Hyliion Holdings Corp.

The following tables and related disclosures provide information about (i) the “total compensation” of our principal executive officer, or the PEO, and our other NEOs, or the Non-PEO NEOs, as presented in the Summary Compensation Table (“SCT”); (ii) the “compensation actually paid” to our PEO and our Non-PEO NEOs, as calculated pursuant to the Securities and Exchange Commission’s pay-versus-performance rules; (iii) certain financial performance measures; and (iv) the relationship of the compensation actually paid amounts to those financial performance measures.

This disclosure has been prepared in accordance with Item 402(v) of Regulation S-K under the Securities Exchange Act of 1934, as amended, and does not necessarily reflect value actually realized by the executives or how our Compensation Committee evaluates compensation decisions in light of company or individual performance. For discussion of how our Compensation Committee seeks to align pay with performance when making compensation decisions, please review the “Executive Compensation” section elsewhere in this proxy statement.

(1)The Compensation “Actually Paid” reported in this column is derived from the Summary Compensation Table Total for the applicable fiscal year by making the deductions and additions set forth below. Fair value of equity awards was computed in accordance with the Company’s methodology for financial reporting purposes.

(2)For 2025, the individuals included in the “Average Compensation Actually Paid to Non-PEO NEOs” and “Average SCT Total Compensation for Non-PEO NEOs” columns were Messrs. Panzer and Mook. For 2024, the individuals included were Messrs. Panzer and Ramasamy. For 2023, the individuals included were Messrs. Panzer and Gallagher. The PEO for each of the years presented above was Mr. Healy.

Disclosures Concerning Pay-Versus-Performance

Relationship Between “Compensation Actually Paid” and Total Shareholder Return (“TSR”)

Relationship Between “Compensation Actually Paid” and Net Income

PROPOSAL 4 — HYLIION HOLDINGS CORP. 2024 EQUITY INCENTIVE PLAN AMENDMENT

Overview

After careful consideration, the Board recommends that the Company’s stockholders approve an amendment to the Hyliion Holdings Corp. 2024 Equity Incentive Plan (the “2024 Plan”) to increase the number of shares of common stock, par value $0.0001 per share (“Common Stock”), available for issuance under the 2024 Plan by 8 million shares (the “Plan Amendment”). Other than the increase in the number of shares available for issuance under the 2024 Plan that is reflected in the proposed Plan Amendment, there are no other changes proposed to the 2024 Plan.

The Board approved the Plan Amen dment on March 26, 2026, subject to approval by our stockholders at the Annual Meeting. If approved by our stockholders, the 2024 Plan Amendment would become effective as of the date of such approval (the “Effective Date”).

In making the recommendation to increase the number of shares available for issuance under the 2024 Plan by an additional 8 million shares, we considered a number of factors, including the need to retain and motivate employees, the importance of aligning employees’ compensation more closely with shareholder interests, an internal assessment of the amount of shares we estimate needing in order to continue to award competitive equity-based compensation to our employees and Board for the next three years, and the dilutive impact of an increased share reserve.

Key Data Used to Determine the Number of Shares Needed

Outstanding Equity Awards and Shares Available. The following table includes information regarding outstanding equity awards and shares available for future awards under the 2024 Plan as of March 25, 2026:

As of March 25, 2026, we have: (1) no shares available for grant under any other equity compensation plan, and (2) minimal outstanding stock options and no outstanding stock appreciation rights.

Significant Historical Award Information. A common measure of a stock plan’s cost is burn rate. The burn rate refers to annual share usage, which measures how fast a company uses the supply of shares authorized for issuance under its stock plans. Over the last three years, we have maintained an average burn rate of 1.80% of shares of our common stock outstanding per year.

Summary of Material Terms of the 2024 Plan

The following is a summary of material terms of the 2024 Plan. All statements herein are intended only to summarize the 2024 Plan and are qualified in their entirety by reference to the 2024 Plan itself. A copy of the Plan Amendment is set forth in full in Annex A.

Awards

The 2024 Plan provides for the grant of incentive stock options (“ISOs”) within the meaning of Section 422 of the Code to employees, including employees of any parent or subsidiary, and nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of awards to employees, directors and consultants, including employees and consultants of our affiliates.

Eligibility

Any individual who is an employee of the Company or any of its affiliates, or any person who provides consulting or advisory services to the Company or its affiliates, including members of the Board, is eligible to receive awards under the 2024 Plan at the discretion of the plan administrator. As of March 25, 2026, we had approximately 115 employees and seven (7) independent directors who are eligible to participate in the 2024 Plan. Consultants are eligible to receive awards pursuant to the 2024 Plan.

Authorized Shares

The maximum number of shares of common stock that may be issued under the 2024 Plan will not exceed 16 million shares, subject to the adjustments described below. The maximum number of shares of common stock that may be issued on the exercise of ISOs under the 2024 Plan is also 16 million shares. On March 25, 2026, the per share closing price of our common stock on the NYSE American was $1.89 per share.

The maximum aggregate number of shares of common stock that may be issued under the 2024 Plan will be adjusted to include (i) any shares reserved for issuance under the 2020 Plan that were available for grant pursuant to the 2020 Plan, which as of March 25, 2026 was 2,864,511 shares of common stock 9of the 5,674,192 shares of common stock available for future grant), (ii) shares underlying any outstanding awards granted under the 2020 Plan that, following the effective date of the 2024 Plan, terminated, expired, or were cancelled, forfeited or lapsed for any reason, and (iii) any shares that would otherwise be issued or that are reacquired by the Company after the effective date of the 2024 Plan to satisfy a tax withholding obligation in connection with an award granted under the 2020 Plan. For the avoidance of doubt, no additional awards were available for future grant under the 2020 Plan upon shareholder approval of the 2024 plan. The aggregate number of shares for issuance under the 2024 Plan will be further adjusted to be reduced by the number of shares underlying any awards granted pursuant to an equity plan of an entity acquired by the Company or any affiliate through a business combination transaction, provided that such acquired entity is deemed an affiliate of the Company upon the closing of such transaction.

Awards granted under the 2024 Plan shall reduce the number of shares available for issuance under the 2024 Plan. The number of shares available for issuance under the 2024 Plan shall be further reduced by shares of common stock that are (i) withheld or tendered to pay the exercise price of an option granted under the 2024 Plan or (ii) to satisfy tax withholding obligations associated with an option or stock appreciation right granted under the 2024 Plan.

Furthermore, any shares of common stock that were (i) subject to a stock-settled stock appreciation right granted under the 2024 Plan that were not issued upon the exercise of such stock appreciation right or (ii) purchased by the Company on the open market with the proceeds from the exercise of an option granted under the 2024 Plan, shall not become available for grant under the Plan.

The following shares of common stock initially deducted from the shares available for issuance under the 2024 Plan will be added back and again become available for issuance under the 2024 Plan: (i) any shares of common stock that are not issued, forfeited back to or repurchased by the Company because of the expiration or termination of an award or a failure to meet a contingency or condition required for the vesting of an award; (ii) any shares of common stock that are reacquired by the Company to satisfy a tax withholding obligation in connection with an award (other than an option or stock appreciation right); and (iii) the settlement of an award in cash rather than shares of common stock.

Non-Employee Director Compensation Limit

The aggregate value of all compensation granted or paid to any non-employee director with respect to any calendar year, including awards granted and cash fees paid to such non-employee director, will not exceed (a) $750,000 in total value or (b) if such non-employee director is either Board Chair or first appointed or elected to the Board during such calendar year, $900,000 in total value.

Plan Administration

The Board, or a duly authorized committee thereof, will administer the 2024 Plan and is referred to as the “plan administrator” herein. The Board may also delegate to one or more of its officers the authority to (a) designate employees (other than officers) to receive specified stock awards and (b) determine the number of shares subject to such stock awards. Under the 2024 Plan, the Board has the authority to determine award recipients, grant dates, the numbers and types of stock awards to be granted, the applicable fair market value and the provisions of each stock award, including the period of exercisability and the vesting schedule applicable to a stock award; provided, however, that the 2024 Plan will have a minimum vesting schedule of one year for all awards, other than cash-based awards, shares issued in lieu of cash-based awards and awards granted in assumption or in substitution of an outstanding award previously granted by an entity acquired by the Company or an affiliate in a business combination transaction, provided that such acquired entity is deemed an affiliate of the Company upon the closing of such transaction. Vesting of an award may be accelerated (in whole or in part) upon a change in control transaction or qualifying termination of employment, as set forth within an individual award agreement, and up to

5% of the share reserve may be granted without regard to the minimum vesting requirement, so long as such awards are granted by the Board or the Compensation Committee.

Under the 2024 Plan, the Board also generally has the authority to effect, with the consent of any materially adversely affected participant, (a) the reduction of the exercise, purchase or strike price of any outstanding option or stock appreciation right, (b) the cancellation of any outstanding option or stock appreciation right and the grant in substitution therefore of other awards, cash or other consideration or (c) any other action that is treated as a repricing under GAAP, provided, however, that any such action that constitutes a repricing under then applicable stock exchange rules and listing standards will be subject to the approval of our stockholders.

Stock Options

ISOs and NSOs are granted under stock option agreements adopted by the plan administrator. The plan administrator determines the exercise price for stock options, within the terms and conditions of the 2024 Plan, provided that the exercise price of a stock option generally cannot be less than 100% of the fair market value of common stock on the date of grant. Options granted under the 2024 Plan vest at the rate specified in the stock option agreement as determined by the plan administrator.

The plan administrator determines the term of stock options granted under the 2024 Plan, up to a maximum of ten years. Unless the terms of an optionholder’s stock option agreement provide otherwise, if an optionholder’s service relationship with the Company or any of its affiliates ceases for any reason other than disability, death or cause, the optionholder may generally exercise any vested options for a period of three months following the cessation of service. This period may be extended in the event that exercise of the option is prohibited by applicable securities laws. If an optionholder’s service relationship with the Company or any of its affiliates ceases due to death, or an optionholder dies within a certain period following cessation of service, the optionholder or a beneficiary may generally exercise any vested options for a period of 18 months following the date of death. If an optionholder’s service relationship with the Company or any of its affiliates ceases due to disability, the optionholder may generally exercise any vested options for a period of 12 months following the cessation of service. In the event of a termination for cause, options generally terminate upon the termination date. In No event may an option be exercised beyond the expiration of its term.

Acceptable consideration for the purchase of common stock issued upon the exercise of a stock option will be determined by the plan administrator and may include (a) cash, check, bank draft or money order, (b) a broker-assisted cashless exercise, (c) the tender of shares of common stock previously owned by the optionholder, (d) a net exercise of the option if it is an NSO or (e) other legal consideration approved by the plan administrator.

Unless the plan administrator provides otherwise, options and stock appreciation rights generally are not transferable except by will or the laws of descent and distribution. Subject to approval of the plan administrator or a duly authorized officer, an option may be transferred pursuant to a domestic relations order.

Tax Limitations on ISOs

The aggregate fair market value, determined at the time of grant, of shares of common stock with respect to ISOs that are exercisable for the first time by an award holder during any calendar year under all of our stock plans may not exceed $100,000. Options or portions thereof that exceed such limit will generally be treated as NSOs. No ISO may be granted to any person who, at the time of the grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power or any of our subsidiaries unless (a) the option exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant and (b) the term of the ISO does not exceed five years from the date of grant.

Restricted Stock Unit Awards

Restricted stock unit awards are granted under restricted stock unit award agreements adopted by the plan administrator. Restricted stock unit awards are generally granted in consideration for services provided to the Company or an affiliate, but if that the time of grant, the Board determines that any additional consideration must be paid, such consideration may be paid in any form of legal consideration that may be acceptable to the Board and permissible under applicable law. A restricted stock unit award may be settled by cash, delivery of shares of common stock, a combination of cash and shares of common stock as determined by the plan administrator, or in any other form of consideration set forth in the restricted stock unit award agreement. Except as otherwise provided in the applicable award agreement, restricted stock unit awards that have not vested will be forfeited once the participant’s continuous service ends for any reason.

Restricted Stock Awards

Restricted stock awards are granted under restricted stock award agreements adopted by the plan administrator. A restricted stock award may be awarded in consideration for cash, check, bank draft or money order, past services to us or any other form of legal consideration that may be acceptable to the Board and permissible under applicable law. The plan administrator determines the terms and conditions of restricted stock awards, including vesting and forfeiture terms, subject to the minimum vesting requirements set forth in the 2024 Plan. If a participant’s service relationship with the Company ends for any reason, the Company may receive any or all of the shares of common stock held by the participant that have not vested as of the date the participant terminates service with the Company through a forfeiture condition or a repurchase right.

Stock Appreciation Rights

Stock appreciation rights are granted under stock appreciation right agreements adopted by the plan administrator. The plan administrator determines the strike price for a stock appreciation right, which generally cannot be less than 100% of the fair market value of common stock on the date granted. A stock appreciation right granted under the 2024 Plan vests at the rate specified in the stock appreciation right agreement as determined by the plan administrator, subject to the minimum vesting requirements set forth in the 2024 Plan. Stock appreciation rights may be settled in cash or shares of common stock or in any other form of payment, as determined by the Board and specified in the stock appreciation right agreement.

The plan administrator determines the term of stock appreciation rights granted under the 2024 Plan, up to a maximum of ten years. If a participant’s service relationship with the Company or any of its affiliates ceases for any reason other than cause, disability or death, the participant may generally exercise any vested stock appreciation right for a period of three months following the cessation of service. This period may be further extended in the event that exercise of the stock appreciation right following such a termination of service is prohibited by applicable securities laws. If a participant’s service relationship with the Company, or any of its affiliates, ceases due to disability or death, or a participant dies within a certain period following cessation of service, the participant or a beneficiary may generally exercise any vested stock appreciation right for a period of 12 months in the event of disability and 18 months in the event of death. In the event of a termination for cause, stock appreciation rights generally terminate immediately upon the occurrence of the event giving rise to the termination of the individual for cause. In No event may a stock appreciation right be exercised beyond the expiration of its term.

Performance Awards

The 2024 Plan permits the grant of performance awards that may be settled in stock, restricted stock, restricted stock units, cash or a combination thereof. Performance awards may be structured so that the consideration will be issued or paid only following the achievement of certain pre-established performance goals during a designated performance period. Performance awards that are settled in cash are not required to be valued in whole or in part by reference to, or otherwise based on, common stock.

The performance goals may be based on any measure of performance selected by the Board. The performance goals may be based on company-wide performance or performance of one or more business units, divisions, affiliates or business segments, and may be either absolute or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless specified otherwise by the Board when the performance award is granted, the Board will appropriately make adjustments in the method of calculating the attainment of performance goals, which may include the following actions: (a) exclude restructuring and other nonrecurring charges; (b) exclude exchange rate effects; (c) exclude the effects of changes to GAAP; (d) exclude the effects of any statutory adjustments to corporate tax rates; (e) exclude the effects of items that are “unusual” in nature or occur “infrequently” as determined under GAAP; (f) exclude the dilutive effects of acquisitions or joint ventures; (g) assume that any portion of our business which is divested achieved performance objectives at targeted levels during the balance of a performance period following such divestiture; (h) exclude the effect of any change in the outstanding shares of common stock 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; (i) exclude the effects of stock based compensation and the award of bonuses under our bonus plans; (j) exclude costs incurred in connection with potential acquisitions or divestitures that are required to be expensed under GAAP; and (k) exclude the goodwill and intangible asset impairment charges that are required to be recorded under GAAP.

Other Stock Awards

The plan administrator may grant other awards based in whole or in part by reference to shares of common stock. The plan administrator will set the number of shares under the stock award (or cash equivalent) and all other terms and conditions of such awards.

Dividends and Dividend Equivalents

Dividends and dividend equivalents may be paid or credited, as applicable, in respect of shares covered by a restricted stock award, a restricted stock unit award, a performance award or other awards that are not ISOs, NSOs or stock appreciation awards. Dividends and dividend equivalents credited in connection with an award will vest and be paid only if and to the extent that the underlying award is vested. Dividend equivalents may be credited either in cash or in shares of common stock having a fair market value equal to the amount of such dividends.

Changes to Capital Structure

In the event there is a specified type of change in our capital structure, such as a stock split, reverse stock split or recapitalization, appropriate adjustments will be made to (a) the class and maximum number of shares reserved for issuance under the 2024 Plan, (b) the class and maximum number of shares by which the share reserve may increase each year, (c) the class and maximum number of shares that may be issued on the exercise of ISOs and (d) the class and number of shares and exercise price, strike price or purchase price, if applicable, of all outstanding stock awards.

Change in Control Transactions

The following applies to stock awards under the 2024 Plan in the event of a change in control (as defined in the 2024 Plan), unless otherwise provided in a participant’s stock award agreement or other written agreement with the Company or one of its affiliates or unless otherwise expressly provided by the plan administrator at the time of grant.

In the event of a change in control, the Board will take one or more of the following actions with respect to awards, contingent upon the closing or completion of the change in control:

•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 award (including, but not limited to, an award to acquire the same consideration paid to the stockholders of the Company pursuant to the change in control);

•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);

•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 change in control 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 change in control), with such award terminating if not exercised (if applicable) at or prior to the effective time of the change in control;

•arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by the Company with respect to the award;

•cancel or arrange for the cancellation of the award, to the extent not vested or not exercised prior to the effective time of the change in control, in exchange for such cash consideration, if any, as the Board, in its sole discretion, may consider appropriate; or

•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 change in control, over (b) any exercise price payable by such holder in connection with such exercise. This payment may be zero dollars if the value of the property is equal to or less than the exercise price. These payments may be delayed to the same extent that payment of consideration to the holders of common stock in connection with the change in control 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, in particular with respect to its NEOs, each of whom entered into an Amended and Restated Change in Control Agreement on February 24, 2026 and which provide that (i) performance-based awards outstanding as of December 31, 2025 for which vesting is based on the achievement of one or more Company common stock price targets will be paid at the time of the change in control to the extent the price per share for the change in control transaction meets or exceeds the common stock price target(s) applicable to such performance-based awards (with unachieved portions forfeited); and (ii) the payment of any performance-based awards granted on or after January 1, 2026 will be determined in accordance with the treatment specified in the applicable award agreement.

Clawback Policies

All grants of awards under the 2024 Plan and all shares of common stock that may be issued in respect of awards that have been earned or have vested under the 2024 Plan will be subject to our Clawback Policy and Supplemental Clawback Policy as well as any other applicable policies that the Company may adopt. In addition, the Board may impose any other clawback or recoupment provisions in an award agreement, including but not limited to, a reacquisition right in respect of previously acquired shares of common stock or other cash or property upon a termination for cause.

Amendment, Suspension or Termination

The Board has the authority to amend the 2024 Plan at any time, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. Certain material amendments also require the approval of our stockholders. The Board has the authority to suspend or terminate the 2024 Plan at any time, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. The 2024 Plan will terminate on the ten-year anniversary of the effective date of the 2024 Plan. No ISOs may be granted after the earlier of the tenth anniversary of the date the Board adopts the 2024 Plan or the date stockholders approve the 2024 Plan. No stock awards may be granted under the 2024 Plan while it is suspended or after it is terminated but any awards granted prior to the date of such suspension or termination will generally remain in effect beyond the suspension or termination date.

New Plan Benefits

All awards granted under the 2024 Plan are made at the discretion of the Board or the plan administrator and the future benefits and amounts that will be received or allocated under 2024 Plan are not determinable at this time. Awards that were granted under the 2024 Plan in 2025 to our NEOs are described in the "Executive Compensation Tables" section and to our non-employee directors in the “Director Compensation” section in this Proxy Statement and other filings made by the Company with the SEC.

Federal Income Tax Consequences

The following is a summary of the principal U.S. federal income tax consequences to participants and the Company with respect to participation in the 2024 Plan. This summary is not intended to be exhaustive and does not discuss the income tax laws of any local, state or foreign jurisdiction in which a participant may reside. The information is based upon current federal income tax rules and therefore is subject to change when those rules change. Because the tax consequences to any participant may depend on his or her particular situation, each participant should consult the participant’s tax adviser regarding the federal, state, local and other tax consequences of the grant or exercise of an award or the disposition of stock acquired the 2024 Plan. The 2024 Plan is not qualified under the provisions of Section 401(a) of the Code and is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974, as amended. The Company’s ability to realize the benefit of any tax deductions described below depends on its generation of taxable income as well as the requirement of reasonableness and the satisfaction of the Company’s tax reporting obligations.

Nonstatutory Stock Options

Generally, there is no taxation upon the grant of a NSO if the stock option is granted with an exercise price equal to the fair market value of the underlying stock on the grant date. Upon exercise, a participant will recognize ordinary income equal to the excess, if any, of the fair market value of the underlying stock on the date of exercise of the stock option over the exercise price. If the participant is employed by the Company or one of its affiliates, that income will be subject to withholding taxes. The participant’s tax basis in those shares will be equal to their fair market value on the date of exercise of the stock option, and the participant’s capital gain holding period for those shares will begin on that date. Subject to the requirement of reasonableness and the satisfaction of a tax reporting obligation, the Company will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the participant.

Incentive Stock Options

The 2024 Plan provides for the grant of stock options that are intended to qualify as “incentive stock options,” as defined in Section 422 of the Code. Under the Code, a participant generally is not subject to ordinary income tax upon the grant or exercise of an ISO. If the participant holds a share received upon exercise of an ISO for more than two years from the date the stock option was granted and more than one year from the date the stock option was exercised, which is referred to as the required holding period, the difference, if any, between the amount realized on a sale or other taxable disposition of that share and the participant’s tax basis in that share will be long-term capital gain or loss. If, however, a participant disposes of a share acquired upon exercise of an ISO before the end of the required holding period, which is referred to as a disqualifying disposition, the participant generally will recognize ordinary income in the year of the disqualifying disposition equal to the excess, if any, of the fair market value of the share on the date of exercise of the stock option over the exercise price. However, if the sales proceeds are less than the fair market value of the share on the date of exercise of the stock option, the amount of ordinary income recognized by the participant will not exceed the gain, if any, realized on the sale. If the amount realized on a disqualifying disposition exceeds the fair market value of the share on the date of exercise of the stock option, that excess will be short-term or long-term capital gain, depending on whether the holding period for the share exceeds one year. For purposes of the alternative minimum tax, the amount by which the fair market value of a share of stock acquired upon exercise of an ISO exceeds the exercise price of the stock option generally will be an adjustment included in the participant’s alternative minimum taxable income for the year in which the stock option is exercised. If, however, there is a disqualifying disposition of the share in the year in which the stock option is exercised, there will be no adjustment for alternative minimum tax purposes with respect to that share. In computing alternative minimum taxable income, the tax basis of a share acquired upon exercise of an ISO is increased by the amount of the adjustment taken into account with respect to that share for alternative minimum tax purposes in the year the stock option is exercised. The Company is not allowed a tax deduction with respect to the grant or exercise of an ISO or the disposition of a share acquired upon exercise of an ISO after the required holding period. If there is a disqualifying disposition of a share, however, the Company will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the participant, subject to the requirement of reasonableness, and provided that either the employee includes that amount in income or the Company timely satisfies its reporting requirements with respect to that amount.

Restricted Stock Awards

Generally, the recipient of a restricted stock award will recognize ordinary income at the time the stock is received equal to the excess, if any, of the fair market value of the stock received over any amount paid by the recipient in exchange for the stock. If, however, the stock is not vested when it is received (for example, if the employee is required to work for a period of time in order to have the right to sell the stock), the recipient generally will not recognize income until the stock becomes vested, at which time the recipient will recognize ordinary income equal to the excess, if any, of the fair market value of the stock on the date it becomes vested over any amount paid by the recipient in exchange for the stock. A recipient may, however, file an election with the IRS, within 30 days following his or her receipt of the stock award, to recognize ordinary income, as of the date the recipient receives the award, equal to the excess, if any, of the fair market value of the stock on the date the award is granted over any amount paid by the recipient for the stock. The recipient’s basis for the determination of gain or loss upon the subsequent disposition of shares acquired from a restricted stock award will be the amount paid for such shares plus any ordinary income recognized either when the stock is received or when the stock becomes vested. Subject to the requirement of reasonableness and the satisfaction of a tax reporting obligation, the Company will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of the restricted stock award.

Restricted Stock Unit Awards

Generally, the recipient of a restricted stock unit award structured to comply with the requirements of Section 409A of the Code or an exception to Section 409A of the Code will recognize ordinary income at the time the stock is delivered equal to the excess, if any, of the fair market value of the stock received over any amount paid by the recipient in exchange for the stock. To comply with the requirements of Section 409A of the Code, the stock subject to a restricted stock unit award may generally only be delivered upon one of the following events: a fixed calendar date (or dates), separation from service, death, disability or a change in control. If delivery occurs on another date, unless the restricted stock unit award otherwise complies with or qualifies for an exception to the requirements of Section 409A of the Code (including delivery upon achievement of a performance goal), in addition to the tax treatment described above, the recipient will owe an additional 20% federal tax and interest on any taxes owed. The recipient’s basis for the determination of gain or loss upon the subsequent disposition of shares acquired from a restricted stock unit award will be the amount paid for such shares plus any ordinary income recognized when the stock is delivered. Subject to the requirement of reasonableness and the satisfaction of a tax reporting obligation, the Company will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of the restricted stock unit award.

Stock Appreciation Rights

Generally, if a stock appreciation right is granted with an exercise price equal to the fair market value of the underlying stock on the grant date, the recipient will recognize ordinary income equal to the fair market value of the stock or cash received upon such exercise. Subject to the requirement of reasonableness and the satisfaction of a tax reporting obligation, the Company will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of the stock appreciation right.

Tax Consequences to the Company

Compensation of Covered Employees

The ability of the Company to obtain a deduction for amounts paid under the 2024 Plan could be limited by Section 162(m) of the Code. Section 162(m) of the Code limits the Company’s ability to deduct compensation, for federal income tax purposes, paid during any year to a “covered employee” (within the meaning of Section 162(m) of the Code) in excess of $1,000,000.

Golden Parachute Payment

The ability of the Company (or the ability of one of its subsidiaries) to obtain a deduction for future payments under the 2024 Plan could also be limited by the golden parachute rules of Section 280G of the Code, which prevent the deductibility of certain “excess parachute payments” made in connection with a change in control of an employer-corporation.

Vote Required

The affirmative vote of a majority of the outstanding shares of common stock present in person, including by remote communication as applicable, or represented by proxy and entitled to vote on the matter is required to approve this proposal and the Plan Amendment. If you “abstain” from voting, it will have the same effect as an “against” vote. Broker non-votes will have No effect on this proposal.

The Board recommends a vote for “FOR” the approval of the Plan Amendment.