Company: NOTV
Filing Date: 2025-01-23
Form Type: DEF 14A
Source: 0001628280-25-002250
Chunk: 29

Company: Inotiv, Inc.
Filing Date: 2025-01-23
Form: DEF 14A
Chunk 29
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 share reserves for equity compensation while minimizing shareholder dilution. If the amendment to the 2024 Plan is not approved and we are unable to grant equity compensation in the future, we may need to consider other compensation alternatives, such as increasing cash compensation, and we would be at a severe disadvantage if we could not use equity awards covering a meaningful number of shares to recruit and retain key talent in this competitive market.

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We recognize that equity compensation awards dilute shareholder equity and must be used judiciously. Our equity compensation practices are designed to be in line with industry norms, and we believe our historical share usage has been responsible and mindful of shareholder interests. Certain provisions in the 2024 Plan are designed to protect our shareholders’ interests and to reflect corporate governance best practices, as described in further detail below.

Generally, we expect to continue making equity awards consistent with our practices over the past three years, and to maintain a market-competitive burn rate. We expect that shares of common stock available for future awards if the amendment to the 2024 Plan is approved would be sufficient for equity award grants for approximately two to three years, which the Committee believes is aligned with best practices and provides the Company with a reasonable buffer in case of extraordinary circumstances (e.g., stock price volatility, changes in hiring, acquisitions, etc.).

In setting the number of additional shares to be available for issuance under the proposed amendment, we considered our estimated competitive usage needs going forward for existing employees and potential new hires for approximately the next two years, with such timing dependent on a variety of factors, including the price of our shares and hiring activity during the next few years, forfeitures of outstanding awards, and noting that future circumstances may require us to change our current equity grant practices. We cannot predict our future equity grant practices, the future price of our shares or future hiring activity with any degree of certainty at this time, and the share reserve under the amendment to the 2024 Plan could last for a shorter or longer time.

Expectations regarding future share usage under the 2024 Plan are naturally based on a number of assumptions regarding factors such as future growth in the population of eligible participants, the rate of future compensation increases, the rate at which shares are returned to the 2024 Plan reserve through forfeitures, cancellations and the like, the level at which performance-based awards pay out, and our future stock price performance. While the Compensation Committee believes that the assumptions utilized are reasonable, future share usage will differ from current expectations to