Proxy Statement Pursuant
to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant x
Filed by a Party other than the Registrant ¨
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as
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Soliciting Material Pursuant to
240.14a-12
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WESTERN CAPITAL RESOURCES,
INC.
______________________
(Name of Registrant as Specified In Its Charter)
N/A
______________________
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
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Rules 14a-6(i)(1) and 0-11.
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provided by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or
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WESTERN CAPITAL
RESOURCES, INC.
11550 “I” Street, Suite 150
Omaha, Nebraska 68137
NOTICE OF SPECIAL
MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 20, 2016
TO THE SHAREHOLDERS OF WESTERN CAPITAL RESOURCES, INC.:
Please take notice that a special meeting of shareholders (the
“Special Meeting”) of Western Capital Resources, Inc.
(the “Company”) will be held, pursuant to due call by
the Board of Directors of the Company, on Wednesday, January, 20,
2016, at 8:30 a.m. local time, at 11550 “I” Street,
Suite 150, Omaha, Nebraska, or at any adjournment or adjournments
thereof, for the purpose of considering and taking appropriate
action with respect to the following:
1.
The approval of the Company’s 2015 Stock Incentive Plan;
2.
The approval of the proposal to reincorporate the Company from
Minnesota to Delaware; and
3.
The transaction of any other business as may properly come before
the Special Meeting or any adjournments thereof.
Pursuant to due action of the Board of Directors, shareholders of
record on December 11, 2015 will be entitled to vote at the Special
Meeting or any adjournments thereof.
The proxy statement for the Special Meeting, which is included with
this Notice, is also available to you on the Internet. We encourage
you to review all of the important information contained in the
proxy materials before voting.
To view the proxy statement on the Internet, please follow the
instructions for Internet voting on the accompanying proxy card or
visit https://secure.corporatestock.com/vote.php.
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By Order of the Board of Directors
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/s/ John Quandahl
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John Quandahl
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Chief Executive Officer
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January 5, 2016
WESTERN CAPITAL
RESOURCES, INC.
11550 “I” Street, Suite 150
Omaha, Nebraska 68137
______________________
PROXY
STATEMENT
______________________
Special Meeting of
Shareholders to be Held
January 20, 2016
QUESTIONS AND ANSWERS
ABOUT THE PROXY MATERIALS AND VOTING
Why am I receiving these
materials?
We have sent you this Proxy Statement and the accompanying proxy in
connection with the solicitation of proxies by the Board of
Directors (or the “Board”) of Western Capital
Resources, Inc. (periodically referred to herein as the
“Company,” “we,” “our,” and
“us”) to be used at a special meeting of shareholders
of the Company (the “Special Meeting”) to be held on
Wednesday, January, 20, 2016, at 8:30 a.m. local time, at 11550
“I” Street, Suite 150, Omaha, Nebraska, or at any
adjournment or adjournments thereof, for the purpose of considering
and taking appropriate action with respect to the following:
1.
The approval of the Company’s 2015 Stock Incentive Plan;
2.
The approval of the proposal to reincorporate the Company from
Minnesota to Delaware; and
3.
The transaction of any other business as may properly come before
the Special Meeting or any adjournments thereof.
You are invited to attend the Special Meeting to vote on the above
proposals. Nevertheless, you do not need to attend the Special
Meeting to vote your shares. Instead, you may simply complete, sign
and return the enclosed proxy card, or follow the instructions
below to submit your proxy via regular mail or by voting via the
Internet.
The approximate date on which this Proxy Statement and the
accompanying proxy card were first sent or provided to shareholders
was January 5, 2016.
Who can vote at the
Special Meeting?
Only shareholders of record at the close of business on December
11, 2015, will be entitled to vote at the Special Meeting. On the
record date, there were 9,497,588 shares of common stock of the
Company outstanding and entitled to vote.
Shareholder of Record
(Shares Registered in Your Name)
If on December 11, 2015, your shares were registered directly in
your name with the Company’s transfer agent, Corporate Stock
Transfer, Inc., then you are a shareholder of record. As a
shareholder of record, you may vote in person at the Special
Meeting or vote by proxy. Whether or not you plan to attend the
Special Meeting, we urge you to vote your shares by completing,
signing, dating and mailing your proxy card in the envelope
provided or vote by proxy via regular mail or by voting via the
Internet as instructed below to ensure your vote is counted.
Beneficial Owner
(Shares Registered in the Name of a Broker or Bank)
If on December 11, 2015, your shares were held, not in your name,
but rather in an account at a brokerage firm, bank, dealer, or
other similar organization, then you are the beneficial owner of
shares held in “street name” and these proxy materials
are being forwarded to you by that organization. The organization
holding your account is considered to be the shareholder of record
for purposes of voting at the Special Meeting. As a beneficial
owner, you have the right to direct your broker or other agent
1
regarding how to vote the shares in your account. You are also
invited to attend the Special Meeting. Nevertheless, since you are
not the shareholder of record, you may not vote your shares in
person at the meeting unless you request and obtain a valid legal
proxy from your broker or other agent.
What am I voting
on?
There are two matters scheduled for a vote:
1.
The approval of the Company’s 2015 Stock Incentive Plan;
and
2.
The approval of the proposal to reincorporate the Company from
Minnesota to Delaware.
How will the
reincorporation be accomplished, and what will the effects be on
the Company?
The Company is proposing to change its state of incorporation from
Minnesota to Delaware. The reincorporation will be effected
pursuant to the terms of a plan of conversion, which is attached to
this Proxy Statement as Appendix B. To
effect the reincorporation, we will file articles of conversion in
Minnesota, and file a certificate of conversion and a certificate
of incorporation in Delaware.
Upon effectiveness of the reincorporation, the Company will become
a Delaware corporation. The number of shares of common stock you
own and your proportional percentage ownership of the Company will
remain unchanged and will not be affected in any way by the
reincorporation.
Material operations of our business, our directors, officers,
employees, assets and liabilities and the location of our offices
will remain unchanged by the reincorporation.
How will the
reincorporation affect my rights as a shareholder?
Your rights as a shareholder currently are governed by Minnesota
law and the provisions of our Amended and Restated Articles of
Incorporation, as amended, and our Amended and Restated Bylaws, as
amended. As a result of the reincorporation, your rights will be
governed by Delaware law and the provisions of the Company’s
new Delaware certificate of incorporation (which will be filed to
effect the reincorporation) and new Delaware bylaws (which the
Company will adopt upon effectiveness of the reincorporation).
Forms of the certificate of incorporation and bylaws are attached
to this Proxy Statement as Exhibits A and
B to Appendix
B, respectively. Your rights as a stockholder of a Delaware
corporation will differ in certain respects from your current
rights as a shareholder of a Minnesota corporation. These
differences are summarized in this Proxy Statement under Proposal
2.
How do I
vote?
You may vote “For” or “Against” the
proposals or abstain from voting. The procedures for voting are as
follows:
Shareholder of Record
(Shares Registered in Your Name)
If you are a shareholder of record, you may vote in person at the
Special Meeting, vote by proxy using the enclosed proxy card, vote
by proxy via regular mail or vote via the Internet. Whether or not
you plan to attend the Special Meeting, we urge you to vote by
proxy to ensure your vote is counted. You may still attend the
Special Meeting and vote in person even if you have already voted
by proxy.
• To
vote in person, come to the Special Meeting, and we will give you a
ballot when you arrive.
• To
vote using the proxy card, simply complete, sign and date the
enclosed proxy card and return it promptly in the envelope
provided. If you return your signed proxy card to us before the
Special Meeting, we will vote your shares as you direct on the
proxy card.
• To
vote via the Internet, follow the voting procedures outlined on the
enclosed proxy card. Your vote must be submitted by 1:00PM Central
Standard Time on January 19, 2016 to be counted. Please be aware
that you must bear any costs associated with your Internet access,
such as usage charges from Internet access providers and telephone
companies.
2
Beneficial Owner
(Shares Registered in the Name of Broker or Bank)
If you are a beneficial owner of shares registered in the name of
your broker, bank, or other agent, you should receive a proxy card
and voting instructions with these proxy materials from that
organization rather than from us. Simply complete and mail the
proxy card to ensure that your vote is submitted to your broker or
bank. Alternatively, you may vote over the Internet as instructed
by your broker or bank. To vote in person at the Special Meeting,
you must obtain a valid legal proxy from your broker, bank, or
other agent. Follow the instructions from your broker or bank
included with these proxy materials, or contact your broker or bank
to request a proxy form.
How many votes do I
have?
On each matter to be voted upon, you have one vote for each share
of common stock you own as of December 11, 2015.
What if I return a proxy
card but do not make specific choices?
If you return a signed and dated proxy card without marking any
voting selections, your shares will be voted “For” both
proposals. If any other matter is properly presented at the
meeting, your proxyholder (one of the individuals named on your
proxy card) will vote your shares using its best judgment.
Who is paying for this
proxy solicitation?
The Company will pay for the entire cost of soliciting proxies. In
addition to these mailed proxy materials, our directors and
employees may also solicit proxies in person, by telephone, email
or by other means of communication. Directors and employees will
not be paid any additional compensation for soliciting proxies. We
may also reimburse brokerage firms, banks and other agents for the
cost of forwarding proxy materials to beneficial owners.
What does it mean if I
receive more than one proxy card?
If you receive more than one proxy card, your shares are registered
in more than one name or are registered in different accounts.
Please complete, sign and return each proxy card to ensure that all
of your shares are voted.
Are proxy materials
available on the Internet?
To view this Proxy Statement on the Internet, please follow the
instructions for Internet voting on the accompanying proxy card or
visit https://secure.corporatestock.com/vote.php.
Can I change my vote
after submitting my proxy?
Yes. You can revoke your proxy at any time before the final vote at
the Special Meeting. If you are the record holder of your shares,
you may revoke your proxy in any one of three ways:
•
You may submit another properly completed proxy card with a later
date.
•
You may send a timely written notice that you are revoking your
proxy to our Secretary at 11550 “I” Street, Suite 150
Omaha, Nebraska 68137.
•
You may attend the Special Meeting to vote in person. Attending the
meeting will not, by itself, revoke your proxy.
If your shares are held by your broker or bank as a nominee or
agent, you should follow the instructions provided by your broker
or bank.
How are votes
counted?
Votes will be counted by the inspector of election appointed for
the meeting, who will separately count votes “For” and
“Against” and abstentions for each proposal.
Abstentions will be counted towards the vote total for each
proposal, and will have the same effect as “Against”
votes.
3
How many votes are
needed to approve each proposal?
To be approved, each proposal must receive a “For” vote
from the majority of all shares entitled to vote either in person
or by proxy. If you “Abstain” from voting, it will have
the same effect as an “Against” vote.
What is the quorum
requirement?
A quorum of shareholders is necessary to hold a valid meeting. A
quorum will be present if shareholders holding at least one-third
of the outstanding shares are present at the meeting in person or
represented by proxy. On the record date, there were 9,497,588
shares outstanding and entitled to vote. Thus, the holders of at
least 3,165,863 shares must be present in person or represented by
proxy at the meeting to have a quorum.
Your shares will be counted towards the quorum only if you submit a
valid proxy (or one is submitted on your behalf by your broker,
bank or other nominee) or if you vote in person at the meeting.
Abstentions will be counted towards the quorum requirement. If
there is no quorum, the holders of one-third of shares present at
the meeting in person or represented by proxy, or the chairman of
the meeting, may adjourn the meeting to another date.
Are there
dissenters’ or appraisal rights?
Shareholders have the right to dissent from the proposed
reincorporation and demand payment in cash for their shares equal
to the fair value of the shares as determined under Minnesota law.
For a detailed description of the reincorporation and
dissenters’ rights, see “Proposal 2 — Approval of
Reincorporation of the Company from Minnesota to
Delaware.”
4
PROPOSAL 1
APPROVAL OF 2015 STOCK
INCENTIVE PLAN
Introduction
On February 6, 2015, our Board of Directors adopted the Western
Capital Resources, Inc. 2015 Stock Incentive Plan. The Board of
Directors adopted the new plan to increase shareholder value and to
advance the interests of the Company by furnishing a variety of
incentives designed to attract, retain and motivate key employees
and consultants of the Company and its subsidiaries, and directors
of the Company. As described below, incentive stock options are a
type of incentive that may be granted to designated participants
under the 2015 Stock Incentive Plan. To satisfy requirements of the
Internal Revenue Code relating to “qualified” or
incentive stock options, the Company’s shareholders must
approve the plan within the 12-month period immediately following
our Board of Director’s adoption of the plan (i.e., on or
before February 6, 2016).
The Board of Directors believes that it is in the best interests of
the Company for the shareholders to approve the 2015 Stock
Incentive Plan. A summary of the 2015 Stock Incentive Plan appears
below. This summary is qualified entirely by reference to the
complete text of the 2015 Stock Incentive Plan, a copy of which is
attached as Appendix A to
this Proxy Statement.
Description of the 2015
Stock Incentive Plan
General. The purpose of the 2015 Stock Incentive Plan
is to increase shareholder value and to advance the interests of
the Company by furnishing a variety of economic incentives designed
to attract, retain and motivate employees, certain key consultants
and directors of the Company. Incentives may consist of
opportunities to purchase or receive shares of our common stock or
other incentive awards on terms determined under the plan. The 2015
Stock Incentive Plan is administered by the Board of Directors or
by a stock option or compensation committee of the Board of
Directors. If administered by a committee of the Board of
Directors, the committee shall consist of not less than two
directors of the Company and shall be appointed from time to time
by the Board of Directors.
The Compensation Committee may grant incentives to officers,
employees, members of the Board of Directors, and consultants or
other independent contractors who provide services to the Company
or its subsidiaries, in the following forms: (a) incentive stock
options and non-statutory stock options; (b) stock appreciation
rights; (c) stock awards; (d) restricted stock and (e) restricted
stock units.
Shares Subject to 2015 Stock Incentive Plan. Subject to
adjustment, we may issue up to 100,000 shares of our common stock
under the 2015 Stock Incentive Plan. If an incentive granted under
the 2015 Stock Incentive Plan expires or is terminated or canceled
unexercised as to any shares of our common stock, such shares may
again be issued under the 2015 Stock Incentive Plan either pursuant
to stock options, stock appreciation rights, restricted stock
units, or otherwise. If shares of our common stock are issued
pursuant to a stock award or as restricted stock and thereafter are
forfeited or reacquired by us pursuant to rights reserved upon
issuance thereof, such forfeited and reacquired shares may again be
issued under the 2015 Stock Incentive Plan, either pursuant to a
stock award or as restricted stock, or otherwise.
Description of
Incentives
Stock Options. The Board of Directors may grant
non-qualified and incentive stock options to eligible participants
to purchase shares of Company common stock. The plan confers
discretion on our Board of Directors, with respect to any such
stock option, to determine the term of each option, the time or
times during its term when the option becomes exercisable, and the
number and purchase price of the shares subject to the option. The
exercise price of incentive stock options may not be less than 100%
of the fair market value of the stock subject to the option on the
date of the grant and, in some cases, may not be less than 110% of
such fair market value. The exercise price of non-qualified options
may not be less than 100% of the fair market value of the stock on
the date of grant, with limited exceptions for awards that satisfy
the requirements for deferred compensation under Section 409A of
the Internal Revenue Code.
The maximum term of options under the plan is ten years, except
that in certain cases the maximum term is five years. Subject to
the discretion of our Board of Directors, options under the plan
generally terminate pursuant to provisions contained in each option
holder’s written agreement with the Company. Nevertheless, no
option may remain exercisable or continue to vest beyond its
expiration date, and any incentive stock option that remains
unexercised more than three months following termination of
employment (other than for death or disability), will be deemed a
non-qualified stock option.
5
Stock Appreciation Rights. A SAR is a right to receive,
without payment to the Company, a number of shares, the amount of
which is equal to the aggregate amount of the appreciation in the
shares of common stock as to which the SAR is exercised. For this
purpose, the “appreciation” in the shares consists of
the amount by which the fair market value of the shares of common
stock on the exercise date exceeds (a) in the case of a SAR related
to a stock option, the purchase price of the shares under the
option or (b) in the case of a SAR granted alone, without reference
to a related stock option, an amount determined by the Board of
Directors at the time of grant. The Board of Directors has
discretion to determine the number of shares as to which a SAR will
relate as well as the duration and exercisability of a SAR.
Restricted Stock and Restricted Stock Units. The Board
of Directors may grant shares of restricted stock that are subject
to the continued employment of the participant and may also be
subject to performance criteria at the discretion of the Board of
Directors. Generally, if the participant’s employment
terminates prior to the completion of the specified employment or
the attainment of the specified performance goals, the awards will
lapse (i.e., the restricted stock will be forfeited). The Board of
Directors may provide for a prorated attainment of time-based
restrictions. During the restriction period, unless the Board of
Directors determines otherwise, a participant who holds restricted
stock will be entitled to vote the shares and to receive cash
dividends, if any are declared. The Board of Directors may also
grant restricted stock units, which represent rights to receive
shares of common stock at a future date subject to terms and
conditions, including a risk of forfeiture, established by the
Board of Directors. Participants generally have not rights as
shareholders with respect to the restricted stock units, except
that they may have certain rights to receive an amount equal to
dividends paid by the Company on the equivalent number of shares of
common stock.
Stock Awards. Stock awards consist of the transfer by
the Company to an eligible participant of shares of common stock,
without payment, as additional compensation for services rendered.
The number of shares transferred pursuant to any stock award is
determined by the Board of Directors.
Transferability. Incentives granted under the plan may
not be transferred, pledged or assigned by the holder thereof
except, in the event of the holder’s death, by will or the
laws of descent and distribution to the limited extent provided in
the plan or the incentive, or (in the case of a stock option or an
SAR) pursuant to a qualified domestic relations order as defined by
the Code or Title I of the Employee Retirement Income Security Act,
or the rules thereunder. Nevertheless, stock options and SARs may
be transferred by the holder to his or her family members (e.g.,
spouse, children, grandchildren or parents), to trusts for the
benefit of such family members, to partnerships or limited
liability companies in which family members are the only partners
or shareholders, or to entities exempt from federal income taxation
pursuant to Section 501(c)(3) of the Internal Revenue Code.
Certain Corporate Events. Unless otherwise provided in
the agreement for an incentive, in the event of an acquisition of
the Company through the sale of substantially all of the
Company’s assets or through a merger, exchange,
reorganization or liquidation of the Company or a similar event
(collectively referred to herein as a “transaction”),
the Board of Directors will be authorized, in its sole discretion,
to take any and all action it deems equitable under the
circumstances, including but not limited to:
•
terminating the plan and all incentives and (i) granting the
holders of outstanding vested options, in lieu of any shares of
common stock they would be entitled to receive under such options,
such stock, securities or assets, including cash, as would have
been paid to such participants if their options had been exercised
and such holder had received common stock immediately prior to such
transaction (with appropriate adjustment for the exercise price, if
any); (ii) granting the holders of SARs that entitle the
participant to receive common stock, in lieu of any shares of
common stock each participant was entitled to receive as of the
date of the transaction pursuant to the terms of such incentive, if
any, such stock, securities or assets, including cash, as would
have been paid to such participant if such common stock had been
issued to and held by the participant immediately prior to such
transaction; and (iii) treating holders of any incentive which does
not entitle the participant to receive common stock in an equitable
manner as determined by the Board of Directors;
•
providing that participants holding outstanding vested common
stock-based incentives shall receive, with respect to each share of
common stock issuable pursuant to such incentives as of the
effective date of any such transaction, at the determination of the
Board of Directors, cash, securities or other property, or any
combination thereof, in an amount equal to the excess, if any, of
the fair market value of such common stock on a date within ten
days prior to the effective date of such transaction over the
option price or other amount owed by a participant, if any, and
that such incentives shall be cancelled, including the cancellation
without consideration of all options that have an exercise price
below the per share value of the consideration received by the
Company in the transaction; and
6
•
providing that the plan (or a replacement plan) shall continue with
respect to incentives not cancelled or terminated as of the
effective date of such transaction and provide to participants
holding such incentives the right to earn their respective
incentives on a substantially equivalent basis (taking into account
the transaction and the number of shares or other equity issued by
such successor entity) with respect to the equity of the entity
succeeding the Company by reason of such transaction.
In addition, the Board of Directors may restrict the rights of
participants in the event of a transaction to the extent necessary
to comply with Section 16(b) of the Securities Exchange Act of
1934, the Internal Revenue Code or any other applicable law or
regulation.
Duration, Amendment and Termination. The Board of
Directors may amend or discontinue the 2015 Stock Incentive Plan at
any time. Nevertheless, no such amendment or discontinuance may
adversely change or impair a previously granted incentive without
the consent of the recipient thereof. Certain plan amendments will
require shareholder approval, including amendments which would
increase the maximum number of shares of common stock which may be
issued to all participants under the plan, in order to satisfy
Internal Revenue Code requirements pertaining to
“qualified” incentive stock options under Section 422
of the Internal Revenue Code.
New Plan
Benefits
A new plan benefits table for the 2015 Stock Incentive Plan is not
provided because all awards made under the 2015 Stock Incentive
Plan have been or will be made at the Board of Director’s
discretion, and such discretionary grants are not determinable at
this time. Awards that have been made under the 2015 Stock
Incentive Plan are not contingent upon shareholder approval.
Vote Required
The affirmative vote of the holders of a majority of the shares
present in person or represented by proxy and entitled to vote at
the Special Meeting will be required to approve the 2015 Stock
Incentive Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE
APPROVAL
OF THE 2015 STOCK INCENTIVE PLAN.
7
PROPOSAL 2
APPROVAL OF
REINCORPORATION OF THE COMPANY FROM MINNESOTA TO
DELAWARE
Description of the
Proposed Reincorporation
Our Board of Directors has approved and recommends that our
shareholders approve this proposal to change our state of
incorporation from Minnesota to Delaware. The reincorporation would
be effected through a plan of conversion, attached as Appendix
B (the “Plan of Conversion”), which has been
adopted by our Board of Directors.
If shareholders approve this proposal, then to effect the
reincorporation, the Company will file with the Minnesota Secretary
of State articles of conversion (the “Minnesota Articles of
Conversion”). At the same time, the Company will file with
the Delaware Secretary of State (a) a certificate of conversion
(the “Delaware Certificate of Conversion”) and (b) a
new certificate of incorporation in Delaware in the form attached
as Exhibit A to the Plan of Conversion (the “Delaware
Certificate of Incorporation”). If the shareholders approve
this proposal, and the Minnesota Articles of Conversion, Delaware
Certificate of Conversion and Delaware Certificate of Incorporation
are filed, then the Company will adopt news corporate bylaws in the
form attached as Exhibit B to the Plan of Conversion (the
“Delaware Bylaws”).
The reincorporation will not result in a material change in our
business, directors, officers, employees, assets and liabilities or
the location of our offices. The Company’s common stock will
continue to be listed on the OTCQB, a tier of the OTC Markets,
under the symbol “WCRS.” The Company will continue to
file periodic reports and other documents as required by the rules
and regulations of the SEC. The number of shares of common stock
you own and your proportional percentage ownership of the Company
will remain unchanged and will not be affected in any way by the
reincorporation. Shareholders will not be required to exchange
existing stock certificates for new stock certificates.
The Company is not required to obtain any regulatory approvals in
advance of the reincorporation, and the reincorporation will not
have any material accounting, financial or tax impacts on the
Company.
Reasons for the
Reincorporation
The Board of Directors believes that there are several reasons why
the reincorporation is in the best interests of the Company and our
shareholders. The principal reasons are the highly developed and
more predictable Delaware corporate law, and the generally enhanced
ability of Delaware corporations to attract and retain
directors.
Highly Developed and Predictable Corporate
Law. Delaware has adopted flexible and comprehensive
corporate laws that are revised regularly to meet changing business
circumstances. The Delaware legislature is particularly sensitive
to issues regarding corporate law, it seeks to facilitate corporate
transactions and is especially responsive to developments in modern
corporate law. The Delaware courts have developed considerable
expertise in dealing with corporate issues and transactions.
Moreover, there is a substantial body of case law interpreting
Delaware’s corporate statutes. Delaware has also established
a specialized court, the Court of Chancery, having exclusive
jurisdiction over matters relating to the Delaware General
Corporation Law. The Chancery Court has no jurisdiction over
criminal and tort cases, and corporate cases are heard by judges,
without juries, who have many years of experience with corporate
law issues. Traditionally, this has meant that the Delaware courts
are able in most cases to process corporate litigation relatively
quickly and effectively. In addition, the greater body of developed
law in Delaware permits a company that has become the target of a
shareholder lawsuit or action to better evaluate the relative
strengths and weaknesses of the case and positions of the
shareholder and the company. As a result, it is anticipated that
Delaware law will provide greater flexibility in our legal affairs
than is presently available under Minnesota law.
Enhanced Ability to Attract and Retain Directors. The
current corporate governance environment places a premium on
publicly traded corporations having experienced, independent
directors. Accordingly, there is a high demand for highly qualified
independent directors. At the same time, the current environment
has increased the scrutiny on director actions and at least the
perception of increased liability of directors in general, and
independent directors in particular. The Board of Directors
believes that fewer qualified persons are willing to serve as
independent directors, particularly on boards of smaller public
companies, and qualified directors are choosing to serve on fewer
boards.
As competition for qualified independent directors increases,
directors will often choose to join or remain with boards of
directors of corporations with the most favorable corporate
environment. Our Board of Directors believes that the
reincorporation will enable us to compete more effectively with
other public companies, many of which are already incorporated in
Delaware,
8
enhance our ability to attract and retain qualified directors, and
encourage directors to continue to make independent decisions in
good faith on behalf of the Company.
Effect of the
Reincorporation
If this proposal is approved, the reincorporation will effect a
change in the Company’s state of incorporation from Minnesota
to Delaware. The reincorporation will also effect other legal
changes, which are summarized below in the section entitled
“Differences Related Primarily to State Law.”
The reincorporation will not result in a material change in our
business, directors, officers, employees, assets and liabilities or
the location of our offices. The reincorporation will not affect
our daily business operations, our organizational structure, or our
financial condition and results of operations.
Material Terms of the
Plan of Conversion
The reincorporation will be effected through the Plan of
Conversion. Pursuant to the Plan of Conversion, the Company will
convert into a Delaware corporation and become subject to Delaware
law. All debts, liabilities and duties of the Company immediately
prior to the conversion will remain in place after the conversion.
Each current director and officer will continue to hold his or her
office after the conversion.
If this proposal is approved by shareholders, the Board of
Directors will cause the reincorporation to be effected as soon as
practicable (the “Effective Time”). Nonetheless,
pursuant to the Plan of Conversion, the Board of Directors may (i)
delay the reincorporation or (ii) at its discretion, terminate or
abandon the Plan of Conversion at any time prior to the Effective
Time, including after approval of this proposal, if the Board of
Directors determines for any reason that doing so would be in the
best interests of the Company and its shareholders.
The reincorporation will become effective upon the filing of the
Minnesota Articles of Conversion, Delaware Certificate of
Conversion and the Delaware Certificate of Incorporation. Upon the
effectiveness of the reincorporation, the Company will adopt the
Delaware Bylaws.
The number of shares of common stock you own and your proportional
percentage ownership of the Company will remain unchanged and will
not be affected in any way by the reincorporation. IT WILL NOT BE
NECESSARY FOR OUR SHAREHOLDERS TO EXCHANGE THEIR EXISTING STOCK
CERTIFICATES FOR NEW STOCK CERTIFICATES AS A RESULT OF THE
REINCORPORATION. OUTSTANDING STOCK CERTIFICATES OF THE COMPANY
SHOULD NOT BE DESTROYED OR SENT TO THE COMPANY UNLESS YOU ARE
REQUESTED TO DO SO. Any Minnesota stock certificates submitted to
the Company’s transfer agent for transfer after the Effective
Time, whether pursuant to a sale or otherwise, will receive a State
of Delaware silver over-lay.
Certain United States
Federal Income Tax Consequences
The below only summarizes the material U.S. federal income tax
consequences of the reincorporation to shareholders. ACCORDINGLY,
WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR REGARDING YOUR
PARTICULAR CIRCUMSTANCES AND YOUR TAX CONSEQUENCES RELATING THE
REINCORPORATION, AS WELL AS ANY TAX CHANGES IN CONSEQUENCES ARISING
UNDER THE LAWS OF THE FEDERAL OR ANY STATE, LOCAL, FOREIGN OR OTHER
TAX JURISDICTION.
The reincorporation provided for in the Plan of Conversion is
intended to be a tax-free reorganization under Section 368(a) of
the U.S. Internal Revenue Code. Assuming the reincorporation
qualifies as a tax-free reorganization within the meaning of
Section 368(a) of the U.S. Internal Revenue Code, and subject to
the qualifications and assumptions described in this Proxy
Statement, our shareholders will not recognize any gain or loss as
a result of the consummation of the reincorporation and our
shareholders’ basis and duration of holding our shares will
be unchanged.
Accounting Consequences
Associated with the Reincorporation
Because there is no change in the entity, we do not expect that the
reincorporation to have a material effect on the Company from an
accounting perspective. Historical financial statements of the
Company, which have previously been reported to the SEC on our
periodic reports, as of and for all periods through the date of
this Proxy Statement, will remain the financial statements of the
Company following the reincorporation.
9
Dissenters’
Rights
Action Creating Right
Section 302A.471(e) of the Minnesota Business Corporation Act
(“MBCA”) grants any shareholder of record of the
Company, and any beneficial owner of shares of the Company, as of
the record date of December 11, 2015, the right to object to the
reincorporation and obtain payment from the Company for the fair
value of their shares at the Effective Time. The Board of Directors
reserves the right to abandon the reincorporation in the event that
shareholders holding 0.25% or more of the Company’s
outstanding shares properly exercise their right to dissent with
respect to such shares.
Requirements for Exercising
TO BE ENTITLED TO PAYMENT, THE DISSENTING SHAREHOLDER MUST FILE
WITH THE COMPANY, BEFORE THE VOTE FOR THE REINCORPORATION AND THE
PLAN OF CONVERSION, A WRITTEN NOTICE OF INTENT TO DEMAND PAYMENT OF
THE FAIR VALUE OF THE SHARES AND MUST NOT VOTE IN FAVOR OF THE
REINCORPORATION AND THE PLAN OF CONVERSION. THIS DEMAND WILL BE OF
NO FORCE AND EFFECT IF THE REINCORPORATION IS NOT EFFECTED. The
notice must be submitted to the Company at 11550 “I”
Street, Suite 150, Omaha, Nebraska 68137, Attention: Secretary and
must be received before the vote for the proposed reincorporation.
A vote against the reincorporation is not necessary for the
shareholder to exercise dissenters’ rights and require the
Company to purchase their shares. A vote against the
reincorporation will not be deemed to satisfy the notice
requirements of state law. The liability to the dissenting
shareholder for the fair value of the shares also shall be the
liability of the Company, as a Delaware corporation, when and if
the reincorporation is effective. Any shareholder contemplating the
exercise of these dissenters’ rights should review carefully
the provisions of Sections 302A.471 and 302A.473 of the MBCA,
particularly the procedural steps required to perfect such rights.
SUCH DISSENTERS’ RIGHTS WILL BE LOST IF THE PROCEDURAL
REQUIREMENTS OF SECTIONS 302A.471 AND 302A.473 ARE NOT FULLY AND
PRECISELY SATISFIED. A COPY OF SECTIONS 302A.471 AND 302A.473 IS
ATTACHED AS APPENDIX C TO
THIS PROXY STATEMENT.
Notice of Procedure
If and when the proposed reincorporation is approved by
shareholders of the Company and if the reincorporation is not
abandoned by the Board of Directors, the Company will deliver to
all shareholders who have properly dissented from the
reincorporation a notice that: (1) lists the address to which
demand for payment and certificates for shares must be sent to
obtain payment for such shares and the date by which such
certificates must be received; (2) describes any restriction on
transfer of uncertificated shares that will apply after the demand
for payment is received; (3) encloses a form to demand payment and
to be used to certify the date on which the shareholder, or the
beneficial owner on whose behalf the shareholder dissents, acquired
the shares or an interest in them; and (4) encloses a copy of
Sections 302A.471 and 302A.473 of the MBCA and a brief description
of the procedures to be followed to dissent and obtain payment of
fair values for shares.
Submission of Share Certificates
To receive the fair value of his, her, or its shares, a dissenting
shareholder must demand payment and deposit his, her or its share
certificates within 30 days after the notice is delivered by the
Company, but the dissenting shareholder retains all other rights of
a shareholder until the proposed action takes effect. Under
Minnesota law, notice by mail is made by the Company when deposited
in the United States mail. A shareholder who fails to make demand
for payment and fails to deposit certificates will lose the right
to receive the fair value of the shares notwithstanding the timely
filing of such shareholder’s notice of intent to demand
payment.
Purchase of Dissenting Shares
After the Effective Time, the Company shall remit to the dissenting
shareholders who have complied with the above-described procedures
the amount the Company estimates to be the fair value of the shares
held by such shareholders, plus interest accompanied by certain
financial information about the Company, an estimate of the fair
value of the shares and the method used and a copy of Sections
302A.471 and 302A.473 of the MBCA, and a brief description of the
procedure to be followed to demand supplemental payment.
10
Acceptance or Settlement of Demand
If a dissenting shareholder believes that the amount remitted by
the Company is less than the fair value of the shares, with
interest, then the dissenting shareholder may give written notice
to the Company of his or her estimate of fair value, with interest,
within 30 days after the Company mails such remittance and must
demand payment of the difference. UNLESS A SHAREHOLDER MAKES SUCH A
DEMAND WITHIN SUCH THIRTY-DAY PERIOD, THE SHAREHOLDER WILL BE
ENTITLED ONLY TO THE AMOUNT REMITTED BY THE COMPANY. Within 60 days
after the Company receives such a demand from a shareholder, it
will be required either to pay the shareholder the amount demanded
(or agreed to after discussion between the shareholder and the
Company) or to file in court a petition requesting that the court
determine the fair value of the shares, with interest.
Court Determination
All shareholders who have demanded payment for their shares, but
have not reached agreement with the Company, will be made parties
to such court proceeding. The court will then determine whether the
dissenting shareholders have fully complied with the provisions of
Section 302A.473 of the MBCA and will determine the fair value of
the shares, taking into account any and all factors the court finds
relevant (including the recommendation of any appraisers appointed
by the court), computed by any method that the court, in its
discretion, sees fit to use, whether or not such method was used by
the Company or a shareholder. The expenses of the court proceeding
will be assessed against the Company, except that the court may
assess part or all of those costs and expenses against a
shareholder whose action in demanding payment is found to be
arbitrary, vexatious, or not in good faith. The fair value of the
Company’s shares means the fair value of the shares
immediately before the Effective Time. Under Section 302A.471 of
the MBCA, a shareholder of the Company has no right at law or
equity to set aside the effect of the reincorporation pursuant to
the Plan of Conversion, except if such consummation is fraudulent
with respect to such shareholder or the Company. Any shareholder
making a demand for payment of fair value for his or her shares may
withdraw the demand at any time before the determination of the
fair value of the shares by filing with the Company written notice
of such withdrawal.
Effect of Vote for the
Reincorporation Proposal
A vote in favor of this proposal is a vote in favor of approving
the reincorporation and the Plan of Conversion. Upon the approval
of the holders of a majority of the shares present in person or
represented by proxy and entitled to vote at the Special Meeting,
the Company will be authorized to file the Minnesota Articles of
Conversion, the Delaware Certificate of Conversion and the Delaware
Certificate of Incorporation, and adopt the Delaware Bylaws.
Failure to Obtain
Approval
If we fail to obtain the requisite vote of shareholders for
approval of this proposal, the reincorporation will not occur and
the Company will continue to be incorporated in Minnesota and
governed by Minnesota law, and the provisions of our Amended and
Restated Articles of Incorporation, as amended (the
“Minnesota Articles of Incorporation”) and our Amended
and Restated Bylaws, as amended (the “Minnesota
Bylaws”).
Comparison of the Rights
of Shareholders
General
Assuming our shareholders approve the reincorporation, your rights
will be governed by Delaware law and the provisions of the Delaware
Certificate of Incorporation and Delaware Bylaws. Forms of the
Delaware Certificate of Incorporation and Delaware Bylaws are
attached as Exhibits A and B, respectively, to Appendix B
to this Proxy Statement. Your rights under Delaware law will differ
in certain respects from your current rights under Minnesota law,
which are summarized in the sections entitled “Differences
Related Primarily to Charter Documents” and
“Differences Related Primarily to State Law” below.
Authorized Capital
At the Effective Time:
•
Our authorized capital stock will continue to consist of 12,500,000
shares of no par value stock.
•
All of the issued and outstanding shares of common stock at that
time will remain issued and outstanding.
11
•
The holders of shares of common stock will continue to be entitled
to one vote per share on all matters to be voted on by
shareholders.
•
The holders of shares of common stock will continue to be entitled
to receive dividends, if any, as may be declared by our Board of
Directors in its discretion out of legally available funds.
•
Our common stock will continue to be conducted on the OTCQB, a tier
of the OTC Markets, under the symbol “WCRS.”
•
Corporate Stock Transfer, Inc. will continue to be the transfer
agent and registrar for our common stock.
•
Our 2015 Stock Incentive Plan will remain in place and the number
of stock awards issued and outstanding pursuant to the 2015 Stock
Incentive Plan will remain unchanged and will be subject to the
same terms and conditions.
Differences in Charter
Documents
The provisions of the Delaware Certificate of Incorporation and the
Delaware Bylaws are similar in substance to those of the
Company’s existing Minnesota Articles of Incorporation and
Minnesota Bylaws in most respects. The differences include but are
not limited to:
•
the Board will no longer be able to take action by written consent
without obtaining unanimous consent;
•
the Delaware Bylaws will allow shareholders to act by written
consent but will no longer require that they do so unanimously;
and
•
the Delaware Bylaws will allow the number of directors to be
increased or decreased from time to time by the Board.
The Delaware Certificate of Incorporation and Delaware Bylaws are
attached to this Proxy Statement as Exhibits A and B, respectively,
to Appendix B to
this Proxy Statement. Other significant changes of a legal nature
are summarized in the section immediately below entitled,
“Differences Related Primarily to State Law.”
Differences in State
Law
The reincorporation will result in certain changes to the rights of
the Company’s shareholders because of differences between
Minnesota law and Delaware law. The most significant provisions of
Minnesota law and Delaware law are summarized below. This summary
is not an exhaustive list of all differences, or a complete
description of the differences described, and is qualified in its
entirety by reference to Minnesota law, Delaware law, the Minnesota
Articles of Incorporation, the Minnesota Bylaws, the Delaware
Certificate of Incorporation and the Delaware Bylaws. Copies of the
Minnesota Articles of Incorporation and Minnesota Bylaws are filed
with the SEC.
Voting Power of Capital Stock
Minnesota. Each
holder of our common stock has the right to cast one vote for each
such share of common stock held of record on all matters voted on
by the shareholders, including the election of directors. Under
Minnesota law, unless explicitly denied in a corporation’s
articles of incorporation, shareholders are entitled to cumulative
voting in the election of directors. The Minnesota Articles of
Incorporation deny cumulative voting rights, and therefore, our
shareholders are not entitled to them.
Delaware. Each
holder of shares of the Delaware Company’s common stock has
the right to cast one vote for each share of common stock held of
record on all matters voted on by the stockholders, including the
election of directors. Under Delaware law, stockholders are not
entitled to cumulative voting rights unless a corporation’s
certificate of incorporation explicitly authorizes them. The
Delaware Certificate of Incorporation does not authorize cumulative
voting rights for stockholders, and therefore, our stockholders
would continue to not be entitled to them.
Action by Directors Without a Meeting
Minnesota and Delaware law permit directors to take written action
without a meeting for an action otherwise required or permitted to
be taken at a board meeting.
12
Minnesota. Minnesota
law provides that a corporation’s articles of incorporation
may provide for such written action, other than an action requiring
shareholder approval, by the number of directors that would be
required to take the same action at a meeting of the board at which
all directors were present. Our Minnesota Bylaws contain such a
provision. Minnesota law also states that if the articles of
incorporation or bylaws so provide, a director may give advance
written consent or opposition to a proposal to be acted on at a
board meeting; however, such consent or opposition of a director
not present at a meeting does not constitute presence for
determining the existence of a quorum. The Minnesota Bylaws also
contain such a provision.
Delaware. Delaware
law provides for written action to be taken unanimously by all
members of the Board of Directors. The Delaware Bylaws contain such
a provision. Delaware law does not contain any advance written
consent or opposition provision.
Conflicts of Interest
Under both Minnesota law and Delaware law, a contract or
transaction between a corporation and one or more of its directors,
or an entity in or of which one or more of the corporation’s
directors are directors, officers, or legal representatives or have
a material financial interest, is not void or voidable solely
because of such reason, provided that the contract or transaction
is fair and reasonable at the time it is authorized, such contract
or transaction is approved by the corporation’s disinterested
stockholders after disclosure of the relationship or interest, or
such contract or transaction is approved in good faith by a
majority of the disinterested members of the board of directors
after disclosure of the relationship or interest. One difference
between Minnesota law and Delaware law on this subject, however, is
that under Minnesota law, either (1) the holders of two-thirds of
the voting power of the shares entitled to vote which are owned by
persons other than the interested director or directors, or (2) the
unanimous affirmative vote of the holders of all outstanding
shares, whether or not entitled to vote, must approve the contract
or transaction, whereas under Delaware law, only a majority of the
disinterested stockholders is required. Under Minnesota law and
Delaware law, contracts or transactions between a corporation and
one or more of its directors or between a corporation and any other
entity in which one or more of its directors are directors or have
a financial interest, are not void or voidable because of such
interest or because such director is present at a meeting of the
board of directors which authorizes or approves the contract or
transaction, as long as certain conditions, such as obtaining the
required approval and fulfilling the requirements of good faith and
full disclosure, are met. With certain exceptions, the conditions
are similar under Minnesota law and Delaware law. Under both
Minnesota law and Delaware law, either (1) the security holders or
the board of directors must approve any such contract or
transaction in good faith after full disclosure of the material
facts, or (2) the contract or transaction must have been
“fair” (according to Delaware law) or “fair and
reasonable” (according to Minnesota law).
Minnesota. If
such contract or transaction is authorized by the board, under
Minnesota law the interested director may not be counted in
determining the presence of a quorum and may not vote on such
contract or transaction, and further provides that the contract or
transaction shall not be void or voidable solely because the
interested director is present at the meeting which authorizes the
contract or transaction.
Delaware. Delaware
law permits the interested director to be counted in determining
whether a quorum of the directors is present at the meeting
approving the contract or transaction, and further provides that
the contract or transaction shall not be void or voidable solely
because the interested director’s vote is counted at the
meeting which authorizes the contract or transaction.
Number of Directors
Minnesota. Minnesota
law provides that the number of directors shall be fixed by or in
the manner provided in the articles of incorporation or bylaws, and
that the number of directors may be changed at any time by
amendment to or in the manner provided in the articles of
incorporation or bylaws. Under the Minnesota Bylaws, the Board
shall consist of five directors and such number may be either
increased or decreased by resolution of the shareholders at their
regular meetings or at a special meeting called for that purpose
and may also be increased (but not decreased) by resolution adopted
by the affirmative vote of a majority of the Board.
Delaware. Delaware
law provides that the number of directors shall be fixed by, or in
the manner provided in, the bylaws, unless the certificate of
incorporation fixes the number of directors, in which case a change
in the number of directors shall be made only by amendment of the
certificate. The Delaware Bylaws provide that the Board shall
consist of one or more directors, and the number of directors may
be increased or decreased from time to time by the Board.
13
Classified Board of Directors
Both Minnesota and Delaware permit a corporation’s bylaws to
provide for a classified board of directors. Delaware permits a
maximum of three classes while Minnesota law does not limit the
number of classes. Neither the Minnesota Bylaws nor the Delaware
Bylaws for the Delaware Company provide for a classified board.
Removal of Director
Minnesota. Under
Minnesota law, unless a corporation’s articles of
incorporation or bylaws provide otherwise, a director may be
removed, with or without cause, if: (i) by the affirmative vote of
the holders of a majority of the voting power of all shares
entitled to vote at an election of directors, or (ii) if the
director was named by the board to fill a vacancy and the
shareholders have not subsequently elected directors, by the
affirmative vote of a majority of the other directors. The
Minnesota Bylaws provide that (i) any director who has been elected
by the Board to fill a vacancy or to fill a directorship created by
action of the Board, and who has not subsequently been reelected by
the shareholders, may be removed by a majority vote of all
directors constituting the Board, exclusive of the director whose
removal is proposed or (ii) in the manner permitted by Minnesota
law.
Delaware. Under
Delaware law, a director of a corporation may be removed with or
without cause by the affirmative vote of a majority of shares
entitled to vote for the election of directors except under limited
circumstances.
Vacancies on Board of Directors
Minnesota. Under
Minnesota law, unless the articles of incorporation or bylaws
provide otherwise, (a) a vacancy on a corporation’s board of
directors resulting from death, resignation, removal or
disqualification of a director may be filled by the affirmative
vote of a majority of directors then in office, even though less
than a quorum, (b) a vacancy on the board resulting from a newly
created directorship resulting from an increase in the number of
directors may be filled by the affirmative vote of the majority of
the directors serving at the time of the increase, and (c) any
director so elected shall hold office only until a qualified
successor is elected at the next regular or special meeting of
shareholders. The Minnesota Bylaws provide that any vacancy on the
Board may be filled by vote of the remaining directors, even though
less than a quorum.
Delaware. Under
Delaware law, a vacancy on a corporation’s board of directors
may be filled by a majority of the remaining directors, even if
less than a quorum, or by a sole remaining director, or by the
affirmative vote of a majority of the outstanding voting shares,
unless otherwise provided in the certificate of incorporation or
bylaws. The Delaware Bylaws follow these provisions.
Standard of Conduct for Directors
Minnesota. Minnesota
law provides that a director must discharge the director’s
duties in good faith, in a manner the director reasonably believes
to be in the best interests of the corporation, and with the care
an ordinarily prudent person in a like position would exercise
under similar circumstances. A director who complies with such
standards may not be held liable by reason of being a director or
having been a director of the corporation.
Delaware. Under
Delaware law, the standards of conduct for directors have developed
through written opinions of the Delaware courts. Generally,
directors of Delaware corporations are subject to a duty of loyalty
and a duty of care. The duty of loyalty has been said to require
directors to refrain from self-dealing and the duty of care
requires directors managing the corporate affairs to use that
amount of care which ordinarily careful and prudent persons would
use in similar circumstances. In general, gross negligence has been
established as the test for breach of the standard for the duty of
care in the process of decision-making by directors of Delaware
corporations. When directors act in a manner consistent with their
duties of loyalty and care, their decisions generally are presumed
to be valid under the business judgment rule.
Indemnification of Directors and Officers
Minnesota law and Delaware law both contain provisions setting
forth conditions under which a corporation may indemnify its
directors, officers and employees. While indemnification is
permitted only if statutory standards of conduct are met, Minnesota
law and Delaware law are substantially similar in providing for
indemnification if the person acted in good faith and in a manner
the person reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe the
conduct was unlawful. The statutes differ, however, with respect to
whether indemnification is permissive or mandatory, where there is
a distinction between third-party actions and actions by or
14
in the right of the corporation, and whether, and to what extent,
reimbursement of judgments, fines, settlements, and expenses is
allowed. The major difference between Minnesota law and Delaware
law is that while indemnification of officers, directors and
employees is mandatory under Minnesota law, indemnification is
permissive under Delaware law, except that a Delaware corporation
must indemnify a person who is successful on the merits or
otherwise in defense of certain specified actions, suits or
proceedings for expenses and attorney’s fees actually and
reasonably incurred in connection therewith.
Minnesota law requires a
corporation to indemnify any director, officer or employee who is
made or threatened to be made a party to a proceeding by reason of
the former or present official capacity of the director, officer or
employee, against judgments, penalties, fines, settlements and
reasonable expenses. Minnesota law permits a corporation to
prohibit indemnification by so providing in its articles of
incorporation or bylaws. The Company has not limited the statutory
indemnification in the Minnesota Articles or Minnesota Bylaws. The
Minnesota Bylaws provide for indemnification to the fullest extent
permitted by Minnesota law.
Although indemnification is permissive in Delaware, a corporation
may, through its certificate of incorporation, bylaws or other
corporate agreements, make indemnification mandatory. The Delaware
Certificate of Incorporation provides for indemnification to the
fullest extent permitted by Delaware law.
There is no pending or, to the Company’s knowledge,
threatened litigation to which any of its directors is a party in
which the rights of the Company or its shareholders would be
affected if the Company currently were subject to the provisions of
Delaware law rather than Minnesota law.
Limitation of Liability
Minnesota. Minnesota
law provides that the personal liability of a director for breach
of fiduciary duty may be eliminated or limited if the articles of
incorporation so provide, but the articles may not limit or
eliminate such liability for (a) any breach of the directors’
duty of loyalty to the corporation or its shareholders, (b) acts or
omissions not in good faith or that involve intentional misconduct
or a knowing violation of law, (c) the payment of unlawful
dividends, stock repurchases or redemptions, (d) any transaction in
which the director received an improper personal benefit, (e)
certain violations of the Minnesota securities laws, and (f) any
act or omission that occurs before the effective date of the
provision in the articles eliminating or limiting liability. The
Minnesota Articles of contain such provision and limitations.
Delaware. Delaware
law provides that a corporation is permitted to adopt a provision
in its certificate of incorporation eliminating or limiting the
personal liability of a director to the corporation and its
shareholders for monetary damages for breach of fiduciary duty as a
director. Delaware law currently provides that this limitation of
liability does not apply to liability (a) for breach of the
director’s duty of loyalty to the corporation or its
shareholders, (b) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (c)
illegal distributions to shareholders or unlawful stock
repurchases, or (d) for any transaction from which the director
derived any improper personal benefit. The Delaware Certificate of
Incorporation provides that, to the fullest extent permitted by
Delaware law, a director shall not be personally liable to the
Company or its stockholders for monetary damages for breach of a
directors’ fiduciary duty.
The Company is not aware of any pending or threatened litigation to
which the limitation of directors’ liability would apply.
Treasury Shares
Minnesota. Minnesota
law does not allow treasury shares.
Delaware. Under
Delaware law, the Company may hold treasury shares and such shares
may be held, sold, loaned, pledged or exchanged by the Company.
Such treasury shares, however, are not outstanding shares and
therefore do not receive any dividends and do not have voting
rights.
Amendment of Articles of Incorporation and Certificate of
Incorporation
Minnesota. Minnesota
law provides that a corporation may amend its articles of
incorporation by adoption of a board resolution followed by a
majority vote of shareholders, unless the articles of incorporation
require a larger percentage. In addition, shareholders owning 3% or
more of the voting power of shares entitled to vote may propose an
amendment to the articles of incorporation and submit the amendment
to shareholders for approval, and the amendment may be adopted by a
majority vote without board approval. If the articles provide for a
larger proportion or number to transact a specified type of
business at a meeting, the affirmative vote of that larger
proportion or number is necessary to amend the articles to decrease
the proportion or number necessary to transact the business.
15
Delaware. Delaware
law provides that the certificate of incorporation of a Delaware
corporation may be amended upon adoption by the board of directors
of a resolution setting forth the proposed amendment and declaring
its advisability, followed by the affirmative vote of a majority of
the outstanding shares entitled to vote and by the affirmative vote
of a majority of each class entitled to vote as a class thereon. It
also provides that a certificate of incorporation may provide for a
greater or lesser vote than would otherwise be required by Delaware
law. The Delaware Certificate of Incorporation does not provide for
a different threshold.
Amendment of Bylaws
Minnesota. Shareholders
holding 3% or more of the voting power of the shares entitled to
vote may propose an amendment to the bylaws and submit the
amendment to shareholders for approval, and the amendment may be
adopted by a majority vote without board approval.
Minnesota law also provides that the board may adopt, amend or
repeal the bylaws, subject to the power of the shareholders as
described above. After the adoption of the initial bylaws, the
board may not adopt, amend, or repeal a bylaw fixing a quorum for
meetings of shareholders, prescribing procedures for removing
directors or filling vacancies in the board, or fixing the number
of directors or their classifications, qualifications, or terms of
office, but may adopt or amend a bylaw to increase the number of
directors.
Delaware. Under
Delaware law, stockholders have the authority to make, alter, amend
or repeal the bylaws of a corporation and such power may be
delegated to the board of directors. The Delaware Bylaws give the
Board the authority to adopt, amend or repeal the bylaws. In
addition, stockholders will be entitled to amend the Delaware
Bylaws.
Shareholder Action
Under both the Minnesota law and Delaware law, action on certain
matters, including the sale, lease or exchange of all or
substantially all of the Company’s property or assets,
mergers, and consolidations and voluntary dissolution, must be
approved by the holders of a majority of the voting power. With
regard to the sale of “substantially all” assets, under
Delaware law the definition of “substantially all” has
been left to case law to be determined. Delaware case law requires
both a quantitative and qualitative analysis of the assets being
sold in order to determine if they constitute “substantially
all” and, as a result, there is often substantial uncertainty
regarding the need for stockholder approval when a corporation
disposes of a significant amount of its assets. The Minnesota
statute provides that shareholder approval is required for an asset
sale outside the ordinary course only if it would leave the
corporation without a “significant continuing business
activity.” Additionally, the Minnesota statute provides that
“a business activity that represented at least (1) 25% of the
corporation’s total assets at the end of the most recently
completed fiscal year, and (2) 25% of either income from continuing
operations before taxes or revenues from continuing operations for
that fiscal year, measured on a consolidated basis,” will
conclusively be deemed to be a “significant continuing
business activity.”
Both states’ laws provide that the articles or certificate of
incorporation may provide for a supermajority of the voting power
of the outstanding shares to approve such extraordinary corporate
transactions. Neither the Minnesota Articles of Incorporation nor
the Delaware Certificate of Incorporation contain such a
provision.
Shareholder Quorum
Minnesota. Minnesota
law provides that the holders of a majority of the voting power of
the shares entitled to vote at a meeting are a quorum, unless the
articles or bylaws provide otherwise. The Minnesota Bylaws provide
that the holders of one-third of the voting power of the shares
entitled to vote at a meeting constitute a quorum.
Delaware. Delaware
law provides that a majority of the shares entitled to vote
generally constitutes a quorum at a meeting, unless the certificate
of incorporation or bylaws provide otherwise. The Delaware Bylaws
will continue to provide that the holders of one-third of the
voting power of the shares constitute a quorum.
Shareholders’ Action Without a Meeting
Minnesota. Under
Minnesota law, any action required or permitted to be taken at a
shareholders’ meeting of a publicly held company may be taken
without a meeting by written consent signed by all of the
shareholders entitled to vote on such action, and a publicly held
company cannot provide for a lower threshold in its articles of
incorporation.
16
Delaware. Delaware
law provides that unless the certificate of incorporation provides
otherwise, any action to be taken at a meeting of the shareholders
may be taken without a meeting if the holders of outstanding stock
having at least the minimum number of votes that would be necessary
to authorize or take such action at a meeting consent to the action
in writing. Stockholders who do not sign the written consent must
be notified promptly following the effectiveness of a written
consent. The Delaware Certificate of Incorporation allows
stockholders’ to take action by written consent without a
meeting; stockholders may take action with the minimum number of
votes that would be necessary to authorize or to take the
action.
Special Meetings
Minnesota. According
to the Minnesota Bylaws, special meetings of the Company’s
shareholders may be called by the President, Treasurer, by the
Board or two or more directors, or by a holder or holders of 10% or
more of the issued and outstanding voting shares of the
corporation.
Delaware. Delaware
law provides that special meetings of the stockholders of a
corporation may be called by the corporation’s board of
directors or by such other persons as may be authorized in the
corporation’s certificate of incorporation or bylaws. The
Delaware Bylaws provide that special meetings may be called by the
entire Board or any two or more directors, the Chief Executive
Officer, and, in addition, shall be called by the Chairman of the
Board, the Chief Executive Officer or the Secretary at the request
in writing of stockholders owning not less than 10% of the entire
capital stock of the corporation issued and outstanding and
entitled to vote.
Advance Notice
Minnesota. When
required, Minnesota law requires that notice be given at least 10
days before the date of the meeting, or a shorter time provided in
the articles or bylaws, and not more than 60 days before the date
of the meeting. The Minnesota Bylaws provide that mailed notice
must be mailed at least 10 days prior to the meeting and in no
event shall the notice be given more than 60 days in advance of the
meeting; however, if a plan of merger, exchange, sale or other
disposition of all or substantially all the assets is to be
considered, notice shall be given not less than 14 days prior to
the meeting.
Delaware. When
required, Delaware law requires that notice be given not less than
10 nor more than 60 days before the date of a meeting. Unlike
Minnesota, Delaware does not permit a company to reduce the notice
requirement in its certificate of incorporation or bylaws.
Dividends
Minnesota. Generally,
a Minnesota corporation may pay a dividend if its board of
directors determines that the corporation will be able to pay its
debts in the ordinary course of business after paying the dividend
and if, among other things, the dividend payment does not reduce
the remaining net assets of the corporation below the aggregate
preferential amount payable in the event of liquidation to the
holders of the shares having preferential rights, unless the
payment is made to those shareholders in the order and to the
extent of their respective priorities.
Delaware. A
Delaware corporation may pay dividends out of surplus or, if there
is no surplus, out of net profits for the fiscal year in which the
dividend is declared and/or for the preceding fiscal year, except
that dividends may not be paid out of net profits if, after the
payment of the dividend, capital is less than the capital
represented by the outstanding stock of all classes having a
preference upon the distribution of assets.
Anti-Takeover Legislation
Both Minnesota law and Delaware law contain provisions intended to
protect shareholders from individuals or companies attempting a
takeover of a corporation in certain circumstances. The
anti-takeover provisions of Minnesota law and Delaware law differ
in a number of respects, and it is not practical to summarize all
of the differences. However, the following is a summary of certain
significant differences.
The Minnesota control share acquisition statute establishes various
disclosure and shareholder approval requirements that must be
satisfied by individuals or companies. Delaware has no comparable
provision. The Minnesota statute requires disinterested shareholder
approval for any “control share acquisition” of stock
of an “issuing public corporation.” A “control
share acquisition” includes any share acquisition that
exceeds specified levels of voting power (20%, 33 1/3%, and 50%) of
the stock of the target. An “issuing public
corporation” is a publicly held corporation which is
incorporated under or governed by the Minnesota
17
statute and has at least fifty shareholders. The Company is subject
to the statute; upon effectiveness of the reincorporation, because
it is a Delaware corporation, will not be subject to the statute.
Accordingly, shareholders who acquire shares without shareholder
approval and in excess of a designated percentage of outstanding
shares lose their voting rights and are subject to certain
redemption privileges of the corporation. Such shares regain their
voting rights only if the acquiring person discloses certain
information to the corporation and such voting rights are granted
by the shareholders at an annual or special meeting of the
shareholders. There are a number of important exclusions intended
primarily to distinguish hostile acquisitions from transactions
negotiated and approved by the management and shareholders,
including exclusions for shares acquired (i) pursuant to a merger,
plan of exchange or sale of assets, (ii) directly from the target
issuer, (iii) in a cash tender offer for all outstanding shares if
the offer has been approved in advance by the board of directors of
the target, and (iv) by employee benefit plans. The Minnesota
control share acquisition statute applies unless the “issuing
public corporation” opts out of the statute in its articles
of incorporation or bylaws. Our Company has opted out of the of the
statute.
While there is no Delaware statute comparable to the Minnesota
control share acquisition statute, both Minnesota and Delaware have
business combination statutes that are intended primarily to deter
takeover bids which propose to use the target’s assets as
collateral for the offeror’s debt financing and to liquidate
the target, in whole or in part, to satisfy financing
obligations.
Delaware. Delaware
law restricts certain business combination transactions between a
shareholder acquiring 15% or more (designated as an
“interested” shareholder) of the voting stock and any
Delaware corporation with securities traded on a national exchange,
quoted on the NASDAQ Stock Market or owned of record by at least
2,000 shareholders. Unless an exception is available, the statute
provides that for three years after the 15% threshold is exceeded,
the corporation cannot have a merger, sale of substantial assets,
loan, substantial issuance of stock, plan of liquidation, or
reincorporation involving the interested shareholder or its
affiliates. Shareholders may opt out at any time by majority vote,
but the decision is not effective for one year.
There are a number of important exceptions to the basic prohibition
on business combination transactions. First, the Delaware statute
does not prohibit a business combination if, prior to becoming an
interested shareholder, the board of directors has approved the
business combination or the transaction which resulted in the
shareholder passing the 15% threshold. Second, a business
combination is permissible if the interested shareholder acquires
85% of the target’s outstanding voting stock (excluding
shares held by management or held in employee benefit plans in
which the employees do not have a confidential right to vote) in
the transaction in which the 15% threshold is exceeded. Third, a
business combination is permissible if approved by the board and
authorized at an annual or special meeting of shareholders, and not
by written consent, by the affirmative vote of two-thirds of the
outstanding shares held by disinterested shareholders. Finally, if
the target corporation, with the support of the majority of its
continuing directors, proposes at any time another merger or sale
or does not oppose another tender offer for at least 50% of its
shares, the interested shareholder is released from the three year
prohibition and free to compete with the target-supported
transaction. In addition, note that while Delaware permits
companies to opt out of its business combination statute, but the
Delaware Company’s Certificate of Incorporation does not
include this opt-out provision.
Minnesota. Minnesota
law is similar to that of Delaware. However, there are some
differences, including (i) the interested shareholder threshold is
10% rather than 15%, (ii) the prohibition period for business
combinations is four years from the time the shareholder passes the
threshold instead of three years, and (iii) there are no
equivalents to the Delaware exceptions for acquisition of 85% of
voting stock, for two-thirds shareholder approval at a shareholder
meeting or for management approval of a competing transaction or
tender offer.
The Minnesota provision applies to “issuing public
corporations,” defined as any Minnesota corporation with at
least 100 shareholders (or with at least 50 shareholders if the
Minnesota corporation is a publicly held corporation). Issuing
public corporations that are publicly held are automatically
subject unless they opt out by charter amendment and issuing public
corporations that are not publicly held are subject only if they
opt in by charter amendment.
Minnesota law includes other provisions relating to takeovers that
are not included in Delaware law. Some of these provisions address
a corporation’s use of golden parachutes, greenmail and the
standard of conduct of the Board of Directors in connection with
the consideration of takeover proposals. The Minnesota statute
contains a provision that prohibits a publicly held corporation
from entering into or amending agreements (commonly referred to as
golden parachutes) that increase current or future compensation of
any officer or director during any tender offer or request or
invitation for tenders. The Minnesota statute provides that a
publicly held corporation is prohibited from purchasing or agreeing
to purchase any shares from a person who beneficially owns more
than 5% of the voting power of the corporation if the shares had
been beneficially owned by that person for less than two years, and
if the purchase price would exceed the market value of those
shares. However, such a purchase will not violate the statute if
the purchase is approved at a meeting of the shareholders by a
majority of the voting power of all shares entitled to vote or if
the corporation’s offer is of at least equal value per share
and made to all holders of shares of the class or
18
series and to all holders of any class or series into which the
securities may be converted. In considering the best interests of
the corporation with respect to a proposed acquisition of an
interest in the corporation, Minnesota law authorizes the board of
directors to consider the interest of the corporation’s
employees, customers, suppliers and creditors, the economy of the
state and nation, community and social considerations and the
long-term as well as short-term interests of the corporation and
its shareholders, including the possibility that these interests
may be best served by the continued independence of the
corporation.
Inspection of Shareholder Lists
Minnesota. Under
Minnesota law, any shareholder of a publicly held corporation has a
right, upon written demand stating the purpose and acknowledged or
verified in accordance with Minnesota law, to examine and copy the
corporation’s share register and other corporate records
reasonably related to the stated purpose and described with
reasonable particularity in the written demand upon demonstrating
the stated purpose to be a proper purpose.
Delaware. Under
Delaware law, any stockholder, upon written demand under oath
stating the purpose thereof, has the right during the usual hours
for business to inspect for any proper purpose a list of the
corporation’s stockholders and to make copies or extracts
therefrom.
Preemptive Rights
Minnesota. Under
Minnesota law, unless limited or denied in a corporation’s
articles of incorporation, shareholders have a right to purchase a
fraction of securities or rights to purchase securities before a
corporation may offer them to other purchasers (subject to certain
exemptions). The Minnesota Articles of Incorporation denied
preemptive rights to shareholders.
Delaware. Under
Delaware law, stockholders are not entitled to preemptive rights
unless a corporation’s certificate of incorporation
authorizes them. The Delaware Certificate of Incorporation does not
authorize preemptive rights for shareholders.
Appraisal (Dissenters’) Rights
In some circumstances under Minnesota law and Delaware law,
shareholders have the right to dissent from certain corporate
transactions by demanding payment in cash for their shares equal to
the fair value of the shares as determined by agreement with the
corporation or by a court in an action timely brought by the
dissenting shareholders. Minnesota law, in general, affords
dissenters’ rights upon certain amendments to the articles of
incorporation that materially and adversely affect the rights or
preferences of the shares of the dissenting shareholder, upon the
sale of substantially all corporate assets and upon merger or
exchange by a corporation.
Delaware law allows for dissenters’ rights only in connection
with certain mergers or consolidations. No such appraisal rights
exist, however, for corporations whose shares are listed on a
national securities exchange or held of record by more than 2,000
shareholders unless the certificate of incorporation provides
otherwise (the Delaware Company Certificate does not provide
otherwise) or the shareholders of which are to receive in the
merger or consolidation anything other than (a) shares of stock of
the corporation surviving or resulting from such merger or
consolidation, (b) shares of stock of any other corporation which
at the effective date of the merger or consolidation will be either
listed on a national securities exchange or held of record by more
than 2,000 shareholders, (c) cash in lieu of fractional shares of
the corporation described in the foregoing clauses (a) and (b), or
(d) any combination of clauses (a), (b), or (c). The procedures for
asserting dissenters’ rights in Delaware impose most of the
initial costs of such assertion on the dissenting shareholder,
whereas the Minnesota procedures pose little financial risk to the
dissenting shareholder in demanding payment in excess of the amount
the corporation determined to be the fair value of its shares due
to the fact that the Minnesota shareholder is paid up front the
value determined by the corporation.
Vote Required
The affirmative vote of the holders of a majority of the shares
present in person or represented by proxy and entitled to vote at
the Special Meeting will be required to approve the
reincorporation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR
THE
REINCORPORATION OF THE COMPANY FROM MINNESOTA TO
DELAWARE.
19
EXECUTIVE
COMPENSATION
Summary Compensation
Table
The following table sets forth the cash and non-cash compensation
for awarded to or earned by: (i) each individual who served as the
principal executive officer and principal financial officer of
Western Capital during the year ended December 31, 2014; and (ii)
each other individual that served as an executive officer of
Western Capital at the conclusion of the year ended December 31,
2014 and who received more than $100,000 in the form of salary and
bonus during such fiscal year. For purposes of this report, these
individuals are collectively referred to as our “named
executives.”
Name
and Principal Position
|
|
|
|
|
|
|
|
|
John Quandahl(1)
|
|
2014
|
|
$
|
246,000
|
|
$
|
81,000
|
|
$
|
327,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Pres. and Chief Executive Officer
|
|
2013
|
|
$
|
246,000
|
|
$
|
77,332
|
|
$
|
323,332
|
|
|
|
|
|
|
|
|
|
|
|
|
Steve Irlbeck(2)
|
|
2014
|
|
$
|
165,000
|
|
$
|
81,000
|
|
$
|
246,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Financial Officer
|
|
2013
|
|
$
|
165,000
|
|
$
|
75,000
|
|
$
|
240,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Rich Horner(3)
|
|
2014
|
|
$
|
175,000
|
|
$
|
60,500
|
|
$
|
235,500
|
|
|
|
|
|
|
|
|
|
|
|
|
Secretary of WFL
|
|
2013
|
|
$
|
175,000
|
|
$
|
60,000
|
|
$
|
235,000
|
We had no outstanding equity awards as of December 31, 2014 for any
named executives.
Employment and
Change-In-Control Agreements
We do not currently have change-in-control agreements with any
named executives or any other current members of our executive
management. On April 11, 2013, we entered into an Amended and
Restated Employment Agreement with our Chief Executive Officer, Mr.
John Quandahl, to be effective as of April 1, 2013. The amended and
restated agreement has a term of three years and provides an annual
base salary of $246,000 and eligibility for an annual
performance-based cash bonus pool for management. The amended and
restated agreement also contains customary non-solicitation and
non-competition provisions as well as provisions for severance
payments upon termination by the Company without cause or upon
termination by Mr. Quandahl with good reason.
Compensation of
Directors
Name
and Principal Position
|
|
|
|
|
|
Other
Annual Compensation
|
|
|
Richard Miller(1)
|
|
2014
|
|
$
|
—
|
|
$
|
100,000
|
|
$
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Ellery Roberts(2)
|
|
2014
|
|
$
|
50,000
|
|
$
|
—
|
|
$
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Angel Donchev(3)
|
|
2014
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas Ripley(4)
|
|
2014
|
|
$
|
8,000
|
|
$
|
—
|
|
$
|
8,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Gay Burke(5)
|
|
2014
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Lawrence Berger(6)
|
|
2014
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
20
21
ADDITIONAL
INFORMATION
Other Matters
The Board of Directors does not intend to present to the Special
Meeting any other matter not referred to above and does not
presently know of any matters that may be presented to the Special
Meeting by others. Nevertheless, if other matters come before the
meeting, it is the intent of the persons named in the enclosed
proxy to vote the proxy in accordance with their best judgment.
Availability of
Documents
Requests for directions to the Special Meeting to vote in person or
for copies of this Proxy Statement for the Special Meeting should
be directed to Western Capital Resources, Inc., 11550
“I” Street, Suite 150, Omaha, Nebraska 68137;
Attention: Secretary. Copies of this Proxy Statement can also be
obtained by calling the Company at (402) 551-8888 or can be
accessed at the SEC filings section of the Company website at
http://www.westerncapitalresources.com/investor-relations/sec-filings/.
Householding
The SEC has adopted rules that permit companies to satisfy delivery
requirements for proxy statements with respect to two or more
shareholders sharing the same address by delivering a single proxy
statement addressed to those shareholders. This process, which is
commonly referred to as “householding,” could result in
extra convenience and cost savings for the Company and its
shareholders. If you participate in householding and unless the
Company has received contrary instructions, only one copy of this
Proxy Statement will be mailed to two or more shareholders who
share an address. If you need additional copies, do not want your
mailings to be householded or would like your mailings householded
in the future, please call (402) 551-8888 or write to us at 11550
“I” Street, Suite 150, Omaha, Nebraska 68137. Copies of
this Proxy Statement will be delivered to you promptly upon oral or
written request.
Shareholder
Proposals
Shareholders may submit proposals on matters appropriate for
shareholder action at the Company’s meetings consistent with
Rule 14a-8 under the Exchange Act. To be timely, a
shareholder’s notice with respect to a special meeting must
be delivered to or mailed and received by the Company at 11550
“I” Street, Suite 150, Omaha, Nebraska 68137 no later
than the close of business on December 24, 2015. Such proposals
must meet all of the requirements of the SEC to be eligible for
inclusion in the Company’s proxy materials. Such proposals
should be directed to Western Capital Resources, Inc., 11550
“I” Street, Suite 150, Omaha, Nebraska 68137;
Attention: Secretary.
|
|
By Order of the Board of Directors
|
|
|
|
|
|
/s/ John Quandahl
|
|
|
John Quandahl
|
|
|
Chief Executive Officer
|
22
APPENDIX A
2015 STOCK INCENTIVE PLAN
WESTERN CAPITAL RESOURCES, INC.
2015 STOCK INCENTIVE PLAN
1.
Purpose.
The purpose of the 2015 Stock Incentive Plan (the
“Plan”) of
Western Capital Resources, Inc., a Minnesota corporation (the
“Company”),
is to increase shareholder value and to advance the interests of
the Company by furnishing a variety of economic incentives
(“Incentives”)
designed to attract, retain and motivate employees, certain key
consultants and directors of the Company. Incentives may consist of
opportunities to purchase or receive shares of common stock, no par
value per share, of the Company (“Common
Stock”) or other incentive awards on terms determined
under this Plan.
2.
Administration.
The Plan shall be administered by the Board of Directors of the
Company (the “Board of
Directors”) or by a stock option or compensation
committee of the Board of Directors (the “Committee,”
which term is used throughout this Plan to refer to either the
Board of Directors or a Committee—whichever is administering
the Plan from time to time hereunder). If administered by a
committee of the Board of Directors, the Committee shall consist of
not less than two directors of the Company and shall be appointed
from time to time by the Board of Directors. During any time period
during which the Company has a class of equity securities
registered under Section 12 of the Securities Exchange Act of 1934
(including the regulations thereunder, the “1934
Act”), each member of the Committee shall be (a) a
“non-employee director” within the meaning of Rule
16b-3 of the 1934 Act (a “Non-Employee
Director”), and (b) an “outside director”
within the meaning of Section 162(m) under the Internal Revenue
Code of 1986 and the regulations promulgated thereunder
(collectively, the “Code”). The
Committee shall have complete authority to award Incentives under
the Plan, to interpret the Plan, and to make any other
determination which it believes necessary and advisable for the
proper administration of the Plan. The Committee’s decisions
and matters relating to the Plan shall be final and conclusive on
the Company and its participants. If at any time there is no stock
option or compensation committee, the term “Committee,”
as used in the Plan, shall refer to the Board of Directors as a
whole.
3.
Eligible
Participants. Officers of the Company, employees of the
Company or its subsidiaries, members of the Board of Directors, and
consultants or other independent contractors who provide services
to the Company or its subsidiaries shall be eligible to receive
Incentives under the Plan when designated by the Committee.
Participants may be designated individually or by groups or
categories (for example, by pay grade) as the Committee deems
appropriate. Participation by officers of the Company or its
subsidiaries and any performance objectives relating to such
officers must be approved by the Committee. Participation by others
and any performance objectives relating to others may be approved
by groups or categories (for example, by pay grade) and authority
to designate participants who are not officers and to set or modify
such targets may be delegated.
4.
Types of
Incentives. Incentives under the Plan may be granted in any
one or a combination of the following forms: (a) incentive stock
options and non-statutory stock options; (b) stock appreciation
rights (“SARs”); (c)
stock awards; (d) restricted stock; (e) restricted stock units; and
(f) performance shares. Subject to the specific limitations
provided in this Plan, payment of Incentives may be in the form of
cash, Common Stock or combinations thereof as the Committee shall
determine, and with such other restrictions as it may impose.
5.
Shares
Subject to the Plan.
5.1.
Number of
Shares. Subject to adjustment as provided in Section 9.6,
the number of shares of Common Stock issuable under the Plan shall
not exceed 100,000 shares of Common Stock. Shares of Common Stock
issued under the Plan or subject to outstanding Incentives will be
applied to reduce the maximum number of shares of Common Stock
remaining available for issuance under the Plan. Any shares of
Common Stock subject to SARs granted under this Plan shall be
counted in full against the above-indicated share limit, regardless
of the number of shares of Common Stock actually issued upon the
exercise of such SARs.
5.2.
Cancellation.
If any Incentive granted hereunder (including without limitation
any stock option, SAR or restricted stock unit) expires or is
terminated or canceled unexercised as to any shares of Common
Stock, such shares may again be issued under the Plan either
pursuant to stock options, SARs, restricted stock units, or
otherwise. If shares of Common Stock are issued pursuant to a stock
award, as restricted stock, or as performance shares) and
thereafter are forfeited or reacquired by the Company pursuant to
rights reserved upon issuance thereof, such forfeited and
reacquired
A-1
shares may again be issued under the Plan, either pursuant to a
stock award, as restricted stock, as performance shares, or
otherwise. The Committee may also determine to cancel, and agree to
the cancellation of, Incentives in order to make a participant
eligible for the grant of an Incentive at a lower exercise price
than the Incentive to be canceled.
5.3.
Type of
Common Stock. Common Stock issued under the Plan in
connection with Incentives may be authorized and unissued shares
or, if so designated by the Committee, may be treasury stock.
5.4.
Limitation
on Certain Grants. No person shall receive grants of stock
options and SARs under the Plan that exceed, in the aggregate,
100,000 shares of Common Stock during any one fiscal year of the
Company.
6.
Stock
Options. A stock option is a right to purchase shares of
Common Stock from the Company. Each stock option granted by the
Committee under this Plan shall be subject to the following terms
and conditions:
6.1.
Price.
The option price per share shall be determined by the Committee,
subject to adjustment under Section 9.6.
6.2.
Number.
The number of shares of Common Stock subject to a stock option
shall be determined by the Committee, subject to adjustment as
provided in Section 9.6. The number of shares of Common Stock
subject to a stock option shall be reduced in the same proportion
that the holder thereof exercises an SAR if any SAR is granted in
conjunction with or related to the stock option.
6.3.
Duration
and Time for Exercise. Subject to earlier termination as
provided in Section 9.3, the term of each stock option shall be
determined by the Committee but shall not exceed ten years and one
day from the Grant Date, as that term is defined in Section 9.15
below. Each stock option shall become exercisable at such time or
times during its term as shall be determined by the Committee at
the time of grant. The Committee may accelerate the exercisability
of any stock option. Subject to the first sentence of this
paragraph, the Committee may extend the term of any stock option to
the extent provided in Section 9.4.
6.4.
Manner of
Exercise. A stock option may be exercised, in whole or in
part, by giving written notice to the Company, specifying the
number of shares of Common Stock to be purchased and accompanied by
the full purchase price for such shares. The option price shall be
payable: (a) in United States dollars upon exercise of the option
and may be paid by cash, uncertified or certified check or bank
draft; (b) unless otherwise provided in the option agreement, by
delivery of shares of Common Stock in payment of all or any part of
the option price, which shares shall be valued for this purpose at
the Fair Market Value on the date such option is exercised; or (c)
unless otherwise provided in the option agreement, by instructing
the Company to withhold from the shares of Common Stock issuable
upon exercise of the stock option shares of Common Stock in payment
of all or any part of the exercise price and/or any related
withholding tax obligations consistent with Section 9.8, which
shares shall be valued for this purpose at the Fair Market Value or
in such other manner as may be authorized from time to time by the
Committee. Prior to the issuance of shares of Common Stock upon the
exercise of a stock option, a participant shall have no rights as a
shareholder.
6.5.
Incentive
Stock Options. Notwithstanding anything in the Plan to the
contrary, the following additional provisions shall apply to the
grant of stock options which are intended to qualify as
“Incentive Stock
Options,” as such term is defined in Code Section
422:
(a) The
aggregate Fair Market Value (determined as of the time the option
is granted) of the shares of Common Stock with respect to which
Incentive Stock Options are exercisable (i.e., vested) for the
first time by any participant during any calendar year (under all
of the Company’s plans) shall not exceed $100,000. The
determination will be made by taking Incentive Stock Options into
account in the order in which they were granted. If such excess
only applies to a portion of an Incentive Stock Option, the
Committee, in its discretion, will designate which shares will be
treated as shares to be acquired upon exercise of an Incentive
Stock Option.
(b) Any
option agreement for an Incentive Stock Option under the Plan shall
contain such other provisions as the Committee shall deem
advisable, but shall in all events be consistent with and contain
all provisions required in order to qualify the options as
Incentive Stock Options.
(c) All
Incentive Stock Options must be granted within ten years from the
earlier of the date on which this Plan was adopted by Board of
Directors or the date this Plan was approved by the
shareholders.
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(d) Unless
sooner exercised, all Incentive Stock Options shall expire no later
than ten years after the Grant Date.
(e) The
option price for Incentive Stock Options shall be not less than the
Fair Market Value of the Common Stock subject to the option on the
Grant Date.
(f)
If Incentive Stock Options
are granted to any participant who, at the time such option is
granted, would own (within the meaning of Code Section 422) stock
possessing more than 10% of the total combined voting power of all
classes of stock of the employer corporation or of its parent or
subsidiary corporation, (i) the option price for such Incentive
Stock Options shall be not less than 110% of the Fair Market Value
of the Common Stock subject to the option on the Grant Date and
(ii) such Incentive Stock Options shall expire no later than five
years after the Grant Date.
7.
Stock
Appreciation Rights. An SAR is a right to receive, without
payment to the Company, a number of shares of Common Stock, the
amount of which is determined pursuant to the formula set forth in
Section 7.5. An SAR may be granted (a) with respect to any stock
option granted under this Plan, either concurrently with the grant
of such stock option or at such later time as determined by the
Committee (as to all or any portion of the shares of Common Stock
subject to the stock option), or (b) alone, without reference to
any related stock option. Each SAR granted by the Committee under
this Plan shall be subject to the following terms and
conditions:
7.1.
Price.
The exercise price per share of any SAR granted without reference
to a stock option shall be determined by the Committee, subject to
adjustment under Section 9.6. Notwithstanding the foregoing
sentence, except as permitted under Section 9.16, the exercise
price per share shall not be less than the Fair Market Value of the
Common Stock on the Grant Date unless the SAR satisfies the
provisions of Code Section 409A.
7.2.
Number.
Each SAR granted to any participant shall relate to such number of
shares of Common Stock as shall be determined by the Committee,
subject to adjustment as provided in Section 9.6. In the case of an
SAR granted with respect to a stock option, the number of shares of
Common Stock to which the SAR relates shall be reduced in the same
proportion that the holder of the option exercises the related
stock option. Notwithstanding the foregoing, the limitation on
grants under Section 5.4 shall apply to grants of SARs under the
Plan
7.3.
Duration.
Subject to earlier termination as provided in Section 9.3, the term
of each SAR shall be determined by the Committee but shall not
exceed ten years and one day from the Grant Date. Unless otherwise
provided by the Committee, each SAR shall become exercisable at
such time or times, to such extent and upon such conditions as the
stock option, if any, to which it relates is exercisable. The
Committee may in its discretion accelerate the exercisability of
any SAR. Subject to the first sentence of this paragraph, the
Committee may extend the term of any SAR to the extent provided in
Section 9.4.
7.4.
Exercise.
An SAR may be exercised, in whole or in part, by giving written
notice to the Company, specifying the number of SARs which the
holder wishes to exercise. Upon receipt of such written notice, the
Company shall, within 90 days thereafter, deliver to the exercising
holder certificates for the shares of Common Stock or cash or both,
as determined by the Committee, to which the holder is entitled
pursuant to Section 7.5.
7.5.
Issuance
of Shares Upon Exercise. The number of shares of Common
Stock which shall be issuable upon the exercise of an SAR shall be
determined by dividing:
(a) the
number of shares of Common Stock as to which the SAR is exercised
multiplied by the amount of the appreciation in such shares (for
this purpose, the “appreciation” shall be the amount by
which the Fair Market Value of the shares of Common Stock subject
to the SAR on the exercise date exceeds (1) in the case of an SAR
related to a stock option, the purchase price of the shares of
Common Stock under the stock option or (2) in the case of an SAR
granted alone, without reference to a related stock option, an
amount which shall be determined by the Committee at the time of
grant, subject to adjustment under Section 9.6); by
(b) the Fair
Market Value of a share of Common Stock on the exercise date.
No fractional shares of Common Stock shall be issued upon the
exercise of an SAR; instead, the holder of the SAR shall be
entitled to receive a cash adjustment equal to the same fraction of
the Fair Market Value of a share of Common Stock on the exercise
date or to purchase the portion necessary to make a whole share at
its Fair Market Value on the date of exercise.
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8.
Stock
Awards and Restricted Stock. A stock award consists of the
transfer by the Company to a participant of shares of Common Stock,
without other payment therefor, as additional compensation for
services to the Company. A share of restricted stock consists of
shares of Common Stock which are sold or transferred by the Company
to a participant at a price, if any, determined by the Committee
and subject to restrictions on their sale or other transfer by the
participant. The transfer of Common Stock pursuant to stock awards
and the transfer and sale of restricted stock shall be subject to
the following terms and conditions:
8.1.
Number of
Shares. The number of shares to be transferred or sold by
the Company to a participant pursuant to a stock award or as
restricted stock shall be determined by the Committee.
8.2.
Sale
Price. The Committee shall determine the price, if any, at
which shares of restricted stock shall be sold to a participant,
which may vary from time to time and among participants and which
may be below the Fair Market Value of such shares of Common Stock
at the date of sale.
8.3.
Restrictions.
All shares of restricted stock transferred or sold by the Company
hereunder shall be subject to such restrictions as the Committee
may determine, including, without limitation any or all of the
following:
(a) a
prohibition against the sale, transfer, pledge or other encumbrance
of the shares of restricted stock, such prohibition to lapse at
such time or times as the Committee shall determine (whether in
annual or more frequent installments, at the time of the death,
disability or retirement of the holder of such shares, or
otherwise);
(b) a
requirement that the holder of shares of restricted stock forfeit,
or (in the case of shares sold to a participant) re-sell back to
the Company at his or her cost, all or a part of such shares in the
event of termination of his or her employment or consulting
engagement during any period in which such shares are subject to
restrictions; and/or
(c) such other conditions or restrictions as the Committee may deem
advisable.
8.4.
Restrictions.
In order to enforce the restrictions imposed by the Committee
pursuant to Section 8.3, the participant receiving restricted stock
shall enter into an agreement with the Company setting forth the
conditions of the grant. Shares of restricted stock shall be
registered in the name of the participant and deposited, together
with a stock power endorsed in blank, with the Company. Each such
certificate shall bear a legend that refers to the Plan and the
restrictions imposed under the applicable agreement. The Committee
may provide that no certificates representing restricted stock be
issued until the restriction period is completed.
8.5.
End of
Restrictions. Subject to Section 9.5, at the end of any time
period during which the shares of restricted stock are subject to
forfeiture and restrictions on transfer, such shares will be
delivered free of all restrictions to the participant or to the
participant’s legal representative, beneficiary or heir.
8.6.
Rights of
Holders of Restricted Stock. Subject to the terms and
conditions of the Plan and subject further to the terms and
conditions of each written agreement evidencing an Incentive, each
participant receiving restricted stock shall have all the rights of
a shareholder with respect to shares of stock during any period in
which such shares are subject to forfeiture and restrictions on
transfer, including without limitation, the right to vote such
shares.
9.
General
Provisions.
9.1.
Effective
Date. The Plan will become effective upon the date of
approval by the Board of Directors (the “Effective
Date”).
9.2.
Duration.
The Plan shall remain in effect until all Incentives granted under
the Plan have either been satisfied by the issuance of shares of
Common Stock or the payment of cash or been terminated under the
terms of the Plan and all restrictions imposed on shares of Common
Stock in connection with their issuance under the Plan have lapsed.
No Incentives may be granted under the Plan after the tenth
anniversary of the Effective Date of the Plan.
9.3.
Non-Transferability
of Incentives. No stock option, SAR, restricted stock or
stock award may be transferred, pledged or assigned by the holder
thereof (except, in the event of the holder’s death, by will
or the laws of descent and distribution to the limited extent
provided in the Plan or the Incentive, or pursuant to a qualified
domestic relations order as
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defined by the Code or Title I of the Employee Retirement Income
Security Act, or the rules thereunder), and the Company shall not
be required to recognize any attempted assignment of such rights by
any participant. Notwithstanding the preceding sentence, stock
options may be transferred by the holder thereof to the
holder’s spouse, children, grandchildren or parents
(collectively, the “Family
Members”), to trusts for the benefit of Family
Members, to partnerships or limited liability companies in which
Family Members are the only partners or shareholders, or to
entities exempt from federal income taxation pursuant to Code
Section 501(c)(3). During a participant’s lifetime, a stock
option may be exercised only by him or her, by his or her guardian
or legal representative or by the transferees permitted by this
Section 9.3.
9.4.
Effect of
Termination or Death. If a participant ceases to be an
employee of or consultant to the Company for any reason, including
death or disability, any Incentives may be exercised or shall
expire at such times as may be set forth in the agreement, if any,
applicable to the Incentive, or otherwise as determined by the
Committee; provided, however, the term of an Incentive may not be
extended beyond the term originally prescribed when the Incentive
was granted, unless the Incentive satisfies (or is amended to
satisfy) the requirements of Code Section 409A; and provided
further that the term of an Incentive may not be extended beyond
the maximum term permitted under this Plan.
9.5.
Restrictions
under Securities Laws. Notwithstanding anything in this Plan
to the contrary: (a) the Company may, if it shall determine it
necessary or desirable for any reason, at the time of award of any
Incentive or the issuance of any shares of Common Stock pursuant to
any Incentive, require the recipient of the Incentive, as a
condition to the receipt thereof or to the receipt of shares of
Common Stock issued pursuant thereto, to deliver to the Company a
written representation of present intention to acquire the
Incentive or the shares of Common Stock issued pursuant thereto for
his or her own account for investment and not for distribution; and
(b) if at any time the Company further determines, in its sole
discretion, that the listing, registration or qualification (or any
updating of any such document) of any Incentive or the shares of
Common Stock issuable pursuant thereto is necessary on any
securities exchange or under any federal or state securities or
blue sky law, or that the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in
connection with the award of any Incentive, the issuance of shares
of Common Stock pursuant thereto, or the removal of any
restrictions imposed on such shares, such Incentive shall not be
awarded or such shares of Common Stock shall not be issued or such
restrictions shall not be removed, as the case may be, in whole or
in part, unless such listing, registration, qualification, consent
or approval shall have been effected or obtained free of any
conditions not acceptable to the Company.
9.6.
Adjustment.
In the event of any recapitalization, stock dividend, stock split,
combination of shares or other change in the Common Stock, the
number of shares of Common Stock then subject to the Plan,
including shares subject to outstanding Incentives, and the other
numbers of shares of Common Stock provided in the Plan, shall be
adjusted in proportion to the change in outstanding shares of
Common Stock. In the event of any such adjustments, the purchase
price of any option, the performance objectives of any Incentive,
and the shares of Common Stock issuable pursuant to any Incentive
shall be adjusted as and to the extent appropriate, in the
discretion of the Committee, to provide participants with the same
relative rights before and after such adjustment.
9.7.
Incentive
Plans and Agreements. Except in the case of stock awards,
the terms of each Incentive shall be stated in a plan or agreement
approved by the Committee. The Committee may also determine to
enter into agreements with holders of options to reclassify or
convert certain outstanding options, within the terms of the Plan,
as Incentive Stock Options or as non-statutory stock options and in
order to eliminate SARs with respect to all or part of such options
and any other previously issued options. The Committee shall
communicate the key terms of each award to the participant promptly
after the Committee approves the grant of such award.
9.8.
Withholding.
(a) The
Company shall have the right to withhold from any payments made
under the Plan or to collect as a condition of payment, any taxes
required by law to be withheld. At any time when a participant is
required to pay to the Company an amount required to be withheld
under applicable income tax laws in connection with a distribution
of Common Stock or upon exercise of an option or SAR or upon
vesting of restricted stock, the participant may satisfy this
obligation in whole or in part by electing (the “Election”)
to have the Company withhold, from the distribution or from such
shares of restricted stock, shares of Common Stock having a value
up to the minimum amount of withholding taxes required to be
collected on the transaction. The value of the shares to be
withheld shall be based on the Fair Market Value of the Common
Stock on the date that the amount of tax to be withheld shall be
determined (“Tax
Date”).
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(b) Each
Election must be made before the Tax Date. The Committee may
disapprove of any Election, may suspend or terminate the right to
make Elections, or may provide with respect to any Incentive that
the right to make Elections shall not apply to such Incentive. An
Election is irrevocable.
9.9.
No
Continued Employment, Engagement or Right to Corporate
Assets. No participant under the Plan shall have any right,
because of his or her participation, to continue in the employ of
the Company or any of its subsidiaries for any period of time or to
any right to continue his or her present or any other rate of
compensation. Nothing contained in the Plan shall be construed as
giving an employee, a consultant, such persons’ beneficiaries
or any other person any equity or interests of any kind in the
assets of the Company or creating a trust of any kind or a
fiduciary relationship of any kind between the Company and any such
person.
9.10. Payments
Under Incentives. Payment of cash or distribution of any
shares of Common Stock to which a participant is entitled under any
Incentive shall be made as provided in the Incentive. Except as
permitted under Section 9.16, payments and distributions may not be
deferred under any Incentive unless the deferral complies with the
requirements of Code Section 409A.
9.11. Amendment
of the Plan. The Board of Directors may amend or discontinue
the Plan at any time. Nevertheless, no such amendment or
discontinuance shall adversely change or impair, without the
consent of the recipient, an Incentive previously granted. Further,
no such amendment shall, without approval of the shareholders of
the Company, (a) increase the maximum number of shares of Common
Stock which may be issued to all participants under the Plan, (b)
change or expand the types of Incentives that may be granted under
the Plan, (c) change the class of persons eligible to receive
Incentives under the Plan, or (d) materially increase the benefits
accruing to participants under the Plan.
9.12. Amendment
of Agreements for Incentives. Except as otherwise provided
in this Section 9.12, the terms of an existing Incentive may be
amended by agreement between the Committee and the participant.
Notwithstanding the foregoing sentence, in the case of a stock
option or SAR, except as permitted under Section 9.16, no such
amendment shall: (a) extend the term of the Incentive, except as
provided in Section 9.4; nor (b) reduce the exercise price per
share below the Fair Market Value of the Common Stock on the date
the Incentive was granted, unless, in either case, the amendment
complies with the requirements of Code Section 409A.
9.13. Sale,
Merger, Exchange or Liquidation. Unless otherwise provided
in the agreement for an Incentive, in the event of (i) an
acquisition of the Company through the sale of all or substantially
all of the Company’s assets or (ii) a change in control of at
least a majority of the issued and outstanding voting securities of
the Company through a merger, exchange, reorganization or
liquidation of the Company or a similar event, all as determined by
the Committee in its sole discretion (collectively, any of the
transactions described in clauses (i) and (ii) are referred to as a
“Sale
Transaction”), the Committee shall be authorized, in
its sole discretion, to take any and all action it deems equitable
under the circumstances, including but not limited to any one or
more of the following:
(a) the
Committee may provide that the Plan and all Incentives shall
terminate and the holders of (i) all outstanding vested options
shall receive, in lieu of any shares of Common Stock they would be
entitled to receive under such options, such stock, securities or
assets, including cash, as would have been paid to such
participants if their options had been exercised and such
participant had received Common Stock immediately before such Sale
Transaction (with appropriate adjustment for the exercise price, if
any), (ii) SARs that entitle the participant to receive Common
Stock shall receive, in lieu of any shares of Common Stock each
participant was entitled to receive as of the date of the Sale
Transaction pursuant to the terms of such Incentive, if any, such
stock, securities or assets, including cash, as would have been
paid to such participant if such Common Stock had been issued to
and held by the participant immediately before such Sale
Transaction, and (iii) any Incentive under this Agreement which
does not entitle the participant to receive Common Stock shall be
equitably treated as determined by the Committee;
(b) the
Committee may provide that participants holding outstanding vested
Common Stock-based Incentives shall receive, with respect to each
share of Common Stock issuable pursuant to such Incentives as of
the effective date of any such Sale Transaction, at the
determination of the Committee, cash, securities or other property,
or any combination thereof, in an amount equal to the excess, if
any, of the Fair Market Value of such Common Stock (determined as
of any date within ten days before the effective date of such Sale
Transaction, which date shall be selected by the Committee) over
the option price or other amount owed by a participant, if any, and
that such Incentives shall be cancelled, including the cancellation
without consideration of all options that have an exercise price
below the per-share value of the consideration received by the
Company in the Sale Transaction; or
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(c) the
Committee may provide that the Plan (or replacement plan) shall
continue with respect to Incentives not cancelled or terminated as
of the effective date of such Sale Transaction and provide to
participants holding such Incentives the right to earn their
respective Incentives on the same or a substantially equivalent
basis (taking into account the Sale Transaction and the number of
shares or other equity issued by such successor entity) with
respect to the equity of the entity succeeding the Company by
reason of such Sale Transaction.
The Board of Directors may restrict the rights of participants or
the applicability of this Section 9.13 to the extent necessary to
comply with Section 16(b) of the 1934 Act, the Code or any other
applicable law or regulation. The grant of an Incentive award
pursuant to the Plan shall not limit in any way the right or power
of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or
to merge, exchange or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.
9.14. Definition
of Fair Market Value. For purposes of this Plan, the
“Fair Market
Value” of a share of Common Stock at a specified date
shall, unless otherwise expressly provided in this Plan, be the
amount which the Committee determines in good faith to be 100% of
the fair market value of such a share as of the date in question.
Notwithstanding the foregoing:
(a) If such
shares are listed on a U.S. securities exchange, then Fair Market
Value shall be determined by reference to the last sale price of a
share of Common Stock on such U.S. securities exchange on the
applicable date. If such U.S. securities exchange is closed for
trading on such date, or if the Common Stock does not trade on such
date, then the last sale price used shall be the one on the date
the Common Stock last traded on such U.S. securities exchange.
(b) If such
shares are publicly traded but are not listed on a U.S. securities
exchange, then Fair Market Value shall be determined by reference
to the trading price of a share of Common Stock on such date (or,
if the applicable market is closed on such date, the last date on
which the Common Stock was publicly traded), by a method
consistently applied by the Committee.
(c) If such
shares are not publicly traded, then the Committee’s
determination will be based upon a good faith valuation of the
Company’s Common Stock as of such date, which shall be based
upon such factors as the Committee deems appropriate. The valuation
shall be accomplished in a manner that complies with Code Section
409A and shall be consistently applied to Incentives under the
Plan.
9.15. Definition
of Grant Date. For purposes of this Plan, the
“Grant Date”
of an Incentive shall be the date on which the Committee approved
the award (or, if applicable, the date on which the Committee
otherwise approved as the Grant Date for the award) or, if later,
the date on which (a) the participant is no longer able to
negotiate the terms of the award and (b) it is expected that the
key terms of the award will be communicated within a relatively
short period of time.
9.16. Compliance
with Code Section 409A. The Plan and the agreement for each
Incentive shall be interpreted and administered so as to be exempt
from the requirements of Code Section 409A or to comply with such
requirements. Notwithstanding the foregoing, Incentives may be
awarded or amended in a manner that does not comply with Code
Section 409A, but only if and to the extent that the Committee
specifically provides in written resolutions that the Incentive or
amendment is not intended to comply with Code Section 409A.
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APPENDIX B
PLAN OF CONVERSION
FORM OF PLAN OF
CONVERSION
OF
WESTERN
CAPITAL RESOURCES, INC., a Minnesota
corporation
TO
WESTERN
CAPITAL RESOURCES, INC., a Delaware
corporation
This PLAN OF CONVERSION, dated as of [•], 2015 (this
“Plan”),
is hereby adopted by Western Capital Resources, Inc., a Minnesota
corporation (the “Company”),
in order to set forth the terms, conditions and procedures
governing the conversion of the Company from a Minnesota
corporation to a Delaware corporation pursuant to Section 265 of
the General Corporation Law of the State of Delaware, as amended
(the “DGCL”),
and Sections 302A.682-692 of the Minnesota Business Corporation
Act, as amended (the “MBCA”).
RECITALS
WHEREAS, the
Company is a corporation established and existing under the laws of
the State of Minnesota;
WHEREAS,
conversion of a Minnesota corporation into a Delaware corporation
is permitted under Section 265 of the DGCL and Section 302A.682 of
the MBCA;
WHEREAS, the
Board of Directors of the Company has determined that it would be
advisable and in the best interests of the Company and its
shareholders for the Company to convert from a Minnesota
corporation to a Delaware corporation pursuant to Section 265 of
the DGCL and Sections 302A. 682-692 of the MBCA; and
WHEREAS, the
Board of Directors has authorized, approved and adopted the form,
terms and provisions of this Plan and submitted this Plan to the
Company’s shareholders for approval, and the Company’s
shareholders have approved this Plan.
NOW, THEREFORE,
the Company hereby adopts this Plan as follows:
1.
Conversion;
Effect of Conversion.
(a) At the
Effective Time (as defined in Section 3 below), the Company shall
be converted from a Minnesota corporation to a Delaware corporation
pursuant to Section 265 of the DGCL and Section 302A.691 of the
MCBA (the “Conversion”)
and the Company, as converted to a Delaware corporation (the
“Converted
Company”), shall thereafter be subject to all of the
provisions of the DGCL, except that notwithstanding Section 106 of
the DGCL, the existence of the Converted Company shall be deemed to
have commenced on the date the Company commenced its existence in
the State of Minnesota.
(b) At the
Effective Time, by virtue of the Conversion and without any further
action on the part of the Company or its shareholders, the
Converted Company shall, for all purposes of the laws of the State
of Delaware and the State of Minnesota, be deemed to be the same
entity as the Company. At the Effective Time, by virtue of the
Conversion and without any further action on the part of the
Company or its shareholders, for all purposes of the laws of the
State of Delaware, all of the rights, privileges and powers of the
Company, and all property, real, personal and mixed, and all debts
due to the Company, as well as all other things and causes of
action belonging to the Company, shall remain vested in the
Converted Company and shall be the property of the Converted
Company and the title to any real property vested by deed or
otherwise in the Company shall not revert or be in any way impaired
by reason of the Conversion; but all rights of creditors and all
liens upon any property of the Company shall be preserved
unimpaired, and all debts, liabilities and duties of the Company
shall remain attached to the Converted Company at the Effective
Time, and may be enforced against the Converted Company to the same
extent as if said debts, liabilities and duties had originally been
incurred or contracted by the Converted Company in its capacity as
a corporation of the State of Delaware. The rights, privileges,
powers and interests in property of the Company, as well as the
debts, liabilities and duties of the Company, shall not be deemed,
as a consequence of the Conversion, to have been transferred to the
Converted Company at the Effective Time for any purpose of the laws
of the State of Delaware.
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(c) The
Company shall not be required to wind up its affairs or pay its
liabilities and distribute its assets, and the Conversion shall not
be deemed a dissolution of the Company and shall constitute a
continuation of the existence of the Company in the form of a
Delaware corporation. The Converted Company is the same entity as
the Company. The Conversion shall not be deemed to affect any
obligations or liabilities of the Company incurred prior to the
Conversion or the personal liability of any person incurred prior
to the Conversion.
(d) At the
Effective Time, the name of the Converted Company shall be: Western
Capital Resources, Inc.
(e) The
Company intends for the Conversion to constitute a reorganization
within the meaning of Section 368(a)(1)(F) of the Internal Revenue
Code of 1986, as amended, and for this Plan to constitute a
“plan of reorganization” within the meaning of Treasury
Regulation Section 1.368-2(g).
2.
Filings.
As promptly as practicable following the date hereof, the Company
shall cause the Conversion to be effective by:
(a) executing
and filing (or causing to be executed and filed) Articles of
Conversion pursuant to Section 302A.686 of the MBCA in a form
reasonably acceptable to any officer of the Company (the
“Minnesota
Articles of Conversion”) with the Minnesota Secretary
of State;
(b) executing
and filing (or causing to be executed and filed) a Certificate of
Conversion pursuant to Sections 103 and 265 of the DGCL in a form
reasonably acceptable to any officer of the Company (the
“Delaware
Certificate of Conversion”) with the Delaware
Secretary of State; and
(c)
executing, acknowledging and filing (or causing to be executed,
acknowledged and filed) a Certificate of Incorporation of Western
Capital Resources, Inc. substantially in the form set forth on
Exhibit
A hereto (the “Delaware
Certificate of Incorporation”) with the Delaware
Secretary of State.
3.
Effective
Time. The Conversion shall become effective upon the filing
and effectiveness of the Minnesota Articles of Conversion, the
Delaware Certificate of Conversion and the Delaware Certificate of
Incorporation with the applicable secretary of state (the time of
the effectiveness of the Conversion, the “Effective
Time”).
4.
Effect of
Conversion on Common Stock. Upon the terms and subject to
the conditions of this Plan, at the Effective Time, by virtue of
the Conversion and without any further action on the part of the
Company or its shareholders, each share of issued Common Stock, no
par value per share, of the Company (“Company
Common Stock”) shall convert into one validly issued,
fully paid and nonassessable share of Common Stock, no par value
per share, of the Converted Company (“Converted
Company Common Stock”). Following the Effective Time,
all Company Common Stock shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and
each holder of Company Common Stock immediately prior to the
Effective Time shall cease to have any rights with respect
thereto.
5.
Effect of
Conversion on Outstanding Stock Options. Upon the terms and
subject to the conditions of this Plan, at the Effective Time, by
virtue of the Conversion and without any further action on the part
of the Company or its shareholders, each option to acquire shares
of Company Common Stock outstanding immediately prior to the
Effective Time shall convert into an equivalent option to acquire,
upon the same terms and conditions (including the exercise price
per share applicable to each such option) as were in effect
immediately prior to the Effective Time, the same number of shares
of Converted Company Common Stock.
6.
Effect of
Conversion on Outstanding Warrants or Other Rights. Upon the
terms and subject to the conditions of this Plan, at the Effective
Time, by virtue of the Conversion and without any further action on
the part of the Company or its shareholders, each warrant or other
right to acquire shares of Company Common Stock, including any
rights pursuant to employee stock purchase plans, outstanding
immediately prior to the Effective Time shall convert into an
equivalent warrant or other right to acquire, upon the same terms
and conditions (including the exercise price per share applicable
to each such warrant or other right) as were in effect immediately
prior to the Effective Time, the same number of shares of Converted
Company Common Stock.
7.
Effect of
Conversion on Outstanding Performance Shares, Restricted Stock
Units or Stock Appreciation Rights. Upon the terms and
subject to the conditions of this Plan, at the Effective Time, by
virtue of the Conversion and without any further action on the part
of the Company or its shareholders, each performance share,
restricted stock unit or stock appreciation
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right to acquire shares of Company Common Stock outstanding
immediately prior to the Effective Time shall convert into an
equivalent performance share, restricted stock unit or stock
appreciation right to acquire, upon the same terms and conditions
(including the exercise price per share applicable to each such
stock appreciation right) as were in effect immediately prior to
the Effective Time, the same number of shares of Converted Company
Common Stock.
8.
Effect of
Conversion on Stock Certificates. Upon the terms and subject
to the conditions of this Plan, at the Effective Time, all of the
outstanding certificates that immediately prior to the Effective
Time represented shares of Company Common Stock immediately prior
to the Effective Time shall be deemed for all purposes to continue
to evidence ownership of and to represent the same number of shares
of Converted Company Common Stock into which the shares represented
by such certificates have been converted as provided herein. The
registered owner on the books and records of the Converted Company
or its transfer agent of any such outstanding stock certificate
shall, until such certificate shall have been surrendered for
transfer or conversion or otherwise accounted for to the Converted
Company or its transfer agent, have and be entitled to exercise any
voting and other rights with respect to and to receive any dividend
and other distributions upon the shares of the Converted evidenced
by such outstanding certificate as provided above.
9.
Effect of
Conversion on Employee Benefit, Incentive Compensation or Other
Similar Plans. Upon the terms and subject to the conditions
of this Plan, at the Effective Time, by virtue of the Conversion
and without any further action on the part of the Company or its
shareholders, each employee benefit plan, incentive compensation
plan or other similar plan to which the Company is a party shall
continue to be a plan of the Converted Company. To the extent that
any such plan provides for the issuance of Company Common Stock, at
the Effective Time, such plan shall be deemed to provide for the
issuance of Converted Company Common Stock. A number of shares of
Converted Company Common Stock shall be reserved for issuance under
such plan or plans equal to the number of shares of Company Common
Stock so reserved immediately prior to the effective date of the
Conversion.
10.
Filings,
Licenses, Permits, Titled Property, Etc. As necessary,
following the Effective Time, the Converted Company shall apply for
new qualifications to conduct business (including as a foreign
corporation), licenses, permits and similar authorizations on its
behalf and in its own name in connection with the Conversion and to
reflect the fact that it is a corporation duly formed and validly
existing under the laws of the State of Delaware. As required or
appropriate, following the Effective Time, all real, personal or
intangible property of the Company which was titled or registered
in the name of the Company shall be re-titled or re-registered, as
applicable, in the name of the Converted by appropriate filings or
notices to the appropriate party (including, without limitation,
any applicable governmental agencies).
11.
Further
Assurances. If, at any time after the Effective Time, the
Converted Company shall determine or be advised that any deeds,
bills of sale, assignments, agreements, documents or assurances or
any other acts or things are necessary, desirable or proper,
consistent with the terms of this Plan, (a) to vest, perfect or
confirm, of record or otherwise, in the Converted Company its
right, title or interest in, to or under any of the rights,
privileges, immunities, powers, purposes, franchises, properties or
assets of the Company, or (b) to otherwise carry out the purposes
of this Plan, the Converted Company, its officers and directors and
the designees of its officers and directors, are hereby authorized
to solicit in the name of the Converted Company any third-party
consents or other documents required to be delivered by any
third-party, to execute and deliver, in the name and on behalf of
the Converted Company all such deeds, bills of sale, assignments,
agreements, documents and assurances and do, in the name and on
behalf of the Converted Company, all such other acts and things
necessary, desirable or proper to vest, perfect or confirm its
right, title or interest in, to or under any of the rights,
privileges, immunities, powers, purposes, franchises, properties or
assets of the Company and otherwise to carry out the purposes of
this Plan.
12.
Effect of
Conversion on Directors and Officers. The members of the
board of directors and the officers of the Company immediately
prior to the Effective Time shall continue in office following the
Effective Time as the directors and officers of the Converted
Company, respectively, until the expiration of their respective
terms of office and until their successors have been duly elected
and have qualified, or until their earlier death, resignation or
removal. After the Effective Time, the Converted Company and its
board of directors shall take any necessary actions to cause each
of such individuals to be appointed or to confirm such
appointments.
13.
Delaware
Bylaws. To the fullest extent permitted by law, at the
Effective Time, the bylaws of the Converted Company shall be
substantially in the form set forth on Exhibit
B hereto (the “Delaware
Bylaws”), and the Board of Directors of the Converted
Company shall approve and ratify the Delaware Bylaws as promptly as
practicable following the Effective Time.
14.
Implementation
and Interpretation; Termination and Amendment. This Plan
shall be implemented and interpreted, prior to the Effective Time,
by the Board of Directors of the Company and, upon the Effective
Time, by the Board of Directors
B-3
of the Converted Company, (a) each of which shall have full power
and authority to delegate and assign any matters covered hereunder
to any other party(ies), including, without limitation, any
officers of the Company or the Converted Company, as the case may
be, and (b) the interpretations and decisions of which shall be
final, binding, and conclusive on all parties.
15.
Amendment.
This Plan may be amended or modified by the Board of Directors of
the Company at any time prior to the Effective Time, provided that
such an amendment shall not alter or change (a) the amount or kind
of shares or other securities to be received hereunder by the
shareholders of the Company, (b) any term of the Delaware
Certificate of Incorporation or the Delaware Bylaws, other than
changes permitted to be made without shareholder approval by the
DGCL, or (c) any of the terms and conditions of this Plan if such
alteration or change would adversely affect the shareholders of the
Company.
16.
Termination
or Deferral. At any time prior to the Effective Time, this
Plan may be terminated and the Conversion may be abandoned,
notwithstanding the approval of this Plan by the shareholders of
the Company, by action of the Board of Directors of the Company (i)
if shareholders holding 0.25% or more of the Company’s
outstanding shares properly exercise their right to dissent with
respect to such shares or (ii) for reason if, in the opinion of the
Board of Directors of the Company, such action would be in the best
interests of the Company and its shareholders. In the event of
termination of this Plan, this Plan shall become void and of no
effect and there shall be no liability on the part of the Company,
its Board of Directors or shareholders with respect thereto. In
addition, at any time prior to the Effective Time, the consummation
of the Conversion may be deferred for a reasonable period of time
if, in the opinion of the Board of Directors of the Company, such
action would be in the best interests of the Company and its
shareholders.
17.
Third
Party Beneficiaries. This Plan shall not confer any rights
or remedies upon any person other than as expressly provided
herein.
18.
Severability.
Whenever possible, each provision of this Plan will be interpreted
in such manner as to be effective and valid under applicable law,
but if any provision of this Plan is held to be prohibited by or
invalid under applicable law, such provision will be ineffective
only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Plan.
19.
Governing
Law. This Plan shall be construed in accordance with and
governed by the law of the State of Delaware, without regard to the
conflict of laws provisions thereof.
B-4
EXHIBIT A
DELAWARE CERTIFICATE OF INCORPORATION
CERTIFICATE OF
INCORPORATION
of
WESTERN CAPITAL RESOURCES, INC.
1.
Name.
The name of the corporation (the “Corporation”) is:
Western Capital Resources, Inc.
2.
Address;
Registered Office and Agent. The address of the
Corporation’s registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, Wilmington, DE 19801;
and the name of its registered agent at such address is The
Corporation Trust Company. The Corporation may from time to time,
in the manner provided by law, change the registered agent and the
registered office within the State of Delaware. The Corporation may
also maintain one or more offices for the conduct of its business
either within or without the State of Delaware.
3.
Purposes.
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 amended (the
“General Corporation Law”).
4.
Number of
Shares. The aggregate number of shares which this
corporation shall have the authority to issue is 12,500,000 shares,
having no par value.
The Board of Directors of the Corporation (“Board”) is
authorized from time to time to establish by resolution or
resolutions different classes or series of shares and in connection
with the creation of any such classes or series, by resolution or
resolutions, to provide for the issuance of shares thereof and, by
filing such resolutions in a certificate of designation pursuant to
the General Corporation Law, to determine and fix the number of
shares to be included in such classes or series and such voting
powers, full or limited, or no voting powers, and such
designations, preferences and relative participating, optional or
other special rights, and qualifications, limitations or
restrictions thereof, including without limitation thereof,
dividend rights, conversion rights, redemption privileges and
liquidation preferences, as shall be stated and expressed in such
resolutions, all to the full extent now or hereafter permitted by
the General Corporation Law.
5.
Name and
Mailing Address of Incorporator. The name and mailing
address of the incorporator are: Paul Chestovich, 3300 Wells Fargo
Center, 90 South Seventh Street, Minneapolis, Minnesota 55402.
6.
Election
of Directors. Unless and except to the extent that the
bylaws of the Corporation shall so require, the election of
directors of the Corporation need not be by written ballot.
7.
Limitation
of Liability. To the fullest extent permitted under the
General Corporation Law, as amended from time to time, no director
of the Corporation shall be personally liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty
as a director. Any amendment, repeal or modification of the
foregoing provision 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,
repeal or modification.
8.
Indemnification.
(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, any person (a
“Covered Person”) who was or is made or is threatened
to be made a party or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or
investigative (a “Proceeding”), by reason of the fact
that he or she, or a person for whom he or she is the legal
representative, is or was a director or officer of the Corporation
or, while a director or officer of the Corporation, is or was
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint
venture, trust, enterprise or nonprofit entity (an “Other
Entity”), including service with respect to employee-benefit
plans, against all liability and loss suffered and expenses
(including attorneys’ fees) reasonably incurred by such
Covered Person. Notwithstanding the preceding sentence, except as
otherwise provided in Section 8(c) below, the Corporation shall be
required to indemnify a Covered Person in connection with a
Proceeding (or part thereof) commenced by such Covered Person only
if the commencement of such Proceeding (or part thereof) by the
Covered Person was authorized by the Board.
(b)
Prepayment of
Expenses. The Corporation shall pay the expenses
(including attorneys’ fees) reasonably incurred by a Covered
Person in defending any Proceeding in advance of its final
disposition, provided, however, that, to the
B-5
extent required by applicable law, such payment of expenses in
advance of the final disposition of the Proceeding shall be made
only upon receipt of an undertaking by the Covered Person to repay
all amounts advanced if it should be ultimately determined that the
Covered Person is not entitled to be indemnified under this Article
8 or otherwise.
(c)
Claims. If
a claim for indemnification or advancement of expenses under this
Article 8 is not paid in full within 30 days after a written claim
therefor by the Covered Person has been received by the
Corporation, then the Covered Person may 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. In any such action, the Corporation shall have the burden of
proving that the Covered Person is not entitled to the requested
indemnification or advancement of expenses under applicable
law.
(d)
Nonexclusivity of
Rights. The rights conferred on any Covered Person by
this Article 8 shall not be exclusive of any other rights that such
Covered Person may have or hereafter acquire under any statute,
provision of this Certificate of Incorporation, the bylaws of the
Corporation, agreement, vote of stockholders or disinterested
directors, or otherwise.
(e)
Other
Sources. The Corporation’s obligation, if any, 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 an Other Entity shall be reduced by any amount such Covered
Person may collect as indemnification or advancement of expenses
from such Other Entity.
(f)
Amendment or
Repeal. Any repeal or modification of the foregoing
provisions of this Article 8 shall not adversely affect any right
or protection hereunder of any Covered Person in respect of any act
or omission occurring prior to the time of such repeal or
modification.
(g)
Other Indemnification
and Prepayment of Expenses. This Article 8 shall not
limit the right of the Corporation, to the extent and in the manner
permitted by applicable law, to indemnify and to advance expenses
to persons other than Covered Persons when and as authorized by
appropriate corporate action.
9.
Adoption,
Amendment and/or Repeal of Bylaws. In furtherance and not in
limitation of the powers conferred by the General Corporation Law,
the Board is expressly authorized to make, alter and repeal the
bylaws of the Corporation.
10.
Powers of
Incorporator. The powers of the incorporator will terminate,
without any further action required on the part of such
incorporator or the Corporation, immediately upon the election of
initial directors of the Corporation by such incorporator.
11.
Certificate
Amendments. The Corporation reserves the right at any time,
and from time to time, to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, and other
provisions authorized by the laws of the State of Delaware may be
added or inserted into this Certificate of Incorporation, in the
manner now or hereafter prescribed by applicable law; and
whatsoever rights, preferences and privileges of any nature
conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to this Certificate of Incorporation,
either in its present form or as hereafter amended, are granted
subject to the rights reserved in this Section.
|
|
/s/ Paul D. Chestovich
|
|
|
Paul D. Chestovich
|
|
|
Incorporator
|
B-6
EXHIBIT B
DELAWARE BYLAWS
BYLAWS
of
WESTERN CAPITAL RESOURCES, INC.
A Delaware
Corporation
(Effective as of [•])
___________________________
Article 1
Certain Definitions
As used in these Bylaws, unless the context otherwise requires, the
term:
a.
“Assistant Secretary” means an Assistant Secretary of
the Corporation.
b.
“Assistant Treasurer” means an Assistant Treasurer of
the Corporation.
c.
“Board” means the Board of Directors of the
Corporation.
d.
“Bylaws” means these Bylaws of the Corporation, as the
same may be amended from time to time.
e.
“Certificate of Incorporation” means the Certificate of
Incorporation of the Corporation, as the same may be amended,
supplemented or restated from time to time.
f.
“Chief Executive Officer” means Chief Executive Officer
of the Corporation.
g.
“Chairman” means the Chairman of the Board of Directors
of the Corporation.
h.
“Corporation” means Western Capital Resources, Inc.
i.
“Directors” means directors of the Corporation.
j.
“Entire Board” means all then-authorized directors of
the Corporation.
k.
“General Corporation Law” means Title 8, Chapter 1, of
the Delaware Statutes (otherwise known as the General Corporation
Law of the State of Delaware), as amended from time to time,
together with any corresponding provisions of succeeding law.
l.
“Office of the Corporation” means the principal
executive office of the Corporation, anything in Section 131 of the
General Corporation Law to the contrary notwithstanding.
m.
“President” means the President of the Corporation.
n.
“Secretary” means the Secretary of the Corporation.
o.
“Stockholders” means stockholders of record of the
Corporation.
p.
“Treasurer” means the Treasurer of the Corporation.
q.
“Vice President” means a Vice President of the
Corporation.
Article 2
Stockholders
2.1
Place of
Meetings. Every meeting of Stockholders may be held at such
place, within or without the State of Delaware, as may be
designated by resolution of the Board from time to time or stated
in the notice of the meeting or duly
B-7
executed waivers thereof. The Board may, in its sole discretion,
determine that the meeting shall not be held at any place, but may
instead be held by means of remote communication as authorized by
Section 211 of the General Corporation Law.
2.2
Annual
Meeting. If required by applicable law, a meeting of
Stockholders shall be held annually for the election of Directors
at such date and time as may be designated by resolution of the
Board from time to time. Any other business may be transacted at
the annual meeting.
2.3
Special
Meetings. Unless otherwise prescribed by applicable law,
special meetings of Stockholders may be called at any time by the
Entire Board, any two or more Directors, or the Chief Executive
Officer, and, in addition, shall be called by the Chairman of the
Board, the Chief Executive Officer or the Secretary at the request
in writing of Stockholders owning not less than ten percent (10%)
of the entire capital stock of the Corporation issued and
outstanding and entitled to vote. Such request shall state the
purposes of the proposed meeting. The officers or Directors shall
fix the time and any place, either within or without the State of
Delaware, as the place for holding such meeting. Business
transacted at any special meeting of Stockholders shall be limited
to the purpose stated in the related notice.
2.4
Fixing
Record Date. The Board may fix a record date for the purpose
of (a) determining the Stockholders entitled (i) to notice of or to
vote at any meeting of Stockholders or any adjournment thereof,
(ii) unless otherwise provided in the Certificate of Incorporation,
to express consent to corporate action in writing without a meeting
or (iii) to receive payment of any dividend or other distribution
or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock; or (b) any
other lawful action. Any such record date shall not precede the
date upon which the resolution fixing the record date was adopted
by the Board and, unless otherwise required by applicable law,
shall not be (x) in the case of clause (a)(i) above, more than 60
nor less than 10 days before the date of such meeting (unless
applicable law permits such a record date to be less than 10 days
before the date of such meeting, in which case the Board may fix a
record date in accordance with applicable law), (y) in the case of
clause (a)(ii) above, more than 10 days after the date upon which
the resolution fixing the record date was adopted by the Board and
(z) in the case of clause (a)(iii) or (b) above, more than 60 days
prior to such action. If no such record date is fixed, then:
2.4.1 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 immediately prior to the day on which notice is given, or, if
notice is waived, at the close of business on the day immediately
prior to the day on which the meeting is held;
2.4.2 the record date
for determining Stockholders entitled to express consent to
corporate action in writing without a meeting (unless otherwise
provided in the Certificate of Incorporation), when no prior action
by the Board is required by applicable law, shall be the first day
on which a written consent signed by a Stockholder and setting
forth the action taken or proposed to be taken is delivered to the
Corporation in accordance with applicable law; and when prior
action by the Board is required by applicable law, the record date
for determining Stockholders entitled to express consent to
corporate action in writing without a meeting shall be at the close
of business on the date on which the Board adopts the resolution
taking such prior action; and
2.4.3 the record date
for determining Stockholders for any purpose other than those
specified in Sections 2.4.1 and 2.4.2 shall be at the close of
business on the day on which the Board adopts the resolution
authorizing the subject corporate action. When a determination of
Stockholders of record entitled to notice of or to vote at any
meeting of Stockholders has been made as provided in this Section
2.4, such determination shall apply to any adjournment thereof
unless the Board fixes a new record date for the adjourned
meeting.
2.5
Notice of
Meetings of Stockholders. Whenever under the provisions of
applicable law, the Certificate of Incorporation or these Bylaws,
Stockholders are required or permitted to take any action at a
meeting, notice shall be given stating the place, if any, date and
hour of the meeting, the means of remote communication, if any, by
which Stockholders and proxy holders may be deemed to be present in
person and vote at such meeting, and, in the case of a special
meeting, the purpose or purposes for which the meeting is called.
Unless otherwise provided by applicable law, the Certificate of
Incorporation or these Bylaws, notice of any meeting shall be given
to each Stockholder entitled to vote at such meeting not less than
10 nor more than 60 days before the date of the meeting. Notice may
be mailed or given by electronic transmission. If mailed, such
notice shall be deemed to be given when deposited in the United
States mail, with postage prepaid, directed to the Stockholder at
his, her or its address as it appears on the records of the
Corporation. An affidavit of the Secretary or an Assistant
Secretary or of the transfer agent of the Corporation that the
notice required by this Section 2.5 has been given shall, in the
absence of fraud, be prima facie evidence of the facts stated
therein. If sent by electronic transmission, notice to a
Stockholder shall be deemed to be given if by (i) telecopy
(facsimile), when directed to a number at which the Stockholder has
consented to receive notice,
B-8
(ii) electronic mail, when directed to an electronic mail address
at which the Stockholder has consented to receive notice, (iii) a
posting on an electronic network together with a separate notice to
the Stockholder of the specific posting, upon the later of (A) such
posting and (B) the giving of the separate notice (which notice may
be given in any of the manners provided above), or (iv) any other
form of electronic transmission, when directed to the Stockholder.
Any meeting of Stockholders, annual or special, may adjourn from
time to time to reconvene at the same or some other place. When a
meeting is adjourned to another time or place, notice need not be
given of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken, and at
the adjourned meeting any business may be transacted that might
have been transacted at the meeting as originally called. If,
however, the adjournment is for more than 30 days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each Stockholder
of record entitled to vote at the meeting.
2.6
Waivers of
Notice. Whenever the giving of any notice to Stockholders is
required by applicable law, the Certificate of Incorporation or
these Bylaws, a waiver thereof, given by the person entitled to
said notice, whether before or after the event as to which such
notice is required, shall be deemed equivalent to notice.
Attendance by a Stockholder at a meeting shall constitute a waiver
of notice of such meeting except when the Stockholder attends a
meeting for the express purpose of objecting, at the beginning of
the meeting, to the transaction of any business on the ground that
the meeting has not been lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or
special meeting of the Stockholders need be specified in any waiver
of notice unless so required by applicable law, the Certificate of
Incorporation or these Bylaws.
2.7
List of
Stockholders. The Secretary shall prepare and make, at least
10 days before every meeting of Stockholders, a complete list of
the Stockholders entitled to vote at the meeting, and showing the
address of each Stockholder and the number of shares registered in
the name of each Stockholder. Such list shall be open to the
examination of any Stockholder, the Stockholder’s agent, or
attorney, at the Stockholder’s expense, for any purpose
germane to the meeting, for a period of at least 10 days prior to
the meeting, during ordinary business hours at the Office of the
Corporation. If the meeting is to be held at a place, the list
shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by any
Stockholder who is present. If the meeting is held solely by means
of remote communication, the list shall also be open for
examination as provided by applicable law. Except as provided by
applicable law, the stock ledger shall be the only evidence as to
who are the Stockholders entitled to examine the stock ledger, the
list of Stockholders or the books of the Corporation, or to vote in
person or by proxy at any meeting of Stockholders.
2.8
Quorum of
Stockholders; Adjournment. Except as otherwise provided by
applicable law, the Certificate of Incorporation or these Bylaws,
at each meeting of Stockholders, the presence, in person or by
proxy, of the holders of one-third of the voting power of all
outstanding shares of stock entitled to vote at the meeting shall
constitute a quorum for the transaction of any business at such
meeting. In the absence of a quorum, the holders of one-third of
the voting power of the shares of stock present in person or
represented by proxy at any meeting of Stockholders, including an
adjourned meeting, whether or not a quorum is present, may adjourn
such meeting to another time and place. Shares of its own stock
belonging to the Corporation or to another corporation, if a
majority of the shares entitled to vote in the election of
directors of such other corporation is held, directly or
indirectly, by the Corporation, shall neither be entitled to vote
nor be counted for quorum purposes; provided, however, that the
foregoing shall not limit the right of the Corporation to vote
stock, including but not limited to its own stock, held by it in a
fiduciary capacity.
2.9
Voting;
Proxies. Unless otherwise provided in the Certificate of
Incorporation, every Stockholder entitled to vote at any meeting of
Stockholders shall be entitled to one vote for each share of stock
held by such Stockholder which has voting power upon the matter in
question. At any meeting of Stockholders, all matters (except as
otherwise provided by the Certificate of Incorporation, these
Bylaws, the rules and regulations of any stock exchange or listing
service applicable to the Corporation, applicable law or pursuant
to any rules or regulations applicable to the Corporation or its
securities) shall be decided by the affirmative vote of a majority
in voting power of shares of stock present in person or represented
by proxy and entitled to vote thereon; provided, however, that at
all meetings of Stockholders for the election of Directors, a
plurality of the votes cast shall be sufficient to elect each
Director; and provided, further, that at all meetings of
Stockholders at which a determination of when, or with what
frequency, any votes (advisory or otherwise) may be taken on
matters relating to executive compensation, such determination
shall be made by reference to a plurality of the votes cast. Each
Stockholder entitled to vote at a meeting of Stockholders or to
express consent to or dissent from corporate action in writing
without a meeting may authorize another person or persons to act
for such Stockholder by proxy but no such proxy shall be voted or
acted upon after 180 days from its date, unless the proxy is
irrevocable. A proxy shall be irrevocable if it expressly states
that it is irrevocable and if, and only so long as, it is coupled
with an interest sufficient in law to support an irrevocable power.
A Stockholder may revoke
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any proxy that is not irrevocable by attending the meeting and
voting in person or by delivering to the Secretary a revocation of
the proxy or by delivering a new proxy bearing a later date.
2.10
Voting
Procedures and Inspectors of Election at Meetings of
Stockholders. The Board, in advance of any meeting of
Stockholders, may, and shall if required by applicable law, appoint
one or more inspectors, who may be employees of the Corporation, to
act at the meeting and make a written report thereof. The Board may
designate one or more persons as alternate inspectors to replace
any inspector who fails to act. If no inspector or alternate is
able to act at a meeting, the person presiding at the meeting may,
and shall if required by applicable law, appoint one or more
inspectors to act at the meeting. Each inspector, before entering
upon the discharge of his or her duties, shall take and sign an
oath faithfully to execute the duties of inspector with strict
impartiality and according to the best of his or her ability. The
inspectors shall (a) ascertain the number of shares outstanding and
the voting power of each, (b) determine the shares represented at
the meeting and the validity of proxies and ballots, (c) count all
votes and ballots, (d) determine and retain for a reasonable period
a record of the disposition of any challenges made to any
determination by the inspectors, and (e) certify their
determination of the number of shares represented at the meeting
and their count of all votes and ballots. The inspectors may
appoint or retain other persons or entities to assist the
inspectors in the performance of their duties. Unless otherwise
provided by the Board, the date and time of the opening and the
closing of the polls for each matter upon which the Stockholders
will vote at a meeting shall be determined by the person presiding
at the meeting and shall be announced at the meeting. No ballot,
proxies or votes, or any revocation thereof or change thereto,
shall be accepted by the inspectors after the closing of the polls
unless state court of the State of Delaware, upon application by a
Stockholder, shall determine otherwise. In determining the validity
and counting of proxies and ballots cast at any meeting of
Stockholders, the inspectors may consider such information as is
permitted by applicable law. No person who is a candidate for
office at an election may serve as an inspector at such
election.
2.11
Conduct of
Meetings; Organization. Subject to Section 2.12 through 2.14
of these Bylaws, the Board may adopt by resolution such rules and
regulations for the conduct of the meeting of Stockholders as it
shall deem appropriate. Unless another officer is designated by the
Board, at each meeting of Stockholders, the Chief Executive
Officer, or in the absence of the Chief Executive Officer, the
President, or in the absence of the President, the Chairman, or if
there is no Chairman or if there be one and the Chairman is absent,
a Vice President, and in case more than one Vice President shall be
present, that Vice President designated by the Board (or in the
absence of any such designation, the most senior Vice President,
based on age, present), shall preside over the meeting. Except to
the extent inconsistent with such rules and regulations as adopted
by the Board, the person presiding over any meeting of Stockholders
shall have the right and authority to convene and to adjourn the
meeting, to prescribe such rules, regulations and procedures and to
do all such acts as, in the judgment of such person, are
appropriate for the proper conduct of the meeting. Such rules,
regulations or procedures, whether adopted by the Board or
prescribed by the presiding officer of the meeting, may include,
without limitation, the following: (i) the establishment of an
agenda or order of business for the meeting (subject to the
requirements of Sections 2.12 and 2.13 of these Bylaws); (ii) rules
and procedures for maintaining order at the meeting and the safety
of those present; (iii) limitations on attendance at or
participation in the meeting to Stockholders of record of the
Corporation, their duly authorized and constituted proxies or such
other persons as the person presiding over the meeting shall
determine; (iv) restrictions on entry to the meeting after the time
fixed for the commencement thereof; and (v) limitations on the time
allotted to questions or comments by participants. The presiding
officer at any meeting of Stockholders, in addition to making any
other determinations that may be appropriate to the conduct of the
meeting, shall, if the facts warrant, determine and declare to the
meeting that a matter or business was not properly brought before
the meeting and if such presiding officer should so determine, such
person shall so declare to the meeting and any such matter or
business not properly brought before the meeting shall not be
transacted or considered. Unless and to the extent determined by
the Board or the person presiding over the meeting, meetings of
Stockholders shall not be required to be held in accordance with
the rules of parliamentary procedure. The Secretary, or in his or
her absence, one of the Assistant Secretaries, shall act as
secretary of the meeting. In case none of the officers above
designated to act as the person presiding over the meeting or as
secretary of the meeting, respectively, shall be present, a person
presiding over the meeting or a secretary of the meeting, as the
case may be, shall be designated by the Board, and in case the
Board has not so acted, in the case of the designation of a person
to act as secretary of the meeting, designated by the person
presiding over the meeting.
2.12
Order of
Business. The order of business at all meetings of
Stockholders shall be as determined by the person presiding over
the meeting, subject, however, to the following provisions:
2.12.1 At any annual
meeting of Stockholders, only such nominations of persons for
election to the Board shall be made, and only such other business
shall be conducted or considered, as shall have been properly
brought before the meeting. For nominations to be properly made at
an annual meeting, and proposals of other business to be properly
brought before an annual meeting, nominations and proposals of
other business must be (a) specified in the
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Corporation’s notice of meeting (or any supplement thereto)
given by or at the direction of the Board, (b) otherwise properly
made at the annual meeting, by or at the direction of the Board or
(c) otherwise properly requested to be brought before the annual
meeting by a Stockholder in accordance with these Bylaws. For
nominations of persons for election to the Board or proposals of
other business to be properly requested by a Stockholder to be made
at an annual meeting, a Stockholder must (i) be a Stockholder of
record at the time of giving of notice of such annual meeting by or
at the direction of the Board and at the time of the annual
meeting, (ii) be entitled to vote at such annual meeting and (iii)
comply with the procedures set forth in these Bylaws as to such
business or nomination. The immediately preceding sentence shall be
the exclusive means for a Stockholder to make nominations or other
business proposals (other than matters properly brought under Rule
14a-8 or Rule 14a-11 under the Securities Exchange Act of 1934 (the
“Exchange Act”), and included in the
Corporation’s notice of meeting) before an annual meeting of
Stockholders.
2.12.2 At any special
meeting of Stockholders, only such business shall be conducted or
considered, as shall have been properly brought before the meeting
pursuant to the Corporation’s notice of meeting. To be
properly brought before a special meeting, proposals of business
must be (a) specified in the Corporation’s notice of meeting
(or any supplement thereto) given by or at the direction of the
Board or (b) otherwise properly brought before the special meeting,
by or at the direction of the Board. In this regard, Nominations of
persons for election to the Board may be made at a special meeting
of Stockholders at which Directors are to be elected pursuant to
the Corporation’s notice of meeting (a) by or at the
direction of the Board or (b) provided that the Board has
determined that Directors shall be elected at such meeting, by any
Stockholder who (i) is a Stockholder of record at the time of
giving of notice of such special meeting and at the time of the
special meeting, (ii) is entitled to vote at the meeting, and (iii)
complies with the procedures set forth in these Bylaws as to such
nomination. The immediately preceding sentence shall be the
exclusive means for a Stockholder to make nominations or other
business proposals before a special meeting of Stockholders (other
than matters properly brought under Rule 14a-8 or Rule 14a-11 under
the Exchange Act and included in the Corporation’s notice of
meeting).
2.12.3 Except as
otherwise provided by law, the Certificate of Incorporation or
these Bylaws, the presiding person at the meeting shall have the
power 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 these Bylaws and, if any
proposed nomination or other business is not in compliance with
these Bylaws, to declare that no action shall be taken on such
nomination or other proposal and such nomination or other proposal
shall be disregarded.
2.13
Advance
Notice of Stockholder Business and Nominations.
2.13.1 Without
qualification or limitation, but subject to Section 2.13.3(d) of
these Bylaws, for any nominations or any other business to be
properly brought before an annual meeting by a Stockholder pursuant
to Section 2.12.1 of these Bylaws, the Stockholder must have given
timely notice thereof (including, in the case of nominations, the
completed and signed questionnaire, representation and agreement
required by Section 2.14 of these Bylaws) and timely updates and
supplements thereof in writing to the Secretary and such other
business must otherwise be 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 120th
day and not later than the close of business on the 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 30
days before or more than 60 days after such anniversary date,
notice by the Stockholder must be so delivered not earlier than the
close of business on the 120th
day prior to the date of such annual meeting and not later than the
close of business on the later of the 90th
day prior to the date of 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
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
any adjournment or postponement of an annual meeting, or the public
announcement thereof, commence a new time period for the giving of
a Stockholder’s notice as described above.
Notwithstanding anything in the immediately preceding paragraph to
the contrary, in the event that the number of Directors to be
elected to the Board is increased by the Board, and there is no
public announcement by the Corporation naming all of the nominees
for Director or specifying the size of the increased Board at least
100 days prior to the first anniversary of the preceding
year’s annual meeting, a Stockholder’s notice required
by this Section 2.13.1 shall also be considered timely, but only
with respect to nominees for any new positions created
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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 10th
day following the day on which such public announcement is first
made by the Corporation.
In addition, to be timely, a Stockholder’s notice must
further be updated and supplemented, if necessary, so that the
information provided or required to be provided in such notice
shall be true and correct as of the record date for the meeting and
as of the date that is 10 business days prior to the meeting or any
adjournment or postponement thereof, and such update and supplement
shall be delivered to the Secretary at the principal executive
offices of the Corporation not later than five business days after
the record date for the meeting in the case of the update and
supplement required to be made as of the record date, and not later
than eight business days prior to the date for the meeting, any
adjournment or postponement thereof in the case of the update and
supplement required to be made as of 10 business days prior to the
meeting or any adjournment or postponement thereof.
2.13.2 Subject to
Section 2.13.3(d) of these Bylaws, in the event the Corporation
calls a special meeting of Stockholders for the purpose of electing
one or more Directors to the Board, any Stockholder may nominate a
person or persons (as the case may be) for election to such
position(s) to be elected as specified in the Corporation’s
notice calling the meeting, provided that the Stockholder gives
timely notice thereof (including the completed and signed
questionnaire, representation and agreement required by Section
2.14 of these Bylaws) and timely updates and supplements thereof in
writing to the Secretary. In order 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 120th
day prior to the date of such special meeting and not later than
the close of business on the later of the 90th
day prior to the date of 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
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 to be elected at such meeting. In no event shall any
adjournment or postponement of a special meeting, or the public
announcement thereof, commence a new time period for the giving of
a Stockholder’s notice as described above.
In addition, to be timely, a Stockholder’s notice must
further be updated and supplemented, if necessary, so that the
information provided or required to be provided in such notice
shall be true and correct as of the record date for the meeting and
as of the date that is 10 business days prior to the meeting or any
adjournment or postponement thereof, and such update and supplement
shall be delivered to the Secretary at the principal executive
offices of the Corporation not later than five business days after
the record date for the meeting in the case of the update and
supplement required to be made as of the record date, and not later
than eight business days prior to the date for the meeting, any
adjournment or postponement thereof in the case of the update and
supplement required to be made as of 10 business days prior to the
meeting or any adjournment or postponement thereof.
2.13.3 To be in proper
form, a Stockholder’s notice (whether given pursuant to
Section 2.12.1 or 2.12.2 of these Bylaws) to the Secretary must
include the following, as applicable.
(a) As to the
Stockholder giving the notice and the beneficial owner, if any, on
whose behalf the nomination or proposal is made, a
Stockholder’s notice must set forth: (i) the name and address
of such Stockholder, as they appear on the Corporation’s
books, of such beneficial owner, if any, and of their respective
affiliates or associates or others acting in concert therewith,
(ii) (A) the class or series and number of shares of the
Corporation which are, directly or indirectly, owned beneficially
and of record by such Stockholder, such beneficial owner and their
respective affiliates or associates or others acting in concert
therewith, (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, or any derivative or synthetic
arrangement having the characteristics of a long position in any
class or series of shares of the Corporation, or any contract,
derivative, swap or other transaction or series of transactions
designed to produce economic benefits and risks that correspond
substantially to the ownership of any class or series of shares of
the Corporation, including due to the fact that the value of such
contract, derivative, swap or other transaction or series of
transactions is determined by reference to the price, value or
volatility of any class or series of shares of the Corporation,
whether or not such instrument, contract or right shall be subject
to settlement in the underlying class or series of shares of the
Corporation, through the delivery of cash or other property, or
otherwise, and without regard of whether the Stockholder of record,
the beneficial owner, if any, or any affiliates or associates
or
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others acting in concert therewith, may have entered into
transactions that hedge or mitigate the economic effect of such
instrument, contract or right or 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 (any
of the foregoing, a “Derivative Instrument”) directly
or indirectly owned beneficially by such Stockholder, the
beneficial owner, if any, or any affiliates or associates or others
acting in concert therewith, (C) any proxy, contract, arrangement,
understanding, or relationship pursuant to which such Stockholder
has a right to vote any class or series of shares of the
Corporation, (D) any agreement, arrangement, understanding,
relationship or otherwise, including any repurchase or similar
so-called “stock borrowing” agreement or arrangement,
engaged in, directly or indirectly, by such Stockholder, the
purpose or effect of which is to mitigate loss to, reduce the
economic risk (of ownership or otherwise) of any class or series of
the shares of the Corporation by, manage the risk of share price
changes for, or increase or decrease the voting power of, such
Stockholder with respect to any class or series of the shares of
the Corporation, or which provides, directly or indirectly, the
opportunity to profit or share in any profit derived from any
decrease in the price or value of any class or series of the shares
of the Corporation (any of the foregoing, “Short
Interests”), (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 of such general or limited
partnership, (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, including without limitation any
such interests held by members of such Stockholder’s
immediate family sharing the same household, (H) any significant
equity interests or any Derivative Instruments or Short Interests
in any principal competitor of the Corporation held by such
Stockholder, and (I) any direct or indirect interest of such
Stockholder in any contract with the Corporation, any affiliate of
the Corporation or any principal competitor of the Corporation
(including, in any such case, any employment agreement, collective
bargaining agreement or consulting agreement), and (iii) any other
information relating to such Stockholder and beneficial owner, if
any, that would be required to be disclosed in a proxy statement
and form of proxy 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;
(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 Stockholder’s notice must, in addition to the
matters set forth in paragraph (a) above, also set forth: (i) a
brief description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting
and any material interest of such Stockholder and beneficial owner,
if any, in such business, (ii) the text of the proposal or business
(including the text of any resolutions proposed for consideration),
and (iii) 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;
(c) As to
each person, if any, whom the Stockholder proposes to nominate for
election or reelection to the Board, a Stockholder’s notice
must, in addition to the matters set forth in paragraph (a) above,
also set forth: (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 a contested election pursuant
to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder (including such person’s written
consent to being named in the proxy statement as a nominee and to
serving as a Director if elected) and (ii) 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; and
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(d) With
respect to each person, if any, whom the Stockholder proposes to
nominate for election or reelection to the Board, a
Stockholder’s notice must, in addition to the matters set
forth in paragraphs (a) and (c) above, also include a completed and
signed questionnaire, representation and agreement required by
Section 2.14 of these Bylaws. The Corporation may require any
proposed nominee to furnish such other information as may
reasonably be required by the Corporation 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.
(e) For
purposes of these Bylaws, “public announcement” shall
mean disclosure in a press release reported by a regional or
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.
(f)
Notwithstanding the provisions of these Bylaws, 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 these Bylaws; 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 the
requirements applicable to nominations or proposals as to any other
business to be considered pursuant to Section 2.12 of these
Bylaws.
(g) Nothing
in these Bylaws shall be deemed to affect any rights (i) of
Stockholders to request inclusion of proposals in the
Corporation’s proxy statement pursuant to Rule 14a-8 under
the Exchange Act, (ii) of Stockholders to request inclusion of
nominees in the Corporation’s proxy statement pursuant to
Rule 14a-11 under the Exchange Act or (iii) of the holders of any
series of preferred stock if and to the extent provided for under
law, the Certificate of Incorporation or these Bylaws. Subject to
Rule 14a-8 and Rule 14a-11 under the Exchange Act, nothing in these
Bylaws shall be construed to permit any Stockholder, or give any
Stockholder the right, to include or have disseminated or described
in the Corporation’s proxy statement any nomination of
Director or Directors or any other business proposal.
2.14
Submission
of Ouestionnaire, Representation and Agreement. To be
eligible to be a nominee for election or reelection as a Director
of the Corporation (or, in the case of a nomination brought under
Rule 14a-11 of the Exchange Act, to serve as a Director of the
Corporation), a person must deliver (in accordance with the time
periods prescribed for delivery of notice under Section 2.13 of
these Bylaws or, in the case of a nomination brought under Rule
14a-11 of the Exchange Act, prior to the time such person is to
begin service as a Director) 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, (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 corporate
governance, conflict of interest, confidentiality and stock
ownership and trading policies and guidelines of the Corporation
publicly disclosed from time to time.
2.15
Written Consent of Stockholders Without a
Meeting. Unless
otherwise provided in the Certificate of Incorporation, any action
required by the General Corporation Law to be taken at any annual
or special meeting of Stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent or consents
in writing, setting forth the action so taken, shall be signed by
the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon
were present and voted and shall be delivered (by hand or by
certified or registered mail, return receipt requested, or by
electronic or remote communication) to the Office of the
Corporation, or to an officer or agent of the Corporation having
custody of the book in which proceedings of meetings of
Stockholders are recorded, or to any other officer or agent
designated by the Board. Every written consent shall
bear
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the date of signature of each
Stockholder who signs the consent and no written consent shall be
effective to take the corporate action referred to therein unless,
within 60 days of the earliest dated consent delivered in the
manner required by this Section 2.13, written consents signed by a
sufficient number of holders to take action are delivered to the
Corporation as aforesaid. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written
consent shall, to the extent required by applicable law, be given
to those Stockholders who have not consented in writing, and who,
if the action had been taken at a meeting, would have been entitled
to notice of the meeting if the record date for such meeting had
been the date that written consents signed by a sufficient number
of holders to take the action were delivered to the
Corporation.
Article 3
Directors
3.1
General
Powers. Except as otherwise provided in the Certificate of
Incorporation, the business and affairs of the Corporation shall be
managed by or under the direction of the Board. The Board may adopt
such rules and regulations, not inconsistent with the Certificate
of Incorporation or these Bylaws or applicable law, as it may deem
proper for the conduct of its meetings and the management of the
Corporation.
3.2
Number;
Qualification; Term of Office. The Board shall consist of
one or more directors, and the number of directors may be increased
or decreased from time to time by resolution of the Board. Except
as provided in Section 3.3, Directors shall be elected at the
annual meeting of Stockholders by a plurality of the votes cast in
the applicable election, and each Director shall hold office until
his or her successor is elected and qualified, or until the
Director’s earlier death, resignation, disqualification or
removal. Directors need not be Stockholders, and need not be
residents of the State of Delaware.
3.3
Newly
Created Directorships and Vacancies. Unless otherwise
provided by applicable law or the Certificate of Incorporation, any
newly created directorships resulting from an increase in the
authorized number of Directors and any vacancies occurring in the
Board for any cause may be filled by the affirmative vote of a
majority of the remaining members of the Board, although less than
a quorum, or by a sole remaining Director, or may be elected by a
plurality of the votes cast by Directors at a Board meeting. A
Director so elected shall hold office until the expiration of the
term of office of the Director whom he or she has replaced, if
applicable, or until a successor is elected and qualified, or until
the Director’s earlier death, resignation or removal.
3.4
Resignation
and Removal. Any Director may resign at any time by notice
given in writing to the Corporation. Such resignation shall take
effect at the time therein specified, and, unless otherwise
specified in such resignation, the acceptance of such resignation
shall not be necessary to make it effective. Any Director or the
Entire Board may be removed at any time, but only by the
affirmative vote of the holders of two-thirds or more of the
outstanding shares of the capital stock of the Corporation entitled
to vote generally in the election of Directors (considered for this
purpose as one class) cast at a meeting of the Stockholders called
for that purpose.
3.5
Regular
Meetings. Regular meetings of the Board may be held without
notice at such times and at such places within or without the State
of Delaware as may be determined from time to time by resolution of
the Board.
3.6
Special
Meetings. Special meetings of the Board may be held at such
times and at such places within or without the State of Delaware
whenever called by the Chairman, the Chief Executive Officer or the
Secretary, or by any two or more Directors on at least 24
hours’ notice to each Director given by one of the means
specified in Section 3.9 hereof other than by mail, or on at least
three days’ notice if given by mail. Special meetings shall
be called by the Chairman, Chief Executive Officer or Secretary in
like manner and on like notice on the written request of any two or
more of the Directors then serving as Directors.
3.7
Telephone
Meetings. Directors or members of any committee designated
by the Board may participate in a meeting of the Board or of 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 participation
in a meeting pursuant to this Section 3.7 shall constitute presence
in person at such meeting.
3.8
Adjourned Meetings. A majority of the Directors present at
any meeting of the Board, including an adjourned meeting, whether
or not a quorum is present, may adjourn such meeting to another
time and place. At least 24 hours’ notice of any adjourned
meeting of the Board shall be given to each Director whether or not
present at the time of the adjournment, if such notice shall be
given by one of the means specified in Section 3.9 hereof other
than by mail, or at least three days’ notice if by mail. Any
business may be transacted at an adjourned meeting that might have
been transacted at the meeting as originally called.
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3.9
Notice
Procedure. Subject to Sections 3.6 and 3.10 hereof, whenever
under applicable law, the Certificate of Incorporation or these
Bylaws, notice is required to be given to any Director, such notice
shall be deemed given effectively if given in person or by
telephone, by mail addressed to such Director at such
Director’s address as it appears on the records of the
Corporation, with postage thereon prepaid, or by telegram, telecopy
(facsimile) or by other means of electronic transmission such as
electronic mail.
3.10
Waiver of
Notice. Whenever the giving of any notice to Directors is
required by applicable law, the Certificate of Incorporation or
these Bylaws, a waiver thereof, given by the Director entitled to
said notice, whether before or after the event as to which such
notice is required, shall be deemed equivalent to notice.
Attendance by a Director at a meeting shall constitute a waiver of
notice of such meeting except when the Director attends a meeting
for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business on the ground that the
meeting has not been lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or
special meeting of the Directors or a committee of Directors need
be specified in any waiver of notice unless so required by
applicable law, the Certificate of Incorporation or these
Bylaws.
3.11
Organization.
At each meeting of the Board, the Chairman, or in the absence of
the Chairman, the Chief Executive Officer, or in the absence of the
Chief Executive Officer, the President, or in the absence of the
President, a chairman chosen by a majority of the Directors
present, shall preside. If present, the Secretary shall act as
secretary at each meeting of the Board. In case the Secretary shall
be absent from any meeting of the Board, an Assistant Secretary
shall perform the duties of secretary at such meeting; and in the
absence from any such meeting of the Secretary and all Assistant
Secretaries, the person presiding at the meeting may appoint any
person to act as secretary of the meeting.
3.12
Quorum of
Directors. The presence in person of a majority of the
Entire Board shall be necessary and sufficient to constitute a
quorum for the transaction of business at any meeting of the
Board.
3.13
Action by
Majority Vote. Except as otherwise expressly required by
applicable law, the Certificate of Incorporation or these Bylaws,
the vote of a majority of the Directors present at a meeting at
which a quorum is present shall be the act of the Board.
3.14
Action
Without Meeting. Unless otherwise restricted by the
Certificate of Incorporation or these Bylaws, any action required
or permitted to be taken at any meeting of the Board or of any
committee thereof may be taken without a meeting if all Directors
or members of such committee, as the case may be, consent thereto
in writing or by electronic transmission, and the writing or
writings or electronic transmission or transmissions are filed with
the minutes of proceedings of the Board or committee.
Article 4
Committees of the
Board
The Board may, by resolution,
designate one or more committees, each committee to consist of one
or more of the Directors of the Corporation. The Board may
designate one or more Directors as alternate members of any
committee, who may replace any absent or disqualified member at any
meeting of such committee. If a member of a committee shall be
absent from any meeting, or disqualified from voting thereat, the
remaining member or members present at the meeting and not
disqualified from voting, whether or not such member or members
constitute a quorum, may, by a unanimous vote, appoint another
member of the Board to act at the meeting in the place of any such
absent or disqualified member. Any such committee, to the extent
permitted by applicable law and to the extent provided in the
resolution of the Board designating such committee, shall have and
may exercise all the powers and authority of the Board in the
management of the business and affairs of the Corporation, and may
authorize the seal of the Corporation to be affixed to all papers
that may require it. Unless otherwise specified in the resolution
of the Board designating a committee, at all meetings of such
committee, a majority of the then authorized members of the
committee shall constitute a quorum for the transaction of
business, and the vote of a majority of the members of the
committee present at any meeting at which there is a quorum shall
be the act of the committee. Each committee shall keep regular
minutes of its meetings. Unless the Board otherwise provides, each
committee designated by the Board may make, alter and repeal rules
for the conduct of its business. In the absence of such rules each
committee shall conduct its business in the same manner as the
Board conducts its business pursuant to Article 3 of these
Bylaws.
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Article 5
Officers
5.1
Positions.
The officers of the Corporation shall include a Chief Executive
Officer, a Treasurer a Secretary and such other officers as the
Board may elect, including a Chairman, President, one or more Vice
Presidents and one or more Assistant Secretaries and Assistant
Treasurers, who shall exercise such powers and perform such duties
as shall be determined from time to time by resolution of the
Board. The Board may elect one or more Vice Presidents as Executive
Vice Presidents and may use descriptive words or phrases to
designate the standing, seniority or areas of special competence of
the Vice Presidents elected or appointed by it. Any number of
offices may be held by the same person unless the Certificate of
Incorporation or these Bylaws otherwise provide.
5.2
Election.
The officers of the Corporation shall be elected by the Board at
its annual meeting or at such other time or times as the Board
shall determine.
5.3
Term of
Office. Each officer of the Corporation shall hold office
for the term for which he or she is elected and until such
officer’s successor is elected and qualifies or until such
officer’s earlier death, resignation or removal. Any officer
may resign at any time upon written notice to the Corporation. Such
resignation shall take effect at the date of receipt of such notice
or at such later time as is therein specified, and, unless
otherwise specified, the acceptance of such resignation shall not
be necessary to make it effective. The resignation of an officer
shall be without prejudice to the contractual rights of the
Corporation, if any. Any officer may be removed at any time, with
or without cause by the Board. Any vacancy occurring in any office
of the Corporation may be filled by the Board. The removal of an
officer with or without cause shall be without prejudice to the
officer’s contract rights, if any. The election or
appointment of an officer shall not of itself create contractual
rights in favor of such officer.
5.4
Fidelity
Bonds. The Corporation may secure the fidelity of any or all
of its officers or agents by bond or otherwise.
5.5
Chairman.
The Chairman, if one shall have been appointed, shall preside at
all meetings of the Board and shall exercise such powers and
perform such other duties as shall be determined from time to time
by resolution of the Board.
5.6
Chief
Executive Officer. The Chief Executive Officer of the
Corporation and shall have general supervision over the business of
the Corporation, subject, however, to the control of the Board and
of any duly authorized committee of the Board. Except as otherwise
provided in Section 2.11, the Chief Executive Officer shall preside
at all meetings of the Stockholders and shall also, if a Director,
preside at all meetings of the Board at which the Chairman (if
there be one) is not present. The Chief Executive Officer may sign
and execute in the name of the Corporation deeds, mortgages, bonds,
contracts and other instruments, except in cases in which the
signing and execution thereof shall be expressly delegated by
resolution of the Board or by these Bylaws to some other officer or
agent of the Corporation, or shall be required by applicable law
otherwise to be signed or executed and, in general, the Chief
Executive Officer shall perform all duties incident to the office
of a Chief Executive Officer or President of a corporation and such
other duties as may from time to time be assigned to the Chief
Executive Officer by resolution of the Board.
5.7
President.
The President, if any, shall have such powers and perform such
duties as may be specified in these bylaws or prescribed by the
Board. If the Chief Executive Officer is absent or disabled, the
President shall succeed to the Chief Executive Officer’s
powers and duties.
5.8
Vice
Presidents. At the request of the Chief Executive Officer or
the President, or, in the absence of both the Chief Executive
Officer and President, at the request of the Board, the Vice
Presidents shall (in such order as may be designated by the Board,
or, in the absence of any such designation, in order of seniority
based on age) perform all of the duties of the Chief Executive
Officer and, in so performing, shall have all the powers of, and be
subject to all restrictions upon, the Chief Executive Officer. Any
Vice President may sign and execute in the name of the Corporation
deeds, mortgages, bonds, contracts or other instruments, except in
cases in which the signing and execution thereof shall be expressly
delegated by resolution of the Board or by these Bylaws to some
other officer or agent of the Corporation, or shall be required by
applicable law otherwise to be signed or executed, and each Vice
President shall perform such other duties as from time to time may
be assigned to such Vice President by resolution of the Board or by
the Chief Executive Officer or President.
5.9
Secretary.
The Secretary shall attend all meetings of the Board and of the
Stockholders and shall record all the proceedings of the meetings
of the Board and of the Stockholders in a book to be kept for that
purpose, and shall perform
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like duties for committees of the Board, when required. The
Secretary shall give, or cause to be given, notice of all special
meetings of the Board and of the Stockholders and shall perform
such other duties as may be prescribed by the Board or by the Chief
Executive Officer, under whose supervision the Secretary shall be.
The Secretary shall have custody of the corporate seal of the
Corporation, if any, and the Secretary, or an Assistant Secretary,
shall have authority to affix the same on any instrument requiring
it, and when so affixed, the seal may be attested by the signature
of the Secretary or by the signature of such Assistant Secretary.
The Board may, by resolution, give general authority to any other
officer to affix the seal of the Corporation and to attest the same
by such officer’s signature. The Secretary or an Assistant
Secretary may also attest all instruments signed by the Chief
Executive Officer, President or any Vice President. The Secretary
shall have charge of all the books, records and papers of the
Corporation relating to its organization and management, shall see
that the reports, statements and other documents required by
applicable law are properly kept and filed and, in general, shall
perform all duties incident to the office of Secretary of a
corporation and such other duties as may from time to time be
assigned to the Secretary by resolution of the Board or by the
Chief Executive Officer or President.
5.10
Treasurer.
The Treasurer who may also be the Chief Financial Officer, shall
have charge and custody of, and be responsible for, all funds,
securities and notes of the Corporation; receive and give receipts
for moneys due and payable to the Corporation from any sources
whatsoever; deposit all such moneys and valuable effects in the
name and to the credit of the Corporation in such depositaries as
may be designated by the Board; against proper vouchers, cause such
funds to be disbursed by checks or drafts on the authorized
depositaries of the Corporation signed in such manner as shall be
determined by the Board and be responsible for the accuracy of the
amounts of all moneys so disbursed; regularly enter or cause to be
entered in books or other records maintained for the purpose full
and adequate account of all moneys received or paid for the account
of the Corporation; have the right to require from time to time
reports or statements giving such information as the Treasurer may
desire with respect to any and all financial transactions of the
Corporation from the officers or agents transacting the same;
render to the Chief Executive Officer or the Board, whenever the
Chief Executive Officer or the Board shall require the Treasurer so
to do, an account of the financial condition of the Corporation and
of all financial transactions of the Corporation; disburse the
funds of the Corporation as ordered by the Board; and, in general,
perform all duties incident to the office of Treasurer of a
corporation and such other duties as may from time to time be
assigned to the Treasurer by resolution of the Board or by the
Chief Executive Officer.
5.11
Assistant
Secretaries and Assistant Treasurers. Assistant Secretaries
and Assistant Treasurers shall perform such duties as shall be
assigned to them by the Secretary or by the Treasurer,
respectively, or by resolution of the Board or by the Chief
Executive Officer.
Article 6
Indemnification
6.1
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, any person (a
“Covered Person”) who was or is made or is threatened
to be made a party or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or
investigative (a “Proceeding”), by reason of the fact
that he or she, or a person for whom he or she is the legal
representative, is or was a Director or officer of the Corporation
or, while a Director or officer of the Corporation, is or was
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint
venture, trust, enterprise or nonprofit entity (an “Other
Entity”), including service with respect to employee benefit
plans, against all liability and loss suffered and expenses
(including attorneys’ fees) reasonably incurred by such
Covered Person. Notwithstanding the preceding sentence, except as
otherwise provided in Section 6.3, the Corporation shall be
required to indemnify a Covered Person in connection with a
Proceeding (or part thereof) commenced by such Covered Person only
if the commencement of such Proceeding (or part thereof) by the
Covered Person was authorized by the Board.
6.2
Prepayment
of Expenses. The Corporation shall pay the expenses
(including attorneys’ fees) incurred by a Covered Person in
defending any Proceeding in advance of its final disposition,
provided, however, that, to the extent required by applicable law,
such payment of expenses in advance of the final disposition of the
Proceeding shall be made only upon receipt of an undertaking by the
Covered Person to repay all amounts advanced if it should be
ultimately determined that the Covered Person is not entitled to be
indemnified under this Article 6 or otherwise.
6.3
Actions by
or in the Right of the Corporation. The Corporation shall
indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit
by or in the right of the Corporation to procure a judgment in its
favor by reason of the fact that he or she is or was a Director,
officer, employee or
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agent of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys’ fees)
actually and reasonably incurred by him or her in connection with
the defense or settlement of such action or suit if he or she acted
in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the corporation. No
indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged by a court
of competent jurisdiction to be liable to the Corporation or for
amounts paid in settlement to the Corporation, unless and only to
the extent that the court in which such action or suit was brought
or other court of competent jurisdiction shall determine upon
application that in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses as the court shall deem proper. A person entitled to
indemnification under this Section shall also be considered a
“Covered Person” for all purposes of these Bylaws.
6.4
Claims.
If a claim for indemnification or advancement of expenses under
this Article 6 is not paid in full within 30 days after a written
claim therefor by the Covered Person has been received by the
Corporation, the Covered Person may 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. In
any such action the Corporation shall have the burden of proving
that the Covered Person is not entitled to the requested
indemnification or advancement of expenses under applicable
law.
6.5
Nonexclusivity
of Rights. The rights conferred on any Covered Person by
this Article 6 shall not be exclusive of any other rights that 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.
6.6
Other
Sources. The Corporation’s obligation, if any, 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 an Other Entity shall be reduced by any amount such Covered
Person may collect as indemnification or advancement of expenses
from such Other Entity.
6.7
Amendment
or Repeal. Any repeal or modification of the foregoing
provisions of this Article 6 shall not adversely affect any right
or protection hereunder of any Covered Person in respect of any act
or omission occurring prior to the time of such repeal or
modification.
6.8
Other
Indemnification and Prepayment of Expenses. This Article 6
shall not limit the right of the Corporation, to the extent and in
the manner permitted by applicable law, to indemnify and to advance
expenses to persons other than Covered Persons when and as
authorized by appropriate corporate action.
Article 7
Certain Litigation
Matters
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
7.
7.1
Exclusive
Forum. Unless the Corporation consents in writing to the
selection of an alternative forum, the sole and exclusive forum for
any claim or counterclaim, including without limitation (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 arising pursuant
to any provision of the General Corporation Law, or (iv) any action
asserting a claim 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 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 7.
Article 8
General
Provisions
8.1
Certificates
Representing Shares. Shares of the Corporation’s stock
may be certificated or uncertificated, as provided under applicable
law. Every holder of stock represented by certificates, and upon
request every holder of uncertificated shares, shall be entitled to
have a certificate signed by or in the name of the Corporation by
the Chairman, if any, or the Chief Executive Officer, President or
a Vice President and by the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer, certifying the number of
shares owned by such Stockholder in the Corporation. Any or all of
the signatures upon a
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certificate may be facsimiles. In case any officer, transfer agent
or registrar who has signed or whose facsimile signature has been
placed upon any certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, such
certificate may be issued by the Corporation with the same effect
as if such person were such officer, transfer agent or registrar at
the date of issue.
8.2
Transfer
and Registry Agents. The Corporation may from time to time
maintain one or more transfer offices or agents and registry
offices or agents at such place or places as may be determined from
time to time by the Board.
8.3
Lost,
Stolen or Destroyed Certificates. The Corporation may issue
a new certificate of stock in the place of any certificate
theretofore issued by it, alleged to have been lost, stolen or
destroyed, and the Corporation may require the owner of the lost,
stolen or destroyed certificate, or his legal representative, to
give the Corporation a bond sufficient to indemnify it 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
such new certificate.
8.4
Form of
Records. Any records maintained by the Corporation in the
regular course of its business, including its stock ledger, books
of account, and minute books, may be kept on, or by means of, or be
in the form of, any information storage device or method, provided
that the records so kept can be converted into clearly legible
paper form within a reasonable time. The Corporation shall so
convert any records so kept upon the request of any person entitled
to inspect such records pursuant to applicable law.
8.5
Certain
Acquisitions by Fiduciaries. The provisions of Sections
78.378 to 78.3793 of the General Corporation Law do not apply to
(i) an acquisition by a person acting in a fiduciary capacity from
another person acting in a fiduciary capacity for the same
beneficiaries (and pursuant to the same instrument) or (ii) an
acquisition by the spouse of a person acting in a fiduciary
capacity or by a relative of such fiduciary within the first,
second or third degree of consanguinity, provided that such
acquisition is pursuant to the instrument creating such fiduciary
relationship. For purposes of this section,
“acquisition” has the meaning set forth in Section
78.3783 of the General Corporation Law, and the term
“fiduciary” has the meaning set forth in the Uniform
Fiduciaries Act as adopted in the State of Delaware.
8.6
Counting
Time. For all purposes of these Bylaws, whenever reference
is made herein to a “day” or “days,” such
reference shall mean a calendar day. In addition, unless the
General Corporation Law specifically requires otherwise, any and
all weekend days shall also be considered days for purposes of
these Bylaws. Notwithstanding the foregoing, if a due date for a
particular action or a date for a meeting of the Board or members
would otherwise fall on a federal holiday or weekend day, such due
date or date for such meeting shall instead fall on the next
business day.
8.7
Seal.
The Board may provide for a corporate seal, in which case such
corporate seal shall have the name of the Corporation inscribed
thereon and shall be in such form as may be approved from time to
time by the Board. The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or otherwise
reproduced.
8.8
Amendments.
These Bylaws may be altered, amended or repealed and new Bylaws may
be adopted by the Board, but the Stockholders may make additional
Bylaws and may alter and repeal any Bylaws whether adopted by them
or otherwise.
Date of Adoption: [•], 2016
B-20
APPENDIX C
DESCRIPTION OF DISSENTERS’ RIGHTS
302A.471 RIGHTS OF
DISSENTING SHAREHOLDERS.
Subdivision 1.Actions creating
rights.
A shareholder of a corporation may dissent from, and obtain payment
for the fair value of the shareholder’s shares in the event
of, any of the following corporate actions:
(a) unless
otherwise provided in the articles, an amendment of the articles
that materially and adversely affects the rights or preferences of
the shares of the dissenting shareholder in that it:
(1) alters or
abolishes a preferential right of the shares;
(2) creates,
alters, or abolishes a right in respect of the redemption of the
shares, including a provision respecting a sinking fund for the
redemption or repurchase of the shares;
(3) alters or
abolishes a preemptive right of the holder of the shares to acquire
shares, securities other than shares, or rights to purchase shares
or securities other than shares;
(4) excludes or
limits the right of a shareholder to vote on a matter, or to
cumulate votes, except as the right may be excluded or limited
through the authorization or issuance of securities of an existing
or new class or series with similar or different voting rights;
except that an amendment to the articles of an issuing public
corporation that provides that section 302A.671
does not apply to a control share acquisition does not give rise to
the right to obtain payment under this section; or
(5) eliminates
the right to obtain payment under this subdivision;
(b) a sale,
lease, transfer, or other disposition of property and assets of the
corporation that requires shareholder approval under section
302A.661,
subdivision 2, but not including a disposition in
dissolution described in section 302A.725,
subdivision 2, or a disposition pursuant to an order of a
court, or a disposition for cash on terms requiring that all or
substantially all of the net proceeds of disposition be distributed
to the shareholders in accordance with their respective interests
within one year after the date of disposition;
(c) a plan of
merger, whether under this chapter or under chapter 322B, to which
the corporation is a constituent organization, except as provided
in subdivision 3, and except for a plan of merger adopted under
section 302A.626;
(d) a plan of
exchange, whether under this chapter or under chapter 322B, to
which the corporation is a party as the corporation whose shares
will be acquired by the acquiring organization, except as provided
in subdivision 3;
(e) a plan of
conversion is adopted by the corporation and becomes effective;
(f) an
amendment of the articles in connection with a combination of a
class or series under section 302A.402
that reduces the number of shares of the class or series owned by
the shareholder to a fraction of a share if the corporation
exercises its right to repurchase the fractional share so created
under section 302A.423;
or
(g) any other
corporate action taken pursuant to a shareholder vote with respect
to which the articles, the bylaws, or a resolution approved by the
board directs that dissenting shareholders may obtain payment for
their shares.
Subd. 2.Beneficial
owners.
(a) A
shareholder shall not assert dissenters’ rights as to less
than all of the shares registered in the name of the shareholder,
unless the shareholder dissents with respect to all the shares that
are beneficially owned by another person but registered in the name
of the shareholder and discloses the name and address of each
beneficial owner on whose behalf the shareholder dissents. In that
event, the rights of the dissenter shall be determined as if the
shares as to which the shareholder has dissented and the other
shares were registered in the names of different shareholders.
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(b) A beneficial
owner of shares who is not the shareholder may assert
dissenters’ rights with respect to shares held on behalf of
the beneficial owner, and shall be treated as a dissenting
shareholder under the terms of this section and section
302A.473,
if the beneficial owner submits to the corporation at the time of
or before the assertion of the rights a written consent of the
shareholder.
Subd. 3.Rights not to
apply.
(a) Unless the
articles, the bylaws, or a resolution approved by the board
otherwise provide, the right to obtain payment under this section
does not apply to a shareholder of (1) the surviving corporation in
a merger with respect to shares of the shareholder that are not
entitled to be voted on the merger and are not canceled or
exchanged in the merger or (2) the corporation whose shares will be
acquired by the acquiring organization in a plan of exchange with
respect to shares of the shareholder that are not entitled to be
voted on the plan of exchange and are not exchanged in the plan of
exchange.
(b) If a date is
fixed according to section 302A.445,
subdivision 1, for the determination of shareholders
entitled to receive notice of and to vote on an action described in
subdivision 1, only shareholders as of the date fixed, and
beneficial owners as of the date fixed who hold through
shareholders, as provided in subdivision 2, may exercise
dissenters’ rights.
(c)
Notwithstanding subdivision 1, the right to obtain payment under
this section, other than in connection with a plan of merger
adopted under section 302A.621,
is limited in accordance with the following provisions:
(1) The right to
obtain payment under this section is not available for the holders
of shares of any class or series of shares that is listed on the
New York Stock Exchange, the American Stock Exchange, the NASDAQ
Global Market, or the NASDAQ Global Select Market.
(2) The
applicability of clause (1) is determined as of:
(i) the
record date fixed to determine the shareholders entitled to receive
notice of, and to vote at, the meeting of shareholders to act upon
the corporate action described in subdivision 1; or
(ii) the day
before the effective date of corporate action described in
subdivision 1 if there is no meeting of shareholders.
(3) Clause (1)
is not applicable, and the right to obtain payment under this
section is available pursuant to subdivision 1, for the holders of
any class or series of shares who are required by the terms of the
corporate action described in subdivision 1 to accept for such
shares anything other than shares, or cash in lieu of fractional
shares, of any class or any series of shares of a domestic or
foreign corporation, or any other ownership interest of any other
organization, that satisfies the standards set forth in clause (1)
at the time the corporate action becomes effective.
Subd. 4.Other rights.
The shareholders of a corporation who have a right under this
section to obtain payment for their shares, or who would have the
right to obtain payment for their shares absent the exception set
forth in paragraph (c) of subdivision 3, do not have a right at law
or in equity to have a corporate action described in subdivision 1
set aside or rescinded, except when the corporate action is
fraudulent with regard to the complaining shareholder or the
corporation.
History:
1981 c 270 s 80;
1987 c 203 s 2,3;
1988 c 692 s 10;
1991 c 49 s 16;
1992 c 517 art 1 s 15;
1993 c 17 s 40;
1994 c 417 s 5;
1997 c 10 art 1 s 24;
1999 c 85 art 1 s 11;
2000 c 264 s 6,7;
2002 c 311 art 1 s 20;
2004 c 199 art 14 s 16,17;
2006 c 250 art 1 s 27-29;
2008 c 233 art 1 s 12;
2014 c 170 s 13;
2015 c 39 s 8
302A.473 PROCEDURES FOR
ASSERTING DISSENTERS’ RIGHTS.
Subdivision 1.Definitions.
(a) For purposes
of this section, the terms defined in this subdivision have the
meanings given them.
(b)
“Corporation” means the issuer of the shares held by a
dissenter before the corporate action referred to in section
302A.471,
subdivision 1 or the successor by merger of that issuer.
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(c) “Fair
value of the shares” means the value of the shares of a
corporation immediately before the effective date of the corporate
action referred to in section 302A.471,
subdivision 1.
(d)
“Interest” means interest commencing five days after
the effective date of the corporate action referred to in section
302A.471,
subdivision 1, up to and including the date of payment,
calculated at the rate provided in section 549.09,
subdivision 1, paragraph (c), clause (1).
Subd. 2.Notice of
action.
If a corporation calls a shareholder meeting at which any action
described in section 302A.471,
subdivision 1 is to be voted upon, the notice of the meeting
shall inform each shareholder of the right to dissent and shall
include a copy of section 302A.471
and this section and a brief description of the procedure to be
followed under these sections.
Subd. 3.Notice of
dissent.
If the proposed action must be approved by the shareholders and the
corporation holds a shareholder meeting, a shareholder who is
entitled to dissent under section 302A.471
and who wishes to exercise dissenters’ rights must file with
the corporation before the vote on the proposed action a written
notice of intent to demand the fair value of the shares owned by
the shareholder and must not vote the shares in favor of the
proposed action.
Subd. 4.Notice of procedure;
deposit of shares.
(a) After the
proposed action has been approved by the board and, if necessary,
the shareholders, the corporation shall send to (i) all
shareholders who have complied with subdivision 3, (ii) all
shareholders who did not sign or consent to a written action that
gave effect to the action creating the right to obtain payment
under section 302A.471,
and (iii) all shareholders entitled to dissent if no shareholder
vote was required, a notice that contains:
(1) the address
to which a demand for payment and certificates of certificated
shares must be sent in order to obtain payment and the date by
which they must be received;
(2) any
restrictions on transfer of uncertificated shares that will apply
after the demand for payment is received;
(3) a form to be
used to certify the date on which the shareholder, or the
beneficial owner on whose behalf the shareholder dissents, acquired
the shares or an interest in them and to demand payment; and
(4) a copy of
section 302A.471
and this section and a brief description of the procedures to be
followed under these sections.
(b) In order to
receive the fair value of the shares, a dissenting shareholder must
demand payment and deposit certificated shares or comply with any
restrictions on transfer of uncertificated shares within 30 days
after the notice required by paragraph (a) was given, but the
dissenter retains all other rights of a shareholder until the
proposed action takes effect.
Subd. 5.Payment; return of
shares.
(a) After the
corporate action takes effect, or after the corporation receives a
valid demand for payment, whichever is later, the corporation shall
remit to each dissenting shareholder who has complied with
subdivisions 3 and 4 the amount the corporation estimates to be the
fair value of the shares, plus interest, accompanied by:
(1) the
corporation’s closing balance sheet and statement of income
for a fiscal year ending not more than 16 months before the
effective date of the corporate action, together with the latest
available interim financial statements;
(2) an estimate
by the corporation of the fair value of the shares and a brief
description of the method used to reach the estimate; and
(3) a copy of
section 302A.471
and this section, and a brief description of the procedure to be
followed in demanding supplemental payment.
(b) The
corporation may withhold the remittance described in paragraph (a)
from a person who was not a shareholder on the date the action
dissented from was first announced to the public or who is
dissenting on behalf of a person who was not
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a beneficial owner on that date. If the dissenter has complied with
subdivisions 3 and 4, the corporation shall forward to the
dissenter the materials described in paragraph (a), a statement of
the reason for withholding the remittance, and an offer to pay to
the dissenter the amount listed in the materials if the dissenter
agrees to accept that amount in full satisfaction. The dissenter
may decline the offer and demand payment under subdivision 6.
Failure to do so entitles the dissenter only to the amount offered.
If the dissenter makes demand, subdivisions 7 and 8 apply.
(c) If the
corporation fails to remit payment within 60 days of the deposit of
certificates or the imposition of transfer restrictions on
uncertificated shares, it shall return all deposited certificates
and cancel all transfer restrictions. However, the corporation may
again give notice under subdivision 4 and require deposit or
restrict transfer at a later time.
Subd. 6.Supplemental payment;
demand.
If a dissenter believes that the amount remitted under subdivision
5 is less than the fair value of the shares plus interest, the
dissenter may give written notice to the corporation of the
dissenter’s own estimate of the fair value of the shares,
plus interest, within 30 days after the corporation mails the
remittance under subdivision 5, and demand payment of the
difference. Otherwise, a dissenter is entitled only to the amount
remitted by the corporation.
Subd. 7.Petition;
determination.
If the corporation receives a demand under subdivision 6, it shall,
within 60 days after receiving the demand, either pay to the
dissenter the amount demanded or agreed to by the dissenter after
discussion with the corporation or file in court a petition
requesting that the court determine the fair value of the shares,
plus interest. The petition shall be filed in the county in which
the registered office of the corporation is located, except that a
surviving foreign corporation that receives a demand relating to
the shares of a constituent domestic corporation shall file the
petition in the county in this state in which the last registered
office of the constituent corporation was located. The petition
shall name as parties all dissenters who have demanded payment
under subdivision 6 and who have not reached agreement with the
corporation. The corporation shall, after filing the petition,
serve all parties with a summons and copy of the petition under the
Rules of Civil Procedure. Nonresidents of this state may be served
by registered or certified mail or by publication as provided by
law. Except as otherwise provided, the Rules of Civil Procedure
apply to this proceeding. The jurisdiction of the court is plenary
and exclusive. The court may appoint appraisers, with powers and
authorities the court deems proper, to receive evidence on and
recommend the amount of the fair value of the shares. The court
shall determine whether the shareholder or shareholders in question
have fully complied with the requirements of this section, and
shall determine the fair value of the shares, taking into account
any and all factors the court finds relevant, computed by any
method or combination of methods that the court, in its discretion,
sees fit to use, whether or not used by the corporation or by a
dissenter. The fair value of the shares as determined by the court
is binding on all shareholders, wherever located. A dissenter is
entitled to judgment in cash for the amount by which the fair value
of the shares as determined by the court, plus interest, exceeds
the amount, if any, remitted under subdivision 5, but shall not be
liable to the corporation for the amount, if any, by which the
amount, if any, remitted to the dissenter under subdivision 5
exceeds the fair value of the shares as determined by the court,
plus interest.
Subd. 8.Costs; fees;
expenses.
(a) The court
shall determine the costs and expenses of a proceeding under
subdivision 7, including the reasonable expenses and compensation
of any appraisers appointed by the court, and shall assess those
costs and expenses against the corporation, except that the court
may assess part or all of those costs and expenses against a
dissenter whose action in demanding payment under subdivision 6 is
found to be arbitrary, vexatious, or not in good faith.
(b) If the court
finds that the corporation has failed to comply substantially with
this section, the court may assess all fees and expenses of any
experts or attorneys as the court deems equitable. These fees and
expenses may also be assessed against a person who has acted
arbitrarily, vexatiously, or not in good faith in bringing the
proceeding, and may be awarded to a party injured by those
actions.
(c) The court
may award, in its discretion, fees and expenses to an attorney for
the dissenters out of the amount awarded to the dissenters, if
any.
History:
1981 c 270 s 81;
1987 c 104 s 30-33;
1993 c 17 s 41,42;
1997 c 10 art 1 s 25;
2004 c 199 art 14 s 18,19;
2014 c 170 s 14
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PROXY
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WESTERN CAPITAL RESOURCES, INC.
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PROXY
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PROXY FOR SPECIAL
MEETING OF SHAREHOLDERS
Wednesday, January, 20, 2016
8:30 a.m.
11550 “I”
Street, Suite 150
Omaha, Nebraska 68137
THIS PROXY IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, a shareholder of Western Capital Resources, Inc.,
hereby appoints John Quandahl and Steve Irlbeck, and each of them,
as proxies, with full power of substitution and re-substitution, to
vote on behalf of the undersigned the number of shares which the
undersigned is then entitled to vote at the special meeting of
shareholders of the company to be held at 11550 “I”
Street, Suite 150, Omaha, Nebraska 68137, on Wednesday, January 20,
2016, at 8:30 a.m. local time, and at any and all adjournments
thereof.
PROPOSALS: The Board of
Directors recommends a vote
FOR Proposals One and
Two.
1. To approve the
Company’s 2015 Stock Incentive Plan:
¨ FOR
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¨ AGAINST
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¨ ABSTAIN
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2. To approve the
proposal to reincorporate the company from Minnesota to
Delaware:
¨ FOR
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¨ AGAINST
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¨ ABSTAIN
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The undersigned hereby revokes all previous proxies relating to the
shares covered hereby and acknowledges receipt of the Notice and
Proxy Statement relating to the special meeting of shareholders.
When properly executed, this proxy will be voted on the proposal
set forth herein as directed by the shareholder. The undersigned
authorizes the proxies to vote in their discretion upon such other
business as may properly come before the meeting.
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE AS SOON AS POSSIBLE. OR YOU CAN VOTE ONLINE. ACCESS “VOTE.CORPORATESTOCK.COM” AND FOLLOW THE ON-SCREEN INSTRUCTIONS. HAVE THIS PROXY BALLOT AVAILABLE WHEN YOU ACCESS THE WEB PAGE.
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Dated
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Signature
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Signature if held jointly
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(Please sign exactly as name appears at left.
When shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee or guardian,
or in some other fiduciary capacity, please give full title as
such. If a corporation, please sign in full corporate name by
president or other authorized officer(s). If a partnership, please
sign in partnership name by authorized person(s).)
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