Company: SNWV
Filing Date: 2025-07-10
Form Type: DEF 14A
Source: 0001140361-25-025486
Chunk: 24

Company: SANUWAVE Health, Inc.
Filing Date: 2025-07-10
Form: DEF 14A
Chunk 24
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 our compensation programs and mitigate the need for significant cash compensation. We consider equity compensation to be a vital element of our employee compensation program. We believe that, if stockholders approve the Amendment, the additional shares reserved under the 2024 Plan will be sufficient to enable us to grant equity awards under the 2024 Plan for approximately the next one or two years, based on the recent market prices of our common stock, and the anticipated use of equity awards as an incentive and retention tool. If the 2024 Plan is not approved, we would need to replace components of compensation previously awarded in equity with cash or with other instruments that may not necessarily support our goals of strengthening longer-term retention and aligning employee interests with those of our stockholders. Additionally, replacing equity awards with cash would increase our cash compensation expense and significantly deplete cash that could be better utilized towards other strategic purposes. |

| • | Balance appropriately our need to attract and retain talent with stockholder interests regarding dilution. We recognize the dilutive impact of our equity compensation programs on our stockholders, and we continuously strive to balance this concern with the competition for talent, competitive compensation practices, and the need to attract and retain talent. |

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TABLE OF CONTENTS

The 2024 Plan and the proposed Amendment to the 2024 Plan is included in this proxy statement as Appendix A. Dilution and Overhang In approving the increase in the number of shares authorized for issuance contemplated by the Amendment, the Compensation Committee and the Board considered the following:

| • | Share usage over the past several years and anticipated share usage for the next few years; |

| • | The fact that the number of shares remaining available for future issuance (approximately 70,722 shares as of the Record Date), would likely be insufficient to make awards of equity-based compensation after 2025 that we anticipate granting as part of annual grants to our executives and other employees; and |

| • | Potential dilution to our current stockholders as measured by run rate and overhang, as further discussed below. |

Based on these considerations, an additional 500,000 shares are being proposed to be made available for issuance under the 2024 Plan, which the Compensation Committee believes represents an appropriate increase at this time. While the use of long-term incentives in the form of equity awards is an important part of our compensation program, we recognize that equity awards dilute existing stockholders and are mindful of our responsibility to our stockholders to exercise judgment in the granting of equity awards. Our Compensation Committee regularly