Item 8.01 Other Events
On or about May 11, 2021, Simulations Plus, Inc., a California corporation (the
"Company"), mailed a proxy statement (the "Proxy Statement") to its shareholders
relating to a special meeting of the Company's shareholders (the "Special
Meeting"), which Special Meeting is to be held on Wednesday, June 23, 2021, at
2:00 p.m. Pacific Time, virtually via live webcast through
www.virtualshareholdermeeting.com/SLP2021. The Proxy Statement included a
proposal to approve the Company's adoption of a new 2021 Equity Incentive Plan
(the "2021 Plan"). If approved by the Company's shareholders, the 2021 Plan
would have authorized a total of 2,100,000 shares of the Company's common stock
for issuance thereunder.
On June 3, 2021, Institutional Shareholder Services Inc. ("ISS") published a
proxy analysis and vote recommendation for the Special Meeting, which included
an unfavorable recommendation from ISS with respect to the Company's adoption of
the 2021 Plan. ISS' recommendation "against" shareholder approval of the 2021
Plan was based in large part on ISS' determinations that (i) the cost of the
2021 Plan to the Company is excessive, and (ii) the estimated duration of
available and proposed shares issuable under the 2021 Plan exceeds six years.
In response to the ISS recommendation to vote "against" the proposal to approve
the 2021 Plan, on June 8, 2021, the Company revised the 2021 Plan to decrease
the total number of shares of common stock authorized and reserved for issuance
under the 2021 Plan from 2,100,000 shares (as originally proposed) to 1,300,000
shares. The Company believes that the 2021 Plan, as revised (the "Revised 2021
Plan"), will significantly lower the 2021 Plan's cost and decrease the estimated
duration of available and proposed shares. The Company made no other changes to
the 2021 Plan.
Consistent with disclosures included in the Proxy Statement with respect to the
adoption of the 2021 Plan, if the Company's shareholders approve the adoption of
the Revised 2021 Plan, the Revised 2021 Plan will replace the Company's current
2017 Equity Incentive Plan (the "2017 Plan"), no additional awards will be
available for issuance under the 2017 Plan, and any awards that are cancelled or
expire under the 2017 Plan will not be reissued. The Company has not issued any
awards under its 2017 Plan since May 11, 2021, and the Company shall refrain
from granting and/or issuing any additional awards under the 2017 Plan unless
our shareholders reject the adoption of the Revised 2021 Plan at the Special
Meeting, or an adjournment thereof, if applicable.
If shareholders do not approve the Revised 2021 Plan, the Revised 2021 Plan will
not be effective, the 2017 Plan will remain in effect in accordance with its
terms until its expiration, and the Company may be required to significantly
increase the cash component of its executive compensation program in order to
remain competitive and adequately compensate its employees, directors and
service providers.
The foregoing is a summary description of certain terms of the Revised 2021 Plan
and is qualified in its entirety by reference to the full text of the Revised
2021 Plan, a copy of which is attached as Exhibit 10.1 to this Current Report on
Form 8-K and is incorporated herein by reference.
Except as set forth above, the Proxy Statement remains unchanged. The Revised
2021 Plan will be presented for shareholder approval at the Special Meeting. The
Company's Board of Directors continues to recommend unanimously that
shareholders vote "for" the proposal in the Proxy Statement, as supplemented by
this supplement, to approve the Company's Revised 2021 Plan. Any vote "for" or
"against" the 2021 Plan proposal using the proxy card previously furnished to
the shareholders of record as of April 26, 2021, the record date for the Special
Meeting, or the voting instruction card made available to the beneficial owners
by their broker, bank or another nominee will be counted as a vote "for" or
"against," as applicable, the Revised 2021 Plan. If any shareholder has already
returned his or her properly executed proxy card or voted via the Internet or by
telephone and would like to change his or her vote on any matter, such
shareholder may revoke his or her proxy before it is voted at the Special
Meeting by submitting a new proxy bearing a later date via the Internet, by
telephone, by mail or by attending the Special Meeting virtually and casting the
online ballot, or as otherwise described in the Proxy Statement. If any
shareholder would like a new proxy or has any questions, he or she should
contact Will Frederick, the Company's Chief Financial Officer and Corporate
Secretary, at 42505 10th Street West, Lancaster, CA 93534, or at (661) 723-7723.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
10.1 Simulation Plus, Inc. 2021 Equity Incentive Plan.
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