or indirectly, in one
or more transactions by a person of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities
representing 50% or more of the combined voting power of the securities of the Company entitled to vote generally in the election of directors
of the Board, calculated on a fully diluted basis after giving effect to such acquisition;
(ii) an
election of persons to the Board that causes two-thirds of the Board to consist of persons other than (i) members of the Board on
the Effective Date and (ii) persons who were nominated for election as members of the Board at a time when two-thirds of the Board
consisted of persons who were members of the Board on the Effective Date; provided that any person nominated for election
by a Board at least two-thirds of which consisted of persons described in clauses (i) or (ii) or by persons who were themselves
nominated by such Board shall be deemed to have been nominated by a Board consisting of persons described in clause (i); or
(iii) the
sale or other disposition, directly or indirectly, of all or substantially all of the assets of the Company and its Subsidiaries, taken
as a whole, to any person;
provided, however,
that a Change in Control shall be deemed to not have occurred if such Change in Control results from the issuance, in connection with
a bona fide transaction or series of transactions with the primary purpose of providing equity financing to the Company or any of its
Affiliates, of voting securities of the Company or any of its Affiliates or any rights to acquire voting securities of the Company or
any of its Affiliates which are convertible into voting securities. For purposes of this definition of Change in Control, a “person”
means any individual, entity (including any employee benefit plan or any trust for an employee benefit plan) or group (within the meaning
of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision).
(h) “Code”
means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.
(i) “Common
Stock” means the Class A common stock of the Company having one vote per share.
(j) “Company”
means Helius Medical Technologies, Inc., a Delaware corporation.
(k) “Consultant”
means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services
and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for
such services. However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered
a “Consultant” for purposes of this Plan. Notwithstanding the foregoing, a person is treated as a Consultant
under this Plan only if a Form S-8 Registration Statement under the Securities Act is available to register either the offer or the
sale of the Company’s securities to such person.
(l) “Continuous
Service” means that the Participant’s service with the Company or an Affiliate,
whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant
renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant
renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an
Affiliate, will not terminate a Participant’s Continuous Service; provided, however, that if the Entity for which
a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board, in its sole discretion, such Participant’s
Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. To the extent
permitted by law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether
Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive
officer, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or
their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting
in an Award only to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of
absence agreement or policy applicable to the Participant, or as otherwise required by law.
(m) “Corporate
Transaction” means the consummation, in a single transaction or in a series of related
transactions, of any one or more of the following events:
(i) a
sale or other disposition of all or substantially all, as determined by the Board, in its sole discretion, of the consolidated
assets of the Company and its Subsidiaries;
(ii) a
sale or other disposition of more than 50% of the outstanding securities of the Company;
(iii) a
merger, consolidation or similar transaction following which the Company is not the surviving corporation; or
(iv) a
merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding
immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation
or similar transaction into other property, whether in the form of securities, cash or otherwise.
(n) “Director”
means a member of the Board. Directors are not eligible to receive Awards under this Plan with respect to their service in such
capacity.
(o) “Disability”
means, with respect to a Participant, the inability of such Participant to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to
last for a continuous period of not less than 12 months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code,
and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.
(p) “Dissolution”
means when the Company, after having executed a certificate of dissolution with the State of Delaware (or other applicable state), has
completely wound up its affairs. Conversion of the Company into a Limited Liability Company (or any other pass-through entity) will
not be considered a “Dissolution” for purposes of this Plan.
(q) “Effective
Date” means July 2, 2021.
(r) “Employee”
means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services,
will not cause a Director to be considered an “Employee” for purposes of this Plan.
(s) “Entity”
means a corporation, partnership, limited liability company or other entity.
(t) “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
(u) “Fair
Market Value” means, unless otherwise determined by the Board or the Committee, as
of any date, the value of the Common Stock, determined based on the following in order:
(i) if
the Common Stock is listed on the NASDAQ Stock Market, the Fair Market Value of a share of Common Stock shall be the closing price reported
or quoted on the NASDAQ Stock Market for the Common Stock on such date, or if the Common Stock shall not have been reported or quoted
on such date and the Common Stock is listed on the TSX, the Fair Market Value of a share of Common Stock shall be the United States dollar
equivalent (determined by using the closing $CAN to $US exchange rate published by the Bank of Canada on the applicable date) of the closing
price reported or quoted on the TSX for the Common Stock on such date, or if the Common Stock shall not have been reported or quoted on
such date on either the NASDAQ Stock Market or the TSX, the Fair Market Value of a share of Common Stock shall be the closing price reported
or quoted on the NASDAQ Stock Market for the Common Stock on the first day prior thereto on which the Common Stock was reported or quoted,
in each case as reported in a source the Board or the Committee deems reliable;
(ii) if
the Common Stock is not listed on the NASDAQ Stock Market but is listed on the TSX, the Fair Market Value of a share of Common Stock shall
be the United States dollar equivalent (determined by using the closing $CAN to $US exchange rate published by the Bank of Canada on the
applicable date) of the closing price reported or quoted on the TSX for the Common Stock on such date, or if the Common Stock shall not
have been reported or quoted on such date, on the first day prior thereto on which the Common Stock was reported or quoted on the TSX,
in each case as reported in a source the Board or the Committee deems reliable;
(iii) if
the Common Stock is not listed on the NASDAQ Stock Market or the TSX, the Fair Market Value of a share of Common Stock shall be the closing
price reported for the Common Stock on such date: (i) as reported on the principal national securities exchange in the United States
on which it is then traded; or (ii) if not traded on any such national securities exchange, as quoted on an automated quotation system
sponsored by the Financial Industry Regulatory Authority or if the Common Stock shall not have been reported or quoted on such date, on
the first day prior thereto on which the Common Stock was reported or quoted; or
(iv) if
the Common Stock is not traded, listed or otherwise reported or quoted, then Fair Market Value means the fair market value of the Common
Stock as determined by the Board or the Committee in good faith in whatever manner it considers appropriate taking into account the requirements
of Section 409A or Section 422 of the Code, as applicable.
(v) “Non-Employee
Director” means a Director who either (i) is not a current employee or officer
of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services
rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required
under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)), does
not possess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and
is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a “non-employee director” for purposes of Rule 16b-3.
(w) “Nonstatutory
Stock Option” means any option granted pursuant to Section 5 of this Plan
that does not qualify as an “incentive stock option” within the meaning of Section 422 of the Code.
(x) “Officer”
means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.
(y) “Option”
means a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to this Plan.
(z) “Option
Agreement” means a written agreement between the Company and an Optionholder evidencing
the terms and conditions of an Option grant. Each Option Agreement will be subject to the terms and conditions of this Plan.
(aa) “Optionholder”
means a person to whom an Option is granted pursuant to this Plan or, if applicable, such other person who holds an outstanding Option.
(bb) “Other
Stock Award” means an award based in whole or in part by reference to the Common Stock
which is granted pursuant to the terms and conditions of Section 6(d).
(cc) “Other
Stock Award Agreement” means a written agreement between the Company and a holder
of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each Other Stock Award Agreement will
be subject to the terms and conditions of this Plan.
(dd) “Own,”
“Owned,” “Owner,” “Ownership” means a person or
Entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership”
of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise,
has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.
(ee) “Participant”
means a person to whom an Award is granted pursuant to this Plan or, if applicable, such
other person who holds an outstanding Award.
(ff) “Performance
Cash Award” means an award of cash granted pursuant to the terms and conditions of
Section 6(c)(ii).
(gg) “Performance
Criteria” means the one or more criteria that a majority of the Company’s Independent
Directors or the Committee will select for purposes of establishing the Performance Goals for a Performance Period. The Performance
Criteria that will be used to establish such Performance Goals may be based on any one of, or combination of, the following as determined
by a majority of the Company’s Independent Directors or the Committee: (i) enterprise value or value creation targets; (ii) income
or net income; operating income; net operating income or net operating income after tax; operating profit or net operating profit; (iii) cash
flow including, but not limited to, form operations or free cash flow; (iv) specified objectives with regard to limiting the level
of increase in all or a portion of bank debt or other long-term or short-term public or private debt or other similar financial obligations,
or other capital structure improvements, which may be calculated net of cash balances or other offsets and adjustments as may be established
by the Company’s Independent Directors or the Committee; (v) net sales, revenues, net income or earnings before income tax
or other exclusions; (vi) operating margin; return on operating revenue or return on operating profit; (vii) return measures
(after tax or pre-tax), including return on capital employed, return on invested capital; return on equity, return on assets, return
on net assets; (viii) market capitalization, earnings per share, fair market value of the shares of the Common Stock, franchise
value (net of debt), economic value added; (ix) total stockholder return or growth in total stockholder return (with or without
dividend reinvestment); (x) financing and other capital raising transactions; (xi) proprietary investment results; (xii) estimated
market share; (xiii) expansion of sales in additional geographies or markets; (xiv) expense management/control or reduction (including
without limitation, compensation and benefits expense); (xv) customer satisfaction; (xvi) technological improvements/implementation,
new product innovation; (xvii) collections and recoveries; (xviii) property/asset purchases; (xix) litigation and regulatory
resolution/implementation goals; (xx) leases, contracts or financings (including renewals, overhead, savings, G&A and other
expense control goals); (xxi) risk management/implementation; (xxii) development and implementation of strategic plans or organizational
restructuring goals; (xxiii) development and implementation of risk and crisis management programs; compliance requirements and
compliance relief; productivity goals; workforce management and succession planning goals; (xxiv) employee satisfaction or staff
development; (xxv) formations of joint ventures or partnerships or the completion of other similar transactions intended to enhance
revenue or profitability or to enhance its customer base; (xxvi) licensing or partnership arrangements; (xxvii) progress of
partnered programs and partner satisfaction; (xxviii) progress of internal research or development programs; (xxix) strategic
partnerships or transactions (including in-licensing and out-licensing of intellectual property); (xxx) implementation or completion
of critical projects; (xxxi) completion of a merger, acquisition or any transaction that results in the sale of all or substantially
all of the stock or assets; or (xxxii) other measures of performance selected by the Committee. All Performance Criteria may be
based upon the attainment of specified levels of the Company (or Affiliate, division, other operational unit, business segment or administrative
department of the Company or any Affiliate) performance under one or more of the measures described above and may be measured relative
to the performance of other corporations (or an affiliate, subsidiary, division, other operational unit, business segment or administrative
department of another corporation or its affiliates). Any goal may be expressed as a dollar figure, on a percentage basis (if applicable)
or on a per share basis, and goals may be either absolute, relative to a selected peer group or index, or a combination of both. The
Committee may: (A) designate additional business criteria on which the Performance Criteria may be based or (B) adjust, modify
or amend the aforementioned business criteria. Except as otherwise determined by the Committee in the applicable Award Agreement or in
such other document setting forth the Performance Criteria at the time the Performance Criteria are established, the measures used in
Performance Criteria set under the Plan shall be determined in accordance with generally accepted accounting principles (“GAAP”)
and in a manner consistent with the methods used in the Company’s regular reports on Forms 10-K and 10-Q, without regard to any
of the following unless otherwise determined by the Committee: (1) all items of gain, loss or expense for the fiscal year or other
applicable performance period that are related to special, unusual or non-recurring items, events or circumstances affecting the Company
(or Affiliate, division, other operational unit, business segment or administrative department of the Company or any Affiliate) or the
financial statements of the Company (or Affiliate, division, other operational unit, business segment or administrative department of
the Company or any Affiliate); (2) all items of gain, loss or expense for the fiscal year or other applicable performance period
that are related to (i) the disposal of a business or discontinued operations or (ii) the operations of any business acquired
by the Company (or Affiliate, division, other operational unit, business segment or administrative department of the Company or any Affiliate)
during the fiscal year or other applicable performance period; and (3) all items of gain, loss or expense for the fiscal year or
other applicable performance period that are related to changes in accounting principles or to changes in applicable law or regulations.
To the extent any Performance Criteria are expressed using any measures that require deviations from GAAP, such deviations shall be at
the discretion of the Committee as exercised at the time the Performance Criteria are set.
(hh) “Performance
Goals” means, for a Performance Period, the one or more goals established by a majority
of the Company’s Independent Directors or the Committee for the Performance Period based upon the Performance Criteria. Performance
Goals may be based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates, or business segments, and
in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant
indices. The Company’s Independent Directors or the Committee are authorized at any time in its sole discretion, to adjust
or modify the calculation of a Performance Goal for such Performance Period in order to prevent the dilution or enlargement of the rights
of Participants, (a) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event or development;
(b) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements
of the Company in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions;
or (c) in view of the Company’s Independent Directors or the Committee’s assessment of the business strategy of the Company,
performance of comparable organizations, economic and business conditions, and any other circumstances deemed relevant. Specifically,
the Company’s Independent Directors or the Committee are authorized to make adjustment in the method of calculating attainment of
Performance Goals and objectives for a Performance Period as follows: (i) to exclude the dilutive effects of acquisitions or joint
ventures; (ii) to assume that any business divested by the Company achieved performance objectives at targeted levels during the
balance of a Performance Period following such divestiture; and (iii) to exclude the effect of any change in the outstanding shares
of common stock of the Company by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation,
spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common stockholders other than
regular cash dividends. In addition, the Company’s Independent Directors or the Committee are authorized to make adjustment in the
method of calculating attainment of Performance Goals and objectives for a Performance Period as follows: (i) to exclude restructuring
and/or other nonrecurring charges; (ii) to exclude exchange rate effects, as applicable, for non-U.S. dollar denominated net sales
and operating earnings; (iii) to exclude the effects of changes to generally accepted accounting standards required by the Financial
Accounting Standards Board; (iv) to exclude the effects of any items that are “unusual” in nature or occur “infrequently”
as determined under generally accepted accounting principles; (v) to exclude the effects to any statutory adjustments to corporate
tax rates; and (vi) to make other appropriate adjustments selected by the Company’s Independent Directors or the Committee.
(ii) “Performance
Period” means the period of time selected by a majority of the Company’s Independent
Directors or the Committee over which the attainment of one or more Performance Goals will be measured for the purpose of determining
a Participant’s right to and the payment of an Award. Performance Periods may be of varying and overlapping duration, at the
sole discretion of a majority of the Company’s Independent Directors or the Committee.
(jj) “Performance
Stock Award” means an Award granted under the terms and conditions of Section 6(c)(i).
(kk) “Plan”
means this Helius Medical Technologies, Inc. Amended and Restated 2021 Inducement Plan, as it may be amended.
(ll) “Restricted
Stock Award” means an award of shares of Common Stock which is granted pursuant to
the terms and conditions of Section 6(a).
(mm) “Restricted
Stock Award Agreement” means a written agreement between the Company and a holder of
a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. Each Restricted Stock Award Agreement
will be subject to the terms and conditions of this Plan.
(nn) “Restricted
Stock Unit Award” means a right to receive shares of Common Stock which is granted
pursuant to the terms and conditions of Section 6(b).
(oo) “Restricted
Stock Unit Award Agreement” means a written agreement between the Company and
a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted
Stock Unit Award Agreement will be subject to the terms and conditions of this Plan.
(pp) “Rule 16b-3”
means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.
(qq) “Securities
Act” means the Securities Act of 1933, as amended.
(rr) “Stock
Appreciation Right” or “SAR” means a right to receive
the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 5.
(ss) “Stock
Appreciation Right Agreement” means a written agreement between the Company and a holder
of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation Right grant. Each Stock Appreciation Right
Agreement will be subject to the terms and conditions of this Plan.
(tt) “Subsidiary”
means, with respect to the Company, (i) any corporation of which more than 50% of the outstanding capital stock having ordinary voting
power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class
or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly
or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has
a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than 50%.
(uu) “Transaction”
means a Corporate Transaction or a Change in Control.
Exhibit 5.1
July 24, 2024
|
Helius Medical Technologies, Inc.
642 Newtown Yardley Road, Suite 100
Newtown, Pennsylvania 18940 |
|
Re: Registration
Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to
Helius Medical Technologies, Inc., a Delaware corporation (the “Company”), in connection with the preparation
and filing with the Securities and Exchange Commission (the “Commission”) of a Registration Statement on Form S-8
(the “Registration Statement”) for the registration under the Securities Act of 1933, as amended (the “Securities
Act”), of (i) an increase of 1,826,909 shares of the Company’s Class A common stock, par value $0.001 per
share (the “Common Stock”), to be issued pursuant to awards under the Helius Medical Technologies, Inc.
2022 Equity Incentive Plan, as amended (the “2022 Plan”) and (ii) an increase of 150,000 shares of Common
Stock to be reserved under the Helius Medical Technologies, Inc. 2021 Inducement Plan (together with the 2022 Plan, the “Plans”).
Our opinions herein are limited
solely to the matters set forth herein. The law covered by the opinions expressed herein is limited to the Delaware General Corporation
Law as in effect on the date hereof (the “DGCL”). We are not admitted to practice in the State of Delaware and,
with respect to the opinions set forth below, we have (i) limited our review to standard compilations available to us of the DGCL,
which we have assumed to be accurate and complete, and (ii) not reviewed case law. We express no opinion as to whether the laws of
any jurisdiction are applicable to the subject matter hereof. It is understood that this opinion letter is to be used only in connection
with the offer sale of the Common Stock while the Registration Statement is effective under the Securities Act.
Based upon our examination
of such documents and other matters as we deem relevant, we are of the opinion that the shares of Common Stock to be offered by the Company
under the Plans pursuant to the Registration Statement are duly authorized and, when issued, delivered and sold by the Company in accordance
with the Plans, as applicable, and the awards thereunder, the Registration Statement and the related prospectuses, will be validly issued,
fully paid and non-assessable.
We hereby consent to the filing
of this opinion with the Commission as Exhibit 5.1 to the Registration Statement. In giving such consent, we do not admit that we
are within the category of persons whose consent is required by Section 7 of the Securities Act or the rules and regulations
promulgated thereunder by the Commission.
| Honigman LLP • 650 Trade Centre Way • Suite 200 • Kalamazoo, Michigan 49002-0402 |
July 24, 2024
Page 2
| |
Very truly yours, |
| |
|
| |
/s/ Honigman LLP |
| |
HONIGMAN LLP |
| Honigman LLP • 650 Trade Centre Way • Suite 200 • Kalamazoo, Michigan 49002-0402 |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
We consent to the incorporation by reference in the Registration Statement
on Form S-8 of Helius Medical Technologies, Inc. of our report dated March 28, 2024, relating to the consolidated financial
statements of Helius Medical Technologies, Inc. in the Annual Report on Form 10-K for the year ended December 31, 2023.
Our report contains an explanatory paragraph relating to the Company’s ability to continue as a going concern.
/s/ Baker Tilly US, LLP
Minneapolis, Minnesota
July 24, 2024
Exhibit 107
Calculation of Filing Fee Table
FORM S-8
(Form Type)
Helius Medical Technologies, Inc.
(Exact Name of Registrant as Specified in its Charter)
Newly Registered Securities
| | |
Security
Type | |
Security Class Title | |
Fee
Calculation
or Carry
Forward
Rule | |
Amount
Registered(1) | | |
Proposed
Maximum
Offering price
Per Unit | | |
Maximum
Aggregate
Offering Price | | |
Fee Rate | | |
Amount
of
Registration
Fee | |
| Fees to be Paid | |
| |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
Equity | |
Class A Common Stock, par value
$0.001 per share, to be issued under the Helius Medical Technologies, Inc. 2022 Equity Incentive Plan | |
Other | |
| 1,757,857 | (2) | |
$ | 0.9650 | (3) | |
$ | 1,696,332.01 | (3) | |
| 0.0001476 | | |
$ | 250.38 | |
| | |
Equity | |
Class A Common Stock, par value $0.001 per
share, to be issued under the Helius Medical Technologies, Inc. 2022 Equity Incentive Plan | |
Other | |
| 69,052 | (4) | |
$ | 0.8640 | (5) | |
$ | 59,660.93 | (5) | |
| 0.0001476 | | |
$ | 8.81 | |
| | |
Equity | |
Class A Common
Stock, par value $0.001 per share, to be issued under the Helius Medical Technologies, Inc. 2021 Inducement
Plan | |
Other | |
| 150,000 | (6) | |
$ | 0.8640 | (5) | |
$ | 129,600 | (5) | |
| 0.0001476 | | |
$ | 19.13 | |
| Total Offering Amounts | |
| |
| |
| |
| | | |
| | | |
$ | 1,885,592.93 | | |
| | | |
$ | 278.31 | |
| Total Fees Previously Paid | |
| |
| |
| |
| | | |
| | | |
| | | |
| | | |
$ | -- | |
| Total Fee Offsets | |
| |
| |
| |
| | | |
| | | |
| | | |
| | | |
$ | -- | |
| Net Fee Due | |
| |
| |
| |
| | | |
| | | |
| | | |
| | | |
$ | 278.31 | |
| (1) | Pursuant to Rule 416(a) promulgated under the Securities
Act of 1933, as amended, (the “Securities Act”), this Registration Statement shall also cover any additional shares of Registrant’s
common stock that become issuable under the plan set forth herein by reason of any stock dividend, stock split, reclassification, recapitalization,
spin-off or other similar transaction effected without receipt of consideration that increases the number of outstanding shares of Registrant’s
common stock, as applicable. |
| (2) | Consists of shares issuable upon exercise of stock options that
have been granted under the 2022 Equity Incentive Plan (“2022 Plan”) pursuant to the First Amendment to the 2022 Equity Incentive
Plan that was approved by the Board on May 30, 2024 and approved by the Registrant’s stockholders at the Registrant’s
Annual Meeting of Stockholders on June 27, 2024 (the “Amendment”). |
| (3) | Estimated solely for the purpose of calculating the registration
fee pursuant to paragraph (h) of Rule 457 under the Securities Act. The proposed maximum offering price per share is based
upon the exercise price for the shares of Class A common stock underlying outstanding stock options pursuant to Rule 457(h) under
the Securities Act. |
| (4) | Consists of shares reserved for future issuance under the 2022
Plan pursuant to the Amendment. |
| (5) | Estimated solely for the purpose of calculating the amount of
the registration fee pursuant to Rule 457(c) and Rule 457(h) under the Securities Act. The offering price per share
and aggregate offering price are based on the average of the high and low prices of the Registrant’s common stock as reported on
the Nasdaq Capital Market on July 17, 2024. |
| (6) | Consists of shares reserved for grant under the 2021 Inducement
Plan pursuant to an amendment to the 2021 Inducement Plan that was approved by the Board on July 2, 2024. |
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