The BrainChip Holdings Ltd (ASX: BRN) share price is edging higher on Friday.
At the time of writing, the semiconductor company's shares are up 0.5% to 89.5 cents.
Image source: Getty Images
Why is the BrainChip share price rising?
The BrainChip share price is ending the week in the black thanks to a major improvement in investor sentiment.
This follows a stellar night on the tech-focused NASDAQ index, which recovered from being down 3% in early trade to end the session 2.2% higher.
This has given the Australian tech sector a lift on Friday, leading to the S&P/ASX All Technology Index rising 2.1% this morning.
But, as you might have noticed, the BrainChip share price isn't rising anywhere near as strongly as its peers.
What's going on?
The BrainChip share price is underperforming today after the company revealed that it will issue 8 million restricted stock units to its former chairman in order to prevent "any potential claim."
According to the release, when Emmanuel Hernandez resigned with immediate effect as chairman on 1 March, the options that were granted to him in 2017 lapsed.
The release states that Mr Hernandez expressed interest in reaching an agreement with the company to avoid exercising his options at the same time and instead to continue holding them beyond his resignation date up to expiration.
The two parties agreed to find an alternative to exercising the options, as apparently "this was considered to be in the best interest of the Company and shareholders." However, it was determined that the company could not modify the terms of the options without seeking shareholder approval or a waiver from ASX.
During the time taken for the $1.5 billion tech company to investigate the proper method of modifying the options and negotiating the terms with Mr Hernandez, the options ultimately lapsed.
But as this occurred whilst Mr Hernandez was engaging with BrainChip on the process for exercise, the company "considers it appropriate to award Mr Hernandez with the new RSUs." This will still require shareholder approval, though.
The release concludes:
The board does not consider that the issue of the New Rights will materially prejudice the Company or other shareholders. Brainchip also considers the issue of the New Rights to Mr Hernandez to be a necessary step in the prevention of any potential claim by Mr Hernandez.
