DEF 14A 1 tmb-20231205xdef14a.htm DEF 14A

United States

Securities and Exchange Commission

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant ⌧

Filed by a Party other than the Registrant ◻

Check the appropriate box:


◻		Preliminary Proxy Statement
◻		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
⌧		Definitive Proxy Statement
◻		Definitive Additional Materials
◻		Soliciting Material Pursuant to §240.14a-12

eGain Corporation

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):


⌧		No fee required.
◻		Fee paid previously with preliminary materials.
◻		Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

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eGain

Corporation

1252 Borregas Avenue

Sunnyvale, CA 94089

(408) 636-4500

October 12, 2023

Dear Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders, or the Annual Meeting, of eGain Corporation that will be held on December 5, 2023, at 1:00 p.m., Pacific Time at eGain Corporation — 1252 Borregas Avenue, Sunnyvale, CA 94089.

The formal notice of the Annual Meeting and the Proxy Statement has been made a part of this invitation.

After reading the Proxy Statement, please vote at your earliest convenience by following the instructions in the Notice of Internet Availability of Proxy Materials (“Notice”) you received in the mail, to ensure that your shares will be represented. YOUR SHARES MAY NOT BE VOTED WITH RESPECT TO EACH OF THE PROPOSALS UNLESS YOU FOLLOW THE INSTRUCTIONS IN THE NOTICE.

In accordance with the rules of the Securities and Exchange Commission, we have opted to furnish proxy materials, including the Proxy Statement and eGain’s 2023 Annual Report to Stockholders on Form 10-K, to our stockholders by providing access to such documents on the Internet instead of mailing printed copies.

The Board of Directors and management look forward to seeing you at the Annual Meeting.


	Sincerely yours,

	Ashutosh Roy
	Chief Executive Officer

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eGain Corporation

Notice of Annual Meeting of Stockholders

to be held December 5, 2023

To the Stockholders of eGain Corporation:

The Annual Meeting of Stockholders, or the Annual Meeting, of eGain Corporation, or eGain or the Company, a Delaware corporation, will be held on December 5, 2023, at 1:00 p.m., Pacific Time at eGain Corporation — 1252 Borregas Avenue, Sunnyvale, CA 94089.

We are holding this Annual Meeting for the following purposes:

to elect directors to serve until the 2024 annual meeting of stockholders or until their successors are elected and qualified;

to approve the amendment and restatement to eGain’s Amended and Restated 2005 Stock Incentive Plan to increase the number of shares of common stock reserved for issuance thereunder by 1,000,000 shares to 8,460,000 shares and to extend the term of the Amended and Restated 2005 Stock Incentive Plan through October 11, 2033;

to approve, on a non-binding advisory basis, of the compensation paid by us to our named executive officers;

to ratify the appointment of BPM LLP, as eGain’s Independent Registered Public Accounting Firm; and

to transact such other business as may properly come before the Annual Meeting and any adjournment of the Annual Meeting.

Stockholders of record as of the close of business on October 10, 2023, are entitled to notice of and to vote at the Annual Meeting and any adjournment thereof. A complete list of stockholders entitled to vote at the Annual Meeting will be available at eGain’s offices, 1252 Borregas Avenue, Sunnyvale, California 94089, ten days prior to the Annual Meeting. This list will also be available for examination during the Annual Meeting.

It is important that your shares are represented at the Annual Meeting. Even if you plan to attend the Annual Meeting, please vote at your earliest convenience by following the instructions in the Notice you received in the mail.


	By Order of the Board of Directors,

	Stanley F. Pierson
	Secretary

Sunnyvale, California

October 12, 2023

Important Notice Regarding the Availability of Proxy Materials

for the Annual Meeting of Stockholders to be held on December 5, 2023.

The Proxy Statement for our Annual Meeting and eGain’s Annual Report to Stockholders on Form 10-K for the fiscal year ended June 30, 2023 (the “2023 Annual Report”) are available at http://www.edocumentview.com/EGAN.

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TABLE OF CONTENTS


	Page
PROXY STATEMENT	1


PROPOSAL 1 ELECTION OF DIRECTORS	3
Nominees	3
Director Independence	4
Board Leadership	5
Board of Directors - Risk Oversight	5
Board Meetings and Committees	6
Stockholder Communications with the Board of Directors	7
Code of Ethics	7
Director Qualifications	7
Identifying and Evaluating Director Nominees	8
2023 Director Compensation	8
Compensation Committee Interlocks and Insider Participation	9
Stock Performance Graph	10

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	11

EXECUTIVE COMPENSATION	13
Executive Officers	13
Compensation Overview	14

COMPENSATION COMMITTEE REPORT	19
2023 Summary Compensation Table	20
Outstanding Equity Awards at Fiscal Year End	21
Option Exercises During Fiscal Year 2023	21
Equity Awards Issued Subsequent to Fiscal Year 2023	21
Pay Versus Performance	21

PROPOSAL 2 AMENDMENT TO THE AMENDED AND RESTATED 2005 STOCK INCENTIVE PLAN	24
Key Data	24
Summary of the 2005 Stock Incentive Plan	24
Summary of Federal Income Tax Consequences	28
Section 409A	29
Tax Effect	29
Equity Compensation Plan Information	30

PROPOSAL 3 NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION	31
PROPOSAL 4 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	32
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS	33
RELATED PARTY TRANSACTIONS	34
Procedures for Approval of Related Party Transactions	34

STOCKHOLDER PROPOSALS FOR THE 2023 ANNUAL MEETING	35
OTHER MATTERS	35
Appendix A - 2005 Stock Incentive Plan

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eGain Corporation

1252 Borregas Avenue,

Sunnyvale, California 94089

PROXY STATEMENT

This Proxy Statement is furnished in connection with the solicitation by the Board of Directors of eGain Corporation, a Delaware corporation, referred to as eGain or the Company, of proxies in the accompanying form to be used at the Annual Meeting of Stockholders of eGain (the “Annual Meeting”), to be held at eGain Corporation—1252 Borregas Avenue, Sunnyvale, CA 94089, on December 5, 2023 at 1:00 p.m., Pacific Time, and any postponement or adjournment thereof. The shares represented by the proxies received in response to this solicitation and not properly revoked will be voted at the Annual Meeting in accordance with the instructions therein. A stockholder who has given a proxy may revoke it at any time before it is exercised by filing with the Secretary of eGain a written revocation or a duly executed proxy bearing a later date or by voting at the Annual Meeting. On the matters coming before the Annual Meeting for which a choice has been specified by a stockholder by means of the ballot on the proxy, the shares will be voted accordingly. If no choice is specified, the shares will be voted in accordance with the recommendations of the Board of Directors set forth below.

The Board of Directors recommends that you vote:

●

“FOR” the election of each of the nominated directors to serve until the 2024 annual meeting of stockholders or until their successors are elected and qualified;

●

“FOR” the proposal to approve the amendment and restatement to eGain’s Amended and Restated 2005 Stock Incentive Plan to increase the number of shares of common stock reserved for issuance thereunder by 1,000,000 shares to 8,460,000 shares and to extend the term of the Amended and Restated 2005 Stock Incentive Plan through October 11, 2033;

●

“FOR” the proposal to approve, on a non-binding advisory basis, of the compensation paid by us to our named executive officers; and

●

“FOR” the ratification of the appointment of BPM LLP, as eGain’s Independent Registered Public Accounting Firm.

Stockholders of record at the close of business on October 10, 2023 (the “Record Date”), are entitled to vote at the Annual Meeting. As of the close of business on the Record Date, eGain had 31,299,166 shares of common stock, par value $0.001 per share (“Common Stock”), outstanding. The presence in person or by proxy of the holders of a majority of eGain’s outstanding shares of Common Stock entitled to vote constitutes a quorum for the transaction of business at the Annual Meeting. Each holder of Common Stock is entitled to one vote for each share held as of the Record Date.

Directors are elected by a plurality vote with stockholders having the option to either vote “for” each director or to “withhold” their vote. The five nominees for director who receive the most “for” votes will be elected to serve as a director. A “withhold” vote as to any director nominee will have no effect on the vote’s outcome because the candidates who receive the highest number of affirmative votes are elected, Broker non-votes are not considered votes cast and will have no effect on the election of the nominees.

Other proposals submitted for stockholder approval at the Annual Meeting will be decided by the affirmative vote of the majority of the shares present in person or represented by proxy at the Annual Meeting. Abstentions with respect to any proposal are treated as shares present or represented and entitled to vote on that proposal and thus have the same effect as votes “against.” If a broker which is the record holder of shares indicates on a proxy that it does not have discretionary authority to vote on a particular proposal as to such shares, or if shares are not voted in other circumstances in which proxy authority is defective or has been withheld with respect to a particular proposal, these non-voted shares will be counted for quorum purposes and will have the same effect as votes “against,” because approval requires an absolute percentage of affirmative votes.

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The expense of printing, mailing proxy materials and soliciting proxies will be borne by eGain. Our directors, and certain of our officers and employees in the ordinary course of their employment, may solicit proxies by mail, internet, facsimile, in person, email or other online methods. At this time, we have not engaged a proxy solicitor. If we do engage a proxy solicitor, we will pay the customary costs associated with such engagement. eGain will reimburse brokerage firms and others for their reasonable expenses in forwarding solicitation materials to beneficial owners of eGain’s Common Stock. No additional compensation will be paid to such persons for such solicitation.

In accordance with the rules of the Securities and Exchange Commission (the “SEC”), we have opted to furnish proxy materials, including this Proxy Statement and the 2023 Annual Report to our stockholders by providing access to such documents on the Internet instead of mailing printed copies. Accordingly, the Notice is being mailed to stockholders on or about October 13, 2023.

You will be able to attend the Annual Meeting at eGain Corporation—1252 Borregas Avenue, Sunnyvale, CA 94089 on December 5, 2023 at 1:00 p.m., Pacific Time. A complete list of stockholders entitled to vote at the Annual Meeting will be available for examination during the Annual Meeting upon request.

IMPORTANT

Please vote at your earliest convenience by following the instructions in the Notice you received in the mail.

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PROPOSAL 1

ELECTION OF DIRECTORS

Nominees

Our Board of Directors proposes the election of five directors of eGain to serve until the 2024 annual meeting of stockholders or until their successors are elected and qualified. If any nominee is unable or declines to serve as a director at the time of the Annual Meeting, an event not now anticipated, proxies will be voted for any nominee designated by our Board of Directors to fill the vacancy. There are no familial relationships between any eGain’s directors or executive officers.

The names of the nominees and certain biographical information about them are set forth below:

Ashutosh Roy, age 57, co-founded eGain and has served as Chief Executive Officer and a Director of eGain since September 1997 and as President since October 2003. From May 1995 through April 1997, Mr. Roy served as Chairman of WhoWhere? Inc., an Internet-services company co-founded by Mr. Roy. From June 1994 to April 1995, Mr. Roy worked at Parsec Technologies, a call center company based in New Delhi, India, which he co-founded. From August 1988 to August 1992, Mr. Roy worked as a software engineer at Digital Equipment Corporation, a major company in the computer industry at the time. Mr. Roy holds a B.S. in Computer Science from the Indian Institute of Technology, New Delhi, a Master’s degree in Computer Science from Johns Hopkins University and an M.B.A. from Stanford University. We believe that Mr. Roy’s qualifications to serve on our Board of Directors include his industry experience and deep knowledge of eGain from his position as a founder of our Company and as our Chief Executive Officer for over 20 years.

Gunjan Sinha, age 56, co-founded eGain and has served as a Director of eGain since its inception in September 1997 and as President of eGain from January 1998 until September 2003. Mr. Sinha currently has served as eGain’s Lead Independent Director since September 2021. Since January 2004, Mr. Sinha has served as Executive Chairman of MetricStream Inc., a supplier of software applications for enterprise quality and compliance management. From May 1995 through April 1997, Mr. Sinha served as President of WhoWhere? Inc., an internet service company co-founded by Mr. Sinha. Prior to co-founding WhoWhere? Inc., Mr. Sinha was a hardware developer of multiprocessor servers at Olivetti Advanced Technology Center. In June 1994, Mr. Sinha co-founded Parsec Technologies, Inc. Mr. Sinha has also served as Chairman of Regalix Inc., a digital marketing company, since 1998 and as Chairman of Open Growth, LLC, a technology holding company, since January 2014. Mr. Sinha holds a degree in Computer Science from the Indian Institute of Technology, New Delhi, a master’s degree in Computer Science from the University of California, Santa Cruz, and a master’s degree in Engineering Management from Stanford University. We believe that Mr. Sinha’s qualifications to serve on our Board of Directors include his extensive experience founding, managing and investing in technology companies and deep knowledge of the Company gained from his position as a founder and former officer of the Company.

Phiroz P. Darukhanavala, Ph.D., age 75, also known as Daru, has served as a member of eGain’s Board of Directors since September 2000. Dr. Darukhanavala has an extensive global background in the oil and gas industry including exploration, production, refining, retail and marketing; holding several technology, operational and strategy leadership positions at BP p.l.c. (NYSE: BP), and multinational oil and gas company (“BP”). From June 2010 to February 2015, he was the Vice President and Chief Technology Officer at BP. Previously, Dr. Darukhanavala was Vice President, Merger and Integration at BP where he led the IT integration programs resulting from the merger of BP, Amoco and Arco. Earlier in his BP career, Dr. Darukhanavala was the IT Functional Chief at BP Exploration in London, chief information officer for BP Retail, chief information officer of BP Alaska, chief information officer for BP Exploration US and Head of Scientific Systems and Operations Research at SOHIO. In addition to his contributions running large scale, complex businesses, he has gained a high-level strategic perspective as a director for several companies, as well as board roles for high profile industry associations and universities. Dr. Darukhanavala holds a Ph.D. and a M.S. degree in Operations Research from Case Western Reserve University in Cleveland, Ohio and a BS in Mechanical Engineering from IIT (Bombay). We believe that Dr. Darukhanavala’s qualifications to serve on our Board of Directors include his business financial expertise and his extensive management experience.

Brett Shockley, age 64, joined eGain’s Board of Directors in January 2016 and has served as eGain’s Lead Independent Director from September 2017 to August 2021. Mr. Shockley currently provides strategy and corporate development consulting for software and cloud-based services companies. From August 2008 to December 2014, Mr. Shockley held numerous positions at Avaya Inc., a global provider of business collaboration and communications solutions, including

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Senior Vice President and General Manager of Software and Emerging Technologies, and Senior Vice President of Corporate Development, Strategy and Chief Technology Officer. Before joining Avaya, Mr. Shockley was the Chief Executive Officer and co-founder of Spanlink Communications Inc., a contact center software and services business, which he brought through an initial public offering on Nasdaq. In 2007, Mr. Shockley co-founded Calabrio, a workforce optimization software company which was acquired by KKR & Co. Inc. (NYSE: KKR) in 2016. Prior to Calabrio, Mr. Shockley was the Vice President and General Manager of the Customer Contact Business Unit of Cisco Systems Inc., a multinational technology company. Mr. Shockley currently serves as a member of the board of directors of Spok Holdings, Inc. (Nasdaq: SPOK), a healthcare communications company. In addition to holding patents in social networking and telecommunications, Mr. Shockley has an M.B.A. in Marketing from the University of Minnesota’s Carlson School of Management and a bachelor’s degree in Mechanical Engineering from the University of Minnesota’s Institute of Technology. Mr. Shockley attended Stanford University’s Directors Consortium in 2017. Mr. Shockley was a 2007 Ernst & Young Entrepreneur of the Year award winner, University of Minnesota Alumni Lifetime Achievement award winner in 2006 and 2008 Minnesota High Tech Association Emerging Technology Company award winner. We believe that Mr. Shockley’s qualifications to serve on our Board of Directors include his extensive experience founding, managing, investing and serving as a director in public and private technology companies, and deep knowledge of the Company’s industry.

Christine Russell, age 74, joined eGain’s Board of Directors in February 2017. From July 2018 to August 2020, Ms. Russell served as the Chief Financial Officer and Executive VP of PDF Solutions, Inc. (Nasdaq: PDFS), a company that offers yield process software for the semiconductor industry. Prior to that, she was the Chief Financial Officer of Uni-Pixel, Inc., a company that develops and markets high performance metal mesh capacitive touch sensors, from May 2015 to March 2018, the Chief Financial Officer of Vendavo, Inc., a SaaS model pricing optimization enterprise software company, from May 2014 to March 2015, and the Chief Financial Officer of Evans Analytical Group, a leading international provider of materials characterization and microelectronic failure analysis and “release to production” services, from May 2009 to September 2013. Ms. Russell has served as a director and chair of the audit committee of the board of directors of QuickLogic Corporation (Nasdaq: QUIK), a semiconductor IP company, since June 2005, and as a director and audit committee member of the board of directors of AXT Inc. (Nasdaq: AXTI), a material science company, since December 2019. Ms. Russell is a director of Silicon Valley Directors’ Exchange (SVDX) and also served as president of Financial Executives International (Silicon Valley Chapter), and as an emeritus member of the business school advisory board at Santa Clara University, Leavey School of Business. Ms. Russell holds a B.A. degree and an M.B.A. in finance from Santa Clara University. We believe that Ms. Russell’s extensive experience, including serving as Chief Financial Officer and in other finance positions at five publicly traded companies, two private equity-backed firms and a number of venture capital backed companies for over the past 30 years qualifies her to serve on our Board of Directors.

Director Independence

Our Board of Directors has determined that, except for Mr. Roy, each individual who currently serves as a member of our Board of Directors is an “independent director” within the meaning of the rules of The Nasdaq Stock Market (“Nasdaq”) and the Securities and Exchange Commission (the “SEC”).

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Board Diversity Matrix (as of October 10, 2023)

Total Number of Directors: 5


	Female	Male	Non-Binary	Did Not Disclose Gender
Part I: Gender Identity
Directors	1	4
Part II: Demographic Background
African American or Black
Alaskan Native or Native American
Asian		3
Hispanic or Latinx
Native Hawaiian or Pacific Islander
White		1
LGBTQ+
Did Not Disclose Demographic Background	1

Board Leadership

The Board of Directors does not have a policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board, as the Board of Directors believes it is in the best interests of eGain and its stockholders to evaluate such roles from time to time based on the composition of the Board of Directors and on the input from our independent directors. The Board of Directors has determined that having eGain’s Chief Executive Officer serve as Chairman of the Board is in the best interests of the Company’s stockholders at this time. Our Board of Directors believes that this structure makes the best use of the Chief Executive Officer’s extensive knowledge of the Company and its industry, as well as fosters greater communication between the Company’s management and the Board of Directors.

The Board of Directors also recognized the importance of strong independent board leadership. For that reason, the Board of Directors established the position and responsibilities of Lead Independent Director. Mr. Sinha currently serves as Lead Independent Director. Responsibilities of the Lead Independent Director include presiding over board meetings in the absence of the Chairman of the Board, serving as a liaison between the Chairman of the Board and the independent directors, acting as a liaison to stockholders under appropriate circumstances, and performing such other functions and responsibilities as requested by the Board of Directors from time to time.

Board of Directors - Risk Oversight

General Risks

Companies, including eGain, face a variety of risks, including credit risk, liquidity risk, currency exchange risk and operational risk. For a detailed discussion of these risks, we encourage you to review the 2023 Annual Report. Our Board of Directors believes an effective risk management system will timely identify the material risks that eGain faces and communicate necessary information with respect to material risks to senior executives. As appropriate, our Board of Directors or its relevant committees have in the past and will in the future implement risk management strategies consistent with the Company’s risk profile and integrate risk management into the Company’s decision-making.

Our Board of Directors retains ultimate oversight over the Company’s risk management. Our Audit Committee takes an active role in overseeing company-wide risk management and discusses risk management processes with our Board of Directors. The Compensation Committee also oversees the Company’s compensation policies and practices to ensure that the Company’s compensation policies and practices do not motivate imprudent risk taking. In addition, our Board of Directors encourages management to promote a corporate culture that incorporates risk management into the Company’s corporate strategy and day-to-day business operations. Our Board of Directors, with the input of the Company’s executive officers, assesses likely areas of future risk for the Company on an on-going basis.

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Cybersecurity and Information Security Risks

Our Board of Directors is updated periodically on our Information Security Program and any recommended changes, cybersecurity policies and practices, ongoing efforts to improve security, including driving continuous information security awareness related learning and education for employees through new hire and annual information security awareness training, and offering other dynamic resources as well as on our efforts regarding significant cybersecurity events.

The Company’s management team, specifically through its Vice President, Cloud, IT & Information Security, has in the past provided regular reports to the Board of Directors on cyber threats, incident response, and progress towards internal goals. These reports address a range of topics, including the threat environment, updates on technology trends, policies and practices, and specific and ongoing efforts to prevent, detect, and respond to internal and external critical threats.

Our Board of Directors reviews briefings concerning the Company’s information security and technology risks (including cyber security). Pursuant to the Board of Directors’ instruction, management regularly attends weekly meetings with the information security team and reports on applicable risks to the Board of Directors, with additional review or reporting on risks conducted as needed or as requested by the Board of Directors and its committees. We devote significant resources to protecting and continuing to improve the security of computer systems, software, networks and other technology assets as evidenced by our company wide SOC 2 report, HITRUST CSF Certified Status, and PCI DSS Compliance. Our security efforts are designed to protect against, among other things, cybersecurity attacks by unauthorized parties attempting to obtain access to confidential information, destroy data, disrupt or degrade service, sabotage systems or cause other damage.

Board Meetings and Committees

Our Board of Directors held four regular meetings and one special meeting during fiscal year 2023. Each director attended or participated in 75% or more of the meetings of our Board of Directors and of the committees on which such director served during fiscal year 2023. Four directors attended the 2022 annual meeting of stockholders virtually. While we do not have a formal policy on attendance at our annual meeting of stockholders, we encourage each of the members of our Board of Directors to attend our annual meeting of stockholders.

Our Board of Directors has appointed a Compensation Committee, a Stock Option Committee, a Nominating and Corporate Governance Committee and an Audit Committee. Copies of the charters of the Compensation Committee, Nominating and Corporate Governance Committee and Audit Committee are available on our website at http://www.egain.com/company/investors/governance-documents/.

The members of the Compensation Committee for fiscal year 2023 were independent directors Brett Shockley and Dr. Phiroz P. Darukhanavala, with Brett Shockley as the chair of the Compensation Committee. The Compensation Committee held one meeting during fiscal year 2023. The Compensation Committee’s functions are to assist in the implementation of, and provide recommendations with respect to, general and specific compensation policies and practices of eGain. The Compensation Committee operates under the Compensation Committee Charter adopted by our Board of Directors.

The members of the Stock Option Committee for the fiscal year 2023 were Ashutosh Roy and Gunjan Sinha. The Stock Option Committee met on twelve occasions during fiscal year 2023. The Stock Option Committee’s functions are to grant options to non-officer employees and other service providers of the Company, consistent with eGain’s compensation policies and practices.

The members of the Nominating and Corporate Governance Committee for fiscal year 2023 were independent directors Gunjan Sinha and Christine Russell, with Gunjan Sinha as the chair of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee held one meeting during fiscal year 2023. The Nominating and Corporate Governance Committee’s primary functions are to seek and recommend to our Board of Directors qualified candidates for election to our Board of Directors and to oversee matters of corporate governance, including the evaluation of our Board of Directors’ performance and processes as well as the assignment and rotation of members on the committees established by the Board of Directors. The Nominating and Corporate Governance Committee operates under the Nominating and Corporate Governance Committee Charter adopted by our Board of Directors.

The members of the Audit Committee for fiscal year 2023 were independent directors Christine Russell, Brett Shockley, and Dr. Phiroz P. Darukhanavala. Christine Russell is the chair of the Audit Committee and is currently the “audit

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committee financial expert” as defined by the rules of the SEC and an “independent director” under the rules of Nasdaq. The Audit Committee held four meetings during fiscal year 2023. The Audit Committee’s functions are to review the scope of the annual audit, monitor the Independent Registered Public Accounting Firm’s relationship with eGain, advise and assist the Board of Directors in evaluating the Independent Registered Public Accounting Firm’s examination, supervise eGain’s financial and accounting organization and financial reporting, and nominate, for approval of the Board of Directors, the Independent Registered Public Accounting Firm whose duty it is to audit the financial statements of eGain for the fiscal year for which it is appointed. The Audit Committee operates under the Audit Committee Charter adopted by our Board of Directors.

Stockholder Communications with the Board of Directors

If you wish to communicate with the Board of Directors, you may send your communications in writing to: Secretary, eGain Corporation, 1252 Borregas Avenue, Sunnyvale, California 94089. You must include your name and address in the written communication and indicate whether or not you are a stockholder of the Company. The Secretary will review any communications received from a stockholder, and all material communications from stockholders will be forwarded to the appropriate director or directors or committee of the Board of Directors based on the subject matter.

Code of Ethics

Our Board of Directors approved a code of ethics applicable to the Board of Directors, senior management, including financial officers, and all other employees. The Code of Ethics and Business Conduct (the “Code of Ethics”), includes standards intended to deter wrongdoing and promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; full, fair, accurate, timely and understandable disclosure in reports filed with the SEC; compliance with laws; prompt internal reporting of violations of the Code of Ethics; and accountability for the adherence to the Code of Ethics. The Code of Ethics is available on our website at http://www.egain.com/company/investors/governance-documents/. Copies of the Code of Ethics are also available in print upon written request to: Secretary, eGain Corporation, 1252 Borregas Avenue, Sunnyvale, California 94089.

Director Qualifications

The Nominating and Corporate Governance Committee periodically reviews with our Board of Directors the appropriate skills and characteristics required for members of the Board of Directors given the current composition of the Board of Directors. Although we have no formal diversity policy for members of our Board of Directors, the Board of Directors and the Nominating and Corporate Governance Committee believe that our Board of Directors should be comprised of individuals who have a diversity of backgrounds, leadership qualities, a record of success in their arena of activity and who can make substantial contributions to the operations of the Board of Directors. The assessment of Board of Directors candidates includes, but is not limited to, consideration of relevant industry experience, financial experience, general business experience and compliance with independence and other qualifications necessary to comply with any applicable corporate and securities laws and the rules and regulations thereunder. Specific consideration is also given to: contributions valuable to the business community; personal qualities of leadership, character, and judgment: whether the candidate possesses and maintains throughout his or her service on the Board of Directors, a reputation in the community at large, of integrity, competence and adherence to the highest ethical standards; relevant knowledge and diversity of background and experience in such things as business, software development, manufacturing, technology, finance and accounting, marketing, international business, government and the like; and whether the candidate is free of conflicts and has the time required for preparation, participation and attendance at all meetings. There are no formal minimum criteria for director nominees. The Nominating and Corporate Governance Committee does, however, believe it is appropriate for at least one, and preferably multiple, members of the Board of Directors to meet the criteria for an “audit committee financial expert,” as defined by SEC rules, and that a majority of the members of the Board of Directors meet the definition of “independent director” under the rules of Nasdaq. The Nominating and Corporate Governance Committee also believes it is appropriate for certain members of management to serve on the Board of Directors. When evaluating a candidate for the Board of Directors, the Nominating and Corporate Governance Committee does not assign specific weight to any of these factors nor does it believe that all of the criteria necessarily apply to every candidate. A director’s qualifications in light of the above-mentioned criteria are considered at least each time the director is nominated or re-nominated for Board of Directors membership.

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Identifying and Evaluating Director Nominees

The Nominating and Corporate Governance Committee considers candidates for Board of Directors membership suggested by members of the Board of Directors and management of eGain. The Nominating and Corporate Governance Committee will consider persons recommended by eGain’s stockholders in the same manner as a nominee recommended by members of the Board of Directors or management. A stockholder who wishes to suggest a prospective nominee for the Board of Directors should notify eGain’s Secretary or any member of the Nominating and Corporate Governance Committee in writing with any supporting material the stockholder considers appropriate. After completing the evaluation and review, the Nominating and Corporate Governance Committee makes a recommendation to our full Board of Directors as to the person who should be nominated to the Board of Directors, and our Board of Directors considers the nominee after evaluating the recommendation and report of the Nominating and Corporate Governance Committee. Each director candidate recommended for election at this year’s Annual Meeting is an existing director, seeking re-election to the Board of Directors.

In addition, our Bylaws contain provisions that address the process by which a stockholder may nominate an individual to stand for election to our Board of Directors at our annual meeting of stockholders. In order to nominate a candidate for director, a stockholder must give timely notice in writing to eGain’s Secretary and otherwise comply with the provisions of our Bylaws. To be timely, our Bylaws provide that we must have received the stockholder’s notice not less than 120 days prior to any meeting called for the election of directors; however, if we have not given 100 days’ notice of such meeting, we must have received the stockholder’s notice not later than the close of business on the 7th day following the day on which notice was given. Information required by the Bylaws to be in the notice includes (a) the name, age, business address and, if known, residence address of each nominee proposed in such notice, (b) the principal occupation or employment of each such nominee, (c) the number of shares of our Common Stock which are beneficially owned by each such nominee and by the nominating stockholder, and (d) any other information concerning the nominee that must be disclosed of nominees in proxy solicitations regulated by Regulation 14A of the Securities Exchange Act of 1934, as amended.

In addition to satisfying the deadlines in our Bylaws, a stockholder who intends to solicit proxies pursuant to Rule 14a-19 in support of nominees submitted under these advance notice provisions for the 2024 annual meeting of stockholders must notify our Secretary in writing not later than the close of business (5:00 p.m. Pacific Time) on October 6, 2024.

Stockholder nominations must be made in accordance with the procedures outlined in, and include the information required by, our Bylaws and must be addressed to: Secretary, eGain Corporation, 1252 Borregas Avenue, Sunnyvale, California 94089.

2023 Director Compensation

The non-employee members of the Board of Directors receive compensation in the form of annual cash compensation and equity compensation from time to time. Non-employee directors receive an annual cash retainer of $50,000, payable in quarterly installments, and Mr. Sinha receives an additional annual cash fee of $10,000, payable in quarterly installments, for his service as Lead Independent Director. eGain last granted options to purchase Common Stock to directors in September 2021, which options vest over four years. Directors are also reimbursed for their expenses for each meeting attended.

The following table details the compensation paid to non-employee directors during fiscal year 2023:


Name	Fees earned or paid in cash ($)	Option awards ($) (1)	Total ($)
Gunjan Sinha	60,000	86,173	146,173
Phiroz P. Darukhanavala, Ph.D.	50,000	86,173	136,173
Brett Shockley	50,000	86,173	136,173
Christine Russell	50,000	86,173	136,173

(1)

Amounts shown in this column do not reflect the dollar amount actually received by the named executive officer, and instead represent the compensation recognized for financial reporting purposes for fiscal year 2023, in accordance with Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”)

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718, Compensation—Stock Compensation, excluding forfeitures, utilizing the assumptions discussed in Note 5 to our consolidated financial statements in the 2023 Annual Report.

The following table provides information on the outstanding option awards for each of the non-employee directors as of June 30, 2023:


	Number of Securities Underlying Unexercised Options (#)		Option Exercised	Option Expiration
Name	Exercisable	Unexercisable	Price ($)	Date
Gunjan Sinha	500	—	13.40	11/8/2023
	500	—	5.31	11/7/2024
	500	—	4.34	11/6/2025
	70,000	—	2.50	9/19/2027
	17,500	22,500	11.36	9/1/2031
Total	89,000	22,500

Phiroz P. Darukhanavala, Ph.D.	500	—	13.40	11/8/2023
	500	—	5.31	11/7/2024
	500	—	4.34	11/6/2025
	70,000	—	2.50	9/19/2027
	17,500	22,500	11.36	9/1/2031
Total	89,000	22,500

Brett Shockley	42,267	—	2.50	9/19/2027
	17,500	22,500	11.36	9/1/2031
Total	59,767	22,500

Christine Russell	10,000	—	1.80	2/24/2027
	26,250	—	2.50	9/19/2027
	17,500	22,500	11.36	9/1/2031
Total	53,750	22,500

Compensation Committee Interlocks and Insider Participation

Mr. Shockley and Dr. Darukhanavala, each of whom are non-employee directors, served as members of the Compensation Committee in fiscal year 2023. None of eGain’s executive officers serves as a member of the Board of Directors or Compensation Committee of any entity that has one or more of its executive officers serving as a member of eGain’s Board of Directors or Compensation Committee.

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Stock Performance Graph

The following information is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934 or to the liabilities of Section 18 of the Securities Exchange Act of 1934, and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent we specifically incorporate it by reference into such a filing.

Set forth below is a line graph showing the cumulative total stockholder return (change in stock price plus reinvested dividends) assuming the investment of $100 on June 30, 2018, in each of our Common Stock, the Nasdaq Market Index and the S&P Software & Services Select Industry Index for the period commencing on June 30, 2018 and ending on June 30, 2023. The comparisons in the table are required by the SEC and are not intended to forecast or be indicative of future performance of our Common Stock.

Comparison of Cumulative Total Return Among eGain Corporation,
Nasdaq Market Index and S&P Software & Services Select Industry Index


	6/30/2018	6/30/2019	6/30/2020	6/30/2021	6/30/2022	6/30/2023
eGain Corporation	$ 100.00	$ 53.91	$ 73.58	$ 76.03	$ 64.57	$ 49.60
Nasdaq Composite	$ 100.00	$ 107.78	$ 136.51	$ 198.71	$ 152.16	$ 191.93
S&P Software & Services Select Industry Index	$ 100.00	$ 119.54	$ 139.58	$ 215.60	$ 140.14	$ 168.74

The Board of Directors recommends a vote “FOR” the election of each of the nominated directors to serve until the 2024 annual meeting of stockholders or until their successors are elected and qualified.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information concerning the beneficial ownership of Common Stock of eGain as of October 10, 2023, for the following:

●each person or entity who is known by eGain to own beneficially more than 5% of the outstanding shares of Common Stock;

●each of our named executive officers included in the 2023 summary compensation table; and

●each of eGain’s current directors and executive officers as a group.

Unless otherwise noted, the address of each named beneficial owner is that of eGain.

The percentage ownership is based on 31,299,166 shares of eGain Common Stock outstanding as of October 10, 2023. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we deemed outstanding shares of Common Stock subject to options and warrants held by that person (and only that person) that are currently exercisable or exercisable within sixty (60) days after October 10, 2023. Unless otherwise indicated below, the persons and entities named in the table have sole voting and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable. In addition to our Chief Executive Officer and Chief Financial Officer, we had only one additional named executive officers during fiscal year 2023.


Name and address of beneficial owner	Common Stock beneficially owned (Shares)	Common Stock beneficially owned (%)
Other 5% Stockholders:
Oaktop Capital Management II, L.P. (1)	2,671,843	8.5
David L. Kanen (2)	2,063,750	6.6
The Vanguard Group (3)	1,712,920	5.5

Named executive officers and directors:
Ashutosh Roy (4)	9,135,800	28.8
Gunjan Sinha (5)	910,295	2.9
Promod Narang (6)	574,155	1.8
Eric N. Smit (7)	299,187	*
Phiroz P. Darukhanavala, Ph.D. (8)	93,500	*
Brett Shockley (9)	64,767	*
Christine Russell (10)	58,750	*
All current executive officers and directors as a group: (7 persons)	11,136,454	34.3

* Indicates less than one percent.

(1)	Based solely on a Schedule 13G filed on February 14, 2023. Oaktop Capital Management II, L.P. has sole voting and sole dispositive power with respect to 2,671,843 shares. The mailing address of Oaktop Capital Management II, L.P. is One Main Street, Suite 202, Chatham, NJ 07928.

(2)

Based solely on a Schedule 13D filed on April 24, 2023 filed jointly by Philotimo Fund, LP (“Philotimo”), Philotimo Focused Growth and Income Fund, a series of World Funds Trust (“PHLOX”), Kanen Wealth Management, LLC (“KWM”), and David L. Kanen, Philotimo has shared voting and shared dispositive power with respect to 1,400,549 shares, PHLOX has shared voting and shared dispositive power with respect to 449,680 shares, KWM has shared voting and shared dispositive power with respect to 2,041,321 shares, and Mr. Kanen has shared voting and shared dispositive power with respect to 2,041,321 shares and sole voting and sole dispositive power with respect to 22,429 shares. Mr. Kanen may be deemed to beneficially own the shares owned by KWM as the managing member of KWM. The mailing address of Philotimo, PHLOX, KWM, and Mr. Kanen is 5850 Coral Ridge Drive, Suite 309, Coral Springs, Florida 33076.

(3)

Based solely on Amendment No. 4 to Schedule 13G filed on February 9, 2023. The Vanguard Group has shared voting power with respect to 19,520 shares and shared dispositive power with respect to 27,653 shares. The Vanguard Group has sole dispositive power with respect to 1,685,267 shares and does not have sole voting power. The mailing address of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.

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(4)	All shares are held by Mr. Roy’s living trust, The Roy and Sharma Living Trust, and includes 368,750 shares subject to options exercisable within 60 days of October 10, 2023. Mr. Roy has sole voting and dispositive power over such shares.

(5)	Includes 93,500 shares subject to options exercisable within 60 days of October 10, 2023.

(6)	Includes 276,687 shares subject to options exercisable within 60 days of October 10, 2023.

(7)	Includes 170,000 shares subject to options exercisable within 60 days of October 10, 2023.

(8)	Consists of 93,500 shares subject to options exercisable within 60 days of October 10, 2023.

(9)	Consists of 64,767 shares subject to options exercisable within 60 days of October 10, 2023.

(10)	Consists of 58,750 shares subject to options exercisable within 60 days of October 10, 2023.

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EXECUTIVE COMPENSATION

The following discussion describes and analyzes eGain’s compensation program for our named executive officers. eGain’s named executive officers the fiscal year ended June 30, 2023, include our Chief Executive Officer, Ashutosh Roy, our Chief Financial Officer, Eric N. Smit, and our Chief Technology Officer, Promod Narang.

Executive Officers

The following table sets forth information regarding eGain’s named executive officers as of October 10, 2023:


Name	Age	Position
Ashutosh Roy	57	Chief Executive Officer and Chairman
Eric N. Smit	61	Chief Financial Officer
Promod Narang	65	Chief Technology Officer

Biographical information for Mr. Roy is described above under “Proposal 1: Election of Directors—Nominees.”

Eric N. Smit has served as Chief Financial Officer since August 2002. Prior to that, Mr. Smit served in a variety of roles at eGain, including Vice President, Operations from April 2001 to July 2002, Vice President, Finance and Administration from June 1999 to April 2001, and Director of Finance from June 1998 to June 1999. From December 1996 to May 1998, Mr. Smit served as Director of Finance for WhoWhere? Inc., an Internet services company. From April 1993 to November 1996, Mr. Smit served as Vice President of Operations and Chief Financial Officer of Velocity Incorporated, a software game developer and publishing company. Mr. Smit holds a Bachelor of Commerce in Accounting from Rhodes University, South Africa.

Promod Narang has served as Chief Technology Officer since November 2022. Mr. Narang joined eGain in October 1998 and served as Director of Engineering and from March 2000 to October 2022, he served as Senior Vice President of Products and Engineering prior to assuming his current position. Prior to joining eGain, Mr. Narang served as President of VMpro, a system software consulting company, from September 1987 to October 1998. Mr. Narang holds a Bachelor of Science in Computer Science from Wayne State University.

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Compensation Overview

Company Philosophy on Compensation

The Compensation Committee of our Board of Directors is responsible for providing oversight and determining our executive compensation programs. To that end, our Compensation Committee reviews corporate performance relevant to the compensation of our executive officers, including our named executive officers, and works with management to establish our executive compensation programs. The general philosophy of our executive compensation program is to:

●

encourage creation of stockholder value and achievement of strategic corporate objectives by providing management with long-term incentives through equity ownership by management;

●

provide a competitive total compensation package that enables us to attract and retain, on a long-term basis, high caliber personnel;

●

provide a total compensation opportunity that is competitive with companies in our industry, taking into account relative company size, performance and geographic location, as well as individual responsibilities and performance;

●

provide fair and internally consistent compensation; and

●

address other relevant considerations such as rewarding extraordinary performance.

Our executive compensation program is designed to reward team accomplishments while promoting individual accountability. The combination of incentives is designed to balance annual operating objectives and eGain’s earnings’ performance with longer-term stockholder value creation.

Establishing Compensation

Recommendations for executive compensation are made by our Compensation Committee and approved by the independent members of our Board of Directors. The Compensation Committee may not delegate its authority in these matters to other persons. Our Compensation Committee typically reviews our executive officers’ compensation, including our named executive officers’ compensation, on an annual basis. Our Compensation Committee determines the appropriate levels of compensation to recommend based primarily on:

●

competitive benchmarking consistent with our recruiting and retention goals;

●

internal consistency and fairness; and

●

other relevant considerations such as rewarding extraordinary performance.

In reviewing compensation of our comparable companies, our Compensation Committee considers the annual revenues and market size of these companies and other relevant factors it deems appropriate. Our Compensation Committee attempts to establish compensation, particularly base salary, in the same comparable range that our revenues and market size fall when compared to these comparable companies. In some cases, our executive compensation may rise above this range due to certain circumstances, such as a strong retention need or an extraordinary performance.

In addition, our Compensation Committee evaluated the results of the most recent stockholder advisory vote on executive compensation, where stockholder voting on the proposal strongly supported such executive compensation.

Role of CEO and Management

The Chief Executive Officer does not participate in the Compensation Committee’s determination of his own compensation. However, he makes recommendations to the Compensation Committee for each of our named executive officers other than the Chief Executive Officer. The Chief Executive Officer bases these recommendations on his holistic assessment of each executive’s individual performance, as well as overall Company financial goals for the fiscal year as described above. The Compensation Committee reviews and considers the Chief Executive Officer’s recommendations, makes adjustments as it determines appropriate, and approves compensation in its sole discretion.

Compensation Components

Our executive compensation program generally consists of three primary components: base salary, annual non-equity incentives and stock option awards. These primary compensation components are described in more detail below.

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Executive officers are also eligible to participate in all of our respective local employee benefits plans, such as medical insurance, life and disability insurance and our 401(k) retirement plan, in each case on the same basis as other employees.

We view the three primary components of executive compensation as related, but we do not believe that compensation should be derived entirely from one component, or that significant compensation from one component should necessarily reduce compensation from other components. Our Compensation Committee has not adopted a formal or informal policy for allocating compensation between long-term and current compensation or between cash and non-cash compensation.

Base Salary

We provide our named executive officers with a base salary to compensate them for services rendered during the fiscal year. We establish base salaries for our executives based on the scope of their responsibilities and experience and consider competitive market compensation paid by companies in our industry commensurate for similar responsibilities and positions. We believe that executive base salaries should be targeted to be within the range of salaries for similar positions at comparable companies, which is in line with our compensation philosophy, in order to best attract, retain and motivate our executives.

Our Compensation Committee generally reviews the base salaries of our named executive officers annually and adjusts base salaries from time to time to ensure that our compensation programs remain competitive with market levels. Our Chief Executive Officer and Chief Financial Officer did not receive an increase in base compensation for fiscal year 2023.

The base salary for each of our named executive officers as of June 30, 2023, was as follows:


Name	Base Salary ($)	Percentage Adjustment between Fiscal Year 2022 and 2023
Ashutosh Roy	250,000	—	%
Eric N. Smit	320,000	—	%
Promod Narang	310,000	3	%

Annual Non-Equity Incentive Plan Compensation

Currently, most eGain employees participate in either a non-equity incentive plan tied primarily to revenue or bookings metrics, or, in the case of sales representatives and managers, a commission plan tied primarily to revenue and bookings metrics. The plans are designed to provide awards to employees as an incentive to contribute to eGain’s continued growth.

Amounts paid to our named executive officers pursuant to our non-equity incentive plan are contingent upon the attainment of certain performance targets established by our Compensation Committee and Board of Directors and are made in accordance with our executive compensation strategy. The performance targets may include:

●

financial metrics, such as new annual recurring revenue (“ARR”) bookings, revenues, operating income, cash flow, cash balances, days sales outstanding; and

●

business operational metrics, such as customer satisfaction, customer retention, operational efficiencies, product delivery and product quality.

For fiscal year 2023, 100% of the non-equity incentive plan target for each executive officer was tied to company performance.

Amounts paid to our named executive officers pursuant to our commission plan are contingent upon the attainment of certain corporate targets established by our Compensation Committee and Board of Directors and are made in accordance with our executive compensation strategy. The corporate targets include financial metrics such as total revenue, SaaS revenue, SaaS ARR, and professional services invoiced.

Stock Option Awards

We believe the use of stock-based awards for our named executive officers is a strong compensation tool that encourages our named executive officers to act in a manner that leads to long-term company success. We believe this type of

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compensation aligns our executive officers’ performance with the interests of our long-term investors by rewarding our officers through equity appreciation. The stock-based incentive program for the entire Company, including our named executive officers, currently consists of only stock option grants, but we may introduce in the future different types of equity awards or instruments to remain competitive in the compensation we pay our employees.

Our Stock Option Committee approves grants of proposed stock options awards and administers our stock option plans consistent with the compensation policies and practices as set by our Compensation Committee. Proposed stock option awards to our executive officers, including our named executive officers, are presented to our entire Board of Directors for consideration. The Stock Option Committee normally grants options to executive officers upon the hiring of an executive officer, as part of an annual review, and as special circumstances arise. The exercise price of our stock option awards is based on the closing price of our Common Stock on Nasdaq on the date such stock option award is approved. Except with respect to new hire grants, proposals for significant stock option awards to our executive officers, including our named executive officers, are not considered during an established “blackout period,” which commences 20 days prior to the end of each fiscal quarter and ends the trading day following the announcement of earnings for such fiscal quarter. Except for such proposed stock option awards to our executive officers, we intend to grant options in accordance with the foregoing procedures without regard to the timing of the release of material non-public information, such as an earnings announcement.

Benefits and Perquisites

We provide benefits to our named executive officers on the same basis as provided to all of our employees, including health, dental and vision insurance; life insurance; accidental death and dismemberment insurance; short-and long-term disability insurance; sick leave; parental leave; and an employee assistance program. We do not maintain any executive-specific benefit or perquisite programs.

401(k) Retirement Plan

We sponsor and maintain a 401(k) defined contribution retirement plan for our employees. Our 401(k) plan is intended to qualify as a tax-qualified plan under Section 401 of the Internal Revenue Code so that contributions to our 401(k) plan and income earned on such contributions are not taxable to participants until withdrawn or distributed from the 401(k) plan (except in the case of contributions under the 401(k) plan designated as Roth contributions, which are not taxable when distributed). Our 401(k) plan provides that each participant may contribute up to 100% of his or her eligible pre-tax compensation, up to certain statutorily imposed limits. Under our 401(k) plan, each employee is fully vested in his or her deferred salary contributions. Our 401(k) plan also permits us to make discretionary matching contributions, subject to established limits and a vesting schedule. In 2022, the Company made matching contributions equal to 50% of a participant’s contributions up to 6% of such participant’s eligible compensation.

Defined Pension Plan

None of our named executive officers participate in or have account balances in qualified or non-qualified defined benefit plans sponsored by us. We do not offer such qualified or non-qualified defined benefit plans to our executives because we believe that such defined benefit plans are not typical for similar companies in both our industry and geographic region. We may elect to adopt qualified or non-qualified defined benefit plans if our Compensation Committee and Board of Directors determine that doing so is in our best interests.

Change in Control Severance Benefits

Our named executive officers are not entitled to severance benefits upon termination of employment for any reason absent a change in control.

On November 2, 2015, the Board of Directors approved a standardized form of executive change in control and severance agreement and authorized the Company to enter into that form agreement with several of the Company’s employees and executive officers, including named executive officers Eric N. Smit and Promod Narang, but not including, at this time, Ashutosh Roy.

The form of change in control and severance agreement has an initial term of two years, which term automatically renews for additional one-year periods unless either party provides written notice of non-renewal at least 60 days prior to the date

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of automatic renewal and which term extends for one year from a “change in control,” as defined in the agreement. Pursuant to the agreement, if the executive is terminated by us without “cause” (as defined in the agreement), or terminates his or her employment for “good reason” (as defined in the agreement) within the first 12 months following a change in control, subject to the executive’s execution of a release of claims agreement in a form approved by eGain and such release becoming effective and irrevocable within 60 days of the executive’s termination, he or she is entitled to receive (i) a lump sum payment payable within 60 days following termination from employment equal to the sum of (x) 6 months of such individual’s annual base salary as of the date of such termination plus (y) 50% of the executive’s target bonus for the year of termination; (ii) 6 months of accelerated vesting of any outstanding equity awards and (iii) provided that the individual timely elects to continue coverage for himself or herself and his or her eligible dependents under the Company’s group health plans, as applicable, under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company will reimburse the executive for the monthly COBRA premium paid by the executive for the executive and his or her eligible dependents until the earlier of (x) six months following the termination date or (y) the date upon which the executive and his or her eligible dependents become covered under similar plans.

In the event any of the payments or benefits provided for under change in control and severance agreement or that are otherwise paid or will become payable to such individual would constitute a “parachute payment” within the meaning of Section 280G of the Code and could be subject to the related excise tax, such individual would be entitled to receive either full payment of such payments and benefits or such lesser amount which would result in no portion of the payments and benefits being subject to the excise tax, whichever results in the greater amount of after-tax benefits to the individual.

The following table provides hypothetical amounts of cash severance payments related to salary, non-equity incentive plan compensation, equity incentive plan compensation and all other compensation had a change in control of our Company occurred on June 30, 2023, with a price per share equal to $9.75, the closing market price as of June 30, 2023, and the employment of the following officers was terminated without cause or the officers resign for good reason within the first twelve months following a change in control (based on salary and other compensation arrangements as of June 30, 2023):


Name and principal position	Salary ($) (1)	Non-equity incentive plan compensation ($) (2)	Equity incentive plan compensation ($) (3)	All other compensation ($) (4)	Total ($)
Eric N. Smit, Chief Financial Officer	160,000	55,250	120,597	9,466	345,313
Promod Narang, Chief Technology Officer	155,000	38,250	86,680	7,820	287,750

(1)	Represents 50% of the named executive officer’s salary as of June 30, 2023.

(2)	Represents 50% of the named executive officer’s target bonus for the fiscal year ended June 30, 2023.

(3)	Represents the estimated stock-based compensation expense of six months of vesting acceleration of options outstanding as of June 30, 2023.

(4)	Represents reimbursement of the estimated cost of continuation of health insurance coverage under COBRA for the named executive officer and his eligible dependents for six months after June 30, 2023 (based on the named executive officer’s coverage elections as of June 30, 2023).

As of June 30, 2023, Mr. Roy was not eligible to receive or participate in any change in control and/or severance payments or benefits.

Non-qualified Deferred Compensation

None of our named executive officers participate in or have account balances in non-qualified defined contribution plans or other deferred compensation plans maintained by us. To date, we have not had a significant reason to offer such non-qualified defined contribution plans or other deferred compensation plans. We may elect to provide our officers and other employees with non-qualified defined contribution or deferred compensation benefits if our Compensation Committee and Board of Directors determine that doing so is in our best interests.

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Tax and Accounting Considerations

Section 162(m)

Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), generally places a $1 million limit on the amount of compensation a public company can deduct in any one year for certain current and former executive officers. While the Compensation Committee considers tax deductibility as one factor in determining executive compensation, the Compensation Committee also looks at other factors in making its decisions, as noted above, and retains the flexibility to award compensation that it determines to be consistent with the goals of our executive compensation program, even if the awards are not deductible by us for tax purposes.

Taxation of Nonqualified Deferred Compensation

Section 409A of the Code requires that amounts that qualify as “nonqualified deferred compensation” satisfy requirements with respect to the timing of deferral elections, timing of payments, and certain other matters. Generally, the Compensation Committee intends to administer our executive compensation program and design individual compensation components, as well as the compensation plans and arrangements for our employees, so that they are either exempt from, or satisfy the requirements of, Section 409A. From time to time, we may be required to amend some of our compensation plans and arrangements to ensure that they are either exempt from, or compliant with, Section 409A.

Taxation of “Parachute” Payments

Sections 280G and 4999 of the Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to additional taxes if they receive payments or benefits in connection with a change in control of the Company that exceeds certain prescribed limits, and that we (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We did not provide any executive officer, including any named executive officer, with a “gross-up” or other reimbursement payment for any tax liability that he or she might owe as a result of the application of Sections 280G or 4999 during 2022 and we have not agreed and are not otherwise obligated to provide any executive officers, including any named executive officer, with such a “gross-up” or other reimbursement payment.

Accounting for Stock-Based Compensation

The Compensation Committee considers accounting implications when designing compensation plans and arrangements for our executive officers and other employees. Chief among these is ASC 718, the standard that governs the accounting treatment of stock-based compensation awards.

Recoupment (or “Clawback”) Policy

The Compensation Committee will work with management in 2023 to review and, as necessary, timely adopt and implement a clawback policy that complies with the new SEC requirements and the NASDAQ listing rules.

Hedging Transactions

The Board of Directors has not adopted, and we do not have, any specific practices or policies regarding the ability of our officers and directors to purchase financial instruments, or otherwise engage in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of shares of our Common Stock.

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COMPENSATION COMMITTEE REPORT

The following report of the Compensation Committee does not constitute soliciting material and shall not be deemed filed or incorporated by reference into any other filing by eGain under the Securities Act of 1933 or the Securities Exchange Act of 1934.

The Compensation Committee of our Board of Directors has reviewed and discussed the Compensation Overview with management. Based on this review and discussion, the Compensation Committee recommended to our Board of Directors that the Compensation Overview be included in this Proxy Statement on Schedule 14A for the Annual Meeting, which is incorporated by reference in the 2023 Annual Report, each as filed with the SEC.



	Compensation Committee

	Brett Shockley
	Dr. Phiroz P. Darukhanavala

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2023 Summary Compensation Table

The following table summarizes information concerning compensation earned by our named executive officers during the fiscal year ended June 30, 2023.


Name and principal position	Fiscal year	Salary ($)	Option awards ($) (1)	Non-equity incentive plan compensation ($) (2)	All other compensation ($) (3)	Total ($)
Ashutosh Roy	2023	250,000	646,295	85,000	2,360	983,655
Chief Executive Officer	2022	250,004	1,096,884	—	1,260	1,348,148
	2021	250,008	13,522	—	—	263,530

Eric N. Smit	2023	320,000	344,691	110,500	4,793	779,984
Chief Financial Officer	2022	320,000	585,014	90,000	4,460	999,474
	2021	310,000	7,572	90,000	5,038	412,610

Promod Narang	2023	310,000	247,747	76,500	10,964	645,211
Chief Technology Officer	2022	307,083	420,539	72,000	11,520	811,142
	2021	300,000	7,572	90,000	10,806	408,378

(1)

Amounts shown in this column do not reflect the dollar amount actually received by the named executive officer, and instead represent the compensation recognized for financial reporting purposes for fiscal year 2023, in accordance with ASC 718, Compensation—Stock Compensation, excluding forfeitures, utilizing the assumptions discussed in Note 5 to our consolidated financial statements in the 2023 Annual Report.

(2)

Amounts reported represent the amount approved by our Compensation Committee and Board of Directors as cash incentive to executive officers based upon satisfaction of the criteria established under our non-equity incentive plan and commission plan. See “Compensation Components—Annual Non-Equity Incentive Plan Compensation” for discussion.

(3)	Amounts reported represent 401(k) employer matching contributions, certain medical reimbursements, and Company-paid life insurance premiums.

Narrative to 2023 Summary Compensation Table

See Compensation Overview above for a complete description of compensation plans pursuant to which the amounts listed under the 2023 Summary Compensation Table were paid or awarded and the criteria for such payment.

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Outstanding Equity Awards at Fiscal Year End

As of June 30, 2023, the only outstanding equity awards held by our named exertive officers were stock options. The following table provides information on the outstanding option awards held by each of our named executive officers as of June 30, 2023:


	Number of Securities Underlying Unexercised Options (#) (1)		Option Exercise		Option Grant	Option Expiration
Name	Exercisable	Unexercisable	Price ($)		Date	Date
Ashutosh Roy	200,000	—	$	2.50	9/19/2017	9/19/2027
	131,250	168,750	$	11.36	9/1/2021	9/1/2031
Total	331,250	168,750

Eric N. Smit	22,000	—	$	6.29	9/11/2014	9/11/2024
	58,000	—	$	2.50	9/19/2017	9/19/2027
	70,000	90,000	$	11.36	9/1/2021	9/1/2031
Total	150,000	90,000

Promod Narang	100,000	—	$	6.29	9/11/2014	9/11/2024
	112,000	—	$	2.50	9/19/2017	9/19/2027
	50,312	64,688	$	11.36	9/1/2021	9/1/2031
Total	262,312	64,688

(1)

Shares subject to the applicable option vest/vested in equal monthly installments over 4 years from grant date, subject to the named executive officer’s continuous service through each such date. If applicable, vesting accelerates as provided in, and subject to the terms and conditions of, the change in control and severance agreement between the named executive officer and the Company, as further discussed under “Compensation Components—Change in Control Severance Benefits”.

Option Exercises During Fiscal Year 2023

None of our named executive officers exercised stock options during fiscal year 2023.

Equity Awards Issued Subsequent to Fiscal Year 2023

No equity awards were issued to our executive officers subsequent to June 30, 2023, through the filing of this Proxy Statement.

Pay Versus Performance


Year	Summary Compensation Table Total for CEO ($)(a)	Compensation Actually Paid to CEO($)(b)	Average Summary Compensation Table Total for non-CEO Named Executive Officers($)(c)(e)	Average Compensation Actually Paid to non-CEO Named Executive Officers($)(d)(e)	Value of Initial Fixed $100 Investment Based On Company Total Shareholder Return($)	Net Income ($ in thousands)
2023	983,655	10,735	712,598	266,675	65	2,109
2022	1,348,148	1,881,502	905,308	1,149,138	85	(2,441)

(a)	The dollar amounts reported are the total compensation reported for Mr. Roy for each fiscal year in the “Total” column of the Summary Compensation Table.

(b)	The following represents the adjustments made to the Summary Compensation Table totals to derive the compensation actually paid to Mr. Roy in his role as CEO.

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Adjustments	2023	2022
Amounts reported in “Option Awards” column of SCT	646,295	1,096,884
Fair value of outstanding and unvested option awards that were granted in the current year	—	1,321,125
Change in fair value for option awards outstanding and unvested at the end of the current year that were granted in a prior year	(226,125)	—
Fair value of option awards granted and vested in the current year	—	304,875
Change in fair value for option awards vested in the current year that were granted in a prior year	(100,500)	4,238
Fair value at the end of the prior year of option awards that failed to meet vesting conditions in the year	—	—
Value of dividends or other earnings paid on option awards not otherwise reflected in fair value or total compensation	—	—

(c)	The dollar amounts reported represent the average of the amounts reported for our named executive officers as a group (excluding the CEO) in the “Total” column of the Summary Compensation Table in each applicable fiscal year.

(d)	The following represents the adjustments made to the Summary Compensation Table totals for our non-CEO named executive officers to derive the average compensation actually paid for our non-CEO NEOs.


Adjustments	2023	2022
Amounts reported in “Option Awards” column of SCT	296,219	502,776
Fair value of outstanding and unvested option awards that were granted in the current year	—	605,517
Change in fair value for option awards outstanding and unvested at the end of the current year that were granted in a prior year	(103,641)	—
Fair value of option awards granted and vested in the current year	—	139,733
Change in fair value for option awards vested in the current year that were granted in a prior year	(46,063)	1,356
Fair value at the end of the prior year of option awards that failed to meet vesting conditions in the year	—	—
Value of dividends or other earnings paid on option awards not otherwise reflected in fair value or total compensation	—	—

(e)	The named executive officers included in the non-CEO named executive average for each year are as follows:


2023	Messrs. Smit and Narang
2022	Messrs. Smit and Narang

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The following tables reflect the relationship of compensation actually paid to our CEO and the average of compensation actually paid to our non-CEO NEOs to (i) our Net Income (Loss) and (ii) the Company’s cumulative TSR.

Comparison of “Compensation Actually Paid” to TSR

Comparison of “Compensation Actually Paid” to Net Income (Loss)

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PROPOSAL 2
AMENDMENT TO THE AMENDED AND RESTATED 2005 STOCK INCENTIVE PLAN

On October 12, 2023, our Board unanimously approved an amendment and restatement of the eGain Corporation Amended and Restated 2005 Stock Incentive Plan (as proposed to be amended, the “2005 Stock Incentive Plan”) and directed that it be submitted for stockholder approval at the Annual Meeting. The proposed amendment and restatement of the 2005 Stock Incentive Plan increases the number of shares of Common Stock reserved for issuance under the 2005 Stock Incentive Plan by 1,000,000 shares from 7,460,000 shares to 8,460,000 shares and extends the term of the 2005 Stock Incentive Plan through October 11, 2033, the date that is ten (10) years following the effective date of the restatement (the “Stock Incentive Plan Amendment Proposal”). These changes will be effective as of the date the Board approved the amendment and restatement of the 2005 Stock Incentive Plan, subject to stockholder approval of the Stock Incentive Plan Amendment Proposal at the Annual Meeting.

We originally established the 2005 Stock Incentive Plan effective on March 11, 2005. The 2005 Stock Incentive Plan was subsequently amended in February 2009, September 2011, September 2014, August 2019, August 2021, and October 2021. The purpose of the 2005 Stock Incentive Plan is to promote our long-term success and the creation of stockholder value by (a) encouraging our employees, outside directors and consultants to focus on critical long-range objectives, (b) encouraging the attraction and retention of employees, outside directors and consultants with exceptional qualifications and (c) linking our employees, outside directors and consultants directly to stockholder interests through increased stock ownership. The 2005 Stock Incentive Plan authorizes the issuance of options to purchase shares of Common Stock and the grant of restricted shares, stock units and stock appreciation rights.

The Board determined that the available shares under the 2005 Stock Incentive Plan were insufficient to provide meaningful equity grants to our executive officers and employees. The Board believes that approval of this share reserve increase will allow the Company to provide additional long-term incentives to the Company’s executive officers, employees, directors and consultants as well as maintain compensation packages that align our employees’, executive officers’, directors’ and consultants’ interests to those of our stockholders and remain competitive to attract and retain individuals that can contribute to our success. We believe equity incentive compensation is a critical component to our compensation practices and allows us to incentivize our employees and more closely align their efforts with the creation of long-term stockholder value. We are requesting that our stockholders approve the Stock Incentive Plan Amendment Proposal. If our stockholders do not approve Stock Incentive Plan Amendment Proposal, the current share limits under, and other terms and conditions of, the 2005 Stock Incentive Plan will continue in effect.

Key Data

As of October 10, 2023, 2,360,648 exercisable options to purchase an aggregate of 3,941,867 shares of Common Stock were outstanding under the 2005 Stock Incentive Plan at exercise prices ranging from $1.80 to $19.11 per share, or a weighted average per share exercise price of $10.05; the outstanding options had a weighted average remaining contractual life of 7.13; 2,343,735 shares of Common Stock have been issued under the 2005 Stock Incentive Plan; and 1,174,398 shares of Common Stock were available for future issuance under the 2005 Stock Incentive Plan. As of October 10, 2023, the closing price per share of eGain’s Common Stock was $6.37 as reported on The Nasdaq Stock Market.

Summary of the 2005 Stock Incentive Plan

The following summary of the material features of the 2005 Stock Incentive Plan is qualified by reference to the terms of the 2005 Stock Incentive Plan, the full text of which is attached to this Proxy Statement as Appendix A. The 2005 Stock Incentive Plan has also been filed electronically with the SEC together with this Proxy Statement and can be accessed on the SEC’s website at www.sec.gov.

Administration. The compensation committee of our Board of Directors (the “Compensation Committee”) administers the 2005 Stock Incentive Plan, including the determination of the recipient of an award, the number of shares subject to each award, whether an option is to be classified as an incentive stock option or non-statutory option, and the terms and conditions of each award, including the exercise and purchase prices and the vesting or duration of the award.

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At the discretion of our Board of Directors, the Compensation Committee may consist solely of two or more “non-employee directors” within the meaning of Rule 16b-3 of the Exchange Act, or solely of two or more “outside directors” within the meaning of Section 162(m) of the Code. Our Board of Directors may appoint one or more separate committees of our Board of Directors, each consisting of one or more members of our Board of Directors, to administer the 2005 Stock Incentive Plan with respect to employees who are not subject to Section 16 of the Exchange Act. Subject to applicable law, our Board of Directors may also authorize one or more officers to designate employees, other than employees who are subject to Section 16 of the Exchange Act, to receive awards under the 2005 Stock Incentive Plan and/or determine the number of such awards to be received by such employees subject to limits specified by our Board of Directors.

Eligibility. Our officers and employees and those of our subsidiaries are eligible to participate in the 2005 Stock Incentive Plan. Our directors and other persons that provide consulting services to us and our subsidiaries and affiliates are also eligible to participate in the 2005 Stock Incentive Plan. The term subsidiary is used in this summary to refers to any corporation, if we or one or more other subsidiaries own not less than 50% of the total combined voting power of all classes of outstanding stock of such corporation. The term affiliate is used in this summary to refer to any entity other than a subsidiary, if we or one or more subsidiaries own not less than 50% of such entity. As of October 10, 2023, approximately three executive officers, 588 employees, and four non-employee directors were eligible to be considered for the grant of awards under the 2005 Stock Incentive Plan. Although consultants are eligible to receive awards under the 2005 Stock Incentive Plan, our current consulting arrangements do not provide for any equity awards.

Authorized Shares. The maximum cumulative aggregate number of shares of our Common Stock to be issued under the 2005 Stock Incentive Plan and currently approved by stockholders is 7,460,000, subject to adjustment as described below. The number of shares of our Common Stock that may be delivered in the aggregate pursuant to the exercise of incentive stock options granted under the 2005 Stock Incentive Plan may not exceed 7,460,000 shares of our Common Stock plus, to the extent allowable under Section 422 of the Code and the Treasury Regulations promulgated thereunder, any shares that of our Common Stock that again become available for issuance under the 2005 Equity Incentive Plan as further described in this paragraph. Shares subject to awards granted under the 2005 Stock Incentive Plan that expire unexercised, are forfeited or terminated before being exercised or settled, or are not delivered to the participant because such award is settled in cash will again become available for issuance under the 2005 Stock Incentive Plan. Shares tendered or withheld to satisfy the exercise price or tax withholding obligation related to an award shall again become available for issuance under the 2005 Stock Incentive Plan. Any shares that have actually been granted in connection with stock options or stock appreciation rights will reduce the shares remaining available for issuance under the 2005 Stock Incentive Plan on a one-for-one basis. With respect to stock unit or restricted share awards intended to qualify as “performance-based compensation” under Section 162(m) of the Code (“Section 162(m)”), no participant may receive awards under the 2005 Stock Incentive Plan that relate to an aggregate of more than 500,000 shares in any calendar year, or more than two times this amount in the first year of employment.

At the Annual Meeting, our stockholders are being asked to approve an amendment and restatement of the 2005 Stock Incentive Plan to increase the number of shares of Common Stock reserved for issuance thereunder by 1,000,000 shares from 7,460,000 shares to 8,460,000. The maximum number of shares that may be issued upon the exercise of incentive stock options would also be increased to the same number.

Types of Awards

Stock Options. A stock option is the right to purchase a certain number of shares of stock, at a certain exercise price, in the future. Under the 2005 Stock Incentive Plan, incentive stock options and non-statutory options must be granted with an exercise price of at least 100% of the fair market value of our Common Stock on the date of grant. Incentive stock options granted to any holder of more than 10% of the voting shares of our Company must have an exercise price of at least 110% of the fair market value of our Common Stock on the date of grant. No incentive stock option can be granted to an employee if as a result of the grant, the employee would have the right in any calendar year to exercise for the first time one or more incentive stock options for shares having an aggregate fair market value in excess of $100,000, based on the value of the stock on the date of grant. The stock option agreement specifies the date when all or any installment of the option is to become exercisable. Our option agreements have generally provided that 1/4th of the total number of shares subject to the option will vest and become exercisable 12 months after the vesting commencement date, and the remaining options will vest and become exercisable at a rate of 1/48th of the total number of shares subject to the option each month thereafter subject to continued service. Each stock option agreement sets forth the term of the options, which is prohibited from exceeding 10 years (five years in the case of an incentive stock option granted to any holder of more than 10% of our

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voting shares), and the extent to which the optionee will have the right to exercise the option following termination of the optionee’s service with the Company. Payment of the exercise price may be made in cash or cash equivalents or, if provided for in the stock option agreement evidencing the award, (i) by surrendering, or attesting to the ownership of, shares which have already been owned by the optionee, (ii) by delivery of an irrevocable direction to a securities broker to sell shares and to deliver all or part of the sale proceeds to us in payment of the aggregate exercise price, (iii) by delivery of an irrevocable direction to a securities broker or lender to pledge shares and to deliver all or part of the loan proceeds to us in payment of the aggregate exercise price, (iv) by delivering a full-recourse promissory note, (v) by having the Company withhold shares issuable upon exercise pursuant to a “net exercise,” or (vi) by any other form that is consistent with applicable laws, regulations and rules.

Restricted Stock. Restricted stock is a share award that may be subject to vesting conditioned upon continued service, the achievement of performance objectives or the satisfaction of any other condition as specified in a restricted stock agreement. Participants who are granted restricted stock awards generally have all of the rights of a stockholder with respect to such stock, other than the right to transfer such stock prior to vesting. Subject to the terms of the 2005 Stock Incentive Plan, the Compensation Committee will determine the terms and conditions of any restricted stock award, including any vesting arrangement, which will be set forth in a restricted stock agreement to be entered into between us and each recipient. Restricted stock may be awarded for such consideration as the Compensation Committee may determine, including without limitation cash, cash equivalents, full-recourse promissory notes or future services or services rendered prior to the award (without a cash payment by the recipient).

Restricted Stock Units. Restricted Stock Units (“RSUs”) give recipients the right to acquire a specified number of shares of stock at a future date upon the satisfaction of certain conditions, including any vesting arrangement, established by the Compensation Committee and as set forth in a restricted stock unit agreement. Unlike restricted stock, the stock underlying RSUs will not be issued until the RSUs have vested and are settled, and recipients of stock units generally will have no voting or dividend rights prior to the time the vesting conditions are satisfied and the award is settled. However, at the discretion of the Compensation Committee, any restricted stock unit may entitle the holder to be credited with an amount equal to all cash dividends paid on one share of our Common Stock while the stock unit is outstanding, subject to the vesting conditions applicable to the underlying stock units. The Compensation Committee may elect to settle vested RSUs in cash or in Common Stock or in a combination of cash and Common Stock. Subject to the terms of the 2005 Stock Incentive Plan, the Compensation Committee will determine the terms and conditions of any RSU award, which will be set forth in a restricted stock unit agreement to be entered into between us and each recipient.

Stock Appreciation Rights. Stock appreciation rights may be granted independently or in combination with an award of stock options. Stock appreciation rights typically will provide for payments to the recipient based upon increases in the price of our Common Stock over the exercise price of the award. The exercise price of a stock appreciation right will be determined by the Compensation Committee, which shall not be less than the fair market value of our Common Stock on the date of grant. The Compensation Committee may elect to pay stock appreciation rights in cash or in Common Stock or in a combination of cash and Common Stock.

Performance Based Awards. Awards under the 2005 Stock Incentive Plan may be made subject to performance conditions as well as time-vesting conditions. Such performance conditions must be based on an objective formula or standard, which include, but are not limited to, one or more of the following factors: (a) cash flow (including operating cash flow), (b) earnings per share, (c) earnings before any combination of interest, taxes, depreciation or amortization, (d) return on equity, (e) total stockholder return, (f) share price performance, (g) return on capital, (h) return on assets or net assets, (i) revenue, (j) income or net income, (k) operating income or net operating income, (l) operating profit or net operating profit, (m) operating margin or profit margin, (n) return on operating revenue, (o) return on invested capital, (p) market segment shares, (q) costs, (r) expenses, (s) achievement of target levels of discovery and/or development of products or services, including but not limited to research or regulatory achievements, (t) third party coverage and/or reimbursement objectives, or (u) test volume metrics, each with respect to eGain and/or one or more of its affiliates or operating units.

The Compensation Committee shall determine the qualifying performance criteria not later than the 90th day of the performance period, and shall determine and certify, for each participant, the extent to which the qualifying performance criteria have been met. The Compensation Committee may not in any event increase the amount of compensation payable under the 2005 Stock Incentive Plan upon the attainment of a pre-established qualifying performance goal to a participant who is a “covered employee” within the meaning of Section 162(m).

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Amendment and Termination. Unless earlier terminated by the Board or the Compensation Committee, the 2005 Stock Incentive Plan will terminate automatically on September 30, 2024. The termination of the 2005 Stock Incentive Plan will not affect the validity of any award agreement outstanding at the date of such termination. However, if the stockholders approve the Stock Incentive Plan Amendment Proposal, the term of the 2005 Stock Incentive Plan be extended through October 11, 2033. Our Board of Directors may amend or terminate the plan at any time, subject to stockholder approval where required by applicable law. Any amendment or termination may not impair the rights of holders of outstanding awards without their consent.

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Plan Features. Under the 2005 Stock Incentive Plan:

●

Unless the agreement evidencing an award expressly provides otherwise, no award granted under the plan may be transferred in any manner (prior to the vesting and lapse of any and all restrictions applicable to shares issued under such award), other than by will or the laws of descent and distribution.

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In the event of a recapitalization, stock split or similar capital transaction, we will make appropriate and equitable adjustments to the number of shares reserved for issuance under the 2005 Stock Incentive Plan, including the limitations on awards given to an individual participant in any calendar year and the number of non-statutory stock options automatically granted to outside directors and other adjustments in order to preserve the benefits of outstanding awards under the 2005 Stock Incentive Plan.

●

If we merge with or into another corporation, all outstanding awards will be subject to the agreement of merger or other reorganization, and subject to compliance with Section 409A of the Code, such agreement shall provide for: (a) the continuation of outstanding awards by eGain, if eGain is the surviving corporation, (b) the assumption of the outstanding awards by the surviving corporation or its parent or subsidiary, (c) the substitution by the surviving corporation or its parent or subsidiary of its own awards for the outstanding awards, (d) immediate vesting, exercisability and settlement of outstanding awards followed by the cancellation of such awards upon or immediately prior to the effectiveness of such transaction, or (e) settlement of the intrinsic value of the outstanding awards (whether or not then vested or exercisable) in cash or cash equivalents or equity.

Promotion of Good Corporate Governance Practices. The 2005 Stock Incentive Plan also includes a number of responsible corporate governance provisions. These include, but are not limited to, the following:

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No Discounted Options. Stock options and stock appreciation rights may not be granted with exercise prices lower than the fair market value of the underlying shares on the grant date.

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No Evergreen Provision. We do not have an “evergreen” provision which automatically adds additional shares to the plan each year.

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No Transferability. Awards generally may not be transferred, except by will or the laws of descent and distribution, unless approved by the Compensation Committee.

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No Repricing. Stock options and stock appreciation rights with an exercise price that is greater than the fair market value of the underlying shares may not be repriced, exchanged, or bought out without stockholder approval.

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No Tax Gross-ups. The 2005 Stock Incentive Plan does not provide for any tax gross-ups.

Summary of Federal Income Tax Consequences

The following summary is intended only as a general guide to the material U.S. federal income tax consequences of participation in the 2005 Stock Incentive Plan. The summary is based on existing U.S. laws and regulations, and there can be no assurance that those laws and regulations will not change in the future. The summary does not purport to be complete and does not discuss the tax consequences upon a participant’s death, or the provisions of the income tax laws of any municipality, state or foreign country in which the participant may reside. As a result, tax consequences for any particular participant may vary based on individual circumstances.

Incentive Stock Options. An optionee recognizes no taxable income for regular income tax purposes as a result of the grant or exercise of an incentive stock option qualifying under Section 422 of the Code. Optionees who neither dispose of their shares within two years following the date the option was granted nor within one year following the exercise of the option normally will recognize a capital gain or loss equal to the difference, if any, between the sale price and the purchase price of the shares. If an optionee satisfies such holding periods upon a sale of the shares, we will not be entitled to any deduction for federal income tax purposes. If an optionee disposes of shares within two years after the date of grant or within one year after the date of exercise (a “disqualifying disposition”), the difference between the fair market value of the shares on the exercise date and the option exercise price (not to exceed the gain realized on the sale if the disposition is a transaction with respect to which a loss, if sustained, would be recognized) will be taxed as ordinary income at the time of disposition. Any gain in excess of that amount will be a capital gain. If a loss is recognized, there will be no

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ordinary income, and such loss will be a capital loss. Any ordinary income recognized by the optionee upon the disqualifying disposition of the shares generally should be deductible by our Company for federal income tax purposes, except to the extent such deduction is limited by applicable provisions of the Code. The difference between the option exercise price and the fair market value of the shares on the exercise date is treated as an adjustment in computing the optionee’s alternative minimum taxable income and may be subject to an alternative minimum tax which is paid if such tax exceeds the regular tax for the year. Special rules may apply with respect to certain subsequent sales of the shares in a disqualifying disposition, certain basis adjustments for purposes of computing the alternative minimum taxable income on a subsequent sale of the shares and certain tax credits which may arise with respect to optionees subject to the alternative minimum tax.

Non-Qualified Stock Options. Options not designated or qualifying as incentive stock options will be non-qualified stock options having no special U.S. tax status. An optionee generally recognizes no taxable income as the result of the grant of such an option. Upon exercise of a non-qualified stock option, the optionee normally recognizes ordinary income equal to the amount that the fair market value of the shares on such date exceeds the exercise price. If the optionee is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of stock acquired by the exercise of a non-qualified stock option, any gain or loss, based on the difference between the sale price and the fair market value on the exercise date, will be taxed as capital gain or loss. No tax deduction is available to our Company with respect to the grant of a non-qualified stock option or the sale of the stock acquired pursuant to such grant.

Restricted Stock Awards. A participant acquiring restricted stock generally will recognize ordinary income equal to the fair market value of the shares on the vesting date. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. The participant may elect, pursuant to Section 83(b) of the Code, to accelerate the ordinary income tax event to the date of acquisition by filing an election with the Internal Revenue Service no later than thirty days after the date the shares are acquired. Upon the sale of shares acquired pursuant to a restricted stock award, any gain or loss, based on the difference between the sale price and the fair market value on the date the ordinary income tax event occurs, will be taxed as capital gain or loss.

Restricted Stock Unit Awards. There are no immediate tax consequences of receiving an award of RSUs. A participant who is awarded RSUs generally will be required to recognize ordinary income in an amount equal to the fair market value of shares issued to such participant at the end of the applicable vesting period or, if later, the settlement date. Any additional gain or loss recognized upon any later disposition of any shares received would be capital gain or loss.

Stock Appreciation Rights. In general, no taxable income is reportable when a stock appreciation right is granted to a participant. Upon exercise, the participant generally will recognize ordinary income in an amount equal to the fair market value of any shares received. Any additional gain or loss recognized upon any later disposition of the shares would be capital gain or loss.

Section 409A

Section 409A of the Code (“Section 409A”), provides certain requirements for non-qualified deferred compensation arrangements with respect to an individual’s deferral and distribution elections and permissible distribution events. Awards granted under the 2005 Stock Incentive Plan with a deferral feature will be subject to the requirements of Section 409A. If an award is subject to and fails to satisfy the requirements of Section 409A, the recipient of that award may recognize ordinary income on the amounts deferred under the award, to the extent vested, which may be prior to when the compensation is actually or constructively received. Also, if an award that is subject to Section 409A fails to comply with Section 409A’s provisions, Section 409A imposes an additional 20% federal income tax on compensation recognized as ordinary income, as well as interest on such deferred compensation. Certain states have enacted laws similar to Section 409A which impose additional taxes, interest and penalties on non-qualified deferred compensation arrangements. We will also have withholding and reporting requirements with respect to such amounts.

Tax Effect

We generally will be entitled to a tax deduction in connection with an award under the 2005 Stock Incentive Plan in an amount equal to the ordinary income realized by a participant and at the time the participant recognizes such income. Section 162(m) limits our compensation deduction to $1,000,000 paid in any tax year to any “covered employee” as defined under Section 162(m).

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Equity Compensation Plan Information

The following table summarizes our equity compensation plans as of June 30, 2023.


							Number of securities
		Number of

SEC Form DEF 14A filed by eGain Corporation