Heartsciences Inc

This management proposal asks shareholders to approve an amendment to the Company’s 2023 Equity Incentive Plan to increase the pool of common shares available for issuance from the currently authorized amount (85,000 plus automatic annual “Evergreen” increases previously approved) to a flat 1,250,000 shares plus the Evergreen Shares. Management and the board frame this as a necessary tool to attract, retain and motivate employees, executives and directors through equity-based compensation, citing recent grants to executives and non-employee directors and prior plan amendments implemented by the board. Approval would authorize the company to continue to grant options, restricted stock units, and other awards at levels described in the proxy and would make the Plan effective for grants already approved by the board subject to shareholder approval. The board recommends a FOR vote, arguing that a larger share reserve supports recruitment and retention, aligns employee incentives with shareholder value, and provides flexibility to respond to competitive labor markets. Key governance considerations include potential dilution to existing shareholders, the broad discretion retained by the Plan administrator to grant awards, and the Evergreen provision that ties future increases to a percentage of outstanding common and preferred shares. Analysts should assess historical burn rate, plan overhang, recent grants to insiders, and whether the increase aligns with peer practices. The proposal is non-routine; it requires a majority of votes cast in favor to pass and broker non-votes will not count against it. The board’s recommendation is supported by disclosed awards to named executives and non-employee directors and the company’s argument that equity compensation is integral to its long-term strategy.

This management proposal requests shareholder approval to amend the Company’s Amended and Restated Certificate of Formation to add an officer exculpation provision permitted by recent amendments to the Texas Business Organizations Code. The amendment would limit officers’ monetary liability to the Company and its shareholders to the maximum extent allowed under Texas law, while preserving exceptions for breaches of the duty of loyalty, acts not in good faith or involving intentional misconduct or knowing violations of law, and transactions conferring improper personal benefit. Management argues that adopting the amendment will reduce nuisance or leverage-driven officer claims, lower litigation and insurance costs, and improve the Company’s ability to recruit and retain qualified officers; the board believes the limited scope balances accountability and protection. The proposal requires a majority of the combined voting power of common stock and convertible Series C preferred stock and the board recommends voting FOR. Analysts should consider governance trade-offs: the proposal narrows officers’ potential personal liability and may reduce deterrence against negligent conduct, though the provision follows state law and is similar to moves by peers. The proxy notes that abstentions and broker non-votes will be treated as votes against the amendment under the applicable standard.

This management proposal seeks shareholder authorization to adjourn the Annual Meeting, if a quorum is present but there are insufficient votes to approve one or more proposals, for the purpose of soliciting additional proxies. It is a procedural proposal intended to provide the board with flexibility to continue solicitation and avoid having certain proposals fail due to lack of votes. The board recommends a vote FOR the adjournment proposal, noting that it would be considered a routine matter and broker discretionary votes likely will be cast in favor. The proposal requires a majority of the shares present and entitled to vote and abstentions will be treated as votes against it. Analysts should view this as a routine governance mechanism; its practical effects depend on whether there are close votes on substantive proposals and the board’s willingness to continue solicitation.