Filed by the Registrant ☒
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Filed by a Party other than the Registrant ☐
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☐
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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☒
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
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(1)
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To elect two Class II directors, nominated by our Board of Directors, to serve until our 2024 annual meeting of stockholders and until their successors are duly elected and qualified;
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(2)
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To ratify the selection of KPMG LLP (“KPMG”) as our independent registered public accounting firm for the fiscal year ending December 31, 2021;
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(3)
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To approve the reincorporation of the Company from the State of Nevada to the State of Delaware;
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(4)
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To conduct an advisory (non-binding) vote on executive compensation;
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(5)
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To approve an amendment to the Company’s Amended and Restated Articles of Incorporation to increase the number of authorized shares of common stock to a total of 240,000,000; and
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(6)
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To transact such other business as may properly come before the Annual Meeting or any adjournment(s) thereof.
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Name
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Year
Initially
Elected
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Age
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Position(s)
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Expiration of
Term
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Class
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Raj Mehra, Ph.D.
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2019
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61
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Chairman, Chief Executive Officer, President and
Interim Chief Financial Officer
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2021
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II
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Brian Lian, Ph.D.(1)(2)(3)
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2019
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55
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Director
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2021
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II
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Daniel J. O’Connor, J.D.(1)(3)
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2019
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56
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Director
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2022
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I
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Richard W. Pascoe
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2013
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57
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Director
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2023
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III
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Judith Dunn, Ph.D.(1)(2)
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2020
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58
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Director
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2023
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III
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(1)
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Member of the Audit Committee of the Board (the “Audit Committee”).
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(2)
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Member of the Corporate Governance/Nominating Committee.
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(3)
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Member of the Compensation Committee of the Board (the “Compensation Committee”).
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2020
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2019
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Audit Fees(1)
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$509,000
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$414,200
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Audit Related Fees
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—
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—
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Tax Fees(2)
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15,500
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—
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All Other Fees
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—
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—
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Total All Fees
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$524,500
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$414,200
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(1)
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Audit fees consist of estimated fees for professional services rendered for the audit of our annual financial statements included in our Form 10-K filing and review of financial statements included in our quarterly Form 10-Q filings, reviews of registration statements and issuances of consents, comfort letters and services that are normally provided in connection with statutory and regulatory filings or engagements.
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(2)
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Consists of fees billed for tax compliance and consulting.
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•
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The affairs of the Company will cease to be governed by Nevada corporation laws and will become subject to the Delaware corporation laws.
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The resulting Delaware corporation (“Seelos-Delaware”) will be the same entity as the Company as currently incorporated in Nevada (“Seelos-Nevada”) and will continue with all of the rights, privileges and powers of Seelos-Nevada, will possess all of the properties of Seelos-Nevada, will continue with all of the debts, liabilities and obligations of Seelos-Nevada and will continue with the same officers and directors of Seelos-Nevada immediately prior to the Reincorporation, as more fully described below.
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•
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When the Reincorporation becomes effective, all of our issued and outstanding shares of capital stock will be automatically converted into issued and outstanding shares of capital stock of Seelos-Delaware, without any action on the part of our stockholders. The Reincorporation will have no effect on the trading of our shares of Common Stock on the Nasdaq Capital Market under the symbol “SEEL”. Seelos-Delaware will continue to file periodic reports and other documents as and to the extent required by the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Shares of our capital stock that are freely tradeable prior to the Reincorporation will continue to be freely tradeable as shares of Seelos-Delaware capital stock, and shares of our capital stock that are subject to restrictions prior to the Reincorporation will continue to be subject to the same restrictions as shares of Seelos-Delaware capital stock. The Reincorporation will not change the respective positions of the Company or our stockholders under federal securities laws. Pursuant to the Reincorporation, Seelos-Delaware will have or assume all of Seelos-Nevada’s obligations related to convertible or exchangeable securities, including warrants, and other rights to purchase or receive Seelos-Nevada common stock, which shall become the right to purchase or receive the same number of shares of Seelos-Delaware common stock.
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Upon effectiveness of the Reincorporation, all of our employee benefit and incentive plans will become Seelos-Delaware plans, and each option, equity award or other right issued under such plans will automatically be converted into an option, equity award or right to purchase or receive the same number of shares of Seelos-Delaware common stock, at the same price per share, upon the same terms and subject to the same conditions as prior to the Reincorporation. In addition, our employment contracts and other employee benefit arrangements will be continued by Seelos-Delaware upon the terms and subject to the conditions in effect at the time of the Reincorporation.
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our corporation would be governed by the DGCL, which is generally acknowledged to be one of the most advanced and flexible corporate statutes in the United States;
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the responsiveness and efficiency of the Division of Corporations of the Secretary of State of the State of Delaware;
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the Delaware General Assembly, which each year considers and adopts statutory amendments proposed by the Corporation Law Section of the Delaware State Bar Association in an effort to ensure that the corporate statute continues to be responsive to the changing needs of businesses;
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the Court of Chancery of the State of Delaware (the “Court of Chancery”), which has exclusive jurisdiction over matters relating to the DGCL and in which cases are heard by judges, without juries, who have many years of experience with corporate issues, which can lead to quick and effective resolution of corporate litigation; and the Delaware Supreme Court, which is highly regarded; and
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the well-established body of case law construing Delaware law, which has developed over the last century and which many believe provides businesses with a greater degree of predictability than most, if not all, other jurisdictions.
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Provision
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NRS, Nevada Articles of Incorporation and
Nevada Bylaws
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DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
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Amendment of Charter Documents
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Nevada law requires the adoption of a resolution by the corporation’s board of directors followed by the affirmative vote of the majority of the voting power of the corporation to approve any amendment to the articles of incorporation. If any proposed amendment would adversely alter or change any preference or any relative or other right given to any class or series of outstanding shares, then the amendment must be approved by the vote, in addition to the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series adversely affected by the amendment. NRS 78.390.
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Delaware law requires the adoption of a resolution by the corporation’s board of directors followed by the affirmative vote of the majority of shares present in person or represented by proxy and entitled to vote to approve any amendment to the certificate of incorporation, unless a greater percentage vote is required by the certificate of incorporation. Where a separate vote by class or series is required, the affirmative vote of a majority of the shares of such class or series is required unless the certificate of incorporation requires a greater percentage vote. Further, Delaware law states that if an amendment would (i) increase or decrease the aggregate number of authorized shares of a class, (ii) increase or decrease the par value of shares of a class, or (iii) alter or change the powers, preferences or special rights of a particular class or series of stock so as to affect them adversely, the class or series so affected shall be given the power to vote as a class notwithstanding the absence of any specifically enumerated power in the certificate of incorporation. DGCL Section 242.
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The Nevada Articles of Incorporation provide that the affirmative vote of the holders of at least 66-2/3% of the voting power of the shares entitled to vote thereon shall be required to amend or repeal Articles Fourth, Sixth, Seventh or Eighth of the Nevada Articles of Incorporation.
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The Delaware Certificate of Incorporation provides that the affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of capital stock of Seelos-Delaware entitled to vote thereon shall be required to amend or repeal, or to adopt any provision inconsistent with Articles Sixth, Eighth, Ninth, Tenth or Eleventh of the Delaware Certificate of Incorporation.
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Amendment of Bylaws
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Nevada law provides that, unless otherwise prohibited by any bylaw adopted by the stockholders, the directors may adopt, amend or repeal any bylaw, including any bylaw adopted by the stockholders. The articles of incorporation may grant the authority to adopt, amend or repeal bylaws exclusively to the directors. NRS 78.120.
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The power to adopt, amend or repeal the bylaws of a corporation shall be vested in the stockholders entitled to vote, provided that the corporation in its certificate of incorporation may confer such power on the board of directors, although the power vested in the stockholders is not divested or limited where the board of directors also has such power. DGCL Section 109.
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Provision
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NRS, Nevada Articles of Incorporation and
Nevada Bylaws
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DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
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The Nevada Articles of Incorporation and Nevada Bylaws are consistent with the NRS. In addition, the Nevada Articles of Incorporation and the Nevada Bylaws state that any amendment or repeal of the Nevada Bylaws, and any adoption of new bylaws, by stockholders requires the affirmative vote of a majority of the outstanding voting power of the Company, voting together as a single class.
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The Delaware Certificate of Incorporation expressly authorizes the Board to adopt, amend, alter or repeal the Delaware Bylaws. The Delaware Certificate of Incorporation and the Delaware Bylaws also provide that the affirmative vote of the holders of at least two thirds in voting power of the outstanding shares of capital stock entitled to vote thereon shall be required to adopt, amend, alter or repeal the Delaware Bylaws.
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Number of Authorized Directors
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A corporation must have at least one director, and may provide in its articles of incorporation or in its bylaws for a fixed number of directors or a variable number of directors, and for the manner in which the number of directors may be increased or decreased. Unless otherwise provided in the articles of incorporation, directors need not be stockholders. NRS 78.115.
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The board of directors of a corporation shall consist of 1 or more members, each of whom shall be a natural person. 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. DGCL Section 141.
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The Nevada Articles of Incorporation provide that the number of directors may be increased or decreased from time to time by resolution of the Board, but the number of directors shall not be reduced to less than three (3). The Nevada Bylaws provide that the Board shall consist of at least three (3), but no more than nine (9) individuals.
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The Delaware Certificate of Incorporation (which does not fix the number of directors) and the Delaware Bylaws do not change this statutory rule.
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Filling Vacancies on the Board of Directors
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All vacancies, including those caused by an increase in the number of directors, may be filled by a majority of the remaining directors, though less than a quorum, unless it is otherwise provided in the articles of incorporation. Unless otherwise provided in the articles of incorporation, pursuant to a resignation by a director, the board may fill the vacancy or vacancies with each director so appointed to hold office during the remainder of the term of office of the resigning director or directors. NRS 78.335.
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All vacancies on the board of directors of a Delaware corporation may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director unless the certificate of incorporation provides otherwise. Unless otherwise provided in the certificate of incorporation, the board may fill the vacancies for the remainder of the term of office of any resigning director or directors. Further, if, at the time of filling any vacancy, the directors then in office shall constitute less than a majority of the whole board, the Court of Chancery may, upon application of any stockholder or stockholders holding at least 10% of the voting stock at the time outstanding having the right to vote for such directors,
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Provision
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NRS, Nevada Articles of Incorporation and
Nevada Bylaws
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DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
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summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office. DGCL Section 223.
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The Nevada Articles of Incorporation provide that newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board resulting from death, resignation, retirement, disqualification, removal from office or other cause shall, unless otherwise provided by law or resolution of the Board, be filled only by a majority of the directors then in office, though less than a quorum. The Nevada Articles of Incorporation further provide that directors appointed by the Board to fill a vacancy shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which the director has been appointed expires.
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The Delaware Certificate of Incorporation is consistent with the DGCL and is substantially similar to the Nevada Articles of Incorporation. However, as noted, we believe that the DGCL provides greater protection to the Company’s stockholders by permitting stockholders representing at least 10% of the issued and outstanding shares to apply to the Court of Chancery to have an election of directors in the situation where the directors in office constitute less than a majority of the whole board of directors.
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Removal of Directors
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Any one or all of the directors of a corporation may be removed by the holders of not less than two-thirds of the voting power of a corporation’s issued and outstanding stock, which voting standard may be increased above two-thirds in the articles of incorporation, but not reduced below two-thirds. Nevada law does not distinguish between removal of directors with or without cause. NRS 78.335.
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Any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors, except as follows: (a) unless the certificate of incorporation otherwise provides, in the case of a corporation whose board is classified as provided in DGCL Section 141(d), stockholders may effect such removal only for cause; or (b) in the case of a corporation having cumulative voting, if less than the entire board is to be removed, no director may be removed without cause if the votes cast against such director’s removal would be sufficient to elect such director if then cumulatively voted at an election of the entire board of directors, or, if there be classes of directors, at an election of the class of directors of which such director is a part. DGCL Section 141.
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The Nevada Articles of Incorporation are consistent with the NRS and provide that any one or all of the directors may be removed from office at any time, but only for cause and only by the affirmative vote
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The Delaware Certificate of Incorporation provides that directors of Seelos-Delaware may be removed, but only for cause and only by the affirmative vote of the holders of at least two-thirds in voting power of
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Provision
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NRS, Nevada Articles of Incorporation and
Nevada Bylaws
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DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
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of the holders of at least 66-2/3% of the voting power of all of the then-outstanding shares of capital stock of the Company entitled to vote generally in the election of directors.
The Nevada Bylaws are consistent with the NRS in providing that removal of a director requires the vote or written consent of stockholders representing not less than two-thirds of the voting power of the issued and outstanding shares entitled to vote.
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the outstanding shares of capital stock of the Company entitled to vote at an election of directors.
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Board Action by Written Consent
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Nevada law provides that, unless the articles of incorporation or bylaws provide otherwise, any action required or permitted to be taken at a meeting of the board of directors or of a committee thereof may be taken without a meeting if, before or after the action, a written consent thereto is signed by all the members of the board or committee. NRS 78.315
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Delaware law provides that, unless the certificate of incorporation or bylaws provide otherwise, any action required or permitted to be taken at a meeting of the board of directors or of any committee thereof may be taken without a meeting if all members of the board or committee 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. DGCL Section 141.
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The Nevada Bylaws are consistent with the NRS.
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The Delaware Bylaws are consistent with the DGCL and are substantially similar to the Nevada Bylaws in regard to board and committee action by written consent.
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Interested Party Transaction
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Nevada law provides that no contract or transaction between a corporation and one or more of its directors or officers, or between a corporation and any other entity of which one or more of its directors or officers are directors or officers, or in which one or more of its directors or officers have a financial interest, is void or voidable if one of the following circumstances exists: (a) the director’s or officer’s interest in the contract or transaction is known to the board of directors, and the transaction is approved or ratified by the board of directors in good faith by a vote sufficient for the purpose (without counting the vote of the interested director or officer); (b) the director’s or officer’s interest in the contract or transaction is known to the stockholders,
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Delaware law provides that no contract or transaction between a corporation and one or more of its directors or officers, or between a corporation and any other corporation, partnership, association or other entity in which one or more of its directors or officers are directors or officers, or in which one or more of its directors or officers have a financial interest, shall be void or voidable if (a) the material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or known to the board of directors or a committee thereof, which authorizes the contract or transaction in good faith by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors are less than a
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Provision
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NRS, Nevada Articles of Incorporation and
Nevada Bylaws
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DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
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and the transaction is approved or ratified by a majority of the stockholders holding a majority of voting power (and the votes of the common or interested directors or officers must be counted); (c) the fact of the common interest is not known to the director or officer at the time the transaction is brought before the board of directors; or (d) the contract or transaction is fair to the corporation at the time it is authorized or approved. NRS 78.140.
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quorum, (b) the material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or known to the stockholders entitled to vote thereon and the contract or transaction is specifically approved in good faith by the stockholders, or (c) the contract or transaction is fair to the corporation as of the time it is authorized, approved or ratified by the board of directors, a committee thereof or the stockholders. DGCL Section 144.
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Nevada and Delaware law have similar statutes, but Delaware law will not provide additional provisions regarding a conflict of interest that was not known to a director or officer at the time the transaction is brought before the board of directors.
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Stockholder Voting - Quorum
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Unless the NRS, the articles of incorporation or bylaws otherwise provide for different proportions: (a) a majority of the voting power, present in person or by proxy at a meeting of stockholders (regardless of whether the proxy has authority to vote on any matter), constitutes a quorum for the transaction of business; and (b) action by the stockholders on a matter other than the election of directors is approved if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action. NRS 78.320. Unless elected by written consent of the stockholders, or unless the articles of incorporation or the bylaws require more than a plurality of the votes cast, directors must be elected at the annual meeting of the stockholders by a plurality of the votes cast at the election. NRS 78.330.
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The certificate of incorporation or bylaws may specify the number of shares and/or the amount of other securities having voting power the holders of which shall be present or represented by proxy at any meeting in order to constitute a quorum for, and the votes that shall be necessary for, the transaction of any business, but in no event shall a quorum consist of less than 1/3 of the shares entitled to vote at the meeting, except that, where a separate vote by a class or series or classes or series is required, a quorum shall consist of no less than 1/3 of the shares of such class or series or classes or series. In the absence of such specification in the certificate of incorporation or bylaws: (a) a majority of the shares entitled to vote, present in person or represented by proxy, shall constitute a quorum at a meeting of stockholders; (b) in all matters other than the election of directors, the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders; (c) directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors; and (d) where a separate vote by a class or series or classes or series is required, a
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Provision
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NRS, Nevada Articles of Incorporation and
Nevada Bylaws
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DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
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majority of the outstanding shares of such class or series or classes or series, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter and, in all matters other than the election of directors, the affirmative vote of the majority of shares of such class or series or classes or series present in person or represented by proxy at the meeting shall be the act of such class or series or classes or series. A bylaw amendment adopted by stockholders which specifies the votes that shall be necessary for the election of directors shall not be further amended or repealed by the board of directors. DGCL Section 216.
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The Nevada Bylaws are consistent with the NRS.
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Consistent with the DGCL, the Delaware Bylaws state that the holders of a majority in voting power of the capital stock issued and outstanding and entitled to vote, present in person, or by remote communication, if applicable, or represented by proxy, shall constitute a quorum for the transaction of business. The Delaware Bylaws and Nevada Bylaws are substantially similar with respect to quorum requirements.
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Duration of Proxies
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A proxy is effective only for a period of six months from the date of its creation, unless it otherwise provided by the stockholder in the proxy, which stated duration may not exceed seven years. A proxy shall be deemed irrevocable if the written authorization states that the proxy is irrevocable, but is irrevocable only for as long as it is coupled with an interest sufficient in law to support an irrevocable power. NRS 78.355.
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A proxy executed by a stockholder will remain valid for a period of three years, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. DGCL Section 212.
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The Nevada Bylaws do not change this statutory rule.
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The Delaware Bylaws do not change this statutory rule. The statutory default under the DGCL provides that proxies remain valid for a longer duration than the statutory default under the NRS.
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Stockholder Vote for Mergers and
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Under Nevada law, approval by the board of directors and a majority of outstanding
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Under Delaware law, a majority of outstanding shares entitled to vote, as well
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Provision
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NRS, Nevada Articles of Incorporation and
Nevada Bylaws
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DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
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Other Corporate Reorganizations
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shares entitled to vote is required for a merger or a sale of all or substantially all of the assets of the corporation. Generally, Nevada law does not require a stockholder vote of the surviving corporation in a merger if: (a) the plan of merger does not amend the existing articles of incorporation; (b) each stockholder of the surviving corporation whose shares were outstanding immediately before the effective date of the merger will hold the same number of shares, with identical designations, preferences, limitations and relative rights immediately after the merger; (c) the number of voting shares issued and issuable as a result of the merger will not exceed 20% of the total number of voting shares of the surviving corporation outstanding immediately before the merger; and (d) the number of participating shares issued and issuable as a result of the merger will not exceed 20% of the total number of participating shares outstanding immediately before the merger. NRS 92A.130.
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as approval by the board of directors, is required for a merger or a sale of substantially all of the assets of the corporation. Generally, Delaware law does not require a stockholder vote of the surviving corporation in a merger (unless the corporation provides otherwise in its certificate of incorporation) if: (a) the plan of merger does not amend the existing certificate of incorporation; (b) each share of stock of the surviving corporation outstanding immediately before the effective date of the merger is an identical outstanding share after the effective date of the merger; and (c) either no shares of common stock of the surviving corporation and no shares, securities or obligations convertible into such stock are to be issued or delivered under the plan of merger, or the authorized unissued shares or treasury shares of common stock of the surviving corporation to be issued or delivered under the plan of merger plus those initially issuable upon conversion of any other shares, securities or obligations to be issued or delivered under such plan do not exceed 20% of the shares of common stock of such constituent corporation outstanding immediately prior to the effective date of the merger. DGCL Section 251.
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Neither the Nevada Articles of Incorporation nor the Nevada Bylaws change this statutory rule.
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Neither the Delaware Certificate of Incorporation nor the Delaware Bylaws change this statutory rule. Nevada and Delaware law are substantially similar in regard to stockholder approval of mergers and other corporate reorganizations.
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Special Meetings of Stockholders
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Unless otherwise provided in the articles of incorporation or bylaws, the entire board of directors, any two directors, or the president may call annual and special meetings of the stockholders and directors. NRS 78.310
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Special meetings of the stockholders may be called by the board of directors or by such person or persons as may be authorized by the certificate of incorporation or by the bylaws. DGCL Section 211.
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The Nevada Articles of Incorporation and Nevada Bylaws provide that a special meeting of the stockholders may be called only by the Chairperson of the Board or the President, or by the Board acting pursuant to a resolution adopted by a majority of the total number of authorized
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The Delaware Certificate of Incorporation and Delaware Bylaws state that special meetings of the stockholders may be called at any time only by the Board, the chairperson of the Board, the chief executive officer or the president (in the absence of a chief executive officer), and
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Provision
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NRS, Nevada Articles of Incorporation and
Nevada Bylaws
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DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
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directors, whether or not there exist any vacancies in previously authorized directorships.
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may not be called by any other person or persons. The Delaware Certificate of Incorporation and Delaware Bylaws are substantially similar to the Nevada Articles of Incorporation and Nevada Bylaws.
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Stockholder Action by Written Consent
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Nevada law provides that, unless the articles of incorporation or bylaws otherwise provide, any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if a written consent is signed by stockholders holding at least a majority of the voting power or such proportion of voting power as is required for such an action at a meeting. NRS 78.320.
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Delaware law provides that, unless the certificate of incorporation provides otherwise, any action required or permitted to be taken at a meeting of the stockholders 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 consents to the action in writing. In addition, Delaware law requires that the corporation give prompt notice of the taking of a corporate action without a meeting by less than unanimous written consent to those stockholders who did not consent in writing. DGCL Section 228.
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The Nevada Bylaws do not change this statutory rule.
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The Delaware Certificate of Incorporation and Delaware Bylaws do not allow stockholders to act by written consent, and therefore differ from the Nevada Bylaws.
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Advance Notice Provisions
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Nevada law permits a corporation to include in its bylaws provisions requiring advance notice of and information requirements for business or stockholder proposals to be brought before an annual or special meeting of stockholders, including nominations of persons for election as directors.
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Delaware law permits a corporation to include in its bylaws provisions requiring advance notice of stockholder proposals.
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The Nevada Bylaws provide that advance notice of a stockholder’s proposal or director nominee must be delivered to the Secretary at the Company’s principal executive offices not less than sixty (60) days nor more than ninety (90) days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that if the date of the pending annual meeting is advanced by more than thirty (30) days or delayed by more than sixty (60) days from such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the ninetieth (90th) day prior to such pending
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The Delaware Bylaws provide that advance notice of a stockholder’s proposal or director nominee must be delivered to, or mailed and received by the secretary at, the Company’s principal executive offices not less than ninety (90) days nor more than one hundred twenty (120) days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that if the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, notice by the stockholder to be timely must be so delivered, or mailed and received, not earlier than the close of business on the
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Provision
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NRS, Nevada Articles of Incorporation and
Nevada Bylaws
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DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
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annual meeting and not later than the close of business on the later of (i) the sixtieth (60th) day prior to such pending annual meeting, or (ii) the tenth (10th) day following the day on which public disclosure of the date of such annual meeting was first made.
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one hundred twentieth (120th) day prior to such annual meeting and not later than the later of the close of business on (i) the ninetieth (90th) day prior to such annual meeting, or (ii) the tenth (10th) day following the day on which public disclosure of the date of such annual meeting was first made.
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Effect of Failure to Hold an Annual Meeting of Stockholders
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If a corporation fails to elect directors within 18 months after the last election of directors, a Nevada district court will have jurisdiction in equity and may order an election upon petition of one or more stockholders holding stock entitling them to exercise at least 15% of the voting power. NRS 78.345.
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If an annual meeting for election of directors is not held on the date designated or an action by written consent to elect directors in lieu of an annual meeting has not been taken within 30 days after the date designated for the annual meeting, or if no date has been designated, for a period of 13 months after the latest to occur of the organization of the corporation, its last annual meeting or the last action by written consent to elect directors in lieu of an annual meeting, the Court of Chancery may summarily order a meeting to be held upon the application of any stockholder or director. DGCL Section 211.
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The Nevada Bylaws do not change this statutory rule.
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The Delaware Bylaws do not change this statutory rule. As between Nevada law and Delaware law, Delaware law provides for a shorter interval than Nevada law (13 months versus 18 months) before a stockholder can apply to a court to order a meeting for the election of directors. Also, Nevada law requires that application be made by a stockholder holding at least 15% of the voting power; whereas, Delaware law permits any stockholder or director to make the application.
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Adjournment of Stockholder Meetings
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Unless the articles of incorporation or bylaws otherwise provide, if a stockholders’ meeting is adjourned to another date, time or place, notice need not be delivered of the date, time or place of the adjourned meeting if they are announced at the meeting at which the adjournment is taken. If a new record date is fixed for the adjourned or postponed meeting, notice of the adjourned or postponed meeting must be delivered to each stockholder of record as of the new record date. The board of directors must fix a new record date if the meeting is
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If a meeting of stockholders is adjourned and the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting must be given to each stockholder of record entitled to vote at the meeting. At the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting. DGCL Section 222.
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Provision
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| |
NRS, Nevada Articles of Incorporation and
Nevada Bylaws
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| |
DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
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| |
adjourned or postponed to a date more than 60 days later than the meeting date set for the original meeting. NRS 78.370.
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The Nevada Bylaws do not change this statutory rule.
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The Delaware Bylaws do not change this statutory rule.
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Limitation on Director Liability
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Under Nevada law, except as provided in the NRS or unless the articles of incorporation or an amendment thereto (filed on or after October 1, 2003) provides for greater individual liability, a director or officer is not individually liable to the corporation or its stockholders or creditors for any damages as a result of any act or failure to act in his or her capacity as a director or officer unless the trier of fact determines that the presumption that such director or officer acted in good faith is rebutted and it is proven that: (a) the director’s or officer’s act or failure to act constituted a breach of his or her fiduciary duties as a director or officer; and (b) the breach of those duties involved intentional misconduct, fraud, or a knowing violation of law. NRS 78.138.
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Under Delaware law, if a corporation’s certificate of incorporation so provides, the personal liability of a director for monetary damages for breach of fiduciary duty as a director may be eliminated or limited. A corporation’s certificate of incorporation, however, may not limit or eliminate a director’s personal liability (a) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (b) for acts or omissions not in good faith or involving intentional misconduct or a knowing violation of law, (c) for the payment of unlawful dividends, stock repurchases or redemptions, or (d) for any transaction from which the director derived an improper personal benefit. DGCL Section 102.
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The Nevada Articles of Incorporation provide that a director shall have no personal liability for damages for breach of fiduciary duty as a director, except for (a) acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or (b) the payment of dividends in violation of the applicable statutes of Nevada; however, those provisions were adopted in 1996, prior to the October 2003 date set forth in NRS 78.138 and therefore the statutory provisions should govern. The Articles of Incorporation also provide that, if the NRS is amended to authorize corporate action further eliminating or limiting the personal liability of directors, the liability of a director shall be eliminated or limited to the fullest extent permitted by the NRS. The Nevada Bylaws do not change the statutory rule set forth in NRS 78.138.
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Consistent with this statutory rule, the Delaware Certificate of Incorporation limits the personal liability of a director for monetary damages for any breach of fiduciary duty as permitted under the DGCL. Delaware law is more restrictive than Nevada law with respect to limiting or eliminating the personal liability of directors, and does not address exculpation of corporate officers as is expressly included in NRS 78.138.
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Indemnification
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NRS 78.7502 permits a corporation to indemnify, pursuant to that statutory provision, a present or former director,
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A corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or
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Provision
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| |
NRS, Nevada Articles of Incorporation and
Nevada Bylaws
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| |
DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
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| |
officer, employee or agent of the corporation, or of another entity or enterprise for which such person is or was serving in such capacity at the request of the corporation, who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, except an action by or in the right of the corporation, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection therewith, arising by reason of such person's service in such capacity if such person (i) is not liable pursuant to NRS 78.138, or (ii) acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to a criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. In the case of actions brought by or in the right of the corporation, however, no indemnification pursuant to NRS 78.7502 may be made for any claim, issue or matter as to which such person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, 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 the action or suit was brought or other court of competent jurisdiction determines 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 deems proper. Any discretionary indemnification pursuant to NRS 78.7502, unless ordered by a court or advanced to a director or officer by the corporation in accordance with the NRS, may be made by a corporation only as authorized in each specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances. Such determination must be made (1) by the stockholders, (2) by the board of directors by majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding, (3) if a majority vote of a quorum
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completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or 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), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if: (a) 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 (b) with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. With respect to actions by or in the right of the corporation, no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit is brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnification for such expenses which such court shall deem proper. A director or officer who is successful, on the merits or otherwise in defending any proceeding subject to the Delaware corporate statutes’ indemnification provisions shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith. DGCL Section 145.
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Provision
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| |
NRS, Nevada Articles of Incorporation and
Nevada Bylaws
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| |
DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
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consisting of directors who were not parties to the action, suit or proceeding so orders, by independent legal counsel in a written opinion, or (4) if a quorum consisting of directors who were not parties to the action, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion. NRS 78.751 further provides that indemnification pursuant to NRS 78.7502 does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the articles of incorporation or any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, for either an action in the person's official capacity or an action in another capacity while holding office, except that indemnification, unless ordered by a court pursuant to NRS 78.7502 or for the advancement of expenses, may not be made to or on behalf of any director or officer finally adjudged by a court of competent jurisdiction, after exhaustion of any appeals, to be liable for intentional misconduct, fraud or a knowing violation of law, and such misconduct, fraud or violation was material to the cause of action.
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The Nevada Articles of Incorporation provide that the Company shall provide indemnification consistent with the NRS and that such indemnification shall be against all loss, liability and expense (including attorneys’ fees, costs, damages, judgments, fines, amounts paid in settlement and ERISA excise taxes or penalties) actually and reasonably incurred by or on behalf of a director or officer in connection with such action, suit or proceeding, including any appeal.
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The Delaware Certificate of Incorporation and the Delaware Bylaws provide that the Company shall provide indemnification consistent with the DGCL and that such indemnification shall be against all expenses (including, without limitation, attorneys’ fees), liabilities, losses, judgments, fines (including, without limitation, excise taxes and penalties arising under the Employee Retirement Income Security Act of 1974) and amounts paid in settlement actually and reasonably incurred. The indemnification provisions of the NRS and DGCL are substantially similar.
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The Nevada Bylaws mandate indemnification substantially similar to that contemplated by NRS 78.7502.
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We expect to enter into the Delaware Indemnification Agreement with our executive officers and directors based upon the indemnification provisions of the DGCL.
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Provision
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| |
NRS, Nevada Articles of Incorporation and
Nevada Bylaws
|
| |
DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
|
Advancement of Expenses
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Nevada law provides that unless otherwise restricted by the articles of incorporation, the bylaws or an agreement made by the corporation, the corporation may pay the expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that the director or officer is not entitled to be indemnified by the corporation. The articles of incorporation, bylaws or an agreement made by the corporation may also make such advancement mandatory upon receipt of an undertaking to repay as described above. NRS 78.751.
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Delaware law provides that expenses (including attorneys’ fees) incurred by an officer or director of the corporation in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it is ultimately determined that such person is not entitled to be indemnified by the corporation as authorized under the indemnification laws of Delaware. Such expenses (including attorneys’ fees) may be so paid upon such terms and conditions as the corporation deems appropriate. Under Delaware law, unless otherwise provided in its certificate of incorporation or bylaws, a corporation has the discretion whether or not to advance expenses. DGCL Section 145.
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The Nevada Articles of Incorporation and the Nevada Bylaws mandate advancement of expenses upon receipt of an undertaking by or on behalf of the indemnitee to repay the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the Company.
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The Delaware Bylaws provide that such expenses shall be paid by the Company in advance of the final disposition of such matter; provided, however, that to the extent required by law, such payment shall be made only upon receipt of an undertaking by or on behalf of such director or officer to repay all amounts so advanced in the event that it is ultimately determined by final judicial decision form which there is no further right to appeal that such director or officer is not entitled to be indemnified by the Company. The Delaware Bylaws also provide that such advancement of expenses shall not be made if the Company determines that (a) such director or officer did not act in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the Company, or (b) with respect to any criminal action or proceeding, such director or officer had reasonable cause to believe his or her conduct was unlawful.
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Declaration and Payment of Dividends
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Except as otherwise provided in the articles of incorporation, a board of directors may authorize and the corporation may make distributions to the holders of any class or
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Subject to any restriction contained in a corporation’s certificate of incorporation, the board of directors may declare, and the corporation may pay, dividends or other
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Provision
|
| |
NRS, Nevada Articles of Incorporation and
Nevada Bylaws
|
| |
DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
|
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| |
series of the corporation’s shares, including distributions on shares that are partially paid. However, no distribution may be made if, after giving effect to such distribution: (a) the corporation would not be able to pay its debts as they become due in the usual course of business; or (b) except as otherwise specifically allowed by the articles of incorporation, the corporation’s total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the corporation were to be dissolved immediately after the time of the distribution, to satisfy the preferential rights upon such dissolution of stockholders whose preferential rights are superior to those receiving the distribution. NRS 78.288.
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distributions upon the shares of its capital stock either (a) out of “surplus”; or (b) in the event that there is no surplus, out of the net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Dividends may not be paid if the capital of the corporation is less than the total amount of capital represented by the outstanding stock of all classes having a preference upon the distribution of assets. “Surplus” is defined as the excess of the net assets of the corporation over the amount determined to be the capital of the corporation by the board of directors (which amount cannot be less than the aggregate par value of all issued shares of capital stock). DGCL Sections 154, 170.
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The Nevada Articles of Incorporation and the Nevada Bylaws do not change this statutory rule.
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The Delaware Certificate of Incorporation and the Delaware Bylaws are consistent with the DGCL.
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Business Combinations
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Nevada law prohibits certain business combinations between a Nevada corporation and an interested stockholder within two years after such person becomes an interested stockholder. Generally, an “interested stockholder” is a holder who is the beneficial owner of 10% or more of the voting power of a corporation’s outstanding stock and at any time within two years immediately before the date in question was the beneficial owner of 10% or more of the then outstanding stock of the corporation. A business “combination” is broadly defined and includes, among other transactions, a merger or consolidation, a sale or other disposition of assets having an aggregate market value equal to more than 5% of the consolidated assets of the corporation or the aggregate market value of the outstanding voting shares of the corporation or representing more than 10% of the earning power or net income of the corporation, the issuance or transfer of any shares of the corporation or a subsidiary of the corporation that have an aggregate market value equal to 5% or more of the aggregate market value of all the outstanding voting shares of the
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Delaware law prohibits, in certain circumstances, a “business combination” between the corporation and an “interested stockholder” within three years of the stockholder becoming an “interested stockholder.” Generally, an “interested stockholder” is a holder who, directly or indirectly, controls 15% or more of the outstanding voting stock or is an affiliate of the corporation and was the owner of 15% or more of the outstanding voting stock at any time within the three-year period prior to the date upon which the status of an “interested stockholder” is being determined. A “business combination” includes a merger or consolidation, a sale or other disposition of assets having an aggregate market value equal to 10% or more of the consolidated assets of the corporation or the aggregate market value of the outstanding stock of the corporation, any transaction which results in the issuance or transfer by the corporation or any direct or indirect majority-owned subsidiary of any stock of the corporation or of such subsidiary, certain transactions that would increase the interested stockholder’s proportionate share
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Provision
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| |
NRS, Nevada Articles of Incorporation and
Nevada Bylaws
|
| |
DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
|
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| |
corporation to the interested stockholder or its affiliate, the adoption of any plan or proposal for the liquidation or dissolution of the corporation under any agreement with the interested stockholder or any receipt of the benefit of any loan, advance, guarantee, pledge or other financial assistance or any tax credit or other tax advantaged provided by or through the corporation. This provision does not apply to a combination during the first two years after a person first became an interested stockholder if (i) the combination, or transaction by which the person first became an interested stockholder, is approved by the board of directors before the person first became an interested stockholder or (ii) the combination is approved by the board of directors and, at or after that time, the combination is approved at a meeting of the stockholders, and not by written consent, by the affirmative vote of the holders of stock representing at least 60% of the outstanding voting power of the corporation not beneficially owned by the interested stockholder or its affiliates. After such two year period, business combinations remain prohibited unless (a) the combination, or transaction by which the person first became an interested stockholder, is approved by the board of directors before the person first became an interested stockholder, (b) the combination is approved by a majority of the outstanding voting power of the corporation not beneficially owned by the interested stockholder or its affiliates or (c) the combination meets certain fair value requirements specified in NRS 78.411 to 78.444, inclusive. NRS 78.411-78.444. These laws generally apply to Nevada corporations with 200 or more stockholders of record.
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ownership in the corporation and any receipt of the benefit, directly or indirectly, of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation or any direct or indirect majority-owned subsidiary. This provision does not apply where, among other things, (i) the transaction which resulted in the individual becoming an interested stockholder is approved by the corporation’s board of directors prior to the date the interested stockholder acquired such 15% interest, (ii) upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the outstanding voting stock of the corporation at the time the transaction commenced, or (iii) at or after the date the person becomes an interested stockholder, the business combination is approved by a majority of the board of directors of the corporation and an affirmative vote of at least 66 2/3% of the outstanding voting stock at an annual or special meeting and not by written consent, excluding stock owned by the interested stockholder. This provision also does not apply if a stockholder acquires a 15% interest inadvertently and divests itself of such ownership and would not have been a 15% stockholder in the preceding three years but for the inadvertent acquisition of ownership. DGCL Section 203.
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A Nevada corporation may elect in its articles of incorporation not to be governed by these particular laws, but if such election is not made in the corporation's original articles of incorporation, the amendment (1) must be approved by the affirmative vote of the holders of stock
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The Delaware Certificate of Incorporation and the Delaware Bylaws do not change this statutory rule. Nevada law and Delaware law provide for different thresholds in determining whether or not a person is an “interested stockholder.” Under Delaware law, since the threshold is
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Provision
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| |
NRS, Nevada Articles of Incorporation and
Nevada Bylaws
|
| |
DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
|
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representing a majority of the outstanding voting power of the corporation not beneficially owned by interested stockholders or their affiliates and associates, and (2) is not effective until 18 months after the vote approving the amendment and does not apply to any combination with a person who first became an interested stockholder on or before the effective date of the amendment. We have not made such an election in our original articles of incorporation and the Nevada Articles of Incorporation do not include such an election.
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higher and because the DGCL provisions provide a carve-out for a hostile acquirer who completes a successful tender offer to own at least 85% of the outstanding shares, the DGCL provides less protection from hostile counterparties than under the NRS.
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Choice of Forum
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The Nevada Articles of Incorporation and the Nevada Bylaws do not contain any provisions governing selection of forum for litigating corporate claims.
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The Delaware Certificate of Incorporation contains a provision regarding choice of forum, which provides that unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Company under Delaware law, (b) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee of the Company to the Company or the Company’s stockholders, (c) any action asserting a claim against the Company or any of its directors, officers or other employees arising pursuant to any provision of the DGCL or the Delaware Certificate of Incorporation or the Delaware Bylaws, (d) any action asserting a claim against the Company or any of its directors, officers or other employees governed by the internal affairs doctrine of the State of Delaware, or (e) any other action asserting an “internal corporate claim,” as defined in Section 115 of the DGCL, in all cases subject to the Court of Chancery having personal jurisdiction over all indispensable parties named as defendants therein. Nothing in the choice of forum provision shall preclude stockholders that assert claims under the Securities Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), from bringing such claims in state or federal court, subject to applicable law. Any person or entity purchasing or
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Provision
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| |
NRS, Nevada Articles of Incorporation and
Nevada Bylaws
|
| |
DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
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otherwise acquiring any interest in any shares of our capital stock shall be deemed to have notice of and consented to this provision.
This choice of forum provision is not intended to apply to any actions brought under the Securities Act or the Exchange Act. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. However, the Delaware Bylaws do not relieve us of our duties to comply with federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations. The Delaware Bylaws also provide that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and consented to this choice of forum provision.
These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees. In addition, stockholders who do bring a claim in the Court of Chancery in the State of Delaware could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Delaware. Furthermore, the enforceability of similar choice of forum provisions in other companies’ governing documents has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable. If a court were to find the choice of forum provision to be inapplicable or unenforceable in an action,
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Provision
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| |
NRS, Nevada Articles of Incorporation and
Nevada Bylaws
|
| |
DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
|
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we may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm our results of operations.
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Control Share Acquisition Statute
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Under Nevada law, an acquiring person who acquires a controlling interest in an issuing corporation is prohibited from exercising voting rights on any control shares unless such voting rights are conferred by a majority vote of the disinterested stockholders of the issuing corporation at a special or annual meeting of stockholders. Unless otherwise provided in the articles of incorporation or the bylaws, if the control shares are accorded full voting rights and the acquiring person acquires control shares with a majority or more of all the voting power, any stockholder, other than the acquiring person, who does not vote in favor of authorizing voting rights for the control shares is entitled to dissent and demand payment of the fair value of his or her shares. A controlling interest means the ownership of outstanding voting shares of an issuing corporation sufficient to enable the acquiring person, directly or indirectly and individually or in association with others, to exercise: (i) one-fifth or more but less than one-third; (ii) one-third or more but less than a majority; or (iii) a majority or more, of all the voting power of the corporation in the election of directors. Control shares means those outstanding voting shares of an issuing corporation which an acquiring person: (a) acquires in an acquisition or offer to acquire in an acquisition; and (b) acquires within 90 days immediately preceding the date when the acquiring person became an acquiring person. The control share acquisition statutes apply only to an acquisition of a controlling interest in an issuing corporation (which means, as of any date, a Nevada corporation that then has 200 or more stockholders of record, at least 100 of whom have had addresses in Nevada appearing on the stock ledger of the corporation at all times during the 90 days immediately preceding such date, and which does business in Nevada directly or
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Delaware does not have a similar statute, and consistent with Delaware law, neither the Delaware Certificate of Incorporation nor the Delaware Bylaws will contain a provision similar to the NRS control share acquisition statute.
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Provision
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| |
NRS, Nevada Articles of Incorporation and
Nevada Bylaws
|
| |
DGCL, Delaware Certificate of
Incorporation and Delaware Bylaws
|
|
| |
through an affiliated corporation), unless the articles of incorporation or bylaws of the corporation in effect on the 10th day following the acquisition of a controlling interest by an acquiring person provide that the provisions of those sections do not apply. NRS 78.378-78.3793.
|
| |
|
|
| |
|
| |
|
|
| |
While the Nevada Bylaws were amended to include an opt-out provision under these control statutes in connection with the business combination of the Company with Seelos Therapeutics, Inc. in January 2019, neither the Nevada Articles of Incorporation nor the Nevada Bylaws contain any provisions generally pertaining to the acquisition of a controlling interest by the Company’s existing or future stockholders.
|
| |
|
Name
|
| |
Age
|
| |
Position
|
Raj Mehra, Ph.D.
|
| |
61
|
| |
Chairman, Chief Executive Officer, President and Interim Chief Financial Officer
|
Name and Position(s)
|
| |
Year
|
| |
Salary
|
| |
Option
Awards(2)
|
| |
Non-Equity
Incentive Plan
Compensation(3)
|
| |
All Other
Compensation(4)
|
| |
Total
|
Raj Mehra, Ph.D.,
Chairman, Chief Executive Officer, President and Interim Chief Financial Officer(1)
|
| |
2020
|
| |
$475,000
|
| |
$3,502,863
|
| |
$237,500
|
| |
$11,734
|
| |
$4,227,097
|
|
2019
|
| |
$437,500
|
| |
$—
|
| |
$235,000
|
| |
$5,250
|
| |
$677,750
|
(1)
|
Dr. Mehra joined the Company effective January 24, 2019.
|
(2)
|
Represents the grant date fair value of the stock option awards, calculated in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. These figures do not reflect the amortized compensation expense or value received by the officer in the year indicated or that may be received by the officer with respect to such equity awards.
|
(3)
|
Represents the bonus paid to the Named Executive Officer in cash in 2019 performance pursuant to our annual incentive program.
|
(4)
|
Dr. Mehra’s All Other Compensation in 2020 and 2019 consist of our matching and profit-sharing contribution to the 401(k) plan.
|
Name
|
| |
Title(s)
|
| |
Fiscal Year 2020
Incentive Bonus
Rate at Target
|
| |
2020 Evaluation
of Company
Performance
|
| |
Final Ratio
Incentive Bonus
as a Percentage
of Base Salary
|
| |
Fiscal 2020
Incentive
Bonus
Award
|
Raj Mehra, Ph.D.
|
| |
Chairman, Chief Executive Officer,
President and Interim
Chief Financial Officer
|
| |
50%
|
| |
100%
|
| |
50%
|
| |
$237,500
|
|
| |
Option Awards
|
||||||||||||
Name
|
| |
Grant Date
|
| |
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
| |
Number of
Securities
Underlying
Unexercised
Options
Non-Exercisable
(#)
|
| |
Option
Exercise Price
($)
|
| |
Option
Expiration
Date
|
Raj Mehra Ph.D.
|
| |
January 6, 2020(1)
|
| |
—
|
| |
731,000
|
| |
$1.42
|
| |
1/6/2030
|
|
June 11, 2020(2)
|
| |
—
|
| |
2,282,262
|
| |
$1.08
|
| |
6/11/2030
|
(1)
|
1/4th of the shares subject to the option vested on January 6, 2021, and 1/48th of the shares subject to the option vest monthly thereafter.
|
(2)
|
1/4th of the shares subject to the option will vest on June 11, 2021, and 1/4th of the shares subject to the option vest annually thereafter.
|
Name
|
| |
Cash
Compensation(1)
|
| |
Option Grants(2)
|
| |
Total
|
Richard W. Pascoe
|
| |
$40,000
|
| |
$18,160
|
| |
$58,160
|
Brian Lian, Ph.D.
|
| |
$67,000
|
| |
$18,160
|
| |
$85,160
|
Daniel J. O’Connor, J.D.
|
| |
$59,271
|
| |
$18,160
|
| |
$77,431
|
Judith Dunn, Ph.D.(3)
|
| |
$31,557
|
| |
$31,827
|
| |
$63,384
|
Dr. Robin L. Smith(4)
|
| |
$19,322
|
| |
$18,160
|
| |
$37,482
|
(1)
|
Includes the value of the annual retainers payable to our non-employee directors.
|
(2)
|
Represents the grant date fair value of the stock options granted in 2020, computed in accordance with FASB ASC Topic 718. As of December 31, 2020, each of our non-employee directors held stock options to purchase the following number of shares of our common stock: Mr. Pascoe, options to purchase 56,000 shares; Dr. Lian, options to purchase 56,000 shares; Mr. O’Connor, options to purchase 56,000 shares; and Dr. Dunn, options to purchase 40,000 shares.
|
(3)
|
Dr. Dunn was appointed to our Board on May 15, 2020.
|
(4)
|
On March 27, 2020, Dr. Robin L. Smith informed the Company that she decided not to stand for re-election to the board at the 2020 annual meeting of the stockholders. Dr. Smith’s term ended immediately after the completion of the 2020 annual meeting of the stockholders on May 15, 2020.
|
Plan category
|
| |
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
(a)
|
| |
Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)(1)
|
| |
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a)(2)
|
Equity compensation plans approved by security holders(3)(4)
|
| |
4,871,476
|
| |
$2.01
|
| |
3,181,105
|
Equity compensation plans not approved by security holders(5)
|
| |
248,101
|
| |
$1.19
|
| |
782,715
|
Total
|
| |
5,119,577
|
| |
$1.97
|
| |
3,963,820
|
(1)
|
Consists of the weighted average exercise price of outstanding options as of December 31, 2020.
|
(2)
|
Consists entirely of shares of Common Stock that remain available for future issuance under the Inducement Plan, the 2020 Employee Stock Purchase Plan (the “ESPP”) and the Amended and Restated 2012 Plan as of December 31, 2020.
|
(3)
|
Consists of options outstanding as of December 31, 2020 under Amended and Restated 2012 Plan and the NexMed, Inc. 2006 Stock Incentive Plan, and shares of Common Stock that remain available for future issuance under the ESPP.
|
(4)
|
The number of shares of Common Stock available for issuance under the Amended and Restated 2012 Plan will increase automatically on January 1st of each year, beginning January 1, 2020 and ending on (and including) January 1, 2029 by the lesser of (a) 4% of the number of shares of Common Stock issued and outstanding on a fully-diluted basis as of the close of business on the immediately preceding December 31, and (b) a number of shares of Common Stock set by the Board on or prior to each such January 1. On January 1, 2021 and each January 1 thereafter through January 1, 2030, the number of shares available for issuance under the ESPP shall be cumulatively increased by the lesser of (i) 1% of the number of shares of Common Stock issued and outstanding on the immediately preceding December 31, and (ii) such number of shares as determined by the Board or the Compensation Committee.
|
(5)
|
Consists of the Inducement Plan and the Seelos Therapeutics, Inc. 2016 Equity Incentive Plan.
|
|
| |
Submitted by the Audit Committee of the Board of Directors
|
|
| |
|
|
| |
Daniel J. O’Connor, J.D. (Chair)
|
|
| |
Brian Lian, Ph.D.
|
|
| |
Dr. Judith Dunn
|
Name and Address of Beneficial Owner
|
| |
Number of Shares
Beneficially Owned
|
| |
Percentage of
Class (%)(1)
|
Directors and Named Executive Officer(2)
|
| |
|
| |
|
Raj Mehra, Ph.D.(3)
|
| |
3,256,928
|
| |
4.1%
|
Daniel J. O’Connor, J.D., Director(4)
|
| |
54,666
|
| |
*
|
Brian Lian, Ph.D., Director(4)
|
| |
54,666
|
| |
*
|
Richard W. Pascoe, Director(5)
|
| |
56,404
|
| |
*
|
Judith Dunn, Ph.D., Director(4)
|
| |
29,333
|
| |
*
|
All current executive officer and directors as a group (five persons)(6)
|
| |
3,451,997
|
| |
4.4%
|
*
|
Denotes less than one percent.
|
(1)
|
Percentage ownership is calculated based on a total of 78,283,021 shares of Common Stock issued and outstanding as of March 23, 2021.
|
(2)
|
Unless otherwise indicated, the address for our executive officer and each of our directors is c/o 300 Park Avenue, 2nd Floor, New York, NY 10022.
|
(3)
|
Represents (i) 3,013,262 shares of Common Stock held directly by Dr. Mehra, and (ii) 243,666 shares of Common Stock issuable upon exercise of stock options that are exercisable within 60 days of March 23, 2021.
|
(4)
|
Comprised solely of shares of Common Stock issuable upon exercise of stock options that are exercisable within 60 days of March 23, 2021.
|
(5)
|
Represents (i) 5,180 shares of Common Stock held directly by Mr. Pascoe, (ii) 59 shares of Common Stock issuable upon exercise of warrants that are exercisable within 60 days of March 23, 2021, and (iii) 51,165 shares of Common Stock issuable upon exercise of stock options that are exercisable within 60 days of March 23, 2021.
|
(6)
|
Comprised of shares beneficially owned by each of our directors, including Dr. Mehra, our Chairman, Chief Executive Officer, President & Interim Chief Financial Officer.
|
|
| |
By Order of the Board of Directors,
|
|
| |
|
|
| |
Raj Mehra, Ph.D.
|
|
| |
Chief Executive Officer
|
|
| |
|
|
| |
April 12, 2021
|
|
| |
New York, New York
|
1.
|
The jurisdiction where the Non-Delaware Corporation first formed is the State of Nevada.
|
2.
|
The jurisdiction immediately prior to filing this Certificate is the State of Nevada.
|
3.
|
The date the Non-Delaware Corporation first formed is October 20, 1987.
|
4.
|
The name of the Non-Delaware Corporation immediately prior to filing this Certificate is Seelos Therapeutics, Inc.
|
5.
|
The name of the Corporation as set forth in the Certificate of Incorporation is Seelos Therapeutics, Inc.
|
|
| |
By:
|
| |
|
|
| |
Name:
|
| |
Raj Mehra, Ph.D.
|
|
| |
Title:
|
| |
President and Chief Executive Officer
|
A.
|
COMMON STOCK.
|
B.
|
PREFERRED STOCK.
|
|
| |
Seelos Therapeutics, Inc.
|
|||
|
| |
|
| |
|
|
| |||||
|
| |
By:
|
| |
|
|
| |
|
| |
Name: Raj Mehra, Ph.D.
Title: Chief Executive Officer & President
|
|
| |
|
| |
Page
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| |
REGISTERED OFFICE.
|
OTHER OFFICES.
|
PLACE OF MEETINGS.
|
ANNUAL MEETING.
|
SPECIAL MEETING.
|
ADVANCE NOTICE PROCEDURES FOR BUSINESS BROUGHT BEFORE A MEETING.
|
ADVANCE NOTICE PROCEDURES FOR NOMINATIONS OF DIRECTORS.
|
NOTICE OF STOCKHOLDERS’ MEETINGS.
|
MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE.
|
QUORUM.
|
ADJOURNED MEETING; NOTICE.
|
CONDUCT OF BUSINESS.
|
VOTING.
|
STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.
|
RECORD DATE FOR STOCKHOLDER NOTICE; VOTING.
|
PROXIES.
|
LIST OF STOCKHOLDERS ENTITLED TO VOTE.
|
POSTPONEMENT, ADJOURNMENT AND CANCELLATION OF MEETING.
|
INSPECTORS OF ELECTION.
|
POWERS.
|
NUMBER OF DIRECTORS.
|
ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS.
|
RESIGNATION AND VACANCIES.
|
PLACE OF MEETINGS; MEETINGS BY TELEPHONE.
|
REGULAR MEETINGS.
|
SPECIAL MEETINGS; NOTICE.
|
QUORUM.
|
BOARD ACTION BY CONSENT WITHOUT A MEETING.
|
FEES AND COMPENSATION OF DIRECTORS.
|
COMMITTEES OF DIRECTORS.
|
COMMITTEE MINUTES.
|
MEETINGS AND ACTION OF COMMITTEES.
|
OFFICERS.
|
APPOINTMENT OF OFFICERS.
|
SUBORDINATE OFFICERS.
|
REMOVAL AND RESIGNATION OF OFFICERS.
|
VACANCIES IN OFFICES.
|
REPRESENTATION OF SHARES OF OTHER ENTITIES.
|
AUTHORITY AND DUTIES OF OFFICERS.
|
MAINTENANCE OF RECORDS.
|
EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS.
|
STOCK CERTIFICATES; PARTLY PAID SHARES.
|
MULTIPLE CLASSES OR SERIES OF STOCK.
|
LOST CERTIFICATES.
|
CONSTRUCTION; DEFINITIONS.
|
DIVIDENDS.
|
FISCAL YEAR.
|
SEAL.
|
TRANSFER OF STOCK.
|
STOCK TRANSFER AGREEMENTS.
|
REGISTERED STOCKHOLDERS.
|
WAIVER OF NOTICE.
|
NOTICE BY ELECTRONIC TRANSMISSION.
|
DEFINITION OF ELECTRONIC TRANSMISSION.
|
ACTIONS, SUITS AND PROCEEDINGS OTHER THAN BY OR IN THE RIGHT OF THE CORPORATION.
|
ACTIONS OR SUITS BY OR IN THE RIGHT OF THE CORPORATION.
|
INDEMNIFICATION FOR EXPENSES OF SUCCESSFUL PARTY.
|
NOTIFICATION AND DEFENSE OF CLAIM.
|
ADVANCE OF EXPENSES.
|
PROCEDURE FOR INDEMNIFICATION AND ADVANCEMENT OF EXPENSES.
|
REMEDIES.
|
LIMITATIONS.
|
SUBSEQUENT AMENDMENT.
|
OTHER RIGHTS.
|
PARTIAL INDEMNIFICATION.
|
INSURANCE.
|
SAVINGS CLAUSE.
|
DEFINITIONS.
|
Executed on , 2021
|
| |
|
|||
|
| |
Name:
|
| |
Raj Mehra, Ph.D.
|
|
| |
Title:
|
| |
Secretary
|