INFORMATION
STATEMENT REGARDING ACTION TAKEN BY WRITTEN CONSENT OF MAJORITY OF STOCKHOLDERS IN LIEU OF A SPECIAL MEETING
On
September 25, 2018, the board of directors of Wizard Entertainment, Inc. (“
Wizard
”, the “
Company
”
or “
we
”) and stockholders holding a majority of Wizard’s voting power took action (an “
Action
”
or the “
Actions
”) by written consent in lieu of meeting (the “
Written Consent
”) to:
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1.
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Elect
five directors to serve until the next annual meeting or until each of their successors are elected and qualified.
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2.
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Ratify
our the appointment of MaughanSullivan LLC as our independent certified public accountants for the year ending December 31, 2018.
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3.
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Authorize
our Board of Directors (the “
Board
”) to amend and restate our Certificate of Incorporation as set forth
in in the form attached hereto as
Exhibit A
(the “
Restated Certificate
”) to, among other things:
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a.
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Add
or amend various provisions to update the Restated Certificate, some of which may have an anti-takeover effect;
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b.
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Designate
shares of the Company’s authorized preferred stock as Series A Preferred Stock (the “
Preferred Stock
”)
to be exchanged for the Company’s outstanding convertible notes, which will increase the Company’s stockholders
equity; and
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c.
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Effect
a consolidation otherwise known as a reverse stock split (the “
Consolidation
”), of the outstanding shares
of our common stock at a ratio of not less than 1:25 and not more than 1:75 as determined by our Board prior to December
31, 2018, to facilitate trading in the Company common stock.
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4.
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Approve
and ratify the 2016 Incentive Stock Award Plan (the “
2016 Plan
”).
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In
connection with the Restated Certificate, our Board also approved the Amended and Restated Bylaws substantially in the form attached
hereto as
Exhibit B
(the “
Restated Bylaws
”), to be effective upon the filing of the Restated Certificate
with the Secretary of State of the State of Delaware.
Pursuant
to Section 14(c) of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), and Regulation 14C
promulgated thereunder, the Notice of Stockholder Action by Written Consent (the “
Notice
”) and this Information
Statement will be sent or given on or about November 5, 2018, to our stockholders of record, as of September 25, 2018 (the “
Record
Date
”). This Information Statement is being circulated to advise stockholders of Actions already approved and taken
without a meeting by Written Consent of stockholders who hold a majority of the voting power of our voting stock.
WE
ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
No
action is required by you. This Information Statement is furnished only to inform our stockholders of the approval of the Actions
by Written Consent before they take place in accordance with Rule 14c-2 of the Exchange Act.
Vote
Required and Information on Approving Stockholders
We
are not seeking consents, authorizations, or proxies from you.
As
of September 25, 2018, the date we received the Written Consent, the Company had 68,535,036 shares of Common Stock
issued and outstanding and entitled to vote, which for voting purposes are entitled to one vote per share. On September 25,
2018, the following consenting stockholders owning a total of 50,158,536 shares of our Common Stock, which collectively
represented 73.2% of the total number of voting shares outstanding on such date (collectively, the “
Approving
Stockholders
”), delivered the executed Written Consent authorizing and approving the Restated Certificate. The
Approving Stockholders’ names, affiliation with the Company and holdings are as follows:
Name
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Affiliation
with the Company
1
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Shares
of
Common Stock
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Percentage
of
Voting
Shares
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Paul
Kessler
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Executive
Chairman
Bristol
Investment Fund, Ltd
Bristol
Capital, LLC
Bristol
Capital Advisors Profit Sharing Plan
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50,158,536
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73.2
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%
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Basis
for Majority Written Consent
The
elimination of the need for an annual meeting of stockholders to approve the Actions described herein is made possible by Section
228 of the Delaware General Corporation Law (the “
DGCL
”), which provides in general that any action required
or permitted to be taken at a meeting of the stockholders may be taken without a meeting if a written consent of such action is
signed by the stockholders holding at least a majority of the voting power required to take such action. Neither our certificate
of incorporation nor our bylaws prohibit stockholders from taking such action.
Effective
Dates
The
Board elections, accountant ratification and 2016 Plan ratification will become effective without further action on November 26, 2018,
21 calendar days after this Information Statement is first sent to our stockholders. The Restated Certificate will become effective
when and if it is filed with the Secretary of State of the State of Delaware. We will not make such filing until on or after November 26,
2018, the date that is 21 calendar days after this Information Statement is first sent to our stockholders. Thereafter, our Board
will have discretion when, and whether, to file the Restated Certificate, but in no event may the Restated Certificate be filed
after December 31, 2018.
No
Dissenters’ Rights
Under
the DGCL, our stockholders are not entitled to dissenters’ rights with respect to the Actions.
Proposals
by Security Holders
No
stockholder has requested that we include any additional proposals in this Information Statement.
Expenses
of this Information Statement
The
Company will pay all costs associated with the distribution of the Information Statement, including the cost of printing and mailing.
The Company will reimburse brokerage and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in
sending the Information Statement to the beneficial owners of the Company’s common stock.
ACTION
NO. 1: ELECTION OF DIRECTORS
The
Company’s Board of Directors consists of five directors each of whom serve one-year terms or until their successor is elected.
The current Board consists of John Maatta, Paul Kessler, Greg Suess, Michael Breen and Jordan Schur. By Written Consent, these
individuals have been elected to serve as directors under the Company’s next annual meeting of stockholders, until their
successors have been duly elected and qualified or until their earlier death, resignation or removal. Their election will become
effective on November 26, 2018.
ACTION
NO. 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
MaughanSullivan
LLC (“
Maughan
”) served as the Company’s independent certified public accountants for its financial statements
for and as of December 31, 2017. The Board of Directors has appointed Maughan as our independent certified accounting firm to
examine our financial statements ending December 31, 2018. By the Written Consent, such appointment was ratified by the stockholders
and will become effective on November 26, 2018. Even as so ratified, the Board of Directors in its discretion may direct the appointment
of a different independent public accounting firm at any time during the year if it determines a change would be in the best interests
of the stockholders.
1
Do
other directors or officers own stock (or just options)?
ACTION
NO. 3: RESTATED CERTIFICATE
General
Our
Board and the Approving Stockholders have approved the Restated Certificate, which is summarized below. The primary purposes of
the Restated Certificate are to update our charter (together with our Bylaws); to create a class of Preferred Stock that will
be exchanged for our outstanding convertible notes and increase our equity; and to effect a conversion/reverse stock split of
our common stock to increase the per share market price of our common stock in order to meet a key eligibility requirement for
listing on the Nasdaq Capital Market stock exchange (the “
Nasdaq CM
”). We believe listing on the Nasdaq CM
will provide us with increased flexibility in raising additional capital. There can be no assurance that we will meet all the
other eligibility requirements for listing.
The
Restated Certificate will be effective when it is filed with the Secretary of State of the State of Delaware. We will not make
such filing until on or after November 26, 2018, a date that is 21 calendar days after this Information Statement is first sent to our
stockholders. Thereafter, our Board will have discretion when, and whether, to file the Restated Certificate, but in no event
may the Restated Certificate be filed after December 31, 2018.
The
following discussion provides an overview of the Restated Certificate. For the complete terms of the Restated Certificate, please
refer to
Exhibit A
.
Capital
Stock
Common
Stock
We
will be authorized to issue 100,000,000 shares of Common Stock. Each holder of our Common Stock will be entitled to one vote
for each share held of record on each matter submitted to a vote of stockholders, including the election of directors.
Stockholders will not have any right to cumulate votes in the election of directors.
Subject
to preferences that may be granted to the holders of preferred stock, each holder of our Common Stock will be entitled to share
ratably in distributions to stockholders and to receive ratably such dividends as may be declared by our board of directors out
of funds legally available therefor. In the event of our liquidation, dissolution or winding up, the holders of our common stock
will be entitled to receive, after payment of all of our debts and liabilities and of all sums to which holders of any preferred
stock may be entitled, the distribution of any of our remaining assets. Holders of our Common Stock will have no conversion, exchange,
sinking fund, redemption or appraisal rights (other than such as may be determined by our board of directors in its sole discretion)
and will have no preemptive rights to subscribe for any of our securities.
Our
authorized but unissued shares of common stock will be available for future issuance without stockholder approval. We may use
additional shares for a variety of purposes, including future public offerings to raise additional capital, to fund acquisitions
and as employee compensation. However, our authorized but unissued shares of common stock (and preferred stock, as discussed below)
could be used to render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer,
merger or otherwise.
Preferred
Stock
Generally
We
will be authorized to issue 5,000,000 shares of Preferred Stock, 3,500 of which will be designated as Series A Preferred
Stock. Our board will be authorized to further classify or reclassify any unissued portion of our authorized shares of
Preferred Stock to provide for the issuance of shares of other classes or series, including Preferred Stock in one or more
series. We may issue Preferred Stock from time to time in one or more classes or series, with the exact terms of each class
or series established by our Board.
Except
with respect to the Series A Preferred Stock discussed below, the rights, preferences, privileges and restrictions of the Preferred
Stock of each series will be fixed by the certificate of designation relating to each series. The terms of preferred stock may
include but not be limited to:
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the
distinctive designation and the maximum number of shares in the series;
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the
terms on which dividends, if any, will be paid;
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the
voting rights, if any, on the shares of the series;
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the
terms and conditions, if any, on which the shares of the series shall be convertible into, or exchangeable for, shares of
any other class or classes of capital stock;
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the
terms on which the shares may be redeemed, if at all;
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the
liquidation preference, if any; and
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any
or all other preferences, rights, restrictions, including restrictions on transferability, and qualifications of shares of
the series.
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The
authority that will be possessed by our board of directors to issue preferred stock could potentially be used to discourage attempts
by third parties to obtain control of our company through a merger, tender offer, proxy contest or otherwise by making such attempts
more difficult or more costly. Our board of directors may issue preferred stock with voting rights or conversion rights that,
if exercised, could adversely affect the voting power of the holders of our common stock.
Series
A Preferred Stock
We
have designated 3,000 shares of our Preferred Stock as Series A Preferred Stock. It is anticipated that, if the Company is
able to conduct and complete a public offering of its common stock, of which there is no assurance, these shares will be
issued to investment vehicles controlled by our Executive Chairman, Paul Kessler, in exchange for outstanding convertible
notes, to increase the Company’s stockholders equity immediately prior to the closing of such offering. The material
terms of the Series A Preferred Stock are as follows:
Stated
Value.
Each share of Series A Preferred Stock shall have a stated value of $1,000 (the “
Stated Value
”).
Shares
Reserved.
We have reserved for issuance 23,333,333 shares of common stock to be issued upon conversion of the Preferred
Stock.
Dividends
.
The Series A Preferred Stock carries a dividend, payable quarterly on January 1, April 1, July 1 and October 1, beginning on the
first such date after the first issuance by the Company at the rate of twelve percent (12%) per annum on the liquidation preference
then in effect. The dividend may be paid in cash or in shares of common stock, at the election of the Company, in its sole discretion,
provided that at the time of payment the Company has not announced a change of control transaction and the trading volume of the
Company exceeds $100,000 for 20 consecutive trading days. Dividends paid in shares of common stock are valued at the lesser of
(i) the conversion price then in effect and (ii) 70% of the volume weighted average price for 20 consecutive trading days prior
to declaration or payment.
Conversion
.
The Series A Preferred Stock is convertible into common stock at a price of $0.15 per share (the “
Conversion Price
”)
(which amount shall be proportionally adjusted to reflect the Consolidation Ratio), at any time, at the option of the holder.
The conversion rate is subject to a full ratchet adjustment for certain issuances of our common stock or securities convertible
into our common stock at a price per share below the Conversion Price then in effect. In addition, the conversion price may be
adjusted for certain corporate transactions including, but not limited to, stock splits, stock dividends, or other recapitalizations.
Voting
. The Series
A Preferred Stock and Common Stock vote on all matters before the stockholders as a single class, except as may be provided by
law. Each share of Series A Preferred Stock will have the number of votes per share equal to (i) the Stated Value divided
by (ii) the greater of (x) the Conversion Price and (y) the consolidated bid price per share of the Common Stock on our principal
market at the time the Exchange Agreement is signed.
Protective
Provisions
. As long as any shares of Series A Preferred Stock are outstanding, we may not, without the affirmative vote of
the holders of a majority of the then outstanding shares of the Preferred Stock, (i) amend, alter or repeal any provision of,
or add any provision to, our Certificate of Incorporation (by means of amendment or by merger, consolidation or otherwise), or
our Bylaws, to change the rights of the Series A Preferred Stock, (ii) create or authorize the creation of any additional class
or series of shares of stock which ranks senior to the Series A Preferred Stock as to dividends or the distribution of assets
on the liquidation, dissolution or winding up of the Company, or increase the authorized amount of any additional class or series
of shares of stock which ranks senior to such Series A Preferred Stock as to dividends or the distribution of assets on the liquidation,
dissolution or winding up of the Company, or create or authorize any obligation or security convertible into shares of any series
of Series Preferred Stock or into shares of any other class or series of stock which ranks senior to such Series A Preferred Stock
as to dividends or the distribution of assets on the liquidation, dissolution or winding up of the Company, whether any such creation,
authorization or increase shall be by means of amendment to our Certificate of Incorporation or by merger, consolidation or otherwise,
(iii) create, or authorize the creation of, or issue, or authorize the issuance of, any debt security which by its terms is convertible
into or exchangeable for any equity security of the Company, if such equity security ranks senior to the Series A Preferred Stock
as to dividends or the distribution of assets on the liquidation, dissolution or winding up of the Company, (iv) purchase or redeem,
or set aside any sums for the purchase or redemption of, or pay any dividend or make any distribution on, any shares of stock
other than the Series A Preferred Stock, except for dividends or other distributions payable on the Common Stock solely in the
form of additional shares of Common Stock and other than shares of Common Stock repurchased from employees, advisors, officers,
directors or consultants or service providers at the original purchase price thereof, (v) issue shares of Common Stock which issuance
would result in the Corporation having and insufficient number of shares of Common Stock necessary to deliver upon the conversion
of the Series A Preferred Stock in full, or (vi) enter into any agreement with respect to any of the foregoing.
Redemption
.
The holder(s) may not redeem the Series A Preferred Stock. With the consent of our independent directors, we may redeem the Series
A Preferred Stock upon payment of sum of (i) the product of (x) 130% of the Stated Value and (y) the number of shares of Series
A Preferred Stock to be redeemed and (ii) any unpaid dividends.
Liquidation
.
Upon a liquidation of the Company, after payment of all debts and before any payment is made on the common stock, the Series A
Preferred Stock is entitled to be paid the Stated Value, plus any unpaid dividends.
Other
Provisions That May Have an Anti-Takeover Effect
We
have adopted several provisions in our Restated Certificate and Restated Bylaws that could make it more difficult to acquire us
by means of a tender offer, a proxy contest or otherwise, or to remove incumbent officers and directors. These provisions, summarized
below, could discourage certain types of coercive takeover practices and takeover bids that our board of directors may consider
inadequate and to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe
that the benefits of increased protection of our ability to negotiate with the proponent of an unfriendly or unsolicited proposal
to acquire or restructure us outweigh the disadvantages of discouraging takeover or acquisition proposals because, among other
things, negotiation of these proposals could result in an improvement of their terms.
Removal
of Directors.
Our Restated Bylaws provide that our stockholders may only remove our directors with cause.
Size
of Board and Vacancies.
Our Restated Bylaws provide that the number of directors on our board of directors is fixed exclusively
by our board of directors. Newly created directorships resulting from any increase in our authorized number of directors will
be filled by a majority of our board of directors then in office, provided that a majority of the entire board of directors, or
a quorum, is present and any vacancies in our board of directors resulting from death, resignation, retirement, disqualification,
removal from office or other cause will be filled generally by the majority vote of our remaining directors in office, even if
less than a quorum is present.
Special
Stockholder Meetings.
Our Restated Certificate provides that only the Chairman of our board of directors, our Chief Executive
Officer or our board of directors pursuant to a resolution adopted by a majority of the entire board of directors may call special
meetings of our stockholders.
Stockholder
Action by Written Consent.
Our Restated Certificate expressly eliminates the right of our stockholders to act by written consent
other than by written consent of at least 66 2/3% of the total voting power of our then-outstanding capital stock. Stockholder
action must otherwise take place at the annual or a special meeting of our stockholders. Given the stock ownership of our Executive
Chairman, he will still be able to act by written consent even if this provision is adopted.
Requirements
for Advance Notification of Stockholder
Nominations
and Proposals.
Our Restated Bylaws establish advance notice procedures
with respect to stockholder proposals and nomination of candidates for election as directors other than nominations made by or
at the direction of our board of directors or a committee of our board of directors.
No
Cumulative Voting.
The DGCL provides that stockholders are denied the right to cumulate votes in the election of directors
unless our certificate of incorporation provides otherwise. Our Restated Certificate does not provide for cumulative voting.
Amendment.
Our certificate of incorporation and our bylaws provide that the affirmative vote of the holders of at least 66 2/3% of our
voting stock then outstanding is required to amend certain provisions relating to the number, term, election and removal of our
directors, the filling of our board vacancies, stockholder notice procedures, the calling of special meetings of stockholders,
use of written consents and the indemnification of directors.
Other
Notable Provisions and Laws
Delaware
Anti-Takeover Statute
We
are subject to Section 203 of the Delaware General Corporate Law (“DGCL”), an anti-takeover statute. In general, Section
203 of the DGCL prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested
stockholder” for a period of three years following the time the person became an interested stockholder, unless the business
combination or the acquisition of shares that resulted in a stockholder becoming an interested stockholder is approved in a prescribed
manner. Generally, a “business combination” includes a merger, asset or stock sale or other transaction resulting
in a financial benefit to the interested stockholder. Generally, an “interested stockholder” is a person who, together
with affiliates and associates, owns (or within three years prior to the determination of interested stockholder status did own)
15% or more of a corporation’s voting stock. The existence of this provision would be expected to have an anti-takeover
effect with respect to transactions not approved in advance by our board of directors, including discouraging attempts that might
result in a premium over the market price for the shares of common stock held by our stockholders.
Indemnification
of Directors and Officers; Limitation of Liabilities
The
Restated Certificate includes a provision that, to the fullest extent permitted by the DGCL, eliminates the personal liability
of its directors for monetary damages for breach of fiduciary duty as a director. In addition, together the Restated Certificate
and Restated Bylaws require the Company to indemnify, to the fullest extent permitted by law, any person made or threatened to
be made a party to an action or proceeding (whether criminal, civil, administrative or investigative) by reason of the fact that
such person is or was a director, officer or employee of the Company or any predecessor of the Company, or serves or served at
any other enterprise as a director, officer or employee at the Company’s request or the request of any predecessor of the
Company, against expenses (including attorneys’ fees), judgments, fines, settlements and other amounts actually and reasonably
incurred in connection with any proceeding, arising by reason of the fact that such person is or was an agent of ours. The Company’s
Restated Bylaws also provide that the Company may, to the fullest extent provided by law, indemnify any person against expenses
(including attorneys’ fees), judgments, fines, settlements and other amounts actually and reasonably incurred in connection
with any proceeding, arising by reason of the fact that such person is or was an agent of the Company. The Company is not required
to advance expenses incurred by its directors, officers, employees and agents in defending any action or proceeding for which
indemnification is required or permitted, subject to certain limited exceptions. The indemnification rights conferred by its Restated
Certificate and Restated Bylaws are not exclusive
The
Consolidation
Our
Board may effect the Consolidation at a ratio (the “
Consolidation Ratio
”) of not less than 1:25 and not more
than 1:75 at any time prior to December 31, 2018, with the exact Consolidation Ratio to be set at a whole number within
this range.
Reasons
for the Consolidation
The
Approving Stockholders authorized, and our Board approved, the Consolidation with the primary intent of increasing the trading
price per share of our Common Stock in order to meet the bid price criteria for initial listing on the Nasdaq CM. To be eligible
to be listed on the Nasdaq CM, among other things, the bid price for a share of our Common Stock must be at least $4.00. Our Common
Stock is currently quoted on the OTCQB Marketplace under the symbol “WIZD”. On November 2, 2018, the closing bid price
for a share of our Common Stock was $0.12. In addition to increasing the trading price per share of our Common Stock to
meet one part of the Nasdaq CM’s initial listing standards, our Board believes that the Consolidation would make our Common
Stock more attractive to a broader range of institutional and other investors. Accordingly, as discussed in more detail below,
we believe that effecting the Consolidation is in the Company’s and our stockholders’ best interests.
We
believe that the Consolidation will allow us to meet the minimum bid price requirements to be listed on the Nasdaq CM. Following
the filing of the Restated Certificate, which will give effect to the Consolidation, we intend to submit an application to The
Nasdaq Stock Market to list our Common stock on the Nasdaq CM. We believe that by listing our common stock on the Nasdaq CM, our
Common Stock will be more attractive to a broader range of institutional and other investors. We believe that the current market
price of our Common Stock may affect its acceptability to certain institutional investors, professional investors, and other members
of the investing public. Many brokerage houses and institutional investors have internal policies and practices that either prohibit
them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their
customers or providing analyst coverage to research the stock. Some of those policies and practices may function to make the processing
of trades in low-priced stocks economically unattractive to brokers. Moreover, because brokers’ commissions on low-priced
stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current average
trading price per share of common stock can result in individual stockholders paying transaction costs representing a higher percentage
of their total share value than would be the case if the share price were substantially higher. We also believe that listing our
Common Stock on the Nasdaq CM will increase the trading volume of our common stock, which will provide better liquidity to our
stockholders.
Reducing
the number of outstanding shares of our Common Stock through the Consolidation is intended, absent other factors, to increase
the trading price per share of our Common Stock. Other factors, such as our financial results, market conditions, and the market
perception of our business may adversely affect the trading price per share of our Common Stock. As a result, there can be no
assurance that the reverse stock split, if completed, will result in the intended benefits described above, that the trading price
per share of our Common Stock will increase following the reverse stock split, that the trading price per share of our Common
Stock will not decrease in the future, or that we will meet all other eligibility requirements for listing on the Nasdaq CM.
If
we do not file the Restated Certificate, we believe that we will remain ineligible for listing on the Nasdaq CM and will not file
an application for initial listing with the Nasdaq CM.
Determination
of Consolidation Ratio
Our
Board believes that stockholder approval of a range of potential Consolidation Ratios (rather than a single Consolidation Ratio)
is in the best interests of our company and stockholders because it provides our Board with the flexibility to achieve the desired
results of the Consolidation and because it is not possible to predict market conditions at the time the Consolidation would be
implemented. The ratio to be selected by our Board, in its sole discretion, will be a whole number ratio not less than 1:25 and
not more than 1:75. In selecting the ratio, our Board will consider, among other factors:
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the
historical and projected performance of our common stock;
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prevailing
market conditions;
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general
economic and other related conditions in our industry and in the marketplace;
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operating
performance;
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the
projected impact of the selected Consolidation Ratio on trading liquidity in our common stock;
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the
desire to satisfy the minimum closing price of $4.00 for listing on the Nasdaq CM;
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our
capitalization (including the number of shares of our common stock issued and outstanding);
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the
prevailing trading price for our common stock and the volume level thereof; and
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potential
devaluation of our market capitalization as a result of a Consolidation.
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Effects
of the Consolidation
Reduction
in Number of Outstanding Shares.
Based on 68,535,036 outstanding shares of Common Stock at October 31, 2018, and ignoring the
effects of rounding of fractional shares, the number of outstanding shares of Common Stock following the Consolidation would
be as follows:
Consolidation
Ratio
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Number
of outstanding shares of Common Stock following the Consolidation
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1:25
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2,741,401
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1:50
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1,370,700
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1:75
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913,800
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The
number of authorized shares of Common Stock available for future issuance by the Company will not be affected by the proposed
Consolidation. Consequently, the Consolidation will have the effect of increasing the number of shares that are available for
future issuance in the discretion of our Board.
The
Restated Certificate, if filed, will include only the Consolidation Ratio determined by our Board to be in the best interests
of the stockholders.
After
the effective date of the proposed Consolidation, each stockholder would own fewer shares of Common Stock. The proposed Consolidation
would affect all stockholders uniformly and would not affect any stockholder’s percentage ownership interest in the Company,
except to the extent that the Consolidation results in rounding up to a whole share for any stockholders owning fractional shares.
Proportionate voting rights and other rights of the holders of the Common Stock would not be affected by the proposed Consolidation
(other than as a result of the rounding up of fractional shares).
Effects
on Options, Warrants, and Convertible Securities
. Proportionate adjustments are generally required to be made to the per share
exercise price and the number of shares of Common Stock issuable upon the exercise or conversion of all outstanding options, warrants,
or other convertible securities entitling the holders to purchase, exchange for, or convert into, shares of common stock. This
would result in approximately the same aggregate price being required to be paid under such options, warrants, or other convertible
securities upon exercise, and approximately the same value of shares of common stock being delivered upon such exercise, exchange
or conversion, immediately following the Consolidation as was the case immediately preceding the Consolidation. The number of
shares reserved for issuance in connection with these securities will be reduced proportionately to the Consolidation, as will
the number of any shares remaining available for grant under our stock option plans at the time of the Consolidation.
The
Proposed Consolidation May Decrease the
Liquidity
of the Common Stock.
The liquidity of our Common Stock may be harmed
by the proposed Consolidation given the reduced number of shares of Common Stock that would be outstanding after the Consolidation,
particularly if the stock price does not increase as a result of the Consolidation.
Stockholders’
Equity
. Following the effectiveness of the Consolidation, the stated capital on our balance sheet attributable to the common
shares would not be impacted by the Consolidation. Our Common Stock would continue to be carried at a par value of $0.001 per
share after the Consolidation, assuming the Consolidation is effected. Per share net income or loss would be increased because
there would be fewer shares of the Common Stock outstanding. We do not anticipate that any other accounting consequences, including
changes to the amount of stock-based compensation expense to be recognized in any period, would arise as a result of the Consolidation.
Fractional
Shares
We
do not intend to issue fractional shares in connection with the Consolidation. Stockholders who own shares of Common Stock prior
to effective time of the Consolidation and who otherwise would hold fractional shares because the number of common shares they
held before the Consolidation would not be evenly divisible based on the Consolidation ratio will be entitled to round up such
fractional shares to a full share.
Exchange
of Share Certificates
If
the Consolidation is effected, stockholders holding certificated shares would be required to exchange their stock certificates
for new stock certificates (“
New Stock Certificates
”) reflecting the appropriate number of shares resulting
from the Consolidation. Stockholders of record on the effective date of the Consolidation will be furnished the necessary materials
and instructions for the surrender and exchange of share certificates at the appropriate time by the Company’s transfer
agent. Stockholders will not have to pay any transfer fee or other fee in connection with such exchange if they effect the exchange
within the limited time period to be set forth in the notice to the stockholders. As soon as practicable after the effective time
of the Consolidation, the transfer agent will send a letter of transmittal to each stockholder advising such holder of the procedure
for surrendering certificates representing the number of shares of the Common Stock prior to the Consolidation (“O
ld
Stock Certificates
”) in exchange for New Stock Certificates reflecting the number of shares of the Common Stock resulting
from the Consolidation.
You
should not destroy your Old Stock Certificate. You should not send your Old Stock Certificates now. You should send them only
after you receive the letter of transmittal from the Company’s transfer agent.
As
soon as practicable after the surrender to the transfer agent of any Old Stock Certificate, together with a duly executed letter
of transmittal and any other documents the transfer agent may specify, the transfer agent will deliver to the person in whose
name such Old Stock Certificate had been issued a New Stock Certificate registered in the name of such person. Any Old Stock Certificate
bearing a restrictive legend will be exchanged for a New Stock Certificate bearing the same legend, if any, restricting the transfer
of such shares that were borne by the surrendered Old Stock Certificates held prior to the Consolidation.
Until
surrendered as contemplated herein, each Old Stock Certificate shall be deemed at and after the effective time of the Consolidation
to represent the number of full shares of the Common Stock resulting from the Consolidation. Until they have surrendered their
Old Stock Certificates for exchange, stockholders will not be entitled to receive any dividends or other distributions, if any,
that may be declared and payable to holders of record.
Any
stockholder whose Old Stock Certificate has been lost, destroyed or stolen will be entitled to a New Stock Certificate only after
complying with the requirements that the Company and the transfer agent customarily apply in connection with lost, stolen or destroyed
certificates.
If
any New Stock Certificates are to be issued in a name other than that in which the Old Stock Certificates are registered, it will
be a condition of such issuance that (i) the person requesting such issuance must pay to the Company any applicable transfer taxes
or establish to the Company’s satisfaction that such taxes have been paid or are not payable, (ii) the transfer complies
with all applicable federal and state securities laws, and (iii) the surrendered certificate is properly endorsed and otherwise
in proper form for transfer. In all other cases, no service charges, brokerage commissions or transfer taxes shall be payable
by any holder of any Old Stock Certificate solely in connection with an exchange of Old Stock Certificates for New Stock Certificates.
Stockholders
who hold only uncertificated shares, either as direct or beneficial owners, will have their holdings electronically adjusted by
the Company’s transfer agent and, for beneficial owners, by their brokers or banks which hold in “street name”
for their benefit, as the case may be to give effect to the Company.
Federal
Income Tax Consequences of the Consolidation
The
following is a summary of certain material United States federal income tax consequences of the Consolidation. It does not purport
to be a complete discussion of all the possible United States federal income tax consequences of the Consolidation and is included
for general information only. Further, it does not address any state, local or foreign income or other tax consequences. This
discussion does not address the tax consequences to holders that are subject to special tax rules, such as banks, insurance companies,
regulated investment companies, personal holding companies, foreign entities, nonresident alien individuals, broker-dealers and
tax-exempt entities. The discussion is based on the provisions of the United States federal income tax law as of the date hereof,
which is subject to change retroactively as well as prospectively. This summary also assumes that the shares of our Common Stock
held by our stockholders before the Consolidation were, and the shares of our Common Stock held after the Consolidation will be,
held as “capital assets,” as defined in the Internal Revenue Code of 1986, as amended (i.e., generally, property held
for investment). The tax treatment of a stockholder may vary depending upon the particular facts and circumstances of such stockholder.
Each stockholder is urged to consult with such stockholder’s own tax advisor with respect to the tax consequences of the
Consolidation.
Other
than the potential issuance of whole shares of Common Stock for fractional shares, no gain or loss will be recognized by a stockholder
upon such stockholder’s exchange of shares held before the Consolidation for shares after the Consolidation. The aggregate
tax basis of the shares of the Common Stock received in the Consolidation will be the same as the stockholder’s aggregate
tax basis in the shares of the Company’s Common Stock exchanged therefor. The stockholder’s holding period for the
shares of the Company’s Common Stock after the Consolidation will include the period during which the stockholder held the
shares the Company’s Common Stock surrendered in the Consolidation.
THIS
SUMMARY OF CERTAIN MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCE OF THE
Consolidation
IS NOT BINDING ON THE INTERNAL REVENUE SERVICE, THE COMPANY OR THE COURTS. ACCORDINGLY, EACH STOCKHOLDER SHOULD CONSULT
WITH HIS OR HER OWN TAX ADVISOR WITH RESPECT TO ALL OF THE POTENTIAL TAX CONSEQUENCES TO HIM OR HER OF THE
Consolidation
.
Interests
of Certain Persons in the Adoption of the Restated Certificate
Certain
of the Company’s officers, directors and 5% stockholders have an interest in the Restated Certificate as a result of their
ownership of Common Stock, stock options and warrants of the Company, as set forth in the sections entitled “Security Ownership
of Certain Beneficial Owners and Management”.
APPROVAL
4 – 2016 INCENTIVE STOCK AWARD PLAN
At
the annual meeting, the stockholders will be asked to approve the 2016 Incentive Stock Award Plan (the “
2016 Plan
”),
a copy of which is attached to this information statement as
Exhibit C
. The Board of Directors adopted the 2016 Plan on
August 12, 2016, subject to and effective upon stockholder approval. The 2016 Plan replaced our Third Amended and Restated 2011
Incentive Stock and Award Plan (the “
Predecessor Plan
”). The 2016 Plan provides for the issuance of up to 5,000,000
shares of the our common stock through the grant of nonqualified options, incentive options and restricted stock to our directors,
officers, consultants, attorneys, advisors and employees. Until a committee consisting of two or more independent, non-employee
directors is appointed to administer the 2016 Plan, the Board shall administer the Plan.
Each
option issued under the 2016 Plan will contain the following terms:
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the
exercise price for an Incentive Option (as defined in the Plan), which shall be determined at the time of grant, shall not
be less than 100% of the Fair Market Value (defined as the closing price on the final trading day immediately prior to the
grant on the principal exchange or quotation system on which the common stock is listed or quoted, as applicable) of our common
stock, provided that if the recipient of the option owns more than ten percent (10%) of our total combined voting power, the
exercise price shall be at least 110% of the Fair Market Value, and provided further that with respect to the Nonqualified
Option (as defined in the Plan), the purchase price of each share of stock purchasable under a Nonqualified Option shall be
at least 100% of the Fair Market Value of such share of stock on the date that Nonqualified Option is granted, unless the
Committee, in its sole and absolute discretion, determines to set the purchase price of such Nonqualified Option below Fair
Market Value;
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subject
to acceleration in the event of a change of control of the Company (as further described in the Plan), the period during which
the options vest shall be designated by the Board or, in the absence of any option vesting periods designated by the Board
at the time of grant, shall vest and become exercisable in equal amounts on each fiscal quarter through the four year anniversary
of the date on which the option was granted;
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no
option is transferable and each is exercisable only by the recipient of such option except in the event of the death of the
recipient (if such recipient is a natural person); and
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with
respect to Incentive Options, the aggregate Fair Market Value of common stock exercisable for the first time during any calendar
year shall not exceed $100,000.
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Each
award of restricted stock issued under the 2016 Plan will be subject to the following terms:
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no
rights to an award of restricted stock is granted to the intended recipient of restricted stock unless and until the grant
of restricted stock is accepted within the period prescribed by the Board;
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certificate(s)
evidencing the restricted stock shall not be delivered until they are free of any restrictions specified by the Board at the
time of grant;
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recipients
of restricted stock have the rights of a stockholder of the Company as of the date of the grant of the restricted stock;
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shares
of restricted stock are forfeitable until the terms of the restricted stock grant have been satisfied or the employment with
us is terminated prior to such restrictions being satisfied; and
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the
restricted stock is not transferable until the date on which the Board has specified such restrictions have lapsed.
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Administration
Until
a Compensation Committee of the Board of Directors consisting of two or more independent, non-employee directors is appointed
to administer the 2016 Plan, the Board shall administer the Plan. Upon the appointment of a Compensation Committee consisting
of two or more independent, non-employee directors, the 2016 Plan generally will be administered by the Compensation Committee,
although the Board of Directors retains the right to appoint another of its committees to administer the 2016 Plan or to administer
the 2016 Plan directly. In the case of awards intended to qualify for the performance-based compensation exemption under Section
162(m) of the Code, administration of the 2016 Plan must be by a compensation committee comprised solely of two or more “outside
directors” within the meaning of Section 162(m). For purposes of this summary, the term “Committee” will refer
to either such duly appointed committee or the Board of Directors.
Subject
to the provisions of the 2016 Plan, the Committee determines in its discretion the persons to whom and the times at which awards
are granted, the types and sizes of awards, and all of their terms and conditions. The Committee may, subject to certain limitations
on the exercise of its discretion required by Section 162(m) or otherwise provided by the 2016 Plan, amend, cancel or renew any
award, waive any restrictions or conditions applicable to any award, and accelerate, continue, extend or defer the vesting of
any award. The 2016 Plan provides, subject to certain limitations, for indemnification by the Company of any director, officer
or employee against all reasonable expenses, including attorneys’ fees, incurred in connection with any legal action arising
from such person’s action or failure to act in administering the 2016 Plan. All awards granted under the 2016 Plan will
be evidenced by a written or digitally signed agreement between the Company and the participant specifying the terms and conditions
of the award, consistent with the requirements of the 2016 Plan. The Committee will interpret the 2016 Plan and awards granted
thereunder, and all determinations of the Committee generally will be final and binding on all persons having an interest in the
2016 Plan or any award.
Eligibility
Awards
may be granted to employees, directors and consultants of the Company or any present or future parent or subsidiary corporation
or other affiliated entity of the Company. As of September 30, 2018, we had approximately 16 employees and four non-employee
directors who would be eligible under the 2016 Plan.
Stock
Options
The
Committee may grant nonstatutory stock options within the meaning of Section 422 of the Code. The exercise price of each option
may not be less than the fair market value of a share of our common stock on the date of grant.
The
2016 Plan provides that the option exercise price may be paid in cash, by check, or cash equivalent; by means of a broker-assisted
cashless exercise; by means of a net-exercise procedure; to the extent legally permitted, by tender to the Company of shares of
common stock owned by the participant having a fair market value not less than the exercise price; by such other lawful consideration
as approved by the Committee; or by any combination of these. Nevertheless, the Committee may restrict the forms of payment permitted
in connection with any option grant. No option may be exercised unless the participant has made adequate provision for federal,
state, local and foreign taxes, if any, relating to the exercise of the option, including, if permitted or required by the Company,
through the participant’s surrender of a portion of the option shares to the Company.
Options
will become vested and exercisable at such times or upon such events and subject to such terms, conditions, performance criteria
or restrictions as specified by the Committee. The maximum term of any option granted under the 2016 Plan is ten years. Unless
otherwise permitted by the Committee, an option generally will remain exercisable for three months following the participant’s
termination of service, provided that if service terminates as a result of the participant’s death or disability, the option
generally will remain exercisable for 12 months, but in any event the option must be exercised no later than its expiration date,
and provided further that an option will terminate immediately upon a participant’s termination for cause (as defined by
the 2016 Plan).
Options
are nontransferable by the participant other than by will or by the laws of descent and distribution, and are exercisable during
the participant’s lifetime only by the participant. However, a nonstatutory stock option may be assigned or transferred
to certain family members or trusts for their benefit to the extent permitted by the Committee.
Awards
Subject to Section 409A of the Code
Certain
awards granted under the 2016 Plan may be deemed to constitute “deferred compensation” within the meaning of Section
409A of the Code, providing rules regarding the taxation of nonqualified deferred compensation plans, and the regulations and
other administrative guidance issued pursuant to Section 409A.Any such awards will be required to comply with the requirements
of Section 409A.Notwithstanding any provision of the 2016 Plan to the contrary, the Committee is authorized, in its sole discretion
and without the consent of any participant, to amend the 2016 Plan or any award agreement as it deems necessary or advisable to
comply with Section 409A.
Amendment,
Suspension or Termination
The
2016 Plan will continue in effect until its termination by the Committee, provided that no awards may be granted under the 2016
Plan following the tenth anniversary of the date the 2016 Plan was adopted by the Board. The Committee may amend, suspend or terminate
the 2016 Plan at any time. No amendment, suspension or termination of the 2016 Plan may affect any outstanding award unless expressly
provided by the Committee, and, in any event, may not have a materially adverse effect an outstanding award without the consent
of the participant unless necessary to comply with any applicable law, regulation or rule, including, but not limited to, Section
409A of the Code, or unless expressly provided in the terms and conditions governing the award.
Specific
Grants
The
Company has not approved any awards that are conditioned on shareholder approval of the 2016 Plan proposal. The Company cannot
currently determine the benefits or number of shares subject to awards that may be granted in the future to executive officers
and employees (including employee directors) under the 2016 Plan because the Company’s equity award grants are discretionary
in nature. No stock-based awards were granted to the Company’s named executive officers during 2017.
Summary
of U.S. Federal Income Tax Consequences
The
following summary is intended only as a general guide to the U.S. federal income tax consequences of participation in the 2016
Plan and does not attempt to describe all possible federal or other tax consequences of such participation or tax consequences
based on particular circumstances.
Nonstatutory
Stock Options
Options
not designated or qualifying as incentive stock options are nonstatutory stock options having no special tax status. A participant
generally recognizes no taxable income upon receipt of such an option. Upon exercising a nonstatutory stock option, the participant
normally recognizes ordinary income equal to the difference between the exercise price paid and the fair market value of the shares
on the date when the option is exercised. If the participant 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 nonstatutory stock option, any gain or loss,
based on the difference between the sale price and the fair market value of the shares on the exercise date, will be taxed as
capital gain or loss. We generally should be entitled to a tax deduction equal to the amount of ordinary income recognized by
the participant as a result of the exercise of a nonstatutory stock option, except to the extent such deduction is limited by
applicable provisions of the Code.
Restricted
Stock
A
participant acquiring restricted stock generally will recognize ordinary income equal to the excess of the fair market value of
the shares on the “determination date” over the price paid, if any, for such shares. The “determination date”
is the date on which the participant acquires the shares unless the shares are subject to a substantial risk of forfeiture and
are not transferable, in which case the determination date is the earlier of (i) the date on which the shares become transferable
or (ii) the date on which the shares are no longer subject to a substantial risk of forfeiture (
e.g.
, when they become
vested).If the determination date follows the date on which the participant acquires the shares, the participant may elect, pursuant
to Section 83(b) of the Code, to designate the date of acquisition as the determination date by filing an election with the Internal
Revenue Service no later than 30 days after the date on which the shares are acquired. If the participant is an employee, such
ordinary income generally is subject to withholding of income and employment taxes. 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 of the
shares on the determination date, will be taxed as capital gain or loss. We generally should be entitled to a deduction equal
to the amount of ordinary income recognized by the participant on the determination date, except to the extent such deduction
is limited by applicable provisions of the Code.
The
Board believes that the proposed adoption of the 2016 Plan is in the best interests of the Company and its stockholders for the
reasons stated above.
DIRECTORS
AND EXECUTIVE OFFICERS
The
following table discloses our directors and executive officers who served during the fiscal year ended December 31, 2017 and through
June 30, 2018:
Name
|
|
Age
|
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Title
|
|
|
|
|
|
John
D. Maatta
|
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66
|
|
Chief
Executive Officer, President, and Director
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Paul
L. Kessler
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57
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Executive
Chairman
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Randall
S. Malinoff
1
|
|
58
|
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Chief
Operating Officer
|
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Greg
Suess
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45
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Director
|
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Jordan
Schur
2
|
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53
|
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Director
|
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|
|
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|
Michael
Breen
3
|
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55
|
|
Director
|
|
|
|
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|
Vadim
Mats
4
|
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34
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|
Former
Director
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(1)
|
Effective
June 17, 2017, Mr. Malinoff no longer serves as the Company’s Chief Operating Officer.
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(2)
|
Mr.
Schur joined the Board as a Director on March 29, 2017.
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(3)
|
Mr.
Breen joined the Board as a Director on March 29, 2017.
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(4)
|
Mr.
Mats resigned as a Director on March 23, 2017.
|
John
D. Maatta, age 66, Chief Executive Officer, President and Director
John
D. Maatta has been a member of our Board since May 25, 2011, serving as Chairman of the Board from February 5, 2016 through April
22, 2016. Mr. Maatta has served as our Chief Executive Officer and President since May 3, 2016. Prior to joining us, Mr. Maatta
was engaged in the practice of law from October 2014 to January 2016. Mr. Maatta also served as Executive Vice President of The
CW Television Network from January 2006 to October 2014, prior to which he was the Chief Operating Officer of The CW Network,
which is America’s fifth broadcast network and a network that focuses substantially on targeting young adults between the
ages of 18 and 34. From September 2005 through September 2006, Mr. Maatta served as the Chief Operating Officer of The WB, a Warner
Bros. television network (“The WB”), where he had direct oversight of all business and operations departments, such
as business affairs, finance, network distribution (which included The WB 100+ station group), technology, legal, research, network
operations, broadcast standards and human resources. While Chief Operating Officer at The WB, Mr. Maatta also served as The WB’s
General Counsel. Mr. Maatta is currently a director of Trader Vic’s, Inc., a Polynesian-style restaurant chain, a position
he has held since 1998. Mr. Maatta received a Bachelor of Arts in Government from the University of San Francisco in 1974, and
a Juris Doctorate from the University of California, Hastings College of the Law, in 1977. Between 2013 and 2016 Mr. Maatta served
as the President of UNICEF for the Southern California region, and is a current member of the UNICEF Southern California Board
and the Chairman of the UNICEF Chinese Children’s Initiative. Mr. Maatta is also a member of the Southern California Board
of the Asia Society.
The
Board believes that Mr. Maatta is qualified to serve as a director as a result of his knowledge of the Company and its industry
and extensive leadership experience.
Paul
L. Kessler, age 57, Executive Chairman
Paul
L. Kessler was appointed as Executive Chairman of the Company on December 29, 2016. Mr. Kessler is Principal, Portfolio Manager
and Founder of Bristol Capital Advisors, LLC. His investments have focused on emerging growth public companies, private equity,
venture capital, and private companies on the path to becoming public. Mr. Kessler has guided and overseen hundreds investment
transactions in his career, as lead, co-lead, or syndicate investor.
Mr.
Kessler has broad experience in financing private and public emerging growth companies as well as negotiating, structuring and
re-structuring investment transactions. Mr. Kessler has worked on numerous mergers, acquisitions, divestitures, venture capital,
private equity, re-structuring and other capital market activities. He has actively worked with executives and boards of companies
on corporate governance, capital formation, and oversight, strategic repositioning and alignment of interests with shareholders.
Mr.
Kessler co-founded Start Engine, LLC, incubating or starting over 60 technology companies while evolving into its current status
as a leading US-based Crowd Funding platform. He is a lead investor and Advisor to ‘Act One Ventures’ a UCLA/LA based
accelerator and founding Advisor to MedTech Innovator, a leading US based medical technology accelerator.
Mr.
Kessler has been a guest speaker on tops including financing emerging growth public companies and at a variety of forums, including
Activist Investing in Europe, The Deal Corporate Governance Conference, The Pipe’s Conference, Los Angeles Venture Association
(LAVA), Wall Street Reporter’s Pipe Conference, UCLA Anderson School of Management, and Pepperdine University’s Graziadio
School of Business and Management. He has attended courses at various colleges and universities, including Harvard Business School’s
Executive Education Program, Stanford Business School’s Executive Directors Consortium, and UCLA’s Extension Program.
The
Board believes that Mr. Kessler is qualified to serve as a director as a result of his extensive experience in finance, sourcing
and identifying investment opportunities, and negotiating, structuring and re-structuring investment transactions with emerging
growth companies both private and public companies.
Greg
Suess, age 45, Director
Greg
Suess has served as a director of our Company since May 9, 2011. In 2018, he co-founded Activist Artists Management (“Activist”),
a management and consulting company that focuses on media and entertainment and provides comprehensive management services for
its clients, including talent and brand management, managing partnerships, strategic alliances and marketing strategies that engage
consumers through entertainment, music and lifestyle experiences. Mr. Suess is, and has been since inception, a partner at Activist.
Since 1997, Mr. Suess has been with the law firm of Glaser, Weil, Fink, Howard, Avchen & Shapiro, LLP, where he is currently
Partner and focuses on general corporate law and media and entertainment. Mr. Suess holds a Bachelor of Science from the University
of Southern California (Lloyd Greif Center for Entrepreneurial Studies), and holds a JD/MBA from Pepperdine University. He is
a member of the State Bar of California.
The
Board believes that Mr. Suess is qualified to serve as a director as a result of his extensive experience and background in the
media and entertainment industry complements the Company’s events business and its new initiatives and will provide a significant
contribution to the Company’s growth.
Michael
Breen, age 55, Director
Michael
Breen has been a director of our Company since March 2017. Mr. Breen is an English qualified solicitor and was the Managing Director
of the Sports and Entertainment Division of Bank Insinger de Beaufort N.V., a wealth management organization and part of the BNP
Paribas Group, one of the world’s largest banks. Mr. Breen was an equity partner with the law firm Clyde & Co, where
he specialized in all aspects of sports and entertainment law. Mr. Breen also has extensive experience in event-based entertainment,
having been responsible for the legal documentation relating to the world-famous UK music awards known as the Brit Awards. Mr.
Breen holds an Honours LLB degree in law from the University College of Wales, Aberystwyth.
The
Board believes that Mr. Breen is qualified to serve as a director as a result of his extensive experience and background in the
entertainment industry and entertainment law.
Jordan
Schur, age 53, Director
Jordan
Schur has been a director of our Company since March 2017. Mr. Schur is a veteran of the music and film industries. In 1994, Mr.
Schur created Flip Records, a record label that sold over seventy million records. In 1999, Mr. Schur was appointed President
of Geffen Records at Universal Music Group, where he merged the original Geffen Records with MCA Records and DreamWorks Records.
The expanded company went on to become a market leader, generating over Two Billion Dollars in sales. In 2006, Mr. Schur left
Geffen and founded Suretone Records which drove several artists to number one on iTunes and Soundscan in the U.S. and around the
world. Mr. Schur entered the film industry in 2008, founding Mimran Schur Pictures and going on to become a successful film producer.
In 2012, Mr. Schur founded Suretone Pictures, where he released several notable films. In 2014, Mr. Schur, in partnership with
Cinsay, created and launched Suretone Live, the world’s first syndicatable e-commerce and social media driven film, television,
and music content destination. Mr. Schur holds a Bachelor’s degree from Boston College.
The
Board believes that Mr. Schur is qualified to serve as a director as a result of his extensive experience and background in the
music and film industry.
Family
Relationships
There
are no family relationships among our directors, executive officers, or persons nominated or chosen by the Company to become directors
or executive officers.
Board
Meetings and Annual Meeting Attendance
The
Board met approximately one time during the fiscal year ended December 31, 2017. We did not hold any committee meetings during
the fiscal year ended December 31, 2017. No director attended less than 100% of the meetings held while such director was serving
on the Board. Additionally, the Board acted approximately one time by unanimous written consent in lieu of a meeting during 2017.
Committees
of the Board of Directors
Our
Board currently has an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee.
Audit
Committee
On
March 17, 2013, the Board authorized the creation of an Audit Committee. Currently, the Audit Committee is not comprised of any
members as its former members have departed from the Board or resigned from their position on the Audit Committee upon accepting
positions as officers of the Company. The Audit Committee’s functions include: selecting our independent registered public
accountants; reviewing the results and scope of the audit and other services provided by our independent registered public accountants;
reviewing our financial statements for each interim period and for our year end and our internal financial and accounting controls;
and recommending, establishing and monitoring the Company’s disclosure controls and procedures. The Audit Committee did
not hold a meeting in 2017. The Board intends to appoint members to the Audit Committee in 2018.
Compensation
Committee
On
March 17, 2013, the Board authorized the creation of a Compensation Committee. Currently, Mr. Suess serves as the sole member
of the Compensation Committee. The Compensation Committee is responsible for establishing and administering our policies involving
the compensation of all of our executive officers and establishing and recommending to our Board the terms and conditions of all
employee and consultant compensation and benefit plans. The Compensation Committee did not hold a meeting in 2017. The Board intends
to appoint additional members to the Compensation Committee in 2018.
Nominating
and Corporate Governance Committee
On
March 13, 2014, the Board authorized the creation of a Nominating and Corporate Governance Committee. Currently, Mr. Suess serves
as the sole member of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee reviews
and provides oversight with regard to the Company’s corporate governance related policies and procedures and also recommends
nominees to the Board and committees of the Board, develops and recommends to the Board corporate governance principles, and oversees
the evaluation of the Board and management. The Nominating and Corporate Governance Committee did not hold a meeting in 2017.
The Board intends to appoint additional members to the Nominating and Corporate Governance Committee in 2018.
Committee
Charters
The
Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee have not yet adopted written
charters which govern their conduct. The committees anticipate adopting such charters in 2018 prior to completion of its proposed
listing on the Nasdaq Capital Market.
Board
Oversight in Risk Management
Risk
is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of
risks, including liquidity risk, operational risk, strategic risk and reputation risk. Our Chief Executive Officer also serves
as one of our directors. In the context of risk oversight, at the present stage of our operations we believe that our selection
of one person to serve in both positions provides the Board with additional perspective which combines the operational experience
of a member of management with the oversight focus of a member of the Board. The business and operations of the Company are managed
by our Board as a whole, including oversight of various risks that the Company faces.
Compliance
with Section 16(a) of the Exchange Act
Section
16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who beneficially own 10% or more
of a class of securities registered under Section 12 of the Exchange Act to file reports of beneficial ownership and changes in
beneficial ownership with the SEC. Directors, executive officers and greater than 10% stockholders are required by the rules and
regulations of the SEC to furnish the Company with copies of all reports filed by them in compliance with Section 16(a).
Based
solely on our review of certain reports filed with the Securities and Exchange Commission pursuant to Section 16(a) of the Securities
Exchange Act of 1934, as amended, the reports required to be filed with respect to transactions in our common stock during the
fiscal year ended December 31, 2017, all but one were timely. Mr. Paul Kessler, the Company’s Chairman of the Board of Directors,
made one late filing in 2017 relating to one transaction, but has since made all the required filings as of October 3, 2018.
Director
Independence
The
common stock of the Company is currently quoted on the OTCBB and OTCQB, quotation systems which currently do not have director
independence requirements. On an annual basis, each director and executive officer will be obligated to disclose any transactions
with the Company in which a director or executive officer, or any member of his or her immediate family, have a direct or indirect
material interest in accordance with Item 407(a) of Regulation S-K. Following completion of these disclosures, the Board will
make an annual determination as to the independence of each director using the current standards for “independence”
that satisfy the rules and regulations of the NASDAQ Stock Market and the SEC.
Based
on that review, the Board determined that Greg Suess, Jordan Schur, and Michael Breen were independent under these standards.
Code
of Ethics
We
have not yet adopted a code of ethics. The Board intends to adopt a code of ethics in 2018 prior to completion of its proposed
listing on the Nasdaq Capital Market.
AVAILABILITY
OF ANNUAL REPORT ON FORM 10-K AND HOUSEHOLDING
A
copy of the Company’s Annual Report on Form 10-K as filed with the SEC is available upon written request and without charge
to shareholders by writing to the Company c/o Secretary, 662 N. Sepulveda Blvd., Suite 300, Los Angeles, California 90049 or by
calling telephone number (310) 648-8410.
In
certain cases, only one Annual Report and Information Statement may be delivered to multiple shareholders sharing an address unless
the Company has received contrary instructions from one or more of the shareholders at that address. The Company will undertake
to deliver promptly upon written or oral request a separate copy of the Annual Report or Information Statement, as applicable,
to a shareholder at a shared address to which a single copy of such documents was delivered. Such request should also be directed
to the Secretary of the Company at the address or telephone number indicated in the previous paragraph. In addition, shareholders
sharing an address can request delivery of a single copy of Annual Reports or Information Statements if they are receiving multiple
copies of Annual Reports or Information Statements by directing such request to the same mailing address.
Additional
Information
We
file annual, quarterly and current reports, and other information with the SEC. Copies of the reports and other information may
be read and copied at the SEC’s Public Reference Room at 100 F Street N.E., Washington, D.C. 20549 on official business
days during the hours of 10:00 a.m. to 3:00 p.m. Eastern Time. You can request copies of such documents by writing to the SEC
and paying a fee for the copying cost. You may obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. The SEC maintains a web site at http://www.sec.gov that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the SEC.
This
Information Statement was filed with the SEC. For further information you may:
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read
a copy of this Information Statement, including the exhibits, without charge at the SEC’s Public Reference Room; or
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obtain
a copy of this Information Statement from the SEC upon payment of the fees prescribed by the SEC.
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You
also may access our filings on our website at https://wizardworld.com/investor-relations. We do not incorporate the information
on our website into this Information Statement and you should not consider any information on, or that can be accessed through,
our website as part of this Information Statement.
Exhibit
A
Amended
and Restated Certificate of Incorporation
of
Wizard
Entertainment, Inc.,
a
Delaware corporation
The
undersigned, John D. Maatta, hereby certifies that:
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1.
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He
is the duly elected and acting Chief Executive Officer and President of Wizard Entertainment, Inc., a Delaware corporation.
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2.
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The
Certificate of Incorporation of this corporation was originally filed with the Secretary of State of the State of Delaware
on May 2, 2001, as thereafter amended.
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3.
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The
Certificate of Incorporation of this corporation shall be amended and restated to read in full as follows:
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Article
I
The
name by which the corporation is to be known is Wizard Entertainment, Inc. (the “
Corporation
”).
Article
II
The
address of the Corporation’s registered office in the State of Delaware and the County of Kent is [
1675 South State Street,
Suite B, Dover, DE 19901
]. The name of its registered agent at such address is [
Capitol Services, Inc.
]. The Corporation
may have such other offices, either within or without the State of Delaware, as the Board of Directors of the Corporation (the
“
Board of Directors
”) may designate or as the business of the Corporation may from time to time require.
Article
III
The
purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware, as from time to time amended.
Article
IV
(A)
Classes
of Stock
. The total number of shares of all classes of stock which the Corporation shall have authority to issue is
105,000,000 shares, consisting of (a) 1,000,000 shares of common stock, par value $0.0001 per share (the “
Common
Stock
”), and (b) 5,000,000 shares of preferred stock, par value $0.0001 per share (the “
Preferred
Stock
”).
Upon
filing and effectiveness (the “
Effective Time
”) of this Amended and Restated Certificate of Incorporation pursuant
to the General Corporation Law of the State of Delaware, each [__] shares of Common Stock issued and outstanding or held in treasury
immediately prior to the Effective Time shall automatically be combined into one validly issued, fully paid and non-assessable
share of Common Stock without any further action by the Corporation or the holder thereof, subject to the treatment of fractional
share interests as described below (such combination, the “
Reverse Stock Split
”). No fractional shares of Common
Stock shall be issued in connection with the Reverse Stock Split and the number of Common Stock to be issued shall be rounded
up to the nearest whole share. After the Effective Time, each certificate that immediately prior to the Effective Time represented
shares of Common Stock (an “
Old Certificate
”) Old Certificate that has not been surrendered shall represent
that number of shares of Common Stock into which the shares of Common Stock represented by the Old Certificate shall have been
combined, including fractional share interests as described above. Notwithstanding anything to the contrary in the Corporation’s
bylaws, at all times that the Corporation’s shares are listed on a national stock exchange, the shares of capital stock
of the Corporation shall comply with all direct registration system eligibility requirements established by such exchange, including
any requirement that shares of the Corporation’s capital stock be eligible for issue in book-entry form. All issuances and
transfers of shares of the Corporation’s capital stock shall be entered on the books of the Corporation with all information
necessary to comply with such direct registration.
(B)
Rights,
Preferences and Restrictions of Preferred Stock
. The first series of Preferred Stock shall be
designated “
Series A Preferred Stock
” and shall consist of Three Thousand Five Hundred (3,500) shares.
Each share of Series A Preferred Stock shall have
a stated value equal to $1,000,
subject to increase as set forth below (the “
Stated Value
”)
. The remaining shares
of Preferred Stock shall be undesignated.
The
rights, preferences, privileges, and restrictions granted to and imposed on the Series A Preferred Stock are as set forth below
in this Article IV(B).
1.
Dividend Provisions
.
(a)
Dividends
. The Corporation shall pay a cumulative dividend on each share of Series A Preferred Stock issued and
outstanding at the rate of twelve percent (12%) per annum on the Stated Value then in effect (as defined in Section 2(a) below)
(a “
Dividend
”), payable quarterly on January 1, April 1, July 1 and October 1 (each, a “
Dividend Payment
Date
”), beginning on the first such date after the first issuance of a share or fraction of a share of the Series A
Preferred Stock (the “
Original Issue Date
”). The Dividend shall be paid in cash, shares of Common Stock or
a combination thereof, at the election of the Corporation in its sole discretion. In the event the Corporation elects to pay the
Dividend in shares of common stock (the “
Dividend Shares
”), the Corporation shall deliver to the holders such
number of shares of Common Stock equal to the Dividend divided by the lesser of (i) the product of (y) the Conversion Price then
in effect multiplied by (x) the Stated Value and (ii) 70% of the lesser of (x) the average of the VWAPs for the 20 consecutive
trading days ending on the trading day that is immediately prior to the applicable Dividend Payment Date or (y) the average of
the VWAPs for the 20 consecutive trading days ending on the trading day that is immediately prior to the date the applicable Dividend
Shares are issued and delivered if such delivery is after the Dividend Payment Date. In addition to the foregoing, the holders
of Preferred Stock shall participate in all dividends and other distributions (other than stock dividends in the nature of a stock
split or the like, to the extent adjusted for elsewhere herein, and repurchases of securities by the Corporation not made on a
pro rata basis) that are declared and paid on Common Stock on the same basis as if each share of Preferred Stock had been converted
into the largest number of shares of Common Stock into which each share of Preferred Stock, as the case may be, may be converted
pursuant to Section 3 of Article IV(B) on the record date established for the declaration of such dividends.
(b)
Dividends Paid In Shares
. Dividends may be paid in Dividend Shares only if, at the time of payment, the Corporation
has not announced a transaction, the consummation of which would be considered a Deemed Liquidation Event, and the trading volume
of the Corporation exceeds $100,000 for 20 consecutive trading days.
(c)
Dividend Calculations
. Dividends on the Preferred Stock shall accrue commencing on the Original Issue Date, whether
or not earned or declared and whether or not there are profits, surplus or other funds of the Corporation legally available for
the payment of dividends. Dividends shall cease to accrue with respect to any Preferred Stock converted, provided that the Corporation
actually delivers the Conversion Shares (as defined below) within the time period required by Section 3 herein.
(d)
Late Fee
. All overdue accrued and unpaid Dividends to be paid hereunder shall entail a late fee at an interest rate
equal to the lesser of 18% per annum or the maximum rate permitted by applicable law (the “
Late Fees
”) which
shall accrue daily from the date such Dividends are due hereunder through and including the date of actual payment in full.
2.
Liquidation
.
(a)
Payments to the Holders of Series A Preferred Stock
. In the event of any liquidation, dissolution or winding up
of the Corporation, either voluntary or involuntary (a “
Liquidation Event
”), the holders of the Series A Preferred
Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Corporation to the
holders of Common Stock by reason of their ownership thereof, for each share held an amount equal to the Stated Value, plus unpaid
dividends, if any. If, upon the occurrence of such event, the assets and funds thus distributed among the holders of the Series
A Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, the
entire assets and funds of the Corporation legally available for distribution shall be distributed ratably among the holders of
the Series A Preferred Stock in proportion to the preferential amount each such holder is otherwise entitled to receive pursuant
to this Section 2(a).
(b)
Remaining Assets
.
After the full preferential amounts due the holders of the Preferred Stock pursuant to Section
2(a) have been paid or set aside, the remaining assets of the Corporation available for distribution to its stockholders shall
be distributed to the holders of Common Stock ratably in proportion to the number of shares of Common Stock then held by each
holder. Notwithstanding the above, for the purposes of determining the amount each holder of shares of Preferred Stock is entitled
to receive with respect to a Liquidation Event, each such holder shall be deemed to have converted such holder’s shares
of Preferred Stock immediately prior to the Liquidation Event if, as a result of an actual conversion, such holder would receive,
in the aggregate, an amount greater than the amount that would be distributed to such holder if such holder did not convert such
shares into Common Stock. If any such holder shall be deemed to have converted shares of Preferred Stock into Common Stock pursuant
to the foregoing, then such holder shall not be entitled to receive any distribution that would otherwise be made to holders of
Preferred Stock that have not converted.
(c)
Certain Acquisitions
.
(i)
Deemed Liquidation
.
For purposes of this Section 2, a Liquidation Event shall be deemed to occur upon the occurrence
of any of (a) an acquisition after the Original Issue Date by an individual or legal entity or “group” (as described
in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of
capital stock of the Corporation, by contract or otherwise) of in excess of 33% of the voting securities of the Corporation, (b)
the Corporation merges into or consolidates with any other Person, or any Person merges into or consolidates with the Corporation
and, after giving effect to such transaction, the stockholders of the Corporation immediately prior to such transaction own less
than 66% of the aggregate voting power of the Corporation or the successor entity of such transaction, (c) the Corporation sells
or transfers all or substantially all of its assets to another Person and the stockholders of the Corporation immediately prior
to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately after the transaction,
(d) a replacement at one time or within a three year period of more than one-half of the members of the Board of Directors which
is not approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by
those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors
was approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the execution
by the Corporation of an agreement to which the Corporation is a party or by which it is bound, providing for any of the events
set forth in clauses (a) through (d) above (each, a “
Deemed Liquidation Event
”). The treatment of any particular
transaction or series of related transactions as a Deemed Liquidation Event for purposes of this Section 2(c) may be waived by
the vote, written consent or agreement of the holders of a majority of the outstanding shares of Preferred Stock, voting together
as a single class on an as-converted basis.
(ii)
Valuation of Consideration
.
In the event of a Deemed Liquidation Event, if the consideration received by the Corporation
is other than cash, its value will be deemed its fair market value. Any securities shall be valued as follows:
(A)
Securities not subject to investment letter or other similar restrictions on free marketability:
(1)
If traded on a national securities exchange, the value shall be based on a formula approved by the Board of Directors and derived
from the closing prices of the securities on such exchange over a specified time period;
(2)
If actively traded over-the-counter, the value shall be based on a formula approved by the Board of Directors and derived from
the closing prices of the securities on the over-the-counter market over a specified time period; and
(3)
If there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Board
of Directors.
(B)
The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions
arising solely by virtue of a stockholder’s status as an affiliate or former affiliate) shall be to make an appropriate
discount from the market value determined as above in Section 2(c)(ii)(A) to reflect the approximate fair market value thereof,
as determined in good faith by the Board of Directors.
(iii)
Notice of Transaction
.
The Corporation shall give each holder of record of Preferred Stock written notice of any
impending transaction not later than ten (10) days prior to the stockholders’ meeting called to approve such transaction,
or ten (10) days prior to the closing of such transaction, whichever is earlier, and shall also notify such holders in writing
of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the impending
transaction and the provisions of this Section 2, and the Corporation shall thereafter give such holders prompt notice of any
material changes. The transaction shall in no event take place sooner than ten (10) days after the Corporation has given the first
notice provided for herein or sooner than ten (10) days after the Corporation has given notice of any material changes provided
for herein;
provided
,
however
, that such periods may be shortened or eliminated upon the vote, written consent or
agreement of the holders of Preferred Stock, that are entitled to such notice rights or similar notice rights and that represent
a majority of the voting power of all then outstanding shares of Preferred Stock, voting together as a single class.
(iv)
Effect of Noncompliance
.
In the event the requirements of this Section 2(c) are not complied with, the Corporation
shall forthwith either cause the closing of the transaction to be postponed until such requirements have been complied with, or
cancel such transaction, in which event the rights, preferences and privileges of the holders of the Preferred Stock shall revert
to and be the same as such rights, preferences and privileges existing immediately prior to the date of the first notice referred
to in Section 2(c)(iii) hereof.
3.
Conversion
.
The holders of the Preferred Stock shall have conversion rights as follows (the “
Conversion
Rights
”):
(a)
Right to Convert
.
Subject to Section 3(b), each share of Preferred Stock shall be convertible, at the option of
the holder thereof, at any time after the date of issuance of such share, at the office of the Corporation or any transfer agent
for such stock, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing the Stated
Value by the Conversion Price, determined as hereafter provided, in effect on the date the certificate is surrendered for conversion.
The initial “
Conversion Price
” per share of Series A Preferred Stock shall be equal to the [$0.15]
[1]
and shall be subject to adjustment as provided in Section 3(c) below. The holder shall effect conversions by delivering
to the Corporation a Notice of Conversion (each, a “
Notice of Conversion
”) specifying therein the number
of shares of Series A Preferred Stock to be converted and the date on which such conversion shall be effected (such date, the
“
Conversion Date
”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date
shall be the date that such Notice of Conversion is deemed delivered hereunder. The Corporation shall deliver the shares of Common
Stock issuable upon conversion of the Series A Preferred Stock (the “
Conversion Shares
”) pursuant to
the Notice of Conversion not later than the earlier of (i) three (3) trading days and (ii) the number of trading days comprising
the Standard Settlement Period (as defined below) after each Conversion Date (the “
Share Delivery Date
”).
As used herein, “
Standard Settlement Period
” means the standard settlement period, expressed in
a number of trading days, on the Corporation’s primary trading market with respect to the Common Stock as in effect on the
date of delivery of the Notice of Conversion.
(b)
Mechanics of Conversion
.
Before any holder of Preferred Stock shall be entitled to convert the same into shares
of Common Stock, and to receive certificates therefor, such holder shall either (A) surrender the certificate or certificates
therefor, duly endorsed, if any, at the office of the Corporation or of any transfer agent for the Preferred Stock or (B) notify
the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and execute an agreement satisfactory
to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates, and shall give
written notice to the Corporation at such office that such holder elects to convert the same.
(c)
Adjustments to Conversion Price for Dilutive Issuances
.
(i)
Special Definitions
.
For purposes of this Section 3(c), the following definitions shall apply:
(A)
“
Original Issue Date
” shall mean the date on which shares of Series A Preferred Stock are first issued by the
Corporation.
(B)
“
Additional Shares of Common Stock
” shall mean all shares of Common Stock issued (or, pursuant to Section 3(c)(ii)
below, deemed to be issued) by the Corporation after the Original Issue Date, other than (each of the following, an “
Excluded
Issuance
”):
(1)
shares of Common Stock issued upon conversion of the Preferred Stock;
(2)
shares of Common Stock issued or issuable to officers, directors or employees of, or consultants to, the Corporation pursuant
to any stock option plan or agreement or other similar plan or agreement approved by the Board of Directors;
1
NTD: To be adjusted to reflect reverse split.
(3)
shares of Common Stock issued or issuable to landlords, equipment lessors, lenders or other financial institutions in a commercial
transaction or arrangement approved by the Board of Directors;
(4)
shares of Common Stock issuable upon exercise or conversion of any debenture, warrant, option or other convertible security outstanding
prior to the Original Issue Date;
(5)
shares issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested members of the Board
of Directors, provided that such transactions is not primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities;
(6)
shares for which an adjustment is made pursuant to Section 3(c)(v);
(7)
Dividend Shares; or
(8)
issuances deemed Excluded Issuances by the approval, written consent or agreement of holders of a majority of the Series A Preferred
Stock.
(C)
“
Options
” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire either Common
Stock or Convertible Securities (as defined below).
(D)
“
Convertible Securities
” shall mean any evidences of indebtedness, shares of Preferred Stock or other securities
convertible into or exchangeable for Common Stock.
(ii)
Deemed Issue of Additional Shares of Common Stock
.
In the event the Corporation at any time or from time to time
after the Original Issue Date shall issue any Options
or Convertible Securities or shall fix a record date for the
determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the following
provisions shall apply:
(A)
The maximum number of shares (as set forth in the instrument relating thereto without regard to any provisions contained therein
for a subsequent adjustment of such number) of Common Stock issuable upon the exercise of such Options or upon the conversion
or exchange of such Convertible Securities shall be deemed to be Additional Shares of Common Stock issued as of the time of the
issuance of such Option or Convertible Security or, in case such a record date shall have been fixed, as of the close of business
on such record date.
(B)
Except as provided in paragraphs (C) and (D) below, no further adjustment in the Conversion Price shall be made upon the subsequent
issue of Convertible Securities or shares of Common Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities.
(C)
If such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any change in the
consideration payable to the Corporation or the number of shares of Common Stock issuable upon the exercise, conversion or exchange
thereof (other than a change resulting from the antidilution provisions of such Options or Convertible Securities), the Conversion
Price, as applicable, computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto)
and any subsequent adjustments based thereon shall, upon any such increase or decrease becoming effective, be recomputed to reflect
such increase or decrease insofar as it affects such Options or the rights of conversion or exchange under such Convertible Securities;
provided
,
however
, that such recomputed Conversion Price shall not exceed the Conversion Price that would have been
in effect had the original issuance of Options or Convertible Securities not been deemed to constitute an issuance of Additional
Shares of Common Stock.
(D)
Upon the expiration of any such Options or Convertible Securities, the Conversion Price to the extent in any way affected by or
computed using such Options or Convertible Securities, shall be recomputed to reflect the issuance of only the number of shares
of Common Stock actually issued upon the exercise of such Options or Convertible Securities.
(iii)
Adjustment of Conversion Price for Dilutive Issuances
.
In the event the Corporation shall issue Additional Shares
of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Section 3(c)(ii)) after the Original
Issue Date without consideration or for a consideration per share less than the Conversion Price per share of Series A Preferred
Stock in effect immediately prior to such issuance (such lower price, the “
Base Conversion Price
”),
then the Conversion Price shall be reduced to a price (rounded to the nearest cent) equal to the Base Conversion Price
(iv)
Determination of Consideration
.
For purposes of this Section 3(c), the consideration received by the Corporation
for the issue of any Additional Shares of Common Stock shall be computed as follows:
(A)
Cash and Property
.
Such consideration shall:
(1)
insofar as it consists of cash, be computed at the aggregate amount of cash received by the Corporation before deducting any reasonable
discounts, commissions or other expenses allowed, paid or incurred by the Corporation for any underwriting or otherwise in connection
with the issuance and sale thereof;
(2)
insofar as it consists of property other than cash, be computed at the fair value thereof at the time of such issue, as determined
in good faith by the Board of Directors; and
(3)
in the event Additional Shares of Common Stock are issued together with other securities or other assets of the Corporation for
consideration that covers both, be the proportion of such consideration allocated to such Additional Shares of Common Stock, computed
as provided in clauses (1) and (2) above, as determined in good faith by the Board of Directors.
(B)
Options and Convertible Securities
.
The consideration per share received by the Corporation for Additional Shares
of Common Stock deemed to have been issued pursuant to Section 3(c)(ii) relating to Options and Convertible Securities shall be
equal to:
(1)
the total amount, if any, received or receivable by the Corporation as consideration for the issuance of such Options or Convertible
Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without
regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Corporation upon the
exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible
Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities,
divided by
(2)
the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or
exchange of such Convertible Securities.
(C)
Issuances for No Consideration
. If the Corporation receives no consideration for Additional Shares of Common Stock,
then the Corporation shall be deemed to have received an aggregate of $0.01 of consideration for all such Additional Shares of
Common Stock issued or deemed to be issued.
(v)
Other Adjustments to Conversion Price
.
(A)
Subdivisions, Combinations or Consolidations of Common Stock
.
In the event the outstanding shares of Common Stock
shall be subdivided, combined or consolidated, by stock split, reverse stock split or similar event, into a greater or lesser
number of shares of Common Stock after the Original Issue Date, the Conversion Price in effect immediately prior to such subdivision,
combination or consolidation shall, concurrently with the effectiveness of such subdivision, combination or consolidation, be
proportionately adjusted.
(B)
Common Stock Dividends and Distributions
.
If, after the Original Issue Date, the Corporation at any time or from
time to time issues, or fixes a record date for determination of holders of Common Stock entitled to receive, a dividend or other
distribution payable in additional shares of Common Stock, then in each such event, as of the time of such issuance or, in the
event such record date is fixed, as of the close of business on such record date, the Conversion Price that is then in effect
shall be decreased by multiplying the Conversion Price then in effect by a fraction, (x) the numerator of which is the number
of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such
record date, and (y) the denominator of which is the number of shares of Common Stock issued and outstanding immediately prior
to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in
payment of such dividend or distribution;
provided
,
however
, that if such record date is fixed and such dividend
or distribution is not paid in full on the date fixed therefor, the Conversion Price shall be recomputed accordingly as of the
close of business on such record date and thereafter the Conversion Price shall be adjusted pursuant to this Section 3(c)(v)(B)
to reflect the actual payment of such dividend or distribution.
(C)
Other Distributions
.
In case the Corporation shall distribute to holders of its Common Stock shares of its capital
stock (other than shares of Common Stock and other than as otherwise subject to adjustment pursuant to this Section 3(c)), stock
or other securities of other persons, evidences of indebtedness issued by the Corporation or other persons, assets (excluding
cash dividends) or options or rights (excluding options to purchase and rights to subscribe for Common Stock or other securities
of the Corporation convertible into or exchangeable for Common Stock), or shall fix a record date for determination of holders
of Common Stock entitled to receive such a distribution, then, in each such case, provision shall be made so that the holders
of the Preferred Stock shall be entitled to receive, upon conversion thereof, in addition to the number of shares of Common Stock
receivable thereupon, the amount of securities, evidences of indebtedness, assets, options or rights, as applicable, that they
would have received had their Preferred Stock been converted into Common Stock on the date of such event (or on the record date
with respect thereto, if such record date is fixed) and had they thereafter, during the period from the date of such event to
and including the date of conversion, retained such securities receivable by them as aforesaid during such period, subject to
all other adjustments called for during such period under this Section 3 with respect to the rights of the holders of the Preferred
Stock.
(D)
Recapitalizations and Reorganizations
.
In the case of any capital recapitalization or reorganization (other than
a subdivision, combination or other recapitalization provided for elsewhere in this Section 3 or a Deemed Liquidation Event provided
for in Section 2), or the fixing of any record date for determination of holders of Common Stock affected by such recapitalization
or reorganization, provision shall be made so that the holders of Preferred Stock shall be entitled to receive, upon conversion
thereof, the type and number of shares of stock or other securities or property of the Corporation or otherwise that they would
have received had their Preferred Stock been converted into Common Stock on the date of such event (or on the record date with
respect thereto, if such record date is fixed) and had they thereafter, during the period from the date of such event to and including
the date of conversion, retained such securities receivable by them as aforesaid during such period, subject to all other adjustments
called for during such period under this Section 3 with respect to the rights of the holders of the Preferred Stock. In any such
case, appropriate adjustment shall be made in the application of the provisions of this Section 3 to the end that the provisions
of this Section 3 shall be applicable after the recapitalization or reorganization to the greatest extent practicable.
(vi)
No Adjustment of Conversion Price
. No adjustment in the Conversion Price shall be made as the result of the issuance
or deemed issuance of Additional Shares of Common Stock if the Corporation receives approval, written consent or agreement from
the holders of a majority of the then outstanding shares of Series A Preferred Stock, voting together as a single class, agreeing
that no such adjustment shall be made as the result of the issuance or deemed issuance of such Additional Shares of Common Stock.
(vii)
Failure to Deliver Conversion Shares
. If, in the case of any Notice of Conversion, such Conversion Shares are not
delivered to or as directed by the applicable holder by the Share Delivery Date, the holder shall be entitled to elect by written
notice to the Corporation at any time on or before its receipt of such Conversion Shares, to rescind such Conversion, in which
event the Corporation shall promptly return to the holder any original Series A Preferred Stock certificate delivered to the Corporation
and the holder shall promptly return to the Corporation the Conversion Shares issued to such holder pursuant to the rescinded
Conversion Notice.
(viii)
Obligation Absolute; Partial Liquidated Damages
. The Corporation’s obligations to issue and deliver the Conversion
Shares upon conversion of the Series A Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective
of any action or inaction by the holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery
of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by the holder or any other Person of any obligation to the Corporation or any violation or alleged
violation of law by the holder or any other Person, and irrespective of any other circumstance which might otherwise limit such
obligation of the Corporation to the holder in connection with the issuance of such Conversion Shares;
provided
,
however
,
that such delivery shall not operate as a waiver by the Corporation of any such action the Corporation may have against the holder.
If the Corporation fails for any reason to deliver to the holder such Conversion Shares pursuant to Section 3(c) by the Share
Delivery Date, the Corporation shall pay to the holder, in cash, as liquidated damages and not as a penalty, for each share of
Series A Preferred Stock being converted, $10 per trading day (increasing to $20 per trading day on the fifth (5
th
)
trading day after such liquidated damages begin to accrue) for each trading day after such Share Delivery Date until such Conversion
Shares are delivered or holder rescinds such conversion.
(d)
No Fractional Shares and Certificate as to Adjustments
.
(i)
No fractional shares shall be issued upon the conversion of any share or shares of the Preferred Stock and the number of shares
of Common Stock to be issued shall be rounded down to the nearest whole share. The number of shares issuable upon such conversion
shall be determined on the basis of the total number of shares of Series A Preferred Stock the holder is at the time converting
into Common Stock and the number of shares of Common Stock issuable upon such aggregate conversion.
(ii)
Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 3, the Corporation, at
its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish
to each holder of Series A Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the
facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any
holder of Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (A) such adjustment
and readjustment, (B) the Conversion Price then in effect for the Series A Preferred Stock, and (C) the number of shares of Common
Stock and the amount, if any, of other property which at the time would be received upon the conversion of a share of Series A
Preferred Stock.
(e)
Notices of Record Date
.
In the event of any taking by the Corporation of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend)
or other distribution, any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or any other right, the Corporation shall mail to each holder of Preferred Stock, at least five (5) days
prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of such dividend, distribution or right;
provided
,
however
,
that such notice period may be shortened upon the vote, written consent or agreement of holders of Preferred Stock that are entitled
to such notice rights or similar notice rights and that represent a majority of the voting power of all then outstanding shares
of Preferred Stock voting together as a single class.
(f)
Reservation of Stock Issuable Upon Conversion
.
The Corporation shall at all times reserve and keep available out
of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the
Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of
all outstanding shares of Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall
not be sufficient to effect the conversion of all then outstanding shares of Preferred Stock, in addition to such other remedies
as shall be available to the holder of such Preferred Stock, the Corporation will take such corporate action as may, in the opinion
of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall
be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval
of any necessary amendment to this Amended and Restated Certificate of Incorporation.
(g)
Notices
.
Any notice required by the provisions of this Section 3 to be given to the holders of shares of Preferred
Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at
its address appearing on the books of the Corporation. Notice may also be given by any other reliable or generally accepted means,
including by facsimile or other electronic transmission or by a nationally recognized overnight courier service, provided, that
if notice is to be given by facsimile or other electronic transmission, this Corporation must comply with the requirements of
Section 232 of the Delaware General Corporation Law.
4.
Voting Rights
.
The holder of each share of Series A Preferred Stock shall have the number of votes per share equal
to the product of (i) the Stated Value multiplied by (ii) the quotient of (x) the Conversion Price then in effect divided by (y)
the average closing price per share of the Common Stock on our principal market for the five consecutive trading days immediately
prior to such vote, and with respect to such votes, such holder shall have full voting rights and powers equal to the voting rights
and powers of the holders of Common Stock, and shall be entitled, notwithstanding any provision hereof, to notice of any stockholders’
meeting in accordance with the Bylaws of the Corporation, and shall be entitled to vote, together with holders of Common Stock,
with respect to any question upon which holders of Common Stock have the right to vote. Fractional votes shall not, however, be
permitted and any fractional voting rights available on an as-converted basis (after aggregating all shares into which shares
of Series A Preferred Stock, held by each holder could be converted) shall be rounded to the nearest whole number (with one-half
being rounded upward).
5.
Protective Provisions
.
(a)
At any time when shares of Series A Preferred Stock are outstanding, except where the vote or written consent of the holders of
a greater number of shares of Series A Preferred Stock is required by law or by the Certificate of Incorporation, and in addition
to any other vote required by law or the Certificate of Incorporation, without the written consent of the holders of at least
a majority of the votes represented by the then outstanding shares of Series A Preferred Stock, given in writing or by vote at
a meeting, the Corporation will not:
(i)
amend, alter or repeal any provision of, or add any provision to, this Certificate of Incorporation (by means of amendment or
by merger, consolidation or otherwise), or the Corporation’s Bylaws, to change the rights of the Series A Preferred Stock;
(ii)
create or authorize the creation of any additional class or series of shares of stock which ranks senior to the Series A Preferred
Stock as to dividends or the distribution of assets on the liquidation, dissolution or winding up of the Corporation, or increase
the authorized amount of any additional class or series of shares of stock which ranks senior to such Series A Preferred Stock
as to dividends or the distribution of assets on the liquidation, dissolution or winding up of the Corporation, or create or authorize
any obligation or security convertible into shares of any series of Series Preferred Stock or into shares of any other class or
series of stock which ranks senior to such Series A Preferred Stock as to dividends or the distribution of assets on the liquidation,
dissolution or winding up of the Corporation, whether any such creation, authorization or increase shall be by means of amendment
to this Certificate of Incorporation or by merger, consolidation or otherwise;
(iii)
create, or authorize the creation of, or issue, or authorize the issuance of, any debt security of the Corporation which by its
terms is convertible into or exchangeable for any equity security of the Corporation, if such equity security ranks senior to
the Series A Preferred Stock as to dividends or the distribution of assets on the liquidation, dissolution or winding up of the
Corporation;
(iv)
issue shares of Common Stock which issuance would result in the Company having and insufficient number of shares of Common Stock
necessary to deliver upon the conversion of the Series A Preferred Stock in full;
(v)
purchase or redeem, or set aside any sums for the purchase or redemption of, or pay any dividend or make any distribution on,
any shares of stock other than the Series A Preferred Stock, except for dividends or other distributions payable on the Common
Stock solely in the form of additional shares of Common Stock and other than shares of Common Stock repurchased from employees,
advisors, officers, directors or consultants or service providers of the Company at the original purchase price thereof; or
(vi)
permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation
unless the Corporation could, under Sections 5(a)(i) through 5(a)(v), purchase or otherwise acquire such shares at such time and
in such manner.
6.
Redemption
.
(a)
Optional Redemption at Election of Corporation
. Subject to the provisions of this Section 6(a), at any time after
the Original Issue Date and subject to the approval of the disinterested directors of the Corporation, the Corporation may deliver
a notice to the holders of Series A Preferred Stock (an “
Optional Redemption Notice
” and the date such notice
is deemed delivered hereunder, the “
Optional Redemption Notice Date
”) of its irrevocable election to redeem
some or all of the then outstanding Series A Preferred Stock for cash in an amount equal to the Optional Redemption Amount (as
hereinafter defined) on the 20
th
business day following the Optional Redemption Notice Date (such date, the “
Optional
Redemption Date
”, such 20 business day period, the “
Optional Redemption Period
” and such redemption,
the “
Optional Redemption
”). The Optional Redemption Amount is payable in full on the Optional Redemption Date.
The Corporation’s determination to pay an Optional Redemption in cash shall be applied ratably to all of the holders of
the then outstanding Series A Preferred Stock. “
Optional Redemption Amount
” means the sum of (i) the product
of (x) 130% of the Stated Value and (y) the number of shares of Series A Preferred Stock to be redeemed and (ii) any unpaid Dividends.
(b)
Redemption Procedure
. The payment of cash pursuant to an Optional Redemption shall be payable on the Optional Redemption
Date. If any portion of the payment pursuant to an Optional Redemption shall not be paid by the Corporation by the applicable
due date, interest shall accrue thereon at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted
by applicable law until such amount is paid in full. Notwithstanding anything herein contained to the contrary, if any portion
of the Optional Redemption Amount remains unpaid after such date, the holder may elect, by written notice to the Corporation given
at any time thereafter, to invalidate such Optional Redemption,
ab initio
, and, with respect to the Corporation’s
failure to honor the Optional Redemption, the Corporation shall have no further right to exercise such Optional Redemption. Notwithstanding
anything to the contrary in this Section 6, the Corporation’s determination to redeem in cash or its elections under Section
6(b) shall be applied ratably among the holders of Series A Preferred Stock. The holders may elect to convert their shares pursuant
to Section 3 prior to actual payment in cash for any redemption under this Section 6 by the delivery of a Notice of Conversion
to the Corporation.
7.
Status of Converted Stock
.
In the event any shares of Preferred Stock shall be converted pursuant to Section 3 hereof,
the shares so converted shall be cancelled and shall not be issuable by the Corporation. This Amended and Restated Certificate
of Incorporation of the Corporation shall be appropriately amended to effect the corresponding reduction in the Corporation’s
authorized capital stock.
(a)
Undesignated Preferred Stock.
The undesignated Preferred Stock may be issued from time to time in one or more series.
The Board of Directors (or any committee to which it may duly delegate the authority granted in this Section (b) of Article IV)
is hereby empowered to authorize the issuance from time to time of shares of Preferred Stock in one or more series, for such consideration
and for such corporate purposes as the Board of Directors may from time to time determine, and by filing a certificate pursuant
to applicable law of the State of Delaware (hereinafter referred to as a “
Preferred Stock Designation
”) as
it presently exists or may hereafter be amended to establish from time to time for each such series the number of shares to be
included in each such series and to fix the designations, powers, rights and preferences of the shares of each such series, and
the qualifications, limitations and restrictions thereof to the fullest extent now or hereafter permitted by this Certificate
of Incorporation and the laws of the State of Delaware, including, without limitation, voting rights (if any), dividend rights,
dissolution rights, conversion rights, exchange rights and redemption rights thereof, as shall be stated and expressed in a resolution
or resolutions adopted by the Board of Directors (or such committee thereof) providing for the issuance of such series of Preferred
Stock. Each series of Preferred Stock shall be distinctly designated. The authority of the Board of Directors with respect to
each series of Preferred Stock shall include, but not be limited to, determination of the following:
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(i)
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The
designation of the series, which may be by distinguishing number, letter or title.
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(ii)
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The
number of shares of the series, which number the Board of Directors may thereafter (except where otherwise provided in the
Preferred Stock Designation) increase or decrease (but not below the number of shares thereof then outstanding).
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(iii)
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The
amounts payable on, and the preferences, if any, of shares of the series in respect of dividends, and whether such dividends,
if any, shall be cumulative or noncumulative.
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(iv)
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Dates
at which dividends, if any, shall be payable.
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(v)
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The
redemption rights and price or prices, if any, for shares of the series.
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(vi)
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The
terms and amount of any sinking fund provided for the purchase or redemption of shares of the series.
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(vii)
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The
amounts payable on, and the preferences, if any, of shares of the series in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation.
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(viii)
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Whether
the shares of the series shall be convertible into or exchangeable for shares of any other class or series, or any other security,
of the Corporation or any other corporation, and, if so, the specification of such other class or series or such other security,
the conversion or exchange price or prices or rate or rates, any adjustments thereof, the date or dates at which such shares
shall be convertible or exchangeable and all other terms and conditions upon which such conversion or exchange may be made.
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(ix)
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Restrictions
on the issuance of shares of the same series or of any other class or series.
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8.
The voting rights, if any, of the holders of shares of the series.
(C)
Common Stock
.
The holders of outstanding shares of Common Stock shall have the right to vote on all questions to
the exclusion of all other stockholders, each holder of record of Common Stock being entitled to one vote for each share of Common
Stock standing in the name of the stockholder on the books of the Corporation, except as may be provided in this Certificate of
Incorporation, in a Preferred Stock Designation (as hereinafter defined), or as required by law. Subject to the prior rights of
holders of all classes of stock at the time outstanding having prior rights as to dividends, the holders of the Common Stock shall
be entitled to receive, when, as and if declared by the Board of Directors, out of any assets of the Corporation legally available
therefor, such dividends as may be declared from time to time by the Board of Directors. The Common Stock is not redeemable.
Article
V
The
term of existence of the Corporation is to be perpetual.
Article
VI
The
number of the directors of the Corporation shall be determined in the manner provided in the Bylaws of the Corporation.
Article
VII
Each
director shall serve until such director’s successor is duly elected and qualified or until such director’s death,
resignation or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any
incumbent director.
Article
VIII
Subject
to the rights of the holders of any series of Preferred Stock with respect to such series of Preferred Stock, any action required
or permitted to be taken by the stockholders may be taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, shall be signed by the holders of record of 66 2/3 percent of the issued and outstanding
capital stock of the Corporation authorized by law or by this Certificate of Incorporation to vote on such action, and such writing
or writings are filed with the permanent records of the Corporation.
Article
IX
Subject
to the rights of the holders of any series of Preferred Stock with respect to such series of Preferred Stock, special meetings
of stockholders for the transaction of such business as may properly come before the meeting may only be called by order of the
Chairman of the Board of Directors, the Board of Directors (pursuant to a resolution adopted by a majority of the total number
of directors that the Corporation would have if there were no vacancies) or the Chief Executive Officer of the Corporation, and
shall be held at such date and time, within or without the State of Delaware, as may be specified by such order. If such order
fails to fix such place, the meeting shall be held at the principal executive offices of the Corporation.
Article
X
In
furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors of the
Corporation is expressly authorized to make, alter and repeal the Bylaws of the Corporation, subject to the power of the stockholders
of the Corporation to alter or repeal the Bylaws under applicable law as it presently exists or may hereafter be amended. Stockholders
of the Corporation are authorized to make, alter and repeal the Bylaws of the Corporation only pursuant to Article XIV of the
Bylaws of the Corporation.
Article
XI
A
director of the Corporation shall not be personally liable either to the Corporation or to any of its stockholders for monetary
damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is
not permitted under the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended. Any amendment
or modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director of the Corporation
hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.
Article
XII
(a)
Right to Indemnification
. The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable
law as it presently exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment
permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to
such amendment), any person (a “
Covered Person
”) who was or is a party or is threatened to be made a party
to, or is otherwise involved in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative in nature (a “
proceeding
”), by reason of the fact that such Covered Person, or a person for
whom he or she is the legal representative, is or was, at any time during which this Section (a) of Article XII is in effect (whether
or not such Covered Person continues to serve in such capacity at the time any indemnification or payment of expenses pursuant
hereto is sought or at the time any proceeding relating thereto exists or is brought), a director or officer of the Corporation,
or has or had agreed to become a director of the Corporation, or is or was serving at the request of the Corporation as a director,
officer, trustee, employee or agent of another corporation, limited liability company, partnership, joint venture, employee benefit
plan, trust, nonprofit entity or other enterprise, whether the basis of such proceeding is alleged action in an official capacity
as a director, officer, trustee, employee or agent or in any other capacity while serving as a director, officer, trustee, employee
or agent, against all liability and loss suffered (including, without limitation, any judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement) and expenses (including attorneys’ fees), actually and reasonably incurred by
such Covered Person in connection with such proceeding to the fullest extent permitted by law, and such indemnification shall
continue as to a person who has ceased to be a director, officer, trustee, employee or agent and shall inure to the benefit of
his or her heirs, executors and administrators; provided however, that, except as provided in Section (b) of this Article XII,
the Corporation shall be required to indemnify a person in connection with a proceeding (or part thereof) initiated by such person
only if the proceeding (or part thereof) was authorized by the Board of Directors. The right to indemnification conferred in this
Section (a) of Article XII and such rights as may be conferred in the Bylaws of the Corporation shall include the right to be
paid by the Corporation the expenses (including attorneys’ fees) incurred by a Covered Person in defending any such proceeding
in advance of its final disposition, in accordance with the Bylaws of the Corporation. The rights conferred upon Covered Persons
in this Section (a) of Article XII shall be contract rights that vest at the time of such person’s service to or at the
request of the Corporation and such rights shall continue as to a Covered Person who has ceased to be a director, officer, trustee,
employee or agent and shall inure to the benefit of the indemnitee’s heirs, executors and administrators. The Corporation
may, by action of the Board of Directors, provide indemnification to employees and agents of the Corporation with the same (or
lesser) scope and effect as the foregoing indemnification of directors and officers.
(b)
Right of Claimant to Bring Suit
. In accordance with the Bylaws of the Corporation, if a claim for indemnification under
Section (a) of this Article XII is not paid in full within sixty (60) days after a written claim has been received by the
Corporation
,
the Covered Person making such claim may at any time thereafter file suit to recover the unpaid amount of such claim and, if successful
in whole or in part, shall be entitled to be paid the expense of prosecuting such claim.
(c)
Non-Exclusivity of Rights
. In accordance with the Bylaws of the Corporation, the right to indemnification and the payment
of expenses incurred in defending a proceeding in advance of its final disposition conferred any Covered Person by Section (a)
of this Article XII (i) shall not be exclusive of any other rights which such Covered Person may have or hereafter acquire under
any statute, provision of this Certificate of Incorporation, the Bylaws, agreement, vote of stockholders or disinterested directors
or otherwise and (ii) cannot be terminated by the Corporation, the Board of Directors or the stockholders of the Corporation with
respect to a Covered Person’s service occurring prior to the date of such termination.
Article
XIII
The
Corporation may purchase and maintain insurance, at its expense, on behalf of any person who is or was a director, officer, employee
or agent of the Corporation, or is or was a director, officer, employee or agent of the Corporation serving at the request of
the Corporation as a director, officer, employee or agent of another corporation, limited liability company, partnership, joint
venture, trust, employee benefit plan or other enterprise against any liability, expense or loss asserted against such person
and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation
would have the power or the obligation to indemnify such person against such liability, expense or loss under the provisions of
the Bylaws of the Corporation or the General Corporation Law of the State of Delaware. To the extent that the Corporation maintains
any policy or policies providing such insurance, each such person shall be covered by such policy or policies in accordance with
its or their terms to the maximum extent of the coverage thereunder for any such person.
Article
XIV
In
furtherance and not in limitation of the powers conferred by the laws of the State of Delaware as they presently exist or may
hereafter be amended, subject to any limitations contained elsewhere in this Certificate of Incorporation, the Corporation may
adopt, amend or repeal this Certificate of Incorporation; provided that Articles VI, VII, VIII, IX, X, XII and this Article XIV
may only be amended or repealed by the affirmative vote of the holders of record of no less than 66 2/3% of the issued and outstanding
shares of the capital stock of the Corporation entitled to vote at the meeting, present in person or by proxy.
The
foregoing Amended and Restated Certificate of Incorporation has been duly adopted by this Corporation’s Board of Directors
and stockholders in accordance with the applicable provisions of Sections
228, 242 and 245
of the Delaware General Corporation.
IN
WITNESS WHEREOF, Wizard Entertainment, Inc. has caused this Amended and Restated Certificate of Incorporation to be signed by
its Chief Executive Officer and President this [__] day of [__], 2018.
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John
D. Maatta
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Chief
Executive Officer and President
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Exhibit
B
Amended
and Restated BYLAWS
of
Wizard
Entertainment, Inc.
ARTICLE
I
STOCKHOLDERS
SECTION
1.
Annual Meetings
.
The
annual meeting of stockholders of Wizard World, Inc. (the “
Corporation
”) for the election of directors and
for the transaction of such other business as may properly come before the meeting shall be held each fiscal year at such date
and time, within or without the State of Delaware, as the Board of Directors shall determine.
SECTION
2.
Notice of Meetings
.
Written
notice of all meetings of the stockholders, stating the place, date and time of the meeting, the means of remote communications,
if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the place at which
the list of stockholders may be examined, and the purpose or purposes for which the meeting is to be held, shall be mailed or
otherwise delivered (including pursuant to electronic transmission in the manner provided in Section 232 of the General Corporation
Law of the State of Delaware, except to the extent prohibited by Section 232(e) of the General Corporation Law of the State of
Delaware) to each stockholder of record entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days
prior to the date of the meeting and shall otherwise comply with applicable law. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail with postage thereon prepaid, addressed to the stockholder at his address as
it appears on the stock transfer books of the Corporation. Such further notice shall be given as may be required by law. If notice
is given by electronic transmission, such notice shall be deemed to be given at the times provided in the General Corporation
Law of the State of Delaware. Such further notice shall be given as may be required by law. Meetings may be held without notice
if all stockholders entitled to vote are present, or if notice is waived by those not present in accordance with these Bylaws.
Any previously scheduled meeting of the stockholders may be postponed, and (unless the Corporation’s Certificate of Incorporation
otherwise provides) any special meeting of the stockholders may be cancelled, by resolution of the Board of Directors upon public
notice given prior to the date previously scheduled for such meeting of stockholders.
SECTION
3.
Quorum and Adjournment
.
Except
as otherwise provided by law or the Corporation’s Certificate of Incorporation, a quorum for the transaction of business
at any meeting of stockholders shall consist of the holders of record of a majority of the issued and outstanding shares of the
capital stock of the Corporation entitled to vote generally in the election of directors, present in person or by proxy, except
that when specified business is to be voted on by a class or series of stock voting as a class, the holders of a majority of the
shares of such class or series shall constitute a quorum of such class or series for the transaction of such business. The Chairman
of the meeting or a majority of the shares so represented may adjourn the meeting from time to time, whether or not there is such
a quorum. No notice of the time and place of adjourned meetings need be given except as required by law. The stockholders present
at a duly called meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
SECTION
4.
Organization
.
Meetings
of stockholders shall be presided over by the Chairman, or if none or in the Chairman’s absence the Presiding Director,
or if none or in the Presiding Director’s absence, the Vice-Chairman, or if none or in the Vice-Chairman’s absence
the Chief Executive Officer, or in the Chief Executive Officer’s absence a Vice-President, or, if none of the foregoing
is present, by a chairman to be chosen by the stockholders entitled to vote who are present in person or by proxy at the meeting.
The Secretary of the Corporation, or in the Secretary’s absence an Assistant Secretary, shall act as secretary of every
meeting, but if neither the Secretary nor an Assistant Secretary is present, the presiding officer of the meeting shall appoint
any person present to act as secretary of the meeting.
SECTION
5.
Voting; Proxies; Required Vote
.
(a)
At each meeting of stockholders, every stockholder shall be entitled to vote in person or by proxy appointed by instrument in
writing, subscribed by such stockholder or by such stockholder’s duly authorized attorney in fact (but no such proxy shall
be voted or acted upon after three years from its date, unless the proxy provides for a longer period), and, unless the Certificate
of Incorporation provides otherwise, shall have one vote for each share of stock entitled to vote registered in the name of such
stockholder on the books of the Corporation on the applicable record date fixed pursuant to these Bylaws. Except as otherwise
provided by law, the Certificate of Incorporation or these Bylaws, in all matters other than the election of directors, which
shall be governed by Section 8 of this Article I, the affirmative vote of a majority of the shares present in person or represented
by proxy at the meeting and entitled to vote on the matter shall be the act of the stockholders.
(b)
When specified business is to be voted on by a class or series of stock voting as a class, the affirmative vote of the majority
of shares of such class or classes present in person or represented by proxy at the meeting shall be the act of such class, unless
otherwise provided in the Corporation’s Certificate of Incorporation.
SECTION
6.
Inspectors
.
The
Board of Directors, in advance of any meeting, may, but need not, appoint one or more inspectors of election to act at the meeting
or any adjournment thereof. If an inspector or inspectors are not so appointed, the person presiding at the meeting may, but need
not, appoint one or more inspectors. In case any person who may be appointed as an inspector fails to appear or act, the vacancy
may be filled by appointment made by the directors in advance of the meeting or at the meeting by the person presiding thereat.
Each inspector, if any, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute
the duties of inspector at such meeting with strict impartiality and according to the best of his ability. The inspectors, if
any, shall determine the number of shares of stock outstanding and the voting power of each, the shares of stock represented at
the meeting, the existence of a quorum, and the validity and effect of proxies, and shall receive votes, ballots or consents,
hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots
or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all stockholders.
On request of the person presiding at the meeting, the inspector or inspectors, if any, shall make a report in writing of any
challenge, question or matter determined by such inspector or inspectors and execute a certificate of any fact found by such inspector
or inspectors.
SECTION
7.
Notice of Stockholder Nominations and Other Business
.
(a)
Annual Meetings of Stockholders
.
(1)
Nominations of persons for election to the Board of Directors of the Corporation and the proposal of other business to be considered
by the stockholders may be made at an annual meeting of stockholders only (A) pursuant to the Corporation’s notice of meeting
(or any supplement thereto), (B) by or at the direction of the Board of Directors, or (C) by any stockholder of the Corporation
who (i) was a stockholder of record of the Corporation at the time the notice provided for in this Section 7 is delivered to the
Secretary of the Corporation and at the time of the annual meeting, (ii) is entitled to vote at the meeting, and (iii) complies
with the notice procedures set forth in this Section 7 as to such business or nomination. Clause (C) of the preceding sentence
shall be the exclusive means for a stockholder to make nominations or submit other business (other than matters properly brought
under Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”) and included in
the Corporation’s notice of meeting) before an annual meeting of stockholders.
(2)
Without qualification or limitation, for any nominations or any other business to be properly brought before an annual meeting
by a stockholder pursuant to clause (C) of paragraph (a)(1) of this Section 7, the stockholder must have given timely notice thereof
in writing to the Secretary of the Corporation and any such proposed business, other than the nominations of persons for election
to the Board of Directors, must constitute a proper matter for stockholder action. To be timely, a stockholder’s notice
shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business
on the one hundred twentieth (120th) day nor later than the close of business on the ninetieth (90th) day prior to the first anniversary
of the preceding year’s annual meeting (provided, however, that in the event that the date of the annual meeting is more
than thirty (30) days before or more than seventy (70) days after such anniversary date, notice by the stockholder must be so
delivered not earlier than the close of business on the one hundred twentieth (120th) day prior to such annual meeting and not
later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or, if the first public
announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the tenth (10th)
day following the day on which public announcement of the date of such meeting is first made by the Corporation). In no event
shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any
time period) for the giving of a stockholder’s notice as described above.
(3)
To be in proper form, a stockholder’s notice delivered pursuant to this Section 7 must set forth: (A) as to each person,
if any, whom the stockholder proposes to nominate for election or reelection as a director (i) all information relating to such
person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations
of proxies for election of directors in contested election, or is otherwise required, in each case pursuant to and in accordance
with Regulation 14A under the Exchange Act, (ii) such person’s written consent to being named in the proxy statement as
a nominee and to serving as a director if elected and (iii) a description of all direct and indirect compensation and other material
monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between
or among such stockholder and beneficial owner, if any, and their respective affiliates and associates, or others acting in concert
therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in
concert therewith, on the other hand, including, without limitation all information that would be required to be disclosed pursuant
to Rule 404 promulgated under Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf
the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant”
for purposes of such rule and the nominee were a director or executive officer of such registrant; (B) if the notice relates to
any business other than a nomination of a director or directors that the stockholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the meeting, the text of the proposal or business (including the text
of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws of the
Corporation, the language of the proposed amendment), the reasons for conducting such business at the meeting and any material
interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made, and a description
of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and any other person
or persons (including their names) in connection with the proposal of such business by such stockholder; and (C) as to the stockholder
giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address
of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, if any, (ii) (a) the class
or series and number of shares of capital stock of the Corporation which are, directly or indirectly, owned beneficially and of
record by such stockholder and such beneficial owner, (b) any option, warrant, convertible security, stock appreciation right,
or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class
or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares
of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of
capital stock of the Corporation or otherwise (a “
Derivative Instrument
”) directly or indirectly owned beneficially
by such stockholder and any other direct or indirect opportunity to profit or share in any profit derived from any increase or
decrease in the value of shares of the Corporation, (c) any proxy, contract, arrangement, understanding, or relationship pursuant
to which such stockholder has a right to vote any shares of any security of the Company, (d) any short interest in any security
of the Company (for purposes of this By-law a person shall be deemed to have a short interest in a security if such person directly
or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share
in any profit derived from any decrease in the value of the subject security), (e) any rights to dividends on the shares of the
Corporation owned beneficially by such stockholder that are separated or separable from the underlying shares of the Corporation,
(f) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general
or limited partnership in which such stockholder is a general partner or, directly or indirectly, beneficially owns an interest
in a general partner and (g) any performance-related fees (other than an asset-based fee) that such stockholder is entitled to
based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, as of the date
of such notice, including without limitation any such interests held by members of such stockholder’s immediate family sharing
the same household, (iii) a description of any agreement, arrangement or understanding with respect to the nomination or proposal
between or among such stockholder and such beneficial owner, any of their respective affiliates or associates, and any others
acting in concert with any of the foregoing, (iv) a representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business
or nomination, (v) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which
intends (a) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s
outstanding capital stock required to approve or adopt the proposal or elect the nominee or (b) otherwise to solicit proxies from
stockholders in support of such proposal or nomination, and (vi) any other information relating to such stockholder and beneficial
owner, if any, that would be required to be disclosed in a proxy statement or other filings required to be made in connection
with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant
to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. In addition, the stockholder’s notice
with respect to the election of directors must include, with respect to each nominee for election or reelection to the Board of
Directors, the completed and signed questionnaire, representation and agreement required by Section 9 of this Article I. The Corporation
may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of
such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable stockholder’s
understanding of the independence, or lack thereof, of such nominee. Notwithstanding the foregoing, the information required by
clauses (a)(3)(C)(ii) and (a)(3)(C)(iii) of this Section 7 shall be updated by such stockholder and beneficial owner, if any,
not later than 10 days after the record date for the meeting to disclose such information as of the record date.
(4)
Notwithstanding anything in the second sentence of paragraph (a)(2) of this Section 7 to the contrary, in the event that the number
of directors to be elected to the Board of Directors of the Corporation at an annual meeting is increased and there is no public
announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors
at least one hundred (100) days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s
notice required by this Section 7 shall also be considered timely, but only with respect to nominees for any new positions created
by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than
the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.
(b)
Special Meetings of Stockholders
. Only such business shall be conducted at a special meeting of stockholders as shall have
been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to
the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s
notice of meeting (1) by or at the direction of the Board of Directors, or (2) provided that the Board of Directors has determined
that directors shall be elected at such meeting, by any stockholder of the Corporation who (i) is a stockholder of record of the
Corporation at the time the notice provided for in this Section 7 is delivered to the Secretary of the Corporation and at the
time of the special meeting, (ii) is entitled to vote at the meeting and upon such election, and (iii) complies with the notice
procedures set forth in this Section 7 as to such nomination. In the event the Corporation calls a special meeting of stockholders
for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons
(as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s
notice required by paragraph (a)(3) hereof with respect to any nomination (including the completed and signed questionnaire, representation
and agreement required by this By-law) shall be delivered to the Secretary at the principal executive offices of the Corporation
not earlier than the close of business on the one hundred twentieth (120th) day prior to such special meeting and not later than
the close of business on the later of the ninetieth (90th) day prior to such special meeting or, if the first public announcement
of the date of such special meeting is less than 100 days prior to the date of such special meeting, the tenth (10th) day following
the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board
of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special
meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(c)
General
.
(1)
Only such persons who are nominated in accordance with the procedures set forth in this Section 7 or the Certificate of Incorporation
shall be eligible to be elected at an annual or special meeting of stockholders of the Corporation to serve as directors and only
such other business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance
with the procedures set forth in this Section 7. Except as otherwise provided by law, the Certificate of Incorporation or these
Bylaws, the person presiding at the meeting of stockholders shall have the power and duty (A) to determine whether a nomination
or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the
procedures set forth in this Section 7 (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination
or proposal is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support
of such stockholder’s nominee or proposal in compliance with such stockholder’s representation as required by clause
(a)(3)(C)(v) of this Section 7) and (B) if any proposed nomination or other business was not made or proposed in compliance with
this Section 7, to declare that such nomination shall be disregarded or that such proposed other business shall not be transacted.
Notwithstanding the foregoing provisions of this Section 7, if the stockholder (or a qualified representative of the stockholder)
does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or other business,
such nomination shall be disregarded and such proposed other business shall not be transacted, notwithstanding that proxies in
respect of such vote may have been received by the Corporation. For purposes of this Section 7, to be considered a qualified representative
of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by
a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder
as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction
of the writing or electronic transmission, at the meeting of stockholders.
(2)
For purposes of this Section 7, “public announcement” shall mean disclosure in a press release reported by a national
news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section
13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder.
(3)
Notwithstanding the foregoing provisions of this Section 7, a stockholder shall also comply with all applicable requirements of
the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 7; provided however,
that any references in these Bylaws to the Exchange Act or the rules promulgated thereunder are not intended to and shall not
limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Section
7 (including clause (a)(1)(C) and paragraph (b) hereof), and compliance with clause (a)(1)(C) and paragraph (b) of this Section
7 shall be the exclusive means for a stockholder to make nominations or submit other business, as applicable (other than matters
brought properly under and in compliance with Rule 14a-8 of the Exchange Act, as may be amended from time to time). Nothing in
this Section 7 shall be deemed to affect any rights (A) of stockholders to request inclusion of proposals in the Corporation’s
proxy statement pursuant to Rule 14a-8 of the Exchange Act or (B) of the holders of any class or series of stock having a preference
over the common stock of the Corporation as to dividends or upon liquidation (“
Preferred Stock
”) to elect directors
pursuant to any applicable provisions of the Certificate of Incorporation.
SECTION
8.
Required Vote for Directors
.
At
any meeting of stockholders for the election of one or more directors at which a quorum is present, the election shall be determined
by a plurality of the votes cast by the stockholders entitled to vote at the election.
SECTION
9.
Submission of Questionnaire, Representation and Agreement
.
To
be eligible to be a nominee for election or reelection as a director of the Corporation, a person must deliver (in accordance
with the time periods prescribed for delivery of notice under Article I, Section 7 of these Bylaws) to the Secretary at the principal
executive offices of the Corporation a written questionnaire with respect to the background and qualification of such person and
the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided
by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon
written request) that such person (a) is not and will not become a party to (1) any agreement, arrangement or understanding with,
and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the
Corporation, will act or vote on any issue or question (a “
Voting Commitment
”) that has not been disclosed
to the Corporation or (2) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected
as a director of the Corporation, with such person’s fiduciary duties under applicable law as it presently exists or may
hereafter be amended, (b) is not and will not become a party to any agreement, arrangement or understanding with any person or
entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection
with service or action as a director that has not been disclosed therein, and (c) in such person’s individual capacity and
on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director
of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality
and stock ownership and trading policies and guidelines of the Corporation.
SECTION
10.
Removal of Director
.
Except
as otherwise provided by law or the Certificate of Incorporation, and subject to the rights of the holders of any series of Preferred
Stock with respect to such series of Preferred Stock, the stockholders holding a majority of the shares then entitled to vote
at an election of directors, acting at a duly called annual meeting or a duly called special meeting of the stockholders, at which
there is a proper quorum and where notice has been provided in accordance with Section 7 of this Article I, may remove a director
or directors of the Corporation only with cause. Vacancies in the Board of Directors resulting from such removal shall be filled
in accordance with Section 12 of Article II.
ARTICLE
II
BOARD
OF DIRECTORS
SECTION
1.
General Powers
.
The
business, property and affairs of the Corporation shall be managed by, or under the direction of, the Board of Directors. In addition
to the powers and authorities by these Bylaws expressly conferred upon them, the Board of Directors may exercise all such powers
of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these
Bylaws required to be exercised or done by the stockholders.
SECTION
2.
Qualification; Number; Term; Remuneration
.
(a)
Each director shall be at least 18 years of age. A director need not be a stockholder, a citizen of the United States, or a resident
of the State of Delaware. The total number of directors that the Corporation would have if there were no vacancies (the “
Whole
Board
”) shall be fixed from time to time exclusively by action of the Board of Directors, one of whom may be selected
by the Board of Directors to be its Chairman.
(b)
Each director shall be elected annually by the stockholders of the Corporation. Directors shall hold office until the next annual
meeting and until their successors shall be duly elected and qualified. Except as provided in Section 12 of this Article II, each
director shall be elected by the vote of a majority of the votes cast with respect to the director at any meeting for the election
of directors at which a quorum is present, provided that if the number of nominees exceeds the number of directors to be elected,
the directors shall be elected by the vote of a plurality of the shares represented in person or by proxy at any such meeting
and entitled to vote on the election of directors. For purposes of this Section, a “majority of votes cast” means
that the number of shares voted “for” a director must exceed the number of votes cast against that director. The
Board shall establish procedures under which any director who is not elected shall tender his or her resignation to the Board.
The Board will decide whether to accept or reject the resignation, or whether other action should be taken. The Board will publicly
disclose its decision and the rationale behind it within ninety (90) days from the date of the certification of the election results.
If, for any cause, the board of Directors shall not have been elected at an annual meeting, they may be elected as soon thereafter
as convenient at a special meeting of the stockholders called for that purpose in the manner provided in these Bylaws.
(c)
Directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and Directors who are not
employees of the Corporation may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary
as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be allowed like compensation for committee service.
SECTION
3.
Quorum and Manner of Voting
.
Except
as otherwise provided by law or in these Bylaws, a majority of the Whole Board shall constitute a quorum. A majority of the directors
present, whether or not a quorum is present, may adjourn a meeting from time to time to another time and place without notice.
The vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.
The directors present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal
of enough directors to leave less than a quorum.
SECTION
4.
Places of Meetings
.
Meetings
of the Board of Directors may be held at any place within or without the State of Delaware, as may from time to time be fixed
by resolution of the Board of Directors, or as may be specified in the notice of meeting.
SECTION
5.
Regular Meetings
.
Regular
meetings of the Board of Directors shall be held at such times and places as the Board of Directors shall from time to time by
resolution determine. Notice need not be given of regular meetings of the Board of Directors held at times and places fixed by
resolution of the Board of Directors.
SECTION
6.
Special Meetings
.
Special
meetings of the Board of Directors shall be held whenever called by the Chairman of the Board, Presiding Director, Chief Executive
Officer or by a majority of the directors then in office.
SECTION
7.
Notice of Meetings
.
A
notice of the place, date and time and the purpose or purposes of each special meeting of the Board of Directors shall be given
to each director by mail, personal delivery, electronic transmission or telephone at least two (2) days before the day of the
meeting. Notice shall be deemed to be given at the time of mailing, but the said two (2) days’ notice need not be given
to any director who consents in writing, whether before or after the meeting, or who attends the meeting without protesting prior
thereto or at its commencement, the lack of notice to him.
SECTION
8.
Chairman of the Board
.
Except
as otherwise provided by law, the Certificate of Incorporation, or in Section 9 of this Article II, the Chairman of the Board
of Directors, if there be one, shall preside at all meetings of the Board of Directors and shall have such other powers and duties
as may from time to time be assigned by the Board of Directors.
SECTION
9.
Presiding Director
.
If
at any time the Chairman of the Board shall be an executive officer or former executive officer of the Corporation or for any
reason shall not be an independent director, a Presiding Director shall be selected by the independent directors from among the
directors who are not executive officers or former executive officers of the Corporation and are otherwise independent. If the
Chairman of the Board of Directors is not present, the Presiding Director shall chair meetings of the Board of Directors. The
Presiding Director shall chair any meeting of the independent Directors and shall also perform such other duties as may be assigned
to the Presiding Director by these Bylaws or the Board of Directors.
SECTION
10.
Organization
.
At
all meetings of the Board of Directors, the Chairman, or if none or in the Chairman’s absence or inability to act the Presiding
Director, or if none or in the Presiding Director’s absence or inability to act, the Chief Executive Officer, or in the
Chief Executive Officer’s absence or inability to act any Vice-President who is a member of the Board of Directors, or if
none, or in such Vice-President’s absence or inability to act a chairman chosen by the directors, shall preside. The Secretary
of the Corporation shall act as secretary at all meetings of the Board of Directors when present, and, in the Secretary’s
absence, the presiding officer may appoint any person to act as secretary.
SECTION
11.
Resignation
.
Any
director may resign at any time upon written notice to the Corporation and such resignation shall take effect upon receipt thereof
by the Chief Executive Officer or Secretary, unless otherwise specified in the resignation.
SECTION
12.
Vacancies
.
Subject
to applicable law and the rights of the holders of any series of Preferred Stock with respect to such series of Preferred Stock,
and unless the Board of Directors otherwise determines, newly created directorships resulting from any increase in the authorized
number of directors will be filled by a majority of the Board of Directors then in office, provided that a majority of the Whole
Board of Directors, or a quorum, is present and any vacancies in the Board of Directors resulting from death, resignation, retirement,
disqualification, removal from office or other cause will be filled generally by the majority vote of the remaining directors
in office, even if less than a quorum is present.
SECTION
13.
Conference Telephone Meetings
.
Members
of the Board of Directors, or any committee thereof, may participate in a meeting of the Board of Directors or such committee
by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting
can hear each other, and such participation in a meeting shall constitute presence in person at such meeting.
SECTION
14.
Action by Written Consent
.
Any
action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if all the directors
consent thereto in writing (which may be provided by electronic transmission), and such writing or writings are filed with the
minutes of proceedings of the Board of Directors.
ARTICLE
III
COMMITTEES
SECTION
1.
Appointment
.
From
time to time the Board of Directors by a resolution adopted by a majority of the Whole Board may appoint any committee or committees
for any purpose or purposes, to the extent lawful, which shall have powers as shall be determined and specified by the Board of
Directors in the resolution of appointment. The Board shall have power at any time to fill vacancies in, to change the membership
of, or to dissolve any such committee. Nothing herein shall be deemed to prevent the Board from appointing one or more committees
consisting in whole or in part of persons who are not directors of the Corporation;
provided
,
however
, that no such
committee shall have or may exercise any authority of the Board.
SECTION
2.
Procedures, Quorum and Manner of Acting
.
Each
committee shall fix its own rules of procedure, and shall meet where and as provided by such rules or by resolution of the Board
of Directors. Except as otherwise provided by law, the presence of a majority of the then appointed members of a committee shall
constitute a quorum for the transaction of business by that committee, and in every case where a quorum is present the affirmative
vote of a majority of the members of the committee present shall be the act of the committee. In the absence or disqualification
of any member of such committee or committees, the member or members thereof present at any meeting and not disqualified from
voting, whether or not constituting a quorum, may unanimously appoint another member of the Board to act at the meeting in the
place of any such absent or disqualified member. Each committee shall keep minutes of its proceedings, and actions taken by a
committee shall be reported to the Board of Directors.
SECTION
3.
Action by Written Consent
.
Any
action required or permitted to be taken at any meeting of any committee of the Board of Directors may be taken without a meeting
if all the members of the committee consent thereto in writing (which may be provided by electronic transmission), and such writing
or writings are filed with the minutes of proceedings of the committee.
SECTION
4.
Term; Termination
.
In
the event any person shall cease to be a director of the Corporation, such person shall simultaneously therewith cease to be a
member of any committee appointed by the Board of Directors.
ARTICLE
IV
OFFICERS
SECTION
1.
Election and Qualifications
.
The
Board of Directors shall elect the officers of the Corporation, which shall include a Chief Executive Officer and a Secretary,
and may include, by election or appointment, one or more Vice-Presidents (any one or more of whom may be given an additional designation
of rank or function), a Treasurer and such other officers as the Board may from time to time deem proper. Each officer shall have
such powers and duties as may be prescribed by these Bylaws and as may be assigned by the Board of Directors or the Chief Executive
Officer. Any two or more offices may be held by the same person.
SECTION
2.
Term of Office and Remuneration
.
The
term of office of all officers shall be one year and until their respective successors have been elected and qualified, but any
officer may be removed from office, either with or without cause, at any time by the Board of Directors. Any vacancy in any office
arising from any cause may be filled for the unexpired portion of the term by the Board of Directors. The remuneration of all
officers of the Corporation may be fixed by the Board of Directors or in such manner as the Board of Directors shall provide.
SECTION
3.
Resignation; Removal
.
Any
officer may resign at any time upon written notice to the Corporation and such resignation shall take effect upon receipt thereof
by the Chief Executive Officer or Secretary, unless otherwise specified in the resignation. Any officer shall be subject to removal,
with or without cause, at any time by vote of a majority of the Whole Board.
SECTION
4.
Chief Executive Officer
.
The
Chief Executive Officer shall have such duties as customarily pertain to that office. The Chief Executive Officer shall have general
management and supervision of the property, business and affairs of the Corporation and over its other officers; may appoint and
remove assistant officers and other agents and employees, other than officers referred to in Section 1 of this Article IV; and
may execute and deliver in the name of the Corporation powers of attorney, contracts, bonds and other obligations and instruments.
SECTION
5.
Vice-President
.
A
Vice-President may execute and deliver in the name of the Corporation contracts and other obligations and instruments pertaining
to the regular course of the duties of said office, and shall have such other authority as from time to time may be assigned by
the Board of Directors or the Chief Executive Officer.
SECTION
6.
Treasurer
.
The
Treasurer shall in general have all duties incident to the position of Treasurer and such other duties as may be assigned by the
Board of Directors or the Chief Executive Officer.
SECTION
7.
Secretary
.
The
Secretary shall in general have all the duties incident to the office of Secretary and such other duties as may be assigned by
the Board of Directors or the Chief Executive Officer.
SECTION
8.
Assistant Officers
.
Any
assistant officer shall have such powers and duties of the officer such assistant officer assists as such officer or the Board
of Directors shall from time to time prescribe.
ARTICLE
V
BOOKS
AND RECORDS
SECTION
1.
Location
.
The
books and records of the Corporation may be kept at such place or places within or outside the State of Delaware as the Board
of Directors or the respective officers in charge thereof may from time to time determine. The record books containing the names
and addresses of all stockholders, the number and class of shares of stock held by each and the dates when they respectively became
the owners of record thereof shall be kept by the Secretary and by such officer or agent as shall be designated by the Board of
Directors.
SECTION
2.
Addresses of Stockholders
.
Notices
of meetings and all other corporate notices may be delivered (a) personally or mailed to each stockholder at the stockholder’s
address as it appears on the records of the Corporation, or (b) any other method permitted by applicable law and rules and regulations
of the Securities and Exchange Commission as they presently exist or may hereafter be amended.
SECTION
3.
Fixing Date for Determination of Stockholders of Record
.
(a)
In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board of Directors and which record date shall not be more than sixty
(60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the Board of Directors, the record
date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business
on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at
a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix
a new record date for the adjourned meeting.
(b)
In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting,
the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors and which date shall not be more than ten (10) days after the date upon which
the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors,
the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior
action by the Board of Directors is required, shall be the first date on which a signed written consent setting forth the action
taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in this State, its principal
place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders
are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail,
return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors
is required by this chapter, the record date for determining stockholders entitled to consent to corporate action in writing without
a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior
action.
(c)
In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution
or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange
of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors and which record date
shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders
for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating
thereto.
ARTICLE
VI
STOCK
SECTION
1.
Stock; Signatures
.
Shares
of the Corporation’s stock may be evidenced by certificates for shares of stock or may be issued in uncertificated form
in accordance with applicable law as it presently exists or may hereafter be amended. The Board of Directors of the Corporation
may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated
shares. Any such resolution or the issuance of shares in uncertificated form shall not affect shares already represented by a
certificate until such certificate is surrendered to the Corporation. Every holder of shares of stock in the Corporation that
is represented by certificates shall be entitled to have a certificate certifying the number of shares owned by him in the Corporation
and registered in certificated form. Stock certificates shall be signed by or in the name of the Corporation by the Chairman or
Vice Chairman of the Board of Directors, or the Chief Executive Officer or Vice-President, and by the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the Corporation, representing the number of shares registered in certificate
form. Any and all signatures on any such certificate may be facsimiles. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue. The name of the holder of record of the shares represented by certificated or
uncertificated shares, with the number of such shares and the date of issue, shall be entered on the books of the Corporation.
SECTION
2.
Transfers of Stock
.
Transfers
of shares of stock of the Corporation shall be made on the books of the Corporation after receipt of a request with proper evidence
of succession, assignation, or authority to transfer by the record holder of such stock, or by an attorney lawfully constituted
in writing, and in the case of stock represented by a certificate, upon surrender of the certificate. Subject to the foregoing,
the Board of Directors may make such rules and regulations as it shall deem necessary or appropriate concerning the issue, transfer
and registration of shares of stock of the Corporation, and to appoint and remove transfer agents and registrars of transfers.
SECTION
3.
Fractional Shares
.
The
Corporation may, but shall not be required to, issue certificates for fractions of a share where necessary to effect authorized
transactions, or the Corporation may pay in cash the fair value of fractions of a share as of the time when those entitled to
receive such fractions are determined, or it may issue scrip in registered or bearer form over the manual or facsimile signature
of an officer of the Corporation or of its agent, exchangeable as therein provided for full shares, but such scrip shall not entitle
the holder to any rights of a stockholder except as therein provided.
SECTION
4.
Lost, Stolen or Destroyed Certificates
.
The
Corporation may issue a new certificate of stock or uncertificated shares in place of any certificate, theretofore issued by it,
alleged to have been lost, stolen or destroyed, and the Board of Directors may require the owner of any lost, stolen or destroyed
certificate, or his legal representative, to give the Corporation a bond sufficient to indemnify the Corporation against any claim
that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of any
such new certificate or uncertificated shares.
ARTICLE
VII
DIVIDENDS
Subject
always to the provisions of law and the Certificate of Incorporation, the Board of Directors shall have full power to determine
whether any, and, if any, what part of any, funds legally available for the payment of dividends shall be declared as dividends
and paid to stockholders; the division of the whole or any part of such funds of the Corporation shall rest wholly within the
lawful discretion of the Board of Directors, and it shall not be required at any time, against such discretion, to divide or pay
any part of such funds among or to the stockholders as dividends or otherwise; and before payment of any dividend, there may be
set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to
time, in its absolute discretion, thinks proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or
for repairing or maintaining any property of the Corporation, or for such other purpose as the Board of Directors shall think
conducive to the interest of the Corporation, and the Board of Directors may modify or abolish any such reserve in the manner
in which it was created.
ARTICLE
VIII
RATIFICATION
Any
transaction, questioned in any law suit on the ground of lack of authority, defective or irregular execution, adverse interest
of director, officer or stockholder, non disclosure, miscomputation, or the application of improper principles or practices of
accounting, may be ratified before or after judgment, by the Board of Directors or by the stockholders, and if so ratified shall
have the same force and effect as if the questioned transaction had been originally duly authorized. Such ratification shall be
binding upon the Corporation and its stockholders and shall constitute a bar to any claim or execution of any judgment in respect
of such questioned transaction.
ARTICLE
IX
CORPORATE
SEAL
The
corporate seal shall have inscribed thereon the name of the Corporation and the year of its incorporation, and shall be in such
form and contain such other words and/or figures as the Board of Directors shall determine. The corporate seal may be used by
printing, engraving, lithographing, stamping or otherwise making, placing or affixing, or causing to be printed, engraved, lithographed,
stamped or otherwise made, placed or affixed, upon any paper or document, by any process whatsoever, an impression, facsimile
or other reproduction of said corporate seal.
ARTICLE
X
FISCAL
YEAR
The
fiscal year of the Corporation shall be fixed, and shall be subject to change, by the Board of Directors.
ARTICLE
XI
WAIVER
OF NOTICE
Whenever
notice is required to be given by these Bylaws or by the Certificate of Incorporation or by law, the person or persons entitled
to said notice may consent in writing, whether before or after the time stated therein, to waive such notice requirement. Notice
shall also be deemed waived by any person who attends a meeting without protesting prior thereto or at its commencement, the lack
of notice to him.
ARTICLE
XII
BANK
ACCOUNTS, DRAFTS, CONTRACTS, ETC.
SECTION
1.
Bank Accounts and Drafts
.
In
addition to such bank accounts as may be authorized by the Board of Directors, the primary financial officer or any person designated
by said primary financial officer, whether or not an employee of the Corporation, may authorize such bank accounts to be opened
or maintained in the name and on behalf of the Corporation as he may deem necessary or appropriate, payments from such bank accounts
to be made upon and according to the check of the Corporation in accordance with the written instructions of said primary financial
officer, or other person so designated by the Treasurer.
SECTION
2.
Contracts
.
The
Board of Directors may authorize any person or persons, in the name and on behalf of the Corporation, to enter into or execute
and deliver any and all deeds, bonds, mortgages, contracts and other obligations or instruments, and such authority may be general
or confined to specific instances.
SECTION
3.
Proxies; Powers of Attorney; Other Instruments
.
The
Chairman, the Chief Executive Officer or any other person designated by either of them shall have the power and authority to execute
and deliver proxies, powers of attorney and other instruments on behalf of the Corporation in connection with the rights and powers
incident to the ownership of stock by the Corporation. The Chairman, the Chief Executive Officer or any other person authorized
by proxy or power of attorney executed and delivered by either of them on behalf of the Corporation may attend and vote at any
meeting of stockholders of any company in which the Corporation may hold stock, and may exercise on behalf of the Corporation
any and all of the rights and powers incident to the ownership of such stock at any such meeting, or otherwise as specified in
the proxy or power of attorney so authorizing any such person. The Board of Directors, from time to time, may confer like powers
upon any other person.
SECTION
4.
Financial Reports
. The Board of Directors may appoint the primary financial officer or other fiscal officer or any other
officer to cause to be prepared and furnished to stockholders entitled thereto any special financial notice and/or financial statement,
as the case may be, which may be required by any provision of law.
ARTICLE
XIII
INDEMNIFICATION
OF DIRECTORS AND OFFICERS
SECTION
1.
The
Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), any person
(a “
Covered Person
”) who was or is a party or is threatened to be made a party to, or is otherwise involved
in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative
in nature (a “
proceeding
”), by reason of the fact that such Covered Person, or a person for whom he or she
is the legal representative, is or was, at any time during which these Bylaws are in effect (whether or not such Covered Person
continues to serve in such capacity at the time any indemnification or payment of expenses pursuant hereto is sought or at the
time any proceeding relating thereto exists or is brought), a director or officer of the Corporation, or has or had agreed to
become a director of the Corporation, or is or was serving at the request of the Corporation as a director, officer, trustee,
employee or agent of another corporation, limited liability company, partnership, joint venture, employee benefit plan, trust,
nonprofit entity or other enterprise, whether the basis of such proceeding is alleged action in an official capacity as a director,
officer, trustee, employee or agent or in any other capacity while serving as a director, officer, trustee, employee or agent,
against all liability and loss suffered (including, without limitation, any judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) and expenses (including attorneys’ fees), actually and reasonably incurred by such Covered
Person in connection with such proceeding to the fullest extent permitted by law, and such indemnification shall continue as to
a person who has ceased to be a director, officer, trustee, employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators, and the Corporation may enter into agreements with any such person for the purpose of providing
for such indemnification. Except as provided in Section 3 of this Article XIII, the Corporation shall be required to indemnify
a person in connection with a proceeding (or part thereof) initiated by such person only if the proceeding (or part thereof) was
authorized by the Board of Directors. The right to indemnification conferred in this Article XIII shall include the right to be
paid by the Corporation the expenses (including attorneys’ fees) incurred by a Covered Person in defending any such proceeding
in advance of its final disposition, such advances to be paid by the Corporation within sixty (60) days after the receipt by the
Corporation of a statement or statements from the claimant requesting such advance or advances from time to time (and subject
to filing a written request for indemnification pursuant to Section 2 of this Article XIII); provided, however, the payment of
such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee
benefit plan) shall be made only upon receipt of an undertaking by or on behalf of the Covered Person to repay all amounts advanced
if it shall ultimately be determined by final judicial decision from which there is no further right of appeal that the Covered
Person is not entitled to be indemnified by the Corporation for such expenses under this Article XIII or otherwise. The rights
conferred upon Covered Persons in this Article XIII shall be contract rights that vest at the time of such person’s service
to or at the request of the Corporation and such rights shall continue as to a Covered Person who has ceased to be a director,
officer, trustee, employee or agent and shall inure to the benefit of the indemnitee’s heirs, executors and administrators.
SECTION
2.
To
obtain indemnification under this Article XIII, a claimant shall submit to the Corporation a written request, including therein
or therewith such documentation and information as is reasonably available to the claimant and is reasonably necessary to determine
whether and to what extent the claimant is entitled to indemnification. Upon written request by a claimant for indemnification
pursuant to the first sentence of this Section 2 of Article XIII, a determination, if required by applicable law, with respect
to the claimant’s entitlement thereto shall be made as follows: (a) if requested by the claimant, by Independent Counsel
(as hereinafter defined), or (b) if no request is made by the claimant for a determination by Independent Counsel, (1) by the
Board of Directors by a majority vote of a quorum consisting of Disinterested Directors (as hereinafter defined), or (2) if a
quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of
Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall
be delivered to the claimant, or (3) if a quorum of Disinterested Directors so directs, by the stockholders of the Corporation.
In the event the determination of entitlement to indemnification is to be made by Independent Counsel at the request of the claimant,
the Independent Counsel shall be selected by the Board of Directors unless there shall have occurred within two (2) years prior
to the date of the commencement of the action, suit or proceeding for which indemnification is claimed a “Change of Control”
as defined in the GenMark Diagnostics, Inc. 2010 Equity Incentive Plan, in which case the Independent Counsel shall be selected
by the claimant unless the claimant shall request that such selection be made by the Board of Directors. If it is so determined
that the claimant is entitled to indemnification, payment to the claimant shall be made within sixty (60) days after such determination.
SECTION
3.
If
a claim for indemnification under Section 1 of this Article XIII is not paid in full within sixty (60) days after a written claim
pursuant to Section 2 of this Article XIII has been received by the Corporation, the claimant may at any time thereafter file
suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense
of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where the required undertaking has been tendered to the
Corporation) that the claimant has not met the standard of conduct which makes it permissible under the General Corporation Law
of the State of Delaware for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such
defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, Independent Counsel
or stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is
proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation
Law of the State of Delaware, nor an actual determination by the Corporation (including its Board of Directors, Independent Counsel
or stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create
a presumption that the claimant has not met the applicable standard of conduct.
SECTION
4.
The
right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred
on any Covered Person by this Article XIII (a) shall not be exclusive of any other rights which such Covered Person may have or
hereafter acquire under any statute, provision of these Bylaws, agreement, vote of stockholders or Disinterested Directors or
otherwise and (b) cannot be terminated by the Corporation, the Board of Directors or the stockholders of the Corporation with
respect to a Covered Person’s service occurring prior to the date of such termination. However, notwithstanding the foregoing,
the Corporation’s obligation to indemnify or to advance expenses to any Covered Person who was or is serving at its request
as a director, officer, employee or agent of another corporation, limited liability company, partnership, joint venture, trust,
enterprise or nonprofit entity shall be reduced by any amount such person has collected as indemnification from such other corporation,
limited liability company, partnership, joint venture, trust, nonprofit entity, or other enterprise; and, in the event the Corporation
has fully paid such expenses, the Covered Person shall return to the Corporation any amounts subsequently received from such other
source of indemnification.
SECTION
5.
Any
repeal, amendment, alteration or modification of the provisions of this Article XIII that in any way diminishes, limits, restricts,
adversely affects or eliminates any right of an indemnitee or his or her successors to indemnification, advancement of expenses
or otherwise shall be prospective only and shall not in any way diminish, limit, restrict, adversely affect or eliminate any such
right with respect to any actual or alleged state of facts, occurrence, action or omission then or previously existing, or any
action, suit or proceeding previously or thereafter brought or threatened based in whole or in part upon any such actual or alleged
state of facts, occurrence, action or omission.
SECTION
6.
This
Article XIII shall not limit the right of the Corporation, to the extent and in the manner permitted by law, to indemnify and
advance expenses to persons other than Covered Persons when and as authorized by the Board of Directors.
SECTION
7.
If
any provision or provisions of this Article XIII shall be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of the remaining provisions of this Article XIII (including, without limitation,
each portion of any paragraph of this Article XIII containing any such provision held to be invalid, illegal or unenforceable,
that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b)
to the fullest extent possible, the provisions of this Article XIII (including, without limitation, each such portion of any paragraph
of this Article XIII containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or unenforceable.
SECTION
8.
For
purposes of this Article XIII:
(1)
“Disinterested Director” means a director of the Corporation who is not and was not a party to the matter in respect
of which indemnification is sought by the claimant.
(2)
“Independent Counsel” means a law firm, a member of a law firm, or an independent practitioner, that is experienced
in matters of corporation law and shall include any person who, under the applicable standards of professional conduct then prevailing,
would not have a conflict of interest in representing either the Corporation or the claimant in an action to determine the claimant’s
rights under this Article XIII.
SECTION
9.
Any
notice, request or other communication required or permitted to be given to the Corporation under this Article XIII shall be in
writing and either delivered in person or sent by telecopy, telex, telegram, overnight mail or courier service, or certified or
registered mail, postage prepaid, return receipt requested, to the Secretary of the Corporation and shall be effective only upon
receipt by the Secretary.
ARTICLE
XIV
FORUM
FOR CERTAIN ACTIONS
Unless
the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative
action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed
by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii)
any action asserting a claim against the Corporation arising pursuant to any provision of the Delaware General Corporation Law
or the Certificate of Incorporation or Bylaws, or (iv) any action asserting a claim against the Corporation governed by the internal
affairs doctrine shall be a state or federal court located within the state of Delaware, in all cases subject to the court’s
having personal jurisdiction over the indispensable parties named as defendants. Any person or entity purchasing or otherwise
acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions
of this Article XIV.
ARTICLE
XV
AMENDMENTS
The
Board of Directors shall have power to adopt, amend or repeal these Bylaws. The stockholders of the Corporation shall have the
power to adopt, amend or repeal these Bylaws at a duly called meeting of the stockholders; provided that notice of the proposed
adoption, amendment or repeal was given in the notice of the meeting;
provided
,
further
,
that
, notwithstanding
any other provisions of these Bylaws or any provision of law which might otherwise permit a lesser vote or no vote, Sections 7,
8 and 10 of Article I, Sections 2 and 12 of Article II, Article XIII, Article XIV and this Article XV of these Bylaws may not
be amended or repealed by the stockholders of the Corporation without the affirmative vote of the holders of no less than 66 2/3
percent of the issued and outstanding shares of the capital stock of the Corporation entitled to vote at the meeting, present
in person or by proxy.
Exhibit
C
2016
Incentive Stock Award Plan
(a)
This 2016 Incentive Stock and Award Plan (the “
Plan
”) is intended as an incentive to retain in the employ of
and as directors, officers, consultants, attorneys, advisors and employees to Wizard World, Inc., a Delaware corporation (the
“
Company
”), and any Subsidiary of the Company, within the meaning of Section 424(f) of the United States Internal
Revenue Code of 1986, as amended (the “
Code
”), persons of training, experience and ability, to attract new
directors, officers, consultants, attorneys, advisors and employees whose services are considered valuable, to encourage the sense
of proprietorship and to stimulate the active interest of such persons in the development and financial success of the Company
and its Subsidiaries.
(b)
It is further intended that certain options granted pursuant to the Plan shall constitute incentive stock options within the meaning
of Section 422 of the Code (the “
Incentive Options
”) while certain other options granted pursuant to the Plan
shall be nonqualified stock options (the “
Nonqualified Options
”). Incentive Options and Nonqualified Options
are hereinafter referred to collectively as “
Options
”.
(c)
The Company intends that the Plan meet the requirements of Rule 16b-3 (“
Rule 16b-3
”) promulgated under the
Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), and that transactions of the type specified
in subparagraphs (c) to (f) inclusive of Rule 16b-3 by officers and directors of the Company pursuant to the Plan will be exempt
from the operation of Section 16(b) of the Exchange Act. Further, the Plan is intended to satisfy the performance-based compensation
exception to the limitation on the Company’s tax deductions imposed by Section 162(m) of the Code with respect to those
Options for which qualification for such exception is intended. In all cases, the terms, provisions, conditions and limitations
of the Plan shall be construed and interpreted consistent with the Company’s intent as stated in this Section 1.
2.
|
Administration
of the Plan.
|
(a)
The Board of Directors of the Company (the “
Board
”) shall appoint and maintain as administrator of the Plan
a Committee (the “
Committee
”) consisting of two or more directors who are (i) “Independent Directors”
(as such term is defined under the rules of the NASDAQ Stock Market), (ii) “Non-Employee Directors” (as such term
is defined in Rule 16b-3) and (iii) “Outside Directors” (as such term is defined in Section 162(m) of the Code), which
shall serve at the pleasure of the Board. The Committee, subject to Sections 3, 5 and 6 hereof, shall have full power and authority
to designate recipients of Options and restricted stock (“
Restricted Stock
”) and to determine the terms and
conditions of the respective Option and Restricted Stock agreements (which need not be identical) and to interpret the provisions
and supervise the administration of the Plan. The Committee shall have the authority, without limitation, to designate which Options
granted under the Plan shall be Incentive Options and which shall be Nonqualified Options. To the extent any Option does not qualify
as an Incentive Option, it shall constitute a separate Nonqualified Option.
(b)
Subject to the provisions of the Plan, the Committee shall interpret the Plan and all Options and Restricted Stock granted under
the Plan, shall make such rules as it deems necessary for the proper administration of the Plan, shall make all other determinations
necessary or advisable for the administration of the Plan, and shall correct any defects or supply any omission or reconcile any
inconsistency in the Plan or in any Options or Restricted Stock granted under the Plan in the manner and to the extent that the
Committee deems desirable to carry into effect the Plan or any Options or Restricted Stock. The act or determination of a majority
of the Committee shall be the act or determination of the Committee and any decision reduced to writing and signed by all of the
members of the Committee shall be fully effective as if it had been made by a majority of the Committee at a meeting duly held
for such purpose. Subject to the provisions of the Plan, any action taken or determination made by the Committee pursuant to this
and the other Sections of the Plan shall be conclusive on all parties.
(c)
In the event that for any reason the Committee is unable to act or if the Committee at the time of any grant, award or other acquisition
under the Plan does not consist of two or more Non-Employee Directors, or if there shall be no such Committee, or if the Board
otherwise determines to administer the Plan, then the Plan shall be administered by the Board, and references herein to the Committee
(except in the proviso to this sentence) shall be deemed to be references to the Board, and any such grant, award or other acquisition
may be approved or ratified in any other manner contemplated by subparagraph (d) of Rule 16b-3;
provided
,
however
,
that grants to the Company’s Chief Executive Officer or to any of the Company’s other four most highly compensated
officers that are intended to qualify as performance-based compensation under Section 162(m) of the Code may only be granted by
the Committee.
3.
|
Designation
of Optionees and Grantees.
|
(a)
The persons eligible for participation in the Plan as recipients of Options (the “
Optionees
”) or Restricted
Stock (the “
Grantees
” and together with Optionees, the “
Participants
”) shall include directors,
officers and employees of, and consultants, attorneys and advisors to, the Company or any Subsidiary;
provided
that Incentive
Options may only be granted to employees of the Company and any Subsidiary. In selecting Participants, and in determining the
number of shares to be covered by each Option or award of Restricted Stock granted to Participants, the Committee may consider
any factors it deems relevant, including, without limitation, the office or position held by the Participant or the Participant’s
relationship to the Company, the Participant’s degree of responsibility for and contribution to the growth and success of
the Company or any Subsidiary, the Participant’s length of service, promotions and potential. A Participant who has been
granted an Option or Restricted Stock hereunder may be granted an additional Option or Options, or Restricted Stock if the Committee
shall
so determine.
(b)
In the absence of any date specified, the Committee’s grant of Options or award of Restricted Stock, such grant shall be
deemed to have been made effective on the first business day of each March, June, September or December of any calendar year,
or on such other pre-determined dates as may be set by the Committee (the “
Pre-Determined Grant Dates
”). Notwithstanding
the foregoing, the Committee may grant Options or award Restricted Stock to any employee, officer, director, consultant, attorney
or advisor to the Company as an inducement to such person, in consideration for such person to enter into any agreement or to
provide services to the Company, for prior services rendered to the Company, or for any other reason determined by the Committee
for award, in its sole discretion other than on a Pre-Determined Grant Date.
4.
Stock Reserved for the Plan.
Subject to adjustment as provided in Section 8 hereof, a total of five million (5,000,000) shares
of the Company’s common stock, par value $0.0001 per share (the “
Stock
”), shall be subject to the Plan.
The maximum number of shares of Stock that may be subject to Options shall conform to any requirements applicable to performance-based
compensation under Section 162(m) of the Code, if qualification as performance-based compensation under Section 162(m) of the
Code is intended. The shares of Stock subject to the Plan shall consist of unissued shares, treasury shares or previously issued
shares held by any Subsidiary of the Company, and such amount of shares of Stock shall be and is hereby reserved for such purpose.
Any of such shares of Stock that may remain unsold and that are not subject to outstanding Options at the termination of the Plan
shall cease to be reserved for the purposes of the Plan, but until termination of the Plan the Company shall at all times reserve
a sufficient number of shares of Stock to meet the requirements of the Plan. Should any Option or Restricted Stock expire or be
canceled prior to its exercise or vesting in full or should the number of shares of Stock to be delivered upon the exercise or
vesting in full of any Option or Restricted Stock be reduced for any reason, the shares of Stock theretofore subject to such Option
or Restricted Stock may be subject to future Options or Restricted Stock under the Plan, except where such reissuance is inconsistent
with the provisions of Section 162(m) of the Code where qualification as performance-based compensation under Section 162(m) of
the Code is intended.
5.
Terms and Conditions of Options.
Options granted under the Plan shall be subject to the following conditions and shall contain
such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem desirable:
(a)
Option Price
. The purchase price of each share of Stock purchasable under an Incentive Option shall be determined by the
Committee at the time of grant, but shall not be less than 100% of the Fair Market Value (as defined below) of such share of Stock
on the date the Option is granted;
provided
,
however
, that with respect to an Optionee who, at the time such Incentive
Option is granted, owns (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of
all classes of stock of the Company or of any Subsidiary, the purchase price per share of Stock shall be at least 110% of the
Fair Market Value per share of Stock on the date of grant. The purchase price of each share of Stock purchasable under a Nonqualified
Option shall be at least 100% of the Fair Market Value of such share of Stock on the date the Option is granted,
unless
the
Committee, in its sole and absolute discretion, determines to set the purchase price of such Nonqualified Option below Fair Market
Value. The exercise price for each Option shall be subject to adjustment as provided in Section 8 below. “
Fair Market
Value
” means
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(i)
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the
closing price on the final trading day immediately prior to the grant of the Stock on (x) the principal securities exchange
on which shares of Stock are listed (if the shares of Stock are so listed) or (y) on the NASDAQ Stock Market, OTC Markets
or OTC Bulletin Board (if the shares of Stock are regularly listed or quoted on the NASDAQ Stock Market, OTC Markets or OTC
Bulletin Board, as the case may be); or
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(ii)
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if
not so listed or quoted, as applicable, the mean between the closing bid and asked prices of publicly traded shares of Stock
on the over-the-counter market on the final trading day immediately prior to the grant of the Stock; or
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(iii)
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if
such bid and asked prices shall not be available, as reported by any nationally recognized quotation service selected by the
Company on the final trading day immediately prior to the grant of the Stock. Anything in this Section 5(a) to the contrary
notwithstanding, in no event shall the purchase price of a share of Stock be less than the minimum price permitted under the
rules and policies of any national securities exchange on which the shares of Stock are listed, as applicable.
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(b)
Option Term
. The term of each Option shall be fixed by the Committee, but no Option shall be exercisable more than five
(5) years after the date such Option is granted and, in the case of an Incentive Option granted to an Optionee who, at the time
such Incentive Option is granted, owns (within the meaning of Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of stock of the Company or of any Subsidiary, no such Incentive Option shall be exercisable more than
five years after the date such Incentive Option is granted.
(c)
Exercisability
.
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(i)
|
Subject
to the terms of Section 5 hereof, Options shall be exercisable at such time or times and subject to such terms and conditions
as shall be determined by the Committee at the time of grant;
provided
,
however
, that in the absence of any
Option vesting periods designated by the Committee at the time of grant, Options shall vest and become exercisable in equal
amounts on each fiscal quarter of the Company through the four (4) year anniversary of the date of grant; and
provided
further
that no Options shall be exercisable until such time as any vesting limitation required by Section 16 of the Exchange
Act, and related rules, shall be satisfied if such limitation shall be required for continued validity of the exemption provided
under Rule 16b-3(d)(3).
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(ii)
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Upon
the occurrence of a Change in Control (as hereinafter defined), the Committee may accelerate the vesting and exercisability
of outstanding Options, in whole or in part, as determined by the Committee in its sole discretion. In its sole discretion,
the Committee may also determine that, upon the occurrence of a Change in Control, each outstanding Option shall terminate
within a specified number of days after notice to the Optionee thereunder, and each such Optionee shall receive, with respect
to each share of Company Stock subject to such Option, an amount equal to the excess of the Fair Market Value of such shares
immediately prior to such Change in Control over the exercise price per share of such Option; such amount shall be payable
in cash, in one or more kinds of property (including the property, if any, payable in the transaction) or a combination thereof,
as the Committee shall determine in its sole discretion.
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(iii)
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For
purposes of the Plan, unless otherwise defined in an employment agreement between the Company and the relevant Optionee, a
“
Change in Control
” shall be deemed to have occurred if:
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(A)
|
a
tender offer (or series of related offers) shall be made and consummated for the ownership of fifty percent (50%) or more
of the outstanding voting securities of the Company, unless as a result of such tender offer more than fifty percent (50%)
of the outstanding voting securities of the surviving or resulting corporation shall be owned in the aggregate by the stockholders
of the Company (as of the time immediately prior to the commencement of such offer), any employee benefit plan of the Company
or its Subsidiaries, and their affiliates;
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(B)
|
the
Company shall be merged or consolidated with another corporation, unless as a result of such merger or consolidation more
than fifty percent (50%) of the outstanding voting securities of the surviving or resulting corporation shall be owned in
the aggregate by the stockholders of the Company (as of the time immediately prior to such transaction), any employee benefit
plan of the Company or its Subsidiaries, and their affiliates;
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(C)
|
the
Company shall sell substantially all of its assets to another corporation that is not wholly owned by the Company, unless
as a result of such sale more than fifty percent (50%) of such assets shall be owned in the aggregate by the stockholders
of the Company (as of the time immediately prior to such transaction), any employee benefit plan of the Company or its Subsidiaries
and their affiliates; or
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(D)
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a
Person (as defined below) shall acquire fifty percent (50%) or more of the outstanding voting securities of the Company (whether
directly, indirectly, beneficially or of record), unless as a result of such acquisition more than fifty percent (50%) of
the outstanding voting securities of the surviving or resulting corporation shall be owned in the aggregate by the stockholders
of the Company (as of the time immediately prior to the first acquisition of such securities by such Person), any employee
benefit plan of the Company or its Subsidiaries, and their affiliates.
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(iv)
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Notwithstanding
Section 5(c)(iii) above, if Change in Control, Change of Control, or another term with substantially the same meaning is defined
in an employment agreement between the Company and the relevant Optionee, then, with respect to such Optionee, Change in Control
shall have the meaning ascribed to it in such employment agreement.
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(v)
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For
purposes of this Section 5(c), ownership of voting securities shall take into account and shall include ownership as determined
by applying the provisions of Rule 13d-3(d)(I)(i) (as in effect on the date hereof) under the Exchange Act. In addition, for
such purposes, “
Person
” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof;
provided
,
however
, that a Person shall not include (A) the Company
or any of its Subsidiaries; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company
or any of its Subsidiaries; (C) an underwriter temporarily holding securities pursuant to an offering of such securities;
or (D) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportion
as their ownership of stock of the Company.
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(d)
Method of Exercise
. Options, to the extent then exercisable, may be exercised in whole or in part at any time during the
option period, by giving written notice to the Company specifying the number of shares of Stock to be purchased, accompanied by
payment in full of the purchase price, in cash, or by check or such other instrument as may be acceptable to the Committee. As
determined by the Committee, in its sole discretion, at or after grant, payment in full or in part may be made at the election
of the Optionee (i) in the form of Stock owned by the Optionee based on the Fair Market Value of the Stock which is not the subject
of any pledge or security interest, (ii) in the form of shares of Stock withheld by the Company from the shares of Stock otherwise
to be received with such withheld shares of Stock having a Fair Market Value equal to the exercise price of the Option, or (iii)
by a combination of the foregoing, such Fair Market Value determined by applying the principles set forth in Section 5(a),
provided
that the combined value of all cash and cash equivalents and the Fair Market Value of any shares surrendered to the Company
is at least equal to such exercise price and except with respect to (ii) above, such method of payment will not cause a disqualifying
disposition of all or a portion of the Stock received upon exercise of an Incentive Option. An Optionee shall have the right to
dividends and other rights of a stockholder with respect to shares of Stock purchased upon exercise of an Option at such time
as the Optionee (i) has given written notice of exercise and has paid in full for such shares, and (ii) has satisfied such conditions
that may be imposed by the Company with respect to the withholding of taxes.
(e)
Non-transferability of Options
. Options are not transferable and may be exercised solely by the Optionee during his lifetime
or after his death by the person or persons entitled thereto under his will or the laws of descent and distribution. The Committee,
in its sole discretion, may permit a transfer of a Nonqualified Option to (i) a trust for the benefit of the Optionee, (ii) a
member of the Optionee’s immediate family (or a trust for his or her benefit) or (iii) pursuant to a domestic relations
order. Any attempt to transfer, assign, pledge or otherwise dispose of, or to subject to execution, attachment or similar process,
any Option contrary to the provisions hereof shall be void and ineffective and shall give no right to the purported transferee.
(f)
Termination by Death
. Unless otherwise determined by the Committee, if any Optionee’s employment with or service
to the Company or any Subsidiary terminates by reason of death, the Option may thereafter be exercised, to the extent then exercisable
(or on such accelerated basis as the Committee shall determine at or after grant), by the legal representative of the estate or
by the legatee of the Optionee under the will of the Optionee, for a period of one (1) year after the date of such death (or,
if later, such time as the Option may be exercised pursuant to Section 14(d) hereof) or until the expiration of the stated term
of such Option as provided under the Plan, whichever period is shorter.
(g)
Termination by Reason of Disability
. Unless otherwise determined by the Committee, if any Optionee’s employment with
or service to the Company or any Subsidiary terminates by reason of Disability (as defined below), then any Option held by such
Optionee may thereafter be exercised, to the extent it was exercisable at the time of termination due to Disability (or on such
accelerated basis as the Committee shall determine at or after grant), but may not be exercised after ninety (90) days after the
date of such termination of employment or service (or, if later, such time as the Option may be exercised pursuant to Section
14(d) hereof) or the expiration of the stated term of such Option, whichever period is shorter;
provided
,
however
,
that, if the Optionee dies within such ninety (90) day period, any unexercised Option held by such Optionee shall thereafter be
exercisable to the extent to which it was exercisable at the time of death for a period of one (1) year after the date of such
death (or, if later, such time as the Option may be exercised pursuant to Section 14(d) hereof) or for the stated term of such
Option, whichever period is shorter. “
Disability
” shall mean an Optionee’s total and permanent disability;
due to his or her inability to engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than
12 months;
provided
,
however
, that if Disability is defined in an employment agreement between the Company and the
relevant Optionee, then, with respect to such Optionee, Disability shall have the meaning ascribed to it in such employment agreement.
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(h)
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Termination
by Reason of Retirement
.
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(i)
Unless otherwise determined by the Committee, if any Optionee’s employment
with or service to the Company or any Subsidiary terminates by reason of Normal Retirement or Early Retirement (as such terms
are defined below), any Option held by such Optionee may thereafter be exercised to the extent it was exercisable at the time
of such Retirement (or on such accelerated basis as the Committee shall determine at or after grant), but may not be exercised
after ninety (90) days after the date of such termination of employment or service (or, if later, such time as the Option
may be exercised pursuant to Section 14(d) hereof) or the expiration of the stated term of such Option, whichever date is
earlier;
provided
,
however
, that, if the Optionee dies within such ninety (90) day period, any unexercised Option
held by such Optionee shall thereafter be exercisable, to the extent to which it was exercisable at the time of death, for
a period of one (1) year after the date of such death (or, if later, such time as the Option may be exercised pursuant to
Section 14(d) hereof) or for the stated term of such Option, whichever period is shorter
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(ii)
For purposes of this paragraph (h), “
Normal Retirement
” shall
mean retirement from active employment with the Company or any Subsidiary on or after the normal retirement date specified
in the applicable Company or Subsidiary pension plan or if no such pension plan, age 65, and “
Early Retirement
”
shall mean retirement from active employment with the Company or any Subsidiary pursuant to the early retirement provisions
of the applicable Company or Subsidiary pension plan or if no such pension plan, age 55.
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(i)
Other Terminations
. Unless otherwise determined by the Committee upon grant, if any Optionee’s employment with or
service to the Company or any Subsidiary is terminated by such Optionee for any reason other than death, Disability, Normal Retirement
or Early Retirement or Good Reason (as defined below), the Option shall thereupon terminate, except that the portion of any Option
that was exercisable on the date of such termination of employment or service may be exercised for the lesser of ninety (90) days
after the date of termination (or, if later, such time as the Option may be exercised pursuant to Section 14(d) hereof) or the
balance of such Option’s term, which ever period is shorter. The transfer of an Optionee from the employ of or service to
the Company to the employ of or service to a Subsidiary, or vice versa, or from one Subsidiary to another, shall not be deemed
to constitute a termination of employment or service for purposes of the Plan.
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(i)
In the event that the Optionee’s employment or service with the Company or
any Subsidiary is terminated by the Company or such Subsidiary for Cause (as defined below) any unexercised portion of any
Option shall immediately terminate in its entirety. For purposes hereof, unless otherwise defined in an employment agreement
between the Company and the relevant Optionee, “
Cause
” shall exist upon a good-faith determination by the
Board, following a hearing before the Board at which an Optionee was represented by counsel and given an opportunity to be
heard, that such Optionee has been accused of fraud, dishonesty or act detrimental to the interests of the Company or any
Subsidiary of the Company or that such Optionee has been accused of or convicted of an act of willful and material embezzlement
or fraud against the Company or any Subsidiary of the Company or of a felony under any state or federal statute;
provided
,
however
, that it is specifically understood that Cause shall not include any act of commission or omission in the good
faith exercise of such Optionee’s business judgment as a director, officer or employee of the Company, as the case may
be, or upon the advice of counsel to the Company. Notwithstanding the foregoing, if Cause is defined in an employment agreement
between the Company and the relevant Optionee, then, with respect to such Optionee, Cause shall have the meaning ascribed
to it in such employment agreement.
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(ii)
In the event that an Optionee is removed as a director, officer or employee by the Company at any time other than for Cause
or resigns as a director, officer or employee for Good Reason, the Option granted to such Optionee may be exercised by the
Optionee, to the extent the Option was exercisable on the date such Optionee ceases to be a director, officer or employee.
Such Option may be exercised at any time within one (1) year after the date the Optionee ceases to be a director, officer
or employee (or, if later, such time as the Option may be exercised pursuant to Section 14(d) hereof), or the date on which
the Option otherwise expires by its terms; whichever period is shorter, at which time the Option shall terminate;
provided
,
however
, if the Optionee dies before the Options terminate and are no longer exercisable, the terms and provisions
of Section 5(f) shall control. For purposes of this Section 5(i), and unless otherwise defined in an employment agreement
between the Company and the relevant Optionee, “
Good Reason
” shall exist upon the occurrence of the following:
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(A)
|
the
assignment to Optionee of any duties inconsistent with the position in the Company that Optionee held immediately prior to
the assignment;
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(B)
|
a
Change in Control resulting in a significant adverse alteration in the status or conditions of Optionee’s participation
with the Company or other nature of Optionee’s responsibilities from those in effect prior to such Change in Control,
including any significant alteration in Optionee’s responsibilities immediately prior to such Change in Control; or
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(C)
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the
failure by the Company to continue to provide Optionee with benefits substantially similar to those enjoyed by Optionee prior
to such failure.
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(iii)
Notwithstanding the foregoing, if Good Reason is defined in an employment agreement between the Company and the relevant Optionee,
then, with respect to such Optionee, Good Reason shall have the meaning ascribed to it in such employment agreement.
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(j)
Limit on Value of Incentive Option
. The aggregate Fair Market Value, determined as of the date the Incentive Option is
granted, of Stock for which Incentive Options are exercisable for the first time by any Optionee during any calendar year under
the Plan (and/or any other stock option plans of the Company or any Subsidiary) shall not exceed $100,000.
6.
Terms and Conditions of Restricted Stock.
Restricted Stock may be granted under this Plan aside from, or in association with,
any other award and shall be subject to the following conditions and shall contain such additional terms and conditions (including
provisions relating to the acceleration of vesting of Restricted Stock upon a Change in Control), not inconsistent with the terms
of the Plan, as the Committee shall deem desirable:
(a)
Grantee rights
. A Grantee shall have no rights to an award of Restricted Stock unless and until Grantee accepts the award
within the period prescribed by the Committee and, if the Committee shall deem desirable, makes payment to the Company in cash,
or by check or such other instrument as may be acceptable to the Committee. After acceptance and issuance of a certificate or
certificates, as provided for below, the Grantee shall have the rights of a stockholder with respect to Restricted Stock subject
to the non-transferability and forfeiture restrictions described in Section 6(d) below;
(b)
Issuance of Certificates
. The Company shall issue in the Grantee’s name a certificate or certificates for the shares
of Common Stock associated with the award promptly after the Grantee accepts such award;
(c)
Delivery of Certificates
. Unless otherwise provided, any certificate or certificates issued evidencing shares of Restricted
Stock shall not be delivered to the Grantee until such shares are free of any restrictions specified by the Committee at the time
of grant;
(d)
Forfeitability, Non-transferability of Restricted Stock
. Shares of Restricted Stock are forfeitable until the terms of
the Restricted Stock grant have been satisfied. Shares of Restricted Stock are not transferable until the date on which the Committee
has specified such restrictions have lapsed. Unless otherwise provided by the Committee at or after grant, distributions in the
form of dividends or otherwise of additional shares or property in respect of shares of Restricted Stock shall be subject to the
same restrictions as such shares of Restricted Stock;
(e)
Change in Control
. Upon the occurrence of a Change in Control as defined in Section 5(c) above, the Committee may accelerate
the vesting of outstanding Restricted Stock, in whole or in part, as determined by the Committee in its sole discretion; or
(f)
Termination of Employment
. Unless otherwise determined by the Committee at or after grant, in the event the Grantee ceases
to be an employee or otherwise associated with the Company for any other reason, all shares of Restricted Stock theretofore awarded
to him which are still subject to restrictions shall be forfeited and the Company shall have the right to complete the blank stock
power. The Committee may provide (on or after grant) that restrictions or forfeiture conditions relating to shares of Restricted
Stock will be waived in whole or in part in the event of termination resulting from specified causes, and the Committee may in
other cases waive in whole or in part restrictions or forfeiture conditions relating to Restricted Stock.
7.
Term of Plan.
No Option or award of Restricted Stock shall be granted pursuant to the Plan on or after the date which is five
(5) years from the effective date of the Plan, but Options and awards of Restricted Stock theretofore granted may extend beyond
that date.
8.
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Capital
Change of the Company.
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(a)
In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, or other change in corporate structure
affecting the Stock, the Committee shall make an appropriate and equitable adjustment in the number and kind of shares reserved
for issuance under the Plan and in the number and option price of shares subject to outstanding Options granted under the Plan,
to the end that after such event each Optionee’s proportionate interest shall be maintained (to the extent possible) as
immediately before the occurrence of such event. The Committee shall, to the extent feasible, make such other adjustments as may
be required under the tax laws so that any Incentive Options previously granted shall not be deemed modified within the meaning
of Section 424(h) of the Code. Appropriate adjustments shall also be made in the case of outstanding Restricted Stock granted
under the Plan.
(b)
The adjustments described above will be made only to the extent consistent with continued qualification of the Option under Section
422 of the Code (in the case of an Incentive Option) and Section 409A of the Code.
9.
Purchase for Investment/Conditions.
Unless the Options and shares covered by the Plan have been registered under the Securities
Act of 1933, as amended (the “
Securities Act
”), or the Company has determined that such registration is unnecessary,
each person exercising or receiving Options or Restricted Stock under the Plan may be required by the Company to give a representation
in writing that such person is acquiring the securities for such person’s own account for investment and not with a view
to, or for sale in connection with, the distribution of any part thereof. The Committee may impose any additional or further restrictions
on awards of Options or Restricted Stock as shall be determined by the Committee at the time of award.
10.
Taxes.
(a)
The Company may make such provisions as it may deem appropriate, consistent with applicable law, in connection with any Options
or Restricted Stock granted under the Plan with respect to the withholding of any taxes (including income or employment taxes)
or any other tax matters.
(b)
If any Grantee, in connection with the acquisition of Restricted Stock, makes the election permitted under Section 83(b) of the
Code (that is, an election to include in gross income in the year of transfer the amounts specified in Section 83(b)), such Grantee
shall notify the Company of the election with the Internal Revenue Service pursuant to regulations issued under the authority
of Code Section 83(b).
(c)
If any Grantee shall make any disposition of shares of Stock issued pursuant to the exercise of an Incentive Option under the
circumstances described in Section 421(b) of the Code (relating to certain disqualifying dispositions), such Grantee shall notify
the Company of such disposition within ten (10) days thereof.
11.
Effective Date of Plan.
The Plan shall be effective on August 12, 2016;
provided
,
however
, that if, and only
if, certain options are intended to qualify as Incentive Stock Options, the Plan must subsequently be approved by majority vote
of the Company’s stockholders no later than December 31, 2016, and further, that in the event certain Option grants hereunder
are intended to qualify as performance-based compensation within the meaning of Section 162(m) of the Code, the requirements as
to stockholder approval set forth in Section 162(m) of the Code are satisfied.
12.
Amendment and Termination.
(a)
The Board may amend, suspend, or terminate the Plan, except that no amendment shall be made that would impair the rights of any
Participant under any Option or Restricted Stock theretofore granted without the Participant’s consent, and except that
no amendment shall be made which, without the approval of the stockholders of the Company, would:
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(i)
|
materially
increase the number of shares that may be issued under the Plan, except as is provided in Section 8;
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(ii)
|
materially
increase the benefits accruing to the Participants under the Plan;
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(iii)
|
materially
modify the requirements as to eligibility for participation in the Plan;
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(iv)
|
decrease
the exercise price of an Incentive Option to less than 100% of the Fair Market Value per share of Stock on the date of grant
thereof or the exercise price of a Nonqualified Option to less than 100% of the Fair Market Value per share of Stock on the
date of grant thereof;
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(v)
|
extend
the term of any Option beyond that provided for in Section 5(b); or
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(vi)
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except
as otherwise provided in Sections 5(d) and 8 hereof, reduce the exercise price of outstanding Options or effect repricing through
cancellations and re-grants of new Options.
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(b)
Subject to the forgoing, the Committee may amend the terms of any Option theretofore granted, prospectively or retrospectively,
but no such amendment shall impair the rights of any Optionee without the Optionee’s consent.
(c)
It is the intention of the Board that the Plan comply strictly with the provisions of Section 409A of the Code and Treasury Regulations
and other Internal Revenue Service guidance promulgated thereunder (the “
Section 409A Rules
”), as applicable,
and the Committee shall exercise its discretion in granting awards hereunder (and the terms of such awards), accordingly. The
Plan and any grant of an award hereunder may be amended from time to time (without, in the case of an award, the consent of the
Participant) as may be necessary or appropriate to comply with the Section 409A Rules. If the timing of any distribution under
this Plan would result in the imposition of tax penalties under Code Section 409A, (i) then such distribution will be made at
the earliest date after the specified payment date on which that distribution can be effected without resulting in such tax penalties;
(ii) the Company shall have no authority to accelerate any payment hereunder except as permitted under Code Section 409A and regulations
thereunder; and (iii) any rights of any Participant or retained authority of the Company with respect to awards hereunder shall
be automatically modified and limited to the extent necessary so that no Grantee will be deemed to be in constructive receipt
of income relating to the deferrals nor subject to any penalty under Code Section 409A.
13.
Government Regulations.
The Plan, and the grant and exercise of Options or Restricted Stock hereunder, and the obligation
of the Company to sell and deliver shares under such Options and Restricted Stock shall be subject to all applicable laws, rules
and regulations, and to such approvals by any governmental agencies, national securities exchanges and interdealer quotation systems
as may be required.
14.
General Provisions.
(a)
Certificates
. All certificates for shares of Stock delivered under the Plan shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities
and Exchange Commission, or other securities commission having jurisdiction, any applicable Federal or state securities law, any
stock exchange or interdealer quotation system upon which the Stock is then listed or traded and the Committee may cause a legend
or legends to be placed on any such certificates to make appropriate reference to such restrictions.
(b)
Employment Matters
. Neither the adoption of the Plan nor any grant or award under the Plan shall confer upon any Participant
who is an employee of the Company or any Subsidiary any right to continued employment or, in the case of a Participant who is
a director, continued service as a director, with the Company or a Subsidiary, as the case may be, nor shall it interfere in any
way with the right of the Company or any Subsidiary to terminate the employment of any of its employees, the service of any of
its directors or the retention of any of its consultants, attorneys or advisors at any time.
(c)
Limitation of Liability
. No member of the Committee, or any officer or employee of the Company acting on behalf of the
Committee, shall be personally liable for any action, determination or interpretation taken or made in good faith with respect
to the Plan, and all members of the Committee and each and any officer or employee of the Company acting on their behalf shall,
to the extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, determination
or interpretation.
(d)
Registration of Stock
. Notwithstanding any other provision in the Plan, no Option may be exercised unless and until the
Stock to be issued upon the exercise thereof has been registered under the Securities Act and applicable state securities laws,
or are, in the opinion of counsel to the Company, exempt from such registration in the United States. The Company shall not be
under any obligation to register under applicable federal or state securities laws any Stock to be issued upon the exercise of
an Option granted hereunder in order to permit the exercise of an Option and the issuance and sale of the Stock subject to such
Option, although the Company may in its sole discretion register such Stock at such time as the Company shall determine. If the
Company chooses to comply with such an exemption from registration, the Stock issued under the Plan may, at the direction of the
Committee, bear an appropriate restrictive legend restricting the transfer or pledge of the Stock represented thereby, and the
Committee may also give appropriate stop transfer instructions with respect to such Stock to the Company’s transfer agent.
(e)
Transferability in accordance with SEC Release No. 33-7646 entitled “Registration of Securities on Form S-8,” as
effective April 7, 1999
. Notwithstanding anything to the contrary as may be contained in this Plan regarding rights as to
transferability or lack thereof, all options granted hereunder may and shall be transferable to the extent permitted in accordance
with SEC Release No. 33-7646 entitled “Registration of Securities on Form S-8,” as effective April 7, 1999, and in
particular in accordance with that portion of such Release which expands Form S-8 to include stock option exercised by family
members so that the rules governing the use of Form S-8 (i) do not impede legitimate intra-family transfer of options and (ii)
may facilitate transfer for estate planning purposes, all as more specifically defined in Article III, Sections A and B thereto,
the contents of which are herewith incorporated by reference.
15.
Non-Uniform Determinations.
The Committee’s determinations under the Plan, including, without limitation, (i) the determination
of the Participants to receive awards, (ii) the form, amount and timing of such awards, (iii) the terms and provisions of such
awards and (ii) the agreements evidencing the same, need not be uniform and may be made by it selectively among Participants who
receive, or who are eligible to receive, awards under the Plan, whether or not such Participants are similarly situated.
16.
Governing Law.
The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall
be determined in accordance with the internal laws of the State of Delaware without giving effect to principles of conflicts of
laws, and applicable federal law.